Alicorp Saa · BVL:ALICORC1
Alicorp Saa — Q1 2020 Earnings Presentation
50 slides from Alicorp Saa's earnings presentation, May 14, 2020
Slide 1: Earnings Call First Quarter 2020
Earnings Call First Quarter 2020 M a y 1 4 th, 2 0 2 0 1
Slide 2: Forward-looking statements disclaimer
This presentation may contain financial or business projections regarding recent acquisitions, their financial or business impact, management expectations and objectives regarding such acquisitions and current management expectations on the operating and financial performance of The Company, based o
Slide 3: Topics
Topics Our response to the COVID-19 crisis [4] Q1 ‘20 Consolidated Operating Results [ 15 ] Q1 ‘20 Operating Results by business [ 20 ] Alicorp’s view going forward [ 26 ] Q&A [ 28 ] Appendix [ 30 ] 3
Slide 4: COVID-19: Alicorp remains confident and resilient in these uncertain times
COVID-19: Alicorp remains confident and resilient in 1 these uncertain times 4
Slide 5: Economic outlook and Government measures due to COVID-19
Economic outlook and Government measures 1 due to COVID-19 The negative impact of COVID-19 in Latin American countries will be material, causing a severe recession in 2020. For 2021 GDP growth forecasts are positive and show recovery. Governments have taken different measures to contain the spread o
Slide 6: Alicorp's agile response to the COVID-19 crisis
1 Alicorp’s agile response to the COVID-19 crisis Our People & Community Liquidity • Our first priority: the well-being of our people • Guaranteeing ample levels of liquidity • Strict safety protocols for our plant workers and sales • Prioritizing cash-on-hand, by withdrawing additional short- force
Slide 7: Our People & Community: Our People
Alicorp’s agile response to the COVID-19 crisis: 1 Our People & Community Our People • Strict daily cleaning and disinfection protocols in all our spaces • Temperature measuring before entrance to production facilities • Obligatory social distancing in production facilities, dining rooms and changin
Slide 8: Our People & Community: Our Community
Alicorp’s agile response to the COVID-19 crisis: 1 Our People & Community Our Community S/ 15 million in donations • “Ayuda al que Ayuda” program, aimed to help the most vulnerable and support people in the front line in Peru and the countries where we operate o Distribution of food and cleaning pro
Slide 9: Supply & Logistics
Alicorp’s agile response to the COVID-19 crisis: 1 Supply & Logistics One of our main priorities, in hand with the safety of our people, is to ensure the supply of Food, Home and Personal Care products for our communities, responding with agility to new and changing demand Implementation of safety a
Slide 10: Clients & Consumers: Consumer Goods
Alicorp’s agile response to the COVID-19 crisis: 1 Clients & Consumers Consumer Goods • Stocking-up by households once the lockdown started • Increase in at-home consumption • Higher demand for food staples (edible oils, pasta, canned tuna, flour, sauces) in the modern and traditional channels • Pri
Slide 11: Clients & Consumers: B2B
Alicorp’s agile response to the COVID-19 crisis: 1 Clients & Consumers B2B • Shift from out-of-home consumption to at-home consumption, partially mitigated by our CGP Business • Most bakeries and industrial clients continue operating, with increasing demand in certain categories, such as industrial
Slide 12: Clients & Consumers: Aquafeed
Alicorp’s agile response to the COVID-19 crisis: 1 Clients & Consumers Aquafeed • Our clients mainly export their products and are subject to global consumption of shrimp and salmon, more than to the economic environment where they operate. • Shrimp: global industry affected by the deceleration of i
Slide 13: Clients & Consumers: Crushing
Alicorp’s agile response to the COVID-19 crisis: 1 Clients & Consumers Crushing • The global crisis has created an environment of strong volatility compared to 2008/2009, while global demand for agricultural commodities for food has not been materially altered. Demand for biofuels, which impacts soy
Slide 14: Topics
Topics Our response to the COVID-19 crisis [4] Q1 ‘20 Consolidated Operating Results [ 15 ] Q1 ‘20 Operating Results by business [ 20 ] Alicorp’s view going forward [ 26 ] Q&A [ 28 ] Appendix [ 30 ] 14
Slide 15: Solid top-line results; consolidated revenue up 10.0% YoY
Solid top-line results across our businesses on the back of strong growth in 2 the first two months of the year and mixed impacts of COVID-19 in the second half of March. Consolidated Revenue increased 10.0% YoY Q1 PERFORMANCE SUMMARY – REVENUE GROWTH (YoY %) • Consolidated Revenue increased 10.0% Y
Slide 16: Strong profitability; gross profit up 15.0% YoY
Strong profitability in all our businesses, with Gross Profit increasing 2 15.0% YoY. EBITDA impacted by one-timers Q1 PERFORMANCE SUMMARY – EBITDA GROWTH (YoY %) GROSS PROFIT AND MARGIN • Solid operating performance throughout all our businesses in Q1 2020. Consolidated (PEN million) Gross profit i
Slide 17: Net income and normalized net income
While Net Income was impacted by COVID-19-related expenses, 2 Normalized Net Income increased 12.2% YoY Q1 PERFORMANCE SUMMARY – NET INCOME GROWTH (YoY %) FINANCIAL EXPENSES EVOLUTION1 • Net income reached S/ 10 million impacted by i) lower Consolidated (As % of Total Revenue) 5.0% EBITDA, ii) highe
Slide 18: Liquidity
Alicorp’s agile response to COVID-19 crisis: 2 Liquidity Indebtedness Evolution1,2 Liquidity Leverage reduction has been consistent and continued in 1Q 2020 • As of March 2020 we drew US$ 200 million of short-term debt in order to secure liquidity for our operations Net Debt / EBITDA • Revision of o
Slide 19: Topics
Topics Our response to the COVID-19 crisis [4] Q1 ‘20 Consolidated Operating Results [ 15 ] Q1 ‘20 Operating Results by business [ 20 ] Alicorp’s view going forward [ 26 ] Q&A [ 28 ] Appendix [ 30 ] 19
Slide 20: Consumer Goods Peru: Q1 Performance
3 Consumer Goods Peru: Q1 Performance HIGHLIGHTS Q1 2020 INSIGHTS • Revenue increased 12.5% YoY mainly explained by a 17.6% increase in volume, due to i) inclusion of Intradevco’s results in January 2020 when compared to 2019 (including Intradevco’s January 2019 proforma results, revenue increased 5
Slide 21: B2B: Q1 Performance
3 B2B: Q1 Performance HIGHLIGHTS Q1 2020 INSIGHTS • Q1 results were highly supported by an excellent performance during the first two months in which we achieved a revenue growth of 9.3% while EBITDA increased 73.4% YoY, primarily supported by Industrial Flour’s pricing and quality strategy lifting
Slide 22: Consumer Goods International: Q1 Performance
3 Consumer Goods International: Q1 Performance HIGHLIGHTS Q1 2020 INSIGHTS • Revenue increased 7.7% YoY mainly explained by i) higher prices implemented in Argentina, in addition to an increase in volume sold of soaps, detergents and softeners, ii) higher revenues in Bolivia due to growth in volume
Slide 23: Aquafeed: Q1 Performance
3 Aquafeed: Q1 Performance HIGHLIGHTS Q1 2020 INSIGHTS • Revenue increased 5.3% YoY mainly due to a 29.5% growth in our Salmon feed business in Chile, explained by the effect of strikes which affected production in Q1 2019, in addition to a higher volume share. Our Shrimp feed business was impacted
Slide 24: Crushing: Q1 Performance
3 Crushing: Q1 Performance HIGHLIGHTS Q1 2020 INSIGHTS OUR AGRO SOLUTIONS INITIATIVE • Volume increased 14.0% YoY mainly due to the delay in October and November’s production from our soybean winter campaign, related to social unrest in Bolivia. • Reported EBITDA increased USD 7 million YoY mainly e
Slide 25: Topics
Topics Our response to the COVID-19 crisis [4] Q1 ‘20 Consolidated Operating Results [ 15 ] Q1 ‘20 Operating Results by business [ 20 ] Alicorp’s view going forward [ 26 ] Q&A [ 28 ] Appendix [ 30 ] 25
Slide 26: Preparing and planning on three horizons
Alicorp’s view going forward: Preparing and planning 4 on three horizons Now Next Beyond (March - April 2020) (May - December 2020) (2021) Customer care Marketing and Sales Our People & Community • Digital platforms for order taking • Actions to protect against migration to • Launching of digital ch
Slide 27: Why we are confident about the future
Alicorp’s view going forward: Why we are confident 4 about the future We are prepared to overcome what comes ahead and quickly adapt to a new reality • Unique business model • Leading brand portfolio in the region, with strong product diversification • Extensive multi-channel distribution network an
Slide 28: Topics
Topics Our response to the COVID-19 crisis [4] Q1 ‘20 Consolidated Operating Results [ 15 ] Q1 ‘20 Operating Results by business [ 20 ] Alicorp’s view going forward [ 26 ] Q&A [ 28 ] Appendix [ 30 ] 28
Slide 29: Topics
Topics Our response to the COVID-19 crisis [4] Q1 ‘20 Consolidated Operating Results [ 15 ] Q1 ‘20 Operating Results by business [ 20 ] Alicorp’s view going forward [ 26 ] Q&A [ 28 ] Appendix [ 30 ] 29
Slide 30: Consumer Goods International: Q1 Performance by Geography
Consumer Goods International: Q1 Performance by Geography
Slide 31: Consumer Goods International - Bolivia: Q1 Performance
5 Consumer Goods International - Bolivia: Q1 Performance HIGHLIGHTS Q1 2020 INSIGHTS • Revenue increased 10.3% YoY, while Volume grew 18.0% YoY, mainly due to market share increases in our Food and Home Care platforms, achieving record market shares in edible oils and detergents during the first two
Slide 32: Consumer Goods International - Ecuador: Q1 Performance
5 Consumer Goods International - Ecuador: Q1 Performance HIGHLIGHTS Q1 2020 INSIGHTS • Revenue increased 36.2% YoY, mainly explained by volume growth in our pasta category and in our Home Care platform. • Gross Margin decreased to 35.6%, mainly due to product mix with a higher proportion of our grow
Slide 33: Consumer Goods International - Argentina: Q1 Performance
5 Consumer Goods International - Argentina: Q1 Performance HIGHLIGHTS Q1 2020 INSIGHTS • Revenue increased 22.3% YoY, as a result of price increases, in addition to a 6.9% growth in Volume, especially in our Home and Personal Care platforms where we continue to gain market share. • Gross Margin incr
Slide 34: Consumer Goods International - Brazil: Q1 Performance
5 Consumer Goods International - Brazil: Q1 Performance HIGHLIGHTS Q1 2020 INSIGHTS EBITDA MARGIN EVOLUTION • Revenue decreased 8.9% YoY in PEN, despite a 4.8% increase in Volume, explained EBITDA Margin excl. by FX headwinds, with the BRL to PEN rate depreciating around 20% in the last 12 non-recur
Slide 35: Debt & Cash Management
Debt & Cash Management alicorp
Slide 36: Q1 2020 Financial Highlights
5 Q1 2020 Financial Highlights I • As of March 2020, Net Debt-to-EBITDA ratio (Excluding Crushing Business Raw Material Inventory)1,2 decreased to 2.15x3, from 2.41x4 as of December 2019. • In the same period, Net Debt5 decreased to S/ 3,017 million, from S/ 3,351 million (a S/ 334 million FINANCIAL
Slide 37: Q1 2020 Debt Management
5 Q1 2020 Debt Management • Net Debt-to-EBITDA ratio decreased to 2.15x as of Q1 ‘20 from 2.41x as of Q4 ‘19, mainly due to higher Cash and Cash Equivalents as a result of greater collections from sales and working capital efficiencies. • As of March 2020, 6.6% of our total financial debt had FX exp
Slide 38: Q1 2020 Debt maturity profile
5 Q1 2020 Debt maturity profile A As of December 2019, our total debt was PEN 4,191MM while our cash and cash equivalents cover our current financial liabilities at 1.09x. B As of March 2020, we drew USD 200 MM of current debt in order to secure liquidity for our operations. Our cash and cash equiva
Slide 39: Working Capital and CAPEX Management for Q1 2020
5 Working Capital and CAPEX Management for Q1 2020 KEY MILESTONES •A Alicorp, decreased its Cash Conversion Cycle (CCC) from 37.4 days as of Q1 19’ to 28.1 days as of Q1 20’ mainly explained by higher days of payables as a result of pre-export finance effect. Ex acquisitions, the CCC would have been
Slide 40: Cash Flow Build Up as of Q1 2020
5 Cash Flow Build Up as of Q1 2020 HIGHLIGHTS ▪ Cash Flow from Operations was S/ 513 million, S/460 million higher than Q1 19’ mainly explained by higher collections from sales for S/ 660 million. This effect was partially offset by higher payments to suppliers, taxes and employees. ▪ Cash Flow used
Slide 41: OCF & FCF Evolution
5 OCF & FCF Evolution OPERATING & FREE CASH FLOW1 (PEN Million) 3 FY 2018 FY 2019 Q1 20' ▪ LTM Free Cash Flow 1,716 2 as of Q1 20’ was 1,548 2 higher than FY 2019 1,087 1,212 921 mainly due to: 701 -177 2 i) higher collections 2 from sales and ii) the -460 -369 absence of - 1772 acquisitions 4 Opera
Slide 42: Q1 2020 Milestones
Q1 2020 Milestones
Slide 43: Q1 2020 Milestones
5 Q1 2020 Milestones RESEARCH & DEVELOPMENT 21 products were launched as part of our innovation strategy, being the most remarkable: A new bar and liquid Tuna in pouches under the A frozen stuffed pasta under Dry beans for restaurants “Primor” brand the “Nicolini” brand beauty soaps under the under
Slide 44: Performance by Business Unit & Regions
Performance by Business Unit & Regions
Slide 45: Consolidated and Consumer Goods Peru performance tables
5 Performance by Business Unit & Regions (1) Under IFRS 16 Under IFRS 16 Under IFRS 16 Variation Consolidated CONSOLIDATED 2018 2019 2020 Q1 20 PEN MM Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 YoY Volume (MT thousands) 462 631 668 707 2,468 685 781 860 803 3,129 765 11.5% Revenues 1,711 2,123 2,208 2,247 8,2
Slide 46: Performance by Business Unit & Regions (2)
5 Performance by Business Unit & Regions (2) Under IFRS 16 Under IFRS 16 Under IFRS 16 Variation Food Service 2018 2019 2020 Q1 20 PEN MM Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 YoY Volume (MT thousands) 30 31 34 35 130 32 33 35 37 138 33 3.1% Revenues 136 138 148 153 574 141 142 151 156 589 141 0.0% Gross
Slide 47: Performance by Business Unit & Regions (3)
5 Performance by Business Unit & Regions (3) Under IFRS 16 Under IFRS 16 Under IFRS 16 Variation CGI 2018 2019 2020 Q1 20 PEN MM Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 YoY Volume (MT thousands) 61 78 86 91 316 90 99 103 105 396 97 8.7% Revenues 250 313 366 360 1,289 394 439 406 467 1,706 424 7.7% Gross Pr
Slide 48: Performance by Business Unit & Regions (4)
5 Performance by Business Unit & Regions (4) Under IFRS 16 Under IFRS 16 Under IFRS 16 Variation CGI Brazil 2018 2019 2020 Q1 20 PEN MM Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 YoY Volume (MT thousands) 25 28 27 26 106 23 26 25 27 100 24 4.8% Revenues 103 100 99 103 405 90 98 95 97 379 82 -8.9% Gross Profit
Slide 49: Performance by Business Unit & Regions (5)
5 Performance by Business Unit & Regions (5) Under IFRS 16 Under IFRS 16 Under IFRS 16 Variation Aquafeed 2018 2019 2020 Q1 20 PEN MM Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 YoY AQUAFEED Volume (MT thousands) 137 159 144 141 581 138 156 152 169 615 152 9.7% Revenues 485 576 516 510 2,088 490 548 541 590 2,
Slide 50: Performance by Business Unit & Regions (6): FX rates
5 Performance by Business Unit & Regions (6) FX RATES1 Year 2018 2019 2020 Quarter Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 USD/PEN 3.24 3.26 3.29 3.36 3.29 3.32 3.32 3.34 3.36 3.34 3.41 USD/ARS 19.7 23.53 32.09 37.11 28.11 39.1 43.96 50.54 59.38 48.25 61.48 USD/BRL 3.24 3.61 3.96 3.81 3.65 3.77 3.92 3.98 4