Grupo LALA, S.A.B. de C.V. 1 st. Quarter, 2016 Earnings Conference Call April 26, 2016
2 DISCLAIMER This material does not constitute an offering document. This material was prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities. Any offering of securities will be made solely by means of an offering memorandum, which will contain detailed information about the company and its business and financial results, as well as its financial statements. Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the U.S. Securities Act of 1933, as amended. This presentation includes forward-looking statements or statements about events or circumstances which have not yet occurred. We have based these forward-looking statements largely on our current beliefs and expectations about future events and financial trends affecting our businesses 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. The words “believes”, “may”, “will”, “estimates”, “continues”, “anticipates”, “intends”, “expects”, and similar words are intended to identify forward-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 the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. We and our affiliates, agents, directors, employees and advisors accept no liability whatsoever for any loss or damage of any kind arising out of the use of all 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, hedging and trading decision based upon your own judgment and advice from such advisers as you deem necessary and not upon any information in this material. Grupo LALA 1Q Earnings Conference Call
3 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) MEXICO CPI INFLATION (YoY) 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: BANXICO, INEGI . Grupo LALA 1Q Earnings Conference Call
4 FINANCIAL RESULTS-DELIVERING GROWTH 3 MONTHS ENDED MARCH 31, 2016 Income Statement (1) 1Q-15 % 1Q-16 % Growth $ 11,630 100.0% Net Sales $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% 1,641 14.1% EBITDA (2) 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. CONTRIBUTION TOTAL SALES Segment 1Q-15 1Q-16 Growth Beverages & Others Milk $ 7,705 $ 8,143 5.7% 6.3% Other Dairy Products 3,261 3,581 9.8% Beverages and Others 664 785 18.2% Other Dairy Milk Products 65.1% 28.6% Grupo LALA 1Q Earnings Conference Call
5 DEVOLOPING INTERNAL CAPABILITIES STRATEGIC PROCUREMENT ARIBA Software implementation SALES & OPERATIONAL PLANNING Improve Customer Service SHARED SERVICE STRUCTURE Structure and location Grupo LALA 1Q Earnings Conference Call Grupo LALA 1Q Earnings Conference Call
6 CAPEX 1Q-2016 CAPEX MIX 3M-2016 MXN $564mm in CAPEX investment for the 3 months ended march 31, 2016 Maintenance 40.0% Increased production capacity in Others 60.0% Mexico and Central America. *Irapuato Production Cluster Grupo LALA 1Q Earnings Conference Call Grupo LALA 1Q Earnings Conference Call
7 STRONG FINANCIAL POSITION AS OF MARCH 31, Financial Position 2015 2016 Total Assets $31,412 $35,809 Cash 8,097 9,083 Total Liabilities 8,429 10,366 Shareholder Equity 22,983 25,443 Capital Structure 2015 2016 Net Debt/EBITDA (1.4)x (1.4)x EBITDA/Interest Paid 774.2x 377.5x Company Data, in Mexican Pesos. Source: Company Information. Grupo LALA 1Q Earnings Conference Call Grupo LALA 1Q Earnings Conference Call
8 SOLID CASH FLOW CASH FLOW FROM OPERATIONS (LTM) 7,000 5,514 6,000 3,145 5,000 MXN$mm 2 nd. Installment of the cash dividend 4,000 0.135 pesos per share 3,000 May 25th, 2016 2,000 1,000 0 1Q-15 1Q-16 Company Data, in Mexican Pesos. Source: Company Information. Grupo LALA 1Q Earnings Conference Call
“LALA CARES FOR YOU” Grupo LALA 1Q Earnings Conference Call
10 LALA MISSION & VISION MISSION “Nourishing your life is our passion” VISION “To be the favorite dairy company in the Americas ” Products launched in 2015 Grupo LALA 1Q Earnings Conference Call Grupo LALA 1Q Earnings Conference Call
11 NEW MARKETING CAMPAIGN New product image 2016 Grupo LALA 1Q Earnings Conference Call Grupo LALA 1Q Earnings Conference Call
12 ACCELERATING ORGANIC GROWTH IN MEXICO On-trend products and packaging innovation World-Class go-to market execution Grupo LALA 1Q Earnings Conference Call Grupo LALA 1Q Earnings Conference Call
13 STRATEGIC PRIORITIES 2016 2nd Develop Internal Capabilities 3rd Expand & Consolidate Central America Operation 4th M&A and Alliances Grupo LALA 1Q Earnings Conference Call Grupo LALA 1Q Earnings Conference Call
CONTACT INFORMATION Investor Relations Enrique González +52 (55) 9177 5900 investor.relations@grupolala.com Forward-looking statements This document contains certain assumptions, projections and forward-looking statements regarding the Company’s financial situation, operative results and information, Grupo LALA’s business and that of its subsidiaries as well as with regards to the Company’s related plans and objectives. This executive summery does not constitute a public securities offering on behalf of LALA and is intended to be used for informational purposes only. For more information: www.grupolala.com Stock Information Grupo LALA has been traded under the ticker ‘LALA B’ on the Bolsa Mexicana de Valores (BMV) since October 16, 2013.
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