ZAANDAM, Netherlands, June 14, 2005 (PRIMEZONE) -- "Ahold strengthens value proposition today to invest in profitable growth tomorrow, " Anders Moberg, Ahold President & CEO
Our highlights:
-- Operating income Q1 2005 in line with Q1 2004
-- Net income Q1 2005 substantially lower than Q1 2004 mainly due to remeasurement ICA put option in Q1 2004
-- Turnaround U.S. Foodservice on track
-- Continuing to simplify the way we run our business
-- More divestments successfully completed this quarter
-- Further reduction of net debt
-- Quarterly reporting now under IFRS
Financial highlights Q1 2005:
- Net sales Q1 2005 of EUR 13.0 billion, a decrease of 1% compared to Q1 2004. Net sales increased by 2.6% excluding currency impact
- Operating income Q1 2005 of EUR 346 million (Q1 2004: EUR 349 million)
- Net income Q1 2005 of EUR 134 million (Q1 2004: EUR 298 million)
- Net cash from operating activities Q1 2005 of EUR 264 million (Q1 2004: EUR 188 million)
- Net debt in Q1 2005 declined by EUR 0.6 billion or 8.6%
Our key priorities for 2005:
- Successful execution of our Road to Recovery strategy including completion of our divestment program
- Implementation of our retail business model to drive sales volume throughout Ahold
- Further improve operational performance U.S. Foodservice
- Formulation of our 2006+ strategy following the Road to Recovery
Please open the link in order to view the full press release regarding the first quarter results of Ahold: http://hugin.info/130711/R/998382/152090.pdf
Forward-looking Statements Notice
Certain statements in this press release are forward-looking statements within the meaning of the U.S. federal securities laws. These statements include, but are not limited to, statements as to investing to meet customer needs and creating profitable growth; statements as to our key priorities for 2005, including successful execution of our Road to Recovery strategy, completion of our divestment program, implementation of our retail business model (and its impact on sales volume throughout Ahold), further improving operational performance, restoring the profitability and developing the longer-term potential of U.S. Foodservice and steps being taken to achieve this, including working with vendors to improve buying terms and product offerings, improving our street selling strategies and developing our portfolio of private brands, improving efficiency and service performance of U.S. Foodservice's warehouse operations, inbound logistics and outbound logistics and continuing to make progress on the USFAST project, and formulation of our future strategy following the Road to Recovery; statements regarding our plans to publish our second quarter results on September 7, 2005; statements as to establishing a platform for profitable growth as a result of our Road to Recovery strategy; statements with respect to our simplifying the way we run our business and its favorable effect on our cost base, efficiency and customer focus, including the restructuring of our retail arenas and its impact; statements as to improving our value proposition to customers (including at U.S. Foodservice); statements as to our expectations as to U.S. Foodservice's operating margin before impairment of goodwill exceeding 1.7% no later than 2006, our intention not to divest U.S. Foodservice, that we intend to develop the capabilities and performance of U.S. Foodservice to its full potential which we believe is beyond its historical performance levels and our intention to issue in the fall of 2005 additional guidance regarding U.S. Foodservice's long-range operating income; statements as to expected investment levels in stores; statements as to our food retail operating targets for full year 2006 of 5% net sales growth, 5% operating margin and 14% return on net assets; statements as to the extension of our partnership with Staples to all our Stop & Shop and Giant-Landover stores; statements regarding the launching of 16 new Nature's Promise produce items; statements as to the expected benefits of the strategic operating plan for Giant-Landover, including improved cost structure, net sales and gross margin; statements as to the expected closing of three Tops stores; statements regarding the expected continuation of the price repositioning strategy at Albert Heijn and the re-investment of cost savings to improve its value proposition; statements as to the expected benefits of the simplified business model for our Central Europe Arena, including the impact on its cost structure and customer focus; the expected improvement in competitiveness of ICA from staff and cost reductions; statements as to our plans to prepare our consolidated financial statements in accordance with IFRS, the expectation that IFRS as used by us in preparing our interim financial information will continue to be in force as of year end 2005, the impact of compliance with IFRS and IAS 39 on our unaudited consolidated interim financial information and our plans to include the reconciliation between IFRS and US GAAP in our 2005 annual report; statements as to the accounting policies for segment reporting that we expect to use for our 2005 consolidated financial statements; statements as to the timing of payments with respect to the balance of the purchase price of BI-LO and Bruno's; statements as to the timing of the closing of the sale of our Tops convenience stores in the United States; and statements regarding use of proceeds under our multi-currency facility.
These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond our ability to control or estimate precisely, such as the effect of general economic or political conditions, increases or changes in competition in the markets in which our subsidiaries and joint ventures operate, the actions of competitors, vendors, unions and other third parties, the actions of our customers, including their acceptance of new products and private label products and their reactions to new store formats, store locations, changes in our pricing policies and product offering and our other strategies, our ability to implement and complete successfully our plans and strategies and to meet our targets or delays or additional costs encountered in connection with their implementation or achievement, the benefits from and resources generated by our plans and strategy being less than or different from those anticipated, the inability to reduce costs or realize cost savings in the manner or to the extent planned, the reaction of our associates to operational and other changes in the working environment, our ability to reach agreements acceptable to us and/or to find buyers for the remaining operations we are divesting, the inability to address, or delays in addressing, legal obstacles to the consummation of the announced or expected divestments and store and facility closings, the inability to satisfy, or delays in satisfying, other closing conditions with respect to the sale of the Tops convenience stores or other expected divestments, the costs or other results of pending or future investigations or legal proceedings, actions of courts, law enforcement agencies, government agencies and third-parties, the diversion of management's attention from implementing our plans and strategy, difficulties or delays in the implementation of new operational improvements and systems, unanticipated delays in the formulation of the 2006 strategy, unanticipated delays in publishing out second quarter results, unforeseen impacts of IFRS, including changes to IFRS, IAS 39 or other accounting requirements, or changes to the application or interpretation of IFRS prior to year end 2005, as a result of the review and endorsement by the EU or amendment by the IASB of interpretative guidance, unanticipated delays in completing the reconciliation between IFRS and US GAAP in our 2005 annual report, difficulties in realizing on future payments owed by the purchasers of BI-LO and Bruno's, unanticipated needs for additional store investment, our liquidity needs exceeding expected levels, fluctuations in exchange rates or interest rates, the inability to satisfy any of the conditions for borrowing under the new credit facility and other factors discussed in our public filings. Many of these and other risk factors are detailed in Ahold's publicly filed reports. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release, except as may be required by applicable securities laws. Outside The Netherlands, Koninklijke Ahold N.V., being its registered name, presents itself under the name of "Royal Ahold" or simply "Ahold."