Inversiones La Construccion Sa · BCS:ILC
Inversiones La Construccion Sa — Q2 2024 Earnings Presentation
45 slides from Inversiones La Construccion Sa's earnings presentation, Sep 12, 2024
Slide 1: Conference Call 2Q-2024
Conference Call 2Q - 2024 /2024SEP /2024 SEP 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 SEP /2024 3
Slide 4: Chapter: Context
Chapter Context 01 SEP /2024 4
Slide 5: 2Q-2024: Macroeconomic Context
2Q-2024: MACROECONOMIC CONTEXT IPSA S&P500 AND PENSION FUND C QUARTERLY RETURNS(1) FORMAL EMPLOYMENT RATE % % IPSA S&P 500 Fund C 73.3% 72.8% 72.5% 71.9% 71.8% 11.2% 10.2% 8.7%8.3% 6.2% 7.1% 7.3% 5.1% 3.9% 1.6% 0.8% -0.2% -2.1% -3.6% -3.5% 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1Q24 2Q24 CHILE QUAR
Slide 6: Advances in Regulatory Changes: Healthcare System
ADVANCES IN REGULATORY CHANGES HEALTHCARE SYSTEM CONTEXT SHORT LAW OF ISAPRES NEXT STEPS • Adjustment of price to the Single Factors Table • Payment plan and extraordinary premium • In Dec 2019, the Regulator (Circ. 343) established and minimum contribution of 7% contained in per beneficiary is stil
Slide 7: Advances in Regulatory Changes: Pension Reform in Colombia
ADVANCES IN REGULATORY CHANGES PENSION REFORM IN COLOMBIA • The project presented by the President of Colombia, Gustavo Petro, was approved by Congress on June 14, 2024. • It introduces a four-pillar system: solidarity, semi-contributory, contributory, and voluntary savings. • The new system integra
Slide 8: Chapter: 2024 Milestones & Consolidated Results
Chapter 2024 Milestones & 02 Consolidated Results SEP /2024 8
Slide 9: 2024 Milestones
2024 MILESTONES 1. 2. ILC REACHES AN AGREEMENT TO INCREASE ITS BANCO INTERNACIONAL COMPLETES ITS FIRST STAKE IN BANCO INTERNACIONAL TO 100% WITHIN 3 BOND ISSUANCE ON THE SWISS MARKET On July 2nd, 2024, an unsecured bond maturing on July 23rd, 2027 (a 3- YEARS. year term) with an annual coupon rate o
Slide 10: ILC Committed to the Elderly
ILC COMMITTED TO THE ELDERY RANKING MOST SENIOR-FRIENDLY COMPANY The ‘Portal de Formación' initiative offers free 1° online courses tailored for seniors, providing tools and support for their daily life 2° Encouraging senior talent in employees and driving initiatives such as ‘Piensa en Grandes' SEL
Slide 11: 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 SEP /2024 11
Slide 12: 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% 14.6% Ch$ bn. • For 2Q24 ILC achieved a profit Recurring Profit Extraordinary Profit of Ch$25.2 billion before adjustments resulting from the application of the Short Law of -53.5% 12.3 182.6 178.0 Isapres,
Slide 13: 2Q-2024 Results Executive Summary
2Q - 2024 RESULTS EXECUTIVE SUMMARY ILC PROFIT BREAKDOWN(1) PROFIT CONTRIBUTION PER DIVISION 2Q24 VS 2Q23 Ch$ bn. 2Q24 Banco Internacional 8.0 Ch$ bn. Accounting Confuturo 10.1 Liability from the Short Law AFP Habitat 7.5 (31.4) of Isapres (net AAISA 4.5 of taxes) Red Salud 6.2 Consalud (13.8) Vida
Slide 14: Chapter: Zoom-in by Division
Chapter Zoom-in by 03 Division SEP /2024 14
Slide 15: Banking
SEP 1/2024 Banking @ Banco . internacional iKC
Slide 16: Outpacing the Industry with Room to Grow
OUTPACING THE INDUSTRY WITH ROOM TO GROW BANCO INTERNACIONAL LOAN MIX(1) JUNE 2024 VS JUNE 2023(1) US$ bn. Banco Internacional Industry Commercial Consumer Mortgages Market Share Total Loans 3.8 New Stage Commercial Loans + 10.4% VS + 2.1% 3,1% 1. 3.2 7,3% Large Companies and 2,7% 2.3 2.4 2.7 2,5% 1
Slide 17: 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 +108.8% Loans 27,808 • Digital cross-selling 26,512 25,271 • Clients and
Slide 18: Improved Operating Result Due to Growth in Commercial and Consumer Loans
IMPROVED OPERATING RESULT DUE TO GROWTH IN COMMERCIAL AND CONSUMER LOANS NET INTEREST AND TREASURY RESULT GROSS OPERATING RESULT ADJUSTMENT MARGIN Ch$ bn. Ch$ bn. Ch$ bn. +54.9% +24.6% +15.7% 32.8 9.7 47.6 38.2 21,6% 28.4 6.3 78,4% 2Q23 2Q24 2Q23 2Q24 2Q23 2Q24 Autofin OPERATING EXPENSES EFFICIENCY
Slide 19: Higher Risk Expenses Partially Explained by Consolidation with Autofin
HIGHER RISK EXPENSES PARTIALLY EXPLAINED BY ITS CONSOLIDATION WITH AUTOFIN RISK EXPENSES Ch$ bn. Commercial Consumer • Risk expenses increased by Ch$1.6 bn (QoQ) due 0.7 0.1 to higher provisions for the consumer loans (3.2) (4.2) portfolio (impacted by consolidation of Autofin) (2.5) (4.1) 2Q23 2Q24
Slide 20: Sustained Growth in Profit
SUSTAINED GROWTH IN PROFIT BANCO INTERNACIONAL PROFIT & ROAE Ch$ bn. ROAE (%) Profit ROAE 20.0% • Banco Internacional's profit 18.2% 17.0% 17.0% decreased by Ch$2.2 billion, primarily 15.8% 18.9% 12.7% 13.0% due to higher operating expenses, 55.4 55.5 -15.3% 14.9% 47.5 which were partially offset by
Slide 21: Annuities
SEP 1/2024 Annuities confuturo iKC
Slide 22: Recovery of the Annuity Industry
RECOVERY OF THE ANNUITY INDUSTRY UF MM PENSION INDUSTRY ANNUITY RATE VS PROGRAMED WITHDRAWAL RATE Rate (%) 5% June 2024: 4% 4.41% 3% 2% June 2024: 3.36% 1% - 2018 2019 2020 2021 2022 2023 2024 24.3 23.1 37.6 Programed Withdrawal Rate Annuity Rate % ANNUITY VS PROGRAMED WITHDRAWAL PREFERENCE 100% Jun
Slide 23: Lower Premiums Mainly Due to End of D&S 2022/2023 Contract
LOWER PREMIUMS MAINLY DUE TO THE END OF D&S 2022/2023 CONTRACT CONFUTURO’S CONFUTURO’S OTHER LIFE UF MM ANNUITY PREMIUMS UF MM INSURANCE PREMIUMS • In 2Q24, net premium income 15.0% 15.2% reached Ch$194.5 billion, 28.1% -0.5% 0.1 lower than in 2Q23. This decline 9.8% 4.3 4.3 was primarily due to a r
Slide 24: Higher Investment Returns Attributed to Better Fixed Income Investment
HIGHER INVESTMENT RETURNS MAINLY ATTRIBUTED TO BETTER FIXED INCOME INVESTMENT CONFUTURO INVESTMENT RESULT Excluding CUI +10.8% +6.0% Ch$ bn. • Investment result grew by 10.8% 2.1 2.6 3.1 110.9 QoQ (excluding CUI), reaching 104.7 3.1 1.5 Ch$110.9 billion. This increase (3.9) (2.2) was primarily drive
Slide 25: Lower Results Mainly Attributed to Lower Non-Operating Income
LOWER RESULTS MAINLY ATTRIBUTED TO LOWER NON- OPERATING INCOME Ch$ bn. CONFUTURO PROFIT & ROAE NON-OPERATING PROFIT(1) Ch$ 4.6 26.7% bn. 2.5 26.0% 0.2 2Q23 2Q24 (6.1) Exchange rate result Inflation indexed unit result 13.6% 12.1% 12.4% 133.1 • Higher annuity premium 8.4% 122.7 income, along with imp
Slide 26: Pensions
SEP 1/2024 Seguridad y Confianza iKC
Slide 27: Improved Operating Result in Line with Higher Average Taxable Income
IMPROVED OPERATING RESULT IN LINE WITH HIGHER AVERAGE TAXABLE INCOME REVENUES TAXABLE INCOME PER 2nd CONTRIBUTORS 3rd CONTRIBUTOR Ch$ bn. Ch$ Th. Th. of people +4.9% +7.0% -4.0% 59.2 62.1 1,442.3 1,347.3 991 951 • The average taxable income of AFP Habitat Chile contributors was 21.1% 2Q23 2Q24 Jun-2
Slide 28: Stable Profit Over Time
STABLE PROFIT OVER TIME AFP HABITAT PROFIT EVOLUTION Ch$ bn. • The result was primarily driven by lower returns on legal reserves due to the performance of financial 135.1 128.7 129.9 131.6 139.9 -39.3% 108.8 markets, partially offset by 90.9 higher fees 30.9 18.7 2018 2019 2020 2021 2022 2023 June
Slide 29: Higher Revenues in AFP Habitat Peru and Colfondos
HIGHER REVENUES IN AFP HABITAT PERU AND COLFONDOS REVENUES LEGAL RESERVE RETURNS REVENUES LEGAL RESERVE RETURNS Ch$ bn. Ch$ bn. Ch$ bn. Ch$ bn. +38.5% +115.1% +38.9% +22.2% 10.6 21.3 7.6 0.7 4.3 15.3 3.5 0.3 2Q23 2Q24 2Q23 2Q24 2Q23 2Q24 2Q23 2Q24 • Revenues increase by 7.3% compared to 2Q23, primar
Slide 30: Consolidating a Regional Model
CONSOLIDATING A REGIONAL MODEL AAISA PROFIT EVOLUTION Ch$ bn. • The result was mainly explained by higher fee +17.8% revenues and returns on 34.9 31.1 legal reserves, partially 20.1 offset by higher operating 9.5 11.2 expenses 3.9 2021 2022 2023 June 2024 2Q23 2Q24 LTM SEP /2024 Source: Superintende
Slide 31: Health
SEP 1/2024 QD VIDACAMARA iKC
Slide 32: More Complex Mix with Increased Activity in Dental Services
MORE COMPLEX MIX WITH INCREASED ACTIVITY IN DENTAL SERVICES DROVE HIGHER REVENUES REDSALUD OUTPATIENT AND DENTAL ACTIVITY INDICATORS REVENUES BY CENTER TYPE MEDICAL EXAMS DENTAL OUTPATIENT AND DENTAL CONSULTATION CONSULTATIONS CENTERS Th. MM MM Ch$ bn. +4.3% -1.0% +1.4% +13.3% 59.1 61.7 1.4 1.4 2.5
Slide 33: EBITDA Grew Due to More Complex Inpatient Mix and Higher Efficiency
EBITDA GREW MAINLY DUE TO A MORE COMPLEX INPATIENT MIX AND HIGHER EFFICIENCY Ch$ bn. • EBITDA growth was primarily driven by better mix in the inpatient sector and EBITDA 2Q23 Outpatient and Hospitals of Regional Hospitals Others EBITDA 2Q24 RedSalud Dental Centers Metropolitan Region RedSalud incre
Slide 34: 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 15% 19% 13% 13% 15% 18% 20% 25% 23% • Public insurer Fonasa is 28% 37% 45% 47% gaining increased relevance in 27% 36% 41% 48% 49% the revenue breakdown, reachin
Slide 35: EBITDA Showed a Sustained High Level
EBITDA SHOWED A SUSTAINED HIGH LEVEL, ACCOMPANIED BY A BETTER MIX IN THE INPATIENT SEGMENT REDSALUD’S EBITDA AND EBITDA MARGIN Ch$ bn. +73 bps EBITDA EBITDA Margin • RedSalud continues to experience strong demand for 13.3% 13.1% 12.2% 12.4% inpatient and outpatient 11.2% 11.7% 10.6% 10.8% services.
Slide 36: Lower Revenues Due to GES Premium Adjustment and Fewer Beneficiaries
LOWER REVENUES DUE TO THE ADJUSTMENT IN THE GES PREMIUM ALONG TO THE DECLINE IN BENEFICIARIES CONSALUD REVENUES Ch$ bn. Consalud Revenues Average Revenues per Beneficiarie • As of June 2024, industry beneficiaries decreased by 7.8% 755.0 YoY., while the number of 703.7 678.6 608.5 Consalud beneficia
Slide 37: Lower Inpatient Costs Driven by Drop in Beneficiaries
LOWER IMPATIENT COSTS DRIVEN BY A DROP IN THE NUMBER OF BENEFICIARIES Ch$ bn. CONSALUD'S COST BREAKDOWN • Cost decreased by 2.3% QoQ $170.1 $169.3 mainly due to a 3.6% reduction -2.3% $165.4 in total inpatient costs, partially 32% 26% +0.2% 26% offset by higher outpatient and medical leave costs 31%
Slide 38: Loss Due to Accounting Liability Under IFRS
LOSS DUE TO ACCOUNTING LIABILITY UNDER IFRS STANDARDS. LOWER GES PREMIUM, PARTIALLY OFFSET BY LOWER INPATIENT COVERAGE COSTS. • The accounting of the liability CONSALUD’S PROFIT (LOSS) EVOLUTION associated with the refund, under IFRS accounting standards, amounted to Ch$31.4 billion (net of 31.0 def
Slide 39: Higher Result in Health Insurance Driven by Growth in Beneficiaries
HIGHER RESULT IN HEALTH INSURANCE DRIVEN BY GROWTH IN BENEFICIARIES VIDA CÁMARA LOSS RATIO 9% 1% Outpatient 86.5% 89.3% 84.9% 87.3% Inpatient 81.5% 76.2% 81.3% 74.1% 68.1% 22% 2Q24 50% Medicines Dental 18% Other 2018 2019 2020 2021 2022 2023 6M2024 2Q23 2Q24 Th. People VIDA CÁMARA BENEFICIARIES • Vi
Slide 40: Chapter: Financial Position
Chapter Financial Position 04 SEP /2024 40
Slide 41: Well-Managed Debt Maturity and Liquidity Position
WELL-MANAGED DEBT MATURITY AND LIQUIDITY POSITION INDIVIDUAL ILC LEVERAGE RATIO LIQUIDITY POSITION (JUN-2024) % 0,60x 144A-Reg S 38.0% 0,37x 0,37x 0,39x 0,36x 0,35x 0,33x 0,33x 0,33x 0,32x 0,31x 0,30x Ch$ Investment Portfolio 193.7 bn. 41.8% Dic. 2021 Sep. 2022 Jun. 2023 Mar. 2024 Net Financial Debt
Slide 42: Outperforming IPSA YTD
OUTPERFORMING IPSA YTD ILC STOCK PRICE VS IPSA INDEX ILC IPSA • Stock return: +18.5% 7,500 • Dividends: +7.1% 6,330 6,460 • Index return: 4.2% 6,198 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 SEP /2024 Closing Price: Aug 30th, 2024 Source: Bolsa de Comercio de Santiago 42
Slide 43: Chapter: Wrap-up and Conclusions
Chapter Wrap-up and 05 Conclusions SEP /2024 43
Slide 44: Wrap-up and Conclusions
WRAP-UP AND CONCLUSIONS o Higher revenues from adjustments and financial operations were driven by the growth of the commercial and consumer loan portfolio o Increased operating expenses due to the consolidation of Autofin o Growth in individual life insurance and annuity revenues o Higher investmen
Slide 45: Conference Call 2Q-2024
Conference Call 2Q - 2024 /2024SEP /2024 SEP 45
Inversiones La Construcción S.A. (ILC) — Q2 2024 Earnings Presentation on 6ix