For
conference is now being recorded. Ladies and gentlemen, thank you for holding, and welcome to the Sika Food Group Event Call. During the presentation, all participants will be in listen only mode. And 8, we will conduct a question and answer session. I would like to hand over the conference to Mr.
Rolfo Beshlage. Go ahead, please, sir.
Good afternoon, everyone, and welcome to our update on the annual figures 2018. I will start, indeed, with a short term presentation, and I will use the slide deck, which you could download from our website. On the annual figures. I will run through the presentation and try to keep it briefly so we have sufficient room for questions later on. I would like to start with the analysis of our net sales figures on Slide number 2.
We can see we had a good year with a 9.5% net sales increase And what we see continuously is that the growth is fueled by the delivery part of the business and that the cash and carry market also a trend in the market is slightly declining. And that means in the total setup of our business, the increasing parts is the delivery business. So now almost 70% of the turnover in our food service is online and delivery. If we move on to the next slide, we see the technical analysis of the net sales figure, but this year was characterized by a number of specific, more incidental items that also hit the top line. And also later on, maybe some items in the P and L, but we start with the net sales.
As mentioned a few terms before, in the period 2016, 2017, because of all the scandals in Asia, especially on the baby powder milk powder, a big chunk of turnover was created from the Dutch market into the Asian market. We never exported ourselves, but we had a number of customers that we had an agreement with together with a producer of these products, and we were the intermediate to facilitate these export volumes of milk powder to Asia. That peaked around the summer of 2017. And from that moment onwards, the scale down of this, of this turnover started, and has now come to complete stop. So at the peak, it was roughly EUR 30,000,000 in turnover in the second half of twenty seventeen already decreased by EUR 10 and the remainder, the remaining 20,000,000 is now out of our numbers by the end of 2018.
So from next year onwards, no effects to be expected in this area. And also, we made a decision not to start up this type of business again because it significantly influences and ampers visibility on the true development of our business. On the other hand, we also had some impacts due to changes in the accounting principles, specifically IFRS 15 revenue recognition, where we saw the way we accounted for our setup with our fresh partners, but also the signing fees to our customers should, have a negative impact on, on turnover development in total, 25,000,000 And if we clean up the turnover development for these items, then through development of the underlying business is feasible, And that is what we call other organic. It is not an official accounting term, but, we think that is the best representation and best comparable figure through the market development. So that growth was a little over 3%.
And with that, we were roughly in line with market development in both the Netherlands and Belgium. And then, of course, the non organic growth from acquisitions, the acquisition of Heineken, we started to consolidate Heineken from December 2017 onwards So it means 11 months remaining in 2018 were non organic, for IPC that was 4 months and for tinterling in a small Christmas gift Enterprise. That was 6 months. So that's the total on, on sales, on the sheet thereafter, you can see the geographical split to the Netherlands and Belgium. But I would like to move on to sheet number 5 where we can see that we have outperformed both the market in the Netherlands and into Belgium, improving market share in both these geographical areas.
If I then move on to gross margin on sheet number 6, of course, all these impacts on revenue just blamed also will have an impact on the mixture in, in gross margin profitability. But another important aspect was the dis synergy on food service resulting from the M K disposal, mid this year. As a result of that disposal, suddenly half of the purchasing volume of MTech disappeared, resulting in some dis synergies So we didn't meet all the threshold for bonuses and promotional campaigns with our suppliers, which were also hitting food service a little bit. We expect that that impact was somewhere between EUR 7,000,000 to EUR 8,000,000 in dis synergy. And in the meantime, we are renegotiating the deal for 2019 with our suppliers, and we expect that we can take away at least half of that negative impact for 2019.
And after that, we expect these effects will be fully done, and we will have no visible the synergy left on that line. On the other hand, we saw that, of course, in 2018, we've experienced a relatively high cost inflation especially on transportation and staffing costs. And in our model, fortunately, we usually can pass on this inflation onto our in pricing towards our customers. The impact of and the sudden increase in these, these costs was, was a bit too big to pass it on to the customers immediately. But in small steps, we can pass it on increasing gross margin that compensates increasing costs And the last thing I want to tell about the gross margin is the improvement that we create through better promotional margins as a result of our data program.
It's called Swigro Insights, and we sell and use the data that we have in our database at Seagro to help our suppliers create better promotional offer for our customers, it means that they can do it much more focused and much more targeted, which means they can, give us better deals at Seagro and also give our customers better deals. So in that way, everybody profits from this way of working based on good data and data analysis. And that is already for the 2nd year in a row supporting gross margin improvement for the group. If we then look at the other operating income for 2 numbers in 2 years in a row, relative the high number of other operating income, sheet number 7, last year, we had the 1 off, book profit of the sale of beer and to Heineken as part of the total deal with them. This year, the operating income has EUR 8,000,000 of revenue from the consortium of Yimbra and Cobalt, during the year, the year that they are transitioning and pay into their own formats, we agreed that we would support them, from the Seagro headquarters for the remaining and day stores.
And for these services, we get these fees. That's 8,000,000 in total. Our total deal will end ultimately in June of this year. So we will have some revenue from that stream and afterwards it is it will be gone. If we then move on to the costs or to the expenses, if we look at the expenses and that's then the total of expenses, depreciation and amortization, We see an increase of $113,000,000.
Of course, that's consolidation effect of the Heineken business on the one hand. On the other hand, we also see underlying price trends increasing significantly. So especially in transportation and staffing in the warehousing with seen significant cost increases. And it took us a little while during the year to either pass that on in the pricing to customers. Or find new ways to improve efficiency in our operations to cover those costs, and that's still an ongoing process going into 2019.
If we then look at the exceptional items in the cost lines, 2, I wanted to note explicitly. 1 is, of course, the non reach recurring costs for the separation of M. A. And the dissynergy, it says here, a total of EUR 12,000,000, but that includes the gross margin parts of EUR 7,000,000 to EUR 8,000,000. So it means we have EUR 5,000,000 in costs as dis synergy or nonrecurring.
And also there, we expect to, to fade that out in, in 2019. So by 2020, that will be gone, to the larger extent. And in relation to that, it also means downscaling the operation in our central headquarters, and we already announced a reorganization program the total cost of the program, are estimated to be $70,000,000. They are all accounted for in the year 2018 although execution of the program still runs in 2019, but there is no profit and loss hit expected from this program because all the costs are incurred in 2018. If we then take a closer look at depreciation and amortization on sheet number 9, If we look to the amortization part, we see that the customer contracts is from EUR 6,000,000 to 0 that is in relation to the IFRS change I mentioned under the net revenue, on net sales figure as well.
So, these upfront customer bonuses are no longer accounted for as an investment in the contract, but they are accounted for as prepaid bonuses and thereby now charged to the net sales instead of amortization. So they are now completely gone as an amortization item. The customer store locations that is the effect of the customer portfolio we acquired for Heineken, we chose to account for for acquisitions as much as possible in terms of value of customer portfolio or locations. And we amortize that over a period of, in the case of Heineken 15 years. So that means we have an additional 5,000,000 charge as amortization in the P and L but there's no recurring CapEx related to that amortization, of course.
And if we then go to the lower part of this sheet, on the tax, we see a significant lower number. That's one because the incidental items mentioned before depressed the net profit number. So less taxes to be paid. On the other hand, the Dutch government decided to approve the corporate income tax rate in the Netherlands, which will be decreased to a lower level over the next 3 years. And that means that the deferred tax liability was reduced, giving a one off relief in the tax payable in this year, roughly EUR 4,000,000 in size.
So that's why we have much lower taxes. If we then look to the EBIT number, I would like to explain it based on the the table on sheet number 11. That we see the same numbers as we recognize from the P and L. But we have 3 main items 1 in 2017 2 in 2018 that are regarded by us as nonoperational being the book profit on the Heineken turnover in 2017 and the carve out of M. A.
And the synergies and the cost of the reorganizations in 2018, And if we compensate for that, we see that underlying operating profit is at 82,000,000 year on year. In a year where we changed so much, we are not that dissatisfied with this outcome On the other hand, we've grown our top line with the $200,000,000. And then in relation to that, of course, this is a bit of a meager number, but all in all, with the 82 bottom line, well, it's okay for us. But of course, 2019 is all about doing that a little bit better again. Graphically, it is shown on page number well, but it's the same, as I told before.
So moving on to sheet number 13, the profit for the continued operations is 40 $6,000,000, but of course, the total profits from the business that we disposed off MTech business this year, including the transaction result is 2.30 So on the right hand side, you can see the total profit for the group was EUR 276,000,000 this year. Made no sense to give the split up in our dividends, on the regular part and the variable part as a result of all these incidental elements in the results. So we decided to keep the dividend stable and comparable to the level of last year at per share. Of which we already passed on an interim dividend earlier in 2018 of $0.55 per share. So $0.85 still to be paid in 29 team, to complete the dividend.
And of course, that is, besides the nonrecurring special dividend that we already paid out in 18 in relation to the MTech deal of per share, which we did in August of 2018. If we look at the cash flow statement, well, there's a lot of special items also here, of course, this is the cash flow statement for the group as a whole. Which means that the total, deal and M and A related cash flows are also part of this transaction that we see the disposal of operating activities of 348,000,000, which is, on the one hand, the 270 $5,000,000, which we got for the MTech business, but also $74,000,000 compensation for the working capital all, that was remained at Seagro. And there we see more or less a change because the operating activities cash flow shows really low, but in fact, the 1,000,000 compensation that we got in investing activities is to compensate for that decrease. So all in all, still a relatively strong free cash flow, as you can see at the bottom of, over EUR 100,000,000 again in 2018.
The net capital expenditure is also relatively low as we look here. So the CapEx, and that is a result, of course, also of the disposal of the M. A. Property on the one hand, but also we are investing in our delivery network in the Netherlands to be able to integrate Heineken but that doesn't mean we will keep all the distribution centers on our books, and we dispose of this special distribution center to a real estate party and got a 15 year lease in return under favorable conditions. So if the conditions are favorable, we do not necessarily want to hold on to the real estate and we will find alternative solutions and then freeing up, of course, cash for either further investment in the business.
Then maybe looking a little bit ahead already based on Slide number 15, because, we explained that 2018 was impacted by changes on the IFRS 15, so especially on net sales. In 2016, of course, the lease accounting standard will come into effect and that will have a significant impact on a number of lines in our P and L. All in all, net profit will, have a, well, we will see hardly any effect But of course, on EBIT lines and also in the balance sheet, we will have a big impact. So the capitalization of the lease assets and the related liabilities will increase the balance sheet with roughly 107 1,000,000 on either side. And on the other hand, as operating lease payments are now, going to be transferred into amortization and interest payments on the other hand.
We will have significant impact on EBITDA and also a little bit on EBIT as explained here in the sheet. Of course, from a cash flow perspective, nothing changes to the situation today. Also from a risk profile, nothing changes to the company from the situation today. We still have the lease contracts. We have to do monthly or quarterly lease payments but they are accounted for differently in, in both the balance sheet and the P and L of the group.
So that's an early warning. There's a more elaborate story about this in our annual reports, which we will publish on February 5th, but these are the main impacts of this new accounting standards. If we then look to the sheet number 17, few seats further there, we can see the summary of the total discontinued operations, so the M and A business in this year. Which had a $4,000,000 profit in the first half of twenty eighteen when it was still under ownership of Sligrow. And after that, of course, we had a transaction with the consortium of Yumou and Co Op, totaling to a total of continued operation as expressed before.
If we then look at, some of the market developments, on sheet number 19, we can see the development of the market in the Netherlands. This is the market measured by the Foodservice Institute in the Netherlands. It is accounted for in consumer sales, and we have to derive the wholesale value from that perspective. And based on our insights provided partly by foodservice Institute in Netherlands, but also the the Sich Bureau in the Netherlands, we estimate that our markets, the wholesale market has increased somewhere between 2.5% 3%. And with our underlying growth of 3.1, it means that we, more or less, were in line with market development.
And of course, through the acquisition of Heineken, we outperformed the market as a whole and took market share. If we then move on to sheet number 21, we see a similar picture for the Belgian markets. There, it's Foodservice Alliance that provides the information with a wholesale market growing at 3.8% and our performance of 3.5%. We were very much in line with market development in Belgium, but as we increased sales with the acquisition of IPC, at least for a period of 4 months, we had a growth of more than 14% and clearly outperformed market there. And again, increased market share in Belgium as well.
If we then look at more trends in the markets amongst our customers on the next, the next slide, slide number 22, we see that there are increasing shortages of labor in the markets when we talked about our co development. I explained a little bit that scarcity on drivers and, warehouse personnel has increased costs for us we see similar patterns among our customers. And then especially among the cooks in the restaurant, there's a big shortage in that which increases the need for more convenience and more service from the food service suppliers, which creates, of course, an opportunity for us to assist our customers in those areas as well. But it is becoming more difficult and more challenging for our customers in the market, and that's where we have to step up and find solutions for them. Well, in Belgium, we see more or less the similar pattern as in the Netherlands.
We see that pressure on the market amongst our customers is leading to reconsidering opening times, and a changing perspective in terms of the offering from them to the market. And that's of course where we can step in as a foodservice supplier and help them. And the trend that has been going off already a number of years is that we see that the boundaries between food service and food retail from a customer, but also from a supplier perspective of blurring and new entrants are coming into the market. And our customer behavior is in that sense followed by the continuously shift from out of home and at home spending. Which fuels the further blurring of the market as such.
If we then look at our own developments on Slide number 24 in the Netherlands, most important already mentioned the sales performance and the developments in our markets. Maybe to highlight the cash in carrier. We see that it's slightly under pressure, roughly minus minus 1% top line development. But we still see that the category is a very relevant place to visit for our customers also if they are mainly delivery customers. So a big part of them still actively visits our cash in carry in store.
But looking at a landscape where the market is already in decline, and we think that will continue for a number of years on session carry side, we, of course, look in how to redevelop our fleet growth 3.0 format to which stand these changes over time. And that means making it more relevant for our customer, adding different services, but also looking at the cost structure in the network size of the stores in the Netherlands and Belgium going forward, to make sure that we can still have the combination. We'll call that clicks and breaks, or we call it, omnichannel approach, whatever name you want to put on it. We really believe that the combination of cash and carry and delivery is what makes, one of the things that makes us unique. So we want to have it but of course, it needs to be at a cost efficient way.
And that's what we're going to work on also in the next couple of years in this figure 3.0 format. If we look at the delivery side on the next slide, we saw a strong growth already for many years, out of the deal with MTech, we also got the contract for the La Plas restaurants, which are in their ownership of limbo. We also started as a business halfway the year, which added some SEK 15,000,000 in sales, which was very positive, from both sides and that we are happy to have such a nice customer in our portfolio. We do not ever see there was a lot of, a fresher last year and a lot of efforts on the deal with Heineken, which overall was a successful 1st year, but it took a lot of efforts. And of course, in an environment where a pressure is on logistics It is a very, very special year in that sense with a lot of pressure on operations, but I think overall, we managed quite well And we also get that appreciation from our customers in return.
Now looking a little bit deeper into the Heineken perspective, The first part of the year was all about taking over operations and safeguarding our relationship with our new customers, that also puts some pressure on customer acquisition in new areas because our Salesforce was very much dedicated to talking to our customers, that were new from Heineken and keeping them in. And we've managed to do so. I think the churn is extremely low. I think it's less than 3% after the deal. Where usually we factor in a 5% to 10% customer loss after an acquisition.
In this case, we held on to almost all our customers, which is, I think, a very good performance. We did have some problems in the summer period when there's a big seasonality in the drinks business, which we had no experience with. And especially in the customer ordering behavior, the Heineken customers still to a large extent order via phone, where in our situation, 95% or more than 95% of our customers' orders via our online portal, And that means if things really get dizzy, then the number of calls explodes, and our systems are not equipped to take on these kind of volumes. But after a few months of, of started problems in that area, we managed to stabilize and processes are well under control And we were very happy with the recent outcome, among, of an investigation among 5000 of the former Heineken customers which rated on all the important KPIs between 8% 9.5% out of 10% on the surface of fleet growth. So I think we can safely say that we are fully in control in the business and doing a good performance now, which is, of course, a basis for further development and growth of these customers.
On sheet number 27, we see the development of the market share as a result of the growth and the acquisition. Of course, our market share increased again compared to the competitors. We see one specific line all the way at the bottom, which is called other, and that's category that Foodservice Institute has added the last couple of years. Unfortunately, they have not adapted the comparable figures of 2017 2016, accordingly. So it seems there is a huge growth in the category others, but it simply a changing definition of the market.
And in 2019, which our institute has announced that way they will come with a complete redefinition of the market and the market shares. And from that moment onwards, of course, we will adhere to their new definition and see how our market share developed but it's important that it's then in a comparable way to the historical numbers. So we are very happy that they are going to do so because we think that the market is wider than just specific wholesalers in active in the market and indeed parts of retail and retail suppliers and specialists are, of course, also part of the food service market. And they should be included. So we are very happy that FSIN is going in that direction.
It makes things more transparent. If we look at sheet number 28, the customer appreciation, we use NPS Score Net Promoter Score to, to measure the customer satisfaction. We see that on the cash and carry side, we are on a very high level already. And managed to improve even a little bit. We see that on the delivery side, and we measured it right after the summer.
The challenges and difficulties I ended delivery performance as a result of the shortages in transportation and warehouse personnel, have really hit the performance in the eyes of our customers, on a technical note, in 96.5 out of 100 times, we were on time and in full for our customers, but they were used to an over 99% delivery performance. So it was not good enough in the eyes of our customers and also not good enough for us. The one thing, which is important to stress is this was feasible all over the market So not just with sleek row, but also with all our competitors. And that is translated in the customer rating on another element, which is the loyalty. And the strange thing to see is that we were hit severely in the customer satisfaction, almost half our score, On the other hand, the loyalty, so, the willingness to stay with us as a customer increased, with our customers, which means that they are very much aware that this is a market wide problem, during the summer and not just with fleet growth.
So we're happy about that. And of course, keen on improving our performance and the scoring of our customers on the delivery side of the business. What was very good is last year, we had to tell everybody that our customers for NetApp not that satisfied yet with our new online delivery system, which we switched 2 years ago. So last year, we spent a lot of efforts on improving the stability and the performance and the speed of our online platform. And although the load increased by 90%, though almost we doubled the number of customers using the platform, the speed increased by 30% and we get the appreciation of our customers on those elements, which is happy, if you're very happy, to see.
And of course, we are continuously improving the website to make it even more attractive for our customers. If we look at the developments in Belgium, for those of you who have seen all the press releases in the Belgian newspaper and gossip magazines, We've been really struggling to, to finally get the permit for our, for our new venue in Unkwerp. We already had the permit in place. And once we were up for opening the store, then the permit was suddenly rejected. That didn't stop us from opening up the store.
And in the meantime, all the running procedures of our competitors to try and stop us have been completed and to our advantage. So at this moment, we have all the permits in place, and we from November onwards, when we opened up store, we are still open now. It doesn't mean that we're out of harms way because the Belgian law gives still opportunities to make further for the protest, but it becomes increasingly difficult and, the judges and representative of the local government have also told the ones that are complaining that they have no grounds to complain which means that it becomes increasingly difficult for them to file a suit once again, but still it is possible. And given that and the fact that we really want to grow in Belgium, we have a change, of course, in our approach, where we initially said we want to go step by step and City by City, we've decided to speed up the process of, location acquiring and permit acquiring So we will start up simultaneously in 6 to 8 Cities in Belgium, the process of getting locations and the permits in place We know that on average, it will take us 1 to 1 and a half years to get the permits.
And wherever we get it first, we will start to build the next Sigro outlet. Eventually, of course, we want to be active in all these major cities in Antwerp and, sorry, in flounders, and around Brussels. So we'll continue to push on in Belgium to obtain a market share there. Well, on the next slide, we see the building activities that we've done in 2018 and the plans we have for 2019. I will not go into detail.
The same we see for the delivery network on the next slide and in Belgium and our central headquarters and distribution center in Fekal. Not go into the details there. Then on Slide number 33, some, a few words about the IT project, as you all probably know, we are going to migrate to SAP as a company, to be better prepared for further international in a number of years. But it means that we have to switch first. And we've spent 201720 18 in preparation of the program.
And, 2 weeks ago, we pushed the start button and are now really in the process of designing, completing, building and testing our new international ERP landscape. And we aim to complete the building and testing phase in 2019 and to start implementation in Belgium in 2020, at the beginning of the year. We start in Belgium because the landscape in Belgium is still fragmented in terms of systems landscape. We acquired a number of companies. We started up our own business.
So it means that we have 4 different systems there, and we want to integrate it on one platform. So the need to integrate this highest in Belgium. On the other hand, from a risk perspective, Belgium is still relatively a smaller part of our business, it's a little bit easier to control the implementation of such a project instead of doing it in the Netherlands where, of course, the core of the business is present. So we do a stepwise approach both from the necessity of the business, but on the other hand, also from a risk perspective. If we then look at the next sheet number 34, that change in the organization structure with the disposal of MTech, we have to change our organization structure also in view of future international ambition.
And that means that we will have what we call an international board in which we set out strategy for the group, and we have all the shared activities, represented. And the shared activities are IT supply chain HR and purchasing, And of course, to represent the business, the director of the biggest country, the Netherlands, in this case, is also part of that international board. And below that board, we have country teams, country boards which have within the boundary set out by the international board, the opportunity to optimize things in the country. And that is a setup, which of course can be extended to other countries in the future. We don't expect to do that before 2020 because we first have to set up this organization in a good way We have to make sure that the ERP system is in place.
So, it's not that we are going to look for other opportunities in 2019 that will be a little bit further down the road but all preparations are, of course, based on a vision that we will do so in the next couple of years. And this setup we think can facilitate that further growth in the future. If we then look at the outlook for 2019 and a little bit further, Of course, we will go into the next phase of the Heineken integration. The 1st year was all about, retaining customers and taking over the operation in the asset situation. We are now preparing for the next, and that's a really important phase for us the integration phase, physical integration of the operation.
So we closed down all the Heineken distribution centers and moved them into the sleek road distribution centers. We are building and expanding current locations for that, but also on the IT side, there is a significant impact which we expect to finalize in the second quarter of this year. And from that moment onwards, we can do a stepwise integration physical integration of the Heineken deal, Heineken distribution centers. And if that is in place, we can start to benefit, on the expected supply chain efficiencies and also the upsell can start to the customers of Heineken. And that's when the advantages of the Heineken business case will come in.
As a net effect, I don't expect big, influencers in the 2019 figures of that. So there will not be significant improvements from that harmonization there because we start the integration in the second half. We have to do a lot of moving moving around. But from 2020 onwards, gradually, we will get the effect in. And we are still confident that we meet the integration deadline we have said that we have set of 3 to 4 years to do the full integration of this business.
We will further set out cash and carry of the future. As I said, we still believe in the combination cash and carry and delivery, but cash and carry has to change, towards the future. We'll further build the market position in Belgium and optimize the international organization structure and, our to a year with so many moving parts as we've seen in 2018. We've set out a new slogan for next year in the company back to business and really focus on the core of cash and carry and delivery, again, and optimize that. And if we then look at more economic outlook on sheet number 37, We think there still is a relatively favorable economic climate in the Netherlands and Belgium.
We do see some early signs of consumer confidence decreasing, but employment is still good in both companies. Have a close watch on consumer confidence because it's a predictor for the way our markets are developing. And, well, in the Netherlands, in the last 5 months, 18, we've seen significant decrease in consumer confidence. So that might vote for a slowdown in economic development in the Netherlands and Belgium. But for 2019, we do still expect that our markets will develop in similar ways in 2018, but for the period thereafter, it comes a little bit less certain.
We think that we will, grow in the market. We think that we can also outperform the market, again, in both regions. On the other end, we see that there will be an increase still in in the cost structure. So transportation, wage cost and antique costs are increasing, of course, that affects our figures also on the short term. On the other end, we think that we are very efficient compared to some of our competitors And of course, they are relatively hurt more by these price increases.
Furthermore, we have a lot of projects running, which we already started in 2018. To compensate these cost increases by increased efficiency. So we think we can absorb most of the of the prices. And of course, we can pass on some of it to the pricing of our customers as well. The regulatory changes, I talked a little bit about IFRS 16 already, but also in the Netherlands, the VAT on food has increased in the beginning of January.
We expect that our customers will pass it on to their end customers, which are the consumers. So that it will not hurt the volumes for our part of the business. And, given the fact that we expect a more stable and the less incidence in the next year, we refrain from making further forecast which we did last year. There were a lot of specials and one offs. So we would like to focus again on developing the business and growth And as a result, of course, improve the underlying margins.
That concludes my presentation. And I'm happy to
you. And there's a question from Mr. Ralph Stromire, Allianz. Go ahead, please.
Yes, hello. On your comment on consumer confidence, I mean, if consumer confidence is turning more negative. Why do you think it hits you only in in 2020 and not end of this year?
Yeah. We we we typically see a period of 9 to 12 month delay. If you look at it a historic perspective, we see that there's the impact on the food service market is there's a delay of 9 to 12 months between that and the consumer confidence. And consumer confidence is still positive. Although it has declined, it is still positive in, in the Netherlands.
So we think it will take a while if at all, it will go, sub 0. We don't know, that yet, of course. So we expect by the, if if this is indeed the new trend and the next downward cycle, then still the bulk of 2019 will be still relatively favorable, but then the effects will be visible in 2020. So we are anxiously looking towards the development of this consumer confidence in the next 4 to 5. That we'll be telling.
We expect it because for now, we think 2019 will be okay.
And there's a follow-up question from Mr. Ralph Stormier. Go ahead please, sir.
Yes. So on Belgium, has your outlook changed at all due to the difficult do you think in in getting, planning, permissions there, opening stores?
No. Not not if we look at our case for Belgium, of course, there is a there is delay, but but we are still confident that we eventually will get a good position in Belgium, and that's why we changed the approach a little bit because we have bought already a location in Brugge in Belgium, in 2018, and we've started permit process, but we see that the same competitors that have been fighting our location in Hamburg are now doing the same in Bruce. So we think it's best if we spread the field and, and to take on more locations at the same time. Then it will become more difficult for them to, to make objections in all these areas. And of course, we will, expect to have a faster role in the Belgium than the original planning.
So, yeah, today, there is, there is a direct delay but we are not discouraged, and we think that it's only a matter of delay, but they come to its standards, of course, in Belgium. On the other end, we have already, of course, an active location, our groundwork in Lieash in, in Kent, as a result of the IPC acquisition and a delivery center in Lurgenholtzola. So we are already present. And of also focusing on growing that business in the next years. But eventually, we still think that we will be active in well, let's say, 10 to 12 locations in flanders and Brussels, in the next years.
I hope that answers your question.
Ladies and gentlemen, for any additional questions, please press star 1. There are no further questions at the moment, sir.
Okay. Thank you. Then I would like to thank all of you for dialing into this call. I hope I've been able to the questions in the course of the presentation, should you have any follow on questions, feel free to send me an email and give me a call at a later stage, and I'll be happy to answer your questions. On April 2018, we will publish our quarter 1 trading update and on July 2018, our half year figures The full annual report will be available, on our website on February 5th, with a lot more background and details the developments of this year and the outlook towards next year.
So for now, thank you very much, and I hope to get you all online next time. Thank you.
Ladies and gentlemen, this concludes the speaker food group event call. Thank you for attending. You may now disconnect your lines. Have a nice day.