Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on JERONIMO MARTINS. We currently have 7 research reports from 1 professional analysts.
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Lower than expected margin
24 Oct 16
Jeronimo Martins released strong Q3 sales growth leading to a 5.5% rise over the last nine months. Total sales reached €10,738m and EBITDA stood at €626,9m, i.e. an EBITDA margin at 5.8%, flat compared to 2015. The 9M net result came in at €501.6m, including gains from the Monterroio disposal for €224m. Adjusted net profit amounted to €266m, 5.6% yoy, boosted by a lower cost of debt. Biedronka remains the main driver for both the group’s top-line and profitability which offset a slight decrease in the Polish business margin (10bp). The underperformance of Ara and Hebe is more pronounced this year due to Ara’s network expansion (expected to be above 2015’s level). Despite the substantial capex, JM continues to enjoy a solid balance sheet with a lower debt burden (reaching €326m vs. €658m in 2015).
Worries about new tax dampened
21 Sep 16
Yesterday, the European Commission announced through a press release that it has opened an in-depth investigation into Poland’s tax on the retail sector. The European Commission has also issued an injunction, requiring Poland to suspend the application of the tax until the Commission has concluded its assessment. It is worth noting that Poland adopted, in July 2016, a new tax to be applied to retail companies operating in Poland. The tax entered into force on 1 September 2016, and no payments are due yet.
Successful focus on the top-line
29 Jul 16
H1 sales reached €6,958m backed by the performance of all banners despite deflation in Poland and flat food inflation in Portugal. Biedronka experienced strong lfl growth of 8.8% and sales came in at €4,678m. The network expansion sustained this performance as 40 stores were opened while 94 locations were refurbished. In Portugal, Pingo Doce’s sales increased by 3.9% and 0.3% on a lfl basis, reflecting the still negative basket inflation. In the first six months of this year, Pingo Doce opened five new stores bringing the total number of stores to 404.
Worries on the new Portuguese tax
03 May 16
A good first quarter for JM in which sales experienced a 5.9% increase to €3.4bn. The group’s EBITDA progressed well following the good sales performance, strict cost management and with Easter falling in Q1 16. The net result stood at €77m (vs. €65m in Q1 15) due to lower cost of debt (sound financial profile with gearing at 12.7%). The group continued to spend on capex, €83.4m in the quarter, i.e. 14% of planning capex for FY 16.
Managing growth and efficiencies
03 Mar 16
Jeronimo Martins’s full-year sales maintained a strong growth pace, +8.3% yoy to €13,728m, supported by positive sales momentum in all operations. Despite tougher competition and food deflation in Poland (-1.7%), Biedronka witnessed an increase in sales (+3.2% lfl) following the improvement in its offer and a selective expansion programme. During 2015, Biedronka opened 102 stores and revamped stores at a cost of almost €200m. Following the focus on sales densities in stores, the Polish business succeeded to offset the investment in price which led to an EBITDA margin in line with 2014, at 7.0%. In Portugal, Pingo Doce focused on customers’ needs by rolling-out a strong promotional strategy and diversifying its offer with the launch of 214 new private brand products. Recheio established better operational processes for fresh products, a strategic category for the company’s positioning. The Polish business has therefore beaten the competition’s concerns by experiencing positive growth driven by both Pingo Doce (3.9% lfl) and Recheio (+3.5% lfl). As for the recent activity in Colombia, the proximity food stores, Ara, moved to reinforce its presence by entering a second region as stores are performing slightly ahead of plan.
Successful expansion program
28 Jan 16
Continuous growth for Jeronimo Martins, which saw its full-year sales increase by 8.3% yoy to €13.727bn. Growth was driven mainly by an expansion program since the network was shored up and the number of stores climbed to 3107 in 2015. Deflation at the beginning of the year (mainly in Poland) was offset by the banner’s performance and a strong volume progression (even lfl growth remained strong).
N+1 Singer - Conviviality - Solid H1 update
01 Nov 16
Conviviality has issued a solid H1 trading update. Overall it’s had a good first half with the dominant Mathew Clark and Bibendum businesses growing LFL’s by >5% - this is impressive. The Retail business traded broadly in line with our expectations. Delivery on synergies remains on track. We make no changes to our above consensus forecast this morning but reinforce our Buy on growth, rating and yield considerations. The company has a Capital Markets day tomorrow.
N+1 Singer - Morning Song 01-11-2016
01 Nov 16
T Clarke has uncovered financial irregularities within the accounting function of its DG Robson Mechanical Services subsidiary. From initial investigations it appears that funds in excess of £2.8m have been misappropriated by an employee over a number of years. There is believed to be no impact on the wider T Clarke Group and, if anything, historic results may have been understated by the value of the misappropriated funds. The business operations of DGR were in the process of being transferred to T Clarke’s main London M&E business, where additional control measures are already in place. This process will now be accelerated. Whilst discoveries of this nature are always disappointing, this appears to be an isolated incident, swift action has been taken and it is confirmed that the Group remains on track to meet market expectations for the year. Next scheduled news is the trading update on 17th November.
02 Dec 16
"By late Sunday, we should have a good idea whether or not Italian Prime Minister, Matteo Renzi, will be stepping down. The polls suggest his constitutional referendum, which has effectively become a confidence vote on his premiership, will get a 'thumbs down'. No new election is actually required until February 2018, but any attempt to simply replace him with another technocrat leader could well see a public, suffering from implosion of their bad-debt laden banking system, 38% youth unemployment and an inability to stifle giant capital outflows, clamouring for a snap election. This, of course, would open the door for Bepe Grillo's Five Star Movement, whose denouncement of the Euro could, in turn, generate in a wave of similar populist referendum voting across other dissatisfied EU nations, with France's own presidential election, due to take place on 7th May, the headline this morning following Francois Hollande's overnight declaration that he has decided not to stand. The prospect of Eurozone's collapse, however, was not the driver of the US session, which started in the positive following release of strong November Manufacturing ISM data, but waned later as a sell-off amongst tech issues pushed the NASDAQ sharply down, while the Dow Jones managed to hold onto modest gains due to sustained switching into financials, as divergence between the two sectors and the rout in government bond markets since Trump's election continued. Asian shares were lower across the board, with the Nikkei suffering as the Yen found buyers amongst US$ sceptics waiting for flaws in the Trump rally to show through, which dragged the other regional markets with it. With investors now virtually taking a 25bp hike by the Fed later this month for granted, focus this afternoon is likely to centre on the important US employment report, with forecasts in the 180k to 200k range, taking unemployment to 4.8% with a modest rise in hourly earnings of around 0.1%. The UK will also report Construction PMI figures this morning while corporates due to disclose earnings or trading updates include 88 Energy (88E.L), Altona Energy (ANR.L) and Berkeley Group Holdings (BKG.L). Traders meanwhile continue to watch oil futures carefully; although prices moderated during the Asian session, sentiment following OPEC's agreement remains positive with January's light, sweet crude trading a whisker below US$51 on the Mercantile Exchange, as they weigh up expectations on the terms being upheld or the various participants instead deciding to cheat on quotas rather than give up market share to US shale producers. London equities opened in a nervous mood this morning, with the FTSE-100 down over 57 points in early trading." - Barry Gibb, Research Analyst