Annual General Meeting of Shareholders April 19, 2016
Jan Hommen Chairman Supervisory Board
Agenda item 1 / Agendapunt 1 Opening
Agenda items 2 – 6 / Agendapunten 2 – 6 Agenda item 2: Report of the management board for the financial year 2015 Agenda item 3: Explanation of policy on additions to reserves and dividends Agenda item 4: Explanation of the implementation of the Management Board remuneration policy Agenda item 5: Proposal to adopt the 2015 financial statements Agenda item 6: Proposal to determine the dividend over financial year 2015 Agendapunt 2: Verslag van de Raad van Bestuur over het boekjaar 2015 Agendapunt 3: Toelichting op het reserverings- en dividendbeleid Agendapunt 4: Toelichting op de uitvoering van het bezoldigingsbeleid van de Raad van Bestuur Agendapunt 5: Voorstel tot vaststelling van de jaarrekening over het boekjaar 2015 Agendapunt 6: Voorstel tot vaststelling dividend over het boekjaar 2015
Dick Boer President and Chief Executive Officer
Looking back at our journey forward
Pioneering with supermarket format
Pioneering with supermarket format
On track to reach our 2017 online ambition
Ahold as a listed company
Responsible Retailing
Expanding healthy options
Strong organic own brands
936,000 children educated in healthy living programs
Long-standing relationships with suppliers Jeroen – Albert Heijn’s cucumber supplier for 41 years
236,000 proud associates
Strong results in 2015
U.S.: good progress with price, quality investments
Netherlands: sales momentum remained strong
Czech: succesful roll-out new operating model
2015 consumer online sales: € 1.8 billion
Strong free cash flow allows us to invest
We continue to build on our strong, local brands
Bringing together two complementary businesses Common values and strong, trusted local brands Net Sales* Employees worldwide* Net Sales* Employees worldwide* € 38.2bn € 24.4bn 236,000 154,000 Stores worldwide Stores worldwide 3,253 3,512 *Note: Sales, Stores and Employees 2015 excludes JVs i.e. JMR for Ahold in Portugal and Super Indo for Delhaize in Indonesia
Wrap-up
Jeff Carr Chief Financial Officer
Total sales performance (in millions of euro’s) Full year change change 2015 2014 actual rates constant rates Sales 38,203 32,774 16.6% 4.3% Sales growth adjusted for 53 rd week 14.2% 2.3% Sales growth excl gas adjusted for 53 rd week 15.6% 3.8%
Operating performance (in millions of euro’s) Full year change change 2015 2014 actual rates constant rates Sales growth driven by Sales 38,203 32,774 16.6% 4.3% investments in our customer proposition funded by our Simplicity program 27.1% 26.5% 0.6 0.3 Gross profit margin Gross margin improvement supported by lower gas prices Underlying operating Underlying margin slightly affected 1,461 1,267 15.3% 3.6% income by higher pension costs and additional online investments, Underlying operating offset by favorable commodity 3.8% 3.9% (0.1) (0.1) margin prices and gas sales effects
Underlying operating income by segment (in millions of euro’s) Ahold USA The Netherlands Czech Republic change change 2015 2015 change 2015 constant rates constant rates Balanced investments in customer 23,732 Sales 1.4% 12,699 8.6% 1,772 15.3% proposition and Simplicity savings in the U.S. Lower margins in the Netherlands Underlying from additional pension costs and 940 6.4% 578 0.7% 27 42.3% operating income online investments Margin in Czech Republic stabilizing towards pre-acquisition Underlying levels operating margin 4.0% 0.2 4.6% (0.3) 1.5% 0.3
Income from continuing operations (in millions of euro’s) Full year change 2015 2014 actual rates Underlying operating income 1,461 15.3% 1,267 Restructuring and related charges, other (143) (17) Operating income 1,318 1,250 5.4% Net financial expenses (265) (12.8%) (235) Income taxes (224) (248) 9.7% Share in income (loss) of joint ventures 20 24 (16.7%) Income from continuing operations 849 791 7.3% € 1.04 € 0.90 Basic EPS from continuing operations 15.6% € 0.52 * € 0.48 Dividend per share 8.3% Dividend payout %** 49% 51% * Subject to shareholder approval ** Based on adjusted income from continuing operations
Dividend Dividend 2015 € 0.52 per common share Timetable April 21, 2016* Ex-dividend date for common shares April 22, 2016 Dividend record date May 4, 2016 Payment date • April 20, 2016 for ADR’s (American Depositary Receipts)
Free cash flow and uses of cash (in millions of euro’s) Strong free cash flow Balanced approach to capital allocation Operating cash flow* 2,139 Cash capex (804) Disposals 51 1,184 1,109 Other (202) 1,055 1,051 Free cash flow 1,184 Acquisitions / divestments (150) Dividend (396) Share buyback (161) Other cash changes (404) Change in cash and cash equivalents** 73 2012 2013 2014 2015 * Operating cash flow from continuing operations ** Before impact of exchange rates 33
Uses of cash (in millions of euro’s) Attractive shareholder returns over Disciplined capital expenditure € 5 billion in the last 4 years 929 2,500 0.6 0.52 830 804 1,008 0.5 732 2,000 701 0.40 0.4 1,500 414 0.3 1,000 457 1,000 0.2 190 1,232 150 500 415 0.1 396 768 430 9 277 161 0 0 2012 2013 2014 2015 2016* 2012 2013 2014 2015 Share buyback Dividend Capital repayment Dividend per share Capital expenditures (cash) Acquisitions (cash) * Expected
Capital structure (in billions of euro’s) Increase in cash, reduction of net debt 4.0 Lease adjusted leverage decreased 2.4 Cash balances* up € 0.5 billion to € 2.4 billion 1.9 1.9 € 161 million share buyback completed in -0.9 2015. Program stopped after merger announcement Deleverage of net lease-adjusted debt / 1.1 1.3 1.4 EBITDAR at 1.7 times 3.0 3.2 3.2 3.5 2012 2013 2014 2015 Gross debt Cash Net debt * Includes cash and short-term deposits
Outlook 2016 Underlying operating margins in 2016 expected to trend in line with full year 2015, excluding the potential impact from the intended merger with Delhaize Ongoing Simplicity cost saving and efficiency program, expected to deliver € 350 million in 2016. This target is incremental to synergy targets related to the intended merger Online businesses well on track to meet 2017 target of € 2.5 billion net consumer sales Additional logistical investments planned in the Netherlands, resulting in increased cash capex for 2016 of around € 1 billion
Rob van den Bergh Chairman Remuneration Committee Supervisory Board
Explanation of the implementation of the remuneration policy of the Management Board Performance year Performance year Annual cash incentive plan 2015 2014 2013 2012 2011 Payout as % of target 135% 45% 89% 55% 101% Performance measures Net sales growth (30%) Operating margin (30%) Operating cash flow (30%) Responsible Retailing (10%) Year of vesting Year of vesting Long-term equity-based program 2016 2015 2014 2013 2012 Shares granted in 2011 (5 year plan) Payout based on TSR performance 110% 90% 130% 110% 110% Shares granted in 2013 (3 year plan) Payout based on TSR performance 100% 90% 130% 110% 110% Payout based on RoC performance 60% Conditional Shares 100%
Jan Hommen Chairman Supervisory Board
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