PORTUGAL. Jerónimo Martins Unchanged scenario in Poland: strong competition. Buy (Medium Risk) Target YE 14 ( ): 16.

Transcription

1 RETAIL PORTUGAL April Jerónimo Martins Unchanged scenario in Poland: strong competition Company update Buy (Medium Risk) Target YE 14 ( ): Price ( ): COMPANY UPDATE João Flores, Equity Analyst joao.flores@millenniumbcp.pt E 2015E Upside: 36% No. Shares (mn): Fin ancials Market Cap ( mn): 7,586.1 Turnover ( mn) 10,876 11,829 13,061 14,435 Avg Daily Vol 3m (k): 1,132.8 EBITDA ( mn) EPS 5Y CAG R: 8.9% Net Income ( mn) YTD change -15.2% EPS ( ) Bloomberg: JMT PL CEPS ( ) P rices as at 07-Apr-2014 Ratios Pre-tax RoIC (%) JM 130 RoE (%) PSI2 0 Net Debt/EBITDA (x) Net Debt/Equity (%) Valuation P / E (x) EV / Revenues (%) EV / EBITDA (x) Dividend Yield (%) Source: Millennium investm ent banking 70 Apr-13 Jun-13 Aug-13 Oct -13 D ec -13 Feb-14 Based on JM`s 2013 Annual Report and changes in Fx (minor positive impact from updated Euro/Zloty) we decided to fine-tune our JM`s valuation. Furthermore, we updated the Portuguese 10yr Government Bond to 5% (from 6%). Our price target was slightly revised downwards to YE14 from YE14 (Buy recommendation, Medium Risk), meaning a 36% upside vs current price. Overall, we believe the major execution risk is on LfL sales in Poland since stores openings (3000 stores by 2015YE) will not be a problem. According to JM, Polish Food retail market is not benefiting from encouraging Polish economic indicators since there`s a strong competition between Food retail players. Food inflation declined in Poland and the effect is more pronounced in Biedronka`s basket. Updated estimates in Poland had a 1.20 negative effect on JM`s price target: i) Biedronka`s LfL sales numbers were downwards revised to 4% in 2014 from 6%; to 5% in 2015 from 6%); ii) EBITDA margin downwards revised (to 7.6% in 2014 from 7.9%; to 7.7% in 2015 from 7.9%); iii) while Euro/Zloty update (to 4.23YE14 from 4.25YE14) had a minor positive effect. Updated estimates in Portugal had a 0.10 positive effect: valuation was slightly revised upwards, leveraging on 2013 numbers higher than estimated. Furthermore Portuguese 10yr Government Bond update to 6% (from 7%) also benefited valuation. Updated estimates in Colombia had a 0.70 positive effect: based on JM`s 2013FY numbers and guidelines we fine-tuned Colombia estimates (lower Capex benefited valuation). JM will disclose 1Q14 Earnings on April 29th, after the market close. We highlight company will face an unfavorable comparison basis, since Biedronka`s LfL sales numbers reached 8.8% YoY in 1Q13. We estimate consolidated sales will grow by 5.3% YoY (penalized by numbers from Poland) while consolidated EBITDA margin is expected to reach 5.4% (from 6.0% in 1Q13). Overall, numbers are expected to show unchanged tough environment in Polish Food Retail market (strong competition, low/negative basket inflation) since consumers are increasingly price oriented (focused on prices campaigns). All prices are those of the end of the trading session unless otherwise indicated. For important Disclosure and Disclaimer go to the last page.

2 Index Investment Case 3 KPI 5 Valuation and Estimates 9 SoTP and Assumptions 11 DCF Business areas 13 JMR Wholesale Madeira Biedronka Manufacturing Quarterly Evolution 14 Colombia 15 Quarterly Preview 17 Consolidated Estimates 19 Income Statements Financial Balance Sheets Cash Flow Statements Annex I - Multiples / Margins 20 Annex II - Share price charts 24 Annex III - Economic Indicators 26 Disclosures and Disclaimer 27 Page 2 of 28

3 Investment case Based on JM`s 2013 Annual Report and changes in Fx (minor positive impact from updated Euro/Zloty) we decided to fine-tune our JM`s valuation. Furthermore, we updated the Portuguese 10yr Government Bond to 5% (from 6%). Our price target was slightly revised downwards to YE14 from YE14 (Buy recommendation, Medium Risk), meaning a 36% upside vs current price. Breakdown of changes in price target: i) Updated estimates in Poland had a 1.20 negative effect on JM`s price target: i) Biedronka`s LfL sales numbers were downwards revised to 4% in 2014 from 6%; to 5% in 2015 from 6%); ii) EBITDA margin downwards revised (to 7.6% in 2014 from 7.9%; to 7.7% in 2015 from 7.9%); iii) while Euro/Zloty update (to 4.23YE14 from 4.25YE14) had a minor positive effect. Overall, we believe the major execution risk is on LfL sales in Poland since stores openings (3000 stores by 2015YE) will not be a problem (estimated stores openings kept unchanged). According to JM, Polish Food retail market is not benefiting from encouraging Polish economic indicators (page 26) since there`s a strong competition between Food retail players. Food inflation declined in Poland and the effect is more pronounced in Biedronka`s basket (partially reflecting increased competition), thus we decided to downwards our estimated LfL sales numbers. Following fine-tune in LfL sales, we prefer a more cautious approach on estimated EBITDA margins ii) Updated estimates in Portugal had a 0.10 positive effect on JM`s price target: valuation was slightly revised upwards, leveraging on 2013 numbers higher than estimated (favorable comparison basis). Furthermore Portuguese 10yr Government Bond update to 6% (from 7%) also benefited valuation. iii) Updated estimates in Colombia had a 0.70 positive effect on JM`s price target: based on JM`s 2013FY numbers and guidelines (sales YE13 c.. 20mn; stores number YE13 36 stores; start-up losses YE13 c. 25mn) we fine-tuned Colombia estimates (lower Capex benefited valuation). We highlight it`s currently a (very) low scale business, thus minor changes in estimated early numbers will led to big differences in valuations. Recall Ara business has low visibility, thus emphasize early numbers could lead to erratic changes in valuation. Breakdown of changes in price target Breakdown of changes in price target Previous target (YE14) Poland Portugal Colombia New Price Target YE14 Source: Millennium investment banking Page 3 of 28

4 Strategy i) Execute business plan in Poland Biedronka`s risks are arising from strong competition and not from economic polish growth since country fundamentals and the prospects for the food retail market are showing recovery signs (polish food retail sales are recovering while polish food retail inflation is expected to increase). According to the company, Biedronka became more aggressive on prices (discounts, promotions, ) from July 2013 since Polish consumers are increasingly focused on prices. ii) Fine-tune in Colombia / increase market share in Portugal. Tests will continue in Colombia with three different store sizes (Attraction 600 sqm; High street 400 sqm; Neighborhood 200 sqm). Furthermore, we believe JM will be active in M&A in Colombia at medium term in order to increase scale. Company will use a strategy similar to Poland, thus following fine-tuning stores format and assortment, probably JM will try to be active on M&A (the same strategy when bought Plus stores in Portugal and Poland) or accelerate stores openings (the same strategy it`s currently using in Poland). In Portugal JM will increase its retail network via a third party management model (JM will open 30 P. Doce stores in from which 20 are franchised). A third party contract with P. Doce will own the stores while sales will increase P.Doce scale business. iii) New markets on the agenda? According to the news, JM showed interest in buying local operators in Mexico and Romania. We believe the best option (in line with JM`s conservative profile) is to consolidate / increase scale of its operation in Colombia and then try another geography (probably in 5-10 years), thus we believe JM`s stock will negatively react to formal interest in another geography at short term. Expand to another country at moment (Colombia on an early stage) it`s not on JM`s DNA, thus we do not believe it will happen. 1Q14 Earnings JM will disclose 1Q14 Earnings on April 29 th, after the market close). We highlight company will face an unfavorable comparison basis, since Biedronka`s LfL sales numbers reached 8.8% YoY in 1Q13. We estimate consolidated sales will grow by 5.3% YoY (penalized by numbers from Poland) while consolidated EBITDA margin is expected to reach 5.4% (from 6.0% in 1Q13). Overall, numbers are expected to show unchanged tough environment in Polish Food Retail market (strong competition, low/negative basket inflation) since consumers are increasingly price oriented (focused on prices campaigns). We estimate (pages 17-18) Biedronka`s sales growth will slowdown to 7.3% YoY, penalized by: i) negative Fx effect from Euro/Zloty (-0.7%); ii) expected negative LfL sales number (-1% YoY), reflecting an unfavorable comparison basis; iii) estimated negative basket inflation in Biedronka (-0.5% to -1%), reflecting strong competition in Polish Food retail market. Recall Biedronka`s basket inflation reached 0.6% in 2013 (vs 3% in 2012); iv) adverse calendar effect c. 2.5%-3.0% (Easter was on 1Q13 in 2013). EBITDA margin is expected to reach 6.5% (from 7.2% in 1Q13). Recall Biedronka`s price promotions started on July 2013, thus company will have an unfavorable comparison basis in 1H14. In Portugal, Hypermarkets and big supermarkets are increasing market share while supermarkets and traditional retail kept losing market share, which suggest Pingo Doce showed positive numbers. P. Doce sales number will reflect adverse calendar effect while EBITDA margin is expected to keep steady. Page 4 of 28

5 KPI % E 2015E 2016E 2017E 2020E 2026E CAGR CAGR Consolidated Sales % 3.5% sales growth % 18.8% 13.2% 10.5% 8.8% 10.4% 10.5% 8.5% 4.1% 3.5% 3.5% Biedronka % 2.7% sales growth % 29.1% 20.4% 16.3% 14.4% 14.2% 13.0% 9.6% 3.5% 2.7% 3.0% Biedronka (at constant exchange rate) % 4.1% Ara % 25.5% sales growth % 167.0% 124.1% 82.7% 54.2% 27.1% 12.4% P. Doce % 2.3% sales growth % 9.9% 4.2% 6.9% 3.9% 3.5% 4.5% 4.4% 3.5% 2.3% 1.5% Recheio % 1.9% sales growth % 4.7% 4.9% 4.8% 1.7% 1.5% 1.5% 2.0% 2.0% 2.0% 1.5% Services % 1.9% sales growth % 3.4% -1.2% -2.2% -10.3% 0.0% 2.0% 2.0% 2.0% 2.0% 1.5% LfL sales Biedronka (Pln) 11.6% 13.4% 6.4% 4.2% 4.0% 5.0% 6.0% 2.0% 2.0% 2.0% Ara (Cop) 20% 20% 15% 15% 10% P. Doce 7.2% 0.8% -0.6% 2.8% 1% 1% 2% 2% 2% 2% Recheio 3.2% 2.4% -0.9% 0.4% 2% 2% 2% 2% 2% 2% Total Sales Area (sqm) 1,529,552 1,693,374 1,882,889 2,102,704 2,362,080 2,639,346 2,817,139 2,930,515 3,142,633 3,502, % 2.2% Total Sales Area growth rate % 11.0% 10.7% 11.2% 11.7% 12.3% 11.7% 6.7% 4.0% 2.1% 1.7% Biedronka 954,450 1,113,192 1,301,006 1,500,038 1,726,548 1,964,198 2,097,877 2,172,142 2,283,541 2,506, % 1.8% sales area growth % 17.2% 16.6% 16.9% 15.3% 15.1% 13.8% 6.8% 3.5% 1.7% 1.5% P. Doce 437, , , , , , , , , , % 0.2% sales area growth % 0.6% 0.7% 2.8% 1.0% 2.3% 2.2% 2.2% 0.6% 0.2% 0.0% Ara 16,200 38,700 67, , , , , % 13.7% sales area growth % 138.9% 75.6% 49.7% 35.4% 13.2% 6.5% Recheio 123, , , , , , , , , , % 0.0% sales area growth % 8.0% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Sales / Sqm ( /m2) % 1.2% /m2 Growth % 7.0% 2.2% -0.6% -2.6% -1.7% -1.1% 1.6% 0.1% 1.3% 1.7% Number of stores % 2.6% Stores Openings % -9.3% Biedronka % 1.6% Stores Openings % -12.0% P. Doce % 0.3% Stores Openings % nm Ara % 13.7% Stores Openings % -4.0% Recheio % 0.0% Stores Openings #DIV/0! nm Total Margin nm nm Total Margin % 23.5% 22.8% 22.3% 21.5% Total Margin Dif 0.0pp -0.7pp -0.5pp -0.8pp EBITDA % 4.0% EBITDA Growth % 23.6% 10.6% 6.0% 1.6% 9.5% 11.9% 9.1% 6.1% 3.3% 3.5% EBITDA Margin 7.5% 7.3% 7.0% 6.6% 6.5% 6.6% 6.6% 6.8% 6.8% 7.0% EBITDA Margin evol. 0.3pp -0.2pp -0.3pp -0.5pp -0.1pp 0.1pp 0.0pp 0.1pp 0.0pp 0.0pp Biedronka 8.1% 7.9% 8.2% 7.8% 7.6% 7.7% 7.8% 7.9% 7.8% 7.5% EBITDA Margin evol. 0.80pp -0.20pp 0.31pp -0.41pp -0.19pp 0.10pp 0.10pp 0.10pp -0.05pp 0.00pp P. Doce 6.8% 6.7% 5.6% 5.8% 5.8% 5.9% 5.9% 6.0% 6.5% 6.5% EBITDA Margin evol. -0.2pp -0.1pp -1.1pp 0.2pp 0.1pp 0.0pp 0.0pp 0.1pp 0.2pp 0.0pp Ara 0.0% -55.0% -30.0% -20.0% -10.0% 0.0% 7.0% EBITDA Margin evol pp 25.0pp 10.0pp 10.0pp 1.0pp 0.0pp Recheio 6.2% 6.4% 6.3% 5.8% 5.8% 5.9% 5.9% 6.0% 6.0% 6.0% EBITDA Margin evol. 0.2pp 0.2pp -0.1pp -0.5pp 0.0pp 0.1pp 0.0pp 0.1pp 0.0pp 0.0pp D&A % 4.2% D&A % Sales 2.2% 2.1% 2.1% 2.1% 2.0% 2.1% 2.0% 2.1% 2.0% 2.2% -1.2% 0.8% EBIT % 3.9% Net Financials % 2.3% EBT % 3.9% Taxes % 3.9% Effective tax rate (%) 20.9% 23.7% 24.8% 22.1% 21.9% 22.0% 22.0% 22.1% 22.1% 22.2% Minorities % 12.0% Net Income % 3.4% EPS % 3.4% Capex % -1.1% Capex / sales 5.0% 4.6% 4.3% 4.6% 5.3% 5.1% 4.2% 3.5% 3.2% 2.6% EBITDA - Capex % 9.4% EBITDA - Capex % sales 3% 3% 3% 2% 1% 2% 2% 3% 4% 4% Ordinary Dividend per Share % 3.4% Ordinary Pay Out 0.0% 50.9% 51.5% 50.2% 50.2% 50.2% 50.2% 50.2% 50.2% 50.2% Special Dividend per Share Special Pay Out 0.0% 44.2% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total Dividend ( /share) Closing price YE Total Pay Out 0.0% 95.1% 51.5% 50.2% 50.2% 50.2% 50.2% 50.2% 50.2% 50.2% Dvd Yield 0.0% 4.0% 2.0% 2.0% 2.0% 2.1% 2.2% 2.2% 2.1% 2.0% Page 5 of 28

6 KPI Previous % E 2014E 2015E 2016E 2017E 2020E 2026E CAGR CAGR Consolidated Sales % 3.4% sales growth % 18.8% 13.2% 10.5% 8.8% 12.2% 11.6% 8.7% 4.2% 4.0% 3.2% Biedronka % 2.7% sales growth % 29.1% 20.4% 16.3% 14.4% 16.9% 14.5% 9.9% 3.6% 3.2% 3.0% Biedronka (at constant exchange rate) Ara nm 24.6% sales growth % 166.2% 125.4% 82.8% 54.4% 25.6% 10.4% P. Doce % 2.3% sales growth % 9.9% 4.2% 6.9% 3.9% 3.7% 4.5% 4.4% 3.5% 2.3% 1.5% Recheio % 1.9% sales growth % 4.7% 4.9% 4.8% 1.6% -0.9% 1.0% 2.0% 2.0% 2.0% 1.5% Services % 1.9% sales growth % 3.4% -1.2% -2.2% -10.3% 1.0% 2.0% 2.0% 2.0% 2.0% 1.5% LfL sales Biedronka (Pln) 11.6% 13.4% 6.4% 4% 6% 6% 6% 2% 2% 2% Ara (Cop) 20% 20% 15% 15% 10% P. Doce 7.2% 0.8% -0.6% 3% 1% 1% 2% 2% 2% 2% Recheio 3.2% 2.4% -0.9% 0% 0% 2% 2% 2% 2% 2% Manufacturing -0.7% -3.2% 0.2% 1% 2% 2% 2% 2% 2% 2% Total Sales Area (sqm) 1,529,552 1,693,374 1,882,889 2,102,704 2,362,795 2,640,810 2,819,026 2,932,635 3,145,105 3,505, % 2.2% Total Sales Area growth rate % 11.0% 10.7% 11.2% 11.7% 12.4% 11.8% 6.7% 4.0% 2.1% 1.7% Biedronka 954,450 1,113,192 1,301,006 1,500,038 1,727,263 1,965,663 2,099,763 2,174,263 2,286,013 2,509, % 1.8% sales area growth % 17.2% 16.6% 16.9% 15.3% 15.1% 13.8% 6.8% 3.5% 1.7% 1.5% P. Doce 437, , , , , , , , , , % 0.2% sales area growth % 0.6% 0.7% 2.8% 1.0% 2.3% 2.2% 2.2% 0.6% 0.2% 0.0% Ara 16,200 38,700 67, , , , ,200 nm 13.7% sales area growth % 138.9% 75.6% 49.7% 35.4% 13.2% 6.5% Recheio 123, , , , , , , , , , % 0.0% sales area growth % 8.0% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Sales / Sqm ( /m2) % 1.2% /m2 Growth % 7.0% 2.2% -0.6% -2.6% -0.1% -0.2% 1.8% 0.1% 1.9% 1.5% Number of stores % 2.6% Stores Openings % -9.3% Biedronka % 1.6% Stores Openings % -12.0% P. Doce % 0.3% Stores Openings % nm Ara nm 13.7% Stores Openings nm -4.0% Recheio % 0.0% Stores Openings nm nm Total Margin nm nm Total Margin % 23.5% 22.8% 22.3% Total Margin Dif 0.0pp -0.7pp -0.5pp EBITDA % 3.9% EBITDA Growth % 23.6% 10.6% 6.0% 1.4% 13.2% 12.3% 8.6% 6.1% 4.2% 2.4% EBITDA Margin 7.5% 7.3% 7.0% 6.6% 6.6% 6.7% 6.7% 6.8% 6.8% 7.0% EBITDA Margin evol. 0.3pp -0.2pp -0.3pp -0.5pp 0.1pp 0.0pp 0.0pp 0.1pp 0.0pp -0.1pp Biedronka 8.1% 7.9% 8.2% 7.8% 7.9% 7.9% 7.9% 8.0% 7.9% 7.5% EBITDA Margin evol. 0.80pp -0.20pp 0.31pp -0.39pp 0.03pp 0.03pp 0.02pp 0.10pp -0.05pp -0.10pp P. Doce 6.8% 6.7% 5.6% 5.7% 5.8% 5.8% 5.8% 5.9% 6.3% 6.3% EBITDA Margin evol. -0.2pp -0.1pp -1.1pp 0.2pp 0.0pp 0.0pp 0.0pp 0.1pp 0.2pp 0.0pp Ara % -55.0% -30.0% -20.0% -10.0% 0.0% 7.0% EBITDA Margin evol. 70.0pp 25.0pp 10.0pp 10.0pp 1.0pp 0.0pp Recheio 6.2% 6.4% 6.3% 5.9% 5.9% 5.9% 5.9% 6.0% 6.0% 6.0% EBITDA Margin evol. 0.2pp 0.2pp -0.1pp -0.4pp 0.0pp 0.0pp 0.0pp 0.1pp 0.0pp 0.0pp D&A % 3.7% D&A % Sales 2.2% 2.1% 2.1% 2.1% 2.1% 2.2% 2.1% 2.0% 2.0% 2.1% 1.4% 0.2% EBIT % 4.0% Net Financials % 2.1% EBT % 4.1% Taxes % 4.1% Effective tax rate (%) 20.9% 23.7% 24.8% 21.3% 22.4% 22.5% 22.5% 22.6% 22.6% 22.7% Minorities % 9.5% Net Income % 3.7% EPS % 3.7% Capex % -2.5% Capex / sales 5.0% 4.6% 4.3% 5.3% 5.4% 5.2% 4.3% 3.6% 3.0% 2.4% EBITDA - Capex % 10.7% EBITDA - Capex % sales 3% 3% 3% 1% 1% 1% 2% 3% 4% 5% Ordinary Dividend per Share % 3.7% Ordinary Pay Out 0.0% 50.9% 51.5% 49.0% 49.0% 49.0% 49.0% 49.0% 49.0% 49.0% Special Dividend per Share Special Pay Out 0.0% 44.2% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total Dividend ( /share) Closing price YE Total Pay Out 0.0% 95.1% 51.5% 49.0% 49.0% 49.0% 49.0% 49.0% 49.0% 49.0% Dvd Yield 0.0% 4.0% 2.0% 2.2% 2.5% 2.8% 3.0% 3.3% 3.6% 4.4% Page 6 of 28

7 KPI Biedronka % E 2015E 2016E 2017E 2020E 2026E CAGR CAGR Consolidated Sales % 3.5% Consolidated sales growth % 13.2% 10.5% 8.8% 10.4% 10.5% 8.5% 4.1% 3.5% 3.5% Biedronka Sales % 2.7% Biedronka Weights total sales 58.8% 61.9% 65.1% 67.3% 68.9% 69.6% 69.1% 66.4% 64.6% Biedronka sales growth % 20.4% 16.3% 14.4% 14.2% 13.0% 9.6% 3.5% 2.7% 3.0% Biedronka (at constant exchange rate) % 4.1% Biedronka Sales (Pln) % 4.1% Biedronka sales growth % (Pln) 24.2% 17.9% 15.0% 14.0% 15.5% 12.3% 7.2% 3.7% 3.5% LfL sales (Pln) 13.4% 6.4% 4.2% 4.0% 5.0% 6.0% 2.0% 2.0% 2.0% Total Sales Area (sqm) 1,693,374 1,882,889 2,102,704 2,362,080 2,639,346 2,817,139 2,930,515 3,142,633 3,502, % 2.2% Total Sales Area growth rate % 10.7% 11.2% 11.7% 12.3% 11.7% 6.7% 4.0% 2.1% 1.7% Biedronka Sales Area 1,113,192 1,301,006 1,500,038 1,726,548 1,964,198 2,097,877 2,172,142 2,283,541 2,506, % 1.8% Biedronka sales area growth % 16.6% 16.9% 15.3% 15.1% 13.8% 6.8% 3.5% 1.7% 1.5% Biedronka Sales / Sqm ( /m2) % 0.9% /m2 Growth % 3.2% -0.5% -0.7% -0.8% -0.6% 2.6% -0.1% 1.0% 1.5% Biedronka stores % 1.6% Stores Openings % -12.0% Consolidated EBITDA % 4.0% Cosolidated EBITDA Margin 7.3% 7.0% 6.6% 6.5% 6.6% 6.6% 6.8% 6.8% 7.0% Biedronka EBITDA % 2.3% Biedronka Weights total EBITDA 63.5% 72.2% 77.2% 78.5% 80.3% 81.8% 80.8% 75.9% 69.5% Biedronka EBITDA Margin 7.9% 8.2% 7.8% 7.6% 7.7% 7.8% 7.9% 7.8% 7.5% EBITDA Margin evol pp 0.31pp -0.41pp -0.19pp 0.10pp 0.10pp 0.10pp -0.05pp 0.00pp Biedronka D&A % 5.4% D&A % Sales 1.6% 1.6% 1.7% 1.7% 1.7% 1.7% 1.7% 1.8% 2.2% -0.5% 2.6% Biedronka EBIT % 1.3% Biedronka Capex ( ) % -2.5% Biedronka Capex (Zloty) % -1.2% Capex / sales 5.4% 5.9% 5.2% 6.0% 5.4% 4.0% 3.0% 3.0% 2.4% EBITDA - Capex % 5.8% EBITDA - Capex % sales 3% 2% 3% 2% 2% 4% 5% 5% 5% KPI Ara % E 2015E 2016E 2017E 2020E 2026E CAGR CAGR Consolidated Sales % 3.5% Consolidated sales growth % 8.8% 10.4% 10.5% 8.5% 4.1% 3.5% 3.5% Ara Sales % 25.5% Ara Weights total sales 0.2% 0.4% 0.8% 1.4% 2.1% 4.7% 9.7% Ara sales growth % 167.0% 124.1% 82.7% 54.2% 27.1% 12.4% Ara (at constant exchange rate) #DIV/0! 31.6% Ara Sales (Cop) % 31.6% Ara sales growth % (Cop) 188.1% 133.1% 90.9% 62.3% 32.8% 17.4% LfL sales (Cop) 4.2% 4% 5% 6% 2% 2% 2% Total Sales Area (sqm) 16,200 38,700 67, , , , , % 13.7% Total Sales Area growth rate % 138.9% 75.6% 49.7% 35.4% 13.2% 6.5% Ara Sales Area 16,200 38,700 67, , , , , % 13.7% Ara sales area growth % 138.9% 75.6% 49.7% 35.4% 13.2% 6.5% Ara Sales / Sqm ( /m2) % 10.4% /m2 Growth % 11.7% 27.7% 22.0% 13.9% 12.4% 5.5% Ara stores % 13.7% Stores Openings % -4.0% Consolidated EBITDA % 4.0% Cosolidated EBITDA Margin 6.6% 6.5% 6.6% 6.6% 6.8% 6.8% 7.0% Ara EBITDA % #NUM! Ara Weights total EBITDA -3.2% -3.4% -3.8% -4.2% -3.1% 0.0% 9.7% Ara EBITDA Margin % -55.0% -30.0% -20.0% -10.0% 0.0% 7.0% EBITDA Margin evol pp 25.00pp 10.00pp 10.00pp 1.00pp 0.00pp Ara D&A % 18.5% D&A % Sales 10.1% 10.0% 10.0% 4.7% 4.3% 3.0% 2.6% -22.4% -5.6% Ara EBIT % #NUM! Ara Capex ( ) % -0.6% Ara Capex (Cop) % 4.2% Capex / sales 170.0% 117.6% 69.0% 45.0% 34.2% 10.3% 4.4% EBITDA - Capex % #NUM! EBITDA - Capex % sales -295% -173% -99% -65% -44% -10% 3% Page 7 of 28

8 KPI P. Doce % E 2015E 2016E 2017E 2020E 2026E CAGR CAGR Consolidated Sales % 3.5% Consolidated sales growth % 13.2% 10.5% 8.8% 10.4% 10.5% 8.5% 4.1% 3.5% 3.5% P. Doce Sales % 2.3% P. Doce Weights total sales 29.1% 28.2% 26.9% 25.2% 23.8% 22.9% 22.8% 23.0% 20.4% P. Doce sales growth % 4.2% 6.9% 3.9% 3.5% 4.5% 4.4% 3.5% 2.3% 1.5% LfL sales ( ) 0.8% -0.6% 2.8% 1.0% 1.0% 2.0% 2.0% 2.0% 1.9% Total Sales Area (sqm) 1,693,374 1,882,889 2,102,704 2,362,080 2,639,346 2,817,139 2,930,515 3,142,633 3,502, % 2.2% Total Sales Area growth rate % 10.7% 11.2% 11.7% 12.3% 11.7% 6.7% 4.0% 2.1% 1.7% P. Doce Sales Area 440, , , , , , , , , % 0.2% P. Doce sales area growth % 0.7% 2.8% 1.0% 2.3% 2.2% 2.2% 0.6% 0.2% 0.0% P. Doce Sales / Sqm ( /m2) % 2.0% /m2 Growth % 3.5% 4.0% 2.8% 1.2% 2.2% 2.2% 2.9% 2.1% 1.5% P. Doce stores % 0.3% Stores Openings % % Consolidated EBITDA % 4.0% Cosolidated EBITDA Margin 7.3% 7.0% 6.6% 6.5% 6.6% 6.6% 6.8% 6.8% 7.0% P. Doce EBITDA % 3.3% P. Doce Weights total EBITDA 26.7% 22.4% 23.5% 22.6% 21.2% 20.4% 20.2% 22.0% 19.0% P. Doce EBITDA Margin 6.7% 5.6% 5.8% 5.8% 5.9% 5.9% 6.0% 6.5% 6.5% EBITDA Margin evol pp -1.14pp 0.16pp 0.08pp 0.03pp 0.03pp 0.11pp 0.20pp 0.00pp P. Doce D&A % -1.2% D&A % Sales 3.3% 3.3% 3.1% 3.1% 3.1% 3.1% 3.3% 2.6% 2.2% -0.1% -3.4% P. Doce EBIT % 6.8% P. Doce Capex ( ) % 0.4% Capex / sales 3.7% 1.4% 2.4% 2.4% 2.4% 2.4% 2.0% 2.0% 2.0% EBITDA - Capex % 4.9% EBITDA - Capex % sales 3% 4% 3% 3% 3% 4% 4% 4% 5% KPI Recheio % E 2015E 2016E 2017E 2020E 2026E CAGR CAGR Consolidated Sales % 3.5% Consolidated sales growth % 13.2% 10.5% 8.8% 10.4% 10.5% 8.5% 4.1% 3.5% 3.5% Recheio Sales % 1.9% Recheio Weights total sales 7.7% 7.3% 6.8% 6.3% 5.7% 5.4% 5.3% 5.2% 4.6% Recheio sales growth % 4.9% 4.8% 1.7% 1.5% 1.5% 2.0% 2.0% 2.0% 1.5% LfL sales ( ) 2.4% -0.9% 0.4% 1.5% 2.0% 2.0% 2.0% 2.0% 2.0% Total Sales Area (sqm) 1,693,374 1,882,889 2,102,704 2,362,080 2,639,346 2,817,139 2,930,515 3,142,633 3,502, % 2.2% Total Sales Area growth rate % 10.7% 11.2% 11.7% 12.3% 11.7% 6.7% 4.0% 2.1% 1.7% Recheio Sales Area 125, , , , , , , , , % 0.0% Recheio sales area growth % 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Recheio Sales / Sqm ( /m2) % 1.9% /m2 Growth % 3.1% 1.8% 1.7% 1.5% 1.5% 2.0% 2.0% 2.0% 1.5% Recheio stores % 0.0% Stores Openings #DIV/0! #DIV/0! Consolidated EBITDA % 4.0% Cosolidated EBITDA Margin 7.3% 7.0% 6.6% 6.5% 6.6% 6.6% 6.8% 6.8% 7.0% Recheio EBITDA % 2.1% Recheio Weights total EBITDA 6.7% 6.5% 6.0% 5.6% 5.1% 4.8% 4.7% 4.6% 4.0% Recheio EBITDA Margin 6.4% 6.3% 5.8% 5.8% 5.9% 5.9% 6.0% 6.0% 6.0% EBITDA Margin evol. 0.20pp -0.06pp -0.49pp 0.00pp 0.09pp 0.00pp 0.05pp 0.00pp 0.00pp Recheio D&A % 2.0% D&A % Sales 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 0.3% 0.1% Recheio EBIT % 2.1% Recheio Capex ( ) % 1.9% Capex / sales 1.7% 0.5% 1.7% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% EBITDA - Capex % 2.1% EBITDA - Capex % sales 5% 6% 4% 4% 4% 4% 4% 5% 5% Page 8 of 28

9 Valuation and Estimates Sales mn E 2015E 2016E 2017E 2018E 2020E 2026E CAGR CAGR Consolidated Sales 9,838 10,876 11,829 13,061 14,435 15,656 16,296 16,541 17,462 21, % 3.5% Portugal 4,052 4,145 4,126 4,213 4,374 4,545 4,691 4,811 5,041 5, % 2.2% Poland 5,787 6,731 7,703 8,795 9,940 10,892 11,268 11,250 11,602 14, % 2.7% Colombia ,125 #DIV/0! 25.5% Domestic Retail (P. Doce) 3,318 3,346 3,485 3,601 3,753 3,911 4,043 4,150 4,354 4, % 2.2% Store Sales 2,866 3,063 3,181 3,293 3,440 3,591 3,718 3,818 4,008 4, % 2.3% Wholesale (Recheio) , % 1.9% Services % 1.9% Poland (Biedronka ) 5,787 6,731 7,703 8,795 9,940 10,892 11,268 11,250 11,602 14, % 2.7% Poland (Biedronka Zlt) 23,843 28,119 32,330 36,869 42,595 47,818 51,271 53,661 57,721 71, % 4.1% Colombia (Ara ) ,125 #DIV/0! 25.5% Colombia (Ara Cop) , , ,720 1,044,636 1,562,634 2,902,774 9,998,393 #DIV/0! 31.6% Consolidation Adjustments % 1.9% Sales - % growth % E 2015E 2016E 2017E 2018E Consolidated Sales 13.2% 10.5% 8.8% 10.4% 10.5% 8.5% 4.1% 1.5% 3.5% 3.5% Portugal 4.3% 2.3% -0.4% 2.1% 3.8% 3.9% 3.2% 2.6% 2.3% 1.5% Poland 20.4% 16.3% 14.4% 14.2% 13.0% 9.6% 3.5% -0.2% 2.7% 3.0% Colômbia 167.0% 124.1% 82.7% 54.2% 42.7% 27.1% 12.4% Domestic Retail (P. Doce) 10.8% 0.9% 4.2% 3.3% 4.2% 4.2% 3.4% 2.6% 2.3% 1.5% Dom. Retail Store Sales 4.2% 6.9% 3.9% 3.5% 4.5% 4.4% 3.5% 2.7% 2.3% 1.5% Wholesale (Recheio) 4.9% 4.8% 1.7% 1.5% 1.5% 2.0% 2.0% 2.0% 2.0% 1.5% Services -1.2% -2.2% -10.3% 0.0% 2.0% 2.0% 2.0% 2.0% 2.0% 1.5% Biedronka 20.4% 16.3% 14.4% 14.2% 13.0% 9.6% 3.5% -0.2% 2.7% 3.0% Biedronka Zlt 24.2% 17.9% 15.0% 14.0% 15.5% 12.3% 7.2% 4.7% 3.7% 3.5% Colombia % 124.1% 82.7% 54.2% 42.7% 27.1% 12.4% Colombia Cop % 90.9% 62.3% 49.6% 32.8% 17.4% Intragroup Adjustments 13.0% -8.9% -21.7% 17.4% 1.3% 1.8% 1.9% 1.9% 2.0% 1.5% 2020E 2026E Store Openings MIB Mbcpi. estimates 2014/16 JM Inv. Day 2014/16 Net Store Openings E 2015E 2016E 2017E 2020E Portugal / Pingo Doce Per year per year 10 per year Total nº stores Poland / Biedronka Per year over 3Y period min 800 over 3Y period JM Outlook 270 Total nº Stores in stores in 2016 JM Outlook Colombia / Ara Per year JM Outlook 36 min 50 Total nº Stores in 2016 min. 200 stores in 2016 JM Outlook 36 min 150 min 200 Store Openings -Before MIB Mbcpi. estimates 2014/16 JM Inv. Day 2014/16 Net Store Openings E 2014E 2015E 2016E 2017E 2020E Portugal / Pingo Doce Per year per year 10 per year Total nº stores Poland / Biedronka Per year over 3Y period min 800 over 3Y period JM Outlook 270 Total nº Stores in stores in 2016 JM Outlook Colombia / Ara Per year JM Outlook 36 min 50 Total nº Stores in 2016 min. 200 stores in 2016 JM Outlook 36 min 150 min 200 Page 9 of 28

10 EBITDA Margins Not restated numbers E 2015E 2016E 2020E 2026E JM Guidance EBITDA margin 7.2% 7.5% 7.3% 7.0% 6.6% 6.5% 6.6% 6.6% 6.8% 7.0% stable Polish Retail (Biedronka) 7.3% 8.1% 7.9% 8.2% 7.8% 7.6% 7.7% 7.8% 7.8% 7.5% Colombia Retail (Ara) nm nm nm nm nm -55.0% -30.0% -20.0% 0.0% 7.0% Dom. Ret. (Inc. Mad. from 2011) 7.0% 6.8% 6.6% 5.6% 5.8% 5.8% 5.9% 5.9% 6.5% 6.5% improving Dom Whol. (Inc. Mad. from 2011) 6.0% 6.2% 6.3% 6.3% 5.8% 5.8% 5.9% 5.9% 6.0% 6.0% stable Services 1.6% 1.6% 1.8% 1.6% 0.0% 1.4% 1.4% 1.4% 1.4% 1.4% EBITDA Margins - Before E 2014E 2015E 2016E 2020E 2026E JM Guidance EBITDA margin 7.2% 7.5% 7.3% 7.0% 6.6% 6.6% 6.7% 6.7% 6.8% 7.0% stable Polish Retail (Biedronka) 7.3% 8.1% 7.9% 8.2% 7.8% 7.9% 7.9% 7.9% 7.9% 7.5% Colombia Retail (Ara) nm nm nm nm nm -55.0% -30.0% -20.0% 0.0% 7.0% Dom. Ret. (Inc. Mad. from % 6.8% 6.6% 5.6% 5.8% 5.8% 5.9% 5.9% 6.5% 6.5% improving Dom Whol. (Inc. Mad. from % 6.2% 6.3% 6.3% 5.9% 5.9% 5.9% 5.9% 6.0% 6.0% stable Services 1.6% 1.6% 1.8% 1.6% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% Capex Highlights MIB Mbcpi. estimates 2014/16 JM Inv. Day 2014/16 Capex E 2015E 2016E 2017E 2020E Poland Bn over the 3Y period 1.5Bn over 3Y period Colombia Bn over the 3Y period Portugal Mn over the 3Y period Retail / Pingo Doce Mn over the 3Y period Wholesale / Recheio Mn over the 3Y period Industry Others Mn over the 3Y period Total Poland 69% 85% 74% 76% 73% 67% 60% 62% 2.1Bn over the 3Y period * 2.2Bn over 3Y period JM Outlook mn- 700mn Capex - Before MIB Mbcpi. estimates 2014/16 JM Inv. Day 2014/16 Capex E 2014E 2015E 2016E 2017E 2020E Poland Bn over the 3Y period 1.5Bn over 3Y period Colombia Bn over the 3Y period Portugal Mn over the 3Y period Retail / Pingo Doce Mn over the 3Y period Wholesale / Recheio Mn over the 3Y period Industry Total Poland 69% 85% 73% 72% 70% 65% 60% 63% 2.2Bn over the 3Y period * 2.2Bn over 3Y period JM Outlook , 70% in Poland, 50mn in Colombia Page 10 of 28

11 SoTP and Assumptions Sum of the Parts million Enterp. Previous Stake Attrib. JM % Equity % EV Implied Multiples Value Value for JM Revision Polish Retail 8, % 74% 9, % Biedronka 8, % 8, % 74% 13.1x EV/EBITDA x EV/EBIT 14 9, % Colombia Retail % 4% % Ara % % 4% 8.1x EV/SALES % Portuguese Retail 2, % 21% 2, % P. Doce 2, % 2, % 17% 10.5x EV/EBITDA x EV/EBIT 14 1, % Recheio (Wholesale) % % 4% 9.7x EV/EBITDA x EV/EBIT % Portuguese Manufacturing JVs* % 1% % Financial Investments & Other % 0% % BCP Shares (Apr.) % 0% Market value of 0.22 per share % Other Financial Investments % 0% 0.4x YE13 Book value of 0.9mn % Enterprise Value 11, % 100% 13.7x EV/EBITDA 14 20x EV/EBIT 14 11, % Net Debt % 5% % YE13 Consolidated Net Debt % Unfunded Pension Liabilities x YE05 Book value of 34.9mn % Dividends to be paid out in % 45.3% Payout ratio % Minority Interests % 49% of JMR x PER % Minority Interests JMR 7.14 YE09E Book Value % Equity Value 10, % 89% 24.4x PER 14 10, % Shares (mn) % Price Target ( ) YE % Source: Millennium investment banking *When consolidating its interest in Unilever Jerónimo Martins and Gallo Worldwide using the equity method, JM will recognize an investment in joint ventures (non-current assets) in the amount of 76.1mn. Minority interests 49% of JMR million Enterp. Previous Stake Attrib. JM % Equity % EV Implied Multiples Value Value for JMR Revision Portuguese Retail 1, % 100% 1, % Domestic Retail Inc-Madeira (100%) 1, % 1, % 101% 0.0% 0.0% 1, % Retail in Madeira % % -1% 0.3x EV/SALES % Wholesale in Madeira (50%) % 5.7 0% 0% 0.3x EV/SALES Enterprise Value 1, % 100% 9.9x EV/EBITDA x EV/EBIT 14 1, % Net Debt % 20% % Leasings + Others YE13 Net Debt % Minority Interests 7.1 0% 0% YE14E Book Value 7.1 0% Equity Value 1, % 80% 41.6x PER 14 1, % 49% of Equity Value % DCF assumptions - Poland New Assumptions Previous Explicit period Terminal Value Explicit period Terminal Value Risk-Free Rate 4.25% 4.25% 4.25% 4.25% Country Risk Premium 0.00% 0.00% 0.00% 0.00% Market Premium 5.00% 5.00% 5.00% 5.00% Unlevered Beta Levered Beta Cost of Equity 9.97% 9.97% 9.97% 9.97% Cost of Debt 6.25% 6.25% 6.25% 6.25% Corporate Tax Rate 19.00% 19.00% 19.00% 19.00% After-tax Cost of Debt 5.06% 5.06% 5.06% 5.06% Spread 2.00% 2.00% 2.00% 2.00% Leverage 25.00% 25.00% 25.00% 25.00% WACC 8.74% 8.74% 8.74% 8.74% Perpetuity Growth Rate 2.52% 2.52% Real Perpetuity Growth Rate 1.25% 1.25% LT Inflation 1.25% 1.25% WACC - G 6.22% 6.22% Euro/Zloty (Fwd YE14) Page 11 of 28

12 DCF assumptions - Colombia New Assumptions Previous Explicit period Terminal Value Explicit period Terminal Value Risk-Free Rate 6.50% 6.50% 6.50% 6.50% Country Risk Premium 0.00% 0.00% 0.00% 0.00% Market Premium 5.00% 5.00% 5.00% 5.00% Unlevered Beta Levered Beta Cost of Equity 13.06% 12.75% 13.06% 12.75% Cost of Debt 10.50% 8.50% 10.50% 8.50% Corporate Tax Rate 25.00% 25.00% 25.00% 25.00% After-tax Cost of Debt 7.88% 6.38% 7.88% 6.38% Spread 4.00% 2.00% 4.00% 2.00% Leverage 25.00% 25.00% 25.00% 25.00% WACC 11.77% 11.16% 11.77% 11.16% Perpetuity Growth Rate 4.30% 4.30% Real Perpetuity Growth Rate 2.00% 2.00% LT Inflation 2.25% 2.25% WACC - G 6.86% 6.86% Euro/Cop (Fwd YE14) DCF assumptions Portugal New Assumptions Previous Assumptions Explicit period Interim period Terminal Value Explicit period Interim period Terminal Value Risk-Free Rate 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Country Risk Premium 4.00% 3.00% 2.00% 5.50% 4.00% 2.00% Market Premium 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Unlevered Beta Levered Beta Cost of Equity 11.46% 10.41% 9.79% 13.04% 11.46% 9.79% Cost of Debt 6.00% 5.00% 4.00% 6.00% 5.00% 4.00% Corporate Tax Rate 29.00% 29.00% 29.00% 29.00% 29.00% 29.00% After-tax Cost of Debt 4.26% 3.55% 2.84% 4.26% 3.55% 2.84% Spread 4.00% 3.00% 2.00% 4.00% 3.00% 2.00% Leverage 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% WACC 9.66% 8.69% 8.05% 10.84% 9.48% 8.05% Perpetuity Growth Rate 1.75% 1.75% Real Perpetuity Growth Rate 0.25% 0.25% LT Inflation 1.50% 1.50% WACC - G 6.30% 6.30% We kept our WACC approach in order to better capture specific country risks and also to discriminate between temporary shocks and more structural changes. We kept unchanged the German 10-year Government yield bond at 2.0% while the Portuguese 10-year Government yield bond was updated to 5% from 6%. In Poland, we kept unchanged risk free rate at 4.25%: we are using a WACC of 8.74% in the explicit period and a WACC of 8.74% to terminal value. DCF Assumptions were updated in Portugal: we are applying a WACC of 9.66% in the first half of explicit period, 8.69% in the Interim period and a WACC of 8.05% to terminal value. In Colombia, we kept unchanged risk free rate at 6.5%: we are using a WACC of 11.77% to Colombian retail units in the explicit period and a WACC of 11.16% to terminal value. Page 12 of 28

13 DCF Business areas Biedronka PLN million E 2015E 2016E 2017E 2018E 2020E 2026E CAGR CAGR EBIT 1,866 1,981 2,183 2,549 2,917 3,179 3,273 3,434 3, % 2.6% Depreciation ,039 1, % 6.8% Cash Flow from Op. Act 2,307 2,519 2,802 3,280 3,730 4,050 4,212 4,473 5, % 3.7% Income Taxes % 2.6% Capital Expenditure -1,663-1,687-2,210-2,309-1,916-1,552-1,585-1,715-1, % -1.2% Working Capital Changes % -7.3% Free Cash Flow ,114 1,832 2,273 2,268 2,332 3, % 5.8% Discount Factor Discounted Cash Flow 675 1,025 1,550 1,768 1,622 1,411 1,174 PV of Cash Flows 17,325 Terminal Value 19,342 Enterprise Value (Zloty) 36,667 YE14E EUR/PLN 4.23 Enterrprise Value ( mn) 8,668 Ara Cop million E 2015E 2016E 2017E 2018E 2020E 2030E CAGR CAGR EBIT 0-94, , , ,524-93,931-87, ,858 #DIV/0! nm Depreciation 5,022 14,466 33,723 30,350 45,060 62,678 87, , % 18.6% Cash Flow from Op. Activities 5,022-79, , , ,464-31, ,136, % nm Income Taxes ,964 #DIV/0! nm Capital Expenditure -84, , , , , , , , % -1.0% Working Capital Changes 0 15,853 21,103 33,588 43,936 56,767 78, ,878 #DIV/0! 9.7% Free Cash Flow -79, , , , , , , , % nm Discount Factor Discounted Cash Flow -233, , , , , , ,599 PV of Cash Flows -878,799 Terminal Value 2,076,384 Enterprise Value COP 1,197,584 YE14E EUR/COP 2,766 Enterrprise Value ( mn) 433 P. Doce million E 2015E 2016E 2017E 2018E 2020E 2026E CAGR EBIT % 6.8% Depreciation & Amortisation % -1.2% Cash Flow from Op. Act % 3.3% Income Taxes % 6.8% Capital Expenditure % 0.4% Working Capital Changes % -7.9% Free Cash Flow % 3.2% Discount Factor Discounted Cash Flow PV of Cash Flows 1,083 Terminal Value 939 Enterprise Value 2,022 CAGR Wholesale million E 2015E 2016E 2017E 2018E 2020E 2026E CAGR EBIT % 2.1% Depreciation % 2.0% Cash Flow from Op. Act % 2.1% Income Taxes % 2.1% Capital Expenditure % 1.9% Working Capital Changes % -0.9% Free Cash Flow % 1.9% Discount Factor Discounted Cash Flow PV of Cash Flows 246 Terminal Value 214 Enterprise Value 460 CAGR Page 13 of 28

14 Quarterly evolution Sales Growth Quarterly % YoY Total Sales Growth FY11 1Q12 2Q12 3Q12 4Q12 FY12 1Q13 2Q13 3Q13 4Q13 FY13 Biedronka Euro 20.4% 13.1% 7.6% 16.9% 27.8% 16.3% 22.1% 13.9% 12.5% 10.6% 14.4% Pln 24.2% 21.0% 15.6% 16.8% 18.8% 18.0% 20.1% 12.4% 15.5% 12.6% 15.0% Retail Portugal 4.2% 2.1% 6.1% 2.5% -0.6% 2.4% 5.3% 2.3% 4.1% 3.9% 3.9% Supermarkets 4.7% Hypermarkets 0.3% Wholesale / Recheio 4.9% 4.0% -1.0% 0.0% -3.0% -0.2% -2.1% 1.8% 3.6% 2.7% 1.7% % Like-for-Like Sales Growth Biedronka Euro Pln 13.4% 9.5% 4.7% 5.5% 6.4% 6.4% 8.8% 2.0% 4.0% 2.5% 4.2% Retail Portugal 0.8% -1.6% 2.4% -0.6% -2.6% -0.6% 2.9% 1.2% 4.0% 3.0% 2.8% Supermarkets 0.9% Hypermarkets 0.3% Wholesale / Recheio 2.4% 2.6% -2.9% -0.1% -2.9% -0.9% -2.8% 1.0% 2.1% 1.0% 0.4% Store network Quarterly FY11 1Q12 1H12 9M12 FY12 1Q13 1H13 9M13 FY13 Number Stores Biedronka Pingo Doce Recheio (Wholesale) Net Stores Openings Biedronka Pingo Doce Recheio (Wholesale) Sales Area (sqm) 1,693,374 1,714,009 1,739,376 1,789,157 1,882,889 1,900,845 1,929,624 1,977,085 2,086,504 Biedronka 1,113,192 1,136,315 1,159,369 1,207,345 1,301,006 1,317,779 1,346,154 1,392,615 1,500,038 Pingo Doce 440, , , , , , , , ,171 Recheio (Wholesale) 125, , , , , , , , ,295 Sales Area Growth % YoY 11.9% 12.4% 11.8% 12.4% 11.2% 10.9% 10.9% 10.5% 10.8% Biedronka 18.6% 19.7% 18.6% 19.4% 16.9% 16.0% 16.1% 15.3% 15.3% Pingo Doce 0.7% 2.7% 3.0% 2.6% 2.8% 1.1% 0.6% 0.5% 1.0% Recheio (Wholesale) 1.7% 4.2% 2.5% 2.7% 2.9% 0.5% 0.5% 0.2% 0.0% Sales Area Growth % QoQ 6.4% 1.2% 1.5% 2.9% 5.2% 1.0% 1.5% 2.5% 5.5% Biedronka 10.1% 2.1% 2.0% 4.1% 7.8% 1.3% 2.2% 3.5% 7.7% Pingo Doce -0.2% 2.0% 0.5% 0.3% -0.1% 0.3% 0.1% 0.2% 0.4% Recheio (Wholesale) 0.0% 2.4% 0.0% 0.2% 0.2% 0.0% 0.0% 0.0% 0.0% Page 14 of 28

15 Colombia Our estimates are based on JM`s Investor Day and 2013 FY numbers. We highlight updated Capex estimates strongly benefited unit valuation. Recall Ara business has low visibility, thus emphasize early numbers could lead to erratic changes in valuation. We believe JM will be active in M&A in Colombia at medium term in order to increase scale. Company will use a strategy similar to Poland, thus following fine-tuning stores format and assortment, probably JM will try to be active on M&A (the same strategy when bought Plus stores in Portugal and Poland) or accelerate stores openings (the same strategy it`s currently using in Poland). The Ara stores are proximity food stores, with a strong presence in residential neighborhoods. They combine a cheerful and colorful store environment with an architecture and product layout that offer a very pleasant shopping experience. The average sales area is between 300 and 600 sqm and each store has around 15 employees. Strategy highlights: i) Plans to reach a minimum of 150 stores by 2015 ii) Tests to continue with three different store sizes (Attraction 600 sqm; High street 400 sqm; Neighborhood 200 sqm) iii) A minimum of 50 new stores to be opened in 2014 iv) Second region in the country should be opened in 2015 Colombia - KPI mn E 2015E 2016E 2017E 2020E 2026E 2030E Sales Store network (JM`s guidelines) ,016 Sales area (sqm) Sales per sqm Costs EBITDA EBITDA Margin (peers margin, Biedronka breakeven, newsflow)* 0.0% -55.0% -30.0% -20.0% -10.0% 0.0% 7.0% 7.0% 5 years to reach EBITDA break-even in Colombia years to reach EBITDA break-even in Poland (2003) Depreciations EBIT Capex (JM`s guidelines) Capex (% sales) 170% 118% 69% 45% 34% 10% 4% 0% EBITDA-Capex * 5 years to reach EBITDA break-even in Colombia (2018) 7 years to reach EBITDA break-even in Poland (2003) According to the news, JM expects to reach positive net income in Colombia by , while we estimate EBITDA break-even in 2018 Colombia - Mib estimates 1Q13E 2Q13E 3Q13E 4Q13E 2013 Biedronka 2013 sales ( mn) 7703 Biedronka 2013 sales per week ( mn) 148 # Biedronka Stores (YE13) 2393 Biedronka sales 2013 per week, per store ( mn) Discount New stores in Colombia ACC stores in Colombia Estimated sales in Colombia ( mn) ACC estimated sales in Colombia ( mn) Sales in Colombia per store ( mn) Sales in Colombia per store (Cop: /Cop 2.675) Source: Company Data, Millennium investment banking Page 15 of 28

16 Colombia - store network Store network E 2015E 2016E 2017E JM / Ara Exito / Casino Hypermarkets: Exito Supermarkets: Pomona, Carulla Bodega: Surtimax discount outlets Other stores ( Ley, Homeart, Cafam) Carrefour na Hypermarkets na Convenience stores na Olimpica na Source: Company Data, Millennium investment banking Colombia - Sales area Sales area (`000 sqm) E 2015E 2016E 2017E JM / Ara Exito / Casino Hypermarkets: Exito Supermarkets: Pomona, Carulla Bodega: Surtimax discount outlets Other stores ( Ley, Homeart, Cafam) Carrefour na Hypermarkets na Supermarkets na Convenience stores na Olimpica na na Source: Company Data, Millennium investment banking Colombia - Average area per store Average area per store (`000 sqm) E 2015E 2016E 2017E JM / Ara Exito / Casino Hypermarkets: Exito Supermarkets: Pomona, Carulla Bodega: Surtimax discount outlets Other stores ( Ley, Homeart, Cafam) Carrefour na Hypermarkets na Convenience stores na Olimpica na na Source: Company Data, Millennium investment banking Colombia - Sales per sqm ( Mn) Sales per sqm ( ) E 2015E 2016E 2017E JM / Ara Exito / Casino* Supermarkets: Pomona, Carulla na Bodega: Surtimax discount outlets na Carrefour na Olimpica na na Source: Company Data, Millennium investment banking Page 16 of 28