Albertsons 2008 Annual Report Download - page 3

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Dear SUPERVALU Shareholders,
Jeff Noddle
Chairman &
Chief Executive Officer
Fiscal 2008 marked the first full year of results following our transformational
acquisition of the premier retail properties of Albertsons, Inc. In the less than two years
since the acquisition, SUPERVALU has increased net sales to more than 220 percent,
net earnings to more than 280 percent, and diluted earnings per share to more than 180
percent of pre-acquisition levels. Today, SUPERVALU operations touch 49 states
through our retail network of nearly 2,500 food and drug stores and our supply chain
services operation that serves an additional 2,700 retail endpoints. We finished the year
with record sales, record earnings and an impressive second year of double-digit
earnings growth.
We are well along our three-year journey to leverage the full potential of SUPERVALU.
As we approach the second anniversary of the acquisition, we are positioned to drive
future growth and maximize the value of the company. This letter highlights our progress in fiscal 2008 and
provides an update on our key business initiatives.
Fiscal 2008 Financial Highlights
In fiscal 2008, total sales were a record $44.0 billion compared to $37.4 billion last year, primarily reflecting the
benefit of 52 weeks of the acquired operations this year compared to 38 weeks last year. Net earnings were a
record $2.76 per diluted share in fiscal 2008 – up 19 percent compared to $2.32 per diluted share last year.
In fiscal 2008, we were also very pleased that we reduced debt by more than $600 million, repurchased more
than $200 million in shares, and invested approximately $1.3 billion in capital spending. Our nearly $700 million
in debt reduction in less then two years since the acquisition is ahead of our original stated goal of $400 million
by June 2008. Our total borrowings have declined to $8.8 billion compared to $9.5 billion last year, resulting in a
debt-to-total-capital ratio at year end of approximately 60 percent compared to 64 percent at the end of last year.
This reduction in our overall leverage positions us well for our future plans.
Key Business Initiatives
We have many business initiatives that serve as the foundation for achieving long-term sustainable growth. In
fiscal 2008, we made good progress with activities continuing into fiscal 2009 and beyond. I would like to update
you on a few of the key initiatives.
Our Premium Fresh and Healthy remodel program is one of the centerpieces of our business initiatives. From the
outset of our acquisition almost two years ago, we have been working towards achieving our goal of 80 percent
of our stores being new or newly remodeled within the past seven years. During fiscal 2008 we opened 27 new
stores and completed 141 major remodels and 25 minor remodels across our network, moving us to 70 percent of
our stores being new or newly remodeled within the past seven years, compared to 64 percent at the date of the
acquisition.
SUPERVALU is committed to delivering merchandising programs that enhance the customer shopping
experience. We are “turning the dining room lights back on” – by making meal planning and preparation more
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