Jeronimo Martins — Interim / Quarterly Report 2014

Aug 19, 2014

INDEX

I – Consolidated Management Report

Message from the Chairman and CEO - Pedro Soares dos Santos	3
1. Sales Analysis	3
2. Results Analysis	4
3. Balance Sheet	5
4. Outlook for 2014	5

II – Consolidated Management Report Appendix

1. Sales Evolution	6
2. Stores Network	6
3. EBITDA Margin Breakdown	6
4. Financial Costs Breakdown	6
5. Working Capital	7
6. Net Debt	7
7. Definitions	7
8. Information Regarding Individual Financial Statements	7
III – Other Information	8
IV – Statement of the Board of Directors	10

V – Consolidated Financial Statements

	1. Financial Statements	12
	2. Notes to the Financial Statements	16
	3. Auditor's Report	28

I. CONSOLIDATED MANAGEMENT REPORT

Message from the Chairman and CEO – Pedro Soares dos Santos

'The performance of Biedronka in the first half of the year was below my expectations and impacted the Group's profits.

We have taken steps within the Company in order to regain like-for-like sales momentum and take full advantage of our present strong market leadership position for the future. Although these actions will impact the current year's earnings, I remain fully confident of the competitive strength and growth potential of Biedronka.

In Portugal, Pingo Doce had a good performance in the half year, growing well above the market.

I am particularly satisfied with the recent development of Ara, our Colombian operation.'

1. Sales Analysis

(Million Euro)		H1 14		H1 13				Q2 14		Q2 13		
		% total		% total	Pln	Euro		% total		% total	Pln	Euro
Biedronka	4,029	66.6%	3,693	65.4%	9.1%	9.1%	2,076	66.1%	1,848	64.4%	11.5%	12.3%
Pingo Doce (store sales)	1,556	25.7%	1,516	26.9%		2.6%	812	25.9%	789	27.5%		2.9%
Recheio	374	6.2%	375	6.6%		0.3%	201	6.4%	202	7.0%		-0.4%
Mkt. Repr. and Rest. Serv.	36	0.6%	37	0.7%		2.2%	19	0.6%	18	0.6%		0.9%
Others & Cons. Adjustments	57	0.9%	22	0.4%		n.a.	31	1.0%	13	0.5%		n.a.
Total JM	6,052	100%	5,643	100%		7.2%	3,139	100%	2,871	100%		9.3%

Consolidated sales reached EUR 6,052 million, a growth of 7.2% on the first half of the previous year.

In both Poland and Portugal there has been a significant decline in food prices during the first six months of the year. Poland registered food inflation of 0.5% and in Portugal deflation was -1.0%. In the second quarter food deflation was -0.5% and -1.9% respectively.

In Poland, the food retail environment has remained highly competitive with strong promotional activities by all main players in the market.

In the six months Biedronka like-for-like (LFL) was -1.2%, impacted by negative basket inflation. In the second quarter of the year, LFL sales grew by 0.3%, with the positive calendar Easter effect being offset by deflation in the basket.

Biedronka's total sales in H1 grew by 9.1% to EUR 4,029 million (+12.3% in Q2) and the Company continued to gain market share, reinforcing its leading position in the Polish market.

The stores expansion advanced as planned and 92 new stores were opened in the six months. In mid June we started to roll-out the acceptance of card payments in the stores. At the end of June 1,400 stores were accepting this payment method.

In Portugal, the food retail sector remained strongly promotion-driven and Pingo Doce continued to offer immediate savings through weekly promotional campaigns. Despite a strong increase of deflation, LFL sales (excluding fuel) increased by 2.7% in Q2 and by +2.4% in H1.

Pingo Doce reinforced its market share with sales growing by 2.6% (excluding fuel, sales increased by 3.1%) to reach EUR 1,556 million. Three new stores were opened in the first six months.

Recheio's sales were in line with the same period last year, which is a solid performance in a depressed market environment for both Retail and HoReCa segments, and with the increase of deflation in the second quarter.

The new businesses of Ara and Hebe generated sales of EUR 63 million in the first half of the year. Sales in the Ara stores are performing above plan with a strong growth of the number of clients.

(Million Euro)		H1 14		H1 13			Q2 14		Q2 13	
Net Sales and Services	6,052		5,643		7.2%	3,139		2,871		9.3%
Total Margin	1,286	21.2%	1,207	21.4%	6.6%	663	21.1%	612	21.3%	8.4%
Operating Costs		-945 -15.6%		-857 -15.2%	10.2%		-480 -15.3%		-429 -14.9%	11.9%
EBITDA	341	5.6%	350	6.2%	-2.3%	183	5.8%	183	6.4%	0.3%
Depreciation	-135	-2.2%	-122	-2.2%	10.7%	-68	-2.2%	-61	-2.1%	10.8%
EBIT	207	3.4%	228	4.0%	-9.3%	115	3.7%	121	4.2%	-5.1%
Financial Results	-18	-0.3%	-20	-0.4%	-12.9%	-9	-0.3%	-10	-0.3%	-7.0%
Profit in Associated Companies	8	0.1%	6	0.1%	43.1%	5	0.2%	3	0.1%	56.8%
Non-Recurrent Items	0	0.0%	1	0.0%	n.a.	0	0.0%	2	0.1%	n.a.
EBT	196	3.2%	214	3.8%	-8.1%	111	3.5%	116	4.0%	-4.6%
Taxes	-44	-0.7%	-45	-0.8%	-0.6%	-24	-0.8%	-24	-0.9%	0.0%
Net Profit	152	2.5%	169	3.0%	-10.1%	8 6	2.8%	9 2	3.2%	-5.9%
Non Controlling Interests	-7	-0.1%	-4	-0.1%	n.a.	-4	-0.1%	-2	-0.1%	n.a.
Net Profit attributable to JM	145	2.4%	165	2.9%	-12.4%	8 3	2.6%	9 0	3.1%	-8.4%
EPS (€)	0.23		0.26		-12.4%	0.13		0.14		-8.4%

2. Results Analysis

Operating Profit

Consolidated EBITDA declined 2.3% to EUR 341 million. The EBITDA margin was 5.6%, 60bps below the previous year, impacted by strong basket deflation in both Poland and Portugal, the price investments in all food distribution businesses, and EUR 6 million of incremental start-up costs in Ara and Hebe.

Biedronka's EBITDA margin declined by 80bps to 7.0%, impacted by price investments, a weak LFL sales performance, and the effect of deflation.

Pingo Doce's EBITDA margin at 4.9% was in line with previous year, with strong volume growth compensating the impact of food deflation.

Recheio's EBITDA margin declined 50bps to 4.9% due to intensified commercial actions and strong basket deflation.

Financial Results

Financial charges for the Group were EUR 18 million, EUR 2.6 million below 2013 coming mainly from a lower negative exchange rate effect.

Net Results

Net Profit attributable to Jerónimo Martins was EUR 145 million, 12.4% below prior year.

3. Balance Sheet

(Million Euro)	H1 14	2013	H1 13
Net Goodwill	648	648	635
Net Fixed Assets	2,976	2,940	2,721
Total Working Capital	-1,519	-1,686	-1,541
Others	9 4	9 2	8 6
Invested Capital	2,200	1,995	1,901
Total Borrowings	904	688	851
Leasings	3	6	1 1
Accrued Interest	8	2 0	1 0
Marketable Sec. & Bank Deposits	-308	-368	-411
Net Debt	607	346	461
Non Controlling Interests	261	267	292
Share Capital	629	629	629
Reserves and Retained Earnings	704	753	519
Shareholders Funds	1,594	1,649	1,440
Gearing	38.1%	21.0%	32.0%

Net Debt increased to EUR 607 million, following the Dividend payments in May of EUR 205 million, and Gearing was 38.1%.

Cash Flow

(Million Euro)	H1 14	H1 13
EBITDA	341	350
Interest Payment	-16	-17
Other Financial Items	1 6	1 0
Income Tax	-58	-61
Funds From Operations	284	281
Capex Payment	-233	-234
Working Capital Movement	-102	-5
Others	1	0
Free Cash Flow	-50	4 2

The free Cash Flow in the period was EUR -50 million, after Capex payments of EUR 233 million. The negative working capital movement is a consequence of the increased promotional activity which led to higher inventories at the end of this first half of the year.

Investment Programme

The Group Capex was EUR 172 million in the first six months, of which 82% was invested in Biedronka.

4. Outlook for 2014

The very competitive environment that requires us to maintain our price investments together with the strong food deflation will impact profitability for the year. We therefore expect the EBITDA margin evolution for 2014, versus the previous year, to be broadly in line with the development in the first half of this year.

Lisbon, 29th July 2014

The Board of Directors

II. CONSOLIDATED MANAGEMENT REPORT APPENDIX

1. Sales Evolution

		Total Sales Growth			LFL Sales Growth
	Q1 14	Q2 14	H1 14	Q1 14	Q2 14	H1 14
Biedronka
Euro	5.9%	12.3%	9.1%
PLN	6.6%	11.5%	9.1%	-2.7%	0.3%	-1.2%
Pingo Doce	2.3%	2.9%	2.6%	1.1%	1.9%	1.5%
Ex-Fuel	2.7%	3.5%	3.1%	2.0%	2.7%	2.4%
Recheio	-0.1%	-0.4%	-0.3%	-0.4%*	-0.4%	-0.4%

* Corrected number - A Recheio store that was remodelled between January and May 2014, with a negative impact on sales, was incorrectly included in the Q1 LFL calculation. The Q1 2014 LFL of -0.4% in this report is the corrected number.

2. Stores Network

			Openings	Closings	Network
Number of Stores	2013	Q1 14	Q2 14	H1 14	H1 14	H1 13
Biedronka	2,393	1 9	7 3	1 2	2,473	2,184
Pingo Doce	376	2	1	1	378	373
Recheio	4 1	0	0	0	4 1	4 1

Sales Area (sqm)	2013		Openings	Closings/ Remodellings		Network
		Q1 14	Q2 14	H1 14	H1 14	H1 13
Biedronka	1,500,038	13,212	50,492	-3,642	1,567,382	1,346,154
Pingo Doce	457,171	2,400	688	1,146	459,113	454,175
Recheio	129,295	0	0	630	128,665	129,295

3. EBITDA Margin Breakdown

	H1 14	% total	H1 13	% total
Biedronka	7.0%	82.2%	7.8%	82.2%
Pingo Doce (store sales)	4.9%	22.5%	4.9%	21.3%
Recheio	4.9%	5.4%	5.4%	5.8%
Others & Cons. Adjustments	n.a.	-10.0%	n.a.	-9.2%
JM Consolidated	5.6%	100%	6.2%	100%

4. Financial Costs Breakdown

(Million Euro)	H1 14	H1 13
Net Interest	-16	-15
Exchange Differences	0	-2
Others	-2	-4
Financial Results	-18	-20

5. Working Capital

(Million Euro)	H1 14	2013	H1 13
Inventories	600	575	460
in days of sales	1 8	1 8	1 5
Customers	5 4	5 0	5 3
in days of sales	2	2	2
Suppliers	-1,961	-2,035	-1,791
in days of sales	-59	-63	-57
Trade Working Capital	-1,307	-1,410	-1,278
in days of sales	-39	-44	-41
Others	-212	-276	-263
Total Working Capital	-1,519	-1,686	-1,541
in days of sales	-45	-52	-49

6. Net Debt

H1 14
609
67.4%
2.1
225
384
295
32.6%
904
1.6
3
8
-308
607
36.0%
57.5%
6.5%

7. Definitions

Like-for-like 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.

8. Information Regarding Individual Financial Statements

In accordance with section b) of paragraph 3 of article 246 of the Portuguese Securities Code, the first half individual financial statements of Jerónimo Martins SGPS, S.A. will not be disclosed as they do not include additional relevant information, compared to the one presented in this report.

III. OTHER INFORMATION

Disclosures required by sub-paras. a) and c) of Article 9.1 and Article 14.7 of Securities Market Commission (CMVM) Regulation no. 5/2008 (with reference to the first half of 2014)

1. Securities issued by the Company, Controlled or Controlling Companies or Companies in the same Group held by Company Officers

Board of Directors

Members of the Board of Directors	Held on 31.12.13		Increases during the year		Decreases during the year		Held on 30.06.14
	Shares	Bonds	Shares	Bonds	Shares	Bonds	Shares	Bonds
Pedro Manuel de Castro Soares dos Santos	235,805	-	-	-	-	-	235,805	-
Alan Johnson	21,400	-	8,675	-	-	-	30,075	-
António Pedro de Carvalho Viana-Baptista	-	-	-	-	-	-	-	-
Hans Eggerstedt	19,700	-	-	-	-	-	19,700	-
José Manuel da Silveira e Castro Soares dos Santos	-	-	-	-	-	-	-	-
Nicolaas Pronk	-	-	-	-	-	-	-	-
Andrzej Szlezak	-	-	-	-	-	-	-	-
Sérgio Tavares Rebelo	-	-	-	-	-	-	-	-
Francisco Seixas da Costa	-	-	-	-	-	-	-	-

Statutory Auditor

As at June 30th 2014, the Statutory Auditor PricewaterhouseCoopers & Associados, SROC, Lda., did not hold any shares and bonds of Jerónimo Martins, SGPS, S.A. and had not made any transactions in securities with Jerónimo Martins, SGPS, S.A..

2. List of Transactions made by Persons Discharging Managerial Responsibilities and People Closely Connected with them during the first half

Alan Johnson

Date	Nature	Code ISIN	Volume	Price	Local
13-03-2014	Buy	PTJMT0AE0001	8,675	11.500	Euronext Portugal
Total			8,675

3. List of Shareholders with Qualifying Holdings as at June 30th, 2014

Shareholder	Nr. of Shares Held	% Capital	Nr. of Voting Rights	% of Voting Rights*
Sociedade Francisco Manuel dos Santos, SGPS, S.A.
Through Sociedade Francisco Manuel dos Santos, B.V.	353,260,814	56,136%	353,260,814	56.136%
BlackRock Inc.
Through Investment Funds Managed by BlackRock Inc.	12,694,453	5,010%	12,694,453	5.010%
Heerema Holding Company Inc.
Through Asteck, S.A.	31,464,750	5,000%	31,464,750	5.000%
Aberdeen Asset Managers Limited
Directly	17,695,625	2,810%	17,695,625	2.810%
Carmignac Gestion
Directly	16,859,313	2,679%	16,859,313	2.679%
BNP Paribas
Through Investment Funds Managed by BNP Paribas	13,536,757	2,151%	12,604,860	2.006%

Source: Last communications made by the shareholders with qualifying holdings to Jerónimo Martins, SGPS, S.A..

* Based on the total number of shares under the terms of section b), paragraph 3 of article 16 of the Portuguese Securities Code.

IV. STATEMENT OF THE BOARD OF DIRECTORS

Statement of the Board of Directors

Within the terms of paragraph c) ⁿ°1 of article ²⁴⁶ of Portuguese Securities Code, we hereby inform you that to the best of our knowledge:

• i) the information contained in the interim management report is ^a faithful statement of the evolution of the businesses, of the performance and of the position of Jerónimo Martins, SGPS, S.A. and the companies included within the consolidation perimeter, and contains ^a description of the main risks and uncertainties which they face; and
• ii) the information contained in the consolidated financial statements, as well as their annexes, was produced in compliance with the applicable accounting standards and gives ^a true and fair view of the assets and liabilities, the financial situation and the results of Jerónimo Martins, SGPS, S.A. and the companies included in the consolidation perimeter.

Lisbon, 2gth July, 2014

Pedro Manuel de Castro Soares dos Santos (Chair .n of the Board of Directors and Chief Executive Officer and Chairman of Committee on Corporate Governance and Corporate

Respo~~, 1 a '~.hnson

• (Chief Financi 1 Ofl9cer and Member of the Board of Directors)

Andrzej Szlezak

(Member of the ~oard of Directors and Member of Committee on Corporate Governance and Corporate Responsibility)

• Antón)~ Pedro de Carvalho Viana-Baptis~ (Mem~%of the Board oí Dií~E~rs and Member of the Audit Committee)

Francisc~ Seixa of Committee on Corporate Governance and Corporate Responsibility)

(Member of t oard of Directors and Chairman of the Audit Committee)

• - - Manuel da Silveira e Cas . - .ares dos Santos (Member ^o ~~ ectors and Member of Committee on Corporate Governance and Corporate Responsibihty)

• of the Board of Directors)

Sérgio Tavares Rebelo (Member of the Board of Directors and Member of the Audit Committee)

Jerónimo Martins. SGPS. SA

Head Offlce Rua Actor António Silva. ft° 7 1649.033 Lisbon. Portugal Tei: .351217532000 Fax: +351 21 753 2049 www.Jeronimomartins.pt

V. CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT BY FUNCTIONS FOR JUNE 2014 AND 2013

					Euro thousand
	Notes	st Half 1 2014	st Half 1 2013	nd Quarter 2 2014	nd Quarter 2 2013
Sales and services rendered	3	6,051,713	5,643,044	3,139,255	2,871,343
Cost of sales	4	(4,765,732)	(4,436,428)	(2,475,848)	(2,259,428)
Total margin		1,285,981	1,206,616	663,407	611,915
Distribution costs	5	(973,115)	(874,522)	(494,888)	(434,696)
Administrative costs	5	(106,308)	(104,447)	(53,349)	(55,890)
Exceptional operating profits/losses	9.1	(493)	878	(218)	1,507
Operating profit		206,065	228,525	114,952	122,836
Net financial costs	6	(17,837)	(20,485)	(9,189)	(9,879)
Gains in associated companies	12	8,095	5,655	5,080	3,239
Gains in other investments	9.2	-	25	-	25
Profit before taxes		196,323	213,720	110,843	116,221
Income taxes	8	(44,371)	(44,646)	(24,471)	(24,478)
Profit before non-controlling interests		151,952	169,074	86,372	91,743
Attributable to:
Non-controlling interests		7,031	3,727	3,824	1,650
Jerónimo Martins Shareholders		144,921	165,347	82,548	90,093
Basic and diluted earnings per share- Euros	18	0.2306	0.2631	0.1314	0.1434

To be read with the attached notes to the consolidated financial statements on pages 16 to 27

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

				Euro thousand
	st Half 1 2014	st Half 1 2013	nd Quarter 2 2014	nd Quarter 2 2013
Net profit	151,952	169,074	86,372	91,743
Other comprehensive income:
Items that will not be reclassified to profit or loss
Revaluation of fixed assets	-	636	-	636
	-	636	-	636
Items that may be reclassified to profit or loss
Currency translation differences	(2,893)	(44,846)	409	(22,975)
Change in fair value of cash flow hedges	528	2,325	(532)	1,742
Change in fair value of hedging instruments on foreign operations	-	(1,383)	627	(3,881)
Change in fair value of available-for-sale financial assets	50	43	(74)	2
	(2,315)	(43,861)	430	(25,112)
Income tax effect	(179)	447	(34)	219
Other comprehensive income, net of income tax	(2,494)	(42,778)	396	(24,257)
Total comprehensive income	149,458	126,296	86,768	67,486
Attributable to:
Non-controlling interests	7,415	3,791	3,923	2,163
Jerónimo Martins Shareholders	142,043	122,505	82,845	65,323
Total comprehensive income	149,458	126,296	86,768	67,486

To be read with the attached notes to the consolidated financial statements on pages 16 to 27

R&C - 1 st Half 2014 Consolidated Financial Statements

BALANCE SHEET AT 30 JUNE 2014 AND 31 DECEMBER 2013

			Euro thousand
	Notes	30 June 2014	31 December 2013
Assets
Tangible assets	10	2,811,908	2,782,821
Investment properties	10	44,087	47,471
Intangible assets	10	812,567	805,849
Investments in joint-ventures and associates	12	73,285	81,431
Available-for-sale financial assets		1,258	1,208
Trade debtors and deferred costs	14	88,433	87,999
Deferred tax assets	13	50,834	51,013
Total non-current assets		3,882,372	3,857,792
Inventories		594,167	574,992
Income tax receivable		2,659	41,126
Trade debtors, accrued income and deferred costs	14	291,594	253,578
Derivative financial instruments	11	4	-
Cash and cash equivalents	15	311,936	371,671
Total current assets		1,200,360	1,241,367
Total assets		5,082,732	5,099,159
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		25,684	27,312
Retained earnings	17	661,660	709,661
		1,333,029	1,382,658
Non-controlling interests		260,898	266,604
Total Shareholders' equity		1,593,927	1,649,262
Borrowings	19	609,550	369,073
Trade creditors, accrued costs and deferred income	21	847	861
Derivative financial instruments	11	4,242	2,953
Employee benefits	20	37,690	37,464
Provisions for risks and contingencies	20	77,630	77,949
Deferred tax liabilities	13	80,288	77,750
Total non-current liabilities		810,247	566,050
Trade creditors, accrued costs and deferred income	21	2,369,140	2,477,738
Derivative financial instruments	11	381	15,599
Borrowings	19	297,228	324,716
Income tax payable		11,809	65,794
Total current liabilities		2,678,558	2,883,847
Total Shareholders' equity and liabilities		5,082,732	5,099,159

To be read with the attached notes to the consolidated financial statements on pages 16 to 27

R&C - 1 st Half 2014 Consolidated Financial Statements

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

												Euro thousand
									Shareholders' equity attributable to Shareholders of Jerónimo Martins, SGPS, S.A.
	N						Fair value and other reserves
	o t e s	Share capital	Share premium	Own shares	Fair value	Cash flow hedge	Avalilable for-sale financial assets	Ajust. in joint ventures and assoc.	Currency translation reserves	Retained earnings	total	Non controlling interests	Shareholder s' equity
Balance Sheet at 31 December 2012		629,293	22,452	(6,060)	85,197	(4,097)	(1,437)	4,248	(31,786)		513,721 1,211,531	290,395	1,501,926
Equity changes in 2013
Currency translation differences in the 1st Half of 2013					(1,480)	16			(42,330)		(43,794)		(43,794)
Revaluation of fixed assets from 2013					636						636		636
Change in fair value of cash flow hedging						1,656					1,656	64	1,720
Change in fair value of hedging instruments on foreign operations									(1,383)		(1,383)		(1,383)
Change in fair value of available-for-sale financial investments							43				43		43
Other comprehensive income		-	-	-	(844)	1,672	43	-	(43,713)	-	(42,842)	64	(42,778)
Net profit in 1st Half of 2013										165,347	165,347	3,727	169,074
Total comprehensive income		-	-	-	(844)	1,672	43	-	(43,713)	165,347	122,505	3,791	126,296
Dividends										(185,388)	(185,388)	(2,570)	(187,958)
Balance Sheet at 30 June 2013		629,293	22,452	(6,060)	84,353	(2,425)	(1,394)	4,248	(75,499)		493,680 1,148,648	291,616	1,440,264
Balance Sheet at 31 December 2013		629,293	22,452	(6,060)	76,230	(2,453)	(1,251)	2,897	(48,111)		709,661 1,382,658	266,604	1,649,262
Equity changes in 2014
Currency translation differences in the 1st Half of 2014					(14)	1			(2,879)		(2,892)		(2,892)
Change in fair value of cash flow hedging						(36)					(36)	384	348
Change in fair value of available-for-sale financial investments							1,300			(1,250)	50		50
Other comprehensive income		-	-	-	(14)	(35)	1,300	-	(2,879)	(1,250)	(2,878)	384	(2,494)
Net profit in 1st Half of 2014										144,921	144,921	7,031	151,952
Total comprehensive income for the year		-	-	-	(14)	(35)	1,300	-	(2,879)	143,671	142,043	7,415	149,458
Dividends	17									(191,672)	(191,672)	(13,121)	(204,793)
Balance Sheet at 30 June 2014		629,293	22,452	(6,060)	76,216	(2,488)	49	2,897	(50,990)		661,660 1,333,029	260,898	1,593,927

To be read with the attached notes to the consolidated financial statements on pages 16 to 27

CONSOLIDATED CASH FLOW STATEMENT FOR JUNE 2014 AND 2013

			Euro thousand
	Notes	2014	2013
Operating Activities
Cash received from Customers		6,821,511	6,361,532
Cash paid to suppliers		(6,109,332)	(5,596,558)
Cash paid to employees		(472,123)	(421,168)
Cash generated from operations	16	240,056	343,806
Interest paid		(17,165)	(18,455)
Income taxes paid		(57,980)	(61,290)
Cash Flow from operating activities		164,911	264,061
Investment activities
Disposals of tangible assets		2,239	1,582
Disposals of available-for-sale financial assets		3,382	150
Interest received		1,118	1,494
Dividends received		16,264	10,341
Acquisition of tangible assets		(225,654)	(219,564)
Acquisition of intangible assets		(12,984)	(16,444)
Cash flow from investment activities		(215,635)	(222,441)
Financing activities
Received from loans		336,494	310,744
Reimbursement of loans		(136,082)	(112,744)
Dividends paid	17	(204,793)	(187,958)
Cash Flow from financing activities		(4,381)	10,042
Net changes in cash and cash equivalents		(55,105)	51,662
Cash and cash equivalents changes
Cash and cash equivalents at the beginning of 1st Half		371,671	375,072
Net changes in cash and cash equivalents		(55,105)	51,662
Effect of currency translation differences		(4,630)	(12,564)
Cash and cash equivalents at the end of 1st Half	15	311,936	414,170

To be read with the attached notes to the consolidated financial statements on pages 16 to 27

CONSOLIDATED CASH FLOW STATEMENT FOR THE INTERIM PERIOD

				Euro thousand
	1st Half	1st Half	2nd Quarter	2nd Quarter
	2014	2013	2014	2013
Cash Flow from operating activities	164,911	264,061	148,627	91,476
Cash Flow from investment activities	(215,635)	(222,441)	(77,591)	(104,580)
Cash Flow from financing activities	(4,381)	10,042	(125,936)	27,178
Cash and cash equivalents changes	(55,105)	51,662	(54,900)	14,074

Activity 17 Accounting policies 17 Segments reporting18 Cost of sales19 Distribution and administrative costs 19 Net financial costs 20 Financial instruments20 Income tax recognised in the income statement20 Exceptional operating profits/losses and gains/losses in other investments 20 Property, plant and equipment, intangible assets and investment properties21 Derivative financial instruments 22 Investments in joint-ventures and associates22 Deferred tax assets and liabilities 23 Trade debtors, accrued income and deferred costs 23 Cash and cash equivalents 23 Cash generated from operations 24 Dividends 24 Basic and diluted earnings per share24 Borrowings 24 Provisions and employee benefits25 Trade creditors, accrued costs and deferred income25 Contingencies 26 Related parties26 Events after the balance sheet date27

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, Poland and Colombia.

Head Office: Rua Actor António Silva, n.º 7, 1649-033 Lisboa

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 29th July 2014.

2 Accounting policies

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

The amounts presented for quarters, and the corresponding changes are not audited.

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 in the preparation of the annual financial statements, including 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 2013 annual report are omitted because no changes occurred or they are not materially relevant for the understanding of the interim financial statements.

As mentioned in the Corporate Governance chapter of the 2013 Annual Report, the Company, as a result of its normal activity, is exposed to several risks which are monitored and mitigated throughout the year. During the first six months of 2014, there were no material changes in addition to the notes detailed below, that could significantly change the assessment of the risks that the group is exposed to.

2.1 New standards, amendments and interpretations adopted by the Group

Between 2012 and 2014, the European Union (EU) issued the following Regulations, which were adopted by the Group from January 1st 2014:

EU Regulation	IASB Standard or IFRIC Interpretation endorsed by European Union	Issued in	Mandatory for financial years beginning on or after
Regulation no. 1256/2012	IAS 32 Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities (Amendment)	December 2011	January 1, 2014
Regulation no. 1174/2013	IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities and IAS 27 Separate Financial Statements: Investment Entities (Amendment)	October 2012	January 1, 2014
Regulation no. 1374/2013	IAS 36 Impairment of Assets: Recoverable Amount Disclosures for Non-Financial Assets (Amendment)	May 2013	January 1, 2014
Regulation no. 1375/2013	IAS 39 Financial Instruments: Recognition and Measurement: Novation of Derivatives and Continuation of Hedge Accounting (Amendment)	June 2013	January 1, 2014
Regulation no. 634/2014	IFRIC 21 – Levies (New)	May 2013	January 1, 2014

The Group adopted the new interpretation and improvements, with no significant impact on the consolidated financial statements of the Group.

2.2 New standards, amendments and interpretations issued by IASB, but not yet endorsed by European Union

IASB issued in 2014 the following standards and amendments that are still pending endorsement by the European Union:

IASB Standard or IFRIC Interpretation	Issued in	Expected application for financial years beginning on or after
IFRS 14 Regulatory Deferral Accounts (New)	January 2014	January 1, 2016
IFRS 15 Revenue from Contracts with Customers (New)	May 2014	January 1, 2017
IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets: Clarification of Acceptable Methods of Depreciation and Amortisation (Amendment)	May 2014	January 1, 2016
IFRS 11 Joint Arrangements: Accounting for Acquisitions of Interests in Joint Operations (Amendment)	May 2014	January 1, 2016
IAS 16 Property, Plant and Equipment and IAS 41 Agriculture: Bearer Plants (Amendment)	June 2014	January 1, 2016

The application of these new standards and amendments will not have a significant impact on the Group's Consolidated Financial Statements.

2.3. 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 as follows:

Euro foreign exchange reference rates (foreign exchange units per 1 Euro)	Rate on 30 June 2014	Average rate for the half year
Polish Zloty (PLN)	4.1568	4.1758
Swiss Franc (CHF)	1.2156	-
Colombian Peso (COP)	2,568.7500	2,676.8600

3 Segments reporting

Segment information is presented in accordance with internal reporting to Management. Based on this report, the Management evaluates the performance of each segment and allocates the available resources.

Management monitors the performance of the business based on a geographical and business perspective. In accordance with this, the segments are defined as Portugal Retail, Portugal Cash & Carry and Poland Retail. Apart from these there are also other businesses but due to their low materiality are not reported separately.

Business segments:

• Portugal Retail: comprises the business unit of JMR (Pingo Doce supermarkets);
• Portugal Cash & Carry: includes the wholesale business unit Recheio;
• Poland Retail: the business unit with the brand Biedronka;
• Others, eliminations and adjustments: includes i) the business units with reduced materiality (Marketing Services and Representations, Restaurants in Portugal, Health and Beauty Retail in Poland, retail business in Colombia); ii) the Holding companies; and iii) the Group's consolidation adjustments.

Management evaluates the performance of segments based on the Earnings Before Interest and Taxes (EBIT). This indicator excludes the effects of exceptional operating profits/losses.

Detailed Information by Business Segments at June 2014 and 2013

	Portugal Retail		Cash & Carry	Portugal		Poland Retail		Others, eliminations and adjustments	Total JM Consolidated
	2014	2013	2014	2013	2014	2013	2014	2013	2014	2013
Net sales and services		1,706,767 1,657,596	374,113			375,078 4,029,084 3,692,559	(58,251)		(82,189) 6,051,713 5,643,044
Inter-segments	146,919	138,050	903	953	723	685	(148,545)	(139,688)	-	-
External customers	1,559,848	1,519,546	373,210		374,125 4,028,361	3,691,874	90,294	57,499		6,051,713 5,643,044
Operational cash flow (EBITDA)	76,665	74,305	18,313	20,214	280,665	287,312	(34,208)	(32,300)	341,435	349,531
Depreciations and amortisations	(49,042)	(49,292)	(5,783)	(5,653)	(74,609)	(64,219)	(5,443)	(2,720)	(134,877)	(121,884)
Operational result (EBIT)	27,623	25,013	12,530	14,561	206,056	223,093	(39,651)	(35,020)	206,558	227,647
Exceptional operating profits/losses									(493)	878
Financial results and gains in investments									(9,742)	(14,805)
Income tax									(44,371)	(44,646)
Net result attributable to JM									144,921	165,347
Total assets (1)		1,732,035 1,812,872	367,731			359,072 2,638,967 2,631,255	343,999		295,960 5,082,732 5,099,159
Total liabilities (1)		1,195,807 1,263,752	307,718			283,833 2,005,954 1,837,811	(20,674)		64,501 3,488,805 3,449,897
Investments in fixed assets	10,676	19,088	5,343	2,997	141,215	176,192	15,080	28,497	172,314	226,774

(1) The comparative report is 31th December of 2013

Reconciliation between EBIT and Operational Result

	June 2014	June 2013
EBIT	206,558	227,647
Non recurrent results	(493)	878
Operational Result	206,065	228,525

4 Cost of sales

	June 2014	June 2013
Net cost of products sold	4,753,145	4,425,582
Net cash discount and interest paid to suppliers	2,734	807
Electronic payment commissions	6,579	6,554
Other supplementary costs	3,274	3,485
	4,765,732	4,436,428

5 Distribution and administrative costs

	June 2014	June 2013
Supplies and services	225,349	204,710
Advertising costs	29,586	23,472
Rents	148,456	131,350
Staff costs	463,605	427,431
Amortisations	133,742	120,686
Profit/loss with tangible and intangible assets	1,113	790
Transportation costs	73,069	68,333
Other operational profit/loss	4,503	2,197
	1,079,423	978,969

6 Net financial costs

	June 2014	June 2013
Interest expense	(16,994)	(16,483)
Interest received	1,141	1,250
Dividends	23	23
Net foreign exchange	(85)	(1,742)
Other financial costs and gains	(1,926)	(3,558)
Fair value of financial investments held for trade:
Derivative instruments (note 11)	4	25
	(17,837)	(20,485)

The interest expense heading includes the interest regarding loans measured at amortized cost, as well as interest on fair value and cash flow hedging instruments (note 11).

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

7 Financial instruments

The value recognised in reserves relating to the hedging of investment in Poland is positive EUR 1,036 thousand, net of tax (2013: negative EUR 1,383 thousand).

Changes to the fair value of derivative instruments designated as fair value hedging (note 11) for the amount of EUR 9,104 thousand (2013: negative EUR 522 thousand) was offset by a symmetrical variation in value for the loan of USD 96 million, which matured in June 2014 (note 19).

8 Income tax recognised in the income statement

	June 2014	June 2013
Current income tax
Current tax of the year	(43,715)	(45,757)
Adjustment to prior year estimation	1,167	730
	(42,548)	(45,027)
Deferred tax (note 13)
Temporary differences created and reversed	(1,933)	61
Change to the recoverable amount of tax losses and temporary differences from previous years	(606)	31
	(2,539)	92
Other gains/losses related to taxes
Impact of changes in estimates for tax litigations	716	289
	716	289
Total income taxes	(44,371)	(44,646)

Income tax expense is recognised based on the weighted average annual income tax rate expected for the year 2014. For the companies operating in Portugal the estimation includes the effect of 1.5% as Municipal surcharge and a state tax rate of 3% and 5% for tax profits over EUR 1,500 thousand and EUR 7,500 thousand, respectively.

9 Exceptional operating profits/losses and gains/losses in other investments

9.1 Exceptional operating profits/losses

	June 2014	June 2013
Organizational restructuring costs	(469)	(2,088)
Legal processes	-	1,058
Assets Write-offs	(24)	-
Others	-	1,908
	(493)	878

9.2 Gains/Losses in other investments

	June 2014	June 2013
Gains in sale of investment properties	-	25
	-	25

10 Property, plant and equipment, intangible assets and investment properties

	Tangible assets	Investment properties	Intangible assets	Total
Net value at 31 December 2013	2,782,821	47,471	805,849	3,636,141
Foreign exchange differences	599	-	(209)	390
Increases	159,330	-	12,984	172,314
Disposals and write-offs	(1,930)	(3,382)	(35)	(5,347)
Transfers	(1,004)	-	1,004	-
Depreciation and impairment losses	(127,879)	-	(7,026)	(134,905)
Transfers to/from investment properties	(29)	29	-	-
Fair value changes	-	(31)	-	(31)
Net value at 30 June 2014	2,811,908	44,087	812,567	3,668,562

Goodwill is allocated to the Group's business areas as presented below:

Business areas	June 2014	December 2013
Portugal Retail	246,519	246,519
Portugal Cash & Carry	83,836	83,836
Poland Health and Beauty Retail	9,333	9,339
Poland Retail	308,481	308,667
	648,169	648,361

As a consequence of currency translation adjustment of the assets in the Group's businesses reported in foreign currency, the net amount of tangible and intangible assets increased by EUR 390 thousand, which includes a reduction of EUR 191 thousand related to Goodwill.

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

The difference to total of amortisations stated in note 5, relates mainly to the production activities that were attributable to the cost of the goods sold.

11 Derivative financial instruments

		June 2014			December 2013
	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 million EUR	-	-	66	-
Currency forwards (PLN)	3 million PLN	4	-	-	-		-	-	-	-
Fair value hedging derivatives
USD loan hedging		-	-	-	-	96 million USD	-	-	9,104	-
Cash flow hedging derivatives
Interest rate swap (EUR)	325 million EUR	-	-	381	2,097	438 million EUR	-	-	2,385	1,933
Interest rate swap (PLN)	500 million PLN	-	-	-	2,145	500 million PLN	-	-	-	1,020
Foreign operation investments hedging derivatives
Currency forwards (PLN)		-	-	-	-	960 million PLN	-	-	4,044	-
Total derivatives held for trading		4	-	-	-		-	-	66	-
Total hedging derivatives		-	-	381	4,242		-	-	15,533	2,953
Total assets/liabilities derivatives		4	-	381	4,242		-	-	15,599	2,953

At June 2014 the values shown include interest receivable or payable related with these financial instruments that are due. The net payable amount is EUR 475 thousand (December 2013: payable EUR 745 thousand).

Financial instruments that matured during the period

In the 1 st half of 2014 the following interest rate swaps matured:

	Currency	Loan amount	Hedged amount	Index hedged	Rate review date	Loan and hedge maturity
JMR/2014	EUR	52,500	52,500	6-months Euribor	April	April 2014
JMP/2014	EUR	80,537	60,375	6-months Euribor	June	June 2014

The total coverage of the risk exposure of the fair value of the USD loan (totaling USD 96,000 thousand) as well as hedging the foreign exchange risk exposure to Zloty, also matured in the 1st Half of 2014.

12 Investments in joint-ventures and associates

During the 1st half of 2014, the movement under this heading was as follows:

	Joint ventures			Associates	Total
	June 2014	December 2013	June 2014	December 2013	June 2014	December 2013
Opening balance	80,536	76,351	895	1,006	81,431	77,357
Equity method:
Net result	8,159	18,477	(64)	361	8,095	18,838
Dividends and other income received	(16,241)	(13,209)	-	(472)	(16,241)	(13,681)
Other comprehensive income	-	(1,083)	-	-	-	(1,083)
Closing balance	72,454	80,536	831	895	73,285	81,431

13 Deferred tax assets and liabilities

	Opening balance	Impact on results	Impact on equity	Currency translation differences	Closing balance
Deferred tax liabilities
Revaluation of assets	24,175	(3)	-	(3)	24,169
Deferred income for tax purposes	37,727	1,157	-	(16)	38,868
Other temporary differences	15.848	1.402	-	1	17.251
	77,750	2,556	-	(18)	80,288
Deferred tax assets
Excess over legal provisions	22,327	2,147	-	1	24,475
Revaluation of assets	4,055	(92)	-	-	3,963
Employee benefits	5,001	(97)		- -	4,904
Derivative instruments	1,105	(15)	(180)	-	910
Recoverable losses	576	56		- -	632
Other deferred costs for tax purposes	14,481	(912)	-	(13)	13,556
Other temporary differences	3,468	(1,070)		- (4)	2,394
	51,013	17	(180)	(16)	50,834
Net change in deferred tax	(26,737)	(2,539)	(180)		2 (29,454)

14 Trade debtors, accrued income and deferred costs

	June 2014	December 2013
Non-current
Other debtors	83,244	82,397
Deferred costs	5,189	5,602
	88,433	87,999
Current
Commercial customers	55,897	52,065
Other debtors	95,416	63,751
Other taxes receivable	8,640	12,329
Accrued income and deferred costs	131,641	125,433
	291,594	253,578

Until December 2013 other taxes were recorded under taxes receivable in a separate line of the balance sheet, along with income tax.

Of the non-current other debtors an amount of EUR 78,159 thousand relates to additional tax liquidation, as well as advances on account of tax. The Group has already contested the amount paid and made a legal claim for reimbursement (see note 31 of the Annual Report as of 31 December 2013).

Accrued income essentially relates to the recognition of supplementary gains contracted with suppliers, in the amount of EUR 111,066 thousand.

The debtor's amount is registered at the recoverable value. The Group constitutes provisions for impairment losses whenever there are signs of uncollectable amounts. At 30 June 2014 the adjustments to the net realisable value were EUR 21,605 thousand.

15 Cash and cash equivalents

	June 2014	December 2013
Bank deposits	134,968	188,489
Short-term investments	173,206	179,376
Cash and cash equivalents	3,762	3,806
	311,936	371,671

Bank deposits correspond to values in banks to meet current cash requirements as well as receipts from customers in transit.

Short-term investments correspond to time deposits in financial institutions that, at June 30, 2014 had a rating between BBB- and A+.

16 Cash generated from operations

	June 2014	June 2013
Net results	144,921	165,347
Adjustments for:
Non-controlling interests	7,031	3,727
Income tax	44,371	44,646
Depreciations and amortisations	134,877	121,884
Provisions and other operational gains and losses	450	1,680
Net financial costs	17,837	20,485
Profit/ Losses in associated companies	(8,095)	(5,655)
Profit/ Losses on other investments	-	(25)
Profit/ Losses on tangible and intangible assets	581	1,687
	341,973	353,776
Changes in working capital:
Inventories	(18,496)	(4,431)
Trade debtors, accrued income and deferred costs	(6,650)	(4,615)
Trade creditors, accrued costs and deferred income	(76,771)	(924)
	240,056	343,806

17 Dividends

Dividends distributed in 2014 in the amount of EUR 204,793 thousand, include an amount of EUR 191,672 thousand paid to JMH Shareholders, and an amount of EUR 13,121 thousand paid to non-controlling interests in the Group companies.

18 Basic and diluted earnings per share

Basic net results per share are calculated based on the net profit of EUR 144,921 thousand (2013: profit of EUR 165,347 thousand) and on the weighted average outstanding ordinary shares numbering 628,434,220 (2013: 628,434,220).

	June 2014	June 2013
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)
Weighted average number of ordinary shares	628,434,220	628,434,220
Diluted net results of the year attributable to ordinary shares	144,921	165,347
Basic and diluted earnings per share – Euros	0.2306	0.2631

19 Borrowings

In March 2014, Jeronimo Martins Colombia, S.A.S. negotiated an increase of the credit line with Citi Bank Colombia to the amount of COP 100,000,000 thousand. The interest rate is floating and indexed to the IBR.

In June 2014, Jeronimo Martins Colombia contracted a short term loan with Banco Santander Colombia, in a total amount of COP 15,500,000 thousand, with the interest rate indexed to the DTF.

JM Polska contracted several loans on a total amount of PLN 1,000,000 thousand with maturity in 2017. The Polish companies also contracted overdrafts facilities for a total amount of PLN 355,000 thousand.

In April 2014, JMR reimbursed the EUR 52,500 thousand from the 2009 Bond Loan with a 5 year maturity as well as the final tranche of the US Private Placement in the amount of USD 96,000 thousand, that matured in June 2014.

The contracts of Commercial Paper held with Banco Santander by Jeronimo Martins, SGPS,S.A. and JMR, SGPS,S.A. were renegotiated.

19.1 Current and non-current loans

	June 2014	December 2013
Non-current loans
Bank loans	384,184	142,910
Bond loans	225,000	225,000
Financial lease liabilities	366	1,163
	609,550	369,073
Current loans
Bank overdrafts	159,817	74,021
Bank loans	35,066	22,243
Bond loans	100,000	223,852
Financial lease liabilities	2,345	4,600
	297,228	324,716

Compared to the report as at 31 December 2013 (note 24) there are no relevant changes in the Group's average financing rate.

19.2 Financial debt

As the Group contracted several foreign exchange rate risk and interest risk hedging operations, as well as short-term investments, the net consolidated financial debt as at 30 June is as follows:

	June 2014	December 2013
Non-current loans (note 19.1)	609,550	369,073
Current loans (note 19.1)	297,228	324,716
Derivative financial instruments (note 11)	4,619	18,552
Interest on accruals and deferrals	3,290	1,367
Bank deposits (note 15)	(134,968)	(188,489)
Short-term investments (note 15)	(173,206)	(179,376)
	606,513	345,843

20 Provisions and employee benefits

	Risks and contingencies	Employee benefits
Balance at 1 January	77,949	37,464
Set up, reinforced and transfers	1,400	1,555
Unused and reversed	(1,107)	-
Foreign exchange difference	-	-
Used	(612)	(1,329)
Balance at 31 June	77,630	37,690

21 Trade creditors, accrued costs and deferred income

	June 2014	December 2013
Non-current
Accrued costs and deferred income	847	861
	847	861
Current
Other commercial creditors	1,995,037	2,054,839
Other non-commercial creditors	134,345	190,583
Other taxes payables	76,128	72,686
Accrued costs and deferred income	163,630	159,630
	2,369,140	2,477,738

Until December 2013 other taxes payable were recorded under Taxes Payable, along with income tax payable.

22 Contingencies

Following the contingencies mentioned in the 2013 Annual Report, changes occurred on the headings as follows:

• a) Proherre Internacional, Lda. claimed an indemnity payment of EUR 2,500 thousand from Pingo Doce – Distribuição de Produtos Alimentares, S.A. (Pingo Doce), alleging the termination of a lease agreement by Pingo Doce, without the minimum period agreed between the parties having elapsed. Lisbon Court of Appeal determined an amount of compensation of EUR 1,100 thousand to be paid by Pingo Doce. Proherre filed an appeal to the Supreme Court of Justice. The parties are awaiting the decision;
• b) Rui Ribeiro Construções, S.A., filed indemnity proceedings with the Tribunal Arbitral da Associação Comercial de Lisboa (Arbitration Court of the Lisbon Commercial Association), with a view to condemning Pingo Doce to pay approximately EUR 800 thousand for breaking a contracted work services agreement. After partial condemnation of Pingo Doce, the Group appealed to the Court of Appeal, which revoked the decision of the Arbitration Court on the ground that the decision was substantiated in facts that were not carried into the process and that were not to be dealt by the Court. Rui Ribeiro did not appeal to the Supreme Court. Accordingly the decision is now final;
• h) In the 1 st half of 2014 the Portuguese Tax Authorities carried out some corrections to the CIT amount concerning 2011 from companies included in the perimeter of the Tax group headed by JMR – Gestão de Empresas de Retalho, SGPS, S.A. (JMR SGPS). With this corrections the total assessments concerning 2002 to 2011, amount to EUR 58,389 thousand. We believe that the Tax Authorities have no grounds to request this payment and these assessments have been challenged. In the meantime, the Lisbon Tax Court has ruled partially in favour of JMR regarding the 2002 and 2005 assessments. The Board of Directors believes strongly in its arguments, and all remaining cases follow their court proceedings;
• k) In the 1st half of 2014 the Portuguese Tax Authorities carried out some corrections of VAT rates applied to certain goods sold by Pingo Doce in 2011. With these corrections the total amount of assessments for the years 2005 to 2011 in Pingo Doce amount to EUR 1,814 thousand. We believe that the Tax Authorities have no grounds to request this payment and these assessments have been challenged;
• p) At the end of 2012, DST, SGPS, S.A. initiated judicial proceedings against Pingo Doce, claiming that Pingo Doce breached a promissory share purchase agreement dated 2000, regarding a company that owns real estate in Barcelos. The plaintiff (promissory seller) claims to be entitled to keep part of the purchase price paid by the defendant (promissory buyer) in the amount of EUR 5,000 thousand, as indemnity. Pingo Doce presented a counterclaim, alleging that the contract was no longer in force and asking for the reimbursement of the amount paid, plus interest accrued in a total amount of EUR 6,062 thousand. The trial took place before the end of 2013. Meanwhile the Court has decided in favor of Pingo Doce and determined DST to pay EUR 5,000 thousand plus interest as of 2011. DST filed an appeal to the Supreme Court of Justice. After submitting such appeal, DST entered into an agreement with Pingo Doce, accepting to pay EUR 5.257 thousand. Such payment was made in July and the judicial suit is now closed.

23 Related parties

56.14% of the Group is owned by the Sociedade Francisco Manuel dos Santos, and no transactions occurred between this Company and any other company of the Group in the first half of 2014, neither were there any amounts payable or receivable between them on June 30th 2014.

	Sales and services rendered			Stocks purchased and services supplied
	June 2014	June 2013	June 2014	June 2013
Joint ventures	220	51	46,130	41,178
Associates	-	-	9	2
Other related parties (*)	49	-	119	-

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

	Trade debtors, accrued income and deferred costs			Trade creditors, accrued costs and deferred income
	June 2014	December 2013	June 2014	December 2013
Joint ventures	387	477	21,650	7,253
Associates	-	-	-	10
Other related parties (*)	11	6	11	-

(*) Entities controlled by the major Shareholder of Jerónimo Martins and entities owned or controlled by members of the Board of Directors.

All the transactions with these related parties 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 adjustments for doubtful debts and no costs were recognised during the year related with bad or doubtful debts with these related parties.

24 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, 29th July 2014

The Certified Accountant The Board of Directors

Limited Review Report Prepared by Auditor Registered with the Securities Market Commission (CMVM) on the Consolidated Half Year Information

(Free translation from the original in Portuguese)

Introduction

1 In accordance with the Portuguese Securities Market Code (CVM), we present our limited review report on the consolidated financial information for the six-month period ended June 30, 2014 of Jerónimo Martins, SGPS, S.A. included in the consolidated Management Report, consolidated balance sheet (which shows total assets of Euro 5,082,732 thousand and total shareholders' equity of Euro 1,593,927 thousand, including non-controlling interests of Euro 260,898 thousand and a net profit of Euro 144,921 thousand), consolidated income statement by functions, consolidated statement of comprehensive income, consolidated statement of changes in shareholders' equity and consolidated cash flows statement for the period then ended, and the corresponding notes to the accounts.

2 The amounts in the consolidated financial statements, as well as those in the additional financial information, are derived from the respective accounting records.

Responsibilities

3 It is the responsibility of the Board of Directors: (a) to prepare consolidated financial information which present fairly, in all material respects, the financial position of the companies included in the consolidation, the consolidated results and the consolidated comprehensive income of their operations, the changes in consolidated equity and the consolidated cash flows; (b) to prepare historical financial information in accordance with International Accounting Standard 34 – Interim Financial Reporting as adopted by the European Union and which is complete, true, up-to-date, clear, objective and lawful as required by the CVM; (c) to adopt appropriate accounting policies and criteria; (d) to maintain appropriate systems of internal control; and (e) to disclose any significant matters which have influenced the activity, financial position or results.

4 Our responsibility is to verify the financial information included in the documents referred to above, namely as to whether it is complete, true, up-to-date, clear, objective and lawful, as required by the CVM, for the purpose of issuing an independent and professional report based on our work.

Scope

5 Our work was performed with the objective of obtaining moderate assurance about whether the financial information referred to above is free from material misstatement. Our work was performed in accordance with the Standards and Technical Recommendations issued by the Institute of Statutory Auditors, planned according to that objective, and consisted primarily, in enquiries and analytical procedures, to review: (i) the reliability of the assertions included in the financial information; (ii) the appropriateness and consistency of the accounting principles used, as applicable; (iii) the applicability, or not, of the going concern basis of accounting; (iv) the presentation of the financial information; (v) as to whether the consolidated financial information is complete, true, upto-date, clear, objective and lawful.

PricewaterhouseCoopers & Associados - Sociedade de Revisores Oficiais de Contas, Lda. Sede: Palácio Sottomayor, Rua Sousa Martins, 1 - 3º, 1069-316 Lisboa, Portugal Tel +351 213 599 000, Fax +351 213 599 999, www.pwc.pt Matriculada na CRC sob o NUPC 506 628 752, Capital Social Euros 314.000 Inscrita na lista das Sociedades de Revisores Oficiais de Contas sob o nº 183 e na CMVM sob o nº 9077 6 Our work also covered the verification that the consolidated financial information included in the consolidated Management Report is consistent with the remaining documents referred to above.

7 We believe that the work performed provides a reasonable basis for the issue of this limited review report on the half year information.

Conclusions

8 Based on the work, which was performed with the objective of obtaining a moderate level of assurance, nothing has come to our attention that leads us to conclude that the consolidated financial information for the six-month period ended June 30, 2014 contain material misstatements that affect its conformity with International Accounting Standard 34 – Interim Financial Reporting as adopted by the European Union and that it is not complete, true, up-to-date, clear, objective and lawful.

Report on other requirements

9 Based on the work, nothing has come to our attention that leads us to believe that the consolidated financial information included in the consolidated Management Report is not consistent with the consolidated financial information for the period.

July 31, 2014

PricewaterhouseCoopers & Associados - Sociedade de Revisores Oficiais de Contas, Lda Registered in the Comissão do Mercado de Valores Mobiliários with no. 9077 represented by:

José Pereira Alves, R.O.C.

(This is a translation, not to be signed)