Quinenco S.A. · BCS:QUINENCO
Quinenco — Investor Presentation (May 2010)
39 slides from Quinenco's investor presentation, May 2010
Slide 1: QUIÑENCO S.A. May 2010
QUIÑENCO S.A. May 2010
Slide 2: Agenda
Overview Financial Results Recent Events Main Operating Companies Summary & Highlights
Slide 3: Overview: Quiñenco Holding
OVERVIEW QUIÑENCO HOLDING
Slide 4: Quiñenco Group of Companies
Quiñenco Group of Companies Quiñenco is one of Chile’s largest business conglomerates with US$39.9 billion in assets under 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 5: Quiñenco - Attractive Fundamentals
Quiñenco - Attractive Fundamentals Dominant position Quiñenco’s companies are leaders in their respective in its markets industries Proven track record Holding has a proven track record in value creation evidenced by sales of investments of approx. US$3.0 bln and in value creation gains on sale
Slide 6: Ownership Structure
Ownership Structure Mining Antofagasta plc Luksic Group 83% Chilean Stock Exchanges QUIÑENCO Industrial/ Financial Services 17% Market Capitalization: US$2.8 billion As of May 31, 2010
Slide 7: Quiñenco: Main Operating Companies
Quiñenco: Main Operating Companies Control % 61.7% 66.1% 47.7% Banco de Chile CCU Madeco Mkt Cap: US$8.3 bln Mkt Cap: US$2.6 bln Mkt Cap: US$297 mln ¾2nd ranked bank ¾N°1 beer producer ¾Manufacturer of ¾Merged with Citibank with 86% market share copper & aluminum Chile on 1/1/08 ¾Largest beverage an
Slide 8: 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 9: Holdings by Sector
Holdings by Sector Corporate Level Book Value Manufacturing Food & Beverage Others 2% 10% 13% Telecom 4% Financial Services 71% US$2.5 billion As of December 31, 2009
Slide 10: Chilean Conglomerate
Chilean Conglomerate As a % of Consolidated Assets US$38.1 billion Argentina 0.2% Peru 0.1% Chile 99.7% Note: Figures translated from Ch$ as of December 31, 2009 at exchange rate of: Ch$507.10= 1US$ Consolidated assets are concentrated in Chile. Investments abroad are all at the subsidiary level.
Slide 11: NAV/Share Price Evolution
NAV/Share Price Evolution NAV US$3.3 bln Mkt Cap US$2.4 bln Cash Other 6% Share price / NAV in Ch$ 2% Evolution of NAV/Share Price as of December 31, 2009 Manufacturing 5% $ 1,375 $ 1,451 $ 1,500 $ 1,166 $ 1,243 $ 1,137 $ 1,000 $ 950 $ 975 $ 1,000 $ 1,075 Telecom $ 500 $ 880 3% $0 Dec‐08 Mar‐09 Jun‐
Slide 12: Quiñenco – Investment Criteria
Quiñenco – Investment Criteria Brand & consumer franchise development potential Sufficient critical mass Prior operating or industry experience Access to strategic partners/commercial alliances Growth platform or add-on acquisition potential Controlling stakes
Slide 13: World Class Strategic & Commercial Alliances
World Class Strategic & Commercial Alliances Quiñenco partners with world class players to develop its markets & products to take advantage of combined know-how, experience and capital capacity
Slide 14: Value Creation System
Value Creation System Value creation stems from: ■Acquisitions ■Restructurings ■Development & maximization of profitability of business portfolio ■Divestments Divest Continuous growth of SH value Acquire Maximize profitability Restructure Quiñenco has developed a process of value creation through th
Slide 15: Corporate Level Transactions
Corporate Level Transactions In US$ mlns SECTOR DIVESTITURE YEAR PROCEEDS GAIN ON SALE Telecom Entel shares 2009 94.4 63.3 Retail D&S shares 2009 24.0 4.0 Telecom Entel shares 2007 110.5 78.2 Retail Paris/Cencosud 2005 136.2 52.1 RE/Hotels Hotel Araucano 2005 6.7 (2.4) Retail Others 2005 28.3 4.5 Fo
Slide 16: Acquisitions & Capital Increases
Acquisitions & Capital Increases In US$ mlns ACQUISITIONS Financial Services 2008 Banco de Chile 2.7% 86.0 Retail 2004 Almacenes Paris 11.4% 84.4 Retail 2004 Others 1.0% 23.6 Financial Services 2001 Banco de Chile 52.7% 1,075.9 Financial Services 1999 Banco Edwards 51.2% 514.8 Telecom 1999 Entel 14.
Slide 17: Healthy Financial Structure
Healthy Financial Structure Corporate Level Assets Liabilities & SH Equity US$2.8 billion US$2.8 billion Cash Other ST debt Other 6% 3% 1% Liabilities 4% LT debt 4% Minority Int 0% LT Investments SH Equity 91% 91% Leverage = 0.10 As of December 31, 2009 Note: includes only Quiñenco and intermediate
Slide 18: Net Debt Corporate Level (adjusted)
Net Debt Corporate Level (adjusted) In US$ mlns 2005 2006 2007 2008 2009 Debt 687 704 718 416 329 Cash -160 -201 -333 -105 -204 Net Debt 527 503 385 311 125 * Adjusted for proportionate share of debt and cash of IRSA (50%), and of LQIF (67.04%) in 2008 and 2009. Deuda Neta al 31 de diciembre de 2009
Slide 19: 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 47.2 5.4 0.50 0.45 0.36 7.9 11.2 7.0 1.9 1.8 0.14 0.10 2.8 0.8 0.0 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2005 2006 2007 2
Slide 20: Dividend Cashflow Corporate Level
Dividend Cashflow Corporate Level In US$ mlns 240 210 220 200 Banco de Chile 160 143 CCU 114 Telsur 120 104 Entel Madeco 80 Others 40 0 2005 2006 2007 2008 2009 Note: Figures translated from nominal Ch$ at the exchange rate of: Ch$507.10= 1US$ Good operating company performance allows for a strong d
Slide 21: 2009 Financial Results
2009 FINANCIAL RESULTS
Slide 22: 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 23: Consolidated Results Full Year 2009
Consolidated Results Full Year 2009 In US$ mlns 12/31/2008 12/31/2009 % Change Sales 521.4 501.1 -3.9% Operating income* (19.6) (7.7) -60.5% Non-operating income 114.6 147.4 28.6% Income tax 5.0 (1.8) -136.2% Net income from discontinued operations 235.8 8.2 -96.5% Net income Industrial Sector 335.8
Slide 24: Contribution to Quiñenco's Net Income Full Year 2009
Contribution to Quiñenco’s Net Income Full Year 2009 In US$ mlns 12/31/2008 12/31/2009 % Change Manufacturing 108.4 35.8 -67% Financial 402.9 400.1 -1% Other 285.3 130.3 -54% Consolidated Net Income 796.6 566.2 -29% Minority Interest (299.7) (259.8) -13% Net Income attributable to Controller 496.9 3
Slide 25: Recent Events
RECENT EVENTS
Slide 26: 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 27: Citigroup exercises options of LQIF
Citigroup exercises options of LQIF Financial Services Citigroup exercises both options, reaching a share of 50,0% of LQIF Options exercised on April 30, 2010 with payment of US$1 billion in cash. During 2Q 2010 Quiñenco will report gain of approx. US$327 million arising from exercise of first
Slide 28: Main Operating Companies
MAIN OPERATING COMPANIES
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$34.4 billion Over 14,000 employees Nationwide
Slide 30: Banco de Chile
Banco de Chile Financial Services (US$ mln’s) 2009 operating revenues down by 8.0% to US$2.0 bln due to adverse effect of negative ROAE inflation, lower nominal rates and non recurring income in 1Q 08. 26.7% 27.4% 2009 net profit was US$509 mln, down 25.8%, 25.0% 25.1% reflecting the lower reven
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$2.2 billion. Over 5,300 employees. 18 facilities in Chile. 4 facilities in Argentina. Extensive distribution network reaching over 90,000 sale
Slide 32: CCU
CCU Beverage & Food (US$ mln’s) 2009 sales up by 9.3% to US$1.5 bln EBITDA by Business Segment Year 2009 2009 net profit reached US$252 mln, 42% Others higher than the previous year, mainly due to Spirits Wine 5% 3% 10% gain of US$48 million related to sale of 29.9% of Aguas CCU Nestlé Chile to
Slide 33: Madeco
Madeco Manufacturing Founded in 1944, Madeco is the main Latin American manufacturer of copper and aluminum products as well as flexible packaging. Global presence through exports of a variety of copper and aluminum products to the North American and European markets with over 3,000 customers.
Slide 34: Nexans
Nexans Manufacturing Nexans is the worldwide leader in the cable industry with presence in 39 countries and commercial activities 2009 Sales by Origin worldwide, after over a century of progress. Headquartered in Paris, France, Nexans produces cables and cabling systems at more than 90 productio
Slide 35: Madeco
Madeco Manufacturing (US$ mln’s) 2009 sales down by 18% to US$316 mln SALES Operating income up by 130%, mainly due to brass mills and flexible packaging units. 1,260 1,103 Net income reached US$29 million, substantially below 2008, mainly due to 721 absence of cable business and the gain on 3
Slide 36: Highlights and Summary
HIGHLIGHTS AND SUMMARY
Slide 37: Portfolio Optimization, Healthy Financial Structure, Outlook
Outlook Healthy Portfolio Low Net Debt Financial Optimization Position 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 levera
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: Thank you for your attention
QUIÑENCO S.A. Thank you for your attention