Quinenco S.A. · BCS:QUINENCO
Quinenco — Investor Presentation (January 2014)
46 slides from Quinenco's investor presentation, January 2014
Slide 1: Company Presentation / January 2014
Company Presentation / January 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$ 4.2(1) billion (1) Market Capitalization as of December 31, 2013 3
Slide 4: Quiñenco
Quiñenco • Quiñenco is one of Chile’s largest business conglomerates with US$57 billion in assets under management • Companies managed by Quiñenco generated sales revenue of US$12 billion in 2012 • The Quiñenco group of companies employ around 32,780 people in Chile and abroad 4
Slide 5: Quiñenco: Main Operating Companies
Quiñenco: Main Operating Companies % Control as of September 2013 58.5% 61.6%(2) 22.5%(3) 65.9% 46.0% 42.4% 100% Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): US$ 902 mln(4) US$ 13.6 bln US$ 4.4 bln US$ 2.1 bln US$ 54 mln US$ 0.8 bln US$ 0.9 bln • 1st bank in Chile • No.1 C
Slide 6: First Class Board and Management
First Class Board and Management Board of Directors 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 • Fr
Slide 7: Over 50 Years of History
Over 50 Years of History 1957 - 1998 1999 - 2008 2009 - 2012 1957 Sociedad Forestal Quiñenco S.A is 1999 Quiñenco sells stake in OHCH, later 2009 Sale of remaining Entel shares (2.9%) created. acquiring 51.2% of Banco de A. Edwards and 8% of Banco de Chile. 2010 Quiñenco divests Telsur. 1960’s Socie
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$2.0 billion in profits over the last 16 years from divestments of US$4.7 billion 837(1) 2,002 1,078 68 (12) (13) 44 Telecom Telecom Minoristas Retail Inmobiliarios Real Estate Alimentos y
Slide 13: Strong Growth in NAV
Strong Growth in NAV Over the past 10 years, the net value of Quiñenco’s assets has multiplied by 10 times, growing at an average compound annual rate of 26.2% Quiñenco - NAV (MUS$) (1) 6,858 CAGR(2) (1) 6,237 2002 – 2012 5,789 Quiñenco’s 5,137 (1) NAV 26.2% IPSA 13.8% 3,071 3,275 2,721 1,989 2,028
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 19% Financial Services Deposits 1 17% Beer Chile 1 79% 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$ 4.8 billion as of September 30, 2013) (
Slide 16: NAV & Share Price Trend
NAV & Share Price Trend NAV/Share Price Trend as of September 30, 2013 3,000 2,448 2,509 2,500 2,363 2,339 2,194 2,000 1,500 1,540 1,610 1,399 1,000 1,315 1,275 500 0 Sep- 12 Dec- 12 Mar- 13 Jun- 13 Sep- 13 NAV per share (CH$) Share price (CH$) Note: Market information and book values as of Septembe
Slide 17: Diversified Revenues and Results (2012)
Diversified Revenues and Results (2012) Quiñenco has achieved diversified revenues and results, thus generating stable cash flows Aggregate Revenues by Sector (1) Net Income (2) (YTD December 2012) (YTD December 2012, MUS$) Transport Financial Services 28% 23% 290.9 226.0 CCU 29.5 50.1 SM SAAM Port
Slide 18: Diversified Revenues and Results (YTD September 2013)
Diversified Revenues and Results (YTD September 2013) Quiñenco has achieved diversified revenues and results, thus generating stable cash flows Aggregate Revenues by Sector (1) Net Income (2) (YTD September 2013) (YTD September 2013, MUS$) Port & Shipping Serv. 4% Financial Services 23% Transport 26
Slide 19: Stable Dividend Cashflow
Stable Dividend Cashflow Good operating company performance allows a strong dividend flow to the parent company YTD September 2013 Dividends Composition SM Madeco of Dividends 4% SAAM (MUS$) 11% (YTD March 2012) CCU Banco 30% de 302 Chile 13% 213 Banchile Vida 155 42% 94 99 Average 2009-2013 LQIF CS
Slide 20: Quiñenco – Strong Fundamentals
Quiñenco – Strong Fundamentals Dominant position Quiñenco’s companies are leaders in their respective markets. in its markets Proven track record in value Holding has proven track record in value creation as evidenced by sale of creation investments for approximately US$ 4.7 bln and gains on sale of
Slide 21: Recent Events
Quiñenco Recent Events Financial Main Operating Conclusions Overview Overview Companies 21
Slide 22: 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$350 billion (appr
Slide 23: Recent Events: Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • On November 8, 2013, Banco de Chile announced its results for the third quarter of 2013: ̶ Leadership in net income, profitability and loans in the Chilean financial system. ̶ Lowest ratio of cost-income of 42.7% among its pe
Slide 24: Recent Events: Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • On September 11, 2013, Sociedad Matriz SAAM S.A. announced that its subsidiary SAAM signed an association agreement with Boskalis Holding B.V., holding of the tug boat company SMIT, the second player worldwide in said industr
Slide 25: Financial Overview
Quiñenco Recent Events Financial Overview Main Operating Conclusions Overview Companies 25
Slide 26: Sound Results
Sound Results Quiñenco has reported increasing revenues and strong bottom line results Revenues(1) Net Income(2) (MUS$) (MUS$) 5,575 578 4,728 4,278 3,747 2,503 308 277 2,097 206 174 175 2009 2010 2011 2012 Sep-12 Sep-13 2009 2010 2011 2012 Sep-12 Sep-13 Quiñenco started reporting in accordance with
Slide 27: Quiñenco Holding: Conservative Financial Structure
Quiñenco Holding: Conservative Financial Structure Long term investments are financed with equity and long term debt in Chilean pesos Assets Liabilities and Equity US$ 5.0 billion as of September 2013 US$ 5.0 billion as of September 2013 Cash Other 3% 4% ST Debt Other Liabilities 1% 2% LT Debt 16% S
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$ 812 437 242 125 -1,084 2009 2010 2011 2012 Sep-13 MUS$ 2009 2010 2011 2012 Sep-13 Debt 331 339 755(1) 882 1,106 Cash -205 -1,423 -318 -640 -294 Net Debt 125 -1,084
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 2012 the bank’s net operating revenues grew 9.7%, based on higher loans to customers and ROAE a higher balance of demand deposits and current accounts, mitigated by higher loan provisions. YTD Sep 2013, this positive trend continued. 27.0% 24.7% 25.4% 22.7% 23.2% 22.5% • Net inco
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$2.8 billion. venture with Nestlé S.A. • Over 6,400 employees. •
Slide 33: CCU
CCU • Sales grew by 10.9% in 2012 to MUS$2,133. YTD Sep 2013 continued with strong growth of 10.9%. EBITDA by Business Segment September 2013 • EBITDA was MUS$468 in 2012 decreasing by 1.9% Spirits Other from 2011. However, as of September 2013 Wine 4% 4% EBITDA grew by 6.9%, based mostly on the non
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. • 25,000
Slide 36: Madeco
Madeco • Madeco is a regional leader in flexible packaging, and a relevant actor in brass mills and profiles. • 12 plants in Chile, Argentina, Peru and Colombia. • Over 2,900 employees. • Annual sales volume of 60,000 tons. • In October 2103, Madeco closed its subsidiary of brass mills in Argentina
Slide 37: Invexans/Madeco
Invexans/Madeco • In 2012 operating income and net income include a gain related to negative goodwill arising from the accounting Sales method of the investment in Nexans. Invexans: Madeco (historical) Invexans Madeco (newco) • YTD Sep 2013, Invexans’ net income mainly reflects its 437 423 418 propo
Slide 38: Enex
Enex • Enex S.A. has a network of 448 service stations, Market Share of Liquid Fuel Sales with 122 convenience stores. (December 2012) • Main business activities: - Distribution of fuels through its service Others stations. 7% Petrobras - Distribution of fuels to industrial clients and 13% transport
Slide 39: Enex
Enex • Sales in 2012 reached MUS$2,659, mainly corresponding to fuels, followed by lubricants, asphalts, Sales chemical products, and services. Sales in 2011 include (MUS$) only seven month’s results, after acquisition at the end 2,659 of May. During 2013 sales have continued growing at a 2,450 stro
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 2012 CSAV’s sales reached MUS$3,432, 28.4% Sales below 2011, as a result of the restructuring plan (MUS$) implemented in 2Q 2011. YTD Sep 2013 sales diminished due to a lower sales volume. 5,215 • Net income in 2012 was a loss of MUS$314, 4,796 improving 74.9% with respect to 2011. This re
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 • YTD 2013, SM SAAM’s consolidated sales Sales reached MUS$358, up 8.0% over the last (MUS$) quarter, reflecting improved performance in SAAM SM SAAM tug boats and ports. 426 448 • SM SAAM obtained net income of MUS$58 YTD 361 358 Sep 2013, 48.3% higher than the previous 332 278 period based
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