grupo lala, s.a.b. de c.v....grupo lala 1q earnings conference call company data, in mexican pesos....
TRANSCRIPT
1st. Quarter, 2016 Earnings Conference Call
Grupo LALA, S.A.B. de C.V.
April 26, 2016
Grupo LALA 1Q Earnings Conference Call
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. Securities Actof 1933, as amended.
This presentation includes forward-looking statements or statements about events or circumstances which have not yet occurred. We havebased these forward-looking statements largely on our current beliefs and expectations about future events and financial trends affecting ourbusinesses and our future financial performance. These forward-looking statements are subject to risk, uncertainties and assumptions,including, among other things, general economic, political and business conditions, both in Mexico and in Latin America as a whole. Thewords “believes”, “may”, “will”, “estimates”, “continues”, “anticipates”, “intends”, “expects”, and similar words are intended to identifyforward-looking statements. We undertake no obligations to update or revise any forward-looking statements because of new information,future events or other factors.
In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur.Therefore, our actual results could differ substantially from those anticipated in our forward-looking statements.
No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of 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 use ofall or any part of this material.
This material does not give and should not be treated as giving investment advice. You should consult with your own legal, regulatory, tax,business, investment, financial and accounting advisers to the extent that you deem it necessary, and make your own investment, hedgingand trading decision based upon your own judgment and advice from such advisers as you deem necessary and not upon any information inthis material.
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Grupo LALA 1Q Earnings Conference Call
MACRO ECONOMIC REVIEW 1Q-2016
POSITIVE VARIABLES:• Nominal Wage = +4.5% (March)• Mexican Inflation = 2.6% (March)• Remittances = +40.0% (Jan-Feb, in MXN terms)
NEGATIVE VARIABLES:• Consumer Confidence = -1.8% (February)• FX (Peso/Dollar) = -20.9% (1Q-15 vs. 1Q-16)
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MEXICO CPI INFLATION (YoY)
Source: BANXICO, INEGI .
Grupo LALA 1Q Earnings Conference Call
FINANCIAL RESULTS-DELIVERING GROWTH4
Income Statement(1) 1Q-15 % 1Q-16 % Growth
Net Sales $ 11,630 100.0% $12,509 100.0% 7.6%
Gross Profit 4,532 39.0% 4,960 39.7% 9.5%
Operating Income 1,366 11.7% 1,557 12.4% 14.0%
EBITDA(2) 1,641 14.1% 1,889 15.1% 15.1%
Net Income 944 8.1% 1,111 8.9% 17.8%1. Company Data, in Mexican Pesos.2. EBITDA=Earnings Before Interest, Taxes, Depreciation and Amortization.
3 MONTHS ENDED MARCH 31, 2016
Segment 1Q-15 1Q-16 Growth
Milk $ 7,705 $ 8,143 5.7%
Other Dairy Products 3,261 3,581 9.8%
Beverages and Others 664 785 18.2% Other DairyProducts
28.6%
Beverages & Others6.3%
Milk65.1%
CONTRIBUTION TOTAL SALES
Grupo LALA 1Q Earnings Conference Call
DEVOLOPING INTERNAL CAPABILITIES
Structure and location
SALES & OPERATIONAL PLANNING
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ARIBA Software implementation
STRATEGIC PROCUREMENT
SHARED SERVICE STRUCTURE
Improve Customer Service
Grupo LALA 1Q Earnings Conference Call
Grupo LALA 1Q Earnings Conference Call
MXN $564mm in CAPEX investment for the 3 months ended march 31, 2016
Increased production capacity in Mexico and Central America.
CAPEX 1Q-20166
CAPEX MIX 3M-2016
Maintenance40.0%
Others60.0%
Grupo LALA 1Q Earnings Conference Call*Irapuato Production Cluster
Grupo LALA 1Q Earnings Conference Call
Company Data, in Mexican Pesos.Source: Company Information.
Financial Position 2015 2016
Total Assets $31,412 $35,809
Cash 8,097 9,083
Total Liabilities 8,429 10,366
Shareholder Equity 22,983 25,443
AS OF MARCH 31,
Capital Structure 2015 2016
Net Debt/EBITDA (1.4)x (1.4)x
EBITDA/Interest Paid 774.2x 377.5x
STRONG FINANCIAL POSITION7
Grupo LALA 1Q Earnings Conference Call
Grupo LALA 1Q Earnings Conference Call
Company Data, in Mexican Pesos.Source: Company Information.
SOLID CASH FLOW8
0.135 pesos per share
May 25th, 2016
2nd. Installment of the cash dividend
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1Q-15 1Q-16
CASH FLOW FROM OPERATIONS (LTM)
MXN$m
m
3,145
5,514
“LALA CARES FOR YOU”
Grupo LALA 1Q Earnings Conference Call
Grupo LALA 1Q Earnings Conference Call
“Nourishing your life is our passion”
LALA MISSION & VISION10
MISSION
“To be the favorite dairy company in the Americas”
VISION
Products launched in 2015
Grupo LALA 1Q Earnings Conference Call
Grupo LALA 1Q Earnings Conference Call
NEW MARKETING CAMPAIGN11
Grupo LALA 1Q Earnings Conference CallNew product image 2016
Grupo LALA 1Q Earnings Conference Call
On-trend products and packaging innovation
ACCELERATING ORGANIC GROWTH IN MEXICO12
Grupo LALA 1Q Earnings Conference Call
World-Class go-to market execution
Grupo LALA 1Q Earnings Conference Call
Develop Internal Capabilities
STRATEGIC PRIORITIES 201613
2nd
3rd
4th
Grupo LALA 1Q Earnings Conference Call
Expand & Consolidate Central America
Operation
M&A and Alliances
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.
For more information: www.grupolala.com
Stock InformationGrupo LALA has been traded under the ticker ‘LALA B’ on the Bolsa Mexicana de Valores (BMV) since October 16, 2013.