Bompreco Reports 2000 Q2 Consolidated Results.

Business Editors

NOTE TO EDITORS: Financial Tables will follow this release in a separate transmission

RECIFE, Brazil--(BUSINESS WIRE)--August 14, 2000

Bompreco S.A. Supermercados do Nordeste (Bovespa: BPCO4; 144A: BMPA LX; e Reg S: BMPG LX) today reported consolidated results for the three-month period ended June 30, 2000. For this quarter, the consolidated net sales result of R$630.9 million represents an increase of 18.5 percent in comparison to the same period of last year - R$532.4 million. When adjusted for IGP-DI, net sales increased year-over-year by 4.2 percent, compared to a 0.8 percent decline in supermarket sales for the second quarter, as reported by the Brazilian Supermarket Association (ABRAS).

The following factors should be considered when analyzing the company's sales results for the second quarter:

-- A strong performance in sales of non-food products;

-- The opening of a hypermarket in the city of Itabuna, southern Bahia;

-- Sales of two hypermarkets and two supermarkets opened in the

fourth quarter of 1999 and in the first quarter of 2000; -- Sales related to the Easter holiday were concentrated in April,

while in the prior year they occurred mainly in March.

Consolidated gross profit for the second quarter increased by 30.9 percent to R$154.6 million, from R$118.1 million for the same period last year. Consequently, consolidated gross margin for the period improved to 24.5 percent, from 22.2 percent in the same quarter last year. This performance was mainly a result of company-wide improvements in the distribution network, as well as of gains from successful negotiations with the company's suppliers. It is worth highlighting the gross margin improvement verified at Bompreco Bahia, which has been continuously improving over the last quarters and increased year-over-year to 22.4 percent, from 20.8 percent in the second quarter of 1999.

Consolidated sales expenses for the quarter, as a percentage of net sales, rose to 17.5 percent from 14.7 percent in the same period last year, mainly as a consequence of an increase in rent expenses generated from the transfer, in December of 1999, of existing real estate property to a Specific Purpose Entity, which are rented to the Company. Consolidated administrative expenses for the period, as a percentage of net sales, decreased year-over-year to 2.6 percent, from 4.0 percent in the second quarter of 1999. Combined, consolidated operating expenses for the second quarter rose, as a percentage of net sales, to 20.1 percent, from 18.7 percent in the equivalent period of last year.

As a result of the gross profit improvement posted for the quarter, consolidated EBITDA increased by 50.7 percent to R$28.0 million, from R$18.6 million in the same period last year. As a percentage of net sales, consolidated EBITDA for the quarter increased to 4.4 percent from 3.5 percent in the year-ago period. EBITDA at Bompreco Bahia for the quarter improved year-over-year by 90.0 percent to R$8.4 million, from R$4.4 million in the equivalent period of last year. Consequently, consolidated EBITDA margin improved to 4.0 percent, from 2.5 percent in the same quarter last year.

Consolidated EBIT for the quarter increased to R$14.4 million, from R$8.0 million in the same period last year. Consolidated EBIT margin for the quarter improved year-over-year to 2.3 percent, from 1.5 percent in last year's same period.

For the quarter, Bompreco posted consolidated financial expenses of R$19.0 million, compared with R$4.9 million in the same period last year. This increase was mainly a result of a higher volume of short-term financing and a growth in the company's long term liabilities, related to the issuance of 35,000 debentures convertible into preferred shares during the fourth quarter of 1999. Consolidated financial revenues were R$29.2 million, compared with R$25.8 million in the same quarter last year.

As a result of the increase in consolidated financial expenses, the net income reported by the company was in line with the income posted in the second quarter of last year.

At June 30, 2000, HiperCard, Bompreco's main credit tool, counted approximately 1.5 million cardholders, of which more than nine hundred thousand were accountholders. HiperCard is accepted at all Bompreco's stores and in over 42,000 third-party retailers from Bahia to Maranhao.

HiperCard's operating revenues for the quarter increased year-over-year by 22.4 percent, while accounts receivable from clients rose by 27.8 percent to R$335.0 million. Regarding past due accounts, HiperCard accounts over 30 days past due for the quarter improved to 4.3 percent of total accounts receivable, from 5.4 percent in the same quarter of last year. Losses for the period were within expectations, around one percent of credit sales. For the first quarter, HiperCard reported a net income of R$6 million compared to an income of R$7 million in second quarter of 1999.

During the second quarter, Bomclube, Bompreco's loyalty program, was used in approximately 73 percent of all transactions carried out at the company's stores. To date, the program has awarded in excess of 3.7 million prizes to Bompreco's customers.

INVESTMENT PLAN

As part of the company's investment plan, in May Bompreco opened a compact hypermarket in southern Bahia. The store is located in a brand-new shopping center in the city of Itabuna, with a total selling area of 3,880 square meters and 27 check-outs. Going forward, Bompreco expects to open, by the end of the year, one hypermarket in the city of Fortaleza, state of Ceara, one compact hypermarket in the city of Vitoria da Conquista, state of Bahia, and two supermarkets, one in the city of Aracaju, state of Sergipe, and one in the city of Recife, state of Pernambuco.

In addition to the opening of a hypermarket and remodeling of existing units, Bompreco continued with construction works for a distribution center in the city of Jaboatao dos Guararapes, greater Recife, in the state of Pernambuco. Once completed, the new facility will occupy 100 thousand square meters over a total area of 292 thousand square meters. The company expects that the new, state-of-the-art distribution center, will increase centralization of merchandise distribution, while reducing costs and improving the level of customer services.

ACQUISITION BY ROYAL AHOLD

On May 23, 2000, a news release was published to inform the beginning of the negotiations between Royal Ahold and Mr. Joao Carlos Paes Mendonca's family, aiming the acquisition of their common shares. Negotiations were closed on June 26, 2000, having Royal Ahold, through its Brazilian subsidiaries, acquired 21,367,990 common shares from Mr. Joao Carlos Paes Mendonca's family, being from that date, the sole controlling shareholder of Bompreco, with the total 42,735,980 outstanding common shares issued by the company.

As a result of the acquisition, Mr. Joao Carlos Paes Mendonca, Chairman of the Board of Directors and of the Executive Board of Bompreco, has resigned from his functions. The Presidencies of the Board of Directors and of the Executive Board have been served, according to the company's By Laws, by Mr. Marcelo Tavares de Melo, former Vice-Chairman of the Board of Directors and of the Executive Board. All other members of the Board of Directors and of the Executive Board will remain in their functions until a new Chairman of the Board of Directors and new members of the Board of Directors and of the Executive Board are appointed through an extraordinary general shareholders' meeting.

Royal Ahold, whose participation in Bompreco dates from 1996, is an international food provider, operating around 7,000 supermarkets, hypermarkets and other types of retail businesses, with annualized sales of approximately 50 billion euros, serving 30 million customers every week in 23 countries. The synergies with Royal Ahold have allowed Bompreco an easier access to best practices in retailing, technology, engineering and store operation techniques. In addition, this partnership affords Bompreco access to vast international financial resources, capable of supporting the Company's plan of expansion and modernization. The acquisition of the controlling shares of Bompreco is part of Royal Ahold's consolidation strategy in Latin America.

Bompreco S.A. Supermercados do Nordeste is the largest chain of retail stores in the North and Northeast of Brazil in terms of sales. The company currently operates 102 stores, for a total selling area of 276,194 square meters over eight of the nine states that comprise the Northeast of Brazil. The company operates its stores through four formats, with 19 hypermarkets, 61 supermarkets, 19 minimarkets and 3 magazine stores. Gross sales for fiscal year 1999 were R$2.7 billion and EBIT of R$54.0 million. Bompreco's preferred shares are listed on the Bovespa in Brazil. The company's GDSs, each representing two preferred shares, trade on the Luxembourg Exchange. On June 30, 2000, Bompreco had 67,367,970 shares outstanding. For additional information, please refer to the company's web site at www.bompreco.com.br