GICS Sector : Consumer Defensive
Jerónimo Martins, SGPS, S.A. operates in the food distribution and specialized retail sectors in Portugal, Poland, and Colombia.The company operates through Portugal Retail; Portugal Cash & Carry; Poland Retail; Colombia Retail; and Others, Eliminations and Adjustments segments.It operates 3,250 food stores under the Biedronka name; and a chain of 290 health and beauty stores under the Hebe banner in Poland, as well as 819 food stores under the Ara name in Colombia.
Jerónimo Martins Group reported a 7.1% growth in sales to EUR 26.5 billion for the first 9 months of 2025, with a like-for-like growth of 2.4%. The company's EBITDA margin expanded to 6.8% from 6.6% in the same period last year, driven by sales growth, cost control, and efficiency gains. The actual EPS came out at EUR 0.35, beating estimates of EUR 0.3229. The company's financial performance was robust, with consolidated EBITDA growing by 10.9% to EUR 1.8 billion.
Publication Date: Oct -31
The Polish banner, Biedronka, continued to drive growth, adding EUR 1 billion of sales at constant exchange rates in the 9-month period. Sales in Poland grew by 7.4% to EUR 18.8 billion, with like-for-like growth at 1.8% despite challenging comparisons. Biedronka's EBITDA margin performance was driven by sales growth, cost control, and efficiency gains, and the banner continued to gain market share.
Ana Virgínia, Chief Financial Officer, highlighted that cost control measures and productivity gains were the main contributors to the evolution of OpEx as a percentage of sales. The company is navigating a challenging backdrop of wage increases and tight labor markets, but remains focused on protecting profitability. As Ana Virgínia stated, "our teams in Portugal and Poland have made significant efforts to optimize stock levels and ensure our profitability model works with working capital."
The company's working capital figures are now stabilizing, and Jerónimo Martins expects a more normal pattern from now on. The correction in the market last year penalized working capital, but the growth dynamic is now different, and working capital is better. The company's business model is highly leveraged operationally, and when there is growth, particularly without deflation, working capital works in its favor.
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Poland Retail's 7% growth is driven by Jerónimo Martins' successful expansion strategy, increasing store count and modernization efforts. Strong private label sales, effective cost management, and a growing e-commerce platform also contribute to growth. Additionally, Poland's stable economy and rising consumer spending support the segment's performance.
Portugal Retail's 6% growth is driven by Jerónimo Martins' strategic expansion into convenience stores, increasing private label sales, and investments in digital transformation, including e-commerce and mobile apps. Additionally, the company's focus on improving operational efficiency, cost savings, and effective supply chain management also contribute to its growth momentum.
Colombia Retail's 9% growth is driven by increasing consumer spending, urbanization, and a growing middle class. Jerónimo Martins' successful store format, Biedronka, has been well-received by Colombian consumers, contributing to market share gains. Additionally, the company's focus on private labels, efficient logistics, and cost control have enabled it to maintain profitability while investing in growth initiatives.
Portugal Cash & Carry's 5% growth is driven by Jerónimo Martins' strategic expansion into rural areas, increasing private label sales, and efficient supply chain management. Additionally, the segment benefits from a strong market position, high customer loyalty, and a growing demand for convenience and value-added services.
Jerónimo Martins' Others, Eliminations and Adjustments segment growth of 4% is driven by increasing other operating income, mainly from rental income and foreign exchange gains. Additionally, the company's efforts to optimize its cost structure and improve operational efficiency also contribute to this growth.
Discount supermarket chain offering a wide range of food and non-food products
Supermarket chain offering a wide range of food and non-food products
Cash and carry wholesale business offering food and non-food products
Health and beauty retail chain offering a wide range of products
Cash and carry wholesale business offering food and non-food products
Jerónimo Martins, SGPS, S.A. operates in the retail industry, where substitutes are limited. However, there is a growing trend of online shopping, which could pose a threat to the company's brick-and-mortar stores.
Jerónimo Martins, SGPS, S.A. operates in a competitive market, but its strong brand presence and loyalty programs help to reduce the bargaining power of customers.
Jerónimo Martins, SGPS, S.A. has a diverse supplier base, which reduces the bargaining power of individual suppliers. However, the company's dependence on a few large suppliers for certain products could increase their bargaining power.
The retail industry has high barriers to entry, including significant capital requirements and complex logistics. This makes it difficult for new entrants to compete with established players like Jerónimo Martins, SGPS, S.A.
The retail industry is highly competitive, with many players competing for market share. Jerónimo Martins, SGPS, S.A. faces intense competition from both domestic and international players, which could impact its market share and profitability.
| Value | |
|---|---|
| Debt Weight | 31.52% |
| Debt Cost | 5.25% |
| Equity Weight | 68.48% |
| Equity Cost | 5.25% |
| WACC | 5.25% |
| Leverage | 46.04% |
Value: 7.6
Growth: 4.1
Quality: 6.7
Yield: 8.1
Momentum: 1.5
Volatility: 7.7
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Value: 5.1
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Value: 7.7
Growth: 4.6
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Yield: 6.9
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Value: 3.0
Growth: 6.6
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Value: 4.9
Growth: 5.3
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Momentum: 0.5
Volatility: 7.0
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