The decision to float Jerónimo Martins on the Lisbon Stock Exchange was made by Alexandre Soares dos Santos, my father, and his too was the ultimate responsibility for the vision and strategy that steered the Group’s vigorous growth over more than 45 years.
The idea of going public resulted essentially from a strategy of reorganising its ownership structure in order to establish clear leadership and secure the funding for ambitious expansion plans, in Portugal and abroad, in the context of the country’s recent membership of the European Economic Community.
Rapid growth in the economy offered room for growth if companies had the courage to believe that the new financial instruments, then emerging, could be crucial in paving the way for the heavy investment that such a course would require. It was possible to anticipate that stock and bond issues would provide a path forward for businesses, such as Jerónimo Martins, averse to an over-reliance on bank borrowing.
Looking back, it has to be acknowledged that the decision to float the company on the stock exchange represented much more than a funding operation. Of course, it allowed us to start mapping out a strategy for international expansion that was to bear fruit in our move into the Polish market (which for some years has been the Group’s main business sector, and also the principal driving force for growth and profitability) and also, albeit alas with a rather different outcome, into Brazil.
It also made possible the series of acquisitions and process of organic growth through which we gradually built our leadership position in the Food Retail sector in Portugal. But the fact of going public — and the importance of this gain should be forcibly stressed — also demanded from management a commitment to transparency and respect, increased discipline and a carefully nurtured culture of dialogue and accountability, not just to shareholders (majority and minority), but also to all those with a stake in the life and business of the companies.
The permanent scrutiny to which a Group of the size of Jerónimo Martins is subject — by shareholders, investors, analysts, employees, consumers, the media, NGOs, partners and others — has always encouraged us to do better. The public exposure entailed by having the shares listed on the market developed our self-awareness, and with it the standards we set ourselves and our sense of responsibility.
We are proud of our history of creating value and that, for most of these thirty years, we have succeeded in living up to the expectations of those who entrusted their investments to us. In the first place, of course, this means being profitable. However, we are well aware that, in an uncertain and complex world, financial results are a necessary condition for meriting the trust of the markets, but they are far from being enough.
Just as important is the way in which we arrive at the profits we distribute and our respect for the environmental and social standards we have built into our business decisions. In the past decade, the inclusion of Jerónimo Martins in many of the leading sustainability indexes has, for shareholders and employees, added to our sense of responsibility and also of pride.
The history of the past three decades is one of more ups than downs, although we can be thankful for our setbacks, for instilling much of the strength and resilience with which we are now accustomed to face our challenges. Over the years, and above all at times of greater stress, the stability conferred by the existence of a family-based majority shareholder has allowed management to stay focused on the long term and to keep our values central to our decisions.
Celebrating the moment when we mark the thirtieth anniversary of a milestone in the contemporary history of a company whose origins date back to the late eighteenth century, we aim at contributing to our understanding, and acknowledgement, of the inextricable link between private enterprise and economic development on the one hand, and the capital markets on the other.
Pedro Soares dos Santos
Chairman and Chief Executive Officer
