Ahold Delhaize to invest $480 million in U.S. supply chain to create a fully integrated, self-distribution model
2019年12月11日 - 6:00AM
Ahold Delhaize to invest $480 million in U.S. supply chain to
create a fully integrated, self-distribution model
Expect to see over $100 million in annual savings following the
transition period; audio cast to be held on December 11 at 16:00
Central European Time, details below.
Zaandam, the Netherlands, December 10, 2019 – Ahold Delhaize USA
today announced that it is investing $480 million to transform and
expand its supply chain operations on the U.S. East Coast. This
investment supports the new three-year strategy to move the U.S.
supply chain into a fully integrated, self-distribution model. The
Ahold Delhaize USA announcement is attached to this release.
The $480 million capital outlay will cover a three-year
transition period, which will support the acquisition of three
distribution facilities by Ahold Delhaize USA from C&S
Wholesale Grocers and leases on two additional facilities. In
addition, it includes investment in two new fully automated Ahold
Delhaize USA frozen facilities to be constructed in the Northeast
and Mid-Atlantic of the U.S.
The new self-distribution U.S. supply chain will enable the U.S.
businesses to reduce costs, improve speed to shelf, enhance
relationships with vendors, and improve product availability and
freshness for customers.
“Today’s announcement is another example of how Ahold Delhaize
USA is transforming our infrastructure to support the next
generation of grocery retail,” said Kevin Holt, Chief Executive
Officer, Ahold Delhaize USA and Ahold Delhaize Management Board
Member. “Through this initiative, we will modernize our supply
chain distribution, transportation and procurement through a
fully-integrated, self-distribution model, that will be managed by
our companies directly and locally. This will result in
efficiencies and most importantly product availability and
freshness for customers of our local brands, now and in the future,
whenever, wherever however they choose to shop.”
Excluding the transition expenses, the impact on Ahold Delhaize
USA underlying operating income will be neutral in 2020 and 2021
and favorable in 2022 by $60 million. The ongoing annual benefit on
underlying operating income will be more than $100 million. During
the first three years, there will be transition expenses of $160
million, impacting underlying operating income ($50 million in
2020; $50 million in 2021; $60 million in 2022).
Our previous group level annual free cash flow target of €1.8
billion through 2021 expressly excluded M&A and other such
transactions. Therefore, free cash flow will be impacted by an
incremental $410 million (€369 million) in capital expenditures
from 2020-2022. The total investment also includes an additional
$70 million (€63 million) in lease commitments.
This investment will not materially impact 2019 results and
there is no change to the outlook that was provided on November 6,
2019. We reiterate plans to spend approximately 3% of sales on
capital expenditures on top of the amount to be spent on this
transaction over the next few years. Below are our expectations on
the financial impact to results at the US segment and group level
through 2023.
We note that beginning in the Q4 2019 earnings release, reported
results will include the full impacts from the supply chain
transformation. Our underlying operating profit, which is an
alternative performance measure, will include the ongoing effects
of the supply chain transformation. We will also provide a
supplementary disclosure of transition expenses related to the
supply chain transformation for informational purposes. Transition
expenses include legal/consulting, IT transition, procurement and
replenishment transition costs as well as facility start-up
costs.
Please join us for an audiocast at 16:00 CET on Wednesday,
December 11, 2019, where Frans Muller, Jeff Carr, and Kevin Holt
will review the transaction. The audiocast will be available live
on our website: www.aholddelhaize.com.
- 20191012 Supply chain press Release - Ahold Delhaize Version
final
- Ahold Delhaize USA Supply chain press release final
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