Jeronimo Martins — Interim / Quarterly Report 2018

Oct 30, 2018

Nine Months 2018 Results

Lisbon, 30 October 2018

+7.3% SALES TO €12.8 BN	• CONSOLIDATED SALES grew 7.3% with Group LFL of 3.4%
(+7.3% at constant exchange rates)	BIEDRONKA SALES increased 6.2% in zloty (+3.7% in Q3), with LFL of 3.2% (+0.8% in Q3)
+6.0% EBITDA	PINGO DOCE SALES grew 5.1% (+6.0% in Q3), with LFL (excl. fuel) of 3.8% (+4.6% in Q3)
TO €709 MN	RECHEIO SALES increased 3.5% (+3.6% in Q3), with LFL of 3.7% (+4.9% in Q3)
(+5.3% at constant exchange rates)	ARA SALES in local currency grew 59.6% (+48.0% in Q3)
	HEBE SALES in local currency grew 24.0% (+23.1% in Q3)
+2.4% NET PROFIT TO €292 MN	• GROUP EBITDA increased 6.0% to reach €709 million
+1.2% EPS TO €0.47	• NET PROFIT attributable to JM was €292 million, 2.4% up from 9M 17
(excluding other Profits/Losses)	• NET DEBT was €250 million as at the end of September and gearing stood at 13.1%
MESSAGE FROM THE CHAIRMAN AND CEO	Our steady focus on sales growth and consumer preference across all banners produced a very good performance in the first nine months of the year.
PEDRO SOARES DOS SANTOS	In a not-yet-stabilized context of adapting to the Sunday ban, Biedronka continued to gain market share (+1.7p.p. ytd August) and to secure its operational profitability. This performance was achieved with 16 fewer trading days and lower food inflation.
	In Portugal, Pingo Doce and Recheio delivered a remarkable performance driven by effective commercial actions.
	In Colombia, Ara expanded both its store network and logistic infrastructure. The Company was able to contain its losses at the EBITDA level, and is making progress on key profitability drivers of pivotal relevance for the future.
	Based on our performance so far, I am confident that all our models will deliver a solid Q4 in terms of both sales' growth and profitability.
OUTLOOK	The sales performance in our three geographies strengthened our market shares and reinforced our competitiveness in the first nine months of the year.
FOR 2018	In Poland, we remain positive about the economic environment and consumer outlook. Biedronka will continue to adjust to changes in the weekly sales pattern caused by the Sunday ban. During this adjustment period, the Company is particularly focused on reinforcing its market position while preserving the effectiveness and efficiency of its business model. Also, the economic growth in the country – one of the strongest in Europe – supports our interest in executing our store opening plan for the year with the addition, in Q4, of 40 to 50 new locations.
	Pingo Doce and Recheio will strive to reinforce market positions in an environment that should remain favourable for the rest of the year.
	In Colombia, Ara will execute its ambitious expansion plan for 2018 with the opening of c.65 stores in the final quarter.
	We reiterate our previous guidance for Ara and Hebe's combined losses. At the EBITDA level, we expect these losses to be slightly lower than in 2017, at constant exchange rates.
	Group capex for the year is expected to reach €700-750 million. This level of investment in new and established businesses reflects our strong progress this year and our confidence in our plans for the future.

Strong sales and solid EBITDA performance in a demanding environment in our main market

2018 9M Results

KEY FIGURES

CONSOLIDATED RESULTS

(Million Euro)	9M 18		9M 17		D	Q3 18		Q3 17		D
Net Sales and Services	12,800		11,926		7.3%	4,374		4,172		4.8%
Gross Profit	2,769	21.6%	2,527	21.2%	9.6%	958	21.9%	893	21.4%	7.2%
Operating Costs				-2,060 -16.1% -1,858 -15.6% 10.9%			-695 -15.9% -640 -15.3%			8.6%
EBITDA	709	5.5%	669	5.6%	6.0%	263	6.0%	253	6.1%	3.8%
Depreciation	-269	-2.1%	-242		-2.0% 11.6%	-91	-2.1%	-82	-2.0%	11.3%
EBIT	440	3.4%	428	3.6%	2.9%	172	3.9%	172	4.1%	0.2%
Net Financial Costs	-19	-0.2%	- 9	-0.1%	n.a.	- 6	-0.1%	- 5	-0.1%	n.a.
Other Profits/Losses	- 7	-0.1%	-11	-0.1%	n.a.	- 2	-0.1%	- 4	-0.1%	n.a.
EBT	414	3.2%	407	3.4%	1.5%	164	3.7%	163	3.9%	0.8%
Income Tax	-102	-0.8%	-101	-0.8%	1.0%	-40	-0.9%	-39	-0.9%	1.6%
Net Profit	311	2.4%	306	2.6%	1.6%	124	2.8%	124	3.0%	0.6%
Non Controlling Interests	-19	-0.1%	-21	-0.2%	-8.6%	-12	-0.3%	-11	-0.3%	5.3%
Net Profit Attributable to JM	292	2.3%	285	2.4%	2.4%	112	2.6%	112	2.7%	0.1%
EPS (€)	0.46		0.45		2.4%	0.18		0.18		0.1%
EPS without Other Profits/Losses (€)	0.47		0.46		1.2%	0.18		0.18		0.2%

CONSOLIDATED BALANCE SHEET

9M 18	2017	9M 17
639	647	637
3,797	3,639	3,375
-2,355	-2,496	-2,198
74	54	68
2,155	1,843	1,883
604	529	494
15	8	6
3	4	1
-373	-712	-540
250	-170	-39
229	225	258
629	629	629
1,047	1,159	1,034
1,905	2,013	1,921
13.1%	-8.5%	-2.0%

CASH-FLOW

(Million Euro)	9M 18	9M 17
EBITDA	709	669
Interest Payment	-17	-11
Other Financial Items	0	0
Income Tax	-122	-123
Funds From Operations	570	536
Capex Payment	-528	-468
Change in Working Capital	-53	19
Others	-5	-4
Free Cash-Flow	-16	83

SALES PERFORMANCE

Nine months Group sales reached €12.8 bn, up 7.3% (+7.3% at constant exchange rates).

Group LFL sales grew 3.4% in the 9M (+2.1% in Q3) with positive contributions from all the three geographies in which we operate.

In Poland, the food retail industry remained highly promotional and in flux as it adapts to the Sunday ban.

Food inflation was 3.1% in the 9M, having declined to 2.2% in Q3, namely driven by deflation in some commodities and fresh produces.

Biedronka continued to adjust to the new shopping patterns resulting from store closures on some Sundays.

In the 9M, Biedronka sales grew 6.5% (+6.2% in local currency) to €8.6 bn. LFL sales increased 3.2%, including some basket deflation. Throughout the first nine months, Biedronka continued to gain market share.

In Q3, sales grew 2.6% to €2.9 bn (+3.7% in local currency) and LFL was 0.8%. The LFL performance was influenced by deflation in the average basket, on the one side, and the peak number of Sunday closures over the quarter, on the other.

Deflationary pressures led to an overall basket deflation of more than 1% in the quarter. Further to the competitive dynamic, these pressures were driven by general price decreases on the supply side of products with important weight on the Company's basket.

The Sunday ban had a particularly negative effect in Q3 with 8 fewer trading days, impacting the LFL performance in c.2p.p..

In the first nine months, Biedronka opened 54 new stores (27 net additions) and refurbished 153 stores.

Hebe opened 27 new stores and delivered sales of €144 mn, growing 24.4% in 9M 18 (+24.0% at constant exchange rate).

In Portugal, the food retail industry continued to be highly promotional despite growth in consumer demand. Food inflation remained low at 0.9% in the 9M period (+1.0% in Q3).

Pingo Doce's sales were €2.8 bn, a 5.1% increase over 9M 17, driven by 3.8% LFL growth (excl. fuel).

In Q3, sales increased 6.0% to €1 bn, with a remarkable LFL (excl. fuel) of 4.6%.

In Q3, Hebe's sales grew 21.8% (+23.1% at constant exchange rate) to €50 mn.

Recheio continued to deliver a sound sales performance with growth of 3.5% to €739 mn, driven by a 3.7% LFL sales growth. In Q3, sales increased 3.6% driven by a LFL of 4.9%.

In Colombia, the consumer outlook improved, while food inflation remained relatively low, reaching 1.4% in 9M (+1.5% in Q3).

Ara posted sales of €439 mn, 52.2% ahead of 9M 17 (+59.6% at constant exchange rate). In Q3, sales increased 50.3% (+48.0% at constant exchange rate) to €156 mn.

In the first nine months of the year, Ara opened 86 new locations ending the period with a total network of 475 stores. The banner prepared the ground for a very strong Q4 opening program and is on track to deliver the planned 150 stores by the end of 2018. The new distribution centre in Bogota was inaugurated in August and is already serving our operations in the region.

RESULTS PERFORMANCE

Group EBITDA totalled €709 mn in 9M 18, a 6.0% growth on the previous year (+5.3% at constant exchange rates). Excluding the impact of Ara and Hebe, EBITDA increased 5.2%.

Biedronka's EBITDA was €622 mn, 6.6% higher than in 9M 17 (+6.2% at constant exchange rate). The EBITDA margin was 7.2%, which is in line with the previous year.

Biedronka's EBITDA margin performance was achieved in a highly competitive environment and despite wage pressures and ongoing operational changes to adapt to the Sunday ban. This performance reflects the effectiveness of the Company's margin mix

management and cost discipline.

Pingo Doce and Recheio delivered EBITDA of €178 mn, 0.6% ahead of 9M 17. The EBITDA margin was 5.0%. The decline from the 5.2% margin posted in 9M 17 reflects the wage increases implemented in Pingo Doce throughout Q4 17, with the impact in Q3 18 offset by the strong sales delivery.

Ara and Hebe registered EBITDA losses of €65 mn, with Ara accounting for c.85% of the total. The comparable losses in 9M 17 were €67 mn.

In line with expectations, Ara's start-up losses from its ambitious expansion programme continue to put pressure at the EBITDA level. On the positive side, gross margin consistently shows a positive evolution as the banner works on sales delivery and building the right value perception amongst consumers.

Net financial costs were of €-19 mn, increasing from previous year, in line with the higher interest-bearing debt in foreign currencies (Polish Zloty and Colombian Peso). These costs also include losses produced by the depreciation of the Zloty.

Other profits/losses were of €-7 mn in 9M 18, mainly attributable to restructuring costs.

Group net profit was €292 mn, 2.4% higher than in 9M 17.

Group capex amounted to €476 mn, of which 59% were invested in Biedronka and 16% in Ara.

Cash-flow in the 9M was negative at €16 mn, reflecting faster capex execution than in 2017 and a base effect on working capital.

Net debt reached €250 mn at the end of September, with a gearing of 13.1%.

+351 21 752 61 05

investor.relations@jeronimo-martins.com Cláudia Falcão claudia.falcao@jeronimo-martins.com Hugo Fernandes hugo.fernandes@jeronimo-martins.com

DISCLAIMER

Statements in this release that are forward-looking are based on current expectations of future events and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. The risks and uncertainties relate to factors that are beyond Jerónimo Martins' ability to control or estimate precisely, such as general economic conditions, credit markets, foreign exchange fluctuations, and regulatory developments.

Except as required by any applicable law or regulation, Jerónimo Martins assumes no obligation to update the information contained in this release or to notify a reader in the event that any matter stated herein changes or becomes inaccurate.

APPENDIX INCOME STATEMENT BY FUNCTIONS

(Million Euro)	9M 18	9M 17
Net Sales and Services	12,800	11,926
Cost of Sales	-10,031	-9,399
Gross Profit	2,769	2,527
Distribution Costs	-2,127	-1,911
Administrative Costs	-202	-188
Other Operating Profits/Losses	- 7	-11
Operating Profit	433	416
Net Financial Costs	-19	- 9
Gains/Losses in Other Investments	0	0
Gains in Disposal of Business	0	0
Gains in Joint Ventures and Associates	0	0
Profit Before Taxes	414	407
Income Tax	-102	-101
Profit Before Non Controlling Interests	311	306
Non Controlling Interests	-19	-21
Net Profit Attributable to JM	292	285

SALES BREAKDOWN

(Million Euro)	9M 18			9M 17	D %		Q3 18			Q3 17	D %
		% total		% total w/o FX		Euro		% total		% total w/o FX		Euro
Biedronka	8,632	67.4%	8,103	67.9%	6.2%	6.5%	2,871	65.6% 2,798		67.1%	3.7%	2.6%
Pingo Doce	2,829	22.1%	2,692	22.6%		5.1%	1,011	23.1%	954	22.9%		6.0%
Recheio	739	5.8%	713	6.0%		3.5%	281	6.4%	271	6.5%		3.6%
Ara	439	3.4%	289		2.4% 59.6% 52.2%		156	3.6%	104		2.5% 48.0% 50.3%
Hebe	144	1.1%	115		1.0% 24.0% 24.4%		50	1.1%	41		1.0% 23.1% 21.8%
Others & Cons. Adjustments	17	0.1%	14	0.1%		23.5%	6	0.1%	5	0.1%		16.8%
Total JM	12,800		100% 11,926	100%	7.3%	7.3%	4,374		100% 4,172	100%	5.5%	4.8%

SALES GROWTH

	Total Sales Growth						LFL Sales Growth
	Q1 18	Q2 18	H1 18	Q3 18	9M 18	Q1 18	Q2 18	H1 18		Q3 18 9M 18
Biedronka
Euro	15.6%	2.2%	8.6%	2.6%	6.5%
PLN	11.9%	3.3%	7.5%	3.7%	6.2%	8.6%	0.6%	4.5%	0.8%	3.2%
Pingo Doce	7.1%	2.3%	4.6%	6.0%	5.1%	5.8%	0.7%	3.1%	4.7%	3.7%
Ex-Fuel	7.7%	2.4%	4.9%	5.9%	5.3%	6.4%	0.7%	3.4%	4.6%	3.8%
Recheio	4.2%	2.9%	3.5%	3.6%	3.5%	3.6%	2.6%	3.0%	4.9%	3.7%

STORE NETWORK

			Openings		Closings
Number of Stores	2017	Q1 18	Q2 18	Q3 18	9M 18	9M 18	9M 17
Biedronka	2,823	11	19	24	27	2,850	2,753
Pingo Doce	422	0	3	5	0	430	419
Recheio	43	0	1	0	2	42	43
Ara	389	25	25	36	0	475	312
Hebe	182	11	9	7	2	207	166

Sales Area (sqm)	2017	Openings				9M 18	9M 17
		Q1 18	Q2 18	Q3 18	9M 18
Biedronka*	1,853,075	8,378	14,676	19,405	6,734	1,888,800	1,802,607
Pingo Doce	503,897	0	764	2,456	0	507,117	500,075
Recheio	131,997	0	3,942	0	2,113	133,826	131,997
Ara	133,692	9,010	8,939	12,185	0	163,827	105,229
Hebe	43,053	2,719	2,376	1,746	462	49,431	39,001

* Restated figure from 1,856,992 published in 2017 FY

EBITDA BREAKDOWN

(Million Euro)	9M 18	Mg	9M 17	Mg
Biedronka	622	7.2%	583	7.2%
Distribution Portugal	178	5.0%	177	5.2%
Others & Cons. Adjustments	-90	n.a.	-91	n.a.
JM Consolidated	709	5.5%	669	5.6%

FINANCIAL RESULTS

(Million Euro)	9M 18	9M 17
Net Interest	-15	-9
Exchange Differences	-1	2
Others	-4	-3
Financial Results	-19	-9

CAPEX

(Million Euro)	9M 18	Weight	9M 17	Weight
Biedronka	283	59%	174	41%
Distribution Portugal	80	17%	82	19%
Ara	75	16%	112	27%
Others	38	8%	54	13%
Total CAPEX	476	100%	422	100%

NOTES 1. 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).

Following ESMA guidelines on Alternative Performance Measures from October 2015

Gearing: Net Debt / Shareholder Funds

2. P&L RECONCILIATION NOTE

Income Statement Income Statement by Functions in the Consolidated Report & Accounts - First Nine Months 2018 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 €-269.4 mn EBITDA

Depreciation	Value reflected in the Other operating costs by nature note
EBIT
Net Financial Costs	Net financial costs
Gains in Joint Ventures and Associates	Gains (Losses) in joint ventures and associates
Other Profits/Losses	Includes headings of Other 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

3. BALANCE SHEET RECONCILIATION NOTE

Balance Sheet in this Release Balance Sheet in the Consolidated Report & Accounts - First Nine Months 2018 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 (€639.2 mn) 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 €3.9 mn Cash and cash equivalents (note - Cash and cash equivalents) and the value of €-7.0 mn related to 'Others' due to its operational nature. Excludes the value of €-2.8 mn related to Interest accruals and deferrals (note - Financial debt) Others Includes the headings Investment property; Investments in joint ventures and associates; Other financial investments; 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 €34.4 mn related to collateral deposits associated to Financial debt (note - Trade debtors, Accrued income and Deferred costs); and also the value of €-7.0 mn related to Others due to its operational nature Invested Capital Total Borrowings Includes the heading Borrowings excluding Leasings Leasings Value reflected in Borrowings note Accrued Interest & Hedging Includes the heading Derivative financial instruments and the value of €-2.8 mn 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 €34.4 mn related to collateral deposits associated to Financial debt (reflected in Trade debtors note) and excludes the value of €3.9 mn 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

Following ESMA guidelines on Alternative Performance Measures from October 2015

Shareholders' Funds

1. CASH-FLOW RECONCILIATION NOTE

Following ESMA guidelines on Alternative Performance Measures from October 2015

Cash-Flow in this Release	Cash-Flow in the Consolidated Report & Accounts - First Nine Months 2018 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 and investment property; Acquisition of tangible fixed assets; Acquisition of intangible assets; Acquisition of financial investments and investment property
Change in Working Capital	Included in the heading of Cash generated from operations
Others	Includes the headings disposal of business (when applicable), being the remaining amount included in the heading Cash generated from operations
Free Cash-Flow