Presentation Santander Jan-13s21.q4cdn.com/.../2013/presentation_santande_jan_13.pdfCAGR ex-encaje (‘07-’11) 29,4% 200 250 300 Fee Income (US$ million) Privado y ConfidencialILC

Estrictamente Privado y Confidencial

1Privado y Confidencial

January, 2013

Santander Conference


Disclaimer

This presentation may include market outlooks and forward-looking statements, which are based on

the beliefs and assumptions of ILC´s management and on information currently available to the

Company. They involve risks, uncertainties and assumptions because they relate to future events and

therefore depend on circumstances that may or may not occur in the future. Investors should

understand that general economic conditions, industry conditions and other operating factors could

also affect the future results of ILC and could cause results to differ materially from those expressed in

2Privado y ConfidencialILC Page 2

also affect the future results of ILC and could cause results to differ materially from those expressed in

such forward-looking statements.

This presentation contains certain performance measures that have been adjusted with respect to

IFRS definitions.


ILC’s history: Key milestones

2012

20102011

20032004

20082009

� RSA increases stake in SVLC to 51%

� Acquisition of RSA stake in SVLC and subsequent sale to Bicecorp

� Acquisition of Citigroup’s stake in AFP Habitat and subsequent sale of 14% in the stock exchange

� Second D&S insurance auction

� Vida Cámara


Source: ILC

19992000

2001

1980

2004

1984

1989

19961997

19851981

� CChC creates ILC

� Association with Citigroup and RSA to control AFP Habitat and SVLC, respectively

� First D&Sinsurance auction

� Corporate bond issuance

SVLC (life insurance)

� Vida Cámaraexpands its product offerings to supplemental health and voluntary life insurance

� ILC placed the largest IPO in Chile (US$ 468 million)

� Habitat was awarded in the first auction in Peru


IPO

� On July 20 th we placed our IPO, the largest in the Chilean history

� The IPO totalized US$ 468 million

� Price per share at IPO: $7,061 (US$ 14.5)

New ownership structure (Sep-12)

Mutual Funds & Other institutional 10.7%

CChC 67.0%

Internationals 11.1%

Stockbrokers 11.2%

0

2

4

6

8

10

12

14

Daily average trading:

US$ (million)

US$ 4.02 million (Since July 23rd )

US$ 2.98 million (Since Ago 1st )


14.5)

Evolution of the stock price

34.2% performance difference as of December 28th, 2012

Number of shares: 100,000,000.-0

jul-12 ago-12 sep-12 oct-12 nov-12 dic-12

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

19

-07

-20

12

26

-07

-20

12

02

-08

-20

12

09

-08

-20

12

16

-08

-20

12

23

-08

-20

12

30

-08

-20

12

06

-09

-20

12

13

-09

-20

12

20

-09

-20

12

27

-09

-20

12

04

-10

-20

12

11

-10

-20

12

18

-10

-20

12

25

-10

-20

12

01

-11

-20

12

08

-11

-20

12

15

-11

-20

12

22

-11

-20

12

29

-11

-20

12

06

-12

-20

12

13

-12

-20

12

20

-12

-20

12

27

-12

-20

12

IPSA ILC

32.1%

-2.1%


RETAIL

IPO demand

TOTAL DEMAND

US$ 755 million

US$ 2,236 million

34%

100%

INTERNATIONAL

COMPETITIVE DEMAND

US$ 401 million

US$ 1,144 million

35%

100%


INTERNATIONAL

NIMS

LOCAL INSTITUTIONAL

ILC RELATED

US$ 487 million

US$ 364 million

US$ 362 million

US$ 268 million

22%

16%

16%

12%

RETAIL

LOCAL INSTITUTIONAL

NIMS

ILC RELATED

US$ 315 million

US$ 207million

US$ 192 million

US$ 29 million

28%

18%

17%

3%


We are a leading provider of retirement, insurance and private healthcare services in Chile through a group of best-in-class businesses

Company overview

For September 30 th, 2012

� Pension funds administration (AFP)Retirement

Sector US$193 mm

Revenues

US$ 116 mm

Net Income

67.5%

Ownership


Note: Amounts stated in U.S. dollars have been translated at the exchange rate of CLP 470.48 per USD, which was the official rate certified by the Central Bank for September 28th, 2012

� Health insurance institution (ISAPRE)

� Hospital healthcare services

� Outpatient healthcare services

� Supplemental health and voluntary life

insurance

Healthcare and Life

Insurance Sector

� Network of nine private schools and one

subsidized private school

� IT and outsourcing services

Other Businesses

and Real Estate

US$ 198 mm US$ 46 mm 99.9%

US$ 432 mm

US$ 254 mm

US$ 18 mm

US$ 5 mm

99.9%

89.9%

US$ 25 mm US$ 1.4 mm

99.9%

32.9%


Attractive demographics and solid macroeconomic fundamentals

Resilient population and income growth

1,1%

1,0%

0,3%

Chile

U.S.

Western

Europe

Japan (0,1%)

Strong real GDP growth

4,1%

3,6%

5,7%

4,1%

1,6%

4,5%

4,0%

5,9%

4,5%

2,7%2,4%

CAGR 2000-2010 CAGR 2011-2015EPopulation (2011-2015E CAGR)

5,6%

2,1%

1,3%

0,3%

Real Disposable Income (2011-2015E CAGR)


Japan (0,1%)

GDP per capita 2011 (USD thousands)

12.9 5.6 7.0 48.1 31.5

Gross debt / GDP 2011

65% 22% 36% 100% 82%

Source: IMF and S&P

11%

14.0

Chile has the highest GDP per capita among its peers in Latin America

1,2%

Chile Brazil Peru Colombia U.S. E.U.

Credit Rating (S&P)

BBB BBB BBB- AA+AA-

0,3%

(5,0)%

0,0%

5,0%

10,0%

15,0%

20,0%

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Salary base (real) GDP (real)

ILC’s industries have benefited from Chile’s sustained economic growth…

Source: SAFP and Central Bank; Note: Salary base = number of AFP contributors x average salary. Growth calculated based on the average salary base for the year

Salary base and GDP growth (%, real terms)

AVG: 6%

AVG: 5%

Source: U.S. Census Bureau, IMF, Euromonitor; Western Europe excludes Cyprus, Luxemburg and Malta


Revenues come from…

$1.27%

Commission fee

7%

Additional health contribution

Mandatory

Pension Fund Health insurance Healthcare

10%

Voluntary savings


Gross Salary

Net Salary

Taxes: Range 0% - 40%

Supplemental health insurance

Voluntary

Habitat average: Ch$ 572.278 (US$ 1,196)Chile average: Ch$ 547.585 (US$ 1,144)

Gross Salary

Source: Superintendencia AFP, as of Aug-12; exchange rate $478.5


Business Overview 2



Habitat

� Revenues increased 6.2% due to higher number of contributors and salaries increased of Habitat contributors

� SG&A increased 5.8%

� The “encaje” result increased 229.5%

Income Statement (US$ Th.)

Revenues

Cost of sales

Sep – 12

192,916

-

SG&A (68,491)

Operating Income 124,432

Gross Profit 192,916

Sep – 11

181,669

-

(64,722)

117,241

181,669

Var. %

6.2%

-

5.8%

6.1%

6.2%

Gain (loss) of the encaje 16,915 (13,061) 229.5%


increased 229.5% compared to the same period of the last year

EBITDAE* 140,850 129,612

Net Income 115,992 89,793

* EBITDAE calculated as profit before tax minus depreciation, finance cost, other non operational cost and financial income due to Habitat´s encaje

8.7%

29.2%

N° account holders

N° contributors

Sep - 12

2,154,399

1,237,602

Assets under management (MM Ch$) 19,318,525

Contributors / Account holders 57.4%

Market Share

23.4%

24.4%

25.8%

Sep - 11

2.172.402

1.227.041

17,299,586

56.5%


Habitat: Key considerations

� Salary base increase

� Voluntary savings products

� Incorporation of independent workers to the system

� Capture of transfers from competitors

Ample growth opportunities

Total AUM = US$159 bnSource: Superintendencia de Pensiones, as of September 30, 2012

Habitat

25.8%

Capital

21.7%

Provida

28.5%

Modelo

0.5%

Cuprum

20.7%

Planvital

2.8%


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

Source: Superintendencia de Pensiones, as of September 30, 2012

Contributors market share (as of September 2012)

Source: Superintedencia de Pensiones1 Contributors / affiliates

Contribution rate1 51.1% 57.4% 55.2% 75.6% 51.7% 45.8%

1.752.746

1.237.602

1.039.017

473.885379.715

180.478

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

1.600.000

1.800.000

2.000.000

PROVIDA HABITAT CAPITAL CUPRUM MODELO PLANVITAL


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

� 700,000 new beneficiaries expected in two years

Ample growth opportunities

Total AUM = US$37 bnSource: SBS as of November 30, 2012

Horizonte

23.6%

Integra

29.9%

Prima

31.5%

Profuturo

15.0%


Mandatory mix fee rate after the first auction (%)

Source: SBS as of November 30, 2012

Account holders market share (as of November 2012)

Prima

1,55%

Over the contribution

Integra

Over the AUM

1,51%

Horizonte

1,49%Profuturo

1,65%

PROMEDIO

0,47%Habitat

1,33%

1,20%

1,90%

1,20%

1,40%

1,25%

1,39%

Source: Superintendencia de Banca, Seguros y AFP del Perú

1,422,690

1,355,011

1,319,174

1,152,841

1.000.000

1.050.000

1.100.000

1.150.000

1.200.000

1.250.000

1.300.000

1.350.000

1.400.000

1.450.000

Horizonte Integra Prima Profuturo

Source: SBS as of November 30, 2012


Operating expenses & % fee income (Sep-12) Net Income (Ch$ mm)

Habitat: Key considerations

Based on actual figures

Adjusted to Habitat’s 1.27% fee rate

22,635 26,561 48,615 55,974 63,500 48,391 46,614 -

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

90.000

15,628

(21,832)

27,089 19,504

(1,846)

(6,145)7,958

CAGR ex-encaje (‘07-’11)29,4%

200

250

300

Fee

Inco

me

(US

$ m

illio

n)


Fee income (US$ million) & Expenses % (Sep – 2012)

Current mandatory fee (Sep – 2012)

Habitat

1.27%

Capital

1.44%

Cuprum

1.48%

Provida

1.54%

Planvital

2.36%

Modelo

0.77%

-

2007 2008 2009 2010 2011 9M11 9M12

50

100

150

20% 40% 60% 80% 100%

Fee

Inco

me

(US

$ m

illio

n)

Expenses % Fee Income

Habitat

193

Capital

172

Cuprum

145

Provida

260

Planvital

33

Modelo

24

35.5% 64.0%39.2% 40.3% 58.5%43.1%


Consalud

Revenues

Cost of sales

Sep – 12

432,205

(354,901)

EBITDA*

SG&A

27,959

(57,871)


Gross Profit 77,304

• Revenues increased 12.8% due to higher number of contributors and health plans indexed to the CPI

• Cost increased 11.6% mainly due to higher prices charged in the private hospitals

Sep – 11

383,272

(318,074)

19,580

(53,326)

13,917

65,198

Income Statement (US$ Th.) Var. %

12.8%

11.6%

42.8%

8.5%

58.7%

18.6%


EBITDA* 27,959

• SG&A increase 8.5% due to higher cost of sales force

Mandatory contributions (Ch$ million)

Voluntary contributions (Ch$ million)

Dec- 11

182,697

62,748

TOTAL (Ch$ million) 248,798

Others (Ch$ million) 3,353

Sep -12 (LTM)

204,226

69,009

277,766

4,530

19,580

Net Income 18,261 13,722

* EBITDA calculated as profit before tax minus depreciation, finance cost and other non operational cost

42.8%

33.1%


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 Total Contributors = 1,550,300

Consalud

22.3%

Colmena

16.3%

Masvida

14.1%

Banmédica

21.1%

Cruz Blanca

20.6%

Others

5.5%


Products offered

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%

19%

14%

25%

25%

Isapre: 2.8 mm

Fonasa D: 3.0 mm

Fonasa C: 2.2 mm

Fonasa B: 4.0 mm

Fonasa A: 3.9 mm

Source: Superintendencia de Salud, as of September 30, 2012Others includes Vida Tres, Ferrosalud and close-ended isapres

Total Contributors = 1,550,300


Consalud: Key considerations

Number of Contributors (as of September 2012) Averag e monthly contribution 1 in US$ (Sep-12)

345.629 326.601 319.986

253.159

219.354

72.817

50.000

100.000

150.000

200.000

250.000

300.000

350.000

400.000

138,5

164,0

177,7 186,3

220,4

262,0

100

120

140

160

180

200

220

240

260

280


Source: Superintedencia de Salud and ILC 1 Operating revenues divided by the number of contributors; 2 Operating expenses divided by operating revenues

Loss ratio 2 (Sep-12)Number of Beneficiaries (as of September 2012)

81,7%

83,4%

83,9%

84,5%

85,5%85,7%

80%

81%

82%

83%

84%

85%

86%

Consalud Colmena Cruz Blanca Banmédica Másvida Vida Tres

50.000

Consalud Banmédica Cruz Blanca Colmena Másvida Vida Tres

100

Consalud Másvida Banmédica Cruz Blanca Colmena Vida Tres

659.371

613.778 599.352

470.635

417.637

137.690

0

100.000

200.000

300.000

400.000

500.000

600.000

700.000

Consalud Banmédica Cruz Blanca Colmena Másvida Vida Tres


Vida Cámara


Revenues

Cost of sales

Sep– 12

197,601

(137,563)

EBITDA*

SG&A

57,114

(10,079)


Gross Profit 60,038

• Revenues decreased 16.0% mainly from the termination of the D&S insurance since July 2012

• Costs decreased as a result of lower payments on claims under the D&S

• SG&A increased 228.2% due

Sep – 11

235,109

(175,236)

64,726

(2,936)

56,937

59,873

Var. %

(16.0%)

(21.5%)

(11.8%)

243.2%

(12.3%)

0.3%


EBITDA* 57,114 • SG&A increased 228.2% due to higher sales force related to new business lines

Beneficiaries complementary health insurance

Jan - 12

1,376

Beneficiaries complementary health insurance

Sep- 12

130,115

64,726

Net Income 45,865 52,498


(11.8%)

(12.6%)


Vida Cámara: Key considerations

� Until June 2012, Vida Cámaraprovided disability and survivorship (D&S) insurance

� 36% market share in terms of premiums (July 2010-June 2012 period)

� Supplemental health insurance

� Life and catastrophic insurance

� Participation in mass tender processes

New projects


An average of 14,000 new beneficiaries per month

Evolution of the supplemental health insurance bene ficiaries during the year 2012

1,376 5,957

15,801

34,311 41,626

71,400

97,913

117,394

130,115

-

20.000

40.000

60.000

80.000

100.000

120.000

140.000

January February March April May June July August September

Number of

beneficiaries


Red Salud


Revenues

Cost of sales

Sep – 12

254,067

(199,575)

EBITDA*

SG&A

4,543

(41,433)


Gross Profit 54,492

• Revenues increased 20.6% due to higher activity in Bicentenario and Avansalud

• Costs raised 20.9% due to higher operation in Bicentenario and Avansalud

Sep– 11

210,664

(165,054)

912

(38,021)

7,590

45,610

Var. %

20.6%

20.9%

398.0%

9.0%

72.1%

19.5%


EBITDA* 4,543

• SG&A increased 9.0% due to higher expenses in Bicentenario

Admissions

Emergency room visits

Patient days

Surgeries

Dec 11

912

Net Income 30,460 20,529


398.0%

48.4%

Sep 12

37,987

90,555

89,418

39,151

34,910

81,387

89,166

36,483


Chilean private hospitals by number of beds (2011)

Red Salud: Overview

128

240

253

302

347

350

230

553

Tabancura

Sanatorio Aleman

Las Condes

Santa Maria

Alemana

Indisa

Bicentenario

Davila

493*

Geographic footprint and regional market share by number of beds (2011)

Regions

Metropolitan Region: 14%

17 private hospitals and 32 outpatient care centers

Region I: 33%

Region II: 18%

Region III: 73%

Region IV: 100% 208


96

98

100

103

104

105

105

106

120

126

152

162

H. Clínico del Sur

Avansalud

Las Lilas

Clínica Integral

Clínico de VM

U.C. Central

Del Profesor

U.C. San Carlos

Hospital Fusat

Alemana Temuco

Antofagasta

Reñaca

Nationwide Presence

Region VI: 36%

Region VIII: 15%

Region X: 15%

Region XII: 100%

Region IX: 30%

Region VII: 71%

Region V: 23%

Red Salud hospitals

Others

ILC market share (in terms of private hospital beds): 20%

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.


Evolution of revenues

Red Salud: Key considerations

Tabancura

Avansalud

Iquique

Bicentenario

Average occupancy

rate

Average length of stay

(days)Sep-12

73.8%

53.6%

57.0%

60.2%

3.14

1.36

2.57

3.00

23,635

13,725

5,865

25,656

19,035

11,398

6,234

27,695

23,510 23,686

5,846

3.000

8.000

13.000

18.000

23.000

28.000

Tabancura Avansalud Bicentenario Iquique

Ch$ million


Source: Clinics of Chile A.G., Cruz Blanca Salud, Banmedica and Red Salud, as of December 31, 2011Note: Red Salud includes beds of subsidiaries and affiliates

Total Private Hospital Beds = 6,101

Red Salud

20%

Banmédica

18%

Cruz Blanca

6%Alemana

6%

Indisa

5%

Las Condes

4%

Others

41%

Dec-10 Dec-11 Sep-12 (LTM)


Other business

Income Statement US$ Th.

Revenues

Cost of sales

Sep – 12

25,163

(10,062)

EBITDA*

SG&A

5,916

(10,969)


Gross Profit 15,102

• Revenues increased 16.3% due to higher number of students and higher outsourcing services

• Costs increased 17.7% due to higher salary expenses in both business

• SG&A increased 11.7% due

Sep – 11

21,638

(8,548)

4,778

(9,824)

3,365

13,090

Var. %

16.3%

17.7%

23.8%

11.7%

28.0%

15.4%


EBITDA* 5,916 • SG&A increased 11.7% due to higher expenses in maintenance and administration

N° of private schools

N° of subsidized schools

Sep - 12

9

1


4,778

Net Income (325) 1,394

23.8%

528.6%


Financial Summary



Consolidated financials

EBITDA composition (Sep-12)Net Income composition (Sep-12)

Ch$ million Ch$ million

36,836

8,582

21,557 1,921

(1,971)

66,926

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

66.267 123.738

13.154

26.871

14.331 3.115

20.000

40.000

60.000

80.000

100.000

120.000

140.000


Ch$ million

-

Habitat Consalud Vida Cámara Red Salud Others ILC

-

Habitat Consalud Vida Cámara Red Salud Others ILC

80.340 96.867

30.452

26.871

-

20.000

40.000

60.000

80.000

100.000

120.000

140.000

9M11 9M12

20.6%

11.7%110,792

123,738

Vida CámaraEBITDA

30.209

45.347

24.699

21.579

-

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

9M11 9M12

50.1%

21.9%54,908

66,926

Vida CámaraNet Income

Ch$ million


Consolidated financials

CAPEX Financial Debt (Sep-12)

SHORT TERM

Bonds

Sep – 12

58.8

3.2

Leasing in UF 29.2

Bank loans 26.5

LONG TERM

Bonds

399.3

210.2

Leasing in UF 106.5

Bank loans 82.6

Million USD* Ch$ million

20,551

15,852

19,536

12.000

14.000

16.000

18.000

20.000

22.000


Leasing in UF 106.5

Accumulated Dividends – Year 2012

Net Income

Ch$ millionSeptember 2012

66,926

Encaje ** 9,503

Distributable Net Income 57,423

Dividend Policy Accumulated Dividend ($/share)

Dividend Yield 9M 2012

60%

80%

344.5

459.4

4.9%

6.5%

Cash & cash equivalent for ILC

127.7

* The exchange rate of $470.483 as of September 30th ** Includes the financial income from the legal reserve plus net purchases for this legal reserves

10.000

Dec-10 Dec-11 Sep-12 (LTM)



January, 2013

Santander Conference

Documents

Presentation Santander Jan-13s21.q4cdn.com/.../2013/presentation_santande_jan_13.pdfCAGR ex-encaje (‘07-’11) 29,4% 200 250 300 Fee Income (US$ million) Privado y ConfidencialILC