Jeronimo Martins Pe

Welcome to the Geronimo Martins First Half 2026 Results Conference Call. Today's conference call is being recorded. At this time, I would like to turn the conference over to Ms. Ana Luisa Virginia, Chief Financial Officer of Geronimo Martins Group. Please go ahead, Madam.

Thank you, Nadia. Good morning, ladies and gentlemen, and thank you for joining this call to present our first half results. As a reminder, in our corporate website, you can find the results release, a slide presentation, and a fact sheet for the period. The first half of 2026 proved more demanding than we initially anticipated, particularly with regard to strong pressure on food prices and fuel-related costs. Heightened geopolitical uncertainty kept consumers cautious and focused on low prices and promotions in what food is concerned, and competition did not ease in the sector. Against this backdrop, all our banners delivered solid sales and a BTA by protecting price competitiveness, strengthening their value propositions and executing efficiently. Volume-led growth combined with careful margin mix and reinforced focus on efficiency drove group sales up by 5.1% or 4.5% at constant exchange rates to 18.3 billion euros and EBTA to increase 7.6%, reaching 1.2 billion euros with margin at 6.8%, 16 basis points ahead of the same period last year. Every business expanded EBTA margin, contributing to this solid delivery. Excluding IFRS 16, the group closed June with a net cash position of 11 million euros after having paid 409 million euros to its shareholders. Starting with the income statement, the group delivered strong operational performance. Despite substantial basket deflation at Piedronca and also at Hebe, and low basket inflation in Ara, Pingo Doce and Rixay, sales grew 5.1%, driven by strong volumes in Everbana. A BTA grew 7.6% ahead of sales, and margin rose 16 basis points to 6.8%, reflecting better mix Thank you very much. also incorporates write-offs resulting from remodel initiatives and provisions net of compensations received for legal proceedings. Cash flow before dividends was negative at €332 million. Basket deflation at Bison impacted sales growth and trade payables and weighted on cash generation. Despite increased pressure, the balance sheet remained solid. The healthier position reflects capital investment of 412 million euros and the payment of 409 million euros in dividends. Investments remain aligned with our strategic priorities. The H1 CAPEX focused on expansion of our store network, store remodeling and logistics improvement. Throughout the period, the group opened 124 stores and remodeled 115. On logistics, ARA opened a new distribution center in Medellín early in the year, and Biedronka inaugurated its 18th distribution center in southeastern Poland in late June. This latter facility is expected to reduce annual travel by almost 1 million kilometers, further improving an already very efficient operation. Focusing now on group sales. Volume growth across all banners drove H1 sales Reflecting competitive pricing, output assortments, and discipline execution. Group like-for-like in the period was at 1.4%. Turning to sales performance by banner, I will start with Biazonka. The Polish food retail market remained extremely challenging, with subdued demands, price-sensitive and promotions-driven consumers, intense competition between the players, and a fast slowdown of food inflation, which turned negative in June. In this context, Bia Dronca consolidated its price leadership while continuing to optimize assortment and to further enhance its value for money proposition to Polish consumers. Sales grew 1.7% to 12.6 billion euros or 1.9% in local currency, with like-to-like up 0.2% despite significant basket deflation. H1 volumes rose by around 5% offsetting the impact of like-for-like from deflation and preserving our main banner's market share. Deflation accelerated markedly in Q2, resulting in sales slightly below Q2 25 and in a like-for-like of minus 1.6%, while like-for-like volumes grew by more than 4%. Turning now to headbands. Despite intense competition leading to greater basket deflation, had a fine-tuned its assortment and strengthened its value proposition across online and offline channels. Sales rose 5% to 312 million euros, or 5.3% in local currency, with like-for-like up 2.4%. Portuguese consumers continue to look for savings, with price and promotions driving most purchasing decisions. being those who remain highly competitive while strengthening its value proposition throughout a ready meals offer that combines convenience, quality and differentiation. Total sales grew 5.3% to 2.7 billion euros and like for like, excluding fuel, reached 3.7% supported by strong volume growth in a context of low basket inflation. In the second quarter, sales increased 3.3% With Like for Like excluding fuel at 1.9%, again reflecting solid underlying performance and the competitiveness of the offer. After a first quarter affected by severe storms in Portugal's central region, the Eureka sector entered the summer season less dynamic than in the same period of 2025. Despite a more challenging backdrop, XEI continued to demonstrate resilience and competitiveness in both ARECA and traditional retail segments. Sales increased 2.5%, 673 million euros, with like-for-like at 1.3%. In the second quarter, in a softer trading environment, sales grew 1.8% and like-for-like reached 0.3%. Finally, ARA. In Colombia, despite stronger demand and improved consumer confidence, market environments remain challenging, with strong promotional intensity across the food retail sector. ARA continues to strengthen its brand awareness and consumer traction through disciplined execution of its expansion program and a value proposition tailored to local needs. This approach boosts another period of strong sales growth. Sales increased 30.2% in euros and 21.1% in local currency, reaching 2 billion euros. Like-for-like was 6.8%, driven primarily by volume growth, as I'd operated with very low basket inflation. In the second quarter, sales increased 21% in local currency, while like-for-like accelerated to 7.5%. In euros, sales increased 36.9%. Looking now at profitability at Martins. Across the group, our businesses remain focused on protecting price competitiveness while continuously improving efficiency and effective cost management. Therefore, despite significant basket deflation at Piazonca and Hebe and low inflation across the remaining businesses, the DPA reached 1.2 billion euros, an increase of 7.6% ahead of sales growth. As referred, This performance was supported by rigorous management of every profitability driver, namely volume growth, sales mix, and efficiency. Zooming in at margins by banner, every business improved its EVTA margin in the first half. At Edonca, the margin increase translates the continuous efforts to optimize assortment and improve store layouts, leading to enhanced sales mix. Also contributing to this performance was a discipline focused on cost control and efficiency gains. At Hebe, margin improved, supported by the work carried out on sales mix optimization, differentiation, and strict cost management. In Portugal, ongoing work on margin mix, operational discipline, and efficiency measures leveraged margin progression at both PING DOS and RCHEI. At ARA, EBITDA margin benefited from strong life-to-life performance, growing scale, and Assertive Cost Management. Overall, the group margin increased from 6.6 to 6.8 in the first six months of 2026. Let me conclude with a few final remarks. The context in the first half of 2026 proved harder than we expected. Nonetheless, this set of results proved the resilience of our businesses and the quality of execution across banners, especially in light of the significant deflationary pressures faced particularly by our Polish operations and the continued impact of higher labor, rental and fuel-related costs. This performance was only possible because our teams continued to execute with determination, focused on serving consumers, protecting price competitiveness and improving the offer. These actions Thank you very much. We remain vigilant about the operating environment. Based on the information currently available, we do not anticipate any material improvement in market conditions during the second half. Geopolitical uncertainty, limited visibility, and pressure on consumer confidence should persist, and therefore consumers are very likely to keep focused on low prices and promotions fueling market competition. Our priorities, therefore, remain unchanged. Thank you so much.

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