Consolidated Report & Accounts

First Quarter 2016

Unaudited

INDEX

I – Consolidated Management Report

Message from the Chairman and CEO Pedro Soares dos Santos 3
1. Sales Analysis 3
1. Results Analysis 4
2. 1. Balance Sheet 5
3. 1. Outlook 2016 6

II – Consolidated Management Report Appendix

1. Sales Growth 7
1. Store Network 7
1. EBITDA Margin Breakdown 7
1. Financial Costs Breakdown 7
1. Definitions 7
1. Information Regarding Individual Financial Statements 7

III – Consolidated Financial Statements

1. Consolidated Financial Statements 8
1. Notes to the Consolidated Financial Statements 12

CONSOLIDATED MANAGEMENT REPORT

Message from the Chairman and CEO – Pedro Soares dos Santos

'The first quarter results reflect a strong start to the year and confirm the LFL momentum in both Poland and Portugal.

Biedronka continued to be strongly committed to its new sales growth path. The renewed focus on efficiency has been allowing the Company to increase sales and profitability while reinforcing competitive positioning.

In Portugal, despite a competitive environment that was even tougher than last year, Pingo Doce and Recheio delivered solid growth.

In Colombia, where we opened 8 stores in the quarter, the two regions continue to perform well which validates our plans to open the third region in the second half of the year.

Our performance in the first three months reinforces my confidence in the strength and effectiveness of our value propositions and on the ability for our businesses to continue outperforming their respective markets.'

1. Sales Analysis

Net Sales and Services

(Million Euro)		Q1 16		Q1 15	
		% total		% total	Pln	Euro
Biedronka	2,282	67.6%	2,172	68.1%	9.3%	5.1%
Pingo Doce	817	24.2%	772	24.2%		5.8%
Recheio	188	5.6%	180	5.7%		4.3%
Ara	48	1.4%	26	0.8%		81.9%
Hebe	27	0.8%	23	0.7%		15.6%
Mkt. Repr. and Rest. Serv.	19	0.6%	18	0.6%		6.8%
Others & Cons. Adjustments	-4	-0.1%	-5	-0.1%		n.a.
Total JM	3,376	100%	3,187	100%		5.9%

Consolidated sales reached €3,376m, growing 5.9% versus the same quarter last year (+9.3% excluding negative currency impact).

All companies contributed to the solid performance of the Group maintaining a good sales momentum mainly driven by volume increase. The growth registered also reflects the positive calendar impact (leap year and Easter in first quarter of 2016).

In both Poland and Portugal, food retail sales continued to be promotionally driven, whilst food inflation in the market, despite positive trend, remained very low at +0.4% in Poland and negative in Portugal at -0.4%.

Biedronka maintained its promotional intensity along with the improved offer. The Company sales, in local currency, grew by 9.3% year on year, with LFL maintaining the momentum created in 2015 and reaching a sound 7.6% increase in the quarter. Calendar and a good Easter season for the Company also supported this performance.

Impacted by the zloty devaluation, sales in euros grew 5.1% to reach €2,282m.

Biedronka opened 26 stores in the first three months of the year, corresponding to 16 net additions.

Facing a tougher comparison after a remarkable performance in 2015, Pingo Doce maintained good volume growth that more than compensated the basket deflation, and drove LFL sales (excl. fuel) to reach 2.1% growth in the quarter. Sales grew 5.8% (+6.3% excluding fuel) reaching €817m.

Promotions and improved shopping experience will continue to be the focus of Pingo Doce in 2016.

Recheio kept its attractive commercial actions and fully benefited from its strong competitive positioning during Easter season. In an improving HoReCa environment, it delivered a LFL sales growth of 3.8% in the quarter.

Ara generated sales of €48m in the period. The Company opened 8 stores and is building its third distribution centre in Colombia which is planned to open towards the end of this year.

2. Results Analysis

(Million Euro)	Q1 16		Q1 15	
Net Sales and Services	3,376		3,187		5.9%
Goss Profit	711	21.1%	676	21.2%	5.1%
Operating Costs	-527	-15.6%	-511	-16.0%	3.3%
EBITDA	183	5.4%	166	5.2%	10.7%
Depreciation	-73	-2.2%	-73	-2.3%	0.8%
EBIT	110	3.3%	93	2.9%	18.5%
Financial Results	-4	-0.1%	-5	-0.2%	-20.9%
Gains in Joint Ventures and Associates	3	0.1%	3	0.1%	-18.6%
Non-Recurrent Items	-1	0.0%	0	0.0%	n.a.
EBT	108	3.2%	91	2.9%	18.3%
Taxes	-25	-0.7%	-22	-0.7%	13.3%
Net Profit	83	2.5%	69	2.2%	19.9%
Non Controlling Interests	-6	-0.2%	-4	-0.1%	27.9%
Net Profit Attributable to JM	77	2.3%	65	2.0%	19.3%
EPS (€)	0.12		0.10		19.3%

Net Consolidated Profit

Operating Profit

Group EBITDA grew 10.7% (+12.8% excluding the negative currency impact), reaching €183m. The respective margin was at 5.4% (5.2% in first quarter of 2015). This improvement was the combined result of good sales performance, strict cost management and Easter falling in first quarter of 2016.

Biedronka's EBITDA grew 10.4% (+14.9% in local currency) to €151m. The respective margin was of 6.6% (6.3% in first quarter of 2015). This strong delivery was driven by good sales performance and operating efficiency.

In Portugal, the Distribution businesses delivered EBITDA of €50m, +6.9% versus previous year. EBITDA margin was 5.0% (from the 4.9% in first quarter of 2015).

Depreciation of the Polish Zloty and Colombian Peso reduced the Euro value of the EBITDA losses in Ara and Hebe which reached €13m in the quarter.

Financial Result

Financial charges for the Group were of €4.0m, €1.1m below the same quarter last year, due to both a lower cost of debt and a lower level of average debt.

Net Result

Net Profit attributable to Jerónimo Martins amounted to €77.3m, 19.3% higher than in the same quarter of prior year.

3. Balance Sheet

(Million Euro)	Q1 16	2015	Q1 15
Net Goodwill	641	640	654
Net Fixed Assets	3,072	3,060	3,042
Total Working Capital	-1,926	-2,001	-1,745
Others	96	82	117
Invested Capital	1,883	1,780	2,067
Borrowings	536	658	821
Leasings	0	0	1
Accrued Interest	2	0	17
Marketable Sec. & Bank Deposits	-326	-471	-506
Net Debt	211	187	332
Non Controlling Interests	255	252	245
Share Capital	629	629	629
Reserves and Retained Earnings	787	712	861
Shareholders Funds	1,671	1,593	1,735
Gearing	12.7%	11.7%	19.1%

Net Debt was at €211m and Gearing stood at 12.7%.

Investment Programme

The Group Capex was €83.4m in the quarter, with Biedronka absorbing 50% of the total.

Cash Flow

(Million Euro)	Q1 16	Q1 15
EBITDA	183	166
Interest Payment	-3	-4
Other Financial Items	0	0
Income Tax	-38	-26
Funds From Operations	142	135
Capex Payment	-93	-94
Working Capital Movement	-67	-75
Others	0	0
Free Cash Flow	-17	-34

The Free Cash Flow in the period was €-17m, broadly in line with the same period in 2015.

4. Outlook 2016

In line with what we had anticipated, we continue to see a very competitive operating environment and low food inflation in both Poland and Portugal.

Benefiting from the momentum created by a good first quarter, we will continue to focus on top line performance in order to maximise profitability and cash generation.

In Poland, Biedronka will keep committed to being the first choice of food store for the Polish consumers. That goal will require a mind-set ever more focused on anticipating trends and growth opportunities without hampering the efficiency that is the base of our business model.

In Colombia, Ara will move forward with its expansion plan, now focused on validating the model in the recently opened region while preparing the entrance into the next one.

Losses in Ara and Hebe, at the EBITDA level, are expected to be below 2015 level (€55.5 million), excluding F/X.

Despite some socio-economic and political uncertainty, we are confident that our businesses will deliver their targets, focusing on top line growth. As such, in 2016, the Group expects to invest €550-650 million, with Biedronka absorbing c.45% of this value.

Lisbon, 27 April 2016

The Board of Directors

CONSOLIDATED MANAGEMENT REPORT APPENDIX II.

1. Sales Growth

	Total Sales Growth Q1 16	LFL Sales Growth Q1 16
Biedronka
Euro	5.1%
PLN	9.3%	7.6%
Pingo Doce	5.8%	1.9%
Ex-Fuel	6.3%	2.1%
Recheio	4.3%	3.8%

2. Stores Network

Number of Stores	2015	Openings Q1 16	Closings Q1 16	Q1 16	Q1 15
Biedronka	2,667	26	10	2,683	2,639
Pingo Doce	399	3	0	402	382
Recheio	41	0	0	41	41
Ara	142	8	0	150	37
Hebe	134	1	0	135	108

Sales Area (sqm)	2015	Openings	Closings/ Remodellings	Network
		Q1 16	Q1 16	Q1 16	Q1 15
Biedronka	1,721,897*	19,329	3,916	1,737,309	1,688,005
Pingo Doce	479,113	3,500	-51	482,664	462,115
Recheio	128,141	0	0	128,141	128,665
Ara	43,891	2,732	0	46,623	28,244
Hebe	30,955	225	0	31,180	27,056

* Restated figure from 1,717,944 published in 2015 FY.

3. EBITDA Margin Breakdown

(% of sales)	Q1 16	% total	Q1 15	% total
Biedronka	6.6%	83%	6.3%	83%
Pingo Doce	5.1%	23%	5.0%	23%
Others & Cons. Adjustments	n.a.	-10%	n.a.	-11%
JM Consolidated	5.4%	100%	5.2%	100%

4. Financial Costs Breakdown

(Million Euro)	Q1 16	Q1 15
Net Interest	-3	-6
Exchange Differences	0	2
Others	-1	-1
Financial Results	-4	-5

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 Quarter 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. CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT BY FUNCTIONS FOR THE QUARTERS ENDED AT 31 MARCH 2016 AND 2015

			Euro thousand
	Notes	2016	2015
Sales and services rendered	3	3,375,660	3,187,174
Cost of sales	4	(2,664,796)	(2,510,914)
Gross profit		710,864	676,260
Distribution costs	4	(545,272)	(528,455)
Administrative costs	4	(55,414)	(54,825)
Exceptional operating profits/losses	4	(940)	(41)
Operating profit		109,238	92,939
Net financial costs	5	(4,038)	(5,103)
Profit in joint ventures and associates		2,801	3,441
Gains/ losses in other investments		(47)	-
Profit before taxes		107,954	91,277
Income taxes	6	(25,142)	(22,188)
Profit before non-controlling interests		82,812	69,089
Attributable to:
Non-controlling interests		5,515	4,312
Jerónimo Martins Shareholders		77,297	64,777
Basic and diluted earnings per share - Euros	14	0.1230	0.1031

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

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE QUARTERS ENDED AT 31 MARCH 2016 AND 2015

			Euro thousand
	Notes	2016	2015
Net profit		82,812	69,089
Other comprehensive income:
Items that will not be reclassified to profit or loss
		-	-
Items that may be reclassified to profit or loss
Currency translation differences		(1,519)	38,249
Change in fair value of cash flow hedges	8	(375)	534
Change in fair value of hedging instruments on foreign operations	8	(1,349)	(9,964)
Change in fair value of available-for-sale financial assets		(74)	168
Related tax		292	455
		(3,025)	29,442
Other comprehensive income, net of income tax		(3,025)	29,442
Total comprehensive income		79,787	98,531
Attributable to:
Non-controlling interests		5,515	4,439
Jerónimo Martins Shareholders		74,272	94,092
Total comprehensive income		79,787	98,531

CONSOLIDATED BALANCE SHEET AT 31 MARCH 2016 AND DECEMBER 2015

			Euro thousand
	Notes	31 March 2016	31 December 2015
Assets
Tangible assets	7	2,904,642	2,890,113
Investment property	7	18,679	20,387
Intangible assets	7	807,626	809,796
Investments in joint ventures and associates	9	79,279	76,478
Available-for-sale financial assets		1,769	1,758
Trade debtors, accrued income and deferred costs		119,015	118,604
Derivative financial instruments	8	-	122
Deferred tax assets		58,488	56,245
Total non-current assets		3,989,498	3,973,503
Inventories		666,991	638,339
Biological assets		642	409
Income tax receivable		3,054	1,373
Trade debtors, accrued income and deferred costs		261,380	277,275
Derivative financial instruments	8	-	128
Cash and cash equivalents	11	295,396	441,688
Total current assets		1,227,463	1,359,212
Total assets		5,216,961	5,332,715
Shareholders' equity and liabilities
Share capital		629,293	629,293
Share premium		22,452	22,452
Own shares		(6,060)	(6,060)
Other reserves		(67,417)	(64,392)
Retained earnings		837,697	760,400
		1,415,965	1,341,693
Non-controlling interests		255,265	251,526
Total Shareholders' equity		1,671,230	1,593,219
Borrowings	15	316,026	534,422
Trade creditors, accrued costs and deferred income		807	813
Derivative financial instruments	8	253	-
Employee benefits	16	43,103	42,908
Provisions for risks and contingencies	16	84,279	83,947
Deferred tax liabilities		47,713	54,527
Total non-current liabilities		492,181	716,617
Borrowings	15	219,912	123,510
Trade creditors, accrued costs and deferred income		2,808,586	2,871,717
Derivative financial instruments	8	-	93
Income tax payable		25,052	27,559
Total current liabilities		3,053,550	3,022,879
Total Shareholders' equity and liabilities		5,216,961	5,332,715

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

Euro thousand

		Shareholders' equity attributable to Shareholders of Jerónimo Martins, SGPS, S.A.
	N o	Share	Share	Own		Other reserves		Retained		Non	Shareholders'
	t e s	capital	premium	shares	Cash flow hedge	Available-for sale financial assets	Currency translation reserves	earnings				Total	controlling interests	equity
Balance Sheet as at 31 December 2014		629,293	22,452	(6,060)	(2,548)	(157)	(64,562)	817,398	1,395,816	242,875	1,638,691
Equity changes in the 1st Quarter of 2015
Currency translation differences					(87)		38,941		38,854		38,854
Change in fair value of cash flow hedging					295				295	127	422
Change in fair value of hedging instruments on foreign operations							(9,964)		(9,964)		(9,964)
Change in fair value of available-for-sale financial investments						130			130		130
Other comprehensive income					208	130	28,977		29,315	127	29,442
Net profit								64,777	64,777	4,312	69,089
Total comprehensive income					208	130	28,977	64,777	94,092	4,439	98,531
Dividends										(1,913)	(1,913)
Balance Sheet as at 31 March 2015		629,293	22,452	(6,060)	(2,340)	(27)	(35,585)	882,175	1,489,908	245,401	1,735,309
Balance Sheet as at 31 December 2015		629,293	22,452	(6,060)	99	(230)	(64,261)	760,400	1,341,693	251,526	1,593,219
st Equity changes in the 1 Quarter of 2016
Currency translation differences							(1,315)		(1,315)		(1,315)
Change in fair value of cash flow hedging					(304)				(304)		(304)
Change in fair value of hedging instruments on foreign operations							(1,349)		(1,349)		(1,349)
Change in fair value of available-for-sale financial investments						(57)			(57)		(57)
Other comprehensive income					(304)	(57)	(2,664)		(3,025)		(3,025)
Net profit								77,297	77,297	5,515	82,812
Total comprehensive income for the year					(304)	(57)	(2,664)	77,297	74,272	5,515	79,787
Dividends	13.1									(1,776)	(1,776)
Balance Sheet as at 31 March 2016		629,293	22,452	(6,060)	(205)	(287)	(66,925)	837,697	1,415,965	255,265	1,671,230

CONSOLIDATED CASH FLOW STATEMENT FOR THE QUARTERS ENDED AT 31 MARCH 2016 AND 2015

			Euro thousand
	Notes	2016	2015
Operating activities
Cash received from customers		3,804,548	3,593,082
Cash paid to suppliers		(3,444,398)	(3,260,986)
Cash paid to employees		(244,912)	(241,341)
Cash generated from operations		115,238	90,755
Interest paid		(3,352)	(4,923)
Income taxes paid		(38,299)	(26,321)
Cash flow from operating activities		73,587	59,511
Cash flow from investment activities		(92,201)	(93,728)
Cash flow from financing activities		(125,376)	80,786
Net changes in cash and cash equivalents		(143,990)	46,569
Cash and cash equivalents changes
Cash and cash equivalents at the beginning of 1st Quarter		441,688	430,660
Net changes in cash and cash equivalents		(143,990)	46,569
Effect of currency translation differences		(2,302)	13,332
Cash and cash equivalents at the end of 1st Quarter	11	295,396	490,561

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 since 1989.

The Board of Directors approved these consolidated financial statements on 27 April 2016.

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 (EU).

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 2015 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 Consolidated Financial Statements chapter of the 2015 Annual Report, point 30 - Financial risks, the Group, as a result of its normal activity, is exposed to several risks which are monitored and mitigated throughout the year. During the first three months of 2016, 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

In 2015, the EU issued the following Regulations, which were adopted by the Group from 1 January 2016:

EU Regulation	IASB Standard or IFRIC Interpretation endorsed by EU	Issued in	Mandatory for financial years beginning on or after
Regulation no. 28/2015	Annual Improvements to IFRS's 2010–2012 Cycle: IFRS 2 Share-Based Payment, IFRS 3 Business Combinations, IFRS 8 Operating Segments, IFRS 13 Fair Value Measurement, IAS 16 Property, Plant and Equipment, IAS 24 Related Party Disclosures and IAS 38 Intangible Assets (Amendment)	December 2013	1 February 2015
Regulation no. 29/2015	IAS 19 Employee Benefits: Defined Benefit Plans - Employee Contributions (Amendment)	November 2013	1 February 2015
Regulation no. 2113/2015	IAS 16 Property, Plant and Equipment and IAS 41 Agriculture: Bearer Plants (amendment)	June 2014	1 January 2016
Regulation no. 2173/2015	IFRS 11 Joint Arrangements: Accounting for Acquisitions of Interests in Joint Operations (amendment)	May 2014	1 January 2016
Regulation no. 2231/2015	IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets: Clarification of Acceptable Methods of Depreciation and Amortisation (amendment)	May 2014	1 January 2016
Regulation no. 2343/2015	Annual Improvements to IFRS's 2012–2014 Cycle: IFRS 5 Non current Assets Held for Sale and Discontinued Operations, IFRS 7 Financial Instruments: Disclosures, IAS 19 Employee Benefits and IAS 34 Interim Financial Reporting (amendment)	September 2014	1 January 2016
Regulation no. 2406/2015	IAS 1 Presentation of Financial Statements: Disclosure Initiative (amendment)	December 2014	1 January 2016
Regulation no. 2441/2015	IAS 27 Separate Financial Statements: Equity Method in Separate Financial Statements (amendment)	August 2014	1 January 2016

The Group adopted these amendments, with no significant impact on the Consolidated Financial Statements.

2.2 New standards, amendments and interpretations issued by IASB and IFRIC, but not yet endorsed by EU

IASB issued in 2016 the following standards and amendments that are still pending endorsement by the EU:

IASB Standard or IFRIC Interpretation	Issued in	Expected application for financial years beginning on or after
IFRS 16 Leases (new)	January 2016	1 January 2019
IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses (amendment)	January 2016	1 January 2017
IAS 7 Disclosure Initiative (amendment)	January 2016	1 January 2017

The new standard IFRS 16 eliminates the classification of leases as either operating leases or finance leases for lessees, as is required by IAS 17 and, instead, introduces a single accounting model, very similar to the current treatment that is given to finance leases in lessee accounts.

This single accounting model provides for the lessee the recognition of: i) assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value, regardless of the lease term; and ii) depreciation of lease assets separately from interest on lease liabilities in the Income Statement.

Management is assessing the impacts that will result from adopting this new standard, and expects that its adoption will have a significant impact on the Group's Consolidated Financial Statements, as result of the capitalisation of the assets which are currently under operating leases and recording their respective liabilities.

Management is also currently evaluating the impact of adopting the amendments to standards already in place, and do not expect any significant impact on the Group's Consolidated Financial Statements.

2.4. 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 2016	Average rate for the period
Polish Zloty (PLN)	4.2576	4.3615
Swiss Franc (CHF)	1,0931	-
Colombian Peso (COP)	3,440.9500	3,584.5100

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 low materiality they are not reported separately.

Business segments:

Portugal Distribution: comprises the business unit of JMR (Pingo Doce supermarkets) and the wholesale business unit Recheio;
Poland Distribution: the business unit using the brand Biedronka;
Others, eliminations and adjustments: includes i) the business units with reduced materiality (Marketing Services and Representations, Restaurants, Agro Business in Portugal, Health and Beauty Retail in Poland, Retail business in Colombia), ii) the Holding companies and iii) 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 segment at March 2016 and 2015

	Portugal Distribution		Poland Distribution		Others, eliminations and adjustments		Total JM consolidated
	2016	2015	2016	2015	2016	2015	2016	2015
Net sales and services	1,005,824		953,423 2,281,600	2,171,817	88,236			61,934 3,375,660 3,187,174
Inter-segments	48	94	376	394	(424)	(488)
External customers	1,005,776	953,329	2,281,224	2,171,423	88,660		62,422 3,375,660	3,187,174
Operational cash-flow (EBITDA)	50,331	47,065	151,329		137,073 (18,233)	(18,477)	183,427	165,661
Depreciations and amortisations	(27,613)	(26,650)	(42,036)	(42,701)	(3,600)	(3,330)	(73,249)	(72,681)
Operational result (EBIT)	22,718	20,415	109,293		94,372 (21,833)	(21,807)	110,178	92,980
Exceptional operating profits/losses							(940)	(41)
Financial results							(1,284)	(1,662)
Income tax							(25,142)	(22,188)
Net result attributable to JM							77,297	64,777
Total assets (1)			2,032,219 2,035,589 2,755,333	2,920,437 429,409				376,689 5,216,961 5,332,715
Total liabilities (1)			1,471,910 1,470,666 2,165,964	2,126,974 (92,143)				141,856 3,545,731 3,739,496
Investments in fixed assets	34,132	21,058	41,824	56,458	7,475	11,682	83,431	89,198

(1) The comparable amounts of total assets and liabilities are reported to 31 December 2015

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

	March 2016	March 2015
EBIT	110,178	92,980
Exceptional operating profits/losses	(940)	(41)
Operational result	109,238	92,939

4 Gross profit and operating costs

	March 2016	March 2015
Net sales and services	3,375,660	3,187,174
Net cost of products sold	(2,661,423)	(2,502,298)
Net cash discount and interest paid to suppliers	3,711	(2,274)
Electronic payment commissions	(5,596)	(4,544)
Other supplementary costs	(1,488)	(1,798)
Cost of sales	(2,664,796)	(2,510,914)
Goss profit	710,864	676,260
Supplies and services	(125,499)	(120,038)
Advertising costs	(18,861)	(17,611)
Rents	(81,334)	(81,184)
Staff costs	(264,424)	(252,576)
Depreciation and amortisation	(72,675)	(72,132)
Profit/loss with tangible and intangible assets	(1,122)	(589)
Transportation costs	(34,148)	(35,083)
Other operational profit/loss	(2,623)	(4,067)
Distribution and administrative costs	(600,686)	(583,280)
Legal contingencies	(1)	(160)
Losses from organizational restructuring programmes	(939)	(488)
Assets write-offs and gains/losses in sale of tangible assets	-	397
Others	-	210
Exceptional operating profits/losses	(940)	(41)
Operating profit	109,238	92,939

5 Net financial costs

	March 2016	March 2015
Interest expense	(3,450)	(6,426)
Interest received	469	561
Net foreign exchange	(262)	1,941
Other financial costs and gains	(795)	(1,144)
Fair value of financial investments held for trade:
Derivative instruments	-	(35)
	(4,038)	(5,103)

The interest expense heading includes the interest regarding loans measured at amortised cost, as well as interest on cash flow hedging instruments (note 8).

Other financial costs and gains include costs with debt issued by the Group, recognised in results through effective interest method.

6 Income tax recognised in the income statement

	March 2016	March 2015
Current income tax
Current tax of the year	(35,589)	(31,011)
Adjustment to prior year estimation	1,321	185
	(34,268)	(30,826)
Deferred tax
Temporary differences created and reversed	9,939	8,535
Change to the recoverable amount of tax losses and temporary differences from previous years	(1,174)	(255)
	8,765	8,280
Other gains/losses related to taxes
Impact of changes in estimates for tax litigations	361	358
	361	358
Total income taxes	(25,142)	(22,188)

7 Fixed assets, intangible assets and investment property

	Tangible assets	Investment property	Intangible assets	Total
Net value at 31 December 2015	2,890,113	20,387	809,796	3,720,296
Foreign exchange differences	2,857	-	620	3,477
Increases	82,726	-	705	83,431
Disposals and write-offs	(1,282)	(1,694)	-	(2,976)
Depreciation and impairment losses	(69,772)	-	(3,495)	(73,267)
Fair value changes	-	(14)	-	(14)
Net value at 31 March 2016	2,904,642	18,679	807,626	3,730,947

The difference to total of amortisations stated in note 4, relates mainly to the production activities that were attributable to the cost of the goods sold.

8 Derivative financial instruments

	March 2016				December 2015
	Notional	Assets		Liabilities		Notional	Assets		Liabilities
		Current	Non current	Current	Non current		Current	Non current	Current	Non current
Derivatives held for trading
Currency forwards (PLN)	17 million PLN	-	-	0	-
Cash flow hedging derivatives
Interest rate swap (PLN)	209 million PLN	-	-	-	253	212 million PLN	-	122	-	-
Investments in foreign entities hedging derivatives
Currency forwards (PLN)		-	-	-	-	338 million PLN	128	-	93	-
Total derivatives held for trading		-	-	0	-		-	-	-	-
Total hedging derivatives		-	-	-	253		128	122	93	-
Total assets/liabilities derivatives		-	-	0	253		128	122	93	-

9 Investments in joint ventures and associates

During the 1st Quarter of 2016, the movement under this heading was as follows:

	Joint ventures		Associates		Total
	March 2016	December 2015	March 2016	December 2015	March 2016	December 2015
Opening balance	75,789	73,537	689	735	76,478	74,272
Equity method:
Net result	2,746	16,450	55	158	2,801	16,608
Dividends and other income received	-	(14,102)	-	(204)	-	(14,306)
Other comprehensive income	-	(96)	-	-	-	(96)
Closing balance	78,535	75,789	744	689	79,279	76,478

10 Trade debtors, accrued income and deferred costs

	March 2016	December 2015
Non-current
Other debtors	81,321	80,849
Collateral deposits associated to financial debt	34,367	34,367
Deferred costs	3,327	3,388
	119,015	118,604
Current
Commercial customers	54,575	53,501
Other debtors	104,300	87,770
Other taxes receivable	11,102	11,754
Accrued income and deferred costs	91,403	124,250
	261,380	277,275

Non-current debtors are mainly related to additional corporate income tax liquidation as well as pre-paid corporate income tax, which the Group has already contested and made a legal claim for reimbursement.

The debtor's amount is registered at the recoverable value. The Group constitutes provisions for impairment losses whenever there are signs of uncollectable amounts.

11 Cash and cash equivalents

	March 2016	December 2015
Bank deposits	184,063	129,946
Short-term investments	107,711	306,932
Cash and cash equivalents	3,622	4,810
	295,396	441,688

12 Cash generated from operations

	March 2016	March 2015
Net results	77,297	64,777
Adjustments for:
Non-controlling interests	5,515	4,312
Income tax	25,142	22,188
Depreciations and amortisations	73,249	72,681
Provisions and other operational gains and losses	4,894	827
Net financial costs	4,038	5,103
Profit/Losses in associated companies	(2,801)	(3,441)
Profit/Losses in other investments	47	-
Profit/Losses on tangible and intangible assets	1,125	(18)
	188,506	166,429
Changes in working capital:
Inventories	(31,923)	(83,125)
Trade debtors, accrued income and deferred costs	(2,167)	(1,708)
Trade creditors, accrued costs and deferred income	(39,178)	9,159
	115,238	90,755

13 Capital and reserves

13.1 Dividends

Dividends in the amount of EUR 1,776 thousand were distributed and paid to non-controlling interests in the Group companies.

14 Basic and diluted earnings per share

	March 2016	March 2015
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	77,297	64,777
Basic and diluted earnings per share – Euros	0.1230	0.1031

15 Borrowings

In the first quarter of 2016, JMH issued commercial paper in an average amount of EUR 36,000 thousand, through Commercial Paper Programmes that it has negotiated. These emissions were held for a maximum period of one month and were fully repaid by the end of the quarter.

JMR issued commercial paper in the average amount of EUR 37,000 thousand, through Commercial Paper Programmes that it has negotiated. These emissions were held for a maximum period of three weeks and were fully repaid by the end of the quarter.

Jeronimo Martins Polska used PLN 100,000 thousand for the period of one month, under the credit facility renewed last December.

Jerónimo Martins Colombia renegotiated credit lines which already held, increasing the limits of the short term credit lines in COP 50.000.000 thousand.

For the Portuguese Companies, the Group uses grouped credit lines, which means that the maximum amount approved by a financial entity can be used simultaneously by more than one company. The amount of credit lines which are not being used, amount to EUR 147,000 thousand (2015: EUR 140,000 thousand).

15.1 Current and non-current loans

	March 2016	December 2015
Non-current loans
Bank loans	165,940	384,291
Bond loans	150,000	150,000
Financial lease liabilities	86	131
	316,026	534,422
Current loans
Bank overdrafts	1,340	8,831
Bank loans	218,397	114,491
Financial lease liabilities	175	188
	219,912	123,510

15.2 Financial debt

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

	March 2016	December 2015
Non-current loans (note 15.1)	316,026	534,422
Current loans (note 15.1)	219,912	123,510
Derivative financial instruments (note 8)	253	(157)
Interest on accruals and deferrals	1,405	473
Bank deposits (note 11)	(184,063)	(129,946)
Short-term investments (note 11)	(107,711)	(306,932)
Collateral deposits associated to financial debt (note 10)	(34,367)	(34,367)
	211,455	187,003

16 Provisions and employee benefits responsibilities

	Risks and contingencies	Employee benefits
Balance at 1 January	83,947	42,908
Set up, reinforced and transfers	794	701
Unused and reversed	(394)	-
Foreign exchange differences	3	-
Used	(71)	(506)
Balance at 31 March	84,279	43,103

17 Trade creditors, accrued costs and deferred income

	March 2016	December 2015
Non-current
Other non-commercial creditors	3	1
Accrued costs and deferred income	804	812
	807	813
Current
Other commercial creditors	2,272,422	2,359,812
Other non-commercial creditors	172,428	182,184
Other taxes payables	89,851	76,024
Accrued costs and deferred income	273,885	253,697
	2,808,586	2,871,717

18 Contingencies

Taxation of Suspended Internal Results/Book Gains

The 2016 Portuguese State Budget law includes a transitory rule that could have a material impact for our Group and, in particular, for the JMR and Recheio subsidiaries.

According to this law 1/4 (one quarter) of all the book gains derived from internal transactions (i.e. transactions between affiliated companies within the same fiscal group) - that under the previous legal framework were not taxable unless (i) a transaction with third parties took place or (ii) the tax group was dissolved – are to be added to the 2016 collectable income and subject to Corporate Income Tax, with an advanced payment to take place next July.

In the late nineties JMR and Recheio and its respective subsidiaries went through a significant restructuring process following several acquisitions and the decision to reorganise the Group's assets. The transactions between the several companies within the JMR and Recheio Groups were made according to the existing legal framework and in line with best practices (arm's length at market value) having generated suspended internal book gains.

Considering that the transactions were all internal, these book gains are obviously eliminated in the consolidation process while still being reflected in the individual accounts.

Based on the initial assessment of our legal and fiscal advisors, we firmly believe that there is sufficient ground to oppose the said rule. Therefore, we are not incorporating the considered amount that results from the application of this 2016 transitory rule - c. 50 million euros in taxes – in Jerónimo Martins' first quarter results. Following the contingencies mentioned in the 2015 Annual Report, changes occurred on the headings f) and j):

f) The Portuguese Tax Authorities carried out some corrections of VAT rates applied to certain goods sold by some Group Companies. With these corrections the total amount of assessments for the years 2005 to 2013 in Pingo Doce, Feira Nova and Recheio amounted to EUR 1,814 thousand, EUR 1,300 thousand and EUR 551 thousand, respectively. Considering that the Tax Authorities have no grounds to request this payment, these assessments have been challenged;
j) The Food and Veterinary Department (Direcção-Geral de Alimentação e Veterinária) claimed from Pingo Doce, Recheio and Hussel an amount of EUR 8,654 thousand, EUR 568 thousand and EUR 19 thousand, respectively, in respect of the Food Safety Tax (Taxa de Segurança Alimentar Mais – TSAM) assessed for the years 2012 to 2015. The values at stake have been challenged in Court, since it understands that this tax is not due, namely on the grounds of the unconstitutional nature of the Statute that approved the TSAM. However, in one of the processes the court decided that the Food Safety Tax is not unconstitutional.

19 Related parties

56.14% of the Group is owned by Sociedade Francisco Manuel dos Santos, B.V. and no transactions occurred between this Company and any company of the Group in the first Quarter of 2016, neither were there any amounts payable or receivable between them on 31 March 2016.

	Sales and services rendered			Stocks purchased and services supplied
	March 2016	March 2015	March 2016	March 2015
Joint ventures	2	2	23,627	24,107
Other related parties (*)	19	24	10	9

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
	March 2016	December 2015	March 2016	December 2015
Joint ventures	307	232	16,933	5,556
Other related parties (*)	11	54	1	9

(*) 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 provisions for doubtful debts and no costs were recognised during the year related with bad debts or doubtful debts with these related parties.

20 Events after the balance sheet date

In April 2016 JMH received an offer from Sociedade Francisco Manuel dos Santos B.V. to acquire 100% of its wholly owned subsidiary Monterroio – Industry & Investments B.V. (Monterroio), for a total consideration of 285 million euros.

Monterroio is the Company's sub-holding for manufacturing and services businesses comprising its subsidiaries JMD – Distribuição de Produtos de Consumo, Lda. and Jerónimo Martins – Restauração e Serviços, S.A. as well as the stakes in Unilever Jerónimo Martins, Lda. (45%), Gallo Worldwide, Lda. (45%), Hussel Ibéria – Chocolates e Confeitaria, S.A. (51%) and Perfumes e Cosméticos Puig Portugal – Distribuidora, S.A. (27.545%).

The Board of Directors will analyse the offer and assess the interest of the Company in considering a possible transaction.