Alicorp A : Informes De Clasificación De Riesgo.

1/27/23, 11:07 AM

Fitch Affirms Alicorp's Ratings at 'BBB'; Outlook Stable

RATING ACTION COMMENTARY

Fitch Affrms Alicorp's Ratings at 'BBB'; Outlook Stable

Fri 27 Jan, 2023 - 11:05 AM ET

Fitch Ratings - New York - 27 Jan 2023: Fitch Ratings has affrmed Alicorp S.A.A.'s Long- Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BBB' and senior unsecured notes at 'BBB.' The Rating Outlook on the corporate ratings is Stable. The rating affrmation refects Alicorp's resilient business profle in a diffcult economic and political environment.

KEY RATING DRIVERS

Deleveraging Expected: Adjusted net debt/EBITDA is expected to move toward 2.5x or below in 2023 from 2.6x-2.7x expected for 2022, which is in line with Alicorp's 'BBB' rating. Performance in 2022 was driven by increased prices, and the strong performance of the Consumer Goods Peru, Aquafeed, and Crushing units. Fitch forecasts steady EBITDA in 2023 (PEN 1.6 billion forecast for 2022) due to the Crushing segment's lower proftability, which benefted from higher prices and volumes in 2022; the Aquafeed business's solid performance, driven by international demand; and the resilience of the Peruvian Consumer Goods unit, despite the country's ongoing challenging political and economic outlook.

Diversifed Product Mix: The company has a broad, geographically diverse product portfolio, providing resilience and growth prospects and smoothing cash fow volatility. Alicorp focuses on consumer goods, namely Food and Home & Personal Care Products (39% of EBITDA in 2021); B2B (foodservice and bakery) (15% of EBITDA); Aquaculture Feed (22% of EBITDA) in Ecuador and Chile; and Oilseeds crushing (27% of EBITDA).

https://www.fitchratings.com/research/corporate-finance/fitch-affirms-alicorp-ratings-at-bbb-outlook-stable-27-01-2023

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1/27/23, 11:07 AM

Fitch Affirms Alicorp's Ratings at 'BBB'; Outlook Stable

Resilient Margin: Fitch expects EBITDA margins to remain close to 9%-10% over the next two years. EBITDA increased 26% for the nine months ending Sept. 30, 2022 due to the solid performance of the Crushing, Aquafeed units, and the recovery of B2B performance. Fitch projects Peru's Real GDP growth at 2.4% in 2023. Peru's economic outlook remains challenged by a deterioration in political stability and government effectiveness, which poses greater downside risks to investment and the country's economic growth.

Peru's sovereign country ceiling remains at 'BBB+'. Fitch expects the company to continue operating, recognizes that most of the companies' Peruvian operations, mainly located in Lima, have not been materially affected by the social unrest.

Solid Business Profle: Fitch believes Alicorp's Peruvian operations is the backbone of the group due to the company's strong market position in the Peruvian consumer products industry, leading brands, broad product portfolio, and extensive distribution network. Fitch estimates that Alicorp's Peruvian operations accounted for approximately 46%, while operations in Bolivia (B/Stable) 35% of EBITDA, respectively in 2022. The company divested is low performing Brazilian and Argentinian units in late 2021.

DERIVATION SUMMARY

Alicorp's 'BBB' ratings refect the company's strong market position in the Peruvian consumer products industry due to its leading brands, broad product portfolio and extensive distribution network. Peru remains the company's core market and represents about 46% of EBITDA as of YE 2022, while the company has grown both organically and inorganically to increase its geographic diversifcation in South America.

Factors constraining Alicorp's ratings include the company's moderate size and a less diversifed portfolio of products and brands when compared with other large consumer and packaged goods companies such as Unilever PLC (A/Stable), Nestle SA (A+/Stable) and Grupo Bimbo, S.A.B. De C.V. (BBB/Stable), which all have global presences in developed and developing markets.

Alicorp's credit metrics are in line for the rating category. Fitch expects Alicorp's net leverage to move toward 2.5x or below in 2023. The company additionally has some exposure to higher-risk countries such as Ecuador, and Bolivia, which have a sovereign risk rating of 'B-' and 'B', respectively.

KEY ASSUMPTIONS

--Steady EBITDA in 2023.

https://www.fitchratings.com/research/corporate-finance/fitch-affirms-alicorp-ratings-at-bbb-outlook-stable-27-01-2023

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1/27/23, 11:07 AM

Fitch Affirms Alicorp's Ratings at 'BBB'; Outlook Stable

--Single digit volume growth 2023.

--Adjusted Net debt/ EBITDA of 2.5x or below in 2023.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive rating action/upgrade:

--Net debt/EBITDA below 1.5x on a sustained basis;

--Increased geographic diversifcation in investment-grade countries.

Factors that could, individually or collectively, lead to negative rating action/downgrade:

--Net debt/EBITDA above 3.0x as a result of a decline in operating performance or cash fow generation associated with adverse market conditions or acquisitions.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defned as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defned as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specifc best- and worst-case scenario credit ratings, visit https://www.ftchratings.com/site/re/10111579.

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: Liquidity is adequate based on the company's cash balance, FCF and use of a revolving credit facility for working capital. Alicorp had PEN1.3 billion of cash and cash equivalents at 3Q22 and current debt of PEN1.1 billion excluding leases. Alicorp's exposure to U.S. dollar-denominated debt is limited. About 23% of its total fnancial liability had FX exposure to U.S. dollars at YE 2021.

ISSUER PROFILE

Alicorp is a Peruvian-based producer of consumer goods, industrial products, and animal nutrition. The company focuses on four core businesses: Consumer Products in Peru,

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1/27/23, 11:07 AM

Fitch Affirms Alicorp's Ratings at 'BBB'; Outlook Stable

Ecuador and Colombia, among other countries; B2B Products; Aquaculture; and Oilseeds crushing, which is part of the vertically-integrated consumer business in Bolivia.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.ftchratings.com/esg

RATING ACTIONS

ENTITY / DEBT 	RATING 		PRIOR 
Alicorp S.A.A.	LT IDR BBB Rating Outlook Stable	BBB Rating
	Outlook
	Affrmed		Stable
	LC LT IDR	BBB Rating Outlook Stable	BBB Rating
	Outlook
	Affrmed		Stable
senior unsecured	LT BBB	Affrmed	BBB

VIEW ADDITIONAL RATING DETAILS

FITCH RATINGS ANALYSTS

Johnny da Silva

Director

Primary Rating Analyst

https://www.fitchratings.com/research/corporate-finance/fitch-affirms-alicorp-ratings-at-bbb-outlook-stable-27-01-2023

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1/27/23, 11:07 AM

Fitch Affirms Alicorp's Ratings at 'BBB'; Outlook Stable

[phone] [e-mail] Fitch Ratings, Inc.

Hearst Tower 300 W. 57th Street New York, NY 10019

Paula Bunn

Director

Secondary Rating Analyst [phone] [e-mail]

Martha Rocha

Managing Director Committee Chairperson [phone] [e-mail]

MEDIA CONTACTS

Elizabeth Fogerty

New York

[phone] [e-mail]

Additional information is available on www.ftchratings.com

PARTICIPATION STATUS

The rated entity (and/or its agents) or, in the case of structured fnance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure.

APPLICABLE CRITERIA

Corporate Rating Criteria (pub. 28 Oct 2022) (including rating assumption sensitivity)

APPLICABLE MODELS

https://www.fitchratings.com/research/corporate-finance/fitch-affirms-alicorp-ratings-at-bbb-outlook-stable-27-01-2023

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