Alicorp Saa · BVL:ALICORC1
Alicorp Saa — Alicorp — Q3 2020 Earnings Presentation
45 slides from Alicorp Saa's earnings presentation, Nov 3, 2020
Slide 1: Earnings Call Third Quarter 2020
EARNINGS CALL THIRD QUARTER 2020 November 3rd, 2020
Slide 2: Disclaimer
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 Compa
Slide 3: Topics
TOPICS Q3 ’20 HIGHLIGHTS 1 Q3 ‘20 CONSOLIDATED OPERATING RESULTS 2 Q3 ‘20 OPERATING RESULTS BY BUSINESS 3 LIQUIDITY AND STRONG BALANCE SHEET 4 OUR VIEW FOR THE REST OF 2020 5 Q&A 6 APPENDIX 7
Slide 4: Q3 '20 Highlights
Q3 ’20 HIGHLIGHTS
Slide 5: Relevant Events
Q3 ’20 HIGHLIGHTS Relevant Events Production in Peru restored to full capacity and recovered market shares in most categories 2nd Innovation and Digital Forum (FID) Foto Successful migration to SAP S4/Hana in two Peruvian subsidiaries impacting approx. 600 employees Member of Good Corporate Governan
Slide 6: Strategic Highlights: Support for Clients
Q3 ’20 HIGHLIGHTS Strategic Highlights 12,000 restaurants and bakeries • Access to credit and partnership with MiBanco • Discounts • Webinars on safety protocols, Íconos + texto destacado (arial 15pt) delivery implementation, digital marketing, etc. 13,000 mom and pop’s and market stands • Preventio
Slide 7: Strategic Pillars
Q3 ’20 HIGHLIGHTS Strategic Highlights ALICORP’S CORPORATE STRATEGY ENABLERS Create and strengthen new businesses and platforms through innovation as well as continuous exploration of inorganic opportunities GROWTH STRATEGIC PILLARS Instill a culture of Efficiency allowing us to continuously improve
Slide 8: Our Digital Transformation Journey
Q3 ’20 HIGHLIGHTS Strategic Highlights OUR DIGITAL TRANSFORMATION JOURNEY OUR DIGITAL Accelerate the efficiency of our TRANSFORMATION business AGENDA SEEKS TO • Migration to SAP S4HANA CREATE VALUE to improve processes and functionalities THROUGH THE USE OF • Upgrade IT infrastructure to improve per
Slide 9: The Purpose of Our Digital Transformation
Q3 ’20 HIGHLIGHTS Strategic Highlights THE PURPOSE OF OUR DIGITAL TRANSFORMATION We ask ourselves three questions about We are developing capabilities in order to Alicorp’s core answer these questions DIGITAL TRANSFORMATION IS AN ENABLER THAT How do we increase Alicorp’s sales today? SEEKS TO ANSWER
Slide 10: Initiatives to Transform Our Business
Q3 ’20 HIGHLIGHTS Strategic Highlights INITIATIVES TO TRANSFORM OUR BUSINESS Some of our most emblematic digital initiatives include… SO FAR, WE HAVE ACCOMPLISHED GREAT ~50 initiatives PROGRESS AND launched MICROSEGMENTATION DIGITAL TOOLS FOR B2B MARKETPLACE GENERATED OF OUR CLIENTS AND SALESPEOPLE
Slide 11: Consolidated Operating Results
Q3 ‘20 CONSOLIDATED OPERATING RESULTS
Slide 12: Consolidated Revenue – Q3 '20 vs. Q3 '19
Q3 ‘20 CONSOLIDATED OPERATING RESULTS Consolidated Revenue – Q3 ’20 vs. Q3 ‘19 +0.9% Q3 PERFORMANCE SUMMARY – REVENUE GROWTH (YoY %) AND GROSS MARGIN 7,500 7,344 800 7,280 700 DEVELOPMENT OF THE COVID-19 7,000 600 CRISIS +1.1% 500 3,000 ✓ COVID-19 cases in Peru 323 +1.7% 313 400 2,593 2,622 falling
Slide 13: Consolidated EBITDA – Q3 '20 vs. Q3 '19
Q3 ‘20 CONSOLIDATED OPERATING RESULTS Consolidated EBITDA – Q3 ’20 vs. Q3 ‘19 Q3 PERFORMANCE SUMMARY – EBITDA GROWTH (YoY %) AND EBITDA MARGIN -2.1% ADVERSE INDUSTRY 950 2,000 COVID-RELATED COGS AND 920 CONDITIONS IN THE 900 EXPENSES Brazil 900 impairment for S/ 48 mm MOST PROFITABLE 850 (PEN millio
Slide 14: Consolidated Net Income – Q3 '20 vs. Q3 '19
Q3 ‘20 CONSOLIDATED OPERATING RESULTS Consolidated Net Income – Q3 ‘20 vs. Q3 ‘19 Q3 PERFORMANCE SUMMARY – NET INCOME GROWTH (YoY %) AND NET MARGIN -16.3% 359 360 20 340 320 THE DECLINE IN 300 300 Brazil 15 impairment OPERATING PROFIT 280 for S/ 48 mm 260 -0.5% WAS OFFSET BY A 159 20 11 158 LOWER FX
Slide 15: Operating Results by Business
Q3 ‘20 OPERATING RESULTS BY BUSINESS
Slide 16: Consumer Goods Peru: Update on Market Dynamic
Q3 ‘20 OPERATING RESULTS BY BUSINESS Consumer Goods Peru: Update on Market Dynamic ALICORP OUTPERFORMED PRIVATE CONSUMPTION ACCELERATED GROWTH IN ALICORP’S BASKET WE CONTINUE OUR PATH TO RECOVERING MARKET SHARE IN MOST CATEGORIES KWP basket volume growth 12.5 12.0 Shares Of Market - Volume (% change
Slide 17: Consumer Goods Peru: Q3 Performance
Q3 ‘20 OPERATING RESULTS BY BUSINESS Consumer Goods Peru: Q3 Performance REVENUE & GROSS MARGIN (PEN Million) 3,000 +5.2% 55 2,594 2,466 50 2,500 +12.0% 991 45 THE STABILIZATION 1,000 885 40 OF PRODUCTION 500 35.9% 32.8% 34.9% 33.3% CAPACITY RESULTED 35 IN A RECOVERY OF 0 Q3 ’19 Q3 ’20 YTD ’19 YTD ’
Slide 18: B2B: Update on Market Dynamics
Q3 ‘20 OPERATING RESULTS BY BUSINESS B2B: Update on Market Dynamics THE B2B INDUSTRY ALICORP OUTPERFORMED MARKET GROWTH Restaurant GDP and Food Service Revenue B2B CUSTOMERS RECOVERING Number of active clients (thousands) IS SLOWLY growth (%) RECOVERING FROM 11.0 7.1 -8.3 THE IMPACTS OF THE -16.8 -1
Slide 19: B2B: Q3 Performance
Q3 ‘20 OPERATING RESULTS BY BUSINESS B2B: Q3 Performance REVENUE GROWTH BY REVENUE & GROSS MARGIN COMMODITY PRICES PLATFORM AND CATEGORIES (PEN Million) (USD x TM) 1,400 80 -8.1% 1,212 1,200 1,113 60 Edible Oils -12% Soybean Industrial clients -5.1% +12% Lard +14% 438 416 40 797 Flour 0% 400 742 21.
Slide 20: Consumer Goods International: Q3 Performance
Q3 ‘20 OPERATING RESULTS BY BUSINESS Consumer Goods International: Q3 Performance REVENUE & GROSS MARGIN (PEN Million) 1,600 +10.8% 140 1,373 120 1,400 1,200 +16.2% 1,240 100 REMARKABLE 80 406 472 60 RESULTS IN OUR CGI 400 27.8% 26.5% 27.5% 28.1% 40 UNIT DRIVEN BY TOP- 200 20 LINE GROWTH 0 Q3 ’19 Q3
Slide 21: Our Growth-Focused Andean Operations
Q3 ‘20 OPERATING RESULTS BY BUSINESS Consumer Goods International: Q3 Performance OUR GROWTH- GROWTH-FOCUSED ANDEAN OPERATIONS Revenue & Gross Margin (PEN Million) FOCUSED ANDEAN BOLIVIA ECUADOR +16.8% OPERATIONS 600 +16.9% 200 150 300 120 250 CONTINUE TO DELIVER 501 500 150 103 +14.8% 428 100 200 S
Slide 22: Aquafeed: Update on Market Dynamics
Q3 ‘20 OPERATING RESULTS BY BUSINESS Aquafeed: Update on Market Dynamics SHRIMP SALMON Shrimp Exports in Ecuador (MT K and US$ MM) Salmon Exports in Chile (MT K and US$ MM) +5% 1,586 -15% +12% 957 1,001 -17% 1,351 935 944 908 1,316 -8% 813 778 1,125 1,128 1,036 THE AQUAFEED +10% -4% +17% -8% +22% 18
Slide 23: Aquafeed: Q3 Performance
Q3 ‘20 OPERATING RESULTS BY BUSINESS Aquafeed: Q3 Performance REVENUE & GROSS MARGIN WE MAINTAIN OUR (USD Million) RECOVERY PLAN 550 100 FOCUS ON A HEALTHY 500 -12.3% CLIENT PORTFOLIO IN 474 80 450 -25.1% 416 THIS CHALLENGING 162 60 New shrimp feed 150 product launches COMPETITIVE 121 40 100 20.5% 1
Slide 24: Crushing: Q3 Performance
Q3 ‘20 OPERATING RESULTS BY BUSINESS Crushing: Q3 Performance VOLUME SOLD REVENUE (Thousands of MT) (USD million) +1.1% +1.8% 463 468 185 VOLUME AND REVENUE GROWING 181 ON THE BACK OF 225 241 +7% 85 96 +14% 238 227 -4% 96 88 -8% INCREASING SALES Q3 ’19 Q3 ’20 Q3 ’19 Q3 ’20 TO RELATED PARTIES, Intern
Slide 25: Liquidity and Strong Balance Sheet
LIQUIDITY AND STRONG BALANCE SHEET
Slide 26: Leverage and Credit Rating
LIQUIDITY AND STRONG BALANCE SHEET Leverage and credit rating INDEBTEDNESS EVOLUTION CREDIT RATING AS OF Q3 ‘20 Net Debt / EBITDA1,2 Global AMIDST (Excluding Crushing Business Raw Material Inventory) CHALLENGING CONDITIONS IN THE CONTEXT OF THE BBB- / Stable = BBB / Stable = Baa3 / Stable = COVID-19
Slide 27: Liquidity and Working Capital Evolution
LIQUIDITY AND STRONG BALANCE SHEET Liquidity and working capital evolution LIQUIDITY WORKING CAPITAL2 (Days) TOTAL CASH 3 Accounts Receivable Inventories Accounts Payable S/ 953 million 112.0 107.0 DEBT COVERAGE1 95.7 96.3 101.0 1.36x over next 12 months 1.07x over next 24 months Access to funding 8
Slide 28: Our View for the Rest of 2020
OUR VIEW FOR THE REST OF 2020
Slide 29: 2020 Guidance
OUR VIEW FOR THE REST OF 2020 2020 Guidance FLAT TO LOW SINGLE DIGIT CONSOLIDATED REVENUE GROWTH CONSOLIDATED EBITDA MARGIN BETWEEN 10% AND 11% CAPEX AROUND S/ 375 MILLION 29
Slide 30: Q&A
Q&A
Slide 31: Appendix
APPENDIX
Slide 32: CGI: Q3 2020 Performance by Geography
APPENDIX CGI: Q3 2020 PERFORMANCE BY GEOGRAPHY
Slide 33: Consumer Goods Bolivia: Q3 Performance
Q3 ‘20 OPERATING RESULTS BY BUSINESS Consumer Goods Bolivia: Q3 Performance REVENUE & GROSS MARGIN (PEN Million) +16.9% 550 225 501 200 500 175 450 +14.8% 428 150 TOP LINE BOOSTED 150 153 176 125 100 BY THE 100 75 INCORPORATION OF 27.4% 27.8% 28.7% 27.8% 50 50 25 INTRADEVCO’S 0 Q3 ’19 Q3 ’20 YTD ’19
Slide 34: Consumer Goods Ecuador: Q3 Performance
Q3 ‘20 OPERATING RESULTS BY BUSINESS Consumer Goods Ecuador: Q3 Performance REVENUE & GROSS MARGIN (PEN Million) 140 +16.8% 160 120 140 120 120 100 +6.0% 103 100 SOLID 44 46 80 PERFORMANCE 40 33.4% 36.5% 35.0% 36.0% 60 40 SUPPORTED BY 20 20 INTRODUCTION OF 0 Q3 ’19 Q3 ’20 YTD ’19 YTD ’20 0 OUR PASTA
Slide 35: Consumer Goods Argentina: Q3 Performance
Q3 ‘20 OPERATING RESULTS BY BUSINESS Consumer Goods Argentina: Q3 Performance REVENUE & GROSS MARGIN +29.4% (PEN Million) 350 340 160 140 300 120 +94.4% 263 100 THE SUCCESSFUL 100 106 80 IMPLEMENTATION OF 54 22.8% 22.6% 27.1% 60 40 OUR 50 28.1% 20 TRANSFORMATION 0 Q3 ’19 Q3 ’20 YTD ’19 YTD ’20 0 PRO
Slide 36: Consumer Goods Brazil: Q3 Performance
Q3 ‘20 OPERATING RESULTS BY BUSINESS Consumer Goods Brazil: Q3 Performance REVENUE & GROSS MARGIN (PEN Million) -12.1% 300 282 160 140 248 120 250 95 -12.3% 100 VOLUME GROWTH OF 100 83 80 9.8% YOY FOR THE 50 24.6% 29.5% 28.5% 60 40 QUARTER WAS 28.3% 20 OFFSET BY FX 0 Q3 ’19 Q3 ’20 YTD ’19 YTD ’20 0
Slide 37: Debt & Cash Management
APPENDIX DEBT & CASH MANAGEMENT
Slide 38: Debt Breakdown
APPENDIX Debt Breakdown TOTAL Dec 19 Jun 20 Sep 20 DEBT1 S/ 4,191mm S/ 4,852mm S/ 4,255mm 8.5% 5.0% 7.7% 9.7% 11.7% 6.5% International Bonds By Source1 Local Bonds 12.4% 24.5% 12.3% Working Capital Debt LT Bank Debt Leases (IFRS 16) 38.0% 43.6% 28.1% 23.8% 24.8% 43.4% 16.1% 12.8% 13.6% 0.7% 0.7% 1.0
Slide 39: Debt Management
APPENDIX Debt Management FINANCIAL GUIDELINES FINANCIAL EXPENSES RATIO (PEN Million) 1,130 1,113 1,180 1,329 1,329 1,314 1,295 Alicorp’s financial guidelines aim to: 159 178 196 249 278 286 279 7.09x 1. Maintain investment grade rating 6.24x 6.03x 2. Reduce financial expenses 5.34x 4.78x 4.60x 4.65x
Slide 40: Working Capital and CAPEX Management
APPENDIX Working Capital and CAPEX Management WORKING CAPITAL1 CAPEX (PEN Million) (PEN Million) PP&E Intangibles PP&E+Intagibles/Sales • The increase in payables for S/ 390 million is mainly explained by pre- 170 6.0 % export contracts in our crushing business. 150 5.0 % 102 130 3.9% 63 390 3.5% 4.
Slide 41: Cash Flow Build Up
APPENDIX Cash Flow Build Up MAIN DRIVERS FOR CASH FLOW EVOLUTION (PEN Million) Cash Flow from Operations Cash Flow used in Investing Cash Flow used in Financing S/ 872 S/ -2162 S/ -543 2,400 1,196 1,900 217 107 1,400 216 172 3 30(1) 9(1) 900 1,819 1,712 197 4 1,496 174 1,324 1,126 400 840 840 953 95
Slide 42: OCF & FCF Evolution
APPENDIX OCF & FCF Evolution OPERATING & FREE CASH FLOW1 OPERATING & FREE CASH FLOW CONVERSION1 (PEN Million) 140% 90% 120% 100% 92% 89% 80% 60% 86% 83% 3 66% Q3 20' 40% FY 2018 FY 2019 20% 0% 4 2018 2019 Q3 20' 3/4 6 6 1,212 2 1,157 Operating Cash Flow / EBITDA Free Cash Flow / EBITDA 1,087 2 921 8
Slide 43: Q3 2020 Milestones
APPENDIX Q3 2020 MILESTONES
Slide 44: Q3 2020 Milestones
APPENDIX Q3 2020 Milestones RESEARCH & DEVELOPMENT AWARDS & RECOGNITION 42 products were launched as part of our innovation strategy, being the most remarkable: ALICORP’S STOCK INTEGRATES THE GOOD CORPORATE GOVERNANCE INDEX OF THE LIMA STOCK EXCHANGE FOR 13TH CONSECUTIVE YEAR OPAL ANTIBACTERIAL CASI
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