Grupo Valorem Corporate Presentation August 2018
Contents 1. Profile 1.1 History and Background 1.2 Profile 1.3 Grupo Valorem s Diagram 2. Corporate Strategy 2.1 Valorem s Model and Current Corporate Projects 3. Companies 3.1 Main Companies 3.2 Grupo Valorem s Significant Figures 4. Team 4.1 Organizational Chart 2
1. Profile 1.1 History and Background 1.2 Profile 1.3 Grupo Valorem s Diagram 3
1. Profile 1.1 History and Background Valorem is the main investment vehicle of the Santo Domingo family in Colombia It has evolved over the years to focalize its investment portfolio in the services industry Growth through disruptive business models Desinvestment Stage Investment Investment Investment D1 control Sale 1997 2004 2008 2009 2011 2012 2015 2018 Split of non-beer assets Strategic Portfolio Reorganization Admionistrative Reorganization/Co rporate Governance Capital Strenfthening of 14 companies Delisting of securities Valores Bavaria 4
1. Profile 1.2 Grupo Valorem s Profile Valorem leads a business group that grows profitably and sustainably investing in companies in the services industry in order to transform or escalate them with disruptive business models 1, leveraged on its talent and corporate reputation Current portfolio includes these sectors: Media and Entertainment Environmental Services Transport Hospitality Services Retail 1 Disruptive business models: Those revolutionizing a sector by creating a previously nonexistent market 5
1. Profile 1.3 Grupo Valorem s Diagram 20% 60% 100% 52% 94% 100% 82% 100% 100 % 46% 6
2. Corporate Strategy 2.1 Valorem s Model and Current Corporate Projects 7
2. Corporate Strategy 2.1. Valorem s Model and Current Corporate Projects Valorem engages with its associated companies as a strategic architect Strategic Architect Shares management models Shares information systems Promotes corporate negotiations Shares customers/ channels Promotes transfer of best practices Corporate Projects Technology transformation program (SAP) Corporate Governance Talent management system Licensing, service and equipment negotiations IFRS implementation Value-based management Corporate sustainability model Engagement and communications Strategic risk management model Outstanding results management model 8
3. Companies 3.1 Main Companies 3.2 Grupo Valorem s Significant Figures 9
3.1 Main Companies Media and Entertainment Transport Environmental Services Hospitality Services Retail Other Non-controlling 10
General Description Relevant Data Caracol TV is the most watched private television channel in Colombia It s the second global distributor of Spanish content In 2017, 20.805 audiovisual content hours were exported to five continents It s Colombia s number one digital content publication network according to Comscore Brands: BLU Radio, Caracol Televisión, Caracol Noticias, Caracol Play, Gol Caracol, El Espectador, Cromos y Shock En 2012 lanza BLU Radio Year of creation 1969 Employees 1.891 Studios 14 Flyaway Antennas 7 Annual programming hours 6.618 Post-production studios 70 Market Share 2017 4 % 37 % 59 % 3 % 36 % 61 % Uno RCN Caracol Audience (Ibope) Sales (Asomedios) 11
Financial Summary Assets 1108 Financial Debt 211 212 256 1050 1047 2015 2016 2017 2015 2016 2017 Operating Income 729 Ebitda* 127 126 716 718 117 2015 2016 2017 2015 2016 2017 Figures in billions of pesos Under the Accounting and Financial Reporting Standards ( AFRS ), Law 1314 * Valorem management calculations 12
General Description El Espectador is the oldest newspaper in the country with a print version and various editions on its digital platforms Under the direction of Fidel Cano, it is considered one of the most serious and professional newspapers because of its independence, credibility and objectivity In 2017 : Audiovisual content products were integrated as business units High audience programs such as La Pulla and Blog del Rio obtained their own funding As a strategic decision, in 2018 charge for content will start Relevant Data Year of creation 1887 Employees 352 Monthly web users +14.046.521 At least one time users 2.057.000 Print Run, Sunday 432.200 Followers Followers Reproductions Followers Market Share 2017 Readers last period* *Source EGM OLA 2017 3. Does not include free newspapers 13
Financial Summary Assets 22 Financial Debt 19 20 Sin deuda 2015 2016 2017 2015 2016 2017 Operating Income 63 Ebitda* 61 61-3 -7-7 2015 2016 2017 2015 2016 2017 Figures in billions of pesos Under the Accounting and Financial Reporting Standards ( AFRS ), Law 1314 * Valorem management calculations 14
General Description Cromos is a reference point of fashion, lifestyle, good journalism, photojournalism, highlighting the history of our country It is a magazine that tells stories; glamorous magazine that shows the lifestyle of a woman who is very feminine, contemporary and modern In 2017 the most successful publications were: Director invitado ( with Goyo and the Pacific as special guests) Mujeres poderosas (focused in highlighting women s work in society) Esotérica Year of creation 1916 Employees 30 Frequency Fortnightly # of Magazines per edition 12.000 At least one time users 2.264.400 Monthly web users +2.007.096 Q= Fortnightly M= Monthly S= Weekly Relevant Data Market Share 2017 Readers last period* *Source: EGM OLA 2017 3. 15
Financial Summary Assets 7,18 5,98 6,55 Financial Debt No debt 2015 2016 2017 2015 2016 2017 Operating Income 8,23 6,35 5,09 Ebitda* -0,37 0,82 2015 2016 2017 2015 2016 2017-0,99 Figures in billions of pesos Under the Accounting and Financial Reporting Standards ( AFRS ), Law 1314 * Valorem management calculations 16
General Description Cine Colombia is the largest film exhibitor and distributor in the country It has the only alternative entertainment division in the country, with contents of the MET of NY, the Bolshoi Ballet and the London Theater among others In 2017, Cine Colombia launched its own pop corn brand. Also included Alpina desserts in its food offering In 2017, celebrated its 90 th anniversary, taking mobile cinema to over 100 municipalities in Colombia that have no movie theater infrastructure Relevant Data Year of creation 1927 Employees 1.973 Multiplex 45 Movie screens 307 Mega Cinema 8 Dinamix 4D 9 7% 18% Market Share 2017 (millions of spectators per circuit) 5% 4%2% 5% 19% 40% Source: Analysis by Cineco 17
Financial Summary Assets 677 676 Financial Debt 157 121 610 84 2015 2016 2017 2015 2016 2017 Operating Income 462 478 Ebitda* 123 127 425 116 2015 2016 2017 2015 2016 2017 * Valorem management calculations Figures in billions of pesos Under the Accounting and Financial Reporting Standards ( AFRS ), Law 1314 18
General Description Relevant Data Lines of business: National cargo, imports, exports, international cargo and last mile services Complementary services: Loading and unloading, vehicle support, preparation of border control documents, customs procedures, among others In 2017, Ditransa implemented improved technological tools for prospective clients management Likewise, Ditransa developed a pilot project for electronic billing process The company measures carbon foot print per client Year of creation 1994 Employees 250 Coverage Customers + 150 In-house offices 40 Preferential vehicles + 900 Own fleet Market Share 2017 Ditransa 2% Other 98% 19 ciudades 24 vehículos There are around 3.400 Transport services companies in the market. Source: Analysis by Ditransa 19
Financial Summary Assets 36 Financial Debt 23 19 18 32 30 2015 2016 2017 2015 2016 2017 Operating Income 128 Ebitda* 5 6 5 126 125 2015 2016 2017 2015 2016 2017 Figures in billions of pesos Under the Accounting and Financial Reporting Standards ( AFRS ), Law 1314 * Valorem management calculations 20
General Description Relevant Data Through the D1 brand, KOBA is the owner of the first hard discount chain in Colombia D1 offers high quality products at very low prices, with a limited assortment and a significant component of own brands D1 promotes gender equality and invests in it s employees development D1 mitigates the environmental impact or the operation and promotes environmental awareness within its consumers Year of creation 2009 Employees + 8.000 Coverage 9 departamentos Number of stores + 700 Distribution centers 11 Store size 250 M2 400 M2 Own Brands
Financial Summary Assets 648 Financial Debt 143 280 460 48 78 2015 2016 2017 2015 2016 2017 Operating Income 3106 Ebitda* 2134 1163-29 -23-48 2015 2016 2017 2015 2016 2017 * Valorem management calculations Figures in billions of pesos Under the Accounting and Financial Reporting Standards ( AFRS ), Law 1314 22
General Description Relevant Data Refocosta offers forestry services: assessment and implementation of new and already established plantations for industrial uses It has three business divisions: Products, Services (environmental impact mitigation) and Renewable Energy It provides services to large infrastructure clients, largescale hydroelectric projects and fourth-generation (4G) road concessions It has maintained the FSC (Forest Stewardship Council) certification for its leadership in international sustainability practices Year of creation 1980 Employees 550 Total hectares planted 5.041 Market Share 2017 Analysis by Refocosta 23
Financial Summary Assets 174 Financial Debt 5 162 165 3 3 2015 2016 2017 2015 2016 2017 Operating Income 115 Ebitda* 38 46 37 6 2 2015 2016 2017 2015 2016 2017 * Valorem management calculations Figures in billions of pesos Under the Accounting and Financial Reporting Standards ( AFRS ), Law 1314 24
General Description San Francisco Investments is developing a luxury hotel project in the city of Cartagena The project will revitalize and restore historic buildings of the city such as: Cloister of Saint Francis, Club Cartagena, Casa Ambrad, Casa García, as well as Cartagena, Calamarí, Rialto and Bucanero theaters. Club Cartagena and the Cloister of Saint Francis are considered properties of national cultural interest by the Ministry of Culture Construction License of the project was approved by the Urban Curator No. 1 of Cartagena through resolution 0699 of November 22, 2017. Special Management and Protection Plan was approved through Resolution 1458 of 2015 of the Ministry of Culture The project began construction stage in April 2018 Relevant Data Approximate opening date Location Project stage Capacity Facilities and services First quarter 2021 Getsemaní, Cartagena Pre-operative 132 rooms and 15 Grand suites 2 Restaurants, bar, spa, gym, wine cellar, pool, event rooms including main hall of more than 400 M2 25
General Description Relevant Data The company distributes and commercializes natural gas, as a clean energy source, contributing to improve the quality of life of the community through an excellent service Its main operation is in Barranquilla and has coverage in the North Cost of Colombia (Atlántico, Magdalena, Cesar and Bolívar) Subordinate companies: Year of creation 1967 Direct employees 308 Formal indirect employees (contractors) Coverage > 1.800 Number of customers 934.729 Volume sold Brilla portfolio 2016 (non-bank financing) Equity Participation 210 poblaciones 1.195 MM m3 225.861 MM 1.EFIGAS: 80.1% 536.116 users 240 MM m3 of sold gas in 2017 2.Gases de la Guajira: 86.9% 108.810 users 24,4 MM m3 of gas sold in 2017 Prime Other (Valorem) 20% Promigas 31% Invercolsa 49% 26
Financial Summary Assets 1684 1961 2093 Financial Debt 911 1116 1116 859 2015 2016 2017 2015 2016 2017 Operating Income 1750 1654 Ebitda* 338 321 1251 284 2015 2016 2017 2015 2016 2017 * Valorem management calculations Figures in billions of pesos Under the Accounting and Financial Reporting Standards ( AFRS ), Law 1314 27
3.2 Grupo Valorem s Significant Figures Sales per Company 2017 (weighted per share) Figures in billions COP 672 475 300-254 - 252 102 63 37 5 0.2 - - - - - - 1.856-1.856 2.528 3.003 3.303 3.557 3.809 3.911 3.974 4.011 4.016 4.016 Koba Colombia Caracol Cine Colombia Grupo Suppla Gases del Caribe Biofilm Ditransa Comunican Refocosta Cromos Canal Clima Total 46 % 17 % 12 % 7 % 6 % 11 % x % % of total Source: Valorem analysis
3.2 Grupo Valorem s Significant Figures EBITDA per Company 2017 (weighted per share) 22 4 2 38 68 1 ( 36 ) Figures in billions COP ( 7 ) ( 1 ) 121 122 243 311 349 371 375 377 342 335 334 334 122 Cine Colombia Caracol Gases del Caribe Biofilm Grupo Suppla Koba Ditransa Refocota Cromos Comunican Colombia Canal Clima Total 37 % 36 % 20 % 11 % -4 % x % % of total Source: Valorem analysis
3.2 Grupo Valorem s Significant Figures Financial Obligations per Company 2017 (weighted per share) Figures in billions COP 116 85-53 - 15 5 - - 143-239 172 239-411 554 670 755 808 823 828 Caracol Gases del Caribe Biofilm Cine Colombia Koba Colombia Grupo Suppla Ditransa Refocosta Total 29 % 21 % 17 % 14 % 10 % Grupo Suppla 9 % x % % of Total Source: Valorem analysis
3.2 Grupo Valorem s Significant Figures Assets per Company 2017 (weighted per share) 222 387-436 - 646-670 - 3.176 2.788 1.036 2.352-1.706 1.036 Figures in billios COP 165 24 22 7 1 - - - - 3.398 3.563 3.587 3.609 3.617 3.617 Caracol Gases del Caribe Cine Colombia Biofilm Koba Colombia Grupo Suppla Refocosta Ditransa Comunican Cromos Canal Clima Total 29 % 19 % 18 % 12 % 11 % 12 % x % % of Total Source: Valorem analysis
4. Team 4.1 Organizational Chart 32
Equipo 4. Team 4.1 Organizational Chart Board of Directors CEO Carlos Arturo Londoño VP Planning and Development of New Businesses VP Legal VP Financial and Administrative VP Corporate Affairs Luis Felipe Arrubla Carlos Rave Alejandro Arboleda Sergio Uribe Portfolio Management Financial Planning Management Legal Management Accounting Management Accounting Policies Management Investor Relations Management Corporate Talent Management Corporate Technology Information Management SAP Manager 33