Good afternoon. We welcome you to Sonae Q1 2025 Results Conference Call during the presentation hosted by Mr. João Dolores, Sonae CFO. All the participants will be in listen-only mode. Q&A is available after the presentation. If you wish to ask a question during the Q&A session, you may do so by pressing the star key followed by one on your telephone keypad. If you are experiencing any difficulty in listening to the conference at any time, please try calling from a different device. I now hand over the call to Mr. João Dolores. Please go ahead, sir. Thank you. Good afternoon, everyone. Thanks for joining our results presentation for the first quarter of 2025. Besides myself and the investor relations team, we have in the call with us Cristina Novais from Bright Pixel, Fernando van Zeller from MC, Paulo Simões from Worten, and Miguel Moreira from Sierra. As usual, I will start by giving you an overview of the results of each of our main businesses, and I will start with MC. In grocery, Continente further reinforced its leadership position in a very competitive setting in Portugal. Like-for-like reached 5%, with strong volumes growth across all grocery formats, and despite the negative calendar effects related with the leap year in 2024 and also the timing of Easter. Grocery margin improved by about 50 basis points year-on-year, fueled by the strong sales performance and also significant ongoing operational efficiencies. In the quarter, MC opened two new proximity stores and made important investments in refurbishments, with around 20 refurbishments underway, mainly in larger store formats. A very solid display from MC in terms of growth and market share gains, sustaining a very good level of profitability. In the health and wellness and beauty space, results were fueled by the contribution of Druni, but also by organic growth in a context of intense market competition. In Portugal, Wells posted a relevant improvement in its like-for-like growth, and in Spain, Druni Group posted a solid increase in revenue, leading to a further reinforcement of its market leadership in Iberia. EBITDA margin in health and wellness and beauty increased to 11.6%, mainly as a result of the consolidation of Druni. Overall, and if we look at consolidated figures for MC, the company achieved an increase in revenues of 22.5% to EUR 2 billion, or 8% year-on-year when considering the pro forma contribution of Druni for the last 12 months. MC was able to improve underlying EBITDA margin by about 90 basis points year-on-year to 9.5%. This was achieved not only through the integration of Druni, which is margin accretive to MC, but also due to solid sales growth, together with efficiency measures that more than offset pressures from inflation, rising staff costs, and higher energy prices. Regarding leverage, MC maintains a quite comfortable position, with total net debt to EBITDA stable at 2.7 times at the end of March 2025, considering Druni's full-year pro forma EBITDA contribution. As for Worten, the company was able to sustain solid revenue growth and further reinforced its market share in Portugal, both online and offline. In Q1, total turnover grew by 4.2% to EUR 323 million, with e-commerce sales growing 19% year-on-year and already accounting for 19% of total turnover. Regarding profitability, underlying EBITDA margin reached 3.8% in the quarter. This decrease in margin was influenced by a higher cost base associated with strategic growth initiatives, as well as a temporary increase in shrinkage driven by a spike in thefts, which is now being addressed. I would like to highlight iServices that continue to successfully expand its presence both domestically and internationally. In Q1, Worten opened 10 new iServices stores, most of them outside Portugal, and this concept already accounted for roughly EUR 75 million of revenues in the last 12 months and continues to grow at a fast pace. As for Musti, the company released its quarterly results yesterday morning. In this period, Musti reinforced its leadership in the Nordic pet care sector and progressed with the integration of Pet City after its acquisition in November, consolidating its growth platform in the Baltics. The company posted a resilient performance amidst a demanding consumer environment. Total net sales increased by 11.8% to EUR 120 million in the quarter, fueled by Pet City's consolidation and by growth in the Nordics, which has been improving month after month. Total like-for-like increased 1.2%, or 2.4% if you exclude the leap year effect, with some signs of the market rebounding to its long-term growth trend. Adjusted EBITDA decreased to EUR 12.7 million with a margin of 10.6%. This was due to targeted investments in price and also the integration of Pet City. Going forward, we expect EBITDA margin to increase as consumer confidence improves and the integration of Pet City progresses. Moving to Sierra, we had an overall quite positive first quarter of the year in our real estate business. In Q1, the company maintained a strong momentum across its European shopping center portfolio, while continuing to execute its strategy in its services and development businesses. Sierra's European shopping center portfolio posted solid results, with tenant sales continuing its growth trajectory like-for-like. The shopping centers maintained very strong occupancy rates of over 98% and very strong collection rates in total. In Q1, net result for the company increased to EUR 29 million, driven by the strong performance of this European shopping center portfolio and also of the services business, which showed quite strong resilience and growth levels. NAV reached EUR 1.1 billion at the end of March, increasing almost EUR 40 million since the end of 2024. Moving on to telco and technology, NOS already reported its results to the market as well. These results were marked by a strong performance of the core telco business, and also an important milestone in the quarter was the completion of the acquisition of Claranet Portugal, thus reinforcing the presence of the company in the B2B space in the full ICT stack of services. Consolidated revenue grew by 4.5% to EUR 421 million in Q1, supported by continued growth in the telco segment across both B2C and B2B channels, as well as a strong performance in the media segment. Consolidated EBITDA increased by 4.3% to EUR 192 million, and recurrent net income increased more than 20% year-on-year. NOS paid already in April an ordinary dividend of EUR 0.35 per share and an extraordinary dividend of EUR 0.05 per share related to 2024 results, which accounted for a EUR 77 million cash-in for Sonaecom. Finally, Bright Pixel, with more than 45 companies in the portfolio, invested in two new companies and recently announced other follow-on investments in existing portfolio companies. NAV reached EUR 325 million, and cash invested amounted to EUR 197 million, implying a potential cash-on-cash return of 1.7 x. Moving on to the consolidated view, overall, our consolidated turnover grew 22.7% to EUR 2.6 billion, driven by the strong organic growth across our core businesses and also the integration of newly acquired companies, including Musti and Druni in particular. Excluding the impact of acquisitions, consolidated turnover would have grown 6% year-on-year, a solid growth profile as well in the last 12 months. Underlying EBITDA amounted to EUR 218 million, improving by 38% year-on-year. This positive performance of our fully consolidated businesses, combined with EUR 34 million in equity method results, led total EBITDA to reach EUR 250 million in Q1, up by 39% year-on-year. Net result group share increased to EUR 43 million, a 77% increase versus Q1 of 2024, as a result of the improved operational performance across our companies, which offset the impact of higher depreciations and amortizations and also financial costs associated with our portfolio expansion. Moving on to leverage, net debt before dividends increased EUR 279 million in the last 12 months. This was due to the significant acquisitions that were executed recently. If we look at the performance of the original portfolio, Sonae registered a total of EUR 172 million in Free Cash Flow as we continue to generate healthy levels of cash flow across all our main businesses, and we continue to have a quite solid financial position with significant available liquidity facilities and a well-balanced net maturity profile. The holding loan-to-value stood at 15.9% at the end of March, down from 16.3% at the end of last year as we begin our deleveraging path. A final note to NAV, our net asset value grew EUR 200 million quarter-on-quarter and reached EUR 4.6 billion at the end of March, which equates to EUR 2.39 per share. This positive evolution was mostly fueled by the positive performance of the NOS stock price and also improved valuations of MC and Sierra. This is it for me for now. Thank you again for your trust in Sonae, and you can now open the session to Q&A. Thank you. Thank you. If you'd like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. You will be advised when to ask your question. We will pause for a moment to allow everyone an opportunity to signal for questions. We will take our first question from José Rito, CaixaBank. Your line is open. Please go ahead. Yes, hi. Good afternoon to all. I will have at this point three questions. The first one on Sonae MC. If you can detail a little bit on the drivers behind the margin improvement in Q1, specifically in grocery, there was a material increase on the margin improvement quarter. If you can point out the main drivers for this improvement, that will be the first question. The second on Musti, I think that in the release you mentioned some price investment in Q1 that justifies a little bit the deterioration on the profitability of the business. My question is, if these price investments were self-inflicted or a reaction to competition, and if you can detail a little bit how do you expect these competitive environments to evolve going forward? My final question on Worten, you provided a little bit some details on the service and expansion. Could you mention how would you compare the margin of these services versus what it is with Worten? That's it. Thank you, José. Thank you for your questions. Fernando, do you want to take the MC question first? Sure. Hi, José. Good afternoon. In terms of margin evolution on the grocery business, I would mention that in terms of commercial margin, we are seeing a stabilization of the commercial margin in our company in the first quarter of 2025. We had a slightly negative on the energy cost, as João mentioned, has been a relative increase or a significant increase in energy costs in Q1 2025 versus 2024. The key driver of the margin increase was really the efficiencies that we have continued to get from the business, as well as dilution of the fixed costs, given the strong volumes growth and the strong like-for-like performance we had in the quarter. I would say those are the main drivers behind the increase in margin. Okay, understood. Any reference to the gross margin how it behaved in Q1 versus last year? As I was mentioning, gross margin/commercial margin was more or less stable in Q1 2025. Okay, thank you. Okay, I'll take the Musti one. As you know, last year, 2024, was a bit of a rough year in terms of market context. We saw a number of things happening, but there was a bit of a rebound from COVID pet ownership and then also a more difficult private consumption environment in our main markets, particularly in Finland. That meant that consumers traded down a bit, and trading down in the pet care sector means that obviously they buy lower-priced products, and they stopped buying as much discretionary products as before. Supermarkets and hypermarkets, in particular, have a more favorable market to operate in. What we assumed last year was that we did not want to lose market share, and we would proactively increase the competitiveness of our product offering to sustain our market position because we felt it was a temporary market swing and the long-term trend would come back in terms of the whole market growth. We wanted to be in good shape to take advantage of that rebounding. It was a proactive move on our end. I think it paid off quite nicely in the sense that we maintained our market leadership. We actually even extended our market leadership. Now we are starting to see signs of the market picking up to its long-term trend. We are seeing the impact of that not only in terms of growth of the market, but we are also seeing that impact in margins. We are seeing improvements not only in like-for-like growth across our countries month after month, but also in terms of the health of the margins. We are seeing margins upticking versus last year. We are on a positive trend to bring back profitability levels to where they were before. It will probably take a few months to get there, but the trends are quite positive. It was a conscious effort and a conscious investment to maintain our market position in the temporary negative backdrop in the market. I will hand it over to Paulo to answer the Worten question. Hello, José. Thank you for your question. Good afternoon, everyone. Regarding our services margin, the company is dedicated to mobile phone repairs and other kinds of repairs, laptop repairs, tablet repairs, and that is a service business. It has a good margin. The bits from those kinds of activities is quite positive. It also has an important contribution from the sale of accessories, mobile phone accessories like covers, headphones, cables, chargers, which also is a very good margin business. We have refurbished phones that we also sell. It's quite important for the turnover of the company, but it's a lower margin business. Overall, the business has a good EBITDA margin, clearly above Worten's core business. Currently, the company EBITDA is a bit pressured by the accelerated expansion costs that we are incurring as we are opening stores, especially internationally. Those store openings, as they have opening costs and some training of the new teams, as this is a service business, it means that we have to train teams to provide excellent service to our customers. We have to hire the teams before the store openings and train the teams. There are additional costs there, which are currently pressuring a bit the EBITDA of the company. Having said that, as a summary, I would say that our services EBITDA margin is quite interesting, quite attractive, and clearly above Worten's core business. Okay, thank you. Just one question on a follow-up on this. Any targets in terms of store expansion over the next two to three years as a reference for us to have some references? We are quite positive on international expansion, but it's still early days. We are excited about the growth prospects of the company in Europe overall. We see that there's a market opportunity as we think that we have a good concept that is differentiated from our competitors. We are very positive on future growth, but it's still early days to set very clear targets on how fast we will expand. We will need to check the reception of the concept internationally, see how long it takes for the stores to mature and increase profitability to the profitability levels we see in Portugal. Then we can decide with more information how much we should accelerate the expansion. Okay, thank you. Thanks. Thank you, José. We will take our next question from Julian Matias, Kepler Cheuvreux. Your line is open. Please go ahead. Yes, good afternoon, everyone. I have two questions. The first one on MC, could you elaborate further on the moving parts of the working capital for the quarter? The second one, sorry, on the health and beauty business, do you think it's possible to return to double-digit like-for-like growth in this market? Thanks. Thank you. These are for you, Fernando. Sorry, can you repeat the last one? Sorry, I was just taking notes. Health and beauty, if it's possible to return to double-digit like-for-like growth. Yes, exactly. Thanks, João. Very good. Thank you, João. Julian, thank you very much for the questions. In terms of MC of the changing working capital, the negative working capital in Q1 2025 is really mainly related to calendar effect. The fact that Easter this year was in April versus the end of March last year had a very material impact on our working capital. That is really the majority of the investment we see here. There is also a small part related to the incorporation of Druni in Q1 2025, which was not there in Q1 2024. Those are the two main blocks. Obviously, the first one should be solved, obviously, with this calendar effect. The second one with Druni, it is the natural cycle of the business in this new incorporation. In terms of health, wellness, and beauty, as you know, in the health, wellness, and beauty business, over the last couple of years, there was a very strong recovery from the impacts of COVID, which obviously were negative for this sector. In 2024, we had double-digit like-for-likes, and this year we're seeing high single digits, but not double digits. Our expectation is probably that we're not going to get into the double-digit like-for-likes in 2025. The market continues to behave well, but not as strongly as in last year. That being said, I think it's important to mention that both in Portugal and in Spain, Wells in Portugal, Druni and Arenal in Spain together, they continue to gain market shares in their segments. We are very happy and very strong in terms of relative performance. On absolute performance, the market is slowing down a bit after two years of very intense growth. We would expect, in summary, to see not double-digit like-for-likes in the rest of the year for health, wellness, and beauty. Okay, very clear. Thanks. Thanks. Thank you. Thank you, Julian. We will take our next question from João Pinto, JB Capital. Your line is open. Please go ahead. Hi, good afternoon, everyone. Thanks for taking my questions. I have two regarding Sonae MC. The first one, can you please quantify the Easter effect in the first quarter, and what is driving such an acceleration on the underlying like-for-like performance of Sonae MC? My second question, a follow-up on José Rito's question about the margin on the grocery segment in specific. I imagine that the OpEx will be even easier to dilute in the second quarter due to calendar. My question is, is it fair to assume an even higher margin expansion in the second quarter? If you prefer speaking about full-year numbers, are you more confident now of increasing margin this year? Many thanks. Thank you, João. Go ahead, Fernando. Okay. João, thank you very much for your questions. Just in terms of like-for-like, as you saw, we typically divided it between price, volume, and price, volume, and mix. What we have seen is full inflation of about 2% in the first quarter of 2025, both for MC and for the market, so more or less the same. We are seeing, and we saw in the first quarter of 2025, a volume increase together with mix of about 3%. The driver of the strong performance is mainly around the strong volumes in MC. What is driving this? I would say several factors in the grocery market in Portugal. First of all, we are starting to see some population growth in Portugal driven by immigration, as you know. We see that the minimum salary last year also increased, and we're seeing, obviously, the impact of that in the consumption of the different households. We feel a positive macro environment in the Portuguese market, which is obviously impacting the growth of the grocery business. Ourselves, MC, as we mentioned in the last call, have a very clear strategy to continue to gain market share. We reinforced our leadership in this quarter. I would say those are the drivers on a macro level as well as on an MC level. In terms of margin, as I mentioned to José, the commercial margin was more or less stable. The key drivers were really the cost efficiency measures, not only dilution of costs per se. We have also an important cost-to-serve program underway, which we are tackling the key cost lines within our business. We continue to do a lot of work internally to continue to have this level of efficiency in the business. Obviously, as I mentioned, the growth in the volumes and like-for-like, it helps to dilute some of the costs. We do not expect a very different or a different trend in Q2 2025. It is true that, obviously, the Easter impact a bit more positively the margin in Q2 2025, but we also have the energy prices still growing and some other aspects. We are not expecting a very different trend in Q2 2025. For the full year, I would say it is still too early to say. As you know, our cost base is being pressured by the increase in minimum salaries, etc., etc. The inflation on costs, as you see, is higher than the inflation on the top line. It really depends on the strength of the top line, the macro conditions, the consumption in Portugal. I think it's too early to say if we're going to continue to see this level of strength in the overall market for the rest of the year. Thank you very much. You're welcome. Thank you, João. Sorry, I think I missed the Easter impact. The Easter impact, 1.5 percentage points. Thank you. Once again, if you'd like to ask a question, please press star one on your telephone keypad now. We will take our next question from António Seladas, AS Independent Research. Your line is open. Please go ahead. Hi, good afternoon. Thank you for taking my question. I have four questions. First one on Sierra: NAV and performance, very strong on the quarter. I do not know if you can provide more color. Second one is related with what you call the other business, has been positive for the last three or four quarters. I do not know. I think that it includes Zeitreel and Spark food and so on. Again, if you can provide more color on this performance, if you should expect this kind of performance for the coming quarters. The third one on Musti, you mentioned that margins returned to the past levels. In the past, margins were above 15% EBITDA margins. Should we expect this kind of margins? Finally, on leveraging, I think that you mentioned over the presentation that you are now for a deleveraging process. Is that so? Should we expect deleveraging from now on, or you are just presenting and it's not so important as I'm trying to, as I'm trying to understand? Thank you very much. Okay, thank you, Antonio. I will let Miguel answer the first one. I will actually add another question, which we received on the chat, which is related to the one you posed on Sierra. I think Miguel can take both at the same time because they are related. There was a question from Alexandre Desprez on the chat. What was the driver of the improvement in the valuation of Sierra? Was it linked to interest rates? I think it is consistent with your question as well. I will let Miguel take the first one on Sierra, and then I will take the other ones. Okay, thank you, Antonio, and thank you, Alexandre, for the question. As João mentioned at the beginning of the call, we had an improvement of around EUR 40 million of NAV in this quarter. We have no updates on valuations of the assets in this quarter. This is totally related with our operation and our results. Three quarters of these evolutions came from our performance, our operational performance from the result. The other quarter came mainly from FX because we have a positive contribution from our balance sheet benefiting from a positive comparison regarding Real because we have a valuation on Real when compared to December last year, and that had a positive impact in our NAV. Sorry, just a follow-up question. That moves through the indirect income, is that right? So is the indirect income that we saw on your figures, is the FX impact? No, no. It's not related. That's a different impact and is related with the revaluations coming from the participation that we have on our assets. There was an operation in the quarter that produced that positive impact. Okay. Okay. Very good. I'll take the other questions that you posed. Starting with other businesses. Yes, we have a number of other businesses in that bucket, namely our fashion retail businesses, Sparkfood, and also Universo. We do not disclose detailed information about these segments, but what I can tell you is that all three businesses are doing extremely well. Fashion, after a few years which were a bit difficult in terms of growth and profitability, we are seeing overall a rebound of our fashion businesses with strong double-digit like-for-like growth at the beginning of the year, with a much better performance. Also, Sparkfood, after an initial few years of investments, we are now stabilizing those investments and the operating profitability of those businesses. We are seeing significant improvements in both top line and profitability in the businesses that we acquired recently. Finally, in Universo, after a year of a merger process, which was quite intense with Bankinter Consumer Finance, and after an initial year of 2024, which we were still negative in terms of earnings before tax, this year we will post significantly positive EBT levels. We are already starting to see that Q1 was the first quarter of positive EBT results for this business unit within Sonae. I would say you're right to spot that in the other businesses' performance has been positive. In Musti, yes, the idea is to go back to EBITDA margins in excess of 15%. That's what we are aiming for. That's our target. Again, it will take a few months because we are rebounding from a more difficult year of 2024, where we made significant investments in prices. We also acquired Pet City in the Baltics, which is dilutive to our margin initially. We are now starting to integrate Pet City and extract synergies that will allow us to bring the profitability of that country to levels which are more consistent with another company in the Nordics. We do expect to come back to those levels of EBITDA soon, and that is what we are working towards. In terms of leverage, it was not just a brief comment while I was presenting. This is something which is important to us. As you know, I think we have been clear about this in our previous calls. We obviously, in the last 18 months, we made very significant investments, namely in terms of acquisitions, but also in terms of operating CapEx in all our main business units. That meant that we actually increased our leverage level for the first time in many years. It was a conscious decision to take advantage of important investments and attractive investment opportunities. We brought our level of net debt to this level that we have today, and also our LTV a bit in excess of 16% at the end of 2024. Given the strong cash flow generation capacity of our businesses and also some additional capital recycling that we will continue to do in the next few years, we are very confident that we will continue to see a steady decrease in our loan-to-value at the holding level, and that will be visible throughout the year until December of 2025. Okay. We should not expect more acquisitions, or at least important acquisitions? Exactly. I wouldn't say that you should not expect any further acquisitions because we have different plans in the different business units, and some of our businesses will grow organically and also through bolt-on acquisitions. I wouldn't expect any major acquisition with the size that we saw recently, at least that we don't expect that. We are always open to analyzing opportunities that may arise. Our roadmap for the next few months entails strong organic growth and potentially some bolt-on acquisitions, but nothing to the level that we saw in the last 18 months. Okay. Thank you very much. Okay. Thank you, Antonio. Now I will hand over to the floor for web questions. Please proceed. Yeah, I think we had one question on the chat, which was already answered. If there are no further questions, thank you very much, everyone, for listening in, for asking questions. We will see you again when we present our Q2 results in July. Thank you very much, everyone. See you soon. Thank you for joining today's call. You may now disconnect.