Ahold 2nd Quarter Net Earnings Surge 40.6% To E172.9 Million.ZAANDAM Zaandam (zändäm`), municipality (1991 est. pop. 130,000), North Holland prov., W Netherlands, near Amsterdam. Manufactures include food products, chemicals, lumber, and machinery. , The Netherlands--(BUSINESS WIRE)--Sept. 2, 1999-- Royal 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. (NYSE NYSE See: New York Stock Exchange : AHO) Highlights -- 2nd quarter net earnings rise 40.6% to E172.9 million -- Operating results increase 42.3% to E321.4 million -- Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: rises again reaching 4.1% of sales -- Sales increase 34.5% to E7.9 billion -- Earnings per common share rise 27.0% to E0.27 -- 1999 EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. growth forecast increased. Royal Ahold (NYSE:AHO), the leading international food retailer, achieved second quarter 1999 net earnings of E172.9 million (1998: E123.0 million), a 40.6% increase for the 12 week period ended July July: see month. 18, 1999. Net earnings totaled E170.2 million (1998: E121.0 million) 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) . Earnings per common share amounted to E0.27 (1998: E0.21), an increase of 27.0%. Excluding currency fluctuations, specifically the higher average exchange rate of the US dollar (E0.96 vs. E0.92), the earnings per common share growth was 20.2%. Consolidated sales rose 34.5% to E7.9 billion (1998: E5.9 billion). Operating results rose 42.3% to E321.4 million (1998: E225.9 million). As a percentage of net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight , operating results rose from 3.9% to 4.1%. Operating results before depreciation (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) rose 38.1% to E523.4 million (1998: E379.1 million). As a percentage of net sales, EBITDA rose from 6.5% to 6.6%. 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. : sales +34.6%; operating results +45.7% In the United States, sales increased 34.6% to $4.7 billion (1998: $3.5 billion). This increase is largely attributable to the consolidation of Giant-Landover For other uses, see Giant Food. Giant Food LLC is a supermarket chain with 186 locations throughout Washington D.C., Virginia, Delaware, and Maryland.[1] Giant is often referred to as Giant-Landover so not to be confused with sister company Giant-Carlisle. and substantial sales growth at Stop & Shop. Operating results in the U.S. rose 45.7% to $238.9 million (1998: $164.0 million). All U.S. operating companies operating company A business that engages in transactions with outsiders. , most notably Stop & Shop, achieved higher operating results. Cost controls and good margin management at Giant-Carlisle, Tops and BI-LO BI-LO is the name of several different supermarket chains around the world:
The Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. : sales +5.1%; operating results +9.6% Sales in The Netherlands grew 5.1% to E1.8 billion (1998: E1.7 billion). Sales at 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. rose 1.9%. Market share in second quarter 1999 was slightly lower compared with second quarter 1998. Sales at Schuitema rose 9.2%, accompanied by a further increase in market share. The 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" experienced modest sales growth. Operating results in The Netherlands rose 9.6% to E70.7 million (1998: E64.5 million). Albert Heijn, Schuitema and Ahold Institutional Food Supply achieved better operating results than the previous year. Gastronoom, the recently acquired institutional food supplier, could make only small contributions to consolidated results due to consolidation from July 6, 1999. Operating results at specialty stores and production companies were lower than in 1998. Other European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Countries: sales +32.8%; operating results +21.7% In other European countries, sales rose 32.8% to E551.6 million (1998: E415.5 million). Portugal Portugal (pôr`chəgəl), officially Portuguese Republic, republic (2005 est. pop. 10,566,000), 35,553 sq mi (92,082 sq km), SW Europe, on the western side of the Iberian Peninsula and including the Madeira Islands and the Azores in the , Poland Poland, Pol. Polska, officially Republic of Poland, republic (2005 est. pop. 38,635,000), 120,725 sq mi (312,677 sq km), central Europe. It borders on Germany in the west, on the Baltic Sea and the Kaliningrad region of Russia in the north, on Lithuania, and notably the Hypernova For the rock band, see . Hypernova (pl. hypernovae) refers to an exceptionally large star that collapses at the end of its lifespan—for example, a collapsar, or a large supernova. hypermarkets in 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. , contributed to sales growth. The consolidation of the Spanish Spanish, river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river. supermarket chains acquired in January January: see month. 1999, also contributed to the increase in sales. Operating results in other European countries increased 21.7% to E21.9 million (1998: E18.0 million). In Portugal, the 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. supermarkets and Feira Nova Feira Nova is a municipality located in the Brazilian state of Sergipe. Its population was 5,476 (2005) and its area is 188 km².[1] References 1. ^ IBGE - [1] hypermarkets again achieved higher results. Operating results at the newly acquired Spanish chains improved and practically achieved break-even. Operating results in Poland and the Czech Republic remained slightly negative. 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. : sales +115.7%; operating results +89.7% Latin Lat·in n. 1. a. The Indo-European language of the ancient Latins and Romans and the most important cultural language of western Europe until the end of the 17th century. b. American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of sales rose 115.7% to E872.7 million (1998: E404.6 million), a doubling largely due to the consolidation of Disco and Santa Isabel Santa Isabel: see Malabo, Equatorial Guinea. Santa Isabel or Ysabel Island, central Solomon Islands, western South Pacific Ocean. . In Brazil, sales in local currency also increased during the second quarter. Operating results in Latin America rose 89.7% to E22.0 million (1998: E11.6 million), mainly reflecting the consolidation of Disco. Operating results at Santa Isabel were still slightly negative. Asia: sales rise 29.7%; operating results remain negative Sales in Asia rose 29.7% to E125.0 million (1998: E96.4 million). Operating results in Asia amounted to a loss of E10.8 million (1998: operating loss 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. of E9.7 million). Corporate Costs Corporate costs totaled E10.9 million (1998: E8.8 million). Net Financial Expense Net financial expense amounted to E72.7 million (1998: E50.2 million), an increase largely attributable to the consolidation of interest expenses at Disco, Santa Isabel and Giant-Landover. The interest coverage ratio was 3.32 (1998: 3.43). Tax rate The tax rate, expressed as a percentage of pre-tax earnings, amounted to 27.4% (1998: 26.2%). The increase is due to changes in the geographic composition of earnings before tax. Equity ratio Group equity, expressed as a percentage of the balance sheet total, amounted to 16.3% (at year-end 1998: 15.7%). After the conversion of convertible subordinated notes, group equity will amount to 21.7%. Capital accounts totaled 23.0% of the balance sheet total (at year-end 1998: 23.2%). Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. amounted to E2.0 billion (at year-end 1998: E1.6 billion). During the first half of 1999, proceeds from exercised option rights, paid-in equity attributable to the optional dividend of 1998, and the positive balance of exchange rate fluctuations were added to shareholders' equity. In addition, first half net earnings, after deduction of the preferred dividend and after deduction of the interim dividend on common shares outstanding as of the balance sheet date were added to shareholders' equity. Goodwill paid for acquisitions amounted to E250 million (primarily Gastronoom in The Netherlands, Dialco and Dumaya in Spain and Los Americanos in Argentina) and was fully charged to shareholders' equity. NET EARNINGS FOR FIRST HALF 1999 RISE 35.9% TO E348.0 MILLION Net earnings for the 28-week period ended July 18, 1999 amounted to E348.0 million (1998: E256.1 million), an increase of 35.9%. Earnings per common share for first half 1999 amounted to E0.54 (1998: E0.45), an 18.9% increase. Excluding currency fluctuations, earnings per common share rose 19.6%. Sales +30.4% Consolidated sales for first half 1999 amounted to E17.2 billion (1998: E13.2 billion), an increase of 30.4%. In the U.S., sales increased 35.8% to $10.8 billion (1998: $7.9 billion). This increase was largely attributable to the consolidation of Giant-Landover. Sales in The Netherlands rose 4.1% to E4.2 billion (1998: E4.0 billion). In other European countries, sales rose 35.7% to E1.1 billion (1998: E0.8 billion). Latin American sales totaled E1.6 billion (1998: E0.8 billion). The doubling of sales reflects primarily the consolidation of Disco and Santa Isabel. In Asia, sales amounted to E0.3 billion (1998: E0.2 billion). Operating results +37.7% Consolidated operating results for the first half of 1999 amounted to E667.3 million (1998: E484.5 million), an increase of 37.7%. In the U.S., operating results amounted to $505.6 million (1998: $346.4 million), a 46.0% increase. In The Netherlands operating results were E161.4 million (1998: E146.8 million), a 9.9% increase. In other European countries, operating results rose 20.1% to E43.0 million (1998: E35.8 million). In Latin America, operating results doubled to E41.4 million (1998: E20.8 million). Operating losses in Asia amounted to E25.0 million (1998: losses of E19.3 million). Corporate costs for the first half totaled E22.5 million (1998: E19.5 million). 1999 interim dividend per common share:E0.14 or 1% in common stock The Corporate Executive Board of Royal Ahold has decided to declare an interim dividend of E0.14 in cash, or 1% in stock per common share, from tax exempt, 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. (1998: E0.12 in cash or 1% in common stock). The interim dividend is payable as of September 9, 1999. Also payable from that date is the interim dividend on 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. Outlook for full year 1999: EPS to grow by approximately 20%, excluding currency fluctuations Based on the results from the first half of 1999, the Corporate Executive Board of Royal Ahold anticipates a rise in earnings per common share, excluding currency fluctuations, of approximately 20% for the full year 1999. Background Royal Ahold is a rapidly growing international food retailer with leading supermarket companies in the United States, Europe, Latin America and Asia. The company operates more than 3,600 supermarkets, hypermarkets and specialty stores and had 1998 sales of $30.9 billion. In the United States Ahold is the leading supermarket operator along the eastern seaboard with more than 1,000 stores in five operating companies: Stop & Shop, Giant-Landover, Giant-Carlisle, Tops and BI-LO. Sales in the US totaled $16.2 billion in 1998. In March 1999 Ahold announced its intention to acquire Pathmark Stores, Inc. with sales of $3.7 billion and 132 supermarkets in the New York metropolitan area New York–Northern New Jersey–Long Island is the most populous metropolitan area in the United States and the third most populous in the world, after Tokyo and Mexico City. . In addition to its listing on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. (NYSE: AHO), Ahold's shares are trading on the Amsterdam Exchanges Amsterdam Exchange (AEX) Exchange that comprises the AEX-Effectenbeurs, the AEX-Optiebeurs (formerly the European Options Exchange or EOE) and the AEX-Agrarische Termijnmarkt. and on the Swiss Exchange Swiss Exchange The major securities market of Switzerland. , and Ahold options are also traded on the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. (AMEX AMEX See: American Stock Exchange ). Ahold common shares may be accessed on the Reuter Equities 2000 Service under the symbol AHLN.AS and on Quotron under the symbol AHOLN.EU. Additional information is available on Ahold's website: http://www.ahold.com. Royal Ahold press releases may contain `forward-looking' statements. Actual results may differ from such statements as they may have been influenced by factors beyond the Company's ability to control. -0-
Consolidated Statement of Earnings of Royal Ahold
----------------------------------------------------------------------
2nd quarter
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x 1 million 1999 increase 1998
(12 weeks) in % (12 weeks)
Sales to third parties
- United States (in dollars) USD 4,696.7 34.6 3,488.4
- The Netherlands EUR 1,847.3 5.1 1,757.5
- Other Europe EUR 551.6 32.8 415.5
- Latin America EUR 872.7 115.7 404.6
- Asia Pacific EUR 125.0 29.7 96.4
Total sales EUR 7,892.7 34.5 5,869.2
Operating results
- United States (in dollars) USD 238.9 45.7 164.0
- The Netherlands EUR 70.7 9.6 64.5
- Other Europe EUR 21.9 21.7 18.0
- Latin America EUR 22.0 89.7 11.6
- Asia Pacific EUR (10.8) 11.3 (9.7)
- Corporate costs EUR (10.9) 23.9 (8.8)
Total operating results EUR 321.4 42.3 225.9
Income from unconsolidated
subsidiaries and affiliates EUR 0.4 3.4
Net financial income
and expenses EUR (73.1) (53.6)
Net financial expense EUR (72.7) (50.2)
Earnings before income taxes EUR 248.7 41.5 175.7
Income taxes EUR (68.1) (46.0)
Earnings after income taxes EUR 180.6 39.2 129.7
Minority interests EUR (7.7) (6.7)
Net earnings EUR 172.9 40.6 123.0
Dividend preferred shares EUR (2.7) (2.0)
Ratios
Average number of common
shares outstanding (x 1,000)(a) 639,425 577,591
Earnings per common share(b) EUR 0.27 0.21
Earnings per common share as
if the convertible
subordinated bond was fully
converted(b) EUR 0.26
Operating results as % of sales 4.07 3.85
Depreciation (x 1 million) EUR 202.0 153.2
Operating results before
depreciation (x 1 million) EUR 523.4 379.1
Operating results before
depreciation as % of sales 6.63 6.46
Earnings after income taxes
as % of sales 2.29 2.21
Interest coverage 3.32 3.43
Average exchange rate of
the dollar EUR 0.96 0.92
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1st half year
----------------------------------------------------------------------
x 1 million 1999 increase 1998
(28 weeks) in % (28 weeks)
Sales to third parties
- United States (in dollars) USD 10,793.1 35.8 7,948.9
- The Netherlands EUR 4,213.0 4.1 4,045.2
- Other Europe EUR 1,069.0 35.7 787.5
- Latin America EUR 1,642.1 108.1 789.2
- Asia Pacific EUR 256.9 29.2 198.9
Total sales EUR 17,173.1 30.4 13,167.1
Operating results
- United States (in dollars) USD 505.6 46.0 346.4
- The Netherlands EUR 161.4 9.9 146.8
- Other Europe EUR 43.0 20.1 35.8
- Latin America EUR 41.4 99.0 20.8
- Asia Pacific EUR (25.0) 29.5 (19.3)
- Corporate costs EUR (22.5) 15.4 (19.5)
Total operating results EUR 667.3 37.7 484.5
Income from unconsolidated
subsidiaries and affiliates EUR 1.9 8.4
Net financial income
and expenses EUR (192.2) (130.3)
Net financial expense EUR (190.3) (121.9)
Earnings before income taxes EUR 477.0 31.5 362.6
Income taxes EUR (125.5) (93.6)
Earnings after income taxes EUR 351.5 30.7 269.0
Minority interests EUR (3.5) (12.9)
Net earnings EUR 348.0 35.9 256.1
Dividend preferred shares EUR (6.5) (4.5)
Ratios
Average number of common
shares outstanding (x 1,000)(a) 637,653 558,702
Earnings per common share(b) EUR 0.54 0.45
Earnings per common share as
if the convertible
subordinated bond was fully
converted(b) EUR 0.53
Operating results as % of sales 3.89 3.68
Depreciation (x 1 million) EUR 440.3 335.1
Operating results before
depreciation (x 1 million) EUR 1,107.6 819.6
Operating results before
depreciation as % of sales 6.45 6.22
Earnings after income taxes
as % of sales 2.05 2.04
Interest coverage 3.24 3.19
Average exchange rate of
the dollar EUR 0.93 0.92
(a) Number of shares has been adjusted for stock dividends.
(b) Earnings per share are calculated on the basis of the average
number of common shares outstanding and after deduction of
preferred dividend.
Consolidated Balance Sheet of Royal Ahold
x 1 million July 18, 1999 January 3, 1999
Cash and cash equivalents EUR 711 EUR 519
Receivables 1,713 1,509
Inventories 2,166 1,996
Tangible and intangible
fixed assets 7,880 6,942
Financial fixed assets 476 460
EUR 12,946 EUR 11,426
Current liabilities EUR 5,084 EUR 4,607
Long-term debt 3,668 3,063
Provisions 1,217 1,100
Subordinated loans 860 860
Minority interests 153 243
Stockholders' equity 1,964 1,553
Group equity EUR 2,117 EUR 1,796
EUR 12,946 EUR 11,426
Interest-bearing debt EUR 5,681 EUR 4,803
Capital accounts EUR 2,977 EUR 2,656
Ratios
Number of common shares
outstanding (x 1,000)(a) 640,224 635,661
Group equity/Total assets % 16.3 15.7
Capital accounts/Total assets % 23.0 23.2
Net gearing in %(b) 235 238
Net gearing in %, excl.
capital leases 186 190
Exchange rate of the dollar for
balance sheet items EUR 0.98 EUR 0.86
Ratios as if the convertible
subordinated bond was fully
converted
Group equity/Total assets in % 21.7 21.7
Net gearing in %(b) 153 145
Net gearing in %, excl. capital leases 116 110
(a) Number of shares has been adjusted for stock dividends.
(b) Net gearing represents the balance of interest-bearing debt
including capital leases and net cash as a percentage of group
equity.
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