Ahold

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