Ahold Q4 Sales Drop Amid Contracting US Food Market, Reorganizes European Business

16 Jan 2014 --- Ahold has announced consolidated net sales of €7.5 billion for the fourth quarter of 2013, a decrease of 1.1% at constant exchange rates compared to the fourth quarter of 2012. At current exchange rates net sales were down 4.2%.

For the full year 2013, consolidated net sales were €32.6 billion, an increase of 2.0% at constant exchange rates compared to 2012. At current exchange rates net sales were down 0.2%.

“In the United States sales in the fourth quarter were down 2.1%, reflecting a contracting food market and the sales effect of Hurricane Sandy last year. We continue to build our online business and opened another 31 pick-up points, bringing the total to 120 in the United States. Market share for the year was ahead of 2012 though down slightly in the fourth quarter due to the strong comparative period last year as a result of Hurricane Sandy. Supported by the ongoing progress on our cost reduction program, we expect underlying operating margin to be broadly in line with the performance during the year.”
 
In the Netherlands market conditions remained challenging and sales growth of 0.7% was mainly driven by the strong performance of our online businesses, both at albert.nl and bol.com. The addition of the C1000 stores is on track with 39 stores converted by year end. We continue to be pleased with the performance of our Belgian stores where we operated 19 stores at year end. At Albert Heijn transactions remained broadly stable at an identical base while basket size continued to be under pressure. For the full year market share at Albert Heijn increased slightly, although market share during the quarter was under pressure, similar to the third quarter. We expect the underlying operating margin to be slightly ahead of the prior quarter.
 
Our Slovakian business will no longer be reported under Other Europe but as discontinued operations following the announcement of its divestment. In an ongoing tough environment in the Czech Republic, sales were down 1.9%, while for the year underlying operating margin is expected to continue to show an improving trend.

Ahold has also announced organizational changes in its European business.
 
Following the formation of Ahold's Executive Committee in September 2013, Ahold Europe as a business division will no longer exist. The company will refocus its current Ahold Europe operations and its leadership on building the Albert Heijn business in the Netherlands and adjacent markets through its various formats and channels.
 
Executive Committee member Sander van der Laan will continue to lead Albert Heijn, and report to CEO Dick Boer. The company's Czech Republic business will report directly to CEO Dick Boer. Bol.com will continue to report to Executive Committee Member and Chief Commercial Officer Hanneke Faber and remains an important area of growth for Ahold.
 
Dick Boer, CEO Ahold, said: "The food retail industry continues to evolve rapidly and we see significant opportunities for growth to cater for the changes in the way that our customers shop. Today's decision will bring management closer to running the business. By further strengthening the Albert Heijn brand in both the Netherlands as well as neighboring markets, combined with a growing omni-channel offering via Albert Heijn online, Albert Heijn pick-up points, and Albert Heijn to go, we will be better positioned to meet customer needs and accelerate future growth."
 
Ahold will continue to pursue other important areas of growth within Europe such as further strengthening the market position of Albert in the Czech Republic, the roll-out of Albert Heijn and bol.com in Belgium, and Etos and Gall & Gall in the Netherlands.  
 
At the same time, Ahold is continuing to look for ways to streamline and simplify the organization's support functions across the company, as part of its Simplicity program. This will ensure that the company can maintain and strengthen its successful market positions and continually reinvest resources in its customer proposition and organizational capabilities.