CONSOLIDATED
FINANCIAL
STATEMENTS
FIRST QUARTER 2020
INDEX
I - Consolidated Management Report
Message from the Chairman and CEO - Pedro Soares dos Santos | 3 | |
1. | Sales Analysis | 3 |
2. | Results Analysis | 5 |
3. | Balance Sheet | 6 |
4. | Information about the impact of Covid-19 | 7 |
5. Outlook for 2020 | 10 |
II - Consolidated Management Report Appendix
1. | The impact of IFRS 16 on Financial Statements | 11 |
2. | Sales Evolution | 13 |
3. Stores Network | 13 | |
4. | Definitions | 13 |
5. | Income Statement - Reconciliation Note | 14 |
6. | Balance Sheet - Reconciliation Note | 15 |
7. | Cash Flow - Reconciliation Note | 16 |
8. | Information Regarding Individual Financial Statements | 16 |
III - Consolidated Financial Statements
1. Financial Statements | 17 |
2. Notes to the Financial Statements | 21 |
R&A| 1stQuarter 2020
I - CONSOLIDATED MANAGEMENT REPORT
Message from the Chairman and CEO
Pedro Soares dos Santos
'We ended the first quarter of the year with remarkable sales growth that reflects the competitive strength of the different businesses, as well as the flexibility and resilience of our operations, even when tested by an unprecedented threat - the COVID-19 pandemic.
The initial impact of the global health crisis on our companies was felt in the first half of March. The intensity of this impact depended on the evolution of the pandemic in the countries where we operate (Portugal, Poland and Colombia) and our teams responded swiftly, with extraordinary diligence and sense of commitment.
In all geographies, our teams showed flexibility and readiness to adopt, in a rapidly-changing environment, the measures necessary to guarantee that our stores could distribute a steady flow of essential goods and respond to social emergencies.
At the moment, it is hard to predict the scale and depth of the ultimate effects of the pandemic.
In this context of high uncertainty, we will keep supporting our working community and I am sure that our teams will continue, as until now, to show their sense of mission and service towards consumers, the communities where we operate, and our supply chain partners.
This crisis finds our Group in a strong financial position, after a year of very good results. However, given the ongoing global recession, prudence advises us to reinforce our conservative capital structure management and keep the flexibility to capture potential opportunities. Therefore, the Board of Directors decided to revise the dividend amount initially proposed, reducing exceptionally the payout to 30% of consolidated profits.'
1. Sales Analysis
(Million Euro) | Q1 20 | Q1 19 | % | |||
% total | % total | excl. FX | Euro | |||
Biedronka | 3,262 | 69.2% | 2,897 | 68.2% | 13.2% | 12.6% |
Pingo Doce | 936 | 19.9% | 905 | 21.3% | 3.5% | |
Recheio | 214 | 4.5% | 214 | 5.0% | 0.2% | |
Ara | 235 | 5.0% | 169 | 4.0% | 52.3% | 38.9% |
Hebe | 64 | 1.4% | 56 | 1.3% | 15.2% | 14.6% |
Others & Cons. Adjustments | 3 | 0.1% | 6 | 0.1% | -40.5% | |
Total JM | 4,715 | 100% | 4,247 | 100% | 12.0% | 11.0% |
The Group sales were €4,715 mn, 11.0% above first quarter of 2019 (+12.0% at constant exchange rates), with like for like (LFL) of 9.5%.
All of the Group's banners started 2020 with differentiating value proposals and enjoying strong sales momentum. The good performance registered in these three months reflects strong growth in January and February, to which was added another day of sales for the leap year, and a deceleration in March with the containment measures impacting the last weeks of the month.
R&A | FirstNine Months 2019 | 3 |
Consolidated Management Report |
Sales (Million Euro) | LFL Growth |
+11.0% | (Q1 20/Q1 19) | ||||||||||||||
Q1 19 | Q1 20 | ||||||||||||||
4,715 | |||||||||||||||
4,247 | |||||||||||||||
+12.6% | 34.3% | ||||||||||||||
3,262 | |||||||||||||||
2,897 | |||||||||||||||
+3.5% | 11.1% | 9.5% | |||||||||||||
905 | 936 | +0.3% | 2.8% | ||||||||||||
+38.9% | +14.6% | 0.1% | |||||||||||||
214 | 214 | 169 | 235 | 56 | 64 | 6 | 3 | -1.7% | |||||||
Hebe | Recheio | ||||||||||||||
Biedronka | Pingo Doce | Recheio | Ara | Hebe | Others & | JM | |||||||||
Biedronka | Pingo | Ara | JM | ||||||||||||
Cons.Adjust. Consolidated | Doce * |
* Excl. Fuel LFL: 3.5%
In Poland, consumption at the beginning of the year remained at healthy levels and food inflation in the country was 7.7% in the quarter. During the period, with the Sunday ban regulation, there were three fewer trading days than in first quarter of 2019.
In this context, Biedronkaregistered sales growth of 12.6% to €3.3 bn (+13.2% in local currency) with good market share progression.
LFL growth was 11.1%, including a relatively stable basket inflation across the quarter that was at an average of 4.9% in the period.
Hebegrew sales by 14.6% to reach €64 mn (+15.2% in local currency), impacted by the performance in March in the context of the pandemic. The e-commerce operation grew c.50% in Q1 20 vs. the last quarter on 2019, boosted by a strong acceleration also in March.
In Portugal, the year started with positive consumer demand evolving to the first signs of trading down as March progressed. Food inflation was 0.9% in the period.
Pingo Doceincreased sales by 3.5% to €936 mn, including LFL (excl. fuel) of 3.5%.
Recheioregistered sales of €214 mn, a 0.2% growth in first quarter of 2019 with LFL of 0.1%. The closure of the restaurants and the lack of tourism activity had a material impact on sales to the HoReCa channel in the last weeks of March.
In Colombia, the year began with a favourable economic environment and the containment measures in the context of the pandemic only gained strength throughout April.
Araincreased sales in local currency by 52.3%, including a LFL of 34.3%. In euros, sales grew 38.9% to reach €235 mn, driven by the reinforced price strategy that the Company implemented in 2019 and which continues to be fundamental to its performance.
R&A | FirstNine Months 2019 | 4 |
Consolidated Management Report |
2. Results Analysis
(Million Euro) | Q1 20 | Q1 19 | |||
Net Sales and Services | 4,715 | 4,247 | 11.0% | ||
Gross Profit | 1,041 | 22.1% | 927 | 21.8% | 12.3% |
Operating Costs | -731 | -15.5% | -617 | -14.5% | 18.6% |
EBITDA | 309 | 6.6% | 310 | 7.3% | -0.4% |
EBITDA (adjusted *) | 325 | 6.9% | 310 | 7.3% | 4.6% |
Depreciation | -183 | -3.9% | -174 | -4.1% | 4.8% |
EBIT | 127 | 2.7% | 136 | 3.2% | -7.0% |
Net Financial Costs | -63 | -1.3% | -40 | -0.9% | 55.4% |
Gains in Joint Ventures and Associates | 0 | 0.0% | 0 | 0.0% | n.a. |
Other Profits/Losses | -5 | -0.1% | -1 | 0.0% | n.a. |
EBT | 59 | 1.3% | 95 | 2.2% | -37.5% |
Income Tax | -22 | -0.5% | -28 | -0.7% | -21.3% |
Net Profit | 37 | 0.8% | 67 | 1.6% | -44.2% |
Non-Controlling Interests | -2 | -0.1% | -5 | -0.1% | -49.2% |
Net Profit Attributable to JM | 35 | 0.7% | 62 | 1.5% | -43.8% |
EPS (€) | 0.06 | 0.10 | -43.8% | ||
EPS without Other Profits/Losses (€) | 0.06 | 0.10 | -39.7% |
* EBITDA adjusted from the costs related to COVID-19
Operating Profit (EBITDA)
The Group's EBITDA reached €309 mn, 0.4% below first quarter of 2019. At constant exchange rates, EBITDA was in line with the previous year. The respective margin was 6.6% (7.3% in first quarter of 2019).
The costs incurred in the last two weeks of March to allow the banners to operate safely are estimated in c.€15.5 mn euros.
Excluding this effect, EBITDA would have grown 4.6% with a margin of 6.9% in the quarter.
It is also worth mentioning, in terms of the Group's EBITDA, that in the context of its vision on corporate responsibility, Jerónimo Martins launched, in Poland, in this first quarter of the year, a Foundation with the purpose of developing support programmes for the elder population groups in a vulnerable situation. The contribution, which is expected to be annual, was c.€11 million.
This performance reflects the strength of the various banners and also the agility and determination with which they overcame the challenges imposed to guarantee the continuity of operations in very uncertain scenarios.
EBITDA & EBITDA Margin (IFRS16)
EBITDA | EBITDA Mg | |||||||||||
(Million Euro) | (%) | |||||||||||
9.0% | ||||||||||||
500 | 8.5% | 9.0% | ||||||||||
7.3% | 8.0% | |||||||||||
400 | ||||||||||||
6.6% | 7.0% | |||||||||||
6.1% | ||||||||||||
6.0% | ||||||||||||
5.4% | ||||||||||||
300 | ||||||||||||
5.0% | ||||||||||||
200 | 4.0% | |||||||||||
3.0% | ||||||||||||
100 | 2.0% | |||||||||||
1.0% | ||||||||||||
0 | 0.0% | |||||||||||
Biedronka | Distribution Portugal | JM Consolidated | ||||||||||
Q1 19 | Q1 20 | EBITDA Mg Q1 19 | EBITDA Mg Q1 20 | |||||||||
R&A | FirstNine Months 2019
Consolidated Management Report
Biedronka recorded an EBITDA of €277 mn, an increase of 6.5% (+7.1% at constant exchange rate) in a quarter when the wage upward review was carried out, as planned.
The reduction in the EBITDA margin reflects mainly the impact of the COVID-19 pandemic on the operation costs.
The banner remained focused in offering, on proximity, a quality assortment at low prices and in maintaining a good promotional dynamic, having been the Group's most resilient business in the current context.
Distribution in Portugal recorded an EBITDA of €62 mn, 8.4% below first quarter of 2019. The respective margin was 5.4% versus 6.1% in first quarter of 2019. This margin performance
5
reflects the increase in costs required to manage the impact of the pandemic, and also some additional pressure from increases in wages, implemented in early 2020.
Hebe's EBITDA amounted to €1 mn in a quarter in which the mix is not particularly favourable on the average for the year. The effects of a negative sales performance in March in the context of the public health crisis also added pressure on the Company's operating performance.
In a quarter of strong performance, Ara delivered an EBITDA of €-3.5 mn, a reduction of losses of 70.2% in relation to first quarter of 2019 (In local currency this reduction was 67.4%). The increase in sales density registered in these first three months of the year was paramount for this good performance.
Financial Results
Net financial costs were €63 mn versus €40 mn in first quarter of 2019, impacted by the recognition of exchange translation losses in the amount of €24 mn in first quarter of 2020, mostly related to value adjustments in the capitalization1of operating leases in Poland denominated in euros. Within financial costs, net interest on debt issued (excluding operating leases) was €5 mn, in line with the previous year.
Net Results
The net result of the first quarter reached 35 million euros, representing a decrease of 43.8% compared to the first quarter of 2019. This result was strongly impacted by the costs incurred with measures related to COVID-19, by the exchange translation losses, but also for other losses and gains in the amount of -5 million euros, related to restructuring costs and write-offs related to store closures.
3. Balance Sheet
(Million Euro) | Q1 20 | 2019 | Q1 19 |
Net Goodwill | 621 | 641 | 638 |
Net Fixed Assets | 3,900 | 4,140 | 3,855 |
Net Rights of Use (RoU) | 2,126 | 2,318 | 2,370 |
Total Working Capital | -2,493 | -2,793 | -2,400 |
Others | 104 | 94 | 71 |
Invested Capital | 4,257 | 4,400 | 4,534 |
Total Borrowings | 686 | 732 | 723 |
Financial Leases | 14 | 17 | 15 |
Capitalised Operating Leases | 2,201 | 2,368 | 2,370 |
Accrued Interest | -21 | 3 | 5 |
Cash and Cash Equivalents | -817 | -949 | -647 |
Net Debt 1 | 2,064 | 2,172 | 2,466 |
Non-Controlling Interests | 241 | 254 | 228 |
Share Capital | 629 | 629 | 629 |
Reserves and Retained Earnings | 1,323 | 1,346 | 1,211 |
Shareholders Funds | 2,193 | 2,229 | 2,068 |
1Net Debt amount was restated in 2019. Cash and Cash Equivalents considered in Total Working Capital was restated to Cash and Cash Equivalents heading.
The net cash position, excluding capitalized operating leases, was €137 mn.
1In the context of the IFRS16 adoption, the capitalized rents, related to lease contracts denominated in euros in Poland, are recognized as liabilities, translated at the exchange rate prevailing at the yearend reporting date (31 December 2019). According to this standard, the changes resulting from the difference in the exchange rate of each period have to be booked as financial costs/profits (Exchange differences in liabilities with leases), representing an accounting adjustment without impact on cash flow.
R&A | FirstNine Months 2019 | 6 |
Consolidated Management Report |
Cash Flow
(Million Euro) | Q1 20 | Q1 19 |
EBITDA | 309 | 310 |
Capitalised Operating Leases Payment | -69 | -65 |
Interest Payment | -37 | -38 |
Income Tax | -32 | -28 |
Funds From Operations | 171 | 180 |
Capex Payment | -186 | -146 |
Change in Working Capital | -91 | -39 |
Others | -3 | 0 |
Cash Flow | -109 | -6 |
Cash flow in the period was €-109 mn. The increase in capex payments is related to investments made in fourth quarter of 2019, which resulted in an increase in accounts payable related to capital expenditure at the year end.
Investment
(Million Euro) | Q1 20 | Weight | Q1 19 | Weight | |
Biedronka | 34 | 37% | 43 | 46% | |
Distribution Portugal | 25 | 28% | 24 | 26% | |
Ara | 7 | 7% | 20 | 21% | |
Others | 25 | 28% | 7 | 8% | |
Total CAPEX | 90 | 100% | 95 | 100% | |
The Group's capex (excluding rights of use acquired in accordance with IFRS16) was €90 mn, of which about 25% is related whit the acquisition of the current headquarters building where the main offices in Portugal are located. The remainder was allocated to the three countries in which we operate, with Poland investing c.49% of this amount
4. Information about the impact of Covid-19
We reacted without delay to the COVID-19 pandemic, guided by the recommendations of the World Health Organization and the Health Authorities of the three countries where we operate.
The existing contingency plans for each business area were immediately activated and adjusted to the scenarios that our internal risk teams ranked as being most likely in the current context. Detailed action plans have been put in place to anticipate or mitigate impacts on our operation.
Aware of the increased responsibility for ensuring product availability in our food retail stores, we made the protection of the supply chain of essential products our key priority.
The Group's Executive Management Team, chaired by the Chairman of the Board of Directors and Group CEO and including the Corporate Centre Directors and the Companies' CEOs, acted as a Group Crisis Committee. This group, which met formally on a weekly basis, continually monitored the economic, business and social environment. This surveillance allowed the Group to make key decisions that were appropriate to the dynamics of the pandemic and its consequences in the different geographies.
Among the main prevention and protection measures that have been decided, the following stand out:
R&A | FirstNine Months 2019 | 7 |
Consolidated Management Report |
Working and Shopping safely
- Preventive isolation of team members who, due to their age or particular health condition, are more vulnerable to the effects of an infection;
- Proactive testing forCOVID-19 and/or implementation of other preventive health examinations;
- Introduction of protective equipment: masks and visors, gloves, disinfectant gel and acrylic windows;
- Reinforcement of cleaning and disinfection procedures for stores, distribution centres and offices;
- Implementation of signage in all stores to reinforce the imperative of social distancing;
- Reduction of store teams and opening hours and implementation of replacement shifts in Portugal and Poland during the last two weeks of March. A favourable evolution of the pandemic and diligent work by our teams allowed schedules to be extended in April;
- Closure, by Pingo Doce, of its 36 restaurants and one of the two central kitchens and reduction of thetake-away operation in store.
Ensuring access to food without forgetting the importance of the price factor in a
more fragile socioeconomic context
- Maintenance of promotional campaigns, recognizing the importance of the price factor for the consumer and confirming it as central to our value proposals;
- Partial rationalization of the assortment to limit execution risk. The agility of our operations allowed a gradual reversal of this assortment reduction;
- Increased inventories of essential goods to avoid stock outs.
Cooperation with smaller suppliers to protect the continuity of their operations
- Close collaboration with our suppliers to anticipate any risks arising in their operations and, together, work on their mitigation;
- Extension of orders to small regional producers to guarantee the flow of production without reducing the purchase price to the producer, in order to protect the continuity of their businesses;
- Providing credit facilities, with the risk coverage of the Jerónimo Martins Group, to small and medium suppliers, so they may anticipate their receivables and avoid liquidity constraints.
Being present in the community
- Financial support for multiple initiatives: supply of masks and hospital equipment, development of innovative tests, food donations to hospitals, among others;
- Reinforcement of food donations to different institutions.
Initial impact on performance
The initial effects of the pandemic on our operations in Poland and Portugal were felt in the first two weeks of March, with sharp growth in the sales of certain categories. This stockpiling reflected consumer fear that essential products would become unavailable during the pandemic.
In the last two weeks of March, the first measures to restrict the circulation of people were implemented in Poland and Portugal. In addition, our banners reduced store opening hours and introduced enhanced safety measures. In this context, and also as a consequence of customers stocking up on food items in the previous days, sales declined in Pingo Doce and Biedronka.
LFL Growth | |||
YTD Feb | March | Q1 20 | |
Biedronka | 13.2% | 7.4% | 11.1% |
Hebe | 12.4% | -27.4% | -1.7% |
Pingo Doce (Excl. Fuel) | 7.0% | -2.7% | 3.5% |
Recheio | 3.9% | -6.7% | 0.1% |
Ara | 32.7% | 37.0% | 34.3% |
Group LFL | 12.1% | 5.0% | 9.5% |
In April, under strict restrictions to the circulation of people and limits on the maximum number of customers per store, sales registered an increase of 6.5% (in local currency) in Biedronka and a reduction of 16.3% in Pingo Doce vs. the same month of 2019. With families set apart by lockdowns, this year Easter, very different from what was registered in April 2019, had also no significant effect in our main banners top line.
R&A | FirstNine Months 2019 | 8 |
Consolidated Management Report |
In Poland, Hebe's March sales were significantly impacted, given the more discretionary nature of its offer. In April, due to the imposed containment measures, trading remained difficult with sales materially impacted. Our health and beauty business registered a remarkable progression on its online sales that, in Q1, increased c.50% vs. the last quarter of 2019, boosted by a strong acceleration also in March.
In March, following the closure of restaurants and cafes and the absence of tourist activity, Recheio registered a substantial decrease of its sales to the HoReCa channel, which represents about 35% of the Company's turnover. The decline in sales in the last two weeks of March extended into April.
Also in Portugal, the declaration of the State of Emergency as from March 19 forced the closing of all Hussel chocolate stores and Jeronymo coffee shops.
In Colombia, the first effects of the pandemic occurred in the second half of March with the stockpiling of some basic products by the consumer.
During April, measures restricting the circulation of people were progressively introduced. These measures include variable curfew hours, in accordance with the laws of the various municipalities, and mandatory closing of stores on Saturdays and Sundays in some cities (c.30% of Ara stores were impacted). In addition to this constrained operating environment, the service levels of some suppliers of basic products deteriorated significantly. Despite a gradual recovery, the lower service level impacted sales growth, which in April was at 16.5% (in local currency).
In March, across the Group, the estimated costs incurred in the various areas to guarantee the safety and sustainability of the operation amounted to c.€15.5 million.
Given short and medium-term uncertainty about the impacts of the pandemic, the Group has suspended investment in new stores and remodelling projects. This decision will inevitably lead to delays in the investment programme for the year but does not diminish our longer-term ambitions.
All projects currently underway are being concluded and the planned strategic investments, namely in land acquisitions for future locations, will not be compromised.
Alteration of the dividend distribution proposal
The Board of Directors of Jerónimo Martins commends the resilience and the response capacity showed by the Group's banners in an adverse context, marked by high uncertainty and rapid changes. At the same time, it recognizes that there is not enough information at present to identify and rigorously assess all factors with a potential impact on the Group's activity in the near future.
Therefore, in line with the conservative balance sheet management that has characterised the Company, the Board of Directors decided to adopt a prudent approach that does not compromise our ability to take advantage of good opportunities, should they arise. In this context, it will propose to the AGM to be held on June 25, 2020 that the dividend distribution regarding 2019 results follows a payout of 30%, instead of the 50% previously announced, to be applied to the 2019 net consolidated results (excluding IFRS16).
This proposal represents a distribution of €130.1 mn, corresponding to a gross dividend of €0.207 per share (excluding the 859,000 own shares in the portfolio).
The Board of Directors does not exclude the possibility of proposing the distribution, until the end of the year and based on the free reserves of the Company, of the remaining value to the 50% payout initially foreseen if the economic impact of the pandemic allows it.
R&A | FirstNine Months 2019 | 9 |
Consolidated Management Report |
5. Outlook for 2020
We will continue to closely monitor our operations in a context that is challenging and rapidly changing. Responding to this environment requires a huge level of commitment and flexibility from our teams.
The mission of guaranteeing access to high-quality, essential food products at low prices in a proximity format and in a safe shopping environment will remain the guiding thread of all our decisions.
The progression of our businesses' top line throughout the period gives an idea of the fast-changing consumer behaviour in the context of the different measures to contain the pandemic and cannot be taken as a proxy for the next months.
The information we have so far leads us to conclude that all businesses will be impacted by the pandemic. But the degree and depth of these impacts will depend on the timespan of the pandemic and the containment actions adopted by each country.
Given the current uncertainty about the evolution of the pandemic, we do not have enough information to produce a reliable estimate of the potential impact of this crisis on the year's activity. For this reason, it is prudent to withdraw the guidance communicated on February 20 at the time of FY2019 results release.
Lisbon, 12 May 2020
The Board of Directors
R&A | FirstNine Months 2019 | 10 |
Consolidated Management Report |
- - CONSOLIDATED MANAGEMENT REPORT APPENDIX 1. The impact of IFRS 16 on Financial StatementsIncome Statement by Functions
(Million Euro) | IFRS16 | Excl. IFRS16 | ||||
Q1 20 | Q1 19 | Q1 20 | Q1 19 | |||
Net Sales and Services | 4,715 | 4,247 | 4,715 | 4,247 | ||
Cost of Sales | -3,675 | -3,320 | -3,675 | -3,320 | ||
Gross Profit | 1,041 | 927 | 1,041 | 927 | ||
Distribution Costs | -821 | -721 | -842 | -740 | ||
Administrative Costs | -94 | -70 | -94 | -70 | ||
Other Operating Profits/Losses | -5 | -1 | -5 | -1 | ||
Operating Profit | 122 | 135 | 100 | 116 | ||
Net Financial Costs | -63 | -40 | -9 | -8 | ||
Gains in Joint Ventures and Associates | 0 | 0 | 0 | 0 | ||
Profit Before Taxes | 59 | 95 | 91 | 108 | ||
Income Tax | -22 | -28 | -27 | -30 | ||
Profit Before Non Controlling Interests | 37 | 67 | 64 | 78 | ||
Non-Controlling Interests | -2 | -5 | -3 | -6 | ||
Net Profit Attributable to JM | 35 | 62 | 61 | 72 |
Income Statement (Management View)
(Excl. IFRS16) | |||||
(Million Euro) | Q1 20 | Q1 19 | |||
Net Sales and Services | 4,715 | 4,247 | 11.0% | ||
Gross Profit | 1,041 | 22.1% | 927 | 21.8% | 12.3% |
Operating Costs | -832-17.7% | -713-16.8% | 16.7% | ||
EBITDA | 208 | 4.4% | 214 | 5.0% | -2.7% |
EBITDA (adjusted *) | 224 | 4.7% | 214 | 5.0% | 4.6% |
Depreciation | -104 | -2.2% | -97 | -2.3% | 6.9% |
EBIT | 105 | 2.2% | 117 | 2.8% | -10.6% |
Net Financial Costs | -9 | -0.2% | -8 | -0.2% | 17.8% |
Gains in Joint Ventures and Associates | 0 | 0.0% | 0 | 0.0% | n.a. |
Other Profits/Losses | -5 | -0.1% | -1 | 0.0% | n.a. |
EBT | 91 | 1.9% | 108 | 2.5% | -16.1% |
Income Tax | -27 | -0.6% | -30 | -0.7% | -10.2% |
Net Profit | 64 | 1.3% | 78 | 1.8% | -18.4% |
Non-Controlling Interests | -3 | -0.1% | -6 | -0.1% | -45.7% |
Net Profit Attributable to JM | 61 | 1.3% | 72 | 1.7% | -16.3% |
EPS (€) | 0.10 | 0.12 | -16.3% | ||
EPS without Other Profits/Losses (€) | 0.10 | 0.12 | -12.9% |
* EBITDA adjusted from the costs related to COVID-19
R&A | FirstNine Months 2019 | 11 |
Consolidated Management Report Appendix |
Balance Sheet
(Excl. IFRS16) | |||
(Million Euro) | Q1 20 | 2019 | Q1 19 |
Net Goodwill | 621 | 641 | 638 |
Net Fixed Assets | 3,900 | 4,140 | 3,855 |
Total Working Capital | -2,487 | -2,788 | -2,386 |
Others | 91 | 86 | 69 |
Invested Capital | 2,124 | 2,079 | 2,175 |
Total Borrowings | 686 | 732 | 723 |
Financial Leases | 14 | 17 | 15 |
Accrued Interest | -21 | 3 | 5 |
Cash and Cash Equivalents | -817 | -949 | -647 |
Net Debt 1 | -137 | -196 | 96 |
Non-Controlling Interests | 245 | 257 | 229 |
Share Capital | 629 | 629 | 629 |
Reserves and Retained Earnings | 1,387 | 1,389 | 1,221 |
Shareholders Funds | 2,261 | 2,275 | 2,079 |
1Net Debt amount was restated in 2019.
Cash and Cash Equivalents considered in Total Working Capital was restated to Cash and Cash Equivalents heading
Cash Flow
(Excl. IFRS16) | ||
(Million Euro) | Q1 20 | Q1 19 |
EBITDA | 208 | 214 |
Interest Payment | -5 | -5 |
Income Tax | -32 | -28 |
Funds From Operations | 171 | 180 |
Capex Payment | -186 | -146 |
Change in Working Capital | -92 | -40 |
Others | -3 | 0 |
Cash Flow | -109 | -6 |
EBITDA and EBITDA Margin Breakdown
(Million Euro) | IFRS16 | ||||
Q1 20 | Mg | Q1 19 | Mg | ||
Biedronka | 277 | 8.5% | 260 | 9.0% | |
Distribution Portugal | 62 | 5.4% | 68 | 6.1% | |
Others & Cons. Adjustments | -30 | n.a. | -18 | n.a. | |
JM Consolidated | 309 | 6.6% | 310 | 7.3% | |
JM Consolidated (adjusted *) | 325 | 6.9% | 310 | 7.3% |
* EBITDA adjusted from the costs related to COVID-19
Excl. IFRS16 | ||||
Q1 20 | Mg | Q1 19 | Mg | |
208 | 6.4% | 195 | 6.7% | |
45 | 3.9% | 51 | 4.5% | |
-45 | n.a. | -32 | n.a. | |
208 | 4.4% | 214 | 5.0% | |
224 | 4.7% | 214 | 5.0% |
Financial Costs Breakdown
(Million Euro) | IFRS16 | |
Q1 20 | Q1 19 | |
Net Interest | -5 | -5 |
Interests on Capitalised Operating Leases | -32 | -33 |
Exchange Differences | -24 | -1 |
Others | -2 | -1 |
Financial Results | -63 | -40 |
Excl. IFRS16
Q1 20 | Q1 19 |
-5 | -5 |
- | - |
-2 | -1 |
-2 | -1 |
-9 | -8 |
R&A| 1stQuarter 2020 | 12 |
Consolidated Management Report Appendix |
2. Sales Evolution | |||
Total Sales Growth | LFL Growth | ||
Q1 20 | Q1 20 | ||
Biedronka | |||
Euro | 12.6% | ||
PLN | 13.2% | 11.1% | |
Hebe | |||
Euro | 14.6% | ||
PLN | 15.2% | -1.7% | |
Pingo Doce | 3.5% | 2.8% | |
Excl. Fuel | 4.3% | 3.5% | |
Recheio | 0.2% | 0.1% | |
Ara | |||
Euro | 38.9% | ||
COP | 52.3% | 34.3% |
3. Stores Network
Number of Stores | 2019 | Openings | Closings | Q1 20 | Q1 19 |
Q1 20 | Q1 20 | ||||
Biedronka | 3,002 | 11 | 3 | 3,010 | 2,902 |
Hebe * | 273 | 8 | 0 | 281 | 238 |
Pingo Doce | 441 | 1 | 0 | 442 | 434 |
Recheio | 42 | 0 | 0 | 42 | 42 |
Ara | 616 | 19 | 7 | 628 | 541 |
* Q1 20: 281 stores: 28 pharmacies and 253 drugstores (21 of which include a pharmacy) | |||||
Openings | Closings | ||||
Sales Area (sqm) | 2019 | Remodellings | Q1 20 | Q1 19 | |
Q1 20 | Q1 20 | ||||
Biedronka | 2,021,345 | 8,394 | -858 | 2,030,596 | 1,937,731 |
Hebe | 66,805 | 2,109 | 0 | 68,914 | 57,035 |
Pingo Doce | 513,272 | 102 | 0 | 513,374 | 508,212 |
Recheio | 133,826 | 0 | 0 | 133,826 | 133,826 |
Ara | 207,982 | 6,235 | 2,691 | 211,526 | 184,508 |
4. Definitions
Like for like (LFL) sales: sales made by stores that operated under the same conditions in the two periods. Excludes stores opened or closed in one of the two periods. Sales of stores that underwent profound remodelling are excluded for the remodelling period (store closure).
R&A| 1stQuarter 2020 | 13 |
Consolidated Management Report Appendix |
5. Income Statement - Reconciliation Note
(Following ESMA guidelines on Alternative Performance Measures from October 2015)
Income Statement | Income Statement by Functions in the Consolidated Report & | |
(page 5) | Accounts - First Quarter 2020 Results | |
Net Sales and Services | Net sales and services | |
Gross Profit | Gross profit | |
Operating Costs | Includes headings of Distribution costs; Administrative costs; Other | |
operating costs, excluding the amount of €-182.7 mn related to | ||
Depreciations | ||
EBITDA | ||
Depreciation | Value reflected in the note - Segments reporting | |
EBIT | ||
Net Financial Costs | Net financial costs | |
Gains in Joint Ventures and Associates | Gains (losses) in joint ventures and associates | |
Includes headings of Other operating profits/losses; Gains in disposal | ||
Other Profits/Losses | of business (when applicable) and Gains/losses in other investments | |
(when applicable) | ||
EBT | ||
Income Tax | Income tax | |
Net Profit | ||
Non-Controlling Interests | Non-Controlling interests | |
Net Profit Attributable to JM |
R&A| 1stQuarter 2020 | 14 |
Consolidated Management Report Appendix |
6. Balance Sheet - Reconciliation Note
(Following ESMA guidelines on Alternative Performance Measures from October 2015)
Balance Sheet | Balance Sheet in the Consolidated Report & Accounts | |||
(page 6) | - | First Quarter 2020 Results | ||
Net Goodwill | Included in the heading of Intangible assets | |||
Net Fixed Assets | Includes the headings Tangible and Intangible assets excluding the | |||
Net goodwill (€620.7 mn) and Financial leases (€15.2 mn) | ||||
Net Right-of-Use Assets (RoU) | Includes the heading of Net right-of-useassetsexcluding the | |||
Financial leases (€15.2 mn) | ||||
Total Working Capital | Includes the headings Current trade debtors, Accrued income and | |||
Deferred costs; Inventories; Biological assets; Trade creditors, Accrued | ||||
costs and Deferred income; Employee benefits; and also, the value of | ||||
€-11.6 mn related to 'Others' due to its operational nature. | ||||
Excludes the value of €-2.3 mn related to Interest accruals and | ||||
deferrals (note - Net financial debt) | ||||
Others | Includes the headings Investment property; Investments in joint | |||
ventures and associates; Other financial investments; Non-Current | ||||
trade debtors, Accrued income and Deferred costs; Deferred tax assets | ||||
and liabilities; Income tax receivable and payable; and Provisions for | ||||
risks and contingencies. | ||||
Excludes the value of €11.6 mn related to 'Others' due to its | ||||
operational nature | ||||
Invested Capital | ||||
Total Borrowings | Includes the heading Borrowings current and non-current | |||
Financial Leases | Value reflected in the headings of Lease liabilities | current | and | |
non-current | ||||
Capitalised Operating Leases | Value reflected in the headings of Lease liabilities | current | and | |
non-current excluding Financial leases liabilities (€14.4 mn) | ||||
Accrued Interest | Includes the heading Derivative financial instruments and the value of | |||
€-2.3 mn related to Interest accruals and deferrals (value reflected in | ||||
note - Net financial debt) | ||||
Cash and Cash Equivalents | Includes the heading Cash and cash equivalents |
Net Debt
Non-Controlling Interests | Non-Controlling interests |
Share Capital | Share capital |
Reserves and Retained Earnings | Includes the heading Share premium, Own shares, Other reserves and |
Retained earnings | |
Shareholders' Funds |
R&A| 1stQuarter 2020 | 15 |
Consolidated Management Report Appendix |
7. Cash Flow - Reconciliation Note
(Following ESMA guidelines on Alternative Performance Measures from October 2015)
Cash Flow | Cash Flow in the Consolidated Report & Accounts |
(page 7) | - First Quarter 2020 Results |
EBITDA | Included in the heading of Cash generated from operations |
Capitalised Operating Leases Payment | Included in the heading Leases paid |
Interest Payment | Includes the headings of Loans interest paid, Leases interest paid |
and Interest received | |
Income Tax | Income tax paid |
Funds from Operations | |
Capex Payment | Includes the headings Disposal of tangible and intangible assets; |
Disposal of financial and investment property; Acquisition of tangible | |
and intangible assets; Acquisition of financial investments and | |
investment property. It also includes acquisitions of tangible assets | |
classified as finance leases under previous regulations (€0.0 mn) | |
Change in Working Capital | Included in the heading of Cash generated from operations |
Others | Includes the headings disposal of business (when applicable), being |
the remaining amount included in the heading Cash generated from | |
operations | |
Cash Flow |
8. Information Regarding Individual Financial Statements
In accordance with number 5 of article 10 of the Regulation number 5/2008 of the Portuguese Securities Market Commission (CMVM), the Quarter Individual Financial Statements of Jerónimo Martins SGPS, S.A. are not disclosed as they do not include additional relevant information, compared to the one presented in this report.
R&A| 1stQuarter 2020 | 16 |
Consolidated Management Report Appendix |
III - CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT BY FUNCTIONS
FOR THE QUARTERS ENDED AT 31 MARCH 2020 AND 2019
Euro thousand | |||
Notes | March | March | |
2020 | 2019 | ||
Sales and services rendered | 3 | 4,715,471 | 4,247,103 |
Cost of sales | 4 | (3,674,858) | (3,320,126) |
Gross profit | 1,040,613 | 926,977 | |
Distribution costs | 4 | (820,554) | (720,945) |
Administrative costs | 4 | (93,513) | (69,965) |
Other operating profits/losses | 4.1 | (4,699) | (1,222) |
Operating profit | 121,847 | 134,845 | |
Net financial costs | 5 | (62,593) | (40,274) |
Gains (losses) in joint ventures and associates | (106) | 3 | |
Profit before taxes | 59,148 | 94,574 | |
Income tax | 6 | (21,999) | (27,957) |
Profit before non-controlling interests | 37,149 | 66,617 | |
Attributable to: | |||
Non-controlling interests | 2,447 | 4,819 | |
Jerónimo Martins Shareholders | 34,702 | 61,798 | |
Basic and diluted earnings per share - Euros | 12 | 0.0552 | 0.0983 |
To be read with the attached notes to the consolidated financial statements. |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE QUARTERS ENDED AT 31 MARCH 2020 AND 2019
Euro thousand | |||
March | March | ||
Notes | 2020 | 2019 | |
Net profit | 37,149 | 66,617 | |
Other comprehensive income: | |||
Items that will not be reclassified to profit or loss | - | - | |
Currency translation differences | (77,864) | 1,328 | |
Change in fair value of cash flow hedges | 8 | 791 | (1) |
Change in fair value of hedging instruments on foreign operations | 8 | 22,015 | (790) |
Related tax | (2,215) | 1 | |
Items that may be reclassified to profit or loss | (57,273) | 538 | |
Other comprehensive income, net of income tax | (57,273) | 538 | |
Total comprehensive income | (20,124) | 67,155 | |
Attributable to: | |||
Non-controlling interests | 2,447 | 4,819 | |
Jerónimo Martins Shareholders | (22,571) | 62,336 | |
Total comprehensive income | (20,124) | 67,155 | |
To be read with the attached notes to the consolidated financial statements.
R&A| 1stQuarter 2020 | 17 |
Consolidated Financial Statements |
CONSOLIDATED BALANCE SHEET AT 31 MARCH 2020 AND 31 DECEMBER 2019
Euro thousand | |||
Notes | March | December | |
2020 | 2019 | ||
Assets | |||
Tangible assets | 7 | 3,740,229 | 3,969,937 |
Intangible assets | 7 | 764,840 | 794,010 |
Investment property | 7 | 8,553 | 8,563 |
Right-of-use assets | 7 | 2,140,742 | 2,334,949 |
Biological assets | 3,603 | 3,336 | |
Investments in joint ventures and associates | 5,287 | 5,193 | |
Other financial investments | 1,327 | 1,327 | |
Trade debtors, accrued income and deferred costs | 9 | 68,067 | 86,767 |
Derivative financial instruments | 8 | 391 | - |
Deferred tax assets | 145,440 | 138,130 | |
Total non-current assets | 6,878,479 | 7,342,212 | |
Inventories | 1,054,892 | 1,038,627 | |
Biological assets | 5,247 | 5,563 | |
Income tax receivable | 12,184 | 11,469 | |
Trade debtors, accrued income and deferred costs | 9 | 372,004 | 424,689 |
Derivative financial instruments | 8 | 22,872 | - |
Cash and cash equivalents | 10 | 816,692 | 929,311 |
Total current assets | 2,283,891 | 2,409,659 | |
Total assets | 9,162,370 | 9,751,871 | |
Shareholders' equity and liabilities | |||
Share capital | 629,293 | 629,293 | |
Share premium | 22,452 | 22,452 | |
Own shares | (6,060) | (6,060) | |
Other reserves | (124,284) | (67,011) | |
Retained earnings | 11 | 1,430,995 | 1,396,293 |
1,952,396 | 1,974,967 | ||
Non-controlling interests | 241,027 | 253,941 | |
Total shareholders' equity | 2,193,423 | 2,228,908 | |
Borrowings | 13 | 221,597 | 308,764 |
Lease liabilities | 14 | 1,851,859 | 1,999,293 |
Trade creditors, accrued costs and deferred income | 17 | 762 | 764 |
Employee benefits | 16 | 69,122 | 69,669 |
Provisions for risks and contingencies | 16 | 26,926 | 27,780 |
Deferred tax liabilities | 63,793 | 70,678 | |
Total non-current liabilities | 2,234,059 | 2,476,948 | |
Borrowings | 13 | 464,162 | 423,685 |
Lease liabilities | 14 | 363,463 | 384,980 |
Trade creditors, accrued costs and deferred income | 17 | 3,849,277 | 4,182,149 |
Derivative financial instruments | 8 | 279 | 3,056 |
Income tax payable | 57,707 | 52,145 | |
Total current liabilities | 4,734,888 | 5,046,015 | |
Total shareholders' equity and liabilities | 9,162,370 | 9,751,871 | |
To be read with the attached notes to the consolidated financial statements
R&A| 1stQuarter 2020 | 18 |
Consolidated Financial Statements |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS´EQUITY
Euro thousand | ||||||||||
Shareholders' equity attributable to Shareholders of Jerónimo Martins, SGPS, S.A. | ||||||||||
Other reserves | ||||||||||
Non-controlling | Shareholders' | |||||||||
Share capital | Share | Own shares | Cash flow | Currency | Retained | Total | interests | equity | ||
premium | earnings | |||||||||
translation | ||||||||||
hedge | ||||||||||
reserves | ||||||||||
Balance Sheet as at 1 January 2019 | 629,293 | 22,452 | (6,060) | (50) | (76,996) | 1,209,259 | 1,777,898 | 238,356 | 2,016,254 | |
Equity changes in 2019 |
Currency translation differences
Change in fair value of cash flow hedging
Change in fair value of hedging instruments on foreign operations
1,329 | 1,329 | 1,329 |
(1) | (1) | (1) |
(790) | (790) | (790) |
Other comprehensive income | - | - | - | (1) | 539 | - | 538 | - | 538 |
Net profit | 61,798 | 61,798 | 4,819 | 66,617 | |||||
Total comprehensive income | - | - | - | (1) | 539 | 61,798 | 62,336 | 4,819 | 67,155 |
Dividends | - | - | (15,260) | (15,260) | |||||
Balance Sheet as at 31 March 2019 | 629,293 | 22,452 | (6,060) | (51) | (76,457) | 1,271,057 | 1,840,234 | 227,915 | 2,068,149 |
Balance Sheet as at 1 January 2020 | 629,293 | 22,452 | (6,060) | (22) | (66,989) | 1,396,293 | 1,974,967 | 253,941 | 2,228,908 |
Equity changes in 2020 |
Currency translation differences
Change in fair value of cash flow hedging
Change in fair value of hedging instruments on foreign operations
(31) | (79,898) | (79,929) | (79,929) |
641 | 641 | 641 | |
22,015 | 22,015 | 22,015 |
Other comprehensive income | - | - | - | 610 | (57,883) | - | (57,273) | - | (57,273) |
Net profit | 34,702 | 34,702 | 2,447 | 37,149 | |||||
Total comprehensive income | - | - | - | 610 | (57,883) | 34,702 | (22,571) | 2,447 | (20,124) |
Dividends (note 11) | - | - | (15,361) | (15,361) | |||||
Balance Sheet as at 31 March 2020 | 629,293 | 22,452 | (6,060) | 588 | (124,872) | 1,430,995 | 1,952,396 | 241,027 | 2,193,423 |
To be read with the attached notes to the consolidated financial statements
R&A| 1stQuarter 2020 | 19 |
Consolidated Financial Statements |
CONSOLIDATED CASH FLOW STATEMENT
FOR THE QUARTERS ENDED AT 31 MARCH 2020 AND 2019
Euro thousand | |||
Notes | March | March | |
2020 | 2019* | ||
Net results | 34,702 | 61,798 | |
Adjustments for: | |||
Non-controlling interests | 2,447 | 4,819 | |
Income tax | 21,999 | 27,957 | |
Depreciations and amortisations | 182,651 | 174,226 | |
Provisions and other operational gains and losses | 333 | 8,184 | |
Net financial costs | 62,593 | 40,274 | |
Gains/losses in associated companies | 106 | (3) | |
Profit/losses in tangible, intangible and right-of-use assets | 1,316 | 962 | |
306,147 | 318,217 | ||
Changes in working capital: | |||
Inventories | (71,256) | (6,062) | |
Trade debtors, accrued income and deferred costs | 11,565 | 3,364 | |
Trade creditors, accrued costs and deferred income | (35,586) | (44,615) | |
Cash generated from operations | 210,870 | 270,904 | |
Income taxes paid | (32,297) | (28,405) | |
Cash flow from operating activities | 178,573 | 242,499 | |
Investment activities | |||
Disposals of tangible and intangible assets | 554 | 171 | |
Interest received | 1,835 | 1,150 | |
Acquisition of tangible and intangible assets | (185,812) | (144,605) | |
Acquisition and investments in joint ventures and associates | (250) | (500) | |
Collateral deposits associated to financial debt | 19,367 | - | |
Cash flow from investment activities | (164,306) | (143,784) | |
Financing activities | |||
Loans interest paid | (6,286) | (6,170) | |
Leases interest paid | 5 | (32,108) | (32,688) |
Net change in loans | 13 | 38,061 | 86,145 |
Leases paid | 14 | (70,135) | (65,788) |
Dividends paid | 11 | (171) | - |
Cash flow from financing activities | (70,639) | (18,501) | |
Net changes in cash and cash equivalents | (56,372) | 80,214 | |
Cash and cash equivalents changes | |||
Cash and cash equivalents at the beginning of the year | 929,311 | 545,988 | |
Net changes in cash and cash equivalents | (56,372) | 80,214 | |
Effect of currency translation differences | (56,247) | 1,611 | |
Cash and cash equivalents at the end of March | 10 | 816,692 | 627,813 |
To be read with the attached notes to the consolidated financial statements
- As allowed by IAS 7, par.31-33, the information regarding 2019 was restated, with the transfer of the line "Loans interest paid" from operating activities to financing activities. This reclassification ensures an alignment between external and internal reporting, considering the Group non-financial nature, where the payment of loans interests is seen as being part of financing activities.
R&A| 1stQuarter 2020 | 20 |
Consolidated Financial Statements |
INDEX TO THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. | Activity.............................................................................................................................................................................................. | 22 |
2. | Accounting policies...................................................................................................................................................................... | 24 |
3. | Segments reporting ..................................................................................................................................................................... | 25 |
4. | Operating costs by nature ........................................................................................................................................................ | 26 |
5. | Net financial costs........................................................................................................................................................................ | 27 |
6. | Income tax recognised in the income statement ............................................................................................................. | 27 |
7. | Tangible assets, intangible assets, investment property and right-of-use assets ............................................ | 28 |
8. | Derivative financial instruments............................................................................................................................................. | 28 |
9. | Trade debtors, accrued income and deferred costs ....................................................................................................... | 28 |
10. | Cash and cash equivalents ...................................................................................................................................................... | 29 |
11. | Dividends ......................................................................................................................................................................................... | 29 |
12. | Basic and diluted earnings per share................................................................................................................................... | 29 |
13. | Borrowings...................................................................................................................................................................................... | 29 |
14. | Lease liabilities .............................................................................................................................................................................. | 30 |
15. | Financial debt................................................................................................................................................................................. | 30 |
16. | Provisions and employee benefits......................................................................................................................................... | 31 |
17. | Trade creditors, accrued costs and deferred income..................................................................................................... | 31 |
18. | Contingencies................................................................................................................................................................................. | 31 |
19. | Related parties .............................................................................................................................................................................. | 31 |
20. | Events after the balance sheet date ..................................................................................................................................... | 32 |
R&A| 1stQuarter 2020 | 21 |
Notes to the Consolidated Financial Statements |
1. Activity
Jerónimo Martins, SGPS, S.A. (JMH), is the parent Company of Jerónimo Martins Group (Group) and has its head office in Lisbon.
The Group operates in the food area, particularly in the distribution and sale of food and other fast-moving consumer goods products, in Portugal, Poland and Colombia.
Head Office: Rua Actor António Silva, n.º 7, 1649-033 Lisboa
Share Capital: 629,293,220 euros
Registered at the Commercial Registry Office of Lisbon and Tax Number: 500 100 144 JMH has been listed on Euronext Lisbon since 1989.
The Board of Directors approved these consolidated financial statements on 12 May 2020.
Covid-19
In a context of great uncertainty and at constant evolution, the Group has been closely monitoring all developments related with the Covid-19 pandemic, implementing the measures deemed adequate due to the restrictions imposed by the declarations of the state of emergency, as well as the recommendations issued by the relevant international authorities, namely the World Health Organization and the European Centre for Disease Prevention and Control, and from the competent bodies in the countries where it operates.
The Group's Executive Management Team, in direct coordination with the Companies' CEOs and Executive Teams, acted as a Group Crisis Committee and assumed the management of the business continuity plan, ensuring the preparation of the action and prevention plans deemed necessary and appropriate to anticipate and mitigate the adverse effects and the economic and financial impacts of the pandemic on the Group's activities.
Under this coordination, and closely following the recommendations of the official entities, the Group Companies implemented the operational measures that they understood as better protecting their employees, customers and other stakeholders, introducing the necessary adjustments in their supply chains.
Taking into account the events that have taken place so far it is not expected that impacts of the pandemic could jeopardize the going concern of the Group's operations. However, at this stage, and as mentioned in the management report, it is not yet possible to quantify the magnitude of the impacts on the Group's accounts. The key priority continues to be the implementation of all measures considered adequate to minimize the negative effects on its operation, in line with the recommendations of the authorities and protecting the best interests of the Customers, Suppliers, Employees and local Communities.
It is expected that the performance of all the Groups' businesses will be impacted, by the pandemic in the year 2020. The degree and depth of the impacts will depend on the length of the pandemic and on the restrictions and measures adopted in the different countries. The Group expects, however, to overcome this adverse context, proceeding, in an adjusted manner, with the implementation of its strategy, in order to ensure, as quickly as possible, the return to the levels of growth and profitability expected by Shareholders and remaining stakeholders.
Financial risks
The Group is exposed to several financial risks, namely: i. price risk, which includes interest and exchange rate risks; ii. transactional risk, which includes credit and liquidity risk; and iii. the risk arising from the Group's investments portfolio, including various risks such as interest rate, credit, foreign exchange, inflation, political and fiscal. These risks are described in the Consolidated Financial Statements chapter of the 2019 Annual Report, point 29 - Financial risks.
During the first three months of 2020, due to the effects of the Covid-19 pandemic and the measures adopted by governments, companies and individuals to mitigate the spread of the virus, we highlight the following impacts on the risks to which the Group is exposed to:
Foreign exchange risk
The main source of exposure to foreign exchange risk comes from Group' operations in Poland and in Colombia. During the first three months of 2020, the limitations on the circulation of people and goods caused by the pandemic, slowed down the world economy and brought a greater uncertainty to the markets, leading to a significant devaluation of these currencies.
R&A| 1stQuarter 2020 | 22 |
Notes to the Consolidated Financial Statements |
Polish Zloty | % deval. | Colombian Peso | % deval. | |
Exchange rates evolution | compared to | compared | ||
(PLN) | (COP) | |||
Dec-19 | to Dec-19 | |||
31 December 2019 | 4.2568 | n.a. | 3,685.7100 | n.a. |
31 January 2020 | 4.3009 | -1.04% | 3,770.3300 | -2.30% |
28 February 2020 | 4.3259 | -1.62% | 3,849.7500 | -4.45% |
31 March 2020 | 4.5506 | -6.90% | 4,453.4100 | -20.83% |
In the first quarter of 2020, the impact to the Group of the exchange rate devaluation, essentially, resulting from the exchange rate conversion of assets and liabilities denominated in the currencies of the countries where the Group operates, amounts to a loss of EUR (57,883) thousand, recognized in currency translation reserves in equity.
Given that the Group's subsidiaries maintain several operational activities denominated in currencies other than their functional currency, part of which are covered by hedging instruments, the net impact in the 1stquarter of 2020, corresponded to a loss of EUR (23,791) thousand, recognized in profit or loss.
The Group's exposure to foreign exchange risk in financial assets and liabilities recognized as at 31 March 2020 was as follows:
As at 31 March 2020 | Euro | Zloty | Colombian | US Dollar | Total |
peso | |||||
Total financial assets | 143,616 | 992,626 | 38,311 | 1,020 | 1,175,573 |
Total financial liabilities | 1,520,470 | 4,237,076 | 685,565 | - | 6,443,111 |
Net financial position in the balance sheet | (1,376,854) | (3,244,450) | (647,254) | 1,020 | (5,267,538) |
As at 31 December 2019 | |||||
Total financial assets | 275,245 | 1,012,520 | 69,197 | - | 1,356,962 |
Total financial liabilities | 1,624,984 | 4,539,468 | 834,976 | 64 | 6,999,492 |
Net financial position in the balance sheet | (1,349,739) | (3,526,948) | (765,779) | (64) | (5,642,530) |
Considering the net position of the financial assets and liabilities on the balance sheet at 31 March 2020, a depreciation of the zloty against the euro of around 10% would have a positive impact of EUR 370,706 thousand on the equity's currency translation reserves (in 31 December 2019: a positive impact of EUR 335,636 thousand). Regarding the Colombian peso, a depreciation against the euro of 10% would have a positive impact on the equity's currency translation reserves of EUR 58,841 thousand (in 31 December 2019: a positive impact of EUR 69,616 thousand).
Considering the net financial assets related with operating activities that some Group subsidiaries hold in currencies other than their functional currency, a 10% depreciation of the exchange rate would have a negative impact on the results of EUR (33,253) thousand.
Considering the total net assets (financial and non-financial) to which the Group is exposed to in Zlotys and Colombian pesos, the effect of a 10% depreciation of these currencies would have a negative impact of EUR (96,564) thousand in total equity (in 31 December 2019: a negative impact of EUR (104,439) thousand).
Credit risk
The Group manages centrally its exposure to credit risk on bank deposits, short-term investments and derivatives contracted with financial institutions. Those are selected based on the ratings they receive from one of the independent benchmark rating agencies. Apart from the existence of a minimum accepted rating, there is also a maximum exposure to each of these financial institutions.
As of 31 March 2020 the credit quality on bank deposits and short-term investments and derivative financial instruments with positive value, which amount to EUR 835,668 thousand is segregated as follows: 20% in financial institutions with a rating between A- and AA-; 78% in financial institutions with a rating between BBB- and BBB+; and 2% in financial institutions with a lower rating.
With regard to trade receivables (credit to customers), the increased risk caused by the pandemic is mainly circumscribed to the Cash & Carry business, since the other businesses operate based on sales paid with cash or by electronic means of payment, mainly bank cards (debit and credit). This risk is managed based on experience and individual customer knowledge, and/or by imposing credit limits which are monitored on a monthly basis. In addition, the Company uses credit insurance to mitigate the associated risk.
R&A| 1stQuarter 2020 | 23 |
Notes to the Consolidated Financial Statements |
As of 31 March 2020, from the amount of EUR 45,451 thousand related to accounts receivable, approximately 83% referred to customers without default or impairment indicators, or whose credits were covered by credit insurance.
For the remaining accounts receivable, the Group's priority has been to find the best solutions together with its business partners. At this stage, it has been assessing the ability to recover existing balances. Meanwhile, it has already renegotiated payment terms for some of its clients, and is currently evaluating possible impairment indicators, which will largely depend on the evolution of the pandemic, on restrictive measures to the development of their economic activities, as well as on possible state support.
Some Group companies, such as Pingo Doce in Portugal and Biedronka in Poland, sublease parts of their commercial areas to third parties ("Tenants"), with many of these partners having their businesses affected by the pandemic generated by the Covid-19 virus. For this reason, the Group has temporarily suspended rents collection, and is analysing the instruments that would best allow the continuity of the activity of these partners.
The Group is permanently monitoring the financial situation of its customers, tenants and other business partners, with no significant non-compliance situations, at this stage, that could lead to the recognition of impairment losses.
Liquidity risk
Liquidity risk is managed by maintaining an adequate level of cash and cash equivalents, as well as by negotiating credit facilities that, not only ensure the regular development of the Group' activities, but also ensure some flexibility to be able to absorb shocks unrelated to Company activities.
Throughout the year the Group maintains liquidity reserves in the form of credit lines contracted with the financial institutions with which it relates, in order to ensure the ability to meet its commitments, without having to finance itself under unfavourable conditions. Thus, on 31 March 2020, the Group has contracted credit lines that were not being used in the total amount of EUR 886,832 thousand.
In addition, the Group had, at 31 March 2020, a liquidity reserve consisting of cash and cash equivalents in the amount of EUR 816,692 thousand.
This way, the Group expects to satisfy all its treasury needs with the use of operating activity flows and liquidity reserves, and if eventually necessary, using the existing available credit lines. The Group believes that compliance with the current covenants associated with the issued debt is duly ensured.
2. Accounting policies
2.1. Basis for preparation
All amounts are shown in thousand euros (EUR thousand) unless otherwise stated.
The Consolidated Financial Statements of JMH were prepared in accordance with the interim financial reporting standard (IAS 34), and all other International Financial Reporting Standards (IFRS) issued by International Accounting Standards Board (IASB) and with the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) as adopted by the European Union (EU).
The Consolidated Financial Statements of JMH were prepared in accordance with the same standards and accounting policies adopted by the Group in the preparation of the annual financial statements, except for the adoption of new standards, amendments and interpretations, effective as of 1 January 2020, and including an explanation of the events and relevant changes for the understanding of variations in the financial position and Group performance since the last annual report. Thus, some of the notes from the 2019 annual report are omitted because no changes occurred, or they are not materially relevant for the understanding of the interim financial statements.
Change in accounting policies and basis for presentation:
2.1.1. New and amended standards adopted by the Group
Between November 2019 and January 2020, the EU issued the following Regulations, which were adopted by the Group from 1 January 2020:
EU Regulation | IASB Standard or IFRIC Interpretation | |||
endorsed by EU | ||||
Regulation no. 2075/2019 | Amendments to References to the Conceptual Framework in IFRS | |||
Standards | ||||
Amendments to IAS 1 Presentation of Financial Statements and |
Regulation no. 2104/2019 IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Material (amendments)
R&A| 1stQuarter 2020
Notes to the Consolidated Financial Statements
Issued in
March 2018
October 2018
Mandatory for financial years beginning on or after
1 January 2020
1 January 2020
24
EU Regulation
Regulation no. 34/2020
Regulation no. 551/2020
IASB Standard or IFRIC Interpretation
endorsed by EU
Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)
Amendments to IFRS 3 Business Combinations: Definition of a Business
Issued in
September
2019
October 2018
Mandatory for financial years beginning on or after
1 January 2020
1 January 2020
The Group adopted the aforementioned amendments with no significant impact on its Consolidated Financial Statements.
2.1.2. New standards, amendments and interpretations endorsed by EU but not effective for the financial year beginning 1 January 2020 and not early adopted
During the first three months of 2020, the EU did not issue any Regulation regarding the endorsement of new standards, amendments or interpretations that have not yet been implemented by the Group.
2.1.3. New standards, amendments and interpretations issued by IASB and IFRIC, but not yet endorsed by EUIASB issued in January 2020 the following amendment that is still pending endorsement by the EU:
IASB Standard or IFRIC Interpretation | Issued in | Expected application for financial | |||
years beginning on or after | |||||
Amendments to IAS 1 Presentation of Financial Statements: Classification of | January 2020 | 1 January 2022 | |||
Liabilities as Current or Non-current | |||||
The Management is currently evaluating the impact of adopting these amendments to standards already in place, and so far does not expect a significant impact on the Group's Consolidated Financial Statements.
2.2. Transactions in foreign currencies
Transactions in foreign currencies are translated into Euros at the exchange rate prevailing on the transaction date.
On the balance sheet date, monetary assets and liabilities expressed in foreign currencies are translated at the exchange rate prevailing on that date and exchange differences arising from this conversion are recognised in the income statement. When qualifying as hedges on investments in foreign subsidiaries the exchange differences are deferred on the Company's equity.
The main exchange rates applied on the balance sheet date are as follows:
Euro foreign exchange reference rates | Colombian Peso | |||
( x foreign exchange units per 1 euro ) | Polish Zloty | |||
(COP) | ||||
(PLN) | ||||
Rate at 31 March 2020 | 4.5506 | 4.453,4100 | ||
Average rate for the year | 4.3240 | 3.902,0600 | ||
Rate at 31 March 2019 | 4.3006 | 3,585.0200 | ||
Average rate for the year | 4.3016 | 3,558.1900 |
3. Segments reporting
Segment information is presented in accordance with internal reporting to Management. Based on this report, the Management evaluates the performance of each segment and allocates the available resources.
Management monitors the performance of the business based on a geographical and business perspective. Due to the fact that the business units in the distribution area in Portugal share a set of competences, the Group analyses, on a quarterly basis, its segments in an aggregate performance perspective. In addition, the Group also separates the business units Poland Retail and Colombia Retail. Apart from these there are also other businesses which due to their low materiality, are not reported separately.
Business segments:
- Portugal Distribution: comprises the business unit of JMR (Pingo Doce supermarkets) and the business unit Recheio (Wholesale operation of cash & carry and foodservice);
- Poland Retail: the business unit which operates under the Biedronka banner;
- Colombia Retail: the business unit which operates under Ara banner;
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Notes to the Consolidated Financial Statements |
- Others, eliminations and adjustments: includes i. business units with reduced materiality (Coffee Shops, Chocolate Stores and Agribusiness in Portugal, and Health and Beauty Retail in Poland); ii. the Holding Companies; and iii. Group's consolidation adjustments.
Management evaluates the performance of segments based on the Earnings Before Interest and Taxes (EBIT). This indicator excludes the effects of other operating profits/losses.
Detailed Information by Business Segments as at March 2020 and 2019
Portugal Distribution | Poland Retail | Colombia Retail | Others, eliminations and | Total JM Consolidated | ||||||
adjustments | ||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |
Net sales and services | 1,151,412 | 1,120,001 | 3,262,105 | 2,897,365 | 235,284 | 169,395 | 66,670 | 60,342 | 4,715,471 | 4,247,103 |
Inter-segments | 284 | 294 | 397 | 392 | - | - | (681) | (686) | - | - |
External customers | 1,151,128 | 1,119,707 | 3,261,708 | 2,896,973 | 235,284 | 169,395 | 67,351 | 61,028 | 4,715,471 | 4,247,103 |
Operational cash flow (EBITDA) | 62,406 | 68,151 | 277,139 | 260,142 | (3,498) | (11,754) | (26,850) | (6,246) | 309,197 | 310,293 |
Depreciations and amortisations | (42,977) | (41,885) | (118,044) | (111,452) | (12,228) | (11,831) | (9,402) | (9,058) | (182,651) | (174,226) |
Earnings before interest and taxes (EBIT) | 19,429 | 26,266 | 159,095 | 148,690 | (15,726) | (23,585) | (36,252) | (15,304) | 126,546 | 136,067 |
Other operating profits/losses | (4,699) | (1,222) | ||||||||
Financial results | (62,699) | (40,271) | ||||||||
Income tax | (21,999) | (27,957) | ||||||||
Net result attributable to JM | 34,702 | 61,798 | ||||||||
Total assets (1) | 2,681,390 | 2,717,142 | 5,591,971 | 5,868,688 | 685,118 | 862,144 | 203,891 | 303,897 | 9,162,370 | 9,751,871 |
Total liabilities (1) | 2,168,142 | 2,179,203 | 4,900,039 | 4,710,273 | 694,640 | 845,056 | (793,874) | (211,569) | 6,968,947 | 7,522,963 |
Investments in tangible and intangible assets | 25,111 | 24,208 | 33,652 | 42,062 | 6,561 | 19,698 | 24,554 | 6,721 | 89,878 | 92,689 |
(1) The comparative report is 31th December of 2019 | ||||||||||
Reconciliation between EBIT and operational result | ||||||||||
2020 | 2019 | |||||||||
EBIT | 126,546 | 136,067 | ||||||||
Other operating profits/losses | (4,699) | (1,222) | ||||||||
Operational result | 121,847 | 134,845 |
4. | Operating costs by nature | |||
Mar 2020 | Mar 2019 | |||
Cost of goods sold and materials consumed | (3,664,069) | (3,333,052) | ||
Changes in inventories of finished goods and work in progress | 290 | 15,731 | ||
Net cash discount and interest paid to suppliers | 5,804 | 12,518 | ||
Electronic payment commissions | (9,220) | (8,561) | ||
Other supplementary costs | (1,602) | (1,365) | ||
Supplies and services | (192,196) | (165,196) | ||
Advertising costs | (25,878) | (24,124) | ||
Rents | (5,012) | (5,235) | ||
Staff costs | (449,511) | (376,181) | ||
Depreciation and amortisation of tangibles and intangibles assets | (102,824) | (96,047) | ||
Depreciation of right-of-use assets | (79,827) | (78,179) | ||
Profit/loss with tangible and intangible assets | (1,772) | (965) | ||
Profit/loss with right-of-use assets | 456 | 3 | ||
Transportation costs | (50,764) | (47,186) | ||
Other natures of profit/loss | (17,499) | (4,419) | ||
Total | (4,593,624) | (4,112,258) | ||
4.1. Other operating profits/losses
Operating costs by nature include the following other operating losses and gains considered material, which are excluded from the Group's performance indicators, to assure a better comparability between financial periods.
R&A| 1stQuarter 2020 | 26 |
Notes to the Consolidated Financial Statements |
Mar 2020 | Mar 2019 | |||
Legal contingencies | (64) | - | ||
Losses from organizational restructuring programmes | (3,760) | (863) | ||
Assets write-offs and gains/losses in sale of tangible assets | (849) | (359) | ||
Changes to benefit plans and actuarial assumptions | (26) | - | ||
Total | (4,699) | (1,222) | ||
5. | Net financial costs | |||
Mar 2020 | Mar 2019 | |||
Loans interest expense | (6,721) | (6,451) | ||
Leases interest expense | (32,108) | (32,688) | ||
Interest received | 1,717 | 1,084 | ||
Net foreign exchange | (5,871) | (880) | ||
Net foreign exchange on leases | (21,339) | 67 | ||
Other financial gains and losses | (1,690) | (1,048) | ||
Fair value of financial investments held for trade: | ||||
Derivative instruments (note 8) | 3,419 | (358) | ||
Total | (62,593) | (40,274) | ||
The interest expense heading includes the interest regarding loans measured at amortised cost, as well as interest on cash flow hedging instruments (note 8).
Other financial costs and gains include costs with debt issued by the Group, booked in results through effective interest method.
Exchange differences on Net foreign exchange on leases refer to the exchange rate update, reported on the 31 March 2020, on the euro-denominated lease contracts of the subsidiaries JMP (Biedronka) and JMDiF (Hebe), compared to the amount recognised at the end of the previous year (31 December 2019).
6. | Income tax recognised in the income statement | ||
Mar 2020 | Mar 2019 | ||
Current income tax | |||
Current tax of the year | (38,763) | (38,563) | |
Adjustment to prior year estimation | 100 | 304 | |
(38,663) | (38,259) | ||
Deferred tax | |||
Temporary differences created and reversed | 17,330 | 9,691 | |
Change to the recoverable amount of tax losses and temporary differences from previous years | (929) | 348 | |
16,401 | 10,039 | ||
Other gains/losses related to tax | |||
Impact of changes in estimates for tax litigations | 263 | 263 | |
263 | 263 | ||
Total income tax | (21,999) | (27,957) | |
Income tax expense is calculated based on the weighted average annual income tax rate expected for the year.
In 2020 the income tax rates for Group companies were the same applied in 2019, withtheexceptionof Jerónimo Martins Colombia,wheretheratewas 32% compared to 33% in 2019.
R&A| 1stQuarter 2020 | 27 |
Notes to the Consolidated Financial Statements |
7. Tangible assets, intangible assets, investment property and right-of-use assets
Tangible | Intangible | Investment | Right-of-use | Total | |
assets | assets | property | assets | ||
Net value at 31 December 2019 | 3,969,937 | 794,010 | 8,563 | 2,334,949 | 7,107,459 |
Foreign exchange differences | (215,495) | (28,164) | - | (150,581) | (394,240) |
Increases | 87,592 | 2,286 | - | 28,629 | 118,507 |
Contracts update | - | - | - | 20,850 | 20,850 |
Disposals and write-offs | (2,325) | - | - | - | (2,325) |
Contracts cancellation | - | - | - | (13,226) | (13,226) |
Transfers | (56) | 108 | - | (52) | - |
Depreciation, amortisation and impairment losses | (99,424) | (3,400) | - | (79,827) | (182,651) |
Fair value changes | - | - | (10) | - | (10) |
Net value at 31 March 2020 | 3,740,229 | 764,840 | 8,553 | 2,140,742 | 6,654,364 |
Net value of intangible assets at 31 March 2020 include Goodwill amounted EUR 620,667 thousand.
Due to currency translation adjustment of the assets in the Group's businesses reported in foreign currency, the net amount of tangible and intangible assets and right-of-use assets decreased by EUR 394,240 thousand, which includes a decrease of EUR 20,036 thousand related to Goodwill from businesses in Poland.
8. Derivative financial instruments
Derivatives held for trading
Currency forwards - stock purchase (COP/USD)
Currency forwards - stock purchase (EUR/USD)
Currency forwards - stock purchase (PLN/EUR)
Currency forwards - stock purchase (PLN/USD)
Cash flow hedging derivatives
Interest rate swap (PLN)
Currency forwards - stock purchase (PLN/USD)
Foreign operation investments hedging derivatives
Currency forwards (PLN)
Mar 2020 | Dec 2019 | ||||||||||||
Notional | Assets | Liabilities | Notional | Assets | Liabilities | ||||||||
Current | Non- | Current | Non- | Current | Non- | Current | Non- | ||||||
current | current | current | current | ||||||||||
0,2 million | 18 | - | - | - | - | - | - | - | - | ||||
EUR | |||||||||||||
0,9 million | 7 | - | - | - | 4 million USD | - | - | 43 | - | ||||
USD | |||||||||||||
40 million | 2,606 | - | - | - | 92 million | - | - | 352 | - | ||||
EUR | EUR | ||||||||||||
10,2 million | 228 | - | - | - | 6 million USD | - | - | 20 | - | ||||
USD | |||||||||||||
163 million | - | - | 60 | - | 166 million | - | - | 26 | - | ||||
PLN | PLN | ||||||||||||
3 million USD | 785 | - | - | - | 2 million USD | - | - | 1 | - | ||||
2.202 million | 19,228 | 391 | 219 | - | 649 million | - | - | 2,614 | - | ||||
PLN | PLN | ||||||||||||
Total derivatives held for trading | 2,859 | - | - | - | - | - | 415 | - |
Total hedging derivatives | 20,013 | 391 | 279 | - | - | - | 2,641 | - |
Total assets/liabilities derivatives | 22,872 | 391 | 279 | - | - | - | 3,056 | - |
9. Trade debtors, accrued income and deferred costs
Mar 2020 | Dec 2019 | |||
Non-current | ||||
Other debtors | 65,871 | 65,385 | ||
Collateral deposits associated to financial debt | - | 19,367 | ||
Deferred costs | 2,196 | 2,015 | ||
Total | 68,067 | 86,767 | ||
Current | ||||
Commercial customers | 52,229 | 64,188 | ||
Other debtors | 108,315 | 124,371 | ||
Other taxes receivable | 10,721 | 7,617 | ||
Accrued income and deferred costs | 200,739 | 228,513 | ||
Total | 372,004 | 424,689 | ||
R&A| 1stQuarter 2020 | 28 | |||
Notes to the Consolidated Financial Statements |
The Group held a remunerated deposit in the amount of EUR 19,367 thousand, since 2014, which was being used as collateral for financial loans to the subsidiary Jeronimo Martins Colombia, S.A.S. which matured in January.
10. Cash and cash equivalents
Mar 2020 | Dec 2019 | |
Bank deposits | 470,996 | 541,454 |
Short-term investments | 341,409 | 383,816 |
Cash and cash equivalents | 4,287 | 4,041 |
Total | 816,692 | 929,311 |
-
Dividends
Dividends in the amount of EUR 15,361 thousand were attributed to partners with non-controlling interests in the Group companies, of which EUR 15,190 thousand were paid at 23 April 2020. - Basic and diluted earnings per share
Mar 2020 | Mar 2019 | |
Ordinary shares issued at the beginning of the year | 629,293,220 | 629,293,220 |
Own shares at the beginning of the year | (859,000) | (859,000) |
Weighted average number of ordinary shares | 628,434,220 | 628,434,220 |
Diluted net results of the year attributable to ordinary shares | 34,702 | 61,798 |
Basic and diluted earnings per share - Euros | 0.0552 | 0.0983 |
13. Borrowings
The Group has negotiated commercial paper programs in the total amount of EUR 365,000 thousand, of which EUR 115,000 thousand are committed. The utilizations under these programs are remunerated at the Euribor rate for the respective issue period, plus variable spreads. In the first quarter of the year some emissions were carried out, for short periods of time, to meet specific cash requirements whose use as of 31 March 2020 was of EUR 50,000 thousand.
An extension of a bank overdraft line held by Jeronimo Martins Polska, S.A.and Jeronimo Martins Drogerie i Farmacja Sp. z o.o. was negotiated for an additional two years in the amount of PLN 150,000 thousand.
13.1. Current and non-current loans
Opening | Change acc. | Cash | Foreign | Closing | ||
Mar 2020 | Transfers | exchange | ||||
balance | policy | flows | balance | |||
difference | ||||||
Non-current loans | ||||||
Bank loans | 308,764 | - | - | (60,663) | (26,504) | 221,597 |
Total | 308,764 | - | - | (60,663) | (26,504) | 221,597 |
Current loans | ||||||
Bank overdrafts | 34,099 | - | 18,989 | - | (3,147) | 49,941 |
Bank loans | 389,586 | - | 19,072 | 60,663 | (55,100) | 414,221 |
Total | 423,685 | - | 38,061 | 60,663 | (58,247) | 464,162 |
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Notes to the Consolidated Financial Statements |
Opening | Change acc. | Cash | Foreign | Closing | ||
Dec 2019 | Transfers | exchange | ||||
balance | policy * | flows | balance | |||
difference | ||||||
Non-current loans | ||||||
Bank loans | 277,524 | - | 108,128 | (79,420) | 2,532 | 308,764 |
Financial lease liabilities | 10,866 | (10,866) | - | - | - | - |
Total | 288,390 | (10,866) | 108,128 | (79,420) | 2,532 | 308,764 |
Current loans | ||||||
Bank overdrafts | - | - | 33,782 | - | 317 | 34,099 |
Bank loans | 346,531 | - | (41,973) | 79,420 | 5,608 | 389,586 |
Financial lease liabilities | 4,283 | (4,283) | - | - | - | - |
Total | 350,814 | (4,283) | (8,191) | 79,420 | 5,925 | 423,685 |
- With the adoption of the IFRS16 standard, the amounts were reclassified to "Lease liabilities" (see note 14).
14. Lease liabilities
Mar 2020 | Current | Non Current | Total |
Opening balance | 384,980 | 1,999,293 | 2,384,273 |
Increases (new contracts) | 4,048 | 24,581 | 28,629 |
Payments | (69,328) | (807) | (70,135) |
Transfers | 63,119 | (63,119) | - |
Contracts change/ cancel | 2,315 | 4,853 | 7,168 |
Foreign exchange difference | (21,671) | (112,942) | (134,613) |
Closing balance | 363,463 | 1,851,859 | 2,215,322 |
Dec 2019 | Current | Non Current | Total |
Opening balance | - | - | - |
Change in accounting policy | 370,964 | 2,042,191 | 2,413,155 |
Increases (new contracts) | 30,032 | 208,729 | 238,761 |
Payments | (258,043) | (6,154) | (264,197) |
Transfers | 259,869 | (259,869) | - |
Contracts change/ cancel | (20,953) | (1,236) | (22,189) |
Foreign exchange difference | 3,111 | 15,632 | 18,743 |
Closing balance | 384,980 | 1,999,293 | 2,384,273 |
15. Financial debt
The net consolidated financial debt at the balance sheet date is as follows:
Mar 2020 | Dec 2019 | |
Non-current loans (note 13.1) | 221,597 | 308,764 |
Current loans (note 13.1) | 464,162 | 423,685 |
Financial lease liabilities - non-current(note 14) | 1,851,859 | 1,999,293 |
Financial lease liabilities - current (note 14) | 363,463 | 384,980 |
Derivative financial instruments (note 8) | (22,984) | 3,056 |
Interest on accruals and deferrals | 2,338 | 423 |
Cash and cash equivalents (note 10) | (816,692) | (929,311) |
Collateral deposits associated to financial debt (note 9) | - | (19,367) |
Total | 2,063,743 | 2,171,523 |
R&A| 1stQuarter 2020 | 30 |
Notes to the Consolidated Financial Statements |
16. Provisions and employee benefits
Risks and | Employee | |
contingencies | benefits | |
Balance at 1 January | 27,780 | 69,669 |
Set up, reinforced and transfers | 475 | 1,916 |
Unused and reversed | (542) | (8) |
Foreign exchange difference | (502) | (1,747) |
Used | (285) | (708) |
Balance at 31 March | 26,926 | 69,122 |
17. Trade creditors, accrued costs and deferred income
Mar 2020 | Dec 2019 | |
Non-current | ||
Other commercial creditors | 56 | 51 |
Accrued costs and deferred income | 706 | 713 |
Total | 762 | 764 |
Current | ||
Other commercial creditors | 3,030,862 | 3,320,957 |
Other non-commercial creditors | 254,810 | 334,128 |
Other taxes payables | 98,624 | 120,791 |
Contracts liabilities with customers | 3,903 | 3,628 |
Refunds liabilities to customers | 404 | 788 |
Accrued costs and deferred income | 460,674 | 401,857 |
Total | 3,849,277 | 4,182,149 |
-
Contingencies
There were no changes to the contingencies mentioned in the Report and Accounts for the year ended at 31 December 2019. - Related parties
56.136% of the Company is owned by the Sociedade Francisco Manuel dos Santos, B.V.. No transactions occurred between this Company and any other company of the Group in the first Quarter of 2020, neither were there any amounts payable or receivable between them on 31 March 2020.
Balances and transactions of Group companies with related parties are as follows:
Joint ventures | Other related parties (*) | |||
Mar 2020 | Mar 2019 | Mar 2020 | Mar 2019 | |
Sales and services rendered | - | - | 18 | 32 |
Interest income | 16 | 10 | - | - |
Stocks purchased and services supplied | 1,184 | 854 | 18,503 | 27,344 |
Joint ventures | Other related parties (*) | |||
Mar 2020 | Dec 2019 | Mar 2020 | Dec 2019 | |
Trade debtors, accrued income and deferred costs | 53 | 46 | 9 | 7 |
Trade creditors, accrued costs and deferred income | 762 | 597 | 4,212 | 5,945 |
- Other related parties corresponds to Other financial investments ,entities participated and/or controlled by the major shareholder of Jerónimo Martins and entities owned or controlled by members of the Board of Directors.
R&A| 1stQuarter 2020 | 31 |
Notes to the Consolidated Financial Statements |
All the transactions with these related parties were made under normal market conditions, i.e. the transaction value corresponds to prices that would be applicable between non-related parties.
Outstanding balances between Group companies and related parties, being a result of trade agreements, are settled in cash, and are subject to the same payment terms as those applicable to other agreements celebrated between Group companies and their suppliers.
There are no provisions for doubtful debts and no costs were recognised during the year related with bad debts or doubtful debts with these related parties.
20. Events after the balance sheet date
As mentioned in the Introductory Note, the Groups' performance during the first quarter was influenced by the Covid-19 pandemic. During this subsequent period, the Group has continued monitoring its effects and taking measures to mitigate it. Although the unpredictability of the context does not allow for a valid estimate of the impacts of this crisis, the robustness of the Group's balance sheet and its liquidity reserves guarantee the compliance with the short-term obligations and the continuity of its operations.
Lisbon, 12 May 2020
The Certified Accountant | The Board of Directors |
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Notes to the Consolidated Financial Statements |
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Jeronimo Martins SGPS SA published this content on 26 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 May 2020 07:57:00 UTC