CORPORACION LINDLEY S.A. ANNOUNCES THIRD QUARTER 2014 RESULTS
Transcription
CORPORACION LINDLEY S.A. ANNOUNCES THIRD QUARTER 2014 RESULTS
Investor Relations Contact: Sebastian Peña +511-319-4000 [email protected] CORPORACION LINDLEY S.A. ANNOUNCES THIRD QUARTER 2014 RESULTS Lima, Peru, October 30, 2014 - Corporación Lindley S.A. (“Lindley” or “the Company”) announced today its unaudited results for the third quarter (“3Q14”) and nine months (“9M14”) period ended September 30, 2014. These results are reported on a consolidated basis and were prepared in accordance with International Financial Reporting Standards (“IFRS”). All figures in this report are expressed in nominal Nuevos Soles, unless otherwise noted. Numbers may not add up due to rounding. Key Figures (expressed in millions of Nuevos Soles) 3Q 2014 61.6 3Q 2013 58.5 % Change 9M 2014 203.1 9M 2013 199.9 % Change 5.4% Net Sales 496.1 458.7 8.2% 1603.8 1542.4 4.0% Gross Profit 153.4 135.0 13.6% 523.0 514.5 1.6% EBITDA* 67.4 74.7 -9.9% 251.7 269.6 -6.6% Volume (MUC) 1.6% *Adjusted EBITDA, see page 4. Highlights - Volume increased 5.4% in 3Q14, while on a year-to-date volume increased 1.6% driven by sparklings and water. Net sales increased 8.2% in 3Q14 and 4.0% year-to-date. Management Comments: During the third quarter, volume increased 5.4% and sales increased 8.2%, driven by growth in our main categories, both in single and multiserve packagings. Despite the negative effects due to the slowdown in the economy, we achieved positive volume performance, particularly in the provinces. This has led to an increase of 1.6% in year-to-date volume, and 4% in net sales. With the launch of a new Inca Kola flavor for the first time in the brand’s history, we expect this positive trend to continue towards the remainder of the year. EBITDA declined 9.9% during the quarter reaching S/. 67.4 million, mainly due to higher selling expenses from improvements in our sales and distribution capabilities. As we complete our investment plans, and newer infrastructure and technology replace older ones, we expect to capture operational efficiencie s that will allow for a positive growth trend in EBITDA for this franchise. EXCLUSIVE BOTTLER FOR PERU 1 Third Quarter 2014 Results October 30, 2014 Operating Overview - Volume increased 5.4% in 3Q14 compared to 3Q13, from 58.5 million unit cases to 61.6 million unit cases driven by higher volume in the sparkling and water categories. On a year-to-date basis, volume grew 1.6%. - Sparkling volume rose 3.3% during the third quarter, mainly driven by single serve formats and improving performance in the provinces compared to the same period of 2013. During the first nine months of the year, volume grew 0.5%. - Water volume grew 14.1% in 3Q14 and 7.4% on a year-to-date basis, continuing its positive trend. An effective price-point strategy and warmer temperatures compared to the prior year were key contributing factors. - Juices increased 9.2% in 3Q14 compared to the same period last year, mainly driven by good performance in family packagings, while on a year-to-date-basis it declined 2.9%. - Isotonics and hydrotonics declined 4.1% during the third quarter of the year and 5.5% year-to-date. Volume was impacted by a more aggressive pricing strategy for this category, which has resulted in positive sales growth. - Regionally, Lima represented 54% of the volume, while the Southern region represented 24%, the Northern region represented 15%, and the Center-Eastern region represented 7%. - The Lima region grew 3.3% during the quarter, while on a year-to-date basis it remained virtually flat. The Northern region posted 10.5% growth in 3Q14 and 8.4% in 9M14, partially due to a low comparison base in 2013. The Southern region grew 4.9% in the third quarter and 2.7% in 9M14. The Center-Easter region grew 10.2% during the quarter and 1.5% in 9M14. - The average price per unit case increased 2.6% during the quarter from S/. 7.84 to S/. 8.05. Year-to-date the average price reached 7.90, an increase of 2.3% compared to the same period of 2013. Financial Overview - Net sales increased 8.2% from S/. 458.7 million in 3Q13 to S/. 496.1 million in 3Q14, mainly driven by sales - - - - growth in the sparkling and water categories, in single serve and multiserve formats respectively. Year-todate net sales increased 4.0% from S/. 1,542.4 million in 9M13 to S/. 1,603.8. million in 9M14. Cost of sales grew 5.9% from S/. 323.7 million in 3Q13 to S/. 342.7 million in 3Q14, explained by higher volume sold, and increased 5.1% from S/. 1,027.9 million in 9M13 to S/. 1,080.8 million in 9M14. As a result, gross profit grew 13.6% from S/. 135.0 million in 3Q13 to S/. 153.4 million in 3Q14, while on a year-to-date basis, gross profit increased 1.6%. Selling expenses reached S/.103.8 million in 3Q14, a 4.8% increase compared to 3Q13, mainly as a result of higher personnel expenses, including incentive compensation to our sales force and depreciation of incremental market assets. Year-to-date, selling expenses increased 5.0% from S/. 301.3 million in 9M13 to S/. 316.3 million in 9M14 due to the same reasons mentioned above. Administrative expenses reached S/. 20.6 million in 3Q14 compared to S/. 13.3 million in 3Q13. The difference arises from a reversal of an accrued provision for incentive compensation that was made in 3Q13, thereby creating a low comparison base. Administrative expenses reached S/. 75.7 million in 9M14 compared to S/. 72.1 million in 9M13. Other operating income declined to S/. 15.5 million in 3Q14, mainly driven by temporarily decreasing the introduction of new bottles. This was in line with a strategic plan to maximize the use and rotation of our current returnable glass bottle stock in the market. Year-to-date Other operating income reached S/. 36.1 million. Other operating expenses increased from S/. 30.6 million in 3Q13 to S/. 33.4 million in 3Q14, mainly driven by higher raw material and inventory write-offs, partially offset by lower bottle sales expenses. Year-to-date, other operating expenses decreased from S/. 87.2 million in 9M13 to S/. 86.6 million in 9M14. EXCLUSIVE BOTTLER FOR PERU 2 Third Quarter 2014 Results October 30, 2014 - As a result, operating income reached S/.11.2 million in the third quarter of 2014 and S/. 80.5 million on a year-to-date basis. - Financial income excluding foreign exchange differences decreased S/. 5.2 million in 3Q14, explained by less interest earned due to lower outstanding balances of unused bond proceeds. - Financial expenses excluding foreign exchange differences decreased from S/. 30.6 million in 3Q13 to S/. 19.0 million in 3Q14. The share of interest expenses used to finance the construction of the Pucusana plant was capitalized in line with an IAS-23 requirement and is the main driver explaining the decrease. - The net foreign exchange difference reached S/. -45.8 million in 3Q14 compared to S/. -3.2 million in the same period of 2013 as a result of a 3.3% depreciation of the Nuevo Sol in the quarter. On a year-to-date basis, net foreign exchange difference reached S/. -46.4 million compared to S/. -105.4 million in 9M13. - Income tax in 3Q14 reached S/. 2.3 million compared to S/. 1.0 million in 3Q13, mainly explained by deferred taxes. - Net income in 3Q14 reached S/. -51.2 million compared to S/. -8.3 million in 3Q13, mainly impacted by the foreign exchange net loss from the depreciation of local currency in the quarter. Year-to-date net income reached S/. -38.3 compared to S/. -60.1 in the same period of 2013. - Adjusted EBITDA reached S/. 67.4 million in the third quarter of the year and S/. 251.7 million in 9M14. Balance Sheet Overview - Cash and short term investments reached S/. 88.7 million as of September 30, 2014 compared to S/. 387.5 million as of December 31, 2013 which included unused bond proceeds. The difference stems from the allocation of those proceeds for CAPEX scheduled payments during this year. - Trade Accounts Receivable increased S/. 7.9 million due to higher sales to distributors and clients. - Accounts Receivable from Related Parties decreased S/. 60.9 million, explained by a payment received from The Coca-Cola Company which took place during 2Q14 related to annual joint investments in market assets. - The current portion of Other Accounts Receivable declined S/. 5.0 million as advance payments were applied against accounts payable to suppliers. - Inventories decreased by S/. 34.3 million due to higher sales during this quarter and lower inventory targets for raw materials. - Net property, plant and equipment rose S/. 320.2 million, stemming from the execution of our capital expenditure plan during the year, mainly the Pucusana plant. - Current financial obligations declined S/. 20.6 million, explained by amortization and payment of financial leases and other short term debt. - Trade Accounts Payable decreased S/. 149.9 million compared to December 2013, as a result of payments to suppliers related to CAPEX. - Accounts Payable to related parties increased S/. 41.1 million, mainly due to purchase of concentrate from The Coca-Cola Company. - Other accounts payable increased S/. 67.6 million, as a result of accrued interest for bond coupon payments and year-end regulatory personnel benefits. - Long-term financial obligations rose S/. 48.3 million to S/. 1,690.7 million, explained by the Nuevo Sol depreciation during the third quarter which affected foreign currency denominated debt. - Retained Earnings decreased S/. 38.4 million, as a result of the year-to-date net loss. Cash Flow Overview - Cash and cash equivalents from operating activities reached S/. 196.6 million as of 3Q14 compared to S/. 61.2 million as of 3Q13, mainly explained by greater collections of trade account receivables and account EXCLUSIVE BOTTLER FOR PERU 3 Third Quarter 2014 Results October 30, 2014 receivables from related parties, an increase in trade accounts payable to suppliers, as well as a decrease in inventories from higher sales and lower inventory targets. - Cash and cash equivalents disbursed in investing activities was S/. -416.3 million as of 3Q14 compared to S/. -241.0 million in 3Q13. Variations stemmed from disbursements for capital expenditures during the year mainly allocated to the Pucusana plant and logistics improvements. - Cash and cash equivalents from financing activities reached S/. -79.1 million as of 3Q14. Variations resulted from payments of financial obligations and financial interest in 2014 compared to S/. 396.4 million as of 3Q13, explained by the proceeds generated from our 2023 bond issued in April 2013. - As of September 30, 2014, cash and cash equivalents reached S/. 88.7 million compared to S/. 486.5 million in 3Q13, as a result of the factors described above. Adjusted EBITDA Expressed in millions of Nuevos Soles 3Q 2014 3Q 2013 9M 2014 9M 2013 Net Income (51.2) (8.3) (38.3) (60.1) Income Tax 2.3 1.0 1.3 7.3 Loss/Gains from Derivatives 0.0 0.0 0.0 4.8 Net Financial Expense/Income (64.8) (28.5) (120.1) (177.5) Operating Income 11.2 19.2 80.5 105.3 Other Expenses (+) 33.4 30.6 86.6 87.2 Other Income* (-) 7.5 6.3 18.7 14.0 Employee Participation (+) (4.4) 0.0 0.0 0.0 Depreciation (+) 33.6 30.2 99.2 89.9 Amortization (+) 1.0 0.9 4.2 1.2 Adjusted EBITDA 67.4 74.7 251.7 269.6 *Excluding TCCC and sales of returnable glass bottles. Adjusted EBITDA represents net income plus (i) income tax, (ii) loss/gains from derivative financial instruments, (iii) net financial expense/income, (iv) other expenses, (v) employee participation and (vi) depreciation from cost of sales, administrative expenses and selling expenses and amortization, minus (vi) other operating income (excluding contributions from The Coca-Cola Company and sales of returnable glass bottles). Conference Call Information Third Quarter 2014 Earnings Conference Call Information Friday, November 7, 2014 10:00 a.m. Eastern Time 10:00 a.m. Lima Time Presenting in English: Mr. Fernando Gomes, Chief Financial Officer To access the call, please dial: 1-800-311-9401 from within in the U.S EXCLUSIVE BOTTLER FOR PERU 4 Third Quarter 2014 Results October 30, 2014 1-334-323-7224 from outside the U.S Conference ID Number: 47357 Corporación Lindley’s 3Q14 Results will be accompanied by a webcast presentation available at: http://www.videonewswire.com/event.asp?id=100779 A replay of this call will be available until Midnight ET November 14, 2014 To obtain a replay, please call: 1-877-919-4059 from within the U.S. 1-334-323-0140 outside the U.S. Passcode: 91045360 About Corporación Lindley S.A. Corporación Lindley S.A. is the only authorized bottler and distributor of trademarked brands from The Coca -Cola Company throughout Peru, including Coca-Cola and Inca Kola. The Company offers a wide range of non-alcoholic beverages consisting of sparkling soft drinks and non-carbonated beverages. Our SSD product portfolio is comprised of market-leading products such as Coca-Cola, the world's most recognized beverage brand, and Inca Kola, the leading SSD in Peru. In 1999, The CocaCola Co. acquired an equity stake in Corporación Lindley S.A.. In 2004, Corporación Lindley S.A. acquired its main competitor , Embotelladora Latinoamericana S.A., after which the Company became the exclusive bottler of the Coca-Cola brands in Peru. Corporación Lindley S.A. benefits from a strong brand recognition in the SSD market, a large and diversified product portfolio, a strong and exclusive distribution network, and high market penetration reaching mo re than 290,000 points of sale throughout the country. Our NCB products can be divided into four product categories: fruit-juice based beverages, bottled water (sparkling and still), isotonic and energy drinks. In addition, Corporación Lindley S.A. is a le ading manufacturer of fruit pulp in Peru used for the production of its own fruit-juice beverages and for export. Forward-Looking Statements This document may contain “forward-looking statements”. These forward-looking statements relate to Corporación Lindley (CL) and its Subsidiaries and their businesses, and are based on Lindley management´s good faith expectations regarding CL and its subsidiaries. Recipients are cautioned not to put undue reliance on such forward -looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside Lindley´s control, that could cause actual results of Lindley and its businesses to differ materially from such statements. C L in under no obligation, and expressly disclaims any intention or obligation, to update or alter any forward -looking statements, whether as a result of new information, future events or otherwise. EXCLUSIVE BOTTLER FOR PERU 5 Third Quarter 2014 Results October 30, 2014 Consolidated Income Statement For the quarters ended as of September 30, 2014 and 2013 (unaudited) 3Q 3Q 2014 2013 2014 2013 S/ .(000) S/ .(000) S/ .(000) S/ .(000) Net sales 496,103 458,688 1,603,803 1,542,424 Cost of sales (342,691) (323,685) (1,080,828) (1,027,906) Gross Profit 153,412 135,003 522,975 514,518 Selling expenses (103,781) (99,057) (316,333) (301,336) Administrative expenses (20,561) (13,271) (75,687) (72,113) Other operating income 15,513 27,166 36,127 51,455 (33,389) (30,594) (86,578) (87,246) Operating income 11,194 19,247 80,504 105,278 Financial income 13 5,239 2,044 9,618 Financial expenses (18,968) (30,574) (75,766) (76,891) Net Foreign exchange gain (loss) (45,830) (3,166) (46,412) (105,367) Income before tax (53,591) (9,254) (39,630) (67,362) Income tax 2,342 981 1,295 7,272 Net income (51,249) (8,273) (38,335) (60,090) Other operating expenses As of September 30, EXCLUSIVE BOTTLER FOR PERU 6 Third Quarter 2014 Results October 30, 2014 Consolidated Statement of Financial Position As of September 30, 2014 (unaudited) and December 31, 2013 (audited) September 30, December 31, 2014 2013 S/ .(000) S/ .(000) Cash and Short Term Investments 88,692 387,530 Trade accounts receivable, net 216,654 208,744 Accounts receivable from related parties 58,070 118,996 Assets Current assets Other accounts receivable and financial assets, net 40,023 45,066 Inventories, net 248,234 282,530 8,216 3,900 Prepaid tax 56,727 33,845 Total current assets 716,616 1,080,611 Prepaid expenses Non-current assets Trade accounts receivable, net 7,605 18,111 Other accounts receivable and financial assets, net 63,032 52,315 Investment properties, net 117,388 117,638 1,933,282 1,613,051 Property, plant and equipment, net Intangibles, net 2,346 7,370 Goodwill 305,555 305,555 Other assets 12,343 15,449 Total non-current assets 2,441,551 2,129,489 Total assets 3,158,167 3,210,100 EXCLUSIVE BOTTLER FOR PERU 7 Third Quarter 2014 Results October 30, 2014 Consolidated Statement of Financial Position As of September 30, 2014 (unaudited) and December 31, 2013 (audited) September 30, December 31, 2014 2013 S/ .(000) S/ .(000) 21,126 41,752 484,745 634,669 Accounts payable from related parties 77,657 36,559 Income tax and workers profit sharing 198 199 195,131 127,575 23,276 8,947 802,133 849,701 1,690,730 1,642,424 Trade accounts payable 2,711 8,186 Deferred income tax 65,204 68,977 2,560,778 2,569,288 580,981 580,981 Investment shares 71,966 71,966 Legal reserve 16,168 16,168 Other capital reserves (14,377) (9,288) Retained earnings (57,892) (19,508) 596,846 640,319 543 493 597,389 640,812 3,158,167 3,210,100 Liabilities and shareholders' equity Current liabilities Financial obligations Trade accounts payable Other accounts payable Current portion of derivative financial instruments Total current liabilities Financial obligations Total liabilities Shareholders' equity Capital and reserves attributable to shareholders of the parent Capital stock Non-controlling interest Total shareholders´equity, net Total liabiities and shareholders' equity EXCLUSIVE BOTTLER FOR PERU 8 Third Quarter 2014 Results October 30, 2014 Consolidated Statement of Cash Flows For the quarters ended as of September 30, 2014 and 2013 (unaudited) As of September 30, 2014 2013 S/ .(000) S/ .(000) (38,335) (60,090) Depreciation 103,775 94,942 Amortization 4,168 1,203 (1,592) (7,272) Reconciliation of net income to cash and cash equivalents provided by Operating activities Net income Plus (less) adjustments to net income of the year: Deferred income tax Gain from property, plant and equipment sales 74 Disposal of property, plant and equipment 5,879 Loss (gain) related to derivative financial instruments 22,522 (4,812) Various provisions and other 17,544 (18,688) Financial expenses 36,312 76,848 Exchange rate loss 46,112 102,280 196,384 184,485 Trade accounts receivable 2,849 (23,336) Accounts receivable from related parties 60,926 40,063 Other accounts receivable 7,272 (60,535) Inventories 30,757 (58,049) Prepaid expenses (3,418) (7,163) (165,582) 21,691 41,096 (13,686) Debits and credits for net changes in operating current assets and liabilities Decrease (increase) in operating assets Increase (decrease) in operating liabilities Trade accounts payable Accounts payable to related parties Other accounts payable 56,558 20,877 226,843 104,347 Interests payments (9,513) (22,781) Interests collection 2,328 9,618 Income tax payments (23,094) (29,999) Cash and cash equivalents, provided by operating activities 196,564 61,185 EXCLUSIVE BOTTLER FOR PERU 9 Third Quarter 2014 Results October 30, 2014 Consolidated Statement of Cash Flows For the quarters ended as of September 30, 2014 and 2013 (unaudited) As of September 30, 2014 2013 S/ .(000) S/ .(000) Investing Activities Collection from property sales, plants and equipment 10,057 25,642 Purchases of property, plant and equipment and investment properties (426,318) (266,644) Cash and cash equivalents used in investing activities (416,261) (241,002) 431 700,140 (32,346) (224,999) Financing Activities Banks and shareholder loans Payment of financial obligations Dividends payment (50,889) Payment of interests (47,226) (27,842) Cash and cash equivalents provided by (used in) financing activities (79,141) 396,410 Net increase (decrease) in cash and cash equivalents (298,838) 216,593 Cash and cash equivalents at the beginning of the year 387,530 269,955 End-of-period cash and cash equivalents 88,692 486,548 EXCLUSIVE BOTTLER FOR PERU 10