Jerónimo Martins: Biedronka's LfL beats once again
JM’s Q4 sales rose 10.6% YoY, topping our forecast by 1% and BBG consensus by 2%. Notwithstanding a rather tough comp, Biedronka’s LfL reached 7.6% (HTGe 6.5%) as on top of its strong price investment it has been quite successful in capturing the macro-driven consumer trading up via its In&Out campaigns and the introduction of premium food SKUs during Christmas. In Portugal, Pingo Doce’s LfL (3% vs. HTGe 1%) and Recheio’s (6.6% vs. HTGe 3.9%) have also exceeded expectations, leveraging on stronger consumer demand and on the launch of new promotions. The weakest spot has been Ara, which despite opening more stores than we expected has missed our sales forecast by 5%. As for the readacross to our Q4 forecasts, we believe the stronger LfLs in Poland and Portugal were mostly achieved through price investment, which caps the margin upside. Thus we have raised Q4 EBITDA and EPS by just 1%, in line with the sales beat. Valuation wise, our FV ticks up Eur0.1/sh to Eur17.0 on the small EBITDA upgrade but we reiterate our Neutral rating due to the limited upside potential.Jeronimo Martins S.G.P.S. is a holding company. Through its subsidiaries, Co. is engaged as a food distribution company with operations in Poland and Portugal. Co. operates in four segments: Portugal Retail, which comprises the business unit of JMR - Gestao de Empresas de Retalho, SGPS, S.A. (Pingo Doce supermarkets); Portugal Cash & Carry, which includes the wholesale business unit Recheio; Poland Retail, which includes the business unit with the brand Biedronka; and Others, which includes marketing services and representations, restaurants in Portugal, health and beauty retail in Poland, and its retail business in Colombia.
Haitong is the first international Chinese investment bank and our goal is to be the primary channel for capital flows into and out of China. During 2015 the Senior Management Team in London was expanded significantly to focus on this objective and to provide a full-service cross-asset markets business coupled with sector-focused investment banking. We work closely with our world-wide network of offices to bring a true depth of understanding to all client situations.
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