Sonae, SGPS, S.A.

Good morning, everyone, and welcome to SONE's second quarter 2026 results conference call. Today's call will be conducted in two parts. First, SONE's chief financial officer, Mr. João Dolores, will present the group's results. This will be followed by a Q&A session. During the Q&A, you may ask questions in one of two ways, by submitting a written question using the box below the webcast player, or by joining the conference call and pressing the pound hash key followed by five on your telephone keypad to enter the queue. I will now hand the call over to Mr. João Delores. Sir, please go ahead.

Thank you. Good morning, everyone. Thanks for joining us for SONAI's Q2 results presentation for 2026. Besides myself and the investor relations team, we have with us Cristina Novaes from Brightpixel, Fernando Wanzler from MC, Paulo Simões from Vorten, and Miguel Moreira from Sierra. Let's then begin with the highlights of the quarter, starting with MC. In the second quarter of 2026, MC once again reinforced its leadership position across both grocery and health and beauty in Portugal and Iberia, respectively. In grocery, turnover increased by 5.7% year-on-year to 1.8 billion euros, supported by like-for-like growth of 5.1%. which was broad-based across all physical formats, with the online channel continuing to outperform. This performance was driven by volumes and translated into further market share gains in decelerating but still highly competitive markets. During the quarter, we opened two new Continente Von Dia stores. At the same time, profitability continued to improve. In the first half of the year, underlying EBITDA increased by €29 million to €349 million, with the margin improving 20 basis points to 9.9%, supported by sales momentum and solid efficiency gains. In health and beauty, turnover increased by 13.1% year-on-year to €469 million, underpinned by sustained like-for-like growth across Wales and Bruni, and by the continued expansion of their respective store networks, both in Portugal and in Spain. In the first half of the year, turnover increased 12.3% to 906 million, with both banners gaining market share. As a result, the underlying EBITDA margin improved from 12.5% to 13.1% in the quarter and from 12% to 12.6% in the first half of the year, more than offsetting an intense competitive environment, particularly in the beauty category. Overall, MC continued to deliver strong top-line growth while simultaneously improving profitability. Turnover increased by 7.2% year on year, reaching 2.3 billion euros in the quarter and by 7.9% to 4.4 billion euros in the first six months of the year. The company's underlying VPA margin increased from 10.8% to 10.9% in the quarter and from 10.2% to 10.5% in the first half of the year, which equated to a total underlying VPA of 463 million euros. This strong operational performance continues to translate into solid cash flow generation and further deleveraging. As a consequence, net debt to VPA reduced further from 2.8 times to 2.5 times, reinforcing MC's strong financial profile. Moving on to Vorten. Vorten delivered another solid quarter, combining sales growth with a healthier level of operating profitability. Turnover increased by 5% year on year to €329 million, supported by a like-for-like growth of 4.5%. Since the beginning of the year, turnover increased 7% to €681 million. This performance was broad-based with solid demands in core electronics and domestic appliances, driven by higher volumes alongside double-digit growth in services. Both the offline and online channels contributed to growth, with online already representing around 20% of total turnover, while the Vorten app continues to gain relevance and strengthen consumer engagement. iServices maintained its solid momentum, increasing its weight on total turnover and opening 10 new stores in the quarter, eight of which outside Portugal. Profitability improved significantly during the quarter. The underlying EBITDA margin increased from 2.5% to 3.9%, and from 3.2% to 4.5% in the semester, with underlying EBITDA up 10 million euros to 31 million euros. This reflects a stronger sales performance, commercial margin expansion, and the growing contribution of higher margin services. Regarding Musti, The company continued to scale its operations while simultaneously investing in transformational initiatives to support further growth. Sales increased by 13.8% year-on-year to €139 million, supported by like-for-like growth of 2.1%, temporarily impacted by the rollout of a new e-commerce platform and by the integration of ZOO in Portugal. In the first six months of 2026, turnover grew 14.7% to €277 million. Core markets performed well. Norway delivered particularly strong growth. Finland remained broadly stable, and Sweden maintained the positive momentum of recent months, while the integration of Pet City and the Baltics is reaching its final stages. Gross margin improvements supported adjusted VTA growth to 14 million euros in the quarter. The adjusted VTA margin at 10.1% continues to reflect strategic investments in digital capabilities, logistics, and scalability. After the end of the quarter, Musti announced the acquisition of three Gascon stores from ICA in Sweden and entered into discussions for a potential long-term partnership to explore additional Arkansas stores alongside ICA supermarkets. Pet care remains a structurally attractive category with strong long-term fundamentals, and Musti continues to represent a key growth platform within Sonai's portfolio. Moving now to Sierra. Sierra sustained a solid operational performance during the quarter, supporting further value creation across its integrated real estate platform. Across the European shopping center portfolio, tenant sales increased by 4.6% on a like for like basis in the first half of the year. Occupancy remained close to 99% with no issues in terms of rent collections. The services business continued to expand, supported by momentum in property management, including the integration of the German platform, and by further growth in investment management, where Sierra and HANA Grupa started deploying their Southern European food retail strategy through several acquisitions across Portugal and Spain. Development activity progressed steadily with construction advancing and commercialization getting traction, while the residential pipeline expanded with Portugal's largest affordable built-to-rent project currently under development in partnership with the Porto municipality and Solive. Direct result increased by 19% year-on-year, while net result decreased by 3 million euros, reflecting the absence of the positive non-recurring indirect result recognized in Brazil last year in the second quarter. Overall assets and the management increased by over 450 million euros year-on-year to 7.1 billion. NAV grew to 1.2 billion euros, an increase of 89 million euros year-on-year after the payment of 25 million euros in dividends to S.A. NOS delivered another solid operational and financial performance during the quarter, with further profitability growth in a quite competitive consumer market. Consolidated revenues totaled 458 million euros, broadly stable year on year, with growth in the enterprise and IT businesses offsetting the ongoing pressure in the consumer segment and the small decline in the cinema and audiovisuals business. EBITDA increased by 1.5% year-on-year to €206 million, with the margin expanding by 70 basis points to 44.9%, while free cash flow, excluding non-recurring items, rose 9% to €63 million, reflecting higher profitability and the maturity of the current network investment cycle. NOS contributed €28 million to SONAI's equity method results in the second quarter and €48 million in the first half of the year. In May, the dividends paid by NOS generated an inflow of €87 million for SONACOM. At the same time, BrightPixel maintained a quite disciplined investment approach, balancing selective capital allocation with the evaluation of diversified investment opportunities. During the quarter, four companies were added to the active portfolio with net capital deployment of 17 million euros. The active portfolio reached an NAV of 335 million euros at the end of the first half of the year, implying a potential cash on cash multiple of around 1.4 times. Now moving on to the consolidated view. Overall, our total turnover grew 5.6% year on year to 2.9 billion euros and 6.3% to 5.6 billion euros in the first half of the year, driven by solid performances across all our retail businesses. MC Grocery accounted for around 100 million euros of increase, followed by Health and Beauty with around 50 million, and by Vorten and Musti, which more than offset the deconsolidation of the Maw and Zippy fashion banners last year. Underlying EBITDA grew 26 million euros or 10.2% year-on-year to 281 million euros, driven primarily by MC, which added 19 million euros to this indicator and supported by positive contributions from the remaining retail businesses. The underlying EBITDA margin improved from 9.5% in Q2 last year to 9.9% in Q2 this year, and from 9% in the first semester of 2025 to 9.6% this year. Consolidated EBITDA increased by 15.1% year-on-year to €316 million, supported by the solid evolution of underlying EBITDA and by improved equity method results. All in all, the result, which is attributable to SONAI shareholders, grew 27% to 75 million euros in the quarter and 20% in total to 123 million euros in the first half of 2026. The strong operational performance generated 289 million euros of operational free cash flow in the last 12 months, which enabled further progress in our deleveraging path, with consolidated net financial debt decreasing by over 180 million euros year-on-year to 1.8 billion. As a result, loan-to-value reduced from 13.8% to 10.6% this year, a reduction of 3.2 percentage points. Our net asset value grew 18% year-on-year to 5.6 billion euros, this after 121 million euros of dividends paid to SONAI shareholders this quarter. This evolution was driven by the strong operational performance of our retail businesses, in particular MC, the appreciation in the NOSH market value, as well as positive contributions from Sierra. On a per share basis, NAB reached 2.89 euros. And the SONAI share price has appreciated 67% year on year to 2.015 euros. And the discount between NAB per share and the share price narrowed from 51% at the end of the first semester of last year to 30% at the end of June of 2026. Still, the potential upside remains substantial at 43%, and we therefore remain fully committed to further reducing this gap. This is all for now. Thank you. You can now open the session to Q&A.

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