In November 2001, Paiz Ahold entered into an agreement to establish CARHCO, a joint venture with CSU International,
a supermarket and hypermarket operator in Costa Rica, Nicaragua and Honduras. CARHCO was established in January
2002. Paiz Ahold holds a 66 2/3% stake and CSU International holds a 33 1/3% stake in CARHCO. The joint venture,
which brings together the retail activities of Paiz Ahold and CSU International in Central America, operated 289 food
stores in five countries as of the end of fiscal 2002 and had fiscal 2002 sales of approximately EUR 1.6 billion. CARHCO
now holds the stake in La Fragua that was formerly held by Paiz Ahold (which stake had increased to 85% as of
September 2003).
As of the end of fiscal 2002, La Fragua operated 116 stores in Guatemala, 27 stores in El Salvador and 12 in Honduras,
comprised of discount stores, supermarkets and hypermarkets. CSU, also a CARHCO subsidiary, operated 100 stores in
Costa Rica, 20 stores in Nicaragua and 14 stores in Honduras, comprised primarily of supermarkets and discount stores,
as of the end of fiscal 2002.
Luis Paez
In 1979, we became a 50% partner in Luis Paez, a winery based in Jerez de la Frontera, Spain. The main focus of the
business of this company is the production and distribution of beverages (alcoholic and non-alcoholic) under several brand
names. In August 1995, Luis Paez obtained full ownership of Williams Humbert, a prominent sherry retailer.
- Fiscal 2002
Our share in the losses from unconsolidated joint ventures and equity investees in fiscal 2002 was EUR 38 million
compared to EUR 192 million in fiscal 2001 primarily as a result of losses at DAIH in fiscal 2002 and fiscal 2001 and,
to a lesser extent, losses at Luis Paez included under "Others" in the table above. Our share in these losses was partially
offset by our share in income from our other joint ventures.
ICA, Scandinavia
In fiscal 2002, ICA, which operates in Scandinavia and the Baltic states, experienced a rise in net sales. In Sweden, ICA
had a strong performance in fiscal 2002, particularly in its supermarkets, its large Kvantum supermarkets and its MAXI
hypermarkets. In Norway, ICA improved its operating income despite losing market share. In fiscal 2002, operating income
was negatively affected by write-offs of tangible and intangible assets which were caused by events which occurred
subsequent to the end of fiscal 2002. Our share in the losses from unconsolidated joint ventures and equity investees
in fiscal 2002 reflected our share in income of EUR 61 million from ICA, compared to EUR 64 million in fiscal 2001.
JMR, Portugal
Due to the economic downturn in Portugal, JMR experienced lower net sales in fiscal 2002 compared to fiscal 2001 as a
result of lower net sales in both supermarkets and hypermarkets. As a result of higher gross profit margins and a stable
cost level, JMR's operating income in fiscal 2002 increased compared to fiscal 2001. Our share in losses from
unconsolidated joint ventures and equity investees in fiscal 2002 reflected our share in income of EUR 35 million from
JMR, compared to EUR 30 million in fiscal 2001.
CARHCO, Latin America
Our share in the losses from unconsolidated joint ventures and equity investees in fiscal 2002 and in fiscal 2001 included
income of EUR 9 million and EUR 13 million, respectively, from Paiz Ahold. Net sales of the Paiz Ahold joint venture
increased in fiscal 2002 compared to fiscal 2001 due to the addition of CSU and Corporación de Comparna
Agroindustriales ("CCA") following Paiz Ahold's formation of CARHCO, a new joint venture with CSU International, in
January 2002. Our share in income from Paiz Ahold in fiscal 2002 was lower than our share in income from the Paiz
Ahold joint venture in fiscal 2001. The lower net income in fiscal 2002 was caused by the addition of CSU and CCA to
the joint venture. CSU's operations had lower margins than La Fragua, the Central American supermarket and hypermarket
company 80.5%-owned by Paiz Ahold, and higher financing costs due to higher debt levels. Net sales at La Fragua
increased approximately 9% in fiscal 2002 compared to fiscal 2001. CARHCO also had a less favorable tax burden than
Paiz Ahold, particularly due to higher taxation levels in Costa Rica.
DAIH, Latin America
In fiscal 2002, our share in the loss of DAIH was EUR 126 million, compared to our share in the loss of DAIH of EUR
296 million in fiscal 2001. The decrease in our share in the loss of DAIH is due to the fact that DAIH ceased to be an
unconsolidated entity until July 2002, after which time we consolidated the results of DAIH. The main cause for the loss
at DAIH was a loss at Disco. The Disco loss resulted from the devaluation of the Argentine Peso, which caused losses on
US dollar-denominated loans. In fiscal 2002, the losses were offset in part by a change in Argentine law that
redenominated certain debts of Argentine companies from US dollar-denominated debt to Argentine Peso-denominated
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