Grupo De Inversiones Suramericana S.a. · BVC:GRUPOSURA
Grupo De Inversiones Suramericana — Q2 2023 Earnings Presentation
28 slides from Grupo De Inversiones Suramericana's earnings presentation, August 2023
Slide 1: Quarter Results Presentation Grupo SURA 2Q-2023
Quarter Results Presentation Grupo SURA 2Q - 2023
Slide 2: Disclaimer
The forward-looking statements contained herein are based on Management’s current forecasts and outlook, which have been made under assumptions and estimates of the management of the Companies and may present variations. For better illustration and decision-making, figures for Suramericana, SURA Ass
Slide 3: Language selection
Selección de idioma Language selection Para cambiar de idioma haga clic en icono de su preferencia. To change the audio language click the icon.
Slide 4: Execution of the divestment of its stake in the food business of Grupo Nutresa
In order to be able to execute the divestment of its stake in the food business of Grupo Nutresa On June 28, after obtaining the pertinent corporate authorizations, the Board of Directors approved moving 1 forward with the execution of the Framework Agreement. As of this quarter and as the transacti
Slide 5: Operating income continues to show strength
Operating income continues to show strength With a good performance of the results of the investment portfolio, impacted by the deferred tax associated with Nutresa TOTAL REVENUES OPERATING PROFIT +32% +54% 2,593 19,110 14,434 1,681 Jun 22 Jun 23 Jun 22 Jun 23 CONTROLLING NET INCOME CONTROLLING NET
Slide 6: Contribution of investments to net income continues to increase
Contribution of investments to net income continues to increase With companies in the financial sector contributing 84% and growing 42% vs. June 2022 DISTRIBUTION OF THE CONTRIBUTION TO THE NET INCOME OF THE PORTFOLIO Post-closing events JUNE 2023 Var% as of june 2023 Financials Industrials Surameri
Slide 7: Suramericana
Suramericana 2T - 2023
Slide 8: Net income for the first half of the year increased 82%
Net income for the first half of the year increased 82%. Leveraged by double-digit premium growth and improved investment income PREMIUMS* & RETAINED CLAIMS.** (%) TECHNICAL RESULT -11% 73% 74% 70% 72% 76% 80% Op. Expenses ratio*** +14% VS -25% 748 7,943 2T22 664 7,574 60% 6,855 7,018 12.2% 6,663 34
Slide 9: Life segment net income grew 37% in the quarter
Life segment net income grew 37% in the quarter Explained by double-digit growth in premiums and investment returns offsetting higher long-term reserve build-up RETAINED EARNED UNDERWRITTING PROFIT & INVESTMENT NET INCOME PREMIUMS (%) INCOME +36% +15% 1,927 +37% 1,678 498 219 367 160 (224) (342) +53
Slide 10: Claims and combined ratio of the Non-life segment continues to improve
Claims and combined ratio of the Non-life segment continues to improve Reflecting the increase in tariffs and focus on profitability of mobility solutions, which, together with higher investment income, explain the growth in net income. PREMIUMS COMBINED RATIO / RETAINED NET INCOME 3,211 EARNED PREM
Slide 11: Health Care segment shows loss for the quarter
Health Care segment shows loss for the quarter Derived from a higher claims rate in the EPS due to greater frequency and severity 180 WRITTEN PREMIUMS CLAIMS RATIO* & EXPENSES** 130 NET INCOME 2,689 80 65 +23% 47 170 106% 2,183 263 101% 24 135 8% 8% 30 15 215 1 -20 -2 2,256 -27 94% 97% -45 1,832 -70
Slide 12: SURA's net income increased 82% in June
SURA's net income increased 82% in June Given the better results in the Life and Non-life segment 211 mil MM Var. +82% Figures in COP billions Administrative expenses include administrative expenses, fees and amortization and depreciation of the corporate segment. Others include the corporate segmen
Slide 13: SURA AM
SURA AM 2T - 2023
Slide 14: Net income continues to perform positively
Net income continues to perform positively Mainly associated with improved performance of the S&R segment. COMMISSION INCOME OPERATING EXPENSES Yield ** +22% 7.4% +18% +4% +20% 2,097 +12% +2% +3% 1,714 1,607 -3% 1,359 860 1,030 Op. Expense ratio (%) * 681 762 1,226 952 617 486 2Q22 2Q23 Jun 22 Jun 2
Slide 15: Savings and Retirement's segment operating income increases in the quarter
Savings and Retirement’s segment operating income increases in the quarter Leveraged by growth in fee income, expense control and improved legal reserve performance COMMISSION INCOME OPERATING EXPENSES RETURN ON LEGAL RESERVE & 63% OPERATING INCOME +22% 59% 55% +4% 872 500 +8% 714 Var. % Utilidad Op
Slide 16: Challenging environment continues in the Voluntary Segment
Challenging environment continues in the Voluntary Segment Pressured by competitive environment and portfolio realignment toward fixed income assets with lower commissions, offset by strict expense controls COMMISSION INCOME OPERATING EXPENSES OPERATING INCOME +8% 109% 97% 100% -6% +11% -10% 147 158
Slide 17: Net income by segment
Net income by segment Segments continue to contribute positively to net income growth 451 mil MM Figures in COP billions Operating expenses include operating and administrative expenses, selling operating expenses and acquisition costs. Others include the corporate segment excluding operating and in
Slide 18: Grupo SURA
Grupo SURA 2T - 2023
Slide 19: Equity method remains stable compared to 2Q 2022
Equity method remains stable compared to 2Q 2022 Grupo Argos' profit growth offsets Grupo Nutresa's and Bancolombia's decline BANCOLOMBIA GRUPO NUTRESA GRUPO ARGOS 92 -18% 436 -35% 358 +251% 74 48 26 2Q22 2Q23 2Q22 2Q23 2Q22 2Q23 Figures in COP billions Equity Method Var% vs 2T2022 508 mil MM +1% 19
Slide 20: Positive performance of the investment portfolio
Positive performance of the investment portfolio With net income impacted by the deferred tax associated with the Nutresa transaction RESULTS EXCLUDING DEFERRED TAX NUTRESA Net Income + 64% Contolling net income + 46% -21% +256% -10% +82% Figures in COP billions *Other includes Arus, Habitat, Sura V
Slide 21: Financial implications framework agreement
Financial implications framework agreement Transaction effects on Grupo SURA’s figures
Slide 22: Exchange will increase shareholder's equity / 5% Cash – 5% swap
Exchange will increase shareholder’s equity/ 5% Cash – 5% swap Initial shares Spink-off Tender offer Exchange Post-Exchange Received shares Nueva Sociedad Nutresa Nutresa Alimentos Alimentos Portafolio 171 M shares x0.96 134 M 102 M 148 M 18 M 163 M (163 + 18*) = 181 M 37% reduction shares shares sh
Slide 23: One-time effects and long term effects
One-time effects Long term effects • Profit on sale of investments • Lower equity method ERI • Taxes on sale of investments and • Higher financial expenses subsequent transaction • Lower total net income • Asset decrease • Lower shares outstanding ESF • Equity decrease • Debt increase • Increase in
Slide 24: Assumptions: macro, transaction and operation
• Fx COP 4,200 Macro 2023 2024 2025 • Inflation taken from Focus Economics projections CPIaop IPC aop 11.2% 5.6% 3.9% • Transaction results assuming 5% swap 5%cash Associated to • As a result of the transaction, outstanding shares would decrease by 29% transaction • Interest assumes spread of 5.5% •
Slide 25: Spin-off, contribution to SPV, 5% Cash - 5% swap scenario
5% Cash - 5% swap Scenario Sources Uses Cash delivery receive 163 M shares 171 M shares 48 M shares 1. Profit on sale of 1. 171* million shares of Grupo investments approx. COP SURA are no longer 3.9* trillion outstanding, increasing 1. Grupo Nutresa equity per share reclassification from associate
Slide 26: Earning per share would grow approx. 15% after the transaction
5% Cash - 5% Swap Earning per share would grow approx. 15% after the transaction effect have been normalized Net Income per share 2023 E 2024E 2025E Pre-transaction net income 12,700 – 14,200 6,300 – 7,000 (COP) Post-transaction net income 5,400 – 6,000 +15% (COP) 3,700 – 4,200 Normalized Post-trans
Slide 27: Dividends received, operating cash flow and net debt/dividends
5% Cash - 5% Swap/ Figures in COP billons Dividends received | Net debt/ Dividends Operating Cash Flow* 14 .0 6.6x 1.7 1.7 1.6 1.8 12 .0 1.6 5.00x 1.4 1.1 10 .0 1.2 1.0 1.0 3.8x 1.0 4.4x 3.6x 1.0 4.1x 0.7 3.9x 0.9 8.0 0.8 0.6 0.8 3.2x 0.6 3.0x 0.6 0.5 0.4 6.0 2.5x 5.4 0.2 4.9 0.3 4.5 4.3 4.4 4.4 0.0
Slide 28: Evolution of the ownership structure and focus on financial services
Advancing in the evolution of the ownership structure and the portfolio's focus on financial services 1 Solid cash generation: Allow the company to maintain an increasing dividend per share to our shareholders. Shareholder value generation: Lower shares outstanding will increase ~15% earnings per sh
Grupo de Inversiones Suramericana S.A. (Grupo SURA) — Q2 2023 Earnings Presentation on 6ix