Jeronimo Martins — Interim / Quarterly Report 2022

Aug 24, 2022

Jerónimo Martins | R&A First Half 2022

CONSOLIDATED REPORT AND ACCOUNTS

FIRST HALF

U

1

INDEX

Message from the Chairman and CEO - Pedro Soares dos Santos
I – MANAGEMENT REPORT
1. Performance Overview & Key Drivers	4
2. Performance Analysis by Banner	5
3. Consolidated Financial Information Analysis	7
4. Outlook for 2022	8
5. Management Report Appendix	9
5.1. The Impact of IFRS 16 on Financial Statements	9
5.2. Sales Detail	10
5.3. Stores Network	11
5.4. Working Capital	11
5.5. Total Borrowings	12
5.6. Definitions	12
5.7. List of Shareholders with Qualifying Holdings as at 30 June 2022	12
6. Reconciliation Notes	13
7. Information Regarding Individual Financial Statements	15

II – CONSOLIDATED FINANCIAL STATEMENTS

1. Consolidated Financial Statements	15
2. Statement of Board of Directors	30
3. Auditor´s Report	31

Message from the Chairman and CEO

Pedro Soares dos Santos

'Amidst extreme uncertainty, with high food inflation, an energy crisis without precedent in this century, and disruptions in international supply chains, the strength of our teams' performance in the first six months of the year is undeniable. This excellent performance reflects the success of our strategic commitment to defend competitiveness in all Group Companies, the resilience of their supply chains, and the efficiency of their business models.

Our banners maintained the quality of their value propositions and have reinforced their commercial assertiveness and margin investments to mitigate the sharp increase in food prices and its effects on consumer behaviour.

Despite a further decrease in Polish consumer confidence, food demand in Poland remained resilient. In Portugal and Colombia, generalized inflation has had a more immediate impact on consumption.

Meanwhile the energy crisis is driving ongoing, significant hikes in electricity and transport costs that require an increased focus from the teams on the rigorous management of productivity and efficiency. This situation advises prudence when considering the evolution of inflation in general and its socio-economic consequences.

In this context and in line with our long-term vision, we will keep the competitiveness and efficiency of our models as our main priorities.

I believe that the first half results confirm the ability of our teams to navigate turbulent waters and to make the necessary decisions to create shared value and achieve our vision of profitable, sustainable growth. This ability is even more critical on the verge of a new economic and geopolitical order that will reshape global supply chains and consumption patterns'.

I - CONSOLIDATED MANAGEMENT REPORT

Competitiveness Drives Good Performance of Sales and Profits in a Context of Mounting Inflation

1. Performance Overview & Key Drivers

H1 I KEY FIGURES

+20.0% SALES TO €11.9 BN (+21.7% excl. FX)

+19.1% EBITDA TO €851 MN (+21.2% excl. FX)

+40.3% NET EARNINGS TO €261 MN EPS AT €0.42

CASH FLOW AT €97 MN

NET DEBT AT €1.9 BN

In a context of increasing generalized price rises, intensified in Q2, the Group's banners showed an impressive ability to implement measures that limited food inflation's adverse impact on our consumers.

All Group Companies reinforced their price competitiveness throughout the period, protecting volumes and mitigating the expected trade down. This dynamic allowed them to deliver remarkable sales growth.

In Poland, Biedronka continued to focus its commercial strategy on containing the rise in food prices. The assertiveness with which it assumed its role as an "anti-inflation shield" contributed decisively to the 21.3% increase in local-currency sales (+26.9% in Q2).

Relative to H1 21, Hebe benefited from the lifting of all restrictions related to the pandemic and grew local-currency sales by 34.7% (+40.4% in Q2). Despite changing consumer behaviour, online sales continued to gain relevance and represented 14.6% of the total.

In Portugal, Pingo Doce focused on offering saving opportunities to its consumers and grew sales by 8.5% (+10.9% in Q2). Recheio benefited from the tourism recovery, registering a notable top-line growth of 28.9% (+26.8% in Q2).

In Colombia, food inflation remained above 20%, pressuring consumers to trade down. Ara invested in prices, turning challenging circumstances into an opportunity to strengthen its market position and its consumer recognition. As a result, sales grew by a remarkable 70.1% in local currency in the first six months of the year (+74.9% in Q2).

Our focus on competitiveness and volume protection drove the Group's EBITDA to grow 19.1% vs. H1 21. EBITDA margin was 7.2%, in line with the same period in the previous year. In Q2, the EBITDA margin was 7.5% vs. 7.7% in Q2 21, mainly reflecting price investments and significant cost inflation.

Amidst ongoing uncertainty, all banners delivered solid performances while strengthening their market positions.

The Balance Sheet remains solid with a net cash position (excluding capitalized operating leases liabilities) of 593 million euros at the end of June, after a dividend payment in May of 493 million euros.

Despite the pressures felt by the businesses, the Group also registered significant progress in its corporate responsibility pillars. Highlights include:

• With the release for the second consecutive year of its report "Contributing to a forest-positive future" the Group reaffirmed its policies, commitments, and progress in fighting deforestation and the creation of high-conservation value ecosystems;

• JM Agribusiness acquired a 10.1% stake in a Norwegian sustainable salmon production company. Its ambition is to develop the most sustainable and "fish-friendly" land-based aquaculture facilities in the world;

• Biedronka signed an agreement that will allow it to have, by the end of 2025, 2,000 stores equipped with photovoltaic panels;

• Pingo Doce was the main sponsor of One Sustainable Ocean, the largest official and free-access side event in the United Nations Ocean Conference that took place in Lisbon.

2. Performance Analysis by Banner

POLAND

In Poland, food sales continued to record solid growth driven by higher inflation and volume increases. The measures implemented by the government to protect consumers from the increasing pressure over disposable income, combined with a more extensive consumer base due to the flow of Ukrainian refugees to Poland, should have contributed to this trend.

Food inflation registered a progressive increase over the six months, reaching 11.1% in H1 (13.4% in Q2).

Biedronka's commercial strategy has focused on a continuous effort to contain price increases and offer strong promotional campaigns in baskets that are

relevant to the families.

In the six months, sales in local currency grew 21.3%, with LFL at 17.5%. In euros, sales reached 8.3 billion, 18.7% ahead of H1 21.

In Q2 22, the banner's competitiveness allowed for a strong performance. This delivery was also boosted by a more extensive consumer base in the Polish market and by the Easter season, which, in the prior year, took place in Q1.

In Q2 22, sales in local currency grew 26.9%, with LFL at 22.5%. In euros, sales reached 4.4 billion, 23.7% ahead of Q2 21. Higher basket inflation also contributed to top-line growth.

The reinforcement in competitiveness was key to the Company's remarkable EBITDA growth of 15.4% (+17.9% in local currency). The respective margin stood at 8.7% (8.9% in H1 21). The evolution of this margin reflects the strategy of investing in price and increasing cost inflation, in which the sharp rise in the price of electricity and fuel stands out.

Following its investment programme, Biedronka opened 40 stores in H1 (33 net additions) and remodelled 127 locations.

Hebe opened eight stores in the period (five net additions).

PORTUGAL

In Portugal, the generalized rise in prices put pressure on consumption and led to trading down in the food sector and to an increase in the weight of private brands on sales. On the other hand, the strong recovery in tourism underpinned the good performance of the HoReCa sector in the first half of the year.

Food inflation increased over the period and stood at 8.6% in the first half (11.9% in Q2).

Pingo Doce maintained the intensity of its commercial actions in a context of greater pressure on disposable incomes.

The banner's sales grew 8.5% (+10.9% in Q2) to reach 2.1 billion euros, with LFL, excluding fuel, at 6.5% (+9.3% in Q2). Inflation in the basket was also an element of performance.

EBITDA was 120 million euros, 7.8% above H1 21. The respective margin was 5.8%, in line with the previous year.

In the period, Pingo Doce opened three new stores, having closed one location.

Recheio was well prepared to benefit from the HoReCa channel recovery. As a result, our wholesale company posted strong sales growth against the same period of the previous year, which was affected by pandemic-related restrictions on the HoReCa channel and low tourism activity.

The banner's sales reached 513 million euros, 28.9% above H1 21 (+26.8% in Q2), with LFL at 29.3% (+27.0% in Q2).

Recheio's EBITDA amounted to 24 million euros, 61.1% above H1 21. The respective margin was 4.6% (versus 3.7% in H1 21), with strong sales growth allowing the recovery of operating leverage.

COLOMBIA

In Colombia, the sharp increase in food prices, with the respective inflation at 23.3% (23.8% in Q2), continued to impact consumer behaviour and led to trading down in the food basket.

consumers.

In a particularly challenging context for Colombian families, Ara continued to reinforce its low-price proposal and offered relevant promotions as a way to gain even more relevance to

As a result of this strategy, local-currency sales grew by 70.1% in the first six months, including LFL of 44.3%. Inflation and a base of comparison that was adversely impacted by the pandemic also contributed to the performance.

In euros, sales reached 824 million, 74.1% above H1 21.

In Q2 22, sales grew by 74.9% (+86.8% in euros) with LFL of 48.9%.

Sales growth led to an improvement of the banner's EBITDA margin from 1.3% in H1 21 to 3.1% in H1 22. EBITDA amounted to 26 million euros (versus 6 million euros in H1 21).

Ara opened 57 stores in the period (56 net additions).

3. Consolidated Financial Information Analysis

Consolidated Results

(€ Million)	H1 22		H1 21		D	Q2 22		Q2 21		D
Net Sales and Services	11,883		9,902		20.0%	6,370		5,116		24.5%
Gross Profit	2,507	21.1%	2,133	21.5%	17.5%	1,323	20.8%	1,104	21.6%	19.8%
Operating Costs		-1,656 -13.9%		-1,419 -14.3%	16.7%		-843 -13.2%		-711 -13.9%	18.6%
EBITDA	851	7.2%	715	7.2%	19.1%	479	7.5%	393	7.7%	22.0%
Depreciation	-385	-3.2%	-371	-3.7%	3.8%	-195	-3.1%	-186	-3.6%	4.8%
EBIT	466	3.9%	343	3.5%	35.6%	284	4.5%	206	4.0%	37.6%
Net Financial Costs	-85	-0.7%	-74	-0.7%	15.1%	-40	-0.6%	-30	-0.6%	35.0%
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	-25	-0.2%	-6	-0.1%	n.a.	-12	-0.2%	-3	-0.1%	n.a.
EBT	356	3.0%	264	2.7%	34.9%	232	3.6%	174	3.4%	33.3%
Income Tax	-85	-0.7%	-70	-0.7%	22.3%	-54	-0.8%	-41	-0.8%	30.0%
Net Profit	270	2.3%	194	2.0%	39.4%	178	2.8%	133	2.6%	34.3%
Non-Controlling Interests	-9	-0.1%	-8	-0.1%	17.8%	-5	-0.1%	-4	-0.1%	18.1%
Net Profit Attributable to JM	261	2.2%	186	1.9%	40.3%	173	2.7%	129	2.5%	34.8%
EPS (€)	0.42		0.30		40.3%	0.28		0.20		34.8%
EPS without Other Profits/Losses (€)	0.45		0.30		48.2%	0.29		0.21		40.3%

Net Financial Expenses were -85 million euros versus -74 million euros in H1 21. These costs include the recognition of currency translation losses of -6 million euros, related to value adjustments of operating lease liabilities capitalized in Poland denominated in euros (+3 million euros in H1 21).

Balance Sheet

(€ Million)	H1 22	2021	H1 21
Net Goodwill	612	618	623
Net Fixed Assets	4,207	4,159	3,943
Net Rights of Use (RoU)	2,280	2,221	2,176
Total Working Capital	-3,175	-3,290	-2,770
Others	185	145	178
Invested Capital	4,109	3,852	4,149
Total Borrowings	470	460	507
Financial Leases	38	22	19
Capitalised Operating Leases	2,444	2,365	2,299
Accrued Interest	1	0	0
Cash and Cash Equivalents	-1,101	-1,527	-933
Net Debt	1,851	1,320	1,892
Non-Controlling Interests	245	254	240
Share Capital	629	629	629
Reserves and Retained Earnings	1,383	1,649	1,388
Shareholders Funds	2,258	2,532	2,257

The Group registered a net cash position (excluding capitalised operating lease liabilities) of 593 million euros by the end of June 2022.

Cash Flow

(€ Million)	H1 22	H1 21
EBITDA	851	715
Capitalised Operating Leases Payment	-148	-138
Interest Payment	-77	-75
Other Financial Items	0	0
Income Tax	-106	-110
Funds From Operations	520	392
Capex Payment	-405	-252
Change in Working Capital	5	-53
Others	-24	-4
Cash Flow	97	82

Capex

(€ Million)	H1 22	Weight	H1 21	Weight
Biedronka	161	51%	120	60%
Distribution Portugal	ರಿ5	30%	43	21%
Ara	34	11%	19	9%
Others	28	9%	18	9%
Total CAPEX	318	100%	200	100%

The Investment Programme reached 318 million euros in the period, of which 51% were channelled to Biedronka.

4. Outlook 2022

There is significant uncertainty associated with the developments of the war in Ukraine and the Covid-19 pandemic impacts on global supply chains.

Since the beginning of the military conflict, there has been a further escalation of inflationary pressures on food, energy, and transport, which is expected to be more pronounced in the second half of the year. In addition, the volatility of Eastern European and LatAm currencies has increased.

With rising food inflation and interest rates pressuring household disposable incomes and consumer confidence, it is even more critical to maintain price competitiveness and create saving opportunities through promotional activities.

The effort to contain prices will be implemented in a context where cost inflation will increase the pressure on the percent margins of our banners.

We, therefore, maintain the outlook for the year as presented on March 9, 2022, when the 2021 results were released.

Lisbon, 26 July 2022

The Board of Directors

5. Management Report Appendix

5.1. The impact of IFRS 16 on Financial Statements

Income Statement by Functions

(€ Million)	IFRS16		Excl. IFRS16
	H1 22	H1 21	H1 22	H1 21
Net Sales and Services	11,883	9,902	11,883	9,902
Cost of Sales	-9,377	-7,769	-9,377	-7,769
Gross Profit	2,507	2,133	2,507	2,133
Distribution Costs	-1,843	-1,617	-1,894	-1,661
Administrative Costs	-198	-173	-199	-174
Other Operating Profits/Losses	-25	-6	-25	-6
Operating Profit	441	338	389	293
Net Financial Costs	-85	-74	-12	-13
Gains/Losses in Other Investments	0	0	0	0
Gains in Joint Ventures and Associates	0	0	0	0
Profit Before Taxes	356	264	377	280
Income Tax	-85	-70	-89	-72
Profit Before Non Controlling Interests	270	194	288	208
Non-Controlling Interests	-9	-8	-10	-9
Net Profit Attributable to JM	261	186	278	199

Income Statement (Management View)

	(Excl. IFRS16)				(Excl. IFRS16)
(€ Million)	H1 22			H1 21		Q2 22			Q2 21
Net Sales and Services	11,883		9,902		20.0%	6,370		5,116		24.5%
Gross Profit	2,507	21.1%	2,133	21.5%	17.5%	1,323	20.8%	1,104	21.6%	19.8%
Operating Costs	-1,871	-15.7%	-1,621	-16.4%	15.5%	-953	-15.0%	-813	-15.9%	17.2%
EBITDA	635	5.3%	513	5.2%	23.9%	370	5.8%	291	5.7%	27.0%
Depreciation	-222	-1.9%	-214	-2.2%	3.5%	-112	-1.8%	-108	-2.1%	4.0%
EBIT	414	3.5%	299	3.0%	38.5%	258	4.1%	184	3.6%	40.4%
Net Financial Costs	-12	-0.1%	-13	-0.1%	-8.1%	-3	0.0%	-6	-0.1%	-54.9%
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	-25	-0.2%	-6	-0.1%	n.a.	-12	-0.2%	-3	-0.1%	n.a.
EBT	377	3.2%	280	2.8%	34.6%	243	3.8%	174	3.4%	39.3%
Income Tax	-89	-0.7%	-72	-0.7%	22.6%	-55	-0.9%	-41	-0.8%	33.6%
Net Profit	288	2.4%	208	2.1%	38.8%	188	2.9%	133	2.6%	41.0%
Non-Controlling Interests	-10	-0.1%	-9	-0.1%	13.0%	-5	-0.1%	-5	-0.1%	13.9%
Net Profit Attributable to JM	278	2.3%	199	2.0%	39.9%	182	2.9%	128	2.5%	42.0%
EPS (€)	0.44		0.32		39.9%	0.29		0.20		42.0%
EPS without Other Profits/Losses (€)	0.47		0.32		47.4%	0.30		0.21		47.4%

Balance Sheet

(€ Million)	(Excl. IFRS16)
	H1 22	2021	H1 21
Net Goodwill	612	618	623
Net Fixed Assets	4,207	4,159	3,943
Total Working Capital	-3,170	-3,287	-2,765
Others	158	121	157
Invested Capital	1,807	1,611	1,958
Total Borrowings	470	460	507
Financial Leases	38	22	19
Accrued Interest	1	0	0
Cash and Cash Equivalents	-1,101	-1,527	-933
Net Debt	-593	-1,046	-407
Non-Controlling Interests	255	262	247
Share Capital	629	629	629
Reserves and Retained Earnings	1,516	1,765	1,488
Shareholders Funds	2,400	2,657	2,365

Cash Flow

	(Excl. IFRS16)
(€ Million)	H1 22	H1 21
EBITDA	635	513
Interest Payment	-10	-11
Other Financial Items	0	0
Income Tax	-106	-110
Funds From Operations	520	392
Capex Payment	-405	-252
Change in Working Capital	5	-54
Others	-23	-3
Cash Flow	97	82

EBITDA Breakdown

	IFRS16				Excl. IFRS16
(€ Million)	H1 22	Mg	H1 21	Mg	H1 22	Mg	H1 21	Mg
Biedronka	721	8.7%	624	8.9%	574	6.9%	486	7.0%
Hebe	1 0	6.3%	5	4.4%	-2	n.a.	-6	n.a.
Pingo Doce	120	5.8%	112	5.8%	8 7	4.2%	7 9	4.1%
Recheio	2 4	4.6%	1 5	3.7%	2 1	4.1%	1 2	3.0%
Ara	2 6	3.1%	6	1.3%	5	0.6%	-11	n.a.
Others & Cons. Adjustments	-49	n.a.	-47	n.a.	-51	n.a.	-49	n.a.
JM Consolidated	851	7.2%	715	7.2%	635	5.3%	513	5.2%

Financial Results

(€ Million)	IFRS16		Excl. IFRS16
	H1 22	H1 21	H1 22	H1 21
Net Interest	-7	-8	-7	-8
Interests on Capitalised Operating Leases	-67	-64	-	-
Exchange Differences	-7	1	-1	-2
Others	-3	-2	-3	-2
Net Financial Costs	-85	-74	-12	-13

5.2. Sales Detail

(€ Million)	H1 22		H1 21		D %		Q2 22		Q2 21		D %
		% total		% total	excl. FX	Euro		% total		% total	excl. FX	Euro
Biedronka	8,289	69.8%	6,981	70.5%	21.3%	18.7%	4,446	69.8%	3,594	70.2%	26.9%	23.7%
Hebe	163	1.4%	123	1.2%	34.7%	31.8%	9 1	1.4%	6 6	1.3%	40.4%	36.9%
Pingo Doce	2,086	17.6%	1,922	19.4%		8.5%	1,102	17.3%	993	19.4%		10.9%
Recheio	513	4.3%	398	4.0%		28.9%	285	4.5%	224	4.4%		26.8%
Ara	824	6.9%	473	4.8%	70.1%	74.1%	442	6.9%	237	4.6%	74.9%	86.8%
Others & Cons. Adjustments	9	0.1%	4	0.0%		n.a.	5	0.1%	2	0.0%		n.a.
Total JM	11,883	100%	9,902	100%	21.7%	20.0%	6,370	100%	5,116	100%	26.2%	24.5%

Sales Growth

		Total Sales Growth		LFL Growth
	Q1 22	Q2 22	H1 22	Q1 22	Q2 22	H1 22
Biedronka
Euro	13.4%	23.7%	18.7%
PLN	15.4%	26.9%	21.3%	12.2%	22.5%	17.5%
Hebe
Euro	25.9%	36.9%	31.8%
PLN	28.0%	40.4%	34.7%	20.8%	32.2%	26.9%
Pingo Doce	6.0%	10.9%	8.5%	4.7%	9.9%	7.4%
Excl. Fuel	4.8%	10.3%	7.7%	3.5%	9.3%	6.5%
Recheio	31.6%	26.8%	28.9%	32.1%	27.0%	29.3%
Ara
Euro	61.3%	86.8%	74.1%
COP	65.0%	74.9%	70.1%	39.5%	48.9%	44.3%
Total JM
Euro	15.2%	24.5%	20.0%
Excl. FX	16.8%	26.2%	21.7%	13.0%	21.6%	17.5%

5.3. Stores Network

Number of Stores		Openings		Closings	H1 22	H1 21
	2021	Q1 22	Q2 22	H1 22
Biedronka *	3,250	1 6	2 4	7	3,283	3,154
Hebe	291	3	5	3	296	273
Pingo Doce	465	2	1	1	467	456
Recheio	4 2	0	0	0	4 2	4 2
Ara	819	1 4	4 3	1	875	704

Sales Area (sqm)	2021	Openings		Closings Remodellings	H1 22	H1 21
		Q1 22	Q2 22	H1 22
Biedronka *	2,241,562	11,030	17,120	-5,202	2,274,914	2,160,062
Hebe	75,164	760	1,193	761	76,356	70,871
Pingo Doce	535,847	2,093	1,000	-1,460	540,400	526,566
Recheio	134,321	0	0	0	134,321	133,928
Ara	278,547	4,622	15,535	424	298,280	237,548

* Excluding the stores and selling area related to 14 Micro Fulfilment Centres (MFC) to supply Biek's operation (ultra-fast delivery)

5.4. Working Capital

	IFRS16		Excl. IFRS16
(€ Million)	H1 22	H1 21	H1 22	H1 21
Inventories	1,295	1,038	1,295	1,038
in days of sales	20	19	20	19
Customers	37	38	37	38
in days of sales	1	1	1	1
Suppliers	-3,781	-3,111	-3,781	-3,111
in days of sales	-58	-57	-58	-57
Others	-725	-735	-721	-730
Total Working Capital	-3,175	-2,770	-3,170	-2,765
in days of sales	-48	-51	-48	-51

2.06% 12,983,594 2.06%

12,947,912 2.06% 12,947,912 2.06%

12,821,174 2.04% 12,694,305 2.02%

5.5. Total Borrowings

(€ Million)	H1 22	H1 21
Long Term Borrowings	278	349
as % of Total Borrowings	59.2%	68.9%
Average Maturity (years)	5.9	6.3
Short Term Borrowings	191	158
as % of Total Borrowings	40.8%	31.1%
Total Borrowings	470	507
Average Maturity (years)	3.6	4.6
% Total Borrowings in Euros	0.0%	0.0%
% Total Borrowings in Zlotys	35.3%	43.3%
% Total Borrowings in Colombian Pesos	64.7%	56.7%

5.6. Definitions

Comgest Global Investors, S.A.S.

Through T. Rowe Price International Ltd

BlackRock, Inc

T. Rowe Price Group, Inc.

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).

5.7. List of Shareholders with Qualifying Holdings as at 30 June 2022

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

No. of Shares Held	% Capital	No. of Voting Rights	% of Voting Rights
			56.14%
	353,260,814	56.14%	353,260,814

12,983,594

6. Reconciliation Note

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

Income Statement

Income Statement (page 7)	Consolidated Income Statement by Functions (in Consolidated Financial Statements) First Half 2022 Results
Net Sales and Services	Net sales and services
Gross Profit	Gross profit
Operating Costs	Includes headings of Distribution costs; Administrative costs and Other operating profits/losses, excluding the amount of €-385 million related with Depreciations and amortisations (note 3 - Segments Reporting)
EBITDA
Depreciation	Value reflected in the note 3 - Segments Reporting
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/Losses in disposal of business (when applicable) and Gains/Losses in other investments (when applicable)
EBT	Profit before taxes
Income Tax	Income tax
Net Profit	Profit before non-controlling interests
Non-Controlling Interests	Non-Controlling interests
Net Profit Attributable to JM	Net profit attributable to Jerónimo Martins Shareholders

Balance Sheet

Balance Sheet (page 7)	Consolidated Balance Sheet at 30 June 2022 (in Consolidated Financial Statements)
Net Goodwill	Amount reflected in the heading of Intangible assets
Net Fixed Assets	Includes the headings Tangible and Intangible assets (excluding the Net goodwill €612 million) and adding the Financial leases amount (€44 million)
Net Rights of Use (RoU)	Includes the heading of Net rights of use excluding the Financial leases (€44 million)
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; and also, the value of €-20 million related to 'Others' due to its operational nature. Excludes the amount of €41 million of Short-term investments that don't qualify as cash equivalents (note 10 - Debtors, accruals and deferrals), the amount of €-1 million related with Interest accruals and deferrals heading (note 16 - 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; Provisions for risks and contingencies. Excludes the value of €-20 million related to 'Others' due to its operational nature
Invested Capital
Total Borrowings	Includes the heading Borrowings current and non-current
Financial Leases	Includes the heading of Financial leases (2022: €38 million; 2021: €22 million) according with IAS 17 in place before IFRS16 adoption
Capitalised Operating Leases	Amount in the heading of Lease liabilities current and non-current, excluding Financial leases (heading above)
Accrued Interest	Includes the headings Derivative financial instruments and the amount of €-1 million related with Interest accruals and deferrals (note 16 - Financial net debt)
Cash and Cash Equivalents	Includes the heading Cash and cash equivalents and the amount of €41 million of Short-term investments that don't qualify as cash equivalents (note 10 - Debtors, accruals and deferrals)
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

Cash Flow

Cash Flow (page 7)	Consolidated Cash Flow Statement (in Consolidated Financial Statements) First Half 2022
EBITDA	Includes the headings Cash generated from operations before changes in working capital, including headings which did not generate cash flow, and excluding profit and losses that do not have operational nature (€24 million)
Capitalised Operating Leases Payment	Included in the heading Leases paid, excluding the amount of €3 million related with the payment of financial leases according with previous accounting standards
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 and intangible assets; Disposal of financial and investment property; Acquisition of tangible and intangible assets; Acquisition of financial investments and investment property. It also includes acquisitions of tangible assets classified as finance leases under previous accounting standards (€-20 million), and excludes net change in Short-term investments that don't qualify as cash equivalents (€9 million)
Change in Working Capital	Includes Changes in working capital added from headings which did not generate cash flow
Others	Includes the headings Disposal of business (when applicable), and profit and losses which generated cash flow, although not having operational nature, in the amount of €-24 million
Cash Flow	Corresponds to the Net change in cash and cash equivalents, deducted from Dividends paid and received, Net change in loans, and net change in Short-term investments that don't qualify as cash (€9 million). It also includes acquisitions of tangible assets classified as finance leases (€-20 million) and deducted from the payment of financial leases (€3 million), both according with previous accounting standards

7. Information Regarding Individual Financial Statements

In accordance with number 5 of article 10 of the Regulation number 5/2008 of the Portuguese Securities Market Commission (CMVM), the first Half 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.

II - Consolidated Financial Statements
1. Consolidated Financial Statements
CONSOLIDATED INCOME STATEMENT BY FUNCTIONS	17
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	17
CONSOLIDATED BALANCE SHEET	18
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY	19
CONSOLIDATED CASH FLOW STATEMENT	20
Index to the Notes to the Consolidated Financial Statements	Page
1. Activity	21
2. Accounting policies	21
3. Segments reporting	23
4. Operating costs by nature	24
5. Net financial costs	24
6. Income tax recognised in the income statement	25
7. Tangible assets, intangible assets, investment property and right-of-use assets	25
8. Other financial investments	25
9. Derivative financial instruments	26
10. Trade debtors, accrued income and deferred costs	26
11. Cash and cash equivalents	26
12. Dividends	26
13. Basic and diluted earnings per share	27
14. Borrowings	27
15. Lease liabilities	27
16. Financial net debt	27
17. Provisions and employee benefits	28
18. Trade creditors, accrued costs and deferred income	28
19. Contingencies	28
20. Related parties	29
21. Events after the balance sheet date	29

CONSOLIDATED INCOME STATEMENT BY FUNCTIONS

For the periods ended 30 June 2022 and 2021

				€ Million
	June	June	2nd Quarter	2nd Quarter
Notes	2022	2021	2022	2021
3	11,883	9,902	6,370	5,116
4	(9,377)	(7,769)	(5,047)	(4,012)
	2,507	2,133	1,323	1,104
4	(1,843)	(1,617)	(941)	(814)
4	(198)	(173)	(97)	(84)
4.1	(25)	(6)	(12)	(3)
	441	338	272	204
5	(85)	(74)	(40)	(30)
	356	264	232	174
6	(85)	(70)	(54)	(41)
	270	194	178	133
	9	8	5	4
	261	186	173	129
13	0.4159	0.2965	0.2760	0.2047

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

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the periods ended 30 June 2022 and 2021

				€ Million
	June	June	2nd Quarter	2nd Quarter
	2022	2021	2022	2021
Net profit	270	194	178	133
Other comprehensive income:
Change in fair value of equity instruments	1	‐	1	‐
Items that will not be reclassified to profit or loss	1	‐	1	‐
Currency translation differences	(18)	6	(6)	29
Change in fair value of hedging instruments on foreign operations	(16)	(3)	(2)	(10)
Related tax	(1)	0	(0)	2
Items that may be reclassified to profit or loss	(35)	4	(8)	21
Other comprehensive income, net of income tax	(34)	4	(7)	21
Total comprehensive income	236	198	172	153
Attributable to:
Non-controlling interests	9	8	5	4
Jerónimo Martins Shareholders	227	190	167	149
Total comprehensive income	236	198	172	153

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

CONSOLIDATED BALANCE SHEET

As at 30 June 2022 and 31 December 2021

			€ Million
		June	December
	Notes	2022	2021
Assets
Tangible assets	7	4,025	3,993
Intangible assets	7	750	757
Investment property	7	9	8
Right-of-use assets	7	2,323	2,248
Biological assets		6	5
Investments in joint ventures and associates		13	13
Other financial investments	8	19	2
Trade debtors, accrued income and deferred costs	10	57	57
Deferred tax assets		173	175
Total non-current assets		7,377	7,256
Inventories		1,281	1,108
Biological assets		7	7
Income tax receivable		27	23
Trade debtors, accrued income and deferred costs	10	571	479
Derivative financial instruments	9	0	1
Cash and cash equivalents	11	1,060	1,494
Total current assets		2,946	3,112
Total assets		10,324	10,368
Shareholders' equity and liabilities
Share capital		629	629
Share premium		22	22
Own shares		(6)	(6)
Other reserves		(174)	(140)
Retained earnings		1,541	1,773
		2,012	2,278
Non-controlling interests		245	254
Total shareholders' equity		2,258	2,532
Borrowings	14	278	347
Lease liabilities	15	2,072	1,993
Trade creditors, accrued costs and deferred income	18	1	1
Employee benefits	17	71	70
Provisions for risks and contingencies	17	39	34
Deferred tax liabilities		73	66
Total non-current liabilities		2,534	2,511
Borrowings	14	191	113
Lease liabilities	15	410	394
Trade creditors, accrued costs and deferred income	18	4,908	4,771
Derivative financial instruments	9	0	1
Income tax payable		22	47
Total current liabilities		5,532	5,325
Total shareholders' equity and liabilities		10,324	10,368

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 2022 and 2021

										€ Million
Shareholders' equity attributable to Shareholders of Jerónimo Martins, SGPS, S.A.
					Other reserves					Non
	Share capital	Share premium	Own shares	Cash flow hedge	Fair Value of financial assets	Currency translation reserves	Retained earnings	Total	controlling interests	Shareholders' equity
Balance Sheet as at 1 January 2021	629	22	(6)	0	-	(129)	1,491	2,008	249	2,257
Equity changes in 2021
Currency translation differences				0		6		6		6
Change in fair value of hedging instruments on foreign operations						(3)		(3)		(3)
Other comprehensive income	-	-	-	0	-	4	-	4	-	4
Net profit							186	186	8	194
Total comprehensive income	-	-	-	0	-	4	186	190	8	198
Dividends							(181)	(181)	(17)	(198)
Acquisitions/Disposal of non-controlling interests							-	-	1	1
Balance Sheet as at 30 June 2021	629	22	(6)	0	-	(125)	1,496	2,017	240	2,257
Balance Sheet as at 1 January 2022	629	22	(6)	‐	-	(140)	1,773	2,278	254	2,532
Equity changes in 2022
Currency translation differences				(0)		(19)		(19)		(19)
Change in fair value of hedging instruments on foreign operations						(16)		(16)		(16)
Change in fair value of equity instruments					1			1		1
Other comprehensive income	-	-	-	0	1	(35)	-	(34)	-	(34)
Net profit							261	261	9	270
Total comprehensive income	-	-	-	0	1	(35)	261	227	9	236
Dividends (note 12)							(493)	(493)	(17)	(511)
Balance Sheet as at 30 June 2022	629	22	(6)	0	1	(175)	1,541	2,012	245	2,258

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

CONSOLIDATED CASH FLOW STATEMENT

For the periods ended 30 June 2022 and 2021

			€ Million
		June	June
	Notes	2022	2021
Net results		261	186
Adjustments for:
Non-controlling interests		9	8
Income tax		85	70
Depreciations and amortisations		385	371
Net financial costs		85	74
Profit/ Losses in tangible, intangible and right-of-use assets		1	2
Operating cash flow before changes in working capital		827	711
Changes in working capital:
Inventories		(187)	(55)
Trade debtors, accrued income and deferred costs		3	(2)
Trade creditors, accrued costs and deferred income		181	1
Provisions and employee benefits		8	3
Cash generated from operations		833	658
Income taxes paid		(106)	(110)
Cash flow from operating activities		727	548
Investment activities
Disposals of tangible and intangible assets		6	1
Interest received		3	0
Acquisition of tangible and intangible assets		(374)	(234)
Acquisition of other financial investments and investment property		(26)	(0)
Acquisition of businesses, net of cash acquired		(1)	(5)
Cash flow from investment activities		(392)	(238)
Financing activities
Loans interest paid		(12)	(11)
Leases interest paid	5	(68)	(64)
Net change in loans	14	(2)	(1)
Leases paid	15	(151)	(145)
Dividends paid	12	(511)	(198)
Cash flow from financing activities		(744)	(419)
Net changes in cash and cash equivalents		(409)	(110)
Cash and cash equivalents changes
Cash and cash equivalents at the beginning of the year		1,494	1,041
Net changes in cash and cash equivalents		(409)	(110)
Effect of acquisition/sale of subsidiaries		‐	1
Effect of currency translation differences		(26)	1
Cash and cash equivalents at the end of June	11	1,060	933

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

				€ Million
	June	June	2nd Quarter	2nd Quarter
	2022	2021	2022	2021
Cash Flow from operating activities	727	548	624	349
Cash Flow from investment activities	(392)	(238)	(206)	(126)
Cash Flow from financing activities	(744)	(419)	(601)	(337)
Cash and cash equivalents changes	(409)	(110)	(183)	(114)

*The amounts presented in 2020 in Provisions and other operating gains and losses are no longer adjusted to the Net results and are now included in Changes in

The amounts presented for quarters are not audited.

working capital

1. Activity

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

The Group operates in the food area, particularly in the distribution and retail sale, with operations in Portugal, Poland, and Colombia.

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

Share Capital: 629,293,220 euros.

Registered at the Commercial Registry Office and Tax Number: 500 100 144.

JMH has been listed on the Euronext Lisbon since 1989.

The Board of Directors approved these Consolidated Financial Statements on 26 July 2022.

Covid-19 and war in Ukraine

Covid-19 pandemic continues, in 2022, tto impact the way of living of people and companies, albeit to a lessor extend due to the progress of vaccination plans combined with virus' variants with less serious consequences for health.

JMH has been monitoring the evolution of events after 24 February 2022, with the beginning of the military conflict triggered by the invasion of Ukraine by the Russian Federation. Since the beginning of the war conflict, there has been a further escalation of inflationary pressures on food, energy, and transport, with direct impact on the Group's operations.

Taking into account the events that have taken place so far, although the next few months are likely to continue surrounded by uncertainty regarding the evolution of the pandemic scenario and the military conflict, no effects are expected that could jeopardize the continuity of the different banners' operations.

The Group expects to continue to mitigate the impacts of this adverse context, strengthening its business models, preparing the return to a more normalized operating context and maintaining its strategic vision of profitable growth, as expected by Shareholders and remaining stakeholders.

2. Accounting policies

2.1. Basis for preparation

All amounts are shown in million euros (€ million) unless otherwise stated. Due to rounding's, numbers shown may not exactly match the totals shown.

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 JMH 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 2022, and essentially 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, the accounting policies as well as some of the notes from the 2021 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 2021 Annual Report, point 27 - 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 half of 2022, despite the abovementioned events, 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.

Despite the impact of the Covid-19 pandemic and the war between Ukraine and the Russian Federation in its activity, the Group expects to satisfy all its treasury needs with the use of operating activity flows and liquidity reserves, and if eventually necessary, using the existing available credit lines.

Change in accounting policies and basis for preparation:

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

In June 2021 the EU issued the following Regulation, which were adopted by the Group with effect from 1 January 2022:

EU Regulation	IASB Standard or IFRIC Interpretation endorsed by EU	Issued in	Mandatory for financial years beginning on or after
Regulation no. 1080/2021	IFRS 3 Business Combinations: References to the Conceptual Framework (amendments) IAS 16 Property, Plant and Equipment: Income prior to expected use (amendments) IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Costs of fulfilling onerous contracts (amendments) 2018-2020 cycle of improvements to the IFRS standards: IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 9 Financial Instruments, IFRS 16 Leases and IAS 41 Agriculture (amendments)	May 2020	1 January 2022

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

2.1.2. New standards, amendments and interpretations endorsed by EU but not effective for the financial year beginning 1 January 2022 and not early adopted

The EU endorsed in 2022 several amendments, issued by the IASB, to be applied in subsequent periods:

EU Regulation	IASB Standard or IFRIC Interpretation endorsed by EU	Issued in	Mandatory for financial years beginning on or after
Regulation no. 357/2022	IAS 1 Presentation of Financial Statements: Disclosure of Accounting policies (amendments) IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (amendments)	February 2021	1 January 2023

The above amendments are effective for annual periods beginning on or after 1 January 2023 and have not been applied in preparing these Consolidated Financial Statements. None of these changes are expected to have a significant impact on the Group's Consolidated Financial Statements.

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

During the first half of 2022 the IASB did not issued new standards neither amendments to existing standards that are still pending endorsement by the EU.

2.1.4. Change of accounting policies

Except as disclosed above, the Group has not changed its accounting policies during 2022, nor were identified errors regarding previous years, which compel the restatement of Financial Statements.

2.2. Transactions in foreign currencies

Transactions in foreign currencies are translated into the functional currency (euro) at the exchange rate prevailing on the transaction date.

At 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 cash flow hedges or hedges on investments in foreign subsidiaries or when classified as other financial investments, which are equity instruments, the exchange differences are deferred in equity.

The main exchange rates applied on the balance sheet date are those listed below:

Euro foreign exchange reference rates (x foreign exchange units per 1 euro)	Polish Zloty (PLN)	Colombian Peso (COP)
Rate at 30 June 2022	4.6904	4,287.2000
Average rate for the period	4.6367	4,269.5000
Rate at 30 June 2021	4.5201	4,464.4300
Average rate for the period	4.5381	4,370.6600

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, Poland Retail and Colombia Retail. Apart from these there are also other businesses which due to their low materiality, are not reported separately.

The identified operating segments are:

• Portugal Retail: comprises the business unit of JMR (Pingo Doce supermarkets);
• Portugal Cash & Carry: includes the business unit Recheio (Wholesale operation of cash & carry and foodservice);
• Poland Retail: the business unit which operates under Biedronka banner;
• Colombia Retail: the business unit which operates under Ara banner;
• Others, eliminations and adjustments: include i. business units with reduced materiality (Coffee Shops, Chocolate Stores and Agribusiness in Portugal, and Health and Beauty Retail in Poland); ii. the Holding Companies; and iii. Group's consolidation adjustments.

Detailed information by operating segments as at June 2022 and 2021

	Portugal Retail		Portugal Cash & Carry		Poland Retail		Colombia Retail		Others, eliminations and adjustments		Total JM Consolidated
	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021
Net sales and services	2,328	2,105	513	398	8,289	6,981	824	473	(71)	(56)	11,883	9,902
Inter-segments	242	183	3	2	‐	‐	‐	‐	(245)	(185)	‐	‐
External customers	2,086	1,922	510	396	8,289	6,981	824	473	174	129	11,883	9,902
Operational cash flow (EBITDA)	120	112	24	15	721	624	26	6	(39)	(42)	851	715
Depreciations and amortisations	(78)	(76)	(10)	(10)	(244)	(239)	(30)	(25)	(23)	(22)	(385)	(371)
Earnings before interest and taxes (EBIT)	43	35	13	5	476	386	(5)	(19)	(62)	(64)	466	343
Other operating profits/losses											(25)	(6)
Financial results and gains in investments											(85)	(74)
Income tax											(85)	(70)
Net result attributable to JM											261	186
Total assets (1)	2,358	2,243	478	457	5,843	6,137	949	856	696	676	10,324	10,368
Total liabilities (1)	1,858	1,726	476	448	4,966	4,965	930	830	(163)	(132)	8,066	7,836
Investments in tangible and intangible assets	79	24	16	10	141	115	34	19	10	13	281	181

(1) The comparative report is 31 December of 2021

Reconciliation between EBIT and operating profit

	2022	2021
EBIT	466	343
Other operating profits/losses	(25)	(6)
Operational result	441	338

4. Operating costs by nature

	Jun 2022	Jun 2021
Cost of goods sold and materials consumed	(9,246)	(7,656)
Changes in inventories of finished goods and work in progress	6	5
Net cash discount and interest paid to suppliers	26	16
Electronic payment commissions	(29)	(23)
Other supplementary costs	(120)	(99)
Supplies and services	(460)	(369)
Advertising costs	(54)	(48)
Rents	(10)	(9)
Staff costs	(1,024)	(906)
Transportation costs	(146)	(108)
Depreciation and amortisation of tangibles and intangibles assets	(219)	(213)
Depreciation of right-of-use assets	(167)	(159)
Profit/loss with tangible and intangible assets	(2)	(2)
Profit/loss with right-of-use assets	1	-
Other natures of profit/loss	-	4
Total	(11,443)	(9,565)

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 2022	Jun 2021
Donations and other solidarity measures with Ukraine	(9)	‐
Donation to the World Youth Day Event	(3)	‐
Increase of provisions for legal contingencies	(7)	-
Losses from organizational restructuring programmes	(6)	(5)
Assets write-offs and gains/losses in sale of tangible assets	-	(1)
Total	(25)	(6)

5. Net financial costs

	Jun 2022	Jun 2021
Loans interest expense	(10)	(8)
Leases interest expense	(68)	(64)
Interest received	3	-
Net foreign exchange	(1)	(1)
Net foreign exchange on leases	(6)	3
Other financial gains and losses	(3)	(2)
Fair value of financial investments held for trade:
Derivative instruments (note 9)	-	(1)
Total	(85)	(74)

Interest expense includes the interest on loans measured at amortised cost.

Exchange differences on Net foreign exchange on leases refer to the exchange rate update, reported on 30 June, on the euro-denominated lease contracts of the subsidiaries Jeronimo Martins Polska, SA (JMP or Biedronka) and Jeronimo Martins Drogerie i Farmacja Sp.zo.o. (JMDiF or Hebe), compared to the amount recognised at the end of the previous year (31 December).

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

6. Income tax recognised in the income statement

	Jun 2022	Jun 2021
Current income tax
Current tax of the year	(85)	(83)
Adjustment to prior year estimation	3	3
Total	(82)	(80)
Deferred tax
Temporary differences created and reversed	(5)	12
Change to the recoverable amount of tax losses and temporary differences from previous years	(2)	(2)
Total	(7)	11
Other gains/losses related to tax
Impact of changes in estimates for tax litigations	4	-
Total	4	-
Total income tax	(85)	(70)

In 2022 and 2021, the Corporate Income Tax rate (CIT) applied to companies operating in Portugal was 21%. For companies with a positive tax result, there is a surcharge of 1.5% regarding municipal tax, and an additional state tax that varies between 3%, 5% and 9%, for taxable profits higher than €1.5 million, €7.5 million and €35 million, respectively.

In Poland, for 2022 and 2021, the income tax rate applied to taxable income was 19%.

In Colombia, the income tax rate was changed to 35% in 2022 (31% in 2021). In 2022, if a taxable loss is determined, a tax rate of 0.5% is levied on the net asset value (0.5% in 2021).

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 2021	3,993	757	8	2,248	7,006
Foreign exchange differences	(20)	(8)	‐	(12)	(40)
Increases	272	8	‐	116	396
Contracts update	‐	‐	‐	156	156
Disposals and write-offs	(6)	-	‐	‐	(6)
Contracts cancellation	‐	‐	‐	(18)	(18)
Depreciation, amortisation and impairment losses	(213)	(6)	‐	(167)	(385)
Transfers from/to investment property	(1)	‐	1	‐	-
Net value at 30 June 2022	4,025	750	9	2,323	7,108

The increase in tangible assets correspond to the Group's investments in new stores and distribution centres and remodelling of the existing stores.

Net value of intangible assets at 30 June 2022 include Goodwill in the amount of €612 million.

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 decreased €40 million, which includes a decrease of €6 million related to Goodwill from businesses in Poland.

8. Other financial investments

	Jun 2022	Dec 2021
Listed equity investments
Andfjord Salmon AS	18	‐
Total	18	‐
Non-listed equity investments
Total	2	2
Total other financial investments	19	2

On 22 June 2022, the Group took a 10.1% share, for an amount of NOK (Norwegian krone) 174 million (equivalent to €17 million), in the capital of the company Andfjord Salmon AS, located on the island of Andøya in Vesterålen, Norway. The company has developed a seawater flow-through technology that combines the benefits from traditional ocean net-pens and land-based salmon farming.

Listed equity investments

Andfjord Salmon AS is listed in Euronext Growth Oslo under the ticker ANDF.

The Group decided to classify irrevocably this listed equity investment as financial asset designated at fair value through other comprehensive income (OCI).

The fair value of this equity investment is determined by reference to the published price quotations in an active market (close price of 30 June 2022 – NOK 44.00; exchange rate of 30 June 2022 – EUR/NOK 10.3485).

Non-listed equity investments

The Group elected to classify irrevocably its non-listed equity investments under financial asset designated at fair value through OCI, as the Group considers these investments to be strategic in nature. When the equity instrument fair value cannot be reliably measured, it is recognized at cost.

9. Derivative financial instruments

	Jun 2022				Dec 2021
	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/EUR)	0.4 million EUR	0	-	-	-	4.5 million EUR	0	-	0	-
Currency forwards - stock purchase (COP/USD)	1.2 million USD	0	-	-	-	5.8 million USD	0	-	0	-
Currency forwards - stock purchase (EUR/USD)	-	-	-	-	-	0.2 million USD	0	-	-	-
Currency forwards - stock purchase (PLN/USD)	-	-	-	-	-	0.1 million USD	0	-	-	-
Cash flow hedging derivatives
Currency forwards - stock purchase (COP/EUR)	2.1 million EUR	0	-	-	-	-	-	-	-	-
Currency forwards - stock purchase (COP/USD)	1.9 million USD	0	-	-	-	-	-	-	-	-
Foreign operation investments hedging derivatives
Currency forwards (PLN)	417 million PLN	0	-	0	-	844 million PLN	1	-	1	-
Total derivatives held for trading		0	-	-	-		0	-	0	-
Total hedging derivatives		0	-	0	-		1	-	1	-
Total assets/liabilities derivatives		0	-	0	-		1	-	1	-

10. Trade debtors, accrued income and deferred costs

	Jun 2022	Dec 2021
Non-current
Other debtors	55	54
Deferred costs	2	3
Total	57	57
Current
Commercial customers	56	52
Other debtors	188	160
Other taxes receivable	13	9
Accrued income and deferred costs	273	225
Short-term investments that don't qualify as cash equivalents	41	33
Total	571	479

11. Cash and cash equivalents

	Jun 2022	Dec 2021
Bank deposits	791	961
Short-term investments	265	529
Cash in hand	4	4
Total	1,060	1,494

12. Dividends

Dividends in the amount of €511 million were paid in 2022, to JMH shareholders in the amount of €493 million and to partners with non-controlling interests in the Group companies in the amount of €17 million.

13. Basic and diluted earnings per share

	Jun 2022	Jun 2021
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	261	186
Basic and diluted earnings per share – Euros	0.4159	0.2965

14. Borrowings

The Group has negotiated commercial paper programs in the total amount of €265 million, of which €115 million are committed. The utilizations under these programs are remunerated at the Euribor rate for the respective issue period plus variable spreads and can also be issued on auctions. These programs had no utilizations as of 30 June 2022.

Jerónimo Martins Polska SA made the early repayment of a loan in the amount of PLN 264 million, which was due to mature in December 2023.

During the first half of the year, Jerónimo Martins Colombia, SAS increased the use of short-term credit lines by 220,000 million Colombian pesos, approximately €50 million.

14.1. Current and non-current loans

Jun 2022	Opening balance	Cash flows	Transfers	Foreign exchange difference	Closing balance
Non-current loans
Bank loans	347	(64)	(11)	6	278
Total	347	(64)	(11)	6	278
Current loans
Bank loans	113	62	11	6	191
Total	113	62	11	6	191

15. Lease liabilities

Jun 2021	Current	Non-current	Total
Opening balance	394	1,993	2,387
Increases (new contracts)	12	104	116
Payments	(151)	‐	(151)
Transfers	139	(139)	‐
Contracts change/ cancel	19	118	137
Foreign exchange difference	(3)	(4)	(7)
Closing balance	410	2,072	2,482

During the first half of 2022, the incremental borrowing rates used to measure lease liabilities were revised, considering changes in the financial markets. Nevertheless, the average incremental borrowing rate as at 30 June 2022 did not change significantly comparing to the one at 31 December 2021.

16. Financial net debt

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

Jun 2022	Dec 2021
278	347
191	113
2,072	1,993
410	394
-	-
1	-
(1,060)	(1,494)
(41)	(33)
1,851	1,320

17. Provisions and employee benefits

2022	Risks and contingencies	Employee benefits
Balance as at 1 January	34	70
Set up, reinforced and transfers	9	4
Unused and reversed	(2)	‐
Foreign exchange difference	-	(1)
Used	(2)	(2)
Balance as at 30 June	39	71

18. Trade creditors, accrued costs and deferred income

	Jun 2022	Dec 2021
Non-current
Accrued costs and deferred income	1	1
Total	1	1
Current
Other commercial creditors	3,873	3,655
Other non-commercial creditors	311	393
Other taxes payables	117	135
Contracts liabilities with customers	19	11
Refunds liabilities to customers	1	1
Accrued costs and deferred income	586	576
Total	4,908	4,771

19. Contingencies

Contingent liabilities

During the first half of 2022, the following changes occurred to the contingencies mentioned in the 2021 Annual Report:

• In Portugal, following search and seizure actions carried out in late 2016 and early 2017 in several entities operating in the food distribution sector, the Portuguese Competition Authority (AdC) determined the opening of several inquiries, in the scope of which it came to issue against suppliers and retailers, including the subsidiary Pingo Doce- Distribuição Alimentar S.A. (Pingo Doce) ten statements of objections for alleged anticompetitive practices, consisting of price alignment for certain products.

At the end of the first half of 2022, Pingo Doce had been notified of decisions issued by AdC regarding eight of the above-mentioned proceedings, imposing fines on several retailers and their suppliers. In the case of Pingo Doce these decisions resulted in the imposition of fines in the amount around of €186 million.

Pingo Doce totally disagrees with such decisions which it considers to be completely ungrounded. As such, the Company filed the respective appeals before the Competition, Regulation and Supervision Court ("Tribunal da Concorrência, Regulação e Supervisão") in the first processes and is preparing to file in time the last appeal. Under the terms of the applicable law, Pingo Doce will request also the awarding of suspensive effect to the appeals, subject to providing a guarantee, to prevent the immediate payment of the fine. Based on the opinion of its legal counsels and economic advisors, the Company is fully convinced of the strength and merits of its position. Therefore, no provisions were recognised for this imposed fine, in its accounts.

As to the remaining two proceedings, Pingo Doce has already filed the respective statements of defence - as it considers all the statements of objections to be ungrounded – and will wait for the respective decisions from AdC.

c) The Portuguese Tax Authorities (PTA) carried out some corrections to the CIT from Companies included in the perimeter of the Tax Group headed by Recheio SGPS. With these corrections the total assessments concerning 2007 to 2014, amount to €17 million, of which an amount of €16 million is still in dispute. The Lisbon Tax Court has already ruled in favour of Recheio SGPS regarding the 2008, 2009, 2011 and 2013 assessments. However, the PTA have appealed of the decisions regarding 2008 and 2009;

g) The Food and Veterinary Department (Direção-Geral de Alimentação e Veterinária) claimed from Pingo Doce, Recheio and Hussel an amount of €26 million, €3 million and €0.06 million, respectively, in respect of the Food Safety Tax (Taxa de Segurança Alimentar Mais – TSAM) assessed for the years 2012 to 2022. 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, that has upheld the decision. The Group filed a complaint with the European Commission considering that we are in the presence of illegal State aid. The companies of the Group continue to challenge the decisions, carrying out regular analysis of the risk and the likelihood of a favourable outcome in any of the processes and / or the complaint to the European Commission. 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.

20. Related parties

56.136% of the Group is owned by the Sociedade Francisco Manuel dos Santos, B.V..

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

	Joint ventures		Associates		Other related parties(*)
	Jun 2022	Jun 2021	Jun 2022	Jun 2021	Jun 2022	Jun 2021
Sales and services rendered	‐	‐	12	9	-	-
Stocks purchased and services supplied	4	3	-	-	53	47
	Joint ventures		Associates		Other related parties(*)
	Jun 2022	Dec 2021	Jun 2022	Dec 2021	Jun 2022	Dec 2021
Trade debtors, accrued income and deferred costs	-	-	6	5	-	-
Trade creditors, accrued costs and deferred income	2	1	‐	‐	30	22

(*) 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 related parties were made under normal market conditions, meaning, the transaction value corresponds to prices that would be applicable between non-related parties.

Outstanding balances between Group Companies and related parties, as a result of trade agreements, are settled in cash, and are subject to the same payment terms as those applicable to other agreements contracted 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, 26 July 2022

The Certified Accountant The Board of Directors

2. Statement of the Board of Directors

Statement of the Board of Directors

Within the terms of paragraph c), number 1 of article 29-J 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, 26 July 2022

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 Chairwoman 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)

Natalia Anna Olynec (Member of the Board of Directors)

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

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 2022 (showing a total of 10.324 million Euros and a shareholder's equity total of 2.258 million Euros, including a consolidated net profit attributable to equity holders of the parent of 261 million 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 2022, 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, 5 August 2022

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