Remarks by Ahold President & CEO Cees van der Hoeven
Commenting on the results, Ahold President & CEO Cees van der Hoeven said: ‘This is the 13th consecutive year in which our net earnings have grown significantly. Ahold has always met or exceeded expectations during this 13 year period and we intend to continue to do so. Results for the year 2000 indicate that we are on the right track with our multi-channel strategy. We have seen strong organic sales (6.6%) and organic earnings (13.6%) growth, while all new acquisitions have performed very well. We planned to double the size of our company between 1999 and 2002, but it now looks as if we will almost reach that goal by the end of 2001, with sales expected to be about Euro 65 billion. We look forward to the future with confidence and excitement.’
Fourth Quarter 2000 net earnings rise 56% to Euro 370 million
In the fourth quarter of 2000, net earnings rose 56% to Euro 370 million (1999: Euro 237 million). Earnings per common share rose 29% to Euro 0.46 (1999: Euro 0.36). Earnings in Euro in this quarter were impacted by the higher average exchange rate of the U.S. dollar. At a constant U.S. dollar exchange rate, earnings per share rose 15%.
Fourth-quarter consolidated sales rose 78% to Euro 15.3 billion (1999: Euro 8.6 billion), partly reflecting the consolidation of the ICA Group and U.S. Foodservice. Organic sales growth for the quarter was 6.9%.
Operating results rose 75% to Euro 734 million (1999: Euro 420 million) and amounted to 4.8% of net sales (1999: 4.9%). Operating cash flow (EBITDA) rose 66% to Euro 1.1 billion (1999: Euro 641 million), 7.0% of net sales (1999: 7.5%).
In the United States, sales rose 54% to USD 7.6 billion (1999: USD 4.9 billion), partly due to the consolidation of U.S. Foodservice, Golden Gallon and Sugar Creek. The retail operating companies generated strong identical sales growth (3.2%) and comparable sales growth (4.1%).
Operating results rose 35% to USD 361 million (1999: USD 267 million), which includes the consolidation of U.S. Foodservice. The transition of the Edwards stores to the Stop & Shop format was completed in the fourth quarter and approximately USD 15 million was charged to operating results. Internet grocer Peapod recorded operating losses of USD 22 million.
In Europe, sales rose 85% to Euro 5.0 billion (1999: Euro 2.7 billion), reflecting in part the consolidation of the ICA Group in Scandinavia and the acquisition by Schuitema of A&P in The Netherlands. Operating results rose 66% to Euro 243 million (1999: Euro 147 million), in part due to the ICA Group. In The Netherlands, Albert Heijn had a strong fourth quarter. In the Czech Republic, operating results improved sharply. Portugal recorded lower results than last year. In Poland, operating losses are attributed to the high cost of supermarket and hypermarket openings.
In Latin America, sales rose 47% to Euro 1.4 billion (1999: Euro 981 million), partially reflecting the consolidation of La Fragua in Guatemala. All operating companies generated higher sales, specifically Bompreço in Brazil and Disco in Argentina. Operating results rose 178% to Euro 90 million (1999: Euro 33 million), partly due to the consolidation of La Fragua. Operating results at Bompreço and Disco were sharply higher. Santa Isabel achieved positive operating results for the fourth quarter.
In Asia, sales rose 3% to Euro 105 million (1999: Euro 101 million). Operating losses were reduced to Euro 4 million (1999 loss: Euro 6 million). Operating results were positive in Thailand, while Malaysia and Indonesia recorded marginal operating losses.
Corporate costs amounted to Euro 11 million (1999: Euro 11 million).
Net financial expense increased to Euro 210 million (1999 expense: Euro 87 million), mainly reflecting the joint venture with the ICA Group and the acquisition of U.S. Foodservice. The higher average exchange rate of the U.S. dollar also contributed to the increase.
The tax rate was 23.3% (1999: 26.7%).
2000 dividend proposal
It is proposed that a dividend of Euro 0.63 (1999: Euro 0.49) per common share of Euro 0.25 par value be paid from the 2000 results; Euro 0.18 of this amount has already been paid as interim dividend. Stockholders can choose to receive the 2000 final dividend of Euro 0.45 in the form of a cash pay-out or 2% in common shares, charged to the additional paid-in capital. This dividend will be made payable as of May 23, 2001.
Annual General Meeting of Stockholders
The General Meeting of Stockholders will be held at the Circus Theater in The Hague on Tuesday May 15, 2001 at 1:30 pm. The 2000 annual report will be available as of April 9, 2001.
Outlook for 2001
The Corporate Executive Board expects that sales and operating results will improve in all trade areas in 2001, reflecting healthy organic growth as well as the contribution of recent acquisitions. It is anticipated that net earnings will be strongly higher. Earnings per share, excluding currency fluctuations, extraordinary items and goodwill amortization are expected to be 15% higher than in 2000.
Definition of terms:
Organic sales exclude sales from acquisitions consolidated for less than a year.
Identical sales compare sales from exactly the same stores. Comparable sales are identical sales plus sales from replacement stores.
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