> Q4 2005 operating income increased by 13.6% including EUR 92 million insurance proceeds
> Net debt down EUR 1.2 billion versus year-end 2004
> Value improvement program to be launched at Stop & Shop / Giant-Landover
> Comprehensive review of underperforming assets and corporate overhead
Amsterdam, The Netherlands, March 29, 2006 - Ahold today published its consolidated summary financial statements for the fourth quarter and full year 2005. Anders Moberg, President and CEO of Ahold, said today: "2005 has been a difficult year with mixed performance in our key business areas. We continue to experience strong competitive pressures in our retail operations, with considerable challenges at the Stop & Shop / Giant-Landover Arena. Tops (in particular in northeast Ohio) and the Central Europe Arena continue to underperform. On the other hand, our repositioning programs at Albert Heijn and ICA have resulted in strong market leadership and growth, and we launched our long-term strategy to drive the profitable growth of U.S. Foodservice. In addition, we achieved a number of important strategic milestones, most importantly the preliminary court approval of our settlement of the securities class action and the conclusion of our EUR 3.1 billion divestment program, enabling us now to focus fully on managing our businesses for the future.
"The financial targets we originally set for retail in 2003 have become increasingly challenging. Competitive and operating cost pressures have been greater than expected and the turnaround at certain businesses has been slower than planned. Based on the retail trends we have seen for the year to date, we expect our retail net sales growth this year to be between 2.5% and 3.0% (at constant exchange rates, and excluding divestments made in 2005). In addition, we expect that our retail operating margin will be between 4.0% and 4.5% in 2006. U.S. Foodservice targets remain unchanged.
"This year, our focus will be on operational and value improvement, a comprehensive review of underperforming assets, and reduction of corporate overhead. Following careful preparations, we will launch an arena-wide Stop & Shop / Giant-Landover value improvement program. Based on our experiences with Albert Heijn and ICA, and together with store reinvestment and cost reduction initiatives already underway, we expect this value improvement program to steadily enhance our market position. To lead the arena forward and drive this initiative, we plan to announce the appointment of a new CEO for Stop & Shop / Giant-Landover next week.
"Driving top line growth and achieving a 5% retail operating margin remain our overall priorities."
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