Koninklijke Ahold Delhaize N.V.

Frederic van Daele - Vice President of Investor Relations Frans Muller - President and Chief Executive Officer Pierre Bouchut - Executive Vice President and Chief Financial Officer

Sreedhar Mahamkali - Macquarie Securities Group Francois Halconruy - Morgan Stanley Fabienne Caron - KeplerCheuvreux Capital Markets Xavier Le Mene - Bank of America Merrill Lynch Nick Coulter - CitiGroup

Thank you very much, operator. And good morning everyone.

Welcome to Delhaize Group’s conference call regarding our fourth quarter and full-year 2015 results. I want to remind you that today’s presentation and discussion will include Forward-Looking Statements.

We want to caution you that such statements are predictions and that actual events or results can differ significantly. Factors that may have a material effect on our business are detailed in the cautionary note in our earnings release and are contained in our SEC filings.

The statements are made as of the date of this presentation and Delhaize Group assumes no obligation to update this. Today we have with us in the call Frans Muller, CEO Delhaize Group and Pierre Bouchut, CFO Delhaize Group.

During this call, we will reflect on our fourth quarter and full-year performance followed by comments on our strategic priorities. Afterwards, we will take questions.

For those unable to stay on the call or wish to listen to it again, a replay will be available on Delhaize website. Frans, the floor is now yours.

Thank you very much Frederic. Good morning everyone and welcome to this call where we will discuss our fourth quarter and full-year performance.

I’m on slide four, where you can find our 2015 highlights. As a group level, we were able to grow our underlying operating profits for the full-year in 2015 by 18% at actual rates and by 4% at identical rtes.

Both corrected for the impact of the 53rd week in the U.S. in 2014.

We believe this is an solid operational results especially considering the significant changes in our Belgian Organization and at Food Lion. The strong operational performance transferred in another year of solid free cash flow of €646 million excluding one-time elements.

This has been achieved through EBITDA growth, capital discipline and further working capital days. Our Board of Directors is proposing 12.5% increase in our gross dividend to €1.80 per share compared to €160 For 2014.

Finally, Delhaize Group was included again in the Dow Jones Sustainability Index. We believe this is the result of placing sustainability higher on the priority list, when we redefine our strategic priorities back in 2014.

In the U.S. we posted comprable store sales growth of 2.2% in 2015, our volume growth continued to be solid at 2.5%.

bear in mind that our 2014 results were positively impacted by snowstorms and the disruption at one of our competitors. Delhaize America also retained a solid level of profitability in 2015 with an underlying operating margin of 4% while keeping our gross margin flat.

As we you know, we launched our 162 food stores in Raleigh market in easy, fresh and affordable format. The initial volume uplift is in line with our expectations whereas our starting point on gross margin labor and strength has been better than our experience in the Greenville and Wilmington markets.

We continue to make progress in our two initial markets. Let’s move to Belgium, 2015 has been a year of transition for our Belgian operations.

We have reached in final agreement with our [solitary] (Ph) partners in February and started the implementation of potential transformation plan afterwards. This as you know, included the voluntary departure of 2100 of our employees.

It is clear that dealing with this amount of change has impacted the quality and consistency of our company operated store operations. And for 2016, the number one priority is therefore to complete the implementation of the transformation plan, the rollout of the new store organization and to focus on improving our operational standards.

We did manage to return to market share growth in the second half of last year and we are almost back to last year’s levels. Nonetheless, we need a longer period of sustained comparable store sales growth and market share growth in order to bring operating profitability back to acceptable levels.

We had a very strong 2015 year in South Eastern Europe, if you bear in mind that economic conditions in Greece remain challenging, this is an outstanding result. We are seeing market share growth in all the countries, this has been driven by store expansion, by the success of our remodels and by 3.5% CSS sales growth.

This combination restricts cost control has driven also therefore strong results. We have started 2016 with the same positive momentum is how we ended 2015.

And I would like to hand over to Pierre to walk you through the 2015 financial results.

Thank you Frans good morning to everyone. Slide five is 2015 summary income statement.

Please note all figures on these sides are including the 53rd trading week for Delhaize America in 2014 unless stated otherwise. At €24.4 billion, group revenues increased by 15.6% at actual rates and by 3.2% at identical rates excluding the 53rd week.

Gross margin increased by four basis points at identical rates on one year to another excluding the 53rd week. As a result, of the stable gross margin that Delhaize America, 54 basis points gross margin increased in South Eastern Europe and the 15 basis points gross margin dropped in Belgium.

Excluding the 53rd week in 2014, our SG&A as a percentage of revenues improved by six basis points at identical rates and improved in each of all three operating segments. Our underlying operating profit increased by 4% at identical rates and excluding the 53rd weeks up €872 million and our underlying operating profit margins stood at 3.6%, which is 3 basis points increased of the last year at identical rates.

Our operating profit increased by 41.2% at identical rates or 60.5% at actual rates. At last, excluding the one-time elements or full-year operating free cash flow as progress to €646 million as compared to €586 million last year.

The following Slide 6, shows the evolution of EBITDA and underlying EBITDA in Q4 and in 2015, both including and excluding the 53rd week in 2014 and I will come unveil on the 2014 figures excluding the 53rd week. As you can note, at actual rates of 2015 EBITDA has increased by 22%, up to €1.392 billion while our underlying EBITDA increased by 17%, up to €1.538 billion.

In Q4 at identical rates our underlying EBITDA increased by 11%, while it has increased by 21% at actual rates of €423 million. Clearly the strength of the U.S.

dollar has been an important to support of EBITDA in 2015. The following slide detail the evolution of our revenues and underlying operating margin per segment.

Let’s focus on the margin evolution seems all the sell detail have been already released in January. Slide 7, provides with background information on our underlying operating margin evolution at Delhaize America.

In Q4 we therefore see the European margin of 4.1% which represents a 20 basis point increase over Q4 last year excluding the impact of the 53rd week, largely explained positive sales leverage and a good SG&A control partly offset by cash investment at both Food Lion and NSO. For 2016, our underlying operating margin increased by four basis points including the 53rd week in 2014 through a combination of decreased SG&A as a percentage of revenue and a stable gross margin.

As shown on the following Slide 8, Delhaize Belgium European margin increased by 60 basis points over Q4 from 1.9% to 2.5%. this European margin increase is largely explained by 130 basis point SG&A decrease as a percentage of revenue itself resulting from around 70 basis points due to sales leverage compared a weak fourth quarter in 2014 which if you will remember was impacted by its clients and by around 60 basis points due to transformation plan savings.

For the full-year Delhaize European margin dropped by 30 basis points which is explained by around 40 basis point due to cash investments, around 15 basis points resulting from higher shrink, approximately 30 basis points resulting from advertising and depreciation expenses all that partly offset by transformation plan savings for approximately 30 basis points. Our full-year 2015 market share stood at 24%, which is only eight basis points short of our original target which was to get back to last year’s market share levels.

The final implementation of our New Store Organization in Belgium is scheduled in September, therefore over H1 Delhaize Belgium will continue to operate as sub-optimal client service level without yet benefiting from the full positive impact from better productivity in our stores. The situation should be clearly different in H2.

Overall, we expect a satisfactory increase of Delhaize European margin in 2016. On this following slide, we provide you with more detail on the margin evolution for South Eastern Europe.

In Q4 our European margin increased by 10 basis points up to 7.2%. This is largely explained by an increase in the gross margin driven by improve procurement terms coupled the decrease of our SG&A due to sales leverage and cost savings.

During the full-year 2015, our South Eastern European margin increased by 30 basis points up to 4.7% driven by 50 basis points improvement in gross margin and 20 basis points decrease our SG&A as a percentage of revenue. It is worth highlighting that we pushed in 2015 market share gains along with European margin improvement in each of the three store networks in South Eastern Europe, Alfa-Beta in Greece, Mega Image in Romania and Maxi in Serbia.

The following chart on Slide 10 provides you with full analysis of our cash flow generation at actual FX rates in 2015 When taking into account the €205 million increased our EBITDA continued strong improvement in working capital for €305 million also supported by U.S. dollar appreciation.

Net payment of interest and taxes for €275 million and cash CapEx for €774 million of 2015 operating free cash flow spend at €646 million. When taking further into account, the cash out related to the transformation plan for €85 million, €32 million of merger-related costs, the €25 million fine from the Competition Authority in Belgium and €14 million proceeds from the bottom dollar divestiture of free cash flow spend at €580 million.

Clearly, on one hand our free cash flow has been partly driven by the U.S. dollar evolution and on the other hand, our CapEx increased by €168 million, compared to 2014 with notably 162 Food Lion stores remodeling in Raleigh and the beginning of a program to increase remodeling in Belgium.

And now on Slide 11. Owing to €2.7 billion free cash flow generation over the last four years.

Our net debt has been reduced by almost €1.9 billion from €2.6 billion back in December 2011 to less than €800 million at the end of 2015. As of the end of 2015, you will notice that our net debt accounts for approximately six months of EBITDA.

The following Slide 12 provides you the breakdown our capital expenditures by geography and by category. As you can note our Group CapEx has increased by 28% in 2015 up to €774 million.

We will increase the proportion of our CapEx incurred in the U.S. and going to remodeling largely as a result of the 162 additional Food Lion stores being remodeled under the easy, fresh and affordable initiative in 2015.

Going forward, we expect CapEx to increase by approximately 6% to €825 million in 2016 mainly as result of continued remodeling activity at Food Lion with another 142 stores in an additional market, continued expansion in South Eastern Europe, additional remodeling in Belgium with 15 store planned in 2016 and a new distribution center for drinks in Belgium. Frans, I now hand back to you.

Thank you very much Pierre. On Slide 13, we are providing more detail on our dividend proposal.

Since 2013, the Delhaize Group Board of Directors has adopted a dividend policy to pay out approximately 35% of our underlying group share in net profit from continuing operations as a dividend objective. In 2015, we have reported a 12% increase in our underlying group share in net profits from continuing operations.

For a detailed calculation and big consolidation to our net profit from continued operations, we refer to page 21 of our press release. As a result, our Board of Directors would like to propose to our shareholders in May a 12.5% increase in the dividends compared to 2014 and this would result in a dividend per share of €1.80.

I would now like to move to the strategic priorities and the outlook on the final Slide 14. At Group level our number one priority is clearly to complete the merger as scheduled by the middle of 2016.

Between now and merger completion, both Ahold and Delhaize Group have to receive shareholders approval on March 14. If this is received we would still have to work on getting approvals from both the Belgium Competition Authority and the Federal Trade Commission in the United Sates.

At this stage, we feel we are on track. We are also planning to display further capital discipline this year with a great plan to spend €825 million of capital expenditure.

This equals less than 3.5% of last year’s revenues. A large part of this capital will go to Food Lion and Delhaize Belgium as we are intensifying our remodeling efforts.

Additionally, we will continue our expansion in South Eastern Europe and finally we plan to spend on new distribution centers in Romania and Belgium. For example, as well as the further rollout of SAP.

We except to complete our SAP rollout in Europe by the middle of 2017. The big parts we still need to do is launching SAP retail for fresh in Belgium in the first half of next year and the launch of SAP in Serbia this summer.

We successfully launch SAP retail at Alfa-Beta on the 1, January of this year. Our priorities for Delhaize America will be to remodel another 142 stores in total in additional markets, which will be announced shortly.

The rollout of Easy, Fresh & Affordable in this market costs is around $250 million of investments and we’ll again be on average since the amount you know from us the $1.5 million per store. At Hannaford, we will continue to work on the Hannaford 20/20 project, which includes opening another 15 another additional Hannaford to go pick upon in 2016 bringing the total to around 35 locations at the end of the year.

We will focus on maintaining good same-store sales growth in our U.S. operations despite the current lack of inflation.

As already mentioned before, Delhaize Belgium will continue implement its new store operations in the remaining 70-company operated stores during two ways. This process should be completed by September and should be hopefully a result in improving operational standards.

It should be coupled with market share gains this year and we expect to seeing further increase in our operational profitability. We also a plan to increase our capital investments in Belgium compared to 2015 in order to modernize our supply chain further to continue rolling out SAP and to step-up our remodeling efforts.

Finally, our South Eastern European operations. Our priorities for 2016 as not changed compared to last year.

Firstly, we aim to maintain our strong like-for-like sales growth as long as possible. This will be challenging as from the second quarter as we will starts to annualize the reduction in VAT in Romania, which had boosted our sales there.

Also, we remain cautiously optimistic that Alfa-Beta can continue to gain market share. Although, it will be a challenge to outperform the market in the similar way as we already did in 2015.

In terms of expansion, our plans are unchanged. We continue to see scope for network growth in mainly Romania and Greece.

Our expansion in Romania will be focused on Bucurest and [indiscernible] whereas in Greece, we would like to expand on the islands as well as in the North of the country. In Serbia, our main effort is to continue to remodel our Maxi Supermarket network and if possible we aim for selective expansion.

In conclusion, we believe that our sales momentum within the group is solid and we have the plans in place to maintain this. This bodes well for profit growth and free cash flow generation in 2016.

I would like now to hand over for the questions and answer. Operator, could you please start that process?

Hi good morning all. So three questions for me to start with, first one, Belgium margin, Pierre, I think you have made some helpful comments, but really us a little bit more, given the new store model in September, October are you suggesting perhaps flat margins in the first half and improvement in the second half for typically Q4?

Are you saying they will continue to improve in the first half but with a step change perhaps in the trajectory in second half? That’s the first question Belgium margins.

Secondly, I don’t know if you have made any comments on U.S. margin for 2016, I'm sorry if I missed it, it would be helpful if you can talk about it.

And the last one is working capital opportunity. Could you just remind us perhaps if there is any further opportunity in terms of improvement in working capital from where we are here, you have clearly done quite a lot over the last three, four years.

Is there further opportunity to grow up present working capital? Any specific numbers there would be sort of helpful.

thank you very much.

Yes Sreedhar good morning. Regarding your first question, we do expect an improvement in Belgium in H1 of our European margins, I tried to signal it, we expect a much better improvement over H2.

That’s to answer your first question. Regarding working capital, as already mentioned last time.

We said that we are further opportunity for improving our working capital, it’s of course not at the same pace, none over the last three years, but we still in our plant, we improve at the base of one or two days, let’s say 1.5 day per annum over the coming three years. So our target is to improve working capital by saying they also other three year time.

Yes. Sreedhar on the margins figure, on the margins in the U.S., we plan for a flat margin in the U.S.

operations.

Okay. Helpful.

Thank you very much.

Pleasure.

Yes. Good morning Frans and Pierre.

One quick question on the competitive landscape in the U.S. and one on free cash flow generation.

So maybe just start with the U.S. in the Southeastern part of the U.S.

You’re gaining some traffic from the Walmart Supercenters, but is that enough already to, I said the traffic you will be losing to the neighborhood store. And I would also project...

Sorry to interrupt you. Because too loudly and he is difficult to understand you, because the microphone is extremely loud here.

Okay, sorry. So question on the sales.

Much better

Yes. Your gaining traffic from Walmart Supercenter.

Is that enough to offset the traffic you’re losing to the neighborhood formats of Walmart. And then also Walmart announced a closer of 150 stores in the U.S.

for first time ever including 102 Express stores. I think Walmart has been a bit precise on the location that they are closing.

Are you going to quantify the impact on delays and potentially also a Ahold. so that’s the first question.

And second one is on free cash flow generation that’s for Pierre and I know that Pierre you have been quoted quite a few times in that the company that have has to capacity generate roughly 500 million of free cash flow on an underlying basis and ongoing basis. So excluding the ForEx move and all the one-off, are you able to confirm that that’s also the run rate you’re seeing for the next couple of years in foreseeable future.

And related to that if you could just help us for our models with the state of the CapEx in 2016 between U.S. and Europe and also the potential cash outflow from the transformation plan that’s to expecting in Belgium.

Yes well, I will immediately address the question on the free cash flow. Yes, we are confident that this company should continue to generate as an average between €506 million of free cash flow per annum, we did it in the last year, we continue to do it.

Of course as already mentioned, it will come probably less on working capital improvement not from EBITDA improvement and of course we will be facing also less out cash expenses like the transformation plan. And to answer the last part of your question, the amount to the extent in to be spent in 2016 For transformation plan will be limited to those €50 million or €60 million.

So we would be done with that at the end of 2016, of course we are done with that at the end of 2016, therefore afterwards this will not impact negatively of the cash flow.

On the Walmart developments, we don’t have those figures year-to-date on a weekly basis, Walmart doesn’t inform us on these kind of things and if we can compensate the Walmart Supercenters versus the neighborhood stores we don’t know. The only thing what we know is that in the year-to-date numbers of Food Lion that we've seen comparable sales growth that we saw in the last quarter of 2015, this gives us a lot of confidence.

And even if we correct, let’s say for the weather, we saw some weather in January, we are confident that we with Food Lion are well positioned and that we can gain market share.

Maybe what we can say also is Food Lion has been gaining market share in all its different DMA and even in those DMA where we closed down stores and even in those DMA where Walmart has been opening stores. So that’s fact.

Okay. Thank you.

That’s helpful.

Yes, good morning. Three question for me.

200 U.S. and 100 under U.S.

you plan that can afford in 2015, do you plan a further price investment in 2016. And the second question is actually that is there a possibility for you to remodel faster Food Lion, or is it a [indiscernible] given the numbers of jobs you have to do?

And the third one is in the merger document you are going for 5% top line growth in 2016 at constant currency, are you still fine with these numbers and what is like-for-like you have got behind? Thank you.

Fabienne, yes a few question here, at the moment we feel that we are priced right in the U.S. both for Food Lion and Hannaford, but that also means that this is a continuous feedback from the market, so where we have to adjust, we will adjust but at the moment we feel priced right for both Hannaford and Food Lion.

The second things was on remodels, the acceleration of this we did last year 162 stores in Raleigh we will take up another 142 stores this year. Everything is working like a clock in timing, in execution and in CapEx assessment, so we’re very happy with that remodeling progress there.

And we will to look during this year, if there is a room for acceleration, but you can imagine that 140, 160 stores per year is already from an extreme point of view quite as much. We see good results there, so if we have opportunity to accelerate and we will look into that possibility.

Okay.

And again in your last question Fabienne, there is already a lot of information in DSO. As you have seen it so we are not prepared to elaborate further on what is in DSO.

[Multiple Speakers] same-store sales and organic growth that we continue to open stores as fast indicated to use in Eastern Europe that we are planning payment links both in Belgium and in the U.S. that we are also considering as you know opening some network sorties and we did it this year, we are planning also to accelerate our e-commerce.

So there is a series of elements which we brought to our sales growth in coming years.

Now also if you look at Hannaford, Pierre already mentioned we opened this year or last year this North Berwick 20k benefit store, which is doing very well, which offers also new opportunities for small adjacent areas. We will open this year completely new format of Hannaford in full scope of strength and we also expect quite a bit from there.

So also with Hannaford, we are rejuvenating and innovating ourselves.

Okay. Thank you very much.

Pleasure.

Yes, good morning. It’s [indiscernible].

One question on Belgium your gained market share in the second half, you also said in your presentation that you expect to gain market share in 2016. Do you also know there us some more competitive reaction as everybody seems to gain market share maybe expect for [indiscernible] and what do you see here?

We also gains market share in 2016. Throughout the January and February weeks and month we roughly gained 30 basis points of market share at Delhaize Belgium, but we are still below the 2014 numbers, so we have still an ambition there.

The second thing is after our thoughtful transformational plan and social partner agreements. We invest not only in, what I mentioned before in the new store operations and therefore training, but we also invested in campaigning pricing and decent of thing.

So I think we are well priced at this very moment. Of course, this is a continuum to check week-by-week and I do not see at this moment more competitiveness in the Belgium market than there already was and I think we gave in just now part of our share back which we lost during the transformation plan.

Another question is on your gross margin in Belgium, at this moment, if you look at the spread between Food CPI and Food PPI, I think it is quite beneficial for the food retailers. How much do you expect to capture from that past spread also going forward and when do you expect that more less to flatten out.

I think its [indiscernible] too early now to attend forward-looking statements on the gross margin development in Belgium. We don’t do this.

Okay. Thank you very much.

Thank you.

Yes, good morning gentlemen. Two question for me if I may.

The first one, can you talk a bit about the continued landscape in the U.S. so with now deflation coming into U.S.

have you seen any trend from your competitors being more aggressive on prices or not. That will be the first question, an if you can give us a bit more color further on Food Lion.

The second one, tricky one, but I will try, have you any insight about the number of foreclosure you may have to do with the merger in U.S. so ballpark you know 100 stores, or 200 stores so any lights or numbers could be quite helpful.

Yes indeed a real play for the U.S. foreclosures, I hope for your understanding that both for Belgium and for the U.S.

we await the final judgment of the SEC in the U.S. and the BCA in Belgium.

For the BCA we expect final judgment in the second half of March and for the SEC we are in constant discussions and dialogue. On the U.S.

deflation, I can give you some recent numbers, because it’s a reoccurring question. If you look at the U.S.

and look at Delhaize America has a total, we've seen year-to-date roughly a deflation of 1.5%, deflation of 1.5% total U.S. Delhaize America and if you see from the categories where this is coming from to give you some color there.

There is a strong deflation in it and there is also a light deflation in perishable in grocery to support our center stores are big part of our operation. So we are still for Delhaize America stronger for Food Lion and for Hannaford, but both banners are inflationary environment and that’s lumping and if you look at the competitive pressure and how do we compare to competition on pricing, I think for both banners, we are priced correctly.

As I mentioned before, we think that we see that for Hannaford we came closer to our most aggressive competitors. So I think that is a good think to have and for Food Lion we are very stable in our price positioning and we have contempt with that as a moment.

Thank you.

Operator, can we have last question please.

Good morning. Thank you for taking the question much appreciated.

Just to see may be firstly on margins in Belgium for 2016, if I could just press for a little more clarity. I think consensus is for around 2.8%.

So I just ask you if you’re comfortable with that level as a broad guide. And then secondly on the Easy, Fresh & Affordable remodeling.

If you could just update or what you have see in Q4 and stepping back how that’s evolved from market-to-market and how you expect the approach to evolve for the 140 new stores that you will do this year? Thank you.

Yes on the consensus, we are overall comfortable with the current consensus on Delhaize, yes.

Its specifically for the Belgium margins.

No. The same applies to the Delhaize margin as well.

Okay. Thank you.

Look again on the Easy, Fresh & Affordable remodeling. First of all, the Easy, Fresh & Affordable program as such repositioning of that business is bigger than another remodeling.

So you might remember that we did a lot on labor, on Count on Me programs on the frontline, to checkout on the perishable parameter, on the private label, on reassessing the center store assortments and business this is a program where we already embarked on for a longer term for all the 1,100 stores.

Sure.

On top of this, we also start this modeling, you saw Wilmington and Greenville. At Greenville we had a little bit more competitive pressure than we initially saw.

But at the moment, items there on sales development, but also on shrink and labor we are getting closer to our plans and we are happy with this trend, but again those were the first two markets also, I believe with more experimental character. If you then look at Raleigh then in Raleigh we are very close to our saes performer corrected for inflation and if you look at shrink in labor, we have much better start there than we had in Wilmington and Greenville, we learnt a lot there, so we are also getting very close to our performer and we were happy with developments in the strong Raleigh markets to have done this 162 stores.

That was also the reason to invest further in the cycle and Fabienne asked we would like to remodel another 142 stores for the Food Lion this year and I think we are now pretty having very strong routine in the CapEx assessments in the rollout of those big remodeling plans knowing where we have to control the levers on the various components of the P&L. so I think we are very comfortable that they have even better rollout in the new geography than we had in Raleigh.

We are happy with what we see, we are happy with sales uplift, we are happy with the customer response and we get a better control of our shrink in labor having in mind that we changed a lot on the fresh parameter which is a matter of getting trained into this and how people are now introduced to monitor this properly.

So do you think that 142 this year that you would expect to hit your target in terms of store contribution or these are expected to be shy of the original budget.

No, no we will not be shy of the plans we have for 142 stores, I cannot stand in for competitive behavior or complete different inflation levels, but what we assume now in our plans for the 142, we are confident that we hit those numbers.

Superb, thank you.

Okay, thanks everyone for participating in today’s conference call. A replay like I said in the beginning is available on our website and if you have any additional questions, do not hesitate to contact the IR department.

Delhaize Group will announce its first quarter results on April 27 of 2016 and thank you very much and have a nice day.