Dutch Ahold Delhaize wants to bring Bol.com to the stock exchange. At least, for a minority share. Ahold Delhaize does wish to remain in charge of the online shopping platform. The company wants to use the growth potential of Bol.com with the IPO to finance the development of physical stores in the US and Europe. Quietly the company chooses to step back to its core business; food.
Ahold Delhaize Investors want more. The share price is lagging somewhat behind the strong results of recent years, and certainly the strong results during the corona crisis. Nevertheless, the shareholders rewarded the plans yesterday with 0.5 bln extra shareholder value.
According to Ahold Delhaize, Bol.com is profitable. Turnover this year will be €5.5 bln with a gross profit between €150 mln and €170 mln. The financial results of Bol.com were the companies best secret until now. Ahold Delhaize expects to have doubled the sales and profits of Bol.com by 2025.
Then Bol.com could be worth somewhere around four bln euros (a conservative estimate). So then, the sale of a minority stake would yield a maximum of two bln euros for the group.
The question is what use of that growth money for the food branch of Ahold Delhaize will yield the greatest return on investment. Developing a healthy, local assortment for us as consumers with smaller local convenience stores? Capturing a stronger position in out-of-home markets? Building a fast delivery network for online customers from local robotic distribution centers? Data-driven IT systems based on machine learning? Or building out the European store network? Bigger is better!
The wish lists of Ahold Delhaize managers in the US and Europe are long, very long. That became clear during the investors’ day on November 15. In any case, there is no lack of ambition. But, as my grandfather used to say: “spending money doesn’t make you rich.”
Walther Ploos van Amstel.