Jeronimo Martins — Interim / Quarterly Report 2017

Nov 24, 2017

Consolidated Report & Accounts

Relatório e Contas Consolidado First Nine Months 2017

Primeiros Nove Meses de 2017

Não Auditado

Jerónimo Martins, SGPS, SA Rua Actor António Silva, 7, 1649-033 Lisboa • Portugal www.jeronimomartins.com

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	6
4. Outlook for 2017	7
II – Consolidated Management Report Appendix
1. Sales Evolution	8
2. Stores Network	8
3. EBITDA and EBITDA Margin Breakdown	8
4. Financial Costs Breakdown	8
5. Definitions	9
6. P&L - Reconciliation Note	10
7. Balance Sheet - Reconciliation Note	10
8. Cash Flow – Reconciliation Note	11
9. Net Profit on a Comparable Basis	11
10. Information Regarding Individual Financial Statements	11

III – Consolidated Financial Statements

1. Financial Statements	12
2. Notes to the Financial Statements	16

I - CONSOLIDATED MANAGEMENT REPORT

Message from the Chairman and CEO

Pedro Soares dos Santos

"After nine months of a demanding and challenging year and as result of the absolute priority given to top line growth, all our banners reinforced market shares, a special highlight being Biedronka's strong performance. The strict management of the permanent assortment together with the promotional and in&out campaigns' dynamics allowed Biedronka to strengthen its leadership in the food retail sector in Poland.

In Portugal, Pingo Doce maintained its robust stance, despite being impacted by the deflation registered in fruit and vegetables. The third quarter was also positive for Recheio, which captured the opportunities and advantages of a revitalized HoReCa channel.

The good sales performance of our main banners reflects the investment in the attractiveness of the commercial offer and store environment, in addition to the commitment and the delivery of our operational teams. In the context of rising minimum wages in Poland and Portugal, and following what was done in Biedronka, Pingo Doce also initiated a review of its compensation package.

In Colombia, Ara continues to adjust its model and is implementing an ambitious expansion plan, with a particular focus on the opportunities and challenges of the Bogota region.

After three quarters of solid performance, I reaffirm both our confidence in our business's ability to deliver a positive year, as well as our commitment to a growth-strategy that combines necessary measures to strengthen market leadership in the short term with investments in fixed assets and margin to ensure the medium to long-term business solidity."

1. Sales Analysis

(Million Euro)		9M 17		9M 16	D %		Q3 17			Q3 16	D %
		% total		% total	w/o FX	Euro		% total		% total	w/o FX	Euro
Biedronka	8,103	67.9%	7,163	66.7%	10.7%	13.1%	2,798	67.1% 2,485		65.7%	10.5%	12.6%
Pingo Doce	2,692	22.6%	2,628	24.5%		2.4%	954	22.9%	941	24.9%		1.3%
Recheio	713	6.0%	663	6.2%		7.6%	271	6.5%	256	6.8%		5.9%
Ara	289	2.4%	162	1.5%	71.4%	77.8%	104	2.5%	61	1.6%	81.6%	71.0%
Hebe	115	1.0%	85	0.8%	33.1%	36.0%	41	1.0%	30	0.8%	33.5%	36.1%
Others & Cons. Adjustments	14	0.1%	37	0.3%		n.a.	5	0.1%	6	0.2%		n.a.
Total JM	11,926		100% 10,738	100%		11.1%	4,172		100% 3,780	100%		10.4%

Group sales reached €11.9 bn in the nine months of 2017, 11.1% above the same period in the previous year (+9.3% at constant exchange rates).

Group like-for-like (LFL) sales growth was at 6.6% in the nine months, driven by the strong performance of both Biedronka and Recheio and a resilient delivery of Pingo Doce.

Sales (Million Euro)

In Poland, the consumption environment remained favourable while competitive landscape continued to be intense and promotion-driven. Food inflation in the country was slightly ahead of 4.5% in third quarter (+3.8% in the nine months).

Biedronka maintained its sales-focused strategy using promotions, advertising and the loyalty card as key instruments to continue delivering a strong LFL sales growth that was at 8.9% in third quarter. Total sales in the same period grew 12.6% (+10.5% in local currency), reaching €2.8 bn.

In the nine months period, LFL growth was at 9.0%, driving total sales in euros to increase 13.1% (+10.7% in local currency) to reach €8.1 bn.

The banner opened 46 stores (31 net additions) in the nine months and refurbished a total of 150 stores.

Hebe delivered sales of €115 mn, 36% up on previous year (+33.1% at constant exchange rate), having opened a total of 14 stores in the nine months. At the end of September, the network was 166 locations.

In Portugal, the Food Retail sector, remained highly competitive while deflation in certain key categories added new challenges leading overall food inflation in third quarter to be reduced to 0.6% (+1.4% in nine months).

Pingo Doce in third quarter faced the toughest year-on-year comparable which together with the basket deflation registered, led to a LFL (excl. fuel) of -0.9%. Total sales grew, in the quarter, by 1.3% and market share was reinforced.

In the nine months, total sales grew 2.4% to €2.7 bn with a LFL (excl. fuel) of 0.3%.

By the end of September, 19 Pingo Doce stores had been refurbished and 7 new locations (6 net) added to the network.

Recheio continued to invest to maintain the good sales momentum in the context of favourable tourist activity. It delivered a 6.0% LFL sales increase (+4.9% in third quarter), driving sales in the nine months to €713 mn, 7.6% more than in the same period in the previous year.

In Colombia, food inflation remained consistently low in the nine months, softening a bit more in third quarter to 1.4% (2.7% in nine months). Consumer sentiment which is still negative has been improving since April.

Ara achieved sales of €289 mn, 77.8% ahead of previous year (+71.4% at constant exchange rate). In the nine months the banner opened 92 stores, running a total network of 312 locations by the end of September.

(Million Euro) D D Net Sales and Services 11,926 10,738 11.1% 4,172 3,780 10.4% Gross Profit 2,527 21.2% 2,275 21.2% 11.1% 893 21.4% 806 21.3% 10.9% Operating Costs -1,858 -15.6% -1,648 -15.3% 12.8% -640 -15.3% -567 -15.0% 12.9% EBITDA 669 5.6% 627 5.8% 6.7% 253 6.1% 239 6.3% 6.0% Depreciation -242 -2.0% -220 -2.0% 10.0% -82 -2.0% -74 -2.0% 10.6% EBIT 428 3.6% 407 3.8% 5.0% 172 4.1% 165 4.4% 3.9% Net Financial Costs - 9 -0.1% -12 -0.1% -27.8% - 5 -0.1% - 2 0.0% 186.4% Gains in Joint Ventures and Associates ⁰ 0.0% 1 0 0.1% n.a. ⁰ 0.0% ³ 0.1% n.a. Non-Recurrent Items -11 -0.1% ²⁰¹ 1.9% n.a. - 4 -0.1% ²⁰⁴ 5.4% n.a. EBT 407 3.4% 606 5.6% -32.7% 163 3.9% 370 9.8% -56.0% Income Tax -101 -0.8% -86 -0.8% 18.3% -39 -0.9% -32 -0.8% 22.1% Net Profit 306 2.6% 520 4.8% -41.1% 124 3.0% 338 8.9% -63.4% Non Controlling Interests -21 -0.2% -19 -0.2% 12.8% -11 -0.3% - 8 -0.2% 35.3% Net Profit Attributable to JM 285 2.4% 502 4.7% -43.1% 112 2.7% 330 8.7% -65.9% EPS (€) 0.45 0.80 -43.1% 0.18 0.52 -65.9% EPS without non-recurrent (€) 0.46 0.46 0.6% 0.18 0.19 -1.5% 9M 17 9M 16 Q3 17 Q3 16

2. Results Analysis

Operating Profit

Group EBITDA came at €669 mn in the nine months period, a 6.7% growth on previous year (+5.1% at constant exchange rates).

EBITDA from established businesses (excluding Ara and Hebe) increased 9.7%.

Biedronka's EBITDA was €583mn, up 13.9% when compared to nine months of 2016 (+11.5% at constant exchange rate). EBITDA margin was at 7.2%, broadly in line with the previous year.

This solid EBITDA performance is the direct result of the focus on sales and of the strong LFL momentum, that compensated for labour costs increase.

Pingo Doce and Recheio registered a combined EBITDA of €177 mn, 1% above nine months of 2016. The respective EBITDA margin for the distribution businesses in Portugal was 5.2%. The decline from previous year margin reflects, mainly, the pressure from the softer third quarter LFL at Pingo Doce.

Ara and Hebe, together, recorded losses of €67 mn at the EBITDA level, with Ara accounting for c.85% of the total. Ara's losses evolution, in line with the plan, reflects the acceleration in investment on expansion in Colombia.

Financial Results

Net financial costs reached €9 mn, reflecting the increase of loans in the local currencies of the respective businesses' geographies, in line with the Group's financial and risk management policies.

Non-Recurrent Items

Non-recurrent items, at -€11 mn in the nine months, include, among other, the write-off of certain assets related to the logistic re-dimensioning in Portugal.

Net Results

Group net profit resulted in €285 mn, 7.1%¹ above nine months of 2016, with the higher investment in Colombia being more than compensated by the strong delivery of our established businesses.

¹ Excluding in the nine months of 2016 Monterroio contribution and associated capital gain

3. Balance sheet

(Million Euro)	9M 17	2016	9M 16
Net Goodwill	637	630	636
Net Fixed Assets	3,375	3,180	3,095
Total Working Capital	-2,198	-2,201	-2,004
Others	68	46	11
Invested Capital	1,883	1,656	1,739
Total Borrowings	494	335	326
Leasings	6	4	0
Accrued Interest	1	0	1
Marketable Sec. & Bank Deposits	-540	-674	-507
Net Debt	-39	-335	-179
Non Controlling Interests	258	253	254
Share Capital	629	629	629
Reserves and Retained Earnings	1,034	1,109	1,035
Shareholders Funds	1,921	1,991	1,918
Gearing	-2.0%	-16.8%	-9.3%

Group net debt, was negative at €39 mn by the end of September with gearing staying at -2%.

Cash Flow

(Million Euro)	9M 17	9M 16
EBITDA	669	627
Interest Payment	-11	-11
Other Financial Items	0	3
Income Tax	-123	-88
Funds From Operations	536	531
Capex Payment	-468	-291
Change in Working Capital	19	20
Others*	- 4	296
Free Cash Flow	83	556

* Includes in 9M16 €305 million from the proceds of Monterroio sale

Cash flow in the nine months was €83 mn, mainly reflecting the expected evolution of the working capital and the step up in capex.

Investment

(Million Euro)	9M 17	Weight	9M 16	Weight
Biedronka	174	41.2%	126	42.6%
Distribution Portugal	82	19.4%	115	39.0%
Ara	112	26.6%	34	11.6%
Others	54	12.8%	20	6.8%
Total CAPEX	422	100%	295	100%

Group capex was at €422 mn of which c.40% invested in Biedronka and c.27% in Ara.

4. Outlook for 2017

In the fourth quarter we will continue to focus on sales and on further strengthening market positions in all countries where we operate.

For Biedronka, which will face the toughest comparable quarter in the year, the last three months will be dedicated to drive sales and completing the investment programme, including the opening of a distribution centre, around 70 new stores and the remodeling of c.70 units.

The context in Poland is expected to remain challenging, with intense competition and pressure on costs, particularly those related to labour. However, Biedronka remains confident that it will maintain a relatively stable EBITDA margin for the year, focusing on sales as the main driver of returns.

Pingo Doce and Recheio will also maintain sales as their priority. In Pingo Doce, the process of revising and adjusting the remuneration packages currently in progress will, in the fourth quarter, add additional pressure on the EBITDA margin that is expected to be partially offset by the good performance of the Company.

In Colombia, in the last quarter of the year we will add c.60 stores to Ara's network, which is advancing with the construction of its logistics infrastructure and an ambitious recruitment and training program to support the expansion effort.

In line with expectations, losses generated by Ara and Hebe at EBITDA level are expected to increase by c.30% when compared to the previous year (at constant exchange rates).

The execution of the capex program for the year at around €700 million is one of the essential conditions to enable our businesses to continue strengthening their market positions and to support the Group's capacity to continue to grow.

Lisbon, 24 October 2017

The Board of Directors

II – CONSOLIDATED MANAGEMENT REPORT APPENDIX

1. Sales Evolution

	Total Sales Growth						LFL Sales Growth
	Q1 17	Q2 17	H1 17	Q3 17	9M 17	Q1 17	Q2 17	H1 17	Q3 17	9M 17
Biedronka
Euro	10.8%	15.9%	13.4%	12.6%	13.1%
PLN	9.7%	11.8%	10.8%	10.5%	10.7%	8.4%	9.5%	9.0%	8.9%	9.0%
Pingo Doce	0.8%	5.2%	3.1%	1.3%	2.4%	-1.1%	3.0%	1.0%	-1.0%	0.3%
Ex-Fuel	0.6%	5.3%	3.0%	1.5%	2.5%	-1.4%	3.1%	0.9%	-0.9%	0.3%
Recheio	7.2%	9.9%	8.6%	5.9%	7.6%	5.2%	8.1%	6.8%	4.9%	6.0%

2. Stores Network

Number of Stores	2016		Openings		Closings	9M 17	9M 16
		Q1 17	Q2 17	Q3 17	9M 17
Biedronka	2,722	11	18	17	15	2,753	2,700
Pingo Doce	413	2	3	2	1	419	405
Recheio	42	0	1	0	0	43	42
Ara	221	23	26	43	1	312	183
Hebe	153	7	1	6	1	166	141

Sales Area (sqm)	2016		Openings		Closings/ Remodellings	9M 17	9M 16
		Q1 17	Q2 17	Q3 17	9M 17
Biedronka	1,768,293	7,442	12,089	12,361	-2,422	1,802,607	1,751,374
Pingo Doce	493,089	2,242	4,051	2,000	1,307	500,075	485,952
Recheio	130,597	0	1,399	0	- 1	131,997	130,837
Ara *	71,263	8,342	10,284	15,557	217	105,229	57,710
Hebe	35,479	1,815	222	1,485	0	39,001	32,369

* Restated: figures published in 2016 and Q1 17

3. EBITDA and EBITDA Margin Breakdown

(Million Euro)	9M 17	Mg	9M 16	Mg
Biedronka	583.3	7.2%	512.0	7.1%
Distribution Portugal	176.6	5.2%	174.8	5.3%
Others & Cons. Adjustments	-90.7	n.a.	-59.9	n.a.
JM Consolidated	669.2	5.6%	626.9	5.8%

4. Financial Costs Breakdown

(Million Euro)	9M 17	9M 16	D
Net Interest	-9	-9	-1%
Exchange Differences	2	-1	n.a.
Others	-3	-2	10%
Financial Results	-9	-12	-28%

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).

Gearing: Net Debt / Shareholder Funds.

6. P&L – Reconciliation Note

(Following ESMA guidelines on Alternative Performance Measures from October 2015)

Income Statement in page 4	Income Statement by Functions in the Consolidated Report & Accounts - First Nine Months 2017 Results
Net Sales and Services	Net sales and services
Gross Profit	Gross profit
Operating Costs	Includes headings of Distribution costs; Administrative costs; Other operating costs and excludes Depreciations of €-241.5mn
EBITDA
Depreciation	Value reflected in the Segments reporting note.
EBIT
Net Financial Costs	Net financial costs
Gains in Joint Ventures and Associates	Gains (Losses) in joint ventures and associates
Non-Recurrent Items	Includes headings of Exceptional operating profits/losses; Gains in disposal of business and Gains/Losses in other investments
EBT
Income Tax	Income tax
Net Profit
Non-Controlling Interests	Non-controlling interests

Net Profit attributable to JM

7. Balance Sheet - Reconciliation Note

(Following ESMA guidelines on Alternative Performance Measures from October 2015)

Balance Sheet in page 6	Balance Sheet in the Consolidated Report & Accounts - First Nine Months 2017 Results
Net Goodwill	Included in the heading of Intangible assets
Net Fixed Assets	Includes the headings Tangible and intangible assets excluding the Net goodwill value (€637.3mn)
Total Working Capital	Includes the headings Current trade debtors, accrued income and deferred costs; Inventories; Biological assets; Trade creditors, accrued costs and deferred income; Employee benefits; the value of €3.9mn Cash and cash equivalents (note - Cash and cash equivalents) and the value of €-7.4mn related to 'Others' due to its operational nature. Excludes the value of €-1.7mn related to interest accruals and deferrals (note - Financial debt)
Others	Includes the headings Investment property; Investments in joint ventures and associates; Available-for-sale financial assets; Non-current trade debtors, accrued income and deferred costs; Deferred tax assets and liabilities; Income tax receivable and payable; and Provisions for risks and contingencies. Excludes the value of €34.4mn related to Collateral deposits associated to financial debt (note - Trade debtors, accrued income and deferred costs); and also the value of €-7.4mn related to others due to its operational nature
Invested Capital
Total Borrowings	Includes the heading Borrowings excluding leasings
Leasings	Value reflected in note - Borrowings
Accrued Interest & Hedging	Includes the heading Derivative financial instruments and the value of €- 1.7mn related to Interest accruals and deferrals (value reflected in note - Financial debt)
Marketable Sec. & Bank Deposits	Includes the heading Cash and cash equivalents and the value of €34.4mn related to Collateral deposits associated to financial debt (reflected in Trade debtors note) and excludes the value of €3.9mn in Cash and cash equivalents (reflected in note - Cash and cash equivalents)
Net debt
Non-Controlling Interests	Non-controlling interests
Share Capital	Share capital
Reserves and Retained Earnings	Includes the heading Share premium, Own shares, Other reserves and Retained earnings

Shareholders' Funds

8. Cash Flow - Reconciliation Note

(Following ESMA guidelines on Alternative Performance Measures from October 2015)

Cash Flow in page 6	Cash Flow in the Consolidated Report & Accounts - First Nine Months 2017 Results
EBITDA	Included in the heading of Cash generated from operations
Interest Payment	Includes the headings of Interest paid and Interest received
Other Financial Items	Dividends received
Income Tax	Income tax paid
Funds from Operations
Capex Payment	Includes the headings Disposal of tangible assets; Disposal of Intangible assets; Disposal of financial assets and investment property; Acquisition of tangible assets; Acquisition of intangible assets; Acquisition of financial assets and investment property
Change in Working Capital	Included in the heading of Cash generated from operations
Others	Includes the headings Disposal of business, being the remaining amount Included in the heading Cash generated from operations
Free Cash Flow

9. Net profit on a Comparable Basis

(Million Euro)	9M 17	9M 16
Net Profit Attributable to JM	285	502
Deducted from the impact of discontinued businesses:
Gains in joint ventures and associates (sold)	0	10
Net Profit Mkt. Repr. and Rest. Serv. (sold)	0	1
Non-Recurrent Items - Monterroio sale	0	224
Net Profit on a comparable basis	285	266

10. 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. are not 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 SEPTEMBER 2017 AND 2016

9 Months 9 Months 3 rd Qua rte r 3 rd Qua 2 0 17 2 0 16 2 0 17 2 0 16 Sales and services rendered 3 11,926,147 10,738,224 4,172,396 Cost of sales 4 (9,398,988) (8,463,636) (3,279,004) Gross profit 2 ,5 2 7 ,15 9 2 ,2 7 4 ,5 8 8 8 9 3 ,3 9 2 8 0 5 ,8 Distribution costs 4 (1,911,315) (1,692,787) (656,518) Administrative costs 4 (188,150) (174,450) (65,092) Exceptional operating profits/losses 4 (11,286) (19,892) (3,799) Ope ra ting profit 4 16 ,4 0 8 3 8 7 ,4 5 9 16 7 ,9 8 3 14 7 ,8 Net financial costs 5 (8,945) (12,392) (5,365) Gains in joint ventures and associates (3) 10,272 (1) Gains/ losses in other investments 2 (3,582) - Profit be fore ta xe s 4 0 7 ,4 6 2 6 0 5 ,7 5 3 16 2 ,6 17 3 6 9 ,8 Income tax 6 (101,228) (85,577) (38,924) Profit be fore non- c ontrolling inte re sts 3 0 6 ,2 3 4 5 2 0 ,17 6 12 3 ,6 9 3 3 3 7 ,9	CONSOLIDATED INCOME STATEMENT BY FUNCTIONS FOR SEPTEMBER 2017 AND 2016
				Euro thousand
				rte r
				3,779,703
				(2,973,828)
				7 5
				(581,440)
				(59,090)
				(17,484)
				6 1
				(1,874)
				2,706
				(2,805)
				8 4
				(31,885)
				9 9
Attributable to:
Non- controlling interests 20,975 18,594 11,438				8,453
Je rónimo Ma rtins Sha re holde rs 2 8 5 ,2 5 9 5 0 1,5 8 2 112 ,2 5 5 3 2 9 ,5				4 6
Basic and diluted earnings per share - Euros 13 0.4539 0.7981 0.1786				0.5244

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

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

			Euro thousand
9 Months 2 0 17	9 Months 2 0 16	3 rd Qua rte r 2 0 17	3 rd Qua rte r 2 0 16
3 0 6 ,2 3 4	5 2 0 ,17 6	12 3 ,6 9 3	3 3 7 ,9 9 9
-	-	-	-
33,936	(11,676)	(15,896)	23,971
501	(225)	(7)	154
(13,948)	(1,332)	66	17
-	297	-	-
(247)	165	24	(129)
2 0 ,2 4 2	(12 ,7 7 1)	(15 ,8 13 )	2 4 ,0 13
2 0 ,2 4 2	(12 ,7 7 1)	(15 ,8 13 )	2 4 ,0 13
3 2 6 ,4 7 6	5 0 7 ,4 0 5	10 7 ,8 8 0	3 6 2 ,0 12
20,975	18,594	11,438	8,453
305,501	488,811	96,442	353,559
3 2 6 ,4 7 6	5 0 7 ,4 0 5	10 7 ,8 8 0	3 6 2 ,0 12

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

CONSOLIDATED BALANCE SHEET AT 30 SEPTEMBER 2017 AND DECEMBER 2016

			Euro thousand
		Se pte mbe r	De c e mbe r
	Note s	2 0 17	2 0 16
Asse ts
Tangible assets	7	3,215,514	3,023,360
Intangible assets	7	797,078	786,983
Investment property	7	13,924	13,952
Investments in joint ventures and associates		997	-
Available- for- sale financial assets		1,366	1,000
Trade debtors, accrued income and deferred costs	9	110,891	112,836
Derivative financial instruments	8	200	-
Deferred tax assets		72,764	69,756
Tota l non- c urre nt a sse ts		4 ,2 12 ,7 3 4	4 ,0 0 7 ,8 8 7
Inventories		737,241	718,618
Biological assets		2,727	1,181
Income tax receivable		12,613	2,037
Trade debtors, accrued income and deferred costs	9	335,462	311,130
Derivative financial instruments	8	356	1,277
Cash and cash equivalents	10	509,260	643,512
Tota l c urre nt a sse ts		1,5 9 7 ,6 5 9	1,6 7 7 ,7 5 5
Tota l a sse ts		5 ,8 10 ,3 9 3	5 ,6 8 5 ,6 4 2
Sha re holde rs' e quity a nd lia bilitie s
Share capital		629,293	629,293
Share premium		22,452	22,452
Own shares		(6,060)	(6,060)
Other reserves		(76,623)	(96,865)
Retained earnings	12	1,094,247	1,189,191
		1,6 6 3 ,3 0 9	1,7 3 8 ,0 11
Non- c ontrolling inte re sts		2 5 7 ,9 9 5	2 5 2 ,5 0 0
Tota l Sha re holde rs' e quity		1,9 2 1,3 0 4	1,9 9 0 ,5 11
Borrowings	14	206,301	114,829
Trade creditors, accrued costs and deferred income	16	782	793
Derivative financial instruments	8	-	293
Employee benefits	15	66,395	61,823
Provisions for risks and contingencies	15	21,999	21,582
Deferred tax liabilities		60,728	59,742
Tota l non- c urre nt lia bilitie s		3 5 6 ,2 0 5	2 5 9 ,0 6 2
Borrowings	14	293,639	224,581
Trade creditors, accrued costs and deferred income	16	3,204,180	3,166,527
Derivative financial instruments	8	30	317
Income tax payable		35,035	44,644
Tota l c urre nt lia bilitie s		3 ,5 3 2 ,8 8 4	3 ,4 3 6 ,0 6 9
Tota l Sha re holde rs' e quity a nd lia bilitie s		5 ,8 10 ,3 9 3	5 ,6 8 5 ,6 4 2

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

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS´EQUITY

	S ha r e	hol de r s' e qui	t y a t t r i but	a bl e t o S ha	r e hol de r s of	J e r óni mo M	a r t i ns, S GP	S , S A.
				Ot	he r r e se r v e	s			Non
	S ha r e c a pi t a l	S ha r e pr e mi um	Own sha r e s	Cash f low hedge	Available-f or sale f inancial asset s	Currency t ranslat ion reserves	Re t a i ne d e a r ni ngs	Tot a l	c ont r ol l i ng i nt e r e st s	S ha r e hol de r s' e qui t y
Ba l a nc e S he e t a s a t 1 J a nua r y 2 0 16	6 2 9 , 2 9 3	2 2 , 4 5 2	( 6 , 0 6 0 )	99	( 2 3 0 )	( 6 4 , 2 6 1)	7 6 0 , 4 0 0	1, 3 4 1, 6 9 3	2 5 1, 5 2 6	1, 5 9 3 , 2 19
Equi t y c ha nge s i n 2 0 16
Currency t ranslat ion dif f erences	-	-	-	(1)	-	(11,486)	-	(11,487)	-	(11,487)
Change in f air value of cash f low hedging	-	-	-	(182)	-	-	-	(182)	-	(182)
Change in f air value of hedging inst rument s on f oreign operat ions	-	-	-	-	-	(1,332)	-	(1,332)	-	(1,332)
Change in f air value of available-f or-sale inancial invest ment s	-	-	-	-	230	-	-	230	-	230
Ot her comprehensive income	-	-	-	(183)	230	(12,818)	-	(12,771)	-	(12,771)
Net prof it							501,582	501,582	18,594	520,176
Tot a l c ompr e he nsi v e i nc ome	-	-	-	( 18 3 )	230	( 12 , 8 18 )	5 0 1, 5 8 2	4 8 8 , 8 11	18 , 5 9 4	5 0 7 , 4 0 5
Dividends							(166,535)	(166,535)	(15,546)	(182,081)
Acquisit ions/ Disposal of non-cont rolling int erest s									(540)	(540)
Ba l a nc e S he e t a s a t 3 0 S e pt e mbe r 2 0 16	6 2 9 , 2 9 3	2 2 , 4 5 2	( 6 , 0 6 0 )	( 8 4 )	-	( 7 7 , 0 7 9 )	1, 0 9 5 , 4 4 7	1, 6 6 3 , 9 6 9	2 5 4 , 0 3 4	1, 9 18 , 0 0 3
Ba l a nc e S he e t a s a t 1 J a nua r y 2 0 17	6 2 9 , 2 9 3	2 2 , 4 5 2	( 6 , 0 6 0 )	( 2 3 7 )	-	( 9 6 , 6 2 8 )	1, 18 9 , 19 1	1, 7 3 8 , 0 11	2 5 2 , 5 0 0	1, 9 9 0 , 5 11
Equi t y c ha nge s i n 2 0 17
Currency t ranslat ion dif f erences	-	-	-	(6)	-	33,790	-	33,784	-	33,784
Change in f air value of cash f low hedging	-	-	-	406	-	-	-	406	-	406
Change in f air value of hedging inst rument s on f oreign operat ions	-	-	-	-	-	(13,948)	-	(13,948)	-	(13,948)
Ot her comprehensive income	-	-	-	400	-	19,842	-	20,242	-	20,242
Net prof it							285,259	285,259	20,975	306,234
Tot a l c ompr e he nsi v e i nc ome	-	-	-	400	-	19,842	285,259	305,501	20,975	326,476
Dividends (not e 12)							(380,203)	(380,203)	(15,480)	(395,683)
Ba l a nc e S he e t a s a t 3 0 S e pt e mbe r 2 0 17	6 2 9 , 2 9 3	2 2 , 4 5 2	( 6 , 0 6 0 )	16 3	-	( 7 6 , 7 8 6 )	1, 0 9 4 , 2 4 7	1, 6 6 3 , 3 0 9	2 5 7 , 9 9 5	1, 9 2 1, 3 0 4

CONSOLIDATED CASH FLOW STATEMENT FOR SEPTEMBER 2017 AND 2016

			Euro thousand
	Note s	9 Months	9 Months
Ope ra ting Ac tivitie s		2 0 17	2 0 16
Cash received from customers		13,437,544	12,103,055
Cash paid to suppliers		(11,826,431)	(10,644,884)
Cash paid to employees		(925,411)	(821,625)
Ca sh ge ne ra te d from ope ra tions	11	6 8 5 ,7 0 2	6 3 6 ,5 4 6
Interest paid		(13,744)	(11,954)
Income taxes paid		(122,727)	(88,198)
Ca sh flow from ope ra ting a c tivitie s		5 4 9 ,2 3 1	5 3 6 ,3 9 4
Inve stme nt a c tivitie s
Disposals of tangible fixed assets		1,617	2,294
Disposals of available- for- sale financial assets and investment property		187	1,732
Disposals of businesses, net of cash sold	7	-	304,963
Interest received		2,370	1,215
Dividends received		79	2,774
Acquisition of tangible fixed assets		(459,112)	(283,890)
Acquisition of intangible assets		(9,095)	(2,493)
Acquisition of financial investments and investment property		(551)	(8,714)
Acquisition of joint ventures and associates		(1,000)	-
Ca sh flow from inve stme nt a c tivitie s		(4 6 5 ,5 0 5 )	17 ,8 8 1
Fina nc ing a c tivitie s
Net change in loans	14	171,153	(332,059)
Dividends paid	12	(395,553)	(182,081)
Ca sh flow from fina nc ing a c tivitie s		(2 2 4 ,4 0 0 )	(5 14 ,14 0 )
Ne t c ha nge s in c a sh a nd c a sh e quiva le nts		(14 0 ,6 7 4 )	4 0 ,13 5
Ca sh a nd c a sh e quiva le nts c ha nge s
Cash and cash equivalents at the beginning of the year		643,512	441,688
Net changes in cash and cash equivalents		(140,674)	40,135
Effect of currency translation differences		6,422	(5,608)
Cash and cash equivalents at the end of 9 Months	10	5 0 9 ,2 6 0	4 7 6 ,3 7 0

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

CONSOLIDATED CASH FLOW STATEMENT FOR THE INTERIM PERIOD

				Euro thousand
	9 Months	9 Months	3rd Quarter	3rd Quarter
	2017	2016	2017	2016
Cash Flow from operating activities	549,231	536,394	303,042	257,636
Cash Flow from investment activities	(465,505)	17,881	(179,273)	198,815
Cash Flow from financing activities	(224,400)	(514,140)	27,060	(147,762)
Cash and cash equivalents changes	(140,674)	40,135	150,829	308,689

2.	Accounting policies17
3.	Segments reporting18
4.	Operating costs by nature 19
5.	Net financial costs19
6.	Income tax recognised in the income statement20
7.	Tangible assets, intangible assets and investment property 20
8.	Derivative financial instruments21
9.	Trade debtors, accrued income and deferred costs 21
10.	Cash and cash equivalents 21
11.	Cash generated from operations 22
12.	Dividends 22
13.	Basic and diluted earnings per share22
14.	Borrowings22
15	Provisions and employee benefits23
16	Trade creditors, accrued costs and deferred income23
17	Contingencies24
18	Related parties 24
19	Events after the balance sheet date25

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 operates in the food area, particularly in the distribution and sale of food and other fastmoving consumer goods products. The Group has operations 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 24 October 2017.

2. Accounting policies

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

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

The consolidated financial statements were prepared in accordance with the same standards and accounting policies adopted by the Group 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 2016 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 2016 Annual Report, point 31 - 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 nine months of 2017, there was 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.

Change in accounting policies and basis for presentation:

2.1. New standards and interpretations issued by IASB and IFRIC, but not yet endorsed by EU

IASB and IFRIC issued in 2017 the following standards and interpretations 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 17 Insurance Contracts (new)	May 2017	1 January 2021
IFRIC 23 Uncertainty over Income Tax Treatments (new)	June 2017	1 January 2019

Management is evaluating the impact of adopting the new standards and interpretations, and does not expect any significant impact on the Group's Consolidated Financial Statements.

2.2. 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 on the Company's equity.

The main exchange rates applied on the balance sheet date are as follows:

Euro foreign exchange rates (foreign exchange units per 1 Euro)	Rate on 30 September 2017	Average rate for the period
Polish Zloty (PLN)	4.3042	4.2627
Swiss Franc (CHF)	1.1457	-
Colombian Peso (COP)	3,472.2300	3,284.1600

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. 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 which due to their low materiality, 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 which operates under the Biedronka banner;
• Others, eliminations and adjustments: includes i) business units with reduced materiality (Restaurants, Agribusiness 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 Business Segments at September 2017 and 2016

	P or t uga l Di st r i but i on		P ol a nd Di st r i but i on		Ot he r s, e l i mi na t i ons a nd a dj ust me nt s		Tot a l J M	Consol i da t e d
	2 0 17	2 0 16	2 0 17	2 0 16	2 0 17	2 0 16	2 0 17	2 0 16
Ne t sa l e s a nd se r v i c e s	3 , 4 0 9 , 5 3 8	3 , 2 9 4 , 3 19	8 , 10 2 , 6 7 3	7 , 16 3 , 3 7 5	4 13 , 9 3 6	2 8 0 , 5 3 0	11, 9 2 6 , 14 7	10 , 7 3 8 , 2 2 4
Int er-segment s	51	115	1,085	1,132	(1,136)	(1,247)	-	-
Ext ernal cust omers	3,409,487	3,294,204	8,101,588	7,162,243	415,072	281,777	11,926,147	10,738,224
Ope r a t i ona l c a sh f l ow ( EBI TDA)	17 6 , 5 6 4	17 4 , 8 3 8	5 8 3 , 3 3 1	5 11, 9 6 3	( 9 0 , 6 8 6 )	( 5 9 , 8 9 5 )	6 6 9 , 2 0 9	6 2 6 , 9 0 6
Depreciat ions and amort isat ions	(83,167)	(81,744)	(140,762)	(126,456)	(17,586)	(11,355)	(241,515)	(219,555)
Ope r a t i ona l r e sul t ( EBI T)	9 3 , 3 9 7	9 3 , 0 9 4	4 4 2 , 5 6 9	3 8 5 , 5 0 7	( 10 8 , 2 7 2 )	( 7 1, 2 5 0 )	4 2 7 , 6 9 4	4 0 7 , 3 5 1
Except ional operat ing prof it s/ losses							(11,286)	(19,892)
Fi na nc i a l r e sul t s a nd ga i ns i n i nv e st me nt s							( 8 , 9 4 6 )	2 18 , 2 9 4
Income t ax							(101,228)	(85,577)
Ne t r e sul t a t t r i but a bl e t o J M							2 8 5 , 2 5 9	5 0 1, 5 8 2
Tot a l a sse t s ( 1)	2 , 14 5 , 9 0 1	2 , 0 8 4 , 5 5 9	3 , 13 9 , 7 8 1	3 , 0 6 3 , 0 2 3	5 2 4 , 7 11	5 3 8 , 0 6 0	5 , 8 10 , 3 9 3	5 , 6 8 5 , 6 4 2
Tot a l l i a bi l i t i e s ( 1)	1, 5 7 8 , 3 2 3	1, 5 3 1, 10 7	2 , 3 0 4 , 6 8 0	2 , 2 10 , 17 0	6 , 0 8 6	( 4 6 , 14 6 )	3 , 8 8 9 , 0 8 9	3 , 6 9 5 , 13 1
I nv e st me nt s i n f i x e d a sse t s	8 1, 5 7 8	115 , 0 8 8	17 3 , 6 9 4	12 5 , 6 8 2	16 6 , 3 3 7	4 5 , 6 7 6	4 2 1, 6 0 9	2 8 6 , 4 4 6

Reconciliation between EBIT and Operational Result

	Se p 2 0 17	Se p 2 0 16
EBIT	427,694	407,351
Non recurrent results	(11,286)	(19,892)
Ope ra tiona l re sult	4 16 ,4 0 8	3 8 7 ,4 5 9

4. Operating costs by nature

	Se p 2 0 17	Se p 2 0 16
Cost of goods sold and materials consumed	9,392,164	8,448,861
Changes in inventories of finished goods and work in progress	(1,747)	(793)
Net cash discount and interest paid to suppliers	(25,843)	(16,676)
Electronic payment commissions	21,020	17,876
Other supplementary costs	2,221	4,784
Supplies and services	444,285	397,158
Advertising costs	78,515	60,115
Rents	267,680	247,081
Staff costs	949,388	845,163
Depreciations and amortisations	241,517	219,599
Profit/loss with tangible and intangible assets	8,218	10,526
Transportation costs	125,147	111,056
Other operational profit/loss	7,174	6,015
Tota l	11,5 0 9 ,7 3 9	10 ,3 5 0 ,7 6 5

4.1 Exceptional operating profits/losses

Operating costs by nature include the following exceptional operating profits/losses:

	Sep 2017	Sep 2016
Losses from organizational restructuring programmes	(5,103)	(3,517)
Assets write- offs and gains/losses in sale of tangible assets	(2,835)	(8,474)
Others	(3,348)	(212)
Exceptional operating profits/losses	(11,286)	(19,892)

5. Net financial costs

	Sep 2017	Sep 2016
Interest expense	(11,025)	(9,915)
Interest received	2,365	1,164
Net foreign exchange	2,439	(1,174)
Other financial costs and gains	(3,063)	(2,544)
Fair value of financial investments held for trade:
Derivative instruments (note 8)	260	14
	(8,945)	(12,392)

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, booked in results through effective interest method.

6. Income tax recognised in the income statement

	Se p 2 0 17	Se p 2 0 16
Curre nt inc ome ta x
Current tax of the year	(106,430)	(97,371)
Adjustment to prior year estimation	1,724	1,881
	(10 4 ,7 0 6 )	(9 5 ,4 9 0 )
De fe rre d ta x
Temporary differences created and reversed	2,031	9,431
Change to the recoverable amount of tax losses and temporary differences from previous years	239	(601)
	2 ,2 7 0	8 ,8 3 0
Othe r ga ins/losse s re la te d to ta x
Impact of changes in estimates for tax litigations	1,208	1,083
	1,2 0 8	1,0 8 3
Tota l inc ome ta x	(10 1,2 2 8 )	(8 5 ,5 7 7 )

Income tax expense is recognised based on the weighted average annual income tax rate expected for the year. In 2017 the income tax rates for Group companies were the same applied in 2016.

7. Tangible assets, intangible assets and investment property

	Tangible assets	Intangible assets	Investment property	Total
Net value at 31 December 2016	3,023,360	786,983	13,952	3,824,295
Foreign exchange differences	21,379	10,613	-	31,992
Increases	412,514	9,095	-	421,609
Disposals and write- offs	(9,705)	(130)	-	(9,835)
Transfers	(441)	441	-	-
Depreciation and impairment losses	(231,593)	(9,924)	-	(241,517)
Fair value changes	-	-	(28)	(28)
Net value at 30 September 2017	3,215,514	797,078	13,924	4,026,516

Net value of intangible assets at 30 September 2017 include Goodwill amounted EUR 637,286 thousand.

Due to 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 31,992 thousand, which includes an increase of EUR 7,384 thousand related to Goodwill from business in Poland.

8. Derivative financial instruments

8. Derivative financial instruments
		S e p 2 0 17			De c 2 0 16
	Not i ona l	Asse	t s	Li a bi	l i t i e s	Not i ona l	Asse	t s	Li a bi l	i t i e s
		Cur r e nt	Non c ur r e nt	Cur r e nt	Non c ur r e nt		Cur r e nt	Non c ur r e nt	Cur r e nt	Non c ur r e nt
De r i v a t i v e s he l d f or t r a di ng
Currency f orwards (PLN)	143 million PLN	260	-	-	-	-	-	-	-	-
Ca sh f l ow he dgi ng de r i v a t i v e s
Int erest rat e swap (PLN)	192 million PLN	-	200	-	-	200 million PLN	-	-	-	293
For e i gn ope r a t i on i nv e st me nt s he dgi ng de r i v a t i v e s
Currency f orwards (PLN)	120 million PLN	96	-	30	-	538 million PLN	1,277	-	317	-
Tot a l de r i v a t i v e s he l d f or t r a di ng		260	-	-	-		-	-	-	-
Tot a l he dgi ng de r i v a t i v e s		96	200	30	-		1, 2 7 7	-	3 17	293
Tot a l a sse t s/ l i a bi l i t i e s de r i v a t i v e s		356	200	30	-		1, 2 7 7	-	3 17	293

9. Trade debtors, accrued income and deferred costs

	Sep 2017	Dec 2016
Non- current
Other debtors	74,142	75,987
Collateral deposits associated to financial debt	34,367	34,367
Deferred costs	2,382	2,482
	110,891	112,836
Current
Commercial customers	59,340	45,928
Other debtors	109,941	93,117
Other taxes receivable	18,048	11,364
Accrued income and deferred costs	148,133	160,721
	335,462	311,130

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

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

10. Cash and cash equivalents

	Sep 2017	Dec 2016
Bank deposits	367,304	524,941
Short- term investments	138,028	114,974
Cash and cash equivalents	3,928	3,597
	509,260	643,512

11. Cash generated from operations

	Se p 2 0 17	Se p 2 0 16
Ne t re sults	2 8 5 ,2 5 9	5 0 1,5 8 2
Adjustments for:
Non- controlling interests	20,975	18,594
Income tax	101,228	85,577
Depreciations and amortisations	241,517	219,555
Provisions and other operational gains and losses	10,049	12,796
Net financial costs	8,945	12,392
Gains/Losses on disposal of business	-	(223,996)
Gains/Losses in associated companies	3	(10,272)
Gains/Losses in other investments	(2)	3,582
Profit/ Losses in tangible and intangible assets	8,228	2,511
	6 7 6 ,2 0 2	6 2 2 ,3 2 1
Changes in working capital:
Inventories	(17,960)	(19,230)
Trade debtors, accrued income and deferred costs	(13,619)	(3,029)
Trade creditors, accrued costs and deferred income	41,079	36,484
	6 8 5 ,7 0 2	6 3 6 ,5 4 6

12. Dividends

Dividends distributed in 2017 in the amount of EUR 395,683 thousand, include an amount of EUR 380,203 thousand paid to JMH Shareholders and an amount of EUR 15,480 thousand paid to non-controlling interests in the Group companies.

13. Basic and diluted earnings per share

	Sep 2017	Sep 2016
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	285,259	501,582
Basic and diluted earnings per share – Euros	0.4539	0.7981

14. Borrowings

It was negotiated a new Commercial Paper Contract in the amount of EUR 30,000 thousand, with subscription guarantee, that can be used by both Jerónimo Martins, SGPS, S.A. and JMR – Gestão de Empresas de Retalho, SGPS, S.A. (JMR).

JMR issued commercial paper in an average amount of m EUR 40,000, through Commercial Paper Programmes that were negotiated. These emissions were carried out for short periods, in order to meet punctual cash needs.

JMR also extended a Commercial Paper Programme, with the limit of EUR 100,000 thousand, for a period of 5 years.

The short-term lines that Jerónimo Martins Colombia, SAS holds with local banks were extended by new loans in the amount of COP 167,446,000 thousand, around EUR 48,000 thousand, for 1 year.

Polish company Jerónimo Martins Nieruchomosci SKA negotiated three new credit lines in the total amount of PLN 669,000 thousand, around EUR 155,000 thousand.

14.1 Current and non-current

	Sep 2017	Dec 2016
Non- current loans
Bank loans	201,849	111,823
Financial lease liabilities	4,452	3,006
	206,301	114,829
Current loans
Bank overdrafts	20,011	-
Bank loans	122,516	73,622
Bond loans	150,000	150,000
Financial lease liabilities	1,112	959
	293,639	224,581

14.2 Financial debt

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

	Sep 2017	Dec 2016
Non- current loans (note 14.1)	206,301	114,829
Current loans (note 14.1)	293,639	224,581
Derivative financial instruments (note 8)	(526)	(667)
Interest on accruals and deferrals	1,704	1,035
Bank deposits (note 10)	(367,304)	(524,941)
Short- term investments (note 10)	(138,028)	(114,974)
Collateral deposits associated to financial debt (note 9)	(34,367)	(34,367)
	(38,581)	(334,504)

15 Provisions and employee benefits

	Risks and	Employee
	contingencies	benefits
Balance at 1 January	21,582	61,823
Set up, reinforced and transfers	1,911	5,802
Unused and reversed	(1,313)	-
Foreign exchange difference	38	445
Used	(219)	(1,675)
Balance at 30 September	21,999	66,395

16 Trade creditors, accrued costs and deferred income

	Sep 2017	Dec 2016
Non- current
Other commercial creditors	14	5
Accrued costs and deferred income	768	788
	782	793
Current
Other commercial creditors	2,592,171	2,560,840
Other non- commercial creditors	190,185	228,713
Other taxes payables	93,788	79,272
Accrued costs and deferred income	328,036	297,702
	3,204,180	3,166,527

17 Contingencies

Following the contingencies mentioned in the 2016 Annual Report, changes occurred on the headings c), g), i) e j):

• c) The Portuguese Tax Authorities carried out some corrections to the CIT amount from Companies included in the perimeter of the Tax group headed by JMR, which led to additional assessments concerning 2002 to 2014, amounting to EUR 81,304 thousand, of which an amount of EUR 73,444 thousand is still in dispute. In the meantime, the Lisbon Tax Court has ruled partially in favour of JMR regarding the 2002, 2004, 2005 and 2007 assessments;
• The Portuguese Tax Authorities carried out some corrections to the CIT from Companies included in the perimeter of the Tax Group headed by Recheio, SGPS, S.A. (Recheio SGPS). With these corrections the total assessments concerning 2007 to 2014 amount to EUR 16,580 thousand, of which an amount of EUR 15,829 thousand is still in dispute. The Lisbon Tax Court has already ruled in favour of Recheio SGPS regarding the 2008 assessment. However, Tax Authorities have appealed the said decision;
• Sociedade Ponto Verde (SPV) claimed through a judicial proceeding against Pingo Doce, in September 2014, an amount of EUR 3,397 thousand (including outstanding interest), related to the Management of the secondary and tertiary packaging waste system. Pingo Doce contested considering that SPV does not manage that kind of waste and therefore no amount is due. The Court decided in favour of Pingo Doce, however SPV filed an appeal and won the appeal. Pingo Doce lodged an appeal of this decision at the Supreme Court of Justice;
• The Food and Veterinary Department (Direcção-Geral de Alimentação e Veterinária) claimed from Pingo Doce, Recheio and Hussel an amount of EUR 13,732 thousand, EUR 1,207 thousand and EUR 30 thousand, respectively, in respect of the Food Safety Tax (Taxa de Segurança Alimentar Mais – TSAM) assessed for the years 2012 to 2017. The values at stake have been challenged in Court, since it is understood that this tax is not due, namely on the grounds of the unconstitutional nature of the Statute that approved the TSAM. The disputes are still running its course. Despite, in four cases, the court having decided that the Food Safety Tax is not unconstitutional, the Companies maintain their understanding and have presented the respective appeal to higher courts.

18 Related parties

56.136% of the Company is owned by the Sociedade Francisco Manuel dos Santos, B.V., and no transactions occurred between this Company and any other company of the Group in the first nine months of 2017, neither were there any amounts payable or receivable between them on 30 September 2017.

Balances and transactions of Group companies with related parties are as follows:
	Joint ve nture s		Othe r re la te d pa rtie s ( *)
	Se p 2 0 17	Se p 2 0 16	Se p 2 0 17	Se p 2 0 16
Sales and services rendered	-	7	141	186
Stocks purchased and services supplied	-	58,673	88,587	23,089
	Joint ve	nture s	Othe r re la te	d pa rtie s (*)
	Se p 2 0 17	De c 2 0 16	Se p 2 0 17	De c 2 0 16
Trade debtors, accrued income and deferred costs	-	-	237	456
Trade creditors, accrued costs and deferred income - - 18,288 8,329
(*) Entities controlled by the major Shareholder of Jerónimo M artins 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.

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

19 Events after the balance sheet date

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

Lisbon, 24 October 2017

The Certified Accountant The Board of Directors