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

  1. - 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

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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).

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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

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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

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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.

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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.

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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

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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

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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.

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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

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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.

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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.

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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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25

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.

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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.

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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

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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

  1. 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.
  2. 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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29

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

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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

  1. Contingencies
    There were no changes to the contingencies mentioned in the Report and Accounts for the year ended at 31 December 2019.
  2. 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

  1. 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.

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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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32

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