Conference Call

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Conference Call
Fourth Quarter
2014
Financial
Results

Presentation3

[CLIENT NAME]

February 17, 2015
1

Agen
da

[CLIENT NAME]

2

Presentation3

Agenda

1

Opening Remarks

2

4Q14 Highlights

3 FY 2014 Highlights / Key Milestones
4

Operating and Financial Review

5

Guidance

6

Q&A

3
[CLIENT NAME]

Presentation3

2

4Q14 Highlights
 Revenue and Volume increased 5.7% and 1.3% YoY, respectively. Consumer Goods

revenues remained stable YoY, B2B Branded Products decreased 7.9% YoY and
Animal Nutrition revenues increased 50.5% maintaining
the
extraordinary
growth in previous quarters. Main contributors were: sauces, panettones,
cereals, fabric softeners, edible oils, industrial margarines, frozen products and
shrimp and fish feed
 We launched and re-launched 14 new products for Consumer Goods and B2B products
 Gross Profit increased 4.3%

explained by margin expansion in Consumer Goods Peru

and Animal
Nutrition
 EBITDA and EBITDA margin were S/. 175.9 million and 10.4% respectively,

(the YoY decrease is explained by significant reduction in Operating Income in
Argentina and extraordinary Income from tax benefits in Brazil in 4Q13)

 Net Income reached -S/. 168.6 million due to higher financial expenses related to

commodity hedging operations, higher financial expenses generated by Argentina
higher level of debt and higher interest rates, and higher exchange currency losses
 Alicorp issued S/. 116.0 million (Dec-2014) and S/. 500.0 million (Jan-2015) in local

Peruvian bonds encompassed within Alicorp´s 3rd Peruvian Corporate Bonds
Programme of
S/.1.0 billion, aimed at refinancing short-term liabilities and
reducing exposure to USD debt
 Alicorp was recognized within the Top 5 firms in Peru acknowledged for “Social
Responsibility and
Corporate Practices” by Merco and Gestión Magazine
[CLIENT NAME]

4

Presentation3

3

FY 2014 Highlights

 Revenue and Volume increased 8.0% and 5.6% YoY, respectively. Consumer Goods

revenues increased
2.4% YoY, B2B Branded Products remained stable (0.5% YoY) and Animal Nutrition
revenues increased
42.2% showing an outstanding growth in this year. Main drivers for growth were: pasta,
cereals, sauces,
detergent, panettones, industrial margarines and shrimp and fish feed
 During 2014, Alicorp launched 43 and re-launched 21 products, pushing for organic

growth through continuous innovation to increase value to our costumers
 Gross Profit increased 10.1% on the back of a margin expansion in consumer goods

Peru and Animal
Nutrition and a decrease in COGS despite operations in Argentina
 EBITDA

and
EBITDA
margin
amounted
to
S/.
692.2
million
and
11.0%
respectively, due to significant reduction in Operating Income in
Argentina and extraordinary expenses through the year

 Net Income decreased to S/. 18.9 million on the back of higher financial

expenses related to commodities hedging operations, higher financial expenses
generated by Argentina higher indebtedness, along with extraordinary effects for
2013 such as i) the REFIS Programme in Brazil and ii) sale of the Pet Business

[CLIENT NAME]

5

Presentation3

3

2014 Key Milestones
Business Developments
 Consumer Goods Peru: Alicorp acquired 100% stake in Global Alimentos, the

leading producer of branded ready-to-eat cereals in Peru under the “Angel” brand
 Animal Nutrition: We created Vitapro, a 100% Alicorp-owned subsidiary that

encompasses our aqua businesses in Peru, Ecuador and Chile. In addition, we
began the expansion of the Inbalnor shrimp feed plant in Ecuador to increase
production capacity to 210 thousands tons per year

 B2B Branded Products: We launched, Masterbread to focus on the production and

commercialization of frozen bakery products

Awards & Recognitions
 Euromoney recognized Alicorp as one of the top 10 Best Managed Companies in

Latin America and among top 5 Best Managed Companies in Peru
 For the 4th consecutive year, Alicorp was named one of the companies that are

recognized for Good Corporate Governance and was listed on this Index in the
Lima Stock Exchange. Alicorp was recognized for its good corporate practices,
transparency of information as well as professionalism standards
 Alicorp was recognized by Merco as one of the 10 best employers in Peru and

as part of the
Great Corporate Governance Index 2014
 G-Magazine and PwC acknowledged Alicorp as one of the 10 Most Admired

Companies in Peru for the third consecutive year
[CLIENT NAME]

6

Presentation3

Revenue and Gross Margin (%) Year-over-Year
(“YoY”)
4

Revenues & Gross Margin

Revenues & Gross Margin

(PEN Million)

(PEN Million)

1,59
8

1,56
3

1,644
1,688

6,285
5,81
8

4,474

28.6%

27.2%

27.7%

28.5%

28.2%

1,234

4Q13
3Q14

1Q14
4Q14

[CLIENT NAME]

2Q14

1,598

1,688

27.2%
27.9%

28.6%

28.2%

27.3%

27.4%

4Q12
2014

4Q13

4Q14

2012

2013

7

Presentation3

EBITDA and EBITDA Margin (%) Year-over-Year
(“YoY”)
4

EBITDA & EBITDA Margin

EBITDA & EBITDA Margin

(PEN Million)

(PEN Million)

75
3

697

3

243
20
2
16
4

15
0

56
0

3

17
6

1

10.8%
10.4%

10.5%
2

12.3%

15
4
12.5
%

4Q13
3Q14

1Q14
4Q14

[CLIENT NAME]

2Q14

4Q12
2014

24
3

15.2
%

4Q13

17
6

4

12.5%

12.9% 5

10.4
%

4Q14

2012

11.0%

2013

1

EBITDA and EBITDA margin without the tax benefits from REFIS program in Brazil would have been S/. 185.7 million and
11.6%
2
EBITDA and EBITDA margin for 4Q14 without extraordinary expenses would have been S/. 211.1 million and 12.5%
3Includes EBITDA from acquisitions for S/. 5.1 million
4
EBITDA and EBITDA margin for 2013 without extraordinary benefits from REFIS would have been S/. 695 million and
8
12.0%
5
EBITDA and EBITDA margin for 2014 without extraordinary expenses would have been S/. 726.5 million and 11.6%

Presentation3

4

2014 Performance by Business Unit & Regions

Alicorp seeks to continue its geographic diversifcation strategy
(PEN Million)

CONSUMER
PRODUCT GOODS

2014

- Revenues

PERU

- EBITDA
Margin

- Revenues

INTERNATIO
NAL

- EBITDA
Margin

- EBITDA
Margin

[ C L I E N T Mix
NAME]
Revenue

Var.
%

201
4

201
3

Var.
%

201
4

201
3

Var.
%

201
4

201
3

Var. %

2,297
.8

2,193
.7

4.7
%

1,471
.4

1,441
.6

2.1
%

112.
8

98.
9

14.1
%

3,883
.0

3,730
.5

4.1%

14.9
%1

15.4
%

10.9
%

11.5
%

12.7
%

16.2
%

1,266
.0

1,285
.9

0.
8

23.
0

1,135
.6

778.
8

3.7
%

11.8
%

6.9
%

9.0
%

13.7
%

10.2
%

3

3,563
.8

3,479
.6

10.9
%

14.1
%

Per
u
61.2%
1

ANIMAL NUTRITION

201
3

1.5
%

- Revenues

TOT
AL

B2B BRANDED
PRODUCTS
TOTAL

2.4
%

1,472
.2
10.9
%5

Ecuador
9.8
%

1,464
.6
11.5
%

Brazil
8.7
%

96.7
%

0.5
%

1,248
.4

877.
7

13.7
%

10.9
%

Argentina
8.7
%

12.6
%
45.8
%

2

2,402
.4
8.4
%4

42.2
%

Chil
e
8.5
%

13.8
%
2,087
.8
11.3
%

15.1%

7.9%

6,284
.4

5,821
.9

11.0
%

12.9
%

6

Others
3.1
%

Total EBITDA and EBITDA Margin ex extraordinary expenses resulted in S/. 352.7 million and 15.4% respectively

2

Total EBITDA of Peru includes Operating Losses from Other Businesses for S/. 26.6 million
Ex tax benefits from REFIS programme in Brazil, resulted in EBITDA margin of 7.4%

3
4

9Total EBITDA of other countries includes Operating Losses from Other Businesses for S/. 1.0 million
5

Ex adjustment in inventory costs, EBITDA and EBITDA margin resulted in S/. 42.7 million and 11.5% respectively
Ex tax benefits from REFIS programme in Brazil, resulted in EBITDA margin of 12.2%

6

Presentation3

Consumer Goods Peru

4

Highlights





Revenues increased 6.0% YoY and Volume increased 2.7% YoY
 Supported mainly by: sauces, panettones, cereals and edible oils
EBITDA reached S/. 99.0 million and EBITDA margin increased to 15.9% explained by lower COGS
We launched and re-launched 7 new products

Revenues & EBITDA Margin
(PEN Million)

(PEN Million)

2,194
587
50
0

17.0%
15.9%

4Q13
3Q14

1Q14
4Q14

[CLIENT NAME]

1,95
9

612

563
622

2Q14

2,298

518
622

587

14.9%

12.7%

4Q12
2014

4Q13

15.9%

4Q14

15.4%
14.9%
15.1%

2012

2013

10

Presentation3

Consumer Goods International

4

Highlights

Revenues decreased 11.8% YoY and Volume decreased 11.8% YoY
 Driven mainly by lower sales in Argentina (-22.1% YoY) explained by current recession in the
country
 EBITDA reached S/. 3.2 million and EBITDA margin decreased to 1.0% explained by a
significant lower operating income in Argentina as a result of price controls
 EBITDA and EBITDA Margin remained solid in Brazil
 We launched and re-launched 6 new products


Revenues & EBITDA Margin
(PEN Million)
(PEN Million)

2,649

22.4
%

1

1,286
361

298
3.3%

4Q13
3Q14

1,266
2

1Q14
4Q14

[CLIENT NAME]

325
6.4%

2Q14

324
319

7.8
%

3.9%
1.0%

18
6
4Q12
2014

10.6%
11.8%

361
319

3.7%
1.0%

4Q13

4Q14

2012

2013

1

Ex REFIS extraordinary income EBITDA margin resulted in 6.5%
Ex tax benefits from REFIS programme in Brazil EBITDA Margin resulted in 7.4%

2

11

Presentation3

4

B2B Branded Products (“B2B”)

Highlights




Revenues and volume decreased 7.9% and 11.0% YoY, respectively
 Driven by a decrease in industrial flours and grain sales
EBITDA and EBITDA Margin reached S/. 32.3 million and 8.7% respectively explained by an
increase of COGS and higher SG&A expenses

Revenues & EBITDA Margin
(PEN Million)

(PEN Million)

405
32
6
12.4
%

395

377
373

10.7%
11.0%

1,465

1,471

12.6%

11.5%

1,30
5

13.0
%

341

405
12.4%
10.9%

373
8.7%

13.2
%

4Q13
3Q14

1Q14
4Q14

[CLIENT NAME]

2Q14

4Q12
2014

4Q13

4Q14

2012

2013

12

4

Animal Nutrition (“AN”)

Highlights

 Revenue and Volume increased 50.5% and 40.4% YoY, due to an increase in sales of shrimp
feed in Ecuador and
higher sales of fish feed in Chile
 EBITDA increased 34.1% YoY to S/. 50.5 million on the back of strong sales increase and stable
gross margins
 EBITDA margin decreased 10.9% YoY, mainly due to an increase in SG&A expenses

Revenues & EBITDA Margin
(PEN Millions)
(PEN Millions)

1,248
373
87
8

297
312
248

266
492

15.2%
14.7%

15.4%
11.3%

13.5%

17
9
7.3
%

24
8

15.2%
13.7%

37
3
13.5%

11.3%

10.9%

4Q13
3Q14

1Q14
4Q14

2Q14

4Q12
2014

4Q13

4Q14

2012

2013

Presentation3

13

[CLIENT NAME]

Presentation3

4

Consolidated Debt

Net Debt /
EBITDA
(PEN
Million)

Main Drivers of Debt Evolution
Net Debt

EBITDA

1,936

2,000

1,893

2,057

2,403

2,732

636

675

759

783

763

770

3.15
x

3.05x
2.96x

3.55
x

2,57
7
697
329

3.70x

2.63
x

2.49
x

327

58

2,69
9

1,98
6

Debt 4Q13
Recovery

Global Alimentos

Plant

Argentina

Working Capital
4Q14

Debt

Debt Breakdown by currency
2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

11%
26
%

USD

PEN

57%

[CLIENT NAME]

BRL
ARS

14

Presentation3

4

Working Capital, Capex and SG&A Expenses
Working
Capital1
(Day
s)

CAPEX

Accounts Receivable
accounts payable

(PEN
millions)

Inventory
99.9

73.5
82.8
50.2
59.9

40.4
41.7

4Q13
3Q14

69.
7

57.1

Acquisitions

88.
3

80.0

382
69.
5

45.2

44.5

30
1

88

47.6

1Q14
4Q14

Property, Plant and Equipment

52

82

2Q14
4Q13

120

70
81

120

70

3Q14

1Q14

4Q14

2Q14

SG&A/Marketing

10.9%

[CLIENT NAME]

10.2%

10.6%

10.6%

5.2%

5.4%

5.8%

5.1%

6.0%

2.8%

2.4%

2.7%

2.5%

2.6%

4Q13

1Q14

2Q14

3Q14

4Q14

Marketing

Administrative Expenses

Selling Expenses

10.4%

(as % of Total Revenue)
1

Average days

15

Presentation3

4

FY 2014 Free Cash Flow Build Up

Main Drivers of Cash Flow Evolution
(PEN Million)

Operating Activities S/. 389.0

Financing Activities S/. 233.4

85.6
Investment Activities S/. 587.8
348.1
822.6
102.6
587.8

208.
7

544.
7

5.1

92.9

Net Cash
on Dec13
1

122.4

Cash
generated
from
operations

Taxes

1

Other expenses vestment
In
from
operations ctivities
a

Debt

Dividend
payment

Interest
payment

Other
financial
activities

Net
Cash
on
Dec14

Includes PP&E, acquisitions , software and other investment activities

16

[CLIENT NAME]

Presentation3

4

EBITDA Main Drivers
Main drivers of EBITDA (YoY)

Main drivers
to
EBITDA
Margin

0.8%
0.2%

0.7%

1.0%
0.8%

S/. 752.6MM
S/. 692.2MM
12.9%
11.0%
EBITDA
2013

[CLIENT NAME]

Gross
Proft

SG&A
Operating

Other Net
Expenses

REF
IS

Extraordin
ary
Expens
es

EBITDA 2014

17

Presentation3

4

Net Income Main Drivers

Main drivers (YoY)

0.5%
1.8%

0.6%

0.2%

2.8%

1.1%

1.5
%

0.7%

S/. 330.6MM
S/. 18.9MM
5.7%
0.3%
Net
Income
201
3

Operati
ng
Prof
it

[CLIENT NAME]

Net
Financial
Expens
es

Exchan
ge
Rate
Losses

Results
for
Hedging
Operati
ons

Incom
e
Ta
x

Income
from
Discontin
ued
Operation
s1

REF
IS

Extraordin
ary
Expens
es

Net
Income
201
4

1

Includes Share in Profits from associates

18

Presentation3

5

Guidance

Guidance 2014

Revenues
growth PEN
CAPEX

EBITDA Margin

7.0% 8.0%
S/. 300 - 330
MM
12.5% 13.0%

Net Margin
Net Debt /
EBITDA

[CLIENT NAME]

1

2.00x –
3.00x

201
4

Guidance 2015

8.0
%

8.0% - 10.0%

S/. 323
MM
1

S/. 300 - 330 MM

11.0
%

11.% - 12.0%

0.3
%

4.0% - 6.0%

3.70
x2

2.80x -3.20x

EBITDA margin without considering operations in Argentina for 2014 would have been 12.8%
Net Debt/EBITDA resulted in 3.05x assuming:

2

- Exclusion of Global Alimentos

19

- 2013 EBITDA of Conosur business

Q&
A

20

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