- Fiscal 2001
Net sales at Albert Heijn increased by EUR 208 miiiion, or 4.0%, to EUR 5.4 billion, in fiscal 2001 compared to fiscal
2000. The increase in net sales was caused by a change in the layout of Albert Heijn store formats in order to optimize
both assortment and store space, as weii as the introduction of new non-food products, together resulting in an increase in
identical store sales of 3.6%. Additionally, in fiscal 2001, Albert Heijn rebounded from a price war that affected aii
competitors in The Netherlands during fiscal 2000.
Operating income at Albert Heijn increased by EUR 51 miiiion, or 26.0%, to EUR 247 miiiion in fiscal 2001 compared to
fiscal 2000. As a percentage of net sales, operating income was 4.6% in fiscal 2001 compared to 3.8% in fiscal 2000.
The increase in operating income was attributable partly to the end of the price war that occurred in fiscal 2000 and
partly to an improvement in gross profit margin in fiscal 2001, due in part to a reduction of iow-margin products offered.
This was partially offset by an increase in operating expenses in fiscal 2001, primarily as a result of increases in wages
and employee benefits.
Retail trade: Other Europe
The Netherlands
Other retail trade operations in The Netherlands includes our specialty retail trade operations. We acquired these specialty
retail trade operations in order to expand the range of products that we offer to our Dutch retail customers including, in
certain instances, products which we are not able to seii in supermarkets due to restrictions under Dutch law on the sale
of liquor and prescription drugs. These specialty retail trade operations include Gaii Gaii B.V. ("Gall Gall"), Etos B.V.
("Etos") and, until May 2003, De Tuinen, which operated as a subsidiary of Etos. Gaii Gaii operates wine and liquor
stores, Etos operates stores specializing in health and beauty care and, in certain stores, prescription drugs and De Tuinen
operates stores offering natural health and beauty care products. As of the end of fiscal 2002, Gaii Gaii operated 315
stores and supplied 174 franchise stores, while Etos operated 234 stores, including 65 De Tuinen stores, and supplied
256 franchise stores. In December 2002, we announced our intention to divest De Tuinen through a sale to NBTY Inc.
("NBTY"), a U.S.-based, publicly held company. This transaction was completed in May 2003. As of the end of fiscal
2002, other specialty operations also included 142 confectionery stores (mainly franchise), operating under the name
"Jamin." In June 2003, we divested Jamin through a management buy-out.
We also own 73.2% of the outstanding shares of Schuitema, a Dutch retail and wholesale company that owns supermarkets
and also provides retail support to independent retailers and associated stores. As of the end of fiscal 2002, Schuitema
owned 37 supermarkets and provided goods and services to 450 independent and associated food retailers mainly
operating under the trade name "C1000." Schuitema also supports these independent and associated retailers on a
commercial level by providing branding and support services, including the ability to benefit from bulk purchasing and an
increase in bargaining power in entering into certain contracts. Schuitema also owns 87 former A&P stores, aii of which
have been converted to the C1000 format. Prior to fiscal 2002, the sales to the associated stores were classified as part
of our former "Food wholesaling and food supply" business segment, but since then they have been included in our
"Retail Trade" business segment. Schuitema is subject to a different corporate governance regime than our other Dutch
subsidiaries.
In October 2001, our Dutch subsidiaries, including food service provider Deli XL B.V. ("Deli XL"), began offering a new
joint internet-based home delivery service called "Albert." Customers in The Netherlands can access our Dutch retail
stores through www.aibert.nl and buy from aii of our stores in one order.
Central Europe
We have retail trade operations in Poland, the Czech Republic and Slovakia.
In 1995, we established a 50/50 joint venture with German retailer Allkauf-Gruppe to develop retail trade operations in
Poland. In January 1999, we purchased Allkauf-Gruppe's share of the joint venture and renamed the company Ahold
Polska Sp. z.o.o. ("Ahold Polska") in February 1999. As of the end of fiscal 2002, Ahold Polska operated 160
supermarkets under the name "Albert," ten compact hypermarkets and 14 hypermarkets under the name "Hypernova."
In August 2002, through our wholly-owned subsidiary Ahold Polska, we completed our acquisition of five Jumbo
hypermarkets from JMR. The Jumbo hypermarkets are on the outskirts and in residential areas of Poznan, Lódz and
Bydgoszcz and have been rebranded as Hypernova compact hypermarkets. The successful conversion of aii stores into one
supermarket format (Albert) and one compact hypermarket format (Hypernova) has improved Ahold Polska's position and
operational performance in the highly competitive Central European food retail market.
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