http://www.morningstar.com/earnings/45280516-ah-ah-q3-2012.aspx

AH AH
Q3 2012 Earnings Call Transcript

Transcript Call Date 11/15/2012

Operator: (Abrupt Start)

…cause actual results, performance or events to differ materially from those included in such statements. Such risks and uncertainties are discussed in Ahold's interim report Q3 2012 and they are discussed in Ahold's public filings and other disclosures, which are available on Ahold's website.

The introduction will be followed by a question-and-answer session and any views expressed by those asking questions are not necessarily the views of Ahold.

At this time, I would like to turn the call over to Mr. Henk Jan ten Brinke, Vice President, Investor Relations. Please go ahead, sir.

Henk Jan ten Brinke - VP, IR: Thank you, Lisa. Ladies and gentlemen, good morning or good afternoon; thank you for joining us in our third quarter results conference call. I'm here with Dick Boer, our CEO and Jeff Carr, our new CFO. Dick will start with the brief introduction on the quarter, and we are very happy to take your questions after that. So over to you, Dick.

Dick Boer - CEO: Thank you, Henk Jan; also good afternoon or good morning from my side. If we look at quarter three results we could conclude that we had overall solid sales growth, although we see everywhere in the world also continued circumstances we can be pleased with the development we've seen in our third quarter. We are certainly also pleased with our underlying operating income which is EUR313 million, up 3.3%. If you look at the net income that was flat compared with last year. If you adjust that for the unusual, and the unusual this time was of course the big impact on the income tax which is the one-off clearly impacted our net earnings for this quarter.

If you look at our markets in both sides as well Europe and the U.S., quite some similarities I would say. The market remains challenging environment. There is a lot of competition and customers certainly trying to save money and look for the best promotions they can get. So, in a way not a big change I would say versus the previous quarters and as I would say also logical as we read the newspapers day-by-day, how the economy is developing in both markets. Although saying that, we've continued to invest in our competitive position and we were also getting market share in all our major markets in United States and in Netherlands, and I think that's something to say about the market itself and of course these slow growth will continue to create share gross.

If you look at our progress and our strategy in this quarter, we continue to invest in the pillars we have explained to you a year ago and one of the elements I would highlight today is that we have invested and opened already six pickup points in the U.S. and we have opened our first pickup point in the Netherlands just recently. We opened stores in Belgium. Today, we are number 10. In Germany, we have our first store opened and add another two later this year. And at the same time we are converting our Jumbo stores, our C1000 stores the first 14 into Albert Heijn.

We continue to grow and invest heavily in our online proposition bol.com with new categories and expanding the reach also into Belgium and a lot of new initiatives around pickup points also in stores of Albert Heijn. We are on track with our cost control program and moving forward there is a part of our opportunities to invest back into our pricing and promotional campaigning.

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