Inversiones La Construccion SA · BCS:ILC
Inversiones La Construccion SA — ILC Inversiones — Santander 14th Latam Conference – London (May 2016)
40 slides from Inversiones La Construccion SA's conference presentation, May 2016
Slide 1: Company Overview – ILC
Estrictamente Privado y Confidencial COMPANY OVERVIEW – ILC Presentation Prepared for Santander 14th Latam Conference – London Ignacio González - CFO May 2016 Privado y Confidencial 1
Slide 2: ILC: Who We Are
Estrictamente Privado y Confidencial ILC: WHO WE ARE Mission: We aim to improve the quality of life of our clients, by offering them efficient and accessible services, mainly in the financial and health industries; favoring the creation of value, efficiency and sustainability, guided by the values o
Slide 3: ILC is an important Chilean group focused on financial and health industries
Estrictamente Privado y Confidencial ILC IS AN IMPORTANT CHILEAN GROUP, FOCUSED ON THE FINANCIAL AND HEALTH INDUSTRIES Consolidated Net Income 2015: Market Capitalization (as of April 30th): US$105 million US$1.2 billion Δ+ 5% over 2014 AuM 2015: Local Risk Rating: US$48 billion AA+ in AFP Habitat a
Slide 4: 1. High quality group, focused on non-discretionary industries
Estrictamente Privado y Confidencial 1. High quality group, focused on non-discretionary industries Privado y Confidencial 4
Slide 5: ILC's track-record supported by solid competitive position
Estrictamente Privado y Confidencial ILC’S TRACK-RECORD IS SUPPORTED BY A SOLID COMPETITIVE POSITION IN THE SECTORS WHERE IT PARTICIPATES FINANCIAL • Consalud: #2 Mandatory health insurance in Chile in terms of contributors and #3 in terms of beneficiaries • AFP Habitat: #2 Pension fund company in C
Slide 6: ILC participates in non-discretionary sectors, providing steady cash flow
Estrictamente Privado y Confidencial ILC PARTICIPATES IN NON-DISCRETIONARY SECTORS, WHICH PROVIDES STEADY CASH FLOW Non- Insurance Sector Insurance Sector Industry Pension Funds Mandatory Healthcare Banking Life Insurance Supplemental Health Insurance Health Insurance Ownership 67.5%* 99.9% 75.5%* 9
Slide 7: 2. Strategical expertise in realizing value
Estrictamente Privado y Confidencial 2. Strategical expertise in realizing value Privado y Confidencial 7
Slide 8: ILC actively manages its assets to increase their value
Estrictamente Privado y Confidencial ILC ACTIVELY MANAGES ITS ASSETS TO INCREASE THEIR VALUE, ALWAYS ORIENTED TO ITS LONG TERM VISION ILC utilizes its knowledge in the financial and health industries through a strategy focused in: Market Opportunities 1 • ILC adds value in its subsidiaries through a
Slide 9: ILC's main milestones
Estrictamente Privado y Confidencial ILC ACTIVELY MANAGES ITS ASSETS TO INCREASE THEIR VALUE, ALWAYS ORIENTED TO ITS LONG TERM VISION ILC’s main milestones: YEAR CO M PANY INDUS TRY ACTIO N DES CRIPTIO N 1980 Creatio n ILC starts operations 1981 Pension Funds Creatio n AFP Habitat starts operations
Slide 10: Example of value creation: growing Inversiones Confuturo
Estrictamente Privado y Confidencial EXAMPLE OF VALUE CREATION: GROWING INVERSIONES CONFURUTO • ILC entered the life insurance industry in 2013, through the acquisition of 67% of Inversiones Confuturo (former Corp Group Vida Chile) • In May 2016, after three capital increases, ILC signed a MoU to ac
Slide 11: Experienced board and management across the company
Estrictamente Privado y Confidencial ILC’S VALUE GENERATION IS LED BY AN EXPERIENCED BOARD AND MANAGEMENT ALL ACROSS THE COMPANY BOARD OF DIRECTORS - ILC Jorge Mas F. Daniel Hurtado P. Sergio Torretti C.* Gastón Escala A. Lorenzo Constans G.* Alberto Etchegaray A. René Cortázar S.* Chairman Vice Cha
Slide 12: Strict corporate governance standards
Estrictamente Privado y Confidencial BEING A HIGH QUALITY GROUP THAT ADDS VALUE REQUIRES STRICT CORPORATE GOVERNANCE STANDARDS • The Company is controlled by the Chilean Construction Chamber, a non-profit social entity, which annually elects 6 of the 7 directors of ILC during its Shareholders’ Meeti
Slide 13: 3. Generating shareholder value through disciplined capital management
Estrictamente Privado y Confidencial 3. Generating shareholder value through disciplined capital management Privado y Confidencial 13
Slide 14: ILC's value generation results in attractive dividend yield
Estrictamente Privado y Confidencial ILC’S VALUE GENERATION RESULTS IN AN ATTRACTIVE DIVIDEND YIELD Since its IPO, ILC has distributed a dividend yield close to 6% annually ILC has a dividend policy that distributes between 60% to 80% of its Distributable Net Income (Ordinary net income – Profitabil
Slide 15: ILC has delivered consistent returns during the last decade
Estrictamente Privado y Confidencial ILC HAS DELIVERED CONSISTENT RETURNS DURING THE LAST DECADE ILC’s added value is reflected in returns and both ordinary and extraordinary net income ILC’s Net Income (M US$) and ROE 39% Ordinary Income (MUS$) Extraordinary Income (MUS$) ROE 32.1% 34% 29% 22.4% 24
Slide 16: Disciplined capital management recognized by rating agencies
Estrictamente Privado y Confidencial ILC’S DISCIPLINED CAPITAL MANAGEMENT HAS BEEN RECOGNIZED BY RATING AGENCIES Total Debt Net Debt Total Debt (ILC): Total Cash (ILC): (Consolidated): (Consolidated): US$ 444 million US$ 94 million US$ 1,385 million US$ 937 million ILC’s Amortization Schedule as of
Slide 17: 4. Core business in financial services offers steady cash flow
Estrictamente Privado y Confidencial 4. Core business in financial services offers steady cash flow & operational know-how Privado y Confidencial 17
Slide 18: Chilean pension industry should grow due to demographic and economic factors
Estrictamente Privado y Confidencial CHILEAN PENSION INDUSTRY SHOULD GROW DUE TO DEMOGRAPHIC AND ECONOMIC FACTORS Population in age to work / retired (Th.) Retirement Alternatives Comparison Programmed Annuity Withdrawal 2,499 3,049 1,738 2,075 Pension Payment Period Limited Unlimited From the insur
Slide 19: AFP Habitat: established company expanding into Peru
Estrictamente Privado y Confidencial AFP HABITAT: ESTABLISHED COMPANY WITH A SOLID MARKET POSITION AND PERFORMANCE, EXPANDING INTO PERU • Since 2016 ILC is associated with Prudential Financial Inc. in AFP Habitat, maintaining 40.3% of the property each • AFP Habitat is consolidating its position in
Slide 20: AFP Habitat: established company expanding into Peru
Estrictamente Privado y Confidencial AFP HABITAT: ESTABLISHED COMPANY WITH A SOLID MARKET POSITION AND PERFORMANCE, EXPANDING INTO PERU Affiliates & Market Share AFP Habitat Peru SG&A over AuM in Peru 1° Auction new affiliates into Auction 16,000 2° 800,000 11.3% 12 .0 % Integra 14,000 the Peruvian
Slide 21: Inversiones Confuturo: annuity market leader in Chile
Estrictamente Privado y Confidencial INVERSIONES CONFUTURO: CONSOLIDATING ITS FOOTPRINT AS AN ANNUITY MARKET LEADER IN CHILE • The Company aims to strengthen its operational and financial performance in the annuity market, being a good alternative to the programmed withdrawal retirement Annuity Mark
Slide 22: Banco Internacional: focused on generating market returns
Estrictamente Privado y Confidencial BANCO INTERNACIONAL: FOCUSED ON GENERATING MARKET RETURNS • ILC controls Banco Internacional, Factoring Baninter and Baninter Corredora de Seguros since October 2015 • Banco Internacional has a global market share of 0.6% and 0.9% in terms of total and commercial
Slide 23: 5. Health care operation in under-penetrated market
Estrictamente Privado y Confidencial 5. Health care operation present in under-penetrated market offers higher profitability upside Privado y Confidencial 23
Slide 24: Chilean demand for healthcare should increase
Estrictamente Privado y Confidencial CHILEAN DEMAND FOR HEALTHCARE SHOULD INCREASE DUE TO ECONOMIC DEVELOPMENT AND LIFESTYLE 9000 Per capita health expenditure (US$/hab.) United States 8000 7000 Switzerland 6000 2X Norway Netherlands 5000 Germany Sweden Belgium Austria 4000 France CanadaDenmark Nuev
Slide 25: Chile lacks health infrastructure and specialists compared to developed countries
Estrictamente Privado y Confidencial CHILE PRESENTS A LACK OF HEALTH INFRAESTRUCTURE AND SPECIALISTS COMPARED TO OTHER DEVELOPED COUNTRIES Doctors (Every 1,000 habitants) Nurses (Every 1,000 habitants) 11.14 3.81 3.27 9.09 2.56 2.16 1.88 1.84 5.63 5.14 2.62 1.49 Beds (Every 1,000 habitants) MRI Equi
Slide 26: Red Salud: one of the largest Chilean healthcare networks
Estrictamente Privado y Confidencial RED SALUD IS ONE OF THE LARGEST CHILEAN HEALTHCARE NETWORKS, WITH 11 HOSPITALS AND 31 OUTPATIENT CENTERS Occupancy Rate Revenues (M US$) and EBITDA Margin Main Focus for 2016 12% 16 0 14 % 12% 12% 14 0 • Red Salud’s operational performance has MEGASALUD 12 % 9% O
Slide 27: Mandatory and supplemental health insurance through Consalud and Vida Cámara
Estrictamente Privado y Confidencial ILC PROVIDES MANDATORY AND SUPPLEMENTAL HEALTH INSURANCE THROUGH CONSALUD AND VIDA CAMARA • Consalud has been impacted by a pronounced deterioration in margins due to a higher frequency and cost per beneficiary Market Share (Contributors) Direct costs / Revenues
Slide 28: 6. Multiple avenues for consolidation & growth
Estrictamente Privado y Confidencial 6. Multiple avenues for consolidation & growth Privado y Confidencial 28
Slide 29: ILC's strategy for 2015-2016
Estrictamente Privado y Confidencial ILC’S STRATEGY FOR 2015-2016 IS BASED ON: 1. Strengthening and capitalizing its subsidiaries 2. Improve efficiency and scale 3. Regional growth in those industries were the Company has a consolidated track-record 4. Operational development under sustainability pr
Slide 30: ILC has several opportunities based on 2015-2016 focuses
Estrictamente Privado y Confidencial BASED ON 2015-2016’S FOCUSES, ILC HAS SEVERAL OPPORTUNITIES: AFP Habitat: Inversiones Confuturo: Maintain its leadership in the growing Consolidate its association with Prudential annuity industry Further improve returns on investments, Strengthen its regional fo
Slide 31: Closing Remarks
Estrictamente Privado y Confidencial Closing Remarks Privado y Confidencial 31
Slide 32: Investment Highlights
Estrictamente Privado y Confidencial INVESTMENT HIGHLIGHTS One of the largest Asset Consolidated controlling Managers in Latam shareholder Demonstrated track- Solid and stable credit record in non- risk rating discretionary industries Proven access to Attractive and capital markets consistent divide
Slide 33: Appendix
Estrictamente Privado y Confidencial Appendix: Summarized Financial Statements / Industries where ILC participates at a glance Privado y Confidencial 33
Slide 34: Summarized financial statements and subsidiaries figures
Estrictamente Privado y Confidencial SUMMARIZED FINANCIAL STATEMENTS AND SUBSIDIARIES FIGURES B alance S heet I nco me S tatement Th. US $ 2015 2014 V ariatio n Th. US $ 2015 2014 V ariatio n NON-I NS UR ANCE ACTI V I TY AS S E TS NON-I NS UR ANCE ACTI V I TY Total Current Assets 1,975,490 310,865 5
Slide 35: ILC is focused on sectors that provide steady cash flow
Estrictamente Privado y Confidencial ILC IS FOCUSED ON SECTORS THAT PROVIDE STEADY CASH FLOW Pension Funds Pensions Health Insurance Healthcare Providers 10% Mandatory contribution: 1.27% of gross salary Voluntary Savings Mandatory contribution 7% GROSS SALARY Voluntary additional contribution 0% -
Slide 36: Chilean pension funds represented 71% of GDP
Estrictamente Privado y Confidencial IN 2015 CHILEAN PENSION FUNDS REPRESENTED 71% OF TOTAL GDP 1 2 3 4 5 6 Market Players (100% private) Fee 1.27% 0.77% 1.44% 1.48% 1.54% 0.47% (% on gross salary, capped at US$2,642) Taxable US$ 1,593 US$ 888 US$662 US$809 US$797 US$642 Income (Average, US$) Affili
Slide 37: 97% of Chilean population covered by health insurance
Estrictamente Privado y Confidencial 97% OF CHILEAN POPULATION IS COVERED BY HEALTH INSURANCES, OF WHICH 75% IS MANAGED BY THE PUBLIC SECTOR (FONASA) Supporter (7% on taxable salary, capped at aprox US$3,000; with Government an average contribution of 10% in the case of Isapres) Insurer Isapre Fonas
Slide 38: Private healthcare system plays important role in Chilean health demand
Estrictamente Privado y Confidencial THE PRIVATE HEALTHCARE SYSTEM PLAYS AN IMPORTANT ROLE TO MEET CHILEAN DEMAND FOR HEALTH Total Health Expenditure Doctors Geographic Distribution of Hospitals and Clinics 8.8% of GDP ~ 30 thousands Doctors in Chile ~ 350 Others 8.6% Public Public Public Geriátric
Slide 39: ILC participates in the life insurance industry, focusing on annuities
Estrictamente Privado y Confidencial ILC PARTICIPATES IN THE LIFE INSURANCE INDUSTRY, FOCUSING ON ANNUITIES Life Insurances General Insurances Direct premiums: BUS$7.2 Direct premiums : BUS$3.3 36 companies 30 companies Fire 12% Traditional (Collective) Pension Others Natural BUS$0.7 BUS$4.3 Disaste
Slide 40: Disclaimer and Contact Information
Estrictamente Privado y Confidencial Disclaimer: This document provides information about ILC Inversiones S.A. In any case this constitutes a comprehensive analysis of the financial, operational and sales situation of the Company, so to evaluate whether to purchase or sell securities of the Company,
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