Jeronimo Martins — Management Reports 2016

Mar 15, 2016

Colombia - We have a strong opportunity ahead of us and a solid plan to capture it

2012-2015

• - Solid central structure for the Company
• - Full speed first operating region – Eje Cafetero with 101 stores
• - Offer adjusted to the consumer needs with strong Private Brand assortment
• - Launched strong basis for a local supply chain

2015-2016

• - Launch of a second region to validate the fundamentals of the business model and the degree of regionalisation we have to run
• - Consolidation of the team

2016 …

The beginning of a new cycle

2016 - The beginning of a new cycle

We will take with us …

JM Way	3 years of Experience in Colombia
Food Specialist Price / Cost Focus Strong Differentiation (private brand and overall shopping experience)	Running a value proposition and a business model that had the time to do a lot of trials, to learn and to adjust, to be where it is today We start having a good local supplier base willing to grow with us

2016 - The beginning of a new cycle

We will be focused on…

• Gaining momentum on our expansion vision
• Continuously improving the value proposition to capture consumer preference
• Closely collaborating with suppliers to fuel our growth and to improve efficiency and differentiation
• Further increasing our capacity to hire and train strong teams

Colombia - We have a strong opportunity ahead of us and a solid plan to capture it

Our Vision for Expansion

Our Regional perspective of the market

• We have divided Colombia in 7 Markets/Regions
• Such distribution accounts for 95.2% of the total population (96.1% Urban)
• Remaining area of the country is isolated by the jungle
• Enter in a new market-region implies expansion effort but also efficient accommodation of the local dietary habits and preferences
• We see the smaller stores to be the most suitable to the 'barrios' and the bigger ones to better adapt to city centre locations

2020 Ambition

• Our ambition is to approach 1,000 stores by the end of 2020 having initiated presence in 5 regions
• In 2016 a third region is on its way to be opened we will enter in the Central Region (in the surroundings of Bogotá)
• In 2016 70-100 stores should be opened
• At least 1 distribution centre per year should be opened until 2020
• Positive EBITDA not expected before 2018
• Capex programme planned to be in the range 500-600 million euros over the 5Y period (constant currency)

Evolution of Key Metrics ARA

Store network evolution – nr. of stores

Selling Area (Sqm)

Evolution of Key Metrics

Private Brand (share of total sales)