Ahold 3rd quarter net earnings surge 43.4% to $166.9 million

Tuesday, November 23, 1999

Operating results rose 53.1% to $ 327.3 million (1998: $ 213.8 million). As a percentage of net sales, operating results rose from 3.7% to 4.2%. Operating results before depreciation (EBITDA) rose 49.5% to $ 534.4 million (1998: $ 357.5 million). As a percentage of net sales, EBITDA rose from 6.3% to 6.8%.

The United States: sales +32.7%; operating results +57.0% In the United States, sales increased 32.7% to USD 4.6 billion (1998: USD 3.5 billion). This increase is largely attributable to the consolidation of Giant-Landover. BI-LO, Giant-Carlisle and specifically Stop & Shop contributed to sales growth.

Operating results in the U.S. rose 57.0% to USD 228.9 million (1998: USD 145.8 million). All U.S. operating companies turned in better results, reflecting successful marketing campaigns, synergy benefits and strict cost control. Giant-Landover made particularly strong contributions to the improved operating results.

The Netherlands: sales +9.8%; operating results +12.3% Sales in The Netherlands grew 9.8% to $ 1.8 billion (1998: $ 1.7 billion). Sales at Albert Heijn rose 4.2%. Market share in third quarter 1999 was slightly lower compared with third quarter 1998. Sales at Schuitema rose 8.8%, accompanied by a further increase in market share. Partially due to the consolidation of Gastronoom, the recently acquired institutional food supplier, sales at Ahold Institutional Food Supply were higher. The specialty stores also increased their sales.

Operating results in The Netherlands rose 12.3% to $ 78.3 million (1998: $ 69.7 million). Albert Heijn and Schuitema achieved solid gains in operating results. Ahold Institutional Food Supply also increased results reflecting for a large part the consolidation of Gastronoom.

Other European Countries: sales +38.8%; operating results +20.4% In other European countries (Portugal, Spain, the Czech Republic and Poland) sales rose 38.8% to $ 603.1 million (1998: $ 434.5 million). All the chains increased sales, notably the hypermarket operations in the Czech Republic. The Spanish supermarket chains acquired in January 1999, also contributed to the increase in sales.

Operating results in other European countries increased 20.4% to $ 29.5 million (1998: $ 24.5 million). In Portugal, third quarter operating results were almost flat compared with the same period last year. The operating results in the Czech Republic improved and were nearly break-even. For the first time, the operations in Spain contributed to growth in operating results. Operating results in Poland remained slightly negative.

Latin America: sales +126.4%; operating results +76.7%

Latin American sales rose 126.4% to $ 874.5 million (1998: $ 386.3 million), largely due to the consolidation of Disco in Argentina and Santa Isabel in Chile. At Bompreo in Brazil, sales in local currency also increased during the third quarter.

Operating results in Latin America rose 76.7% to $ 22.8 million (1998: $ 12.9 million), mainly reflecting the consolidation of Disco. Operating results at Santa Isabel nearly broke even. Due to the devaluation of the Brazilian Real, Bompreo's operating results in Euros for the quarter were lower than in 1998.

Asia: sales rise 22.3%; operating losses decline Sales in Asia rose 22.3% to $ 117.5 million (1998: $ 96.1 million). Operating results in Asia amounted to a loss of $ 9.7 million (1998: operating loss of $ 15.4 million). Effective as of the fourth quarter loss making activities in China and Singapore were divested.

Corporate Costs

Corporate costs totaled $ 10.4 million (1998: $ 8.6 million).

Net Financial Expense

Net financial expense amounted to $ 86.8 million (1998: $ 49.0 million), an increase largely attributable to the consolidation of interest expenses at Disco, Santa Isabel and Giant-Landover and the financing of the Gastronoom acquisition.

The interest coverage ratio was 3.50 (1998: 3.72). On a rolling annual basis the interest coverage ratio was 3.41.

Tax rate

The tax rate, expressed as a percentage of pre-tax earnings, amounted to 28.5% (1998: 24.8%). The increase is due to higher levels of taxable earnings in regions with relatively high tax rates.

Equity ratio

Group equity, expressed as a percentage of the balance sheet total, amounted to 17.2% (at year-end 1998: 15.7%). After conversion of the convertible subordinated notes, group equity amounted to 22.7%. Capital accounts totaled 24.0% of the balance sheet total (at year-end 1998: 23.2%).

Shareholders' equity amounted to $ 2.1 billion (at year-end 1998: $ 1.6 billion). During the first three quarters of 1999, proceeds from exercised option rights, paid-in equity attributable to the optional dividend, and the positive balance of exchange rate fluctuations were added to shareholders' equity. In addition, first three quarters net earnings, after deduction of the preferred dividend and after deduction of the interim dividend on common shares were added to shareholders' equity. Goodwill paid for acquisitions amounted to $ 266 million (primarily Gastronoom in The Netherlands, Dialco and Dumaya in Spain and Los Americanos in Argentina) and was fully charged to shareholders' equity.

FIRST THREE QUARTERS 1999 NET EARNINGS RISE 38.2% TO $ 514.9 MILLION

Net earnings for the 40-week period ended October 10, 1999 amounted to $ 514.9 million (1998: $ 372.5 million), an increase of 38.2%. Net earnings after the deduction of the preferred dividend amounted to $ 505.6 million for the period (1998: $ 365.6 million). Earnings per share for the first three quarters 1999 amounted to $ 0.79 (1998: $ 0.64), a 22.5% increase. Excluding currency fluctuations, earnings per share rose 21.7%.

Sales for the first three quarters +32.3%

Consolidated sales for the first three quarters of 1999 amounted to $ 25.0 billion (1998: $ 18.9 billion), an increase of 32.3%. In the U.S., sales increased 34.9% to USD 15.4 billion (1998: USD 11.4 billion). This increase was largely attributable to the consolidation of Giant-Landover. Sales in The Netherlands rose 5.8% to $ 6.1 billion (1998: $ 5.7 billion). In other European countries, sales rose 36.8% to $ 1.7 billion (1998: $ 1.2 billion). Latin American sales totaled $ 2.5 billion (1998: $ 1.2 billion). The doubling of sales reflects primarily the consolidation of Disco and Santa Isabel. In Asia, sales amounted to $ 0.4 billion (1998: $ 0.3 billion).

Operating results for the first three quarters +42.4%

Consolidated operating results for the first three quarters of 1999 amounted to $ 994.6 million (1998: $ 698.3 million), an increase of 42.4%. In the U.S., operating results amounted to USD 734.5 million (1998: USD 492.2 million), a 49.2% increase. In The Netherlands operating results were $ 239.7 million (1998: $ 216.5 million), a 10.7% increase. In other European countries, operating results rose 20.2% to $ 72.5 million (1998: $ 60.3 million). In Latin America, operating results doubled to $ 64.2 million (1998: $ 33.7 million). Operating losses in Asia amounted to $ 34.7 million (1998: losses of $ 34.7 million). Corporate costs for the first three quarters totaled $ 32.9 million (1998: $ 28.1 million).

Forecast for full year 1999: 20% EPS growth

Due to the positive course of business, the Corporate Executive Board expects earnings per share for the full year 1999 to grow by 20%, excluding currency fluctuations.

Highlights for third quarter 1999

- Net earnings rise 43.4% to $ 166.9 million

- Operating results increase 53.1% to $ 327.3 million

- Sales increase 36.7% to $ 7.8 billion

- EPS rises 30.8% to $ 0.25

- Earnings forecast reconfirmed

Note to the Editor

- Ahold Corporate Communications: +31 75 659 5720/ 5666.

- This press release can also be found at www.ahold.com

- Visit www.ahold.com to listen in to the Corporate Executive Board conference call,

- Tuesday November 23, as of 5:00 p.m.

- Ahold will publish its full-year 1999 results on March 7, 2000.