Alicorp S.A.A.: Third Quarter 2018 Consolidated Financial Statements

LIMA, PERU / ACCESSWIRE / October 31, 2018 / Alicorp S.A.A. (“the Company” or “Alicorp”) (BVL: ALICORC1 and ALICORI1) announced today its unaudited financial results corresponding to the Third Quarter 2018 (Q3 18′). 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). Financial figures include the effect of the adoption of IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from Contracts with Customers). Additionally, consolidated statements include results of the recently acquired companies located in Bolivia (“Industrias de Aceite S.A.” or “Fino” and “Sociedad Aceitera del Oriente S.R.L.” or “SAO”).

FINANCIAL HIGHLIGHTS

Consolidated Revenue amounted to S/ 2,208 million (+23.9% YoY), while Volume reached 668 thousand tons (+38.2% YoY). Excluding Fino and SAO, Revenue amounted to S/ 1,884 million (+5.7% YoY), while Volume reached 524 thousand tons (+8.4% YoY). Excluding the recently acquired companies in Bolivia (“Fino” and “SAO”), the leading business contributors to the increase in Revenue and Volume were: i) Consumer Goods Peru, growing 6.1% YoY in Revenue and 4.7% YoY in Volume, ii) Aquaculture, rising 19.6% and 18.8% YoY, respectively, and iii) B2B, with 4.2% and 4.3% YoY increase, respectively.
Revenue and Volume from the Consumer Goods Peru business reached S/725 million (+6.5% YoY) and 148 thousand tons (+5.3% YoY) during Q3 18’Several factors explain growth, especially the following: i) an ad-hoc portfolio segmentation and strong brand positioning in all the segments, ii) the growth of our value products’ portfolio, achieved through our distribution strategy that caters to lower
socio-economic levels, and iii) the performance of our recent innovations. Additionally, it is important to note that our commercial strategy resulted in an equal or a higher volume share in 13 out of our 19 categories (including subcategories).
Regarding product innovation, during Q3 18′ the Company launched/revamped 21 products (14 in Consumer Goods Peru, 5 in B2B, and 2 in Consumer Goods International). The most relevant in the Consumer Goods Peru business were the following: i) in the Cookies and Crackers category, the new “Soda V Plain”, ii) in the Frozen Foods category, the new “Tumbay” potato, under the “Cocinero” brand, and iii) in the Softeners category, a new 5L format under the “Bolivar” brand. In the Consumer Goods International division, we launched 2 products. In Brazil, a new version of the “Plusbelle” shampoo and conditioner with argan and macadamia oil was launched. In Ecuador, a new tomato sauce was launched under the “Alacena” brand. Finally, in B2B, our most relevant launch was an instant yeast under the “Nicolini” brand.
Gross Profit reached S/ 554 million (+9.1% YoY) while Gross Margin decreased by
3.4 p.p. YoY to 25.1%. Excluding Fino and SAO, Gross Profit amounted to S/ 492 million (-3.1% YoY), while Gross Margin decreased 2.4 p.p. to 26.1%. The margin decrease, excluding Fino and SAO, was primarily explained by: higher raw material prices mainly for the aquaculture business, coupled with a revenue mix shift towards value products. Nevertheless, we managed to partially offset the increase in raw material prices, through efficiencies within other inputs and transformation costs such as packaging, manufacturing, logistics, among others. These costs, excluding Fino and SAO, represented 16.3% of Total Revenue in Q3 17′ and 15.0% in Q3 18′, a 1.3 p.p. decrease.

EBITDA amounted to S/ 277 million (+11.9% YoY), and EBITDA Margin reached 12.6%, a decrease of 1.3 p.p. compared to Q3 17′. Excluding Fino, SAO, and non-recurring expenses (mainly related to the recent acquisitions), EBITDA amounted to S/ 279 million
(+12.5% YoY), while EBITDA Margin reached 14.8% (+0.9 p.p.). These aforementioned non-recurring expenses are mainly related to the acquisition of both companies along with i) restructuring expenses, i) impairments, and iii) gains or losses from sales of non-core assets, as we previously defined these items as non – recurrent. Even though Gross Margin declined in 2.4 p.p. we managed to offset this effect in 1.5 p.p. driven by our efficiency program.
Consequently, Net Income totaled S/136 million during Q3 18′, (+15.3% YoY), while Net Margin reached 6.2%, (-0.5 p.p. YoY). Excluding Fino, SAO, and non-recurring expenses Net Income amounted to S/ 155 million, while Net Margin reached 8.3%. Earnings per Share (EPS) increased from S/ 0.140 in Q3 17′ to S/ 0.158 in Q3 18′ (+15.2% YoY). Excluding Fino and SAO, Earnings per Share was S/ 0.182 in Q3 18′.
Cash flow from Operations year-to-date (YTD) through September 2018 was S/ 590 million, S/ 109 million lower than the figure generated as of January through September 2017. The lower cash flow is explained by only marginal improvements in Working Capital, when compared to significant efficiencies gained during 2016 and 2017, as a result of the beginning of the efficiencies program implementation. Cash Flow used in Investing Operations YTD was S/ -1,119 million, compared to S/ -34.7 million registered through September 2017 explained by the acquisitions of Fino and SAO which amounted to S/ 1,095 million, while CAPEX investments as of September 2018 were S/ 150 million.
As of September 2018, Net Debt increased by S/ 1,254 million compared to December 2017, reaching S/ 2,153 million. The increase was mainly due i) the debt undertaken for Fino and SAO’s acquisitions (US$ 400 million) and ii) the additional debt from the acquired companies. Total Debt was S/ 3,232 million as of September 2018, (S/ 1,290 million higher compared to December 2017).
Net Debt-to-EBITDA ratio increased from 1.00x as of December 2017 to 2.21x as of September 2018.

For a full version of ALICORP’s Third Quarter 2018 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)
Cordially invites you to discuss Third Quarter 2018 Results

Date: Friday, November 2, 2018
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: ALICORP

Alicorp’s 3Q18 Results will be accompanied by a webcast presentation available at:
https://webcasts.eqs.com/alicorp20181102

INVESTOR RELATIONS CONTACT

Alexander Pendavis
Corporate Finance Director & IRO
T: (511) 315-0800 Ext.444410
E-mail: apendavish@alicorp.com.pe
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: 526857