Earnings Call Third Quarter 2017 Financial Results

Transcription

1 ESTRICTAMENTE PRIVADO & CONFIDENCIAL edit Master title style Earnings Call Third Quarter 207 Financial Results November 3 th, 207 0

2 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 on assumptions that, as of today, are considered valid. Financial and business projections are estimates and do not constitute any declaration of historical facts. Words such as anticipates, could, may, can, plans, believes, estimates, expects, projects, pretends, probable, will, should, and any other similar expression or word with a similar meaning pretend to identify such expressions as projections. It is uncertain if the anticipated events will happen and in case they happen, the impact they may have in Alicorp s or The Consolidated Company s operating and financial results. Alicorp does not assume any obligation to update any financial or business projections included in this presentation to reflect events or circumstances that may happen.

3 Agenda

4 Agenda Macro Outlook 2 Strategy Update: Growth 3 4 Q3 207 Highlights Guidance for FY Q3 207 Business & Operating Review 6 Q&A 7 Appendix 3 3

5 Agenda Macro Outlook 2 Strategy Update: Growth 3 4 Q3 207 Highlights Guidance for FY Q3 207 Business & Operating Review 6 Q&A 7 Appendix 4 4

6 Macro Outlook (/3): LatAm Landscape for 7 and 8 Economic recovery is expected for most economies in LatAm; albeit no sign of superior returns for any particular region. In Peru, we believe the next 6 months will be key to unlock public investment in order to spur private consumption LATAM 207E & 208E GDP GROWTH RATES Δ 2 INFLATION RATES Δ CURRENCIES 3 Bolivia 2.5% 4.0% 3.8% 3.7% 4.5% 2.5% N/A 2.5% Bolivia and Peru should continue to outperform the region Peru Argentina 0.6% 2.6% 2.9% 3.9% 2.7% 3.5% 5.4% 22.2% -.5% 3.4%.9%.2% Brazil starting show positive trends. Nevertheless, we might have to wait until 209 to see a full recovery Brazil Chile Ecuador 0.6% 0.9% 2.2%.8% 2.7% +95% of our shrimp feed business is export-driven 4.% 4.% 3.4%.%.9%.8% 5.0% -0.2% N/A Argentina expects a soft rebound next year on the back of pro-market & businessfriendly reforms Median of the research estimates as of September Versus previous estimate as of June Implied depreciation based on end of period exchange rates. Median of the research & company s estimates as of September

7 FARINACEOUS & OLEAGINOUS (PERU) Macro Outlook (2/3): Top-down drivers for Peru We are noticing a pick-up in various macro indicators that confirm a recovery in consumption; albeit recovery is soft and still lagging against other components of GDP SUPPLY VIEW Slight increase in raw material prices for our farinaceous platform (wheat) Soybean oil price has been stabilizing the past months while crude palm oil price is declining WHEAT DEMAND VIEW 2 ECONOMIC INDICATORS EVOLUTION (%) YTD Evolution Oct Q 6' Q2 6' Q3 6' Q4 6' Q 7' 207E SOYBEAN OIL Consumer Basket Private Investment Food Basket GDP Construction YTD Evolution CRUDE PALM OIL Oct 7 Correlation coefficient 3 Private Investment GDP Construction Consumer Basket 4 Food Edible Oils + Basket 4 Pasta Urban Employment YTD Evolution Oct 7 Exchange Rate Chicago Board of trade Index based on closing future prices. 2 Source: Central Bank (BCRP) & INEI (National institute of statistics & Informatics). 3 For the period 202 Q3 7 (2 quarters). 4 According to Kantar World Panel. 6 6

8 Macro Outlook (3/3): Top-down drivers for Aquaculture SHRIMP AND SALMON The global aquaculture industry outlook remains positive underpinned by solid S&D fundamentals. With the "El Niño" phenomenon behind us, we expect steady growth in the upcoming quarters SUPPLY VIEW GLOBAL VIEW 20 SOYBEAN MEAL (Thousands of MT) CAGR 6.% YTD Evolution Oct 7 SHRIMP OUTPUT 3,56,644,670, FISH MEAL 2 YTD Evolution Oct 7 SALMON OUTPUT 4 CAGR.8%,800 2,000 2,00, WHEAT INTERNATIONAL PRICES YTD Evolution Oct Price Salmon (USD /lb) Price Shrimp (USD /lb) Oct 7 Chicago Board of Trade Index based on closing future prices. 2 Fishmeal, Peru Fishmeal/pellets 65% protein, CIF. Source: World bank. 3 Internal information from official sources. 4 Source: Salmon Farming Industry Handbook 207 Marine Harvest & Kontali Analyse. 5 Source: Urner Barry Index. 7 7

9 Agenda Macro Outlook 2 Strategy Update: Growth 3 4 Q3 207 Highlights Guidance for FY Q3 207 Business & Operating Review 6 Q&A 7 Appendix 8 8

10 2 We have continued to focus on our three pillars for value creation Revenue Growth STRATEGIC PILLARS (PENM) EBITDA Growth CAGR 5-7 : 2.3% CAGR 5-7 : 7.4% 6,580 6,629 7, (PENM) Growth LTM LTM Gross Profit (PENM) SG&A (PENM) Gross Margin 28.4% 30.3% 3.3% 33.2%,867 2,008, SG&A / Revenue 9.5% 20.3% 20.9% 20.9%,284, Efficiencies H7 3T7 Savings +.0 p.p. +2. p.p H7 3T7 Savings +0.6 p.p. Without non-recurring expenses 20.2% 9.7% People One Alicorp Mindset Transfer knowledge across the organization Leverage corporate capabilities Share best practices among business and geographies Excludes commodity hedging and other operating expenses. 9 9

11 2 allowing us to significantly reduce the gap between the Market and the Fundamental Value of the Firm Alicorp Market Value Alicorp Fundamental Value Increase our margins leveraging through our Competitive Advantages Brand Management Go-To-Market strategy Supply Chain Product development Revenue Management Working Capital and Financial / tax efficiencies Organic Growth Focus on the economic Segment (T4 ) in Peru Canned tuna, Laundry Care Food Service in B2B Personal Care in Brazil 2 Efficiencies Alicorp Fundamental Value post internal initiatives Growth Value Creation: TSR People 3 4 Inorganic Growth Andean Region Area II and III in Brazil Peru: Core Categories 2 Alicorp Fundamental Value post inorganic initiatives Tier 4. 2 Edible Oils, Detergents, Pastas and Sauces. 5 Alicorp post Optimal Capital Structure Capital Optimization Focus on ROIC and Profitability Divestiture (Real state, non operating assets and non strategic assets) 0 0

12 2 while reducing Alicorp s leverage below that of its median LatAm consumer player comp set (USDM) Market Cap Revenues EBITDA Net Debt/EBITDA 2, ,34 4,975 2,02,07 2,923, x Profitability increase and efficiencies in.6x working capital increased Free 2.7x Cash Flow generation and ROIC levels n.a 2 3,80 5,800,03 3,04 3,730 0, n.a 2.47x 5.78x Long-term leverage should remain between 2.0x to 2.5x Net Debt/EBITDA, at Investment Grade levels,086 3,953, x 2.86x Source: Bloomberg as of Oct 3. LTM basis. 2 Companies with excess of cash over financial debt.

13 Jan-5 Feb-5 Mar-5 Apr-5 May-5 Jun-5 Jul-5 Aug-5 Sep-5 Oct-5 Nov-5 Dec-5 Jan-6 Feb-6 Mar-6 Apr-6 May-6 Jun-6 Jul-6 Aug-6 Sep-6 Oct-6 Nov-6 Dec-6 Jan-7 Feb-7 Mar-7 Apr-7 May-7 Jun-7 Jul-7 Aug-7 Sep-7 Oct-7 2 and enabling us to boost Total Shareholder Return (TSR) during the past year ALICORC vs. S&P BVL Performance 60 ALICORC vs. S&P BVL appreciation: +.56x 2 ADTV ALICORC S&P BVL ADTV (PENk) 60,000 50, ,000 30, ,000 0, Total Shareholder Return (TSR) Evolution Cap. appreciation xx 3 Div. Yield xx 3 4 TSR xx 3 5 YTD 48.4% + 2.4% = 50.8% Year 29.7% +.8% = 3.4% 3 Year 9.3% + 0.2% = 9.5% 5 Year 6.6% + 0.9% = 7.5% Alicorp seeks to maximize Shareholder value by increasing ROIC to boost TSR Available levers to increase TSR: Increase payout ratio Distribution of special dividend Monetization of non-core assets (BAP shares, non-operating assets) Source: Bloomberg as of Oct 3. 2 Stock appreciation from Jan-5 to Oct-7. 3 Annualized rate. 4 Difference between TSR and Capital appreciation. 5 TSR formula: (Ending Stock Price + Dividend per period Beginning Stock Price) / Beginning Stock Price. 2 2

14 2 Regarding inorganic growth, our M&A strategy takes place in a dynamic scenario of consolidation in the region Increased M&A activity in LatAm underpinned by sound financial position of leading players. There is an on-going regional consolidation, driven by the limited number of "potential targets" Multinationals Mexico Potential M&A workstreams Consolidate market Nicaragua Honduras Colombia Increase footprint Panama Inc. scale Areas II & III Mexican Players Ecuador Guidelines for M&A transactions LatAm Players Peru Chile Argentina Bolivia Rigorous screening & approval process focus on acquiring businesses that allow us to replicate our competitive advantages (brand management, distribution, procurement) Payment of a Fair Price (in terms of EV/ EBITDA) to secure adequate risk /return profiles Ensure adequate integration through the creation of an Integration Management Office ( IMO ) 3 3

15 2 Regarding organic growth, we have gained market share in our Peru Businesses increasing both Volume and Revenue Our competitive advantages in Peru allow us to growth even in a challenging environment Consumer Goods Peru (CGP) ALL CATEGORIES (in PEN) Business to Business (B2B) ALL CATEGORIES (in PEN) 5.6% 3.5% 3.6% 4.3% 2.% 2.6%.9%.4% Volume Revenue Volume Revenue CAGR LTM vs. 206 Volume Revenue Volume Revenue CAGR LTM vs. 206 SHARE GAINING YTD /2 SHARE GAINING YTD /3 Detergents Edible Oils Pasta Brand Extensions 6-7 Industrial Flours Bulk Oils % 7YTD +.3 Canned Tuna Stain Remover Industrial Sauces +8.7 According to internal estimates based on public sources. 2 In terms of Value Share. According to Kantar World Panel & company estimates. 3 Implied Volume Share. Market according to Kantar World Panel & Company estimates. 4 4

16 2 while a good market momentum in Aquaculture is occurring coupled with a mix performance in our International division Our international division has been affected by the re-estructuring of our Argentine operation, while the acquaculture business is in recovery mode after El Niño phenomenon during last year CONSUMER GOODS INTERNATIONAL ARGENTINA AQUACULTURE SHRIMP (In USD) HAIR CARE GROWTH (In ARS) 3.3% 8.0% 8.2% 8.2% -3.4% -5.7% Volume Revenue Volume Revenue Evolution LTM vs. 206 BRAZIL 0.5%.3% Volume Revenue Volume Revenue CAGR LTM vs. 206 SALMON (In USD) PASTA GROWTH (In BRL) 2.8% 8.3% Despite this contraction, we have improved our profitability 2.4% 29.5% 20.% -3.4% -2.% -0.4% Volume Revenue Volume Revenue Evolution LTM vs. 206 Volume Revenue Volume Revenue CAGR LTM vs. 206 Hair Care represents +35% of the total Revenue from Argentina. 2 Pasta represents ~65% of the total Revenue from Brazil. 5 5

17 Agenda Macro Outlook 2 Strategy Update: Growth 3 4 Q3 207 Highlights Guidance for FY Q3 207 Business & Operating Review 6 Q&A 7 Appendix 6 6

18 3 Q3 207 Key Highlights We continue to grow and improve in margins, although smoother than past quarters. We expect this trend to continue based on i) the macroeconomic recovery in Peru and ii) our strategic initiatives HIGHLIGHTS REVENUE & GROSS MARGIN Total Revenue increased 4.2% YoY (PEN Million) 6,580 6,629 7,052 Gross Profit increased 3.6% YoY (+ S/ 72.5 million) while Gross Margin reached 33.2% (+2.8 p.p.) EBITDA increased 9.6% YoY (+ S/ 2.8 million) while EBITDA Margin reached 3.6% (+ 0.7 p.p.) Net income increased 28.7% YoY (+ S/ 25.9 million) while Net Margin reached 6.4% (+.2 p.p.),699,75, % 30.4% 33.2% 28.4% 30.3% 3.5% Q3 5' Q3 6' Q3 7' FY 205 FY 206 LTM EBITDA & EBITDA MARGIN NET INCOME & NET MARGIN (PEN Million) (PEN Million) 29.3% 39.6% % 2.9% 3.6%.0% 2.% 2.7% % 5.2% % 2.4% 4.6% 5.8% Q3 5' Q3 6' Q3 7' FY 205 FY 206 LTM Q3 5' Q3 6' Q3 7' FY 205 xx Dividend Payout Ratio FY 206 LTM 7 7

19 PROFITALIBITY 3 Q3 207 Operational Highlights Our performance continues to experience steady growth and profitability improvement backed on i) our organic growth strategy and ii) the results accomplished by our efficiencies initiatives implemented I REVENUE GROWTH Consolidated Revenue grew 4.2% YoY backed on: i) sound results in Consumer Goods Peru due to our brands strategy and innovation and ii) the good performance of the Aquaculture business CONTINUOUS INNOVATION Consumer Goods Peru ( CGP ): In order to maintain our leadership we launched/revamped 8 products, among these, the following can be highlighted: i) pancake premix under the Blanca Flor Megabrand, launching a new line of ready-to-cook products, ii) under the Bolivar brand, we launched a new laundry care line for Baby clothes Baby & Kids, and ii) Opal Advance, aiming to strengthen the brand position in the stain remover detergent II GROSS PROFIT Gross Margin reached 33.2% (+ 2.8 p.p. YoY) mainly explained by: i) Revenue Management and design-to-value initiatives in the Consumer Goods Peru Business, ii) savings in procurement and manufacturing as a result of our efficiencies program, iii) lower raw material prices in the Aquaculture business, and iv) higher operative contribution from the Food Service platform EBITDA EBITDA margin reached 3.6% (+ 0.7 p.p. YoY) on the back of a higher Gross Margin contribution from Peru and the Aquaculture businesses, partially offset by non-recurring expenses associated to our efficiencies program. 8 8

20 3 Q3 207 Financial Highlights Net income increased 28.7% YoY, boosted by lower Net Financial Expenses I FINANCIAL LEVERAGE Net Debt-to-EBITDA ratio decreased to 0.98x as of September 207 from.66x as of December 206 Net Debt decreased to S/ 877. million as of September 207 from S/,332.9 million as of December 206 (a decrease of S/ million) All-in cost of debt was 7.% during Q3 7' II WORKING CAPITAL Cash Conversion Cycle, measured in LTM basis, improved to.8 days (as of September 207) from 37.4 days (as of December 206), mainly due to better commercial conditions with suppliers and a better inventory rotation III NET INCOME Net income reached S/ 6.4 million (+ 28.7% YoY), while Net Margin was 6.4% (+.2 p.p. YoY) Lower financial expenses of S/ 2.0 million (- 54.% YoY), and lower FX exchange losses of S/.8 million (- 45.7% YoY) EPS increased to S/ 0.38 as of Q3 7 from S/ 0.06 as of Q3 6 IV CREDIT RATING All credit ratings agencies have reaffirmed the investment grade with a "stable" outlook, both in Peru ( Apoyo & Asociados and PCR ) and internationally ( S&P, Fitch and Moody s ) Additionally, on October 207, Equilibrium our recent local Credit Rating agency published an "AAA credit rating 9 Net Debt is Financial Debt minus cash and cash equivalents as of Q3 7. 9

21 Agenda Macro Outlook 2 Strategy Update: Growth 3 4 Q3 207 Highlights Guidance for FY Q3 207 Business & Operating Review 6 Q&A 7 Appendix 20 20

22 4 Consolidated Guidance for FY 207 Given our strong year-to-date performance, both in top and bottom line, we have adjusted upwards our guidance for 207 driven by: i) the growth and profitability improvement in Peru due to our efficiencies initiatives and innovation, and ii) a strong recovery and market growth of the Aquaculture business FY 206 Previous Guidance 207 YTD Results Q3 Guidance 207 Watchouts REVENUE GROWTH (PEN) (%) CAPEX 0.7% S/23.8M 5.0% - 7.0% S/50 200M 8.8% S/ 64.9M 6.0% - 8.0% S/00-50M The execution of Peruvian Government stimulus package and Multiannual Macroeconomic Framework EBITDA MARGIN (%) 2.% 2.0% - 2.5% 2.9% 2.25% % Healthy Nutrition Act in Peru NET DEBT-TO-EBITDA (x).66x.00x -.20x 0.98x 0.90x -.00x International growth drivers, especially for Brazil, and Argentine restructuring NET MARGIN (%) 4.6% 5.5% - 5.8% 6.2% 5.8% - 6.0% FX and commodities behaviors Previous guidance of Q

23 Agenda Macro Outlook 2 Strategy Update: Growth 3 4 Q3 207 Highlights Guidance for FY Q3 207 Business & Operating Review 6 Q&A 7 Appendix 22 22

24 5 Consumer Goods Peru HIGHLIGHTS Q3 207 INSIGHTS INNOVATION & POSITIONING Revenue and Volume increased by 7.8% YoY and 4.5% YoY respectively, on the back of the growth in our core categories and innovations Gross Margin increased by 2.7 p.p. YoY explained mainly by Revenue management, and our efficiencies initiatives EBITDA reached S/ 40. million (+ 9.4% YoY) and EBITDA Margin increase.9 p.p. YoY to 9.7% mainly explained by the increase in Gross Margin, partially offset by a higher SG&A Laundry Premixes Category Rank Edible Oils # Laundry Detergents # Pasta # Mayonnaise # Cereals # Jelly # REVENUE & GROSS MARGIN EBITDA & EBITDA MARGIN (PEN Million) 2,424 2,500 2,640 (PEN Million) % 38.0% 40.8% 35.6% 38.% 39.7% % 7.8% 9.7% 6.2% 7.4% 8.8% Q3 5' Q3 6' Q3 7' FY 205 FY 206 LTM Q3 5' Q3 6' Q3 7' FY 205 FY 206 LTM Colors following the next criteria: Market share (Δ% YoY) > p.p p.p. <Market share (Δ% YoY) < p.p. Market share (Δ% YoY) < -.0 p.p

25 5 B2B HIGHLIGHTS Q3 207 INSIGHTS PRODUCT INNOVATION Industrial Sauces Revenue and Volume increased by 5.7% and 4.5% YoY, respectively, mainly due to the growth of our Food Service platform Gross Margin increased by.7 p.p. YoY due to lower raw material prices EBITDA reached S/ 52.2 million (+7.3% YoY) and EBITDA Margin reached 2.4% (+0.2 p.p. YoY) REVENUE & GROSS MARGIN EBITDA & EBITDA MARGIN (PEN Million) (PEN Million),459,52, % 25.7% 27.4% 2.9% 25.3% 25.4% % % 2.4% 7.3%.% 0.5% Q3 5' Q3 6' Q3 7' FY 205 FY 206 LTM Q3 5' Q3 6' Q3 7' FY 205 FY 206 LTM 24 24

26 5 Consumer Goods International HIGHLIGHTS Q3 207 INSIGHTS PRODUCT INNOVATION Revenue and Volume decreased by 4.8% YoY and 2.5% YoY, respectively. Revenue in Argentina and Brazil amounted to S/ 97.8 million (- 9.0% YoY) and S/ 22.7 million (- 0.2% YoY), respectively Gross Margin increased by 2.9 p.p. YoY, mainly explained by Brazil s Gross Margin increase (+ 4.9 p.p. YoY) EBITDA was S/ million and EBITDA Margin was -.4% (- 4.9 p.p.) Tomato Sauce Powder Detergent REVENUE & GROSS MARGIN EBITDA & EBITDA MARGIN (PEN Million) (PEN Million),280,85, % 32.4% 35.3% 32.3% 32.3% 34.5% % 3.5% -.4% 7 5.8% 3.4%.5% Q3 5' Q3 6' Q3 7' FY 205 FY 206 LTM Q3 5' Q3 6' Q3 7' FY 205 FY 206 LTM Both innovations launched in the Andean Region: A new presentation of the Don Vittorio Tomato Sauce and a new Bolivar formula revamped

27 5 Aquaculture HIGHLIGHTS Q3 207 INSIGHTS Revenue and Volume increased by.9% and 2.6% YoY, respectively. Revenue amounted to S/ million and Volume reached 2.0 thousand tons. Gross Margin increased by 4.3p.p. YoY to 25.0%, mainly due to lower raw material prices EBITDA reached S/ 70.8 million (+ 28.4% YoY) and EBITDA Margin reached 6.6% (+ 2. p.p.), mainly explained by a higher Gross Margin REVENUE & GROSS MARGIN EBITDA & EBITDA MARGIN (PEN Million),677 (PEN Million),48, % % % 9.2% 20.2% 22.% % 4.4% 7 6.6% 3.5% 2.7% 4.4% Q3 5' Q3 6' Q3 7' FY 205 FY 206 LTM Q3 5' Q3 6' Q3 7' FY 205 FY 206 LTM 26 26

28 Agenda Macro Outlook 2 Strategy Update: Growth 3 4 Q3 207 Highlights Guidance for FY Q3 207 Business & Operating Review 6 Q&A 7 Appendix 27 27

29 Q&A

30 Agenda Macro Outlook 2 Strategy Update: Growth 3 4 Q3 207 Highlights Guidance for FY Q3 207 Business & Operating Review 6 Q&A 7 Appendix 29 29

31 Corporate Strategy

32 Total Shareholder Return Returning Value Debt reduction Inv. Cap. ROIC NOPAT / INVESTED CAPITAL NOPAT 7 Roadmap to Value Creation EBIT Growth Strategy: Focus in Peru (Edible Oils, Detergents, Pasta, and Sauces), the Andean region (Ecuador and Bolivia) and the Area II and III of Brazil Constant innovation to gain market share in core categories Growth Taxes Revenue Management Initiatives Pricing strategy revision Branding strategy optimization COGS Initiatives Production lines and shifts consolidation in Argentina and Brazil Production process standardization in Brazil Warehouses optimization capacity in Peru SG&A Initiatives Distribution and Go-to-Market strategy optimization in Peru Organizational restructure Weighted Effective Tax Rate 209 Goals Organic Top line growth of 6.5% (CAGR 7-9 ) EBITDA Margin 3.5% to 4.5% Efficiency WK Net Fixed Assets CCC Q3 6 : 42.5 days CCC Q3 7 :.8 days NFA turnover increased from 3.x in 203 to 3.4x in 206 Sale of non-core real-estate-related assets (S/ million) NI Margin 5.5% to 6.5% ROIC 3.0% to 3.5% Net Debt-to-EBITDA ratio reduced from 2.7x as of December 205 to 0.98x as of September 207 S/ million in Net Debt reduction since 206 People Strong commitment to return value to shareholders Dividend payout ratio for FY206 reached 39.6% of Net Income. Amount distributed reached S/ 20 million or S/ 0.4 per share (+ S/ 0.09 more than in 205) Achieved In process 3 3

33 Stock Performance

34 Oct-6 Nov-6 Dec-6 Jan-7 Feb-7 Mar-7 Apr-7 May-7 Jun-7 Jul-7 Aug-7 Sep-7 Oct-7 7 Sell-Side Research Estimates on ALICORC Analysts' outlook remains positive on Alicorp s target price Current Stock Price Consensus vs. Previous ALICORC, EPU and BVL Benchmark Oct 3th LTM -8.9% 5.% 6.9% -4.3% -2.3% ALICORC BVL EPU -3.4% % % 2.5% Current Previous Upside Stock Performance LTM: ALICORC: +46.0% EPU: +27.2% BVL: +29.4% Stock Performance. YTD: (Jan Oct 3th 207) ALICORC: +4.8% EPU: +25.6% BVL: +23.4% Stock price Oct 3th : 0.5 Previous Median: Current median: Potential Upside : 4.7% Potential upside : 2.5% Research Recommendation Recent Recognitions Previous 2 Current 3 Buy 78% Hold % Buy 67% Sell % Hold 33% Top 0 Most Admired Companies in Peru Latin America Executive Team Rankings 4 Potential stock price appreciation against price market as of Oct, 3 (PEN 0.5). 2 As of July 3th As of October 3th Ranked within the top-three companies within the categories of i) Best CEO, ii) Best CFO, iii) Best IRO and iv) Best IR Team, for Mid Cap Food & Beverages Sector

35 Financial Guidance by Business

36 PERU 7 Guidance FY 207 by Business FY 207 Revenue growth estimates have been reviewed upwards mainly for the sound performance of our Consumer Goods Peru and Aquaculture businesses GDP GROWTH FX FX Previous Guidance Revenue Growth COMMENTS CGP 3.5% - 5.5% 6.5% - 7.5% B2B 2.5% % - 4.0% 3.5%-5.0% TOTAL 3.0% - 5.0% 5.4% - 6.9% Sound results and Revenue Management initiatives to compensate lower expected GDP growth rates CGI 6 ARGENTINA BRAZIL 2.6% 0.6% % - 6.5% 4.5% - 6.5% -5.5% -.7% -.0% - 3.0% Argentine operation in restructuing, with a lagging consumption recovery partially offset by lower FX pressures AQUACULTURE 8.0% % - 4.0% 9.4% % Aquaculture recovers from El Niño phenomenon without experiencing a negative impact from this year s warmer sea temperatures Exchange Rate as of December 206 (against USD). 2 FX Rates for 207 (end of period) Company estimates (against USD). 3 USD/ARS FX expected Exchange Rate. ARS/PEN implied depreciation for 207 (3.4%). 4 USD/BRL FX expected Exchange Rate. BRL/PEN implied depreciation for 207 (.2%). 5 USD/PEN FX expected Exchange Rate. 6 Includes other international countries Revenue growth. 7 Aggregated forecast growth rate for Aquaculture market s considers the following expected growth rates: 8.6% for shrimp feed in Ecuador, 5.0% in Central America, and 2.3% for Peru. 8.2% for salmon feed in Chile. 35

37 Performance by Business

38 7 Q3 207 Milestones RESEARCH & DEVELOPMENT products were launched as part of our innovation strategy, being the most remarkable: Blancaflor Pancakes pre-mix New laundry care line for baby clothes Baby & Kids - Bolivar Opal Advance stain remover detergent 0 g presentation of Alacena mustard KEY MILESTONES CONTINUOUS EFFICIENCIES IN WORKING CAPITAL We reduced our Cash Conversion Cycle ( CCC ) to.8 days, from 37.4 days in Q4 6 We reduced our Days Sales Outstanding to 48.9 days (-.4 days YoY) and Days Inventory Outstanding to 62. days (- 9.9 days YoY) LOWER INDEBTNESS Alicorp continued reducing its Leverage, Net Debt-to-EBITDA ratio decreased from.66x as of December 206 to 0.98x as of September 207. Likewise, Net Debt was reduced by S/ million in the same period REPUTATION AWARDS & RECOGNITION Alicorp was included in Peru s top 0 organizations in the Most Admired Companies ranking Alicorp was ranked within the top-three companies within the categories of i) Best CEO, ii) Best CFO, iii) Best IRO and iv) Best Investor Relations Team in the 207 Latin America Executive Team rankings, Mid Cap Food & Beverages sector 37

39 EBITDA Margin (%) Revenue (PEN Million) 7 Q3 207 Performance by Business Unit & Regions CONSUMER GOODS B2B AQUACULTURE % % % % +.9% Q3 6' Q3 7' Peru International Q3 6' Q3 7' Q3 6' Q3 7' Q3 6 Q3 7 Var. Q3 6 Q3 7 Var. Q3 6 Q3 7 Var. 3.2% 4.0% 3.5% 7.8% -.4% 9.7% 0.8 p.p. 2.2% 2.4% 0.2p.p p.p. +.9 p.p. 4.4% 6.6% +2.p.p. Revenue Mix Peru Ecuador Chile Argentina Brazil Others (%) 63.% 3.3% 7.9% 5.4% 6.7% 3.6% Financial figures of B2B and Aquaculture are consolidated. 38

40 PERU CONSOLIDATED 7 Performance by Business Unit & Regions () Consolidated Variation Q3 7 PENM Q Q2 Q3 Q4 FY Q Q2 Q3 Q4 FY Q Q2 Q3 YoY QoQ Revenue,509,639,699,734 6,580,438,629,75,8 6,629,590,827, % -0.2% Gross Profit , , % 4.9% SG&A , , % 4.0% EBITDA % 2.5% Gross Margin 27.5% 28.0% 29.5% 28.4% 28.4% 30.4% 30.2% 30.4% 30.% 30.3% 30.9% 3.6% 33.2% 2.8%.6% SG&A(% of Revenue) 9.2% 9.3% 9.3% 20.% 9.5% 2.4% 20.6% 20.0% 9.5% 20.3% 2.8% 20.0% 20.9% 0.9% 0.8% EBITDA Margin 9.9% 9.6% 3.%.%.0%.4%.9% 2.9% 2.% 2.%.7% 3.2% 3.6% 0.7% 0.4% Consumer Goods Peru Variation Q3 7 PENM Q Q2 Q3 Q4 FY Q Q2 Q3 Q4 FY Q Q2 Q3 YoY QoQ Revenue , , % 6.5% Gross Profit % 8.3% SG&A % 9.5% EBITDA % 6.3% Gross Margin 34.2% 35.2% 37.% 35.6% 35.6% 38.0% 38.2% 38.0% 38.% 38.% 39.6% 40.% 40.8% 2.7% 0.7% SG&A(% of Revenue) 23.0% 22.9% 22.4% 22.6% 22.7% 24.4% 24.2% 23.0% 22.9% 23.6% 24.6% 23.0% 23.6% 0.7% 0.7% EBITDA Margin 4.7% 5.3% 8.0% 6.5% 6.2% 6.9% 7.3% 7.8% 7.4% 7.4% 8.3% 9.8% 9.7%.9% 0.0% B2B Variation Q3 7 PENM Q Q2 Q3 Q4 FY Q Q2 Q3 Q4 FY Q Q2 Q3 YoY QoQ Revenue , , % 7.8% Gross Profit % 23.2% SG&A % 4.3% EBITDA % 56.5% Gross Margin 23.% 2.6% 22.5% 20.6% 2.9% 25.6% 24.4% 25.7% 25.7% 25.3% 24.3% 24.0% 27.4%.7% 3.4% SG&A(% of Revenue) 6.6% 5.9% 6.0% 9.0% 6.9% 6.6% 6.0% 5.3% 5.4% 5.8% 7.2% 6.9% 6.4%.0% -0.5% EBITDA Margin 8.8% 8.3% 9.0% 3.2% 7.3% 0.3% 0.3% 2.2%.4%.% 9.3% 8.5% 2.4% 0.2% 3.9% SG&A doesn t include other expenses and raw material hedging expenses. 39

41 INTERNATIONAL 7 Performance by Business Unit & Regions (2) Consumer Goods Int Variation Q3 7 PENM Q Q2 Q3 Q4 FY Q Q2 Q3 Q4 FY Q Q2 Q3 YoY QoQ Revenue , , % -2.5% Gross Profit % -3.7% SG&A % -3.3% EBITDA % -48.6% Gross Margin 3.4% 32.2% 33.2% 32.3% 32.3% 32.2% 3.0% 32.4% 33.6% 32.3% 33.4% 35.8% 35.3% 2.9% -0.5% SG&A(% of Revenue) 28.8% 28.9% 29.8% 29.7% 29.3% 32.% 3.0% 33.8% 32.7% 32.4% 35.3% 35.0% 38.7% 4.9% 3.7% EBITDA Margin 4.6% 5.7% 5.2% 7.8% 5.8% 2.6% 3.0% 3.5% 4.3% 3.4% 0.% 2.6% -.4% -4.9% -4.0% CMI Brazil Variation Q3 7 PENM Q Q2 Q3 Q4 FY Q Q2 Q3 Q4 FY Q Q2 Q3 YoY QoQ Revenue % -0.9% Gross Profit % -2.9% SG&A % 6.2% EBITDA % -39.6% Gross Margin 37.8% 35.8% 36.9% 32.2% 35.7% 29.4% 28.7% 35.7% 4.4% 34.2% 40.3% 4.4% 40.5% 4.9% -0.8% SG&A(% of Revenue) 29.8% 30.7% 28.6% 29.4% 29.7% 33.6% 33.8% 36.5% 32.4% 34.% 37.2% 35.6% 38.%.6% 2.6% EBITDA Margin 0.2% 7.6%.% 7.%.5% -.2% -2.4% 4.3% 3.0% 3.8% 7.0% 8.8% 5.3%.% -3.4% CMI Argentina Variation Q3 7 PENM Q Q2 Q3 Q4 FY Q Q2 Q3 Q4 FY Q Q2 Q3 YoY QoQ Revenue % -24.% Gross Profit % -32.0% SG&A % -7.% EBITDA % 32.2% Gross Margin 24.2% 28.2% 30.% 30.5% 28.2% 3.7% 30.7% 27.0% 22.4% 28.% 25.0% 28.7% 25.7% -.3% -3.0% SG&A(% of Revenue) 28.9% 28.6% 30.9% 3.6% 30.0% 30.8% 29.7% 32.6% 37.8% 32.5% 35.5% 38.0% 4.6% 9.0% 3.5% EBITDA Margin -3.3%.6% 0.0% -.7% -0.8% 2.8% 3.5% -0.3% -2.2% -.2% -0.5% -8.8% -5.3% -4.9% -6.5% SG&A doesn t include other expenses and raw material hedging expenses. 40

42 AQUACULTURE 7 Performance by Business Unit & Regions (3) Aquaculture Variation Q3 7 PENM Q Q2 Q3 Q4 FY Q Q2 Q3 Q4 FY Q Q2 Q3 YoY QoQ Revenue , , % -8.4% Gross Profit % -0.7% SG&A %.7% EBITDA % -7.4% Gross Margin 8.0% 9.0% 9.6% 20.3% 9.2% 20.4% 2.% 20.7% 9.0% 20.2% 2.2% 23.0% 25.0% 4.3% 2.0% SG&A(% of Revenue) 6.5% 7.% 7.% 8.7% 7.4%.6% 9.3% 8.% 8.2% 9.% 0.3% 8.6% 9.5%.4% 0.9% EBITDA Margin 3.% 3.7% 3.8% 3.2% 3.5% 0.7% 3.8% 4.4%.6% 2.7% 2.6% 6.4% 6.6% 2.% 0.2% SG&A doesn t include other expenses and raw material hedging expenses. 4

43 EBITDA & Net Income Drivers

44 7 EBITDA Main Drivers (YoY) SG&A EXPENSES EVOLUTION 2 EBITDA growth was a result of a higher Gross Profit (+S/ 72.0 million YoY) explained by i) Revenue Management and design-to-value initiatives in the Consumer Goods Peru Business, ii) savings in procurement and manufacturing as a result of our efficiencies program, iii) lower raw material prices in the Aquaculture business, and iv) higher operative contribution from Food Service platform (As % of Consolidated Revenue) 4.% 3.4% General & Administrative 2.8% 20.0% 20.0% 20.0% 4.0% Selling 20.9% 3.5% 4.0% 5.9% 6.6% 7.4% 6.6% 6.9% Q3 6' Q4 6' Q 7' Q2 7' Q3 7' MAIN DRIVERS OF EBITDA (YoY) 2.9% +2.7% -.0% -.0% 3.6% EBITDA Q3 6' Gross Profit SG&A Other Net Operating Expenses 2 3 EBITDA Q3 7' Gross Profit not including industrial depreciation. 2 SG&A doesn t include other expenses and raw material hedging expenses. 3 SG&A not including depreciation & amortization. 43

45 7 Net Income & Net Margin (%) Drivers FINANCIAL EXPENSES EVOLUTION Net Income increased S/ 25.9 million, reaching S/ 6.4 million in Q3 7, explained by: i) A decrease in Net Financial Expenses and in FX exchange losses (S/ million YoY) ii) An improve in profitability during the quarter due to a strong contribution from our Peru and Aquaculture businesses (As % of Consolidated Revenue) 3.2% 0.8% 2.3% 0.2% 0.2% 0.2% 2.2% 0.%.9%.%.3%.4% 2.% 0.%.0% 0.5% 0.% 0.% 0.8%.0% Q3 6' Q4 6' Q 7' Q2 7' Q3 7' Net Financial Expenses FX Gains/Losses FX and Rates Hedging Expenses MAIN DRIVERS OF NET INCOME (YoY) 5.2% 0.8%.2% 0.3%.3% 0.% 0.% 0.5% 6.4% Net Income Q3 6' Operating Profit Net Financial Expenses FX and Rates Hedging Expenses FX Exchange Losses Other Income Tax Net Income Q3 7' 44

46 Debt and Cash Management

47 Alicorp's financial guidelines are: i) Reduce financial expenses (All-in cost of debt), ii) Shift our debt towards Soles to reduce FX losses, iii) Smooth the maturity profile, and iv) Expand funding sources, both in banks and in capital markets (local and international) i) All-in cost of debt decreased. p.p. QoQ as of September 207, mainly due to the decrease of Argentina and Brazil debt, whose interest rates were the highest ii) FINANCIAL STRATEGY As of September 207, 0.04% of Total Financial Debt has a real exposure to USD volatility iii) Alicorp is evaluating issuances in the local capital market for 208 TOTAL DEBT 2 By Currency 3 Global By Source 7 Alicorp s debt financing strategy has allowed the Company to generate significant financial savings DEBT BREAKDOWN Dec-5 Dec-6 Sep-7 S/ 2,070 MM S/,606 MM S/ 2,47 MM 77.5% 7.% 3.8%.6% 89.5% 5.% 0.4% 5.0% USD PEN BRL ARS 95.3%.% 3.6% NET DEBT-TO-EBITDA RATIO (PEN Million) Net Debt EBITDA LTM All-in Cost of Debt,63,333, % 0.3% 9.4% 33.% 2.9% 48.4%.4% 30.7% 29.7% 52.6% 45.5%.6% International Bond Local Bonds ST Bank Debt LT Bank Debt CREDIT RATING 2.08x.66x.35x.06x 0.98x 8.3% 8.4% 8.5% 8.2% 7.% Q3 6' Q4 6' Q 7' Q2 7' Q3 7' Peru 4 Firm Dec-6 Sep-7 BBB- / Stable BBB / Stable Baa3 / Stable AAA / Negative AAA / Stable = = = + = BBB- / Stable BBB / Stable Baa3 / Stable AAA / Stable AAA / Stable All-in cost of debt is defined as the accumulated LTM of the Interest expense, plus hedging cost, plus difference in exchange rate, divided between monthly average of the LTM Gross Debt. 2 Before swap debt. 3 After swap debt. 4 On October, Equilibrium published the credit rating for the company's bonds at "AAA

48 7...and improve its debt maturity profile A B C On March 206, Alicorp refinanced its short-term debt with the issuance of two local bonds (S/ million) Alicorp reduced its Net Debt-to-EBITDA ratio reaching 0.98x as of Q3 7 Cash and cash equivalents cover the maturity of 207 debt at.58x as of September 207 (.3x as of December 206) MATURITY PROFILE : DURATION AS OF SEPTEMBER 207 WAS 2.87 YEARS VS YEARS AS OF DECEMBER 206 A December 206: Total Debt: S/,606 million Duration: Cash [Q4 6] % 24% 6% 0.5% 23% 3% 6% 6% 6% 6% 3% B September 207: Total Debt: S/ 2,47 million, C Duration: Cash [Q3 7] % 7% 5% 0.4% 7% 2% 5% 5% 5% 5% 2% Debt after hedging operations, at amortized cost. Local Bonds International Bond Long-Term Bank Debt Shot-Term Bank Debt 47 47

49 7 Working Capital and CAPEX Management for Q3 207 KEY MILESTONES A Alicorp reduced its Cash Conversion Cycle from 7.8 days as of Q2 7 to.8 days as of Q3 7, as a consequence of a reduction of the inventory levels in 5.% YoY (S/ 46. million) and an increase in its accounts payables by 20.3% YoY (S/ 22. million) B DAdditionally, the Company was able to reduce its capital investment requirements without compromising growth A WORKING CAPITAL EVOLUTION (PEN Million) 85 7 A temporal increase in accounts receivables of S/ 4.4 millions, make a DSO 2 of 48.9 days 46 Proactive management of our inventories of finished products (S/ 64.8 millions), along with more efficiencies of our fishmeal and wheat inventories (S/ 56.4 million) 22 Conditions in the market of commodities that allow us to access commercial facilities with suppliers, are maintained. 455 Q3 6' Accounts Receivable Inventories Accounts Payable Q3 7' A A DAYS OF WORKING CAPITAL 3 B CAPEX EVOLUTION (Days) Accounts Receivable Inventories Accounts Payable (PEN Million) 2.5% 44 Property, Plant & Equipment PP&E as % of Sales.3%.2% 0.8% % 3 Q3 6' Q4 6' Q 7' Q2 7' Q3 7' CCC Q3 6' Q4 6' Q 7' Q2 7' Q3 7' Working Capital is defined as the last twelve month (LTM) average of accounts receivable plus average inventory minus average accounts payable. 2 Days sales outstanding. 3 Average days as a mean of the LTM balance sheet accounts. 4 Cash Conversion Cycle

50 7 Cash Flow Build Up as of Q3 207 HIGHLIGHTS Cash Flow from Operations was S/ million, S/ 05.2 million higher compared to Q3 6' mainly explained by greater sales and improvement in working capital accounts. Cash Flow used in Investing Activities was S/ million. A total amount of S/ 64.9 million were used for CAPEX, which was S/ 36.3 million lower than the amount used during the same period of 206. Cash Flow used from Financing Activities was S/ million, compared to S/ million as of Q3 6', mainly due to an increase in short term debts. MAIN DRIVERS OF CASH FLOW EVOLUTION (PEN Million) Cash Flow from Operations S/ Cash Flow used in Investing S/ Cash Flow from Financing S/ , Net Cash on Dec-6 Cash generated from operations Taxes Other expenses from operations Investment Activities Debt Interest Payment Divident Payment 2 Other financial activities Net Cash on Set-7 Includes PP&E, acquisitions, software and other investment activities. 2 Includes FX Translation effect of S/ -3.0 million

51 7 Increasing the liquidity of the stock is a key factor to reflect its fundamental value ATVR 2M ATVR 3M 5% 24% % 60% 00% 30% 5% 4% 7% 6% 24% The volume traded (of the past 90 days) has reached 38.5M as of Q3 7 from 6.7M as of Q 7 An amount of USD0-5M was traded without affecting the stock price % 0% 0% 9% 9% 0% 50% 00% 50% Current constituent of the MSCI Large Cap Index Current constituent of the MSCI Small Cap Index 9% 8% 8% 5% 0% 0% 20% 30% Current constituent of the MSCI Small Cap Index From Q 7 to Q3 7, Pension Funds have decrease their stake in.2% Alicorp is getting closer to join the MSCI small cap Index while for the large cap index an ATVR 2m de 5% is needed Key Criteria MSCI Large & Small Cap ALICORP October 6 October 7 MSCI Large Cap Minimum Required MSCI Small Cap Minimum Required Market Cap Market Cap adj. float ATVR 2m ATVR 3m USD,960M USD,077M 9% 0.8% USD 2,64M USD,437M 9% 4% USD,269M USD 635M 5% - - USD 259M - - 0% 5% Source: Credicorp Capital Research, October

52 00% 90% 80% 70% 60% 50% 40% 30% 20% 0% 0% 7 OCF & FCF Evolution OPERATING & FREE CASH FLOW (PEN Million), , The Free Cash Flow for Q3 7' LTM is stronger than last year's as a result of: Q3 7' Operating Cash Flow Free Cash Flow OPERATING & FREE CASH FLOW CONVERSION 2 i. An improvement in EBITDA, ii. A reduction of the cash conversion cycle, iii. CAPEX investments rationalization 67% 77% 86% 86% 97% 9% Along the continuous increase in EBITDA, more than 00% of our EBITDA has been converted into cash flow Q3 7' EBITDA / Operating Cash Flow EBITDA / Free Cash Flow 2 Operating Cash Flow: EBITDA Taxes Changes in Working Capital. Free Cash Flow: Operating Cash Flow CAPEX (organic). 2 LTM 5 5

53 International Operations

54 6 Consumer Goods International - Argentina HIGHLIGHTS Revenue in Argentine Pesos decreased in 3.6% YoY and Volume decreased 7.6% YoY. Lower Volume resulted from an on-going market contraction driven by a lagging consumer purchasing power EBITDA decreased in ARS 77.6 millions, while EBITDA margin decreased 4.9 p.p. YoY to - 5.3% YoY REVENUE & EBITDA MARGIN (ARS Million) (ARS Million) 2,50 2, , % -2.2% -0.5% -8.8% -5.3% % % -5.3% -0.% -.4% -.5% Q3 6' Q4 6' Q 7' Q2 7' Q3 7' Q3 5' Q3 6' Q3 7' FY 205 FY 206 LTM FX USD/ARS FX USD/ARS FX USD/PEN FX USD/PEN FX PEN/ARS FX PEN/ARS Average FX rates for the period. 53

55 6 Consumer Goods International - Brazil HIGHLIGHTS Volume and Revenue in Brazilian Reals decreased 3.3% YoY and 0.0% YoY, respectively. The Volume and Revenue reduction was driven by an aggressive competition in the pasta market, still in recovery, coupled with a consumption transition towards the economic segment EBITDA was BRL 6.4 million compared to BRL 5.5 million in Q3 6, while EBITDA Margin increased.2 p.p YoY to 5.3% REVENUE & EBITDA MARGIN (BRL Million) (BRL Million) % 2.9% 7.0% 8.8% 5.3% % 4.2% 5.3%.7% 3.5% 8.6% Q3 6' Q4 6' Q 7' Q2 7' Q3 7' Q3 5' Q3 6' Q3 7' FY 205 FY 206 LTM FX USD/BRL FX USD/BRL FX USD/PEN FX USD/PEN FX PEN/BRL FX PEN/BRL Average FX rates for the period. 54