Tuesday, May 16, 2000
Royal Ahold, the food provider, will continue its rapid growth in years to come. 'Our company is sometimes described as acquisitive, and we are certainly that at the right moment, but over time, nearly all our current activities have developed more rapidly than the market and faster than almost all our competitors,' said Ahold President & CEO Cees van der Hoeven at the Annual General Meeting of Stockholders of Royal Ahold in The Hague today.
The Ahold president also disclosed the company's consolidated sales in the first quarter of the year (16 weeks through April 22, 2000), which increased by 18.1% to Euro 11.0 billion. Stockholders approved the financial statements as well as the 1999 final dividend proposal.
Commenting on the successful combined global offering of common shares and subordinated convertible notes, Van der Hoeven said the proceeds of Euro 3.2 billion would 'facilitate the funding of the company's continued expansion.'
Healthy, profitable growth
Van der Hoeven emphasized that Ahold's strategy remains focused on healthy, profitable growth of its current operations. 'In addition, we generate considerable growth by acquiring new companies capable of making an important contribution,' he said. 'We support our autonomous and external growth with the help of state-of-the-art technology, constant innovation and advanced sales and distribution channels that assist us in offering tailored products and services to some 30 million customers every week. This proposition enables us to become the world's best and most successful food provider,' said the Ahold president.
Innovation a way of life
'Ongoing innovation is a way of life at Ahold,' Van der Hoeven told the approximately 1,200 attending stockholders. 'Those of you who follow our company closely see new technological applications, creative ideas and dynamic activities taking place somewhere in the world of Ahold on a day-to-day basis. These initiatives reflect the capacity of our local management and associates to run and develop our operations more efficiently and effectively.'
Multi-channel strategy
Previewing Ahold's future, Van der Hoeven noted that 'by stepping up our activities in the food service market and in e-commerce and by introducing new initiatives such as financial services, we are positively impacting the value of our proposition to the consumer. Our multi-channel approach is unique in our industry, enabling us to satisfy customer requirements at many more moments in time and at far more places than simply through our prominent food retail channels. This is a welcome development, because more and more people are eating out of home and growth in this segment is just taking off. Our strategy positions us optimally to achieve our mission of becoming the world's best and most successful food provider,' the Ahold president said.
Boosting earnings per share
Reviewing the successful completion of the global offering, Van der Hoeven stated unequivocally that Ahold's earnings per share have never been diluted through the issue of new equity. 'We use the newly-issued stock to acquire profitable companies that generate additional growth and boost earnings per share. Moreover, our company is able to make an immediate impact on the results of both the newly-acquired company and our existing operations through synergy benefits, cost cuts and economies of scale.'
2000 first quarter sales up 18.1% to Euro 11.0 billion
Van der Hoeven commented on the sales performance of all trade areas in the first quarter of the year 2000. Ahold generated consolidated sales (excluding VAT) over the first 16 weeks (through April 22, 2000) of Euro 11.0 billion, a rise of 18.1% over the 1999 first quarter. In the U.S., sales rose 5.0% to USD 6.4 billion. In Europe, sales increased by 11.0% to Euro 3.2 billion. In Latin America, sales surged 44.9% to Euro 1.1 billion while in Asia, sales amounted to Euro 103.3 million.
Strongly higher net earnings expected for full-year 2000
Concluding his address, Van der Hoeven reiterated that profitable growth, both organic and external, is a fundamental part of Ahold's strategic mission. 'Sales and operating results are expected to improve further in all Ahold trade areas, reflecting healthy autonomous growth and new acquisitions,' he said. 'We anticipate net earnings will be strongly higher than in 1999. Including the acquisition of U.S. Foodservice and excluding currency impact, we now expect earnings per share growth for the full-year 2000 to rise from the 15% projected earlier to 17-20%.'
Financial statements and final dividend proposal approved
Stockholders approved Ahold's financial statements and the company's 1999 final dividend proposal. Stockholders can elect to receive the final dividend of Euro 0.35 per common share of NLG 0.50 par value as a cash sum or in the form of a pay-out of 2% in common shares. The dividend will be made payable as of May 24, 2000. The total dividend for 2000, including the interim dividend of Euro 0.14 already made payable on September 6, 1999, amounts to Euro 0.49 per common share. Stockholders also approved all other proposals on the agenda.