COMPANY OVERVIEW - ILC - Presentation Prepared for Santander 14th Latam Conference - London Ignacio González - CFO May 2016
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Estrictamente Privado y Confidencial
COMPANY OVERVIEW – ILC
Presentation Prepared for Santander 14th Latam Conference – London
Ignacio González - CFO
May 2016
Privado y Confidencial 1
Estrictamente Privado y Confidencial
ILC: WHO WE ARE
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 non- 4. Core business in financial services
discretionary industries offers steady cash flow & operational
know how
2. Strategical expertise in realizing value
3. Generating 6. Multiple
shareholder value avenues for
through disciplined 5. Health care operation present in under- consolidation
capital management penetrated market offers higher profitability & growth
upside
Privado y Confidencial 2 2
Estrictamente Privado y Confidencial
ILC IS AN IMPORTANT CHILEAN GROUP, FOCUSED ON THE FINANCIAL
AND HEALTH INDUSTRIES
Consolidated Net Income 2015: Market Capitalization
(as of April 30th):
US$105 million US$1.2 billion
Δ+ 5% over 2014
AuM 2015: Local Risk Rating:
US$48 billion AA+
in AFP Habitat and Inversiones Confuturo
Dividend yield: Consolidated Employees:
5.9% 12,900
in 2015 approximately in Chile and Peru
(at IPO’s price)
Financial figures as of December 2015 / FX: CLP$710.16 per US$ / Market capitalization source: Bloomberg 3 3
Privado y Confidencial
Estrictamente Privado y Confidencial
1. High quality group, focused on non-discretionary industries
Privado y Confidencial 4
Estrictamente Privado y Confidencial
ILC’S TRACK-RECORD IS SUPPORTED BY A SOLID COMPETITIVE
POSITION IN THE SECTORS WHERE IT PARTICIPATES
FINANCIAL
• Consalud: #2 Mandatory
health insurance in Chile in
terms of contributors and
#3 in terms of beneficiaries
• AFP Habitat: #2 Pension
fund company in Chile in
terms of contributors, • Red Salud: #2 largest inpatient
affiliates, AuM and voluntary and outpatient network in Chile
products #1 dental network in Chile
• Inversiones Confuturo: #2
Life insurance company in
Chile in terms of AuM and
#3 in terms of direct HEALTH
premiums
Privado y Confidencial 5 5
Estrictamente Privado y Confidencial
ILC PARTICIPATES IN NON-DISCRETIONARY SECTORS, WHICH
PROVIDES STEADY CASH FLOW
Non- Insurance Sector Insurance Sector
Industry
Pension Funds Mandatory Healthcare Banking Life Insurance Supplemental
Health Insurance Health Insurance
Ownership
67.5%* 99.9% 75.5%* 99.9%
89.9%* 51.0%
ILC’s
(%)
(US$105 million)
% Consolidated
-6%
Net Income
23%
76% 3% 1%
8%
% Total Dividends
0%
(US$122 million)
16% **
Subsidiaries
3% 0%
Distrib. by
6%
75%
Figures as of December 2015 / FX: CLP$710.16 per US$
* 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
Estrictamente Privado y Confidencial
2. Strategical expertise in realizing value
Privado y Confidencial 7
Estrictamente Privado y Confidencial
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
2 control
• ILC supports subsidiaries’
decisions and investment plans
• ILC spread the values and
principles of ILC’s controller group
ILC’s
Subsidiaries through all the organization
2 • ILC adds value when external
opportunities appear through
1
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
Estrictamente Privado y Confidencial
ILC ACTIVELY MANAGES ITS ASSETS TO INCREASE THEIR VALUE,
ALWAYS ORIENTED TO ITS LONG TERM VISION
ILC’s main milestones:
YEAR CO M PANY INDUS TRY ACTIO N DES CRIPTIO N
1980 Creatio n ILC starts operations
1981 Pension Funds Creatio n AFP Habitat starts operations in Chile
1984 Mandatory Health Insurance Creatio n Isapre Consalud starts operations in Chile
1985 Life Insurance Creatio n Seguros La Construcción starts operations in Chile
1996 Pension Funds As s o ciatio n ILC and Citigroup became partners in AFP Habitat
2004 Life Insurance Dives tment 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 Creatio n Vida Cámara starts operations, focused in the D&S Insurance in Chile
2010 Pension Funds Dis as s o ciatio n Citigroup sold its stake in AFP Habitat, ending its parnership with ILC
2011 Supplemental Health Insurance Creatio n 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 Creatio n AFP Habitat starts operations in Peru
2012 Disability & Survivorship Insurance Creatio n Vida Camara starts operations in Peru
2013 Life Insurance Acq uis itio n ILC acquired 67% of Inversiones Confuturo (former Corp Group Vida Chile) (US$167 million)
2014 Life Insurance Acq uis itio n ILC acquired 28% of Corpvida (US$52 million)
2015 Banking Acq uis itio n ILC acquired 50.9% of Banco Internacional, entering the Chilean banking industry (US$100 million)
2015 Life Insurance I nves tment ILC executed a capital increase in Inversiones Confuturo (US$37 million)
2016 Life Insurance I nves tment ILC executed a capital increase in Inversiones Confuturo (US$37 million)
2016 Pension Funds As s o ciatio n ILC and Prudential became partners in AFP Habitat
2016 Life Insurance I nves tment MoU to acquire the remaining 22.1% stake in Inversiones Confuturo held by Corp Group Banking
2016 Healthcare I nves tment ILC acquires the remaining 10% stake in Red Salud held by the Mututal de Seguridad
Privado y Confidencial 9 9
Estrictamente Privado y Confidencial
EXAMPLE OF VALUE CREATION: GROWING INVERSIONES
CONFURUTO
• ILC entered the life insurance industry in 2013, through the acquisition of 67% of Inversiones Confuturo (former Corp Group Vida Chile)
• In May 2016, after three capital increases, ILC signed a MoU to acquire the remaining 22.1% stake of Inversiones Confuturo
• The rationale behind this transaction is to add another retirement alternative to ILC, besides programmed withdrawals
Inv. Confuturo Direct Premiums (M US$) & Market Share Inv. Confuturo AuM (B US$) & Market Share
8.0 20
.0
%
700 9.4% 10
.0
%
17.0% 16.0%
8.5% 7.0
16.6% 16.3%
18
.0
%
8.1%
9.0%
600
16
.0
%
7.3% 8.0%
6.0
14
.0
%
500
7.0%
5.0
12
.0
%
6.0%
400
4.0 10
.0
%
5.0%
7.2
300
608 6.4 6.7 8.0%
535
4.0%
3.0
6.2
489
200
439 3.0%
6.0%
2.0
4.0%
2.0%
100
1.0
2.0%
1.0%
- 0.0% - 0.0%
2012 2013 2014 2015 2012 2013 2014 2015
Net Result Confuturo + Corpseguros (M US$) ROE Inversiones Confuturo (Net Result / Ave. Equity)
50.0
40.0 10
.0
%
30.0
1 0 .7%
5.0%
43.8 5 .2%
20.0
4 .9%
0.0%
10.0 22.5 21.7 2012 2013 2014 2015
- -5.0%
2012 2013 2014 2015
-10.0
- 7.3 -7.4%
-10.0%
FX: CLP$710.16 per US$
Source: AACH
-20.0
Privado y Confidencial 10 10Estrictamente Privado y Confidencial
ILC’S VALUE GENERATION IS LED BY AN EXPERIENCED BOARD
AND MANAGEMENT ALL ACROSS THE COMPANY
BOARD OF DIRECTORS - ILC
Jorge Mas F. Daniel Hurtado P. Sergio Torretti C.* Gastón Escala A. Lorenzo Constans G.* Alberto Etchegaray A. René Cortázar S.*
Chairman Vice Chairman Director Director Director Director Independent Director
Civil Engineer Civil Constructor Entrepreneur Civil Engineer Civil Constructor Civil Engineer Commercial Engineer
U. Chile U. Católica Chile U. Católica Chile USACH U. Católica Chile U. Católica Chile
Ph.D. Economics - MIT
* Members of ILC’s Directors’ Committee
BOARD AND SENIOR MANAGEMENT
Jorge Mas F. Juan Benavides F. Joaquin Cortez H. James Callahan F. Alberto Etchegaray A. Pedro Grau B. Kurt Reichhard B.
Chairman Chairman Chairman Chairman Chairman Chairman Chairman
Pablo González F. Cristián Rodríguez A. Christian Abello P. Mario Chamorro C. Sebastián Reyes G. Marcelo Dutilh L. Alfonso Cortina G.
CEO CEO CEO CEO CEO CEO CEO
Privado y Confidencial 11 11Estrictamente Privado y Confidencial
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
67%
International
Investors 16% • 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
Local
Investors 17%
• ILC has a Committee of Directors, responsible for reviewing
Directors’
financial information and auditor’s reports, related parties
Committee
ILC’s transactions, remuneration systems, internal auditing
Board of Directors procedures, among others
Investment
Committee • ILC has also an Investment Committee responsible for
ILC elects reviewing financial decisions undertaken by ILC
Board ILC’s Management
Members
Subsidiary’s
Board of Directors
• Each of ILC’s subsidiaries has and independent Board of Directors and Management,
who maximize the return of its affiliate
Subsidiary’s
Management
• 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 12Estrictamente Privado y Confidencial
3. Generating shareholder value through disciplined capital
management
Privado y Confidencial 13Estrictamente 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 DIVIDEND YIELD ROE 2015
19.2% 26.4% 14.3%
(Since IPO in 2012) (At IPO´s Price in 2012)
ILC’S Share price return over IPSA
IPO’S PRICE - ILC CLOSING PRICE ILC – April 2016
140
$7,061 $7,790
130
120
Base 100
110 ILC
100
90
80
IPSA
IPSA IPSA
70 4,393 4,002
60
Privado y Confidencial 14 14Estrictamente Privado y Confidencial
ILC HAS DELIVERED CONSISTENT RETURNS DURING THE LAST
DECADE
ILC’s added value is reflected in returns and both ordinary and extraordinary net income
ILC’s Net Income (M US$) and ROE
39%
Ordinary Income (MUS$) Extraordinary Income (MUS$) ROE
32.1% 34%
29%
22.4% 24%
19.5% 19.3%
18.4%
19%
14.1% 14.3% 14.3%
64 14%
11.3% 31
38
10 49
9%
97 102
82 89 88
65 79
42
48 4%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
(40) -1%
- 0.9%
FX: CLP$710.16 per US$
Privado y Confidencial 15 15Estrictamente Privado y Confidencial
ILC’S DISCIPLINED CAPITAL MANAGEMENT HAS BEEN RECOGNIZED
BY RATING AGENCIES
Total Debt Net Debt
Total Debt (ILC): Total Cash (ILC):
(Consolidated): (Consolidated):
US$ 444 million US$ 94 million
US$ 1,385 million US$ 937 million
ILC’s Amortization Schedule as of December 2015 (Individual, M US$)
350.0
Banks Bonds
300.0
3 4 .7
250.0
200.0
150.0
2 6 8.4
100.0
50.0
1 .9
6 5 .5 39
-
2- 2- 2- 2-8 -
2016 2017 2018 2019 2020 2021-2025 > 2026
ILC’s Debt Breakdown as of December 2015 (Individual)
By Type By Currency Fixed / Variable
UF
Bonds 17%
25%
Variable
12%
Fixed
Banks 88%
75%
CLP
83%
Figures as of December 2015 / FX: CLP$710.16 per US$ Privado y Confidencial 16 16Estrictamente Privado y Confidencial
4. Core business in financial services offers steady cash flow &
operational know-how
Privado y Confidencial 17Estrictamente Privado y Confidencial
CHILEAN PENSION INDUSTRY SHOULD GROW DUE TO
DEMOGRAPHIC AND ECONOMIC FACTORS
Population in age to work / retired (Th.) Retirement Alternatives Comparison
Programmed
Annuity
Withdrawal
2,499 3,049
1,738
2,075 Pension Payment Period Limited Unlimited
From the insurance
Funds Ownership From the pensioner
company
Chance of inheriting
savings Yes No
10,495 11,269 11,841 12,122
2005 2010 2015 2020 Pension Amount Variable Fixed
Mayores de 60
Older than 60 En edadtode
In age trabajar
work
Number of Programmed Withdrawal and Annuity in
Chilean GDP per capita (PPP, US$) SCOMP* participants (Th.)
22,071
18,250
13
12,965 14 15
13
9,849 17
24
7,339 8 9
7 13
4,407
10 11 14 14 17 19 22 25 24 31
1990 1995 2000 2005 2010 2014 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Retiro Programado
Programmed Withdrawal Renta Vitalicia
Annuity
* SCOMP: Sistema de Consultas y Ofertas de Monto de Pensión. Sistem that provides information regarding the different retirement alternatives for pensioners in Chile
Source: Superintendencia de Pensiones, Banco Mundial, INE Privado y Confidencial 18 18Estrictamente Privado y Confidencial
AFP HABITAT: ESTABLISHED COMPANY WITH A SOLID MARKET
POSITION AND PERFORMANCE, EXPANDING INTO PERU
• Since 2016 ILC is associated with Prudential Financial Inc. in AFP Habitat, maintaining 40.3% of the property each
• AFP Habitat is consolidating its position in the high income segment in Chile, through an efficient operating model
• The Company is expanding its greenfield presence in Peru, were operates the auction for new affiliates in the private pension system (PPS)
Average taxable income in Chile SG&A over AuM in Chile
45.0
Average Taxable Income Industry Additional Taxable Income AFP Habitat
Provida
1,100 40.0 Hab itat
35.0
1,000
Average Taxable Income (US$)
Cuprum
Capital
AuM (Billion US$)
30.0
900
25.0
800
20.0
700
15.0
600 10.0
5.0
Planvital
500
Modelo
2008 2009 2010 2011 2012 2013 2014 2015
-
0.00% 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, #1 in annual returns in the A,B,C funds
affiliates, AuM and voluntary Products as
of December 2015 and #2 in the D and E funds as of
December 2015
FX: CLP$710.16 per US$
Source: Superintendencia de Pensiones Chile Privado y Confidencial 19 19Estrictamente 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
1° Auction new affiliates into
Auction
16,000
2°
800,000 11.3% 12
.0
%
Integra
14,000
the Peruvian PPS
10.3%
700,000 9.2% 10
.0
%
12,000
600,000 8.2% Prima
AuM (Million US$)
7.0% 8.0%
500,000 10,000
Profuturo
Affiliates
6.0%
400,000 6.0%
8,0 00
4.3%
300,000 3.2% 4.0%
6,0 00
200,000 2.0%
1.2% 2.0%
100,000 4,0 00
0.1%
- 0.0%
Larger scale
2,0 00
-
Hab itat '15 Hab itat '14
Affiliates Mkt. Share 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
SG&A over AuM (%)
AFP Habitat started greenfield operations in Peru, #1 in annual returns in the fund 2 as of December
through the first auction for new affiliates into the 2015
Peruvian PPS in 2013
Peruvian pension funds industry presents an
AFP Habitat has the lowest fee in the industry, with attractive perspective due to its large population
0.38% over contribution and 1.25% over AuM of 31 million (vs. 17 million in Chile), and the low
labor formality rate which is close to 30% (vs.
85% in Chile)
FX: PEN$3.41 per US$
Source: Superintendencia de Pensiones Perú, INEI Perú, INE Chile Privado y Confidencial 20 20Estrictamente Privado y Confidencial
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 17.1
17.2% Metlife 15.3
16.1% 14.5
12.8
13.4 13.2
11.6 11.7
US$3.3
Inv. Confuturo
Billion 15.6%
Others
30.2%
Penta Vida
11.2% 2012 2013 2014 2015
Bice
9.7% Confuturo Corpseguros
Result on Investments / Investment Portfolio Investment portfolio breakdown by Instrument
3% 4% 5% 6%
11% 13%
5.5% 13% 15%
5.3%
4.8%
4.9%
4.6%
4.6%
4.3%
80% 79% 78% 76%
4.1%
6% 5% 4% 2%
2012 2013 2014 2015 2012 2013 2014 2015
Confuturo Corpseguros Equity Fixed Income Real Estate Others
Annuity / Programmed withdrawal preference (Chile, 2015): Inv. Confuturo’ s Annuity Premiums 2015 (% Total):
~ 70% / 30% ~85% of total Premiums
Privado
FX: CLP$710.16 per US$. Source: Aseguradores de Chile, SVS, Superintendencia de Pensiones y Confidencial
Chile
21 21Estrictamente 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 Chile
20.0% Ripley BCI Santander
Bice
Large Size Corpbanca
Consorcio Itau
ROE
15.0% BBVA
Security Scotiabank
Estado
10.0%
I ntern. March '16
5.0% HSBC Medium Size
I nternacional '15
0.0%
0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00
Loans (US$ Billion)
ROE Evolution Banco Internacional Loans Breakdown (2015)
18. 0% 18. 6% Small Size
17. 5% 17. 2% Real Estate
Companies Companies
15. 2% 14. 7% 14. 8% 23.3% 21.4%
16 . 8% 14. 3%
12 .9%
US$1.2
3 . 7%
Billion
3 . 0%
1. 3%
0. 1%
Large Size Medium Size
Companies Companies
2009 2010 2011 2012 2013 2014 2015 29.5% 25.8%
Banco Internacional Industry
Privado
Figures as of December 2015. FX: CLP$710.16 per US$. Source: Superintendencia de Bancos y Confidencial
e Instituciones Financieras
22 22Estrictamente Privado y Confidencial
5. Health care operation present in under-penetrated market offers
higher profitability upside
Privado y Confidencial 23Estrictamente Privado y Confidencial
CHILEAN DEMAND FOR HEALTHCARE SHOULD INCREASE DUE
TO ECONOMIC DEVELOPMENT AND LIFESTYLE
9000
Per capita health expenditure (US$/hab.)
United States
8000
7000
Switzerland
6000 2X Norway
Netherlands
5000 Germany
Sweden
Belgium Austria
4000 France CanadaDenmark
Nueva Zeland Japan Iceland Australia
Finland Ireland
3000 Spain Italy
Portugal United Kingdom
Greece Slovenia Korea
2000 Czech Rep. Israel
Hungary Slovak Rep.
Mexico Estonia
1000 Poland
Turkey
0
10,000 20,000 30,000 40,000 50,000 60,000 70,000
Per capita GDP (US$/hab.)
Risk Factors
Older Population Diabetes
(% hab. 20-79 years)
6.5% 6.9% 9.6% 9.8% 10.4% 15.9%
22%
9%
91%
CHILE 78% Obesity
(% hab.> 15 years)
2015
2050 16.6% 17.5% 19% 25.1% 32.4% 35.3%
27%
15%
85%
OECD
73% Tobacco
2015 (% hab.> 15 years)
2050 11.3% 11.8% 13.7% 19.7% 23.9% 29.8%
% of population aged less than 65
Privado y Confidencial 24 24
% of population aged 65 and over Source: Health at a Glance 2013, 2015Estrictamente Privado y Confidencial
CHILE PRESENTS A LACK OF HEALTH INFRAESTRUCTURE AND
SPECIALISTS COMPARED TO OTHER DEVELOPED COUNTRIES
Doctors (Every 1,000 habitants) Nurses (Every 1,000 habitants)
11.14
3.81
3.27 9.09
2.56
2.16
1.88 1.84 5.63 5.14
2.62
1.49
Beds (Every 1,000 habitants) MRI Equipment (Every 1,000,000 habitants)
43.48
4.84 37.76
2.96 2.93 24.43
2.32 2,17 17.59
1.61 12,30
8.94
5.31
Privado y Confidencial 25 25
Source: Health at a Glance 2015Estrictamente 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
12%
16
0 14
%
12% 12%
14
0
• Red Salud’s operational performance has
MEGASALUD
12
%
9%
Outpatient services: 12
0
10
0 8%
10
%
been impacted by the important investment
• 2 M outpatient plan undertaken during the last 5 years for
8%
80
134
6%
services 60
101 106
118 127
4%
approximately US$300 million
• 1.7 M dental services
40
2%
20
• Since end-2015 Red Salud reinforced its
0 0%
2011 2012 2013 2014 2015
60
14%
16
%
focus and strategy into one oriented to cost-
13% 13%
efficiency and profitability. The latter is based
TABANCURA
14
%
50
11%
Inpatient & Outpatient 40
9%
12
%
10
%
on:
services / Santiago 30 8%
48 51
20
41 45 6%
37 4%
68.4% 10
2%
0 0%
2011 2012 2013 2014 2015
Management Investments
AVANSALUD
19%
Inpatient & Outpatient
60 19
%
19
%
50
18% 18%
services / Santiago 40
18
%
18
%
17%
30
17% 56
17
%
49
63.7% 20
37 45
17
%
16
%
27
10
0
16
%
15
%
Network
2011 2012 2013 2014 2015
BICENTENARIO
Inpatient & Outpatient 73
10
0 20
%
51 61
39 9%
50
15 6% 10
%
services / Santiago 0
-2 %
6%
0%
-50
2011 2012 2013 2014 2015 -10%
73.3% -100 -20%
-150 -30%
-3 9%
-200 -40%
-250
Privado y Confidencial -50%
26 26Estrictamente 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) Direct costs / Revenues
Total: 1.9 M
Colmena
16.6%
Consalud
20.0%
Cruz Blanca 82.8% 84.7% 84.2% 88.2%
21.7%
2012 2013 2014 2015
Banmédica
19.8%
Trials due to adjustments in contract’s base price
24,000 6.0%
Masvida 3.9% Trials
16.8% 18,000
5.4% 4.5%
Vida Tres 2.9% %
2.3% Adjustment in
4,0% 12,000 3.0%
Óptima 19,181 contract’s
1,0%
6,000
9,760 12,156 1.5%
base Price
4,156 (+UF)
0 0.0%
2012 2013 2014 2015
Vida Camara Beneficiaries Evolution (Th.) Consalud has developed complementary products to attract new contributors
186 221 233 250
2012 2013 2014 2015 Privado y Confidencial 27 27
Source: Superintendencia de SaludEstrictamente Privado y Confidencial
6. Multiple avenues for consolidation & growth
Privado y Confidencial 28Estrictamente Privado y Confidencial
ILC’S STRATEGY FOR 2015-2016 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 29Estrictamente Privado y Confidencial
BASED ON 2015-2016’S FOCUSES, ILC HAS SEVERAL
OPPORTUNITIES:
AFP Habitat: Inversiones Confuturo:
Maintain its leadership in the growing
Consolidate its association with Prudential annuity industry
Further improve returns on investments,
Strengthen its regional footprint in Chile
maintaining an adequate leverage
and Peru
Banco Internacional: Vida Camara: Consalud:
Further improve efficiencies in costs
Improve operational and SG&A
and administrative
efficiency Consolidate in
Supplemental Continue developing innovative
Health complementary products
Focus in medium Insurances
and small size
companies Red Salud:
Improve operational
Consolidate its new efficiency and Consolidate its new
Management Team synergies between Management Team
the network
Privado y Confidencial 30 30Estrictamente Privado y Confidencial
Closing Remarks
Privado y Confidencial 31Estrictamente Privado y Confidencial
INVESTMENT HIGHLIGHTS
One of the largest Asset Consolidated controlling
Managers in Latam shareholder
Demonstrated track- Solid and stable credit
record in non- risk rating
discretionary industries
Proven access to Attractive and
capital markets consistent dividend
yield
Privado y Confidencial 32 32Estrictamente Privado y Confidencial
Appendix:
Summarized Financial Statements / Industries where ILC participates at a glance
Privado y Confidencial 33Estrictamente Privado y Confidencial
SUMMARIZED FINANCIAL STATEMENTS AND SUBSIDIARIES FIGURES
B alance S heet I nco me S tatement
Th. US $ 2015 2014 V ariatio n Th. US $ 2015 2014 V ariatio n
NON-I NS UR ANCE ACTI V I TY AS S E TS NON-I NS UR ANCE ACTI V I TY
Total Current Assets 1,975,490 310,865 535%
Total non current assets 1,326,116 1,080,808 23% Operating result 150,531 139,123 8%
TOTAL NON-I NS UR ANCE ACTI V I TY AS S E TS 3 ,3 0 1 ,6 0 5 1 ,3 9 1 ,6 7 3 137% Non operating result (327) 20,478 -102%
Profit (loss) before tax 150,204 159,601 -6%
TOTAL NON-I NS UR ANCE ACTI V I TY AS S E TS
Income tax expense (36,148) (29,461) 23%
Total insurance activity assets 7 ,5 9 0 ,5 0 2 6 ,8 3 3 ,4 5 2 11%
No n-I ns urance activity p ro fit 1 1 4 ,0 5 5 1 3 0 ,1 4 0 -1 2 %
TOTAL AS S E TS 1 0 ,8 9 2 ,1 0 7 8 ,2 2 5 ,1 2 5 32%
I NS UR ANCE ACTI V I TY
NON-I NS UR ANCE ACTI V I TY LI AB I LI TI E S Operating result 33,358 11,694 185%
Total current liabilities 2,081,362 301,971 589% Non operating result 9,074 2,804 224%
Total non current liabilities 640,627 605,707 6% Profit (loss) before tax 42,432 14,498 193%
TOTAL NON-INSURANCE ACTIVITY LIABILITIES 2 ,7 2 1 ,9 8 9 9 0 7 ,6 7 8 200% Income tax expense (4,024) 1,622 -348%
I NS UR ANCE ACTI V I TY LI AB I LI TI E S I ns urance activity p ro fit 3 8 ,4 0 8 1 6 ,1 1 9 138%
Total insurance activity liabilities 7 ,0 6 3 ,5 7 9 6 ,3 4 8 ,4 7 8 11% PR OFI T (LOS S ) FOR THE PE R I OD 1 5 2 ,4 6 3 1 4 6 ,2 5 9 4%
TOTAL LI AB I LI TI E S 9 ,7 8 5 ,5 6 9 7 ,2 5 6 ,1 5 6 35% Pro fit attrib utab le to o wners o f the p arent co mp any 1 0 5 ,2 0 1 1 0 0 ,7 9 6 4%
Equity attributable to owners of the parent company 714,276 691,575 3% Pro fit attrib utab le to no n-co ntro lling interes t 4 7 ,2 6 2 4 5 ,4 6 4 4%
Non-controlling interests 392,262 277,394 41%
TOTAL E QUI TY 1 ,1 0 6 ,5 3 8 9 6 8 ,9 6 9 14%
TOTAL LI AB I LI TI E S AND S HAR E HOLDE R S ´ E QUI TY 1 0 ,8 9 2 ,1 0 7 8 ,2 2 5 ,1 2 5 32%
I nd ivid ual R es ults B anco
AFP Hab itat Co nfuturo Co rp s eguro s R ed S alud Co ns alud V id a Camara
(2 0 1 5 , Th. US $ ) I nternacio nal
Healthcare M and ato ry health V o luntary health
I nd us try Pens io n Fund s Life I ns urance Life I ns urance B ank
Pro vid er ins urance ins urance
R evenues 216,362 616,820 296,666 41,785 396,233 513,797 147,209
E B I TDA / E B I TDAE 126,493 - - - 44,108 14,941 -
Net I nco me 117,665 8,422 35,392 135 3,333 8,057 (6,471)
As s ets 497,308 4,205,228 3,186,081 1,654,193 542,820 142,729 124,914
Liab ilities 99,288 3,961,741 2,935,734 1,525,135 369,694 124,569 90,420
E q uity 398,020 243,487 250,348 129,058 158,963 18,160 34,493
% o wners hip I LC 67.5%* 75.5%* 75.5%* 51.0% 89.9% 99.9% 99.9%
M ark et Cap italizatio n 1,146,221 - -
Figures as of December 2015 / FX: CLP$710.16 per US$
Privado
* Participation of ILC in Habitat, Red Salud and Confuturo changed to 40.3%, 99.9% and 77.9% y Confidencial
respectively.
34 34
In May 6 th 2016 ILC signed a MoU to acquire the remaining 22.1% stake in Inversiones ConfuturoEstrictamente 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
Mandatory contribution
7%
GROSS SALARY
Voluntary additional contribution
0% -
40% Taxes
Voluntary contribution
NET SALARY
Programmed withdrawal
PENSION
Annuity
Privado y Confidencial 35 35Estrictamente Privado y Confidencial
IN 2015 CHILEAN PENSION FUNDS REPRESENTED 71% OF TOTAL
GDP
1 2 3 4 5 6
Market Players
(100% private)
Fee 1.27% 0.77% 1.44% 1.48% 1.54%
0.47%
(% on gross salary,
capped at US$2,642)
Taxable US$ 1,593
US$ 888 US$662 US$809 US$797 US$642
Income
(Average, US$)
Affiliates Annual Contributors Pensioners
5.6 Million 1.3 Million
10 Million
6 6
32.6% 20.6% 22.1% 6 21.1%
36.8%
30.8%
1
1 1
7.9%
2 6.7%
2 7.6% 2
5
5 3 5.4%
8.8% 3 12.5%
6.5% 4 3
14.9%
4 5
4
17.6% 18.2% 7.9% 22.1%
* 97.2% correspond to dependent workers.
AuM Distribution of assets in the Return of funds in the last 12 months (real terms)
US$154 Billion
Industry by type of fund 4.03%
6 3.79%
15.0% 15.3% HABITAT
26.2%
E A 2.88% 2.75%
27.4% .2,49% 2.40% INDUSTRIA
NDUSTRY
2.16%
2.02%
1 D B 16.1%
0.84%
2 3.0% With a return of: 0.70%
5 16.6%
3 Invested in:
2.1%
C A B C D E
21.3% 37.0%
4 20.0%
E A FX: CLP$710.16 per US$
Less risk PrivadoMore
y Confidencial
risk 36 36
Source: Superintendencia de PensionesEstrictamente Privado y Confidencial
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 Government
an average contribution of 10% in the case of Isapres)
Insurer Isapre Fonasa Others
Total Beneficiaries Total Beneficiaries Total Beneficiaries
3.3 MM 13.5 MM 1.1 MM
Banmédica
Armed Forces
20.7% Consalud Chilean Army
20.7%
Masvida Chilean Navy
16.8% Colmena
15.9%
Chilean Air Force
Optima
0,6% Cruz Blanca
Vida Tres 20.9%
4,3% Chilean Police
Market share at the level of beneficiaries to open Isapres
A-B C-D
Provider Private sector, according to chosen plans with Public sector Public sector and Private sector, according to chosen plans with
Isapres some private providers Isapres
Market Players *
(Private and open)
E A
Average $ 1,696 $ 2,454 $ 2,121 $ 2,960 $ 1,869 $ 2,007
Contribution D B $ 570
(Annual, US$)
84.2% 86.9% 84.9% 85.7% 56.6% 89.2% 87.9%
Loss Ratio C
FX: CLP$606.75 per US$ Source: Superintendencia de Salud, statistics 2014 37 37
* In November 2014 Ferrosalud changed its name into Óptima
Privado y Confidencial
Dimensionamiento del Sector de Salud Privado en Chile - 2014Estrictamente Privado y Confidencial
THE PRIVATE HEALTHCARE SYSTEM PLAYS AN IMPORTANT
ROLE TO MEET CHILEAN DEMAND FOR HEALTH
Total Health Expenditure Doctors Geographic Distribution of Hospitals and Clinics
8.8% of GDP ~ 30 thousands Doctors in Chile ~ 350
Others
8.6% Public
Public Public Geriátric and 53.7% Hospitals
54% 48% Psiq. Clinics
11.5%
Mutuals 3.4%
North
2,418 doctors
83.7 habitants by doctor
Private
46% Private
Private 22.7%
52%
Clinics
Center Red Salud: 11 private clinics
21,899 doctors
47.1 habitants by doctor
Beds
Nurses Dentists South Center ~ 38 thousands
~99 thousands ~ 16 thousands 4,415 doctors
75.7 habitants by doctor Others
Geriatric and
Public
Psiq. Clinics 10% 66% Hospitals
Mutuals 4%
Public 2%
Public
54%
30%
South
1,264 doctors Private
85.1 habitants by doctor Clinics 18%
Private Private
46% 70%
Red Salud: 858 beds
Privado y Confidencial Source: Dimensionamiento del Sector de Salud Privado en Chile38 38
– 2014
Health at a Glance 2015Estrictamente Privado y Confidencial
ILC PARTICIPATES IN THE LIFE INSURANCE INDUSTRY, FOCUSING
ON ANNUITIES
Life Insurances General Insurances
Direct premiums: BUS$7.2 Direct premiums : BUS$3.3
36 companies 30 companies
Fire
12%
Traditional (Collective) Pension Others
Natural
BUS$0.7 BUS$4.3 Disasters
Others
31% 22%
Others
28%
Others D&S Individuals
15% 9%
(B US$1.1)
Vehícles
22% Liability
10%
Bank Insurances and Retail Transport
B US$1.0) 4%
Health Annuities
72%
76%
AuM/Average Direct Premium
180
Corpseguros
160
Health Direct Premiums Annuities Direct Premiums Vida Cámara
Th.US$
MUS$480 BUS$4.3 140
Consorcio
Average Premium 120 Nacional
100
80 Penta Vida
Principal
22% 13% 13% 11% 9% 32% 17% 16% 16% 11% 10% 30% 60
Ohio Nacional Sura
Otros Otros
40 Renta Nacional
Confuturo
20 EuroAmérica Bice Vida
Security Previsión Metlife
AuM
0 Chilena Consolidada MUS$
Source: Superintendencia de Valores y Seguros Privado y Confidencial 0 2,000 4,000 6,000 39 39
8,000Estrictamente Privado y Confidencial
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 (www.ilcinversiones.cl) 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 / +56 2 2477 4673 / tvaldes@ilcinversiones.cl / www.ilcinversiones.cl
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