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Inspiring healthy lives Interim Corporate Social Responsibility Report 2005 "-#&35 "-#&35 )&*+/ "-#&35/- $ &504 '&*3" /07" ("-- ("-- (*"/5 '00% (*"/5 '00% 4503&4 ):1&3/07" *$" /035) 45"3 '00%4&37*$& 1&"10% 1*/(0 %0$& 4501 4)01 5014 64 '00%4&37*$& 8& .",& *5 &"4: 50 $)004& 5)& #&45 In this interim report, and on our website, we share with you how we are facing the challenges connected with being a socially responsible company and working to build long, mutually fulfilling partnerships with all our stakeholders. §www.ahold.com/csr Our business impacts the everyday lives of millions of people. We believe that making this impact a positive one is not just the right thing to do, it also makes good business sense. 1 Ahold CSR highlights of 2005 Complementary Information 2 Our brands Global Reporting Initiative Sustainability Reporting Guidelines 2005 financial highlights recommend the publication of specific information related 4 Message from the President and CEO to environmental, social and economic performance. Although 6 Our core values Ahold’s Interim Corporate Social Responsibility Report 2005 8 What we mean by CSR (“CSR Report”) departs from those guidelines in certain Our approach respects, it incorporates such principal components as the 9 CSR throughout the value chain CEO Statement, Vision and Strategy, Group Profile, Governance 10 Healthy living Structure and Key Data. The printed CSR Report, as well as 14 Product safety the web version, which includes more detailed desciptions 16 Sourcing of some of the CSR program activities being undertaken 22 Logistics and operations around the Ahold group, also present data on waste recycling, 26 Our people organic products electricity use, refrigerants, and charitable 30 Community involvement contributions. We are currently working to augment our 34 Corporate governance and compliance corporate social responsibility reporting abilities and are developing systems to enhance our capacity to provide consistent group wide information in future reports. Data that are sourced from the Ahold Annual Report 2005 and are included in that report as audited or unaudited information, are referenced in the CSR Report as Source: Ahold Annual Report 2005. The data in the CSR Report that are not sourced from the Ahold Annual Report 2005 are unaudited or based on extrapolations or estimates. 1 Ahold Interim CSR 2005 CSR highlights Ahold CSR highlights of 2005 We strive for incremental Stop & Shop/Giant-Landover improvements in CSR. Each WasteWise day brings fresh challenges, but Stop & Shop/Giant-Landover received the WasteWise Very our shared approach helps us Large Business award for recycling from the Environmental continually achieve new successes. Protection Agency, in recognition of its efforts in areas such as organic waste and plastics recycling. Here are some highlights since more info § www.ahold.com/csr/composting our last report. Ahold joins BSCI ICA and the Good life Ahold joined the Business Social Compliance Initiative ICA launched the Gott liv (Good life) product range, (BSCI), a European alliance of 50 retailers and importers which makes healthy food simple and affordable. that aims to protect fundamental rights of employees and Packaging includes clear information on fat, sugar, improve labor conditions in their own operations and salt and fiber content. It has rapidly become one those of suppliers in high-risk countries. of the largest private brand ranges in Sweden. Albert Heijn Healthy Choice Clover Camp Hill focuses on healthy living Albert Heijn introduced the new Healthy Choice Clover Giant-Carlisle’s new state-of-the art grocery store symbol on private brand products in 2005, making it easier emphasizes the company’s commitment to health and for customers to identify healthy options. The clover symbol wellness. The store features an extended selection of appears on more than 1,200 products. organic and other health foods. In-store nutritionists are more info § www.ahold.com/csr/clover on hand to offer advice and expert assistance. 2 Ahold Interim CSR 2005 Our brands and 2005 financial highlights Ahold is an international group Our brands of quality supermarkets and foodservice operators. We provide value, quality and healthy choices in an easy, convenient and appealing shopping experience. In the United States In Europe Stop & Shop/Giant- Giant-Carlisle/Tops Albert Heijn Arena Central Europe Arena Unconsolidated Landover Arena Arena Stores: 1,651 Stores: 502 joint ventures Stores: 573 Stores: 267 HQ: Zaandam, HQ: Prague, and associates HQ: Quincy, MA HQ: Carlisle, PA the Netherlands the Czech Republic Stop & Shop Giant Food Stores Albert Heijn Albert ICA AB Stop & Shop operates food Giant operates food retail Albert Heijn operates Albert operates Stores: 2,319 retail stores in Massachusetts, stores in Pennsylvania, food retail stores supermarkets in Poland, HQ: Stockholm, Sweden Connecticut, Rhode Island, Maryland, Virginia and in the Netherlands. the Czech Republic ICA is an integrated New Jersey, New York West Virginia. Formats: supermarkets and and Slovakia. food retail and wholesale and New Hampshire. Formats: supermarkets and convenience stores group, operating in Formats: supermarkets and superstores Sweden, Norway and superstores through a joint venture in the Baltic states. Formats: supermarkets, neighborhood stores, hypermarkets and discount stores Giant Food Tops Albert.nl Hypernova Giant operates food retail Tops operates food Albert.nl provides internet- Hypernova operates stores stores in Maryland, Virginia, retail stores in northern based home shopping in Poland, the Czech Delaware and the District New York, northeast Ohio and grocery delivery in Republic and Slovakia. of Columbia. and northern Pennsylvania. the Netherlands as an Formats: hypermarkets and/or Formats: supermarkets and Formats: supermarkets and integrated service of compact hypermarkets superstores superstores the Albert Heijn Arena. JMR U.S. Foodservice Schuitema Stores: 223 Distribution centers, Stores: 462 HQ: Lisbon, Portugal warehouses and HQ: Amersfoort, Pingo Doce and Feira Nova Peapod production facilities: 126 Gall & Gall the Netherlands operate food retail stores HQ: Columbia, MD Peapod.com provides Gall & Gall operates in Portugal. They are both internet-based home wine and liquor stores part of Jerónimo Martins shopping and grocery in the Netherlands. Retail (JMR). delivery as an integrated Formats: supermarkets and hypermarkets element of the Stop & Shop/ Giant-Landover Arena, U.S. Foodservice is the C1000 along with service to second-largest broadline the metropolitan areas C1000 operates foodservice distributor supermarkets in the of Chicago, Illinois and in the United States, Milwaukee, Wisconsin. Netherlands. C1000 is part based on 2005 net sales. of Schuitema, a retail and U.S. Foodservice provides wholesale company and products and services Etos a consolidated subsidiary to approximately 250,000 of Ahold. customers. Etos operates stores in the Netherlands specializing in health and beauty care and, in certain stores, prescription drugs. Source: Ahold Annual Report 2005 3 Our strong retail and foodservice brands answer our customers’ local 2005 financial needs. Group synergies allow us highlights to operate in a simple, responsible and efficient way. The Ahold Group achieved net sales of EUR 44.5 billion in the 2005 financial year. Our operating income during the same period was EUR 248 million. Financial information (IFRS) Business highlights (in EUR millions, except per share data) 2005 2004 • EUR 3.1 billion divestment program completed Net sales 44,496 44,610 Operating income 248 923 • Net debt further reduced by EUR 1.2 billion Net income 159 898 • Preliminary court approval granted for the Net cash from operating activities 1,897 2,193 Net income attributable USD 1.1 billion (EUR 929 million) settlement to common shareholders per share 0.09 0.57 of the securities class action brought against Ahold in 2003 Employee information • Long-term strategy launched for (in EUR millions, except for number of employees) 2005 2004 U.S. Foodservice Average number of employees in full-time equivalents1 168,568 231,003 • Value repositioning at Albert Heijn and ICA Salaries and wages 4,750 4,760 further improved our market share and growth Social security charges 773 837 Pension expenses 245 191 Share-based compensation expenses 25 23 Total employee benefit expenses 5,793 5,811 Total net sales 1 Consolidated, excluding joint ventures and associates, including discontinued operations. EUR 44.5 billion Retail 13,161 Stop & Shop/Giant- Store and outlet information1 (at year end) Landover Arena Store count of our consolidated subsidiaries: 2005 2004 4,989 Giant-Carlisle/Tops Arena Stop & Shop/Giant-Landover Arena 573 563 6,585 Albert Heijn Arena Giant-Carlisle/Tops Arena 267 483 1,761 Central Europe Arena Albert Heijn Arena 1,651 1,628 3,128 Schuitema Central Europe Arena 502 442 Schuitema 462 471 Foodservice BI-LO/Bruno’s Arena2 0 453 14,872 U.S. Foodservice Rest of world3 032 Total 3,455 4,072 1 Includes company-operated supermarkets, franchise supermarkets, associated supermarkets as well as specialty retail stores, hypermarkets and convenience stores. Total operating income 2 Ahold sold BI-LO and Bruno’s in January 2005. EUR 248 million 3 Ahold sold the last of its operations in South America in April 2005. Retail Store count of our joint ventures and associates: 2005 2004 708 Stop & Shop/ Giant-Landover Arena ICA1 2,319 2,570 JMR2 223 220 72 Giant-Carlisle/Tops Arena CARHCO3 0 356 288 Albert Heijn Arena Total 2,542 3,146 95 Schuitema 1 This does not include the stores from ICA’s two joint ventures. Rimi Baltic operates over 170 stores and Netto over 70 stores. Foodservice 2 This includes 15 stores operated by Funchalgest, SGPS, S.A., a 50/50 joint venture of JMR. 86 U.S. Foodservice 3 Ahold completed the sale of its 50% interest in Paiz Ahold in September 2005. Paiz Ahold held a 66.7% stake in CARHCO N.V. (“CARHCO”). Number of foodservice properties 2005 2004 U.S. Foodservice 192 203 Note 1: Group Support Office reported an operating loss of EUR 957 million, primarily due to the settlement of the securities class action.