European retailers Ahold and Delhaize have both posted improved in fourth quarter revenues ahead of their merger later this year.

Dutch food retail group Ahold posted a 21.4% increase in Q4 Group sales to €9.8bn, which was up 11.8% at constant exchange rates. Full year sales rose from €32.8bn to €38.2bn – a 4.3% rise at constant currency rates.

Also today, Belgium’s Delhaize reported fourth quarter group revenue growth of 14.2% at actual exchange rates and 4.9% growth at identical exchange rates. That helped full-year revenues growth by 15.6% at actual exchange rates and by 3.2% at identical exchange rates.

Ahold’s fourth quarter underlying operating income was up 39.4% to €421m with an underlying operator margin of 4.3%. That helped underlying operating income for the year improve by 15.3% (3.6% at constant rates) to €1.46bn.

Ahold said the performance was “driven by excellent store operations, especially during the holiday season, and a strong increase in consumer online sales.” Fourth quarter adjusted net consumer sales were up 29.1% at constant rates.

Ahold CEO Dick Boer said: “With a sharp focus on supporting our great local brands and investing to serve the rapidly changing interests and needs of our customers, we have made very good progress and achieved strong operating and financial results for the fourth quarter and the year.

“We challenged ourselves to innovate faster, to bring our customers fresher products in new and different ways, and to deliver greater value. This progress was supported by reinvesting the substantial savings achieved through our company-wide Simplicity program. We are pleased with the response from our customers and appreciate the continued great work of our associates, which led to robust sales performance, market share gains and an increase in group operating income for the year.”

Meanwhile Delhaize posted full year underlying operating profit of €872m, an increase of 18.2% at actual exchange rates and 4% up at constant currencies.

Delhaize CEO Frans Muller commented: “Our full year results confirm our solid performance in 2015. We have been able to stabilize or grow market share in all our markets while at the same time investing €774 million in order to differentiate our banners, improve our infrastructure and expand our network.”

“This year we plan to spend €825m on capital expenditure (at identical exchange rates). These efforts will allow Delhaize Group to grow revenues, improve our market share and at the same time generate a solid level of free cash flow.”

Delhaize saw comparable store sales growth of 2.2% in the U.S., 0.9% in Belgium and 3.5% in Southeastern Europe

Ahold’s US full-year sales were up 21.3% to €23.7bn and up 1.4% on constant currency. Full year sales in the Netherlands were up 8.6% to €12.7bn.

The merger is scheduled to be completed in mid-2016.

Boer added: “Our proposed merger with Delhaize continues to progress on schedule. The combination of Ahold and Delhaize will create an even better retail leader for customers and associates and will enable us to further build on the position of our respected and popular local brands in the communities we serve.”

While Muller said: “We are confident on the prospects of the merger given the complementarity of our store networks, the opportunity to accelerate innovation for our customers and the €500m million run-rate synergy potential.”

Analysts at Jefferies said the combined results “confirmed that all major component parts of the enlarged group have entered 2016 with excellent momentum”.

The broker added: “An improving US capacity backdrop is resulting in healthy sales and profit performance, while European markets are delivering strengthening margin progress.”

Ahold shares edged down 0.3% today to €20.67, while Delhaize also slipped 0.3% to €95.88.

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