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2013FIRSTHALFRESULTS

Unaudited

CONSOLIDATED REPORT & ACCOUNTS

1ST Quarter 2015

R&A - 1st Quarter 2015

Index

INDEX

I – Consolidated Management Report

Message from the Chairman and CEO Pedro Soares dos Santos

3

1. Sales Analysis 3

2. Results Analysis 4

3. Balance Sheet 5

4. Outlook 2015 5

II – Consolidated Management Report Appendix

1. Sales Growth 6

2. Store Network 6

3. EBITDA Margin Breakdown 6

4. Financial Costs Breakdown 6

5. Definitions 6

6. Information Regarding Individual Financial Statements 6

III – Consolidated Financial Statements

1. Consolidated Financial Statements 7

2. Notes to the Consolidated Financial Statements 11


Consolidated Management Report

3

CONSOLIDATED MANAGEMENT REPORT

Message from the Chairman and CEO – Pedro Soares dos Santos

‘In line with our expectations we had a good start to the year even though food deflation continues to challenge our operations, particularly in Poland.

Following the ongoing changes in the offer, Biedronka LFL sales in volume gained momentum.

In Portugal, both Pingo Doce and Recheio registered strong sales growth.

In Colombia, the confirmation of the market opportunity gives us full confidence to start operating in a new

region in the second half of the year.

All in all, our main banners gave evidence of being well prepared to deliver the targets and to deal with the uncertainty concerning food deflation that is still expected to remain throughout the year.’

1. Sales Analysis Net Sales and Services

(Million Euro) Q1 15 Q1 14

% total % total Pln Euro

Biedronka 2,172 68.1% 1,953 67.0% 11.4% 11.2%

Pingo Doce 772 24.2% 743 25.5%

3.9%

Recheio 180 5.7% 173 5.9%

4.1%

Mkt. Repr. and Rest. Serv. 18 0.6% 17 0.6%

3.7%

Others & Cons. Adjustments 45 1.4% 26 0.9% n.a.

Total JM 3,187 100% 2,912 100% 9.4%

Consolidated sales reached €3,187m, a growth of 9.4% versus the first three months of the previous year

(+9.6% excluding the negative currency impact).

In both Poland and Portugal, promotions and intense price competition continued to be dominant in the food retail sector.

In Poland food deflation has deepened reaching -3.7% in the first quarter of this year, from -2.6% in the last

quarter of 2014.

Biedronka total sales grew 11.2% to €2,172 million and LFL sales increased by 2.9% after incorporating -3.8% of basket deflation. The solid volume progression reflected already the still ongoing changes in the offer as well

as the Easter positive calendar effect.

I.

2.9%3.4%*

4.7%

3.3%

LFL Growth (Q1 15/Q1 14)

* Ex-Fuel LFL: 4.2%

9.5%

2.0%2.6%

5.3%

Biedronka PingoDoce

Recheio JM Cons.

Crescimento LFL (1T 12/1T 11)

1.953

743

17343

2.912

2.172

772

180 63

3.187

Biedronka Pingo Doce(store sales)

Recheio Others &Cons.Adjust.

JMConsolidated

Sales (Million Euro)

Q1 14 Q1 15

+45.3%

+11.2%

+4.1%

+3.9%

+9.4%



4

In the first three months of the year, the Company opened 58 stores, resulting in 234 new stores relative to the

first quarter of 2014.

In Portugal, food inflation went back to positive territory at an average of +0.1% in the first quarter of 2015, an improvement from the -0.5% in the last quarter of 2014.

In the quarter, supported by continuous promotional activities, Pingo Doce maintained a strong volume growth

that more than compensated its internal basket deflation. Total sales grew 3.9% (+4.7% excluding fuel) to

€772m and LFL sales, excluding fuel, increased 4.2%.

Building also on assertive commercial campaigns and benefiting from the positive calendar effect, Recheio delivered 4.7% LFL sales growth in the quarter.

In the first three months of the year, Ara and Hebe generated sales of €49m, compared with €29m in the first

quarter of 2014. Both chains worked on the preparation of their expansion for the year and Ara continued to build its second distribution centre that will serve the Caribbean Coast region.

2. Results Analysis

Net Consolidated Profit


Net Sales and Services 3,187

2,912

9.4%

Total Margin 676 21.2% 623 21.4% 8.6%

Operating Costs -511 -16.0% -464 -15.9% 10.0%

EBITDA 166 5.2% 158 5.4% 4.7%

Depreciation -73 -2.3% -67 -2.3% 8.8%

EBIT 93 2.9% 91 3.1% 1.7%

Financial Results -5 -0.2% -9 -0.3% -41.0%

Profit in Associated Companies 3 0.1% 3 0.1% 14.1%

Non-Recurrent Items 0 0.0% 0 0.0% n.a.

EBT 91 2.9% 85 2.9% 6.8%

Taxes -22 -0.7% -20 -0.7% 11.5%

Net Profit 69 2.2% 66 2.3% 5.4%

Non-Controlling Interests -4 -0.1% -3 -0.1% 34.5%

Net Profit attributable to JM 65 2.0% 62 2.1% 3.9%

EPS (€) 0.10 0.10 3.9%

Operating Profit

At the consolidated EBITDA level, there was a 4.7% growth in the quarter to €166m. The respective margin was at 5.2%, 20bps below the same quarter in the previous year.

Biedronka’s EBITDA grew 8.6% to €137m. EBITDA margin stood at 6.3% (20bps down on the same quarter last

year) reflecting, on one hand, the pressure of higher comparable food deflation and, on the other, the positive Easter sales effect.

In Portugal, the Distribution businesses delivered EBITDA of €47m, in line with previous year. EBITDA margin

was down 30bps reflecting the commitment to top line performance.

The start-up losses in Ara and Hebe reached €14m in the quarter.

158 166

5.4% 5.2%

0%

6%

0

100

200

Q1 15Q1 14

+4.7%

(Million Euro) (% Sales)



5

Financial Result

Financial charges for the Group were €5m, €3.5m below the same quarter last year, benefitting from both lower average net debt and cost of debt as well as from positive exchange differences in the first quarter of 2015.

Net Result

Following the operational performance, Net Profit attributable to Jerónimo Martins was €65m, 3.9% higher than

in the prior year.

3. Balance Sheet

(Million Euro) Q1 15 2014 Q1 14 *

Net Goodwill 654 640 647

Net Fixed Assets 3,042 2,940 2,845

Total Working Capital -1,745 -1,778 -1,548

Others 117 111 129

Invested Capital 2,067 1,912 2,072

Total Borrowings 821 714 811

Leasings 1 1 4

Accrued Interest 17 4 24

Marketable Sec. & Bank Deposits -506 -446 -367

Net Debt 332 273 471

Non-Controlling Interests 245 243 238

Share Capital 629 629 629

Reserves and Retained Earnings 861 767 734

Shareholders Funds 1,735 1,639 1,601

Gearing 19.1% 16.7% 29.4%

* Restated values – see note 2.3 of the Notes to the Consolidated Financial Statements.

Net Debt was at €332m and gearing stood at 19.1%.

Investment Programme

The Group Capex was €89m in the quarter, with Biedronka absorbing 63% of the total.

Cash Flow


EBITDA 166 158

Interest Payment -4 -5

Income Tax -26 -36

Funds From Operations 135 118

Capex Payment -94 -138

Working Capital Movement -75 -101

Others 0 0

Free Cash Flow -34 -122

The Free Cash Flow in the period, after capex payments, was €-34m, €87m above the same period in 2014.

4. Outlook 2015

Although we had, as expected, a positive start to the year, the challenging environments in which our Companies operate lead us to maintain our commitment to top line performance.

In Poland, the roll out of the sales booster programme in Biedronka remains a priority for the rest of the year.

We reiterate our full year guidance as previously disclosed for 2015.

Lisbon, 28th April, 2015

The Board of Directors


Consolidated Management Report Appendix

6

CONSOLIDATED MANAGEMENT REPORT APPENDIX

1. Sales Growth

Total Sales Growth LFL Sales Growth

Q1 15 Q1 15

Biedronka

Euro 11.2%

PLN 11.4% 2.9%

Pingo Doce 3.9% 3.4%

Ex-Fuel 4.7% 4.2%

Recheio 4.1% 4.7%

2. Stores Network

Number of Stores 2014 Openings Closings Network

Q1 15 Q1 15 Q1 15 Q1 14

Biedronka 2,587 58 6 2,639 2,405

Pingo Doce 380 2 0 382 377

Recheio 41 0 0 41 41

Sales Area (sqm) 2014 Openings

Closings/ Remodellings

Network

Q1 15 Q1 15 Q1 15 Q1 14

Biedronka 1,649,889 40,870 2,753 1,688,005 1,517,698

Pingo Doce 460,863 1,252 0 462,115 458,425

Recheio 128,665 0 0 128,665 129,295

3. EBITDA Margin Breakdown

(% of sales) Q1 15 % total Q1 14 % total

Biedronka 6.3% 83% 6.5% 80%

Distribution Portugal 4.9% 28% 5.2% 30%

Others & Cons. Adjustments n.a. -11% n.a. -10%

JM Consolidated 5.2% 100% 5.4% 100%

4. Financial Costs Breakdown


Net Interest -6 -8

Exchange Differences 2 0

Others -1 -1

Financial Results -5 -9

5. Definitions

Like For Like (LFL) sales: sales made by stores that operated under the same conditions in the two periods. Excludes stores opened or closed in one of the two periods. Sales of stores that underwent profound

remodelling are excluded for the remodelling period (store closure);

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 Quarter Individual Financial Statements of Jerónimo Martins SGPS, S.A. will not be

disclosed as they do not include additional relevant information, compared to the one presented in this report.

II.


7 7

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT BY FUNCTIONS

FOR THE QUARTERS ENDED AT 31 MARCH 2015 AND 2014

Euro thousand

Notes 2015 2014

Sales and services rendered 3 3,187,174 2,912,458

Cost of sales 4 (2,510,914) (2,289,884)

Total margin 676,260 622,574

Distribution costs 4 (528,455) (478,227)

Administrative costs 4 (54,825) (52,959)

Exceptional operating profits/losses 4 (41) (275)

Operating profit 92,939 91,113

Net financial costs 5 (5,103) (8,648)

Profit in joint ventures and associates 3,441 3,015

Profit before taxes 91,277 85,480

Income taxes 6 (22,188) (19,900)

Profit before non-controlling interests 69,089 65,580

Attributable to:

Non-controlling interests 4,312 3,207

Jerónimo Martins Shareholders 64,777 62,373

Basic and diluted earnings per share- Euros 12 0.1031 0.0993

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

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


Euro thousand

To be read with the attached notes to the consolidated financial statements (*) Restated – see note 2.3

Notes 2015 2014(*)

Net profit 69,089 65,580

Other comprehensive income:

Items that will not be reclassified to profit or loss

- -

Items that may be reclassified to profit or loss

Currency translation differences 38,249 (3,178)

Change in fair value of cash flow hedges 8 534 1,060

Change in fair value of hedging instruments on foreign operations 8 (9,964) (627)

Change in fair value of available-for-sale financial assets 168 124

Related tax 455 (168)

29,442 (2,789)

Other comprehensive income, net of income tax 29,442 (2,789)

Total comprehensive income 98,531 62,791

Attributable to:


Jerónimo Martins Shareholders 94,092 59,299

Total comprehensive income 98,531 62,791

III.


Consolidated Financial Statements

8

CONSOLIDATED BALANCE SHEET AT 31 MARCH 2015 AND DECEMBER 2014

Euro thousand


Notes 31 March 2015

31 December 2014

Assets

Tangible assets 7 2,867,325 2,773,324

Investment property 7 42,931 42,947

Intangible assets 7 827,918 806,194

Investments in joint ventures and associates 9 77,713 74,272

Available-for-sale financial assets 1,420 1,252

Trade debtors, accrued income and deferred costs 102,651 102,112

Deferred tax assets 48,297 51,349

Total non-current assets 3,968,255 3,851,450

Inventories 674,063 572,004

Income tax receivable 2,033 2,217

Trade debtors, accrued income and deferred costs 245,502 313,463

Derivative financial instruments 8 - 2,627

Cash and cash equivalents 10 490,561 430,660

Total current assets 1,412,159 1,320,971

Total assets 5,380,414 5,172,421

Shareholders’ equity and liabilities

Share capital 629,293 629,293

Share premium 22,452 22,452

Own shares (6,060) (6,060)

Other reserves (37,952) (67,267)

Retained earnings 882,175 817,398

1,489,908 1,395,816


Total Shareholders’ equity 1,735,309 1,638,691

Borrowings 13 503,650 373,877

Trade creditors, accrued costs and deferred income 830 836

Derivative financial instruments 8 2,659 2,681

Employee benefits 14 42,612 42,460

Provisions for risks and contingencies 14 79,669 81,828

Deferred tax liabilities 48,514 58,890

Total non-current liabilities 677,934 560,572

Trade creditors, accrued costs and deferred income 317,803 340,925

Derivative financial instruments 8 2,620,971 2,616,004

Borrowings 13 9,172 1,715

Income tax payable 19,225 14,514

Total current liabilities 2,967,171 2,973,158

Total Shareholders’ equity and liabilities 5,380,414 5,172,421



9

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY Euro thousand

Shareholders’ equity attributable to Shareholders of Jerónimo Martins, SGPS, S.A.

N

o

t

e

s

Share

capital

Share

premium

Own

shares

Other reserves

Retained

earnings Total

Non-

controlling

interests

Shareholders’

equity Cash flow

hedge

Available-for-

sale financial assets

Currency

translation reserves

Balance Sheet as at 31

December 2013 (*) 629,293 22,452 (6,060) (2,453) (1,251) (48,111) 709,661 1,303,531 235,835 1,539,366

Equity changes in the 1st

Quarter of 2014

Currency translation

differences 3 (3,093) (3,090) (3,090)

Change in fair value of cash

flow hedging 519 519 285 804

Change in fair value of

hedging instruments on

foreign operations

(627) (627) (627)


available-for-sale financial

investments

1,374 (1,250) 124 124

Other comprehensive income

- - - 522 1,374 (3,720) (1,250) (3,074) 285 (2,789)

Net profit 62,373 62,373 3,207 65,580

Total comprehensive

income - - - 522 1,374 (3,720) 61,123 59,299 3,492 62,791

Dividends (1,308) (1,308)


March 2014 (*) 629,293 22,452 (6,060) (1,931) 123 (51,831) 770,784 1,362,830 238,019 1,600,849


December 2014 629,293 22,452 (6,060) (2,548) (157) (64,562) 817,398 1,395,816 242,875 1,638,691

Equity changes in the 1st Quarter of 2015

Currency translation differences

(87) 38,941 38,854

38,854

Change in fair value of cash

flow hedging 295 295 127 422


hedging instruments on

foreign operations

(9,964) (9,964) (9,964)


available-for-sale financial

investments

130 130 130

Other comprehensive income

208 130 28,977

29,315 127 29,442

Net profit 64,777 64,777 4,312 69,089

Total comprehensive income for the year

208 130 28,977 64,777 94,092 4,439 98,531

Dividends 11.1 (1,913) (1,913)

Balance Sheet as at 31 March 2015 629,293 22,452 (6,060) (2,340) (27) (35,585) 882,175 1,489,908 245,401 1,735,309


(*) Restated – see note 2.3



10

CONSOLIDATED CASH FLOW STATEMENT


Euro thousand

Notes 2015 2014

Operating activities

Cash received from customers 3,593,082 3,270,183

Cash paid to suppliers (3,260,986) (3,001,237)

Cash paid to employees (241,341) (212,031)

Cash generated from operations 90,755 56,915

Interest paid (4,923) (4,882)

Income taxes paid (26,321) (35,749)

Cash flow from operating activities 59,511 16,284

Cash flow from investment activities (93,728) (138,044)

Cash flow from financing activities 80,786 121,555

Net changes in cash and cash equivalents 46,569 (205)

Cash and cash equivalents changes

Cash and cash equivalents at the beginning of 1st Quarter 430,660 371,671

Net changes in cash and cash equivalents 46,569 (205)

Effect of currency translation differences 13,332 (368)

Cash and cash equivalents at the end of 1st Quarter 10 490,561 371,098


R&A - 1st Quarter 2015 Notes to the Consolidated Financial Statements

11

Index to the Notes to the Consolidated Financial Statements Page

1 Activity ................................................................................................................................................ 12

2 Accounting policies ................................................................................................................................ 12

3 Segment reporting ................................................................................................................................ 15

4 Total margin and operating costs ............................................................................................................ 16

5 Net financial costs ................................................................................................................................. 16

6 Income tax recognised in the income statement ........................................................................................ 16

7 Fixed assets, intangible assets and investment property ............................................................................ 17

8 Derivative financial instruments .............................................................................................................. 17

9 Investments in joint ventures and associates ............................................................................................ 17

10 Cash and cash equivalents ..................................................................................................................... 17

11 Capital and reserves .............................................................................................................................. 18

12 Basic and diluted earnings per share........................................................................................................ 18

13 Borrowings ........................................................................................................................................... 18

14 Provisions and employee benefits responsibilities ...................................................................................... 18

15 Contingencies ....................................................................................................................................... 19

16 Related parties...................................................................................................................................... 19

17 Events after the balance sheet date ......................................................................................................... 19


12

1 Activity

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, Poland and Colombia.

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

Share Capital: 629,293,220 euros

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

JMH has been listed on Euronext Lisbon since 1989.

The Board of Directors approved these consolidated financial statements on 28th April 2015.

2 Accounting policies

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

JMH consolidated financial statements were prepared in accordance with the interim financial reporting standard

(IAS 34), and all other International Financial Reporting Standards (IFRS) issued by International Accounting Standards Board (IASB) and with the interpretations of the International Financial Reporting Interpretations

Committee (IFRIC) as adopted by the European Union (EU).

The consolidated financial statements were prepared in accordance with the same standards and accounting policies adopted by the Group in the preparation of the annual financial statements, including an explanation of the events and relevant changes for the understanding of variations in the financial position and Group

performance since the last annual report. Thus, some of the notes from the 2014 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 2014 Annual Report, point 30 - Financial risks, the Company, 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 2015, 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.

2.1 New standards, amendments and interpretations adopted by the Group

In 2014, the EU issued the following Regulations, which were adopted by the Group from January 1st 2015:

EU Regulation IASB Standard or IFRIC Interpretation

endorsed by EU

Issued in Mandatory for

financial years beginning on or after

Regulation no. 1361/2014

Annual Improvements to IFRS’s 2011–2013 Cycle: IFRS 1 First-time Adoption of IFRS, IFRS 3 Business Combinations,

IFRS 13 Fair Value Measurement and IAS 40 Investment Property (Amendment)

December 2013 January 1, 2015

The Group adopted the new improvements, with no significant impact on the Consolidated Financial Statements.

2.2 New standards, amendments and interpretations endorsed by EU but not effective for the financial year beginning 1 January 2015 and not early adopted

The EU adopted several improvements to IFRS’s, issued by the IASB and Interpretations issued by the IFRIC:

EU Regulation IASB Standard or IFRIC Interpretation endorsed by EU

Issued in Mandatory for financial years

beginning on or after

Regulation no. 28/2015

Annual Improvements to IFRS’s 2010–2012 Cycle: IFRS 2

Share-Based Payment, IFRS 3 Business Combinations, IFRS 8 Operating Segments, IFRS 13 Fair Value Measurement,

IAS 16 Property, Plant and Equipment, IAS 24 Related Party Disclosures and IAS 38 Intangible Assets (Amendment)

December 2013 February 1, 2015

Regulation no. 29/2015 IAS 19 Employee Benefits: Defined Benefit Plans - Employee

Contributions (Amendment) November 2013 February 1, 2015

These amendments to standards are effective for annual periods beginning on or after February 1, 2015, and have not been applied in preparing these consolidated financial statements. None of these amendments is

expected to have a significant impact on the Group’s Consolidated Financial Statements.


13

2.3 Restatement of financial statements (change of accounting policies)

The Group has decided to adopt the historical cost for land (classified as tangible assets) in the financial

statements prepared as at December 31, 2014, with restatement of the opening balances at January 1, 2014

and January 1, 2013.

In accordance with IAS 8, the effects of the change in the accounting policy were applied retrospectively. There

are no impacts on the Income Statement for the quarter ended in 31 March 2014. The Balance Sheet opening and closing balances for the year 2014, Statement of Comprehensive Income and Statement of Changes in

Shareholders’ Equity were impacted as follows:

CONSOLIDATED BALANCE SHEET

31 March 2014

Published

Change of accounting

policies Restated

Assets

Tangible assets 2.815.662 (129.768) 2.685.894

Investment property 44.638 - 44.638

Intangible assets 805.681 - 805.681

Investments in joint ventures and associates 84.446 (2.897) 81.549

Other non-current assets 141.495 - 141.495

Total non-current assets 3.891.922 (132.665) 3.759.257

Inventories 579.906 - 579.906

Other current assets 267.770 - 267.770

Cash and cash equivalents 371.098 - 371.098

Total current assets 1.218.774 - 1.218.774

Total assets 5.110.696 (132.665) 4.978.031

Shareholders’ equity and liabilities

Attributable to Jerónimo Martins Shareholders 1.441.856 (79.026) 1.362.830

Non-controlling interests 268.788 (30.769) 238.019

Total shareholders’ equity 1.710.644 (109.795) 1.600.849

Borrowings 451.607 - 451.607

Deferred tax liabilities 75.110 (22.870) 52.240

Other non-current liabilities 121.718 - 121.718

Total non-current liabilities 648.435 (22.870) 625.565

Borrowings 362.922 - 362.922

Other current liabilities 2.388.695 - 2.388.695

Total current liabilities 2.751.617 - 2.751.617

Total shareholders’ equity and liabilities 5.110.696 (132.665) 4.978.031


14

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

Shareholders’ equity attributable to Shareholders of Jerónimo Martins, SGPS, S.A.

Share

capital

Share

premium

Own

shares

Fair value and other reserves

Retained

earnings Total

Non-

controlling interests

Shareholders’

equity

Land revaluation

Cash

flow hedge

Available-

for-sale financial

assets

Adj. in

joint ventures

and

assoc.

Currency translation

reserves

Balance Sheet as at 1 January 2014 - Published

629,293 22,452 (6,060) 76,230 (2,453) (1,251) 2,897 (48,111) 709,661 1,382,658 266,604 1,649,262

Change of accounting policies - - - (76,230) - - (2,897) - - (79,127) (30,769) (109,896)

Balance Sheet at at 1 January 2014 - Restated

629,293 22,452 (6,060) - (2,453) (1,251) - (48,111) 709,661 1,303,531 235,835 1,539,366

Comprehensive income

restated - - - - 522 1,374 - (3,720) 61,123 59,299 3,492 62,791

Dividends - - (1,308) (1,308)


March 2014 - Restated 629,293 22,452 (6,060) - (1,931) 123 - (51,831) 770,784 1,362,830 238,019 1,600,849

2.4. 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:

31 March 2014

Published Change of accounting

policies

Restated

Net profit 65,580 - 65,580

Other comprehensive income:

Items that will not be reclassified to profit or loss

Revaluation of fixed assets - - -

Remeasurements of post-employment benefit obligations - - -

Related tax - - -

- - -

Items that may be reclassified to profit or loss

Currency translation differences (3,302) 124 (3,178)

Change in fair value of cash flow hedging 1,060 - 1,060

Change in fair value of hedging instruments on foreign operations (627) - (627)

Change in fair value of available-for-sale financial assets 124 - 124

Related tax (145) (23) (168)

(2,890) 101 (2,789)

Other comprehensive income, net of income taxes (2,890) 101 (2,789)

Total comprehensive income 62,690 101 62,791

Attributable to:

Non-controlling interests 3,492 - 3,492

Jerónimo Martins Shareholders 59,198 101 59,299

Total comprehensive income 62,690 101 62,791

Euro foreign exchange reference rates

(foreign exchange units per 1 Euro)

Rate on

31 March 2015

Average rate for

the period

Polish Zloty (PLN) 4.0854 4.1909

Swiss Franc (CHF) 1.0463 -

Colombian Peso (COP) 2,777.7700 2,771.5700


15

3 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 low 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 reduced materiality (Marketing Services and Representations, Restaurants in Portugal, Health and Beauty Retail in Poland, retail business in Colombia), ii) the Holding companies and iii) the Group’s consolidation adjustments.

Management evaluates the performance of segments based on the Earnings Before Interest and Taxes (EBIT). This indicator excludes the effects of exceptional operating profits/losses.

Detailed information by segment at March 2015 and 2014

Portugal Distribution Poland

Distribution Others, eliminations

and adjustments Total JM

consolidated

2015 2014 2015 2014 2015 2014 2015 2014

Net sales and services 953,423 918,268 2,171,817 1,952,724 61,934 41,466 3,187,174 2,912,458

Inter-segments 94 54 394 365 (488) (419) - -

External customers 953,329 918,214 2,171,423 1,952,359 62,422 41,885 3,187,174 2,912,458

Operational cash-flow (EBITDA) 47,065 47,285 137,073 126,185 (18,477) (15,261) 165,661 158,209

Depreciations and amortisations (26,650) (27,517) (42,701) (36,711) (3,330) (2,593) (72,681) (66,821)

Operational result (EBIT) 20,415 19,768 94,372 89,474

(21,807)

(17,854) 92,980 91,388

Exceptional operating profits/losses (41) (275)

Financial results (1,662) (5,633)

Income tax (22,188) (19,900)

Net result attributable to JM 64,777 62,373

Total assets (*) 1,966,851 1,986,221 3,054,446 2,826,930 359,117 359,270 5,380,414 5,172,421

Total liabilities (*) 1,425,548 1,440,543 2,231,383 2,100,836 (11,826) (7,649) 3,645,105 3,533,730

Investments in fixed assets 21,058 7,427 56,458 94,879 11,682 6,916 89,198 109,222

* Restated. In 2014 was changed the accounting policy applied to land classified as tangible assets, from the previous revaluation model to the current historical cost model. See note 2.3.

Reconciliation between EBIT and the operational result of the income statement by functions

March 2015 March 2014

EBIT 92,980 91,388


Operational result 92,939 91,113


16

4 Total margin and operating costs


Net sales and services 3,187,174 2,912,458

Net cost of products sold (2,502,298) (2,283,375)

Net cash discount and interest paid to suppliers (2,274) (1,816)

Electronic payment commissions (4,544) (3,112)

Other supplementary costs (1,798) (1,581)

Cost of sales (2,510,914) (2,289,884)

Total margin 676,260 622,574

Supplies and services (120,038) (114,516)

Advertising costs (17,611) (13,159)

Rents (81,184) (73,755)

Staff costs (252,576) (224,120)

Amortization (72,132) (66,251)

Profit/loss with tangible and intangible assets (589) (550)

Transportation costs (35,083) (35,208)

Other operational profit/loss (4,067) (3,627)

Distribution and administrative costs (583,280) (531,186)

Legal contingencies (160) -

Losses from organizational restructuring programmes (488) (251)

Assets write-offs and gains/losses in sale of tangible assets 397 (24)

Others 210 -


Operating profit 92,939 91,113

5 Net financial costs


Interest expense (6,426) (7,869)

Interest received 561 345

Net foreign exchange 1,941 (199)

Other financial costs and gains (1,144) (919)

Fair value of financial investments held for trade:

Derivative instruments (35) (6)

(5,103) (8,648)

The interest expense heading includes the interest regarding loans measured at amortised cost, as well as interest on fair value and cash flow hedging instruments (note 8).

Other financial costs and gains include costs with debt issued by the Group.

6 Income tax recognised in the income statement


Current income tax

Current tax of the year (31,011) (24,160)

Adjustment to prior year estimation 185 480

(30,826) (23,680)

Deferred tax

Temporary differences created and reversed 8,535 3,993

Change to the recoverable amount of tax losses and temporary differences from previous years

(255) (571)

8,280 3,422

Other gains/losses related to taxes

Impact of changes in estimates for tax litigations 358 358

358 358

Total income taxes (22,188) (19,900)


17

7 Fixed assets, intangible assets and investment property

Tangible assets Investment

property Intangible

assets Total

Net value at 31 December 2014 2,773,324 42,947 806,194 3,622,465

Foreign exchange differences 79,504 - 20,906 100,410

Increases 84,775 - 4,423 89,198

Disposals and write-offs (1,158) - (34) (1,192)

Transfers (108) - 108 -

Depreciation and impairment losses (69,012) - (3,679) (72,691)

Fair value changes (16) (16)

Net value at 31 March 2015 2,867,325 42,931 827,918 3,738,174

As a consequence of currency translation adjustment of the assets in the Group’s businesses reported in foreign

currency, the net amount of tangible and intangible assets increased by EUR 100,410 thousand, of which the amount of EUR 14,212 thousand is related to Goodwill.

The difference to total of amortisations stated in note 4, relates mainly to the production activities that were attributable to the cost of the goods sold.

8 Derivative financial instruments

Notional

March 2015 Notional

December 2014

Assets Liabilities Assets Liabilities

Current Non-

current Current

Non-

current Current

Non-

current Current

Non-

current

Derivatives held for trading

Currency forwards (PLN) 12.1million

PLN - - 36 - - - - - -

Cash flow hedging derivatives

Interest rate swap (EUR) 225 million

EUR - - 1,799 -

225 million

EUR - - 1,715 -

Interest rate swap (PLN) 500 million

PLN - - - 2,659 500 million

PLN - - - 2,681

Investments in foreign entities

hedging derivatives

Currency forwards (PLN) 1,005 million

PLN - - 7,337 - 600 million

PLN 2,627 - - -

Total derivatives held for trading - - 36 - - - - -

Total hedging derivatives - - 9,136 2,659 2,627 - 1,715 2,681

Total assets/liabilities derivatives - - 9,172 2,659 2,627 - 1,715 2,681

In March 2015 the values shown include interest receivable or payable related with these financial instruments that are due. The net payable amount is EUR 911 thousand.

9 Investments in joint ventures and associates

During the 1st Quarter of 2015, the movement under this heading was as follows:

Joint ventures Associates Total

March

2015

December

2014

March

2015

December

2014

March

2015

December

2014

Opening balance 73,537 77,639 735 895 74,272 78,534

Equity method:

Net result 3,419 14,973 22 208 3,441 15,181

Dividends and other income received - (19,159) - (368) - (19,527)

Other comprehensive income - 84 - - - 84

Closing balance 76,956 73,537 757 735 77,713 74,272

10 Cash and cash equivalents

March 2015 December 2014

Bank deposits 226,891 171,790

Short-term investments 259,911 255,043

Cash and cash equivalents 3,759 3,827

490,561 430,660


18

11 Capital and reserves

11.1 Dividends

Dividends in the amount of EUR 1,913 thousand were distributed and paid to non-controlling interests in the Group companies.

12 Basic and diluted earnings per share


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)

Shares issued during the year - -

Weighted average number of ordinary shares 628,434,220 628,434,220

Diluted net result attributable to ordinary shares 64,777 62,373

Basic and diluted earnings per share – Euros 0.1031 0.0993

13 Borrowings

JM Nieruchomosci - Sp. Komandytowo-akcyjna contracted a loan on a total amount of PLN 415.000 thousand

with maturity in 2020.

13.1 Current and non-current loans


Non-current loans

Bank loans 503,457 373,651

Financial lease liabilities 193 226

503,650 373,877

Current loans

Bank overdrafts 25,720 58,327

Bank loans 66,386 56,544

Bond loans 225,000 225,000

Financial lease liabilities 697 1,054

317,803 340,925

13.2 Financial debt

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


Non-current loans (note 13.1) 503,650 373,877

Current loans (note 13.1) 317,803 340,925

Derivative financial instruments (note 8) 11,831 1,769

Interest on accruals and deferrals 4,699 2,622

Bank deposits (note 10) (226,891) (171,790)

Short-term investments (note 10) (259,911) (255,043)

Collateral deposits (19,367) (19,367)

331,814 272,993

14 Provisions and employee benefits responsibilities

Risks and contingencies

Employee benefits

Balance at 1 January 81,828 42,460

Set up, reinforced and transfers 1,491 791

Unused and reversed (600) -

Foreign exchange difference 94 -

Used (3,144) (639)

Balance at 31 March 79,669 42,612


19

15 Contingencies

Following the contingencies mentioned in the 2014 Annual Report, changes occurred on the headings f) and i):

f) The Portuguese Tax Authorities carried out some corrections of VAT rates applied to certain goods sold by some Group companies. With these corrections the total amount of assessments for the years 2005 to 2012

in Pingo Doce, Feira Nova and Recheio SGPS amounted to EUR 1,814 thousand, EUR 1,300 thousand and EUR 551 thousand, respectively. The Board of Directors believes that the Tax Authorities have no grounds to

request this payment and these assessments have been challenged;

i) Sociedade Ponto Verde (SPV) claimed through a judicial proceeding against Pingo Doce, in September 2014, an amount of EUR 3,397 thousand (including outstanding interest), related to the Management of the

secondary and tertiary packaging waste system. Pingo Doce contested considering that SPV does not manage that kind of waste and therefore no amount is due. The Civil Court, having the same understanding of Pingo

Doce, declared itself materially incompetent to decide the case, saying that it should be judged by the administrative courts. SPV filed an appeal to the Court of Appeal where the procedure stands by.

16 Related parties

56.14% 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 1st Quarter of 2015, neither were there any

amounts payable or receivable between them on March 31st, 2015.

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

Sales and services rendered Stocks purchased and services supplied

March 2015 March 2014 March 2015 March 2014

Joint ventures 2 156 24,107 21,068

Associates - - - 9

Other related parties (*) 24 22 9 65

Trade debtors, accrued income and

deferred costs

Trade creditors, accrued costs and

deferred income

March 2015 December 2014 March 2015 December 2014

Joint ventures 835 640 19,447 5,774

Associates - - - -

Other related parties (*) 33 17 2 -

(*) Entities controlled by the major Shareholder of Jerónimo Martins and entities owned or controlled by members of the Board of Directors.

All the transactions with these related parties were made under normal market conditions, i.e. the transaction

value corresponds to prices that would be applicable between non-related parties.

Outstanding balances between Group companies and related parties, being a result of 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.

17 Events after the balance sheet date

On April 9th 2015, the distribution of dividends in the amount of EUR 153,966 thousand was approved in the Shareholders Meeting and, will be distributed to shareholders on May 7th 2015.

Lisbon, 28th April, 2015

The Certified Accountant The Board of Directors

consolidated report & accounts 1st - … · consolidated report & accounts ... ii –...

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