Compania Cervecerias Unidas, S.A.

Good day, everyone, and welcome to CCU's second quarter of 2026, the earnings conference call on August 5, 2026. Please note that today's call is being recorded. After this time, at this time, I would like to turn the conference call to Claudio Alaceras, the head of event relations. Please go ahead, sir.

Welcome. And thank you for attending CCU's second quarter 2026 conference call. Today with me are Mr. Eduardo French-David, chief executive officer, Mr. Felipe Duvernet, chief financial officer, and Mr. Diego Munizar, financial planning and investor relations manager. You have received a copy of the company's consolidated second quarter 2026 earnings reading. As usual, the call will start by reviewing our overall results and then we will move on to a question and answer session. Before we begin, please take note of the following statements. The statements made in this call that relate to CCU's future financial results and forward-looking statements, which involve known and unknown risks and uncertainties that could costs our actual performance or results to materially differ. This statement should be taken in conjunction with the additional information about risks and uncertainties set forth in CCU's annual report submitted to the CMF and in our Form 20F filed with the U.S. Security and Exchange Commission, both documents available on our website. It is now my pleasure to introduce Our CEO, Mr. Eduardo French States.

Thank you very much, Claudio, and thank you all for joining us today. It is my pleasure to share with you our second-party 26 financial results. For the first time, a CEO of CCU, a company in which I have worked for more than 20 years, and I am proud to live at a time that we need to look to the future with the strength and Conviction that has always characterized us as we face a particularly challenging context. Nonetheless, we have always shown a longstanding track record of adaptability and for sure execution. Therefore, to continue successfully shaping our future, I would like to mention some relevant changes that we have defined. We have designed the strategy Vamos For Más, which is built on our four main pillars. First, the first pillar, increase our focus on businesses. The second one, boost operational synergies. The third one, act with greater agility. And fourth one, accelerate our transformation. These pillars are oriented to generate growth and to respond to the new demands and challenges of the market. To support this strategy, we will execute changes in our organizational structure as well as strengthening our internal processes and capabilities to remain at the cutting edge of new trends while enhancing our technological transformation.

This transition will be implemented gradually throughout this year with our main focus being to ensure operational continuity and for sure performance.

I am confident in the commitment that has always characterized all the CCU employees, and together we will prepare CCU to successfully navigate current and future challenges. Regarding our second quarter performance, CCU delivered a solid 59.4% consolidated EBDA expansion, mostly driven by a robust set of results in our main operating segment, Chile, which expanded EBDA 26.2%. The international business operating segment also contributed to a higher EBDA by posting a 25.8% lower EBITDA loss, as we continue facing a sub-consumption environment in Argentina. On the other hand, the wine operating segments contracted EBITDA by 61.9%, sharply impacted by unfavorable trends for the wine category globally and a higher cost of wine. I will now pass the call to our CFO, Felipe Duarne, who will give you further details about our performance by operating segment during this quarter.

Felipe. Thank you, Eduardo, and good morning, everybody. Consolidated net sales grew 4.8%, almost fully explained by 6.4% higher average prices in CLP, as volume declined 1.5%. Higher prices in Chilean pesos were mostly a consequence of revenue management initiatives in all our operating segments. And in terms of volumes, the 2.5% increase in the Chile operating segment was offset by decreases of 7.4% and 13.7% in international business and wine operating segments, respectively. Gross profit. grew 6.8%, a gross margin improved 76 basis points. MS&D&A expenses rose 3.3% due to higher distribution expenses associated with higher oil prices during the water, and restructuring expenses in Argentina and in the wine operating sector. This was partially offset through ongoing efficiency initiatives, mainly in logistics, The percentage of net sales and S&D&A expenses decreased 62 basis points. In all, EBITDA grew 59.4%. Regarding net income, we recorded a higher loss from the second quarter of 2025, mostly due to a non-recurring negative effect of 6,068 million Chilean pesos from an impairment loss related to our business in Bolivia and lower income taxes in second quarter of 2025, coming from a non-recurring positive tax effect in Argentina. In terms of our segment, the Chile operating segment expanded top line by 1.5%, explained by 2.5% higher volumes, gaining overall market share versus same quarter of last year, partially offset by 1% decrease in average prices in Chilean vegetables. During the quarter, the non-alcoholic categories grew mid-single digits, outweighing the low single-digit decline in alcoholic categories, which encompasses beer and spirits. Flavored, low-alcohol, ready-to-drink products, led by brands such as Stones in beer, Mistralize and Cantal in spirits, continue to show excellent results. with volume growing double digits in the quarter and representing 8.3% of total alcohol in this segment as of June 2026. Average prices contracted due to mis-effect in the portfolio, partially offset by revenue-managing initiatives in all categories. Gross profit increased 9.4%, mainly driven by lower direct costs, mostly coming from the 5% appreciation of the Chilean pesos against the U.S. dollar, impacting favorably our U.S. dollar denominated costs, partially offset by higher aluminum prices. MS&DNA expenses grew 3.5% below inflation, although asset purchase development sales increased 71 basis points due to expenses pressures coming from higher distribution costs, partially offset by efficiency. Altogether, EBITDA recorded a 26.2% increase and EBITDA margin expanded 264 basis points. I would like to mention that during the quarter, CCU acquired a 49% equity interest that Nestlé Chile held in our subsidiary Agua Seseú Nestlé. After this acquisition, TCU reached 100% ownership of Indices Subsidarios, allowing us to further consolidate our leadership in a steadily growing water industry in Chile, which is expanding low double digits as of June 2026. Following this transaction, we will maintain our strategic relationship with Nestlé, continuing the distribution of the ready-to-drink coffee-based beverage products and water brands in Chile. In the international business operating segment, net sales increased 15.7%, driven by 24.9% higher average prices in Chilean pesos, partially offset by a 7.4% contraction in volumes. Higher average prices in Chilean pesos was due to revenue management initiatives, mainly with price actions in Argentina in line with inflation. Volumes in these segments were below last year, mainly explained by Argentina, due to a high city digit contraction in gear and water industries, and a difficult business scenario in Bolivia, marked by social unrest and roadblocks that disrupted our operations. Gross profit increased 20.8%. MSME expenses grew 7.6% as a percentage of net sales decreased 460 basis points. Evita resulted in a 25.8% lower loss versus second quarter 2025. During the quarter, we incurred in restructuring expenses in Argentina by 1,408 million Chilean pesos. The wine operating segment posted a top line drop of 14.1%, mostly driven by the 13.7% decrease in volumes as average prices contracted 0.5%. Lower volumes were driven by industry contraction in export and domestic market in Chile. The decline in average prices were lowered due to a negative mixed effect in the portfolio and stronger Chilean peso against the U.S. dollar, which impacted negatively export revenues. These effects were partially offset by revenue management initiatives. Gross profit fell 26.9%, mostly due to cost pressures from a higher cost of wine, partially offset by efficiencies in manufacturing. MS and DNA expenses dropped 3.7%, mostly due to the lower business scale. Altogether, EBITDA decreased 61.9%. During the quarter, we incurred in restructuring expenses amounting $1,600 and 33 million Chilean pesos. To navigate the difficult scenario in the wine business, we will continue pursuing efficiencies and keep developing a strategy of accelerating high-margin innovation. In this regard, as of June 2026, flavored low-alcohol ready-to-drink products based on wine almost doubled versus last year, mostly driven by the launch of the single-serve Versión of our brand Gato Selección Dulce, among other brands, backed by our multi-category production capabilities. Regarding our major venture and associated business in Colombia, we posted meetings for growth during the quarter. We are focused on that country on building brand equity and scale to enhance profitable growth in the future. Now we will be glad to answer any question you may have.

Thank you, so we will now move to the question and answer section. If you'd like to ask a question, please press the star 2 on your phone and wait to be prompted. If you are dietying by the web, you can type your question in the box provided or request to ask a voice question. Question comes from Alejandro Fuchs from Itaú BBA. Your line is open. Please go ahead.

Thank you, operator. Thank you for the space for questions. I have two very quick ones, if I may. The first one I wanted to see if maybe you could elaborate a little bit on how you see the competitive environment in Chile, especially on the soft drink market, anything that has changed in the last couple of months, and maybe how do you see the rest of the year? And then the second one, in terms of alcoholic, especially beer in Argentina, We saw volumes continue to be pressured despite the sporting events this quarter. So I wanted to see if you could break down for us what do you expect for the rest of the year and if there was a positive impact or not given the sporting event in the country. Thank you. Thank you.

Thank you, Alejandro. I will take the first question from Chile. Thank you for both questions. In terms of competitive environment in Chile, especially in the soft drinks, always this is a very mature category, compiled by different segments. Actually, we operate nine segments within that macro category, and it has always been very competitive. But we believe that the trends will continue. All the better-for-you products, all the healthy products such as waters, flavor waters, juices, functional products are growing, and we will see that they are continuing growing. We have a strong position in terms of market systems in those categories, and we will invest in those categories in order to get more innovations and to push the mix on those categories. Within the CSD categories, we are doing a great job with Pepsi within the cola segment, and we have strong brands in the flavor subsegment as well. But we believe that the soft drinks will continue growing mainly through Better For You products, which we believe that we have a very, very strong position. The second question, the beer in Argentina, I will pass that question to Felipe now.

Hello, Alejandro. Yeah, the second quarter, as you noticed, we decreased our, the beer industry contraction was high single digit. However, we are comparing a particularly, let's say, high companies on base in the second quarter of last year. Maybe you know in quarter three volume collapsed, as this is in line with a significant rise in interest rates in Argentina, unemployment, due to all the macroeconomic adjustments that were done in Argentina last year. So, we should look or see a recovery in volumes in the second half of 2026. One, because of the companies on base, on the one hand, But also what we are seeing now is a continuous improvement in volume trends in Argentina since March. If we seasonally adjust the volumes in Argentina, we are seeing a recovery month on month since March. A more stable macroeconomic scenario in terms of inflation and devaluation in Argentina, yet has not translated to a more dynamic consumption environment. However, you know, everything is volatile and this is a forward looking that I cannot ensure to you. We should see a more robust consumption environment towards the end of the year. As we have seen, let's say some good signs in March in terms of improvement of Thank you, Alejandro.

That was super clear. Thank you, Eduardo and Felipe.

Thank you very much. Our next question comes from Fernando Alvira from Bank of America. Your line is open. Please go ahead.

Hi, good morning. Thanks for taking my questions and congratulations, Eduardo, for the appointment. My first question is related to the strategic plan that you mentioned in your initial remarks. Maybe if you can give some color of what are some of the targets that you are planning to achieve with this new strategic plan in the medium term, that would be great. And my second question is related to Chile. How do you expect consumption to behave in the remaining of the year, and maybe if you could share some initial thoughts about 2027 considering the mega reform approved by the government.

Thank you.

Hi, Fernando. Thank you.

Hi, Fernando. Thank you for your message and of course for your questions. I am very optimistic for the future. So I will ask you both questions. The first one around the new strategy, for sure this new strategy will be part of our new strategic plan. We are going to create a new strategic plan based on two main things. The first one is going to be a four year plan looking forward to the 2030 and setting some KPIs for that year. And the second thing is we are going to interrupt the current strategic plan to create a new one. And this new strategic plan is based on the estrategia, vamos por más, that I talk on the beginning of this presentation. This estrategia is based basically in four main pillars. And I will explain a little bit more further on these pillars. The first one is to focus on businesses. which does not mean that we haven't had focus on business, but we will strengthen our focus in our businesses, separating or differentiating our core businesses with our high potential businesses. We are going to go deep in our multi-category strategy with focus on each single category, leading distinct consumption occasions and growing volume and margin across all our operations. We are going to be very focused on consumer occasions, And to go deeper in those occasions and satisfy consumers in different places, times, with our multi-category portfolio, which is something that we really believe that is very strong. The second one is operational synergies. We will reach greater productivity and efficiencies leveraging our multi-category strengths and the reduction of redundancies. We are looking for the whole company. We have done a first single act like synergy in wines and liquors, especially in the domestic Chilean market. But we have several more things to come in order to get more synergies, leveraging our multi-category spirit and vocation. The third one is agility. We will implement a greater autonomy to respond to the market. We are living in a very volatile market with accelerated changes, and we want to be more agile in order to respond to those changes. Less operational friction, we have called , or , and a real-time control in our operations with linear and more connected structures. And the fourth one is transformation. We have been very, we are doing some transformation, especially with digital tools in sales, for example, with Cuspide in our logistic and planning, integrating new tools, people, tools, structures, and processes, and then industrial in our facilities as well. But we will go deep on that with an architecture based on new processes and technologies, putting the digital transformation as the number one enabler of synergies and mainly growth. So that is answering your first question, Fernando. Obviously, more is coming on our SDG plan, and for sure I cannot say it anymore, but this is the main mindset that we are creating in order to have a new strategic plan focused on profitable growth based on our main capabilities. The second question is about the per capita consumption or volumes trends in Chile. Of course, we received the IMASEC yesterday, actually, and it was a good thing. But obviously, we cannot say that we are, as a country, we are ready to go as we have done in the past. But we still believe that our categories are facing a new trend. For sure, we cannot avoid the downtrend rate that we are facing with alcohol. But we believe that our categories with innovation and with certain things we can turn around that situation. The wine situation is basically, it's a global one, but we have seen some early stages of early green, how do you say this, green grass with, for example, Bliss is ready to bring products We launched our new wines ready-to-drink approach, I don't know, one month ago, and it has been very, very successful. So we believe that we can turn around this alcohol down trade in the domestic market. And on the non-alcoholic business, as I mentioned before, we see that our portfolio, Better For You portfolio, based on waters, flavored waters, Juices and Nectars and Functional. We are number one in all of those categories. We believe that we'll continue growing, integrating new consumer occasions and satisfying consumer needs that are eager for more alternatives and not only based on CSDs. So we believe that in terms of per capita consumption will be a second semester in order to see how the economy is turning turning around in a positive way. But we believe that our portfolio is prepared to turn around the issues that we face on the first semester.

Let me complement what Eduardo has said regarding tax reform. I think it's good news for the country, the approval of the new tax result reducing corporate taxes in Chile. When will this come to more consumption is something that we cannot predict. But however, in the long term, it's good news for the country to boost investment in the country, to boost employment. Of course, this could boost the consumption for our products. But as you know, there are many variables or many other inputs that are key for the level of consumption. Okay, Fernando, thank you.

Okay. Thank you both for the answer.

Thank you so much. Our next question comes from Felipe Ucross from Scotiabank. Your line is open. Please go ahead.

Thanks, operator, and good afternoon, Eduardo, Felipe, and team. Thanks for the space. Eduardo, well, congrats on the new role. Great to meet you. Perhaps a few follow-ups on the new strategy and the upcoming midterm plan that you're still working on. And I realize that you're still working on the plans. It's probably a little too early to have definitive answers on this, but perhaps you can give us some initial thoughts on three things that I'm curious about. The first one is hedging. CCU has stood out within the publicly traded industry as one of the only companies that doesn't hedge, right? And there's some chatter in the market that this generates different pricing needs than your competitors. So just wondering if within your strategy, there are any changes that you plan to make around this or perhaps bring to the board for potential changes? The second side is wine. Obviously, it seems like you're already doing some restructuring there and you're innovating quite a bit, but wondering if there's like a bigger transformation around the approach and the strategy that you guys have had towards the wine segment. Perhaps whether you'll try to accelerate premiumization or any other things that you plan to change there. And then the last one is for Colombia, where you guys have had A decent performance this quarter. Just wondering if there are any changes that you plan on that side of the business.

Thank you.

Hi, Felipe. Thank you for your question. Three main questions. I will pass the first one to Felipe Duvernay, and the second one and third one I'm going to respond directly.

Hello, Felipe. How are you? No, our policy regarding hedging of commodities for exchange rate remains unchanged. This is a policy that is renewed every year by the board of CCU, but as of today remains unchanged. So now, Eduardo will answer you the question regarding the two important businesses, wine and Colombia.

Yeah, regarding wine, for sure, we are facing an important trend globally. We are an important player in Chile, for sure. But at the same time, we are an important player outside in the export. So we are doing, I think, two main things. The third one is not only integrating liquors, which we have an important ammunition or power in Chile with the wines in order to get synergies, but also we are doing this in order to fulfill consumer needs that we believe that are coming together. Today, the consumer is not only choosing product by product, it's choosing based on consumer occasions. And we believe that, together in Chile, with a portfolio combining wines and spirits, we can satisfy better to our consumer and, for sure, increase volumes due to that strategy. In terms of global exports, we are focusing our main capabilities on BSPT on exports. increase our footprint outside, getting more markets within the company, and basically strengthen our position in terms of production, getting synergies and efficiencies from there. So we believe that wine could, we are adjusting some pieces, for sure we are facing a very important global trend, but we believe that we can start turning around that situation with this strategy. For sure, we have to see how it's evolved, but we are taking decisions around that business now. In Colombia, we still believe that we have a very, very important or plenty of space to grow over there. Colombia is an interesting country. It's facing a change in its government now. For sure, we are living a very, very good momentum in Colombia. We are double-digit growth with Beer and Malta over there. And we have plenty of innovation and a new strategy setting up to Colombia in order to get more of this country. Colombia, for us, in this strategy, Vamos por Más, is a core country for us. We are there to grow, and we are there to win some battles. So we are going to strengthen our position in Colombia, and we believe that we can create momentum, or continue the momentum that we are facing on that latitude.

Great for that caller. Maybe if I can do one follow-up on the cost decline, less strategic. You did mention that the cost of wine had increased, and I thought that kind of stood out in stark contrast to what Conchitoto reported, where they're having much lower cost of wine and a very strong harvest. So just wondering why you think there's a difference. Perhaps it has to do with the regions, different climate and different regions, maybe what the suppliers of grapes that you guys use. Just wondering if you can comment a little about that differential. Thank you.

I pass this question to Felipe. Thank you, Felipe, for the follow-up question.

I pass this to Felipe Duvernay.

Okay, yes, Felipe. Regarding the wine cost, as you know, this year we are facing a particularly unfavorable input cost in terms of wine cost in our P&L, as the whole industry. As you mentioned, and as you mentioned the competitor also, We have had a positive wine harvest this year that will reduce going forward our cost of wine as we reduce, of course, inventory levels that are depending on how we evolve in the volumes. So we see in a business that is suffering a lot, not only in consumption, but also in the input cost side, in the exchange rate side for our export business, this year a lot. So At least we are seeing some green grass in the horizon now with the input cost of wine going forward. But as I said, it will depend on how we deplete our inventories going forward.

Very clear. Thanks for that, Cor.

Thank you very much.

Our next question comes from Thiago Bertolucci from Goldman Sachs. Your line is open. Please go ahead.

Yes. Thank you very much, operator. Good afternoon, everyone. First of all, congrats on the new role. Wishing you the best of luck and wishing to continue the conversation with you. Thank you for the opportunity to ask questions. And I think my very only one question is for you, Eduardo. Once you take the CEO role and evaluate the situation in Chile more broadly, how satisfied would you say you are with the price points and price sensitivities, price relativities, in each of the categories in Chile, and do you think there is any particular segment that needs a more focused, targeted shift or a strategic pivot in the next six months? And related to this, how should inflation and oil prices particularly impact your pricing decisions, particularly for the second half of the year? I know you have already implemented a price adjustment. How much of your underlying cost inflation is covered with this?

Thank you very much.

Hi, Thiago. Thank you for your message and for your questions. Well, as you see in the presentation, we have very strong results in Chile, Chile mainly through the different categories, from the two categories, keeping our momentum in market share with the beer category and improving our prices, and the excellent development of non-alcoholic Business, improving our market shares and improving our prices, we are facing a very good position regarding the second semester. In that terms, obviously there are always opportunities in terms of pricing. Consumers are less willing now to take lease prices, increase on lease prices as we have done in several companies have done in the past. So new technologies and new strategies we have to put in place. So in our new strategy, revenue growth management has an important role in our strategy. Obviously, Revenue Growth 120 is a huge area that we can go deep dive, but there are several initiatives, like for example, let me put an example, the TPO initiatives, trade promotion optimization within the modern trade, and several, and use of algorithms. We have a proprietary algorithm called SEUS, which is helping us, our revenue growth 120 in traditional trade that we have, we can help us to drive price without hitting the consumers and hitting all the places and SKUs at the same time. So technology, processes, and intelligence based on algorithms will help us to improve our mix, not only driven by prices, but also driven by channel and format or pack types mixes. I am confident that we have done a very good job on prices within the first semester. We will continue with new tools, doing a great job on the second one.

This is helpful. Thank you very much.

Thank you very much. Our next question comes from Álvaro Garcia from BCG Petro. Your line is open. Please go ahead.

Mr. Alvaro, your line is open. Please go ahead.

Can you hear me?

Yes, we can.

Okay, sorry about that. Hi, Eduardo, Felipe. Eduardo, congrats on the new role. I have a question on the Nestlé transaction, the water transaction in Chile. One, I mean, it's a pretty hefty transaction from a financial standpoint. So I'm wondering if that – how you're thinking about sort of leverage heading into 2027, how you're thinking about the dividends into 2027. So that's one aspect of the question. But the other is sort of whether it changes the operating model for that business specifically. I'm guessing the answer is no, but maybe on brands, maybe does like 100 percent ownership, does that give you more flexibility on brand strategy and water specifically? So if you could speak to any specific changes on the back of that transaction.

Thank you.

Hi, Alvaro. Thank you for your message. Let me answer it with the strategy. As you know, the water business is growing a lot. And within the water business, we have different kind of products. We have mineral waters, which satisfy certain part of the consumers, purified waters, which compete directly with tap water, actually, and flavored waters. Our strategy remains the same, but with this acquisition, we are going to strengthen certain part of that strategy. We will continue creating momentum with Cachantún as our number one mineral water within the country. As you may notice, we have launched several innovations with Cachantún, the strongest Cachantún, the black one. It has been a very, very successful. Not only competing against water business, but also getting momentum and getting consumer occasions from CSDs, which is something that is very interesting in terms of the water penetration. So we will continue with that. Regarding the flavor water, you have seen that flavors are growing, different SKU are growing, different pack types or PPA strategies are getting momentum as well. We have launched several innovations, especially with gas, and they are creating, again, an important growth coming from different categories and not only coming from the water category. And finally, Purify Water. Purify Water, we have been – we switched our strategy from Nestlé Pura Vida, Nestlé Pure Life, which was a licensed seed coming from Nestlé, to our Manantial brand. And Manantial has done a very, very great job. Now we are incrementing our market share in a sustainable manner and with strong numbers against our competitors, and at the same time taking volumes from tap water, which is, in Chile at least, is a huge, huge undercover market. So we believe that with this acquisition, we will make more agile our decisions around the water business, and we will on growth. And regarding leverage questions, I will pass the question to Félix Dulberne.

Hello, how are you, Alvaro? Yeah, the leverage, as you know, this increase from 1.7 last quarter to 2.4 this quarter, this is due because we used the cash we had on hand that came from the issuance of the 1.4 international bond within 2022. So it was a very good proceed of the money, this acquisition, because it's accredited on the one hand. It would further enhance our net income going forward, as we will have 100% net income from this business. So going forward at the end, as we see, if we could see a recovery going forward in Argentina, that has a terrible second half on last year, and to grow on strong results we are delivering in Chile, we should converge towards the middle of the range that we have defined between 1.5, 2.5 net financial debt going forward. So certainly in quarter four, or not certainly, but we look with good perspective on reducing the leverage. Regarding dividend policy, as maybe you know, and it's in the financial statement, the policy in CCU is to to distribute at least 50% of net income. And this is maintained in this coming exercise, coming in this year. For 2027, we need to wait until the shareholder meeting, which is typically in April, if this policy is changed or not. But the policy remains the same, to distribute 50% of the net income, at least.

Great. Wonderful. Thank you very much.

Thank you very much. Our next question comes from Rodrigo Alcantara from UBS. Your line is open.

Please go ahead.

Good afternoon, guys.

Thanks for taking my question. Just want to touch bases again on Argentina. The answer was very clear from a macro perspective. It's hard for us to predict what to expect in the second half. Still, it was not clear for me. The share performance, when you look at your number and other brewers, just wondering if you can help me understand what you attribute this short performance we observed during the quarter, specifically in beer, right? If you can give us granularity on the portfolio, the brands, Heineken portfolio and your own brands. And what are you planning to do in order to revert that chairwise, again, into the second half And very quickly, it would be on to when and what to expect, right, the launch of Heineken Ultimate, if any, following the launching in Brazil. If we defer to soon, anytime soon, could be in Argentina as well.

Those would be my questions. Thank you.

Hi, Rodrigo. Thank you for your both questions. The first one, regarding the market chain in Argentina, well, our numbers, we have Nielsen numbers, and we see our market chain in Argentina here today growing a little bit, but flat in those terms. For sure, we are eager for more, as we are saying. And we believe that our new strategy that we are trying to put in place in Argentina for the next year will get a little bit more market share. We have a very strong national brand, but also we have a very interesting local brand in Argentina that they are doing or could do a greater job region by region. At least our numbers say that we are stable in terms of market share in Argentina and actually gaining a little bit on value market share comparing the volume market share, because as Felipe mentioned in the presentation, we have done several price increase during the last quarter. Regarding the Heineken Ultimate, for sure we have a very strong pipeline in terms of Heineken Ultimate is trying to reach consumer occasions that are not satisfied by the typical, normal beer products that are in the market. In Brazil, it is doing a great job, and we are seeing to integrate that innovation in several operations within our business, as you see, not only in Argentina, but in other places as well. News are coming soon.

Excellent. Thank you. Thank you, guys.

Thank you very much.

Our next question comes from Maria Paula Aroa from Nestle. Your line is open.

Please go ahead. Maria, your line is open.

Hello.

Hello.

Hi, I can hear you. So I've got two questions about the Colombian market. And the first one is, is the current expectation for Colombia to continue delivering, make things grow? Or are there any anticipated changes to the growth trajectory moving forward? And the second one is, as part of the Vamos por Más strategy, that is Colombia, one of the core countries, and this strategy aims to deliver higher quality and more profitable growth, should we expect Colombia to continue relying primarily on the value segment as the growth driver, or will there be a stronger strategy focused on premium brands moving forward?

Hi, Maria.

Thank you for the two questions. Regarding the first one, for sure it's difficult now to predict. It has always been difficult to predict the future, but now in Colombia it's more difficult because governments are changing. So we will see how is this new government set up in Colombia. Regarding that, Colombia is is definitely a place that we believe that we have plenty space for growth. We truly believe in that market. We have been there. Obviously, we have a furious competition over there, but we believe that we have built a strong branch, and certain parts of Colombia, we are doing really, really well, for example, in Cartagena. We believe in Colombia. We don't know if the market, the industry, will grow at the same pace that we have done in this last quarter, but we believe to increase our competitive position over there. In terms of our portfolio, Colombia is a very mainstream portfolio compared to other regions or other countries within Latin America, and it's dominated by our competitor over there, So we believe that the way that we can improve our profitability over there is to compete asymmetric with a different portfolio. So we will increase our portfolio in terms of different brands, set in different places, and try to reach profitability with that strategy on the future.

Thank you so much. Our next question comes from Kevin Zavala from UBS.

Your line is open. Please go ahead.

Hello, Eduardo, Felipe, Claudio.

Thanks for the space. Just wanted to question regarding distribution expenses. You know, this quarter remains a source of pressure despite some efficient initiatives already underway. If you could explain which components are driving the increase, such as fuel, labor, fleet, utilization, etc. And in relation with that, I mean, which business process are the first targets for your digital investment? And I would like to hear from you, what do you expect the most tangible benefits are whether either sales effectiveness, demand forecasting, procurement, manufacturing, logistics from this investment in digital.

Thank you. Awesome.

Hello, Kevin. We have some problem with the system here, but we solved it. I'm Felipe. So I will take your first question. We have some noise problems, but I think you were wondering about how oil and distribution expenses are impacting our P&L. So I will take this part of the question. The second part regarding the future, Eduardo will take it. As you notice, we build CPI that is total expenses. It does include production costs, distribution costs, or MS and DNA as a whole. So despite the higher distribution costs because of oil pressures we had, we have been able to reduce our overall expenses over net sale by 56 basis points in a consolidated basis, which is very good. and keep our expenses below Chilean inflation, 3.8%. Chilean inflation in the period is 4.2%. In my view, this is good, because at the same time, we were investing more, especially in Chile, behind our ranks of this building in the future. So at the end, having this external pressure of oil in distribution costs on the one side, but on the other side, higher level of inflation, but on the other side, being able to invest more for the future for our brands, I think is the perfect equation for a company like us. And this was particularly good this quarter. If you look, and we are implementing efficient initiatives in all key aspects of the business with good results, mostly in logistics, that in his previous role was led by Eduardo, as he was the head the non-alcoholic business, and the logistics in CHIC. And also, I forgot to mention that we have restructuring costs into businesses that are suffering, such as Argentina and the wine business. If we exclude those effects, our total expenses on a consolidated basis will be around 3% growth. So this is much less than inflation. Of course, and then I will pass to Eduardo, looking at the future, we need to improve our margins, that's sure, especially going towards our pre-pandemic margins that we had. And this needs more efforts in terms of synergies and efficiency. So Eduardo will make a comment on that. Thank you, Felipe. Yes, Gavin.

Of course, within the new study that we have presented, the Vamos por Más transformation is a key pillar, not only for getting efficiencies and improve our evidence margin, but also to be a fuel for or enabler for growth, which is something that is for top-line growth, which is something that this kind of business needs in order to be Better, stronger, and with higher margin as well. So the digital information, as Felipe has mentioned, has been very, very successful, not only with low-hanging fruit initiative, but also some stage one initiatives. But we have done it silos by silos now. The future and the new structures that we are setting up is going to integrate all their transformation activities because if I am making a transformation in logistics in order to improve our logistics system is not 100% connected with sales transformation, sometimes there are inefficiencies within them. So the new structure and the new strategy balance for mass is going to integrate the end-to-end value change and set an appropriate structure in order to to get that transformation an end-to-end system and also integrate IT and AI capabilities within that structure at the same time. So we are going to be more agile and penetrate silos and be end-to-end in order to get that transformation. And of course, there are plenty of examples for that, but real-time control now, for example, control towers, in logistics, planning, commercial, industrial, are, for example, a key system that we are going to put in place in order to get real-time synergies. Because when you are managing, for example, an efficiency on a line, but you are looking back that number with one month, you cannot make the necessary adjustment to get the efficiencies in real-time. So it's just an example. More things to come, but future is an important, or transformation, sorry, on the future is a key point of our strategy.

Thank you.

Thank you so much. I'm not seeing any more questions, so perhaps I can hand it back to the CCU team for the closing remarks.

So thank you. Thank you all. Thank you very much. Thank you all the people who have listened to this Q&A session and listened to the presentation. Thank you for the people who have done the question itself. I am very optimistic and I'm very eager for more. So in this new rolling CCU, I've been here 20, 21 years, I've been I was born in this company, but I'm looking with several challenges and optimism in the future. So finally, we have to navigate these current challenges and volatile business context and keep projecting CCU's future. We will act with more agility and more focus while delivering synergies and efficiencies across all our operating segments. Together with the strengthening of our portfolio to adapt to new consumer trends by growing in high-margin innovation category is key for our plan. Working with collaboration, we will be prepared with the strength for our 2037 and 2013 strategic plan with more focus, more synergies, more agility, and more transformation. Vamos por más. Thank you very much for your attention. for your attendance and see you in the next chapter.

This concludes the call for today. We are now closing all the lines. Thank you and have a nice day.