Operating income for our food service segment in Europe decreased by EUR 15 million, or 65.2%, to EUR 8 million in
fiscal 2002 compared to fiscal 2001. As a percentage of net sales, operating income was 0.9% in fiscal 2002 compared
to 2.6% in fiscal 2001. In fiscal 2002, operating expenses increased, as a percentage of net sales, primarily due to an
increase in pension costs in The Netherlands. The increase in pension costs largely resulted from the inclusion of employees
of the previously acquired Gastronoom in the pension plan of Ahold Pension Fund beginning in fiscal 2002. In addition,
pension costs increased because the poor performance of stock markets in fiscal 2002 had a negative influence on the
investment results of the Ahold Pension Fund, resulting in additional pension charges, pension premiums and payments
to the Ahold Pension Fund. The decrease in our operating income for our food service segment in Europe in fiscal 2002
compared to fiscal 2001 was mainly attributable to decreased net sales and higher operating expenses as discussed
- Fiscal 2001
Net sales increased by EUR 121 million, or 15.9%, to EUR 882 million in fiscal 2001 compared to fiscal 2000. This was
mainly due to the full-year consolidation of MEA, a Belgian food service operator that we acquired in October 2000. On
January 1, 2001, MEA began operating under the name Deli XL. Excluding MEA, net sales growth at Deli XL was moderate
in fiscal 2002 compared to fiscal 2001.
Operating income decreased EUR 1 million, or 4.2%, to EUR 23 million in fiscal 2001 compared to fiscal 2000. As a
percentage of net sales, operating income decreased from 3.2% in fiscal 2000 to 2.6% in fiscal 2001. The decrease in
operating income was primarily the result of an increase in operating expenses, as a percentage of net sales, mainly due to
the integration costs of former Grootverbruik Ahold and Gastronoom and the cost of rebranding both companies as Deli XL.
Other activities
Real estate
As of the end of fiscal 2002, we operated two real estate companies in the United States under the names Ahold Real
Estate Company ("ARC") and Ahold Real Properties ("ARP"), and one real estate holding company in The Netherlands
under the name Ahold Real Estate Europe B.V. ("ARE"). Our real estate companies are engaged in the acquisition,
development and management of store locations in the United States, The Netherlands, Spain, the Czech Republic,
Slovakia and Poland.
Production
In The Netherlands, we operate a food production company under the name "Ahold Coffee Company" (prior to fiscal 2002,
"Marvelo"). We are principally engaged in producing a portion of Albert Heijn's private label coffee products and selling
such products to third parties. Prior to fiscal 2001, we also produced and sold wine, tea, nuts, peanut butter and chocolate
spreads. In fiscal 2001, we sold these product lines to third parties, retaining our coffee production activities.
Financial center
In April 2002, we moved one of our main financial centers from Zaandam to Geneva, Switzerland. This center, Ahold
Finance Group (Suisse), focuses on third-party and intercompany financing and European cash management and plans to
coordinate payments to European vendors through a centralized payment system. Ahold Finance Group (Suisse) includes
our Treasury Corporate Finance department. We have taken this step in response to the uncertain future of the taxation
of intra-group financing activities within the European Union, of which Switzerland is not a member. We also have
financial centers in Chantilly, Virginia and Brussels, Belgium.
- Fiscal 2002
Our other activities consist primarily of real estate operations. Other activities also include net sales to third parties from
Ahold Coffee Company, our coffee production company in The Netherlands and corporate overhead costs of the Ahold
parent company. As a percentage of total net sales, the revenues from our other activities segment are insignificant.
The operating loss for the other activities segment was EUR 367 million in fiscal 2002 compared to operating income of
EUR 75 million in fiscal 2001. The fiscal 2002 operating loss was caused by an exceptional loss of EUR 372 million that
resulted from the default by VRH on certain indebtedness, which resulted in our parent company having to purchase, or
cause to be purchased, substantially all of VRH's shares in DAIH and to repurchase, or cause to be purchased, certain of
VRH's indebtedness. For additional information about the transaction with VRH, please see our financial statements.
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