Ahold 3rd Quarter 2002 Net Earnings Amount to Euro 257.6 Million; Full-Year Outlook Lowered; Ahold to Focus On Portfolio Rationalization and Debt Reduction.Business Editors 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)--Nov. 19, 2002 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) -- Identical sales compare sales from exactly the same stores. -- Comparable sales are identical sales plus sales from replacement stores. -- Currency impact: the impact of using different exchange rates to translate the financial figures of our subsidiaries to Euros. The financial figures of the previous year are restated using the actual exchange rates in order to eliminate this currency impact. -- Pro forma earnings: reported earnings adjusted for the impact of goodwill amortization, exceptional items, results on the sale or divestment of tangible fixed assets and exchange rate differences as included in net financial income and expense. -- The interest coverage ratio is calculated as EBITA excluding exceptional items, divided by the net interest expenses. -- Net debt / EBITDA: Ahold, the international food retailer and foodservice The foodservice (or food service) industry (US English; catering industry in British English) encompasses those places, institutions, and companies responsible for any meal eaten away from home. operator, today announced third-quarter 2002(1) net earnings of Euro 257.6 million (2001: Euro 304.2 million). Earnings were below last year primarily due to higher goodwill amortization, higher financial expenses, higher income taxes and unfavorable currency differences. Due to continuing difficult trading conditions in most markets, South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. in particular, as well as higher financial expenses and a substantially increased average tax rate, the outlook for full-year 2002 earnings per share growth, excluding goodwill amortization, exceptional items and currency impact, was significantly lowered from plus 5-8% to negative 6-8%. The company launched an aggressive company-wide initiative focused on organic growth, cost reduction, capital efficiency and portfolio review for the 2003-2005 plan period. The initiative is intended to substantially improve Ahold's competitiveness and financial performance. The objective is to generate free cash flow and reduce debt. Remarks by Cees van der Hoeven Hoeven is a town in the municipality of Halderberge in the Netherlands. The name Hoeven originated from the purchase of a certain amount of ground in 1282 by the abby of Cistercienser of St. Bernard. This amount was equal to 100 "hoeven", a local measure of area in those days. , Ahold President & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. 'Our core businesses delivered good operating results in tough trading conditions,' said Ahold President & CEO Cees van der Hoeven. 'The third-quarter results were, however, significantly impacted by a number of non-operating items such as taxation and financial expenses. In many ways, 2002 has not been our lucky year. We have had several disappointments coming from different directions, most particularly South America. Adding up the impact of the extremely difficult trading conditions, the huge impact of currency devaluations Currency devaluation A deliberate downward adjustment in the official exchange rates established, or pegged, by a government against a specified standard, such as another currency or gold. , the severe effect of the default of our former Argentine Argentine having some relationship with the country Argentina. Argentine tick margaropuswinthemi. Argentine tortoise geochelonechilensis. partner, Velox, the impact on financial expenses and the average tax rate, one can say that South America explains most of it. Ahold's performance in almost all key markets is very solid in the current environment. It is therefore extra painful that we have had to announce a second revision to the 2002 outlook. We feel invigorated in·vig·or·ate tr.v. in·vig·or·at·ed, in·vig·or·at·ing, in·vig·or·ates To impart vigor, strength, or vitality to; animate: "A few whiffs of the raw, strong scent of phlox invigorated her" by the new strategic plan that will focus the company on the growth of its core businesses and lead to significant debt reduction.'
Ahold 3rd quarter 2002 results
----------------------------------------------------------------------
3rd quarter First three quarters
Change Change
x 1 million Euro 2002 in % 2001 2002 in % 2001
----------------------------------------------------------------------
Sales 16,412.5 5.8 15,509.3 55,876.8 12.2 49,783.1
Operating earnings 756.2 13.3 667.2 2,400.3 15.8 2,073.1
Operating earnings as
% of sales 4.6% 4.3% 4.3% 4.2%
Net earnings 257.6 (15.3) 304.2 388.1 (58.9) 944.0
Earnings per share (in
Euro) 0.27 (21.8) 0.34 0.39 (64.4) 1.09
Earnings per share
excluding goodwill
amortization,
exceptional items and
currency impact (in
Euro) 0.34 (4.5) 0.36 1.15 (1.1) 1.17
----------------------------------------------------------------------
Sales and earnings for the third quarter were negatively impacted by lower average exchange rates of mainly the following currencies:
Average 3Q rates 2002 2001
U.S. Dollar (USD) 1.02 1.11
Brazilian Real (BRL) 0.32 0.43
Argentine Peso (ARS) 0.28 1.11
(1) 12 weeks from July 15 through October 6, 2002
Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: sales rose 5.8% to Euro 16.4 billion (+14.5% excluding currency impact) mainly due to the inclusion of Alliant Al`li´ant n. 1. An ally; a confederate. and Bruno's Bruno's Supermarkets is an American chain of grocery stores, founded in Birmingham, Alabama. It currently operates stores under the banners Bruno’s, Food World, and Food Max in Alabama and Florida. Supermarkets. Organic sales growth amounted to 1.5% (2001: 6.4%). Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before were Euro 756.2 million, representing an increase of 13.3% (+24.0% excluding currency impact). Net earnings amounted to Euro 257.6 million, a decrease of Euro 46.6 million compared to last year mainly due to the following: -- Identical sales compare sales from exactly the same stores. -- Comparable sales are identical sales plus sales from replacement stores. -- Currency impact: the impact of using different exchange rates to translate the financial figures of our subsidiaries to Euros. The financial figures of the previous year are restated using the actual exchange rates in order to eliminate this currency impact. -- Pro forma earnings: reported earnings adjusted for the impact of goodwill amortization, exceptional items, results on the sale or divestment of tangible fixed assets and exchange rate differences as included in net financial income and expense. -- The interest coverage ratio is calculated as EBITA excluding exceptional items, divided by the net interest expenses. -- Net debt / EBITDA: Earnings common shareholders excluding goodwill amortization and exceptional items amounted to Euro 318.3 million or Euro 0.34 per average common share (-4.5% excluding currency impact). The reconciliation with earnings common shareholders was as follows:
Reconciliation earnings common shareholders
----------------------------------------------------------------------
3rd quarter First three quarters
x 1 million Euro Change Change
2002 in % 2001 2002 in % 2001
----------------------------------------------------------------------
Net earnings 257.6 (15.3) 304.2 388.1 (58.9) 944.0
Dividend preferred
financing shares (8.9) (8.7) (29.4) (29.3)
-------- ---------------- --------
Earnings common
shareholders 248.7 (15.8) 295.5 358.7 (60.8) 914.7
Net impact of*:
Goodwill amortization 57.5 28.7 186.1 87.2
Exceptional items - - 490.0 -
Argentine Peso
devaluation/inflation
losses 12.1 - 32.0 -
-------- ---------------- --------
Total net goodwill and
exceptional adjustments 69.6 28.7 708.1 87.2
Earnings common
shareholders excluding
goodwill amortization and
exceptional items 318.3 (1.8) 324.2 1,066.8 6.5 1,001.9
Earnings common
shareholders excluding
goodwill amortization,
exceptional items and
currency impact 318.3 2.9 309.4 1,066.8 9.1 977.4
Average number of common
shares outstanding (x
1,000, adjusted for stock
dividend) 929,483 7.7 863,095 925,195 10.3 838,728
Earnings common
shareholders excluding
goodwill amortization,
exceptional items and
currency impact per
average common share
(x 1 Euro) 0.34 (4.5) 0.36 1.15 (1.1) 1.17
----------------------------------------------------------------------
* These numbers are net of taxes and minority interest.
The average number of common shares increased primarily due to the
issue of 80.5 million new common shares through the equity offering in
September 2001. The proceeds from the equity offering were used to
finance the acquisitions of Bruno's Supermarkets and Alliant in
December 2001.
United States - retail
----------------------------------------------------------------------
3rd quarter First three quarters
x 1 million USD Change Change
2002 in % 2001 2002 in % 2001
----------------------------------------------------------------------
Sales 5,974.4 11.5 5,357.5 20,041.2 14.1 17,564.5
Operating earnings 365.3 23.6 295.5 1,155.8 25.0 924.9
Results on tangible
fixed assets 28.6 4.3 30.6 5.0
-------- ------- ---------- ---------
Pro forma operating
earnings 336.7 15.6 291.2 1,125.2 22.3 919.9
as % of sales 5.6% 5.4% 5.6% 5.2%
----------------------------------------------------------------------
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. , retail sales rose both organically and as a result of the consolidation of Bruno's that took effect in December December: see month. 2001. Organic retail sales growth amounted to 3.4% (2001: 7.0%). Comparable retail sales growth was 0.6% (2001: 3.8%) and identical retail sales declined 0.2% (2001: increase of 3.4%). Operating earnings rose as a result of strong improvements at most operating companies operating company A business that engages in transactions with outsiders. , supported by increased synergies, effective margin management and cost control. In particular, performance at Stop & Shop, Giant (Landover Landover can refer to:
Carlisle, city (1991 pop. 72,006) and district, Cumbria, NW England, near the junction of the Caldew, Eden, and Petteril rivers. The city of Carlisle is an important rail center. ) was strong, offset to a limited degree by BI-LO BI-LO is the name of several different supermarket chains around the world:
Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the grocer Peapod PEAPOD Any IS aircraft seconded to NASA shuttle duties reduced its 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. 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. 7.4 million (2001: loss of USD 11.1 million). Results on tangible fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → mainly related to a sale and leaseback sale and leaseback The sale of a fixed asset that is then leased by the former owner from the new owner. A sale and leaseback permits a firm to withdraw its equity in an asset without giving up use of the asset. Also called leaseback. transaction at Giant (Landover).
United States - foodservice
3rd quarter First three quarters
x 1 million USD Change Change
2002 in % 2001 2002 in % 2001
----------------------------------------------------------------------
Sales 4,021.1 43.3 2,806.1 13,517.6 50.3 8,996.2
Operating earnings 208.1 83.7 113.3 587.0 64.0 357.9
as % of sales 5.2% 4.0% 4.3% 4.0%
----------------------------------------------------------------------
In the United States, foodservice sales grew mainly due to the consolidation of Alliant with effect from December 2001. Organic foodservice sales declined by 6.1% (2001: increase of 9.0%). The company shed unprofitable business that was part of the Alliant portfolio, closed unprofitable operations and rationalized distribution. U.S. Foodservice U.S. Foodservice is one of the largest broadline foodservice distributor in the United States. The company distributes food and related products to over 250,000 customers, including restaurants, healthcare facilities, lodging establishments, cafeterias, schools and colleges. U.S. expects to complete its planned 24-month operational integration of Alliant in 15 months. Foodservice operating earnings in the United States were significantly higher, primarily as a result of the consolidation of Alliant, purchasing synergies and cost reductions. Results at U.S. Foodservice, excluding Alliant, were strong due to effective streamlining of the business. The combination of the voluntary exit of the unprofitable business and the stepped-up stepped-up adj. Increased in pace or intensity; heightened: a stepped-up political campaign. transition activities has resulted in almost a doubling of operating earnings.
Europe
3rd quarter First three quarters
x 1 million Euro Change Change
in % in %
2002 2001 2002 2001
----------------------------------------------------------------------
Sales 5,551.8 6.7 5,204.0 17,192.4 6.0 16,218.6
Operating earnings 191.7 2.6 186.8 554.0 (2.3) 566.8
Results on tangible
fixed assets 16.4 11.0 36.8 35.0
-------- -------- --------- ---------
Pro forma operating
earnings 175.3 (0.3) 175.8 517.2 (2.7) 531.8
as % of sales 3.2% 3.4% 3.0% 3.3%
----------------------------------------------------------------------
In Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , organic sales growth, excluding currency impact,
amounted to 4.8% (2001: 6.3%). In particular 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. , Schuitema,
ICA Ica (ē`kä), city (1993 pop. 108,724), capital of Ica dept., SW Peru, on the Pan-American Highway. It is a commercial center for the cotton, wool, and wine produced in the region. There are several summer resorts nearby. Ahold and Central Europe Central Europe is the region lying between the variously and vaguely defined areas of Eastern and Western Europe. In addition, Northern, Southern and Southeastern Europe may variously delimit or overlap into Central Europe. contributed to the sales rise.Operating earnings at Albert Heijn, Schuitema and ICA Ahold showed good improvements. Operating earnings in Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. were higher than in the previous quarter but lower than last year, mostly as a result of increased integration costs. In Central Europe, operating earnings 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. improved compared to last year. Higher operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were incurred due to the entry into the Slovakian Slo·vak also Slo·va·ki·an n. 1. a. A native or inhabitant of Slovakia. b. A person of Slovak descent. 2. The Slavic language of the Slovaks. adj. market. Operations in 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, are still loss making.
Latin America
3rd quarter First three quarters
x 1 million Euro Change Change
2002 in % 2001 2002 in % 2001
----------------------------------------------------------------------
Sales 586.0 (49.3) 1,154.9 2,113.0 (41.6) 3,617.8
Operating earnings 1.7 (96.0) 42.8 39.7 (68.2) 124.8
as % of sales 0.3% 3.7% 1.9% 3.4%
----------------------------------------------------------------------
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. , sales in Euros were significantly lower as a result of the devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. of several currencies, mainly the Argentine Peso The peso (originally established as the nuevo peso argentino or peso convertible) is the currency of Argentina. Its ISO 4217 code is ARS, and the symbol used locally for it is $ (to avoid confusion, Argentines frequently use US$, and the Brazilian Real The real (IPA: [xe'aw] or [ʁe'aɫ], symbol: R$, ISO 4217 code: BRL, plural: reais) is the currency of Brazil. It is also the name of the earliest Brazilian currency (see from the Colonial period to 1942. , as well as the deconsolidation of La Fragua. Organic sales growth, excluding currency impact, amounted to 6.0% (2001: minus 1.3%). Sales at Disco in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. in local currency were higher, partly as a result of strongly increased inflation. In Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. , sales in local currency were higher mainly due to the acquisition of G. Barbosa Barbosa is a Portuguese surname:
Santa Isabel or Ysabel Island, central Solomon Islands, western South Pacific Ocean. in Chile Chile (chĭl`ē, Span. chē`lā), officially Republic of Chile, republic (2005 est. pop. 15,981,000), 292,256 sq mi (756,945 sq km), S South America, west of the continental divide of the Andes Mts. , Peru and Paraguay Paraguay, river, Brazil and Paraguay Paraguay, river, c.1,300 mi (2,090 km) long, rising in the highlands of central Mato Grosso state, Brazil. Flowing generally southward, it forms the border between Brazil and Paraguay in the pantanal, then crosses the generated sales at the same level as last year. Operating earnings in South America were heavily impacted by currency devaluations and difficult trading circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . Operating earnings in local currency in Brazil were slightly higher than last year and include the acquisition of G. Barbosa. Operating earnings in local currency at Disco in Argentina were substantially below last year, whereas Santa Isabel in Chile recorded an operating loss. Central America Central America, narrow, southernmost region (c.202,200 sq mi/523,698 sq km) of North America, linked to South America at Colombia. It separates the Caribbean from the Pacific. In Central America - Guatemala Guatemala, city, Guatemala Guatemala, city (1994 est. pop. 823,301), S central Guatemala, capital of the republic. Its full name is La Nueva Guatemala de la Asunción. In a broad, fertile, highland valley, c. , Costa Rica Costa Rica (kŏs`tə rē`kə), officially Republic of Costa Rica, republic (2005 est. pop. 4,016,000), 19,575 sq mi (50,700 sq km), Central America. , Honduras Honduras (hŏnd r`əs, –dyr`–; Span., ōnd , Nicaragua Nicaragua (nĭkärä`gwä), officially Republic of Nicaragua, republic (2005 est. pop. 5,465,000), 49,579 sq mi (128,410 sq km), Central America. and
El Salvador El Salvador (ĕl sälväthōr`), officially Republic of El Salvador, republic (2005 est. pop. 6,705,000), 8,260 sq mi (21,393 sq km), Central America. - the joint venture Paiz Ahold, owner of La Fragua, formed a
new regional joint venture with CSU See DSU/CSU. 1. CSU - California State University. 2. CSU - Cleveland State University. 3. CSU - Channel Service Unit. named CARHCO, effective January 1, 2002. Since that date, La Fragua has been deconsolidated. CARHCO's results are reported as income from unconsolidated subsidiaries and affiliates. Sales in the third quarter amounted to Euro 371.9 million. Organic sales growth amounted to 17.1%. Operating earnings in the third quarter in Central America increased to Euro 15.8 million (2001: Euro 8.5 million), mainly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the formation of the new joint venture. The net income from CARHCO, reported as income from unconsolidated subsidiaries and affiliates, amounted to Euro 0.9 million.
Asia
----------------------------------------------------------------------
3rd quarter First three
quarters
x 1 million Euro Change Change
2002 in % 2001 2002 in % 2001
----------------------------------------------------------------------
Sales 109.2 16.8 93.5 339.3 16.4 291.5
Operating earnings (4.9) (19.5) (4.1) (17.3)(27.2) (13.6)
as % of sales (4.5%) (4.4%) (5.1%) (4.7%)
----------------------------------------------------------------------
In Asia, sales rose 16.8% to Euro 109 million. In local currencies, sales in Thailand Thailand (tī`lănd, –lənd), Thai Prathet Thai [land of the free], officially Kingdom of Thailand, constitutional monarchy (2005 est. pop. 65,444,000), 198,455 sq mi (514,000 sq km), Southeast Asia. and Indonesia Indonesia (ĭn'dənē`zhə), officially Republic of Indonesia, republic (2005 est. pop. 241,974,000), c.735,000 sq mi (1,903,650 sq km), SE Asia, in the Malay Archipelago. were higher than last year. Sales in Malaysia Malaysia (məlā`zhə), independent federation (2005 est. pop. 23,953,000), 128,430 sq mi (332,633 sq km), Southeast Asia. The official capital and by far the largest city is Kuala Lumpur; Putrajaya is the adminstrative capital. were below last year. Organic sales growth, excluding currency impact, amounted to 21.7%, mainly as a result of new store openings. Operating losses in Asia amounted to Euro 4.9 million (2001: loss of Euro 4.1 million). Corporate costs Corporate costs amounted to Euro 14.5 million (2001: Euro 11.7 million).
Net financial income and expense
---------------------------------------------------------------------
3rd quarter First three quarters
x 1 million Euro Change Change
2002 in % 2001 2002 in % 2001
---------------------------------------------------------------------
Net interest expense (223.5) (3.2) (216.5) (763.2) (6.5) (716.4)
Financing currency
differences (13.3) 24.2 (35.9) 89.9
Other financial gains
and losses (0.5) 0.2 (0.1) (0.3)
------- ------- ------- -------
Total net financial
income and expense (237.3) (23.5) (192.1) (799.2)( 27.5) (626.8)
---------------------------------------------------------------------
Net interest expense increased to Euro 223.5 million (2001: Euro 216.5 million) caused by the consolidation of new debt related to acquisitions, the purchase of additional shares in Disco Ahold International Holdings and an increase of cash dividends paid. This was partly offset by a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. currency impact, especially of the U.S. Dollar. Financing currency differences were unfavorable compared to last year, partly due to the inclusion of devaluation losses in Argentina on third-party U.S. Dollar debt (Euro 6.1 million) as well as inflation adjustment losses on third-party Argentine Peso debt (Euro 6.0 million). The rolling interest coverage ratio improved to 3.4 (2001: 3.3). The rolling ratio of net interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid debt to 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 improved to 2.5 (2001: 2.6). Tax rate The tax rate, expressed as a percentage of taxable earnings adjusted for exceptional charges and goodwill amortization, was 33.4% (2001: 25.6%). A significant change in the composition of taxable earnings caused the very considerable increase of the tax rate. Higher earnings in the U.S. and higher losses before tax in South America, for which no tax asset was taken into account, were the main cause of this development. Income from unconsolidated subsidiaries and affiliates Income from unconsolidated subsidiaries amounted to a net profit of Euro 7.1 million compared to a net profit of Euro 7.9 million last year. The main results included are:
3rd quarter First three
quarters
x 1 million Euro 2002 2001 2002 2001
---------------------------------------------------------------------
Unconsolidated subsidiaries at ICA 4.1 6.2 1.6 11.8
CARHCO 0.9 - 5.8 -
Others 2.1 1.7 5.4 4.3
----- ---- ------- ------
Total income from unconsolidated
subsidiaries and affiliates 7.1 7.9 12.8 16.1
---------------------------------------------------------------------
The results of unconsolidated subsidiaries at ICA are below last year, mainly due to the inclusion of the losses at ICA Banken ICA Banken is a Swedish bank established in February 2002. It is owned by the retail chain ICA AB and "...offers financial services to Swedish customers.". "ICA Banken makes it easier for customers of ICA's Swedish stores to manage their finances and in the process strengthens , ICA Ahold's financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. operation, which was deconsolidated effective December 2001. Minority interests Minority interests increased from Euro 28.0 million in 2001 to Euro 35.2 million this year. This is mainly caused by the following factors: -- Identical sales compare sales from exactly the same stores. -- Comparable sales are identical sales plus sales from replacement stores. -- Currency impact: the impact of using different exchange rates to translate the financial figures of our subsidiaries to Euros. The financial figures of the previous year are restated using the actual exchange rates in order to eliminate this currency impact. -- Pro forma earnings: reported earnings adjusted for the impact of goodwill amortization, exceptional items, results on the sale or divestment of tangible fixed assets and exchange rate differences as included in net financial income and expense. -- The interest coverage ratio is calculated as EBITA excluding exceptional items, divided by the net interest expenses. -- Net debt / EBITDA: Cash flow statement Cash flow from operating activities amounted to Euro 300.0 million (2001: Euro 570.6 million). Cash flow from operating activities was lower than last year primarily due to higher investments in working capital (Euro 395.1 million compared to Euro 180.6 million last year). Especially timing differences related to the collection of vendor allowances contributed to this development. Investments in tangible and intangible fixed assets amounted to Euro 526.9 million (2001: Euro 674.7 million). Divestments of tangible and intangible fixed assets amounted to Euro 234.1 million (2001: Euro 54.9 million) mainly related to sale and leaseback transactions in the U.S. and Europe. Depreciation and amortization amounted to Euro 424.6 million (2001: Euro 393.9 million). The ratio of investments in tangible and intangible fixed assets in relation to depreciation and amortization was 1.2 (2001: 1.7). The cash outflow related to acquisitions of Euro 618.8 million was mainly used to purchase the remaining shares in Disco Ahold International Holdings as well as for smaller acquisitions. Financing took place largely from cash balances. Group equity Group equity, expressed as a percentage of the balance sheet total, amounted to 18.9% (at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2001: 20.4%). Capital accounts amounted to 22.4% of the balance sheet total. Shareholders' equity was Euro 4.9 billion. In the third quarter of 2002, net earnings 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 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 were added to 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. . The cash portion of interim dividend on common shares was deducted de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. from shareholders' equity. Goodwill adjustments related to unused provisions for acquisitions prior to November November: see month. 2000 were added back to equity. Goodwill related to acquisitions through November 2000 was charged to shareholders' equity. Goodwill related to acquisitions after November 2000 was capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. .
Changes to shareholders' equity
----------------------------------------------------------------------
3rd quarter First three
quarters
x 1 million Euro 2002 2001 2002 2001
----------------------------------------------------------------------
Shareholders' equity opening
balance 4,775.9 3,159.8 5,892.1 2,502.6
Net earnings after preferred
dividend 248.7 295.5 358.7 914.7
Dividend paid on common shares (156.4) (31.3) (433.2) (94.1)
Exercise of stock options (2.0) 4.6 3.2 43.4
Issuance of shares - 2,501.7 0.1 2,501.9
Goodwill 15.9 - 16.0 (28.7)
Exchange rate differences and
other changes 0.3 (377.1) (954.5) (286.6)
-------- -------- -------- --------
Shareholders' equity closing
balance 4,882.4 5,553.2 4,882.4 5,553.2
----------------------------------------------------------------------
US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). reconciliation Under US GAAP, third quarter net earnings amounted to Euro 302.1 million (2001: net earnings of Euro 199.2 million). In particular, lower goodwill amortization related to the adoption on December 31, 2001, of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142"), contributed to higher net earnings under US GAAP than according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Dutch GAAP. This was partly offset by gains related to sale and operating leaseback A transaction whereby land is sold and subsequently rented by the seller from the purchaser who is the new owner. transactions, recognized as income according to Dutch GAAP, but amortized over the remaining period of the lease contract under US GAAP. Goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. On December 31, 2001, Ahold discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: amortizing goodwill under US GAAP. Ahold is required to test all goodwill for impairment by the end of 2002 under US GAAP. In the second quarter, an exceptional charge of Euro 430 million was booked mainly related to the default of former Argentine partner, Velox. By the end of 2002, the impairment test on the remaining goodwill under US GAAP will be finalized See finalization. and it is expected that this will lead to further goodwill impairment charges in the range of Euro 800 to Euro 900 million. Under Dutch GAAP, Ahold is also required to test capitalized goodwill for impairment. Goodwill related to acquisitions through November 2000 was charged to shareholders' equity. Goodwill related to acquisitions after November 2000 was capitalized. The goodwill that was capitalized is amortized over a period of maximum 20 years and is subject to an annual impairment test. In the second quarter, an exceptional charge of Euro 490 million was booked consisting of Euro 410 million related to the default of Velox, and Euro 80 million related to a goodwill impairment charge in Argentina. By the end of 2002 the impairment test on all capitalized goodwill will be finalized and it is expected that this will lead to further goodwill impairment charges in the range of Euro 50 to Euro 100 million. Revised outlook for full-year 2002 Ahold is revising downwards down·ward adv. or down·wards 1. In, to, or toward a lower place, level, or position: floating downward. 2. its full-year projected earnings per share target. The trading conditions, particularly in South America, continue to be difficult. Also the impact on financial expenses as a result of the default of Velox, the substantially increased average tax rate and fixed asset impairments in specific markets contribute to this revision. The company now anticipates its earnings per share target for 2002, including real estate gains of Euro 100-110 million, but excluding goodwill amortization, exceptional items and currency impact, at negative 6-8%, down from the target announced in July July: see month. of this year of plus 5 - 8%. Accounting principles Ahold's accounting principles are unchanged compared to the accounting principles as stated in the Ahold 2001 Annual Report. The data included in this press release are not audited. At present Dutch GAAP has already adopted the principles of various IAS/IFRS standards or allows the application of certain US GAAP standards such as SFAS 87 relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc accounting for pensions. Ahold will implement SFAS 87 for pension accounting before year-end 2002. In order to better address the demands of today's markets, Ahold will implement IAS/IFRS standards fully with effect from fiscal year 2004. Ahold initiative to strengthen core business Ahold is launching a three-year company-wide initiative with four main priorities: organic sales growth, cost reduction, capital efficiency and portfolio review. The objective is to focus on our core food businesses with a balanced portfolio and a solid financial position. The ambition Ambition Alger, Horatio author of a series of rags-to-riches stories. [Am. Lit.: Ragged Dick] Bart, Lily sacrifices her principles and her chance for love in schemes to climb the social ladder. [Am. Lit. is to grow faster than the market, but at the same time to generate substantial free cash flow in order to significantly reduce debt. To achieve its mission, and in response to difficult trading conditions worldwide and weak economic forecasts for the foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. future, Ahold is setting aggressive new goals. Internal targets are being established throughout the organization with specific focus on improvements in free cash flow, reductions in capital expenditure, working capital and operating costs operating costs npl → gastos mpl operacionales . These targets are an acceleration of the company's 'Economic Value Added' (EVA Eva to marry winner of singing contest. [Ger. Opera: Wagner, Meistersinger, Westerman, 225–228] See : Prize 1. Eva - A toy ALGOL-like language used in "Formal Specification of Programming Languages: A Panoramic Primer", F.G. ) program initiated in 2001. The company announced that it will also focus on its core businesses and strengthen positions in leading markets. All non-core businesses will be divested, either in whole or in part. Consistently under-performing core businesses will be rigorously scrutinized with a view to significantly improve performance or consider divestment divestment to strip one's investment from an entity. . Smaller acquisitions that will strengthen Ahold's core businesses and improve returns are still possible, but will be financed from internally generated funds. The company announced a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. performance share grant program to ensure the retention and motivation of key contributors, alignment Alignment is the adjustment of an object in relation with other objects, or a static orientation of some object or set of objects in relation to others.
Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. focus. The objective is to outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. a peer group of world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. by up to 50% over a three-year period. Performance will be measured in terms of total shareholder returns in line with market best practice. A maximum number of 9 million shares can be granted to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 1,500 associates by year-end 2005. The shares will be bought on the open market. No allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as takes place in case of average or less than average performance. Preliminary outlook 2003 reconfirmed Ahold reconfirms the preliminary outlook for 2003 as announced August 29, when the company issued its half-year 2002 earnings statement. More details will follow on March 5, 2003, the date of Ahold's full-year 2002 earnings statement. Definitions -- Organic sales development: (Sales year n) divided by (Sales year (n-1)(i) Ahold base + sales year (n-1)(i) of acquired companies(ii)) (i) Adjusted for currency impact. (ii) Applies to acquisitions dating back less than one year and to the extent that the sales of the acquired company represent greater than 5% of the sales of the acquiring entity, or that the acquisition is an entry into a new business channel or market area. -- Identical sales compare sales from exactly the same stores. -- Comparable sales are identical sales plus sales from replacement stores. -- Currency impact: the impact of using different exchange rates to translate the financial figures of our subsidiaries to Euros. The financial figures of the previous year are restated using the actual exchange rates in order to eliminate this currency impact. -- Pro forma earnings: reported earnings adjusted for the impact of goodwill amortization, exceptional items, results on the sale or divestment of tangible fixed assets and exchange rate differences as included in net financial income and expense. -- The interest coverage ratio is calculated as EBITA excluding exceptional items, divided by the net interest expenses. -- Net debt / EBITDA: Net debt includes long and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. interest bearing debt, netted with loans receivable and cash and cash equivalents, divided by the EBITDA excluding exceptional items. Editors' Note The third-quarter 2002 results press conference will be webcast on www.ahold.com at 12:30 p.m. CET CET abbr. Central European Time CET Central European Time CET n abbr (= Central European Time) → hora de Europa central CET abbr . The analyst conference call will also be webcast at 3:00 p.m. CET. To access, please click on the link on the homepage See home page. . Photographs related to this quarterly report can be obtained from the media section of the Ahold web site. Certain statements in this press release are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of U.S. federal securities laws and are intended to be covered by the safe harbors Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. created thereby. Those forward-looking statements include, but are not limited to, statements as to expected increases in sales, estimates in respect of earnings per share, cash flow and capital expenditure, expectations as to debt reduction, expectations with respect to opportunities for expansion and growth and in respect of goodwill impairment charges. Those forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in those forward-looking statements. Such factors include, but are not limited to, the effect of general economic conditions and changes in interest rates in the countries in which Ahold operates, particularly in 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 countries List of American countries Nations:
A price or interest rate change. in exchange rates between the Euro and the other currencies in which Ahold's assets, liabilities or results are denominated, in particular the U.S. Dollar and the Argentine Peso, can also influence the actual results as can other factors discussed in Ahold's public filings. Many of these factors are beyond Ahold's ability to control or estimate precisely. Readers are cautioned not to place undue reliance on such forward-looking statements, which only speak as of the date of this press release. For a more detailed discussion of such risks and other factors, see Ahold's Annual Report on Form 20-F for its most recent fiscal year. Ahold does not undertake any obligation to release publicly any revisions to those forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Outside 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. Koninklijke Koninklijke is an honorary title granted by the king or queen to certain companies and associations of Belgium and the Netherlands. The literal translation is "royal". Companies and associations requesting "royal" status must meet certain requirements before being approved, such as Ahold N.V., being its registered name, presents itself under the name of "Royal Ahold" or simply "Ahold".
Consolidated statement of earnings of Royal Ahold
-------------------------------------------------------------
3rd quarter First three quarters
x 1 million Euro 2002 change 2001 2002 change 2001
(unless otherwise (12 in % (12 (40 in % (40
indicated) weeks) weeks) weeks) weeks)
----------------------------------------------------------------------
Sales to third
parties
- U.S. Retail (in
dollars) 5,974.4 11.5 5,357.5 20,041.2 14.1 17,564.5
- U.S. Foodservice
(in dollars) 4,021.1 43.3 2,806.1 13,517.6 50.3 8,996.2
- Europe 5,551.8 6.7 5,204.0 17,192.4 6.0 16,218.6
- Latin America 586.0 (49.3) 1,154.9 2,113.0 (41.6) 3,617.8
- Asia 109.2 16.8 93.5 339.3 16.4 291.5
--------- --------- --------- ---------
Total sales 16,412.5 5.8 15,509.3 55,876.8 12.2 49,783.1
========= ========= ========= =========
Operating earnings
- U.S. Retail (in
dollars) 365.3 23.6 295.5 1,155.8 25.0 924.9
- U.S. Foodservice
(in dollars) 208.1 83.7 113.3 587.0 64.0 357.9
- Europe 191.7 2.6 186.8 554.0 (2.3) 566.8
- Latin America 1.7 (96.0) 42.8 39.7 (68.2) 124.8
- Asia (4.9)(19.5) (4.1) (17.3)(27.2) (13.6)
- Corporate costs (14.5)(23.9) (11.7) (46.3)(18.4) (39.1)
--------- --------- --------- ---------
Total operating
earnings 756.2 13.3 667.2 2,400.3 15.8 2,073.1
========= ========= ========= =========
Exceptional items - - (490.0) -
Goodwill
amortization (62.8) (36.6) (210.6) (112.5)
--------- --------- --------- ---------
Earnings before
interest & taxes 693.4 10.0 630.6 1,699.7 (13.3) 1,960.6
Net interest expense (223.5) (3.2) (216.5) (763.2) (6.5) (716.4)
Financing currency
differences (13.3) 24.2 (35.9) 89.9
Other financial
gains and losses (0.5) 0.2 (0.1) (0.3)
--------- --------- --------- ---------
Net financial income
and expense (237.3)(23.5) (192.1) (799.2)(27.5) (626.8)
========= ========= ========= =========
Earnings before
income taxes 456.1 4.0 438.5 900.5 (32.5) 1,333.8
Income taxes (170.4) (114.2) (428.2) (344.1)
--------- --------- --------- ---------
Earnings after
income taxes 285.7 (11.9) 324.3 472.3 (52.3) 989.7
Income from
unconsolidated
subsidiaries and
affiliates 7.1 7.9 12.8 16.1
Minority interests (35.2) (28.0) (97.0) (61.8)
--------- --------- --------- ---------
Net earnings 257.6 (15.3) 304.2 388.1 (58.9) 944.0
========= ========= ========= =========
Dividend preferred
financing shares (8.9) (8.7) (29.4) (29.3)
--------- --------- --------- ---------
Earnings common
shareholders 248.7 (15.8) 295.5 358.7 (60.8) 914.7
========= ========= ========= =========
----------------------------------------------------------------------
----------------------------------------------------------------------
Average number of
common shares
outstanding (x
1,000, adjusted for
stock dividend) 929,483 863,095 925,195 838,728
Earnings per common
share EUR 0.27(21.8) EUR 0.34 EUR 0.39 (64.4)EUR 1.09
EPS excluding
goodwill
amortization,
exceptional items
and currency impact EUR 0.34 (4.5) EUR 0.36 EUR 1.15 (1.1)EUR 1.17
Diluted earnings per
common share(1) EUR0.26 EUR 0.33 EUR 0.39 EUR 1.07
Operating earnings
as % of sales 4.6 4.3 4.3 4.2
Depreciation and
amortization (x 1
mln) 424.6 393.9 1,434.0 1,232.6
EBITDA excl.
exceptional items
(x 1 mln) 1,118.0 1,024.5 3,623.7 3,193.2
EBITDA excl.
exceptional items
as % of sales 6.81 6.61 6.49 6.41
Average exchange
rate of the Euro USD 0.98 USD 0.90 USD 0.93 USD 0.90
----------------------------------------------------------------------
(1) Calculated as follows: net earnings after preferred dividend,
adjusted for the interest expenses on the convertible subordinated
notes, divided by the weighted average number of common shares
outstanding, including the number of common shares that would have
been issued upon conversion of the convertible subordinated notes
and the exercise of stock options outstanding, in case this will
lead to a further dilution.
Reconciliation to pro forma earnings
----------------------------------------------------------------------
3rd quarter First three quarters
x 1 million Euro 2002 change 2001 2002 change 2001
(unless otherwise (12 in % (12 (40 in % (40
indicated) weeks) weeks) weeks) weeks)
----------------------------------------------------------------------
Net earnings as reported 257.6 (15.3) 304.2 388.1 (58.9) 944.0
Adjustments to operating
earnings:
Results on sale and
divestment of tangible
fixed assets:
- U.S. Retail (in dollars) (28.6) (4.3) (30.6) (5.0)
- U.S. Foodservice (in
dollars) (1.2) (0.1) (1.3) -
- Europe (16.4) (11.0) (36.8) (35.0)
- Latin America (1.7) - (2.0) 0.3
- Asia (0.1) - (0.1) -
------- ------- -------- -------
(48.5) (16.0) (71.6) (40.4)
Exceptional items - - 490.0 -
Goodwill amortization 62.8 36.6 210.6 112.5
Adjustments for financing
currency differences:
- Devaluation result
Argentina 12.1 - 32.0 -
- Results on financial
derivatives - (22.8) - (67.8)
- Other exchange rate
differences 1.2 (1.4) 3.9 (22.1)
------- ------- -------- -------
Subtotal adjustments before
income tax 27.6 (3.6) 664.9 (17.8)
Income taxes on adjustments 10.6 (0.4) 0.3 (5.3)
Minority interests on
adjustments 4.8 1.6 3.7 6.7
Income from unconsolidated
subsidiaries and
affiliates - goodwill
impact 2.8 - 2.8 -
------- ------- -------- -------
Total adjustments to
reported earnings 45.8 (2.4) 671.7 (16.4)
------- ------- -------- -------
Pro forma net earnings 303.4 0.5 301.8 1,059.8 14.3 927.6
Dividend preferred
financing shares (8.9) (8.7) (29.4) (29.3)
------- ------- -------- -------
Pro forma earnings common
shareholders 294.5 0.5 293.1 1,030.4 14.7 898.3
======= ======= ======== =======
Earnings per common
share EUR0.32 (6.8)EUR0.34 EUR1.11 3.9 EUR1.07
Consolidated statements of cash flows of Royal Ahold
----------------------------------------------------------------------
3rd quarter First three quarters
x 1 million Euro 2002 2001 2002 2001
(12 (12 (40 weeks) (40 weeks)
weeks) weeks)
----------------------------------------------------------------------
Cash flows from operating
activities
Earnings before tax 456.1 438.5 900.5 1,333.8
Adjustments for:
Depreciation and amortization 424.6 393.9 1,434.0 1,232.6
Devaluation Argentina 12.1 - 32.0 -
Exceptional items - - 490.0 -
Results on sale and
divestments of tangible
fixed assets (48.5) (16.0) (71.6) (40.4)
Changes in working capital (395.0) (180.6) (486.4) (879.4)
Changes in other provisions 13.7 2.7 (94.6) (240.9)
Income tax paid (163.0) (67.9) (379.1) (258.5)
-------- --------- ---------- ----------
300.0 570.6 1,824.8 1,147.2
======== ========= ========== ==========
Cash flows from investing
activities
Investments in tangible and
intangible fixed assets (526.9) (674.7) (1,793.8) (1,977.2)
Divestments of tangible and
intangible fixed assets 234.1 54.9 378.6 911.2
Acquisitions (618.8) (317.2) (817.8) (695.4)
Net change in investments in
unconsolidated subsidiaries (16.8) 7.4 (38.5) (29.5)
Change in loans receivable 1.2 (14.9) 43.0 (94.5)
-------- --------- ---------- ----------
(927.2) (944.5) (2,228.5) (1,885.4)
======== ========= ========== ==========
Cash flows from financing
activities
Change in long and short term
debt 124.9 33.9 (84.5) 193.8
Net proceeds from issuance of
shares (2.0) 2,506.2 3.2 2,545.1
Dividend paid (121.1) (51.9) (409.3) (125.6)
Changes in minority interests 18.0 6.2 (50.8) (14.2)
-------- --------- ---------- ----------
19.8 2,494.4 (541.4) 2,599.1
======== ========= ========== ==========
Exchange rate differences 80.3 (105.6) (43.7) (58.1)
-------- --------- ---------- ----------
Net change in cash and cash
equivalents (527.1) 2,014.9 (988.8) 1,802.8
Cash and cash equivalents at
beginning 1,457.3 1,165.6 1,972.3 1,335.6
Cash brought in through
acquisitions and new
(de-)consolidations 1.6 32.8 (51.7) 74.9
-------- --------- ---------- ----------
Cash and cash equivalents at
the end of this quarter 931.8 3,213.3 931.8 3,213.3
======== ========= ========== ==========
Consolidated balance sheet of Royal Ahold
-------------------------------------------
---------------------------------------------------------------
x 1 million Euro October 6, December 30,
2002 2001
------------------------------------------------------- --------
Assets
Current assets
Cash and cash equivalents 932 1,972
Receivables 3,651 4,005
Inventories 4,514 5,067
Fixed assets
Tangible fixed assets 12,957 14,072
Intangible fixed assets 5,337 5,649
Financial fixed assets 1,622 1,471
------- -------
29,013 32,236
======= =======
Liabilities and shareholders' equity
Current liabilities
Loans payable 2,583 1,849
Other current liabilities 8,062 9,221
Long-term liabilities
Long-term debt 10,091 10,795
Subordinated loans 1,011 1,780
Provisions 1,778 2,014
Minority interests 605 685
Shareholders' equity 4,883 5,892
------- -------
Group equity 5,488 6,577
------- -------
29,013 32,236
======= =======
Net interest-bearing debt 12,347 11,964
Ratios based on consolidated balance sheet
------------------------------------------------
----------------------------------------------------------------------
October 6, December 30,
2002 2001
----------------------------------------------------------------------
Number of common shares
outstanding (x 1,000) 931,042 920,979
Group equity/Total assets % 18.9 20.4
Capital accounts/Total assets % 22.4 25.9
Exchange rate of the euro for
balance sheet items USD 0.98 USD 0.88
Financial results under US GAAP
----------------------------------------------------------------------
----------------------------------------------------------------------
3rd quarter First three
quarters
2002 2001 2002 2001
x 1 million Euro (12 (12 (40 (40
weeks) weeks) weeks) weeks)
----------------------------------------------------------------------
Effects of conforming to US GAAP
Net earnings in accordance with Dutch
GAAP 257.6 304.2 388.1 944.0
Dividends on cumulative preferred
financing shares (8.9) (8.7) (29.4) (29.3)
------- ------- ------- -------
Net earnings in accordance with Dutch
GAAP applicable to common shares 248.7 295.5 358.7 914.7
Items having the effect of increasing
(decreasing) reported net earnings:
a) Goodwill 62.8 (77.1) 270.6 (246.2)
b) Pensions 5.3 0.4 15.8 10.1
c) Revaluation of real estate 0.4 0.4 1.2 1.5
d) Restructuring costs (4.0) - (29.8) -
e) Other provisions (3.2) 7.3 (20.4) (25.5)
f) Real estate gains (6.9) (5.4) (16.7) (65.2)
g) SFAS 133 2.5 (27.5) 47.1 (95.5)
h) Other adjustments (0.5) (1.3) (3.2) (4.0)
i) Income tax effects on reconciling
items (2.5) 1.2 (8.2) 37.7
j) Minority interest on reconciling
items (0.5) 5.7 0.7 23.0
------- ------- ------- -------
Net earnings in accordance with US
GAAP applicable to common shares 302.1 199.2 615.8 550.6
======= ======= ======= =======
Dutch GAAP results vary in certain significant respects from US
GAAP. For a detailed description of these differences, reference is
made to the Ahold 2001 Annual Report. In brief:
a) Goodwill: Under Dutch GAAP, goodwill is capitalized as per
December 1, 2000, and amortized on a straight-line basis over a period
no longer than 20 years. As per December 31, 2001, goodwill under US
GAAP is subject to SFAS 142, and is no longer amortized on a
straight-line basis, but tested on impairment. The impairment test
should be finalized by the end of 2002. In 2002, the amortization
under Dutch GAAP has been fully reversed.
f) Real estate gains: For 2002, the number includes a pro rata
portion of real estate gains, which were deferred in the past and
current years deferred results on sale and leaseback transactions. In
2001, the number mainly represents the deferral of sale and leaseback
of real estate gains under US GAAP.
g) SFAS 133: The 2002 reconciliation includes the amortization of
deferred gains from swaps that were terminated in 2001. The 2001
numbers include the transition adjustment resulting from the initial
application of SFAS 133 of Euro 27 million and the net reversal of a
gain on the termination of swaps, partly offset by the change in value
of foreign currency leases.
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