COMPANY OVERVIEW ILC. Presentation Prepared for Santander 14 th Latam Conference London Ignacio González - CFO May Privado y Confidencial

Transcription

1 COMPANY OVERVIEW ILC Presentation Prepared for Santander 14 th Latam Conference London Ignacio González - CFO May 2016 Privado y Confidencial 1

2 ILC: WHO WE ARE Estrictamente Privado y Confidencial Mission: We aim to improve the quality of life of our clients, by offering them efficient and accessible services, mainly in the financial and health industries; favoring the creation of value, efficiency and sustainability, guided by the values of our controller, the Chilean Construction Chamber (CChC) Our value proposal: 1. High quality group, focused on nondiscretionary industries 4. Core business in financial services offers steady cash flow & operational know how 3. Generating shareholder value through disciplined capital management 2. Strategical expertise in realizing value 5. Health care operation present in underpenetrated market offers higher profitability upside 6. Multiple avenues for consolidation & growth Privado y Confidencial 2 2

3 ILC IS AN IMPORTANT CHILEAN GROUP, FOCUSED ON THE FINANCIAL AND HEALTH INDUSTRIES Consolidated Net Income 2015: US$105 million Δ+ 5% over 2014 Market Capitalization (as of April 30 th ): US$1.2 billion AuM 2015: US$48 billion in AFP Habitat and Inversiones Confuturo Local Risk Rating: AA+ Dividend yield: 5.9% in 2015 (at IPO s price) Consolidated Employees: 12,900 approximately in Chile and Peru Financial figures as of December 2015 / FX: CLP$ per US$ / Market capitalization source: Bloomberg Privado y Confidencial 3 3

4 1. High quality group, focused on non-discretionary industries Privado y Confidencial 4

5 ILC S TRACK-RECORD IS SUPPORTED BY A SOLID COMPETITIVE POSITION IN THE SECTORS WHERE IT PARTICIPATES FINANCIAL AFP Habitat: #2 Pension fund company in Chile in terms of contributors, affiliates, AuM and voluntary products Inversiones Confuturo: #2 Life insurance company in Chile in terms of AuM and #3 in terms of direct premiums Consalud: #2 Mandatory health insurance in Chile in terms of contributors and #3 in terms of beneficiaries Red Salud: #2 largest inpatient and outpatient network in Chile #1 dental network in Chile HEALTH Privado y Confidencial 5 5

6 % Total Dividends Distrib. by Subsidiaries (US$122 million) % Consolidated Net Income (US$105 million) ILC s Ownership (%) Industry Estrictamente Privado y Confidencial ILC PARTICIPATES IN NON-DISCRETIONARY SECTORS, WHICH PROVIDES STEADY CASH FLOW Non- Insurance Sector Insurance Sector Pension Funds Mandatory Health Insurance Healthcare Banking Life Insurance Supplemental Health Insurance 67.5%* 99.9% 89.9%* 51.0% 75.5%* 99.9% 23% -6% 76% 8% 3% 1% 75% 6% 3% 0% ** 16% 0% Figures as of December 2015 / FX: CLP$ per US$ * Participation of ILC in Habitat, Red Salud and Confuturo changed to 40.3%, 99.9% and 77.9% respectively. In May 6 th 2016 ILC signed a MoU to acquire the remaining 22.1% stake in Inversiones Confuturo ** In 2015 Inversiones Confuturo received US$19 million from Corpseguros in dividends, assigned to pay debt amortizations Privado y Confidencial 6 6

7 2. Strategical expertise in realizing value Privado y Confidencial 7

8 ILC ACTIVELY MANAGES ITS ASSETS TO INCREASE THEIR VALUE, ALWAYS ORIENTED TO ITS LONG TERM VISION ILC utilizes its knowledge in the financial and health industries through a strategy focused in: Market Opportunities 1 ILC adds value in its subsidiaries through a frequent performance control 1 2 ILC s Subsidiaries ILC supports subsidiaries decisions and investment plans ILC spread the values and principles of ILC s controller group through all the organization 2 ILC adds value when external opportunities appear through associations with other experienced partners or through investments/divestments in companies that match/mismatch its strategy focused in the financial and health industries Privado y Confidencial 8 8

9 ILC ACTIVELY MANAGES ITS ASSETS TO INCREASE THEIR VALUE, ALWAYS ORIENTED TO ITS LONG TERM VISION ILC s main milestones: YEAR COMPANY INDUS TRY ACTION DES CRIPTION 1980 Creation ILC starts operations 1981 Pension Funds Creation AFP Habitat starts operations in Chile 1984 Mandatory Health Insurance Creation Isapre Consalud starts operations in Chile 1985 Life Insurance Creation Seguros La Construcción starts operations in Chile 1996 Pension Funds Association ILC and Citigroup became partners in AFP Habitat 2004 Life Insurance Divestment ILC disposed its life insurance business, selling 100% to Bicecorp 2008 Healthcare Creatio n Red Salud was constituted as a parent company to manage ILC s healthcare assets 2009 Disability & Survivorship Insurance Creation Vida Cámara starts operations, focused in the D&S Insurance in Chile 2010 Pension Funds Disassociation Citigroup sold its stake in AFP Habitat, ending its parnership with ILC 2011 Supplemental Health Insurance Creation Vida Cámara starts its supplemental health insurance operation in Chile 2011 Capital Markets Financing ILC was inscribed in the Chilean Superintendence and successfully completed its first bond issuance 2012 Capital Markets Financing ILC successfully opened to the market, being the largest IPO in Chile (US$468 million) 2012 Pension Funds Creation AFP Habitat starts operations in Peru 2012 Disability & Survivorship Insurance Creation Vida Camara starts operations in Peru 2013 Life Insurance Acquisition ILC acquired 67% of Inversiones Confuturo (former Corp Group Vida Chile) (US$167 million) 2014 Life Insurance Acquisition ILC acquired 28% of Corpvida (US$52 million) 2015 Banking Acquisition ILC acquired 50.9% of Banco Internacional, entering the Chilean banking industry (US$100 million) 2015 Life Insurance I nvestment ILC executed a capital increase in Inversiones Confuturo (US$37 million) 2016 Life Insurance I nvestment ILC executed a capital increase in Inversiones Confuturo (US$37 million) 2016 Pension Funds Association ILC and Prudential became partners in AFP Habitat 2016 Life Insurance I nvestment MoU to acquire the remaining 22.1% stake in Inversiones Confuturo held by Corp Group Banking 2016 Healthcare I nvestment ILC acquires the remaining 10% stake in Red Salud held by the Mututal de Seguridad Privado y Confidencial 9 9

10 % 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 10. 0% 5.0% 0.0% -5.0% -10.0% % 18. 0% 16. 0% 14. 0% 12. 0% 10. 0% 8.0% 6.0% 4.0% 2.0% 0.0% Estrictamente Privado y Confidencial EXAMPLE OF VALUE CREATION: GROWING INVERSIONES CONFURUTO ILC entered the life insurance industry in 2013, through the acquisition of 67% of Inversiones Confuturo (former Corp Group Vida Chile) In May 2016, after three capital increases, ILC signed a MoU to acquire the remaining 22.1% stake of Inversiones Confuturo The rationale behind this transaction is to add another retirement alternative to ILC, besides programmed withdrawals Inv. Confuturo Direct Premiums (M US$) & Market Share Inv. Confuturo AuM (B US$) & Market Share 9.4% 8.1% 8.5% 17.0% 16.6% 16.3% 16.0% 7.3% Net Result Confuturo + Corpseguros (M US$) ROE Inversiones Confuturo (Net Result / Ave. Equity) 10.7% % 4.9% FX: CLP$ per US$ Source: AACH -7.4% Privado y Confidencial 10 10

11 ILC S VALUE GENERATION IS LED BY AN EXPERIENCED BOARD AND MANAGEMENT ALL ACROSS THE COMPANY BOARD OF DIRECTORS - ILC Jorge Mas F. Chairman Civil Engineer U. Chile Daniel Hurtado P. Vice Chairman Civil Constructor U. Católica Chile Sergio Torretti C.* Director Entrepreneur Gastón Escala A. Director Civil Engineer U. Católica Chile Lorenzo Constans G.* Director Civil Constructor USACH Alberto Etchegaray A. Director Civil Engineer U. Católica Chile René Cortázar S.* Independent Director Commercial Engineer U. Católica Chile Ph.D. Economics - MIT * Members of ILC s Directors Committee BOARD AND SENIOR MANAGEMENT Jorge Mas F. Chairman Juan Benavides F. Chairman Joaquin Cortez H. Chairman James Callahan F. Chairman Alberto Etchegaray A. Chairman Pedro Grau B. Chairman Kurt Reichhard B. Chairman Pablo González F. CEO Cristián Rodríguez A. CEO Christian Abello P. CEO Mario Chamorro C. CEO Sebastián Reyes G. CEO Marcelo Dutilh L. CEO Alfonso Cortina G. CEO Privado y Confidencial 11 11

12 BEING A HIGH QUALITY GROUP THAT ADDS VALUE REQUIRES STRICT CORPORATE GOVERNANCE STANDARDS The Company is controlled by the Chilean Construction Chamber, a non-profit social entity, which annually elects 6 of the 7 directors of ILC during its Shareholders Meeting International Investors 16% Local Investors 17% ILC elects Board Members 67% ILC s Board of Directors ILC s Management The Chairman is elected for one year, renewable for a second period. Afterwards, he assumes as Vice Chairman and then Director to give continuity to the Board Directors Committee Investment Committee ILC has a Committee of Directors, responsible for reviewing financial information and auditor s reports, related parties transactions, remuneration systems, internal auditing procedures, among others ILC has also an Investment Committee responsible for reviewing financial decisions undertaken by ILC Subsidiary s Board of Directors Subsidiary s Management Each of ILC s subsidiaries has and independent Board of Directors and Management, who maximize the return of its affiliate Other initiatives to enhance ILC s Corporate Governance: Corporate Governance Manual, Ethic Code, Crime Prevention Model, Whistle Blows Channel, Comptroller, Management Control Department, among others Privado y Confidencial 12 12

13 3. Generating shareholder value through disciplined capital management Privado y Confidencial 13

14 Base 100 Estrictamente Privado y Confidencial ILC S VALUE GENERATION RESULTS IN AN ATTRACTIVE DIVIDEND YIELD Since its IPO, ILC has distributed a dividend yield close to 6% annually ILC has a dividend policy that distributes between 60% to 80% of its Distributable Net Income (Ordinary net income Profitability of AFP Habitat s encaje) RETURN OVER IPSA 19.2% (Since IPO in 2012) DIVIDEND YIELD 26.4% (At IPO s Price in 2012) ROE % ILC S Share price return over IPSA IPO S PRICE - ILC $7,061 IPSA 4,393 ILC IPSA CLOSING PRICE ILC April 2016 $7,790 IPSA 4,002 Privado y Confidencial 14 14

15 ILC HAS DELIVERED CONSISTENT RETURNS DURING THE LAST DECADE ILC s added value is reflected in returns and both ordinary and extraordinary net income ILC s Net Income (M US$) and ROE Ordinary Income (MUS$) Extraordinary Income (MUS$) ROE 39% 32.1% 34% 29% 22.4% 24% 19.5% 19.3% 18.4% 19% 14.1% 11.3% % 14.3% 14% % 4% (40) -1% -0.9% FX: CLP$ per US$ Privado y Confidencial 15 15

16 Estrictamente Privado y Confidencial ILC S DISCIPLINED CAPITAL MANAGEMENT HAS BEEN RECOGNIZED BY RATING AGENCIES Total Debt (Consolidated): US$ 1,385 million Net Debt (Consolidated): US$ 937 million Total Debt (ILC): US$ 444 million Total Cash (ILC): US$ 94 million ILC s Amortization Schedule as of December 2015 (Individual, M US$) Banks Bonds > 2026 ILC s Debt Breakdown as of December 2015 (Individual) By Type Bonds 25% By Currency UF 17% Fixed / Variable Variable 12% Banks 75% Figures as of December 2015 / FX: CLP$ per US$ CLP 83% Privado y Confidencial Fixed 88%

17 4. Core business in financial services offers steady cash flow & operational know-how Privado y Confidencial 17

18 CHILEAN PENSION INDUSTRY SHOULD GROW DUE TO DEMOGRAPHIC AND ECONOMIC FACTORS Population in age to work / retired (Th.) Retirement Alternatives Comparison Programmed Withdrawal Annuity 1,738 2,075 2,499 3,049 Pension Payment Period Limited Unlimited Funds Ownership From the pensioner From the insurance company Chance of inheriting savings Yes No 10,495 11,269 11,841 12, Mayores Older than de 60 En In age edad to de work trabajar Pension Amount Variable Fixed Chilean GDP per capita (PPP, US$) Number of Programmed Withdrawal and Annuity in SCOMP* participants (Th.) 22,071 18, ,407 7,339 9,849 12, Retiro Programmed Programado Withdrawal Renta Annuity Vitalicia * SCOMP: Sistema de Consultas y Ofertas de Monto de Pensión. Sistem that provides information regarding the different retirement alternatives for pensioners in Chile Source: Superintendencia de Pensiones, Banco Mundial, INE Privado y Confidencial 18 18

19 Average Taxable Income (US$) AuM (Billion US$) Estrictamente Privado y Confidencial AFP HABITAT: ESTABLISHED COMPANY WITH A SOLID MARKET POSITION AND PERFORMANCE, EXPANDING INTO PERU Since 2016 ILC is associated with Prudential Financial Inc. in AFP Habitat, maintaining 40.3% of the property each AFP Habitat is consolidating its position in the high income segment in Chile, through an efficient operating model The Company is expanding its greenfield presence in Peru, were operates the auction for new affiliates in the private pension system (PPS) Average taxable income in Chile SG&A over AuM in Chile 1,100 Average Taxable Income Industry Additional Taxable Income AFP Habitat Habitat Provida 1, Cuprum Capital Planvital Modelo % 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% SG&A over AuM (%) #2 Player in Chile in terms of contributors, affiliates, AuM and voluntary Products as of December 2015 #1 in annual returns in the A,B,C funds and #2 in the D and E funds as of December 2015 FX: CLP$ per US$ Source: Superintendencia de Pensiones Chile Privado y Confidencial 19 19

20 Affiliates 1 Auction new affiliates into the Peruvian PPS 2 Auction 12. 0% 10. 0% 8.0% 6.0% 4.0% 2.0% 0.0% Estrictamente Privado y Confidencial AFP HABITAT: ESTABLISHED COMPANY WITH A SOLID MARKET POSITION AND PERFORMANCE, EXPANDING INTO PERU Affiliates & Market Share AFP Habitat Peru SG&A over AuM in Peru 16, , , , , , , , , % 1.2% 2.0% 3.2% 4.3% 6.0% 7.0% 8.2% 9.2% 10.3% 11.3% AuM (Million US$) 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Integra Prima Profuturo Larger scale Affiliates Mkt. Share - Habitat '15 Habitat '14 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% SG&A over AuM (%) AFP Habitat started greenfield operations in Peru, through the first auction for new affiliates into the Peruvian PPS in 2013 AFP Habitat has the lowest fee in the industry, with 0.38% over contribution and 1.25% over AuM FX: PEN$3.41 per US$ Source: Superintendencia de Pensiones Perú, INEI Perú, INE Chile #1 in annual returns in the fund 2 as of December 2015 Peruvian pension funds industry presents an attractive perspective due to its large population of 31 million (vs. 17 million in Chile), and the low labor formality rate which is close to 30% (vs. 85% in Chile) Privado y Confidencial 20 20

21 INVERSIONES CONFUTURO: CONSOLIDATING ITS FOOTPRINT AS AN ANNUITY MARKET LEADER IN CHILE The Company aims to strengthen its operational and financial performance in the annuity market, being a good alternative to the programmed withdrawal retirement Annuity Market Share (2015, Direct premiums) Leverage Evolution Consorcio 17.2% Metlife 16.1% Others 30.2% US$3.3 Billion Inv. Confuturo 15.6% Bice 9.7% Penta Vida 11.2% Confuturo Corpseguros Result on Investments / Investment Portfolio Investment portfolio breakdown by Instrument 5.5% 4.9% 4.6% 4.3% 4.8% 4.6% 5.3% 4.1% 3% 4% 5% 6% 11% 13% 13% 15% 80% 79% 78% 76% Confuturo Corpseguros Annuity / Programmed withdrawal preference (Chile, 2015): ~ 70% / 30% 6% 5% 4% 2% Equity Fixed Income Real Estate Others Inv. Confuturo s Annuity Premiums 2015 (% Total): ~85% of total Premiums Privado y Confidencial FX: CLP$ per US$. Source: Aseguradores de Chile, SVS, Superintendencia de Pensiones Chile

22 ROE Estrictamente Privado y Confidencial BANCO INTERNACIONAL: FOCUSED ON GENERATING MARKET RETURNS ILC controls Banco Internacional, Factoring Baninter and Baninter Corredora de Seguros since October 2015 Banco Internacional has a global market share of 0.6% and 0.9% in terms of total and commercial loans respectively The Company aims to strengthen its operational, commercial and risk performance, in order to reach industry returns Banco Internacional should strengthen its position in the small and medium size companies Second Chilean bank in terms of capitalization ratio as of December 2015 Chilean Bank Industry: ROE & Loans 30.0% Falabella 25.0% Retail Universal 20.0% Ripley Large Size BCI Santander Bice Corpbanca Consorcio Itau 15.0% BBVA Security Scotiabank Estado 10.0% I ntern. March '16 5.0% HSBC Medium Size I nternacional '15 0.0% Chile Loans (US$ Billion) ROE Evolution Banco Internacional Loans Breakdown (2015) 16.8% 18.0% 18.6% 15.2% 17.5% 12.9% 14.7% 14.8% 17.2% 14.3% Real Estate Companies 23.3% Small Size Companies 21.4% 1.3% 3.7% 3.0% 0.1% Banco Internacional Industry Large Size Companies 29.5% Medium Size Companies 25.8% Privado y Confidencial Figures as of December FX: CLP$ per US$. Source: Superintendencia de Bancos e Instituciones Financieras US$1.2 Billion

23 5. Health care operation present in under-penetrated market offers higher profitability upside Privado y Confidencial 23

24 Per capita health expenditure (US$/hab.) Estrictamente Privado y Confidencial CHILEAN DEMAND FOR HEALTHCARE SHOULD INCREASE DUE TO ECONOMIC DEVELOPMENT AND LIFESTYLE United States Mexico Turkey 2 X Nueva Zeland Spain Portugal Greece Slovenia Korea Hungary Czech Rep. Israel Slovak Rep. Estonia Poland Netherlands Germany Sweden Belgium Austria France Canada Denmark Japan Iceland Australia Finland Ireland Italy United Kingdom Switzerland Norway 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Per capita GDP (US$/hab.) Risk Factors Older Population Diabetes (% hab years) 6.5% 6.9% 9.6% 9.8% 10.4% 15.9% 22% 9% 91% CHILE % Obesity (% hab.> 15 years) 16.6% 17.5% 19% 25.1% 32.4% 35.3% 27% 15% OECD % 73% % of population aged less than 65 % of population aged 65 and over Tobacco (% hab.> 15 years) 11.3% 11.8% 13.7% 19.7% 23.9% 29.8% Source: Health at a Glance 2013, 2015 Privado y Confidencial 24 24

25 CHILE PRESENTS A LACK OF HEALTH INFRAESTRUCTURE AND SPECIALISTS COMPARED TO OTHER DEVELOPED COUNTRIES Doctors (Every 1,000 habitants) Nurses (Every 1,000 habitants) Beds (Every 1,000 habitants) MRI Equipment (Every 1,000,000 habitants) , , Source: Health at a Glance 2015 Privado y Confidencial 25 25

26 AVANSALUD TABANCURA BICENTENARIO MEGASALUD % 12% 10% 8% 6% 4% 2% 0% 16% 14% 12% 10% 8% 6% 4% 2% 0% 19% 19% 18% 18% 17% 17% 16% 16% 15% 20% 10% 0% -10% -20% -30% -40% -50% Estrictamente Privado y Confidencial RED SALUD IS ONE OF THE LARGEST CHILEAN HEALTHCARE NETWORKS, WITH 11 HOSPITALS AND 31 OUTPATIENT CENTERS Occupancy Rate Revenues (M US$) and EBITDA Margin Main Focus for 2016 Outpatient services: 2 M outpatient services 1.7 M dental services Inpatient & Outpatient services / Santiago 68.4% 12% 12% 12% 9% 8% % 13% 13% 11% 9% Red Salud s operational performance has been impacted by the important investment plan undertaken during the last 5 years for approximately US$300 million Since end-2015 Red Salud reinforced its focus and strategy into one oriented to costefficiency and profitability. The latter is based on: Inpatient & Outpatient services / Santiago 63.7% % 18% 18% 17% 17% Management Network Investments Inpatient & Outpatient services / Santiago % % 6% 73 9% 73.3% % Privado y Confidencial 26 26

27 24,000 18,000 12,000 6, % 4.5% 3.0% 1.5% 0.0% Estrictamente Privado y Confidencial ILC PROVIDES MANDATORY AND SUPPLEMENTAL HEALTH INSURANCE THROUGH CONSALUD AND VIDA CAMARA Consalud has been impacted by a pronounced deterioration in margins due to a higher frequency and cost per beneficiary Market Share (Contributors) Total: 1.9 M Direct costs / Revenues Colmena 16.6% Consalud 20.0% Cruz Blanca 21.7% 82.8% 84.7% 84.2% 88.2% Banmédica 19.8% Masvida 16.8% Vida Tres 4,0% Óptima 1,0% Trials due to adjustments in contract s base price 5.4% 2.9% 2.3% 9,760 12,156 4, % 19,181 Trials % Adjustment in contract s base Price (+UF) Vida Camara Beneficiaries Evolution (Th.) Consalud has developed complementary products to attract new contributors Privado y Confidencial Source: Superintendencia de Salud

28 6. Multiple avenues for consolidation & growth Privado y Confidencial 28

29 ILC S STRATEGY FOR IS BASED ON: 1. Strengthening and capitalizing its subsidiaries 2. Improve efficiency and scale 3. Regional growth in those industries were the Company has a consolidated track-record 4. Operational development under sustainability principles and CChC values Privado y Confidencial 29 29

30 BASED ON S FOCUSES, ILC HAS SEVERAL OPPORTUNITIES: AFP Habitat: Consolidate its association with Prudential Strengthen its regional footprint in Chile and Peru Inversiones Confuturo: Maintain its leadership in the growing annuity industry Further improve returns on investments, maintaining an adequate leverage Banco Internacional: Vida Camara: Consalud: Improve operational and administrative efficiency Focus in medium and small size companies Consolidate its new Management Team Consolidate in Supplemental Health Insurances Red Salud: Improve operational efficiency and synergies between the network Further improve efficiencies in costs and SG&A Continue developing innovative complementary products Consolidate its new Management Team Privado y Confidencial 30 30

31 Closing Remarks Privado y Confidencial 31

32 INVESTMENT HIGHLIGHTS Estrictamente Privado y Confidencial One of the largest Asset Managers in Latam Consolidated controlling shareholder Demonstrated trackrecord in nondiscretionary industries Solid and stable credit risk rating Proven access to capital markets Attractive and consistent dividend yield Privado y Confidencial 32 32

33 Appendix: Summarized Financial Statements / Industries where ILC participates at a glance Privado y Confidencial 33

34 SUMMARIZED FINANCIAL STATEMENTS AND SUBSIDIARIES FIGURES Balance Sheet Th. US$ Variatio n NON-I NSURANCE ACTI VI TY ASSETS Total Current Assets 1,975, , % Total non current assets 1,326,116 1,080,808 23% TOTAL NON-I NSURANCE ACTI VI TY ASSETS 3,301,605 1,391, % TOTAL NON-I NSURANCE ACTI VI TY ASSETS Total insurance activity assets 7,590,502 6,833,452 11% TOTAL ASSETS 10,892,107 8,225,125 32% NON-I NSURANCE ACTI VI TY LI ABI LI TI ES Total current liabilities 2,081, , % Total non current liabilities 640, ,707 6% TOTAL NON-INSURANCE ACTIVITY LIABILITIES 2,721, , % I NSURANCE ACTI VI TY LI ABI LI TI ES Total insurance activity liabilities 7,063,579 6,348,478 11% TOTAL LI ABI LI TI ES 9,785,569 7,256,156 35% Equity attributable to owners of the parent company 714, ,575 3% Non-controlling interests 392, ,394 41% TOTAL EQUI TY 1,106, ,969 14% TOTAL LI ABI LI TI ES AND SHAREHOLDERS EQUI TY 10,892,107 8,225,125 32% I ncome Statement Th. US$ Variatio n NON-I NSURANCE ACTI VI TY Operating result 150, ,123 8% Non operating result (327) 20, % Profit (loss) before tax 150, ,601-6% Income tax expense (36,148) (29,461) 23% Non-I nsurance activity profit 114, ,140-12% I NSURANCE ACTI VI TY Operating result 33,358 11, % Non operating result 9,074 2, % Profit (loss) before tax 42,432 14, % Income tax expense (4,024) 1, % I nsurance activity profit 38,408 16, % PROFI T (LOSS) FOR THE PERI OD 152, ,259 4% Profit attributable to owners of the parent company 105, ,796 4% Profit attributable to non-controlling interest 47,262 45,464 4% I ndividual Results (2015, Th. US$) AFP Habitat Co nfuturo Co rpseguro s Banco I nternacio nal R ed S alud Co nsalud Vida Camara I ndustry Pensio n Funds Life I nsurance Life I nsurance B ank Healthcare Mandato ry health Vo luntary health Pro vider insurance insurance R evenues 216, , ,666 41, , , ,209 EB I TDA / EB I TDAE 126, ,108 14,941 - Net I nco me 117,665 8,422 35, ,333 8,057 (6,471) Assets 497,308 4,205,228 3,186,081 1,654, , , ,914 Liabilities 99,288 3,961,741 2,935,734 1,525, , ,569 90,420 Equity 398, , , , ,963 18,160 34,493 % o wnership I LC 67.5%* 75.5%* 75.5%* 51.0% 89.9% 99.9% 99.9% Mark et Capitalizatio n 1,146, Figures as of December 2015 / FX: CLP$ per US$ Privado y Confidencial * Participation of ILC in Habitat, Red Salud and Confuturo changed to 40.3%, 99.9% and 77.9% respectively. In May 6 th 2016 ILC signed a MoU to acquire the remaining 22.1% stake in Inversiones Confuturo

35 PENSION NET SALARY GROSS SALARY Estrictamente Privado y Confidencial ILC IS FOCUSED ON SECTORS THAT PROVIDE STEADY CASH FLOW Pension Funds Pensions Health Insurance Healthcare Providers 10% Mandatory contribution: 1.27% of gross salary Voluntary Savings 7% Mandatory contribution Voluntary additional contribution 0% - 40% Taxes Voluntary contribution Programmed withdrawal Annuity Privado y Confidencial 35 35

36 IN 2015 CHILEAN PENSION FUNDS REPRESENTED 71% OF TOTAL GDP Market Players (100% private) Fee (% on gross salary, capped at US$2,642) 1.27% 0.47% 0.77% 1.44% 1.48% 1.54% Taxable Income (Average, US$) US$ 888 US$662 US$809 US$797 US$ 1,593 US$642 Affiliates 10 Million Annual Contributors 5.6 Million Pensioners 1.3 Million 32.6% % 30.8% % 36.8% % % % % 27.4% % AuM US$154 Billion % 26.2% % 2.1% % Invested in: 16.6% 15.0% D 8.8% % % * 97.2% correspond to dependent workers. Distribution of assets in the Industry by type of fund E A 15.3% B 16.1% With a return of: 4.03% 3.79% 5 7.9% 2.88% 2.75%.2,49% 2.16% % 5.4% Return of funds in the last 12 months (real terms) 2.40% 2.02% HABITAT INDUSTRIA NDUSTRY 0.84% 0.70% 21.3% % E Less risk C 37.0% A B C D E A FX: CLP$ per US$ Privado y Confidencial More risk Source: Superintendencia de Pensiones

37 97% OF CHILEAN POPULATION IS COVERED BY HEALTH INSURANCES, OF WHICH 75% IS MANAGED BY THE PUBLIC SECTOR (FONASA) Supporter (7% on taxable salary, capped at aprox US$3,000; with an average contribution of 10% in the case of Isapres) Government Insurer Isapre Fonasa Others Total Beneficiaries 3.3 MM Total Beneficiaries 13.5 MM Total Beneficiaries 1.1 MM Banmédica 20.7% Consalud 20.7% Armed Forces Chilean Army Masvida 16.8% Optima 0,6% Vida Tres 4,3% Cruz Blanca 20.9% Colmena 15.9% Chilean Navy Chilean Air Force Chilean Police Market share at the level of beneficiaries to open Isapres A - B C - D Provider Private sector, according to chosen plans with Isapres Public sector Public sector and some private providers Private sector, according to chosen plans with Isapres Market Players (Private and open) Average Contribution (Annual, US$) Loss Ratio * E A $ 1,696 $ 2,454 $ 2,121 $ 2,960 $ 1,869 $ 2,007 D B $ % 86.9% 84.9% 85.7% 56.6% 89.2% 87.9% C FX: CLP$ per US$ * In November 2014 Ferrosalud changed its name into Óptima Privado y Confidencial Source: Superintendencia de Salud, statistics Dimensionamiento del Sector de Salud Privado en Chile

38 THE PRIVATE HEALTHCARE SYSTEM PLAYS AN IMPORTANT ROLE TO MEET CHILEAN DEMAND FOR HEALTH Total Health Expenditure 8.8% of GDP Doctors ~ 30 thousands Geographic Distribution of Doctors in Chile Hospitals and Clinics ~ 350 Public 54% Public 48% Geriátric and Psiq. Clinics 11.5% Others 8.6% 53.7% Public Hospitals Private 46% Private 52% North 2,418 doctors 83.7 habitants by doctor Mutuals 3.4% Private Clinics 22.7% Center 21,899 doctors 47.1 habitants by doctor Red Salud: 11 private clinics Nurses ~99 thousands Public 54% Dentists ~ 16 thousands Public 30% South Center 4,415 doctors 75.7 habitants by doctor South 1,264 doctors 85.1 habitants by doctor Geriatric and Psiq. Clinics Mutuals Private Clinics 2% 4% 18% Beds ~ 38 thousands Others 10% 66% Public Hospitals Private 46% Private 70% Red Salud: 858 beds Privado y Confidencial Source: Dimensionamiento del Sector de Salud Privado en Chile Health at a Glance 2015

39 ILC PARTICIPATES IN THE LIFE INSURANCE INDUSTRY, FOCUSING ON ANNUITIES Life Insurances Direct premiums: BUS$ companies General Insurances Direct premiums : BUS$ companies Traditional (Collective) BUS$0.7 Others 28% Pension BUS$4.3 15% 9% Others Others D&S Individuals (B US$1.1) Bank Insurances and Retail B US$1.0) Others 31% Fire 12% Vehícles 22% Natural Disasters 22% Transport 4% Liability 10% Health 72% Annuities 76% AuM/Average Direct Premium 180 Health Direct Premiums MUS$480 Annuities Direct Premiums BUS$4.3 22% 13% 13% 11% 9% 32% 17% 16% 16% 11% 10% 30% Otros Otros Source: Superintendencia de Valores y Seguros Average Premium Th.US$ Vida Cámara Ohio Nacional Sura Corpseguros Penta Vida Principal 40 Renta Nacional Confuturo 20 EuroAmérica Bice Vida Security Previsión AuM 0 Chilena Consolidada Metlife MUS$ 0 2,000 4,000 6,000 8,000 Privado y Confidencial Consorcio Nacional

40 Disclaimer: This document provides information about ILC Inversiones S.A. In any case this constitutes a comprehensive analysis of the financial, operational and sales situation of the Company, so to evaluate whether to purchase or sell securities of the Company, the investor must conduct its own independent analysis. In compliance with the applicable rules, ILC Inversiones S.A. publishes this document in its web site ( and submits to the Superintendencia de Valores y Seguros, the financial statements of the company and its corresponding notes, which are available for consultation and review. Contact Information: Trinidad Valdés / IR Department / / tvaldes@ilcinversiones.cl / Privado y Confidencial 40