CORPORATES

CREDIT OPINION19 May 2016

Update

RATINGSAlicorp S.A.A.

Domicile Peru

Long Term Rating Baa3

Type Senior Unsecured - FgnCurr

Outlook Stable

Please see the ratings section at the end of this reportfor more information.The ratings and outlook shownreflect information as of the publication date.

Contacts

Alonso Sanchez 52-55-1253-5706VP-Senior Analystalonso.sanchezrosario@moodys.com

Dora Serrano 52-55-1555-5314Associate Analystdora.serrano@moodys.com

Peter H. Abdill, CFA 212-553-4024MD-Corporate Financepeter.abdill@moodys.com

Alicorp S.A.A.Credit Opinion: Alicorp S.A.A.

Summary Rating RationaleAlicorp, a distributor and manufacturer of consumer goods company, Baa3 rating issupported by its leading market position in Peru in key product categories that generateclose to 60% of consolidated EBITDA, its high profitability, and its extensive and hard toreplicate distribution model in Peru, The rating also reflects its broad product portfolio,and its experienced management team with a successful track record of completingacquisitions. The rating is constrained by the company's small size compared to globalindustry peers, its limited geographic diversity given its concentration in Peru and certainLatin American markets, and its exposure to commodity price volatility. The rating alsoreflects the company's tight approach to short-term debt management, with cash on handcovering 57% of the next 12-month maturities as of March 31, 2016. Although Alicorp hasshown good market access in the last few years, we consider that the low liquidity cushionincreases the company´s exposure to refinancing risk.

Exhibit 1

ProfitabilityAlicorp S.A.A.

Exhibit 2

LeverageAlicorp S.A.A.

All ratios are based on 'Adjusted' financial data andincorporate Moody's Global Standard Adjustments for Non-Financial Corporations.Source: Moody's Investors Service

All ratios are based on 'Adjusted' financial data andincorporate Moody's Global Standard Adjustments for Non-Financial Corporations.Source: Moody's Investors Service

Credit Strengths

» High profitability despite smaller size when compared to global industry peers

» Leading market position in Peru, its largest market, with extensive and difficult toreplicate distribution network

» Good product diversification

MOODY'S INVESTORS SERVICE CORPORATES

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 19 May 2016 Alicorp S.A.A.: Credit Opinion: Alicorp S.A.A.

Credit Challenges

» Exposure to commodity price volatility

» Limited geographic diversification

» Ongoing event risk mitigated by management's proven track record of integrating acquisitions

Rating OutlookAlicorp's stable outlook reflects our expectation that the company's operating performance will continue to be strong, and that thecompany's credit metrics will improve over the next 12-18 months.

Factors that Could Lead to an UpgradeAn upgrade could be triggered if the company's leverage improves such that debt/EBITDA declines below 2.5 times. The companyshould demonstrate a strong liquidity position and positive free cash flow on a sustained basis to be considered for an upgrade.

Factors that Could Lead to a DowngradeA downgrade could be triggered if the company's debt/EBITDA remains above 3.5 times or if it does not show a deleveraging trend. Adeterioration in liquidity or operating performance, increased payouts to shareholders, large debt financed acquisitions, or integrationchallenges, could also lead to a downgrade.

Key Indicators

Exhibit 3

Key IndicatorsAlicorp S.A.A.

[1] All ratios are based on 'Adjusted' financial data and incorporate Moody's Global Standard Adjustments for Non-Financial Corporations.Source: Moody's Financial Metrics™

Detailed Rating ConsiderationsLEADING MARKET POSITION IN PERU AND AMPLE DISTRIBUTION NETWORK

Alicorp has a leading market position in Peru in its key product categories that include industrial baking flour, edible oils, laundrydetergents, pasta, cookies & crackers, shortenings, and mayonnaise, among others. In its international business, it also has a strongmarket position (ranking mostly #2 or #3) in product categories such as pasta, hair care, laundry detergents, personal care soap, andmayonnaise.

Despite competing with large multinational companies and with local enterprises, Alicorp has been able to maintain its marketleadership due to (i) its broad product portfolio with over 105 brands targeting all socioeconomic segments; (ii) its product innovationcapacity launching an average of 18 new products per year over the last five years; (iii) its extensive distribution network reaching over260,000 points of sale in the traditional channel and over 170 supermarkets; and (iv) its strong brand recognition.

Alicorp has a large distribution network in Peru covering the entire country. Sales are done both through the modern and traditionalchannels, with around 12% of revenues coming from the modern channel. Most of sales are to wholesalers (48%), 3rd party exclusivedistributors (32%), and to non-exclusive distributors (12%). In Chile, Brazil, and Ecuador the company has key regions coverage through3rd party distributors while in Argentina it operates through a proprietary distribution network.

MOODY'S INVESTORS SERVICE CORPORATES

3 19 May 2016 Alicorp S.A.A.: Credit Opinion: Alicorp S.A.A.

LIMITED GEOGRAPHIC DIVERSIFICATION BUT GOOD PRODUCT DIVERSIFICATION

Alicorp has expanded its international operations over the last few years, although Peru still accounted for 60.5% of its consolidatedrevenues in 2015 (vs. 61.2% in 2014 and 62.9% in 2013).

Despite the beneficial effects from increased geographic diversification, the presence in weaker economies exposes Alicorp toinflationary environments and foreign exchange volatility. In the case of Argentina, EBITDA margin for the consumers' goods divisionwas lower than 1% by the end of 2015.

In terms of product diversification, Alicorp´s products are sold under three different lines of business: consumer goods (56% ofconsolidated revenues), B2B branded products (22% of consolidated revenues), and aquaculture (22% of consolidated revenues),which have different market dynamics. Its largest business segment, consumer goods is divided into two categories, food and home &personal care products, representing 71% and 29% of this business segment revenues respectively.

Alicorp's diversification by product is high with no single product category representing more than 16% of consolidated EBITDA.Some of the largest categories are pasta (16% of consolidated EBITDA) and household & industrial baking flour (12% of consolidatedEBITDA). Other large product categories representing less than 10% of consolidated EBITDA each include: detergents, edible oils, bulkoil, shrimp feed, sauces, cookies & crackers, hair care, margarines, pannetones, RTE cereal, and snack bars.

CREDIT METRICS IMPROVED IN 2015

As of December 2015, Alicorp's credit metrics improved mainly due to a reduction in USD-denominated debt to 11.6% in December31, 2015 from 26.2% in December 31, 2014, efficiencies reached in working capital needs and higher cash flow generation. EBIT marginas adjusted by Moody's improved to 9.5% in 2015 from 5.8% in 2014; consequently, interest coverage (adj. EBITA/interest expenses)slightly improved to 1.7 times in 2015 from 1.6 times in 2014. We expect EBIT margin remains at 9.5% for next 18 months and interestcoverage of 5.7 times. Alicorp's leverage decreased in line with company's strategy to reduce leverage improving to 2.6 times in 2015from 5.5 times as of December 31, 2014. We expect further reduction at 1.9 times for next 18 months.

On the other hand, we viewed positive Alicorp´s public placement in local currency on March 2016 of USD70 million (PEN230.3million) by issuing a simultaneous 3-year USD21.2 million (PEN70.3 million) and 7-year USD48.4 million (PEN160 million) bonds,allowing the company to refinance more than USD60.5 million (PEN200 million) short-term debt to medium and long-term debt,accomplishing more than 50% of its refinancing plan for the year. This placement reduced its exposure to foreign currency volatility(USD-denominated debt reduced to 13.3% of total debt as of March 31, 2016) and slightly improved Alicorp's maturity profile. During2016 the company will repay USD85 million (PEN281 million) of its short term debt. Moreover, the company has flexibility in its capitalspending as its maintenance needs of around USD60-72 million per year.

EXECUTION RISK MITIGATED BY MANAGEMENT'S LONG EXPERIENCE IN COMPLETING ACQUISITIONS

Alicorp has grown through a number of acquisitions in the past several years and thus encounters execution risk in integratingits acquired businesses. This risk is partially mitigated by senior management's track record of successful integration of acquiredbusinesses. Since the mid 90's, successful integrations have included Okebon in 2010, Italo Manera and Pastas Especiales in 2011, andSalmofood in 2012.

In order to strengthen its Peruvian operation, the company acquired Grupo Incalsa (December 2012), Industrias Teal (January 2013),and Global Alimentos (April 2014). In addition, to further expand its international business, Alicorp acquired Pastificio Santa Amaliain Brazil in February 2013. We view these acquisitions to be in line with Alicorp's business strategy as they incorporated new leadingbrands to its product portfolio; added new product categories such as cereals, panettones, confectionary, and chocolates; and createdcost benefits by increasing its purchase power with suppliers. We do not expect further material M&A activity, since Alicorp reached itstarget to expand its international business to up to 40% of consolidated revenues.

Liquidity AnalysisAlicorp has adequate liquidity. As of March 31, 2016 the company had a cash position of PEN176 million (USD53 million) and PEN306million (USD92 million) in short-term financial liabilities. The company does not have committed credit facilities, which are notstandard practice in the Peruvian market. Instead, it relies on revolving uncommitted credit facilities to fund its working capital

MOODY'S INVESTORS SERVICE CORPORATES

4 19 May 2016 Alicorp S.A.A.: Credit Opinion: Alicorp S.A.A.

requirements totalling USD934 million, with outstanding balance of USD80.3 million. We expect the company to generate free cashflow of PEN206 million (USD62 million) and PEN200 million (USD60 million) in 2016 and 2017 respectively.

ProfileAlicorp, S.A.A. (Alicorp), headquartered in Lima, is a Peruvian manufacturer and distributor of consumer goods (food, home andpersonal care), business-to-business (B2B) branded products (industrial baking flour for bakeries and food based products forrestaurants), and aquaculture products (fish and shrimp feeding). Alicorp has operations in Peru, which represents 62.7% of revenues,with the balance coming mainly from Ecuador (11.2%), Argentina (8.3%), Chile (7.3%), Brazil (6.8%), among others (3.7%).

The company is majority owned and controlled by Grupo Romero, one of the largest conglomerates in Peru, which as of December2015 has a 42.2% ownership of Alicorp's stake. The balance is owned by pension funds (26.1%), mutual funds (16.3%) and others(15.4%). As of LTM March 31, 2016, Alicorp had revenues of PEN6.5 billion (USD2.0 billion).

Rating Methodology and Scorecard Factors

Exhibit 4

Rating FactorsAlicorp S.A.A.

[1] All ratios are based on 'Adjusted' financial data and incorporate Moody's Global Standard Adjustments for Non-Financial Corporations.[2] As of 3/31/2016(L)[3] This represents Moody's forward view; not the view of the issuer; and unless noted in the text, does not incorporate significant acquisitions and divestitures.Source: Moody’s Financial Metrics™

Ratings

Exhibit 5Category Moody's RatingALICORP S.A.A.

Outlook StableSenior Unsecured Baa3

Source: Moody's Investors Service

MOODY'S INVESTORS SERVICE CORPORATES

5 19 May 2016 Alicorp S.A.A.: Credit Opinion: Alicorp S.A.A.

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MOODY'S INVESTORS SERVICE CORPORATES

6 19 May 2016 Alicorp S.A.A.: Credit Opinion: Alicorp S.A.A.

Contacts

Alonso Sanchez 52-55-1253-5706VP-Senior Analystalonso.sanchezrosario@moodys.com

Dora Serrano 52-55-1555-5314Associate Analystdora.serrano@moodys.com

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