Quinenco S.A. · BCS:QUINENCO
Quinenco — Investor Presentation (August 2014)
49 slides from Quinenco's investor presentation, August 2014
Slide 1: Company Presentation / August 2014
Company Presentation / August 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$ 3.6(1) billion (1) Market Capitalization as of August 18, 2014 3
Slide 4: Quiñenco
Quiñenco • Quiñenco is one of Chile’s largest business conglomerates with US$59 billion in assets under management • Companies managed by Quiñenco generated sales revenue of US$13 billion in 2013 • The Quiñenco group of companies employ around 34,000 people in Chile and abroad 4
Slide 5: Quiñenco: Main Operating Companies
Quiñenco: Main Operating Companies % Control as of March 2014 51.3% 60.0% 28.0%(2) 65.9% 46.0% (3) 42.4% 100% Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): US$ 870 mln(4) US$ 11.7 bln US$ 4.1 bln US$ 1.9 bln US$ 39 mln US$ 0.8 bln US$ 0.8 bln • 1st bank in Chile • No.1 Chil
Slide 6: First Class Board and Management
First Class Board and Management Board of Directors(1) 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 (1) As of May 2014,
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 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$1.8 billion in profits over the last 16 years from divestments of US$4.4 billion 1,847 994 773(1) 63 40 Telecom Retail Real estate/Hotels Beverage & Food Utility Financial Services Total
Slide 13: Strong Growth in NAV + Book value
Strong Growth in NAV Over the past 11 years, the net value of Quiñenco’s assets has multiplied by almost 10 times, growing at an average compound annual rate of 23% Quiñenco - NAV (MUS$) CAGR(2) (1) 2002 – 2013 6.858 (1) 6.541 Quiñenco’s (1) NAV 23.0% 5.789 5.977 (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$ 5.5 billion as of March 31, 2014) (US$
Slide 16: NAV & Share Price Trend
NAV & Share Price Trend NAV/Share Price Trend as of March 31, 2014 3.000 2.509 2.500 2.363 2.339 2.064 1.981 2.000 1.500 1.610 1.399 1.325 1.000 1.275 1.190 500 0 Mar‐ 13 Jun‐ 13 Sep‐ 13 Dec‐ 13 Mar‐ 14 NAV per share (CH$) Share price (CH$) Note: Market information and book values as of March 31, 20
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$) Transport Financial Services 26% 22% 24.3 236.6 238.0 CCU Port & Shipping SM SAAM
Slide 18: Diversified Revenues and Results (1Q 2014)
Diversified Revenues and Results (1Q 2014) Quiñenco has achieved diversified revenues and results, thus generating stable cash flows Aggregate Revenues by Sector (1) Net Income (2) (YTD March 2014) (YTD March 2014, MUS$) Transport 23% Financial Services 22% 66.4 56.7 Port & Shipping CCU Serv. 22 4%
Slide 19: Stable Dividend Cashflow
Stable Dividend Cashflow Good operating company performance allows a strong dividend flow to the parent company YTD March 2014 Dividends Composition of Dividends (MUS$) (YTD March 2012) CCU 3% Banchile Vida 3% 420 276 142 91 86 2010 2011 2012 2013 Mar‐14 SM SAAM Banchile Seguros de Vida CSAV Entel T
Slide 20: Quiñenco – Strong Fundamentals
Quiñenco – Strong Fundamentals Dominant position Quiñenco’s companies are leaders in their respective markets. in its markets Proven track record in value Holding has proven track record in value creation as evidenced by sale of creation investments for approximately US$ 4.4 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 and increases Board
Quiñenco raises funds through debt and equity and increases number of Board members Bond Issuance • During July 2013 and 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 the local market. Capital Increase • In
Slide 23: Recent Events: Operating Companies (Banking)
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 39.2%. • Diversification of its financing structure through the issuance of approximately US$78
Slide 24: Recent Events: Operating Companies (CCU)
Recent Events Operating Companies NAV Company Recent Events (% of Total) • On June 18, 2013, CCU’s Board of Directors approved a capital increase of Ch$340 billion (approximately US$695 million) to finance its organic and non‐organic growth. • IRSA, controlling entity of CCU, subscribed one third of
Slide 25: Recent Events: Operating Companies (SM SAAM)
Recent Events Operating Companies NAV Company Recent Events (% of Total) • On September 11, 2013, SM SAAM announced that its subsidiary SAAM signed an association agreement with Boskalis Holding B.V., holding of the tug boat company SMIT, the second player worldwide in said industry. The agreement c
Slide 26: Recent Events: Operating Companies (Invexans)
Recent Events Operating Companies NAV Company Recent Events (% of Total) • Invexans increased its stake in Nexans to 26.6%, following the French company’s capital increase during October, 2013. It has further increased to 28.0% as of March 2014. • Nexans raised approximately €284 million in its righ
Slide 27: Financial Overview
Quiñenco Recent Events Financial Overview Main Operating Conclusions Overview Companies 27
Slide 28: Sound Results
Sound Results Quiñenco has reported increasing revenues and strong bottom line results Revenues(1) Net Income(2) (MUS$) (MUS$) 529 5,935 4,727 3,913 253 226 2,290 1,725 160 1,259 76 66 2010 2011 2012 2013 Mar‐13 Mar‐14 2010 2011 2012 2013 Mar‐13 Mar‐14 Quiñenco started reporting in accordance with I
Slide 29: Quiñenco Holding: Conservative Financial Structure
Quiñenco Holding: Conservative Financial Structure Long term investments are financed with equity and long term debt in Chilean pesos Assets Liabilities and Equity US$ 5.5 billion as of March 2014 US$ 5.5 billion as of March 2014 Other 1% ST Debt Cash Other Liabilities 2% 24% 2% LT Debt 12% LT Asset
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$ 400 222 69 ‐410 ‐992 2010 2011 2012 2013 Mar‐14 MUS$ 2010 2011 2012 2013 Mar 2014 Debt 310 691(1) 807 976 997 Cash ‐1,302 ‐291 ‐585 ‐907 ‐1,408 Net Debt ‐992 400(1
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 • In 2013 the bank’s net operating revenues grew 10.1%, based on higher loans to customers and ROAE a higher balance of demand deposits and current accounts, mitigated by higher loan provisions. In 1Q 2014 revenues grew 20.4% 27.0% 26.3% • Net income in 2013 was MUS$932, 9.8% above 24
Slide 34: CCU
CCU • Founded in 1850, CCU is the largest brewery and • Traded on NYSE and Santiago Stock Exchanges. beverage producer in Chile, and the second • Affiliate Foods participates in sweet snack brewery in Argentina. business. • Assets of US$3.3 billion. • Entered purified water segment through joint • O
Slide 35: CCU
CCU • Sales grew by 11.3% in 2013 to MUS$2,172, reflecting growth in all segments. In 1Q 2014 this EBITDA by Business Segment March 2014 positive trend continued. • EBITDA was MUS$458 in 2013 increasing by 7.0% Other from 2012, boosted by the non‐alcoholic Wine 8% beverage segment, followed by Beer
Slide 36: Invexans
Invexans • Invexans’ main asset is its 28% stake in Nexans, a • Invexans now has three directors on the Board, a leading cable manufacturer with worldwide member of the Compensations and Designations presence, based in France. Committee, and a member of the Strategic • An agreement signed in Septemb
Slide 37: Nexans
Nexans • Nexans is a worldwide leader in the cable industry with presence in 40 countries and commercial activities worldwide, after over a century of progress. • Headquartered in Paris, France, Nexans produces cables and cabling systems at more than 90 production sites across 5 continents. • 26,000
Slide 38: Invexans
Invexans • In 2013 Invexans’ net income mainly reflects its proportional share in Nexans’ losses for the year. Sales Madeco (MUS$) • Nexans does not report financial statements for the first (historical) quarter, therefore Invexans’ income statement mainly 418 437 423 reflects changes in the share h
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 has a
Slide 40: Techpack
Techpack • Techpack’s operating income in 2013 includes negative Sales goodwill of MUS$30 related to Peruplast, and the contribution from flexible packaging. (MUS$) • Techpack’s net income in 2013 was MUS$2, boosted by the negative goodwill mentioned above, and mostly 416 offset by financial costs,
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 in 2013 reached MUS$3,350, mainly corresponding to fuels, boosted by the acquisition Sales of Terpel Chile in June 2013. 1Q 2014 sales also (MUS$) reflect this acquisition. • Operating income more than tripled to MUS$45 in 3,350 2013, mainly reflecting the favorable effect of the additi
Slide 43: CSAV
CSAV • CSAV, founded in 1872, is one of the oldest shipping • CSAV would be the main shareholder and through companies in the world. a shareholders’ agreement would control around • Its activities include overseas transport of 75%. The merged HL would be the fourth largest containerized cargo, liqui
Slide 44: CSAV
CSAV • In 2013 CSAV’s sales reached MUS$3,206 6.6% Sales below 2012, mainly as a result of lower freight rates (MUS$) and to a lesser extent a lower sales volume. The drop in 1Q 2014 is due to lower rates. • Net income in 2013 was a loss of MUS$169, 5,215 4,796 improving 46.1% over 2012, mainly refl
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 in 2013 reached Sales MUS$479, up 6.9% over the last quarter, reflecting (MUS$) improved performance in tug boats and ports. Sale in 1Q 2014 were affected by the port strike in Chile. • SM SAAM obtained net income of MUS$74 in 2013, 479 448 23.6% higher than th
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