SONAE FINANCIAL REPORT '15 . and a sea a de a de a de a de a de a f

CECERARAAAAAAAAAAAA

CECLERACADABADAAA

Careeranesaaaaaaaaaaaaaa

..............................................................................................................................................................................

42222222222222

20222333333

Index

1. Management Report
2. Sustainability Report
3. Corporate Governance Report
4. Financial Statements

SONAE FINANCIAL REPORT '15 MANAGEMENT REPORT

IMPROVING LIFE

......

Sonae's Brands

(Brands of Sonae associated companies)

ARARAA

Sonae's world

(Including operations, services to third parties, representative offices, franchising agreements and partnerships)

Key corporate events

9th March

Belmiro de Azevedo announced his decision not to run as a candidate to be a member of Sonae's Board of Directors, to be elected at Sonae's 2015 Annual General Meeting

30th April

Sonae announced the resolutions taken at the 2015 Shareholders' Annual General Meeting which included, amongst others, the election of Paulo de Azevedo as Sonae's Chairman and Co-CEO and Ângelo Paupério as Sonae's Co-CEO

gth June

Sonae completed a bond issue of €100 M, with a maturity of 7 years

25th June

Sale and leaseback transaction of Continente hypermarket located in Colombo shopping centre, totalling €53.6 M

6th October

Sonae Sierra announced that ParkLake, expected to open in Romania in 2016, has signed further tenant agreements reaching over 85%* of its Gross Leasable Area. The company also announced the agreement for the financing of this Shopping Centre, amounting to €83 M

20th August

Sonae MC celebrated a partnership with Fathima Group that foresees the entry of Continente into the United Arab Emirates by 2017

7th August

The consortium of owners of Colombo Towers, composed of Caixa Geral de Depósitos Group, Iberdrola Imobiliária, CBRE Global Investors and Sonae Sierra, announced the sale of Torre Colombo Ocidente

Sale and leaseback transaction of 12 food retail assets located in Portugal for the amount of €105.9 M

27th October

Sonae announced that MC signed an affiliation agreement with the Spanish central purchasing body, IFA

29th October

Following the granting of a licence, from Banco de Portugal, to operate as an electronic money and payment institution, Sonae launched the Universo card

19th November

Sonae, through SR, acquired Losan, a company based in Spain, with a strong international presence and specialised in wholesale kids wear

Sonae announced the resolutions taken at the 2015 Extraordinary Shareholders'

16th December

Annual General Meeting, which included the expected distribution of dividends related to 2015

*as of 31 December 2015.

Sonae's Brands	5
Sonae's world	8
Key corporate events	9
Chairman's letter	14
CEO's letter	16
Strategy in action	20
Corporate responsibility	27
We value our team	29
Respect the environment	32
Sourcing with integrity and quality management	33
Innovation is essential for our sustainable success	35
A standing commitment to our customers	37
Making a positive difference to our community	38
Corporate Governance	43
Financial Review	46
Key financial performance indicators	46
Macroeconomic context	48
2015 Consolidated financial performance	50
Sonae performance and capital structure	50
Business segments	52
Sonae MC	54
Sonae SR	58
Sonae RP	62
Sonae FS	63
Sonae IM	64
Sonae Sierra	67
NOS	69
Outlook for 2016	70
Information on shareholdings and share performance	70
Individual net income of Sonae, SGPS, SA	72
Subsequent events	72
Proposed allocation of the 2015 net income and dividend distribution	72
Closing remarks and acknowledgements	75
Glossary	76

Ângelo Paupério and Paulo Azevedo

Chairman's letter

I would like to begin my first Sonae Chairman's message with a sincere thank you to our founder, the man who had the vision to create a long living organisation, anchored by solid corporate responsibility values, and with an insatiable will to work towards success based on innovation and sustainable growth. This thank you also represents a continuity and renewed commitment to those goals. Sonae is a living and thriving organisation that will continue to pave the path ahead with the same steadfast focus on

promoting innovation, internationalisation and sustainable growth, whilst upholding our social responsibilities. We are looking forward to future challenges or, as we see it at Sonae, future opportunities and future success.

2015 was a year filled with challenges on many different dimensions. From a social perspective, it was a dramatic year, with aggravated wars, terrorism attacks and a refugee crisis that created new and difficult challenges to all societies around the world and with strong political and economic impacts. From a political perspective, the equilibrium of many European countries is fragile. This political uncertainty is now a significant challenge for economies such as the Portuguese and the Spanish. The economic landscape is still unsettled with different regions showing very different developments. The US economy and some European economies seem to have started a slow but steady recovery, but the oil prices have created significant problems in many developing economies that are now struggling and with an indirect impact on the Portuguese economy, such as in Angola and Brazil. The Portuguese economy is still struggling to find a steady path towards recovery. The public and private debt remains high, the financial sector is still struggling to survive and continues to impose a severe onus on public expenditure. All in all, these factors are having an impact on investors' confidence levels.

Overall Sonae delivered a solid performance but with varying performance in different business segments and markets. We were generally above our expectations in Telecommunications and Shopping Centres but several of our retail formats lagged behind them. Sonae MC is facing aggressive competition. We are the leader in market share and performance and all of our competitors want to meet our targets. Much of 2015 was dedicated to reworking our offer to maintain a sustainable gap in relation to our competitors in price and range – correcting weaker points and building new advantages. Sonae MC is also investing in a network of convenience stores, exploring two strategies – company operated and franchising stores – and is taking solid steps towards internationalisation of our banners and products. Sonae SR's performance was mixed but disappointing overall as we were not able to profit from the growth in discretionary spending in Iberia and build on the improved performance of last year. Delivery from the electronics segment was robust, both in Portugal and in Spain, taking significant steps to become an integrated on/off line market leader in Iberia. The main difficulties in non-food retailing were in the apparel segment where unplanned changes in teams and an essentially failed spring-summer collection had a very negative impact on annual performance. Sonae RP had a good year and completed several sale and leaseback transactions playing a pivotal role in our capital structure strategy.

Sonae Sierra negotiated a number of deals to significantly accelerate its capital recycling strategy at the same time as it managed to put together a number of development and redevelopment opportunities. Sierra's much above average quality of assets was also able to greatly benefit from market valuation improvements in European markets and withstand relatively well the deteriorating outlook in Brasil.

NOS continues performing beyond market expectations growing topline and EBITDA in a declining market and is now the most relevant and active player in the Portuguese market.

Fierce competition, ever-faster changing market trends and consumer habits and unstable economic and social environments are our biggest challenges. At Sonae, we like to look at these added difficulties as opportunities to innovate and to change.

Innovation is by definition the future. Our future. Innovation is at the root of our success and our most distinctive capability. At Sonae, everyone can innovate and we continue to be truly committed to promote and nurture a rich innovation environment across the whole organisation.

Sonae is a market leader and as such we want to understand the market before our competitors, and quickly adapt our offers, our business models and our organisation. We are adjusting our structure to become faster and more effective. To face the new organisational challenges, we have implemented some structural changes, allowing higher levels of autonomy to each business unit and focusing on higher levels of specialisation. These changes are supported by our commitment to create new forums and new bridges that will bring together our invaluable world of personal and business experience.

Furthermore, we continued to study and pursue new internationalisation opportunities with a flexible approach and with solid partnerships with strong knowledge of the local market and traditions. We have a unique structure and assets base that can leverage our international expansion and our worldwide reputation is a key determinant in finding the best partners. Partners who share the same corporate responsibility values and our thirst for sustainable growth.

Finally, we continuously reinforce our dedication towards our solid values of corporate responsibility. In periods of economic and social turmoil, corporate responsibility surfaces as one of the most critical cornerstones of success. Sonae is a unique and invaluable team of 40,738 colleagues and we all strive to keep this at the top of our minds. We truly believe that this is one of our most important assets and we are we are extremely proud of our donations to charity and our voluntary work. I would like to highlight another good year of environmental performance, with a 6% reduction in our carbon dioxide footprint (despite our expansion). We also continued to use our influence and social presence to increase awareness of environmental issues among our colleagues, clients, suppliers and other business partners. We are green at the core and we take our responsibilities seriously as any leader should do. We promptly subscribed to and promoted the environmental initiative "Paris Pledge for Action", and we are now working to ensure that this results in new initiatives to accelerate improvements in our environmental performance.

Our shares closed the year with a small increase but underperformed the market. We believe that the discount to the sum of the parts which is reflected in our valuation is by no means justifiable. In any event, it is our responsibility to work harder and provide our investors with a sustainable market performance that rewards their commitment to our company and in particular to deliver our goals in the retail business.

A special note concerning Sonae MC that celebrated 30 years of being the first hypermarket in Portugal. We are proud of our history and achievements, but even more excited about what the next 30 years will hold.

We take pride in our legacy and we try to think of Sonae as Belmiro always did – every day is a starting point for new opportunities, new challenges and new triumphs.

Thank you.

Paulo Azevedo, Chairman and Co-CEO

CEO's letter

Overall, 2015 was a positive year for Sonae. The achievements across our main strategic guidelines were significant and the results reached in our businesses, albeit mixed, were positive.

We underwent an important organisational change that has allowed our businesses to become more autonomous and more focused on their strategies, while increasing the flexibility and agility necessary to face the increasingly frequent changes within each business context.

The new business areas identified with the most potential have been reinforced with the necessary resources to pave new growth avenues, namely in business segments such as health and wellbeing, technology, cybersecurity or the international food retail market.

We have invested in strengthening critical skills through more training, better recruitment and the acquisition of companies such as Losan, Ulabox, Makenotes or Elergone, highly renowned for their knowhow in international commerce, e-commerce, product design and energy management.

We reduced our real-estate freehold to the planned level, through sale and leaseback operations amounting to €376 M completed in 2015 and in the first quarter of 2016.

We have heightened the competitiveness of our food retail offers by investing in even more competitive pricing and convenience for our customers, improving the attraction formats offer and ensuring an easier shopping experience, in particular by expanding our store network.

In specialised retail, we have developed new store concepts and we have optimised the existing network with a positive impact on sales per sqm whilst lowering the overall investment costs.

In 2015, Sonae continued to grow. The turnover of all of the companies controlled by Sonae, including through equal partnerships, totalled €6.74 bn, an increase of 2.4% compared to the previous year, and the correspondent EBITDA remained flat at almost €1,000 M. Consolidated net income increased by 22%, reaching €175 M.

Concerning our business results, Sonae MC delivered a good level of profitability while maintaining its market share and intensifying its commercial aggressiveness. Worten increased its clear market leadership in Portugal and took significant steps towards the consolidation of its Iberian market position, strengthening its position as one of the most important and recognised players, both by suppliers and customers.

The performance of the Sports and Fashion segment was disappointing and, as mentioned in the analysis of the 3rd quarter, was marred by misalignment in the spring/summer collection, exacerbated by the weather conditions felt in the last few months of the of year which had an impact on the entire sector. However, it is worth noting Sport Zone's positive evolution, particularly in the Spanish market, where it already provides a positive contribution to the format's results.

Sonae Sierra has successfully implemented its capital recycling strategy, lowering its freehold according to its predefined goals, while ensuring the strengthening of its development activity of new shopping centres and the services business. The financial results reflect both the good operational performance and the recovery of the real estate market.

NOS delivered another excellent operational and financial performance, exceeding our best expectations. The company was able to accelerate the execution of its strategy, ahead of target, while showing the flexibility required to position itself in a telecommunications market that has experienced considerable turbulence and disruption.

which we saw increased confidence from the financial sector, our business partners and, above all, our

Thank you.

Ângelo Paupério, Co-CEO

own brand customers.

Strategy in action

Our mission is to create long-term economic and social value, taking the benefits of progress and innovation to an ever growing number of people.

At Sonae, we believe that our values define who we are and what we stand for. Our values anchor our responsibilities as a corporation and are paramount to the success of our mission.

Social responsibility

We have an active sense of social responsibility, and try to contribute to improving the communities within which we operate. Our behaviour takes into account the most recent environmental concerns and sustainable development policies.

0000

Well's and the Make-a-Wish Foundation have been actively working to raise funds to help grant wishes to children and young people who are victims of life-threatening diseases. In 2015, more than 90 thousand euros were raised through various campaigns, which were then reverted to the Make-A-Wish Foundation helping to make special wishes come true and giving these children and young people strength and hope.

Frugality and efficiency

We aim to optimise the use of resources and maximise their return, seeking cost efficiency, and avoiding any waste or extravagance. As a priority, we focus on achieving operating efficiency, promoting healthy competition, and delivering high impact projects.

We continuously monitor our processes. Our insatiable quest for higher levels of efficiency was recognised by the Kaizen Institute with the awards Kaizen Ambassador (Continente) and Excellence in Quality (Worten).

Cooperation and independence

We are willing and ready to cooperate with central and local governments, in order to improve regulatory, legal and social frameworks, and to ensure the best solutions for the communities within which we operate, but we also take care to maintain our independence in relation to all such entities.

()

Sonae and the Ministry of Education and Science have signed a protocol for the promotion of vocational education, according to which Sonae will offer internships to school students who choose to follow vocational training options. The first course, for training logistics technicians, is already underway in partnership with the Escola de Comércio de Lisboa (Lisbon School of Commerce) and involves 23 students.

Our Strategy

Our mission and values are built into our strategy, which is based on three main strategic pillars:

International Expansion

Internationalisation of our core businesses will remain a key growth driver for many years to come. This is one of our top strategic priorities and we will continue to deploy resources accordingly, as we have the opportunity to enlarge our international footprint and transform Sonae into a large multinational corporation.

Continente began to pave the path for a new growth avenue with the celebration of a food retail franchising agreement with the Fathima Group, a conglomerate operating in the United Arab Emirates with vast experience in different business segments. Based on this agreement, Continente will expand to the United Arab Emirates' market in 2017.

Sonae SR – Sports & Fashion division has acquired the multinational Losan, a Spanish based company specialised in the wholesale of children's clothing. This acquisition establishes a solid base for the development of new competences within Sonae SR and strengthens its ability for international expansion through wholesale.

Zippy extended its international footprint to more than 40 countries in 2015, namely by entering El Salvador, Costa Rica, Nicaragua, Guatemala, the Philippines and Mozambique.

Sonae Sierra continues its internationalisation process, undertaking new real estate projects in foreign markets. For instance, during 2015 Sonae Sierra completed the funding for Park Lake (Romania) and, one year ahead of opening, more than 85% of the area has already been rented out.

Diversification of Investment Style

We will continue to leverage our resources, and the effectiveness of our strategy implementation, by adopting the most appropriate investment style or mix of styles concerning each business, including wholly owned businesses and majority stakes, but also minority stakes with or without special rights.

Meu Super franchising network includes more than 200 stores. The success of this initiative demonstrates Sonae MC's capacity to leverage its competencies and expertise and to celebrate partnerships with entrepreneurs. Meu Super has become the Portuguese reference in franchising networks.

In 2015, Sonae increased its investment in Movvo, a Portuguese company that specialises in traffic movement within shopping areas. This investment stems from our strategy of investing in and promoting the development of new technologies, allowing us to be the front runners in retail and telco innovation. This technology is currently being implemented across many of our businesses.

Sonae Sierra continues the development of a solid funding strategy based on capital recycling, through the creation of funds and the development of partnerships with international investors for the development and operation of real estate assets.

Strengthen and leverage our key assets and competences

We will continue to reinforce our competitive position and explore new business opportunities that leverage our exceptional asset base in Portugal as a way to nurture our portfolio of options for future growth.

Sonae has launched the Cartão Universo (Universo Card) in the Portuguese market, bringing together all of our loyalty schemes and all the advantages of the Mastercard worldwide network into one unique credit card.

Sonae Sierra – Services continues its international expansion of services with the celebration of new partnerships in Germany (Property Management of 3 Shopping Centres) and Italy (Development, Property Management and Asset Management – City Life). These new partnerships are a clear recognition of our unique and world renowned expertise in the development and management of real estate projects.

Sonae MC closed, in October 2015, an affiliation agreement with the central purchasing body IFA. IFA is a central purchasing body composed of more than 30 Spanish affiliates, which reported a combined turnover of €10 billion in 2014. With effect from January 1st 2016, this agreement will leverage joint opportunities to negotiate, purchase and develop in the commercial area. Sonae Sierra – Services continues its international expansion of services with the celebration of new partnerships in Germany (Property Management of 3 Shopping Centres) and Italy (Development, Property Management and Asset Management – City Life). These new partnerships are a clear recognition of our unique and world renowned expertise in the development and management of real estate projects.

In 2015, Well's opened its first megastore in Colombo shopping centre. It has more than 800 sqm dedicated to health, beauty, wellness and optics, as well as an increased range of products and new services in partnership with leading experts in the respective areas. Some examples of these services are the Beauty Centre in partnership with Sorisa, Style Bar Jean Louis David, styling eyebrows and eyelashes Wink, Nail bar Nail's4Us, Nutrition Consultations, Hearing Tests in partnership with Medical Acoustics and treatments to stop smoking or Stress Zero.

In the Colombo megastore, there is a large area dedicated to eye care and frames at unbeatable prices. It is also the first store where monofocal lenses can be produced in just one hour. With a committed team of optometrists, queries can be solved at any time.

Sonae Board of Directors: Tsega Gebreyes, Dag Skattum, Paulo Azevedo, José Neves Adelino, Lorraine Trainer, Christine Cross, Ângelo Paupério and Andrew Campbell. Marcelo Faria de Lima is also a Board Member but he is not in the picture.

Sonae Group Senior Executives: Luís Reis, Miguel Mota Freitas, Paulo Azevedo, Fernando Guedes de Oliveira, Cláudia Azevedo, Miguel Almeida, Ângelo Paupério and Luís Moutinho.

·············································································································································································· RESPONSIBILITY

Corporate responsibility

Sonae's values and disciplined ethos were vital in ensuring our success during a time when organisations found it difficult to adjust to the far-reaching impact of the recent crisis. The future always holds significant challenges, however for Sonae this represents a future filled with opportunities.

The crisis is still more than a memory and Sonae is continuously identifying new opportunities and new risks. The development and pursuit of value creation opportunities is of the utmost importance to us, whilst ensuring that all of our actions are in strict accordance with our corporate responsibility values. Our people, the environment, sourcing, clients, innovation and our community form the pillars of our organisation and our achievements.

In 2015, we had a robust performance across all our business segments, our commitment to corporate values was an essential determining factor and this has been acknowledged on a number of occasions.

Sonae subscribes and promotes the environmental initiative "Paris Pledge for Action"

Sonae is always in the lead when it comes to the

environment and with this in mind we signed the Paris Pledge for Action, demonstrating our commitment to an initiative that has the ultimate goal of protecting our planet from climate change and endorses a commitment to mitigate the temperature rises to 2ºC above the preindustrial era.

In this document, a group of high profile companies recognise that climate changes are a fact threatening both the present and the future and that it is our responsibility to act immediately in order to mitigate the risks and to promote sustainable growth.

Paulo Azevedo (Sonae's Chairman) endorses this responsibility, stating that "A sustainable future is at the heart of Sonae's strategy and we actively and continuously act to reduce our carbon footprint. The signing of the Paris Pledge, not only reinforces our commitment towards sustainability, it challenges us to raise our goals. Sustainable growth is a cornerstone of our culture and a paramount determinant of our strategy's success."

We continue to take very measured steps, which have an extensive and profound impact penetrating far beyond our stores, in order to preserve these values. Our efforts towards aligning our corporate sustainability principles with those of our colleagues and stakeholders are constantly under scrutiny in order to lead to improvements and increase efforts, so as to play our role towards making the world a better place.

Our corporate responsibility commitments are continuously monitored and improved, as corporate responsibility is fundamental to our strategy. We make certain that it is being carefully endorsed and that our strategy and our impact are consistent in the long run. No concessions are made when it comes to corporate responsibility.

Action 1 of the Action Plan 2020 by BCDS Portugal.

Sonae was the leader of the Action 1 of the Action Plan 2020 by BCDS Portugal, aiming at aligning companies' needs in terms of job skills and the training young generations receive at school. During 2015, three activities were prioritised:

Diagnose companies' needs by 2020 using a comprehensive survey;
Communicate to young generations job market opportunities, using channels and communication means more suitable to their age;
Bring all pivotal stakeholders together in the promotion of innovative approaches to bridge the gap between schools and companies.

At Sonae, we are in a privileged position to foresee worldwide job market trends and it is imperative for both companies and future generations to understand these trends in order to tailor professional and personal skills to meet market demands.

Corporate Responsibility Commitments for Retail – 2013/2015

Better purpose

Promote the adoption of healthier lifestyles by providing customers with all the necessary information for balanced and more nutritionally responsible choices.

Promote the welfare of communities where Sonae is present, contributing to the strengthening of citizenship and social cohesion.

Better people

Promote wellness and invest in the development of the personal skills and competences of our employees, continuously enriching Sonae's culture.

Integrate sustainability into the supply chain and improve the alignment of our suppliers' practices with Sonae's policies.

Better planet

Focus on continuously raising the levels of excellence of our environmental performance, not only as a differentiating factor but also as a pre-requisite for the sustainable development of Sonae's businesses.

Our exceptional achievements stem directly from our values, which are evident through our actions and our results. We strive to operate in a responsible manner, delivering high quality products and services at fair prices, while accomplishing our environmental and social objectives. For additional information please see our Sustainability Report.

We value our team

Our team in figures

71% of colleagues with permanent contracts

66% female colleagues

47% colleagues below the age of 35

1,325,586 hours of training

153,103 training actions

Sonae is a company for people. Our team's professionalism and skills are essential for the development of our business. Our team is the best and they deserve the best opportunities we can offer them. Growth on both a personal and professional level is fundamental for development. Sonae is a living organisation built by people for people, so it is up to us to guarantee the development of talent and skills and identify and reward merit when deserved.

Our motto 'The success of our team is our success' is one which we truly prize, because at Sonae a skilled, passionate and content team is the only way to ensure that the best products and services are available to our customers. This is of paramount importance if we wish to be successful.

In order to identify and recruit the best people, we employ active recruitment strategies. However, recruitment of the top talent is the first step in the process of retaining and nurturing this talent. We make it our business to ensure that each colleague and each team enjoy the best opportunities for growth.

Employees per business area *

* Considering a total number of employees amounting to 43,261 (including 2,523 employees from NOS).

Most Attractive Portuguese Employer

Sonae is the Most Attractive Portuguese Employer and the most attractive company in which to develop a career with a future, according to a study carried out by the University of Minho's School of Economics and Management and Spark. The study, which was based on a survey conducted with over 2,600 higher education

students places Sonae as the company most favoured by students completing degrees in Economics and Management and in the top-9 in the area of Engineering and Technology, which makes it the best positioned Portuguese company, sharing the top ranking with Google.

José Corte-Real (Head of Human Resources | Sonae) stated that "Sonae has always had a strong focus on the personal and professional development of its colleagues and it is in our DNA to promote varied career and training experiences and opportunities at all levels of the organisation. The results of the study acknowledge the work carried out on a daily basis by each of our leaders, which is what makes Sonae a nationally and internationally recognised school of leaders".

Junior Achievement Portugal

Sonae and Junior Achievement Portugal have a long lasting relationship through which we support initiatives aimed at promoting an entrepreneurial spirit amongst the young generation, developing their understanding of society and the business world. In the last three years, we have experienced a 15% increase in the number of Sonae volunteers in these initiatives to a total of 150 volunteers covering 1,379 hours of training to 1,891 students.

We have also extend our support to Junior Achievement Spain with 12 Sonae volunteers participating in 7 programmes covering different civil education pillars: Our Community, Our Town and Ethics in Action.

These initiatives also help us to promote our values across our team:

"Participating in this programme made me feel closer to those, who one day will be the active work force of this country", Inês Pinheiro Torres
"We receive far more than we give", Catarina Cruz
"It was a truly rewarding and enriching experience", Pedro Tróia.

Contacto Programme

Contacto is our privileged interface with finalist students both at the undergraduate and masters level, from the very best universities. Created in 1986, Contacto programme allows a selected group of

recently graduated students to be part of the Sonae team via an internship placement at one of our companies.

In 2015, the programme adopted an international dimension by accepting applications from a selected group of universities from around the world (Portugal, Spain, Brazil, Poland, Italy, Ukraine and Vietnam). The mix of backgrounds and cultures highlights and adds an enormous value to the programme that now includes more than 1,000 students.

Contact Day is the main event, allowing each participant the possibility of presenting themselves to their mentors and gathering some valuable knowledge concerning the world of Sonae.

We are known for our performance in retail. One of the pillars of our success is the quality of our team, that works every day to achieve higher levels of performance. It is critical for us to give the opportunity to each colleague to develop their professional and personal skills and we believe that there is a wealth of talent to develop within our team. This is the essence of our retail schools, to promote the dissemination of best practices across the whole organisation, allowing colleagues to share their unique talent and experiences.

Sonae Retail School

An example of our excellence in developing, qualifying, updating and certifying the fundamental skills required by numerous colleagues who are part of the retail segment. Sonae Retail School is structured on three pillars:

Career – strictly related to our retail business segments, aiming at ensuring the required training for a sustainable career path;

Depth – determining the levels of knowledge required for each one of the topics presented;

Thematic topics – allows the identification of the topics that should be studied by our colleagues.

Worten Training Academy (Portugal/Spain)

The Worten Academy Spain and the Worten Academy Portugal aim to support the business, in a sustainable way, by developing, managing and applying knowledge acquired in the workplace, thereby ensuring the continuous improvement of performance levels and, consequently, the satisfaction of our customers. In these academies, with the objective of filling educational gaps, the pedagogical content is prioritised in order to allow each colleague to develop their own skills in a progressive way, respecting the

Continente Perishables School

In line with the commitments of the Sonae Retail School to consolidate and diversify its portfolio in 2015, the new model of the Continente Perishables School aims to maintain levels of excellence and to be aligned with the needs of the business units and their teams. The new model was designed based on different assumptions, such as, innovation in training methods, models and locations; flexibility, adjusting the courses according to the needs of our colleagues and their teams; their scheduling requirements; and adaptability to the operational reality.

Worten Training Campus Portugal & Supplier Training Show Spain

These are the largest annual Worten training events and an excellent educational opportunity, aiming at reinforcing proximity to the suppliers. During these initiatives, which always have a large attendance, the suppliers share their educational programmes and the most recent technology news, with the goal of improving sales skills and providing a broader knowledge of their products and services. In 2015, we held two Worten Training Campus editions in Portugal

learning pace of each individual. and one Supplier Training Show Spain in Spain, making a total of 6 Portuguese and 5 Spanish editions.

Fashion Academy

Launched in 2015, it was founded on a strong concept of internationalisation and directed towards focusing on the client and on the product. The mission of this academy is to develop the skills of our colleagues so that they can promote excellent levels of performance while responding to the different challenges of Zippy and MO, through the most varied educational methodologies (namely e-learning, on-site, on-the-job or forums for sharing ideas).

As an example, we would like to highlight the launching of the ZY VM WORLD – a portal of communication and of data management – developed in partnership with the Visual Merchandising Team and with the Fashion Academy, where one can find all the information regarding Visual Merchandising and the Product. The ZY VM WORLD aims to organise data and to promote immediate access to educational material and to any required information, and therefore, form a channel of communication that reinforces the interaction between all participants.

At Sonae, we ensure that our colleagues know that we are one team. Our people welcome the challenges of responsibility, as they know that Sonae as an organisation comes across the same obstacles and difficulties as they do. This is the cornerstone of our compensation scheme, which is based on responsibility and reward. A comprehensive remuneration package that carefully complies with the established meritocratic system. The key performance indicators of each group, department and individual are used collectively to contribute towards our incentives scheme, bearing in mind that our success is our team's success.

Our team is driven by the desire for continual improvement and success. We promote this incessant quest for higher levels of specialisation and efficiency by offering ambitious career opportunities and continuous training. Our on-going training strategy focuses on disseminating best practices and promotes the transfer of knowledge across the organisation. Sonae Management & Leadership Academy and Sonae Retail School are formidable examples of our commitment towards continuous learning. Our training academies are a notable example of our dedication towards continuous training. The school structure we have in place has been evolving so that it continuously matches the level of expertise and specialisation of our business segments and for this reason we have created new forums and training methods that aim to address the specific request of each business more assertively.

Safety first! We strictly follow a "zero accidents" policy and we actively promote a safer and happier work environment. We work endlessly to eliminate any obstacles that may arise and promote a strong culture of dissemination and awareness of health and safety across the whole organisation. We truly believe that everyone must be an active agent in promoting safety and mitigating workplace risks. Our efforts have been acknowledged both nationally and internationally, through the presentation of several awards and distinctions, which increases our drive towards this crucial objective.

Respect the environment

Paris Pledge For Action

Sonae constantly wants to be in the leading position when it concerns the environment. We keep this commitment close to our hearts, as it not only drives us to continuously take our environmental actions to a higher level, but

is an opportunity to pass our values and a strong environmental message across to our stakeholders, our customers and our investors. The environment has to be a universal top priority.

Respect for the environment is at the core of our values. We actively take on the responsibility to promote respect for the environment and we foster and nurture a strong culture towards a better environment, a better world. At Sonae, we do not believe in sustainable success without taking into consideration a very simple rule that our actions towards environmental issues have to be continuously improved.

At Sonae, respecting the environment goes beyond simply adhering to the mandatory legal requirements. We think 'green' within the organisation, we promote green options to our customers and we encourage green options from our producers. We streamline our approach to environmental issues on an ongoing basis and assure that our team implements our environmental management policies both with passion and painstaking care. We want future generations to inherit an environment which makes them proud. Sonae claims to be a living organisation and as such we have the responsibility to work towards an environmental legacy worthy of being passed from one generation to another.

Our strategy towards a better environment is based on two pillars. On the one hand, we constantly update and adapt our strategy so as to significantly lessen our environmental footprint to the absolute minimum. On the other hand, we use our presence in society to raise public awareness of environmental issues, by actively promoting initiatives which improve the environment and disseminating information that allows our stakeholders to make better informed decisions on environmental topics. Our environmental actions take place in 7 main areas: (i) electricity consumption; (ii) electricity produced through renewable energy sources; (iii) total CO2 emissions; (iv) transport and logistics; (v) refrigerant gases; (vi) water consumption; and (vii) waste.

Climate Change 2015 CDP Iberia Report

For the third consecutive year Sonae was recognised by the

non-governmental organisation Carbon Disclosure Project (CDP) for the excellence disclosure of its environmental information. In this year's edition, Sonae obtained the perfect score (100 out of 100) in the Climate Disclosure Leadership Index (CDLI), which evaluates the quality of the information disclosed to investors and the general public related to climate change. Additionally, Sonae presented the best environmental performance amongst Iberian Retail companies and of the best performances in the Iberian market ("CDP Iberia 125 Climate Performance Leadership Index"). A double recognition that rewards our efforts towards a better environment and the transparency of our initiatives.

Catarina Oliveira Fernandes (Sonae | Head of Communications, Brand and Corporate Responsibility) states: "This year Sonae obtained the maximum score and a leadership position at an Iberian level regarding environmental disclosure and we are very pleased to receive this CDP award, as it acknowledges the work we have been developing not only in promoting the best environmental practices, but also in our efforts towards a quality report we have been trying to improve, year upon year. At Sonae we are committed to developing sustainable operations, for which we have been investing in the continuous improvement of our ecologic footprint. This effort has been made easier by our internal culture, which promotes efficiency in everything we do. The entire organization commitment is what allows us to innovate and combine environmental improvements with the development of our operations and consolidation of our leadership positions."

These recognitions are the result of the careful scrutiny by 822 institutional investors, representing 85 trillion dollars in assets. The maximum score obtained by Sonae indicates a high level of transparency in the disclosure of information related with climate change, providing investors with a level of comfort that allows to assess companies' accountability and preparation to face changing market demands and emissions regulation.

At Sonae, environmental issues are at the core of our strategy and we are committed to ensuring complete transparency in our actions and to actively communicate with our stakeholders and customers, bringing everyone together and making a difference towards a better world.

Equipa Worten Equipa – Excellence in environmental responsibility

Since 2009, Equipa Worten Equipa (EWE) has collected more than 30,000 tonnes of electrical and electronic waste equipment and more than 17,000 new pieces of

equipment, with a value over €1.5 M, which have been offered to more than 1,700 institutions, providing support to 410,000 people in need.

EWE is one of our social and environmental responsibility flagship projects, achieving levels of excellence year after year, and it is a clear example of using our presence in the market and translating it into actions that actually make a difference with the involvement of our customers. For each tonne of waste electrical and electronic equipment collected in Worten stores, we donate 50 euros in new equipment. However the impact of EWE extends further than just the donation, as it also has a clear environmental impact not only through collecting waste but also through publicising the correct handling of old equipment.

Sourcing with integrity and quality management

Our customers want to know where their products come from and so do we. It is essential for both Sonae and its customers to be informed about how and from where we source our products. Safety is paramount at Sonae, with regard to both the organisation itself and our customers. We continuously examine our suppliers' network closely, in order to ensure enhanced levels of efficiency and quality, as well as rapidly pinpoint any difficulties which may arise and disseminate best practices.

Our active and meticulous approach towards our supply network also allows us to work in close association with our partners towards a sustainable future. Our partners need to be closely associated with our business strategies and values, an aspect which is vital for long-lasting success. This is accomplished through the training we offer under our continuous learning programmes, in addition to the support forums that provide guidance in order to follow and meet our stringent corporate responsibility policies. It is our responsibility to guarantee that we source products with integrity and quality. Above all, we aim to collaborate with our partners towards a sustainable future.

At Sonae, we believe that our customers should be able to make well-informed, knowledgeable decisions regarding our products. Therefore, our determination to guarantee high levels of transparency is central to our customer care policy and can be seen in our innovative labelling system in relation to the nutritional content of our products. We aim to promote a healthier lifestyle by enabling our customers to easily access the best product information and advice available. In this regard, we have several protocols in place with specialist organisations in the area of health and nutrition.

Founded in 1998, the Continente Producers Club soon played a crucial role in our strategy by allowing us to bridge the gap between high quality producers and our customers. Continente Producers Club allows Sonae MC to become closely involved and work with its partners, with an immediate impact on national and regional economic development. The success of this initiative is only possible through the satisfaction of customers who look for products of proven quality and origin, based on high quality standards and strict quality control procedures across the whole supply chain.

The success of the Continente Producers Club comes from the complete alignment between Sonae values and all of the producers in the club, working together to create sustainable growth. The Continente Producers Club has 234 members, representing €217 M.

In recent years, the Club has gained a very positive dynamic, organising several events. In 2015, the Continente Producers Club focused on reinforcing its commercial ties with the producers and developing partnerships between the members themselves. This was achieved by setting different challenges and training and through initiatives aimed at the transfer of knowledge, such as the XVIII Annual Continente Producers Club meeting, a visit to international renowned cold meat producers and periodic meetings for members to share experiences, ideas and best practices.

Total commitment to quality

Our business strategy has been increasingly focusing on our own brands and products, a strategy that has been clearly supported by our clients' recognition of our commitment to provide complete quality. We continuously monitor our supply chain and we intervene immediately as soon as any warning of the smallest risk is identified. We also promote the dissemination of best practices amongst our suppliers and the sharing of experiences, always focusing on higher levels of efficiency and quality, soundly rooted in our corporate responsibility values. In 2015, we conducted 164,332 quality assurance analyses, divided by Sonae retail segments.

Food	Non-food	Textile	Sports	Electronics
87,179	9,556	43,886	23,008	703

Innovation is essential for our sustainable success

Our culture of innovation keeps us at the fore front of the market place. However, we are highly aware that a leading position is only maintained through persistently fostering innovation at all levels of the organisation. We are known worldwide for our capacity to effortlessly convert innovative ideas into practical applications. We believe innovation has a profound impact as a value driver on two dimensions. Firstly, we can innovate internally achieving higher levels of efficiency and specialisations. Secondly, we can innovate in the products and services that we offer to our customers, knowing that creating value for them is the path to a sustainable future. Our approach towards innovation is deeply engrained in all of our various retail divisions and the way in which they carry out business. Each retail division is unique, however, each and every division reaps the benefits of the state-of-the-art products, services and processes developed, in addition to the exclusive types of brand activation and social responsibility networks. Innovation also allows us to be quicker to adjust to market trends and in mitigating operational risks.

Our insatiable drive to discover and innovate has led to our success. We take pride in our past achievements but expect even more from the future. We look beyond the very limits of boundaries, gaining a better understanding of the future, a pacesetter in terms of innovation and innovative methodologies. Long-lasting success and innovation go hand-in-hand, so creating an environment conducive to change is essential.

It is our steadfast belief that everyone is capable of innovation. Our teams are made up of colleagues from a multitude of backgrounds and profiles, furthermore the different business segments and countries where we operate, all combine to create a motivating and dynamic environment that stimulates creativity, initiative and innovation.

Our approach towards innovation

Our commitment to innovation is at the heart of our business, as it plays a vital role in how we foresee, prepare for and take advantage of behavioural and technological changes in our society for the sake of improving our customers' lives and, at the same time, creating long-lasting competitive advantages for SONAE.

During 2015, we cemented our position as a highly regarded R&D+I actor, both in investment and in results. Below, we would like to highlight the following innovation projects and activities implemented:

Continente's ShopView, a system which allows the continuous and automatic monitoring and supervision of the presence, misplacement or lack of a product on store shelves.
Worten's Sales Assistant, a smart mobile platform which allows our sales colleagues to show detailed information about the products in store, enhancing the shopping experience, virtually expanding in-store stocks and allowing the possibility of finalising a sale anywhere in the store.
Deeply Zipperless Suit, a surf suit without zippers, a revolutionary characteristic which makes it lighter, more comfortable to the user and with enhanced flexibility and performance.
Zippy New Concept Store, which promotes greater levels of interaction, increased proximity to customers – kids and parents - and an enhanced shopping experience in an area which has been transformed.

In 2015, we also experienced the strengthening and expansion of our innovation network which includes universities, research centres, technological transfer units, partners, suppliers, start-ups and businesses from a large variety of sectors. We currently leverage and rely on a network of over 160 innovation partners across the world, including institutions from dozens of countries over four continents. Amongst the projects developed in partnership are product design challenges and R&D cooperation in domains like cybersecurity or mobile platforms to assure healthy nutrition in groups with special needs.

We also made progress in involving an increasing number of employees in our innovation flux, from ideation to implementation, leading to significant advances in our businesses often inducing positive changes.

Nuno Lopes Gama | Head of Innovation & Future Tech

A culture of innovation

Aware of the role of innovation as a determinant of sustainable growth, we have created a solid structure to promote, nurture and manage innovation across the whole organisation. Our Innovation Management Team is devoted to a mission and a vision specifically tailored to enhance sustainable growth

through Innovation. Additionally, we have an Innovation Committee responsible for promoting innovation across all our retail segments and for encouraging the participation of all colleagues to think of innovative approaches to their tasks. This committee brings together managers from each business segment and is coordinated by the Innovation Management Team.

As our international presence grows our values also take on an international dimension. Our innovation culture is also designed at an international level and as part of our open innovation strategy, we seek to involve not only our team, universities, research laboratories, technology transfer units, suppliers, customers, other retailers and startups in our initiatives to promote innovation. Currently, Sonae retail businesses have over 160 partnerships for innovation worldwide, located in 29 countries on 4 different continents, 110 of these being European partners.

For the last 6 years, we have published the Sonae Innovation Retail book, aiming at disseminating our best initiatives and it is given to 670 people across 18 countries, in 3 continents.

Always looking for improved processes

In the Kaizen Lean Awards, Continente was honoured with the title "Kaizen Ambassador", for its work carried out in store operations.

José Fortunato (President of the Improving Our Work consulting group) emphasised that "Continuous improvement is a structural pillar in Sonae's culture and its work practice, contributing to the transformation of its operations and the strengthening of a culture of efficiency and frugality". Continente has an unmatched record in its dedication to continuous improvement and the results achieved are an example of benchmarking on an international level. Sonae's food retail department receives regular visits from retailers and companies in the sector from around the world, thus sharing its best practices.

Worten was the winner in the "Excellence in Quality" category, for its sales force management project. The objective of this project is to pay its customers more attention, thereby providing them with any necessary clarifications and proving a more than adequate service. The Kaizen Institute and the Portuguese Association for Quality highlighted the differentiating character, improvement of customer service and consequent sales increases as the key strengths of the project, which has been implemented in all Worten stores.

Innovation through sharing

Our team comprises a mixture of different backgrounds, cultures and businesses. We believe that the sharing of knowledge and experience is important to create bridges across the whole organisation and to promote a culture of innovation. In order to promote more efficient and exciting sharing of knowledge, we have implemented different initiatives such as the BizShare Day, ShineOn and Creative Problem-Solving.

BizShare Day

Aims at sharing knowledge and experiences across the organisation. In 2015, we conducted two sessions with 155 attendees.

ShineOn

More than 100 colleagues participated with more than 190 ideas. ShineOn sessions have resulted in 1,110 ideas over 3 years and 4 projects from 2015 are being implemented.

Creative Problem-Solving

Focuses on sharing experiences aimed at real organisational problems. The 2015 editions brought together 235 participants.

A standing commitment to our customers

Our success is measured by our customers' satisfaction. Our focus on creating value and our desire to help customers have a better lifestyle fuels our commitment to extend the state-of-the-art products and services we offer, inspired by a better future for all. Our loyalty to our customers has the ultimate goal of improving their lifestyle whether it is by offering them the best products at the best prices or by guiding and advising them in their choices and behaviour.

We are determined to offer the best value for money proposal and a wide choice of prices for each product, while ensuring the highest quality levels in order to fulfil our customer's expectations. Efficiency gains are our main priority, whilst collaborating with our suppliers to develop new products and services, as well as assuring quality. Innovation is encouraged across all tiers of the organisation, with our customers benefiting from lean operations and a satisfying shopping experience. A noteworthy example in this case is the Continente Loyalty Card, an innovative product used by 3.5 million clients that has led to about €310 M in savings.

At the same time we are aware of the impact of our presence in society and we play a leading role in the society in which we operate, using our influence to benefit the lifestyle of every customer. This is accomplished through the superior quality of our products, in addition to providing our customers with advice through such means as health campaigns and a wide range of healthy product categories.

Our strong principles are apparent in our products and services and our commitment to high standards of quality and integrity has been extensively recognised. We strive to uphold our corporate responsibility values. We invest in innovation. We invest in quality control. We invest in the best team, because they are worth all of our efforts. We take pride in the awards and acknowledgements we have received.

We are honoured to be given such valuable acknowledgments, however this makes us even more aware of our responsibility to our customers. Next year, we hope to achieve even more!

Universo Card

In the last quarter of 2015, Sonae launched the Universo card. An innovative card that brings

together all the benefits of loyalty cards into a single card like that of a Mastercard credit card, with all its associated benefits.

This new proposal adds to our current offer and we believe that in the future the Universo card will be the preferred payment card, offering the maximum benefits at the best price in the market.

Additionally, it will allow its users transparent access to all loyalty programmes in place at Sonae retail businesses, with the different businesses maintaining the ability to analyse and explore their customer base autonomously.

A commitment to our customers

The Continente Loyalty Card is one of Sonae's flagship projects, an evolving case study of innovation and success since it was first launched in 2007. Sonae MC

progressed further in our strategy to implement a "customer loyalty ecosystem", which all participating brands and members of the programme benefit from. New initiatives were implemented, such as the reinforcement of the partnership with Galp Energia – since early 2015, with offers covering fuel, electricity and natural gas –, the expansion of the Continente Loyalty Card to the Meu Super stores and, later in the year in close collaboration with Sonae's financial arm, the launch of the new Universo Card. The relevance of the Continente Loyalty Card is highlighted through its achievement of €4,500 M in sales, more than 170 M transactions, and benefiting 3.5M families with more than €300 M in savings.

Continente loyalty card in a nutshell
€4,500 M	> 90%	€310 M	170 Million	7 out of 10	3.5 Million
in sales	of total sales	in discounts	transactions	transactions	customers

Sonae – Several brands, but the same Culture of Success

Continente remarkably has now held the Brand of Trust title for 13 consecutive years. Worten has been recognised by our customers for the sixth consecutive year. Zippy for the third consecutive year. Well's and Sport Zone

renewed their distinction.

We are also the proud recipients of 11 Consumer Choice awards, across all of our business segments, showing that for us quality is at the heart of our strategy.

Continente was recognised as a Superbrand for the 12th consecutive year and Worten for the 2nd year.

Our customers are our success. Their recognition is paramount to us and it represents our commitment and responsibility to work our hardest every day, so as to guarantee the best products and services at the best prices.

E-commerce – Also leaders on the web

Over the last few years, we have been consolidating our e-commerce presence and developing an integrated omnichannel approach across our business segments that explores the complementarity between physical stores and alternative channels to offer each customer the opportunity to select and buy products in comfort and at whatever time is most convenient. In order to provide a better service to customers, stores are focused on offering a distinctive service, with their range of products increased through the digital catalogues and specialised customer support. Furthermore, stores operate in conjunction with online platforms. We closed 2015 with online stores in place for all of our main brands and in particular concerning Continente online, the largest online operation, we have more than 114 thousand clients registered and a staggering, almost half a million home deliveries. We are where our clients want us to be.

Making a positive difference to our community

At Sonae, we proudly and actively accept our responsibility to make a clear difference to our community and we place great importance on this positive influence. Our priority is to have an effect that is both extensive and enduring. The scope of our social responsibility extends to six principal areas that we consider vital to foster a sustainable and improved society: the environment, culture, education, health and sports, science and innovation and social solidarity.

We coordinate our community campaigns through ActivShare, a platform that we have developed to actively manage and disseminate information concerning our volunteering social responsibility initiatives. ActivShare helps us to respond more effectively to those who need our help, by streamlining our alignment and communication efforts. As we reinforce our international strategy, we take our values with us and ActivShare has been a key player in promoting initiatives at the international level. We truly believe in making a world of difference. During 2015, we provided more than €8.4 M in community support, helping 1,557 institutions. Our values are defined and reflected through our team and we take pride in the remarkable contribution of 3,998 hours of volunteer work.

We believe that we can make a stronger positive impact through a multidimensional strategy, which focuses on different social dimensions that together promote a better society and a better world. Our actions in 2015 are reflected through arts and culture, education and social development. We have been very active in promoting Sonae Art as a brand that brings together our initiatives in the area of arts and culture and which was highly effective in 2015 sponsoring and promoting different initiatives such as Sonae's Media Art Award, the Sonae/Serralves project and the internationalisation of the Symphony Orchestra of Porto from Casa da Música.

The launch of Sonae's Media Art Award with MNAC

This initiative promoted by Sonae in partnership with the National Museum of Contemporary Art – Chiado Museum (MNAC-MC) aims at distinguishing and promoting artistic creations from young Portuguese artists. It is designed for artists who present new works in the area of media art in either an exploratory or innovative way, or with a critical and historical perspective. The winning artist is awarded 40 thousand euros, the highest national award in the field of new media.

The five artists selected as finalists in this inaugural edition of Sonae's Media Art Award were chosen among more than 150 applications. The 2015 winner was the highly talented Tatiana Macedo, with the original work "1989", a multichannel video installation with space-like sound.

This initiative is part of Sonae's corporate responsibility policy, which aims to promote creativity and innovation, stimulating new tendencies and bringing society closer to art, namely through important cultural events that foster enriching personal and collective development experiences.

The internationalisation of the Symphony Orchestra of Porto from Casa da Música

With the aim of strengthening the internationalisation of the Sonae Art brand, bringing together actions related to supporting, promoting and encouraging Arts and Culture, Sonae and Worten supported for the second consecutive year, the internationalisation of the Symphony Orchestra of Porto from Casa da Música by holding a concert in Madrid. The concert was held at the National Auditorium of Music in Madrid giving the musicians the opportunity to perform on one of the most renowned stages in the Spanish capital and bringing Portuguese symphonies to Spain.

Catarina Oliveira Fernandes (Head of Communications, Brand and Corporate Responsibility | Sonae) emphasised that "Culture is a central tenet of our corporate responsibility policy, because we believe that art stimulates creativity and innovation, values that are part of the Sonae culture. We are a company of people for people who rely on a strong connection with the communities where we develop our business, and we want to contribute to the development of communities, fulfilling our mission to bring the benefits of progress and innovation to a growing number of people".

Miguel Mota Freitas, CEO of Sonae SR commented that "Sonae has a strong concern for the communities in which it develops its activity, aiming to contribute to their progress. Worten, as part of its corporate responsibility policy, also promotes creativity and culture as development factors in the communities where it operates".

The new edition of the Sonae/Serralves project

Sonae remains one of the patrons of Serralves, with the aim of promoting culture, by linking the community to art. The Sonae/Serralves Project (launched in 2015 and to be completed in 2016), which resulted from this partnership, has the following objectives:

Encourage national artistic production
Promote national art on a worldwide basis and exchange among young national and international artists
Support institutions dedicated to art
Stimulate society's approach to art by supporting and promoting initiatives

Haegue Yang (Hangul, South Korea, 1971) is the artist who has been invited to the next edition of the Sonae|Serralves project at the Museum of Contemporary Art of Serralves. This is the fourth time that the Sonae|Serralves project has invited an artist to create unpublished works of art, again this year in close collaboration with the architectural and natural context of Serralves, as was the case in 2014 with the exhibition 'Cold Shoulder', by the Iranian Nairy Baghramian.

Catarina Oliveira Fernandes (Head of Communications, Brand and Social Responsibility | Sonae) commented that "Sonae aims to contribute to the promotion of social and cultural well-being of the communities where it operates, so it has been promoting over the years, the development of knowledge and culture. The 4th edition of the Sonae/Serralves project is a successful example of this commitment, it has enabled us to bring national and international artists of increasing value to Portugal. This initiative is also an important opportunity for university students, through the involvement of students of the arts, who will watch the artist in the preparation and implementation of her works, through open meetings with the artist in four Portuguese universities".

As one the largest employers in the country and with our knowledge of the needs in different business and geographic markets, Sonae is in a privileged position to understand the gap between academic training and market needs. In addition, we believe that it is critical to anticipate future market needs and prepare young generations to fulfil those needs. Bearing these insights in mind, we have been promoting different initiatives to close that gap. For us, this is not only an opportunity to help but also an opportunity to find and recruit talent. We have different programmes and initiatives in place such as the Contacto programme and partnership with Junior Achievement (Portugal and Spain), but we want to go a step further and become involved with higher education institutions and we have signed an agreement with the Ministry of Education and Science to cooperate in the development of vocational courses.

Helping future generations by bridging the gap between higher education and the job market

Sonae and the Ministry of Education and Science have signed a protocol of cooperation for the development of vocational courses in secondary education, acting as an outstanding example of cooperation between companies and educational institutions.

This partnership is part of the human resources and cooperation policy with other academic and teaching intuitions at Sonae and aims to empower youth through the development of in-house training in companies, enabling better preparation for the job market. The partnership established allows Sonae to place its knowledge and skills at the service of the Community and this initiative will surely develop specialised technicians who may become part of the Sonae team, thus contributing to the development of its operations.

The first course, for training logistics technicians, is already underway in partnership with the Escola de Comércio de Lisboa (Lisbon School of Commerce) and involves 23 students. According to the agreement signed with the Ministry of Education and Science, Sonae is a benchmark in the Portuguese market, with an active presence and a strong focus on its business sector, bringing together excellent conditions for an active liaison with schools by implementing such courses together.

The socioeconomic crisis is still more than just a memory and the social impacts are very visible and reinforce the need for help. In 2015, we were highly selective in our initiatives because we wanted to make sure that we were effectively reaching those most in need. We are particularly concerned when it comes to children, as they are our legacy for the future. We want to help ensure that children are provided with an environment and facilities that are conducive to their development. We firmly believe that it is our obligation to play our part in ensuring sustainable growth and a brighter future for as many children as possible. The future of our children is in our hands. Additionally, one of our key focus areas is social solidarity. This is in terms of providing assistance in various forms to those who most need it, in order for them to overcome short and long-term hardships. We carry out such efforts hand in-hand with the communities where we operate. Our actions are a genuine reflection of our values.

Porto de Futuro provides support to the management and development of schools. It encourages the sharing of knowledge and experiences between schools and companies aiming at increasing the level of community involvement in schools. The project recognises the fundamental role of education in the sustainable development of a more competitive and dynamic society.

As part of this project, Sonae has continued its partnership with the Cerco School Group aiming at strengthening the link between schools and their community, promoting sports, providing support for management consulting, encouraging entrepreneurship and rewarding merit. We believe that together, we can improve the social environment in these schools.

In 2014, Porto de Futuro set in motion a project focusing on academic success, under the coordination of EPIS - Entrepreneurial Association for Social Inclusion. This project aims to train young people to realise their potential throughout life, through Education, Training and Professional Insertion. In the academic year 2014/2015, the focus of activity was the implementation of a programme which promoted the success of students in the 3rd cycle of their education, coordinated by EPIS. Additionally, through the Cerco School Group, tutors monitored around 54 students. Students are tutored both in individual or group sessions, with special emphasis on study sessions and the EPIS Merit Scholarship.

Projeto Pêra

Our children are our future. A healthy child is more willing and motivated to learn. Their personal development is more balanced and active and as a result they are more likely to interact positively with others, developing stronger soft skills. We cannot accept circumstances where children come to school without a nutritious breakfast and, therefore, we were quick to act and to create Project Pêra (Project Pear) aiming at providing children in need in Porto with a healthy breakfast. In the 2014/2015 school-year, we provided breakfast to 805 children in 18 schools, including 18 Continente stores. More importantly, we need and intend to be more active in this area.

Well's Make-a-Wish

The Well's and the Make-A-Wish Foundation have teamed up to help grant wishes to children and young people, who are victims of

life-threatening medical conditions. The Portuguese people responded with amazing generosity to the appeal by the two entities and over a period of two months, the campaign managed to collect a total of 90 thousand euros from the sale of Christmas label collections, surpassing the value raised in the previous year. The initiative spanned across more than 160 Sonae health and well-being stores and consisted of the sale of 14 sets of beautifully-illustrated Christmas labels, detailing some of the children's wishes that had already been granted through the brand, for the amount of one euro. The funds raised reverted entirely to the Make-A-Wish Foundation.

Código Dá Vinte – Worten

The "Dá Vinte" Code allows Worten customers at the

checkout counter to select a "Dá Vinte" bar code card and donate multiples of 20 ("Vinte") cents. Worten adds 20% to the value donated by our customers and the total is then donated to a charity organisation. In total, over the three editions, Worten has donated about 435 thousand euros to help those in need. Out of this amount, approximately 185 thousand euros were allocated to the construction of a new house to foster 16 families of children undergoing treatment at the Portuguese Institute of Oncology (IPO) of Porto, reaching 100 families per year.

Love in a Box is a joint Christmas initiative shared by Zippy and the Portuguese Red Cross designed to bring a smile those children most in need. "Love in a Box" asks children and their families to bring

happiness to children in need during the Christmas season. The idea is as simple as giving a child a reason to smile. The amount raised is converted into several child-care articles, clothing and footwear, which are in turn distributed by the various delegations of the Portuguese Red Cross, according to their needs. In 2015, we took this initiative to Spain and in both countries we raised over 19

thousand euros. "Love in a Box" was recognised in

the 24th edition of the Masters of Distribution Awards in the Social Responsibility category.

Missão Continente

In 2015, Mission Continente was established, in order to raise awareness and mobilise people and communities in relation to social inclusion, economic development and respect for the

environment. Mission Continente has evolved from Mission Smile, which for more than a decade, focused on the development of social causes in the areas of child health, active aging and the fight against hunger. Mission Continente extends Mission Smile by embracing all of Sonae MC's corporate responsibility dimensions, namely activities of a social nature, the community and the environment. In order to better contribute to the development of communities and to improve the quality of life of Portuguese families, this initiative is divided into three strategic pillars: Raise Awareness, Community and Smile.

Raising Awareness

This component focuses on the adoption and promotion of lifestyles that take into consideration many of today's social and world challenges, from a social, economic and environmental perspective.

Gardens in Schools

In partnership with the Lisbon Town Council, Mission Continente contributed to the creation of school gardens in Lisbon municipality in 10 basic education schools, as part of the campaign "vegetable gardens at schools ... vegetables on your plate," raising awareness of healthy eating habits.

The Community component aims to contribute positively to cohesion and social welfare. In this sense, during 2015, we developed several actions in partnership with various organisations such as Cáritas, Quercus and the Red Cross.

Food Collection

Community" pillar

During a period of three days, Mission Continente held in partnership with the Red Cross, a national Food Collection campaign, in which several hundred volunteers were in various Continente stores and Meu Super stores collecting essential goods contributions. Products and food offered accounted for about 200,000 meals and were then distributed to the neediest people, indicated by the representatives of the Portuguese Red Cross according to the most urgent needs of each region.

Smile

The Smile component, in addition to inheriting the name of the previous initiative (Mission Smile), also focuses on child health, concentrating on the development of actions to support birth rates and promote family health in Portugal through local support.

Mission Continente Smile

The promotion of maternal and child health in the health centres in Portugal, one of the Mission Continente's aims during 2015 was to raise funds by selling the book "The best family recipes" and the contribution of the population through premium-rate calls, totalling a final value exceeding 375,000 euros. For each book sold, Mission Continente donated half the value of the winning projects of the annual Mission Smile contest, voted by the Portuguese people from one of 58 projects.

Corporate Governance

At Sonae, we are aware of our influence on society. For this reason, we take our responsibilities seriously, in particular, in light of our stakeholders. We abide by the most stringent corporate governance standards and our actions, policies and decisions are carried out and monitored with the utmost care, taking our stakeholder's interests to heart. Ethical and responsible behaviour are reflected through transparency at all levels. We clearly adhere to all capital market regulations and we always guarantee that we relay information quality of the highest standard. We have an extensive corporate structure established, which ensures that investors, principally small investors, trust and can rely on our dedication to innovation and sustainability and our ability to carefully regulate our organisation. Our corporate governance structure is based on both internal and external knowledge and know-how, best corporate governance practices are continuously upheld beyond what is required. Through a number of different forums and training workshops, we provide support to small investors helping them to meet the strict regulations.

Our stakeholders are extremely important to us at Sonae; we are always available and can be approached through the Investor Relations Department. We do our utmost to assure that all regulatory and reporting requirements are adhered to and all relevant information is made available voluntarily, both in Sonae and on the Portuguese Stock Exchange Commission websites. Our business is your business.

For further information on Corporate Governance related issues, please refer to our Corporate Governance Report.

FINANCIAL REVIEW

IMPROVING LIFE

Financial Review

Key financial performance indicators

0000 000

Macroeconomic context

Six years after the World emerged from its most far-reaching and deepest post-war recession, global growth was again disappointing. The World economy remained subdued (+3.1% of GDP growth) due to slower growth in emerging economies, which declined for the fifth consecutive year (+4% vs +4.6% in 2014) - although still accounting for 70% of World growth - while advanced economies registered a marginal improvement (+1.9% vs 1.8% in 2014).

In the Eurozone, the economic situation improved considerably, with GDP growth accelerating from +0.9% in 2014 to +1.6% in 2015, underpinned by healthy domestic demand. Although a weaker euro was a supportive factor in relation to Eurozone exports, the external environment was not. Global headwinds and the ongoing deceleration of many major emerging economies prompted the region's overseas sales to drop sharply in the third quarter. Conversely, domestic demand held fairly strong with private consumption gaining strength on the back of falling oil prices, the expansionary monetary policy and a gradual improvement in labour market conditions.

In the United States, GDP grew by +2.5%, with data suggesting that the economy is now significantly more robust than in the recent past, which is also confirmed by the decision of the Federal Reserve in late 2015 to raise interest rates for the first time in almost a decade. Growth was primarily supported by strong household spending, which exceeded +3.0% for the first time since 2006, reflecting the strengthening of the labour market. By contrast, investment was negatively affected by the fall in oil prices given the weight of the oil sector in the economy. Exports slowed significantly, reflecting the impact of the appreciation of the dollar.

The situation in emerging markets was diverse, but in many cases challenging. Growth in many of these countries was penalised by lower prices for energy and other commodities and by the gradual slowdown and rebalancing of the Chinese economy, away from investment and manufacturing towards consumption and services. A few emerging economies, including Brazil and Russia (the largest emerging markets after China), fell into recession in 2015.

In Portugal, recovery was further consolidated. GDP growth accelerated to +1.5%, after a +0.9% increase in 2014. However, growth fell short of expectations, given the significant external tailwinds, such as low oil prices and the supportive monetary policy. The economic performance during the first half of 2015 was strong, but growth was disappointing in the second-half, as investment stalled and exports slowed down dragged by the fall in sales to Angola.

Domestic demand remained the main driving force, with private consumption (+2.7%) leading the recovery and investment consolidating its positive trend (+3.7%). Household spending was supported by improving labour market conditions, the solid rise in consumer confidence and the sharp decline in savings. Consumers continued to favour the acquisition of durable goods (+11.0%), in particular vehicles, while the consumption of food and beverages registered only a modest improvement (+1.0%).

In Spain, recovery gained momentum, with GDP expanding by an estimated +3.2%, the highest rate since 2007. The economy was supported by both external and internal tailwinds. The former includes low oil prices, the gradual improvement of European demand and the monetary policy of the ECB. With regards to internal drivers, the recovery in demand was supported by both transitory and structural elements. On the one hand, the fiscal policy stance was slightly expansionary, while factors such as the impact of economic reforms, including in the labour market, started to feed through into the economy.

Growth benefited from the positive contribution of all the main components of public and private domestic demand. Household consumption registered a remarkable growth of +3.1%, underpinned by an increase in disposable income, supported by sound job creation and the improvement in the financial situation of families.

Perspectives

The World economy is expected to accelerate moderately next year (+3.4%), but the pickup in growth will be uneven across countries, with risks tilted toward emerging markets. Three key transitions will shape the outlook: the rebalancing of the Chinese economy, lower commodity prices and a gradual tightening of the U.S. monetary policy. Advanced economies will continue to experience a modest recovery (+2.1%), while emerging economies will face a new reality of slower growth rates (+4.0%).

The Eurozone is expected to slightly accelerate its growth rate (+1.7%), driven by stronger private consumption supported by lower oil prices and improved financial conditions that should compensate the weakening of net exports.

The United States is expected to continue to deliver robust economic activity, benefitting from still-easy financial conditions and strengthening labour and housing markets. However, the appreciation of the dollar will remain as the main challenge, causing the US manufacturing sector to shrink marginally.

Emerging markets should experience a slight growth increase from +4.0% in 2015 — the lowest rate since the 2008-09 financial crises — to +4.3% in 2016. However, these average values conceal a wide diversity of situations across countries. India and parts of emerging Asia will continue to present strong growth rates, while Latin America will remain in recession in 2016, mostly due to the depression in Brazil and economic stress in other countries (even if most other countries in the region continue to grow). The emerging countries in Europe are expected to grow steadily, but at a lower rate, as a consequence of Russia's recession. A gradual pickup is expected in Sub-Saharan Africa, but with lower growth rates compared to the previous decade.

In Portugal, economic growth will remain moderate (+1.5% to +2.0%), mostly due to internal vulnerabilities, namely the high level of both public and private debt, and apathetic European economic growth. Private consumption will remain as the strongest growth driver (+1.9%), supported by higher levels of household disposable income, resulting from different factors such as wage increases, increased income for pensioners and tax relief, whilst the fall in unemployment rate will be more restrained. The Government's budget for 2016 is expected to deliver a boost to the economy, but is casting some uncertainty regarding future economic policies and compliance with European commitments.

The outlook is globally favourable for Spain. The expansionary phase of the economy is expected to continue throughout 2016 (+2.8%), with growth remaining underpinned by solid domestic demand. Household consumption should remain particularly buoyant (+3.4%), driven by the favourable evolution of employment, together with the positive impact on real disposable income of the fall in oil prices and the reduction in direct taxation. Furthermore, the economy will continue to benefit from the improvement of financing conditions and the recovery in residential investment.

In brief, the outlook for the Iberian economies is favourable, albeit moderate, particularly for Spain where GDP growth will continue to outpace the Euro Area average. However, the year ahead is challenging with main risks tilted to the downside. Internally, political instability will be the major source of concern, while externally, the deterioration of the global outlook, particularly a derailment in emerging markets, could negatively affect both economies.

__________________________

Notes: Real growth rates

Sources: Data and forecasts: i) Main economic blocks – IMF World Economic Outlook update, January 2016; ii) Portugal - Bank of Portugal December 2015 Economic Bulletin; iii) Spain - Bank of Spain December 2015 Economic Bulletin

2015 Consolidated financial performance

Sonae performance and capital structure

Sonae Consolidated results
Million euros	2014	2015	y.o.y.
Turnover	4,974	5,014	0.8%
Sonae MC	3,461	3,490	0.8%
Sonae SR	1,290	1,294	0.4%
Sonae RP	126	121	-4.0%
Sonae IM	252	249	-1.1%
E&A (1)	-155	-140	9.2%
Underlying EBITDA	380	331	-13.0%
Sonae MC	241	215	-10.7%
Sonae SR	15	5	-64.5%
Sonae RP	116	109	-6.3%
Sonae IM	19	16	-14.3%
E&A (1)	-12	-15	-28.8%
Underlying EBITDA margin	7.6%	6.6%	-1.0 p.p.
Equity method results (2)	42	48	13.6%
o.w. S. Sierra (direct results)	26	31	15.9%
o.w. NOS	16	18	13.7%
Non-recurrent items	-5	14	-
EBITDA	417	393	-5.8%
EBITDA margin	8.4%	7.8%	-0.6 p.p.
D&A (3)	-189	-187	1.0%
EBIT	228	206	-9.9%
Net financial activity	-77	-57	26.1%
EBT	151	149	-1.6%
Taxes	-25	-21	15.2%
Direct results (4)	127	128	1.1%
Indirect results	19	49	158.9%
Net income	146	177	21.5%
Non-controlling interests	-2	-1	12.3%
Net income group share	144	175	21.9%

(1) Eliminations & adjustments;

(2) Equity method results: includes direct income related to investments consolidated by the equity method (mainly Sonae Sierra and NOS);

(3) Depreciations & amortisations including provisions & impairments; (4) Direct results before non-controlling interests.

Sonae net invested capital

Sonae net invested capital
Million euros	2014	2015	y.o.y.
Net invested capital	3,083	3,088	0.1%
Technical investment	2,034	1,920	-5.6%
Financial investment	1,279	1,313	2.7%
Goodwill	611	625	2.3%
Working capital	-840	-770	8.4%
Sonae shareholders funds	1,832	1,795	- -2.0%
Sonae net debt(1)	1,251	1,293	3.4%
Net debt / Invested capital	40.6%	41.9%	1.3 p.p.

(1) Financial netdebt + net shareholder loans.

In 2015, Sonae consolidated turnover reached €5,014 M, representing a growth of 0.8% when compared to 2014, benefiting from the positive performance of MC and SR, which has more than compensated the lower turnover of RP and IM.

Sonae underlying EBITDA stood at €331 M, corresponding to an underlying EBITDA margin of 6.6%. Sonae EBITDA reached €393 M, equivalent to an EBITDA margin of 7.8% and including the following contributions:

(i) underlying EBITDA, amounting to €331 M;
(ii) equity method results of €48 M, made up of Sierra's direct results, as well as NOS contribution; and,
(iii) non-recurrent items of €14 M, benefiting from the capital gains related to the sale and leaseback transactions completed throughout the year.

Driven by the combination of a lower average net debt and a lower cost of outstanding debt of approximately 90 bps, Sonae net financial activity improved by €20 M, registering a negative €57 M in 2015.

Sonae continued to focus on increasing the average maturity of the debt and decreasing the average interest rate of outstanding debt, which averaged 2.0% on December 31st 2015. It should be noted that Sonae financial results are only related to MC, SR, RP and IM businesses.

Sonae direct results amounted to €128 M, increasing 1.1% y.o.y., driven by the slightly lower D&A, less negative net financial activity and taxes, which more than off-set the lower EBITDA.

Sonae indirect results reached €49 M, a significant increase on a yearly basis. This benefited from the noncash movements related to the revaluation of Sierra's assets, in the amount of €40 M, carried out on December 31st 2015, as well as by NOS mark to market effect and dividends, amounting to €24 M.

Sonae shareholders' funds stood at €1,795 M in 2015, €37 M below 2014.

avg gearing (book value) avg gearing (mkt value)

Net debt
Million euros	2014	2015	y.o.y.
Net financial debt	1,248	1,290	3.4%
MC, SR and RP	683	646	-5.3%
I M	23	15	-35.7%
Holding & other	542	629	16.0%
Sonae net debt	1,251	1,293	3.4%
Capital Structure - MC, SR and RP
Net debt to EBITDA

2013 2014

2015

Sonae Capex
2014	2015	% of Turnover
356	300	6.0%
105	114	3.3%
63	111	8.6%
27	60	49.8%
15	11	4.5%

Sonae net debt reached €1,293 M in 2015, increasing €42 M when compared to last year. Sonae's liquidity position was impacted, in 2015, by the dividends payment that occurred in May and December, amounting to €141 M, as well as by the acquisitions of Ulabox, Makenotes and Losan, totalling €47 M.

Average gearing at market value stood at 0.6x and average gearing at book value reached 0.8x. Sonae's gearing levels remained broadly stable in comparison to 2014, but show clear levels of improvement compared to previous periods.

Sonae maintains a robust capital structure, supported by low leverage, with no funding needs foreseen until the end of 2017 and an improved maturity profile.

Financial net debt of MC, SR and RP stood at €646 M in 2015, less €37 M when compared to 2014, which benefited from the cash inflow resulting from the sale and leaseback transactions completed at RP during 1H15. The net debt to EBITDA stood at 2.0x, decreasing 0.2x versus 2014 due to the lower EBITDA.

Holding net debt reached €629 M, growing 16.0% y.o.y.. Loan-to-value ratio of the holding increased to 14%, impacted by higher holding net debt due to the anticipation of dividends payment related to 2015 results.

MC Capex stood at €114 M, increasing 8.6% when compared to 2014.

SR Capex reached €111 M in 2015. It should be noted that the increase in 2015 reflects the acquisition of Losan, completed during the 4Q15.

RP Capex totalled €60 M in 2015, a value that compares with €27 M in 2014.

IM Capex reached €11 M in 2015, decreasing €4 M when compared to 2014.

Business segments

Sonae has grown to become a global player and our activity is spread across 72 countries, including operations, provision of services to third parties, representation offices, franchising and partnerships. We continuously adapt our strategy to fit new businesses, new markets and new partners, always making sure that our values shared by all of our stakeholders and promoting sustainable growth based on social and economic development.

The business environment landscape is changing towards a highly competitive market characterised by increasingly demanding consumers and fast-moving market trends. In such a dynamic world, specialisation, innovation, efficiency and capacity to focus on the consumer are paramount to success.

Sonae is a major player in different business segments and the market is driving our operations to become more specialised and autonomous so as to face future challenges and to be the front runner in each and every one of our businesses.

In order to face these new organisational challenges, we have been adjusting our internal organisation, making our business more autonomous, thus enabling higher levels of specialisation. Simultaneously we are creating new forums and new bridges throughout the organisation, to continue to bring together our multitude of cultures and business expertise. This new approach means that our business segments have had and will continue to have their management levels reinforced with human capital, with unique and highly specialised experience in each segment.

We believe that this new structure will allow each one of our business segments to be more agile in creating new opportunities and, Sonae as a whole, will be the backbone of this new structure. To strengthen this new structure, Sonae Corporate Centre will adopt a very proactive role in bringing together our invaluable world of personal and business expertise. Sonae Corporate Centre will have two major functions. On the one hand, the Corporate Centre is responsible for the so-called sovereign functions like Corporate Governance, Strategy, Investor Relations and Corporate Communication and on the other hand supports our business segments to ensure higher levels of efficiency by creating a pool of shared services.

0000

Sonae MC

Sonae MC is part of Portuguese society. Continente has been distinguished for the 13th successive year as a Brand of Trust and for the 12th successive year as a Superbrand. Well's has been recognised for the second year as a Brand of Trust. This recognition highlights our commitment towards our clients.

Sonae MC, the food retail business, continued to have a leading market position in Portugal. Sonae MC is devoted to understanding the needs of the Portuguese consumers, and has extensive experience in customising its offers and promotional tools to rapidly adjust to the needs of the market. Furthermore, it is worth highlighting the Continente Loyalty card that continues to excel and represents more than 90% of sales during the year.

2015 was a very special year as Sonae MC celebrated 30 years since the establishment of the first hypermarket in Portugal. We are proud of this achievement, but more than proud we are excited about the next 30 years.

The first hypermarket store in Portugal opened 30 years ago

The first Continente store opened in 1985 at Matosinhos, starting a profound revolution in Portuguese society, in particular in consumer habits. For the first time, customers were able to satisfy all their needs in terms of food, toys or even bricolage, in only one specific place, instead of having to go to a number of different and small local grocery stores. The big store became an enjoyable place for families to go, and people grew used to the idea of doing their grocery shopping with their relatives.

Thirty years have passed, the shopping experience has continued to evolve and Continente continues to be at the forefront, providing the best emotional experience to do your shopping with family and friends. The brand evolved and it is now more modern and adapted to market trends, setting international practices that are recognised worldwide. Continente remains at the head of the revolution: with a huge investment in e-commerce, which gives access to a large amount of services that go beyond the physical store; with the creation of new store concepts; and with the use of a customer loyalty card in an effective sales promotion campaign.

Sonae MC is now in the process of strengthening Continente's internationalisation strategy. During 2015, Sonae MC exported its own brand products to more than 30 countries, a significant step in only a limited period of time. Sonae MC's products are now in Europe, North America, Asia, Africa and Oceania in a mixture of developed and rapidly growing countries. According to Luís Moutinho (CEO | Sonae MC) "Sonae continuously invests in innovation, research and development in order to strengthen the value proposition to its customers. The result of this commitment is that we offer our customers a wide portfolio of high quality products that are at the roots of our position as Portuguese market leader, particularly Continente products. The success of our brands and products now goes beyond our borders and captures the interest of other retailers around the world, leading to an accelerated growth of our export markets."

The IFA deal

Sonae MC has signed an affiliation agreement with the Spanish central purchasing body IFA Group. The agreement with effect from January 2016 onwards aims at promoting relevant trading and development opportunities. By joining the IFA Group, Sonae MC has access to a wider range of sourcing options, as it is able to differentiate the value proposition for its customers, in particular regarding variety and innovation. This agreement will also be an important avenue for the appreciation of Sonae MC's portfolio of own brands, to the extent that it will explore very interesting internationalisation opportunities in the Spanish market and provide to our current partners a new platform of potential business opportunities.

The IFA Group brings together more than 30 members, all leaders in their segments, representing more than 6,000 points of sale (3.2 million m2) and had a turnover exceeding 10 billion euro.

United Arab Emirates Franchising

Sonae MC's internationalisation strategy continuously identifies opportunities to explore its exceptional assets base and the unique innovation culture through capital light expansion models. Under this strategy, Sonae MC signed, in the second semester of 2015, a franchising deal with Fathima Group for the internationalisation of Sonae MC's operation to the United Arab Emirates, allowing the Continente insignia to be in the market by 2017. Fathima Group is a significant player with vast experience in the United Arab Emirates and surrounding regions and this partnership will allow the entrance in a highly promising market with a very strong partner with unique local expertise.

Sonae MC – 509 stores operated by the company and 237 stores under franchising generated a €3,490 M turnover in 2015.

Food retail businesses:

Continente – 40 hypermarkets (centrally located and more than half situated in leading shopping centres) – with an average area of approximately 7 thousand sqm and average Stock Keeping Units (SKUs) of 70 thousand. Nonfood area (typically light bazaar and textiles) representing less than 15% of total sales.

Continente Modelo – 123 supermarkets (+7 under franchising agreements), typically located in medium-sized population centres, with an average area of 2 thousand sqm and with the number of SKUs well above competitors. These supermarkets are based on location and convenience, with the light bazaar representing less than 10% of sales (no textiles offered).

Continente Bom Dia – 52 small, convenience food stores, with an average sales area of around 900 sqm. Renewed concept based on the quality and variety of fresh products, ideal for more frequent daily shopping.

Meu Super – 205 franchised local food stores, with areas between 150 and 500 sqm, located mainly in residential areas within large city centres. Sonae MC offers the franchisees store management support, a guaranteed competitive price and access to Continente's own brand label offer, as well as other suppliers' products.

Adjacent businesses

Bom Bocado / Bagga – 111 stores (+5 under franchising agreements), coffee shops and small snack-bars. Variety and quality with a fast service and great price.

Note! / Makenotes – 25 book stores (+5 under franchising agreement), stationery and tobacco.

Well's – 152 stores (+15 under franchising agreement) dedicated to parapharmacy, beauty products, health and well-being, eye glasses and optical services.

Improving the customers lifestyles but making shopping more convenient

Meu Super, the franchising food retail format, now have 205 stores and together with Continente Bom Dia, with 52 stores, are a key element in Sonae's strategy of creating a network of modern convenience stores, facilitating the shopping experience by adding stores within close proximity to customers and to our range of offers.

"Meu Super" is facilitating the revitalisation and modernisation of food retail in Portugal, allowing franchisees to adjust their businesses in order to meet customer needs, as well as allowing new entrepreneurs to enter the market benefiting from the skills and knowledge of Sonae MC.

Responsible for the creation of approximately 600 jobs, "Meu Super" stores are present in 18 districts of Portugal and also in Madeira. "Meu Super" stores are nearby, local food retail stores in residential areas, so that partners can benefit from the extra value of the concept, including the use of Continente's own label products.

Sonae MC is also expanding the network of "Continente Bom Dia" stores under its new store concept, ending 2015 with 52 stores, 11 additional stores when compared to 2014. This format is focused on a closer proximity and relationship with customers. "Continente Bom Dia" aims at bringing back the habit of local shopping of fresh products and to create a friendly atmosphere to its customers, including

an open space coffee shop that allows for a new shopping experience that customers can add to their everyday routines.

For Sonae MC, these two concepts complement and contribute to the modernisation of traditional commerce. Despite the differences between the two formats, each of the concepts has a value proposition based on proximity, appealing promotional campaigns and a quality of service of reference, embedded by the awareness of Sonae brand.

Turnover and Underlying EBITDA – yearly performance

Yearly performance
2012	2013	2014	2015
-2.0%	1.4%	-2.1%	-1.7%
-1.4%	4.1%	1.3%	0.8%

MC turnover stood at €3,490 M in 2015, an increase of 0.8% when compared to 2014. This turnover growth was reached through the opening of 11 Continente Bom Dia stores, 2 Continente Modelo stores and 65 Meu Super stores, the franchising model for food retail. This expansion of the store network not only benefited turnover performance but also contributed towards increasing MC's exposure to convenience stores.

MC LfL performance totalled -1.7% in 2015, backed by a strong 4Q15, during which turnover grew by 1.8% and LfL sales inverted their increasing downward trend.

MC underlying EBITDA margin stood at 6.2% in 2015, corresponding to an underlying EBITDA of €215 M.

As in previous years, the food retail market continued to be highly competitive in 2015, thus improving and reinforcing the value proposition of the business was key for MC. The company took several initiatives to improve perception levels by the costumers' community: emphasis was made in reducing the gap between perceived and real prices, in order to strengthen the leadership at this attribute, as well as increasing the quality perception of perishables, namely meat, fruit and vegetables. In addition, MC has continued to implement efficiency measures, as part of a continuous improvement programme that partially explains MC's reference EBITDA margin.

Turnover and Und. EBITDA – quarterly performance

During 2015, MC reached an important number of objectives on various fronts, of which MC would like to highlight the following:

international expansion: in 2015 the first international agreement through franchising was signed, with the Fathima Group, in order to establish Continente hypermarkets in the United Arab Emirates by 2017. At the same time, MC own brands wholesale activity continued to grow, reaching approximately 30 different countries by the end of the year;
improvement of store concepts: MC has been carrying out important refurbishments so as to implement the "2020 hypermarket of the future" concept, with 8 out of 40 hypermarkets partially or totally renewed as of December 2015. Besides this, MC has also designed a new store concept for Continente Bom Dia stores, which has been implemented in new and refurbished stores.

Sonae SR

Sonae SR, the specialised retail unit, covers the categories of electronics, sports and fashion. Sonae SR's operations performed differently in 2015, but the overall performance was very positive. The electronics retail segment is delivering strong results and it is taking significant steps towards strengthening its market position in Spain. In the sports and fashion segment, Sport Zone and Zippy have consolidated their turnaround and are delivering a robust performance, while MO's consolidation has been slower than expected mostly due to unexpected operational problems that have now been overcome and MO should be back on track.

Sonae SR's diversification raises added difficulties in adjusting to different market trends, but Sonae SR is taking steps to fine-tune its structures so that it can better adjust its strategies and deliver a more specialised performance in each segment and a solid value added offer to the customers. Sonae SR efforts continue to excel and its brands are highly valued by the customers. Zippy, Worten and Sport Zone have been recognised as a Brand of Trust and Worten has also been distinguished as a Superbrand.

Worten's new image in Spain

With the clear objective of strengthening its commitment to the Spanish market and accelerating its growth in the distribution sector of consumer electronics and appliances, Worten presents a new strategy that includes a complete image makeover, including new communication and business strategies.

Worten's new image is a more innovative, customer friendly, personal and modern proposal and it will be visible in all Worten stores, as well as gradually on its website. Under the concept "Technology for all", the new brand has the clear goal of bringing technology to everyone so that their daily lives become easier. Worten products are targeted at a wide-ranging audience, involving all ages because technology is for everyone, however it does not lose its main focus that is to be a benchmark retailer with a broad portfolio of products and competitive prices.

In addition, to the concept of a different and innovative store that provides people with a unique shopping experience which will be developed in all of shopping centres, Worten is investing in their e-commerce segment, namely in the Omni-channel technology.

OMNI-CHANNEL – Our clients are at the centre of our strategy

Sonae SR has developed a new model that explores the complementarity between physical stores and alternative channels to offer each customer the opportunity to select and buy products in comfort and at whatever time is most convenient. In order to provide a better service to customers, stores are focused on offering a distinctive service, with a range of products increased through the digital catalogues and specialised customer support. Furthermore, stores operate in conjunction with online platforms.

The increasing use of technology and the growing weight of online purchases, along with the webrooming phenomenon, lead Sonae SR to adopt omni-channel strategies and to change its business model.

This innovative model was implemented in Worten, with a special focus on e-commerce, where the opening of the new stores was complemented with online shopping services, taking the brand everywhere. Omi-channels are a key factor in Sonae SR's strategy and the company will continue investing in their development, especially with the growth of touch terminals and big screens in-store.

The excellence of the omni-channel strategy has been confirmed by Worten achievements. 2015 was an important year to Worten, reaching relevant milestones, namely the launching of a new website platform in Spain (soon to be deployed in Portugal) and the rollout of the "Sales Assistant Tool" to all physical stores as well as the development of order management and fulfilment integration across channels.

The omni-channel represents 21.4% of Worten sales and grew by 33.5% during 2015, with approximately 25% of online sales being delivered to physical store (through "click and collect" tool). The "Sales Assistant Tool" tool, allowing access to full Worten range from any store, has a significant impact and represents more than 20% of total turnover.

Worten's new concept store in Sant Antoni, Barcelona

In October 2015, Worten opened its doors in Sant Antoni, Barcelona. This new 1,300 sqm store is the most modern and innovative one in the market, and the most ambitious for Sonae SR. Worten is implementing its new concept of bringing the newest pieces of technology to its customers with the advantage of offering very competitive prices. The combination of urban structures, a modern design and the constant presence of innovative features that improve the customer's experience makes the Worten store in Sant Antoni one of a kind. This shop offers customers the chance to enjoy technology in a unique setting and with the best prices. The store's goal is to facilitate people's access to products, both physically and virtually through the Omni-channel technology. Touchscreen terminals and big screens are present in the store providing a more visual experience.

This new and revolutionary space is organised in five different segments, namely "Fun Cooking", "Living Room", "Office Zone", "Smart Life" and "Home". Apart from these five categories, the store has its "Worten Solutions" segment, the aim of which is to provide its customers with specialised help. The new store is part of a significant investment the company is making in Catalonia.

Zippy's new store concept

ZIPPY has introduced a new store concept based on the strategy of an increased customer friendly store, through the introduction of new technologies and

interactive screens, and by the implementation of distinguished elements that improve the buying experience, making it enjoyable for both children and parents. The main goal is to invigorate the store environment with energy and life and to capture the imagination and creativity of children, whilst inspiring and facilitating the parent's needs.

Zippy's new store offers an interactive experience and differentiated elements like "pockets of fun" games to entertain children while parents enjoy their shopping experience. Children can look forward to a new adventure every time they visit ZIPPY. These adventures include passing through secret tunnels that only they are aware of or filling their own balloons with the help of a friendly monster. Additionally, when parents are finalising their purchase, children will also receive a special 'ticket' with funny activities and draws to colour in.

This store concept increases the level of interaction between Zippy brand and customers and incorporates innovative services for parents, such as personalised childcare support sessions, pregnancy workshops, shopping lists from birth, among others.

MO's new website

In 2015, MO launched its new online store and it is now linked to market trends and ready to be a more competitive brand. In 2015, the website registered more than 1 million visits and more than 11,000 transactions were made, most of them in cities in which MO does not have a strong physical presence, showing a clear signal that the brand recognition is increasing.

MO's website was completely revamped bearing in mind its usability and with the intention of giving more visibility to its portfolio of products. 2016 will be a year of growth and of adaptation to the new buyer trends and MO will focus on the optimisation of the website to mobile technology.

SPORT ZONE – A reference in Iberia

After developing and launching the new store concept (4G) in 2013 and the expansion of the test base to 5 stores in 2014, 2015 was the year to assess the performance of the change and to decide to go ahead or not with the roll-out phase. The results were very positive, both in the store performance and also from customer enquiries, and Sport Zone decided to accelerate the refurbishment of additional stores and also to introduce this new 4G concept to Spain, which will take place in early 2016.

Sport Zone is the market leader for sports retail in Portugal and aims to become a Sports Retail reference in the

Iberian market. As such, Sport Zone is concentrating most of its efforts to bring its differentiated store experience to even more customers in Portugal, as well as doing its utmost to increase its footprint in Spain through an ambitious expansion plan.

Sonae SR international expansion has been particularly evident through its new franchising models: Sonae SR has bolstered MO's international presence by opening its first two stores in Saudi Arabia. This expansion means the brand can now be found in four countries outside of Portugal and marks its entry into the Middle East, where Sonae was already present with its Zippy brand. MO has entered Saudi Arabia through a franchising agreement with the Fawaz Alhokair Group, which expects to open 20 MO stores in the region within the next five years. Miguel Mota Freitas (CEO | Sonae SR) commented: "MO's entry into Saudi Arabia is another important step on this path as it marks the beginning of expansion to a region where Zippy now holds a benchmark position and where we believe MO has the potential to flourish, benefiting from its quality products at attractive prices and an ability to adapt to the local market".

Sport Zone has arrived in France: another outstanding example of Sonae SR multinational dimension and drive towards international expansion.

Sonae SR has also strengthened its international hold further through the establishment of an additional number of Zippy stores in various countries world-wide namely Georgia, Ecuador, Central America, Philippines, Mozambique and Tunisia.

This reinforces Sonae's growth strategy, promoting its brands by exploring competitive advantages and alternative growth paths through such channels as partnerships, franchising or exports.

Turnover and Und. EBITDA – quarterly performance

Performance per geographic area

	2014	2015	y.o.y	4Q14	4Q15	y.o.y
Turnover (million €)	1,290	1,294	0.4%	376	377	0.2%
Portugal	930	917	-1.5%	278	278	0.2%
International	359	378	5.1%	99	99	0.2%
EBITDA (million €)	12	5	-55.1%	15	14	-5.4%
Portugal	48	37	-24.3%	24	22	-10.9%
International	-36	-31	13.9%	-9	-7	-20.0%
EBITDA margin (%)	0.9%	0.4%	-0.5 p.p.	4.0%	3.8%	-0.2 p.p.
Portugal	5.2%	4.0%	-1.2 p.p.	8.8%	7.8%	-1.0 p.p.
International	-10.1%	-8.3%	1.8 p.p.	-9.3%	-7.4%	1.9 p.p.
LfL (%)	4.6%	-1.1%	-	-1.2%	-0.1%	-
Portugal	5.5%	-2.0%	-	-0.8%	0.3%	-
International	0.8%	2.4%	-	-3.3%	-1.7%	-

SR turnover reached €1,294 M in 2015, increasing 0.4% when compared to 2014, driven by the positive impact of the International unit, which has more than compensated for the Portuguese unit.

The International unit benefited from the performance of Worten and Sport Zone in Spain. With regard to SR Portuguese unit, turnover decreased by 1.5% in 2015, largely due to the sports and fashion division, mostly impacted by the weak Spring/Summer season in MO and Zippy and the unfavourable winter weather conditions, which affected the sector at large.

It is also worth noting, SR's sales per square metre continued improving, averaging 4.1% in 2015, particularly driven by the impact from Spanish units. New stores concepts and formats are contributing significantly to this evolution, sustaining a positive sales trend despite square metre reduction.

SR EBITDA stood at €5 M, corresponding to an EBITDA margin of 0.4%. This has benefited from improved results in the Spanish operations both at Worten and at Sport Zone, which ended 2015, registering an EBITDA breakeven (before central fees), notwithstanding the impact of the negative performance of Zippy and the consequent restructuring of this format in Spain. In Portugal, EBITDA decreased to €37 M, driven by lower top line performance, coupled with the adverse exchange-rate effects related to raw-materials and products purchased in dollars.

Some of the most significant milestones in 2015 were:

Worten was able to improve EBITDA in Spain. Besides the improved macroeconomic conditions in the country, the operation is recovering due to the measures adopted over the last quarters, which include the optimisation of the store network and the expansion of a new store concept, supported by an omni-channel approach;
Zippy continued to expand its international footprint under a capital light approach. In 2015, the company entered Ecuador, Cyprus, Kurdistan, Libya, Tunisia and the Philippines, ending 2015 with 50 stores spread across 22 countries;
the acquisition of Losan, in November 2015, a company based in Spain with a strong international presence specialised in wholesale kids wear. This acquisition will allow SR to strengthen its wholesale and supply chain competencies.

Turnover and Underlying EBITDA – yearly performance

Sonae RP

Sonae RP, the retail real estate business area, was set up to actively manage Sonae's retail real estate properties, comprising of stores mainly operated under Sonae MC and Sonae SR businesses. Sonae RP has developed strong expertise in this market, and is already a recognised partner by major national and international investors. Sonae RP's activity focuses on asset management, namely identifying property development opportunities and planning to release invested capital, through a decrease in the level of freehold ownership of the retail sales area, mostly in the food business. Following the sale and leaseback transactions announced in 1Q16, Sonae MC and Sonae SR freehold levels decreased to 55% and 23% respectively.

Turnover and Underlying EBITDA
Million euros	2014	2015	y.o.y.	4Q14	4Q15	y.o.y.
Turnover	126	121	-4.0%	32	29	-8.6%
Underlying EBITDA	116	109	-6.3%	31	26	-15.8%
Underlying EBITDA margin	92.2%	90.0%	-2.2 p.p.	97.3%	89.6%	-7.7 p.p.

RP turnover decreased 4.0%, to €121 M, driven by a freehold reduction at MC, from 73% in 2014, to 62% at the end of 2015. The underlying EBITDA amounted to €109 M, corresponding to an underlying EBITDA margin of 90.0%.

Net book value of the capital invested in MC, SR and IM real estate assets amounted, at the end of 2015, to €1,047 bn. RP EBIT ROCE stood at 12%.

As duly reported to the market, RP has been monetising its real estate assets in line with the strategy set in terms of freehold ownership. In 2015, the sale and leaseback transactions completed stood at €185 M, with a capital gain of approximately €40 M.

Already in the 1Q16, RP completed the sale and leaseback transaction of 12 food retail assets located in Portugal amounting to €164 M with an estimated capital gain of €40 M. Additionally it was also announced the sale and leaseback transaction of 3 Worten stores in Spain, totalling 26.8 million euros.

Following these transactions, MC's freehold reached 55%, corresponding to a portfolio that includes 23 Continente stores, 65 Continente Modelo stores and 16 Continente Bom Dia stores, while SR's freehold decreased to 23%.

Sonae FS

Sonae FS is a new business segment that has been created to foster financial services. It includes the recently created "Universo" card, "Dá" card, Continente Money Transfer and Cross-Selling over store credit. Following the granting of a licence from Banco de Portugal, to operate as an electronic money and payment institution, Sonae FS created the "Universo" card in order to deliver payment services and issue credit cards. Sonae FS was designated as a Mastercard principal issuer, which allows us to issue our own brand of Mastercard cards. The structure for this new segment has been created, but its operational and financial reporting will only start in 2016.

Universo Card

First and foremost, the "Universo" Card is the natural evolution from existing loyalty cards of Sonae MC and Sonae SR formats. Adding value by merging all the benefits of loyalty cards into a single card that also has the dimension of a Mastercard credit card, with all the benefits

associated to this.

Sonae FS has set goals concerning all its strategic initiatives and it have raised the bar here so that it is:

The preferred payment card, offering the maximum benefits at the best price in the market
Widely used outside Sonae, becoming the card which is top-of-wallet card, especially for Sonae customers
The preferred mode of payment in Sonae's stores and tendentiously the only credit vehicle at the point of sale, assisting the sales of Sonae's brand
Allows its users transparent access to all loyalty programmes in place in Sonae retail, with the brands maintaining the ability to know and explore their customer base autonomously

Card Dá

Cross-selling over store credit

A pre-paid card accepted in a network of more than 1,000 stores both in Portugal and Spain.

Cross-selling of credit insurance and personal loans to store credit customers.

A service for money transfers across the globe at our stores, at the customer's convenience.

Continente Money Transfer

Sonae IM

Sonae IM creates value for Sonae supporting the implementation of corporate and business strategies, maximising shareholder return on its portfolio of companies, actively supporting the planning and execution of mergers and acquisitions and strengthening the network of Sonae's business contacts with other companies, consultants and investment banks.

Currently Sonae IM's business portfolio includes Bizdirect, Saphety, Wedo Technologies and S21sec (Telecommunications Technology), Movvo (Retail Technology), Maxmat (DIY and building materials), MDS (insurance broker), Tlantic (retail software) and Público (Media).

than 500 highly-skilled professionals.

data and media synchronisation for GS1 MO's worldwide.

WeDo Technologies is a worldwide leader in Enterprise Business Assurance, providing software and expert consultancy, to intelligently analyse large quantities of data from across an organisation helping to negate or minimise operational or business inefficiencies and allowing businesses to achieve significant return on investment via revenue protection and/or cost savings. WeDo Technologies works with some of the world's leading blue chip companies from the retail, energy, insurance and healthcare industries, as well as more than 180 telecommunications operators from more than 90 countries, through more

Bizdirect is a reference player in commercialising IT solutions, in corporate contract management and in the integration of Microsoft technology business solutions. With more than 500 active clients, Bizdirect exports services to 28 countries, and is renowned for the quality of its value-added IT solutions. The solutions proposed by Bizdirect include CRM, collaboration portals and Microsoft BizTalk, which is a solid application integration tool allowing data circulation and transfer between different systems.

S21sec – Keeping your data safe

S21sec offers an extensive range of products and services to ensure secure information systems within organisations. In broad terms, its emphasis is placed on R&D and its continuous improvement targets contribute to attaining a high and demanding level of quality for all of its services. All S21sec services encompass the entire security cycle, minimising risks as much as possible in information systems.

	Compliance Assessment Ecrime		Intelligence CERT
1)		B	(0)	(0)

Movvo - Understanding shopper behaviour

Movvo is a real time information system that gathers information by capturing radio frequencies emitted by mobile devices. The solution developed by former researchers of the University of Porto in collaboration with Sonae Sierra is intended for retail in general, theme parks, airports, smart cities, transport operators and metropolitan authorities.

Tlantic – Software for retail

Established in 2004 in Brazil, Tlantic focuses on achieving higher levels of optimisation and improving the management efficiency of retail stores. Tlantic offers a comprehensive set of software solutions covering different dimensions of store management, such as the front of the store, where there is contact between store colleagues and customers, for logistics and for the management of human resources.

Tlantic's software collects information, crosses data and sends it to store colleagues so that they can improve not only the store operation but also the customer relationship. It's available on PDAs, smartphones and tablets.

Maxmat is a hard-discount company, the leader in DIY, construction, bath and garden market prices. MaxMat's business model is based on a wide product range offering an appropriate selection for different needs, from private to major projects of small and medium enterprises.

MDS is a partnership with the Suzano Group (Brazil) and is one of the world's most attractive modern brokerage groups. MDS focuses on serving clients with insurance products and services that excel in efficacy, convenience, and value.

Its dominant presence in Portugal and Brazil speaks of its lengthy tradition of improving the field of insurance in the Latin world. MDS Portugal is the largest

broker in the nation, while the Brazilian branch ranks in the top 3 brokers in the country and employs four hundred professionals across twelve offices. MDS was one of the founders of the highly successful international brokerage network Brokerslink, which today is ranked among the largest independent insurance broker networks in the world. The leadership MDS demonstrates, as a part of Brokerslink, helps to forge important new partnerships, while our access to some of the world's most highly specialised insurance services means we are better able to serve our clients.

Público is the major daily newspaper in the country with a strong printed and digital presence and has celebrated in 2015 its 25th anniversary.

Público was awarded the European Newspaper of the Year in the category of nationwide newspapers by the European Newspapers Congress in 2014. In 2015, Público was awarded with 14 prizes of journalism, design, photography and infographic design, including a special mention in the category of best news site by the European Digital Media Awards, only behind The Guardian.

IM portfolio Technology						IM turnover reached €249 M, decreasing 1.1% when
						compared to 2014. IM underlying EBITDA amounted to
WeDo Technologies Bizdirect Saphety S21Sec						€16 M, which translates into an underlying EBITDA
							margin of 6.5%.
Movvo							Some of the most important milestones of IM in 2015
Partnerships							are:
MDS			Tlantic				- WeDo Technologies: during the year Frost & Sullivan
Maxmat			Público				proclaimed WeDo Technologies as the worldwide
							leader in the area of Financial Assurance (comprising
							of Revenue Assurance, Fraud Management and Margin
Turnover and underlying EBITDA							Assurance) and Analysys Mason as the worldwide
Million euros	2014	2015	y.o.y.	4Q14	4Q15	y.o.y.
Turnover	252	249	-1.1%	66	62	-5.8%	market leader in the Telecom Revenue Assurance and
Underlying EBITDA	19	16	-14.3%	8	7	-7.0%	Fraud Management software space;
Underlying EBITDA margin	7.5%	6.5%	-1.0 p.p.	11.6%	11.5%	-0.1 p.p.	- S21Sec: continued to consolidate its presence in the
							cybersecurity market. The company was amongst the
							first companies in the world to identify Dridex (a
							banking malware) and to understand its sophisticated
							nature. This has become a key element in collaborating
							with Law Enforcement Agencies such as Europol, NCA,
							Guardia Civil and the FBI. Beyond the Law Enforcement

Turnover and underlying EBITDA
Million euros	2014	2015	y.o.y.	4Q14	4Q15	y.o.y.
Turnover	252	249	-1.1%	66	62	-5.8%
Underlying EBITDA	19	16	-14.3%	8	7	-7.0%
Underlying EBITDA margin	7.5%	6.5%	-1.0 p.p.	11.6%	11.5%	-0.1 p.p.

WeDo Technologies: during the year Frost & Sullivan proclaimed WeDo Technologies as the worldwide leader in the area of Financial Assurance (comprising of Revenue Assurance, Fraud Management and Margin Assurance) and Analysys Mason as the worldwide market leader in the Telecom Revenue Assurance and Fraud Management software space;
S21Sec: continued to consolidate its presence in the cybersecurity market. The company was amongst the first companies in the world to identify Dridex (a banking malware) and to understand its sophisticated nature. This has become a key element in collaborating with Law Enforcement Agencies such as Europol, NCA,

Turnover and Underlying EBITDA – yearly performance community, S21sec has also been supporting the

financial community;

Saphety: recorded significant improvements in revenues and profitability in 2015, coupled with good commercial activity. International expansion continued to grow and international revenues represented more than 30% of total revenues in 2015;
Bizdirect: increased the number of projects delivered and increased turnover by 8.7% in 2015;
Movvo: continued its internationalisation efforts and reached important goals in the UK and Asia.

In relation to IM partnerships, MDS was able to increase EBITDA despite the unfavourable currency exchange effects and Maxmat increased both turnover and EBITDA in 2015. Tlantic turnover was below last year's, on the back of a challenging fourth quarter and the company's refocus is on the new product designed for small and medium-sized enterprises. Additionally, IM completed the sale of its 100% position in GeoStar to Springwater Tourism in October 2015.

Sonae Sierra

Sonae owns 50% of Sonae Sierra, an international property company, dedicated to serving the needs of retail real estate investors. Sonae Sierra invest in retail assets and provide services on investment, development, expansion and property management for clients in geographies as diverse as Europe, South America, North Africa and Asia.

Sonae Sierra delivered another stellar performance in 2015, pursuing several development projects in Colombia (Cucuta), Morocco (Shopping Centre Zenata), Romania (ParkLake in Bucharest) and Spain (Designer Outlet in Malaga), among others. Additionally, Sonae Sierra celebrated new shopping centre management contracts in several countries such as Germany, Italy, Romania, Spain and Turkey.

The environment always comes first

As a leading player in shopping centre development and management, Sonae Sierra adheres to the highest environmental standards and continuously focuses on

environmental innovation.

Our efforts have received many honours and we are pleased to be the recipients of the Forbes Green Awards for our environmental strategy implementation in the project ParkLake and River Plaza Mall, Romania.

Operational indicators
	2014	2015	y.o.y.
Footfall (million visitors)	440	433	-1.6%
Europe & New Markets	329	326	-0.8%
Brazil	111	107	-3.7%
Ocuppancy rate (%)	95.5%	95.2%	-0.3 p.p.
Europe	95.7%	96.1%	0.5 p.p.
Brazil	95.1%	92.6%	-2.5 p.p.
Like-for-Like (LfL) tenant sales
Europe	3.3%	3.1%	-
Brazil (local currency)	8.4%	2.8%	-
Tenant sales (million euros)	4,617	4,501	-2.5%
Europe (million euros)	3,119	3,182	2.0%
Brazil (million euros)	1,498	1,319	-11.9%
Brazil (million reais)	4,673	4,806	2.8%
Nº of shopping centres owned/co owned (EOP)	46	45	-1
Europe	36	35	-1
Brazil	10	10	0
GLA under Management ('000 sqm)	2,307	2,273	-1.5%
Europe & New Markets	1,788	1,742	-2.6%
Brazil	519	531	2.3%

Financial indicators
Million euros	2014	2015	y.o.y.	4Q14	4Q15	y.o.y.
Turnover	226	226	0.0%	62		64 2.7%
EBIT	106	105	-1.0%	30		29 -2.9%
EBIT margin	47.0%	46.6%	-0.4 p.p.	47.7%	44.9%	-2.8 p.p.
Direct results	53	61	15.7%	17		19 11.8%
Indirect results	44	81	85.0%	20		28 42.2%
Net results	96	142	47.1%	37		47 28.3%
… attributable to Sonae	48	71	47.1%	18		23 28.3%

During 2015, tenant sales in Europe increased 2.0%, to €3,182 M, corresponding to an increase in LfL tenant sales of 3.1% and reinforcing the positive performance delivered throughout 2015. The tenant sales in Brazil increased 2.8% in reais, decreasing 11.9% in euros, entirely due to the depreciation of the Brazilian Real.

Occupancy rates stood at 95.2%, slightly below the level registered in 2014, completely driven by the operation in Brazil, a consequence of the current deceleration in private consumption, notwithstanding the positive performance of the more recent shopping malls.

Sierra's turnover reached €226 M, posting a neutral evolution when compared to 2014, despite the adverse exchange rate effect concerning the Brazilian Real against the Euro and the adverse effect of disposals. The EBIT stood at €105 M, less 1.0% y.o.y., corresponding to an EBIT margin of 46.6%.

Direct results amounted to €61 M, €8 M above 2014 and indirect results almost doubled, totalling €81 M and benefitting from the assets valuation which occurred in 2015. On average, the yields compression continued to benefit Sierra's indirect results, particularly in Iberia. Net results totalled €142 M, growing 47.1% y.o.y..

On 31st December 2015, the Investment and Development Properties attributable to Sierra reached €2,128 bn, €48 M above the 2014 year-end, driven by the investment in the pipeline of projects under development, as the increase in the valuations in Europe was totally off-set by the adverse exchange rate effect in the Brazilian portfolio and the disposals of Torre Colombo Ocidente and Zubiarte. Sierra currently has a significant number of projects under development, of which we would like to highlight the following: the shopping centre Parklake, in Romania, which has more than 93% of its GLA already let and/or committed and is scheduled to be inaugurated in 2016; the development of the shopping centre Zenata, in Morocco, and the Designer Outlet, in Spain, both scheduled to be inaugurated in 2017; and the first

(1) Includes investment properties at open market value and development properties at cost.

investment in Colombia, through the acquisition of a site in Cucuta.

NAV (Net Asset Value) reached €1,180 bn at the end of 2015, €65 M above December 2014, impacted by the adverse exchange rate effect on the Brazilian assets, which partially off-set the strong net results of the period.

Loan-to-value reached 40% in 2015, compared to a value of 42% in 2014 and 44% in 2013.

NOS

NOS continues its track record of success. NOS is the most active and the fastest growing player in the market, continuously delivering an outstanding and solid performance at all levels. NOS is held by Sonaecom, which holds a co-controlling influence at the company, with a participation of 25% through Zopt. Additionally, Sonaecom also has a direct participation of 2.14% at NOS.

NOS is a telecommunications and entertainment group which offers a wide range of telecommunication services to all market segments (residential, personal, corporate and wholesale), with a leading position in Pay TV, Next Generation Broadband services and in cinema film exhibition and distribution in Portugal.

NOS has 4.12 million mobile phone customers, 1.54 million television customers, 1.6 fixed telephone and 1.145 million fixed broadband Internet customers. NOS offers the latest generation television, the fastest internet, unlimited telephone and mobile phone network, as well as a 4G network for mobile phones, covering 90% of the Portuguese population, and free internet at more than 700 thousand hotspots in Portugal and 14 million hotspots across the world. In addition, NOS operates more than 200 cinemas in Portugal.

NOS is listed on the main Portuguese stock exchange index (PSI-20), with capitalisation in excess of 3,732 million Euros. In 2015, NOS generated operating revenues of 1,440 million euros, EBITDA of 533.1 million euros, net profits of 82.7 million euros and EBITDA-CAPEX of 408.3 million euros.

Financial Indicators
Million euros	2014	2015	y.o.y.	4Q14	4Q15	y.o.y.
Operating revenues	1,384	1,444	4.4%	354	376	6.4%
EBITDA	511	533	4.4%	114	123	8.6%
EBITDA margin	36.9%	36.9%	0.0 p.p.	32.1%	32.7%	0.7 p.p.
Net results	75	83	10.7%	12	9	-25.1%
Capex	374	408	9.0%	143	114	-20.2%
EBITDA - Capex	136	125	-8.2%	-29	10	-
Recurrent Capex	276	297	7.8%	83	80	-4.1%
EBITDA-Recurrent Capex	235	236	0.5%	30	44	43.4%

Operational Indicators
('000)	2014	2015	y.o.y.	4Q14	4Q15	y.o.y.
Total RGUs (Net adds)	398		833 109.6%	165	187	12.8%
Convergent RGUs (Net adds)	1,641	1,000	-39.0%	366	189	-48.4%
Mobile (Net adds)	400	480	20.0%	107	98	-8.8%
Pay TV (Net adds)	-41	67	-	7	22	-
Total RGUs	7,611	8,444	10.9%	7,611	8,444	10.9%
Convergent RGUs	1,853	2,854	54.0%	1,853	2,854	54.0%
Convergent customers	385	591	53.6%	385	591	53.6%
ARPU/Unique subscriber with fixed access (euros)	38	42	10.8%	40	43	7.8%

The operating revenues increased 4.4% y.o.y to €1,444 M, in 2015. It should be noted that operating revenues increasing y.o.y. trend accelerated throughout the year, to 6.4% in the 4Q15, up from 2.0%, 3.2% and 5.8% y.o.y. in the 1Q15, the 2Q15 and the 3Q15 respectively.

EBITDA registered €533 M, improving 4.4% when compared to 2014 and benefiting from the 8.6% y.o.y. growth registered in the 4Q15.

CAPEX stood at €408 M in 2015, +9.0% y.o.y., on the back of higher telco growth related investment.

NOS reached, this year, a record RGU growth across all services. Total RGUs grew by 10.9%, to 8,444 M and convergent RGUs increased to 2,854 M, +54.0% y.o.y..

ARPU continued to grow, reaching 42.3 euros in 2015, increasing 10.8% when compared to 2014.

Following the merger between Optimus and Zon, and the subsequent creation of NOS, since September 9th 2013, the day when new shares issued were listed, to December 31st 2015, the company's market capitalisation has grown 70%, corresponding to a share price increase from €4.27 to €7.25.

The PSI20, the main Portuguese index, decreased its market capitalisation 11% in the same period.

Outlook for 2016

The changes implemented in the organisational structure, aimed at having more focused and agile teams, will continue to support the execution of our portfolio strategy throughout 2016.

MC will be dedicated to defending its leadership position in the Portuguese market by reinforcing the winning attributes of its formats mostly in terms of price and range. MC believes that there are the necessary conditions to maintain the positive trend in sales evolution and to keep a comfortable level of profitability.

SR will continue its internationalisation efforts, following its strategic guidelines. In electronics, both in Portugal and in Spain, the company will pursue the omni-channel approach for well-located stores, which will help to drive the trends already witnessed throughout 2015. The sports and fashion division will continue to reinforce their competitive positions particularly with the renewed store concepts. The recent acquisition of Losan, besides improving the division's supply chain competencies, will have a positive contribution to the wholesale business.

Sierra will continue to follow the strategy of greater exposure to new development opportunities, asset valuation and provision of services to third parties. Moreover, it is expected to continue presenting a solid operating performance, an achievement that clearly reflects the quality of our assets, which is also expected to be reflected in further yield compression especially for the Iberian market.

At NOS, the results reached in 2015 are a strong indication that the company will continue to reinforce its competitive position in the Portuguese telecommunications market.

Information on shareholdings and share performance

* BPI stake includes Equity swap of circa 119 million shares (~6% of share capital).

Sonae shares are quoted on the Portuguese stock exchange, NYSE Euronext Lisbon, and are included in several indices, including the PSI-20, with a market cap weighting of 4.7%, as at the end of December 2015. The table below shows the key indicators of Sonae's share performance.

	2013	2014	2015
ISIN code		PTSON0AM0001
BLOOMERG code		SON PL
REUTERS code		SONP.IN
Share capital	2,000,000,000	2,000,000,000	2,000,000,000
Prices
Year close	1.049	1.024	1.048
Year high	1.110	1.419	1.500
Year low	0.664	0.942	1.024
Avg. trading volume per day (shares)	2,645,077	3,786,300	3,652,518
Average trading volume per day (€)	2,271,751	4,518,003	4,417,704
Market cap. as at 31st Dec (M€)	2,098	2,048	2,096

Sonae's shares ended the year 2015 quoted at 1.048 euro, reflecting a nominal increase of 2.3% during the year, which compares with an increase of approximately 10.7% of the reference index of the Portuguese Stock Market – the PSI-20. The trading volume decreased slightly as Sonae's average in 2015 was approximately 3.7 million shares per day.

During 2015, regarding transactions with its own shares:

Sonae acquired through the Euronext Lisbon Stock Exchange 118,820 own shares at an average price of 1.173 euros per share on January 28th 2015;
Sonae sold 4,817,167 own shares to its subsidiaries at an average price of 1.278 euros per share; and sold 862,399 own shares to its Directors at an average price of 0.064 euros per share. Pursuant to the company's remuneration policy, this is equivalent to the amount of their contribution in the acquisition of shares, calculated considering a maximum of 5% of Sonae share price at the date of the attribution.

These transactions were aimed at fulfilling the obligations arising from the remuneration policy adopted by the company and its subsidiaries.

As of 31 December 2015, Sonae owned directly zero own shares and owned indirectly, through one of its subsidiaries, 137,859 own shares.

During 2015, the main announcements which had a possible impact on Sonae's share price, were as follows:

21.01.2015 - 2014 preliminary retail sales 11.03.2015 - 2014 annual results 07.05.2015 - 2015 first quarter results 11.05.2015 - Dividend payment for the year 2014 09.06.2015 - Sonae announced the completion of a bond issue 25.06.2015 - Sonae announced sale and leaseback operations 29.06.2015 - Sonae announced sale and leaseback operations 19.08.2015 - 2015 first semester results 27.10.2015 - Sonae announced affiliation agreement with the Spanish central purchasing body, IFA Group 28.10.2015 - Launching of Cartão Universo 05.11.2015 - 2015 first nine months results

19.11.2015 - Sonae announced the acquisition of Losan 29.12.2015 - Dividend payment for the year 2015

Distribution of free reserves in 2015

The Board of Directors proposed at the Shareholders' Extraordinary General Meeting held on December 16th 2015, the distribution of free reserves in the amount of €77 M. This proposal implied a gross dividend per share of 0.0385 euros, 5% above the dividend per share distributed in 2015 related to 2014 results.

This dividend corresponds to a dividend yield of 3.5%, based on the adjusted closing price as at December 31st 2015 (closing price + gross dividend per share), and to a payout ratio of 60.1% of the consolidated direct income attributable to equity holders of Sonae.

Subsequent events

On January 12th 2016, Sonae announced that MC launched Continente Negócios, an e-commerce platform completely dedicated to enterprise customers. This platform will offer more than 3,000 different products both from MC own brands as well as other supplier brands, including paper, stationery, equipment and technology, furniture or hygiene and cleanliness products.

On February 1st 2016, Sonae announced that RP made a sale and leaseback transaction of 12 food retail assets located in Portugal, with an estimated net book value of €114 M. The transaction amounted to €164 M.

On March 1st 2016, Sonae announced that RP made a sale and leaseback transaction of 3 Worten stores in Spain. This transaction totalled €27 M and was related to assets with an estimated net book value of €17 M.

On March 7th 2016, Sierra announced the sale of 25% of its stake in the Sierra Portugal Fund, to Madison International Realty. Following this transaction, Sierra retains a 22.5% stake in the Fund and will continue to manage both the Fund and the individual assets within it.

Individual net income of Sonae, SGPS, SA

Sonae, SGPS, SA operations, on a stand-alone basis, are essentially associated with the management of the share-holdings in its subsidiaries. In 2015, the individual net income of Sonae, SGPS, SA stood at negative 279,672,409.71 Euros.

Proposed allocation of the 2015 net income and dividend distribution

Under the terms of the law and the Articles of Association, the Board of Directors proposes to the Shareholders' General Meeting that the 2015 results, negative in the amount of 279,672,409.71 euros, be transferred to retained earnings. Considering the existence of free reserves in an amount sufficient to cover the negative retained earnings, it is additionally proposed that free reserves in the amount of 279,672,409.71 euros be used to cover such negative retained earnings.

CLOSING REMARKS AND GLOSSARY

IMPROVING LIFE

Closing remarks and acknowledgements

The Board of Directors would like to thank the Statutory Audit Board and the Statutory External Auditor for their valuable advice and assistance during 2015. The Board would also like to express its gratitude to suppliers, banks and other business associates of Sonae for their continuing involvement and for the confidence that they have shown in the organisation.

The Board of Directors also expresses its gratitude to all employees for their effort and dedication throughout the year.

Maia, March 15th 2016

The Board of Directors

Duarte Paulo Teixeira de Azevedo, Executive Chairman

Ângelo Gabriel Ribeirinho dos Santos Paupério, Executive Director
Andrew Eustace Clavering Campbell, Non-Executive Director

Christine Cross, Non-Executive Director

Dag Johan Skattum, Non-Executive Director

José Manuel Neves Adelino, Non-Executive Director

Marcelo Faria de Lima, Non-Executive Director

Margaret Lorraine Trainer, Non-Executive Director

Tsega Gebreyes, Non-Executive Director

Glossary

CAPEX	Investments in tangible and intangible assets and investments in acquisitions.

Direct result	Results excluding contributions to indirect results.

(Direct) EBIT	Direct EBT - financial results.
EBITDA	Underlying EBITDA + equity method results (Sonae Sierra direct results and ZOPT net income) + non-recurrent items.

EBITDA margin	EBITDA / Turnover.

(Direct) EBT	Direct results before non-controlling interests and taxes.

E&A (Eliminations & adjustments)	Intra-groups + consolidation adjustments + contributions from other companies not included in the identified segments.
EoP	End of period.
Free Cash Flow (FCF)	EBITDA - CAPEX - change in working capital - financial results - income taxes.

Financial net debt	Total net debt excluding shareholders' loans.
FMCG	Fast-Moving Consumer Goods.

Gearing (book value)	The average of the last four quarters considering, for each quarter, total net debt (EoP) / total shareholders' funds (EoP).

Gearing (market value)	The average of the last four quarters considering, for each quarter, total net debt (EoP) / equity value considering the closing price of Sonae shares at the last day of each quarter.

GLAs	Gross Lettable Area: equivalent to the total area available to be rented in the shopping centres.

Indirect result	Includes Sonae Sierra's results, net of taxes, arising from: (i) investment property valuations; (ii) capital gains (losses) on the sale of financial investments, joint ventures or associates; (iii) impairment losses of non-current assets (including goodwill) and (iv) provision for assets at risk. Additionally and concerning Sonae's portfolio, it incorporates: (i) impairments in retail real estate properties; (ii) reductions in goodwill; (iii) provisions (net of taxes) for possible future liabilities and impairments related with non-core financial investments, businesses, assets that were discontinued (or in a process of being discontinued/repositioned); (iv) results from mark to market methodology of other current investments that will be sold or exchanged in the near future; and (v) other non-relevant issues.
Investment properties	Shopping centres in operation owned and co-owned by Sonae Sierra.

Liquidity	Cash & equivalents + current investments, excluding the 2.14% participation at NOS.

Like for Like sales (LfL)	Sales made by stores that operated in both periods under the same conditions. Excludes stores opened, closed or which suffered major upgrade works in one of the periods.

Loan to value (LTV) - Holding	Holding Net debt / Investment portfolio gross asset value; gross asset value based on market multiples, real estate NAV and market capitalisation for listed companies.

Loan to value (LTV) - Shopping Centres	Net debt / (investment properties + properties under development).

LTM	Last twelve months.

Net asset value (NAV)	Open market value attributable to Sonae Sierra - net debt - minorities + deferred tax liabilities.

Net debt	Bonds + bank loans + other loans + financial leases + shareholder loans - cash, bank deposits, current investments, excluding the 2.14% participation at NOS, and other long-term financial applications.

Net invested capital	Total net debt + total shareholders' funds.

Other income	Dividends.
Other loans	Bonds, leasing and derivatives.

Open market value (OMV)	Fair value of properties in operation and under development (100%), provided by independent international entities.

Return on invested capital (RoIC)	EBIT (LTM) / net invested capital.
Return on equity (ROE)	Total net income n (equity holders) / shareholders' funds n-1 (equity holders).
RGU	Revenue generating unit.
Technical investment	Tangible assets + intangible assets + other fixed assets - depreciations and amortisations.
Underlying EBITDA	Recurrent EBITDA from the businesses consolidated using the full consolidation method

000000 0 0000 00000 0 0 (19) (19 0000 (19) C 10 C 0 P 2000 (100 ap

0000000

One of the

00000

APPENDIX

Statement under the terms of Article 245 Paragraph 1, c) of the Portuguese Securities Code

The signatories individually declare that, to their knowledge, the Management Report, the Consolidated and Individual Financial Statements and other accounting documents required by law or regulation were prepared meeting the standards of the applicable International Financial Reporting Standards, giving a truthful (fairly) and appropriate image, in all material respects, of the assets and liabilities, financial position and the consolidated and individual results of the issuer and that the Management Report faithfully describes the business evolution and position of the issuer and of the companies included in the consolidation perimeter and contains a description of the major risks and uncertainties that they face.

Maia, 15th March 2016

The Board of Directors

Duarte Paulo Teixeira de Azevedo, Executive Chairman

Ângelo Gabriel Ribeirinho dos Santos Paupério, Executive Director

Andrew Eustace Clavering Campbell, Non-Executive Director

Christine Cross, Non-Executive Director

Dag Johan Skattum, Non-Executive Director

José Manuel Neves Adelino, Non-Executive Director

Marcelo Faria de Lima, Non-Executive Director

Margaret Lorraine Trainer, Non-Executive Director

Tsega Gebreyes, Non-Executive Director

Article 447 of the Portuguese Companies Act and Article 14, paragraph 7, of the Portuguese Securities Commission (CMVM) Regulation nr. 05/2008

Disclosure of the number of held shares and other securities issued by the Company and of the transactions executed over such securities, during the financial year in analysis, by the members the statutory managing and auditing bodies and by people discharging managerial responsibilities ("dirigentes"), as well as by people closely connected with them pursuant to article 248 B of the Portuguese Securities Code:

		Additions		Reductions		Position at 31.12.2015	Balance as of 31.12.2015
	Date	Quantity	Aver. Price €	Quantity	Aver. Price €		Quantity
Duarte Paulo Teixeira de Azevedo () () (**) Efanor Investimentos, SGPS, SA (1) Migracom, SA (4) Sonae - SGPS, SA (3) Shares purchased under the terms of the Annual	19/05/2015	862,399	0.064			Minority Dominant	0
Performance Bonus Plan and Medium Term Incentive Plans Sale Sale Closely connected person	17/12/2015 28/12/2015			1,000,000 790,053	1.071 1.060		530 (a)
Ângelo Gabriel Ribeirinho dos Santos Paupério (*) Sonae - SGPS, SA (3) Shares purchased under the terms of the Annual Performance Bonus Plan and Medium Term Incentive Plans	18/05/2015	751,429	0.064				0
Sale Enxomil - SGPS, SA (10) Continente Bonds - 7% -2015 Reimbursement at maturity	23/12/2015 25/07/2015			1,521,855 150,000	1.077 1.000	Dominant	0 (b)
Belmiro Mendes de Azevedo (**) Efanor Investimentos, SGPS, SA (1) Continente Bonds - 7% -2015 Sale Reimbursement at maturity	09/01/2015 25/07/2015			300,000 576,990	1.025 1.000	Dominant	0
Maria Margarida Carvalhais Teixeira de Azevedo (**) Efanor Investimentos, SGPS, SA (1) Sonae - SGPS, SA (3)						Minoritary	14,901
Maria Cláudia Teixeira de Azevedo () (*) Efanor Investimentos, SGPS, SA (1) Sonae - SGPS, SA (3) Shares purchased under the terms of the Annual						Minoritary	204,678
Performance Bonus Plan and Medium Term Incentive Plans Sale Sale Linhacom, SGPS, SA (6)	18/05/2015 18/05/2015 19/05/2015	195,183	0.064	195,000 183	1.260 1.260	Dominant

		Additions		Reductions		Position at 31.12.2015	Balance as of 31.12.2015
	Date	Quantity	Aver. Price €	Quantity	Aver. Price €		Quantity
(1) Efanor Investimentos, SGPS, SA Sonae - SGPS, SA (3) Pareuro, BV (2)						Dominant	200,100,000
(2) Pareuro, BV Sonae - SGPS, SA (3)							849,533,095
(3)Sonae - SGPS, SA Sonae - SGPS, SA (treasury shares) Purchase Sale Sale Shares delivered under the terms of the Annual Performance Bonus Plan and Medium Term Incentive Plans Sonae Investments, BV (7) Sontel, BV (8)	30/01/2015 08/05/2015 15/05/2015 19/05/2015	118,820	1.173	112,270 4,704,897 862,399	1.262 1.278 0.064	Dominant Dominant	0
Sonaecom, SGPS, SA (9)						Dominant
(4) Migracom, SA Sonae - SGPS, SA (3) Sale Sale Sale Purchase Purchase Imparfin - Investimentos e Participações Financeiras, SA (5)	19/05/2015 20/05/2015 21/05/2015 17/12/2015 28/12/2015	1,000,000 790,053	1.071 1.060	247,362 300,037 315,000	1.264 1.254 1.251	Minority	2,464,337
(5) Imparfin - Investimentos e Participações Financeiras, SA Sonae - SGPS, SA (3) Continente Bonds - 7% -2015 Reimbursement at maturity	25/07/2015			100,000	1.000		4,105,280 0
(6) Linhacom, SGPS, SA Sonae - SGPS, SA (3) Imparfin - Investimentos e Participações Financeiras, SA (5)						Minority	439,314
(7) Sonae Investments BV Sontel BV (8)						Dominant
(8) Sontel BV Sonaecom, SGPS, SA (9)						Dominant
(9) Sonaecom SGPS, SA
Sonae - SGPS, SA (treasury shares) Shares delivered under the terms of the Annual Performance Bonus Plan and Medium Term Incentive Plans	20/03/2015			323,039	1.395		137,859
Shares delivered under the terms of the Annual Performance Bonus Plan and Medium Term Incentive Plans	18/05/2015			946,612	1.278
Shares delivered under the terms of the Annual	18/05/2015			837,438	1.277
Performance Bonus Plan and Medium Term Incentive Plans Shares delivered under the terms of the Annual Performance Bonus Plan and Medium Term Incentive Plans	22/07/2015			5,007	1.284
(10) Enxomil - SGPS, SA
Sonae - SGPS, SA (3)							2,021,855
Purchase Continente Bonds - 7% -2015 Reimbursement at maturity	23/12/2015 25/07/2015	1,521,855	1.077	400,000	1.000		0
(*) Member of the Board of Directors of Sonae - SGPS, SA

(**) Member of the Board of Directors of Efanor Investimentos SGPS, SA (directly and indirectly dominant company) (1)

(***) Member of the Board of Directors of Imparfin - Investimentos e Participações Financeiras, SA (5)

(a) article 248 S119B, paragraph 4), subparagraph b), of the Portuguese Securities Code - family member who resides with the person discharging managerial responsibilities for more than a year

(b) held by spouse

Qualified holdings

Shares held and voting rights attributable to shareholders owning 2% or more of the share capital of the Sonae - SGPS, SA, calculated according to article 20 of the Portuguese Securities Code, as required by article 8, paragraph 1, subparagrah b), of the Portuguese Securities Market Comission (CMVM) Regulation nr. 05/2008:

Shareholder	Nr. of shares	% Share capital and voting rights*	% of exercisable voting rights**
Efanor Investimentos, SGPS, SA (I)
Directly	200,100,000	10.0050%	10.0057%
By Pareuro, BV (controlled by Efanor Investimentos, SGPS, SA)	849,533,095	42.4767%	42.4796%
By Maria Margarida CarvalhaisTeixeira de Azevedo (Director of Efanor Investimentos, SGPS, SA)	14,901	0.0007%	0.0007%
By Maria Cláudia Teixeira de Azevedo (Director of Efanor Investimentos, SGPS, SA)	204,678	0.0102%	0.0102%
By Migracom, SA (company controlled by Efanor Investimentos, SGPS, SA's Director Duarte Paulo Teixeira de Azevedo)	2,464,337	0.1232%	0.1232%
By Linhacom, SGPS, SA (company controlled by Efanor Investimentos, SGPS, SA's Director Maria Cláudia Teixeira de Azevedo)	439,314	0.0220%	0.0220%
Total attributable to Efanor Investimentos, SGPS, SA	1,052,756,325	52.6377%	52.6415%
Banco BPI, SA	132,851,868	6.6426%	6.6431%
Banco Português de Investimento, SA	365,199	0.0183%	0.0183%
Fundos de Pensões do Banco BPI	40,071,372	2.0036%	2.0037%
BPI Vida - Companhia de Seguros de Vida, SA	4,751,416	0.2376%	0.2376%
Total attributable to Banco BPI, SA (II)	178,039,855	8.9020%	8.9026%

Fundação Berardo, Instituição Particular de Solidariedade Social	49,849,514	2.4925%	2.4926%
Total attributable to Fundação Berardo, Instituição Particular de Solidariedade Social	49,849,514	2.4925%	2.4926%
Source: communications received by the Company regarding qualified shareholdings up to 31th December 2015

* Voting rights calculated based on the Company's share capital with voting rights, as per subparagraph b) of paragraph 3 of article 16 of the Portuguese Securities Code **Voting rights calculated based on the Company's share capital with voting rights that are not subject to suspension of exercise

(I) Belmiro Mendes de Azevedo is, according to subparagraph b) of paragraph 1 of article ²⁰ and paragraph 1 of article 21, both of the Portuguese Securities Code, the "ultimate beneficial owner", as he is the controlling shareholder of Efanor Investimentos, SGPS, SA and the latter wholly owns Pareuro BV

(II) total number of voting rights attributed to Banco BPI, SA as per article 20 of the Portuguese Securities Code

Article 448 of the Portuguese Companies Act

Number of shares held by shareholders owning more than 10%, 33% and 50% of the Sonae - SGPS, SA share capital:

Number of shares held as of 31.December.2015

Efanor Investimentos, SGPS, SA Sonae - SGPS, SA 200,100,000 Pareuro, BV Dominated

Pareuro, BV Sonae - SGPS, SA 849,533,095

SUSTAINABILITY REPORT

SONAE FINANCIAL REPORT '15

1. Sustainability at Sonae
1) Organisation
2) Corporate Strategy
3) Our Commitments
4) Sustainability
5) Awards and External Recognition
2. Sustainability in Retail
1) Adapting to customers' needs and profile
2) Supply Chain Management
3) Innovation in Retail
4) Our Retail Sustainability Strategy (2013-2015 Triennium)
5) Overview of the Final Cycle (2013-2015 Triennium)
6) Better Purpose
7) Better Planet
8) Better People
3. Sustainability at Sonae Sierra
1) About Sonae Sierra
2) Business Strategy
3) Sustainability Strategy
4) Sustainability Performance in 2015
4. Appendix

......

Our Report

At Sonae, we continually invest in the promotion of sustainable development, focusing on an integrated vision concerning the three axes of sustainability – Environmental, Economic and Social.

The aim of the Sustainability Report is to disclose our economic, social and environmental performance to all of Sonae's stakeholders during the year 2015. This information is presented according to the G4 Guidelines from the Global Reporting Initiative (GRI) for the Core Level. The scope of the report includes all of Sonae's different business areas, particularly focusing on the Retail Sector (Sonae MC and Sonae SR).

2015 represents the closure of the cycle of our Sustainability Strategy for the period 2013-2015, entitled Our Way to a Sustainable Life. Thus, we hope that this report reflects the results achieved following the dedication and effort given to the fulfilment of these commitments.

This Report is divided into four main sections:

1. Sustainability at Sonae – includes a description of the company, corporate strategy, commitments, sustainability management and awards and external recognition received;

2. Sustainability in Retail –– presents the main trends of the retail industry, the way in which we manage the supply chain, the innovation initiatives developed, the Sustainability Strategy, presentation of the main results achieved at the end of the three year period 2013-2015 and details of the three axes of our sustainability strategy – Better Purpose, Better Planet and Better People;

3. Sustainability in Sonae Sierra – explanation of Sonae Sierra's activity, including a description of the strategy and performance of each strategic axis. Sonae Sierra has an independent and comprehensive Sustainability Report, available on the Sustainability menu of its website – www.sonaesierra.com;

4. Appendices – Adherence to Principles, Associations and Partnerships with Organisations and a link to access detailed information regarding the GRI indicators.

The information reported here can be complemented by consulting the 2015 Table of GRI Indicators, the 2015 Management Report and the 2015 Corporate Governance Report, available at www.sonae.pt.

Should you require any clarification regarding the information published in this report or about Sustainability at Sonae please contact:

Catarina Oliveira Fernandes | Head of Communications, Brand and Corporate Responsibility

E-mail: [email protected] | Tel.: +351 22 0104000

· SUSTAINABILITY AT SONAE

1. Sustainability at Sonae

Message from the Executive Committee

2015 marks the closure of our Sustainability Strategy cycle. Under the theme "Our Way to a Sustainable Life", with the ultimate goal of creating value for both the company and society in the short, medium and long-term.

During this period, we were able to create the necessary conditions for the prosperous and sustainable growth of all our stakeholders, supported by initiatives that aimed at strengthening our commitment towards the preservation of the environment, the development of our colleagues, the creation and sharing of knowledge, the promotion of innovation, and of course, the involvement of the community.

The ambition that drives us and makes us unwilling to settle for anything but the best, preventing us from stagnating on past successes, has led us, at the end of 2015, to join the list as one of the first subscribers to the "Paris Pledge for Action", an initiative under the Paris Climate Conference (COP21). As signatories, we commit to supporting this initiative, aiming to ensure that the level of ambition set will be reached or even exceeded, which undoubtedly will represent a new stimulus to our business activity in the coming years.

As such, the challenges inherent to this commitment will certainly be a central theme in our Sustainability Roadmap for the next three years and will be a unique opportunity to demonstrate our capacity to always overcome targets that test the limits and stimulate the vitality of our business.

We believe that, after a first cycle in which we built solid and structured foundations for the sustainable development of Sonae, we are now better prepared to take on new and more difficult challenges, but at the same time more exciting, which will allow us to renew our commitment to improve the everyday life of our stakeholders and the communities where we operate.

Paulo Azevedo, Chairman and Co-CEO

Ângelo Paupério, Co-CEO

1) Organisation

SUSTAINABILITY REPORT 15

.....

At the end of 2015, we were active in 72 countries.

2) Corporate Strategy

Grounded in a culture of innovation and the creation of shared value, we are committed to fulfilling our mission, remaining true to our values as we pave the path to achieve the strategic and growth goals that we have defined at a corporate level.

Our corporate strategy is focused on three key pillars to support our activity: internationalise, diversify our investment style and leverage our exceptional asset base in Portugal. The focus on these three pillars, allows us to maximise our capacity for growth and value creation through our financial and human resources.

International expansion

The internationalisation of the different business areas represents one of the main strategic priorities for the future. The focus on the allocation of resources within this goal aims to further increase the Group's presence abroad and the internationalisation of activities, acting as Soane's main engine of growth.

Diversifying our investment style

By adopting the most appropriate investment style for each business, whether it ranges from full ownership, majority or minority interests, with or without special rights, it is crucial to leverage Sonae's resources and maximise the effectiveness of the implementation strategy.

Thus, it may be strategically advantageous to be involved in the capital of companies which we do not control, in situations where we do not possess the necessary resources or in cases when the input of third parties is valued as a factor for the creation of greater economic value.

Leverage the exceptional assets base in Portugal

The ongoing exploration and development of new business opportunities, supported by our exceptional asset base held in Portugal, enables the strengthening of future growth and development options. A significant portion of the capital is then distributed between new projects, according to their capacity to generate growth and economic value.

3) Our Commitments

3.1 Our Stakeholders

Cooperating and closely interacting with each one of our stakeholders is part of the day-to-day life through Sonae. For this purpose, we have created and maintain a diversified base of specific communication channels for each group of stakeholders, which allows us to answer and address their concerns and expectations, in the best possible way.

<-- PDF CHUNK SEPARATOR -->

3.2 Our People

Promote a culture designed to attract the best talent, continuously develop the skills of our people and teams, recognise and reward their performance, these are the axes that guide the integrated talent management that we advocate.

Sonae is a diversified group, composed of young and highly qualified people, who work at their best every day.

3.2.1 Our Way

We aim to ensure that all companies of Sonae Group share a common culture and that in this way we are governed by the same values, ethical and behavioural principles. With this in mind, we have developed "Our Way", a document that summarises the values that make up our culture, what we expect from our teams and leaders, as well as the pillars that define the way we work. Aware of the importance of these aspects, we strive to apply the principles of "Our Way" so that we can translate our values into effective behaviours and disseminate our culture throughout the Sonae Group, reflecting with determination Sonae's identity in the various countries where we operate.

3.2.2 Integrated Talent Management

Recognising the challenge of being one of the largest private employers in Portugal and with the desire to be able to understand the individuality of each employee, we promote an integrated approach to talent management, based on three distinct pillars: (i) attracting talent effectively; (Ii) evaluation and development; (Iii) career management.

3.2.2.1 Attracting Talent Effectively

Sonae welcomes heterogeneity and diversity profiles so therefore, and due to our diverse and international business portfolio, we look for different academic backgrounds and we value comprehensive professional and personal paths. Thus, we strive to identify potential talent and maximise their personal and professional development and in 2015 we streamlined various initiatives, including:

Bridging the gap between young people and the labour market

Participation in Job Fairs at schools and universities, as well as other initiatives promoted by students and student associations;
Promotion of classes/workshops on relevant topics in the training and development of young people, as well as supporting academic and research work;
Promotion of study visits by students to Sonae (Central Structures and Operations) in order to provide them with the experience of coming into contact with the real world of business for the first-time;
Undergraduate, Masters and MBA students can participate in Mentoring programmes;
Partnership in the project "Bué d'Escolhas", part of the Choices Programme, promoting initiatives focusing on providing skills and development of children and youngsters at-risk;
We have continued the initiative "Alliance for Youth", together with other partners, with the aim of promoting the development of professional skills, preparing young people for employment and contributing to combating the scourge of youth unemployment in the Portuguese and European context.

Contacto Programme

Created in 1986, Contacto Programme is aimed at final year undergraduate/masters degree students and recent graduates of the top Portuguese universities, offering them the opportunity to carry out an internship at Sonae and, depending on their performance and potential, to join our workforce.

This talent acquisition is carried out through 'Contacto Moments' – a presentation on campus, to present Sonae and its different business units and opportunities – and also through 'Rede Contacto' (www.contactosonae.com). Through this platform, we promote a close relationship with young people and enhance their engagement with the company and their interest in participating in the programme. Only students who have a profile created at 'Rede Contacto' are eligible to participate.

The 2015 edition was launched with Sonae Future Quest, an innovation competition developed through 'Rede Contacto', which challenged the candidates to imagine the future of Sonae. The goal was to explore their full potential, and not just the academic performance of the candidates, therefore the selection was made based on the analysis of talent avatars and their imagination.

The Assessment Day, an event with challenges and teamwork dynamics, was the last test candidates underwent. At the end of the day, 50 talented young people were chosen to join the different businesses of Sonae and were welcomed on Contacto Day.

Contacto Day consisted of a moment to celebrate and acknowledge the investment and performance of the young talent seen during Sonae Future Quest. This event gave our trainees the opportunity to present themselves to our management team, extend contact with their mentors and increase their knowledge about the different Sonae companies.

In 2015, the Contacto Programme had more than 1,000 applications from national and international finalists and recent graduates, coming from countries like Portugal, Brazil, Italy, Poland, Spain, Ukraine and Vietnam. The heterogeneity of the profiles and academic backgrounds, such as Fashion Design, Management, Finances, Marketing, Maths, Biochemistry, Engineering, Communication Sciences, Information Technologies, Human Resources, Biology, among others, is also noteworthy.

In total, more than 4,500 young people have already participated in Contacto Programme, with a few hundred of these joining the Sonae team.

3.2.2.2 Evaluation and Development

Improving Our People is the performance management model applied across all businesses and geographic areas in which we operate. Based on the principles of meritocracy, pluralism and participation, it aims to be rigorous in the results and recognition, valuing the diversity of pathways and profiles of employees.

Every year, managers ensure a performance management interview with each team member. During this interview an opportunity is given to discuss the results achieved in the year under review, sharing expectations and ambitions, the identification of development opportunities and the definition of objectives and action plans.

Within IOP, since 2013, we have used, a specific talent management tool, Improving Our PeopleGT (Growth Toolkit), dedicated to our most senior employees, as well as those with greater potential for growth identified. This tool includes two main phases: a first phase of diagnosis (multi-rater and selfassessment), which intends to determine in each employee a clear and holistic view of what his/her positively differentiated skills are, and the areas where there is still room for improvement; and a second phase based on the design of personal development plans and customised professional needs of the employees. With a time horizon of 2-3 years, it may include different approaches, from executive education, to action learning, involvement in on-the-job experiences or more relational approaches, such as coaching or mentoring.

2015 was marked, mainly, by focusing on the design of solutions and the implementation of the development plans mentioned above. It was under this context that the Sonae Mentoring Programme was launched, which brings together employees from both segments previously mentioned to mentoring relationships, clearly a win-win situation for all parties involved.

Sonae Management & Leadership Academy

Throughout its history, Sonae has been well known for challenging its teams with demanding goals regarding the development of people and establishing that each employee has the responsibility of training and developing others. To help managers, Sonae has created a set of structured programmes and initiatives to complement the development project built between the leader and his/her team.

Today Sonae is proud of having created the conditions for leverage, according to the needs of different segments of employees, the development of its people, from the operational level to the most strategic ones, considering the different generations and geographic areas that characterise its human capital. At the same time, this pride is also followed by a strong sense of responsibility to continue to promote differentiated development initiatives for more than 40,000 employees.

Development at Sonae is currently considered in two broad areas: critical/transversal skills among various businesses and geographic areas; and more concrete skills, specific to the respective business.

In the first instance, Sonae has the Sonae Management & Leadership Academy whose mission is to enhance the ability to generate innovative leaders and entrepreneurs, able to develop and diversify our business, keeping them in leading positions in their sectors of activity. This academy is focused on the sustainable development of management and leadership skills and is composed of a segmented structure of content and programmes dedicated to the development of the various organisational levels. For this purpose, we have partnered with the best national and international management schools and, in parallel, we look for our best "teachers" internally, leaders with undeniable expertise in the areas of leadership and coaching.

For the executive target, we have adopted an integrated approach with regard to their training and development. We go beyond Executive Education, aiming to offer programmes supported by alternative methodologies such as action learning, on-the-job experiences, coaching or mentoring. We have also designed customised, challenging and innovative programmes, taking into account the current needs identified for and by each executive and taking as a start and end point for this development the various models and policies that the company uses in managing their talent.

Sonae Management & Leadership Academy is highly committed to its mission of contributing to better prepare all the employees of Sonae's companies in their management and leadership development. Therefore, in 2015 we invested 961,720 euros, totalling 29,116 hours of training and involving 1,160 employees.

Career Management

Our careers' model is designed to support the management of the talent pipeline in Sonae, ensuring alignment between business priorities and professional development expectations of our employees. Therefore, there are two management approaches, one is focused on the planning needs for human resources and the other is more directed towards each employee as an important player of his/her own professional and personal development. This career management model also promotes our ability to

attract talent by contributing to a strong Employment Value Proposition (EVP), with respect to opportunities for growth and development, communicating a vision of the possible future paths, and the progression and development plans associated with them. As we value the diversity of profiles and pathways of our people, we support personal and professional development through internal mobility within areas, companies, businesses and geographic areas.

2015 was a year focused on the design of an internal mobility model and process, which strengthens the continuity, as well as cross-cutting and versatility skills of our employees. The implementation of this model has already started.

Gender diversity

Under the European Roundtable of Industrialists (ERT), in 2012, Sonae subscribed to the Women's Initiative, which embodies concern for gender parity through the establishment of voluntary target facilitators promoting greater diversity of gender, not only for positions of management and decisionmaking boards, but also for senior positions and middle management.

At Sonae, we believe that the balanced presence of women and men in decision-making positions is an important factor for the balance of the organisation. Therefore, we have created a dedicated working group exclusively for the study, strategy definition, intervention and follow-up of female employees throughout the various levels of leadership. This initiative reinforces the concern and investment in the development of our female talent through an approach that aims to promote sustainability with regard to genre fairness.

Today female representation on the Board of Directors of Sonae companies is over 30%. However, Sonae's concern is not limited to management functions, but encompasses the entire organisation. Currently, half of the managerial positions in the company are already filled by women.

3.3 Ethics

Ensure that all our activity is governed by the faithful application of established ethics and trust principles is a priority throughout the Sonae Group. For this purpose, we have developed the Sonae Code of Ethics and Conduct, defining the ethical standards by which we are guided. To ensure its implementation, enforcement and monitoring, an Ethics Committee has been appointed by the Board of Directors.

The Code of Ethics and Conduct is available to all employees at Sonae.

3.4 Innovation & Knowledge

To promote a culture of learning and openness to change, leading our companies to become ecosystems of knowledge and innovation is a core ambition of our entire activity.

Innovation is vital to the mission and values of Sonae, as it helps us to overcome, creatively and efficiently, the challenges we face. We believe that by recognising distinctive and unique initiatives, we promote innovation as a catalyst for our success. As such, we have two important awards in place in this area: the Sonae Innovation Awards and the Chairman's Award.

Forums for Knowledge Sharing and Advisory Groups

We develop on a regular basis, forums across all our business areas, with the aim of sharing knowledge and promoting the adoption of good practices, operating as a crucial discussion tool for the dissemination of knowledge among Sonae companies. There are currently nine knowledge sharing forums at Sonae, as illustrated in the following figure:

We also have a total of 4 advisory groups, which meet frequently, with the aim of sharing and coordinating information (organisation of internal training). Additionally, there are two committees that serve as important platforms for sharing knowledge and experience.

3.5 Community

Contribute to the development and well-being of the communities in which we operate is a desire shared by everyone at Sonae and it nurtures one of the intrinsic values of our culture.

In 2015, our support to the community included actions undertaken in Portugal and Spain, with an investment of 8.5 million euros, which has supported more than 1,500 institutions whose activity is divided according to the following community support pillars: (i) environmental awareness; (Ii) culture; (Iii) education and entrepreneurship; (iv) health and sports; (v) science and innovation; (vi) social solidarity. In this section of the report, we would like to highlight some of the community support actions promoted by Sonae during 2015.

3.5.1 Sonae Activshare

We coordinate our community campaigns through Sonae Activshare, a platform that we have developed to actively manage and disseminate information concerning our social responsibility and volunteering initiatives at Sonae.

We believe that volunteering allows us to expose our employees and teams to different situations, face new challenges and broaden horizons, often working as a stimulus to creativity and innovation, which are values that are part of our DNA at Sonae.

Under Sonae Activshare, we would highlight two internal actions that reflect the values we aim to develop through the programme:

Solidarity logistics

As part of the celebration of the 25th anniversary of the Maia Distribution Centre (CDM), Sonae MC has launched the Solidarity Logistics Initiative, a programme consisting of a set of actions, which with the contribution of employees from the whole of Sonae, enabled us to positively impact the lives of our CDM employees:

A solidarity bazaar made available, for a nominal fee, a set of varied items (clothing, homeware, electronics and sportswear) to all of our CDM employees. The goods were donated and collected by employees of the various Sonae companies present in different parts of the country. The initiative was a success and the funds raised were donated to other programme activities.
A refurbishment programme of a housing division of four CDM employees improved their welfare and the welfare of their families. The winners were chosen from more than thirty applications received. The renovations took place in early 2016.
A Christmas holiday camp that provides recreational and educational activities for twenty of our CDM employees' children, from the ages of six to ten. In addition to teaching staff who ran the holiday camp, the activities were streamlined by volunteers.
A Football Tournament that gathered the Logistics teams and employees from other Sonae companies, providing a friendly and pleasant sporting event, where the main goal was fair play.

Ciudad Escuela Muchachos (CEMU)

In 2015, we developed an unprecedented initiative that brought together 30 Sonae volunteers from all levels of the organisation in Spain, including from Sport Zone, Worten and Zippy. It entailed the rehabilitation of a green area Ciudadescuela Muchachos (CEMU) in Madrid, thus promoting volunteerism, cooperation and integration and reinforcing the sense of belonging to Sonae. By actively contributing to this project, Sonae volunteers helped to create better living conditions for children from impoverished areas and going through a particularly difficult social situation.

3.5.2 Sonae Art

Culture is part of Sonae's corporate responsibility policy, which aims to promote creativity and innovation, stimulating new tendencies and bringing society closer to art, namely through important cultural events that foster enriching personal and collective development experiences.

National Museum of Contemporary Art - Chiado Museum (MNAC - MC)

Sonae and the Directorate General of Cultural Heritage (DGPC) signed in 2014, for a period of five years, a cooperation agreement, which established a partnership between the two entities by supporting the annual MNAC-MC programme and the implementation of the Sonae/MNAC Art Cycle projects and the Sonae Media Art Award, aimed at supporting the creation, promotion and dissemination of contemporary art.

In 2015, the first edition of the Sonae Media Art Award was held, the first and highest national award in the field of new media. 179 applications were received. Of the 129 applications validated, 5 finalists were selected, each one received a 5,000 euro scholarship for the creation of an unpublished work that was exhibited at MNAC-MC from November 2015 to January 2016. The winner was awarded a prize of 40,000 euros.

Serralves Foundation

Since its creation in 1989, Sonae remains a member of the Serralves Founders' Board. In addition, to being one of the patrons of Serralves, Sonae and the Serralves Foundation renewed and strengthened their cooperation in the field of contemporary art and have developed, since 2011, an ambitious project called the 'Sonae | Serralves Project'. This is a biennial programme that challenges the artists of outdoor works of art, to depict the link between art, architecture and the landscape. The 4th edition (2015-2016) will introduce for the first time to a national audience, between June and December 2016, Yang Haegue, a South-Korean artist of great international recognition.

Casa da Música

Sonae has promoted over the past few years culture, creativity and musical innovation through its patronage of Casa da Música in Porto. In 2015:

We continued to be patrons of the Symphony Orchestra of Porto from Casa da Música;
We supported, together with Continente, the Sunday Symphony;
Through Worten, we supported the internationalisation of the Symphony Orchestra of Porto from Casa da Música, for the second consecutive year;
Sonae Sierra was the patron of the Lead Conductor of the Remix Ensemble.

3.5.3 Education and Entrepreneurship

In 2015, we continued to allocate efforts to the development of projects in the field of education with the aim of making a positive impact concerning our investment in the community, in the medium and longterm.

Partnership with the Cerco School Group – Porto de Futuro Project

Sonae, as a partner of the Cerco School Group under the "Porto de Futuro" project, over the past few years has supported and streamlined several initiatives together with the school community. In the academic year 2014/2015, the focus of activity was the implementation of a programme aimed at promoting the academic success of students in the third cycle of their education, under the coordination of the Entrepreneurial Association for Social Inclusion (EPIS) – the Facilitators Network for School Success.

The project includes in its methodology a system which identifies youth at risk in terms of school performance and a portfolio of training methods, some universal and others targeted to each risk profile, enabling individual plans to be developed with close and continuous monitoring of the students who are most likely to become early school leavers.

In addition, they also streamlined other actions among students, teachers and parents: workshops, the promotion of study visits, awards to students with the best performance, development and publication of the group's newsletter, among other initiatives.

Junior Achievement Portugal

In 2015, Sonae maintained its partnership with Junior Achievement Portugal (JAP), through which it streamlined its programme in schools that develop an entrepreneurial spirit amongst the young generation, enriching their vision and understanding of society and the business world. Over the last three years, we have seen a 15% increase in the number of Sonae volunteers present in the initiatives promoted by JAP, with a total of 150 volunteers in 2015.

Junior Achievement Spain

We have extended our support within the partnership established last year with Junior Achievement Spain (JAE). As a result, 12 Sonae volunteers participated in 7 different educational programmes divided into three educational pillars: (i) "Our Community" - 3 programmes; (Ii) "Our City" - 1 programme and; (Iii) "Ethics in Action" - 3 programmes. Additionally, Sonae volunteers had the opportunity to participate in an academic and professional guidance programme "Business-Partners for one Day".

Action 1 – Action Plan 2020 by BCSD Portugal

Under the Action Plan 2020 BCSD Portugal - Business Council for Sustainable Development, Sonae was the Action 1 project leader, aiming at aligning companies' needs in terms of job skills and the training young generations receive at school.

This action sought to determine the critical skills needed for the development of human capital by 2020, contributing to the alignment of needs between the labour market and schools and universities. With this objective in mind, Action 1 gave priority to three activities during 2015:

Diagnose companies' needs by 2020 using a comprehensive survey;
Communicate to young generations job market opportunities, using channels and communication means more suitable to their age;
Bring all pivotal stakeholders together in the promotion of innovative approaches to bridge the gap between schools and companies.

3.5.4 Social Solidarity

'Somos Sonae Programme'

'Somos Sonae Programme' is a Sonae social responsibility programme that aims to provide support to employees who are in need and at risk, supported by the project 'Portugal +Feliz' of the Portuguese Red Cross. With the help of a specialised and multidisciplinary team, the action plan is designed according to the specific situation of each employee. In this sense, the kind of support provided is very diversified and adjusted to the specific situation of each employee: ranging from legal advice, financial advice, the management of family finances, health, basic goods and services and any other type of help should it be deemed necessary and appropriate. In 2015, the total investment in this programme was about €230,000, and it provided support to 554 people – 193 employees and their households (144 adults and 217 children).

Note: The remaining projects and initiatives carried out under the Community Support for the retail area level are described in the "Increased Sharing and Promotion of Social Wellbeing" section of the chapter "Better Purpose".

4) Sustainability

Message from Sonae's CCCO

Innovation and Social Responsibility are central pillars of Sonae's culture, whereby we are committed to improving the lives of the people and the communities in which we operate. It is a daily commitment that is revealed through our business activities and through the involvement of our colleagues.

Investment in Innovation, which in 2015 was around 110 million euros, allows our businesses to be engines of development in the various sectors where they operate, with direct benefits for our customers.

In 2015, our support to the community included an investment of 8.5 million euros, which has had an impact on more than 1,500 institutions and organisations, and a total of 4,400 volunteering hours dedicated by our colleagues.

In parallel, we have continued to focus on the development of our colleagues, through an integrated approach to talent management, ensuring effective attraction, development and retention of the best talent. Throughout the year, we invested in 1.3 million hours of training.

We believe, therefore, that the fact that we are present in various sectors of activity allows us to maximise our capacity for growth and value creation through our financial and human resources, as well as to explore the many opportunities that each business offers us to create a more sustainable society.

Luís Filipe Reis

4.1 Sustainability Milestones

4.2 Sustainability Management

Sustainability Forum

The main goal of the Sustainability Forum is to promote the sharing of experiences and know-how, common to all Sonae Companies, within the remit of sustainability.

It is composed of members from the various Sonae Companies and is coordinated by a sponsor, a president and a secretary, covering topics such as green taxation, food waste, community support, management and relationship with suppliers, among others. Throughout this sharing of experiences, skills and information, the implementation and diffusion of measures is encouraged, aiming at the adoption of more sustainable practices defined at the level of each business area.

Sustainability Award

Sonae's Sustainability Award aims to distinguish a specific programme, project or initiative that has been developed within the firm by a working group, made up of members of the distinct business areas.

Note: The Sustainability Award is an initiative that was taken by Efanor, the main shareholder at Sonae, therefore it includes Sonae Capital and Sonae Indústria.

4.3 Main Sustainability Indicators

Turnover: +0.8% in comparison to 2014 Underlying EBITDA: -13.1% in comparison to 2014

Net Debt: +3.4% in comparison to 2014

Social Performance

Community Support: -13.3% in comparison to 2014 Absenteeism Rate: Same as 2014

Hours of Training: -1.1% in comparison to 2014 Work Accidents: -6.6% in comparison to 2014

Work Accidents (Nr)

Environmental Performance

Energy consumption

Energy consumption: -1.7% in comparison to 2014 Water consumption: -0.5% in comparison to 2014

Waste recovery: +0.3% in comparison to 2014 CO2e Emissions: +20.3% in comparison to 2014

5) Awards and External Recognition

The Carbon Disclosure Project has distinguished, for the 3rd consecutive year, Sonae's environmental commitment to the Environmental Performance and Leadership Index (CDLI), which demonstrated our environmental performance and the quality of the disclosed information reported.

Sonae (corporate level)

National Museology Award in the category of Patronage within the framework of the partnership with MNAC – Museu Chiado.

Sonae's Labour Relations Team was recognised as the best team at an international level in the category of Employment at the ILO European Counsel Awards 2015.

Sonae MC

Reader's Digest "Brands of Trust 2015" recognised Continente as a Brand of trust for the 13th consecutive year in the category of hyper/supermarkets. Continente was also distinguished as an Environmental Brand of Trust 2015 in the same category, for the 6th consecutive year. Well's was also distinguished, for the 2nd consecutive year, in the category of parapharmacy stores.

The project 'Missão Sorriso/Missão Continente' was awarded at the Retail Awards HS 2015 with an award in the category of best social and corporate responsibility campaign in the food retail sector.

At the Consumer Choice Awards 2015, promoted by Consumer Choice, Sonae MC was awarded in the following categories:

Yämmi, in the food processing category;
Continente, in the Hyper and Supermarket categories and as the Best Distribution Brand;
Continente Magazine, in the category of Cookery Magazine;
Meu Super, in the category of Supermarkets in Franchising;
Well's, in the category of Health and Wellbeing stores.

The following Continente products were awarded in the international Vertex Awards in the category of package design:

Continente Meats 100% National (gold medal)
Continente Potatoes (silver medal)
Cured Ham Taste of Portugal Continente (bronze medal)

Continente Potatoes were honoured with a silver medal in the category of package design in the international Pentawards 2015.

Reader's Digest "Brands of Trust 2015" recognised Sport Zone (for the 2nd consecutive year – in the category of sport and sport fashion stores), Worten (for the 6th consecutive year – in the category of non-food retail distribution and chain stores), and Zippy (for the 3rd consecutive year – in the category of children's clothing and childcare stores) as a Brand of Trust.

The project Código Dá Vinte, developed by Worten, won the Retail Award of Hypersuper Newspaper in the category of Social and Corporate Responsibility Campaign, as well as winning the bronze medal in the Social Responsibility category under the Efficiency prize.

Sport Zone, Worten and Zippy were with the Consumer Choice 2015 award, promoted by Consumer Choice.

Zippy was acknowledged in the 24th edition of the Masters of Distribution prize, promoted by the magazine Distribution Today, in the category of Social Responsibility, due to the solidarity project "Love in a Box".

The initiative "Kilos of Help", developed within the Worten Team project, was distinguished with an Honourable Mention in the 7th edition of the Green Project Awards.

Worten was the winner in the "Excellence in Quality" category, for its sales force management project awarded by the Kaizen Institute and the Portuguese Association for Quality (APQ).

Sonae Sierra

Norte Shopping was awarded with the honour of Best Shopping Centre in the category of Quality-Price Relation at the Best Buy Award Portugal.

Sonae Sierra was distinguished at the Forbes Green Awards for their environmental strategy developed in shopping centres under development and for the ParkLake and River Plaza Mall operations, in Romania.

The shopping centres Freccia Rossa and Le Terazze, in Italy, were honoured at the CNCC Italy Awards with a Certificate of Merit in the category of Cause-Related Marketing.

Sonae Sierra was recognised in 2015 by GRESB – Global Real Estate Sustainability Benchmark with the following distinctions:

2nd place in the retail sector at the European level (unlisted companies)
7th place in the global retail ranking
12th place among European companies considering all of the activity sub-sectors

2. Sustainability in Retail

Message from the Sonae MC's CEO

2015 was a year marked by significant challenges for Sonae MC, however, we continued to stand by our customers and renewed their trust in us.

Aware that there is a new generation of consumers, with new habits and lifestyles, we remain committed to monitoring and promoting the activities of our producers, in order to ensure that every day the best and freshest products in the market reach our stores, at the best price.

With regard to our commitment to national production, in 2015 we took this challenge to new areas by relocating for example the entire Yämmi production to Portugal, training and empowering national partners and suppliers.

The year was also marked by the launch of Missão Continente, which extended the scope of its intervention to other areas beyond social responsibility, namely to activities of a social nature, the community and the environment, developed by Sonae MC.

The retail sector has proven to be increasingly challenging for companies that operate in it and, naturally, Sonae MC is not immune to this context. However, our commitment towards sustainability remains steadfast and improving the quality of life of our customers and the communities where we are present will always remain a priority.

Luís Moutinho

Message from the Sonae SR's CEO

The sustainability of Sonae SR's operations is critical in order to ensure the success of the internationalisation of our businesses. As it is a key growth driver, it is essential that we are able to guarantee a greater level of trust and transparency throughout the value chain to ensure that our customers, no matter where they are, receive our products always with the highest quality guaranteed.

For this purpose, throughout the year we have strengthened certification processes, audits and inspections of our suppliers, and have audited more than 120 suppliers of electronic products.

In 2015, we maintained our support for the community, continuing the social responsibility initiatives of our brands, namely, Zippy's 'Love in a Box', Worten's 'Equipa Worten Equipa' and 'Código DáVinte', and Sport Zone's 'Running Experience'.

We believe that by adopting a responsible attitude towards society, we are creating the right conditions to achieve important strategic advantages and, consequently, better positions in the markets in which we operate, therefore enhancing the growth of our business.

Miguel Mota Freitas

Trends in the retail sector

According to RobecoSAM¹ , there are currently nine specific issues of particular importance for companies in the retail sector. These issues are aligned with our three sustainability pillars (Economic, Environmental and Social), as illustrated in the figure below:

Sonae aims to address these issues through its Sustainability Strategy (see chapter "Our Retail Sustainability Strategy (Triennium 2013-2015)").

The retail sector is characterised by a high level of dynamism and volatility, primarily linked to the rising level of consumer demand. We strongly invest in aligning our supply to consumers' needs and our constant innovation in the processes and products enhances our evolution to a more sustainable organisation, more capable of responding to the most recent trends inherent to the sector, in particular with regards to changes in the typical consumer profile. Taking these trends into account, we would like to highlight three issues that are particularly relevant for Sonae: (i) adaptation to consumers' needs and profile; (ii) supply chain; and (iii) innovation.

1) Adapting to customers' needs and profile

We have at our disposal a diversified and complete offer of products tailored to our customers' needs, including our own brand products which, due to aspects such as quality and a highly competitive price, have increasingly become an obvious choice for customers. The latest trends in the industry include, amongst others, the following aspects relating to customer preferences:

¹ RobecoSAM Industry Profiles - Retailing, 2015

a) Demand for more detailed information about products, particularly their nutritional contents and their origin/source

Due to the current ease of access to information, consumers attach more importance to the immediate information available on the products they purchase, in particular to labelling information. To address this aspect, we strive to increase the quantity and quality of information provided to consumers and displayed on product labels (e.g. point of origin detailed on the labels of textile products and nutritional traffic light labels on food products).

b) Growing concern for health and wellbeing, encouraging the consumption of healthier products that promote wellbeing and a healthy lifestyle

We are currently witnessing a growing concern for health and wellbeing, there is a clear customer trend to value and show preference for products that are consistent with a healthy lifestyle. We focus on ensuring that we include a variety of products with a nutritional content aimed at healthy lifestyles and that promote wellbeing (e.g., our range of dried fruit Continente Wellness). Additionally, we support and develop various initiatives in this field (e.g., The Hyper Healthy Movement).

c) Preference for more sustainable consumption, giving priority to products with a reduced environmental impact

Today, consumers are more aware and conscious of the impact on the environment and their responsibility towards it. We promote the adoption of more sustainable and efficient practices such as reducing energy consumption or optimising the design and materials used for primary packaging and transportation, mainly in own brand products, aiming to safeguard the wellbeing of our planet. In 2015, we modified the sale packaging of specific product SKUs such as coffee capsules, yogurts and pizzas to reduce the materials used in them.

2) Supply Chain Management

Companies in the Retail Sector currently face a set of challenges related with supply chain management, namely regarding profit margins, operating efficiency, responsiveness to customers' demands, regulatory compliance, quality standards and commercialisation of products through multi-channel distribution. At Sonae, we place great importance on the optimisation of our supply chain, especially concerning our various suppliers and the alignment between supply chain management and the sustainability strategy of the organisation.

Produts

The Continente Producers Club in 2015:
- 217 million euros in purchases;
- 136 thousand tonnes in purchases;
- 234 members.

Suppliers

39% are national suppliers;
51% of suppliers audited according to financial environmental, social and employment criteria;
947 suppliers audited in 2015.

Distribution and Logistics

7 logistics warehouses;
35.760.348 Km travelled by the hired fleet for product distribution.

Sales – Stores and online platform

1.361 stores in 2015, an increase of 4% compared to 2014;
114.447 Continente online users;
442.190 home deliveries.

Customer Relations

4.831.818 customers who have benefited from card/coupon discounts;
344 million euros the total amount of savings made through card/coupon discounts;
8 themed workshops held for customers under the Hyper healthy Movement in 2015;
113.000 customers' complaints and suggestions analysed in 2015;
Creation of the 'Universo Card'.

Upstream: Products and Suppliers

With the objective of ensuring sustainability and transparency in the supply chain, we have established very close relations with our producers and suppliers.

Downstream: Distribution, Logistics and Sales

We focus on constantly improving the efficiency of our distribution network and our logistics infrastructure, as well as ensuring a highly customised experience adapted to our customers at every point of sale (stores and online) and in deliveries (home deliveries and drop-off points).

Customer Relations

We are highly committed to promoting close customer relations aiming to meet their needs and expectations. We are concerned with making available a suitable and targeted offer according to our the customers' preferences, making good use of our knowledge about their habits and providing them with a range of benefits including through cards and discount coupons or the newly released Universo Card (for more details on this card, see the "Increased Sharing and Promotion of Social Wellbeing – Close customer relations and benefits for our customers " in the chapter "Better Purpose").

3) Innovation in Retail

We consider innovation to be a crucial way to build a more sustainable organisation and to encourage the involvement, participation, creativity and talent of our employees.

3.1 Innovation Management

We have an Innovation Management Team in place devoted to a specifically defined mission and vision to enhance the growth of Sonae through Innovation.

Vision: Sonae is a company open to the world constantly identifying new ways to satisfy and surprise consumers

Mission: Facilitate value creation through the creation and testing of new ideas and solutions, supported through our relationship with our employees and partners

At the same time, we have an Innovation Committee responsible for boosting innovation in the Sonae retail companies and by encouraging the participation of all our employees in related activities, comprising of representatives from all the functional areas and coordinated by the Innovation Management Team.

3.2 Recognise and promote a culture of innovation with an international dimension

Sonae adopts and develops an open innovation approach, as we aim to involve not only the internal workforce but also educational institutions, research laboratories, technology transfer units, suppliers, customers, other retailers and start-ups in initiatives that promote innovation. Sonae retail area businesses currently have over 160 partnerships for innovation worldwide involving universities, institutions and companies located in 29 countries in 4 different continents, 110 of these being European partners.

Annually, we produce the Sonae Innovation Retail Book, describing the best initiatives that Sonae promotes in this area. This book now has six editions and is distributed by more than 670 people scattered over more than 18 countries in 3 continents.

3.3 Events and Initiatives

In 2015, we developed several events and initiatives under the theme of Innovation and we would like to highlight the following:

BizShare – During 2015, two editions of this event were held, dedicated to sharing information and knowledge among 155 employees from different business areas of Sonae;

Creative Problem Solving (CPS) – This event focused on the exchange of experiences and promoted the sharing of new perspectives, with the involvement of 235 participants;

ShineOn

In 2015, over 100 employees participated in ShineOn and more than 190 ideas were generated.
Since 2013, this event has led to the creation of 1,110 ideas.
4 projects being implemented in Portugal and Spain were presented in the 2015 edition.

Study Tour – Six Sonae employees had the opportunity to

participate in a guided visit in London, in order to observe best practices in 10 retail specialists and other areas related to the sector;

Strategic workshops (push and pull) – The strategic workshops held during 2015, enjoyed the participation of 295 participants in total.

4) Our Retail Sustainability Strategy (2013-2015 Triennium)

Our sustainability strategy for the period 2013 to 2015, named Our Way to a Sustainable Life, was characterised by a set of commitments, action axes and initiatives developed with the goal of addressing 6 priority areas organised into 3 main axes:

This strategy supports the sustainable development of our activities, as it is completely aligned with the strategic objectives of the organisation. In this sense, this strategy represents the main guide for the definition of specific targets and for the development of initiatives directed towards ensuring our compliance to the commitments we set ourselves for the 2013-2015 triennium.

Better Purpose – Commitments

Promote the adoption of healthy life styles and keep Sonae's customers informed, providing them with the necessary knowledge they need to make nutritionally balanced and responsible choices
Endeavour to promote social wellbeing in the communities where Sonae is present, contributing towards strengthening citizenship and social cohesion

Strategic Axes	Which material issues do they respond to?
Responsible offer and informed choice	Nutrition
	Public Health
Own brand product responsibility	Compliance / Product Quality
	Product adaptation and innovation
	Public health
Contribution to Sustainable Fishing	Preservation of natural resources
	Ethics in the supply chain
Increase sharing and promote social wellbeing	Combating food waste
	Healthy lifestyles
	Supporting local communities

Better Planet – Commitments

Focus on continuous improvement in order to attain top environmental performance, not only as a differentiating factor but as a basic condition for the sustainable development of Sonae's business

Strategic Axes	Which material issues do they respond to?
Efficient management of environmental performance	Water, energy and GHG emissions Waste management Transport and distribution optimisation
Sonae's "Footprint"	Transport and distribution optimisation Water, energy and GHG emissions
Environmental impact of packaging	Packaging innovation and optimisation Transport and distribution optimisation

Better People – Commitments

Promote well-being and invest in the development of employees' skills and expertise, continuously enriching Sonae's culture
Integrate sustainability into the supply chain and align supplier practices with Soane's policies

Strategic Axes	Which material issues do they respond to?
Human capital development	Human capital management
Well-being and internal satisfaction	Health and Safety in stores Healthy lifestyles
Responsibility in the supply chain	Environmental, labour and human rights criteria Transparency and trust Ethics in the supply chain Local production

4.1 Materiality Review

With the intention of ensuring the alignment of our sustainability strategy with the main sector trends and consumer preferences, in 2014, we carried out a materiality review which consisted of an analysis and an evaluation of a set of material issues for the fulfilment of our sustainability commitments. This materiality review was essentially based on three distinct components: analysis of stakeholders' expectations and opinions, specific sector trends and benchmarks taking into account the performance of several global reference players. These components allowed us to outline a set of material themes taking each business area into account (Sonae SR and Sonae MC), as well as the organisation boundaries ("Within Sonae" and "Outside of Sonae").

MATERIAL THEMES		WITHIN SONAE
	SONAE SR	SONAE MC	OUTSIDE SONAE
Environmental, labour and human rights criteria for suppliers			 All the suppliers
Transparency and trust throughout the value chain			 All the suppliers; Community; Regulators and governmental entities
Ethics in the supply chain			 All the suppliers; Community
Influence suppliers in the preservation of natural resources			 All the suppliers
Local Production			 CPC Suppliers and Own Brand; Community
Compliance/ Product quality			 All the suppliers, Customers and visitors; Media
Public health			 All the suppliers, Customers and visitors; Media; Regulators and government
New consumer interaction technologies			 Customers and visitors
Product adaption and innovation			 Customers and visitors; Community
Packaging innovation and optimisation			 Own brand suppliers; Other suppliers
Combating Food waste			 Community
Nutrition			 Own brand suppliers; Other suppliers; Customers and visitors; Regulators and government
Healthy lifestyles			 Customers and visitors
Support to local communities			 Community
Health and safety in stores			 Employees; Customers and visitors
Human capital management		
Water, energy and GHG emissions			 CPC; Sonae MC suppliers; Own brand
Waste management			 Own brand suppliers; Customers and visitors; Own brand
Transport and distribution optimisation			 Own brand suppliers; Customers and visitors; Own brand

This materiality review allowed us to conclude that our sustainability strategy continues to adapt to the trends and to the current reality of the retail sector, addressing the material issues most relevant to the organisation.

5) Overview of the Final Cycle (2013-2015 Triennium)

Over the past three years, we sought to meet the commitments outlined in the sustainability strategy 'Our Way to a Sustainable Life'. For this purpose, we promoted the development of actions and initiatives aligned with the sustainability strategy and strategic objectives of the organisation, covering the three pillars of sustainability (economic, environmental and social).

Our dedication and effort in this aspect allowed us to achieve a greater degree of maturity in terms of our integrated sustainability management. We can claim that today we are a more sustainable organisation, with greater visibility regarding the impact of our activity and constantly aiming to contribute to a better world. The actions and initiatives undertaken during the last three years have enabled us to meet most of the goals and commitments we defined in our sustainability strategy.

The end of this three-year period marks the beginning of a new cycle, which will feature a renewed sustainability strategy. Therefore, we will begin to work on developing a new roadmap with a set of ambitious goals, aligned with our business strategy and adapted to the current context, which will allow us to continue building an ever more sustainable organisation.