THE HAGUE, Netherlands -- Anders Moberg, voted in as chief executive officer of Ahold during a lively shareholders meeting last week, said U.S. Foodservice, the focus of a major accounting scandal, could be back on its feet within 18 to 24 months.
Moberg was speaking to shareholders -- many of them hostile about the scandal and also about his 3-million-euro-plus pay package (about $3.24 million U.S.) -- after his initial 120 days on the job.
"We don't know the true underlying strategic value of U.S. Foodservice, which is a major player in what still amounts to a highly fragmented -- but still very important -- growth industry," he said. "To sell it off today would create a massive destruction of shareholder value."
Moberg added that from now on U.S. Foodservice, which distributes to restaurants and other food-service institutions, would be managed as a single business, operating separately from food retail. Ahold will name a special advisory board and new management to get the division back on track.
He said there would be limited investment in U.S. Foodservice as it had grown too fast through acquisitions and was not yet sufficiently integrated.
The new CEO added that, overall, Ahold would become a leaner, more focused company under his management. He said non-core assets as well as money-losing businesses would be sold. "There are no sacred cows," he said.
In addition, food retailing would become a priority. "We are moving from a financial holding company to a business focused on food retail. In other words, from finance to floor."
He said the company would focus only on markets where it was a leader or could achieve a leading position within a "reasonable" amount of time.
He said Ahold would also concentrate on operations and formats destined to become market leaders.
"We have tried to be everything to everybody," he said. "That's expensive! This lack of focus has had a drastic impact on our cost base."
Moberg delivered his speech after a tension-filled morning during which shareholders complained about his pay package -- which includes a severance agreement worth 10.5 million euros (about $11.35 million U.S.), even if he walks away tomorrow.
His base pay for the next two years will be 1.5 million euros, plus a guaranteed bonus of 1.5 million euros. He also got about 125,000 shares, which he can cash in immediately, if he so chooses.
Shareholders asked for the package to be renegotiated and for the vote on his post to be put off until the next shareholders meeting. Henny de Ruiter, chairman of the Ahold supervisory board, refused their request and the vote went through.
De Ruiter said he was confident that the company's fully audited 2002 accounts could be made public on Sept. 30, with a shareholders meeting to be held in late October to approve them. As reported, those accounts were to be reported Aug. 15.
Ahold also issued the results from the past three years for its Albert Hein and Stop & Shop divisions. In 2002, Stop & Shop had an operating income of $714 million, up 27% over year-ago levels. Sales were $9.5 billion, an increase of 8% over 2001 results.
In addition to Stop & Shop, Ahold USA also operates the Giant-Landover, Md.; Giant-Carlisle, Pa.; Bruno's; Bi-Lo; and Tops Friendly Market chains and the Peapod Internet-grocery division.