Ahold Delhaize’s Bol.com IPO Is Still Possible, CEO Says

Royal Ahold Delhaize NV’s has not ruled out a plan to publicly list its Dutch e-commerce unit Bol.com, according to the grocer’s chief executive.

(Bloomberg) — Royal Ahold Delhaize NV’s has not ruled out a plan to publicly list its Dutch e-commerce unit Bol.com, according to the grocer’s chief executive.

The retail giant last year pulled plans to publicly list Bol.com due to volatile equity market conditions. The possible initial public offering of the unit is “not off the shelf,” Chief Executive Officer Frans Muller told Bloomberg in a TV interview. 

“It’s too early to call, and I think we come back to the market when we feel that the IPO climate is the right climate to think about this again,” he said Wednesday, after Ahold Delhaize reported second-quarter results.

The gross merchandise value sales of Bol.com, which competes with Amazon.com Inc., rose 11% in the period, the Dutch company said Wednesday.

Amsterdam is not the only likely venue for the IPO of the Dutch retailer’s e-commerce business. “It’s unlikely that it will be outside Europe, but there are more places in Europe where you could contemplate that,” Muller said in a separate interview. The company has not rehired bankers for a public listing since it pulled plans to IPO, he said.

Bol.com is the biggest player in the e-commerce market in the Netherlands with a 20% market share. Amazon, the world’s largest e-commerce company, has been making inroads in the Dutch market since launching in the Netherlands in 2020.

Muller is looking at consistent quarters of sales growth, market share gain and further improvement in earnings before interest, taxes, depreciation and amortization, as some of the indicators for the timing for the IPO. He would also like to see more progress on advertising through Bol.com because “that might be an interesting revenue stream for us.”

Stop & Shop owner Ahold’s adjusted operating profit rose 2.8% to €904 million ($992 million) in the second quarter, beating an estimate of €869.7 million in a Bloomberg survey. 

Even as sales in the US, the grocer’s largest market, rose 3.6% on a comparable basis, the adjusted operating margin of 4.6% in the country was slightly below analyst expectations. More than 60% of Ahold Delhaize’s sales come from the US. Its shares fell as much as 3.6% on Wednesday. 

European Headwinds

The firm sees more evidence that “inflation has passed its peak,” said Muller, adding that European margins are still being impacted by elevated levels of price growth. The retail giant now expects free cash flow in the range of €2 billion to €2.2 billion this year, from a previous expectation of about €2 billion.

Ahold Delhaize continues to face pressure in its European markets following strike action and protests against the franchising of all its outlets in Belgium. Earlier this week the firm announced the first step in this process with the sale of 15 of its 128 Belgian stores to independent buyers. 

The strikes and weather shifts had a negative impact on comparable sales in the second quarter of 0.7 percentage points and the firm recorded a €108 million impairment charge for the transfer of its Belgium stores. Underlying operating margin in Europe dropped 0.2 percentage points to 3.2% in the quarter.

Ahold Delhaize maintained the rest of its forecasts for the year, saying it still expects an adjusted operating margin greater than or equal to 4% and underlying earnings per share to be around the levels of 2022.

–With assistance from Mark Cudmore.

(Updates with further comments from CEO, an earlier version of this story corrected increase in Bol.com’s gross merchandise value)

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