SHARE IN INCOME OF JOINT VENTURES AND
ASSOCIATES
1 2004
ICA, Scandinavia
JMR, Portugal
INCOME FROM DISCONTINUED OPERATIONS
Euros in millions
2005
ICA, Scandinavia
96
97
JMR, Portugal
36
39
Other 1
23
2
Total share in income (loss) of joint
ventures and associates
155
138
1 Other includes our share in income of several real estate joint ventures. For more
information on our share in income of joint ventures and associates see Note 18
to our consolidated financial statements included in this annual report.
Our share in income of ICA decreased in 2005 despite the
full-year effect of the increase in our interest in ICA from
50% to 60% in November 2004. The reporting currency of
ICA is the Swedish krona ("SEK").
Net sales of our unconsolidated joint venture ICA amounted
to SEK 71,663 million (EUR 7.7 billion) in 2005, a
decrease of 2.3% compared to 2004 (SEK 73,334 million
(EUR 8 billion)). The decrease was primarily a result of
the de-consolidation of the Baltic operations and the sale
of the Danish operations. Excluding the impacts of the
de-consolidation of the Baltic operations and the sale of
the Danish operations, net sales in SEK increased by 3.8%
in 2005 compared to 2004. Net sales at ICA Sverige
increased, primarily due to the successful value
repositioning program. Net sales at ICA Norge decreased,
primarily due to competition, divestments of stores and the
conversion of company-operated stores to franchise stores.
Operating income of ICA in 2005 was positively impacted
by higher net sales at ICA Sverige and ICA Meny, and also
by higher volumes at ICA Banken as well as cost cuts at ICA
Sverige and ICA Norge. Operating income in 2004 was
positively impacted by the gain on the sale of ICA's 50%
interest in Statoil Detaljhandel and ICA's share in income of
Statoil Detaljhandel. Operating income in 2004 was,
however, negatively impacted by the write-down to market
value of the former Danish operations ISO-ICA A/S.
ICA Sverige reported a lower operating income in 2005
compared to 2004, primarily as a result of the value
repositioning program, the negative impact of which
primarily occurred in the first two quarters in 2005 due to
the timing of savings and costs. ICA Norge reported
increased operating income in 2005 primarily as a result of
cost cuts and higher gains on property sales. As reported by
ICA, ICA Meny and ICA's joint venture Rimi Baltic improved
their operating income substantially in 2005 compared to
2004, primarily as a result of higher net sales.
On February 22, 2006, ICA announced its intention to sell
ICA Meny.
Our share in income of JMR in 2005 decreased slightly
compared to 2004. Despite the continued strong
competition and the weak economy in Portugal, JMR
increased its net sales in 2005 compared to 2004, primarily
as a result of higher identical sales and an increase in the
number of its stores. Gross profit margin decreased in 2005
compared to 2004, mainly due to fierce price competition.
Operating income increased in 2005 primarily as a result of
higher net sales and lower operating costs. However, a
higher effective tax rate resulted in a lower net income in
2005 compared to 2004.
Income from our discontinued operations, which consisted
of operational results from discontinued operations and
result on divestments, decreased in 2005 to EUR 197
million compared to EUR 265 million 2004, primarily as
a result of higher gains on divestments in 2004.
In 2005, operational results of the discontinued operations
of G. Barbosa, Paiz Ahold, Deli XL and BI-LO and Bruno's
amounted to EUR 25 million mainly attributable to Paiz
Ahold (part of our former "Other Retail" segment) and
Deli XL, compared to an operational result in 2004 of
EUR 27 million mainly relating to BI-LO and Bruno's.
The decrease in operational results of the discontinued
operations in 2005 compared to 2004 was primarily a result
of the inclusion in income from our discontinued operations
in 2004 of the full-year results of BI-LO and Bruno's, which
we sold in January 2005. BI-LO and Bruno's operating
income in 2004 was somewhat offset by operating losses
related to certain under-performing assets that we sold
in 2004.
In 2005, our result on divestments decreased compared to
2004. In 2005, we realized a gain of EUR 172 million on
the divestments of Paiz Ahold, Deli XL, G. Barbosa, BI-LO
and Bruno's, compared to a gain on divestments of
EUR 238 million in 2004 relating to the divestments of
Bomprego Hipercard, Disco and our operations in Spain
and Thailand.
For more information on discontinued operations, see Note
12 to our consolidated financial statements included in this
annual report.
AHOLD ANNUAL REPORT 2005 65
