GRUPO LALA, S.A.B. DE C.V. 1
Earnings 2Q - 2017
GRUPO LALA REPORTS SECOND QUARTER 2017 RESULTSMexico City, July 24th, 2017 - G rupo L AL A, S .A.B. de C .V., a Mexican C ompany focused on healthy and nutritious foods, ("LALA") (BMV: LALA), today reported results for the second quarter 2017. The following information has been presented based on International F inancial R eporting S tandards (IFR S ) and in nominal terms.
The following chart provides an abridged Income S tatement, in millions of pesos. The margin for each figure represents its ratio to net sales and the percentage change from the quarter ended J une 30th, 2017, as compared with the same period in 2016 :
2nd. Q ´16 | % Sales | 2nd. Q ´17 | % Sales | Var. % |
$ 12,903 | 100.0% | $ 14,967 | 100.0% | 16.0% |
5,050 | 39.1% | 5,787 | 38.7% | 14.6% |
1,543 | 12.0% | 1,634 | 10.9% | 5.9% |
1,888 | 14.6% | 2,096 | 14.0% | 11.0% |
1,101 | 8.5% | 1,148 | 7.7% | 4.3% |
P&L Net Sales Gross Profit
Operating Income EBITDA(1)
Net Income(2)
E BITDA is defined as operating income before depreciation and amortization.
Net Income refers to C onsolidated Net Income.
QUARTER HIGHLIGHTS
16.0% increase
in Net Sales, closing at 14,967 million pesos
14.6% increase in Gross Profit, to reach 5,787 million pesos
2,096 million pesos
EBITDA(1)
11.0% above the same period last year
Mess age from ManagementScot Rank, Grupo LALA´s CEO:
"I would like to highlight the positive performance of our operation in Mexico in the second quarter of 2017, where sales growth and productivity improvements allowed us to increase total C ompany E BITD A by 11.0%."
1
Resultados 4T - 20161
Earnings 2Q - 2017
CONSOLIDATED RESULTS FOR THE SECOND QUARTER 2017S ales continued growing in the second quarter 2017 at s ignificant rates, fueled by organic growth in Mexico and C entral America, and inorganic growth from the U.S . Net sales for the quarter grew 16.0% vs. the same period last year, ending in 14,967 million pesos. C ommercial initiatives, product mix, and pricing added 9.7 points; while the acquisition of the U.S . Branded business contributed 6.3 points of inorganic growth.
L AL A S egments
L ooking at sales by segment, we continue with an important growth on the value- added portfolio to enrich our mix sales, as shown by the 27.5% growth of the "Other Dairy P roducts" Category, which was driven by innovation, new installed capacity and acquisitions. Milk C ategory growth was 11.7% ; to reach 9,054 million pesos.
2Q 2017 Sales
(MXN$ mm)
14,967
12,903
2Q-16 2Q-17
5.5%
Sales by Segment
Segment | 2nd. Q´16 | 2nd. Q´17 | % Variation |
Milk(3) | $ 8,108 | $ 9,054 | 11.7% |
Other Dairy Products(4) | 3,997 | 5,093 | 27.5% |
Beverages and Others(5) | 797 | 820 | 2.7% |
34.0%
Milk: P asteurized, UHT and F unctional Milks, P asteurized and UHT dairy-based beverages, and Powdered Milk.
Other Dairy Products: C ream, Butter, C ream-based spreads, Y oghurt, C heese, Ice C ream and Desserts.
Beverages and Others: Beverages, J uices, C old C uts and Others.
Milk
60.5%
C osts and E xpenses
During the second quarter of 2017, the consolidated C ost of G oods increased 16.9% compared to the same period of 2016, primarily due to the integration of the U.S business and its plants running at low capacity, as well as raw material inflation in Mexico. G ross Profit increased 14.6% , closing at 5,787 million pesos, representing 38.7% of net sales.
Operating expenses grew 18.3% , s lightly below the 21.3% from previous quarter. This result includes nine percentage points of inorganic growth in expenses from the consolidation of the U.S . business .
Other Dairy Products Beverages & Others
% Gross Profit Increase
2
Resultados 4T - 20161
Earnings 2Q - 2017
C onsolidated R esults
Double digit S ales and G ross Profit growth increased operating income by 5.9% compared to the second quarter of 2016.
EBITDA EVOLUTION
(MXN$ mm)
S olid performance in Mexico compensated the costs ass ociated with emerging business es in the U.S . and C entral America, and as a result, E BITDA had a positive performance in the second quarter of 2017 ending in 2,096 million pesos; an 11.0% E BITDA expansion compared to the second quarter of 2016.
1,888
1,483
1,725
1,601
2,096
C onsolidated net income for the quarter finished at 1,148 million pesos, 4.3% higher than second quarter of 2016. This number was impacted by a lower net financial income driven by lower interest income from a lower cash position year over year, and the exchange rate loss es on forwards purchased in Q 1 2017.
Quarterly E BITDA improvement
S ignificant E BITDA improvement for this quarter reflects the effectiveness of the initiatives implemented over the last s ix months. In the Mexican business , we have been able to reach solid margin levels due to solid sales growth and productivity improvements.
F or the C entral America business , we concluded the integration process of recently acquired business es, and our results are expected to meet 2017 margin expectations.
F inally, in the U.S . business E BITDA loss es continue to decline as we prepare for the geographic expansion of the specialty milk business .
2Q-16 3Q-16 4Q-16 1Q-17 2Q-17
Soy Vita
Fastest growing brand in the largest segment of the plant based dairy alternatives
3
Resultados 4T - 20161
Earnings 2Q - 2017
L AL A in the U.S .
During the second quarter of 2017, the net sales of L ala U.S . reached 815 million pesos. The decline in sales compared to the firs t quarter 2017 is due to the appreciation of the Mexican peso.
The E BITDA for the quarter was negative 30 million pesos. In line with what we have announced at the beginning of the year, we expect the business to perform at break-even E BITDA in the second half of 2017.
LALA Delicias
Our first indulgent yoghurt
P&L
3rd. Q'16(2)
4th. Q'16
1st. Q'17
2nd. Q'17
Net Sales
$548
$ 840
$870
$815
EBITDA(1)
(80)
(146)
(35)
(30)
EBITDA/Net Sales
(14.6% )
(17.4% )
(4.0% )
(3.6% )
E BITDA is defined as operating income before depreciation and amortization
F igures include 2 months of consolidated results in 3Q 2016
C ash, S hort Term Investments and F inancial Instruments
Grupo Lala's cash, short-term investments and financial instruments decreased by 6,594 million pesos, to close at 2,229 million pesos. The reduction was mainly as result of the U.S . acquisition. We continue to drive working capital optimization across our markets to ensure we maintain a healthy cash generation structure.
Non-C urrent Ass ets
Our non-current ass ets increased from 17,652 to 23,929 million pesos reflecting our investments in technology, distribution, manufacturing capabilities, and the
U.S . acquisition.
Intangible and Other Ass ets
E nding balance for intangible and other ass ets increased by 2,910 million pesos, to 5,549 million pesos at J une 30th, 2017. This increase is explained by the recording of G oodwill, Trademarks and other intangibles related to acquisitions from last year.
23,929 million pesosNon-C urrent ass ets, as of J une 30th, 2017
4
Grupo LALA SAB de CV published this content on 24 July 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 01 August 2017 21:16:02 UTC.
Original documenthttp://www.grupolala.com/sites/default/files/inversionistas/earningsrelease2Q-2017_Jul.pdf
Public permalinkhttp://www.publicnow.com/view/8CFA1CDFB32CC536CDB00CC289B60A53290F6E1F
