Sonae : strengthens sales and profitability

1. MAIN HIGHLIGHTS OF FIRST HALF OF 2018:

• Sonae turnover grew 6.6% to €2,680 M

• Improved profitability across all businesses, as EBITDA rose by 11%

• Net results grow from €73 M to €98 M

• Net debt falls 6.7%, or €95 M compared to the end of the same period last year

• Investment (Capex) increased €30 M to €151 M

Ângelo Paupério, Sonae Co-CEO, says:'The growth achieved in the 2^ndquarter allowed Sonae to end the 1^sthalf of 2018 with a turnover increase of more than 6% over the same period last year, with positive contributions from all our business areas, particularly food retail which grew by 7.2%. The overall profitability also improved, with EBITDA reaching €154 M, 11.1% above the 1st semester of 2017.

It was also possible to reduce the Group's net debt by an additional €95 M while increasing investment levels and continuing to grow by 5% the dividend paid to our shareholders.

The quarter was, however, marked by the results reached in terms of portfolio management, with relevant steps in the preparation of the potential IPO of Sonae MC, with the partial sale of a stake in Outsystems (indirectly owned by Sonae IM) and particularly with the acquisition of an additional 20% stake of Sonae Sierra, an operation that contributed to a more balanced portfolio and to reinforce the group's international profile, which remains at the forefront of Sonae's strategic priorities.'

Businesses grow in 1H18

From a statutory view, Sonae consolidated turnover grew by 6.6% in comparison to the same period last year, amounting to €2,680 M in 1H18, particularly impacted by Sonae Retail which contributed with additional €167 M.

Consolidated EBITDA improved €15 M, to €154 M, supported by a higher underlying EBITDA (+€8 M) and equity method results (+€9 M). Results before taxes (EBT) rose by 30.1% to €37 M in 1H18, similar to the amount registered in direct results.

Indirect results reached€68 M in 1H18, more than double the amount from 1H17, mainly due to portfolio revaluations, capital gains in Sonae IM and value created in investment properties of Sonae Sierra.

Thanks to growing sales and profitability, along with indirect results, the net income group share improved by €25 M or + 34.2% y.o.y. to €98 M.

Investment stood at €151 M, increasing €30 M when compared to last year, especially thanks to a higher capex level in Sonae MC, linked to refurbishments, and Sonae IM, linked to M&A operations.

Decrease of 95 million euros in debt strengthens financial solidity

Sonae continued to strengthen its financial solidity, as net debt decreased by €95 M y.o.y., to €1,324 M in 1H18, and its financial leverage stood at 38.3%, 2.8 p.p. less compared to 1H17.

The average gearing at market value improved in comparison to the same period last year, to 0.6x, namely driven by an average market cap increase and the net debt decrease, when compared to the same period in 2017.

The Group maintained its practice of remaining fully financed for the coming 18 months, while also having improved its general funding conditions. Moreover, Sonae was able to decrease the average cost of debt outstanding to 1.0% with no material impact on the average maturity profile.

Creation of more than 1,700 jobs and support to over 800 institutions

Sonae created more than 1,700 jobs over the last 12 months, closing this year's first half with over 45 thousand employees. This evolution reflects the company's general growth in all business areas, both in Portugal and abroad, resulting in boosted competences for Sonae.

During the first six months of the year, Sonae also maintained its commitment to the community, supporting over 800 institutions across Portugal, providing material goods, skills and financial resources. Among the areas of intervention that benefited from Sonae support were Social Solidarity, Culture, Education, Environmental Awareness, and Health and Sports.