grupo lala, s.a.b. de c.v....earnings per share $1.46 $1.59 financial position 2015 2016 total...
TRANSCRIPT
Grupo LALA, S.A.B. de C.V.
3rd Quarter, 2016Earnings Conference Call
October 25, 2016
DISCLAIMER
This material does not constitute an offering document. This material was prepared solely for informational purposes and is not to beconstrued as a solicitation or an offer to buy or sell any securities. Any offering of securities will be made solely by means of an offeringmemorandum, which will contain detailed information about the Company and its business and financial results, as well as its financialstatements.
Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the U.S. SecuritiesAct of 1933, as amended.
This presentation includes forward-looking statements or statements about events or circumstances which have not yet occurred. Wehave based these forward-looking statements largely on our current beliefs and expectations about future events and financial trendsaffecting our businesses and our future financial performance. These forward-looking statements are subject to risk, uncertainties andassumptions, including, among other things, general economic, political and business conditions, both in Mexico and in Latin America as awhole. The words “believes”, “may”, “will”, “estimates”, “continues”, “anticipates”, “intends”, “expects”, and similar words are intendedto identify forward-looking statements. We undertake no obligations to update or revise any forward-looking statements because of newinformation, 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 theinformation contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. We and ouraffiliates, agents, directors, employees and advisors accept no liability whatsoever for any loss or damage of any kind arising out of the useof all or any part of this material.
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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 makeyour own investment, hedging and trading decision based upon your own judgment and advice from such advisers as youdeem necessary and not upon any information in this material.
MACRO ECONOMIC REVIEW 3Q-2016
POSITIVE VARIABLES
• Nominal Wage grew 4.1% in
September, 2016
• Mexican Annual Inflation reached 3.0%
in September, 2016
NEGATIVE VARIABLES
• Consumer Confidence declined 7.2%
in September, 2016
• Exchange Rate (Peso/Dollar) YTD
depreciated by 12.5%
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3Q-2016 NET SALES
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12,17613,153
3Q-15 3Q-16
(1) Company Data, in Mexican Pesos. (´000)
3 MONTHS ENDED SEPTEMBRE 30, 2016
62.7% 32.0% 5.3%
NET SALES (MXN$mm)
YoY 9.0% YoY 18.8% YoY 19.6%
SALES BY SEGMENT
Mexico & CAM
LALA U.S.548
(2) CAM: Guatemala, Nicaragua & Costa Rica
(2)
(1)
3Q-2016 NET SALES BRIDGE
(*) Company Data, in Mexican Pesos. (´000)(1) Organic: Volume and pricing.(2) CAM: Guatemala, Nicaragua & Costa Rica.(3) Inorganic: Additional sales from acquisitions. 5
$798
6.5%$179
1.5%$548
4.5%
YEAR-ON-YEAR GROWTH
3M ended September 30th,2016
(1) (3) (3)
(2)
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3Q-2016 EBITDA MARGIN BRIDGE
13.9%
10.8%
ONE-OFFSHORT-TERM ONGOING
IMPACTS
(2)
3M ended September 30th, 2016
YEAR-ON-YEAR CONTRACTION (bps)
(*) Company Information, (bps) basis points.(1) FX (Peso/Dollar): Exchange rate depreciation effect over total COGS exposure.(2) CAM: Guatemala, Nicaragua & Costa Rica.(2) CAM Integration: Extraordinary effects from production consolidation & Venezuela sales short-fall.(3) Net dilutive effect from consolidating 2 months of the US Branded Business.(4) Corporate Restructure: One-offs from headcount reduction, Shared Services provisions & others.
(1) (3) (4)
YEAR TO DATE RESULTSHIGHLIGHTS
1. Company Data, in Mexican Pesos. (´000)2. EBITDA=Earnings Before Interest, Taxes, Depreciation and Amortization.
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5,008 5,260
9M-15 9M-16
2,919 2,965
9M-15 9M-16
35,65339,113
9M-15 9M-16
9 MONTHS ENDED SEPTEMBER 30, 2016
NET SALES (1)
(MXN$mm)
100.0% 100.0%
EBITDA (2)
(MXN$mm)NET INCOME (1)
(MXN$mm)
Margin
14.0% 13.4% 8.2% 7.6%
Margin Margin
STRONG FINANCIAL POSITION
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AS OF SEPTEMBER 30,
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
Financial Position 2015 2016
Total Assets $34,354 $39,773
Cash 10,071 6,263
Total Liabilities 9,318 12,265
Shareholder Equity 25,035 27,508
Source: Company InformationRatios are calculated in local currencyFigures in Mexican Pesos (´000)
3Q-15 3Q-16
Total Debt (MXN$mm)
Cash (MXN$mm)
$58
$2,268
$6,263
$10,071
0.135 pesos per share (11-25-2016)
4th. Installment of the cash dividend
LALA 2016 STRATEGIC PRIORITIES
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Accelerating Organic Growth in Mexico
Developing Internal Capabilities
Expanding & Consolidating Central America Operations
M&A and Alliances
ACCELERATING ORGANIC GROWTH IN MEXICO
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Innovation capable of changing the habits of consumers
LALA 100
Since the introduction of LALA 100 only 3 monthsago the fresh milk category has reached doubledigit growth (10.5% vs P8´15) with 85% of thegrowth coming from LALA 100.
*Considering the data reported by Nielsen in their ScanTrack service for the Fresh Milk category(without milk formula). Growth comparing P8 2016 vs P8 2015 in Total Mexico. Weighteddistribution considered as the maximum reached since launch (June 2016)
ACCELERATING ORGANIC GROWTH IN MEXICO
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New Nutri Leche Panela Cheese
Leverage Nutri Leche franchiseto increase product offering among
emerging consumers
Packaging upsizinginitiatives
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+900 distribution routes with pre-sale
DEVELOPING INTERNAL CAPABILITIES
Secondary Distribution Vehicle
Pre-sale Motorcycle
Handheld Device
Our 2016 CAPEX will increase production capacity in Mexico by 22.0%
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DEVELOPING INTERNAL CAPABILITIES
Strategic Procurement
Sales & Operational Planning
Shared Service Structure
CAPEX MXN $2,485mm (9M-16)
New Cheese Production Capacity
New Automated Industrial Warehouse
EXPAND & CONSOLIDATE CENTRAL AMERICA OPERATIONS
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Distribution Capacity
Raw milkSupply assurance
Production Capacity
New Central America headquarters in Panama
Production Plant San Ramón Alajuela, Costa Rica
Costa Rica agreement with Florida Bebidas adds:
M&A AND ALLIANCES
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While blended yoghurt is declining, drinkable is growing
double digit
“Drinkable yoghurt represents 9.0% of the total yoghurt category value in the U.S.”
Source: IRI; US MULO (MULti-Outlet) 26 Weeks Ending 8-28-16
91% Yoghurt
(Blended)
9% YoghurtDrinks
+11.5%
(1.7)%
U.S. YOGHURT CATEGORY OVERVIEW
+$3.88B USD
M&A AND ALLIANCES
Sept. 2016ACV: 64.0%
16,796 STORES
Presence in Big Retailers
with nationwide exposure
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;LALA yoghurt brand is growing twice (21.2%) as fast as the drinkable yoghurt category
LALA U.S. is the Brand Leader in Adult Drinkable Yoghurts and the #2 in total
Drinkables which includes kids
Source: IRI; US MULO (MULti-Outlet) 26 Weeks Ending 8-28-16
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PRODUCTION CAPACITY FOR DRINKABLE YOGHURTS WAS RECENTLY DOUBLED
M&A AND ALLIANCES
During the year there were investments made to double the yoghurt production capacity at our Omaha, Nebraska facility .
Packaging SystemOmaha, Nebraska Production Plant
Filling Lines Omaha, Nebraska Production Plant
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CLOSING REMARKS
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CONTACT INFORMATION
Investor RelationsEnrique González+52 (55) 9177 [email protected]
Forward-looking statementsThis document contains certain assumptions, projections andforward-looking statements regarding the Company’s financialsituation, operative results and information, Grupo LALA’sbusiness and that of its subsidiaries as well as with regards tothe Company’s related plans and objectives. This executivesummery does not constitute a public securities offering onbehalf of LALA and is intended to be used for informationalpurposes only.
Stock InformationGrupo LALA has been traded under the ticker ‘LALA B’ on the Bolsa Mexicana de Valores (BMV) since October 16, 2013.
For more information: www.grupolala.com