At the beginning of last year, when I wrote about our performance in 2019, I began by reflecting on the high uncertainty the world was facing, the crisis of multilateralism and the aggravation of the trend towards the polarisation of societies. Tensions between the U.S. and China saw the latter record its lowest economic growth in nearly three decades, alongside a significant global slowdown and concerns about rising poverty.

In the first quarter of 2020, the outbreak of the Covid-19 pandemic followed by its alarming progression during the year had an enormous and large-scale impact, with the number of infections worldwide exceeding 110 million at the end of February this year, placing significant pressure on national health systems and killing nearly 2.5 million people.

As I write this message, implementation of the vaccination programme across the globe is haphazard and the virus continues to spread in all corners of the globe, albeit with varying levels of severity.

The pandemic has increased uncertainty and exacerbated inequalities and social fragmentation, on the one hand, and the crisis of multilateralism, on the other, threatening to reverse years of effort to fight poverty and further weaken the prospects for global cooperation and, ultimately, peace.

As a result of the evolution of the pandemic and the measures put in place to halt its progression, the global economy suffered a colossal collapse in 2020, two times worse than in the 2007/2008 financial crisis. And, as always, the recession has not affected everyone equally. The poor, young people, and the low-skilled are just some of the groups most affected by the crisis which has struck countries differently, given that the wealthier nations had budgetary capacity to implement support measures to offset the closing of economies, while the majority of the world’s countries did not.

The effects of the pandemic in the widening of inequalities will be felt for many years to come, perhaps even generations. Digitalisation itself, always touted as a solution to reducing inequalities in a world where access to information and knowledge can be available anywhere and at any time, instead, is worsening the divide. In many parts of the world there are no infrastructures, no connectivity, no equipment and devices, in other words, there is no digital world. In most countries, including the ones where we do business, a significant percentage of the population, particularly children and young people, did not have the resources – computers and an internet connection – to migrate to remote education when schools closed.

The sudden reduction in the income of millions of people will force many to make choices, and education, the best route out of poverty, is at risk of being sacrificed.

The World Bank has a sombre outlook which, due to Covid-19, estimates that at the end of 2021 there will be more than 150 million people in extreme poverty around the world compared to what was expected pre-Covid.

All the world’s attention has been on the pandemic, overshadowing increasing global geopolitical tensions. The race by the various blocs to be the first to purchase vaccines has revealed just how little global solidarity there is. China led the Covid-19 response and was the only major power to record economic growth. The U.S. saw an attempt to remove former-president Trump from office, who lost the election – unusual for a president seeking re-election –, and tensions erupting in the streets in the aftermath of the killing of George Floyd by police officers, with racial protests crossing borders and spreading around the world.

Indeed, while it is true that one of the lessons learned from the pandemic is that there is a deep interdependence among human societies in times of globalisation, it is also true that there is an increased risk of the self-centredness of countries, with obvious difficulty in aligning strategies and a huge asymmetry in their capacity to protect their peoples. While the majority of European countries, for example, expect to have 60% to 70% of their population vaccinated by the end July 2021, more than 85 poor countries will not have widespread access to vaccination against SARS-CoV-2 before 2023, in the best case scenario.

If achieving the 2030 Agenda and the Sustainable Development Goals (SDGS) set by the United Nations – which marked its 75th anniversary in 2020 –, was already difficult before the Covid-19 pandemic struck, it will certainly be even more so in a post-pandemic world, in particular the first and most pressing goal, on which many of the other goals depend: end poverty in all its forms everywhere.

By breaking out during year one of what will be the most demanding decade for achieving the shared vision for humanity embodied in the 2030 Agenda and its 17 SDGs, the pandemic has increased the risk of failure and has forced us to effectively acknowledge that is it only through collective action, solidarity and cooperation that we will be able to overcome the enormous challenges humankind faces on planet Earth.

All this has placed the debate on the role companies and businesses play in society at the centre of the agenda. For our part, we take on the responsibility of and commit to being a company that is as responsible as possible.

Responsible, from the outset, for the earnestness and determination with which we carry out our business of food distribution, the social importance of which became evident to all during the pandemic. Never before have we seen such social recognition of, and even gratitude for, occupations that cannot be put on hold, that cannot self-isolate because they are at the service of what is essential to life as we know it.

Despite the pandemic progressing differently in the countries where we operate, leading to very different approaches and responses by the respective governments and national health authorities, our teams, particularly those who carry out functions in stores and distribution centres and the support teams, showed that they could rise to the challenge.

Standing strong on the front lines, ensuring the stability of the supply chain (in particular by supporting our most vulnerable suppliers), ensuring that consumers had access to a quality offering at low prices and providing them a safe shopping environment, and being an active and supportive presence in the communities and societies we serve were priorities shared across the entire Group and guided our Companies throughout the year.

In Europe, the first half of 2020 saw an unprecedented decline in the economy, partially offset by the gradual lifting of the lockdown measures implemented by the governments. But this recovery was not evenly felt everywhere, and tourism-dependent countries, such as Portugal, are far from returning to pre-crisis levels.

Poland was able to resist better than most EU countries and was one of the Member States that recorded the least loss in 2020. The country’s strong industrial base helped cushion the fall and the government created mechanisms that protected the economy and employment.

For us, well aware of the reality of both countries, the contrast with the impact suffered by Portugal was clear. Tourism is a major driver of wealth creation and employment in the country and, in a year in which foreign holidaymakers did not visit Portugal, domestic tourism was not enough to offset the decline. Recession resulted in a historic fall in GDP of more than 7.5% and unemployment (still) hasn’t risen to alarming rates because the Portuguese government subsidised lay-offs.

The Covid-19 pandemic led to Colombia’s first recession in the 21st century, destroying millions of jobs and increasing informality. The country’s natural features and territorial organisation led to a significant decentralisation of measures to fight the pandemic, greatly increasing the complexity of the logistics and operational challenges for a Group, such as ours, operating in several regions.

In these incredibly challenging times, I believe we showed remarkable resilience in the first year of this pandemic, which pushed us all to the limit and required us to give it our very best. This report describes what we were able to accomplish together in a year that will perhaps go down as the most unpredictable of our lives, and also everything we did to respond, as best we could and knew how, to the crisis that befell us.

The Group’s sales increased 3.5% to 19.3 billion euros (+6.7% at constant exchange rates), driven mostly by Biedronka’s double-digit growth in sales (+10.4% in local currency).

In a year in which we celebrated Biedronka’s 25th anniversary and Pingo Doce’s 40th, the pandemic robbed us of our festive spirit and slowed the pace of growth, but it did not affect our financial soundness.

Consolidated EBITDA, which decreased 1%, remained above 1.4 billion euros mark, even after incorporating the additional 41 million euros in operating costs related to managing the pandemic.

Jerónimo Martins’ net profit fell 19.9% year-on-year, which also reflects our strategic decision to once again increase wages in the three countries and the total bonuses paid to employees, which amounted to 189 million euros (38% more than in 2019), reaffirming our recognition of the extraordinary efforts made by our employees in an unprecedentedly challenging year.

However, despite the commitment and dedication shown by our teams, we were unable to prevent the decline in sales at Pingo Doce (-1.9%), Recheio (-15.9%) and Hebe (-2.2% in local currency). Ara, on the other hand, and despite five consecutive months (between April and August) of very restrictive lockdown, quickly recovered after health-related restrictions were lifted and ended 2020 with a 24.4% increase in sales (in local currency).

The pandemic, and all the uncertainty, restrictions and limitations to trade that came with it, did not stop us from opening 220 stores and refurbishing 291 others in the year, corresponding to an investment of 470 million euros, 64% of which channelled to Biedronka, which closed the year with a market share of more than 25%.

The determination, flexibility and creativity Biedronka demonstrated helped increase like-for-like sales by 7.1% in the year, an absolutely remarkable performance. By aligning cost discipline, a focus on efficiency and business assertiveness, Biedronka posted an EBITDA of 1,252 million euros, thereby reinforcing its position as the driving force behind the Group’s profitable growth.

The effects of the pandemic and the restrictions on the movement of people and on non-essential business activities had a significant impact on Hebe, which has nearly half of its stores located inside shopping centres where foot traffic decreased dramatically, even when they weren’t closed. In a year in which face-to-face social interaction was virtually non-existent, Hebe’s like-for-like sales fell 10.3%. 2020 was a year of transformation for Hebe, which discontinued its pharma business and saw its e-Commerce channel, launched in July 2019, become key to partially cushioning the negative impact the pandemic had on sales. This digital channel, which will soon be taking the Company to sell internationally, is expected to boost growth in the coming years.

Pingo Doce and Recheio were, without doubt, the Group Companies hardest hit by the crisis. After their outstanding performance and increased market share in 2019, the pandemic struck them with full force. The measures that Portugal implemented to fight the spread of the virus and the dramatic decline in tourism took a heavy toll on businesses that rely on the regular purchases and activity of restaurants, cafés and coffee shops, takeaway and food service.

Showing a remarkable fighting and resistance spirit, Pingo Doce never gave up trying to entice the customers that fear of infection drove to seek larger and less crowded stores. In spite of intense promotion of and innovation in its assortment, sales dropped to 3.9 billion euros and like-for-like sales (excluding fuel) fell 2.2%. EBITDA decreased 15.4%, reflecting the additional costs incurred, and that the drop in sales was unable to offset, with the need to halt progression of the pandemic and mitigate its socio-economic impacts.

For Recheio, which in 2019 broke the billion-euro sales barrier for the first time, 2020 was its annus horribilis. With the heavy restrictions and/or extended closure imposed on cafés, coffee shops, restaurants and hotels, the Company lost one of its major sources of income. Sales fell 15.9%, like-for-like contracted 15.8%, and EBITDA stood at 45.6% below that of the previous year.

In Colombia, where the pandemic saw poverty indicators and social suffering skyrocket, Ara further strengthened the competitiveness of its customer value proposition, ending the year with double-digit like-for-like growth (+10.2%). The Company also increased its cost discipline, which enabled it to reduce EBITDA losses by 8 million euros, continuing on its path towards profitability.

As a Group, we continue to invest in the Agribusiness area in Portugal, where we proudly implement best sustainability practices in the production areas we focus on: dairy, aquaculture and Angus beef. In 2020, we also ventured into agriculture, where we will invest more and selectively in organic production, in line with the EU’s “Farm to Fork” strategy.

The results in the countries where we do business were achieved in an incredibly difficult climate, facing pressure from multiple sources, from the ethical imperative to meet the social needs that emerged and worsened, to continuing to make progress on our environmental commitments.

Environmental risks, which in 2020 were already at the top of the list in the World Economic Forum’s Global Risks Report, should concern us even more, now that we know how protecting nature and ecosystems helps shield against pandemic threats.

After the hottest decade on record, we are entering the decisive decade for climate action.

The Group is committed to fighting climate change, just as we are committed to protecting biodiversity on land and at sea, to fighting pollution, namely plastic pollution, to sustainable use natural resources, to fighting food waste, and to proper waste management. This while at the same time we are proud of developing and improving food products to promote human health, taking into account the nature and the origin of their ingredients, balancing production processes and mitigating their ecological and socio-economic footprint.

In 2020, despite the pandemic and also because of it, we bolstered our role as responsible corporate citizens in the countries where we operate.

We closed the year with 33 ESG (Environment, Social and Governance) analysts directly following our activities and assessing our performance (compared to 27 at the end of 2019). We are also listed on 30 new indices, bringing the total number of indices (include specific indices) on which the Group is listed to 91. One of these new indices is the Bloomberg Gender Equality Index, with ours being the only company based in Portugal in our sector to be listed (the sector is represented by just 25 companies worldwide, out of the 380 companies across 11 industries included in the index). Another example is our inclusion in the Euronext® Eurozone ESG Large 80 Index, on which we were listed in June 2020.

We maintained or improved our performance in the various indices on which we are listed and are particularly proud of the ‘A-’ score (for the implementation of best practices) we achieved in the CDP Forests theme for all commodities linked to deforestation risk: palm oil, soy, beef, paper and timber. We are the only food retailer in the world to have achieved this score in both 2019 and 2020. We also achieved a score of ‘A-’ in the CDP Climate Change 2020 questionnaire, which, according to CDP’s report, is “higher than the European regional average of ‘C’ and higher than the average of ‘C’ obtained by the retail convenience sector”. We are also pleased to have climbed to the 98 percentile among all food retail companies assessed in the FTSE4Good indices.

We know that our efforts that contribute to these results are multi-dimensional.

The launch of the Biedronka Foundation in Poland, in March, with a starting budget of 50 million zlotys and a mission to support socio-economically vulnerable senior citizens, is one of the important initiatives that marked the banner’s 25th anniversary and our 2020. The Foundation immediately acted in response to the pandemic crisis by donating products and personal protective equipment to retirement homes, hospices, and organisations that help the homeless, the disabled and people suffering from chronic illness.

In Portugal, we were among the private contributors to the Coronavirus Global Response, donating 500 thousand  euros, in addition to co-financing in the amount of one million euros the implementation of the first national serology panel, led by the Institute of Molecular Medicine. We also helped equip the second intensive care unit of the Évora Espírito Santo Hospital, the main hospital in Alentejo, one of the country’s most ageing regions.

Among the many social responsibility initiatives carried out in 2020 by Pingo Doce, of note is the donation of on-the-go foods for health professionals working at more than 30 Portuguese public hospitals during the most challenging weeks of fighting the pandemic.

In Colombia, Ara responded to many requests for food support in different regions, and made a particularly important contribution, together with Caritas Polska and Caritas Colombia, in the region bordering Venezuela, where it distributed more than 9 thousand food baskets with basic products to around one thousand families in an extremely vulnerable situation.

The depth and scale of needs and of the social and environmental challenges are such that there is a risk that hope will die in combat. And that is what we need to act against. Businesses play a crucial role in the challenges we all face.

After all, we closed 2020 with a net cash position of more than 500 million euros (excluding capitalized operating leases) and this soundness also gives us the confidence to know that we will continue to protect and grow our businesses and our teams, while we strive to be an increasingly stronger force for good in the societies we serve.

The robustness of our balance sheet led the Board of Directors to recommend to the Shareholders’ General Meeting the distribution of 181 million euros in dividends, in line with the policy defined.

We know that 2021 will continue to be ruled by uncertainty and that focusing simultaneously on sales and on protecting profitability will guide our actions. It is only by building ourselves up first, that we will be strong enough to help those who stand by our side and in our surrounding communities, while also caring for the planet we all call home.

I can’t thank enough the Group’s over 118 thousand employees, who, in 2020, showed us the true meaning of the words dedication, commitment and resilience. I would particularly like to thank the operations teams in the three countries for their courage, loyalty and sense of mission. Thanks to them, we stood strong on the front line, ensuring that consumers lacked nothing in a year that was so difficult for us all.

I would also like to thank the Managing Committees of the Group’s Companies for supporting our businesses, by continuing to work from our offices and streamlining all processes and decision-making so that we could adapt quickly and effectively to the constant changes.

To our shareholders, and especially the family that I represent, thank you for your unconditional support and, above all, for always supporting our vision to overcome short-term challenges while building a better and lasting legacy for future generations.

Finally, I would also like to express my appreciation for my colleagues on the Board, Specialised Committees and the Managing Committee of the Group. In 2020, we operated more as a team than ever before, and that is what also gives us the strength and confidence to look at 2021 believing that, no matter what, it will be another year of overcoming.