Compania Cervecerias Unidas, S.A.

Good day, everyone, and welcome to CCU's fourth quarter 2025 earnings conference call on the 25th of February, 2026. Please note that today's call is being recorded. At this time, I'd like to turn the conference call over to Claudio Lazeras, the Head of Investor Relations. Please go ahead, sir.

Welcome, and thank you for attending CCU's fourth quarter 2025 conference call. Today with me are Mr. Felipe Duvernet, Chief Financial Officer and Carolina Burgos, Senior Investor Relations Analyst. You have received a copy of the company's Consolidated for Quarter 2025 results. As usual, the call will start by reviewing our overall results and then we will then move to a Q&A session. Before we begin, Please take notes of the following statements. The statements made in this call that relate to CCU's future financial results are forward-looking statements, which involve known and unknown risks and uncertainties that could cause that our performance or results could materially differ. This statement, as well, should be taken in conjunction with the additional information about risk and uncertainty successful in CCU's annual report, in Form 20-F filed with the U.S. Security and Exchange Commission, and also as the annual report submitted at the CMS. It is now my pleasure to introduce Mr. Felipe Duvernay. Thank you, Claudio, and thank you all for joining the call today. During 2025, CCU posted a strong set of results in its main operating segment Chile, while it faced a particularly challenging year in Argentina and in the wine business, especially during the second half of this. Isolating the non-recurring gain from the sale of a portion of land in Chile in 2024 consolidated a deep tap, decreasing 2.9%. By the bracing segment, Chile posted a robust 7.8% EBITDA growth, which was diluted by the 29.5% contraction in international business operating segments and a 14.9% drop in the wine operating segments. In addition, net income was down 16.3%. Under the same criteria and isolating Argentina, Consolidated Evita would have grown mid-single digit in 2025. In terms of business scale, consolidated volumes reached 36.2 million hectometers, expanding 7.3% versus 2024. Organic volumes increased 0.6%, fully driven by the geo-operating segment, which expanded 1.1%. recovering growth after three consecutive years of contraction. In terms of our strategy during the year, we move forward in our strategic 2025-2027 strategic plan and its three pillars, profitability, growth and sustainability. Regarding profitability, as mentioned, our core operating percent well above inflation and list a margin of 48 basis points while we keep growing in high margin innovation and delivering efficiencies in every aspect of the business. Regarding our growth pillar, we strengthened our regional footprint by successfully integrating in Paraguay PepsiCo's beverage portfolio and snacks Furthermore, we posted volume growth in our water business in Argentina in a tough business scenario and increased our beer scale in Colombia more. Also, to meet evolving consumer trends, we posted double-digit growth in low-alcohol and ready-to-drink federal products in Chile, innovating and consolidating our leadership in this high-growing cross-category segment, which involves beer, wine, and spirits in a context of soft industries. Regarding brand equity, we recorded a solid performance in Chile, increasing brand equity levels, being key to expand overall market share. Finally, as of sustainability in our Juntos por un Mejor Vivir strategy within the planet pillar, we kept reducing industrial water consumption. Regarding the pillar of our strategy, and in the years that we celebrated, 175 years of history, we reached important milestones. We obtained a high level of employee satisfaction, got certified in Chile and Argentina as a top employer by the top employer institute, moved up in CADEM ranking of citizen brands, and got awarded as one of the companies with governance by the survey La Voz del Mercado 2025. From a marketing perspective, consolidated bonds rose 0.6% fully driven by the Chile operating sector. Our financial results were below last year, mostly explained by the challenging business scenario in Argentina, together with the high competition base in Edista in that country, and headwinds in the wine operating segment. This was partially compensated by our main operating segment, Chile, which continued in a positive path of results. Consolidated Evita contracted 17.2%, where the 6% expansion in the Chile operating segment was more than offset by the 44.5% and 45.2% Evita contraction in the international business and wine operating segment respectively. Net income contracted 25.7%. Consolidated ISTA isolating Argentina would have expanded low-sitter digits in the quarter. In terms of our segment performance, in quarter 4, 2025, the Chile operating segment top line expanded 5.5% as a result of 4.1% increase in volumes and 1.3% higher average prices. Volumes were boosted by non-alcoholic categories. Average prices were driven by revenue management efforts, offset by negative mix-up rates. EBITDA increased 6% mostly due to a 9.1% gross profit expansion, partially offset by 10.1% higher MSM-DNA expenses. Regarding those profits, the rise was driven by higher volumes, lower cost pressures related to federal prices in some raw materials, with the exception of a mean, and the appreciation of the Chilean peso against the US dollar, which is positive on U.S. partially compensated by higher costs from our TP recycling plant circular. On the other side, MS&D&A expenses funded mostly associated with higher distribution expenses as volume new and larger marketing expenses to support running. In international business operating segment, net sales recorded a 36.3% decrease mostly driven by lower average prices and a 4.6 percent volume contraction highly driven by a single digit contraction in the beer industry in Argentina the decrease in average prices in Chilean pesos was driven by Argentina impacted by a negative translation effect pricing below inflation through the year and negative mix effect The laser was partially compensated by efficiency. In all, Avista dropped 44.5%. The wine operating segment posted a top line contraction of 16.8%, driven by 9.7% drop in volumes, together with 7.9% decrease in average price. Lower scale was driven by both exports and domestic markets. The weaker average prices were mostly explained by stronger Chilean pesos and its negative impact on export revenues and negative mixed effects in the portfolio partially compensated with revenue management initiatives. Evista contracted 45.2% also impacted by higher cost of wine. Regarding our main joint venture and association business in Colombia, volumes reached 2.4 million ecoliters in 2025, increasing 6.1%. We continue to build a robust brand portfolio and sales execution in Colombia, which is the path to long-term volume and financial growth. Now, I will be glad to answer any questions you may have.

Thank you very much. We'll now move to the Q&A part of the call. If you'd like to ask a question, please press star 2 on your phone. That is star 2 if you're connected from the phone. If you're connected from the web, you can type your question in the box provided or also request to ask a voice question. We'll give it a few moments for the questions to come in. Okay, so our first question is from Fernando Olvera from Bank of America. Your line is now open. Please go ahead.

Hi. Hello, guys. Thanks for taking my question. The first one, it's regarding the volume growth seen in Chile this quarter. If you can comment if this was favored by the alliance with Nestlé highlighted in the press release. And some additional questions are if you can share what was the performance of beer during the quarter, you know, and also how these low alcohol products that you have mentioned will favor volume performance in 2026. Thank you.

Thank you, Fernando. Yes, thank you Fernando for your question. Yes, we have a robust growth in Chile, growing 4.1% driven as we highlighted by the non-alcoholic category. However, our spirits unit grew a mid-single digit thanks to a very good performance on on all the low alcohol ready to drink flavored products of that category. And so it was a very good quarter where we do overall market share in the quarter. So, and this drove a good growth in the overall sector. Regarding beer, the quarter, we experienced flat volumes against the same quarter of 2024. And seasonally adjusted was a bigger quarter than quarter three, let's say, seasonally adjusted. So experiencing seasonally adjusted growth, the VFK test. You are asking more of an old question regarding alcohol consumption. Per capita alcohol consumption decrease something like 4%. We are still calculating because it depends on the population estimates. So, but overall decrease 4%. Regarding specifically In the year, we come back to 2019 per capita consumption. But following, as we highlighted, consumer trends, we are delighted of the growth that we are experiencing in all our low-alcohol, ready-to-drink beverage products portfolio, which grew 20. It's growing on the 20, more than 20%. and reaching in the Chile operating segment practically 7% of the mix. And this encompasses proposition on beer as mixers. We are very satisfied of the growth we are experiencing in the stone brand and all its different flavors. And also in the spirits where all the low alcohol ready to drink flavor products are growing practically 25%. So the consumer is moving towards these products and fortunately we have a high innovation rate on that specific category and where CCU has more than 80% of market share of the overall product.

This is Fernando Hovey. I have answered your question. Great. Yes. Thank you, Felipe. Have a great day.

Thank you. Our next question is from Felipe Ucros from Scotiabank. Your line is now open. Please go ahead.

Thanks, operator. Hola, Felipe, Claudio, and team. Thanks for the space. A couple of questions on my side, one a little more short-term and the other one a little more long-term in nature. So the first one on SG&A and QA, you've been generally posting improvements in your SG&A to sales ratio over the last couple of years. So I was a bit surprised to see you backtrack this quarter as G&A grew a little bit faster than sales. And you did mention in the release that it came partly from investments in marketing. So can you comment on this and whether you expect to continue this investment at a higher level? And also, if you could talk to us a little bit about where that investment's going. Perhaps it's just... you know, additional spending to give some impulse to the RTD category that is new for you, or perhaps it's something you're having to do in beer, you know, to keep it at neutral volumes. And then the second question, a little bit longer term, it has to do with the fact that beer has been lagging non-alcoholic beverages for quite some time at this point, right? And there's probably more than one thing at play here. So just wondering if you can comment about the different rates of volume growth that you expect there. You know, in a tough environment, it's expected that beer would underperform. because it's more discretional, but there's also this structural migration from consumers away from alcoholic beverages. So just wondering if you can comment on the difference between those two factors and how it's impacting you looking ahead. Thank you.

Thank you for your question. Regarding marketing investment was mainly a demand idea. Also we had a low comparison base in quarter four. So it was a temporary more investment in quarter four 2025 compared to quarter four 2024. And essentially went to support our premium portfolio. So I think this is to build, you know, a stronger premium portfolio, because at the same time, price growth in India was in the quarter in line with inflation, which is very good, a little bit above inflation. So it's a different combination on the P&L, but nothing to worry about. Regarding your question more on the long term, we think in the future our winning non-alcoholic portfolio will continue to grow with especially the water business in both pure plain water. We had a tremendous success on Katz & Thun strong gas Also, we continue to grow at a high rate on our flame rate, our enhanced water portfolio with the planned mass. So all of this is dreaming, is driving the growth on that should grow in line with private consumption in our view. and especially the categories where we eat. Regarding alcohol, the situation as I mentioned in the previous question, in beer specifically we come back to the per capita consumption in 2025 that we had in 2019. But bear in mind that 12 years ago per capita consumption in Chile in 2014 was 44 liters per capita. In 2019, 52, and in 25, 52. So I think overall this category, we cannot forecast the future, but should stabilize the overall beer category around zero to 1% growth. and would be driven by the low alcohol beer propositions. We recently launched in January, with great success, Crystal Ultra. But also, we lead, specifically, the low alcohol ready to drink portfolio of flavored products, or mixers, which I mentioned we've been growing a lot. would certainly sustain growth in the near future. But again, we have heard projections, but we are following consumer closely, all the consumer trends. That's the answer.

Thanks so much. If I could do a quick follow-up on the first one. Do you expect this higher marketing spend? I know there was a comparison base, but should we expect it to grow at more historical levels going forward, or do you expect a higher marketing spend going forward?

No. The marketing rate would be the same.

Understood.

Thank you very much. Our next question is from Guilherme Aguiarria from Apple Capital. What is your pricing strategy in Chile going into 2026 for alcoholic and for non-alcoholic beverages? To what extent do you plan to raise prices or do you plan to take advantage of lower cost pressure to be more aggressive in gaining share?

Hello, Guilherme. Overall, the company, historically, is aiming to grow prices in line with inflation. As in the last years, you know, our input cost inflation was much higher than inflation. We have some lag in terms of recovery, profitability that we've had in the past. Here we have this lag. So overall, our aim is to take every revenue management initiative. But this could be by rising prices, which is the less sophisticated answer to your question in terms of pricing, but also launching higher margin innovation. In fact, the portfolio that is growing, the low alcohol related to green favorite products are premium in the case of beer compared to the mainstream beer. So you could increase prices or you're ready in different ways. But the bottom line, the aim is not gaining share to pricing or promotions. more sustaining the market chain in the long term through brand equity and marketing investments and high-quality products rather than try to gain share with aggressive promotions. So the aim is to increase prices. But always you have a market, you have competition, but the aim is to increase prices in line with

Thank you. Our next question is from Constanza Gonzalez from Quest Capital. Your line is now open. Please go ahead.

Good afternoon, Felipe and Tim. Thank you for the presentation. I have two questions. The first one regarding the environment in Argentina. Could you give us more details about the trend in consumption that you are expecting for this year? some recovery in the volumes. And secondly, I would like to ask you about the CAPEX for this year. Thank you.

Thank you, Constanza, for the question of how you are doing now. Yeah, regarding Argentina, the alcoholic industry was very soft. I would say the climbing industry we had in the year. That affected specifically also beer. Wine was more dramatic, but in beer we have a different industry. The thing is that towards the end of the year, we saw some gradual improvement. During the quarter, We had a terrible November in terms of weather because every weekend we have rain. So with rain, you don't do barbecues, you don't drink beer. So at the end, we had this terrible November. Despite this terrible November, seasonally adjusted, volumes in quarter four compared to quarter three improved 4%. This is what sustained my statement that we saw a gradual improvement. We don't know, we don't have a plan if we exclude the weather we had in November, because maybe this would be an improvement of high signal density. She's doing the adjustment. Today, we are seeing, let's say, a gradual recovery in terms of volume and . It was the question, no, the second question. Constanza, could you repeat the second question because I had a sound problem here.

Sure. I asked you about the capex that you are expecting for this year.

Regarding capex, we will be investing in depreciation, no more than depreciation.

Thank you, Felipe.

Thank you.

Our next question is from Aldo Morales from Vice Inversiones. Can you please explain if this negative inflection point in Argentina in ARS is seen to continue over the next quarters? Also, can you please explain how persistent could be this negative pricing scenario in wine via SPT?

Aldo, nice to hear about you. So, Aldo, yeah, 2025, in a broader perspective, in 2023, our prices, our beer prices in Argentina were above inflation. In 2024, slightly above inflation. We saw big numbers. And in 2025, we were below inflation. So 2025 in terms of price was not a good year for beer in Argentina. Although, looking at the future, we have increased prices in December, effective in January. So this would lead some improvement in profitability in the near future, along with the gradual improvement I mentioned that we saw towards the end of last month. Regarding the other question, regarding wine, this is due to mixed effects, mainly in exports. As in the domestic market, we increase prices above inflation. So it was mostly due at export prices and was due to mixed effects.

Thank you. Our next question is from Thiago Bortolussi from Goldman Sachs. Your line is now open. Please go ahead.

Yes. Hey, guys. Good morning, everyone. Thanks, Felipe, for the presentation and for the questions. I would just like to move back the discussion on price in Chile, right? During your remarks, you mentioned that, you know, essentially beer prices are growing with inflation. Your headline prices are growing a bit below inflation, which suggests all else equal that your price mix for non-alcoholic is negative, right? Obviously, there are a lot of moving parts here. I would just like to understand how much of this is mixed, how much of this is like for like. And more importantly, particularly for a non-alcoholic, what's the strategy going forward?

Thank you very much. Yeah, overall prices, the year 2017 increased prices by 3.5% in the year. Price effect was something like 4.3%. and mix effect something like 0.8%. That was the impact of mix leading for now. In the last quarter, we have more mix effect due as I said, accelerated water sales during the quarter. The very statistically non-alcoholic, as I mentioned, the pricing and strategy would be to at least increase prices in line with inflation.

Thank you. Thank you. Our next question is from Martin Zech from Fundamenta Capital. How should we think about margins in Chile finishing in 2026 given the favorable levels for Chilean pesos?

Martín, I will not provide a specific number for margin in Chile 2026. This is forward-looking. But as you mentioned in question, we are facing favorable effects in Chile, which would certainly impact positively our raw material. And this would come more in effect in quarter one of this year. because we carry out some inventory of a specific raw material such as mold. This is why you didn't see at the full extent the benefits of having a lower exchange rate in Chile. However, there are also some signals in some raw materials, specifically aluminum, where we are seeing very high prices. about $3,000 per tonne of aluminium comparable of what we saw in 2022. So that's a bit of concern, but it should be more than compensated by exchange rate, as you pointed out. So taking into account this, we should be seeing a favourable EBITDA margin, positive EBITDA margin But again, this is based on assumptions that could change during the year.

Thank you. Our next question is from Alvaro Garcia from BTG. Your line is now open. Please go ahead.

Hey, Felipe. I was wondering if you could maybe comment on the non-alcoholic front in Chile on the performance of Pepsi Max, maybe how it's positioned relative to Coke Zero or to other competitors in Chile. So maybe specific commentary on maybe some of the better performing products in Chile would be helpful. Thank you.

we do not have Pepsi much. It's a highlight, Pepsi Zero. It's doing very well. Tremendous success in Chile. In fact, the carburetors of green category grew in the last quarter, low CUDs, which for this category of green Chile, high consumption level of CSD is a very good growth in Chile. And of course, Pepsi has been increasing brand equity and market share in the last years. So overall, What is really driven in the category are the water business, especially enhanced water products are growing double digit during the quarter. And other products such as, you know, ready to specifically functional things growing

Okay, thank you. Next question is from Nicole Helm from MetLife Investment. Can you elaborate on your financial policy going forward in terms of net leverage and capital allocation? S&P has maintained the company on negative outlook for some time. Do you expect to preserve the current rating and are there any specific measures you're taking for this?

Thank you Nicole for your question. If I understood well, you are asking about net financial debt and EBITDA ratio. The aim is to maintain the notch that we are having with the risk analysis. So it's something below a ratio of two. Today we are finishing with two, in terms of net financial debt to EBITDA, is to maintain or even decrease if the business do better. But we don't have a specifically policy on that, but however, the aim is to maintain the specific notch that we have within the risk Thank you.

We'll now move on to our final question from Santiago Petri from Franklin Templeton. Hello, thanks for the presentation. Could you guide us on your raw material costs expectations for 2026? What impact would that have on your margins?

Yeah, Santiago, yes. Specifically, we answered the question more for Chile, starting by the, what has been positive today, as we mentioned in previous questions, is the appreciation of the Chilean pesos. We have some sensitivity on that, that each 1% appreciation is something about to 4,000 million pesos. of better results at the consolidated basis because also considering the offset we would have in the export revenues we have in the main business. So it's positive on that, but I will not predict, of course, the exchange rate scenario. But if this is maintained, we are talking about a significant amount of money, as last year the average rate was 953 and this year now the spot is 960, so we are talking about 10%, so it's a significant amount of money. But this, as always, is being compensated by higher aluminium prices that we are suffering, and higher PET recycling prices. As you know, we have a law in Chile where 50% of the plastic bottles should have local recycling PET and prices on that are the higher in Latin America. So to answer your question, we are seeing Overall, a positive scenario on input cost thanks to exchange rates.

Thank you. We would like to thank everyone for the participation today. I will now hand it to the CCU team for the closing remarks.

Okay, thank you. Thank you all for attending today. To conclude, in 2025, in the context of soft industries, we posted soft performance in our main operating segment, Chile, recovering volume growth after three years of volume contraction, and expanded the digital and digital market. However, consolidated results were weaker due to a difficult macroeconomic scenario in Argentina together with the contraction in the beer industry in this country and strong headwind in the wine business. We look to the future with optimism as CCU's core strength remains solid. Our focus will be on continually developing our 2025-2027 strategic plan, reinforcing our three strategic pillars, profitability, growth, and sustainability. with a special focus on profitability through revenue management efforts and efficiency and high-margin innovation growth. Finally, I would like to extend my gratitude to all our more than 10,000 employees in a special year for our company, as we celebrated our 175th anniversary. Their dedication and commitment with the CCCU principles excelencia, entrega, integridad y empoderamiento have been key to navigate challenging times.

We'll continue to work to ensure... A quick follow-up on the first one. Do you expect this higher marketing spend? I know there was a comparison base, but should we expect it to grow at more historical levels going forward, or do you expect