Ahold Q4/Full Year Results Q4 and 2009
(Thomson Reuters ONE) -
Highlights
·        Fourth quarter operating income ? 341 million
·        Fourth quarter net income ? 267 million
·        Full year underlying retail operating margin 5.1%
·        Dividend increased by 28% to ? 0.23 per share
·        Share buyback program of ? 500 million
Amsterdam, the Netherlands - Ahold today published its summary report for the
fourth quarter and full year 2009. CEO John Rishton said: "In the fourth
quarter, we delivered a solid performance in a challenging environment. Sales
and margins continued to be impacted by deflation, trading down and increased
promotions. We successfully managed, however, the balance between sales and
margins, and we improved market share and increased volumes in the Netherlands
and the United States.
"For the full year 2009, our underlying retail operating margin was 5.1%, the
same as 2008 and consistent with our mid-term target of 5%.
"The economic environment remains challenging, but we have a proven ability to
adapt and respond quickly and effectively to changes. We will continue to reduce
costs so that we can invest in our offering to improve value for our customers.
We will manage the balance between sales, margin and market share and use the
strength of our balance sheet to seize opportunities as they arise.
 "Reflecting the confidence in our strategy, our ability to generate cash and
our strong balance sheet we announced a ? 500 million share buyback program to
be completed over the next 12 months and propose a 28% increase in our dividend
to ? 0.23 per common share.
"We reiterate our mid-term targets to achieve a net sales growth of 5% (mainly
from identical sales growth) and a retail operating margin of 5%, while
maintaining an investment grade credit rating".
At current exchange rates, Ahold expects its net interest expense for 2010 to be
in the range of ? 260 million to ? 280 million and its capital expenditure to be
around ? 1.1 billion.
Ahold Press Office: +31 (0)20 509 5291
Group performance
--------------------------------------------------------------------------------
Q4 Q4 % %
(? million) 2009 2008* change 2009 2008* change
--------------------------------------------------------------------------------
Net sales 6,801 6,576 3.4%** 27,925 25,648 8.9%**
Operating income 341 369 (7.6)% 1,297 1,202 7.9%
Income from continuing 273 292 (6.5)% 972 887 9.6%
operations
Net income 267 291 (8.2)% 894 1,082 (17.4)%
--------------------------------------------------------------------------------
* Comparative figures reflect the changes in accounting policies and
retrospective amendments as disclosed in Note 2 to the summary financial
statements.
** At constant exchange rates, net sales increased by 11.0% in Q4 2009 (YTD
2009: 6.0%) and increased 2.1% (YTD 2009: 3.9%) when adjusting for the impact of
the 53rd week.
Fourth quarter 2009 (compared to fourth quarter 2008)
Net sales were ? 6.8 billion, up 3.4%. At constant exchange rates, net sales
increased by 11.0%, positively impacted by an additional week. Net sales
increased by 2.1% at constant exchange rates on an adjusted basis.
Operating income was ? 341 million, down 7.6%. Despite volume growth in all
markets, the margins were impacted by deflation, trading down by customers and
increased promotional activity.
Retail operating income was ? 351 million, a retail operating margin of 5.2%
compared to 6.0% last year. Underlying retail operating margin was 5.4% compared
to 6.1% last year. Corporate Center costs were ? 10 million for the quarter,
down ? 13 million. Excluding the impact of the Company's insurance activities,
Corporate Center costs were ? 16 million, ? 3 million lower.
Income from continuing operations declined 6.5% to ? 273 million, reflecting
lower operating income and higher net financial expense, partly offset by lower
income taxes. Net income was ? 267 million, down ? 24 million.
Cash flows before financing activities were ? 236 million, ? 83 million lower,
mainly due to ? 289 million investment in short-term deposits; higher cash flow
from operating activities and lower capital spend were a partial offset.
Full year 2009 (compared to full year 2008)
Net sales were ? 27.9 billion, up 8.9%. At constant exchange rates, net sales
increased by 6.0%. Net sales were up 3.9% at constant exchange rates on an
adjusted basis.
Operating income was ? 1.3 billion, up 7.9%, despite higher impairments (? 26
million) and lower gains on sale of assets (? 39 million). Lower restructuring
and related charges (? 13 million) and one-off net insurance results (? 16
million) were a partial offset.
Retail operating income was ? 1.4 billion, a retail operating margin of 4.9%,
compared to 5.0% last year. Underlying retail operating margin was 5.1% (2008:
5.1%). Corporate Center costs were ? 63 million, down ? 28 million. Excluding
the impact of the Company's insurance activities, Corporate Center costs were ?
74 million, down ? 8 million.
Income from continuing operations was up 9.6% to ? 972 million, reflecting a
higher operating income and lower income taxes, partly offset by higher net
financial expense and lower share in income of joint ventures. Income taxes were
lower due to, amongst other items, the recognition of ? 101 million of deferred
tax assets, primarily arising from U.S. net operating lossescarried over from
previous years. Net income of ? 894 million was down ? 188 million, impacted
significantly by discontinued operations. Discontinued operations in 2009
included a net provision of ? 62 million, representing Ahold's estimate of
obligations under the lease guarantees of its former subsidiaries BI-LO and
Bruno's, whereas in 2008 it included a ? 161 million gain related to the
divestment of Schuitema.
Cash flows before financing activities were ? 939 million, ? 332 million lower
than last year, which included net proceeds from divestments, primarily
Schuitema. Furthermore, cash flows before financing activities in 2009 included
? 289 million of investment in short-term deposits and ? 112 million of
additional contributions to pension plans. Â Lower capital spend of ? 249 million
was a partial offset.
Performance by segment
Stop & Shop/Giant-Landover
For the fourth quarter, net sales were $ 4.4 billion, up 10.5%. Net sales
increased 1.8% when compared to the adjusted fourth quarter 2008 sales.
Identical sales were up 1.0% at Stop & Shop (down 0.4% excluding gasoline) and
up 2.4% at Giant-Landover (1.6% excluding gasoline). Operating income was $ 238
million (or 5.4% of net sales), up $ 31 million. Operating income was negatively
impacted by impairment charges of $ 4 million and restructuring and related
charges of $ 3 million. A one-off net income of $ 3 million related to pensions
was a partial offset. Last year fourthquarter operating income included
impairment losses of $ 5 million and restructuring and related charges of $ 12
million, consisting of a loss as a result of withdrawing from a multi-employer
pension plan and store closure costs.
For the full year, net sales were $ 17.9 billion, up 4.6%. Net sales increased
2.6% when compared to the adjusted full year 2008 sales. Identical sales were up
1.6% at Stop & Shop (2.2% excluding gasoline) and up 3.0% at Giant-Landover
(2.6% excluding gasoline). Operating income was $ 869 million (or 4.9% of net
sales), up $ 168 million. Included in the operating income were impairments of $
22 million, a non-recurring rent charge of $ 15 million and one-off net charges
related to pensions of $ 6 million. These were partly offset by a $ 28 million
release of insurance provisions. Last year, restructuring, severance and related
charges were $ 44 million, impairments were $ 15 million and gains on the sale
of assets were $ 30 million. Furthermore, 2008 included one-off rebranding costs
of $ 8 million.
Giant-Carlisle
For the fourth quarter, net sales increased 15.0% to $ 1.3 billion. Net sales
increased 6.0% when compared to the adjusted fourth quarter 2008 sales.
Identical sales increased 2.8% (1.0% excluding gasoline). Operating income was $
54 million (or 4.2% of net sales), down $ 6 million compared to the same period
last year. Restructuring and related charges of $ 1 million were recognized in
the fourth quarter of 2009.
For the full year, net sales were $ 5.0 billion, up 4.6%. Net sales increased
2.6% when compared to the adjusted full year 2008 sales. Identical sales
increased 0.3% (2.2% excluding gasoline). Operating income was $ 218 million (or
4.4% of net sales), down $ 15 million compared to last year. Operating income
included a $ 4 million release of insurance provisions, partly offset by
restructuring and related charges of $ 1 million. In 2008, operating income
included restructuring, severance and related charges of $ 11 million.
Albert Heijn
For the fourth quarter, net sales were ? 2.5 billion, up 12.3%. Net sales
increased 3.0% when compared to the adjusted fourth quarter 2008 sales. Net
sales at Albert Heijn supermarkets were ? 2.3 billion, up 12.4%. Net sales at
Albert Heijn supermarkets increased 3.2% compared to the adjusted fourth quarter
2008 sales. Identical sales at Albert Heijn supermarkets increased 1.2%.
Operating income of ? 168 million (or 6.7% of net sales), was down ? 12 million
from the fourth quarter 2008, impacted by ? 17 million higher pension costs and
a non-recurring wage tax provision of ? 7 million. Fourth quarter 2008 operating
income included costs of ? 10 million for the integration of former Schuitema
storesinto Albert Heijn.
For the full year, net sales were ? 9.8 billion, up 9.7%. Net sales increased
7.3% when compared to the adjusted full year 2008 sales. Net sales at Albert
Heijn supermarkets were ? 9.0 billion, up 9.7%. Compared to the adjusted full
year 2008 sales, net sales at Albert Heijn supermarkets increased 7.4%. This was
mainly due to the conversion of former Schuitema stores into the Albert Heijn
format in the second half of 2008. Identical sales at Albert Heijn supermarkets
increased 1.7%. Operating income was ? 654 million (or 6.6% of net sales), up ?
7 million compared to last year, despite ? 70 million higher pension costs and a
non-recurring wage tax provision of ? 7 million. In 2008, operating income
included gains on the sale of assets of ? 24 million.Also included in year 2008
operating income were costs of ? 14 million for the integration of former
Schuitema stores into Albert Heijn.
Albert/Hypernova (Czech Republic and Slovakia)
For the fourth quarter, net sales decreased 1.8% to ? 431 million (0.1% at
constant exchange rates). When compared to the adjusted fourth quarter 2008
sales, net sales decreased 7.0% at constant exchange rates. Sales were
negatively impacted by store closures and downsizings as part of our
restructuring program. Identical sales decreased 1.4% (2.3% excluding gasoline).
Operating loss for the quarter was ? 16 million, compared to an income of ? 9
million last year. Impairments in the quarter were ? 5 million. Restructuring
charges, mainly for the closure of underperforming stores and downsizing of
large hypermarkets in the Czech Republic, were ? 10 million for the quarter.
For the full year, net sales decreased 5.0% to ? 1.7 billion (0.6% at constant
exchange rates). When compared to the adjusted full year 2008 sales, net sales
decreased 2.4% at constant exchange rates. Â Identical sales decreased 1.2% (1.2%
excluding gasoline). Operating loss for the year was ? 76 million, compared to
an income of ? 1 million last year. Impairments for the full year were ? 17
million. Restructuring charges, mainly for the closure of underperforming stores
and downsizing of large hypermarkets in the Czech Republic, were ? 24 million.
Net costs related to the rebranding into a single Albert brand were ? 10
million.
Unconsolidated joint ventures
For the fourth quarter, Ahold's share in income of joint ventures increased
14.7% to ? 39 million, driven by better operating margins, partially offset by
higher income taxes at both ICA and JMR. Ahold's 49% stake in JMR was
reclassified from assets held for sale to investments in joint ventures as of
2009.
For the full year, Ahold's share in income of joint ventures was down 14.5% to ?
106 million. The decrease was mainly driven by ICA, where better operating
results were more than offset by higher income taxes.
Sales and operating margins are summarized as follows:
Identical/comparable sales growth (% year over year)
------------------------------------------------------------------------------------------
Q4 2009 2009
 Q4 2009  identical  Q4 2009  2009  identical  2009
identical excluding comparable identical excluding comparable
gasoline gasoline
------------------------------------------------------------------------------------------
Stop & Shop 1.0% Â (0.4)% Â 1.3% Â 1.6% Â 2.2% Â 2.1%
Giant-Landover 2.4% Â 1.6% Â 2.9% Â 3.0% Â 2.6% Â 3.5%
Giant-Carlisle 2.8% Â 1.0% Â 4.0% Â 0.3% Â 2.2% Â 1.3%
Albert Heijn[1] 1.2% Â 1.2% Â Â Â 1.7% Â 1.7%
Albert/Hypernova (1.4)% Â (2.3)% Â Â Â (1.2)% Â (1.2)%
------------------------------------------------------------------------------------------
[1]Identical sales represent the identical sales of Albert Heijn supermarkets.
Operating margin
Operating margin is defined as operating income as a percentage of net sales.
For a discussion of operating income, see Note 3 to the summary financial
statements.
------------------------------------------------------------------------------
 Q4  Q4
2009 2008* 2009 2008*
------------------------------------------------------------------------------
Stop & Shop/Giant-Landover  5.4%  5.1%  4.9%  4.1%
Giant-Carlisle 4.2% Â 5.4% Â 4.4% Â 4.9%
Albert Heijn 6.7% Â 8.1% Â 6.6% Â 7.2%
Albert/Hypernova (3.7)% Â 2.1% Â (4.5)% Â 0.1%
------------------------------------------------------------------------------
Total retail 5.2% Â 6.0% Â 4.9% Â 5.0%
------------------------------------------------------------------------------
* Comparative figures reflect the changes in accounting policies and
retrospective amendments as disclosed in Note 2 to the summary financial
statements.
Financial calendar
Ahold's financial year consists of 52 or 53 weeks and ends on the Sunday nearest
to December 31.
Ahold's 2009 financial year consisted of 53 weeks and ended on January 3, 2010.
The quarters in 2009 were:
First Quarter (16 weeks) December 29, 2008 through April 19, 2009
Second Quarter (12 weeks) April 20 through July 12, 2009
Third Quarter (12 weeks) July 13 through October 4, 2009
Fourth Quarter (13 weeks) October 5, 2009 through January 3, 2010
Ahold's 2010 financial year will consist of 52 weeks and will end on January
2, 2011. The quarters in 2010 are:
First Quarter (16 weeks) Â Â January 4, 2010 through April 25, 2010
Second Quarter (12 weeks) Â Â April 26 through July 18, 2010
Third Quarter (12 weeks) Â Â July 19 through October 10, 2010
Fourth Quarter (12 weeks) Â Â October 11, 2010 through January 2, 2011
Ahold Finance U.S.A., LLC
The annual report for 2009 of Ahold's wholly owned subsidiary Ahold Finance
U.S.A., LLC is available atwww.ahold.com
Cautionary notice
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, statements as to Ahold's response to changes in the economic
environment and opportunities in the market, Ahold's instruments to improve
value for customers, the balance between sales, margins and market share,
Ahold's considerations to initiate the share buyback program, the completion of
the share buyback program, the payment of dividend to shareholders in 2010,
Ahold's targets on sales growth, retail operating margin and credit rating,
Ahold's plans to publish its 2009 Annual Report (including financial statements)
and the expected contents thereof, the expected net interest expense and capital
expenditures in 2010, Ahold's contingent liability related to BI-LO and Bruno´s
leases, estimates in relation to pension liabilities in the U.S., the
(finalization of the) settlement with the Department of Justice in the U.S and
Ahold's liability in relation thereto, the course and outcome of the ICA tax
claims proceedings, the start of the operation of the Ukrop's stores and the
vesting of shares granted to Ahold employees and CEB. 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. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date of this summary report. Neither Koninklijke Ahold N.V. nor Ahold Finance
U.S.A., LLC assumes any obligation to update any public information or
forward-looking statements (referred to) in this report to reflect subsequent
events or circumstances, except as may be required by securities laws. Outside
the Netherlands, Koninklijke Ahold N.V., being its registered name, presents
itself under the name of "Royal Ahold" or simply "Ahold".
[HUG#1390765]
Ahold Q4/Full Year Results Q4 and 2009: http://hugin.info/130711/R/1390765/348686.pdf
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Datum: 04.03.2010 - 06:46 Uhr
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