Quinenco S.A. · BCS:QUINENCO
Quinenco — Investor Presentation (March 2017)
50 slides from Quinenco's investor presentation, March 2017
Slide 1: Company Presentation / March 2017
Company Presentation / March 2017
Slide 2: Quiñenco Overview
Financial Conclusions Quiñenco Overview Overview Recent Events 2
Slide 3: Ownership Structure
Ownership Structure Minority Shareholders (Chilean Stock Exchanges) 81% 19% Mining Industrial / Financial Services Market Capitalization US$ 4.3(1) billion (1) Market Capitalization as of February 28, 2017. 3
Slide 4: Quiñenco Diversified business conglomerate
Quiñenco Diversified business conglomerate • Quiñenco is one of Chile’s largest business conglomerates with US$67 billion in assets under management • Companies managed by Quiñenco generated sales revenue of US$24 billion in 2015 • The Quiñenco group of companies employs around 68,000 people in Chil
Slide 5: Quiñenco: Main Operating Companies
Quiñenco: Main Operating Companies % Control as of September 2016 51.2% 60.0% 28.4%(2) 65.9%(3) 56.0%(5) 50.8%(6) 100% Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(4): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): US$ 840 mln(7) US$ 11.8 bln US$ 2.2 bln US$ 200 mln CSAV: US$ 1.0 bln US$ 800 mln US$ 4.4 bln HL(4): US$3.5 b
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 - 1999 2000 - 2012 2013 - 2015 1957 Sociedad Forestal Quiñenco S.A is 2000’s Quiñenco becomes the controller of 2013 Quiñenco increases stake in Madeco to created. Banco de Chile. 65.9%. Banco de Chile and Banco Edwards are Madeco divided in Invexans and newco 1960’s Em
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$1.7 billion in profits over the last 19 years from divestments of US$4.2 billion 1,749 934 (1) 726 59 38 14 -10 -11 Telecom Retail Real Beverage & Food Utility Financial Services Manufactur
Slide 13: Strong Growth in NAV
Strong Growth in NAV Over the past 12 years, the net value of Quiñenco’s assets has grown at an average compound annual rate of 11% (1) (1) Quiñenco - NAV (MUS$) 6,858 6,541 5,789 5,137 5,351 5,064 4,660 3,071 3,275 2,721 1,989 2,028 2,142 1,450 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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 18% Financial Services Deposits 1 23% Chile (non-alcoholic and alcoholic beverages) (2) -
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$ 5.3 billion as of September 30, 2016) (US$ 5.1 billion as of September 30, 2016) (Percentages calculated over gross assets) Cash Other 7% Cash 1% Other 6% Po
Slide 16: NAV, Share Price & Dividends
NAV, Share Price & Dividends NAV/Share Price Trend as of June 30, 2016 3.000 2,448 2,509 2,363 2,339 2.500 2,064 2,043 2,077 1,981 1,999 2,017 1,953 1,974 1,990 2,025 2,031 2,004 (1) 2.000 NAV : US$5.1 bln 1.500 (1) 1,540 1,610 1,459 Mkt Cap: US$3.7 bln 1.000 1,399 1,275 1,295 1,300 1,280 1,335 1,40
Slide 17: Financial Overview
Quiñenco Financial Overview Recent Events Conclusions Overview 17
Slide 18: Growing and Diversified Revenues
Growing and Diversified Revenues Quiñenco has achieved diversified revenues with a positive growth trend . . . Consolidated Revenues(1) Aggregate Revenues by Sector (2) (MUS$) (YTD September 2016) Port Services Financial Services 5,937 2% 12% 5,333 4,923 Beverage & Food 3,960 4,069 3,698 9% Transpor
Slide 19: Sound Results
Sound Results . . . and sound bottom line results Net Income(1) Net Income (2) (MUS$) (YTD September 2016, MUS$) 520 212 190 182 147 157 133 157 29 23 -7.6 12 -32 Manufacturing Financial Energy Transport Port Services Other (3) Total Services 2012 2013 2014 2015 sep-15 sep-16 CCU (1) Net Income: Net
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$ 5.3 billion as of September 2016 US$ 5.3 billion as of September 2016 Cash Other ST Debt 7% 1% 1% Other Liabilities 1% LT Debt
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$ 638 644 405 186 58 2012 2013 2014 2015 sep-16 MUS$ 2012 2013 2014 2015 Sep-2016 Debt 676 818 881 830 1,018 (*) Cash -490 -760 -476 -193 -374 Net Debt 186 58 405 638
Slide 22: Stable Dividend Cashflow
Stable Dividend Cashflow . . . to the parent company based on good operating company performance Dividends Composition of Dividends (MUS$) (YTD September 2016) 458 SM SAAM CCU 15% 14% Banchile Vida 119 126 121 7% 76 2012 2013 2014 2015 sep-16 SM SAAM Banchile Vida CSAV Invexans CCU LQIF (additional)
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$4.2 bln and gains on sale of
Slide 24: Recent Events
Quiñenco Financial Overview Recent Events Conclusions Overview 24
Slide 25: Quiñenco raises funds through debt
Quiñenco raises funds through debt Bond Issuance • In June 2016 Quiñenco successfully placed UF 5,000,000 (approx. US$190 million) in bonds in the local market. • Bonds successfully placed with 23 year maturity at a rate of UF + 3.19%. • In December 2016 Quiñenco successfully carried out a second bo
Slide 26: Techpack – sale of flexible packaging business
Techpack – sale of flexible packaging business Sale of flexible packaging business to Australian Amcor • May 31, 2016: Techpack sells its flexible packaging business to Amcor. • Transaction amounted to US$435 mln (enterprise value, including stake of Nexus Group in Peruplast and Flexa), of which MUS
Slide 27: Quiñenco completes Tender Offer for Techpack
Quiñenco completes Tender Offer for Techpack Tender Offer for Techpack • On September 27, Quiñenco announced that the Board of Directors approved a Tender Offer for 34.08% of Techpack which is not held by Quiñenco, at a price of US$0.54 per share. • The offer was carried out from Oct 3 to Nov 2, 201
Slide 28: Hapag-Lloyd and UASC merger
Hapag-Lloyd Techpack – Quiñenco and United completes Arab Shipping Tender Company Offer (UASC) merger • July 2016: Business combination agreement signed between Hapag-Lloyd and UASC. • Combined entity would become one of the five largest container shipping companies worldwide, with one of the most m
Slide 29: CSAV – Hapag-Lloyd
CSAV Techpack – Hapag-Lloyd – Quiñenco completes Tender Offer • October 19, 2016: CSAV sold its stake in the joint-venture with Odfjell Tankers that operates liquid bulk business on the west coast of South America. The company estimates a slightly positive effect (not significant) on results as of S
Slide 30: SM SAAM adds port in Costa Rica
SM SAAM adds port in Costa Rica • September 27, 2016: SAAM signed agreement to acquire control (51%) of two concessions at Puerto Caldera (subject to approval from Costa Rica’s regulatory authorities), the second largest port of Costa Rica, for a total amount of US$48.5 mln. • February 8, 2017: tran
Slide 31: Conclusions
Quiñenco Financial Recent Events Conclusions Overview Overview 31
Slide 32: 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 33: Thank you for your attention
NENCO S.A Thank you for your attention 4 Qui
Slide 34: Appendix: Main Operating Companies
Appendix: Main Operating Companies 34
Slide 35: 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 36: Banco de Chile
Banco de Chile • In 2015 the Bank’s net operating revenues remained ROAE stable, mainly due to growth in the Bank’s core businesses, offset by the negative effect of lower inflation on the Bank’s net asset position in UFs. Loan loss provisions increased mostly due to 23,5% 24,4% 23,3% countercyclica
Slide 37: CCU
CCU • Founded in 1850, CCU is a multi-category branded • Traded on the NYSE and Santiago Stock Exchanges. beverage company operating in Chile, Argentina, • In January 2015, CCU launched the “ExCCelencia CCU” Bolivia, Colombia, Paraguay and Uruguay with an program, with the aim to achieve efficiencie
Slide 38: CCU
CCU • Sales grew by 15% in 2015 to MUS$2,277, reflecting growth in all segments, led by the International EBITDA* by Business Segment Business segment. (YTD September 2016) • EBITDA reached MUS$435 in 2015, up 15.3% from 2014, based on sales growth and increased efficiencies, Wine despite the deprec
Slide 39: Invexans
Invexans • Invexans’ main asset is its 28.35% stake in Nexans, • Invexans now has three directors on the Board, a a leading cable manufacturer with worldwide member of the Compensations and Designations presence, based in France. Committee, a member of the Strategic • An agreement signed in Septembe
Slide 40: Nexans
Nexans • Nexans is a worldwide leader in the cable industry with presence in 40 countries and commercial activities worldwide, after over a century of progress. • Headquartered in Paris, France, Nexans produces cables and cabling systems, constantly innovating its products, solutions and services. •
Slide 41: Invexans
Invexans Operating Income • In 2015 Invexans’ net income mainly reflects its (MUS$) proportional share in Nexans’ net loss for the year, partially compensated by lower legal expenses at 16 Invexans. Nexans’ result reflects the impact of restructuring costs and asset impairments, which 0 offset 32% g
Slide 42: Techpack
Techpack • Until May this year, Techpack was a regional • In March 2015, Techpack acquired Alusa’s shares leader in flexible packaging, with presence in held by third parties, reaching 100% of its Chile, Argentina, Peru and Colombia, over 2,300 property . employees, and an installed capacity of 85,0
Slide 43: Techpack
Techpack Sales • Techpack’s operating income in 2015 grew 34% (MUS$) over 2014, based on growth in sales volume, effective cost controls and a regional procurement plan. 372 376 351 • Techpack’s net income in 2015 was a gain of MUS$2, reverting the prior year’s loss. • YTD September 2016, Techpack’s
Slide 44: Enex
Enex • Enex S.A. has a network of 465 service stations, Market Share of Liquid Fuel Sales with 130 convenience stores. (December 2015) • Main business activities: Others - Distribution of fuels through its service 7% stations. Petrobras 13% - Distribution of fuels to industrial clients and transport
Slide 45: Enex
Enex • In 2015 sales reached MUS$2,580, falling 22%, mainly Sales due to lower fuel prices. Gross income, however, was (MUS$) up 3% boosted by a relatively higher sales volume through service stations. • Operating income decreased 26% to MUS$37 in 2015, 3,308 due to higher operating expenses related
Slide 46: 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 million in Hapag-Lloyd’s capital containerized cargo through its investment i
Slide 47: CSAV
CSAV • In 2015 CSAV’s sales reached MUS$183, 22% below Sales 2014, mostly due to lower freight rates, lower activity in (MUS$) car carriers, and the closure of solid bulk transport and less freight forwarder activity. • In 20215 CSAV reported a net loss of MUS$15, due to its 3,432 dilution in Hapag-
Slide 48: Hapag-Lloyd
Hapag-Lloyd • Hapag-Lloyd is a leading global liner shipping company, with a fleet of 177 modern ships, 7.4 million TEU transported a year and a total capacity of around 1 million TEU. • Founded in 1847 and headquartered in Hamburg, Germany, Hapag-Lloyd offers a global network of 120 liner services.
Slide 49: SM SAAM
SM SAAM • SM SAAM is dedicated to port services and • SM SAAM subscribed, through SAAM, an management of port concessions, including three association with the Dutch company Boskalis to main business areas: port terminals, tug boats, jointly operate and develop the tug boat business and logistics. i
Slide 50: SM SAAM
SM SAAM • In 2015, SM SAAM’s consolidated sales reached Sales MUS$426, down by 13%, mainly due to lower sales of logistics, due to the closure of operations in Brazil and (MUS$) lower activity in Chile, and the consolidation of tug boats 479 492 in Brazil in 2014 only. 448 426 • SM SAAM obtained net