AI assistant
Jeronimo Martins — Earnings Release 2021
Jan 12, 2022
1906_iss_2022-01-12_00c9f016-4d76-44c4-b5da-84c21b18808c.pdf
Earnings Release
Open in viewerOpens in your device viewer
RELEASE
PRELIMINARY SALES
2021
Lisbon, 12 January 2022
FINANCIAL CALENDAR
FY 2021 Results: 9 March 2022 General Shareholders Meeting: 21 April 2022 Q1 2022 Results: 28 April 2022 H1 2022 Results: 27 July 2022 9M 2022 Results: 26 October 2022 *All releases will be published after the closing of the market
INVESTOR RELATIONS OFFICE MEDIA RELATIONS OFFICE +351 21 752 61 05 +351 21 752 61 80 [email protected] [email protected]
Cláudia Falcão [email protected] Rita Fragoso [email protected]om Hugo Fernandes [email protected] Nuno Abreu [email protected]
.com Jerónimo Martins, SGPS, S.A. Public Company | Head office: Rua Actor António Silva, n. º7, 1649-033 Lisbon | Share Capital: Euro 629,293,220.00 | Registered at the C.R.C. of Lisbon and Tax Number: 500 100 144 | www.jeronimomartins.com
We closed 2021 with another quarter of strong growth. Despite continuing uncertainty, consolidated sales in the year increased 8.3% (+10.7% at constant exchange rates), reflecting all banners' firm commitment to deliver quality at low prices to their consumers.
| (€ Million) | 2021 | % (Euro) |
% (w/o FX) |
LFL | Q4 21 | % (Euros) |
% (w/o FX) |
LFL |
|---|---|---|---|---|---|---|---|---|
| Net Sales | 20,889 | 8.3% | 10.7% | 8.0% | 5,683 | 11.5% | 13.7% | 10.5% |
| Biedronka | 14,542 | 8.0% | 11.0% | 8.3% | 3,912 | 10.0% | 12.8% | 9.8% |
| Hebe | 278 | 13.5% | 16.7% | 17.5% | 84 | 29.5% | 32.6% | 25.1% |
| Pingo Doce | 4,046 | 4.6% | - | 2.7%* | 1,090 | 6.4% | - | 4.4%* |
| Recheio | 906 | 7.0% | - | 7.0% | 247 | 18.6% | - | 18.9% |
| Ara | 1,102 | 29.0% | 36.1% | 24.3% | 344 | 44.3% | 47.1% | 31.5% |
| Others | 14 | - | - | - | 5 | - | - | - |
(*excl. fuel)
MESSAGE FROM THE CHAIRMAN AND CEO - PEDRO SOARES DOS SANTOS
'We will remember 2021 as the year in which, despite the pandemic and negative exchange rate impacts, Jerónimo Martins exceeded by a considerable margin the 20 billion euros sales milestone and strengthened market positions in all countries where it operates.
Throughout the year, Biedronka maintained the strong commercial intensity that its clients are used to and continued innovating in the assortment. The banner did not hesitate in investing to improve the offer and the shopping experience, guarantying the preference of Polish consumers. Also in Poland, Hebe posted a solid sales increase with online sales gaining traction.
In Portugal, in a very challenging environment marked by periods of restrictions to the normal activity of operations, Pingo Doce and Recheio worked with determination to support their value proposals and delivered significant sales growth.
In Colombia, Ara reinforced its position as main ally of the Colombian families and, in a very difficult context, guaranteed the best combination of quality and price. This effort was rewarded by consumers with a notable sales increase. Every quarter, Ara clearly consolidated its position in the neighbourhoods where it operates and accelerated its expansion in the country.
The Group's performance was achieved in a year full of challenges and uncertainties, during which our teams, with a well-deserved special mention for those at the front line of the business, once again, showed a remarkable resilience and capacity to adapt and overcome difficulties.
In this context and similarly to 2020, the Board of Directors approved the distribution, by Christmas season, of c.20 million euros at the Group level, to our employees in the stores and distribution centres who, once again, made it possible to serve our consumers in exceptionally challenging circumstances.
We closed 2021 with a very strong sales quarter reflecting the reinforced competitiveness of our banners. In 2022, adding to the uncertainty on the evolution of the pandemic and its impacts, we will have to manage the acceleration of food inflation seen at the end of the year in the three geographies where we operate. Nonetheless, we are confident that the proven capacity of our operations and the work developed in the supply chains will allow us to make 2022, when we celebrate 230 years of history, another chapter of profitable and sustainable growth.'
SALES PERFORMANCE
Consolidated sales grew by 8.3% (+10.7% at constant exchange rates) to reach €20.9 billion. All banners contributed to this solid performance, leading Group's LFL to reach 8.0%.
In Q4, sales increased 11.5% (+13.7% at constant exchange rates) to €5.7 billion with a LFL of 10.5%. Strong volume growth was the main driver of this performance that also benefited from the increase, in the period, of our banners' basket inflation.
POLAND
In Poland consumer demand remained positive throughout the year and since Q2 benefited from a controlled pandemic situation which enabled a more normalized circulation of people.
Food inflation in the country increased progressively throughout the year, reaching an average of c.6.7% in Q4 (0.6% in Q1, 1.6% in Q2 and 3.8% in Q3). The rising prices of raw materials across Europe, combined with local pressure in some categories, such as dairy products, weighed on the evolution recorded in the last months of the year.
Biedronka maintained a solid price leadership that, combined with intense commercial activity, ensured basket inflation remained consistently below the country's food inflation.
The innovation in the assortment together with the launch of impactful promotional campaigns and attractive in&out actions captured the preference of the Polish consumers throughout the year.
In 2021, sales in local currency grew by 11.0%, including a LFL of 8.3%. In euros, sales reached 14.5 billion, 8.0% above 2020.
In Q4, sales in local currency grew by 12.8%, with a remarkable LFL of 9.8%. In euros, sales were 3.9 billion, 10.0% higher than in Q4 20. The performance also benefited from higher inflation in the basket that in the last three months of the year was at an average of 3.9%.
Committed to the quality and efficiency of its store network, Biedronka opened 164 new locations (135 net additions), ahead of the plan for 2021, and remodelled a total of 334 stores in the year.
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2020 2021
In 2021, Hebe operated in a more normalized environment for most of the year with regards to restrictions related to the pandemic, though some limitations impacted the first four months, namely the closure of shopping centres in January, part of March and in April.
In the year the banner posted a sales' growth in local currency of 16.7%. Excluding the pharmacy business, which closed in July 2020, sales increased by 23.8% with LFL at 17.5% (LFL includes online sales).
In Q4, Hebe's sales grew 32.6% with LFL of 25.1%, benefiting from a favourable comparison against a period affected by many restrictions.
In euros, sales reached 278 million, 13.5% above 2020. In Q4, sales were €84 million, 29.5% above Q4 20.
At the core of Hebe's growth strategy online sales showed a solid evolution in the year, contributing with 13.0% of the banner's total sales. In 2021 the company began testing its presence in new markets through its e-commerce platform.
Expanding its store network, Hebe opened 25 new locations.
Biedronka LFL
-1.7%
PORTUGAL
In Portugal, the economic recovery was still limited by weak tourism activity and by the restrictions to normal circulation that punctuated the year, particularly until July.
Food inflation remained low throughout the year, averaging 0.9% in Q1, -0.1% in Q2 and 0.6% in Q3, though it accelerated to an average of 1.6% in Q4.
Despite intermittent restrictions on the circulation of people and on the normal operation of restaurants and cafes, which impacted the banner's growth potential in the first seven months of the year, Pingo Doce registered a solid sales performance.
The company maintained an intense promotional dynamic, ensuring competitive price positioning and offering good opportunities to consumers. As a result of this commitment to low prices, Pingo Doce operated during the year with negative inflation in the basket.
In the 12 months, sales reached the milestone of €4.0 billion, an increase of 4.6% compared to 2020, including LFL (excl. fuel) of 2.7%.
In Q4 sales reached €1.1 billion, +6.4% ahead of Q4 20, with LFL (excl. fuel) at 4.4%. The evolution of inflation in the basket, which moved into positive territory following the acceleration of food inflation in the country, and the sales mix in the quarter, which was influenced by products with higher inflation levels, contributed to this performance.
During the year, Pingo Doce opened 14 new stores (12 net additions) and renewed 15 locations.
The reduced tourism activity and the restrictions imposed throughout 2021, although less impactful than in 2020, continued to limit the recovery in Recheio's sales. Nonetheless, Recheio's performance responded positively whenever market conditions eased when compared to the previous year.
The banner's sales grew by 7.0% to €906 million, with LFL of 7.0%.
In Q4, with less restrictions than Q3 21 and Q4 20, the banner grew sales by 18.6% to €247 million, including LFL of 18.9%.
COLOMBIA
In Colombia, the effects of the previous year's confinement measures continued to affect the economic recovery in 2021.
After a more challenging Q2 21 with regards to pandemic conditions, the number of infections in the last two quarters of the year were relatively more controlled, and the circulation of people was broadly resumed with restrictive measures being applied locally and occasionally.
Food prices accelerated significantly from May, to which strikes and social protests contributed. The disruption of these events in the national supply chain, which are still being felt, led to the rise in prices of some basic products. Thus, food inflation was 4.8% in the Q1, 7.3% in Q2, 11.2% in Q3 and reached an average of 15.4% in Q4.
34.3% 1.1% -1.7% 11.1% 3.7% 22.8% 39.5% 31.5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ara LFL 2020 2021
Ara, with its offer well-designed for the needs of Colombian consumers, and growing appreciation for the quality and variety of its private label assortment, maintained a leading price position and an intense commercial dynamic. This was even more valued, considering the very challenging circumstances faced by many consumers.
The consistency of the value proposition and the price investment were reflected in a notable sales performance, which grew by 36.1% in local currency, including LFL of 24.3%.
In Q4, Ara increased sales in local currency by 47.1% with LFL of 31.5%.
In euros, in the year, sales surpassed the historic milestone of one billion, to reach €1.1 billion, 29.0% above 2020. In Q4, sales were €344 million, 44.3% above Q4 20.
The strength of this performance, which reflects the emerging momentum seen towards the end of 2020 and which clearly continued throughout 2021, reinforces the brand's growth ambition and the focus on building the pipeline for expansion. During 2021, Ara opened 157 new stores (156 net additions), ahead of plan. Having been inaugurated in December, a relevant number of the new stores had a very limited contribution to 2021 sales.
DISCLAIMER
Statements in this release that are forward-looking are based on current expectations of future events and are subject to risks and uncertainties that can cause actual results to differ materially from those expressed or implied by such statements. The risks and uncertainties, which have increased as a result of the Covid-19 pandemic, relate to factors that are beyond Jerónimo Martins' ability to control or estimate precisely, and include but are not limited to, general economic conditions, actions taken by governmental authorities to address Covid-19 effects and their impacts over the economy, competition, industry trends, credit markets, foreign exchange fluctuations, and regulatory developments.
Except as required by any applicable law or regulation, Jerónimo Martins assumes no obligation to update the information contained in this release or to notify a reader in the event that any matter stated herein changes or becomes inaccurate.
SALES BREAKDOWN APPENDIX
| (€ Million) | 2021 | 2020 | % | Q4 21 | Q4 20 | % | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| % total | % total | excl. FX | Euro | % total | % total | excl. FX | Euro | ||||||
| Biedronka | 14,542 | 69.6% | 13,465 | 69.8% 11.0% | 8.0% | 3,912 | 68.8% | 3,555 | 69.8% 12.8% | 10.0% | |||
| Hebe | 278 | 1.3% | 245 | 1.3% 16.7% | 13.5% | 84 | 1.5% | 65 | 1.3% 32.6% | 29.5% | |||
| Pingo Doce | 4,046 | 19.4% | 3,869 | 20.1% | 4.6% | 1,090 | 19.2% | 1,025 | 20.1% | 6.4% | |||
| Recheio | 906 | 4.3% | 847 | 4.4% | 7.0% | 247 | 4.3% | 208 | 4.1% | 18.6% | |||
| Ara | 1,102 | 5.3% | 854 | 4.4% 36.1% | 29.0% | 344 | 6.1% | 238 | 4.7% 47.1% | 44.3% | |||
| Others & Cons. Adjustments | 14 | 0.1% | 14 | 0.1% | 0.5% | 5 | 0.1% | 4 | 0.1% | 27.5% | |||
| Total JM | 20,889 | 100% | 19,293 | 100% 10.7% | 8.3% | 5,683 | 100% | 5,096 | 100% 13.7% | 11.5% |
SALES GROWTH
| Total Sales Growth | LFL Growth | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q1 21 | Q2 21 | H1 21 | Q3 21 | 9M 21 | Q4 21 | 2021 | Q1 21 | Q2 21 | H1 21 | Q3 21 | 9M 21 | Q4 21 | 2021 | |
| Biedronka | ||||||||||||||
| Euro | 3.9% | 9.8% | 6.8% | 8.1% | 7.3% | 10.0% | 8.0% | |||||||
| PLN | 9.2% | 10.4% | 9.8% | 11.2% | 10.3% | 12.8% | 11.0% | 6.5% | 8.8% | 7.7% | 8.1% | 7.8% | 9.8% | 8.3% |
| Hebe | ||||||||||||||
| Euro | -10.9% | 30.4% | 7.3% | 8.5% | 7.8% | 29.5% | 13.5% | |||||||
| PLN | -6.3% | 30.5% | 10.4% | 11.6% | 10.8% | 32.6% | 16.7% | 0.1% | 38.2% | 17.7% | 9.0% | 14.4% | 25.1% | 17.5% |
| Pingo Doce | -0.8% | 10.1% | 4.6% | 2.7% | 3.9% | 6.4% | 4.6% | -2.7% | 8.1% | 2.6% | 1.2% | 2.1% | 5.0% | 2.9% |
| Excl. Fuel | 0.3% | 9.4% | 4.8% | 2.5% | 4.0% | 5.9% | 4.5% | -1.6% | 7.3% | 2.8% | 1.0% | 2.1% | 4.4% | 2.7% |
| Recheio | -19.0% | 21.1% | -0.4% | 9.3% | 3.2% | 18.6% | 7.0% | -19.3% | 21.1% | -0.6% | 9.5% | 3.2% | 18.9% | 7.0% |
| Ara | ||||||||||||||
| Euro | 0.6% | 26.1% | 11.9% | 47.7% | 23.1% | 44.3% | 29.0% | |||||||
| COP | 10.5% | 32.8% | 20.9% | 53.6% | 31.6% | 47.1% | 36.1% | 3.7% | 22.8% | 12.6% | 39.5% | 21.5% | 31.5% | 24.3% |
| Total JM | ||||||||||||||
| Euro | 1.5% | 11.2% | 6.3% | 8.7% | 7.1% | 11.5% | 8.3% | |||||||
| Excl. FX | 5.7% | 12.0% | 8.8% | 11.1% | 9.6% | 13.7% | 10.7% | 3.2% | 10.1% | 6.6% | 8.1% | 7.1% | 10.5% | 8.0% |
STORE NETWORK
| Number of Stores | Openings | Closings | |||||
|---|---|---|---|---|---|---|---|
| 2020 | Q1 21 | Q2 21 | Q3 21 | Q4 21 | 2021 | 2021 | |
| Biedronka * | 3,115 | 21 | 32 | 22 | 89 | 29 | 3,250 |
| Hebe | 266 | 2 | 5 | 11 | 7 | 0 | 291 |
| Pingo Doce | 453 | 2 | 1 | 3 | 8 | 2 | 465 |
| Recheio | 42 | 0 | 0 | 0 | 0 | 0 | 42 |
| Ara | 663 | 26 | 15 | 23 | 93 | 1 | 819 |
* Excluding 14 Micro Fulfillment Centres (MFC) to supply Biek's operation (ultra-fast delivery)
| Sales Area (sqm) | 2020 | Openings | Closings/ Remodellings |
2021 | |||
|---|---|---|---|---|---|---|---|
| Q1 21 | Q2 21 | Q3 21 | Q4 21 | 2021 | |||
| Biedronka * | 2,120,337 | 15,233 | 22,566 | 14,993 | 61,819 | -6,615 | 2,241,562 |
| Hebe | 69,338 | 515 | 1,184 | 2,694 | 1,599 | 166 | 75,164 |
| Pingo Doce | 523,136 | 1,450 | 125 | 1,279 | 8,280 | -1,577 | 535,847 |
| Recheio | 133,928 | 0 | 0 | 0 | 0 | -393 | 134,321 |
| Ara | 223,818 | 8,470 | 5,260 | 8,571 | 32,709 | 281 | 278,547 |
* Excluding the selling area related to Micro Fulfillment Centres (MFC) to supply Biek's operation (ultra-fast delivery)
Notes
Like For Like (LFL) sales: sales made by stores and e-commerce platforms that operated under the same conditions in the two periods. Excludes stores opened or closed in one of the two periods. Sales of stores that underwent profound remodelling are excluded for the remodelling period (store closure).