Grupo De Inversiones Suramericana S.a. · BVC:GRUPOSURA
Grupo De Inversiones Suramericana — Q3 2017 Earnings Presentation
58 slides from Grupo De Inversiones Suramericana's earnings presentation, 2017
Slide 1: Corporate presentation 3Q-2017
Corporate presentation 3Q-2017
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 8.1 bn MEXICO Market Cap GUATEMALA DOMINICAN Group of leading financial REPUBLIC Outstanding SALVADOR PANAMA services companies in Latam brand recognition 47 million COLOMBIA Clients* PERU BRAZIL Assets managed by our 02 05 strategic investments * » CHILE COP 588 tn ARGENTINA U
Slide 4: Investment portfolio
INVESTMENT PORTFOLIO » STRATEGIC INVESTMENTS INDUSTRIAL INVESTMENTS CORPORATE VENTURE In alliance with Veronorte 81.1% 83.6% 46.3%* 35.2% 35.4%* 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 25.2 51.3% 38.5% 56.3% CHILE 3.3 21.8% 28.6% 23.7% Banking MEXICO 7.6 9.7% 14.0% 5.4% Pension, AM & WM PERÚ
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 » • 16.6 million clients in 9 countries. • 19.2 million clients in 6 countries. • 12 million clients • #1 Insurance company in Colombia • #1 Pension Fund in Latam with 23% • #1 Bank
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
INVESTMENT PORTFOLIO » 2010» 2017» 27.8% Bancolombia 37% Bancolombia 3% Protección 26.3% Sura Asset Management 6% Suramericana USD 6.0 Bn 24% Grupo Nutresa 12.3% Suramericana 29% Grupo Argos Other USD 9.5 Bn 15.6% Grupo Nutresa 1% 17.5% Grupo Argos 46% in Financial Services 0.4% Otros 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 #24 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 #22 #1 in P&C #4 Strategic Investments ARGENTINA URUGUAY #12 #2 #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% Grupo Argos 33.7% Total Outstanding Shares 12.7% 10.2% Grupo Nutresa Colombian Pension 581,977,548 18.7% 26.0% Funds (COMM) (COMM + PREF) Outstanding Outstanding 21.0% 21.5% International Funds Common Shares Pref. S
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 2016: 21 MEXICO 2016: 51.4 2016: PANAMA COLOMBIA 60% 2016: 59 2016: 81 2014: 48% PERU SURA´S BRAND AWARENESS» 2016: 29.2 has surpassed the 50% threshold in all but one of the CHILE URUGUAY countries w
Slide 16: Strong financial position: dividend evolution
STRONG FINANCIAL POSITION » Dividend evolution » 342 276 293 3x Bancolombia 2010 Dividends 204 SURA AM 187 Grupo Argos 151 *Calculation done in a proforma basis Grupo Nutresa 101 103 Source: each of the companies’ annual report. Protección Estimates done by Grupo SURA Suramericana Figures in USD Mil
Slide 17: Operating cash flow and 2017 dividend distribution
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 125 million for debt, dividend payment and investments 2017 DIVIDEND DISTRIBUTION » 2017E (1) 62 86.6% Dividend paid in 122 preferred shares 306 244 122 USD 15 million Dividend paid in Dividends and Other
Slide 18: Debt
DEBT» GRUPO SURA Banks Debt maturity profile » 550 International 20.4% Banks Bonds TYPE OF 75.5% Bonds Local Bonds 300 DEBT 4.1% Repos 197 142 81 102 98 54 76 56 34 33 - - 2017 2018 2019 2020 2021 2022 2023 2024 2026 . 2029 2030 . 2049 Credit ratios» COP 75.3% CURRENCY Net Debt / Dividends Liquidity
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 3Q 2017
Grupo SURA Consolidated Results 3Q 2017 20
Slide 21: Highlights
HIGHLIGHTS » GRUPO SURA • Total YTD revenues of USD 5.2 bn (+16.3%). INVESTMENT PORTFOLIO* • Driven by positive dynamics in written premiums (+23.6%), revenues on services rendered (21.0%) and equity method (+18.7%). Other 1% • Positive exchange rate impact in 2016 of USD 33.5 MM contrasts with USD
Slide 22: Statement of financial position: assets
S T AT E M E N T O F F I N A N C I A L P O S I T I O N » GRUPO SURA CONSOLIDATED 3Q 2017 Assets » dec-16 23,093 + 1,293 24,386 23,093 15,705 5.6% 14,445 sep-17 24,386 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 sep-17 Var. $MM %Change Investments 8,592 (330) -3.7% Invest
Slide 23: Statement of financial position: liabilities and equity
S T AT E M E N T O F F I N A N C I A L P O S I T I O N » GRUPO SURA CONSOLIDATED 3Q 2017 Liabilities » dec-16 14,445 + 1,260 Total shareholder’s equity » 8.7% sep-17 15,705 dic-16 8,648 0.0 2,000 .0 4,000 .0 6,000 .0 8,000 .0 10 , 00 0.0 12 , 00 0.0 14 , 00 0.0 16 , 00 0.0 18 , 00 0.0 20 , 00 0.0 33
Slide 24: Statement of comprehensive income
S T AT E M E N T O F C O M P R E H E N S I V E I N C O M E » GRUPO SURA CONSOLIDATED 3Q 2017 Total revenues » Total expenses » Net income » sep-16 4,438 sep-16 3,851 sep-16 486 + 721 + 819 -120 16.3% 21.3% -26.6% sep-17 5,160 sep-17 4,670 sep-17 365 0.0 1,00.0 2,00.0 3,00.0 4,00.0 5,00.0 6,00.0 0.0
Slide 25: Statement of comprehensive income: net income bridge
S T AT E M E N T O F C O M P R E H E N S I V E I N C O M E » CONSOLIDATED Grupo SURA and Other* 509 26 (14) (24) (64) Net Income excluding: (0) (21) 374 (24) Var$ (14) Fx Impact Corporate Segment**: Grupo SURA (63.9) SURA AM (30.3) Suramericana (10.1) Other Non-Recurring Expenses (29.9) -0.3% Net In
Slide 26: Suramericana S.A. Consolidated Results
SURA INSURANCE, TRENDS Y RISKS SURAMERICANA S.A CONSOLIDATED RESULTS 26
Slide 27: Suramericana
SURAMERICANA» MEXICO Ranking 24 0.4% 0.2 M 3Q YTD EL SALVADOR Total Premiums Ranking 2 USD 3.0 bn DOMINICAN 16.3% REPUBLIC PANAMA 0.7 M Ranking 4 Ranking 5 9.1% 8.1% 0.2 M 0.1 M 54.8% Colombia COLOMBIA Ranking 1 14.7% Chile 10.4% Argentina 24.5% 4.6% Brazil 10.8 M 5.1% Mexico BRAZIL Ranking 22 3.6%
Slide 28: 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 29: Highlights
HIGHLIGHTS» SURAMERICANA % WRITTEN PREMIUMS • Consolidated premiums of USD 3.0 bn YTD, growing 30.9%, driven by acquired El Salvador Uruguay operations and organic growth (+12.1%). 3% 2% Rep. Dom. Panamá 2% • Operating segments with double-digit growth in revenues and profits: 4% México • Life: dyna
Slide 30: Acquisition of Seguros de Vida SURA Mexico
ACQUISITION OF SEGUROS DE VIDA SURA MEXICO » Transaction Profile Geographic Coverage Product Portfolio Value: US $20.6 million Presence through 18 Combined SURA México commercial branches Personal Other Sura Mexico Life Insurance Accidents 7% 3% Medical Expenses • Written Premiums*: 6% Group Life US
Slide 31: Suramericana consolidated figures
SURA INSURANCE, TRENDS AND RISK MANAGEMENT » SURAMERICANA S.A. CONSOLIDATED FIGURES Total Revenues» Total Expenses » Net Income» sep-16 2,783 sep-16 2,619 sep-16 148 +750 MM +744 MM -13.9 MM 26.9% 28.4% -9.4% sep-17 3,533 sep-17 3,363 sep-17 134 0.0 20 00 . 40 00 . 60 00 . 80 00 . 1,000 . 1,200 . 1,
Slide 32: Statement of comprehensive income: net income bridge
S T AT 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 5.0 8.1 147.7 (10.1) 1.2 6.7 133.8 (2.9) (6.2) Net income excluding (15.8) exchange difference at the Corporate Segment +2.2% Net Income Life Non-Life Health Care Fx Impact Admin. In
Slide 33: Segments: premiums and claims ratio 3Q2017
SEGMENTS» PREMIUMS AND CLAIMS RATIO 3Q2017 Life » Non life » Health care » Premiums Retained Claims Ratio Premiums Retained Claims Ratio Services rendered Claims Ratio sep-17 %Var sep-17 sep-16 sep-17 %Var sep-17 sep-16 sep-17 %Var sep-17 sep-16 Life 172 4.7% 26.2% 23.3% Auto 663 50.7% 60.9% 63.6% E
Slide 34: SURA Asset Management Consolidated Results
SURA ASSET MANAGEMENT CONSOLIDATED RESULTS 34
Slide 35: 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 36: Figures total company
Nº1 in Pensions in Latam FIGURES MEXICO Ranking 3 TO TAL C O M PAN Y » EL SALVADOR USD 29.9 Bn 7.5 M AUM Ranking 2 15.0% 2,865 USD 132 billion USD 4.7 Bn 1.5 M 47.3% 333 COLOMBIA Ranking 2 Clients USD 30.8 Bn 5.9 M 19.1 million +2.4% PERU Ranking 1 36.7% 2,124 Voluntary +14.1% I Mandatory +1.9% USD
Slide 37: Highlights
HIGHLIGHTS» SURA ASSET MANAGEMENT • On November 2, 2017, the sale of Seguros SURA Peru by SURA AM to IFS was closed for a value of USD 276 million. • Announcement of the sale of the life insurance operation in Mexico to Suramericana for USD 20.6 T O TA L A U M MM. • Focus on asset management busines
Slide 38: SURA Asset Management consolidated figures 3Q 2017
SURA ASSET MANAGEMENT » CONSOLIDATED FIGURES 3Q 2017 Total revenues » Total expenses » Net income » sep-16 1,348 sep-16 1,099 sep-16 152 +30.6 MM +50.2 MM -8.6 MM 2.3% 4.6% -5.7% sep-17 1,379 sep-17 1,150 sep-17 144 0.0 50 0.0 1,00.0 1,50.0 2,00.0 2,50.0 0.0 50 00 . 1,000 . 1,500 . 2,000 . 2,500 . 0
Slide 39: Statement of comprehensive income: net income bridge
S T AT 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 Corporate Segment 176 6 2 (2) (4) 17 152 (15) Net Income excluding Fx 12 impact and non-recurring (30) (7) (1) provisions +15.5% Non-recurring Fx Impact** (+) provision Net Mandatory Voluntary Insurance Annuities SURA
Slide 40: Mandatory segment
SURA ASSET MANAGEMENT » MANDATORY SEGMENT Net Income: +5.0% 8 12 245 • Net Income grows 5.0% at constant Fx. 238 3 • Excluding non-recurring provision in México net (10) (7) income would grow 11%. • AUM of USD 117 Bn growing 12% driven by good market performance and net flow of USD 2.0 Bn. • Mexico
Slide 41: Voluntary savings
SURA ASSET MANAGEMENT » VOLUNTARY SAVINGS Net Income AFP Net Income 9M2016 Chile Mexico Peru Uruguay Protección Corporate 9M2017 • AUM of USD 11.0 Bn growing 19% with good dynamism in all countries. 7.9 • Mexico (+17%), Peru (+38%) and Colombia (+20%) stand out. (0.6) (4.4) (1.0) 0.6 • Positive net
Slide 42: Appendix
Appendix 42
Slide 43: Mandatory pension market figures 3Q 2017
M A N D AT O R Y P E N S I O N » MARKET FIGURES 3Q 2017 Assets Under Management » Pension fund membership (mm)» 14.4% 18.2% 15.7% 26.6% 18.3% 9.7% 16.4% 9.2% 9.4% 9.0% 27.4% 18.3% 7.6% 11.6% -2.0% 1.2% -0.2% -0.3% 4.8% 4.6% 1.9% 116,945 100,455 17.0 17.3 37,870 7.3 7.3 33,106 21,186 25,051 24,027 28
Slide 44: Mandatory pension main figures 3Q 2017
M A N D AT O R Y P E N S I O N » MAIN FIGURES 3Q 2017 Commission income » Return on legal pension reserve (“encaje”) » 2.5% 0.1% -5.0% 13.9% 0.3% 72.1% 11.3% 309.6% 2.7% 7.7% -4.1% 10.1% 3.4% 295.9% 58.0% 85.1% 12.5% 81.7% 61.1% 60.6 440.8 442.0 82.1% 38 176.4 176.6 28 145.6 149.2 100.9 95.8 15 15 1
Slide 45: Voluntary savings segment main figures 3Q 2017
V O L U N T A R Y S AV I N G S S E G M E N T » MAIN FIGURES 3Q 2017 Assets Under Management » Clients (thousands) » 17.3% 26.2% 46.0% 132.1% 19.9% 24.5% 11.9% 16.7% 37.5% 133.5% 19.9% 18.5% 7.1% 31.5% 17.2% -6.6% 13.7% 14.1% 10,966 1,029 8,811 902 4,157 400 428 3,187 3,295 2,718 283 322 1,935 2,321
Slide 46: Voluntary savings segment main figures 3Q 2017
V O L U N T A R Y S AV I N G S S E G M E N T » MAIN FIGURES 3Q 2017 Commission income» Net premiums with savings » 22.9% 11.2% 41.6% 174.0% 23.9% 15.8% 0.0% 18.2% 23.1% 19.6% 43.1% 164.8% 27.7% 16.1% 1312.8% 18.5% 49.8 242.9 248.5 40.2 209.8 210.2 25.5 20.7 16.2 18.0 2.9 4.2 0.3 0.9 0.0 1.3 5.5 0.4
Slide 47: Insurance segment main figures 3Q 2017
INSURANCE SEGMENT » MAIN FIGURES 3Q 2017 Net premiums » Adjustments to reserves » -20.4% -0.6% -15.2% -27.2% 15.1% -18.3% -20.2% 6.9% -13.4% -27.0% 23.8% -16.9% 418 0 0 355 308 245 -76 -88 110 110 -209 0 (0) -287 -297 Chile Mexico Peru Total -363 Chile Mexico Peru Total Retained claims» Net income»
Slide 48: 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 49: 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 50: Cross holding structure
CROSS HOLDING STRUCTURE » FINANCIAL SERVICES 12.7% 33.7%* 35.2% 35.4% PROCESSED FOOD INFRASTRUCTURE 12.4% 9.6% Stakes in common shares as of September 30, 2017. *Includes stake held in Grupo SURA by Cementos Argos which owns 6.0% of Grupo SURA’s common shares. 50
Slide 51: 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 52: Key main characteristics
KEY MAIN CHARACTERISTICS » 52
Slide 53: Key main characteristics
KEY MAIN CHARACTERISTICS » 53
Slide 54: Our vision: two major challenges for Latin American 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 54
Slide 55: Our vision: proposals for enhancing a 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 56: 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 » 23.3% 19.6% 14.9% 36.2% 40.0% 17.8% 47.1% Ranking 1st Ranking 4th Ranking 3rd Ranking 2nd Ranking 1st Ranking 2nd Ranking 2nd Metlife 11.1% 26.2% 2.5% Prudential 10.9% 27.3% 2.2% Princ
Slide 57: 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 57
Slide 58: 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 58
Grupo de Inversiones Suramericana S.A. (Grupo SURA) — Q3 2017 Earnings Presentation on 6ix