Fourth Quarter 2014 Consolidated Financial Statements

Transcription

1 Fourth Quarter 2014 Consolidated Financial Statements Revenues reached S/. 1,688.0 million, a 5.7% increase versus 4Q13; sales volume reached thousand tons, a 1.3% increase versus 4Q13. Gross Margin reached S/ an increase of 4.3% compared to 4Q13 INVESTOR RELATIONS CONTACT Fiorella Debernardi Baertl Corporate Financial Planning Director & IRO T: (511) F: (511) FDebernardiB@alicorp.com.pe Lima, Peru, February 16, Alicorp S.A.A. ( the Company or Alicorp ) (BVL: ALICORC1 and ALICORI1) announced today its unaudited financial results corresponding to the Fourth Quarter 2014 (4Q14). Financial figures are reported on a consolidated basis in accordance with International Financial Reporting Standards ( IFRS ) in nominal Peruvian Nuevos 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)). I. FINANCIAL HIGHLIGHTS During 4Q14, Net Sales reached S/. 1,688.0 million, a 5.7% increase versus 4Q13, mainly from revenue increases in sauces, panettones, cereals, softeners, edible oils, laundry soap, industrial margarines and shrimp and fish feed. International Revenues represented for the quarter 39.5% of Total Revenues due to strong sales in Ecuador and Chile. Sales volume reached thousand tons, a 1.3% increase versus 4Q13 Gross Profit totaled S/ million during 4Q14, a 4.3% increase compared to S/ million in 4Q13, explained by margin expansion in Consumer Goods Peru and Animal Nutrition Business. Gross Margin decreased from 28.6% in 4Q13 to 28.2% in 4Q14 due to higher COGS as a percentage of Sales EBITDA reached S/ million in 4Q14, a -27.6% decrease compared to the S/ million reported in 4Q13. EBITDA 4Q13 included extraordinary income of S/ million as a result of the Tax Benefits from REFIS program in Brazil. Without considering the REFIS effect from 4Q13 in Brazil and extraordinary costs generated by inventory 1

2 price adjustments in Peru and insurance uncollectable allowances in Argentina, the EBITDA would have increase 13.7% YoY. EBITDA margin decreased from 15.2% in 4Q13 (11.6% without REFIS effect) to 10.4% in 4Q14 (12.5% without considering extraordinary expenses) For 2014, Alicorp has focused on organic growth. As such, the Company was active in product innovation during this period, with the launching and re-launching of a variety of products: In Peru, in the consumer goods business, Alicorp launched two new varieties of spicy sauces, under the Alacena brand which are based on hot pepper and chili. In the same category, Alicorp launched three varieties of Premium Sauces for Pastas: Creamy Pesto, Pesto with Quinoa and Tomato with Artichoke, giving an innovative customer value proposition. In the home care category, the Company re-launched the laundry soap Marsella. In the same category, Alicorp launched a new variety of softeners, under the Bolivar brand. Additionally, in the confectionary category, Alicorp re-launched the Sayón classic candies portfolio with smaller packaging in four presentations. In the B2B products segment, Alicorp re-launched the Primavera portfolio which has more dairy flavor and provides an intense color in the cakes made by industrial customers. In Argentina, Alicorp launched three new varieties of hand soap under the Limol brand and in the pastas category, Alicorp launched a new product line under the Buonapasta brand to enter a new segment. Additionally, in the home care category, Alicorp re-launched its dishwashing portfolio under the Zorro brand and re-launched a new detergent under the same brand. In Brazil, Alicorp launched a new variety of pasta under the Santa Amalia brand. On December Alicorp issued S/. 116 million due on 2017, obtaining the lowest spread by a corporate issuer in Additionally, on January 2015 Alicorp issued S/. 500 million due on 2030, recorded as the highest amount issued in Nuevos Soles in the local capital market. Both issues were aimed at refinancing short-term liabilities reducing exposure to dollar denominated debt and extending the company s amortization profile. 2

3 FINANCIAL INFORMATION FINANCIAL HIGHLIGHTS (In millions of Peruvian Nuevos Soles) 4Q Q 2013 YoY 3Q 2014 QoQ Net Sales 1, , % 1, % Gross Profit % % Operating Profit % % EBITDA % % Last 12 Months EBITDA % % Net Earnings for the Period/Year % % Earnings per Share (Common Shares) % % Current Assets 2, , % 2, % Current Liabilities 2, , % 2, % Total Liabilities 4, , % 4, % Working Capital % % Cash and Cash Equivalents % % Total Financial Net Debt 2, , % 2, % Total Financial Debt 2, , % 2, % Bank Loans % 1, % Long-Term Debt 1, , % 1, % Shareholders' Equity 2, , % 2, % RATIOS Gross Margin 28.2% 28.6% -1.3% 28.5% -1.0% Operating Margin 7.9% 13.2% -39.9% 10.4% -23.9% EBITDA Margin 10.4% 15.2% -31.5% 12.3% -15.4% Current Ratio % % Net Debt to EBITDA % % Leverage Ratio % % 1. Net Debt to EBITDA is defined as Total Financial Debt minus Cash and Cash Equivalents divided by EBITDA for the last twelve months 2. Leverage Ratio is defined as Total Liabilities divided by Shareholders Equity 3. ROE is defined as Net Profit for the last twelve months divided by Average Shareholders Equity for the last twelve months 4. Last 12 month EBITDA includes S/.5 million generated by Global Alimentos before the acquisition 5. 4Q13 EBITDA margin of 15.2% includes extraordinary EBITDA generated by REFIS program. Without this extraordinary income EBITDA margin would have been 11.6% 3

4 II. INCOME STATEMENT Revenues During 4Q14, Revenues reached S/. 1,688.0 million, a 5.7% increase YoY. Revenues in Peru increased 1.7% YoY (6.0% in Consumer Goods Peru, -5.9% in B2B products and 0.8% in Animal Nutrition) and international revenues increased 12.4% YoY, mainly due to the increase in Animal Nutrition revenues. The main contributors to revenue growth in 4Q14 were the sales increase in the following categories: sauces, panettones, cereals, fabric softeners, edible oils, laundry soap, industrial margarines, shrimp and fish feed. During 2014 revenues reached S/. 6,284.7 million, an important increase of 8% YoY given the current slowdown in the countries were the Company operates. 1,598 Revenues & Gross Margin (PEN Million) 1,390 1,563 1,644 1, % 27.2% 27.7% 28.5% 28.2% 4Q13 1Q14 2Q14 3Q14 4Q14 During the quarter, international revenues represented 39.5% of total revenues, mainly due to higher revenues generated by Animal Nutrition Business in Ecuador and Chile. Organic Revenues continued to drive growth, representing 98.6% of Total Revenues generated during 4Q14. International Revenues (4Q14) Argentina 21.2% Chile 24.0% Brazil 19.5% Ecuador 30.4% Others 4.9% Gross Profit Gross Profit reached S/ million in 4Q14, a 4.3% increase compared to 4Q13 explained by margin expansion in Consumer Goods Peru and Animal Nutrition Business. Gross margin decreased slightly 1.3% YoY, reaching 28.2% during 4Q14 and remained stable during the year. Although there was a slowdown in Peru, Brazil and specially Argentina in 2014, Alicorp was able to reach Gross Profit of S/. 1,755.4 million, improving Gross Margin from 27.4% on 2013 to 27.9% on Alicorp has been able to maintain stable Gross Margins through its three Businesses as a result of the following 4

5 strategies: 1) a purchasing and hedging strategy that allows pricing flexibility, 2) Comprehensive management of costs in order to improve Alicorp s competitiveness, and, 3) Diversification of the product portfolio to include higher valueadded products. Operating Income and EBITDA Operating Income reached S/ million (7.9% of net sales) in 4Q14, a 36.5% decrease compared to 4Q13. This was mainly due to an extraordinary income registered in 4Q13 by REFIS program in Brazil and extraordinary expenses registered in 4Q14 by inventory price adjustments in Peru and insurance uncollectable allowances in Argentina. If we exclude REFIS extraordinary benefit from 4Q13 and extraordinary expenses from 4Q14, operating margin would have been 9.6% and 10.0% respectively, and the increase would have been 4.4%. During 2014, operating income reached S/ million, a decrease of 12.1% when compared to , % Revenues & EBITDA Margin (PEN Million) 1,390 1,563 1,644 1, % 10.5% 12.3% 10.4% 4Q13 1Q14 2Q14 3Q14 4Q14 In 4Q14, earnings before interest, taxes, depreciation and amortization (EBITDA) was S/ million due to lower operating income. This represented a 27.6% decrease compared to the S/ million reported in 4Q13, mainly due to the aforementioned effects. Without these events, EBITDA margin for 4Q14 and 4Q13 would have been 12.5% and 11.6% respectively. EBITDA reached S/ million in 2014, a reduction of 8.0% when compared to EBITDA of S/ million generated in Without considering REFIS extraordinary income EBITDA margin for 2013 and 2014 without extraordinary effects would have been 12.0% and 11.6% respectively. Net Financial Expenses During 4Q14, Financial Expenses increased S/ million YoY, due to an increase of gross debt of S/ million related to Global Alimentos Acquisition in 2Q14, Plant Reconstruction in Argentina and working capital requirements through the year and higher financial expenses related to commodity hedging. If we compare 4Q13 without extraordinary financial income related to REFIS program in Brazil of S/ million, Net Financial Expenses would have increased S/._244.4 million. For 2014, Alicorp was highly active on commodity hedging, undertaking many derivatives to offset volatility prices of wheat and soy bean oil. During 4Q14 the commodities crisis in Russia and Ukraine increased the volatility of wheat prices originating negative changes in the mark-to-market of the open positions of the derivatives which led to 5

6 significant higher financial expenses. Mark-to-market changes of commodities and financial hedging derivatives during 4Q14 generated losses of S/ million. During the following quarters part of these financial expenses could be reverted if the price of wheat returned to the expected levels from previous quarters. During 2014, currency exchange losses reached S/. 81 million, 5.1% lower than Mark-to-market changes generated non cash losses for S/. 257 million, which S/. 207 million were attributed to commodities derivatives. These losses showed a cash effect of S/. 74 million. The recovery of the US Economy has led to a devaluation of the PEN, Brazilian Reais and Pesos Argentinos which resulted in higher currency exchange losses for the quarter. During 4Q14 currency exchange losses reached S/ million, mainly due the currency devaluation of PEN against USD and to higher levels of accounts payable in USD. In order to reduce the net exposure to USD, the Company has issued bonds in PEN in the Peruvian Capital Markets and has announced a tender offer to repurchase part of the international bond issuance of US$ 450 million. Net Income Net Losses reached S/ million in 4Q14 compared to the S/ million reached in 4Q13. Net Income was materially affected by the following: i) financial expenses of S/.78.1 million; ii) currency exchanges losses of S/27.4 million and iii) derivatives losses of S/ million; all the aforementioned represent an increase of S/ million compared to 4Q13 During 2013 and 2014 Alicorp showed extraordinary income and expenses. Excluding extraordinary income of REFIS in 4Q13 and the sale of Pet Food Business in 2013, Net Income for 4Q13 and 2013 would have been -S/ million and S/ million respectively. Excluding extraordinary income and expenses for 4Q14 and 2014, Net income would have been S/ million and S/ million. Consequently, Earnings per Share (EPS) for 4Q14 reached S/ , lower than the S/._0.206 reported during 4Q13. Excluding extraordinary income and expenses, EPS for 4Q14 and 4Q13 would have been and respectively. EPS for 2014 and 2013 would have been and

7 Results by Business Segments Consumer Goods During 4Q14, Revenues remained stable (-0.8% YoY) in which Consumer Goods Peru increased 6.0% and Consumer Goods International decreased 11.8%. Consolidated Consumer Goods Operating Income reached S/ million, a 46.9% decrease YoY, due to the increase in SG&A expenses (which includes extraordinary expenses related to insurance uncollectable allowance) and the effect of tax benefits from REFIS program during 4Q13. Operating margin was 7.7% during 4Q14, lower than the 14.4% reported in 4Q13. EBITDA margin reached 10.9% (13.5% without the extraordinary expenses) during 4Q14, lower than the 16.4% (10.4% without tax benefits from REFIS program in Brazil) reported in 4Q % Revenues & EBITDA Margin (PEN Million) % 11.1% 12.5% 10.9% 4Q13 1Q14 2Q14 3Q14 4Q14 Consumer Goods Peru Revenues & EBITDA Margin (PEN Million) Revenues of Consumer Goods Peru reached S/ million in 4Q14, a 6.0% YoY growth compared to 4Q13. EBITDA margin was 15.9% an increase of 24.8% YoY. International revenues from Consumer Goods decreased % 12.5% 13.8% % 15.9% 11.8% YoY, mainly explained by lower revenues in 4Q13 1Q14 2Q14 3Q14 4Q14 Argentina. EBITDA margin decreased to 1.0% explained by lower operational income in Argentina. Argentina revenues decreased by S/ million explained by current recession in the country. EBITDA margin decreased to -23.1% explained by lower Gross Margin and the uncollectable insurance allowance in the last quarter. 361 Consumer Goods International Revenues & EBITDA Margin (PEN Million) % 3.3% 6.4% 3.9% 1.0% 4Q13 1Q14 2Q14 3Q14 4Q14 7

8 B2B Products Revenues reached S/ million in 4Q14, a 7.9% decrease compared to 4Q13, mainly due to revenues decrease in industrial flours and grains. Volume decreased 11.0% compared to 4Q13. In 4Q14, operating Income reached S/ million, 42.1% lower compared to 4Q13, mainly due to a lower gross Margin and higher SG&A. In 4Q14 Operating Margin reached 6.5% lower than the 10.3% reached in 4Q13 mainly explained by an inventory price adjustment. Consequently, EBITDA margin decreased to 8.7%. 405 Revenues & EBITDA Margin (PEN Million) % 10.7% 11.0% 13.0% % 4Q13 1Q14 2Q14 3Q14 4Q14 Animal Nutrition Revenues reached S/ million, an outstanding increase of 50.5% YoY, mainly due to an increase in revenues of shrimp feed in Ecuador, as driven by local sales growth strategy as well as the consolidation of the business strategy for the sales of fish feed in Chile. Volume increased 40.4% YoY and 10.7% compared to 3Q14. During 4Q14, Operating Income reached S/ million, a 34.0% increase YoY, mainly due to strong increase in sales and a stable gross margin. Operating Margin reached 12.4% while EBITDA margin reached 13.5% in 4Q Revenues & EBITDA Margin (PEN Million) % 15.4% 14.7% % 13.5% 4Q13 1Q14 2Q14 3Q14 4Q14 8

9 III. BALANCE SHEET Assets As of December 2014, Total Assets increased S/. 1,099.2 million compared to December 2013, mainly as a result of an increase in Current Assets of S/ million. This increase in Current Assets was mainly explained by higher Inventories, Other Non-Financial Assets and Other Accounts Receivables. Cash and Cash Equivalents increased from S/ million at December 2013 to S/ million at December Commercial Accounts Receivable increased from S/ million, at December 2013, to S/ million, at December Commercial Accounts Receivable turnover was 47.6 average days during 4Q14 versus 40.4 average days during 4Q13. Inventories increased from S/ million, as of December 2013, to S/ million, as of December 2014, mainly explained by the inventories of raw materials and finished products. The increase in raw materials was explained by higher purchases of wheat, soybean oil, and fishmeal, based on strategic opportunities. Inventory turnover average increased from 73.5 to 88.3 days from 4Q13 to 4Q14, respectively. Property, Plant and Equipment increased S/ million, from S/. 1,876.9 million, as of December 2013, to S/. 2,062.4 million, as of December 2014, mainly due to CAPEX from the following: 1) construction of a new pasta production line, 2) capacity increase of palm oil processing plant, 3) reconstruction of plant in Argentina, 4) new production line for cookies and crackers and 5) capacity increase of Inbalnor Plant. Liabilities As of December 2014, Total Liabilities increased S/. 1,148.5 million, mainly due to increases in short-term financial liabilities (explained by Global Alimentos acquisition, plant recovery in Argentina and higher working capital requirements). The increase in Current Liabilities was primarily due to the increase in Current Financial Liabilities for S/ million, and an increase of Commercial Accounts Payable in S/ million. Accounts Payable turnover increased 19.3 days, from 50.2 to 69.5 from 4Q13 to 4Q14, respectively. Long-term Liabilities decreased in S/ million, mainly due to the decrease of Deferred Taxes of S/ million and lower Other Accounts Payable of S/ million. Total Current Financial Liabilities as of December 2014, was S/ million. The Company has revolving credit lines 9

10 for import financing and working capital requirements. Total Non-current Financial Liabilities at December 2014 was S/. 1,762.2 million, representing 65.3% of Total Financial Debt. The currency mix for the financial debt, after the derivatives hedge, was: 57.2% in Peruvian Nuevos Soles, 26.2% in U.S. Dollars, 5.8% in Brazilian Reais, with the remaining 10.8% in Argentine Pesos. The duration of the Long-Term debt was 5.68 years. During 4Q14, Alicorp undertook 35 foreign exchange forward agreements in order to cover net cash flow exposure. Currently, the majority of liabilities are fixed-rate, either direct or through derivative transactions. The average rate of U.S. dollar-denominated debt was 3.57% during 4Q14. Equity Shareholders Equity decreased by S/ million, or 2.2%, from S/. 2,201.7 million at December 2013, to S/._2,152.4million at December 2014, primarily due to the effect of net profit of the year and the dividend payment in May. IV. STATEMENT OF CASH FLOWS Operating Activities As of December 2014, cash flow from operations was S/ million, higher than the S/ million for 2013, on the back of i) lower tax payments ii) Non-recurrent REFIS tax payment in Brazil in The Company s cash position totaled S/ million at December Investing Activities Cash flow used in investing activities for 2014 totaled S/ million, of which S/ million accounted for the acquisition of Global Alimentos and the remaining S/ million mainly for CAPEX. Furthermore, the aforementioned investment cash flow was lower than the S/ million reported for 2013, derived from the acquisition of Pastificio Santa Amalia and Industrial Teal. Financing Activities Cash flow from financing activities for 2014 was S/ million, compared to S/ million for 2013, primarily as a result of short-term loans taken for Global Alimentos acquisition and to fulfill working capital needs in the period. Existing bank loans are subject to certain debt restrictions, liquidity, profitability and a minimum Shareholders Equity. We no longer have financial covenants in the capital markets. Alicorp is fully compliant with the existing credit 10

11 requirements, which allows the Company to take on additional debt, if necessary. Liquidity and Leverage Ratios Current Ratio & Net Debt / EBITDA The Company s liquidity ratio decreased from 1.79x at December 2013, to 1.17x at December 2014, mainly due to higher short-term debt. The leverage ratio (Total Liabilities / Current Ratio Net Debt / EBITDA Equity) increased from 1.49x at December 2013 to 2.15x at December 2014, due to higher financial liabilities. In terms of the Net Debt / EBITDA ratio, this ratio increased from 2.47x 1.48 at December 2013 to 3.70x, at December 2014 as the result of higher debt incurred to finance Global Alimentos Acquisition, plant recovery in Argentina, working capital and 4Q13 1Q14 2Q14 3Q14 4Q14 as of result of a consolidated lower EBITDA due to the reduction in EBITDA contribution of Argentina. EBITDA for the trailing 12 months reached S/ million (Including EBITDA from recent acquisitions). V. RECENT EVENTS Alicorp s 3 rd Peruvian Corporate Bond Programme On December 17, 2014 Alicorp successfully returned to the Peruvian capital markets, issuing S/. 116 million in local bonds due December The three-year bullet bond obtained an interest rate of 4.97%, a spread of 79 basis points over the sovereign rate, representing the lowest spread obtained by a corporate issuer in The offering was oversubscribed by more than 2 times, and represented S/ million. Additionally, on January 2015 Alicorp issued S/. 500 million due 2030 at an interest rate of 7.0%, recorded as the highest amount issued in Nuevos Soles in the local capital market. These debt placements are encompassed in Alicorp s 3rd Peruvian Corporate Bonds Programme of S/. 1,000 million aimed at refinancing short term liabilities. Alicorp s 3 rd Peruvian Corporate Bonds Programme is currently rated AAA by both Apoyo & Asociados Internacionales and Pacific Credit Rating. The new bond programme is aligned with Alicorp s current strategy of setting an efficient debt structure with a diversified funding base. Funds from the issuance will be used exclusively for the refinancing of short term liabilities. 11

12 New Product Launches and Re-launches During 4Q14, Alicorp s Consumer Goods Business launched and re-launched many products in Peru, Brazil and Argentina. In the Consumer Goods Business in Peru, Alicorp launched two varieties of spicy sauces under the Alacena brand: Uchucuta and Sanka. These sauces have a hot pepper and chili base, and are made with ingredients from different regions of Peru, which makes them value added products. Additionally, in the sauces category, Alicorp launched three varieties of Premium Sauces for Pastas: Creamy Pesto, Pesto with Quinoa and Tomato with Artichoke. These products are made with unique and exclusive ingredients, giving an innovative proposition to the customers. In the home care category, Alicorp re-launched its laundry soap format under the Marsella brand in two presentations: Lemon and Floral. This product has new packaging and more attractive fragrance for the customers. In the same category, Alicorp launched a new variety of softeners, under the Bolivar brand. The objective of this launch is to consolidate the brand as one of the main competitors in the category. In the candies category, Alicorp re-launched the Sayón classic candies portfolio with smaller and more convenient packaging in four presentations. The objective of this re-launch is to consolidate the Sayón brand in the market of candies. In the juice powders category, Alicorp launched a new product line, under the Negrita brand: Frutísimos. This new product line contains Stevia natural sweetener, sugar and fruit pulp and will be available in four flavors. In the desserts category, Alicorp re-launched jelly under Negrita Brand in order to improve two of its main attributes: flavor and consistency. The objective of this re-launch is to consolidate the leadership of the brand in the region. In the B2B products segment, Alicorp re-launched the Primavera margarine portfolio emphasizing two of its main attributes: flavor and color. This portfolio has more dairy flavor and 12

13 provides an intense color in the cakes made by industrial customers. In Argentina, Alicorp launched three new varieties of beauty soap under the Limol brand. These products were launched in order to expand the beauty soap portfolio and consolidate it in the market. In the pasta category, Alicorp launched a new product line under the Buonapasta brand in five presentations. The objective of the launch is to enter a new segment and consolidate the offering of pasta in Argentina. In the home care category, Alicorp re-launched the dishwashing portfolio under the Zorro brand with a new and modern design and a box with greater resistance. The objective of this re-launch is to position Zorro as a cleaning brand that offers quality products at a fair price. Additionally, Alicorp launched a new detergent under the Zorro brand. In Brazil, Alicorp launched a new variety of pasta under the Santa Amália brand. Additionally, in the same category, the Company launched two varieties of pasta under the Santa Amalia brand. These new products are part of the campaign No coração dos Mineiros which aims to commemorate 60 years of Santa Amalia and have special packaging with pictures of historical monuments of Minas Gerais. 13

14 Awards and Social Responsibility Alicorp was recognized as one of the 5 companies with best reputation in Peru and the best in the food industry, by Merco (El Monitor Empresarial de Reputación Corporativa) and the local business newspaper Gestion. Additionally, Alicorp was recognized as one of the 5 companies with best social responsibility and best corporate practices in Peru. Alicorp s CEO, Paolo Sacchi, was included in the top ten of best managers in Peru Alicorp received the award of Marca Empleadora, by the second study Donde Quiero Trabajar, made by Laborum and Arellano Marketing, based on 8,000 surveys. Alicorp is in the 5 th place of the aforementioned ranking, which recognized the brand value as a result of good reputation with the employees, including actual and potential talent management During 2014, Alicorp kept innovating in product launches to meet clients needs, thist effort was recognized by the local newspaper El Comercio in some of the products launched for being the most commented of the year: Panettone Blanca Flor, Olive Oil under the Primor brand, Bolivar fabric softener, Don Vittorio ready-to-eat sauce and La colección maestra Don Vittorio. 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 23 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) Animal Nutrition (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 Press Release 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. Consolidated Quarterly Financial Statements Consolidated Statement of Financial Position As of December 31, 2014 and December 31, 2013 (in thousands of Peruvian Nuevos Soles) Assets Current Assets Notes December December Liabilities and Shareholders Equity Current Liabilities Notes December December Cash and Cash Equivalents 2 122,382 92,938 Other Financial Liabilities 9 1,125, ,175 Other Financial Assets 3 31,094 4,740 Trade Account Payables 1,005, ,223 Trade Account Receivables, Net 981, ,232 Other Account Payables , ,871 Other Account Receivables, Net 4 281, ,365 Account Payables to Related Parties 2,179 5,151 Account Receivables from Related Parties Provisions 15,200 14,117 Advances to Suppliers 45,538 35,531 Current Income Tax 10,370 2,593 Inventories 5 987, ,248 Provision for Employee Benefits 11 81,370 95,326 Biological Assets 0 0 Total Current Liabilities 2,345,426 1,209,456 Deferred Tax 108,705 61,967 Other non financial assets 157,891 12,112 Assets classified as held for sale 23,047 9,559 Non-Current Liabilities Total Current Assets 2,739,509 2,169,117 Other Financial Liabilities 9 1,814,782 1,762,184 Other Account Payables 10 98, ,597 Non-Current Assets Account Payables to Related Parties 0 0 Other Financial Assets 3 327, ,359 Deferred Income Tax Liabilities 362, ,431 Investments in associates 6 22,836 29,205 Provisions 3,006 8,265 Other Account Receivables 4 17,515 21,375 Provision for Employee Benefits 11 6,475 7,403 Property, Plant and Equipments, Net 7 2,062,404 1,876,942 Intangible Assets, Net 8 591, ,864 Total Non-Current Liabilities 2,285,419 2,272,880 Deferred Tax 95,027 89,067 Total Liabilities 4,630,845 3,482,336 Goodw ill 926, ,121 Total Non-Current Assets 4,043,771 3,514,933 Sharedholders' Equity Share Capital , ,192 Investment Shares 12 7,388 7,388 Reserves , ,903 Retained Earnings 12 1,052,934 1,146,756 Other Shareholders' Equity Reserves 12 62,093 30,645 Equity Attributable to Owners of the Company 2,139,045 2,192,884 Non-Controlling Interests 13,390 8,830 Total Shareholders' Equity 2,152,435 2,201,714 TOTAL ASSETS 6,783,280 5,684,050 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 6,783,280 5,684,050 16

17 ALICORP S.A.A. Consolidated Statement of Comprehensive Income For the Quaters Ended December 31, 2014, 2013 (in thousands of Peruvian Nuevos Soles) Notes For the Quarter Ended December 31, 2014 For the Quarter Ended December 31, 2013 For the cumulative period Starting on January 1 and Ending December 31, 2014 For the cumulative period Starting on January 1 and Ending December 31, 2013 Continuing Operations Revenue 1,688,039 1,597,533 6,284,653 5,818,297 Other Revenues Net Sales 1,688,039 1,597,533 6,284,653 5,818,297 Cost of Sales -1,211,784-1,140,807-4,529,275-4,224,270 Gross Profit (Loss) 476, ,726 1,755,378 1,594,027 Selling and Expenses -219, , , ,189 Administrative Expenses -101,445-82, , ,405 Profit (loss) on the disposal of financial assets measured at amortized cost Other Operating Income 22,986 98,043 35, ,779 Other Operating Expenses -44,197-42,787-56,906-54,919 Other income (Expenses) Operating Profit (Loss) 133, , , ,293 Financial Income 14 5,495 48,541 36,904 59,103 Financial Expenses Exchange differences on translating foreign operations ,681-40, , ,804-35,382-7,969-81,272-85,679 Share in Profits from Associates -4, ,227-1,496 Profit (Loss) arising from the Difference betw een the Book Value and Fair Value of the Financial Assets Reclassified measured at Fair Value -228,283-46, ,861-72,202 Profit (Loss) before Income Tax -204, ,908 43, ,215 Income Tax Expense 36,203-49,071-24, ,071 Profit for the Year from Continuing Operations -168, ,837 19, ,144 Profit (Loss) for the Year from Discontinued Operations , ,489 Profit (Loss) for the Period/Year (Net Value) -168, ,113 18, ,633 Net Profit (Loss) attributable to: Ow ners of the Company -169, ,725 17, ,856 Non-Controlling Interests , Net Earnings (Loss) for the Period/Year -168, ,113 18, ,633 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 December 31, 2014 and 2013 (in thousands of Peruvian Nuevos Soles) CASH FLOW FROM OPERATING ACTIVITIES Collections from (due to): Notes For the cumulative period Starting on January 1 and Ending December 31, 2014 For the cumulative period Starting on January 1 and Ending December 31, 2013 Sales of Goods and Services Offered 6,261,347 5,617,244 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 248, ,098 Payments to (due to): Suppliers of Goods and Services -5,116,766-4,641,590 Salaries -570, ,074 Income Taxes Paid -85, ,555 Interests and Returns (not incluided under Financing Activities) 0 0 Dividends (not included under Financing Activities) 0 0 Royalties 0 0 Other Operating Payments -348, ,298 Other Payments 0 0 Net Cash Generated by Operating Activities 388, ,825 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 10,302 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 9,315 47,176 Sale of Intangible Assets 0 83,878 Proceeds from Disposal of Other Long Term Assets 0 0 Interests and Returns Received 5,512 12,057 Dividends Received 2,892 3,558 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 -300, ,053 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 -323, ,691 Advance Payments for Work in Progress for Property, Plant and Equipment 0 0 Purchase of Intangible Assets -1,681-4,794 Purchase of Other Long Term Assets 0 0 Income Tax Paid 0 0 Other Cash Payments from Investment Activities 20, Net Cash (Used in) Generated by Investment Activities -587, ,343 CASH FLOWS FROM FINANCING ACTIVITIES Collections to (due to): Short Term and Long Term Loans 2,689,612 2,780,081 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 -2,144,948-2,436,201 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 -208, ,326 Dividends -102, ,550 Income Tax Paid 0 0 Other Cash Payments from Financing Activities 0-3,740 Net Cash Used in Financing Activities 233, ,264 Increase (Decrease) Net Cash Flow, before Exchange Rate Changes 34, ,254 Effects of Exchange Rate Changes on the Balance of Cash Held in Foreign Currerncies -5, Increase (Decrease) Net Cash Flow, after exchange rate changes 29, ,132 Cash and cash equivalents at the beginning of the year 92, ,070 Cash and cash equivalents at the end of the year 122,382 92,938 18