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Estrictamente Privado y Confidencial
1Privado y Confidencial
Deutsche Bank ConferenceMay-14
ILC Page 2
� Habitat initiated operations
in Peru, after being awarded
the 1st new affiliates auction
for 2 years
2012
June 1st
2013
ILC’s Highlights
� ILC sold 51% of Desarrollos
Educacionales
� ILC acquired 67% of the
shares of Corp Group Vida
Chile S.A.
� ILC placed the
largest IPO in Chile
(US$ 468 million)
June
18th
2013
September
13th 2013
November
18th 2013
� Vida Cámara was awarded
in the D&S insurance
auction in Peru
ILC Page 3
Ownership and stock price
17.2%performance difference as of April 29 th, 2014
Ownership structure (Dec-13)Market Cap (MMUS$)
Stock price (Ch$)
Net Income 12M13 (US$* Th)
1,320
7,400
160,890
P/E 8.8
P/BV 1.6
April 29th 2014
-12.4%
4.8%
Evolution of the stock price
Dividend Pay Out 60%-80%
*Exchange rate of Ch$524.61 as of December 31tt, 2013
-30,0%
-20,0%
-10,0%
0,0%
10,0%
20,0%
30,0%
40,0%
ILC IPSA
Estrictamente Privado y Confidencial
4Privado y ConfidencialILC Page 4
December, 2013
Exchange rate: CLP 524,61 per 1USD(*) Since June 18th, 2013
� Pension funds administration (AFP)
� Life Insurance Company (Annuities)
Retirement Sector
� Health insurance institution (ISAPRE)
� Hospital healthcare services
� Outpatient healthcare services
� Supplemental health insurance
Healthcare and life
Insurance Sector
� Network of nine private schools and one
subsidized private school
� IT and outsourcing services
Other Business
US$601.6 mm
Revenues
US$ 64.9 mm
N.A.
Net Income
US$ -2.7 mm
67.0%
Ownership
99.9%
US$595.3 mm
US$ 366.8 mm
US$ 15.3 mm
US$ 7.2 mm
99.9%
89.9%
US$6.9 mm US$0.9 mm49.0%*
32.9%
Company overview
US$246.6 mm US$ 151.5 mm 67.5%
Estrictamente Privado y Confidencial
5Privado y ConfidencialILC Page 5
Revenues come from…
Gross Salary
Net Salary
Taxes: Range 0% - 40%
$1.27%
Commission fee
Supplemental health insurance
7%
Additional health contribution
Pension Fund Retirement
Habitat average: Ch$ 638,923 (US$ 1,218)Chile average: Ch$ 593,180 (US$ 1,131)
Source: Superintendencia AFP, as of Dec-13; exchange rate $524.61
10%
Voluntary savings
Annuity
SavingsRetirement
Programmed Withdrawal
Mandatory Health Insurance
Voluntary Health Insurance
Insurance Healthcare
Estrictamente Privado y Confidencial
6Privado y Confidencial
Our Business
Estrictamente Privado y Confidencial
7Privado y ConfidencialILC Page 7
Habitat
Income Statement (Th.US$*)
Revenues
Cost of sales
Dec – 13
246,619
-
EBITDAE**
SG&A
161,670
(102,277)
Operating Income 144,043
Gross Profit 246,619
Dec – 12
231,221
-
163,905
(86,388)
144,564
231,221
Net Income 151,490 142,182
Var. %
6.7%
-
-1.4%
18,4%
-0.4%
6.7%
6.5%
Gain (loss) of the encaje 27,924 24,896 12.2%
• Created in 1981 under the newprovisional system
• The only AFP under the samecontroller through all its history
• 67.5% owned by ILC
• One of the most efficient AFP interms of cost control and thesecond 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$524,61 as of December 31st,2013.
Estrictamente Privado y Confidencial
8Privado y ConfidencialILC Page 8
Habitat: Key considerations
� Salary base increase
� Voluntary savings products
� Incorporation of independent workers to the system
� Capture of transfers from competitors
Products offered
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
Ample growth opportunities
Total AUM = US$162.7 bnSource: Superintendencia de Pensiones, as of December 31st, 2013
Contributors market share (as of September 2013)
Source: Superintedencia de Pensiones1 Contributors / affiliates
Contribution rate1
53,0% 57.9% 57,7% 50.1% 77,0% 49,0%
Estrictamente Privado y Confidencial
9Privado y ConfidencialILC Page 9
0
50
100
150
200
250
300
350
0,0% 30,0% 60,0% 90,0% 120,0%
Net Income (Ch$ mm)
Fee income (US$ million) & Expenses % (Dec – 2013)
Current mandatory fee (Dec – 2012)
Operating expenses & % fee income (Dec-13)
Habitat: Key considerations
Based on actual figures
Adjusted to Habitat’s 1.27% fee rate
Habitat
1.27%
Capital
1.44%
Cuprum
1.48%
Provida
1.54%
Planvital
2.36%
Modelo
0.77%
Fee
Inco
me
(US
$ m
illio
n)
Expenses % Fee Income
Habitat
247
Capital
220
Cuprum
190
Provida
327
Planvital
42
Modelo
39
41.5% 68.9%39.1% 54.2% 50.3%40.7%
CAGR ex-encaje (‘09-’13) 7.5%
Estrictamente Privado y Confidencial
10Privado y ConfidencialILC Page 10
AFP Industry as of Dec-13
Evolution of Contributors
Contributor average salary
Evolution of Habitat AUM (US$ Million)
Source: Superintendencia de Pensiones, as of December 31, 2013
Annual growth of Gross Salary(nominal terms)
429.034 442.013
471.108
507.869
547.553
593.180
429.414
442.068
475.543
523.877
578.907
638.923
400.000
450.000
500.000
550.000
600.000
650.000
700.000
Dic 08 Dic 09 Dic 10 Dic 11 Dic-12 Dic-13
Industria Habitat
Ch$
CAGR: 8.3%
CAGR: 8.5%
Estrictamente Privado y Confidencial
11Privado y ConfidencialILC Page 11
AFP Industry as of Dec-13
Contributors Evolution: Salary < CL$500 Th. Contributors Evolution: Salary > CL$1,400 Th.
Contributors Market Share Evolution: Salary < CL$500 Th.
Contributors Market Share Evolution: Salary > CL$1,400 Th.
Estrictamente Privado y Confidencial
12Privado y ConfidencialILC Page 12
Habitat: Peru
� December 20 th 2012, Habitat was awarded in the first auction in
Peru
� All the new entrant into the formal sector contribu te into Habitat
for two years
� 600,000 new beneficiaries expected in two years
� As of June 1 st 2013, Habitat started operations in Peru.
Mandatory mix fee rate after the first auction (%)
Ample growth opportunities
Total AUM = US$36.2 bnSource: SBS as of December 2013
Contributors market share (as of December 2013)
Prima
1,55%
Over the contribution
Integra
Over the AUM
1,51%
1,49%Profuturo
PROMEDIO
0,47%Habitat
1,26%
1,20%
1,90%
1,20%
1,25%
1,39%
Source: Superintendencia de Banca, Seguros y AFP del PerúSource: SBS as of December 2013
Estrictamente Privado y Confidencial
13Privado y ConfidencialILC Page 13
Potential synergies in the health business
7% of the gross salary
is the mandatory
contribution
* The GES plan cost 0.325 U.F since July 1st, 2013
Full coverage of 80 diseases in an established network *
10% of the gross salary
is the average contribution
Average monthly contribution per contributor: USD $137.4
Medical Bill
Monthly primus
Co-payment between the company and the employee
Average monthly contribution per beneficiary: USD $18.7
% covered by:
% covered by:
% of the Net Salary
% covered by the person
or
USD 15.2**
Estrictamente Privado y Confidencial
14Privado y ConfidencialILC Page 14
Consalud
Dec – 13
595,338
(507,819)
(78,466)
13,476
87,519
Dec – 12
524,923
(435,994)
(69,481)
22,793
88,929
15,250 19,653
Var. %
13.4%
16.5%
12.9%
-40.9%
-1.6%
-22.4%
Income Statement (Th. US$*)
Revenues
Cost of sales
SG&A
Operating Income
Gross Margin
Net Income
• Created in 1984 under the newprovisional health system(Isapre)
• 99.9% owned by ILC
• The price of GES rose to UF0.325 due to the inclusion of 11new diseases, since July 1st,2013
22,368 29,660 -24.6%EBITDA**
**EBITDA calculated as profit before tax minus depreciation, finance cost and other non operational cost.*Exchange rate of Ch$524,61 as of December 31st, 2013.
Estrictamente Privado y Confidencial
15Privado y ConfidencialILC Page 15
Products offered
Consalud: Key considerations
� Growing demand prospects
� Leading private health insurance provider and strong market position
� Strong brand recognition
� Continuous innovation and incorporation of new technologies
� First choice provider for people moving from the public to the private health insurance system
Medical plans
� Open network plans� Preferred provider plans� Closed network plans
Complementary product offerings
� Additional coverage for catastrophic diseases
� Dental plans� Pharmacy plans
18.6%
18.2%
13.6%
29.8%
19.7%
Isapre: 3.06 mm
Fonasa D: 3.0 mm
Fonasa C: 2.2 mm
Fonasa B: 4.9 mm
Fonasa A: 3.2 mm
Source: Superintendencia de Salud, as of December 2013Others includes Vida Tres and Ferrosalud.
Total Contributors = 1,683,587
Source: Fonasa, as of December, 2012
Estrictamente Privado y Confidencial
16Privado y ConfidencialILC Page 16
Consalud: Key considerations
Source: Superintedencia de Salud and ILC 1 Operating revenues divided by the number of contributors. Exchange rate of Ch$521.64 as of December 31th,2013; 2 Operating expenses divided by operating revenues
Number of Contributors (as of December 2013) Average monthly contribution 1 in US$ (Dec-13)
Loss ratio 2 (as of December 2013)Number of Beneficiaries (as of December 2013)
137,4150,4
163,5170,0
200,7
244,1
0,0
50,0
100,0
150,0
200,0
250,0
300,0
Consalud Másvida Banmédica Cruz Blanca Colmena Vida Tres
84,7%
86,8%87,0%
87,5%
88,5%
90,0%
82,0%
83,0%
84,0%
85,0%
86,0%
87,0%
88,0%
89,0%
90,0%
91,0%
Consalud Vida Tres Banmédica Másvida Cruz Blanca Colmena
Estrictamente Privado y Confidencial
17Privado y ConfidencialILC Page 17
Consalud: Operating data
Mandatory contributions (Ch$ million)
Voluntary contributions (Ch$ million)
Dec- 11
182,697
62,748
TOTAL (Ch$ million) 248,798
Others (Ch$ million) 3,353
Dec-12
208,126
66,793
275,380
461
Dec-13
231,374
80,426
312,320
520
Source: Superintedencia de Salud.
639,776
671,571
675,665
388,883
410,053
462,241
340,000
360,000
380,000
400,000
420,000
440,000
460,000
480,000
620,000
630,000
640,000
650,000
660,000
670,000
680,000
Dec-11 Dec-12 Dec-13
BeneficiariesN° Beneficiaries Revenues / Beneficiary
(Ch$)
Estrictamente Privado y Confidencial
18Privado y ConfidencialILC Page 18
Red Salud
Dec-13
366,798
(287,066)
(54,562)
25,171
79,733
Dec-12
312,252
(246,111)
(48,634)
17,508
66,141
7,232 4,502
Var. %
17.5%
16.6%
12.2%
43.8%
20.5%
60.6%
Income Statement (Th. US$*)
Revenues
Cost of sales
SG&A
Operating Income
Gross Margin
Net Income
• One of the main privatehealthcare providers, reachingclose to 18.5% of the privatebeds in Chile
• 89.9% owned by ILC
• National coverage through anetwork of 17 hospitals and 33medical centers
44,983 38,130 18.0%EBITDA**
**EBITDA calculated as profit before tax minus depreciation, finance cost and other non operational cost.*Exchange rate of Ch$524,61 as of December 31st ,2013.
Estrictamente Privado y Confidencial
19Privado y ConfidencialILC Page 19
68
100
103
105
105
128
256
330
335
360
220
540
Iquique
Las Lilas
Avansalud
UC San Carlos
UC Lira
Tabancura
Las Condes
Alemana
Santa María
Indisa
Bicentario
Davila
Chilean private hospitals by number of beds (2012)
Red Salud: Overview
493*
Red Salud hospitals
Others
ILC market share (in terms of private
hospital beds): 18,5%
Source: ILC, annual reports of the companies as filed with the SVS, except Clinica Alemana, where the information has been derived from its website; *Represents the original number of beds for this project, still not approve by the board.
222
235235
Estrictamente Privado y Confidencial
20Privado y ConfidencialILC Page 20
Evolution of revenues – Red Salud
Red Salud: Operating data
Admissions
Emergency room visits
Dec-12
48,035
116,214
Patient days 120,535
Dec-13
52,577
132,077
129,237
Tabancura
Avansalud
Average ocupancy rate
73.8%
67.3%
Iquique 51.8%
Bicentenario 66.0%
Average lenght of stay (days)
2.89
1.47
2.43
3.10
Dec - 13
Includes Bicentenario, Avansalud, Tabancura and Iquique hospitals
Evolution of EBITDA LTM – Clínica Bicentenario
Estrictamente Privado y Confidencial
21Privado y ConfidencialILC Page 21
Red Salud: Operating data
Evolution of Revenues, Net Income and EBITDA of ou r private hospitals and outpatient centers
*EBITDA calculated as Operating income minus D&A
Income Statement (Dic-12) Megasalud Avansalud Tabancura Bicentenario Iquique
Million Ch$
Revenues 75.045 25.592 28.631 27.869 6.060
Cost of Sales ( 57.525) ( 19.534) ( 21.721) ( 25.497) ( 4.411)
Gross Profit 17.520 6.058 6.910 2.372 1.648
SG&A ( 10.754) ( 3.095) ( 4.209) ( 4.801) ( 1.674)
Operating Income 6.766 2.963 2.701 ( 2.429) ( 25)
Net Income 5.050 1.196 1.682 ( 4.641) ( 54)
EBITDA(*) 9.438 4.877 3.853 ( 634) 192
EBITDA Mg. 12,6% 19,1% 13,5% -2,3% 3,2%(*) EBITDA is the Operating Result minus depreciation and amortization
Income Statement (Dic-13) Megasalud Avansalud Tabancura Bicentenario Iquique
Million Ch$
Revenues 84.320 31.565 31.949 36.204 6.499
Cost of Sales ( 65.827) ( 24.508) ( 24.279) ( 31.819) ( 4.323)
Gross Profit 18.493 7.057 7.671 4.385 2.176
SG&A ( 11.079) ( 4.055) ( 4.843) ( 4.517) ( 1.539)
Operating Income 7.414 3.002 2.828 132- 637
Net Income 5.658 1.328 1.953 ( 2.575) 440
EBITDA(*) 10.382 5.277 4.159 1.884 836
EBITDA Mg. 12,3% 16,7% 13,0% 5,2% 12,9%(*) EBITDA is the Operating Result minus depreciation and amortization
Estrictamente Privado y Confidencial
22Privado y ConfidencialILC Page 22
Vida Cámara
Dec – 13
64,871
(64,253)
(11,208)
(4,010)
7,198
Dec – 12
189,015
(126,930)
(16,442)
51,788
68,231
(2,785) 42,106
Var. %
(65.7%)
(49.4%)
(31.8%)
(107.7%)
(89.5%)
(101.6%)
Revenues from insurance activities
Cost of Sales
SG&A
Operating Income
Gross Margin
Net Income
• Created in 2009 due to theacquisition of 99.9% of RBS(Chile) Seguros de Vida S.A.
• 99.9% owned by ILC
• On January 2012 launch thecomplementary healthinsurance business, addingmore than 15,000 beneficiariesper month
• As of September 23rd 2013,Vida Cámara was awarded,with two of seven fractions, theD&S insurance auction in Peru
*Exchange rate of Ch$524,61 as of December 31tst 2013.
Income Statement (Th. US$*)
6,579 6,146 7.0%Revenues from financial result
Estrictamente Privado y Confidencial
23Privado y ConfidencialILC Page 23
Vida Cámara: Key considerations
� Since July 2012, Vida Cámarastopped supplying the D&S insurance
� 36% premium market share in the D&S business (July 2010-June 2012)
� Complementary health insurance
� Life and catastrophic insurance
� Entrance in Peru
In average, more than 9,000 beneficiaries per month
Evolution of beneficiaries for the complementary h ealth insurance
New projects
Estrictamente Privado y Confidencial
24Privado y ConfidencialILC Page 24
Corp Group Vida Chile
• As of November 18th, 2013 the due diligence process finished and ILC acquired 67% of the shares of Corp Group VidaChile S.A.. The price paid for the shares and social rights was CLP $87,250 million (US$ 167.5 mm)
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
Source: Asociación Chilena de Aseguradores
Estrictamente Privado y Confidencial
25Privado y Confidencial
Financial Summary
Estrictamente Privado y Confidencial
26Privado y ConfidencialILC Page 26
Balance Sheet
Dec – 13
439,950
1,399,563
10,100,221
Dec – 12
467,768
1,364,869
2,012,167
Balance
Total current assets
Total non current assets
TOTAL ASSETS
330,303
797,341
7,604,138
297,631
477,875
128,820
Total current liabilities
Total non current liabilities
Total insurance liabilities
1,368,439 1,107,842TOTAL EQUITY
10,100,221 2,012,167TOTAL EQUITY & LIABILITIES
US$* Thousands
Dec – 13
180,092
674,314
US$* Thousand
Short term debt
Long term debt
854,405Total financial debt
Dec – 13
331,231
1,368,439
US$* Thousand
Cash & cash equivalent
Total equity
< 1.0 X
0.38 x
COVENANT
Net Fin. Debt / Total Equity
(*)Exchange rate of Ch$524.61 as of December 31st, 2013
8,260,708 179,530Total insurance assets
Dec– 13
180,312
Dec – 12Income Statement
Non insurance activity operating income
160,890 158,271NET INCOME
238,065 243,582
Profit attributable to non-controlling interest and
income tax expense
184,428
67,208Non insurance activity non
operating income26,360
Insurance activity operating income
(297) 51,788
Insurance activity non operating income
2,603 707
(88,937) (105,011)
Non insurance activity EBITDAE**
(**)EBITDAE calculated as profit before tax minus depreciation, finance cost, other non operational cost and financial income due to Habitat´s encaje.
Estrictamente Privado y Confidencial
27Privado y ConfidencialILC Page 27
85,986 84,814
15,56011,735
20,00423,599
6,236 4,744
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2012 2013
Others
Red Salud
Consalud
Habitat
Ch$ million
Financial Data (December-13)
Financial Debt
Cash Flow from main subsidiaries (Dec-13) EBITDA (non insurance business) (Dec-13)
Credit Risk
Feller Rate:AA+
Humphreys:AA+
Local credit rating
*Exchange rate of Ch$524,61 as of December 31st, 2013
(*) According to Superintendent of Health regulation. (**) According to the current dividend policy of each subsidiary as of December 2013
Financial Debt
(USD million) ILC Habitat
Vida
Cámara
Corp Group
Vida Chile S.A. C. Machalí Consalud Red Salud TOTAL
Corto Plazo 3,3 0,1 1,6 143,7 0,3 5,2 25,9 180,1
Bonds 3,3 - - 21,8 - - 2,3 27,4
Bank loans - - 1,6 122,0 0,3 5,2 18,0 147,0
Financial leasing - 0,1 - - - - 5,6 5,6
Largo Plazo 274,9 0,5 - 186,8 6,2 1,0 205,0 674,3
Bonds 106,1 - - 186,8 - - 85,8 378,6
Bank loans 168,8 - - - 6,2 1,0 36,7 212,7
Financial leasing - 0,5 - - - - 82,5 83,0
Total 278,2 0,5 1,6 330,5 6,5 6,2 230,9 854,4
Dec-13
Distributable
Net Income
(Ch$ mm)
Dividend
Policiy** %
Ownership
%
Div. to ILC
(Ch$ mm)
Habitat 56,385 90% 67.5% 34,244
Red Salud 3,794 100% 89.9% 3,411
Consalud* 9,454 100% 99.9% 9,445
Vida Cámara ( 1,461) 100% 99.9% -
CGVC 1,736 30% 67.0% -
Total 69,908 47,099
Estrictamente Privado y Confidencial
28Privado y Confidencial
Deutsche Bank ConferenceMay-14
For more information, please contact with:
Ignacio González R. María Paz Merino Pagola
CFO Head of Investor Relations
Phone: (56 2) 2477 4606 Phone: (56 2) 2477 4673
[email protected] [email protected]
www.ilcinversiones.cl