Jeronimo Martins SGPS S/A

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.
  • TickerJMT
  • ISINPTJMT0AE0001
  • ExchangeEuronext Lisbon
  • SectorFood & Drug Retailers
  • CountryPortugal

Analysts

João Calado ...
  • Kamilė Bertašiūtė

BiG Research PSI20 Note: Jerónimo Martins Initiation of Coverage

BiG Research - PSI20 Note: Jerónimo Martins Initiation of Coverage Jerónimo Martins is committed to grow the business by continuous store expansion in all the markets, where it is present. The highest growth opportunities are viable in Health & Beauty sector in Poland, where Hebe is present (revenue growth +25% in 2018) and food retail in Colombia, where Ara is operating (revenue growth +48%). However, the two banners are not expected to achieve the scale, which Biedronka or Pingo Doce has, consequently they can contribute to the total revenues by 5-7% in the medium term. Moreover, Ara and He...

Christian Guyot

INVEST SECURITIES - JERONIMO MARTINS (VENTE, OC 13,2€ vs 12,9€) : Le levier opérationnel plafonne

Research Team

Focus: downgrading BGEO to SELL (new PT GBP 15.8) and TBC to HOLD (new PT GBP 17.1); Turkey macro – healing slowly; OPAP’s CFO to depart in September 2019; Kernel’s 4Q19 grain volumes up 57% yoy; Jeronimo Martins’ 2Q19E preview

HEADLINES: • Georgian banks: feeling the heat (BGEO downgraded to SELL and TBC downgraded to HOLD) • Turkey macro: healing slowly • OPAP: CFO to depart in September 2019 • Kernel: 4Q19 grain volumes up 57% yoy NEUTRAL • Jeronimo Martins: 2Q19E results preview (due on 25 July) • Short News (CEZ)

Research Team

Focus: transferring coverage of Tekfen Holding with a HOLD and a TRY 29.74 PT; Polish banks – Polish parliament to resume works on president’s FX mortgage support fund bill; Polish retail tax likely to become effective in September 2019E

HEADLINES: • Tekfen Holding: a defensive play losing momentum (HOLD - transfer of coverage) • Polish banks: Polish parliament to resume works on president's FX mortgage support fund bill NEGATIVE • Polish retail: tax likely to become effective in September 2019E NEGATIVE • Immofinanz: expects revaluation gains of around EUR 100m in 1H19E results POSITIVE • Georgian banks: notes from Tblisi - still battling uphill • CEZ: SCNE proposes CEZ pay for new nuclear, government to approve next week NEUTRAL • Benefit Systems: CFO resigns from board NEUTRAL • Ulker: to provide USD 60m as capital advan...

Research Team

The Rear-View Mirror – EME markets: Strong month for telecoms, up 11.5% overall in June

EME Equity Market – June 2019 Market performance – ISE30 index the best performer in June, gaining 6.7% in LCU. Other markets were generally stronger in June than in May, with the MSCI EME gaining 6.3% mom in local currency (vs. 0.9% mom in May). Turkey’s ISE30 index gained 6.7% mom, while the ASE increased by 4.6% mom. Bucharest’s BET and Moscow’s MOEX indices gained 3.8% mom each in June, while the Polish WIG20 increased by 3.9% mom. On the other hand, the Czech Republic PX fell 0.2% mom, while Hungary’s BUX dropped 1.5% mom. (All in local currencies.)

João Calado ...
  • Kamilė Bertašiūtė

BiG Research PSI20 Note: Jerónimo Martins Initiation of Coverage

BiG Research - PSI20 Note: Jerónimo Martins Initiation of Coverage Jerónimo Martins is committed to grow the business by continuous store expansion in all the markets, where it is present. The highest growth opportunities are viable in Health & Beauty sector in Poland, where Hebe is present (revenue growth +25% in 2018) and food retail in Colombia, where Ara is operating (revenue growth +48%). However, the two banners are not expected to achieve the scale, which Biedronka or Pingo Doce has, consequently they can contribute to the total revenues by 5-7% in the medium term. Moreover, Ara and He...

Christian Guyot

INVEST SECURITIES - JERONIMO MARTINS (VENTE, OC 13,2€ vs 12,9€) : Le levier opérationnel plafonne

Research Team

The Rear-View Mirror – EME markets: Strong month for telecoms, up 11.5% overall in June

EME Equity Market – June 2019 Market performance – ISE30 index the best performer in June, gaining 6.7% in LCU. Other markets were generally stronger in June than in May, with the MSCI EME gaining 6.3% mom in local currency (vs. 0.9% mom in May). Turkey’s ISE30 index gained 6.7% mom, while the ASE increased by 4.6% mom. Bucharest’s BET and Moscow’s MOEX indices gained 3.8% mom each in June, while the Polish WIG20 increased by 3.9% mom. On the other hand, the Czech Republic PX fell 0.2% mom, while Hungary’s BUX dropped 1.5% mom. (All in local currencies.)

Fani Tzioukalia ...
  • Gabriela Burdach
  • Jakub Mician
  • Lukasz Wachelko, CFA
  • Stefan Lungu, CFA

CEE Consumers: Sometimes it’s good to be behind the curve (coverage universe update)

While the retail Armageddon is accelerating in the US and is becoming a more visible phenomena in WE, our markets appear to still be in a growth mode and thus very far behind the global curve. The Turkish and Russian markets are being driven by secular development; Poland and Greece are benefiting from cyclical upsurges; and we see both these factors as present in Romanian market. On top of this, we also see the growth of Polish retailers being boosted by a successful transformation into the omnichannel model. Overall, we expect our CEE retail universe to grow at median 2018-20E CAGRs in sales...

Lukasz Wachelko, CFA

WOOD Flash – Polish retail sector: retail tax saga – season 2

Yesterday morning (15 May), the General Court of the European Union caught the market, corporates and Polish lawmakers by surprise, by annulling the European Commission’s ruling to block the introduction of a progressive retail tax in Poland. As a result, we see a material probability that, from January 2020, Polish retailers will pay tax on their offline revenues, at a rate between 0.8% and 1.4%. We expect the largest hit for the FMCG retailers (14-17% of EBITDA in the worst case, on our estimates), while the impact on non-food players should be muted (3-5%).

Research Team

Focus: downgrading BGEO to SELL (new PT GBP 15.8) and TBC to HOLD (new PT GBP 17.1); Turkey macro – healing slowly; OPAP’s CFO to depart in September 2019; Kernel’s 4Q19 grain volumes up 57% yoy; Jeronimo Martins’ 2Q19E preview

HEADLINES: • Georgian banks: feeling the heat (BGEO downgraded to SELL and TBC downgraded to HOLD) • Turkey macro: healing slowly • OPAP: CFO to depart in September 2019 • Kernel: 4Q19 grain volumes up 57% yoy NEUTRAL • Jeronimo Martins: 2Q19E results preview (due on 25 July) • Short News (CEZ)

Research Team

Focus: transferring coverage of Tekfen Holding with a HOLD and a TRY 29.74 PT; Polish banks – Polish parliament to resume works on president’s FX mortgage support fund bill; Polish retail tax likely to become effective in September 2019E

HEADLINES: • Tekfen Holding: a defensive play losing momentum (HOLD - transfer of coverage) • Polish banks: Polish parliament to resume works on president's FX mortgage support fund bill NEGATIVE • Polish retail: tax likely to become effective in September 2019E NEGATIVE • Immofinanz: expects revaluation gains of around EUR 100m in 1H19E results POSITIVE • Georgian banks: notes from Tblisi - still battling uphill • CEZ: SCNE proposes CEZ pay for new nuclear, government to approve next week NEUTRAL • Benefit Systems: CFO resigns from board NEUTRAL • Ulker: to provide USD 60m as capital advan...

Research Team

Focus: Polish gencos – parliamentary committee approves amendment in power freeze law; Energa reaches settlement with defendant's wind farms; Jeronimo Martins – 10 workers arrested for corruption; PGNiG increases size of LNG contract

HEADLINES: • Polish gencos: parliamentary committee approves amendment in power freeze law • Energa: reaches settlement with defendant's wind farms POSITIVE • Jeronimo Martins: 10 workers arrested for corruption NEGATIVE • PGNiG: increases size of LNG contract • EME Strategy: FTSE4GOOD indices Semi-Annual Index Review NEUTRAL • Short News (OPL, HTO)

Research Team

Focus: transferring coverage of OPAP with a BUY and a new EUR 12.2 PT; keeping our BUY on Mytilineos, with lower EUR 12.5 PT; Polish retail sector – retail tax saga – season 2; National Bank – feedback from investor day

HEADLINES: • OPAP: the odds are good (BUY - transfer of coverage) • Mytilineos: plant(ing) the seed (stays BUY) • Polish retail sector: retail tax saga - season 2 • National Bank: feedback from investor day • Rostelecom: recommends RUB 2.5 DPS from 2018 NI NEUTRAL • Petrol Group: 1Q19 review - strong quarter, 13% EBITDA beat POSITIVE • JSW: 1Q19 financial results - above consensus on better cost performance POSITIVE • 11 bit studios: 1Q19 results in line with our expectations, below the market consensus NEUTRAL • Energa: 1Q19 preliminary results - 12% EBITDA miss, due to weak sales resul...

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