Quinenco S.A. · BCS:QUINENCO
Quinenco — Investor Presentation (May 2014)
46 slides from Quinenco's investor presentation, May 2014
Slide 1: Company Presentation / May 2014
Company Presentation / May 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$ 3.7(1) billion (1) Market Capitalization as of April 30, 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$13 billion in 2013 • The Quiñenco group of companies employ around 34,000 people in Chile and abroad 4
Slide 5: Quiñenco: Main Operating Companies
Quiñenco: Main Operating Companies % Control as of December 2013 58.5% (2) 60.0% 26.6%(3) 65.9% 46.0% 42.4% 100% Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): US$ 891 mln(4) US$ 12.0 bln US$ 4.4 bln US$ 2.4 bln US$ 32 mln US$ 0.7 bln US$ 0.8 bln • 1st bank in Chile • No.1 C
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 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 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$1.9 billion in profits over the last 16 years from divestments of US$4.5 billion 1,945 1,048 813(1) 66 42 Telecom Retail Real estate/Hotels Beverage & Food Utility Financial Services Tota
Slide 13: Strong Growth in NAV
Strong Growth in NAV Over the past 11 years, the net value of Quiñenco’s assets has multiplied by almost 10 times, growing at an average compound annual rate of 23.0% Quiñenco - NAV (MUS$) CAGR(2) (1) 2002 – 2013 6.858 (1) 6.541 Quiñenco’s NAV 23.0% 5.789 (1) IPSA 12.6% 5.137 3.071 3.275 2.721 1.989
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 18% Financial Services Deposits 1 17% 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 December 31, 2013) (U
Slide 16: NAV & Share Price Trend
NAV & Share Price Trend NAV/Share Price Trend as of December 31, 2013 3.000 2.448 2.509 2.500 2.363 2.339 2.064 2.000 1.500 1.540 1.610 1.399 1.325 1.000 1.275 500 0 Dec- 12 Mar- 13 Jun- 13 Sep- 13 Dec- 13 NAV per share (CH$) Share price (CH$) Note: Market information and book values as of December
Slide 17: Diversified Revenues and Results
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$) Transport Financial Services 26% 22% 24.3 236.6 238.0 CCU Port & Shipping SM SAAM
Slide 18: Stable Dividend Cashflow
Stable Dividend Cashflow Good operating company performance allows a strong dividend flow to the parent company YTD December 2013 Dividends Composition SM Madeco of Dividends 4% SAAM (MUS$) 10% (YTD March 2012) CCU Banco 30% 290 de Chile 13% 205 149 Banchile Vida 43% 91 96 Average 2009-2013 2009 201
Slide 19: 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$ 4.5 bln and gains on sale of
Slide 20: Recent Events
Quiñenco Recent Events Financial Main Operating Conclusions Overview Overview Companies 20
Slide 21: Quiñenco raises funds through debt and equity
Quiñenco raises funds through debt and equity Bond Issuance • During July 2013 Quiñenco successfully placed UF 4,000,000 (approximately US$180 million) in bonds in the local market. Capital Increase • In November 2013 Quiñenco successfully concluded its capital increase, raising Ch$350 billion (appr
Slide 22: 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. • Lowest ratio of cost-income of 42.8% among its peers. • Diversification of its financing structure through the issuance of approximately US$785 mil
Slide 23: Recent Events: Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • On September 11, 2013, SM SAAM announced that its subsidiary SAAM signed an association agreement with Boskalis Holding B.V., holding of the tug boat company SMIT, the second player worldwide in said industry. The agreement c
Slide 24: Recent Events: Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • Invexans increased its stake in Nexans to 26.6%, following the French company’s capital increase during October, 2013. It has further increased to 28.0% as of March 2014. • Nexans raised approximately €284 million in its righ
Slide 25: Financial Overview
Quiñenco Recent Events Financial Overview Main Operating Conclusions Overview Companies 25
Slide 26: Sound Results
Sound Results Quiñenco has reported increasing revenues and strong bottom line results Revenues(1) Net Income(2) (MUS$) (MUS$) 6,236 556 4,967 4,111 296 266 238 2,406 2,015 168 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Quiñenco started reporting in accordance with IFRS in 2009 Note: Figures
Slide 27: Quiñenco Holding: Conservative Financial Structure
Quiñenco Holding: Conservative Financial Structure Long term investments are financed with equity and long term debt in Chilean pesos Assets Liabilities and Equity US$ 5.5 billion as of December 2013 US$ 5.5 billion as of December 2013 Other Cash 1% ST Debt 17% Other Liabilities 2% 2% LT Debt 13% LT
Slide 28: 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$ 420 233 121 72 -1,042 2009 2010 2011 2012 2013 MUS$ 2009 2010 2011 2012 2013 Debt 318 326 726(1) 847 1,026 Cash -197 -1,368 -305 -615 -953 Net Debt 121 -1,042 420(
Slide 29: Main Operating Companies
Quiñenco Recent Events Financial Main Operating Companies Conclusions Overview Overview 29
Slide 30: 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 31: 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. 27.0% • Net income in 2013 was MUS$979, 9.8% above 22.7% 24.7% 23.2% 22.5% 2012 results, t
Slide 32: 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$3.3 billion. venture with Nestlé S.A. • Over 6,800 employees. •
Slide 33: CCU
CCU • Sales grew by 11.3% in 2013 to MUS$2,282, reflecting growth in all segments EBITDA by Business Segment December 2013 • EBITDA was MUS$481 in 2013 increasing by 7.0% Spirits Other from 2012, boosted by the non-alcoholic Wine 3% 4% beverage segment, followed by Beer Chile, Río de 8% la Plata and
Slide 34: 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 industry significance of investment in Nexans, so as to worl
Slide 35: 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 36: Madeco
Madeco • Madeco is a regional leader in flexible packaging, with presence in Chile, Argentina, Peru and Colombia, and a relevant actor in profiles. • Over 2,600 employees. • In October 2103, Madeco closed its subsidiary of brass mills in Argentina (Decker). • In December 2013, Madeco announced the d
Slide 37: Invexans/Madeco
Invexans/Madeco • 2012 operating income and net income include a gain related to negative goodwill arising from the accounting Sales method of the investment in Nexans. Madeco Invexans: Madeco Invexans (newco) (historical) • In 2013 Invexans’ net income mainly reflects its 418 437 423 416 proportion
Slide 38: 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 39: Enex
Enex • Sales in 2013 reached MUS$3,350, mainly Sales corresponding to fuels, boosted by the acquisition (MUS$) of Terpel Chile in June 2013. • Operating income more than tripled to US$48 3,350 million, mainly reflecting the favorable effect of the addition of Terpel Chile’s operations. 2,555 • Net i
Slide 40: 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 41: CSAV
CSAV • In 2013 CSAV’s sales reached MUS$2,657 6.6% Sales below 2012, mainly as a result of lower freight (MUS$) rates and to a lesser extent a lower sales volume. • Net income in 2013 was a loss of MUS$169, improving 46.1% with respect to 2012, mainly 5,215 4,796 reflecting the absence in the curren
Slide 42: 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 43: SM SAAM
SM SAAM • SM SAAM’s consolidated sales in 2013 reached Sales MUS$479, up 6.9% over the last quarter, (MUS$) reflecting improved performance in tug boats SAAM SM SAAM and ports. 479 479 • SM SAAM obtained net income of MUS$74 in 426 448 448 2013, 23.6% higher than the previous period 361 based on sou
Slide 44: Conclusions
Quiñenco Recent Events Financial Main Operating Conclusions Overview Overview Companies 44
Slide 45: 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 46: Thank you for your attention
Thank you for your attention ir AI ~ 448 QUINENCO S.A. 46