Ahold encouraged by sales rise
profit level at least, but the final sales figures for 2002 were
nonetheless encouraging. But with organic growth rates slowing
considerably compared to 2001, there is still much room for
improvement.
Ahold, the Dutch retail group, has reported encouraging sales for 2002, despite a year of difficulties related mainly to its business in the Americas.
The company said that turnover for the year was ahead 9.2 per cent at €72.7 billion, although the troubles the group has experienced since the middle of the year took their toll on final quarter sales, which were just 0.3 per cent higher at €16.9 billion - disappointing in the busy period in the run up to Christmas.
Organic sales growth for the year was 3.2 per cent, just over half that seen in the previous year. Organic growth for the final quarter was also lower at 2.5 per cent, compared to 4.0 per cent in 2001.
The company's results were, as expected, impacted by its exposure to markets in the Americas, although the devaluation of the currencies in Argentina and Brazil had less of an effect than the lower exchange rate for the US dollar.
Despite the slight rise in sales, Ahold reaffirmed its estimation of a 6-8 per cent decline in earnings per share for the year, related to the currency impact and the unexpected costs from reorganising its Argentine operations.
Ahold's president and CEO, Cees van der Hoeven, said: "2002 was a year of increasingly challenging trading conditions. Sales slowed in the course of the year as a consequence of further deteriorating economic circumstances. However, we are encouraged by the fact that we strengthened our position in most markets. Compared to the third quarter, all regions showed slightly better organic sales growth."
Sales in the US retail sector improved slightly (0.9 per cent) as a result of the consolidation of the recently acquired Bruno's chain. Like-for-like sales were up 0.9 per cent, but this was less than the 2.6 per cent seen in 2001.
The US foodservice business was boosted by the consolidation of Alliant in December. However, organic sales declined by 1.9 per cent compared to the substantial growth of 10.4 per cent in 2001.
In Europe, organic sales growth was 5.0 per cent, compared to 6.7 per cent in 2001, while Latin American sales were significantly lower as a result of the currency devaluations and the deconsolidation of the La Fragua business. However, organic sales growth was much higher at 5.6 per cent (2001: 1.2 per cent).
Organic sales growth in Asia was also encouraging, reaching 17.2 per cent compared to 4.8 per cent in the previous year.
Van der Hoeven said that the Ahold's recently announced strategic plan - designed to focus the company on its core business - was proceeding as planned, and that more moves related to this programme would be announced later this year.
