Jeronimo Martins Pe

Good day and welcome to the Jeronimo Martins first nine months 2025 results conference call. Today's conference is being recorded. At this time I would like to turn the conference over to Ms. Ana Luisa Virginia, Chief Financial Officer of Jeronimo Martins Group. Please go ahead madam.

Thank you Sharon. Good morning ladies and gentlemen and thank you for joining this call dedicated to our first nine months as results. As usual In our corporate website, you can find the results release, a slide presentation, and a fact sheet for the period. The first nine months of 2025 continue to be defined by the ongoing global geopolitical uncertainty that is also shaping consumer sentiment and fostering a more cautious, value-driven approach among shoppers. Against this challenging context, price remained at the heart of our strategy across all banners. Every team worked hard to uphold our promise of price leadership and to curate an attractive quality assortment, securing customer preference and driving sales growth. The reinforced commitment to cost discipline, operational efficiency and productivity paid off and ensured that the BPA margins remained robust, despite the tough combination of low-basket inflation with high-cost inflation in extremely competitive backdrops. Meanwhile, our ambitious CAPEX program is being executed as planned, reaching €816 million in the period, with the opening of 274 new stores and the renovation of 170 locations. The balance sheet captures robustness, closing September with a net cash position excluding capitalized leases of €467 million. All in all, our nine-month results are solid and show that our banners business models are agile and prepared to adjust and respond to the current circumstances. Looking now at the P&L, I'm going to focus on the nine months of figures and flag a couple of things. On sales, our banners delivered well overall, driving the group's top line to grow by 7.1% or 6.6% at constant exchange rates, to 26.5 billion euros. EBITDA reached 1.8 billion euros, 10.9% up on the same period of the previous year, or a 9.9% growth at constant exchange rates. EBITDA margin was 23 basis points up versus the nine months of 2024, reaching 6.8%. This performance is the result of good sales delivery combined with cost management and productivity measures, which more than compensated for price investments and cost inflation. The execution of the investment program is reflected in the evolution of both depreciation and net financial costs, as the latter also includes the interest expense of capitalized leases. The other profit and losses heading incorporates indemnities, write-offs, and provisions, as well as the allocation of 40 million euros from the 2024 results to the Jerónimo Martins Foundation. Cash flow for the period, excluding the dividends paid in May, was at 128 million euros. The two most important things to highlight here are the improved funds from operations, following the solid sales and EBITDA delivery, and enhanced working capital flows, which reflect the different growth dynamics compared with the same period of prior year and stricter stocks management. As already mentioned, by the end of these first nine months, thanks to the good sales performance and despite the execution of our ambitious CapEx plan, the balance sheet remains solid, including a positive cash position of €467 million. Looking now into the detail of the performance, I will start with the top line. Group sales grew by 7.1%, 6.6% at constant exchange rates, to €26.5 billion, including a like-for-like of 2.4% and a solid contribution from expansion. All banners did well, with Biedronka in particular adding €1 billion of sales at constant exchange rates in the nine-month period. In Poland, the market context continued to be highly competitive and consumer behavior remained cautious, focusing on low prices and promotional offers. Throughout its 30 years history in the country and in a meaningful way also this year, Biedronka has kept Polish families' needs and expectations at the heart of its offering. The banner maintained its price leadership and continued to offer the best savings opportunities while working to constantly evolve its assortment and improve its store network, having opened 111 new stores and remodeled 110 in the nine months. Sales grew by 7.4% to 18.8 billion euros, or 5.8% in local currency, with like-for-like at 1.8%, despite the challenging comps. The like-for-like growth and the expansion of the store network resulted once again in market share gains. operated in a context that became increasingly price competitive, which combined with muted consumer demand, strongly pressured like-for-like growth. Sales increased by 6.9% or 5.3% in local currency to reach 451 million euros. Over the period, Hebe opened 13 stores in Poland, 10 net additions, and two in the Czech Republic. The banner is focused on reinforcing its software differentiation and competitiveness while protecting its price positioning in the current context. In Portugal, consumers remain promotion-oriented. PINGDOS kept its intense commercial strategy, guaranteeing its leading price positioning. This dynamic, together with a contribution from the all-about food stores, drove solid like-for-like growth. The banner opened five stores and steadily advanced in its remodeling program, having renovated 38 stores throughout the nine months. The renewed store concept enhances the differentiation and uniqueness of the assortment, particularly in perishables and ready-to-eat meals. Sales grew by 5.4% to €3.9 billion, and like-for-like excluding fuel was of 4.1%. Recheio enlarged its client base and benefited from the competitiveness of the offer designed for the ORECA channel, which combines price with quality of the assortment and a special emphasis on fresh and on the service provided to clients, particularly the amateurs partners. Against the difficult comparison with the same period in the prior years, our wholesale banner grew sales by 2.6% to reach 1 billion euros, with like-for-like at 2.4%. In Colombia, despite some improvement in consumer demands, ARA continued to face a difficult backdrop and maintained an intense commercial dynamic, offering the best saving opportunities for the Colombian families. With like-for-like growth at a solid 5.6% and a strong contribution from store network expansion, sales in local currency increased by 16.9%. In euros, sales reached 2.3 billion euros 9.6% up on the nine months of 2024. This performance reflects our Colombian company's strong focus on growth that fueled its top line through intense promotional dynamics on one hand and the delivery on its expansion and mission on the other. This expansion included the opening of 135 stores over the period of which 70 resulted from the integration of stores previously operated by call-subsidio. Consolidated VTA grew by 10.9% or 9.9% at constant exchange rates to reach 1.8 billion euros. This solid performance was driven by increased sales and effective cost and productivity management. All companies managed extremely well the challenging combination of price investment and cost inflation, particularly in wages. Never losing sight of our growth ambition, and working efficiently and productively, all banners delivered good margin performance despite the muted consumer context, particularly in Poland. Group EBTA margin was at 6.8%, up from the 6.6% registered in the nine months of 2024. At Biedronka, EBTA margin performance was driven by an assertive combination of sales growth, cost control, and efficiency gains. At Hebe, while Life4Life was impacted by the market context, the focus on tightening cost discipline and working to shield product mix allowed for EBTA margin protection. In Portugal, an effective promotional strategy drove sales growth, which together with reinforced productivity measures also preserved EBTA margin. In Colombia, ARES' good performance benefited both from sales growth and the work initiated in 2024 to protect gross margin and mitigate the impact of inflation on costs. Wrapping up. Amidst a backdrop of global geopolitical uncertainty, consumer behavior remains somehow restrained and predominantly price-focused, contributing to intense competitiveness in food retail. During this period, we also continue to face cost inflation, particularly in wages. Despite these challenging conditions, we achieved solid sales growth. On top of the positive contribution of like-for-like, a recognition of our unwavering commitment to offer leading prices, the strategic expansion of our store networks also played a decisive role. The combination of robust sales, cost discipline, and operational efficiency translated into strong EBTA delivery. With the Christmas and New Year season approaching, we will stay focused on offering the best saving opportunities and ensuring an agile responsiveness to the needs and wants of our customers so that they keep choosing our stores every time. Thank you for your attention. Operator, I am now ready to take questions.

Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. We'll now go to the first question. One moment, please. And your first question today comes from the line of William Woods from Bernstein. Please go ahead.