Good morning, ladies and gentlemen, and thank you for joining this call to present Jerónimo Martins first half 2019 results. As a reminder, materials include the release and a slide presentation, both available in our corporate website.

Before I take you through the presentation, let me stress that the analysis of the performance will be made without the effect of IFRS 16 adoption. Although in the appendix, you can find our financial statements under these accounting standards.

In the first six months of the year, consumer demand was positive in the markets where we operate, but we see no signs of softening when it comes to the competitive landscapes and promotional activities to drive sales. Food inflation remained close to zero in Portugal and accelerated strongly in Poland throughout Q2.

During this period, we continued focusing on consumer preferences and sales growth without compromising on efficiency to ensure profitability. The work done has paid off and in H1 we posted strong growth at both sales and EBITDA despite eight fewer trading days in Poland due to the Sunday ban.

More importantly, all our banners reinforced their market position. Looking at the key performance figures, consolidated sales grew 5.7% to reach €8.9 billion, at constant exchange rates sales growth was 7.1%.

Group EBITDA reached €471 million, 5.6% ahead of H1, 2018 or a growth of 6.8% at constant exchange rates. The respective margin was 5.3%, broadly stable year-on-year.

Net profit attributable to Jeronimo Martins was at €181 million showing an increase of 0.7% on H1, 2018 despite eight fewer trading days in Poland. Net debt stood at €158 million with gearing at 7.9% reflecting a strong cash flow generation of €152 million in H1 and the payment of €204 million of dividends in May 2019, €219 million is including payments to partners.

Looking now at our Q2 P&L, we had a sales increase of 10.3% reflecting a solid underlying growth trend that also benefitted from the swing of Easter from Q1 last year to Q2 this year. This Easter season was particularly successful in Biedronka boosted by the company’s commercial action, where it generated a positive margin mix effect.

The stable gross margin was led by the strict management of the margin mix and some trading ups which ended up mitigating the price investments over the period. Sales delivery drove EBITDA in the quarter which was up 11.3% with the respective margin coming at 5.5%.

I would also like flag that in this quarter we have already booked at EBITDA level €8 million related to our employees long term compensation plan. PingoDoce’s sound growth impacted non-controlling interests that were at €7 million compared to €4 million in Q2 2018.

In the quarter, the tax rate for the group was particularly low as some adjustments were made following the final competition of last year’s corporate impacts in Portugal and Poland. Net profit attributable amounted €109 million, 14.2% ahead of Q2, 2018.

The first half of the year gives the clearer picture of the overall performance as it removes the impacts of the Easter timing. There are a few things I would like to point out.

Gross margin evolution from 21.5% in H1, 2018 to 21.7% in H1, 2019 is mainly the combined result of better margin mix management and trading ups. Cost inflation continues to be driven by labor and energy.

With regard to the labor the inflation reflects the specific conditions of the labor markets in the countries where we operate and also our own decision to improve remuneration packages across the three geographies. All in all, our businesses have been able to capture topline opportunities and gain market share while preserving the profitability drivers consequently delivering at sound first half in 2019.

Cash flow generated in the period reached €152 million compared with negative €137 million registered in H1, 2018. This improvement comes mainly from the funds generated by the working capital that in 2018 had a challenging start to the year following 2017 strong Christmas and related high price payable.

Better EBITDA generation and lower CapEx payments have also contributed to the performance. The balance sheet remains very sound with net debt at €158 million and giving at 7.9%.

Jeronimo Martins’ dividends in the amount of €204 million were paid in May and are already reflected in the debt value. Group CapEx in the first six months of the year reached €238 million of which 48% were invested in Biedronka.

Refurbishments continue to absorb a relevant part of the investment program. Overall, the CapEx for the year is expected to be in the €700 million and €750 million range and logistics will gain weight with the two VCs being built in Columbia.

I’ll now focus on the operating performance in a bit more detail starting with sales. All businesses delivered strongly in the first six months of the year driving group sales up by 5.7% to reach €8.9 billion in H1, 2019.

In Biedronka sales grew 7% in zloty and 5.2% in euro to €6.1 billion. Like-for-like performance was at the sound 3.7% in H1, 2019 already incorporating the impact of eight fewer trading days due to the Sunday ban.

The like-for-like swing from Q1 into Q2 reflects mainly the calendar impact of Easter and the additional trading day loss due to the Sunday ban more specifically seven in Q1 2019 plus one in Q2. Throughout these six months Biedronka remained focused on sales and on cresting its campaigns to maximize topline delivery through volumes and mix.

Easter was particularly dynamic in this respect and contributed with an estimate of 3.5 percentage points to the second quarter like-for-like performance. Also the month of June was particularly strong registering unusual warm temperatures and that grew strong sales growth in certain category.

I would also like to mention food inflation in the country which peaked in May and June to more than 5%. In our baskets, inflation in the six months was 2% having been 3.3% in Q2.

We believe that this inflation had to certain a seasonal nature and therefore we may see some softening on prices evolution ahead. New space contribution had slightly more than 3 percentage points remained an important driver of sales growth.

In the execution of each investment program, Biedronka opened 27 stores in H1, 16 as additions and remodeled 67, up to May market share increased by 0.2 percentage points year-on-year. Hebe grew sales in zloty by 26.4% with a like-for-like of 8% in the period despite the impact resulting from the loss of eight trading days.

The banner opened 17 stores and gave decisive steps in this omnichannel approach to the Polish health and beauty markets having just gone live with its E-commerce platform. PingoDoce’s total sales were up 4.1% to €1.9 billion with like-for-like excluding fuel coming at 3.4%.

The banner remains very active and assertive in regards to promotion and commercial action which together with the strength of this overall value proposition continues to drive growth and market share gains. PingoDoce opened four stores and remodeled 19 of which six were leasing.

Recheio registered the like-for-like of 3.4% and older exports continue to pressure growth, total sales increased by 2%. In Columbia considering the relevance of sales density as main driver [Indiscernible] possibility, Ara gave priority to sharply accelerate like-for-like sales growth by improving its commercial dynamics and increasing price competitiveness.

Growth on same store sales increased significantly in the recent months and the banner ended the first half with double digit like-for-like. Ara opened 25 stores and grew sales in local currency by 31.6%.

Moving onto operating results, group EBITDA reached €471 million, a 5.6% growth or 6.8% at constant exchange rates, a strong performance in our view which reflects the sales driven strategy. This allows to fuel the positive margin dynamic and to create the flexibility needed to address cost pressures.

Losses generated by Ara and Hebe were at €41 million from €45 million in H1, 2018. This reduction reflects Hebe losses decline and the devaluation of both currencies.

Ara stabilized losses in local currency. Group EBITDA margin was 5.3% broadly in line with H1, 2018.

If we exclude the impact from Ara and Hebe losses, EBITDA margin was 6.1%. The effective margin mix management in Biedronka supported the strong commercial dynamics and the maintenance of its EBITDA margin.

In the case of PingoDoce, I’d like to flag that the good like-for-like momentum combined with positive margin mix in Easter boosted EBITDA margin in Q2 partially as a seasonal effect. All in all, we had a strong first half with the results from the second quarter confirming and reinforcing the already good start we made for the year.

In this context, we feel confident to confirm the guidance provided last February 27, with the full year results released. Topline growth will remain our main priority.

To guarantee it in very competitive landscape, we will keep strengthening our operations and commercial propositions. We’re aware that there is still a lot to be done until the end of the year to deliver on our ambition and we do acknowledge the uncertainty around regulation and food inflation particularly in Poland.

These became louder with the recent news on the retail tax. Notwithstanding, we will continue to focus on competitiveness and efficiency as ways to preserve profitability while outperforming the markets where we operate for the remainder of 2019.

Thank you for your attention. Operator, I’m now ready to take questions.

Hi, good morning. Regarding the gross margin to what’s flat in Q2, you mentioned that Biedronka was kind of more aggressive in terms of promotions in the quarter.

So, my question is why the company decided to be more aggressive, was this a reaction to the markets or was Biedronka’s own decision to assure right promotions? And if you can provide what is the percentage of sales in the promotion?

So that will be my first question. Then regarding Ara you mentioned that same store sales accelerated over the recent months.

What has been driving these accelerations, anything that you’ve changed recently that led to these accelerations on sale, if you could provide a little bit more color would be positive for us? And then finally, regarding these retail tax involving, if you can make any view on these memory, if these possible retail tax if apply, it should be supported by the final clients, not sure if you can comment today anything on this?

Thank you.

Good morning. So, gross margin at the consolidated level being flat.

So yes, it’s true that Biedronka continued to be very active in commercial actions during the Easter time, but that didn’t mean really to increase promotions. In fact, there was a slight slowdown in the promotional activity and we ended up the first half with around 38% of sales in promotions and in and out.

This has really to do much more with price investments even in the regular assortment. So it had to do with the overall dynamic during the period and as you may recall last year during the Easter time and after that we were facing that the beginning of the Sunday ban, so I can say that that meant more aggressiveness on the promotional side.

This doesn't mean that we were not more competitive, but of course it softened slightly the gross margin in the second quarter. Nevertheless, if we look at the first half which I think it's the performance that we should be looking at to take out the effects of the Easter shift.

We are still slightly increasing the gross margins and this came from all businesses in fact and has to do really with the margin mix management at all business levels and particularly at Biedronka it has to do of course with the kinds of trading up that we saw also. And of course, the way that we crafted the commercial action, so this one should be --

Yes. So basically, no major changes in terms of, let's say price investment in H1.

Let's focus on H1 and the increase for H1 was related with the mix. So we are seeing no major change in terms of competition in the country, we can assume that?

In Poland.

No. Like I said, first at consolidated level the margins margin contribution is positive from all businesses in fact.

So from Ara, as I mentioned in my introductions, Ara increased its price competitiveness and was let's say in this case more aggressive when it came to the kind of commercial actions it needs in the country and in the several regions and that is paying off. So basically, the company is really focusing on giving priority to the same-store sales increase.

And as I mentioned, it was basically that that growth, the like-to-like sales growth which accelerated in the second quarter. On the retail tax, so I cannot elaborate much about that.

So as you know, there are and it seems to be the case, the European court will receive an appeal from the European Commission on the retail tax. Meanwhile, the government has posted a draft bill that may mean to implement the tax declaration from September, but at this point it's still addressed we don't know it will go ahead or not.

What I can tell you that if applicable I think that let's say this as the Sunday ban this will have a reflection in the whole economy. So it will for certain have a systemic effect in the economy and all economic agents will have to adjust to this new regulation.

So on that part I think it's very early to say, but as I think it's all as I said, as for the Sunday ban all agents will have to adjust and the sector of course will have also to adjust its cost structure and investments to cope with it as it will have to.

Thank you. So on Ara, if you want to mention, so you were more aggressive and this is paying you off, but despite being more aggressive the gross margin has increased.

So basically this scale of benefits is starting to give a positive contribution despite you being more aggressive?

Yes. So we are increasing gross margins probably we could have been increasing more gross margin, but we prefer to go for sales as usual.

Thank you.

Thank you, Jose.

Yes. Good morning and thanks for taking my question.

The first one would be related to Biedronka, you mentioned that you expect inflation to soften going forward. I was just wondering whether you could give us a bit of color which we get to, what you expect there that’s going forward.

You could fill out for the rest of the year inflation close to what you’re in H1 in 2% or you think it could sustain further? The second one, about the retail tax.

There were few headlines in the past few days saying that actualized European Commission is appealing the court decision, could you maybe confirm whether you have any views on this [Indiscernible] and information on this specifically? Then I had a question with regard to Ara, so you have this target [Indiscernible] in 2019 yet in H1 we haven't seen that.

So just wondering whether this was behaving in line with your expectation or maybe taking a bit longer than what you initially expected which we get to the margin ramp up? And maybe one last one for me which would be related to Mercado which had opened its first store in Portugal, could you maybe give us a bit of information with regard to the price positioning of these stores.

The impacts it might have on the nearby store that you have in the country? Thank you.

Thank you, Maxime. So on inflation, what I mentioned is that part of the inflation that is increasing in the country in the food inflation may be seasonal.

So at this point we think that there are parts, there are drivers in the inflation that may cope with still maintaining a high level. But the part that refers to fresh and particularly to meet and some of the commodities like sugar may be seasonal and that of course will have an impact considering the different mix of sales in a discount model like the Biedronka.

So that is the only thing. Of course, other elements are pushing inflation up and from the labor cost pressure that of course puts that in more pressure, even the monetary policy of the country.

So that is something that it's not dependable on us. The only thing is that as I mentioned parts, it may be non-structural and that's why we think that we should flag that there may be a softening in the second semester depending on how it evolves in what refers commodities, so with the impacts on groceries and the fresh namely meat, fruits and vegetables.

On the retail tax, so from the information and from the sources we have there will be an appeal to the European court as I mentioned. So apparently, the government will not of course put into force the payment of the tax unless it has a final decision from the European court.

It's the information that we got from even the government court of information. But nevertheless there is also, as I mentioned, a proposal, a draft law that mentioned that the government may apply from 1 September, the law in the sense of having to file for declarations on the monthly sales.

And this of course will mean that the company will have to adjust and then will comply of course. But what I think and as I mentioned early is that this will like the Sunday ban have an impact on the whole economy and that in fact all players will have to adjust even their cost structure to cope with it.

On Ara, yes so we are keeping the guidance for the losses. It will be challenging.

We were forecasting already as I said, basically an increase in sales density and an increase in gross margin as main drivers of profitability and on the inflections of the losses. I would say that we are probably investing a little bit more, but is because we are seeing the price elasticity paying off at sales levels.

This being said, it's going to be challenging but we still think that we can attain the guidance for the losses at this stage. On Mercadona, so yes they opened already four stores in the North as it was their plans.

According to the press and according to our own shopping from the prices, it seems that the majority of the prices or there is no price decrease versus with the local competitors. So at this point we don't see, to be very honest a very big impact on the surrounding stores in our particular stores, but this probably also has to do even with the economic and favorable consumer demands at this stage.

So we don't underestimate a competitor like Mercadona, but we are definitely prepared to cope with further competition.

Thank you.

Thank you, Maxine.

Hi good morning everyone. Thanks for taking my questions.

Just two quick ones if I might. The first one regarding Biedronka stores expansion there were like 16 net openings during the first half.

Could you please provide us some color on how net openings will be distributed during the next two quarters? And the other one is a follow up on Biedronka’s like-for-like, just to confirm you attributed 3.5% to Easter effect and 3.3% to basket inflation right?

Thank you.

Hello Joel, good morning. So, on the Biedronka expansions so probably and in terms of timing so we are maintaining all the guidance for expansions.

And in the last years we have seen basically using all our investments in terms of expansion and refurbishments after Easter time. So there may be a slight later timing compared with last year and usually most of the openings and refurbishments take place in the second half.

Of course, the distribution will depend, but I think that ultimately, I think if you can see the half probably it's okay. But I don't think it will have a big impact overall on the guideline that we are giving.

On the like-for-like yes, so 3.5 percentage points is our estimate of the Easter effect and 2% was the first half inflations in Biedronka.

Sorry for the Q2?

Q2 was 3.3.

3.3, okay, thank you.

Yes, good morning Ana Virginia and the team and thank you for taking my questions. Actually it's mainly follow-ups on the two important issues, the sales tax and our business plan.

On the sales tax, I imagine internally you are working on some plans. This has been public for quite a long time.

Just to know if it would be [suspensive] or not. You are saying you have to file but it would be suspensive, I just want to take that I understood it correctly?

You might be retroactively concerned if they lose, but you won't pay from September. Do I understand it correctly?

So that's the first thing and what are the internal plans everybody would probably you guys’ prices, what would be your view, your focus would be on profitability on market share. Can you elaborate a little more on that because you must have worked internally a lot on that?

And the second point is on Ara and to like-for-like, how should we understand it can potentially affect the whole midterm business plan and breakeven timing. You seem to have nice development on like-for-like.

Was it in line with budget? Were you expecting such development or as a result of more commercial activity and the aggressiveness because like-for-likes were little weak or soft maybe you can help us.

Should we need to move the needle in terms of breakeven that's the main question? And maybe just to be sure so 3.3% basket inflation in Q2 you said you had 200 basis points for the first half.

So it was like the 70 basis points in Q1 should we see it like that? Thank you very much Ana.

So thank you, Cedric. On the sales tax, yes, this is the subject that has been, it is a reason to be enforcing as you know in September 2016.

Then it was suspended when the European Commission moved to court to challenging it as a discriminatory tax. Then of course there were some changes in the food retail sector in Poland with the introduction of the Sunday ban.

Currently what happens is and this is very recent. The government put a draft bill considering that it may go in force with the declarations effects of this retail tax from September and it is just a draft still, saying that we should declare it.

But if then it suspends its payments meaning that if and when the European court rules on the retail tax if it maintains its position of saying that the tax is non-discriminatory and can go ahead they will collect the whole amounts in September 2019. This is a draft bill that may or not be approved formally by the Polish government, but it's the one that we have noticed of and as I said is very recent.

So yes, of course we've been working although of course, we know also and as I mentioned, the reaction and the way that the economy will have to incorporate and adjust to this retail tax will also be dependent. But the way that I see it, if we are going to see extra raises in prices and inflations derived from the retail tax and probably the only thing I know is that Biedronka will want to keep its competitiveness and [indiscernible] the other competitors.

So in this, I would say that we'll have to work first and we will certainly have to adjust even the way that we manage the margin mix, the way that [indiscernible] and the conditions that we have and of course our own price structure to cope with this extra pressure at our P&L level if it comes into force and if you have to pay for it or accounted for.

If I may, did you already discuss with suppliers about that have you worked already on some assumptions and scenarios with suppliers?

I think this doesn't work like that said to be very honest. So we can see of course to negotiate with our surprise to have the best price costs in our merchandisers and to be able to pass and to be the most competitive.

But it's not something that we don't say to our suppliers that they will have to support the retail tax of course. I think that we have to craft our commercial actions to have win-win situations and for them also to gain in the market.

So this is something that really doesn't work like that. The same with the price increases.

Yes, there may be some pressure for price inflation because of course all players will have to adjust and for some it may be easier than for others particularly for the less profitable ones let's say, but that doesn't mean that you'll see a price increase in the amount of the retail tax. It wouldn't make any sense in this case.

So as I said it's going to be, if applied it’s going to be a mixed affect all over in the economy. Is that okay Cedric, sorry?

Yes absolutely, Ana. Thank you.

Thank you. So, on our business plan.

So the like-for-like yes, we were assuming that we would be able to increase our like-for-like. What I said was that we were probably and we were expecting not only increasing like-for-like, but increasing our gross margin and being able to get better cost of goods sold with that increase in sale density and with the kind of negotiations and new plans that we are negotiating and sharing with our suppliers particularly on private labels.

So this was something in line. What we did was, we really are going a little bit further on the price investments because we are seeing a strong reaction in terms of price elasticity in the Colombian consumer.

But the rest, I would say that is more or less in line with what we expect. At this point, I see no reason to change the timing in terms of the breakeven at the level, as we are seeing after 2020.

And the apologies that you had the third question.

No it was just to double-check number. Its 330 basis points in the quarter as the price basket at Biedronka and 200 basis points was half year, correct?

Yes. Correct.

Thanks a lot.

Thank you, Cedric.

Yes. Good morning Carole from Exane Paribas.

Few questions from me, in terms of Poland on the current trading I think that the government has now launched in the past month some measures of the stimulus plan, maybe still a bit early stage but have you seen any improvement in terms of traffic or some changes in your stores following that? So it's basically July month as good as or even better so much as in Q2.

And then maybe on Portugal, do you feel confident that you'll be able to deliver a similar even better margin boost in H2? And then maybe last question on the Hebe, you have launched an e-commerce website just recently.

Again it will be a bit early stage, but can you give any feedback and also maybe remind us what is your online strategy for Biedronka in the future? Thank you.

Thank Carole. So on Poland, I would say that of course with our hope considering that there would be a gain from the stimulus.

This is affecting positively consumer demand, but at this point I would say that we cannot or are not able to segregate and to identify which parts of the growth in our like-for-like means or comes from the stimulus. I think that one thing is for sure, we have been increasing our baskets not only because of course people concentrate the sales of Sunday on other days of the week, but also because we are increasing the number of items in the basket and more value-added products seen in the basket.

So this kind of trading up is probably justified by the fact that people feel that they have more available income and can cope with more value-added products. On Portugal, as I said part of the margin impact had to do with the strong sales and the like-for-like momentum of Easter and this first half.

I think it's going to be a little bit more challenging in the second half. So we may not be able to maintain this level of increase in the margins.

Nevertheless, we still think it's going to be better than last year. As the company have been able to accommodate the remuneration packages review that was done in 2017 and is really being able to increase its EBITDA margin.

On Hebe yes, we launched the e-commerce round one week ago. Of course it's still too early to take conclusions from one week.

We had a lot of course orders in this first week, but as we said it's quite early to take conclusions. We think that it's going to be a factor in a part where it will pay off of course to have the e-commerce.

In Biedronka as we have been mentioning, Biedronka has let's say a natural hedge when it comes to e-commerce due to its proximity format. And of course, food is always a more challenging sectors to put online, but we have been monitoring that and even giving the facility to people to collect products in the stores of Biedronka to be able to prepare if we want to go ahead with anything.

But at this point the only presence in an E-commerce platform in Poland is from Hebe.

Thank you.

Thank you, Carole.

Hi, good morning. Thank you for taking my questions.

Three, if I may please. Firstly in Poland, please can I ask if you're beginning to shift your focus in and out to slightly greater focus on EDLP priced investment as you work through the Sunday opening headwind?

And secondly, an ally to that if you're able please could you update on the traffic and basket trends at Biedronka and I guess for the half is that small meaningful than Q2 and then lastly just on a definition please for the inflation numbers that you'll currently pricing is that like inflation or does that include an element of mix? Thank you.

Hello Coulter, good morning. So as the shift from promotions to everyday low price, again we manage the sales mix and the margin mix in a very dynamic way.

So it’s quite challenging as you may imagine. Yes, we have to maintain our competitiveness when it comes to our regular assortment and particularly in some products where the prices are a must and if that means an everyday low price or lower price, yes we will keep it but of course we will keep being also very active in crafting all our commercial actions including the promotion and in and out as a way of course to continue increasing our sales basket and the number of clients.

So I would say that it's both the dynamic from the price investments and the everyday low strategy from the Biedronka, but on top of that with also the promotion and in and out continue to play a very strong role to the company.

Is that changing at all as you work through the phased introduction of the Sunday trading ban, I guess in and out as you say to encourage behavior to build the basket or away from the Sunday. So I guess my question is, are you beginning to change your emphasis ever so slightly?

Thank you.

Of course, it may have also an impacts on that but all the dynamics and the sales dynamics really depends firstly on the reactions of the consumer and of course if we managed to deliver what the consumer aims for without hurting our efficiency and of course we know that promotions and the way that they are left also affect and put some pressure on the operation. Of course, if we can do that we will continue to do that.

It's something that we have been doing even in Portugal when deciding that part of our categories will be in promotion the whole month and this pays off because it makes much more stable all the forecasting and replenishments. But this is a dynamic that is evolving.

So I cannot conclude if we are going to decrease promotions or not. We will not definitely lose competitiveness to our players and Biedronka will make sure of that for certain.

Thank you.

On the second question Nicole, can I ask you to repeat it because I didn't listen very well?

So it's just on Biedronka. Could you update if you are able on the traffic and basket trends at Biedronka I guess it might be more meaningful to talk about that the traffic year-over-year change in the basket, year-over-year change for the first half given the Easter distortion, the size of Easter distortion?

So basically the like-for-like comes from the number of tickets or the number of visits. But from our own numbers what we can conclude is that the increase comes from the average basket.

There is a decrease in the number of tickets, but the whole number is explained by the Sunday ban. So we are not losing customers on the contrary.

And on the increase in the average basket, as I said partly it has to do with the increase in the number of items in the basket, partly with more value added products also.

So your traffic trends are broadly mirroring the impact of the incremental Sunday trading?

Exactly, last week of sales in fact, in the few years, we have eight days or with one week less and that of course affects when we compute the number of visits.

That's encouraging. I think in previous quarters you've had traffic figures that they were a greater impact than the Sunday trading.

So that sounds like it has improved. Thank you.

On the definition of inflation, so it's basically like-for-like, because we consider the waste of the product when we compute it also. So, the quantity, the weight considering the difference in price.

So I would assume that on that we are talking about a kind of a like-for-like inflation if that can be applied to this variable.

I think that's super helpful. Thank you so much.

Thank you, Nick.

Hey morning. Just two questions for me.

Did you comment a little bit on labor cost inflation in Poland? I know Poland we're seeing a lot of inflation there.

How you seeing that develop for the rest of the year? And secondly, given the sort of changes to your plan, not your plan, but your performance in Columbia, could you sort of give us an update on maybe a three year view?

How you are considering that roll out? Thank you.

Thank you, Kiranjot. So the level of cost inflations as I said, basically when it comes to our P&L the only increase, the only inflation that we are seeing really is on labor and energy.

And as you may imagine, we have the minimum salary and the pressure on to increase the other salaries also in the country. Biedronka of course we will keep its competitiveness also in the salary and so there has been an increase and there is a higher weight of these of labor and energy in the P&L that is basically compensated almost by the dilution of the other cost headings at ultimately considering the increasing in sale.

In Ara, so there is not really a changing trend. I think that's we do not conclude that.

What we of course have to go and seeing is the reaction of the consumer to our own action to see if we have to inflect any intensity or not. But for the reminder I don't think that there is a big shift in our plan.

Our plan is really to increase sales density. This is paramount as you know in this sector to drive profitability and this is our range is to make money in Columbia in the next three years.

I would say that that this is the part of the plan that I can share with you.

You had been guiding to I think lot of people mentioned that the loss is being down year-on-year, this year. The losses in H1 were only down slightly.

Should we consider H1 as a good guide for H2 or do you think there will be acceleration in H2?

No we are expecting that decrease will accelerate at this point. Of course, there is always we have to see how the market reacts and how the sales go because this is, any change in Ara will be magnified because of the size of the company, but nevertheless at this point and considering our guidance we are assuming the losses will decrease more or further in the second half of the year.

And in terms of the wage cost inflation, was there a point of time this year where you saw them ramp up as in Q2 or are you still managing it more slowly across the year?

I think that we can assume that we do, it's not wage inflation. I think that we have to consider that we have a whole remuneration package that even considers the bonus for productivity, for lower absences and for the products fits in the same store.

So the flow can vary throughout the year, this in Poland as well as in Portugal. And so, as we adjust our bonus system or the other remunerations heading this will depend.

But in the case of Biedronka we have been doing some adjustments in the first half, but as I said if everything goes according to plan you will see more or less the same kind of inflation for the second half of the year.

Thank you very much.

Thank you, Kiranjot.

Just a very small follow-up. What's your best guess in terms of delays for a potential appeal to take place?

When do you think will be the next court decision? Tough one, but short one.

So there is no issue. So of course, we cannot pressure on the European court.

But the official -- comes from unofficial sources, that there will be an appeal. But then, the decision of the court may take time.

So I don't know, at least one to two years [indiscernible] I would say but it will really depend. I don't know if there is any timing to issue a decision when it comes, to be very honest.

Thank you very much.

Thank you, Cedric.

Yes. Just very quick one regarding Ara, you plan to open to this season [indiscernible] I think it will be in the second half.

Can you mention if you have already in your OpEx cost, any cost related with this decision Q2 mainly training and also in [indiscernible] I am not sure if you mentioned in the presentation how much was the market share revolution in each one? Thank you.

On the VCs, of course there is parts that has to do with the construction and the operations that have to follow-up on the VC construction but it's quite marginal. So these VCs are in the constructions, but we would assume that they will have a marginal impact because we are talking about VCs that will open really, if there aren't any issues will open at year end.

And on the market share yes, we mentioned 0.2 percentage points up to May.

Sorry 2% how much point?

0.2 percentage point.

Okay. Good.

We would like.

Thank you.

Thank you.

Hi, good morning. I just have a quick question.

I'm looking at the free cash flow and I see there's a major difference in the change in working capital between first half of 2019 compared to the first of 2018. Is there any big explanation for such a difference between figures?

Thank you.

So as we flagged, this change in working capital has all to do with the business and the seasonality of the business. Of course, if we grow more on sales usually we have a higher impact.

But as I also mentioned in my introduction year-on-year comparing with last year the fact is that last year was affected by the end year position in 2017 being slow due to remarkable Christmas time in that year that's led to end the year in a weekends with a very high level of trade payables. But nevertheless its usual -- so yes but there is shift and to the positive or positive contributing to this change of working capital is also the dynamic of the business and the increase in topline.

Okay, thank you very much for your explanation.

Thank you.

Thank you all for your questions and for attending this conference call on our first half year results. Considering the performance delivered in this first six months of 2019, the guidance we provided at the beginning of the year remains unchanged.

Our ambition is to always deliver a profitable growth and our topline strategic focuses are also to be kept unchanged. Thank you once again and I wish you all a nice day.