Inversiones La Construccion Sa · BCS:ILC
Inversiones La Construccion Sa — Q1 2024 Earnings Presentation
40 slides from Inversiones La Construccion Sa's earnings presentation, May 29, 2024
Slide 1: Conference Call 1Q-2024
Conference Call 1Q - 2024 /2024MAY MAY /2024 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 MAY /2024 3
Slide 4: Chapter: Context
Chapter Context 01 MAY /2024 4
Slide 5: 1Q-2024: Macroeconomic Context
1Q-2024: MACROECONOMIC CONTEXT IPSA AND S&P500 QUARTERLY RETURNS FORMAL EMPLOYMENT RATE % % IPSA S&P 500 72.6% 72.8% 73.3% 72.5% 71.9% 11.2% 10.2% 8.7% 8.3% 7.0% 6.2% 7.3% 1.2% 0.8% -3.6% 1Q23 2Q23 3Q23 4Q23 1Q24 1Q23 2Q23 3Q23 4Q23 1Q24 CHILE QUARTERLY CPI MONETARY POLICY RATE (MPR) % EoP, % 1.8% 1
Slide 6: Advances in Regulatory Changes
ADVANCES IN REGULATORY CHANGES HEALTHCARE SYSTEM CONTEXT NEXT STEPS • In April 2020, the Regulator (Circ. 343) established a single Factors Table that eliminates gender discrimination for new beneficiaries • In December 2022, the Supreme Court ruled that all contracts must be • Establishment of the
Slide 7: Chapter: 2024 Milestones & Consolidated Results
Chapter 2024 Milestones & 02 Consolidated Results MAY /2024 7
Slide 8: 2024 Milestones
2024 MILESTONES 1. ANNUAL ORDINARY SHAREHOLDERS' MEETING 2024 On April 25th, the Annual Shareholders' Meeting elected new members of the board (5 non-independent members and 2 independent members). Approval of a final dividend of Ch$450 per share charged to 2023 profit, in addition to the interim di
Slide 9: Our Fundamental Pillars to Achieve Consistency
OUR FUNDAMENTAL PILLARS TO ACHIEVE GROWTH CONSISTENCY ESG PROFITABILITY Our Purpose: Be leaders in the construction of social and economic value that improves people's quality of life STRONG FLEXIBILITY FINANCIAL POSITION MAY /2024 9
Slide 10: Consistent Returns Over Time
CONSISTENT RETURNS OVER TIME PROFIT AND ROAE ILC(1) 18.3% 13.8% 12.0% 12.0% 10.8% 10.6% 17.0% 19.6% 21.4% Ch$ bn. Recurring Profit Extraordinary Profit 12.3 207.0 182.6 +69.9% 146.6 129.4 90.3 91.0 86.5 88.4 59.3 34.9 2017 2018 2019 2020 2021 2022 2023 Mar-2024 1Q23 1Q24 LTM 2017 – 2022: Growth, Div
Slide 11: 1Q-2024 Results Executive Summary
1Q - 2024 RESULTS EXECUTIVE SUMMARY ILC PROFIT BREAKDOWN CLP bn. 3M24 PROFIT CONTRIBUTION PER DIVISION 1Q24 VS 1Q23 Banco Internacional 9.9 3.4 Ch$ bn. 8.7 7.6 59.3 Confuturo 24.4 16.2 1.6 22.6 Pensions(1) (2.4) (12.3) Red Salud 4.2 34.9 1.5 Consalud (5.2) Vida Cámara 2.3 Vivir Seguros 7.3 ILC Stand
Slide 12: Chapter: Zoom-in by Division
Chapter Zoom-in by 03 Division MAY /2024 12
Slide 13: Banking
MAY 1/2024 Banking © Banco . Internacional iKC
Slide 14: Outpacing the Industry with Room to Grow
OUTPACING THE INDUSTRY WITH ROOM TO GROW TOTAL LOANS YOY GROWTH % 40% Banco Internacional Industry Banco Internacional 30% Mar. 2024 21.9% US$ 3.6 bn. 20% 10% 6.5% Industry Mar. 2024 – US$ 275.3 bn. (10%) Mar/20 Sep/20 Mar/21 Sep/21 Mar/22 Sep/22 Mar/23 Sep/23 Mar/24 BANCO INTERNACIONAL LOAN MIX 1Q2
Slide 15: Improved Results Due to Growth in Commercial and Consumer Loans
IMPROVED RESULTS DUE TO GROWTH IN COMMERCIAL AND CONSUMER LOANS NET INTEREST INCOME (NIM) TREASURY RESULT GROSS OPERATING RESULT Ch$ bn. Ch$ bn. Ch$ bn. +126.5% -93.2% +60.4% 40.6 8.5 50.7 18,1% 31.6 18.0 81,9% 0.6 1Q23 1Q24 1Q23 1Q24 1Q23 1Q24 Banco Internacional EFFICIENCY RATIO(1) OPERATING EXPEN
Slide 16: Higher Risk Expenses Partially Explained by Autofin Consolidation
HIGHER RISK EXPENSES PARTIALLY EXPLAINED BY ITS CONSOLIDATION WITH AUTOFIN RISK EXPENSES Ch$ bn. Commercial Consumer • Risk expenses increased by Ch$8.1 bn due to 0.8 1.0 higher provisions for commercial and consumer (0.3) (4.0) loans portfolio (impacted by consolidation of (3.4) Autofin) (7.4) 1Q23
Slide 17: Sustained Growth in Profit
SUSTAINED GROWTH IN PROFIT BANCO INTERNACIONAL PROFIT & ROAE Ch$ bn. Profit ROAE • BI increased its profit by Ch$2,3 bn 18.2% 18.3% primarily due to higher interest and 15.8% net adjustments income, partially 18.9% 12.7% 13.0% +18.4% offset by reduced income from 14.9% 55.4 57.7 47.5 financial opera
Slide 18: Annuities
MAY 1/2024 Annuities confuturo: iKC
Slide 19: Recovery of the Annuity Industry
RECOVERY OF THE ANNUITY INDUSTRY ANNUITY RATE VS PROGRAMED WITHDRAWAL RATE Rate (%) March 2024: 5% 4.71% 4% 3% March 2024: 2% 3.24% 1% - 2018 2019 2020 2021 2022 2023 2024 Programed Withdrawal Rate Annuity Rate % ANNUITY VS PROGRAMED WITHDRAWAL PREFERENCE 100% March 2024: 75% 48.5% 50% March 2024: 5
Slide 20: Higher Quarterly Annuity Premium Income
HIGHER QUARTERLY ANNUITY PREMIUM INCOME CONFUTURO’S QUARTERLY ANNUITY PREMIUMS CONFUTURO’S MONTHLY ANNUITY PREMIUMS UF MM UF MM 13.3% 13.1% 15.0% 13.1% +9.2% 3.5 11.4% 3.2 7.6% 7.0% 4.2% 1.2 1.3 1.0 1.1 0.7 0.6 1Q20 1Q21 1Q22 1Q23 1Q24 January 2024 February 2024 March 2024 Confuturo's Premium Confut
Slide 21: Higher Investment Returns Mainly Attributed to Equity Investment
HIGHER INVESTMENT RETURNS MAINLY ATTRIBUTED TO EQUITY INVESTMENT CONFUTURO INVESTMENT RESULT Excluding CUI +38.5% +34.0% 5.3 136.2 8.4 2.4 • Investment result grew by Ch$ bn. 11.0 (0.2) 4.0 3.7 38.5% QoQ (excluding CUI), 101.6 reaching Ch$136.2 billion. This increase was mainly due to better results
Slide 22: Higher Results Mainly Attributed to Better Investment Portfolio Returns
HIGHER RESULTS MAINLY ATTRIBUTED TO BETTER INVESTMENT PORTFOLIO RETURNS CONFUTURO PROFIT & ROAE Ch$ bn. 26.7% 26.0% • Higher annuity premium income, together with 15.0% improved investment portfolio 12.1% 133.1 12.4% 122.7 +108.1% returns boosted results 8.4% 84.4 6.0% 70.0 51.8 38.0 28.3 27.6 13.3
Slide 23: Pensions
MAY 1/2024 Pensions wiper Coorenas Gos iKC
Slide 24: Improved Results with Higher Taxable Income and Legal Reserve Returns
IMPROVED RESULTS IN LINE WITH HIGHER AVERAGE TAXABLE INCOME AND ENHANCED LEGAL RESERVE RETURNS REVENUES TAXABLE INCOME PER 2nd CONTRIBUTORS 3rd CONTRIBUTOR Ch$ bn. Ch$ Th. Th. of People +3.7% +8.1% -3.6% 60.4 62.7 1,316.4 1,422.6 1,002 961 • The average taxable income of AFP Habitat Chile contributo
Slide 25: Stable Profit Over Time
STABLE PROFIT OVER TIME AFP HABITAT PROFIT EVOLUTION Ch$ bn. • Better result was mainly explained by higher +77.7% returns on legal reserves 152.0 due to good performance 135.1 128.7 129.9 131.6 108.8 of financial markets 90.9 46.6 26.2 2018 2019 2020 2021 2022 2023 2024 LTM 1Q23 1Q24 MAY /2024 Sour
Slide 26: Higher Revenues in AFP Habitat Peru and Colfondos
HIGHER REVENUES IN AFP HABITAT PERU AND COLFONDOS REVENUES REVENUES(1) PEN MM COP bn. +7.3% +21.2% 37.7 84.1 69.4 35.1 • Revenues increase by 1Q23 1Q24 1Q23 1Q24 • Revenues from 7.3% compared to 1Q23, LEGAL RESERVE RETURNS LEGAL RESERVE RETURNS mandatory pension fees primarily due to a higher saw a
Slide 27: Health
MAY 1/2024 QD VIDACAMARA iKC
Slide 28: More Complex Mix Drove Higher Revenues
MORE COMPLEX MIX DROVE HIGHER REVENUES REDSALUD OUTPATIENT AND DENTAL ACTIVITY INDICATORS REVENUES BY CENTER TYPE MEDICAL EXAMS DENTAL OUTPATIENT AND CONSULTATION CONSULTATIONS DENTAL CENTERS MM MM Th. Ch$ bn. +5.2% -8.8% -2.7% +1.1% 53.8 56.6 1.3 1.2 2.5 2.5 21.0 21.3 1Q23 1Q24 HOSPITALS OF 1Q23 1Q
Slide 29: EBITDA Grew Due to More Complex Inpatient Mix and Efficiency
EBITDA GREW MAINLY DUE TO A MORE COMPLEX INPATIENT MIX AND HIGHER EFFICIENCY Ch$ bn. 4.8 0.1 20.6 1.7 (0.3) 14.3 • EBITDA growth was mainly due to greater efficiency and EBITDA 1Q23 Outpatient and Hospitals of Regional Hospitals Others EBITDA 1Q24 RedSalud Dental Centers Metropolitan Region RedSalud
Slide 30: 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% 18% 20% 25% 23% 22% • Public insurer Fonasa is 28% 37% 45% increasing its relevance in the 27% 36% 41% 40% 46% revenue breakdown, reaching a 46% sha
Slide 31: EBITDA Sustained High Level with Better Inpatient Mix
EBITDA SHOWED A SUSTAINED HIGH LEVEL, ACCOMPANIED BY A BETTER MIX IN THE INPATIENT SEGMENT REDSALUD’S EBITDA AND EBITDA MARGIN Ch$ bn. EBITDA EBITDA Margin +294 bps 13.3% • RedSalud continues to face 12.2% 11.9% 11.5% high demand for hospital and 11.2% 10.8% 10.6% outpatient services. During 9.0% 7.
Slide 32: Isapres Industry Has Reduced Its Number of Beneficiaries
THE ISAPRES INDUSTRY HAS REDUCED ITS NUMBER OF BENEFICIARIES OVER THE PAST FOUR YEARS ISAPRES BENEFICIARIES % CONSALUD MARKET SHARE MM of People 21.3% 21.5% 21.7% 21.5% 20.9% 20.2% 19.0% 19.0% • Industry beneficiaries decreased by 9.5% QoQ. Meanwhile, the number of Consalud beneficiaries 3.3 3.3 3.3
Slide 33: Lower Revenues Due to GES Fee Adjustment
LOWER REVENUES MAINLY DUE TO GES FEE ADJUSTMENT, PARTIALLY OFFSET BY LOWER MEDICAL COSTS CONSALUD’S REVENUES AND COST BREAKDOWN Ch$ bn. $172.7 -14.3 % $161.2 $148.0 45% • Revenue decreased by 23.1% 35% -16.3 % 44% QoQ mainly explained by a 30% 14.5% drop in the average -6.9 % 32% 30% number of benef
Slide 34: Higher Result in Health Insurance Driven by Beneficiary Growth
HIGHER RESULT IN HEALTH INSURANCE DRIVEN BY GROWTH IN BENEFICIARIES VIDA CAMARA LOSS RATIO 9% Outpatient 86.5% 81.5% 89.3% 84.9% 87.3% 89.0% 78.7% 68.1% 22% Inpatient 1Q24 48% Medicines 21% Dental 2018 2019 2020 2021 2022 2023 1Q23 1Q24 VIDA CÁMARA BENEFICIARIES Th. People • Vida Cámara's contributi
Slide 35: Chapter: Financial Position
Chapter Financial Position 04 MAY /2024 35
Slide 36: Well-Managed Debt Maturity and Liquidity Position
WELL-MANAGED DEBT MATURITY AND LIQUIDITY POSITION INDIVIDUAL ILC LEVERAGE RATIO LIQUIDITY POSITION (MAR-2024) % 144A-Reg S 0,60x 39.9% 0,37x 0,37x 0,39x 0,36x 0,35x 0,33x 0,33x 0,33x 0,32x 0,31x Ch$ Investment 2461.3 bn. Portfolio 32.5% Dec. 2021 Sep. 2022 Jun. 2023 Mar. 2024 Covenant Individual Net
Slide 37: Outperforming IPSA YTD
OUTPERFORMING IPSA YTD ILC STOCK PRICE VS IPSA INDEX ILC IPSA • Stock return: +30.3% 8,249 • Dividends: +7.1% 6,776 • Index return: 9.3% 6,330 6,198 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 MAY /2024 Closing Price: May 24th, 2024 Source: Bolsa de Comercio de Santiago 37
Slide 38: Chapter: Wrap-up and Conclusions
Chapter Wrap-up and 05 Conclusions MAY /2024 38
Slide 39: Wrap-Up and Conclusions
WRAP-UP AND CONCLUSIONS o Better results mainly due to the growth of its commercial loan portfolio and the consolidation of Autofin. o The annuity market continues to grow o Higher investment result mainly explained by Local and Foreign Investment Funds o Better performance in financial markets cont
Slide 40: Conference Call 1Q-2024
Conference Call 1Q - 2024 /2024MAY MAY /2024 40
Inversiones La Construcción S.A. (ILC) — Q1 2024 Earnings Presentation on 6ix