Portugal’s Jerónimo Martins Group saw its profits soar 33% to €558 million in the first nine months of its financial year, driven by strong sales growth, particularly in its Polish chain, Biedronka.
Group sales were up by 22.1% to €22.5 billion in constant currency, while EBITDA increased by 18% to €1.6 billion, the company added.
In the third quarter, sales increased by 22.0% to €7.9 billion (+17.4%, excluding the exchange rate effect), and EBITDA rose 12.9% to €586 million.
Poland
Polish Supermarket chain Biedronka generated 70% of total group sales, reaching €15.8 billion in constant currency (up 24.2% year on year), and accounted for 85% of overall EBITDA, or €1.35 billion (up 20.9% year on year).
In the third quarter, sales were up 23.8%, to €5.5 billion, with volume growth outperforming the market.
However, the price investment and cost inflation reduced the EBITDA margin to 8.6% compared to the first nine months in the previous fiscal.
Biedronka opened 92 new stores in this period (78 net additions) and remodelled 270 outlets.
Portugal
The performance in Portugal was driven by the company's focus on differentiation and improving the store experience, as well as the strong performance of the cash-and-carry sector, supported by the recovery of tourism in Portugal.
Pingo Doce maintained a strong promotional campaign, helping to drive sales growth and strengthen the brand's competitiveness and volume performance.
Nine-month sales grew 8.8%, with LFL sales increasing 8.4%, to reach €3.5 billion. In the third quarter, sales rose 9.3%, with LFL sales (excluding fuel) up 8.8% to €1.3 billion.
Pingo Doce opened eight new stores, closed one, and remodelled 36 locations during the period.
Its cash-and-carry banner Recheio saw sales growth of 18.1% in the first nine months, with LFL sales increasing by 16.7%, exceeding €1 billion – a first for the company in a nine month period.
In the third quarter, sales increased 10.3% to €371 million (+9.5% on LFL basis).
Colombia
Amid a difficult consumer environment, sales in Colombia reached €1.8 billion (+35.5%) at constant currency in the first nine months and €666 million (+42.5%) in the third quarter.
EBITDA amounted to €31 million, while EBITDA margin stood at 1.8%, down from 3.3% a year earlier, reflecting the price investment, the negative impact of trading down on the margin mix, and the low maturity of many stores.
Ara added 151 new stores in the nine-month period with a network comprising around 1,241 locations.
Outlook
Group president Pedro Soares dos Santos warned that the company will continue to face pressure in the coming months due to the sharp drop in food inflation and the strong cost inflation, while the ongoing war in Ukraine and the escalation of tension in the Middle East could impact consumer confidence.
Despite the challenges, Jerónimo Martins remains committed to its long-term objectives and plans to invest around €1 billion in 2023, with around 45% of that going to Poland.
