Inversiones La Construccion Sa · BCS:ILC

Inversiones La Construccion Sa — Investor Presentation (November 2024)

59 slides from Inversiones La Construccion Sa's investor presentation, Nov 19, 2024

  1. Slide 1: Corporate Presentation November 2024

    Corporate Presentation November 2024 /2024NOV NOV. /2024 1

  2. Slide 2: Disclaimer

    DISCLAIMER Forward-looking statements are based on the beliefs and assumptions of ILC’s management, and on information currently available. They involve risks and uncertainties because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investo

  3. Slide 3: Agenda

    AGENDA 1 ILC at a Glance 2 Strategy 3 Closing Remarks NOV. /2024 3

  4. Slide 4: Chapter: ILC at a Glance

    CHAPTER ILC at a Glance 01 NOV. /2024 4

  5. Slide 5: ILC at a Glance: Lean structure under leading position

    Lean structure under leading position in ILC AT A GLANCE financial and health sectors Listed at Santiago Stock Exchange: Float 67,1% 32,9% FINANCIAL SECTOR HEALTH SECTOR Pension Fund Managers Life Insurance Bank Hospitals, Outpatient and Mandatory Health Supplemental Health Dental Centers Insurance

  6. Slide 6: ILC at a Glance

    ILC AT A GLANCE BE LEADERS IN THE CONSTRUCTION OF SOCIAL AND ECONOMIC VALUE THAT IMPROVES PEOPLE'S QUALITY OF LIFE WHO? WHAT? HOW? + 9 million Beneficiaries 4 Industries 5 Pillars (~1mm people over 60) Growth Profitability 3 COUNTRIES Health Pensions Flexibilty Focus on the Strong Financial aging po

  7. Slide 7: ILC in Numbers

    ILC IN NUMBERS 365 th retirees 1 million Health policyholders 4.6 +5 million USD 762 million Medical consultations million performed Second largest manager of pension Pension fund Paid out for funds in the Andean members healthcare services Region and medical leave Largest private health USD 75.8 bn

  8. Slide 8: Consistent Growth and Diversification Since Our IPO

    CONSISTENT GROWTH AND DIVERSIFICATION SINCE OUR IPO 2012 Sep 2024 Assets Ch$ bn 1,055 15.0x 15,840 AUM US$ bn 22.3 3.6x 82.0 Equity Ch$ bn 428 2.4x 1,111 Beneficiaries MM 3.9 2.5x 9.8 Industries 2 2x 4 Employees +10,500 1.3x +13,800 NOV. /2024 FX: CLP/USD 950 Source: ILC 8

  9. Slide 9: Consistent Returns Over Time and Double Digit ROAE

    CONSISTENT RETURNS OVER TIME AND DOUBLE DIGIT ROAE PROFIT AND ROAE ILC 19.0% 18.4% 14.3% 14.5% 49.6% 18.3% 13.8% 12.0% 10.8% 12.0 10.6% 17.0% 19.6% 16.4% % Ch$ bn. Recurring Profit Extraordinary Profit / Loss 222.8 12.3 182.6 200.3 21.9 129.4 146.5 83.0 62.5 69.2 72.5 71.9 90.3 91.0 86.5 88.4 (31.7)

  10. Slide 10: Net Income Diversification: New Industries & Geographies

    NET INCOME DIVERSIFICATION: NEW INDUSTRIES & GEOGRAPHIES ILC’s Recurring Profit(1) Contribution by Subsidiary (2012) 3.7% 79.3% 16.2% Pensions 0.7% Financial Profit Growth 2012- 9M24 (LTM) Health 2.4X ILC Recurring Profit(2) Contribution by Subsidiary (September 2024 LTM) 37.2% 34.1% 16.3% 4.5% 7.9%

  11. Slide 11: Consistent and Attractive Dividend Yield

    CONSISTENT AND ATTRACTIVE DIVIDEND YIELD DIVIDENDS PER SHARE AND DIVIDEND YIELD ILC 2013 - 9M24 Ch$ 750 631 650 ILC’s Average Dividend 600 yield 518 2013-9M24 370 449 450 19.8% 450 7.6% 330 350 8.3% 8.6% 223 7.0% 11.7% 7.1% 5.6% 6.1% 5.4% Distributed since IPO: 5.0% 2.7% 4.0% 4.4% Ch$5,951 Per share

  12. Slide 12: Outpacing the Index: Profitability Has Outperformed IPSA

    OUTPACING THE INDEX: CONSIDERING DIVIDENDS, PROFITABILITY HAS OUTPERFORMED IPSA % EVOLUTION OF ILC STOCK PRICE VS IPSA(1) (SINCE IPO IN 2012) 250 200 Stock price profitability adjusted by dividends • 122,6% IPO 2012 - Sep 2024 150 • ILC: 100 +107.4% • IPSA: 50 +47.8% - 2012 2013 2014 2015 2016 2017

  13. Slide 13: This Has Been Driven by Our 5 Pillars Strategy

    THIS HAS BEEN DRIVEN BY OUR 5 PILLARS STRATEGY NOV. /2024 13

  14. Slide 14: Our Fundamental Pillars to Achieve Consistency

    OUR FUNDAMENTAL PILLARS TO ACHIEVE GROWTH CONSISTENCY ESG PROFITABILITY Our Propose: Be leaders in the construction of social and economic value, that improves people’s quality life STONG FLEXIBILITY FINANCIAL POSITION NOV. /2024 14

  15. Slide 15: Presence in Industries Which Outpaced GDP Growth

    PRESENCE IN INDUSTRIES WHICH OUTPACED GDP Growth GROWTH CAGR 1992-2002 CAGR 2002-2012 CAGR 2012-2023 PENSIONS 18.3% 11.8% 7.2% AUM Chilean pension funds industry ANNUITIES 22.4% 9.9% 9.4% AUM Life Insurance industry BANKING Total Loans 18.1% 10.4% 7.1% HEALTH Current health expenditure 8.9%(2) 10.0%

  16. Slide 16: Inorganic Growth: Successful Acquisitions

    Growth INORGANIC GROWTH SUCCESSFUL ACQUISITIONS 1980 … 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 IPO SUCCESSFUL ACQUISITIONS Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition (2013) (2015) (2016) (2019) (2022) (2023) Multiple (P/B) Multiple (P/B) Spread Multip

  17. Slide 17: Successful Turnarounds

    Profitability SUCCESSFUL TURNAROUNDS ILC’s role is in detecting opportunities in efficiency and operational turnaround in our current operations and acquisitions providing strategic guidance to our subsidiaries EXISTING SUBSIDIARIES M&A AND NEW OPPORTUNITIES • Focus on efficiency • Asset allocation

  18. Slide 18: Self-Funded Growth (2013-9M24)

    SELF-FUNDED GROWTH (2013-9M24) Profitability Sources of Funds Uses of Funds USD 1,416 MM USD 1,221 MM Capital Divestments Debt Dividend Dividends Paid Increases in M&A Received Out Subsidiaries USD 298 MM USD 350 MM USD 782 MM USD 598 MM USD 326 MM USD 297 MM NOV. /2024 FX 950 CLP/USD Source: ILC 18

  19. Slide 19: Preparing Our Businesses for Regulatory Changes

    PREPARING OUR BUSINESSES FOR REGULATORY CHANGES Flexibility Health result Regional & product Reorganization Focus on financial hedging diversification business NOV. /2024 19

  20. Slide 20: New Sources of Funding: Access to International Debt Market

    NEW SOURCES OF FUNDING: ACCESS TO INTERNATIONAL DEBT MARKET Strong Financial Position 2012 September 2024 Local Capital Local Capital Domestic Banks Domestic Banks Market Market Sources of Fundings 2 Outstanding Bonds 5 Outstanding Bonds Credits Credits UF 2.5 MM UF 5.6 MM Avg. Rate: UF+ 3.9% Avg. R

  21. Slide 21: Well-Managed Debt Maturity and Liquidity Position

    WELL-MANAGED DEBT MATURITY AND LIQUIDITY POSITION Strong Financial Position ILC (STANDALONE) AMORTIZATION SCHEDULE LIQUIDITY POSITION (SEP-2024) Ch$ bn. Bank Loans ILC-C ILC-H ILC-I ILC-J ILC-K 144A- Reg S 144A-Reg S 21.7% 300 225 Ch$ Investment 150 Portfolio 194.8 bn. 41.1% 75 - Cash & 2033 2034 20

  22. Slide 22: Our Sustainability Journey

    OUR SUSTAINABILITY JOURNEY ESG As part of its strategic sustainability roadmap, ILC formalized its corporate philosophy in 2023. It was founded upon the company's history, local and international trends, a variety of literature and studies and consultancies conducted on related topics over the last

  23. Slide 23: ESG Results Over Time

    ESG RESULTS OVER TIME ESG Responsible approach for Investment& Loans Inclusion programs for underserved groups: • Public Health Insurance +13 pp • Elderly +28 pp 73% • SMEs 73% 60% Launch of Compromiso Mayor: 45% Impact on ~1mm people over 60 (1/3 of the elderly population in Chile) Active role in p

  24. Slide 24: 2024 Milestones

    2024 MILESTONES 1. 2. ILC REACHES AN AGREEMENT TO INCREASE ITS STAKE IN BANCO INTERNACIONAL COMPLETES ITS FIRST BANCO INTERNACIONAL TO 100% WITHIN 3 YEARS BOND ISSUANCE ON THE SWISS MARKET On August 14th, 2024, ILC reached an agreement with Baninter SpA to acquire an On July 2nd, 2024, an unsecured

  25. Slide 25: Advances in Regulatory Changes

    ADVANCES IN REGULATORY CHANGES HEALTHCARE SYSTEM CONTEXT SHORT LAW OF ISAPRES PAYMENT AND ADJUSTMENT PLAN • Adjustment of price to the Single Factors Table • The Payment plan and extraordinary • In Dec 2019, the Regulator (Circ. 343) established and minimum contribution of 7% contained in premium pe

  26. Slide 26: Proposed Pension System Regulatory Changes in Chile

    PROPOSED PENSION SYSTEM REGULATORY CHANGES IN CHILE CURRENT SITUATION PENSION REFORM BILL(2) CHAMBER OF DEPUTIES – JAN/24 • PGU of Ch$ 250,000(1) Most of its articles were rejected, but the idea to • Mixed Contributive Pillar: legislate was approved • State contribution of Ch$ 214,296 to o Individua

  27. Slide 27: Advances in Regulatory Changes – Peru and Colombia

    ADVANCES IN REGULATORY CHANGES – PERU AND COLOMBIA PENSION REFORM IN COLOMBIA • The project presented by the President of Colombia, Gustavo Petro, was approved by Congress on June 14th, 2024 • It introduces a four-pillar system: solidarity, semi-contributory, contributory, and voluntary savings • Th

  28. Slide 28: Chapter: Strategy

    CHAPTER STRATEGY 02 NOV. /2024 28

  29. Slide 29: Next Phase: Growth in Financial Business

    NEXT PHASE: GROWTH IN FINANCIAL BUSINESS Business Consolidation Growth, Diversification and Turnarounds Growth in Financial Business 2012 2016 2017 2022 2023 2027 Foundation (2012) Acquisition (2013) Acquisition (2015) Acquisition (2016) Increase of participation Divestment NOV. /2024 29

  30. Slide 30: To a New Focus

    TO A NEW FOCUS Annuities Growth in financial Pensions business Z Health Banking NOV. /2024 30

  31. Slide 31: Banking

    NOV. 1/2024 Banking © Banco . Internacional iKC

  32. Slide 32: Outpacing the Industry with Room to Grow

    OUTPACING THE INDUSTRY WITH ROOM TO GROW BANCO INTERNACIONAL LOAN MIX(1)(2) US$ bn. Commercial Consumer Mortgage Market Share Loans 4,1x 3.9 NEW STAGE 2027 3.5 3.0% 3.0% 7.9% 1. 2.8 6.6% Scale the Bank through 2.6% organic and inorganic growing 2.2 0.9% 2.0% 1.7 0.6% 89.2% 1.9% 90.4% 1.0 0.4% 96.5%

  33. Slide 33: Developing Products in Retail Banking

    DEVELOPING PRODUCTS IN RETAIL BANKING #1 Best rate in the Market BANCO INTERNACIONAL RETAIL CUSTOMERS GROWTH Term Deposits • Cross-selling with checking N° of Customers accounts and Time Deposits • Alliance with Tenpo Consumer +96.3% Loans • Digital cross-selling 30,412 31,199 • Clients and non-clie

  34. Slide 34: Establishing a Robust Funding Structure

    ESTABLISHING A ROBUST FUNDING STRUCTURE BALANCE SHEET STRUCTURE 2023 VS 2024(1) Ch$ bn. 4,448 4,230 4,448 4,230 Liquid reserves invested in Access to local and Chilean government 3% Other Assets 8% 1% 8% international markets securities and Central Bank 9% Equity Trading Assets 1% 9% instruments Cas

  35. Slide 35: Risk Management Sustains Our Growth in the Retail Segment

    RISK MANAGEMENT SUSTAINS OUR GROWTH IN THE RETAIL SEGMENT NON-PERFORMING LOANS COLLATERAL COVERAGE SOLVENCY RISK RATINGS Banco Internacional Banco Internacional Banco Internacional Local (ICR/Feller) Industry Total Portfolio Industry Industry Banco Internacional Consumer 73.8% 75.6% 75.4% 14.8% 15.8

  36. Slide 36: Sustained Growth in Profit

    SUSTAINED GROWTH IN PROFIT BANCO INTERNACIONAL PROFIT & ROAE MAIN TOPICS 2024 – 2027 Ch$ bn. Net Income 18.9% • Enhanced organic growth featuring 18.2% innovative digital expansion 15.8% 15.9% • Adding inorganic opportunities 14.9% • Diversified business model across 13.0% market segments 10.8% • Fo

  37. Slide 37: Annuities

    NOV. 1/2024 Annuities confuturo iKC

  38. Slide 38: Annuity Market Maintained High Dynamism

    ANNUITY MARKET MAINTAINED HIGH DYNAMISM INDUSTRY ANNUITY PREMIUMS AND ANNUITY RATE VS PROGRAMED WITHDRAWAL RATE Rate (%) CONFUTURO'S MARKET SHARE 5% September 2024: UF MM 4% 4.41% 3% 8.3% 14.0% 13.6% 2% September 2024: 3.43% 1% - 2018 2019 2020 2021 2022 2023 2024 Programed Withdrawal Rate Annuity R

  39. Slide 39: A Flexible Sales Channel Strategy and Cost Efficiency

    A FLEXIBLE SALES CHANNEL STRATEGY AND COST EFFICIENCY Market Growth ANNUITIES SOLD BY CHANNEL SG&A AND SG&A OVER AUM UF MM 11% 1.13% 26% 24% 1.08% 1.01% 7% 33% 33% 0.98% 0.96% 0.96% 1.00% 43% 42% 11% 0.57% 0.48% 0.50% 0.44% 0.42% 0.43% 27% 0.40% 40% 51% 82% 28% 30% 63% 1.1 1.3 1.1 1.0 40% 0.9 1.0 0.

  40. Slide 40: Investment Portfolio Identity – Increased Focus on Alternative Assets

    INVESTMENT PORTFOLIO IDENTITY – INCREASED FOCUS ON ALTERNATIVE ASSETS INVESTMENT PORTFOLIO(1) CHANGES OVER THE LAST YEARS USD bn. 4.3 5.9 7.0 8.9 13% 23% 19% 22% 12% 7% 1% 12% 15% 14% 12% 69% 55% 51% 48% 2% 2% 2% 7% 3% 5% 4% 4% 2013 2016 2020 Sept. 2024 Equities, Cash & Others Local Investment Funds

  41. Slide 41: Sustained Generation of Results Over Time

    SUSTAINED GENERATION OF RESULTS OVER TIME CONFUTURO PROFIT & ROAE MAIN TOPICS 2024 – 2027 Ch$ mm. 26.7% 26.0% • Continue increasing portfolio leverage in a growing industry • Diversified investment portfolio 15.2% 122.7 133.1 • Operational leverage: grow revenues with 12.1% 12.4% 95.7 current struct

  42. Slide 42: Pensions

    NOV. 1/2024 Vg eee Pensions BiasiraT Gos iKC

  43. Slide 43: Consolidating a Returns and Efficiency Regional Model

    CONSOLIDATING A RETURNS AND EFFICIENCY REGIONAL MODEL INVESTMENT AUM TAXABLE INCOME EFFICIENCY(1) RETURNS #2 #1 USD 50.4 bn In 2 funds (L5Y) #2 35.5% USD 4.3 bn #1 #4 In 4 funds (L5Y) #1(2) 51.2% #2 #3 USD 15.2 bn In 1 fund (L5Y) #2 65.9% #2 in Andean Region with 5.6 million affiliates and IMPROVEME

  44. Slide 44: Improvement in Taxable Income Offsets the Decrease in Contributors

    IMPROVEMENT IN TAXABLE INCOME OFFSETS THE DECREASE IN CONTRIBUTORS AFP HABITAT OPERATING RESULT AFP HABITAT AND AFP INDUSTRY TAXABLE INCOME Ch$ MM. AFP Habitat Industry Difference with the Industry Ch$ bn. +7.4% +2.1% +19.4% +21.2% +20.7% +20.1% +20.6% +19.3% +15.4% 102.2 109.8 112.1 1.35 1.47 1.08

  45. Slide 45: Higher Revenues, Mainly Due to Higher Taxable Income and AUM per Affiliate

    HIGHER REVENUES, MAINLY DUE TO HIGHER TAXABLE INCOME AND AUM PER AFFILIATE AUM PER AFFILIATE REVENUES TAXABLE INCOME REVENUES +13.2% +52.1% +31.6% US$ +22.2% Ch$ bn. Ch$ Ch$ bn. 42.8 miles 611.8 20.0 miles 540.5 4.2 15.2 28.1 3.4 June 2023 June 2024 6M23 6M24 June 2023 June 2024 6M23 6M24 LEGAL RESE

  46. Slide 46: Growth in Profit Due to Increase in Taxable Income and Legal Reserve Return

    GROWTH IN PROFIT DUE TO AN INCREASE IN TAXABLE INCOME AND IMPROVEMENT IN LEGAL RESERVE RETURN EVOLUTION OF AFP HABITAT CHILE’S PROFIT Ch$ bn. MAIN TOPICS 2024 – 2027 167.1 135.1 128.7 129.9 131.6 90.9 108.8 • Andean Region Consolidation • Focus on increasing taxable income 2018 2019 2020 2021 2022 2

  47. Slide 47: Health

    NOV. 1/2024 QD VIDACAMARA iKC

  48. Slide 48: Our Healthcare Model

    OUR HEALTHCARE MODEL • Largest private network in Chile • Close relationship with the public insurer • Relevant size in inpatient, outpatient and dental • Know-how in individual and • Know-how in group health supplementary health insurance and relationship with insurance companies • Relationship dev

  49. Slide 49: Success in Initial Three Phases of Our 2025 Vision

    SUCCESS IN INITIAL THREE PHASES OF OUR 2025 VISION Phase 1 Phase 2 Phase 3 Phase 4 1. INSTITUTIONAL, INTEGRATED, AND NETWORKED HEALTHCARE REDESIGN OF CONSOLIDATION OF INSTITUCIONAL NETWORK THE NETWORK THE HEALTH 2. ORGANIZATION CONSOLIDATION BUSINESS NETWORK MEDICAL ROADMAP HEALTHCARE THAT SUPPORTS

  50. Slide 50: Developing a Strategic Plan Across the Entire Network

    DEVELOPING A STRATEGIC PLAN ACROSS THE ENTIRE NETWORK 1. • Interconnected network with a single electronic registry • 100% accreditation of our clinics INSTITUTIONAL, INTEGRATED, AND • Development of the Cardiovascular Center and expansion of the NETWORKED HEALTHCARE Cancer Institute • Consolidation

  51. Slide 51: Reducing Regulatory Risk by Diversifying Sources of Income

    REDUCING REGULATORY RISK BY DIVERSIFYING SOURCES OF INCOME REVENUE BREAKDOWN BY INSURER REDSALUD EBITDA BY CENTER TYPE 2015 Sept 2024 LTM 13% 13% 30% 15% 20% 22% 20% 25% 15% 23% 19% 15% Future growth will come 23% from outpatient healthcare 29% Ch$ 27.2 41% 29% 28% 28% 37% 45% bn. 27% 36% 41% 51% Ch

  52. Slide 52: Strategic Alliances with World-Renowned Partners

    STRATEGIC ALLIANCES WITH WORD-RENOWNED • Providing care since 1921 • Largest Healthcare Network in PARTNERS • Ranked #2 in the world by Newsweek Chile • Vision: To be the benchmark in • Care Priorities: Patients, private medical and dental health Caregivers, Community, in Chile; To be a very good pl

  53. Slide 53: Anticipating Changes in the Industry's Mix of Beneficiaries

    ANTICIPATING CHANGES IN THE INDUSTRY’S MIX OF BENEFICICIARIES TOTAL BENEFICIARIES CONSALUD + VIDA CÁMARA 1,068 1,098 Beneficiaries #3 1,036 1,056 1,058 1,035 1,035 949 976 929 Contributors #3 825 329 347 349 361 CAGR 2014-2024 291 391 263 282 604 519 159 Vida Cámara: 14.7% 666 666 666 685 707 721 70

  54. Slide 54: Healthcare and Insurance Hedging Strategy

    HEALTHCARE AND INSURANCE HEDGING STRATEGY HEALTH SECTOR NET PROFIT Ch$ bn. Consalud (IFRS) RedSalud Vida Cámara (Health Sector) Loss due Liability from the Short Law of Isapres 47.6 1.1 17.7 15.4 1.1 5.9 5.1 1.0 2.4 7.1 3.3 31.0 9.8 21.2 17.9 20.6 5.8 1.3 (5.3) 9.6 ( 21.4) ( 17.1) ( 8.0) (1.1) (31.7

  55. Slide 55: Our Healthcare Model 2027

    OUR HEALTHCARE MODEL 2027 Organic growth Insurers serving Consolidation of the together with demand to the healthcare network demographics healthcare facilities Analyze potential Using and working with Flexible organizations to alliances the data generated adapt to regulatory changes NOV. /2024 55

  56. Slide 56: Chapter: Closing Remarks

    CHAPTER Closing Remarks 03 NOV. /2024 56

  57. Slide 57: Strategic Plan and 2027 Goals

    STRATEGIC PLAN AND 2027 GOALS Organic growth Organic growth with Consolidation of leveraging market Potential 4th market digital approach healthcare network opportunities Scale retail financing Economic value in Flexibility to adapt to Voluntary savings base spread regulatory changes Andean región D

  58. Slide 58: Next Phase: Growth in Financial Business

    NEXT PHASE: GROWTH IN FINANCIAL BUSINESS Business Consolidation Growth, Diversification Growth in Financial Business and Turnarounds 2012 2016 2017 2022 2023 2027 target Profit Ch$60- 80 bn Ch$90-120 bn Ch$130-180 bn ROE 15-18% 12-15% 12-15% NOV. /2024 58

  59. Slide 59: /2024 NOV

    Corporate Presentation November 2024 /2024NOV NOV. /2024 59

Inversiones La Construcción S.A. (ILC) — Investor Presentation (November 2024) on 6ix