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| Filed by Koninklijke Ahold N.V. Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Delhaize Group Commission File No.: 333-13302 Date: November 25, 2015
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Filed by Koninklijke Ahold N.V.
Pursuant to Rule
425 under the Securities Act of 1933
Subject Company: Delhaize Group
Commission File No.: 333-13302
Date: November 25, 2015
Joint Roadshow
November 25, 2015
London
“Excited and passionate about the merger”
The strategic rationale is compelling, joining forces to operate our strong
local brands of supermarkets, convenience stores and
online, with recognised strength in fresh, own-brands and
innovation, driven by skilled leadership across our banners
Delhaize Group Q3 2015 Results: Highlights
Strong
top-line in the US and SEE; start of market share recovery in Belgium
US
Continued strong volume growth with CSS of 1.7% (4.1% adjusted for Market Basket disruptions in 2014)
Stable underlying operating margin for first 3 quarters of 2015 at 4.0%
Relaunched 162 Easy, Fresh & Affordable Food Lion stores in Raleigh on October 14
Belgium
Returned to positive CSS and market share growth, supported by Affiliates
Underlying operating margin impacted by lower gross margin and implementation of Transformation Plan
Execution level in stores impacted by changes in the workforce; improvements will take time
Southeastern Europe
Positive CSS, real growth and
market share growth in the 3 countries
Continued underlying operating margin improvement
Full Year
Healthy Free Cash Flow generation
Cash capex of
approximately €700 million*
| * |
|
At identical exchange rates of €1 = $1.3285 |
Ahold Q3 2015 Results: Highlights
Strong sales
performance, net income and free cash flow
US
Underlying sales trends improved further with identical sales growth of 1.8% excluding gas (adjusted for prior year
competitive disruption)
Underlying operating margin at 4.0%, driven by Simplicity program
The Netherlands
Identical sales up 4.0%, reflecting positive sales trends at Albert Heijn and in online
Net consumer online sales growth of over 30%
Underlying operating margin at 4.6% including bol.com and higher pension costs. Margin excluding bol.com at 5.1%
Czech Republic
Identical sales excluding gas up 1.6% excluding former SPAR stores, margin further increasing to 1.3%
Full Year
Business performance on track to
deliver in line with full year expectations
Strong free cash flow, expected to be slightly ahead of last year
Bringing together two complementary businesses
Comparable business profiles & geographies with strong, trusted local brands
Net Sales Underlying Operating Income
€32.8bn €1.3bn
with underlying margin
of 3.9%
Free cash flow Market cap*
€1.1bn €15.8bn
Stores worldwide
Employees worldwide
3,206 227,000
Net Sales Underlying Operating Income
€21.4bn €0.8bn
with underlying margin of 3.6%
Free cash flow
Market cap*
€0.8bn €9.1bn
Stores worldwide Employees worldwide
3,280
143,000
Note: Sales, Underlying Operating Income, Stores and Employee JVs i.e. JMR for Ahold in Portugal and
Super Indo for Delhaize in Indonesia
| * |
|
Market cap 23 June 2015 |
Ahold Delhaize: A compelling strategic rationale
Merger to form a large, more innovative company with market-leading retail offerings and strong trusted local brands
Combination of two companies with complementary cultures, similar values and neighboring geographies, as well
as a shared focus on the customer
Will create a superior customer offering with enhanced choices in products,
services and shopping in stores and online in an omni-channel environment
The combined business will offer an
even better place to work for associates as well as a continued commitment to the local communities it serves
A strong financial profile will enable Ahold Delhaize to fund continued innovation, investment in future growth and to
deliver attractive returns to shareholders
Driving increased customer relevance and innovation
Convenience Stores
SpecialtyStores Hypers
Supermarkets Compact
Local Online
Our strong local brands form a solid foundation for the future
Delivering high-quality goods and services at competitive prices
A broader selection in fresh food, own brands and focus on innovation More and easier ways to shop in stores and online
Our dedicated teams are inspired and committed to a successful future together
Merger preparation workstreams focused on four areas
Merger
preparation
Future Organizational Integration
Transaction Strategy Structure Preparation
These
four workstreams have several taskforces in place
As an example: Integration taskforces under way to ensure
Day 1 readiness and capturing synergies:
Legal
US Merchandising & Sourcing •
EU Merchandising & Sourcing • Finance
Goods Not For Resale • IT
US Supply Chain • HR
Business Services
Cost synergies: realistic and achievable
Eliminate duplication, achieve ‘best-of-both’ efficiencies, leverage new scale
Sources of synergies over 3 years
General &
Administrative Branded
and Other 25-30% sourcing
15-20%
Indirect Non-
sourcing branded
sourcing
Europe
25-30%
70-75%
US
€500 million of run-rate synergies to be achieved by Year 3 after completion
40% at end of year 1
80% at end of year 2
100% at end of year 3
€350 million of one-off costs*
Incremental to existing cost saving programs Committed to deliver to the bottom line
| * |
|
Excluding transaction fees |
9
Key terms of the transaction
Financial Terms
Transaction Structure
Timetable
4.75 Ahold share for each Delhaize
share
€1 billion to be returned to Ahold shareholders via a capital return and a reverse stock split
prior to completion of the transaction Pro-forma ownership after completion circa: Delhaize 39% / Ahold 61%
Cross-border merger of Delhaize into Ahold; Ahold to be renamed Ahold Delhaize and to be ongoing listed entity, Listing on
Euronext Amsterdam and Euronext Brussels post completion of the merger
Ahold and Delhaize Extraordinary
Shareholder Meetings H1 2016
Completion Mid 2016
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Transaction closing process on track
Completion
expected mid-2016
EGM preparation
To be held in H1 2016
Documents under review
include:
F-4 (Ahold only): first confidential draft filed with SEC; now in review process
EU prospectus (Ahold only): first draft expected to be submitted to AFM in
November ‘15
Other EGM documentation on track including agendas, merger proposal and Board reports
Regulatory procedures
Belgium: referred by
European Commission to Belgian Competition Authority
Discussions with BCA ongoing
United States: HSR filings in July ‘15, submitting requested documents and data (“Second Request”)
Discussions with FTC ongoing
June 24 F4 EGM EGMs of Approval by Mid-2016
Merger confidential F4 filing invitations both competition merger
announcement filing with the made public and companies authorities completion
SEC materials
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Governance
Balanced structure with broad
expertise
Mats Jansson
Chairman
Jan Hommen Jacques de Vaucleroy
Vice Chairman Vice Chairman
Supervisory
Board
Remuneration Governance/Nomination
Committee Chair Committee Chair
Audit/Finance/Risk Sustainability/Innovation
Committee Chair Committee Chair
Two-tier
structure with Supervisory Board and Management Board
Four proposed committees: Audit/Finance/Risk,
Remuneration, Governance/Nomination, Sustainability/Innovation Balanced governance Diversity in experience, nationalities and backgrounds Presidium: Mats Jansson, Jan Hommen Dutch entity with Dutch Corporate Governance Code Corporate HQ in NL and
European HQ in Brussels Supervisory Board member (re-) appointments at upcoming Ahold EGM
12
Management Board and Executive Committee
Strength, depth and retail experience in leadership team
Dick Boer Frans Muller Jeff Carr Pierre Bouchut Kevin Holt James McCann
CEO Deputy CEO and CFO COO Europe * COO USA COO USA
Chief Integration Officer
Management Board responsible for overall management and decision-making
Executive Committee, including four functional leaders, responsible for day-to-day management of the company
Marc Croonen Hanneke Faber Jan Ernst de Groot Abbe Luersman
Chief Sustainability, Transformation Chief E-Commerce Chief Legal Officer Chief Human
& Communications Officer & Innovation Officer Resources Officer
Board Management
Committee Executive
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Capital structure and financial policy going forward
Delivering long term value for shareholders
Highly cash generative businesses, enabling Ahold Delhaize to invest in future growth and deliver attractive returns to
shareholders
Pre-closing capital return and reverse stock split of €1 billion to Ahold shareholders
Balanced approach to investing in profitable growth and returning excess liquidity
Transaction expected to be earnings accretive in first year after completion Expected dividend policy: 40-50% payout ratio
of adjusted net income Committed to investment grade credit rating
Payment of 2015 dividend to Ahold and
Delhaize shareholders based on each company´s dividend policy
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Excited about our future together
Compelling
strategic rationale for the merger: The right combination at the right time
Combining strong heritage, similar
values and a shared focus on the customer
Creating a stronger, international food retailer and delivering
value for all stakeholders
A superior customer offering
Attractive opportunities for our associates
Better serving our communities
A compelling value
proposition for shareholders
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Cautionary Notice
NO OFFER OR SOLICITATION
This communication is being made in connection with the proposed business combination transaction between
Koninklijke Ahold
N.V. also known as Royal Ahold (“Ahold”) and Delhaize Group NV/SA
(“Delhaize”). This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any
vote or approval in any jurisdiction in connection with the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be
made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and applicable Dutch, Belgian and other European regulations. This communication is not for release, publication or
distribution, in whole or in part, in or into, directly or indirectly, any jurisdiction in which such release, publication or distribution would be unlawful.
IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC
In connection with the proposed transaction, Ahold will file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form F-4 that will include a
prospectus. The prospectus will be mailed to the holders of American
Depositary Shares of Delhaize and holders
of ordinary shares of Delhaize (other than holders of ordinary shares of Delhaize that are non-U.S. persons (as defined in the applicable rules of the SEC)). INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROSPECTUS AND OTHER RELEVANT
DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT AHOLD, DELHAIZE, THE TRANSACTION AND RELATED MATTERS. Investors and security holders will be able to obtain free
copies of the prospectus and other documents filed with the SEC by Ahold and Delhaize through the website maintained by the SEC at www.sec.gov. In addition, investors and security holders will be able to obtain free copies of the prospectus and
other documents filed by Ahold with the SEC by contacting Ahold Investor Relations at investor.relations@ahold.com or by calling +31 88 659 5213, and will be able to obtain free copies of the prospectus and other documents filed by Delhaize by
contacting Investor Relations Delhaize Group at Investor@delhaizegroup.com or by calling +32 2 412 2151.
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Cautionary Notice
FORWARD-LOOKING STATEMENTS
This communication contains forward-looking statements, which do not refer to historical facts but refer to
expectations based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those included in such statements. These
statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to Ahold, based on current beliefs of management as well
as assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,”
“estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “possible,” “potential,” “predict,” “project” or other similar words, phrases or
expressions. Many of these risks and uncertainties relate to factors that are beyond Ahold’s control. Therefore, investors and shareholders should not place undue reliance on such statements. Factors that could cause actual results to differ
materially from those in the forward-looking statements include, but are not limited to: the occurrence of any change, event or development that could give rise to the termination of the merger agreement; the ability to obtain the approval of the
transaction by Ahold’s and Delhaize’s shareholders; the risk that the necessary regulatory approvals may not be obtained or may be obtained subject to conditions that are not anticipated; failure to satisfy other closing conditions with
respect to the transaction on the proposed terms and timeframe; the possibility that the transaction does not close when expected or at all; the risks that the new businesses will not be integrated successfully or promptly or that the combined
company will not realize the expected benefits from the transaction; Ahold’s ability to successfully implement and complete its plans and strategies and to meet its targets; risks related to disruption of management time from ongoing business
operations due to the proposed transaction; the benefits from Ahold’s plans and strategies being less than anticipated; the effect of the announcement or completion of the proposed transaction on the ability of Ahold to retain customers and
retain and hire key personnel, maintain relationships with suppliers, and on their operating results and businesses generally; litigation relating to the transaction; the effect of general economic or political conditions; Ahold’s ability to
retain and attract employees who are integral to the success of the business; business and IT continuity, collective bargaining, distinctiveness, competitive advantage and economic conditions; information security, legislative and regulatory
environment and litigation risks; and product safety, pension plan funding, strategic projects, responsible retailing, insurance and unforeseen tax liabilities. The foregoing list of factors is not exhaustive. Forward-looking statements speak only
as of the date they are made. Ahold does not assume any obligation to update any public information or forward-looking statement in this communication to reflect events or circumstances after the date of this communication, except as may be required
by applicable laws.
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Thank You
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