Grupo LALA Reports Third Quarter 2020 Results

MEXICO CITY, Oct. 19, 2020 /PRNewswire/ — Grupo LALA, S.A.B. de C.V., a Mexican Company focused on healthy…

MEXICO CITY, Oct. 19, 2020 /PRNewswire/ — Grupo LALA, S.A.B. de C.V., a Mexican Company focused on healthy and nutritious foods, («LALA») (BMV: LALAB), today reported results for the third quarter of 2020. The following information has been presented based on International Financial Reporting Standards (IFRS) and in nominal terms.

Quarter Highlights:

  • Business resilience, strengthened operations and financial discipline resulted in sequential margin improvement in Mexico with a solid financial position and ample liquidity
  • +10.8% YOY constant currency Branded Sales(1) growth driven by strong performance in Mexico and Brazil
  • 11.2% normalized(2) consolidated EBITDA margin; +110 bps sequential improvement
  • 13.7% normalized(2) EBITDA margin in Mexico; +160 YOY expansion
  • $640m normalized(2) Net Income; in line YOY despite Q3’19 one-time favorable impact on Brazil
  • 190 bps YOY working capital improvement to reach -0.3% of consolidated sales, driven by improvements in all regions
  • Extension of debt maturity profile through $4.6 bn refinancing
  • Leverage ratio: normalized(2) 3.3x, reported 3.5x

The following chart provides an abridged Income Statement, in millions of pesos. The margin for each figure represents its ratio to net sales for the third quarter ended September 30, 2020 as compared to the same period in 2019.





Reported


Normalized (2)

MXN$ in millions

Q3’19 (3)

% Sales


Q3’20

% Sales

Var. %

Var. bps


Q3’20

% Sales

Var. %

Var. bps

Branded Sales (1)

18,723



20,436


9.1%



20,436


9.1%


Raw Materials and Others Sales

261



289


10.9%



289


10.9%


Net Sales

18,984

100%


20,725

100%

9.2%



20,725

100%

9.2%


Gross Profit

6,687

35.2%


7,247

35.0%

8.4%

(20 bps)


7,247

35.0%

8.4%

(20 bps)

Operating Income

1,507

7.9%


1,281

6.2%

(15.0%)

(170 bps)


1,557

7.5%

3.3%

(40 bps)

EBITDA

2,306

12.1%


2,045

9.9%

(11.3%)

(220 bps)


2,322

11.2%

0.7%

(90 bps)

Net Income

641

3.4%


455

2.2%

(28.9%)

(120 bps)


640

3.1%

0.0%

(30 bps)

(1)      Branded Sales exclude raw materials sales

(2)      Normalized excludes Q3’20 one-time tax expense in Mexico

(3)      Includes one-time benefit from litigation settlement in Brazil


MESSAGE FROM MANAGEMENT

Arquímedes Celis, Grupo LALA’s CEO, commented:

«After nine months of intense work and focus on getting back to the basics, I’m proud to say that we delivered what we had promised at the beginning of this year. We have managed to stabilize our Mexico business and recover its profitability, putting the legacy issues behind us, despite the many challenges associated with the COVID-19 pandemic. Nowadays, we have a stronger, efficient and profitable operation.»

He continued, «Further, during the quarter we remained focused on our strategic priorities, building a strong foundation for growth and for our next innovation phase. Taken together, our third quarter results demonstrate the strength and diversity of our offering and speak to the value of our brands and capabilities as a company. I want to recognize LALA employees from all our regions who drive our momentum and success. We are focused on performance, on our clients and consumers, and are confident our strategies are enabling our Company to be better positioned to drive future growth and build long-term value for our shareholders.»

Please click on the following link for a PDF file containing the full text of the press release:

https://www.lala.com.mx/wp-content/uploads/2020/04/Earnings%20Release%20Q3’20%20v8.pdf

Please click on the following link for a PDF file containing the full text of the press release in Spanish:

https://www.lala.com.mx/wp-content/uploads/2020/04/Reporte%20Resultados%203T’20%20v4.pdf

CONFERENCE CALL

Tuesday October 20, 2020, at 11:00am EST / 10:00am CST

Led by: Arquímedes Celis (CEO), Alberto Arellano (CFO) and David González (IRO)

Webcast: http://public.viavid.com/index.php?id=141668

To participate, please dial-in ten minutes ahead of the scheduled time.

Mexico: 01 800 522 0034

United States: +1 877 705 6003 (Toll-free)

International: +1 201 493 6725

To access the replay service (7 days), please dial:

United States: +1 844 512 2921 (Toll-free)

International: +1 412 317 6671

PIN #: 13711046

CONTACT – INVESTOR RELATIONS

David González Peláez and Israel Rentería, CFA

Tel.: +52 (55) 5078 – 4039

Investor.relations@grupolala.com

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SOURCE Grupo LALA, S.A.B. de C.V.