Professional Documents
Culture Documents
Lima, Peru, June 22nd, 2017 San Miguel Industrias PET (The company or SMI), a leading Peruvian rigid
plastic company with injection, blowing and cap molding operations in Peru, Colombia, Ecuador, El Salvador,
Panama, Guatemala and Mexico, and recycling operations in Peru and Colombia, announces today consolidated
results for the first quarter (1Q 2017), stated in nominal US dollars (US$).
Financial Highlights
- Total container volume sold was 2,046 million units, increasing by ~710 million units (53.1% YoY).
- Consolidated adjusted EBITDA reached ~US$ 22.1 million, increasing by ~US$ 5.8 million
(35% YoY).
- Shift in product mix, with share of bottles decreasing from 27% to 19% YoY in volume, mainly due
to a recent regional supply agreement, which is mainly concentrated in preforms.
Financial Results
1 For comparison purposes, figures include Plastiglas sales and results for 1Q 2016.
1. Volumes sold
Volumes maintained a growth trend in the first quarter with over 710 additional million units sold vs 1Q 2016
(+53% YoY). This was mainly explained by (i) the contribution of a recently signed supply agreement with a
regional client (~611 additional million units sold), (ii) the full potential contribution of a contract signed by the
end of 2015 with a leading bottler in both Peru and Ecuador (~30 million units in both countries) and (iii)
organic growth within our contracted, spot, and export clients throughout the Andean Region, Central America
& the Caribbean.
In addition to preform and bottle growth, SMI sold 692 million units of closures in Peru, Colombia, Ecuador,
Mexico and Central America in the first quarter of 2017. This is the result of a contract signed at the end of 4Q
2016.
2. Gross Profit
In absolute terms, gross profit increased in ~US$ 3.6 million in 1Q 2017 when compared to 1Q 2016 (+23%
YoY). Gross profit margins decreased from 23.8% to 19.7%, mainly because of changes in the product mix with
the contribution of the recently signed preform concentrated contract with a regional bottler, as well as the start
of the new closures business unit, which accounts for 25% of the total consolidated volume.
3. Operating Profit
Administrative expenses increased in ~US$ 1.7 million in 1Q 2017 vs 1Q 2016 (35% YoY), and represented
~6.6% of the total revenues. Increases were mainly driven by the strengthening of the administrative team to
prepare for the new contracts signed on 2H of 2016 and their expected growth, and due to SAP developments,
and legal and tax advisory services related to the new closed businesses. The implementation of an ERP solution
is our first step to capture synergies with Plastiglas after the recent merger, and will start to show savings in the
2H of 2017.
2
Earnings Report
First Quarter 2017
Selling and distribution expenses increased in ~US$ 0.3 million in 1Q 2017, compared to 1Q 2016 (16% YoY).
This was mainly a result of (i) the strengthening of the commercial team to support the new consolidated
operations and our efforts to increase spot and export sales, and (ii) increases in variable selling expenses such
as transport and third-party services, associated directly to volume growth.
Financial expenses increased in ~US$ 1.5 million in 1Q 2017 vs 1Q 2016. Most expenses can be explained by
the US$ 200 million bond coupons (November 2013 issuance), interests paid for outstanding leasings and some
short-term loans, and a stock of debt in Plastiglas.
5. EBITDA Reconciliation
Adjustments to EBITDA:
Advisory services 650 -
Extraordinary Bonus to employees - 130
Others 313 24
Total Adjustments 963 154
Adjusted EBITDA 22,109 16,342 35.3% 5,766
Adjusted EBITDA Margin 22.5% 24.6%
Consolidated adjusted EBITDA reached ~US$ 22.1 million in 1Q 2017, compared to ~US$ 16.3 million generated
in 1Q 2016 (+35% YoY). This was mainly because of the volume contribution of the recently signed regional
contracts and the organic growth of SMIs consolidated operation. On this first quarter, SMI has surpassed its
aggressive internal budget, and LTM EBITDA reached USD 67.3 mm (vs. USD 61.4 mm of FY 2016).
EBITDA Margins remained strong closing at 22.5% in 1Q 2017, although they were partially affected by recent
changes in product mix. We continue to focus on capturing efficiency opportunities to maintain SMI margins
above 20%, as well as manage our suppliers and lever on our growing scale.
3
Earnings Report
First Quarter 2017
Operating cash flow generated in 1Q 2017 was ~US$ 3.2 million, mainly explained by a temporary
negative impact in working capital accounts, which were affected by an increase in trade accounts
receivable (~US$ 34 million) and inventories (~US$ 12 million). This effect, however, is strictly related
to the growth requirements of the consolidated operation, which increase our working capital needs.
This effect should be reverted starting on 2H 2017, mainly by the impact from our accounts payable.
In 1Q 2017, investment cash outflow was ~US$ 14.2 million. Most of the outflow was related to Capex
required to attend recently signed contracts with two of our regional clients.
Financial cash outflows (US$ 7.4 million) were mainly related to (i) bond coupons and (ii) interests and
amortization other outstanding obligations, which were offset by new debt incurred of US$ 6.8 million.
This resulted in a negative net financial cash flow of US$ 0.6 million.
4
Earnings Report
First Quarter 2017
b. Balance Sheet
San Miguel Industrias PETs total assets were US$ 672 million as of the end of March, 2017. Currents assets
increased to ~US$ 250 million, mainly explained by an increase in trade accounts receivable
(+US$ 34 million), inventories (+US$ 12 million) and prepaid taxes (+US$ 1 million), due to the growth of the
consolidated operation.
Non-current assets increased to ~US$ 422 million, mainly explained by (i) a ~US$ 7 million increase in property,
machinery and equipment due to Capex investments; and (ii) a ~US$ 2 million decrease in intangibles.
Total liabilities increased to ~US$ 477 million, mainly as a result of (i) an ~US$ 8 million increase in financial
debt, explained by a mid-term loan for Capex and some short-term debt, and (ii) a
~US$ 31 million increase in accounts payable, explained by the growth of the consolidated operation.
- Capex investments made to attend an extended regional agreement in Peru and Ecuador.
- Capex investments made for the asset purchase associated with a regional contract to supply preforms and
closures in Peru, Ecuador, Colombia, Mexico and Central America.
- Expansion of our injection, blowing and warehouse facilities in Peru and Ecuador
5
Earnings Report
First Quarter 2017
Equity
Capital stock 189,264 189,264
Higher value of investment properties - -
Other reserve - -
Legal reserve 851 851
Retained earnings 4,309 1,294
Minority Interest 1,112 -
Translation result 243 243
Investment valuation - -
6
Earnings Report
First Quarter 2017
For the three month period ended March 31, 2017 and 2016
Continuing operations
Revenue 98,335 66,350
Cost of sales (78,924) (50,558)
Other operations - -
Financial income 824 46
Financial expense (6,088) (4,568)
Exchange difference, net 594 478
* Information for 1Q 2016 considers Plastiglas results, although the merger took place in June 2016.