Qualitas Controladora S.A.B. de C.V. · BMV:Q
Qualitas Controladora S.A.B. de C.V — Q2 2018 Earnings Presentation
19 slides from Qualitas Controladora S.A.B. de C.V's earnings presentation, Jul 20, 2018
Slide 1: Qualitas Controladora 2Q18 Webcast
Qualitas Controladora 2Q18 Webcast re |) QO [Qualitas -July20th-
Slide 2: Forward-looking statements
Quálitas | Webcast 2Q18 p. 02 Information discussed on today’s webcast may include forward-looking statements regarding the company’s results and prospects, which are subject to risks and uncertainty. Actual results may differ materially from what is discussed here today, and the Company cautions yo
Slide 3: Largest service network in Mexico
Quálitas | Webcast 2Q18 p. 03 • Q offers the largest service network in Mexico and has presence in the US and Central America Facilities Staff 186 Service Offices 5,088 Employees 1,227/402 227 ODQs* Claims Officers/Lawyers 3,572 Workshops 13,937 Agents
Slide 4: Cost containment measures for robbery and spare parts
Quálitas | Webcast 2Q18 p. 04 • Q has different cost containment measures to control robbery and spare parts price increases +4.9% Theft to Industry Theft to Quálitas Recovery Industry Recovery Quálitas Source:INEGI & OCRA
Slide 5: Q recovered in sales and improved underwriting and net margins
Quálitas | Webcast 2Q18 p. 05 • Q recovered in sales and improved its underwriting and net margins INCOME STATEMENT 2Q18 2Q17 Δ %/bp 2018 2017 Δ %/pb Written Premiums 7,928 7,506 5.6% 16,973 New car16,793 sales in Mx:1.1% Net Written Premiums 7,854 7,469 5.2% 16,736 16,734 0.0% Earned Premiums 7,747
Slide 6: Underwriting result improves more than 4x
Quálitas | Webcast 2Q18 p. 06 *Q improves more than 4x its underwriting result as a result of its pricing discipline and strong cost controls INCOME STATEMENT 2018 2017 Δ %/pb Written Premiums 16,973 16,793 1.1% New car sales in Mx: Net Written Premiums 16,736 16,734 0.0% -8.4% Earned Premiums 15,42
Slide 7: Operating expenses controllable and non-controllable items
Quálitas | Webcast 2Q18 p. 07 • Operating expenses include controllable and non-controllable items. YTD 2018 Ratio YTD 2017 Ratio UNDER Q's CONTROL 197 1.2% 76 0.5% Administrative Expenses 493 2.9% 516 3.1% Personnel remmuneration 184 1.1% 182 1.1% Policy Fees (678) (4.0%) (716) (4.3%) Depreciation
Slide 8: Acquisition and claims ratios offset operating ratio
Quálitas | Webcast 2Q18 p. 08 • Decreases in the acquisition and claims ratios offset the hike in the operating ratio Acquisition Claims Operating Combined
Slide 9: Premiums written grew despite negative car sales
Quálitas | Webcast 2Q18 p. 09 • Premiums written grew despite negative car sales in Mexico By business line: Segment 2Q18 2Q17 Δ$ Δ% 2018 2017 Δ$ Δ% Individual 2,164 1,734 430 24.8% 4,450 3,634 816 22.4% Fleets 2,130 1,668 462 27.7% 4,887 4,153 735 17.7% Financial Institutions 3,122 3,577 (454) (12.
Slide 10: Premiums earned grow more than premiums written
Quálitas | Webcast 2Q18 p. 10 • Premiums earned grow more than premiums written due to multiannual policies issued in the past Average duration of mutiannual policies 3.7 By duration 2Q18 2Q17
Slide 11: Highest ROAE since 2013
Quálitas | Webcast 2Q18 p. 11 • Q recorded its highest ROAE since 2013 Operating ROAE 13.4% LTM ROAE + Financial ROAE 21.8%
Slide 12: Investment portfolio almost doubled in three years
Quálitas | Webcast 2Q18 p. 12 • Investment portfolio (assets under management) almost doubled in the past three years. Dividend Q Closing payments** Price** $11.12 Actions approved by AGM $11.00 and applied during 2Q18: $0.50 $20.13 A 15 million shares capital stock reduction, from 450 to $1.50 $31.
Slide 13: High marketability stock trading US$2MM per day
Quálitas | Webcast 2Q18 p. 13 • Q is considered as a high marketability stock since March and it is trading US $2MM per day. Average Daily Trade Average Daily Value ∆% (MXN) ∆% (USD) ∆% Average XRT 2018 2017 2Q18 811,153 130.1% 41,411,733 278.0% 2,039,665 237.6% June 20.30 18.13 Cumulative 19.09 19.
Slide 14: Valuation attractive versus peers on ROE and multiple
Quálitas | Webcast 2Q18 p. 14 • Q’s valuation is attractive when comparing its ROE and multiple vs peers PTB/ROE matrix for peers * * Price / Book Value (Apr 19th) LTM Return on Equity 1Q18 1Q18 ROE P/E P/BV Q 32.9% 9.25 2.70 Source: Capital IQ & SiBolsa AVERAGE 15.2% 10.96 1.80
Slide 15: Investment strategy prioritizes flexibility
Quálitas | Webcast 2Q18 p. 15 • Q’s strategy prioritize flexibility as interest rate hikes in Mexico benefits the investment return. Portfolio by risk Portfolio by type of issuer Return on investments
Slide 16: Capital 2x regulatory requirement
Quálitas | Webcast 2Q18 p. 16 * Q has in its balance sheet (capital) 2x what is required by the regulators of the 4 countries in which it operates Dividend Payment of $304.5 million in April
Slide 17: Corporate social responsibility efforts
Quálitas | Webcast 2Q18 p. 17 • Efforts in ESG matters are outlined by the corporate social responsibility model Sponsorship of “Road Show” (theater play) Objective: To create awareness in youngsters between 15 and 18 years old about resposible driving Reach: 800 students Q sponsored 6,000 “Tour cam
Slide 18: 2018 guidance
Quálitas | Webcast 2Q18 p. 18 YTD18 2018e Written Premiums growth 1.1% 8 - 12 % Earned Premiums growth 13.7% 16 - 20 % Underwriting Margin (underwriting result/ earned premiums) 4.4% 1.5 - 2.5 % Acquisition ratio 22.7% 23 - 24 % Claims ratio 65.4% 68 - 69 % Operating ratio 5.0% 2 -3 % Combined ratio
Slide 19: Analyst coverage
Quálitas | Webcast 2Q18 p. 19 Institution Analyst E-mail Target Price Recommendation Actinver Enrique Mendoza [email protected] 56.0 MXN Hold BBVA Research Rodrigo Ortega [email protected] 34.9 MXN Buy Grupo Bursátil Mexicano Jorge Benitez [email protected] - - Interacciones Manuel Gonzále
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