Grupo De Inversiones Suramericana S.a. · BVC:GRUPOSURA
Grupo De Inversiones Suramericana — Grupo SURA — Q1 2019 Earnings Presentation
61 slides from Grupo De Inversiones Suramericana's earnings presentation, June 2019
Slide 1: Grupo SURA Corporate Presentation Q1-2019
Grupo SURA Corporate Presentation Q1-2019
Slide 2: Disclaimer
Disclaimer The forward-looking statements contained herein are based on Management’s current forecasts and outlook. For better illustration and decision-making, figures for Suramericana, SURA Asset Management and its subsidiaries are administrative rather than accounting, and therefore may differ fr
Slide 3: Latam Economies
Latam Economies CHILE COLOMBIA PERU MEXICO Mining activity afecting Continue on a mild Economic activity More uncertain growth, but gradual recovery remained soft external context improvement still expected 3.1% 3.4% 3.8% 0.8% - 1.8% GDP GDP GDP GDP 3.0% 4.25% 2.75% 8.25% Current Policity rate Curre
Slide 4: Leading Financial Services Group in Latam
Leading Financial Services Group in Latam with a solid and diversified portfolio 11 countries 51 million clients #1 PENSION FUND #1 INSURANCE #1 COLOMBIAN INDUSTRIAL MANAGER COMPANY BANK INVESTMENTS in Latam, with a in Colombia, with an with a leading with relevant positions growing voluntary establ
Slide 5: Diversified Investment Portfolio
Diversified Investment Portfolio and other investments Cement, energy Insurance, trends and infrastructure and risk management 35.2% S TAKE * 1.4% 81.1% S TAKE 11.9% 19.6% 11.9% USD Processed food 11.0bn 35.2% S TAKE 26.6% Pensions, asset and 28.7% wealth management 83.6% S TAKE Universal banking 46
Slide 6: Our Portfolio
OUR PORTFOLIO Estimated value 1.3 0.2 11.0 1.3 9.5 2.9 1.6 2.2 3.2 SURA AM SURAMERICANA BANCOLOMBIA GRUPO GRUPO OTHER PORTFOLIO DEBT PORTFOLIO CAP. NUTRESA ARGOS VALUE (HOLDING) VALUE (-) BURSÁTIL DEBT M AR K E T C AP I TAL I Z AT I O N SHARES ADTV COMMON SHARE (Mar. 31, 2019) (COMMON + PREF) PRICE
Slide 7: History & Growth Stages
History & Growth Stages INSURANCE INTERNATIONAL LEADERSHIP EXPANSION in Colombia Multi Latin, financial services group 1 9 4 4 / 1 9 9 0 2 0 0 7 / 2 0 1 6 1 9 9 0 / 2 0 0 7 2 0 1 7 - FINANCIAL FOOTPRINT SERVICES OPTIMIZATION leader in Colombia divestment of annuities business (Chile and Peru) 7
Slide 8: Building a Regional Platform with a Long Term View
Building a Regional Platform with a Long Term View CREATING LONG BECOMING THE AND THE 4TH WITH A FOCUS ON TERM RELATIONS LARGEST PENSION FUND LARGEST LATAM FINANCIAL STRENGTH WITH OUR CLIENTS MANAGER IN LATAM INSURANCE GROUP # of clients AUM Gross Dividends from pension written premiums received fro
Slide 9: Geographic Footprint
Geographic Footprint P O P U L AT I O N CLIENTS FINANCIAL SERVICES 520MM 51MM +1.1% CAGR (2000-2018) I N 11 C O U N T R I E S P E N E T R AT I O N * INSURANCE PENSION BANKING 3.1% vs. 7.8% 31% vs. >80% ~ 4 8 % vs. >150% for advanced countries for US and UK for US and EU D R I V E R S ECONOMIC MIDDLE
Slide 10: Corporate Strategy
Corporate Strategy Purpose: Create well-being and sustainable development for people, organizations and society. Aspiration: to become a referent Latin American Group in the financial services sector, thanks to our ability to evolve and provide superior added value to shareholders and society. STRAT
Slide 11: Portfolio Management Strategy
Portfolio Management Strategy SHAREHOLDER VALUE RETURN ON CAPITAL GROW TH STRATEGIC PROACTIVE CORPORATE ADDING SYSTEMATIC CAPITAL MANAGEMENT AT ACQUISITIONS DIVESTITURES VALUE TO UNITS ALLOCATION A GRANULAR LEVEL BE IN GOOD BUSINESSES BE A BETTER OWNER • Focus on value • After an intensive • Underst
Slide 12: Grupo SURA's Financials Evolution
Grupo SURA’s Financials Evolution CONSOLIDATED REVENUES* HOLDING COMPANY RECEIVED DIVIDENDS 316 331 6.2% -0.8% 3.2% ~3.5x 290 268 31.2% 6,184 6,133 6,328 2010 Dividends 256 5,825 189 Bancolombia 4,441 173 S U R A AM 140 G r u p o Ar g o s 93 95 Grupo Nutresa Protección Suramericana Other 2015 2016 2
Slide 13: Grupo SURA Individual Debt
Grupo SURA Individual Debt DEBT 550 M AT U R I T Y P R O F I L E » C R E D I T R AT I O S » NET DEBT/ 300 DIVIDENDS (FTM) 220 63 77 141 52 91 31 31 4.65x - - Max. 5x 2019 2020 2021 2022 2023 2024 2026 . 2029 2030 . 2049 BANKS INTERNATIONAL LOCAL BONDS REPOS LIQUIDITY BONDS 1.2x » F I N A N C I A L D
Slide 14: Highest Net Income Figure
HIGHEST NET INCOME FIGURE In the last 16 quarters, driven by positive results in the different business lines CONSOLIDATED OPERATING REVENUES Q1 -2019 NET INCOME Businesses continue USD • Operating • Fx effect at USD with positive dynamics growth holding company in growth and 1.6 bn 178.6 MM operati
Slide 15: Positive Contribution of All Businesses
POSITIVE CONTRIBUTION OF ALL BUSINESSES To growth in consolidated net income growth GRUPO SURA & OTHER* USD +16.0 MM +80.6% 21.7 0.6 0.3 (1.8) (4.8) +46.6% 178.6 27.5 +72.6% 30.6 +17.6% 5.6 98.9 PARENT COMPANY’S NET INCOME USD 159.4 MM 85.9% NET NET INCOME NET INCOME EQUITY FX EFFECT ADMIN. INTEREST
Slide 16: Suramericana
Suramericana #4 LATAM MULTICHANNEL DIVERSIFIED INSURANCE APPROACH BUSINESS MODEL GROUP developing new Geography with an established channels throughout growth platform in 9 the region 35% countries of GWP outside Colombia #1 INSURANCE 22,100 Business lines COMPANY agents 46% P&C 20,400 in Colombia w
Slide 17: Corporate Strategy
Corporate Strategy Provide well-being, Human talent Increase current clients’ Sustainable ROE competitiveness and and Trends & Risks loyalty, to drive attraction and above cost of equity sustainability to people Management growth of new clients and businesses ENVIRONMENT EMERGING RISKS CONSUMER AND
Slide 18: Competitive Strategy
Competitive Strategy WE COMPETE IN WE MANAGE HUMAN VALUE OPERATIONAL + ALLIANCES REGULATION TECHNOLOGY CAPITAL TALENT PROPOSITION MODEL S U S TAI N AB I L I T Y OPERATING EFFICIENCY L O N G - TE RM R E L AT I O N S VAL U E C R E AT I O N 18
Slide 19: Design
Design Today´s markets Trends MANAGE Strategic UNCERTAINTY Emerging Operational Risks FROM SOLVE TO EMPOWER BALANCE FINANCING - MANAGING Segments Products Finance Solutions Manage Competence
Slide 20: Design
Design SURA today Trends MANAGE Strategic UNCERTAINTY Emerging Operational Risks FROM SOLVE TO EMPOWER BALANCE FINANCING - MANAGING Segments Products Finance Solutions Manage Competence
Slide 21: Design
Design SURA in the future Trends MANAGE Strategic UNCERTAINTY Emerging Operational Risks FROM SOLVE TO EMPOWER BALANCE FINANCING - MANAGING Segments Products Finance Solutions Manage Competence
Slide 22: Common focus in all countries
Common focus in all countries • Ability to read the eviroment and • Whole life solutions CONSUMER trends SOLUTIONS • UY, MX 2018 • Understand how social trends are • ARG, CH 2019 changing consumer behavior • BR 2020 • Dynamic multidimensional • Focus on SME segment segmentation (DMS) • Empresa SURA
Slide 23: Suramericana's Financials Evolution
Suramericana’s Financials Evolution OPERATING REVENUES CLAIMS AND EXPENSE RATIO 3.9% 3.0% 4,994 93.3% 92.3% 94.6% 93.4% 93.8% 22.4% 4,849 4,665 55.2% 3,810 833 1,035 1,089 59.4% 60.4% 59.4% 54.8% 53.7% 697 3,831 3,814 3,905 2,455 3,113 579 15.6% 16.6% 15.5% 15.3% 15.1% 1,876 2015 2016 2017 2018 2019
Slide 24: Suramericana Continues Consolidating
SURAMERICANA CONTINUES CONSOLIDATING Its regional platform and posted growth in operating results and net income RETAINED PREMIUMS + REVENUES WRITTEN REVENUES FROM TECHNICAL NET INCOME SERVICES RENDERED 2019 PREMIUMS SERVICES RESULT GROWS RENDERED USD 3% El Salvador 1% Rep. Dominicana USD USD 917 MM
Slide 25: SURA Asset Management
SURA Asset Management MANDATORY SAVINGS AND ASSET PENSION INVESTMENTS MANAGEMENT Stable cash flow Underpenetrated Regional platform AUM (bn) generation business business with high connecting Latam to 43 growth potential the world 33 28 88% 6% 6% AUM AUM AUM 20 3 5 AUM AUM AUM USD 123 bn USD 9.4 bn U
Slide 26: Corporate Strategy
Corporate Strategy OUR PURPOSE Helping our clients to achieve their dreams and goals STRATEGIC GUIDELINES » Our client in the center of our strategy » Core guidelines for the development of our businesses » Capacity development through transversal enabling strategy guidelines ALIGNING OUR BUSINESSES
Slide 27: Sustainability of Mandatory Business
Sustainability of Mandatory Business Relationship with stakeholders, seeking Financial and pension Efficient and innovative New business and the improvement of education Business Models. value offer for retirees. pension systems and its understanding . KEY FIGURES Q1-2019 COMMISSION OPERATING INVEST
Slide 28: Transformation of Wealth Management Business
Transformation of Wealth Management Business Brand positioning Differentiated advice . Products, solutions Attraction of new “Inversiones SURA”. and platforms clients and cross-sell increasing value to existing clients. proposition. KEY FIGURES Q1-2019 OPERATING OPERATING AUM REVENUES EARNINGS USD 1
Slide 29: Development of the Asset Management Business
Development of the Asset Management Business Regional platform and High standards in Relationship with business model. portfolio management institutional clients and backed by SURA’s product development reputation. in Latam. KEY FIGURES Q1-2019 COMMISSION OPERATING AUM INCOME EARNINGS USD 13.5MM USD
Slide 30: SURA AM's Financials Evolution
SURA AM’s Financials Evolution AUM COMMISSION INCOME 131,839 140,348 658 668 126,771 595 620 567 73 102,278 106,780 52 65 73 45 585 594 521 543 555 4.9% 4.3% 6.1% 1.5% CAGR 4.4% 18.7% 4.0% 6.5% Mandatory 4.1% Voluntary 15.9% 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Mandatory pension LTM Vol
Slide 31: SURA AM: Steady fee growth and return on legal reserves
SURA AM: Steady fee growth and return on legal reserves drive Q1 results 8% Investment Management Unit 4% El Salvador TOTAL NET INCOME Annuities CLIENTS (CONTRIB. TO G.SURA) business in USD Chile isn´t 23% Protección 30% Chile TOTAL AUM consolidated in 20.2 million 73 million Q1-2019 results USD 5%
Slide 32: Bancolombia
Bancolombia COLOMBIA’S LEADING OVER 14 MM CLIENTS FINANCIAL INSTITUTION with access to a strong with a strong presence in distribution network Central America 5,954 ATMs, 1,011 branches and 12,657 banking kiosks LOANS FUNDING MARKET SHARE COLOMBIA SALVADOR PANAM A Loans Loans Loans 26.4% 26.1% 16.0%
Slide 33: Grupo Nutresa
Grupo Nutresa LARGEST PROCESSED PRESENCE IN 72 FOODS GROUP IN COUNTRIES, owns 30 COLOMBIA production plants in Colombia, STRONG as measured by market 16 outside of Colombia and its BRANDING share in all of the market own distribution network in 14 WITH VALUE segments it serves countries ADDED PRODUC
Slide 34: Grupo Argos
Grupo Argos STRATEGIC FOCUS SOLID TRACK RECORD HOLDING COMPANY in Cement, Energy, Road building regional platforms with a solid and articulated and Airport Concessions portfolio with USD 14.5 Cement and RMC* billion in AUM # 1 in Colombia With a balanced portfolio in # 2 in RMC and # 4 in regions, c
Slide 35: SURA Ventures
SURA Ventures FINTECH Robo-advisory Personal finance platform Mortgage digital market place H E ALT H T E C H Health tech operator Optimizing Access to health systems INSURETECH Digital insurance Mobile sensor data for On-demand Health ecosystem – road safety insurance preventive approach B2B VC FUN
Slide 36: Appendix
37 » APPENDIX GRUPO surda WW 7 A
Slide 37: Diversification
Diversification DIVERSIFIED DIVIDEND STREAM CONSOLIDATED FIGURES Grupo Argos 9% Country Clients Revenues Net Income Assets Grupo Nutresa 10% COLOMBIA 28 56.5% 52.5% 50.6% SURA Asset Management By 43% CHILE 4 16.4% 14.4% 27.5% Company Bancolombia MEXICO 8 10.1% 18.7% 9.6% 21% PERÚ 2 2.2% 9.5% 4.4% Su
Slide 38: Shareholding Structure
Shareholding Structure 27.0% Gru po Argos and 33.5% subsidiarie s Total Outstanding Shares 10.5% Gru po Nutresa 13.0% 28.8% Colombian Pe nsion 581,977,548 21.8% Funds (COMM) (COMM + PREF) Outstanding Outstanding 15.8% Inte rnational Funds 14.2% Common Shares Pref. Shares 4.1% Retail Investo rs 80.6%
Slide 39: Cross Holding Structure
Cross Holding Structure FINANCIAL SERVICES 13% 34%* 35% 35% PROCESSED FOOD INFRASTRUCTURE 12% 10% 40 Stakes in common shares as of December 31, 2018 *Includes stake held in Grupo SURA by Cementos Argos which owns 6% of Grupo SURA’s common shares.
Slide 40: Mandatory Pension Fund Segment
Mandatory Pension Fund Segment Contributions to pension funds are Steadily increasing revenues driven AUM tend to be stable, mandatory and correlated to size of by contributions to funds / assets as pensions are “sticky” the formal workforce » Flows into pension funds are a fixed » Fees are retained
Slide 41: Main Characteristics per Country
Main Characteristics per Country 42
Slide 42: Main Characteristics per Country (contd.)
Main Characteristics per Country (contd.) 43
Slide 43: Our Vision
Our Vision Proposals for enhancing a multi-pillared pension system More savings and More efficient Multi-funds Enhancing Incorporating over a longer investment protect against competition alternative period of time portfolios risk investment options Increasing Adequate Extending Enhancing the Creati
Slide 44: Undisputed Leadership in Mandatory Pension Business
Undisputed leadership in Mandatory Pension Business 22.8% 19.2% 14.7% 36.7% 38.6% 17.8% 47.5% Ranking 1st Ranking 4th Ranking 3rd Ranking 2nd Ranking 1st Ranking 2nd Ranking 2nd Metlife 9.3% 24.9% 0.0% Prudential 10.9% 28.0% 4.4% Principal 9.3% 19.0% 6.8% Banorte 7.4% 22.4% Grupo AVAL 6.8% 42.9% Cit
Slide 45: Ranking: Insurance Companies in Latam
Ranking: Insurance companies in Latam No. Group GWP (million USD) % Growth Market Share Country 2016 2017 2017 2017 1 BRADESCO Brazil 11,663 12,948 11% 8.2 % 2 BrazilPREV1 Brazil 12,795 11,992 -6% 7.6 % 3 MAPFRE Spain 8,096 9,155 13% 5.8 % 4 ITAÚ Brazil 6,382 7,579 19% 4.8 % 5 ZURICH Switzerland 5,9
Slide 46: Market Share 2018
Market Share 2018 MÉXICO 23° 7% 6° 0.78% REPÚBLICA DOMINICANA 1° 18.45% EL SALVADOR PANAMÁ 23.17% 1° 4° COLOMBIA 9.7% Brazil 28° 0.64% 1° 13.93% URUGUAY CHILE 3° 7.16% ARGENTINA 11° Market share 3.03% Ranking 47
Slide 47: Insurance Market Share Evolution
Insurance Market Share Evolution SURA URUGUAY 13.3% 13.1% SURA PANAMÁ 9.7% 8.5% SURA REP.DOMINICANA 7.0% 8.0% SURA SALVADOR 18.4% 18.2% SURA MEXICO 0.8% 0.8% SURA CHILE (GENERALES) 13.9% 14.6% SURA COL (VIDA) 26.4% 29.6% SURA COL (GENERALES) 19.2% 19.1% SURA BRASIL 0.6% 0.6% SURA ARGENTINA 3.0% 2.9%
Slide 48: Insurance Market Penetration
Insurance Market Penetration País 2015 2016 2017 Chile 4.7% 5.0% 4.6% Brazil 3.1% 3.3% 3.2% Argentina 3.1% 3.0% 2.9% Colombia 2.7% 2.8% 2.9% Panamá 2.7% 2.5% 2.4% Uruguay 2.4% 2.4% 2.7% El Salvador 2.4% 2.3% 2.2% México 2.1% 2.3% 2.2% Rep. Dominicana 1.2% 1.2% 1.4% 49 Fundación Mapfre 2017
Slide 49: Q1-2019 Results
50 » Q1-2019 Results GRUPO surda WW 7 A
Slide 50: Balance Sheet Strength
BALANCE SHEET STRENGTH: Growth in total equity driven by organic growth, compensating divestment of annuities business in Chile ESTADO DE SITUACIÓN FINANCIERA MAR-19 DEC-18 VAR% VAR$ Cash, investments and CONSOLIDATED FINANCIAL DEBT investment properties 25,889 24,731 4.7% 1,157 Investments in assoc
Slide 51: We Continue Managing Deleveraging Process
WE CONTINUE MANAGING Deleveraging process and investment capacity as the holding company INDIVIDUAL DEBT I N D I V I D U A L D E B T M AT U R I T Y P R O F I L E (HOLDING) 1,746 USD 23.9% 952 COP 699 4.9 tn 201 245 448 166 289 100 98 0.9% - - COP 2019 2020 2021 2022 2023 2024 2026 - 2029 2030 - 2049
Slide 52: Operating Earnings
OPERATING EARNINGS Grew 52.1% driven by higher yields on investment portfolios and revenues via equity method CONSOLIDATED INCOME STATEMENT MAR-19 VAR$ VAR% Operating earnings excluding return on legal Retained premiums 2,481 (77) -3.0% reserves grow 32% Commission income 654 41 6.7% New accounting
Slide 53: Growth in Technical Result
GROWTH IN TECHNICAL RESULT Due to revenue growth and positive adjustment of reserves RETAINED PREMIUMS + REVENUES FROM SERVICES CLAIMS + ADJ. RESERVES: SERVICES RENDERED: TECHNICAL RESULT: % RET. PREMIUMS COSTS / REVENUES % OPERATING REVENUES 91.3% 93.4% COP 3.2 trillion 1,259,250 1,204,581 828,967
Slide 54: Contribute to Net Income Growth
Insurance business and corporate segment CONTRIBUTE TO NET INCOME GROWTH C O R P O R AT E COP +13,658 MM SEGMENT +17.6% 10,411 1,411 118,308 +2.4% +7.3% -2.5% 2,697 1,854 (490) 597 1,239 100,590 ADJUSTED ROE*** 13.3% ADJUSTED ROTE*** 17.4% NET LIFE PROPERTY & HEALTH OPER. INTEREST TAXES OTHER** NET
Slide 55: Life Segment
LIFE SEGMENT: Operating growth and investment income drive increase in net income 8.6% 13.5% Other Individual Life Positive growth dynamics NET INCOME Mexico Life insurance operation 32.7% PRIMAS COP 116,078 MM Workers’ Comp. RETENIDAS 21.2% Group Life Lower claims and adjustement of reserves 2.4% H
Slide 56: P&C Segment
P&C SEGMENT: Investment income offset higher taxes and Argentina´s hyperinflation effect 20% Other 48% Car NET INCOME Premium growth affected by devaluation of 3% Theft PRIMAS Argentinean Peso Adjusted* 3% Civil Liability RETENIDAS Combined ratio of 105.5%, 86 pbs higher tan 1% Compliance POR SOLUCI
Slide 57: Health Care Segment
HEALTH CARE SEGMENT Revenues and technical result continue posting double digit growth NET INCOME COP 18,786 MM ( - 2 . 5 % ) REVENUES ON SERVICES CO ST S / REVENUES REVENUES & COST RATIO: ADMIN EXPENSES M AR - 1 9 %VAR M AR - 19 M AR - 1 8 88.4% 86.9% EPS 812,854 24.3% 94.0% 91.4% 1,042,653 837,415
Slide 58: Operating Results
OPERATING RESULTS Driven by return on legal reserves and revenues via equity method OPERATING REVENUES + Var%: +6.0% +259.2% +1006% +4.0% +296.8% +36.0% INSURANCE Local Currencies: +2.4% +260.0% +967% +3.0% +290.9% +31.7% MARGIN 17,503 793,362 1,353 793,362 111,174 COP Million 30,825 48,965 583,542
Slide 59: SURA AM's Net Income Growth
Mandatory pension business explains SURA AM’s NET INCOME GROWTH C O R P O R AT E SEGMENT +58.7% 116,857 1,569 (4,492) (8,941) +72.6% (9,106) 227,922 ADJUSTED ROE*** 132,034 6.9% ADJUSTED ROTE*** 27.3% NET MANDATORY VOLUNTARY ANNUITIES FX EFFECT* OTHER** NET INCOME (CONT. OP.) INCOME 2018 2019 *FX Ef
Slide 60: Mandatory Business
Mandatory business RETURN ON LEGAL RESERVE EXPLAINS GROWTH IN NET INCOME AUM MEXICO OPERATING REVENUES COP 390 tn 19.2% Alpha and leadership in returns in main funds PERU 13.0% COP 660,035 MM 11.0% Equity method from Protección Digital transformation as enabler 38.4% SALARY BASE COP 40.2 tn 8.7% COM
Slide 61: Voluntary Business
Voluntary business CONTINUES BUILDING REGIONAL PLATFORM AUM SAVINGS AND INVESTMENT NET FLOW • 19 Products launched in Q1-2019, COMMISSION INCOME COP 1.0 tn reaching a total of 372 portfolios COP 29.8 tn RETURNS • Priorities in 2019 for IM Unit: COP 60,336 MM COP 0.9 tn • Adapt organizational structu