Quinenco S.A. · BCS:QUINENCO
Quinenco — Investor Presentation (November 2013)
45 slides from Quinenco's investor presentation, November 2013
Slide 1: Company Presentation / November 2013
Company Presentation / November 2013 1
Slide 2: Quiñenco Overview
Recent Events Financial Main Operating Conclusions Quiñenco Overview Overview Companies 2
Slide 3: Quiñenco
Quiñenco • Quiñenco is one of Chile’s largest business conglomerates with US$57 billion in assets under management • Companies managed by Quiñenco generated sales revenue of US$12 billion in 2012 • The Quiñenco group of companies employ around 32,780 people in Chile and abroad 3
Slide 4: Ownership Structure
Ownership Structure Minority Shareholders (Chilean Stock Exchanges) 81% 19% Mining Industrial / Financial Services Market Capitalization US$ 4.1(1) billion (1) Market Capitalization as of October 30, 2013 4
Slide 5: Quiñenco: Main Operating Companies
Quiñenco: Main Operating Companies % Control as of June 2013 58.5% 66.1% 22.6%(2) 65.9% 37.4%(3) 37.4%(4) 100% Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): US$ 902 mln(5) US$ 14.4 bln US$ 5.0 bln US$ 1.3 bln US$ 57 mln US$ 0.7 bln US$ 1.0 bln • 1st bank in Chile • No.1 Chi
Slide 6: First Class Board and Management
First Class Board and Management Board of Directors Andrónico Luksic Craig Jean-Paul Luksic Fontbona Nicolás Luksic Puga Fernando Cañas Berkowitz Gonzalo Menéndez Duque Hernán Büchi Buc Matko Koljatic Maroevic Chairman Vice Chairman Director Director Director Director Director Senior Management • Fr
Slide 7: Over 50 Years of History
Over 50 Years of History 1957 - 1998 1999 - 2008 2009 - 2012 1957 Sociedad Forestal Quiñenco S.A is 1999 Quiñenco sells stake in OHCH, later 2009 Sale of remaining Entel shares (2.9%) created. acquiring 51.2% of Banco de A. Edwards and 8% of Banco de Chile. 2010 Quiñenco divests Telsur. 1960’s Socie
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: Quiñenco: World Class Strategic & Commercial Alliances
Quiñenco: World Class Strategic & Commercial Alliances Beverage & Food Manufacturing Energy Financial 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 Continuous growth of shareholder value 3 Max. Profitability Hoteles 2 Restructuring 1 Acquisition •Restructuring and •Develop and maximize •Acquisitions of administrat
Slide 12: Corporate Level Transactions
Corporate Level Transactions Quiñenco has carried out various transactions throughout its history, generating US$2.0 billion in profits over the last 16 years from divestments of US$4.6 billion 823(1) 1,969 1,061 67 (12) (13) 43 Telecom Telecom Minoristas Retail Inmobiliarios Real Estate Alimentos y
Slide 13: Strong Growth in NAV
Strong Growth in NAV Over the past 10 years, the net value of Quiñenco’s assets has multiplied by 10 times, growing at an average compound annual rate of 26.2% Quiñenco - NAV (MUS$) CAGR(2) 6,858 (1) 2002 – 2012 (1) 6,264 Quiñenco’s 5,789 (1) NAV 26.2% 5,137 IPSA 13.8% 3,275 3,071 2,721 1,989 2,028
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 19% Financial Services Deposits 1 17% Beer Chile 1 79% Beer Argentina 2 23% Carbonated B
Slide 15: 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$ 4.5 billion as of June 30, 2013) (US$ 6
Slide 16: NAV & Share Price Trend
NAV & Share Price Trend NAV/Share Price Trend as of June 30, 2013 3.000 2.448 2.509 2.500 2.363 2.239 2.194 2.000 1.500 1.540 1.610 1.379 1.399 1.000 1.315 500 0 Jun- 12 Sep- 12 Dec- 12 Mar- 13 Jun- 13 NAV per share (CH$) Share price (CH$) Note: Market information and book values as of June 30, 2013
Slide 17: Diversified Revenues and Results (2012)
Diversified Revenues and Results (2012) Quiñenco has achieved diversified revenues and results, thus generating stable cash flows Aggregate Revenues by Sector (1) Net Income (2) (YTD December 2012) (YTD December 2012, MUS$) Transport Financial Services 28% 23% 290.9 226.0 CCU 29.5 50.1 SM SAAM Port
Slide 18: Diversified Revenues and Results (1H 2013)
Diversified Revenues and Results (1H 2013) Quiñenco has achieved diversified revenues and results, thus generating stable cash flows Aggregate Revenues by Sector (1) Net Income (2) (YTD June 2013) (YTD June 2013, MUS$) Port & Shipping Serv. 4% Financial Services 23% Transport 28% 20.9 146.9 121.5 SM
Slide 19: Stable Dividend Cashflow
Stable Dividend Cashflow Good operating company performance allows a strong dividend flow to the parent company YTD June 2013 Dividends Composition SM Madeco of Dividends 4% SAAM (MUS$) 11% (YTD March 2012) CCU Banco 30% de 300 Chile 13% 212 154 Banchile Vida 42% 94 99 Average 2009-2013 LQIF CSAV 20
Slide 20: Quiñenco – Strong Fundamentals
Quiñenco – Strong Fundamentals Dominant position Quiñenco’s companies are leaders in their respective markets. in its markets Proven track record in value Holding has proven track record in value creation as evidenced by sale of creation investments for approximately US$ 4.6 bln and gains on sale of
Slide 21: Recent Events
Quiñenco Recent Events Financial Main Operating Conclusions Overview Overview Companies 21
Slide 22: Recent Events Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • On August 17, 2013, Banco de Chile announced its results for the second quarter of 2013 ̶ Leadership in net income and profitability in the Chilean financial system ̶ Lowest ratio of cost-income of 43.7% among its peers 49% ̶
Slide 23: Recent Events Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • On September 11, 2013, Sociedad Matriz SAAM S.A. announced that its subsidiary SAAM signed an association agreement with Boskalis Holding B.V., holding of the tugboat company SMIT, the second player worldwide in said industry
Slide 24: Financial Overview
Quiñenco Recent Events Financial Overview Main Operating Conclusions Overview Companies 24
Slide 25: Sound Results
Sound Results Quiñenco has reported increasing revenues and strong bottom line results Revenues(1) Net Income(2) (MUS$) (MUS$) 5,543 575 4,253 2,845 2,489 2,486 306 275 2,085 173 147 58 2009 2010 2011 2012 Jun-12 Jun-13 2009 2010 2011 2012 Jun-12 Jun-13 Quiñenco started reporting in accordance with
Slide 26: 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$ 4.6 billion as of June 2013 US$ 4.6 billion as of June 2013 Cash Other 5% 3% ST Debt Other Liabilities 1% 2% LT Debt 12% SH Equity L
Slide 27: 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$ 435 527 125 241 -1,078 2009 2010 2011 2012 Jun-13 MUS$ 2009 2010 2011 2012 Jun-13 Debt 329 337 751(1) 877 764 Cash -204 -1,415 -316 -636 -238 Net Debt 125 -1,078 4
Slide 28: Main Operating Companies
Quiñenco Recent Events Financial Main Operating Companies Conclusions Overview Overview 28
Slide 29: 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 assets
Slide 30: Banco de Chile
Banco de Chile • In 2012 the bank’s net operating revenues grew 9.7%, based on higher loans to customers and ROAE a higher balance of demand deposits and current accounts, mitigated by higher loan provisions. During 1H 2013, this positive trend continued. 27.0% 25.4% 24.7% 22.7% 23.2% 22.5% • Net in
Slide 31: CCU
CCU • Founded in 1850, CCU is the largest brewery and • Affiliate Foods participates in sweet snack beverage producer in Chile, and the second business. brewery in Argentina. • Entered purified water segment through joint • Assets of US$2.8 billion. venture with Nestlé S.A. • Over 6,400 employees. •
Slide 32: CCU
CCU • Sales grew by 10.9% in 2012 to MUS$2,121. 1H EBITDA by Business Segment June 2013 2013 continued with strong growth of 9.6%. • EBITDA was MUS$465 decreasing by 1.9% from Spirits Other 2011. However, in 1H 2013 EBITDA grew by Wine 3% 5% 7.3%, based mostly on the non-alcoholic 7% beverage segmen
Slide 33: Madeco/Invexans
Madeco/Invexans • Madeco, up until 2012, was a regional leader in • Shareholders’ Meeting held in March 2013, flexible packaging, a relevant actor in brass mills approved division of Madeco, based on and profiles, with a stake in the cable industrial significance of investment in Nexans, so as to wo
Slide 34: 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 at more than 90 production sites across 5 continents. • 25,000
Slide 35: Madeco
Madeco • Madeco is a regional leader in flexible packaging, and a relevant actor in brass mills and profiles. • 12 plants in Chile, Argentina, Peru and Colombia. • Over 2,900 employees • Annual sales volume of 60,000 tons. Sales Mix Madeco (June 2013) EBITDA Mix (June 2013) Profiles Profiles 14% Bra
Slide 36: Invexans/Madeco
Invexans/Madeco • In 2012 operating income and net income include a gain related to negative goodwill arising from the accounting Sales method of the investment in Nexans. Invexans: Madeco (historical) Invexans Madeco (newco) • In 1H 2013, Invexans’ net income mainly reflects its 418 437 423 proport
Slide 37: Enex
Enex • Enex S.A. has a network of 448 service stations, Market Share of Liquid Fuel Sales with 122 convenience stores (December 2012) • Main business activities: - Distribution of fuels through its service Others stations 7% Petrobras - Distribution of fuels to industrial clients and 13% transport s
Slide 38: Enex
Enex • Sales in 2012 reached MUS$2,643, mainly Sales corresponding to fuels, followed by lubricants, (MUS$) asphalts, chemical products, and services. Sales in 2011 include only seven month’s results, after 2,643 acquisition at the end of May. During 2013 sales have continued growing. • Net income i
Slide 39: CSAV
CSAV • CSAV, founded in 1872, is one of the oldest • In May 2011 the company started a major shipping companies in the world. restructuring process with the objective of • Its activities include overseas transport of significantly improving its competitive and containerized cargo, liquid and solid b
Slide 40: CSAV
CSAV • In 2012 CSAV’s sales reached MUS$3,432, Sales 28.4% below 2011, as a result of the (MUS$) restructuring plan implemented in 2Q 2011. In 1H 2013 sales diminished due to a lower sales 5,215 volume. 4,796 • Net income in 2012 was a loss of MUS$314, 3,432 improving 74.9% with respect to 2011. Thi
Slide 41: SM SAAM
SM SAAM • SM SAAM is dedicated to port services and • In September 2013, Quiñenco acquired an management of port concessions, including three additional 5% stake in SM SAAM, thus reaching a main business areas: port terminals, tug boats, share of 42.4%. and logistics. • SM SAAM, subscribed, through
Slide 42: SM SAAM
SM SAAM Sales • In 1H 2013, SM SAAM’s consolidated sales (MUS$) reached MUS$241, up 9.5% over the last SAAM SM SAAM quarter, reflecting improved performance in all business segments. 426 448 361 • SM SAAM obtained net income of MUS$33 in 278 1H 2013, 8.8% higher than the previous period 220 241 base
Slide 43: Conclusions
Quiñenco Recent Events Financial Main Operating Conclusions Overview Overview Companies 43
Slide 44: 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 45: Thank you for your attention
Thank you for your attention ir AI ~ 448 QUINENCO S.A. 45