Analysts

1

• Analysts Meeting
• 2002 Annual Results
• Delhaize Group
• Brussels - March 13, 2003

2
Safe Harbor

• This presentation includes forward-looking
  statements that involve risks and uncertainties.
  Actual results may differ materially from those
  stated in any forward-looking statements based on
  a number of factors. Delhaize Group assumes no
  obligation to update the information contained in
  this presentation.

3
Summary

• Financial Results 2002 Craig Owens, CFO of
  Delhaize Group
• Accomplishments in 2002 and Priorities
  ofDelhaize Group for 2003 Pierre-Olivier
  Beckers, CEO of Delhaize Group
• Strategic Sales and Cost Initiatives at Food
  Lion Rick Anicetti, CEO of Food Lion

4
Financial Results 2002
5
Highlights 2002 Results

• Continued organic sales growth
• Strong operating margins
• Growth in reported earnings per share
• High free cash flow
• Significant dollar impact

6
Delhaize Group 2002 Sales
Organic sales growth of 2.1
7
EBITDA Margin
8
Income Statement
9
Income Statement
10
Per Share Information
11
Results at Actual and at Identical Exchange Rates
Dollar weakening by 5.3 on average in 2002(1
EUR 0.9456 USD in 2002 compared to 1 EUR
0.8956 USD in 2001)
12
Better than Expected Results
Final results 2002 cash EPS -10.2 at identical
exchange rates instead of expected -20 to -25
due to? Better than expected sales at Food Lion
and in Belgium in December 2002? Higher than
expected EBITDA margins at Food Lion and in
Belgium due to aggressive cost control ? Tax
rate lower because of - Improved pre-tax
income versus non-deductible amortization of
goodwill and intangibles - Adjustment to
deferred tax liability to reflect Belgian tax
rate reduction in 2003
13
Highlights Cash Flow Statement
14
Working Capital Improvementsat Delhaize America
Receivables inventory accounts payables
15
Uses of Free Cash Flow
(in millions EUR)
16
Net Debt Delhaize Group
17
Net Debt to Equity Ratio
18
Debt Maturity Profile Delhaize Group
19
Outlook 2003
20
Outlook 2003

• 97 new stores ( 3.9) to 2,617 stores
• Comparable store sales growth of Delhaize
  America between -2.0 and flat
• USD 1 billion free cash flow Delhaize America
  (2001-2003)
• Net debt to equity ratio of approximately 100 at
  the end of 2003

21
Outlook 2003
Outlook 2003
Non-deductible expense is estimated to be
approximately EUR 90 million in 2003
(At identical exchange rates)
(At identical exchange rates)
22
Accomplishments in 2002 and Priorities of
Delhaize Group for 2003
23
Accomplishments in a Challenging Year

• Strong sales at Delhaize Belgium and Alfa-Beta
• Confirmation of success of Hannaford
• Aggressive cost management in the second half of
  2002
• Reorientation of Food Lion to a sales focus
• Continued strong free cash generation (7.4
  EBITDA margin) and reduction of net debt
• Fast growing regional and global cooperation
• Further strengthening corporate governance and
  continued transparent communication

24
Four Key Priorities in 2003
1. Build sustainable sales growth 2. Immediate
reduction of structural costs 3. Continued focus
on cash flow and deleveraging balance
sheet 4. Regional and global cooperation
25
Continued Strengthening of Concepts to Accelerate
Sales Growth

• Food Lion sales building initiatives, reinforced
  priceleadership and continued expansion
• Hannaford continuation of the Festival strategy
• Kash n' Karry reinforced focus on meat and
  produce
• Delhaize Belgium ongoing differentiation by
  continued renewal of our store network and
  further reinforcement of the fresh products
  offering
• Alfa-Beta - Trofo Delvita completing Trofo
  integration and expansion
• Asia network strengthening

26
Reducing Cost Base to Reinforce Competitive
Position and Protect Profitability

• Store closings in the U.S. and streamlining of
  the Food Lion support structure
• New commercial policy at Delhaize Belgium
  resulting in lower operations and marketing costs
• Major savings of USD 40 million in purchase of
  indirect goods and supplies at Food Lion
• Integration Trofo in Alfa-Beta
• Merging Czech and Slovak support services at
  Delvita

27
Reducing Cost Base to Reinforce Competitive
Position and Protect Profitability

• Supply chain optimization evaluation project at
  Food Lion and fully automated break pack facility
  at Delhaize Belgium
• Continued investment in information systems new
  inventory management system at Delhaize Belgium
  and Food Lion
• Regional and global synergies buying, energy,
  supply chain, benefits, retail practices, IT,
  organizational development, risk management

28
Deleveraging Balance Sheet Through Strong Free
Cash Flow Generation

• Significant free cash flow generation by Delhaize
  America of USD 667 million (2001-2002) through
• Strong EBITDAUSD 2.4 billion (2001-2002)
• Working capital improvements of USD 91.5 million
  (2001-2002)

29
Commitment to USD 1 Billion Free Cash Flow
Target Delhaize America (2001-2003)

• Sales and EBITDA expansions
• Working capital improvements
• Capital spending controls
• Dividend management
• Portfolio management

30
Regional and Global Cooperation

• Simplified financial and management structure
• Efficient corporate structure supporting banners
• Rapidly increasing synergies on regional and
  global level
• Exchange of best practices and knowledge

31
Characteristics Delhaize Group

• A focused organization? One business food
  retail? Lean and aligned management team
• A disciplined organization? Immediate cost
  reductions? Building sustainable sales
  growth? Prudent in our approach
• A profitable organization? Leading local banners
  with strong market shares ? Ongoing high
  margins? Strong free cash flow generation

32
Food Lion Strategy
33
Food Lion
34
Challenges

• Depressed economic conditions in the Southeast of
  the U.S.
• Higher unemployment rates in North and South
  Carolina
• Significant military deployment from our major
  markets
• Competition
• Most large supermarket operators and many
  regional and local chains operate in the
  Southeast market
• Competing with Wal-Mart Supercenters for almost
  10 years
• New non-traditional formats dollar stores,
  limited assortment stores, drugstores
• Customer choices
• Food Lion serves approximately 10 million loyal
  customers each week, a stable number compared to
  2001
• But transaction size and frequency have decreased
  in 2002 due to
• Economy
• Competition

35
Food Lion Strategy Addresses Consumer Expectations
Source Food Marketing Institute (2002)
36
Low Price Leadership

• Cost Efficient Operation
• Cost reduction USD 100 million in 2003
• Close 41 unprofitable stores
• Revise store labor model to focus on high value
  activities that are aligned with strategy
• Eliminate non-value added activities throughout
  the support structure
• Reduction in workforce 400 positions
• Consolidate fragmented activities and reduce
  redundancy
• Indirect purchasing project

37
Low Price Leadership

• Cost Efficient Operation, continued
• Additional opportunities
• Optimize supply chain processes and systems
• Introduce manufacturing techniques in labor
  intensive departments
• Continue U.S. and global synergy identification

38
Low Price Leadership

• Delivering Price
• Maintain strong consumer images related to price
  leadership
• Leverage cost efficient operation to support
  investment in price position
• Continued refinement of zone pricing (rolled out
  in 2001-2002)
• Refine pricing strategy to deliver the
  appropriate balance between everyday shelf
  pricing and promotional activity
• Deliver consistent and dependable pricing message
  to customers

39
Quality and Variety in Fresh Departments

• Capitalize on progress achieved to date
• Produce sales distribution increased in 2002
• Optimize supply chain processes and systems
• Product sourcing
• Quality assurance
• Variety
• Fresh chain management
• Store delivery frequency

40
Locational Convenience through aDense Store
Network

41
Store Prototypes

• Current new store prototypes - 28,000 and 38,000
  square feet

• Modern convenient store
• More focus on fresh offering
• Increased services
• Low breakeven point

• 45 new Food Lion stores in 2003
• 150 potential additional new sites in next three
  years

42
38,000 Sq. Ft. Prototype Very Favorable
Consumer Response
43
Store Experience and Atmosphere

• Consistent execution across retail stores
• Standard Practices
• Clean and well-kept store environment
• In-stock conditions
• Increase variety in fresh departments
• Effective store signage and messaging
• Prepare for peak customer traffic
• Fast, efficient check-out
• Friendly associates
• Available associates

44
Mid/Long-Term Strategy

• Further develop an exciting and compelling
  shopping experience as defined by on-going
  consumer research
• Leverage and maintain strong price perception
• Transform offering in fresh departments
• Redefine customer service
• Design and deliver distinguished convenience
• Raleigh Project
• Leverage planned remodel activity to implement
  these concepts

45
Focused on Consumer Expectations to Support
Continued Success and Growth
46
Bringing the best food solutions ...
... to your families