Letter from the President

I would like to share with you how Mercadona has tackled 2022, those twelve months of lingering uncertainty for all of us. The predictable and stable scenarios we had experienced as a company until now suddenly became a thing of the past. We had to react to an ever more complex situation while still feeling the effects of COVID-19, in addition to the impact of the war in Ukraine, including the rise in the price of energy and raw materials and shortages, leading to high inflation rates.

The complexity of this context led the people who make up Mercadona to once again show our ability to adapt to new circumstances. Because if there's one thing we have demonstrated over the last few years, it's that no competitive advantage is permanent, and there is no position that can't be changed.

Despite this and these extraordinary times, Mercadona has outdone itself once again. It has achieved this thanks to the effort, work, agility and capacity for self-criticism of all its workforce, committed to its own company model, which serves as a guide in every decision we make and helps us to continue to progress as a company in our common goal: to satisfy the company’s five components. My most sincere congratulations to the 99,000 people who make up Mercadona because, when faced with exceptional situations, we outdo ourselves more and more every day.

It is in the mental effort made by all of them, as well as the 3,000 product suppliers we collaborate with, that the success of our company model lies, which allows us to adapt quickly: detect problems, pivot to get another perspective, accept challenges and apply solutions jointly. Thanks to this approach, by implementing various initiatives, we have managed to improve our management for yet another year.

In addition to this progress, in 2022, we made a considerable investment effort of 923 million euros to continue building and consolidating Mercadona. We opened 63 new supermarkets between Spain and Portugal, enabling us to end the year with 1,676 stores. Furthermore, we launched two new Hives (warehouses dedicated exclusively to the preparation and distribution of online shopping orders) in Alicante and Seville, and we expanded the Ready-to-Eat section. We have also continued to make progress with the construction, remodelling and adaptation of the logistics centres as well as the innovation and development of new IT tools. Meanwhile, the first phase of the new offices in Albalat del Sorells (Valencia) has been initiated, and the development of our international project in Portugal has been reinforced.

On top of all these initiatives, it is worth highlighting the extraordinary work of our suppliers to develop and improve products that, with conclusive quality, allow us to offer an effective selection. This collaboration and acquisition work has reinforced Mercadona as the trusted supermarket of more than 5.7 million households who shop daily in our supermarkets. Without the trust of our “Bosses”, for which I am very grateful once again this year, Mercadona’s growth and sales performance, which have risen by 11.6% to 31,041 million euros, would not be possible.

“Congratulations to the 99,000 people who make up the company because, when faced with exceptional situations, we outdo ourselves more and more every day. Proof of our effort, work, agility and capacity for self-criticism”

Because if there's one thing all of us who form part of Mercadona are proud of, it's precisely the evolution and contribution of our company to the prosperity of our country. We are a company that generates wealth, as reflected by our direct and indirect contributions: 2,263 million euros, 12% more than in 2021. Or the direct tax figure, which exceeded 390 million euros, increasing 13% compared to the previous year. Likewise, Mercadona obtained a profit of 718 million in 2022, up 5.6%. This profit results in profitability of 2 cents per euro, which is why we're aware how much we can improve to move forward in the consolidation of the Mercadona Project.

The company is not only immersed in the creation of wealth and well-being but also in the creation of stable, quality jobs, as reflected by the figures from 2022, during which year it increased its workforce between Spain and Portugal by 3,200 people. A team of 99,000 employees for whom Mercadona has guaranteed that it will maintain their purchasing power with the announcement of salary increases in line with inflation, and with whom Mercadona has once again shared its profit: 405 million euros as performance-related bonuses, 8% than in 2021.

Our sustainable prosperity model also forms part of the company's relationship with society. We have implemented numerous initiatives focused on the development and well-being of people, from the donation of 1.5 million euros for Ukrainian refugees to the delivery of more than 25,100 tonnes of food to charity organisations, 22% more than in 2021. Likewise, aware of how much sustainable management can continue to contribute to preserving and protecting the planet, Mercadona has remained immersed in its environmental commitment, which it pursues through the implementation of its waste, carbon footprint and water footprint policy.

With 2022 behind us, we are starting a new year in which, in addition to the already familiar territory of uncertainty and our concern with high inflation, we must also overcome a new challenge: high interest rates, which will result in a drop in the purchasing power of our "Bosses" and an obvious impact on their shopping basket. Mindful of this situation, Mercadona has already marked out a path in which our company model, honesty, self-criticism and daily effort are key factors. Overcoming these challenges will depend exclusively on our individual and collective effort and our ability to progress towards becoming a Radical Totaler, always offering products of conclusive quality that give our "Bosses" the chance to be right. We are certain that if each and every one of us meets the targets set, Mercadona will continue to do well.

Thanks for yet another year to everyone for your commitment, to the Board of Directors for their trust in the Management Committee, a determining factor to face the coming challenges, and to our shareholders, for their constant support, in particular, our shareholder and friend Juan Carlos Gómez, who sadly passed away in December. I would like to take this opportunity to thank him for his involvement and support and offer the Gómez Gómez family my sincerest condolences.