Management's discussion analysis
Schuitema results
(52 1
weeks) 1
U.S. Foodservice results
(52 1
weeks) 1
In March 2006, the arena sold two shopping centers in
Poland and one in the Czech Republic to a subsidiary of
ING Real Estate.
In March 2006, the arena sold two shopping centers in
Poland and one in the Czech Republic to a subsidiary of
ING Real Estate.
In 2006, the arena expects to continue to increase the
number of supermarkets and compact hypermarkets and
will seek to improve competitiveness through its pricing
policy and by rationalizing the product assortment,
including improvements in its offering of perishable and
private label products.
Net sales
The following table sets forth net sales, store counts and
sales area information for Schuitema in 2005 and 2004:
1 At year-end.
2 The sales area in thousands of square feet in 2005 and 2004 was 4,601 and
4,547, respectively.
Net sales in 2005 decreased compared to 2004 mainly as
a result of the additional week in 2004. Excluding week
53 of 2004, net sales increased by 0.2%. This increase
in net sales largely reflects the favorable impact of an
increase in sales space, partially offset by low price levels
as a result of fierce competition and the closing of
underperforming stores.
As of January 1, 2006, 315 of the 462 stores were
operated under the new C1000 format which provides for
larger stores with customer-appealing layouts, compared
to 284 as of January 2, 2005.
Schuitema's market share in 2005 decreased to 14.8%
compared to 14.9% in 2004, primarily as a result of weak
net sales in the last quarter of 2005 mainly as a result of
fierce competition.
Operating income
The following table sets forth information relating to
operating income for Schuitema in 2005 and 2004:
2005
2004
In millions, except
percentages
Change
(53
weeks)
Net sales in EUR
3,128
(1.7)
3,181
Operating income in EUR
95
41.8
67
Operating income as a
percentage of net sales
3.0%
2.1%
Change in gross profit
margin
0.8
Change in operating
expenses as a percentage
of net sales
0.1
Operating income at Schuitema increased in 2005
compared to 2004 primarily as a result of non-operational
effects in 2004. Excluding the impact of the EUR 74
million impairments in 2004 relating to stores, capitalized
commercial expenses and loan receivables, operating
income in 2005 was substantially lower compared to 2004.
The arena's gross profit margin increased in 2005
compared to 2004 primarily as a result of decreasing
expenditures for commercial activities and further cost
savings in logistics.
The arena's operating income in 2005 compared to 2004
was negatively impacted by week 53 of 2004.
In 2006, Schuitema will focus on maintaining and, where
possible, enhancing the market position of its C1000
store format, including efforts to improve its
organizational structure in order to support its future
activities, including the roll-out of its fourth generation
stores focusing on higher quality at lower prices.
Net sales
The following table sets forth net sales information for
U.S. Foodservice in 2005 and 2004:
2005
2004
In millions, except
percentages
Change
(53
weeks)
Net sales in EUR
14,872
(2.0)
15,170
Net sales in USD
18,468
(2.0)
18,847
Net sales as a percentage
of consolidated net sales
33.4%
34.0%
The decrease in net sales in U.S. dollars in 2005
compared to 2004 was largely attributable to the effect of
the additional week in 2004 and to U.S. Foodservice's
2005
2004
In millions, except
percentages, store count
(52
Change
(53
and sales area
weeks)
weeks)
Net sales in EUR
3,128
(1.7)
3,181
Company-operated stores 1
105
93
Associated stores 1
357
378
New stores
1
7
Closed stores
10
14
Sales area in thousands
of square meters 1 2
428
423
Net sales as a percentage
of consolidated net sales
7.0%
7.1%
72
