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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.
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Third Quarter 2014 Results
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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.
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Third Quarter 2014 Results
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- 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
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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
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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.
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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,
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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
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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
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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
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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
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