Delhaize: Q1 2016 (first take): strong commercial momentum / clarification needed on FCF

Delhaize's Q1 2016 revenue growth woked out at 4.3% on constant currencies to EUR6153m (vs EUR6084m expected by the consensus). LFL sales growth reached +2.6% in the US (vs +2.1% e), +2.9% in Belgium (vs +2.7% e) and +10.8% in SEE (vs +3.6% e). On the whole, Delhaize turned in a very robust performance in Q1 with a 62bp improvement in underlying operating margin to 3.6%. Only FCF (the detail of which needs to be clarified) may disappoint somewhat but, at this stage of the year, cannot wipe out the strong commercial momentum within an industry that is suffering a lack of growth. Buy maintained ahead of the conference call at 09:00 am CET (+44 203 427 1908).