Quinenco S.a. · BCS:QUINENCO
Quinenco — Investor Presentation (May 2015)
49 slides from Quinenco's investor presentation, May 2015
Slide 1: Company Presentation / May 2015
Company Presentation / May 2015 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$ 3.6(1) billion (1) Market Capitalization as of April 30, 2015 3
Slide 4: Quiñenco
Quiñenco • Quiñenco is one of Chile’s largest business conglomerates with US$71 billion in assets under management • Companies managed by Quiñenco generated sales revenue of US$20 billion in 2014 • The Quiñenco group of companies employ around 69,000 people in Chile and abroad 4
Slide 5: Quiñenco: Main Operating Companies
Quiñenco: Main Operating Companies % Control as of December 2014 51.3% 60.0% 29.0%(2) 65.9% 64.6%(3) 42.4% 100% Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): Mkt.Cap(1): US$ 840 mln(5) US$ 10.9 bln US$ 1.7 bln US$ 160 mln CSAV: US$ 1.2 bln US$ 0.9 bln US$ 4.0 bln HL(4): US$5.0 bln • 1s
Slide 6: First Class Board and Management
First Class Board and Management Board of Directors Andrónico Luksic C. Jean-Paul Luksic F. Nicolás Luksic P. Andrónico Luksic L. Fernando Cañas B. Gonzalo Menéndez D. Hernán Büchi B. Matko Koljatic M. Chairman Vice Chairman Director Director Director Director Director Director Senior Management • F
Slide 7: Over 50 Years of History
Over 50 Years of History 1957 - 1999 1999 - 2010 2011 - 2013 1957 Sociedad Forestal Quiñenco S.A is 1999 Quiñenco sells its stake in VTR 2011 Quiñenco acquires a 20.6% stake in created. Hipercable. It then buys a 14.3% shipping company CSAV. In early stake in Entel S.A. 2012 this stake reached 37.4%
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: World Class Strategic & Commercial Alliances
Quiñenco: World Class Strategic & Commercial Alliances Beverage & Food Manufacturing Financial Energy Transport 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/Retain Continuous growth of shareholder value 3 Max. Profitability Hoteles 2 Restructuring 1 Acquisition •Restructuring and •Develop and maximize •Acquisitions of admi
Slide 12: Corporate Level Transactions
Corporate Level Transactions Quiñenco has carried out various transactions throughout its history, generating US$1.7 billion in profits over the last 18 years from divestments of US$4.1 billion 1,678 903 (1) 702 57 37 Telecom Retail Real estate/Hotels Beverage & Food Utility Financial Services Total
Slide 13: Strong Growth in NAV
Strong Growth in NAV Over the past 12 years, the net value of Quiñenco’s assets has grown at an average compound annual rate of 19% Quiñenco - NAV (MUS$) CAGR(2) (1) 2002 – 2014 6.858 (1) 6.541 Quiñenco’s NAV 19.0% 5.789 (1) (1) 5.351 IPSA 11.9% 5.137 3.071 3.275 2.721 1.989 2.028 2.142 1.450 671 20
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 18% Financial Services Deposits 1 22% Chile (non-alcoholic and alcoholic beverages) (2)
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$ 5.6 billion as of December 31, 2014) (U
Slide 16: NAV & Share Price Trend
NAV & Share Price Trend NAV/Share Price Trend as of December 31, 2014 2.500 2.064 1.999 2.017 1.981 1.953 2.000 1.500 1.325 1.295 1.300 1.000 1.190 1.145 500 0 Dec- 13 Mar- 14 Jun- 14 Sep- 14 Dec- 14 NAV per share (CH$) Share price (CH$) Note: Market information and book values as of December 31, 20
Slide 17: Diversified Revenues and Results FY 2014
Diversified Revenues and Results FY 2014 Quiñenco has achieved diversified revenues and results, thus generating stable cash flows Aggregate Revenues by Sector (1) Net Income (2) (Full year 2014) (Full year 2014, MUS$) Port & Shipping Serv. 2% Financial Services Transport 14% 14% 563.8 Beverage & Fo
Slide 18: Stable Dividend Cashflow
Stable Dividend Cashflow Good operating company performance allows a strong dividend flow to the parent company Full Year 2014 Dividends Composition of Dividends (MUS$) (YTD March 2012) SM SAAM CCU 3% 6% Banchile Vida Banco de 497 2% Chile 17% 251 129 78 83 2010 2011 2012 2013 2014 SM SAAM Banchile
Slide 19: 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$ 4.1 bln and gains on sale of
Slide 20: Recent Events
Quiñenco Recent Events Financial Main Operating Conclusions Overview Overview Companies 20
Slide 21: Debt and equity raising, Board increase, Invexans tender offer
Quiñenco raises funds through debt and equity, increases number of Board members, and completes Tender Offer for Invexans Bond Issuance • In July 2013 and July 2014 Quiñenco successfully placed UF 4,000,000 (approx. US$180 million) and UF 2,375,000 (approx. US$100 million) respectively, in bonds in
Slide 22: Recent Events Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • Leadership in net income and profitability in the Chilean financial system. • High levels of efficiency with cost-income ratio of 41%. • Diversification of its financing structure through the issuance of approximately US$785
Slide 23: Recent Events Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • On May 7, 2014, CCU announced its incursion in Bolivia, through the acquisition of a 35% stake of Bebidas Bolivianas (BBO). CCU could push this up to 51%. BBO produces and commercializes alcoholic and non alcoholic beverages.
Slide 24: Recent Events Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • On January 22, 2014, CSAV announced a non-binding MOU with the German shipping company Hapag- Lloyd (HL), to merge CSAV’s container business with HL, becoming shareholder in the merged company with a 30% stake. On April 16, 2
Slide 25: Recent Events Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • In January 2014 a port strike in Chile resulted in the payment of a bonus of US$5.1 million on behalf of SM SAAM to the port workers, along with a lower level of activity. • On July 2, 2014, SM SAAM announced the execution of
Slide 26: Recent Events Operating Companies
Recent Events Operating Companies NAV Company Recent Events (% of Total) • Invexans increased its stake in Nexans to 28.97%, • Invexans completed a capital increase of US$270 million , in order to increase its stake in Nexans and reduce the company’s liabilities. Quiñenco increased its stake in Inve
Slide 27: Financial Overview
Quiñenco Recent Events Financial Overview Main Operating Conclusions Overview Companies 27
Slide 28: Sound Results
Sound Results Quiñenco has reported increasing revenues and strong bottom line results Revenues(1) Net Income(2) (MUS$) (MUS$) 6,439 564 481 5,339 4,294 3,555 230 206 2,080 145 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Note: Figures translated from nominal Chilean pesos at the exchange rate
Slide 29: Quiñenco Holding: Conservative Financial Structure
Quiñenco Holding: Conservative Financial Structure Long term investments are financed with equity and long term debt in Chilean pesos Assets Liabilities and Equity US$ 5.6 billion as of December 2014 US$ 5.6 billion as of December 2014 Cash Other 9% 1% ST Debt Other Liabilities 1% 4% LT Debt 12% SH
Slide 30: 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$ 439 363 201 63 -901 2010 2011 2012 2013 2014 MUS$ 2010 2011 2012 2013 2014 Debt 282 627(1) 733 887 956 Cash -1,183 -264 -532 -824 -516 Net Debt -901 363(1) 201 63
Slide 31: Main Operating Companies
Quiñenco Recent Events Financial Main Operating Companies Conclusions Overview Overview 31
Slide 32: 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 33: Banco de Chile
Banco de Chile • In 2014 the Bank’s net operating revenues grew 13.1%, based on higher loans to customers and ROAE a favorable effect of inflation on the bank’s net asset position in UFs, which compensated higher loan provisions. 24,7% 23,9% 24,4% 23,3% 23,5% • Net income in 2014 was MUS$974, 15.1%
Slide 34: CCU
CCU • Founded in 1850, CCU is a multi-category branded • Jointly controlled with Heineken, 3rd largest brewer beverage company operating in Chile, Argentina, worldwide. Bolivia, Colombia, Paraguay and Uruguay with an • Traded on the NYSE and Santiago Stock Exchanges. extensive wine export business t
Slide 35: CCU
CCU • Sales grew by 8.4% in 2014 to MUS$2,139, reflecting growth in all segments, led by Chile EBITDA by Business Segment segment based on higher volumes and average (December 2014) prices. Other Wine 3% • EBITDA was MUS$410 in 2014 decreasing by a slight 13% 1.6% from 2013, mostly due to higher dis
Slide 36: Invexans
Invexans • Invexans’ main asset is its 28,97% stake in Nexans, • Invexans now has three directors on the Board, a a leading cable manufacturer with worldwide member of the Compensations and Designations presence, based in France. Committee, and a member of the Strategic • An agreement signed in Sept
Slide 37: Nexans
Nexans • Nexans is a worldwide leader in the cable industry with presence in 40 countries and commercial activities worldwide, after over a century of progress. • Headquartered in Paris, France, Nexans produces cables and cabling systems at more than 90 production sites across 5 continents. • 26,000
Slide 38: Invexans
Invexans • In 2014 Invexans’ net income mainly reflects Sales its proportional share in Nexans’ net income (MUS$) for the year, which posted an improvement Madeco (historical) over 2013’s results, partially offset by higher expenses at Invexans related to provisions 418 437 423 and payments of legal
Slide 39: Techpack (ex-Madeco)
Techpack (ex-Madeco) • Techpack is a regional leader in flexible packaging, • In June 2014 Techpack announced the acquisition with presence in Chile, Argentina, Peru and of the Chilean flexible packaging company HYC Colombia. Packaging, in US$34.3 million. • Over 2,200 employees. • The company recen
Slide 40: Techpack
Techpack • Techpack’s operating income in 2014 is lower than Sales the previous period mostly due to negative goodwill of MUS$30 related to Peruplast in 2013. (MUS$) However, during 2014 the consolidation of HYC Packaging in Chile and growth in Colombia are 351 372 noteworthy. • Techpack’s net incom
Slide 41: Enex
Enex • Enex S.A. has a network of 451 service stations, Market Share of Liquid Fuel Sales with 120 convenience stores. (December 2014) • Main business activities: Others - Distribution of fuels through its service 8% stations. Petrobras 13% - Distribution of fuels to industrial clients and transport
Slide 42: Enex
Enex • Sales in 2014 reached MUS$3,588, mainly corresponding to fuels, boosted by the Sales acquisition of Terpel Chile in June 2013. (MUS$) • Operating income grew 32% to MUS$54 in 2014, 3,588 mainly reflecting the favorable effect of the addition of Terpel Chile’s operations. 2,897 • Net income in
Slide 43: CSAV
CSAV • CSAV, founded in 1872, is one of the oldest shipping • CSAV would be the main shareholder and through a companies in the world. shareholders’ agreement would control around 75%. • Its activities include overseas transport of • In April 2014 CSAV and HL signed a binding MOU, containerized carg
Slide 44: CSAV
CSAV • In 2014 CSAV’s sales reached MUS$2,741, 14.5% Sales below 2013, mainly because 2014 includes only 11 (MUS$) months of operations, along with lower freight rates. • Net income in 2014 was a gain of MUS$389, a 5,215 substantial improvement over 2013, primarily due 4,796 to a net gain of MUS$619
Slide 45: 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 46: SM SAAM
SM SAAM • SM SAAM’s consolidated sales in 2014 reached Sales MUS$492, up 2.8% over 2013, reflecting improved (MUS$) performance in port terminals and tug boats, which 492 compensated lower revenues from logistics. 479 • SM SAAM obtained net income of MUS$61 in 2014, 17% lower than the previous perio
Slide 47: Conclusions
Quiñenco Recent Events Financial Main Operating Conclusions Overview Overview Companies 47
Slide 48: 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 49: Thank you for your attention
Thank you for your attention x & : 448 QUINENCO S.A. 49