en alicorp 1q13prvf

8/18/2019 En Alicorp 1q13prvf

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First Quarter 2013 Consolidated Financial Statements

Sales reached S/. 1,221.5 mill ion , a 23.3% i ncr ease

versus First Quarter 2012; volume sales reached

346.0 thou sand to ns, a 19.1% incr ease versus Firs t

Quarter 2012 due to addit ional sales generated by

companies acquired Industr ias Teal and Pasti f ic io

Santa Amalia, and sales increases in coo kies, pasta,

edible oi ls, detergents and fis h feed.

Lima, Peru, April 30, 2013. Alicorp S.A.A. (“the Company” or “Alicorp”) (BVL: ALICORC1 and ALICORI1)

announced today its unaudited financial results corresponding to the First Quarter 2013 (“1Q13”). Financial

figures are reported on a consolidated basis in accordance with International Financial Reporting Standards

(“IFRS”) in nominal Peruvian Nuevos Soles. This Press Release 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 HIGHLIGHTS

During 1Q13, sales increased 23.2%, while volume rose 19.1% compared to 1Q12, mainly due to

additional sales generated by companies acquired Industrias Teal and Pastificio Santa Amalia and

sales increases in cookies, pasta, edible oils, detergents and fish feed.

Gross Profit totaled S/. 310.3 million during 1Q13, a 16.6% increase compared to the S/. 266.1 million in

1Q12, mainly due an increase in sales volume. Gross Margin was 25.4% in 1Q13, a decline compared to

the 26.8% reported during 1Q12. due to higher costs of raw materials mainly wheat.

EBITDA reached S/. 133.2 million during 1Q13, versus S/. 127.8 million reported for 1Q12. EBITDA

margin declined from 12.9% in 1Q12 to 10.9% in 1Q13, mainly due an increase in fixed and variable

operating expenses. It is important to mention that this quarter reported extraordinary expenses for S/.

11.6 million generated by financial fees, legal advisory, incentives, layoffs, and other acquisition related

fees. Without considering this extraordinary fees EBITDA margin would have been 11.9%. Net income

for the quarter reached S/. 45.3 million, a decline of 56.3%, compared to the S/. 103.7 million reached in

1Q12, the period during which the Company sold Omega 3 Business and generated revenue of S/. 45.1

INVESTOR CONTACT

Ms. Fiorella Debernardi Baertl

Treasury Manager & IRO

T: (511) 315-0820F: (511) 315-0867

E-mail: [email protected]


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million. Without considering revenues of Omega 3, Net margin for 1Q12 would be 5.9% vs 1Q13 3.7%.

These results were affected by higher financial expenses and exchange rate loss.

During 1T13, Alicorp was active in innovation, launching 3 new products (a new presentation of Plusbelle

Effect line, a new Obekon cookie, and new variety of Panisuave shortenings), and re-launching 2

products (Zorro and Cristal dish detergents).

On January 4, 2013, Alicorp acquired for S/. 413.9 million, 99.11% of the common stock and 93.68%

investment stock of Industrias Teal S.A., (“Teal”) Teal manufactures and markets panettones,

chocolates, candies, flour, pastas and cookies under the Sayon brand.

On February 6, 2013, Alicorp purchased, via its Brazilian subsidiary Alicorp do Brasil , a 100% stake in

Pastificio Santa Amália S.A. (“Santa Amalia”), a Brazilian company dedicated to the manufacture and

marketing of food consumer goods such as pastas, jelly, chocolate powder, cookies, panettones,sauces, among others, and distributes personal and home care products for third-parties. Santa Amalia

has over 50 years of experience in the Brazilian market and is a leading pasta player in Brazil and the

number one pasta company in the state of Minas Gerais.

On March 15, 2013, Alicorp successfully issued US$ 450 million in senior unsecured bonds in the

international market. Alicorp received investment grade with ‘stable perspective’ from the international

risk rating agencies Fitch Ratings (“BBB”) and Moody’s (“Baa2”).

On March 26, 2013, the Company inaugurated its new balanced food production plant (Nicovita Brand)

in Ecuador.

FINANCIAL INFORMATION

1. Net Debt to EBITDA is defined as total financial debt divided by EBITDA for the last twelve months. This EBITDA doesnot consider EBITDA generated by acquired companies. If this EBITDA is considered, last twelve months EBITDA shall be S/. 611million with a Gross Debt / EBITDA ratio of 3.20x

2. Leverage Ratio is defined as Total Liabilities divided by Shareholders’ Equity 3. ROE is defined as last twelve months Net Profit divided by Average Shareholders’ Equity for the last twelve months

FINANCIAL HIGHLIGHTS

(In millions o f Peruvian Nuevos Soles) 1Q2013 1Q2012 YoY 4Q2012 QoQ

Net Sales 1,221.5 991.4 23.2% 1,233.5 -0.98%

Gross Profit 310.3 266.1 16.6% 335.2 -7.4%

Operating Profit 109.0 106.8 2.1% 132.8 -17.9%

EBITDA 133.2 127.8 4.3% 153.7 -13.3%

Net Earnings for the Period/Year 45.3 103.6 -56.3% 82.6 -45.2%

Earnings per Share (Commun Shares) 0.053 0.121 -56.3% 0.097 -45.2%

Current Assets 2,177.8 1,556.7 39.9% 2,234.2 -2.5%

Current Liabilities 1,384.3 751.1 84.3% 1,270.6 8.9%

Total Liabilities 3,446.7 1,389.9 148.0% 2,175.2 58.5%

Working Capital 793.5 805.6 -1.5% 963.6 -17.7%

Cash and Cash Equivalents 163.0 181.4 -10.2% 496.1 -67.1%

Total Financial Debt 1,969.8 608.9 223.5% 1,328.8 48.2%

Bank Loans 436.1 79.1 451.3% 581.1 -25.0%

Long-Term Debt 1,533.8 529.8 189.5% 747.7 105.1%

Shareholders' Equity 2,076.6 1,898.8 9.4% 2,129.6 -2.5%

RATIOS

Gross Margin 25.4% 26.8%

Operating Margin 8.9% 10.8%

EBITDA Margin 10.9% 12.9%

Current Ratio 1.57 2.07

Gross Debt to EBITDA 3.48 1.12

Leverage Ratio 1.66 0.73

Return on Equity 14.5% 18.8%


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991 1,058

1,190 1,234 1,221

26.8% 27.5% 27.5% 27.2% 25.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Sales and Gross Margin

(Millons Soles)

Ventas Margen Bruto

INCOME STATEMENT

Sales

Sales totaled S/. 1,222.5 million In 1Q13, a 23.2%

increase YoY. Domestic sales increased 10.8% YOY,

while international sales increased 58.3% YoY. During the

quarter, international sales represented 33.2% of Total

Sales, primarily due to increased sales in Brazil, Chile and

Argentina.

Main contributors to sales growth in 1Q13 were the sales

generated by companies acquired Industrias Teal and

Pastificio Santa Amalia and the following categories:

cookies, detergents and edible and bulk oils. Alsocontributing to sales were the fish feed category in Chile,

following the acquisition of Salmofood , as well as shrimp

feed in Ecuador.

Volume in 1Q13 increased 19.1% compared to 1Q12,

mainly due to additional sales generated by companies

acquired Industrias Teal and Pastificio Santa Amalia and

growth in the categories of: cookies, pasta, edible oils in Peru; dish detergent and detergent in Argentina as

well as fish feed in Ecuador.

Gross Profit

Gross Profit totaled S/. 310.3 million during 1Q13, a 16.6% increase compared to 1Q12, mainly explained by

additional sales generated by companies acquired Industrias Teal and Pastificio Santa Amalia, and growth

in sales volume. Gross Margin decreased slightly from 26.8% to 25.4% YoY due to higher cost of raw

materials, mainly wheat.

Argentina

40%

Ecuador

23%

Chile

17%

Brasil

6%

Colombia

4%

Haiti

2%

Others

9%

International Sales

(Last 12M to March 31)


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Alicorp is well-positioned to offset the volatility of commodity prices due to the following: 1) a raw material

purchasing strategy that allows pricing flexibility, 2) consistent cost and expense efficiency management to

improve Alicorp’s competitiveness and 3) diversification of the product portfolio to include higher value-added

products,

Operating Profit and EBITDA

Operating Profit totaled S/. 109.0 million (8.9% of net sales)

in 1Q13, a 2.0% increase compared to 1Q12.

Earnings before interest, tax, depreciation and amortization

(EBITDA) was S/. 133.2 million during 1Q13, higher than the

S/. 127.8 million obtained in 1Q12. EBITDA increased

mainly due: 1) higher Gross Profit compared to 1Q12, 2)

higher extraordinary expenses for S/. 11.6 million and 3) an

increase in operating expenses during 1Q13. As a result,

EBITDA margin reached 10.9% in 1Q13 compared to 12.9%

in 1Q12. Without considering extraordinary expenses of S/.

11.6 million, EBITDA margin shall be 11.9%

Net Financial Expenses

Net Financial Expenses increased by S/. 15.8 million in 1Q13 YoY, mainly due to higher interest costs due to

higher indebtment as well as higher exchange rate differences.

Net Income

Net Income in 1Q13 reached S/. 45.3 million (3.7% of Total

Sales), mainly due to higher operating expenses and

higher net financial expenses. The drop of 56.3% in 1Q13,

compared to the S/.103.7 million reached in 1Q12 is

explained by the Omega3 business divestment, which

generated a S/.45.1 million profit. Without considering

Omega3 profit, net margin for 1Q12 shall be 5.9%. This

result was influenced by higher financial expenses and

exchange rate differences.


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During 1Q13, Earnings per Share were S/. 0.053, lower than the S/. 0.121 reported in 1Q12 due to the

higher Net Income explained by the Omega 3 divestment.

BALANCE SHEET

Assets

As of March 31, 2013, Total Assets increased S/. 1,274 million, or 29.7%, mainly as a result of an increase

of S/. 1,330.0 million in the Non-Current Assets. The increase in Non-Current Assets was explained mainly

by higher goodwill levels from the acquisitions of Santa Amália and Teal, among other financial assets.

Cash and Cash Equivalents decreased from S/. 496.1 million as of December2012 to S/. 162.9 million as ofMarch 2013. Accounts Receivables increased from S/. 751.1 million as of December 2012 to S/. 798.3

million as of March 2013. Collections were made in an average 47.1 days in 1Q13 compared to 26.1days in

4Q13.

Inventories increased from S/. 755.2 million as of December 2012 to S/. 880.1 million as of March 2013,

mainly due to an increase in raw materials purchases as a result of commodity purchasing strategies.

Inventory turnover increased from 82.4 to 88.4 days from 4Q12 to 1Q13, respectively.

Prepaid Expenses increased from S/. 38.4 million as of December2012 to S/. 71.8 million as of March 31,2013, mainly due to an increase in commissions and loan interest.

Property, Plant and Equipment, increased S/. 172.3 million, from S/. 1,326.8 million as of December 2012 to

S/. 1,499.1 million as of March 2013, mainly due to:1) the construction of the new detergent plant in Lima,

which the Company estimates will be operational during 2013 and 2) the purchase of land in Lima, where the

Company plans to build a new distribution center that is currently in development stage. Additionally, the

acquisitions of Industrias Teal and Santa Amalia also contributed to the increase.

Liabilities

As of March 31,2013, Total Liabilities increased by S/. 1,306.3 million, or 60%. This growth was mainly due

to a S/. 113.6 million increase in total Current Liabilities, and a S/. 1,192.7 million increase in Non-Current

Liabilities.

The variation in Current Liabilities was primarily due to Other Accounts Payable, which increased by S/.

165.7 million (S/. 102.5 million due to Dividends payable, S/ 31.3 million due to a residue payable for the

purchase of the stake of Teal), an increase of S/. 133.1 million in Accounts, a decrease of S/. 145.0 million in

Other Financial Liabilities, as a result of lower imports financing and a decline of S/. 43.8 million in


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Provisions for Employee Profit Sharing. Accounts Payable turnover decreased from 43.6 days in 4Q12 to

49.2 days in 1Q13.

Non-Current Liabilities increased mainly due to Other Financial Liabilities, which rose S/. 786.1 million, as a

result of: 1) the issuance of international senior unsecured bonds for US$ 450 million, which destined to

reassess the overall risk profile of short and medium-term existing debt, 2) taxes due related to the

acquisition of Santa Amalia for S/. 400.4 million, and 3) a US$ 40.0 million payment to assess the overall risk

profile of Salmofood’s medium-term debt. Total Short-Term Debt as of March 31, 2013 totaled S/.

436.1million. The Company operates with revolving credit lines for import financing and working capital

requirements.

Total Financial Long-Term Debt as of March 2013 totaled S/. 1,533.8 million, representing 77.9% of Total

Debt. The currency mix was: 12% in Peruvian Nuevos Soles, 67% in U.S. Dollars, 16% in Brazilian Reals,

with the remaining 4% in Argentine Pesos. The duration of debt averaged 6.9 years (not including short-term

debt). During 1Q13, Alicorp undertook 4 foreign exchange forward agreements in Peru and a total of 4

interest hedges operations. Currently, the majority of bank financings are fixed-rate, either direct or through

derivative transactions. The average rate in 1Q13 for loans in USD was 3.66%.

Equity

Shareholders’ Equity decreased S/. 32.3 million, or

1.5%, from S/. 2,108.9 million as of December 2012

to S/. 2,076.6 million as of March 2013, mainly due

to transfers from Retained Earnings to Other

Accounts Payable for a total of S/. 102.5 million,

related to the Dividends Payable and Net Profit for

S./ 45.3 million. As of March 2013, ROE reached

14.5% (this ratio considers the average

Shareholders’ Equity and Net Earnings for the lasttwelve months). If we include acquisitions equity in

our analysis, ROE would reach 15.6% if we consider

Net Income and average Equity of the last 12 months.

CASH FLOW STATEMENTS

Operating Activities

During 1Q13, cash flow from operations was S/. 52 million compared to S/. -28.6 million obtained during

1Q12. The Company´s cash position totaled S/. 163 million at March 2013.


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Investing Activities

Cash flow from investing activities for the first three months of 2013 totaled S/. -697.7 million compared to S/.

0.8 million for the same period in 2012. Net cash flow during the period was mainly from 1) acquisition

outflows for S/. 571.1 million and 2) CAPEX investments for S/. 118.1 million (mainly explained by the

acquisition of land in Chilca, improvements in detergent, pasta and sauces plants , as well as the expansion

of the distribution center in Arequipa).

Financing Activities

Cash flow from financing activities for the January to March 2013 period was S/. 312.6 million, compared to

S/. 98.6 million for the same period of 2012 as a result of higher long-term financing activities such as the

issuance of the international senior unsecured bonds as well as the remaining debts pertaining to the

companies acquired.

Existing financing are subject to certain debt restrictions, liquidity, profitability and a minimum Shareholders’

Equity. Alicorp is fully compliant with the existing credit requirements, which allows the Company to take on

additional debt, if necessary.

Liquidity and Leverage Ratios

The Company’s liquidity ratio decreased from 1.76x as of

December 2012 to 1.57x as of March 2013, mainly due to a

cash decrease. The leverage ratio increased from 1.00x as of

December 2012 to 1.68x as of March, 2013 due to higher

financial debt. In terms of the Gross Debt / EBITDA ratio, this

ratio rose from 2.30x as of December 2012 to 3.5x as of

March 2013 also due to higher financial obligations. The

Company reported a last 12 months EBITDA figure of S/.

565.8 million (without considering the EBITDA generated by

acquired companies Teal and Santa Amalia). Considering

EBITDA generated by acquired companies during the last 12 months Gross Debt/EBITDA ratio is 3.20x


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OTHER IMPORTANT EVENTS

Industrias Teal Acquisition

On January 4, 2013, Alicorp acquired a 99.11% stake of the common stock and 93.68% investment stock in

Industrias Teal S.A for S/. 413.9 Million. Industrias Teal is one of the leading players in the Peruvian market

for consumer good products.

Industrias Teal’s portfolio includes: industrial flours, pastas, chocolates, and confitery. The company covers a

large part of the domestic territory and exports 10% of sales, mostly throughout Latin America. It has a

production facility, and administrative offices and warehouses property.Its main brands in the cookies

category are Margaritas, Soda Sayon, Zoológico and Vainilla; in industrial flours it has Harina Industrial,

Harina Industrial Sayon .

The acquired brands from Industrias Teal will allow the Company to enter to the confitery, chocolate and

panettones market, and develop synergies and economies of scale in the categories in which Alicorp already

operates, such as industrial flours, pasta and cookies, in which Sayon has an strong positioning in both, mid

income and low income segments

Pastificio Santa Amalia

On February 6, 2013, Alicorp acquired via its subsidiary Alicorp do Brasil, a 100% stake in Pastificio Santa

Amalia S.A. in Brazil for R$190 million (approximately US$ 95.8 million), with the objective to become a

leading player in the pasta market in Latin America. Santa Amalia is located in Minas Gerais, with a

population of over 29 million, representing 8.9% of Brazil ’s GDP and one of the most important economies in

the country.

Santa Amália is a main player within the Brazilian pasta market with expected gross sales of R$ 573 million

(approximately US$ 286 million) in 2012. The company operates in two business segments: 1) a diversified

product portfolio of consumer food goods, which includes pastas, jellies, chocolates, juice powder,

panettones, sauces, cookies, among others and 2) and distributes personal care and home products for

third-parties.

The company is the leading pasta player in Minas Gerais, and the second-largest in the industry in the

Brazilian Southeastern Region.


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International senior unsecured bonds issue

On March 15, 2013, Alicorp successfully issued international senior unsecured bonds for US$ 450 million in

the international market under the Rule 144A and the Regulation S of the United States Securities 1933 Act.

Alicorp obtained investment grade, with ‘stable perspective’, from the international risk rating agencies Fitch

Ratings (“BBB”) and Moody’s (“Baa2”). The risk rating agencies agreed that Alicorp has a stable business

model, based on a solid and diversified product portfolio with leading market brands. The amount raised from

this issue was intended to pay the existing financing debt and to finance future fixed assets investments.

Inbalnor facility inauguration

On March 26, 2013, we inaugurated our new Nicovita

balanced food brand production facility in Ecuador. Our

facility is one of the most modern facilities in the balanced

feed manufacturing for the global aquaculture industry and

has an annual production capacity of 100,000 balanced

feed tons.

New Product Launches and Re-launches

During the quarter we have launched and re-launched products related to the consumer goods business and

in the industrial products business. The launches and re launches corresponding to 1Q13 were:

On January 2013, we launched a new 200mL

presentation of the Plusbelle Effect line for hair care in

the Argentine market. The new presentations include:

Reparación Total (Total Recovery), Extra Brillo (Extra

Shine) and Color Brillante (Brilliant Color). The objective

of this strategy is to continue creating brand value for

Plusbelle through the consolidation in the personal care

and beauty industry.


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On March 2013, a new cookie was launched in

Argentina under the Okebon brand, mainly focused on

kids market.. The cookies have a new formula,

containing additional milk and calcium strengthening

customer’s perception of a healthier and nutritive

product, coupled with a playful and funny packaging.

In Argentina, the Company also had two re-launches in

March in the dish detergent category with the Zorro and

Cristal brands. This strategy seeks to expand the market share by better differentiating these two brands,

which previously were packaged in the same container and received a similar perception in terms of product

quality. In this manner, we could direct them to 2 different segments.

Zorro: For greater value to the Zorro brand,

changing the bottle, improving the label quality

and changing varieties in both versions: creamy

and crystalline.

Crystal : It plays a value for money role for the

low-income segment with crystalline and creamyvarieties.


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In February 2013, for the Business to Business

Branded Products projects platform, we launched

a new variety in the Shortenings segment by

extending the Panisuave Plus line, in order to

strengthen its position and increase

competitiveness. The product, as well as being

the lowest priced, will enable savings of up to

50% in terms of sugar consumption in basic

bread baking recipe, generating double savings

Finally, in the same category, we re-launched the

Famosa brand in order to offer clients better

results in the production processes, offering the

same recognized quality while renewing its image.

The product now shows a more modern package

that includes recipes and practical advice for

succeeding in the bread baking business. In

addition, now Famosa is healthier, having0%trans-fat (TFA).


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About Alicorp

Alicorp is a leading consumer goods company headquartered in Peru, with operations in other Latin

American countries, such as Argentina, Brasil, Colombia, Chile, Ecuador, and exports to 23 other countries.

The Company is focused in three core businesses: (1) Consumer Product Goods (food, personal and home

care products), in Peru, the Mercosur and Andean & Central America regions, (2) Industrial Food Products

(industrial flour, industrial lard, pre-mix and food service products, mainly in Peru), and (3) Animal Nutrition

(fish and shrimp feeding along LATAM). Alicorp employs more than 6,400 employees at its operations in

Peru and international subsidiaries. The Company´s common and investment shares are listed on the Lima

Stock Market under the symbol ALICORC1 and ALICORI1, respectively.

Disclaimer

This Press Release may contain forward-looking statements concerning recent acquisitions, its financial and

business impact, management’s beliefs and objectives with respect thereto, and management’s current

expectations for future operating and financial performance, based on assumptions currently believed to be

valid. Forward-looking statements are all statements other than statements of historical facts. The words

“anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “intends,” “likely,” “will,”

“should,” “to be,” and any similar expressions or other words of similar meaning are intended to identify those

assertions as forward-looking statements. It is uncertain whether the events anticipated will transpire, or if

they do occur what impact they will have on the results of operations and financial condition of Alicorp or of

the consolidated company. Alicorp does not undertake any obligation to update the forward-looking

statements included in this press release to reflect subsequent events or circumstances.

Please refer to the Company’s Management Discussion & Analysis for the years ended December 31, 2012,

2011 and 2010, as well as other public filings for a description of operations and factors that could impact the

Company’s financial results.

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