Jeronimo Martins, SGPS S.A. · EURONEXT:JMT
Jeronimo Martins, SGPS — Jerónimo Martins — FY2006 Earnings Presentation
36 slides from Jeronimo Martins, SGPS's earnings presentation, March 2007
Slide 1: 2006 FY Results: Focus on growth and returns
2006 FY Results Focus on growth and returns 1
Slide 2: Forward-looking statements disclaimer
This presentation includes forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of factors. Jerónimo Martins assumes no obligation to update the information contained in this present
Slide 3: Group Structure
Group Structure (as at Jan. 07) Jerónimo Martins, SGPS Food Distribution Manufacturing Services Portugal Portugal 51% 100% 100% 45% Retail Wholesale Retail 100% JMD (Agency and Marketing Portugal Portugal Poland Services) Unilever Pingo Doce Jerónimo Martins 100% JM Supermarkets Recheio Biedronka Re
Slide 4: Net Sales increased 15.1%
2006 FY Results Net Sales increased 15.1% (+13.8% ex-currency) Net Sales (Euro Million) +15.1% Consolidated Sales 4,407 breakdown FY2006 3,828 Manuf. & Serv. Retail Port. Biedronka 6% 38% +11.0% +27.3% 39% 1,715 1,707 1,538 1,348 +4.1% 578 602 +5.7% +5.6% 310 328 C&C 105 111 Madeira 3% 14% Retail Ma
Slide 5: EBITDA reached Euro 318.8 million
2006 FY Results EBITDA reached Euro 318.8 million (+3.4% on 2005) EBITDA Mg FY 2006 Euro Million 45.9 318.8 308.3 90.1 JMR 8.2% C&C 6.0% 36.1 6.1 140.6 Madeira 5.5% 7.2% 8.1% Poland 5.3% Manuf. & Serv. 14.2% Retail C&C Madeira Poland Others JM JM JM 7.2% Portugal Group Group 06 05 5 5
Slide 6: Profit & Loss Account
2006 FY Results Profit & Loss Account 2006 2005 ∆% Eur Mio. % Eur Mio. % Net Sales & Services 4,407 3,828 15.1% Gross Margin 1,043 23.7% 943 24.6% 10.6% Operating Costs -722 -16.4% -633 -16.5% 14.0% Provisions -3 -0.1% -1 0.0% 116.6% EBITDA 319 7.2% 308 8.1% 3.4% EBIT 212 4.8% 209 5.4% 1.5% Net Fina
Slide 7: Balance Sheet
2006 FY Results Balance Sheet Eur Mio. 2006 2005 Net Goodwill 399 398 Net Fixed Assets 1,364 1,128 Net Working Capital -667 -547 Others 177 189 Invested Capital 1,273 1,168 Net Debt 506 497 Minority Interests 275 251 Share Capital 629 629 Retained Earnings -137 -209 Shareholders Funds 767 671 Gearin
Slide 8: Pingo Doce: Outstanding sales performance
2006 FY Results Pingo Doce Outstanding sales performance • Solid LFL sales evolution (+11.2% growth in the year) • 10 new stores (+8.1% new space) • 25 stores revamped • Sales of private brands grew by 38% 13,5% 13,0% 11,1% 6,9% 5,7% LFL sales growth: 4,8% 4,4% quarterly evolution 3,5% 1Q05 2Q05 3Q0
Slide 9: Feira Nova: Strong expansion of the compact format
2006 FY Results Feira Nova Strong expansion of the compact format • Healthy LFL sales growth in compacts: +2.1% in 2006 • 9 new compact hypermarkets (+14.9% new space of Feira Nova) • Perishables as one key axis (+36% increase in compacts) • Market share increasing (+20bp YoY according to APED* – De
Slide 10: JMR: Taking the opportunity to grow
2006 FY Results JMR Taking the opportunity to grow • Store sales grew 11.0% in 2006 • EBITDA margin at 8.2% of sales • Continuous improvement of competitive position (c.2.5% deflation in Pingo Doce) 9 Opening of 9 stores in Q4 (impact on cost structure) 9 Strong revamping program (stores closed for
Slide 11: Recheio: New business direction starts to show results
2006 FY Results Recheio New business direction starts to show results • Acceleration of sales growth in the HoReCa segment in 2006 (+5.7% LFLs) • ‘The Food Specialist’: 9 focus on perishables (+17% sales growth) 9 food safety (HACCP Certification) • Strong growth (+25%) in private brands • Market sh
Slide 12: Biedronka: Solid contribution to Group's earnings
2006 FY Results Biedronka Solid contribution to Group’s earnings • LFL growth outperforming the Polish food retail sector: +11.8% • 116 new stores and 16 closures (+14.8% net new space) • Cash EBITDA growing faster than sales (+31.8%) • New DC began to operate in October 12th 15,9% • EBITDA margin i
Slide 13: Manufacturing: Enlarging leadership
2006 FY Results Manufacturing Enlarging leadership • Sales grew 5.0% in 2006 to Euro 253 million, even after the disposal of frozen food business • Flexibility in prices drove volumes growth allowed to improve market shares in key categories • Strong investments in marketing campaigns • High pace of
Slide 14: Group Outlook 07
Group Outlook 07 14
Slide 15: Outlook 2007: Key Issues
Outlook 2007 Key Issues Jerónimo Martins’ Group Towards a new stage of earnings growth • Improve competitive positioning • Double digit sales growth (growing at a higher pace than net earnings) • Sustainability of cash EBITDA will also be a key target • Group’s margin reflecting heavy expansion plan
Slide 16: Outlook 2007: Pingo Doce & Feira Nova
Outlook 2007 Key Issues Pingo Doce & Feira Nova Enhancing Differentiation Maintain Price Competitiveness + Private Brands + Cost Control Deflation on Average Basket Perishables Positive LFL sales + Organic growth Improve efficiency of invested capital (Capital Turnover) Bigger focus on margins as sa
Slide 17: Outlook 2007: Pingo Doce & Feira Nova growth
Outlook 2007 Key Issues Pingo Doce & Feira Nova Taking the opportunity to grow Pingo Doce 9 Minimum of 20 new stores (mainly to be opened in the 1H07) 9 At least 25 stores revamped 9 Expected sound LFL growth (c.5%) 9 Focus on sales growth and market share gains Feira Nova 9 Minimum of 7-8 new store
Slide 18: Outlook 2007: Recheio segmentation
Outlook 2007 Key Issues Recheio Segmentation - Increasing HoReCa weight • Market share gains in both segments • Developing Food Service • Working on market consolidation FY target more weight on HoReCa than on Traditional Segment sales 18 18
Slide 19: Outlook 2007: Biedronka reinforcing leadership
Outlook 2007 Key Issues Biedronka Reinforcing Leadership • Minimum of 120 new stores • Expected LFL sales growth (a minimum of 5%) • Fine tuning business model EBITDA mg to increase slightly 9 Developing more Non Food and Perishables 9 Increasing Exclusive Brands on total sales • Value creation thro
Slide 20: Outlook 2007: Manufacturing solid leadership
Outlook 2007 Key Issues Manufacturing Solid Leadership • Strong promotional support of key brands • Margins and Returns maintained • Solid contribution to Group earnings 20 20
Slide 21: Outlook 2007: Dividend proposal and AGM
Outlook 2007 • The Board of Directors of Jerónimo Martins SGPS, SA will propose in its next AGM (to be held on 30th March 2007): 9 Distribution of a gross dividend of Euro 0.44 per share (+4.8% versus previous year) 9 Split the unitary value of its shares from 5 to 1 euro each 9 Change in by-laws fo
Slide 22: Group Outlook 08-09
Group Outlook 08-09 22
Slide 23: Outlook 08-09: Key Principles
Outlook 08-09 Key Principles • Remain focused on sales growth and client needs • Consolidating market positions to deliver better returns • Look for consolidation in those businesses where opportunities arise • New geographic areas are under analysis for our best formats • Maximum focus on increasin
Slide 24: Outlook 08-09: Group Guidance
Outlook 08-09 Group Guidance • Target of Euro 6 billion sales by 2009 maintained • Double digit sales growth (ex-currency) in the period • Solid evolution of earnings following sales • Capex program of c.Euro 700 million over 2008-2009 • Dividend pay-out ratio in the 40-50% range 24 24
Slide 25: Appendix
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Slide 26: Group Structure
Group Structure n io p at Sales (Million euro) EBITDA Nr. Sales/ LFL hi Sales Area id rs ol Margin Stores (sqm ) sqm * ∆% ne ns Ow Co 06 05 ∆% 06 05 06 06 06 06/05 F Supermarkets (Leader) 51% I 967.6 853.4 13.4% 189 161,279 6.4 11.2% O O 8.2% 9.7% D Portugal Hypermarkets (3rd Player) 51% I 739.7 685
Slide 27: 2006 in Figures
2006 in Figures (Euro million) JM Sales = 4,407 JM EBITDA = 319 JM Inv. Capital = 1,274 Biedronka 178 Biedronka 90 Biedronka 1,715 Pingo Doce 968 Retail Portugal 141 Retail Portugal 819 Feira Nova 740 Recheio 36 Recheio 602 Recheio 115 Manufacturing 45 Manufacturing 253 Manuf. & Others 161 Others Ot
Slide 28: Consolidated Sales
2006 FY Results Consolidated Sales 2006 2005 ∆% Eur Mio. % total Eur Mio. % total Pln Euro Retail Mainland 1,864 42.3% 1,670 43.6% n.a. 11.6% Cash & Carry Mainland 602 13.7% 578 15.1% n.a. 4.1% Madeira 111 2.5% 105 2.7% n.a. 5.7% Poland - Biedronka 1,715 38.9% 1,348 35.2% 23.4% 27.3% Manufacturing 2
Slide 29: Capex
2006 FY Results Capex Remodellling Expansion Total & Others Distribution in Portugal 141.8 66.2 208.0 Distribution in Poland 102.6 29.9 132.5 Manufacturing & Others 2.3 3.3 5.6 Total Capex 246.7 99.4 346.1 29 29
Slide 30: Pingo Doce Supermarkets – The Format
Group Profile Pingo Doce Supermarkets – The Format Price + Convenience + Perishables + Private Brand • Leader in the supermarket segment in Portugal • Network of 189 stores by December 06 • Assortment of 5,000 SKU's • Private brands +33% of total sales (excl. perishables) • Prime proximity locations
Slide 31: Feira Nova Hypermarkets – The Format
Group Profile Feira Nova Hypermarkets – The Format Price + Assortment + Perishables • A leading hypermarket operator in Portugal • Network of 9 hypers + 29 compact-hypers by December 2006 • Average sales area: 9 Hypers – 9,200 sq.m. 9 Compact-Hypers – 2,300 sq.m. • Full assortment (one-stop-shopping
Slide 32: Recheio Cash&Carry – The Format
Group Profile Recheio Cash&Carry – The Format • Leader in the market • Network of 33 stores by December 2006 • Two food service platforms • Average sales area = 3,300 sq.m. • Two different clients: 9 Traditional Retailers – sales under pressure, stores closing 9 HoReCa – high potential, without spec
Slide 33: Biedronka Discount – The Format
Group Profile Biedronka Discount – The Format Price Leadership + Convenience + Exclusive Brands • Leader in its segment in Poland • Network of 905 stores by December 2006 • Average sales area = 500 sq.m. • Proximity locations • EDLP • Assortment of 815 SKU's • Exclusive brands representing 60% of sa
Slide 34: Biedronka: Years of Strong Growth
Group Profile Biedronka 6 Years of Strong Growth 421 Customers Evolution 360 No. Stores 905 320 805 284 725 245 638 672 621 200 2001 2002 2003 2004 2005 2006 2001 2002 2003 2004 2005 2006 26,2% 6.674,7 LFL sales growth (%) Net Sales '000 PLN 5.412,3 4.771,1 17,1% 4.061,9 3.561,8 11,7% 11,8% 2.946,2
Slide 35: Manufacturing: A Solid Joint Venture
Group Profile Manufacturing A Solid Joint Venture • A JV with more than 50 years • It represents 6% of consolidated sales and 14% of consolidated EBITDA • Leading brands in their markets • Adjusting our strategy to a new competitive environment (private brand pre-eminence and a more price oriented c
Slide 36: www.jeronimomartins.com
www.jeronimomartins.com 36