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Edited Transcript of SON.EP earnings conference call or presentation 22-Aug-19 2:00pm GMT

Q2 2019 Sonae SGPS SA Earnings Call

Maia Aug 30, 2019 (Thomson StreetEvents) -- Edited Transcript of Sonae SGPS SA earnings conference call or presentation Thursday, August 22, 2019 at 2:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* João Pedro Magalhaes Da Silva Torres Dolores

Sonae, SGPS, S.A. - CFO & Director

* Luís Mota Duarte

Sonae Sierra, S.G.P.S., S.A. - CFO & Executive Director

* Paulo Simões

Sonae, SGPS, S.A. - CFO of Worten

* Rui Manuel Teixeira Soares de Almeida

Sonae, SGPS, S.A. - Director

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Conference Call Participants

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* João Filipe Pinto

JB Capital Markets, Sociedad de Valores, S.A., Research Division - Associate of Equities Research Portugal

* José Manuel Rito

Banco Português de Investimento, S.A., Research Division - Analyst

* Timothy Michael Attenborough

Grupo Santander, Research Division - Equity Analyst

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Presentation

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Operator [1]

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Welcome to the Sonae's First Half 2019 Results Conference Call. (Operator Instructions) I would now turn the conference over to Mr. João Dolores. Please go ahead, sir.

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João Pedro Magalhaes Da Silva Torres Dolores, Sonae, SGPS, S.A. - CFO & Director [2]

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Hello. Good afternoon, everyone, and welcome and thank you for attending Sonae's results conference call for the first semester of 2019. And together with me today, I have the CFOs of our businesses, Rui Almeida, from Sonae MC; Paulo Simões from Worten; Miguel Moreira from Sonae Fashion; Luís Mota Duarte from Sonae Sierra; and also our Investor Relations team. I will start by giving you the performance highlights for each individual business in the portfolio, and then I will cover Sonae's consolidated figures for the semester before opening up for Q&A.

Starting with the businesses. Sonae MC. Sonae MC had another strong quarter of sales performance, market share gains and underlying EBITDA growth. In the first half of the year, turnover reached EUR 2.2 billion, an increase of 10% year-on-year with a strong like-for-like growth of 3.9%, mainly driven by increased volumes. And note, regarding the expansion program, which continued with 30 new company-operated stores, which includes 5 Continente Bom Dia stores, which is, as you know, our proximity format. In terms of profitability, Sonae MC's underlying EBITDA margin increased 40 basis points. This was driven by the positive impact of transportation lease agreements, which were reviewed in Q2 and now fall under the IFRS 16 accounting standards. Without this effect, the margin would have stayed in line with last year at 9.1%.

I would also like to highlight the integration of Arenal in Spain, which is evolving according to plan. Arenal posted solid double-digit growth in the semester and is in process of executing an important expansion plan in Spain. It opened up 1 store -- 1 flagship store in the first half of the year and already 2 stores in Q3.

Looking at Worten. Worten had a better sales performance in Q2 than in Q1, with 2% like-for-like growth. In the semester, turnover stood broadly in line with last year at EUR 473 million. I would like to highlight the growth of online sales, which stood above 50% in the semester, which is good evidence of the efforts the business is doing in the digital front. On the other hand, profitability decreased when compared to last year's results, and the performance in Spain Mainland was particularly disappointing. We have decided to implement an ambitious program in Spain, targeted at improving profitability in this geography and this will happen in the near term. This program includes a reduction of local head office costs and also closing a number of loss-making stores in the coming months.

Regarding Sonae Fashion, the business achieved a very positive performance in Q2 across all brands, with a total like-for-like sales growth of 10.2%. In the first half of the year, turnover grew 7.5% like-for-like and 3.5% year-on-year. This was mainly driven by a strong omnichannel evolution across brands. This top line performance and also the ongoing transformation plan fueled the improvement in profitability. Underlying EBITDA increased EUR 2.3 million and reached a margin of 6.3% in the first semester. It's worth highlighting that all brands have been increasing in also e-commerce sales very strongly. In the semester, online sales increased by more than 30% year-on-year as a whole in the business.

ISRG, which as you know, is the entity resulting from the merger between Sport Zone and JD Sprinter, maintained a strong track record and continue to post solid growth levels. Turnover in the 6 months ending in early May increased 41% year-on-year, and EBITDA almost doubled from EUR 13 million last year to EUR 25 million this year, implying a margin of 7.8%. JD and Sprinter continued to show very positive results and the refurbished Sport Zone stores are including sales and profitability at high double-digit rate, which is also a very good sign. And this is happening by leveraging new store layouts and operating models as well as different assortments, which are more appealing to consumers, both in Portugal and in Spain. The contribution of IFRS to Sonae's accounts increased EUR 6 million year-on-year and we expect further improvements in this contribution in the near future.

Sonae Financial Services had another positive quarter, with both financial and operational indicators growing significantly year-on-year. Turnover increased by 20% year-on-year in the semester to EUR 17 million and underlying EBITDA was up by EUR 2 million, reaching a margin of 23%. The Universo Card reached another important milestone in June, it surpassed 800,000 cards and market share of total credit card production reached 12.5% in June, up from 11.3% last year.

Sonae Investment Management continues to actively manage its portfolio of investments. In the first half of the year, the company invested in 4 new tech companies in different areas, such as cybersecurity, data analytics for retail and also telco technology, mainly mobile network automation, and has recently sold its stake in both Saphety and Wedo, with the latter transaction only affecting our accounts in Q3. Regarding operational performance, in the first semester, turnover grew 30% to EUR 93 million. This was fueled by the integration of 2 new cybersecurity companies, which we recently added to the portfolio. In any case, on a comparable basis, turnover would have grown 13% year-on-year. Underlying EBITDA stood at EUR 0.3 million in the first semester, mainly influenced by the consolidation of recently acquired companies and also by a less positive performance of Wedo, which still impacted our accounts in this quarter.

Moving on to Sonae Sierra. Sonae Sierra had a quite positive growth in operational terms, registering a 4.8% like-for-like growth in tenant sales and 4.1% in rent. Proportion of EBIT increased 5.7% year-on-year to EUR 55 million in the first semester, and direct results were up 9% to EUR 36 million. These results are driven both by the positive performance of the investment portfolio and also the services division, which more than offset the impact from the sale of assets. In terms of portfolio management, Sonae Sierra completed several transactions. The main highlight is the merger agreement between Sonae Sierra Brasil and Aliansce Shopping Centers, which was already completed in Q3 and which creates one of the largest shopping center operators in Brazil. Additionally, during the second quarter, Sonae Sierra sold 3 shopping centers: Dos Mares, LeiriaShopping and Solingen. During Q2, Sonae Sierra recorded a one-off loss in the sale of one specific asset, which is the main driver behind the company's negative indirect income and also behind Sonae's nonrecurrent client, which impact consolidated EBITDA. This was a planned sale of a relatively small nonstrategic asset in a secondary location in Germany, which we co-owned with a financial investor. I must stress that it was an isolated case, which reflects specific transaction dynamics. In total, Sonae Sierra has already sold 7 assets this year, 3 assets in Q3. And apart from this case, all assets, particularly the larger investments, were also broadly in line with their book valuation.

On the development front, we would like to point out the expansions of NorteShopping and Plaza Mayor, which are evolving according to expectations. The Designer Outlet at Plaza Mayor is planned to open in Q4. And NorteShopping opened in August a brand-new food court, which represents Sierra's innovative and on-trend asset management capabilities. Those of you joining us for our Capital Markets Day in October will have the opportunity to see this new space first hand. NAV stood at EUR 1.364 billion, reducing EUR 91 million versus year-end 2018, mainly reflecting a dividend distribution of EUR 115 million.

Regarding NOS. NOS, as you know, has already announced its first half results in July, but we would just like to stress its solid performance yet again in Q2. Turnover grew 1.8% year-on-year. EBITDA increased by 2.8% and net results also increased by 6.4%. The company's transformational plan is on track, and we are witnessing a good free cash flow generation momentum in the company right now.

Finally, looking at our consolidated figures. Sonae showed a solid performance overall in the first half of the year. Turnover increased 11% year-on-year to almost EUR 3 billion, and underlying EBITDA grew EUR 48 million, up 24% to EUR 243 million. This positive underlying EBITDA evolution, coupled with a growth in the equity method results of EUR 25 million, more than offset the negative evolution in nonrecurrent items and led EBITDA to increase 10% year-on-year to EUR 284 million.

All in all, net income group share stood at EUR 38 million, down from last year's EUR 80 million, and this decrease is more than explained by the strong capital gain registered last year related to the Outsystems transaction.

Regarding our capital structure, and on a comparable basis, Sonae's net debt decreased by EUR 131 million year-on-year to EUR 1.19 billion. Considering all asset acquisitions and disposals in the last 12 months, total net debt stood at EUR 1.76 billion at the end of June, after the dividend payments of EUR 88 million. Gearing at the group level continued to decrease and reached 0.5x, and funding costs and average maturities remained at very comfortable levels. All the companies in the portfolio maintained conservative balance sheets. Sonae MC posted a 2.3x net debt to underlying EBITDA level versus 2.7x last year. NOS registered a financial net debt to EBITDA of 2x, in line with last year, and Sonae Sierra's LTV decreased to 29%, and the holding LTV stood at 14%.

So overall, we are quite pleased with this set of results, and looking forward, we will remain focused on driving the good operational performance of our businesses up till the end of the year. And we will also continue to pursue our strategy of unlocking the value across the portfolio, which should enable us to further strengthen our balance sheet in the near term. I will now end this brief overview of our first half results and invite all of you to ask questions.

You can please open the session for Q&A. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We will now take our first question.

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Timothy Michael Attenborough, Grupo Santander, Research Division - Equity Analyst [2]

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Can you hear me okay? It's Tim from Santander.

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João Pedro Magalhaes Da Silva Torres Dolores, Sonae, SGPS, S.A. - CFO & Director [3]

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Yes. I hear you.

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Timothy Michael Attenborough, Grupo Santander, Research Division - Equity Analyst [4]

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A few for me, if I may. So great like-for-likes at Sonae MC. You say it's mostly volume. What was the grocery to inflation -- the inflation in the quarter? I think it was a little under 1% in the first quarter. And can you quantify what the Easter impact was? And what sort of momentum should we look at going into Q3? Can you sort of tell us about what the exit rate is, please?

And also on MC, the EUR 8 million IFRS Q2 impact, I mean what you're trying to say is realistically we should make a prior year adjustment, seems to be the message. So I was a bit surprised that there was not sort of a little bit more operational leverage coming through, given the very strong like-for-likes.

I will -- yes, and then on Sonae Sierra, that EUR 115 million dividend, can we expect to sort of repeat of that in the coming years? I mean I think it's just a function of asset sales and capital recycling. So a comment on that, if I may?

And one last one. No sale and leasebacks, I think, in the whole of the first half. Has this process stopped? Or is it just sort of on pause for the moment? I'll leave it at that for now and let someone else have a go at it.

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João Pedro Magalhaes Da Silva Torres Dolores, Sonae, SGPS, S.A. - CFO & Director [5]

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Tim, I will hand it over to Rui to answer the Sonae MC questions, including the one on sale and leaseback, and then I will ask Luís to cover the Sonae Sierra one. Rui?

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Rui Manuel Teixeira Soares de Almeida, Sonae, SGPS, S.A. - Director [6]

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Okay. Tim, this is Rui Almeida speaking. Regarding the inflation rate, in the second quarter it was around 0.1%. And the Easter impact, we said in the last -- our last meeting where we -- last conference call where we had around about 2%, 2 percent points. Because as we -- last time we were together, we said that the first quarter sales were impacted by the Easter effect. The -- without that impact, our like-for-likes would be higher comparing to what we presented in the very first quarter.

Regarding the EBITDA margins, yes, they are impacted by the fact that we were reviewing and completing the -- all the additional transportation lease agreements according to new standards of IFRS 16. Yes, we could -- we are investing a lot, we are growing a lot -- we grew a lot in terms of like-for-likes during the first semester. We grew almost 4%. And we are very happy with the levels of EBITDA margins as we continue to present very high levels of EBITDA margins. And as we explained, they are very standard figures -- sorry, our benchmark figures that we will need to continue to have in our company and we need to maintain those levels that we feel very confident and very comfortable with.

Regarding the third question you raised was related with the sale and leasebacks, right?

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Timothy Michael Attenborough, Grupo Santander, Research Division - Equity Analyst [7]

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Yes. Yes, indeed.

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Rui Manuel Teixeira Soares de Almeida, Sonae, SGPS, S.A. - Director [8]

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So regarding the sale and leaseback, we want the -- we have, in the past, was -- basically, we continue to have the ambition to maintain 40% of our freehold in our portfolio of assets. We are very keen to continue to use assets to sort of very opportunistic build that we intend to have in our portfolio. So if we see any -- a very good opportunity to take into account, we will consider that or to capital recycle in order to continue to have those 40% in our freehold. In our portfolio, I mean we continue to grow in our company because we will continue to invest heavily in the areas that we show underpenetrated, comparing it to our competition and in Portugal as well in the proximity segments in terms of supermarkets.

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Timothy Michael Attenborough, Grupo Santander, Research Division - Equity Analyst [9]

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Okay, Rui. Just -- can I just confirm, sorry, the inflation number that you first gave me, was it 0.1% or 0.9%?

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Rui Manuel Teixeira Soares de Almeida, Sonae, SGPS, S.A. - Director [10]

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0.1%. 1 point.

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Timothy Michael Attenborough, Grupo Santander, Research Division - Equity Analyst [11]

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0.1%. Okay.

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Rui Manuel Teixeira Soares de Almeida, Sonae, SGPS, S.A. - Director [12]

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Or at least it's the figure that we had.

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Timothy Michael Attenborough, Grupo Santander, Research Division - Equity Analyst [13]

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Okay. And just also on the exit rate, what's the momentum like going into 3Q and are you seeing people trading up?

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Rui Manuel Teixeira Soares de Almeida, Sonae, SGPS, S.A. - Director [14]

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Yes. Well -- yes, people are continuing to trading up in our -- at least in the Portuguese market. There are several categories that are benefiting from that situation because the momentum -- we have benefited from a very good momentum in the Portuguese market. So people continue to trade up -- trading up in several categories [continuing] in our stores. So we are seeing a very positive momentum.

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João Pedro Magalhaes Da Silva Torres Dolores, Sonae, SGPS, S.A. - CFO & Director [15]

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Okay. Luís?

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Luís Mota Duarte, Sonae Sierra, S.G.P.S., S.A. - CFO & Executive Director [16]

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This is Luís from Sonae Sierra. So in terms of your question around our dividends, our dividend policy reflects 2 factors. One is we typically distribute a percentage of our operational profit. And we distribute also part of the proceeds from sale of our assets. The part we distribute if we agreed on a specific basis. The EUR 115 million you've seen, that we paid this year, is a result of the significant asset sales that we did over the course of the last year. We are currently in the market conducting asset sales. So the dividends that we will pay going forward represent that share of the operating profit, but also the rate at which we reinvest and the rate at which we do conduct asset sales.

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Timothy Michael Attenborough, Grupo Santander, Research Division - Equity Analyst [17]

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Okay. So I shouldn't be looking for a sort of a similar number for next year, given that you saw significant asset sales last year?

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Luís Mota Duarte, Sonae Sierra, S.G.P.S., S.A. - CFO & Executive Director [18]

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It's very difficult to say, Tim. It depends really on the rate of asset sales.

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Operator [19]

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We will now take our next question.

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João Filipe Pinto, JB Capital Markets, Sociedad de Valores, S.A., Research Division - Associate of Equities Research Portugal [20]

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Can you hear me?

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João Pedro Magalhaes Da Silva Torres Dolores, Sonae, SGPS, S.A. - CFO & Director [21]

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Yes.

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João Filipe Pinto, JB Capital Markets, Sociedad de Valores, S.A., Research Division - Associate of Equities Research Portugal [22]

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João Pinto from JB Capital Markets. The first one is on Sonae MC. Could you please tell us how the market share has evolved since the beginning of the year? And second question on Worten and this new program in Spain, could you please give us some color on the amount of cost that you expect to spend in this program and how many stores do you expect to close?

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João Pedro Magalhaes Da Silva Torres Dolores, Sonae, SGPS, S.A. - CFO & Director [23]

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Okay. Rui, can you take the first question, then Paulo will take the second one.

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Rui Manuel Teixeira Soares de Almeida, Sonae, SGPS, S.A. - Director [24]

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Yes, sure. Regarding market share, we increased our market share according to our calculation, our estimates, between 20 to 30 basis points in the Portuguese market in the first semester of this year.

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Paulo Simões, Sonae, SGPS, S.A. - CFO of Worten [25]

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Regarding Worten. So we have decided to move ahead with the transformation in the business [adapting] Worten to the competitive contract we have in Spain and that we foresee going forward.

So we have decided to close 9 stores that we see -- we saw that they are not economically recoverable in the foreseeable future. So we've decided to close them. Those 9 stores, with that movement, we should be able to -- in addition to some savings in the headquarters, in total, we should be able to save on a yearly basis around EUR 3 million. So that's our expectation.

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João Filipe Pinto, JB Capital Markets, Sociedad de Valores, S.A., Research Division - Associate of Equities Research Portugal [26]

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Just a quick follow-up. You should save on a yearly basis EUR 3 million, but do you have costs, upfront costs with this program, with I don't know people and so on?

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Paulo Simões, Sonae, SGPS, S.A. - CFO of Worten [27]

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Yes. Obviously, with the movement that we are doing, we have some cost of closing the stores with the people that we have involved and some with real estate owners. But that's a bit too soon to say because we are still in the negotiation with all those parties. So it's a bit soon to say.

And we've said that we think that as far as underlying EBITDA level this year, it should have a neutral impact. Between savings and cost, underlying EBITDA should not move a lot for the year.

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Operator [28]

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We will now take our last question.

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José Manuel Rito, Banco Português de Investimento, S.A., Research Division - Analyst [29]

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José Rito from Caixabank BPI. So my first question is on Sierra, the cash in with the sale of assets in Q2, in the release it is mentioned EUR 450 million of open market value, but how much was this in terms of NAV impact attributable to Sierra? If you could provide a little bit more color on this, it would be good for us.

Second question on Sonae MC. A question regarding Mercadona. If you have felt any impact in the surrounding stores or in any specific category related to this? And also in terms of margin optimization that you expect greater flattish margin going forward, have you noticed any changes in terms of competition due to Mercadona? That would be my second question on this.

And finally on Worten. Just a follow-up, you mentioned this EUR 3 million potential impact to EBITDA level from the restructuring that you planned for this business, but is this enough to be at breakeven in terms of EBITDA in Spain? That's it.

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João Pedro Magalhaes Da Silva Torres Dolores, Sonae, SGPS, S.A. - CFO & Director [30]

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Okay. So let's start with Luís answering the Sierra question, then we'll move on to Rui (inaudible).

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Luís Mota Duarte, Sonae Sierra, S.G.P.S., S.A. - CFO & Executive Director [31]

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Actually, I'm not -- not much I understood from the question, but let me try to answer it and if it's not what you're looking for, let me know. But the EUR 115 million that was mentioned is around the -- is basically dividend that Sierra paid to the shareholders, Grosvenor and to Sonae shareholders.

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José Manuel Rito, Banco Português de Investimento, S.A., Research Division - Analyst [32]

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No, no, no. I was mentioning -- in the release, you mentioned EUR 450 million open market value of assets that you took, right? And I was asking how much is the NAV cash in attributable to Sierra?

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Luís Mota Duarte, Sonae Sierra, S.G.P.S., S.A. - CFO & Executive Director [33]

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Okay. The reduction in NAV from the sales is around EUR 62 million. So that's the NAV of the assets that we sold. I hope that was your question.

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José Manuel Rito, Banco Português de Investimento, S.A., Research Division - Analyst [34]

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Yes. EUR 52 million?

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Luís Mota Duarte, Sonae Sierra, S.G.P.S., S.A. - CFO & Executive Director [35]

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EUR 62 million. 6-2.

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João Pedro Magalhaes Da Silva Torres Dolores, Sonae, SGPS, S.A. - CFO & Director [36]

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Okay. Rui, can you answer the second on Mercadona, please?

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Rui Manuel Teixeira Soares de Almeida, Sonae, SGPS, S.A. - Director [37]

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Yes, sure. Well, regarding -- regarding the Mercadona. Mercadona is a very strong player. As you know, we have a lot of respect for them, considering they have been doing a tremendously very good job in Spain and getting a very good market share -- very, very important market share in Spain as well. But it's too early to give you some -- very important conclusions on what is the first impression in Portugal, yes. But we only had opened the first store in the beginning of -- the first store was in the beginning of July. It's too early to give you impact in terms of -- let me give you some figures in terms of impact. Up to now, there are no material impact now in our top line performance. There are only 4 stores and this is not -- it's not as important as other players entering the market or even a player in the Portuguese market that's opened a new store in the Portuguese market.

Regarding the other issues that you were mentioning, regarding what is the most important conclusion that we get from a very important player entering the Portuguese market? Well, regarding the pricing policy, they have a very different pricing policy comparing to ourselves, they use the everyday low price -- pricing policy. We use a totally different pricing policy, we have a high-low pricing policy that we believe this is more suitable to the Portuguese consumption patterns. We continue to have sort of very good advantages because we have a loyalty program with a -- much more information that continues to give us very good advantage in terms of planning the promotional strategy and be very good both in terms of efficiency and effectiveness. And we feel very comfortable to continue to pursue other strategies to continue to lead the market, even considering that this very important player, Spanish player, is coming to Portugal with transport as they announced for this year.

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José Manuel Rito, Banco Português de Investimento, S.A., Research Division - Analyst [38]

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But just a follow-up, has Sonae decided to be a little bit more aggressive on prices due to Mercadona in some situations following the opening, are you seeing other players doing that or not exactly?

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Rui Manuel Teixeira Soares de Almeida, Sonae, SGPS, S.A. - Director [39]

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No. No. Not -- but generally -- I cannot tell you that precisely because what we generally are doing, what the company is generally doing is a, sort of, promotional activity when they are launching -- competitors are launching a very specific storefront because we are doing -- we launched 1 store, [almentalea] in the fall. We see that some competitors, but not all, they generally constitute of special campaigns and promotional activity in order to fight against that, right? Basically what competitors do across the country -- across the world, in fact, in order to compete when a new player is entering in a -- especially a specific market, frankly I don't know if we can say, I think it's very -- too soon to say if we will have a different price positioning or a different pricing -- different margin positioning towards this market because I think it's too soon. Even the range. We didn't change a lot in the -- in fact, we didn't change the range. We are improving the range, as we are improving every day the range to offer to our customers according to the [offers] we offer to our customers. So frankly, I don't see much difference between what we were having last year, for instance, and what we are having today

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João Pedro Magalhaes Da Silva Torres Dolores, Sonae, SGPS, S.A. - CFO & Director [40]

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Okay. Paulo?

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Paulo Simões, Sonae, SGPS, S.A. - CFO of Worten [41]

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José, but as you know, we see Worten as an Iberian operation and we have a lot of integrated activities. So we are not seeing this in Portugal and Spain. And overall, obviously the savings that we have with closing the stores and the restructuring, some restructuring in Spain, will be supportive for the future results of Worten. But I will not add much more to that.

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José Manuel Rito, Banco Português de Investimento, S.A., Research Division - Analyst [42]

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Okay. But can you confirm that you are -- well, I understand that it's basically an Iberian operation, but it seems that the focus of the restructuring is in Spain. So basically, I was trying to get a little bit -- some sense of how much it could represent Spain in Iberian space in terms of EBITDA contribution?

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Paulo Simões, Sonae, SGPS, S.A. - CFO of Worten [43]

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Yes, we don't disclose EBITDA by geography. So we will not be doing that right now. Again, we see this as an Iberian operation. And obviously, what we have started to do was to close stores that we didn't foresee as being economically recoverable in the future. So that was the main reason we have decided to close the stores. The Spanish market is clearly more adaptive and much more competitive than the Portuguese one. So there are some stores that we thought that will defeat this level of competitiveness, and we decided to move accordingly and adopt the business model in this geography. So we'll introduce going forward, but that's all.

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José Manuel Rito, Banco Português de Investimento, S.A., Research Division - Analyst [44]

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Okay. Okay. But can you confirm at least, following the closure of these 9 stores, all the stores will be positive EBITDA contribution, at the store level at least?

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Paulo Simões, Sonae, SGPS, S.A. - CFO of Worten [45]

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Well, it will depend a lot on how the market will evolve going forward obviously and we will be attentive as we were up to date looking at opportunities to improve the portfolio of stores in Worten, in whatever geography that we are working in and Spain is not an exception to that. So we'll be looking for opportunities to improve going forward.

For the moment, these are the ones that we have decided that we should move ahead and close.

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Operator [46]

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There are no further questions at this time.

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João Pedro Magalhaes Da Silva Torres Dolores, Sonae, SGPS, S.A. - CFO & Director [47]

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Okay. So thank you very much, everyone, for all the questions, and looking forward to speaking with you again in our Q3 results conference call.

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Operator [48]

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Thank you. That does conclude our conference for today. Thank you all for participating. You may all disconnect.