GlobeNewswire Inc | Jul 21, 2020 05:00PM EDT

July 21, 2020

Zaandam, the Netherlands, July21, 2020 Ahold Delhaize announces today that its U.S. brand Stop & Shop,reached atentativeagreementtoterminate its participation in theUnited Food & Commercial Workers International Union(UFCW)IndustryPension Fund (theNational Plan),through a transactionthat the National Planstrusteesdetermined to be in the best interests of the National Plansparticipantsand beneficiaries.While theplanisnot in critical status,thetentativeagreementdoes importantlyimprovethesecurity ofpensionbenefits forassociatesas well asreduces financial risk forthe company.If ratified by the UFCW Locals,the transaction will be treated as an extraordinary item and will therefore not impacttheunderlying operating results outlook for 2020.This statement should not beinterpretedas an update toany component ofthepreviously issued2020 outlook.As is customary, the 2020 outlook willbeupdatedon August 5th, when the company reports Q2 2020 results.

Pending ratification of this agreement, Stop & Shop expects to pay the NationalPlanwithdrawal liability of $649million (567million), on a pre-tax basis, to fulfill Stop & Shops obligations for past service for associates and retirees in the NationalPlan. Stop & Shop willalso make an$18million(16million)contribution to a transition reservefor anew variable annuity pension plan, described in further detail below. On an after-tax basis, the withdrawal liability and contribution to the transition reservetotal approximately $500million (437million).Thewithdrawal liability willbe satisfied by installment payments to the NationalPlanover the next three years. Ahold Delhaize will therefore recognize a provision inthese amounts, which will impact Q3 IFRS results.The provision will be excluded from both underlying operating profit and underlying earnings per share.Whilethe majority ofthis obligation will be paid in 2020, the Groups full year 2020 free cash flow outlook,whichisexpected to bein excess of 1.5 billion,will notbe impacteddue tothe strong level of free cash flow generated in Q1.

Krogerand Albertsons havealsoentered into separatetentativeagreementswith the UFCWLocalsand the National Plan Trusteesto withdraw from the NationalPlan. Together, Ahold Delhaizes brand Stop & Shop, Kroger, and theUFCW Localsplan tocreate the UFCW International Union-Industry Variable Annuity Pension Plan for future benefits.This new plan is designed to protect the benefit accrual of participants, with asignificantlyreduced risk of planunderfundingandimproved visibilityon annual contributions.Theannual contribution byStop & Shopto fund thenewvariable annuity plan isexpected to benearly identicalto the annual contributions previouslyestimated fortheNational Planduring the next eight years.Therefore,this change also hasno impact to the previously issuedfinancialoutlook.

Thesetentativeagreementshave been approved by Stop & Shop, the NationalPlanboard of trustees and the UFCW local unions.Theyremaincontingentuponapproval and ratification byStop & Shopand Krogerassociates in25localUFCWunions, whichisexpected to occur by October 1, 2020. Together,these agreementsare expected to materiallyimprove the security of pension benefits for associates andreduce financial risk for the company.

Cautionary notice

This communication contains information that qualifies as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This communication includes forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Words such as tentative, plan, will be, impact, outlook, update, updated, expects, would be, the next three years, will not be, future, risk, during the next eight years, expected, remain, contingent or other similar words or expressions are typically used to identify forward-looking statements.

Forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and that may cause actual results ofKoninklijkeAhold Delhaize N.V. (the Company) to differ materially from future results expressed or implied by such forward-looking statements. Such factorsinclude, butare not limited to the risk factors set forth in the Companys public filings and other disclosures. Forward-looking statements reflect the current views of the Companys management and assumptions based on information currently available to the Companys management. Forward-looking statements speak only as of the date they aremadeand the Company does not assume any obligation to update such statements, except as required by law.