Sonae, SGPS, S.A.

We welcome you to Sona A first quarter 2025 results conference call during the presentation hosted by Mr. John Dolores, Sona A CFO. All the participants will be in listen-only mode. Q&A is available after the presentation. If you wish to ask a question during the Q&A session, you may do so by pressing the star key followed by 1 on your telephone keypad. If you are experiencing any difficulty in listening to the conference at any time, please try calling from a different device. I now hand over the call to Mr. Joe Dolores. Please go ahead, sir.

Thank you. Good afternoon, everyone. Thanks for joining our results presentation for the first quarter of 2025. Besides myself and the investor relations team, We have in the call with us Cristina Novaes from BrightPixel, Fernando Wanzler from ENSI, Paulo Simões from Vorten, and Miguel Moreira from Sierra. As usual, I will start by giving you an overview of the results of each of our main businesses, and I will start with ENSI. In grocery, Continente further reinforced its leadership position in a very competitive setting in Portugal. Like for Like reached 5%, with strong volumes growth across all grocery formats, and despite the negative calendar effects related with the leap year in 24, and also the timing of Easter. Grocery margin improved by about 50 basis points year-on-year, fueled by the strong sales performance and also significant ongoing operational efficiencies. In the quarter, MC opened two new proximity stores, and made important investments in refurbishments, with around 20 refurbishments underway, mainly in larger store formats. So a very solid display from MC in terms of growth and market share gains, sustaining a very good level of profitability. In the health and wellness and beauty space, results were fueled by the contribution of Druni, but also by organic growth in a context of intense market competition. In Portugal, Wells, posted a relevant improvement in its like-for-like growth. And in Spain, Druni Group posted a solid increase in revenue, leading to a further reinforcement of its market leadership in Iberia. EBITDA margin in health and wellness and beauty increased to 11.6%, mainly as a result of the consolidation of Druni. Overall, and if we look at consolidated figures for MC, The company achieved an increase in revenues of 22.5% to 2 billion euros, or 8% year-on-year when considering the pro forma contribution of Druni for the last 12 months. MC was able to improve on the Lange Vitae margin by about 90 basis points year-on-year to 9.5%. This was achieved not only through the integration of Druni, which is margin accretive to MC, but also due to solid sales growth together with efficiency measures that more than offset pressures from inflation, rising staff costs, and higher energy prices. Regarding leverage, MC maintains a quite comfortable position with total net debt to EVTA stable at 2.7 times at the end of March 25, considering June's full-year pro forma EVTA contribution. As for Vorton, the company was able to sustain solid revenue growth and further reinforced its market share in Portugal, both online and offline. In Q1, total turnover grew by 4.2% to €323 million, with e-commerce sales growing 19% year-on-year and already accounting for 19% of total turnover. Regarding profitability, and allowing a mid-year margin reached 3.8% in the quarter, This decrease in margin was influenced by a higher cost base associated with strategic growth initiatives, as well as a temporary increase in shrinkage driven by a spike in PEPs, which is now being addressed. I would like to highlight iServices that continue to successfully expand its presence both domestically and internationally. In Q1, Vorten opened 10 new iServices stores, most of them outside Portugal, and this concept already accounted for roughly 75 million euros of revenues in the last 12 months. and continues to grow at a fast pace. As for Musti, the company released its quarterly results yesterday morning. In this period, Musti reinforced its leadership in the Nordic pet care sector and progressed with the integration of PetCity after its acquisition in November, consolidating its growth platform in the Baltics. The company posted a resilient performance amidst the demanding consumer environment. Total net sales increased by 11.8%. to 120 million euros in the quarter, fueled by pet cities consolidation and by growth in the Nordics, which has been improving month after month. Total like-for-like increased 1.2%, or 2.4% if you exclude the leap year effect, with some signs of the market rebounding to its long-term growth trend. Adjusted EBITDA decreased to 12.7 million euros, with a margin of 10.6%. This was due to targeted investments in price, and also the integration of Pet City. Going forward, we expect the BPA margin to increase as consumer confidence improves and the integration of Pet City progresses. Moving to Sierra, we had an overall quite positive first quarter of the year in our real estate business. In Q1, the company maintained a strong momentum across its European shopping center portfolio while continuing to execute its strategy and its services and development businesses. Sierra's European shopping center portfolio posted solid results, with tenant sales continuing its growth trajectory like for like. The shopping centers maintained very strong occupancy rates of over 98% and very strong collection rates in total. In Q1, net results for the company increased to 29 million euros, driven by the strong performance of this European shopping center portfolio and also of the services business, which showed quite strong resilience and growth levels. NAV reached €1.1 billion at the end of March, increasing almost €14 million since the end of 2024. Moving on to telco and technology, NOS already reported its results to the market as well. These results were marked by a strong performance of the core telco business, and also an important milestone in the quarter was the completion of the acquisition of Quaranet Portugal, thus reinforcing the presence of the company in the B2B space in the full ICT stack of services. Consolidated revenue grew by 4.5% to €421 million in Q1, supported by continued growth in the telco segments across both B2C and B2B channels, as well as a strong performance in the media segment. Consolidated BTA increased by 4.3% to €192 million, and recurrent net income increased more than 20% year-on-year. NOS paid already in April an ordinary dividend of 35 cents per share and an extraordinary dividend of 5 cents per share related to 2024 results, which accounted for a 77 million euro cash-in for Sonaicom. Finally, BrightPixel, with more than 45 companies in the portfolio, invested in two new companies and recently announced other follow-on investments in existing portfolio companies. NAB reached €325 million and cash invested amounted to €197 million, implying a potential cash-on-cash return of 1.7 times. Moving on to the consolidated view, overall, our consolidated turnover grew 22.7% to 2.6 billion euros, driven by the strong organic growth across our core businesses and also the integration of newly acquired companies, including Musti and Druni in particular. Excluding the impact of acquisitions, consolidated turnover would have grown at 6% year-on-year, a solid growth profile as well in the last 12 months. Underlying EBITDA amounted to 218 million euros, improving by 38% year-on-year. This positive performance of our fully consolidated businesses combined with 34 million euros in equity method results led total EBITDA to reach 250 million euros in Q1, up by 39% year-on-year. Net result group share increased to 43 million euros. Euros, 77% increase versus Q1 of 24 as a result of the improved operational performance across our companies, which offset the impact of higher depreciations and amortizations and also financial costs associated with our portfolio expansion. Moving on to leverage, net debt before dividends increased 279 million euros in the last 12 months. This was due to the significant acquisitions that were executed recently. If we look at the performance of the original portfolio, SONAI registered a total of 172 million euros in free cash flow as we continue to generate healthy levels of cash flow across all our main businesses. and we continue to have a quite solid financial position with significant available liquidity facilities and a well-balanced net maturity profile. The holding loan-to-value stood at 15.9% at the end of March, down from 16.3% at the end of last year as we begin our deleveraging path. A final note to NAV, our net asset value grew 200 million euros quarter-on-quarter and reached 4.6 billion euros at the end of March, which equates to 2.39 euros per share. This positive evolution was mostly fueled by the positive performance of the North stock price and also improved valuations of MC and Sierra. This is it for me for now. Thank you again for your trust in Sonai, and you can now open the session to Q&A. Thank you.

Thank you. If you'd like to ask a question or make a contribution on today's call, please press star 1 on your telephone keypad. To withdraw your question, please press star 2. You will be advised when to ask your question. We will pause for a moment to allow everyone an opportunity to signal for questions. We will take our first question from Jose Rito. Kaisa, Ben, your line is open. Please go ahead.