Koninklijke Ahold Delhaize N.V. (AD) Earnings Call Transcript & Summary

[Interpreted] Ladies and gentlemen, I would like to open this Annual General Shareholders Meeting, and welcome you all, those here in the audience and all of you at home or at the webcast. Welcome to this General Shareholders Meeting of Royal Ahold Delhaize. My name is Jan Hommen. I am the Chair today. Because of the COVID-19 corona crisis, this shareholders meeting is different from others. The health of yourselves and all of those that are involved in organizing this event are of preeminent importance to us, and this has led to a number of precautionary measures. For instance, requesting you not to physically attend the meeting, but to follow it via the webcast. We would like to thank you warmly for having followed up in such numbers. Because of the precautionary measures, because of the travel restrictions, the presence on the stage here is different from what you're used to. We decided to minimize risks, therefore, you will see that the presence of the Board members, the management and the Supervisory Board has been restricted. Only some of them are here. Others are virtually present and are following the meeting from abroad. For those that are present here, the shareholders, I would like to request your special attention for the safety regulations during this meeting. In the framework of the COVID-19 measures, you are obliged to keep a distance of at least 1.5 meters to another person. We would also like to request you urgently to follow up any instruction given by the hostesses present. Ladies and gentlemen, of course, today's thoughts turn to the corona crisis. Frans will touch upon this in his speech. We'll also discuss the impact it has on the company. We would like to express our thanks and our appreciation of all associates that are working hard every day in our stores, online delivery services and distribution centers. They, in these challenging times, are doing everything they can to meet the needs of our customers in the various communities we're in -- active in. Our thanks also go to the care and medical staff and all those other critical professions that keep our society going, our deepest respect for them. From this place, I finally wish our government much wisdom in the coming period. The government deserves our support in this incredibly difficult period in which we have so many human losses to mourn. This, though, is also a moment to look back on 2019 and to close that year together with you. 2019 was the first full year after implementation of the Leading Together strategy and the 5 growth drivers, which were at the base of this strategy. The new purpose, the mission and vision, Eat well, Save time, Live better, serve as a compass in the execution of this strategy. This compass gives direction to all our activities, which are constantly aimed at fulfilling the needs of our customers, our associates and the communities in which we are active. Finally, today will also be a day of personnel changes because we are going to say goodbye to Jacques de Vaucleroy, member of the Supervisory Board, Vice Chairman. Also, we will say goodbye to our CFO, Jeff Carr, who will step down after this meeting. On the other side, though, we're going to welcome a number of new people. We're going to discuss the appointment today of Natalie Knight as a new member of our Management Board, in which she will take over the role of CFO. Furthermore, we're going to discuss the nominations of Helen Weir and Frank van Zanten as new members of the Supervisory Board. Finally, we will look into a number of reappointments. Unfortunately, not everyone is able to be present here today. And for those that are following our meeting via the webcast, we will show a picture during the introduction of the agenda point relevant to him or her. Before I hand over to Frans now, I'd like to take up a couple of formalities with you. This meeting will be held mainly in Dutch. Any shareholders present, who are not able to speak Dutch, may also ask their questions in English. We have simultaneous translation available in English for the Dutch parts of this meeting and in Dutch for the English parts. You have headsets available. The report of the meeting via the webcast will be in both English and Dutch. The webcast will also remain accessible at a later date via the website. Questions that were asked before the meeting are going to be clustered per voting item and dealt with then. If you haven't submitted questions yet or if you have questions, regarding our answers, you can still send them to us. We will answer your questions in the next few days. These are special circumstances. We hope you will understand. I'd like to ask you to turn out your smartphones. It is not allowed to make audio nor video recordings. I then note that all legal and statutory conditions for holding this Annual General Meeting of shareholders have been complied with. There is going to be a notarial record made of this meeting, and a recording will be made to enable that. On the dais today, together with me are our CEO, Mr. Frans Muller; and our notary public, Mr. Martin van Olffen. In accordance with the corporate governance code, the external auditor of the company, PricewaterhouseCoopers Accountants N.V., is present. On behalf of PwC, Mrs. Shana Laurie de Hernandez is in the hall. She will present and answer possible questions with respect to the auditor's report for the financial statements. I finished the opening, and we'll now continue with the agenda of this meeting. As you can see, this is the slide with the first agenda items. After the presentations, with the final presentation by Bill McEwan, the Chair of the Remuneration Committee, I will offer you the opportunity to ask questions on agenda items 2 to 6, then we are going to hold votes about these agenda items 2 to 6. After that, we will tackle the last points on the agenda. I'd like to now hand over to our CEO, Frans Muller.

Thank you, Jan, and good afternoon, ladies and gentlemen. I would like to welcome all present here in the Muziekgebouw aan ‘t IJ and all of you who are virtually following this meeting. This time, the circumstances are completely different than what we're used to. A large part of our Supervisory Board and Management Board are only present virtually. The same is true for you, our shareholders. Every year, you usually come to our annual meeting in large numbers. I would like to thank you for your understanding and commitment to our company. We will do everything in our powers to hold a good constructive meeting here with you today. Let me, before I touch upon today's situation, look back on 2019. It was a year with good results. Sales improved by 2.3% at constant exchange rates because of our omnichannel strategy, amongst others. The online consumer sales grew by 30% to EUR 4.5 billion. We are now en route to realize EUR 7 billion online sales as per 2021. We furthermore, completed the integration of Ahold Delhaize with a total of EUR 512 million in net synergies, even more than we had promised. Our Save for Our Customers program is right on track with a savings of EUR 709 million in 2019. We are increasingly more able to help our customers make healthy choices. 48% of our own brand sales was healthier products in 2019. So it was a good year, and this translated into the score of 80% from our associate engagement survey. Unfortunately, though, there were downsides in 2019, too. A tragic bus accident in Romania cost 8 associates of Mega Image their lives. This was an unimaginable tragedy for the local community and certainly for our company as well. Furthermore, we had a strike of about 11 days at Stop & Shop in the U.S., practically a year ago now. This strike had a huge impact on our company. Stop & Shop is our largest brand in the U.S. relative to sales. I am very happy that Stop & Shop, in the end, managed to conclude a good and fair agreement with the social partners and is now back on track. All things considered, we can be very proud of what we achieved in 2019. Our very strong local brands in the U.S., Europe and Indonesia served more than 54 million customers weekly. And the progression that we've made in our omnichannel strategy is telling we can serve our customers even better at any time of the day in our stores and online. Furthermore, we've just launched our extensive sustainability ambition for 2025. We are going to focus in the coming years on health, on improving the product information to help customers make better choices, also on minimizing food waste and plastic packaging. We are not forgetting that we have a lot of work to do to reduce the impact on the climate to respect human rights in our own company and our supplier change -- chains. We source our products with care for the climate because we see that climate and nature are changing. Therefore, this is our responsibility, not only of our own impact on the climate, but also we have to be prepared to indeed take up the impact that will resonate with our company and the food chains we're part of. And finally, we are going to work even harder to create a social, safe and healthy working environment for our employees. This is our top priority in recent weeks. Ladies and gentlemen, 2019 was a good year. We can look back on it proudly. And normally, I would now give you an outlook for this year and stand still with our plans, but these aren't normal times. Coronavirus, the pandemic, has kept the world in a stranglehold. More than 1 million people worldwide have already been infected, resulting in tens of thousands of deaths. Governments have taken drastic measures to prevent the virus from spreading rapidly. Cities, even whole countries are in lockdown. There are more than 1 billion school children at home. The public life has come to a standstill in very many countries, and that is true for our sector as well. You've seen the pictures, empty shelves, long queues at the cash tills and customers with full shopping carts. People say that you get to know a company even better in times of crisis. And I can only say, yes, wholeheartedly. I'm extremely proud of how we, as a company, as a sector, reacted in these types of crisis. We do this by doing what we're good at, our core business. In the past weeks, our 380,000 associates worked around the clock to see to it that there was enough food, that the shelves were not empty and that our customers did not run any unnecessary health risks. The stockers, the cashiers, the truck drivers, but also the DC employees, the deliverers, the IT people, our suppliers and partners, and many, many more chipped in. Together, we worked very hard, and we are going to continue to do so to indeed support our customers and our neighborhoods in these challenging times with a strong organization and an efficient supply chain with our stores and online channels, and above all, with the dedication and drive that impressed me a lot. Food retail is such a great sector because you can act and move quickly. And in these days, this is extremely necessary. Let me just give you a couple of examples. In the U.S. and Europe, we introduced special opening hours for older customers, so that they can do their shopping in peace and safety. We've also installed plexiglass screens at our cash tills to protects our employees, our associates and our customers. The associates of Albert Heijn, furthermore, wear orange jackets to remind customers to keep distance. In the meantime, this idea has been taken over by our American brands. Our stores are being cleaned more frequently and more thoroughly. Furthermore, we scaled up our online capacities, so that via home delivery and drop-off points, we can indeed prevent physical contact. These are only a couple of examples of what we did in only a couple of weeks' time to make doing your shopping a safe activity. Our values form the guiding principle in all of this, courage, integrity, care, teamwork and humor too in the sense of modesty. We are showing that we have priceless value in today's modern society. We are a vital sector that responds to primary needs and that gives us a great responsibility. Ladies and gentlemen, the strong increase in demand after the COVID-19 pandemic has led to a higher growth of sales. Only yesterday, we published sales for the first quarter according to expectations to be rising by 15% in comparison to the same period last time. The comparable rise in sales in the U.S.A. was 14% and 10% for the whole of Europe. At the same time, though, it is unsure how the sales potential will continue to develop, also based on changes in customer behavior. It is our priority to see to it that supply chains continue to run smoothly and safely, so that we can serve the communities that are dependent on us. The health and safety of our customers and associates are at the top of our minds in all of this. To date, we've invested EUR 170 million in measures with respect to COVID-19, such as additional security, such as -- and safety measures, such as rewards for our associates. We have also updated our expectations for 2020. As we communicated earlier, the underlying operating margin will be in line with 2019. We also expect a slightly higher free cash flow in 2020 compared to our previous guidance of EUR 1.5 billion because a couple of investments due to COVID-19 will be postponed. Our cash and liquidity position remains strong. We are proposing a dividend of EUR 0.76 per share, an increase of 8.6% compared to 2018. Our dividend policy and share buyback program for 2020 will continue, but we shall indeed continue to assess both throughout the year in the light of uncertainties. Ahold Delhaize is in a strong position. We are well positioned to absorb the economic shocks, however, uncertain the outlook may be. We are going to continue to invest into people at this challenging time. Our brands in the past week have indeed recruited 40,000 new associates, partly from sectors that were hard hit by the crisis, such as restaurants and tourism. We also donate to local communities. Our brands have promised a EUR 20 million of donations in the past weeks only. Additional gifts, for example, to food banks that are facing shortages, but also to relief institutions, such as the Red Cross and to medical research about COVID-19 in the U.S. Ladies and gentlemen, I'm wrapping up at the moment to thank my colleague and our CFO, Jeff Carr, who has served the company over 8 years. Jeff has been a terrific colleague over the past few years, and I enjoyed working with him. I wish Jeff and his family all the best for the future. And at the same time, I would like to welcome, of course, Natalie Knight as our CFO nominee. Natalie, we are pleased to have you on board, and I'm looking forward to work with you. [Interpreted] Ladies and gentlemen, I am very proud of how we are fulfilling our social responsibility as a company. We do this together with our hundreds of thousands associates in the U.S., Europe and Indonesia, with our partners, with our suppliers, who constantly have to adapt, and our customers have to adapt, too. They have concerns about their own health, about their partners health, their children and their parents. And of course, together with the government, a crucial partner in the markets that we are active in. Food retail has a core function in society. And as a CEO and as a human being, I am extremely proud of being able to be part of all of that. Ladies and gentlemen, thank you very much.

[Interpreted] Thank you, Frans. And then now, I would like to hand over to our CFO, Jeff Carr.

Well, good afternoon, ladies and gentlemen. And thank you, Frans. I trust everyone can hear me under this strange environment that we find ourselves in. I'll very quickly give a review of our financial performance for 2019 before I follow up with an update to our guidance for 2020. First a few highlights for the year. As for the full year 2019, sales grew at 2.3% at constant exchange rates to $66.3 billion. This is a truly commendable performance given the Stop & Shop strike in the second quarter of the year impacted our sales significantly. Underlying operating margin was 4.2% for the year, slightly down from 2018 at 4.4%. However, adjusted for the strike impacts, our margins were stable year-on-year. Our investments in e-commerce delivered strong growth in 2019 as we continue to build a leading omnichannel operation in Europe and the East Coast of the United States. These investments led to an acceleration of net consumer online sales, up 28.6% to EUR 4.5 billion. Free cash flow remains very strong. And in 2019, we delivered EUR 1.8 billion. As Frans said, we're proposing an increase in dividend to EUR 0.76 per share, in line with the growth in underlying income per share, which was just under 9%. Now on the next chart, you see the performance by segment. So briefly, but first, I'll cover the U.S., where net sales grew by 1.5% to EUR 40.1 billion, with a strong performance at Food Lion, particularly, being partially offset, as I mentioned, by the strike impact at Stop & Shop. Similarly, the margin of 4.3% in the U.S. was down 20 basis points, largely due to the impacts of the strike. In the Netherlands, sales grew 4.2% to EUR 14.8 billion, with strong performances at bol.com and Albert Heijn, where we delivered a good market share growth through the second half of 2019. In Belgium, while sales were flat, our brand Delhaize grew market share in a tough market, and we continued to make good progress on cost and efficiency, leading to underlying operating margin of 2.9%, which is up 10 basis points from the private -- previous year. In CSE, sales grew 4.9%, with particularly strong growth in the Czech Republic and Romania. Now looking at free cash flow in a little bit more detail. You see, we delivered EUR 1.8 billion in the year, which was in line with our guidance. Now that was lower than last year, but that's mainly due to a significant increase in capital expenditure. As we accelerated our investments in our stores and in our omnichannel capabilities. On the next page, very briefly, I will cover some important dates for 2020. Notably, with the final dividend payment date being on the 23rd of April 2020. And additionally, coming up is our full year -- sorry, our full Q1 results, which will be published on May 7, 2020. And finally, let me look at the outlook for 2020. While our sales are up strongly in the first quarter as a result largely of the coronavirus, we are investing significantly, both to continue to ensure the health and safety of our associates and customers across our brands and to reward the considerable efforts of our associates in these difficult times. While we expect the first quarter underlying operating margin, therefore, to be higher than last year, we're expecting operating margin for the full year to be unchanged, in line with our previous guidance and broadly in line with 2019. Additionally, we maintain our guidance that underlying earnings per share growth in the year is expected to be in the mid-single-digit percentage range. We expect free cash flow to exceed our previous guidance of EUR 1.5 billion for 2020. And that's partly due to our expectation that some capital projects will be delayed due to the COVID-19. Now it's important to reiterate that our liquidity and our balance sheet remain very strong in these challenging times. We recently raised a EUR 500 million bond, and we also have available EUR 850 million of undrawn revolving credit facility. We propose to continue with our dividend payment and our current share buyback program. However, we will continue to monitor that situation, and we have the flexibility to take appropriate action should we need to strengthen our cash position in the coming months. Now thank you, and it's been a pleasure to serve this great company over the last 8 years. It's been an honor to work with Frans and the Chairman. And now let me hand you back to the Chairman. Thank you very much.

Thank you very much, Jeff. Then, I hand over now to Shana Laurie de Hernandez from PricewaterhouseCoopers.

Good afternoon. I hope that you and your families are healthy in these turbulent times. Thank you for the opportunity to discuss our audit with you. This is an important moment for me as you are one of the most important user groups of our audit report. You have submitted queries in advance. I considered these questions in preparing my comments today. We have issued 2 opinions, one on the financial statements and the second on nonfinancial information. I will speak to both. First, we issued an unqualified opinion on Ahold Delhaize's 2019 annual accounts as included on Page 204 of the annual report. You can read our extended audit opinion on your own, and therefore, I would like to use this opportunity today to help you be comfortable that we have performed a robust and independent audit. We understand society and you expect a high-quality audit, and I believe, we have delivered on that expectation. Each and every one of our more than 80 team members worldwide understands this expectation and our responsibility to you. 2019 was my first year leading the Ahold Delhaize's audit. As such, I have personally invested significant time getting to know the company and familiarizing myself with the audit. I have visited the U.S. operations twice, both at the planning and finalization stage. I've been to Greece, Belgium, Switzerland and, of course, regularly interact with our Dutch team. During my visits, in addition to meeting with local PwC teams, I met with local management and visited stores to get a sense of the differences between the banners. I developed an appreciation for the diverse competitive landscape, brand positioning and supply agreements in each market. In addition, I spent time working with each of our specialists from valuations, treasury, tax, IT, pensions and sustainability to agree on scope, understand the results of their work, and become aware of developments that could affect the business and financial reporting. This context has supported me in overseeing the more than 38,000 hours spent globally in performing the audit and satisfy myself that we are collectively doing what is needed. As well as interacting with the financial reporting group, my team and I meet regularly with Risk & Controls and Internal Audit. During the year, we have had robust discussions with the Audit Committee and have extended our reporting to the Board. There is active engagement on our insights and respected -- our insights are respected and taken seriously. Our audit was performed using an overall materiality of EUR 106 million and was based on profit before tax with a coverage of more than 86%. Our key audit matters are outlined in our opinion and are consistent with those identified in 2018. Obviously, in 2019, COVID-19 was not an identified risk and did not impact the audit nor our report. For 2020, we plan to assess the impact on the company and financial reporting. In addition to the key audit matters, which are areas that warrant your attention, we identified a number of significant risks in our audit, for which we perform additional audit procedures over and above what we do for normal risks. Specifically, I wish to highlight the risk of management override of controls and fraud and revenue recognition related to inappropriate manual transactions outside of the POS system. To give you a flavor of the types of procedures we performed, and I should add that this isn't comprehensive, we tested manual journal entries, reviewed remuneration packages for incentives, and we engaged our forensic experts to identify potential fraud risk when designing our audit approach. As part of the financial audit, we reviewed the annual report for consistency with the financial statements. Although we perform analytical procedures to assess reasonableness, we do not perform the same depth of audit procedures on the nonfinancial information. I mentioned 2 opinions. In addition to the opinion on the financial statements, we issued an unqualified limited assurance report on the nonfinancial information in the 2019 annual report. The sustainable retailing information is in accordance with GRI Sustainable Reporting Standards and Ahold Delhaize's reporting principles in all material respects. This concludes my comments. We value the relationship with you as shareholders. We have a constructive, open and professional relationship with Ahold Delhaize's Board and Management team. On behalf of PwC, thank you, and please stay safe and take care.

Thank you, Shana. And lastly, I hand over to Bill McEwan, the Chairman of the Remuneration Committee. Bill?

Thank you, Mr. Chairman, and good afternoon, everyone. Last year, the Remuneration Committee conducted an analysis of our disclosures to determine how we could be more comprehensive. This year's remuneration report introduces new tables to provide additional insight and clarity associated with the total remuneration received by each member of the Management Board as well as the performance realized and the payout of our incentive plans. Building on our extended remuneration report, I would like to provide context for and an outline of the remuneration determinations for the Management Board in 2019. The remuneration of the members of the Management Board in 2019 was determined by the Supervisory Board in accordance with the remuneration policy for the Management Board as adopted by the General Meeting of Shareholders on April 10, 2019. The 3 principal components of Management Board compensation are: first, an annual base salary; second, a short-term annual cash incentive plan referred to as the Executive Committee Incentive Plan or EIP; and finally, a long-term equity-based program referred to as the Global Reward Opportunity, or GRO. The annual report illustrates the base salary and incentive award payouts for all current Ahold Delhaize's Management Board members. In 2019, the base salaries of the Management Board members were increased by 3% for Frans Muller, Jeff Carr and Wouter Kolk, and 6% for Kevin Holt, well within the parameters of the remuneration policy and in line with the overall movement of salaries for executives in Europe and the United States. The target payout percentage for the annual cash-based incentive plan was 100% of base salary for each Management Board member. Tied to performance and on a graduated basis, the range of percentage payout was as low as 0% based on the achievement less than the minimum threshold of performance to a maximum payout of 150% based on exceptional performance. The annual incentive award for 2019 has been determined based on the company's performance. The overall 2019 performance multiplier was 89% versus the target of 100%. The third principal component of the Management Board compensation is the long-term equity-based program. Each year, performance share units of the company are granted. The number of shares that may vest at the end of the 3-year period is dependent on overall company performance achieved against predetermined performance goals. This year, the grant of the year 2017 will vest. The overall company performance multiplier was 68% versus the target of 100%. The resulting performance awards for the short-term and long-term incentives are illustrated on the slide shown with comparisons over the last 5 years. As outlined in the remuneration policy, the total compensation of our Management Board members is positioned around the median of the peer group we selected for benchmarking. Illustrated on the slide shown is the pay ratio for the CEO, CFO and CEO, Ahold Delhaize USA, compared to the average remuneration of all Ahold Delhaize associates. To ensure full consistency and transparency, we have calculated the pay ratio based on the numbers published in our consolidated financial statements with no further adjustments applied. Pay ratios are difficult to compare across industries as they are impacted by different mix of functions from one industry to the other, and even in the same industry. Comparing pay ratios is challenging due to different market conditions, such as a mix of higher and lower-paying countries. To put Ahold Delhaize's pay ratios into perspective, the slide also illustrates the pay ratio of our CEO compared to pay ratios of other CEOs in our selected peer groups. For comparison purposes, the ratios have been calculated using the same methodology as used for Ahold Delhaize's pay ratio. This concludes my explanatory words, and I hand back to you, Mr. Chair, and with thanks, of course, for the continued interest and support of our shareholders.

Thank you, Bill. [Interpreted] This means that the agenda items 2 until 6 have been dealt with. I'd like to give you the opportunity now to ask questions relevant to these agenda items. And when answering these questions, we will also include the questions relating to these agenda items that were received prior to the meeting. And that concerns the report of the Management Board, the reserve and dividend policy, the adoption of the financial statements, and the proposed dividend for 2019 as well as the remuneration policy for the past financial year. With regard to the adoption of the financial statements, I would like to point out that it's also possible to put questions to PwC about this. Would you please, when asking questions, use the microphones that are positioned at both sides of the hall. I would also like to ask you, before you ask your question to mention your name and possibly the names of the shareholders that you are representing. I would like to ask you further to keep your questions short, to restrict your comments, so that everyone has the opportunity to ask their questions, specifically those that come from outside. For an efficient answer to those questions, we will indeed group a number of questions before we answer them. So I would like to now hand over to -- one of the microphones. Microphone #2, please.

[Interpreted] Good afternoon, lady and gentlemen.

[Interpreted] Please give us your name.

[Interpreted] My name is Robert Vreeken, We Connect You, Public Affairs & Investor Relations. As is well known, I occupy myself with Sustainability and Health. I've been doing so for years. And I am very happy to hear that Ahold Delhaize is doing that as well. Ahold Delhaize is a great company with fine associates and good results. All our attention is now focused on the coronavirus. But every day, we have to mourn 50 deaths based on smoking and alcohol consumption. That is why I'm happy to see Heineken 0.0, and I indeed watch it filling the shelves. I'm also happy that it is promoted in the newest James Bond commercial because what I also believe is important is to reduce consumption of alcohol and smoking. I would like to see cigarettes disappearing from the shelves in all stores, and it would be laudable if Ahold Delhaize were to follow that idea. Then, reduction in salts in various foods is another point. I do want to now touch upon humor. Humor, as mentioned, humor was one of the strengths of Albert Heijn. Harry Piekema was a very good commercial actor. I advised last year to set up a new commercial, but this hasn't been tackled in such a professional way as Jumbo, for example, with better actors. I would like to suggest a combination of André van Duin, Humberto Tan, Matthijs van Nieuwkerk and Chantal Janzen, and to put them together to make a commercial for Albert Heijn. Albert Heijn is market leader in the Netherlands, and it is important to have good commercials, full of humor, specifically in this day and age. With respect to the climate, it's very good to have so much attention focused on it. On the side of Ahold Delhaize, we see that CO2 emissions, nitrogen emissions have been reduced dramatically. Unfortunately, also, because we have been moving around much less. Another point, I believe, is security. If I look at the stores and the supermarkets, I see displays that make associates come close to me at about 50 centimeters distance.

[Interpreted] Could you please ask your question.

It is important as a market leader to be most professional in all of these safety measures. Couldn't you professionalize them even more and, at the entrance of the supermarket, offer disinfectants not only for the cashiers but also for the other associates? At Atos, we can practically not buy any disinfectants, also not at Albert Heijn, which is eminently important in this challenging time where Albert Heijn wants to retain its leading role.

[Interpreted] Let's keep it at this Mr. Vreeken, so that we can hear an answer, and we can offer other shareholders the opportunity to ask questions as well. Please take your seat.

[Interpreted] Well, Chair, to be quite honest, I haven't heard a lot of questions. I've heard some comments and observations on the side of Mr. Vreeken. Still, I will touch upon a couple of items mentioned. At the Albert Heijn supermarkets in the Netherlands, we have a strong share of own-brand foods and products. In the past years, we have put a lot of effort into making them more healthy, in reducing salts, sugars and fats. And in this respect, as you have noticed yourself, we are indeed market leader. Furthermore, we've achieved a lot in the area of climate. We were able to bring down CO2 emissions from our refrigerants substantially. We are of the same opinion as you expressed that tobacco consumption is not a healthy choice, but this choice is our customers' choice, and we help them with it. Furthermore, we were one of the first who actually covered tobacco products in our stores. We pioneered some of the legal guidance. And we are also taking up initiatives, such as the activities around the month of October to stop smoking. Our commercial campaign, which is quite new, has received a lot of applause. I think personally that it contains a lot of humor, a lot of human touch and feel, and I believe, our customers have expressed their appreciation for it greatly. With respect to safety, we were one of the first in the market to hang up and install plexiglass screens to indeed streamline the influx into the stores with various distancing signs. Our associates are wearing jackets that have a sign on the back to keep distance, and we instruct our customers. We have intensified cleaning activities. We have done a lot. All of these measures make me very proud of our people, our associates, the enormous hard work they've been doing 24/7. I believe that they are fulfilling a huge role in this vital sector in the Netherlands. We can only be proud of that, and we can only look back on this with a lot of satisfaction.

[Interpreted] Good. Then, I will now carry on with the treatment of questions that have been submitted before the meeting. We are going to show them on a slide, so that you can read them with me. The first question by [ Mr. Diamant ] was with respect to prioritizing investments in remodeling stores in Belgium. Frans, over to you.

So shall we answer this in English or in Dutch?

That's fine.

Yes. So the question of [ Mr. Diamant ] is, and I don't even see -- we see the question on the screen here, be talking about the investments in the stores in Belgium. We invested in 2019, EUR 2.1 billion, which is an amount, which is well above industry average. And that's why I also think that we are absolutely well invested in our company. And if you look at the priorities of our investments and our cash allocation, then we first take care of our capital expenditures to secure the future of our company before we come if there's excess cash to share buyback programs and to dividends. And as we generated in 2019, EUR 1.8 billion of free cash flow, we feel that we have the conditions in place to both invest in our network accordingly, but also have a share buyback program and a solid EUR 0.76 dividend payment. For Belgium, specifically, we invested in Belgium more than EUR 100 million in 2019. And also there, more than 50% of the total capital investment went to stores, both remodeling and maintenance of source. And I could understand that [ Mr. Diamant ] does not see that all the stores are in the latest condition, but we have regular cycles of plans of maintenance, where every 7 years, our stores are modernized. And we also would like to make sure that we are very strict in our capital discipline there. The store remodelings are doing very well in Belgium. And furthermore, we opened quite some stores with affiliates in the smaller formats, like the Shop & Go and the proxy formats, and we very content with the present state of our real estate in Belgium.

Thank you. [Interpreted] We received a number of questions related to the corona crisis. Frans, I will leave it to you to answer them. You see them on the screen.

We have here a number of questions on the front line and additional bonuses and the 1.5-meter social distancing. We have in all the markets, and of course, a remuneration policy that we pay according to markets, but that to also support our associates in times of need. And that's exactly what we're doing, but it is market by market, very different. So we support our associates with leave programs if they are identified as COVID-19 patients or if they would like to go into quarantine, and we also pay those leaves. And that's especially valid for the U.S. where the health care programs, governmentally, are different than for Europe. Furthermore, we, of course, make available to our associates, protective gear to make sure that they have a good protection against COVID-19, and we also support them in the communication with the 0.5 meter -- 1.5-meter social distancing. We work with our associates, as I mentioned in my speech already, with special programs to reward them for the very good job they do, country by country, different. Then, we go to the 1.5-meter distancing. I think I have been clear on that item. Then, as I said before, we're extremely proud about what our colleagues in Europe and in the U.S. do for their communities and how they protect themselves and customers to work in a very safe environment.

Okay. Thank you. [Interpreted] We will now continue with the questions submitted by APG Asset Management with respect to remuneration policy. Bill?

Sure. Could you just share the question with me? It's not clear to me on the screen. Hello?

Can you see the question, Bill?

No. I cannot see the question. Is the question with respect to the sustainability measurements?

Let me read the question to you. To what extent does the remuneration committee believe that it is appropriate to reduce the relative weight of sustainability performance from 20% to 15% in the long-term equity-based program, Global Reward Opportunity at the same time as the weight of financial metrics is being increased?

Thank you, Mr. Chairman. The performance measures of the long-term equity-based program are aligned with our Leading Together strategy. With the introduction of a fourth performance measure that being EPS grow in the long-term incentive plan in 2019, the weight of all current metrics, TSR, return on capital and sustainability are adjusted to arrive at a balanced representation of performance indicators in the long-term incentive plan. It would be a mistake if the balancing -- rebalancing were to be seen as less important from the sustainability perspective. Sustainability is a cornerstone of our Leading Together strategy. And we feel that by including sustainability in our long-term incentive, we are making a more complete, consistent and transparent demonstration of our commitments and performance. Back to you, Mr. Chair.

Thank you, Bill. Maybe, you could be a little careful with what you do with your hands because there might be some additional noise if you do that, Bill. And the next question, also from APG. Why has the remuneration committee focused on only healthy own-branded food sales as a proportion of total own-branded food sales in the 2019 long-term incentive?

We feel that the KPIs and sustainability should look not only on sales for healthy products, but also other important metrics. The 2020 targets in the LTI program will include metrics beyond healthy sales. The sustainable retailing target for 2020 share award includes targets for healthy sales, food waste reduction, plastic waste reduction and carbon equivalent emissions. The targets we set for these metrics are in line with the targets in our healthy and sustainable 2025 ambitions, which are 51% of own-brand food sales to meet healthy criteria by 2022, 50% reduction in food waste by 2030, 100% of own-brand plastic packaging to be made from reusable, recyclable or compostable material by 2025 and for carbon emissions, the reduction target is in line with our draft science-based targets. We plan to finalize new climate targets later this year. Mr. Chair?

Are you willing, Bill, next question, to install a living wage metric?

Ahold Delhaize is a broad global framework of each brand to reward and recognize its associates contributions to our business success. We believe this framework creates equity, transparency and consistency. The following sets out the framework's overarching principles of scope for what we call our fair compensation framework. We use a solid base for comparing roles. Our compensation is market-based. We provide fair compensation in compliance with law. We provide equal pay for equal work. Compensation is aligned with individual performance and our brand business strategy. Our composition is transparent, consistent and explainable. And our annual engagement surveys across the brands revealed high engagement scores amongst our associates. Targets in these surveys are included in the KPIs for all patents. I believe that adequately answers the question about fair living wage across our system. Mr. Chair?

Thank you very much, Bill. [Interpreted] The last questions we're going to tackle in this round are by VEB, the Dutch Investors Association. They have been submitted at the very last moment. We have made a selection, and we'll try to answer as many as possible, but we weren't able to put them up on the slides -- all up on the slides for you. I'd like to ask Jeff to answer the first question. And this question is about improvements in working capital. Jeff, please.

Thank you very much. Clearly, as part of our ambition to have best-in-class cash generation, we're always focusing on managing our working capital closely and making sure we optimize it. It's very difficult during this period, specifically in the crisis that we're in, to be specific about working capital movements. But as we get back to normal, I do think there are still some opportunities to continue to improve working capital. We've got a great performance in terms of improving working capital over the last -- since the merger over the last 3 years, but there is still more that we can do. We're introducing new stock replenishment systems and forecasting systems, and this will allow us to manage inventory better. So we continue to look to improve working capital, but it's difficult to give specific estimates for 2020 in this current environment.

Thank you. The next question has to do with the Ahold Delhaize brands in the United States participating in a multi-employer pension plan. Jeff, could you answer that question as well?

Yes, I will. Thank you, Mr. Chairman. We disclosed a lot of information in our annual report, and this is the most up-to-date information that's available to us. We get that information from the multiemployer plans on reporting so-called Form 5500, but we -- and we don't have any further information about the future. What I can say is that any future changes to multiemployer plan contributions are subject to collective bargaining processes. But I will also add this in 2020, the company expects its total contributions to -- from multi-employer plans to increase from EUR 88 million to EUR 94 million. And that includes the rehabilitation plan contributions, which have been negotiated, where applicable.

Thank you. Next question from -- will be -- has to do with the strike, significantly impacted Ahold Delhaize's sales in the United States at Stop & Shop during 2019. Jeff, could you answer that question as well?

Yes. I can answer that question. Thank you. Of course, the Stop & Shop stoppage was something which was very unfortunate. And we haven't seen the like of that in the last 30 or 40 years of our history. But we have reached a fair and responsible contract with our 31,000 Stop & Shop associates in New England. The contract runs for 3 years and covers all items. There were no outstanding items. In addition to that, I think I should mention that Giant Food announced on the February 19, 2020, that it's reached a tentative agreement for a new 4-year collective bargaining agreement. And the Union ratified this new collective bargaining agreement on the 5th of March. So I think that's a fantastic sign, our 2 major negotiations have been settled for the next 3 to 4 years.

Next question has to do with online and corona. Ahold Delhaize goal is to double net consumer online sales from 2018 levels to around EUR 7 billion in 2021. There are some questions related to that point. And I think Frans, could you answer those questions, please?

Happy to do so. There are a number of questions here on online. First of all, we reached EUR 4.5 billion online sales in 2019. And we are very confident that our target of EUR 7 billion sales in 2020 will be achieved. We feel overall for this omnichannel proposition to customers where the combination of stores and online will, in the end, create a bigger share of wallet for our company. We feel very comfortable that we are properly positioned. I mentioned earlier that also in 2019, we grew 30% in online sales, and that is with the brands in the Benelux, the food brands, but also with bol.com and, of course, also with our U.S. brands. So very confident that we will grow. If the question comes, what does it mean, COVID-19? Where are we? Of course, we see a spike in online capacity and where are we at the moment are fully utilized in the Benelux and in the U.S. markets on online capacity. At the moment, we look at opportunities to increase capacity and the 2 Home Shop Centers in the Dutch market, for example, will most likely be opened earlier in this year and also the Home Shop Centers in Oosterhout and in Bleiswijk. Furthermore, we will extend our capacity in the Amsterdam Home Shop Center, and we expect that we also, therefore, can deal with a lot more customers than we do at the moment. Capacity is full in the Dutch market. We give in online capacity preferences and priority to people from the health care sector to seniors, to existing customers and then to new customers for our online business. But as you might have noticed, our capacity is fully utilized. On the U.S. side, we increased capacity, not that much only on the home delivery side, but also in the Click and Collect locations whereby in 2020, we will have more than 1,000 stores equipped for Click and Collect. So that's one of the things on the spike in sales. And of course, as we mentioned yesterday, the outlook for 2020 and beyond, the post-corona outlook is uncertain. The last question is talking about the downside of growth for us if online is growing faster. I think I mentioned this earlier, we are positioned as an omnichannel company and an omnichannel is a combination, a unique combination of physical stores and an online proposition. And we believe this is the most powerful proposition to get more loyalty from customers to give them those options. And in the end, we will see, therefore, an higher share of wallet.

Thank you. There is a question on the Capital Markets Day, whether we would become a consolidator of choice. Is that a question for Frans?

Yes. I'm happy to answer that question. We talked in November 2018 about Ahold Delhaize being consolidator of choice, mainly on the East Coast of the U.S. And you know that we have -- there are already 2,000 stores. And a roughly 60% of our sales is coming from the U.S. Our strategy is unchanged. And we also feel that opportunities will arise on the East Coast after the first announcement we made on our King Kullen acquisition. It could be very well the case that the COVID-19 caused a more difficult and less open M&A market in itself. We think the opportunities are there. But as we already mentioned earlier and as also Jeff mentioned early, we'll be very cash disciplined, especially in the present period and to see that we are prudent in the optionalities we pursue.

A question about bol.com. And the question that Amazon is launching a local website in the Netherlands. Frans?

Yes. Sometimes people tend to believe the Amazon is just coming to the Netherlands. And Amazon, of course, is a longer time already present in the Dutch market for a good 5 years both from the Dutch -- from the German market and from the U.K. market servicing the Dutch market. We feel very comfortable and are, at the same time, also very alert because we do not underestimate our competitors. But we also feel that we have a very good set of benefits for our customers in the Benelux. And I say Benelux because bol.com is very powerful both in the Dutch and in the Belgium market. We feel comfortable and confident because we have a very good fulfillment product in the Benelux countries, where we have a very good last-mile service and a very reliable next-day delivery. At the same time, we also deliver on Sundays, we deliver on evenings and we have also now with [ recipe package ] an 2 hours service in the Dutch market. We're going to grow in the Belgian market because we're going to introduce a French-language module in June of this year for the Wallonian customers in our network. And the other reasons why we think that we are well positioned in the Dutch market is we have a strong assortment. We have also an assortment, and people and category managers who understand the Dutch and the Belgium customers very well. We have a strong network of partners at our marketplace we recently opened. And bol.com offers in Antwerp to also make sure that we can serve our Belgian partners. But at the same time, I can tell you that we will stay very alert on any existing or new competitors coming to the Dutch or the Belgian market. And at the moment, despite Amazon being 5 years in the Dutch market, we solidly grew 30% also in last year with bol.com.

Good. We have a question on governance. I would like to move this 1 to the point where we discussed the nomination of Natalie. Then we are, at this moment, at the end of this round of questions. [Interpreted] So before we proceed to the vote, I'd like to ask our notary, Mr. Martin van Olffen to make necessary announcements regarding number of possible votes to be cast.

[Interpreted] Thank you. There are 3 individuals present as shareholders or proxy holders. They represent 654,960,944 ordinary shares which entitled to the same number of votes. Of the number of outstanding ordinary shares, 60.7% are represented this afternoon.

[Interpreted] Thank you notary Van Olffen for this information. We will now proceed to the vote on the agenda items. I don't think I'll have to give you any detailed guidance because there aren't that many people here. The ones that are present know all about this. So 1, in favor of; 2, against; 3, abstention. Now if you've made your choice, and you want to correct your vote, you can do that. Your last vote is the valid one. You can leave your voting card in the device. If you have various voting passes, you have to enter each voting card and cast your vote as soon as you see the options appear. And if necessary, you can ask for help of one of the hostesses in the hall. Now first agenda point 4, the proposal to adopt the 2019 financial statements. Because this has already been discussed, I would like to proceed to the vote. We will now vote. The first time, we're going to keep the vote open a bit longer. It is open now. [Voting]

[Interpreted] We now close the vote. And in a couple of seconds, you'll be able to see the results on the screen. As you can see, the proposal has been carried by 99.87% of the votes cast. The financial statements have been approved. We will now continue with agenda Item 5. This is the proposal to determine the dividend for the financial year 2019. As Jeff explained earlier on, it is proposed to determine a dividend of EUR 0.76 per common share. EUR 0.30 were already paid out as an interim dividend on 22 August, 2019. The remaining amount, EUR 0.46 per common share shall be payable on April 23. This item has already been discussed. You've had the opportunity to ask questions. So I will proceed to the vote. The vote is now open. [Voting]

[Interpreted] I am closing the vote now. This is the result. The result is 99.89% in favor of this proposal. We will now continue with a vote on agenda Item 6. The remuneration report for 2019. The vote you're casting now is an advisory vote. So if you vote in favor of, you give a positive advice. If you vote against, you give a negative advice. This item has been treated. There was an opportunity to ask questions, and we will now proceed with the vote. [Voting]

[Interpreted] Voting is closed. You see the vote has been carried. The proposal has been carried by 82.64% with a favorable vote with respect to the remuneration report. Thank you very much. We will now proceed with agenda Item 7. The discharge of the members of the Management Board and office in 2019, from all liability in relation to the exercise of their duties in the financial year 2019. I would like to give you the opportunity to ask questions regarding this agenda item 7. I see no questions. We will now proceed to vote. The voting is open. [Voting]

[Interpreted] Voting is now closed. We see that this proposal has been carried by 96.57% of the votes cast. The Management Board is discharged. Thank you. Carrying on with agenda item 8, discharging the current and former members of the Supervisory Board in office in 2019 from all liability in relation to the exercise of their duties in the financial year 2019. I'd like to give you the opportunity to ask questions. I see no one at the microphone. We will proceed to the vote. The vote is open. [Voting]

[Interpreted] Voting is closed. Result, 96.57 of the votes are in favor of this proposal. The Supervisory Board is discharged. Thank you. Continuing with agenda item 9, the proposal to adopt the principles and procedures that are to become an integral part of the remuneration policy of the Management Board and the Supervisory Board. Bill McEwan who will explain the proposed principles and procedures underlying the remuneration policy for the management boards and the supervisory boards. Bill?

Thank you, Mr. Chairman. I would like to present to you the principles and procedures underlying the remuneration policies for the Management Board and the Supervisory Board. The remuneration policy for the Management Board was adopted by the Annual General Meeting of Shareholders in April 2019. Later that year, the European Shareholder Rights Directive II, which aims to increase long-term shareholder engagement in listed companies seated in the European Union was implemented in national legislation in the Netherlands. As part of our regular practice, the remuneration committee conducted a review of our remuneration policies, taking into account new regulations arising from the implementation of the Shareholder Rights Directive. Based on this review, it is proposed to the general meeting of shareholders to adopt the principles and procedures underlying our policies as an addition to those policies. These principles and procedures fundamentally continue our existing remuneration practice, articulating in detail the principles and procedures that underpin our remuneration approach and providing details on how we seek alignment with our various stakeholders. The principles and procedures will become part of an integral part of the remuneration policy of the Management Board and if adopted, the remuneration policy of the Supervisory Board. The key element of principles and procedures are: alignment with company strategy; transparency; alignment with stakeholder interests; and remuneration governance. The principles and procedures support the objective of the company's remuneration policies to attract, reward and retain the highly skilled and qualified senior management that Ahold Delhaize needs to achieve its strategic and operational objectives. The full text of the principles and procedures has been provided within the agenda for this meeting. To conclude, we believe our remuneration policies balance the needs of our internal and external stakeholders. And our commitment to making a sustainable contribution to society. The structure of the remuneration policies aligns the focus of the company and its senior management with the interest of the company's stakeholders and society at large. This concludes the proposal to adopt the principles and procedures underlying the remuneration policies for the Management Board and the Supervisory Board.

Thank you, Bill. [Interpreted] I'd like to give you the opportunity to ask questions. Bill, 2 questions have been submitted. I'm going to read them out to you. Is that okay? I wasn't able to put them on the slide. Those are not on the screen. I will read them to you, and then you can answer those questions.

Thank you.

Ahold Delhaize does not disclose the achieved targets for performance measured for the short term incentive, STI. Will Ahold Delhaize in the spirit of the adopted Shareholder Rights Directive, consider disclosing the specific performance targets from fiscal 2020? That's the first question, Bill.

The performance business for the short-term and long-term incentive plan are completely aligned with leading together strategy. Our aim is to be as transparent as possible without revealing information that we consider to be commercially sensitive. Ahold Delhaize does not disclose the actual targets for the performance measure as this is considered to be commercially sensitive information.

Okay, there's another question, Bill, that I read for you as well. If the Supervisory Board considering to use their discretionary power to reduce or slash all or any variable components and variable payments, for instance, because the pay-for-performance relation is weaker than ever in the current turbulence.

Well, thank you for that question. It is far too early at this stage to anticipate rewards for 2020 in the context of COVID-19 pandemic and economic uncertainties. Our attention now is focused clearly and firmly as our core task as a supermarket and e-commerce company and the vital role we play in society, in which we support the well-being of our employees and customers right up front, first and foremost. We, of course, will stay on top of this and look forward to updating as appropriate as things develop, but it is far too early to anticipate what those changes will look like.

Thank you, Bill. [Interpreted] We will now continue with the vote on agenda item 9, the proposal to accept the principles on that become an integral part of the remuneration policy for the Management Board and the Supervisory Board. The voting is open. [Voting]

[Interpreted] Voting is closed. Proposal carried by 94.64% of the votes cast. Thank you. We will now continue with respect to the proposal on the remuneration policy for the Supervisory Board, agenda item 10. Bill, handing over to you. Go one more time.

Thank you. I'd like to present to you the remuneration policy for the Supervisory Board. As an international company, we must remain attractive to top people from our industry and beyond to continue to secure and sustain a strong and diverse Supervisory Board. We've analyzed our existing Supervisory Board remuneration levels and have adjusted certain levels based on market comparisons. The peer reviews for the benchmarking purposes is the same as the one employed for the Management Board remuneration policy and reflects the company's geographic operating areas and the markets most relevant in relation to the recruitment and retentions of top talent. The remuneration level is typically at or near the median. While consideration is given to the size of share of Ahold Delhaize's relative size to the peer group as well as our corporate structure. Given the nature of the responsibilities of the Supervisory Board, remuneration is not tied to the performance of the company and therefore, only comprises fixed remuneration, delivered in cash. In addition to a base fee, members of the Supervisory Board are offered committee fees and travel time compensation contingent upon their activities and responsibility. The proposed remuneration levels are the same under the current practice, other than the Chairman and the Vice Chairman where compensation is reduced in line with the amended Supervisory Board compensation and changed responsibilities, including the abolishment of presidian since the merger integration was completed successfully. Illustrated on the slide show is an overview of the proposed base fees, community fees and travel time compensation. This concludes the proposal to adopt the remuneration policy for the Supervisory Board.

Thank you, Bill. I don't see that anyone wants to ask questions here in the room, and there were no questions that came in from -- in advance. [Interpreted] We will now continue with the vote with respect to agenda item 10. The proposal to adopt the remuneration policy for the Supervisory Board. Vote is open. [Voting]

[Interpreted] The vote is closed. Proposal carried by 98.76% of the votes cast. Thank you. We'll now continue with a number of appointments, the first one being, appointing Mr. Frank van Zanten as member of the Supervisory Board, 4 terms starting immediately after the present AGM and ending on the day of the Annual GM of shareholders in 2024. Supervisory Board recommends the appointment of Mr. van Zanten in view of his seasoned and extensive international experience and expertise on highly complex multiproduct distribution channels and chains. For more detailed information, I would like to refer you to the extended explanatory notes on the agenda. I would like to give you the opportunity to ask questions. No one is coming forward. So we will continue with the vote on agenda item 11, the proposal to appoint Mr. van Zanten as member of the Supervisory Board. The vote is open. [Voting]

[Interpreted] Voting is closed. And I see that the proposal has been carried by 86.71%. Frank van Zanten, you are now nominated as a member -- appointed as a member of Supervisory Board. Frank, I know that you're listening via the webcast. I'd like to congratulate you on your appointment and welcome you as a member to the Supervisory Board. We will now continue with the proposal under agenda item 12, appointing Mrs. Helen Weir as member of the Supervisory Board. Again, for a term, starting immediately after the present AGM and ending on the day of the AGM in 2024. Native Dutch speaker, I will continue in English, allowing Helen to follow her introduction. The Supervisory Board recommends appointing Helen in view of her extensive retail and fast-moving consumer good experience as well as her financial expertise obtained during a 25-year career as a CFO. For more information on Helen's background and expertise, I kindly refer you to the agenda and explanatory notes of this meeting. In fact, you could also read it from the financial doc block today. It was an interesting commentary on Helen as well. [Interpreted] I would now like to offer you the opportunity to ask questions. I see no questions. We will now proceed to the vote on agenda item 12. The proposal to appoint Mrs. Helen Weir as member of Supervisory Board. Voting is open. [Voting]

[Interpreted] Voting is closed. We see the proposal carried by 91.03% of the votes cast. So the appointment has been adopted via the webcast. I hereby congratulate you on your appointment and welcome you as a member of the Supervisory Board of Ahold Delhaize. We will now continue with the proposal to reappoint Mrs. Mary Anne Citrino as member of the Supervisory Board. Again, this proposed appointment is for a term starting immediately after the present AGM and ending on the day of the AGM in 2024. Native Dutch speaker, I will continue in English, allowing Mary Anne to follow her introduction. Supervisory Board recommends reappointing Mary Anne, given her valued contribution during her term and a view of our financial and management experience in international business. For more information on Mary Anne, and her background and expertise, I kindly refer to the agenda and the explanatory notes of this meeting. [Interpreted] I see no one proceeding to the microphone. No questions to be asked, so we will now continue with the vote on agenda item 13, proposal to reappoint Mrs. Mary Anne Citrino as member of the Supervisory Board. Voting is open. [Voting]

[Interpreted] Voting is closed. We see the proposal carried by 97.3% of the votes. The proposal has been adopted. Mary Anne, congratulations. Greeting via the webcast, I hereby, congratulate you on your reappointment as member of the Supervisory Board of Ahold Delhaize. [Interpreted] We now continue with the reappointment of Mrs. Dominique Leroy as member of the Supervisory Board. Agenda item 14, the proposed appointment is 4 terms starting immediately after the present AGM and ending on the day of the AGM in 2024. In your considerations, the Supervisory Board has also considered the investigation in Belgium against Dominique. After several talks with Dominique, we arrived at the conclusion that this investigation is not standing in the way of the functioning of Dominique as a good and efficient member of the Supervisory Board. Therefore, the Supervisory Board recommends the reappointment of Dominique on the basis of her valued contributions during her term and in view of our management experience, international business, knowledge and experience of IT, consumer goods and marketing-related matters. For more detailed information on Dominique, I would like to refer you to the explanatory notes of the agenda. I would now like to offer you the opportunity to ask questions. There is no 1 moving forward. We will now start the vote on agenda item 14, proposal to reappoint Mrs. Dominique Leroy as a member of the Supervisory Board. The voting is open. [Voting]

[Interpreted] The voting is closed. Proposal carried by 99.65% of the votes cast. And this proposal has been adopted. Thank you, Dominique. I know that you are listening in via the webcast. I would like to congratulate you on your reappointment as member of the Supervisory Board. Ladies and gentlemen, we will continue with agenda Item 15, the reappointment of Bill McEwan as member of the Supervisory Board. This proposed appointment is again 4 term starting immediately after the present AGM and ending on the AGM in 2022. Dutch speaker, I will continue in English, allowing Bill to follow his introduction. As announced at the time of the merger between Ahold and Delhaize in 2016, the Supervisory Board in its decision to nominate its members for reappointment will take into account their [ tenure ] in the Board of Directors of the former Ahold Delhaize group prior to their appointment to the Supervisory Board. Bill has served on the Ahold Delhaize Board since 2011. In line with the announcement and the Dutch Corporate Governance Code, the Supervisory Board recommends reappointing Bill for a term of 2 years for reason of continuity as well as in view of his management experience and extensive knowledge and experience of retail and the food industry-related matters. Again, for more information on Bill's background and expertise, I kindly refer you to the agenda and the explanatory notes. [Interpreted] Opportunity to ask questions. No questions. Let's continue with the vote. The vote is open for agenda Item 15, ladies and gentlemen. [Voting]

[Interpreted] Voting is closed. Proposal carried by 88.72%. The proposal has been adopted. Thank you very much. Congratulations to Bill, member of the Supervisory Board. Continuing with the agenda Item 16, proposal to indeed reappoint Mr. Kevin Holt as a member of the Supervisory Board for a term ending on the day of the AGM in 2024. This proposal means that his appointment will be for a 4-year term. Native speaker, I will continue in English, allowing Kevin to follow the introduction. The Supervisory Board recommends to reappoint Kevin, given the several long-term strategic and operational initiatives that are ongoing at Ahold Delhaize USA. These initiatives will take an estimated 2 to 4 years to complete. Should his role and these initiatives be concluded before the end of the 4-year term, Kevin and the company will have the option to end Kevin's assignment as per the Annual General Meeting of Shareholders to be held in 2022. As executive leadership transition and continuity is critical, Kevin would then subsequently remain attached to the company as an adviser to the Management Board until December 31, 2022, after which he would retire. During his tenure as adviser of the management board, Kevin would remain eligible for the same room innovation as before. In addition, and in accordance with the Articles of Association, the Supervisory Board recommends to approve the further alignment of the compensation of Kevin to the U.S. retail market by increasing the at-target awards under the long-term equity-based program to grow by 35% from 2,000 -- 200% to 235%. For more information on Kevin's background and expertise, I refer to the agenda and the explanatory notes of this meeting. [Interpreted] Any questions on this agenda item? No. We will now continue with the vote with respect to agenda item 16, the proposal to reappoint Mr. Kevin Holt as a Member of the Management Board and the individual exception to the remuneration policy for the Management Board. Voting is open. [Voting]

[Interpreted] As you can see, the vote was carried. Proposal carried by 99.22%. Kevin... You are following the meeting via the webcast. I hereby congratulate you on your appointment and reappointment as a Member of the Board of Management. [Interpreted] We'll now continue with the proposal under agenda item 17, the appointment of Mrs. Natalie Knight as Member of the Management Board and as new CFO. This proposed appointment of Mrs. Natalie Knight is for a 4-year term ending on the day of the AGM of Shareholders in 2024. Natalie within the Management Board will take over the role of Chief Financial Officer. Native Dutch speaker, I will continue in English, allowing Natalie to follow her introduction. Natalie is a U.S. national. She joined Ahold Delhaize on March 1, 2020, as Executive Vice President, Finance and Member of the Executive Committee. Before joining Ahold Delhaize, she served as CFO of Arla Foods, a global dairy company based in Denmark, where she oversaw the company's finance, legal and IT functions. In addition, Natalie led the company's digital strategy process and has driven significant cash generation and working capital improvements. In recognition of Natalie's long-term incentive that was outstanding and forfeited at the time of resignation at Arla Foods, it's recommended to grant 2 awards with a grant value of EUR 600,000 each, which will vest the day after the Annual General Meeting of Shareholders of Ahold Delhaize in 2021 and 2022, respectively and will further be subject to the terms and conditions of the long-term incentive plan, including performance targets as well as the 5-year holding period from the date of grant as applicable to members of the Management Board. Natalie currently holds no shares in the company. Natalie is available via our virtual meeting facility. So maybe, Natalie, a good opportunity to briefly introduce yourself to the shareholders with a few words.

Thanks, Jan. It's very exciting to be here today, and I appreciate the kind introduction. I think this is a really interesting time. It would be an understatement in terms of joining Ahold Delhaize. As you mentioned, my background is that I come from Arla Foods, one of the world's largest dairy companies, where I've been the CFO for the last 4 years. But most of my finance experience has really come from my time at adidas, where I worked for almost 20 years. And I worked there in investor relations, mergers and acquisitions, a variety of commercial roles, in particular as CFO of our largest operations at the time, North America. I also had experience in -- at BASF, banking and government prior to that time. Now I've been with the company a month, and this is a time where I've been really able to see the talent and the welcoming spirit of the company. So it makes me prouder than ever to be able to join as the CFO should the vote go the right way today. And I'd also like to take the opportunity to really thank Jeff Carr for the outstanding and gracious way that he has worked with me in this transition. It's really been a pleasure to work with him and also get to know the team over this last month. So thank you very much for the opportunity to introduce myself.

Thank you, Natalie. [Interpreted] Before we vote, I see a question posed by the VEB, the Dutch Investors' Association. The question is... An internal candidate for the CFO role? Yes, I would like to say the following. We have a very extensive management development program at Ahold Delhaize. We have both -- for senior positions, we always take the position that we do internal and external candidates. And we always, at the end, try to strive for the best possible person. Well, and that's all context. Natalie came out as the best candidate, and we are very excited to welcome her to the Ahold Delhaize team. Then... [Interpreted] We will now proceed to the vote on agenda item 17, proposal to appoint Mrs. Natalie Knight as Member of the Management Board and CFO of Ahold Delhaize. Vote is open. [Voting]

[Interpreted] The vote is closed. Proposal carried by 99.98%, practically 100%. Congratulations. And thank you for your vote. This proposal has been carried... On your appointment as new CFO and Member of the Management Board of Ahold Delhaize. [Interpreted] We will now continue with agenda item 18, proposal to reappoint PricewaterhouseCoopers as external auditors for the financial year 2020. You have the opportunity to ask questions. I see no further questions. We will now proceed to vote. You can now vote for agenda item 18. [Voting]

[Interpreted] Voting is closed. Home run, 100%. Congratulations to PricewaterhouseCoopers and its representative. Now agenda item 19, proposal to authorize the Management Board to issue common shares or grant rights to acquire common shares, subject to the approval of the Supervisory Board. In accordance with current corporate governance practices, the proposal is limited to a period of 18 months from the date of this AGM, i.e., until and including October 8, 2021, to a maximum of 10% of the issued share capital. I see no questions coming forward. We will now vote on agenda item 19. Voting is open. [Voting]

[Interpreted] The voting is closed. Proposal carried by 97.4%. Thank you. Now on to agenda item 20. Agenda item 20, it is proposed to the General Meeting of Shareholders to authorize the Management Board for a period of 18 months from the date of this AGM until and including October 8, 2021, to restrict or exclude, subject to the approval of the Supervisory Board, preemptive rights in relation to the reissue of common shares or the granting of rights to acquire common shares. I see no questions. We will now proceed to the vote. The vote is open. [Voting]

[Interpreted] Voting is closed. And the proposal is carried by 96.32%. Thank you very much. Now on to agenda item 21. It is proposed to the General Meeting of Shareholders to authorize the Management Board for a period of 18 months from the date of this AGM until and including October 8, 2021, to acquire common shares in the company, subject to the approval of the Supervisory Board, provided that the company and its subsidiaries will not hold more than 10% of the issued common share capital in the company. I see no questions. We will proceed to the vote. The vote is open. [Voting]

[Interpreted] The proposal is carried by 98.01%. The proposal is adopted. Thank you very much. On to agenda item 22. It is proposed to the General Meeting of Shareholders to cancel any or all shares in the issued share capital of the company currently held or acquired by the company, resulting in a decrease of the number of issued shares or depository receipts in the capital of the company. The cancellation may be executed in one or more tranches determined by the Management Board. You have the opportunity to ask questions. No questions. And we will now proceed to the vote on agenda item 22, cancellation of shares. [Voting]

[Interpreted] Ladies and gentlemen, as you can tell, the proposal is adopted by 99.98% of the votes cast. Thank you. Then we are almost finished for today, ladies and gentlemen. But before we start with any other business, I would like to thank 2 individuals specifically because after this AGM, we are going to say goodbye to Jacques de Vaucleroy and Jeff Carr. Jacques, because of his family history, has been dedicated to Delhaize and later to Ahold Delhaize for many, many years. He has a very special and very much appreciated relationship with the company. We will miss his deep knowledge and unbridled dedication but, above all, his great passion for retail. Jacques was a visionary. He was always interested in how the future outlook was for this company. Jacques, thank you very much. Jeff, after 8 years, is saying goodbye and stepping down. We are now losing a very experienced and knowledgeable CFO, a CFO that has seen to it that this company has a reliable reputation, is financially sound and enjoys the appreciation of investors. His contribution was instrumental. We wish him all the best for his future. And I know that I'm speaking on behalf of all of you.

Ladies and gentlemen, we have now arrived at any other business. I would first like to answer questions from the audience present, and then we will answer the questions submitted. Who can I give the floor to? No one here. Are there further questions that were submitted earlier that we wish to tackle now?

[Interpreted] Yes. There were a number, chair. Would you like me to tackle some? There were indeed some that were presented by individuals, Mr. Spanjer on the screen now, the others by the VEB. The fact that the Netherlands, Belgium, Central, East and West Europe have been clustered in one reporting segment. The VEB believes that it is sad to see transparency lost by such clustering. The most important consideration though here was that in conforming with IFRS, we indeed brought together a number of segments under the operating model that we have. Wouter Kolk is responsible for Europe and Indonesia. So we followed the operating model and, therefore, set up the segment Europe as it is now. A second question that is still open is whether Ahold Delhaize, in its dividend proposal, will stick to it. I believe we've already answered that because the answer is yes. The additional question was why. And the answer there is we believe that we want to remain credible towards our investors and shareholders. Our cash and liquidity position allow this dividend payment. The next question by the VEB was a question on the share buyback program that we announced on 4 December, EUR 1 billion -- 2020, EUR 1 billion share buyback. Is it actually sensible in this day and age, in this market condition, to indeed execute this share buyback program? Yesterday, in our press release, we said that we are going to stick to our share buyback program, the buying of our own shares, but we are going to monitor the situation very closely. We are going to remain flexible and indeed adapt if any reasons arise in the course of 2020. The next question, again, referring to the share buybacks, a debate going on in the U.S.A. between companies that have share buyback programs and later need support by the government or are even nationalized because they have indeed met with serious economic circumstances. Is our program not in conflict with the U.S. government measures? Our answer is no. This argument is not applicable to Ahold Delhaize. We are a very sound financially company. And I would like to refer to other answers I've given to earlier questions in that respect. Then with your allowance, Chair, there was another question talking about risk management in the financial report by Ahold Delhaize. The question there was whether in the risk management report we are indeed discussing the corona crisis extensively and whether we see that a pandemic is a risk for the future as well. Well, you will all understand that we were not able to foresee or foretell the coronavirus in our risk management report. We discussed business continuity. We discussed health and continuity of associates and customers. But this corona impact that we are experiencing now will teach us a lesson. And in the coming risk management discussions, we will indeed include it. Another question about online. Does Ahold Delhaize believe that customers who now purchase more online because of the COVID-19 situation, do they believe that these will remain online customers and therefore cannibalize the physical stores sales? I believe I answered in an earlier round of questions. And I said that we are an omnichannel company. We believe in the combination of physical bricks-and-mortar stores and the online option that we offer our customers. We believe that the share of wallet is increased. Whether these customers will remain online customers has to be seen. But for both options, whether it's online or the stores, we are very well positioned and equipped. And therefore, Chair, I am now going on to the very last question open on VEB side. And Jeff, I'm addressing you now. The question is the following, improvements in working capital...

[Foreign Language]

[Foreign Language]

Yes.

Okay. It's already answered. Then I think that then we have no open questions there, Mr. Chairman, on the VEB list. And then there's another question here, if I just proceed, it's from P. Spanjer. [Interpreted] Indeed, a question by Mr. Spanjer up on the screen now. He is worried about the size of reported food waste in 2019. Mr. Spanjer, I share your concern. And that is why food waste is one of the main targets of our healthy sustainability vision. We wish to have the food waste in 2013 compared to the baseline of 2018. And I can report now that since 2016, food waste, relative to sales, decreased by 9%. And in 2019, there was a further reduction compared to 2018 by 10%. We also have a number of initiatives going on. I'd like to highlight just 2. Cooperation with food banks is increasing in Europe and in the U.S., 18% of our products that we weren't able to sell were donated to food banks with a very, very useful destination. Again, food waste in 2019, Albert Heijn tested dynamic markdowns. You were able to see that on the railcards. Here, we hope to indeed predict demand and to make markdowns easier to sell products by their best buy date. And Chair, would you like me to continue with the VBDO questions?

Indeed.

[Interpreted] The Association of Investors for Sustainable Development had a couple of questions about climate and social compliance. You see the questions here on the screen. The disruptions with respect to the climate change... Effect of climate change and in 2020, we will establish a stronger climate risk assessment, and we will follow the science-based target methodology in 2020, which is a big step for our company. And we will analyze the climate impact to our business, including impact on the total supply chain. We have continued to decrease overall refrigerant emissions and have reduced our total emissions per square meter by 32% since 2008, but we see an increased stress on our refrigeration systems due to warmer weather/climate change. We have seen small disruptions in the supply chain related to climate, such as a decline in the amount of avocados, for example, from South America. Due to climate change, the growing conditions changed there dramatically. And to anticipate on that impact, we now have more avocados coming from our South African farms to compensate that expected decline. On social compliance, that's the target of the AR 47 standards. Social compliance is embedded in Ahold Delhaize product integrity standards. Meeting the 80% target by the end of this year is challenging for the brands that are located in high-risk countries like, for example, Serbia and Romania with a high number of local smaller suppliers. For these suppliers, audits have been developed that cover the essential requirements, and we would like to make sure that we support those smaller suppliers to be compliant with the standards and that there can be also a very proud supplier to Ahold Delhaize, and we can enjoy their products. These audits are not included in the 71%, and we are working on more specific goals towards 2025, taking into account the conclusions of our global human rights due diligence and product transparency ambitions and a risk analysis. Then the next question was on the statement, the UN CEO Statement, which we signed, Support for Women's Empowerment Principles. And the question is there -- how do we see that -- future ourselves, and how are we going to be compliant ourselves? Ahold Delhaize uses a broad global framework for each brand to reward and recognize its associates' contributions to business success. We believe this framework creates equity, transparency and consistency. We use a solid base for comparing roles. Our compensation is market-based. We provide a fair compensation in compliance with law, gender-neutral. We provide equal pay for equal work, and compensation is aligned with individual performance and brand business strategies. Our compensation is transparent, consistent and explainable. But we also, at the same time, are exploring ways to further enhance our disclosure and increase transparency. The next question comes from Migrant Justice. What will Ahold Delhaize do to ensure human rights principles when one of your businesses refuses to take responsibility? And the example mentioned here is the dairy supply chain. We have conducted a global human rights due diligence process and plan to publish the report in the coming months of this 2020 year. In the meantime, our local brands in Europe and the U.S. continue to engage with their supply chains and potentially also other stakeholder groups to ensure respect for human rights. As a next step, we will review the policies and procedures, including our standards of engagement for suppliers related to human rights issues and further strengthen our governance around human rights. Mr. Chairman, if I'm properly organized, then I think we have answered all the questions.

I can't see any other questions. So I think you are completely done. Thank you, Frans. [Interpreted] Thank you for these questions, and I'd like to close this any other business item with a message from [ Ms. Anesta ]. And she's a valued shareholder, and she complied with our request not to attend the meeting in person, and she requested me to thank all the associates of Ahold Delhaize but also the partner companies of Ahold Delhaize, to thank them for their dedication in these difficult times. And also thanks to Jeff for his work as CFO over the past few years, and she wishes all the members of the Board all the best with the future. And she closes by calling upon us as an organization and you as a shareholder to join forces in fighting corona. And where people somewhere in the world are affected by this illness, to reach out to them. And she also suggests to the Board to donate part of their dividend or the bonuses to organizations that are involved in the fight against corona. The message of [ Ms. Anesta ] is very much valued. And as has been pointed out, we, as a company, are already substantially contributing to the fight against corona. We will see how we can continue to contribute in other ways. And with that, I would like to thank the people in the room and all those people who have followed the meeting on the webcast. I'd like to thank them for attending and for putting in the time. It was an extraordinary meeting, and let's hope that next year we can meet again under better circumstances. In view of the corona COVID-19 measures, unfortunately, this year, we cannot offer you a drink and a bite to eat, but we would request you when you leave to hand in your voting devices, the handsets, the headsets, anything you've been given, to give that back and to leave the building, keeping in mind the 1.5-meter distance. The questions that have been asked, the answers will be published and posted on our website. And so you can read them at your leisure. So thank you very much, and see you next year. I'm closing this meeting, and I wish you a fine day. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]