Retail strategy
is helping us
to meet our
customers'
expectations
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Message from Dick Boer, Ahold CEO
Dear shareholders,
Our strategy i Our performance
Governance
Financials
Investors
Ahold Annual Report 2013
O
In 2013, we have continued to see the food retail
industry evolve at a rapid rate. Our customers
expect more from us than ever before. They want
value for money, convenient shopping and help
managing their health and well-being with the right
products and information. While these changes
bring new challenges, they are also creating new
and exciting opportunities for future growth.
Our Reshaping Retail strategy is helping us to meet
our customers' expectations to create a better
offering every day while also building our vision of
being the food retailer of the future. Our ultimate
goal is to be able to bring our customers great
value and high quality, fresh products along with
the convenience of shopping in whatever way they
choose - and do it in a responsible way so we can
continue to earn the trust of our customers and
other stakeholders.
I'm proud of what we've done at Ahold over
the past year to enhance our customers'
experience and make it better, more personal and
more convenient.
Watch the CEO year in review
video on www.ahold.com l
2013 financial performance
We grew sales by 2.0% at constant exchange rates
in 2013, reflecting challenging market conditions,
with customers focused on value and cautious in
their spending. We slightly increased market share in
all our major markets. Supported by good progress
on our cost savings program, underlying operating
income remained almost flat at constant exchange
rates. We continued to generate strong free cash
flow, which exceeded €1.1 billion in 2013.
Moving towards a more
efficient capital structure
In March, we successfully divested our stake in ICA
to focus on businesses that we control and that
create value for our shareholders. Subsequently,
we increased our share buyback program from
€500 million to €2 billion, to be completed by
December 2014. In addition, our shareholders
approved a €1 billion capital repayment and reverse
stock split in an Extraordinary General Meeting
on January 21, 2014. We expect to complete the
transaction by the end of the first quarter of 2014.
We also propose a 7% increase in our dividend
to €0.47, reflecting the strong cash-generating
capacity of our business and our confidence in our
Reshaping Retail strategy. We remain committed to
our financial guidelines on leverage, liquidity and
credit rating. Going forward we aim to maintain
a balance between investing in profitable growth,
returning cash to our shareholders and reducing
debt and we will continue to move towards a more
efficient capital structure.
Getting better every day
In 2013, we rolled out our promises company-wide,
right down to the shop floor. Our commitments are
helping us to build a strong value proposition and
rally our entire organization around getting better
every day for our key stakeholders - our customers,
employees and communities.
We've built our promises into our business plans
and are starting to measure our performance
against them. Our associates have embraced them
and they are already starting to have an impact.
At the end of the day, what is important is that our
promises are not just words, but come to life for our
customers, our employees and the communities
we serve.
Building our brands
Our promises are helping us become a better place
to shop and strengthen our local brands. We're
investing in our own-brand product ranges, to
better meet the needs of our customers in tougher
economic conditions. In 2013 we launched a new
own-brand at Albert Heijn called AH BASIC for our
customers who want trusted Albert Heijn quality at
low prices. At the same time we also re-launched
and expanded our Simply Enjoy own-brand line
of premium products in the United States. We are
putting a strong focus on our Fresh offering across
the company, because the quality of our fresh
products is still the most important differentiator for
food retailers. We're working to further strengthen
customer loyalty in all our businesses. Already over
85% of our sales in the U.S. and 75% of our sales
in the Netherlands are made using loyalty cards.
Our Dutch business, Albert Heijn, launched a
new Bonus Card in 2013 that is unique in the
Netherlands and will help deliver more personalized
offers to customers.
The strength of our Albert Heijn brand has enabled
us to successfully expand across the border into
Belgium. Based on independent market research,
customers named Albert Heijn as the best regional
supermarket chain in Belgium.
