Ahold 1997 Net Earnings Rise Sharply by 48% to NLG 933.8 Million.ZAANDAM, The Netherlands--(BUSINESS WIRE)--March 10, 1998-- Highlights -- Ahold a·hold n. Hold; grip: "I knew I could make it all right if I got . . . back to the hotel and got ahold of that bottle of brandy" Jimmy Breslin. 1997 net earnings rise 48% to NLG NLG The ISO 4217 currency code for the Dutch Guilder. 933.8 million -- Earnings per share rise 25% to NLG 1.77 -- Significantly higher net earnings anticipated for 1998 -- Announcement of offering of 30 million common shares 1997 RESULTS Royal Ahold (NYSE NYSE See: New York Stock Exchange : AHO) achieved net earnings in 1997 of NLG 933.8 million (1996: NLG 632.4 million), an increase of 48%. After deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. of the preferred dividend preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) , net earnings totaled NLG 915.5 million (1996: NLG 622.9 million). Earnings per common share rose in 1997 by NLG 0.36 to NLG 1.77, an increase of 25%. The average number of common shares outstanding amounted to 518.6 million. The sharp growth in net earnings was mainly attributable to the full year consolidation of Stop & Shop versus only 23 weeks in 1996. Improved operating results elsewhere in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and in The Netherlands, Portugal and Brazil also contributed significantly to the increase in net earnings. The results in guilders were positively influenced by the higher average exchange rate of the US dollar in 1997 compared to 1996 (NLG 1.95 vs 1.69). Currency fluctuations, especially the higher dollar rate, increased sales by NLG 3.8 billion and net earnings by NLG 74.7 million. At constant exchange rates, the growth in earnings per share amounted to 15%. 1997 sales up 38% to NLG 50.6 billion Consolidated sales in guilders amounted to NLG 50.6 billion (1996: NLG 36.5 billion), an increase of 38%. Sales in the United States rose to USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 14.3 billion (1996: USD 11.2 billion), a 27% increase. All US operating companies operating company A business that engages in transactions with outsiders. achieved higher sales. In particular, Stop & Shop and BI-LO generated significantly higher sales. Had Stop & Shop been consolidated for the full year 1996, the sales increase in the US would have totaled 7%. In The Netherlands, sales amounted to NLG 15.9 billion (1996: NLG 15.0 billion), an increase of 7%. Albert Heijn Albert Heijn B.V. is a supermarket chain founded in 1887 in Oostzaan, the Netherlands. It is named after Albert Heijn senior, the founder of the first store which was a small grocery store in Oostzaan. sales grew 5% and the Schuitema wholesale organization increased sales by 9%. Ahold specialty stores Noun 1. specialty store - a store that sells only one kind of merchandise shop, store - a mercantile establishment for the retail sale of goods or services; "he bought it at a shop on Cape Cod" Etos and Gall & Gall also achieved sales increases, as was the case for Ahold's Institutional Food Supply company. The market shares of Albert Heijn, Schuitema, Etos and Gall & Gall continued to grow. In Other European Countries (Portugal, Spain, the Czech Republic Czech Republic, Czech Česká Republika (2005 est. pop. 10,241,000), republic, 29,677 sq mi (78,864 sq km), central Europe. It is bordered by Slovakia on the east, Austria on the south, Germany on the west, and Poland on the north. and Poland), sales amounted to NLG 3.2 billion (1996: NLG 2.5 billion), a 26% rise. Pingo Doce Pingo Doce is the largest supermarket chain in Portugal, owned by Jerónimo Martins. In the 1990s, Jerónimo Martins acquired Brazilian supermarket chain Sé Supermercados, which became the Brazilian equivalent to Pingo Doce. in Portugal, Euronova in the Czech Republic and Ahold's Polish activities contributed to sales growth. In Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. (Brazil), Bompreco achieved sales of NLG 2.6 billion. Asia Pacific sales amounted to NLG 0.9 billion and were slowed by the financial crisis in the region in the second half of the year. Operating results grow 48% to NLG 1.8 billion Consolidated 1997 operating results amounted to NLG 1.8 billion (1996: NLG 1.2 billion), a 48% rise. Operating results in the United States totaled USD 574.2 million (1996: USD 354.2 million), a 62% rise. This sharp increase was largely influenced by the full year consolidation of Stop & Shop. The higher operating results of BI-LO and Stop & Shop also contributed significantly to the increase. Giant Food Stores (including Edwards) also generated higher operating results. Tops (including Finast) produced lower results than in 1996, primarily attributable to the integration of Finast into Tops. In The Netherlands, operating results amounted to NLG 606.8 million (1996: NLG 551.8 million), a 10% rise. Albert Heijn and Schuitema achieved markedly higher operating results due to increased sales. Ahold's Institutional Food Supply company also generated sharply higher results. At Ahold Specialty Stores, results were under pressure as a result of operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. at Jamin and lower operating results at Gall & Gall. Etos achieved sharply higher operating results compared to 1996. Ahold's production companies also achieved higher operating results. In Other European Countries, operating results amounted to NLG 179.0 million (1996: NLG 165.5 million), an 8% rise. In Portugal, significant growth in operating results was achieved due to higher sales and effective margin and cost control. Operating results in the Czech Republic, although positive, were lower than last year, mainly attributable to the summer floods. Start-up losses in Poland and Spain were charged to the operating results of Other European Countries. In Latin America (Brazil), Bompreco's operating results totaled NLG 80.5 million, entirely in line with expectations. The 1997 acquisition of Bompreco Bahia (formerly SuperMar) gave rise to one-time charges. In Asia Pacific, operating losses amounted to NLG 78.6 million (1996 loss: NLG 20.6 million), reflecting start-up costs and an unfavorable economic climate. Corporate costs amounted to NLG 71.3 million (1996: NLG 53.3 million). The higher costs are primarily attributable to the development and start-up of new activities. Net financial expense Net financial expense totaled NLG 473.8 million (1996: NLG 318.5 million). This increase is largely due to the consolidation of the interest expenses of Stop & Shop and partly attributable to the higher dollar rate. Tax rate The tax rate, expressed as a percentage of pre-tax earnings, rose to 28% (1996: 27%). The increase resulted from changes in the composition of pre-tax earnings. Equity ratio Group equity, expressed as a percentage of the balance sheet total, amounted to 19.3% (at 1996 year-end: 18.5%). Capital accounts totaled 21.4% of the balance sheet total (at 1996 year-end: 21.2%.) Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. amounted to NLG 3.1 billion (at 1996 year-end NLG 2.4 billion). Added to stockholders' equity were the 1997 retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. and the paid-in capital Paid-in capital Capital received from investors in exchange for stock, but not stock from capital generated from earnings or donated. This account includes capital stock and contributions of stockholders credited to accounts other than capital stock. attributable to optional stock dividends and employee options rights. Goodwill paid at the time of acquisitions amounting to NLG 390.4 million was charged entirely to stockholders' equity. 1997 fourth quarter net earnings In the fourth quarter of 1997 (12 weeks), net earnings totaled NLG 282.3 million (1996: NLG 216.3 million), a 31% rise. Earnings per common share were NLG 0.53 (1996: NLG 0.41), a 29% rise. Earnings in guilders in this quarter were also positively influenced by the higher average exchange rate of the US dollar (NLG 1.98 vs NLG 1.72). At constant exchange rates, earnings per share grew by 20%. The considerable growth in net earnings reflects operating results which increased in all trade areas, with the exception of Asia Pacific. Consolidated sales in the 1997 fourth quarter amounted to NLG 12.6 billion (1996: NLG 10.0 billion), a 27% increase. Excluding the impact of the higher average dollar exchange rate, sales would have increased 18%. In the United States, sales totaled USD 3.4 billion (1996: USD 3.2 billion), an increase of 5%. In The Netherlands, sales rose by 7% to NLG 3.9 billion (1996: NLG 3.6 billion). In Other European Countries, sales went up to NLG 943.2 million (1996: NLG 760.0 million), a rise of 24%. Sales in Latin America (Brazil) totaled NLG 879.6 million and in Asia Pacific NLG 201.3 million. Consolidated operating results in the 1997 fourth quarter amounted to NLG 538.1 million (1996: NLG 417.6 million), an increase of 29%. In the United States, operating results totaled USD 149.2 million (1996: USD 130.0 million), an increase of 15%. Stop & Shop and Giant Food Stores achieved significantly higher operating results. BI-LO's operating results were almost identical to the exceptionally good 1996 operating results. Operating results at Tops were lower compared to the 1996 fourth quarter. In The Netherlands, operating results increased by 7.6% to NLG 173.5 million (1996: NLG 161.3 million). Compared to the 1997 fourth quarter, the 1996 fourth quarter was influenced positively by NLG 10 million due to a one-time incidental Contingent upon or pertaining to something that is more important; that which is necessary, appertaining to, or depending upon another known as the principal. Under Workers' Compensation statutes, a risk is deemed incidental to employment when it is related to whatever a gain. Albert Heijn, Schuitema, Etos and Ahold's Institutional Food Supply all achieved higher operating results. Gall & Gall's operating results were lower and Jamin sustained marginal operating losses. Operating results for the production companies were higher than in the corresponding 1996 period. In Other European Countries, operating results amounted to NLG 69.1 million (1996: NLG 55.0 million), a rise of 26% primarily due to higher operating results in Portugal. In Latin America (Brazil), operating results totaled NLG 34.5 million. In Asia Pacific, operating losses amounted to NLG 14.9 million (1996 loss: NLG 8.3 million). Corporate costs in the 1996 fourth quarter amounted to NLG 19.1 million (1996: NLG 13.5 million). Net interest expense amounted to NLG 111.1 million (1996: NLG 94.4 million). This increase is primarily attributable to the higher dollar rate and the financing of new activities. The tax burden in the fourth quarter was slightly lower than in the corresponding 1996 period (28% vs. 29%). 1997 dividend proposal It is proposed that an increased dividend of NLG 0.73 (1996: NLG 0.58) per common share of NLG 0.50 par value be paid from the results for 1997; of this amount, NLG 0.21 has already been paid as interim dividend. The final dividend of NLG 0.52 (1996: NLG 0.42) per common share can be taken in full or in part in shares, charged to the paid-in additional capital reserve. The size of the composition of this optional dividend will be announced after the close of trading on the AEX AEX See: Amsterdam Exchange Stock Exchanges in Amsterdam on April 29, 1998. Holders of cumulative preferred Noun 1. cumulative preferred - preferred stock whose dividends if omitted accumulate until paid out cumulative preferred stock preference shares, preferred shares, preferred stock - stock whose holders are guaranteed priority in the payment of dividends but financing shares will receive a cumulative preferred dividend of NLG 0.1529 per share of NLG 0.50 par value for 1997, after deduction of the interim dividend paid in September. Outlook for 1998 It is expected that in all regions, sales and results in 1998 will improve. Net earnings and earnings per share are expected to be significantly higher than in 1997. Announcement of stock issue of 30 million common shares Royal Ahold announced today it plans to issue 30 million new common shares. The proceeds of the global offering will be used to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. the recent acquisitions of a 50% interest in Disco International Holdings N.V. and to finance future small and medium-sized acquisitions to contribute to Ahold's worldwide growth. Annual meeting The General Meeting of Stockholders will be held at the RAI rai n. A form of popular Algerian music combining traditional Arabic vocal styles with various elements of popular Western music and featuring outspoken, often controversial lyrics. Congress Center in Amsterdam on May 12, 1998 at 3:00 PM. The 1997 annual report will be published on April 14, 1998. -0- (For tabular tab·u·lar adj. 1. Having a plane surface; flat. 2. Organized as a table or list. 3. Calculated by means of a table. tabular resembling a table. information please call Taylor Rafferty Associates at 212-889-4350) CONTACT: Hans Gobes Royal Ahold, Media Relations 011-31-75-659-5665 After office hours office hours, n.pl See business hours. : 011-31-23-527-0456 - or - Stuart Brown Royal Ahold, Investor Relations Investor relations The process by which the corporation communicates with its investors. 011-31-75-659-5648 e-mail: investor.relations@corp.ahold.nl - or - Jeff Zelkowitz Taylor Rafferty Associates 212-889-4350 |
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