Quinenco S.A. · BCS:QUINENCO
Quinenco — Investor Presentation (March 2005)
30 slides from Quinenco's investor presentation, March 2005
Slide 1: Quiñenco
Quiñenco QUIÑENCO October March 20052003
Slide 2: Ownership Structure
Ownership Structure As of 12/31/2004 Quiñenco NYSE/ADR Luksic Chilean Stock Shareholders Group Exchanges 82% 5% 13% QUIÑENCO S.A. Financial Food and Telecom Manufacturing Other Services Beverage 11.4% 53.5% 30.8% 73.6% 51.2% 50.0% 5.7% 97.0% * Indalsa * Ex Lucchetti
Slide 3: Investments by Sector
Investments by Sector Quiñenco Other Manufacturing Food & Beverage 6% 9% 13% Telecom 8% Financial Services 64% US$1.7 billion (Corporate level book value as of 12/31/2004) 77% of Quiñenco’s investments are concentrated in core Financial Services and Food & Beverage sectors
Slide 4: Chilean Conglomerate
Chilean Conglomerate Quiñenco As a % of consolidated assets Argentina Brazil 3% 6% Peru 2% Chile 89% US$2.4 billion Figures as of 12/31/2004 Consolidated assets are concentrated in Chile, the most stable and fastest growing economy in South America
Slide 5: Leaders in their Categories
Leaders in their Categories Market Quiñenco Ranking Share (1) Financial Loans 2 18% Services Deposits 2 16% Beer Chile 1 90% Beverages Soft Drinks 2 22% Export Wine 2 15% Domestic Wine 2 17% Fixed Region X 1 83% Telephony Region XI 1 89% Cables Chile 1 37% Copper Cables Brasil 2 16% Products Brass m
Slide 6: Investment Criteria
Quiñenco Investment Criteria Brand and consumer franchise development potential Sufficient critical mass Prior operating or industry experience Access to strategic partners /commercial alliances Growth platform or add-on acquisition potential Controlling stakes Quiñenco applies consistent investment
Slide 7: Value Creation System
Quiñenco Value Creation System 9Value creation stems from: 9Acquisitions 9Restructurings 9Development and maximization of profitability of business portfolio 9Divestments Quiñenco has developed a process of value creation through the professional management of its ownership interests
Slide 8: Value Creation Since IPO
Value Creation Since IPO Quiñenco In US$ mlns Divestiture Yr Sold Proceeds Gain on Sale Food & Beverage Lucchetti Chile 2004 103,6 5,3 RE/Hotels Hotel Carrera 2003 25,7 (8,7) Telecom Entel shares 2001 169,9 94,8 RE/Hotels Plava Laguna 2001 37,1 2,4 Food & Beverage Lucchetti Argentina 2001 34,3 (14,0
Slide 9: Acquisitions and Capital Increases
Acquisitions and Quiñenco Capital Increases In US$ mlns ACQUISITIONS Retail 2004 Almacenes Paris 11,4% 63,5 Financial Services 2001 Banco de Chile 52,7% 809,8 Financial Services 1999 Banco Edwards 51,2% 387,5 Telecom 1999 Entel 14,5% 101,7 Real Estate/Hotels 1999 Plava Laguna 39.4% 31,3 Telecom 1999
Slide 10: Healthy Financial Structure
Healthy Financial Structure Quiñenco Corporate Level Assets Liabilities & SH Equity US$1.6 billion US$1.6 billion Cash Other ST debt Other 2% 5% 5% Liabilities 3% SH Equity LT debt 63% 29% LT Investments 93% Leverage: 0.58 As of 12.31.2004 A sound balance sheet is fundamental to Quiñenco’s ability t
Slide 11: Consolidated Debt Evolution
Consolidated Debt Evolution Quiñenco In mlns of US$ In mlns of US$ 1.200 1067.3 -12% 943.0 Corporate 606.9 622.9 3% 1.000 level Madeco 269.4 213.9 -21% 800 Telefónica 107.2 106.1 -1% 600 del Sur 400 Indalsa 83.3 0 -100% 200 Carrera 0.5 0 -100% 0 Total 1,067.3 943.0 -12% 12/31/2003 12/31/2004
Slide 12: Corporate Level Debt Structure
Corporate Level Quiñenco Debt Structure Total Corporate Level Debt (net) As of 12/31/2004 : US$590 mln Currencies Interest Rates 9/30/2004 12/31/2004 9/30/2004 12/31/2004 US$ 22% 0% Fixed 31% 63% Ch$ 78% 100% Variable 69% 37% Avg Spreads 1.4% 0.7% Debt Maturities 9/30/2004 12/31/2004 1 – 2 years 60%
Slide 13: Contribution to Net Income
Contribution to Net Income Quiñenco In mlns of US$ 12/31/2003 12/31/2004 Financial Services 70,0 81,8 Food & Beverage 26,9 18,0 Telecom 16,3 13,9 Manufacturing (19,7) 8,3 Other Operating Companies (9,4) -8,1 Total Operating Company Contributio 84,1 113,9 35% Corporate level & Others (14,8) (72,0) Ne
Slide 14: Consolidated Results
2004 Quiñenco Consolidated Results In mlns of US$ Change 12/31/2003 12/31/2004 Y-o-Y Revenues 657,2 686,2 4,4% Operating income 23,4 48,8 108,1% Non-operating income 43,6 8,7 -80,1% Minority interest 7,0 -12,1 Income taxes (4,7) (3,5) -25,8% Net income 69,3 41,9 -39,6%
Slide 15: Operating Companies
Quiñenco OPERATING COMPANIES October 2003
Slide 16: Banco de Chile
Banco de Chile Quiñenco Financial Services Quiñenco in Banco de Chile* Voting rights 53.5% Economic rights 29.9% *Following Banco de Chile’s share repurchase in April 2004, voting rights and economic rights increased from 52.2% and 29.2% to 53.5% and 29.9%, respectively
Slide 17: Banco de Chile
Banco de Chile Quiñenco ¾Net Profit in 2004 reached a record US$273.8 mln, up 14% over 2003 Fee Income Mlns of US$ 228 ¾2004 fee income up by 29.1% to 250 US$227.6 mln, accounting for 27% of 176 200 operating revenues +29% 150 ¾ Efficiency ratio improving; 51.2% as of 12/31/2004, down from 53.5% in
Slide 18: Banco de Chile
Banco de Chile Quiñenco Financial Services The most trusted name in banking in Chile Change In mlns of US$ 12/31/2003 12/31/2004 Y-o-Y Operating revenues 766,3 842,9 10,0% Provisions (110,5) (131,9) 19,3% Operating expenses (408,2) (431,1) 5,6% Net income 240,1 273,8 14,1% Total loans, net 11.503,0
Slide 19: CCU
CCU Quiñenco Food & Beverage In mlns of US$ 12/31/2003 12/31/2004 Change Sales 706,3 754,6 6,9% Operating income 84,3 105,3 24,9% Net income 99,5 81,4 -18,1% Assets 1.061,5 1.062,5 0,1% Shareholders' equity 512,6 542,0 5,7% Strong volume and price growth led to 25% increase in operating profit. EBIT
Slide 20: Extension into Snack Foods
Extension into Snack Foods Quiñenco CCU Indalsa 50% 50% Annual sales approximate US$10 mln CCU now competes in the ready-to-eat food category using it’s 90,000 client-strong distribution network
Slide 21: Telsur
Telsur Quiñenco Telecommunications In mlns of US$ 12/31/2003 12/31/2004 Change Sales 94,6 95,0 0,4% Operating income 22,6 22,5 -0,5% Net income 13,7 12,3 -9,9% Assets 242,4 247,3 2,0% Shareholders' equity 112,0 114,8 2,5% Fixed Telephony 2004 Non-regulated Services: Revenue Breakdown 9ISP (Wide ba
Slide 22: Telecommunications
Quiñenco Telecommunications Financial investment Quiñenco has a 5.7% stake in Entel, Chile’s leading telecommunications company as of 12/31/2004: BV of Investment US$64 mln Market Value US$103 mln
Slide 23: Madeco
Quiñenco Madeco Manufacturing In mlns of US$ 12/31/2003 12/31/2004 Change Sales 437,0 581,3 33,0% Operating income 13,7 45,2 229,4% Net income (loss) (30,8) 15,3 n/a Assets 650,4 615,2 -5,4% Shareholders' equity 271,4 284,4 4,8% Assets by Country Brazil Sales by Segment in 2004 23% Chile Wire & Cabl
Slide 24: Madeco
Quiñenco Madeco Manufacturing FOCUSED BUSINESS PLAN Strengthen commercial activities Develop specialized cable market Increase operating efficiencies Optimization of SG&A expenses + CAPITAL INCREASE & DEBT RESTRUCTURING Since 2003, Madeco has raised approx. US$160 mln in capital Debt has been
Slide 25: Outlook
Quiñenco OUTLOOK October 2003
Slide 26: Outlook - Growth Sectors: Financial Services
Quiñenco Outlook- Growth Sectors Financial Services Experience and track record since 1980’s in an industry with high profitability levels and continued growth potential Financial Services Industry Banking (loans) US$ 68 billion Pension Funds US$ 61 billion Insurance US$ 20 billion US$149 billion Ba
Slide 27: Outlook
Outlook Quiñenco Focus Divest businesses Portfolio with insufficient Optimization critical mass or Financial inadequate Services Manufacturing profitability Food & levels Beverage Telecom
Slide 28: Outlook - Growth Sectors: Food & Beverage
Quiñenco Outlook-Growth Sectors Food & Beverage Strong brands and extensive distribution networks help form competitive advantage for Quiñenco in Food and Beverage sector Industry Size Beverages US$ 2.0 billion Ready-to-eat US$ 1.2 billion US$ 3.0 billion
Slide 29: Investment Highlights
Investment Quiñenco Highlights Proven track record and experience in core business segments Agility and financial strength allows Quiñenco to take advantage of business opportunities as they arise Diversified Chile risk Ability to attract strategic partners and commercial alliances contributes to de
Slide 30: NAV/Share Price Evolution
NAV/Share Price Evolution Quiñenco As of 12/31/2004 NAV US$1.989 bln Mkt Cap US$1.356 bln Share price in Ch$ 1200 +29% 1000 1027 800 784 +28% Share price Discount 600 700 NAV per share = 32% 545 400 200 0 Dec 03 March 04 June 04 Sep-04 Dec-04 The positive evolution of group operating companies is re