August, 12 2020

During the second quarter of this year, Alicorp continued to work on their business continuity planning in response to the crisis of the Covid-19 and managed to have good liquidity, leverage and adequate funding. To this the implementation of initiatives related to innovation and digital transformation that have been key to respond to the challenging context adds.

Thus, the company has recovered its production capacity and meet the commitment triple announced in April , supplying the markets with food and personal care products and home, protect the health and welfare of its employees and contribute to communities in which it operates.

Results by business

In the second quarter of 2020 (2T2020) Alicorp sales reached 2.274 million soles. While this expresses result in a reduction of 7.6% compared to the same period of 2019, in so far of the year, the company has maintained steady growth (0.7%) due to the good results reported in the first quarter.

In terms of profitability, earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 5.3%; because the business performance in the second quarter, a period in which the health emergency had a major impact on both production and consumption in various sectors.

Consumer business Massively Peru showed a reduction in sales of 8.7% compared to the same period of 2019. This result is explained by lower volume sold 12.4% due to: i) implemented measures that restricted the operational capacity of the plants ii) higher sales in the modern channel, which has lower margins and iii) trend, in some categories, to the consumption of lower sales price during the emergency phase.

For its part, the massive international consumer business recorded sales growth of 8.6% in the 2T2020. The result is based on the growth strategy implemented by the company for countries like Bolivia and Ecuador, which showed an increase in volume of 20% and 16%, respectively.

In the case of Peru, Alicorp has identified opportunities to adapt the portfolio to the needs of current consumption, strengthening its presence in e-commerce channels for consumers and also implementing digital solutions for their clients. The company also is developing innovations through brands that will respond to the trend of consumption of products with lower selling price in countries like Peru with Plusbelle in Argentina and Bolivia with IntraAval with Nutregal.

On the other hand, due to restrictions set to the beginning of the emergency, the gastronomic industry in Peru was one of the most affected, showing a 44.5% drop in GDP in restaurants between January and May. In that vein, the B2B business was a reduction in sales of 22.9%, the platform Gastronomy the most impacted because fell 50%, while Industrial Clients and Planning, showed a reduction of 13% and 5%, respectively.

However, the company maintains a strong relationship with its customers and, following their business model is to leverage the consultative development, it has managed to adapt quickly, contributing to the resumption of operations in the gastronomic segment. To this end, it has developed a work plan that includes training, boost for demand generation through the implementation of promotions, safety equipment delivery and support for compliance with certain protocols by local authorities.

Business balanced feed for the aquaculture sector, Vitapro, showed a reduction of 12.8% in sales due to lower demand and pressure drop in the price of shrimp put on our customers, who are mainly destined for sale Asian market. However, it is expected a recovery in the prices of shrimp by 2021, as well as the opportunity to continue with the implementation of digital solutions and an increase in productive capacity that allows them to respond to industry recovery.

With regard to the business of milling, although showed sales growth, reaching 256 million soles, there was a reduction in sales volume of 3.1% due to restrictions set forth under the emergency context and lower demand from the poultry industry.

Over the next few months Alicorp continue the process of adapting to this new scenario, supported by the development of proposals that allow respond to the unique challenges of the new normal, taking care of the health of its employees while contributing to the economic recovery in countries where it operates.

about Alicorp

Alicorp is a leader in consumer multilatina. It has operations in Peru, Argentina, Brazil, Bolivia, Chile, Colombia, Ecuador, Honduras, Mexico, Uruguay and exports to other countries. Alicorp specializes in four lines of business: 1) Consumer Goods (food, personal care and home) in Peru, Brazil, Argentina, Bolivia, Ecuador, Colombia, Chile and other countries, 2) B2B (flour industrial, industrial shortenings, premixes and products Gastronomy), 3) Aquaculture (balanced food for fish and shrimp) and 4) Milling (soybean and sunflower).