Jerónimo Martins 1st half sales grow by 14% and surpass Euro 2 billion

Transcription

1 Excellent sales performance in the first semester of 2006 Jerónimo Martins 1st half sales grow by 14% and surpass Euro 2 billion Net earnings grow 5%, to euro 37.2 million. Financial charges register an improvement, dropping by 22%. Pingo Doce sales grow by 10% confirming the success of its strategy. Excellent performance in Poland, with Biedronka s total sales up by 28%. In the 1st half of 2006 Pingo Doce once again registered an excellent sales performance in all business areas in general. Jerónimo Martins consolidated sales totalled euro 2,027.9 million, corresponding to a year-on-year increase of 13.9%. This vigorous evolution of sales translates the strategic decision taken by various business areas to reinforce their competitive position. In the first semester of 2006, net earnings raised to euro 37.2 million (up by 4.8% on the 1st half of 2005). Earnings per share were euro 0.3. The financial balance indicators also registered a good improvement: the net debt declined, leading to a 22.3% reduction in financial charges. Portugal: Pingo Doce showing strong dynamic in the market Pingo Doce s business model, increasingly fine-tuned, continues to produce excellent results against an extremely competitive market. Like-for-like sales were up by 11.1% in the 2nd quarter (+9.0% in the entire semester). During the first six months of the year, 16 stores were remodelled, with an average period of closure of one month each. Over the same period, Pingo Doce opened 4 new stores, expanding its overall sales area by 4,822 m 2. Feira Nova increased total sales by 6.6% when compared to the 1st half of In this semester, the company opened 3 new stores, corresponding to an increase of 6,878 m 2 in its sales area. During this period the mini-hyper stores performed quite well (rising sales by 2.4% and 0.8%, respectively in the 2nd quarter and in the whole semester). The large hypermarkets, which compete within a much more aggressive environment, saw like-forlike sales drop by 0.8% in the 2nd quarter, which is still in line or even slightly better than the average for the format.

2 The EBITDA margin from retail in Portugal reached 7.0% of sales in the 1st half of 2006, reflecting the Group s decision to shore up the market position of its chains. Several other factors also influenced the margin s performance, namely the rise in energy costs in Portugal and the intense store remodelling plan implemented in the chains. Recheio, pursuing a strategy aimed at gaining market share in the two segments where it operates traditional retail and HoReCa registered an increase in total first half sales of 1.6% (1.5% in like-for-like sales). In Madeira, the competitive environment remains very tough. Still, a strategy of low and stable prices permitted a recovery in sales, which grew by 3.0%, like-for-like, in the 2nd quarter. Through the implementation of a strategy of competitive prices and investment in innovation, the companies in the Manufacturing area have been reinforcing their market positions, closing the 1st half of the year with a 3.7% increase in sales. Volume growth was in general quite good in most product categories and brands, with very interesting value growth rates already visible in some areas, namely ice tea, spreads and impulse ice cream. The performance of the EBITDA margin (16.1% of this business area s sales) is in line with the strategic option implemented. In Marketing, Representation and Catering Services, sales were up by 7.3% in the 1st half of the year, fully benefiting from the portfolio diversification strategy that has been drawn up. Poland: total sales rise 28.4% in Biedronka The Group s business in Poland continues to post excellent growth rates. Biedronka s sales registered a remarkable like-for-like increase of 15.9% in the 2nd quarter (+11.2% in the semester). The outstanding performance of the comparable store base, allied to the opening of 90 new stores since the 1st half of 2005 drove up total sales in euro by 28.4%, year-on-year. This strength of growth is also reflected in the operating cash flow (EBITDA), which, at euro 39.4 million, shows a 37.3% increase over the same period last year. The contribution of this business area to consolidated EBITDA rose from 22.1% in the 1st half of 2005 to 30.3% in the 1st half of 2006.

3 Positive Outlook for the 2nd half of 2006 The excellent performance of sales reinforces management confidence on the strategies adopted. In Portugal, the commercial licensing law is permitting to increase installed capacity in the food retail sector. Jerónimo Martins, in turn, is prepared to carry out its investment plan, while believing that the Pingo Doce and Feira Nova s mini-hyper formats will maintain the success already achieved in the Portuguese market. Pingo Doce and Feira Nova plan to open another 3 to 5 stores each before the end of the year, with Pingo Doce refurbishing 5 to 8 of its stores. In Poland, the expansion plan will be pursued, making the most of the opportunity to consolidate Biedronka s leading position. The store opening pace will be accelerated in the 2nd half of the year, and we expect that by the end of 2006 there will be 100 more stores than at the end of A new distribution centre will come on stream during the 2nd semester, allowing the company to operate in 6 different geographical regions, each supported by its own distribution centre. Jerónimo Martins total investment in full 2006 should reach close to euro 300 million, of which roughly 40% will be invested in the Polish operations. Definitions: LFL sales: sales by stores that operated under the same conditions in two periods. Excludes stores opened, closed or which suffered major remodelling works in one of the periods. Cash Flow per Share: (Net Profit + Depreciation + Provisions Deferred Taxes Non recurrent items) / Number of shares. Gearing: Net debt / Shareholders funds

4 Annexes: Statistical Information DISTRIBUTION IN PORTUGAL Sales % Nr. Stores Sales area (sqm) LFL Growth 1H06/1H05 1H06 1H05 1H06 1H05 2Q06 1H06 Pingo Doce 10,1% ,1% 9,0% Feira Nova 6,6% ,5% -0,7% Hypers -1,6% ,8% -1,6% Mini Hypers 18,8% ,4% 0,8% Recheio 1,6% ,8% 1,5% Madeira 1,9% ,8% -1,9% DISTRIBUTION IN POLAND Sales Nr. Stores Sales area (sqm) LFL Growth EBITDA Margin 1H06 / 1H05 2Q06 1H06 (Eur) (Pln) 1H06 1H05 1H06 1H05 (Pln) (Pln) 1H06 1H05 Biedronka 28,4% 22,5% ,9% 11,2% 5,0% 4,6% Consolidated Revenues CONSOLIDATED REVENUES 1H06 1H05 % Eur Tho. % total Eur Tho. % total Pln Euro Sales & Services Retail Mainland ,4% ,2% n.a. 9,3% p.m. Store Sales ,0% ,8% n.a. 8,6% Cash & Carry Mainland ,9% ,6% n.a. 1,6% Madeira ,5% ,7% n.a. 1,9% Poland - Biedronka ,1% ,7% 22,5% 28,4% Manufacturing ,1% ,8% n.a. 3,7% Mkt, Repr. and Rest. Services ,7% ,8% n.a. 7,3% Total JM ,0% ,0% n.a. 13,9%

5 Press Release Consolidated Income Statement by Functions CONSOLIDATED RESULTS 1H06 1H05 2Q06 2Q05 Eur Tho. % Eur Tho. % % Eur Tho. % Eur Tho. % % Net Sales & Services ,9% ,6% Gross Margin ,8% ,6% 9,9% ,6% ,8% 11,7% Operating Costs ,3% ,3% 14,0% ,1% ,4% 15,8% Provisions ,1% ,1% 23,5% ,1% ,1% 9,2% EBITDA ,4% ,3% 0,1% ,4% ,4% 2,1% Depreciation ,6% ,8% 5,7% ,5% ,7% 6,9% EBIT ,9% ,5% -3,2% ,0% ,7% -0,6% Net Financial Results ,0% ,5% -22,3% ,0% ,5% -17,5% Non Recurrent Items ,0% 198 0,0% n.a ,1% ,0% 142,9% EBT ,8% ,1% 3,8% ,9% ,2% 5,5% Taxes ,4% ,4% 22,5% ,5% ,5% 26,4% Net Profit ,4% ,7% 0,9% ,3% ,7% 1,8% Minority Interests ,5% ,7% -10,8% ,5% ,7% -13,0% Net Profit attr. to JM ,8% ,0% 4,8% ,9% ,1% 6,5% EPS (euro) 0,30 0,28 4,8% 0,16 0,15 6,5% Cash Flow per share (euro) 0,81 0,78 4,2% 0,42 0,41 3,3%