Henk Jan ten Brinke

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Henk Jan ten Brinke Vice President Investor
Relations
Brussels, January 18, 2005
2
Restoring financial strength, driving the
businesses to perform

• Road to Recovery on track - 2005 year for
  execution
• Organization overhaul ? controls, transparency,
  performance
• Progress on debt reduction and cash generation
• Focus on core business growth
• Improving operational performance
• Ahold Retail model our answer to competitive
  environment
• US Foodservice transformation is gaining momentum

3
Road to recovery, a three year program to create
a foundation for profitable growth
2003
2004
2005
Crisis Management
Today
Transition
Execution
4
In 2004 from crisis management to strategic
execution
Strong business focus
Sound financing
Re-engineering food retail
Controls, governance and accountability
Restoring financial strength
Recovering U.S. Foodservice
Regaining market confidence
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Re-engineering Food Retail to improve
competitiveness

• Competitive Challenges
• Price competition
• Low / no sales growth
• High customer expectations
• Costs

• Ahold Responses 2004
• creating solid foundation
• Focus on core-businesses
• Divestments
• Re-investing in customer proposition
• Simplify organization structure
• Flatter organization
• Arena structure
• Harmonization of back-end, i.e
• Sourcing platform
• IT alignment

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Core retail leadership positions Foundation
for profitable growth

• StopShop / Giant - Landover
• High Pace integration
• Strengthening competitiveness
• Strong, highly profitable business
• Giant-Carlisle / Tops
• Successfully competing with discounters
• Sophisticated Customer Relationship Management
• Focus on re-vitalizing Tops

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Core retail leadership positions Foundation
for profitable growth

• Albert Heijn
• Successful price re-positioning ongoing
• Focus on private label improvement
• Tight cost controls
• Central Europe
• Focus on core business - supermarkets compact
  hypermarkets
• Focus on basics operational performance and
  reduction of administrative cost
• Strong growth potential

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Core retail leadership positions Foundation
for profitable growth

• ICA
• Strong growth potential
• Focus on Sweden, Norway
• Aligning back-office functions
• Strengthening competitiveness

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Re-engineering Food Retail to improve
competitiveness
Price index
Volume index
Cost base
EBIT

• Realign cost structure to strengthen profit
  potential
• Volume-growth key driver for future market
  position

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Ahold Business Model
Sales growth
Allocate CAPEX
Lowering Cost-base
Invest proceeds
Free up capital
ID-sales EBITA
Price Value
Drive Volume
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Commitment to Road-to-Recovery targets

• Core focus and financial strength
• Divestment gross proceeds of gtEUR 2.5 bn by end
  2005
• Significant reduction of net debt by end 2005
• Food Retailing Re-engineer competitiveness
• 5 net sales growth from end 2005
• 5 EBITA margin from end 2005
• 14 Return-On-Net-Operating-Assets from end 2005
• U.S. Foodservice Restore value
• Return to positive EBITA (in ) by 2004
• Exceed 2002 EBITA margin (in ) at the latest by
  2006
• Ahold Organization Regain market confidence
• Controls, governance and accountability
• One leadership team executing one vision
  throughout the company

() R2R exchange rate 0.92
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Delivering the EURO 600 mln retail cost savings
targets are on track
gross
Gross cost savings, million Euro
Streamlining our infrastructure
Recurring costs, one-off expenses, and
investments related to the savings are within the
original projections
Driving excellence in store operations
Deploying our sourcing scale
154
20
25
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Significant proportion of savings will be
reinvested in strengthening Aholds value and
service proposition
Target 2006
Q3 2004 1,2)
1) Numbers exclude sourcing savings at US
Foodservice from the cooperation with US
Retail 2) Calculations are done with a fixed
exchange rate (/ 0.92) as from R2R
communication date

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Progress on divestments, well on track, to reach
at least EURO 2.5 bln target
2003
2004
Completed Signed Announced

• Golden Gallon
• Spain
• Poland Hypers (2)
• Jamin, De Tuinen
• De Walvis
• Chile
• Paraguay
• Peru
• Indonesia
• Malaysia
• Non-core Real estate

• US
• Europe
• Latin
• America
• Asia
• Other

• BILO/Brunos
• Tops -C-stores
• Deli XL
• Poland Hypers (13)
• Bompreco / Hipercard
• G. Barbosa
• Disco
• Thailand
• Non-core Real estate

Collected 1.5 Signed 2.7
Including reduced financial lease commitments
Gross proceeds
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Significant improvement in debt positionEUR
millions
14,000
12,000
10,000
8,000
Gross Debt
6,000
Net Debt
4,000
Q 2 2003
Q 3 2003
Q 4 2003
Q 1 2004
Q 2 2004
Q 3 2004
Q3 2004 based on EURO 0.9 bln collected
proceeds from Divestments Q3 2004 includes 100
on-balance USF Securitization program
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Significant improvement in net working capital
(excl. other cash)
rolling inventory days
total net working capital
32,0
10,0
10,0
31,0
30,0
8,0
8,0
days
29,0
28,0
27,0
6,0
6,0
26,0
-28,6
2003
2003
2003
2004
2004
2004
days
4,0
4,0
-28,8
net sales
-29,0
2,0
2,0
-29,2
days
-29,4
-29,6
0,0
0,0
-29,8
Q2-03
Q3-03
Q4-03
Q1-04
Q2-04
Q3-04
rolling accounts payable days
Rolling NWC excl. other cash in days
NWC excl other cash as net sales
NWC development includes currency impact and is
not adjusted for divestments or companies that
are to be divested. Figures including the USF
securitization program.
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U.S. Foodservice recovery in Phase II
restoring profitability and cash flow
U.S. Foodservice
2.0
1.5
1.0
EBITA margin
0.5
Linear (EBITA
0.0
margin)
Q2-03
Q3-03
Q4-03
Q1-04
Q2-04
Q3-04
-0.5
-1.0
-1.5
Target is to exceed 2002 Ebita margin in US
dollars at the latest by 2006
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Getting to investment grade profile means driving
the performance of foodservice and food retail

• Solidify liquidity profile
• Resolve ICA put
• Finalize SEC investigations
• Divestment gross proceeds of EUR 2.5 bln by end
  of 2005
• Resolve litigation and other inquiries
• Improve the operating performance of U.S.
  Foodservice
• Meet 5-5-14 targets by end of 2005

Gaining market confidence
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Road to recovery, a three year program to create
a foundation for profitable growth
2003
2004
2005
Crisis Management
Today
Transition
Execution
19
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