Ahold Delhaize Group has a 2021 goal of spending more than €20 million on charitable giving in the United States and Europe. After its activity in the first half of the year, it is still on track to achieve this goal. Following the focus of its brands and suppliers on food procurement (in Q2/2021), the group provides an update on this period.
Ahold Delhaize Group achieved €18.6 million in sales in Q2 2021. This figure illustrates an increase of 3% compared to Q2/2020 at constant exchange rates. This corresponds to a decrease of 2.4% at actual exchange rates. This performance is the result of acquisitions, unfavorable currency impact, stable comparable sales growth, and gasoline sales.
The impact of comparable sales is estimated at 0.3 basis points due to timing differences. With the acquisition of FreshDirect, the Group recorded an acceleration of its net online sales. Net online sales were up 35.8% for the quarter at constant exchange rates.
The group's activity over this period generated an underlying operating margin of 4.5%. This is 0.8 basis points lower than in Q2/2020. The operating margin itself was 4.4% under IFRS.
Note: Ahold Delhaize's continuing operations in Q2 2021 generated EUR 551 million of operating income. 551 million, a 20.6% decline over the three months. 540 million in IFRS net income. Its underlying diluted EPS was €0.53 (€0.52 for diluted EPS).
The Group's two regional markets reflect the revenue trend in the second quarter of 2021. Indeed, the company's European business as a whole generated sales up 3.6% at constant exchange rates. Like-for-like sales were up 10.2% and online net sales were up 27.0% (vs. 63.9% in Q2/2020). The Group's operating margin for the European operations was 4.1% under IFRS.
Continuing operations in the US market in Q2 2021 delivered 4.9% operating margin. Online sales in this region grew 61.0% at constant currency (+20.6% for comparable sales excluding gasoline). Online sales were driven by the continued expansion of click-and-collect devices. Ahold Delhaize's U.S. sales were up 2.7% at constant currency for the three months.
With its results recorded in the second quarter of 2021, the group is confident of achieving its 2021 underlying EPS growth target. Ahold Delhaize now expects an underlying operating margin of around 4.3% (up from 4.0% initially). The group had expected low underlying EPS growth on average. However, it now expects underlying EPS to be at the high end of the forecast range.
The company is also maintaining its free cash flow forecast (€1.6 billion) for 2021. It is expected to spend a total of around €2.2 billion on capital expenditure over the year as a whole.