Euronext Nv Unsp/Adr

Good day, everyone, and welcome to CCU's third quarter 2025 earnings conference call on the 6th of November, 2025. Please note that today's call is being recorded. At this time, I'd like to turn the conference call over to Claudio Las Heras, the head of investor relations. Please go ahead, sir.

Welcome, and thank you for attending CCU's Third Quarter 2025 Conference Call. Today with me are Mr. Felipe Duvernet, Chief Financial Officer, Mr. Joaquín Trejo, Financial Planning and Investor Relations Manager, and Carolina Burgos, Senior Investor Relations. You have received a copy of the company's consolidated Third Quarter 2025 earnings release. The call will start by reviewing our overall results and then we will move into a Q&A session. As a recorder, before we begin, please take note of the following statements. The statements made in this conference call that relate to CCU's future financial results are forward-looking statements, which course involve known and unknown risks and uncertainties that could cause actual performance or results to materially differ. These statements should be taken in conjunction with the additional information about risk and uncertainties set forth in CCU's Annual Report, in Form 20-F filed with the U.S. Securities and Exchange Commission, and in the annual report submitted to the CMF and available on our website. It is now my pleasure to introduce our CFO, Mr. Felipe Duerme.

Thank you, Claudio, and thank you all for joining the call today. In the third quarter of 2025, CCU posted carrier operating results and increased profitability versus last year in a volatile and an uncertain business scenario. Consumidated EBITDA grew 4.6% versus last year, mainly driven by our main operating segment, Chile, which in the context of soft industries expanded EBITDA and EBITDA margin through gross margin improvement and efficiencies, maintaining the positive trend in financial results throughout the year. The international business operating segment also expanded EBITDA versus last year. Within the segment, We are facing a very challenging scenario in Argentina, where the beer industry contracted mid-single digits during the quarter. On the other hand, the wine operating segment posted a lower EBITDA driven by weaker domestic markets in Chile and Argentina, together with a higher cost of wine. Our year-to-date results show that our path to recover profitability remains on track. supported by our 2025-2027 strategic plan, which prioritizes profitability through revenue management efforts and efficiencies. Regarding our main consolidated figures, in the third quarter 2025, net sales were down 1.1%, explained by 2.2% lower average prices in Chilean pesos, partially compensated by 1.2% growing growth. Gross profit decreased 2.9% and gross margin was down 79 basis points. In addition, consolidated MS and DNA expenses in Chilean pesos dropped 4.7% due to efficiencies and a favorable translation currency effect from Argentina. In Europe, EBITDA expanded 4.6% and EBITDA margin expanded 60 basis points. For the first nine months of the year, and excluding the non-recurring gain from the sale of a portion of line in Chile in the second quarter of 2024, Consolidated Evita expanded 9.9%. In terms of our segments, in the Chile operating segment, top line expanded 1.8% as a result of a 2.4% increase in average prices. partially offset by 0.6% lower volumes. Higher average prices were explained by revenue management efforts in all the categories. This was offset by mixed effects between alcoholic and non-alcoholic categories. Volumes were below a year due to soft industries, mainly in alcoholic categories. Gross profit and gross margin expanded 3.6% and 75 basis points, respectively, due to lower cost pressures related to federal prices in some raw materials, which compensated higher costs from our P&P recycling plan circular. MS&D&A expenses grew 3.2% below inflation, in spite of higher marketing expenses and as a percentage of net sales increased by 46 basis points. Altogether, EBITDA increased 4.8% and EBITDA margin expanded 41 basis points. Isolating costs and expenses associated to Circular, EBITDA would have expanded 10.2% and EBITDA margin by 117 basis points. In international business operating segments, posted a 5.3% expansion, although Mensage contracted 8.9%, driven by 13.5% lower average prices in Chilean pesos. The decline in average prices in Chilean pesos was mainly due to the 42.2% devaluation of the Argentine peso against the US dollar, and a very challenging pricing scenario in Argentina, where prices grew below inflation and negative mixed effects within the beer category. The volume expansion, excluding AD, the recent acquisition in Paraguay, was mainly explained by Argentina, fully driven by the water category, while beer volumes contracted in line with India. Regarding our other operations, Bolivia and Paraguay posted higher volumes and Uruguay contracted close single digits. Gross profit decreased 16.6% and gross margin contracted 382 basis points. MS and DNA expenses were down 19.2% and the spread of net sales decreased 552 basis points. Evista grew 73.1% driven by all geographies in this international segment. The wide operating segment hosted a top-line expansion of 1.6%, mainly driven by a 4.8% rise in average prices, while volumes were 3% lower. The higher average prices were mostly explained by the weaker Chilean peso and its favorable impact on export revenues and revenue management initiatives in the domestic markets. Volumes contracted due to a 6.3% decrease in Chile domestic market in line with the industry, partially offset by 4.5% growth in exports. Gross profit decreased 1.6% and gross margin deteriorated by 128 basis points due to cost pressures from a higher cost of wine and higher U.S. dollar-linked packaging costs. Eritrean DNA expenses rose 4.5% and at the present percentage of net sales increased 78 basis points due to higher marketing expenses. Altogether, EBITDA decreased 12% and EBITDA margin was down Finally, regarding our main joint venture and associated business in Colombia, we deliver low double-digit volume growth, outperforming the industry. We continue to build a robust brand portfolio and sales execution, which is the path to the long-term volume and financial growth. I will be glad to answer any question you may have.