Inversiones La Construccion Sa · BCS:ILC
Inversiones La Construccion Sa — FY2023 Earnings Presentation
37 slides from Inversiones La Construccion Sa's earnings presentation, March 2024
Slide 1: Conference Call FY2023
Conference Call FY2023 /2024MAR MAR. /2024 1
Slide 2: Disclaimer
DISCLAIMER Forward-looking statements are based on the beliefs and assumptions of ILC’s management, and on information currently available. They involve risks and uncertainties because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investo
Slide 3: Agenda
AGENDA 1 2023 Milestones & Consolidated Results 2 Zoom-in by Division 3 ILC’s Financial Position 4 Wrap-Up and Conclusions MAR. /2024 3
Slide 4: 2023 Milestones & Consolidated Results
Chapter 2023 Milestones & 01 Consolidated Results MAR. /2024 4
Slide 5: Consistent Returns Over Time
CONSISTENT RETURNS OVER TIME PROFIT AND ROAE ILC 19.3% 18.4% 14.3% 14.5% 49.6% 18.3% 13.8% 12.0% 12.0% 10.8% 10.6% 17.0% 19.6% Recurring Profit Extraordinary Profit Ch$ bn. +24.6% 222.8 21.1 12.3 182.6 129.4 146.6 83.0 63.3 69.2 72.5 71.9 90.3 91.0 86.5 88.4 2012 2013 2014 2015 2016 2017 2018 2019 2
Slide 6: 2023 Milestones & Consolidated Results
2023 MILESTONES & CONSOLIDATED RESULTS ILC PROFIT BREAKDOWN Ch$ bn. 31.0 2.6 15.4 182.6 12.5 (1.8) 53.0 (23.2) 55.7 37.2 ILC Profit Standalone & 2023 Others 2023 Milestones: • Acquisition of 51% of the shares of Autofin S.A. • Alliance with Cleveland Clinic • Capital increase of Ch$25 bn. • On-track
Slide 7: Next Phase: Growth in Financial Business
NEXT PHASE: GROWTH IN FINANCIAL BUSINESS Business Consolidation Growth, Diversification and Growth in financial business Turnarounds 2012 2016 2017 2022 2023 2027 Foundation (2012) Acquisition (2013) Acquisition (2015) Acquisition (2016) Increase of stake Divestment MAR. /2024 Source: ILC 7
Slide 8: Value Generation Blocks
VALUE GENERATION BLOCKS ILC CONSOLIDATED RESULT BREAKDOWN: CH$ 182.6 BN Pensions 2023 25.5% 6.0% 26.8% 17.9% 23.6% Financial Profit Health 30% CHANGE IN OUR PORTFOLIO STRATEGY FROM AN EQUALLY WEIGHTED STRATEGY TO A NEW FOCUS Annuities Annuities Pensions Growth in financial Pensions business Z Bank H
Slide 9: Zoom-in by Division
Chapter Zoom-in by 02 Division MAR. /2024 9
Slide 10: Banking
MAR. /2024 Banking @® Banco . J internacional iKC
Slide 11: Outpacing the Industry with Room to Grow
OUTPACING THE INDUSTRY WITH ROOM TO GROW TOTAL LOANS YOY GROWTH 50% Banco Internacional 35% Dec. 2023 24.6% US$ 3.5 bn. 20% 5% 3.9% Industry -10% Dec. 2023 US$ 268.5 bn. 2015 2017 2019 2021 2023 MARKET SHARE BY SEGMENT 3.8x 2.18% 11.3x 2.3x 0.94% 0.75% 0.07% 0.05% 0.12% Commercial Consumer Mortgages
Slide 12: Prudent Risk Management Policies Have Supported Consistent Rating Upgrades
PRUDENT RISK MANAGEMENT POLICIES HAVE SUPPORTED CONSISTENT RATING UPGRADES SOLVENCY – BASEL INDEX COLLATERAL COVERAGE NON-PERFORMING LOANS CREDIT RISK RATINGS Banco Internacional Banco Internacional Banco Internacional Local (ICR/Feller) Industry Industry Industry 16.2% A AA/AA- 15.8% 15.5% 73.8% 75
Slide 13: Developing the Future Bank Through Innovative Digital Products
DEVELOPING THE FUTURE BANK THROUGH INNOVATIVE DIGITAL PRODUCTS RETAIL SEGMENT COMMERCIAL SEGMENT CURRENTS CONSUMER LOANS COMMERCIAL LOANS CREDIT LINES ACCOUNTS (# CLIENTS) (# CLIENTS) (# CLIENTS) (# ACCOUNTS) 1.9x 1.4x 1.3x 3,201 6,560 3,170 3,507 1,969 2,402 2,710 - 2022 2023 2022 2023 2022 2023 20
Slide 14: Sustained Growth in Profitability
SUSTAINED GROWTH IN PROFITABILITY MAIN FIGURES 2023 VS 2022 GROSS OPERATING RISK EXPENSES EFFICIENCY RESULT Ch$ bn. 7.9% -159 bps Ch$ bn. 17.4% 6.0 13.9 20.0 21.6 46.5% 44.9% 134.5 158.0 2022 2023 2022 2023 2022 2023 Banco Internacional Autofin Banco Internacional Autofin MAIN HIGHLIGHTS 2023: PROFI
Slide 15: Annuities
MAR. /2024 Annuities confuturo: iKC
Slide 16: Recovery of the Annuity Industry
RECOVERY OF THE ANNUITY INDUSTRY ANNUITY RATE VS PROGRAMED WITHDRAWAL RATE Rate (%) Dec. 2023: 4.71% 5% 4% Dec. 2023: 3% 3.21% 2% 1% - 2018 2019 2020 2021 2022 2023 Annuity Rate Programed Withdrawal Rate ANNUITY INDUSTRY PREMIUMS & MARKET SHARE (%) Growth (YoY) UF mm 14.5% Confuturo: 11.7% 114.8% 8.
Slide 17: A Flexible Sales Channel Strategy and Cost Efficiency
A FLEXIBLE SALES CHANNEL STRATEGY AND COST EFFICIENCY ANNUITIES SOLD BY CHANNEL SG&A AND SG&A OVER AUM UF mm 1.93% 1.98% 1.66% 1.65% 1.69% 11% 1.49% 7% 26% 24% 33% 33% 43% 11% 0.66% 0.57% 0.50% 0.44% 0.42% 0.42% 51% 27% 40% 82% 28% 63% 1.3 1.1 1.1 1.0 1.0 0.9 40% 27% 25% 29% 2018 2019 2020 2021 2022
Slide 18: Lower Investment Returns Primarily Attributed to Weaker Foreign Fund Performance
LOWER INVESTMENT RETURNS PRIMARILY ATTRIBUTED TO A WEAKER PERFORMANCE IN FOREIGN INVESTMENT FUNDS CHANGES IN THE INVESTMENT PORTFOLIO 3% 3% 4% 5% 13% 27% 25% 21% 13% 16% 23% 23% 69% 51% 44% 49% 3% 3% 4% 1% Dec. 2013 Dec. 2016 Dec. 2020 Dec. 2023 Cash and Others Real Estate Investment Foreign Investm
Slide 19: Lower Results Primarily Attributed to a High Historical Comparison Base
LOWER RESULTS PRIMARILY ATTRIBUTED TO A HIGH HISTORICAL COMPARISON BASE PROFIT & ROAE (%) Ch$ bn. -47.4% 26.7% 26.0% 19.9% MAIN HIGHLIGHTS 2023: • Growth in Annuity Premiums: 114.8% increase 12.1% 12.4% 11.5% 9.9% 133.1 • Focus on efficiency 8.4% 122.7 6.0% • Lower performance of 4.9% 80.9 foreign i
Slide 20: Pensions
MAR. /2024 eee Pensions iKC
Slide 21: Consolidating a Returns and Efficiency Regional Model
CONSOLIDATING A RETURNS AND EFFICIENCY REGIONAL MODEL AUM Investment Returns Taxable Income Efficiency(1) #2 #1 US$ 48.9 bn In 3 funds (L5Y) #1 35.8% #1 #4 US$ 3.9 bn In 3 funds (L5Y) #4 58.6% #1 #1 US$ 14.1 bn In 1 funds (L5Y) #4 59.8%(2) #2 in Andean Region with 4.6 million affiliates and US$ Impr
Slide 22: Improved Results in Line with Increase in Average Taxable Income
IMPROVED RESULTS IN LINE WITH THE INCREASE IN THE AVERAGE TAXABLE INCOME Taxable income per contributor Contributors +9.5% +21.2% mm -2.7% Ch$ bn. Efficiency Ch$ 1,391,039 +7.8% 1,270,297 5.97 5.81 1,148,106 +6.6% 222.1 239.4 -4.4% 93.4 87.6 1.02 0.97 AFP Habitat AFP Habitat Industry AFP Habitat Ind
Slide 23: Lower Results in Peru and Colombia
LOWER RESULTS IN PERU DUE TO WITHDRAWALS, A CHANGE IN FEE SCHEME AND IN COLOMBIA DUE TO HIGHER LEGAL COSTS Ch$ bn. Ch$ bn. Revenues Legal Reserve Results 2022 2023 2022 2023 +57.6% 3.1 -6.2% 1.3 61.0 38.7 32.9 30.8 (1.6) (5.2) Colfondos AFP Habitat Perú Colfondos AFP Habitat Perú MAIN HIGHLIGHTS 202
Slide 24: Expanding LatAm Footprint in Alliance with Prudential
EXPANDING LATAM FOOTPRINT IN ALLIANCE Voluntary products in a regional model WITH PRUDENTIAL Continuously looking for new opportunities… MAR. /2024 24
Slide 25: Health
MAR. /2024 QD VIDACAMARA iKC
Slide 26: Success in Initial Three Phases of Our 2025 Vision
SUCCESS IN INITIAL THREE PHASES OF OUR 2025 VISION Phase 1 Phase 2 Phase 3 Phase 4 REDESIGN OF THE CONSOLIDATION OF INSTITUTIONAL NETWORK NETWORK THE HEALTH ORGANITATION CONSOLIDATION BUSINESS NETWORK MEDICAL ROADMAP Ch$ bn. EBITDA AND EBITDA MARGIN REDSALUD 13.3% 12.2% 11.0% 10.6% 11.2% 10.8% 9.7%
Slide 27: Higher Demand of Outpatient Services Offset by Lower Inpatient Activity
HIGHER DEMAND OF OUTPATIENT SERVICES OFFSET BY LOWER INPATIENT ACTIVITY ACTIVITY LEVELS REDSALUD Medical Consultations Images Surgeries mm. mm. th. +7.1% +8.4% -3.8% 5.1 1.4 1.6 4.7 99.5 95.7 2022 2023 2022 2023 2022 2023 EBITDA AND EBITDA MARGIN BY CENTER TYPE Outpatient and Dental Centers Hospital
Slide 28: Reducing Regulatory Risk by Diversifying Sources of Income and EBITDA
REDUCING REGULATORY RISK BY DIVERSIFYING SOURCES OF INCOME AND EBITDA Revenue breakdown by insurer EBITDA by center type 2015 2023 30% 14% 13% 15% 13% 20% 22% 21% 25% 23% 19% Future growth will come 23% Ch$ 27.2 from outpatient 29% 29% 28% 28% 37% 45% bn. Ch$ 71.9 healthcare 27% 36% 41% bn. 47% 46%
Slide 29: Anticipating Changes in the Industry's Mix of Beneficiaries
ANTICIPATING CHANGES IN THE INDUSTRY’S MIX OF BENEFICIARIES TOTAL BENEFICIARIES CONSALUD + VIDA CÁMARA Th. Beneficiaries #3 1,036 1,068 1,056 1,058 1,035 1,035 949 976 Contributors #3 929 825 347 Growth (YoY) 329 349 361 282 291 391 263 519 Vida Cámara: 159 32.6% Drop (YoY) 666 666 666 685 707 721 7
Slide 30: Healthcare and Insurance Hedging Strategy
HEALTHCARE AND INSURANCE HEDGING STRATEGY HEALTH SECTOR NET PROFIT MAIN HIGHLIGHTS 2023: Ch$ bn. Health Sector Vida Cámara (Health Sector) Consalud (IFRS) Red Salud RedSalud: 48 • Maintained high level of demand for outpatient services 1 13 15 18 31 • Reduced Inpatient activity, partially 1 10 1 6 2
Slide 31: ILC's Financial Position
Chapter Financial Position 03 MAR. /2024 31
Slide 32: Well-Managed Debt Maturity and Liquidity Position
WELL-MANAGED DEBT MATURITY AND LIQUIDITY POSITION LIQUIDITY POSITION (DEC-2023) ILC’s AMORTIZATION PROFILE DEC-2023 144A- CLP$ bn. Bank Loans ILC-C ILC-H ILC-I Reg S 38.2% ILC-J ILC-K 144A- Reg S 300 225 Ch$ Investment 225.8 Portfolio 150 bn. 34.8% 75 - Cash & Equivalents 26.6% Total Net Debt NFD /
Slide 33: Great Performance of ILC Stock in 2023, Outperforming IPSA
GREAT PERFORMANCE OF ILC STOCK IN 2023, OUTPERFORMING IPSA PROFITABILITY INCLUDING DIVIDENDS 2023 STOCK PRICE - IPSA COMPANIES VS ILC 2023 vs 2022 112% Positive variation greater than 25% Positive variation lower than 25% 2023 vs 2022 Negative variation lower than 25% 88% IPSA Index 77% 17.8% 69% 64
Slide 34: Consistent and Attractive Dividend Yield
CONSISTENT AND ATTRACTIVE DIVIDEND YIELD Div/Share Dividend yield (over previous year’s closing price) ILC’s Average Ch$ IPSA's Average Dividend Yield 2013-2023 (%) Dividend yield 2013-2023 750 7.6% 631 650 600 518 Distributed since 449 450 19.8% IPO: 370 330 350 Ch$5,501 Per share 8.3% 8.6% 223 (78
Slide 35: Wrap-Up and Conclusions
Chapter Wrap-Up and 04 Conclusions MAR. /2024 35
Slide 36: Strategic Plan and Goals
STRATEGIC PLAN AND GOALS Potential 4th Growth in Consolidation of the Organic Growth Market Commercial Loans Healthcare Network Flexibility to Adapt Economic Value in Digital Approach in Voluntary Savings to Regulatory Spread Consumer Loans Changes Andean Region Analyze Potential Efficiency Inorgani
Slide 37: Conference Call FY2023
Conference Call FY2023 /2024MAR MAR. /2024 37
Inversiones La Construcción S.A. (ILC) — FY2023 Earnings Presentation on 6ix