Message of the Board
of Directors

2019 Annual Report and Accounts, Preamble about Covid-19.

The information disclosed in the present Report and Accounts was approved by the Board of Directors of Sonae Capital on 21 February 2020. And if, by that time, the spectrum of a pandemic seemed considerably distant, the fact is that from that date until the day of the publication of this report, the rapid spread of COVID-19 has significantly changed the conditions under which each of our businesses operates, and so we have revisited the outlook for Sonae Capital's performance in 2020.

Whereas it is not yet possible to quantify the magnitude of the impact of such situation, even due to the uncertainty regarding the duration of this pandemic, we are monitoring its evolution on a daily basis. At the same time, we are implementing all the measures that we consider appropriate for, firstly, protect the health and well-being of our people and customers, and mitigate the impact that, undoubtedly, it is having on our businesses.

In the Energy business, despite the high resilience of the Production segment, we might anticipate a temporary slowdown in Turnover due to a lower thermal energy production, in Cogeneration, because of the potential stoppage of some Industrials. At Futura Energía Inversiones, the increased volatility of the markets in which it operates - of CO2 emission allowances, electricity and natural gas - could lead to a preventive slowdown in the activity, in order to protect the liquidity needs required by the business.

In the Industrial Engineering business, despite we haven’t seen yet significant changes in the operation, since ADIRA keeps its industrial activity in operation, the level of orders has been decreasing in line with our expectations given the current situation, due to the postponement of investment decisions by clients. Also, due to the potential pressure resulting from the supply chain, this business may also be negatively impacted by this pandemic.

In the Fitness business, we acted proactively to safeguard and defend our clients, employees and partners and suspended the operation of all our Solinca, Pump and ONE Clubs, on 14 March 2020, while we simultaneously stopped charging the monthly fee to our clients for an indefinite period. Since that date, we have been working on all online channels in order to strengthening the relationship with our members and encouraging them to practice physical exercise on a regular basis. In the Hospitality business, we have progressively proceeded, between 15 and 25 March 2020, to the temporary closure of all our hotel units. Also in Tróia Operations, with the exception of Atlantic Ferries (which suspended only a part of the Routes) and Meu Super, considered an essential service, we closed all the remaining services for an indefinite period.

In the Real Estate Assets operation, we are anticipating a slight slowdown in activity, which we hope will only translate into a postponement on sales deeds conclusion (largely due to constraints related to the contractual formalisation of processes). Knowing in advance that a significant part of Sonae Capital's financing has been guaranteed by the monetisation of Real Estate Assets, we would like to point out that, given the circumstances and even in more adverse scenarios, the company is in conditions to finance its activity maintaining the indebtedness at an adequate level. At the same time, by 31 December 2019, we had €53.1M in Cash and credit lines available and, as of today, we have all the financing needs foreseen for 2020 assured.

Still, taking into account the degree of uncertainty that defines the current moment, the Board of Directors has decided to revert the proposal on dividend distribution previously announced, safeguarding the reinforcement of liquidity and responsiveness in a situation where resilience is essential. Nonetheless, the Board of Directors will return to this decision as soon as there is greater visibility about the future, namely when the normality of all its operations recommence and, principally, taking into account the adequacy of the capital structure given the Group’s portfolio of businesses and Real Estate Assets held.
The COVID-19 pandemic represents an unprecedented crisis on a global scale, with an unimaginable level of disruption and risk for people and businesses. Currently, our action is focused on business resilience, but we maintain a recovery scenario in mind. When this crisis ends, we intend to have the right conditions and resources to properly implement Sonae Capital's strategy, maintaining the delivery and value creation levels that define us and make us a differentiated player in the market in our areas of operation.


Maia, 6 April 2020


The Board of Directors

Duarte Paulo Teixeira de Azevedo, Chairman of the Board of Directors
Álvaro Carmona e Costa Portela, Member of the Board of Directors
Miguel Jorge Moreira da Cruz Gil Mata, Chairman of the Executive Committee, CEO 
Ivone Pinho Teixeira, Member of the Executive Committee, CFO
Pedro Manuel Bruno, Member of the Executive Committee
Maria Cláudia Teixeira de Azevedo, Member of the Board of Directors
Ângelo Gabriel Ribeirinho dos Santos Paupério, Member of the Board of Directors 
Paulo José Jubilado Soares de Pinho, Member of the Board of Directors
Francisco de La Fuente Sánchez, Member of the Board of Directors
Isabel Maria Vaz, Member of the Board of Director

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