CORPORATES

CREDIT OPINION25 May 2017

Update

RATINGS

Alicorp 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.

Analyst Contacts

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

Marianna Waltz, CFA 55-11-3043-7309MD-Corporate Financemarianna.waltz@moodys.com

Alicorp S.A.A.Credit Opinion Update

Summary Rating RationaleAlicorp’s rating is supported by its leading market position in Peru in key product categoriesthat generate around 64% of consolidated EBITDA, its high profitability and strong creditmetrics; and its extensive and hard to replicate distribution network. The rating also reflectsits broad product portfolio, and its experienced management team with a successful trackrecord of completing acquisitions. The rating considers the company's small size comparedto global industry peers, its limited geographic diversity given its concentration in Peru andcertain Latin American markets with weak economies, and its exposure to commodity pricevolatility.

Exhibit 1

Cash Flow MetricsAlicorp, S.A.A.

48 54 58

272 247

314

50 31 31

-14 14

75

114 103

54 38 34

(76)(92)

(77)

218 195

266

(150)

(100)

(50)

-

50

100

150

200

250

300

350

2012 2013 2014 2015 2016 LTM (03/17)

CFO Dividends Capex FCF

FFO: Funds From OperationsFCF: Free Cash FlowAll ratios are based on 'Adjusted' financial data and incorporate Moody's Global Standard Adjustments for Non-FinancialCorporations.Source: Moody's Financial Metrics™

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

Credit Challenges

» Modest geographic diversification

» Exposure to some weak economies in Latin America

MOODY'S INVESTORS SERVICE CORPORATES

Rating OutlookAlicorp's stable outlook reflects our expectation that the company's operating performance and credit metrics will continue to bestrong.

Factors that Could Lead to an Upgrade

» An upgrade could be triggered if the company's adj. debt/EBITDA is below 2.5 times and adj. EBIT/Interest Expense is above 5 timeson a sustained basis. To be considered for an upgrade the company should maintain strong liquidity and positive free cash flow.

Factors that Could Lead to a Downgrade

» A downgrade could be triggered if the company's debt/EBITDA remains above 3.5 times or if EBIT/Interest Expense declines below3.5 times. A deterioration in liquidity or operating performance, increased payouts to shareholders, large debt financed acquisitions,or integration challenges, could also lead to a downgrade.

Key Indicators

Exhibit 2

Alicorp, S.A.A.

3/31/2017(L) 12/31/2016 12/31/2015 12/31/2014 12/31/2013

Total Sales (USD Billion) $2.0 $2.0 $2.1 $2.2 $2.2

EBIT Margin 9.8% 9.6% 9.3% 5.8% 11.0%

Debt / EBITDA 2.0x 2.0x 2.7x 5.5x 2.7x

RCF / Net Debt 24.8% 22.8% 11.3% -2.0% 16.3%

EBIT / Interest Expense 5.3x 4.8x 3.0x 2.0x 4.2x

[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 itsmarket leadership due to (i) its broad product portfolio targeting all socioeconomic segments; (ii) its product innovation capacity; (iii)its extensive distribution network; and (iv) its strong brand recognition.

The company has 105 brands including premium, mainstream, and economic which allows it to reach a broader customer base withdifferentiated pricing strategy. In Peru, the company has leading market positions in several product categories that account for around64% of consolidated EBITDA. In Brazil, Argentina, and Ecuador, the company has strong market shares in some product categories,ranking between #1 to #3 positions.

Alicorp’s countrywide distribution network in Peru is a credit strength. In Peru, the company sells its products through the traditional(85%) and modern (15%) channels. Alicorp sells to 3rd. party exclusive distributors (45%), wholesalers (30%), to non-exclusivedistributors (10%), and directly to supermarkets (15%). In Chile, Brazil, and Ecuador the company has key regions coverage through 3rd.party distributors while in Argentina it operates through a proprietary distribution network.

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 25 May 2017 Alicorp S.A.A.: Credit Opinion Update

MOODY'S INVESTORS SERVICE CORPORATES

Alicorp benefits from economic growth and modest inflation that supports consumption in Peru. We estimate Peruvian GDP to growby 3.7% in 2017 and 4.5% in 2018 with inflation around 2.5% in 2017 and 2.7% in 2018. As a result, private consumption will grow ata 4% CAGR in 2016-2018.

AMPLE PRODUCT PORTFOLIO WITH GEOGRAPHIC DIVERSIFICATION

Alicorp´s products are sold under three different lines of business, which have different market dynamics: consumer goods (56% ofconsolidated revenues), B2B branded products (23% of consolidated revenues), and aquaculture (21% of consolidated revenues). Itslargest business segment, consumer goods is divided into two categories: food and home & personal care products, representing 68%and 32% of this business segment revenues respectively. Alicorp's diversification by product is high with each single product categoryrepresenting less than 19% of consolidated EBITDA. The largest categories are detergents and shrimp feed which each one contributeswith 18% of consolidated EBITDA. All other categories account for 10% or less, each one, of consolidated EBITDA

Alicorp has expanded its international operations over the last few years, but Peru remains its largest market accounting for 62% ofconsolidated revenues. Despite the beneficial effects from increased geographic diversification, the presence in weaker economies suchas Ecuador (B3 stable), Argentina (B3 positive) or Brazil (Ba2 stable) exposes Alicorp to inflationary environments and foreign exchangevolatility. Nevertheless, we view positively that close to 70% of Alicorp’s revenues come from high-rated countries Chile (Aa3 stable)and Peru (A3 stable).

STRONG CREDIT METRICS

Alicorp has strong credit metrics. During 2016 the company reduced debt and increased its EBITDA generation which led leverage(adj. debt/EBITDA) to decline to 2.0 times as of March 31, 2017 from 2.7 times as of December 31, 2015. We expect the company tocontinue reducing its long-term debt during 2017-2019 from its cash generation with leverage declining to around 1.5x by year end2018.

Exhibit 3

LeverageDebt / EBITDA

2.3x

2.7x

5.5x

2.7x

2.0x 2.0x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

2012 2013 2014 2015 2016 LTM (03/17)

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

Alicorp has low exposure to currency volatility as 89% of total debt is denominated in Peruvian Soles. The balance is denominated inUS Dollars (5%), Brazilian Reais (5%), and Argentinean Pesos (<1%). Alicorp’s long-term debt amortization includes PEN256 milliondue 2018, PEN97 million due 2019, PEN8 million due 2020, PEN361 million due 2023, and PEN500 million due in 2025-2030.

The company has increased its profitability over the last three years through operating efficiencies and improvement in its cashconversion cycle. EBIT margin, as adjusted by Moody’s, improved every year from 5.8% in 2014 to 9.6% in 2016 and to 9.8% in thetwelve months ended March 31, 2017. Consequently, interest coverage (adj. EBITA/interest expenses) improved to 5.3 times over thetwelve months ended March 31, 2017 from 2.0 times in 2014. Going forward, we expect EBIT margin to increase around 100bp in2018-2019. which will in turn further strengthen interest coverage above 6 times.

3 25 May 2017 Alicorp S.A.A.: Credit Opinion Update

MOODY'S INVESTORS SERVICE CORPORATES

Liquidity AnalysisAlicorp has adequate liquidity. As of March 31, 2017 the company had a cash position of PEN533 million that can cover 1.1x its short-term financial liabilities. The company does not have committed credit facilities, which are not standard practice in the Peruvianmarket. Instead, it relies on revolving uncommitted credit facilities to fund its working capital requirements totaling $988 million(75% available). We expect the company to generate free cash flow (defined as cash from operations minus dividends minus capex) ofaround PEN200-PEN250 million in 2017-2019.

Corporate ProfileAlicorp, S.A.A., headquartered in Lima, is a Peruvian manufacturer and distributor of consumer goods (food, home and personalcare), business-to-business (B2B) branded products (industrial baking flour for bakeries and food based products for restaurants), andaquaculture products (fish and shrimp feeding).

Alicorp has operations in Peru, Ecuador, Argentina, Chile, and Brazil and exports to other countries in Central America. The companyis majority owned and controlled by Grupo Romero (45.6% stake), one of the largest conglomerates in Peru. The balance is ownedby pension funds (26.5%), mutual funds (16.5%) and others (11.4%). Alicorp reported revenues of PEN6,781 million over the twelvemonths ended March 31, 2017.

Rating Methodology and Scorecard Factors

Exhibit 4

Rating FactorsAlicorp, S.A.A.

Consumer Packaged Goods Industry Grid [1][2]

Factor 1 : Scale and Diversification (44%) Measure Score Measure Score

a) Total Sales (USD Billion) $2.0 Ba $2.2 Ba

b) Geographic Diversification B B B B

c) Segmental Diversification Baa Baa Baa Baa

Factor 2 : Franchise Strength and Potential (14%)

a) Market Share A A A A

b) Category Assessment A A A A

Factor 3 : Profitability (7%)

a) EBIT Margin 9.8% B 9.4% B

Factor 4 : Financial Policy (14%)

a) Financial Policy Baa Baa Baa Baa

Factor 5 : Leverage and Coverage (21%)

a) Debt / EBITDA 2.0x A 1.7x A

b) RCF / Net Debt 24.8% Baa 35.6% A

c) EBIT / Interest Expense 5.3x Baa 5.5x Baa

Rating:

a) Indicated Rating from Grid Baa3 Baa3

b) Actual Rating Assigned Baa3

Current

LTM 3/31/2017

Moody's 12-18 Month Forward View

As of 5/19/2017 [3]

[1] All ratios are based on 'Adjusted' financial data and incorporate Moody's Global Standard Adjustments for Non-Financial Corporations.[2] As of 3/31/2017(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™

4 25 May 2017 Alicorp S.A.A.: Credit Opinion Update

MOODY'S INVESTORS SERVICE CORPORATES

Ratings

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

Outlook StableSenior Unsecured Baa3

Source: Moody's Investors Service

5 25 May 2017 Alicorp S.A.A.: Credit Opinion Update

MOODY'S INVESTORS SERVICE CORPORATES

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REPORT NUMBER 1072554

6 25 May 2017 Alicorp S.A.A.: Credit Opinion Update

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Analyst Contacts

Diana Gonzalez 52-55-1555-5305Associate Analystdiana.gonzalez@moodys.com

CLIENT SERVICES

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7 25 May 2017 Alicorp S.A.A.: Credit Opinion Update