2020 Results Ahead for Ahold Delhaize, but Cautious 2021 Guidance; Shares Fairly Valued

Koninklijke Ahold Delhaize released fourth-quarter results with sales up 13% (18% at constant currency), ahead of our and consensus expectations, resulting in EUR 74.7 billion net sales for the group in 2020 versus EUR 72.5 billion in our model and EUR 73.7 billion for consensus. Comparable sales growth for the year was up 12.5%, 14.4%, and 9.6% for the group, the U.S., and Europe, respectively, versus 14% for the U.S. and 8.6% for Europe based on company-compiled consensus. Online sales growth across regions continued to be strong (in the U.S. up 105% for the full year and 128.5% in the fourth quarter, in Europe up 42.7%), reflecting the group's resilience and solid online capabilities. Notably, bol.com (nonfood online retailer in Benelux) generated positive operating profits and double-digit returns on capital in 2020 with net consumer online sales reaching EUR 4.3 billion in 2020, EUR 1 billion higher than previously targeted.