3. ESTUDIO TÉCNICO
3.3 INGENIERÍA DEL PROYECTO
3.3.3 Parámetros y normas prestablecidas de operación
In 2010, net cash provided by operating activities amounted to EUR 1 317 million, an increase of 12.1% at actual exchange rates (8.6% at identical exchange rates) compared to 2009 as a result of lower taxes paid in 2010 mainly due to the positive impact of the debt exchange completed in 2010 and tax optimization opportunities in the U.S., partly offset by unfavorable changes in operating assets and liabilities resulting from higher receivables from affiliated stores at Delhaize Belgium and major improvements in working capital realized in 2009.
Net cash used in investing activities
amounted to EUR 665 million, an increase of 19.6% compared to 2009. This is mainly due to capital expenditures that were EUR 140 million higher than in prior year as a result of intentionally delayed spending in 2009 on store renewals in the U.S., partly offset by less business acquisitions than in 2009.
Capital expenditures increased by 26.8% to EUR 660 million, or 3.2% of revenues. At identical exchange rates, capital expenditures increased by 22.7%, mainly due to higher store remodeling activity in the U.S. and in Greece. In 2010, 62.0% of total capital expenditures were invested in the U.S. activities of the Group, 19.5% in the Belgian operations, 11.4% in Greece; 5.8% in the Rest of the World segment and 1.3% in Corporate activities.
Investments in new store openings amounted to EUR 196 million (29.7% of total capital expenditures), an increase of 9.7% compared to EUR 179 in 2009. Delhaize Group invested EUR 167 million (25.3% of capital expenditures) in store remodeling and expansions (EUR 112 million in 2009). In 2010, Delhaize Group remodeled or expanded 72 supermarkets in the U.S.,
including 31 stores in the markets of Richmond, Virginia and Greenville, North Carolina. In addition, 18 supermarkets were remodeled in Belgium in 2010.
Capital spending in information technologies, logistics and distribution, and miscellaneous categories amounted to EUR 297 million (45.0% of total capital expenditures), compared to EUR 229 million in 2009.
Net cash used in financing activities
amounted to EUR 343 million, a decrease of EUR 153 million compared to the prior year mainly due to the higher number of Alfa Beta shares purchased in 2009 than in 2010 (EUR 108 million in 2009 compared to EUR 47 million in 2010). The Group decreased its short-term borrowings by EUR 42 million in 2010 as a result of lower cash needs thanks to higher free cash flow generation during the year.
In 2010, Delhaize Group generated free cash flow of EUR 665 million or 3.2% of revenues, an increase of EUR 39 million compared to last year despite higher capital expenditures, as a result of higher cash provided by operating activities.
Balance Sheet
At the end of 2010, Delhaize Group’s total assets amounted to EUR 10.9 billion, 11.8% higher than at the end of 2009, mainly as a result of the strengthening of the US dollar by 7.8% compared to the euro between the two balance sheet dates.
At the end of 2010, Delhaize Group’s sales network consisted of 2 800 stores, an increase of 68 stores compared to 2009. Of these stores, 331 were owned by the Company. Delhaize Group also owned 12 warehousing facilities in the U.S., 7 in Belgium, 4 in Greece and 2 in the Rest of the World segment.
Capital expenditures (in millions of EUR)
Free Cash Flow (in millions of EUR)
net Debt (in billions of EUR)
net Debt to equity (in %) 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 714 162 2.4 57.3 660 665 1.8 35.3 520 626 2.1 46.8
At the end of 2010, total equity had increased by 15.0% to EUR 5.1 billion as a result of the net profit and other comprehensive income of the year and favorable impact of stock option activity offset partly by the payment of dividends of EUR 162 million and the purchase of non controlling interests (EUR 47 million). The number of Delhaize Group shares, including treasury shares, increased in 2010 by 684 655 newly issued shares to 102 million. Delhaize Group owned 988 860 treasury shares at the end of 2010. At the end of 2010, Delhaize Group’s
net debt amounted to EUR 1.8 billion, a decrease of EUR 276 million compared to EUR 2.1 billion at the end of December 2009, mainly as a result of strong free cash flow generation.
At the end of 2010, Delhaize Group had total annual minimum operating lease commitments for 2011 of EUR 269 million, including EUR 13 million related to closed stores. These leases generally have terms that range between 1 and 40 years with renewal options ranging from 3 to 36 years.
events after Balance Sheet Date
In February 2011, Delhaize Group has been notified that some Greek former shareholders of Alfa Beta Vassilopoulos S.A. have filed a claim in front of the Court of First Instance of Athens challenging the price paid by Delhaize Group during the squeeze-out process that was approved by the Hellenic Capital Markets Commission. Please refer to Note 35 for more information related to this matter.(1) Excluding finance leases; principal payments (related premiums and discounts not taken into account) after effect of cross-currency interest rate swaps.
Debt Maturity profile Delhaize Group(1) as of December 31, 2010 (in millions of EUR)
2013 2011 2014 2012 2016 2017 2027 2031 2040 619 203 53 337 7 502 80 85 39 229
USD Denominated Long Term Debt EUR Denominated Long Term Debt
On March 3, 2011, Delhaize Group announced to have reached an agreement to acquire 100% of the Serbian retailer Delta Maxi Group, an acquisition that will make Delhaize Group a leading retailer in Southeastern Europe. Through combining Delta Maxi Group with its existing network in Greece and Romania, Delhaize Group expects to generate approximately EUR 3.4 billion in annual sales through 800 stores at the end of 2011. The transaction is expected to be closed in the third quarter of 2011.
AT A GLANCE STRATEGY In 2010 GOVERNANCE STATEMENT FACTORS STATEMENTS INFORMATION