LIMA, PERU / ACCESSWIRE / February 17, 2019 / Alicorp S.A.A. (''the Company'' or ''Alicorp'') (BVL: ALICORC1 and ALICORI1) announced today its unaudited financial results corresponding to the Fourth Quarter 2018 (Q4 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). Consolidated statements include i) the financial results of the Bolivian acquired companies during 2018 (''Industrias de Aceite S.A.'' or ''Fino'' and ''Sociedad Aceitera del Oriente S.R.L'' or ''SAO'') and the accounting adjustment that arose from both acquisitions' goodwill recording, and ii) the effect of the application of the International Accounting Standard 29 (or IAS 29, Financial Reporting in Hyperinflationary Economies) in Argentina.
FINANCIAL HIGHLIGHTS
1. This quarter's results were strongly affected by 2 accounting non-cash adjustments: i) the effect of recording the acquisition of Fino and SAO using the acquisition method, as established in IFRS 3 ''Business combinations'', and ii) the application of International Accounting Standard 29 in Argentina as it was categorized as a hyperinflationary economy. The first adjustment related to the acquisition of Fino and SAO affected various Income Statement lines such as Cost of Goods Sold (COGS), Depreciation, Financial expenses and Taxes. Moreover, it reduced Gross Profit in S/ 35 million, Operative Income in S/ 46 million, EBITDA in S/ 24 million, and Net Profit in S/ 32 million. The second adjustment restated financial statements to address the changes in the general purchasing power of the Argentinean peso, affecting all lines of the Income Statement from Revenue to Net Profit. It reduced Gross Profit in S/ 31 million, Operative Income in S/ 23 million, and EBITDA in S/ 16 million while it increased Net Profit in S/ 12 million. Onwards, when referring to the exclusion of Fino, SAO and the IAS 29 application these adjustments should not be consider.
2. Consolidated Revenue amounted to S/ 2,247 million (+23.2% YoY), while Volume reached 707 thousand tons (+44.0% YoY). Excluding Fino, SAO and the IAS 29 application, Revenue amounted to S/ 1,898 million (+4.0% YoY), while Volume reached 517 thousand tons (+5.2% YoY). The leading contributors to the increase in Revenue and Volume, besides Fino and SAO, were the following businesses: i) Consumer Goods Peru, growing 9.7% YoY in Revenue and 7.2% YoY in Volume, ii) B2B, rising 8.8% YoY and 10.5% YoY in Revenue and Volume, respectively, and iii) Aquaculture, which increased 3.2% YoY increase in Revenue and 1.1% YoY in Volume.
3. During Q4 18', Revenue from the Consumer Goods Peru business reached S/733 million (+9.7% YoY) while Volume reached 147 thousand tons (+7.2% YoY). Growth is underpinned by strategy for each portfolio segment, constant product and brand innovation, and the value go-to-market channel. Furthermore, this business continues growing through our core categories such as Laundry Detergents (+13.5% YoY), Canned tuna (+115.2% YoY), Cookies & crackers (+10.8% YoY), Sauces (+11.2% YoY), and Edible Oils (+3.6% YoY). Additionally, it is relevant to remark that our commercial strategy resulted in an equal or a higher volume share in 15 out of our 19 categories (including subcategories).
4. Regarding product innovation, during Q4 18' the Company launched/revamped 20 products (8 in Consumer Goods Peru, 5 in Consumer Goods International, 4 in B2B and 3 in Aquaculture). The most relevant in the Consumer Goods Peru business were the following: i) a new Dishwashing liquid soap under the ''Marsella'' brand, entering into a new category, ii) in the Pasta category, the new ''Maestra'' line, under the "Don Vittorio" brand, and iii) in the Premix category, a new cookie premix under the ''Blanca Flor'' brand. In the Consumer Goods International division, we launched 5 products: i) In Brazil, we launched two new formats of the ''Plusbelle'' hair cream, ii) in Ecuador, a new tomato sauce under the ''Don Vittorio'' brand, and a new ''Detox'' shampoo variety under the ''Plusbelle'' brand, and iii) in Bolivia, a new 520 gr format of the ''Bolivar'' detergent. In B2B, the most important launches were the following: i) in the Food Service platform, the new ''Alpesa'' table salt and ii) in the Bakery platform, the new ''Regia'' sugar. Finally, in the Aquaculture business, we launched a new shrimp feed diet called ''Nicovita Origin'' aiming to strengthen the firsts stages of shrimp farming cycle.
5. Gross Profit reached S/ 503 million (-1.0% YoY) while Gross Margin decreased by 5.5 p.p. YoY to 22.4%. Excluding Fino, SAO and the IAS 29 application, Gross Profit amounted to S/ 521 million (+2.6% YoY), while Gross Margin decreased 0.4 p.p. to 27.5%. Excluding Fino, SAO and the IAS 29 application, the margin decrease was mainly explained by higher raw material prices in the Consumer Goods International (Brazil), B2B and the Aquaculture businesses, coupled with a revenue mix towards value products. Nevertheless, we managed to partially offset the increase in raw material prices, through efficiencies within other inputs and transformation costs as packages, manufacturing, logistic, among others. These costs, excluding Fino and SAO and the IAS 29 application, represented 14.9% of Total Revenue in Q4 17' and 11.6% in Q4 18', a 3.3 p.p. decrease.
6. EBITDA amounted to S/ 228 million (+1.4% YoY) while EBITDA Margin reached 10.2%, a decrease of 2.2 p.p. compared to Q4 17'. Excluding Fino, SAO and the IAS 29 application, EBITDA amounted to S/ 265 million (+17.8% YoY) while EBITDA Margin was 14.0% (+1.7 p.p. YoY).
7. Consequently, Net Income totaled S/ 92 million during Q4 18', (-26.3% YoY), while Net Margin reached 4.1%, (-2.7 p.p. YoY). Earnings per Share (EPS) decreased from S/ 0.148 in Q4 17' to S/ 0.106 in Q4 18'. Excluding Fino, SAO, and the IAS 29 application, Net Income amounted to S/ 131 million, while Net Margin reached 6.9%. Earnings per Share (EPS) increased from S/ 0.148 in Q4 17' to S/ 0.155 in Q4 18' (+31.0% YoY).
8. Cash flow from Operations for 2018 was S/ 874 million, S/ 9 million lower than the figure generated in 2017. The lower cash flow was explained by the working capital efficiencies gained during 2016 and 2017 after the deployment of our efficiency program. Thus, improvements in Working Capital, organically, are marginal. Cash Flow used in Investing Operations during 2018 was S/ -1,203 million, compared to S/ -223 million during 2017 explained by Fino and SAO acquisitions which amounted to S/ 1,101 million, while CAPEX investments as of December 2018 were S/ 222 million.
9. As of December 2018, Total Debt increased by S/ 1,095 million compared to December 2017, reaching S/ 3,037 million mainly reflecting the leverage undertaken for the Fino and SAO acquisitions. Net Debt-to-EBITDA ratio increased from 1.0x as of December 2017 to 2.1x as of December 2018.
For a full version of ALICORP's Fourth 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 Fourth Quarter 2018 Results
Date: Thursday, February 21, 2019
Time: 11:00 a.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 4Q18 Results will be accompanied by a webcast presentation available at: https://webcasts.eqs.com/register/alicorp20190221
INVESTOR RELATIONS CONTACT
Investor Relations Team
Phone: (511) 315-0800 Ext.444411
Fax: (511) 315-0867
[email protected]
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.