Corporate Presentation December, 2012
Our Company 2
Company Overview Largest Latin American IT Services provider and an undisputed leader in systems integration, support and IT Outsourcing in Chile Corporate market positioning as an independent and integrated service provider, with world-class credentials and quality certifications Business model is based on developing long term relationships proximity and contact with customers, through its more than 10,000 IT professionals 3
Company Overview Highly diversified customer base by geography and industry Profitable growth as a consequence of an increase in high value-added revenues, strength of recurring revenues and a successful regional expansion Investment plan for US$ 700 million intended to continue developing and growing in Latin America 4
Important regional player Mexico Costa Rica Colombia Founded in Chile in 1974, SONDA has more than 38 years of experience Panama Ecuador Peru Brazil Present in 10 countries in the region, with +1,000 cities under coverage Chile Argentina Uruguay Over 12,500 employees in the region, of which more than 5,500 are based in Brazil 5 5
What we do for our Customers Comprehensive IT offerings SONDA is a comprehensive IT solution provider with a vast experience in offering services intended to solve any sort of business needs through the use of information technology, with a strong focus in our clients business strategies IT Adoption Lifecycle Planning Business and IT Strategy Solution IT Solutions Design Design Provisioning Infrastructure Integration Systems Operation Maintenance Provisioning Integration and Operation 6
Diversified Portfolio of Products and Services IT SERVICES Technical support Help Desk Network maintenance IT Outsourcing (BPO, Cloud Computing, Datacenter) Systems integration % Total Revenues: 54% ( Sept 2012) APPLICATIONS Vertical solutions for the industry (Finance, Health, Insurance, Pensions) Horizontal Solutions (ERP, CRM, etc.) Software developed internally and 3rd-party software % Total Revenues: 8% ( Sept 2012) PLATFORMS Storage and Backup equipment Communications and Networking Servers PC s Printers and Peripherals Mobile devices % Total Revenues: 38% (Sept 2012) 7
Strong Customer Base MANUFACTURING FINANCE TELECOM & MEDIA RETAIL Our customers are leading companies in their industry Over 5,000 throughout Latin America HEALTH ENERGY & MINING SERVICES/UTILITIES PUBLIC SECTOR Diversified base by country, industry and client Top 50 represent a 40% of revenues No single contract represents more than 4% of total revenues 8
Alliances with World Class Vendors ISO 9001:2008 Quality management system based on processes and focused on continuous improvement and customer satisfaction ITIL IT Infrastructure Library Best practices for managing IT services PMO Project Management Office Quality methodology in managing projects CMMI Capability Maturity Model Integrated Best practices for the development of application systems 9
IT Industry in Latin America 10
Latin America, one of the fastest growing regions in the world In Latin America, IT spending as a percentage of GDP is between 1.5% and 2.0% IT spending growth in the world 2012-2015 (CAGR) 16.6% In developed economies, IT spending as a percentage of GDP is over 3% and can reach to 4% The gap between the two markets has been reduced in recent years, due to higher IT spending growth in Latin America In countries like Brazil and Chile, IT spending as a percentage of GDP reaches almost 2% 6.2% 5.3% 11.4% 5.2% Eastern Europe Asia/ Pacífic India Latin America World Source: IDC 11
Latin America, one of the fastest growing regions in the world Distribution of IT Spending 2012 E 22.0% OPLA 5.1% Chile Proyected total IT Investment in Latin America (US$ Million) 156.166 139.679 124.663 172.495 5.4% Colombia 2012 E 2012 2013 2014 2015 Chile Brazil Mexico Colombia Other Business lines distribution 2012 (E) Source: IDC 17.9% Mexico IT Spending in Latin America will grow by 11.6% in 2012 49.6% Brazil Platforms expenditure concentrates over a half of total IT spending Brazil leads the IT adoption in the region Lower proportion of spending in IT Services related to developed countries (where is over 30%) 11,4% 15,5% 14,3% 11,5% 10,0% 61,3% 58,0% 58,9% 65,9% 80,1% 27,4% 25,6% 30,4% 19,8% 9,9% Chile Brazil Mexico Colombia OPLA IT Services Platforms Applications Source: IDC 12
Favorable Outlook for IT Industry in Latin America 11.4% CAGR (2012-2015) IT INDUSTRY IN LATAM 13.8% 12.6% 9.2% 8.3% BRAZIL CHILE MEXICO COLOMBIA 11.5% CAGR (2012-2015) IN STRATEGIC MARKETS CAGR 2012-2015 CAGR 2012-2015 CAGR 2012-2015 CAGR 2012-2015 11.1% CAGR (2012-2015) IT SERVICES IN LATAM Source: IDC 13
Favorable Outlook for IT Industry in Latin America Projected CAGR % (2012-2015) 11.1% 13.7% 11.5% 11.6% 11.7% 14.8% 11.4% 15.4% 11.6% 11.3% 11.9% 13.0% 9.3% 8.7% 5.3% Latin America Chile Brazil Mexico Colombia IT Services Platforms Applications Source: IDC 14
Profitable Growth and consistent cash-flow generation 15
Recent Financial Performance 3.3x Revenues 2006 2011 (US$ million) CAGR (2006-2011) = +26.6% 951.9 1,141.8 Revenues: 9M11 9M12 (US$ million) 837.8 +25.3% 1,049.9 671.3 703.0 539.5 350.8 9M11 9M12 2006* 2007* 2008* 2009* 2010 2011 (*) Financial statements prepared under Chilean GAAP Annual figures converted to US$ at exchange rate at end of each year. Semiannual figures converted to US$ with exchange rate at September 2012 Closing exchange rates: 2006: 532.39; 2007: 496.89; 2008: 636.45; 2009: 507.10; 2010:468.01; 2011: 519.20; September 2012: 473.77 16
Recent Financial Performance EBITDA 2006 2011 (US$ million) EBITDA: 9M11 9M12 (US$ million) 2.9x 164.5 176.5 176.5 CAGR (2006-2011) = +23.5% 98.3 115.3 127.2 131.5 15.7% +34.2% 16.8% 61.4 9M11 9M12 17.5% 18.2% 17.2% 18.3% 17,3% 15.5% 2006* 2007* 2008* 2009* 2010 2011 EBITDA Margin (*) Financial statements prepared under Chilean GAAP Annual figures converted to US$ at exchange rate at end of each year. Semiannual figures converted to US$ with exchange rate at September 2012 Closing exchange rates: 2006: 532.39; 2007: 496.89; 2008: 636.45; 2009: 507.10; 2010:468.01; 2011: 519.20; September 2012: 473.77 17
Revenues Evolution 2006 9M12 2006 2011 9M12 11% 11% 12% 16% 8% 12% 43% 9% 45% 66% 35% 34% CHILE BRASIL MÉXICO OPLA 18
EBITDA Evolution 2006 9M12 2006 2011 9M12 8% 3% 10% 9% 6% 8% 10% 23% 62% 26% 56% 80% CHILE BRASIL MÉXICO OPLA 19
Revenues Breakdown by Industry 2006 2011 Energy & Mining 3% Manufacturing 6% Telecom & Media 10% Others 9% Retail 35% Telecom & Media 15% Others 11% Retail 25% Health 4% Public Sector 16% Finance 19% Energy & Mining 11% Manufacturing 14% Health 2% Public Sector 7% Finance 15% 20
FY10 FY11 / 9M11 9M12 Consolidated Results Revenues 9M11 9M12 (US$ million) 837.8 + 25.3% 1,049.9 (US$ million) FY10 FY11 Var % 9M11 9M12 Var % Revenues 858.0 1,141.8 33.1% 837.8 1,049.9 25.3% EBIT 111.9 132.8 18.7% 98.8 128.2 29.7% Operating Margin 13.0% 11.6% 11.8% 12.2% EBITDA 148.3 176.5 19.1% 131.5 176.5 34.2% EBITDA Margin 17.3% 15.5% 15.7% 16.8% Net Income 64.6 78.2 21.1% 54.8 69.3 26.3% Net Margin 7.5% 6.9% 6.5% 6.6% 9M11 9M12 EBITDA 9M11 9M12 131.5 (US$ million) + 34.2% 176.5 9M11 9M12 21
Chile Market leader with over US$ 487 million in revenues for 2011 and US$ 470 million for 9M12 (US$ million) FY10 FY11 Var % 9M11 9M12 Var % Revenues 383.9 487.2 26.9% 333.3 469.9 41.0% EBIT 66.5 80.3 20.7% 58.4 72.6 24.2% Operating Margin 17.3% 16.5% 17.5% 15.4% EBITDA 93.0 108.8 17.0% 79.3 98.2 23.9% EBITDA Margin 24.2% 22.3% 23.8% 20.9% EBITDA 9M11 9M12 (US$ million) 79.3 + 23.9% 98.2 Extensive background in the development of complex IT projects for the modernization of both public institutions and private sector Prestige earned for decades, characterized by a deep service culture 9M11 9M12 22
Brazil Last acquisitions consolidate SONDA as a relevant player of IT market in Brazil (US$ million) FY10 FY11 Var % 9M11 9M12 Var % Revenues 316.5 401.4 26.8% 317.5 358.3 12.8% EBIT 32.7 32.5-0.7% 26.1 37.8 44.7% Operating Margin 10.3% 8.1% 8.2% 10.5% EBITDA 38.2 40.0 4.7% 32.0 46.3 44.7% EBITDA Margin 12.1% 10.0% 10.1% 12.9% EBITDA 9M11 9M12 (US$ million) 46.3 32.0 + 44.7% Major player in Brazil with deep market knowledge Broad portfolio of blue-chip clients Extensive service network with national coverage 9M11 9M12 23
Mexico Significant improvement in margins and bluechip clients (US$ million) FY10 FY11 Var % 9M11 9M12 Var % Revenues 73.1 132.4 81.1% 104.0 90.7-12.8% EBIT 8.3 13.5 61.7% 9.7 11.9 23.0% Operating Margin 11.4% 10.2% 9.3% 13.1% EBITDA 9.4 16.7 76.7% 12.1 14.9 23.2% EBITDA Margin 12.9% 12.6% 11.7% 16.4% EBITDA 9M11 9M12 (US$ million) Among the Top 10 IT systems integrators in the country 12.1 +23.2% 14.9 More than 100 clients from various industries 9M11 9M12 24
OPLA Revenues over US$120 million in 2011 and growing 58% in 9M12 (US$ million) FY10 FY11 Var % 9M11 9M12 Var % Revenues 84.5 120.8 42.9% 83.0 131.0 57.9% EBIT 4.4 6.6 51.6% 4.6 5.9 27.6% Operating Margin 5.2% 5.5% 5.6% 4.5% EBITDA 7.7 11.1 44.4% 8.1 17.1 111.1% EBITDA Margin 9.1% 9.2% 9.8% 13.0% EBITDA 9M11 9M12 (US$ million) 17.1 SONDA s services cover other seven Latin American countries, grouped in a region called OPLA: Argentina, Colombia, Costa Rica, Ecuador, Panama, Peru and Uruguay In this region, IT industry grows at higher rates than Global average 8.1 9M11 +111.1% 9M12 25
(US$ million) New Deals Closed Growth in new contracts 2007-2011 New deals breakdown by region 2011 CAGR (2007-2011) = +32.2% 1,038 14% 1,340 7% 11% 8% 439.3 8% 61% 31% 611.3 668.5 18% 13% 53% 53% 29% 30% 55% 62% 31% 31% 55% 53% 53% 61% 42% 31% 31% 29% 30% Chile Brazil Mexico OPLA 39% 62% 2007 2008 2009 2010 2011 Platforms IT Services Applications 26
Financial Statements US$ million dec-11 sep-12 Var.% Assets 1,221.7 1,360.0 11.3% Total Current Assets 571.0 570.5-0.1% Cash and Cash Equivalents 69.5 69.9 0.6% Other Current Assets 70.8 101.1 42.8% Property, Plant and Equipment, Net 167.7 192.1 14.5% Intangible Assets and Goodwill 362.7 475.0 31.0% Other Non-Current Assets 112.8 115.3 2.2% Liabilities 564.5 738.0 30.7% Financial Current Liabilities 77.5 217.3 180.6% Other Current Liabilities 279.8 256.4-8.4% Financial Non-Current Liabilities 184.0 181.7-1.3% Other Non-Current Liabilities 23.2 82.5 255.3% Total Shareholders' Equity Attributable to Owners 647.2 611.4-5.5% Minority Interest 10.0 10.6 6.3% Total Liabilities and Shareholders' Equity 1,221.7 1,360.0 11.3% 27
Investment Plan 2013-2015 32
Investment Plan 2013-2015 Total Investment of US$700 million to finance: Continue the process of development and profitable growth in Latin America. Strengthen position in Brazil, Mexico and Colombia, maintaining a solid and stable financial position. New acquisitions by US$ 500 million, expanding the customer base, strengthening the added value supply and accelerating the growth process of the business in the region. The remaining US$200 million consider investments related to the implementation of new Integration and Outsourcing TI projects, and the enhancement of business lines with high added value. Acquisitions 200 500 CAPEX 33
Investment Plan 2013-2015 The plan will be financed approximately a 40% through capital increase, 40% by generating of own resources and the remaining 20% by debt. This financing structure ensures a strong financial position, with financial and profitability indicators acording to the business model of SONDA. Investment Plan Funding 20% 40% 40% Own Resources Capital Increase Debt 34
New Infrastructure São Paulo Brazil 17,000 m 2 in Total Area 35
New Datacenter Infrastructure Latest technology: Two new Datacenters in Brazil and Chile, adding 2,200 squared meters in capacity Both projects with ANSI/TIA-942 TIER III certification, guaranteeing a high level of security 36
Innovative Solutions Cloud Computing Initiative The first Enterprise Cloud in Latin America focused on medium to large sized companies Regional coverage First vblock in Latin America, among the first in the world Operating in Chile and Brazil, soon in Mexico and Colombia Local Cloud Infrastructure in all the countries where SONDA has direct presence, to become the most geographically comprehensive provider throughout the region World class infrastructure for Cloud : vblock, from Vmware, Cisco y EMC. Strong regional partnership with this vendors First in the world to implement Vmware s Cloud Portal for Service Providers, vcloud Director, on top of a vblock technology First and only Latin American company on VMWare s World s Top 30 Cloud Providers Steering Committee IDC Projections: Towards the end of the decade, is expected that at least 80% of industry growth, and the highest value of leverage in enterprise IT is given by Cloud services In 2012, revenues for Cloud services will be US$ 40 billion and will grow at a CAGR of 26.4%, reaching US$ 100 billion in 2016. In 2014, the market is expected to reach US$ 55 billion 37
Outlook Favorable outlook for the IT industry in Latin America Execution of the US$700 million Investment Plan New acquisitions create synergy and margin improvement opportunities Extended customer base fosters cross-selling opportunities Pipeline of new business opportunities allow to maintain growth rates in the future Strong positioning in the IT services market in Brazil Increase in new business with regional accounts Main focus in comprehensive solutions based on IT Outsourcing Consolidation as the IT services leader provider in Latin America 38
Phone (56-2) 657 50 00 Teatinos 500 Santiago. CHILE www.sonda.com