Hanneke Faber Ahold's Online Strategy and Ambition

Ahold’s online strategy and ambition

Hanneke Faber Chief Commercial Officer

1 Contents

• Retail landscape

• Ahold’s online strengths

• Ahold’s online strategies for growth

2 Contents

• Retail landscape

• Ahold’s online strengths

• Ahold’s online strategies for growth

3 Digital developments impacting retail landscape

• “Age of transparency” • Price / value • Food integrity

• Technology advances / Moore’s law

4 Predicting what’s next in tech can be perilous…

5 Online market growth will continue Close to 20% of general merchandise 3-5% of food sales expected to sales expected to be online in 2020 be online in 2020

General merchandise Food Advanced shift Emerging shift

18% 19% 14% 11% 8%

4% 3–4% 4–5% 1% 1% 1%

2013 2020 2013 2020 Source: combination of McKinsey, Euromonitor, Forrester, Ahold research

6 Customer expectations are increasing rapidly

Delivery times Delivery fees Assortment

Same / Decreasing tolerance Unlimited, next day for fees, especially in including fresh general merchandise and frozen, services

7 Marketplaces, marketplaces

marketplace as % sales 20

10 8

2012 2013 2014e 2015e

8 Contents

• Retail landscape

• Ahold’s online strengths

• Ahold’s online strategies for growth

9 Ahold’s online growth ambition: 20-25% CAGR

Ambition 2017 €2.5 billion online sales* 2014 €1.4 billion online sales*

billion €1.4 €2.5

Peapod Albert Heijn Online bol.com Peapod Albert Heijn Online bol.com

*Estimated consumer sales includes sales from third parties (f.e. Plaza sales)

10 Ahold has a unique set of strengths to win online

Strong online Easy and Broad range Serving customers Operational brands in inspirational of high anyhow, excellence dense urban online shopping quality anytime, in online markets experience products anywhere fresh food

11 Ahold has a unique set of strengths to win online

12 Strong online brands with market leading positions

#1 online retailer in the #1 online food retailer in #1 online food retailer in Netherlands / Belgium the Netherlands (ah.nl) the United States

• Five million active customers • Covers 84% of Dutch • Covers > 50 million people, households 17% of U.S. population • More than nine million items • More than 25,000 SKU’s • 12-18,000 SKU’s • More than 4,000 merchant partners through our marketplace, Plaza • Average items / order: 74 • Average items / order: 55

• Average items / order: 1.8

13 Customers love and trust our brands

Top 100 most trusted Dutch brands (2013 IPSOS Brand Monitor)

1. 2. 3. 4. 5.

Top 100 most influential Dutch brands (2013 IPSOS Brand Monitor)

1. 2. 3. 4. 5. 6. 7.

#61 in U.S. Internet Retailer Top 500

14 We operate in dense urban markets, which allows us to be profitable in home delivery

• The Netherlands (404 p/km2) and Belgium (361 p/km2) are both in global top 10 most densely populated countries.

• U.S. northern East Coast ranks as the 11th most densely populated global region in the world (450 p/km2), and is the most heavily urbanized region in the U.S.

• Our 25 years of online logistics experience makes us profitable on mature, dense routes

persquaremile.com

15 Ahold has a unique set of strengths to win online

16 Just in time personalization at bol.com

17 AH.nl: tens of thousands of recipes, straight to list

18 Peapod: One-click easy filters

19 Leading, innovative technology capabilities

1,000+ IT experts (Amsterdam, Utrecht, Chicago, Boston)

HR • Agile, autonomous teams, with state-of-the-art software development skills • Best-in-class application of big data concepts and techniques

Supply chain Transportation Price management Web and mobile Customer service systems experience systems • Central replenishment • Automated optimized • Automatic benchmark • Strong mobile • Advanced customer systems (<1 day of routing (84% full vans) pricing interfaces (40%) service systems inventory) • Patented yield • Integrated pricing with • Real-time personalized supporting multiple • Warehouse management real-time stores, including zip websites centers and phone / management systems scheduling (fee / code-level pricing • Intelligent search web / Chatbot / email with smart picking slotting) in U.S. • Recipe integration • Track and trace algorithms (>400 items • Driver mobile field • Personalized offers, • “Guess my order” • Sophisticated fraud / hr food picking) technology - text alerts valid off- and online • Top retail apps: Appie protection (low bad

Proprietary systems Proprietary for ETA, arrival and #1 in NL; Peapod top debt) pickup 10 in U.S. InternetRetailer.com

20 Ahold has a unique set of strengths to win online

21 Broadest range online in the Netherlands at bol.com

• Grew from one to 26 categories from 1999 to 2014 • More than nine million products

22 Broadest range through the premier Dutch marketplace

Key results to date: • Over €100 mln third-party revenues • One in six products sold via third parties • Partner’s revenue typically increased by 10-30%

23 Unique ranges of food products

Own brand

Own-brand sales: AH.nl 51% Peapod 30%

Quality and diversity in Fresh

Fresh / frozen sales: AH.nl 47% Peapod 40%

24 Ahold has a unique set of strengths to win online

25 Serving customers anyhow, anytime, anywhere - with unique omni-channel shopping options

Unrivalled delivery options Omni-channel customers are more loyal and spend >20% more vs. 1. Broad store network supermarket-only customers 2. Home delivery 3. Pick-up points

on average +21%

26 Omni-channel, cross brand shopping

• One loyalty card on- and offline • Joint marketing programs

27 Ahold has a unique set of strengths to win online

28 Operational excellence in fresh food, built on an omni-channel supply chain

Best-in-class sourcing for Simple inbound Efficient picking and on- and offline transport

29 Contents

• Retail landscape

• Ahold’s online strengths

• Ahold’s online strategies for growth

30 Ahold’s online strategies for growth

More customers More places More choices

Market share and Well-positioned for Continue to expand market growth geographical quality, ranges, expansion value and choices for our customers and our partners

31 More customers - significant opportunities for growth • Online market growth expected to be robust in U.S. and NL

3.000 10% • Peapod: 2% share in best zip codes; average 0.5% 2.500 2.000 • AH.nl: 6% penetration in Amsterdam, 2.5% 1.500 national 1.000 500 • 40% of our 5 mln bol.com customers bought 0 0% only from one single category 2012 2013 2014E 2015E 2016E 2017E Online sales* Online share of total* • One out of two shoppers in the Netherlands shops via bol.com, but only one out of five shoppers in Belgium

32 More places - we are well-positioned for geographical expansion

Gradual expansion into Midwest; Entering north / south NL end-2014 Indianapolis warehouse to open Will enter Belgium in 2015 in 2015

Amsterdam Rotterdam Midwest

Antwerp

33 More choices - for our customers

# of SKUs at

15 # of categories NY’s best NJ warehouse 10

0 1999 2004 2009 2014 10k 18k # of SKUs

34 More choices - for our partners

What marketers are looking for: • Higher ROIs • Sufficient reach • More personalization • Richer product content and storytelling • Closer to point-of-purchase

35 More choices - for our partners

National media reach: Netherlands • #1 newspaper: 530k • National news: 2 mln • #1 women’s magazine: 375k

Ahold reach: Netherlands • Albert Heijn stores: 14 mln visits / week • Bol.com: 820,000 unique visitors daily • Allerhande magazine: 2.7 mln readers

36 In summary: we are well-positioned, and have vast opportunities for future growth

We have clear We have leading online strategies for growth: positions and more customers, unique capabilities more places, more choices

37 Cautionary notice

This presentation includes 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 online growth and strategy, investments, omni-channel strategy, customer expectations and untapped media and marketing opportunities. 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 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 parties and other factors discussed in Ahold’s 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 law. Outside the Netherlands, Koninklijke Ahold N.V., being its registered name, presents itself under the name of “Royal Ahold” or simply “Ahold”.