Ahold sells off to improve costs

By James Knowles

- Last updated on GMT

Related tags: Ahold, Czech republic

Ahold yesterday said it will slice €500m off of operating costs and
sell some units, in an ongoing bid to become more profitable.

The businesses up for sale include its US food service unit, and operations in Poland and Slovakia.

"We have substantially reduced debt, divested non-core assets, transformed business and financial controls, and resolved multiple investigations and litigation issues,"​ said Ahold president and CEO Anders Moberg.

Ahold is implementing strategy changes following the crisis in 2003 when the company experienced net losses of €62m, which had been a sharp decline from profits of €17m the year before.

In central Europe the company plans to focus its investments on the Czech Republic, in which Ahold retains a leading market position. Operations will be withdrawn from Poland and Slovakia, where the company does not enjoy a lead position and substantial investment would be required.

In Portugal, Ahold will sell its 49 per cent share in Jerónimo Martins Retail (JMR), part of a strategy by the company to only concentrate on companies in which it owns the majority shareholding.

The company will continue to hold its 60 per cent share in ICA, which operates in Sweden and three Baltic states. Investment in Schuitema, in which Ahold owns a 73 per cent majority holding, will be maintained due to success in the Dutch market.

The US food service business and Tops stores will be sold in order to allow the company to concentrate on retail operations where Ahold is better positioned.

The sale of businesses and improved cash flow will see €2bn returned to shareholders, in a form yet to be determined.

Related topics: Market Trends

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