Forex Go!

Delhaize Group (ADR), NYSE:DEG has been Upgraded to a buy at HCM with a 2012 price target of $70 issued today by Shayne Heffernan.

In May 2011 Delhaize Group announced that BlackRock, Inc. reached an equity stake in the Company of 5.07% as of May 19, 2011. The stake is held through a number of legal entities controlled by BlackRock, Inc.

In August Delhaize posted second-quarter operating profit below expectations after price cuts to lure more customers into its stores in the United States hurt margins.

The group generated operating profit of 209 million euros ($298 million), below the 217 million expected in a Reuters poll of 11 analysts.

Delhaize said it had not fully passed on higher input costs, while U.S. supermarket chains Kroger , the biggest player in the U.S. market, and Safeway have said that they were passing on higher prices .

Delhaize said its operating margin in the U.S., where it operates the Food Lion and Hannaford supermarkets and generates about 70 percent of its revenues, fell to 4.4 percent in the second quarter, from 4.9 percent in the same period last year.

Sales rose 1.6 percent on a like-for-like basis in the U.S. while comparable store sales remained flat in Belgium due to weak consumer spending and a strong second quarter last year.

Delhaize said first results from about 200 revamped Food Lion stores were encouraging, with the new stores outperforming other supermarkets in the network.

In September Effective January 1, 2012, Delhaize Group is setting up a new organization called Delhaize Europe that will encompass the operations of Delhaize Belgium and Southeastern Europe. Delhaize Europe’s objectives are to increase the collaboration between the European operating companies, fully leverage the scale of the European operations and generate cost savings and facilitate the sharing of best practices so as to provide a stronger platform for local, regional as well as global growth. Delhaize Europe’s operating companies will benefit from Delhaize Europe’s regional support services including areas of finance, human resources, legal, IT and procurement.

Delhaize Europe will be led by Stéfan Descheemaeker, currently Executive Vice President and Chief Financial Officer of Delhaize Group and member of the Delhaize Group Executive Committee. A search to replace him as Chief Financial Officer is currently ongoing.

As from January 1, 2012, Delhaize Belgium, and Delhaize Group Southeastern Europe will report directly to Stéfan Descheemaeker who will continue to serve as Executive Vice President of Delhaize Group and member of its Executive Committee.

Delhaize Southeastern Europe

Kostas Macheras, will, as a member of the Delhaize Group Executive Committee, continue to lead the Southeastern Europe operations in his capacity of Chief Executive Officer of the region. Kostas Macheras is a seasoned and successful food retail executive who will fully leverage the new organisation to foster our growth in that part of Europe. Kostas Macheras will report to Stéfan Descheemaeker as from January 1, 2012.

Delhaize Belgium

As of January 1, 2012, Dirk Van den Berghe will become Chief Executive Officer of Delhaize Belgium, reporting to Stéfan Descheemaeker. Effective today, Dirk Van den Berghe is appointed Chief Operating Officer of Delhaize Belgium, reporting to Michel Eeckhout, Chief Executive Officer until the end of 2011. In this role, Dirk Van den Berghe will be responsible for retail, procurement and wholesale operations, strategy, marketing, communication, corporate development and logistics. Dirk Van den Berghe has served in different countries and positions across the Group, most recently as Senior Vice President Logistics, Procurement and Quality of Delhaize Belgium.

In his position as Executive Vice President of Delhaize Group and member of its Executive Committee, Michel Eeckhout will continue to serve the group and contribute to key growth projects. He has successfully led Delhaize Belgium since July 2007.

Pierre-Olivier Beckers, President and Chief Executive Officer of Delhaize Group, said: “The creation of Delhaize Europe is an important step for Delhaize Group fully in line with our New Game Plan strategy. The growth of our European operations, especially after the recent acquisition of Delta Maxi in Southeastern Europe and our learnings with the Delhaize America organization set up in early 2010, have convinced us to set up this structure dedicated to fully leverage the scale of the business, create synergies and share best practices while taking into account cultural and local differences in the region. The resulting benefits will provide additional resources to the European operating companies in support of their go-to-market strategies. I know the Group can count on Stéfan’s demonstrated skills in performance, growth and cost management to successfully lead this new organization into the future.”

With respect to Delhaize Belgium Pierre-Olivier Beckers, President and Chief Executive Officer of Delhaize Group, said: “I want to thank Michel for his many years of leadership at Delhaize Belgium achieving a very successful price re-positioning and further strengthening the efficiency of the organization. These are solid foundations on which Dirk Van den Berghe and his Belgian team can continue to build, fully benefiting from their intimate knowledge of the organization.”

» Delhaize Group

Delhaize Group is a Belgian international food retailer present in eleven countries on three continents. At the end of the second quarter of 2011, Delhaize Group’s sales network consisted of 2 842 stores. In 2010, Delhaize Group posted EUR 20.8 billion (USD 27.6 billion) in revenues and EUR 574 million (USD 762 million) in net profit (Group share). At the end of the second quarter of 2011, Delhaize Group employed approximately 143 000 people. Delhaize Group’s stock is listed on NYSE Euronext Brussels (DELB) and the New York Stock Exchange (DEG).

Delhaize Group is Belgium-based food retailer, which operates in six countries and on three continents. The principal activity of the Company is the operation of food supermarkets in the United States, Belgium and Greece, with operations in Romania and Indonesia. The Company’s retail operations are conducted by its consolidated subsidiary, Delhaize America, LLC (Delhaize America); its businesses in Belgium and the Grand Duchy of Luxembourg (Delhaize Belgium), and the business of Alfa Beta Vassilopoulos S.A. (Alfa Beta) in Greece. On May 12, 2010, Delhaize The Lion Nederland B.V. (Delned) acquired approximately 90.83% interest in Alfa Beta. On July 7, 2009, the Company, through its wholly owned subsidiary, Mega Image closed the acquisition of four supermarkets in Romania previously operated under the Prodas name. On November 23, 2009, the Company, through Alfa Beta acquired the Greek retailer Koryfi, which operated 11 stores and a distribution center in the Northeast of Greece. On January 2, 2009, the Company completed the acquisition of Knauf Center Schmett SA and Knauf Center Pommerlach SA.

The store format consists of retail food supermarkets. The sales network also includes other store formats such as proximity stores and specialty stores. In addition to food retailing, the Company is engaged in food wholesaling and non-food retailing of products, such as pet products and prescription drugs. Delhaize Group SA is the parent company of a number of direct and indirect subsidiaries.

United States

The Company is engaged in one line of business in the United States, the operation of food supermarkets in the southeastern, mid-Atlantic and northeastern regions of the United States under the banners Food Lion, Hannaford, Sweetbay Supermarket, Bloom, Bottom Dollar Food, Reid’s and Harveys. During the year ended December 31, 2009, the Company opened 30 new stores in the United States, closed and relocated seven stores, and decided to close 17 other stores. As of December 31, 2009, the Company operated 1,607 supermarkets in 16 states in the eastern United States. In 2009, it re-opened 53 supermarkets in the United States. It included 35 Food Lion renewals in the Columbia, South Carolina market and five in the Daytona Beach, Florida market.

The Company’s United States-based supermarkets sell a range of groceries, produce, meats, dairy products, seafood, frozen food, deli/bakery products and non-food items, such as prescriptions, health and beauty care and other household and personal products. The stores offered nationally and regionally advertised brand name merchandise as well as products manufactured and packaged under private brands. Food Lion offers between 15,000 and 20,000 stock-keeping units (SKUs) in its supermarkets, Harveys between 15,000 and 20,000 SKUs, Bloom between 21,000 and 25,000 SKUs, Bottom Dollar Food between 6,500 and 8,000 SKUs, Sweetbay between 28,000 and 40,000 SKUs and Hannaford between 31,000 and 45,000 SKUs.

Belgium and the Grand Duchy of Luxembourg

In Belgium and the Grand Duchy of Luxembourg, the sales network consists of several banners, depending on the specialty, the store size and whether the store is company-operated, franchised or affiliated. At December 31, 2009, the sales network consisted of 792 stores in Belgium and the Grand Duchy of Luxembourg. The network included 369 supermarkets under the Delhaize Le Lion, AD Delhaize and Red Market banners, 287 stores primarily under the Proxy Delhaize, Delhaize City and Shop ‘n Go banners. It also included 136 pet food and products stores operated under the Tom & Co. banner. At December 31, 2009, the Company operated 41 stores in the Grand Duchy of Luxembourg. In 2009, the Company divested its German operations, which consisted of four stores.

The supermarkets operated by the Company in Belgium and the Grand Duchy of Luxembourg carry the Delhaize Le Lion banner. At December 31, 2009, there were 144 company-operated supermarkets of which 14 supermarkets were remodeled. The AD Delhaize supermarkets have an average size of 1,142 square meters and offer approximately 12,000 SKUs.

In 2009, the Company opened the first two Red Market stores. At December 31, 2009, the Company’s network of proximity stores in Belgium and the Grand Duchy of Luxembourg consisted of 287 stores under the Delhaize City, Proxy Delhaize and Shop ‘n Go banners. Proxy Delhaize stores have an average selling area of approximately 500 square meters and offer approximately 6,500 SKUs.

Caddy-Home, the food products home delivery banner in Belgium, sells food products to customers for which orders can be placed by the Internet, telephone or fax. As of December 31, 2009, Caddy-Home delivered in 17 cities throughout Belgium, offering approximately 5,500 SKUs to customers. In 2009, Delhaize Belgium launched Delhaize Direct, allowing customers to order their groceries through the Internet and pick them up at their local store.

Tom & Co. is a specialty chain focusing on food and accessories for pets. At December 31, 2009, the stores were operated under franchise agreements with independent operators.

The supermarkets in Belgium and the Grand Duchy of Luxembourg sell a range of groceries, produce, meats, dairy products, seafood, frozen food, deli/bakery products and nonfood items, such as health and beauty care and other household and personal products. Delhaize Belgium is also selling a basic offering of lottery and postal products in part of its network.

Greece

In 2009, the Company operated a total of 216 stores in Greece. As of December 31, 2009, Alfa Beta directly operated 142 supermarkets under the Alfa Beta banner, 10 cash and carry stores under the ENA banner, 13 AB City stores and served 39 affiliated stores operated under the AB Food Market and AB Shop & Go banners and 10 Koryfi stores.

Rest of the World

As of December 31, 2009, Mega Image operated 51 supermarkets in Romania. The stores offer private brand ranges, including 365, Care and the house brands available at Delhaize Belgium and Alfa Beta. In 2009, Mega Image introduced a private brand for Romanian products called Gusturi Romanesti. As of December 31, 2009, the Company operated 66 stores in Indonesia.

The Company competes with Wal-Mart, Kroger, Harris Teeter, Bi-Lo, Lowes Food, Save-A-Lot, Supervalu, Price Chopper, DeMoulas, Royal Ahold, Publix, Winn-Dixie, Carrefour, Louis Delhaize-Cora, Aldi, Makro-Metro, Lidl, Intermarche, Colruyt and Mestdagh.

Shayne Heffernan

For More Information Contact

Linda Johnson, Business Development Director – Private Client Group, Heffernan Capital Management Sales@Heffcap.com

Bangkok

Suite 53 Athenee Tower 63 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 THAILAND Tel: +66 8 0700 7900 Fax: +6682 2079301 Email : info@heffcap.com

New York

347 5th Avenue, Suite 1402-508 NY, NY 10016 Tel: +1 646-403-9881 Fax: +1 646-403-8014 Email : info@heffcap.com

Singapore

3 Raffles Place #07-01 Bharat Building Singapore 048617 Tel: +65 6329 6408 Fax: +65 6329 9699 Email : info@heffcap.com

Get the Updates Daily

Similar Posts:

• US Butterfly Effect and Greek Default
• New Mobile Apps Designed to Bring Customers into Stores
• SEC’s Say on Pay
• Better UK Retail Sales Data Fuels Cable Rally
• EURUSD update, 28th April 2011