Jeronimo Martins — Interim / Quarterly Report 2022

May 27, 2022

Jerónimo Martins | R&A First Quarter 2022

CONSOLIDATED REPORT AND ACCOUNTS

FIRST QUARTER

Unaudited

naudited

U

1

INDEX

Message from the Chairman and CEO - Pedro Soares dos Santos	3
I – CONSOLIDATED 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. Consolidated 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. Definitions	11
6. Reconciliation Notes	12
7. Information Regarding Individual Financial Statements	14

II – CONSOLIDATED FINANCIAL STATEMENTS

1. Consolidated Financial Statements	15
2. Notes to the Financial Statements	20

Message from the Chairman and CEO

Pedro Soares dos Santos

'The perseverance of our people and consistency of the work carried out by our banners over time ensure leadership in price and quality. This is the main force behind the Group's solid performance in the first three months of the year. This work, which we have honed since the beginning of the pandemic, is now even more critical in the context of rising inflation aggravated by the war in Ukraine, which will hurt the purchasing power of consumers in general and that of the most disadvantaged socio-economic groups in particular.

Two months after the start of the military offensive, it is clear that the upward pressure on the prices of food, energy, and fuel will be much higher than expected at the beginning of the year.

Despite the uncertainty blurring the horizon, we have no doubts about our first strategic priority – to do our part in a collective effort to help control inflation. We will achieve this goal by defending low prices and investing in strong promotional campaigns to create valuable opportunities for families, strengthen our banners' competitive positions, and protect volumes growth.

I am confident that we will be able to follow this path. At the same time, we remain committed to being good corporate citizens responding responsibly to the expectations of our employees, our suppliers, and the communities where we are present'.

I - CONSOLIDATED MANAGEMENT REPORT

Strong Performance from All Banners in a Context of High and Increasing Inflation

1. Performance Overview & Key Drivers

Q1 I KEY FIGURES

+15.5% EBITDA TO €372 MN (+17.3% excl. FX)

+52.4% NET EARNINGS TO €88 MN EPS AT €0.14

CASH FLOW AT €-196 MN

NET DEBT AT €1.6 BN

In an environment of great uncertainty, amplified by the Russian invasion of Ukraine at the end of February, the Group's remarkable growth in the first quarter of 2022 reflects the competitiveness, quality and assertiveness of all banners' value propositions.

Comparing Q1 22 with Q1 21 requires some caution because the first quarter of 2021 was, on one hand, marked by greater pandemic severity and, on the other hand, benefitted from sales related to the Easter season. But it is clear that the Group's banners performed strongly in a context of increasing and generalised cost pressures.

Although weakened by rising inflation, consumer demand in Poland remained positive at the beginning of the year. The war in neighbouring Ukraine sharply reduced consumer confidence in March and led, initially, to some stockpiling of food items. In addition, a large number of Ukrainian refugees entered Poland. Living up to its market positioning, Biedronka maintained its strong commercial dynamic, ensuring consumer preference throughout the quarter and delivering sales growth of 15.4% in local currency.

Without the pandemic-related restrictions that marked Q1 21, Hebe continued benefiting from its omnichannel strategy and registered solid sales growth of 28% in local currency. The banner's online sales accounted for 16% of total top line, increasing from 14% in Q1 21.

Despite the first signs of inflationary pressure over real household disposable income in Portugal, Pingo Doce grew sales by 6%. Recheio improved its top line by 31.6%. Sales of our wholesale banner are now back to pre-pandemic levels (2019), benefiting from the recovery of the HoReCa channel and the resuming of tourism activity.

The significant increase in food inflation in Colombia, which reached 22.9% in the quarter, has further worsened the fragile consumption environment. Ara implemented an intense promotional strategy that gained great acceptance, generating remarkable sales growth (65% in local currency).

The good sales performance in all businesses allowed the Group to mitigate the effects of cost inflation, which increased from March onwards. Together with the very favourable evolution of the EBITDA margins of Ara and Recheio, this performance contributed to maintain the Group's EBITDA margin at 6.7%, in line with Q1 21.

In Poland, since the first day of the war in Ukraine, we focused on ensuring adequate supply chain response and supporting the remarkable efforts of the entire Polish population in welcoming Ukrainians who crossed the border. This support, translated into direct donations and solidarity measures, amounted to approximately 9 million euros in the quarter, registered in Other Profits and Losses.

Cash flow was negative at 196 million euros (-21 million euros in Q1 21) mainly due to three factors. First, business seasonality; second, the change in working capital relative to an exceptionally strong position in December 2021, which benefited from the large number of store openings just before the end of the year; and third, the higher capex payment related to the mentioned store openings.

2. Performance Analysis by Banner

POLAND

Despite rising inflation, the Polish consumption environment remained resilient in Q1 22, partly supported by an increase in the minimum wage.

Food inflation reached 8.7% in Q1 22 (6.7% in Q4 21), already incorporating the reduction to zero of the VAT rate on essential food products implemented in February.

Biedronka LFL

Biedronka maintained its intense commercial activity and continued to benefit from the sales momentum built in previous years.

In Q1 22, sales in local currency grew by 15.4% and LFL was 12.2%. In euros, sales reached 3.8 billion, 13.4% above Q1 21. Higher basket inflation contributed to the performance in the period.

Volume growth softened since the beginning of the year. Still, the Ukraine war led in March to significant volume increases in certain products, driven by stockpiling, donations, and the influx of Ukrainians into Poland. It is worth mentioning the speed of Biedronka's solidarity response. The Company has been, since the start of the Ukraine invasion, at the forefront of food and logistical support to non-governmental organizations who provide assistance to

refugees on the ground.

Biedronka's market share grew again during the period, confirming the consumer's preference for the banner.

EBITDA grew 11.4% (+13.3% in local currency). The respective margin was 8.3% (8.4% in Q1 21). Solid sales performance, which was boosted by the peak in volumes, allowed Biedronka to mitigate the significant increase in costs that occurred in March.

Biedronka inaugurated 16 stores (11 net additions) in the quarter and remodelled 61 locations.

Hebe recorded a strong performance, recovering against Q1 21, a period strongly affected by the pandemic.

The banner grew sales by 28.0% in local currency, with a LFL of 20.8% (LFL includes online sales).

In euros, sales reached 72 million, 25.9% above Q1 21.

The sales rebound drove EBITDA to increase from 1 million euros in Q1 21 to 4 million euros in Q1 22. The EBITDA margin increased from 2.6% to 5.2%.

Hebe opened three stores in Q1 (one net addition).

PORTUGAL

In Portugal, the absence of pandemic-related restrictions and resuming tourism contributed positively to the operating context, especially regarding the HoReCa channel.

Rising food inflation, which reached 5.2% in Q1 22 (1.6% in Q4 21), and increasing energy and fuel costs, pressured real household disposable income.

Pingo Doce maintained a robust commercial dynamic to defend its competitiveness and the relevance of its value proposition.

Sales reached 985 million euros, growing 6.0% versus Q1 21, including LFL at 3.5% (excluding fuel).

In the quarter, Pingo Doce opened two stores and closed one location.

Recheio LFL

Recheio registered a strong sales recovery relative to Q1 21, a quarter strongly affected by the shallow tourism flow and the impact of containment measures on the HoReCa sector.

Sales grew by 31.6%, with LFL at 32.1%, reaching 228 million euros and recovering to the pre-pandemic levels of 2019.

The combined EBITDA of Pingo Doce and Recheio reached 68 million euros, 12.8% ahead of Q1 21. The respective margin was 5.6% (versus 5.5% in Q1 21). Recheio's strong sales growth allowed for improved operational leverage despite the investment in promotions and the cost inflation registered in both banners.

COLOMBIA

In Colombia, food inflation, which stood at 22.9% (15.4% in Q4 21), continued to increase significantly, exacerbated by ongoing difficulties in the national supply chain. High food inflation is exerting significant pressure on households' real disposable income.

Ara remained committed to limiting food price increases through strong and relevant promotional campaigns for Colombian consumers, continuing to gain their preference in the neighbourhoods where it operates.

Sales in local currency grew by 65.0%, including LFL of 39.5%. In euros, sales reached 382 million, 61.3% above Q1 21. Basket inflation contributed to the performance despite being lower than the country's food inflation.

Sales growth improved the Company's EBITDA margin, which stood at 3.2% (1.1% in Q1 21). EBITDA amounted to 12 million euros versus 3 million euros in Q1 21.

The banner opened 14 stores in the quarter (13 net additions).

3. Consolidated Financial Information Analysis

Consolidated Results

(€ Million)	Q1 22		Q1 21		D
Net Sales and Services	5,513		4,786		15.2%
Gross Profit	1,184	21.5%	1,029	21.5%	15.0%
Operating Costs	-812	-14.7%	-708	-14.8%	14.8%
EBITDA	372	6.7%	322	6.7%	15.5%
Depreciation	-190	-3.4%	-185	-3.9%	2.9%
EBIT	182	3.3%	137	2.9%	32.6%
Net Financial Costs	-45	-0.8%	-45	-0.9%	1.9%
Gains in Joint Ventures and Associates	0	0.0%	0	0.0%	n.a.
Other Profits/Losses	-13	-0.2%	-3	-0.1%	n.a.
EBT	124	2.2%	90	1.9%	38.0%
Income Tax	-32	-0.6%	-28	-0.6%	11.2%
Net Profit	92	1.7%	61	1.3%	50.3%
Non-Controlling Interests	-4	-0.1%	-4	-0.1%	17.4%
Net Profit Attributable to JM	88	1.6%	58	1.2%	52.4%
EPS (€)	0.14		0.09		52.4%
EPS without Other Profits/Losses (€)	0.16		0.09		65.7%

Net Financial Costs amounted to -45 million euros, broadly in line with Q1 21. These include recognition of currency conversion losses of -4 million euros relating to value adjustments in the capitalisation of operating lease liabilities in Poland denominated in euros (-6 million euros in Q1 21).

Balance Sheet

(€ Million)	Q1 22	2021	Q1 21
Net Goodwill	614	618	614
Net Fixed Assets	4,155	4,159	3,879
Net Rights of Use (RoU)	2,259	2,221	2,139
Total Working Capital	-2,975	-3,290	-2,701
Others	138	145	122
Invested Capital	4,190	3,852	4,053
Total Borrowings	450	460	530
Financial Leases	34	22	13
Capitalised Operating Leases	2,414	2,365	2,259
Accrued Interest	18	0	-6
Cash and Cash Equivalents	-1,304	-1,527	-1,028
Net Debt	1,611	1,320	1,768
Non-Controlling Interests	241	254	236
Share Capital	629	629	629
Reserves and Retained Earnings	1,710	1,649	1,420
Shareholders Funds	2,579	2,532	2,285

The Group registered a net cash position (excluding capitalised operating lease liabilities) of 803 million euros by the end of March 2022.

Cash Flow

(€ Million)	Q1 22	Q1 21
EBITDA	372	322
Capitalised Operating Leases Payment	-74	-69
Interest Payment	-35	-35
Other Financial Items	0	0
Income Tax	-39	-36
Funds From Operations	224	182
Capex Payment	-201	-116
Change in Working Capital	-207	-86
Others	-12	-2
Cash Flow	-196	-21

Capex

(€ Million)	Q1 22	Weight	Q1 21	Weight
Biedronka	50	50%	43	55%
Distribution Portugal	39	39%	21	27%
Ara	7	7%	12	15%
Others	4	4%	2	3%
Total CAPEX	99	100%	78	100%

The Investment Programme reached 99 million euros in the period, of which c.50% was allocated to Biedronka.

4. Outlook 2022

There is significant uncertainty associated with the developments of the war in Ukraine and the evolution of the Covid-19 pandemic.

Since the beginning of the military conflict, inflationary pressures on food, energy, and transport have escalated. In addition, volatility of Eastern European currencies has substantially increased.

With rising food inflation and interest rates pressuring real disposable household incomes, it is even more critical that price competitiveness and creating saving opportunities through promotional activities remain central to our Companies' agendas.

In line with what we mentioned a little over a month ago, this effort to contain prices will be implemented, even if cost inflation places additional pressure on the percentual 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, 27 April 2022

The Board of Directors

5. Consolidated Management Report Appendix

5.1. The impact of IFRS 16 on Financial Statements

Income Statement by Functions

	IFRS16		Excl. IFRS16
(€ Million)	Q1 22	Q1 21	Q1 22	Q1 21
Net Sales and Services	5,513	4,786	5,513	4,786
Cost of Sales	-4,329	-3,757	-4,329	-3,757
Gross Profit	1,184	1,029	1,184	1,029
Distribution Costs	-902	-803	-927	-825
Administrative Costs	-101	-89	-101	-90
Other Operating Profits/Losses	-13	-3	-13	-3
Operating Profit	169	134	143	112
Net Financial Costs	-45	-45	-9	-6
Gains/Losses in Other Investments	0	0	0	0
Gains in Joint Ventures and Associates	0	0	0	0
Profit Before Taxes	124	90	134	106
Income Tax	-32	-28	-33	-31
Profit Before Non Controlling Interests	92	61	101	75
Non-Controlling Interests	-4	-4	-5	-4
Net Profit Attributable to JM	88	58	96	71

Income Statement (Management View)

(€ Million)	(Excl. IFRS16)
	Q1 22		Q1 21	D
Net Sales and Services	5,513		4,786		15.2%
Gross Profit	1,184	21.5%	1,029	21.5%	15.0%
Operating Costs	-919	-16.7%	-808	-16.9%	13.7%
EBITDA	265	4.8%	221	4.6%	19.9%
Depreciation	-110	-2.0%	-106	-2.2%	3.0%
EBIT	156	2.8%	115	2.4%	35.5%
Net Financial Costs	-9	-0.2%	-6	-0.1%	40.0%
Gains in Joint Ventures and Associates	0	0.0%	0	0.0%	n.a.
Other Profits/Losses	-13	-0.2%	-3	-0.1%	n.a.
EBT	134	2.4%	106	2.2%	26.9%
Income Tax	-33	-0.6%	-31	-0.6%	7.7%
Net Profit	101	1.8%	75	1.6%	34.8%
Non-Controlling Interests	-5	-0.1%	-4	-0.1%	12.0%
Net Profit Attributable to JM	96	1.7%	71	1.5%	36.1%
EPS (€)	0.15		0.11		36.1%
EPS without Other Profits/Losses (€)	0.17		0.11		47.4%

Balance Sheet

(€ Million)	(Excl. IFRS16)
	Q1 22	2021	Q1 21
Net Goodwill	614	618	614
Net Fixed Assets	4,155	4,159	3,879
Total Working Capital	-2,971	-3,287	-2,697
Others	113	121	102
Invested Capital	1,911	1,611	1,899
Total Borrowings	450	460	530
Financial Leases	34	22	13
Accrued Interest	18	0	-6
Cash and Cash Equivalents	-1,304	-1,527	-1,028
Net Debt	-803	-1,046	-491
Non-Controlling Interests	250	262	243
Share Capital	629	629	629
Reserves and Retained Earnings	1,835	1,765	1,518
Shareholders Funds	2,714	2,657	2,390

Cash Flow

		(Excl. IFRS16)
(€ Million)		Q1 22	Q1 21
EBITDA		265		221
Interest Payment		-1		-3
Other Financial Items		0		0
Income Tax		-39		-36
Funds From Operations		225		183
Capex Payment		-201		-116
Change in Working Capital		-208		-87
Others		-11		-1
Cash Flow		-196		-21
EBITDA Breakdown
(€ Million)			IFRS16				Excl. IFRS16
Biedronka	318	8.3%	286	8.4%		246	6.4%
Hebe Distribution Portugal	4 6 8	5.2% 5.6%	1 6 0	2.6% 5.5%		-2 5 0	n.a. 4.1%
Ara	1 2	3.2%	3	1.1%		2	0.6%
Others & Cons. Adjustments	-30	n.a.	-28	n.a.		-31	n.a.
JM Consolidated	372	6.7%	322	6.7%		265	4.8%
Financial Results
(€ Million)			IFRS16
			Q1 22		Q1 21		Q1 22
Net Interest			-3		-4		-3
Interests on Capitalised Operating Leases			-33		-32		-
Exchange Differences			-8		-7		-4
Others			-1		-1		-1
Net Financial Costs			-45		-45		-9
5.2. Sales Detail
		Q1 22		Q1 21				D %
(€ Million)

EBITDA Breakdown

	IFRS16				Excl. IFRS16
(€ Million)	Q1 22	Mg	Q1 21	Mg	Q1 22	Mg	Q1 21	Mg
Biedronka	318	8.3%	286	8.4%	246	6.4%	217	6.4%
Hebe	4	5.2%	1	2.6%	-2	n.a.	-4	n.a.
Distribution Portugal	6 8	5.6%	6 0	5.5%	5 0	4.1%	4 3	3.9%
Ara	1 2	3.2%	3	1.1%	2	0.6%	-5	n.a.
Others & Cons. Adjustments	-30	n.a.	-28	n.a.	-31	n.a.	-29	n.a.
JM Consolidated	372	6.7%	322	6.7%	265	4.8%	221	4.6%

Financial Results

(€ Million)	IFRS16		Excl. IFRS16
	Q1 22	Q1 21	Q1 22	Q1 21
Net Interest	-3	-4	-3	-4
Interests on Capitalised Operating Leases	-33	-32	-	-
Exchange Differences	-8	-7	-4	-1
Others	-1	-1	-1	-1
Net Financial Costs	-45	-45	-9	-6

5.2. Sales Detail

		% total		% total	excl. FX	Euro
Biedronka	3,843	69.7%	3,388	70.8%	15.4%	13.4%
Hebe	72	1.3%	57	1.2%	28.0%	25.9%
Pingo Doce	985	17.9%	929	19.4%		6.0%
Recheio	228	4.1%	173	3.6%		31.6%
Ara	382	6.9%	237	4.9%	65.0%	61.3%
Others & Cons. Adjustments	4	0.1%	2	0.0%		89.9%
Total JM	5,513	100%	4,786	100%	16.8%	15.2%

Sales Growth

	Total Sales Growth	LFL Growth
	Q1 22	Q1 22
Biedronka
Euro	13.4%
PLN	15.4%	12.2%
Hebe
Euro	25.9%
PLN	28.0%	20.8%
Pingo Doce	6.0%	4.7%
Excl. Fuel	4.8%	3.5%
Recheio	31.6%	32.1%
Ara
Euro	61.3%
COP	65.0%	39.5%
Total JM
Euro	15.2%
Excl. FX	16.8%	13.0%

5.3. Stores Network

Number of Stores	2021	Openings	Closings	Q1 22	Q1 21
		Q1 22	Q1 22
Biedronka *	3,250	16	5	3,261	3,130
Hebe	291	3	2	292	268
Pingo Doce	465	2	1	466	455
Recheio	42	0	0	42	42
Ara	819	14	1	832	689

* Excluding 14 Micro Fulfilment Centres (MFC) to supply Biek's operation (ultra-fast delivery)

Sales Area (sqm)	2021	Openings Q1 22	Closings Remodellings Q1 22	Q1 22	Q1 21
Biedronka *	2,241,562	11,030	-2,632	2,255,223	2,135,857
Hebe	75,164	760	533	75,391	69,687
Pingo Doce	535,847	2,093	-1,460	539,400	525,006
Recheio	134,321	0	0	134,321	133,928
Ara	278,547	4,622	424	282,745	232,288

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

5.4. 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).

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 Quarter 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 €-190 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 31 March 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 - €614 million) and adding the Financial leases amount (€39 million)
Net Rights of Use (RoU)	Includes the heading of Net rights of use excluding the Financial leases (€39 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 €-12 million related to 'Others' due to its operational nature. Excludes the amount of €32 million of Short-term investments that don't qualify as cash equivalents (note 9 - Debtors, accruals and deferrals), the amount of €-3 million related with Interest accruals and deferrals heading (note 15 - Financial net debt) and the amount of €-17 million related with dividends attributable to non-controlling interests
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 and the amount of €-17 million related with dividends attributable to non-controlling interests. Excludes the value of €-12 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: €34 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 €-3 million related with Interest accruals and deferrals (note 15 - Financial net debt)
Cash and Cash Equivalents	Includes the heading Cash and cash equivalents and the amount of €32 million of Short-term investments that don't qualify as cash equivalents (note 9 - 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 8)	Consolidated Cash Flow Statement (in Consolidated Financial Statements) First Quarter 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 (€12 million)
Capitalised Operating Leases Payment	Included in the heading Leases paid, excluding the amount of €1 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 (€-13 million), and when applicable, excludes net change in Short-term investments that don't qualify as cash equivalents
Change in Working Capital	Includes Changes in working capital added from headings which did not generate cash flow (€11 million)
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 €-12 million
Cash Flow	Corresponds to the Net change in cash and cash equivalents, deducted from Dividends paid and received, Net change in loans, and when applicable, net change in Collateral deposits associated to financial debt and Short-term investments that don't qualify as cash. It also includes acquisitions of tangible assets classified as financial leases (€-13 million) and deducted from the payment of financial leases (€1 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 Quarter Individual Financial Statements of Jerónimo Martins SGPS, S.A. are not disclosed as they do not include additional relevant information, compared to the one presented in this report.

II - Consolidated Financial Statements

1. Consolidated Financial Statements

CONSOLIDATED INCOME STATEMENT BY FUNCTIONS	16
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	16
CONSOLIDATED BALANCE SHEET	17
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY	18
CONSOLIDATED CASH FLOW STATEMENT	19

Index to the Notes to the Consolidated Financial Statements Page

1. Activity	20
2. Accounting policies	20
3. Segments reporting	22
4. Operating costs by nature	23
5. Net financial costs	23
6. Income tax recognised in the income statement	24
7. Tangible assets, intangible assets, investment property and right-of-use assets	24
8. Derivative financial instruments	25
9. Trade debtors, accrued income and deferred costs	25
10. Cash and cash equivalents	25
11. Dividends	25
12. Basic and diluted earnings per share	25
13. Borrowings	25
14. Lease liabilities	26
15. Financial net debt	26
16. Provisions and employee benefits	26
17. Trade creditors, accrued costs and deferred income	27
18. Contingencies	27
19. Related parties	27
20. Events after the balance sheet date	28

CONSOLIDATED INCOME STATEMENT BY FUNCTIONS

For the periods ended 31 March 2022 and 2021

			€ Million
		March	March
	Notes	2022	2021
Sales and services rendered	3	5,513	4,786
Cost of sales	4	(4,329)	(3,757)
Gross profit		1,184	1,029
Distribution costs	4	(902)	(803)
Administrative costs	4	(101)	(89)
Other operating profits/losses	4.1	(13)	(3)
Operating profit		169	134
Net financial costs	5	(45)	(45)
Profit before taxes		124	90
Income tax	6	(32)	(28)
Profit before non-controlling interests		92	61
Attributable to:
Non-controlling interests		4	4
Jerónimo Martins Shareholders		88	58
Basic and diluted earnings per share - euros	12	0.1399	0.0918

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

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the periods ended 31 March 2022 and 2021

	March	March
	2022	2021
Net profit	92	61
Other comprehensive income:
Items that will not be reclassified to profit or loss	‐	‐
Currency translation differences	(12)	(23)
Change in fair value of hedging instruments on foreign operations	(14)	7
Related tax	(1)	(1)
Items that may be reclassified to profit or loss	(27)	(17)
Other comprehensive income, net of income tax	(27)	(17)
Total comprehensive income	65	44
Attributable to:
Non-controlling interests	4	4
Jerónimo Martins Shareholders	61	41
Total comprehensive income	65	44

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

CONSOLIDATED BALANCE SHEET

As at 31 March 2022 and 31 December 2021

			€ Million
		March	December
	Notes	2022	2021
Assets
Tangible assets	7	3,978	3,993
Intangible assets	7	752	757
Investment property	7	9	8
Right-of-use assets	7	2,298	2,248
Biological assets		5	5
Investments in joint ventures and associates		12	13
Other financial investments		2	2
Trade debtors, accrued income and deferred costs	9	57	57
Deferred tax assets		177	175
Total non-current assets		7,291	7,256
Inventories		1,145	1,108
Biological assets		7	7
Income tax receivable		30	23
Trade debtors, accrued income and deferred costs	9	558	479
Derivative financial instruments	8	4	1
Cash and cash equivalents	10	1,272	1,494
Total current assets		3,016	3,112
Total assets		10,307	10,368
Shareholders' equity and liabilities
Share capital		629	629
Share premium		22	22
Own shares		(6)	(6)
Other reserves		(168)	(140)
Retained earnings		1,861	1,773
		2,339	2,278
Non-controlling interests		241	254
Total shareholders' equity		2,579	2,532
Borrowings	13	299	347
Lease liabilities	14	2,042	1,993
Trade creditors, accrued costs and deferred income	17	1	1
Derivative financial instruments	8	1	‐
Employee benefits	16	71	70
Provisions for risks and contingencies	16	31	34
Deferred tax liabilities		75	66
Total non-current liabilities		2,518	2,511
Borrowings	13	152	113
Lease liabilities	14	405	394
Trade creditors, accrued costs and deferred income	17	4,595	4,771
Derivative financial instruments	8	18	1
Income tax payable		39	47
Total current liabilities		5,210	5,325
Total shareholders' equity and liabilities		10,307	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 31 March 2022 and 2021

									€ Million
	Shareholders' equity attributable to Shareholders of Jerónimo Martins, SGPS, S.A.
			Own shares	Other reserves
	Share capital	Share premium		Cash flow hedge	Currency translation reserves	Retained earnings	Total	Non 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				(-)	(24)		(24)		(24)
Change in fair value of hedging instruments on foreign operations					7		7		7
Other comprehensive income	-	-	-	-	(17)	-	(17)	-	(17)
Net profit						58	58	4	61
Total comprehensive income	-	-	-	-	(17)	58	41	4	44
Dividends						-	-	(17)	(17)
Acquisitions/Disposal of non-controlling interests						-	-	1	1
Balance Sheet as at 31 March 2021	629	22	(6)	-	(146)	1,549	2,049	236	2,285
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					(13)		(13)		(13)
Change in fair value of hedging instruments on foreign operations					(14)		(14)		(14)
Other comprehensive income	-	-	-	-	(27)	-	(27)	-	(27)
Net profit						88	88	4	92
Total comprehensive income	-	-	-	-	(27)	88	61	4	65
Dividends (note 11)						-		(17)	(17)
Balance Sheet as at 31 March 2022	629	22	(6)	-	(168)	1,861	2,339	241	2,579

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

CONSOLIDATED CASH FLOW STATEMENT

For the periods ended 31 March 2022 and 2021

			€ Million
		March	March
	Notes	2022	2021
Net results		88	58
Adjustments for:
Non-controlling interests		4	4
Income tax		32	28
Depreciations and amortisations		190	185
Net financial costs		46	45
Profit/ Losses in tangible, intangible and right-of-use assets		1	1
Operating cash flow before changes in working capital		360	320
Changes in working capital:
Inventories		(38)	(57)
Trade debtors, accrued income and deferred costs		5	5
Trade creditors, accrued costs and deferred income		(184)	(35)
Provisions and employee benefits		(2)	1
Cash generated from operations		142	234
Income taxes paid		(39)	(36)
Cash flow from operating activities		103	199
Investment activities
Interest received		2	-
Acquisition of tangible and intangible assets		(188)	(113)
Cash flow from investment activities		(186)	(112)
Financing activities
Loans interest paid		(3)	(3)
Leases interest paid	5	(33)	(32)
Net change in loans	13	(32)	23
Leases paid	14	(75)	(70)
Cash flow from financing activities		(143)	(82)
Net changes in cash and cash equivalents		(226)	4
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		(226)	4
Effect of acquisition/sale of subsidiaries		‐	1
Effect of currency translation differences		4	(18)
Cash and cash equivalents at the end of March	10	1,272	1,028

*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

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

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 27 April 2022.

Covid-19 and war in Ukraine

Covid-19 pandemic continues to be present in society in 2022 and to impact the way of living of people and companies. The progress of vaccination plans combined with less serious consequences for health, however, led to a progressive decrease in the restrictions imposed by the Health Authorities.

Group Companies continue to implement the necessary operational measures to better protect the safety of their employees and customers. Simultaneously initiatives continue be implemented to increase efficiency and control costs, that enabled to limit the negative impact generated by the Covid-19 pandemic, on their respective business profitability.

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. This situation originated an increased uncertainty about the evolution of economies and financial markets worldwide, and it is not possible, at this moment, to estimate the potential future effects on the Group's operations.

Since the beginning of the conflict, the Group has implemented actions to support its Ukrainian employees as well as refugees and other people directly impacted. As at 31 March 2022, Group results consider approximately €9 million, referring to donations and other direct and indirect support to people affected by the conflict and institutions that are on the ground supporting refugees.

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 brands operations.

The Group expects to continue to mitigate the impacts of this adverse context, proceeding, 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.

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 three months 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 three months 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 31 March 2022	4.6531	4,160.8200
Average rate for the period	4.6236	4,381.8200
Rate at 31 March 2021	4.6508	4,381.5300
Average rate for the period	4.5462	4,285.1800

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. Since the business units in the distribution area in Portugal share a set of competences, the Group analyses, on a quarterly basis, its segments in an aggregate performance perspective. In addition, the Group also separates the business units 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 Distribution: comprises the business unit of JMR (Pingo Doce supermarkets) and 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 March 2022 and 2021

	Portugal Distribution		Poland Retail		Colombia Retail		Others, eliminations and adjustments		Total JM Consolidated
	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021
Net sales and services	1,212	1,102	3,843	3,388	382	237	77	60	5,513	4,786
External customers	1,212	1,102	3,843	3,388	382	237	77	60	5,513	4,786
Operational cash flow (EBITDA)	68	60	318	286	12	3	(27)	(27)	372	322
Depreciations and amortisations	(44)	(43)	(121)	(119)	(15)	(12)	(11)	(11)	(190)	(185)
Earnings before interest and taxes (EBIT)	24	17	198	167	(3)	(10)	(38)	(38)	182	137
Other operating profits/losses									(13)	(3)
Financial results and gains in investments									(46)	(45)
Income tax									(32)	(28)
Net result attributable to JM									88	58
Total assets (1)	2,692	2,700	5,669	6,137	942	856	1,004	676	10,307	10,368
Total liabilities (1)	2,206	2,174	4,982	4,965	923	830	(384)	(132)	7,727	7,836
Investments in tangible and intangible assets	39	21	36	40	7	12	4	2	86	75

(1) The comparative report is 31 December of 2021

Reconciliation between EBIT and operating profit

	2022	2021
EBIT	182	137
Other operating profits/losses	(13)	(3)
Operational result	169	134

4. Operating costs by nature

	Mar 2022	Mar 2021
Cost of goods sold and materials consumed	(4,268)	(3,699)
Changes in inventories of finished goods and work in progress	-	1
Net cash discount and interest paid to suppliers	13	7
Electronic payment commissions	(13)	(11)
Other supplementary costs	(55)	(48)
Supplies and services	(229)	(185)
Advertising costs	(24)	(24)
Rents	(5)	(4)
Staff costs	(500)	(443)
Transportation costs	(67)	(52)
Depreciation and amortisation of tangibles and intangibles assets	(108)	(106)
Depreciation of right-of-use assets	(82)	(79)
Profit/loss with tangible and intangible assets	(1)	(1)
Profit/loss with right-of-use assets	1	-
Other natures of profit/loss	(6)	(6)
Total	(5,344)	(4,652)

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:

	Mar 2022	Mar 2021
Donations and other solidarity measures with Ukraine	(9)	‐
Losses from organizational restructuring programmes	(3)	(2)
Assets write-offs and gains/losses in sale of tangible assets	(0)	(1)
Total	(13)	(3)

5. Net financial costs

	Mar 2022	Mar 2021
Loans interest expense	(4)	(4)
Leases interest expense	(33)	(32)
Interest received	2	-
Net foreign exchange	(4)	-
Net foreign exchange on leases	(4)	(6)
Other financial gains and losses	(1)	(1)
Fair value of financial investments held for trade:
Derivative instruments (note 8)	(1)	(1)
Total	(45)	(45)

Interest expense includes the interest on loans measured at amortised cost and interest on derivatives of fair-value hedge and cash flow hedge (note 8).

Exchange differences on Net foreign exchange on leases refer to the exchange rate update, reported on 31 March, 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

	Mar 2022	Mar 2021
Current income tax
Current tax of the year	(30)	(39)
Total	(30)	(39)
Deferred tax
Temporary differences created and reversed	(5)	11
Total	(5)	11
Other gains/losses related to tax
Impact of changes in estimates for tax litigations	4	-
Total	4	-
Total income tax	(32)	(28)

In 2022 e 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 e 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 2021, 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	11	(5)	‐	10	15
Increases	82	4	‐	50	136
Contracts update	‐	‐	‐	83	83
Disposals and write-offs	(1)	0	‐	‐	(1)
Contracts cancellation	‐	‐	‐	(11)	(11)
Depreciation, amortisation and impairment losses	(105)	(3)	‐	(82)	(190)
Transfers from/to investment property	(1)	‐	1	‐	(0)
Net value at 31 March 2022	3,978	752	9	2,298	7,037

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 31 March 2022 include Goodwill in the amount of €614 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 increased €15 million, which includes a decrease of €-3 million related to Goodwill from businesses in Poland.

8. Derivative financial instruments

		Mar 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)	4.7 million EUR	-	-		-	- 4.5 million EUR	-	-	-	-
Currency forwards - stock purchase (COP/USD)	3.3 million USD	-	-		-	- 5.8 million USD	-	-	-	-
Currency forwards - stock purchase (EUR/USD)	-	-	-		-	- 0.2 million USD	-	-	-	-
Currency forwards - stock purchase (PLN/USD)	-	-	-		-	- 0.1 million USD	-	-	-	-
Foreign operation investments hedging derivatives
Currency forwards (PLN)	2,923 million PLN	4	-	17		1 844 million PLN	1	-	1	-
Total derivatives held for trading		-	-		1 -		-	-	-	-
Total hedging derivatives		4	-	17	1		1	-	1	-
Total assets/liabilities derivatives		4	-	18	1		1	-	1	-

9. Trade debtors, accrued income and deferred costs

	Mar 2022	Dec 2021
Non-current
Other debtors	54	54
Deferred costs	3	3
Total	57	57
Current
Commercial customers	48	52
Other debtors	176	160
Other taxes receivable	14	9
Accrued income and deferred costs	289	225
Short-term investments that don't qualify as cash equivalents	32	33
Total	558	479

10. Cash and cash equivalents

	Mar 2022	Dec 2021
Bank deposits	817	961
Short-term investments	452	529
Cash in hand	4	4
Total	1,272	1,494

11. Dividends

Dividends in the amount of €17 million were paid in 2022 to partners with non-controlling interests in the Group companies.

12. Basic and diluted earnings per share

	Mar 2022	Mar 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	88	58
Basic and diluted earnings per share – Euros	0.1399	0.0918

13. 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 31 March 2022.

Jerónimo Martins Colombia, SAS contracted short term loans in the amount of 110,000 million Colombian pesos, approximately €26 million.

13.1. Current and non-current loans

Mar 2022	Opening balance	Cash flows	Transfers	Foreign exchange difference
Non-current loans
Bank loans	347	(55)	(5)	11	299
Total	347	(55)	(5)	11	299
Current loans
Bank loans	113	23	5	11	152
Total	113	23	5	11	152

14. Lease liabilities

Mar 2021	Current	Non-current	Total
Opening balance	394	1,993	2,387
Increases (new contracts)	5	45	50
Payments	(75)	‐	(75)
Transfers	68	(68)	‐
Contracts change/ cancel	14	58	71
Foreign exchange difference	-	14	14
Closing balance	405	2,042	2,447

During the first quarter 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 31 March 2022 did not change significantly comparing to the one at 31 December 2021.

15. 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:

	Mar 2022	Dec 2021
Non-current loans (note 13.1)	299	347
Current loans (note 13.1)	152	113
Financial lease liabilities - non-current (note 14)	2,042	1,993
Financial lease liabilities - current (note 14)	405	394
Derivative financial instruments (note 8)	14	(-)
Interest on accruals and deferrals	3	-
Cash and cash equivalents (note 10)	(1,272)	(1,494)
Short-term investments that don't qualify as cash equivalents (note 9)	(32)	(33)
Total	1,611	1,320

16. Provisions and employee benefits

	Risks and contingencies	Employee benefits
Balance as at 1 January	34	70
Set up, reinforced and transfers	1	2
Unused and reversed	(2)	‐
Used	(2)	(1)
Balance as at 31 March	31	71

17. Trade creditors, accrued costs and deferred income

	Mar 2022	Dec 2021
Non-current
Accrued costs and deferred income	1	1
Total	1	1
Current
Other commercial creditors	3,488	3,655
Other non-commercial creditors	311	393
Other taxes payables	142	135
Contracts liabilities with customers	12	11
Refunds liabilities to customers	-	1
Accrued costs and deferred income	643	576
Total	4,595	4,771

18. Contingencies

Contingent liabilities

During the first quarter 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 quarter of 2022, Pingo Doce had been notified of decisions issued by AdC regarding six 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 €145 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 annual accounts.

As to the remaining four 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.

19. Related parties

56.136% of the Group is owned by the Sociedade Francisco Manuel dos Santos, B.V.. There were no direct transactions between this and any other company of the Group in the first quarter of 2022.

There were no amounts payable or receivable between them on 31 March of 2022.

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

	Joint ventures		Associates		Other related parties(*)
	Mar 2022	Mar 2021	Mar 2022	Mar 2021	Mar 2022	Mar 2021
Sales and services rendered	‐	‐	8	2	-	-
Stocks purchased and services supplied	2	1	(0)	-	23	21
	Joint ventures		Associates		Other related parties(*)
	2021	2020	2021	2020	2021	2020
Trade debtors, accrued income and deferred costs	-	-	5	5	-	-
Trade creditors, accrued costs and deferred income	1	1	‐	‐	6	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.

20. Events after the balance sheet date

On 21 April 2022 was held the Annual Shareholders' Meeting of Jerónimo Martins, SGPS, S.A., in which was approved the Results Appropriation Proposal presented by the Board of Directors. Of this proposal results a gross dividend payment of 78.5 cents per share, excluding own shares in the portfolio, which represents a payment of an amount of €493 million that will take place on 18 May 2022.

It was also elected in the Annual Shareholders' Meeting, the list proposed by the shareholder Sociedade Francisco Manuel dos Santos, B.V. for the Company's Board of Directors and Supervisory Bodies. Subsequently, there was a meeting of the Board of Directors, where it was decided a new Internal Organization for the three years period 2022- 2024.

Lisbon, 27 April 2022

The Certified Accountant The Board of Directors