36
Financial risks
How we manage risk continued
Ahold
Annual Report 2010
Group at a glance
Performance
Fi nancials
Investors
Risks related to corporate responsibility
Increased regulatory demands, stakeholder awareness and the growing sentiment that large
retailers must address sustainability issues across the entire supply chain mean that Ahold's
brand and reputation may suffer if it does not adequately address relevant corporate responsibility
issues affecting the food retail industry. Furthermore, if we fail to effectively increase the fuel and
energy efficiency of our operations or to reduce waste, our operational and cost competitiveness
may be adversely affected. We continue to develop a broad range of coordinated and focused
programs to address issues such as climate change, energy efficiency, waste reduction, social
accountability, healthy living, community engagement, and corporate responsibility reporting. If
these programs are not successful or are otherwise inadequate, Ahold's reputation and
competitive position could suffer. See Ahold's Corporate Responsibility Report 2010 for additional
information about our policies and programs in this area.
Risks related to business transformation
Ahold has made changes in its European and U.S. businesses to create strong platforms for
future growth. The reorganization in both continents has delineated areas of responsibility and
further simplified and standardized processes and structures so that the Company can integrate
acquisitions more easily. These projects were carefully planned and changes are being
implemented with a high degree of ongoing attention from executive management. However,
it is possible that some transformation initiatives will not be fully effective. These transformation
activities could cause disruption as systems, processes and resource talent have recently
changed, and this disruption could adversely affect Ahold's financial position, results of
operations, and liquidity.
Risk related to large strategic projects
In order to achieve Ahold's strategic agenda and as a result of the way the Company is currently
organized, activities will increasingly be undertaken in the form of projects. If Ahold is not able to
execute and deliver major strategic projects on time and within budget, the realization of key
strategic objectives may be at risk, and unnecessary expenditure of financial and management
resources incurred. This could have a material adverse effect on Ahold's financial position, results
of operations, and liquidity.
Risks related to contingent liabilities associated with lease guarantees
Following the divestment of subsidiary businesses, such as BI-LO Bruno's and Tops, and the
closure of certain other facilities, Ahold has outstanding contingent liabilities to third parties
relating to lease guarantees it has issued. Ahold may face financial exposure in the event that
some of these divested businesses encounter financial difficulty or go into bankruptcy, which
could have a material adverse effect on Ahold's financial position, results of operations, and
liquidity. For further information, see Note 34 to the consolidated financial statements.
