Grupo LALA, S.A.B. de C.V.

Transcription

1 Grupo LALA, S.A.B. de C.V. INVESTOR RELATIONS PRESENTATION December, 2016

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3 ABOUT US

4 WHO WE ARE LALA is a Mexican Company focused in the healthy and nutritious food industry with over 65 years of experience in the production, innovation and marketing of milk and dairy products under the highest quality standards. LALA operates 22 production plants and 164 distribution centers in Mexico, Central America and United States, and is supported by more than 34,000 employees. LALA operates one of the largest chilled distribution networks in the region, with 6,500+ delivery routes. Our product portfolio includes over 600 SKUs under 56+ brands, which are available at more than 550,000 points-of-sale. MISSION Nourishing your life is our passion VISION To be the favorite dairy company in the Americas 4

5 OUR FOOTPRINT Mexico United States Guatemala Honduras El Salvador Nicaragua Costa Rica 5

6 OUR PRODUCTS

7 MILK 7 Milk: Pasteurized, UHT and functional milks, pasteurized and UHT dairy-based beverages, and powdered milk.

8 OTHER DAIRY PRODUCTS 8 Other Dairy Products: Cream, butter, cream-based spreads, yoghurt, cheese, ice cream and desserts.

9 BEVERAGES AND OTHERS 9 Beverages and Others: Beverages, juices, cold cuts and other income.

10 COMSUMPTION & DAIRY OUTLOOK Investing today to capture Mexico s future growth opportunities

11 CONSUMER OUTLOOK Today s market trends and consumption are moving towards foods and beverages categories that have functional benefits. More than half the consumers across all generations are willing to pay a premium for products that provide health benefits. The reinvention of dairy as a completely natural food plays an important role in this consumer trend. Creating new products that appeal to the health trend is not enough marketing, processing technology and convenience are important factors to be consider. 11

12 AMERICAS DAIRY MARKET TOTAL AMERICAS DAIRY MARKET VALUE IS ~US$160 BILLION World Dairy Market value is ~US$550 billion. 46% USA 24% Brazil 9% México The U.S., Mexico and Central America represents 58.0% of total Americas Dairy Market. Americas Dairy Market it s projected to grow by ~US$16 billion in next 5 years. 2% Others 1% Peru 2% Chile 8% Canada 3% Central America 3% Colombia 2% Argentina Brazil México 12 (1) Central America includes: Costa Rica, Dominican Republic, Guatemala, Nicaragua and other Central America / Caribean countries. (2) Others includes: Ecuador, Bolivia, Uruguay, Venezuela and other South America Countries. Source: Euromonitor, Company information.

13 LALA 2016 STRATEGIC PRIORITIES Sustainable Growth Strategy

14 ACCELERATING ORGANIC GROWTH IN MEXICO On-trend products and packing innovation New marketing campaign World-Class go-to market execution 14

15 ON-TREND PRODUCTS AND PACKING INNOVATION Innovation capable of changing the habits of consumers LALA 100 Since the introduction of LALA 100 only 3 months ago the fresh milk category has reached double digit growth (10.5% vs P8 15) with 85% of the growth coming from LALA *Considering the data reported by Nielsen in their ScanTrack service for the Fresh Milk category (without milk formula). Growth comparing P vs P in Total Mexico. Weighted distribution considered as the maximum reached since launch (June 2016)

16 ON-TREND PRODUCTS AND PACKING INNOVATION CHEESE New resealable technology Shredded and slice presentation Non-lactose NUTRI LECHE PANELA CHEESE Leverage Nutri Leche franchise to increase product offering among emerging consumers 16

17 ON-TREND PRODUCTS AND PACKING INNOVATION LALA SEMILLAS Super food seeds Low sugar and fat content 17

18 ON-TREND PRODUCTS AND PACKING INNOVATION NUTRI LECHE Top-five consumer brand in Mexico Annual sales above US$1 billion Nutri umbrella brand to increase product offer among low-incomes classes 18

19 MEXICO TOP FIVE CONSUMER BRANDS PLACE BRAND PENETRATION 99% 98% 99% 75% 89% FREQUENCY The Largest Healthy Food Company in Mexico Classified among Mexico s top five consumer brands. 19 Source: Kantar Worldpanel Penetration based on number of households that purchase a brand; 2. Frecuency of purchase (# of times per year)

20 DEVELOPING INTERNAL CAPABILITIES STRATEGIC PROCUREMENT ARIBA Software implementation +900 distribution routes with pre-sale 2 SALES & OPERATIONAL PLANNING Improve Customer Service Pre-sale Motorcycle SHARED SERVICE STRUCTURE Structure and location 20 Handheld Device Secondary Distribution Vehicle

21 EXPAND & CONSOLIDATE CENTRAL AMERICA OPERATIONS Costa Rica agreement with Florida Bebidas adds: Distribution Capacity Raw milk Supply assurance Production Capacity Production Plant San Ramón Alajuela, Costa Rica 21 New Central America headquarters in Panama

22 M&A AND ALLIANCES LALA OPERATES IN 7 COUNTRIES OPPORTUNITIES REGION MARKET ADDING The Americas Dairy & Dairy alternatives Infrastructure, brands, value- added categories and talent. Our Strategy Follows 22 a Disciplined Process

23 LALA U.S. PORTFOLIO Building brands to grow the business 23

24 LALA U.S. PRODUCTION FACILITIES SINTON, COLORADO OMAHA, NEBRASKA FLORESVILLE, TEXAS 24 Drinkable Yoghurt Spoonble Yoghurt Sour Cream ESL Milk ESL Milk Cultured

25 LALA U.S. YOGHURT MARKET U.S. YOGHURT CATEGORY OVERVIEW 9% Yoghurt Drinks +$3.88B USD 91% Yoghurt (Blended) While blended yoghurt is declining, drinkable is growing double digit (1.7)% +11.5% Drinkable yoghurt represents 9.0% of the total yoghurt category value in the U.S. 25 Source: IRI; US MULO (MULti-Outlet) 26 Weeks Ending

26 LALA U.S. PREMIUM MILK Jersey Cows less than 10% of milk supply Natural Milk Higher Protein Higher Calcium Simple Ingredients Richer, Creamier Texture Right Time for Promised Land National Expansion 26

27 LALA U.S. PRESENCE ;LALA yoghurt brand is growing twice (21.2%) as fast as the drinkable yoghurt category Sept ACV: 64.0% 16,796 STORES Presence in Big Retailers with nationwide exposure LALA U.S. is the Brand Leader in Adult Drinkable Yoghurts and the #2 in total Drinkables which includes kids 27 Source: IRI; US MULO (MULti-Outlet) 26 Weeks Ending

28 CAPEX INVESTMENTS 2016 A total investment of +3,000mm MXN

29 CHEESE PRODUCTION CAPACITY Investment: +1,000mm MXN Delivery: Q Location: Complejo Laguna, Torreon, Mexico Increasing cheese production capacity and new packing technology 29 * All figures and dates are according to Company s estimations.

30 WHITE BASE CAPACITY (YOGHURT) Investment: +250mm MXN Delivery: Q Location: Complejo Irapuato, Irapuato, Mexico Increase of production capacity and new topping technology 30 * All figures and dates are according to Company s estimations.

31 WATER TREATMENT PLANT Investment: +100mm MXN Delivery: Q Location: Complejo Laguna, Torreon, Mexico New facility for water treatment 31

32 NEW PASTEURIZATION PLANT, NORTH MEXICO Investment: +300mm MXN Delivery: Q Location: Cd. Obregon, Mexico Construction of a new state of the art pasteurization facility 32 * All figures and dates are according to Company s estimations.

33 AUTOMATED INDUSTRIAL WAREHOUSE Investment: +200mm MXN Delivery: Q Location: Complejo Irapuato, Irapuato, Mexico New automated industrial warehouse to increase storage capacity 100% Refrigerated capacity Up to 23,000 storage positions 33 * All figures and dates are according to Company s estimations.

34 NANO FILTRATION - LALA 100 MILK Investment: +200mm MXN Delivery: Q Location: Aguascalientes, Mexico Production capacity using Nano- Filtration Technology The first production line with PET packing material in Mexico and Central America 34 * All figures and dates are according to Company s estimations.

35 NEW TETRA PAK EQUIPMENT OF 1.5L UHT PRODUCTS Investment: +100mm MXN Delivery: Q Location: Aguascalientes, Mexico New equipment and technology for Tetra Pak packing of 1.5L for UHT products 35 * All figures and dates are according to Company s estimations.

36 OTHER INVESTMENTS Investment: +300mm MXN New UHT Multi-Packing Complejo Laguna - Torreon, Mexico Increase of production capacity Guadalajara, Mexico Increase cooler space at point of sale 36 * All figures and dates are according to Company s estimations.

37 KEY FINANCIAL INFORMATION 37

38 FINANCIAL RESULTS (P&L) 3 MONTHS ENDED SEPTEMBER 30, 2016 Income Statement (1) 3Q-15 % 3Q-16 % Growth Net Sales $ 12, % $13, % 12.5% Gross Profit 4, % 5, % 7.2% Operating Income 1, % 1, % (25.3)% EBITDA (2) 1, % 1, % (12.5)% Net Income % % (22.8)% SALES BY TRADE CHANNELS % 43.0% Company Data, in Mexican Pesos. ( 000) 2. EBITDA=Earnings Before Interest, Taxes, Depreciation and Amortization.

39 SALES BY SEGMENT Segment 3Q-15 3Q-16 % Variation Milk $ 7,883 $8, % Other Dairy Products 3,690 4, % Beverages and Other % 62.7% 32.0% 5.3% Company Data, in Mexican Pesos. ( 000)

40 3Q-2016 NET SALES BRIDGE YEAR-ON-YEAR GROWTH 3M ended September 30 th, % $ % $ % $548 (1) (3) (3) (2) (*) Company Data, in Mexican Pesos. ( 000) (1) Organic: Volume and pricing. (2) CAM: Guatemala, Nicaragua & Costa Rica. (3) Inorganic: Additional sales from acquisitions. 40

41 3Q-2016 EBITDA MARGIN BRIDGE 13.9% YEAR-ON-YEAR CONTRACTION (bps) 3M ended September 30 th, % SHORT-TERM ONGOING IMPACTS ONE-OFF (1) (2) (3) (4) 41 (*) Company Information, (bps) basis points. (1) FX (Peso/Dollar): Exchange rate depreciation effect over total COGS exposure. (2) CAM: Guatemala, Nicaragua & Costa Rica. (2) CAM Integration: Extraordinary effects from production consolidation & Venezuela sales short-fall. (3) Net dilutive effect from consolidating 2 months of the US Branded Business. (4) Corporate Restructure: One-offs from headcount reduction, Shared Services provisions & others.

42 YEAR TO DATE RESULTS HIGHLIGHTS 9 MONTHS ENDED SEPTEMBER 30, 2016 NET SALES (1) (MXN$mm) Margin 100.0% 100.0% EBITDA (2) (MXN$mm) Margin NET INCOME (1) (MXN$mm) Margin 14.0% 13.4% 8.2% 7.6% 35,653 39,113 5,008 5,260 2,919 2,965 9M-15 9M-16 9M-15 9M-16 9M-15 9M Company Data, in Mexican Pesos. ( 000) 2. EBITDA=Earnings Before Interest, Taxes, Depreciation and Amortization. 42

43 STRONG FINANCIAL POSITION $10,071 $6,263 Key Metrics 3Q-15 3Q-16 Net Debt / EBITDA (1.5)x (0.6)x EBITDA / Interest Paid 527.9x 371.5x EARNINGS PER SHARE $1.46 $1.59 $2,268 $58 3Q-15 3Q-16 Total Debt (MXN$mm) Cash (MXN$mm) AS OF SEPTEMBER 30, Financial Position Total Assets $34,354 $39,773 Cash 10,071 6,263 Total Liabilities 9,318 12,265 Shareholder Equity 25,035 27, Source: Company Information Ratios are calculated in local currency Figures in Mexican Pesos ( 000)

44 LALA B OVERVIEW SHARE PRICE DECLINED YTD (22.7)% AVERAGE DAILY LIQUIDITY 2016 US$5.7mm November 14th, 2016 (LALA B) SHAREHOLDERS STRUCTURE 2,475,932,111 shares % Free Float 1.1% Others OWNERSHIP STRUCTURE 55.0% Control Trust $ % Underwriting Trust 44 Source: Company Information, Bolsa Mexicana de Valores, Analyst Research.

45 DISCLAIMER This material does not constitute an offering document. This material was prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities. Any offering of securities will be made solely by means of an offering memorandum, which will contain detailed information about the Company and its business and financial results, as well as its financial statements. Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the U.S. Securities Act of 1933, as amended. This presentation includes forward-looking statements or statements about events or circumstances which have not yet occurred. We have based these forward-looking statements largely on our current beliefs and expectations about future events and financial trends affecting our businesses and our future financial performance. These forward-looking statements are subject to risk, uncertainties and assumptions, including, among other things, general economic, political and business conditions, both in Mexico and in Latin America as a whole. The words believes, may, will, estimates, continues, anticipates, intends, expects, and similar words are intended to identify forward-looking statements. We undertake no obligations to update or revise any forward-looking statements because of new information, future events or other factors. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur. Therefore, our actual results could differ substantially from those anticipated in our forward-looking statements. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. We and our affiliates, agents, directors, employees and advisors accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material. This material does not give and should not be treated as giving investment advice. You should consult with your own legal, regulatory, tax, business, investment, financial and accounting advisers to the extent that you deem it necessary, and make your own investment, hedging and trading decision based upon your own judgment and advice from such advisers as you deem necessary and not upon any information in this material. 45

46 CONTACT INFORMATION Investor Relations Enrique González +52 (55) Stock Information Grupo LALA has been traded under the ticker LALA B on the Bolsa Mexicana de Valores (BMV) since October 16, For more information: Forward-looking statements This document contains certain assumptions, projections and forward-looking statements regarding the Company s financial situation, operative results and information, Grupo LALA s business and that of its subsidiaries as well as with regards to the Company s related plans and objectives. This executive summery does not constitute a public securities offering on behalf of LALA and is intended to be used for informational purposes only. 46

47 Nourishing your life is our passion

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