Good day, welcome to the Jerónimo Martins first quarter results 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. Thank you, Raisa. Good morning, ladies and gentlemen, and thank you for joining this call to present first quarter 2023 results. In our corporate website, a set of materials is available comprising the release, a slide presentation, and a fact sheet. Q1 figures indeed reflect a good start to the year. All banners leveraged the strong competitive positions held at year-end to continue fueling growth in a quarter when food inflation remained a key feature of the performance. With consumers progressively more pressured, our strategic focus remains unchanged, with price competitiveness as the critical tool to drive growth, protect volumes, and mitigate as much as possible trading down effects. The outcome of this strategic option was particularly remarkable in Poland, where despite the challenges, Biedronka delivered an outstanding performance. Group sales grew by 23.4% to reach EUR 6.8 billion. It is important to flag that currency devaluation was a headwind to growth. At constant exchange rates, group sales grew by 26.5%. The strong sales performance led EBITDA to grow by 20.1% to reach EUR 446 million. EBITDA margin declined 18 basis points to 6.6%. Cash flow generation was negative in EUR 226 million, reflecting normal non-seasonal working capital outflow of the business in the first quarter. Our financial situation remains extremely solid. By the end of March, net cash position, excluding capitalized operating leases, was at EUR 1 billion. We entered 2023 with persistent high food inflation, also reflecting the comps as inflation accelerated in Poland and Portugal from Q2 2022 onwards, when the war exacerbated the pressure on food and energy prices. In face of rising prices and higher interest rates, consumers have become progressively more cautious despite the support to household income in each of our three countries from the national minimum wage increases in January. In Portugal and Colombia, the trading down in food continued to gain momentum. The first quarter P&L reflects a sales-driven performance. Price investment by all retail banners and the effects of trading down, particularly in Portugal and Colombia, pressured gross margin, which declined from 21.5% to 20.8%. Our reinforced price competitiveness led to a good sales performance across the banners and improved operational leverage, limiting the impact of cost inflation. All in all, EBITDA margin was down while the good sales progression led EBITDA in absolute terms to grow by 20.1% and reach EUR 446 million. As previously said, cash flow was negative in EUR 226 million, with Q1 being, as usual, impacted by payments to trade suppliers, particularly when following a successful Christmas season. Our balance sheet remains very robust with a net cash position of EUR 1 billion, excluding capitalized operating leases at 31st March. As a reminder, the AGM held in April 2020 approved dividends in the amount of EUR 345.6 million to be paid by next May 17. I will now guide you through sales performance in a bit more details. This was a very strong quarter with all banners contributing to group sales growth. Biedronka's remarkable performance translated into EUR 1 billion of additional sales in Q1 2023 versus Q1 2022. Currency's devaluation impacted group sales by more than EUR 170 million. With a positive contribution from all banners, group like-for-like reached 21.2% in Q1. In the like-for-like graph on the right-hand side, you can clearly see that comps will be even more challenging from Q2 onwards. Biedronka invested strongly to drive sales growth, protect volumes, and minimize trading down trends in a context of softer consumer demands. Over the period, the company widened the gap of its own basket inflation to the market's food inflation and clearly earned further consumer preference. In the like-for-like, volumes were positive in every month of the period, despite the slowdown registered throughout the quarter. I would also like to flag that the early Easter period in 2023 versus 2022 is estimated to have contributed to the performance with 1 percentage point. Sales grew 28.3% in local currency, and market share in the first two months of the year increased by 1.6 percentage points according to GfK on fast-moving consumer goods. Hebe continued to perform well with sales growth at 31.9%. The online operations posted a 43% increase and represented 17% of the total top line, despite the still marginal contribution of Czechia and Slovakia. In Portugal, we saw an acceleration of trading downtrends as the purchasing power of consumers deteriorated. Pingo Doce kept investing in price and promotions to protect sales and delivered a growth of 9.4% with like-for-like at 8.4% excluding fuel. Recheio continued to benefit from an improving HORECA sector and delivered strong sales growth of 29.2%, including a 27.1% like-for-like. In Colombia, we saw already early signs of food disinflation, though inflation remained high at 24% and contributed to a very difficult market context. Continuing to focus on its price competitiveness and promotional dynamic, Ara grew sales in local currency by 50.8% with like-for-like standing at 18.9%. The expansion program remains the top priority and the banner opened 64 new stores in the period. Driven by the strong top line delivery, EBITDA grew 20.1%, 22.7% at constant exchange rates. Following price investments and also pronounced trading down in the cases of Pingo Doce and Ara, all our retail banners registered gross margin reductions versus the same period of 2022. The strong sales delivery, however, allowed for operational leverage to mitigate this pressure on EBITDA margin that decreased 18 basis points in the period. The Ara's EBITDA margin was 22 basis points down with a strong like-for-like sales growth, limiting the impact of inflation in labor costs registered in the period. It is worth highlighting that despite remaining volatile, cost pressure from energy and fuel eased in Q1 2023. In Portugal, EBITDA margin at Pingo Doce was down by 13 basis points, pressured by price investments, while Recheio sustained recovery allowed its margin to improve. At Hebe, margin decreased 16 basis points, reflecting the investment to launch its international operations. Ara's EBITDA margin was 25 basis points down in Q1 2023 as a result of the combination of price investment to drive sales and a large number of stores with very low maturity. Wrapping up, all banners continue to deliver well despite the deteriorating consumer environment. The context is still uncertain with regards to the evolution of the prices of foods, energy and fuel, and the progression of interest rates. All these factors will determine the level of pressure on consumer demand. We know that the base of comparison will challenge us even more from now on, we are confident in the ability of our banners to navigate challenging times and keep delivering on ambitious goals. Adding to this, we preserve a very solid financial position. As such, we will remain focused on guaranteeing price competitiveness to drive sales. At the same time, we will continue to execute our CapEx program as planned, expanding and improving our store networks in the three countries where we operate, not losing sight of our long-term vision. Thank you for your attention. Operator, I am now ready to take questions. Thank you. To ask a question, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, you can please press star one and one again. Once again, to ask a question, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, you can please press star one and one again. Thank you. We are now going to proceed with our first question. The questions come from the line of João Pinto from JB Capital. Please ask your question. Hi. Good morning, everyone. Thanks for taking my questions. I have three if I may. The first one, can you please quantify the state effect on the Ara's like-for-like? The second one, food PPI has decelerated materially in March. Are you already seeing or can you anticipate some lower pressure from COGS inflation for the next few quarters? Last one on Slovakia, can you give us some color on your plans there? When do you expect to enter, and will do it organically? How many stores can you source using the current, logistics structure that you have in Poland? Thank you very much. Good morning, João. Regarding Easter, and as I referred, we estimate the contribution of early Easter to have been 1 percentage point in our like-for-like. As for food CPI and the COGS inflation, we have seen some reduction in the inflation, but I believe it's still premature to really give a lot of color or estimates on this because of course, we know that several drivers can change or make it different from now on. It will also depend on the costs of our own suppliers. As you know, salaries have been increasing, the minimum wages in all the countries, and this also affects the suppliers. It's not just a question of commodities that we have seen, whose prices have growing down, but it's also the other costs that have to be taken into consideration that we think it will reflect still and it will still pressure, the cost of our suppliers. On the fresh products, which accounts a quite big weight on our sales, this is also a question mark because it will depend. We have seen some reduction on inflation, in March and even in April now. We also know that this will depend on the harvests and on the weather, in fact. It's still a question mark. Our expectation, as we mentioned in our outlook, is that inflation will reduce and this is the scenario under which we are working and the companies have planned directions from now on. On Slovakia. I think it's still early, but the idea, João, as you mentioned, is to grow from Poland. To take advantage, on a first basis, this is a country that of course is much smaller than Poland, but where we think that there is an opportunity. I think it's a little bit early to give a lot of color on this. The idea is to use the infrastructure and the sourcing and procurement capacity from Poland to go into Slovakia. In principle, to open, and opening organically, it will not be this year still. This would be to prepare, any entry in the, in the country. Thank you very much. João. We are now going to proceed with our next question. The questions come from the line of William Woods from Bernstein. Please ask your question. Your line is open. Hi. Good morning. My question is on volumes in Poland. It looks like if you take your 24% like-for-like, and you subtract inflation and your lower basket inflation, and then you look at the volumes in the market being down -5% towards the end of the quarter, it appears that you've gained significant volume share. Do you see significant volume share and volume growth? If so, who are you taking that share from? The second one is just a follow-up on that. Could you just give some context on your basket inflation? How much do you think you are under-inflating the market or how do you see that delta changing? Thank you. Thank you, William. On volumes, as I mentioned, they were positive in the three months for Biedronka. According to our estimates, we have grown 3% in the quarter in terms of volumes. What we believe is that we are gaining clients from other formats. I believe that this volume has come basically from other banners that have a different value proposition. I would say that's from mainly the usual, the hypermarkets and the other formats or other supermarkets that are not so price competitive. That considering all the evolution that Biedronka has done, remarkably in terms of assortments and in terms of quality of that assortment, I believe that currently, people when they start buying in Biedronka, they like the format, they like the banner and continue to do so. I think that some of the clients, that used to, buy or shop in other banners are now shopping in Biedronka and increasing their basket in Biedronka. That's why, we are gaining share in terms of volume. As to basket inflations, currently, or in this quarter, we have widened the gap, as I also mentioned. It used to be on average, in 2022, around 2 percentage points. It's now close to 3% in the total quarter, and it was slightly higher in March, in fact. Understood. Thank you very much. Thank you, William. We are now going to proceed with our next question. The question come from the line of José Rito from CaixaBank. Please ask your question. Yes, I good morning to all. I have two questions. The Easter impact. Apart from the like-for-like, how much it helps in terms of profitability in Poland, if it had any impact. Also related to profitability in Poland, apart from Easter, what other factors have helped in Q1? You mentioned energy. How do you see the moving parts evolving? I think that if Q1 run rate is maintained in terms of margin evolution, margins actually could go up over the next quarters. Can you confirm this? Thank you. Thank you, José. As for the Easter effect, I think that's as the impact on profitability, which I believe it was the question. As I mentioned, we think that it was this 1 percentage point, but in profitability, what is really important for us and what will continue to be important as I also repeated, is to continue to gain momentum with sales and continue to improve sales because this is the main driver of profitability. I don't hide that, yes, we were helped by a lower price in energy, but if we haven't grown sales, we could not dilute our costs in energy or our costs in fuel. It's quite important to us that sales continue to deliver and that's why we repeat like almost a mantra that we will have to keep our competitiveness and our relevance for the consumer. Easter effect should have helped, but I would say that the main driver of profitability was really the fact that Biedronka continued to offer to the Polish the best value proposition in the market. Not really being just pleased with the current situations and really making itself relevant by keeping this gap to the inflation in the country and by strongly investing in price. As to energy, it was one it was diluted and we don't hide that there was help there. For the future, José, it's always difficult to say. It's true that the prices continued to go up in 2022, so this we have this tailwind in our profitability. It really will depend on how things evolve. It's still a little bit early to say. We think that it may help, and we don't hide that we are counting a little bit on that. In what we count really to protect our profitability is really continue to drive strong sales and having a strong top line growth. Okay, understood. Looking at the profitability really in Q1, I think it was very good considering the run rate that we saw in Q3 and Q4 last year. My question is, was this also a surprise for you? If you think this is sustainable, because if it is, eventually margins can actually trail up over the next quarters. José, I think that we also in the outlook mentioned this. We know that it will be under pressure because if there inflation, volumes, and the mix are drivers of our current performance. We know that consumers are more price sensitive, that the trends of trading down are also happening in Poland as the market performance shows. Biedronka has been able, and I think that is really remarkable, the team to be able to basically being performing against a negative market growth in real terms. But the question now is if there is, of course, if the consumer reacts much more strongly and if this inflation is very fast et cetera, these are all drivers that we have to take into consideration. As I said, some of the costs, and depending on the level of dilutions, may also help. Others we know that, they've already increased, like the personal costs, and this is something that we can only dilute if we have sales. It's keeping- Okay. You know, the best value proposition, as I said, to the market, to really make sure that Biedronka is the one that the Polish families choose as a safe harbor for them in still a high inflation context. Because even if inflation reduces, is on a basis that's had a very high food inflation. Okay. Thank you. José. We are now going to proceed with our next question. The question's come from the line of Nick Halter from Citi. Please ask your question. Your line is opened. Hi. Good morning. Thank you for saving my questions. I don't often say it, but congratulations on the quarter. Two if I may. Firstly, can I ask how you're shifting the mix in this environment? I guess I'm trying to understand the limited impact to gross margin given the scale of the inflation gap that you're pushing through. Is that just the benefit of the format cost structure? Just trying to get the math to work. Then secondly, for Ara, would it be possible to get a sense of the store maturity impact on margins? If we should expect this to persist as you continue to open stores. Thanks so much. Thank you, Nick, and thank you for your kind words. I think that's really the team's really performed and they earned all the congratulations from our part. As to the shift in mix, I'm assuming because you spoke about the gap that we are talking about Biedronka. Yeah, that's all. Just agree. Sorry. You're absolutely right. Clearly there's a limited impact. What we think is that, as you know, when the consolidated gross margin decreases, of course we know that the big part has to be a contribution from Biedronka. The basic or the most important is really of course the price investment, but there is some mix effect. Although this mix effect started to be seen in February last year. We know that people are buying more of the basics. But it's not the most important feature in the or that explains the reduction in gross margin in Biedronka, is really the price investments. Although, as I said, we are seeing some mix, but it's not. We see a slight increase in Private Brands. It's not so significant, for instance, as it happens in Portugal. In Portugal, just in the quarter, was more than 2 percentage points in the weight on sales. In the case of Biedronka, is slightly less than 1%. Then of course you have probably a higher weight of also the fresh products, where we are staying quite competitive. I would say that currently price investment is the one pressuring gross margins the most to really make sure that we, as I said, maintain or even increase the gap to be more relevant for the consumers. As for Ara and the store maturity, of course, we opened a lot of stores this quarter also. As I mentioned, we opened 64 stores. Last year, in the last weeks of the year, we opened more than 140 stores. I think and in the, in the quarter, the last quarter was even more than that. It takes a while to build the sales density that we want in the stores. Of course, we know that we are against an environment that is very difficult for the Colombian families. Most of these families are low income. We are for the second year with food inflation above 20%. accumulated probably in two years and a half, we are talking about almost 60% increase in the price of the foods. That accounts for the main budget of the families. I think that more than the maturity, we are facing a consumer that is not more than price-sensitive. It really has its budget with a lot of constraints to buy more, even if they wanted. This being said, we think that we are building really a very good price perception and are building our future in Colombia. Because in fact, and that's why we think that it's a good opportunity to invest now, to then, once the country picks up, and we know that these cycles are usual in Latin America. When the country picks up, I think that the consumer will remember who maintained prices low in foods, we will pick up all the leverage from this. Of course, any change in household income will go to foods, and we think that it will go to the store that has the best price and the best quality, so the best value proposition for the Colombian family. Yes, it's a way, but I think that's what misses here, more than a cost increase, is really the fact that we are facing a difficult context for the families. That even if they wanted, they could not buy more than they are doing at the moment. Super. That's very helpful. Thank you. No, thank you, Nick. Once again, as a reminder, if you have any questions or comment, please press star one and one on your telephone and wait for your name to be announced. Once again, it's star one and one to register your question. We are now going to proceed with our next question. The next question comes from the line of Nicholas Tan from Barclays. Please ask your question. Your line is open. Hi, good morning. Thanks for taking my question. I have three. The first one is about Poland. Could you please quantify your market share gain in this country in Q1? How did this market share gain evolve versus compared with the previous quarters? Second question also regarding Poland. You talk about lower energy costs this quarter, could you clarify about the other cost increase in Poland? I mean, minimum wage to wage are expected to increase significantly this year. How much did your staff cost increase in Q1? Similarly, the lease charges are also expected to increase quite significantly in Poland this year. Again, what is already included in your cost structure in Q1? Should we expect additional lease increase over the coming quarters? The third and last question is about Colombia. You said CPI was 24%. Could you let us know your basket inflation in this country also in Q1, and how has the price differential versus CPI evolved also in Q1 versus previous quarters? Thank you. Thank you, Nicholas. As for Poland and the market share, the numbers that we have from GfK, and of course, we mentioned the source because of course it can be slightly different. Using the same basis, we mentioned that February year to date, we gained 1.6 percentage points in market share. To be very straightforward, I believe that with the numbers that we saw from the markets still this week for March. I would say that we have further increased market share with the kind of performance that we are delivering and being able to gain even in volumes. As for... As we have been growing on top of the last year growth, I think that even if we are going on the line, we grew slightly below 2 percentage points in last year in terms of market share. I think that in this case, we are continue to prove or Biedronka is proving that it continues to be relevant for the consumer. As for the cost increases, yes, we have in January basically all our costs have incorporated the salary increases, the wage increases that we made. There were not only the along the lines of minimum wage, but we increased the salaries to maintain competitiveness also on that because the labor markets in Poland continues to be quite tight. The unemployment rate is quite low, we think that we should maintain competitiveness is this. We have already done that, so it's already incorporated in the quarter numbers. The lease charges also. In terms of rent, most of the CPI is a proxy for the rents increase in the case of Poland this year. Most of it is already reflected in our guest position because, of course, according to IFRS 16, you don't see really this increase. We, what we are seeing basically is an increase in our operating expenses along the lines of 20%. These rents are slightly lower because it's according to the general CPI, not the food CPI. As for the future, I think that we maintain or we think that of course this will reflect versus last year along this kind of line. It will depend of course, the weight on sales, it will depend and on profitability. As I already mentioned, it will depend on how the top line will evolve, that's why it's so important that we keep focused on our relevance for the consumer. As for Colombia, our basket inflation is also below the 24%. We've maintained more or less and along the lines of last year, around, or near, 2 percentage points difference. Okay. Ve ry clear. Thank you. No, thank you very much, Nicholas. We have no further questions at this time. I will now hand back to Ms. Ana Luísa Virgínia for closing remarks. Thank you. Thank you all for your questions and for attending this conference call. Despite the challenges, we have a good start to 2023, we'll continue to work hard to sustain consumers preference while we reinforce our market positions going forward. The context will certainly remain challenging, we have our strategy and priorities clear, our formats are in good shape to deliver. Thank you once again, I wish you all a nice day. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect your lines. Thank you.