Highlights Fourth quarter
- Sales €7.5 billion, down 1.1% at constant exchange rates
- Underlying operating income €320 million, down 7.5% at constant exchange rates
- Underlying operating margin 4.3% (Q4 2012: 4.6%)
- Operating income €311 million, up 3.8 at constant exchange rates
- Sales €32.6 billion, up 2.0% at constant exchange rates
- Online net sales over €1 billion, up 16.9% on an identical basis
- Underlying operating income €1,379 million, down 0.5% at constant exchange rates
- Net income €2,537 million, of which €1,751 million related to ICA
- Free cash flow €1,109 million, up 5.5%
- Dividend increased by 7% to €0.47 per share
Amsterdam, The Netherlands – Ahold today published its summary report for the fourth quarter and full year of 2012.
CEO Dick Boer said: “Our businesses continued to perform well in the fourth quarter. We grew sales and gained market share in all our markets. Underlying operating income increased, excluding €199 million of impairments and non-recurring items related to pensions and restructuring charges.
“In 2012 we began to reap the benefits of the Reshaping Retail strategy, actively leveraging changing consumer needs and pursuing growth opportunities, in both existing and new markets. We delivered another year of solid financial performance. At constant exchange rates, net sales grew 3.5% and our underlying operating margin was 4.3% in spite of the challenging market conditions. Free cash flow was at a record of €1.2 billion, reflecting our strong cash generating capacity. We are pleased with our market share gains in an ongoing intensely competitive environment in all our major markets.
“During the year, customers were focused on price and promotions, without compromising on quality. In response, we were able to simplify our business and save costs so that we could invest more into offering great value to our customers. We were able to increase the target for our 2012-2014 cost reduction program from €350 million to €600 million by further driving our efforts to simplify our business where we see opportunities, such as optimizing our commercial processes and driving own-brand profit.
“As part of our strategy we are broadening our offering to customers. Our U.S. businesses are improving their own-brand product lines to give customers more choices at different price points to fit their budgets. We are building our online business on both continents to give customers more shopping alternatives, and we continued to achieve double-digit online sales growth in food. Our acquisition of online retailer bol.com is enabling us to provide Dutch and Belgian customers with a far wider selection of non-food products. Customers appreciate the convenience of the pickup points we opened during the year, including the first Peapod pickup points in the United States, and our first pickup points in the Netherlands.
“We expanded our geographic reach during the year, by acquiring and converting 15 Genuardi’s stores to the Giant Carlisle banner in the Philadelphia area in the United States. We agreed to transfer 82 C1000/Jumbo stores from Jumbo and converted the first 15 into the Albert Heijn format in the Netherlands. We also opened nine more supermarkets in Belgium, bringing the total to eleven. In Germany Albert Heijn opened its first three convenience stores.
“On February 11th we announced that we had reached an agreement with Hakon Invest regarding the sale of our 60% stake in ICA for SEK 21.2 billion, including ICA’s 2012 dividend of SEK 1.2 billion and will continue to focus on businesses we control in order to create value for our shareholders. This transaction is expected to be completed in the middle of the year.
“We will continue our balanced approach to capital allocation, investing in growth while providing attractive returns to shareholders. We propose a 10% increase in our dividend to €0.44 per share, a pay-out of 44% of adjusted income from continuing operations. In addition, our strong liquidity enables us to launch a new €500 million share buyback program for the next 12 months.
“We remain cautious in our outlook for 2013 but similar to 2012 we are committed to deliver on our Reshaping Retail strategy. We will stay focused on simplifying our business to reduce costs so that we can continue to improve our offering and the value we provide to our customers. We are committed to invest in growth while maintaining a return on capital employed in the top quartile of the sector. We believe our businesses are well positioned for the future and are committed to offering our customers a better shopping experience in our stores and online every day.”
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, expectations on market conditions, and statements as to the progress and deliverance of Ahold’s strategies and cost reduction and simplification programs, capital allocation, investment in growth, and returns to shareholders by dividend, share buyback or otherwise, Ahold’s response to market opportunities, better choice and more shopping alternatives, new focus on the development of IT applications, interest, capital expenditure, adoption of new accounting policies, the synergy from the combination of operations, the expansion of Ahold’s geographic reach, and the conversion of C1000/Jumbo stores into Albert Heijn stores. 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 successfully implement and complete 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 and other disclosures. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this summary report. Ahold does not assume any obligation to update any public information or forward-looking statements in this summary report to reflect subsequent events or circumstances, except as may be required by applicable laws. Outside the Netherlands, Koninklijke Ahold N.V., being its registered name, presents itself under the name of “Royal Ahold” or simply “Ahold.”Back to index