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DELHAIZE GROUP / ANNUAL REPORT 2005
2
Sales grow th is a key driver for building shareholder value in
the food retail industry. Thus, for Delhaize Group, 2005 w as
a year of advancem ent, as we accelerated our sales perfor-
m ance for the third consecutive year. Our total sales increased
by 4.2% at actual and by 4.1% at identical exchange rates.
This was possible due to a balanced m ix between stronger
sales in existing stores, m ore store openings and selective
fi ll-in acquisitions.
In the fi rst half of 2005, we were confronted with w eak
sales m omentum, particularly in the Southeast of the U.S.
However, continued focus on our key strategic initiatives,
combined w ith a prompt reaction from our teams, bore fruit
and, from June 2005, w e saw sales trends at Food Lion, our
largest operating com pany, im proving. In Belgium , sales
w ere under pressure throughout the year from lagging con-
sum er confi dence and many com petitive openings.
In 2005, Delhaize Group undertook num erous initiatives to
reinforce its businesses and build future grow th. Food Lion
renew ed two of its markets, Greensboro, North Carolina and
Baltim ore, Maryland; it also reinforced its Bloom stores and
launched the new deep discount brand Bottom Dollar. In
Florida, 19 Sw eetbay Superm arkets w ere added, m ostly con-
verted Kash n’ Karry stores. All acquired Victory stores were
converted to the Hannaford brand and Delhaize Belgium
acquired 43 Cash Fresh stores to expand its network.
The intensive renew al and conversion work resulted in tem-
porarily higher operating expenses. In addition, operating
expenses w ere impacted by higher fuel expenses, increased
m edical costs in the U.S. and statutory labor rate increases
in Belgium . However, these higher operating expenses w ere
offset by a strong gross margin increase. As a result, our
operating m argin rem ained stable at 4.8% of sales, a strong
fi gure in the food retail sector. Our net profi t amounted to
EUR 364.9 million. Basic net earning per share increased by
21.8% to EUR 3.89.
Based on this good performance, our future capital expendi-
ture needs and its belief in the Com pany’s future, Delhaize
Group’s Board of Directors w ill propose to the Ordinary
General Meeting of May 24, 2006, the payment of a EUR 1.20
gross dividend per share (EUR 0.90 net of 25% Belgian w ith-
holding tax), a 7.1% increase over last year’s dividend.
Dear Shareholder,
LETTER FROM
THE CHAIRMAN&
THE CHIEF EXECUTIVE
OFFICER
Georges JacobsPierre-Olivier Beckers