Quinenco S.a. · BCS:QUINENCO
Quinenco — Investor Presentation (December 2014)
49 slides from Quinenco's investor presentation, December 2014
Slide 1: Company Presentation / December 2014
Company Presentation / December 2014 1
Slide 2: Quiñenco Overview
Recent Events Financial Main Operating Conclusions Quiñenco Overview Overview Companies 2
Slide 3: Ownership Structure
Ownership Structure Minority Shareholders (Chilean Stock Exchanges) 81% 19% Mining Industrial / Financial Services Market Capitalization US$ 3.5(1) billion (1) Market Capitalization as of December 4, 2014 3
Slide 4: Quiñenco
Quiñenco • Quiñenco is one of Chile’s largest business conglomerates with US$66 billion in assets under management • Companies managed by Quiñenco generated sales revenue of US$22 billion in 2013 • The Quiñenco group of companies employ around 60,000 people in Chile and abroad 4
Slide 5: Quiñenco: Main Operating Companies
Quiñenco: Main Operating Companies % Control as of September 2014 51.3% 60.0% 29.0%(2) 65.9% 54.5% 42.4% 100% Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): US$ 828 mln(3) US$ 11.2 bln US$ 3.6 bln US$ 1.4 bln US$ 178 mln US$ 0.7 bln US$ 0.8 bln • 1st bank in Chile • No.1 Chi
Slide 6: First Class Board and Management
First Class Board and Management Board of Directors(1) 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
Slide 7: Over 50 Years of History
Over 50 Years of History 1957 ‐ 1999 1999 ‐ 2010 2011 ‐ 2013 1957 Sociedad Forestal Quiñenco S.A is 1999 Quiñenco sells its stake in VTR 2011 Quiñenco acquires a 20.6% stake in created. Hipercable. It then buys a 14.3% shipping company CSAV. In early stake in Entel S.A. 2012 this stake reached 37.4%
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 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 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$1.7 billion in profits over the last 16 years from divestments of US$4.1 billion 1,699 915 (1) 711 57 37 Telecom Retail Real estate/Hotels Beverage & Food Utility Financial Services Total
Slide 13: Strong Growth in NAV
Strong Growth in NAV Over the past 11 years, the net value of Quiñenco’s assets has multiplied by almost 10 times, growing at an average compound annual rate of 23% Quiñenco - NAV (MUS$) CAGR(2) (1) 2002 – 2013 6.858 (1) 6.541 Quiñenco’s (1) NAV 23.0% 5.789 5.597 (1) IPSA 12.6% 5.137 3.071 3.275 2.7
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 22% Beer Chile 1 78% 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$ 5.2 billion as of September 30, 2014) (
Slide 16: NAV & Share Price Trend
NAV & Share Price Trend NAV/Share Price Trend as of September 30, 2014 2.500 2.339 2.064 1.999 2.017 1.981 2.000 1.500 1.275 1.325 1.295 1.000 1.190 1.145 500 0 Sep‐ 13 Dec‐ 13 Mar‐ 14 Jun‐ 14 Sep‐ 14 NAV per share (CH$) Share price (CH$) Note: Market information and book values as of September 30,
Slide 17: Diversified Revenues and Results (2013)
Diversified Revenues and Results (2013) Quiñenco has achieved diversified revenues and results, thus generating stable cash flows Aggregate Revenues by Sector (1) Net Income (2) (Full year 2013) (Full year 2013, MUS$) Transport Financial Services 15% 13% Port & Shipping Serv. Beverage & Food 2% 11%
Slide 18: Diversified Revenues and Results (YTD September 2014)
Diversified Revenues and Results (YTD September 2014) Quiñenco has achieved diversified revenues and results, thus generating stable cash flows Aggregate Revenues by Sector (1) Net Income (2) (YTD September 2014) (YTD September 2014, MUS$) Port & Shipping Serv. 2% Financial Services Transport 13% 14
Slide 19: Stable Dividend Cashflow
Stable Dividend Cashflow Good operating company performance allows a strong dividend flow to the parent company YTD September 2014 Dividends Composition of Dividends (MUS$) (YTD March 2012) SM SAAM CCU 3% 6% Banchile Vida Banco de 503 2% Chile 17% 254 131 79 84 2010 2011 2012 2013 Sep‐14 SM SAAM Ban
Slide 20: Quiñenco – Strong Fundamentals
Quiñenco – Strong Fundamentals Dominant position Quiñenco’s companies are leaders in their respective markets. in its markets Proven track record in value Holding has proven track record in value creation as evidenced by sale of creation investments for approximately US$ 4.1 bln and gains on sale of
Slide 21: Recent Events
Quiñenco Recent Events Financial Main Operating Conclusions Overview Overview Companies 21
Slide 22: Quiñenco raises funds through debt and equity, Board increase, Tender Offer
Quiñenco raises funds through debt and equity, increases number of Board members, and announces Tender Offer for Invexans Bond Issuance • In July 2013 and July 2014 Quiñenco successfully placed UF 4,000,000 (approx. US$180 million) and UF 2,375,000 (approx. US$100 million) respectively, in bonds in
Slide 23: Recent Events Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • Leadership in net income and profitability in the Chilean financial system. • High levels of efficiency with cost‐income ratio of 41%. • Diversification of its financing structure through the issuance of approximately US$785
Slide 24: Recent Events Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • On May 7, 2014, CCU announced its incursion in Bolivia, through the acquisition of a 35% stake of Bebidas Bolivianas (BBO). CCU could push this up to 51%. BBO produces and commercializes alcoholic and non alcoholic beverages.
Slide 25: Recent Events Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • In January 2014 a port strike in Chile resulted in the payment of a bonus of US$5.1 million on behalf of SM SAAM to the port workers, along with a lower level of activity. • On July 2, 2014, SM SAAM announced the execution of
Slide 26: Recent Events Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • Invexans increased its stake in Nexans to 28.98%, • Invexans completed a capital increase of US$270 million , in order to increase its stake in Nexans and reduce the company’s liabilities, including a long term debt of US$30
Slide 27: Financial Overview
Quiñenco Recent Events Financial Overview Main Operating Conclusions Overview Companies 27
Slide 28: Sound Results
Sound Results Quiñenco has reported increasing revenues and strong bottom line results Revenues(1) Net Income(2) (MUS$) (MUS$) 5,460 4,959 487 4,348 3,877 3,599 233 2,106 208 205 173 147 2010 2011 2012 2013 Sep‐13 Sep‐14 2010 2011 2012 2013 Sep‐13 Sep‐14 Note: Figures translated from nominal Chilean
Slide 29: Quiñenco Holding: Conservative Financial Structure
Quiñenco Holding: Conservative Financial Structure Long term investments are financed with equity and long term debt in Chilean pesos Assets Liabilities and Equity US$ 5.3 billion as of September 2014 US$ 5.3 billion as of September 2014 Other Cash 1% ST Debt 16% Other Liabilities 1% 2% LT Debt 13%
Slide 30: 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$ 368 204 63 99 ‐912 2010 2011 2012 2013 Sep‐14 MUS$ 2010 2011 2012 2013 Sep 2014 Debt 286 635(1) 742 898 966 Cash ‐1,198 ‐267 ‐538 ‐835 ‐867 Net Debt ‐912 368(1) 20
Slide 31: Main Operating Companies
Quiñenco Recent Events Financial Main Operating Companies Conclusions Overview Overview 31
Slide 32: 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 33: Banco de Chile
Banco de Chile • YTD September 2014 the Bank’s net operating revenues grew 13.5%, based on higher loans to ROAE customers and a favorable effect of inflation on the bank’s net asset position in Ufs, mitigated by higher loan provisions. 27.0% • Net income YTD September 2014 was 24.7% 25.3% 23.2% 22.5
Slide 34: CCU
CCU • Traded on NYSE and Santiago Stock Exchanges. • Founded in 1850, CCU is the largest brewery and • Affiliate Foods participates in sweet snack business. beverage producer in Chile, and the second • Entered purified water segment through joint brewery in Argentina. venture with Nestlé S.A. • Asse
Slide 35: CCU
CCU • Sales grew by 9.5% YTD Sept 2014 to MUS$1,506, reflecting growth in all segments. EBITDA by Business Segment (September 2014) • EBITDA was MUS$281 YTD Sept 2014 increasing by 3.9% from Sept 2013, boosted by Río de la Plata and Other Wine 4% Wine segments 15% • Net income YTD Sept 2014 reached
Slide 36: Invexans
Invexans • Invexans’ main asset is its 28,98% stake in Nexans, • Invexans now has three directors on the Board, a a leading cable manufacturer with worldwide member of the Compensations and Designations presence, based in France. Committee, and a member of the Strategic • An agreement signed in Sept
Slide 37: Nexans
Nexans • Nexans is a worldwide leader in the cable industry with presence in 40 countries and commercial activities worldwide, after over a century of progress. • Headquartered in Paris, France, Nexans produces cables and cabling systems at more than 90 production sites across 5 continents. • 26,000
Slide 38: Invexans
Invexans • YTD Sept 2014 Invexans’ net income mainly Sales reflects its proportional share in Nexans’ net (MUS$) income as of June 2014, partially offset by a Madeco (historical) US$7.6 million loss related to the payment of legal contingencies in Brazil under an 418 437 423 amnesty program. 1 0 1 2
Slide 39: Techpack (ex-Madeco)
Techpack (ex‐Madeco) • Techpack is a regional leader in flexible packaging, • In June 2014 Techpack announced the acquisition with presence in Chile, Argentina, Peru and of the Chilean flexible packaging company HYC Colombia. Packaging, in US$34.3 million. • Over 2,600 employees. • The company recen
Slide 40: Techpack
Techpack • Techpack’s operating income YTD Sept 2014 is Sales lower than the previous period mostly due to negative goodwill of MUS$30 related to Peruplast. (MUS$) However, during 2014 the consolidation of HYC Packaging in Chile and growth in Colombia are 416 noteworthy. • Techpack’s net income YTD
Slide 41: Enex
Enex • Enex S.A. has a network of 450 service stations, Market Share of Liquid Fuel Sales with 121 convenience stores. (December 2013) • Main business activities: Others 7% ‐ Distribution of fuels through its service Petrobras stations. 13% ‐ Distribution of fuels to industrial clients and transport
Slide 42: Enex
Enex • Sales YTD Sept 2014 reached MUS$2,732, mainly corresponding to fuels, boosted by the Sales acquisition of Terpel Chile in June 2013. (MUS$) • Operating income grew 69% to MUS$52 as of Sept 2014, mainly reflecting the favorable effect of the addition of Terpel Chile’s operations. 2,933 2,732 •
Slide 43: CSAV
CSAV • CSAV, founded in 1872, is one of the oldest shipping • CSAV would be the main shareholder and through a companies in the world. shareholders’ agreement would control around 75%. • Its activities include overseas transport of • In April 2014 CSAV and HL signed a binding MOU, containerized carg
Slide 44: CSAV
CSAV • YTD Sept 2014 CSAV’s sales reached MUS$2,202, Sales 10.8% below Sept 2013, mainly as a result of lower (MUS$) freight rates which offset volume growth of 4%. • Net income YTD Sept 2014 was a loss of MUS$160, increasing 47.6% over Sept 2013, mainly reflecting 5,215 the effect of lower freight
Slide 45: 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 S
Slide 46: SM SAAM
SM SAAM • SM SAAM’s consolidated sales as of Sept 2014 Sales reached MUS$371, up 3.7% over Sept 2013, (MUS$) reflecting improved performance in port terminals and tug boats, which compensated lower revenues from logistics. 479 448 • SM SAAM obtained net income of MUS$37 as of 358 371 Sept 2014, 36.7
Slide 47: Conclusions
Quiñenco Recent Events Financial Main Operating Conclusions Overview Overview Companies 47
Slide 48: 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 49: Thank you for your attention
Thank you for your attention be. 44 QUINENCO S.A. 49