Press Releases: Greece

ALFA-BETA VASSILOPOULOS S.A.

Presentation

March 29, 2006 In the context of presentations organized by the Association Of Greek Institutional Investors, the presentation of "ALFΑ-ΒEΤΑ" VASSILOPOULOS S.Α. took place today. The Managing Director Mr. Macheras and the Financial Director Ms.Kuhkalani presented the activities and the financial results of the Company for the fiscal year 2005 as well as its strategy and objectives. "ALFΑ-ΒEΤΑ" VASSILOPOULOS S.Α. is a food retail company. It was established in December 1969 and in 1990 it was listed on the Athens Stock Exchange. Since July 1992 it has become a member of Delhaize Group. During the presentation, there was a reference to the current economic environment, the consuming trends as well as to Greek food retail market evolution and its main characteristics. According to the published financial figures of the fiscal year 2004, "ALFΑ-ΒEΤΑ" ranks second in terms of turnover among the Greek food retailers. At the end of 2005, the Company's stores network numbered 92 supermarkets, 9 City stores, 10 Cash & Carry and 24 franchising stores, which operate in various areas of Greece. Consolidated Turnover increased by 4.0% to 908.0 million EUR from 873.1 million EUR in 2004 due to better sales in existing stores and store openings. Despite the continuous weak market and the intense price competition all year long, as well as the price reduction of 2,000 products aiming to strengthen the Company's competitive position, "ALFA-BETA" managed to preserve its strong presence in the retail market. Consolidated Gross Profit increased by 6.2% from 186.1 million EUR in 2004 to 197.7 million EUR in 2005. This increase, higher than that of sales, confirms the success of the commercial policy as well as the effective inventory management of the group. Consolidated Operating Expenses increased by 7.3% from 165.1 million EUR in 2004 to 177.1 million EUR in 2005. Operating Expenses include provisions against possible risks and expenses to address the fine imposed by the Greek Competition Committee. Furthermore, expenses were influenced by an increase in advertising expenses to support the pricing initiatives, increased cost of packaging materials because of the rise of oil prices, increased maintenance expenses related to the remodeling of eight large stores, as well as expenses regarding new store openings in the near future. Consolidated Profit before Tax, Financial, Investing Activities, Depreciation and Amortization (EBITDA) amounted to 41.1 million EUR in 2005 from 41.2 million EUR in 2004, showing a slight decrease by 0.1%. Consolidated Profit before Tax amounted to 22.1 million EUR, slightly lower than 23.1 million EUR in 2004 due to higher expenses. The 2004 results included 0.9 million EUR income from interests from an amount held in escrow and which was ruled in favor of "ALFA-BETA" regarding the legal dispute with TROFO's former owners. Consolidated Profit after Tax amounted to 12.3 million EUR against 17.4 million EUR in 2004. This decrease is due to: a) the increase of deferred tax assets at 31.12.2004 because of the implementation of the new income tax rates b) the revaluation of the tax value of fixed assets in the 2004 fiscal year, increased the tax value thereof which resulted in a decrease in the deferred tax liability and had a favorable effect in the year's results c) an amount of 1.0 million EURO, which arose from the tax audit of TROFO and ENA for certain years before the acquisition of these two entities by "ALFA-BETA".In 2005, the Capital Expenditures of the group amounted to EURO 35,6 million from EURO 32,4 million in 2004. The highest portion of the investments was disposed on new store openings and on the remodeling and upgrading of the existing ones. Regarding its growth and its commercial policy, in 2005, "ALFA-BETA" has developed a series of innovative initiatives, in response to new market conditions and challenges. Continuing the dynamic commercial policy of prior years, "ALFA-BETA" reinforced its price position by lowering the prices in 2,000 basic products, in addition to the lowering of prices in 2,300 products during 2004. The first-price private label brand "365", an alternative to hard discount products, was extended to 240 items, while in 2005 "ALFA-BETA" launched the new exclusive range of "alin" detergents, also at prices in line with the hard discounters. The Company is developing a sales network consisting of many different store formats, it is extending its product assortment, especially its own-label products, and is applying a multi-level price policy, suggesting alternative opportunities to suit customers with differing purchasing power. The introduction of "Smart Retailing" project, the adoption of "assisted self-service" and dynamic sections like meals to order (self traiteur) and bake-offs, have contributed to the diversification and improvement of the sales network The renovated design for Company stores was put into practice in three new stores in 2005 and eight stores were remodeled along the same lines. ALFA-BETA's business approach to the Franchising Network was completed in 2005 and two new types of store were created; medium-sized stores carrying the banner ΑΒ Food Market, and smaller stores under the banner AB Shop & Go. By the end of the year the Franchising network numbered 24 sales outlets, six of which (5 AB Food Markets and 1 AB Shop & Go store) began operating during the year. Furthermore, "ALFA-BETA" earns its customers" trust through quality and stringent rules of safety and hygiene, such as the HACCP system implementation, the emphasis on control of fresh products and the frequent sample controls. Corporate Social Responsibility was and remains part of this Company's identity. Preservation of the Environment is an important factor in how we express our social role. "ALFA-BETA" is the only company in Greece that has been officially certified for handling recycled packaging materials for private label and imported products. Moreover, the Company increased to 25 the number of stores where Recycling Centers are installed. The Donations' Committee continued its social work in 2005 donating considerable sums to many social and educational organizations. Finally, the Company's objectives for 2006, were presented: Increase of Retail SalesImprovement of performance & remodeling of 5 existing storesDevelop and expand franchising stores - Organic expansion and Geographical reinforcement with supermarkets and City stores - Acceleration of the opening program with the addition of 19 new stores in 2006, including franchising ones Price Policy - Aggressive commercial policy towards Every Day Competitive Prices Develop differentiation by - Optimization of performance and service provided by continuing Smart Retailing process. - Introduction of Smart Retailing methodology in administration, supporting services and warehouses - Enrichment of the assortment increasing exclusivity products & accelerating private label and private brands, growth of the variety of organic products, development of new product categories - Further growth of fruit & vegetables, meat and cheese departments - Emphasis on food safety and quality Efficiency - Decrease overhead costs through economies of scale and increasing productivity - Further improvement of Working Capital by increasing inventory rotation & reducing shrink (optimization of supply chain) Learning & Growth - Cultivate and develop customer convenience by training further our associates and upgrading their managerial skills Our strategy and our philosophy are summarized in our vision: To be the most admired and preferred food retail chain creating superior value for all our customers, employees, partners, shareholders and social associates, transforming everyday shopping into a delightful experience.