Ahold is the 18th largest food retailer in the world, and the 8th largest food retailer in the U.S. The company’s core business operations are in the Netherlands, Czech Republic, Slovakia, and the eastern U.S.*
*Source: Supermarket News
Store Count
Worldwide
Country
| Count as of 1/2/2011 (end of fiscal year 2010) | |
| United States | 751 |
| Netherlands | 1,914 |
| Czech Republic | 279 |
| Slovakia | 26 |
Source: Ahold. Annual Report 2010, p. 19 and 23.
United States
| Banner | Count as of 1/2/2011 (end of fiscal year 2010) |
| Stop & Shop | 392 |
| Giant Landover | 179 |
| Giant Carlisle | 180 |
Source: Ahold. Annual Report 2010, p. 25.
Key Banners
Europe
Albert Heijn, Albert Heijn XL, AH to Go, Etos, Gall & Gall, Albert, Hypernova, Albert.nl.
United States
Stop & Shop (union), Giant Food (union), Giant Food Stores (nonunion), Martin’s Food Markets (nonunion), Peapod (union).
Source: Ahold. Annual Report 2010, p. 21-27.
Employees
As of January 2, 2011, Ahold had 213,000 employees around the world, with 115,993 of these working in the U.S. According to the contract directory, the UFCW represents 70,076 Ahold employees.
Source: Ahold. Annual Report 2010, p. 25; and UFCW Contract Directory.
Financial Performance
Sales
Companywide sales were $39.18 billion in fiscal year 2010, up 9.4% from $35.80 billion in 2008. U.S. sales were $23.52 billion in 2010, or 60% of total sales in 2010, up 13.3% from $20.77 billion in 2008.
Source: (Standard & Poor’s Compustat Database; and Ahold. 4Q and Full Year 2010 Summary Report)
Operating Profits
Company-wide operating profits were $1.77 billion in fiscal year 2010, up 2.7% from $1.73 billion in 2008. U.S. operating profits were $941 million, or 53% of total operating profit in 2010, up 4.8% from $897.78 million in 2008.
Source: (Standard & Poor’s Compustat Database; and Ahold. 4Q and Full Year 2010 Summary Report)
Net Profit
Ahold made a net profit of $1.13 billion in 2010.
Source: (Standard & Poor’s Compustat Database)
Operating Profit Margin
Ahold’s company-wide profit margin was 4.52% in 2010. The company’s U.S. banners had a profit margin of 4.00% in 2010.
| Ahold Group | |||
| ($ millions) | 2008 | 2009 | 2010 |
| Sales | 35,802.45 | 40,022.11 | 39,183.36 |
| Operating Profit | 1,725.96 | 1,858.86 | 1,772.74 |
| Net Profit | 1,494.90 | 1,281.28 | 1,131.85 |
| Operating Profit Margin | 4.82% | 4.64% | 4.52% |
| Net Profit Margin | 4.18% | 3.20% | 2.89% |
| Ahold USA | |||
| ($ millions) | 2008 | 2009 | 2010 |
| Sales | 20,765.76 | 23,503.05 | 23,523.00 |
| Operating Profit | 897.776 | 1120.762 | 941.00 |
| Operating Profit Margin | 4.32% | 4.77% | 4.00% |
Market Shares in Key Metropolitan Areas
Metropolitan Market
| Banner | Ahold Market Share (%) | Rank | |
| Boston, MA | Stop & Shop | 23.1 | 1 |
| Hartford, CT | Stop & Shop | 37.6 | 1 |
| Providence, RI | Stop & Shop | 39.3 | 1 |
| New York, NY | Stop & Shop | 12.9 | 1 |
| Philadelphia, PA | Giant/Martin’s | 10.9 | 2 |
| Baltimore, MD | Giant Food | 22.1 | 1 |
| District of Columbia | Giant Food and Giant/Martin’s | 31.7 | 1 |
Source: Metro Market Studies, 2010.
This shows that Ahold is the market leader in a number of major metropolitan areas.
Executive Compensation
In fiscal year 2010, Ahold CEO Dick Boer made $2.73 million in total compensation, of which $1.62 million was in direct compensation (direct compensation excludes share-based and pension compensation).
Share Buyback
Following the completion of its one-year €500 million share buyback program in FY 2010, Ahold began a new 18 month €1 billion share buyback program in March 2011.
Source: Ahold. “Ahold Completes €500 mln Share Buyback,” in Press Releases, February 25, 2011; and Ahold. “Ahold Commences €1 billion share buyback program,” in Press Releases, March 7, 2011.
Dividends
Ahold paid $360.92 million in cash dividends to shareholders in fiscal year 2010.
Analyst Commentary
“Ahold has undergone a major turnaround over the last five years…. Since management changes in 2006 the group has strengthen[ed] the balance sheet significantly and restructured the main U.S. supermarket chains, Stop & Shop and Giant Landover, focusing on price, range and service. As the group enters growth phase, the debate centres around how the strong cash balances will be put to use.” Jefferies, March 3, 2011
“While the group’s operating companies in general have sound free cash generation and leading market share positions, what needs to be addressed is how these operations, in particular those in the U.S., should shift towards faster growth by means of expansion….In our view, Ahold has all the tools at hand and a balance sheet to support it becoming once again the high flyer that it once was with a corresponding valuation. We believe it is up to the new management team, all with a retailing background, to seize these opportunities.” ING, February 8, 2011
“…although the Q410 numbers were weak, we thought the outlook message was cautiously optimistic – Ahold seems reasonably confident of again balancing sales/margins during 2011 and achieving its 5%/5% sales growth/margin targets even if the current tough trading conditions prevail.” Credit Suisse, March 7, 2011