Grupo De Inversiones Suramericana S.a. · BVC:GRUPOSURA
Grupo De Inversiones Suramericana — Q1 2018 Earnings Presentation
49 slides from Grupo De Inversiones Suramericana's earnings presentation, September 2018
Slide 1: Corporate presentation 1Q-2018
Corporate presentation 1Q-2018
Slide 2: Disclaimer
DISCLAIMER » The forward-looking statements contained herein are based on Management’s current forecasts and outlook. For better illustration and decision-making, figures for Suramericana, SURA Asset Management and its subsidiaries are administrative rather than accountant, and therefore may differ
Slide 3: Highlights
HIGHLIGHTS» 01 04 USD 7.7 bn MEXICO Market Cap GUATEMALA DOMINICAN Group of leading financial REPUBLIC Outstanding SALVADOR PANAMA services companies in Latam brand recognition 48.8 million COLOMBIA Clients* PERU BRAZIL Assets managed by our 02 05 strategic investments * » CHILE COP 602 tn ARGENTINA
Slide 4: Investment Portfolio
INVESTMENT PORTFOLIO » STRATEGIC INVESTMENTS INDUSTRIAL INVESTMENTS CORPORATE VENTURE In alliance with Veronorte 81.1% 83.6% 46.0%* 35.2% 35.2%* GROWTH INVESTMENTS Insurance, Trends Pensions, Asset and Universal Processed Food Cement, Energy and Risk Management Wealth Management Banking and Infrastr
Slide 5: Industry and Geographic Diversification
I N D U S T R Y A N D G E O G R A P H I C D I V E R S I F I C AT I O N » Diversified financial services portfolio Geographic diversification Country Clients Revenues Net Income Assets COLOMBIA 27.7 52.7% 45.9% 49.3% CHILE 3.7 19.7% 19.3% 29.1% Banking MEXICO 7.3 10.9% 17.3% 9.0% Pension, AM & WM PER
Slide 6: Large Client Base in Attractive Markets
L A R G E C L I E N T B A S E I N AT T R A C T I V E M A R K E T S » SURAMERICANA » SURA ASSET MANAGEMENT» BANCOLOMBIA » • 17.6 million clients in 9 countries. • 19.2 million clients in 6 countries. • +13 million clients • #1 Insurance company in Colombia • #1 Pension Fund in Latam with 23% • #1 Ban
Slide 7: History & Growth Stages
H I S T O R Y & G R O W T H S TA G E S » 1944 / 1990 1990 / 2007 2007 / 2016 2017- INSURANCE FINANCIAL INTERNATIONAL FOOTPRINT LEADERSHIP SERVICES EXPANSION OPTIMIZATION in Colombia group leader in Colombia Multi Latin, financial services group 7
Slide 8: Investment Portfolio 2010 vs 2018
INVESTMENT PORTFOLIO » 2010» 2018» 26.9% Bancolombia 37% Bancolombia 3% Protección 27.1% Sura Asset Suramericana Management 6% USD 6.2 Bn 24% Grupo Nutresa 13.0% Suramericana 29% Grupo Argos Other USD 9.5 Bn 15.9% Grupo Nutresa 1% 16.3% Grupo Argos 46% in Financial Services 0.7% Other 66% in Financi
Slide 9: Strategic Guidelines
S T R AT E G I C G U I D E L I N E S » COMPREHENSIVE RANGE OF SERVICES AND SYNERGIES INNOVATION GEOGRAPHIC Development of our AND NEW BUSINESS EXPANSION AND MARKET Corporate Role » VENTURES DEVELOPMENT Executive Committee CREATING ADDED • CEOs from strategic investments • Long-term strategy CORPORAT
Slide 10: Innovation and New Ventures
I N N O V AT I O N A N D N E W V E N T U R E S » ALLIANCES Identify challenges of the digital age for our businesses, and partner for the development of specific projects, that help us make the transition together towards the future. » Big Data & Analytics » Blockchain » Identity STARTUP FACTORY COR
Slide 11: Comprehensive Range of Services and Synergies
COMPREHENSIVE RANGE OF SERVICES AND SYNERGIES » ($) Wealth + – Life Cycle Universal Mandatory P&C Mandatory Voluntary Life Insurance Mutual Securities Programmed Annuities Assisted Banking Pensions Insurance Health Savings and Savings Funds Withdrawal Living ACCUMULATION PHASE DE-ACCUMULATION PHASE
Slide 12: Geographic Expansion and Market Development
MEXICO G E O G R A P H I C E X PA N S I O N #29 AND MARKET DEVELOPMENT» #3 DOMINICAN REPUBLIC GUATEMALA #5 #4 COLOMBIA EL SALVADOR #1 #2 PANAMA #1 #1 #4 #2 #2 #2 PERU #1 BRAZIL CHILE #18 #1 in P&C #4 Strategic Investments ARGENTINA URUGUAY #17 #3 #2 Number below each country corresponds to ranking i
Slide 13: Corporate Governance: Shareholders
CO RPO RAT E G O VERNANCE C O R P O R AT E G O V E R N A N C E » SHAREHOLDERS» 27.1% Gru po Argos and 33.6% subsidiarie s Total Outstanding Shares 10.2% Gru po Nutresa 12.7% 25.8% Colombian Pe nsion 581,977,548 18.6% Funds (COMM) (COMM + PREF) Inte rnational Funds Outstanding Outstanding 21.5% 20.8%
Slide 14: Corporate Governance: Sustainability and Board Composition
CO RPO RAT E G O VERNANCE C O R P O R AT E G O V E R N A N C E : S U S TA I N A B I L I T Y A N D B O A R D C O M P O S I T I O N » HIGH CORPORATE STANDARDS Code of Good Governance in accordance with international practices. The Board of Directors has 7 members of which 4 are independent. The chairm
Slide 15: Sound Reputation and Brand Strength
SOUND REPUTATION SO UND REPUT AT I O N AND BRAND STRENGTH» AND BRAND ST RENG T H DOMINICAN REPUBLIC 2017: 37 MEXICO 2017: 54 2016: PANAMA COLOMBIA 60% 2017: 65 2017: 83 2014: 48% PERU BRASIL SURA´S BRAND AWARENESS» 2017: 49 2017: 17 has surpassed the 50% threshold in most of the URUGUAY CHILE countr
Slide 16: Strong Financial Position: Dividend Evolution
STRONG FINANCIAL POSITION » Dividend evolution » 336 272 309 3x Bancolombia 2010 Dividends 201 SURA AM 184 Grupo Argos 149 Grupo Nutresa 99 101 *Calculation done in a proforma basis Protección Source: each of the companies’ annual report. Suramericana Estimates done by Grupo SURA Other Figures in US
Slide 17: Operating Cash Flow
STRONG FINANCIAL POSITION » O P E R AT I N G C A S H F L O W Grupo SURA generates close to USD 200 million for debt, dividend payment and investments 2018E 53 124 388 336 212 Dividends and Operating Expenses Operating Cash Interest Cash Available Other Income Flow Figures in USD million (1) FX = COP
Slide 18: Debt
DEBT» GRUPO SURA Banks Debt maturity profile » 550 International Bonds 20.9% Banks Local Bonds TYPE OF 77.8% Bonds 335 300 DEBT Repos 1.3% Repos 123 104 57 70 60 36 36 35 - - 2018 2019 2020 2021 2022 2023 2024 2026 . 2029 2030 . 2049 Credit ratios» COP 79.7% CURRENCY Net Debt / Dividends Liquidity L
Slide 19: Human Talent and Corporate Culture
H U M A N T A L E N T A N D C O R P O R AT E C U L T U R E » Key aspects» Key practices» » Business culture » Technology at the service of human talent » Talent development » Leadership formation » High potential talents » Talent retention » Working environment and engagement » Compensation and bene
Slide 20: Grupo SURA Consolidated Results 1Q 2018
Grupo SURA Consolidated Results 1Q 2018 20
Slide 21: Highlights: Grupo SURA
HIGHLIGHTS» GRUPO SURA • Good operating results, affected by capital markets performance. INVESTMENT PORTFOLIO* • Total revenues of USD 1.7 bn (-2.2%). • Investment income decreases USD 91 MM (-47.0%) affected by lower returns in Other capital markets. 0.7% • Retained premiums decrease (-0.8%) due t
Slide 22: Consolidated Statement of Financial Position
S TAT E M E N T O F F I N A N C I A L P O S I T I O N » CONSOLIDATED Assets » Liabilities » dec-17 24,819 dec-17 15,387 -827 -432 -3.3% -2.8% mar-18 23,992 mar-18 14,955 0.0 5,000 .0 10 , 00 0.0 15 , 00 0.0 20 , 00 0.0 25 , 00 0.0 30 , 00 0.0 0.0 2,000 .0 4,000 .0 6,000 .0 8,000 .0 10 , 00 0.0 12 ,
Slide 23: Consolidated Statement of Comprehensive Income
S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E » CONSOLIDATED Var%: -0.8% +11.5% 19.9% -47.0% -17.8% +104% -39.4% -2.2% Total Revenues» 46 1,751 23 22 1,713 (8) (91) (16) (13) mar-17 1,751 -38 -2.2% mar-18 1,713 2017 Retained Commission Services Investment Equity Exchange Other 2018 0.0 2
Slide 24: Consolidated Net Income Bridge
S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E » CONSOLIDATED Grupo SURA & Other* 146 12 112 (16) 6 (4) (15) (6) (3) (9) Net Income ∆ Net Income ∆ Net Income ∆ Equity ∆ Exchange ∆ Admin. ∆ Interest ∆ Other ∆ Taxes Net Income 2017 Suramericana SURA AM Method*** Diff + Expenses** 2018 Hedgi
Slide 25: SURA Insurance, Trends y Risks: Suramericana Consolidated Results
SURA INSURANCE, TRENDS Y RISKS SURAMERICANA S.A CONSOLIDATED RESULTS 25
Slide 26: Suramericana
SURAMERICANA» MEXICO Ranking 29 0.4% 1Q2018 0.2 M Total Premiums EL SALVADOR Ranking 2 USD 932 MM DOMINICAN 16.3% REPUBLIC PANAMA 0.7 M Ranking 4 Ranking 5 9.1% 8.1% 0.2 M 0.1 M 54.9% Colombia COLOMBIA Ranking 1 13.5% Chile 10.0% Argentina 24.5% 4.6% Brazil 10.8 M 5.1% Mexico BRAZIL Ranking 18 3.8%
Slide 27: Suramericana: Business Model Centered on Client Experience
SURAMERICANA» BUSINESS MODEL CENTERED ON CLIENT EXPERIENCE AND VALUE CREATION 01 04 Create great client experience and Build and develop competitive shareholders’ value advantages: Human talent, Technology and innovation, GTR 02 05 Strategic and emerging risk RSA Integration: management » Develop ne
Slide 28: Highlights: Suramericana
HIGHLIGHTS» SURAMERICANA % WRITTEN PREMIUMS • Retained premiums of USD 809 MM (+2.8%), grew 8.0% excluding the effect of the D&S El Salvador Uruguay Insurance. Revenue from health services rendered maintains positive dynamics (+20.8%). 3% 3% Rep. Dom. Panamá 1% • Improvement in technical and underwr
Slide 29: Suramericana Statement of Comprehensive Income
S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E » CONSOLIDATED Var%: +9.5% +1.0% -20.2% -23.7% -49.7% +97.2% -30.8% (2.3) 17.2 Operating Revenues* » 52.3 2.7 mar-17 1,004 (21.2) 36.2 (6.5) (6.0) 67 6.7% mar-18 1,071 2017 Net Technical Admin. Investment Interests Other Taxes 2018 Net 0.0 20
Slide 30: Suramericana Net Income Bridge
S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E » CONSOLIDATED FIGURES SURAMERICANA S.A. Corporate Segment 52 3 1 36 4 1 (22) (1) (0) (1) Net Income Life Non-Life Health Care Fx Impact Admin. Interest Taxes Other** Net Income 2017 Expenses** 2018 * Admin. Expenses includes Administrative E
Slide 31: Segments: Premiums and Claims Ratio
SEGMENTS» PREMIUMS AND CLAIMS RATIO Life » Non life » Health care » Premiums Retained Claims Ratio Premiums Retained Claims Ratio Services rendered Claims Ratio mar-18 %Var mar-18 mar-17 mar-18 %Var mar-18 42825 mar-18 %Var mar-18 mar-17 Life 49 2.9% 36.2% 26.5% Auto 235 10.5% 61.2% 63.3% EPS 244 21
Slide 32: SURA Asset Management Consolidated Results
SURA ASSET MANAGEMENT CONSOLIDATED RESULTS 32
Slide 33: SURA Asset Management: Strategic Guidelines
SURA ASSET MANAGEMENT » STRATEGIC GUIDELINES 01 04 The client is the absolute priority Disruptive advisory based and is at the core of our strategy commercial model 02 05 Sustainability of the mandatory Excellence in Asset business Management 03 06 Acceleration of the Focus on efficiency voluntary b
Slide 34: SURA Asset Management: Figures Total Company
Nº1 in Pensions in Latam FIGURES MEXICO Ranking 3 TO TAL C O M PAN Y » EL SALVADOR USD 31.4 Bn 7.3 M AUM Ranking 2 14.8% 3,092 USD 141 billion USD 4.9 Bn 1.6 M 47.5% 311 COLOMBIA Ranking 2 Clients USD 34.2 Bn 6.2 M 19.2 million +0.6% PERU Ranking 1 36.8% 1,840 Voluntary +12.3% I Mandatory +0.02% USD
Slide 35: Highlights: SURA Asset Management
HIGHLIGHTS» SURA ASSET MANAGEMENT SURA AM Consolidated Mandatory Pensions Voluntary Savings • Continued growth in revenues and • Sale agreement of life annuity business in • Commission income +6.0% in 1Q18 vs. Chile for USD 230 MM aprox. +3.8% in 1Q17 and +3.7% en 1Q17. positive net flow: • Commissi
Slide 36: SURA AM Consolidated Figures
SURA ASSET MANAGEMENT » CONSOLIDATED FIGURES Var%: +11.2% -53.5% -86.3% -18.3% -10.5% -7.9% Operating Income + Insurance Margin» 19 231 (8) 213 (25) (4) (0) mar-17 231 (18) -7.9% mar-18 213 0.0 10 0,000 .0 20 0,000 .0 30 0,000 .0 40 0,000 .0 50 0,000 .0 60 0,000 .0 70 0,000 .0 2017 Revenues Commissi
Slide 37: SURA AM Net Income Bridge
S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E » CONSOLIDATED FIGURES – SURA ASSET MANAGEMENT Corporate Segment 62 2 48 8 1 1 (19) (2) (2) (1) (1) (2) Net Income Mandatory Voluntary Life Annuities SURA Peru Fx Impact* Oper. Wealth Tax Interest Other** Net Income 2017 Savings Insurance Exp
Slide 38: Appendix
Appendix 38
Slide 39: Demographic Fundamentals
D E M O G R A P H I C F U N D A M E N TA L S » YOUNG AND GROWING POPULATION 364 MM 559 MM Age 2010 people over 20 2050 100+ people over 20 INTERESTING DEMOGRAPHIC 90 – 94 7% 19% EVOLUTION IN LATAM » 80 – 84 Annuities 70 – 74 60 – 64 50 – 54 47% 51% Men 40 – 44 Savings and 30 – 34 accumulation 20 – 2
Slide 40: Financial Services Penetration
FINANCIAL SERVICES» PENETRATION Pension penetration (%GDP)» Banking penetration (%GDP) » 188.8% 97.4% 79.4% 70.7% 97.9% 86.6% 83.0% 33.6% 30.6% 47.1% 45.6% 32.4% 42.3% 27.9% 29.8% 49.3% 21.3% 20.3% 23.3% 14.7% Estados Colombia Perú Panamá México Uruguay Europa Chile El salvador Dominicana Unidos Eur
Slide 41: Cross Holding Structure
CROSS HOLDING STRUCTURE » FINANCIAL SERVICES 12.7% 33.6%* 35.2% 35.3% PROCESSED FOOD INFRASTRUCTURE 12.4% 9.8% Stakes in common shares as of December 31, 2017. *Includes stake held in Grupo SURA by Cementos Argos which owns 5.7% of Grupo SURA’s common shares. 46
Slide 42: Mandatory Pension Fund Segment
M A N D AT O R Y P E N S I O N F U N D S E G M E N T » Contributions to pension funds are Steadily increasing revenues driven AUM tend to be stable, mandatory and correlated to size of by contributions to funds / assets as pensions are “sticky” the formal workforce » Flows into pension funds are a f
Slide 43: Key Main Characteristics
KEY MAIN CHARACTERISTICS » 48
Slide 44: Key Main Characteristics
KEY MAIN CHARACTERISTICS » 49
Slide 45: Our Vision: Two Major Challenges for Pension Systems
OUR VISION» TWO MAJOR CHALLENGES FOR THE LATIN AMERICAN PENSION SYSTEMS: CLOSE THE EXISTING PENSION GAPS » ENHANCING THE INTEGRATION BETWEEN » or non-contribution Social assistance pillar A mandatory contribution pillar A voluntary savings pillar THE 3 PILLARS 50
Slide 46: Our Vision: Proposals for Multi-Pillared Pension System
OUR VISION» PROPOSALS FOR ENHANCING A MULTI-PILLARED PENSION SYSTEM More savings and More efficient Multi-funds Enhancing Incorporating over a longer investment protect against competition alternative period of time portfolios risk investment options Increasing Adequate Extending Enhancing the Creat
Slide 47: Undisputed Leadership in Highly Stable Mandatory Pension Business
U N D I S P U T E D L E A D E R S H I P I N H I G H LY S T A B L E M A N D AT O R Y P E N S I O N B U S I N E S S » 22.9% 19.2% 14.8% 36.8% 39.1% 17.6% 47.5% Ranking 1st Ranking 4th Ranking 3rd Ranking 2nd Ranking 1st Ranking 2nd Ranking 2nd Metlife 10.4% 25.1% 2.2% Prudential 11.0% 27.5% 3.9% Princ
Slide 48: From Labor Cycle to Generational Cycle
FROM LABOR CYCLE T O G E N E R AT I O N A L C Y C L E » PERSONAL WEALTH Wealth Cycle ACCUMULATION DE-ACCUMULATION Life Cycle 0 – 17 18 – 26 27 – 36 37 – 46 47 – 55 56 – 65 65 + Mandatory Pensions Voluntary Savings Investments Asset Management Loans Payments Mandatory Insurance Voluntary Insurance 53
Slide 49: www.gruposura.com.co
DAVID BOJANINI CEO RICARDO JARAMILLO CFO JUAN CARLOS GOMEZ IR MD ANDRES ZULUAGA IR SPECIALIST E-mail: ir@gruposura.com.co Phone: (574) 3197039 www.gruposura.com.co 55
Grupo de Inversiones Suramericana — Q1 2018 Earnings Presentation on 6ix