CEO Dick Boer said: “In the fourth quarter our sales remained broadly flat at constant exchange rates, adjusted for the impact of Hurricane Sandy in 2012 and VAT from tobacco sales in the Netherlands in 2013, reflecting a low level of inflation and pressure on volumes. Our underlying operating margin was somewhat under pressure, while our free cash flow remained strong at €0.5 billion.
“In a challenging environment customers remained focused on value and were cautious in their spending, particularly in the second half of the year. For the year we grew sales by 2.0% at constant exchange rates and 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. Free cash flow exceeded last year’s record at €1.1 billion. As a result, the Board has proposed a 7% increase in our dividend to €0.47, reflecting a payout of 51%, slightly above the top end of our dividend policy range.
“In 2013, we continued to implement our Reshaping Retail strategy, leveraging changing consumer needs and pursuing growth opportunities in both existing and new markets. We also continued to rapidly expand our online businesses, achieving strong double-digit sales growth.
“After the successful divestment of our stake in ICA, 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. This is in addition to our €2 billion share buyback program that is to be completed by December 2014.
“We remain committed to our financial guidelines for 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 toward a more efficient capital structure.
“While we expect economic conditions to gradually improve, we remain cautious in our outlook for the food retail sector in 2014. Our ongoing focus on expanding our online businesses is expected to continue to result in strong sales growth. We will continue to look for ways to simplify our business in order to reduce costs so that we can invest in our value proposition and offer customers a better shopping experience every day.”
This summary report includes forward-looking statements, which do not refer to historical facts but refer to expectations based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those included in such statements. These forward-looking statements include, but are not limited to, statements as to Ahold’s dividend, Reshaping Retail Strategy, capital repayment and reverse stock split, share buyback, leverage and credit rating, balance between investing in profitable growth and returning cash to shareholders, capital structure, online business, Ahold improving its competitive position through cost reductions and the overall simplification of its processes, Ahold’s continued investments in growth in existing and new markets and rapid expansion, market conditions, Ahold’s investments in competitiveness, new accounting policies, Ahold’s divestment of its Slovak operations, Stop & Shop’s agreement with NETTI and the vesting of GRO shares and the use of treasury shares for their delivery. These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond Ahold’s ability to control or estimate precisely, such as the effect of general economic or political conditions, fluctuations in exchange rates or interest rates, increases or changes in competition, Ahold’s ability to implement and complete successfully its plans and strategies, the benefits from and resources generated by Ahold’s plans and strategies being less than or different from those anticipated, changes in Ahold’s liquidity needs, the actions of competitors and third parties and other factors discussed in Ahold’s public filings and other disclosures. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this summary report. Ahold does not assume any obligation to update any public information or forward-looking statements in this summary report to reflect subsequent events or circumstances, except as may be required by applicable laws. Outside the Netherlands, Koninklijke Ahold N.V., being its registered name, presents itself under the name of “Royal Ahold” or simply “Ahold.”
Fourth Quarter 2013 Revenues
Frans Muller, President and Chief Executive Officer of Delhaize Group said: “Our fourth quarter 2013 sales were strong both in the U.S. and in Belgium. In the U.S., where volume growth continued to be positive, we were especially pleased with Food Lion’s momentum. The phase repositioning, started almost 3 years ago, is meeting our expectations and we look forward to further develop Food Lion’s customer proposition this year. Despite the ongoing competitive trading conditions, our operations in Belgium delivered solid year-end sales. In the face of a challenging economy in Southeastern Europe our businesses in Greece and Romania posted good sales growth while Serbia´s performance remained below expectations.”
“At approximately €770 million at identical exchange rates, our preliminary unaudited underlying operating profit for 2013 is consistent with the guidance provided during the year. As a result of our solid EBITDA, capital allocation discipline and further focus on working capital improvements, we generated a free cash flow of approximately €670 million in 2013. This will provide us with further means to support our core businesses, expand our store network in select markets and strengthen the balance sheet.”
“In 2014, we will maintain our efforts to grow revenue by further improving our customer proposition. Additionally, we will seek to further reduce complexity and costs, remain disciplined with respect to capital allocation and ultimately continue to deliver healthy free cash flow.”