Grupo De Inversiones Suramericana S.a. · BVC:GRUPOSURA
Grupo De Inversiones Suramericana — Q3 2018 Earnings Presentation
57 slides from Grupo De Inversiones Suramericana's earnings presentation, December 2018
Slide 1: Grupo SURA Corporate Presentation Q3-2018
Grupo SURA Corporate Presentation Q3-2018
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 accountant, and therefore may differ fr
Slide 3: Leading Financial Services Group in Latam
Leading Financial Services Group in Latam #1 PENSION FUND #1 INSURANCE #1 COLOMBIAN RELEVANT MANAGER COMPANY BANK CLIENT BASE in Latam, with a in Colombia, with an with a leading in attractive markets growing voluntary established growth presence in Central savings business platform in Latam America
Slide 4: Diversified Investment Portfolio
Diversified Investment Portfolio and other investments Cement, energy Insurance, trends and infrastructure and risk management 35.2% S TAKE * 0.8% 81.1% S TAKE 14.1% 13.6% 14.8% USD Processed food 8.9bn 28.3% 35.2% S TAKE Pensions, asset and wealth management 28.4% 83.6% S TAKE Universal banking 46.
Slide 5: 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) 5
Slide 6: 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 7: Geographic Footprint
Geographic Footprint P O P U L AT I O N CLIENTS FINANCIAL SERVICES 520MM 50MM +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% 65% vs. 155% for advanced countries for US and UK for US and EU D R I V E R S ECONOMIC MIDDLE DEMO
Slide 8: 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. ALIGN
Slide 9: 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 10: Grupo SURA's Financials Evolution
Grupo SURA’s Financials Evolution CONSOLIDATED REVENUES HOLDING COMPANY RECEIVED DIVIDENDS 342 340 12.0% -3.2% 3.4x 31.2% 2010 Dividends 277 314 6,884 6,665 6,149 187 205 Bancolombia S U R A AM 4,687 151 G r u p o Ar g o s 103 Grupo Nutresa 101 Protección Suramericana Other 2015 2016 2017 2018LTM 20
Slide 11: 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/ 300 235 DIVIDENDS 95 53 34 145 56 97 34 33 4.2x - - Max. 5x 2018 2019 2020 2021 2022 2023 2024 2026 . 2029 2030 . 2049 BANKS INTERNATIONAL LOCAL BONDS REPOS BONDS LIQUIDITY 1.1x » F I N A N C I A L
Slide 12: 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 50% P&C 16,400 in Colombia w
Slide 13: 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 14: 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 14
Slide 15: Being Relevant to Clients
Being Relevant to Clients RELEVANT SOLUTIONS Introducing life solutions to other countries CHANNELS › Develop SME segment Multichannel approach 17% › Multidimensional segmentation › Direct 35% › Develop solutions for emerging risks: › Digital 19% • CYBER RISK › Affinity • AGRICULTURE › Sustainable B
Slide 16: Suramericana's Financials Evolution
Suramericana’s Financials Evolution OPERATING REVENUES CLAIMS AND EXPENSE RATIO 22.4% 4,924 0.2% 4,934 93.3% 92.3% 94.6% 92.9% 4,022 880 1,033 55.2% 735 4,044 3,901 59.4% 60.4% 59.4% 56.3% 2,591 3,286 611 1,980 15.6% 16.6% 15.5% 15.9% 2015 2016 2017 2018LTM 2015 2016 2017 2018LTM Insurance GWP Retai
Slide 17: SURA Asset Management
SURA Asset Management MANDATORY WEALTH ASSET PENSION MANAGEMENT MANAGEMENT Highly-regulated market Underpenetrated Regional platform AUM (bn) AGENTS Stable cash flow business with high connecting Latam to 44 3,224 generation growth potential the world 33 5,435 30 1,552 88% 6% 6% AUM AUM AUM 19 1,375
Slide 18: Sustainability of Mandatory Business
Sustainability of Mandatory Business Relationship with Closeness in the stakeholders, seeking the Efficient and innovative relationship with clients. improvement of pension Business Models. systems and its understanding . MARKET MILLION COST INCOME SHARE AUM CLIENTS 18 23% 18.5 32% As of september 3
Slide 19: Transformation of Wealth Management Business
Transformation of Wealth Management Business Brand positioning Advice and From products to Attraction of new “Inversiones SURA”. recommendation of solutions increasing clients and cross-sell investment and savings . value proposition. to existing clients. AUM AUM GROWTH > 1.3 MILLION CLIENTS 19 USD
Slide 20: Development of the Asset Management Business
Development of the Asset Management Business Regional platform with High standards in Relationship with scalable operation portfolio management institutional clients and models. backed by SURA’s product development reputation. in Latam. AUM GROWTH AUM AUM WITH ALPHA 20 USD 11.2 bn +16.1% +73% As of
Slide 21: SURA AM's Financials Evolution
SURA AM’s Financials Evolution AUM COMMISSION INCOME 131,409 138,897 663 694 605 635 110,095 55 70 77 100,652 49 617 580 593 556 9.4% 19.4% 5.7% 4.9% 3.1% 5.0% CAGR Mandatory 3.0% Voluntary 14.2% 2015 2016 2017 2018Q2 2015 2016 2017 2018LTM Mandatory pension Voluntary business RETURN ON LEGAL RESERV
Slide 22: Bancolombia
Bancolombia COLOMBIA’S LEADING OVER 12 MM CLIENTS FINANCIAL INSTITUTION with access to a strong with a strong presence in distribution network Central America 5,750 ATMs, 1,045 branches and 11,270 banking kiosks LOANS FUNDING MARKET SHARE COLOMBIA SALVADOR PANAM A Loans Loans Loans 25.6% 25.9% 10.0%
Slide 23: 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 24: 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 16 billion Cement and RMC* in AUM # 1 in Colombia With a balanced portfolio in # 2 in RMC and # 4 in regions, cur
Slide 25: SURA Ventures
SURA Ventures FINTECH Robo-advisory Personal finance platform Mortgage digital market place H E ALT H T E C H Optimizing access to cancer Health tech operator Optimizing Access to health systems clinical trials INSURETECH Digital insurance Mobile sensor data for On-demand Health ecosystem – road saf
Slide 26: Appendix
26 » APPENDIX GRUPO surda WW 7 A
Slide 27: Latam Economies
Latam Economies CHILE COLOMBIA PERU MEXICO Recovery seems more More constructive Optimistic but Hopes of a NAFTA robust than previously after the elections still cautious deal. anticipated 3.7% 2.7% 3.8% 2.3% GDP GDP GDP GDP 2.5% 4.25% 2.75% 7.75% Current Policity rate Current Policity rate Current
Slide 28: Diversification
Diversification DIVERSIFIED DIVIDEND STREAM CONSOLIDATED FIGURES Grupo Argos 8% Grupo Nutresa Country Clients Revenues Net Income Assets 9% COLOMBIA 28.0 54.1% 43.6% 51.2% By SURA Asset CHILE 3.7 18.9% 20.4% 27.5% Bancolombia Management 18% Company 51% MEXICO 7.9 10.2% 18.1% 9.9% PERÚ 2.0 2.3% 9.6%
Slide 29: Shareholding Structure
Shareholding Structure 27.1% Gru po Argos and 33.6% subsidiarie s Total Outstanding Shares 10.2% Gru po Nutresa 12.7% 27.4% Colombian Pe nsion 581,977,548 20.2% Funds (COMM) (COMM + PREF) Outstanding Outstanding 19.2% Inte rnational Funds 17.9% Common Shares Pref. Shares 3.4% 3.9% Retail Investo rs
Slide 30: Cross Holding Structure
Cross Holding Structure FINANCIAL SERVICES 13% 34%* 35% 35% PROCESSED FOOD INFRASTRUCTURE 12% 10% 30 Stakes in common shares as of June 30, 2018 *Includes stake held in Grupo SURA by Cementos Argos which owns 6% of Grupo SURA’s common shares.
Slide 31: Portfolio Evolution
Portfolio Evolution PORTFOLIO 2010 PORTFOLIO 2018 12% S u r a m e r i c a n a USD Suramericana USD 3% P r o t e c c i ó n 35% B a n c o l o m b i a 11.1b n S U R A AM 6.4bn 27% G r u p o Ar g o s Bancolombia G r u p o Ar g o s 22% N u t r e s a Nutresa 1% O t h e r Other Share Price (Avg.): Share Pr
Slide 32: International Bonds Performance
International Bonds Performance Grupo SURA 2021 Grupo SURA 2026 Amount Outstanding: USD 300 MM Amount Outstanding: USD 550 MM Maturity Date: 05/18/2021 Maturity Date: 04/29/2026 ISIN: USG42036AA42 ISIN: USG42036AB25 7 120 6 112 6.5 110 115 5.5 6 108 5.5 110 5 106 5 104 4.5 105 4.5 102 4 100 4 100 3.
Slide 33: International Bonds Performance
International Bonds Performance SURA AM 2024 SURA AM 2027 Amount Outstanding: USD 500 MM Amount Outstanding: USD 350 MM Maturity Date: 04/17/2024 Maturity Date: 04/11/2027 ISIN: USN8370TAA45 ISIN: USP8803LAA63 6 110 5.5 106 108 5.5 104 106 5 104 102 5 102 100 4.5 100 4.5 98 98 4 96 4 96 94 3.5 92 94
Slide 34: Proven Track Record in Bond Issuance
Proven Track Record in Bond Issuance Local Bonds» Amount USD Issuer Issue Maturity Bid to Cover Yield MM Grupo Sura 2014 2019 35 3.18x CPI + 3.24% Grupo Sura 2014 2023 76 2.11x CPI + 3.80% Grupo Sura 2014 2030 34 5.87x CPI + 4.15% Grupo Sura 2009 2019 19 8.16x CPI + 4.40% Grupo Sura 2009 2029 33 4.8
Slide 35: 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 36: Main Characteristics per Country
Main Characteristics per Country 36
Slide 37: Main Characteristics per Country (contd.)
Main Characteristics per Country (contd.) 37
Slide 38: 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 39: Undisputed leadership in Mandatory Pension Business
Undisputed leadership in Mandatory Pension Business 22.8% 19.2% 14.8% 36.9% 38.8% 17.5% 47.4% Ranking 1st Ranking 4th Ranking 3rd Ranking 2nd Ranking 1st Ranking 2nd Ranking 2nd Metlife 9.3% 25.0% 0.0% Prudential 10.8% 27.9% 4.4% Principal 9.4% 19.2% 6.8% Banorte 7.5% 22.6% Grupo AVAL 6.9% 42.8% Cit
Slide 40: Q3-2018 Results
40 » Q3-2018 Results GRUPO surda WW 7 A
Slide 41: Highlights
Highlights Grupo SURA INVESTMENT PORTFOLIO* • Total YTD revenues of COP 14.5 tn decrease 4.3% due to strategic decisions and external impacts. • Organic growth continues, in comparable terms, in the main business lines: mandatory + 6.6%, voluntary + 15.1%, general + 8.1%, life + 12.8%, health + 20.5
Slide 42: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position Grupo SURA Assets » Total Equity » dic-17 69,008,910 dic-17 26,226,561 - 1,047,040 - 429,001 -1.5% -1.6% sep-18 67,961,870 sep-18 25,797,560 0.0 10 , 00 0,000.0 20 , 00 0,000.0 30 , 00 0,000.0 40 , 00 0,000.0 50 , 00 0,000.0 60 , 00 0,000.0 70 , 00 0,000.
Slide 43: Consolidated Statement of Comprehensive Income
Consolidated Statement of Comprehensive Income Grupo SURA Var%: -11.1% +6.0% +20.6% -3.1% -5.5% -44.9% -4.3% 15,156,905 423,855 34,083 Total Revenues» 103,352 14,505,780 (45,305) (42,092) (145,862) (979,157) sep-17 15,156,905 -651,125 -4.3% sep-18 14,505,780 0 2,000 , 00 4,000 , 00 6,000 , 00 8,000
Slide 44: Consolidated Statement of Comprehensive Income
Consolidated Statement of Comprehensive Income Grupo SURA Grupo SURA & Other* +0.7% 31,378 10,133 25,433 5,362 1,097,442 1,919 1,105,501 (13,715) (46,559) (5,891) Net Income ∆ Net Income ∆ Net Income ∆ Equity ∆ Exchange ∆ Admin. ∆ Interest ∆ Other ∆ Taxes Net Income 2017 Suramericana SURA AM Method*
Slide 45: Highlights - Suramericana
Highlights Suramericana • Positive operating Dynamic: technical result increased 8.3% % WRITTEN PREMIUMS • Retained premiums -4.2% or +2.2% excluding pension insurance. Negative effects from El Salvador Uruguay 3% Rep. Dom. currency devaluations and change in methodology for health insurance premium
Slide 46: Statement of Comprehensive Income - Suramericana
Statement of Comprehensive Income Suramericana Operating Revenues* » Claims + Reserve Adj.: % Retained Premiums Services Rendered: Costs / Revenues 95.6% 93.2% 4,168,743 3,705,212 sep-17 9,008,058 2,214,931 58.8% 1,835,290 160,445 54.5% 1.8% -11.1% 20.7% sep-18 9,168,503 +7.1% excl. D&S Technical Re
Slide 47: Statement of Comprehensive Income - Suramericana
Statement of Comprehensive Income Suramericana Corporate Segment +0.5% 392,924 11,081 394,843 30,364 30,656 7,058 8,888 4,056 (14,459) (75,725) Net Income Life Non-Life Health Care Exchange Admin. Interest Taxes Other** Net Income 2017 Difference Expenses** 2018 * Admin. Expenses includes Administra
Slide 48: Life Insurance Segment
Life Insurance Segment Suramericana Var%: +10.6% +5.1% -8.6% -15.6% -16.7% Other 6% Life 16% 46,330 454,043 ARL (workers (27,178) (43,417) 378,318 comp) (51,460) 34% RETAINED Group Life PREMIUMS 19% Pension (D&S) 2% Health 23% 2017 Net Income Technical Admin. Investment Other 2018 Net Income Result
Slide 49: Non-Life (P&C) Insurance Segment
Non-Life (P&C) Insurance Segment Suramericana Retained Premiums Retained Claims Ratio Var%: -0.2% -2.7% +8.0% -68.5% +3.8% -1.3% 157,523 sep-18 %Var %Var LC* sep-18 sep-17 20,665 46,727 Auto 1,832,335 -3.9% 7.7% 63.0% 61.3% 28,014 Fire 432,630 1.5% 8.4% 29.5% 36.1% 110,796 Mandatory road accident 29
Slide 50: Health Care Segment
Health Care Segment Suramericana Var%: 23.5% 14.9% 5.1% -31.6% 103.1% 62,256 Services rendered Claims Ratio 613 3,069 sep-18 %Var sep-18 sep-17 60,390 (35,283) EPS 1,422,466 22.8% 91.7% 93.8% IPS 255,364 13.5% 70.4% 68.9% 29,733 Dinámica 126,998 21.1% 72.3% 74.6% Total 1,804,828 21.2% 87.3% 88.6% 20
Slide 51: Highlights - SURA Asset Management
Highlights SURA Asset Management El Salvador 4% Chile Colombia 31% • Total AUM of COP 412.8 bn (+7.5%) y 19.8 MM clients(+3.6%). 26% • Mandatory pension with COP 363 tn in AUM and 17.9 MM clients • Voluntary business with COP 49.9 bn in AUM and 1.3 MM clients Mandatory AUM COP 363 tn • Positive grow
Slide 52: Divestment of Annuities Business in Chile
Divestment of Annuities Business in Chile SURA Asset Management • March 7, 2018: announcement of sale agreement of the life annuity business in Chile to Bicecorp for USD 232 MM, at a 1.36x P/BV multiple. It was anticipated that it would have an accounting impact. • October 30, 2018: approval from th
Slide 53: Statement of Comprehensive Income - SURA AM
Statement of Comprehensive Income SURA Asset Management Var%: -25.7% +6.5% 1,928,086 -65.0% +23.9% -57.3% -1.6% Local Fx: +7.5% -25.9% -64.8% +22.3% -57.6% -1.0% Operating Income + Insurance Margin» 94,451 1,928,086 36,842 (32,177) 1,897,257 (116,663) (13,282) sep-17 1,928,086 -30,829 -1.6% sep-18 1
Slide 54: Statement of Comprehensive Income - SURA AM
Statement of Comprehensive Income SURA Asset Management Corporate Segment +15.7% 447,209 26,434 479,288 33,191 21,816 43,046 3,433 (8,308) (62,383) (25,220) Net Income Mandatory Voluntary Life Insurance, Fx Impact Oper. Wealth Tax Interest Other Net Income 2017 Annuities and Expenses 2018 Disc. Oper
Slide 55: Mandatory Pensions Segment
Mandatory Pensions Segment SURA Asset Management Var%: +6.6% -65.0% -31.8% +3.1% +165.2% -7.2% -8.2% 85,253 714,124 (20,047) 16,695 655,857 12,497 (115,192) (37,473) Var$ Net Var$ Figures in COP MM Net Income Var $ income ex. "Encaje" "Encaje" Chile 224,563 (37,552) (49,930) 12,378 México 212,368 33
Slide 56: Mandatory Pensions Segment
Mandatory Pensions Segment SURA Asset Management Assets Under Management» Fund Membership (million)» 2.3% 7.9% 2.2% 0.1% 10.3% 10.0% 5.7% -3.0% 5.3% 0.0% 1.0% 4.3% 4.4% 3.4% 3.6% 9.0% 2.1% 12.9% 10.3% 8.7% 6.6% 17.86 362.9 17.27 343.4 7.73 7.34 113.8 111.2 92.1 4.33 4.52 73.6 79.3 83.5 1.70 1.65 2.0
Slide 57: Voluntary Savings Segment
Voluntary Savings Segment SURA Asset Management VOLUNTARY SAVINGS AUM (trillion COP)* INVESTMENT MANAGEMENT AUM SAVINGS AND INVESTMENTS AUM 4.7% 28.0% 19.3% 29.2% 12.5% 11.4% 6.1% 29.3% 19.1% 45.7% 12.5% 12.3% sep-17 43.4 26.6 23.9 COP 33.4 bn +14.9% +16.7% 11.4 11.9 6.8 7.7 sep-18 49.9 2.2 2.9 3.1
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