Koninklijke Ahold Delhaize N.V.

Frederic van Daele - VP, IR Frans Muller - CEO and President Pierre Bruno Charles Bouchut - CFO and EVP

Edouard Jean Aubin - Morgan Stanley John Kershaw - Exane BNP Paribas James Tracey - Redburn Fernand de Boer - Petercam Xavier Le Mene - Bank of America Merrill Lynch

Thank you very much, operator. Good morning and good afternoon, everyone.

Welcome to Delhaize Group's conference call regarding our Q4 and full year 2014 results. Today we have the following people with us Frans Muller, CEO of Delhaize Group; and Pierre Bouchut, CFO of Delhaize Group.

During this call, we will first look back on our performance in 2014, followed by our priorities for 2015. Afterwards, we will take questions and for those unable to stay on the call or wish to listen to it again, a replay will be available on our website.

Before I hand over to Frans I just want to read out the disclaimer to this call. 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 materially. 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.

These statements are made as of the date of this presentation, and Delhaize Group assumes no obligation to update this. Frans the floor is yours now.

Thank you, Frederic. Good afternoon, everyone.

And welcome to the presentation of our Q4 and full year results. As usual I will use the presentation that you can find on our website or which you might have received this morning by email.

Slide three, summarizes our strategy and priorities that we have followed over 2014 and most likely you are familiar with those. Our periodic which you see on the right hand side of the slide are put the customers back at the center, focus on our core markets, realized more operating efficiencies and frankly execute with speed.

We will continue to focus on these priorities also for the year 2014. Our strategies translate into a number of principles on slide four which act as guard rails to make decisions and set priorities.

Our first principle is that the customer has to be at the center of everything we do. Our customers vote on us every day with their wallet.

We should continue learning how we can serve them better every day. Our second principle is that we should learn to grow.

We should be quicker in adopting new technologies, be more disciplined in promotional activity and pricing and I believe that there is a lot of opportunity for us to grow by being more commercially aggressive. We will look at store growth at portfolio opportunities and finally strengthening our digital capabilities.

Our third principle is that we have to lead locally. We see the supermarket business as local and believe that relative market share truly matters.

The last principle states that we want to drive profitable growth today and beyond. We will build on our expertise and innovation and fresh and private label and respond quicker to changing trends.

If we follow these principles, we believe we can live up to the promises we have made to our stakeholders which are the following: We serve our customers with an attractive local shopping experience. We reward our associates appropriately.

We have part of our communities and act responsibly in our local activities. And finally, we strive to generate an attractive return for our shareholders.

And now on slide number five, which provides the highlights of the fourth quarter. We had a strong end of the year at Delhaize America with 3.6% same store sales growth, resulting in 4.4% comparable same store sales growth for the full year.

Both Food Lion and Hannaford enjoyed a solid Q4 reporting positive sales and real growth and both banners booked further market share gains. Note that Food Lion gained market share while having a slightly lower store count than last year.

Hannaford’s market share gain was also pleasing given that its competitive environment has continued to normalize compared to events during the summer. In terms of UOP margin, we also had a strong quarter but Pierre will elaborate on this later.

In the second half of 2014, we relaunched our first 76 stores with Easy, Fresh and Affordable strategy. This took place on-time and on-budget.

We remain cautiously optimistic with the first results on which will we elaborate further during the Capital Market Day March 17th in Wilmington. At Delhaize Belgium, Q4 has been a very challenging period.

Our performance was significantly impacted by disruptions caused by the transformation plan. Our operations experienced strikes at out of stock in stores and we have clearly not been able to provide our customers with the service they can expect from us.

In February, we have reached a final agreement with our social partners and going forward, we now focused on implementing the plan. I will come back on this later during the presentation.

Our main task at the moment is to focus on improving the sales trend in Belgium. Our 2015 priorities therefore to get more customers into our stores.

Finally in Southeastern Europe we have been able to maintain a good level of profitability and regained market share in all three countries. We were able to realize revenue growth in this segment mainly because of further store expansion in both Romania and Greece.

Our comparable store sales was negative and this reflected the continued tough economic backdrop in Serbia and in Greece. Following these highlights, I would like to leave the floor to Pierre to go through the financials in much more details.

Thank you, Frans and good afternoon to everyone. Let’s review now our Q4 and full year 2014 financial results.

Slide six provides you with a summary Q4 income statements. All the figures on this slide are including the additional 53rd week of trading in the US unless stated differently.

At EUR5.8 billion our revenues increased by 11.4% at actual FX rates and by 6.3% at identical rates. Excluding the 53rd week of trading, our revenues increased by 6.4% at actual rates and by 1.3% at constant rates.

Our gross margin stood at 23.9% and decreased by 24 basis points compared to last year at identical rate. This is largely explained by 170 basis point gross margin decrease at Delhaize Belgium driven by sales disruption following the announcement and the negotiation of our transformation plan by higher logistic and shrink [ph] by significant deflation in foods and vegetables.

We also experienced a 40 basis point gross margin decrease in Southeastern Europe with an increased level of promotion as a result of a more competitive landscape as already mentioned by Frans earlier on. Delhaize America on its side kept its gross margin relatively unchanged in Q4.

Our SG&A as a percentage of revenues stood at 20.9% and decreased by five basis point at identical rate compared to last year. This is explained by a 90 basis point decrease in SG&A as a percentage of revenue in the US, largely held by the extra sales of the 53rd week.

At Delhaize Belgium, our SG&A increased by 110 basis points as a result of lower sales due to the transformation plan disruption. For SG&A as a percentage of revenue has increased by 45 basis points in Southeastern Europe.

At EUR200 million excluding the 53rd week, our Q4 UOP decreased by 2.1% at identical rates. This is mainly explained by the 54% drop of our Q4 UOP in Belgium.

Therefore, our UOP margin amounted to 3.6% excluding the 53rd week. A decrease of 13 basis points at identical exchange rates.

Let's point out that we generated EUR331 million operating free cash flow in this fourth quarter. The following slide is our 2013 summary income statement, Here again all the figures are including the 53rd week trading of trading for the Latin America unless stated differently.

A EUR21.4 billion group revenues increased by 3.7% at actual rates and by 3.9% at identical rates. Excluding the 53rd week of sales increased by 2.5% at actual rate and by 2.6% at identical rates.

Gross margin decreased by 29 basis points at identical rates from one year to another, as a result of the 20 basis point gross margin erosion at the Latin America and the 125 basis point gross margin in Belgium partly offset by a 30 basis point gross margin increase in Southeastern Europe. Our SG&A as a percentage of revenues stayed flat at 21.1%.

While we are pleased with the stabilization of our SG&A expenses, we continue to have the ambition to reduce this ratio overtime. Our UOP decreased by 3.3% at identical rates to EUR762 million and our underlying operating margin stood at 3.5%.

Here again, our group UOP erosion is largely explained by the 40% drop of our Delhaize Belgium UOP over 2014. After one-off cost which I will detail in a minute.

Our operating profit for the year was EUR423 million, a decrease of 22.1% at identical rates compared to last year. While also taking into account, the EUR172 million net finance cost, EUR4 million income from equity accounting joint venture of Super Indo and EUR66 million tax expenses reported a net profit from continued operation of EUR189 million, a decline of 30.5% compared to EUR272 million reported last year.

Our operating free cash flow stands at EUR586 million. This excludes the proceeds from the sales of Sweetbay, Harvey's and Reid's in the US for a total of EUR171 million, which brings our total free cash flow for 2014 at EUR757 million.

The following slide gives an overview of the major non-recurring charges impacting our P&L in Q4. There are two major non-recurring charges.

First, the impairment charge of EUR124 million pretax or EUR74 million after tax on Bottom Dollar Food, which is included in discontinued operations following the announced divestiture of these stores. Second and above all, the reorganization provision of the EUR137 million related to the agreement which reviewed [ph] on February 23rd of the transformation plan for Delhaize Belgium.

Let me highlight specifically, first that approximately all of the EUR137 million is planned to be cash out in 2015, while the remaining portion will be spread over the nine coming years. Two, that our transformation plan will result in approximately 1800 employees leaving on a voluntary basis, either with a pre-patching status or with a separate redundancy package.

Three, at the same time, the agreed transformation plan will also allow of Delhaize Belgium operation in stores to further address Delhaize overtime its workforce through natural attrition. It is worth highlighting that over the last four years, the amount of one-off charges, impairment, non-performing stores, closing expenses and other charges has reached almost EUR1.4 billion.

The work of the digital structuring of portfolio adjustment is probably now behind us. The following slide shows the evolution of our EBITDA and underlying EBITDA in Q4 and in 2014 both including and excluding the 53rd week.

As you can note, at identical rates of 2014 EBITDA decreased by 12.3% to EUR1.44 billion excluding the 53rd week while our underlying EBITDA decreased by 2.5% to EUR1.360 billion. It is worth noting that our underlying EBITDA erosion is about the same at identical and actual exchange rate of 2014 as on average over the year, the US dollar has been stable versus the euro.

Please note that in Q4 at identical rates or underlying EBITDA is stable while it has increased by 5.1% at actual rates reported by US dollar appreciation during the last month of 2014. Slide 10 gives you more insight on the revenue evolution at Delhaize America of Q4 and full year 2014.

In Q4, we reported same store sales growth of 3.6% reported by retail inflation of 2.6%. Both Food Lion and Hannaford continued to report positive retail gross sales although it is clear that the comparison base get tougher.

The 53rd week resulted in a positive revenue contribution of EUR259 million or $344 million. When taking into account the 20 basis points positive impact from store openings and the 53rd week impact of Q4 revenue growth stand at 12.1%.

For the full year 2014, we reported 4.4 same store sales growth. In addition to the good momentum at Food Lion driven by the phase repositioning do get in mind [ph] that this performance was also supported by snow storms at Food Lion in Q1 and by the positive impact of the Market Basket disruption on Hannaford sales in Q3.

We estimate those two events to a boosted of full year same store sales by about 100 basis points in total. If we had 10 basis points positive impact from store openings and the impact of the 53rd week revenue growth stand at 6.6%.

Full year re-growth stands on its side at 2.8% for combined two US bundles [ph] when taking into account an inflation of 1.6%. The following slide provides you with background information on our underlying operating margin evolution at Delhaize America.

In Q4, we reported a UOP margin of 4.2% or 3.8% excluding the 53rd week. The latter represent the 50 basis points increase over Q4 last year, largely explained by positive sales leverage and a good SG&A control while last year Q4 was impacted by the price investment made in Food Lion phase 5.

But please be aware that the launch of the 76 remodeled Easy, Fresh & Affordable stores at Food Lion negatively impacted our UOP margin in H2. This was the consequence of a significant pre-opening cost including first, accelerated depreciation of the remodeled stores, two, extra labor cost to support the assortment we set but also additional training.

And three, grand opening promotion and advertising. For 2014, we estimate these launching costs to be $36 million or approximately 475,000 remodeled stores but we plan to reduce them to 325,000 per store as of 2015 with better cost control and specific vendor support.

However, the full year 2014 Delhaize America UOP margin remain relatively stable at 4% as SG&A reduction could offset a decrease in gross margin. The next slide presents the Delhaize Belgium sales evolution over Q4 and full year 2014.

Over Q4 Delhaize Belgium same store sales declined by 6.9% and were strongly impacted by disruption in our stores and distribution centers related to the announcement and the negotiation of the Delhaize Belgium transformation plan. In fact, Q4 was the quarter during which we have been the most impacted by strikes.

We estimate the direct impact of strike at EUR30 million of loss revenue in Q4. Although, the total impact on our sales and operations with store disruption and notably throughout of store is certainly much higher.

Our minus 6.9% same store sales over Q4 was precisely impacted by the following elements. First, price [ph] with a direct impact of about 210 basis points.

Second, 70 basis points because of price investment and deflation notably in food and vegetables as you know where prices went down by 4.4% in Q4. Three, other impact from disruption including out of stock and estimated at 410 basis points.

With the positive calendar impact of 60 basis points and a positive 30 basis point of network expansion Delhaize Belgium revenue growth in the fourth quarter stands at minus 6%. Over the full year, Delhaize Belgium revenue growth stand at minus 3% while adding a minus 3.5% same store sales evolution, the positive 10 basis point calendar impact and a positive 40 basis point impact from network expansion.

We expect at least the first half of 2015 to remain difficult in terms of same store sales evolution in Belgium. Today, following the final agreement revisions, our team are working hard to get back to the level of excellence in quality and service that our customers are used to and expect from Delhaize in Belgium.

This is supported by more advertising, improved prices and the more innovative assortments. As shown on the following chart, Delhaize Belgium UOP margin decreased by 200 basis point over Q4 to 1.9% and by 150 basis point over the full year 2014 to 2.4%.

The Q4 drop is largely explained by the following elements. First, around the 100 basis point due to lower sales resulting from disruptions in the month [ph] following the announcement of the transformation plan and two, another 200 basis points due to price investment and deflation notably in foods and vegetables.

For the full year, the 150 UOP decrease is explained by the following elements. First, around 50 basis point due to lower sales resisting from disruption following the announcement of the transformation plan, two, around 80 basis point due to price investment and deflation, and three, around 20 basis point resulting from higher logistic expenses due to the startup cost of our new automated DC and dark stores for e-commerce delivery.

On the following slide, we provide you with a self-evolution in our Southeastern Europe segments. Our same store sales for Q4 stands at minus 2.2% for the segment and was expected as already mentioned by Frans by difficult consumer environment in both Greece and Serbia.

Greece is also seeing increased promotional pressure from competition. Real [ph] volume growth was negative in the three countries.

Taking into account the 30 basis point positive calendar impact and the 590 basis point positive impact from store openings, a revenue growth at identical rate for Q4 was 4%. On the full year basis, we reported the same store sales of minus 1%.

If we had the 10 basis point negative calendar effect and 540 basis point positive impact from store openings, a revenue growth at identical rate for the full year stand at 4.3%. It is worth highlighting that in Greece and Serbia [ph] market shares has progressed by 90 basis points in 2014 up to 18.2%.

In Romania as a result of a continued strong expansion major demands [ph] has reinforced its leadership position in Bucharest increasing its market share locally. In Serbia, Maxi has also been able to increase its market share despite a very adverse economic condition and now stand at 14% an increase of 45 basis points compared to last year.

On this following chart 15, we provide you a more details on the margin evolution for Southeastern Europe. In Q4 UOP margin decreased by 42 basis points to 7.1%, this is largely explained by an increase in the gross margin helped by improved procurement terms.

During full year 2014, our Southeastern UOP margin remained stable at 4.4% mainly driven by a 30 basis point improvement of our gross margin which was offset by higher SG&A in order to support our expansion in Greece and due to lower sales in Serbia. Note that the slowdown of our wholesale activity in Serbia and the winding down of our transit sales activity account for an estimated EUR30 million revenue decrease and a consequently resulted increase in SG&A and gross margin as a percentage of revenues.

The following waterfall analysis provides a breakdown of our cash flow generation in 2014. At EUR586 million our operating free cash flow was supported by first quite stable EBITDA of EUR1.340 billion which is including the EUR137 million of reorganization provision for Delhaize Belgium.

Two, continued improvement in working capital for EUR139 million. Three, controlled increase of our CapEx up to EUR606 million through continued discipline in our spending.

Fourth, a decrease in interest paid resulting from our lower net debt level. And five, other cash inflow for about EUR49 million which mainly come from the disposal of two distribution centers in the US.

If we add EUR171 million proceeds from the divestitures Sweetbay, Harvey's and Reid’s for 2014 free cash flow stood at EUR757 million. Let me highlight that over the last three years, our cumulative generated operating free cash flow had reached EUR2 billion, which is EUR500 million above the 1.5 target that we have committed to back in 2012.

Slide 17 gives you the evolution of a core working capital. As you can see over the last three years we have reduced our core working capital by 11 days from the end of 2011 to the end of 2014.

This resulted in a significant decrease of our working capital needs of EUR661 million, obviously this has been an important source of free cash flow generation over the same period actually about a third. As exposed on the following slide and as a result of another week of solid free cash flow generation, our net debt has decreased by over EUR1.6 billion over the next three years down to EUR997 million at the end of December 2014.

Therefore, our leverage ratio as measured by the adjusted net debt of adjusted EBITDA continue to improve and stood at 1.6 times in December of 2014 compared to 2.5 times in December of 2011. Slide 19 shows our cash position at the end of 2014 which stood at EUR1.6 billion from this EUR1.6 billion we have in the meantime used EUR437 million to purchase some of our outstanding 6.5% coupon 2017 bonds and 4.1 coupon 2019 bonds in the purchase offer which closed successfully in February.

This transaction will allow us overtime in the coming years to reduce our annual interest expense by approximately EUR22 million per annum and enhance our underlying net operating profit by approximately 3.2%. The one-time impact on our P&L in Q1 2015 will be EUR40 million before tax while our net debt capacity will improve by EUR68 million.

This following slide 20 provides you with a breakdown of our capital expenditures by geography and by category. As you can note our group CapEx has increased by 7% in 2014 up to EUR606 million.

We have increased the proportion of our CapEx going to Southeastern Europe as a result of 157 store opening in the region in 2014 and our new DC in Serbia. In 2014, as you can see as well the proportion of our CapEx dedicated to store opening has decreased at the benefit of remodelings mainly in the US as we started the rollout of Easy, Fresh & Affordable for the coming years.

Going forward, we expect non-CapEx to be spent compared to the previous years. With first the rollout of Easy, Fresh & Affordable initiatives.

Two, the rollout of new developed store concept in Belgium for an ambitious [indiscernible]. Three, an objectives to pursue growth in Southeastern Europe.

And four, our plans to accelerate expansion at NFO. Slide 21, shows our proposed dividend for 2014.

Based on the 2.9% increase in our underlying net income for continuing operation between 2013 and 2014. And on our 35% payout policy, we will propose to our General Meeting of Shareholders in May.

The 3% increase in the gross dividend to EUR1.6 per share. I'd now hand over to Frans to present to you our operational agenda.

Thank you very much Pierre. I would like now to update you on the transformation plan in Belgium on which we signed a final agreement with our social partners on February the 23rd.

When we announced this plan back in June of last year, our main aim was to address the structural and growing gap in salaries and working conditions in our company compared operated stores compared to our peers. We are convinced that with the agreement reached we have closed [indiscernible].

In addition, we expect this gap to narrow further in the coming years as we hire a new employees under the new wage and labor conditions. Slide 22 gives you an overview of what we have accomplished.

We have agreed on the collective dismissal for 1,800 employees all on voluntary basis. We believe this measure will result in significant decrease of the labor cost gap that we have with our peers.

We have recognized 137 million provision in our Q4 2014 accounts in this respect and we will use approximately half of this provision this year when our employees start leaving the organization. The remainder of this provision will be spread over the future years spending on the pre-pension schemes.

We have also agreed on ways to optimize our store network. We intend to affiliate nine company operated stores and to close one.

In terms of benefits and working conditions, there will be changes as well taking overtime apart from adapting working conditions for our current work for us. We have also greater significant changes for new joiners.

This implies again that our labor cost structure will improve further overtime as more newcomers join the organization. Finally, we have agreed on the new store organization and on a number of efficiency projects.

We are planning to gradually rollout this new store organization as from this summer. The new structure will enable us to be more customer centric as well as more efficient in the way we operate our stores and this should be fully implemented by the end of 2016.

On the right hand of the slide, there is an overview of what we believe, we will realize with this outcome. Firstly, we believe, we’ll generate significant cost savings and as you hopefully understand the savings are gradually going to increase overtime and the full scope will be realized by 2022.

And to give you an indication, we expect to have realized at least EUR80 million of annual savings by the year of 2018. These savings will form an important source of investments that we are planning to make in the coming years.

We have started our commercial strategy around [indiscernible] in 2014. For 2015, we have scheduled more intense commercial campaigns and some sustained price investment.

Also we’ll rely more on our innovations as we are planning to speed this up in fresh and in private label brands. Additional marketing investment should further contributes to drive customer traffic and it should enable us to help the last brand regain its historical strength Secondly, we will modernize our store network.

Although, we are planning to remodel 16 stores in 2015, we are still fine-tuning the first four pilot stores that we opened last year. This process is likely to conclude in this summer and as a result the pace of remodelings is expected to significantly accelerate in ’16 and ’17.

Thirdly, I already mentioned our new store organization that should also be more service oriented as we increased training for our associates and we also plan to reorganize activities in the meat and fish departments in order to have more time to be more service oriented just to give you an example. Finally, we are planning additional investments in our distributor centers and IT.

The next slide on page 23 give you some example on how we, how our new commercial strategy is working in practice. The fruit and vegetable picture is from our store in Nathan Bake [ph] which is one of the pilot stores that we opened last year.

We have already indicated that the customer response in fruit and vegetables as well as in bakery have been really encouraging and there are still areas where we need to improve further. These areas are the meats department for example, the price perception of the store and more efficiency in the CapEx spend.

Product innovation is also an important part of our strategy and you can see an example of that with the picture of enhanced gluten free assortment and another one of our recently launched coffee capsules. These are based on 100% coffee beans and a sourced 100% fair [ph] play.

We launched four different flavors, represented by four different countries of origin Brazil, Ethiopia, Colombia and Indonesia. We have also given last year a new look and feel to our delhaize.be website.

And recently we have also changed signings of the pickup points at the stores. It illustrates the ambition we have in the delhaize.be.

Following the initial issues, we have with launching the new website and with the opening of the dark store, we are currently confident that we are able to accelerate growth through this platform. I am now moving to the priorities of Delhaize America on page 24.

You are aware that we are still, that we will be hosting a store tour in Wilmington on March 17th. I will therefore brief here at their time schedule to elaborate at this event.

At Food Lion, the plan in 2015 to further fine-tune our first 76 stores in Wilmington and Greenville that are reformatted in the Easy, Fresh & Affordable strategy. While we remain encouraged by the first result, there is work to be done on a number of areas, such as labor hours and shrink.

Secondly, we are planning to remodel approximately 160 stores in ’15 for a capital investment on average $1.4 million, $1.5 million per store you have heard this figure before. Thirdly and this might have more impact on the short-term, we continue to implement improvements across the network to strengthen our position.

Last year, this was focused on center store assortment, associate training and on check-out technology. This year, we have an important initiative on private brands for example.

At Hannaford brothers we are putting a strategy in place to reinforce its core strength, which we believe our fresh, quality, customer service and its position in local communities. Although early, we will tell you a little more on this in our Wilmington visit next week.

Additionally, we aim to accelerate growth at Hannaford both in terms of comparable store sales growth as well as in-store openings. Finally, we have a number of initiatives to improve Delhaize America as a whole, which you see at the bottom of the pitch.

In 2015, we will reinforce our pricing across both Hannaford and Food Lion. And in addition, we have also started to rollout our new pricing tool powered by Revionics.

For this tool, we believe our price investments going forward can be done more effectively and drive improved results. Our private brand re-launch including its new price architecture is taking place from Delhaize America level at its, at both its Hannaford and Food Lion banners and has now already started to gain attraction.

At the support center, we aim to improve our efficiency and finally we plan to improve our IT systems and infrastructure and as you remember from earlier calls, there is a lot of work to be done in this area. I am now moving to Southeastern Europe on page 25 and its priorities.

At Alfa Beta in Greece we aim to further expand our market share and as you know we’ve been able to generate the strong market share growth and we are keen to see this continuing. Our efforts are focused on four areas.

Firstly, for updating assortment to leverage on our strong reputation in Fresh. Secondly, we would like to improve our price perception.

The Greek market has turned very promotional over the last month and Alfa Beta is traditionally more focused on having competitive share prices rather than having a large part of sales done on promotion. Thirdly, we will continue to merger our SG&A levels and finally, we aim to continue growing selectively ideally through small store acquisitions.

In Serbia, the emphasis lies on further improving our current operations. Our Maxi supermarkets are going through a remodeling phase and we have started to see encouraging results from this.

Also at Tempo high markets we are looking at improving the concept, we will have the first new concept store of Tempo opened in April. Finally we have rebranded all our convenient store through the Shop & Go format.

And we believe that we’re improving our strength and strengthening our current brands we will eventually be in a position to grow faster in Serbia and also through new stores. Finally at Mini Max Romania the priorities have not changed.

Further expanding in the Greater Bucharest area remains the number one priority although also at Mini Max we are looking at further optimizing its assortment. On page 26 brings me to the outlook for 2015.

We will not be very specific today on our outlook as it's still early in the year. The focus for the Group is on Easy, Fresh & Affordable at Food Lion and at implementing the transformation plan in Belgium.

In terms of trends for Q1 we would like to give you the following messages. Firstly, we believe that the same store sales at Delhaize America should remain positive for both Hannaford and Food Lion in first quarter, however note there is a significant volatility in our sales, in our sales trend given the winter conditions in our trade areas in both this year and last year.

Secondly it is reasonable to assume that there are sales trend and our profitability in Belgium remains impacted by the weak second half we had last year. And thirdly, in Southeastern Europe, we expect to see a revenue growth but our same store sales trend is likely to stay negative reflecting the tough economic background mainly in Greece.

We have seen signals of sales improvement in Serbia. And finally we expect to spend around EUR700 million in capital expenditures using identical exchange rate of 1.33 to the dollar.

With that, I would like to open up for questions. Operator could you please organize the Q&A session.

Hi good afternoon guys. Just two questions from me on Belgium and on your free cash flow generation.

So on Belgium you talked about the gradual ramp up of the cost saving till 2022 to what extent could we see a difference in timing negatively impacting your P&L between the timing of your investment in your customer proposition and the savings? So as a result will it be sensible that your EBIT margin in Belgium for the full year ’15 and ’16 could be ranging between 1.5%, 2% does it seem sensible figure to you?

And just on the free cash flow clearly you generated very strong free cash flow over the past three years, however the generation was gradually declining so you’re ramping up a bit your CapEx this year in 2015, so if I guess should we be expecting further decline in your cash flow generation and do you think it's possible that you could generate a cash flow above 500 does that seem optimistic?

Well I start with the free cash flow question Edouard. First of all we are not going to give any guideline on today.

You're right in saying that our CapEx should increase by we said about EUR100 million for the year. We still think that we have some working capital improvement to be done in the coming years at the pace of one or two days per annum over the three coming years.

And we still we do expect a strong EBITDA as well in the coming years. So all that put together yes it is sure that we may not be able to burst as strong free cash flow as over the three last years which were an average of EUR666 million.

But we still expect solid free cash flow for the coming years. This being said as you understand very well 2015 will be a year of transition with the implementation of our transformation plan in Belgium and with the first all out of Easy, Fresh and Affordable with 160 stores as first which is clearly.

So maybe of course in 2015 our free cash flow will be lower than what it was this year for instance that for sure. So I give you the ingredients of making your own calculation but at these stage we will not post any clear guidance as of early March.

You want to - well I mean that the question on the savings, we do have the clear working plan from 2015 to 2022. We gave you an indication on what would be the saving as of our estimate of the saving, a conservative estimate of the saving as of 2018.

We do expect some saving as of this year as you understand it correctly, the 1800 employee going to leave our company will have left the company by the end of the year in different ways. Once again 2015 will be a year of transition so it's difficult to give you some precise figures on the UOP margin for 2015.

But we do expect as of 2016 and onward that the combination of savings, or our cost savings, our price investments and the resulted sales at least along with the remodeling of our stores to bring good results on our UOP line.

Okay. Thank you.

Yeah good afternoon guys. Just a couple from me, first of all just in terms of the cash flow it has been very strong, the balance sheet has now delevered.

I understand this sort of a political sense this time around the Belgium transformation, but can you say anything about what you would look at as conditions, the returning cash to investors our incremental cash beyond the dividend that's the first question. And secondly, you referred to sort of increased competition in Southeast US, can you just perhaps expand upon that and give us the sense of your comp store sales strict to flood side, the snow impacts.

And finally just on CapEx, why you need more than 700 million if you're spending 600 though or not 600 already and you've now got quite significant transformation plans in Fresh, Easy and Affordable and the Belgium business. So what's being put back?

Okay if we talk about the first question of the efficient balance sheet just for now. Pierre already highlighted and myself including that we, with Easy, Fresh and Affordable with 160 stores this year and if this goes well then we would like to accelerate that scheme.

And the second thing is that we have a transformation plan to implement in Belgium in the coming years which you also require an investment and some flexibility there. And the third thing is that where we have the optionality we would like to accelerate both in Southeast but also at Hannaford, our growth for that region we feel it's at the moment smart to keep options in our hand to be able to act accordingly.

On the competition in the Southeast, we talked about it before that the Southeast is for us a more competitive landscape than in the Northeast historically and also Food Lion was successful in competing there with the local’s position and an upside in the store productivity. We see in both regions competition growing in the Northeast mainly new players, who come into main and some other new inlet markets and in the South it stays very competitive.

And we’ve talked before about Kroger and Harris Teeter, we talked about the Wal-Mart neighborhood stores growing also their footprint and we also talked about let’s say the dollar segment including all the swap [ph]. We feel confident that with the present propositions we have, we feel at the moment price.

Right Easy, Fresh and Affordable looks encouraging, but also the phasing work what we did before still paying off recycling now. So competition is increasing more consolidation in the US plays payers from the South coming more North publics to Charlotte and so on if a couple of those examples.

But we feel that we are very ready for this increased competitive pressure.

And so just coming back to the like-for-likes you’re talking to act ex the snow impact. And perhaps to show sense how they evolve through the year because inflation may come down with the lower oil price?

Yeah, it’s a little difficult John last week we had 2 inches of snow and we had some of the stores of Food Lion doing 30%, 40% growth and the week after there was a small dip. So as a little bit volatile at the moment.

What we say is for the first quarter of 2015 that we see for sure a positive same store sales growth coming.

Okay. Thank you very much.

Yes, hello Jerome Fellaini, HSBC. Can you perhaps coming back on the impact of the very first program in the US.

Can you please repeat what's the expected impact for 2015 and thereafter and for the 160 stores? And second question is if you can elaborate more on the new concept installed in Belgium please?

Are you talking about Easy, Fresh and Affordable about the capital expenditure, OpEx impact?

OpEx impact, yeah. You said $1.5 million for the CapEx, but in terms of OpEx.

What we said there is two things is pricing. An average CapEx based of $1.5 million as an average first.

Second, we have experienced pre-store opening in 2014 of $475,000 and we plan to reduce such to $325,000 in 2015 as whole better cost control, but also whole additional vendor allowance. Is that clear?

Yeah. So it’s about 70 million impacts?

Stores which are opened in 2014 and we plan to open 116 in 2015. So you can do yourself the calculation.

Yeah, it’s clear.

The second question was about the concept in Belgium.

Concept in Belgium, we have those four stores, which are now pilot stores and if you will close stores then you will see much more permanent produce department in the whole fresh parameter, we see now a very good reaction from customers on fruit and vegetables and the bakery by we see that on meat, we still have a few things to do. Also sent to store we slightly cut our assortment and we got some reactions there to see if we read the right thing there.

At the same time, it’s not so easy to judge those four stores and I don’t want to avoid your question. But of course also the transformation plan in general and the strikes we had DC, it’s not working for three days and of course also the impact on those four new stores.

Overall, we think that by summer we have done the exact analysis of those four stores and those stores we opened are in more affluent areas so that is not represent for the total country but we see of those four stores roughly and possibility for 35 stores in our network to bring into that kind of level. Overall positive a few things to do, the fresh parameter fruit and vegetable bakery meats a few things to study further.

Okay. Thank you.

Yes good afternoon gentlemen. Thanks for having my questions.

I have a couple of questions left if I remember correctly last June you mentioned that you had to invest EUR450 million in your commercial activities over the period 2015, 2017 I was wondering if you could maybe split some amount into real CapEx and operating expenses after that I was wondering if you could provide any tax rate guidance for 2015 and maybe provide a split geographic wise and category wise for your CapEx in 2015 as well. Thank you.

I am going to handle the effective tax question. If my memory is correct for the full year 2014 we reporting an effective tax rate of 26% is that correct, 26%.

I think it's a good guidance for the coming years between 25% and 27% is a good guidance for the coming years. Regarding your first question could you be more precise on what we said, I think the CapEx breakdown.

Referring to the room our transformation plan gives on investing and modernizing our network in Belgium, the 450 million refer into.

First of all this 450 million on a three year spend basis and we made the mix as an indication investment in CapEx but also in customer proposition in pricing and this kind of thing so there is a mix basket of items we just got the approval or we just got the agreement with the social partners on 23rd of February and we're now doing our homework to get the transformation plan properly implemented and that we very carefully look not only that we will get the gains on the table out of the plan but also that we do our CapEx and OpEx planning now more precise for the coming quarters. So we have not done all the homework yet to spread this carefully.

And what we did so far is we picked up our communication after the six eight months of transformation plan to a higher level. We increased our share of voice in the market because we have much below our fair share so in communication to make sure that the fact that we invested in price and that we feel that we have priced right now that we also get that sales, the sales we want as well.

So it should give us a little more time on this to do the exact for the coming four five quarters of the planning but it's a mix basket 450 spread over three years.

Okay. Thank you.

But there was a still a question on the CapEx regarding the geographical split of your EUR700 million CapEx.

We are not going to give you today a precise background but as you understand we are going to invest Easy, Fresh and Affordable in the US so you have an idea already - calculation. As we said its earlier we plan to continue our store expansion in Southeastern Europe, we do want to extend also our business in Northeast.

And last but least as Frans mentioned it we also want to IT yes IT of course would be significant source of CapEx spend in 2015 as in the year's before and we have also this plan of remodeling accelerating the remodeling of our stores in Belgium.

Those are the main buckets.

Okay. Thank you.

Yes hi good afternoon, three questions from me please, firstly in terms of Belgium Frans you have talked I think in Q3 about tangible contribution coming from Coopernic buying agreement in FY15 does this give you enough ammunition to invest in prices in combination with transformation plans savings to protect what seems to be a very low ways of profitability from FY14 i.e. at least maintained the profitability in FY15 on a full year basis.

And secondly coming to the Easy, Fresh and Affordable strategy rollout. In FY14 I think despite 36 million of pre-op cost you've had a flat small improvement in margin in the US on a 52 week basis, you're flagging potential for these preopening cost to be something like 50-55 million but do you have enough cushion in the gross margin SG&A to absorb these to maintain overall flat margin situation for the year in the US and those are the two questions and then last one is the cash tax in FY15 it will be very helpful if you can give us an idea how we should be thinking does it cash tax clearly there has been a big delta in terms of cash tax outflow in '14 versus P&L tax, how we should be thinking of cash tax in FY15 that'll be helpful.

Thank you.

Okay those were indeed three questions but let’s revisit them. On Coopernic we moved away from AMS to Coopernic not because AMS had been in bad period we had a very successful period with them over the last years, but AMS was very much focused on the private label where the main contributions came and most of the contributions came for Belgium as a country.

With Coopernic we have now a different focus it’s not only private label but it’s also the national grants are involved and we see this happening now for our total European landscape which is a win in itself and the third thing is we have first ideas on goods not for resale also to do with this receivable group of partners with Coop Italia and with Leclerc. So I am pretty sure that we get extra money out of Coopernic compared to our AMS proposition.

This we will see coming in 2015, the countries will be allocated with those gains and I think those money could be wise could be used for our price competitiveness but how much this exactly will be this gain we don’t know and we only allow them to invest this in prices where we have good brands to do so. And the second question was on…

Easy, Fresh and Affordable what is if we do what is our expectation of Delhaize America operating margin we are not going to elaborate about detail today we have an investor day on one hand, on the other hand the question you’re asking is yes, we have mentioned to you what will be and you have done yourself already the calculation of the pre-opening cost on our UOP, so the order of magnitude you came out is correct but globally we think that we’ve been in a position to maintain the operating profitability in the US in 2015 yet. And your last question was about tax I mean the rated tax outflow in 2015 versus 2014 you understand that this is a very technical question, we would see probably an increase of our tax outflow as a result that the underlying stabilization of our effective tax versus the higher taxable income so yes there should be an increase which would effect of course negative yield of cash flow but that’s right.

Very good. Thank you.

Yes good afternoon Frans and Pierre one question from me, could you comment on your plans for price investment in the U.S. is there any additional price investment to follow the OpEx investment in Easy, Fresh & Affordable given that gross margin have been coming down for few years is that a trend you expect to see pending soon or is most of future margin expansion driven through the leverage of SG&A?

Thank you.

Two things here we corrected as you can remember over the last 1.5 year, 200 basis points or price investments for Food Lion, because we felt we were not priced right. At the moment, we feel, we are priced right.

But at the same time, we would like to participate in this market going further. So if we have dynamic competitive actions then we will act accordingly.

So we will make sure there is not pricing ourselves out of the market. The second thing is I mentioned that we have on the verge of getting our pricing store rate.

And we bought Revionics and data is loaded and the first batch of categories is now ongoing study with Hannaford and with Food Lion. And of course that Revionics pricing should give us also some funding and for price investor we’d like to make funding come from where we maybe price to cheap or how to deal better with promotions.

And the third thing is that our expectation now, but this would Pierre already mentioned we cannot be very explicit, because early in the year what we target at stable markets in the US, which finance both from SG&A and from better pricing with our pricing tool.

Okay, that’s perfect. Many thanks.

Yeah, hello. It's Fernand de Boer from Petercam.

One question left my side. I think you mentioned sounds that on Belgium you’re now price rate.

But if I look at, I think you still have significant gap to compare some of your competitors. Could you elaborate a little bit on that?

First of all, it’s a matter of definition what you call significant and I don’t know how you measure. But we feel that we do not have significant price gap and that we close the gap quite a bit towards called out and towards all the time.

So therefore we say, we have priced right, what we are not getting yet is the direction from our customers on the price perception. And that’s exactly the reason why with our campaigning why we now get on television ourselves and this has been a long time ago and because our share of voice was absolutely to low compared to our market share.

So we are now louder in communicating not only the proposition on assortment, but also our price competitiveness. And a lot of customers get more and more feel about this not only price and free, but also the regular assortments.

And we’re going to prove to the market that we have price right and there is also why we confidence that we can gain our customers back after we have got bit of some effects still from last year.

To comeback on this, you mentioned compared to [indiscernible] and call guide. But I had fitting that - reduce it’s get with call guide.

So they should imply that you increase a little bit your gap. Is it correct assumption?

No. That is, we would, no, that is not our assumption.

I think towards the regular call guide roughly 4% off and therefore open roughly cheap not too easy to measure because a regional stores and then we have a complete different promotion scheme and a 4% towards close out we feel, we have acceptable --.

Everyone last question regarding the 450 million the exceptional to each other 137 million take for transformation. This 137 is not part of this 450 million.

Is it correct or?

That’s correct. The 137 is and you’re also would link to the transformation plan, we take the profession now in our 2014 accounts half of it will be cash out in the 2015 year, when 1,800 people were live our company.

The other half is full increase over the next probably nine years having to do with pension, the pre-pension date of 55 to 65. And we do not exactly how this will develop over those years.

Because we firstly to identify which volunteer is going win, what is the age. How can we make our calculation?

The question, it’s on…

It’s not the part of the 400.

Okay. Thank you very much.

Operator, we would like to have our last question please.

Yes good afternoon gentlemen a quick one actually from me just on Belgium. You were highlighting 80 bps of prices this month and deflation actually in 2014 in Belgium so when can we expect you to cycle actually these price investments on a differentiation in 2015?

And can you also give a little bit color it’s difficult to quantify but you had a lot of disruptions in the starting Q4 and actually Q3 you’d disrupted but how do you think that your consumer feel about that do you think that you have also impacted your image by doing all this transformation of plan?

Pierre come back to the cycling of 80 bps and I will come back on the performance and therefore also the ration of our customers. We had heavy disruptions and you might have followed this yourself three days our DCs out of business all our stores surfaced there are two things there to comment first of all it has been heavy fresh inflation for customers that our stores did not have the assortment there which they used to buy.

This is mainly for our company operator stores. We surfaced our affiliate stores as good as we could and although of course they also got some damage I think the overall they got a good understanding for what we are up to because in the end results were in their interest while we know our cost levels.

So yes heavy frustration and it’s not completely repaired yet the total assortment because also IT systems were quite in trouble over that period we're now going back to our automatic reordering. The brand of Delhaize is a very strong brand and I think that we have plenty of potential to regain the leading position in Belgium as an innovative and differentiating supermarket in Belgium.

I am very confident that the brand is strong enough but of course we angle to lot of customers by the performance we had to over the last six months and that’s why we also say and we have costs sometime in the coming month to regain confidence to make sure our execution is up to the perfect levels and that we even get an extra percentage of execution in our stores to get our customers back.

Yeah regarding the 80 basis points that as mentioned it was including both our price investment and deflation I didn’t give any write-down of which proportion is due to price investment and which proportion is due to deflation. As you know deflation started in produce and fruits and vegetables as of spring last year in particular as a result of the retaliation measure that Russia took against the boycott measure taken on that side by Western Countries.

So this deflation in particular in produce and fruits and vegetables started in spring last year so this gives you an idea. This being said, we’re still experiencing deflation in - pricing foods and vegetables notably in this first week of 2015.

Okay thanks a lot for all for participating in today’s conference call. A replay will be available on the company’s website and if you have any additional questions do not hesitate to contact our Investor Relations departments.

Delhaize Groupe will announce its first quarter results on Wednesday, April 29, and for those of you who participate in our Food Line store tour next week see you there and have a nice day. Bye-bye.