First Quarter 2018 Consolidated Financial Statements

Transcription

1 Earnings Report First Quarter 2018 Consolidated Financial Statements Consolidated Revenue amounted to S/ 1,710.7 million (+10.1% YoY). EBITDA increased by S/ 23.6 million, to S/ million (+12.7% YoY) with an EBITDA Margin of 12.3%. Additionally, Net Income reached S/ million, with a Net Margin of 6.1%, an increase of 1.1 p.p. YoY. Net Debt-to-EBITDA ratio decreased from 1.00x as of December 2017 to 0.94x as of March INVESTOR RELATIONS CONTACT Alexander Pendavis Corporate Finance Director & IRO T: (511) Ext apendavish@alicorp.com.pe investorrelations@alicorp.com.pe Lima, Peru, April 27 th, Alicorp S.A.A. ( the Company or Alicorp ) (BVL: ALICORC1 and ALICORI1) announced today its unaudited financial results corresponding to the First Quarter 2018 (Q1 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). Financial figures include the effect of the adoption of IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from Contracts with Customers). I. FINANCIAL HIGHLIGHTS 1. Consolidated Revenue amounted to S/ 1,710.7 million (+10.1% YoY), while Volume reached thousand tons (+12.4% YoY). Increase in Revenue was mainly explained by: i) a 11.8% YoY increase in the Consumer Goods Peru business due to growth from implemented innovations and from redesigning our commercial strategy for the economic segment, mainly in our core categories, and ii) a 35.0% YoY increase in the Aquaculture business mainly as a result of gaining market share in the Ecuador s shrimp feed market, coupled with an expansion within the market. 2. Revenue and Volume from the Consumer Goods Peru business reached S/624.4 million (+11.8% YoY) and thousand tons (+10.1% YoY) during Q1 18. This increase was mainly explained by: i) mainly the growth in our core categories such as Laundry Detergents (+S/ 13.6 million YoY), Sauces (+S/ 11.2 million YoY), Pasta (+S/ 6.2 million YoY), as well as Domestic Oil (+S/ 5.1 million YoY), and ii) the Canned Tuna category, launched in Q2 17 (+S/ 15.3 million YoY). Furthermore, the 1

2 Company s commercial strategy resulted in an equal or a higher volume share in 13 out of our 19 categories (including subcategories). 3. Regarding product innovation, during Q1 18 the Company launched/revamped 9 products (4 in Consumer Goods Peru, 2 in B2B, 1 in Consumer Goods International and 2 in Aquaculture). The following launches can be highlighted: i) the new vanilla & caramel fragrance softener under the Bolivar mega brand, seeking to strengthen the brand positioning, and ii) Frutisimos drinkable jelly under the Negrita brand; aiming to highlight and increase the naturalness of the brand. 4. Gross Margin increased by 1.3 p.p. YoY (27.6% in Q1 18 versus 26.3% in Q1 17 ), while Gross Profit reached S/ million, a 15.3% increase compared to the S/ million of Q1 17. The improvement was mainly explained by i) a revenue mix towards more value added products, manufacturing efficiencies, and lower raw material prices in the Consumer Goods Peru Business, ii) product formula optimization and lower raw material prices in the Aquaculture business, iii) higher contribution from the Food Service Platform, and iv) savings in procurement and manufacturing as a result of our efficiency program. 5. EBITDA amounted to S/ million (+12.7% YoY), and EBITDA Margin reached 12.3%, in line with Q1 17. Excluding one-time expenses associated to i) efficiency program and ii) the M&A transaction in Bolivia, EBITDA Margin added up to 12.8%. 6. Consequently, Net Income totaled S/103.8 million during Q1 18, (+34.1% YoY), while Net Margin reached 6.1%, (+1.1 p.p. YoY). As a result of the increase in profitability and lower Net Financial Expenses, Earnings per Share (EPS) increased from S/ in Q1 17 to S/ in Q1 18 (+34.4% YoY). On March 2018, Alicorp s General Shareholders Meeting approved a dividend payment of S/ million, resulting in S/ 0.24 per share to be distributed on May 25 th, Cash flow from Operations as of March 2018 was S/ 47.1 million, S/ million lower than the figure generated as of March 2017, mainly explained by the effect of the supply chain finance program implemented in Cash Flow from Investing Operations was S/ 29.8 million, compared to S/ million registered as of March 2017 explained by the income of held for investments of S/ 76.2 million, while CAPEX investments as of March 2018 was S/ 40.3 million. 8. As of March 2018, Net Debt decreased by S/ 31.9 million versus December 2017, reaching S/ million. Although Total Debt was S/ 1,830.6 million as of March 2018, (S/ million lower compared to December 2017), Net Debt decreased as a result of i) an efficient working capital management, ii) higher EBITDA contribution, and iii) lower financial expenses and FX losses. Net Debtto-EBITDA ratio slightly decreased from 1.00x as of December 2017 to 0.94x as of March

3 FINANCIAL INFORMATION FINANCIAL HIGHLIGHTS (In PEN million) Q Q YoY Q QoQ Revenues 1, , % 1, % Gross Profit % % Operating Profit % % EBITDA % % LTM EBITDA % % Net Income % % Earnings per Share (EPS) % % Current Assets 3, , % 3, % Current Liabilities 2, , % 2, % Total Liabilities 4, , % 4, % Working Capital % % Cash and Cash Equivalents % 1, % Total Financial Net Debt , % % Current Debt % % Non-Current Debt , % % Shareholders' Equity 2, , % 2, % RATIOS Gross Margin 27.6% 26.3% 1.3 p.p. 28.5% -0.9 p.p. Operating Margin 10.1% 9.3% 0.8 p.p. 10.5% -0.4 p.p. EBITDA Margin 12.3% 12.0% 0.3 p.p. 12.3% 0.0 p.p. Current Ratio 1.10x 1.09x 0.9% 1.16x -5.2% Net Debt-to-EBITDA x 1.35x -30.4% 1.00x -6.0% Leverage Ratio x 1.52x 0.0% 1.45x 4.8% 1. Earnings Per Share is defined as net income divided by common stock in a dilutive basis 2. Working Capital is defined as Current Assets minus Current Liabilities 3. Net Debt to EBITDA is defined as Total Financial Debt minus Cash and Cash Equivalents divided by EBITDA for the last twelve months 4. Leverage Ratio is defined as Total Liabilities divided by Shareholders Equity 3

4 II. INCOME STATEMENT CONSOLIDATED REVENUE During Q1 18, Consolidated Revenue reached S/ 1,710.7 million, a 10.1% increase YoY. Across all business in Peru, Revenue and Volume increased 7.7% YoY and 4.9% YoY respectively. International Revenue and Volume, across all business, increased 13.5% YoY and 25.2% YoY, respectively. During the quarter, International Revenue represented 41.7% of Consolidated Revenue, compared to 40.4% in Q1 17. Consolidated Revenue and Gross Margin (PEN Million) 1,787 1,825 1,783 1,554 1, % 27.0% 28.8% 28.0% 27.6% Q1 17' Q2 17' Q3 17' Q4 17' Q1 18' The Consolidated Revenue increase during Q1 18 was mainly explained by: i) a 11.8% YoY increase in the Consumer Goods Peru business due to growth from existing innovations and from our commercial strategy redesign for the economic segment, mainly in our core categories, and ii) a 35.0% YoY increase in the Aquaculture business mainly as a result of gaining market share in the Ecuador s shrimp feed market, coupled with an expansion within the market. Furthermore, the main contributors to higher Q1 18 Consolidated Revenue were the Shrimp Feed platform (+S/ million YoY), the Fish Feed platform (+S/ 10.1 million YoY) and the following categories: i) Canned tuna, which was launched in Q2 17 (+S/ 15.3 million YoY), ii) Sauces (+S/ 10.4 million YoY), iii) Laundry detergent (+S/ 6.3 million YoY), and iv) Edible Oils (+S/ 4.9 million YoY). GROSS PROFIT Gross Profit reached S/ million in Q1 18, an increase of 15.3% compared to Q1 17, mainly explained by a higher contribution of: i) the Consumer Goods Peru business (+18.2% YoY), ii) the Aquaculture business (+44.4% YoY), and iii) the B2B business (+10.7% YoY). Gross Margin reached 27.6% during Q1 18, an increase of 1.3 p.p. YoY. International Revenue (Q1 18') Argentina Brazil 14.4% 15.2% Others 7.9% 21.4% Chile Ecuador 41.1% S/ million 4

5 OPERATING INCOME AND EBITDA Operating Income reached S/ million in Q1 18, compared to the S/ million reported in Q1 17. Operating Margin reached 10.1%, an increase of 0.7 p.p. YoY. SG&A Expenses Breakdown (%) 17.0% 15.2% 16.1% 16.3% 17.2% 7.5% 6.7% 7.0% 6.9% 8.1% In Q1 18, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) increased by S/ 23.6 million reaching S/ million (+12.7% YoY) with an EBITDA Margin of 12.3%, in line with the Margin for Q % 8.5% 9.1% 9.4% 9.1% Q1 17' Q2 17' Q3 17' Q4 17' Q1 18' General & Administrative Selling Excluding one-time expenses associated to i) efficiency program and ii) the M&A transaction in Bolivia, EBITDA Margin added up to 12.8%. NET FINANCIAL EXPENSES During Q1 18, Net Financial Expenses reached S/ 10.0 million, a decrease of S/ 7.9 million YoY, explained by the Alicorp s liability management program. Additionally, as a result of its Hedging Strategy, Alicorp managed to minimize losses from currency exchange despite higher volatility NET INCOME EBITDA and EBITDA Margin (PEN Million) % 13.6% 13.9% 12.3% 12.3% Q1 17' Q2 17' Q3 17' Q4 17' Q1 18' Net Income totaled S/ million during Q1 18, an increase of S/ 26.4 million compared to the S/ 77.4 million reported in Q1 17 mainly as a result of the profitability s increase and the Net Financial Expenses decrease. Earnings per Share (EPS) for Q1 18 reached S/ 0.121, higher than the S/ reported during Q Earnings Per Share - EPS (PEN) Q1 17' Q2 17' Q3 17' Q4 17' Q1 18' 5

6 RESULTS BY BUSINESS SEGMENT CONSOLIDATED CONSUMER GOODS During Q1 18, Consolidated Consumer Goods Revenue increased 2.3% YoY, while Volume increased 4.8% YoY. EBITDA reached S/ million in Q1 18, a 7.9% increase YoY, while EBITDA Margin reached 13.3% during Q1 18, an increase from the 12.6% reported in Q % Consolidated Consumer Goods Revenue & EBITDA Margin (PEN Million) % 14.0% 12.4% 12.9% 13.3% Revenue and Volume from the Consumer Goods Peru business reached S/ million (+11.8% YoY) and thousand tons (+10.1% YoY). This was mainly Q1 17' Q2 17' Q3 17' Q4 17' Q1 18' Q1 18' explained by a higher Revenue contribution from the following categories: i) our new Canned tuna category, under the Primor brand equity, ii) Laundry detergents, backed on the recovery of domestic demand, iii) Sauces, due to the capitalization of marketing initiatives and change in the revenue mix, iv) Pasta, as a result of the increase in promotional campaigns, v) Edible Oils, as a result of the strategies implemented to increase our presence in the economic segment, vi) Cookies & Crackers, due to the efficiencies accomplished after the commercial strategy redesign, and vii) Softeners, driven by product launches and portfolio innovations. During this quarter, the aggregate markets of the Consumer Goods Peru division core categories (Edible Oils, Pasta and Laundry Detergents) decreased by 2.8% YoY in a consolidated basis. This decline was driven primarily by a decrease in the Edible Oils market (-4.0% YoY) and the Pasta market (-3.0% YoY). 585 Consumer Goods Peru Revenue & EBITDA Margin (PEN Million) % 19.8% 19.7% 17.4% 18.7% 19.5% Nevertheless, Alicorp s commercial and revenue management strategies resulted in an equal or a higher volume share in 13 out of 19 categories (including sub categories). Among these the following can be Q1 17' Q2 17' Q3 17' Q4 17' Q1 18' Q1 18' highlighted: i) Canned tuna, with an increase of 8.4 p.p. YoY, under the Primor megabrand, launched in Q2 17 ; ii) Stain Remover, with an increase of 5.6 p.p. YoY, driven by market segmentation towards liquid presentations; iii) Softeners, with an increase of 5.0 p.p. YoY, driven mainly by innovation into the Bolivar portfolio; and iv) Tomato Sauce, with an increase of 4.8 p.p. YoY, under the Don Vittorio and Alacena brand. 6

7 Consumer Goods Peru EBITDA reached S/ million, a 13.3% increase compared to the S/ million reported in Q1 17, while EBITDA Margin was 19.5%, a slightly increase YoY. These profitability results were explained by i) an increase of 1.9 p.p. YoY in Gross Margin, as a result of our Revenue management strategy and design-to-value initiatives, offset by ii) an increase in SG&A expenses, mainly driven by administrative expenses. Moving into Consumer Goods International business, Revenue in PEN and volume decreased by 15.8% and 4.8% YoY respectively. EBITDA Margin was -2.2%. Concerning Argentina, Revenue in local currency increased by 8.9% YoY, while Volume decreased by 4.9% YoY. Lower Volume was mainly explained by i) a contraction of the consumer goods markets, ii) a shifting trend in the consumer behavior, and iii) changes in volume mix. Revenue in Peruvian Soles, decreased by S/ 18.7 million (-14.8% YoY) as a result of a close to % YoY currency depreciation, while EBITDA increased by S/ 3.4 million compared to Q % Consumer Goods International Revenue & EBITDA Margin (PEN Million) 2.6% % 0.0% % -2.2% Q1 17' Q2 17' Q3 17' Q4 17' Q1 18' Q1 18' Regarding Brazil, Revenue in local currency decreased by 13.6% YoY. This decline was mainly driven by i) a decrease in non-core products revenue, such as achocolatado and premixes, due to higher competition from retail own brands, ii) the discontinued sales of third parties products, and iii) the increase of tax sales in Espiritu Santo. In the other hand, Alicorp managed to increase its Value share in the pasta category by 3.3 p.p. YoY in Brazil s Area II which includes Minas Gerais, Espiritu Santo and Rio de Janeiro suburbs. This capture of market share occurs in a context where pasta market grows by 0.3% despites consumption trends towards economic products. Revenue in Peruvian Soles, decreased by S/ 21.9 million (-17.6% YoY). With regard to the Andean Region, Revenue and Volume in Bolivia reached S/ 8.6 million and 2.1 thousand tons, a decrease of S/ 2.2 million and 0.4 thousand tons YoY. This was mainly explained by higher sell-in inventory levels due to the reduction of lead time in the logistic process. However, the final consumer supply remained stable. EBITDA reached S/ 1.3 million, while EBITDA Margin was 15.3%, a 7.3 p.p. decrease compared to the Margin reported in Q1 17, was due to non-recurring expenses. Revenue and Volume in Ecuador decreased 15.6% and 10.3% YoY, respectively, reaching S/ 10.3 million and 1.2 thousand tons. Revenue decrease was mainly explained by the renegotiation of our client commercial conditions. EBITDA reached S/ 1.3 million, while EBITDA Margin was 12.8%, an increase of 8.9 p.p. YoY, mainly explained by an increase of 15.6 p.p. YoY in gross margin, partially offset by higher SG&A expenses. 7

8 B2B Revenue and Volume reached S/ million (+3.3% YoY) and thousand tons (+0.04% YoY) in Q1 18. EBITDA reached S/ 31.5 million, a decrease of S/ 1.7 million compared to Q1 17, while EBITDA Margin totaled 9.0%, a decrease of 0.8 p.p. 353 B2B Revenue & EBITDA Margin (PEN Million) Revenue and Volume from the Bakery platform reached S/ million (+3.5% YoY) and 90.9 thousand tons (-0.01% YoY). Lower Volume was explained by a 9.3% 12.4% 8.5% 11.8% 8.7% 9.0% Q1 17' Q2 17' Q3 17' Q4 17' Q1 18' Q1 18' decrease in the Industrial Flours category (-1.0% YoY) which resulted from high inventory levels in wholesalers. This effect was almost offset by the increase in volume of Margarines (+19.2% YoY) and Industrial Lard (+6.3% YoY) due to a larger client base. EBITDA reached S/ 8.8 million (-27.5% YoY), while EBITDA Margin reached 5.6%, a decrease of 2.4 p.p. YoY. This decrease was mainly explained by higher logistic costs associated with the increase of our storage capacity. Regarding the Food Service platform, Revenue amounted to S/ million and Volume reached 30.4 thousand tons, an increase of 3.7% and 2.2% YoY, respectively. The increase in Revenue and Volume was driven by Bulk Oils (+8.7 and 8.2% YoY) and Industrial Sauces (+15.0 and 16.9% YoY). In turn, the growth in Bulk Oils was driven by the change of certain distributors which resulted in the recovery of several clients in the northern sector, while growth in Industrial Sauces was driven by the promotion strategy of the Alpesa brand outside Lima region. EBITDA reached S/ 22.4 million, an increase of 28.9% YoY, while EBITDA Margin was 16.5%, an increase of 3.2 p.p. YoY, mainly explained by a higher gross margin (+4.4 p.p.), which, in turn, was a result of revenue mix and lower raw material prices. Finally, Revenue and Volume from the Industrial Clients platform decreased 0.4% and 5.6% YoY respectively. Revenue decrease was driven by Bulk Oils Volume decrease (-22.8% YoY) as a result of the increase in prices, partially offset by Revenue increase of Industrial Lard (+15.5 YoY) and Industrial Flour (+13.2 YoY) explained by spot sales (one-time). 8

9 AQUACULTURE Revenue and Volume reached S/ million (+35.0% YoY), and thousand tons (+44.5% YoY) in Q1 18. This increase was mainly explained by i) a revenue mix towards more value added products, due to several product launches made in the previous quarters, such as Nicovita and Salmofood ad hoc diets, ii) all-time high market share in Ecuador and Chile, and iii) the expansion within the market which was driven by a higher international demand for Ecuadorian shrimp. EBITDA reached S/ 63.0 million, an increase of 40.4% compared to Q1 17, while EBITDA Margin totaled 13.0%, higher than the 12.5% reported in Q1 17. This increase was mainly explained by an improvement of 1.4 p.p. YoY in gross margin as a result of: i) product formula optimization, ii) lower raw material s prices, and iii) efficiencies in Selling and Distribution Expenses % Aquaculture Revenue & EBITDA Margin (PEN Million) % 16.6% % 13.1% 13.0% Q1 17' Q2 17' Q3 17' Q4 17' Q1 18' Q1 18' 9

10 III. BALANCE SHEET ASSETS As of March 2018, Total Assets were S/ 42.4 million lower compared to December 2017, as a result of a decrease in Current Assets of S/ 54.9 million. This was partially offset by an increase in Non-Current Assets of S/ 12.5 million. The decrease in Current Assets was mainly explained by a decrease of i) Cash and Cash Equivalents and ii) Other Financial Assets. Cash and Cash Equivalents decreased from S/ 1,043.4 million as of December 2017 to S/ million as of March Accounts Receivable decreased from S/ million as of December 2017 to S/ million as of March LTM Days Receivable Outstanding were 48.8 days as of March 2018, in line with the days registered at December Inventories increased from S/ million as of December 2017 to S/ million as of March Days of LTM Inventory Outstanding decreased from 63.1 days as of December 2017 to 62.0 days as of March Net Property, Plant and Equipment decreased S/ 9.8 million, from S/ 1,865.6 million as of December 2017 to S/ 1,855.8 million as of March 2018, mainly due to a lower CAPEX compared to the ongoing depreciation of the asset base. LIABILITIES As of March 2018, Total Liabilities increased S/ 54.1 million, mainly due to higher Current Liabilities partially offset with a lower Non-Current Financial Liabilities. Current Liabilities increased S/ million, mainly due to an increased of S/ million in Other Accounts Payable, explain by S/ million in dividends to be distributed on May This increase of Other Account Payable was offset with a decreased of S/ 59.7 million in Current Financial Liabilities. The LTM Days Payable Outstanding decreased from days as of December 2017 to days as of March Non-Current Liabilities decreased by S/ 53.9 million, mainly due to lower Financial Liabilities of S/ 47.2 million as a result of Alicorp s liability management program. Total Current Financial Debt as of March 2018 was S/ million, S/ 61.2 million lower compared to December Total Non-Current Financial Debt as of March 2018 was S/ million, amounting to 51.3% of the Total Financial Debt, compared to the 50.9% as of December

11 As of March 2018, the currency mix of the Financial Debt after hedging operations was expressed as follows: i) 96.5% in Peruvian Soles, ii) 2.7% in U.S. Dollars, and iii) 0.8% in Brazilian Reals. However, only 0.03% of the Total Debt has real FX exposure to the USD/PEN exchange rate fluctuation. Total Debt duration closed at 3.00 years as of March 2018, compared to the 2.95 years registered as of December Long-Term Debt duration as of March 2018 was 4.06 years. During this quarter, 88 foreign exchange forward agreements were negotiated in order to cover net cash flow exposure. Currently, the majority of liabilities are fixed-rate, either direct or through derivative transactions. EQUITY Shareholders Equity decreased by S/ 96.6 million, from S/ 2,900.3 million as of December 2017 to S/ 2,803.7 million as of March 2018, primarily due to S/ million in dividends to be distributed on May 2018, partially offset by Net Income contribution of S/ million. 11

12 IV. CASH FLOW STATEMENT OPERATING ACTIVITIES As of March 2018, cash flow from operations was S/ 47.1 million, S/ million lower compared to the same period of Q1 17 figures were boosted by the supply chain finance program implemented in INVESTING ACTIVITIES Cash flow from investing activities as of March 2018 was S/ 29.8 million; S/ 45.1 million higher compared to the same period of Total amount disbursed for CAPEX was S/ 40.3 million, which was S/ 21.0 million higher than the Q1 17. Key investments were allocated towards: i) improving our production capabilities in Consumer Goods Peru and B2B businesses, and ii) increasing the installed capacity for the Shrimp platform. Those investments were offset by the income of held for Investments of S/ 76.2 million. FINANCING ACTIVITIES Cash flow used in financing activities as of March 2018 totaled S/ million, S/ million lower when compared to the income of S/ 7.0 million as of March 2017, mainly due to a decrease in the Total Debt. LIQUIDITY AND SOLVENCY RATIOS The current ratio (defined as Total Current Assets/Total Current Liabilities) increased from 1.16x as of December 2017, to 1.10x as of March The leverage ratio (defined as Total Liabilities/Total Shareholder s Equity) increased from 1.45x as of December 2017 to 1.52x as of March 2018, mainly due to higher Current Liabilities. The Net Debt-to- EBITDA ratio decreased from 1.00x as of December 2017 to 0.94x as of March 2018, due to a Net Debt reduction of S/ 31.9 million and an increase of the LTM EBITDA of S/ 23.6 million Liquidity and solvency Ratios Q1 17' Q2 17' Q3 17' Q4 17' Q1 18' Current Ratio Leverage Ratio Net Debt-to-EBITDA ratio 12

13 V. RECENT EVENTS PRODUCT S RESEARCH & DEVELOPMENT In the Consumer Goods Peru business, 4 products were launched during this quarter. In the Laundry category, the new 150gr format of Bolivar Evolution was launched in order to complete the Evolution portfolio. Likewise, in the Stain Remover category, a new 250gr format of Opal Quitamanchas doypack was launched, aiming to complement our product portfolio and strengthen the brand equity. In addition, in the Softener category, the new vanilla & caramel fragrance was launched under the Bolivar megabrand, in order to strengthen the brand position. In the Powdered Juice category, a strawberry drinkable jelly was launched under the Negrita brand, in order to increase the naturalness of the brand. In the Consumer Goods International business, a new format of Molino Natural snack was launched under the Okebon brand, in order to strengthen the brand and increase its portfolio. In the B2B business, Alicorp revamped the Nicolini s Mashed Potato with a new package design. Likewise, in the Cooking Oils category, Friol Chifa was launched in order to expand our Food Service product portfolio. 13

14 In the Aquaculture business, a new Nicovita Classic was launched in order to expand our Ad Hoc product portfolio. Likewise, a new PRO diet formula with 0% fishmeal was launched aiming to optimize our Salmon feed diets. AWARDS AND SOCIAL RESPONSIBILITY During Q1 18, Boston Consulting Group included Alicorp within the 100 Multilatinas, list conformed by the most important LatAm Companies that have more than $1 billion annual revenues, grow faster than the regional average and operate beyond their national borders. In February 2018, Alicorp was recognized by MERCO Peru, with the first place in the Corporate Responsibility and Governance ranking in the Food sector and fifth place in the general ranking. 14

15 ABOUT ALICORP Alicorp is a leading Consumer Goods company headquartered in Peru, with operations in other Latin American countries, such as Argentina, Brazil, Chile, Ecuador, and exports to other countries. The Company focuses on three core businesses: (1) Consumer Products (food, personal and home care products), in Peru, Brazil, Argentina, Ecuador, Colombia and Chile, among other countries, (2) B2B Products (industrial flour, industrial lard, pre-mix and food service products), and (3) Aquaculture (fish and shrimp feeding). 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. DISCLAIMER This Earnings Report may contain forward-looking statements concerning recent acquisitions, its financial and business impact, management s beliefs and objectives with respect thereto, and management s current expectations for future operating and financial performance, based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words anticipates, may, can, plans, believes, estimates, expects, projects, intends, likely, will, should, to be, and any similar expressions or other words of similar meaning are intended to identify those assertions as forward-looking statements. It is uncertain whether the events anticipated will transpire, or if they do occur what impact they will have on the results of operations and financial condition of Alicorp or of the Consolidated Company. Alicorp does not undertake any obligation to update the forward-looking statements included in this press release to reflect subsequent events or circumstances. 15

16 ALICORP S.A.A. Assets Current Assets Notes March December Liabilities and Shareholders Equity Current Liabilities Notes March December Cash and Cash Equivalents 2 963,727 1,043,381 Other Financial Liabilities , ,280 Other Financial Assets 3 126, ,012 Trade Account Payables 12 1,480,374 1,492,982 Trade Account Receivables, Net 4 955, ,672 Other Account Payables , ,889 Other Account Receivables, Net 5 102,093 74,073 Account Payables to Related Parties Account Receivables from Related Parties Provisions 37,780 33,822 Advances to Suppliers 42,827 45,033 Current Income Tax 72,760 51,794 Inventories 6 965, ,042 Provision for Employee Benefits , ,066 Biological Assets 0 0 Total Current Liabilities 2,931,979 2,823,965 Current Income Tax - Asset 13,984 13,242 Other non financial assets 34,880 27,127 Assets classified as held for sale 29,008 25,125 Non-Current Liabilities Total Current Assets 3,234,780 3,289,719 Other Financial Liabilities , ,979 Other Account Payables 0 0 Non-Current Assets Account Payables to Related Parties 0 0 Other Financial Assets 3 381, ,103 Deferred Income Tax Liabilities 375, ,189 Investments in associates 7 15,890 15,887 Provisions 6,616 6,693 Accounts Receivable 4 29,389 29,534 Provision for Employee Benefits 14 2,462 5,884 Other Account Receivables 5 47,232 46,946 Biological Assets Total Non-Current Liabilities 1,337,869 1,391,745 Property, Plant and Equipments, Net 8 1,855,806 1,865,624 Total Liabilities 4,269,848 4,215,710 Intangible Assets, Net 9 547, ,882 Consolidated Statement of Financial Position As of March 31, 2018 and December 31,2017 (in thousands of Peruvian Soles) Deferred Tax 105,463 97,862 Sharedholders' Equity Non - Current, Current Tax Asset 6,378 6,925 Share Capital , ,192 Goodwill , ,626 Investment Shares 15 7,388 7,388 Total Non-Current Assets 3,838,789 3,826,276 Reserves , ,227 Retained Earnings 1,542,486 1,644,380 Other Shareholders' Equity Reserves 225, ,841 Equity Attributable to Owners of the Company 2,787,730 2,885,028 Non-Controlling Interests 15,991 15,257 Total Shareholders' Equity 15 2,803,721 2,900,285 TOTAL ASSETS 7,073,569 7,115,995 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 7,073,569 7,115,995 16

17 ALICORP S.A.A. Consolidated Statement of Comprehensive Income For the Quaters Ended March 31, 2018, 2017 (in thousands of Peruvian Soles) Notes For the Quarter Ended March 31, 2018 For the Quarter Ended March 31, 2017 For the cumulative period Starting on January 1 and Ending March 31, 2018 For the cumulative period Starting on January 1 and Ending March 31, 2017 Revenue Other Revenues Net Sales 16 1,710,657 1,554,400 1,710,657 1,554,400 Cost of Sales 16-1,239,226-1,145,542-1,239,226-1,145,542 Gross Profit (Loss) 471, , , ,858 Selling and Distribution Expenses -155, , , ,358 Administrative Expenses -137, , , ,000 Profit (loss) on the disposal of financial assets measured at amortized cost Other Operating Income 4,619 4,721 4,619 4,721 Other Operating Expenses -9,634-5,969-9,634-5,969 Other income (Expenses) , ,476 Operating Profit (Loss) 172, , , ,728 Financial Income 17 18,616 9,862 18,616 9,862 Financial Expenses Exchange differences on translating foreign operations ,458-33,396-38,458-33, , ,329 Share in Profits from Associates Profit (Loss) arising from the Difference between the Book Value and Fair Value of the Financial Assets Reclassified measured at Fair Value Profit (Loss) before Income Tax 151, , , ,949 Income Tax Expense -47,666-40,524-47,666-40,524 Profit for the Year from Continuing Operations 103,823 77, ,823 77,425 Profit (Loss) for the Year from Discontinued Operations Profit (Loss) for the Period/Year (Net Value) 103,823 77, ,823 77,425 Net Profit (Loss) attributable to: Owners of the Company 103,205 76, ,205 76,759 Non-Controlling Interests Net Earnings (Loss) for the Period/Year 103,823 77, ,823 77,425 Basic (cents per share): Earnings per Share Capital in Continuing Operations Earnings per Share Premium in Continuing Operations Earnings per Share Capital in Discontinued Operations Earnings per Share Premium in Discontinued Operations Earnings per Share Earnings per Share Premium Diluted (cents per share): Earnings per Share Capital in Continuing Operations Earnings per Share Premium in Continuing Operations Earnings per Share Capital in Discounted Operations Earnings per Share Premium in Discounted Operations Earnings per Share Capital Earnings per Share Premium

18 ALICORP S.A.A. Consolidated Statement of Cash Flows Direct Method For the Periods Ended March 31, 2018 and 2017 (in thousands of Peruvian Soles) CASH FLOW FROM OPERATING ACTIVITIES Collections from (due to): Notes For the cumulative period For the cumulative period Starting on January 1 and Starting on January 1 and Ending March 31, 2018 Ending March 31, 2017 Sales of Goods and Services Offered 1,722,070 1,601,019 Fees 0 0 Royalties, commissions, and other income from ordinary activities 0 0 Interests and Returns Received (not included under Investment Activities) 0 0 Income Tax Reinbursement 0 0 Dividends Received (not incluided under Investment Activities) 0 0 Other Operating Collections 37,416 39,689 Payments to (due to): Suppliers of Goods and Services -1,399,006-1,138,514 Salaries -247, ,146 Income Taxes Paid -44,697-8,857 Interests and Returns (not incluided under Financing Activities) 0 0 Dividends (not included under Financing Activities) 0 0 Royalties 0 0 Other Operating Payments -5,884-17,052 Other Payments -15,148-4,426 Net Cash Generated by Operating Activities 47, ,713 CASH FLOW FROM INVESTMENT ACTIVITIES Collections to (due to): Reinbursement from Advanced Loans and Loans to Third Parties 0 0 Repayments by Related Parties 0 0 Sale of Financial Instruments (Debt or Equity) to other Entities 0 0 Derivative Contracts (futures, options) 0 0 Net Cash Inflow on Disposal of Associate 0 0 Sale of Participation in Joint Venture, Net of Cash Disbursement 0 0 Sale of Investment Properties 0 0 Sale of Properties, Plant and Equipment 887 1,397 Sale of Intangible Assets 0 0 Proceeds from Disposal of Other Long Term Assets 0 0 Interests and Returns Received 8,758 2,801 Dividends Received 0 0 Income Tax Reinbursement 0 0 Other Cash Collected from Investment Activities 0 0 Payments to (due to): Advanced Payments and Loans to Third Parties 0 0 Loans to Related Parties 0 0 Purchase of Financial Instruments (Debt or Equity) from Other Entities 0 0 Derivative Contracts (futures, options) 0 0 Net Cash Outflow on Acquisition of Subsidiaries -11,209 0 Purchase of Participation in Joint Ventures, Net of cash acquired 0 0 Purchase of Participation in Non-Controlling Interests 0 0 Purchase of Investment Properties 0 0 Purchase of Properties, Plant and Equipment -40,273-19,307 Advance Payments for Work in Progress for Property, Plant and Equipment 0 0 Purchase of Intangible Assets -4, Purchase of Other Long Term Assets 0 0 Income Tax Paid 0 0 Other Cash Payments from Investment Activities 76,220 0 Net Cash (Used in) Generated by Investment Activities 29,797-15,270 CASH FLOWS FROM FINANCING ACTIVITIES Collections to (due to): Short Term and Long Term Loans 676, ,000 Loans to Related Parties 0 0 Issue of Ordinary Shares and Other Instruments of Equity 0 0 Sale of Treasury Shares 0 0 Income Tax Reimbursement 0 0 Other Cash Collected from Financing Activities 0 0 Payments to (due to): Short Term & Long Term Loan Amortizations -786, ,740 Loans from Related Entities 0 0 Liabilities from Leasing Operations 0 0 Repurchase of Shares (Treasury Shares) 0 0 Adquisition of other Participations under Share Capital 0 0 Interests and Returns -44,658-40,217 Dividends 0-5 Income Tax Paid 0 0 Other Cash Payments from Financing Activities ,021 Net Cash Used in Financing Activities -155,771 7,017 Increase (Decrease) Net Cash Flow, before Exchange Rate Changes -78, ,460 Effects of Exchange Rate Changes on the Balance of Cash Held in Foreign Currerncies ,997 Increase (Decrease) Net Cash Flow, after exchange rate changes -79, ,463 Cash and cash equivalents at the beginning of the year 1,043, ,483 Cash and cash equivalents at the end of the period 963, ,946 18