Grupo De Inversiones Suramericana S.a. · BVC:GRUPOSURA
Grupo De Inversiones Suramericana — Q4 2017 Earnings Presentation
49 slides from Grupo De Inversiones Suramericana's earnings presentation, 2018
Slide 1: Corporate presentation 4Q-2017
Corporate presentation 4Q-2017
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
Slide 3: Highlights
HIGHLIGHTS» 01 04 USD 7.8 bn MEXICO Market Cap GUATEMALA DOMINICAN Group of leading financial REPUBLIC Outstanding SALVADOR PANAMA services companies in Latam brand recognition 48.8 million COLOMBIA Clients* PERU BRAZIL Assets managed by our 02 05 strategic investments * » CHILE COP 602 tn ARGENTINA
Slide 4: Investment portfolio
INVESTMENT PORTFOLIO » STRATEGIC INVESTMENTS INDUSTRIAL INVESTMENTS CORPORATE VENTURE In alliance with Veronorte 81.1% 83.6% 46.3%* 35.2% 35.3%* GROWTH INVESTMENTS Insurance, Trends Pensions, Asset and Universal Processed Food Cement, Energy and Risk Management Wealth Management Banking and Infrastr
Slide 5: Industry and geographic diversification
I N D U S T R Y A N D G E O G R A P H I C D I V E R S I F I C AT I O N » Diversified financial services portfolio Geographic diversification Country Clients Revenues Net Income Assets COLOMBIA 27.7 52.9% 43.5% 49.2% CHILE 3.7 20.8% 22.4% 29.0% Banking MEXICO 7.3 9.0% 17.8% 9.1% Pension, AM & WM PERÚ
Slide 6: Large client base in attractive markets
L A R G E C L I E N T B A S E I N AT T R A C T I V E M A R K E T S » SURAMERICANA » SURA ASSET MANAGEMENT» BANCOLOMBIA » • 17.6 million clients in 9 countries. • 18.8 million clients in 6 countries. • +13 million clients • #1 Insurance company in Colombia • #1 Pension Fund in Latam with 23% • #1 Ban
Slide 7: History & growth stages
H I S T O R Y & G R O W T H S TA G E S » 1944 / 1990 1990 / 2007 2007 / 2016 2017 INSURANCE FINANCIAL INTERNATIONAL FOOTPRINT LEADERSHIP SERVICES EXPANSION OPTIMIZATION in Colombia group leader in Colombia Multi Latin, financial services group 7
Slide 8: Investment portfolio 2010 vs 2017
INVESTMENT PORTFOLIO » 2010» 2017» 25.3% Bancolombia 37% Bancolombia 3% Protección 27.8% Sura Asset Suramericana Management 6% USD 5.9 Bn 24% Grupo Nutresa 13.0% Suramericana 29% Grupo Argos Other USD 9.4 Bn 16.1% Grupo Nutresa 1% 17.2% Grupo Argos 46% in Financial Services Other 0.6% 66% in Financi
Slide 9: Strategic guidelines
S T R AT E G I C G U I D E L I N E S » COMPREHENSIVE RANGE OF SERVICES AND SYNERGIES INNOVATION GEOGRAPHIC Development of our AND NEW BUSINESS EXPANSION AND MARKET Corporate Role » VENTURES DEVELOPMENT Executive Committee CREATING ADDED • CEOs from strategic investments • Long-term strategy CORPORAT
Slide 10: Innovation and new ventures
I N N O V AT I O N A N D N E W V E N T U R E S » ALLIANCES Identify challenges of the digital age for our businesses, and partner for the development of specific projects, that help us make the transition together towards the future. » Big Data & Analytics » Blockchain » Identity STARTUP FACTORY COR
Slide 11: Comprehensive range of services and synergies
COMPREHENSIVE RANGE OF SERVICES AND SYNERGIES » ($) Wealth + – Life Cycle Universal Mandatory P&C Mandatory Voluntary Life Insurance Mutual Securities Programmed Annuities Assisted Banking Pensions Insurance Health Savings and Savings Funds Withdrawal Living ACCUMULATION PHASE DE-ACCUMULATION PHASE
Slide 12: Geographic expansion and market development
MEXICO G E O G R A P H I C E X PA N S I O N #29 AND MARKET DEVELOPMENT» #3 DOMINICAN REPUBLIC GUATEMALA #5 #4 COLOMBIA EL SALVADOR #1 #2 PANAMA #1 #1 #4 #2 #2 #2 PERU #1 BRAZIL CHILE #18 #1 in P&C #4 Strategic Investments ARGENTINA URUGUAY #17 #3 #2 Number below each country corresponds to ranking i
Slide 13: Corporate governance: shareholders
CO RPO RAT E G O VERNANCE C O R P O R AT E G O V E R N A N C E » SHAREHOLDERS» 27.1% Gru po Argos and 33.6% subsidiarie s Total Outstanding Shares 10.2% Gru po Nutresa 12.7% 25.8% Colombian Pe nsion 581,977,548 18.6% Funds (COMM) (COMM + PREF) Inte rnational Funds Outstanding Outstanding 21.5% 20.8%
Slide 14: Corporate governance: sustainability and board composition
CO RPO RAT E G O VERNANCE C O R P O R AT E G O V E R N A N C E : S U S TA I N A B I L I T Y A N D B O A R D C O M P O S I T I O N » HIGH CORPORATE STANDARDS Code of Good Governance in accordance with international practices. The Board of Directors has 7 members of which 4 are independent. The chairm
Slide 15: Sound reputation and brand strength
SOUND REPUTATION SO UND REPUT AT I O N AND BRAND STRENGTH» AND BRAND ST RENG T H DOMINICAN REPUBLIC 2017: 37 MEXICO 2017: 54 2016: PANAMA COLOMBIA 60% 2017: 65 2017: 83 2014: 48% PERU BRASIL SURA´S BRAND AWARENESS» 2017: 49 2017: 17 has surpassed the 50% threshold in most of the URUGUAY CHILE countr
Slide 16: Strong financial position: dividend evolution
STRONG FINANCIAL POSITION » Dividend evolution » 342 276 293 3x Bancolombia 2010 Dividends 204 SURA AM 187 Grupo Argos 151 *Calculation done in a proforma basis Grupo Nutresa 101 103 Source: each of the companies’ annual report. Protección Estimates done by Grupo SURA Suramericana Figures in USD Mil
Slide 17: Strong financial position: operating cash flow
STRONG FINANCIAL POSITION » O P E R AT I N G C A S H F L O W Grupo SURA generates close to USD 200 million for debt, dividend payment and investments 2018E 49 115 362 313 197 Dividends and Operating Expenses Operating Cash Interest Cash Available Other Income Flow Figures in USD million (1) FX = COP
Slide 18: Debt
DEBT» GRUPO SURA Banks Debt maturity profile » 550 International 21.1% Banks Bonds TYPE OF 77.5% Bonds Local Bonds 271 300 DEBT 1.4% Repos 139 75 97 53 65 55 34 33 - - 2018 2019 2020 2021 2022 2023 2024 2026 . 2029 2030 . 2049 Credit ratios» COP 74.7% CURRENCY Net Debt / Dividends Liquidity Loan to
Slide 19: Human talent and corporate culture
H U M A N T A L E N T A N D C O R P O R AT E C U L T U R E » Key aspects» Key practices» » Business culture » Technology at the service of human talent » Talent development » Leadership formation » High potential talents » Talent retention » Working environment and engagement » Compensation and bene
Slide 20: Grupo SURA Consolidated Results 4Q 2017
Grupo SURA Consolidated Results 4Q 2017 20
Slide 21: Highlights Grupo SURA
HIGHLIGHTS» GRUPO SURA • Growth in all businesses: Total revenues of USD 6.9 bn (+12.0%). INVESTMENT PORTFOLIO* • Driven by good dynamics of written premiums (+15.9%), revenues from services rendered (21.1%) and investment income (+ 12.6%). Other • Effort in efficiency: Suramericana improves operati
Slide 22: Statement of financial position
S TAT E M E N T O F F I N A N C I A L P O S I T I O N » CONSOLIDATED Assets » Liabilities » dec-16 22,626 dec-16 14,116 + 623 + 345 2.8% 2.4% dec-17 23,249 dec-17 14,460 0.0 5,000 .0 10 , 00 0.0 15 , 00 0.0 20 , 00 0.0 25 , 00 0.0 0.0 2,000 .0 4,000 .0 6,000 .0 8,000 .0 10 , 00 0.0 12 , 00 0.0 14 ,
Slide 23: Statement of comprehensive income
S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E » CONSOLIDATED Var%: +13.9% +21.1% NA +8.7% +12.6% +5.5% +12.0% 26 6,857 72 Total Revenues» 164 63 489 (81) 6,125 dec-16 6,125 + 733 12.0% dec-17 6,857 2016 Retained Services Exchange Commission Investment Other 2017 3,50.0 4,00.0 4,50.0 5,00
Slide 24: Statement of comprehensive income: net income
S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E » CONSOLIDATED Grupo SURA & Other* 35 560 Net Income Excluding (1) (11) 25 487 Var$ (58) (7) (28) Fx Impact Corporate Segment**: (29) Grupo SURA (58.5) SURA AM (26.1) Suramericana (9.5) Other Non-Recurring Expenses (19.5) +7.7% Net Income ∆ N
Slide 25: SURA Insurance, Trends y Risks: Suramericana consolidated results
SURA INSURANCE, TRENDS Y RISKS SURAMERICANA S.A CONSOLIDATED RESULTS 25
Slide 26: Suramericana
SURAMERICANA» MEXICO Ranking 29 0.4% 2017 0.2 M Total Premiums EL SALVADOR Ranking 2 USD 4.0 bn DOMINICAN 16.3% REPUBLIC PANAMA 0.7 M Ranking 4 Ranking 5 9.1% 8.1% 0.2 M 0.1 M 54.9% Colombia COLOMBIA Ranking 1 14.4% Chile 10.1% Argentina 24.5% 4.5% Brazil 10.8 M 5.1% Mexico BRAZIL Ranking 18 3.5% Pa
Slide 27: Suramericana: business model centered on client experience
SURAMERICANA» BUSINESS MODEL CENTERED ON CLIENT EXPERIENCE AND VALUE CREATION 01 04 Create great client experience and Build and develop competitive shareholders’ value advantages: Human talent, Technology and innovation, GTR 02 05 Strategic and emerging risk RSA Integration: management » Develop ne
Slide 28: Highlights Suramericana
HIGHLIGHTS» SURAMERICANA % WRITTEN PREMIUMS • Positive progress in the integration of operations acquired in 2016, incorporating Trends and El Salvador Uruguay Risks Management as a strategic differentiation factor. 3% 2% Rep. Dom. Panamá 2% • Total revenues of USD 4.8 bn (+ 20.9%), driven by acquir
Slide 29: Statement of comprehensive income: Suramericana
S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E » CONSOLIDATED Var%: +22.4% +22.2% +39.3% +0.8% NA +34.5% +20.9% 35 3 33 4,759 Total Revenues » 159 599 (7) dec-16 3,937 +823 MM 3,937 20.9% dec-17 4,759 0.0 50 00 . 1,000 . 1,500 . 2,000 . 2,500 . 3,000 . 3,500 . 4,000 . 4,500 . 5,000 . 2016
Slide 30: Statement of comprehensive income: Suramericana net income
S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E » CONSOLIDATED FIGURES SURAMERICANA S.A. Corporate Segment 4 8 29 5 170 (4) (9) (9) 12 135 Net Income Excluding: • Exchange rate difference from the corporate segment • Intangible amortizations (not comparables to 2016) +35.6% Net Income Life
Slide 31: Segments: premiums and claims ratio
SEGMENTS» PREMIUMS AND CLAIMS RATIO Life » Non life » Health care » Premiums Retained Claims Ratio Premiums Retained Claims Ratio Services rendered Claims Ratio dec-17 %Var dec-17 dec-16 dec-17 %Var dec-17 dec-16 dec-17 %Var dec-17 dec-16 Life 221 4.7% 28.5% 23.9% Auto 907 37.3% 60.9% 62.0% EPS 815
Slide 32: SURA Asset Management consolidated results
SURA ASSET MANAGEMENT CONSOLIDATED RESULTS 32
Slide 33: SURA Asset Management: strategic guidelines
SURA ASSET MANAGEMENT » STRATEGIC GUIDELINES 01 04 The client is the absolute priority Disruptive advisory based and is at the core of our strategy commercial model 02 05 Sustainability of the mandatory Excellence in Asset business Management 03 06 Acceleration of the Focus on efficiency voluntary b
Slide 34: SURA Asset Management: total company figures
Nº1 in Pensions in Latam FIGURES MEXICO Ranking 3 TO TAL C O M PAN Y » EL SALVADOR USD 28.7 Bn 7.1 M AUM Ranking 2 14.8% 3,092 USD 135 billion USD 4.8 Bn 1.6 M 47.5% 311 COLOMBIA Ranking 2 Clients USD 31.4 Bn 5.9 M 18.8 million +0.6% PERU Ranking 1 36.8% 1,840 Voluntary +15.1% I Mandatory +0.2% USD
Slide 35: Highlights SURA Asset Management
HIGHLIGHTS» SURA ASSET MANAGEMENT SURA AM Consolidated Mandatory Pensions Voluntary Savings • Net operating income +10% • Commission income growing +2.3% • Creation of Asset Management unit • Income from legal reserve +119% • Operating earnings +11.8% • Positive growth evolution • Total insurance ma
Slide 36: SURA Asset Management consolidated figures
SURA ASSET MANAGEMENT » CONSOLIDATED FIGURES Var%: +4.3% +45.2% +119% -6.3% +29.9% +10.1% Operating Income + Insurance Margin» 37 3 875 18 (5) 27 795 dic-16 795 80 10.1% dic-17 875 1,00,000 .0 1,20,000 .0 1,40,000 .0 1,60,000 .0 1,80,000 .0 2,00,000 .0 2,20,000 .0 2,40,000 .0 2,60,000 .0 2,80,000 .0
Slide 37: Statement of comprehensive income: SURA Asset Management
S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E » CONSOLIDATED FIGURES – SURA ASSET MANAGEMENT Corporate Segment 8 1 12 6 207 (2) (1) 206 Net Income excluding Fx 12 (26) (5) impact and non-recurring (5) provisions +16.8% Non-recurring Fx Impact* (+) provision Net Mandatory Voluntary Insura
Slide 38: Appendix
Appendix 38
Slide 39: Demographic fundamentals
D E M O G R A P H I C F U N D A M E N TA L S » YOUNG AND GROWING POPULATION 364 MM 559 MM Age 2010 people over 20 2050 100+ people over 20 INTERESTING DEMOGRAPHIC 90 – 94 7% 19% EVOLUTION IN LATAM » 80 – 84 Annuities 70 – 74 60 – 64 50 – 54 47% 51% Men 40 – 44 Savings and 30 – 34 accumulation 20 – 2
Slide 40: Financial services penetration
FINANCIAL SERVICES» PENETRATION Pension penetration (%GDP)» Banking penetration (%GDP) » 188.8% 97.4% 79.4% 70.7% 97.9% 86.6% 83.0% 33.6% 30.6% 47.1% 45.6% 32.4% 42.3% 27.9% 29.8% 49.3% 21.3% 20.3% 23.3% 14.7% Estados Colombia Perú Panamá México Uruguay Europa Chile El salvador Dominicana Unidos Eur
Slide 41: Cross holding structure
CROSS HOLDING STRUCTURE » FINANCIAL SERVICES 12.7% 33.6%* 35.2% 35.3% PROCESSED FOOD INFRASTRUCTURE 12.4% 9.8% Stakes in common shares as of December 31, 2017. *Includes stake held in Grupo SURA by Cementos Argos which owns 5.7% of Grupo SURA’s common shares. 46
Slide 42: Mandatory pension fund segment
M A N D AT O R Y P E N S I O N F U N D S E G M E N T » 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 f
Slide 43: Key main characteristics
KEY MAIN CHARACTERISTICS » 48
Slide 44: Key main characteristics
KEY MAIN CHARACTERISTICS » 49
Slide 45: Our vision: two major challenges for Latin American pension systems
OUR VISION» TWO MAJOR CHALLENGES FOR THE LATIN AMERICAN PENSION SYSTEMS: CLOSE THE EXISTING PENSION GAPS » ENHANCING THE INTEGRATION BETWEEN » or non-contribution Social assistance pillar A mandatory contribution pillar A voluntary savings pillar THE 3 PILLARS 50
Slide 46: Our vision: proposals for a multi-pillared pension system
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 Creat
Slide 47: Undisputed leadership in highly stable mandatory pension business
U N D I S P U T E D L E A D E R S H I P I N H I G H LY S T A B L E M A N D AT O R Y P E N S I O N B U S I N E S S » 23.3% 19.6% 14.9% 36.2% 40.0% 17.8% 47.1% Ranking 1st Ranking 4th Ranking 3rd Ranking 2nd Ranking 1st Ranking 2nd Ranking 2nd Metlife 11.1% 26.2% 2.5% Prudential 10.9% 27.3% 2.2% Princ
Slide 48: From labor cycle to generational cycle
FROM LABOR CYCLE T O G E N E R AT I O N A L C Y C L E » PERSONAL WEALTH Wealth Cycle ACCUMULATION DE-ACCUMULATION Life Cycle 0 – 17 18 – 26 27 – 36 37 – 46 47 – 55 56 – 65 65 + Mandatory Pensions Voluntary Savings Investments Asset Management Loans Payments Mandatory Insurance Voluntary Insurance 53
Slide 49: Investor relations contacts
DAVID BOJANINI CEO RICARDO JARAMILLO CFO JUAN CARLOS GOMEZ IR MD ANDRES ZULUAGA IR SPECIALIST E-mail: ir@gruposura.com.co Phone: (574) 3197039 www.gruposura.com.co 55
Grupo de Inversiones Suramericana — Q4 2017 Earnings Presentation on 6ix