Quinenco S.a. · BCS:QUINENCO
Quinenco — Investor Presentation (August 2010)
39 slides from Quinenco's investor presentation, August 2010
Slide 1: August, 2010
August, 2010
Slide 2: Overview
Overview Financial Results Main Operating Companies Recent Events Conclusions
Slide 3: Quiñenco Group of Companies
Quiñenco Group of Companies Quiñenco is one of Chile’s largest business conglomerates with US$40 billion in assets under its management Companies managed by Quiñenco generated sales revenue of US$4 billion in 2009 The Quiñenco group of companies employs over 22,000 people in Chile and abroad
Slide 4: Quiñenco – Attractive Fundamentals
Quiñenco – Attractive Fundamentals Dominant position Quiñenco’s companies are leaders in their respective in its markets industries Holding has proven track record in value creation evidenced by Proven track record sale of investments of approx. US$ 4 bln and gains on sale of in value creation U
Slide 5: Ownership Structure
Ownership Structure Mining Luksic Group Chilean Stock 83% Exchanges QUIÑENCO Industrial/ Financial Services 17% Market Capitalization*: US$3.5 billion *As of August 3, 2010
Slide 6: Quiñenco: Main Operating Companies
Quiñenco: Main Operating Companies % Control 61.7% 66.1% 47.7% Banco de Chile CCU Madeco Mkt Cap: US$10.6 bln Mkt Cap: US$3.4 bln Mkt Cap: US$324 mln ¾2nd ranked bank ¾ N°1 beer producer with ¾Manufacturer of ¾Merged with Citibank 86% market share copper & aluminum and Chile on 1/1/08 ¾Largest bever
Slide 7: Focused Diversification
Focused Diversification Food & Beverage Food & Beverage Food & Beverage Food & Beverage Food & Beverage Hotels Hotels Hotels Manufacturing Manufacturing Manufacturing Manufacturing Telecom Financial Services Telecom Telecom Financial Services Financial Services Financial Services 1970s 1980s 1990s 2
Slide 8: Holdings by Sector
Holdings by Sector Corporate Level Book Value As of March 31, 2010 Manufacturing Beverage & Food Other 11% 13% 2% Financial Services 74% US$2.4 billion
Slide 9: Chilean Conglomerate: Consolidated Assets by Country
Chilean Conglomerate Consolidated Assets by Country US$38.1 billion Argentina 0.2% Peru 0.1% Chile Chile 85% 99.7% Note: Figures translated from Chilean pesos as of December 31, 2009, at exchange rate of: Ch$507.10= 1US$ Consolidated assets are concentrated in Chile. Investments abroad are all at th
Slide 10: NAV/Share Price Evolution
NAV/Share Price Evolution NAV US$3.6 billion Market Cap US$2.8 billion Cash Share price / NAV in Ch$ Other 12% 2% Evolution of NAV/Share Price as of March 31, 2010 Manufacturing $ 2,000 $ 1,375 $ 1,451 $ 1,670 4% $ 1,166 $ 1,243 $ 1,500 $ 1,000 $ 1,280 $ 975 $ 1,000 $ 1,075 $ 500 $ 950 $0 Mar‐09 Jun
Slide 11: Quiñenco – Investment Criteria
Quiñenco – Investment Criteria Î Brand & consumer franchise development potential Î Sufficient critical mass Î Prior operating or industry experience Î Access to strategic partners/commercial alliances Î Growth platform or add-on acquisition potential Î Controlling stakes
Slide 12: World Class Strategic & Commercial Alliances
World Class Strategic & Commercial Alliances Quiñenco partners with world class players to develop its markets & products to take advantage of combined know-how, experience and capital capacity
Slide 13: Value Creation System
Value Creation System Value creation stems from: ■ Acquisitions ■ Restructurings ■ Development & maximization of profitability of business portfolio ■ Divestments Divest Continuous growth of Shareholder value Maximize profitability Acquisition Restructuring Quiñenco has developed a process of value
Slide 14: Corporate Level Transactions
Corporate Level Transactions In US$ mlns SE CT O R D IV ES T IT URE YR SO L D P RO CE EDS G AIN ON S ALE F in an cia l Services L Q IF (17% ) 2010 1,031.9 322.2 * T eleco m T elsu r sh ares 2010 109.1 16.6 T eleco m E n tel sh ares 2009 92.1 61.8 Retail D &S sh ares 2009 23.4 3.9 T eleco m E n tel s
Slide 15: Acquisitions & Capital Increases
Acquisitions & Capital Increases En millones de US$ ACQUISITIONS Financia l Services 2008 Ba nco de Chile 2.7% 82.0 Retail 2004 Almacenes Pa ris 1 1.4% 82.3 Retail 2004 Others 1.0% 23.0 Financia l Services 2001 Ba nco de Chile 5 2.7% 1,049.7 Financia l Services 1999 Ba nco Edwards 5 1.2% 502.2 Telec
Slide 16: Healthy Financial Structure
Healthy Financial Structure Corporate Level Assets Liabilities and SH Equity US$2.8 billion US$2.8 billion Other ST Debt Cash 1% Other 10% 3% Liabilities 5% LT debt 4% SH Equity 90% LT Investments 87% Leverage = 0.11 As of March 31, 2010 Long-term investments are financed with equity and long-term d
Slide 17: Net Debt Corporate Level (adjusted)
Net Debt Corporate Level (adjusted) In US$ mlns 2006 2007 2008 2009 Mar-10 Debt 681 694 402 318 323 Cash -194 -322 -102 -197 -463 Net Debt 487 372 301 121 -140 * Adjusted for proportionate share of debt and cash of IRSA (50%), and of LQIF (67.04%) as of 2008. Net Debt as of March 31, 2010 600 400 48
Slide 18: Main Indicators Corporate Level
Main Indicators Corporate Level Debt reduction has implied lower leverage High interest coverage Negative net debt LEVERAGE * INTEREST COVERAGE YEARS TO PAY DEBT 5.4 0.45 58.1 0.36 46.6 1.8 0.14 0.10 0.11 7.0 11.2 0.8 2.8 0.0 0.0 2006 2007 2008 2009 Mar-10 2006 2007 2008 2009 12m Mar 10 2006 2
Slide 19: Dividend Cashflow Corporate Level
Dividend Cashflow In US$ mlns Corporate Level 203 205 208 200 160 Banco de Chile CCU 120 110 Telsur 101 Entel 80 Madeco Otros 40 0 2006 2007 2008 2009 2010(jun) Note: Figures translated from nominal Chilean pesos at the exchange rate of : Ch$524.46= 1US$ Good operating company performance allows for
Slide 20: Overview
Overview Financial Results Recent Events Main Operating Companies Conclusions
Slide 21: Consolidated Results 2009 - IFRS
Consolidated Results 2009 - IFRS As of 2009, Quiñenco prepares its Financial Statements in accordance with IFRS. Main changes with respect to Chilean GAAP: − Consolidation with Banco de Chile, SM Chile and Banchile Seguros de Vida − On-Balance accounting of Banco de Chile’s Subordinated Debt wit
Slide 22: Consolidated Results
Consolidated Results En MMUS$ 12/31/2008 12/31/2009 % Change 03/31/2009 03/31/2010 % Change Sales 504.1 484.6 -3.9% 116.0 125.7 8.3% Operating income* (18.9) (7.5) -60.5% (5.7) (4.2) -26.7% Non-operating income 110.8 142.5 28.6% 73.0 31.8 -56.4% Income tax 4.8 (1.8) -136.2% -4.9 (6.0) 23.4% Net inco
Slide 23: Contribution to Quiñenco’s Net Income by Segment
Contribution to Quiñenco’s Net Income by Segment In US$ mlns 12/31/2008 12/31/2009 %Change 03/31/2009 03/31/2010 %Change Manufacturing 104.8 34.6 -67% 7.7 (1.6) -121% Financial 389.6 386.8 -1% 94.3 152.5 62% Other 275.9 126.0 -54% 60.4 30.6 -49% Consolidated Net Income 770.3 547.5 -29% 162.4 181.5 1
Slide 24: Overview
Overview Financial Results Recent Events Main Operating Companies Conclusions
Slide 25: Telsur: Sold to GTD Manquehue
Telsur: Sold to GTD Manquehue Quiñenco signs agreement with GTD Grupo Teleducto on sale of 74.4% of Telsur on December 1, 2009. Price of Ch$341.54 values Telsur at US$156 million, share of Quiñenco amounts to US$113 million. Transaction reported Quiñenco a gain of US$17 million in the first qu
Slide 26: Citigroup exercises options in LQIF
Citigroup exercises options in LQIF Citigroup exercises both options, reaching a share of 50.0% of LQIF Options materialized on April 30, 2010 with payment of US$1 billion in cash. During 2Q 2010 Quiñenco will report gain of approx. US$322 million arising from exercise of first option, and an
Slide 27: US$1,380 million in Cash Corporate Level
US$1,380 million in Cash Corporate Level Significant liquidity gives flexibility to take investment opportunities 100% of the funds are invested in Chile in debt instruments, denominated in local currency, with an average duration of less than a year. Investment portfolio includes repurchase a
Slide 28: Overview
Overview Financial Results Recent Events Main Operating Companies Conclusions
Slide 29: Banco de Chile
Banco de Chile Financial Services Established in 1893, Banco de Chile has a highly recognized name in Chile 2nd largest bank in the Chilean financial system One of the most profitable banks in terms of return on assets and equity Assets of US$34.4 billion Over 14,000 employees Nationwide
Slide 30: Banco de Chile
Banco de Chile Financial Services (MUS$, as of March 31, 2010) In 1Q 2010 operating income increased 26% reaching MUS$550 due to improved ROAE economic conditions and the favorable effect of positive inflation 27,4% 26,5% 25,0% Net income in 1Q 2010 was MUS$192, more than 25,1% doubling 1Q 2009
Slide 31: CCU
CCU Beverage & Food Founded in 1850, CCU is the largest brewery and beverage producer in Chile, and the second brewery in Argentina. Assets of US$2.2 billion. Over 5,300 employees. 18 facilities in Chile. 4 facilities in Argentina. Extensive distribution network reaching over 90,000 sale
Slide 32: CCU
CCU Beverage & Food (MUS$, as of March 31, 2010) EBITDA by Business Segment Sales grew 1% in 1Q 2010 to MUS$407 March 2010 Net income for the period reached MUS$64, Wine Spirits 23% less than the previous period, due to a Non-alcoholic 5% 3% lower non-operating results. beverages 22% EBITDA wa
Slide 33: Madeco
Madeco Manufacturing Founded in 1944, Madeco is the main Latin American manufacturer of copper and aluminum products as well as flexible packaging. Global presence through exports of a variety of copper and aluminum products to the North American and European markets with over 3,000 customers.
Slide 34: Nexans
Nexans Manufacturing Nexans is the worldwide leader in the cable industry with 2009 Sales by Origin presence in 39 countries and commercial activities worldwide, after over a century of progress. Headquartered in Paris, France, Nexans produces cables and cabling systems at more than 90 productio
Slide 35: Madeco
Madeco Manufacturing (MUS$, as of March 31, 2010) SALES Sales in 1Q 2010 grew by 24% to MUS$91 boosted by brass mills and flexible 124 packaging. 107 Net loss was MUS$2.5 due to a lower non- operating result 24 17 6 7 2006 2007 2008 2009 Mar-09 Mar-10 EBITDA NET INCOME 1.218 1.066 113 58 384 316
Slide 36: Overview
Overview Financial Results Recent Events Main Operating Companies Conclusions
Slide 37: Outlook
Outlook Healthy Portfolio Negative Financial Optimization Net Debt Structure Good performance of main Sound financial indicators High Cash levels operating companies should Well structured Balance Sheet Current debt levels contribute to sustained AA- local rating allow further leveraging di
Slide 38: Highlights
Highlights ¾ Proven track record and experience in core business segments ¾ Agility and financial strength allows Quiñenco to take advantage of business opportunities as they arise ¾ Strong shareholder group ¾ Diversified Chile risk ¾ Ability to attract strategic partners and commercial alliances co
Slide 39: QUIÑENCO S.A.
QUIÑENCO S.A. Thank you for your attention