Good afternoon and welcome everyone! My name is Maria Verheij. I'm responsible for communications at Ahold Delhaize. Before we start with the Annual General Meeting of Shareholders of Ahold Delhaize, I would like to take you through some important safety and practical instructions that apply in this venue and during the meeting. We kindly ask you to take a seat on your assigned seat. As you will notice, there are empty rows in between to allow support staff to walk by with a microphone. I will switch to Dutch now, so please ensure your headset is working if you require translation. Kindly raise your hand if you need assistance.
[Non-English content] Peter, the floor is yours.
Thank you Maria, and a warm welcome to the Annual General Meeting of Shareholders of Ahold Delhaize. My name is Peter Agnefjäll. I'm the chair of the Supervisory Board. I will be chairing this meeting and I'm very happy that you are joining us today. With me here on the stage are the management board. Next to me, I have the CEO, Frans Muller. Next to him, our CFO, Jolanda Poots-Bijl. To the far left, we have our CEO of Ahold Delhaize US, JJ Fleeman. On the right-hand side, we have the CEO of Europe and Indonesia, Wouter Kolk. Representing the supervisory board, next to myself, we have the four committee chairs present. The chair of the Audit, Finance, and Risk Committee, René Hooft Graafland. The chair of the Governance and Nomination Committee, Helen Weir.
The chair of the Remuneration Committee, Pauline van der Meer Mohr, and finally, the chair of our Health and Sustainability Committee, Katie Doyle. Next to me is Corné Grelling, our company secretary. Last, but certainly not least, we have Martin van Olffen present on the stage, our notary. Also present is our external auditors from KPMG. On behalf of KPMG, Eric van Leeuwen will be giving a short presentation and answer questions you may have about their audit and audit report. This is a hybrid meeting. Shareholders who were not able to attend in person were offered the possibility to provide voting instructions or voting proxies, and questions before the meeting to enable all shareholders to participate.
During the meeting today, we will look back at 2023, which was another challenging year for many reasons. But I'm proud of how hard our team works at the brands to adapt to constant change and to support their local communities, and ensure that customers continue to have access to affordable, healthy products and services. As you are aware, the agenda contains several proposals to appoint and reappoint members of the supervisory board. We will cover the proposal to appoint Laura Miller and Robert Jan van de Kraats as new members of the supervisory board. The proposal to reappoint Bill McEwan, Helen Weir, and Frank van Zanten as members of the supervisory board. During this meeting, we will also say farewell to René Hooft Graafland, whose term of appointment on the supervisory board will end as the closing of this meeting.
Before we start with Agenda item 2. I would also like to say a few words about the order of today's meeting. We are in a meeting today with a large group of shareholders, and we appreciate that you're taking your time to join us in this shareholder meeting. We look forward to an open discussion with you, and you can expect from us that we engage in a meaningful and respectful discussion, and we ask you to do the same. Shareholders democracy is important, and we appreciate the dialogue and interaction with you, but kindly, I also ask you to respect, to maintain a respectful meeting order in which all shareholders get the opportunity to ask questions.
As a chair of this meeting, I'm responsible for maintaining that order, and if needed, I can take actions and, for instance, limit your speaking time and/or the number of questions, or eventually stop the discussion when needed. Registration details for this meeting are currently being processed. Once all information is available, the notary will make the announcement of how many shareholders are present or represented, the percentage of the issued capital that they represent, and how many votes can be cast. After these announcements, we will open the voting. We will now turn to the agenda of this meeting, which was published on our website on the 28th of February of this year. I would like to note that we have complied with all statutory requirements to hold this AGM.
First, Frans Muller will talk about the company's performance during 2023, followed by our CFO, Jolanda Poots-Bijl, who will present the 2023 financial results, the policy on additions to reserves and dividends, and the dividends proposal for 2023. Lastly, I will hand over to Eric van Leeuwen from KPMG for the audit presentation. After these presentations, we will cover your questions on Agenda item 2, being the questions from the participants here at Zaantheater, and the question post ahead of this meeting. Please note that questions will be bundled and answered together. With that, I think I will hand over to you, Frans. Please go ahead.
Thank you very much, Peter. [Non-English content] I hand it over to you, Peter.
Thank you, Frans. And with that, I suggest we hand straight over to Jolanda. Jolanda, please.
Thank you, Peter. Good afternoon, ladies and gentlemen, welcome! As you've just heard, our teams achieved a lot in 2023. We continued to deliver a high value customer proposition, reflecting the needs of our local communities. We advanced our own brand strategies and our online propositions and remained laser focused on our cost, finding pockets of money to invest in our customer, our digital roadmap, and our sustainability ambitions. As Frans also stated, 2023 wasn't an easy year. We live in volatile times, facing both geopolitical and climate challenges, and our customers are under pressure, also facing the consequences of high inflation. When I joined Ahold Delhaize, I was excited to be part of a business that directly connects with the challenges and opportunities of our society.
One of our most important goals is to deliver affordable and healthy food for everybody, every day, and in a sustainable manner. We are prepared to take a leading role in designing and delivering solutions for a more sustainable food retail system in the long term. Through resilience and hard work, this is brought to life day in and day out by our people, who form the culture, live our values, and make this company a great place to work. I would like to thank our over 400,000 associates. They really are the beating heart of our company, allowing us to consistently deliver on our promises. Getting into the details, as you can see on the screen, we met or exceeded our original 2023 financial commitments.
This was quite an effort, as sales growth was lower than last year and cost continued to increase at a higher pace. Sales grew by 1.9%, or 3.8% at constant exchange rates, to €89 billion. We continued to build scale in our online channels with net consumer online sales now at €12 billion. Comparable sales, which represent revenues from stores that have been open for at least a year, increased 4%. We firmly believe that local matters, the connection with our local communities, our market share strength, and operational excellence combined in an international portfolio are fundamental to our performance. With our 16 brands, we realized 96% of our sales from markets where we are the number one or the number two, and each week, we serve more than 63 million customers.
We do this in 7,700 stores and via more than 1,800 e-commerce pickup points. We have highly rated websites, mobile apps, and have 18 million monthly active users. They are the core of our omni-channel customer base. Omni-channel customers are connected, more loyal, and typically spend 1.5 times more on average. Moving on to our profitability, the group's underlying margin was 4.1%. As a result, underlying operating income was €3.6 billion, a decline of 1.2% at constant rates. Our diluted underlying earnings per share were €2.54, almost flat compared to 2022. To understand these high-level results in a bit more detail, let's look at the results by region. In the U.S., we again strengthened our position as the number one food retailer on the East Coast.
Net sales were up 1.8%. On a comparable basis, that's an increase of 2.3%, as we saw particularly strong performances at Food Lion and Hannaford. The reduction in emergency federal SNAP benefits, higher interest rates, and the resumption of student loan repayments had a material impact on our lower-income customers. Our underlying operating margin in the U.S. was 4.7%, in line with last year. Higher shrink levels and general inflation in our cost base was offset by the favorable impact of one-off items and a strong delivery from the team on the Save for Our Customers program. Turning to Europe, sales in 2023 grew 7.2%, or 6.5% on comparable basis. We successfully leveraged our leading position in own brands, resulting in market share gains in most of our markets.
The more than 7,000 price favorites that we offer in the region at entry price levels with discount competitors are a great example. Our CSE brands continue to benefit from the regional transformation program, in which we are aligning business models, centralizing our sourcing activities, harmonizing our own brand proposition, and optimizing other scale drivers. In general merchandise, our e-commerce brand, bol, continued to gain market share. Despite a challenging market backdrop, gross merchandise value was €5.8 billion, up 4.9%. Bol also delivered €151 million in underlying EBITDA due to strong cost discipline and tight control of growth investments, and positive benefits from its growing share of high value add services, such as advertising and logistics. Underlying operating margin in Europe was 3.3%, down 0.3 percentage points.
Negative impacts from costs associated with our future plan for Delhaize in Belgium, wage increases, and investments in our value proposition were partly offset by a decrease in the non-cash service charge for the Dutch employee pension plan. Next on screen, you can see our reported IFRS performance, which include items that are non-recurring by nature. In 2023, these items are mainly connected to strategic interventions that we've taken to improve our business for the long term. Examples are the future plan of Delhaize, the divestment of Fresh Direct, and the operating model harmonization in the CSE region, and, for example, the move to a more asset-light approach in online fulfillment in the U.S. Making these kinds of adjustments did require a significant amount of so-called non-recurring expenses. In 2023, this totaled €758 million.
The largest part, €416 million, is related to the Fresh Direct divestment, including impairments, losses on the sale and restructuring charges, and the remainder is related to other accelerated initiatives, as mentioned, and the impairment and restructuring charges for the future plan of Delhaize. As your CFO, I'm tasked with guiding the long-term value creation of our company. Next to the regular responsibilities, I focus on the following areas: First, driving operational efficiency and cost discipline. Second, embracing and driving transformational change, shaping our capital allocation agenda. Third, enabling our health and sustainability journey, ensuring we have what we need to make fact-based decisions and take the required actions. Last but not least, continuation of our track record of solid cash flow generation to ensure we generate sufficient fuel to reinvest in our company and to deliver predictable returns to our shareholders.
When we talk about our progress on operational efficiency and cost discipline, this is for a large extent realized via our Save for Our Customer program. Our teams delivered a new record high number of over €1.25 billion in cost savings in 2023. This is, I believe, part of our DNA. We already operate in this way for many years, and our track record is second to none, as you can see with the chart on the screen. Our success is about continuously looking for opportunities, whether through sourcing initiatives or through leveraging mechanization, technology, and AI, to make us simpler, faster, and better in our daily operations. Maintaining our stance and our cadence as a well-invested company is another essential part of our value creation model. In 2023, we invested €2.4 billion in our assets.
Food retail is a complex business. It's essential to maintain a modern store network and a reliable logistical chain. It is also about expanding and improving our online channel network, our online facilities, our data and digital capabilities, and our IT infrastructure in a sustainable way. Striking the right balance of investments in front-end customer and back-end operational infrastructure is critical, and even more important, as our omni-channel capabilities evolve to drive more seamless integration across the value chain. How we invest is a key enabler of our health and sustainability agenda, which you all know is really important to our company. I believe the finance function is a key enabler in achieving sustainability goals, which, like all good business decisions, should be done with the right rigor and in a fact-based way.
On that note, I would like to thank the members of Milieudefensie for the postcards I received last October. I'm grateful for people being passionate about this important topic, and I do believe that we have a shared vision. We want to make healthier and more sustainable choices to, together, create a better world. I also strongly believe that as one of the leading global food retailers, we have an important role to play. We want to lead the way into a more sustainable food system, support our customers and communities while maintaining solid financial standards. On that note, let me highlight the progress we made on our key sustainability KPIs in 2023. Our brands increased the percentage of own brand healthy food sales, reaching 54.8%. We reduced CO2 emissions in our own operations by 35% compared to our 2018 baseline.
Our total tons of food waste per food sales was 37% lower than our 2016 baseline, and we reduced the use of virgin own brand plastic packaging by 10% compared to 2021. I'm proud of these results and all the hard work of our teams. Every initiative counts. For example, thanks to our strong collaboration with local food banks, we directed 25% of unsold food towards feeding those in need. Our increased use of renewable energy has allowed us to lower our scope one and two emissions by 5 percentage points in 2023. Another area I'd like to highlight is the reduction of our absolute scope three greenhouse gas emissions. We saw a reduction in scope three compared to the prior reporting year. However, we are stable compared to our 2020 baseline year.
We also face challenges with some of our sustainability ambitions. We are, for example, unlikely to meet our 100% reusable, recyclable, and compostable plastic packaging ambition. Several plastic packaging types cannot be recycled yet. There's also a lack of recycling infrastructure at a more macro level, which is disappointing and reinforces the urgency for all business across the value chain to accelerate action. In our 2023 annual report, we updated our scope three targets in line with new SBTi guidelines. It requires collective action across the value chain to achieve this. Our local brands are actively engaging with our suppliers to work on specific decarbonization measures and to improve the data quality of their scope three emissions. Moving on to my last focus area, free cash flow.
Cash generation is critical for a healthy company, and we realized a strong free cash flow level of €2.4 billion. Within this number, inflows from the Belgian tax receivable of €370 million were partly offset by outflows of around €200 million from the operating cash flow effects of executing the Belgian Future Plan and the Accelerate initiatives. As we stated earlier in this presentation, we are a healthy company with a solid balance sheet and a great track record. Our free cash flow performance is an important driver to return value to our shareholders, while at the same time keeping our net debt position stable. And that is exactly what a lot of our shareholders value in us. Solid earnings per share and an attractive dividend yield, combined with a sustainable growth of dividend per share.
This year, we are proposing an increase of our dividend per share of 4.8% versus 2022 to €1.10. For 2024, although circumstances remain challenging with decelerating topline inflation and cost inflation still elevated, we expect to deliver constant performance year-on-year. Our group underlying margin is expected to be at least 4%. Our gross capital expenditure will be roughly in line with 2023 levels. Our free cash flow is expected to be around €2.3 billion and our earnings per share are expected to be around 2023 levels. Along the way, we do expect some different phasing of our performance throughout the quarters. Going forward, we remain dedicated. Dedicated to long term sustainable value creation, focusing on growth and allocating capital with discipline.
Building on our strong portfolio of brands and on our operational track record, investing in a better world for all our stakeholders. I thank you very much for your attention and I'd like to hand over to Peter.
Thank you, Jolanda. I would now like to ask Eric from KPMG to give his presentation. Eric, could you please approach the stage?
Good afternoon. [No n-English content] Back to you, Peter.
Thank you very much, Eric. On behalf of the Supervisory Board, I would like to briefly explain the Supervisory Board profile that has been shared with you as part of the meeting materials. The profile is reviewed by the Supervisory Board annually, and we've made some minor changes to align with the updated Dutch Corporate Governance Code that Frans also referred to in his speech. By doing so, we believe that the profile is representative and supporting the company's needs. Now that we are done with the explanation of the items under Agenda item 2, I would like to inform you that the voting will now be opened. As a reminder, voting for all Agenda items will remain open until the end of the meeting, and I will indicate when voting is about to close.
This allows you as shareholders the opportunity to vote on the Agenda item at your convenience. Before we proceed with the voting items on the agenda and open up the voting, I would like to ask the civil law notary, Martin van Olffen, from the law firm de Brauw Blackstone Westbroek, to make the necessary statements. Please go ahead.
Thank you, Peter. [No n-English content] Thanks, Peter. That's it.
Thank you very much, Martin. So the voting for all resolutions is now open and as mentioned, you can vote on all resolutions already from now. So as provided for in the convocation for today's meeting, shareholders have the following options to submit questions. For those here in person, there will be microphones available for you to ask questions. Finally, we offered shareholders the opportunity to submit questions ahead of the meeting to be answered during the meeting as well. When asking questions, please state your name clearly and formulate your questions as short and concise as possible. If you are proxy holders, please state your name of the shareholder you represent. There are mobile wireless microphones for asking questions. Please remain seated and raise your hand should you have any questions and please wait until the microphone is brought to you.
We kindly ask you not to grab or hold the microphone while asking your questions. Furthermore, I may invite certain shareholders who have raised questions before the meeting to ask their questions. As I said before, I kindly ask you to maintain a respectful meeting order for which all shareholders get the opportunity to ask their questions. I also ask you to keep your questions short, that you do not repeat questions that have already been raised and/or answered, and that you avoid lengthy statements so everyone gets the opportunity to ask their questions, and that they have the time and opportunity to do so. Finally, as I said before, to ensure that questions are answered efficiently, we will collect and combine the number of questions before we answer them.
With that, I would like to open up for questions to Agenda item 2, and if anyone has some questions, could you please raise your hands? Okay, we start down here to the right.
Hello, my name is Michiel van Esch. I work at Robec o, and today I also speak on behalf of MN, APG Asset Management, ABP, and bpfBOUW . Many thanks for the presentations, and congratulations on the annual report. On this Agenda item, I have four questions, one about capital allocation and portfolio management, one about Ahold's tax disclosures, and two about its sustainability ambitions. My first question is in relation to your portfolio composition. Ahold Delhaize had to dispose Fresh Direct, and in the annual report, this was marked as a difficult and unfortunate event. Could you share any lessons learned or reflections from the board in terms of portfolio allocation? At the same time, new additions are intended to be made to the Ahold Delhaize family, such as Profi.
Could you explain your considerations why you believe that these will be long, long-term successes in terms of value creation? My second question is on your tax report. We are happy to see that a tax report is being added to your annual report, and we appreciate the tax contribution breakdown by type and country. Often, these reports are offered with the purpose of providing stakeholders with a sense of how taxes are paid, aligned with economic added value. Disclosures, including FTEs, revenues, and margins, will help to make such an assessment. For example, Switzerland is listed as one of the countries where the group pays the highest amount of corporate taxes, although your company does not have many supermarkets there. Could you elaborate on the economic activities that you carry out in Switzerland and how they fit in your value chain?
My final questions are in relation to sustainability. As mentioned in your climate transition strategy, the majority of your company's emissions are in scope three. The levers you define to address these emissions are engaging suppliers and farmers, providing assortments with lower footprints, and encouraging customers to choose lower emission products. For all of these measures, you have a level of dependence on other stakeholders. What will your actions be if there is insufficient traction in terms of demand or supply from other stakeholders? How will you track progress on these three levers? And lastly, could you provide us with a timeline of when the company will disclose the results of the ongoing work on nature impacts and dependencies? Is the company planning to issue a TNFD report? Those are my questions under Agenda item 2.
I also have questions on the remuneration report and the nominations, but I guess we'll do those later.
We'll come back to them at a later stage, yeah.
Okay, thank you.
Okay, we'll continue to take in a few more questions before we answer, and I suggest we go to the gentleman up on the right-hand side there, and we move ourselves through the audience.
Good afternoon. My name is Keyner, if you want to. I speak on behalf of VEB. I've got one point, giving a good example, short questions. It's about your ambition. Your ambition not concerning anything concerning the environment or inclusion, really the old-fashioned ambition as far as financial results. I've got two topics, two elements to that. The first one is the development of free cash flow, and if you leave out all the special things in the last five or six years, your free cash flow has been around $2 billion. In the coming years, $2.3 billion is the forecast, is your target, but also in there, I think the two factories which are included, I think, with meat production and so on.
The first question would then be, what can you do to make sure that your organic growth is translated into a much faster growth of your free cash flow? First question. The second question is more fundamental. I'm not saying that Ahold is performing badly. You're not at all. You're performing consistently, reasonably well. But what can you learn from Walmart? If you look at Walmart, it's a giant, in the true sense, it's much, much bigger than Ahold in total. However, its valuation is much, even much bigger than it is bigger already as far as size is concerned. The financial markets are valuing Walmart much more highly than the financial markets are valuing Ahold, factor two at least higher.
What can we learn, what can you learn from Walmart and ensure, therefore, that long-term growth, as far as for shareholders is concerned, that the growth is getting an extra momentum? Those are my short questions. Thank you.
Thank you very much. We take one more question, and then we start answering. Okay, go ahead over here in the middle.
Hello, my name is Jasper Meeuwis from VBDO. I have three questions for you. Although Ahold Delhaize recognizes the impact of biodiversity loss and soil degradation on vital resources, neither biodiversity nor pollution have been identified as material topics. Will Ahold Delhaize provide a list of the topics, matters, or impacts that were considered and assessed for materiality in the next annual report? Question two, VBDO commends Ahold Delhaize for the living wage initiatives in which it partakes. However, both in the annual report and also in the human rights report, information and results on these initiatives are limited. Can VBDO expect Ahold Delhaize to include more information on its efforts to ensure a living wage in its supply chain in the next annual report?
Question three, Ahold Delhaize states that it frequently reviews its memberships of industry associations and chamber of commerce to align with its corporate values and business objectives. Is Ahold Delhaize willing to report on how it revises its memberships and the results of these revisions in the next annual report? Thank you so much.
Thank you very much. So I think we could get going and try to report back on them, and then we'll continue to circulate the microphone, but just hold on a second. So, Frans, I suppose we start with you, and the questions that came in from Robeco on capital allocation, Fresh Direct learnings, Profi, the tax reporting, and then we could head over to Jolanda, maybe for the activities in Switzerland, and so on. So please go ahead.
Yes, thank you very much, and I happily do so. Thank you very much for the questions. Those are indeed relevant and good questions also to discuss with ourselves. Fresh Direct. I don't repeat the question, but I just try to answer it. The shopping experience in the U.S. for customers changed quite dramatically, and I already mentioned in my speech that the business models where we embarked on three years ago or 10 years ago dramatically changed in the requirements customers have for same day, next day, pick from store, get delivered, and so on. Those changed more rapidly than we anticipated, as you can imagine, as we only bought Fresh Direct three years ago.
That was the reasoning why we looked at adjusting our business models to customer requirements. That's why we sold Fresh Direct, and that's why we closed those two next day e-commerce fulfillment centers in Jersey City and in Maryland. Another question is what have you learned from that? I think that is, of course, also a question we put to ourselves as well. I think we could say that where we have a strong view on the future being an omni-channel type of company, stores and e-commerce online combined under one brand roof, that that is for sure the way forward, and that pure play e-commerce business is more exposed to potential risks of business models. That's one thing.
And the second thing is that, yeah, if we would have known three years ago what would have happened now, then we would be better in a better spot. I think what we did, and that was a tough decision, and you have seen the numbers, is that let's say better cut that decision and take the loss and move on to business models which are more profitable and more beneficial to our customer base. That's why in the last years, we have roughly 2,000 stores on the East Coast in the U.S., and we have now 1,500 stores in the U.S. equipped for pick from store and pick up from store and also picking in store and pick up from store by customers.
Customers have a very high level of adoption, and more than 60% of our sales is coming from that mode. It was 10 years ago, completely the other way around when we were a quarter of the sales and where we 90% next day delivery. So business model changed dramatically. We use now the asset base of our company much better. I think this also will bring us earlier into profitability of our total e-commerce frame. So that is on one hand, the side effects. We work also with third-party providers like Instacart and DoorDash to see how we can still please customers with a delivery product and better profitability.
The mix in composition, what customers expect from us, the mix in homemade, self-made, and third party, the mix to sweat our assets in the stores is now in a better composition, and those are a couple of those learnings. Profi is a retailer in Romania, and we decided to embark on the Profi plans because we felt this is very complementary to our present successful Mega Image business in Romania. The nice thing about Profi is, apart from the fact that it creates us more scale, and we will be number two in the country there, and that is in line with our strategy, number one and two in all the markets where we operate. But it is also highly complementary for a type of business model Profi has, but also geographical presence.
Mega Image, you could say, is more in the larger cities in Romania, especially in Bucharest, with 35% market share, but Profi is more in the regions of Romania. Romania is an interesting country, and I don't know if you have been there, but it's an interesting country because it's a 20 million population. For us, in our European network, the largest population network country we have, and it's an interesting market for us because the market is growing GDP and also is growing also in the acceptance and adoption of our products. Profi will be good. It will be more than double our size in Romania, one and two complementary in geography. That's what the rationale of Profi is.
How this will play out, we don't know yet because we still have to wait the authorities to give their approvals, and we expect that in the Q3 or Q4 of this year. That's on Profi, Peter, then that's why we think it's an interesting market. Then we go to the climate transition strategy. The nature of Scope three means that it will always be a collaborative effort. As you might know, if you look at the total food supply chain, which is roughly 30% of the worldwide emissions, retail in our Scope one and two is only 5% of the total. So that means to attack Scope three emissions means by definition, collaboration.
Collaboration with transportation companies, with the larger food manufacturers, teaming up with other retailers, but also that is all upstream, but also downstream, talk to our consumers to make sure that what they buy, they also really eat, because food waste in your kitchen is also, in the end, affecting carbon emissions. So that is important to us, collaboration, we might talk a little bit more about this today. So it's also our key to make sure that we collaborate, therefore, with all our stakeholders, that we collaborate with everybody in that supply chain, including manufacturers, including farmers, including transportation companies.
I mentioned in my speech also how we try to foster that collaboration with the climate hub, so that we make our climate hub work at Albert Heijn available in total Europe, so that suppliers can also report to it, and that we also get a better insight. We have a plan and an expectation that 70% of our supplier footprint will be asked to commit to SBTi by 2025. SBTi, Science-Based Targets initiative. I guess we have a little bit more content on this later today. So all our suppliers will be asked to report on Scope 3 by 2025. We measure also, of course, the estimated greenhouse gas emissions of our own assortments.
All our food retail brands in Europe have committed to the baseline also on the current protein ratios. I mentioned the great example of Albert Heijn, which is now aiming at 60% of the proteins consumed coming from plant-based by 2030. So there's a few initiatives which we have in mind to work on that. Then TNFD, the reporting on nature. We developed in 2023 a plan for our nature approach, and to do so, we conducted a high-level impact and dependency assessment using the Encore natural capital model, and reviewed our current initiatives. In 2024, 2025, we will conduct a more detailed impact, dependency, and risk assessment, and identify value chains and regions for additional exploration on nature.
To review existing targets and consider the feasibility of setting new or additional nature targets, including and exploring the feasibility of SBTN, and I'm pretty sure that you know what that stands for. Implementation actions within our brands and adjust plans will be based on learnings and insight. Of course, this whole nature area and the biodiversity topic is something you have to grow into, learn, make it very visible, and also enjoy the front runners in our own company, because we have those. Initially, we aim to deliver increased reporting on nature through requirements of the CSRD as applicable, because they asked for that, and due to the significant overlap between the CSRD and the TNFD, we expect to address several components of TNFD in our reporting on nature.
You could argue that TNFD, TCFD, and CSRD are all, in the end, in a way, migrating, so they have one way of reporting. So very active on this, and also with Jolanda, as our CFO, super engaged. I'm quite hopeful that we made quite some good steps there.
Thank you. Jolanda?
The last question that you posed on tax. I'm happy that you appreciate the tax report that we've included in our annual report. Your question on the Swiss activities. Well, our Swiss activities are in line with the principles of the VNO Tax Governance Code, and they have genuine substance. We are... They are involved with our business activities on a day-to-day basis. Think of cash pooling, cash collection, liquidity, insurances, and financial risk management. And we have a full operational team in Switzerland, with highly skilled and experienced people, who are managing the risks and the treasury activities of the company as a whole.
Thank you, Jolanda. And then actions on ESG, Frans.
Thank you, Peter. The nature of Scope 3 means that it will always be a collaborative effort, and we talked about it before, and the key word for making big progress on Scope 3 for our company and for the industry is indeed collaboration. So of course, we would like to minimize the risk of insufficient actions, and I can give you a few examples. As I mentioned before, I mentioned the climate hubs, I mentioned that we talk to our suppliers, expect from them to be 70% covered by SBTi by 2025. All our suppliers will be asked to report on the Scope 1, 2, and 3 by 2025. And we measure, of course, all the greenhouse gases related to our own example. I mentioned the very good examples at Albert Heijn.
What I also can add to the comments is that you heard me talking about the Consumer Goods Forum. This is this association with all the big retailers and manufacturers. One of the targets we would like to have, we frame together is to be net zero as soon as we can. That means collaboration, that means with the PepsiCos and the Unilevers, and the Procter & Gambles, and the Nestles, and the other Greencore companies, and so on. Also, with a lot of smaller manufacturers, also with other retail companies in Europe and in the U.S., in Asia, and Latin America, and the smaller ones, that we have to come together to get ourselves on one standard and have a common definition and ambition.
I feel that in that Consumer Goods Forum, but also if we speak to other manufacturers and retailers, there's a high level of ambition and will to make that happen, because everybody sees that we have to do something firm on climate, as you are used to from Ahold Delhaize.
Thank you, Frans. The next question was from,
VBDO, huh?
VBDO, yeah.
Yep.
And it was related to living wage disclosure in the annual report.
As you know from our earlier conversations, Ahold Delhaize brands are engaged in multiple initiatives on living wage and living wage income in the supply chain. For example, in the banana supply chain, with Dutch and Belgium commitments to living wage in the banana sector, which is a concern and also at the same time, a point of attention for ourselves. But also, for example, in the cocoa supply chain, with the Dutch initiatives for sustainable cocoa, the Belgian Better Chocolate Initiative, and the collaboration with Tony's Open Chain for the Delicata brand. I hope you enjoyed the Delicata brand in our stores in Europe. It's a super chocolate and very sustainable.
In addition, progress towards living wage is covered not just by the Rainforest Alliance and Fair Trade, but also in the BSCI Code of Conduct, and by many of the other social standards and certifications that our brands implement in their supply chains. We are very much linked to this. We very much report on this, and we would like to make sure that our supply chains are, from a point of view of living wages and human rights, safe and solid. The human rights impact assessments conducted by Albert Heijn include an assessment of the living wage gap, and Ahold Delhaize is in the process of setting up at least two global human rights impact assessments this year, that will include also an assessment of the living wage gap, too.
Ahold Delhaize will report on progress in our next human rights report. You have seen that two years ago, the first one, where we were very transparent and very clear about the salient issues, but also the things where we are proud about. That is planned for later this year in 2024, the next version of our human rights report. We will integrate our reporting on human rights in the annual report, in line with the CSRD, where we're working very hard to make sure that we comply with those. We will take your recommendations to heart and strive to release more relevant information on the progress of the initiatives, and also where our brands are engaged in.
However, in the meanwhile, we invite you to also explore the progress reports already published by the Sustainable Trade Initiatives, Tony's Open Chain, and of course, the sustainability report of Albert Heijn, and the next one is coming up soon, I think even by next week. So I think good progress made, high on the attention list of our companies, because we would like to make sure that we have not only a safe and good living wage structure in our supply chain, but also proper human rights, because we would like to make sure that smallholder farmers and people working in the supply chain have a good life, and are also protected.
Thank you. And then there was a continued question regarding Walmart, and what learnings we can learn from them when it comes to valuation and shareholder value growth.
I can say a few things there. I think we have a respect for Walmart. It's a strong company. It's also in a very different size as we are at the same time. But I think they made good strides on a few elements where we think they have a strong proposition to customers. I think they stepped up quite their game in e-commerce. They have a strong private label, and they have foremost, also a lot of strength in their size. But having said that, if we see how we compete with Walmart at the moment, on the East Coast, on the U.S., you know that we're only on the East Coast.
We compete very well with them, and if it's in the Northeast or in the Southeast, in the Carolinas, we are very proud about our market share gains there. So it's always good to learn from competitors. It's always good to study what they are doing, and that's not only for Walmart, for many other competitors, and not only in the U.S., but also in Europe. And I think that is, for us important. Curiosity is important. Our people are visiting a lot of brands during a working week, just to check what's going on, if it's discount, if supermarkets, if hypermarkets, if it's clubs, club formats, and so also for Walmart. So, close to it, eager to learn from it, sometimes not completely comparable, and we compete well with them.
I think it's a strong company and with a strong valuation development.
Okay, Jolanda, next question was, let's see, regarding organic growth and free cash flow growth. Can you say a few words about that?
Yes, thank you for the question. Our free cash flow delivery is strong, as we already discussed, and this depends highly on sales growth, on which we work on a daily basis. Our margin delivery, highly related to our cost saving programs and other initiatives, and working capital developments, and last but not least, investments that we make. As you mentioned, our free cash flow was impacted by several one-offs, like Delhaize, Fresh Direct, et cetera, but still our cash generation remains strong. This allowed us to also invest around $2.5 billion in capital expenditures, and we continue to do so to fuel that growth again. An important element in that list is also working capital, because we have seen that after COVID normalized trading reduced our working capital position.
We hope to improve that over time again. And that Peter was a short answer.
Okay, and I think there was another question regarding materiality. Is that for you, Frans or Jolanda?
I love to take it, but I also happily share this with my colleague. Go ahead.
Yeah, we are in the process of conducting the so-called double materiality assessment in preparation for CSRD, and this process will be used to identify the material topics for the 2024 reporting period. It's an extensive process in line with best practices and guidance from external frameworks, including inputs and insights from a wide range of internal and external stakeholders. This will help us to ensure that we adequately capture the impacts we have on various environmental, social and governance topics and the impact those topics have on our business. As this process is ongoing, we cannot yet provide information about the outcome of that process or what kind of thresholds we will use. But the outcomes will of course be included in the annual report of 2024, following the disclosure requirements of the CSRD. Thank you.
Shall I pick up the lobby question, Peter?
Yeah, why not? Very good. Very good. You're quick today, Frans.
Maybe in a self-initiative, but just try it. The lobby. I think it's an important question, because we would like to be very transparent about this. We continually review our memberships with trade associations to make sure that our corporate values and business objectives are aligned on the issues which are most important to us and to our customers therefore. In the event when consensus could not be reached or we clearly disagree with the positioning of one of our industry associations, we share that with the association and reserve our right to position as an individual company or as a part of a group of like-minded companies or organizations. We are well represented.
We are well staffed on public affairs in all the markets where we are. We are members of trade associations and that's exactly the behaviors we have dealt with, and you can see also the behavior reported in our annual report. All the reports are in compliance with applicable legislation. This speaks for itself, but just to make sure that we also, of course, are working according to the law.
Okay, thank you. We continue to take in a few more questions. I see your hand raised over there. We will work ourselves up, so don't worry, we'll get to everyone. Please go ahead.
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Okay, shall we move over a little bit to the left hand side or the right hand side from your side and I see a lady with arm up. Can someone reach out to her with a microphone? Here it comes. Please go ahead.
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Thank you! We move on with more questions. I saw a hand up here. The gentleman with the tie. Could you please raise your question?
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Thank you very much! Let's see. Are we good to go, Frans?
We take another question.
We take one more question, then let's see. We have one down from the lady here in a beige jacket.
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Thank you so much! I do notice that it's starting to become a little bit lengthy statement, so going forward, could I please ask you to avoid that? So Frans, there was a question coming in from a long standing visitor to our AGM about our climate goals and the reduction targets. What do I have to say about that?
Yep. Thank you, Peter. I try to combine the first and the third speaker talking about the questions. I think we can group them a little bit. Wouter, I think you should say a few things about Lidl and all the comparable shopping experience with Albert Heijn for Mister Freek, because that was a little bit irritating. Let's go to the questions, answers on the question. As all the less, we are very focused to deliver a climate plan in line with the 1.5 degrees, in line with the Paris Agreement, and this also checked and validated by the worldwide standard on this, and that is for us, the Science Based Targets Initiative, SBTi. That's what we talked also in the last meeting as well.
For those of you who are not aware of SBTi, SBTi is a collaboration with CDP, which is the center for a lot of companies to deliver their data to the United Nations Global Compact, the World Resources Institute, WRI, and the Worldwide Fund for Nature, WWF, the World Wide Fund, and you know those instances. The Carbon Disclosure Project, CDP, is an international nonprofit organization with a very strong worldwide spread, and WRI is an institute with international and non-governmental strength and research, so a very respected institute for us, SBTi. We declared last in the last annual report, not this one, but the one before, that we would work on our scope one and two emissions.
Those are the emissions which are in our own control, in our own operations, and we would reduce them by 50% in 2030, and net zero in 2040. The good news is, Jolanda already mentioned that, on scope one and two, we already reduced that with 35% this year. That is based on the 2018 baseline. We are well on track to reach our targets in 2030, talking about scope one and two. On scope three, we declared earlier already, the 37%, 2030 reduction target and net zero by 2050. Those are compared to the industry where we operate, within scope three in a total supply chain, where collaboration is super important.
Those are very ambitious targets, also, if we compare that to our own sector and our competitors. We might come later a little bit back to the more technical part, if you would like to do so, but those are the commitments we have. We are super serious in our company to reach scope one, two, and three, and that's also in our annual report. We are a listed company. We're a stock-listed company, extremely transparent on that element as well. We are committed, we have the ambition. All our teams in our network work on that. So we need to close that statement.
I think on climate, we have the same concerns, we share the same objectives, and we work very hard every day to reduce those emissions in our own operations, but also in the scope three, in the total supply chain, that is upstream, what I mentioned before, producers, transportation companies, farming communities, but also downstream with our customers to see how we can reduce that. I'm happy to discuss a little bit more here, because I think the dialogue on this topic is super important to bring us together and to fight together to reduce those emissions.
Good. Any comment on the mentioned number on climate damage, or did you have anything to say about that?
We operate with SBTi, and those are the numbers we work with. That's what I just said to Peter, dus . That is our general measure, how we look at the situation, and we do not recognize the numbers just mentioned here. We work on our own targets with our... SBTi has a thousand companies connected or members of SBTi, so it's, I think, a very serious type of institution, and that is for the moment, our reference, and we work on that. Also we'll see, and we might hear later, that SBTi, that research is also developing, and they also get new insights.
We are in a constant dialogue with SBTi, that we're also in line with new insights, talking about climate, because we are committed to the 1.5 degrees Paris Agreement.
Okay, let's see. I see you have a follow-up question. We'll come back to you in a second, so hold on. In the meanwhile, we had a question from Mick, Mr. Freek. Did I get that right?
Yeah.
About the Naarden store, and you also mentioned a few words about improving communication, and so on, which-
Yeah, maybe Wouter the Naarden store-
Yeah
Is high on your list, so maybe say a few things about it.
Yeah, that is good. And thank you for the question, and also maybe what about self-scan and service? I think we look at how we try to run our business in a good way, and then we always look at our portfolio and the portfolio of stores. That's why we are so happy with the acquisition of Profi, because there are mainly stores in the rural areas where we, let's say, are not yet. We look at each brand, each time at our portfolio. We have a fantastic, beautiful store on the Amersfoortseweg, which is four minutes by bike and 10 minutes by walk, and we had to make the decision to close the Naarden store, because we saw that a lot of customers, let's say, were moving to our other large store.
We also arranged a shuttle bus to at least be able to help the people in Naarden Vesting, and we also increased our online service, so... Look, we of course make these decisions constantly. We always look at our store portfolio, and that is also the case in Naarden. I think another topic, and there was a lot about it in the newspaper recently, is self-scan. We started with that, I think, 10, 12 years ago, mainly in our to-go stores with high pressure. We saw that customers reacted very positively to that. What you also saw, actually, during COVID, that there are still, [No n-English content]
Thank you! There were a few other proposals from Mr. Freek. We thank you for that. We take them on board and let's see how we can continue the dialogue. There was a follow-up question from the lady on the left and then I suggest we move on to Agenda item 3.
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Thank you, please go ahead, Frans.
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Okay, I suggest we move on to the front left side then. Please go ahead.
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Okay, let's take two more questions and then we move on to the remuneration report. We start with the gentleman up on the right hand side with the hand up. Yes.
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Thank you very much, Frans. Should we go back to the first question from the right hand side and then we continue with Mrs. Van Gennip. Sorry for my Dutch pronunciation, questions and suggestions.
Thank you, Peter, and thank you very much for your question. I think you're right that we as a company have a corporate plan for all our stores, whether they are in the Czech Republic or if they are in the Netherlands or with Food Lion or Hannaford or the GIANT company. It's a company structure, it's a company philosophy, it's a company strategy, and sustainability in all these various dimensions is built into our strategy of the total company. If you see the annual report, it's even much longer than last year because we would like to be more transparent. There's legislation which asks us to be more transparent, and that's also what Jolanda already mentioned on CSRD requirements, etc.
We think that as a good company, we would like to be measured, we would like to be transparent, but also we would like to have very clear targets on things like plastics, on things like food waste, on human rights, but also on the climate elements, sir, you addressed. So I repeat partly myself when I say that when I shared with you what our targets are, we are having ambitious targets. Targets which are, for us, in all the work we do, extra investments in our stores, extra investments in the relationship with our suppliers, upstream and downstream, to make sure that we together are able to make our scope one, two, and three targets in line with Paris, in line with the 1.5 degrees.
And that's how we would like to get measured, and I hope that I can report back to you, the sooner the better, that we indeed have validated targets coming out from SBTi. But that's also up to them based on the questions. There's a little bit a written delay at SBTi because there are many companies who would like to get validated and certified, which is a very good thing to have. So there is more traction coming in to the climate ambitions of a lot of companies, and not only the scope one and two, and the scope three. Just one thing on collaboration. For manufacturers of food up in the supply chain, their scope one and two is our scope three. So to work more with them and have the dialogue is so important.
It's also, for us, very, very important to have the dialogue with you as a shareholder, but also with you as fighting for the climate spirit. And Winnie, just one thing there from my side, if I remember well, we invited also Milieudefensie twice to have a dialogue and to have a discussion, I think in last December and the last in February. We invited you to say, "Okay, let's compare notes, and let's talk about this." But so far, that invitation has not been accepted. I think it's a pity because it's about dialogue, it's about together, it's about working on those kind of solutions.
Talking about Mevrouw van Gennip , yes, I think what you raise is this is a joint effort here, because we can do a lot as a retailer, but in the end, it only is going to work when we get all our consumers with us and all our customers with us, partly to change behaviors. Our job is made to make sure that we change our behaviors on private label, on the CO2 footprints, on the CO2 from our stores, on the healthier products we have. We're not only talking about climate here, we're also talking about obesity, diabetes, food waste, plastics, and all these kind of other things you see in our annual report. That is the beauty of our business.
That's the beauty of being close to communities, close to 63 million customers a week. That is the pride and the purpose we have to do the best possible job, that communities get healthier, that people are having access to affordable food, healthy food, and sustainably produced food. That is what we work in every day. And the second thing, what we work for, is to get that total food supply chain, where we only have a small part of the total emissions, that we get that also more sustainable, and not only for carbon, also for human rights, also for labor, also for other things we talked about before.
That is what's making us proud, partly, Mevrouw van Gennip , but at the same time, we know that we have a long way to go, and that there are a lot of things to do, and that when we look around us, not all the conditions in the world are helping us there to do the right thing. This is a little bit, a few things from my side. When I say this, then you can count on this, this is on behalf of the total leadership of our company. We talk about these kind of things with the top 300 leaders in our company to make sure that we are going in the same direction.
If it's for a Czech store, if it's for a Dutch store, a U.S. store, a Romanian store, we have the same targets because we also know that human rights, plastic, CO2, doesn't recognize borders. That is an international approach for us. So this is from my side. Did I miss something, Wouter, on Dutch market?
I will come back to you in a second. If you just hold on a second, Winnie, we'll come back to you.
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Winnie, a final reflection from your side or final question, and then I'm going to take one question here in the center, and then we need to move on. We have six more agenda points to cover today, and as indicated by Frans, there are plenty of opportunities for dialogue also outside this meeting, which might even be more suitable for this question than here and today.
I wanted to reflect just right back to that. We have indeed been invited on a talk by you guys. We invited you back last month to go on a talk with us publicly so that everyone, journalists, us, your shareholders, could know what we were talking about, and yet you did not accept that. So telling us, everyone, that we have not accepted your talk was a bit of a stretch. Thank you very much. We would like to see you back at our office.
A bit of a stretch, but purely fact-based, the invitations which were not accepted. But let's continue. We accept these kind of dialogue offers anyhow, because we think it's about collaboration, we think it's about together. We think that we have more in common, Winnie, than a lot of people in the room here might think. We all try to make sure that we fight that climate issue, and we are in that anyhow, together.
Okay, a question down here, a follow-up question as well.
In Dutch, is that good?
Yeah.
Follow-up question about materiality. I understand that you are still investigating which topics will be material and which will not, and that you only have to report in 2024. But our question was specifically whether you also want to report on the topics that just do not meet the threshold, and why they do not meet the threshold. In this way, there is more openness about all matters. And then I also wondered about lobbying, whether you can also be more clear about the choices you have made in your report. We have, for example, a framework from another company that is very good for this, and we can also provide that if necessary.
I will answer the first part of your question in Dutch. In our assessment, we look at all topics, including the sub-subtopics. What we report is CSRD compliant, and that focuses on the material topics. So we follow the CSRD guidelines, but we use the sub-subtopics to arrive at that materiality. And also the hurdle rates, yes, the outcomes of that study we will include in the annual report of 2024.
As for lobbying, we are transparent about that, and we follow the legislation. But if there are good ideas on how we can do it even better, then I would like to recommend myself for those suggestions.
Okay, thank you. I see that there is obviously more interest in continuing this conversation, but again, we have six more agenda points. I think we've spent significant time on the agenda, so I suggest we move on to the remuneration report and item three on the agenda. So Agenda item 3 pertains to remuneration report, for which there is an advisory vote requested. If the votes cast advise positively on this item, we thank you very much for your support. If the votes cast advise negatively, we will also take this negative advice seriously. With that, I would like to invite my colleague, Pauline van der Meer Mohr, who is the Chair of the Remuneration Committee, to present our remuneration report. Please, Pauline.
Thank you, Peter, and good afternoon, everyone. I will keep my comments succinct and concise, also in view of the time. A great pleasure to speak to you today as the chair of the committee, and as you know, the role of our committee is to ensure that the company has appropriate reward policy for all of our executives. Throughout the year, the Remuneration Committee continuously monitored internal and external developments, and through a careful and rigorous process, we strive to make prudent decisions that took into account the turbulent market and social conditions, as both Peter and Frans have already expressed. Since our remuneration report already provides extensive context for the remuneration decisions for the Management Board in 2023, rather than repeating our report here, I would like to focus on four key topics today.
They are, first of all, the increases of individual base salaries in 2023. Secondly, the outcome and ex-post disclosure of the 2023 incentive awards. Thirdly, the pay ratios, and fourthly, the performance conditions for this year, 2024. So first, our commentary on the increases of the individual base salaries. The Remuneration Committee obviously recognizes the sensitivity of executive pay in society at large. We believe that adjusting compensation from time to time is necessary for the company to remain attractive for top executives, and we therefore always consider internal and external compensation developments. We also look at individual and company performance, and we look at the remuneration of similar positions as companies in our labor market peer group before we recommend salary adjustments for members of the Management Board.
After careful review, the individual base salary for Frans Muller was increased by 5%, and that of Wouter Kolk by 3% in January 2023. We believe all these increases were reasonable within the company's remuneration philosophy and projections at that time for market cost of living adjustments in our major markets. Secondly, our determinations with respect to the 2023 incentives. The supervisory board considers the performance targets for 2023 to have been robust, with clear, specific, and auditable metrics. For the second year in a row, we have provided clear ex post disclosure of all targets, performance intervals, and actual results for full year 2023, short term and long term incentive plans in our 2023 remuneration report.
I am proud to see our continuous improvements on long-term sustainable value creation, which is also reflected in a 25% non-financial of our total incentive targets. We are very pleased and thankful for the efforts and results of Frans and his team. Thirdly, on pay ratios. Our pay ratio disclosure illustrates the ratio between the total remuneration of the individual members of the Management Board and the average remuneration of all associates across the group. Since a large part of the remuneration on the Management Board is linked to business performance in the form of variable pay, this ratio is to a large extent influenced by the overall business performance of our company.
As the slide illustrates, the pay ratios in 2023 were lower than in 2022, for a large portion, due to an increase in the average FTE remuneration. Finally, a few words on the performance conditions for 2024. This year, we will continue to review our remuneration strategy for the future against rapidly changing societal expectations and market conditions, as well as continue to strengthen our focus on long term sustainable value creation. This concludes my explanatory remarks, and I hand back to Peter with thanks for your continued interest and support for Ahold Delhaize.
I have to turn the microphone on as well. So thank you, Pauline. With that, we will now cover questions on the remuneration report, and I ask you to ask your question in the manner that I explained to you earlier. Please state your name before asking a question, and I repeat, do not make lengthy statements nor repeat questions already asked and or answered. We start down here on the right-hand side.
Thank you. My name is Michiel van Esch , and I still speak on the before mentioned organizations. Looking at the annual bonus for the last few years, since 2020, we've observed near or at maximum bonus payouts for the management board. This year, that also was the case as all KPIs were met, either at target performance or higher, which led to a 95% award of maximum opportunity, even though the company had a challenging year in terms of annual results. May I ask the Chair of the Remuneration Committee to reflect on the target setting process and whether KPIs were considered sufficiently stretching?
For example, we see that the sales growth performance targets in the past few years were significantly surpassed and that decreases in sales, sales growth also still would have resulted in payouts, as the performance threshold levels for this metric are set at- 2.2%.
Thank you. We take a few more questions related to the remuneration report. Let's see, where do we go? We can go... Let's go a little bit further up on the right-hand side, the lady in white.
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First of all, I will say apologies if I don't see you properly. You are a bit far away and it's a bit dark. We have many people in the room, so if I didn't get it right, my apologies. I didn't hear that, but anyhow, thank you so much! Shall we start with the first question, Pauline, which was about the key KPIs and target setting process. Do you have any comments to that?
Thank you very much for that question. The question is were the challenges, were the target sets challenging enough, considering that we have year after year, we have high payout ratios. Of course, this is a question that we ask ourselves every year, and we take that question very seriously and it is what we are supposed to be doing. We obviously consider the performance targets to have been very robust with clear, specific and auditable metrics. I think that's important to emphasize that these metrics are auditable and have been audited as well. The purpose, of course, of the supervisory board is to set targets which are aimed at long term and sustainable business performance.
At the beginning of the year, with the knowledge that we have, with the plans that we have, the business plans that we have, we look to set those targets and at the end of the year, if management has achieved those targets, we are actually delighted to pay for performance. Over the course of the past years, the company showed a really solid business performance, notwithstanding some very challenging business circumstances, as has been described already by Frans and others. Under those circumstances, I think management has done a superb job and we are very happy to see that all targets have been achieved. The answer is yes, we believe that the targets have been challenging enough.
Okay, Frans, anything else from you on the second question that came up about the employee bonuses in the stores?
Yeah, we already talked about it before, also in our annual reports, that we would like to be an employer of choice and that we also recognize by our markets to be that. But maybe Wouter, you say a few things how we look at remuneration in Holland and in Belgium in the various instances and how we try to make sure that we retain and that we can hire talent.
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Thank you! Sometimes Dutch, my Dutch is a bit limited, Frans, but to me we thank you for your proposals and from to the best of my knowledge, we have already answered that question. So we move on if there are any other questions from the audience.
On remuneration.
On remuneration, and again, no lengthy statement. We're getting late now, so then I will need to start cutting you off, which is not what I would like to do. So any other remuneration questions? Yeah, we go here to the right hand side.
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Thank you so much! We will then now continue with Agenda item 4: the proposal to discharge the members of the Management Board and the Supervisory Board in office in 2023 from all liability in relation to the exercise of their duties over the financial year 2022-2023. I would like to give you the opportunity to ask questions in regard to this Agenda item. Are there any questions related to Agenda item 4? Front gentleman, gentleman in front here. We go to the gentleman in the front.
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Okay, I move on to the next Agenda item: the composition of the Supervisory Board. So I cannot see are there any hands up? Yeah, okay, the person standing up, please, could you have the microphone? Keep your questions short, and no lengthy statement, please.
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Sorry, could I just ask you to repeat your name, lady mister?
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Sorry, I need you to come to the question, please.
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This is not the moment to make a lengthy statement, you know.
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Please, please come to the question, or we have to move on to the next one.
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Okay, thank you for your question.
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Thank you for your question. Thank you.
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Thank you. We have already answered that question, so with-
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We will move on to Agenda item 5.
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In this Agenda item, we propose the reappointment of three supervisory board members and to appoint two new supervisory board members.
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For the background on these proposals, I would like to refer you to the agenda and to the explanatory note of this meeting.
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Part of the Agenda item is to propose the reappointment of Bill McEwan as member of the Supervisory Board for a term starting immediately after the present AGM and ending at the end of the AGM to be held in 2026. The Supervisory Board recommends reappointing Bill McEwan for a term of two years in view of his extensive executive experience in North America, in retail, and his valuable contribution as Vice Chair of the Supervisory Board in order to ensure continuity within the Supervisory Board. Bill, you are present here today. Could I please ask you to stand up and identify yourself? Thank you for that.
In addition to Bill, we would also propose to reappoint Helen Weir as a member of the Supervisory Board for a term starting immediately after the present AGM and ending at the end of the AGM to be held in 2028. The Supervisory Board recommends reappointing Helen Weir for a term of four years, given her valued contributions during her term and in view of her extensive retail and FMCG experience, as well as her financial expertise, which she has obtained during a 25-year career in various financial roles. Helen, you're with me on the stage. Could you please raise your hand to identify yourself? Thank you.
Furthermore, we would also like to propose the reappointment of Frank van Zanten as a member of the Supervisory Board for a term starting immediately after the present AGM and ending at the end of the AGM to be held in 2028. The Supervisory Board recommends to reappointing Frank van Zanten for a term of four years in light of his service provided to Ahold Delhaize in the previous couple of years. Frank is a seasoned executive with extensive international experience and expertise from a highly complex multiproduct distribution business. Did I get that right, Frans? Frank. Frank, you're also present here today. Could I please ask you to stand up and identify yourself? Thank you.
In addition to the two proposed reappointments, we would also like to propose Robert Jan van de Kraats and Laura Miller as new members of the Supervisory Board for a term starting immediately after the present AGM and ending at the end of the AGM to be held in 2028. The Supervisory Board recommends appointing Robert Jan van de Kraats for a term of four years as a new member of the Supervisory Board, given his extensive executive experience in international and financial management questions. Robert-Jan, you are present here today, being a new proposal to the supervisory board. Could you please stand up and introduce yourself briefly? We have a microphone for Robert-Jan, please.
Yes. Thank you, Peter. Well, my name is Robert-Jan van de Kraats. I'm a Dutch national. I'm a customer of Albert Heijn, and I have long-term experience as an executive board member in various sectors, and also 20 years as a non-executive director, including retail business. I'm very much looking forward to join the board of Royal Ahold Delhaize. Thank you.
Thank you, Robert-Jan. We move on to the next new appointment, and that refers to Laura Miller. The Supervisory Board recommends to appoint Laura Miller for a term of four years as a new member of the supervisory board, bringing the benefit of her considerable experience in both legacy technology transformation in digital innovation gained in banking, hotel, and retail sectors in the United States. We believe that this experience will be very valuable to the supervisory board to oversee the Ahold Delhaize technology and digital strategy and the delivery to its roadmap. Laura, you're also present here today. May I ask you to please stand up, and also you to briefly introduce yourself?
Thank you. I'm Laura Miller from the U.S., and I have been a lifetime customer of Giant Food, one of the Ahold brands, and very proud and honored to be considered for this role. I've been in technology my entire career and have spanned it in many different industries, most recently in retail, and one of the largest retailers in the United States, and would be honored to be able to take my technology background and my retail experience to help our SB board. So thank you.
Thank you, Laura. I would now like to give you the opportunity to ask questions regarding the composition of the supervisory board. Before I open up the floor for questions, I would like to remind you that voting is open during the meeting, and all results will be displayed at the end of the meeting when the voting is closed. If you have any questions relating to the composition of the supervisory board and the appointments or reappointments, please raise your hand, and a member of our team will support you. We start down here on the right-hand side again.
My name is Michiel van Esch , still speaking on the aforementioned organizations. I have one question about the succession planning process and the search. Last year, Mr. McEwan was reappointed to the board for one year to allow more time to find a successor. And we note that this year he is being renominated for two years. Understanding and recognizing the experience and skills that he brings to the board, but could you, given this context, explain the process leading up to that decision?
Thank you. Any other questions related to the appointments or reappointments and the composition of the supervisory board? Let me see. We have the lady... Oh, sorry, the person-
Lady in green there.
The, please go ahead. You will get the microphone in a second. Sorry. I repeat again, no lengthy statement, short and precise questions, please.
Yes. Thank you. I will keep it very short. My name is Florence, [ No n-English content]
Sorry, I didn't hear your question. Can you please repeat the question?
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Okay. I'm giving you a few more seconds, and then we take the microphone to the next one.
Exactly what I need.
Okay.
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Okay, I do not hear any questions.
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Sorry. Sorry, I don't hear any questions.
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Sorry, I think we can move on to the next question. We don't hear any new questions. Sorry about that. Okay, any other questions, or can we move on to Agenda item 6?
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Mr. Frike, please go ahead. Can we get the microphone to Mr. Frike? Sorry, you don't have the word. Sit down, please. Mr. Frike, please.
Good. Mr. Frike, please go ahead. [ No n-English content]
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Sorry, can I please ask you to come to the question again? Please.
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Thank you very much. Helen, would you like to elaborate a little bit on the question from the gentleman from Robeco, please?
Yes, of course. Thank you very much. I think firstly to say we do consider it very important to have someone on the supervisory board with extensive grocery retail experience, and in particular, U.S. experience is valued because of the significance of our operations in the U.S. We have conducted quite an extensive search to find a successor to Bill. We have approached more than 20 people in the U.S. who potentially could be considered for the role. You will appreciate that it's quite difficult because there could be a conflict issue with people who've got the right kind of experience, they could be working for a competitor. So that limits the pool.
Peter and I have met with probably around 10 potential candidates, but we didn't consider any of them to have quite the qualities that we felt we were looking for, which is good operational experience, but also good strategic and vision experience that you need at the supervisory board level. We are continuing with the search and we are optimistic that we will find someone, but that's the first piece. That's why you haven't found someone to replace Bill. We also then considered the, in deciding whether or not to propose Bill for a further extension, the contribution that he continues to make to the supervisory board, which is very significant as Deputy Chair, in particular, the support he gives to Peter, but also his insight from his experience in grocery retail.
That's why we are coming to you with the proposal for an extension.
Good. Thank you very much, Helen. And I can only add that Bill McEwan is a super supervisory board member, just like everybody else on the board. Otherwise, they would not be here.
And a good vice chairman.
A good Vice Chairman, I would say, yeah, a very important sparring partner to myself, and really appreciative that he would be able to be available for reappointment. As for the question to Robert Jan, and if he can help develop the company and its communication with shareholders, I'll answer that on his behalf. He's still not elected, so please accept that. I think we chose Robert Jan because we believe he's a fantastic colleague that will join the board and eventually, if elected, replace René Hooft Graafland. I'm sure that based on the interviews we've had with him, that he will be able to contribute in many areas, also beyond the areas within finance, which is his main subject.
Whether that will be enough, I think we will have to come back to at the next AGM, but at least that's my statement. Any other questions related to the appointments or reappointments? No. Okay, then we continue with Agenda item 6, the proposal to reappoint KPMG Accountants as our external auditors for 2025 - for our external auditors for the financial year 2025. Are there no more questions?
Questions, I'll open up for questions regarding the reappointments of the auditors. And if there is one more final question related to it, and it's not a lengthy statement, which we have unfortunately seen a number of times.
Okay, please, then you can have the question regarding the reappointment.
Can we bring the mic here? Please, on the subject of the agenda, as our chairman just mentioned.
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Thank you for the joy you have in our brands, and I please ask you to come to the question or I have to move on to the next agenda point.
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Okay, thank you so much. Thank you! We move on to questions related. We go on to Agenda item.
May I have a mic, please?
Okay, please, you can have the mic. And again, no lengthy statements. Come with the question directly or we have to move on. I will not accept that you disrupt the order of this meeting.
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Power to the people. Power to the people. Because the people got the power. Because the people got the power. Tell me, can you hear it? Tell me, can you hear it?
Okay, we move on to the Agenda item 7 and... Oh sorry, sorry! Is there one more question on Agenda item 6? Please go ahead.
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Eric, please, I think the auditor is perfectly suited to reply to that question. Please, Eric.
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Eric, you need to put on the microphone.
Oh.
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Ik heb mangel maar in een vak.
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Okay.
Okay, thank you! I suggest we move on then to Agenda item 7. It's been a long day in here, but we appreciate the interaction. Before I give you the opportunity to ask questions on Agenda item 7, I would kindly like to remind you that voting is still possible and voting will close at the end of this Agenda item. I will now give you the opportunity to ask questions on the cancellation, issuance and acquisitions of shares. Sorry about that. Any questions to that? No, no. Sorry. Can we get the microphone over here, please?
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Okay, yes, one more question on the Agenda item 7. Can we have the microphone over here on the left hand side?
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Yes, there we could take any other questions. But if you don't mind, I suggest we follow the agenda and we could do that under Agenda item 8 closing, where we will ask for any final questions. Also non-related to Agenda item 7. So that opportunity will come. If that's okay, we pause your question for the moment. Okay, very good. Then I say thank you for your questions. This is the last chance for you to vote and voting will close momentarily. Okay, ladies and gentlemen, I have music in my own head. So someone decided to play songs for me. All right, so ladies and gentlemen, voting is now closed. We ask for a brief moment of your patience while we process the votes before we go through the voting results.
But maybe before that, if we could just see if there is a final round of questions which appear to have fallen out of the script. So please can we move on to person here in the gray on the left hand side?
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Thank you very much. Well, I think we have to come back to the arrangement for next year. But you know, it's not so easy always to host these big meetings. I think today we were close to 200 people in the audience, but it's certainly something that we will take into consideration when we arrange for next year's meeting. I appreciate the positive feedback on the little kit that you will receive once you walk out. So we move on to look at the... We have one more question. Can we wait? We have two more questions. Okay, so we pull back the voting result.
First I would have said okay, you can also proceed to the voting results. [ No n-English content]
Okay, and a final question and then we move on to the voting results. Oh, Spain also sorry. Two more questions. Okay.
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[No n-English content] I think we had first miss Van Geniste, if I get it right, and then mister Spanjer.
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Thank you so much. Thank you so much. I can only agree. We need to do more together in a friendly way. So we will continue to try those efforts to get us together on more occasions. Mr. Spanjer.
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All right, thank you so much. I suggest we are now moving on to go through the voting results. We have been busy for three and a half hours. So we start with Agenda item 2.4. The Agenda item 2.4, the adoption of the 2023 financial statement, which where we have a 99.94% approval rate. So I can conclude that the proposal has been adopted. And then we have 99.9% of the votes were cast in favor of Agenda item 2.5, the proposal to determine the dividend over the financial year 2023. So I conclude that also that proposal has been approved. And 93.96% of the votes on Agenda item 3, the remuneration report, has been cast in favor.
Even if this is an advisory vote, we are very happy for the positive advice that we have gotten. On Agenda item 4.1, 98.28% of the votes were cast in favor of Agenda item 4.1, the discharge of the liabilities of the members of the Management Board. So I can conclude that that proposal has also been endorsed. 97.96% of the votes were cast in favor of Agenda item 4.2, the discharge of the liabilities of the members of the Supervisory Board. So I conclude that that proposal has been endorsed as well. 97.23% of the votes were cast in favor of Agenda item 5.1, the proposal to reappoint Bill McEwan as a member of the Supervisory Board.
I conclude that proposal has been adopted. Congratulations, Bill, very well-deserved. Then we have Agenda item 5.2, where we have 97.23% of the votes were cast in favor of Agenda item 5.2, the proposal to reappoint Helen Weir as a member of the supervisory board. I conclude that proposal has been adopted. Congratulations, Helen. Then, 97.9% of the votes for Agenda item 5.3 were cast in favor, the proposal to reappoint Frank van Zanten as the member of the supervisory board. I conclude that the proposal has been adopted as well. Congratulations to you, Frank.
And then we have 99.83%, which is probably as high as you can get, Robert Jan, of the votes on Agenda item 5.4, the proposal to appoint Robert Jan van de Kraats as a new member of the supervisory board. So I conclude that that proposal has been adopted. And Robert Jan, congratulations. Warm welcome to the supervisory board. And then 86.83%, it's a bit of flipping between screens here to get it together. Sorry about that. 86.83% of the votes were cast in favor of Agenda item 5.5, the proposal to appoint Laura Miller as new member of the supervisory board. So I conclude that the proposal has been adopted. Congratulations, Laura.
You may take your headset off unless you have difficulties with my English. Then we have Agenda item 6, and as you can see, 100% of the votes were cast in favor of Agenda item 6, the proposal to reappoint KPMG Accountants as the external auditor for the financial year 2025. So I conclude that that proposal was approved as well. Agenda item 7.1, 98.29% of the votes were cast in favor of Agenda item 7.1, the authorization to issue shares. So I conclude that proposal has been endorsed. 96.41% of the votes were cast in favor of Agenda item 7.2, the authorization to restrict or exclude pre-emptive rights. So I conclude that that proposal has been adopted.
98.72% of the votes were cast in favor of Agenda item 7.3, the authorization to acquire a common share. I conclude that that proposal has been approved as well. Lastly, 99.38% of the votes were cast in favor of Agenda item 7.4, the cancellation of shares. I conclude that the proposal has been endorsed. With that, I think what's left for me to say is to say thank you for all your votes, and it seems like all proposals have been adopted, so thank you very much for that. Finally, I would like to build on what you were saying before.
I would like to take the opportunity to thank René Hooft Graafland for his term ending as per the end of this AGM in a couple of minutes. René, I would like to say thank you for your continuous support, your wisdom, and serving on the supervisory board, first in Ahold back in 2015, and later on in Ahold Delhaize. Your knowledge and your international business and finance expertise has been really valuable to the supervisory board. I can hear not only from the shareholders, but also from my colleagues, that you will be greatly missed, and we wish you all the best. And also, for the last time on the stage, we have Martin van Olffen, who will retire as per the end of this meeting.
Thank you very much, Martin, for your many years of valuable support from your side during the AGMs and throughout the course of the year. May I suggest that we give both of them a round of applause, for René and Martin. To everyone present here in Zaandam and virtually, thank you for attending this meeting and participating. To repeat what I said initially, I honestly believe that shareholder democracy is of vital importance, and I have enjoyed every moment of this dialogue that we've had here today in the Zaantheater, and also with all of you present virtually today.
We look forward to continuing the dialogue throughout the year, and that appears to be a possibility, and I would like to take the opportunity also to thank all the people that have been involved in the organization and preparation of this AGM. As the meeting closes, I would like to invite you to have a drink in the lobby. So no lunch today, but at least a drink and maybe a snack. I kindly ask you to hand in your headphones, your voting devices, when you leave the room. After that, please don't forget to take with you a pack of fresh products for a delicious meal offered to you by our great local brand, Albert Heijn. I now declare the meeting closed and wish you a pleasant evening. Thank you.