Sonae SGPS

Investor Presentation • Oct 11, 2019

Maia, 11 October 2019

(Translation from the Portuguese original)

Sonae discloses presentation pertaining to its Capital Market Day.

The Board of Directors,

Head Office Lugar do Espido, Via Norte, Maia Share Capital: €2.000.000.000,00 Maia Commercial Registry and Fiscal Number 500273170 Sociedade Aberta

For further information, please contact the Investor Relations Department at Sonae:

PATRÍCIA VIEIRA PINTO Head of Investor Relations / Sonae T. +351 220 104 724 // E. pavpinto@sonae.pt

www.sonae.pt

INTRODUCTION TO SONAE'S MANAGEMENT TEAM

OUR CORPORATE PURPOSE AND GOALS

BUSINESS PORTFOLIO OVERVIEW

OUR VIEW ON VALUE CREATION

Closing remarks

Cláudia Azevedo - CEO

WHO WE ARE

CLÁUDIA AZEVEDO

A trust-based organisation with deep rooted values and a purpose which will lead us into the future

A long-living group in an ambitious quest for superior and sustainable growth and value creation

An active parent company, always looking to ensure that our businesses have the ability to reinvent themselves

A strong management

team and best practice

corporate governance

An active portfolio management anchored on a solid capital allocation strategy

A unique corporate culture with a leading purpose

A long living company leveraging…

"To create long-term economic and social value, taking the benefits of progress and

innovation to an ever-increasing number of people"

… and a set of values embedded in everything we do

Cooperation and independence

Innovation Corporate responsibility

People at the centre of our success

A purpose beyond economic value creation

Sonae signed the Paris Pledge for Action

Sonae joins the CEO's Guide to Human Rights

Endorsement of the Letter of Principles of BCSD Portugal

2015

2017

People Social capital

Planet Natural capital

x

x

A strong management team and best practice corporate governance

An active portfolio management anchored on a solid capital allocation strategy

A unique corporate culture with a leading purpose

A long living company leveraging…

Miguel Mota Freitas CEO | Worten and ISRG

Luís Reis CEO | Sonae FS and Sonae Fashion

Eduardo Piedade

CEO | Sonae IM

Best practice corporate governance including a diverse board with independent directors

Lorraine Trainer Non-Executive Board member

José N. Adelino Non-Executive Board member

Fuencisla Clemares Non-Executive Board member

Philippe Haspeslagh Non-Executive Board member

Marcelo Faria de Lima Non-Executive Board member

Ângelo Paupério Non-Executive Board member

Carlos M. Silva Non-Executive Board member

Paulo Azevedo Non-Executive Board member (Chairman)

Management team

Cláudia Azevedo CEO Board member

João Dolores CFO Board member

João Günther Amaral CDO Deputy to the Excom

A strong management team and best practice corporate governance

An active portfolio management anchored on a solid capital allocation strategy

A unique corporate culture with a leading purpose

A long living company leveraging…

A history of active portfolio management…

Relative invested capital by industry

% of total invested capital

… underpinned by a disciplined approach to capital allocation

Capital markets logic

• BU strategies challenged, informed by Sonae's view on each sector
• Medium-term financial plans and estimated value creation of each initiative evaluated at group level

How much is the business worth to Sonae vs. the market?

Portfolio balance

Understand the portfolio exposure to specific trends and factors (e.g. sectors, geographies, disruptive technologies, growth)

Disciplined capital allocation

A portfolio of businesses with leading positions

16 2 Insurance brokerage through 50% of MDS group

1 Consolidated through the equity method

A portfolio with strong linkages

Going forward, we will remain true to our DNA but more active and decisive in managing our portfolio

Less operational intervention in businesses

More active portfolio management and

Increased pursuit of new growth arenas

Closing remarks

Cláudia Azevedo - CEO

SONAE MC

LUÍS MOUTINHO

Undisputed market leadership with an exceptional multi-format omnichannel portfolio

Source: Company information. Planet Retail RNG as at March 2019.

¹ Underlying EBITDA means EBITDA excluding non-recurring items (net capital gains/ losses on the sale & leaseback transactions of real estate assets). Data as at 2018 (except for store data). Store data as at June 19. Reported according to IFRS 16.

A unique narrative in the European grocery retail market

Direct exposure to the growing food retail market in Portugal

1 food retailer with 22.7% market share

Most recognized retail brand in Portugal with a unique loyalty programme covering 83% of Portuguese households

Growth track record and FCF generation with best-in-class margin and >40% real estate ownership

To continue growing market share and delivering profitable growth

environment

Comprehensive network of retail formats in urban locations complemented by an unrivalled digital platform

Best-in-class supply chain capabilities and continuous focus on efficiency

REMINDER

A unique narrative in the European grocery retail market

Macro tailwinds continue to support buoyant demand

Source: FMI; Banco de Portugal; AMECO (Jun'19); Eurostat; Portuguese Public Finance Council. ¹ Year-on-year change; Nominal.

(1)

Nominal GDP growth in Portugal remains robust… Driving strong sales growth in the food retail sector

Strengthened leadership position

Source: Planet Retail RNG as at March 2019. Data as at 2018.

Demonstrated by the highest market share increase in grocery retail in Portugal

A unique narrative in the European grocery retail market

To exploit major growth opportunities

To drive traffic	To power up
and basket size	best-in-class efficiency
› Reinforcing the core value propositions › Upholding the exceptional performance of our hypermarket format	› Increasing productivity and efficiency of our operating model › Continuously pushing for a leaner and more effective organization

• › Driving a fast paced store proximity expansion programme
• › Enhancing digital approaches
• › Growing the Health & Wellness business

Sustainable value creation

› Environment › Health & Education › Community › People

Winning core value proposition

• › "Destination stores" located in high-density urban locations
• › Anchored in high-grade shopping centres (c.50%) or in standalone power centres
• › Numerous customer recognition awards

Strong fundamentals… … notably benefiting our distinctive hypermarket format

Continente hypermarkets (red) over population density (grey)

Leading market value positioning (price/ promotions)

Exceptional own brand assortment

Distinctive healthy nutrition offer (range and formats)

Finest fresh product offer

Premium urban locations

DRIVE TRAFFIC AND BASKET SIZE

Critical levers

Source: Company information.

1 Includes External supplies and services plus Employees benefits expense plus Other expenses (as reported in Sonae MC statutory accounts). ² Year-on-year.

³ Carried out between June and November 2018.

New ultra proximity store

• › 1 st store opening (April 2019)
• › 300 to 600 sqm. sales area
• › Streamlined assortment and optimized operating model (e.g. 100% self-service)

Core development levers

• › Modern concept located mainly in cities/ urban areas
• › Carefully tailored assortment (namely in fresh groceries) targeting daily shopping needs

› Relevant pipeline of new store opening opportunities

Porto Preliminary potential locations

Promoting e-commerce and digital culture

Omnichannel offer In-store digital experience Digital culture

• › Loyalty programme app with >800k registered users
• › New digital shopping assistant app rolled-out to 16 stores
• › >120k digital invoice users and >1.2M invoices issued
• › Seamless online & offline offer upgraded with new categories
• › Nationwide delivery coupled with >100 click & collect points
• › Double-digit sales growth and reinforced leadership position

e-commerce platform Data and analytics tools

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• › New analytical models to support decision making
• › Enhanced data science and business intelligence skills
• › Improved efficiency through automation and digitization

Mobile apps

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EXPLOIT MAJOR GROWTH OPPORTUNITIES

31

Source: Company information. ¹ Year-on-year. ² Year to date. Data as of 1H19

new opening in the first half

› One-stop-shop for health & beauty

› New services launched (e.g. hearing tests)

While creating value for all stakeholders

SUSTAINABLE VALUE CREATION

› Wide debate on healthy eating promoted through "Portugal Saudável" conference

› "Escola Missão Continente" educational programme on healthy eating habits

Health & Education Improving people's lives

› >7.5€M in donations to the community in 2018

› Support non-profit projects connected to circular economy and social inclusion

Community

Supporting local needs

People Developing and caring for our associates

› >250 associates earnt their secondary education/ vocational training certificates

› Launch of the flexible work programme with a high adoption rate

Environment

Reducing our environmental footprint

• › 1 st Portuguese retailer to sign the "New Plastics Economy Global Commitment"
• › Own brand packaging to be 100% reusable, recyclable or compostable by 2025 >50

sustainability initiatives over the last 12 months

A unique narrative in the European grocery retail market

Strong

financial performance Clear growth strategy

Sound financial performance

Source: Company information.

• ¹ Underlying EBITDA means EBITDA excluding non-recurring items (net capital gains/ losses on the sale & leaseback transactions of real estate assets).
• ² Net financial debt plus lease liabilities. Data as at 2018 and 1H19. Reported according to IFRS 16.

Exceptional sales growth

+6.2%

total sales growth in 2018, … accelerating in 1H19 to +10% Best-in-class operating profitability

9.8%

underlying EBITDA(1) margin in 2018, … remaining a benchmark in 1H19

Conservative capital structure

<3.5x

year-end total net debt (2) to underlying EBITDA, … with an improving trend in 1H19

Fully on track with our priorities ✓

Remarkable turnover growth…

Source: Company information. L12M: Last 12 months.

4,505 2017 4,308 4,055 2018 L12M@June 19 +6.2% Turnover (€M)

1H18 1H19

37

Resilient margin which remains an industry benchmark

Source: Company information.

¹ Underlying EBITDA means EBITDA excluding non-recurring items (net capital gains/ losses on the sale & leaseback transactions of real estate assets). 2 Includes a one-off positive impact from IFRS 16 adoption on transportation lease agreements. If excluded, underlying EBITDA margin would stay broadly in line with the previous period. Reported according to IFRS 16.

L12M: Last 12 months.

Source: Company information.

¹ Net financial debt plus lease liabilities.

² Underlying EBITDA means EBITDA excluding non-recurring items (net capital gains/ losses on the sale & leaseback transactions of real estate assets). Reported according to IFRS 16.

Delivering on our commitments…

39 Source: Company information.

Company targets (2018)	Targets	FY 2018
Turnover growth	[5.5% - 6%]	6.2%
Underlying EBITDAR and EBITDA margins	Stable	Stable
Year-end net debt to underlying EBITDA (pre-IFRS 16)	c.2x	1.9x
Freehold at year-end	~45%	45%

Source: Company information.

¹ Maintenance and Optimisation.

² Net financial debt plus lease liability.

Medium-term ambitions (2019-21)

50-60 (CNT Bom Dia) 4-8 (CNT Modelo)

Year-end total net debt <3.5x (2) to underlying EBITDA (post-IFRS 16)

~445€M (M&O(1) ) 260-280€M (Expansion) Gross capex (cumulative)

Underlying EBITDA margin Broadly stable

Freehold at year-end >40%

Ambitions

New store openings (cumulative) – Grocery retail

In a nutshell…

Encouraging backdrop setting the scene for overall growth

Clear ambition for the future with growth as a priority

Solid financial performance funding long-standing success

Impeccable strategic execution with very good momentum

Strong business fundamentals underpinning market share gains

✓

✓

✓

✓

✓

Undisputed leadership position on the back of unique multi-format omnichannel business

SONAE SIERRA

FERNANDO OLIVEIRA

43

Text International, vertically integrated, full service Real Estate developer, owner and manager

We develop, invest and manage real estate assets and funds

We manage our own and thirdparty assets

118 Total assets managed

7.2 bi€

100% OMV of owned & co-owned assets

Manage

Full Service Real Estate provider to investors and operators

Since 1989 development has been at the core of our strategy

Develop

Assets		Owned & co-owned
developed	40	assets	77

Typical stake in developments	50%	Open Market Value (OMV) of own stake	2.0 bi€

We own stakes, directly and via partnerships and funds

Development Services Property Management Investment Management

Invest

45

Our focus has been on three key strategic guidelines

Nurture and grow a high quality RE portfolio

Inv.

Port.

Pursue developments selectively Dev.

Continue organic and inorganic services growth

Serv.

Our portfolio is geographically diversified with exposure to mature and emerging economies

Notes:

46 1 Assets held at 3Q2019; 2 Cúcuta recently opened in February 2019; 3 Refers to SSB portfolio, pre-merger with Aliansce; 4 Ongoing development project

OMV Sierra stake (% of total) 52% 9% 5% 12% 1% 1% 19%

We have been rebalancing our portfolio by increasing the focus on dominant core properties

Note: Dominant Core Assets: Centro Colombo; NorteShopping; Centro Vasco da Gama; CascaiShopping; PlazaMayor (SP); ParkLake (RO); Parque Dom Pedro (BR) All financial figures are from Proportional management accounts

1. Plus 37 ORES Socimi assets

NAV @ Sierra's share % of total

Our portfolio is underpinned by strong fundamentals and growth momentum

The markets in which we operate present materially different dynamics from the Anglo-Saxon markets (1/2)

0.37

No department stores in our GLA vs 49% in USA

Significantly lower high street retail due to regulatory and cultural factors

⁵⁰ Source: McKinsey; Euromonitor; Eurostat; World Bank; Observador Cetelem; Surveys Note: Data on this slide refers to Portugal only

Tourism revenues growing at 11.1% CAGR (13-18)

68% concerned about payment security on ecommerce websites vs 25% in EU

All age groups buy less frequently online than peers (15-27pp differences)

The markets in which we operate present materially different dynamics from the Anglo-Saxon markets (2/2)

We are consistently and proactively evolving our portfolio Inv. to the exciting and dynamic retail market trends Port.

Upsizing of key retailers and creation of iconic flagships

Categories less exposed to e-commerce

New tenants and innovative retail concepts

Reinforcing and innovating customer experience and entertainment components Inv.

Port.

The Shopping Centre as entertainment hub Improving shopping centre experience and ease of shopping

Support and accelerate our tenants' omnichannel offering

Technology infrastructure enabling state of the art omnichannel platforms

Inv. Port.

2.0 bi€ Aliansce Sonae Market cap

Creation of the largest Brazilian shopping centre operator through merger of SSB and Aliansce

Net Revenues EBITDA AuM States Owned GLA Total GLA Employees 201 M€ 145 M€ 40 14 811 k sqm 1,194 k sqm >2,500

The creation of Aliansce Sonae has led to a re-rating of the Brazilian investment

Other value creation levers

Exposure to a high potential emerging market

Upside potential from synergies

Downside risk minimized through put option on listed

Aliansce Sonae shares

Historic investment and value creation bi€

Developments will continue to be a core pillar of our growth strategy Dev.

• A. Growth on emerging markets via greenfield developments
  • •Inaugurated the first Shopping Centre in Colombia
  • Looking to increase presence in Morocco
  • Scouting additional opportunities
• B. Maximizing value in strategic portfolio

Main Focus

In mature markets, we will focus on continuing to maximize value in our strategic properties

Properties under development

(@ Sierra stake – estimated¹ )

182 M€

Dev. Margin (on average)

30%

Ongoing Projects (owned & co-owned) 5

Examples

Investment Management

European Innovation Award - First Store by Alexa 2018

"Best Retail/Shopping Developer" in Western Europe 2019

A vertically integrated full Real Estate services platform

1 OMV at 100% Note: All financial figures are from proportional management accounts

Property Management

Best performing specialist fund for Portugal 2018 c.4.6 bi€ Managed in 5 retail funds¹

Best-in-class Property management and leasing services

118 Assets Managed

Designing, licensing and developing real estate assets customized to our clients requirements

51

Active 3 rd party contracts

First class investment services to a portfolio of real estate funds and operating assets

Serv.

All of this with ESG at the core of everything we do

Our sustainability practices across Sonae Sierra portfolio have enabled our

company to avoid costs of over 25 M€ in 2018as a result of energy, water and waste efficiency measures implemented since 2002.

Solid NAV growth complemented by leading services and development platforms

Consolidated Proportional LTV June 2019;

A prudent balance sheet management, with conservative debt levels

62

Our key priorities

Leverage on services know-how & track-record to increase customer base

Pursue selective real estate development opportunities

Continue to evolve portfolio into urban omnichannel marketplaces

Key market trends

Physical stores will continue to play a key role in the omnichannel world

Less shopping centre development opportunities in core markets … more opportunities in adjacent sectors

Trusted and established real estate service providers will play a key role

Increased appetite for real estate from institutional and private investors

Going forward

Increase AuM from institutional & private investors

WORTEN

MIGUEL MOTA FREITAS CEO

The leading digital electronics and appliances player

LONG TERM VISION

A WITH AND A DIGITAL COMPANY PHYSICAL STORES

HUMAN TOUCH

#1 in Portugal

Turnover 1.1 Bn€

Employees

4.800+

Iberian footprint

Unique retail footprint

Invaluable brand and market leader…

… recognized as specialist in technology and trusted advisor

Strong network capillarity…

… with inspiring stores in premium locations, and boosting unique omnichannel proposition

Distinctive digital capabilities…

… fueling a great online experience and strong e-commerce operation

Deep customer knowledge…

… creating a more friendly and relational environment and a truly better experience in services

UEBITDA

Growing performance with undisputed stance in Portugal

NOTE: values prior to 2017 do not include extended warranties

Clear leadership in Portugal

NPS leadership, our biggest gap ever!

37% market share - #1 player

37

29

25 24

19

Worten Player 2 Player 3 Player 4 Player 5

-

Decisive action plan for Spain in place

A Digital Worten

… and more to come!

"A digital company with physical stores and a human touch"

CUSTOMER CENTRIC DIGITAL TRANSFORMATION

"A digital company with physical stores and a human touch"

CUSTOMER CENTRIC DIGITAL TRANSFORMATION

Online sales acceleration

Stores differentiating factor in our omnichannel strategy

Offer Expansion Accelerate Services and extend Product range

differentiating factor in our

Short term objectives

Consolidate leadership in Portugal

Improve profitability in Spain

differentiating factor in our omnichannel

SONAE FASHION

LUÍS REIS CEO

2012 - 2015

• Diversified portfolio, including Electronics, Sports and Fashion retail
• Difficulties to quickly transform value propositions for all brands

• Pressure to secure internationalization to make up for domestic sales loss

• Portfolio streamline, with the spin-off, merger or closure of non-fashion assets

• Addition of fashion brands to our portfolio, Losan and 50% of Salsa
• General optimization of our channels/geographies' portfolio and our operational assets
• Strategy focused on improvements across most dimensions of the company to become fashion-ready
• Transformational Plan launched to be rolled out in 3 years and achieve a more Fashion, Digital and Agile company

2015 - 2018 2018 - 2021

In 2018 Sonae Fashion began its path to become a fashion-oriented company within the Sonae universe

O F F I C E S O W N S T O R E S F R A N C H I S I N G

400 OWN AND FRANCHISED STORES

5,000+ WHOLESALE POINTS OF SALE

80+ COUNTRIES

3,000+ EMPLOYEES

Today, Sonae Fashion is a global company with presence around the world

Sonae Fashion has been growing consistently...

…while sustaining its market share for the 4th consecutive quarter

Omnichannel L4L, Sales Growth %

78

Our brands have been showing positive sales performance in the recent quarters

L4L OMNICHANNEL SALES EVOLUTION YOY %

with a success story and outstanding performance, built upon key differentiation factors

GOOD POSITIONING WITHIN A GOOD MARKET SEGMENT

INDUSTRIAL HERITAGE

OUTSTANDING OPERATIONAL SKILLS

DIFFERENTIATED DENIM PRODUCTS

A solid position in a market niche as a Feminine Denim Brand with global reach but less intense competition

Differentiated denim products that create an extraordinarily loyal customer base

Capacity to produce and wash/finish denim fast, and ability to innovate with a proximity to a wide network of apparel manufacturers

Very competitive logistics, successful and profitable online operation, remarkable assisted sales model at the stores and efficient and flexible IT infrastructure

Salsa is a denim expert brand…

FRANCHISING & WHOLESALE

OMNICHANNEL

+7% L4L sales growth in 1H'19, through a 100 stores network and digital platforms. Digital growth of +36% in 1H'19, reaching 13% weight on total sales.

27 franchised stores and over 2,000 points of sale in 40 countries, which include wholesale and department store

corners.

Salsa has a solid international footprint through 120 stores and 2,000 points of sale

Reinforced executive team, including a new CEO and Chief Product Officer

Fine-tune Salsa's brand promise, building upon Salsa's DNA, repositioning for global reach

Create a digital centric organization 100% focused on the customer

Develop a sizeable growth platform in Spain, creating the basis for further international growth

Looking forward, Salsa will play a key role in Sonae Fashion growth

Revision of the Digital & IT architecture and implementation of new e-commerce platforms with Salesforce

Outsourcing of the logistics operation to DHL and migration of Losan's logistics to Azambuja

Launch of Fashion Lab, an internal incubator program with 2 brands already launched

On a transversal side, we are implementing a major transformational plan to become more…

SONAE FASHION HEAD OF PEOPLE & TALENT
MO HEAD OF PRODUCT
MO CREATIVE DIRECTOR
SALSA HEAD OF PRODUCT
SALSA CEO
LOSAN HEAD OF PRODUCT
SONAE FASHION HEAD OF DIGITAL & IT

While reinforcing our executive teams with talent from the fashion industry

84

…MORE DIGITAL

…MORE PROFITABLE

Sonae Fashion will keep evolving into a fashion-ready company while becoming …

SONAE FINANCIAL SERVICES

LUÍS REIS CEO

In 2015, the Portuguese financial services sector presented a huge opportunity…

RECOVERING ECONOMY

DIGITAL AS THE NEW NORMAL

• Traditional banks increasing commissions
• Rapid digital development

CREDIT GROWTH

• Growing GDP, with positive outlook
• Declining unemployment rate +2% GDP YOY GROWTH 2015

NEW REGULATION

• Double digit growth in credit agreements • Solid growth in all credit-based products +15%

• Regulatory framework threatening traditional banks • PSD1 creating favorable conditions for payment services across Europe

• • +17%

CONSUMER CREDIT YOY GROWTH 2013-15 PERSONAL LOANS YOY GROWTH 2013-15

+38%

CONSUMERS USING DIGITAL BANKING OVERALL GROWTH 2011-15

-

…and Sonae FS was created to tackle that opportunity, combining the best of Fintech with Sonae's DNA

Large Customer base

Entrepreneurial mindset

Universo card is our core product, using innovative functionalities to simplify our customers' financial lives

INNOVATIVE FUNCTIONALITIES

• BUILT IN INSTALLMENT OPTIONS
  • 3x
  • 6x
  • 12x

TOP DIGITAL EXPERIENCE

• Real time balance
• Send/ask for money and split bills
• Loans/Insurance subscription

MULTIPRODUCT

• Purchases & Service payments
• Balance Transfers
• Cash withdrawals

Universo card track record has been outstanding, and improving every year since launch

OUTSTANDING TRACK RECORD

+31% 2016-18 YOY PRODUCTION GROWTH

UNIVERSO CARD PRODUCTION M€

Leveraging Universo's success Sonae FS created a complete financial ecosystem with excellent results

Personal Loans

Payments

Insurances

Going forward, our strategy is to keep creating value for our customers, setting the basis for further growth

In order to keep growing we must remain focused on delivering what our customers want and cherish

Grow customer base

Improve existing offer

Focus on customer experience

Launch new products

Our value proposition will continue to be built integrated in a value creator ecosystem

Target large customer base

Design retail oriented solutions

Simplify customers' buying process

Leverage top of mind retail brands

Our future (and our present) is digital based, and we are already far ahead in the game

FOSTER DIGITAL

Fully implement digital on boarding

Enhance customer engagement

Convert all customer to digital channels

Simplify access to all financial products

35% DIGITAL CUSTOMERS +128% 2015-18 YOY GROWTH

Since launch, Sonae FS has been showing double-digit growth and reached 6M€ of Underlying EBITDA in 2018

Our vision is to simplify people's financial lives, assuming a leading role as an integrated financial services provider

Convey the benefits of inclusive and personalized financial solutions to an enlarged number of people and families...

…being a major provider of financial solutions by leveraging Sonae's unique ecosystem and applying strong analytics while fostering the core retail business...

MISSION STRATEGIC POSITIONING

INSURANCE ECOSYSTEM

LOAN SPECIALIST

PAYMENT SOLUTIONS PROVIDER

TARGETED OFFERS ENABLER

SONAE IM

EDUARDO PIEDADE

Starting Point

• Tech oriented investments starting early 2000

• International Focus
• Portfolio Management

• Build and manage a portfolio of world class tech-based companies

• Active investor

• Retail Tech
• Telco Tech
• Cybersecurity

WHERE?

• Seed / scale up / buy-outs
• Minority & majority stakes
• HOW? Financial returns
  • Group linkages

GOALS

Sonae IM approach

DEEP EXPERTISE in Telecom, Retail and Cybersecurity

HANDS-ON investment team with strong involvement on day-to-day operations

ENLARGED NETWORK

Be part of SONAE GROUP

• 168€M+ invested
• 108€M+ in Active Portfolio, 29 companies + AVP Funds

WeDo Technologies/ Saphety

Armilar Venture Partners

Cybersecurity Group

Cybersecurity Group

Main Challenges

Reinforce scale and capabilities in managed services and foster presence in current geographies

Organic Growth

Further pursue buy & build opportunities in a very active M&A context

Buy and Build Plan

Elaborate and execute the convergence plan for merging operations

Convergence Plan

WeDo Technologies/ Saphety

• Stable performance
• Tested organic & M&A additional pockets of growth
• Higher value creation by selling the business
• €70M + Cash-in

Armilar Venture Partners

• Secondary LP transaction and participating in the GP for a limited period of time
• 2 stellar companies in the portfolio: Outsystems & Feedzai
• Relevant Capital Distribution received last year

• Distinctive team, technology and investor base
• Sizable opportunity, tackling key costumer pains
• Strong track record
• Stakes in high-growth international companies

• Assess best deals at our core investment themes and exploring adjacent arenas
• Execute value creation plans in each investment to maximize the value of the portfolio
• Focus on cash proceeds and returns
• Continue promoting strong linkages with Sonae Businesses

Recap of key messages

• Active Investor in the tech scene at a global scale
• Solid expertise, distinctive value proposition
• Good track record
• Focus on returns and linkages to Sonae Businesses

NOS AND ISRG

JOÃO DOLORES GROUP CFO

Sonae's presence in telecoms and sports retail has been a long history of growth and value creation

As Optimus and Sport Zone reached maturity, strategic alternatives were considered and executed

As Optimus and Sport Zone reached maturity, strategic alternatives were considered and executed

The combination of Zon and Optimus created NOS, a unique player prepared for market convergence

• Large customer base
• − 1.5M subscribers of Pay-TV (58% share)
• − 800k subscribers of Triple play (68% penetration)
• − 2.6M subscribers of mobile (18% share)
• The largest NGN coverage
• The best mobile network
• A proven track record of innovation
• 800M€ of synergies (NPV)
• Strong balance sheet

REMINDER

Since the merger, NOS focused on growing market share and materializing identified synergies

REMINDER

Turnover and EBITDA margin evolution

…while creating shareholder value and maintaining a solid financial strength

Today, NOS is the best communications and entertainment group in Portugal

Communications	Audiovisuals	Cinemas	ZAP	SPORT TV
100%	100%	100%	30%	25%
1,506 M€	63 M€	63 M€	196 M€	187 M€

4.5M of homes passed 1.2M 3,4&5P subscribers (37.5% share)¹ 4.8M mobile subscribers

Going forward, NOS will keep focused on customer centricity and building a fitter operating model

As Optimus and Sport Zone reached maturity, strategic alternatives were considered and executed

ISRG is the result of a partnership between Sonae and JD Sprinter…

Iberian Sports Retail Group

• Greater scale in private labels
• Stronger relationship with main brands
• Winning store formats and operating models

11% Iberian market share

>600 M€ turnover 1

…resulting in a portfolio of brands with increased exposure to sports lifestyle and fashion segments…

1

International & licensed brands in 2019 [vs. 57% in 2017]

…and a more international presence for Sonae, through a network of 345 stores

All in all, ISRG's performance after the merger has been very positive and ahead of the initial plan 1H 2019 vs. 1H 2018

Going forward, growth and profitability improvements should keep driving our business

Strategic guidelines Financial targets (medium-term)

Full integration and synergies grasping

Commercial operational excellence

E-commerce leadership in Iberia

128

All in all, NOS and ISRG operations were a clear source of value creation for Sonae

1 Sonae's share of Sonaecom market cap as of 13/12/2012 (one day before the merger announcement) + 20% stake acquisition pre-merger 2 Sonae's share of NOS market cap as of 30/09/2019

3 Sport Zone EV calculated using the EBITDA market multiples of EBITDA for 2017 results

4 Sonae's share of ISRG EV calculated using the EBITDA market multiples for L12M 1H'2019 results

Closing remarks

Cláudia Azevedo - CEO

HOW WE ADD VALUE

JOÃO GÜNTHER AMARAL GROUP CDO

Designed from inception to

• Innovate and grow
• Change passionately
• Be prepared and adapt
• Learn continuously
• Be long living company

60+ years perfecting

• Customer Knowledge
• Talent Attraction
• Cost Effectiveness
• Knowledge Sharing
• Management Systems

Values, culture and purpose

• Growth
• Profitability
• Trust
• Value

OF VALUE

Sonae was thoughtfully designed to be a long-living company

Common customers

Sonae accelerates value creation through common levers

Common customers

Sonae accelerates value creation through common levers

Sonae reinvents businesses by recombining existing assets

• Sonae IM: portfolio of tech companies focused on existing businesses
• Universo Card: credit card addressing existing customers needs
• Health and Wellness: created based on existing competencies

Common customers

Cross-selling opportunities emerging from our unique common assets

Common Customers (selected examples)

• Power Centres
• Cross format elasticity enables rightsizing
• Shopping Centres with great anchors
• Leading loyalty programs
• Over 18 years omnichannel experience

Cross-selling opportunities emerging from our unique customer understanding and common locations

KNOWLEDGE, AGILITY, ASSERTIVENESS 850K

Common customers

Optimization through a coordinated approach

Synergies(selected examples)

Procurement:

• IT Licencing and Services
• Media and Advertising
• Energy, Fleet Management, Insurance, Telco

Common Buildings

• TechHub Maia, Madrid Office

Transversal Training Academies

• Management & Leadership, Values & People, Improving our Work

Optimization through a coordinated approach

LOWER COST, NETWORK, MOTIVATION

Common customers

Sharing of best practices and key management processes under broad strategic guidelines

Knowledge Sharing (selected examples)

Sonae Management System for key management processes

• Strategic Planning
• Talent management
• Continuous improvement
• Customer Knowledge

Culture and Values

• Our Way
• Sonae Academies with strong partnerships

Commissions, Consulting Groups and Fora

• Sharing, Networking , Synergies

Knowledge sharing in a healthy competitive environment

Different platforms with specific accountability levels

Broad scope of topics with diversified team participation

Sonae is a worldwide trusted brand

Common customers

Brand Recognition (selected examples)

• Customers trust Sonae
• Employees are proud to work at Sonae
• Suppliers trust Sonae
• Competitors respect Sonae
• Academia trusts Sonae
• Public Institution trust and respect Sonae
• Associations respect Sonae: ERT, WEF, EuroCommerce,WBCSD,

Exceptional ability to develop talent and to nurture customers

Common customers

Sonae is business accelerator passionate about change with worldwide recognition and respect

Closing remarks

Cláudia Azevedo - CEO

TRACK RECORD OF VALUE CREATION

JOÃO DOLORES GROUP CFO

148 Note: Turnover and EBITDA figures are proportional management accounts (including the contribution of each business with the respective shareholding) 1 Total returns including price evolution and dividends paid as of September 30th 2019

3.9 bi€

NAV [As of 1H 2019]

LTV (holding) [As of 1H 2019]

13%

TSR [CAGR of last 3 years]¹

6.8 bi€

Proportional turnover [L12M 1H 2019]

0.8 bi€

Proportional EBITDA [L12M 1H 2019]

47,000+

Group employees [As of 1H 2019]

Strong operational performance in the last decade…

Note: Turnover and EBITDA figures are proportional management accounts (including the contribution of each business with the respective shareholding). Historic figures exclude businesses that have been sold to ensure a fairer comparison across period

Spain France Euro area (19 countries)

Portugal and Spain growing above the Euro area…

150 Source: Eurostat; Portuguese public finance council; Bloomberg

GDP growth by country, %

… with risk levels on par with major EU economies Sovereign 10-year bond yields, %

UK

Solid returns on invested capital

151 1 RoIC calculated with proportional figures with Sierra at historical cost. EBIT includes capital gains on sales, and in the case of NOS, invested capital is the financial investment.

2018

L12M 1H19

NAV¹ , sum-of-the-parts

bi€ (2008-Jun 19)

+jun 25

Net debt¹ evolution

153 1 Net debt is end of period 2 2019's capital structure excludes lease liabilities for comparability purposes

bi€ (Jun 09; Jun 19)

Conservative leverage levels per building block

Note: figures are pre-IFRS16

1 End of period figures.

2 Net debt figures are average for the period. NAV figures are end of period.

3 From 2018 onwards, net debt figures consider Sonae MC's reorganization

155

2018 onwards

1 Figures excluding Sonae Sierra's cost of financing: 1.1% in 2018 and 1.0% in H119.

2 Does not consider Sonae Sierra (from 2013-17), NOS (full period) and MDS (full period). Excludes the contributions of the joint ventures which consolidated by the equity method.

+jun 25

Low debt costs and long maturities

Analysts recommendations

157

	3 Years	7 Years	15 Years
Sonae SGPS	12.7%	11.6%	6.5%
PSI20	6.8%	3.0%	1.3%
IBEX35	5.8%	7.0%	5.9%
Stoxx Europe Food Retail Index	7.8%	6.1%	2.9%
Eurostoxx Telcos Index	0.0%	5.2%	5.5%
Eurostoxx Real Estate Index	4.5%	9.6%	5.3%

Total shareholder return

CAGR, %

Dividend per share evolution

€ cents paid the following year, CAGR

Strong commitment to the environment…

Carbon footprint Biodiversity Plastic

• - 11% of annual electricity consumption in Sonae Sierra shopping centres
• + 29% of energy production from renewable sources YoY in food retail

• Sponsored the Hall of Biodiversity of Porto University (300 000 €¹ of investment)
• Started reforestation program in burnt areas in Portugal

• Approximately -1 800 tons of virgin plastic used in 2018
• +23 000 students reached in 2018/19 in educational activities

… and to our communities

Community support Diversity and inclusion Flexible work

• 11 M€ in 2018 (+12% YoY) in community support (e.g. Missão Continente, Activshare)
• +0.8 M€ invested in employee support¹

• 25% of women in senior management in 2018
• Reverse mentoring programs in our businesses
• Re-skilling projects for our employees

• Flexible work options (e.g. remote work, unpaid leaves, part-time, …) in several of our businesses

• +7% YoY turnover growth since 2015
• +58% NAV increase since 2008
• Gearing of 0.6 (down from 2.2 in 2009)
• Above-market TSR with DPS growing 5% per year

Economic Social

• +29% of energy production from renewable sources 1

• -
  -

• Decreased 1 800 ton of virgin plastic used in 2018

• 11 M€ of community support in 2018 (+12% YoY)

• Employee support and flexible work options

Closing remarks

Cláudia Azevedo - CEO

CLOSING REMARKS

CLÁUDIA AZEVEDO

We have a very solid starting point

which enables a long term view of economic and social value creation

Best practice corporate

governance including a diverse Board

with independent directors

A unique corporate culture with a clear mission and a robust set of values ✓

A stable shareholder structure ✓

Strong track record of operational and

A portfolio of businesses with leading market positions and strong linkages ✓

Solid capital structure with decreasing leverage levels and low cost of debt

Attractive shareholder returns with

steadily growing dividends

Social and environmental mindset

✓

✓

✓

But we want more. To ensure our long term sustainability, we need to be…

166

Growth is what drives us as it creates opportunities for our people and ensures our sustainability

Why is it important? Selected areas of focus (last 24 months)

International expansion

Growth avenues

Health & Wellness

Technology

Convenience

e-commerce

Financial services

The ability to rapidly adapt to changing circumstances is critical in today's world. This implies more digitally enabled businesses and quicker decisionmaking at all levels

Agile and fashionoriented transformation

Customer and digitaloriented transformation

Why is it important? Selected areas of focus (last 24 months)

Our unwavering commitment to creating value for society at large is well embedded in our mission and we must strive to uphold a culture of performance with purpose

People Social capital

support

Inequalities and inclusive development

Why is it important? Selected areas of focus

169

All in all, we remain focused on achieving economic and social goals

Economic Social

NON-EXHAUSTIVE

Talent retention

New plastics economy global commitment

Paris Pledge for action

It is clear to see what the future for Sonae will be: an unstoppable, insatiable and unshakable quest for success based on innovation and sustainable growth. A journey of reinventing today's success to shape tomorrow's world. A journey always rooted in the same corporate responsibility values. A journey always seeking to create a long living company.

Belmiro de Azevedo, 2014 Sonae Management Report

SAFE HARBOUR

This document may contain forward-looking information and statements, based on management's current expectations or beliefs. Forward-looking statements are statements that should not be regarded as historical facts.

These forward-looking statements are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including, but not limited to, changes in regulation, industry and economic conditions; and the effects of competition. Forward-looking statements may be identified by words such as "believes", "expects", "anticipates", "projects", "intends", "should", "seeks", "estimates", "future" or similar expressions.

Although these statements reflect our current expectations, which we believe are reasonable, investors and analysts, and generally all recipients of this document, are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forwardlooking information and statements. You are cautioned not to put undue reliance on any forward-looking information or statements. We do not undertake any obligation to update any forward-looking information or statements.