Slide 1: Company Presentation / June 2016
Company Presentation / June 2016 1
Slide 2: Quiñenco Overview
Financial Main Operating Conclusions Quiñenco Overview Overview Recent Events Companies 2
Slide 3: Ownership Structure
Ownership Structure Minority Shareholders (Chilean Stock Exchanges) 81% 19% Mining Industrial / Financial Services Market Capitalization US$ 3.1(1) billion (1) Market Capitalization as of May 31, 2016 3
Slide 4: Quiñenco
Quiñenco • 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$24 billion in 2015 • The Quiñenco group of companies employs around 68,000 people in Chile and abroad 4
Slide 5: Quiñenco: Main Operating Companies
Quiñenco: Main Operating Companies % Control as of March 2016 51.2% 60.0% 28.8%(2) 65.9% 56.0% 50.8% 100% Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): US$ 800 mln(4) US$ 9.7 bln US$ 2.2 bln US$ 170 mln CSAV: US$ 580 mln US$ 700 mln US$ 4.0 bln HL(3): US$2.6 bln • 1st bank
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 2001 Quiñenco becomes the controller of Quiñenco increases stake in Madeco to 2013 65.9%. created. Banco de Chile. Madeco divided in Invexans and newco 1960’s Empresas Lucchetti S.A. and Forestal 2002
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: Quiñenco – Investment Criteria
Quiñenco – 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
Quiñenco: World Class Strategic & Commercial Alliances Beverage & Food Manufacturing Financial 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 of admi
Slide 12: Corporate Level Transactions
Corporate Level Transactions Quiñenco has carried out various transactions throughout its history, generating US$1.7 billion in profits over the last 19 years from divestments of US$3.9 billion 1,678 903 (1) 702 57 37 Telecom Retail Real estate/Hotels Beverage & Food Utility Financial Services Total
Slide 13: Leading Market Positions
Leading Market Positions The company’s investment strategy allows it to maintain a leading position in all of its business areas and product segments: Business Industry Product Ranking(1) Market Share(1) Loans 2 18% Financial Services Deposits 1 23% Chile (non-alcoholic and alcoholic beverages) (2)
Slide 14: Diversified Investments
Diversified Investments Quiñenco is one of the most diversified holding companies in Chile. During its history it has invested in sectors where it has a recognized track-record and experience in the industry. Investments by Sector Net Asset Value(1) (NAV) (US$ 5.0 billion as of March 31, 2016) (US$
Slide 15: NAV & Share Price Trend
NAV & Share Price Trend NAV/Share Price Trend as of March 31, 2016 2.500 2.043 2.077 2.025 1.974 1.990 2.000 1.500 1.335 1.400 1.280 1.250 1.230 1.000 500 0 Mar- 15 Jun- 15 Sep- 15 Dec-15 Mar- 16 NAV per share (CH$) Share price (CH$) Note: Market information and book values as of March 31, 2016 NAV:
Slide 16: Financial Overview
Quiñenco Financial Overview Recent Events Main Operating Companies Conclusions Overview 16
Slide 17: 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$) (YTD March 2016) Port Services Financial Services 2% 5,833 11% 5,239 4,836 Beverage & Food 3,890 11% Transport 37% 1,319 1,375 Man
Slide 18: Sound Results
Sound Results Quiñenco has achieved sound bottom line results Net Income(2) Net Income (2) (MUS$) (YTD December 2015, MUS$) 22.2 511 158.1 27.8 136.1 SM SAAM CCU Manufacturing Financial Energy Transport Other (3) Total Services -14.1 -58.0 208 (YTD March 2016, MUS$) 186 144 94 47 9.4 2012 2013 2014
Slide 19: 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$ 5.1 billion as of March 2016 US$ 5.1 billion as of March 2016 Cash Other ST Debt 3% 2% 1% Other Liabilities 2% LT Debt 11% SH Equity
Slide 20: Low Financial Corporate Debt
Low Financial Corporate Debt Asset disposals and strong dividend flow have allowed Quiñenco to maintain low levels of debt Net Debt MUS$ 626 606 398 182 57 2012 2013 2014 2015 mar-16 MUS$ 2012 2013 2014 2015 Mar-2016 Debt 664 803 866 816 829 Cash -481 -747 -468 -189 -223 Net Debt 182) 57 398 626 606
Slide 21: Stable Dividend Cashflow
Stable Dividend Cashflow Good operating company performance allows a strong dividend flow to the parent company Dividends Composition of Dividends YTD May 2016 (MUS$) (YTD March 2012) SM SAAM CCU 437 15% 14% Banchile Vida 7% 113 120 115 73 2012 2013 2014 2015 may-16 SM SAAM Banchile Seguros de Vida
Slide 22: 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$3.9 bln and gains on sale of
Slide 23: Recent Events
Quiñenco Financial Overview Recent Events Main Operating Companies Conclusions Overview 23
Slide 24: Recent Events: Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • In July 2015, Banco de Chile acquired Banco Penta’s loan portfolio, amounting to Ch$588 billion (approximately US$953 million). • As of August 2015, Banco de Chile had gained 64 bp of market share in total loans from 40% Dece
Slide 25: Recent Events: Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • Enex won bid to build up to 9 new service stations on Autopista Central concession. The company will invest up to Ch$20 billion to build the largest network in an urban highway in the country. Currently the first three servic
Slide 26: Recent Events: Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • In January, 2015 Quiñenco completed its Tender Offer at a price of Ch$10 per share, reaching a stake of 98.3% in Invexans. • During December 2015, Techpack announced the concentration of all real estate left from the closure
Slide 27: Main Operating Companies
Quiñenco Financial Recent Events Main Operating Companies Conclusions Overview Overview 27
Slide 28: 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 29: 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 23,3% 23,5% 24,4% 21,4% counterc
Slide 30: CCU
CCU • Founded in 1850, CCU is a multi-category branded • Jointly controlled with Heineken, one of the main beverage company operating in Chile, Argentina, breweries worldwide. Bolivia, Colombia, Paraguay and Uruguay with an • Traded on the NYSE and Santiago Stock Exchanges. extensive wine export bus
Slide 31: CCU
CCU • Sales grew by 15% in 2015 to MUS$2,237, reflecting growth in all segments, led by the International EBITDA by Business Segment Business segment. (March 2016) • EBITDA reached MUS$428 in 2015, up 15.3% from Other 2014, based on sales growth and increased Wine 6% efficiencies, despite the deprec
Slide 32: Invexans
Invexans • Invexans’ main asset is its 28.84% stake in Nexans, • Invexans now has three directors on the Board, a a leading cable manufacturer with worldwide member of the Compensations and Designations presence, based in France. Committee, a member of the Strategic • An agreement signed in Septembe
Slide 33: Nexans
Nexans • Nexans is a worldwide leader in the cable industry with presence in 40 countries and commercial activities worldwide, after over a century of progress. • Headquartered in Paris, France, Nexans produces cables and cabling systems, constantly innovating its products, solutions and services. •
Slide 34: Invexans
Invexans Operating Income • In 2015 Invexans’ net income mainly reflects its (MUS$) proportional share in Nexans’ net loss for the year, partially compensated by lower legal 16 expenses at Invexans. Nexans’ result reflects the impact of restructuring costs and asset impairments, which offset 32% gro
Slide 35: Techpack
Techpack • Techpack is a regional leader in flexible packaging, • In March 2015, Techpack acquired Alusa’s shares with presence in Chile, Argentina, Peru and held by third parties, reaching 100% of its Colombia. property . • Over 2,300 employees. • On May 31, 2016, Techpack sold its flexible • Insta
Slide 36: 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. • In 1Q 2016, Techpack showed a
Slide 37: 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 38: Enex
Enex • In 2015 sales reached MUS$2,535, falling 22%, mainly Sales due to lower fuel prices. Gross income, however, was (MUS$) up 3% boosted by a relatively higher sales volume through service stations. • Operating income decreased 26% to MUS$37 in 2015, 3,250 due to higher operating expenses related
Slide 39: 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 40: 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 41: 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 42: 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 43: 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
Slide 44: Conclusions
Quiñenco Financial Recent Events Main Operating Conclusions Overview Overview Companies 44
Slide 45: Outlook
Outlook Factors that contribute to Quiñenco’s ability to pursue and undertake new investment opportunities Healthy Portfolio Low Level Financial Optimization of Debt Structure • Good • Sound financial • Strong cash levels performance of indicators • Current debt main operating • Well structured leve
Slide 46: Thank you for your attention
Thank you for your attention a . 448 QUINENCO S.A.