Highlights – second quarter 2013
Zaandam, The Netherlands – Ahold today published its interim report for the second quarter and half year of 2013.
CEO Dick Boer said: “Our business continued to perform well, both in Europe and the United States. We were able to grow sales by 3.0% at constant exchange rates with ongoing high levels of promotional activity. Underlying operating income increased by 5.4% at constant exchange rates, reflecting a strong underlying operating margin of 4.4%. Net income was impacted by the sale of our stake in ICA earlier this year. Our free cash flow continues to be strong at €254 million during the quarter.
“In the United States we saw modest sales growth of 2.0% with an ongoing low level of inflation and volumes remaining under pressure in the food retail sector. We are pleased that we continue to gain market share. Underlying operating margin was 4.2%, supported by improved sourcing and operating efficiencies.
“In the Netherlands sales grew by 5.6%, mainly driven by new stores and ongoing strong sales growth in our online business. Albert Heijn successfully converted another four former C1000/Jumbo stores, bringing the total to 22 and continued to gain market share. Our growth initiatives remain on track with 16 well-performing stores now open in Belgium and with the completion of the nationwide rollout of bol.com pick-up points in our Albert Heijn stores. Underlying operating margin improved to 5.5%, as Albert Heijn’s strong performance more than offset additional pension charges related to decreased discount rates.
“In the current economic environment we remain cautious in our outlook for the balance of the year, as we expect customers to be focused on value and volumes to remain under pressure. We are well on track with our cost saving program and are committed to our Reshaping Retail strategy. “We remain committed to an efficient capital structure, having already increased our share buyback program to two billion by the end of 2014. We expect to make further announcements in this regard before the end of this year.
“The new leadership structure we announced this quarter, with an Executive Committee that represents Ahold’s business and functional leaders at the highest level, will simplify the company’s governance structure and decision-making process and will enable us to accelerate our Reshaping Retail strategy.”
This interim 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 growth initiatives, focus of customers on value, volumes, Ahold’s cost saving program, Reshaping Retail Strategy, new leadership structure, governance structure and decision-making process, Ahold’s overall simplification of processes, its enterprise risk management program, expected costs in connection with the closing of Stop & Shop stores and gas stations in New Hampshire, United States, multi-employer pension plan settlement, conversion of C1000 and Jumbo stores and Stop & Shop’s agreement with NETTI. 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 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 interim report. Ahold does not assume any obligation to update any public information or forward-looking statements in this interim 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.”