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Sonae SGPS

Investor Presentation May 30, 2017

1901_10-q_2017-05-30_4492caaa-d2d2-4ccc-a112-93f15c063ccc.pdf

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1HIGHLIGHTS AND CEO'S MESSAGE

  • Sonae further increased turnover at pace, +6.0% y.o.y. to €1,278 M, despite the adverse calendar effects on retail
  • Sonae underlying EBITDA increased to €49 M in 1Q17, +12.7% y.o.y.
  • Sonae kept a robust capital structure, with financial leverage ratio decreasing from 41.9% to 40.9%

"The year of 2017 began well for Sonae. In a challenging quarter in year-on-year comparison, we grew in all businesses ensuring a profitability in line with our expectations. On a consolidated basis, turnover increased 6% and the underlying EBITDA grew 12.7%, highlighting the positive evolution in specialised retail.

Along with our positive operating performance, we moved ahead along our strategic growth avenues, concluding the acquisition of Brio, which will afford greater dimension and strengthen competencies in the dynamic area of healthy food. In the same way, in the Sports Fashion sector, we signed an agreement with JD Sprinter to create the 2nd Iberian sports player which, combining the assets and competencies that both Groups enjoy in the sector, will foment redoubled ambition in size and profitability.

We continue to benefit from a solid capital structure, with greater maturity on debt and lower financing costs, thus maintaining favorable conditions for the fulfilment of our growth ambitions and continuous improvement of the value propositions we present our customers."

Ângelo Paupério, Sonae Co-CEO

2 SONAE PERFORMANCE AND CAPITAL STRUCTURE

Sonae businesses overview

Million euros 1Q16 1Q17 y.o.y.
Turnover
Sonae Retail 1,201 1,257 4.7%
Sonae Sierra (1) 51 54 4.4%
NOS (1) 370 381 2.9%
Sonae IM 27 33 24.0%
Sonae FS 4 5 28.8%
Underlying EBITDA
Sonae Retail 51 55 6.4%
Sonae Sierra (1) 26 25 -1.5%
NOS (1) 138 144 4.2%
Sonae IM 0.5 0.7 29.2%
Sonae FS -1.2 0.7 -

(1) Consolidated in statutory accounts usingthe equity method.

Sonae consolidated results

Million euros 1Q16 1Q17 y.o.y.
Turnover 1,206 1,278 6.0%
Underlying EBITDA 44 49 12.7%
Underlying EBITDA margin 3.6% 3.8% 0.2 p.p.
Equity method results (1) 13 14 12.2%
o.w. S. Sierra (direct results) 7 8 2.0%
o.w. NOS 5 7 46.7%
Non-recurrent items 62 -1 -
EBITDA 119 62 -47.7%
EBITDA margin 9.8% 4.9% -5.0 p.p.
D&A (2) -50 -48 3.0%
EBIT 69 14 -79.9%
Net financial activity -14 -8 44.7%
EBT 55 6 -88.8%
Taxes -11 2 -
Direct results (3) 43 9 -80.3%
Indirect results -15 0 -
Net income 29 9 -70.1%
Non-controlling interests 1 0 -
Net income group share 30 8 -72.1%

(1) Equity method results: includes direct income related to investments consolidated by the equity method (mainly SonaeSierra and NOS); (2) Depreciations & amortisations includingprovisions & impairments;

(3) Direct results before non-controlling interests.

Sonae net invested capital

Million euros 1Q16 1Q17 y.o.y.
Net invested capital 3,127 3,375 7.9%
Sonae shareholders funds 1,818 1,995 9.7%
Sonae net debt (1) 1,309 1,380 5.4%
Net debt / Invested capital 41.9% 40.9% -1.0 p.p.

(1) Financial net debt + net shareholder loans.

Sonae businesses highlights

  • All businesses posting a positive top line trend;
  • Underlying EBITDA increasing in all businesses (except for Sonae Sierra, due to recent asset sales).

From a statutory standpoint, Sonae consolidated turnover amounted to €1,278 M in 1Q17, posting an increase of 6.0% when compared to 1Q16, with all businesses contributing positively to this evolution.

Sonae underlying EBITDA increased by 12.7%, to €49 M, driven by Retail and by Sonae FS. Sonae underlying EBITDA margin reached 3.8%, representing an increase of 20bps y.o.y..

Sonae EBITDA totalled €62 M, corresponding to an EBITDA margin of 4.9%, down from 9.8% in 1Q16 due to the positive impact, last year, of non-recurrent items (benefiting mostly from the capital gains related to the sale and leaseback transactions completed by Sonae RP in 1Q16), notwithstanding the higher underlying EBITDA and Equity method results in 1Q17.

Sonae net financial activity stood at negative €8 M, improving by €6 M when compared to 1Q16, driven by the y.o.y. decrease in the cost of outstanding debt. The average interest rate of outstanding debt stood at 1.3% on March 31st 2017, maintaining the level registered at the end of 2016, albeit decreasing significantly when compared to 2.0% registered one year ago. It should be noted that Sonae financial results exclude Sonae Sierra and NOS businesses.

Sonae direct results amounted to €9 M, decreasing by €34 M when compared to the 1Q16, driven by non-recurrent items, as underlying EBITDA, Equity method results, D&A, net financial activity and taxes posted a favourable evolution. Sonae indirect results improved by €15 M. It should be noted that indirect results line included the negative effect of NOS mark-to-market in 1Q16.

Sonae continued to reinforce its capital structure. Sonae shareholders' funds stood at €1,995 M in 1Q17, €177 M above 1Q16 and, importantly, net debt to invested capital decreased by 100bps y.o.y., to 40.9%.

Sonae net debt totalled €1,380 M, increasing 5.4% comparing to 1Q16, mostly driven by investment acceleration.

2 SONAE PERFORMANCE AND CAPITAL STRUCTURE

Capital Structure

Net debt to EBITDA - Retail

Capital Structure

Loan-to-value (%) - Holding

Sonae Capex

Million euros 1Q16 1Q17 % of
Turnover
Capex 58 54 4.2%
Sonae Retail 57 51 4.0%
Sonae MC 35 28 3.3%
Worten 6 6 2.8%
Sports and Fashion 7 8 5.3%
Sonae RP 9 8 36.9%
Maxmat 0.1 0.3 2.1%
Sonae IM 2 3 7.4%
Sonae FS 0.03 0.03 0.6%

Average gearing at book value reached 0.7x, slightly decreasing in comparison with 1Q16. Average gearing at market value stood at 0.8x, increasing by 0.2x y.o.y. driven by Sonae's share price decrease (from €1.059, at the end of 1Q16, to €0.948, at the end of 1Q17, after recovering from a minimum of €0.630 in July 2016), notwithstanding the slightly lower average net debt.

Sonae continues to focus on presenting a robust capital structure, optimising funding costs whilst maintaining sufficient back up liquidity and an improved maturity profile. Sonae continued to fulfil its practice of being fully financed for the coming 18 months and at the same time improving its general funding conditions. As of 1Q17, the average maturity profile remained above 4 years.

Retail net financial debt reached €857 M in 1Q17, €217 M above 1Q16, mostly due to the absence, this year, of cash-in related to sale and leaseback transactions, as well as the acceleration of investment and the cash-out related to the acquisition of 50% of Salsa, coupled with the consolidation of Salsa's debt. Retail net debt to EBITDA stood at 2.6x, driven mostly by Retail net debt evolution.

Holding net debt totalled €521 M, decreasing 21.6% y.o.y. and benefiting from the sale of the direct participation at NOS, which took place in June 2016. Loan-to-value ratio of the Holding stood at 11%, benefiting from the lower Holding net debt.

Sonae Capex decreased by €4 M when compared to 1Q16, to €54 M. Sonae Retail, which decreased Capex y.o.y. by 10.5%, to €51 M, contributed significantly for this evolution, namely through Sonae MC, as the remaining divisions kept their investment levels broadly stable.

3 SONAE RETAIL RESULTS

Sonae Retail businesses performance

Million euros 1Q16 1Q17 y.o.y
Turnover 1,201 1,257 4.7%
Sonae MC 830 855 3.0%
Worten 216 218 0.6%
Sports & Fashion 115 144 25.9%
Sonae RP 24 23 -6.0%
Maxmat 15 17 10.6%
Underlying EBITDA 51 55 6.4%
Sonae MC 32 30 -3.4%
Worten 2 3 18.0%
Sports & Fashion -4 1 -
Sonae RP 21 20 -7.0%
Maxmat 0 1 89.4%
Underlying EBITDA margin (%) 4.3% 4.3% 0.1 p.p.

SONAE MC

Sonae retail turnover grew by 4.7% in 1Q17, reaching €1,257 M. This was driven by all businesses except for Sonae RP, which was impacted by a lower level of freehold. Most importantly, retail turnover was able to post a positive performance, despite the negative calendar effect in 1Q17 (no Easter, one weekend less and the leap year), which has a strong influence in the sector's performance.

Sonae retail underlying EBITDA increased from €51 M to €55 M, +6.4% y.o.y.. This evolution benefited from Worten, Sports & Fashion and Maxmat, which together more than off-set Sonae MC smaller contribution in the amount of €2 M, together with Sonae RP lower underlying EBITDA.

Sonae MC turnover increased by 3.0% in 1Q17, reaching €855 M and continuing to further increase its market share, which has been growing consistently over the last 6 quarters. The LfL sales growth stood at negative 1.2%, driven by the previously mentioned calendar effects. Most importantly, we can say with certainty that the LfL sales growth as of April 2017 year-to-date (annulling Easter calendar effect and partially annulling the weekend effect) was positive.

Sonae MC underlying EBITDA margin reached 3.6%, decreasing 20bps when compared to 1Q16. This reflected the still demanding competitive environment, marked by intense promotional activity, Sonae MC continuous investment in improving its value proposition – in which a considerable effort in price perception is included – as well as the store network expansion through convenience formats. It should be noted that the calendar effect has also had a negative effect in profitability evolution.

Already in 2Q17, Sonae reached an agreement to acquire 100% of BRIO's share capital. BRIO is the first organic supermarket chain launched in Portugal and includes 6 stores with convenience locations in Lisbon area. This acquisition represents a further step in Sonae MC strategic aim of growing its presence in the Health and Wellness segment and follows the agreement for the acquisition of a 51% stake in Go Natural restaurants and the opening of the first supermarket entirely dedicated to healthy food, both in December 2016. Following this transaction, Sonae MC will complete a network of 7 stores in this segment.

3 SONAE RETAIL RESULTS (continued)

WORTEN

Worten turnover amounted to €218 M in 1Q17, increasing by 0.6% y.o.y., impacted by negative calendar effect, and corresponding to a neutral LfL sales growth performance. Particularly in Portugal, Worten continued to reinforce its leadership with market share gains, both in offline and especially in the online channel. We would like to add that Worten LfL sales growth as of April year-to-date (annulling Easter calendar effect and partially annulling the weekend effect) grew more than 3%.

Regarding its store network, Worten continues to work on square metres optimisation, which also encompasses the opening of new stores. It is worth highlighting the very positive performance of the e-commerce operation, both in Portugal and Spain, driven by the recently renewed e-commerce platforms. Importantly, the Portuguese e-commerce operation grew by 62% and the Spanish operation grew more than 30% y.o.y. in 1Q17.

Underlying EBITDA performance increased by 18.0% when compared with 1Q16, reaching €3 M in 1Q17, backed by a material improvement in Spain.

SPORTS & FASHION

In the Sports & Fashion division, turnover increased by 25.9% in 1Q17, to €144 M, despite the negative calendar effects, particularly Easter, which affects all the brands, especially Zippy. The top line performance benefited both from the original portfolio, as well as from the contribution of recent acquisitions. Most importantly, the division continued to register a positive trend in sales per sqm.

In the original portfolio, LfL sales growth as of April year-todate (annulling Easter calendar effect and partially annulling the weekend effect) was clearly positive. Also considering the performance as of April year-to-date, it is worth noting the performances of MO, which increased LfL sales by 10%, and of Zippy, which increased LfL sales by 8% in Iberia.

The Sports & Fashion underlying EBITDA increased €5 M when compared to the same period of 2016, reaching €1 M and benefiting from the positive evolution of all the businesses included in the portfolio, notwithstanding the greater contribution of recent acquisitions.

3 SONAE RETAIL RESULTS (continued)

SONAE RP

Turnover and Underlying EBITDA evolution

RP Portfolio

as % of Gross Book Value

Sonae RP is responsible for the management of Sonae's retail real estate portfolio. As of March 31st 2017, its portfolio presented a gross book value amounting to €1,319 M, equivalent to a net book value of €914 M and included 21 Continente stores, 62 Continente Modelo stores and 26 Continente Bom Dia stores.

In the last few years, Sonae RP implemented an asset monetisation strategy to reduce freehold levels. Particularly in 1Q16, 3 sale and leaseback transactions in the amount of €230 M were accomplished, equivalent to a capital gain of €64 M (which had a positive impact in non-recurrent items line). In 1Q17, Sonae RP did not complete any sale and leaseback transaction. Accordingly, Sonae MC's freehold stood at 50%, keeping the target reached at the end of 2016. In the specialised retail (Worten and Sports & Fashion), the freehold stood at 21%.

Sonae RP turnover totalled €23 M, less €1 M when compared to the 1Q16, posting a small reduction driven mostly from the freehold reduction between the two periods.

The underlying EBITDA stood at €20 M, corresponding to an underlying EBITDA margin of 87.0%.

4 SONAE SIERRA RESULTS

Operational Indicators

1Q16 1Q17 y.o.y.
Footfall (million visitors) 103 101 -2.0%
Europe & New Markets 78 78 -0.4%
Brazil 25 23 -7.2%
Occupancy rate (%) 95.0% 96.3% 1.3 p.p.
Europe 96.0% 97.0% 1.0 p.p.
Brazil 92.2% 94.3% 2.1 p.p.
Like-for-Like (LfL) tenant sales
Europe 5.3% 0.1% -
Brazil (local currency) -0.1% 4.6% -
Tenant sales (million euros) 963 1,058 9.8%
Europe (million euros) 710 736 3.6%
Brazil (million euros) 253 322 27.3%
Brazil (million reais) 1,087 1,077 -0.9%
Nº of shopping centres owned and/or
managed (EOP)
68 64 -4
Europe 57 54 -3
Brazil 11 10 -1
Nº of shopping centres owned/co
owned (EOP)
44 46 2
Europe 35 37 2
Brazil 9 9 0
GLA under Management ('000 sqm) 2,333 2,293 -1.7%
Europe & New Markets 1,828 1,811 -0.9%
Brazil 505 481 -4.7%

Financial Indicators

Million euros 1Q16 1Q17 y.o.y.
Turnover 51 54 4.4%
EBIT 25 25 -1.3%
EBIT margin 49.4% 46.7% -2.7 p.p.
Direct results 15 15 1.7%
Indirect results 2 1 -53.1%
Net results 17 16 -4.2%
… attributable to Sonae 8 8 -4.2%

Sonae Sierra continued its development activity, having in pipeline the following projects: Nuremberg (Germany), Málaga McArthurGlen Designer Outlet (Spain), NorteShopping Expansion (Portugal), Colombo Expansion (Portugal), Jardín Plaza Cucuta (Colombia) and Zenata (Morocco). ORES Socimi, the property investment vehicle recently launched with Bankinter, began trading and made its first acquisitions in Iberia. Accordingly, in March 31st 2017, the Investment and Development Properties attributable to Sonae Sierra reached €2,110 M, €12 M above 2016 year-end, driven by the on-going investments, the latest acquisitions and the positive exchange rate effect in the Brazilian real.

In operational terms, Europe and Brazil continued to deliver a positive performance. In Europe, despite the adverse seasonal effect of Easter, tenant sales grew by 3.6%, corresponding to a LfL tenant sales of 0.1%, and in Brazil, -0.9% and 4.6% respectively. The occupancy rate improved in both regions, leading to a growth in global occupancy rate to 96.3% by the end of March 2017, a value that compares with 95.0% on March 31st 2016.

We would like to highlight that 1Q17 was an important period for Sonae Sierra's refinancing activity. The company refinanced more than €230 M in credit lines (corresponding to 2 shopping centres in Portugal) and improved overall credit conditions.

Sonae Sierra turnover totalled €54 M, an increase of 4.4% when compared to the same period of 2016. The EBIT performance was nearly flat, reaching €25 M in 1Q17, mostly due to the positive impact of ParkLake, which partially compensates the 2016 assets disposals, corresponding to an EBIT margin of 46.7%. Direct results reached €15 M, posting a neutral performance when compared with 1Q16. Indirect results stood at €1 M in 1Q17. Since Sonae Sierra only values its assets on a semi-annual basis, the indirect results were not impacted by real estate valuations.

NAV reached €1,441 M at the end of 1Q17, almost €23 M above December 2016, reflecting the net result of the period and the positive impact of the Brazilian Real appreciation. Loan-to-value stood at 28%, in line with 2016 year-end.

5 NOS RESULTS

Financial Indicators

Million euros 1Q16 1Q17 y.o.y.
Operating revenues 370 381 2.9%
EBITDA 138 144 4.2%
EBITDA margin 37.2% 37.7% 0.5 p.p
Net results 24 31 28.7%
Capex 95 87 -8.4%

Operational Indicators

('000) 1Q16 1Q17 y.o.y.
Total RGUs (Net adds) 130 78 -
Convergent RGUs (Net adds) 134 111 -
Mobile (Net adds) 50 31 -
Pay TV (Net adds) 18 8 -
Total RGUs 8,595 9,155 6.5%
Convergent RGUs 2,988 3,498 17.1%
Convergent customers 615 697 13.5%
ARPU/Unique subscriber with
fixed access (euros)
44 45 2.2%

NOS published its results on April 27th 2017, which are available at www.nos.pt.

NOS continued to present a solid growth in the main areas of the business.

Operating revenues increased by €11 M in 1Q17, to €381 M, sustaining the positive top line performance across all segments.

EBITDA amounted to €144 M in 1Q17, improving by 4.2% versus 1Q16 and corresponding to an EBITDA margin of 37.7%.

Net results registered a significant increase, improving by 28.7% when compared to the same period of 2016, to €31 M.

NOS continued to grow its customer base and the number of RGUs, which increased by 6.5%, to 9,155 thousand, as a result of growth in all segments. Convergent RGUs increased to 3,498 thousand, + 17.1% y.o.y..

NOS Free Cash Flow reached €58 M in 1Q17, performing a considerable increase when compared to €10 M generated in 1Q16 (and €6 M in 4Q16). This was the result of a stronger Operating Cash Flow, coupled with the positive effect of the sale of Optimus FttH network to Vodafone in the amount of €24 M.

During the 1Q17, NOS market capitalisation decreased by 9.4%, corresponding to a share price decrease from €5.64 to €5.11.

The PSI-20, the main Portuguese index, increased its market capitalisation by 7.0% in the same period.

6 SONAE IM RESULTS

Portfolio

Controlling stakes Minority stakes
WeDo Technologies
S21Sec
Saphety
Bizdirect
InovRetail
Bright Pixel
AVP Funds
Stylesage
Movvo

Turnover and Underlying EBITDA evolution

7 SONAE FS RESULTS

Financial Indicators

Million euros 1Q16 1Q17 y.o.y.
Production 151 180 19.2%
Turnover 4 5 28.8%
Underlying EBITDA -1.2 0.7 -
Underlying EBITDA margin -27.9% 12.2% 40.1 p.p.

Sonae IM has been implementing an active portfolio strategy, with the clear objective of building and managing a portfolio of tech-based companies linked to retail and telecommunications, leveraging the strong Group's expertise in these two verticals and aiming to develop innovative solutions, with an international focus.

Sonae IM's core areas of interest include business analytics solutions, mobility solutions for retail, in-store technologies, fraud assurance and cybersecurity solutions.

Turnover increased by 24.0%, to €33 M, in 1Q17. Underlying EBITDA increased by €0.2 M, to €0.7 M, reaching an underlying EBITDA margin of 2.1%.

Sonae FS was created at the end of 2015 with the objective of fostering financial services in Sonae retail. Sonae FS offer includes: Credit, mostly through the Universo credit card, with special payment options at Sonae stores while having global acceptance across the Mastercard network. Additionally, Universo grants access to the several loyalty cards of Sonae retail banners. Credit offer also includes personal loans, store credit to customers and products sale at Universo online store; pre-paid cards (Cartões Dá), with B2B and B2C offers; Continente Money Transfer, a reliable service for money transfers across the globe; and insurance, presently focused on credit insurance. Sonae FS also includes MDS (which will be accounted for using the equity method), a global insurance & reinsurance brokerage and associated risk consulting services with direct operations in Iberia, Brazil and Portuguese speaking countries in Africa. MDS is the largest broker in Portugal and the largest independent broker in Brasil.

Sonae FS turnover increased by 28.8%, to €5 M, in 1Q17. Underlying EBITDA reached €0.7 M, representing an EBITDA margin of 12.2%.

In a period of slightly more than one year after its launching, Universo card operation has been growing considerably major key performance indicators such as the number of subscribers, which increased by 83.0%, surpassing 455 thousand subscribers, and the total production, which stood at €124 M, increasing by 45.3% y.o.y..

8 CORPORATE INFORMATION

Main corporate events in the 1Q17

March 9th 2017

Sonae agreed with JD Sports Fashion Plc (JD Group), and JD Sprinter Holdings (JD Sprinter), a Memorandum of Understanding (MoU) which would see the combination of the JD Group's existing businesses in Iberia and JD Sprinter, with Sport Zone's business.

This MoU establishes the key parameters for the creation of an Iberian Sports Retail Group that will have as shareholders the JD Group, Sonae and the family shareholder of JD Sprinter, with shareholdings of approximately 50%, 30% and 20%, respectively.

March 17th 2017

Sonae Sierra and Bankinter launched their recently created Socimi on the Alternative Stock market. This listed real estate investment company was created in December 2016 on a 50:50 basis, and its major investment focus is on hypermarkets and supermarkets, retail parks and high street retail. Shopping centres will not be included in the asset portfolio.

Subsequent events

April 26th 2017

Sonae announced that it reached an agreement with the shareholders of BRIO – Produtos de Agricultura Biológica, S.A. (BRIO) for the acquisition of 100% of BRIO's share capital. BRIO is the first organic supermarket chain launched in Portugal and operates six supermarkets specialised in organic food, all of them with convenient locations in the Lisbon area.

April 28th 2017

In the Annual General Assembly, which took place on April 28th 2017, the company's shareholders approved, amongst other items, the distribution of a gross dividend per share, relative to the 2016 financial year, in the amount of 0.04 euros. This dividend, which was paid on May 15th 2017, corresponded to a dividend yield of 4.6%, based on the closing price as at December 31st 2016, and to a payout ratio of 54% of the consolidated direct income attributable to equity holders of Sonae.

May 3rd 2017

Sonae announced to the market Magallanes Value Investors' qualified shareholding amounting to 2.03% of Sonae's share capital.

9 ADDITIONAL INFORMATION

Methodological notes

The consolidated financial information contained in this report was prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union. The financial information regarding quarterly and semi-annual figures was not subject to audit procedures.

Glossary

Capex Investments in tangible and intangible assets and investments in acquisitions.
Direct results Results before non-controlling interests excluding contributions to indirect results.
(Direct) EBIT Direct EBT - financial results.
EBITDA Underlying EBITDA + equity method results (mainly Sonae Sierra direct results and ZOPT net results) +
non-recurrent items.
(Direct) EBT Direct results before non-controlling interests and taxes.
EBITDA margin EBITDA / turnover.
EoP End of period.
Financial net debt Total net debt excluding shareholders' loans.
Gearing (book value) Average of the last four quarters considering, for each quarter, total net debt (EoP) / total shareholders'
funds (EoP).
Gearing (market value) Average of the last four quarters considering, for each quarter, total net debt (EoP) / equity value
considering the closing price of Sonae shares on the last day of each quarter.
GLA Gross Lettable Area: equivalent to the total area available to be rented in the shopping centres.
Indirect results 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 the 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.
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).
Net asset value (NAV) Open market value attributable to Sonae Sierra - net debt - minorities + deferred tax liabilities.
SONAE – 1Q17 RESULTS
Net debt Bonds + bank loans + other loans + financial leases + shareholder loans - cash, bank deposits, current
investments, and other long-term financial applications.
Net invested capital Total net debt + total shareholders' funds.
Open market value
(OMV)
Fair value of properties in operation and under development (100%), provided by independent
international entities.
Other income Dividends.
Others + E&A
(Eliminations &
adjustments)
Intra-groups + consolidation adjustments + contributions from other companies not included in the
identified segments.
Other loans Bonds, leasing and derivatives.
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.

Note: Sonae implemented, this quarter, the following changes in its reporting structure: (i) MDS will start to be consolidated through the Equity Method and included in Sonae FS after the formalisation of a single share transaction; (ii) Maxmat is reported under "Sonae Retail", together with Sonae MC, Worten, Sports & Fashion and Sonae RP; and (iii) Media and Tlantic are reported under "Others + E&A". In order to assure comparability, the 'Profit and Loss Statement' historical figures were restated accordingly.

Sonae statement of financial position

Million euros 1Q16 1Q17 y.o.y.
TOTAL ASSETS 5,072 5,489 8.2%
Non current assets 3,742 4,037 7.9%
Tangible and intangible assets 1,791 1,969 10.0%
Goodwill 601 624 3.8%
Investment properties 1 0 -
Other investments 1,252 1,357 8.4%
Deferred tax assets 66 68 3.8%
Others 33 19 -41.6%
Current assets 1,330 1,453 9.2%
Stocks 617 693 12.3%
Trade debtors 102 118 15.6%
Liquidity 269 286 6.2%
Others 343 357 4.2%-
SHAREHOLDERS' FUNDS 1,818 1,995 9.7%
Equity holders 1,686 1,825 8.2%
Attributable to minority interests 132 170 29.0%
LIABILITIES 3,254 3,494 7.4%
Non-current liabilities 1,430 1,580 10.5%
Bank loans 576 723 25.6%
Other loans 706 703 -0.5%
Deferred tax liabilities 72 111 55.0%
Provisions 39 21 -45.4%
Others 37 22 -42.1%
Current liabilities 1,824 1,914 5.0%
Bank loans 249 239 -4.1%
Other loans 56 11 -80.6%
Trade creditors 985 1,027 4.3%
Others 534 638 19.5%
SHAREHOLDERS' FUNDS +
LIABILITIES
5,072 5,489 8.2%

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Condensed consolidated financial statements

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2017 AND 2016 AND 31 DECEMBER 2016

(Amounts expressed in euro)

(Translation of consolidated financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.)

31 Mar 2016
ASSETS Notes 31 Mar 2017 Restated
Note 3
31 Dec 2016
NON-CURRENT ASSETS:
Tangible assets 5 1,610,093,787 1,521,501,596 1,612,469,478
Intangible assets 6 358,811,411 244,353,129 373,509,488
Investment properties - 896,874 879,263
Goodwill 7 623,592,149 619,577,718 653,752,668
Investments in joint ventures and associates 8 1,344,167,461 1,221,647,622 1,362,270,890
Other investments 9 12,734,203 29,881,803 20,784,450
Deferred tax assets 12 68,234,654 65,539,005 61,360,744
Other non-current assets 10 19,001,445 32,537,991 19,226,166
Total Non-Current Assets 4,036,635,110 3,735,935,738 4,104,253,147
CURRENT ASSETS:
Inventories 692,668,545 616,934,131 696,297,968
Trade account receivables and other debtors 11 402,196,721 378,682,893 347,402,443
Investments 9 732,331 65,323,999 4,369,022
Cash and cash equivalents 13 284,832,538 268,286,125 340,920,458
Total Current Assets 1,380,430,135 1,329,227,148 1,388,989,891
Assets available for sale 14 72,431,356 - 19,522,549
TOTAL ASSETS 5,489,496,601 5,065,162,886 5,512,765,587
EQUITY AND LIABILITIES
EQUITY:
Share capital 15 2,000,000,000 2,000,000,000 2,000,000,000
Own shares 15 (111,459,703) (116,574,389) (114,738,086)
Reserves and retained earnings (71,900,015) (227,086,880) (206,669,555)
Profit/(Loss) for the period attributable to the equity holders of the Parent Company 8,379,992 30,081,899 215,073,949
Equity attributable to the equity holders of the Parent Company 1,825,020,274 1,686,420,630 1,893,666,308
Equity attributable to non-controlling interests 16 170,119,240 131,863,164 170,771,866
TOTAL EQUITY 1,995,139,514 1,818,283,794 2,064,438,174
LIABILITIES:
NON-CURRENT LIABILITIES:
Loans 17 1,425,965,357 1,281,960,851 1,209,827,633
Other non-current liabilities 19 21,502,777 37,163,729 21,557,388
Deferred tax liabilities 12 111,197,947 65,687,710 114,370,917
Provisions 22 21,358,071 38,193,127 25,848,118
Total Non-Current Liabilities 1,580,024,152 1,423,005,417 1,371,604,056
CURRENT LIABILITIES:
Loans 17 249,880,728 305,609,310 361,212,410
Trade creditors and other liabilities 21 1,619,095,353 1,515,214,583 1,700,225,496
Provisions 22 3,208,566 3,049,782 3,558,708
Total Current Liabilities 1,872,184,647 1,823,873,675 2,064,996,614
Liabilities available for sale 14 42,148,288 - 11,726,743
TOTAL LIABILITIES 3,494,357,087 3,246,879,092 3,448,327,413
TOTAL EQUITY AND LIABILITIES 5,489,496,601 5,065,162,886 5,512,765,587

The accompanying notes are part of these condensed consolidated financial statements.

CONSOLIDATED INCOME STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2017 AND 2016

(Translation of consolidated financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.)

(Amounts expressed in euro) Notes 31 Mar 2017 31 Mar 2016
Restated
Note 14
Sales 4 1,235,665,235 1,168,928,849
Services rendered 4 42,413,425 37,018,426
Gains and losses on investments - (30,923)
Investment income investments recorded at fair value through profit 9 - (15,263,369)
Financial income 1,835,442 1,363,390
Other income 25 170,352,048 228,554,345
Cost of goods sold and materials consumed (1,025,076,431) (979,128,774)
Changes in stocks of finished goods and work in progress (31,362) 64,391
External supplies and services (172,353,169) (158,222,170)
Staff costs (187,211,728) (174,752,489)
Depreciation and amortisation 5 and 6 (48,114,492) (42,059,926)
Provisions and impairment losses (501,383) (7,776,368)
Financial expense (9,554,859) (15,332,816)
Other expenses (15,824,607) (16,660,851)
Share of results of joint ventures and associetad companies 8.3 14,093,368 12,934,541
Profit/(Loss) before taxation from continuing operations 5,691,487 39,636,256
Taxation 26 2,428,976 (11,491,118)
Profit/(Loss) after taxation from continuing operations 8,120,463 28,145,138
Profit/(Loss) from discontinued operations after taxation 14 510,095 744,659
Consolidated profit/(Loss) for the period 8,630,558 28,889,797
Attributable to equity holders of the Parent Company:
Continuing operations
8,124,434 29,709,494
Discontinued operations 255,558 372,404
8,379,992 30,081,898
Attributable to non-controlling interests
Continuing operations (3,971) (1,564,356)
Discontinued operations 254,537 372,255
16 250,566 (1,192,101)
Profit/(Loss) per share
From continuing operations
Basic 27 0.005485 0.016851
Diluted 27 0.005118 0.015684
From discontinued operations
Basic 27 0.000135 0.000197
Diluted 27 0.000126 0.000184

The accompanying notes are part of these condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE PERIODS ENDED 31 MARCH 2017 AND 2016

(Translation of consolidated financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.)

31 Mar 2017 31 Mar 2016
8,630,558 28,889,797
100,107 (4,485,741)
(6,176,019)
(2,922,343) (2,112,050)
619,787 515,237
(30,808) (8,328)
497,877 (12,266,901)
9,128,435 16,622,896
8,797,231 21,134,901
331,204 (4,512,005)
2,731,134

The accompanying notes are part of these condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE PERIODS ENDED 31 MARCH 2017 AND 2016

(Translation of consolidated financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.)

Rese and
d Ea
Ret
aine
rves
rnin
gs
(Am
ssed
in e
uro)
ts e
oun
xpre
Sha
re
Cap
ital
Ow
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Lega
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Res
erve
Cur
renc
y
Tran
slat
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Rese
rve
Inve
stm
ents
Fair
Val
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Rese
rve
Hed
ging
Res
erve
Opt
ion
Prem
ium
Con
ible
vert
ds
Bon
Oth
er R
ese
rves
and
Ret
aine
d
Earn
ings
Tot
al
Net
Prof
it/(L
oss)
Tot
al
trol
ling
Non
con
Inte
rest
s
(No
te 1
6)
al
Tot
ity
Equ
Attr
ibut
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to
Equ
ity H
olde
rs o
f Pa
Co
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mpa
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Bala
t 1 J
201
6
nce
as a
anu
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2,00
0,00
0,00
0
(123
)
,493
,932
244
,211
,592
1,13
5,80
1
- 272
,950
22,3
13,0
00
(661
)
,255
,246
(393
)
,321
,903
175
,306
,228
1,65
8,49
0,39
3
136
,303
,721
1,79
4,79
4,11
4
Tot
al co
sive
inc
for
the
iod
mpr
een
ome
per
- - - (2,4
64,7
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- (1,5
55,2
16)
- (4,9
27,0
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(8,9
46,9
97)
30,0
81,8
98
21,1
34,9
01
(4,5
12,0
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16,6
22,8
96
n of
solid
ated
fit o
f 20
App
iatio
net
15
ropr
con
pro
Tra
nsfe
lega
l res
d re
tain
ed e
arni
r to
erve
s an
ngs
- - - - - - - 175
,306
,228
175
,306
,228
(175
,306
,228
)
- - -
Divi
den
ds d
istri
bute
d
- - - - - - - - - - - (87,
285
)
(87,
285
)
Obl
fulf
ield
by s
hare
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mpl
igat
ion
att
tion
to e
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- - - - - - - (117
)
,386
(117
)
,386
- (117
)
,386
24,5
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(92,
)
850
h Se
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arly
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(No
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- 6,91
9,54
3
- - - - - (45,
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886
(45,
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886
- 6,87
3,65
7
- 6,87
3,65
7
Part
ial d
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of a
ffilia
ted
ies
r aq
com
pan
- - - - - - - 39,0
65
39,0
65
- 39,0
65
134
,197
173
,262
Bala
t 31
Ma
rch
201
6
nce
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2,00
0,00
0,00
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(116
,574
,389
)
244
,211
,592
(1,3
28,9
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- (1,2
82,2
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22,3
13,0
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(491
,000
,273
)
(227
,086
,879
)
30,0
81,8
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1,68
6,42
0,63
0
131
,863
,164
1,81
8,28
3,79
4
Bala
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(114
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244
,211
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3,84
5,88
9
- 1,94
8,40
5
22,3
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(478
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,441
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(206
,669
,555
)
215
,073
,949
1,89
3,66
6,30
8
170
,771
,866
2,06
4,43
8,17
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Tot
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- - - (30,
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690
- (2,2
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49,5
- 2,69
7,45
2
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,239
8,37
9,99
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8,79
7,23
1
331
,204
9,12
8,43
5
App
iatio
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16
net
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Tra
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- - 3,06
5,01
1
- - - - 212
,008
,938
215
,073
,949
(215
)
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,949
- - -
den
ds d
bute
d
Divi
istri
- - - - - - - (80,
)
000
,000
(80,
)
000
,000
- (80,
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000
,000
(27,
)
938
(80,
)
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,938
Obl
igat
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fulf
ield
by s
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tion
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att
to e
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- - - - - - - 230
,970
230
,970
- 230
,970
24,1
23
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ash
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(No
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tion
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Equ
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- 3,27
8,38
3
- - - - - (664
)
,756
(664
)
,756
- 2,61
3,62
7
- 2,61
3,62
7
han
bsid
Perc
ge i
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ge c
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s
- - - - - - - (287
)
,862
(287
)
,862
- (287
)
,862
(980
)
,015
(1,2
77)
67,8
Bala
t 31
Ma
rch
201
7
nce
as a
2,00
0,00
0,00
0
(111
,459
,703
)
247
,276
,603
3,81
5,19
9
- (301
,118
)
22,3
13,0
00
(345
,003
,699
)
(71,
900
,015
)
8,37
9,99
2
1,82
5,02
0,27
4
170
,119
,240
1,99
5,13
9,51
4

The accompanying notes are part of these condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 31 MARCH 2017 AND 2016

(Amounts expressed in euro) Notes 31 Mar 2017 31 Mar 2016
OPERATING ACTIVITIES
Net cash flow from operating activities (1) (110,353,863) (167,779,636)
INVESTMENT ACTIVITIES
Cash receipts arising from:
Investments 11 21,009,032 -
Tangible and Intangible assets 5 1,373,343 229,741,711
Interests and similar income 481,672 514,372
Loans granted 600 -
Dividends - 1,614
Others 12,468,535 1,100,433
35,333,182 231,358,130
Cash Payments arising from:
Investments (2,250) (374,015)
Tangible and Intangible assets (84,215,434) (69,472,338)
Loans granted (487,043) -
Others (8,893,714) (188,880)
(93,598,441) (70,035,233)
Net cash used in investment activities (2) (58,265,259) 161,322,897
FINANCING ACTIVITIES
Cash receipts arising from:
Investments 537,500 173,261
Loans obtained 1,693,542,870 1,951,392,532
Others - 5,616
1,694,080,370 1,951,571,409
Cash Payments arising from:
Investments (1,370,397) -
Loans obtained (1,571,252,631) (1,946,899,538)
Interests and similar charges (4,575,323) (7,579,769)
Others (303,134) (502,486)
(1,577,501,485) (1,954,981,793)
Net cash used in financing activities (3) 116,578,885 (3,410,384)
Net increase in cash and cash equivalents (4) = (1) + (2) + (3) (52,040,237) (9,867,123)
Effect of foreign exchange rate (107,832) 140,243
Effect of discontinued operations 14 7,417,521 -
Cash and cash equivalents at the beginning of the period 13 323,190,227 270,140,463
Cash and cash equivalents at the end of the period 13 263,840,301 260,133,097

The accompanying notes are part of these condensed financial statements.

SONAE, SGPS, SA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 MARCH 2017

(Translation of consolidated financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails)

(Amounts expressed in euro)

1 INTRODUCTION

SONAE, SGPS, SA ("Sonae Holding") has its head-office at Lugar do Espido, Via Norte, Apartado 1011, 4470- 909 Maia, Portugal, and is the parent company of a group of companies, as detailed in Notes 31 and 32 the Sonae Group ("Sonae"). Sonae's operations and operating segments are described in Note 4.

2 PRINCIPAL ACCOUNTING POLICIES

The accounting policies adopted are consistent with those described in the file of annual financial statements for the year ended 31 December 2016.

2.1 Basis of preparations

The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, issued by the International Accounting Standards Board ("IASB"), and interpretations issued by the IFRS Interpretations Committee ("IFRIC") or by the previous Standing Interpretations Committee ("SIC"), as adopted by the European Union as from the consolidated financial statements issuance date.

Interim financial statements are presented quarterly, in accordance with IAS 34 – "Interim Financial Reporting".

The accompanying condensed consolidated financial statements have been prepared from the books and accounting records of the company and subsidiaries, adjusted in the consolidation process, on a going concern basis and under the historical cost convention, except for some financial instruments and properties investments which are stated at fair value.

New accounting standards and their impact on the consolidated financial statements:

The following standards, interpretations, amendments and revisions were endorsed by the European Union and have mandatory application in future economic exercises:

With mandatory application after 2017:

accounting rules)

IFRS 9 - Financial instruments (establishes the new requirements regarding the classification and measurement of financial assets and liabilities, the methodology for calculating impairment and for the application of hedge 01 jan 2018

after)

IFRS 15 – Revenue from customer contracts (introduces a principles-based revenue recognition framework based on a template to apply to all contracts with customers) 01 jan 2018

The Group did not proceed to earlier adoption of any of these standards on the financial statements for the period ended on the 31 March 2017, since their application is not yet mandatory. The impacts of the above mentioned standards are being analysed by the Group.

The following standards, interpretations, amendments and revisions haven't been, until the date of approval of these financial statements, endorsed by the European Union:

Effective date (for
financial years
beginning on or
With mandatory application after 2017: after)
IFRS 14 –
(Regulatory deferral accounts)
01 jan 2016
IFRS 16 –
Leases (Principles of recognition and measurement)
01 jan 2019
IFRS 10 e IAS 28 (amendments) –
(Elimination
of the inconsistency
between the
requirements of these standards when dealing with the sale or contribution of
assets between an investor and its associate or joint venture)
To be defined
IAS 12 (amendment) -
Income taxes (clarifies
the conditions for recognition and
measurement of tax assets resulting from unrealized losses)
01 jan 2017
IAS 7 (amendment) -
Statement of cash flows (introducing additional disclosures
related to cash flows from financing activities)
01 jan 2017
IFRS 15 (amendment) -
Revenue from contracts with customers (various
clarifications are introduced in the standard to eliminate the possibility of
divergent interpretations of various topics)
01 jan 2018
IFRS 2 (amendment) -
Share-based payments (various clarifications are included
in the standard relating to the recording of cash-settled share-based payment
transactions, (ii) recording changes to share-based payment transactions (of net
settled to equity settlement), (iii) the classification of transactions with net
settlement characteristics).
01 jan 2018
IFRS 4 (amendment) -
Insurance contracts (provides guidance on the application
of IFRS 4 in together with IFRS 9)
01 jan 2018
IAS 40 (amendment) -
Investment properties (clarifies
that the change in
classification from or to investment property should only be made when there is
evidence of a change in the use of the asset)
01 jan 2018
Annual Improvements to IFRS (cycle 2014-2016) 01 jan 2017 e
01 jan 2018
IFRIC 22 -
Transactions in foreign currency and advances (establishes
the date of
the initial recognition of the advance or deferred income as the date of the
transaction for determining the exchange rate of the recognition of the revenue)
01 jan 2018

The Group did not proceed with the early implementation of any of these standards in the financial statements for the period ended on 31 March 2017 since their application is not mandatory, lying in the process of analyzing expected effects of those standards that, with exception of IFRS 16 are not expected to reflect significant impacts.

3 RESTATMENT OF FINANCIAL STATMENT

The Losan Group is a multinational group with its the parent company based in Spain, it specializes in the wholesale business of children's wear. This acquisition was aimed to improve skills in the supply chain and to strengthen international capacity expansion of Sonae through wholesale channels. These companies were incorporated in the consolidated financial statements as at 31 December 2015, date from which Sonae began to exercise control over its activities.

Given the proximity of the acquisition to the end of the year 2015, only in 2016 was it possible to complete the fair value allocation exercise and Goodwill calculation. The impact of the restatement in the statement of financial position of the Group as at 31 March 2016 can be analysed as follows:

31 Mar 2016
Amounts in thousands of euros Before the
restatement
Adjustments to
fair value
After the
restatement
Assets
Tangible and intagible assets 1,766,752 24,691 1,791,443
Goodwill 619,578 (18,960) 600,618
Investments 1,251,529 - 1,251,529
Deferred tax assets 65,539 225 65,764
Other non-current assets 32,538 - 32,538
Non-current assets 3,735,936 5,956 3,741,892
Current assets -
Inventories 616,934 - 616,934
Trade account receivables 102,209 (400) 101,809
Other debtors 276,474 1,417 277,891
Investments 65,324 - 65,324
Cash and cash equivalents 268,286 - 268,286
Current assets 1,329,227 1,017 1,330,244
Total assets 5,065,163 6,973 5,072,136
Liabilities
Borrowings 1,281,961 - 1,281,961
Other non-current liabilities 37,164 - 37,164
Deferred tax liabilities 65,688 6,073 71,761
Provisions 38,193 900 39,093
Non-current liabilities 1,423,005 6,973 1,429,978
Borrowings 305,609 - 305,609
Trade creditors and other current liabilities 1,518,264 - 1,518,264
Total current liabilities 1,823,874 - 1,823,874
Total liabilities 3,246,879 6,973 3,253,852
Shareholders' funds excluding non-controlling interests 1,686,421 - 1,686,421
Non-controlling interests 131,863 - 131,863
Total shareholders' funds 1,818,284 - 1,818,284
Total shareholders' funds and liabilities 5,065,163 6,973 5,072,136

The fair value was determined through various valuation methodologies for each type of asset or liability, based on the best information available. The main adjustments to fair value made under this process were:

  • (i) wholesale and franchise portfolio (+13.1 million euro) valued based on the discounted cash-flow methodology, using for this purpose the discount rates based on the weighted average cost of capital of the segment of the companies (11%) and considering an average customer retention (84% based in historic date). These portfolios will be amortized on a straight-line basis based on the estimated average retention period of the clients (10 years);
  • (ii) Losan brand (+11.6 million euro) was valued based on the methodology of the released royalties, and for which was not estimated a defined useful life; and
  • (iii) contingent liabilities relating to present obligations in the amount of 0.9 million euro;

Additionally, as at 31 March 2017, Sonae signed an agreement for the sale of shares of MDS, SGPS, SA and amended the shareholder agreement foreseeing the loss of control of that subsidiary and becoming a joint venture. In view of this fact, the income statement for the period ended 31 March 2016 was restated, with the entire activity of this subsidiary and its subsidiaries being transferred to the heading "Discontinued operations", see impact in Note 14.

4 INFORMATION BY SEGMENTS

Sonae has in its portfolio five main segments: Sonae Retail, Sonae Sierra, Telecommunications (NOS), Sonae IM and the Sonae FS.

• In Sonae Retail, the group has five segments:

  • Sonae MC is our food retail unit, operating 41 Continente hypermarkets, 129 Continente Modelo supermarkets, 77 convenience stores Bom Dia, 256 stores operated under franchise Meu Super and 200 parapharmacy Well´s;

  • Worten that is included in the top 3 of Iberian electronic players, counting on a portfolio of 233 physical stores in Iberia;

  • Sports and Fashion directly operating 377 own stores of sports and clothing products, combined with a franchise network;

  • Sonae RP is dedicated to optimizing the management of Sonae's retail real estate portfolio;

  • Maxmat operates in the DIY, construction, bathroom and garden market with a network of 30 stores;
  • Sonae Sierra is the partnership dedicated to the activity of development and management of shopping centres.
  • NOS is the partnership that the Group holds through Zopt dedicated to telecommunications.
  • Sonae IM has an active portfolio management strategy, with the clear objective of building and managing a portfolio of technology-based companies related to retail and telecommunications.
  • Sonae FS aims to boost retail financial services.

These operating segments have been identified taking into consideration that each of these segments have separate identifiable revenues and costs, separate financial information is produced, and its operating results are reviewed by management on which it makes decisions.

The list of Group companies and their businesses are detailed in Notes 31 and 32.

The main operating segment information as at 31 March 2017 and 2016 and 31 December 2016 can be detailed as follows:

31 Mar 2017 Turnover Depreciation
and
amortisation
Provisions and
impairment
losses
EBIT Financial
results (2)
Income tax (2)
Sonae MC 854,715,239 23,720,639 92,641 5,773,815 - -
Worten 217,706,859 6,529,882 185,913 (5,258,512) - -
Sports & Fashion 144,396,413 8,368,229 350,248 (8,907,818) - -
Sonae RP 22,921,431 6,097,838 - 13,957,097 - -
Maxmat 16,994,235 458,239 - 188,072 - -
Retail 1,256,734,177 45,174,827 628,802 5,752,654 (11,861,772) (1,930,505)
Sonae Sierra - - - 7,537,282 - -
NOS - - - 7,133,578 - -
Sonae IM 32,922,350 2,440,507 3,586 (1,923,227) 164,190 (246,379)
Sonae FS 5,327,861 123,566 - 404,792 (15) (180,598)
Outros, eliminações e ajustamentos (16,905,728) 375,592 (131,005) (5,031,537) 3,978,180 (71,494)
Total consolidated 1,278,078,660 48,114,492 501,383 13,873,542 (7,719,417) (2,428,976)
31 Mar 2016 Turnover Depreciation
and
amortisation
Provisions and
impairment
losses
EBIT Financial
results (2)
Income tax (2)
Sonae MC 829,682,081 21,867,449 6,817,234 8,258,392 - -
Worten 216,493,836 6,064,784 95,372 (6,191,099) - -
Sports & Fashion 114,727,340 5,565,991 449,133 (10,805,131) - -
Sonae RP 24,395,643 5,889,902 - 72,592,989 - -
Maxmat 15,367,778 503,278 - (161,089) - -
Retail 1,200,666,678 39,891,404 7,361,739 63,694,062 (7,233,004) 11,364,912
Sonae Sierra - - - 7,387,681 - -
NOS - - - 4,863,490 - -
Sonae IM 26,558,608 1,931,001 405,519 (1,683,227) (584,301) (1,022,678)
Sonae FS 4,136,648 155,417 - (1,385,214) (633) (479,604)
Outros, eliminações e ajustamentos (25,414,659) 82,104 9,110 (3,957,355) (6,151,488) 1,628,488
Total consolidated 1,205,947,275 42,059,926 7,776,368 68,919,437 (13,969,426) 11,491,118
Net debt (2)
31 Mar 2017 31 Dec 2016
Sonae Retalho 857,148,942 675,852,425
Sonae IM 35,954,617 38,424,321
Sonae FS - -
Holding (1) 486,426,160 500,726,313
Total consolidated 1,379,529,719 1,215,003,059

1) Includes Sonae separate financial statements;

2) These captions are accompanied by Management in more aggregated form, and not allocated to individual operating segments identified above.

Investment (CAPEX) Net invested capital
31 Mar 2017 31 Mar 2016 31 Mar 2017 31 Dec 2016
Sonae Retalho
Sonae MC 28,292,422 34,917,109 754,942,027 629,840,098
Worten 6,031,500 5,672,532 (25,907,272) (53,491,326)
Sports & Fashion 7,699,229 7,144,755 380,027,369 372,504,176
Sonae RP 8,450,769 8,938,718 913,901,992 930,735,887
Maxmat 349,741 105,823 34,790,278 33,050,597
Sonae IM 2,436,356 1,766,677 106,845,851 108,088,618
Sonae FS 32,904 33,101 1,989,311 3,503,912
Other, eliminations and adjustments 282,686 (162,262) 1,208,079,695 1,255,209,288
Total consolidated 53,575,607 58,416,453 3,374,669,251 3,279,441,250

The intra-groups of the turnover can be analyzed by following:

Turnover 31 Mar 2017
Inter-segment
31 Mar 2016
Inter-segment
Sonae Retail
Sonae MC (567,175) (440,435)
Worten (1,703,558) (1,066,811)
Sports and Fashion (10,124,503) (8,218,044)
Sonae RP (21,108,226) (21,791,956)
Maxmat - -
Sonae IM (2,961,077) (1,825,682)
Sonae FS - -
Other, eliminations and adjustments (102,952) (379,179)
Total consolidated (36,567,491) (33,722,107)

The caption "Eliminations Adjustments and Others" can be analyzed as follows:

Turnover EBIT
31 Mar 2017 31 Mar 2016 31 Mar 2017 31 Mar 2016
Inter-segment intra-groups (36,567,491) (33,722,107) - -
Contributions of entities not included in the
segments
19,661,763 8,307,448 (3,585,488) (1,595,933)
Others - - (1,446,048) (2,361,421)
Other, eliminations and adjustments (16,905,728) (25,414,659) (5,031,536) (3,957,355)
Investment
Invested capital
31 Mar 2017 31 Dec 2016 31 mar 2017 31 dez 2016
Inter-segment intra-groups and contributions of entities non
individualized entities as segments
282,686 (162,262) 54,514,473 31,168,918
Investments in joint ventures and associated companies - - 1,275,240,669 1,293,795,248
Other investments - - 9,956,041 17,966,231
Cash settled equity swap (3) - - (88,859,076) (87,721,109)
Distributed dividends - - (80,163,511) -
Dividends available - - 37,391,100 -
282,686 (162,262) 1,208,079,696 1,255,209,288

3) Financial Instrument reported in Note 15.

All performance measures are reconciled to the financial statements in note 28.

Glossary:

Net Invested capital = Total net debt + total shareholder funds

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

Other eliminations and adjustments = Intra-groups + consolidation adjustments + contributions from other companies not included in the disclosed segments as they do not fit in any reportable segment, ie in addition to Sonae SGPS, the companies identified as "Other" in Note 31 are included;

Investments (CAPEX) = Gross investment in tangible and intangible assets and investments in acquisitions.

Regarding the financial information of Sonae Sierra and See details in Note 8.

5 TANGIBLE ASSETS

During the periods ended as at 31 March 2017 and 2016, the movements in tangible assets as well as accumulated depreciation and impairment losses are made up as follows:

Others Tangible Total
Land and Plant and tangible assets tangible
buildings machinery assets in progress assets
Gross assets:
Opening balance as at 1 January 2017 1,371,092,975 1,438,240,754 217,886,293 30,984,493 3,058,204,515
Transfers to "Discontinued operations" (Note 14) (489,027) (2,845,887) (4,087,435) (618,694) (8,041,043)
Investment 673,905 765,188 583,687 39,270,410 41,293,190
Disposals - (14,324,342) (1,417,666) (999,052) (16,741,060)
Exchange rate effect 14,554 11,352 15,427 2,667 44,000
Transfers 1,955,718 32,865,402 4,175,654 (39,977,047) (980,273)
Closing balance as at 31 March 2017 1,373,248,125 1,454,712,467 217,155,960 28,662,777 3,073,779,329
Accumulated depreciation and impairment losses
Opening balance as at 1 January 2017 397,973,790 881,497,880 166,152,543 110,824 1,445,735,037
Transfers to "Discontinued operations" (Note 14) (225,509) (1,716,060) (3,288,285) - (5,229,854)
Depreciation of the period 5,609,894 27,474,929 4,483,317 - 37,568,140
Disposals - (13,425,911) (1,336,257) - (14,762,168)
Exchange rate effect 8,142 5,009 5,305 - 18,456
Transfers 607,689 (38,772) (212,986) - 355,931
Closing balance as at 31 March 2017 403,974,006 893,797,075 165,803,637 110,824 1,463,685,542
Carrying amount as at 31 March 2017 969,274,119 560,915,392 51,352,323 28,551,953 1,610,093,787
Others Tangible Total
Land and Plant and tangible assets tangible
buildings machinery assets in progress assets
Gross assets:
Opening balance as at 1 January 2016 1,340,030,432 1,331,776,248 195,582,841 24,254,854 2,891,644,375
Investment 809,416 52,148 497,727 48,279,135 49,638,426
Disposals (30,748,984) (11,488,892) (1,141,045) (1,902,778) (45,281,699)
Exchange rate effect 43,427 13,276 28,783 58 85,544
Transfers 6,991,198 28,215,771 3,755,371 (38,281,027) 681,313
Closing balance as at 31 March 2016 1,317,125,489 1,348,568,551 198,723,677 32,350,242 2,896,767,959
Accumulated depreciation and impairment losses
Opening balance as at 1 January 2016 367,362,670 828,106,124 153,060,794 - 1,348,529,588
Depreciation of the period 4,888,514 25,722,829 4,060,054 - 34,671,397
Impairment losses of the period 6,600,000 - - - 6,600,000
Disposals (3,936,186) (9,478,634) (1,073,802) - (14,488,622)
Exchange rate effect 43,552 3,537 12,245 - 59,334
Transfers 346,629 (284,065) (167,898) - (105,334)
Closing balance as at 31 March 2016 375,305,179 844,069,791 155,891,393 - 1,375,266,363
Carrying amount as at 31 March 2016 941,820,310 504,498,760 42,832,284 32,350,242 1,521,501,596

The investment in the period ended 31 March 2017 and 2016 includes mainly the acquisition of assets of approximately 40.9 million euro (49.5 million euro in 2016), associated with the opening and remodeling of stores of Sonae retail operating segments.

During the period ended 31 March 2017, several sale and leaseback transactions were accounted for by the Group. The accounting values of the disposed assets, approximately, 170.1 million euro, correspond to 16 real estate food retail assets located in Portugal and 3 Worten stores in Spain. These operations resulted in a cash inflow of 230 million euro and generated a net capital gain of approximately, 63.1 million euro (Note 25).

The most significant values under the caption "Tangible assets in progress" refer to the following projects:

31 Mar 2017 31 Mar 2016
Refurbishment and expansion of stores in the retail businesses located
in Portugal
24,878,161 27,278,839
Refurbishment and expansion of stores in the retail businesses located
in Spain
1,131,165 437,825
Projects of "Continente" stores for which advance payments were
made
1,196,000 2,743,500
Others 1,346,627 1,890,574
28,551,953 32,350,240

The caption "Impairment losses for tangible assets" can be detailed as follows:

Land and
buildings
Plant and
machinery
Others tangible
assets
Total tangible
assets
Impairment losses
Opening balance as at 1 january 2017 90,436,703 28,067,641 595,877 119,100,221
Disposals - (2,592,563) (31,708) (2,624,271)
Transfers - 2,943 (34,948) (32,005)
Closing balance as at 31 March 2017 (Note 22) 90,436,703 25,478,021 529,221 116,443,945

6 IINTANGIBLE ASSETS

During the three-month period ended at 31 March 2017 and 2016, the movement occurred in intangible assets and in the corresponding accumulated amortisation and impairment losses, was as follows:

Patents Others Intangible Total
and other intangible assets intangible
similar rights assets in progress assets
Gross assets:
Opening balance as at 1 January 2017 181,013,190 493,383,747 28,060,990 702,457,927
Transfers to "Discontinued operations" (Note 14) (1,991,834) (36,666,313) (89,933) (38,748,080)
Investment 9,740 325,402 10,043,644 10,378,786
Disposals (92,263) (7,398) (383,671) (483,332)
Exchange rate effect (102,988) 363,507 (6,638) 253,881
Transfers 78,332 4,462,674 (4,839,779) (298,773)
Closing balance as at 31 March 2017 178,914,177 461,861,619 32,784,613 673,560,409
Accumulated depreciation and impairment losses
Opening balance as at 1 January 2017 40,763,712 288,184,727 - 328,948,439
Transfers to "Discontinued operations" (Note 14) (1,056,990) (24,789,479) - (25,846,469)
Depreciation of the period 665,552 10,867,982 - 11,533,534
Impairment losses of the period - 191,070 - 191,070
Disposals (54,663) (133,595) - (188,258)
Exchange rate effect (93,562) 246,870 - 153,308
Transfers (293,133) 250,507 - (42,626)
Closing balance as at 31 March 2017 39,930,916 274,818,082 - 314,748,998
Carrying amount as at 31 March 2017 138,983,261 187,043,537 32,784,613 358,811,411
Patents Others Intangible Total
other similar intangible assets intangible
rights assets in progress assets
Gross assets:
Opening balance as at 1 January 2016 117,792,364 381,046,154 30,117,801 528,956,319
Purchase price allocation (Note 3) 11,559,000 13,132,000 - 24,691,000
Opening balance as at 1 January 2016 Restated 129,351,364 394,178,154 30,117,801 553,647,319
Investment 52,103 346,318 8,352,206 8,750,627
Disposals (90,464) (22,993) (185,983) (299,440)
Exchange rate effect (269,918) 787,120 (100,228) 416,974
Transfers 83,178 6,399,059 (7,019,123) (536,886)
Closing balance as at 31 March 2016 Restated 129,126,263 401,687,658 31,164,673 561,978,594
Accumulated depreciation and impairment losses
Opening balance as at 1 January 2016 38,817,721 245,688,249 - 284,505,970
Purchase price allocation (Note 3) - - - -
Opening balance as at 1 January 2016 Restated 38,817,721 245,688,249 - 284,505,970
Depreciation of the period 347,026 7,932,192 - 8,279,218
Disposals (90,464) (3,676) - (94,140)
Exchange rate effect (237,885) 465,733 - 227,848
Transfers - 15,569 - 15,569
Closing balance as at 31 March 2016 Restated 38,836,398 254,098,067 - 292,934,465
Carrying amount as at 31 March 2016 Restated 90,289,865 147,589,591 31,164,673 269,044,129

7 GOODWILL

Goodwill is allocated to each operating segment and within each segment to each of the homogeneous groups of cash generating units as follows:

  • Sonae Retail - Goodwill is allocated to each operating business segment, Sonae MC, Worten and Sports & Fashion, being afterwards distributed by each homogenous group of cash generating units, namely to each insignia within each segment and country, distributed by country and each of the properties in case of operating segment Sonae RP;

  • Sonae IM - Goodwill at 31 March 2017 in this segment is related to the Technology business and at 31 December 2016, it also includes the insurance business including amounts generated prior to the adoption of IFRS and supported by the valuation of the customer portfolio (Portugal) as well as the one generated by the subsequent merger operation (Brazil) in 2016, but this business was transferred in the period ended 31 March 2017 to the caption "Non-current assets held for sale" (Note 14).

As at 31 March 2017 and 2016, the caption "Goodwill" was made up as follows by insignia and country:

31 Mar 2017
Insignia Portugal Spain Brazil Other countries Total
Sonae Retail 478,307,362 - - - 478,307,362
Sonae MC
Worten 65,283,532 - - - 65,283,532
Sports & Fashion 63,058,745 95,497 - - 63,154,242
Sonae RP 2,651,846 - - - 2,651,846
Sonae IM
Technology 2,686,758 - 7,090 11,501,319 14,195,167
MDS - - - - -
611,988,243 95,497 7,090 11,501,319 623,592,149
31 Dec 2016
Insignia Portugal Spain Brazil Other countries Total
Sonae Retail 478,307,362 - - - 478,307,362
Sonae MC
Worten 65,283,532 - - - 65,283,532
Sports & Fashion 63,058,745 95,497 - - 63,154,242
Sonae RP 2,651,846 - - - 2,651,846
Sonae IM
Technology 2,686,758 - 7,090 11,533,124 14,226,972
MDS 8,363,810 - 21,764,904 - 30,128,714
620,352,053 95,497 21,771,994 11,533,124 653,752,668

During the three-month period ended in 31 March 2017 and 2016, movements occurred in Goodwill as well as in the corresponding impairment losses, are as follows:

31 Mar 2017 31 Mar 2016
Restated
Gross value:
Opening balance 669,955,930 639,617,793
Purchase price allocation (Note 14) - (18,960,060)
Opening balance Restated 669,955,930 620,657,733
Transfers to "Non-current assets held for sale" (36,002,699) -
Other variations - (1,141,363)
Currency translation 307,675 (4,058,476)
Closing balance 634,260,906 615,457,894
Accumulated impairment losses:
Opening balance 16,203,262 15,074,024
Transfers to "Non-current assets held for sale" (Note 14) (5,528,441) -
Currency translation (6,064) (233,644)
Closing balance 10,668,757 14,840,380
Carrying amount 623,592,149 600,617,514

8 JOINT VENTURES AND ASSOCIATED COMPANIES

8.1 Detail of book value of Investment in joint ventures and associates

The value of investments in joint ventures and associates can be analyzed as follows:

COMPANY 31 Mar 2017 31 Dec 2016
Sonae Sierra
Sonae Sierra SGPS, SA (consolidated) 578,974,014 605,762,434
ZOPT (NOS)
ZOPT, SGPS, S.A. (consolidated) 684,016,917 676,799,309
Sonae Retail
1)
Sohi Meat Solutions - Distribuição de Carnes, SA
2,782,243 -
Sonae IM
Intelligent Big Data, S.L. - -
SIRS - Sociedade Independente de Radiodifusão Sonora, S.A. - -
Unipress - Centro Gráfico, Lda 591,820 588,925
Investments in joint ventures 1,266,364,994 1,283,150,668
Sonae Retail
APOR - Agência para a Modernização do Porto, S.A. 1,399,099 323,193
MOVVO, S.A. 267,518 2,793,649
Sempre a Postos - Produtos Alimentares e Utilidades, Lda 3,245,071 1,338,322
S2 Mozambique, SA 2,657,529 1,406,710
Ulabox, S.L. 1,306,458 3,817,381
Sonae IM
2)
Brokerslink Management AG
- 124,834
2)
Flexben, Lda
- -
2)
Filhet Allard España Correduria de Seguros S.L.
- 840,494
Armilar Venture Partners - Sociedade de Capital de Risco, SA 64,270 1
Fundo de Capital de Risco Armilar Venture Partners II 35,151,836 35,416,004
Fundo de Capital de Risco Armilar Venture Partners III 26,483,392 26,173,814
Fundo de Capital de Risco Espirito Santo Ventures Inovação e
Internacionalização
7,227,294 6,885,820
Investment in associated companies 77,802,467 79,120,222
Total 1,344,167,461 1,362,270,890

1) A partnership agreement was signed in 2016, which took place in January 2017, and this subsidiary will be accounted for using the equity method, given the loss of control (Note 14);

2) Associates transferred to "Non-current assets held for sale" (Note 14).

Following the announcement made on 5 August 2016, Sonae IM together with a group of investors celebrated a contract with NOVO BANCO, S.A. and his subsidiary, ES TECH VENTURES, SGPS, S.A, for the acquisition to Novo Banco, of participation units in three venture capital funds: Espirito Santo Ventures Innovation and Internationalization ('ESVIINT'); Espírito Santo Ventures II (currently called to Ventures Capital Fund Armilar Venture Partners II, 'Armilar II') and Venture Capital Fund Espírito Santo Ventures III (currently called to Ventures Capital Fund Armilar Venture Partners III, 'Armilar III') and the total capital of Espírito Santo Ventures - Sociedade de Capital de Risco (currently called Armilar Venture Partners – Sociedade de Capital de Risco. S.A. 'Armilar'), held by its subsidiar ES TECH VENTURES, SGPS, S.A.. After

approval by Banco de Portugal, the transaction was completed on 13 December 2016. In the period ended on 31 March 2017, Sonae IM increased its participation in more 0.41% in the Armilar III fund, with a position in the period ended on 31 March 2017 of 42.40% (note 3c).

Armilar II, Armilar III and ESVIINT have the purpose of investing their assets in minority interests, in companies with high potential for growth and appreciation, and which have technological base or innovate business concept subjacent their activity, being privileged projects in phase of start-up, early-stage and expansion in Portugal and internationally. The management of the funds, according to the applicable legislation, is the responsibility of the management company. The management company has autonomy in relation to the management and investment policies of the funds, and this is not a competence of the holders of units. The participation of the subsidiary Sonae IM in the management company is 35%, not exercising control over it, in accordance with the legal framework and, in accordance with the context and specificity of the transaction, a fair value of 1 euro was assumed. As described, under this operation, the acquired participations were classified as "Investments in associated companies".

In the period ended on 31 March 2017, no changes were identified in the allocation of the purchase price of Funds to the allocation assigned in the year ended December 31, 2016. However, the allocation of the acquisition price is still subject to changes until the conclusion of a period of one year from the date of acquisition in accordance with IFRS 3 Business Combinations.

Within the scope of this transaction, the debt of Armilar II and Armilar III funds was also acquired from Espírito Santo Ventures – Sociedade de Capital de Risco (currently called "Armilar Venture Partners"), in the amount of Euro 1,503,660 and Euro 1,274,357, respectively, recorded in the caption "Other non-current assets" (note 10).

IAS 28 contains the option to keep the investments at fair value in situations of investments in associates that are held through venture capital funds. Sonaecom made this option in applying the equity method to Armilar I, Armilar II and ESVIINT funds, and maintained the fair value recognised by the funds in its subsidiaries. Associated companies and companies jointly controlled are included in the consolidation under the equity method.

8.2 Financial indicators of participations

8.2.1 Joint Ventures

Summary financial information of joint ventures of the group can be analyzed as follows:

31 Mar 2017
Joint ventures Sonae Sierra SGPS,
SA (consolidated)
ZOPT, SGPS, SA
(consolidated)
Sohimeat, SA Others
Assets
Investment properties 806,154,769 663,000 - -
Tangible assets 1,690,331 1,193,151,000 15,400,314 652,005
Intangible assets 2,222,157 593,649,327 579,704 -
Goodwill 4,273,688 1,747,005,673 - -
Investments in joint ventures and associates 1,181,483,183 197,302,000 - -
Other non-current assets 130,192,345 137,279,000 131,503 97
Non-current assets 2,126,016,473 3,869,050,000 16,111,521 652,102
Cash and cash equivalents 143,362,477 2,981,000 5,062,657 33,656
Other current assets 65,374,717 491,592,000 44,368,194 1,605,566
Current assets 208,737,194 494,573,000 49,430,851 1,639,222
Total assets 2,334,753,667 4,363,623,000 65,542,372 2,291,324
Liabilities
Loans 359,745,311 1,031,565,000 - 12,500
Other non-current liabilities 140,705,957 270,970,000 277,829 898,834
Non-current liabilities 500,451,268 1,302,535,000 277,829 911,334
Loans 53,083,484 175,319,000 - 26,262
Other current liabilities 84,492,798 524,159,000 60,058,322 417,560
Total current liabilities 137,576,282 699,478,000 60,058,322 443,822
Total liabilities 638,027,550 2,002,013,000 60,336,151 1,355,156
Equity attributable to the equity holders of the Parent Company 1,180,616,037 1,189,280,000 5,206,221 936,168
Non-controlling interests 516,110,080 1,172,330,000 - -
Total equity 1,696,726,117 2,361,610,000 5,206,221 936,168
Total equity and liabilities 2,334,753,667 4,363,623,000 65,542,372 2,291,324
31 Dec 2016
Joint ventures Sonae Sierra SGPS,
SA (consolidated)
ZOPT, SGPS, SA
(consolidated)
Others
Assets
Investment properties 805,733,400 663,000 -
Tangible assets 2,009,354 1,205,070,385 821,056
Intangible assets 2,000,546 601,491,621 -
Goodwill 4,273,688 1,749,001,673 -
Investments in joint ventures and associates 1,169,527,759 194,168,879 -
Other non-current assets 94,653,928 139,012,122 97
Non-current assets 2,078,198,675 3,889,407,680 821,153
Cash and cash equivalents 149,628,277 7,094,383 61,807
Other current assets 87,289,259 527,340,846 1,587,807
Current assets 236,917,536 534,435,229 1,649,614
Total assets 2,315,116,211 4,423,842,909 2,470,767
Liabilities
Loans 367,154,873 1,035,508,000 25,000
Other non-current liabilities 139,138,153 275,899,909 1,043,985
Non-current liabilities 506,293,026 1,311,407,909 1,068,985
Loans 52,995,528 224,692,000 26,262
Other current liabilities 87,932,125 537,188,000 445,143
Total current liabilities 140,927,653 761,880,000 471,405
Total liabilities 647,220,679 2,073,287,909 1,540,390
Equity attributable to the equity holders of the Parent Company 1,159,410,669 1,192,361,000 930,377
Non-controlling interests 508,484,863 1,158,194,000 -
Total equity 1,667,895,532 2,350,555,000 930,377
Total equity and liabilities 2,315,116,211 4,423,842,909 2,470,767
31 Mar 2017
Sonae Sierra SGPS,
SA (consolidated)
ZOPT, SGPS, SA
(consolidated)
Sohimeat, SA Others
48,062,995 377,083,000 60,555,808 663,617
727,941 3,915,000 7,607,068 2,644
48,790,936 380,998,000 68,162,876 666,261
(25,728,524) (44,804,000) (1,936,361) (179,539)
(239,767) (108,543,000) (307,018) (169,050)
(13,512,990) (193,941,000) (65,708,590) (310,864)
(39,481,281) (347,288,000) (67,951,969) (659,453)
1,616,765 - 37 -
(3,629,092) (3,174,000) - (733)
(2,012,327) (3,174,000) 37 (733)
18,316,278 - - -
- - - -
25,613,606 30,536,000 - -
(2,215,560) (2,637,000) (48,174) (5,983)
23,398,046 27,899,000 162,770 92
15,901,224 14,328,000 162,770 92
7,496,822 13,571,000 - -
23,398,046 27,899,000 162,770 92
-
28,830,046 27,561,004 162,770 92
5,432,000 (337,996) -
31 Mar 2016
Joint ventures Sonae Sierra SGPS,
SA (consolidated)
ZOPT, SGPS, SA
(consolidated)
Others
Turnover 53,545,898 366,175,000 995,468
Other operating income 2,786,095 4,128,000 6,048
56,331,993 370,303,000 1,001,516
External supplies and services (27,142,037) (44,653,000) (292,787)
Amortisation (284,956) (100,568,000) (178,684)
Other operating costs (13,381,267) (197,998,000) (468,762)
(40,808,260) (343,219,000) (940,233)
Financial income 1,575,075 - -
Financial expense (6,542,935) (5,301,000) (2,083)
Financial results (4,967,860) (5,301,000) (2,083)
Results of joint ventures and associated companies 14,985,859 13,000 -
Other income / expense 7,878,437 - -
Results before taxation 33,420,169 21,796,000 59,200
Income taxation (3,293,568) (2,314,000) (96)
Consolidated net income/(loss) for the year 30,126,601 19,482,000 59,104
Attributable to:
Equity holders of the Parent Company 16,538,376 9,727,000 59,104
Non-controlling interests 13,588,225 9,755,000 -
30,126,601 19,482,000 59,104
Other comprehensive income for the period 12,905,361 5,636,000 -
Total comprehensive income for the period 43,031,962 25,118,000 59,104

8.2.2 Associates

Summary financial information of associated companies of the Group can be analyzed as follows:

31 Mar 2017
Sonae Retail Sonae IM
Associates Sempre a Postos Ulabox S2 Mozambique Others Funds Others
Non-current assets 1,100,968 1,249,773 3,669,342 985,923 169,176,994 573,938
Current assets 10,230,366 1,206,126 2,615,865 3,371,241 12,528,216 1,477,187
Non-current liabilities - - 94,196 2,240,946 16,250,615 -
Current liabilities 5,734,938 1,609,023 1,474,007 1,007,149 10,350,973 1,029,834
Equity 5,596,396 846,876 4,717,004 1,109,069 155,103,622 1,021,291
Sonae Retail 31 Dez 2016 Sonae IM
Associates Sempre a Postos Ulabox S2 Mozambique Others Fundos Others
Non-current assets 1,205,266 1,176,547 3,517,781 986,708 168,624,761 572,127
Current assets 10,371,548 1,662,970 1,838,977 3,316,322 6,338,287 1,632,456
Non-current liabilities - - - 2,240,946 16,077,280 -
Current liabilities 6,223,527 531,941 667,722 977,842 7,672,371 1,179,340
Equity 5,353,287 2,307,576 4,689,036 1,084,242 151,213,397 1,025,243
31 Mar 2017
Sonae Retail Sonae IM
Associates Sempre a Postos Ulabox S2 Mozambique Others Fundos Others
Turnover 12,279,909 2,361,562 1,783,914 216,896 825,348 384,097
Other operating income 723,466 99,522 46,364 21,697 - 5,862
Operating costs (12,690,830) (3,364,452) (2,740,915) (1,115,791) (1,547,643) (372,996)
Financial results 1,813 - 204,866 (4,994) 4,692 6
Taxation (71,250) - (46,530) - (61,000) -
Net income/(loss) for the year 243,108 (903,368) (752,301) (882,191) (778,603) 16,969
-
Other comprehensive income for the period - - - - - -
Total comprehensive income for the period 243,108 (903,368) (752,301) (882,191) (778,603) 16,969
31 Mar 2016
Associates Sempre a Postos Ulabox Others
Turnover 11,657,044 1,639,863 10,815
Other operating income 882,216 - -
Operating costs (12,307,530) (2,468,849) (89,401)
Financial results 2,991 - -
Taxation (53,371) - -
Net income/(loss) for the year 181,350 (828,986) (78,586)
Other comprehensive income for the period - - -
Total rendimento integral do exercício 181,350 (828,986) (78,586)

8.3 Movements occurred in the period

During the period ended at 31 March 2017 and 2016, movements in investments in joint ventures and associates are as follows:

31 Mar 2017 31 Mar 2016
Proportion on
equity
Goodwill Total
investment
Proportion on
equity
Goodwill Total
investment
Investments in joint ventures
Initial balance as at 1 January 716,500,627 566,650,040 1,283,150,667 638,605,623 571,752,490 1,210,358,113
Change in consolidation method due to loss of
control
2,703,451 - 2,703,451 - - -
Equity method
Gains or losses in joint controlled and associated
companies
15,165,878 - 15,165,878 13,168,436 - 13,168,436
Distributed dividends (37,391,100) - (37,391,100) - - -
Effect in equity capital and non-controlling
interests
2,736,098 - 2,736,098 (6,176,019) - (6,176,019)
699,714,954 566,650,040 1,266,364,994 645,598,040 571,752,490 1,217,350,530
Investments in associates companies
Initial balance as at 1 January 75,105,164 4,015,059 79,120,223 2,807,145 1,723,842 4,530,987
Increases during the period 727,296 - 727,296 - - -
Transfer to assets held for sale (Note 14) (967,578) - (967,578) - - -
Equity method
Gains or losses in joint controlled and associates (1,072,510) - (1,072,510) (233,895) - (233,895)
Effect in equity capital and non-controlling
interests
(4,964) - (4,964) - - -
73,787,408 4,015,059 77,802,467 2,573,250 1,723,842 4,297,092
Total 773,502,362 570,665,099 1,344,167,461 648,171,290 573,476,332 1,221,647,622

The effect on equity and non-controlled interests results fundamentally from the exchange rate conversion effect of companies with functional currencies other than the euro.

The amount of distributed dividends related to Investments in Joint Ventures refers to Sonae Sierra.

The value of the "Change in consolidation method for the loss of control" in the amount of 2,703,451 euro refers to Sohi Meat Solutions- Distribuição de Carnes, SA. This company results from the agreement signed on 3 January 2017, the date on which a Joint Venture was formed between Sonae MC and Hilton Food Group PLC through a capital increase of this Group in Sohimeat. Since then, Sohimeat has been consolidated using the equity method (Note 14).

The consolidated financial statements of ZOPT have a significant exposure to the African market, particularly through financial investments that Group holds in associated companies (Finstar, Mistar, Zap Media) operating in the Angolan and Mozambican markets, which are engaged in providing satellite and fiber television services. The book value of these associates in the financial statements of ZOPT on 31 March 2017 amounts to approximately Euro 174 million, included in the caption "Other non-current assets".

The Group made impairment tests for those assets, which are denominated in the currencies of those countries, Kwanzas and Meticals, respectively, considering the business plans (internal valuation using the discounted cash flow method, compared to researches) approved by the Board of Directors for a five years period, which include average growth rates of revenue for that period of 13% (Angola) and 14% (Mozambique). These revenue growth rates reflects: (i) the best estimate for the growth of the customer base, reflecting an expectation of new clients and chum estimated rates, when considered prudent, and (ii) an annual price increase which corresponds, over the period 2017 to 2021, to an average of 75% of the inflation rate, since, considering the nature of the activity carried out by the companies, especially in

Angola and in line with the price increases in previous years, it is not expected that companies will be able to reflect in their prices the total inflation in the country.

The business plans consider yet a growth rate in perpetuity of 7.7% (Angola) and 5.6% (Mozambique) and a discount rate ('wacc') in perpetuity of 17.5% (Angola) and 19.1% (Mozambique). The discount rate, over the period 2017 to 2021 ranged from a maximum of 31.5% to a minimum of 17.5% (in 2021), for Angola, and from a maximum of 30.9% to a minimum of 19.21% (2021) in Mozambique, in line with the most appropriate inflation forecasts (source: The Economist Intelligence Unit (EIU)).

The impairment tests carried out, based on the assumptions above, support the value of the assets, so not result in additional impairments. However, that the current economic conditions of uncertainty in these markets, particularly in the foreign exchange market and the limitation of currency transfer, particularly in Angola, introduces an additional degree of variability to the assumptions, which could significantly impact of the estimates considered, in terms of of the rate of inflation and the ability to reflect the rate in price increases.

As of 31 March 2017, it was understood that the assumptions made in the impairment tests carried out in the year ended December 31, 2016 did not have material variations, therefore, there are no indications of additional impairments.

9 OTHER INVESTMENTS

Other non-current investments, their head offices, percentage of share capital held and book value as at 31 March 2017 and 31 December 2016, are as follows:

Head office Direct Total Direct Total 31 Mar 2017 31 Dec 2016
Lisbon 14.28% 14.28% 14.28% 14.28% 9,976 9,976
Ponta Delgada 10.00% 10.00% 10.00% 10.00% 925,197 925,197
London 6.68% 3.34% 6.68% 3.34% - 8,000,000
Lisbon 1.38% 1.24% 1.38% 1.24% 75,069 75,069
11,723,961 11,774,208
12,734,203 20,784,450
31 Mar 2017 Percentage of share capital held
31 Dec 2016
Statment of financial position

The financial investment in Ed Broking LLP was revalued to its fair value as at 31 December 2016 based on EBITDA multiples adjusted by the net debt value and sales multiples by region adjusted by the costs of the central structure after optimization. This valuation led to a reduction in the investment amounting 7.2 million euro corresponding to an impairment in the same amount as at 31 December 2016. The disposal, of the company´s North American operation and the costs associated with the ongoing restructuring significantly affected the valuation of the company taking into account the valuation criteria used. Both valuations correspond to Level 3 of Fair Value, although the multiples used are market benchmarks.

On 31 March 2017, the financial interest in Ed Broking LLP was transferred to non-current assets held for sale (Note 14).

As at 31 March 2017 the caption "Other investments" includes, among others, 9,956,041 euro (9,966,231 euro in 31 December 2016) related to deposited amounts on an Escrow Account which is applied in investment funds with superior rating, which is a guarantee for contractual liabilities assumed in the disposal of a Brazil Retail business and for which provisions were recorded in the applicable situations (Note 22 and 23).

As at 31 March 2017 and 2016, the movements in "Other investments" made up as follows:

31 Mar 2017 31 Mar 2016
Non current Current Non current Current
Other investments
Fair value (net of impairment losses) as at 1 January 20,784,450 161,050 29,549,661 79,924,887
Acquisitions in the period 11,778 - 336,084 81,518
Disposals in the period - - - (49,740)
Increase/(Decrease) in fair value (27,957) (116,837) (3,942) (15,280,600)
Transfers to "Non-current assets held for sale" (Note 14) (8,034,068) - - -
Fair value (net of impairment losses) as at 31 March 12,734,203 44,213 29,881,803 64,676,065
Derivative financial instruments (Note 18)
Fair value as at 1 January - 4,207,972 - 2,506,087
Increase/(Decrease) in fair value - (3,519,854) - (1,858,153)
Fair value as at 31 March - 688,118 - 647,934
12,734,203 732,331 29,881,803 65,323,999

As at 31 March 2017 the amount of transfers to non-current assets held for sale related to the financial interest in Ed Broking LLP (Note 14).

As at 31 March 2016 the fair value increase / (decrease) in the caption "Other current investments" is mainly associated to the fair value of NOS investment up to the disposal date in the amount of 15,681,846 euro negative. The fair value of this investment was determined based on the NOS market share price and the respective changes were recorded in the consolidated income statement (Note 8.3). This participation was sold in the second quarter of 2016.

The Other non-current financial Investments are recorded at acquisition cost net of impairment losses. It is Sonae understanding that no reliable fair value estimate can be made as there is no market data available for these investments. The heading of "Other non-current Investments" includes 2,778,157 euro (4,639,784 euro in 31 March 2016) of investments recorded at the cost net of impairment losses for the same reasons.

The Other non-current Investments are net of impairment losses amounting to 381,296 euro (370,685 euro in 31 December 2016) (Note 22).

10 OTHERS NON-CURRENT ASSETS

As at 31 March 2017 and at 31 December 2016, "Other non-current assets" are detailed as follows:

31 Mar 2017 31 Dec 2016
Gross Value Accumulated
impairment
losses
(Note 22)
Carrying
Amount
Gross Value Accumulated
impairment
losses
(Note 22)
Carrying
Amount
Trade accounts receivable and other debtors
Legal deposits 781,044 - 781,044 762,246 - 762,246
Cautions 4,938,783 - 4,938,783 5,043,273 - 5,043,273
Special regime for payment of tax and social security
debts
6,213,629 - 6,213,629 7,247,481 - 7,247,481
Financial investments debtors 40,000 - 40,000 40,000 - 40,000
Debt to receive related to Armilar Funds 2,778,017 - 2,778,017 2,778,017 - 2,778,017
Amount retained on acquisition of Salsa group 2,463,875 - 2,463,875 2,463,875 - 2,463,875
Others 439,455 - 439,455 305,524 - 305,524
17,654,803 - 17,654,803 18,640,416 - 18,640,416
Reinsurer's' share of technical provisions 412,943 - 412,943 412,943 - 412,943
Other non-current assets 933,699 - 933,699 172,807 - 172,807
19,001,445 - 19,001,445 19,226,166 - 19,226,166

The amount disclosed as Special Regime for Payment of Tax and Social Security Debts corresponds to taxes paid, voluntarily, related to settlements of income tax on corporate income, which were already in judicial process. The judicial processes are still in progress, however the guarantees provided for the said processes were canceled. It is the Board of Directors understanding that the claims presented will have a favourable end to Sonae, reason why they were not object of provision.

The amounts included in "Reinsurer's' share of technical provisions" refer to a Sonae's subsidiary whose activity is non-life reinsurance. The amount of the provision is related to provisions for claims declared (Note 22).

11 TRADE ACCOUNTS RECEIVABLE

As at 31 March 2017 and at 31 December 2016, "Trade accounts receivable" are detailed as follows:

31 Mar 2017 31 Dec 2016
Trade accounts receivable 127,778,007 126,276,140
Taxes recoverable 75,837,029 70,525,818
Other debtors
Trade creditors - debtor balances 41,140,660 40,574,473
Dividends to be received of jointly controlled companies 37,391,100 -
VAT recoverable on real estate assets and vouchers discounts 4,427,002 3,723,869
Disposal of tangible assets 2,327,293 2,310,866
Vouchers and gift cards 1,264,453 1,924,216
Advances to suppliers 1,680,345 1,122,073
Disposal of financial investments 40,000 21,584,746
Receivables from insurance companies - 1,456,925
Other current assets 17,144,412 18,863,035
105,415,265 91,560,203
Other current assets
Commercial discounts 64,369,458 35,591,922
Invoices to be issued 13,942,829 11,429,811
External supplies and services 13,835,492 10,156,350
Rents 6,377,120 6,160,370
Insurance indemnities 1,771,822 1,509,212
Other current assets 10,312,240 12,063,651
110,608,961 76,911,316
Accumulated impairment losses in receivables accounts (Note 22) (17,442,541) (17,871,034)
402,196,721 347,402,443

12 DEFERRED TAXES

Deferred tax assets and liabilities as at 31 March 2017 and at 31 December 2016 are as follows, split between the different types of temporary differences:

Deferred tax assets Deferred tax liabilities
31 Mar 2017 31 Dec 2016 31 Mar 2017 31 Dec 2016
Difference between fair value and acquisition cost 4,653,193 4,653,193 35,921,827 39,752,769
Temporary differences on tangible assets and intangible 1,813,109 1,811,359 64,349,547 62,768,314
Temporary differences on Badwill - - 8,263,418 8,263,418
Provisions and impairment losses not accepted for tax purposes 23,116,518 25,168,714 - -
Write off of tangible and intangible assets 25,524 25,524 44,232 44,232
Valuation of hedging derivatives 102,616 86,933 21,948 626,051
Non taxed exchange differences - - 639,053 639,053
Revaluation of tangible assets - - 1,011,817 1,046,525
Tax losses carried forward 34,408,876 25,442,311 - -
Reinvested capital gains/(losses) - - 322,855 329,611
Tax Benefits 1,009,123 1,037,115 - -
Others 3,105,695 3,135,595 623,250 900,944
68,234,654 61,360,744 111,197,947 114,370,917

As at 31 March 2017 and 31 December 2016, and in accordance with the tax statements presented by companies that recorded deferred tax assets arising from tax losses carried forward and using exchange rates effective at that time, tax losses carried forward can be summarized as follows:

31 Mar 2017 31 Dec 2016
Tax losses
carried forward
Deferred
tax assets
Time limit Tax losses
carried forward
Deferred
tax assets
Time limit
With limited time use
Generated in 2013 478,477 100,480 2018 595,877 125,646 2018
Generated in 2014 1,194,236 250,790 2026 1,194,236 250,790 2026
Generated in 2015 90,184 18,939 2027 90,184 18,939 2027
Generated in 2016 4,847,239 1,017,920 2028 4,847,243 1,017,920 2028
Generated in 2017 41,630,671 8,742,442 2029 - -
48,240,807 10,130,571 6,727,540 1,413,295
Without limited time use 73,658,132 18,450,258 73,577,733 18,428,924
With a time limit different from
the above mentioned
16,982,741 5,828,047 16,406,949 5,600,092
138,881,680 34,408,876 96,712,222 25,442,311

As at 31 March 2017 and at 31 December 2016, the deferred taxes to be recognized arising from tax losses were evaluated. Deferred tax assets have only been recorded to the extent that future taxable profits will arise which might be offset against available tax losses or against deductible temporary differences. This assessment was based on the business plans of Sonae's companies, which are periodically reviewed and updated.

As at 31 March 2017 deferred tax assets related to tax losses generated in current and previous years, by Modelo Continente Hipermercados, S.A. Spanish Branch of Retail operating segment, amount to 14.1 million euro (14.1 million euro as at 31 December 2016). The mentioned tax losses can be recovered within the Income Tax Group established in Spain, according to Spanish law. Modelo Continente Hipermercados, S.A. Spanish Branch, as at 31 March 2017 and at 31 December 2016, was the dominant entity within the group of companies taxed in accordance with the Spanish regime for taxing groups of companies.

As at 31 March 2017, there are reportable tax losses, whose deferred tax assets are not recorded for prudence purposes and are analysed as follows:

31 Mar 2017 31 Dec 2016
Tax losses
carried forward
Deferred
tax credit
Time limit Tax losses
carried forward
Deferred
tax credit
Time limit
5,186,959 1,089,261 2017 5,299,518 1,112,899 2017
2,888,221 606,526 2018 2,888,221 606,526 2018
5,944,511 1,248,347 2026 5,957,222 1,251,016 2026
2,841,579 596,732 2027 2,841,579 596,732 2027
1,521,293 319,472 2028 1,377,324 289,238 2028
508,403 106,765 2029 - -
18,890,966 3,967,103 18,363,864 3,856,411
324,275,537 82,887,762 310,309,574 79,418,492
80,228,467 20,153,244 99,994,869 25,041,365
423,394,970 107,008,109 428,668,307 108,316,268

13 CASH AND CASH EQUIVALENTS

As at 31 March 2017 and at 31 December 2016, Cash and cash equivalents are as follows:

31 Mar 2017 31 Dec 2016
Cash at hand 8,850,586 9,105,344
Bank deposits 165,863,906 207,343,682
Treasury applications 110,118,046 124,471,432
Cash and cash equivalents on the statement of financial position 284,832,538 340,920,458
Bank overdrafts (Note 17) (20,992,237) (17,730,231)
Cash and cash equivalents on the statement of cash flows 263,840,301 323,190,227

Bank overdrafts are disclosed in the statement of financial position under Current bank loans.

14 NON-CURRENT ASSETS AND LIABILITIES AVAILABLE FOR SALE

As at 31 March 2017, Sonae signed an agreement for the sale of 1,773 shares of MDS SGPS to IPLF Holding, SA. This transaction also includes a change in the shareholder agreement of the company, causing MDS, SGPS to cease to be controlled by Sonae and Jointly controlled by the Sonae Group and IPLF Holding, SA. This transaction waits for the approval of the ASF - Insurance Supervision Authority to become effective.

As at 31 March 2017, the assets and liabilities related to this segment were transferred to the assets and liabilities items held for sale. The transactions included in the Consolidated Statement of Income were also reclassified to "Discontinued Operations". The detail of these values are as follows:

Amounts in euros 31 Mar 2017
Assets
Tangible and intagible assets (Note 5 and 6) 15,712,800
Goodwill (Nota 7) 30,474,258
Investments (Note 8 and 9) 9,001,646
Other non-current assets 3,370,225
Non-current assets 58,558,929
Current assets
Trade account receivables and other current assets 6,454,906
Cash and cash equivalents 7,417,521
Current assets 13,872,427
Assets available for sale 72,431,356
Liabilities
Borrowings 13,125,000
Other non-current liabilities 1,043,983
Non-current liabilities 22,237,497
Borrowings 9,378,876
Other current liabilities 10,531,915
Total current liabilities 19,910,791
Liabilities available for sale 42,148,288
SONAE – 1Q17 RESULTS
Profit/(Loss) from discontinued operations 31 Mar 2017 31 March 2016
Restated
Services rendered (11,204,213) (9,416,134)
Other income (99,271) (142,550)
(11,303,484) (9,558,684)
External supplies and services 4,083,103 3,432,367
Staff costs 4,838,251 3,960,862
Depreciation and amortisation 992,683 896,559
Provisions and impairment losses 199,725 21,658
Other expenses 450,466 151,979
739,256 1,095,259
Financial expense 35,736 45,562
Financial income (295,678) (399,321)
Income from Investments 3,689 32,505
483,003 774,005
Taxation 27,092 (29,346)
Total 510,095 744,659

In 2016 an agreement was reached between the Group and an entity specialized in the processing and packaging of meat with the objective of realizing a joint venture to operate the Meat Processing Center. This partnership was deal in January 2017, which is why as at 31 December, we transferred the related assets and liabilities to the asset and liability items held for sale. The detail of these figures is as follows:

Amounts in euros 31 Dec 2016
Assets
Tangible and intagible assets 17,057,018
Deferred tax assets 166,792
Inventories 1,850,977
Trade account receivables and other current assets 445,762
Cash and cash equivalents 2,000
Assets available for sale 19,522,549
Deferred tax liabilities 284,632
Trade creditors 2,802,583
Other current liabilities 8,639,528
Liabilities available for sale 11,726,743

15 SHARE CAPITAL

Share Capital

As at 31 March 2017, the share capital, which is fully subscribed and paid for, is made up of 2,000,000,000 ordinary shares, which do not have the right to a fixed dividend, with a nominal value of 1 euro each.

Cash Settled Equity Swap

On 15th November 2007, Sonae Holding sold 132,856,072 Sonae Holding shares directly owned by the Company. The shares were sold in a market operation at the unit price of 2.06 euro per share and resulted on a cash inflow (net of brokerage commissions) of 273,398,877 euro.

On the same date, Sonae Investments, BV wholly owned by Sonae Holding entered into a derivative financial instrument - Cash Settled Equity Swap - over a total of 132.800.000 Sonae Holding shares, representative of 6.64% of its capital.

This transaction has strictly financial liquidation, without any duty or right for the Company or any of its associated companies in the purchase of these shares. This transaction allows Sonae Investments BV to totally maintain the economic exposure to the sold shares.

In this context, although legally all the rights and obligations inherent to these shares have been transferred to the buyer. Sonae Holding did not derecognize their own shares, recording a liability in the caption "Other current liabilities" (Note 21). According to the interpretation made by Sonae of the IAS 39, applied by analogy to own equity instruments, the derecognition of own shares is not allowed as the group maintains the risks and rewards arising on the instruments sold.

Consequently, Sonae maintains in its capital acquisition cost of the shares that remain covered by the contract.

In November 2014, was made a renewal for an additional period of one year renewable automatically, keeping the remaining conditions unchanged. During the year of 2016 the Group requested the partial termination of the Cash Settled Equity Swap for 8,322,338 Sonae SGPS shares.

Considering the operations mentioned above, the liability recorded amounts to 88,859,076 euro (Note 21) (87,721,109 euro as at 31 December 2016) reflecting the market value of 107,188,270 Sonae Holding shares (110.341.017 shares as at 31 de December 2016).

The value of these liabilities is adjusted at the end of each month by the effect of Sonae Holding share price variation being recognized a current asset/liability in order to present the right / obligation related to the receipt / financial liquidation that occurs on a monthly basis.

Additionally, the costs related to the "floating amount" based on the Euribor 1 month are recognized in the income statement.

The value to get established on the basis of dividends and reserves distributed by Sonae is credited in equity to offset the charge of the distribution.

Capital Structure

As at 31 March 2017, the following entities held more than 20% of the subscribed share capital:

Company %

Efanor Investimentos, SGPS, SA and subsidiaries 52.48

16 NON-CONTROLING INTERESTS

As at 31 March 2017 and 31 December 2016, "Non-controlling interests" are detailed as follows:

31 Mar 2017
Equity Profit/(Loss) for
the period
Book value of
non-controlling
interests
Proportion in
income
attributable to
non-controlling
interests
Dividends
attributable to
non-controlling
interests
Sonae Retail
Real Estate Investment Funds 128,059,385 2,248,028 1,678,726 29,469 -
IVN - Serviços Partilhados, SA (Consolidated) 61,048,619 676,094 30,524,310 338,047 -
Others 9,237,671 (8,958) 2,514,513 86,885 -
Sonae IM
Sonaecom, SGPS, SA (consolidated) 1,021,133,997 4,268,296 103,337,650 452,177 -
MDS, SGPS, SA (consolidated) 19,624,325 (1,251,578) 11,166,281 (639,244) -
Others 41,217,481 (227,733) 20,762,504 (24,742) -
Others 2,549,583 131,805 135,256 7,974 (27,938)
Total 1,282,871,061 5,835,954 170,119,240 250,566 (27,938)
31 Dec 2016
COMPANY Equity Profit/(Loss) for
the period
Book value of
non-controlling
interests
Proportion in
income
attributable to
non-controlling
interests
Dividends
attributable to
non-controlling
interests
Sonae Retail
Real Estate Investment Funds 125,811,358 25,529,809 2,629,269 533,537 (610,230)
IVN - Serviços Partilhados, SA (Consolidated) 60,453,882 5,930,459 30,226,941 2,965,230 -
Others 9,152,769 2,570,584 2,404,163 793,781 21
Sonae IM
Sonaecom, SGPS, SA (consolidated) 1,017,143,618 52,755,605 102,914,088 5,124,109 (1,809,412)
MDS, SGPS, SA (consolidated) 20,506,341 (7,145,437) 11,630,167 (3,347,778) (282,387)
Others 41,492,754 1,445,220 20,812,117 821,336 -
- - -
Others 2,713,521 435,461 155,121 30,133 (28,703)
Total 1,277,274,243 81,521,701 170,771,866 6,920,348 (2,730,711)

Movements in non-controlling interests during the periods ended as at 31 March 2017 and 2016 are as follows:

31 March 2017
Sonae Retail Sonae IM Others
Real Estate
Investment
Funds
IVN - Serviços
Partilhados, SA
(Consolidated)
Others Sonaecom,
SGPS, SA
(consolidated)
MDS, SGPS, SA
(consolidated)
Others Others Total
Opening balance as at 1 January 2,629,269 30,226,941 2,404,163 102,914,088 11,630,167 20,812,117 155,121 170,771,866
Distributed dividends - - - - - - (27,938) (27,938)
Changes of increased shareholding by acquisitions (980,015) - - - - - - (980,015)
Change in currency translation reserve - - - (49,427) 178,666 1,556 - 130,795
Participation in other comprehensive income (net of tax)
related to joint ventures and associated companies included
in consolidation by the equity method
- - - 8,432 - - - 8,432
Obligation fulfilled by share attribution to employees - - - - 14,551 9,460 112 24,123
Changes in hedging reserves - (40,611) 23,465 - - (35,888) - (53,034)
Others 3 (67) - 12,380 (17,859) 1 (13) (5,555)
Profit for the period attributable to non-controlling interests 29,469 338,047 86,885 452,177 (639,244) (24,742) 7,974 250,566
Closing balance as at 31 March 1,678,726 30,524,310 2,514,513 103,337,650 11,166,281 20,762,504 135,256 170,119,240
31 Mar 2016
Sonae Retail Sonae IM Others
Real Estate
Investment
Funds
Others Sonaecom,
SGPS, SA
(consolidated)
MDS, SGPS, SA
(consolidated)
Others Total
Opening balance as at 1 January 2,691,601 21,708,783 99,303,284 12,599,187 868 136,303,723
Distributed dividends - (57,405) (29,880) - - (87,285)
Changes of increased shareholding by acquisitions 134,197 - - - - 134,197
Change in currency translation reserve - 10,092 81,586 (2,012,450) - (1,920,772)
Participation in other comprehensive income (net of tax)
related to joint ventures and associated companies included
in consolidation by the equity method
- - (1,249,336) - - (1,249,336)
Obligation fulfilled by share attribution to employees - 14,926 - 9,610 - 24,536
Changes in hedging reserves - (41,597) - - - (41,597)
Others - - (282,302) 11,020 163,081 (108,201)
Profit for the period attributable to non-controlling interests 414,988 66,633 (1,554,669) (119,319) 266 (1,192,101)
Closing balance as at 31 March 3,240,786 21,701,432 96,268,683 10,488,048 164,215 131,863,164

17 LOANS

As at March 2017 and 31 December 2016, loans are made up as follows:

31 Mar 2017
31 Dec 2016
Outstanding amount
Outstanding amount
Current
Non current
Current
Non current
Bank loans
Sonae, SGPS, SA - commercial paper
107,846,000
145,000,000
162,000,000
Sonae, SGPS, SA
-
50,000,000
-
Sonae Investimentos, SGPS,SA - commercial paper
100,000,000
300,000,000
148,000,000
Sonae Investimentos affiliated /2014/2020
-
50,000,000
-
Sonae Investimentos affiliated /2015/2020
-
55,000,000
-
Sonae Investimentos affiliated /2015/2019
5,000,000
35,000,000
5,000,000
Sonae Holding affiliated /2014/2018
-
40,000,000
-
Sonae Holding affiliated /2014/2021
-
30,000,000
-
1) MDS, SGPS, SA - commercial paper
-
-
6,875,000
1) MDS SGPS, SA affiliated / 2011/2016
-
-
4,081,000
Others
5,135,270
18,787,758
6,678,849
217,981,270
723,787,758
332,634,849
94,000,000
50,000,000
121,000,000
50,000,000
55,000,000
35,000,000
40,000,000
30,000,000
13,125,000
-
20,540,714
508,665,714
Bank overdrafts (Note 13)
20,992,237
-
17,730,231
-
Up-front fees beard with the issuance of borrowings
-
(712,796)
-
(781,540)
Bank loans
238,973,507
723,074,962
350,365,080
507,884,174
Bonds:
Bonds Sonae SGPS/ 2015/2022
-
100,000,000
-
100,000,000
Bonds Sonae SGPS/ 2016/2023
-
60,000,000
-
60,000,000
Bonds Sonae Investments BV / 2014/2019
-
200,015,658
-
198,892,884
Bonds Sonae Investimentos SGPS/ June 2013/2018
-
50,000,000
-
50,000,000
Bonds Sonae Investimentos / December 2015/2020
-
50,000,000
-
50,000,000
Bonds Sonae Investimentos / May 2015/2020
-
75,000,000
-
75,000,000
Bonds Sonae Investimentos / December 2015/2020
-
30,000,000
-
30,000,000
Bonds Sonae Investimentos / June 2016/2021
-
95,000,000
-
95,000,000
Bonds Sonae Investimentos / September 2016/2021
3,000,000
12,000,000
3,000,000
12,000,000
Bonds IVN 2016/2023
5,000,000
30,000,000
5,000,000
30,000,000
Up-front fees beard with the issuance of borrowings
(1,483)
(4,662,531)
(1,483)
(5,089,605)
Bonds
7,998,517
697,353,127
7,998,517
695,803,279
Other loans
1,206,719
4,280,098
1,411,067
4,676,660
Derivatives (Note 18)
663,832
-
358,117
-
Other loans
1,870,551
4,280,098
1,769,184
4,676,660
Obligations under finance leases
1,038,153
1,257,170
1,079,629
1,463,520
249,880,728
1,425,965,357
361,212,410
1,209,827,633

1) Amounts transferred to "Non-current liabilities held for sale" (Note 14).

In June 2014, a subsidiary of Sonae SGPS, SA issued bonds which may be convertible (Sonae Investments BV 2014/2019) in Sonae shares already issued and fully subscribed or to be later on issued.

The fair value of the Equity component of this compound instrument was valued at 22,313,000 euro and it was determined by an independent entity from Sonae, taking into consideration the fair value of similar non- convertible financial instruments, having been estimated a market interest rate to establish the amortized cost of this financial liability. The liability component is recorded at the amortized cost based on the market rate, the maturity of the loans includes the option value at amortized cost.

The Bonds were issued at par with a nominal value of 100,000 euro per bond, (2.105 euro per bond) with a maturity of 5 years and with a fixed coupon of 1.625% per year, paid in arrears and semi-annually.

The bonds can be converted at the request of the bondholder when the Sonae SGPS, SA share price, in accordance with the technical data sheet, exceeds 1,656 euro per share. This price is subject to adjustments in accordance with the market practices, in particular when the dividend exceeds 0.0287 euro per share.

It is estimated that the book value of all loans does not differ significantly from its fair value, determined based on discounted cash flows methodology, with the exception the convertible bond loan into shares whose fair value is determined by the market price at the balance sheet date.

Bonds and bank loans bear an average interest rate of 1.27% (1.32% as at 31 December 2016). Most of the bonds and bank loans have variable interest rates indexed to Euribor.

The derivatives are recorded at fair value (Note 18).

The loans face value, maturities and interests are as follows (including obligations under financial leases):

31 Mar 2017 31 Dec 2016
N+1 a) 249,218,379 360,854,294
N+2 230,267,076 134,813,933
N+3 361,574,218 263,494,503
N+4 333,135,151 334,769,210
N+5 289,143,750 286,814,675
After N+5 227,704,831 207,415,055
1,691,043,405 1,588,161,670

a) Includes amounts drawn under commercial paper programs when classified as current liabilities.

The maturities above were estimated in accordance with the contractual terms of the loans, and taking into account Sonae's best estimated regarding their reimbursement date.

As at 31 March 2017, Sonae has, as detailed below, cash and cash equivalents in the amount of 285 million euro (341 million euro in 31 December 2016) and available credit lines as follows:

31 Mar 2017 31 Dec 2016
Commitments of
less than one year
Commitments of
more than one year
Commitments of
less than one year
Commitments of
more than one
year
Unused credit facilities 125,417,294 273,500,000 109,464,259 439,250,000
Agreed credit facilities 352,955,242 760,000,000 443,580,242 709,625,000

18 DERIVATIVES

Exchange Rate Derivatives

Sonae uses exchange rate derivatives, essentially to hedge future cash flows that will occur in the next 12 months.

Therefore, Sonae entered several exchange rate forwards in order to manage its exchange rate exposure.

The fair value of exchange rate derivatives hedging instruments, calculated based on present market value of equivalent financial instruments of exchange rate, is 663.832 euro as liabilities (358,117 euro as at 31 December 2016) and 688118 euro as assets (4.207.972 euro as at 31 December 2016).

The accounting of the fair value for these financial instruments was made taking into consideration the present value at financial position statement date of the forward settlement amount in the maturity date of the contract. The settlement amount considered in the valuation, is equal to the currency notional amount (foreign currency) multiplied by the difference between the contracted forward exchange rate and the forward exchange market rate at that date as at the valuation date.

Losses in the period arising from changes in the fair value of instruments that do not qualify for hedging accounting treatment were recorded directly in the income statement in the captions "Others Financial income" or "Financial expenses".

Gains and losses for the year associated with the change in market value of derivative instruments are recorded under the caption "Hedging reserve" when considered cash flow hedging and when considered as fair value hedging are recorded under the caption "Financial income" or "Financial expenses". The change in market value of derivative instruments when considered as speculation is recorded in the income statement under the caption "Other expenses".

Interest rate derivatives

Sonae does not have any interest rate hedging derivatives recorded as at 31 March 2017.

Interest rate and Exchange rate derivatives

As at 31 March 2017 no contracts existed, related to interest rate and exchange rate derivatives simultaneously.

Fair value of derivatives

The fair value of derivatives is detailed as follows:

Assets Liabilities
31 Mar 2017 31 Dec 2016 31 Mar 2017 31 Dec 2016
Hedging derivatives
Exchange rate 688,118 4,207,972 663,832 358,117
688,118 4,207,972 663,832 358,117

19 OTHER NON – CURRENT LIABILITIES

As at 31 March 2017 and 31 December 2016, "Other non-current liabilities" are detailed as follows:

31 Mar 2017 31 Dec 2016
Shareholders loans 433,787 415,382
Fixed assets suppliers 57,500 406,872
Other non-current liabilities 1,821,613 1,720,153
Deferral of the disposal of the extended warranties 15,304,522 15,101,455
Accruals and deferrals 3,885,355 3,913,526
Other non-current liabilities 21,502,777 21,557,388

The carrying amount of "Other non-current liabilities" is estimated to be approximately its fair value.

20 SHARE-BASED PAYMENTS

In 2017 and in previous years, Sonae in accordance with the remuneration policy described in the corporate governance report granted deferred performance bonus to its directors and eligible employees. These are either based on shares to be acquired at nil cost or with discount, three years after they were attributed to the employee, or based on share options with the period price equal to the share price at the grant date, to be exercised three years later. In both cases, the acquisition can be exercised during the period commencing on the third anniversary of the grant date and the end of that year.

As at 31 March 2017, all Sonae Holding share plans responsibilities are accounted in the statement of financial position under "other reserves" and in the Profit and Loss statement under caption "staff costs". They are recognized at the shares fair value on the grant date, concerning the 2017, 2016 and 31 December 2015. Share-based payments costs are recognized on a straight-line basis between the grant and the settlement date.

As at 31 March 2017 and 31 December 2016, the number of attributed shares related to the assumed responsibilities arising from share based payments, which have not yet vested, can be detailed as follows:

Number of shares
Grant year Vesting year Number of
participants
Share price on
date of
31 Mar 2017 31 Dec 2016
Shares
2014 2017 225 1.024 4,057,442 4,340,464
2015 2018 248 1.048 3,472,441 3,619,285
2016 2019 270 0.97 4,380,421 4,964,016
2017 2020 104 0.970 4,443,440 -
Total 16,353,744 12,923,765

During the period ending 31 March 2017 the movements on the above mentioned share based plans were the following:

Aggregate number
of participants
Number of shares
Balance as at 31 December 2016 768 12,923,765
Grant 106 3,501,603
Vesting (2) (303,888)
Excluded from the perimeter of consolidation (1) (25) 232,264
Closing balance as at 31 March 2017 847 16,353,744

(1) Corrections are made on the basis of the dividend paid and the changes of share capital and other equity adjustments.

As at 31 March 2017 and 31 December 2016, the fair value of total liabilities on the date of allocation arising from share based payments, which have not yet vested, may be summarized as follows:

Fair value *
Grant year Vesting year 31 Mar 2017 31 Dec 2016
2014 2017 3,935,719 4,210,250
2015 2018 2,526,201 2,340,471
2016 2019 2,478,588 1,605,032
2017 2020 1,436,712 -
Total 10,377,220 8,155,753

* Share market value as of 31 September 2016 and 31 December 2015.

As at 31 March 2017 and 31 December 2016 the financial statements include the following amounts corresponding to the period elapsed between the date of granting and those dates for each deferred bonus plan, which has not yet vested:

31 Mar 2017 31 Dec 2016
Recorded in staff costs in the current period 1,241,875 1,785,772
Recorded in previous years 8,070,996 6,825,062
9,312,871 8,610,834
Recorded in other liabilities - -
Recorded value in Other reserves 9,312,871 8,610,834
9,312,871 8,610,834

21 TRADE CREDITORS AND OTHER CURRENT LIABILITIES

As at 31 March 2017 and 31 December 2016, "Trade creditors and other current liabilities" were made up as follows:

31 Mar 2017 31 Dec 2016
Trade creditors 1,026,790,209 1,136,655,247
Taxes payable 78,324,868 91,929,635
Other creditors
Fixed asset suppliers 30,539,793 67,208,877
Related undertakings 80,200,833 -
Other debts 132,657,118 133,431,355
243,397,744 200,640,232
Other current liabilities
Holiday pay and bonuses 122,247,511 122,568,080
Other external supplies and services 30,046,298 32,121,742
Deferred Revenue of warranty extension 45,844,601 45,073,283
Responsabilities assumed on sale of real state 17,433,613 17,558,769
Rentals 8,438,626 8,092,102
Marketing expenses 10,867,817 11,807,052
Advance receipts from trade receivables 8,353,900 10,615,437
Interest payable 4,829,567 2,449,632
Expenses on purchases 5,930,172 6,238,536
Insurance payable 426,352 632,982
Others 16,164,075 13,842,767
270,582,532 271,000,382
1,619,095,353 1,700,225,496

The caption "Other debts" includes:

  • 88,859,076 euro (87,721,109 euro as at 31 December 2016) relating to the fair value of the shares covered by Sonae Holding financial derivative referred to in Note 15;

  • 9,373,190 euro (8,344,127 euro as at 31 December 2016) of attributed discounts not yet redeemed related to loyalty card "Cartão Cliente";

  • 13,110,790 euro (15,042,306 euro as at 31 December 2016) related to vouchers, gift cards and discount tickets not yet redeemed;

  • 4,052,641 euro (3,992,919 euro as at 31 December 2016) related to amounts payable to Sonae Distribuição Brasil. S.A. buyer as result of responsibilities assumed with that entity (Note 22);

22 PROVISION AND ACCUMULATED IMPAIRMENT LOSSES

Movements in "Provisions and accumulated impairment losses "over the period ended 31 March 2017 and 2016 are as follows:

Caption Balance as at
01 Jan 2017
Increase Decrease Transfers to
"Assets and
liabilities available
for sale"
Balance as at
31 March 2017
Accumulated impairment losses on investments
(Note 9)
9,054,576 21,906 (1,068) (8,694,118) 381,296
Impairment losses on fixed tangible assets (Note 5) 119,100,221 - (2,656,276) - 116,443,945
Impairment losses on intangible assets 2,638,761 191,070 (131,088) (191,070) 2,507,673
Accumulated impairment losses on trade account receivables
and other debtors (Note 11)
17,871,034 597,469 (1,010,294) (15,668) 17,442,541
Non current provisions 25,848,118 297,613 (611,301) (4,176,359) 21,358,071
Current provisions 3,558,708 135,529 (262,526) (223,145) 3,208,566
178,071,418 1,243,587 (4,672,553) (13,300,360) 161,342,092
Caption Balance as at
01 Jan 2016
Restated
Increase Decrease Balance as at
31 March 2016
Restated
Accumulated impairment losses on investments 1,886,603 - - 1,886,603
Impairment losses on fixed tangible assets 133,564,363 6,600,000 (15,194,681) 124,969,682
Impairment losses on intangible assets 1,497,024 - - 1,497,024
Accumulated impairment losses on trade account receivables
and other debtors
18,285,857 979,827 (803,055) 18,462,629
Non current provisions 39,710,058 1,745,501 (2,362,432) 39,093,127
Current provisions 3,083,990 - (34,208) 3,049,782
198,027,895 9,325,328 (18,394,376) 188,958,847

As at 31 March 2017 and 31 December 2016, provision's details can be analyzed as follows:

31 Mar 2017 31 Dec 2016
Technical provisions on reinsurance 875,614 1,061,465
Future liabilities relating to subsidiaries of retail in Brazil
sold
8,648,772 8,521,318
Clients guarantees 1,449,195 1,449,195
Judicial claims 2,040,304 2,270,177
Contingent liabilities related to subsidiaries acquired 5,827,570 5,827,750
Others 5,725,182 10,276,921
24,566,637 29,406,826

Impairment losses are deducted from the book value of the corresponding asset.

23 CONTINGENT ASSETS AND LIABILITIES

As at 31 March 2017 and 31 December 2016, major contingent liabilities were guarantees given and can be detailed as follows:

- Guarantees and secureties given

31 Mar 2017 31 Dec 2016
Guarantees given:
on tax claims 1,149,513,016 1,153,774,789
on judicial claims 890,504 887,275
on municipal claims 8,378,511 8,048,110
contract by proper compliments 14,464,481 21,516,088
other guarantees 8,001,279 9,261,512

a) Tax Claims

The main tax claims with bank guarantees given or sureties associated are as follows:

  • Some retail operating segment subsidiaries of the Company granted guarantees in favor of the Portuguese Tax Administration, associated with tax claims for additional VAT payment amounting to 556.7 million euro (556.7 million euro as at 31 December 2016) related to the period from 2004 to 2013, which the Company has presented, or has the intention of presenting, a tax appeal. Portuguese tax authorities claim that the Company should have invoiced VAT related to promotional discounts invoiced to suppliers which depend on the purchases made by the Group during the year, as it considers that the discounts correspond to services rendered by the company. Tax authorities also claim that the company should not have deducted VAT from discount vouchers used by its non-corporate clients.

  • The caption guarantees given on tax claims include guarantees granted, in the amount of 142.9 million euro (142.9 million euro as at 31 December 2016), in favor of Tax authorities regarding 2007 up to 2013. Concerning these guarantees, the most significant amount relates to an increase in equity arising on the disposal of own shares to a third party in 2007, as well as to the disregard of the reinvestment concerning capital gains in share disposal, and the fact that demerger operations must be disregarded for income tax purposes. The Company has presented an appeal against this additional tax claim, being the Board of Directors understanding, based on its advisor's assessment, that such appeal will be favourable.

  • Sureties in the amount of, approximately, 60 million euro as a result of a tax appeal presented by the Company concerning an additional tax assessment by Tax authorities, relating to 31December 2005, following the correction of taxable income for corresponding to a prior cover tax losses accumulated by the subsidiary, which has been brought to the cost of participation, moreover, as is understanding already signed by the Tax Administration itself, and now understood that in this case should not consider the amount of the cost of participation , thus including cover losses upon liquidation of the subsidiary company;

  • Sureties in the amount of, approximately 50 million euro, following a tax appeal presented by the Company concerning additional tax assessments made by Tax authorities, relating to 31 December 2002, which refer to the non-acceptance by Tax authorities of tax losses arising on the sale and liquidation of a subsidiary of the Group;

  • Fiscal lawsuit related to rent tax, concerning a subsidiary of the Company in Brazil, in the amount of, approximately, 19.1 million euro (64.6 million Brazilian real), which is being judged by a tax court, for which there were granted guarantees in the amount of 48.4 million euro (163.6 million Brazilian real). The difference between the value of the contingency and the value of the guarantee relates with the update of the related responsibility.

b) Contingent assets and liabilities related to tax claims paid under regularization programs of tax debts

Within the framework of regularization of tax debts to Tax Authorities, (Outstanding Debts Settlement of Tax and Social Security - Decree of Law 151-A/2013 e Decree of Law 248-A), the Group made tax payments in the amount of, approximately, 26.3 million euro, having the respective guarantees been eliminated. The related tax appeals continue in courts, having the maximum contingencies been reduced through the elimination of fines and interests related with these tax assessments.

As permitted by law, the Group maintains the legal proceedings, in order to establish the recovery of those amounts, having recorded as an asset the amounts related with income taxes paid under those plans (Note 13).

  • c) Other contingent liabilities
  • Contingent liabilities related to discontinued activities in subsidiaries in Brazil

Following the disposal of a subsidiary in Brazil, Sonae guaranteed to the buyer of the subsidiary all the losses incurred by that company arising on unfavourably decisions not open for appeal, concerning tax lawsuits on transactions that took place before the sale date (13 December 2005) and that exceed 40 million euro. As at 31 December 2016, the amount claimed by the Brazilian Tax Authorities, concerning the tax lawsuits still in progress, which the company's lawyers assess as having a high probability of loss, plus the amounts already paid (28.5 million euro) related to programs for the Brazilian State of tax recovery, amount to near 32.4 million euro at 31 March 2017 (32.4 million euro at 31 December 2016). Furthermore, there are other tax assessments totalling 60.8 million euro (60.8 million euro as at 31 December 2016) for which the Board of Directors, based on its lawyers' assessment, understands will not imply future losses to the former subsidiary.

No provision has been recorded to face risks arising from events related to guarantees given, as the Board of Directors considers that no liabilities will result for Sonae.

It was not created any provision to cover possible risks related to events/disputes for which guarantees were given for being understanding of the Board of Directors that the resolution of these events / disputes without loss to Sonae.

24 RELATED PARTIES

Balances and transactions with related parties are detailed as follows:

Sales and services rendered Purchases and services obtained
Transactions 31 Mar 2017 31 Mar 2016 31 Mar 2017 31 Mar 2016
Parent Company 46,835 58,507
3,264,210
7,699,846
14,022,477
25,045,040
31 Mar 2016
-
-
-
-
31 Dec 2016
25,136
29,377,178
6,583,207
16,965,780
52,951,301
Loans
31 Dec 2016
166,848 162,718
Jointly controlled companies 13,444,543 68,837,581 10,507,008
Associated companies 8,070,258 - -
Other related parties 13,037,162 4,312,587 6,790,014
34,598,798 73,317,016 17,459,740
Interest income Interest expenses
Transactions 31 Mar 2017 31 Mar 2017 31 Mar 2016
Parent Company - - 111,892
Jointly controlled companies 135 - -
Other related parties - 3,638 18,723
135 3,638 130,615
Accounts receivable Accounts payable
Balances 31 Mar 2017 31 Mar 2017 31 Dec 2016
Parent Company 39,700 42,124,063 688,294
Jointly controlled companies 51,891,709 41,882,108 15,192,431
Associated companies 5,534,961 624,803 147,945
Other related parties 12,135,497 41,735,511 10,405,360
69,601,867 126,366,485 26,434,030
Obtained Granted
Balances 31 Mar 2017 31 Mar 2017 31 Dec 2016
Jointly controlled companies 1,000 1,000 - -
Associated companies 755 - 191,615 -
Other related parties 460,669 442,382 103,569 3,570
462,424 443,382 295,184 3,570

25 OTHER INCOME

As at 31 March 2017 and 2016, the caption "Other Income" is made up as follow:

31 Mar 2017 31 Mar 2016
Restated
Supplementary income 154,181,959 145,022,699
Prompt payment discounts obtained 5,992,590 6,404,761
Foreign currency exchange gains 5,471,817 5,935,668
Own work capitalised 2,707,961 2,417,714
Gains on sales of assets 72,846 64,709,554
Impairment losses reversals 977,731 1,681,697
Others 947,144 2,382,252
170,352,048 228,554,345

In the caption "Gains on disposal of assets" as at 31 March 2016 are includes gains related to operations Sale and Leaseback in the amount of 63.1 million euro (Note 5).

26 INCOME TAX

As at 31 March 2017 and 2016, income tax is made up as follows:

31 Mar 2017 31 Mar 2016
Restated
Current tax 4,188,688 18,843,452
Deferred tax (6,617,664) (7,352,334)
(2,428,976) 11,491,118

27 EARNINGS PER SHARE

Earnings per share for the period were calculated taking into consideration the following amounts:

31 Mar 2017 31 Mar 2016
Continuing
Operations
Discontinued
Operations
Continuing
Operations
Discontinued
Operations
Restated
(Note 14)
Net profit
Net profit taken into consideration to calculate basic earnings per share
(consolidated profit for the period)
8,379,992 255,558 29,709,494 372,404
Effect of dilutive potential shares - - - -
Interest related to convertible bonds (net of tax) 1,968,533 - 1,919,941 -
Net profit taken into consideration to calculate diluted earnings per share 10,348,525 255,558 31,629,435 372,404
Number of shares
Weighted average number of shares used to calculate basic earnings per share 1,886,718,512 1,886,718,512 1,877,002,993 1,887,410,072
Effect of dilutive potential ordinary shares from convertible bonds 127,113,527 127,113,527 127,113,527 127,113,527
Outstanding shares related with share based payments 16,353,744 16,353,744 17,086,314 17,086,314
Shares related to performance bonus that can be bought at market price (8,310,732) (8,310,732) (4,536,021) (4,536,021)
Weighted average number of shares used to calculate diluted earnings per
share
2,021,875,050 2,021,875,051 2,016,666,813 2,027,073,892
Earnings per share
Basic 0.005485 0.000135 0.016851 0.000197
Diluted 0.005118 0.000126 0.015684 0.000184

28 PRESENTATION OF CONSOLIDATED INCOME STATEMENTS

In the Management Report, and for the purposes of calculating financial indicators as EBIT, EBITDA and underlying EBITDA the consolidated income statement is divided between Direct Income and Indirect Income.

The Indirect Income includes the contribution of Sonae Sierra, net of taxes that result from: (i) valuation of investment properties; (ii) gains (losses) with the sale of financial investments, joint ventures or associates; (iii) impairment losses relating to non-current assets (including Goodwill) and (iv) provisions for assets at risk. Additionally and with regard to the portfolio of Sonae, it includes: (i) impairment of real estate assets

for retail, (ii) decreases in Goodwill, (iii) negative Goodwill (net of taxes) related to acquisitions in the financial year, (iv) provisions (net of tax) for possible future liabilities, and impairments related to noncore investments, businesses and discontinued assets (or to be discontinued / repositioned), (v) valuation results based on the methodology "mark-to-market" of other current investments that will be sold or traded in the near future and (vi) other irrelevant issues.

The value of EBITDA and EBIT are calculated in the direct income component, i.e. excluding the indirect contributions.

The reconciliation between the two presentation formats for the consolidated income statement for the periods ended 31 March 2017 and 2016 can be summarized as follows:

31 Mar 2017 31 Mar 2016 Restated
Consolidated Indirect
Income
Direct
Income
Consolidated Indirect
Income
Direct
Income
Turnover 1,278,078,660 - 1,278,078,660 1,205,947,275 - 1,205,947,275
Investment income
Dividends - - - (30,923) - (30,923)
Impairment losses - - - - - -
Others - - - - - -
Other income
Impairment losses reversal 993,039 - 993,039 850,575 - 850,575
Others 169,286,152 - 169,286,152 291,577,284 - 291,577,284
Total income 1,448,357,851 - 1,448,357,851 1,498,344,211 - 1,498,344,211
Total expenses (1,398,481,552) (194,030) (1,398,287,522) (1,454,121,727) (188,850) (1,453,932,877)
Depreciation and amortisation (48,114,492) - (48,114,492) (42,059,926) - (42,059,926)
Non-recurring impairment losses over inventories (545,008) - (545,008) (675,855) - (675,855)
Provisions and impairment - - - - - -
Others (501,383) - (501,383) (7,776,368) - (7,776,368)
Profit before financial results and share of results
in associated companies
715,416 (194,030) 909,446 (6,289,665) (188,850) (6,100,815)
Non-recurring Profit/(Loss) (1,397,880) - (1,397,880) 62,224,175 - 62,224,175
Gains and losses on investments recorded at fair
value through results - - - (15,263,369) (15,263,369) -
Financial profit/(loss) (7,719,417) - (7,719,417) (13,969,426) - (13,969,426)
Share of results in joint ventures and associated
undertakings
Sonae Sierra 7,950,612 413,329 7,537,283 8,269,188 881,507 7,387,681
Armilar Venture Funds (171,842) (171,842) - - - -
ZOPT 7,133,578 - 7,133,578 4,863,490 - 4,863,490
Others (818,980) - (818,980) (198,137) - (198,137)
Profit before income tax 5,691,487 47,457 5,644,030 39,636,256 (14,570,712) 54,206,968
Income tax 2,428,976 - 2,428,976 (11,491,118) - (11,491,118)
Profit/(Loss) from continuing operations 8,120,463 47,457 8,073,006 28,145,138 (14,570,712) 42,715,850
Profit/(Loss) from discontinued operations 510,095 - 510,095 744,659 - 744,659
Net profit for the period 8,630,558 47,457 8,583,101 28,889,797 (14,570,712) 43,460,509
Attributable to equity holders of Sonae 8,379,992 (203,109) 8,583,101 - 30,081,898 (14,570,712) 44,652,610
Non-controlling interests 250,566 250,566 - (1,192,101) - (1,192,101)
"Underlying" EBITDA (b) 49,077,290 43,559,143
Direct EBITDA (a) 62,041,386 118,581,011
Direct EBIT (c) 13,873,542 68,919,437

(a) EBITDA = total direct income - total direct expenses - reversal of direct impairment losses + share of results in joint ventures and associated undertakings (Sonae Sierra direct results, and ZOPT) + unusual results;

  • (b) "Underlying" EBITDA = EBITDA effect of share result in joint ventures and associated undertakings – non-recurrent results;
  • (c) EBIT = EBT financial results dividends;
  • (d) EBT = Direct results before non-controlling interests and taxes;
  • (e) Direct income = Results excluding contributions to indirect results;
  • (f) Indirect income = Includes Sonae Sierra's results, net of taxes, arising from: (i) investment properties valuations; (ii) capital gains (losses) on the sale of financial investments, joint ventures or associates; (iii) impairment losses for noncurrent assets (including Goodwill) and; (iv) provision for assets at risk. Additionally and with regard to the portfolio of Sonae, it includes: (i) impairment of real estate assets for retail, (ii) decrease in goodwill, (iii) provisions (net of tax) for possible future liabilities and impairments related with non-core financial investments, businesses, discontinued assets (or be discontinued/ repositioned); (iv) valuation results based on the methodology "markto-market" of other current investments that will be sold or traded in the near future; and (v) other irrelevant issues.

29 SUBSEQUENT EVENTS

On 26th April 2017, Sonae – SGPS, SA, through one of its subsidiaries, has reached an agreement with the shareholders of BRIO – Produtos de Agricultura Biológica, S.A. (BRIO) for the acquisition of 100% of BRIO's share capital. Founded in 2008, BRIO is the first organic supermarket chain launched in Portugal, and operates 6 supermarkets specialised in organic food, all of them with convenient locations in the Lisbon area.

30 APPROVAL OF THE FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved by the Board of Directors on 15 May 2017.

31 GROUP COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT

Group companies included in the consolidated financial statements, their head offices and percentage of share capital held by Sonae as at 31 March 2017 and 31 December 2016 are as follows:

Percentage of capital held
31 Mar 2017 31 Dez 2016
COMPANY Head Office Direct* Total* Direct* Total*
Sonae - SGPS, S.A. Maia HOLDING HOLDING HOLDING HOLDING

Sonae Retail

Aduanas Caspe, S.L.U. a) Zaragoza (Spain) 100.00% 100.00% 100.00% 100.00%
Arat Inmuebles, SA a) Madrid (Spain) 100.00% 100.00% 100.00% 100.00%
Azulino Imobiliária, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
BB Food Service, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Bertimóvel - Sociedade Imobiliária, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Bom Momento - Restauração, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Canasta - Empreendimentos Imobiliários, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Chão Verde - Sociedade de Gestão Imobiliária, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Citorres - Sociedade Imobiliária, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Comercial Losan Polonia SP Z.O.O a) Warsaw (Poland) 100.00% 100.00% 100.00% 100.00%
Comercial Losan, S.L.U. a) Zaragoza (Spain) 100.00% 100.00% 100.00% 100.00%
Contimobe - Imobiliária de Castelo de Paiva, SA a) Castelo de Paiva
(Portugal)
100.00% 100.00% 100.00% 100.00%
Continente Hipermercados, SA a) Lisbon (Portugal) 100.00% 100.00% 100.00% 100.00%
Cumulativa - Sociedade Imobiliária, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Discovery Sports, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Elergone Energias, Lda a) Matosinhos (Portugal) 75.00% 75.00% 75.00% 75.00%
Farmácia Selecção, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Fashion Division, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Fashion Division Canárias, SL a) Tenerife (Spain) 100.00% 100.00% 100.00% 100.00%
Fozimo - Sociedade Imobiliária, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Fundo de Investimento Imobiliário Fechado Imosede a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Fundo de Investimento Imobiliário Imosonae Dois a) Maia (Portugal) 98.69% 98.69% 97.91% 97.91%
Global Usebti, S.L. a) Zaragoza (Spain) 100.00% 100.00% 100.00% 100.00%
HighDome PCC Limited (Cell Europe) a) La Valletta (Malta) 100.00% 100.00% 100.00% 100.00%
Igimo – Sociedade Imobiliária, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Iginha – Sociedade Imobiliária, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Imoestrutura – Sociedade Imobiliária, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Imomuro – Sociedade Imobiliária, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Imoresultado – Sociedade Imobiliária, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Imosistema – Sociedade Imobiliária, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Infofield – Informática, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Irmãos Vila Nova, SA a) Vila Nova de Famalicão
(Portugal)
100.00% 50.00% 100.00% 50.00%
Irmãos Vila Nova III - Imobiliária, SA a) Vila Nova de Famalicão
(Portugal)
100.00% 50.00% 100.00% 50.00%
IVN – Serviços Partilhados, SA a) Vila Nova de Famalicão
(Portugal)
50.00% 50.00% 50.00% 50.00%
IVN Asia Limited a) Hong Kong (China) 100.00% 50.00% 100.00% 50.00%
Losan Colombia, S.A.S a) Bogota (Colombia) 100.00% 100.00% 100.00% 100.00%
Losan Overseas Textile, S.L. a) Zaragoza (Spain) 100.00% 100.00% 100.00% 100.00%
Losan Tekstil Urunleri V e Dis Ticaret, L.S. a) Istanbul (Turkey) 100.00% 100.00% 100.00% 100.00%
Marcas MC, zRT a) Budapest (Hungary) 100.00% 100.00% 100.00% 100.00%
MCCARE – Serviços de Saúde, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
MJB Design, Lda a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
MJLF - Empreendimentos Imobiliários, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Modalfa - Comércio e Serviços, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Modalloop - Vestuário e Calçado, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Modelo Continente Hipermercados, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Modelo Continente International Trade, SA a) Madrid (Espanha) 100.00% 100.00% 100.00% 100.00%
Modelo - Distribuição de Materiais de Construção, SA b) Maia (Portugal) 50.00% 50.00% 50.00% 50.00%
Modelo Hiper Imobiliária, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Pharmaconcept – Actividades em Saúde, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Pharmacontinente - Saúde e Higiene, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Ponto de Chegada – Sociedade Imobiliária, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Predicomercial - Promoção Imobiliária, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Predilugar- Promoção Imobiliária, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Salsa DE Gmbh a) Dusseldorf (Germany) 100.00% 50.00% 100.00% 50.00%
Salsa Distribution USA LLC a) New York (USA) 100.00% 50.00% 100.00% 50.00%
Salsa France, S.A.R.L. a) Paris (France) 99.99% 50.00% 99.99% 50.00%
Salsa Luxembourg, Sàrl a) Luxembourg 100.00% 50.00% 100.00% 50.00%
SLS Salsa – Comércio e Difusão de Vestuário, S.A. a) Vila Nova de Famalicão
(Portugal)
100.00% 50.00% 100.00% 50.00%
SLS Salsa España – Comercio y Difusión de Vestuario,
S.A.U.
a) Pontevedra (Spain) 100.00% 50.00% 100.00% 50.00%
SDSR – Sports Division SR, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Selifa - Empreendimentos Imobiliários de Fafe, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Sempre à Mão - Sociedade Imobiliária, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Sesagest - Proj.Gestão Imobiliária, SA a) Porto (Portugal) 100.00% 100.00% 100.00% 100.00%
SIAL Participações, Ltda a) São Paulo (Brazil) 100.00% 100.00% 100.00% 100.00%
Socijofra - Sociedade Imobiliária, SA a) Gondomar (Portugal) 100.00% 100.00% 100.00% 100.00%
Sociloures - Sociedade Imobiliária, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Soflorin, BV a) Amsterdam
(Netherlands)
100.00% 100.00% 100.00% 100.00%
1) Sohi Meat Solutions- Distribuição de Carnes, SA a) Santarém (Portugal) 50.00% 50.00% 100.00% 100.00%
Sonae Capital Brasil, Lda a) São Paulo (Brazil) 100.00% 100.00% 100.00% 100.00%
Sonae Center Serviços II, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Sonae Investimentos, SGPS, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Sonae MC – Modelo Continente SGPS, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Sonae MC S2 Africa Limited a) La Valletta (Malta) 100.00% 100.00% 100.00% 100.00%
Sonae SR Malta Holding Limited a) La Valletta (Malta) 100.00% 100.00% 100.00% 100.00%
Sonaegest-Soc.Gest.Fundos Investimentos, SA a) Maia (Portugal) 100.00% 90.00% 100.00% 90.00%
Sonaerp - Retail Properties, SA a) Porto (Portugal) 100.00% 100.00% 100.00% 100.00%
SONAESR – Serviços e Logística, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Sondis Imobiliária, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Sonvecap, BV a) Amsterdam
(Netherlands)
100.00% 100.00% 100.00% 100.00%
Sport Zone Canárias, SL a) Tenerife (Spain) 60.00% 60.00% 60.00% 60.00%
Sport Zone España - Comércio de Articulos de Deporte, a) Madrid (Spain) 100.00% 100.00% 100.00% 100.00%
SA
Sport Zone spor malz.per.satis ith.ve tic.ltd.sti
a) Istanbul (Turkey) 100.00% 100.00% 100.00% 100.00%
Têxtil do Marco, SA a) Marco de Canaveses
(Portugal)
92.76% 92.76% 92.76% 92.76%
Usebti Textile México S.A. de C.V. a) Mexico City (Mexico) 100.00% 100.00% 100.00% 100.00%
Valor N, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Worten Canárias, SL a) Tenerife (Spain) 60.00% 60.00% 60.00% 60.00%
Worten - Equipamento para o Lar, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Worten España Distribución, S.L. a) Madrid (Spain) 100.00% 100.00% 100.00% 100.00%
Zippy - Comércio e Distribuição, SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Zippy - Comércio Y Distribución, SA a) Madrid (Spain) 100.00% 100.00% 100.00% 100.00%
Zippy cocuk malz.dag.ith.ve tic.ltd.sti a) Istanbul (Turkey) 100.00% 100.00% 100.00% 100.00%
ZYEvolution-Invest.Desenv., SA a) Matosinhos (Portugal) 100.00% 100.00% 100.00% 100.00%
Sonae IM
Bright Development Studio, SA a) Maia (Portugal) 100.00% 89.97% 100.00% 89.97%
Bright Ventures Capital SCR a) Maia (Portugal) 100.00% 89.97% 100.00% 89.97%
Cape Tecnologies Limited a) Dublin (Ireland) 100.00% 89.97% 100.00% 89.97%
Digitmarket - Sistemas de Informação, SA a) Maia (Portugal) 75.10% 67.56% 75.10% 67.56%
Inovretail, Lda a) Maia (Portugal) 100.00% 89.97% 100.00% 89.97%
S21SEC Portugal – Cybersecurity and Intelligence
Services, SA
a) Maia (Portugal) 100.00% 89.97% 100.00% 89.97%
Praesidium Services Limited a) Berkshire (U.K.) 100.00% 89.97% 100.00% 89.97%
S21 Sec Brasil, Ltda a) São Paulo (Brazil) 99.99% 89.96% 99.99% 89.96%
S21 Sec Ciber Seguridad SA de CV a) Mexico City (Mexico) 100.00% 89.97% 100.00% 89.97%
S21 Sec Gestion, SA a) Navarra (Spain) 100.00% 89.97% 100.00% 89.97%
S21 Sec Information Security Labs, S.L. a) Navarra (Spain) 100.00% 89.97% 100.00% 89.97%
S21 Sec México, SA de CV a) Mexico City (Mexico) 100.00% 89.97% 100.00% 89.97%
S21 Sec SA de CV a) Mexico City (Mexico) 100.00% 89.97% 100.00% 89.97%
Saphety – Transacciones Electronicas SAS a) Bogota (Colombia) 100.00% 78.27% 100.00% 78.27%
Saphety Brasil Transações Electrônicas Lda a) São Paulo (Brazil 100.00% 78.27% 100.00% 78.27%
Saphety Level - Trusted Services, SA a) Maia (Portugal) 86.99% 78.27% 86.99% 78.27%
Sonaecom-Cyber Security and Int., SGPS, SA a) Maia (Portugal) 100.00% 89.97% 100.00% 89.97%
Sonaecom - Serviços Partilhados, SA a) Maia (Portugal) 100.00% 89.97% 100.00% 89.97%
Sonaecom - Sistemas de Información España, SL a) Madrid (Spain) 100.00% 89.97% 100.00% 89.97%
Sonaecom, SGPS, SA a) Maia (Portugal) 90.15% 89.97% 90.15% 89.97%
Sonae Investment Management - Software and
Technology, SGPS, SA
a) Maia (Portugal) 100.00% 89.97% 100.00% 89.97%
Tecnológica Telecomunicações, Ltda a) Rio de Janeiro (Brazil) 99.99% 89.87% 99.99% 89.87%
We Do Brasil Soluções Informáticas, Ltda a) Rio de Janeiro (Brazil) 99.91% 89.88% 99.91% 89.88%
We Do Consulting - Sistemas de Informação, SA a) Maia (Portugal) 100.00% 89.97% 100.00% 89.97%
We Do Technologies (UK) Limited a) Berkshire (R.U.) 100.00% 89.97% 100.00% 89.97%
We Do Tecnologies Americas, Inc. a) Delaware
(USA)
100.00% 89.97% 100.00% 89.97%
We Do Technologies Australia PTY Limited a) Sydney (Austrália) 100.00% 89.97% 100.00% 89.97%
We Do Technologies Egypt Limited Liability Company a) Cairo (Egypt) 100.00% 89.97% 100.00% 89.97%
We Do Technologies Mexico S. de RL a) Mexico City (Mexico) 100.00% 89.97% 100.00% 89.97%
We Do Tecnologies BV a) Amsterdam
(Netherlands)
100.00% 89.97% 100.00% 89.97%
Sonae FS
SFS – Serviços de Gestão e Marketing, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Sonae Financial Services, S.A. a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Others
2) Accive Insurance – Corretor de Seguros, SA a) Porto (Portugal) 70.00% 35.01% 70.00% 35.01%
2) Herco Consultoria de Risco e Corretora de Seguros, Ltda a) Santa Catarina (Brazil) 100.00% 50.01% 100.00% 50.01%
2) Herco, Consultoria de Risco, SA a) Maia (Portugal) 100.00% 50.01% 100.00% 50.01%
2) HighDome PCC Limited a) La Valletta (Malta) 100.00% 50.01% 100.00% 50.01%
2) Iberosegur – Sociedade Ibérica de Mediação de
Seguros, Lda
a) Porto (Portugal) 100.00% 50.01% 100.00% 50.01%
Libra Serviços, Lda a) Funchal (Portugal) 100.00% 100.00% 100.00% 100.00%
2) Larim Corretora de Resseguros Ltda a) Rio de Janeiro (Brazil) 99.99% 50.01% 99.99% 50.01%
2) Lazam/mds Correctora Ltda a) São Paulo (Brazil) 100.00% 50.01% 100.00% 50.01%
2) MDS África, SGPS, SA a) Porto (Portugal) 50.00% 25.05% 50.00% 25.05%
2) MDS - Corretor de Seguros, SA a) Porto (Portugal) 100.00% 50.01% 100.00% 50.01%
2) MDS Affinity-Sociedade de Mediação Lda a) Porto (Portugal) 100.00% 50.01% 100.00% 50.01%
2) MDS Auto - Mediação de Seguros, SA a) Porto (Portugal) 50.01% 25.01% 50.01% 25.01%
2) MDS Malta Holding Limited a) La Valletta (Malta) 100.00% 50.01% 100.00% 50.01%
2) MDS RE – Mediador de resseguros, SGPS, SA a) Porto (Portugal) 100.00% 25.05% 100.00% 25.05%
2) MDS, SGPS, SA a) Maia (Portugal) 50.01% 50.01% 50.01% 50.01%
2) Moneris Seguros - Mediação de Seguros, Lda a) Oeiras (Portugal) 60.00% 30.01% 60.00% 30.01%
PCJ-Público, Comunicação e Jornalismo, SA a) Maia (Portugal) 100.00% 89.97% 100.00% 89.97%
Público - Comunicação Social, SA a) Porto (Portugal) 100.00% 89.97% 100.00% 89.97%
Sonae Investments, BV a) Amsterdam
(Netherlands)
100.00% 100.00% 100.00% 100.00%
Sonae RE, SA a) Luxembourg 99.92% 99.92% 99.92% 99.92%
Sonaecenter Serviços, SA a) Maia (Portugal) 100.00% 100.00% 100.00% 100.00%
Sontel, BV a) Amsterdam
(Netherlands)
100.00% 100.00% 100.00% 100.00%
Tlantic, BV a) Amsterdam
(Netherlands))
70.71% 70.71% 70.71% 70.71%
Tlantic Portugal - Sistemas de Informação, SA a) Maia (Portugal) 100.00% 70.71% 100.00% 70.71%
Tlantic Sistemas de Informação, Ltda a) Porto Alegre (Brazil) 100.00% 70.71% 100.00% 70.71%

*the percentage of capital held "Total" is the total percentage of interest held by the parent company's shareholders; the percentage of capital held "Direct" corresponds to the percentage that subsidiary(s) which hold(s) a participation, hold(s) this participation directly in the share capital of that company.

a) Control held by majority of voting rights which gives power of relevant activities;

b) Control held by majority of Board members;

  • 1) On January 3rd 2017, a Joint Venture was established between Sonae MC and Hilton Food Group PLC trough a capital increase of this Group on Sohimeat. From this moment, onwards, Sohimeat is consolidated through the equity method;
  • 2) On 31st March 2017, Sonae signed an agreement to sell shares of MDS SGPS to IPLF and changed the shareholder agreement, and Sonae was given joint control on the abovementioned subsidiary (Note 14).

These entities are consolidated using the full consolidation method.

32 JOINT VENTURES AND ASSOCIATED COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT

Joint ventures and associates, their head offices and percentage of share capital held by Sonae as at 31 March 2017 and 31 December 2016 are as follows:

32.1 Joint ventures

Percentage of capital held
31 Mar 2017 31 Dec 2016
COMPANY Head Office Direct* Total* Direct* Total*
Sonae Retail
1) Sohi Meat Solutions- Distribuição de Carnes, SA
a)
Santarém (Portugal) 50.00% 50.00% 100.00% 100.00%
Sonae Sierra
3shoppings - Holding, SGPS, SA Maia (Portugal) 100.00% 25.05% 100.00% 25.05%
8ª Avenida Centro Comercial, SA Maia (Portugal) 100.00% 11.25% 100.00% 11.25%
Aegean Park Constructions Real Estate and Development, SA Athens (Greece) 100.00% 25.00% 100.00% 25.00%
1) Albufeira RP (Luxembourg) 1, Sarl Luxembourg 100.00% 5.00% - -
1) Albufeira RP (Luxembourg) 2, Sarl Luxembourg 100.00% 5.00% - -
ALBCC – Albufeirashopping – Centro Comercial, SA Maia (Portugal) 100.00% 11.25% 100.00% 11.25%
1) ALBRP Albufeira Retail Park, Lda Maia (Portugal) 100.00% 5.00% - -
ALEXA Holding GmbH Dusseldorf (Germany) 100.00% 50.00% 100.00% 50.00%
ALEXA Shopping Centre GmbH Dusseldorf (Germany) 100.00% 50.00% 100.00% 50.00%
Algarveshopping - Centro Comercial, SA Maia (Portugal) 100.00% 5.00% 100.00% 5.00%
ARP Alverca Retail Park, SA Maia (Portugal) 100.00% 50.00% 100.00% 50.00%
Arrábidashopping - Centro Comercial, SA Maia (Portugal) 100.00% 12.53% 100.00% 12.53%
Campo Limpo Lda S. Paulo (Brazil) 20.00% 3.33% 20.00% 3.33%
Cascaishopping - Centro Comercial, SA Maia (Portugal) 100.00% 28.62% 100.00% 28.62%
Cascaishopping Holding I, SGPS, SA Maia (Portugal) 100.00% 28.62% 100.00% 28.62%
CCCB Caldas da Rainha - Centro Comercial, SA Maia (Portugal) 100.00% 50,00% 100,00% 50.00%
Centro Colombo - Centro Comercial, SA Maia (Portugal) 100.00% 12.53% 100.00% 12.53%
Centro Vasco da Gama - Centro Comercial, SA Maia (Portugal) 100.00% 12.53% 50.00% 12.53%
Coimbrashopping - Centro Comercial, SA Maia (Portugal) 100.00% 25.05% 100.00% 25.05%
Colombo Towers Holding, BV The Hague (Netherlands) 50.00% 25.00% 50.00% 25.00%
DOC Malaga Holdings S.L. Madrid (Spain) 50.00% 12.53% 50.00% 12.53%
DOC Malaga SITECO S.L.U. Madrid (spain) 100.00% 12.53% 100.00% 12.53%
Dortmund Tower GmbH Dusseldorf (Germany) 100.00% 50.00% 100.00% 50.00%
Dos Mares - Shopping Centre, BV Amsterdam
(Netherlands)
100.00% 25.05% 100.00% 25.05%
Dos Mares - Shopping Centre, SA Madrid (Spain) 100.00% 25.05% 100.00% 25.05%
Estação Viana - Centro Comercial, SA Viana do Castelo
(Portugal)
100.00% 5.00% 100.00% 5.00%
Freccia Rossa - Shopping Centre, Srl Milan (Italy) 50.00% 25.00% 50.00% 25.00%
Fundo de Investimento Imobiliário Parque Dom Pedro
Shopping Center
Rio de Janeiro (Brazil) 50.00% 10.34% 50.00% 10.34%
Fundo de Investimento Imobiliário Shopping Parque Dom
Pedro
Rio de Janeiro (Brazil) 87.61% 15.78% 87.61% 15.78%
Gaiashopping I - Centro Comercial, SA Maia (Portugal) 100.00% 12.53% 100.00% 12.53%
Gaiashopping II - Centro Comercial, SA Maia (Portugal) 100.00% 12.53% 100.00% 12.53%
Gli Orsi Shopping Centre 1, Srl Milan (Italy) 100.00% 50.00% 100.00% 50.00%
Guimarãeshopping - Centro Comercial, SA Maia (Portugal) 100.00% 25.05% 100.00% 25.05%
Harvey Dos Iberica, SL Madrid (Spain) 50.00% 12.53% 50.00% 12.53%
Iberian Assets, SA Madrid (Spain) 49.81% 12.48% 49.81% 12.48%
Iberia Shopping Centre Venture Cooperatief UA Amsterdam
(Netherlands)
100.00% 5.00% 100.00% 5.00%
Iberian Holdings Spain, S.L. Madrid (Spain) 100.00% 50.00% 100.00% 50.00%
Ioannina Development of Shopping Centres, SA Athens (Greece) 100.00% 50.00% 100.00% 50.00%
Land Retail, BV Amsterdam
(Netherlands)
100.00% 32.19% 100.00% 32.19%
Larissa Development of Shopping Centres, SA Athens (Greece) 100.00% 25.00% 100.00% 25.00%
LCC – Leiriashopping – Centro Comercial, SA Maia (Portugal) 100.00% 11.25% 100.00% 11.25%
Le Terrazze – Shopping Centre 1, Srl Milan (Italy) 50.00% 5.00% 50.00% 5.00%
Loureshopping – Centro Comercial, SA Maia (Portugal) 50.00% 5.63% 50.00% 5.63%
Luz del Tajo - Centro Comercial, SA Madrid (Spain) 100.00% 5.00% 100.00% 5.00%
Luz del Tajo, BV Amsterdam
(Netherlands)
100.00% 25.05% 100.00% 25.05%
Madeirashopping - Centro Comercial, SA Funchal (Portugal) 50.00% 12.53% 50.00% 12.53%
Maiashopping - Centro Comercial, SA Maia (Portugal) 100.00% 25.05% 100.00% 25.05%
Microcom Doi, Srl Bucharest (Romania) 100.00% 50.00% 100.00% 50.00%
Norte Shopping Retail and Leisure Centre, BV Amsterdam
(Netherlands)
50.00% 12.53% 50.00% 12.53%
Norteshopping - Centro Comercial, SA Maia (Portugal) 100.00% 12.53% 100.00% 12.53%
1) Olimpo Asset 1, S.A. Maia (Portugal) 100.00% 1.88% - -
Pantheon Plaza BV Amsterdam
(Netherlands)
50.00% 25.00% 50.00% 25.00%
Paracentro - Gestão de Galerias Comerciais, SA Maia (Portugal) 100.00% 50.00% 100.00% 50.00%
Park Avenue Developement of Shopping Centers, SA Athens (Greece) 50.00% 25.00% 100.00% 25.00%
Parklake Shopping, SA Bucharest (Romania) 50.00% 25.00% 50.00% 25.00%
Parque Atlântico Shopping - Centro Comercial SA Ponta Delgada (Portugal) 50.00% 12.53% 50.00% 12.53%
Parque D. Pedro 1, BV Sarl Luxembourg 100.00% 25.00% 100.00% 25.00%
Parque de Famalicão - Empreendimentos Imobiliários, SA Maia (Portugal) 100.00% 50.00% 100.00% 50.00%
Pátio Boavista Shopping, Ltda São Paulo (Brazil) 100.00% 16.66% 100.00% 16.66%
Pátio Goiânia Shopping, Ltda São Paulo (Brazil) 100.00% 16.66% 100.00% 16.66%
Pátio Londrina Empreendimentos e Participações, Ltda São Paulo (Brazil) 100.00% 16.66% 100.00% 16.66%
Pátio São Bernardo Shopping Ltda São Paulo (Brazil) 100.00% 16.66% 100.00% 16.66%
Pátio Sertório Shopping, Ltda Manaus (Brazil) 100.00% 16.66% 100.00% 16.66%
Pátio Uberlândia Shopping, Ltda São Paulo (Brazil) 100.00% 16.66% 100.00% 16.66%
Plaza Eboli - Centro Comercial, SA Madrid (Spain) 100.00% 50.00% 100.00% 50.00%
Plaza Mayor Parque de Ócio, BV Amsterdam
(Netherlands)
100.00% 25.05% 100.00% 25.05%
Plaza Mayor Parque de Ócio, SA Madrid (Spain) 100.00% 25.05% 100.00% 25.05%
Plaza Mayor Shopping, BV Amsterdam
(Netherlands)
100.00% 25.05% 100.00% 25.05%
Plaza Mayor Shopping, SA Madrid (Spain) 100.00% 25.05% 100.00% 25.05%
Plenerg Srl Bucharest (Romania) 50.00% 25.00% 50.00% 25.00%
PORTCC – Portimãoshopping – Centro Comercial, SA Maia (Portugal) 100.00% 11.25% 100.00% 11.25%
Project Guia, SA Maia (Portugal) 100.00% 5.00% 100.00% 5.00%
Project Sierra 10 BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Project Sierra 11 BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Project Sierra 12 BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Project Sierra 2, BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Project Sierra 8, BV Amsterdam
(Netherlands)
100.00% 5.00% 100.00% 5.00%
Project Sierra Cúcuta, BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Project Sierra Four, SA Bucharest (Romania) 100.00% 50.00% 100.00% 50.00%
Project Sierra Germany 2 (two), Shopping Centre, GmbH Dusseldorf (Germany) 100.00% 50.00% 100.00% 50.00%
Project Sierra Germany 4 (four), Shopping Centre, GmbH Dusseldorf (Germany) 100.00% 50.00% 100.00% 50.00%
Project Sierra Spain 1, BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Project Sierra Spain 2 - Centro Comercial, SA Madrid (Spain) 100.00% 50.00% 100.00% 50.00%
Project Sierra Two, Srl Bucharest (Romania) 100.00% 50.00% 100.00% 50.00%
Proyecto Cúcuta S.A.S Santiago de Cali
(Colombia)
50.00% 25.00% 50.00% 25.00%
Rio Sul – Centro Comercial, SA Lisbon (Portugal) 50.00% 5.63% 50.00% 5.63%
River Plaza BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
River Plaza Mall, Srl Bucharest (Romania) 100.00% 50.00% 100.00% 50.00%
SC Aegean, BV Amsterdam
(Netherlands)
50.00% 25.00% 50.00% 25.00%
Serra Shopping – Centro Comercial, SA Lisbon (Portugal) 50.00% 5.63% 50.00% 5.63%
Shopping Centre Colombo Holding, BV Amsterdam
(Netherlands)
50.00% 12.53% 50.00% 12.53%
Shopping Centre Parque Principado, BV Amsterdam
(Netherlands)
100.00% 25.05% 100.00% 25.05%
Sierra Berlin Holding BV Amsterdam
(Netherlands))
100.00% 50.00% 100.00% 50.00%
Sierra Brazil 1, BV Amsterdam
(Netherlands)
100.00% 25.00% 100.00% 25.00%
Sierra Central, S.A.S. Santiago de Cali
(Colombia)
50.00% 25.00% 50.00% 25.00%
Sierra Cevital Shopping Center, Spa Algeria 49.00 % 24.50% 49.00 % 24.50%
Sierra Core Assets Holdings, BV Amsterdam
(Netherlands)
50.00% 25.05% 50.00% 25.05%
Sierra Developments Holding, BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Sierra Developments, SGPS, SA Maia (Portugal) 100.00% 50.00% 100.00% 50.00%
Sierra European Retail Real Estate Assets Holdings, BV Amsterdam
(Netherlands))
50.10% 25.05% 50.10% 25.05%
Sierra Germany GmbH Dusseldorf (Germany) 100.00% 50.00% 100.00% 50.00%
Sierra GP, Limited Guernsey (U.K.) 100.00% 50.00% 100.00% 50.00%
Sierra Greece, SA Athens (Greece) 100.00% 50.00% 100.00% 50.00%
Sierra Investimentos Brasil Ltda São Paulo (Brazil) 100.00% 16.66% 100.00% 16.66%
Sierra Investments (Holland) 1, BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Sierra Investments (Holland) 2, BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Sierra Investments Holding, BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Sierra Investments SGPS, SA Maia (Portugal) 100.00% 50.00% 100.00% 50.00%
Sierra Italy, Srl Milan (Italy) 100.00% 50.00% 100.00% 50.00%
Sierra Management, SGPS, SA Maia (Portugal) 100.00% 50.00% 100.00% 50.00%
Sierra Maroc, SARL Casablanca (Morocco) 100.00% 50.00% 100.00% 50.00%
Sierra Maroc Services, SARL Casablanca (Morocco) 100.00% 50.00% 100.00% 50.00%
Sierra Portugal, SA Lisbon (Portugal) 100.00% 50.00% 100.00% 50.00%
Sierra Project Nürnberg BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Sierra Real Estate Greece BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Sierra Retail Ventures BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Sierra Romania Shopping Centers Services, SRL Bucharest (Romania) 100.00% 50.00% 100.00% 50.00%
Sierra Turkey Gayrimenkul Yönetim Pazarlama ve Danışmanlık
Anonim Şirket
Istanbul (Turkey) 100.00% 50.00% 100.00% 50.00%
Sierra Services Holland BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Sierra Solingen Holding GmbH Dusseldorf (Germany) 100.00% 50.00% 100.00% 50.00%
Sierra Spain Malaga Holdings, S.L. Madrid (Spain) 100.00% 50.00% 100.00% 50.00%
Sierra Spain – Shopping Centers Services, SA Madrid (Spain) 100.00% 50.00% 100.00% 50.00%
Sierra VdG Holding BV Amsterdam
(Netherlands)
100.00% 12.53% 100.00% 12.53%
Sierra Zenata Project B.V. Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Solingen Shopping Center GmbH Dusseldorf (Germany) 100.00% 25.00% 100.00% 25.00%
Sonae Sierra Brasil, SA São Paulo (Brazil) 66.65% 16.66% 66.65% 16.66%
Sonae Sierra Brazil, BV Sarl Luxembourg 50.00% 25.00% 50.00% 25.00%
Sonae Sierra, SGPS, SA Maia (Portugal) 50.00% 50.00% 50.00% 50.00%
SPF - Sierra Portugal Luxembourg 100.00% 50.00% 100.00% 50.00%
SPF - Sierra Portugal Real Estate, Sarl Luxembourg 22.50% 11.25% 22.50% 11.25%
Unishopping Consultoria Imobiliária, Ltda São Paulo (Brazil) 100.00% 16.66% 100.00% 16.66%
Via Catarina - Centro Comercial, SA Maia (Portugal) 50.00% 12.53% 50.00% 12.53%
Weiterstadt Shopping BV Amsterdam
(Netherlands)
100.00% 50.00% 100.00% 50.00%
Zenata Commercial Project, SA Mohammedia (Morocco) 100.00% 5.5% 100.00% 5.5%
ZOPT (NOS)
Big Picture 2 Films, SA Oeiras (Portugal) 20.00% 4.69% 20.00% 4.69%
Canal 20 TV, SA Madrid (Spain) 50.00% 11.73% 50.00% 11.73%
Dreamia Holding BV Amsterdam
(Netherlands)
50.00% 11.73% 50.00% 11.73%
Dreamia Serviços de Televisão, SA Lisbon (Portugal) 100.00% 11.73% 100.00% 11.73%
East Star Ltd Port Louis (Mauricias) 30.00% 7.04% 30.00% 7.04%
Empracine – Empresa Promotora de Atividades
Cinematográficas, Lda
Lisbon (Portugal) 100.00% 23.46% 100.00% 23.46%
FINSTAR – Sociedade de Investimentos e Participações, SA Luanda (Angola) 30.00% 7.04% 30.00% 7.04%
Lusomundo – Sociedade de investimentos imobiliários, SGPS,
SA
Lisbon (Portugal) 99.87% 23.43% 99.87% 23.43%
Lusomundo Imobiliária 2, SA Lisbon (Portugal) 99.87% 23.43% 99.87% 23.43%
Lusomundo Moçambique, Lda Maputo (Mozambique) 100.00% 23.46% 100.00% 23.46%
MSTAR, SA Maputo (Mozambique) 30.00% 7.04% 30.00% 7.04%
NOS Açores Comunicações, SA Ponta Delgada (Azores) 83.82% 19.66% 83.82% 19.66%
NOS Communications Sàrl Luxembourg 100.00% 23.46% 100.00% 23.46%
NOS Comunicações, SA Lisbon (Portugal) 100.00% 23.46% 100.00% 23.46%
NOS Inovação, SA Matosinhos (Portugal) 100.00% 23.46% 100.00% 23.46%
NOS Lusomundo Audiovisuais, SA Lisbon (Portugal) 100.00% 23.46% 100.00% 23.46%
NOS Lusomundo Cinemas, SA Lisbon (Portugal) 100.00% 23.46% 100.00% 23.46%
NOS Lusomundo TV, Lda Lisbon (Portugal) 100.00% 23.46% 100.00% 23.46%
NOS Madeira Comunicações, SA Funchal (Madeira) 77.95% 18.29% 77.95% 18.29%
NOS SGPS, SA Lisbon (Portugal) 52.15% 23.46% 52.15% 23.46%
NOS Sistemas España, SL Madrid (Spain) 100.00% 23.46% 100.00% 23.46%
NOS Sistemas, SA Maia (Portugal) 100.00% 23.46% 100.00% 23.46%
NOSPUB – Publicidade e Conteúdos, SA Lisbon (Portugal) 100.00% 23.46% 100.00% 23.46%
NOS Tecnology – Concepção Construção e Gestão de Redes
de Comunicação, SA
Matosinhos (Portugal) 100.00% 23.46% 100.00% 23.46%
NOS Towering – Gestão de Torres de Telecomunicações, SA Maia (Portugal) 100.00% 23.46% 100.00% 23.46%
Per-Mar – Sociedade de Construções, SA Maia (Portugal) 100.00% 23.46% 100.00% 23.46%
Sontária – Empreendimentos Imobiliários, SA Maia (Portugal) 100.00% 23.46% 100.00% 23.46%
Sport TV Portugal Lisbon (Portugal) 33.33% 7.82% 33.33% 7.82%
Teliz Holding, BV Amstelveen
(Netherlands)
100.00% 23.46% 100.00% 23.46%
Upstar Comunicações, SA Vendas Novas (Portugal) 30.00% 7.04% 30.00% 7.04%
ZAP Cinemas, SA Luanda (Angola) 100.00% 7.04% 100.00% 7.04%
ZAP Media, SA Luanda (Angola) 100.00% 7.04% 100.00% 7.04%
ZAP Publishing, SA Luanda (Angola) 100.00% 7.04% 100.00% 7.04%
ZOPT, SGPS, SA Porto (Portugal) 50.01% 44.98% 50.01% 44.98%
Sonae IM
Intelligent Big Data, SL Guipuzcoa (Spain) 50.00% 44.99% 50.00% 44.99%
Unipress - Centro Gráfico, Lda Vila Nova de Gaia
(Portugal)
50.00% 44.99% 50.00% 44.99%

*the percentage of capital held "Total" is the total percentage of interest held by the parent company's shareholders; the percentage of capital held "Direct" corresponds to the percentage that subsidiary(s) which hold(s) a participation, hold(s) this participation directly in the share capital of that company.

  • 1) On January 3rd 2017, a Joint Venture was established between Sonae MC and Hilton Food Group PLC trough a capital increase of this Group on Sohimeat. From this moment, onwards, Sohimeat is consolidated through the equity method;
  • 2) Company created in the period.

32.2 Associated companies

Percentage of capital held
31 Mar 2017 31 Dec 2016
COMPANY Head Office Direct* Total* Direct* Total*
Sonae Retail
APOR – Agência para a Modernização do Porto, S.A. Porto
(Portugal)
22,75% 22,75% 22,75% 22,75%
MOVVO, SA Porto
(Portugal)
25,58% 25,58% 25,58% 25,58%
Sempre a Postos – Produtos Alimentares e Utilidades, Lda Lisbon
(Portugal)
25,00% 25,00% 25,00% 25,00%
Ulabox, S.L. Barcelona
(Spain)
39,18% 39,18% 39,18% 39,18%
Sonae IM
Brokerslink Management AG Zug
(Switzerland)
20,00% 20,00% 20,00% 20,00%
Flexben, Lda Porto
(Portugal)
45,00% 45,00% - -

*the percentage of capital held "Total" is the total percentage of interest held by the parent company's shareholders; the percentage of capital held "Direct" corresponds to the percentage that subsidiary(s) which hold(s) a participation, hold(s) this participation directly in the share capital of that company.

Jointly controlled companies and associated companies were included in the consolidated financial statements by the equity method.

The Board of Directors

Duarte Paulo Teixeira de Azevedo, Chairman and Co-CEO

Ângelo Gabriel Ribeirinho dos Santos Paupério, Executive Director and Co-CEO

Andrew Eustace Clavering Campbell, Non-Executive Director

Christine Cross, Non-Executive

Dag Johan Skattum, Non-Executive

José Manuel Neves Adelino, Non-Executive

Marcelo Faria de Lima, Non-Executive

Margaret Lorraine Trainer, Non-Executive

Tsega Gebreyes, Non-Executive

Condensed separate financial statements

CONDENSED SEPARATE INDIVIDUAL STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2017 AND 2016 AND AT 31 DECEMBER 2016

(Translation of condensed separate financial statements originally issued in Portuguese.In case of discrepancy the Portuguese version prevails)

(Amounts expressed in euro)
ASSETS Notes 31.March.2017 31.March.2016 31.December.2016
NON-CURRENT ASSETS:
Tangible assets 84,627 84,909 65,375
Intangible assets 40 1,242 47
Investments in subsidiaries, associates and joint ventures 4 4,111,128,779 3,941,779,005 4,094,293,240
Other investments 5 31,070,089 30,065,856 30,644,385
Deferred taxes 9,663,951 - 966,895
Other non-current assets 6 173,092,867 347,400,000 173,092,867
Total non-current assets 4,325,040,353 4,319,331,012 4,299,062,809
CURRENT ASSETS:
Trade account receivables and other current assets 7 119,241,206 116,885,759 65,406,578
Cash and cash equivalents 8 76,623 1,495,584 950,886
Total current assets 119,317,829 118,381,343 66,357,464
TOTAL ASSETS 4,444,358,182 4,437,712,355 4,365,420,273
EQUITY AND LIABILITIES
EQUITY:
Share capital 9 2,000,000,000 2,000,000,000 2,000,000,000
Reserves and retained earnings 1,726,625,567 1,574,899,046 1,728,388,031
Profit for the period 46,992,821 12,049,874 61,300,218
TOTAL EQUITY 3,773,618,388 3,586,948,920 3,789,688,249
LIABILITIES:
NON-CURRENT LIABILITIES:
Loans 10 353,153,054 421,931,080 302,040,105
Total non-current liabilities 353,153,054 421,931,080 302,040,105
CURRENT LIABILITIES:
Loans 10 107,846,000 132,400,000 162,000,000
Trade creditors and other current liabilities 11 209,740,740 296,432,355 111,691,919
Total current liabilities 317,586,740 428,832,355 273,691,919
TOTAL EQUITY AND LIABILITIES 4,444,358,182 4,437,712,355 4,365,420,273

The accompanying notes are part of these condensed separate financial statements.

CONDENSED SEPARATE INCOME STATEMENTS FOR THE PERIODS ENDED 31 MARCH 2017 AND 2016

(Translation of condensed separate financial statements originally issued in Portuguese.In case of discrepancy the Portuguese version prevails)

(Amounts expressed in euro)

Notes 31.March.2017 31.March.2016
Services rendered 119,915 115,304
Gains or losses on investments 14 48,570,828 11,181,258
Financial income 806,118 7,381,818
Other income 472,335 596,497
External supplies and services (881,669) (716,784)
Staff costs (548,443) (520,479)
Depreciation and amortisation (7,921) (8,935)
Financial expense (1,711,674) (3,977,948)
Other expenses (112,523) (122,809)
Profit/(Loss) before taxation 46,706,966 13,927,922
Taxation 285,855 (1,878,048)
Profit/(Loss) after taxation 46,992,821 12,049,874
Profit/(Loss) per share
Basic 15 0.023496 0.006025
Diluted 15 0.023494 0.006024

The accompanying notes are part of these condensed separate financial statements.

CONDENSED SEPARATE STATEMENTS OF COMPREHENSIVE INCOME FOR THE PERIODS ENDED 31 MARCH 2017 AND 2016

(Translation of condensed separate financial statements originally issued in Portuguese.In case of discrepancy the Portuguese version prevails)

(Amounts expressed in euro)

31.March.2017 31.March.2016
Net Profit / (Loss) for the period 46,992,821 12,049,874
Changes on fair value of available-for-sale financial assets 17,261,243 6,223,090
Other comprehensive income for the period 17,261,243 6,223,090
Total comprehensive income for the period 64,254,064 18,272,964

The accompanying notes are part of these condensed separate financial statements.

CONDENSED SEPARATE STATEMENTS OF CHANGES IN EQUITY FOR THE PERIODS ENDED 31 MARCH 2017 AND 2016

(Translation of condensed separate financial statements originally issued in Portuguese.In case of discrepancy the Portuguese version prevails)

(Amounts expressed in euro)

d re
ed e
Res
tain
ings
erve
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Net
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Tot
Bala
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Jan
20
16
nce
as
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2,00
0,00
0,00
0
- 244
,21
1,59
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260
,223
,788
1,34
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3,82
7
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)
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- - - - (279
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,672
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)
,672
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279
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-
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- 1,11
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,467
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- 910
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- - - - (27
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3,37
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)
,374
- (27
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Bala
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16
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as
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2,00
0,00
0,00
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- 244
,21
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266
,446
,878
1,06
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0,57
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1,33
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49,8
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8,92
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Bala
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Jan
20
17
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as
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2,00
0,00
0,00
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- 244
,21
1,59
2
419
,542
,189
1,06
4,63
4,25
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1,48
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9
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Tot
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- - - 17,2
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- 17,2
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- - 3,06
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- - - - - - (58,
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The accompanying notes are part of these condensed separate financial statements.

CONDENSED SEPARATE CASH FLOW STATEMENTS FOR THE PERIODS ENDED 31 MARCH 2017 AND 2016

(Translation of condensed separate financial statements originally issued in Portuguese.In case of discrepancy the Portuguese version prevails)

(Amounts expressed in euro)

Notes 31.March.2017 31.March.2016
OPERATING ACTIVITIES
Net cash flow from operating activities (1) 202,264 (824,133)
INVESTMENT ACTIVITIES
Cash receipts arising from:
Interest and similar income 188,830 1,066,247
Loans granted 556,494,000 559,410,939
556,682,830 560,477,186
Cash Payments arising from:
Tangible and intangible assets (29,973) -
Loans granted (556,494,000) (559,410,939)
(556,523,973) (559,410,939)
Net cash used in investment activities (2) 158,857 1,066,247
FINANCING ACTIVITIES
Cash receipts arising from:
Loans obtained 963,234,000 1,463,165,007
Others - 5,616
963,234,000 1,463,170,623
Cash Payments arising from:
Loans obtained (963,146,000) (1,458,007,007)
Interest and similar charges (1,323,384) (4,300,647)
(964,469,384) (1,462,307,654)
Net cash used in financing activities (3) (1,235,384) 862,969
Net increase in cash and cash equivalents (4) = (1) + (2) + (3) (874,263) 1,105,083
Cash and cash equivalents at the beginning of the period 950,886 390,501
Cash and cash equivalents at the end of the period 8 76,623 1,495,584

The accompanying notes are part of these condensed separate financial statements.

SONAE, SGPS, SA

NOTES TO THE CONDENSED SEPARATE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 MARCH 2017

(Translation of the condensed separate financial statements originally issued in Portuguese.

In case of discrepancies the Portuguese version prevails)

(Amounts expressed in euro)

1 INTRODUCTION

SONAE, SGPS, SA ("the Company" or "Sonae"), has its head-office at Lugar do Espido, Via Norte, Apartado 1011, 4470-909 Maia, Portugal.

2 BASIS OF PREPARATION

Interim financial statements are presented quarterly, in accordance with IAS 34 – "Interim Financial Reporting".

3 PRINCIPAL ACCOUNTING POLICIES

The accounting policies adopted are consistent with those described in the file of annual financial statements for the year ended 31 December 2016.

4 INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

As at 31 March 2017 and 31 December 2016 the company held investments in the following companies:

31.March.2017
Companies % Held Opening
balance
Increase Decrease Changes in fair
value
Impairment loss
recognized during
the period
Closing balance
Interlog, SGPS, SA 1.02% 106,686 - - - - 106,686
Sonae Investimentos, SGPS, SA (a) 25.03% 637,971,655 - - - - 637,971,655
Sonae Investments, BV 100.00% 803,200,000 - - - - 803,200,000
Sonae RE, SA 99.92% 583,059 - - - - 583,059
Sonae Sierra SGPS, SA (b) 50.00% 709,210,000 - - 11,407,000 - 720,617,000
Sonaecom, SGPS, SA 26.02% 206,689,581 - - 5,428,539 - 212,118,120
Sonaegest, SA 20.00% 159,615 - - - - 159,615
Sonaecenter, Serviços, SA 100.00% 1,496,231,545 - - - - 1,496,231,545
Sontel, BV 35.87% 240,141,099 - - - - 240,141,099
Total 4,094,293,240 - - 16,835,539 - 4,111,128,779
31.December.2016
Companies % Held Opening
balance
Increase Decrease Changes in fair
value
Impairment loss
recognized during
the period
Closing balance
Interlog, SGPS, SA 1.02% 106,686 - - - - 106,686
Sonae Investimentos, SGPS, SA (a) 25.03% 637,971,655 - - - - 637,971,655
Sonae Investments, BV 100.00% 803,200,000 - - - - 803,200,000
Sonae RE, SA 99.92% 583,059 - - - - 583,059
Sonae Sierra SGPS, SA (b) 50.00% 589,893,500 - - 119,316,500 - 709,210,000
Sonaecom, SGPS, SA 26.02% 167,717,536 - - 38,972,045 - 206,689,581
Sonaegest, SA 20.00% 159,615 - - - - 159,615
Sonaecenter, Serviços, SA 100.00% 1,496,231,545 - - - - 1,496,231,545
Sontel, BV 35.87% 240,141,099 - - - - 240,141,099
Total 3,936,004,695 - - 158,288,545 - 4,094,293,240
  • (a) The value of this investment is the price paid in the public tender offer for the de-listing occurred in 2006. Since that date no change in the value of the investment was recorded.
  • (b) Market value was determined based on an independent valuation for the period of assets held by this affiliated company, after deduction of associated net debt and of the share attributable to non-controlling interests.

In previous years, the company recorded impairment losses on the following investments: Sontel BV (165,500,000 euro), Sonae Investments, BV (32,500,000 euro), Sonae RE, SA (3,089,000 euro) and Sonaecenter, Serviços, SA (341,000,000 euro).

5 OTHER INVESTMENTS

As at 31 March 2017 and 31 December 2016 other investments are as follows:

31.March.2017
Companies Opening
balance
Increase Decrease Changes in fair
value
Closing balance
Associação Escola Gestão Porto 49,880 - - - 49,880
Fundo de Investimento Imobiliário Fechado Imosede 30,594,505 - - 425,704 31,020,209
Total 30,644,385 - - 425,704 31,070,089
31.December.2016
Companies Opening
balance
Increase Decrease Changes in fair
value
Closing balance
Associação Escola Gestão Porto 49,880 - - - 49,880
Fundo Especial de Invest.Imob. Fechado Imosonae Dois 2,546 - (2,546) - -
Fundo de Investimento Imobiliário Fechado Imosede 29,564,649 - - 1,029,856 30,594,505
Total 29,617,075 - (2,546) 1,029,856 30,644,385

6 OTHER NON-CURRENT ASSETS

As at 31 March 2017 and 31 December 2016 other non-current assets are as follows:

31.March.2017 31.December.2016
Loans granted to group companies:
Sonae Investments, BV 173,092,867 173,092,867
173,092,867 173,092,867

As at 31 March 2017 the loans granted to group companies, bear interest at market rates indexed to Euribor, have a long-term maturity and its fair value is similar to its carrying amount.

7 TRADE ACCOUNTS RECEIVABLE AND OTHER CURRENT ASSETS

As at 31 March 2017 and 31 December 2016 trade accounts receivable and other current assets are detailed as follows:

31.March.2017 31.December.2016
Trade accounts receivable 215,268 715,428
Group companies
Dividends 48,570,828 -
Interests - 44,793
Taxes - Special regime for taxation of groups of companies 47,501,733 41,289,044
Taxes and contributions receivable 20,673,366 20,425,842
Accrued income and prepayments 2,031,447 2,760,665
Others 248,564 170,806
Total 119,241,206 65,406,578

The amount recorded in the caption taxes-special regime for taxation of groups corresponds to the tax estimate calculated by the companies taxed under the Special Regime for Taxation of Corporate Groups, of which the Company is the dominant company.

Loans granted to group companies return interest at variable market rates indexed to Euribor and have a maturity of less than one year.

8 CASH AND CASH EQUIVALENTS

As at 31 March 2017 and 31 December 2016 cash and cash equivalents are detailed as follows:

31.March.2017 31.December.2016
Cash at hand 2,433 2,233
Bank deposits 74,190 948,653
Cash and cash equivalents on the balance sheet 76,623 950,886
Cash and cash equivalents on the cash flow statement 76,623 950,886

9 SHARE CAPITAL

As at 31 March 2017 and 31 December 2016 share capital consisted of 2,000,000,000 ordinary shares of 1 euro each.

10 LOANS

As at 31 March 2017 and 31 December 2016, loans are made up as follows:

31.March.2017 31.December.2016
Bonds Sonae, SGPS 2015/2022 100,000,000 100,000,000
Bonds Sonae, SGPS 2016/2023 60,000,000 60,000,000
Up-front fees not yet charged to income statement (1,539,158) (1,638,448)
Bonds 158,460,842 158,361,552
Sonae SGPS - Commercial paper 145,000,000 94,000,000
Sonae SGPS - bank loans 50,000,000 50,000,000
Up-front fees not yet charged to income statement (307,788) (321,447)
Loans 194,692,212 143,678,553
Non-current loans 353,153,054 302,040,105
Sonae SGPS - Commercial paper 107,846,000 162,000,000
Loans 107,846,000 162,000,000
Current loans 107,846,000 162,000,000

Under lines of credit and commercial paper programs with firm commitments, Sonae, SGPS had 104 million euro credit facilities available to meet its liquidity requirements as follows:

Commitments of
less than one year
Commitments of
more than one year
Agreed credit facilities amounts 161,500,000 195,000,000
Available credit facilities amounts 53,654,000 50,000,000

The interest rate as at 31 March 2017 of the bonds and bank loans was, in average, 0.99% (0.95% as at 31 December 2016).

Maturity of Borrowings

As at 31 March 2017 and 31 December 2016 the analysis of maturity of loans excluding the derived instruments having in consideration its nominal value is as follows:

31.March.2017 31.December.2016
N+1 107,846,000 162,000,000
N+2 50,000,000 -
N+3 3,000,000 -
N+4 58,000,000 55,000,000
N+5 33,000,000 59,000,000
after N+5 211,000,000 190,000,000

11 TRADE CREDITORS AND OTHER CURRENT LIABILITIES

As at 31 March 2017 and 31 December 2016, trade creditors and other current liabilities are detailed as follows:

31.March.2017 31.December.2016
Trade creditors 370,803 545,724
Group companies:
Loans 41,884,000 38,642,000
Taxes - Special regime for taxation of groups of companies 66,202,255 53,092,883
Taxes and contributions payable 17,515,161 15,749,775
Accrued expenses 3,171,956 3,473,734
Others 80,596,565 187,803
Total 209,740,740 111,691,919

12 CONTINGENT LIABILITIES

As at 31 March 2017 and 31 December 2016, contingent liabilities are detailed as follows:

31.March.2017 31.December.2016
Guarantees given:
on tax claims 142,932,296 142,932,296
on judicial claims 70,766 70,766
Guarantees given in favour of subsidiaries a) 379,281,873 386,112,500

(a) Guarantees given to Tax Authorities in favour of subsidiaries to defer tax claims. The main tax claims for which guarantees were issued are disclosed in consolidated financial statements.

13 RELATED PARTIES

Balances and transactions with related parties are detailed as follows:

Balance 31.March.2017 31.December.2016
Group companies 59,807,779 52,150,959
Jointly controlled companies 37,661,284 420,628
Other partners in group companies 25,000 98,000
Accounts receivable 97,494,063 52,669,587
Parent company 42,124,060 688,281
Group companies 68,097,548 63,662,351
Jointly controlled companies - 85
Other partners in group companies 5,875 6,615
Accounts payable 110,227,483 64,357,332
Group companies 173,092,867 173,092,867
Loans granted 173,092,867 173,092,867
Group companies 41,884,000 38,642,000
Loans obtained 41,884,000 38,642,000
Transactions 31.March.2017 31.March.2016
Group companies 40,000 549,404
Jointly controlled companies 438,643 52,388
Other partners in group companies 79,915 25,000
Services rendered and other income 558,558 626,792
Parent company 166,848 162,718
Group companies 361,033 358,819
Other partners in group companies 12,309 11,771
Purchases and services obtained 540,190 533,308
Group companies 806,118 7,381,817
Interest income 806,118 7,381,817
Group companies 212,161 1,005,748
Interest expenses 212,161 1,005,748
Group companies 11,179,728 11,181,258
Jointly controlled companies 37,391,100 -
Dividend income (Note 14) 48,570,828 11,181,258

All Sonae, SGPS, SA subsidiaries, associates and joint ventures are considered related parties and are identified in Consolidated Financial Statements. All Efanor Investimentos, SGPS, SA (parent company), subsidiaries, including the ones of Sonae Indústria, SGPS, SA and of Sonae Capital, SGPS, SA (other partners in group companies) are also considered related parties.

14 INVESTMENTS INCOME

As at 31 March 2017 and 2016, investment income can be detailed as follows:

31.March.2017 31.March.2016
Dividends 48,570,828 11,181,258
48,570,828 11,181,258

Dividends were distributed from Sonae Investimentos, SGPS, SA (11,123,853 euro), Sonaegest, SA (55,875 euro) and Sonae Sierra, SGPS, SA (37,391,100) euro.

15 EARNINGS PER SHARE

Earnings per share for the period were calculated taking into consideration the following amounts:

31.March.2017 31.March.2016
Net profit
Net profit taken into consideration to calculate basic earnings per share
(Net profit for the period)
46,992,821 12,049,874
Effect of dilutive potential shares - -
Interests related to convertible bonds (net of tax) - -
Net profit taken into consideration to calculate diluted earnings per
share: 46,992,821 12,049,874
Number of shares
Weighted average number of shares used to calculate basic earnings 2,000,000,000 1,999,862,141
Effect of dilutive potential ordinary shares from convertible bonds - -
Outstanting shares related with deferred performance bonus 1,149,412 1,324,728
Number of shares that could be acquired at average market price (961,384) (786,361)
Weighted average number of shares used to calculate diluted earnings per
share 2,000,188,028 2,000,400,507
Profit/(Loss) per share
Basic 0.023496 0.006025
Diluted 0.023494 0.006024

16 SUBSEQUENT EVENTS

At the General Meeting of Shareholders held on 28 April 2017, a resolution was taken to distribute dividends to shareholders in the amount of 80,000,000 euro (paying a gross dividend per share of 0.04 euro) less the total amount of dividends to be distributed to shares that may eventually be acquired by the Company or by any of its subsidiaries up to the distribution date. The amount to be paid is already considered in these financial statements.

17 APPROVAL OF FINANCIAL STATEMENTS

The accompanying financial statements were approved by the Board of Directors and authorized for issue on 15 May 2017.

18 INFORMATION REQUIRED BY LAW

Decree-Law nr 318/94 art 5 nr 4

During the period ended 31 March 2017 short-term loan contracts were entered into with the following companies:

Sonae Investimentos, SGPS, SA

Sonaecom, SGPS, SA

As at 31 March 2017, amounts owed by subsidiaries can be summarized as follows:

Closing Balance
Sonae Investments, BV 173,092,867
Total 173,092,867

As at 31 March 2017 amounts owed to subsidiaries can be summarized as follows:

Closing Balance
Sonaecenter Serviços, SA 32,775,000
Sonae RE, SA 1,576,000
Sontel, BV 7,533,000
Total 41,884,000

The Board of Directors

Duarte Paulo Teixeira de Azevedo

Ângelo Gabriel Ribeirinho dos Santos Paupério

Andrew Eustace Clavering Campbell

Christine Cross

Dag Johan Skattum

José Manuel Neves Adelino

Marcelo Faria de Lima

Margaret Lorraine Trainer

Tsega Gebreyes

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 forward-looking 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.

Report available at Sonae's institutional website www.sonae.pt

Media and Investor Contacts

Patrícia Vieira Pinto Head of Investor Relations [email protected] Tel.: + 351 22 010 4794

Catarina Oliveira Fernandes Head of Communications, Brand and Corporate Responsibility [email protected] Tel.: + 351 22 010 4775

Maria João Oliveira External Communication [email protected] Tel.: + 351 22 010 4745

Sonae Lugar do Espido Via Norte 4471-909 Maia Portugal Tel.: +351 22 948 7522

SONAE is listed on the Euronext Stock Exchange. Information may also be accessed on Reuters under the symbol SONP.IN and on Bloomberg under the symbol SON PL

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