13
Group performance
In 2010, we continued to provide value to our
customers and deliver solid financial results.
Overview
Ahold
Annual Report 2010
Group at a glance
Governance
Fi nancials
Investors
The repositioning actions of our businesses in recent years and our strong focus on the customer
have enabled us to increase volumes and market share in our major markets.
Market conditions remained challenging in 2010, with customers continuing to focus on value and
with high levels of promotional activity. In addition, cost inflation increased, particularly in the
second half of the year, and was not fully passed on to customers. Despite these conditions, we
successfully managed the balance between sales and margins, and increased market share and
volumes in the Netherlands and the United States.
In the Netherlands, Albert Heijn achieved another year of market share growth. Albert in the
Czech Republic improved its performance as a result of an enhanced commercial position, and a
lower cost structure. In the United States, we completed our reorganization of the businesses into
four geographic divisions with one executive leadership team and support organization. Giant
Carlisle acquired and integrated 25 former Ukrop's stores, Stop Shop integrated five former
Shaw's stores, and Giant Landover successfully completed Project Refresh, the three-year
program to remodel approximately 100 of its stores.
Net sales in 2010 were €29.5 billion, up 5.7 percent compared to 2009. At constant exchange
rates and excluding the impact of week 53 in 2009, net sales grew 4.4 percent. Our underlying
retail operating margin was 4.9 percent; excluding the acquired Ukrop's stores, it was 5.1 percent,
the same as in 2009.
We expect 2011 to remain challenging for the food retail industry. Although there are signs of a
gradual economic recovery, we expect consumers to remain focused on value and cautious in
their spending in an inflationary environment. We will continue to reduce costs so that we can
invest in our offering to improve the value we provide, while managing the balance between sales
and margin.
Reflecting the confidence we have in our strategy and our ability to generate cash, we propose
a 26 percent increase in our dividend to €0.29 per common share. Our strong balance sheet
enables us to launch a new €1 billion share buyback program for the next 18 months while
continuing to actively pursue our growth strategy and taking advantage of opportunities as
they arise.
At current exchange rates, we expect net interest expense for 2011 to be in the range of
€230 million to €250 million and capital expenditures to be around €0.9 billion.
