Ahold Capital Markets Days 2012 - Ahold Delhaize

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

Proprietary and Company Confidential 2

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


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


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


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)


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


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


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


We continue to execute against our strategic framework









Everyone sells food in the United States

M / S tClubs

Mass / Supercenters

Drug / dollar and convenienceE-commerce


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%


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


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


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%


New York Metro: Expanding our presence to drive growth



Larger players


No 1 No 2 No 3 No 4

Larger players

11.9%

# stores 228 185 73157


No 1 No 2 No 3 No 4



# stores 41 19 10


Giant Landover: Investment in store improvements has accelerated growth


16 9%


Larger players


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


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


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%


Giant Carlisle: Steady performer with continued high levels of quality and service



Larger players22 9%


No 1 No 2 No 3 No 4

Larger players22.9%

# stores 112 126198 37


No 1 No 2 No 3 No 4



# stores 19 14 11


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


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%


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


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


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









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


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


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


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


* 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


(*) 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


* 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


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


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


We are executing on strategies to accelerate growth

Offering

AcquisitionsAcquisitions

Own brands

Multi-channel Relevant loyalty programs


We are committed to deliver on our promises to be Better Every DayEvery Day


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


Source: Ahold USA Customer Satisfaction Tracking Study








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


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


(*)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






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


Ahold Capital Markets Days 2012 - Ahold Delhaize

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