Quinenco S.A. · BCS:QUINENCO
Quinenco — Investor Presentation (April 2018)
48 slides from Quinenco's investor presentation, April 2018
Slide 1: Company Presentation / April 2018
Company Presentation / April 2018
Slide 2: Quiñenco Overview
Financial Conclusions Quiñenco Overview Overview Recent Events 2
Slide 3: Ownership Structure
Ownership Structure Minority Shareholders (Chilean Stock Exchanges) 81%(1) 19% Mining Industrial / Financial Services Market Capitalization US$ 5.7(2) billion (1) On April 4, 2018, the Luksic group acquired additional shares reaching an 83% stake. (2) Market Capitalization as of April 13, 2018. 3
Slide 4: Quiñenco: Diversified business conglomerate
Quiñenco Diversified business conglomerate • Quiñenco is one of Chile’s largest business conglomerates with US$84 billion in assets under management • Companies managed by Quiñenco generated sales revenue of US$28 billion in 2017 • The Quiñenco group of companies employs around 69,000 people in Chil
Slide 5: Quiñenco: Main Operating Companies
Quiñenco: Main Operating Companies % Control as of December 2017 51.3% 60.0% 29.1%(2) 56.2%(3) 52.2% 100% 25.5% Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): US$ 5.5 bln US$ 2.3 bln CSAV: US$ 1.6 bln US$ 920 mln(4) US$ 16.8 bln US$ 1.1 bln HL: US$7.0 bln • Leading bank in • No.1 Chilea
Slide 6: First Class Board and Management
First Class Board and Management Board of Directors Andrónico Luksic C. Jean-Paul Luksic F. Nicolás Luksic P. Andrónico Luksic L. Fernando Cañas B. Gonzalo Menéndez D. Hernán Büchi B. Matko Koljatic M. Chairman Vice Chairman Director Director Director Director Director Director Senior Management • F
Slide 7: Over 50 Years of History
Over 50 Years of History 1957 - 2009 2010 - 2014 2015 - 2017 1957 Sociedad Forestal Quiñenco S.A is created. 2010 Quiñenco divests Telsur. 2015 Quiñenco launches Tender Offer for 19.55% of Empresas Lucchetti S.A. and Forestal Citigroup exercises its options for 17.04% of Invexans, increasing its sta
Slide 8: Focused Diversification
Focused Diversification • Beverage & Food • Beverage & Food • Beverage & Food • Beverage & Food • Beverage & Food • Beverage & Food • Hotels • Hotels • Hotels • Manufacturing • Manufacturing • Manufacturing • Manufacturing • Manufacturing • Telecom • Financial Services • Financial Services • Telecom
Slide 9: Investment Criteria
Investment Criteria Brand & consumer franchise development potential Sufficient critical mass Prior operating or industry experience Access to strategic partners / commercial alliances / synergies Growth platform or add-on acquisition potential Controlling stakes 9
Slide 10: World Class Strategic & Commercial Alliances
World Class Strategic & Commercial Alliances Beverage & Food Manufacturing Financial Port Services Energy Transport Quiñenco partners with world class players to develop its markets and products to take advantage of combined know-how, experience and financial capacity 10
Slide 11: Value Creation System
Value Creation System Quiñenco has developed a value creation system through the professional management of its investments . . . 4 Divest/Retain Continuous growth of shareholder value 3 Max. Profitability Hoteles 2 Restructuring 1 Acquisition •Restructuring and •Develop and maximize •Acquisitions o
Slide 12: Corporate Level Transactions
Corporate Level Transactions . . . which has led to various transactions throughout its history, generating US$1.9 billion in profits over the last 20 years from divestments of US$4.7 billion 1,920 1,023 (1) 795 64 41 20 -11 -12 Telecom Retail Real Beverage & Food Utility Financial Services Manufact
Slide 13: Strong Growth in NAV
Strong Growth in NAV Over the past 14 years, the net value of Quiñenco’s assets has grown at an average compound annual rate of 13%(1) (1) Quiñenco - NAV (MUS$) (2) 7,873 (2) (2) 6,858 6,541 5,789 (2) (2) 5,137 5,351 5,364 (2) 4,660 3,071 3,275 2,721 1,989 2,028 2,142 1,450 2003 2004 2005 2006 2007
Slide 14: Leading Market Positions
Leading Market Positions The company’s investment strategy allows it to maintain a leading position in all of its business areas and product segments Business Industry Product Ranking(1) Market Share(1) Loans 2(2) 17% Financial Services Deposits 1 22% Chile (non-alcoholic and alcoholic beverages)(3)
Slide 15: Diversified Investments
Diversified Investments Becoming one of the most diversified holding companies in Chile Investments by Sector(1) Net Asset Value(2) (NAV) (US$ 6.0 billion as of December 31, 2017) (US$ 7.9 billion as of December 31, 2017) (Percentages calculated over gross assets) Cash Other 5% Cash Port Services 1%
Slide 16: NAV, Share Price & Dividends
NAV, Share Price & Dividends NAV/Share Price Trend as of December 31, 2017 3.500 2,911 3.000 2.500 NAV : US$7.9 bln(1) (1) 2.000 Mkt Cap: US$5.8 bln 1.500 2,150 1.000 500 0 NAV per share (Ch$) Share price (Ch$) (1) Market information and book values as of September 30, 2017. Dividends Paid Dividend
Slide 17: Financial Overview
Quiñenco Financial Overview Recent Events Conclusions Overview 17
Slide 18: Growing and Diversified Revenues
Growing and Diversified Revenues Quiñenco has achieved diversified revenues with a positive growth trend . . . Consolidated Revenues(1) Aggregate Revenues by Sector(2) (MUS$) (YTD December 2017) Port Services Financial Services 6,355 6,273 2% 10% 5,812 5,269 5,306 Beverage & Food 10% Transport 40% M
Slide 19: Sound Results
Sound Results . . . and sound bottom line results Net Income(1) Net Income(2) (MUS$) (YTD December 2016, MUS$) 556 288 182 33 28 42 19 -16 CCU Manufacturing Financial Energy Transport Port Services Other (3) Total Services 288 203 (YTD December 2017, MUS$) 157 177 2013 2014 2015 2016 2017 194 32 16
Slide 20: Quiñenco Holding: Conservative Financial Structure
Quiñenco Holding: Conservative Financial Structure Long term investments are financed with equity and long term debt in Chilean pesos . . . Assets Liabilities and Equity US$ 6.0 billion as of December 2017 US$ 6.0 billion as of December 2017 Cash Other ST Debt 5% 1% Other Liabilities 1% 2% LT Debt 1
Slide 21: Low Financial Corporate Debt
Low Financial Corporate Debt . . . maintaining low levels of debt through asset disposals and strong dividend flow . . . Net Debt MUS$ 944 794 682 434 62 2013 2014 2015 2016 2017 MUS$ 2013 2014 2015 2016 2017 Debt 875 943 888 1,292 1,264 Cash -813 -509 -206 -498 -320 Net Debt 62 434 682 794 944 Note
Slide 22: Stable Dividend Cashflow
Stable Dividend Cashflow . . . to the parent company based on good operating company performance Dividends Composition of Dividends (MUS$) (YTD December 2017) 490 SM SAAM IRSA/CCU 16% 19% 134 129 106 Banchile 82 Vida 11% 2013 2014 2015 2016 2017 SM SAAM Banchile Vida CSAV Invexans IRSA/CCU LQIF (add
Slide 23: Quiñenco – Strong Fundamentals
Quiñenco – Strong Fundamentals Dominant position in its markets Quiñenco’s companies are leaders in their respective markets. Proven track record in value Holding has proven track record in value creation as evidenced by sale creation of investments for approximately US$4.7 bln and gains on sale of
Slide 24: Recent Events
Quiñenco Financial Overview Recent Events Conclusions Overview 24
Slide 25: Hapag-Lloyd completes merger with UASC; Techpack tender offer
Hapag-Lloyd Techpack – Quiñenco and United completes Arab Shipping Tender Company Offer (UASC) merger • May 24, 2017: merger between Hapag-Lloyd and UASC materialized. • Hapag-Lloyd became the fifth largest container shipping company worldwide, with one of the most modern and efficient fleets. • Sig
Slide 26: SM SAAM adds port in Costa Rica, sells Tramarsa stake
SM SAAM adds port in Costa Rica, sells stake in Tramarsa (Peru), and increases stake in ITI Puerto Caldera, Costa Rica • February 8, 2017: SAAM acquired control (51%) of two concessions at Puerto Caldera, the second largest port of Costa Rica, for a total amount of US$48.5 mln. • Transaction was mat
Slide 27: CCU signs agreement with Anheuser-Busch InBev on Budweiser Argentina
CCU signs agreement with Anheuser-Busch InBev on Budweiser Argentina AB InBev - Budweiser • September 6, 2017: CCU announced agreement signed with AB InBev regarding anticipated termination of distribution license for Budweiser in Argentina. CCU announced that the transaction was approved by the ant
Slide 28: Invexans establishes a new company in London, UK
Invexans establishes a new company in London, UK • On April 10, 2018, Invexans reported the establishment of a fully-owned subsidiary in London: Invexans Limited (Invexans UK). • The purpose of the company is to develop Quiñenco and its subsidiaries’ international businesses, particularly in Europe,
Slide 29: Conclusions
Quiñenco Financial Recent Events Conclusions Overview Overview 29
Slide 30: Outlook
Outlook Factors that contribute to Quiñenco’s ability to pursue and undertake new investment opportunities Strong Cash Position Healthy Portfolio Financial Optimization Structure • Good • Sound financial • Strong cash levels performance of indicators • Conservative main operating • Well structured f
Slide 31: Thank you for your attention
NENCO S.A Thank you for your attention 4 Qui
Slide 32: Appendix: Main Operating Companies
Appendix: Main Operating Companies 32
Slide 33: Banco de Chile
Banco de Chile • Established in 1893, Banco de Chile has a highly • Strategic alliance with Citigroup complements the recognized name in Chile. Bank’s financial services of excellence for its • One of the most profitable banks in terms of customers and gives access to one of the most return on asset
Slide 34: Banco de Chile
Banco de Chile • In 2017, operating revenues declined by 1.5%, mostly ROAE due to non-recurring revenues in 2016, and the unfavorable effect of lower inflation. Customer-related revenues, however, continued increasing based on growth in loans, particularly in the retail segment, and 24,4% 23,5% high
Slide 35: CCU
CCU • Founded in 1850, CCU is a multi-category branded • In 2015, CCU launched the “ExCCelencia CCU” program, beverage company operating in Chile, Argentina, Bolivia, with the aim to achieve efficiencies in various areas. Colombia, Paraguay, Uruguay and Peru with an extensive • In 2015 CCU’s Quilicu
Slide 36: CCU
CCU • Sales grew 8.9% in 2017 to MUS$2,763, reflecting growth in the International Business and Chile EBITDA* by Business Segment segments, compensating lower sales in the Wine (YTD December 2017) segment. Wine • EBITDA reached MUS$532 in 2017, up by 15.1% from 9% 2016, mostly due to the positive pe
Slide 37: Invexans
Invexans • Invexans’ main asset is its 28.52 % stake in • Invexans now has three directors on the Board, a Nexans, a leading cable manufacturer with member of the Compensations and Designations worldwide presence, based in France. Committee, a member of the Strategic • An agreement signed in Septemb
Slide 38: Nexans
Nexans • Nexans is a worldwide leader in the cable industry with presence in 40 countries and commercial activities worldwide, after over a century of progress. • Headquartered in Paris, France, Nexans produces cables and cabling systems, constantly innovating its products, solutions and services. •
Slide 39: Invexans
Invexans Operating Income (Loss) • In 2017 Invexans’ net income mainly reflects its (MUS$) proportional share in Nexans’ net gain for the year, further improving from the gain reported in 16 2016, reflecting the favorable impact of the strategic initiatives implemented and a positive core exposure e
Slide 40: Techpack
Techpack • During 2013 and 2014, Techpack discontinued its • On May 31, 2016, Techpack sold its flexible brass mills and profiles operations, concentrating packaging business to Australian leader in its activities in flexible packaging. packaging, Amcor, for a net amount of US$216 • Until May 2016,
Slide 41: Techpack
Techpack Sales • Techpack’s net income in 2017 was a loss of (MUS$) MUS$3, mainly reflecting the negative price adjustment to the sale of its flexible packaging 372 business and maintenance expenses related to 351 discontinued operations. 0 0 0 2013 2014 2015 2016 2017 Operating Income (Loss) Net In
Slide 42: Enex
Enex • Enex S.A. has a network of 461 service stations, Market Share of Liquid Fuel Sales with 148 convenience stores. (December 2016) • Main business activities: - Distribution of fuels through its service Others 8% stations. Petrobras - Distribution of fuels to industrial clients and 13% transport
Slide 43: Enex
Enex • In 2017 sales reached MUS$3,072, up by 11.7%, Sales mainly due to higher fuel prices. Gross income (MUS$) increased 2.0%, primarily due to higher sales volumes 3,541 and improved margins in lubricants. 3,072 • Operating income decreased 58,3% to MUS$18 in 2,859 2,761 2,751 2017, due mostly du
Slide 44: CSAV
CSAV • CSAV, founded in 1872, is one of the oldest shipping • At year-end 2014 CSAV raised US$398 million in a companies in the world. capital increase. • Its activities include overseas transport of • CSAV subscribed €259 mln in Hapag-Lloyd’s capital containerized cargo through its investment in Ha
Slide 45: CSAV
CSAV • In 2017 CSAV’s sales reached MUS$110, slightly above Sales 2016, mostly reflecting higher sales volumes in the car (MUS$) carrier business. 3,206 • In 2017 CSAV reported a net loss of MUS$188, mostly reflecting the accounting loss of US$167 million related to its dilution in Hapag-Lloyd follo
Slide 46: Hapag-Lloyd
Hapag-Lloyd • Hapag-Lloyd is a leading global liner shipping company, with a fleet of 219 modern ships, 9.8 million TEU transported a year and a total capacity of around 1.6 million TEU. • Founded in 1847 and headquartered in Hamburg, Germany, Hapag-Lloyd offers a global network of 120 liner service
Slide 47: SM SAAM
SM SAAM • SM SAAM is dedicated to port services and • SM SAAM subscribed an association with the Dutch management of port concessions, including three company Boskalis to jointly operate and develop the main business areas: port terminals, tug boats, tug boat business in Mexico, Brazil, Canada and a
Slide 48: SM SAAM
SM SAAM • In 2017, SM SAAM’s consolidated sales reached Sales MUS$468, up by 18.8%, mainly due to higher sales of (MUS$) port terminals, boosted by the addition of Puerto Caldera in Costa Rica and positive performance of the 479 492 468 port of Guayaquil, in Ecuador, partially offset by lower 426 39