CEO Dick Boer said: “Sales growth in the first quarter was modest at 1.9 percent at constant exchange rates, reflecting the timing of Easter and challenging market conditions. However, we saw underlying trends improving slightly as the quarter developed and are encouraged by the sales trend in the second quarter, albeit against a background of weak market conditions.
“We continued to invest in competitiveness both in the United States and in Europe with higher levels of promotional activity, resulting in market share gains in the United States and maintaining our market share in the Netherlands.
“As we said before, we expect 2012 to be another challenging year for the food retail industry, with intense competitive activity and consumer spending under pressure due to economic uncertainty, particularly in Europe. We remain confident that our strong brands are well positioned and are well on track to deliver on our strategy.
“We will continue to invest in growth and are very pleased to have completed the acquisition of bol.com, whose capabilities will accelerate Ahold’s online growth, and look forward to completing our announced acquisitions of the Genuardi’s and C1000/Jumbo stores, which will extend our network in our two key markets.”
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This interim 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 the sales trend in the second quarter of 2012, 2012 being another challenging year for the food retail industry, continuing focus on improving Ahold’s competitive position through cost reductions and the overall simplification of Ahold’s processes, continuing investment in growth, Ahold’s online growth, steps to make Ahold’s capital structure more efficient by investing in growth, reducing debt and returning cash to shareholders and continuing commitment to an investment grade credit rating, the progress of Ahold’s strategy and cost savings program, the completion of the acquisition of the Genuardi’s and C1000/Jumbo stores and the conversion of the acquired C1000/Jumbo stores to the Albert Heijn banner. 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 interim report. Ahold does not assume any obligation to update any public information or forward-looking statements in this interim 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”.
Financial Summary (at identical exchange rates)
Pierre-Olivier Beckers, President and Chief Executive Officer of Delhaize Group, commented: “In the first quarter, we continued to deliver on our New Game Plan by investing in key revenue growth initiatives. These actions resulted in solid revenue growth of 5.9%. Our commitment to price competitiveness, the accelerated revenue momentum in our Food Lion Phase One stores, strong revenue growth at Bottom Dollar Food, real growth in Serbia and the strength of our Alfa Beta brand, give us confidence that our strategy is delivering the intended results.”
“These actions and the current trading environment translated into lower underlying operating profit in the first quarter of 2012. In order to fund our long-term growth initiatives and to further invest in our prices in several of our markets, particularly the U.S. and Belgium,we will increase our focus on the generation of free cash flow through a more disciplined approach to capital expenditures and improvements in working capital. In 2012, we have set as a target the generation of EUR 500 million in free cash flow. We are also more determined than ever to exceed our EUR 500 million gross annual cost savings target by the end of this year. I am convinced that these decisions will strengthen the long-term health of our business.”