Grupo SURA Corporate Presentation Q2-2019
Disclaimer The forward- looking statements contained herein are based on Management’s current forecasts and outlook. For better illustration and decision-making, figures for Suramericana, SURA Asset Management and its subsidiaries are administrative rather than accounting, and therefore may differ from those presented to official entities. Thus, Grupo de Inversiones Suramericana assumes no obligation to update or correct the information contained in this presentation. Figures from income statement are converted to USD with an exchange rate of 3,189.4 COP/USD (average exchange rate for 2019), other financial figures are converted to USD with an exchange rate of 3,205.7 COP/USD (rate for end of period Q2-2019) only for re-expression purposes. 2
Latam Economies CHILE COLOMBIA PERU MEXICO moderation of not ready to ease expecting better monetary policy consumption growth yet second half year easing increased growth both locally and reflecting fall in externally confidence 2.5% 3.0% 3.1% 0.2% - 0.7% GDP GDP GDP GDP 2.0% 4.25% 2.50% 8.0% Current Policity rate Current Policity rate Current Policity rate Current Policity rate 2.0% 4.0% 2.25% 7.5% Expected eop Expected eop Expected eop Expected eop 2.8% 3.8% 2.1% 3.7% Inflation Inflation Inflation Inflation Pacific Alliance countries less vulnerable than other EM economies, fundamentals still healthy 3 Expected figures for 2019 unless otherwise stated. EOP: end of period 2019
Leading Financial Services Group in Latam with a solid and diversified portfolio 11 countries 51 million clients #1 PENSION FUND #1 INSURANCE #1 COLOMBIAN INDUSTRIAL MANAGER COMPANY BANK INVESTMENTS in Latam, with a in Colombia, with an with a leading with relevant positions growing voluntary established growth presence in Central in attractive markets savings business platform in Latam America USD 53.5 bn USD 143 bn USD 5.1 bn in AUM in Operating Revenues in loans A S S E T S M A N A G E D B Y O U R M A R K E T C A P I N V E S T M E N T G R A D E : B R A N D E M P L O Y E E S * R E C O G N I T I O N USD 6.1 bn 59,000 S T R A T E G I C I N V E S T M E N T S * FITCH BBB S&P BBB- ~60% USD 226 bn J u n e 3 0 , 2 0 1 9 4
Diversified Investment Portfolio and other investments Insurance, trends Cement, energy and risk management and infrastructure 1.4% 81.1% STAKE 35.2% STAKE* 11.5% 20.2% 11.7% USD Processed food 10.8 b n 35.2% STAKE 26.3% Pensions, asset and 29.0% wealth management 83.6% STAKE Universal banking 46.1% STAKE* 77% 50% Note: *SURA AM valued at the last transaction (CDPQ), in financial in publicly Suramericana at 1.8x BV and companies listed at market services listed companies value at the end of the quarter. 5 *Stakes in common shares
History & Growth Stages INSURANCE INTERNATIONAL LEADERSHIP EXPANSION in Colombia Multi Latin, financial services group 1 9 4 4 / 1 9 9 0 2 0 0 7 / 2 0 1 6 2 0 1 7 - 1 9 9 0 / 2 0 0 7 FOOTPRINT FINANCIAL OPTIMIZATION SERVICES divestment of annuities leader in Colombia business (Chile and Peru) 6
Building a Regional Platform with a Long Term View BECOMING THE CREATING LONG AND THE 4TH WITH A FOCUS ON LARGEST PENSION FUND TERM RELATIONS LARGEST LATAM FINANCIAL STRENGTH MANAGER IN LATAM WITH OUR CLIENTS INSURANCE GROUP # of clients AUM Dividends Gross received from from pension written premiums management our portfolio business 14 51 USD 10 bn USD 143 bn USD 90 USD 311 USD 1.2 bn USD 5.1 bn MILLION MILLION MILLION MILLION 2 0 1 0 2 0 1 9 2 0 1 0 2 0 1 9 2 0 1 0 2 0 1 9 E 2 0 1 0 2 0 1 9 SUCCESSFUL % Dividends & Net Income from Colombia # of countries DIVERSIFICATION FROM COLOMBIA 3 100% 45% 11 7 2 0 1 0 2 0 1 9 2 0 1 0 2 0 1 8 Nota: 2019 figures are LTM as of Q1-2019
Geographic Footprint P O P U L AT I O N C L I E N T S F I N A N C I A L S E R V I C E S 520 MM 51 MM + 1 . 1 % C A G R ( 2 0 0 0 - 2 0 1 8 ) I N 11 C O U N T R I E S P E N E T R AT I O N * B A N K I N G I N S U R A N C E P E N S I O N 3.1% vs . 7.8% 31% vs . >80% ~ 4 8 % vs . > 150% f o r a d v a n c e d c o u n t r i e s f o r U S a n d U K f o r U S a n d E U D R I V E R S ECONOMIC MIDDLE UNDER FORMALIZATION DEMOGRAPHICS GROWTH CLASS PENETRATED OF THE FORMATION SECTORS ECONOMY 8 *Penetration as measured by Premiums/GDP of the countries were Suramericana has presence, AUM/GDP in the countries were SURA AM has presence and loans/GDP in Colombia.
Corporate Strategy Purpose: Create well-being and sustainable development for people, organizations and society. Aspiration: to become a referent Latin American Group in the financial services sector, thanks to our ability to evolve and provide superior added value to shareholders and society. STRATEGIC PRIORITIES STRATEGIC PILLARS Financial management ➢ Transformation and evolution of our businesses ➢ Financial strength and investment capacity Human talent and culture ➢ Delivering greater value to our clients Innovation and entrepreneurship Internal and external alliances Trust and reputation Knowledge ALIGNING OUR BUSINESSES WITH METRICS AND GOALS C O N T R I B U T I O N T O S O C I E T Y • T R U S T • S U S T A I N A B I L I T Y V A L U E C R E A T I O N • • Brand and Market development, externalities ROE Dow Jones reputation and contribution to SDG EVA Sustainability Index positioning 9
Portfolio Management Strategy SH AREHOLDER VALUE R ETU RN ON C APITAL GR OW TH S YS TEMATIC C A PITAL MAN AGEMENT AT STRATEGIC PR OACTIVE C OR PORATE A D D IN G AC QUISITIONS D IVESTITURES VALUE TO U N ITS ALLOCATION A GR ANULAR LEVEL BE A BETTER OWNER BE IN GOOD BUSINESSES • Focus on value • After an intensive • Understanding of • Review capital • Position ourselves creation, granular expansion phase, competitive exposure and for future profitable analysis for whole focus on profitability advantages and allocation process growth. portfolio. and organic growth. value creation levers criteria. of each operation. 10 * Source: McKinsey
Grupo SURA’s Financials Evolution CONSOLIDATED REVENUES* HOLDING COMPANY RECEIVED DIVIDENDS 311 313 ~3.4x 6.6% -0.8% 287 265 6.2% 253 2010 Dividends 31.2% 6,433 6,083 6,032 5,730 187 Bancolombia 171 4,368 SURA AM 138 Grupo Argos 94 92 Grupo Nutresa Protección Suramericana Other 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019E LTM T o t a l r e v e n u e s CONSOLIDATED NET INCOME CONT. OPERATIONS HOLDING COMPANY CASH FLOW (2019E) 36 320 20.4% -18.0% 7.6% 18.4% 492 492 284 99 522 500 441 415 410 98 87 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 OPERATING INTEREST DIVIDEND CASH DIVIDENDS AND OPERATING LTM CASH FLOW PAYMENT AVAILABLE OTHER INCOME EXPENSES & N e t i n c o m e 11 TAXES *Consolidated revenues figure includes Exchange Difference Figures in USD million
ADJUSTED ROE With an upward trend ADJUSTMENTS TO ROE Net Income: • Addback of non-cash expenses related to M&A 12% Equity 10.2% 11% 9.3% 9.1% • Associates and their portfolios, which are valued close to market prices 10.1% 9.7% 9.1% Normalized Adjusted ROE • Returns on legal reserves from mandatory pension funds (“ encaje ”) are normalized to reflect long-term returns on diversified portfolios 17' 18' Jun-19 (LTM) 21' Norm. Adjust. ROE Adjust. ROE ADJUSTED ROTE: 13.9 % 27.7 % SURA AM valued at the last transaction (CDPQ), Suramericana at 1.8x equity and companies listed at market value at the end of the quarter Portfolio valuation estimated by Grupo SURA. Does not constitute an investment advisory Figures in USD bilion
OUR PORTFOLIO Estimated value 0.2 10.8 1.2 1.3 9.0 >30% 1.8 2.8 Discount 6.1 2.2 3.1 GRUPO OTHER PORTFOLIO HOLDCO DEBT + PORTFOLIO SURA AM SURAMERICANA BANCOLOMBIA GRUPO MARKET VALUE NUTRESA ARGOS NPV OF TAXES & VALUE (-) CAP. EXPENSES DEBT M A R K E T C A P I T A L I Z A T I O N Current Market Cap implies S H A R E S A D T V ( J u n . 3 0 , 2 0 1 9 ) non-listed assets valued at: ( C O M M O N + P R E F ) D 6.1 bn 0.7x BV D 4.8MM US US 0.5x Estimated value Average LTM as of Q2-2019 SURA AM valued at the last transaction (CDPQ), Suramericana at 1.8x equity and companies listed at market value at the end of the quarter Portfolio valuation estimated by Grupo SURA. Does not constitute an investment advisory Figures in USD bilion
Grupo SURA Individual Debt D E B T 550 M AT U R I T Y P R O F I L E » C R E D I T R AT I O S » N E T D E B T / 300 D I V I D E N D S ( F T M ) 4.89x 163 137 86 73 49 30 29 Max. 5x 18 - - 2019 2020 2021 2022 2023 2024 2026 . 2029 2030 . 2049 I N T E R N A T I O N A L B A N K S L I Q U I D I T Y L O C A L B O N D S R E P O S B O N D S 1.0x USD 1.43 bn » F I N A N C I A L D E B T: Min. 1.2x 17 % 15 % L O A N T O VA L U E B A N K S CURRENCY U S D 13.4% TYPE OF B O N D S C O P EXPOSURE DEBT Max. range 25-30% 83 % 85 % 14 Figures in USD million
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