GROWTH
A STRONG COMMITMENT
Black Swan Conference
1
th
17 November, 2010
INDEX
0. GROUP STRUCTURE
1. EVOLUTION
2. PILLARS OF JM’s STRATEGY
3. JM’s STRATEGIC PATHS
4. OUTLOOK
2
0. GROUP STRUCTURE
Jerónimo Martins, SGPS S.A.
Market Cap. = Euro 7.0 bn*
Sales 09FY= Euro 7,317 mn
EBITDA 09FY = Euro 528 mn (7.2%)
Food Distribution
51%
Retail
Portugal
100%
Wholesale
Portugal
100%
Retail
Poland
% in the Group 09: % in the Group 09: % in the Group 09:
37.0% Sales
9.4% Sales
50.9% Sales
33.3% EBITDA
7.8% EBITDA
51.4% EBITDA
60.0% Inv. Cap.
5.8% Inv. Cap.
25.1% Inv. Cap.
Pingo Doce
Recheio
Biedronka
(339 Supers)
(9 Hypers)
Cash & Carry
Discount
(38 stores)
(1,559 stores)
Inv. Capital 09 YE = Euro 1,758 mn
Manufacturing
Services
Portugal
Portugal
45%
Unilever
Jerónimo Martins
100% JMD (Agency and
Marketing Services)
(Fima/Lever/Olá)
100% JM Restauração
Galloworldwide
51% Hussel
(Specialized Retail –
% in the Group 09:
3.2% Sales
6.9% EBITDA
(Specialized Retail)
Sweets and
Chocolates)
% in the Group 09:
1.2% Sales
0.3% EBITDA
3
* as at 10 November, 2010
 Leader in the supermarket segment in Portugal
(c.19% market share in Total Retail Market)
 348 Stores; Average selling area c. 1,200 sqm
 Assortment c. 6 thousand SKUs
 Prime proximity locations
 EDLP
 Non food c.4% of sales
 Key differentiating factors
The best operator of perishables in the
Portuguese market (60% sales)
Private brands c.40% of total sales (excl.
perishables)
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0. GROUP STRUCTURE
Jerónimo Martins, SGPS S.A.
Market Cap. = Euro 7.0 bn*
Sales 09FY= Euro 7,317 mn
EBITDA 09FY = Euro 528 mn (7.2%)
Food Distribution
51%
Retail
Portugal
100%
Wholesale
Portugal
100%
Retail
Poland
% in the Group 09: % in the Group 09: % in the Group 09:
37.0% Sales
9.4% Sales
50.9% Sales
33.3% EBITDA
7.8% EBITDA
51.4% EBITDA
60.0% Inv. Cap.
5.8% Inv. Cap.
25.1% Inv. Cap.
Pingo Doce
Recheio
Biedronka
(339 Supers)
(9 Hypers)
Cash & Carry
Discount
(38 stores)
(1,559 stores)
Inv. Capital 09 YE = Euro 1,758 mn
Manufacturing
Services
Portugal
Portugal
45%
Unilever
Jerónimo Martins
100% JMD (Agency and
Marketing Services)
(Fima/Lever/Olá)
100% JM Restauração
Galloworldwide
51% Hussel
(Specialized Retail –
% in the Group 09:
3.2% Sales
6.9% EBITDA
(Specialized Retail)
Sweets and
Chocolates)
% in the Group 09:
1.2% Sales
0.3% EBITDA
5
* as at 10 November, 2010
 Leader in the C&C market – c.34% market share
 38 stores
 Average selling area c. 3,300 sqm
 Serving HoReCa (42% sales) and Traditional Retailers (40% sales)
 Private brands c.16% of sales
 Perishables 14%
 Non Food 7%
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0. GROUP STRUCTURE
Jerónimo Martins, SGPS S.A.
Market Cap. = Euro 7.0 bn*
Sales 09FY= Euro 7,317 mn
EBITDA 09FY = Euro 528 mn (7.2%)
Food Distribution
51%
Retail
Portugal
100%
Wholesale
Portugal
100%
Retail
Poland
% in the Group 09: % in the Group 09: % in the Group 09:
37.0% Sales
9.4% Sales
50.9% Sales
33.3% EBITDA
7.8% EBITDA
51.4% EBITDA
60.0% Inv. Cap.
5.8% Inv. Cap.
25.1% Inv. Cap.
Pingo Doce
Recheio
Biedronka
(339 Supers)
(9 Hypers)
Cash & Carry
Discount
(38 stores)
(1,559 stores)
Inv. Capital 09 YE = Euro 1,758 mn
Manufacturing
Services
Portugal
Portugal
45%
Unilever
Jerónimo Martins
100% JMD (Agency and
Marketing Services)
(Fima/Lever/Olá)
100% JM Restauração
Galloworldwide
51% Hussel
(Specialized Retail –
% in the Group 09:
3.2% Sales
6.9% EBITDA
(Specialized Retail)
Sweets and
Chocolates)
% in the Group 09:
1.2% Sales
0.3% EBITDA
7
* as at 10 November, 2010
 Leader in its segment in Poland – c. 10% of market share
 1,559 stores
 Average selling area c. 550 sqm
 Proximity locations
 EDLP
 Exclusive brands representing c.57% of sales
 Non food c.6% of sales
 Perishables c.15% sales
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1. EVOLUTION
Three years ago …
In the last two years (‘08-’09) …
The Group presented its decision to
increase focus on cash flow
protection with a list of priorities:
The Group was focused on the
established priorities:
c.Euro700 mn Capex in Biedronka
• Poland – the growth engine - our
priority regarding capital allocation
421 new stores and 2 new DCs
Sales CAGR c.34% (in PLN)
• Optimization of all Company’s
praxis – operating (costs & wc) and
financing
Inventories from 21 to 17 days of
sales
Gearing currently below 50%
• Reinforcing Balance Sheet
Net Debt/EBITDA currently below
1x
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1. EVOLUTION
Today…
Group’s size reflects a different
reality but also an increased capacity
to execute and deliver:
The Group is financially stronger:
• Leadership in Poland and Portugal
• Capex program fully financed
through cash flow generation
• Sales in excess of Euro8 bn
• EBITDA in excess of Euro600 mn
• 1,986 retail stores, 1.5 mn sqm of
selling area (*)
• More than 57 thousand employees
• Dividend policy (40%-50% of
payout) maintained
• Debt and gearing at healthy levels
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(*) as of November 2010
1. EVOLUTION
Today…
JM reinforces its Commitment to Growth
Speeding up growth in Poland
Analysing new geographies
JM is well prepared to new increases in size
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1. EVOLUTION
Ready to Grow
Sales (Euro mn)
Group’s LFL Sales Growth
Group’s Total Retail Stores
11.8% 11.7%
8.000
6.000
1,752 1,859
7.4%
1,060
4.000
1,180
1,349
4.4%
3.7%
2.000
0
'05
'06
'07
'08
'05
'09
EBITDA (Euro mn)
'06
'07
'08
Net Earnings (Euro mn)
600
100
200
'05
'06
'07
'08
'09
'07
'08
'09
1.000
200
0
'06
Net Debt (Euro mn) & Gearing
400
0
'05
'09
100%
800
80%
600
60%
400
40%
200
20%
0
'05
'06
'07
'08
'09
12
'05
'06
'07
'08
'09
0%
2. PILLARS OF JM’s STRATEGY
JERÓNIMO MARTINS’ DNA
Strong Corporate
Culture
A Team with…
 Strong Track Record
Know-how
Vocation for Growth
Value Food Retailer
Targeting profitability
Mass Market presence
Requiring…
 Strong Balance
Sheet
Requiring…
 Price
 Cost Efficiency
Seniority
Clear and shared
vision about
Strategic Paths
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2. PILLARS OF JM’s STRATEGY
OUR APPROACH TO VALUE FOOD RETAIL
Strong Value Approach
Value and Mass Market define our
presence in the market:
1. Food Solutions Provider
2. Price / Costs Focus (LCO)
3. Proximity / Convenience Formats
And marked by strong differentiation:
4. Fresh Products
5. Strong Private Brand
6. Quality: Products, Packaging, Store
Environment and Private Brand
Leadership Dynamics
The success of our formats is
leveraged on leadership…
1. Trust / Awareness / Reliability
2. Scale Matters
- Sourcing, Costs, Presence
- Capacity to create market
needs: our clients can expect
more and pay less
3. Total Attention to consumer’s
feedback and business details
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3. JM’s STRATEGIC PATHS
Strategic Paths - Our Priorities
1 Maximize the Polish
Opportunity
2 Consolidate the
Portuguese Positioning
3
Extract the maximum
potential from Group’s
leading positioning in
Poland:
Consolidate leadership
through:
Leverage on our
strengths to:
Progressive
acceleration of growth
in Biedronka
Full coverage of the
proximity market
Search for new growth
opportunities
Optimising cash flow
generation and returns
Define the appropriate
entry point and entry
strategy
Testing new
opportunities
Pursue New
Growth
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3. JM’s STRATEGIC PATHS
1 Maximize the Polish Opportunity
Accelerating Biedronka Expansion
Given Group’s current financial strength and our perception of the Polish retail
market, we see as one key strategic target to accelerate the expansion of
Biedronka, not compromising the quality of the locations or the expected returns
By the end of 2013 with more than 2,300 stores and with 14 Regions, Biedronka
should already support the opening of 280-300 new stores (c.270 net additions)
By progressively strengthening our regional expansion capacity with an
increased number on Regions we will advance as fast as we can towards
our medium term vision:
3,000 Biedronka stores in Poland
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3. JM’s STRATEGIC PATHS
2 Consolidate the Portuguese Positioning
JM’s Distribution Formats in Portugal - General Overview
 Environment expected to get tougher following the 2011 Public Budget
approved at the beginning of November
 Capex limited to revamping program and openings in key proximity
locations
 Group formats expected to continue to show strong resilience, benefiting
from business models’ awareness and leadership
 Priority continues to be the strengthening of market share through LFL
sales growth
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3. JM’s STRATEGIC PATHS
3 Pursue New Growth
Know-how and execution: drivers for new growth Avenues
Corporate Approach
Strong Commitment to identify new sources of growth
Defining the Market
Sizable + Economic and institutional framework + Basic suppliers
infrastructures
Defining the Format
Food + Price Competitive + Mass Market + Local Approach
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4. OUTLOOK
Group Outlook 2011-2013
In Poland, the market potential together with Biedronka’s strength reinforces our
focus to expand the business as much as we can
We remain cautious about the Portuguese economy but confident that our
business models will outperform their sectors
Double digit annual sales growth over the period
EBITDA expected to grow at least in line with sales
Group Capex for the 3Y period c.Euro1.7 bn, more than 3/4 to be invested in
Poland
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4. OUTLOOK
Business Areas Outlook 2011-2013
Poland
C.700 stores will be added to the network in the 3Y period. Around 7% of the network to be
remodelled every year
Improvements in the basket and maturity of store openings should support a healthy LFL,
expected at high single digit during the period
EBITDA margin expected, at least stable over the period. Improvements in scale expected to
support price leadership and a higher expansion pace
Portugal
 Around 5 new Pingo Doce stores to be opened per year
 4 Recheio stores to be opened in the 3Y period
LFLs are expected to clearly keep outperforming the market over the period supported by
investment in key differentiation features
EBITDA margin should remain stable as consumption environment is expected to remain
under pressure
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OUR MIND SET:
FROM SUCCESS TO SIGNIFICANCE
Black Swan Conference
21
th
17 November, 2010
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 presentation or to notify a reader in the event that any
matter stated herein changes or becomes inaccurate.
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