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To our shareholders

Dionisio Romero Paoletti

CHAIRMAN OF THE BOARD OF DIRECTORS

"Alicorp continued consolidating its leadership position in different business platforms and products categories with innovative and successful launches"

In 2012, Alicorp continued consolidating its leadership position in different business platforms and products categories with innovative and successful launches and four significant acquisitions both nationally and internationally. At the end of the year, sales increased by 5.1%.

One of the main priorities of the new management in 2012 were focused on strengthening the company’s long-term vision, tripling our company’s value, and defining the paths for our future growth. Our main goal for 2021 is invoicing US$ 5,000 million. The forecast for this growth purpose is that a very good part of this increase will come from our international operations. Our organic and inorganic growth will be focused on generating a major scale economy and developing our business platforms: farinaceous, oils, home care, personal care, sauces, cookies, breading, and aquaculture. For this reason, we will innovate in more and new ways to reach clients and consumers.

In 2012, we consolidated our leadership in Latin America, a very attractive region for multinational companies, growing the company faster through five important operations reaffirming our competitive advantages and allowing us to expand our platforms. In January 2012, we decided to retire from the Omega 3 business and transferred it to the company Ocean Nutrition Canada (ONC).

One of the first acquisitions of the year was made by the Animal Nutrition business. With the purpose of becoming the main Latin-American leader in the aquatic platform by 2021, we entered the fish category with the purchase of the Chilean company Salmofood located in Chiloé Island in Castro city, globally known as the Austral Capital of Salmon.

Our last quarter was very active regarding acquisitions in order to keep increasing our scale in Peru. We consolidated our presence in the northern zone of the country with the purchase of brands like Ucisa S.A. in the oils and grease derivatives category. With the acquisition of Incalsa S. A., owner of the brand Alpesa, Alicorp became the leader in sauces in the Food Service sector. This business has invoiced nearly S/. 364.4 million in only three years due to an increase in out-of-home consumption by millions of Peruvians.

BOARD OF DIRECTORS

At the end of the year, we consolidated our portfolio of cookies, pasta, and flour in Peru by purchasing Industrias Teal S.A. and its Sayón brand, an important Peruvian brand with more than 80 years of history and tradition. In addition, it allowed us to enter new categories to be strengthened in the future such as panettones, candies, and chocolates.

Alicorp’s performance has been quite good despite the difficult scenario for commodities that we had to face, thus, we grew by 6.5% in volume and 5.1% in sales in comparison to 2011, invoicing S/. 4,473.7 million, mainly for repositioning of our pasta, oils and detergents categories in Peru, as well as our increase in shampoo and toilet soaps in Argentina and the category of balanced food for schrimp in Ecuador. We kept a gross margin of 27.3% thanks to our strategy to purchase raw material, a very good diversification of our portfolio in value-added products and a constant search of efficiency and reduction of costs. We had an EBITDA of 12.5% over sales reaching S/. 561 million, very similar to last year thanks to the extraordinary expenses to restructure the top management. Our net profit went up by 6.3% and reached S/. 351.4 million, increasing the profit per share to S/. 0.41, 6.2% higher than the previous year. At the end of 2012, our share got a record price of S/. 8.30 which represented an increase of 38.3% over the previous year.

The year 2012 was also a year of recognition for Alicorp. We received an award for Second Place Company with the Best Reputation in Peru by the Monitor Empresarial de Reputación Corporativa - Merco Perú (Corporate Reputation Business Monitor) in alliance with Gestión newspaper. Also, our Huancaína AlaCena sauce won the Gold Effie in the Launch category and the campaign «Abrígate con Bolivar» won a Silver Effie in its category. It is also important to notice that our base mayonnaise Macbel and Alicorp’s On-line Service Platform “Gran Cocina” were awarded by Creatividad Empresarial 2012.

Regarding sustainable development, we continue to promote the integration of productive chains of chili, hot pepper, and wheat. We have trained 2,000 restaurants owners in Lima and Arequipa for two consecutive years by means of free business workshops: A Recipe for Success. We also launched a program to train bakery industrialists in order to support bread-making development in the country.

Education is the key to promote good habits regarding balanced food and hygiene. That’s how “La Radio Saludable” and Regional Health Offices of seven provinces in the Peruvian highlands trained more than 940 rural radio broadcasters, giving them useful advices to families with children under three years old as of 2012.

All the above-mentioned facts and excellent results obtained in 2012 were possible thanks to every single person from Alicorp’s team, who are always in constant motion, willing to move forward in order to fulfill our vision.

I am confident that Alicorp will continue strengthening its leadership in all our businesses and creating value for all its stakeholders in 2013.

I invite you to learn Alicorp’s history in 2012.