Jeronimo Martins — Interim / Quarterly Report 2012

May 22, 2012

Título

1 ST QUARTER CONSOLIDATED REPORT 2012

Non Audited

I – Consolidated Management Report

Message from the CEO – Pedro Soares dos Santos	3
1. Introduction	3
2. Sales Analysis	3
3. Results Analysis	5
4. Balance Sheet	6
5. Outlook 2012	7

II – Consolidated Management Report Appendix

1. Sales Growth	8
2. Store Network	8
3. EBITDA Margin Breakdown	8
4. Madeira - Reclassification	9
5. Definitions	9
6. Information Regarding Individual Financial Statements	9

III – Consolidated Financial Statements

1. Financial Statements	11
2. Notes to the Consolidated Financial Statements	15

I. CONSOLIDATED MANAGEMENT REPORT

Message from the CEO – Pedro Soares dos Santos

'Biedronka, our main priority, continues to execute its investment plan which is essential for the Company's leadership in the Polish market.

The implementation capability demonstrated consistently by the management team reinforces our confidence that this will be another year of strong growth for Biedronka.

For the Portuguese economy, we anticipate 2012 being a very tough year. To protect the sustainability of our supply chain in fresh food, and to protect our medium and long term competitiveness and differentiation, we took the decision to accelerate payments to around half of our fresh products suppliers.

The strong performance in Poland confirms the Group's positive outlook regarding the growth in sales and earnings for 2012.'

1. Introduction

A solid start to the year with sales growth in all Distribution businesses. Poland marked the first three months of the year with constant currency sales growth of 21.0% and the strong pace of Biedronka's execution, converting the layout in 496 stores and opening 37 new locations.

2. Sales Analysis

(Million Euro)		Q1 12		Q1 11		D %
		% total		% total	Pln	Euro
Biedronka	1,511	61.9%	1,336	59.6%	21.0%	13.1%
Pingo Doce	751	30.8%	730	32.6%		2.9%
Recheio	177	7.3%	170	7.6%		4.0%
Manufacturing	5 0	2.1%	5 1	2.3%		-1.5%
Mkt. Repr. and Rest. Serv.	1 8	0.7%	1 9	0.8%		-1.8%
Consolidation Adjustments	-67	-2.7%	-64	-2.9%		4.7%
Total JM	2,440	100.0%	2,242	100.0%		8.8%
p.m. Pingo Doce (store sales)	690		676			2.1%

Net Sales and Services

Consolidated sales reached Euro 2,440m, 8.8% (+13.6% at a constant exchange rate) higher than in the first three months of the previous year, as a result of the like-for-like (LFL) sales growth 5.3% for the Group and the contribution from new stores. Although the zloty has strengthened since 4 th Quarter of 2011, compared to 1 st Quarter of 2011 it still had the translation of the sales value of Euro 106m.

Note: The numbers reported on Pingo Doce and Recheio now include the respective operations of Madeira Island – restatement in the Appendix.

In Poland, food consumption remains healthy. The 1 st Quarter, Biedronka's sales increased by 21.0% in local currency, as a result of the 9.5% increase in LFL sales and also from the increase in the number of stores.

Biedronka is in the middle of implementing a very ambitious plan to change its store layout at the rate of 40-45 stores per week. 680 stores have already been converted and their performance is well in line with our expectations.

Biedronka also opened 37 new locations in the quarter and is preparing its tenth region and two new distribution centres.

In Portugal we are seeing that consumers continue to be very sensitive to price, with a drop in the average ticket and the sales mix reflecting their preference for cheaper articles.

Pingo Doce posted a 2.1% increase in sales, with a contribution from 7 more stores than the previous year and a LFL performance of -0.8% excluding fuel. The Company's negative LFL performance reflects the reduction in the average ticket only partly compensated by a small increase in the number visits. Private brand sales increased by 7.6%, significantly above the average for the Company.

Maintaining the competitiveness of its value proposition, based on a strong perception of the quality of the brand, Pingo Doce is well prepared to meet the needs of increasingly price-sensitive consumers.

Recheio's sales were up by 4.0%, as a result of a 2.6% increase in LFL sales and the contribution from a new food service platform. Within the two channels in which the Company operates - Traditional and HoReCa – it benefitted from its strong competitive position. We noted, however, that through the quarter the HoReCa channel has weakened after the VAT increase that took place in January 2012.

In Manufacturing, Marketing, Representations and Restaurant Services, which represent less than 3% of Group's sales, market conditions remained very challenging and sales in the quarter decreased by 1.6%.

3. Results Analysis

(Million Euro)	Q1 12		Q1 11	(*)	D
Consolidated Sales	2,440		2,242		8.8%
Total Margin	552	22.6%	501	22.3%	10.1%
Operating Costs	-400	-16.4%	-362	-16.1%	10.5%
EBITDA	152	6.2%	139	6.2%	9.2%
Depreciation	-56	-2.3%	-52	-2.3%	8.2%
EBIT	9 6	3.9%	8 7	3.9%	9.9%
Financial Results	-5	-0.2%	-8	-0.4%	-35.5%
Non Recurrent Items	-1	0.0%	-5	-0.2%	-
EBT	8 9	3.7%	7 4	3.3%	20.7%
Taxes	-19	-0.8%	-16	-0.7%	24.4%
Net Profit	7 0	2.9%	5 8	2.6%	19.8%
Non Controlling Interest	-2	-0.1%	-2	-0.1%	-8.6%
Net Profit attr. to JM	6 8	2.8%	5 6	2.5%	20.8%
EPS (€)	0.11		0.09		20.8%
Cash Flow per share (€)	0.21		0.19		8.7%

(*) Restated – see note 2 Chapter III

Operating Profit

Consolidated EBITDA grew by 9.2% (+14.6% at a constant exchange rate) to Euro 152m, and EBITDA margin was 6.2% of sales, in line with the same quarter in previous year. In constant currency EBITDA increased by 14.6%.

In Poland, as expected, Biedronka's EBITDA margin improvement reflected the benefits of the scale of the operation, with sales growth above 20%, and also from a positive product mix compared to the same period last year. EBITDA in Biedronka increased by 29.1% in local currency (+20.7% in Euros).

In Distribution in Portugal, the EBITDA fell by 5.1% to Euro 47m. The decline was due to a significant increase in energy and fuel costs impacting the businesses.

In Manufacturing, EBITDA margin declined reflecting the reinforcement of price positions in key categories, and the increase in the cost of raw materials in some food categories.

Net Result

Net profit attributable to Jerónimo Martins increased by 20.8% to Euro 68m (+17.9% excluding non-recurring items), with Biedronka as the Group's principal growth driver.

4. Balance Sheet

(Million Euro)	Q1 12	2011	Q1 11
Net Goodwill	742	721	744
Net Fixed Assets	2,521	2,411	2,289
Net Working Capital	-1,733 *	-1,542	-1,320
Others	5 0	6 1	7 9
Invested Capital	1,580	1,650	1,792
Total Borrowings	710	702	775
Leasings	3 3	3 8	6 2
Accrued interest	2 5	1 5	2 7
Marketable sec. & Bank deposits	-552	-527	-262
Net Debt	216	228	602
Non Controlling Interests	301	301	290
Share Capital	629	629	629
Reserves and Retained Earnings	433	492	271
Shareholders Funds	1,364 *	1,422	1,190
Gearing	15.9%	16.0%	50.6%

* Affected by Euro 173m of dividends to be paid on April 30 th .

Net consolidated debt reduced from Euro 602m to Euro 216m and gearing was 15.9% (50.6% at the end of March 2011 and 16.0% at the end of December 2011).

Investment Programme

The Group invested Euro 93m in the first three months of 2012, 86% of which was allocated to Poland.

5. Outlook 2012

The start of 2012 confirms Biedronka's capability to execute its ambitious plans and maintain its solid growth momentum. We therefore remain confident of opening c. 250 new stores and completing the roll out of the new layout by October 2012.

In Biedronka we expect to achieve low double-digit LFL sales growth and to increase earnings above sales and further increase the return on invested capital.

In Portugal, the very fragile economic environment is expected to result in weaker consumption. In this scenario, Pingo Doce maintains a strategy to retain its strong position in the market based on three strategic pillars – consumers, employees and suppliers. We will continue to focus on price and quality for our customers and supporting our employees and suppliers in this difficult environment.

In the specific case of its suppliers, and after diagnosing that many Portuguese producers were having difficulties in obtaining access to financing, Pingo Doce decided that, for 12 months starting in May as a temporary initiative, it would reduce its payment terms to 402 suppliers in the agricultural sector to an average of 10 days. This measure, which is essential for the sustainability and stability of the stores' supply chain, is estimated to have an impact on the Company's working capital of between Euro 80m and 100m.

In view of further reductions in households disposal income, Pingo Doce has decided to reinforce its price positioning to strengthen its competitiveness. This strategic decision, starting in Q2, is expected to reverse the negative trend seen in the LFL growth in the first quarter but, for the year, the additional investment in the market may impact Pingo Doce's EBITDA margin.

The capital investment programme for 2012 is forecast to reach c.Euro 650m, c.80% of which will be invested in Poland.

Overall for the Group, and despite the difficulties in Portugal, we are confident that 2012 will be another good year. We expect double-digit consolidated sales growth (at a constant exchange rate) and healthy growth in profitability. With the decision to invest to strengthen our business in Portugal, Group EBITDA margin could be stable or just below the previous year.

Lisbon, 24th April, 2012

The Board of Directors

II. CONSOLIDATED MANAGEMENT REPORT APPENDIX

1. Sales Growth

	Total Sales Growth Q1 12	LFL Sales Growth Q1 12
Biedronka
Euro	13.1%
PLN	21.0%	9.5% *
Pingo Doce	2.1%	-1.6% **
Recheio	4.0%	2.6%
Manufacturing	-1.5%	-1.5%
Mkt. Repr. and Rest. Serv.	-1.8%	-1.7%

* Excluding days of closure for store layout conversion.

** Ex-petrol LFL: -0.8%.

2. Stores Network

Number of Stores	2011	Openings Closings		Network
		Q1 12	Q1 12	Q1 12	Q1 11
Biedronka	1,873	3 7	2	1,908	1,665
Pingo Doce	369	0	0	369	362
Recheio	4 1	0	0	4 1	4 0

Sales Area (sqm)	2011	Openings Q1 12	Closings* Q1 12	Network Q1 12	Q1 11
Biedronka	1,113,192	22,276	-847	1,136,315	964,962 **
Pingo Doce	451,207	0	2,183	449,024	448,191
Recheio	128,975	0	305	128,670	126,907

* Including changes of sales area due to remodellings

**Restated

3. EBITDA Margin Breakdown

(% of sales)	Q1 12	Q1 11
Distribution Poland	7.0%	6.6%
Distribution Portugal	5.4%	5.9%
Manufacturing and Services	7.3%	8.6%

4. Madeira - Reclassification

Considering that the business in Madeira Island is managed under the same strategy and by the Management Team of Pingo Doce (for supermarkets) and Recheio (for the cash&carries) it was decided that from now on, the reported numbers for Madeira will be integrated, respectively, in Pingo Doce and Recheio business areas. Restatement for 2011 presented below.

		2011
Net Sales & Services	Q 1	Q 2	H1	Q 3	9 M	Q 4	2011
Released
Pingo Doce	710	769	1,480	832	2,312	843	3,155
p.m. Store Sales	649	698	1,346	751	2,097	768	2,865
Recheio	163	191	354	215	568	188	756
Madeira	3 5	4 0	7 4	4 4	119	4 4	162
Restated
Pingo Doce	730	791	1,521	856	2,377	867	3,245
p.m. Store Sales	676	728	1,404	784	2,188	802	2,990
Recheio	170	200	370	226	596	198	794

		2011
LFL Sales Growth	Q 1	Q 2	H1	Q 3	9 M	Q 4	2011
Released
Pingo Doce	1.8%	0.1%	0.9%	1.4%	1.1%	0.2%	0.8%
Recheio	0.4%	3.3%	2.0%	1.4%	1.8%	4.2%	2.4%
Madeira	3.7%	5.3%		4.5% 10.2%	6.8%	9.4%	7.6%
Restated
Pingo Doce	1.9%	0.1%	1.0%	1.7%	1.2%	0.6%	1.1%
Recheio	0.5%	3.9%	2.3%	1.8%	2.1%	4.2%	2.6%

EBITDA Margin	H1 11	2011
Released
Pingo Doce	5.4%	6.7%
Recheio	5.8%	6.4%
Madeira	3.1%	4.7%
Restated
Pingo Doce	5.3%	6.6%
Recheio	5.7%	6.3%

5. Definitions

Like For Like (LFL) sales: sales made by stores 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);

Cash Flow per share: (Net Profit + Depreciation – Deferred tax – Non-recurrent items) / Number of Shares;

Gearing: Net Debt / Shareholder Funds.

6. Information Regarding Individual Financial Statements

In accordance with number 3 of article 10 of the Regulation number 5/2008 of the Portuguese Securities Market Commission (CMVM), the 1st Quarter Individual Financial Statements of Jerónimo Martins SGPS, S.A. will not be disclosed as they do not include significant information.

III. CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT BY FUNCTIONS FOR THE QUARTERS ENDED AT 31 MARCH 2012 AND 2011

			Euro thousand
	Notes	2012	2011(*)
Sales and services rendered	3	2,439,935	2,241,568
Cost of sales	4	(1,888,301)	(1,740,668)
Gross profit		551,634	500,900
Distribution costs	5	(406,045)	(369,302)
Administrative costs	5	(49,832)	(44,436)
Exceptional operating profits/losses	8	(1,192)	(5,079)
Operating profit		94,565	82,083
Net financial costs	6	(5,223)	(8,094)
Profit in associated companies		2	6
Profit before taxes		89,344	73,995
Income taxes	7	(19,367)	(15,573)
Profit before non-controlling interests		69,977	58,422
Attributable to:
Non-controlling interests		1,813	1,982
Jerónimo Martins Shareholders		68,164	56,440
Basic and diluted earnings per share- Euros	14	0.1085	0.0898

To be read with the attached notes to the consolidated financial statements

(*) Restated – see note 2

CONSOLIDATED BALANCE SHEET AT 31 MARCH 2012 AND DECEMBER 2011

			Euro thousand
	Notes	2012	2011
Assets
Tangible assets	9	2,400,449	2,300,501
Investment properties	9	52,112	52,128
Intangible assets	9	863,394	830,620
Investments in associated Companies		1,054	1,052
Available-for-sale financial assets	11	6,163	6,157
Trade debtors and deferred costs		85,898	85,407
Derivative financial instruments	10	18	10
Deferred tax assets		60,226	57,957
Total non-current assets		3,469,314	3,333,832
Inventories		428,628	388,262
Taxes receivable		19,018	33,834
Trade debtors, accrued income and deferred costs		230,396	195,200
Cash and cash equivalents	12	555,059	530,155
Total current assets		1,233,101	1,147,451
Total assets		4,702,415	4,481,283
Shareholders' equity and liabilities
Share capital		629,293	629,293
Share premium		22,452	22,452
Own shares		(6,060)	(6,060)
Fair value and other reserves	13,1	44,913	(1,162)
Retained earnings		371,683	476,338
		1,062,281	1,120,861
Non-controlling interests		301,342	300,824
Total Shareholders' equity		1,363,623	1,421,685
Borrowings	15	382,679	385,553
Trade creditors, accrued costs and deferred income		24	-
Derivative financial instruments	10	10,638	8,785
Employee benefits		34,343	33,954
Deferred profits- state grants		904	910
Provisions for risks and contingencies	16	50,641	49,597
Deferred tax liabilities		109,089	105,155
Total non-current liabilities		588,318	583,954
Trade creditors, accrued costs and deferred income		2,259,689	2,006,336
Derivative financial instruments	10	10,162	4,038
Borrowings	15	360,615	354,672
Taxes payable		119,983	110,543
Deferred profits- state grants		25	55
Total current liabilities		2,750,474	2,475,644
Total Shareholders' equity and liabilities		4,702,415	4,481,283

To be read with the attached notes to the consolidated financial statements

JERÓNIMO MARTINS, SGPS, S.A.

CONSOLIDATED STATEMENT OF GAINS AND LOSSES RECOGNISED IN EQUITY

		Euro thousand
	March 2012	March 2011
Currency translation differences	50,641	(5,530)
Fair value of cash flow hedging	383	6,213
Fair value of hedging instruments on foreign operations	(4,911)	-
Fair value of available-for-sale financial assets	6	(12)
Gains/losses directly recognised in equity	46,119	671
Net profit	69,977	58,422
Total gains/losses recognised in 1st Quarter	116,096	59,093
Attributable to:
Non-controlling interests	1,857	4,069
Jerónimo Martins Shareholders	114,239	55,024

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

									Euro thousand
						Shareholders' equity attributable to Shareholders of Jerónimo Martins, SGPS, S.A.
	Notes	Share Capital	Share Premium	Own Shares	Fair value and other reserves	Retained Earnings	Total	Non controlling Interests	Shareholders' Equity
Balance Sheet at 31 December 2010		629,293	22,452	(6,060)	63,433	135,988	845,106	286,706	1,131,812
Equity changes in 2011
Currency translation differences in the st Quarter of 2011 1	13.1				(5,530)		(5,530)		(5,530)
Fair value of cash flow hedging	13.1				4,126		4,126	2,087	6,213
Fair value of available-for-sale financial assets	13.1				(12)		(12)		(12)
Gains/losses directly recognised in equity		-	-	-	(1,416)	-	(1,416)	2,087	671
Net profit in 1st Quarter of 2011		-	-	-	-	56,440	56,440	1,982	58,422
Total gains/losses recognised during		-	-	-	(1,416)	56,440	55,024	4,069	59,093
the year Dividends								(375)	(375)
Non-controlling interests acquisition						(84)	(84)	(257)	(341)
Balance Sheet at 31 March 2011		629,293	22,452	(6,060)	62,017	192,344	900,046	290,143	1,190,189

Balance Sheet at 31 December 2011		629,293	22,452	(6,060)	(1,162)	476,338	1,120,861	300,824	1,421,685
Equity changes in 2012
Currency translation differences in the st Quarter of 2012 1	13.1				50,641		50,641		50,641
Fair value of cash flow hedging	13.1				339		339	44	383
Fair value of hedging instruments on foreign operations	13.1				(4,911)		(4,911)		(4,911)
Fair value of available-for-sale financial assets	13.1				6		6		6
Gains/losses directly recognised in equity		-	-	-	46,075	-	46,075	44	46,119
Net profit in 1st Quarter of 2012		-	-	-	-	68,164	68,164	1,813	69,977
Total gains/losses recognised during the year		-	-	-	46,075	68,164	114,239	1,857	116,096
Dividends	13.2					(172,819)	(172,819)	(1,339)	(174,158)
Balance Sheet at 31 March 2012		629,293	22,452	(6,060)	44,913	371,683	1,062,281	301,342	1,363,623

To be read with the attached notes to the consolidated financial statements

CONSOLIDATED CASH FLOW STATEMENT FOR THE QUARTERS ENDED AT 31 MARCH 2011 AND 2011

			Euro thousand
	Notes	2012	2011(*)
Operating Activities
Cash generated from operations		132,330	76,153
Interest paid		(7,019)	(8,344)
Income taxes paid		(8,884)	(12,970)
Cash Flow from operating activities		116,427	54,839
Cash flow from investment activities		(109,415)	(85,273)
Cash Flow from financing activities		(1,227)	(7,836)
Net changes in cash and cash equivalents		5,785	(38,270)
Cash and cash equivalents changes
st Quarter Cash and cash equivalents at the beginning of 1		530,155	303,927
Net changes in cash and cash equivalents		5,785	(38,270)
Effect of currency translation differences		19,119	(1,161)
st Quarter Cash and cash equivalents at the end of 1	12	555,059	264,496

To be read with the attached notes to the consolidated financial statements (*) Restated – see note 2

2	Accounting policies 16
3	Segment reporting 17
4	Cost of sales18
5	Distribution and administrative costs 18
6	Net financial costs 18
7	Income tax recognised in the income statement19
8	Exceptional operating profits/losses19
9	Fixed assets and investment property 19
10	Derivative financial instruments 20
11	Available-for-sale financial assets 20
12	Cash and cash equivalents 20
13	Capital and reserves 20
14	Basic and diluted earnings per share 21
15	Borrowings 21
16	Provisions and adjustments to the net realisable value22
17	Contingencies 22
18	Related parties22
19	Events after the balance sheet date23

1 Activity

Jerónimo Martins, SGPS, S.A. (JMH), is the parent Company of Jerónimo Martins Group (Group) and has its head office in Lisbon.

Jerónimo Martins Group is devoted to the production, distribution and sale of food and other fast moving consumer goods products. The Group operates in Portugal and Poland.

Head Office: Rua Tierno Galvan, Torre 3, 9º, J- 1099-008 Lisbon

Share Capital: 629,293,220 euros

Registered at the Commercial Registry Office of Lisbon and Tax Number: 500 100 144

JMH has been listed on Euronext Lisbon (ex-Lisbon and Porto Stock Exchange) since 1989.

The Board of Directors approved these consolidated financial statements on 24th April 2012.

2 Accounting policies

All amounts are shown in thousand euros (EUR thousand) unless otherwise stated.

The JMH consolidated financial statements were prepared in accordance with the interim financial reporting standard (IAS 34), and all other International Financial Reporting Standards (IFRS) issued by International Accounting Standards Board (IASB) and with the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) as adopted by the European Union.

The consolidated financial statements were prepared in accordance with the same standards and accounting policies adopted by the Group for the annual financial statements, including mainly an explanation of the events and relevant changes for the understanding of variations in the financial position and Group performance since the last annual report. Thus, some of the notes from the 2011 annual report are omitted because no changes occurred or are not materially relevant for the understanding of the interim financial statements.

In relation to 2011, IASB issued amendments to IFRS 1 - First-time Adoption of International Financial Reporting Standards. The changes are related to the form of classification of loans received from governments, and their application is mandatory for financial years beginning on or after January 1, 2013, having no material impact on the Group's Financial Statements.

Changes in Basis for Preparation (Reclassifications)

Over the past years, with the development observed in the Polish market's operations, the Management has established long-term relationships with its suppliers, namely through the negotiation of prices, volumes, packages and payment terms.

In this sense it has agreed with the majority of its suppliers, to extend payment terms, bearing in compensation financial expenses, thereby obtaining greater flexibility in the management of its working capital.

These financial expenses have, until now, been classified in the Net financial costs line. However, this value has been gaining relevance with the growth of Biedronka's operations and as the management considers this expense is dependent on the evolution of its activity, the Group decided to classify this amount as cost of sales which therefore impact the total margin.

In order to have comparable financial information, we have restated the financial statements of the previous year, as shown below:

	March 2011
	Released	Reclassification	Restated
Sales and services rendered	2,241,568	-	2,241,568
Cost of sales	(1,733,188)	(7,480)	(1,740,668)
Gross profit	508,380	(7,480)	500,900
Distribution costs	(369,302)	-	(369,302)
Administrative costs	(44,436)	-	(44,436)
Exceptional operating profits/losses	(5,079)	-	(5,079)
Operating profit	89,563	(7,480)	82,083
Net financial costs	(15,574)	7,480	(8,094)
Gains/Losses in associated companies	6	-	6
Profit before taxes	73,995	-	73,995

2.1. Transactions in foreign currencies

Transactions in foreign currencies are translated into Euros at the exchange rate prevailing on the transaction date.

On the balance sheet date, monetary assets and liabilities expressed in foreign currencies are translated at the exchange rate prevailing on that date, and exchange differences arising from this conversion are recognised in the income statement. When qualifying as hedges on investments in foreign subsidiaries the exchange differences are deferred in equity.

The main exchange rates applied on the balance sheet date are those listed below:

Euro foreign exchange reference rates (foreign exchange units per 1 Euro)	Rate on 31 March 2012	Average rate for the year
Polish Zloty (PLN)	4.1522	4.2233
US Dollar (USD)	1.3337	-
Swiss Franc (CHF)	1.2045	-
Colombian Peso (COP)	2,383.5900	2,358.2600

3 Segment reporting

Management monitors the performance of the business based on a geographical and business nature. Due to the fact that the business units in the distribution area in Portugal share a set of competences, the Group analyses, on a quarterly basis, its segments in an aggregate performance perspective. In addition, the Group also separates the distribution business unit in Poland. Apart from these, there are also other businesses, but due to their minor materiality they are not reported separately.

Business segments:

• Portugal Distribution: comprises the business unit of JMR (Pingo Doce supermarkets), the wholesale business unit Recheio(*);
• Poland Distribution: the business unit using the brand Biedronka;
• Others, eliminations and adjustments: includes i) the business units with minor materiality (Unilever Jerónimo Martins, Gallo Worldwide, Marketing Services and Representations, Restaurants, pharmacies and drugstores in Poland), ii) the Holding companies and iii) the Group's consolidation adjustments.

(*) In 2012 Madeira business unit (Pingo Doce supermarkets and Recheio Cash & Carry) was integrated, respectively, in JMR and Recheio business areas.

Management evaluates the performance of segments based on the Earnings Before Interest and Taxes (EBIT). This indicator excludes the effects of non-recurrent results.

Detailed information by segment at March 2012 and 2011

	Portugal Distribution		Poland Distribution		Others, eliminations and adjustments		Total JM consolidated
	2012	2011	2012	2011(*)	2012	2011	2012	2011(*)
Net Sales and Services	868,368		847,163 1,510,755	1,336,116	60,812			58,289 2,439,935 2,241,568
Inter-segments	79	38	180	152	(200)	(89)	59	101
External Customers	868,289	847,125	1,510,575	1,335,964	61,012	58,378		2,439,876 2,241,467
Operational Cash-Flow (EBITDA)	47,005	49,548	106,007	87,810	(977)	1,812	152,035	139,170
Depreciations and Amortisations	(28,197)	(26,645)	(26,654)	(24,090)	(1,428)	(1,273)	(56,279)	(52,008)
Operational Result (EBIT)	18,809	22,903	79,352	63,720	(2,404)	539	95,757	87,162
Financial Results	-	-	-	-	-	-	(5,221)	(8,088)
Net Result Attributable to JM	-	-	-	-	-	-	68,164	56,440
TOTAL ASSETS (1)		2,207,138 2,245,558	2,107,197	1,864,433	388,080		371,292 4,702,415 4,481,283
TOTAL LIABILITIES (1)		1,530,843 1,555,736	1,353,090	1,215,220	454,859		288,642 3,338,792 3,059,598
Investments in Fixed Assets	10,516	7,921	79,328	41,102	169	347	90,013	49,370

(1) The comparable amounts of total assets and liabilities are reported to 31 December 2011

(*) Restated – see note 2

Reconciliation between EBIT and the operational result of the income statement by functions

	March 2012	March 2011
EBIT	95,757	87,162
Non recurrent results	(1,192)	(5,079)
Operational Result	94,565	82,083

Information by geographical segments at March 2012 and 2011

	Net sales and services
	2012	2011
Portugal	923,699	903,274
Poland	1,516,236	1,338,294
Total	2,439,935	2,241,568

4 Cost of sales

	March 2012	March 2011
Net cost of products sold	1,883,349	1,736,873
Net cash discount and interest paid to suppliers	(182)	(1,421)
Electronic payment commissions	3,968	3,974
Other supplementary costs	1,166	1,242
	1,888,301	1,740,668

5 Distribution and administrative costs

	March 2012	March 2011
Supplies and services	96,643	87,264
Advertising costs	17,660	16,410
Rents	56,643	50,244
Staff costs	193,242	175,621
Depreciations, amortisations and assets profit/loss	55,567	51,477
Transportation costs	33,476	29,827
Other operational profit/loss	2,646	2,895
	455,877	413,738

6 Net financial costs

	March 2012	March 2011(*)
Interest expense	(8,010)	(8,358)
Interest received	2,898	1,786
Net foreign exchange	1,429	(282)
Other financial costs and gains	(1,538)	(1,243)
Fair value of financial investments held for trade:
Derivative instruments	(2)	3
	(5,223)	(8,094)

(*) Restated

The interest expense heading includes the interests regarding loans measured at amortized cost, as well as interest on fair value and cash flow hedging instruments (note 10).

As explained in note 2, financial expenses related to the extension of payment terms from suppliers in the retail segment of Poland were restated to cost of sales.

Other financial costs and gains include costs with debt issued by the Group.

7 Income tax recognised in the income statement

	March 2012	March 2011
Current income tax
Current tax of the year	(16,987)	(11,588)
Adjustment to prior year estimate	(49)	(49)
	(17,036)	(11,637)
Deferred tax
Temporary differences created and reversed	(2,592)	(3,936)
Change to the recoverable amount of tax losses and temporary differences from previous years	261	-
	(2,331)	(3,936)
Total income taxes	(19,367)	(15,573)

8 Exceptional operating profits/losses

	March 2012	March 2011
Costs related with restructuring plans	(624)	-
Impairment of assets	(439)	-
Compensation related to termination of lease agreements	-	(5,000)
Others	(129)	(79)
	(1,192)	(5,079)

9 Fixed assets and investment property

	Tangible assets	Investment property	Intangible assets	Total
Net value at 31 December 2011	2,300,501	52,128	830,620	3,183,249
Foreign exchange differences	72,326	-	27,991	100,317
Increases	82,693	-	7,320	90,013
Disposals and write-offs	(874)	-	(26)	(900)
Transfers	(132)	-	136	4
Depreciation and impairment losses	(54,065)	-	(2,647)	(56,712)
Fair value changes	-	(16)	-	(16)
Net value at 31 March 2012	2,400,449	52,112	863,394	3,315,955

As a consequence of the currency translation adjustment of the assets in the Group's businesses in Poland:

• the Goodwill related to Poland business (Biedronka), totalling PLN 1,282,278 thousand, was updated positively by EUR 21,184 thousand;
• the Goodwill related to Poland Pharmacies business (Bliska), totalling PLN 38,796 thousand, was updated positively by EUR 641 thousand.

No valuations were made on the land allocated to operational activities, which are recognised at their market value.

From the disposals and write-offs made in the 1st Quarter 2012, an amount of EUR 439 thousand was recognised as a loss in the profit and loss.

10 Derivative financial instruments

				March 2012				December 2011
	Notional		Assets	Liabilities		Notional		Assets	Liabilities
		Current	Non current	Current	Non current		Current	Non current	Current	Non current
Derivatives held for trading
Interest rate swap	10 millions EUR	-	-	-	327	10 millions EUR	-	-	-	324
Fair value hedging derivatives
USD loan hedging	96 millions USD	-	-	-	2,053	96 millions USD	-	-	-	680
Cash flow hedging derivatives
Interest rate swap (EUR)	438.5 millions EUR	-	-	3,614	8,167	440 millions EUR	-	-	4,038	7,629
Interest rate swap (PLN)	189 millions PLN	-	18	-	91	189 millions PLN	-	10	-	152
Investments in foreign entities hedging derivatives
Interest rate swap (PLN)	1000 millions PLN	-	-	6,548	-		-	-	-	-
Total derivatives held for trading		-	-	-	327		-	-	-	324
Total hedging derivatives		-	18	10,162	10,311		-	10	4,038	8,461
Total assets/liabilities derivatives		-	18	10,162	10,638		-	10	4,038	8,785

In March 2012 the values shown include interest receivable or payable related with these financial instruments that are due. The net payable amount is EUR 2,044 thousand.

11 Available-for-sale financial assets

Regarding the financial assets available-for-sale, the increase of EUR 6 thousand relates to changes in the fair value of listed equity holdings, at the reporting date of these financial statements.

12 Cash and cash equivalents

	March 2012	December 2011
Bank deposits	375,889	340,517
Short-term investments	176,187	186,597
Cash and cash equivalents	2,983	3,041
	555,059	530,155

13 Capital and reserves

13.1 Fair value and other reserves

	Land revaluation reserves	Cash-flow Hedging	Available for-sale financial assets	Currency translation reserve	Total
Balance as at 1 January 2012	90,399	(5,114)	(1,313)	(85,134)	(1,162)
Fair value adjustment of financial investments: - Gross value - Deferred tax - Non-controlling interests		488 (105) (44)		(6,548) 1,637	(6,060) 1,532 (44)
Fair value adjustment of available-for-sale financial instruments: - Gross value			6		6
Currency translation differences:
- In the year - Deferred tax	2,288 (435)	(182) 35		49,426 (491)	51,532 (891)
Balance as at 31 March 2012	92,252	(4,922)	(1,307)	(41,110)	44,913
	Land	Cash-flow	Available-	Currency	Total

	revaluation reserves	Hedging	for-sale financial assets	translation reserve
Balance as at 1 January 2011	83,116	(6,781)	(455)	(12,447)	63,433
Fair value adjustment of financial investments: - Gross value - Deferred tax - Non-controlling interests		8,356 (2,143) (2,087)			8,356 (2,143) (2,087)
Fair value adjustment of available-for-sale financial instruments: - Gross value			(12)		(12)
Currency translation differences:
- In the year - Deferred tax	(219) 42	25 (5)		(5,783) 410	(5,977) 447
Balance as at 31 March 2011	82,939	(2,635)	(467)	(17,820)	62,017

13.2 Dividends

Dividends distributed in 2012 in the amount of EUR 174,158 thousand, of which EUR 1,339 thousand were paid to non-controlling interests in the Group companies.

On March 30th 2012, the amount of EUR 172,819 thousand was approved in the Shareholders Meeting and, will be distributed to shareholders on April 30th 2012. These liabilities are included in the heading trade creditors, accrued costs and deferred income.

14 Basic and diluted earnings per share

	March 2012	March 2011
Ordinary shares issued at the beginning of the year	629,293,220	629,293,220
Own shares at the beginning of the year	859,000	859,000
Shares issued during the year	-	-
Weighted average number of ordinary shares	628,434,220	628,434,220
Diluted net result attributable to ordinary shares	68,164	56,440
Basic and diluted earnings per share – Euros	0.1085	0.0898

15 Borrowings

15.1 Current and non-current loans

	March 2012	December 2011
Non-current loans
Bank loans	86,125	83,647
Bond loans	282,858	284,798
Financial lease liabilities	13,696	17,108
	382,679	385,553
Current loans
Bank overdrafts	13,782	8,085
Bank loans	92,666	90,468
Bond loans	235,000	235,000
Financial lease liabilities	19,167	21,119
	360,615	354,672

15.2 Financial debt

The net consolidated financial debt at the balance sheet date is as follows:

	March 2011	December 2011
Non-current loans (note 15.1)	382,679	385,553
Current loans (note 15.1)	360,615	354,672
Derivative financial instruments (note 10)	20,782	12,813
Interest on accruals and deferrals	4,330	1,791
Bank deposits (note 12)	(375,889)	(340,517)
Short-term investments (note 12)	(176,187)	(186,597)
	216,330	227,715

16 Provisions and adjustments to the net realisable value

	Opening balance	Set up and reinforced	Unused and reversed	Foreign exchange difference	Used	Closing balance
Doubtful debtors	22,932	553	(284)	233	(282)	23,152
Inventories	14,735	202	(4,176)	515	-	11,276
Available-for-sale fin. investments	3,429	-	(6)	-	-	3,423
Short terms investments	57	-	-	-	-	57
Total fair value adjustments	41,153	755	(4,466)	748	(282)	37,908
Employee benefits	33,954	853	-	-	(464)	34,343
Provisions for risks and contingencies	49,597	827	(17)	417	(183)	50,641
Total of provisions	83,551	1,680	(17)	417	(647)	84,984

17 Contingencies

Following the contingencies mentioned in the 2011 Annual Report, changes occurred on the headings as follows:

• a) In 1999, as a result of the acquisition of two companies that held establishments previously owned by former franchisees of ITMI Norte-Sul Portugal – Sociedade de Desenvolvimento e Investimento, S.A., which together with Regional de Mercadorias – Sociedade Central de Aprovisionamento, S.A., filed a case against various Group companies, holding them liable for those ex-franchisees' alleged non-compliance with the contract they had signed with ITMI, demanding an indemnity payment of EUR 14,600 thousand. The court ruled in favour of the defendants, denying the plaintiff's claim. The plaintiff appealed to the Court of Appeal, which confirmed the ruling of the court. Meanwhile the plaintiff filed an appeal to the Supreme Court of Justice, which is still pending. The Board of Directors maintains its belief that the amount requested will probably not be granted;
• l) The Tax Authorities assessed JMR Gestão de Empresas de Retalho, SGPS, S.A. for the amount of EUR 16,078 thousand due to the fact that JMR should restate the dividends received, in 2003 and 2004, from its subsidiary in the Madeira Free Zone, considering them as interest for tax purposes. According to the Portuguese Tax Authorities the said income should be subject to Corporate Income Tax in opposition to the dividends received that are exempt. JMR's Management, supported by their tax consultants and legal advisors, consider that the report issued by the Tax Authorities does not have any legal basis or validity, and will use all the resources at its disposal to challenge it. The judicial, as well as the appeal, claims presented were ruled in favour of the Portuguese tax authorities, JMR's Management, supported by its lawyers and tax advisors' opinion, still believe that those decisions are not valid nor have any legal grounds and has challenged and opposed the ruling.

18 Related parties

56.13% of the Group is owned by the Sociedade Francisco Manuel dos Santos and no transactions occurred between this Company and any company of the Group in the 1st Quarter of 2012, neither were there any amounts payable or receivable between them on March 31st, 2012.

Balances and transactions of Group companies with related parties are as follows:

		Sales and services rendered		Stocks purchased and services supplied
	March 2012	March 2011	March 2012	March 2011
Joint-Ventures	107	196	17,394	18,216
Associated companies	-	-	106	161
		Trade debtors, accrued income and deferred costs	Trade creditors, accrued income and deferred costs
	March 2012	December 2011	March 2012	December 2011
Joint-Ventures	155	372	12,407	6,642
Associated companies	-	-	376	505

Balances and transactions with related parties not eliminated in the consolidation process, were as follows:

		Sales and services rendered		Stocks purchased and services supplied
	March 2012	March 2011	March 2012	March 2011
Joint-Ventures	59	101	9,567	10,019
Associated companies	-	-	106	161
	Trade debtors, accrued income and deferred costs			Trade creditors, accrued income and deferred costs
	March 2012	December 2011	March 2012	December 2011
Joint-Ventures	85	205	6,824	3,653
Associated companies	-	-	376	505

All the transactions with the jointly controlled companies (joint ventures) and associate companies were made under normal market conditions, i.e., the transaction value corresponds to prices that would be applicable between non related parties.

Outstanding balances between Group companies and related parties, being a result of a trade agreement, are settled in cash, and are subject to the same payment terms as those applicable to other agreements celebrated between Group companies and their suppliers.

The amounts receivable are not covered by insurance and no guarantees are given or received, as the Group holds a relevant influence over these companies.

There are no provisions for doubtful debts and no costs were recognised during the year related with bad debts or doubtful debts with these related parties.

19 Events after the balance sheet date

At the conclusion of this Report there were no relevant events to highlight that are not disclosed in the Financial Statements.

Lisbon, 24th April, 2012

The Certified Accountant The Board of directors