Jeronimo Martins Pe

Good morning, ladies and gentlemen, and thank you for joining this call to present first quarter 2023 results. In our corporate website, a set of materials is available, comprising the release, a slide presentation, and a fact sheet. Q1 figures indeed reflect a good start to the year. All banners leverage the strong competitive positions held at year-end to continue fueling growth in a quarter when food inflation remain the key feature of the performance. With consumers progressively more pressured, our strategic focus remains unchanged, with price competitiveness as the critical tool to drive growth, protect volumes, and mitigate, as much as possible, trading down effects. The outcome of this strategic option was particularly remarkable in Poland, where, despite the challenges, Biadronka delivered an outstanding performance. Group sales grew by 23.4% to reach 6.8 billion euros. It is important to flag that currency devaluation was a headwind to growth. At constant exchange rates, group sales grew by 26.5%. The strong sales performance led EBITDA to grow by 20.1% to reach 446 million euros. EBITDA margin declined 18 basis points to 6.6%. Cash flow generation was negative in €226 million, reflecting the seasonal working capital outflow of the business in the first quarter. Our financial situation remains extremely solid. By the end of March, net cash position, excluding capitalized operating leases, was at €1 billion. We entered 2023 with persistent high food inflation, also reflecting the comps as inflation accelerated in Poland and Portugal from Q2 2022 onwards, when the war exacerbated the pressure on food and energy prices. In face of rising prices and higher interest rates, consumers have become progressively more cautious despite the support to household income in each of our three countries, from the national minimum wage increases in January. In Portugal and Colombia, the trading down in food continued to gain momentum. The first quarter P&L reflects a sales-driven performance. Price investment by all retail banners and the effects of trading down, particularly in Portugal and Colombia, pressured gross margin, which declined from 21.5% to 20.8%. Our reinforced price competitiveness led to a good sales performance across the banners and improved operational leverage, limiting the impact of cost inflation. All in all, EBITDA margin was down, while the good sales progression led EBITDA in absolute terms to grow by 20.1% and reach 446 million euros. As previously said, cash flow was negative in €226 million, with Q1 being, as usual, impacted by payments to trade suppliers, particularly when following a successful Christmas season. Our balance sheet remains very robust, with a net cash position of €1 billion, excluding capitalized operating leases at 31st March. As a reminder, The AGM held in April 20 approved dividends in the amount of €345.6 million to be paid by next May 17. I will now guide you through sales performance in a bit more detail. This was a very strong quarter, with all banners contributing to group sales growth. Biedronka's remarkable performance translated into €1 billion of additional sales in Q1-23 versus Q1-22. Currency devaluation impacted group sales by more than €170 million. With a positive contribution from all banners, group like-for-like reached 21.2% in Q1. In the like-for-like graphs on the right-hand side, you can clearly see that comps will be even more challenging from Q2 onwards. Viadronka invested strongly to drive sales growth, protect volumes, and minimize trading downtrends in a context of softer consumer demand. Over the period, the company widened the gap of its own basket inflation to the market's food inflation and clearly earned further consumer preference. In the like-for-like, volumes were positive in every month of the period, despite the slowdown registered throughout the quarter. I would also like to flag that the early Easter period in 2023 versus 2022 is estimated to have contributed to the performance with one percentage point. Sales grew 28.3% in local currency, and market share in the first two months of the year increased by 1.6 percentage points, according to JFK, on fast-moving consumer goods. Hebe continued to perform well, with sales growth at 31.9%. The online operations posted a 43% increase and represented 17% of the total top line, despite the still marginal contribution of Czechia and Slovakia. In Portugal, we saw an acceleration of trading downtrends as the purchasing power of consumers deteriorated. PINGDOS kept investing in price and promotions to protect sales and delivered a growth of 9.4%, with like-for-like at 8.4% excluding fuel. RCEI continued to benefit from an improving ORECA sector and delivered strong sales growth, of 29.2%, including a 27.1% like-for-like. In Colombia, we saw already early signs of food disinflation, though inflation remained high at 24% and contributed to a very difficult market context. Continuing to focus on its price competitiveness and promotional dynamic, ARA grew sales in local currency by 50.8%, with Life for Life standing at 18.9%. The expansion program remains a top priority and the banner opened 64 new stores in the period. Driven by the strong top-line delivery, EBITDA grew 20.1%, 22.7% at constant exchange rates. Following price investments, and also pronounced trading down in the cases of Tingo Doce and Ara, all our retail banners registered gross margin reductions versus the same period of 2022. The strong sales delivery, however, allowed for operational leverage to mitigate this pressure on EBITDA margin that decreased 18 basis points in the period. The Adroncas EBITDA margin was 22 basis points down with a strong like-for-like sales growth limiting the impact of inflation in labor costs registered in the period. It is worth highlighting that despite remaining volatile, cost pressure from energy and fuel eased in Q1-23. In Portugal, a decay margin at Pingudos was down by 13 basis points, pressured by price investments, while Shea sustained recovery allowed its margin to improve. At Hebe, margin decreased 16 basis points, reflecting the investment to launch its international operations. At a WTA margin, with 25 basis points down in Q1-23, as a result of the combination of price investment to drive sales and a large number of stores with very low maturity. Wrapping up, all banners continue to deliver well despite the deteriorating consumer environment. the context is still uncertain with regards to the evolution of the prices of food, energy, and fuel, and the progression of interest rates. All these factors will determine the level of pressure on consumer demand. We know that the base of comparison will challenge us even more from now on, but we are confident in the ability of our banners to navigate challenging times and keep delivering on ambitious goals. Adding to this, we preserve a very solid financial position. As such, we will remain focused on guaranteeing price competitiveness to drive sales. At the same time, we will continue to execute our CAPEX program as planned, expanding and improving our store networks in the three countries where we operate, not losing sight of our long-term vision. Thank you for your attention. Operator, I am now ready to take questions.

Thank you. To ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, you can please press star 1 and 1 again. Once again, to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. And to withdraw your question, you can please press star 1 and 1 again. Thank you. We are now going to proceed with our first question. The questions come from the land of Chao Pinto from JB Capital. Please ask your question.

Hi, good morning, everyone. Thanks for taking my questions. I have three if I may. The first one, can you please quantify the effect on Biotroncus like-for-like? The second one, food PPI has decelerated materially in March. Are you already seeing Or can you anticipate some lower pressure from COGS inflation for the next few quarters? And last one on Slovakia. Can you give us some color on your plans there? When do you expect to enter and will do it organically? Or how many stores can you source using the current logistics structure that you have in Poland? Thank you very much.