Ahold USA: Strong positions andStrong positions and focused on execution
Carl SchlickerCOO Ahold USACOO Ahold USANovember 29, 2012
Proprietary and Company Confidential
Key takeawaysOur businesses:
• Ahold USA’s divisions collectively are the largest player in the diverse markets of the U.S. NortheastNortheast
• The divisional structure allows us to act locally while leveraging our scale
Our position in the competitive landscape:p p p• Each of our divisions has targeted activities to ensure that they are well-positioned to hold
and grow their leading positions • Our divisions continue to gain market share in a diverse competitive landscape
Our business model to grow:• We are executing on the Reshaping Retail framework to drive growth
Our performance:• Ahold USA continues delivering a healthy and consistent bottom line
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Our businesses:• Ahold USA’s divisions collectively are the largest player in the diverse markets of the U.S.
NortheastNortheast • The divisional structure allows us to act locally while leveraging our scale
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The #5 supermarket retailer in the US and #1 in the Northeast
1 support organization
4 divisions
98 years of local heritage
772 stores
119,000 employeesp y
$25 billion+ in sales
Market leader inMarket leader in 3 of our 4 divisions
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Source: Progressive Grocer Super 50 - 2012 Ranking
772 stores serving a trading area of 38 million people:#1 i t f k t#1 in most of our markets
Market position
# stores 2011 salesposition
#1 217 $7.5B
sales
#3 183 $5.7B
#1 173 $5.3B
#1 183 $6 1B#1 183 $6.1B
#1 n/a $0.4B
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Operating in markets with differing demographics…
Ethnicity Income distribution
Ethnicity Income distribution
5%7%
13%7%
9%4%9% 6% 11% 4%
Ethnicity
27% 23%
Income distribution
86%
9%5%
23%
13% 9%
54% 59%
38%27%
40%
69%81%
58%
86%
14% 19% 11% 18%
48%54%
49%
New YorkMetro
New England Giant Landover Giant Carlisle
white black hispanic other
%
New YorkMetro
New England Giant Landover Giant Carlisle
low (<$25K) medium ($25K to $99K) high(>$100K)
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Source: Population Division – U.S. Census Bureau
The divisions are able to act locally while leveraging our combined scale
20102006 - 2009
combined scale
2010
Transition
2006 2009
Reposition Grow!
2011 - 2017Cost effectiveness
SimplifyGrow!Accomplishments
Simplify
Vendor leverage
Localness
Increase organizational effectiveness
Localness
Create platform for growth
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Our organizational structure enables us to grow
Support functions for our divisions
Finance, Real Estate, IT
Legal
Supply Chain
Marketing and Merchandising
Human Resources
Local operations and execution
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We have a diverse and strong leadership team
COO USACarl SchlickerFinance, Real Estate,
& ITPaula Price
PeapodAndrew Parkinson
Legal
Human ResourcesKathy Russello
Marketing
MerchandisingMark McGowan
(Interim)
Tom Hippler Erik Keptner
OperationsBhavdeep Singh
Supply ChainMark McGowan
Giant CarlisleRick Herring
Giant LandoverAnthony Hucker
New York MetroDon Sussman
New EnglandJoe KelleyRick Herring Anthony Hucker Don SussmanJoe Kelley
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We continue to execute against our strategic framework
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Our businesses:• Ahold USA’s divisions collectively are the largest player in the diverse markets of the U.S.
NortheastNortheast • The divisional structure allows us to act locally while leveraging our scale
Our position in the competitive landscape:p p p• Each of our divisions has targeted activities to ensure that they are well-positioned to hold
and grow their leading positions • Our divisions continue to gain market share in a diverse competitive landscape
Our business model to grow:• We are executing on the Reshaping Retail framework to drive growth
Our performance:• Ahold USA continues delivering a healthy and consistent bottom line
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Everyone sells food in the United States
M / S tClubs
Mass / Supercenters
Drug / dollar and convenienceE-commerce
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Grocery channel has been facing some volume shifting to other channels; however still represents almost 2/3 of the market; p
Nielsen panel unit market share
Ahold USA trading area
grocery66.9% 64.4%60%
70%
Nielsen panel unit market share UPC items only
mass and super14.8%13.4%
12%
14%
16%
60%
rem. channel
drug4 9%4 4%
9.5%9.5%
6%
8%
10%
12%
drugwholesale / clubdollar
2008 2009 2010 2011
2.5%
4.9%4.4% 4.0%3.5%2.2%
0%
2%
4%
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Out of six units that customers purchase, at least one of them is with usis with us
Nielsen panel unit market share UPC items only:
Ahold USA trading area
Nielsen panel unit market share UPC items only: First half 2012
100.00% 100.00% 100.00% 100.00%
65.2% 68.2% 58.4% 63.2%
TOTAL
Grocery channel
23.2% 11.8% 17.6% 23.6%
42.1% 56.4% 40.8% 39.6%
5.3% 5.2% 3.8% 3.7%
Ahold
Remaining market
Drug channel
1
14.3% 8.8% 18.9% 20.0%
3.8% 5.0% 5.1% 2.5%
11.3% 12.8% 13.8% 10.6%
Mass merch and superstore channel
Warehouse club channel
Remaining outlets
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New England: Enhancing the value equation for customers
Nielsen panel unit market share UPC items only: Q2 2012
Our market share: all outlets Our competitors
Larger players23.4%
Nielsen retail ACView
No 1 No 2 No 3 No 4
Larger players
# stores 69 78 103217
Our market share: all outlets
No 1 No 2 No 3 No 4
Our market share: all outletsSmaller presence players
Nielsen panel unit market share change UPC items only: H1 2012
# stores 10 27 1
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We are well positioned to face competition: Walmart example
ContextWalmart expanded a location in Cranston, RI to a Super Center on 11/01/2011. Expansion was projected to impact seven Stop & Shop storesimpact seven Stop & Shop stores
Completed market assessmentGoal: protect Primary HHsFocus areas:
Our approachFocus areas:• price adjustments in key nonperishable categories• incremental promotional activity• minor facility maintenance• operational excellence• customer service
ResultsPost opening sales trend for impacted stores:4 wk: +5.3%12 wk: +1.3%
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New York Metro: Expanding our presence to drive growth
Nielsen panel unit market share UPC items only: Q2 2012
Our market share: all outlets Our competitors
Larger players
Nielsen retail ACView
No 1 No 2 No 3 No 4
Larger players
11.9%
# stores 228 185 73157
Our market share: all outlets
No 1 No 2 No 3 No 4
Our market share: all outletsSmaller presence players
Nielsen panel unit market share change UPC items only: H1 2012
# stores 41 19 10
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Giant Landover: Investment in store improvements has accelerated growth
Nielsen panel unit market share UPC items only: Q2 2012
16 9%
Our market share: all outlets Our competitors
Larger players
Nielsen retail ACView
No 1 No 2 No 3 No 4
16.9% Larger players
# stores 63 124 96171 40No 1 No 2 No 3 No 4
Our market share: all outletsNielsen panel unit market share change UPC items only: H1 2012Our market share: all outlets
Smaller presence players
# stores 20 16 11
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We are well positioned to face competition: Shoprite example
ContextShoprite opened a new location in Lutherville, MD on 7/28/2011. Opening was projected to impact one Giant Food store located directly across the streetFood store located directly across the street
Completed market assessmentGoal: protect Primary HHsFocus areas:
Our approachFocus areas:• operational excellence• customer service (Front End)• minor facility reset• incremental promotional activity
ResultsPost-opening sales trend for impacted store:4 wk: +7.7%12 wk: +11.0%
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Giant Carlisle: Steady performer with continued high levels of quality and service
Nielsen panel unit market share UPC items only: Q2 2012
Our market share: all outlets Our competitors
Larger players22 9%
Nielsen retail ACView
No 1 No 2 No 3 No 4
Larger players22.9%
# stores 112 126198 37
Our market share: all outlets
No 1 No 2 No 3 No 4
Our market share: all outletsSmaller presence players
Nielsen panel unit market share change UPC items only: H1 2012
# stores 19 14 11
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We are well positioned to face competition: Wegmans example
ContextWegmans opened a new location in King of Prussia, PA on 5/06/2012. Opening was projected to impact four Giant Food stores
Completed market assessmentGoal: protect Primary HHsFocus areas:
Our approachFocus areas:• labor investment• operational excellence• customer service• employee training• incremental promotional activity• minor facility maintenance
ResultsPost-opening sales trend for impacted stores:4 wk: +7.0%12 wk: +7.4%
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A timely, well-developed plan allows us to be successful when a new competitor store opens in one of our markets
Leverage strategic toolbox
Approach 1 2 3
+ + =Approach
• Upgrade our stores• Understand surrounding
competition and their offers
1Market
assessment
2Strategy and
tactics
3Approval and
executionCompetitiveaction plan
• Landscape • Financial returncompetition and their offers• Assess risks of potential
new entries• Build base sales
• Landscape• Financial review• Customer analysis• Strategy / objectives
• Merchandising• Pricing / Promotion• Marketing / Advertising• Operations plan
• Financial return• Coordinate approvals• Plan communication• Execute tactics
-12 to -18 months -8+months
-4-6months
-3months
-1-2months
+6months
On-going monitoring
of plan
Pre-launch timing Post-launchCompetitor opens
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Our 20 years of experience in loyalty programs help us to better understand customersbetter understand customers
Loyalty card usagey y g
85.5%
74 3%
Card programs
74.3%
+1993 2000 2000
Sales Transactions
+2004 2005 2009
Sales Transactions
Ahold USACCR programs and partners
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We are a successful retailer
Market leader in almost each division
Strong brandsg
Strategically located stores
Strong and e perienced teamsStrong and experienced teams
We understand our customer needs
Effective approach to face competition
Significant capital plans
Stringent cost containment
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Our businesses:• Ahold USA’s divisions collectively are the largest player in the diverse markets of the U.S.
NortheastNortheast • The divisional structure allows us to act locally while leveraging our scale
Our position in the competitive landscape:p p p• Each of our divisions has targeted activities to ensure that they are well-positioned to hold
and grow their leading positions • Our divisions continue to gain market share in a diverse competitive landscape
Our business model to grow:• We are executing on the Reshaping Retail framework to drive growth
Our performance:• Ahold USA continues delivering a healthy and consistent bottom line
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We continuously work to lower our cost base in order to invest in price and to deliver value to customersinvest in price and to deliver value to customers
Grow our
Drive sales
Win new Grow our businesses
and+Win new customers
Allocatedeliver a
consistentbottom line
+ Allocate capital
bottom line
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We are focused on enhancing our price image by offering competitive pricing and communicating it to customerscompetitive pricing and communicating it to customers
Value communication
Closely Targeted
Value communication
Multi-variable ymonitoring key value items
+g
price investment ++pricing and
promotions engineitems engine
Price perception improvement
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We continue investing in our multi-tiered own brands and we are on target to deliver 40% penetration by 2015we are on target to deliver 40% penetration by 2015
Natural / Organic
ValueMid-tier
Organic
Value
Premium
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We have consistently invested in our stores to keep our store base up-to-date
Depreciation + Amortization vs. Capital investment*
p
3.1% 3.0% 2 9% 3.0% 2 8% 2 7%3.5%
4.0%3.4% 3.2% 3.2% 3.1%3.0% 2.9% 3.0% 2.8% 2.7%
of n
et s
ales Refreshed stores
for an improved
2007 2008 2009 2010 2011 2012E
% o
shopping experience
Depreciation + amortization expense
Capital investment excluding major acquisition: Ukrops and Genuardi’s
* Capex includes storing and non storing capital investment
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* Capex includes storing and non-storing capital investment
By investing close to $1billion per year in CAPEX*, we are decreasing the average age of our stores by almost a yeardecreasing the average age of our stores by almost a year
Average store age
2007 8 8 yrs 7 2 yrs6 8 yrs 6 2 yrs
2012 est 6 1 yrs 6 0 yrs
8.8 yrs 7.2 yrs
6 3 yrs
6.8 yrs 6.2 yrs
6 3 yrs 6 3 yrs2012 est 6.1 yrs 6.0 yrs 6.3 yrs6.3 yrs 6.3 yrs
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(*) CAPEX includes storing and non-storing capital investment
Project Refresh in Giant Landover has generated an attractive return on investment and sales liftan attractive return on investment and sales liftBefore
R f h t l lift i +700b hi h1
2009 – 2012* results:
After
Refresh stores sales lift is +700bps higher than non-refresh stores
1
Refresh stores Return on Capital has improved +70bps more than non-refresh
t
2
stores
* 2012: includes last twelve months
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* 2012: includes last twelve months
We are successful in integrating acquired stores into our businessesour businesses
25 stores
2 stores1 store
2 stores
2 stores 15 stores
5 stores 5 storesA i d t 2009 2012
Norkus
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Acquired stores 2009 - 2012
In upgrading the newly acquired stores we take a responsible approach to CAPEXresponsible approach to CAPEXUpgrading store interiors Enhance fresh prepared foodsRight sizing the critical areas
Hybrid décor package
Store producedsalads
Wall of values
Upgraded refrigerationsystem
Kosher expansion
Store-breaded / fried chickeny
Lighting Scratch madeNatural /Lighting re-lamp
Scratch madepizza
Natural /Organic
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We have a thorough cost saving program in place across multiple areas of our companymultiple areas of our company
Realized savings (in $million)We are on track toWe are on track to deliver over $325 million in savings
We are focused on
$90
$78 $325We are focused on transformational savings to continue investing in our business
$157
Totalour business
2012 Est20112010
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We are executing on strategies to accelerate growth
Offering
AcquisitionsAcquisitions
Own brands
Multi-channel Relevant loyalty programs
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We are committed to deliver on our promises to be Better Every DayEvery Day
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And customers acknowledge itOverall customer satisfaction
56% 60% 58% 61% 59%63% 69% 71%
New England New York Giant Landover Giant Carlisle
Q3 2011 Q3 2012
New England New York Giant Landover Giant Carlisle
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Source: Ahold USA Customer Satisfaction Tracking Study
Our businesses:• Ahold USA’s divisions collectively are the largest player in the diverse markets of the U.S.
NortheastNortheast • The divisional structure allows us to act locally while leveraging our scale
Our position in the competitive landscape:p p p• Each of our divisions has targeted activities to ensure that they are well-positioned to hold
and grow their leading positions • Our divisions continue to gain market share in a diverse competitive landscape
Our business model to grow:• We are executing on the Reshaping Retail framework to drive growth
Our performance:• Ahold USA continues delivering a healthy and consistent bottom line
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Our strong performance has resulted in continued unit market share gains in both the grocery and all outlet channelsshare gains in both the grocery and all outlet channels
Unit market share Nielsen Scan-trackUnit market share trend – grocery channel Unit market share trend – all outlet channelUnit market share, Nielsen Scan-track UPC items only
31%21.5%
30%
29%
30.3% 21.0%
20.5%20.7%
28%
27%
20.0%
19.5%
P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 P13
2010 2011 2012
P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 P13
2010 2011 2012
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Note: Genuardi’s acquisition reflected starting Period 9 2012
We continue growing sales every quarter and delivering a healthy and consistent bottom linehealthy and consistent bottom line
Sales growth Underlying EBITComp sales (ex gas)g y gp ( g )
10%
8%
5%
%
5%
4%8%
6%
4%
4%
3%
2%
3%
2%
1%
2%
0%
1%
0%
0%
-1%
-2%
(*)Compared to Q4’09 12 wks equivalent
Q4’10(*) Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’10(*) Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12Q4’10(*) Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12
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(*)Compared to Q4 09 - 12 wks equivalent
Key takeawaysOur businesses:
• Ahold USA’s divisions collectively are the largest player in the diverse markets of the U.S. NortheastNortheast
• The divisional structure allows us to act locally while leveraging our scale
Our position in the competitive landscape:p p p• Each of our divisions has targeted activities to ensure that they are well-positioned to hold
and grow their leading positions • Our divisions continue to gain market share in a diverse competitive landscape
Our business model to grow:• We are executing on the Reshaping Retail framework to drive growth
Our performance:• Ahold USA continues delivering a healthy and consistent bottom line
Proprietary and Company Confidential 41
Safe harbor
Today’s presentations include 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 Ahold’s performance compared to the market organizational structure investmentsinclude, but are not limited to, statements as to Ahold’s performance compared to the market, organizational structure, investments in price and value, growth strategy, focus on local operations, cost, store efficiency and productivity, associates, delivering on promises, inventory reduction, standardization, financials, shopping model, digital solutions, food and non-food marketplace opportunities and pick-up points. 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 thesecause 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 g g p g q y pparties and other factors discussed in Ahold’s public filings and other disclosures. The audience is cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of these presentations. Koninklijke Ahold N.V. does not assume any obligation to update any public information or forward-looking statements in these presentations to reflect subsequent events or circumstances, except as may be required by applicable laws. Outside the Netherlands, Koninklijke Ahold N V b i it i t d t it lf d th f “R l Ah ld” i l “Ah ld”N.V., being its registered name, presents itself under the name of “Royal Ahold” or simply “Ahold”.
Nielsen Information does not constitute a reliable independent basis for investment advice or Nielsen’s opinion as to the value of any security or the advisability of investing in, purchasing or selling any security
Proprietary and Company Confidential 42
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