Royal Ahold (NYSE: AHO)
First Quarter Highlights:
- Earnings surge 50.6% to Euro 346.6 million
- Operating earnings climb 57.2% to Euro 711.0 million
- Earnings per share increase by 18.3% to Euro 0.41
- Sales rise 65.9% to Euro 18.2 billion
- Earnings per share growth for full-year 2001, excluding currency fluctuations, expected at 15%
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Royal Ahold (NYSE: AHO), the international food retail and foodservice company, today announced a 50.6% rise in first quarter 2001 earnings (first 16 weeks of the year through April 22, 2001) before goodwill amortization to Euro 346.6 million (2000: Euro 230.2 million). After goodwill amortization as of first quarter 2001, earnings total Euro 316.0 million. Earnings per common share before goodwill amortization rose 18.3% to Euro 0.41 (2000: Euro 0.35). Excluding currency fluctuations, mainly the higher average exchange rate of the U.S. dollar, earnings per share increased by 13.2%.
Remarks by Cees van der Hoeven, President & CEO Royal Ahold
Commenting on the first-quarter results, Ahold President & CEO Cees van der Hoeven said: ‘Once again our operating companies generated excellent results in the first quarter. In the United States, both our food retail and foodservice activities boosted earnings substantially. The costs of remodeling the Grand Union stores to the Stop & Shop and Tops format are incorporated in these results. In addition, operating losses at Peapod were smaller than anticipated. The integration of ICA in Scandinavia and Superdiplo in Spain strengthened our position in Europe, to which our Dutch operations also contributed significantly. Our Latin American activities had outstanding performance, certainly in the light of the economic circumstances in the region. Ahold is on track to deliver on its objectives for full-year 2001.’
Ahold 1st quarter 2001 results, compared to last year
x 1 million Euro 1st Quarter
——————————- ———————————
2001 2000 Change in %
——– ——– ———–
Sales 18,173.6 10,954.1 65.9
EBITDA 1,114.7 743.8 49.9
EBITDA as a percentage of sales 6.1 6.8
Depreciation of fixed assets 403.7 291.4 38.5
EBITA 711.0 452.4 57.2
EBITA as a percentage of sales 3.9 4.1
Goodwill amortization 39.8 –
EBIT 671.2 452.4 48.4
EBIT as a percentage of sales 3.7 4.1
——— ——– —–
Net earnings after
goodwill amortization 316.0 230.2 37.3
Net earnings before
goodwill amortization 346.6 230.2 50.6
——— ——– —–
Earnings per share
before goodwill amortization 0.41 0.35 18.3
——— ——– —–
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By GlobalData Sales and results in the first quarter were positively impacted by
the higher average exchange rate of the U.S. dollar (0.92 vs 0.98).
Consolidated sales rose 65.9% to Euro 18.2 billion (2000: Euro 11.0
billion). Excluding currency fluctuations, organic sales growth
amounted to 7.4% and organic earnings growth to 15.8%. Operational
cash flow (EBITDA) rose 49.9% to Euro 1,114.7 million. Operating
earnings before goodwill amortization (EBITA) increased by 57.2% to
Euro 711.0 million (2000: Euro 452.4 million). Earnings after goodwill
amortization (EBIT) amounted to Euro 671.2 million. Earnings per share
before goodwill amortization amounted to Euro 0.41, a rise of 18.3%.
Excluding currency impact, the rise amounted to 13.2%.
United States
1st Quarter
———————————
x 1 million USD 2001 2000 Change in %
————— ——– ——– ———–
Sales 10,237.7 6,399.9 60.0
Operating earnings 454.4 313.7 44.9
——– ——– —–
Sales in the United States rose 60% to USD 10.2 billion, mainly
reflecting the consolidation of U.S. Foodservice and PYA/Monarch.
Sales from Ahold’s retail operations in the U.S. grew to USD 6.8
billion. Organic retail sales rose 7.2%, comparable retail sales 3.3%
and identical retail sales 2.9%. All five Ahold USA retail operating
companies contributed to sales growth. U.S. Foodservice had sales of
USD 3.4 billion and organic sales growth amounted to 16.0%.
Operating earnings rose 44.9% to USD 454.4 million, partially
reflecting the consolidation of U.S. Foodservice and PYA/Monarch.
Operating earnings for retail amounted to USD 331.8 million. The costs
of remodeling the Grand Union stores (USD 13.9 million) were charged
to operating results. The operating loss of internet grocer Peapod
amounted to USD 14.4 million. Operating earnings for foodservice
amounted to USD 122.6 million.
Europe
1st Quarter
———————————
x 1 million Euro 2001 2000 Change in %
——– ——— ———–
Sales 5,692.5 3,200.0 77.9
Operating earnings 188.3 122.4 53.8
——– ——— —–
In Europe, sales rose 77.9 % to Euro 5.7 billion, mainly
reflecting the consolidation of the ICA Group in Scandinavia and
Superdiplo in Spain. In The Netherlands, sales were positively
impacted by Schuitema’s acquisition of the A&P stores. Albert Heijn
also had excellent sales growth. All European operating units
generated higher sales. Organic retail sales growth amounted to 8.0%.
Operating earnings rose 53.8% to Euro 188.3 million, partly
reflecting the consolidation of the ICA Group and Superdiplo. In The
Netherlands, Albert Heijn, Schuitema and Deli XL were the main
contributors to the increase in operating earnings. In the Czech
Republic, results improved over last year. The operating loss in
Poland is partially due to the cost of opening new hypermarkets. In
Portugal, operating earnings were virtually unchanged.
Latin America
1st Quarter
———————————-
x 1 million Euro 2001 2000 Change in %
——— ———- ———–
Sales 1,216.5 1,113.6 9.2
Operating earnings 47.2 28.7 64.5
——— ———- ———–
In Latin America, sales rose 9.2% to Euro 1.2 billion. Despite
difficult economic circumstances, all operating units achieved higher
sales. Organic retail sales growth amounted to 6.5%. Operating
earnings increased by 64.5% to Euro 47.2 million. All operating units,
particularly Bompreco in Brazil and Disco in Argentina, contributed to
the further increase in operating results.
Asia
1st Quarter
———————————-
x 1 million Euro 2001 2000 Change in %
——— ———- ———–
Sales 101.3 103.3 (1.9)
Operating earnings (4.9) (6.1) 19.7
——— ———- ——-
In Asia, the impact of currency fluctuations marginally depressed
sales compared to last year, although in local currency sales were
higher. Operating losses for the region amounted to Euro 4.9 million
(2000 loss: Euro 6.1 million).
Corporate costs
Corporate costs amounted to Euro 15.1 million (2000: Euro 13.0
million).
Net financial expense
1st Quarter
———————————-
x 1 million Euro 2001 2000 Change in %
——— ———- ———–
(228.2) (128.4) 77.7
——— ———- ——-
Net financial expense rose to Euro 228.2 million, mainly
reflecting financing of acquisitions and consolidation of interest
expenses at U.S. Foodservice, PYA/Monarch, the ICA Group and
Superdiplo. The rolling interest coverage ratio was 3.1. The rolling
ratio of net interest-bearing debt to EBITDA was 2.7.
Tax rate
The tax rate, expressed as a percentage of pre-tax earnings, was
25.3% (2000: 26.5%).
Group equity
Group equity, expressed as a percentage of the balance sheet
total, amounted to 13.4% (at year end 2000: 12.5%). Assuming
conversion of the convertible subordinated notes outstanding, group
equity amounts to 19.7%. Capital accounts amounted to 20.3% of the
balance sheet total (at year end 2000: 19.5%). Stockholders’ equity
amounted to Euro 2.8 billion. In the first quarter of 2001, net
earnings after deduction of the dividend on preferred shares were
added to stockholders’ equity. In addition, the proceeds from
exercised option rights were added to stockholders’ equity. The
negative balance of exchange rate fluctuations was deducted from
stockholders’ equity. Goodwill related to acquisitions through
November 2000 was charged to stockholders’ equity. Goodwill related to
acquisitions after November 2000 was capitalized.
Changes to stockholders’ equity
x 1 million Euro 1st Quarter
——————————–
2001 2000
——————————–
Stockholders’ equity
at beginning of quarter 2,502.6 2,351.9
Net earnings after preferred dividend 304.3 226.4
Exercise of stock options 26.2 1.4
Goodwill adjustment (40.3) (57.1)
Exchange rate
differences and other changes (26.4) 207.6
——— ——–
Stockholders’ equity at end of quarter 2,766.4 2,730.2
——— ———
Outlook for full-year 2001 confirmed
The Corporate Executive Board expects that sales and operating earnings will improve in all trade areas in 2001, reflecting increased organic growth as well as the contribution of recent acquisitions. It is anticipated that net earnings will be strongly higher. Earnings per share, excluding currency fluctuations and goodwill amortization are expected to be 15% higher than in 2000. Earlier disclosed extraordinary items are included in this expectation.
Definition of terms:
1 Organic sales exclude sales from acquisitions and currency fluctuations.
2 Identical sales compare sales from exactly the same stores.
3 Comparable sales are identical sales plus sales from replacement stores.
Royal Ahold
Royal Ahold operates approximately 8,500 supermarkets, hypermarkets and other store formats in the United States, Europe, Latin America and Asia with consolidated 2000 sales of close to USD 50 billion (Euro 52.5 billion). The company also has a significant presence in the foodservice sector and is swiftly developing its position in internet-based home delivery. Ahold employs almost 420,000 associates and serves the food needs of over 35 million customers and more than 200,000 foodservice accounts in 25 countries every week. Ahold’s website can be found at www.ahold.com.
Editor’s Note
Graphics and photos related to this quarterly report can be obtained from the media section of www.ahold.com.
This Royal Ahold press release contains `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, as more fully discussed in Royal Ahold’s annual report.
Consolidated statement of earnings of Royal Ahold
1st Quarter
x 1 million Euro 2001 increase 2000
(unless otherwise indicated) (16 weeks) in % (16 weeks)
———- ———- ———-
Sales to third parties
– United States (in dollars) 10,237.7 60.0 6,399.9
– Europe 5,692.5 77.9 3,200.0
– Latin America 1,216.5 9.2 1,113.6
– Asia Pacific 101.3 (1.9) 103.3
——– ——–
Total sales 18,173.6 65.9 10,954.1
======== ========
Operating earnings
– United States (in dollars) 454.4 44.9 313.7
– Europe 188.3 53.8 122.4
– Latin America 47.2 64.5 28.7
– Asia Pacific (4.9) 19.7 (6.1)
– Corporate costs (15.1) (16.2) (13.0)
——– ——–
Total operating earnings 711.0 57.2 452.4
======== ========
Goodwill amortization (39.8) –
——– ——–
Earnings before interest & taxes 671.2 48.4 452.4
Net financial income and expenses (228.2) (128.4)
——– ——–
Earnings before income taxes 443.0 36.7 324.0
Income taxes (112.3) (85.7)
——– ——–
Earnings after income taxes 330.7 38.8 238.3
Income from unconsolidated
joint ventures and associates 3.3 0.4
Minority interests (18.0) (8.5)
——– ——–
Net earnings 316.0 37.3 230.2
======== ========
Dividend preferred shares (11.7) (3.8)
——– ——–
Ratios
1st quarter
2001 2000
(16 weeks) (16 weeks)
———- ———-
Average number of common
shares outstanding (x 1,000)(1) 817,267 653,955
Earnings per common share
(before goodwill amortization)(2) EUR 0.41 0.35
Earnings per common share
(after goodwill amortization)(2) EUR 0.37 0.35
Diluted earnings per common share(3) EUR 0.37 0.34
Operating results as % of sales 3.91 4.13
Depreciation and
amortization (x 1 million) EUR 443.5 291.4
Operating earnings
before depreciation and
amortization (x 1 million) EUR 1,114.7 743.8
Operating earnings before
depreciation and
amortization % of sales 6.13 6.79
Earnings after
income taxes as % of sales 1.82 2.18
Average exchange rate of the euro USD 0.92 0.98
——— ——-
(1) Number of shares has been adjusted for stock dividends.
(2) Earnings per common share are calculated on the basis of the
average number of common shares outstanding and after the
deduction of dividend on preferred shares.
(3) 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 rights outstanding.
Consolidated balance sheet of Royal Ahold
———————————————————————-
x 1 million Euro April 22, 2001 December 31, 2000
———————————————————————-
Cash and cash equivalents 1,203 1,336
Receivables 3,578 3,426
Inventories 4,172 4,100
Intangible fixed assets 3,142 3,153
Tangible fixed assets 12,435 12,232
Financial fixed assets 1,248 1,214
———- ————–
25,778 25,461
========== ==============
Current liabilities 10,134 10,221
Long-term debt 8,603 8,520
Provisions 1,811 1,760
Subordinated loans 1,780 1,780
Minority interests 684 677
Shareholders’ equity 2,766 2,503
———- ————–
Group equity 3,450 3,180
———- ————-
25,778 25,461
========== =============
Net interest-bearing debt 11,286 10,940
========== =============
Capital accounts 5,230 4,960
========== =============
Ratios
April 22, 2001 December 31,
2000
———————————————————————-
Number of common
shares outstanding (x 1,000) (4) 817,920 816,849
Group equity/Total assets % 13.4 12.5
Capital accounts/Total assets % 20.3 19.5
Exchange rate of the euro
for balance sheet items USD 0.90 USD 0.94
Group equity/Total assets
in % under the assumption
as if the convertible
subordinated bonds
were fully converted 19.7 18.9
———————————————————————-
(4) Number of shares has been adjusted for stock dividends.
Consolidated statements of cash flows of Royal Ahold
1st Quarter
(16 weeks)
x 1 million Euro 2001 2000
———————————————————————–
Cash flows from operating activities
Net earnings 316.0 230.2
Minority interest
in earnings 18.0 8.5
Depreciation and amortization 443.5 291.4
Unremitted earnings of
unconsolidated associates (2.4) 0.6
Changes in working capital
and provisions (755.4) (94.1)
Changes in deferred income taxes 37.4 (3.4)
————– ————-
57.1 433.2
============== =============
Cash flows from
investing activities
Net investments in tangible
and intangible fixed assets 96.7 (389.3)
Acquisition and sale
of subsidiaries (230.3) (3,019.6)
————– ————-
(133.6) (3,408.9)
============== =============
Cash flows from
financing activities
Net change in loans
receivable/payable (105.8) 3,166.6
Net proceeds from
issuance of shares 26.2 1.4
Changes in minority interests (30.2) (2.0)
————– ————-
(109.8) 3,166.0
============== =============
Exchange rate differences 12.1 54.8
————– ————-
Net change in cash and
cash equivalents (174.2) 245.1
Cash and cash equivalents
at beginning of quarter 1,335.6 887.6
Cash brought in
through acquisitions
and new consolidations 41.7 4.6
————– ————-
Cash and cash equivalents
at end of quarter 1,203.1 1,137.3
============== =============
Accounting principles:
The accounting principles are unchanged compared to the accounting
principles as used at year-end 2000.
The data included in this press-release are unaudited.
