Amsterdam, the Netherlands, March 6 – Ahold today published its summary financial report for the full year and fourth quarter 2007. CEO John Rishton said: "Ahold exceeded the targets we set last year. We delivered an underlying retail operating margin of 4.6% against our 4% to 4.5% guidance. We largely completed our planned divestments, returned Euro 4 billion to shareholders, and our investment grade rating was reinstated. We restructured the company into two continental platforms and achieved reductions in Corporate Center costs ahead of schedule.
We are progressing with our strategy for profitable growth, largely thanks to the continuing hard work and commitment of all our employees. In the United States, we rolled out 70% of our VIP program at Stop & Shop and Giant-Landover by year-end while Giant-Carlisle continued its strong performance. In Europe, Albert Heijn continued to exceed expectations, and we saw promising first results from the repositioning program at Albert and Hypernova in the Czech Republic.
I am delighted that our improved performance has enabled us to reinstate an annual dividend. For 2007, the proposed dividend is €0.16 per common share. We plan to increase future annual dividends while meeting the capital needs of the business and maintaining an efficient investment grade capital structure.
In 2008, our focus will be on the completion of the VIP program at Stop & Shop and Giant-Landover, the start of the remodeling of our Giant-Landover stores, further repositioning of Albert/Hypernova, and driving the growth of Albert Heijn. The VIP program will continue to impact margins with improvements expected later in the year. Underlying retail operating margin for the year is projected to be between 4.5% and 5.0%. Capital expenditure will be around €1.1 billion. Gross debt will fall further in 2008 as we progress towards our announced €2 billion debt reduction target. Net interest expense for the year is expected to be in the range of €270 million to €290 million.