Jeronimo Martins, SGPS S.A. Unsponsored ADR

The Group reported first-half 2026 sales of EUR 18.3 billion, up 5.1% year over year, or 4.5% at constant exchange rates. EBITDA rose 7.6% to EUR 1.2 billion, with EBITDA margin at 6.8%, up 16 basis points from 6.6% a year ago. Excluding IFRS 16, net cash was EUR 11 million after EUR 409 million paid to shareholders, while cash flow before dividends was negative EUR 332 million and CapEx was EUR 412 million. For the banners, Biedronka sales were EUR 12.6 billion (+1.7%), Hebe EUR 312 million (+5.0%), Pingo Doce EUR 2.7 billion (+5.3%), Recheio EUR 673 million (+2.5%), and Ara EUR 2.0 billion (+30.2% in euros, +21.1% in local currency). Management said it does not anticipate any material improvement in market conditions in H2; the 2026 investment program remains capped at around EUR 1.2 billion, focused on growth, store modernization and logistics.

Ana Virgínia said the first half was harder than expected because of strong food-price pressure, fuel-related costs, cautious consumers and ongoing competition, but emphasized that all banners protected price competitiveness and executed efficiently. Her tone was cautious but confident: she repeatedly said the company remains focused on preserving consumer preference, price leadership and efficiency rather than assuming market conditions will improve. She also stressed that every banner’s sales and margin progress reflected stronger volumes, better mix and disciplined execution.

Ana Virgínia highlighted that EBITDA outpaced sales growth, rising 7.6% to EUR 1.2 billion, with margin up to 6.8% from 6.6%. She noted higher financial costs tied mainly to the expansion program and capitalized lease interest, and said other profit and loss items included the EUR 40 million foundation contribution, store-remodel write-offs and legal provisions. On cash, she said H1 free cash flow before dividends was negative EUR 332 million, affected by Biedronka basket deflation and trade payables, while the balance sheet still ended with EUR 11 million net cash excluding IFRS 16 after EUR 412 million of investment and EUR 409 million of dividends. She also said the 2026 capex budget is around EUR 1.2 billion.

Analysts focused heavily on Poland: when food inflation might turn positive, how long Biedronka deflation could last, whether margins should be reinvested, and how much of the volume growth reflected market share versus mix. Management said it does not yet see an inflection in the main categories or in supplier pricing, and would not rule out further pressure in Q3; it expects the situation may only get easier in Q4, but gave no firm turning point. On margins, management said the Q2 improvement was mainly from assortment mix and operational efficiency, but acknowledged some of those tailwinds may not repeat fully in H2 and that Biedronka may need to spend some margin to stay price-leading. On share, management said GfK data through May showed Biedronka broadly flat share, with June slightly better, implying a small gain for H1 on a value basis.