Highlights
-- Fourth quarter operating income EUR 341 million
-- Fourth quarter net income EUR 267 million
-- Full year underlying retail operating margin 5.1%
-- Dividend increased by 28% to EUR 0.23 per share
-- Share buyback program of EUR 500 million
Amsterdam, the Netherlands - Ahold today published its summary
report for the fourth quarter and full year 2009. CEO John Rishton
said: "In the fourth quarter, we delivered a solid performance in a
challenging environment. Sales and margins continued to be impacted
by deflation, trading down and increased promotions. We
successfully managed, however, the balance between sales and
margins, and we improved market share and increased volumes in the
Netherlands and the United States.
"For the full year 2009, our underlying retail operating margin
was 5.1%, the same as 2008 and consistent with our mid-term target
of 5%.
"The economic environment remains challenging, but we have a
proven ability to adapt and respond quickly and effectively to
changes. We will continue to reduce costs so that we can invest in
our offering to improve value for our customers. We will manage the
balance between sales, margin and market share and use the strength
of our balance sheet to seize opportunities as they arise.
"Reflecting the confidence in our strategy, our ability to
generate cash and our strong balance sheet we announced a EUR 500
million share buyback program to be completed over the next 12
months and propose a 28% increase in our dividend to EUR 0.23 per
common share.
"We reiterate our mid-term targets to achieve a net sales growth
of 5% (mainly from identical sales growth) and a retail operating
margin of 5%, while maintaining an investment grade credit
rating".
At current exchange rates, Ahold expects its net interest
expense for 2010 to be in the range of EUR 260 million to EUR 280
million and its capital expenditure to be around EUR 1.1
billion.
Ahold Press Office: +31 (0)20 509 5291
Group performance
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Q4 Q4 % %
(EUR million) 2009 2008* change 2009 2008* change
---------------------------------------------------------------------------
Net sales 6,801 6,576 3.4%** 27,925 25,648 8.9%**
Operating income 341 369 (7.6)% 1,297 1,202 7.9%
Income from continuing 273 292 (6.5)% 972 887 9.6%
operations
Net income 267 291 (8.2)% 894 1,082 (17.4)%
---------------------------------------------------------------------------
* Comparative figures reflect the changes in accounting policies and
retrospective amendments as disclosed in Note 2 to the summary financial
statements.
** At constant exchange rates, net sales increased by 11.0% in Q4 2009 (YTD
2009: 6.0%) and increased 2.1% (YTD 2009: 3.9%) when adjusting for the
impact of the 53rd week.
Fourth quarter 2009 (compared to fourth quarter 2008)
Net sales were EUR 6.8 billion, up 3.4%. At constant exchange
rates, net sales increased by 11.0%, positively impacted by an
additional week. Net sales increased by 2.1% at constant exchange
rates on an adjusted basis.
Operating income was EUR 341 million, down 7.6%. Despite volume
growth in all markets, the margins were impacted by deflation,
trading down by customers and increased promotional activity.
Retail operating income was EUR 351 million, a retail operating
margin of 5.2% compared to 6.0% last year. Underlying retail
operating margin was 5.4% compared to 6.1% last year. Corporate
Center costs were EUR 10 million for the quarter, down EUR 13
million. Excluding the impact of the Company's insurance
activities, Corporate Center costs were EUR 16 million, EUR 3
million lower.
Income from continuing operations declined 6.5% to EUR 273
million, reflecting lower operating income and higher net financial
expense, partly offset by lower income taxes. Net income was EUR
267 million, down EUR 24 million.
Cash flows before financing activities were EUR 236 million, EUR
83 million lower, mainly due to EUR 289 million investment in
short-term deposits; higher cash flow from operating activities and
lower capital spend were a partial offset.
Full year 2009 (compared to full year 2008)
Net sales were EUR 27.9 billion, up 8.9%. At constant exchange
rates, net sales increased by 6.0%. Net sales were up 3.9% at
constant exchange rates on an adjusted basis.
Operating income was EUR 1.3 billion, up 7.9%, despite higher
impairments (EUR 26 million) and lower gains on sale of assets (EUR
39 million). Lower restructuring and related charges (EUR 13
million) and one-off net insurance results (EUR 16 million) were a
partial offset.
Retail operating income was EUR 1.4 billion, a retail operating
margin of 4.9%, compared to 5.0% last year. Underlying retail
operating margin was 5.1% (2008: 5.1%). Corporate Center costs were
EUR 63 million, down EUR 28 million. Excluding the impact of the
Company's insurance activities, Corporate Center costs were EUR 74
million, down EUR 8 million.
Income from continuing operations was up 9.6% to EUR 972
million, reflecting a higher operating income and lower income
taxes, partly offset by higher net financial expense and lower
share in income of joint ventures. Income taxes were lower due to,
amongst other items, the recognition of EUR 101 million of deferred
tax assets, primarily arising from U.S. net operating lossescarried
over from previous years. Net income of EUR 894 million was down
EUR 188 million, impacted significantly by discontinued operations.
Discontinued operations in 2009 included a net provision of EUR 62
million, representing Ahold's estimate of obligations under the
lease guarantees of its former subsidiaries BI-LO and Bruno's,
whereas in 2008 it included a EUR 161 million gain related to the
divestment of Schuitema.
Cash flows before financing activities were EUR 939 million, EUR
332 million lower than last year, which included net proceeds from
divestments, primarily Schuitema. Furthermore, cash flows before
financing activities in 2009 included EUR 289 million of investment
in short-term deposits and EUR 112 million of additional
contributions to pension plans. Lower capital spend of EUR 249
million was a partial offset.
Performance by segment
Stop & Shop/Giant-Landover
For the fourth quarter, net sales were $ 4.4 billion, up 10.5%.
Net sales increased 1.8% when compared to the adjusted fourth
quarter 2008 sales. Identical sales were up 1.0% at Stop & Shop
(down 0.4% excluding gasoline) and up 2.4% at Giant-Landover (1.6%
excluding gasoline). Operating income was $ 238 million (or 5.4% of
net sales), up $ 31 million. Operating income was negatively
impacted by impairment charges of $ 4 million and restructuring and
related charges of $ 3 million. A one-off net income of $ 3 million
related to pensions was a partial offset. Last year fourth quarter
operating income included impairment losses of $ 5 million and
restructuring and related charges of $ 12 million, consisting of a
loss as a result of withdrawing from a multi- employer pension plan
and store closure costs.
For the full year, net sales were $ 17.9 billion, up 4.6%. Net
sales increased 2.6% when compared to the adjusted full year 2008
sales. Identical sales were up 1.6% at Stop & Shop (2.2%
excluding gasoline) and up 3.0% at Giant-Landover (2.6% excluding
gasoline). Operating income was $ 869 million (or 4.9% of net
sales), up $ 168 million. Included in the operating income were
impairments of $ 22 million, a non-recurring rent charge of $ 15
million and one-off net charges related to pensions of $ 6 million.
These were partly offset by a $ 28 million release of insurance
provisions. Last year, restructuring, severance and related charges
were $ 44 million, impairments were $ 15 million and gains on the
sale of assets were $ 30 million. Furthermore, 2008 included
one-off rebranding costs of $ 8 million.
Giant-Carlisle
For the fourth quarter, net sales increased 15.0% to $ 1.3
billion. Net sales increased 6.0% when compared to the adjusted
fourth quarter 2008 sales. Identical sales increased 2.8% (1.0%
excluding gasoline). Operating income was $ 54 million (or 4.2% of
net sales), down $ 6 million compared to the same period last year.
Restructuring and related charges of $ 1 million were recognized in
the fourth quarter of 2009.
For the full year, net sales were $ 5.0 billion, up 4.6%. Net
sales increased 2.6% when compared to the adjusted full year 2008
sales. Identical sales increased 0.3% (2.2% excluding gasoline).
Operating income was $ 218 million (or 4.4% of net sales), down $
15 million compared to last year. Operating income included a $ 4
million release of insurance provisions, partly offset by
restructuring and related charges of $ 1 million. In 2008,
operating income included restructuring, severance and related
charges of $ 11 million.
Albert Heijn
For the fourth quarter, net sales were EUR 2.5 billion, up
12.3%. Net sales increased 3.0% when compared to the adjusted
fourth quarter 2008 sales. Net sales at Albert Heijn supermarkets
were EUR 2.3 billion, up 12.4%. Net sales at Albert Heijn
supermarkets increased 3.2% compared to the adjusted fourth quarter
2008 sales. Identical sales at Albert Heijn supermarkets increased
1.2%. Operating income of EUR 168 million (or 6.7% of net sales),
was down EUR 12 million from the fourth quarter 2008, impacted by
EUR 17 million higher pension costs and a non-recurring wage tax
provision of EUR 7 million. Fourth quarter 2008 operating income
included costs of EUR 10 million for the integration of former
Schuitema storesinto Albert Heijn.
For the full year, net sales were EUR 9.8 billion, up 9.7%. Net
sales increased 7.3% when compared to the adjusted full year 2008
sales. Net sales at Albert Heijn supermarkets were EUR 9.0 billion,
up 9.7%. Compared to the adjusted full year 2008 sales, net sales
at Albert Heijn supermarkets increased 7.4%. This was mainly due to
the conversion of former Schuitema stores into the Albert Heijn
format in the second half of 2008. Identical sales at Albert Heijn
supermarkets increased 1.7%. Operating income was EUR 654 million
(or 6.6% of net sales), up EUR 7 million compared to last year,
despite EUR 70 million higher pension costs and a non-recurring
wage tax provision of EUR 7 million. In 2008, operating income
included gains on the sale of assets of EUR 24 million.Also
included in year 2008 operating income were costs of EUR 14 million
for the integration of former Schuitema stores into Albert
Heijn.
Albert/Hypernova (Czech Republic and Slovakia)
For the fourth quarter, net sales decreased 1.8% to EUR 431
million (0.1% at constant exchange rates). When compared to the
adjusted fourth quarter 2008 sales, net sales decreased 7.0% at
constant exchange rates. Sales were negatively impacted by store
closures and downsizings as part of our restructuring program.
Identical sales decreased 1.4% (2.3% excluding gasoline). Operating
loss for the quarter was EUR 16 million, compared to an income of
EUR 9 million last year. Impairments in the quarter were EUR 5
million. Restructuring charges, mainly for the closure of
underperforming stores and downsizing of large hypermarkets in the
Czech Republic, were EUR 10 million for the quarter.
For the full year, net sales decreased 5.0% to EUR 1.7 billion
(0.6% at constant exchange rates). When compared to the adjusted
full year 2008 sales, net sales decreased 2.4% at constant exchange
rates. Identical sales decreased 1.2% (1.2% excluding gasoline).
Operating loss for the year was EUR 76 million, compared to an
income of EUR 1 million last year. Impairments for the full year
were EUR 17 million. Restructuring charges, mainly for the closure
of underperforming stores and downsizing of large hypermarkets in
the Czech Republic, were EUR 24 million. Net costs related to the
rebranding into a single Albert brand were EUR 10 million.
Unconsolidated joint ventures
For the fourth quarter, Ahold's share in income of joint
ventures increased 14.7% to EUR 39 million, driven by better
operating margins, partially offset by higher income taxes at both
ICA and JMR. Ahold's 49% stake in JMR was reclassified from assets
held for sale to investments in joint ventures as of 2009.
For the full year, Ahold's share in income of joint ventures was
down 14.5% to EUR 106 million. The decrease was mainly driven by
ICA, where better operating results were more than offset by higher
income taxes.
Sales and operating margins are summarized as follows:
Identical/comparable sales growth (% year over year)
---------------------------------------------------------------------------
Q4 2009 2009
Q4 2009 identical Q4 2009 2009 identical 2009
identical excluding comparable identical excluding comparable
gasoline gasoline
---------------------------------------------------------------------------
Stop & Shop 1.0% (0.4)% 1.3% 1.6% 2.2% 2.1%
Giant-Landover 2.4% 1.6% 2.9% 3.0% 2.6% 3.5%
Giant-Carlisle 2.8% 1.0% 4.0% 0.3% 2.2% 1.3%
Albert Heijn[1] 1.2% 1.2% 1.7% 1.7%
Albert/Hypernova (1.4)% (2.3)% (1.2)% (1.2)%
---------------------------------------------------------------------------
[1]Identical sales represent the identical sales of Albert Heijn
supermarkets.
Operating margin
Operating margin is defined as operating income as a percentage
of net sales. For a discussion of operating income, see Note 3 to
the summary financial statements.
---------------------------------------------------------------------------
Q4 Q4
2009 2008* 2009 2008*
---------------------------------------------------------------------------
Stop & Shop/Giant-Landover 5.4% 5.1% 4.9% 4.1%
Giant-Carlisle 4.2% 5.4% 4.4% 4.9%
Albert Heijn 6.7% 8.1% 6.6% 7.2%
Albert/Hypernova (3.7)% 2.1% (4.5)% 0.1%
---------------------------------------------------------------------------
Total retail 5.2% 6.0% 4.9% 5.0%
---------------------------------------------------------------------------
* Comparative figures reflect the changes in accounting policies and
retrospective amendments as disclosed in Note 2 to the summary financial
statements.
Financial calendar
Ahold's financial year consists of 52 or 53 weeks and ends on
the Sunday nearest to December 31.
Ahold's 2009 financial year consisted of 53 weeks and ended on
January 3, 2010. The quarters in 2009 were:
First Quarter (16 weeks) December 29, 2008 through April 19, 2009
Second Quarter (12 weeks) April 20 through July 12, 2009
Third Quarter (12 weeks) July 13 through October 4, 2009
Fourth Quarter (13 weeks) October 5, 2009 through January 3, 2010
Ahold's 2010 financial year will consist of 52 weeks and will
end on January 2, 2011. The quarters in 2010 are:
First Quarter (16 weeks) January 4, 2010 through April 25, 2010
Second Quarter (12 weeks) April 26 through July 18, 2010
Third Quarter (12 weeks) July 19 through October 10, 2010
Fourth Quarter (12 weeks) October 11, 2010 through January 2, 2011
Ahold Finance U.S.A., LLC
The annual report for 2009 of Ahold's wholly owned subsidiary
Ahold Finance U.S.A., LLC is available at www.ahold.com.
Cautionary notice
This summary report includes forward-looking statements, which
do not refer to historical facts but refer to expectations based on
management's current views and assumptions and involve known and
unknown risks and uncertainties that could cause actual results,
performance or events to differ materially from those included in
such statements. These forward-looking statements include, but are
not limited to, statements as to Ahold's response to changes in the
economic environment and opportunities in the market, Ahold's
instruments to improve value for customers, the balance between
sales, margins and market share, Ahold's considerations to initiate
the share buyback program, the completion of the share buyback
program, the payment of dividend to shareholders in 2010, Ahold's
targets on sales growth, retail operating margin and credit rating,
Ahold's plans to publish its 2009 Annual Report (including
financial statements) and the expected contents thereof, the
expected net interest expense and capital expenditures in 2010,
Ahold's contingent liability related to BI-LO and BrunoZs leases,
estimates in relation to pension liabilities in the U.S., the
(finalization of the) settlement with the Department of Justice in
the U.S and Ahold's liability in relation thereto, the course and
outcome of the ICA tax claims proceedings, the start of the
operation of the Ukrop's stores and the vesting of shares granted
to Ahold employees and CEB. These forward-looking statements are
subject to risks, uncertainties and other factors that could cause
actual results to differ materially from future results expressed
or implied by the forward-looking statements. Many of these risks
and uncertainties relate to factors that are beyond Ahold's ability
to control or estimate precisely, such as the effect of general
economic or political conditions, fluctuations in exchange rates or
interest rates, increases or changes in competition, Ahold's
ability to implement and complete successfully its plans and
strategies, the benefits from and resources generated by Ahold's
plans and strategies being less than or different from those
anticipated, changes in Ahold's liquidity needs, the actions of
competitors and third parties and other factors discussed in
Ahold's public filings. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this summary report. Neither Koninklijke Ahold N.V.
nor Ahold Finance U.S.A., LLC assumes any obligation to update any
public information or forward-looking statements (referred to) in
this report to reflect subsequent events or circumstances, except
as may be required by securities laws. Outside the Netherlands,
Koninklijke Ahold N.V., being its registered name, presents itself
under the name of "Royal Ahold" or simply "Ahold".
[HUG#1390765]
Ahold Q4/Full Year Results Q4 and 2009:
http://hugin.info/130711/R/1390765/348686.pdf
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