Jerónimo Martins SGPS S A : 9M 2021 Report

CONSOLIDATED REPORT

AND ACCOUNTS

FIRST NINE MONTHS

2021

U

Unaudited

INDEX

Message from the Chairman and CEO - Pedro Soares dos Santos	3
I - CONSOLIDATED MANAGEMENT REPORT
1. Performance Overview & Key Drivers	4
2. Performance Analysis by Banner	5
3.	Consolidated Financial Information Analysis	7
4.	Third Quarter 2021 Update on Covid-19 Impact	8
5. Outlook for 2021	9
6. Consolidated Management Report Appendix	10
6.1. The Impact of IFRS 16 on Financial Statements	10
6.2. Sales Detail	11
6.3. Stores Network	12
6.4. Definitions	12
7. Reconciliation Notes	13
8.	Information Regarding Individual Financial Statements	15
II - CONSOLIDATED FINANCIAL STATEMENTS
1.	Consolidated Financial Statements	16
2.	Notes to the Financial Statements	21

R&A | First Nine Months 2021

2

Message from the Chairman and CEO

Pedro Soares dos Santos

'Our banners ended the first nine months of the year with stronger market positions as a result of consistent work to consolidate leadership in price and quality.

Biedronka maintained strong dynamics, looking for opportunities to deliver more value to its customers, to enhance its offer and its shopping experience. Our main banner further reinforced its online proposition and delivered growth while protecting profitability.

In Portugal, Pingo Doce and Recheio grew sales and results despite market circumstances that remained challenging, particularly until July, with the low circulation of people and a still fragile HoReCa sector.

In Colombia, the good performance throughout the nine months, at both sales and EBITDA levels, reflected the strength of Ara's competitive positioning as well as the winning potential of the business model, in a country where economic access to quality food is still difficult for most of the population.

At two months from year-end, with the Christmas season approaching and despite the uncertainty on the pandemic evolution, the results attained so far reinforce our confidence in achieving the growth targets set for the year.'

R&A | First Nine Months 2021	3
Message from the Chairman

I - CONSOLIDATED MANAGEMENT REPORT

Strong Sales Leverage Good Performance

1. Performance Overview & Key Drivers

9M I KEY FIGURES

+7.1% SALES TO €15.2 BN (+9.6% excl. FX)

+11.1% EBITDA TO €1,144 MN (+13.9% excl. FX)

+47.7% NET

PROFIT

TO €324 MN

EPS AT €0.52

Our strategic vision of focusing on quality at competitive prices delivered a strong performance in sales and results in the 9M.

Biedronka worked with determination to continuously improve its offer, innovate in its commercial campaigns, and uplift the quality of its store network. All this while maintaining clear price leadership. This focus, together with positive consumer demand, drove a LFL growth of 7.8% in 9M (+8.1% in Q3).

Also in Poland, and compared to the same period last year, Hebe increased sales, in local currency, by 10.8% and more than doubled online sales in the 9M, keeping EBITDA margin stable.

In Portugal, Pingo Doce and Recheio grew sales and results, despite restrictions that still hamper the operating environment, particularly in the HoReCa segment. LFL sales in the 9M were at 2.1% and 3.2%, respectively.

Ara registered a very good sales performance in Colombia and accelerated its growth in Q3. LFL was 21.5% in the 9M, reaching 39.5% in Q3. The combination of strong sales with an optimized cost structure led EBITDA to improve to €15 mn (from €-23 mn in 9M 20).

Group EBITDA margin improved from 7.3% to 7.5% in the 9M, driven by sound Group LFL of 7.1%, a positive margin mix and efficiency gains, which allowed the Group to limit the impact of the retail tax implemented in Poland.

Strong cash generation in the 9M resulted in a net cash position of €655 mn by the end of the period (excl. capitalised operating leases).

The 9M performance reflects the flexibility of the banners to pursue their strategic priorities and deliver good results, in circumstances that remain uncertain.

CASH FLOW

AT €339 MN

NET DEBT

AT €1.6 BN

R&A | First Nine Months 2021	4
Consolidated Management Report

2. Performance Analysis by Banner

POLAND

In Poland, the consumer demand remained positive in the first nine months of the year.

Biedronka LFL

11.1%
		8.8%
		8.1%
	6.9%	6.5%
6.0%
4.8%
Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21

From the second quarter, the pandemic situation remained under control, and the circulation of people resumed.

Food inflation in the country progressively increased from 0.6% in Q1 and 1.6% in Q2 to 3.8% in Q3, reflecting price increases in several food categories. Biedronka maintained its price leadership and an intense promotional dynamic, resulting, throughout the 9M, in consistently lower basket inflation than the average food inflation in the country.

The banner executed a strong commercial programme, including promotions and innovative in&out campaigns, while continuing to improve its core offer and its store network. Biedronka delivered well on all these fronts and, in local currency, grew sales in the 9M by 10.3%, including a LFL of 7.8%. In euro terms, sales reached €10.6 bn, 7.3% ahead of 9M 20.

In Q3, sales in local currency increased 11.2% with LFL of 8.1%. In euro terms, sales were €3.6 bn, 8.1% growth over Q3 20.

EBITDA reached €972 mn, an increase of 6.4% vs. 9M 20 (+9.4% at constant exchange rate).

The EBITDA margin was 9.1% versus 9.2% in 9M 20. Strong LFL sales performance, effective margin-mix management, and operational efficiency allowed Biedronka to mitigate the pressure from the retail tax introduced in January 2021.

Biedronka opened 75 stores (59 net additions) and remodelled 232 locations in the first nine months of the year.

Hebe LFL	38.2%

9.0%

1.7% 0.1%

-1.7%

-12.5%

-26.6%

Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21

Hebe registered sales growth in the 9M of 10.8% in local currency. Excluding the pharma business closed in July 2020, sales increased 20.3% with a LFL of 14.4% (the LFL includes

online sales).

In Q3, Hebe sales increased by 11.6% (+15.4% excluding the pharma business) with a LFL of 9.0%.

In euro terms, 9M sales reached €194 mn, 7.8% ahead of 9M 20. In Q3, sales were €71 mn, 8.5% more than in Q3 20.

Online sales progressed well throughout the period, reaching 12.5% of sales in the first nine months of the year. Hebe continues to test its presence in new markets through its e-commerce platform.

Hebe's EBITDA was €11 mn versus €10 mn in 9M 20. EBITDA margin was 5.7% in line with the previous year.

R&A | First Nine Months 2021	5
Consolidated Management Report