================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE TO
Tender Offer Statement
Under Section 14(d)(1) or 13(e)(1) of the Securities Exchange Act of 1934
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U.S. Foodservice
(Name of Subject Company)
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Koninklijke Ahold N.V. (Royal Ahold)
Snow Acquisition, Inc.
(Names of Filing Persons)
Common Stock, par value $.01 per share,
(Title of Class of Securities)
90331R101
(CUSIP Number of Class of Securities)
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Ton van Tielraden, Esq.
Koninklijke Ahold N.V.
Albert Heijnweg 1
1507 EH Zaandam
The Netherlands
011-31-75-659-9111
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Filing Persons)
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Copy to:
John M. Reiss, Esq.
Oliver C. Brahmst, Esq.
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
(212) 819-8200
CALCULATION OF FILING FEE
================================================================================
Transaction Valuation* Amount of Filing Fee
- --------------------------------------------------------------------------------
Not applicable Not applicable
================================================================================
* Set forth the amount on which the filing fee is calculated and state how it
was determined. [ ] Check the box if any part of the fee is offset as provided
by Rule 0-11 (a) (2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
Amount Previously Paid: None.
Form or Registration No: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
[X] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[ ] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
================================================================================
[Analyst presentation posted on www.ahold.com stating the following:
[Slide 1]
[Logo of Ahold]
GLOBAL FOOD PROVIDER
ACQUISITION OF U.S. FOODSERVICE (TM)
1999 ANNUAL RESULTS
March, 2000
[Slide 2]
MISSION
"...To become the world's best and most successful food provider..."
[Slide 3]
A MISSION FOR A
CHANGING MARKET
- - Consumer paradigm shift
- E-commerce
- Home meal solutions
- Away-from-home share of stomach
- - Undiminished opportunities for growth via food retailing continue
- - Increasing convergence of various aspects of food provision
- - Ahold is poised to reach the next level
[Slide 4]
STRATEGY
EXCELLENCE
GROWTH
[Slide 5]
AUTONOMOUS GROWTH
- - Investment in existing brands
- Identical sales
- Profitable investments in square footage
- Operational excellence
- - Format differentiation
- Supermarkets
- Hypermarkets
- Convenience stores
- Food service
[Slide 6]
AUTONOMOUS GROWTH
New channels
- Institutional food supply and food service
- E-commerce
Product innovation and line extension
- Category management
- Micro merchandising
- Expand specialty and non-food assortment
- Meal solutions
- Financial and other services
- Utilities
- Care and convenience
[Slide 7]
ACQUISITIONS AND JOINT VENTURES
- - Sound acquisition criteria
- Strong brands
- Good management
- Growth opportunities
- Superior return on investment
- Earnings per share enhancing
- - Proven consolidator
- - Track record of enhancing returns and growth
- - Leveraging knowledge of local partner(s)
- - Benefits from Ahold Support
[Slide 8]
AHOLD
ROYAL AHOLD TO ACQUIRE
U.S. FOODSERVICE (TM)
[Slide 9]
Overview
- - Ahold to acquire all outstanding shares in US Foodservice (TM)
- - Ahold to pay $26.00 in cash per share for a total consideration of $3.6
billion (including $925 mln. debt)
- - 2000 EBITDA multiple of 11.4x
- - 48% over March 3 share price at close
- - Closing anticipated 2Q2000
- - Immediate solid EPS contribution
[Slide 10]
LEADER IN FOOD SERVICE
U.S. Foodservice (TM) is a national marketer and distributor of food and food
related equipment, services and supplies to a range of commercial and
institutional customers.
[Slide 11]
U.S. FOODSERVICE (TM)
- - Headquartered in Columbia, Maryland
- - Second largest foodservice distributor in the U.S.
- - Broadline distributor of over 43,000 national, private label and signature
brand products
- - Sales of $6.5 billion for calendar 1999
- - 140,000 customers; 13,000 foodservice professionals
- - 40 distribution centers covering 85% of the U.S.
[Slide 12]
FULL SERVICE DISTRIBUTOR
- - Broad and complete product line
- - Consistent quality and availability
- - Reliable, on-time delivery
- - Solid IT infrastructure
- State-of-the-art sales, ordering, routing and tracking system
- E-commerce technology already on-line
- - Strong distribution asset base
- 40 nationwide locations
- Dry, refrigerated & frozen transport
- Average annual sales of $175 million per location
- 85% of customer base within 150 miles
[Slide 13]
FOODSERVICE INDUSTRY OVERVIEW
- - US$147 billion foodservice industry
- - More food dollars spent away from home
- - 5% industry growth vs. 3% for supermarket industry
- - Large and highly fragmented industry
- - Consolidation trends are accelerating
- - Economic and demographic trends driving growth
- - Growth means lower costs, better services for customers
[Slide 14]
UFS STRENGTHS
- - Low cost structure
- - Experienced management
- - E-strategy for greater efficiency and top-line growth
- - Stable customer base
- - Value added services to customers
- - Positive mix shifts
- - Superior logistics
[Slide 15]
UFS VALUE ADDED SERVICES
- - Contract and Design Services
- - Custom Dining Services (TM) for colleges and universities
- - DirectCare (followed by registered trademark logo) healthcare program
- - To Your Taste (followed by registered trademark logo) recipe program
- - Growth Tips (TM)
- Partnership with American Express
- Tax and business services, equipment financing, commercial loan
development, financial advisory
[Slide 16]
NEXTDAYGOURMET.COM
- - First broadline provider to offer equipment and supplies via Internet
- - Reduced carrying costs and delivery times
- - 17,000 hits per week
- - Annualized sales of $100 mln
- - Adding to topline growth
- - Dedicated warehouses in Indianapolis and Minneapolis
[Web page stating the following information:
http://www.nextdaygourmet.com/store/default.asp
welcome to next day gourmet
NEXT DAY
GOURMET
Next Day Gourmet (followed by trademark logo) is one of SHOPPING AISLES
the largest providers of equipment Baking Supplies
and supplies to the foodservice Bar Equipment
industry. We now offer our Bar Supplies
complete line of professional Beverages
equipment to the discriminating China
consumer. From wooden spoons Cleaning Supplies
to china and glassware Next Day Clothing
Gourmet (followed by trademark logo) Countertop Equipment
will provide you with the best quality Cutlery
kitchen items available in the industry. Dining Room
We offer major brands such as Homer Laughlin china,
Oneida flatware, Libbey Glass, Cambro dining supplies
and Vollrath pots and pans. In addition to these well
established domestic companies Next Day Gourmet
(followed by trademark logo) imports kitchen and dining
supplies from around the world.]
[Slide 17]
NEXTDAYGOURMET.COM
- - Business-to-Business Strategy
- Increased operating efficiency and higher inventory turns on sales of
equipment and supplies
- Migrate food ordering to web-based systems
- Technology leadership in industry to drive new relationships
- - Business-to-Customer Strategy
- To be the destination of choice for foodservice professionals for
specialty foods, cooking supplies and other unique items
- Leverage existing assets to efficiently build customer business
[Slide 18]
U.S. FOODSERVICE (TM) DIVISIONS
[Map of the United States showing locations of U.S. Foodservice Divisions and
Next Day Gourmet]
[Slide 19]
UFS BRANDS
[Logo of Cross Valley Farms]
[Logo of Roseli]
[Logo of Rituals]
[Logo of el Pasado Authentic Mexican Cuisine With A Touch Of The Past]
[Logo of Harbor Banks]
[Slide 20]
UFS GROWTH STRATEGY
- - Strong organic growth by penetrating existing markets and improving
operating leverage
- - Margin expansion
- private label growth
- growth in higher margin street sales
- continued synergies from Rykoff-Sexton acquisition
- other cost reductions
- leading to strong consumer benefit
- - Acquisitions (stand-alone and fold-in)
Sales growth of 8 - 10%
EBITDA Growth of 11 - 13%
[Slide 21]
AHOLD AND UFS:
PLATFORM FOR INNOVATION
- - Opportunities for innovation between institutional and retail business
- - Existing food service business: Deli XL and ICA Meny
- - National presence with enhanced fulfillment capacity
- - Growth opportunities
- - Shared philosophy of local marketing/distribution with centralized
administration and procurement
- - Able to meet challenges of the global food industry
[Slide 22]
AHOLD AND UFS:
OPPORTUNITIES
- - Innovations
- Gourmet food positioning
- Deli and small scale private catering solutions
- New categories for NextDayGourmet.com
- - E-commerce
- Use of existing warehouse facilities and distribution
- Share technology and back-end knowledge
- - Internalization of fulfillment
- primarily HMR & Deli purchases
- - Shared supplier base
- - Better serve UFS and Ahold customers with further growth and savings
[Slide 23]
SYNERGIES
- - Cost reductions
- - Purchasing
- - Distribution and logistics
- - Technology
- - Coordination of home meal replacement
- - Use of brand names, signature brands and trademarks
- - Gourmet food distribution
- - IT and e-business
- - Finance and insurance
Realizable synergies and cost savings of US$ 75 million - US$100
million annually
[Slide 24]
VALUE FOR AHOLD SHAREHOLDERS
- - In line with strategic objectives
- - Valuable resources and platform
- industry leader
- experienced management
- best-in-class asset base
- US-European best practice exchange
- - Synergies of $75 million to $100 million annually
- - Immediate solid EPS enhancement
- - EVA positive in 4 years
- - New vehicle for growth
[Slide 25]
UFS SHARE PERFORMANCE
[Graph representing the following information:
Date Price
12-03-99 22.15625
19-03-99 21.65625
26-03-99 22
02-04-99 22.5625
09-04-99 21.875
16-04-99 21.875
23-04-99 20.875
30-04-99 21.03125
07-05-99 22.25
14-05-99 23.25
21-05-99 23.28125
28-05-99 22.25
04-06-99 23.34375
11-06-99 22.96875
18-06-99 21.15625
25-06-99 22.34375
02-07-99 21.5
09-07-99 21.09375
16-07-99 21.09375
23-07-99 20.90625
30-07-99 21.21875
06-08-99 21.0625
13-08-99 19.3125
20-08-99 22.125
27-08-99 20.375
03-09-99 21.0625
10-09-99 20.5
17-09-99 19.5
24-09-99 18.3125
01-10-99 17.5625
08-10-99 17
15-10-99 17.625
22-10-99 17
29-10-99 19.1875
05-11-99 17.6875
12-11-99 19.5625
19-11-99 18.75
26-11-99 18.1875
03-12-99 18.5
10-12-99 16.875
17-12-99 14.5625
24-12-99 15.25
31-12-99 16.75
07-01-00 18.4375
14-01-00 17.875
21-01-00 17.9375
28-01-00 17.6875
04-02-00 12
11-02-00 13
18-02-00 11.8125
25-02-00 15.5
03-03-00 17.4375]
[Slide 26]
UFS INCOME STATEMENT
[Table stating the following information:
4 quarters ended 31-Dec.
(in $ mln) 1999 1998
Sales 6,545 5,806
Gross margin 1,220 18.6% 1,084 18.7%
EBITDA 290 256
Depreciation and amortization 58 60
EBIT 232 197
Interest 64 67
Taxes 66 52
Net Income 101 78]
[Slide 27]
UFS BALANCE SHEET
[Table stating the following information:
3-Jul 27-Jun
FY 1999 FY 1998
(in $ mln)
Tangible fixed assets 454 437
Intangible Fixed Assets 664 583
Current Assets 895 797
Total Assets 2,013 1,818
Shareholders' equity 829 585
Long term debt 534 651
Other non-current liabilities 134 73
Current liabilities 515 509
Total Shareholders' Equity and Liabilities 2,013 1,818]
[Slide 28]
KEY INDICATORS 1999
[Table stating the following information:
UFS AHOLD
EBIT % of sales 3.5% 4.2%
EBITDA % of sales 4.4% 6.8%
CROCE (incl. goodwill) 19.2% 17.6%
Aver. Net Debt / EBITDA 2.4 2.1
Interest Coverage 3.6 3.9]
[Slide 29]
SUMMARY: A LOGICAL TRANSACTION
- - In Line With Ahold's Mission and Strategy
- - Abundant Synergies to be Achieved
- - Beneficial to all Stakeholders
- - Improves ability to serve UFS customers better
- - New Growth Vehicle for Ahold USA
- - Expansion of Geographic Coverage in U.S.
- - Positive Financial Impact
- - EPS Enhancement
[Slide 30]
[Logo of Ahold]
[Logo of US Foodservice (TM)]
[Slide 31]
GLOBAL REVIEW
[Slide 32]
GROWTH IN THE UNITED STATES
- Provide best value for customers
- Autonomous growth
- Development of new formats and pursuit of new business channels
- Expand e-commerce initiatives
- Acquisitions in new or adjacent markets
- Streamline distribution and logistics
- Growing bottom line faster than top line
[Slide 33]
Growth in The Netherlands
- - Capture increased share of stomach
- - Increase distribution efficiency and flexibility
- - Format innovations
- - Albert Heijn Home Shopping
- - Solid earnings growth
[Slide 34]
GROWTH IN EUROPE
Portugal
- - Expansion of joint venture partnership under review
- - Significant benefits from European synergies
Central Europe
- - Strong and profitable growth in Czech Republic
- - Polish operations due to break even in 2001
Spain
- - Continued growth through fill-in acquisitions
- - Secure regional market leadership positions
[Slide 35]
EXPANSION IN NORDIC MARKETS
INTEGRATING ISOLATED MARKETS INTO EUROPE
[Map of Sweden, Finland, Baltic States, Norway and Denmark]
Sweden
- - Pop. 8.9 million
- - Food spending $2.800
Norway
- - Pop. 4.4 million
- - Food spending $5,000
USA
- - Pop. 272.9 million
- - Food spending $3,200
France
- - Pop. 58.8 million
- - Food spending $2,600
Netherlands
- - Pop. 8.9 million
- - Food spending $1,900
[Slide 36]
AHOLD-ICA
- - Strong drive for professionalism
- - Shift towards successful franchise formula
- - Analogy with Albert Heijn and Schuitema C1000
- - Significant opportunities for synergies
- - Excellent top line and EBIT growth opportunities
- - Growth potential for ICA Statoil joint venture
- - Sharing best practices
- - Guidance from Ahold European Competence Centers
- - Cultural fit, local adaptiveness, global synergies
[Slide 37]
SOLID EXPANSION IN LATIN AMERICA
La Fragua
- - Leader in Guatemala, growing in Honduras & El Salvador
- - Growth via strong square footage expansion
- - Integration into Ahold network
Disco-Ahold International Holdings
- - Continuous expansion of Disco & VEA in various formats
- - Infrastructure projects at Disco, new DC in Chile
- - Internet shopping at Disco
- - Turn around for Santa Isabel in Chile and Peru
- - Future growth through efficiency improvements and store expansion
[Slide 38]
SOLID EXPANSION IN LATIN AMERICA
Bompreco
- - Undisputed market leader in northeast Brazil
- - Major commitment to future growth which is driven by:
- New hypermarkets and supermarkets
- Several remodelings in both Recife and Bahia regions
- Upgrade distribution in Bahia
- Margin improvement in Bahia
- Improving merchandising (own-label, etc.)
- Hipercard
- Explore possible buying synergies with Se
[Slide 39]
FOCUSING IN ASIA
- - Focus on Thailand, Indonesia and Malaysia
- - Major expense reductions in all regions
- - Organic growth of 13 new stores in 2000
- - Future growth driven by:
- Growing critical mass in all countries (to improve purchasing
conditions and leverage fixed costs)
- Improving store operations
- Further improvement of distribution
- - Objective is to break-even by year-end
[Slide 40]
AHOLD IN E-COMMERCE
March, 2000
[Slide 41]
E-COMMERCE BIAS
Order Entry Delivery
Internet Home
Mobile Phone Pick up Point
Interactive TV Store
Fax Other
Telephone
[Slide 42]
AHOLD STRATEGY
BRAND
DIGITAL COMMERCE
GLOBAL TECHNOLOGY
REGIONAL FULFILLMENT
MARKETING (LOCAL)
[Slide 43]
TECHNOLOGY
- - AH based back-end system
- Albert Heijn
- Stop & Shop
- - Newly developed front-end system
- - Scale and upgrade (USA, AH, other)
- - Partnering
[Slide 44]
FULFILLMENT
- - Wareroom and Warehouse based business model
- - Economically viable
- - Develop partnerships in delivery
- - Physical products and services
[Slide 45]
MARKETING
- - Site content
- Information
- Digital Products
- Entertainment
Developed with selective strategic partners
Interactive Communication
- On-line circular
- Store planograms
- Shopping list
- - Global Brand
[Slide 46]
AHOLD IN E-COMMERCE
BUSINESS-TO-BUSINESS/ BUSINESS-TO-CUSTOMER
[Table representing the following information:
1999 2000E
B-to-C Sales (E mln) 61 240
Customers per year +/-300,000 +/- 1,150,000
*AH (groceries) 60% 70%
*USA (groceries) 80% 90%
B-to-B
*Deli XL 15% 30%
B-to-B Global Net Xchange]
[Slide 47]
CUSTOMER SALES
[Table representing the following information:
1999 2000P 2001P 2002P
Sales (E mln) 61 240 500 950
As % of Total Sales 0.2% 0.6% 1.2% 1.8%]
[Slide 48]
CURRENT SITUATION
NETH
*www.Ahold.nl
**www.ah.nl
**www.gall.nl
**www.delixl.nl
CZECH
*www.ahold.cz
SWE
*www.ica.se
NOR
*www.hakon.no
PORT
**www.pingodoce.pt
USA
*www.aholdusa.com
*www.bilo.com
*www.giantfood.com
**www.stopandshop.com
*www.topsmarkets.com
GUATA
*www.lafragua
ARG
**www.disco.com.ar
BRAZ
*www.bompreco.com.br
THAI
*www.tops.com.th
*information only
**electronic ordering
[Slide 49]
1999 FINANCIAL REVIEW
[Slide 50]
[Table stating the following information:
HIGHLIGHTS 1999
(in E mln) 1999 Growth 1999 vs 1998 1998
Sales 33,560 26.7% 26,484
EBITDA 2,283 1,690
as a % of sales 6.8% 6.4%
EBIT 1,415 39.1% 1,017
as a % of sales 4.2% 3.8%
NET EARNINGS 752 37.4% 547
EPS
(including currency impact) 1.15 25.5% 0.92
EPS
(excluding currency impact) 1.12 22.0% 0.92]
[Slide 51]
[Table stating the following information:
HIGHLIGHTS Q4
(in E mln) 1999 Growth 1999 vs 1998 1998
SALES 8,580 12.8% 7,604
EBITDA 641 513
as a % of sales 7.5% 6.7%
EBIT 420 31.7% 319
as a % of sales 4.9% 4.2%
NET EARNINGS 237 35.8% 175
EPS
(including currency impact) 0.36 34.9% 0.27
EPS
(excluding currency impact) 0.34 25.6% 0.27]
[Slide 52]
AHOLD (in E mln)
[Bar graph representing the following information:
Sales EBIT (as % of sales)
1999 33,560 4.2%
1998 26,484 3.8%
1997 22,947 3.6%
1996 16,580 3.4%
1995 13,435 3.1%]
[Table representing the following information:
1999 growth 1998
Sales (in E mln) 33,560 26.7% 26,484
EBIT (in E mln) 1,415 39.1% 1,017]
[Slide 53]
USA (in $ mln)
[Bar graph representing the following information:
Sales EBIT (as % of sales)
1999 20,340 4.9%
1998 16,182 4.4%
1997 14,299 4.0%
1996 11,244 3.1%
1995 8,336 2.7%]
[Table representing the following information:
1999 growth 1998
Sales (in $ mln) 20,340 25.7% 16,182
EBIT (in $ mln) 1,001 40.3% 713]
[Slide 54]
THE NETHERLANDS (in E mln)
[Bar graph representing the following information:
Sales EBIT (as a % of sales)
1999 8,086 4.2%
1998 7,712 3.9%
1997 7,229 3.4%
1996 6,788 3.3%
1995 6,499 3.0%]
[Table representing the following information:
1999 Growth 1998
Sales (in E mln) 8,086 4.9% 7,712
EBIT (in E mln) 337.2 10.7 304.6]
[Slide 55]
OTHER EUROPE (in E mln)
[Bar graph representing the following information:
Sales EBIT (as % of sales)
1999 2,367 5.1%
1998 1,737 5.6%
1997 1,451 5.6%
1996 1,151 6.5%
1995 866 6.4%]
[Table representing the following information:
1999 growth 1998
Sales (in E mln) 2,368 36.3% 1,737
EBIT (in E mln) 121.9 24.9% 97.6]
[Slide 56]
LATIN AMERICA (in E mln)
[Bar graph representing the following information:
Sales EBIT (as % of sales)
1999 3,497 2.7%
1998 2,116 3.0%
1997 1,190 3.1%]
[Table representing the following information:
1999 growth 1998
Sales (in E mln) 3,497 65.2% 2,116
EBIT (in E mln) 96.7 54.0 62.8]
[Slide 57]
ASIA PACIFIC (in E mln)
[Bar graph representing the following information:
Sales EBIT (as % of sales)
1999 476 -8.6%
1998 410 -11.5%
1997 420 -8.6%
1996 25 -36.0%]
[Table representing the following information:
1999 growth 1998
Sales (in E mln) 476 16.2% 410
EBIT (in E mln) -40.8 10.8% -46.9]
[Slide 58]
INTEREST COVERAGE
[Bar graph representing the following information:
1999 3.91
1998 4.18
1997 3.60
1996 3.83
1995 3.62]
Interest Coverage = EBIT / (Interest Income - Interest Expenses)]
[Slide 59]
CASHFLOW (in E mln)
[Bar graph representing the following information:
1999 1,709
1998 1,218
1997 903
1996 685
1995 519
Excluding minority interest]
[Slide 60]
CAPITAL EXPENDITURES (in E mln)
[Bar graph representing the following information:
1999 1,611
1998 1,203
1997 1,116
1996 640
1995 476
Net of divestments and excluding acquisitions]
[Slide 61]
BALANCE SHEET
[Table representing the following information:
1999 1998
Net tangible and intangible fixed assets 8,685 6,942
Financial fixed assets 464 459
Fixed Assets 9,149 7,402
Inventories 2,552 1,996
Receivables 1,697 1,509
Cash and short-term investments 888 519
Current Assets 5,137 4,025
TOTAL Assets 14,286 11,426
Total Equity 2,126 1,553
Minority interests in equity 336 243
Group Equity 2,462 1,796
Capital Accounts 3,322 2,656
Provisions 1,087 1,100
Long-term debt 3,797 3,063
Short-term debt 6,080 4,607
TOTAL LIABILITIES 14,286 11,426]
[Slide 62]
NET GEARING
[Bar graph representing the following information:
Net Gearing Net Gearing Including Capital Leases
1999 206% 160
1998 238% 190
1997 174 131
1996 172 125
1995 106 69]
[Slide 63]
CAPITAL ACCOUNTS
[Bar graph representing the following information:
Group Equity/Total assets Capital Accounts/Total assets
1999 17% 23%
1998 16% 23%
1997 19% 21%
1996 18% 21%
1995 25% 29%]
[Slide 64]
AVERAGE NET DEBT/ EBITDA
[Bar graph representing the following information:
1999 2.09
1998 1.59
1997 1.92
1996 1.48
1995 1.43
Average Net Debt/EBITDA = Average Net Interest Bearing Debt/EBITDA]
[Slide 65]
CROACE AHOLD
[Bar graph representing the following information:
CROACE = EBITDA/Average Capital Employed
Excluding Goodwill Including Goodwill
1999 17.7% 31.8%
1998 19.0% 31.3%
1997 19.3% 32.3%
1996 23.9% 34.2%]
[Slide 66]
OUTLOOK FOR 2000
- - Higher sales and operating results in all regions
- - EPS growth (exc. Currency fluctuations)
- At least 15%
- 17 to 20%, including acquisitions
- - 7% autonomous sales growth in the United States
- - Approx. 170 new stores in existing European chains
- - 10% autonomous growth in Latin America
- - Sales growth in Asia
[Slide 67]
AHOLD
FINANCING REQUIREMENTS
[Slide 68]
FINANCING REQUIREMENTS
- - Total financing requirement E4.4 bln. For ICA and U.S. Foodservice TM
- - Several acquisitions have been completed in 1999
- - Committed to interest coverage ratio, net gearing and net debt/ EBITDA
ratio
- - Financing mix:
- E 3 bln. Equity and/ or equity linked offering
- remainder to be financed by public debt
[Slide 69]
This presentation contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of the safe-harbor provisions of
the U.S. federal securities laws. These forward-looking statements are subject
to risks and uncertainties that could cause actual results to differ materially
from those expressed in 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 future market and economic conditions, the behavior
of other market participants, the ability to successfully integrate acquired
businesses and achieve anticipate synergies and the actions of government
regulators. These and other risk factors are detailed in Ahold's publicly filed
reports. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
presentation. Ahold does not undertake any obligation to publicly release any
revisions to these forward-looking statements to reflect events or circumstances
after the date of these materials.
[Slide 70]
U.S. FoodserviceTM stockholders are advised to read the tender offer statement
regarding the acquisition of U.S. FoodserviceTM referenced in this presentation,
which will be filed by Ahold with the U.S. Securities and Exchange Commission
and the related solicitation/recommendation statement which will be filed by
U.S. FoodserviceTM with the Commission. The tender offer statement (including an
offer to purchase, letter of transmittal and related tender offer documents) and
the solicitation/recommendation statement will contain important information
which should be read carefully before any decision is made with respect to the
offer. These documents will be made available to all stockholders of U.S.
FoodserviceTM, at no expense to them, by contacting Royal Ahold's Investor
Relations Department at +31 75 659 5828 or via [email protected].
These documents also will be available at no charge at the SEC's website at
www.sec.gov.]
Fact Sheet
Company Description
U.S. Foodservice (TM) (NYSE: "UFS") is the second largest broadline foodservice
distributor in the US with sales of $6.2 billion for fiscal 1999 (ended July 3)
and annualized sales of $7 billion. The company is headquartered in Columbia,
Maryland, and employs about 13,000 food service professionals. UFS operates 40
major distribution centers covering 85% of the United States, servicing over
140,000 customers. Average turnover per facility is approximately $175 million.
Customer Segmentation. UFS has a stable customer base, with no single account
representing more than 5% of net sales.
[Pie chart representing the following information regarding customer
segmentation:
Restaurants 65%
Hotels & Casinos 8%
Healthcare 7%
Schools & Colleges 6%
Business & Industry 5%
Other 9%]
Services. In addition to the sale of branded, signature and private label food
(related) products, UFS offers a variety of services to its customers.
NextDayGourmet.com is a Web-based fulfillment system allowing UFS to market
equipment and supplies to customers via the Internet. Custom Dining Services
(TM) is a service program to the college and university market. DirectCare (R)
offers menu advice and solutions to institutional healthcare clients, which
includes directAdvantage (R), a software package for menu management and
customized direct order entry, among other things.
Product Categories. UFS carries more than 43,000 SKUs with private label brands
accounting for about 25% of total sales. Product categories, based on 1999 sales
are as follows: Canned and dry products: 30%; Meats: 16%; Other Frozen Goods:
14%; Dairy Products: 9%; Paper Products: 8%; Poultry: 7%; Seafood: 6%;
Perishable Food Products: 3%; Equipment and supplies: 3%; Janitorial Supplies:
2%; Contract and Design Services: 2%.
Foodservice Distribution in the United States
Foodservice distribution is a highly fragmented but rapidly consolidating
industry in the U.S. It can be defined as a business-to-business operation where
food and food-related products are distributed to companies, which serve food
prepared away from home. Foodservice distributors purchase, store, market and
transport food products, paper products and other supplies and food-related
items and are generally classified as broadline, specialty or system
distributors. Foodservice operators include Buffet Inc., Perkins Family
Restaurants, Subway, Pizzeria Uno, Ruby Tuesday and Chili's.
Over 3,000 companies service the industry with a total turnover in 1998 of $147
billion. Only 7 players in 1998 had a turnover in excess of $1 billion. The
foodservice industry is experiencing a real growth rate of approximately 4.5%
per annum. The largest players and their respective market share are SYSCO
12.1%; UFS 4.1%, Alliant 4.0% and PYA at 2.1%.
Key Terminology
Broadline Companies offer a comprehensive range of food and related products
from a single source of supply and provide foodservice establishments with the
cost savings associated with large full-service deliveries.
Chain Sales. Franchises or corporate-owned units of regional family dining &
other restaurant concepts, hotel & other regional institutional operators.
Commercial Foodservice includes horeca (hotels, restaurants, and cafes) and
other catering, including sport/club canteens, convenience & recreational points
of sale.
Foodservice encompasses all away-from-home consumption, except self-taken food
from home and fully prepared food by others (excluding retailers) that is
consumed in-home.
Market and Product Specialists. Specialty distributors who generally are small,
family-owned enterprises that supply only one or two product categories.
Non-Commercial Foodservice encompasses employee feeding (company and school
restaurants) and institutional catering (in hospitals, retirement homes, nursing
homes & prisons).
Street Sales refer to sales by commissioned representatives to independent
restaurants, hotels, schools and other foodservice businesses.
System Distributors typically supply a narrow range of products to a limited
number of multi-unit businesses operating in a broad geographic area.
<PAGE>
[Table stating the following information:
Summary Profit & Loss Statement Fiscal Years Ended
US$'000s 6 mths ended 3-Jul 27-Jun 28-Jun
Jan. 1, 2000 1999 1998 1997
Net sales 3,357,835 6,198,408 5,506,949 5,169,406
Cost of Sales 2,731,986 5,052,068 4,465,281 4,166,332
Gross Profit 625,849 1,146,340 1,041,668 1,003,074
Income from Operations 115,648 212,166 60,899 145,824
Net Interest Expense and
Other Financing costs 31,849 64,974 73,894 76,063
Nonrecurring Charges - - 17,822 5,400
Income Before Income Tax
and Extraordinary Charges 83,799 147,192 (30,817) 64,361
Provisions for Income Taxes 33,409 58,910 6,475 26,075
Income (loss) before
extraordinary charge 50,390 88,282 (37,292) 38,286
Extraordinary Charge,
net of income tax benefit - (5,048) (9,712) -
Net and Comprehensive income 50,390 83,234 (47,004) 38,286]
[Table stating the following information:
Summary Balance Sheet Fiscal Years Ended
US$'000s 6 mths ended 3-Jul 27-Jun
Assets Jan. 1, 2000 1999 1998
Current Assets:
Cash and Cash Equivalents 66,255 79,660 57,817
Receivables, net 408,256 234,107 215,459
Residual interest in account
receivables sold 102,103 102,369 106,581
Inventories 467,978 428,193 349,583
Other current assets 44,739 31,949 28,548
Deferred income taxes 19,086 18,853 39,294
Total Current Assets 1,108,417 895,131 797,282
Property & Equipment, Net 468,492 454,033 437,265
Goodwill, net of accumulated
amortization of $45,960 and
$64,617 712,414 637,107 561,695
Other Non Current Assets - 26,603 21,549
Total Assets 2,289,323 2,012,874 1,817,791
Liabilities and Stockholders'
Equity
Total Current Liabilities 494,621 515,191 509,466
Long-term Debt 793,204 533,191 650,679
Obligations under Capital Leases 22,310 24,671 29,946
Deferred Income Taxes 18,855 13,051 6,064
Other Noncurrent Liabilities 74,168 96,713 36,916
Total Liabilities 1,403,158 1,182,817 1,233,071
Total Stockholders' Equity 886,165 829,379 584,720
Total Liabilities and Stockholders'
Equity 2,289,323 2,012,196 1,817,791]
[Table stating the following information:
Fiscal years ended
3-Jul 27-Jun
1999 1998
Operating margin after
depreciation 3.4% 3.2%
ROCE 10.5% 8.6%
Return on equity after tax 10.5% 10.7%
Asset turn (times) 3.07 3.03
Equity/ Assets 41.2% 32.2%
EPS ($) $ 1.80 $ 1.37]
[Table stating the following information:
Summary of Cash Flows Fiscal Years Ended
US$'000s 6 mths ended 3-Jul 27-Jun 28-Jun
Jan. 1, 2000 1999 1998 1997
Net Income 50,390 93,234 (47,004) 38,286
Net Cash Provided (Used in)
by Operating Activities (176,401) 171,961 70,660 116,146
Net Cash Used in Investing
Activities (88,828) (49,448) (102,290) (106,763)
Net Cash Provided by (Used in)
Financing Activities 251,824 (100,670) 15,015 30,780
Net Increase (Decrease) in
Cash and Cash Equivalents (13,405) 21,843 (16,615) 40,163]
[Graph representing the following information:
UFS Weekly Share Price
(March 5, '99 - March 2, '00)
Date Price
12-03-99 22.15625
19-03-99 21.65625
26-03-99 22
02-04-99 22.5625
09-04-99 21.875
16-04-99 21.875
23-04-99 20.875
30-04-99 21.03125
07-05-99 22.25
14-05-99 23.25
21-05-99 23.28125
28-05-99 22.25
04-06-99 23.34375
11-06-99 22.96875
18-06-99 21.15625
25-06-99 22.34375
02-07-99 21.5
09-07-99 21.09375
16-07-99 21.09375
23-07-99 20.90625
30-07-99 21.21875
06-08-99 21.0625
13-08-99 19.3125
20-08-99 22.125
27-08-99 20.375
03-09-99 21.0625
10-09-99 20.5
17-09-99 19.5
24-09-99 18.3125
01-10-99 17.5625
08-10-99 17
15-10-99 17.625
22-10-99 17
29-10-99 19.1875
05-11-99 17.6875
12-11-99 19.5625
19-11-99 18.75
26-11-99 18.1875
03-12-99 18.5
10-12-99 16.875
17-12-99 14.5625
24-12-99 15.25
31-12-99 16.75
07-01-00 18.4375
14-01-00 17.875
21-01-00 17.9375
28-01-00 17.6875
04-02-00 12
11-02-00 13
18-02-00 11.8125
25-02-00 15.5
03-03-00 17.4375
and a legend stating the following information:
Shares out. 101.9 mln
Eqy Float 99.50%
52 Wk H (5/18/99) 24.625
52 Wk L(17-02-00) 11.3125]
This announcement contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of the safe-harbor provisions of
the U.S. federal securities laws. These forward-looking statements are subject
to risks and uncertainties that could cause actual results to differ materially
from those expressed in 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 future market and economic conditions, the behavior
of other market participants, the ability to successfully integrate acquired
businesses and achieve anticipate synergies and the actions of government
regulators. These and other risk factors are detailed in Ahold's publicly filed
reports. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this press
release. Ahold does not undertake any obligation to publicly release any
revisions to these forward-looking statements to reflect events or circumstances
after the date of these materials.
U.S. Foodservice stockholders are advised to read the tender offer statement
regarding the acquisition of U.S. Foodservice referenced in this press release,
which will be filed by Ahold Acquisition Inc. and Koninklijke Ahold N.V. with
the U.S. Securities and Exchange Commission and the related
solicitation/recommendation statement which will be filed by U.S. Foodservice
with the Commission. The tender offer statement (including an offer to purchase,
letter of transmittal and related tender offer documents) and the
solicitation/recommendation statement will contain important information which
should be read carefully before any decision is made with respect to the offer.
These documents will be made available to all stockholders of U.S. Foodservice,
at no expense to them, by contacting information agent, Morrow & Co., Inc.
Stockholders please call US 800 566 9061. These documents also will be available
at no charge at the SEC's website at www.sec.gov.]
[Press Release, dated March 7, 2000, stating:
Ahold President & CEO, Cees van der Hoeven at Annual Press Conference
2000:
'From food retailer to food provider'
Excellent 1999 results; major US acquisition
Zaandam, The Netherlands, March 7, 2000 - Royal Ahold, the international food
provider, today announced its 1999 results and the planned acquisition of
America's second largest food distributor, U.S. Foodservice.
Addressing the media at the company's annual press conference in Zaandam,
President & CEO, Cees van der Hoeven, confirmed Ahold is developing into a
leading global food provider and the company anticipated net earnings in future
years will be significantly higher than in 1999 coupled with further strong
autonomous growth.
Van der Hoeven said 1999 proved an outstanding year. Net earnings of EUR 752.1
million grew at a brisk 37%, whilst earnings per share were higher by 25%.
Ahold's total sales of EUR 33.6 billion were up 27% of which autonomous growth
was a strong 7%.
Strategy in check
Confident about the strength of the company's future autonomous growth, Van der
Hoeven said Ahold will continue to acquire or joint venture with best of class,
significant and superior businesses. He stated there are ample investment
opportunities in the existing chain, 'and Ahold sees major contributions to
growth and results through its joint venture with the ICA Group, further
expected enlargement of its joint venture with Jeronimo Martins and of course,
today's announcement, the acquisition of U.S. Foodservice.'
Broadening horizons
Van der Hoeven was particularly excited about the addition of U.S. Foodservice.
He stated that the acquisition allows Ahold to expand its horizon from food
retailer to the world's best and most successful food provider; 'Adding closely
related new channels of trade such as food service, e-commerce and financial and
other services, will significantly advance shareholder value. Consumers are
choosing to eat away from home more often and this acquisition allows Ahold to
gain a greater share of stomach in this fast-growing market,' he said.
Synergies abound
At the press conference the beneficial links between food service and food
retail were detailed. Ahold intends to exploit these to the maximum. 'Synergies
and cost savings from the U.S. Foodservice transaction are expected to amount to
a minimum of USD 75 million by 2001. For U.S. Foodservice, the synergies lie in
lower cost purchases, systems improvements and distribution efficiencies. In
addition, the link of foodservice to e-commerce is promising as U.S. Foodservice
has a very well-developed business-to-business program.'
E-commerce
Van der Hoeven reiterated Ahold's commitment to roll out its e-commerce and
internet shopping on a global basis and its intention to invest considerably in
these areas in future years. 'In 2000, the company expects to sell between Euro
200-250 million worth of goods and services through the net, whilst we see this
amount doubling each year in 2001 and 2002.' Van der Hoeven said Ahold has a
flying start in this area due to its strong household brands, thorough knowledge
and experience in home shopping and advanced delivery systems.
This press release contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of the safe-harbor provisions of
the U.S. federal securities laws. These forward-looking statements are subject
to risks and uncertainties that could cause actual results to differ materially
from those expressed in 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 future market and economic conditions, the behavior
of other market participants, the ability to successfully integrate acquired
businesses and achieve anticipate synergies and the actions of government
regulators. These and other risk factors are detailed in Ahold's publicly filed
reports. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this press
release. Ahold does not undertake any obligation to publicly release any
revisions to these forward-looking statements to reflect events or circumstances
after the date of these materials.
U.S. Foodservice stockholders are advised to read the tender offer statement
regarding the acquisition of U.S. Foodservice referenced in this press release,
which will be filed by Ahold Acquisition Inc. and Koninklijke Ahold N.V. with
the U.S. Securities and Exchange Commission and the related
solicitation/recommendation statement which will be filed by U.S. Foodservice
with the Commission. The tender offer statement (including an offer to purchase,
letter of transmittal and related tender offer documents) and the
solicitation/recommendation statement will contain important information which
should be read carefully before any decision is made with respect to the offer.
These documents will be made available to all stockholders of U.S. Foodservice,
at no expense to them, by contacting information agent, Morrow & Co., Inc.
Stockholders please call US 800 566 9061. These documents also will be available
at no charge at the SEC's website at www.sec.gov.]
Corporate Profile U.S. Foodservice Inc.
Facts & Figures
Name U.S. Foodservice Inc.
Head Office Columbia, Maryland, USA
Number of distribution centers
(as of March 7, 2000) 40
Number of associates 13,250
Main trade areas North east, eastern seaboard, West Coast,
Texas and Oklahoma
Executive Board Jim Miller, President & CEO
Mark Kaiser, Executive Vice President,
Sales, Marketing & Procurement
George Megas, Senior Vice President & CFO
Fiscal Year July 1, 1998 to June 30, 1999
Fiscal 1999 sales USD 6.2 billion
Fiscal 1999 EBITA USD 229.2 million
Fiscal 1999 net earnings USD 83.2 million
Fiscal 1999 earnings per share USD 0.91 (before acquisitions and
extraordinaries)
Capital Structure 101.5 million common shares outstanding
(Ten top institutional investors own
47.4% of the company)
Company Overview
Currently ranked second in the food service market, U.S. Foodservice
distribution centers cover 85% of the US population. It has a stable customer
base of over 140,000 customers nationwide. The company's top 10 customers make
up 15% of its total sales. These diverse customers include Buffet's Inc.,
Perkins Family Restaurants, Subway, Pizzeria Uno, Ruby Tuesday and Chili's.
Operating through a hybrid structure, U.S. Foodservice has centralized
purchasing, finance & accounting and decentralized sales to independent
restaurants which are serviced from one of its 40 distribution centers.
Growth Strategy
U.S. Foodservice drives local market share to improve customer service, and as a
result profitability. The company is rapidly expanding its existing business.
Last year it completed several acquisitions in line with its growth strategy,
broadening its geographic reach. U.S. Foodservice also has an important line of
signature brand products with considerable potential for synergies with Ahold's
retail operations.
Business Overview
The American food service business is fragmented. U.S. Foodservice is seen as a
preferred partner in the industry as witnessed by the four acquisitions it has
made in the current fiscal year, worth well in excess of $500 million. It is the
second leading food distribution company in the US where over 3000 food service
distributors operate nationwide. The top four make up 22% of the market. 1999
statistics show that US consumers spent a total of $732 billion on food
purchases. That figure is virtually split between those who consume food at home
($365 billion) and those who eat away from home ($367 billion). U.S. Foodservice
intends to be at the forefront of satisfying those customers who choose to
purchase their food prepared away from home. There is considerable potential to
blend Ahold's US food store operations with the institutional food service
market, offering benefits to all parties involved.
Broad range of quality items
U.S. Foodservice is a leading distributor of food and related products and
services to restaurants and institutional food service establishments across the
United States. U.S. Foodservice markets and distributes more than 40,000
national, private label, and signature brand items to over 140,000 food service
customers, including restaurants, hotels, sports stadiums, healthcare
facilities, cafeterias, schools, military and government facilities.
E-commerce comes online
U.S. Foodservice is using the internet to service its customers. It has launched
a large-scale e-commerce enterprise enabling customers to order kitchen
supplies, business equipment and gourmet food items through the
business-to-business website. These activities are expected to generate sales of
approximately USD 530 million annually. This website can be found at:
www.nextdaygourmet.com
Background
U.S. Foodservice (NYSE: UFS) was formed from a merger between JP Foodservice and
Rykoff Sexton on December 23, 1997, thus creating the nation's second largest
broadline food service distributor. The new company can trace its roots back to
the 1800's and represents the clustering of many respected and successful brand
names. In 1999, the company's national presence grew further with a series of
acquisitions, including one in New York and another in southern California.
The three major food service markets in the US are located in Chicago, New York
and Southern California. U.S. Foodservice owns approximately 50 major brands
actively marketed under such well-known names as Roseli (R), Cross Valley Farms
(R), Rituals (R), El Pasado Authentic Mexican Cuisine With A Touch of The
Past(R) and Harbor Banks (R).
U.S. Foodservice is a registered trademark
Ahold Corporate Communications:
Hans Gobes, Senior Vice President Corporate Communications
tel: +31 75 659 5665, after office hours: +31 6 55 822 298
Jan Hol, Vice President Public Relations
tel: +31 75 659 5720, after office hours: +31 6 22 933 137
U.S. Foodservice Communications:
Bonna Walker, Vice President Public Relations
tel: +1 410 312 7520
U.S. Foodservice stockholders are advised to read the tender offer statement
regarding the acquisition of U.S. Foodservice referenced in this fact sheet,
which will be filed by Ahold Acquisition, Inc. and Koninklijke Ahold N.V. with
the U.S. Securities and Exchange Commission and the related
solicitation/recommendation statement which will be filed by U.S. Foodservice
with the Commission. The tender offer statement (including an offer to purchase,
letter of transmittal and related tender offer documents) and the
solicitation/recommendation statement will contain important information which
should be read carefully before any decision is made with respect to the offer.
These documents will be made available to all stockholders of U.S. Foodservice,
at no expense to them, by contacting information agent, Morrow & Co, Inc.
Stockholders please call: US 800 566 9061. These documents also will be
available at no charge at the SEC's website at www.sec.gov.
This announcement contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of the safe-harbor provisions of
the U.S. federal securities laws. These forward-looking statements are subject
to risks and uncertainties that could cause actual results to differ materially
from those expressed in 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 future market and economic conditions, the behavior
of other market participants, the ability to successfully integrate acquired
businesses and achieve anticipate synergies and the actions of government
regulators. These and other risk factors are detailed in Ahold's publicly filed
reports. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this press
release. Ahold does not undertake any obligation to publicly release any
revisions to these forward-looking statements to reflect events or circumstances
after the date of these materials.
U.S. Foodservice stockholders are advised to read the tender offer statement
regarding the acquisition of U.S. Foodservice referenced in this press release,
which will be filed by Ahold Acquisition Inc. and Koninklijke Ahold N.V. with
the U.S. Securities and Exchange Commission and the related
solicitation/recommendation statement which will be filed by U.S. Foodservice
with the Commission. The tender offer statement (including an offer to purchase,
letter of transmittal and related tender offer documents) and the
solicitation/recommendation statement will contain important information which
should be read carefully before any decision is made with respect to the offer.
These documents will be made available to all stockholders of U.S. Foodservice,
at no expense to them, by contacting information agent, Morrow & Co., Inc.
Stockholders please call US 800 566 9061. These documents also will be available
at no charge at the SEC's website at www.sec.gov.]
