Jerónimo Martins: Finetuning numbers ahead of Q4
Retail sales remain quite buoyant in Poland, fuelled by record low unemployment, rising wages and unsurprisingly confident consumers. Likewise, food inflation continues to surprise on the upside leading us to raise 4Q17e LfL from 5.5% to 6.5% and FY18e LfL from 5.0% to 6.0%. The latter should help Biedronka weather the growing opex inflation in a rather heated economy and thus we still expect a flattish EBITDA mg going forward despite the recent news about high single digit total comp increases for cashiers. Overall we raise EBITDA in Poland by an avg of 2% for ‘17e-‘19e with the stronger PLN also providing a small tailwind. At the earnings level, the uplift has been watered down to 1% due to higher taxes and minorities and while we are mostly in line with BBG consensus for Q4e we are now 4% above for FY18e EPS and thus see earnings momentum finally turning into a small tailwind for the shares. The higher forecasts for Poland drove an increase in our SOTP-set FV from Eur16.5 to Eur16.9 but we maintain our Neutral rating.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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