QUARTERLY REPORT. Q Results

Transcription

1 QUARTERLY REPORT Q Results 1

2 Agenda SURA ASSET MANAGEMENT 1. Who we are QUARTERLY RESULTS 2. Economic outlook 3. Financial overview 4. Commercial overview 5. Investment performance 6. Regulatory framework Additional topics 7. International bond issuance 8. Awards and recognitions 2

3 SURA ASSET MANAGEMENT 3

4 SURA Asset Management Geographic and product diversification SURA Asset Management emerges as a company of Grupo SURA in connection to the acquisition made in December 2011 of the Pension, Investment Funds and Life Insurance businesses in Latin America Nº1 Company IN PENSION FUNDS IN LATINAMERICA This Company is the leader in the Mandatory Pension Fund sector in the Region and constitutes an important player in the Asset Management Industry More than 30 years of expertise The assets in Chile, Mexico, Peru, Colombia, El Salvador and Uruguay are backed not only by their performance in the last 30 years, but also by the experience that Grupo SURA and its subsidiaries have established over the past 70 years Pension Funds Asset Management Life Insurance Mortagages Pension Funds Asset Management Life Insurance Equities Pensions Asset Management 4

5 Our products Through the life cycle of our clients Regional leader in the pension fund sector Generating value through its range of voluntary products Life Insurance & Mandatory pensions 91% AUM Voluntary savings 7% AUM 2% AUM Annuities Mandatory pension fund administration Highly regulated market Stable cash flows Voluntary pensions and Asset Management Additional savings for retirement Low penetration with a high growth potential Life Insurance and Annuities Complementary products Customer service More than 30 years experience in the pension fund sector Geographic diversification 1 st Assets Under Management AUM US$115.4 Bn EBITDA Q1-2014, % of Total MEXICO 33.2% EBITDA US$ 104.7MM Operating Revenues US$ MM 1 st AUM Market Share 23.4% COLOMBIA EL SALVADOR 8% (2) 1 st Number of clients 16.6 MM 1 st Presence 6 countries Notes: 1. Figures as of March 31, Includes Proteccion s and AFP Crecer number of clients and AUMs. Those entities are not consolidated under SURA Asset Management consolidated financial statements. 2. SURA Asset Management only accounts for Proteccion s as a dividend income. This quarterly report does not reflect any equity pick up of Proteccion even though we have a 49.36% stake in the Colombian AFP PERU 20.8% CHILE 34.8% URUGUAY 3.3% 5

6 ECONOMIC OVERVIEW 6

7 Economic Landscape Chile In March, economic activity expanded 2.8% YoY, having a slight deceleration when compared to the 2.9% YoY growth registered in February. According to the Central Bank the deceleration continues to be provided by the mining sector as copper prices are falling 7.8% YoY in April. Consumer and Business Confidence Indicators for April, showed a monthly decreasing Reading from 53.4 to 52.6 and from 51.9 to 48.9 respectively. The Central Bank preserved its reference interest rate at 4.0% in its April meeting, after two consecutive cuts of 25 bps each. Annual headline inflation reached 4.3% in April (3.5% in the previous month). The figure exceeded market expectations of 3.9% and CB s target range (3.0% +/- 1.0%). Mexico Economic Activity increased 1.7% YoY in February, exceeding market expectations of a 1.6% increase, and the previous month 1.0% YoY figure. Exports grew 4,5% YoY in March, recording a second consecutive month trade balance surplus, which in March reached US$ 1.03 billion. In April 30th, the congress received the proposed energy sector s reform by-laws, which include the conversion of 100% state-owned Pemex and CFE into productive state companies and other measures that are expected to enhance private investments in this sector. 7

8 Economic Landscape Peru In February Economic Activity accelerated to 5,7% YoY, from 4,2% YoY registered in January, reaching a 10-month high and ending a downward trend of 4 months. April s Consumer Confidence jumped to 54 points from 51 points the previous month. Moreover, Business Confidence reached 54 points in April, higher than the previous month reading of 53 points. Colombia According to recent polls, none of the presidential candidates is likely to achieve 50% of the votes required to win the presidential elections on May 25 th, in which case a second round for the two top contenders will occur on June 15 th. On the economic front, the Central Bank, surprised the market with a 25 bps increase in its reference interest rate to 3.50%, arguing stability in macroeconomic data and inflationary pressures. The CB also declared that it expects good local and external economic perspectives, which would enhance an improvement in domestic demand along with a external sector recovery. 8

9 Economic Landscape Uruguay In June 1st, Uruguay will have primary elections to choose candidates for its presidential elections in October. According to recent polls, former president Tabare Vasquez is expected to be elected for Frente Amplio party and Jorge Larranaga for opposite Partido Nacional party. In the Economic Front, during march the Economic Activity contracted by 6.8% YoY, a higher setback from previous month of 3.1% and the worst figure registered since January Economic contraction was mainly caused by a fall in oil-derivative products, coal, food and beverages and paper products. El Salvador Economic Activity expanded 2.5% in February, beating the 2.2% YoY growth in January, and reaching the highest figure since October In Politics, on May 6 th the supreme court issued an arrest warrant for former President Francisco Flores on corruption charges. 9

10 FINANCIAL OVERVIEW 10

11 Geographic diversification Chile Mexico Peru Uruguay Colombia (1) Investment grade Aa3/AA-/A+ A3/BBB+/BBB+ Baa2/BBB+/BBB+ Baa3/BBB-/BBB- Baa3/BBB/BBB % 2% Operating Revenue MM % 25% 47% Operating expense MM % 25% 1% 50% Net income before minority interest 63.2 MM % 3% 15% 28% 44% 3% 8% EBITDA MM % 21% 33% Notes: 1. We do not consolidate Proteccion nor AFP Crecer even though we have a 49.36% ownership in Proteccion. We register those investments through dividend income. 11

12 Evolution of our financial figures Operating Revenue Operating Expense Chile Mexico Peru Uruguay Colombia 2013 Q Chile Mexico Peru Uruguay 2013 Q Net Income EBITDA Chile Mexico Peru Uruguay Colombia 2013 Q Chile Mexico Peru Uruguay Colombia 2013 Q Notes: 1. SURA Asset Management (Colombia) consolidated IFRS financial statements 2. The Company does not account for Colombia and El Salvador figures within its consolidated financial statements. We only account those investments through dividend income 3. Figures for the first quarter of 2013 do not appear because SURA Asset Management Colombia only began its consolidation process for the year end 2013 financial statements. 12

13 Consolidated Income Statement mar Gross premiums 166, ,662 Premiums ceded to reinsurers (12,514) (57,093) Net premiums 153, ,569 Fee and commission income 172, ,408 Investment income 13,135 55,089 Net realized gains and losses on financial assets available for sale 21,759 2,820 Gains and losses at fair value 19,050 87,145 Other operating revenue 23,417 21,836 Total operating revenue 403,360 1,586,867 Claims (66,235) (314,593) Movement in premium reserves (137,086) (498,924) Fee and commission expense (5,901) (21,819) Other operating and administrative expense (126,093) (568,547) Total operating expense (335,315) (1,403,883) OPERATING INCOME 68, ,984 Financial income 40, ,971 Financial expense (27,474) (57,316) TOTAL FINANCIAL INCOME (EXPENSE) 12, ,655 NET INCOME BEFORE INCOME TAX FROM CONTINUING OPERATIONS 80, ,639 Income tax (17,467) (104,424) NET INCOME 63, ,215 Attributable to: Controlling interest 60, ,965 Non-controlling interest 2,407 5,249 13

14 Consolidated Statement of Financial Position mar mar ASSETS NON-CURRENT LIABILITIES 3,253,651 3,170,873 NON-CURRENT ASSETS 6,598,131 6,534,833 Financial obligations 538, ,887 Financial assets 2,398,864 2,414,854 Technical reserves 2,043,570 1,902,372 Reinsurance assets 37,121 45,055 Deferred tax liabilities 538, ,481 Accounts receivable 130,306 2,601 Accounts payable 59,299 70,074 Investments in associates 447, ,829 Employee benefits 1,606 1,430 Investment properties 256, ,944 Provisions 49,033 87,479 Fixed assets 67,345 56,974 Deferred income liabilities (DIL) 23,305 24,150 Goodwill 1,727,304 1,719,794 Other intabgible assets 1,319,439 1,336,771 Deferred acquisition costs (DAC) 158, ,370 CURRENT LIABILITIES 1,241,545 1,147,332 Deferred tax assets 54,426 79,418 Financial obligations 134, ,883 Technical reserves 627, ,904 CURRENT ASSETS 1,746,142 1,828,184 Current tax liabilities 11,054 34,084 Cash and Cash equivalents 240, ,968 Employee benefits 30,816 47,144 Financial assets 1,281,739 1,197,787 Accounts payable 326, ,338 Accounts receivable 129, ,904 Provisions 110,326 96,330 Current tax 78,213 72,120 Other liabilities 785 2,649 Other assets 15,703 8,405 TOTAL LIABILITIES 4,495,196 4,318,205 SHAREHOLDERS EQUITY Subscribed and paid-in capital 1,360 1,360 Share premium 3,759,345 3,785,406 Other capital reserves 130,132 (54,868) Net income from the year 60, ,965 Translation differences (170,891) 2,196 TOTAL CONTROLLING INTEREST 3,780,749 3,967,059 Non-controlling interest 86,944 77,753 TOTAL EQUITY 3,867,693 4,044,812 TOTAL ASSETS 8,362,889 8,363,017 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 8,362,889 8,363,017 14

15 COMMERCIAL OVERVIEW 15

16 Regional presence Geographic exposition Assets Under Management (US$Bn) Market share (2) Clients (MM) Mandatory Pension Fund Fee (%) Base salary Direct employees (Aa3/AA-/A+) 21.10% % 14, ,569 SURA AM s Presence (A3/BBB+/BBB+) (Baa2/BBB+/BBB) 14.26% % 3, % % 9,093 1,181 1 (Baa3/BBB-/BBB) 36.90% % 13, ,897 AUM per Country Q Uruguay 3.3% Peru 20.8% Colombia 8.0% Chile 34.8% (Baa3/BBB-/BBB-) (Ba3/BB-/BB-) 18.20% % 1, % % 2, Mexico 33.2% Notes: 1. Proteccion s and AFP Crecer clients and AUMs are included 2. Mandatory pension fund market share as of March 31,

17 Evolution of our market figures Total Assets Under Management AFP Clients (Mandatory) Chile Mexico Peru Colombia Uruguay El Salvador Q Q Chile Mexico Peru Colombia Uruguay El Q Q Salvador Salary Base Mandatory fees 14,063 12,910 9,093 5,930 13,589 11,844 1,259 1,032 2,299 2, % 1.44% 1.83% 1.80% 1.74% 1.52% 0.95% 0.92% 1.99% 1.99% 1.13% 1.10% Chile Peru Colombia Uruguay El Salvador Q Q Chile Mexico (AUM) Peru Colombia Uruguay El Salvador Q Q Notes: 1. Proteccion s and AFP Crecer clients and AUMs are included 17

18 Regional leader in the pension fund sector Company Industria de Pensiones (Mandatorias, Voluntarias y Cesantias) Region Chile Mexico Peru Colombia Uruguay El Salvador Market Share % % % % % % % 2 LatAm 10.9% 23,4% 9.7% 11,0% Chile Colombia El Salvador México Perú 21,3% 27.9% 36,8% 3.0% 46,5% 14,1% 41,5% 18,2% % 6.6% 27,9% 3,0% Uruguay 3 9.2% 9,7% 26.1% 0.2% 20,7% 6,7% ,4% 9.2% 9,3% 7.5% 7,4% 26,2% 42,6% 26.1% 26,7% 42.7% 0,1% 7 6.9% 6,8% 17.0% 53,5% 17,0% 53.4% 8 9 4,4% 4.4% 13,2% 26,7% 26.6% 4,1% 11,7% 13.2% 4.3% 12.2% AUM Industria Total industry Number of players Notes: 1. Mandatory pension fund market share as of March 31,

19 INVESTMENT PERFORMANCE 19

20 Performance by Country CHILE AFP Type A Fund Higher Risk Type B Fund High Risk Real Return Type C Fund Moderate Risk Type D Fund Low Risk Type E Fund Lower Risk Capital 5.09% % % % % 5 Cuprum 5.84% % % % % 2 Habitat 5.69% % % % % 3 Modelo 6.10% % % % % 6 Planvital 6.40% % % % % 4 Provida 5.51% % % % % 1 Sistem 5.57% 4.08% % % % 0 Source: Superintendencia de pensiones de Chile Figures as of March Last 12 months performance. Nominal variation deflated by the change in UF for the period. MÉXICO AFORE SB1 More than 60 years Performance - Basic Siefores SB years SB years SB4 less than 37 years Afirme Bajío -2.14% % % % 11 Azteca 0.00% % % % 7 Banamex 1.07% % % % 4 Coppel -0.52% % % % 5 Inbursa 5.33% % % % 1 Invercap -1.75% % % % 12 Metlife -0.68% % % % 9 PensionISSSTE 1.76% % % % 3 Principal -2.54% % % % 10 Profuturo GNP -0.27% % % % 6 SURA 1.01% % % % 2 XXI Banorte -0.86% % % % 8 Weighted average 0.37% 1.43% 1.26% 1.23% Source: Comision Nacional del Sistema de Ahorro para el Retiro - CONSAR (Mexico) Figures as of March Last 12 months performance, Management Prices Nominal Values. 20

21 Performance by Country PERÚ AFP Type 1 Fund Asset Protection Real Return Type 2 Fund Mixed Integra -4.94% % % 2 Prima -5.22% % % 3 Profuturo -4.61% % % 1 Average -4.94% -5.24% -7.26% Source: Superintendencia de Banca, Seguros y AFP (Peru) Figures as of March Annualized real return for the last 12 months. Type 3 Fund Asset Appreciation URUGUAY AFAP AFAP Sura Estimated Net Real Return -2.93% 2 Integración AFAP -3.09% 4 Republica AFAP -2.90% 1 Unión Capital AFAP -2.94% 3 Source: Superintendencia de Servicios Financieros BCU Figures as of March Return for the last 12 months. COLOMBIA Mandatory Pension Fund Returns AFP Moderate Fund Conservative Fund Higher Risk Special Retirement Colfondos 6.99% % % % 1 Porvenir (*) 6.63% % % % 3 Protección (*) 6.72% % % % 4 Skandia 7.49% % % % 2 Weighted average (**) 6.75% 6.78% 8.27% 6.74% EL SALVADOR Public information not available for each of the AFPs of the System. The total system nominal return for the last 12 months is 2.32% as of December 2013, and the cumulative nominal return since June 1998 to June 2010 was 11.85%. Source: ASAFONDOS Source: CSuperintendencia Financiera de Colombia Figures as of March Return for the last 12 months. (*) Returns for February were reviewed and verified for Proteccion, Porvenir and the Weighted Average. (**) Weighted average for the daily balance of the funds. 21

22 REGULATORY FRAMEWORK 22

23 Chile: Reforms of the Pension Fund System An advisory Presidential Commission was created to study and comment the possible reforms that could take place within the pension system. The commission is comprised of 25 members, chaired by David Bravo and all members have a distinguished career within the industry. The commission has already been presented and confirmed. In January 2015 the committee should produce its first results. The Committee began meeting on May 28 with all sectors and associations involved. 23

24 Chile: Single Funds Act (Ley única de fondos) Initiative supported by the Ministry of Finance that will allow the Chilean capital market to be more efficient through a single, common and more tidy legal asset management framework. On January 7 th, 2014, the Single Funds Act was published (Law 20,712) with the intention to legislate on "Third Party Fund Administration and Individual Portfolios, and it will become effective as of May 1 st, Through this act, the industry will: Have a single regulatory framework applicable to Third Party Fund Managers and Individual Portfolios Have high standards for the treatment of potential conflicts of interest Incorporate a minimum level of technical expertise and knowledge to those who participate within the activities and functions of financial advisory and asset management Introduce a greater degree of flexibility in investment Fix the present taxation of different types of funds and their contributors Change the tax treatment currently applicable to foreign investors 24

25 ADDITIONAL TOPICS 25

26 International bond issuance Coupon 4.875% Yield 4.930% (T+230 pb) Issue price % Securities offered USD 500MM Maturity date April 17, 2024 Bookrunners Maximum rating of a Colombian issuer. Both ratings are one notch above the Republic of Colombia. Double rating: both the issuer and the notes have the same rating US$4.3bn ~9x the amount offered 286 orders Investors per type and region 26

27 Awards and recognitions Morningstar 2014 awarded SURA Investment Management Mexico as the best multiasset Mutual Fund company in the country. This award recognizes outstanding funds and investment managers in the United States, Canada, Europe, Asia, Africa and Latin America For the second consecutive year the prestigious British magazine World Finance recognized AFP Capital (Chile) in the Global Pension Funds Awards, the publication that annually recognizes major players in the financial service industry The Legal Counsel and Compliance Officer in SURA Asset Management Peru was included in the list of the 100 most influential and innovative organizational lawyers in the region, this assessment highlights the legal leadership and the solution of technical solutions to complex legal problems. SURA Asset Management in Mexico was recognized - for the ninth consecutive year - as a Socially Responsible Company. This award granted by the Mexican Center for Philanthropy and the Alliance for Corporate Social Responsibility measured indicators in five areas: quality of life, ethics and corporate governance, commitment to the community, care and preservation of the environment, and management of the Corporate Social Responsibility. 27

28 ANNEX 28

29 Exchange Rates mar-14 Local Currency to USD: MONEDA Moneda local a dólar mar-14 Mexico Average.MXN Chile Average.CLP Peru Average.PEN Colombia Average.COP Uruguay Average.UYU MXN / USD México Promedio México Último Chile Promedio CLP / USD Chile Último Local Currency to USD: CURRENCY Moneda local a dólar mar-14 Euro Last.EUR Mexico Last.MXN Chile Last.CLP Peru Last.PEN Colombia Last.COP Uruguay Last.UYU PEN / USD Perú Promedio Perú Último 2,100 2,050 2,000 1,950 1,900 1,850 1,800 1,750 1,700 1,650 COP / USD Colombia Promedio Colombia Último UYU / USD Uruguay Promedio Uruguay Último

30 Disclaimer The forward-looking statements contained herein are based on Management s current forecasts and outlook. Thus, SURA Asset Management assumes no obligation to update or correct the information contained in this presentation. 30

31 Key contacts Andres Bernal C. Chief Financial Officer Tatiana Uribe A. Corporate Finance & Strategic Development Managing Director Tel: