Título Subtítulo 1 ST QUARTER CONSOLIDATED REPORT Non Audited

Transcription

1 Título Subtítulo 1 ST QUARTER CONSOLIDATED REPORT 2012 Non Audited

2 1 st Quarter 12 Index I Consolidated Management Report Message from the CEO Pedro Soares dos Santos 3 1. Introduction 3 2. Sales Analysis 3 3. Results Analysis 5 4. Balance Sheet 6 5. Outlook II Consolidated Management Report Appendix 1. Sales Growth 8 2. Store Network 8 3. EBITDA Margin Breakdown 8 4. Madeira - Reclassification 9 5. Definitions 9 6. Information Regarding Individual Financial Statements 9 III Consolidated Financial Statements 1. Financial Statements Notes to the Consolidated Financial Statements 15

3 I. CONSOLIDATED MANAGEMENT REPORT Message from the CEO Pedro Soares dos Santos 1 st Quarter 12 Consolidated Management Report Biedronka, our main priority, continues to execute its investment plan which is essential for the Company's leadership in the Polish market. The implementation capability demonstrated consistently by the management team reinforces our confidence that this will be another year of strong growth for Biedronka. For the Portuguese economy, we anticipate 2012 being a very tough year. To protect the sustainability of our supply chain in fresh food, and to protect our medium and long term competitiveness and differentiation, we took the decision to accelerate payments to around half of our fresh products suppliers. The strong performance in Poland confirms the Group's positive outlook regarding the growth in sales and earnings for Introduction A solid start to the year with sales growth in all Distribution businesses. Poland marked the first three months of the year with constant currency sales growth of 21.0% and the strong pace of Biedronka's execution, converting the layout in 496 stores and opening 37 new locations. 2. Sales Analysis Net Sales and Services (Million Euro) Q1 12 Q1 11 D % % total % total Pln Euro Biedronka 1, % 1, % 21.0% 13.1% Pingo Doce % % 2.9% Recheio % % 4.0% Manufacturing % % -1.5% Mkt. Repr. and Rest. Serv % % -1.8% Consolidation Adjustments % % 4.7% Total JM 2, % 2, % 8.8% p.m. Pingo Doce % (store sales) Consolidated sales reached Euro 2,440m, 8.8% (+13.6% at a constant exchange rate) higher than in the first three months of the previous year, as a result of the like-for-like (LFL) sales growth 5.3% for the Group and the contribution from new stores. Although the zloty has strengthened since 4 th Quarter of 2011, compared to 1 st Quarter of 2011 it still had the translation of the sales value of Euro 106m. 3

4 1 st Quarter 12 Consolidated Management Report Sales (Million Euro) Q1 11 Q % 2,440 2,242 LFL Growth (Q1 12/Q1 11) Crescimento LFL 9.5% (1T 12/1T 11) +13.1% 1,511 1, % 9.5% 2.6% 5.3% 5.3% Biedronka Pingo Doce (store sales) + 4.0% Recheio +4.5% Manuf. & Others JM Consolidated 2.0% -1.6% * Biedronka Pingo Doce 2.6% Recheio JM Cons. * Ex-petrol LFL: -0.8% Note: The numbers reported on Pingo Doce and Recheio now include the respective operations of Madeira Island restatement in the Appendix. In Poland, food consumption remains healthy. The 1 st Quarter, Biedronka's sales increased by 21.0% in local currency, as a result of the 9.5% increase in LFL sales and also from the increase in the number of stores. Biedronka is in the middle of implementing a very ambitious plan to change its store layout at the rate of stores per week. 680 stores have already been converted and their performance is well in line with our expectations. Biedronka also opened 37 new locations in the quarter and is preparing its tenth region and two new distribution centres. In Portugal we are seeing that consumers continue to be very sensitive to price, with a drop in the average ticket and the sales mix reflecting their preference for cheaper articles. Pingo Doce posted a 2.1% increase in sales, with a contribution from 7 more stores than the previous year and a LFL performance of -0.8% excluding fuel. The Company's negative LFL performance reflects the reduction in the average ticket only partly compensated by a small increase in the number visits. Private brand sales increased by 7.6%, significantly above the average for the Company. Maintaining the competitiveness of its value proposition, based on a strong perception of the quality of the brand, Pingo Doce is well prepared to meet the needs of increasingly price-sensitive consumers. Recheio's sales were up by 4.0%, as a result of a 2.6% increase in LFL sales and the contribution from a new food service platform. Within the two channels in which the Company operates - Traditional and HoReCa it benefitted from its strong competitive position. We noted, however, that through the quarter the HoReCa channel has weakened after the VAT increase that took place in January In Manufacturing, Marketing, Representations and Restaurant Services, which represent less than 3% of Group s sales, market conditions remained very challenging and sales in the quarter decreased by 1.6%. 4

5 1 st Quarter 12 Consolidated Management Report 3. Results Analysis Operating Profit Net Consolidated Profit (Million Euro) Q1 12 Q1 11 (*) D Consolidated Sales 2,440 2, % Total Margin % % 10.1% Operating Costs % % 10.5% EBITDA % % 9.2% Depreciation % % 8.2% EBIT % % 9.9% Financial Results % % -35.5% Non Recurrent Items % % - EBT % % 20.7% Taxes % % 24.4% Net Profit % % 19.8% Non Controlling Interest % % -8.6% Net Profit attr. to JM % % 20.8% EPS ( ) % Cash Flow per share ( ) % (*) Restated see note 2 Chapter III Consolidated EBITDA grew by 9.2% (+14.6% at a constant exchange rate) to Euro 152m, and EBITDA margin was 6.2% of sales, in line with the same quarter in previous year. In constant currency EBITDA increased by 14.6%. (Million Euro) % 6.2% (% Sales) 7% % Q1 11 Q1 12 0% In Poland, as expected, Biedronka's EBITDA margin improvement reflected the benefits of the scale of the operation, with sales growth above 20%, and also from a positive product mix compared to the same period last year. EBITDA in Biedronka increased by 29.1% in local currency (+20.7% in Euros). In Distribution in Portugal, the EBITDA fell by 5.1% to Euro 47m. The decline was due to a significant increase in energy and fuel costs impacting the businesses. In Manufacturing, EBITDA margin declined reflecting the reinforcement of price positions in key categories, and the increase in the cost of raw materials in some food categories. Net Result Net profit attributable to Jerónimo Martins increased by 20.8% to Euro 68m (+17.9% excluding non-recurring items), with Biedronka as the Group's principal growth driver. 5

6 1 st Quarter 12 Consolidated Management Report 4. Balance Sheet (Million Euro) Q Q1 11 Net Goodwill Net Fixed Assets 2,521 2,411 2,289 Net Working Capital -1,733 * -1,542-1,320 Others Invested Capital 1,580 1,650 1,792 Total Borrowings Leasings Accrued interest Marketable sec. & Bank deposits Net Debt Non Controlling Interests Share Capital Reserves and Retained Earnings Shareholders Funds 1,364 * 1,422 1,190 Gearing 15.9% 16.0% 50.6% * Affected by Euro 173m of dividends to be paid on April 30 th. Net consolidated debt reduced from Euro 602m to Euro 216m and gearing was 15.9% (50.6% at the end of March 2011 and 16.0% at the end of December 2011). Investment Programme The Group invested Euro 93m in the first three months of 2012, 86% of which was allocated to Poland. 6

7 1 st Quarter 12 Consolidated Management Report 5. Outlook 2012 The start of 2012 confirms Biedronka's capability to execute its ambitious plans and maintain its solid growth momentum. We therefore remain confident of opening c. 250 new stores and completing the roll out of the new layout by October In Biedronka we expect to achieve low double-digit LFL sales growth and to increase earnings above sales and further increase the return on invested capital. In Portugal, the very fragile economic environment is expected to result in weaker consumption. In this scenario, Pingo Doce maintains a strategy to retain its strong position in the market based on three strategic pillars consumers, employees and suppliers. We will continue to focus on price and quality for our customers and supporting our employees and suppliers in this difficult environment. In the specific case of its suppliers, and after diagnosing that many Portuguese producers were having difficulties in obtaining access to financing, Pingo Doce decided that, for 12 months starting in May as a temporary initiative, it would reduce its payment terms to 402 suppliers in the agricultural sector to an average of 10 days. This measure, which is essential for the sustainability and stability of the stores' supply chain, is estimated to have an impact on the Company's working capital of between Euro 80m and 100m. In view of further reductions in households disposal income, Pingo Doce has decided to reinforce its price positioning to strengthen its competitiveness. This strategic decision, starting in Q2, is expected to reverse the negative trend seen in the LFL growth in the first quarter but, for the year, the additional investment in the market may impact Pingo Doce s EBITDA margin. The capital investment programme for 2012 is forecast to reach c.euro 650m, c.80% of which will be invested in Poland. Overall for the Group, and despite the difficulties in Portugal, we are confident that 2012 will be another good year. We expect double-digit consolidated sales growth (at a constant exchange rate) and healthy growth in profitability. With the decision to invest to strengthen our business in Portugal, Group EBITDA margin could be stable or just below the previous year. Lisbon, 24 th April, 2012 The Board of Directors 7

8 1 st Quarter 12 Consolidated Management Report Appendix II. CONSOLIDATED MANAGEMENT REPORT APPENDIX 1. Sales Growth Biedronka Euro 13.1% Total Sales Growth LFL Sales Growth Q1 12 Q1 12 PLN 21.0% 9.5% * Pingo Doce 2.1% -1.6% ** Recheio 4.0% 2.6% Manufacturing -1.5% -1.5% Mkt. Repr. and Rest. Serv. -1.8% -1.7% * Excluding days of closure for store layout conversion. ** Ex-petrol LFL: -0.8%. 2. Stores Network Number of Stores 2011 Openings Closings Network Q1 12 Q1 12 Q1 12 Q1 11 Biedronka 1, ,908 1,665 Pingo Doce Recheio Sales Area (sqm) 2011 Openings Closings* Network Q1 12 Q1 12 Q1 12 Q1 11 Biedronka 1,113,192 22, ,136, ,962 ** Pingo Doce 451, , , ,191 Recheio 128, , ,907 * Including changes of sales area due to remodellings **Restated 3. EBITDA Margin Breakdown (% of sales) Q1 12 Q1 11 Distribution Poland 7.0% 6.6% Distribution Portugal 5.4% 5.9% Manufacturing and Services 7.3% 8.6% 8

9 1 st Quarter 12 Consolidated Management Report Appendix 4. Madeira - Reclassification Considering that the business in Madeira Island is managed under the same strategy and by the Management Team of Pingo Doce (for supermarkets) and Recheio (for the cash&carries) it was decided that from now on, the reported numbers for Madeira will be integrated, respectively, in Pingo Doce and Recheio business areas. Restatement for 2011 presented below. Net Sales & Services 2011 Q1 Q2 H1 Q3 9M Q Released Pingo Doce , , ,155 p.m. Store Sales , , ,865 Recheio Madeira Restated Pingo Doce , , ,245 p.m. Store Sales , , ,990 Recheio LFL Sales Growth 2011 Q1 Q2 H1 Q3 9M Q Released Pingo Doce 1.8% 0.1% 0.9% 1.4% 1.1% 0.2% 0.8% Recheio 0.4% 3.3% 2.0% 1.4% 1.8% 4.2% 2.4% Madeira 3.7% 5.3% 4.5% 10.2% 6.8% 9.4% 7.6% Restated Pingo Doce 1.9% 0.1% 1.0% 1.7% 1.2% 0.6% 1.1% Recheio 0.5% 3.9% 2.3% 1.8% 2.1% 4.2% 2.6% 5. Definitions EBITDA Margin H Released Pingo Doce 5.4% 6.7% Recheio 5.8% 6.4% Madeira 3.1% 4.7% Restated Pingo Doce 5.3% 6.6% Recheio 5.7% 6.3% 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); Cash Flow per share: (Net Profit + Depreciation Deferred tax Non-recurrent items) / Number of Shares; Gearing: Net Debt / Shareholder Funds. 6. Information Regarding Individual Financial Statements In accordance with number 3 of article 10 of the Regulation number 5/2008 of the Portuguese Securities Market Commission (CMVM), the 1 st Quarter Individual Financial Statements of Jerónimo Martins SGPS, S.A. will not be disclosed as they do not include significant information. 9

10 III. CONSOLIDATED FINANCIAL STATEMENTS 1 st Quarter 12

11 JERÓNIMO MARTINS, SGPS, S.A. CONSOLIDATED INCOME STATEMENT BY FUNCTIONS FOR THE QUARTERS ENDED AT 31 MARCH 2012 AND 2011 Euro thousand Notes (*) Sales and services rendered 3 2,439,935 2,241,568 Cost of sales 4 (1,888,301) (1,740,668) Gross profit 551, ,900 Distribution costs 5 (406,045) (369,302) Administrative costs 5 (49,832) (44,436) Exceptional operating profits/losses 8 (1,192) (5,079) Operating profit 94,565 82,083 Net financial costs 6 (5,223) (8,094) Profit in associated companies 2 6 Profit before taxes 89,344 73,995 Income taxes 7 (19,367) (15,573) Profit before non-controlling interests 69,977 58,422 Attributable to: Non-controlling interests 1,813 1,982 Jerónimo Martins Shareholders 68,164 56,440 Basic and diluted earnings per share- Euros To be read with the attached notes to the consolidated financial statements (*) Restated see note 2 11

12 JERÓNIMO MARTINS, SGPS, S.A. CONSOLIDATED BALANCE SHEET AT 31 MARCH 2012 AND DECEMBER 2011 Euro thousand Assets Notes Tangible assets 9 2,400,449 2,300,501 Investment properties 9 52,112 52,128 Intangible assets 9 863, ,620 Investments in associated Companies 1,054 1,052 Available-for-sale financial assets 11 6,163 6,157 Trade debtors and deferred costs 85,898 85,407 Derivative financial instruments Deferred tax assets 60,226 57,957 Total non-current assets 3,469,314 3,333,832 Inventories 428, ,262 Taxes receivable 19,018 33,834 Trade debtors, accrued income and deferred costs 230, ,200 Cash and cash equivalents , ,155 Total current assets 1,233,101 1,147,451 Total assets 4,702,415 4,481,283 Shareholders equity and liabilities Share capital 629, ,293 Share premium 22,452 22,452 Own shares (6,060) (6,060) Fair value and other reserves 13,1 44,913 (1,162) Retained earnings 371, ,338 1,062,281 1,120,861 Non-controlling interests 301, ,824 Total Shareholders equity 1,363,623 1,421,685 Borrowings , ,553 Trade creditors, accrued costs and deferred income 24 - Derivative financial instruments 10 10,638 8,785 Employee benefits 34,343 33,954 Deferred profits- state grants Provisions for risks and contingencies 16 50,641 49,597 Deferred tax liabilities 109, ,155 Total non-current liabilities 588, ,954 Trade creditors, accrued costs and deferred income 2,259,689 2,006,336 Derivative financial instruments 10 10,162 4,038 Borrowings , ,672 Taxes payable 119, ,543 Deferred profits- state grants Total current liabilities 2,750,474 2,475,644 Total Shareholders equity and liabilities 4,702,415 4,481,283 To be read with the attached notes to the consolidated financial statements 12

13 JERÓNIMO MARTINS, SGPS, S.A. CONSOLIDATED STATEMENT OF GAINS AND LOSSES RECOGNISED IN EQUITY Euro thousand March 2012 March 2011 Currency translation differences 50,641 (5,530) Fair value of cash flow hedging 383 6,213 Fair value of hedging instruments on foreign operations (4,911) - Fair value of available-for-sale financial assets 6 (12) Gains/losses directly recognised in equity 46, Net profit 69,977 58,422 Total gains/losses recognised in 1 st Quarter 116,096 59,093 Attributable to: Non-controlling interests 1,857 4,069 Jerónimo Martins Shareholders 114,239 55,024 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY Shareholders equity attributable to Shareholders of Jerónimo Martins, SGPS, S.A. Notes Share Capital Share Premium Own Shares Fair value and other reserves Retained Earnings Total Noncontrolling Interests Euro thousand Shareholders Equity Balance Sheet at 31 December ,293 22,452 (6,060) 63, , , ,706 1,131,812 Equity changes in 2011 Currency translation differences in the 1 st Quarter of (5,530) (5,530) (5,530) Fair value of cash flow hedging ,126 4,126 2,087 6,213 Fair value of available-for-sale financial assets 13.1 (12) (12) (12) Gains/losses directly recognised in equity (1,416) - (1,416) 2, Net profit in 1 st Quarter of ,440 56,440 1,982 58,422 Total gains/losses recognised during (1,416) 56,440 55,024 4,069 59,093 Dividends (375) (375) Non-controlling interests acquisition (84) (84) (257) (341) Balance Sheet at 31 March ,293 22,452 (6,060) 62, , , ,143 1,190,189 Balance Sheet at 31 December ,293 22,452 (6,060) (1,162) 476,338 1,120, ,824 1,421,685 Equity changes in 2012 Currency translation differences in the 1 st Quarter of ,641 50,641 50,641 Fair value of cash flow hedging Fair value of hedging instruments on foreign operations Fair value of available-for-sale financial assets 13.1 (4,911) (4,911) (4,911) Gains/losses directly recognised in equity ,075-46, ,119 Net profit in 1 st Quarter of ,164 68,164 1,813 69,977 Total gains/losses recognised during the year ,075 68, ,239 1, ,096 Dividends 13.2 (172,819) (172,819) (1,339) (174,158) Balance Sheet at 31 March ,293 22,452 (6,060) 44, ,683 1,062, ,342 1,363,623 To be read with the attached notes to the consolidated financial statements 13

14 JERÓNIMO MARTINS, SGPS, S.A. CONSOLIDATED CASH FLOW STATEMENT FOR THE QUARTERS ENDED AT 31 MARCH 2011 AND 2011 Euro thousand Notes (*) Operating Activities Cash generated from operations 132,330 76,153 Interest paid (7,019) (8,344) Income taxes paid (8,884) (12,970) Cash Flow from operating activities 116,427 54,839 Cash flow from investment activities (109,415) (85,273) Cash Flow from financing activities (1,227) (7,836) Net changes in cash and cash equivalents 5,785 (38,270) Cash and cash equivalents changes Cash and cash equivalents at the beginning of 1 st Quarter 530, ,927 Net changes in cash and cash equivalents 5,785 (38,270) Effect of currency translation differences 19,119 (1,161) Cash and cash equivalents at the end of 1 st Quarter , ,496 To be read with the attached notes to the consolidated financial statements (*) Restated see note 2 14

15 Notes to the Consolidated Financial Statements 31 March 2012 and 2011 Index to the Notes to the Consolidated Financial Statements Page 1 Activity Accounting policies Segment reporting Cost of sales Distribution and administrative costs Net financial costs Income tax recognised in the income statement Exceptional operating profits/losses Fixed assets and investment property Derivative financial instruments Available-for-sale financial assets Cash and cash equivalents Capital and reserves Basic and diluted earnings per share Borrowings Provisions and adjustments to the net realisable value Contingencies Related parties Events after the balance sheet date

16 1 Activity Notes to the Consolidated Financial Statements 31 March 2012 and 2011 Jerónimo Martins, SGPS, S.A. (JMH), is the parent Company of Jerónimo Martins Group (Group) and has its head office in Lisbon. Jerónimo Martins Group is devoted to the production, distribution and sale of food and other fast moving consumer goods products. The Group operates in Portugal and Poland. Head Office: Rua Tierno Galvan, Torre 3, 9º, J Lisbon Share Capital: 629,293,220 euros Registered at the Commercial Registry Office of Lisbon and Tax Number: JMH has been listed on Euronext Lisbon (ex-lisbon and Porto Stock Exchange) since The Board of Directors approved these consolidated financial statements on 24 th April Accounting policies All amounts are shown in thousand euros (EUR thousand) unless otherwise stated. The 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. The consolidated financial statements were prepared in accordance with the same standards and accounting policies adopted by the Group for the annual financial statements, including mainly an explanation of the events and relevant changes for the understanding of variations in the financial position and Group performance since the last annual report. Thus, some of the notes from the 2011 annual report are omitted because no changes occurred or are not materially relevant for the understanding of the interim financial statements. In relation to 2011, IASB issued amendments to IFRS 1 - First-time Adoption of International Financial Reporting Standards. The changes are related to the form of classification of loans received from governments, and their application is mandatory for financial years beginning on or after January 1, 2013, having no material impact on the Group s Financial Statements. Changes in Basis for Preparation (Reclassifications) Over the past years, with the development observed in the Polish market s operations, the Management has established long-term relationships with its suppliers, namely through the negotiation of prices, volumes, packages and payment terms. In this sense it has agreed with the majority of its suppliers, to extend payment terms, bearing in compensation financial expenses, thereby obtaining greater flexibility in the management of its working capital. These financial expenses have, until now, been classified in the Net financial costs line. However, this value has been gaining relevance with the growth of Biedronka s operations and as the management considers this expense is dependent on the evolution of its activity, the Group decided to classify this amount as cost of sales which therefore impact the total margin. In order to have comparable financial information, we have restated the financial statements of the previous year, as shown below: March 2011 Released Reclassification Restated Sales and services rendered 2,241,568-2,241,568 Cost of sales (1,733,188) (7,480) (1,740,668) Gross profit 508,380 (7,480) 500,900 Distribution costs (369,302) - (369,302) Administrative costs (44,436) - (44,436) Exceptional operating profits/losses (5,079) - (5,079) Operating profit 89,563 (7,480) 82,083 Net financial costs (15,574) 7,480 (8,094) Gains/Losses in associated companies 6-6 Profit before taxes 73,995-73,995 16

17 Notes to the Consolidated Financial Statements 31 March 2012 and Transactions in foreign currencies Transactions in foreign currencies are translated into Euros at the exchange rate prevailing on the transaction date. On the balance sheet date, monetary assets and liabilities expressed in foreign currencies are translated at the exchange rate prevailing on that date, and exchange differences arising from this conversion are recognised in the income statement. When qualifying as hedges on investments in foreign subsidiaries the exchange differences are deferred in equity. The main exchange rates applied on the balance sheet date are those listed below: Euro foreign exchange reference rates (foreign exchange units per 1 Euro) Rate on 31 March 2012 Average rate for the year Polish Zloty (PLN) US Dollar (USD) Swiss Franc (CHF) Colombian Peso (COP) 2, , Segment reporting Management monitors the performance of the business based on a geographical and business nature. Due to the fact that 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 distribution business unit in Poland. Apart from these, there are also other businesses, but due to their minor materiality they are not reported separately. Business segments: Portugal Distribution: comprises the business unit of JMR (Pingo Doce supermarkets), the wholesale business unit Recheio(*); Poland Distribution: the business unit using the brand Biedronka; Others, eliminations and adjustments: includes i) the business units with minor materiality (Unilever Jerónimo Martins, Gallo Worldwide, Marketing Services and Representations, Restaurants, pharmacies and drugstores in Poland), ii) the Holding companies and iii) the Group s consolidation adjustments. (*) In 2012 Madeira business unit (Pingo Doce supermarkets and Recheio Cash & Carry) was integrated, respectively, in JMR and Recheio business areas. Management evaluates the performance of segments based on the Earnings Before Interest and Taxes (EBIT). This indicator excludes the effects of non-recurrent results. Detailed information by segment at March 2012 and 2011 Portugal Distribution Poland Distribution Others, eliminations and adjustments Total JM consolidated (*) (*) Net Sales and Services Inter-segments External Customers Operational Cash-Flow (EBITDA) Depreciations and Amortisations Operational Result (EBIT) Financial Results Net Result Attributable to JM TOTAL ASSETS (1) TOTAL LIABILITIES (1) Investments in Fixed Assets 868, ,163 1,510,755 1,336,116 60,812 58,289 2,439,935 2,241, (200) (89) , ,125 1,510,575 1,335,964 61,012 58,378 2,439,876 2,241,467 47,005 49, ,007 87,810 (977) 1, , ,170 (28,197) (26,645) (26,654) (24,090) (1,428) (1,273) (56,279) (52,008) 18,809 22,903 79,352 63,720 (2,404) ,757 87, (5,221) (8,088) ,164 56,440 2,207,138 2,245,558 2,107,197 1,864, , ,292 4,702,415 4,481,283 1,530,843 1,555,736 1,353,090 1,215, , ,642 3,338,792 3,059,598 10,516 7,921 79,328 41, ,013 49,370 (1) The comparable amounts of total assets and liabilities are reported to 31 December 2011 (*) Restated see note 2 17

18 Notes to the Consolidated Financial Statements 31 March 2012 and 2011 Reconciliation between EBIT and the operational result of the income statement by functions March 2012 March 2011 EBIT 95,757 87,162 Non recurrent results (1,192) (5,079) Operational Result 94,565 82,083 Information by geographical segments at March 2012 and 2011 Net sales and services Portugal 923, ,274 Poland 1,516,236 1,338,294 Total 2,439,935 2,241,568 4 Cost of sales March 2012 March 2011 Net cost of products sold 1,883,349 1,736,873 Net cash discount and interest paid to suppliers (182) (1,421) Electronic payment commissions 3,968 3,974 Other supplementary costs 1,166 1,242 1,888,301 1,740,668 5 Distribution and administrative costs March 2012 March 2011 Supplies and services 96,643 87,264 Advertising costs 17,660 16,410 Rents 56,643 50,244 Staff costs 193, ,621 Depreciations, amortisations and assets profit/loss 55,567 51,477 Transportation costs 33,476 29,827 Other operational profit/loss 2,646 2, , ,738 6 Net financial costs March 2012 March 2011(*) Interest expense (8,010) (8,358) Interest received 2,898 1,786 Net foreign exchange 1,429 (282) Other financial costs and gains (1,538) (1,243) Fair value of financial investments held for trade: Derivative instruments (2) 3 (5,223) (8,094) (*) Restated The interest expense heading includes the interests regarding loans measured at amortized cost, as well as interest on fair value and cash flow hedging instruments (note 10). As explained in note 2, financial expenses related to the extension of payment terms from suppliers in the retail segment of Poland were restated to cost of sales. Other financial costs and gains include costs with debt issued by the Group. 18

19 Notes to the Consolidated Financial Statements 31 March 2012 and Income tax recognised in the income statement March 2012 March 2011 Current income tax Current tax of the year (16,987) (11,588) Adjustment to prior year estimate (49) (49) (17,036) (11,637) Deferred tax Temporary differences created and reversed (2,592) (3,936) Change to the recoverable amount of tax losses and temporary differences from previous years (2,331) (3,936) Total income taxes (19,367) (15,573) 8 Exceptional operating profits/losses March 2012 March 2011 Costs related with restructuring plans (624) - Impairment of assets (439) - Compensation related to termination of lease agreements - (5,000) Others (129) (79) (1,192) (5,079) 9 Fixed assets and investment property Tangible assets Investment property Intangible assets Net value at 31 December ,300,501 52, ,620 3,183,249 Foreign exchange differences 72,326-27, ,317 Increases 82,693-7,320 90,013 Disposals and write-offs (874) - (26) (900) Transfers (132) Depreciation and impairment losses (54,065) - (2,647) (56,712) Fair value changes - (16) - (16) Net value at 31 March ,400,449 52, ,394 3,315,955 Total As a consequence of the currency translation adjustment of the assets in the Group s businesses in Poland: - the Goodwill related to Poland business (Biedronka), totalling PLN 1,282,278 thousand, was updated positively by EUR 21,184 thousand; - the Goodwill related to Poland Pharmacies business (Bliska), totalling PLN 38,796 thousand, was updated positively by EUR 641 thousand. No valuations were made on the land allocated to operational activities, which are recognised at their market value. From the disposals and write-offs made in the 1 st Quarter 2012, an amount of EUR 439 thousand was recognised as a loss in the profit and loss. 19

20 Notes to the Consolidated Financial Statements 31 March 2012 and Derivative financial instruments Notional March 2012 December 2011 Assets Liabilities Assets Liabilities Notional Non Non Non Non Current Current Current Current current current current current Derivatives held for trading Interest rate swap 10 millions EUR millions EUR Fair value hedging derivatives USD loan hedging 96 millions USD , millions USD Cash flow hedging derivatives Interest rate swap (EUR) Interest rate swap (PLN) Investments in foreign entities hedging derivatives Interest rate swap (PLN) millions EUR 189 millions PLN 1000 millions PLN - - 3,614 8, millions EUR 189 millions PLN - - 4,038 7, , Total derivatives held for trading Total hedging derivatives ,162 10, ,038 8,461 Total assets/liabilities derivatives ,162 10, ,038 8,785 In March 2012 the values shown include interest receivable or payable related with these financial instruments that are due. The net payable amount is EUR 2,044 thousand. 11 Available-for-sale financial assets Regarding the financial assets available-for-sale, the increase of EUR 6 thousand relates to changes in the fair value of listed equity holdings, at the reporting date of these financial statements. 12 Cash and cash equivalents March 2012 December 2011 Bank deposits 375, ,517 Short-term investments 176, ,597 Cash and cash equivalents 2,983 3, , , Capital and reserves 13.1 Fair value and other reserves Land revaluation reserves Cash-flow Hedging Availablefor-sale financial assets Currency translation reserve Balance as at 1 January ,399 (5,114) (1,313) (85,134) (1,162) Fair value adjustment of financial investments: - Gross value 488 (6,548) (6,060) - Deferred tax (105) 1,637 1,532 - Non-controlling interests (44) (44) Fair value adjustment of available-for-sale financial instruments: - Gross value 6 6 Currency translation differences: - In the year 2,288 (182) 49,426 51,532 - Deferred tax (435) 35 (491) (891) Balance as at 31 March ,252 (4,922) (1,307) (41,110) 44,913 Land Cash-flow Available- Currency Total Total 20

21 revaluation reserves Hedging Notes to the Consolidated Financial Statements for-sale financial assets 31 March 2012 and 2011 translation reserve Balance as at 1 January ,116 (6,781) (455) (12,447) 63,433 Fair value adjustment of financial investments: - Gross value 8,356 8,356 - Deferred tax (2,143) (2,143) - Non-controlling interests (2,087) (2,087) Fair value adjustment of available-for-sale financial instruments: - Gross value (12) (12) Currency translation differences: - In the year (219) 25 (5,783) (5,977) - Deferred tax 42 (5) Balance as at 31 March ,939 (2,635) (467) (17,820) 62, Dividends Dividends distributed in 2012 in the amount of EUR 174,158 thousand, of which EUR 1,339 thousand were paid to non-controlling interests in the Group companies. On March 30 th 2012, the amount of EUR 172,819 thousand was approved in the Shareholders Meeting and, will be distributed to shareholders on April 30 th These liabilities are included in the heading trade creditors, accrued costs and deferred income. 14 Basic and diluted earnings per share 15 Borrowings March 2012 March 2011 Ordinary shares issued at the beginning of the year 629,293, ,293,220 Own shares at the beginning of the year 859, ,000 Shares issued during the year - - Weighted average number of ordinary shares 628,434, ,434,220 Diluted net result attributable to ordinary shares 68,164 56,440 Basic and diluted earnings per share Euros Current and non-current loans Non-current loans March 2012 December 2011 Bank loans 86,125 83,647 Bond loans 282, ,798 Financial lease liabilities 13,696 17,108 Current loans 382, ,553 Bank overdrafts 13,782 8,085 Bank loans 92,666 90,468 Bond loans 235, ,000 Financial lease liabilities 19,167 21, , , Financial debt The net consolidated financial debt at the balance sheet date is as follows: March 2011 December 2011 Non-current loans (note 15.1) 382, ,553 Current loans (note 15.1) 360, ,672 Derivative financial instruments (note 10) 20,782 12,813 Interest on accruals and deferrals 4,330 1,791 Bank deposits (note 12) (375,889) (340,517) Short-term investments (note 12) (176,187) (186,597) 216, ,715 21

22 Notes to the Consolidated Financial Statements 31 March 2012 and Provisions and adjustments to the net realisable value Opening balance Set up and reinforced Unused and reversed Foreign exchange difference Used Closing balance Doubtful debtors 22, (284) 233 (282) 23,152 Inventories 14, (4,176) ,276 Available-for-sale fin. investments 3,429 - (6) - - 3,423 Short terms investments Total fair value adjustments 41, (4,466) 748 (282) 37,908 Employee benefits 33, (464) 34,343 Provisions for risks and contingencies 49, (17) 417 (183) 50,641 Total of provisions 83,551 1,680 (17) 417 (647) 84, Contingencies Following the contingencies mentioned in the 2011 Annual Report, changes occurred on the headings as follows: a) In 1999, as a result of the acquisition of two companies that held establishments previously owned by former franchisees of ITMI Norte-Sul Portugal Sociedade de Desenvolvimento e Investimento, S.A., which together with Regional de Mercadorias Sociedade Central de Aprovisionamento, S.A., filed a case against various Group companies, holding them liable for those ex-franchisees' alleged non-compliance with the contract they had signed with ITMI, demanding an indemnity payment of EUR 14,600 thousand. The court ruled in favour of the defendants, denying the plaintiff s claim. The plaintiff appealed to the Court of Appeal, which confirmed the ruling of the court. Meanwhile the plaintiff filed an appeal to the Supreme Court of Justice, which is still pending. The Board of Directors maintains its belief that the amount requested will probably not be granted; l) The Tax Authorities assessed JMR Gestão de Empresas de Retalho, SGPS, S.A. for the amount of EUR 16,078 thousand due to the fact that JMR should restate the dividends received, in 2003 and 2004, from its subsidiary in the Madeira Free Zone, considering them as interest for tax purposes. According to the Portuguese Tax Authorities the said income should be subject to Corporate Income Tax in opposition to the dividends received that are exempt. JMR s Management, supported by their tax consultants and legal advisors, consider that the report issued by the Tax Authorities does not have any legal basis or validity, and will use all the resources at its disposal to challenge it. The judicial, as well as the appeal, claims presented were ruled in favour of the Portuguese tax authorities, JMR s Management, supported by its lawyers and tax advisors opinion, still believe that those decisions are not valid nor have any legal grounds and has challenged and opposed the ruling. 18 Related parties 56.13% of the Group is owned by the Sociedade Francisco Manuel dos Santos and no transactions occurred between this Company and any company of the Group in the 1 st Quarter of 2012, neither were there any amounts payable or receivable between them on March 31 st, Balances and transactions of Group companies with related parties are as follows: Sales and services rendered Stocks purchased and services supplied March 2012 March 2011 March 2012 March 2011 Joint-Ventures ,394 18,216 Associated companies Trade debtors, accrued income and deferred costs Trade creditors, accrued income and deferred costs March 2012 December 2011 March 2012 December 2011 Joint-Ventures ,407 6,642 Associated companies

23 Notes to the Consolidated Financial Statements 31 March 2012 and 2011 Balances and transactions with related parties not eliminated in the consolidation process, were as follows: Sales and services rendered Stocks purchased and services supplied March 2012 March 2011 March 2012 March 2011 Joint-Ventures ,567 10,019 Associated companies Trade debtors, accrued income and deferred costs Trade creditors, accrued income and deferred costs March 2012 December 2011 March 2012 December 2011 Joint-Ventures ,824 3,653 Associated companies All the transactions with the jointly controlled companies (joint ventures) and associate companies were made under normal market conditions, i.e., the transaction value corresponds to prices that would be applicable between non related parties. Outstanding balances between Group companies and related parties, being a result of a trade agreement, are settled in cash, and are subject to the same payment terms as those applicable to other agreements celebrated between Group companies and their suppliers. The amounts receivable are not covered by insurance and no guarantees are given or received, as the Group holds a relevant influence over these companies. 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. 19 Events after the balance sheet date At the conclusion of this Report there were no relevant events to highlight that are not disclosed in the Financial Statements. Lisbon, 24 th April, 2012 The Certified Accountant The Board of directors 23