February 2nd, 2015 Colombia, Equities Earnings Estimates: 4Q 2014 Oil should drag down the entire market, while mixed results are expected across the board Market Alert: 4Q14 COLCAP Estimates In this report we include 4Q 2014 earnings estimates for the 22 companies in our Colombia sample. On a consolidated level, we expect negative 4Q14 results, including bottom line and EBITDA y/y contractions of 28.9% and 10.0% (COP terms), respectively. Oil & Gas will be the protagonist this quarter, as revenue generation will be seriously hit by lower oil prices (BRENT: -29.6% y/y). • Oil & Gas is expected to drag down our entire sample, as lower oil prices will explain a 24.5% y/y contraction in revenues for the sector. Further, as E&P cash costs remain around USD 30/barrel, operational gearing will cause significant margin compressions. Ecopetrol’s mid and downstream units will prove helpful in mitigating the impact on EBITDA, relative to pure E&P players; however, after the strong depreciation of the COP, USD-denominated debt should bring relevant FX losses. • Utilities are expected to post mixed results, as ISA will suffer FX losses on foreign debt, and Celsia’s bottom line, in an otherwise positive quarter, will fall y/y in absence of the extraordinary income (reversal of tax provisions) of 4Q13. ISAGEN will stand out as the sector winner with HidroSogamoso starting to contribute to consolidated figures. • Banks will grow led by Aval (both the HoldCo and Bogotá, its main investment) as we expect the relatively higher exposure to Central America and the moderation of the effective tax rate to have weighed favorably in 4Q14 results. • Operating figures in Cemargos will benefit from positive results in the US, along with growing volumes in Colombia. Bottom line is expected to grow for the whole cement & construction sector as CLH will not post the non-recurring losses of 4Q13. Colombia – Quarterly Corporate Earnings Growth (COP - % y/y) 60% CREDICORP CAPITAL EQUITY RESEARCH 50% 40% 24% 19% 20% 0% -20% -40% -4% -9% -18% -6% -17% -9% César Cuervo, CFA & Team [email protected] +(571) 339 4400 Ext. 1012 -4% -24% -29% 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14E This report is property of IM Trust S.A. and/or Credicorp Capital Colombia S.A. Sociedad Comisionista de Bolsa and/or Credicorp Capital Perú S.A.A. and/or its subsidiaries (hereinafter jointly referred to as “Credicorp Capital”), therefore, no part of this the material or its content, nor any copy of it, may be altered in any way, transmitted, copied or distributed to any third party without prior and express written consent of Credicorp Capital. In making this report, Credicorp Capital has relied on public information. Credicorp Capital has not verified the truthfulness, completeness or accuracy of the information accessed, nor has audited the information in any way. Accordingly, this report does not constitute a statement, assertion or guarantee (express or implied) as to the truth, accuracy or completeness of the information contained herein or any other written or oral information furnished to any person and/or their advisors. Colombia - 4Q14 Estimates Company Currency* Revenues EBITDA (Million) 4Q14E 4Q13 Banks** COP mn 8,856,922 Bancolombia COP mn 2,455,133 Banco de Bogotá COP mn Davivienda Grupo Aval EBITDA Mg. Net Income % Chg. 4Q14E 4Q13 % Chg. 4Q14E 4Q13 7,843,035 12.9% na na na 1,570,807 1,432,288 2,131,354 15.2% na na na 475,625 488,740 2,066,953 1,809,290 14.2% na na na 390,478 322,401 COP mn 1,233,924 1,126,891 9.5% na na na 217,750 COP mn 3,100,913 2,775,500 11.7% na na na 486,954 Cement & Construction COP mn 2,568,402 2,191,916 17.2% 667,650 535,411 24.7% Cemargos COP mn 1,596,973 1,307,351 22.2% 353,051 232,614 CLH USD mn 447 462 -3.3% 145 158 Conglomerates COP mn 2,659,422 2,206,254 20.5% 537,239 427,823 Corficolombiana COP mn na na na na na na Grupo Argos COP mn 2,366,690 1,984,056 19.3% 537,239 427,823 25.6% Grupo Sura COP mn 292,731 222,198 31.7% na na na Financials (non-banks) COP mn 19,407 19,560 -0.8% 6,921 6,693 3.4% Net Mg. 4Q14E 4Q13 Approx. Report Date % Chg. 4Q14E 4Q13 9.7% na na 17.7% 18.3% -2.7% na na 19.4% 22.9% March 20th 21.1% na na 18.9% 17.8% End of March 258,747 -15.8% na na 17.6% 23.0% 2nd Week of March 362,400 34.4% na na 15.7% 13.1% 247,730 104,835 136.3% 26.0% 24.4% 9.6% 4.8% 51.8% 103,417 54,792 88.7% 22.1% 17.8% 6.5% 4.2% February 25th -8.6% 66 26 153.8% 32.4% 34.2% 14.9% 5.7% February 4th 25.6% 369,078 323,084 14.2% 20.2% 19.4% 13.9% 14.6% 11,131 32,035 -65.3% na na na na End of March 110,160 102,902 7.1% 22.7% 21.6% 4.7% 5.2% February 26th 247,787 188,147 31.7% na na 84.6% 84.7% February 26th 6,459 5,879 9.9% 35.7% 34.2% 33.3% 30.1% End of March BVC COP mn 19,407 19,560 -0.8% 6,921 6,693 3.4% 6,459 5,879 9.9% 35.7% 34.2% 33.3% 30.1% Food & Beverages COP mn 1,623,283 1,796,994 -9.7% 232,462 257,673 -9.8% 72,291 100,080 -27.8% 14.3% 14.3% 4.5% 5.6% Nutresa COP mn 1,623,283 1,796,994 -9.7% 232,462 257,673 -9.8% 72,291 100,080 -27.8% 14.3% 14.3% 4.5% 5.6% Fuel Distribution COP mn 3,569,826 na na 66,608 nm nm 5,273 nm nm 1.9% nm 0.1% nm 5,273 nm nm 1.9% nm 0.1% nm 899,337 2,715,092 -66.9% 30.8% 30.4% 5.9% 13.3% -10 nm 48.2% 43.3% 7.4% -24.1% February 13th - 16th 1,081,600 2,426,505 -55.4% 29.5% 27.3% 8.0% 13.5% nm 39.9% 54.6% -10.7% Terpel*** COP mn 3,569,826 nm nm 66,608 nm nm Oil & Gas USD mn 15,357,217 20,343,570 -24.5% 4,723,198 6,193,661 -23.7% Canacol USD mn 37 43 -13.4% 18 19 -3.6% Ecopetrol COP mn 13,517,204 17,960,229 -24.7% 3,982,403 4,901,448 -18.8% 3 Pacific Rubiales USD mn 809 1,203 -32.7% 323 657 -50.8% -87 161 Retail COP mn 3,246,939 3,069,885 5.8% 350,669 340,786 2.9% 194,225 181,845 6.8% 10.8% 11.1% 6.0% 5.9% Éxito COP mn 3,246,939 3,069,885 5.8% 350,669 340,786 2.9% 194,225 181,845 6.8% 10.8% 11.1% 6.0% 5.9% Telecom & IT COP mn 332,191 355,510 -6.6% 123,883 173,924 -28.8% 18,737 105,466 -82.2% 37.3% 48.9% 5.6% 29.7% February 23rd February 23rd Mid-March February 25th 13.4% 1st week of March ETB COP mn 332,191 355,510 -6.6% 123,883 173,924 -28.8% 18,737 105,466 -82.2% 37.3% 48.9% 5.6% 29.7% Transport COP mn 2,640,985 2,303,481 14.7% 541,239 468,732 15.5% 169,545 139,663 21.4% 20.5% 20.3% 6.4% 6.1% 2H March March 24th Avianca*** USD mn 1,215 1,204 0.9% 249 245 1.6% 78 73 6.8% 20.5% 20.3% 6.4% Utilities COP mn 3,052,665 2,612,888 16.8% 1,391,901 1,200,854 15.9% 355,197 390,971 -9.1% 45.6% 46.0% 11.6% 15.0% Celsia COP mn 782,788 626,923 24.9% 276,308 213,280 29.6% 155,396 168,285 -7.7% 35.3% 34.0% 19.9% 26.8% ISA COP mn 971,302 964,157 0.7% 533,182 524,272 1.7% 86,053 105,740 -18.6% 54.9% 54.4% 8.9% 11.0% March 4th Isagen COP mn 682,504 514,394 32.7% 240,973 179,076 34.6% 153,165 119,544 28.1% 35.3% 34.8% 22.4% 23.2% March 2nd 20.1% -39,416 -2,598 nm 55.4% 56.0% -6.4% -0.5% March 11th -10.0% 3,908,680 5,499,204 -28.9% 19.7% 22.5% 8.9% 12.9% EEB COP mn 616,071 507,414 21.4% 341,438 284,226 Total Sample* COP mn 43,927,259 42,743,093 2.8% 8,641,771 9,605,556 6.1% 1st week of March February 19th * USD converted to COP at 2,173.7 (4Q14) & 1,913.2 (4Q13); average exchange rate for the period ** Banking revenues consider net operating income *** Organización Terpel is the result of a multi-company merger that took place in August 2014; no 4Q13 figures available **** AVIANCA considers EBITDAR estimates 2 Important Disclosures This report is property of IM Trust S.A. and/or Credicorp Capital Colombia S.A. Sociedad Comisionista de Bolsa and/or Credicorp Capital Perú S.A.A. and/or its subsidiaries (hereinafter jointly referred to as “Credicorp Capital”), therefore, no part of this the material or its content, nor any copy of it, may be altered in any way, transmitted, copied or distributed to any third party without prior and express written consent of Credicorp Capital. In making this report, Credicorp Capital has relied on public information. Credicorp Capital has not verified the truthfulness, completeness or accuracy of the information accessed, nor has audited the information in any way. Accordingly, this report does not constitute a statement, assertion or guarantee (express or implied) as to the truth, accuracy or completeness of the information contained herein or any other written or oral information furnished to any person and/or their advisors. 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In other words, the investment or operation result made by the client using the information contained in this report is of her/his sole responsibility. Credicorp Capital does not assume any responsibility, obligation or duty for any action or omission derived from the use of this document. Credicorp Capital recommends to their clients to ask for professional advice from financial, legal, accounting, tax experts before adopting an investment decision. Under no circumstances the information contained in this report may be considered as a financial, legal, accounting or taxation opinion, neither as a recommendation or investment advice. Rating System Rating Buy Definition Expected returns of 5 percentage points or more in excess over the expected return of the local index, over the next 12-18 months. N° of Companies covered with this rating Companies covered with this rating (%) 35 43% Hold Expected returns of +/- 5% in excess/below the expected return of the local index over the next 12-18 months. 36 44% Underperform Expected to underperform the local index by 5 percentage points or more over the next 12-18 months. 9 11% Under Review / Restricted Company coverage is under review or restricted. 2 3% 82 100% Total 3 CONTACT LIST ANDEAN RESEARCH TEAM SALES & TRADING Heinrich Lessau Hugo Horta Director of Research [email protected] Director of Sales & Trading [email protected] EQUITY RESEARCH EQUITY SALES & TRADING CHILE COLOMBIA PERU Hernán Arellano Francisca Manuschevich César Cuervo Héctor Collantes Head of Equities [email protected] Head of Equity Research [email protected] # (562) 2446 1798 Head of North Andean Equity Research [email protected] # (571) 339 4400 Ext 1012 Head of Equity Research [email protected] # (511) 205 9190 Ext 33052 Javier Günther Marilyn Macdonald Cristián Castillo Christopher DiSalvatore Jaime Pedroza Fernando Pereda Associate: Retail & Financials [email protected] # (562) 2446 1724 Senior Analyst: Utilities [email protected] # (571) 339 4400 Ext 1025 Senior Analyst: Cement & Utilities [email protected] # (511) 205 9190 Ext 37856 International Equity Sales [email protected] # (562) 2450 1695 International Equity Sales [email protected] # (4477) 7151 5855 International Sales Trader [email protected] # (786) 999 1633 CHILE PERU COLOMBIA Arturo Prado Juan C. Domínguez Iván Bogarín René Ossa Rodrigo Zavala Juan A. Jiménez Senior Analyst: Natural Resources [email protected] # (562) 2450 1688 Senior Analyst: Banks [email protected] # (571) 339 4400 Ext 1026 Senior Analyst: Retail & Others [email protected] # (511) 416 3333 Ext 33055 International Equity Sales [email protected] # (562) 2651 9324 Head of Equity - Peru [email protected] # (511) 313 2918 Ext 36044 Head of International Equity Sales [email protected] # (571) 339 4400 Ext 1701 Andrés Ossa Sebastián Gallego Tamara Vasquez Christian Munchmeyer Ursula Mitterhofer Santiago Castro Analyst: Utilities, Telecom & I.T. [email protected] # (562) 2651 9332 Analyst: Oil & Gas [email protected] # (571) 339 4400 Ext 1594 Research Assistant [email protected] # (511) 416 3333 Ext 37946 International Sales & Trading [email protected] # (562) 2450 1613 Sales & Trading [email protected] # (511) 313 2918 Ext 32922 International Sales & Trading [email protected] # (571) 339 4400 Ext 1344 Tomás Sanhueza Carlos E. Rodriguez Analyst: Food & Beverages, Healthcare [email protected] # (562) 2446 1751 Analyst: GEA & infrastructure [email protected] # (571) 339 4400 Ext 1365 Pilar González FIXED INCOME SALES & TRADING Analyst: Transport [email protected] # (562) 2446 1768 Felipe García Lourdes Alamos Head of Fixed Income [email protected] Research Coordinator & Holdings Analyst [email protected] # (562) 2450 1609 FIXED INCOME & ECONOMICS RESEARCH CHILE COLOMBIA PERU Gonzalo Covarrubias Carlos Sanchez Alfredo Bejar Head of Capital Markets [email protected] Head of Fixed Income [email protected] Head of Fixed Income / FX Trading [email protected] CHILE COLOMBIA PERU # (562) 2450 1635 # (571) 323 9154 # (511) 205 9190 Ext 36148 Paulina Yazigi Daniel Velandia Irvin León Guido Riquelme Christian Jarrin Vallerie Yong Head of Research & Chief Economist [email protected] # (562) 2450 1637 Head of Research & Chief Economist [email protected] # (571) 339 4400 Ext 1505 Senior Fixed Income Analyst [email protected] # (511) 416 3333 Ext 37854 Head of Sales [email protected] # (562) 2446 1712 RM Fixed Income Offshore [email protected] # (571) 340 2591 Local FI Senior Trader [email protected] # (511) 313 2902 - # (511) 313 2908 Felipe Lubiano Sergio Ferro Alberto Zapata Belén Larraín Andrés Valderrama Evangeline Arapoglou Senior Fixed Income Analyst [email protected] # (562) 2651 9308 Fixed Income Analyst [email protected] # (571) 339 4400 Ext 1609 Fixed Income Analyst [email protected] # (511) 205 9190 Ext 36018 Head of International FI Sales [email protected] # (562) 2446 1720 Fixed Income Trader [email protected] # (571) 323 9163 Senior International FI Trader [email protected] # (511) 313 2902 - # (511) 313 2908 Paulina Valdivieso Camilo A. Durán Paz Stepke José Andrés Riveros Lizeth Espíritu Fixed Income Analyst [email protected] # (562) 2651 9337 Macro Analyst [email protected] # (5511) 339 4400 Ext. 1383 International Fixed Income Sales [email protected] # (562) 2651 9336 Fixed Income Trader [email protected] # (571) 339 4400 Ext 1180 Fixed Income Trader [email protected] # (511) 313 2902 - # (511) 313 2908 Andrés Osorio Benjamín Diaz Economist [email protected] # (562) 2446 1760 Local Fixed Income Sales [email protected] # (562) 2446 1738 4