Jeronimo Martins — Interim / Quarterly Report 2019

Aug 28, 2019

CONSOLIDATED REPORT AND ACCOUNTS

FIRST HALF 2019

INDEX

I – Consolidated Management Report
------------------------------------	--	--

Message from the Chairman and CEO - Pedro Soares dos Santos	3
1. Sales Analysis	3
2. Results Analysis	5
3. Balance Sheet	6
4. Outlook for 2019	7

II – Consolidated Management Report Appendix

1. The impact of IFRS 16 on Financial Statements	8
2. Sales Evolution	10
3. Stores Network	10
4. Total Borrowings Detail	11
5. Definitions	11
6. Income Statement - Reconciliation Note	12
7. Balance Sheet - Reconciliation Note	13
8. Free Cash Flow – Reconciliation Note	14
9. Information Regarding Individual Financial Statements	14
III – Other Information	15
IV – Statement of the Board of Directors	17
V – Consolidated Financial Statements
1. Financial Statements	18
2. Notes to the Financial Statements	22

1. Auditor's Report 34

R&A | 1

When applying, from the 1st of January 2019, the new accounting standard on leases - IFRS16 – the Group decided to adopt the modified retrospective method, according to which there is no restatement of historical data. As the adoption of the new standard also does not change the way Jerónimo Martins manages and measures the operating performance of its businesses, the below analysis does not consider the application of IFRS16. The impact of this accounting standard on the Group financial statements is presented in the Appendix of this Management Report.

I - CONSOLIDATED MANAGEMENT REPORT

Message from the Chairman and CEO

Pedro Soares dos Santos

'In line with our strategy, consumer focus and sales growth remain the Group's top priorities, without compromising cost discipline and the emphasis on efficiency to ensure the competitiveness and profitability of our business models.

These strategic options allowed us to deliver strong growth in the first half of the year in both SALES and EBITDA.

I am pleased with the LFL sales performance of our brands in general and Ara in particular.

For the remainder of 2019 our goal is to continue to outperform the markets where we operate. To guarantee this outperformance, we will continue reinforcing our operations and working to have the best commercial proposals in order to earn, more and more, the consumer's recognition and preference.'

1. Sales Analysis

(Million Euro)		H1 19		H1 18	D %		Q2 19		Q2 18		D %
		% total		% total excl. FX		Euro		% total		% total excl. FX		Euro
Biedronka	6,064	68.1%	5,762	68.4%	7.0%	5.2%	3,167	67.9%	2,839	67.2%	12.1%	11.5%
Pingo Doce	1,893	21.3%	1,818	21.6%		4.1%	988	21.2%	936	22.2%		5.6%
Recheio	467	5.2%	458	5.4%		2.0%	253	5.4%	248	5.9%		2.1%
Ara	356	4.0%	283	3.4%	31.6%	25.9%	187	4.0%	149	3.5%	34.9%	25.3%
Hebe	117	1.3%	94	1.1%	26.4%	24.3%	61	1.3%	47	1.1%	29.4%	28.7%
Others & Cons. Adjustments	11	0.1%	12	0.1%		-1.2%	6	0.1%	6	0.1%		0.9%
Total JM	8,908	100%	8,426	100%	7.1%	5.7%	4,661	100%	4,225		100% 11.1% 10.3%

In the first six months of the year, Group net sales increased 5.7% to €8.9 bn. At constant exchange rates, sales grew 7.1%, with like for like (LFL) at 3.9%. Benefiting from the calendar shift in the Easter season from the first Quarter in 2018 to the second Quarter in 2019, sales in the second Quarter increased 10.3% (+11.1% at constant exchange rates) and LFL growth was 7.8%.

In Poland, consumer demand remained positive, benefiting from a strong labour market and the approval of new social transfers.

Food inflation in the country increased strongly in the second Quarter (+4.7%) reaching 3.3% in the first Half.

Biedronka remained focused on meeting consumer needs and aspirations, while continuing to work to preserve the efficiency of its business model in a context of cost pressures.

Sales reached €6.1 bn, representing growth of 7.0% in local currency (+5.2% in euro) and market share increased. Despite the impact of 8 additional days of Sunday ban relative to first Half of 2018, LFL was 3.7%.

In the second Quarter, sales grew 12.1% (+11.5% in euros). LFL performance was 8.6%, including the positive calendar impact of Easter. During this season, Biedronka implemented strong commercial campaigns which, together with a favourable sales mix in June due to hot weather, boosted LFL in the quarter. In this period higher food inflation, partially driven by seasonal effects, also contributed to LFL performance.

Biedronka opened 27 new locations and closed 11 (16 net additions over the six months period).

Hebe sales reached €117 mn, growing 26.4% in local currency (+24.3% in euros). Despite 8 fewer trading days due to the Sunday ban, LFL stood at 8.0% in the first Half of 2019.

In the second Quarter, sales were €61 mn, a 29.4% increase (+28.7% in euros), with a LFL performance at 10.3%.

In Portugal, consumer demand remained favourable during the six-month period and intense promotional campaigns by most players continued to dominate the food retail sector.

Food inflation in the country was low at 0.5% (+0.1% in the second Quarter).

Pingo Doce kept leveraging its competitive strengths with reinforced commercial dynamics, delivering a strong performance. Sales grew 4.1% to €1.9 bn. LFL performance (excluding fuel) was 3.4%.

In the second Quarter sales grew 5.6% to €1 bn, with LFL (excluding fuel) at 5.1%, incorporating a positive calendar shift related to Easter.

The banner opened 4 stores in the first six months of the year.

Recheio increased its sales by 2.0% to €467 mn. On a LFL basis, sales grew 3.4%. In the second Quarter sales reached €253 mn, 2.1% ahead of the second Quarter of 2018 with a LFL growth of 3.2%.

In Colombia, the economy reveals signs of improvement and the retail sector remained quite dynamic.

Ara sales increased 31.6% at constant exchange rates (+25.9% in euros) reaching €356 mn. LFL sales growth, which is critical to reach profitability, significantly increased in recent months and the banner ended the first half with double digit LFL.

In the second Quarter sales were at €187 mn, having increased 34.9% (+25.3% in euros).

Ara gave priority to sharply improving sales growth on our current network, opening 25 new locations in the first six months, and ending the period with 557 stores.

2. Results Analysis

(Million Euro)		H1 19		H1 18 D							Q2 19		Q2 18
Net Sales and Services	8,908		8,426		5.7%	4,661		4,225		10.3%
Gross Profit	1,932	21.7%	1,811	21.5%	6.7%	1,006	21.6%	913	21.6%	10.1%
Operating Costs	-1,461	-16.4%	-1,365	-16.2%	7.1%	-748	-16.0%	-682	-16.1%	9.7%
EBITDA	471	5.3%	446	5.3%	5.6%	257	5.5%	231	5.5%	11.3%
Depreciation	-195	-2.2%	-179	-2.1%	9.1%	-98	-2.1%	-90	-2.1%	9.3%
EBIT	276	3.1%	268	3.2%	3.2%	159	3.4%	142	3.3%	12.6%
Net Financial Costs	-16	-0.2%	-13	-0.2%	17.0%	-8	-0.2%	-9	-0.2%	-10.2%
Gains in Joint Ventures and Associates	0	0.0%	0	0.0%	n.a.	0	0.0%	0	0.0%	n.a.
Other Profits/Losses	-4	0.0%	-5	-0.1%	n.a.	-3	-0.1%	-2	-0.1%	n.a.
EBT	257	2.9%	250	3.0%	2.9%	149	3.2%	130	3.1%	14.3%
Income Tax	-63	-0.7%	-63	-0.7%	1.0%	-33	-0.7%	-31	-0.7%	6.0%
Net Profit	193	2.2%	187	2.2%	3.5%	116	2.5%	99	2.3%	16.9%
Non-Controlling Interests	-12	-0.1%	-7	-0.1%	75.4%	-7	-0.1%	-4	-0.1%	84.0%
Net Profit Attributable to JM	181	2.0%	180	2.1%	0.7%	109	2.3%	95	2.3%	14.2%
EPS (€)	0.29		0.29		0.7%	0.17		0.15		14.2%
EPS without Other Profits/Losses (€)	0.29		0.29		0.6%	0.17		0.15		14.2%

Operating Profit (EBITDA)

Group EBITDA at €471mn, increased 5.6% compared to the first Half of 2018. At constant exchange rates, EBITDA grew 6.8%, driven by our sales-focused strategy.

EBITDA & EBITDA Margin

In Poland, Biedronka delivered EBITDA of €428 mn, growing 7.0% in zloty (+5.2% in euros). EBITDA margin was 7.1%, in-line with that of the same period last year.

An effective management of the sales mix allowed for intense commercial activity during the Easter season and for a flat EBITDA margin.

Pingo Doce delivered EBITDA of €86 mn, with the respective margin reaching 4.5%, ahead of the 4.2% registered in the first Half of 2018.This performance reflects the good LFL momentum and a positive margin mix effect in this year's Easter period which boosted EBITDA margin in the second Quarter.

Ara and Hebe posted EBITDA losses of €41 mn, of which 89% are attributable to Ara. The comparable combined losses in the first Half of 2018 were €45 mn. This evolution

resulted from both the reduction of Hebe's losses and the depreciation of local currencies. In the second Quarter, at constant exchange rates, Ara posted losses in-line with the same period last year.

Financial Results

Net financial costs were €-16 mn, slightly higher than the €-13 mn registered in the first Half of 2018, reflecting the increase in interest-bearing debt denominated in Colombian pesos versus a year ago.

Net Results

Group net profit was €181 mn, 0.7% ahead of the first Half of 2018, despite the impact of 8 fewer days of trading in Poland.

3. Balance Sheet

(Million Euro)	H1 19	2018	H1 18
Net Goodwill	641	637	632
Net Fixed Assets	3,918	3,842	3,665
Total Working Capital	-2,495	-2,454	-2,256
Others	95	70	87
Invested Capital	2,159	2,096	2,129
Total Borrowings	677	624	606
Financial Leases	19	15	12
Accrued Interest	4	2	2
Marketable Securities and Bank Deposits	-542	-562	-253
Net Debt	158	80	367
Non-Controlling Interests	236	238	217
Share Capital	629	629	629
Reserves and Retained Earnings	1,136	1,149	916
Shareholders Funds	2,001	2,016	1,762
Gearing	7.9%	3.9%	20.8%

Net debt, excluding capitalised operating leases, was €158 mn and gearing stood at 7.9%, including the €204 mn May dividend payment.

Free Cash Flow

(Million Euro)	H1 19	H1 18
EBITDA	471	446
Interest Payment	-13	-11
Other Financial Items	0	0
Income Tax	-86	-96
Funds From Operations	372	339
Capex Payment	-262	-337
Change in Working Capital	45	-136
Others	-2	-3
Free Cash Flow	152	-137

Free cash flow generated in the period was €152 mn, reflecting a good operational performance and working capital evolution.

Investment

(Million Euro)	H1 19	Weight	H1 18	Weight
Biedronka	114	48%	164	56%
Distribution Portugal	75	32%	56	19%
Ara	37	15%	50	17%
Others	13	5%	24	8%
Total CAPEX	238	100%	295	100%

In the first Half of 2019, Group capex (excluding rights of use acquired in accordance with IFRS16) amounted to €238 mn, with 48% allocated to Biedronka.

4. Outlook for 2019

The first Half results reflect a robust performance with all our banners reinforcing their market positions and gaining market share.

In this context, the guidance provided in our February 27th release* is kept unchanged.

*https://www.jeronimomartins.com/wp-content/uploads/com/2019/Results2018.pdf

Lisbon, 24 July 2019

The Board of Directors

II – CONSOLIDATED MANAGEMENT REPORT APPENDIX

1. The impact of IFRS 16 on Financial Statements

Income Statement by Functions

(Million Euro)	H1 19 IFRS16	H1 19 Excl. IFRS16	H1 18
Net Sales and Services	8,908	8,908	8,426
Cost of Sales	-6,976	-6,976	-6,615
Gross Profit	1,932	1,932	1,811
Distribution Costs	-1,467	-1,505	-1,410
Administrative Costs	-150	-151	-133
Other Operating Profits/Losses	- 4	- 4	- 5
Operating Profit	311	272	263
Net Financial Costs	-78	-16	-13
Gains in Joint Ventures and Associates	0	0	0
Profit Before Taxes	234	257	250
Income Tax	-60	-63	-63
Profit Before Non Controlling Interests	174	193	187
Non-Controlling Interests	-11	-12	- 7
Net Profit Attributable to JM	163	181	180

Income Statement (Management View)

(Million Euro)	H1 19 IFRS16	H1 19 Excl. IFRS16	H1 18	Q2 19 IFRS16	Q2 19 Excl. IFRS16	Q2 18
Net Sales and Services	8,908	8,908	8,426	4,661	4,661	4,225
Gross Profit	1,932	1,932	1,811	1,006	1,006	913
Operating Costs	-1,265	-1,461	-1,365	-648	-748	-682
EBITDA	667	471	446	357	257	231
Depreciation	-352	-195	-179	-178	-98	-90
EBIT	315	276	268	179	159	142
Net Financial Costs	-78	-16	-13	-37	-8	-9
Gains in Joint Ventures and Associates	0	0	0	0	0	0
Other Profits/Losses	-4	-4	-5	-3	-3	-2
EBT	234	257	250	139	149	130
Income Tax	-60	-63	-63	-32	-33	-31
Net Profit	174	193	187	108	116	99
Non-Controlling Interests	-11	-12	-7	-6	-7	-4
Net Profit Attributable to JM	163	181	180	101	109	95
EPS (€)	0.26	0.29	0.29	0.16	0.17	0.15
EPS without Other Profits/Losses (€)	0.26	0.29	0.29	0.16	0.17	0.15

Balance Sheet

(Million Euro)	H1 19 IFRS16	H1 19 Excl. IFRS16	2018	H1 18
Net Goodwill	641	641	637	632
Net Fixed Assets	3,918	3,918	3,842	3,665
Net Rights of Use (RoU)	2,341	-	-	-
Total Working Capital	-2,500	-2,495	-2,454	-2,256
Others	98	95	70	87
Invested Capital	4,499	2,159	2,096	2,129
Total Borrowings	677	677	624	606
Financial Leases	19	19	15	12
Capitalised Operating Leases	2,359	-	-	-
Accrued Interest	4	4	2	2
Marketable Securities and Bank Deposits	-542	-542	-562	-253
Net Debt	2,517	158	80	367
Non-Controlling Interests	234	236	238	217
Share Capital	629	629	629	629
Reserves and Retained Earnings	1,118	1,136	1,149	916
Shareholders Funds	1,982	2,001	2,016	1,762

Working Capital

(Million Euro)	H1 19 IFRS16	H1 19 Excl. IFRS16	2018	H1 18
Inventories	949	949	978	872
in days of sales	19	19	21	19
Customers	58	58	55	64
in days of sales	1	1	1	1
Suppliers	-2,925	-2,925	-2,960	-2,717
in days of sales	-59	-59	-62	-58
Trade Working Capital	-1,918	-1,918	-1,928	-1,781
in days of sales	-39	-39	-41	-38
Others	-582	-576	-526	-475
Total Working Capital	-2,500	-2,495	-2,454	-2,256
in days of sales	-51	-51	-52	-48

Free Cash Flow

(Million Euro)	H1 19 IFRS16	H1 19 Excl. IFRS16	H1 18
EBITDA	667	471	446
Capitalised Operating Leases Payment	-130	-	-
Interest Payment	-79	-13	-11
Other Financial Items	0	0	0
Income Tax	-86	-86	-96
Funds From Operations	371	372	339
Capex Payment	-262	-262	-337
Change in Working Capital	45	45	-136
Others	- 2	- 2	- 3
Free Cash Flow	152	152	-137

EBITDA and EBITDA Margin Breakdown

(Million Euro)	H1 19 IFRS16	Mg	H1 19 Excl. IFRS16	Mg	H1 18	Mg
Biedronka	560	9.2%	428	7.1%	407	7.1%
Pingo Doce	118	6.3%	86	4.5%	77	4.2%
Recheio	27	5.7%	23	5.0%	23	5.0%
Others & Cons. Adjustments	-38	n.a.	-66	n.a.	-60	n.a.
JM Consolidated	667	7.5%	471	5.3%	446	5.3%

Financial Costs Breakdown

(Million Euro)	H1 19 IFRS16	H1 19 Excl. IFRS16	H1 18
Net Interest	-12	-12	- 9
Interests on Capitalised Operating Leases	-66	-	-
Exchange Differences	3	- 1	- 2
Others	- 3	- 3	- 2
Financial Results	-78	-16	-13

2. Sales Evolution

	Total Sales Growth			LFL Sales Growth
	Q1 19	Q2 19	H1 19	Q1 19	Q2 19	H1 19
Biedronka
Euro	-0.8%	11.5%	5.2%
PLN	2.0%	12.1%	7.0%	-1.1%	8.6%	3.7%
Hebe
Euro	19.8%	28.7%	24.3%
PLN	23.3%	29.4%	26.4%	5.4%	10.3%	8.0%
Pingo Doce	2.6%	5.6%	4.1%	1.7%	4.9%	3.3%
Excl. Fuel	2.5%	5.8%	4.2%	1.6%	5.1%	3.4%
Recheio	1.9%	2.1%	2.0%	3.7%	3.2%	3.4%

3. Stores Network

			Openings	Closings
Number of Stores	2018	Q1 19	Q2 19	H1 19	H1 19	H1 18
Biedronka	2,900	8	19	11	2,916	2,832
Hebe *	230	8	9	0	247	200
Pingo Doce	432	2	2	0	436	425
Recheio	42	0	0	0	42	43
Ara	532	9	16	0	557	439

* H1 19: 247 stores: 30 pharmacies and 217 drugstores (21 of which include a pharmacy)

Sales Area (sqm)	2018		Openings	Closings Remodellings	H1 19	H1 18
		Q1 19	Q2 19	H1 19
Biedronka	1,933,104	5,783	14,182	3,436	1,949,632	1,870,804
Hebe	55,035	2,000	2,791	0	59,826	47,685
Pingo Doce	506,754	1,458	1,681	-142	510,035	504,661
Recheio	133,826	0	0	0	133,826	133,079
Ara	182,005	2,503	4,808	0	189,316	151,642

4. Total Borrowings Detail

(Million Euro)	H1 19	H1 18
Long Term Borrowings	296	217
as % of Total Borrowings	43.7%	35.8%
Average Maturity (years)	2.2	2.0
Other Borrowings	296	217
Short Term Borrowings	381	389
as % of Total Borrowings	56.3%	64.2%
Total Borrowings	677	606
Average Maturity (years)	1.3	1.0
% Total Borrowings in Euros	7.4%	14.9%
% Total Borrowings in Zlotys	44.8%	45.9%
% Total Borrowings in Colombian Pesos	47.8%	39.3%

5. Definitions

Like for like (LFL) sales: sales made by stores that operated under the same conditions in the two periods. Excludes stores opened or closed in one of the two periods. Sales of stores that underwent profound remodelling are excluded for the remodelling period (store closure).

Gearing: Net Debt / Shareholders' Funds.

6. Income Statement – Reconciliation Note

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

Income Statement (page 8)	Income Statement by Functions in the Consolidated Report & Accounts – First Half 2019 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 €-351.9 mn
EBITDA
Depreciation	Value reflected in the note - Operating costs by nature
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 (when applicable) and Gains/Losses in other investments (when applicable)
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 (page 9)	Balance Sheet in the Consolidated Report & Accounts - First Half 2019 Results
Net Goodwill	Included in the heading of Intangible assets
Net Fixed Assets	Includes the headings Tangible and Intangible assets excluding the Net goodwill (€641.2 mn) and Financial leases (€18.3 mn)
Net Right-of-Use Assets (RoU)	Includes the heading of Net rights of use excluding the Financial leases (€18.3 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 €-13.2 mn related to 'Others' due to its operational nature. Excludes the value of €-2.7 mn related to Interest accruals and deferrals (note – Net 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 €19.4 mn related to collateral Deposits associated to Financial debt (note - Trade debtors, Accrued income and Deferred costs); and also the value of €-13.2 mn related to Others due to its operational nature
Invested Capital
Total Borrowings	Includes the heading Borrowings current and non-current
Financial Leases	Value reflected in the headings of Lease liabilities current and non current
Capitalised Operating Leases	Value reflected in the headings of Lease liabilities current and non current excluding Financial leases liabilities (€18.8 mn)
Accrued Interest	Includes the heading Derivative financial instruments and the value of €-2.7 mn related to Interest accruals and deferrals (value reflected in note – Net financial debt)
Marketable Securities and Bank Deposits	Includes the heading Cash and cash equivalents and the value of €19.4 mn related to collateral deposits associated to Financial debt (reflected in note - Trade debtors) 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
Shareholders' Funds

8. Free Cash Flow - Reconciliation Note

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

Free Cash Flow (page 9)	Cash Flow in the Consolidated Report & Accounts - First Half 2019 Results
EBITDA	Included in the heading of Cash generated from operations
Capitalised Operating Leases Payment	Included in the heading Leases paid
Interest Payment	Includes the headings of Loans interest paid, Leases interest paid and Interest 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. It also includes acquisitions of tangible assets classified as finance leases under previous regulations (€6.0 mn)
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

9. Information Regarding Individual Financial Statements

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

III – OTHER INFORMATION

Disclosures required by sub-paras. a) and c) of no. 1 of Article 9 and no. 7 of Article 14 of Securities Market Commission (CMVM) regulation no. 5/2008 (with reference to the first Half of 2019)

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

Board of Directors

	Held on	31.12.18	Increases during the period		Decreases during the period		Held on 30.06.19
Members of the Board of Directors	Shares	Bonds	Shares	Bonds	Shares	Bonds	Shares	Bonds
Pedro Manuel de Castro Soares dos Santos	274,805	-	-	-	-	-	274,805	-
Andrzej Szlezak	-	-	-	-	-	-	-	-
António Pedro de Carvalho Viana-Baptista	-	-	-	-	-	-	-	-
José Soares dos Santos	n/a 3	-	-	-	-	-	20,509	-
Artur Stefan Kirsten	-	-	-	-	-	-	-	-
Belonging to company in which they areDirectors (sec. d), § 2 of Article 447 Commercial Companies Code)1	353,260,814	-	-	-	-	-	353,260,814	-
Clara Christina Streit	800	-	-	-	-	-	800	-
Francisco Manuel Seixas da Costa	-	-	-	-	-	-	-	-
Sérgio Tavares Rebelo	-	-	-	-	-	-	-	-
Elizabeth Ann Bastoni	n/a 3	-	-	-	-	-	-	-
María Ângela Holguín	n/a 3	-	-	-	-	-	-	-
Hans Eggerstedt	19,700	-	-	-	-	-	4 n/a	-
Henrique Manuel da Silveira e Castro Soares dos Santos	26,455 2	-	-	-	-	-	4 n/a	-

¹ Sociedade Francisco Manuel dos Santos, B.V.

² Of which 1,500 shares held by spouse

³ Appointed in April 11, 2019 to the Board of Directors

⁴ Ceased his duties as Director on April 11, 2019

Statutory Auditor

As at June 30th 2019, the Statutory Auditor Ernst & Young Audit & Associados - SROC, S.A., did not hold any shares and bonds of Jerónimo Martins, SGPS, S.A. and had not made any transactions with Jerónimo Martins, SGPS, S.A. securities.

2. List of Shareholders with Qualifying Holdings as at 30th June 2019

(Pursuant to sub-paragraph c) of paragraph 1 of Article 9 of the Portuguese Securities Code Regulations no. 5/2008)

Shareholder	No. of Shares Held	% Capital	No. of Voting Rights	% of Voting Rights *
Sociedade Francisco Manuel dos Santos, SGPS, S.E. Through Sociedade Francisco Manuel dos Santos, B.V.	353,260,814	56.136%	353,260,814	56.136%
Heerema Holding Company Inc. Through Asteck, S.A.	31,464,750	5.000%	31,464,750	5.000%
BNP Paribas Asset Management Holding S.A. Through Investment Funds Managed by BNP Paribas	21,775,581	3.460%	17,893,668	2.843%
JP Morgan Asset Management Holdings Through Investment Funds Managed by JP Morgan	14,815,917	2.354%	14,815,917	2.354%
Through JP Morgan Investment Management	n.a.	n.a.	n.a.	2.040%
T. Rowe Price Group, Inc. Through T. Rowe Price International Ltd	12,821,174	2.037%	12,694,305	2.017%
BlackRock, Inc.	n.a.	n.a.	12,676,760	2.014%

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

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

IV – STATEMENT OF THE BOARD OF DIRECTORS

Statement of the Board of Directors

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

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

Lisbon, 23 July 2019

Pedro Manuel de Castro Soares dos Santos (Chairman of the Board of Directors and Chief Executive Officer)

Andrzej Szlezak (Member of the Board of Directors)

António Pedro de Carvalho Viana-Baptista (Member of the Board of Directors)

Artur Stefan Kirsten (Member of the Board of Directors)

Clara Christina Streit (Member of the Board of Directors and Member of the Audit Committee)

Elizabeth Ann Bastoni (Member of the Board of Directors and Member of the Audit Committee)

Francisco Seixas da Costa (Member of the Board of Directors)

José Soares dos Santos (Member of the Board of Directors)

María Ángela Holguín (Member of the Board of Directors)

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

V – CONSOLIDATED FINANCIAL STATEMENTS

The Group adopted for the first time on 1 January 2019 the new standard IFRS 16 Leases, having applied the modified retrospective method. The comparative information for the year 2018 is not restated (See note 2.1.1.).

CONSOLIDATED INCOME STATEMENT BY FUNCTIONS FOR THE QUARTERS ENDED AT 30 JUNE 2019 AND 2018

					Euro thousand
		June	June	2nd Quarter	2nd Quarter
	Notes	2019	2018	2019	2018
Sales and services rendered	3	8,908,334	8,425,688	4,661,231	4,225,404
Cost of sales	4	(6,975,840)	(6,614,589)	(3,655,714)	(3,312,207)
Gross profit		1,932,494	1,811,099	1,005,517	913,197
Distribution costs	4	(1,467,282)	(1,410,359)	(746,337)	(705,014)
Administrative costs	4	(149,738)	(132,946)	(79,773)	(66,659)
Other operating profits/losses	4.1	(4,073)	(4,857)	(2,851)	(2,529)
Operating profit		311,401	262,937	176,556	138,995
Net financial costs	5	(77,711)	(13,348)	(37,437)	(8,754)
Gains (losses) in joint ventures and associates		139	(1)	136	3
Gains (losses) in other investments		46	-	46	-
Profit before taxes		233,875	249,588	139,301	130,244
Income tax	6	(59,737)	(62,722)	(31,780)	(31,382)
Profit before non-controlling interests		174,138	186,866	107,521	98,862
Attributable to:
Non-controlling interests		11,025	7,125	6,206	3,749
Jerónimo Martins Shareholders		163,113	179,741	101,315	95,113
Basic and diluted earnings per share - Euros	13	0.2596	0.2860	0.1612	0.1513

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

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE QUARTERS ENDED AT 30 JUNE 2019 AND 2018

					Euro thousand
	Notes	June 2019	June 2018	2nd Quarter 2019	2nd Quarter 2018
Net profit		174,138	186,866	107,521	98,862
Other comprehensive income:
Items that will not be reclassified to profit or loss		-	-	-	-
Currency translation differences		13,592	(40,589)	12,264	(30,832)
Change in fair value of cash flow hedges	8	(214)	(195)	(213)	17
Change in fair value of hedging instruments on foreign operations	8	(2,504)	3,691	(1,714)	-
Related tax		127	416	126	398
Items that may be reclassified to profit or loss		11,001	(36,677)	10,463	(30,417)
Other comprehensive income, net of income tax		11,001	(36,677)	10,463	(30,417)
Total comprehensive income		185,139	150,189	117,984	68,445
Attributable to:
Non-controlling interests		11,025	7,125	6,206	3,749
Jerónimo Martins Shareholders		174,114	143,064	111,778	64,696
Total comprehensive income		185,139	150,189	117,984	68,445

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

CONSOLIDATED BALANCE SHEET AT 30 JUNE 2019 AND 31 DECEMBER 2018

			Euro thousand
		June	December
	Notes	2019	2018
Assets Tangible assets	7	3,745,188	3,687,053
Intangible assets	7	795,425	792,514
Investment property	7	11,686	11,676
Right-of-use assets	7	2,359,802	-
Biological assets		3,877	3,398
Investments in joint ventures and associates		4,835	3,245
Other financial investments		1,321	1,321
Trade debtors, accrued income and deferred costs	9	85,783	84,713
Deferred tax assets		118,847	114,840
Total non-current assets		7,126,764	4,698,760
Inventories		940,752	970,653
Biological assets		4,084	3,790
Income tax receivable		5,562	5,035
Trade debtors, accrued income and deferred costs	9	361,213	435,642
Derivative financial instruments	8	-	59
Cash and cash equivalents	10	526,990	545,988
Total current assets		1,838,601	1,961,167
Total assets		8,965,365	6,659,927
Shareholders' equity and liabilities
Share capital		629,293	629,293
Share premium		22,452	22,452
Own shares		(6,060)	(6,060)
Other reserves		(66,045)	(77,046)
Retained earnings	12	1,168,131	1,209,259
		1,747,771	1,777,898
Non-controlling interests		234,121	238,356
Total Shareholders' equity		1,981,892	2,016,254
Borrowings	14	295,599	288,390
Lease liabilities	15	1,999,745	-
Trade creditors, accrued costs and deferred income	18	767	774
Derivative financial instruments	8	-	62
Employee benefits	17	68,357	65,069
Provisions for risks and contingencies	17	27,689	26,565
Deferred tax liabilities		61,536	75,627
Total non-current liabilities		2,453,693	456,487
Borrowings	14	381,162	350,814
Lease liabilities	15	378,237	-
Trade creditors, accrued costs and deferred income	18	3,734,342	3,794,411
Derivative financial instruments	8	1,652	159
Income tax payable		34,387	41,802
Total current liabilities		4,529,780	4,187,186
Total Shareholders' equity and liabilities		8,965,365	6,659,927

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

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS´EQUITY FOR THE PERIODS ENDED 30 JUNE 2019 AND 2018

									Euro thousand
						Shareholders' equity attributable to Shareholders of Jerónimo Martins, SGPS, S.A.
					Other reserves
	Share capital	Share premium	Own shares	Cash flow hedge	Currency translation reserves	Retained earnings	Total	Non-controlling interests	Shareholders' equity
Balance Sheet as at 1 January 2018	629,293	22,452	(6,060)	184	(51,293)	1,193,319	1,787,895	225,298	2,013,193
Equity changes in 2018
Currency translation differences				(2)	(40,208)		(40,210)		(40,210)
Change in fair value of cash flow hedging				(158)			(158)		(158)
Change in fair value of hedging instruments on foreign operations					3,691		3,691		3,691
Other comprehensive income	-	-	-	(160)	(36,517)	-	(36,677)	-	(36,677)
Net profit						179,741	179,741	7,125	186,866
Total comprehensive income	-	-	-	(160)	(36,517)	179,741	143,064	7,125	150,189
Dividends						(385,230)	(385,230)	(15,806)	(401,036)
Balance Sheet as at 30 June 2018	629,293	22,452	(6,060)	24	(87,810)	987,830	1,545,729	216,617	1,762,346
Balance Sheet as at 1 January 2019	629,293	22,452	(6,060)	(50)	(76,996)	1,209,259	1,777,898	238,356	2,016,254
Equity changes in 2019
Currency translation differences				(3)	13,681		13,678		13,678
Change in fair value of cash flow hedging				(173)			(173)		(173)
Change in fair value of hedging instruments on foreign operations					(2,504)		(2,504)		(2,504)
Other comprehensive income	-	-	-	(176)	11,177	-	11,001	-	11,001
Net profit						163,113	163,113	11,025	174,138
Total comprehensive income	-	-	-	(176)	11,177	163,113	174,114	11,025	185,139
Dividends (note 12)						(204,241)	(204,241)	(15,260)	(219,501)
Balance Sheet as at 30 June 2019	629,293	22,452	(6,060)	(226)	(65,819)	1,168,131	1,747,771	234,121	1,981,892

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

CONSOLIDATED CASH FLOW STATEMENT FOR THE QUARTERS ENDED AT 30 JUNE 2019 AND 2018

			Euro thousand
	Notes	June 2019	June 2018
Operating Activities
Cash received from customers		10,039,997	9,497,323
Cash paid to suppliers		(8,553,243)	(8,463,026)
Cash paid to employees		(776,479)	(727,994)
Cash generated from operations	11	710,275	306,303
Loans interest paid		(14,644)	(12,741)
Leases interest paid		(66,009)	-
Income taxes paid		(86,437)	(95,995)
Cash flow from operating activities		543,185	197,567
Investment activities
Disposals of tangible fixed assets		1,058	425
Disposals of other financial investments and investment property		-	2,096
Interest received		1,568	1,252
Dividends received		96	46
Acquisition of tangible fixed assets		(251,548)	(334,443)
Acquisition of intangible assets		(4,312)	(3,695)
Acquisition of joint ventures and associates		(1,500)	(1,000)
Cash flow from investment activities		(254,638)	(335,319)
Financing activities
Net change in loans	14	40,503	88,185
Leases paid	15	(132,758)	-
Dividends paid	12	(219,501)	(400,999)
Cash flow from financing activities		(311,756)	(312,814)
Net changes in cash and cash equivalents		(23,209)	(450,566)
Cash and cash equivalents changes
Cash and cash equivalents at the beginning of the year		545,988	681,333
Net changes in cash and cash equivalents		(23,209)	(450,566)
Effect of currency translation differences		4,211	(8,226)
Cash and cash equivalents at the end of 1st Half	10	526,990	222,541

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

			Euro thousand
June 2019	June 2018	2nd Quarter 2019	2nd Quarter 2018
543,185	197,567	372,865	105,459
(254,638)	(335,319)	(110,854)	(160,215)
(311,756)	(312,814)	(332,113)	(461,369)
(23,209)	(450,566)	(70,102)	(516,125)

The amounts presented for quarters are not audited.

2.	Accounting policies23
3.	Segments reporting26
4.	Operating costs by nature 27
5.	Net financial costs27
6.	Income tax recognised in the income statement28
7.	Tangible assets, intangible assets, investment property and right-of-use assets 28
8.	Derivative financial instruments29
9.	Trade debtors, accrued income and deferred costs 29
10.	Cash and cash equivalents 29
11.	Cash generated from operations 30
12.	Dividends 30
13.	Basic and diluted earnings per share30
14.	Borrowings30
15.	Lease liabilities 31
16.	Financial debt31
17.	Provisions and employee benefits31
18.	Trade creditors, accrued costs and deferred income32
19.	Contingencies32
20.	Related parties 32
21.	Events after the balance sheet date33

1. Activity

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

The Group operates in the food area, particularly in the distribution and sale of food and other fast-moving 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 July 2019.

2. Accounting policies

2.1. Basis for preparation

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

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

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, except for the adoption of new standards, amendments and interpretations, effective as of 1 January 2019, and 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 2018 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 2018 Annual Report, point 29 - 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 six months of 2019, 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:

2.1.1. New standards, amendments and interpretations adopted by the Group

Between November 2017 and March 2019, the EU issued the following Regulations, which were adopted by the Group from 1 January 2019:

EU Regulation	IASB Standard or IFRIC Interpretation endorsed by EU	Issued in	Mandatory for financial years beginning on or after
Regulation no. 1986/2017	IFRS 16 Leases (new)	January 2016	1 January 2019
Regulation no. 498/2018	IFRS 9 Financial Instruments: Prepayment Features with Negative Compensation (amendments)	October 2017	1 January 2019
Regulation no. 1595/2018	IFRIC 23 Uncertainty over Income Tax Treatments (new)	June 2017	1 January 2019
Regulation no. 237/2019	IAS 28 Investments in Associates and Joint Ventures: Long-term Interests in Associates and Joint Ventures (amendments)	October 2017	1 January 2019
Regulation no. 402/2019	IAS 19: Employee Benefits: Plan Amendment, Curtailment or Settlement (amendments)	February 2018	1 January 2019
Regulation no. 412/2019	Annual Improvements to IFRS's 2015–2017 Cycle: IFRS 3 Business Combinations; IFRS 11 Joint Arrangements; IAS 12 Income Taxes and IAS 23 Borrowing Costs (amendments)	December 2017	1 January 2019

The Group adopted the amendments and the new interpretation, with no significant impact on its Consolidated Financial Statements, except for the adoption of the new standard IFRS 16 Leases.

The Group adopted for the first time the new standard IFRS 16 Leases, with no restatement of the comparative Financial Statements. As required by IAS 34, the nature and effect of these changes are disclosed below:

IFRS 16 Leases

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

This single accounting model provides for the lessee the recognition of: i. assets and liabilities in the Balance Sheet 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.

The Group adopted the new standard from 1 January 2019, using the modified retrospective approach in its consolidated accounts, with no restatement of the 2018 comparative accounts and no impact on Group's Shareholder Equity at transition date.

The Group's operating leases relate mostly to store and warehouse rent contracts. In respect to its previous commitments regarding operating leases, in transition, the Group recognised at 1 January 2019 in the consolidated Balance Sheet right-of-use assets in the amount of EUR 2,402,949 thousand, lease liabilities in the amount of EUR 2,398,006 thousand and an adjustment in accruals and deferrals in the amount of EUR 4,943 thousand.

In respect to its previous commitments regarding finance leases, in transition, the carrying amount recognised in lease assets and lease liabilities as at 31 December 2018 (EUR 14,211 thousand and EUR 15,149 thousand, respectively) were considered as right-of-use assets and lease liabilities under IFRS 16 on 1 January 2019.

When measuring lease liabilities, the Group discounted lease payments using its incremental borrowing rate at 1 January 2019. The weighted-average rate applied is in the range of 2.5% – 8.9%, based on the features of the agreement (underlying asset and guarantees, currency and term).

In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:

• i) the use of a single discount rate to a portfolio of leases with reasonably similar characteristics;
• ii) the accounting for operating leases with a remaining lease term of less than 12 months at transition date as short-term leases;
• iii) the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application;
• iv) the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

The reconciliation between the amount of the Group's operating lease commitments as disclosed in the previous year's financial statements and the amount of lease liabilities recognised on the date of initial application is as follows:

Operating lease commitments disclosed as at 31 December 2018	3,063,579
Add: service contracts reassessed as lease contracts	47,865
(Less): short-term leases recognised on a straight-line basis as expense	(7,711)
(Less): low-value leases recognised on a straight-line basis as expense	(97)
Add/(less): adjustments as result of a different treatment of extension and termination options	527,141
Add/(less): other adjustments relating to first time application of IFRS 16	6,372
Undiscounted lease liability recognised as at 1 January 2019	3,637,149
Discounted using the group's incremental borrowing rate (average 5.67%)	(1,239,143)
Add: finance lease liabilities recognised as at 31 December 2018	15,149
Lease liability recognised as at 1 January 2019	2,413,155

The impact of the adoption of the new standard IFRS 16 in the opening balances at 1 January 2019 was as presented:

			Euro thousand
		Transition Adj.
	31/12/2018	IFRS 16	01/01/2019
Assets
Tangible assets	3,687,053	(14,211)	3,672,842
Intangible assets	792,514		792,514
Investment property	11,676		11,676
Right-of-use assets	-	2,417,160	2,417,160
Biological assets	3,398		3,398
Investments in joint ventures and associates	3,245		3,245
Other financial investments	1,321		1,321
Trade debtors, accrued income and deferred costs	84,713		84,713
Deferred tax assets	114,840		114,840
Total non-current assets	4,698,760	2,402,949	7,101,709
Inventories	970,653		970,653
Biological assets	3,790		3,790
Income tax receivable	5,035		5,035
Trade debtors, accrued income and deferred costs	435,642	(4,943)	430,699
Derivative financial instruments	59		59
Cash and cash equivalents	545,988		545,988
Total current assets	1,961,167	(4,943)	1,956,224
Total assets	6,659,927	2,398,006	9,057,933
Shareholders' equity and liabilities
Share capital	629,293		629,293
Share premium	22,452		22,452
Own shares	(6,060)		(6,060)
Other reserves	(77,046)		(77,046)
Retained earnings	1,209,259		1,209,259
	1,777,898	-	1,777,898
Non-controlling interests	238,356		238,356
Total Shareholders' equity	2,016,254	-	2,016,254
Borrowings	288,390	(10,866)	277,524
Lease liabilities	-	2,042,191	2,042,191
Trade creditors, accrued costs and deferred income	774		774
Derivative financial instruments	62		62
Employee benefits	65,069		65,069
Provisions for risks and contingencies	26,565		26,565
Deferred tax liabilities	75,627		75,627
Total non-current liabilities	456,487	2,031,325	2,487,812
Borrowings	350,814	(4,283)	346,531
Lease liabilities	-	370,964	370,964
Trade creditors, accrued costs and deferred income	3,794,411		3,794,411
Derivative financial instruments	159		159
Income tax payable	41,802		41,802
Total current liabilities	4,187,186	366,681	4,553,867
Total Shareholders' equity and liabilities	6,659,927	2,398,006	9,057,933

2.1.2. New standards, amendments and interpretations endorsed by EU but not effective for the financial year beginning 1 January 2019 and not early adopted

During the first six months of 2019, the EU did not issue any Regulation regarding the endorsement of new standards, amendments or interpretations that have not yet been implemented by the Group.

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

During the first six months of 2019, the IASB/IFRIC did not issued any new standards, amendments or interpretations.

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 reference rates ( x foreign exchange units per 1 euro )	Polish Zloty (PLN)	Swiss Franc (CHF)	Colombian Peso (COP)
Rate at 30 June 2019	4.2496	1.1105	3,638.4500
Average rate for the year	4.2913	-	3,602.7400
Rate at 30 June 2018	4.3732	1.1569	3,433.3900
Average rate for the year	4.2209	-	3,446.5300

3. Segments reporting

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

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

Business segments:

• Portugal Retail: comprises the business unit of JMR (Pingo Doce supermarkets);
• Portugal Cash & Carry: includes the wholesale business unit Recheio;
• Poland Retail: the business unit which operates under the Biedronka banner;
• Others, eliminations and adjustments: includes i. business units with reduced materiality (Coffee Shops, Chocolate Stores and 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 other operating profits/losses.

Detailed Information by Business Segments as at June 2019 and 2018

	Portugal Retail		Portugal Cash & Carry		Poland Retail		Others, eliminations and adjustments		Total JM Consolidated
	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018
Net sales and services	2,105,919	2,018,696	466,857	457,707	6,064,011	5,761,571	271,547	187,714	8,908,334	8,425,688
Inter-segments	208,528	196,982	2,250	1,324	790	705	(211,568)	(199,011)	-	-
External customers	1,897,391	1,821,714	464,607	456,383	6,063,221	5,760,866	483,115	386,725	8,908,334	8,425,688
Operational cash flow (EBITDA)	118,376	77,234	26,816	22,930	560,426	406,504	(38,291)	(60,237)	667,327	446,431
Depreciations and amortisations	(74,440)	(49,189)	(10,416)	(7,286)	(225,327)	(106,650)	(41,670)	(15,512)	(351,853)	(178,637)
Earnings before interest and taxes (EBIT)	43,936	28,045	16,400	15,644	335,099	299,854	(79,961)	(75,749)	315,474	267,794
Other operating profits/losses									(4,073)	(4,857)
Financial results and gains in investments									(77,526)	(13,349)
Income tax									(59,737)	(62,722)
Net result attributable to JM									163,113	179,741
Total assets (1)	2,181,875	1,755,330	468,908	754,050	5,196,609	3,885,422	1,117,973	265,125	8,965,365	6,659,927
Total liabilities (1)	1,707,360	1,272,571	461,645	735,172	4,318,610	2,805,321	495,858	(169,391)	6,983,473	4,643,673
Investments in tangible and intangible assets	63,194	40,677	11,860	15,192	107,600	164,395	47,810	73,335	230,464	293,599

(1) The comparative report is 31 December of 2018

Reconciliation between EBIT and operational result

	Jun 2019	Jun 2018
EBIT	315,474	267,794
Other operating profits/losses	(4,073)	(4,857)
Operational result	311,401	262,937

4. Operating costs by nature

	Jun 2019	Jun 2018
Cost of goods sold and materials consumed	(6,969,550)	(6,603,779)
Changes in inventories of finished goods and work in progress	5,473	1,619
Net cash discount and interest paid to suppliers	19,196	13,710
Electronic payment commissions	(17,847)	(15,782)
Other supplementary costs	(2,794)	(2,161)
Supplies and services	(331,167)	(302,099)
Advertising costs	(50,201)	(51,674)
Rents	(7,525)	(193,890)
Staff costs	(781,548)	(725,122)
Depreciation and amortisation of tangibles and intangibles assets	(193,070)	(178,637)
Amortisation of right-of-use assets	(158,783)	-
Profit/loss with tangible and intangible assets	(2,074)	(1,741)
Profit/loss with right-of-use assets	272	-
Transportation costs	(98,211)	(91,324)
Other natures of profit/loss	(9,104)	(11,871)
Total	(8,596,933)	(8,162,751)

4.1. Other operating profits/losses

Operating costs by nature include the following other operating losses and gains considered material, which are excluded from the Group's performance indicators, to assure a better comparability between financial periods:

	Jun 2019	Jun 2018
Legal contingencies	-	(15)
Losses from organizational restructuring programmes	(3,136)	(4,297)
Assets write-offs and gains/losses in sale of tangible assets	(937)	(545)
Total	(4,073)	(4,857)

5. Net financial costs

	Jun 2019	Jun 2018
Banks interest expense	(13,159)	(10,574)
Leasing interest expense	(66,009)	-
Interest received	1,555	1,239
Dividends	-	46
Net foreign exchange	(721)	(2,341)
Net foreign exchange on leasing	3,733	-
Other financial gains and losses	(2,417)	(2,055)
Fair value of financial investments held for trade:
Derivative instruments (note 8)	(693)	337
Total	(77,711)	(13,348)

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 gains and losses include costs with debt issued by the Group, booked in results through effective interest method.

6. Income tax recognised in the income statement

	Jun 2019	Jun 2018
Current income tax
Current tax of the year	(81,129)	(60,782)
Adjustment to prior year estimation	2,896	(1,712)
	(78,233)	(62,494)
Deferred tax
Temporary differences created and reversed	16,507	(6,260)
Change to the recoverable amount of tax losses and temporary differences from previous years	1,453	841
	17,960	(5,419)
Other gains/losses related to tax
Impact of changes in estimates for tax litigations	536	5,191
	536	5,191
Total income tax	(59,737)	(62,722)

Income tax expense is calculated based on the weighted average annual income tax rate expected for the year.

In 2019 the income tax rates for Group companies were the same applied in 2018.

7. Tangible assets, intangible assets, investment property and right-of-use assets

		Tangible assets Intangible assets	Investment property	Right-of-use assets	Total
Net value at 31 December 2018	3,687,053	792,514	11,676	-	4,491,243
Foreign exchange differences	35,619	5,278	-	28,345	69,242
Changes in accounting policies	(14,211)	-	-	2,417,160	2,402,949
Increases	226,151	4,313	-	68,219	298,683
Contracts update	-	-	-	40,164	40,164
Disposals and write-offs	(3,133)	-	-	-	(3,133)
Contracts cancellation	-	-	-	(35,174)	(35,174)
Transfers	(100)	229	-	(129)	-
Depreciation, amortisation and impairment losses	(186,161)	(6,909)	-	(158,783)	(351,853)
Transfers from/to investment property	(30)	-	30	-	-
Fair value changes	-	-	(20)	-	(20)
Net value at 30 June 2019	3,745,188	795,425	11,686	2,359,802	6,912,101

Net value of intangible assets at 30 June 2019 include Goodwill amounted EUR 641,229 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 and right-of-use assets increased by EUR 69,242 thousand, which includes an increase of EUR 3,743 thousand related to Goodwill from businesses in Poland.

8. Derivative financial instruments

				Jun 2019		Dec 2018
	Notional	Assets		Liabilities		Notional	Assets		Liabilities
		Current	Non current	Current	Non current		Current	Non current	Current	Non current
Derivatives held for trading
Currency forwards - stock purchase (COP/USD)	1 million USD	-	-	41	-	-	-	-	-	-
Currency forwards - stock purchase (EUR/USD)	0,3 million USD	-	-	2	-	-	-	-	-	-
Currency forwards - stock purchase (PLN/EUR)	94 million EUR	-	-	655	-	68 million EUR	33	-	31	-
Cash flow hedging derivatives
Interest rate swap (PLN)	172 million PLN	-	-	49	-	177 million PLN	-	-	-	62
Currency forwards - stock purchase (PLN/USD)	14 million USD	-	-	230	-		-	-	-	-
Foreign operation investments hedging derivatives
Currency forwards (PLN)	279 million PLN	-	-	675	-	567 million PLN	26	-	128	-
Total derivatives held for trading		-	-	698	-		33	-	31	-
Total hedging derivatives		-	-	954	-		26	-	128	62
Total assets/liabilities derivatives		-	-	1,652	-		59	-	159	62

9. Trade debtors, accrued income and deferred costs

	Jun 2019	Dec 2018
Non-current
Other debtors	64,445	63,522
Collateral deposits associated to financial debt	19,367	19,367
Deferred costs	1,971	1,824
Total	85,783	84,713
Current
Commercial customers	62,784	58,417
Other debtors	115,728	128,523
Other taxes receivable	5,550	7,945
Accrued income and deferred costs	177,151	240,757
Total	361,213	435,642

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. Debtors with overdue amounts are subject to an analysis of the probability of future losses, based on historical information, taking into account the nature of the commercial relationship established, as well as to existing collateral and credit insurance, with reinforcements/reversals of adjustments for impairment losses recognized when justified.

10. Cash and cash equivalents

	Jun 2019	Dec 2018
Bank deposits	402,954	394,279
Short-term investments	120,096	147,870
Cash and cash equivalents	3,940	3,839
Total	526,990	545,988

11. Cash generated from operations

	Jun 2019	Jun 2018
Net results	163,113	179,741
Adjustments for:
Non-controlling interests	11,025	7,125
Income tax	59,737	62,722
Depreciations and amortisations	351,853	178,637
Provisions and other operational gains and losses	15,747	10,727
Net financial costs	77,711	13,394
Gains/Losses in associated companies	(139)	1
Gains/Losses in other investments	(46)	(46)
Profit/ Losses in tangible, intangible and right-of-use assets	1,802	1,741
	680,803	454,042
Changes in working capital:
Inventories	26,638	(54,815)
Trade debtors, accrued income and deferred costs	(3,342)	(8,275)
Trade creditors, accrued costs and deferred income	6,176	(84,649)
Total	710,275	306,303

12. Dividends

Dividends distributed in 2019 totalling EUR 219,501 thousand, were paid to JMH shareholders in the amount of EUR 204,241 thousand, and to non-controlling interests in the Group Companies in the amount of EUR 15,260 thousand.

13. Basic and diluted earnings per share

	Jun 2019	Jun 2018
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	163,113	179,741
Basic and diluted earnings per share – Euros	0.2596	0.2860

14. Borrowings

The Group has negotiated commercial paper programs in the total amount of EUR 335,000 thousand, of which EUR 135,000 thousand are committed. The utilizations under these programs are remunerated at the Euribor rate for the respective issue period, plus variable spreads.

During the first Half of the year, some emissions were carried out for short periods to meet specific cash requirements, but without any utilization at the end of June 2019.

Last year Money Market lines were contracted by Jerónimo Martins, SGPS, S.A. and JMR, SGPS, S.A., with a limit of EUR 70,000 thousand, and a regular utilization has been made in the first months of the current year.

A new loan was negotiated for the JM Nieruchomości company with a two-year PLN 400,000 thousand limit (around EUR 94,100 thousand), which was partially used to pay the financing of PLN 300,000 thousand that the company already held with the same bank and that matured in April.

The financing lines that Jerónimo Martins Colombia, SAS holds with local banks were increased for an amount above COP 165,000,000 thousand, around EUR 45,000 thousand, with maturity of 1 year.

14.1. Current and non-current loans

Jun 2019	Opening balance	Change acc. policy	Cash flows	Transfers	Foreign exchange difference	Closing balance
Non-current loans
Bank loans	277,524	-	(50,870)	65,144	3,801	295,599
Financial lease liabilities	10,866	(10,866)	-	-	-	-
Total	288,390	(10,866)	(50,870)	65,144	3,801	295,599
Current loans
Bank overdrafts	-	-	16,417	-	161	16,578
Bank loans	346,531	-	74,956	(65,144)	8,241	364,584
Financial lease liabilities	4,283	(4,283)	-	-	-	-
Total	350,814	(4,283)	91,373	(65,144)	8,402	381,162
Dec 2018	Opening balance	Change acc. policy	Cash flows	Transfers	Foreign exchange difference	Closing balance
Non-current loans
Bank loans	231,508	-	133,226	(79,390)	(7,820)	277,524
Financial lease liabilities	6,254	-	10,487	(5,649)	(226)	10,866
Total	237,762	-	143,713	(85,039)	(8,046)	288,390
Current loans
Bank overdrafts	6	-	(6)	-	-	-
Bank loans	297,526	-	(12,125)	79,390	(18,260)	346,531
Financial lease liabilities	1,973	-	(3,260)	5,649	(79)	4,283
Total	299,505	-	(15,391)	85,039	(18,339)	350,814

15. Lease liabilities

Jun 2019	Opening balance	Change acc. policy	New contracts	Cash flows	Transfers	Contracts change/ cancel	Foreign exchange difference	Closing balance
Lease liabilities - non-current	-	2,042,191	58,734	(1,140)	(122,498)	1,629	20,829	1,999,745
Lease liabilities - current	-	370,964	9,485	(131,618)	122,498	3,088	3,820	378,237
Total	-	2,413,155	68,219	(132,758)	-	4,717	24,649	2,377,982

16. Financial debt

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

	Jun 2019	Dec 2018
Non-current loans (note 14.1)	295,599	288,390
Current loans (note 14.1)	381,162	350,814
Financial lease liabilities - non-current (note 15)	1,999,745	-
Financial lease liabilities - current (Note 15)	378,237	-
Derivative financial instruments (note 8)	1,652	162
Interest on accruals and deferrals	2,725	1,750
Bank deposits (note 10)	(402,954)	(394,279)
Short-term investments (note 10)	(120,096)	(147,870)
Collateral deposits associated to financial debt (note 9)	(19,367)	(19,367)
Total	2,516,703	79,600

17. Provisions and employee benefits

	Risks and	Employee
	contingencies	benefits
Balance at 1 January	26,565	65,069
Set up, reinforced and transfers	4,690	4,238
Unused and reversed	(3,392)	-
Foreign exchange difference	83	288
Used	(257)	(1,238)
Balance at 30 June	27,689	68,357

18. Trade creditors, accrued costs and deferred income

	Jun 2019	Dec 2018
Non-current
Other commercial creditors	42	37
Accrued costs and deferred income	725	737
Total	767	774
Current
Other commercial creditors	2,987,084	3,039,806
Other non-commercial creditors	216,097	233,232
Other taxes payables	127,087	113,996
Contracts liabilities with customers	4,961	3,722
Refunds liabilities to customers	751	1,041
Accrued costs and deferred income	398,362	402,614
Total	3,734,342	3,794,411

19. Contingencies

Following the contingencies mentioned in the 2018 Annual Report, occurred the following changes:

Contingent liabilities

• b) 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 SGPS, which led to additional assessments concerning 2002 to 2015, amounting to EUR 81,304 thousand, of which an amount of EUR 71,200 thousand is still in dispute. In the meantime, the Lisbon Tax Court has ruled partially in favour of the Group regarding the 2002, 2003, 2004, 2005 and 2007 assessments. The Group appealed to a higher court;
• i) The Food and Veterinary Department (Direcção-Geral de Alimentação e Veterinária) claimed from Pingo Doce, Recheio and Hussel an amount of EUR 18,782 thousand, EUR 1,886 thousand and EUR 41 thousand, respectively, in respect of the Food Safety Tax (Taxa de Segurança Alimentar Mais – TSAM) assessed for the years 2012 to 2019. 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. Despite the court having decided that the Food Safety Tax is not unconstitutional, the Companies maintain their understanding and presented the respective appeal to the Constitutional Court, which kept the decision. Pingo Doce complained of the decision to the Conference of Judges, and at the same time filed a complaint with the European Commission based on illegal state aid. The disputes are still running their course. The Group regularly assesses the risk and likelihood of its conclusion. However, in order to protect its legitimate interests and not to harm its position in these disputes, it does not disclose the amounts that could be provisioned.

In a lawsuit brought by a former landlord of the subsidiary Jeronimo Martins Polska SA (JMP) the plaintiff claims from the company the amount of PLN 10,360 thousand, as compensation for loss of profit, corresponding to rents that would have been due if the underlying lease agreement had not been terminated by the company. Given that the property has been sold in the meantime, JMP considers that the compensation claimed is not due, at least in the amount claimed since it must be taken into account that the former landlord was able to dispose of the property, which, incidentally, could have alternatively leased to a third party. The case is running its course and the court has referred the parties to mediation, whose first session is scheduled for August 2019.

20. 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 Half of 2019, neither were there any amounts payable or receivable between them on 30 June 2019.

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

	Joint ventures		Other related parties (*)
	Jun 2019	Jun 2018	Jun 2019	Jun 2018
Sales and services rendered	-	-	54	98
Interest income	23	-	-	-
Stocks purchased and services supplied	2,065	-	58,297	58,820
	Joint ventures		Other related parties (*)
	Jun 2019	Dec 2018	Jun 2019	Dec 2018
Trade debtors, accrued income and deferred costs	15	28	21	58
Trade creditors, accrued costs and deferred income	975	518	7,606	2,484

(*) Other related parties corresponds to Other financial investments ,entities participated and/or 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 trade agreements, 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.

21. 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 July 2019

The Certified Accountant The Board of Directors

Ernst & Young Audit & Associados - SROC, S.A. Avenida da República, 90-6º 1600-206 Lisboa Portugal

(Translation from the original Portuguese language. In case of doubt, the Portuguese version prevails.)

Limited review report on the consolidated financial statements

Introduction

We have performed a limited review on the consolidated financial statements of Jerónimo Martins, S.G.P.S., S.A., which comprise the consolidated statement of financial position as at 30 June 2019 (showing a total of 8.965.365 thousand Euros and a shareholder's equity total of 1.981.892 thousand Euros, including a consolidated net profit attributable to equity holders of the parent of 163.113 thousand Euros), consolidated income statement by functions, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the six month period then ended, and the notes to the consolidated financial statements which includes a summary of significant accounting policies.

Board of Directors responsibilities

The Board of Directors is responsible for the preparation of the consolidated financial statements in accordance with the International Financial Reporting Standards as endorsed by the European Union for Interim Financial Reporting (IAS 34), and for the design and maintenance of an appropriate system of internal control to enable the preparation of consolidated financial statements which are free from material misstatement due to fraud or error.

Auditor's Responsibilities

Our responsibility is to express an opinion on these consolidated financial statements based on our review. We conducted our review in accordance with the International Standard on Review Engagements 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity, and other rules and technical and ethical requirements issued by the Institute of Statutory Auditors. Those standards require that our work is performed in order to conclude that nothing has come to our attention that causes us to believe that the consolidated financial statements have not been prepared in all material respects in accordance with the International Financial Reporting Standards as endorsed by the European Union for Interim Financial Reporting (IAS 34)

A review of financial statements is a limited assurance engagement. The procedures performed consisted primarily of making inquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluating the evidence obtained.

The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on these consolidated financial statements.

Conclusion

Based on our review procedures, nothing has come to our attention that causes us to believe that the consolidated financial statements of Jerónimo Martins, S.G.P.S., S.A., as at 30 June 2019, have not been prepared, in all material respects, in accordance with the International Financial Reporting Standards as endorsed by the European Union for Interim Financial Reporting (IAS 34).

Lisbon, 2 August 2019

Ernst & Young Audit & Associados – SROC, S.A. Sociedade de Revisores Oficiais de Contas (n.º 178) Represented by:

(Signed)

João Carlos Miguel Alves - ROC n.º896 Registered with the Portuguese Securities Market Commission under license nr 20160515