Organizacion Cultiba Announces Third Quarter and Nine Months 2014 Financial Results
MEXICO CITY, Oct. 22, 2014 /PRNewswire/ -- Organizacion Cultiba, S.A.B. de C.V. ("Cultiba") (BMV: CULTIBAB), today reported consolidated financial results for the quarter and nine-month period ended September 30, 2014.
Select Operating and Financial Information |
||||||||
(Ps. in Millions) |
Third Quarter |
Nine Months |
||||||
2014 |
2013 |
% Chg |
2014 |
2013 |
% Chg |
|||
OPERATING HIGHLIGHTS |
||||||||
Total Case Volume (MM unit cases)1 |
422.4 |
409.2 |
3.2% |
1,230 |
1,223 |
0.6% |
||
Soft Drinks & Bottled Water |
213.9 |
206.0 |
3.9% |
610.8 |
608.0 |
0.5% |
||
Jug Water |
208.5 |
203.3 |
2.6% |
619.3 |
615.0 |
0.7% |
||
FINANCIAL HIGHLIGHTS (CONSOLIDATED) |
||||||||
Total Revenue |
10,010 |
8,514 |
17.6% |
28,876 |
25,521 |
13.1% |
||
Total Revenue excluding excise tax2 |
9,034 |
8,514 |
6.1% |
26,207 |
25,521 |
2.7% |
||
Income from Operations |
176 |
200 |
-12.0% |
197 |
664 |
-70.3% |
||
Operating Margin3 |
1.9% |
2.3% |
-40 bp |
0.8% |
2.6% |
-185 bp |
||
Total EBITDA4 |
699 |
855 |
-18.0% |
1,953 |
2,452 |
-20.4% |
||
EBITDA Margin3 |
7.7% |
10.0% |
-232 bp |
7.5% |
9.6% |
-216 bp |
||
Net Income |
-62 |
189 |
NM |
-217 |
561 |
NM |
||
Majority Net Income |
-86 |
41 |
NM |
-203 |
288 |
NM |
||
FINANCIAL HIGHLIGHTS (BEVERAGES) |
2014 |
2013 |
%Chg |
2014 |
2013 |
%Chg |
||
Revenue |
9,190 |
7,928 |
15.9% |
24,467 |
23,622 |
12.0% |
||
Revenue net of excise tax |
8,214 |
7,928 |
3.6% |
23,798 |
23,622 |
0.7% |
||
Income from Operations |
152 |
217 |
-29.9% |
228 |
496 |
-54.0% |
||
Operating Margin3 |
1.8% |
2.7% |
-90 bp |
0.95% |
2.0% |
-105 bp |
||
EBITDA |
696 |
765 |
-9.0% |
1,834 |
2,043 |
-10.2% |
||
EBITDA Margin3 |
8.5% |
9.6% |
-118 bp |
7.7% |
8.6% |
-94 bp |
||
Non-recurring expenses |
153 |
- |
307 |
- |
||||
Net Income |
50 |
310 |
-84% |
-26 |
564 |
NM |
||
11 unit case = 24 servings of 8 US fluid oz each; 5.678 liters. 2Excise tax applicable to beverages division; 1 peso per liter for all beverages containing caloric sweeteners. 3All margins calculated as a percentage of revenues excluding excise tax. 4EBITDA = Net income plus (1) Depreciation and amortization, (2) Net financing cost, (3) Income (loss) from share in joint ventures and (4) Provision for taxes |
FINANCIAL AND OPERATING HIGHLIGHTS
- Continued improvements in marginal contribution; gross profit per case increased 5.2% year-over-year in 3Q14 and 5.5% year-over-year in the first nine months of 2014
- Non-recurring expenses in the beverages division related to cost-savings plan were Ps. 153 million in 3Q14 and Ps. 307 million in the nine months ended September 30 2014
- Consolidated EBITDA of Ps. 699 million in 3Q14 decreased 18.0% year-over year; impacted by delayed price increases to align with inflation and material non-recurring expenses related to savings program
- Gradual volume recovery in the beverages division; total case volume rose 3.2% year-over-year in 3Q14 and 0.6% year-over-year in the nine months accumulated through September 30 2014; bottled beverages slowly recovering in the quarter from the new excise tax despite slow economic growth
- Net loss of Ps. 62 million in 3Q14 and Ps. 217 million in the first nine months of 2014 impacted by extraordinary events compared to prior year; tax provisions in 2014 vs. non-cash tax benefits in 2013, and charges related to sugar mill in which the sugar division has a non-controlling interest of 49%
CEO COMMENT
Commenting on the quarter's results, Mr. Juan Gallardo, Chairman and CEO stated, "Amidst all the challenges that 2014 has brought to the industries in which we operate, we continue staying the course of our business strategy. In our beverages division, a slow economic recovery has taken a toll on volume growth; and the implementation of a new excise tax on sugared soft drinks has made it more difficult to increase prices above inflation in most categories. Even within these challenges we have sustained our modernization and excellence programs by consistently investing in technology and innovation to make our infrastructure, portfolio, and processes ever more competitive for the future in which we envision ourselves operating. Keeping up with our goals has required extraordinary efforts from our management and exceptional execution from our operations teams. Our cost-efficiencies program remains on target and has enabled us to sustain profitability and somewhat mitigate the challenges in our top line. This program has resulted in a leaner cost structure that eventually will be further strengthened by volume recovery to foster greater margin expansion. In addition, we continue consolidating our portfolio through an efficient price-packaging architecture and focusing execution on winning brands, introducing new line extensions to further enhance brand equity in those brands. Such is the case of Epura Bebe, which we recently launched to the market under the umbrella of our successful water brand with a very good consumer response. Portfolio innovations will continue to come through the end of this year and the first half of 2015 as part of our plan to meet top-line growth goals and continue outperforming the industry, even within a slow consumption environment.
Our sugar division has successfully transitioned through difficult times in 2014. Within this environment we have been able to continue improving efficiencies to position the mills that we operate on a very competitive place as low-cost producers. Additionally, through timely investments that foster cost savings, the sugar division has been able to preserve profitability in a very challenging year and continues to strengthen its balance sheet according to plan," concluded Mr. Gallardo.
3Q14 FULL REPORT
To read the full report in English please follow the link: http://cultibaphp.abardev.net/eng/1/events-and-presentations/press-releases
To read the full report in Spanish please follow the link: http://cultibaphp.abardev.net/esp/1/eventos-y-presentaciones/comunicados
CONFERENCE CALL INFORMATION
Management of Cultiba will host a conference call with the investment community to discuss third quarter 2014 results. The call will take place on Thursday, October 23, 2014 at 1:00 p.m. Mexico City Time (2:00 p.m. ET Time). To access the call, please dial 1-888-510-1785 if calling from the United States or 001-800-514-1067 if calling within Mexico or 1-719-457-2689 if calling from other countries. The passcode is 6863710. The conference call will also be webcast and can be accessed from the Company's website www.cultiba.mx in the Events and Presentations section or from the following link: http://public.viavid.com/index.php?id=111346. A replay will be available from 4:00 p.m. Mexico City Time (5:00 p.m. ET Time) on October 23, 2014 until 10:59 p.m. (Mexico City Time; 11:59 p.m. ET Time) on October 30, 2014. The dial-in info for this replay is 1-877-870-5176 from within the United States and 1-858-384-5517 from outside the United States. The passcode for the replay is 6863710.
ABOUT CULTIBA
Organizacion Cultiba, S.A.B. de C.V. is a holding company with a majority interest in one of Mexico's largest bottlers of soft drinks and jug water, and the exclusive bottler of PepsiCo beverage products in Mexico. Carbonated, non-carbonated soft drinks and jug water are marketed under its beverages division's own brands as well as third-party brands. Its beverages division has 44 bottling facilities in Mexico and is the only bottler with nationwide distribution. As a holding company, Cultiba also owns and operates 3 sugar mills and has a 49% interest in a first one in the western region of Mexico. The Company is listed on the Bolsa Mexicana de Valores, where it trades under the symbol CULTIBA. For more information, please visit www.cultiba.mx.
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SOURCE Organizacion Cultiba, S.A.B. de C.V.
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