Good day, welcome to Jerónimo Martins first half results 2023 conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Miss Ana Luísa Virgínia, Chief Financial Officer of Jerónimo Martins Group. Please go ahead, madam. Good morning, ladies and gentlemen, and thank you for joining this call to present first half 2023 results. As you are already familiar with, in our corporate website, you can find the results release, a slide presentation and a fact sheet. As we anticipated, consumer demand remained very challenging throughout the first six months of 2023, with persistent pressure on real household disposable income. Under current circumstances, with food inflation falling and cost inflation impacting our companies, continuous investment in price and in promotions is even more critical to drive volumes and protect the profitability of our businesses. Our banners maintained an unwavering focus on price competitiveness. This strategic focus, combined with robust value proposition, boosted sales with all banners delivering positive volumes in Q2. In the six months of periods, group sales increased by 22.1% to reach EUR 14.5 billion. At constant exchange rates, group sales grew by 23.3%. Our commitment to price competitiveness and top-line performance drove the EBITDA to grow by 18.1% to reach EUR 1 billion. EBITDA margin declined 24 basis points to 6.9%. Cash flow generation was EUR -127 million, reflecting higher CapEx payments and some effects over the working capital in the period. Our balance sheet remained very robust, as we think it should be. By the end of June, after the dividend payment of EUR 345.6 million in May, our net cash position, excluding capitalized operating leases, was at EUR 721 million. Despite the very challenging operating environment demanding a relentless work from the teams, our companies didn't fall short of making progress on our responsibility agenda. On this front, I would like to highlight some key developments in the period. We maintained a strong focus on the recognition of the work of our operational teams. In H1 2023, the group paid more than EUR 120 million in performance and extraordinary bonuses to the teams, an increase of 30% versus the same period in the prior year. Surprisingly, food safety ranks high in our priorities, and it is of great importance that our Laboratory of Molecular Biology is now certified as meeting general competence requirements for carrying out DNA tests on food products and animal feeds. Regarding the environment, we made important progress in relevant climate change-related areas: renewable energy, circular economy, and deforestation. I would now like to go into a bit more detail on the performance. Food inflation remained a key element of the operating context. We entered 2023 with high food inflation that gradually fell in Q2 in the three countries where we operate. Although at different levels, consumer confidence remains fragile across the board. In Poland, consumer price sensitiveness has increased, and price gain importance when choosing where to buy. In Portugal, trading down trends are ever more noticed with impact on the food basket. Finally, Colombia is facing an increasingly impoverished population and is where consumer demand contraction is even more evident, considering the very difficult circumstances the families have to cope with, as a result of the cumulative impacts of a severe pandemic crisis and extremely high and long-lasting food inflation in basic products. At a group level, the first half P&L reflects a sales-driven performance. Following significant price investments and impacted by strong trading down in Portugal and Colombia, gross margin declined 60 basis points in the period. Nonetheless, our steady commitment to price competitiveness and sales growth limited the pressure from cost inflation, driving EBITDA to perform solidly, reaching, for the first time ever in six months period, EUR 1 billion. Just a couple of highlights on Q2 P&L. First, on other profits and losses, which incorporates, among other items, indemnities, write-offs, and an increase in provisions for legal contingencies. Second, on financials in Q2 2023, that include a positive impact related to the capitalization of euro-denominated leases in Poland, due to the zloty appreciation from March to June. In Q2 2022, this effect on the P&L was negative. Cash flow was EUR -127 million. Following the execution of our investment program, there was an increase in CapEx payments. The change in working capital reflected the very strong 2022 year-end position in light of the outstanding Christmas season and other effects, including the implementation of the temporary zero VAT measure in Portugal, which resulted in a reduction of the value of trade payables at the end of the period. Our balance sheet remains solid, with a net cash position by the end of June of EUR 721 million, excluding capitalized operating leases. This value already includes the payment in May of dividends in the amount of EUR 346 million. All companies are executing their respective investment programs for expansion and remodeling. Most relevant numbers in this half year are coming from Biedronka, with 50 openings and 164 remodelings, Ara, with 110 openings, and Pingo Doce, with 20 remodelings. All set to deliver on the targets for the year. I will now guide you through sales performance in a bit more detail. All banners maintained a good sales momentum throughout the six months period. Biedronka and Ara's contribution are worth highlighting. Our Polish banner was unstoppable in its effort to provide consumers with unique saving opportunities, and remarkably added EUR 2 billion to its sales in six months. On its turn, our Colombian banner further reinforced its position in the market and added more than EUR 400 million to the group's top line at constant exchange rates. With a solid delivery from all businesses, consolidated like-for-like reached 18% in H1. For Biedronka, in a context of decreasing food inflation, volume growth became even more of a priority. The banner invested in price and promotions, having widened the gap between its own basket inflation and the country's food inflation. The consistent implementation of this strategy further strengthened Biedronka market position and drove volume growth across the period. Sales grew 24% in local currency, and market share in the first five months of the year increased by 1.7 percentage points, according to GfK on fast-moving consumer goods. This was an outstanding performance in a context of contraction in private consumption and declining volumes in the Polish food retail market. Hebe maintained a good sales delivery across the six months' period, with top line growing at 27.5%. The online operations posted a growth of 45%, to represent around 17% of the total sales. In Portugal, the trading down in food was a direct consequence of the pressure over household disposable income. Following an aggressive price policy, and with the contribution of its meal solutions area, Pingo Doce delivered a solid sales growth of 9.2%, with like-for-like standing at 8.2%, excluding fuel. By steadily executing its refurbishing program, the banner is further reinforcing its value proposition in key competitive areas, such as fresh and meal solutions. Recheio's value proposition is in good shape, and the company is benefiting from a dynamic sector. The banner delivered strong sales growth of 23.2%, including a 21.2% like-for-like. The slowdown of like-for-like in Q2 reflects the drop in inflation and, most of all, the tougher comps. From Q2 onwards, the comps will no longer be affected by the impact of the pandemic restrictions. In Colombia, the consumer is showing the distressed effects of long-lasting pressure over disposable income, with families going through very tough times. Ara has been consistently investing in price leadership, and on the occasion of its 10th anniversary in Colombia, our banner took the opportunity to make a firm statement on price, having initiated in May a disrupting savings campaign. The consumers reacted promptly with a meaningful increase in traffic and volumes in the stores. In H1, Ara grew sales in local currency by 52.4%, with like-for-like standing at 18.1%. In EUR, sales increased by 31.6% to reach EUR 1.1 billion. In Q2, sales in local currency grew 53.9%, with like-for-like at 17.4%. The banner remains fully committed to executing its expansion program and opened 110 stores over the period. Driven by strong business models and a clear and consistent focus on price competitiveness, group EBITDA grew strongly in the first six months of the year. The group gross margin was pressured following price investments and strong trading down impact in Portugal and Colombia. The strong sales delivery limited the pressure of cost inflation, particularly visible in labor on the P&L. Group EBITDA margin fell 24 basis points to 6.9%. Biedronka's EBITDA margin was 24 basis points down in the six months period. The reinforced leadership in price continued to drive growth, containing the impact of inflation in labor costs registered in the period. In Portugal, EBITDA margin at Pingo Doce was very slightly down on the previous year, with good sales performance, diluting the impact of higher costs and trading down effects on the margin mix. Recheio's EBITDA margin continued to steadily improve from the squeezing caused by the pandemic crisis. At Hebe, margin increased from 6.3% to 6.8% following the good sales delivery, and improved operational leverage more than offsets the costs resulting from launching and developing its international e-commerce operation. EBIT margin was down from 3.1% to 1.7%, affected by the massive price investment campaign executed in Q2, by the strong trading down effect, and the large number of stores with low sales maturity. Just to wrap up, all banners were able to maintain strong sales delivery across the 6-month period. The firm's focus on price competitiveness drove a very good performance despite the challenging consumer context. We will continue to experience falling food inflation in the three markets, and this will be reflected in the growth rates going forward. Against this background, volume growth is even more important to protect the profitability of the businesses. We acknowledge that the outlook is still uncertain, and that the base of comparison will challenge us even more in H1. Nevertheless, the six months performance attests to the quality and competitive strength of our models, and makes us confident that we will continue delivering while also executing our investment program and advancing our corporate responsibility agenda. Supported by the strength of our financial, our strategy remains unchanged. In the current context, price competitiveness will continue to be essential to drive sales in the short term and to strengthen our position in the different markets for the longer run. Thank you for your attention. Operator, I am now ready to take questions. Thank you so much. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by, we will compile the Q&A roster. This will take a few moments. We're going to take our first question. The question comes from line of William Woods from Bernstein. Your line is open, please ask your question. Hi, good morning. Thanks for taking the question. I've got three, if that's okay. The first one is on the Polish EBITDA margin compression. Could you just comment, is this mainly driven by gross margin compression because of the price investments, or is there anything else going on there? The second one is on CapEx at Ara in Colombia. Obviously, CapEx has increased significantly into H1 2023, and if we look at FY 2022 CapEx versus FY 2023 run rate CapEx, it looks like you're spending a lot more CapEx per store. Why is this? Is it related to investment in the distribution network, or the cost per store increasing a lot? The final one is, just could you give any more color on how you see inflation progressing into H2? Do you expect a rapid reset in H2 or a much more slow reset? Thank you. Hi, William. Good morning. On the Polish EBITDA margins, it is really coming from the price investments we are doing comes mainly from gross margins. We are being able to, through, it's not that the costs are not increasing, but we are being able to dilute it through our growth in sales. As for the CapEx of Ara, in fact, it's really in line with what we were expecting for the year. It's true that in 2022 there was a slight increase in the CapEx due to the inflation also. At this stage, there is no change. Of course, we are not just investing in stores, we are also investing in our logistics. It is really in line with what we were expecting in our CapEx program. As for inflation going forward, unfortunately, I cannot give you much more information than the one that we provided in our release. We expect really for inflation to slow down, at least food inflation. We know that we are also contributing to this, because all our banners, at this stage, are having internal food inflation below food inflation. Being important players in the market, they are really contributing to us also decreasing food inflation. That's why we think that the compensation through the volumes is important, of course. We also know that if inflation stays very high, and particularly on foods, which is essential in countries like the ones where we operate, where there is a vast majority of the population that has still low income, it's really crucial to maintain this competitiveness to get the clients to choose our stores. This is what is happening really across the board in all countries where we operate. This being said, we think that there will be a slowdown. Of course, there are other moving parts. We know that there is now, again, pressure on the cereals, so on raw material prices, cereals, sugar, prices are going up again. We know that there is cost inflation across all the supply chain, and this will continue to also put some pressure for a slightly higher inflation. At the same time, we think that it's not possible to maintain this inflation so high, because this is really hampering the private consumption in every market, even in the ones where the consumer is not so pressured from a disposable income point of view. Excellent, thanks. Just to clarify, on the Ara CapEx, do you give any split of what's going into stores versus into logistics? You, this information we usually provide in the full year, William. Okay. Okay, thank you. Thank you. Thank you. Now we're going to take our next question. The next question comes from the line of Nick Coulter from Citi. Your line is open. Please ask your question. Hi, good morning. Thank you for taking my questions. Three quick ones, if I may. Firstly, can I ask about your rate of basket inflation in Poland, please, and how far below market inflation you were? Secondly, I know it's phasing, but presumably you saw a volume headwinds from lapping the refugee influx in Poland, but still saw positive volumes. Any kind of commentary around the moving parts would be helpful there, please. Lastly, with respect to Ara, is the campaign part of a permanent repositioning, or how should we think about this trajectory into the coming quarters, please? Thank you. Thank you, Nick. So on basket inflation in Poland, we, according to the official numbers that we have from the country, food inflation, we widened the gap to the market. In the first quarter, the gap was around 3 points, 3 percentage points, and now 4 percentage points in the quarter. The exit price is really with this kind of difference, and that's why we mention even, although this being across the board, that we are contributing to bring food inflation down. We are increasing volumes, in fact. As for the refugees, and of course, now it becomes more comparable. From what we see, and we know that, of course, it impacted, there are still refugees in Poland. The war, unfortunately, we don't see an end to it, as you know. This being said, with the information that we have, Biedronka is not just making sure that is the preferred banner of the refugees. Mm. What we see really is that we have more clients in our stores, and this, I think, has all to do with, you know, the, as we mentioned, the unstoppable, relentless dynamic that the company is imprinting, not or continuing continuously to provide saving opportunities to the families, and this is quite essential in the current context. We know that we have some, let's say, tailwinds in the initiatives of the government prior to the election. There are a lot of measures that are being announced that ease the pressure on the disposable income of the Polish consumers. Nonetheless, it is price sensitive. As you also know, food retail volumes are going down. In fact, Biedronka is maintaining a volume growth. I think this is really a remarkable performance from our team in the country. I see it's an impressive volume gap. I think, yes, the volume gap is quite impressive, in fact. In this case, we are having volume gaps that are more than 9% or around that on average. I think it's quite important. Thanks. On the Ara campaign, this was really, we were already investing in price, but the fact is that we were seeing the, an impoverished population really not being able to buy most of the products, because, in fact, the food inflation is very high, but is even higher in the more basic products, which are the ones that are bought by the lower income -families. This was really. We were seeing that even in the baskets and the number of items that people bought. What we really wanted was to do a bold and disruptive campaign to build the price perception for the longer run of our company, and really proving that we would be the right choice, being it in a, let's say, a more depressed situation, and a more contraction of consumption from the families, being it when the economy recovers and the families will increase their purchasing power. It's really to make sure that these are the clients that will continue to go to Ara after this because we provide really the best value proposition, and they are able to put foods on the table at the end of the day, considering the current circumstances. As for the future... have you- Yes. Go ahead. Sorry, Nick. No, I was just going to say, have you presented it as a promotion, as temporary reductions, or are they presented as permanent price reductions in store? How does the consumer see it? Is it a temporary help, or? This- is it a repositioning? This is a campaign, but of course, we know that now we have to work very smartly and very thoroughly in presenting the kind of prices that continue to bring the consumer in and being able to grow with the consumers. This is something that we want to maintain for the future, but this is a campaign for, for the, for the consumer. Thank you. That's very helpful. Thank you. Now we're going to take our next question. Just give us a moment. The next question comes from the line of Andrew Grant from BNP Paribas Exane. Your line is open. Please ask your question. Hi, yeah, good morning. I'm just following on from Nick's question there on Ara. I mean, clearly a significant amount of investment. What is the company trying to solve for in Colombia? I mean, obviously, there was an ambition to be positive, EBITDA on a pre-IFRS 16 basis. That was achieved, but is it now sort of pretty much on the back burner, this is all about growth? Second question on Poland. Last time you had such a significant volume gap to the competition, I think it was around about 2013, 2014, and it was 2013, really, and it ended really in quite a difficult set of circumstances with the brands promoting quite aggressively. Not so much the other retailers, but the big brands. Is there a risk of anything similar happening as we enter 20... or the second half of 2023 and 2024? Thank you very much. Hi, Andrew. On Ara, so we didn't give up of having positive EBITDA on a pre-IFRS 16 application. This is what we think really is that we have to have the consumer with us, and we were seeing volumes decreasing in the first three months in our company, and we really wanted to turn it around. We wanted the consumer to have the opportunity to go to the stores and really, as we said, build our perception for the future. This being said, our ambition is again, to go back to positive EBITDA, and we don't we think that this will be the case even for this year. This is to be recovered. On Poland, I probably didn't follow completely your question. When I spoke about gap previously, when answering to Nick, I was speaking about volume gap to the market. We maintained a quite significant price gap to our competitors. Biedronka is really, even it has increased that, I think that it's, it cannot, it could not be the case of us having a food basket inflation, set or increasing the gap towards the country inflation, if this gap was not even being widened for the competition. What I mentioned, really, I'm sorry, Andrew, if I didn't totally follow. What I mentioned was the gap in terms of volumes to the market. The market is decreasing volumes, it's a negative ground, and Biedronka is increasing volumes. I don't think that we risk really, I think that we learn our lessons 10 years ago, to lose competitiveness or to give room to our competitors. Of course, we know that they don't stand still. That's why the company continues to relentlessly work to provide new saving opportunities and to not lose any opportunity to show its price positioning and even its quality. The fact is that even the new clients, in some cases, they are, let's say, consumers that have a little bit more of income, and they then basically confirm that Biedronka has a very good value proposition, not only price, but really offering quality and with a wave of refurbishments that have been made, a very good shopping experience, in fact. You kind of answered the question, but just to confirm, I mean, there's no sort of clear reaction from the other retailers in the market as they lose market share, and indeed, some of the bigger brands, the food manufacturers within Poland, because obviously they're suffering as well if you're winning share. There's no sort of big change in competition? Well, in fact, Andrew, we have a mix. Although being and operating in a discount model, we carry a brand. It's not just private brand, contrary to some other discounters that have a much higher weight of private brand. We have a mix, and I think that even the A brands continue to be willing to invest in Biedronka, considering that we are gaining. We are not even increasing our share of private brands in the current context. That's because the A brands are also investing and maintaining with us. Great, all clear. Thank you very much. Thank you, Andrew. Thank you. Now we're going to take our next question. The next question comes from the line of João Pinto from JB Capital. Your line is open. Please ask your question. Hi, good morning, everyone. Thanks for taking my question. On working capital, if you could give us more color. I mean, last year, working capital boosted free cash flow in the Q2. However, this year, working capital has a neutral effect. Can you give us more color on why we're seeing weaker working capital inflows this year? Also, if you could quantify the impact of lower VAT in Portugal, it would be great. Thank you. Hi, João. On working capital, of course, we usually don't look at the quarters and particularly Q1 and Q2, because they have some calendar effects. Also, it has a very strong effect depending on the each end of period position. You are not seeing the average working capital, you are seeing the numbers at the end of each period. As you may recall, we ended 2022, near a weekend with a very high, or in this case, a negative working capital that then it's really trade payables that have to be paid in the following months. We usually look at the first half. Nonetheless, this really depends a lot on that, on that picture, and most of the impact comes from this calendar and this technical effect that I mentioned. Other, other aspects have contributed to it. We flagged because it doesn't explain all, and far from that, but I would expect that the VAT should have an impact of EUR 30 million, more or less. It's one of the pieces that have contributed significantly, and that's why we are flagging. The accounts payable of suppliers, contrary to the stocks, are booked in a gross amount. As you can imagine, Recheio and Pingo Doce, they sell a lot of fresh products and a lot of the essential products that have been affected by the decrease in VAT, enhance the impact, and that's why we are flagging that. Thank you very much. No, thank you. Thank you. Now we're going to take our next question. Just give us a moment. The next question comes through line of José Rito from CaixaBank. Please ask your question. Your line is open. Yes, hi. Good morning to all. Ana Luísa Virgínia, sorry, can you repeat the market share gain in H1? I missed that. Also, if you can explain, because we saw a very strong like-for-like performance in Q1 and big outperformance versus the food retail market today. In terms of Q2 performance, it seems that the deceleration that we saw on the like-for-like of Biedronka actually was stronger than what was perceived in food retail market. It seems that the market share increased more in Q1 and eventually eased a little bit in Q2. Can you confirm this? This will be my first question. Secondly, on the gross margin, if you can confirm that the full PPI decline that has been ahead of the CPI has not been helpful for the gross margin evolution? Also on this gross margin evolution, if the decline, if you can split what was trading down and promotions? Finally, if you can have or provide some details, what was the wage and rentals inflation in Poland this year? Thank you. Thank you, José. The market share increase up to May was 1.7 percentage points to 30%. From what I recollect from the evolution of the market share, I cannot conclude that I have a lower increase in the second quarter versus the first one. I think that it's as I mentioned, for the working capital, it's a little bit tricky to look sometimes in to the first quarter versus the second one. The first quarter is usually, I usually tend to say that any change in the quarter usually is amplified in the percentages because it's the lower or the one that has a lower contribution to the full year numbers. This, of course, any change in calendar, in Easter, in having one more Sunday or one less Saturday for Recheio, all this can really affect the banner's performance sometimes. I think that we should look at the whole period from that point of view. This being said, I don't think that we have what we did really is and that is a conclusion, we have widened the gap for the food inflation in the country. In this case, it has been coming, mainly it's not that the suppliers are not rushing, of course, to increase prices because their own cost prices are increasing and have increased in the prior year. Most of it comes really from the investment that the group is doing in price, really to maintain its competitiveness. As I mentioned, ending up contributing to the decrease and the falling in the food inflation. I don't think that not Biedronka is not losing any relevance on the contrary, and nothing, looking at the Q1 and Q2 in relative terms, points me to having a slowdown or any kind of situation in Poland. I think really it may be more of a technical issue, as I mentioned, from the percentages. From the market point of view, widening the gap and having really or maintaining volumes above 2% increase for the whole period. And in both periods. For the gross margin and the price investment for the wages and rents, I think this has been I've mentioned this already in the because most of the rents and wages partly are updated in the first months of the year. It's true that we will have a further increase of wages now in July. This was already expected as the country also divided the increase in minimum wage being part of it in January and part in July. In terms of increases in rents, we are already in double digits, because this has to do with the CPI. It's basically indexed to the CPI, general CPI of the prior year. As for the wage increases, it's an increase along the numbers of the country, because we want to maintain the competitiveness. This was in line with what we expected already. Okay, thank you. On the gross margin decline, if you can split between trading down and promotions in Poland, if there was any effect from the trading down? On that, you know, it's for me, we usually don't split it, and I think it's very difficult to do in fact. We have a different contribution from different... We may be investing in some of the higher -margin products to continue to sell, so it's very difficult to do the split between what is the contribution of the trading down and of the promotions. One thing is for sure, in Biedronka, the impact is bigger from the promotion and price investment, while in Colombia and in Portugal is a higher mix of the two. In Poland, the trading down is not so visible in our gross margin. Okay, understood. Thank you. No, thank you, sir. Thank you. Now we're going to take our next question. The next question comes from line of Nicolas Champ from Barclays. Your line is open. Please ask your question. Yes, good morning, everyone. I have two questions. First one is Poland. I mean, we well understood that you have widened your price gap versus competitors, but also basket inflation versus country inflation. I would like to know if you are now happy with your existing price differential, or if we should expect maybe the price gap versus country inflation to increase, to widen further, maybe over the coming months. My second question is also regarding Poland. You mentioned also trading down, but correct me if I'm wrong, but I understood that the share of private label did not increase in Poland, you said. Just would like to know how this trading down materialize in your sales performance, sales mix at Biedronka. Do you see any decline in fresh products, for instance? I mean, how trading down is impacting your performances, your sales mix, in concrete terms? Thank you. Good morning, Nicolas. Of course, being, if we are happy with the situation or not, I think that the companies have to manage a very difficult balance of wanting to provide the consumers with good prices and having them in the stores. This means that we will want to continue to be the more competitive player in the market, so having the best offers versus our peers. At the same time, we want to protect profitability. This is, but we know also that the best way to protect profitability is continue to grow on sales and to dilute costs that definitely have increased and will continue to increase because there are already signs that wages will increase again mainly in Poland. If we will maintain the current price gap, I think that the company will work, and in particularly, you are pointing to Biedronka, will work to keep being the most competitive player in the market, and to make sure that the consumers choose our stores in the current context, and to protect their volumes. This will probably mean that we will continue to maintain a very significant gap versus the peers. On the trading down, I think that I mentioned that in Biedronka is not the main driver of the gross margin decline. It's really the price investment and the promotions, and the dynamic, commercial dynamic that we are implementing in the country. The trading down is much more of a drag for Colombia and Portugal than really for Poland. In the current case, I would say that in Colombia and in Portugal, the trading down basically puts pressure, because, of course, if we are selling more of the basic products that have lower margin, this puts pressure on sales and puts pressure on margins. Is the way that, of course, if we have this kind of pressure, the way that we dilute cost is somehow questioned. That's why we are also investing in prices and investing in prices in other products to make them affordable for the consumers to continue to buy them and somehow compensate for this trading down effect. Understood. Thank you. Thank you. No, thank you, Nicolas. Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad. If you wish to withdraw your question, please press star one one again. Now we're going to take our next question. The question comes from the line of António Seladas from AS Independent Research. Your line is open. Please ask your question. Hi, good morning. Thank you for taking my question, is actually just one, because most of the questions were already answered, and is related with rights of issue. Rights of use, sorry. I know that you are not very sensitive to figures after IFRS 16. Nevertheless, rights of use have increased a lot over the last three quarters. I think it's related with your expansion plan. Nevertheless, I think rents are out there increasing, probably double digits. I think that you already mentioned it. Should we expect this kind of pace of increase for the coming quarters? Could you please answer this? Thank you very much. Hi, António. On the right of use, so as you mentioned, this is quite technical. It's not cash, and it's not really our operations do not manage considering this. Of course, the fact that it's increasing quite significantly comes from expansion, and particularly an expansion that has a quite significant number of rented stores. For instance, all our expansion in Colombia is with rented stores and long-term, usually long-term contracts. Of course, this, as we have to capitalize them for the periods, this has an impact. You have other technical factors also driving the increase. That includes, as you mentioned, not only the increase in rents, but also the zloty appreciation, for instance. Each time that the currency appreciates, we also have to translate from the local currencies to the euro, and that has an impact on the absolute number that we carry of rights of use in the balance sheet. Okay, thank you. I just have another question related with Poland. From my understanding, you would like that volumes increase in Poland, about 2% on this environment. You will manage prices versus inflation, versus official inflation, in the way that volumes will increase at least 2%. I'm right on this? Usually we don't set a target of volumes, António, to be honest. If they increase more, we don't mind. The idea of having really this, I would say, this focus on the volume is even for our teams not to lose, because. I'm being very straightforward with you. I think that Biedronka's performance was really one of a kind in the current context. I don't, and probably you can help me with that, but I don't know many players that are being able to grow sales more than food inflation. Our companies are doing that, and particularly Biedronka. It's not the question here of protecting the volumes is really because we know that the consumer, at a certain point, inflation will go down, and the consumer is more sensitive. It's important to get the consumer in the stores to continue to grow for the longer run. That's our bet with this price investment that we are doing across the board. No major target. Okay. If we increase volumes, it's already, in my opinion, a remarkable performance, and that's what the company achieved. It is. You are right. Congratulations for that. Thank you very much. Thank you, António. Thank you. Now we're going to take our next question. The next question comes from line of Henrik Herbst from Morgan Stanley. Your line is open. Please ask your question. Thanks very much. Hi, guys. I have two questions, please. Firstly, in terms of the volumes, looking at the government data, it seems like food volumes or the trend improved a little bit towards the end of Q2. I was just wondering if you agree with that start and whether you saw any improvement in sort of consumer demand towards the end of the quarter, as inflation comes down and I guess income minimum wages are still pretty positive, and I guess there's another minimum wage increase in July. Secondly, I remember last year you had some issues with supply chains and availability of goods in your I think in particular sugar was an issue. Can you remind us, what the impact of that was and whether you're seeing any similar issues this year? Thanks very much. Thank you, Henrik. On volumes, it's true that in June, the exit rate was a little bit less negative. The country, in real terms, is really not growing. Even private consumption is going down in Poland. I think that's, and when I look at the numbers in my own computation, I think that this increase really was also driven by the long-term contracts. Because we maintained our growth in volumes, and we are an important player in the market, and we usually also set the numbers for the peers. On this, I think that there is a number, as I mentioned previously, there is a number of initiatives that help not having the consumer so pressured as in the other countries where we operate. We see a new, as you mentioned, a new minimum wage increase now in July. We are the 14th pensions month was paid now also in July. The government announced an increase on the allowance per kid. There is a number of initiatives previous to that the government is putting to incentivize the economy. Nonetheless, I don't know if we can extrapolate, because one thing is for sure, the consumer continues to be, their mortgages increased last year quite significantly, and basically privileging price, when choosing the store to shop with. That's why it's important for us. We see that there is a mix here that can affect the consumer behavior, and we don't hide that. Of course, if we maintain our competitiveness, we have sources of pressure, and this is mentioned in our outlook. We think that we will continue to see pressure on our EBITDA margin, but we know that we are in a very good position to provide the best value proposition in Poland, even if volumes continue to go down. Of course, as you know, also, when we look at Q1 versus last year, there was an increase in volumes that were a little bit artificial with the starting of the war. That also affected the comparables when we look at the year-on-year numbers. On the supply chain, you're absolutely right. Last year, there were some constraints in the supply chains around this time of the year. This impacted because we wanted basically to have availability, this impacted even the availability of the products in some cases. This maybe it impacted even the magnitude of the promotions that we had to do because in some cases we didn't have enough items to go with a with the promotion. At this stage, we are not seeing any supply constraints at the level of the one that we saw in the in the first in the first halfway at June, July, so during the summer period in Poland last year. Thanks so much. Thanks so much. No, thank you, Andy. Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad. Dear speaker, there are no further questions. I would now like to hand the conference over to our speaker, Ana Luísa Virgínia, for any closing remarks. Thank you all for attending this conference call. As mentioned by the chairman and quoted in the release, "The good H1 performance encourages us to keep working on our priorities, to be the first choice of an increasingly fragile consumer, to grow sales, to reinforce efficiency, and to protect the profitability and sustainability of our businesses." Thank you once again, and I wish you all a nice day. Thank you, Nadia. That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.