Inversiones La Construccion Sa · BCS:ILC
Inversiones La Construccion Sa — Q3 2024 Earnings Presentation
42 slides from Inversiones La Construccion Sa's earnings presentation, November 2024
Slide 1: Conference Call 3Q-2024
Conference Call 3Q - 2024 /2024NOV. NOV. /2024 1
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
Slide 3: Agenda
AGENDA 1 Context 2 2024 Milestones & Consolidated Results 3 Zoom-in by Division 4 ILC’s Financial Position 5 Wrap-Up and Conclusions NOV. /2024 3
Slide 4: Context
Chapter Context 01 NOV. /2024 4
Slide 5: 3Q-2024: Macroeconomic Context
3Q-2024: MACROECONOMIC CONTEXT IPSA S&P500 AND PENSION FUND C QUARTERLY RETURNS(1) % FORMAL EMPLOYMENT RATE % IPSA S&P 500 Fund C 73.3% 72.5% 73.0% 71.9% 71.8% 11.2% 10.2% 6.2% 7.2% 7.3% 7.2% 5.1% 3.9% 0.8% 0.8% -0.2% -3.6% -3.5% -2.1% -3.6% 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24 3Q24 UF CHILE
Slide 6: 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
Slide 7: 2024 Milestones & Consolidated Results
Chapter 2024 Milestones & 02 Consolidated Results NOV. /2024 7
Slide 8: 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
Slide 9: DJSI 2024 Ranking: ILC Positioned 5th Globally in the Industry
DJSI 2024 RANKING: ILC POSITIONED 5th GLOBALLY IN THE INDUSTRY ILC’S DJSI SCORE EVOLUTION(1) +62% ILC’s Entry into the Yearbook ILC’s Entry into the DJSI 98 99 96 84 86 74 76 70 73 63 67 49 50 50 45 31 35 25 16 13 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Score Percentile NOV. /2024 (1) Resu
Slide 10: Our Fundamental Pillars to Achieve Consistency
OUR FUNDAMENTAL PILLARS TO ACHIEVE GROWTH CONSISTENCY ESG PROFITABILITY Our Purpose: Be leaders in the construction of social and economic value that improves people's quality of life STRONG FLEXIBILITY FINANCIAL POSITION NOV. /2024 10
Slide 11: Consistent Returns Over Time
CONSISTENT RETURNS OVER TIME PROFIT AND ROAE ILC(1) 18.3% 13.8% 12.0% 10.8% 10.6% 17.0% 19.6% 16.4% Ch$ bn. • For 3Q24 ILC achieved a profit Recurring Profit Extraordinary Profit / Loss of Ch$57.8 billion, compared to Ch$35.8 billion recorded in 3Q23. +61.6% • This increase was mainly driven 12.3 18
Slide 12: 3Q-2024 Results Executive Summary
3Q - 2024 RESULTS EXECUTIVE SUMMARY PROFIT CONTRIBUTION PER DIVISION 3Q24 VS 3Q23 ILC PROFIT BREAKDOWN Ch$ bn. Ch$ bn. 3Q24 Banco Internacional 7.1 Confuturo 24.9 Pension Funds 24.6 Red Salud 4.2 Consalud (6.6) Vida Cámara 0.5 Vivir Seguros 6.6 ILC Standalone & Others (3.9) Total 57.8 bn. ILC 3Q23 P
Slide 13: Zoom-in by Division
Chapter Zoom-in by 03 Division NOV. /2024 13
Slide 14: Banking
NOV. /2024 Banking @ Banco . internacional iKC
Slide 15: Outpacing the Industry with Room to Grow
OUTPACING THE INDUSTRY WITH ROOM TO GROW BANCO INTERNACIONAL LOAN MIX(1)(2) SEPTEMBER 2024 VS SEPTEMBER 2023(1) US$ bn. Banco Internacional Industry Commercial Consumer Mortgages Market Share Total Loans New Stage Commercial Loans + 11.3% VS - 1.7% 3.9 1. 3.5 3,0% Large Companies and 2,7% 7,9% 2.4 2
Slide 16: 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 of checking N° of Customers accounts and Time Deposits • Alliance with Tenpo Consumer +96.3% Loans 31,199 • Digital cross-selling 29,26530,412 • Clients and non-
Slide 17: Lower Net Interest Income, Partially Offset by Higher Adjustment Margin
LOWER NET INTEREST INCOME, PARTIALLY OFFSET BY HIGHER ADJUSTMENT MARGIN NET INTEREST AND TREASURY RESULT GROSS OPERATING RESULT ADJUSTMENT MARGIN Ch$ bn. Ch$ bn. Ch$ bn. -38.2% -20.0% -16.4% 48.8 • The lower gross operating result was 32.2 +207.1% 12.5 9,8% 40.8 primarily due to a reduction in net 1
Slide 18: Lower Risk Expenses and NPL Aligning with the Industry
LOWER RISK EXPENSES AND NPL ALIGNING WITH THE INDUSTRY Ch$ bn. RISK EXPENSES 0.1 0.1 (3.5) • Risk expenses decreased by Ch$4.8 bn (QoQ) (9.9) (2.6) (6.0) due to lower provisions for commercial loans and (1.0) (10.8) recovery of written-off loans 3Q23 3Q24 Commercial Consumer Mortgage NPLs (% TOTAL L
Slide 19: Quarterly Profit Decreased Mainly Due to Lower Net Interest and Treasury Income
QUARTERLY PROFIT DECREASED MAINLY DUE TO LOWER NET INTEREST AND TREASURY INCOME BANCO INTERNACIONAL PROFIT & ROAE Ch$ bn. Profit ROAE 18.2% • Banco Internacional's profit 15.8% 15.9% decreased by Ch$0.8 billion, primarily 13.0% 18.9% 12.7% 55.4 54.7 due to lower net interest and 14.9% 47.5 -7.1% tre
Slide 20: Annuities
NOV. /2024 Annuities confuturo iKC
Slide 21: Annuity Market Maintained High Dynamism
ANNUITY MARKET MAINTAINED HIGH DYNAMISM ANNUITY RATE VS PROGRAMED WITHDRAWAL RATE UF MM PENSION INDUSTRY Rate (%) 5% September 2024: 56.8 4% 4.41% 3% 51.0 2% September 2024: 47.2 3.43% 1% - 2018 2019 2020 2021 2022 2023 2024 35.3 23.4 20.6 Programed Withdrawal Rate Annuity Rate ANNUITY VS PROGRAMED
Slide 22: Higher Premiums Mainly Due to the D&S 2024/2025 Contract
HIGHER PREMIUMS MAINLY DUE TO THE D&S 2024/2025 CONTRACT CONFUTURO’S QUARTERLY ANNUITY CONFUTURO’S OTHER LIFE PREMIUMS INSURANCE PREMIUMS UF MM -8.3% UF MM • In 3Q24, net premium income 13.8% reached Ch$304.5 billion, 98.8% 12.5% 0.1 higher than in 3Q23. This increased 3.8 3.4 was primarily due to a
Slide 23: Higher Investment Returns Along with Fixed Income Impairments Releases
HIGHER INVESTMENT RETURNS ALONG WITH FIXED INCOME IMPAIRMENTS RELEASES CONFUTURO INVESTMENT RESULT Excluding CUI +17.6% +21.5% Ch$ bn. • Investment result grew by 21.5% 0.2 5.0 107.0 2.2 0.5 3.3 QoQ (excluding CUI), reaching 10.6 88.0 Ch$107.0 billion. This increase (2.7) was primarily driven by imp
Slide 24: Results Mainly Attributed to Higher Premium Income and Better Investment Performance
RESULTS MAINLY ATTRIBUTED TO HIGHER PREMIUM INCOME AND BETTER PERFORMANCE OF INVESTMENT PORTFOLIO CONFUTURO PROFIT & ROAE NON-OPERATING PROFIT(1) Ch$ Exchange rate result Ch$ mm. bn. Inflation indexed unit result (0.7) (1.1) (1.1) 26.7% 26.0% (5.0) 3Q23 3Q24 133.1 15.2% 122.7 12.1% 12.4% +142.4% 95.
Slide 25: Pensions
NOV. /2024 " orn SBE Pensions B® HABITAT Seguridad y Confianza iKC
Slide 26: Improved Operating Result, Along with Higher Returns on Legal Reserves
IMPROVED OPERATING RESULT, ALONG WITH HIGHER RETURNS ON LEGAL RESERVES REVENUES TAXABLE INCOME PER 2nd CONTRIBUTORS 3rd CONTRIBUTOR Th. of people Ch$ bn. Ch$ Th. +4.8% +8.2% -3.6% 59.5 62.3 979 943 1,360.5 1,472.1 • The average taxable income of AFP Habitat Chile contributors was 20.6% higher than t
Slide 27: Better Results Mainly Explained by Higher Returns on Legal Reserves
BETTER RESULTS MAINLY EXPLAINED BY HIGHER RETURNS ON LEGAL RESERVES AFP HABITAT PROFIT EVOLUTION Ch$ bn. • The result was primarily driven by higher fees and returns on legal reserves 167.1 +107.5% due to the better 135.1 128.7 129.9 131.6 108.8 performance of financial 90.9 markets 52.6 25.4 2018 2
Slide 28: Health
NOV. /2024 QD VIDACAMARA iKC
Slide 29: More Complex Mix with Increased Activity in Dental Services Drove Higher Revenues
MORE COMPLEX MIX WITH INCREASED ACTIVITY IN DENTAL SERVICES DROVE HIGHER REVENUES REDSALUD OUTPATIENT AND DENTAL ACTIVITY INDICATORS REVENUES BY CENTER TYPE OUTPATIENT AND DENTAL MEDICAL EXAMS DENTAL CENTERS CONSULTATION CONSULTATIONS MM. MM Th. Ch$ bn. +3.2% +2.1% 6.8% +13.8% 1.4 94.7 59.9 61.8 1.3
Slide 30: EBITDA Grew Mainly Due to a More Complex Inpatient Mix and Higher Efficiency
EBITDA GREW MAINLY DUE TO A MORE COMPLEX INPATIENT MIX AND HIGHER EFFICIENCY REDSALUD’S EBITDA BREAKDOWN Ch$ bn. • EBITDA growth was primarily driven by better mix in the inpatient sector and EBITDA 3Q23 Outpatient and Hospitals of Regional Hospitals Others EBITDA 3Q24 RedSalud Dental Centers Metrop
Slide 31: Reducing Regulatory Risk by Diversifying Sources of Income
REDUCING REGULATORY RISK BY DIVERSIFYING SOURCES OF INCOME REDSALUD’S REVENUE BREAKDOWN BY INSURER % Isapre Fonasa Out of pocket and others 20% 15% 19% 13% 15% 25% 23% • Public insurer Fonasa is 28% 37% 45% 27% 36% 41% 51% gaining increased relevance in the revenue breakdown, reaching 51% share for
Slide 32: EBITDA Showed a Sustained High Level, Accompanied by a Better Mix in the Inpatient Segment
EBITDA SHOWED A SUSTAINED HIGH LEVEL, ACCOMPANIED BY A BETTER MIX IN THE INPATIENT SEGMENT Ch$ bn. REDSALUD’S EBITDA AND EBITDA MARGIN EBITDA EBITDA Margin +242 bps • RedSalud continues to 13.3% experience strong demand for 12.2% 12.3% inpatient and outpatient 11.2% 10.8% 11.2% 10.6% services. Durin
Slide 33: Lower Revenues Due to the Adjustment in the GES Premium
LOWER REVENUES DUE TO THE ADJUSTMENT IN THE GES PREMIUM ALONG TO THE DECLINE IN BENEFICIARIES CONSALUD REVENUES Ch$ bn. • As of September 2024, the Consalud Revenues Average Revenues per Beneficiary (Ch$ MM) 755.0 number of Consalud 703.7 650.3 beneficiaries declined by 7,0%, in 589.9 608.5 541.3 -1
Slide 34: Lower Inpatient Costs Driven by a Drop in the Number of Beneficiaries
LOWER IMPATIENT COSTS DRIVEN BY A DROP IN THE NUMBER OF BENEFICIARIES CONSALUD'S COST BREAKDOWN Ch$ bn. • Cost decreased by 4.0% QoQ $167.2 $161.8 mainly due to a 11.8% reduction -4.0% $155.3 in total inpatient costs, partially 33% 25% +1.0% 28% offset by higher medical leave 32% costs 33% -6.0% 32%
Slide 35: Higher Result in Health Insurance Driven by Growth in Beneficiaries and Investment Result
HIGHER RESULT IN HEALTH INSURANCE DRIVEN BY GROWTH IN BENEFICIARIES AND INVESTMENT RESULT VIDA CÁMARA LOSS RATIO 9%1% Outpatient 86.5% 89.3% 84.9% 87.3% 87.0% 89.9% Inpatient 81.5% 80.7% 21% 68.1% 48% 3Q24 Medicines Dental 21% Other 2018 2019 2020 2021 2022 2023 9M2024 3Q23 3Q24 VIDA CÁMARA BENEFICI
Slide 36: Financial Position
Chapter Financial Position 04 NOV. /2024 36
Slide 37: Well-Managed Debt Maturity and Liquidity Position
WELL-MANAGED DEBT MATURITY AND LIQUIDITY POSITION ILC (STANDALONE) AMORTIZATION SCHEDULE LIQUIDITY POSITION (SEPT-2024) Ch$ 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 2035 2026 2038 2031 2041 20
Slide 38: Outperforming IPSA YTD
OUTPERFORMING IPSA YTD ILC STOCK PRICE VS IPSA INDEX ILC IPSA 7,500 • Stock return: +19.9% • Dividends: +7.1% 6,491 6,330 6,198 • Index return: 7.9% Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 NOV. /2024 Closing Price: Sept 30th, 2024 Source: Bolsa de Comercio de Santiago 3
Slide 39: Wrap-up and Conclusions
Chapter Wrap-up and 05 Conclusions NOV. /2024 39
Slide 40: Wrap-Up and Conclusions
WRAP-UP AND CONCLUSIONS o Growth of the commercial and consumer loan portfolio o Decreased risk expenses and lower NPL ratio o Reduced gross operating result mainly due lower rate hedging and treasury result o Annuity market maintained the dynamism experienced during 2023 o Higher investment result
Slide 41: Q&A 3Q-2024
NOV. /2024NOV. /2024 Q&A 3Q - 2024 41
Slide 42: ILC Investor Day 2024
INVESTOR DAY 2024 ILC Santiago, Chile Building Social and Economic Value: Ritz Carlton Hotel – El Alcalde 15, Las Condes Financial Growth and Demographic Trends DEC 10 | 9 AM to 1 PM (Santiago Time) Pablo González – CEO Registration begins at 8:30 AM Confuturo Maximizing Spread: A Dual Focus on an E
Inversiones La Construcción S.A. (ILC) — Q3 2024 Earnings Presentation on 6ix