BTG Pactual Conference June-14

Transcription

1 BTG Pactual Conference June-14 Privado y Confidencial 1

2 ILC s Highlights ILC acquired 67% of the shares of Corp Group Vida Chile S.A. ILC sold 51% of Desarrollos Educacionales May 12 th 2014 ILC placed the largest IPO in Chile (US$ 468 million) 2012 June 1 st 2013 June 18 th 2013 September 13 th 2013 November 18 th 2013 Vida Cámarawas awarded in the D&S insurance auction in Chile Habitat initiated operations in Peru, after being awarded the 1 st new affiliates auction for 2 years Vida Cámarawas awarded in the D&S insurance auction in Peru ILC Page 2

3 Ownership and stock price Ownership structure (Mar-13) Internationals 16,5% Mutual Funds & Others 5,5% Market Cap (MMUS$) Stock price (Ch$) Net Income 3M14 (US$* Th) June 5 th ,233 6,800 30,289 Stockbrokers 10,9% P/E 8.3 CChC 67,0% P/BV 1.4 Dividend Pay Out 60%-80% *Exchange rate of Ch$ as of March 31 tt, % Evolution of the stock price 30.0% 20.0% 10.0% 0.0% -10.0% -3.7% 6.6% performance difference as of June 5 th, % -30.0% ILC IPSA -10.3% ILC Page 3

4 Company overview March, 2014 Revenues Net Income Ownership Retirement Sector Pension funds administration (AFP) Life Insurance Company (Annuities) US$62.8 mm US$ 46.9 mm 67.5% US$219.2 mm US$-15.2 mm 67.0% Healthcare and life Insurance Sector Health insurance institution (ISAPRE) Hospital healthcare services Outpatient healthcare services Supplemental health insurance US$152.1 mm US$ 87.6 mm US$ 33.9 mm US$ 12.2 mm US$ -0.4 mm US$ 0.7 mm 99.9% 89.9% 99.9% Other Business Network of nine private schools and one subsidized private school IT and outsourcing services US$2.1 mm US$-0.2 mm 49.0% 32.9% Exchange rate: CLP 551,18 per 1USD (*) Since June 18 th, 2013 Privado y Confidencial ILC Page 4 4

5 Revenues come from Estrictamente Privado y Confidencial $ Pension Fund Retirement Insurance Healthcare 10% 1.27% Commission fee Voluntary savings Mandatory Health Insurance 7% Additional health contribution Gross Salary Taxes: Range 0% - 40% Supplemental health insurance Voluntary Health Insurance Net Salary Annuity Retirement Savings Habitat average: Ch$ 650,128 (US$ 1,180) Chile average: Ch$ 598,549 (US$ 1,086) Programmed Withdrawal Source: Superintendencia AFP, as of Mar-14; exchange rate $ Privado y Confidencial ILC Page 5 5

6 Our Business Privado y Confidencial 6

7 Habitat Income Statement (Th.US$*) Revenues Cost of sales Mar 14 62,817 - Mar 13 57,015 - Var. % 10.2% - Gross Profit 62,817 57, % SG&A (23,255) (21,100) 10,2% Operating Income 39,526 35, % Gain (loss) of the encaje 14,686 8, % EBITDAE** 43,909 40, % Net Income 46,936 40, % Created in 1981 under the new provisional system The only AFP under the same controller through all its history 67.5% owned by ILC One of the most efficient AFP in terms of cost control and the second cheapest on fees **EBITDAE calculated as profit before tax minus depreciation, finance cost, other non operational cost and financial income due to Habitat s encaje. * Exchange rate of Ch$551,18 as of March 31st,2014. Privado y Confidencial ILC Page 7 7

8 Habitat: Key considerations Ample growth opportunities Cuprum 20,8% Modelo 1,3% Habitat 26,1% Salary base increase Voluntary savings products Planvital 2,7% Incorporation of independent workers to the system Capture of transfers from competitors Contributors market share (as of March 2014) Contribution rate % 57.7% 57.6% 52.3% 76.0% 48.8% 1,705,563 1,178, , , , ,679 PROVIDA HABITAT CAPITAL MODELO CUPRUM PLANVITAL Capital 21,1% Products offered Total AUM = US$161.9 bn Source: Superintendencia de Pensiones, as of March 31st, 2014 Provida 27,9% Mandatory individual capitalization account Contributions = 10% of gross salary (capped at ~US$3,000 per month) Voluntary pension contributions Tax exempt, up to a certain amount Voluntary savings account Allows withdrawals at any time Programmed withdrawals Pension payment option in which retirees maintain their account with the AFP Source: Superintedencia de Pensiones 1 Contributors / affiliates Privado y Confidencial ILC Page 8 8

9 Habitat: Key considerations Estrictamente Privado y Confidencial Operating expenses & % fee income (Mar-14) Net Income (Ch$ mm) Based on actual figures Adjusted to Habitat s 1.27% fee rate 90,000 80,000 70,000 60,000 50,000 CAGR ex-encaje ( 09-13) 7.5% 14,649 27,089 19,504 (1,846) 13,061 Fee Income (US$ million) ,000 30,000 20,000 4,645 8,095 10,000 48,615 55,974 63,500 61,515 64,824 17,778 17, Mar-13 Mar-14 Current mandatory fee (Dec 2012) Modelo Habitat Capital Cuprum Provida Planvital % 1.27% 1.44% 1.48% 1.54% 2.36% 0 00% 30% 60% 90% 120% 150% Expenses % Fee Income Fee income (US$ million) & Expenses % (Mar -14) Habitat Cuprum Provida Modelo Planvital Capital % 32.7% 46.2% 34.8% 81.0% 61.9% Privado y Confidencial ILC Page 9 9

10 AFP Industry as of March 2014 Estrictamente Privado y Confidencial 8.6% Annual growth of Gross Salary (nominal terms) 7.4% 7.2% 12.5% 5.4% 8.4% 7.2% Habitat Capital Cuprum Modelo Planvital Provida Sistema Source: Superintendencia de Pensiones, as of March 31, 2014 Ch$ Contributor average salary CAGR: 8.2% Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Mar 14 Industry Habitat 2,000,000 1,600,000 1,200, ,000 Evolution of Contributors -2.5% 0.1% 0.3% 27.4% -1.9% -1.9% Evolution of Habitat AUM (US$ Million) CAGR: 7.7% 41,805 42,653 42,280 36,305 37,281 30, ,000 0 Habitat Capital Cuprum Modelo Planvital Provida mar-13 mar-14 var anual % Mar-14 Privado y Confidencial ILC Page 10 10

11 AFP Industry as of March 2014 Estrictamente Privado y Confidencial Contributors Evolution: Salary < CL$500 Th. N of Contributors 40,000 30,000 20,000 10, ,000-20,000-30,000 mar-13 abr-13 may-13 jun-13 jul-13 ago-13 sep-13 oct-13 nov-13 dic-13 ene-14 feb-14 mar-14 Habitat Capital Cuprum Modelo Planvital Provida Contributors Evolution: Salary > CL$1,400 Th. N of Contributors 6,000 Habitat 4,000 Capital Cuprum Modelo 2,000 Planvital Provida 0 mar-13 abr-13 may-13 jun-13 jul-13 ago-13 sep-13 oct-13 nov-13 dic-13 ene-14 feb-14 mar-14 Contributors Market Share Evolution: Salary < CL$500 Th. Contributors Market Share Evolution: Salary > CL$1,400 Th. 40.4% 40.1% 39.8% 39.5% 39.1% 22.9% 22.5% 22.1% 21.7% 21.3% 19.3% 19.1% 18.8% 18.6% 18.4% 9.7% 10.8% 11.9% 12.9% 14.0% 4.4% 4.4% 4.4% 4.4% 4.4% 3.3% 3.2% 3.0% 2.9% 2.8% Habitat Capital Cuprum Modelo Planvital Provida 34.7% 34.2% 33.6% 32.9% 32.7% 25.0% 25.2% 25.4% 25.5% 25.4% 21.3% 21.3% 21.3% 21.2% 21.1% 15.5% 15.3% 15.1% 15.2% 15.2% 2.8% 3.3% 3.9% 4.5% 5.0% 0.7% 0.7% 0.7% 0.7% 0.7% Habitat Capital Cuprum Modelo Planvital Provida Privado y Confidencial ILC Page 11 11

12 Habitat: Peru Ample growth opportunities Profuturo 26,9% Habitat 0,2% December 20 th 2012, Habitat was awarded in the first auction in Peru Integra 41,6% All the new entrant into the formal sector contribute into Habitat for two years 600,000 new beneficiaries expected in two years As of June 1 st 2013, Habitat started operations in Peru. Source: SBS as of March 2014 Prima 32,2% Total AUM = US$37.1 bn Contributors distribution (as of March 2014) Mandatory mix fee rate after the first auction (%) Profuturo Over the contribution 1.49% Over the AUM 1.20% Integra 1.55% 1.20% Prima 1.51% 1.90% Habitat 0.47% 1.25% PROMEDIO 1.26% 1.39% Integra Profuturo Prima Habitat Source: SBS as of March 2014 Source: Superintendencia de Banca, Seguros y AFP del Perú Privado y Confidencial ILC Page 12 12

13 Potential synergies in the health business Average monthly contribution per contributor: USD $137.4 Average monthly contribution per beneficiary: USD $18.7 Medical Bill 10% of the gross salary is the average contribution % of the Net Salary Monthly primus Co-payment between the company and the employee % covered by the person % covered by: 7% of the gross salary is the mandatory contribution % covered by: or USD 15.2** Full coverage of 80 diseases in an established network * * The GES plan cost U.F since July 1 st, 2013 Privado y Confidencial ILC Page 13 13

14 Consalud Income Statement (Th. US$*) Revenues Cost of sales Gross Margin Mar ,078 (119,360) 32,718 Mar ,199 (107,894) 26,305 Var. % 13.3% 10.6% 24.4% Created in 1984 under the new provisional health system (Isapre) SG&A Operating Income EBITDA** Net Income (19,187) 14,041 (17,890) 9,658 12,210 8,296 **EBITDA calculated as profit before tax minus depreciation, finance cost and other non operational cost. *Exchange rate of Ch$ as of March 31st, % 45.4% 16,217 11, % 47.2% 99.9% owned by ILC The price of GES rose to UF due to the inclusion of 11 new diseases, since July 1 st, 2013 Privado y Confidencial ILC Page 14 14

15 Consalud: Key considerations Growing demand prospects Leading private health insurance provider and strong market position Masvida 15.4% Others 5.2% Consalud 21.2% Strong brand recognition Continuous innovation and incorporation of new technologies Colmena 16.1% Cruz Blanca 21.1% First choice provider for people moving from the public to the private health insurance system Banmédica 20.9% Total Contributors = 1,706,390 Source: Superintendencia de Salud, as of March 2014 Others includes Vida Tres and Ferrosalud. Products offered Medical plans Source: Fonasa, as of December, % Isapre: 3.12 mm 18.2% Fonasa D: 3.0 mm 13.6% Fonasa C: 2.2 mm 29.8% Fonasa B: 4.9 mm 19.7% Fonasa A: 3.2 mm Open network plans Preferred provider plans Closed network plans Complementary product offerings Additional coverage for catastrophic diseases Dental plans Pharmacy plans Privado y Confidencial ILC Page 15 15

16 Consalud: Key considerations Estrictamente Privado y Confidencial Number of Contributors (as of March 2014) Average monthly contribution 1 in US$ (Dec-13) 400, , , , , ,0 250,0 244,1 300, , , , , , ,0 150,0 137,4 150,4 163,5 170,0 200,7 100,000 75, ,0 50,000 0 Consalud Cruz Blanca Banmédica Colmena Masvida Vida Tres 50,0 0,0 Consalud Másvida Banmédica Cruz Blanca Colmena Vida Tres Number of Beneficiaries (as of March 2014) Loss ratio 2 (as of December 2013) 91,0% 800, , , , , , , , ,215 90,0% 89,0% 88,0% 87,0% 86,8% 87,0% 87,5% 88,5% 90,0% 400,000 86,0% 300,000 85,0% 84,7% 200, ,254 84,0% 100,000 0 Consalud Banmédica Cruz Blanca Colmena Masvida Vida Tres 83,0% 82,0% Consalud Vida Tres Banmédica Másvida Cruz Blanca Colmena Source: Superintedencia de Salud and ILC 1 Operating revenues divided by the number of contributors. Exchange rate of Ch$ as of December 31 th,2013; 2 Operating expenses divided by operating revenues Privado y Confidencial ILC Page 16 16

17 Consalud: Operating data Estrictamente Privado y Confidencial Dec-12 Dec-13 Mandatory contributions (Ch$ million) 208, ,374 Voluntary contributions (Ch$ million) 66,793 80,426 Mar-14 LTM 235,887 85,780 Others (Ch$ million) TOTAL (Ch$ million) 275, , ,175 Beneficiaries N Beneficiaries Revenues / Beneficiary (Ch$) 676, , , , , , , , , , , , , , , , , , , , ,000 Dec-12 Dec-13 Mar-14 LTM 360,000 Source: Superintedencia de Salud, FEFI Consalud as of March Privado y Confidencial ILC Page 17 17

18 Red Salud Income Statement (Th. US$*) Revenues Cost of sales Gross Margin Mar-14 87,567 (70,642) 16,925 Mar-13 77,927 (61,889) 16,037 Var. % 12.4% 14.1% 5.5% One of the main private healthcare providers, reaching close to 18.5% of the private beds in Chile SG&A Operating Income EBITDA** Net Income (12,238) 4,687 (11,096) 4, % (5.2%) 8,891 9,816 (9.4%) (377) 1,876 (120.1%) 89.9% owned by ILC National coverage through a network of 16 hospitals and 33 medical centers **EBITDA calculated as profit before tax minus depreciation, finance cost and other non operational cost. *Exchange rate of Ch$551,18 as of March 31 st,2014. Privado y Confidencial ILC Page 18 18

19 Red Salud: Overview Chilean private hospitals by number of beds (2012) Davila 540 Bicentario * Indisa 360 Santa María 335 Alemana 330 Las Condes 256 Tabancura UC Lira UC San Carlos ILC market share (in terms of private hospital beds): 18,5% Avansalud 103 Las Lilas Iquique Red Salud hospitals Others Source: ILC, annual reports of the companies as filed with the SVS, except Clinica Alemana, where the information has been derived from its website; *Represents the original number of beds for this project, still not approve by the board. Privado y Confidencial ILC Page 19 19

20 Red Salud: Operating data Estrictamente Privado y Confidencial Mar-13 Admissions 12,474 Emergency room visits 28,235 Patient days 29,657 Mar-14 13,159 31,542 31,278 Includes Bicentenario, Avansalud, Tabancura and Iquique hospitals March - 14 Average ocupancy rate Average lenght of stay (days) Tabancura Avansalud 70.7% 62.5% Bicentenario 70.5% Iquique 58.6% Evolution of revenues Red Salud Evolution of EBITDA LTM Clínica Bicentenario Ch$ million 250, , , ,000 86,123 97, , ,568 50, ,442 74,735 77,171 47,816 Dec-11 Dec-12 Dec-13 Mar-14 LTM Hospital revenues Outpatient revenues Privado y Confidencial ILC Page 20 20

21 Red Salud: Operating data Estrictamente Privado y Confidencial Evolution of Revenues, Net Income and EBITDA of our private hospitals and outpatient centers Income Statement (Mar-14) Megasalud Avansalud Tabancura Bicentenario Iquique Millones de Ch$ Revenues 20,728 7,853 8,016 9,538 1,527 Cost of sales (16,927) (6,131) (6,086) (8,351) (1,027) Gross Profit 3,801 1,721 1,930 1, SG&A (2,780) (985) (1,396) (1,055) (350) Operating Income 1, Net Income (642) 94 EBITDA (*) 1,771 1, EBITDA Mg. 8.5% 17.1% 11.0% 7.2% 15.5% (*) EBITDA calculated as Operating Income minus depreciation and amortization Income Statement (Mar-13) Megasalud Avansalud Tabancura Bicentenario Iquique Ch$ millions Revenues 18,673 7,098 7,273 8,072 1,516 Cost of sales (14,435) (5,435) (5,501) (6,980) (1,086) Gross Profit 4,238 1,663 1,772 1, SG&A (2,533) (960) (1,351) (1,168) (348) Operating Income 1, (75) 81 Net Income 1, (720) 62 EBITDA (*) 2,437 1, EBITDA Mg. 13.1% 17.6% 10.1% 5.1% 8.7% (*) EBITDA calculated as Operating Income minus depreciation and amortization *EBITDA calculated as Operating income minus D&A Privado y Confidencial ILC Page 21 21

22 Vida Cámara Income Statement (Th. US$*) Revenues from insurance activities Revenues from financial result Cost of Sales Gross Margin SG&A Operating Income Net Income *Exchange rate of Ch$551,18 as of March 31 tst Mar 14 32,043 1,943 Mar 13 10,792 1,746 Var. % 196.9% 11.3% (30,256) 3,730 (7,548) 4, % (25.3%) (3,568) 162 (2,737) 2, % (92.8%) 723 1,879 (61.5%) Created in 2009 due to the acquisition of 99.9% of RBS (Chile) Seguros de Vida S.A. 99.9% owned by ILC On January 2012 launch the complementary health insurance business, adding more than 15,000 beneficiaries per month As of September 23 rd 2013, Vida Cámara was awarded, with two of seven fractions, the D&S insurance auction in Peru. As of May 12 th 2014, Vida Cámara was awarded, with two of nine fractions of the male pool, in the D&S auction in Chile. Privado y Confidencial ILC Page 22 22

23 Vida Cámara: Key considerations New projects Since July 2012, Vida Cámara stopped supplying the D&S insurance Complementary health insurance Life and catastrophic insurance Entrance in Peru 36% premium market share in the D&S business (July 2010-June 2012) Evolution of beneficiaries for the complementary health insurance In average, more than 9,000 beneficiaries per month Privado y Confidencial ILC Page 23 23

24 Corp Group Vida Chile Income Statement (Th. US$*) Non-Insurance Activity Profit Revenues from insurance activities Revenues from financial result Cost of Sales Gross Margin SG&A Operating Income Mar 14 (**) (5,100) Mar 13 (2,532) Var. % (101)% 142,101 77, ,761 90,117 (9.4%) (14.4%) (228,947) (9,722) (228,089) 18, % (151.7%) (7,068) (16,790) (8,798) 9,991 (19.7%) (268.0%) As of November 18 th, 2013 ILC acquired 67% of the shares of Corp Group Vida Chile S.A. The price paid for the shares and social rights was CLP $87,250 million (US$ mm) Insurance Activity Profit (13,670) 11,242 (221.6)% Net Income (15,168) 6,340 (339.2%) *Exchange rate of Ch$551,18 as of March 31 tst 2014.(**) ILC only consolidate the 1Q14 period. Key Considerations (as of December 2013) 14,7% Market share on annuities 8,1% Market share on life insurance direct premium 16,6% Market share on AuM More than 300,000 policy holders in CorpVida Privado y Confidencial ILC Page 24 24

25 Corp Group Vida Chile Income Statement evolution of Corp Group Vida Chile subsidiaries Corpseguros S.A. Income Statement Ch$ millions 1Q14 1Q13 US$ Th.(*) 1Q14 1Q13 Var % Premium Income 10,340 14,670 18,760 26, % Result of Investments 20,116 21,308 36,497 38, % Reserves and Claims (30,235) (34,185) (54,855) (62,022) -11.6% Gross Profit 221 1, , % Administrative expenses (977) (939) (1,773) (1,704) 4.1% Operating Income (756) 854 (1,372) 1, % Non-Operating income % Profit before tax (351) 1,040 (637) 1, % Income tax expenses (66) 469 (119) % Profit to Corpseguros S.A. (**) (417) 1,509 (756) 2, % (*) Exchange rate of Ch$ as of March 31st, 2014.(**) ILC only consolidate the 1Q14 period. Corpvida S.A. Income Statement Ch$ millions 1Q14 1Q13 US$ Th.(*) 1Q14 1Q13 Var % Premium Income 72,187 70, , , % Result of Investments 19,641 26,561 35,635 48, % Reserves and Claims (96,976) (89,177) (175,943) (161,792) 8.7% Gross Profit (5,148) 8,264 (9,341) 14, % Administrative expenses (3,125) (2,978) (5,669) (5,403) 4.9% Operating Income (8,273) 5,286 (15,010) 9, % Non-Operating income 719 (1,002) 1,304 (1,819) % Profit before tax (7,554) 4,283 (13,705) 7, % Income tax expenses % Profit to Corpvida S.A. (**) (7,118) 4,687 (12,913) 8, % (*) Exchange rate of Ch$ as of March 31st, 2014.(**) ILC only consolidate the 1Q14 period. Privado y Confidencial ILC Page 25 25

26 Financial Summary Privado y Confidencial 26

27 Balance Sheet US$* Thousands Balance Mar 14 Dec 13 Income Statement Mar 14 Mar 13 Total current assets Total non current assets Total insurance assets 444, ,742 1,347,387 1,332,096 8,055,961 7,862,495 Non insurance activity operating income Non insurance activity non operating income 56,263 6,123 51,317 8,727 TOTAL ASSETS 9,847,785 9,613,334 Insurance activity operating income (16,628) 2,252 Total current liabilities 277, ,380 Insurance activity non operating income 3, Total non current liabilities Total insurance liabilities 778,066 7,458, ,905 7,237,576 Profit attributable to noncontrolling interest and income tax expense (18,516) (26,697) TOTAL EQUITY 1,333,723 1,302,472 NET INCOME 30,289 35,649 TOTAL EQUITY & LIABILITIES 9,847,785 9,613,334 Non insurance activity EBITDAE** 69,188 64,752 (**)EBITDAE calculated as profit before tax minus depreciation, finance cost, other non operational cost and financial income due to Habitat s encaje. US$* Thousand Mar 14 US$* Thousand Mar 14 COVENANT < 1.0 X Short term debt 176,659 Cash & cash equivalent 359,226 Net Fin. Debt / Total Equity 0.36 x Long term debt 657,791 Total financial debt 834,450 Total equity 1,333,723 (*)Exchange rate of Ch$ as of March 31 st, 2014 Privado y Confidencial ILC Page 27 27

28 Financial Data (as of March 2014) Financial Debt Financial Debt (USD million) ILC Habitat Vida Cámara Corp Group Vida Chile S.A. C. Machalí Consalud Red Salud TOTAL Short Term Bonds Bank loans Leasing Long Term Bonds Bank loans Leasing Total (*) Exchange rate of Ch$ as of March 31st, Credit Risk Feller Rate: AA+ Humphreys: AA+ Local credit rating Cash Flow from our main subsidiaries (Mar-14) EBITDA (non insurance business) (Mar-14) Mar-14 Distributable Net Income (Ch$ mm) Dividend Policiy** % Ownership % Div. to ILC (Ch$ mm) Habitat 16,864 90% 67.48% 10,242 Red Salud (208) 100% 89.90% - Consalud* 4, % 99.90% 4,865 Vida Cámara % 99.90% 398 CGVC (8,360) 30% 67.00% - Total 13,564 15,505 Ch$ million 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, ,759 4,900 5,410 8,938 6,426 22,095 24,202 1Q13 1Q14 Others Red Salud Consalud Habitat (*) According to Superintendent of Health regulation. (**) According to the current dividend policy of each subsidiary as of March 2014 Privado y Confidencial ILC Page 28 28

29 BTG Pactual Conference June-14 Privado y Confidencial For more information, please contact with: Ignacio González R. María Paz Merino Pagola CFO Head of Investor Relations Phone: (56 2) Phone: (56 2) igonzalez@ilcinversiones.cl mmerino@ilcinversiones.cl 29