ALICORP S.A.A.: Alicorp First Quarter 2019 Consolidated Financial Statements

LIMA, PERU / ACCESSWIRE / May 1, 2019 / Alicorp S.A.A. (“the Company” or “Alicorp”) (BVL: ALICORC1 and ALICORI1) announced today its unaudited financial results corresponding to the First Quarter 2019 (Q1 19′). Financial figures are reported on a consolidated basis and are in accordance with International Financial Reporting Standards (“IFRS”) in nominal Peruvian Soles, based on the following statements, which should be read in conjunction with the Financial Statements and Notes to the Financial Statements published at the Peruvian Securities and Exchange Commission (Superintendencia del Mercado de Valores – SMV). Consolidated statements include i) financial results of the Bolivian acquired companies during Q2 18′ and Q3 18′ (“Industrias de Aceite S.A.” or “Fino” and “Sociedad Aceitera del Oriente S.R.L” or “Sao”), and ii) financial results of Intradevco Industrial S.A. or “Intradevco” in January 2019. Financial figures also include i) the effect of the adoption of the International Accounting Standard 29 & 21 (or IAS 29 & 21, Financial Reporting in Hyperinflationary Economies) in Argentina and ii) the adoption of IFRS 16 (Leases standard). Hereafter, references to IAS 29, include the IAS 21 application.

FINANCIAL HIGHLIGHTS

This quarter’s results include two accounting effects that were not considered during Q1 18′: i) the adoption of the International Accounting Standard 29 (IAS 29) in Argentina as it is now considered a Hyperinflationary economy and ii) the adoption of International Financial Reporting Standard 16 (IFRS 16) regarding Leases. We restated our Q1 18′ financial data to comply just with IFRS 16. Hence, we will exclude the effect of IAS 29 in Q1 19′ results when necessary to make a fair comparison in terms of variation and performance. Additionally, it is essential to note that Q1 18′ did not include the financial results of our latest acquisitions: i) Fino and Sao, acquired in Q2 18′ and Q3 18′ and ii) Intradevco, acquired in January 2019.
Consolidated Revenue amounted to S/ 2,226 million (+30.1% YoY), while Volume reached 685 thousand tons (+48.5% YoY). Excluding the impact of acquisitions, the leading contributors to the increase in Organic Revenue and Volume, were the following businesses: i) Consumer Goods Peru, growing 4.8% YoY in Revenue and 4.8% YoY in Volume, ii) B2B, rising 6.6% YoY and 8.1% YoY in Revenue and Volume, respectively, and iii) Aquafeed, which increased 1.1% YoY in Revenue and 0.6% YoY in Volume.
During Q1 19′, Revenue from the Consumer Goods Peru business reached S/753 million
(+20.7% YoY) while Volume reached 157 thousand tons (+23.8% YoY) . Excluding Intradevco’s financial figures, Revenue and Volume both grew 4.8% YoY. Organic growth was underpinned by the Revenue increase of Detergents (7.7% YoY), Canned Tuna (70.9% YoY), Cookies & Crackers
(11.0% YoY), and Sauces (9.2% YoY). Furthermore, growth drivers during Q1 19′ were: i) An ongoing tiering-up trend in Detergents driven partly by our commercial activities focused in core brands (Bolivar & Opal); ii) the current momentum of our “Primor” brand in canned tuna, and our innovation strategy for Cookies & Crackers and Sauces with new formats and products. Additionally, it is relevant to remark that our commercial strategy resulted in an equal or a higher volume share in 12 out of our 17 categories, where the following can be highlighted: i) Canned tuna (+8.6 p.p. YoY), ii) Cooking Sauces (+ 6.8 p.p. YoY), iii) Stain Remover (+1.7 p.p. YoY), and iv) Dishwashing (+1.3 p.p. YoY). From now on, we are considering this base of 17 categories to measure our aggregate market share (including Intradevco).
Regarding product innovation, during Q1 19′ the Company launched/revamped 14 products/lines (7 in Consumer Goods Peru and 7 in Consumer Goods International). The most relevant in the Consumer Goods Peru business were the following: The new “Nicolini” line of ready-to-cook pre-mixes with a portfolio of 3 sauces; the new “Life” powder juice, offering a health-to-quality value proposition within the category, and a new variety of the “Primor” Edible Oil with higher nutrients content. In the Consumer Goods International division, we had 5 launches in Brazil and 2 in Argentina. In Brazil, we presented new varieties within our Pasta portfolio aiming to meet the market trends and new dynamics, while in Sauces we revamped our “Santa Amalia” tomato paste to strengthen the brand. Finally, in Argentina, we continue focusing in enhance our core brands in Laundry and Hair Care, our main categories.
Gross Profit reached S/ 545 million (+15.5% YoY) while Gross Margin decreased by
3.1 p.p. YoY to 24.5% mainly due to the inclusion of the low-margin Crushing business. Excluding the impact of acquisitions and IAS 29, Gross Margin was 27.4%, basically flat compared Q1 18′, despite higher raw material prices in the Consumer Goods International division in Brazil, the FX depreciation effect in Argentina, and a revenue mix towards value products in Consumer Goods Peru.
EBITDA amounted to S/ 244 million (+13.5% YoY) while EBITDA Margin reached 11.0%, a decrease of 1.6 p.p. compared to Q1 18′. Excluding the impact of acquisitions, IAS 29 and non-recurring expenses, EBITDA amounted to S/ 216 million (-3.5% YoY) while EBITDA Margin was 12.5%, decreasing 0.6 p.p. mainly explained by i) anticipated selling and marketing expenses as a result of weaker consumption in Consumer Goods Peru (should be compensated in the year-to-go),
ii) lower contribution of our Aquafeed business explained by the 2 month-long worker’s strike occurred in our Fish Feed operation in Chile, and the increase in bad debt provision in our Shrimp Feed platform, and
iii) lower contribution from Brazil due to restructuring expenses, contraction of the pasta market in Area II as result of a consumer shift towards substitute products, and the logistic disruption explained by the implementation of a new warehouse system.
Consequently, Net Income totaled S/ 94 million during Q1 19′, (-8.2% YoY), while Net Margin reached 4.2%, (-1.8 p.p. YoY).Earnings per Share (EPS) decreased from S/ 0.119 in Q1 18′ to S/ 0.107 in Q1 19′. Excluding the impact of acquisitions, IAS 29 and non-recurring expenses, Net Income amounted to S/ 122 million (+10.0% YoY), while Net Margin reached 7.1% (+0.6 p.p.). Hence, “organic” Earnings per Share (EPS) increased to S/ 0.141 in Q1 19′.
Cash flow from Operations for Q1 19′ was S/ 52 million, S/ 0.3 million higher than the figure generated in the same period of 2018. The higher Operative Cash Flow is explained by Intradevco’s acquisition which offset the lower contribution from the Crushing Business. Cash Flow used in Investing Operations during Q1 19′ was S/ 1,693 million, compared to S/ 30 million obtained during the same period of 2018. Higher Cash Flow invested is explained by Intradevco´s acquisition which amounted to S/ 1,601 million, while CAPEX investments as of Q1 18′ were just S/ 62 million.
As of March 2019, Net Debt1 increased by S/ 1,815 million compared to December 2018, reaching S/ 4,044 million mainly reflecting the leverage undertaken for Intradevco’s acquisition. Net Debt-to-EBITDA ratio increased from 2.2x as of December 2018 to 3.9x as of March 20192.

For a full version of ALICORP’s First Quarter 2019 Earnings Release, please visit:

https://www.alicorp.com.pe/alicorp-ir/public/financial-information/reportes/conference-calls.html

Conference Call

Alicorp S.A.A. (BVL: ALICORC1 and ALICORI1)
First Quarter 2019 Earnings Conference Call

Date: Friday, May 3, 2019
Time: 12:00 p.m. Eastern Time
11:00 a.m. Lima Time

To access the call, please dial:
From the U.S.: 1-877-830-2576
From Outside the U.S.: 1-785-424-1726
Conference ID Number: ALICORP
Alicorp’s 1Q19 Results will be accompanied by a webcast presentation
available at:https://webcasts.eqs.com/alicorp20190503

INVESTOR RELATIONS CONTACT
Investor Relations Team
Phone: (511) 315-0800 Ext.444411
Fax: (511) 315-0867
InvestorRelations@alicorp.com.pe

ABOUT ALICORP

Alicorp is a leading Consumer Goods company headquartered in Peru, with operations in other Latin American countries, such as Argentina, Brazil, Bolivia, Chile, Ecuador, and exports to other countries. The Company focuses on four core businesses: (1) Consumer Products (food, personal and home care products), in Peru, Brazil, Bolivia, Argentina, Ecuador, Colombia and Chile, among other countries, (2) B2B Products (industrial flour, industrial lard, pre-mix and food service products), (3) Aquaculture (fish and shrimp feeding) and (4) Oilseeds crushing (soybean and sunflower) which is part of the vertically-integrated consumer business in Bolivia. Alicorp has over 7,600 employees in its operations in Peru and international subsidiaries. The Company´s common and investment shares are listed on the Lima Stock Exchange under the ticker symbols ALICORC1 and ALICORI1, respectively.

SOURCE: Alicorp S.A.A.

ReleaseID: 543695