Inversiones La Construccion Sa · BCS:ILC
Inversiones La Construccion Sa — Investor Presentation (September 2024)
58 slides from Inversiones La Construccion Sa's investor presentation, September 2024
Slide 1: Corporate Presentation September 2024
Corporate Presentation September 2024 /2024SEP /2024 SEP 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 ILC at a Glance 2 Strategy 3 Closing Remarks SEP /2024 3
Slide 4: ILC at a Glance
CHAPTER ILC at a Glance 01 SEP /2024 4
Slide 5: ILC at a Glance
Lean structure under leading position in ILC AT A GLANCE financial and health sectors Listed at Santiago Stock Exchange: Float 67% 33% FINANCIAL SECTOR HEALTH SECTOR Pension Fund Managers Life Insurance Bank Hospitals, Outpatient and Mandatory Health Supplemental Health Dental Centers Insurance Insu
Slide 6: ILC at a Glance
ILC AT A GLANCE BE LEADERS IN THE CONSTRUCTION OF SOCIAL AND ECONOMIC VALUE THAT IMPROVES PEOPLE'S QUALITY OF LIFE WHO? WHAT? HOW? + 9 million Beneficiaries 4 Industries 5 Pillars (~1mm people over 60) Growth Profitability 3 PAÍSES Health Pensions Flexibilty Focus on th Strong Financial aging popula
Slide 7: ILC in Numbers
ILC IN NUMBERS 365 th retirees 1 million Health policyholders 4.6 +5 million USD 762 million Medical consultations million performed Second largest manager of pension Pension fund Paid out for funds in the Andean members healthcare services Region and medical leave Largest private health USD 75.8 bn
Slide 8: Consistent Growth and Diversification Since Our IPO
CONSISTENT GROWTH AND DIVERSIFICATION SINCE OUR IPO 2012 June 2024 Assets Ch$ bn 1,055 15.0x 15,803 AUM US$ bn 22.3 3.6x 79.2 Equity Ch$ bn 428 2.4x 1,033 Beneficiaries MM 3.9 2.5x 9.7 Industries 2 2x 4 Employees +10,500 1.3x +13,800 SEP /2024 FX: CLP/USD 950 Source: ILC 8
Slide 9: Consistent Returns Over Time and Double Digit ROAE
CONSISTENT RETURNS OVER TIME AND DOUBLE DIGIT ROAE PROFIT AND ROAE ILC 19.0% 18.4% 14.3% 14.5% 49.6% 18.3% 13.8% 12.0% 10.8% 12.0 10.6% 17.0% 19.6% 14.6% % Ch$ bn. Recurring Profit Extraordinary Profit / Loss 222.8 12.3 182.6 178.0 21.9 129.4 146.5 83.0 62.5 69.2 72.5 71.9 90.3 91.0 86.5 88.4 ( 31.4
Slide 10: Net Income Diversification: New Industries & Geographies
NET INCOME DIVERSIFICATION: NEW INDUSTRIES & GEOGRAPHIES ILC’s Recurring Profit(1) Contribution by Subsidiary (2012) 3.7% 79.3% 16.2% Pensions 0.7% Financial Profit Growth 2012- 6M24 (LTM) Health 2.1X ILC Recurring Profit(2) Contribution by Subsidiary (June 2024 LTM) 27.3% 6.8% 31.6% 18.1% 11.9% 4.3
Slide 11: Consistent and Attractive Dividend Yield
CONSISTENT AND ATTRACTIVE DIVIDEND YIELD DIVIDENDS PER SHARE AND DIVIDEND YIELD ILC 2013 - 6M24 Ch$ 750 631 650 ILC’s Average Dividend 600 yield 518 2013-6M24 370 449 450 19.8% 450 7.6% 330 350 8.3% 8.6% 223 7.0% 11.7% 7.1% 5.6% 6.1% 5.4% Distributed since IPO: 5.0% 2.7% 4.0% 4.4% Ch$5,951 Per share
Slide 12: Outpacing the Index: Profitability Has Outperformed IPSA
OUTPACING THE INDEX: CONSIDERING DIVIDENDS, PROFITABILITY HAS OUTPERFORMED IPSA % EVOLUTION OF ILC STOCK PRICE VS IPSA(1) (SINCE IPO IN 2012) 250 200 Stock price profitability adjusted by dividends • 122,6% IPO 2012 - Aug 2024 150 • ILC: 100 +105.0% • IPSA: 50 +47.1% - 2012 2013 2014 2015 2016 2017
Slide 13: This Has Been Driven by Our 5 Pillars Strategy
THIS HAS BEEN DRIVEN BY OUR 5 PILLARS STRATEGY SEP /2024 13
Slide 14: Our Fundamental Pillars to Achieve Consistency
OUR FUNDAMENTAL PILLARS TO ACHIEVE GROWTH CONSISTENCY ESG PROFITABILITY Our Propose: Be leaders in the construction of social and economic value, that improves people’s quality life STONG FLEXIBILITY FINANCIAL POSITION SEP /2024 14
Slide 15: Presence in Industries Which Outpaced GDP Growth
PRESENCE IN INDUSTRIES WHICH OUTPACED GDP Growth GROWTH CAGR 1992-2002 CAGR 2002-2012 CAGR 2012-2023 PENSIONS 18.3% 11.8% 7.2% AUM Chilean pension funds industry ANNUITIES 22.4% 9.9% 9.4% AUM Life Insurance industry BANKING Total Loans 18.1% 10.4% 7.1% HEALTH Current health expenditure 8.9%(2) 10.0%
Slide 16: Inorganic Growth Successful Acquisitions
Growth INORGANIC GROWTH SUCCESSFUL ACQUISITIONS 1980 … 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 IPO SUCCESSFUL ACQUISITIONS Acquisition Acquisition Acquisition Acquisition Acquisition Acquisition (2013) (2015) (2016) (2019) (2022) (2023) Multiple (P/B) Multiple (P/B) Spread Multip
Slide 17: Successful Turnarounds
Profitability SUCCESSFUL TURNAROUNDS ILC’s role is in detecting opportunities in efficiency and operational turnaround in our current operations and acquisitions providing strategic guidance to our subsidiaries EXISTING SUBSIDIARIES M&A AND NEW OPPORTUNITIES • Focus on efficiency • Asset allocation
Slide 18: Self-Funded Growth (2013-6M24)
SELF-FUNDED GROWTH (2013-6M24) Profitability Sources of Funds Uses of Funds USD 1,416 MM USD 1,298 MM Capital Divestments Debt Dividend Dividends Paid Increases in M&A Received Out Subsidiaries USD 298 MM USD 350 MM USD 769 MM USD 598 MM USD 403 MM USD 297 MM SEP /2024 FX 950 CLP/USD Source: ILC 18
Slide 19: Preparing Our Businesses for Regulatory Changes
PREPARING OUR BUSINESSES FOR REGULATORY CHANGES Flexibility Health result Regional & product Reorganization Focus on financial hedging diversification business SEP /2024 19
Slide 20: New Sources of Funding: Access to International Debt Market
NEW SOURCES OF FUNDING: ACCESS TO INTERNATIONAL DEBT MARKET Strong Financial Position 2012 June 2024 Local Capital Local Capital Domestic Banks Domestic Banks Market Market Sources of Fundings 2 Outstanding Bonds 5 Outstanding Bonds Credits Credits UF 2.5 MM UF 5.6 MM Avg. Rate: UF+ 3.9% Avg. Rate:
Slide 21: Well-Managed Debt Maturity and Liquidity Position
WELL-MANAGED DEBT MATURITY AND LIQUIDITY POSITION Strong Financial Position ILC (standalone) amortization schedule LIQUIDITY POSITION (JUN-2024) CLP$ bn. Bank Loans ILC-C ILC-H ILC-I ILC-J ILC-K 144A- Reg S 144A-Reg S 300 38.0% 225 150 Ch$ Investment 193.7 bn. Portfolio 75 41.8% - Cash & Equivalents
Slide 22: Our Sustainability Journey
OUR SUSTAINABILITY JOURNEY ESG As part of its strategic sustainability roadmap, ILC formalized its corporate philosophy in 2023. It was founded upon the company's history, local and international trends, a variety of literature and studies and consultancies conducted on related topics over the last
Slide 23: ESG Results Over Time
ESG RESULTS OVER TIME ESG Responsible approach for Investment& Loans Inclusion programs for underserved groups: • Public Health Insurance +13 pp • Elderly +22 pp 73% • SMEs 67% 60% Launch of Compromiso Mayor: 45% Impact on ~1mm people over 60 (1/3 of the elderly population in Chile) Active role in p
Slide 24: ILC Committed to the Elderly
ILC COMMITTED TO THE ELDERY RANKING MOST SENIOR-FRIENDLY COMPANY The ‘Portal de Formación' initiative offers free 1° online courses tailored for seniors, providing tools and support for their daily life 2° Encouraging senior talent in employees and driving initiatives such as ‘Piensa en Grandes' SEL
Slide 25: 2024 Milestones
2024 MILESTONES 1. 2. ILC REACHES AN AGREEMENT TO INCREASE ITS BANCO INTERNACIONAL COMPLETES ITS FIRST STAKE IN BANCO INTERNACIONAL TO 100% WITHIN 3 BOND ISSUANCE ON THE SWISS MARKET YEARS. On July 2nd, 2024, an unsecured bond maturing on July 23rd, 2027 (a 3- On August 14th, 2024, ILC reached an ag
Slide 26: Strategy
CHAPTER STRATEGY 02 SEP /2024 26
Slide 27: Next Phase: Growth in Financial Business
NEXT PHASE: GROWTH IN FINANCIAL BUSINESS Business Consolidation Growth, Diversification and Turnarounds Growth in Financial Business 2012 2016 2017 2022 2023 2027 Foundation (2012) Acquisition (2013) Acquisition (2015) Acquisition (2016) Increase of participation Divestment SEP /2024 27
Slide 28: To a New Focus
TO A NEW FOCUS Annuities Growth in financial Pensions business Z Health Banking SEP /2024 28
Slide 29: Banking
SEP 1/2024 Banking © Banco . Internacional iKC
Slide 30: Outpacing the Industry with Room to Grow
OUTPACING THE INDUSTRY WITH ROOM TO GROW BANCO INTERNACIONAL LOAN MIX(1) US$ bn. Commercial Consumer Mortgage Market Share Loans NEW STAGE 3,5x 3.8 3.5 1. 3,1% 3,0% 7,3% Large Companies and 2.8 6,6% Corporations 2,6% 2.2 0,9% 2,0% 1.7 0,6% 1,9% 90,4% 89,6% 1.0 0,4% 96,5% 2. 2,1% 0,7% 97,4% 1.44% 1.5
Slide 31: Developing Products in Retail Banking
DEVELOPING PRODUCTS IN RETAIL BANKING #1 Best rate in the Market BANCO INTERNACIONAL RETAIL CUSTOMERS GROWTH Term Deposits • Cross-selling with checking N° of Customers accounts and Time Deposits • Alliance with Tenpo Consumer +108.8% Loans • Digital cross-selling 27,808 26,512 • Clients and non-cli
Slide 32: Establishing a Robust Funding Structure
ESTABLISHING A ROBUST FUNDING STRUCTURE BALANCE SHEET STRUCTURE JUNE 2023 VS 2024(1) Ch$ bn. 4,028 4,420 4,028 4,420 Liquid reserves invested in Other Assets Access to local and Chilean government 1% 0% 4% international markets securities and Central Bank Trading Assets 1% Banks 16% 15% instruments
Slide 33: Risk Management Sustains Our Growth in the Retail Segment
RISK MANAGEMENT SUSTAINS OUR GROWTH IN THE RETAIL SEGMENT NON-PERFORMING LOANS COLLATERAL COVERAGE SOLVENCY RISK RATINGS Banco Internacional Banco Internacional Banco Internacional Local (ICR/Feller) Industry Total Portfolio Industry Industry Banco Internacional Consumer 73.8% 75.6% 75.4% 14.8% 15.8
Slide 34: Sustained Growth in Profit
SUSTAINED GROWTH IN PROFIT BANCO INTERNACIONAL PROFIT & ROAE MAIN TOPICS 2024 – 2027 Ch$ bn. Net Income ROAE 18.9% • Enhanced organic growth featuring 18.2% innovative digital expansion 17.0% 15.8% • Adding inorganic opportunities 14.9% • Diversified business model across 13.0% market segments 10.8%
Slide 35: Annuities
SEP 1/2024 Annuities confuturo iKC
Slide 36: Recovery of the Annuity Industry
RECOVERY OF THE ANNUITY INDUSTRY ANNUITY VS PROGRAMED WITHDRAWAL RATE INDUSTRY ANNUITY PREMIUMS AND Rate (UF) CONFUTURO'S MARKET SHARE (%) 5% June 2024: UF MM 4% 4.41% 8.6% 14.2% 14.2% 3% June 2024: 2% 3.36% 1% - 2018 2019 2020 2021 2022 2023 2024 53.2 55.1 Programed Withdrawal Rate Annuity Rate 34.
Slide 37: A Flexible Sales Channel Strategy and Cost Efficiency
A FLEXIBLE SALES CHANNEL STRATEGY AND COST EFFICIENCY Market Growth ANNUITIES SOLD BY CHANNEL SG&A AND SG&A OVER AUM % UF MM 11% 26% 24% 1.31% 1.29% 1.23% 7% 33% 33% 1.15% 1.16% 1.14% 1.20% 43% 42% 11% 0.66% 0.58% 51% 27% 0.50% 0.45% 0.42% 0.42% 40% 0.37% 82% 28% 29% 63% 1.5 1.3 1.1 1.0 40% 0.9 1.0
Slide 38: Investment Portfolio Identity – Increased Focus on Alternative Assets
INVESTMENT PORTFOLIO IDENTITY – INCREASED FOCUS ON ALTERNATIVE ASSETS INVESTMENT PORTFOLIO(1) CHANGES OVER THE LAST YEARS USD bn. 4.3 5.9 7.0 8.6 13% 0% 23% 19% 22% 12% 7% 1% 12% 15% 14% 12% 69% 55% 51% 48% 2% 2% 2% 3% 5% 4% 7% 3% 2013 2016 2020 June 2024 Equities, Cash & Others Local Investment Fun
Slide 39: Sustained Generation of Results Over Time
SUSTAINED GENERATION OF RESULTS OVER TIME CONFUTURO PROFIT & ROAE MAIN TOPICS 2024 – 2027 Ch$ bn. Net Income ROAE 26.7% 26.0% • Continue increasing portfolio leverage in a growing industry • Diversified investment portfolio • Operational leverage: grow revenues with 13.6% current structure 12.1% 12.
Slide 40: Pensions
SEP 1/2024 eee Pensions BiasiraT Gos iKC
Slide 41: Consolidating a Returns and Efficiency Regional Model
CONSOLIDATING A RETURNS AND EFFICIENCY REGIONAL MODEL INVESTMENT AUM TAXABLE INCOME EFFICIENCY(1) RETURNS #2 #1 USD 50.4 bn In 2 funds (L5Y) #2 35.5% USD 4.3 bn #1 #4 In 4 funds (L5Y) #1(2) 51.2% #2 #3 USD 15.2 bn In 1 fund (L5Y) #2 65,9% #2 in Andean Region with 5.6 million affiliates and IMPROVEME
Slide 42: Improvement in Taxable Income Offsets the Decrease in Contributors
IMPROVEMENT IN TAXABLE INCOME OFFSETS THE DECREASE IN CONTRIBUTORS AFP HABITAT OPERATING RESULT AFP HABITAT AND AFP INDUSTRY TAXABLE INCOME Ch$ MM. AFP Habitat Industry Difference with the Industry Ch$ bn. +6.6% +1.4% +19.4% +21.2% +20.7% +20.1% +21.1% 69.7 74.3 75.3 +19.3% +15.4% 1.35 1.44 1.02 0.8
Slide 43: Higher Revenues, Mainly Due to Higher Taxable Income and AUM per Affiliate
HIGHER REVENUES, MAINLY DUE TO HIGHER TAXABLE INCOME AND AUM PER AFFILIATE AUM PER AFFILIATE REVENUES TAXABLE INCOME REVENUES +13.2% +52.1% +31.6% US$ +22.2% Ch$ bn. Ch$ Ch$ bn. 42.8 miles 611.8 20.0 miles 540.5 4.2 15.2 28.1 3.4 June 2023 June 2024 6M23 6M24 June 2023 June 2024 6M23 6M24 LEGAL RESE
Slide 44: Growth in Profit Due to Increase in Taxable Income and Legal Reserve Return
GROWTH IN PROFIT DUE TO AN INCREASE IN TAXABLE INCOME AND IMPROVEMENT IN LEGAL RESERVE RETURN EVOLUTION OF AFP HABITAT CHILE’S PROFIT Ch$ bn. MAIN TOPICS 2024 – 2027 135.1 128.7 129.9 131.6 139.9 90.9 108.8 • Andean Region Consolidation • Focus on increasing taxable income 2018 2019 2020 2021 2022 2
Slide 45: Health
SEP 1/2024 QD VIDACAMARA iKC
Slide 46: Our Healthcare Model
OUR HEALTHCARE MODEL • Largest private network in Chile • Close relationship with the public insurer • Relevant size in inpatient, outpatient and dental • Know-how in individual and • Know-how in group health supplementary health insurance and relationship with insurance companies • Relationship dev
Slide 47: Success in Initial Three Phases of Our 2025 Vision
SUCCESS IN INITIAL THREE PHASES OF OUR 2025 VISION Phase 1 Phase 2 Phase 3 Phase 4 1. INSTITUTIONAL, INTEGRATED, AND NETWORKED HEALTHCARE REDESIGN OF CONSOLIDATION OF INSTITUCIONAL NETWORK THE NETWORK THE HEALTH 2. ORGANIZATION CONSOLIDATION BUSINESS NETWORK MEDICAL ROADMAP HEALTHCARE THAT SUPPORTS
Slide 48: Developing a Strategic Plan Across the Entire Network
DEVELOPING A STRATEGIC PLAN ACROSS THE ENTIRE NETWORK 1. • Interconnected network with a single electronic registry • 100% accreditation of our clinics INSTITUTIONAL, INTEGRATED, AND • Development of the Cardiovascular Center and expansion of the NETWORKED HEALTHCARE Cancer Institute • Consolidation
Slide 49: Reducing Regulatory Risk by Diversifying Sources of Income
REDUCING REGULATORY RISK BY DIVERSIFYING SOURCES OF INCOME REVENUE BREAKDOWN BY INSURER REDSALUD EBITDA BY CENTER TYPE 2015 June 2024 LTM 13% 13% 13% 30% 13% 20% 22% 20% 15% 23% 19% Future growth will come 25% 23% from outpatient healthcare 29% Ch$ 27.2 29% 28% 28% 37% 27% 41% 45% 47% bn. Ch$ 81.4 4
Slide 50: Strategic Alliances with World-Renowned Partners
STRATEGIC ALLIANCES WITH WORD-RENOWNED • Providing care since 1921 • Largest Healthcare Network in PARTNERS • Ranked #2 in the world by Newsweek Chile • Vision: To be the benchmark in • Care Priorities: Patients, private medical and dental health Caregivers, Community, in Chile; To be a very good pl
Slide 51: Advances in Regulatory Changes
ADVANCES IN REGULATORY CHANGES HEALTHCARE SYSTEM CONTEXT SHORT LAW OF ISAPRES NEXT STEPS • Adjustment of price to the Single Factors Table • Payment plan and extraordinary premium • In Dec 2019, the Regulator (Circ. 343) established and minimum contribution of 7% contained in per beneficiary is stil
Slide 52: Anticipating Changes in the Industry's Mix of Beneficiaries
ANTICIPATING CHANGES IN THE INDUSTRY’S MIX OF BENEFICICIARIES TOTAL BENEFICIARIES CONSALUD + VIDA CÁMARA Th. 1,068 1,056 1,058 1,042 Beneficiaries #3 1,036 1,035 1,035 949 976 929 825 347 349 361 Contributors #3 329 391 Growth (YoY) 282 291 263 519 544 159 Vida Cámara: 20.0% Drop (YoY) 666 666 666 6
Slide 53: Healthcare and Insurance Hedging Strategy
HEALTHCARE AND INSURANCE HEDGING STRATEGY HEALTH SECTOR NET PROFIT Ch$ bn. Consalud (IFRS) RedSalud Vida Cámara (Health Sector) Loss due Liability from the Short Law of Isapres 47.6 1.1 17.7 15.4 1.1 5.9 5.9 1.0 2.4 7.1 3.3 31.0 9.8 21.2 17.9 19.1 5.8 1.3 ( 1.5) (5.3) 9.6 ( 21.4) ( 8.0) (31.4) Liabi
Slide 54: Our Healthcare Model 2027
OUR HEALTHCARE MODEL 2027 Organic growth Insurers serving Consolidation of the together with demand to the healthcare network demographics healthcare facilities Analyze potential Using and working with Flexible organizations to alliances the data generated adapt to regulatory changes SEP /2024 54
Slide 55: Closing Remarks
CHAPTER Closing Remarks 03 SEP /2024 55
Slide 56: Strategic Plan and 2027 Goals
STRATEGIC PLAN AND 2027 GOALS Organic growth Organic growth with Consolidation of leveraging market Potential 4th market digital approach healthcare network opportunities Scale retail financing Economic value in Flexibility to adapt to Voluntary savings base spread regulatory changes Andean región D
Slide 57: Next Phase: Growth in Financial Business
NEXT PHASE: GROWTH IN FINANCIAL BUSINESS Business Consolidation Growth, Diversification Growth in Financial Business and Turnarounds 2012 2016 2017 2022 2023 2027 target Profit Ch$60- 80 bn Ch$90-120 bn Ch$130-180 bn ROE 15-18% 12-15% 12-15% SEP /2024 57
Slide 58: Corporate Presentation September 2024
Corporate Presentation September 2024 SEP BE LEADERS IN THE CONSTRUCTION OF SOCIAL AND ECONOMIC VALUE, /2024 THAT IMPROVES PEOPLE’S QUALITY OF LIFE
Inversiones La Construcción S.A. (ILC) — Investor Presentation (September 2024) on 6ix