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Risk factors
Strategic risks
How we manage risk continued
Ahold
Annual Report 2010
Group at a glance
Performance
Fi nancials
Investors
The principal risk factors that may impede the achievement of Ahold's objectives with respect to
strategy, operations and compliance are described in the following section. The enterprise risk
management system, the governance and control standards incorporated into our ABC
Framework and the monitoring systems described above are the principal means by which we
manage these risks. Management is not aware of any important failings in these systems as of
year-end 2010.
The following discussion of risks relating to Ahold should be read carefully when evaluating its
business, its prospects and the forward-looking statements contained in this Annual Report.
Any of the following risks could have a material adverse effect on Ahold's financial position,
results of operations and liquidity or could cause actual results to differ materially from the
results contemplated in the forward-looking statements contained in this Annual Report.
We recognize different strategic, operational, financial and compliance and regulatory risk
categories. The risks described below are not the only risks the Company faces. There may
be additional risks that we are currently unaware of or risks that management believes are
immaterial or otherwise common to most companies, but which may in the future have a material
adverse effect on Ahold's financial position, results of operations, liquidity, and the actual outcome
of matters referred to in the forward-looking statements contained in this Annual Report.
For additional information regarding forward-looking statements, see the Cautionary notice.
Ahold may not be able to successfully implement its strategy or may not achieve the anticipated
benefits due to adverse macro-economic conditions and competitive pressures.
Our strategy for profitable and sustainable growth has several main areas of focus. We have
realigned our portfolio to focus on our core retail businesses in Europe and the United States,
building our individual retail banners into powerful local brands. We are using our continental
organizational structures to ensure that management decisions are made at the most appropriate
level and economies of scale and best practices can effectively be leveraged to support our local
operating companies. In addition, we are working to meet our financial targets, including a
€350 million cost reduction program, and have brought a more focused and coordinated
approach to our Corporate Responsibility program. For more information see Our strategy.
However, Ahold is subject to a number of risks, mainly macro-economic and competitive, that
may impair our ability to effectively implement our strategy or realize the anticipated benefits.
Risks related to macro economic circumstances
The global economic downturn that started in late 2007 has impacted all of the economies and
markets in which we operate, and a recovery is slow to materialize. High unemployment, reduced
consumer confidence and disposable incomes, and food and fuel price volatility can negatively
affect customer demand and may negate the results of investments we have made through our
value repositioning programs. The financial crisis has restricted the availability of credit in our
markets and limits governments' abilities to implement further fiscal stimuli. This may result in
sustained, sluggish growth in customer demand as shoppers remain price sensitive, cause the
failure of key suppliers, or otherwise disrupt our supply chains, impacting the cost and availability
of goods. As a result of the current economic climate, our competitors continue to take aggressive
actions. These factors or other unforeseen effects of the current economic climate could impair
the effectiveness of Ahold's strategy, reduce the anticipated benefits of its price repositioning and
cost savings programs or other strategic initiatives, and may have a material adverse effect on
the Company's financial position, results of operations, and liquidity.
Risks related to acquisition and integration
As part of our strategy, Ahold is pursuing growth in existing and new markets and is looking to
expand in non-food, e-commerce and other services. A lack of suitable acquisition targets at
acceptable prices may limit Ahold's growth. When acquiring other businesses, Ahold also faces
risks, for instance compliance and regulatory risks, related to the integration of these businesses.
In addition, Ahold is replacing its current IT infrastructure to make it fully scalable and replicable to
support Ahold's growth objectives. Anticipated IT synergies from newly acquired businesses will
only materialize after the current and planned IT systems and infrastructure projects have been
completed.
