Ahold USA Names Tom Lenkevich New Giant/Carlisle President

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Corporately, the parent Ahold organization, based in Amsterdam, experienced a 1.1 volume decrease (based on constant exchange rates). In January, Ahold also restructured parts of its European operation with CEO Dick Boer assuming more direct responsibility for several divisions.

In regards to the company’s financial report, 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 (Value Added Tax) 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 euros. 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 percent 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 euros. As a result, the board has proposed a 7 percent increase in our dividend to 0.47 euros, reflecting a payout of 51 percent, 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 euros 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 euros 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.”