Q3 2021 Compania Cervecerias Unidas SA Earnings Call

Speaker 1: Good day and welcome to the CCU's third quarter 2021 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Claudio Lotharance, Head of Investors Relations. Please go ahead.

Please standby.

Good day and welcome to the C. P Jews third quarter 2021 earnings conference call.

Today's conference is being recorded at this time I would like to turn the conference over to Claudio Las Shrugs head of Investor Relations. Please go ahead.

Speaker 2: Welcome everyone and thank you for attending CCU's third quarter 2021 conference call. Today with me are Felipe Boudinette, Chief Financial Officer, and Nicolas Novot, Financial Planning and Investor Relations Manager.

Welcome everyone and thank you for attending Ccu's third quarter 2021 conference call did they would meet our formidable with MIT, Chief Financial Officer, and Nicola Noble financial planning and Investor Relations manager.

Speaker 2: You have received a copy of the company's consolidated spirit quarter 2021 results.

You have received a copy of the company's consolidated third quarter 2021 results.

Speaker 2: Felipe will now review our overall performance and we will then move on to a Q&A session. Before we begin, please take note of our...

Olivier will now review, our overall performance and we will then move onto the Q&A session.

Before we begin please take note of our cautionary statement.

Speaker 2: Statements made in this call that relate to CCU's future performance or financial results are forward-looking statements, which involve known and unknown risks and uncertainties that could cause actual performance or results to materially differ.

Statements made in this call that relate to ccu's future performer performance or financial results are forward looking statements, which involve known and unknown risks.

Certainties that could cause actual performance or results to materially differ.

Speaker 2: This statement should be taken in conjunction with the additional information about risk and uncertainty set forth in CCU's annual report, in Form 20F filed with the U.S. Securities and Exchange Commission, and in the annual report submitted to the CMS and available on our website. It is now my pleasure to introduce Clarita Duernay.

These statements should be taken in conjunction with the additional information about risks 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 CMS and available on our website.

Now my pleasure to introduce cause he didn't wasn't it.

Yeah.

Okay.

Speaker 3: Thank you, Clive, Claudio, and thank you all for joining us today.

Thank you guys.

Thank you all for joining us today.

Speaker 3: In the third quarter of 2021, CCU continued in the positive trend showed since the fourth quarter 2020, outperforming volumes on financial...

The first walk through when people went one D. C. You continued the positive trend shown since the fourth quarter 'twenty.

Falling volumes and financial results not only versus 'twenty 'twenty, but also versus pre pandemic figures.

Speaker 3: not only versus 2020, but also versus pre-pandemic fever.

Speaker 3: The later has been the result of a favorable consumption environment, but as well as our regional plan.

The leasing has been the result of the favorable consumption environment, but well off our original plan with <unk>.

Speaker 3: which aims to protect first our people and ensure our operation continuity during the pandemic.

I used to protect our people and ensure our operation continuously during the pumping.

Speaker 3: and a successful business strategy which has allowed us to gain business scale, market share and to recover profitability in a highly competitive and inflationary scenario.

And if successful businesses strategy.

So allow us to gain business and gain market share and to recover profitability in the highly competitive.

And plus you Aladdin scenario.

Regarding our consolidated figures revenues expanded 45, 4% during the quarter boosted by 22% growth in volumes and a 19, 2% higher average prices in Chilean pesos.

Speaker 3: Regarding our consolidated figures, revenues expanded 45.4% during the quarter, boosted by 22% growth in volumes and 19.2% higher average prices in Chilean.

Speaker 3: The expansion in volumes was explained by higher consumption, a solid sales execution and the continuous improvement of our portfolios brand-aid.

Shouldn't volumes, what's explained by higher consumption is solid sales execution and the continuous improvement of our portfolio brand equity.

Speaker 3: In terms of financial results, EDYTA jumped 70.6% and EDYTA margin improved from 13.9% to 16.3%

In terms of financial result, EBITDA jumped, 76% and EBITDA margin improved from 13, 9% to 16, 3%.

The stronger financial result was mainly driven by first the expansion in volumes and second third efficiency gains from the accelerated program with Emerson DNA expenses.

Speaker 3: The stronger financial result was made driven by, first, the functioning volumes. In second terms, efficiency gains from the Excelencia CCU program with MSN DNA expenses and services touch of net sales, decreasing from 38.2% to 36.1%.

But let's say decreasing from 38, 2% to 36, 1%.

Speaker 3: And last, an expansion of 266 basis points in gross margin, mainly due to positive mixed effects and revenue management initiatives.

Wow unexpired sure.

<unk> hundred 66 basis points in gross margin, mainly due to positive mix effect on revenue management initiatives.

Speaker 3: These factors were partially compensated by negative external effects, mainly from a higher cost in raw materials, in line with the upward trend of commodity prices during the year.

These factors were partially compensated by negative external effects.

Mainly from the higher cost in raw materials in line with the App what trend of commodity prices during the year.

You know maybe you can talk I like again or for 2001.

Speaker 3: In all, net income total a gain of 42,168 million trillion pesos, more than crippling versus left

168 million Chilean pesos more than tripling versus last year.

In the June operating segment, our top line expanded 36, 4% due to 26, 6% growth in volumes driven by all the main categories and 7%.

Speaker 3: In the Tino-Prayping segment, our top line expanded 36.4% due to 26.6% growth in volumes, driven by all main categories and 7.8% higher average.

Average price.

Speaker 3: The latest was associated with positive mixed effects made based on a strong performance of premium beer brands and the implementation of revenue.

They like that with us.

We supposed to think mix effect may based on the strong performance of premium beer brands and the implementation of revenue management initiatives.

Speaker 3: Gross profit grew 41% and gross margin improved from 46.7% to 48.3%, mainly as a result of the expansion in revenues and efficiencies in manufacturing being partially offset by higher costs in robots.

Gross profit grew 41% and gross margin improved from 46, 7% to 48, 3% mainly as a result of the expansion in revenue unofficial sits in malpractice being partially offset by higher Cogs didn't robot.

Amazon's D&A expenses could you, 18.4% consistent with the higher volumes and the normalization of marketing activities. Nevertheless, especially on that give us, let's say in a sudden D&A expenses improved from 36, 9%.

Speaker 3: MSN DNA expenses grew 18.4% consistent with the higher volumes and the normalization of marketing activities. Nonetheless, as a person that is of net sales, MSN DNA expenses improved from 36.9% to 32%.

32% due to efficiencies to the above mentioned excellent CCU program.

Speaker 3: due to efficiencies to the above mentioned excelence CCU program. In all, a BIPT expanded 72.5% and a BIPT emerging improved from 16.2% to 20.5%.

EBITDA expanded 72% and EBITDA margin improved from 16, 2% to 25.

5%.

Speaker 3: in the national business operating segment, which includes Argentina, Bolivia, Paraguay and Uruguay. Net sales recorded a 1.6.6% rise.

In the international business operating segment, which includes Argentina, Bolivia, Paraguay and Uruguay.

Net sales recorded.

106.

6% right.

Speaker 3: The result of an increase of 71.8% in average prices in Chile and pesos and 20.3% high the memorial.

Sort of an increase of 71, 8% in average prices in Chilean pesos and 23% higher volumes.

Speaker 3: The Vettaravarach prices in Chile and Pesco were explained by revenue management initiatives. Positive mixed effects and favorable effects related with hyperinflation.

Debates at average prices in Chilean pesos were explained by revenue management initiatives.

The mix effect and favorable effect related with hyperinflation accounting.

These allow us to compensate higher U S dollar denominated costs from the depreciation of the Argentine peso against the U S dollar higher cost in raw materials.

Speaker 3: This allow us to compensate higher US dollar denominated cost from the depreciation of the agent by in peso against the US dollar. Higher cost in raw material.

Please go.

Speaker 3: Consequently, Gross Profit expanded 147.9% and gross margin view from 39.4% to 47.3%

Consequently, gross profit expanded 147 point.

9% and gross margin grew from 39, 4% to 47, 3%.

And there's some D&A expenses.

Speaker 3: MSN DNA expenses of present at Japan at SAIT also improve from 49.3% to 45.2% due to efficiencies from the Excelencia CCU program compensating higher increase.

And let's say also improved from 49, 3% from 45, 2% due to efficiencies from the extra landscape CCU program compensating higher inflation.

Speaker 3: A second, a bit of real strongly during the quarter and a bit of margin improve from 2.8% to 9.1%

As a consequence EBITDA grew strongly during the quarter and EBITDA margin improved from 2.8% to nine 1%.

In the wine operating segment revenues were up 2.8% explore explained by an 11.

Speaker 3: In the wine operating segment, revenues were up 2.8%. Explain by an 11 per cent growth in average prices, while volumes dropped 7.44%.

Besides the growth in average prices, while volumes dropped seven 4%.

Speaker 3: The failure average price is in Chilean pesos were mainly spent a better meat in both the domestic and export market.

Average prices in Chilean pesos were mainly explained by a better better meet in both the domestic and export markets.

Speaker 3: The lower bonds were largely explained by a contraction in export associated with global logistic difficulties, which has caused disruption to our chips.

Lower volumes were largely explained by a contraction in export associated.

With global logistic difficulties, which has caused disruption to our shipments.

This was partially compensated by the Chilean domestic market, which expanded and excellent mid single digit.

Speaker 3: This was partially compensated by the Chilean domestic mayor.

Speaker 3: which expanded an excellent mid-signal V.

Gross profit was down three 3% and gross margin decreased from 41, 2% to 38, 8%, mainly due to higher manufacturing costs, an increase of cost of wine and a lower contribution from the export business.

Speaker 3: Gloss profit was down 3.3% and gross margin decreased from 41.2% to 38.8%. Mainly due to higher manufacturing costs and increase of cost of wine and a lower contribution from the export.

Speaker 3: MSN DNA, expenses of percentage of net sales, improve from 24.5% to 23.9%, thanks to efficiencies driven by the Excelencia TV.

M S N DNA expenses as a percentage of let's say improved from 24, 5% to 23, 9%. Thanks to efficiencies driven by the accelerated chest. If your program you know EBITDA contracted eight 2%, while EBITDA margin dropped from 20 <unk>.

Speaker 3: Inno, a Vita contracted 8.2% while a Vita margin dropped from 21.2% to 18.9%

One 2% to 18, 9%.

How are you doing in Colombia, where we have a joint venture with stone, we kept gaining business of scale by growing double digit in volumes.

Speaker 3: Finally, in Colombia, where we have a joint venture with Post-Oborn, we kept gaining business scale by growing double digit volumes. In addition, during the quarter, we strengthened the mix of our portfolio, driven by an outstanding performance in premium beer brands, especially high.

During the quarter, we are strengthening the mix of our portfolio driven by outstanding performance in premium beer brands, especially how you think it.

Speaker 3: We will keep executing our strategy in Colombia focusing on gaining scale, consolidating our portfolio of brands and delivered and delivering better financial.

We will keep executing our strategy and Columbia, focusing on gaining scale consolidating our portfolio of brands unbeliever I'm delivering better financial results.

No I will be glad to answer any question you may have.

Speaker 3: Now I will be glad to answer any question you may have.

Thank you if you would like to ask a question today. Please now by pressing star one on your telephone keypad.

Speaker 1: Thank you. If you would like to ask a question today, please sign out by passing Star One on your telephone keypad. If you're going to ask a question, please sign out by passing Star One on your telephone keypad.

If you're using a speaker phone.

Speaker 1: Please make sure you meet function after enough to allow your signal to reach our equipment. A voice prompt on the phone line will indicate when your line is open. We ask that you please do state your name before posing your question. Again, that is star one to ask your question. And we'll pause for just a moment to allow everyone an opportunity signal for questions.

Please make sure your mute function is turned off.

Your signal to reach our equipment.

We've talked on the phone line will indicate when your line is open we ask that you. Please do you state your name before posing your questions again that is star one to ask a question and well pause for just a moment to allow everyone an opportunity for questions.

And we'll take our first question.

Yeah.

Speaker 4: Hi, good afternoon and thanks for taking my questions. I have two, both are related to Chile. Can you share what is your view on consumption and how do you expect dynamics to behave? And how are you thinking about voting performance and coming to waters with a proper comparison on one side and the potential approval of the sports pension withdrawal on the other side?

Okay.

Hi, good afternoon.

Thanks for taking my questions I have.

Yes.

Oh theyre related to Chile.

You sure.

What is your view on consumption and how can we expect dynamics to behave.

How are you thinking about volume performance in the coming quarters.

With a tougher comparison on one side and the potential approval of the pension withdrawal on the other side.

Speaker 5: That's the first one. And the second, can you comment about the price of a PCP? What is it on beer and slaughtering and how much room do you see for further hikes given that open-sune or the companies are increasing prices? Thank you. Thank you. Can you stay here, please? Thank you.

That's the first one.

Can you comment about the price elasticity.

This is on beer and soft drinks and how much room do you see for further.

Given that all consumer companies are increasing prices.

Yes.

Yeah. Thank you kindly state your name please.

Oh, yes sure.

Michael for America.

Speaker 2: Fernando, we had a lot of noise, I think, from your side. Can you repeat the second question, please?

So when I look at we hadn't a lot of noise. It seems from your side can you repeat the second question. Please.

Speaker 5: Yeah, sure. If you can comment about price and LFT, when is it on beer and suffering, and how much room do you see for further price tags given that all consumer companies are raising prices?

Yes sure.

If you can comment about try to lucky witnesses on beer and soft drinks and how much room do you see for <unk>.

Okay.

Given that all consumer companies are raising prices.

Good luck this year.

Yeah.

Speaker 2: Okay, thank you for the number for the question. First of all, we will ask you a question made to the consumer to consumption dynamics in the field. You are right, you have got it. I would say outstanding volumes in the next year.

Okay. Okay. Thank you if I remember part of your question first of all Youre quite.

Thanks, Nathan for human consumption dynamics in Europe.

We have got I would say outstanding volumes per year.

Speaker 2: But it's not completely new to you know government aid to the

Not completely new.

You know government eight through there.

Speaker 3: in the grace of a million in the essence and also the pension fund with draw as you stated in your question. This answer part of the kite in consumption.

Hey, guys.

Yeah and also the pension fund withdraw as you stated in your question.

Also part of the Sky in consumption.

Speaker 3: especially in some categories where we are seen, you know, an upward trend.

Especially in some categories, where we are seeing it you know.

I'll walk trend.

Speaker 2: I would say two or three years, especially during Chile, where we are seeing an increase of consumption.

But I would say two or three years, especially here in Chile, where we are seeing you know.

I mean.

The increase of consumption.

Speaker 3: Looking forward is difficult to predict. I don't know what will happen with the vote of the fourth pension found withdraw. That means it's not a good point.

Looking for what is difficult to predict I don't know what will happen with the vote of the fourth pension found withdraw that doesn't mean, there's not a good a good policy, but but you know some of the consumption patterns. After the pandemic will remain because there are changes in behaviors.

Speaker 3: But you know, some of the consumption patterns after the pandemic will remain because they have changed its in-behaviors. You know, consumers, now they will change the share of wallet towards more to our products than to other products. For example, such as travel, such as transportation, maybe more people will work from home, more people will do more sport.

Yeah, you know.

Consumers now.

No. They they will change the share of wallet to work more to our product down into other projects. For example, such a throbbing such as you know transportation, maybe more people will work from home more people will do more sport. So we're confident.

Speaker 3: So we are confident that the levels of scale we have reached will grow at a lower rate. Certainly, the industry will maintain the scale. We are working on that scenario.

The level of SK, we have reached.

Really really grow at a lower rate suddenly.

We will we will.

The industry will maintained at Takeda and we are working on that Tonight.

Speaker 3: But as you know, a huge contraction in the economy also could be a problem. And look at that and looking at with your further, your second question, we are facing an extremely high cost ratio due to the commodities, but also, and this is something that I'm very concerned Chile is the exchange rate that is going up in the last.

But as you know a huge contraction in the economy.

It could.

Could be a problem.

Get the linking that with you.

Further your second question.

Facing an extremely high cost right.

The commodities, but also and this is something that.

But I'm very concerned.

Great.

That is going up in the last.

One or one and a half.

Speaker 2: one and one and a half, and just to do, we thought the political dynamics and all that has to do with the pension pound discussion.

Yes.

With both the political dynamics and all of that has to do with the pain.

A discussion.

Speaker 2: So, and also Argentina, third and we saw the gap between the official electric trade rates and so forth, the blue trade rate, that is something to adjust in Argentina, in the near future. I don't know, but it's a risk. So, certainly,

So and also Argentina.

We saw the gap between your picture taken break.

So old.

Right.

There is something like that.

And feelings in the future I don't know, but it's a risk.

So certainly a bright.

Speaker 2: price hikes will be necessary and but we will do that through our raving management initiative how much is the elasticity

Bright sky will be necessary.

But we will do that through our revenue management.

Initiatives.

To compensate that how much is the elasticity.

Speaker 3: Look that I think I would promise our from fam.

No.

I think our promise.

Speaker 3: to meet the conjunction with other consumers and how these will evolve. So I think that

Excuse me in conjunction.

With other consumer need and how this will evolve so I think that.

Yeah.

It will not be a good time of good consumption.

Speaker 3: And it will last a good time of good consumption. But in the future, it would depend a lot on the alternative of the consumer. But by saying that our categories are very resilient, this kind of consumption reduction to be honest. Yeah, I answered your question, Fernando. Yes, yes. Thank you so much.

In the future it will be.

Depends a lot on the alternatives.

The consumer but by saying that our categories are ready.

Okay.

These kind of.

Samsung reduction could be up.

Yes, it's a good question Fernando.

Yes, yes. Thank you so much.

Speaker 1: Thank you. And one thing in that is, star one ladies and gentlemen, if you would like to ask a question again, please state your first and last theme before posing your question. One moment, we'll take our next question.

Thank you once again that is star wine, ladies and gentlemen, if you would like to ask a question again. Please state your first and last name before posing your question right. Now then we will take our next question.

Yeah.

Okay.

Okay.

Hi, guys.

Speaker 6: Hi guys, this is Mohammed from Poison, Borgon Pain. Thank you very much for taking my question and congratulations and extremely good results. I have three questions. The first one is...

This is mohammed from voice and Gorgon train. Thank you very much for taking my question and congratulations on extremely good results.

I have three questions the.

The first one is you.

Speaker 6: You're currently running volumes in Chile, 20% above pre-COVID levels.

You're currently running volumes in Chile, 20% above pre COVID-19 levels can you give us some color on how much of that is market growth versus market share and perhaps some color on how the three main segments beer soft drink and spirits are.

Speaker 6: Can you give us some color on how much of that is market growth versus market share? And perhaps some color on, you know, how the three main segments, beer, soft drink, and spirits are doing relative to 2019? Like, whether they're all up 20%, or some are up more than others. So that's the first question. And then I'll follow up with two more.

Doing relative to your 2019.

Whether theyre, all up 20% or somewhere up more than others. So that's the first question.

Then I'll follow up with two more accurate.

Yeah look compared to last quarter market, rather stable. However, it all it all in Chile, we are gaining market share against the against last year with a very good performer I would say the categories, where we have share gains.

Speaker 3: Yeah, look, compared to last quarter, the market share of other states, however, overall in Chile, we are gaining market share against, against last year. With a very good performer, I would say the category where we have share gains are nonalcoholic and also beer, but the emory in the premium.

Non alcoholic <unk>.

Also this year, but more in the premium side.

Speaker 7: So the industry is wrong, that's certain. So there's no, no, no. So I would say stable market share with an outstanding industry growth. Not only non-alcoholic and beer, but also lipos.

The the.

So the industry is rolling.

So there's no no no. So I would I would say stable market share with.

Certainly industry growth not only non alcoholic beer, but also lead horse okay.

Speaker 2: That's for the second part of the question. What was the second part? Here.

Okay.

For the second part of the question what was the second part.

Speaker 8: against the against the give you some color against pre-pandemic volumes so I think quarter three 2021 compared to quarter three twenty nineteen each Chile is outstanding across the board from one category I would say twenty one percent

Yes.

Yes, yes.

They give you some color against pre pandemic volume so I think.

The three 2021 compared to two three.

<unk> 2019 in Chile.

Our standing across the board.

But one category I would take 21%.

Speaker 2: Other categories, 32 up to 46.6%. So overall, in Chile, we are growing all across the board, Mohammed, in both the third quarter and accumulated volumes.

Other categories.

32 up to 46, 6% so all.

All of it all against the against the in Chile against.

We are growing all across the board in both.

Nope.

The third quarter and cumulated volumes so.

Speaker 2: So we are very delighted and certainly from your congratulation because in these tough times of

So we are very delighted on central Europe, congratulations because in these tough times Oh, many supply chain constraints believe me it's difficult to supply these volumes.

Speaker 2: Many supply tank constraints, believe me, it's difficult to supply this one.

Yeah.

Speaker 6: Thank you. My second question is on the International ASP quarter-over-quarters. It's a quenchedly Q3 versus Q2.

My second question is on the international ESP quarter over quarter, So sequentially Q3 versus Q2.

Speaker 6: I mean, I just looked at, I mean, I'm not an expert in currencies in Argentina, but I looked at a buglego like it didn't seem to be a significant change sequentially.

I mean I just looked at.

No expert in currencies in Argentina, but I looked it up on Google and it didn't seem to be a significant change sequentially.

Speaker 6: So, but at the same time your ASP went up from 60 to 80.

So but at the same time your ESP went up from 60 to 80.

Speaker 6: Q3 versus Q2. Can you give me an understanding that is this just because of the official exchange rate versus I mean what I would call actual exchange rate that's causing this disparity because you know ASP of AD and CLP terms.

Q3 versus Q2 can you give me.

And understanding that is this just because of the official exchange rate worsens, well I mean, what I would call actual exchange rate, that's causing this disparity because.

Aspira <unk> terms has been the highest for several years by a large margin and I'm just trying to understand how real that is.

Speaker 6: has been the highest for several years by a large margin. I'm just trying to understand how we elit it.

Yeah, it's a.

Speaker 3: Yeah, it's a good question. I think I catch up with questions, but if you're not answering what exactly you want to know, let me know. So you need to understand that Argentina is half half a higher inflation than higher development.

A good question I think I touch.

Catch up to your question, but.

So what exactly you want to do let me know so.

Need to understand that Argentina is hot.

Got it.

Higher inflation down.

<unk> hired a devaluation.

Speaker 3: So that means that up to September we were able to increase price in line with inflation, which is much higher than the valuation of the country.

So that means that up to September we were able to increase price in line with inflation.

Much higher doesn't devaluation of the currency. Okay. So and this is the explanation why we are doing so good in prices in Argentina.

Speaker 3: Okay, so and this is the explanation why we are doing so good in prices in Argentinian terms.

You've got the opinion pistols.

Third.

But also when do you plan to translate the results into Chilean pesos that we translate the results.

Speaker 3: But also when you translate the results into genuine vessels, that you translate the results.

Due to the hyperinflation accounting.

Speaker 3: due to the hyperinflation accounting at the exchange rate of the last day of the quarter. So as of the 30 of this summer. So inflation in Argentina, in the period, year on year was 52.5% and evaluation against the Chilean peso, which is the currency where I report the result was only 26.5%. So you have it.

The exchange rate of the last day of the quarter. So also the therapy of December so inflating that D&A in the period.

India was 52, 5% and evaluation.

Against the Chilean peso, which is the currency what the result was only 26, 5%. So you have it.

Speaker 3: high gain on that. We remember, we are in hyperinflation accounting. So until the last year of the, excuse me, the last day of the year, we need to re-state the Argentinian result, a second sequence of hyperinflation action.

Hi gain on that we will remember we had in hyper inflationary accounting so until the last year.

Oh excuse me the last day of the year.

We need to restate the Argentinian results as a consequence of hyperinflation accounting.

Speaker 3: Is there important to ask what has been manifest to you? Does it underestimate this labor across our state? It does! Do you think you can add in all this? Might be easier... Euf.... ...are your spiritual Noch ...have less of knowledge about new forms... ...maybe you should believe it.

I answer the question sorry to be so Technicolor.

Speaker 6: Nope, that makes sense. So that was my understanding. I guess I just have to sort of look at what the, are you able to take out capital at that exchange rate out of our,

No that makes sense. So that was my understanding I guess I just have to sort of look at what the like are you able to take our capital at that exchange rate out of Argentina.

Speaker 3: Yeah, you can buy machinery, so as you know, we are doing investment to in Argentina, in our Lujan plant, our beer plant, and the government allow you to buy at the official exchange rate for capital goods.

Yeah.

You can buy machinery, so as you know.

We are doing investment in Argentina, and now we're at a.

Plant our plant.

And on.

The government allow you to buy up the official exchange rate for capital goods.

Well, that's what I'm, just saying taking capital out.

Speaker 2: Yeah, so no, but that's is to pay. No, you are not allowed to send dividends from Argentina for the time being.

Yeah, So no but that is to pay no you are not allowed to send dividends from Argentina for the time being.

Okay.

Speaker 6: Just final question on operating expenses, which I just wanted to confirmation that that's largely volume-based increase. So there was nothing significant cost inflationary on a per unit base out of it.

Final question on operating expenses, which I just wanted a confirmation that that's largely volume based increase so.

There was nothing significant cost inflation are you on a per unit basis out of it.

So we have higher level of inflation cost pressure on top of volumes, but also we have efficiencies.

Speaker 3: Now, we have higher level of inflation, cost pressure on top of volume.

Speaker 3: But also we have efficiency that compensate the cost pressures because it's not only cost-pressuring raw materials, but also in salaries because we have higher level...

That compensate the cost pressures because he is not only cost pressure in raw materials, but also in salaries.

We have a higher level of inflation.

Speaker 3: Of course, the warnings also push you a lot in terms of hiring more tracks.

Of course in man in the volume cultural push you a lot in terms of hiring more packs more extra hour. So but overall also steel how our removes the <unk> CCU program that you know and I imagine.

Speaker 2: more extra hour, but overall also we still have our robust excellence in CCU program that you know, and Mohammed, we have talked about that in many fronts, manufacturing, logistics, procurement.

<unk> maintained that in many fronts manufacturing logistics and procurement.

Speaker 3: GNA general administration so because we need to have a fit company at the end to gain the scale benefits. Of course there are scale benefits but also we have cost pressures.

G&A.

So because we need to have a fifth company a b N two to gain.

Scale benefits of course that escape the scale benefits, but also we have cost pressures, but also in terms of efficiencies.

Yes.

Speaker 6: Okay, no, that's great. Thank you very much, guys. And once again, we're actually the result. Thank you.

Okay. That's great. Thank you very much guys and once again congrats on the results.

Thank you. Thank you Mohammed.

Thank you and next we will take our next question.

Speaker 1: Thank you and next we'll take our next question.

Speaker 9: Yes, good morning, Jant. This is Philippe Bulkross from Scotiabank. Congratulations on the results again.

Yes.

Good morning, John This is Felipe <unk> from Scotiabank.

Gratulation on the results again.

Speaker 9: I have a few questions, but maybe I can start with the strategy. A few quarters ago, when I started covering the company, we discussed this strategy where you were going to concentrate on volume.

I have a few questions, but maybe I can start with the strategy.

A few quarters ago, when I started covering the company discusses strategy, where you were going to concentrate on volumes.

Speaker 9: and very slowly worry about margins for the much longer term. And I think the environment has been probably a lot better than you expected. So just wondering how your plans or your strategy, your long-term strategy has changed since you've performed so well. And then I'll follow up with some other questions.

I'm very slowly worry about margins.

Much longer term and I think the environment has been probably a lot better than you expected. So just wondering how your plans or your strategy. Your long term strategy has changed.

Formed so well and then I'll follow up with some other questions.

Yeah.

Speaker 2: Yeah. Remember when we took in flimsy, we had three objects.

Remember when we talked in 2020.

We we had three objective.

First Rob.

Speaker 2: First, protect the health of our people and the people we interact with, suppliers, customers.

The sale of our people and the people we interact.

<unk> customer.

Clients.

Speaker 3: also maintain our operational continuity.

Also maintained our operational continuity.

But also to keep escape because our business is important to keep escape is where we were talking about keeping the volumes were very successful in doing that but also talk about timeline and financial itself was to protect our cash but also let's say.

Speaker 2: because our business is important to keep a scale. This is where we were talking about keeping the volumes. And we were very successful in doing that. But also we talk about financial shell. And financial shell was to protect our cash, but also let's say protect our margins.

Protect our margins.

So.

Speaker 2: But this strategy also is very flexible to be honest in the different priorities.

But this strategy also is very flexible to be honest in the.

And in the different <unk>.

I heard we will suffer even more cost, but I showed them today.

Speaker 2: Ahead we will suffer even more cost pressure than today.

Speaker 3: due to commodities increase and exchange rate volatility and higher level of inflation. So we have three thoughts. That are very similar with the ones we have tested during the pandemic or as you remember a few quarters ago, Felipe. First of all, in case I was revenue management effort.

Due to commodities increase and exchange rate.

Volatility and higher level of inflation. So we have three folks that are very similar.

The one we expect that during the <unk> you remember a few quarters ago Philippe.

Our revenue management efforts.

Speaker 2: We will continue with our Excelencia CCU program, which will be reconverted into a transformation program in the upcoming years, incorporating a lot of digital technology.

We will continue with our <unk> program.

Which will be converted into a transformation program in the upcoming years, incorporating a lot digital technologies.

Speaker 2: And third, we think we will keep our scale and our volume.

And third we think we will keep our scale.

And our volumes.

Speaker 3: These are very resilient, even if we see a dropping concern.

These are very resilient, even if we'll see a drop in consumption. This is also based on the high performance of our brand that in the in the last year is higher than ever I would say the brand preference of the consumer because in order to build the scale and the market share.

Speaker 3: This is also based on the high performance of our brand, that in the last year is higher than ever. I would say the brand's preference of the company.

Speaker 3: Because in order to build the scale and the market share you need that new brand to be in the heart of the country.

And you need that.

Brand to be in the cut of the consumers.

So I'm unable to take your second question Philippe unless you have it out of my answer.

Speaker 3: So I'm able to take your second question now Felipe unless you have a doubt of mania.

Speaker 9: No, great. That's very clear. Maybe just a follow up on that first. Obviously, as Mohammed said, you are obviously very high in volumes when you compare it versus 2019. So I'm just wondering how you guys are doing in terms of capacity. Are you having any constraints on production right now? Are you operating at full capacity?

Oh, great that's very clear, maybe just a follow up on that first.

Obviously.

Mohamad said you are obviously very high in volumes when you compare it versus 2019. So I'm just wondering how you guys are doing in terms of capacity are you having any any constraints on production right. Now are you operating at full capacity.

We we have to take all the all the measures to cope with this volume not only our capacity, but also with our suppliers to cut off.

Speaker 3: We have taken all the measures to cope with this violence. Not only our capacity, but also with our suppliers.

Speaker 2: So we have also anticipated a couple of investments that they were in the pipeline and in the master.

So.

So we have also anticipate a couple of investments that they were in the backlog in the pipeline and the Master plan, we have a very robust process in looking at all our capacities our aggregate capacity capacity, but also in our specific capacity.

Speaker 3: We have a very robust process in looking at all our capacities, our aggregated capacities.

Speaker 2: Capacities, but also in our specific capacity.

Speaker 3: to be very flexible because you have changes in behavior of the consumer. Sometimes now, for example, we are experiencing a high consumption of glass.

To be very flexible because you have changes in behavior of the consumer sometimes now for example, we are experiencing a high consumption of.

<unk> of gas in there.

Speaker 2: individual bottles because of premium. Last year we were experiencing a high-confunction in Kant that continue, but that continues.

<unk>.

Bottles because of premium.

Last year, we were experiencing a high consumption and can that continue.

That continues so.

What what we have done we have reinforced our our capex.

Speaker 2: What we have done, we have a rain force our cup.

Speaker 10: and upon this very good performance, not only in Chile, but also in our team.

Yeah.

And up on this vertical performance.

Not only in Chile, but also in Argentina. So.

Speaker 2: So, and also working with our suppliers, because also we have, you know, not only problems we are facing with international trade. So at the end, we have been working very consciously in trying, in de-bottle making every constraint we could have in order to serve this high.

And also working with our suppliers because also we have you know not only problems with.

We are facing.

With the international strength, so a b M.

We have been working very consciously.

In in Bulker, netting every constraint we have in order to serve the sky consumption.

Speaker 9: Great, thanks for the call, I'm glad, and clearly you're doing it very well because the number speaks for themselves. Maybe turning a little bit away from Chile.

Great. Thanks for the color on that and clearly you're doing it very well.

The numbers speak for themselves.

Maybe turning a little bit too away from Chile.

Speaker 9: I was just wondering if we could talk a little bit about Bolivia, Paraguay, and Uruguay. You know, we don't usually talk about those divisions too much, but when you look at it over a longer term over a few years, you've managed to gain some ground in those markets where the operation was very small. So just wondering if you could tell us how this year has gone in those three countries and what your long-term vision for those markets.

I was just wondering if we could talk a little bit about Bolivia, Paraguay and Uruguay.

You know, we don't usually talk about those divisions too much but when you look at it over over a longer term over a few years you you've managed to gain some ground in those markets, where the operation was very small. So just wondering if you could tell us how this year has gone in those three countries and what your long term vision for those market.

Yes.

Yeah, So Uruguay, Paraguay, and Bolivia put us a key market because they.

Speaker 2: Yeah, so Uruguay, Paraguay and Bolivia for us are key markets because they are markets that we are fully committed to continue growing and building scale along the time. They are still small businesses for us, however, we have seen a lot of progress, especially in the year gaining market share in all three countries.

They are the markets that we are fully committed to continue growing.

Building scale, along the time they are still a small amount a small businesses put out. However, we have seen a lot of progress, especially in gaining market share in all three countries.

Speaker 2: There are differences between the different countries. Uruguay is more stable. It has not been...

There are differences between.

Between the different countries Uruguay is more stable.

No.

Speaker 2: so affected by the pandemic. They have had a very good, let's say, management of the pandemic along the time.

So affected by the pandemic or did they have had it very good let's say.

Management of the pandemic along the time.

Speaker 3: It affected certainly at the beginning of the year a lot by a drop in tourism, especially from Brazil and from Argentina. However, the results are very encouraging. We have been improving profitability there to focusing in high margin products.

Effective at the beginning of the year and not buy.

A drop in tourism, especially from Brazil and from from Argentina. However, the results are very encouraging we have been improving profitability there.

Through focusing in high margin products and having outstanding would result in the beer category.

Speaker 3: and having outstanding results in the beer cutting.

In the case of Paraguay very affected by the pandemic, we have a very.

Speaker 3: In the case of Paraguay, very affected by the pandemic, we have a very big, let's say, Jewish business fair that especially with the school closures, where you have the individual occasions of consumption, of children during the school, we saw a huge drop on that. However, this has been recovered.

Big let's say geez.

There that especially with the school closures, where you have the individual.

Patients of consumption of children. During this quarter, we saw a huge drop on that however discussed being recovered.

But I would say that we have been gaining share with excellent results excellent performance of Heineken and Amstel.

Speaker 2: But I would say that in here we have been sharing with excellent results, excellent performance of Heineken and Amstel in this market, and also we have a craft beer called Sajonia. So we are experiencing now in Paraguay a full record.

In this market and also we have a craft beer called accordingly.

So we.

We are experiencing now in Paraguay, a full recovery.

Speaker 3: In the case of Bolivia, we are affected a lot by the parallel trade. Bolivia, you know, has a fixed exchange rate.

In the case of Bolivia.

We are affected a lot by the federal trade bolt Evs.

Have a fixed exchange rate.

Speaker 2: Certainly with the evaluation of the currency, the surrounding countries, let's say Peru, Chile, and Paraguayan and Argentina, we experience a lot of parallel trade.

Certainly with the devaluation of the currency of the surrounding countries, let's say, Peru, Chile, and Paraguay, and Argentina, we experienced a lot of parallel trade.

Speaker 3: But we are committed with this business. We invested in a new kind of line last year that is now producing. So, but we expect that sooner or later this will be more controlled, the issue with the parallel straights. That's a fact.

We are committed with this business.

We invested in a new cutting line last year, but he is now producing.

So, but we expect that sooner or later this will be more control the the the issue with the positive trends that affect.

Speaker 2: A lot the area where we have Khayyar and Makkah Shaf, which is the Santa Cruz region, or the West region.

A lot the area, where we have high yet.

Mark the shelf, which is the Santa Cruz.

The West <unk>.

Alright.

But but.

Speaker 3: But that is for us, these are here committed to continuing growing in this market. And we saw a recovery in two of them. And the third one, as I explained, I look forward that in the future, this will be more controlled, the so-called parallel trade.

For Us we decided we are committed to continue enrolling in this market.

And we saw.

Recovery in two of them and the third one as I explained I look forward.

In the future this will be more controlled.

The so called parallel trade.

Hum.

Yeah, that's great color on a question that I wasn't going to do originally but that you mentioned and my first question, but I thought it was very interesting you mentioned that extra landscape will continue but it will more towards.

Speaker 9: Now that's great, Karin. A question that I wasn't going to do originally, but that you mentioned in my first question, that I thought was very interesting. You mentioned that Excellency, I will continue, but it will morph towards transformation and digitalization. Just wondering if you could expand a little there on what your plans are, given everything that's changing in the beverage slope in Latin America. Thank you.

Towards transformation and digitalization, just wondering if you could expand a little there on what your plans are.

Given everything that's changing in the beverages scope in Latin America. Thank you.

Thank you thank you Philippe.

Thank you.

Speaker 1: Thank you, and we'll move on to our next caller.

Move on to our next caller.

Speaker 2: Sorry, sorry for the day. Do you want some clarification or transformation program? I didn't understand. More color.

Oh, sorry, sorry, Philippe you want some clarification on the transformation program I did understand.

More color on that okay. Thank you Kal wheel here.

Speaker 2: Thank you, Cloud. You're here. So, yes.

No.

Yes.

Speaker 2: When we started the experiences I see you programming 2015 for those of you that are following the program a long time ago, with very tiny improvements in several areas, traditional areas, such as transportation, such as manufacturing, procurement. Now we are moving the program to the next stage.

We have started the financials continue programming.

15 for those of you that are following appropriate long time ago with very timing improved in several areas traditional areas such as transportation such as London factory procured now we are moving the program to the next page and this involved you know the transformation program.

Speaker 3: And this involved, you know, a transformation program that also started this year with the change of our ERP, the SAP, that we were very successful in implementing it. We practically know this option because in this kind of project.

That also started the year with the change of our ERP.

But we work very successfully implementing each respectively no disruption because in this kind of project.

Speaker 3: you could face disruption. So delivering these higher volumes and at the same time implementing a new platform.

Good faith disruption so delivering these higher volumes.

At the same time implementing new a new platform.

Speaker 3: that certainly will give you a state of the art ERP, I would like to thank all our, my CCU colleagues, because you know, delivering this growth 22% for this is the of Mayor clean in his Mysterious

Certainly, we'll give you a state of yuck.

ERP I would say.

I'd like to dissect all.

Sure Mike CCU.

Because you know delivering this.

Grow, 22% or accumulated 17% growth in overall and 15%.

Speaker 3: 17% growth overall and 15%

Speaker 3: more of the work that we're studying here after now. Now´s Germany.

Again.

19.

Is it health company so they are initiatives.

Speaker 2: So there are initiatives of course in commerce, in business.

Of course E Commerce business.

Speaker 3: also in optimising.

Also in optimizing.

Speaker 3: with artificial intelligence, our routing of the tracks in order to save time and decreasing the carbon footprint.

Yes.

Artificial intelligence, our routing of the pact in order to save time.

Hum.

And decreasing the category footprint.

Speaker 2: We also have initiatives on data, analytics and international and artificial intelligence in our plan to save energy, to save water really online.

We are also we also have an initiative on that panel.

And international.

And artificial intelligence in our plan to save energy to save water.

Really online.

Speaker 3: Also, we have a program in which we do for our salesman the perfect portfolio to be sold to our consumers.

Also.

We have a program.

That's due for our salesmen the perfect portfolio to be sell to our consumers.

Speaker 2: And so also we are working in technology and artificial intelligence in forecasting, which will save us a lot of inventory and the out of stock.

So also we are working in technology.

Artificial intelligence and forecasting which will save us a lot of inventory on the out of stocks.

Speaker 2: also working in automatization of processes through EPA robot process, automaticization. So we are moving to another generation of efficient.

Also working in October application of processes through FBA Robert process, what's about the patient. So we are moving to another generation of efficiencies.

Speaker 2: and while maintaining the traditional ones, but always CCU, since we implemented the Excelencia CCU program, we are a recurring program also to protect our P&L in a high inflation environment.

While maintaining the traditional one.

All the ways CCU since we implemented the <unk> CCU program.

We are.

Recruiting.

Our recruiting program also to protect our P&L.

Hi, <unk>.

Relation environment.

Okay Philippe.

Speaker 6: I think there's a switch to my line. This is Muhammad here for instance. I still I don't should I go ahead with my follow-up questions? Yes, well I'm at this mic.

I think they are great to my life.

This is mohammed here at voice that.

So should I go ahead with my follow up questions.

Yes.

It is my pleasure.

Okay.

Speaker 6: Just a couple of longer term questions. One on company wide EBITDA levels historically. I have used 20% as your long-term target. My estimation is for this year, you'll be running pretty much at that level. Though the makeup is a bit different in the sense that gross margins likely to be a bit lower than your historical levels while off-ex as a percentage of revenue.

Just a couple of longer term questions one on companywide EBITDA levels historically.

20% of your long term target.

My estimation is for this year, you'll be running pretty much at that level. Though the makeup is a bit different in the sense that gross margins likely to be a bit lower than your historical levels.

While opex as a percentage of revenues, but it would be substantially lower driving the move to that target. My question. Here is is that as we look ahead.

Speaker 6: the move to that target. My question here is, is that as we look ahead, Gordon, over the medium term, next two, three years.

Over the medium term next two to three years.

Speaker 6: Would you given the success you had with the Excellency of Programme?

Would you given the success you've had with the.

LCR program.

Saying that your longer term EBITDA target should be higher than that or.

Speaker 6: saying that your longer term at the dot target should be higher than that or given the cost pressures and maybe the market dynamics you're seeing we should still continue to use 20% as sort of the average target level for the company.

Or given the cost pressures and maybe the market dynamics, you're seeing we should still continue to use 20% sort.

Sort of the average target level for the company.

Speaker 2: Yes, Mohammed. First of all, sorry, sorry to...

Okay.

First of all sorry, sorry too.

Speaker 2: be like that but we never do forward projections you know that we know each other for a long time okay yeah but what I would like to say is that we have an exceptional

To be like that but we never do for what protections do you know that oh, each other for a long time, okay, but what I would like to say is that.

We have an exceptional.

Speaker 2: cost pressure in raw materials going ahead. And I think this will last. So I was talking with shipping companies and they told me, I know this is a good disclosure or not, but the international freight crisis that increased a lot the raw materials prices will last at least one.

Cost per insured enrollment pdl's going ahead.

And I think this will last so I was talking with shipping companies and they told me.

I know this is a good discussion or not.

Slightly international freight prices.

A lot the enrollment pdl's.

Prices will last at least.

One one and a half a year.

So for next year that you need to move the futures of oil of alumina in sugar and rest is you don't have.

Our futures, but if you if you look at the features of the or the all these features we have beef or barley that are wanting to get to.

The Chicago.

The wheat Chicago prices of the Europe prices. So we will still see further increases so our current level for next year.

We'll see.

Or are you growing up plus 10% aluminium going up plus 20% borrowing going up 25% rest in flowing up 18%.

Speaker 2: and sugar 8%. So, given my answer, I would be happy if we maintain current a victim.

And sugar, 8%, so given my answer.

Be happy if we maintained EBITDA margins, but the pressure is high and I already mentioned to you with our three like its strategy to enhance our revenue management effort. These sometimes it's gradual but maybe we've got tons of data.

Speaker 2: But the pressure is high. And I already mentioned to you what is our three legs strategy. And hence our revenue management effort, these sometimes is gradual, but maybe we need to accelerate up.

Speaker 2: We will continue with the Excelences Institute program and now re-bump it, let's say, or reinforce it by a transformation program. And also we need to keep our balance as a scale that is key for the business and for the margin for our margins. Because the key scale is always a priority in this kind of business.

We will continue with the excellence program and now.

We bump it let's say or reinforced by the task automation program.

And also we need to keep our volumes have to scale that is key for the business and for the margin for our margins because it keeps us scale is always a priority in this kind of busy.

Businesses.

Speaker 2: So Mohamed, I give you the elements and is you deciding how to protect that. Yeah, no, that's great. Thank you very much. This final question on Colombia, I realized the COVID, the plans of changing, like I mean, you know, changes the schedule a little bit. But how far are we from a net income breakeven on that?

Mohammad I gave you the elements and deciding how to protect that.

Yeah, No that's great. Thank you very much just final question on Colombia.

I realize the Colgate plans of chicken like I mean, you know changes the schedule a little bit, but how far RV from a net net income breakeven on that one.

Look we have done.

Speaker 2: Look, we have done, I would say,

I would say.

I don't want to be.

Speaker 2: I don't want to be, but we have done a good progress in Colombia this year. So we are moving yesterday, last year we lost $9 million dollars, and this year, we are going to have a pool with others.

But we have done it.

Progress in Columbia.

Yeah. So we are moving yesterday EBITDA last year, we lost $9 million year to date.

And this year year to date, we are we are.

Speaker 2: We are going to wait the first quarter in order to be a bit 0. And also, the thing, you see the financial report that is also moving in the right direction.

We are going to work with the way the first quarter in order to be EBITDA zero okay.

Also net income Youll see independents, a report that sold for moving in the right direction.

Speaker 2: We will need a couple eggs.

We will need.

A few more months and it will be highly dependent on what I was talking during the previous question on how.

Speaker 3: I, a few more months and it will be highly dependent on what I was talking to you in the previous question on how

Speaker 2: we transfer this cost pressure into revenue management, into prices, also how much savings we do. But we will continue, because the key in Colombia is to continue to build the scale. So we, for example, we are practically matching 2019 volumes in the first nine months.

We transferred these cost pressure.

Revenue management into prices also how much savings, we do but we will continue because the key.

In Colombia is to continue to build the scale. So we for example, we are practically.

Matching 2019 volumes in the lab and in the first nine months, it's still a quite a bit ahead and I think we win we win.

Speaker 2: a quarter ahead and I think we will continue to grow double digit which is very important so it's very important to improve margins and profitability and continue to gain share of course. No, that's great. Thank you very much guys. Okay.

Continued to grow double digit which is very important. So at scale is very important to improve margin and unprofitable and continued to gain share of course.

Mhm.

No that's great. Thank you very much guys.

Okay.

That's correct. Thank you.

I'm, sorry was there any forever.

No problem. Thank you.

Okay. Thank you one moment, we will take our next question.

Speaker 1: Okay, thank you, you're one moment. We'll take our next question.

Okay.

Okay.

Hi, This is Alexander <unk> from Goldman Sachs. Thanks for taking my question and congrats on the results.

Speaker 11: Hi, this is Adriano Falcone from Goldman Sachs. I think for take our question and congrats on the results. So our question concerns the competitive landscape and bearing chilly. Could you please elaborate on your scene, competition, evolving with the traditional channel after the agreement between Amdina and ABI? Thank you.

A question of course, there is the competitive landscape in beer in Chile.

Could you please elaborate hunter seeing competition evolving within the traditional channel absolute agreement between Indiana and Abi. Thank you.

Hello, Thiago <unk>. Thank you quarter works about our our results you have come.

Speaker 2: Hello, Tiago. Nice to see you. Thank you for your work, about our results. Dear competition, continue to be the same as a flat water. And I see the battle scene is more in the brand, in the brand's preference.

Petition continued to be the same as last quarter.

And I think the button seems more in the in the brand and the brand preference.

Speaker 12: I would say we are defending ourselves, reasonable, good, in traditional trade. We have the experience of managing a multi-category business for a long, long time. We are the experts in managing multi-categories, say, in some multi-categories distribution. And we will continue to be...

I would say.

We are defending our so reasonably good in traditional trade we have the experience of managing a multi category business for it for a long long time, we are the experts in managing multi category sales are multi category distribution and we will continue to be the most talented in doing that.

Speaker 2: the most talented in doing that. So I'm not particularly concerned. I have nothing to do with the one to distribute with our non-alcoholic competition fine, but we will defend ourselves as we are doing. Okay?

So I'm not particularly concerned.

I have nothing to do they want to distribute with our nonalcoholic competition spine, but we will defend ourselves up.

Okay.

Okay.

Okay.

Great. Thank you.

Thank you I'll move on to our next question.

Yes.

Okay.

Hi Felipe.

Speaker 13: Hi Felipe, thank you for taking my question and congrats on the results. Most of the questions have been answered but...

Thank you for taking my question and congrats on the results.

Most of my questions have been answered but.

Okay.

It would be.

Please if you can give us some more color on the.

Speaker 13: And this is you can give us some more color on the...

On the opening of your new new.

Speaker 13: On the opening of your new rank plant, which is an important asset of you and...

Ranker plant, which is an important asset a few in <unk>.

Speaker 13: And if you are planning this plan to absorb the more of the future growth or will be a migration of your actual volumes production over there. And if you can give us more, maybe more guidance on any of the impacts or how the ramp up of it will be, it will be very, very helpful.

And if you are planning this plant to absorb the day.

More of the future growth will be a migration.

Erector of volumes production over there and if you can give us more more maybe more guidance.

On any of the impacts or how the ramp up of <unk> will be it will be very very helpful. Thank you.

Yeah.

Okay.

Speaker 3: So can you say your name? I'm not too good in identifying voice.

So we tend to state your name.

Not too good in <unk> voice.

Speaker 13: Yeah, sorry, this is Diego Usman from VTG Pactual.

Yes, sorry, this is diego <unk> from BTG Pactual.

Speaker 3: Diego, nice to hear you. Okay, yeah, we are very happy. Finally, we are ramping up our RENCA plan, which was last week inaugurated by the the the Minister of Economy, the Metropolitan Region Governor and RENCA made.

Well nice to hear you okay.

We are very happy I really we ramp that we are ramping up our <unk> plan, which well last week innovated by the mean the.

The many diminished.

Economy.

The Metropolitan region Governor and.

I think the major okay. Mr Castro.

Speaker 2: Mr. Claudio Castro, the Minister of Economy, Mr. Lucas Palacios and the Metropolitan Region, Mr. Claudio Revo. We are very happy, it's a very environmentally friendly plan.

The minister of economy, Mr. Lucas Palacios.

Net operating region missed that.

Youre right, we had a very happy Easter.

It's a very.

Environmentally friendly plan. This is first of all with a lot of acceptance from the community and we are very happy happy on this plant started with two lines, but the new lines coming.

Speaker 2: first of all, with a lot of acceptance from the community. And we are very happy on this plan. It started with two lines, but the new line is coming.

Speaker 3: We started with a cunning line and a PD line and now a hot three lines coming We have three lines in order to absorb this growth but also changes in the country

We started with accounting line.

The PT line and now we've got the line scan.

So we'll have three lines.

In order to absorb this growth, but also changes in the consumer so we.

Speaker 7: So the plant and the capacity investment is more intended to absorb new trends, so a huge growth in some products such as juices, such as enhanced water, such as sport leaves.

The plant and the capacity investment is more intended to absorb new trends. So a huge growth in in some in some products such as juices.

And hence what that such health.

<unk>.

Speaker 2: So, and replacing of some old lines that we have, especially in CAHM. So, answering your question is more to absorb new growth and new consumer trends. But let me make a point of that in terms of that we, as I answered in previous question, we will keep investing in key projects in Chile and in the region.

So Andrew.

And replacing ourselves some old lines that we had especially in cabinets. So answer to your question is more to absorb new growth and new consumer trends.

Let me make a point of that in terms of that.

So you're answering previous question.

We'll keep investing in key projects in Chile and in the region.

And the and.

Speaker 2: And a special in Chile, this is for us, it was the moment to do it. We believe that many industries and also including our suppliers are invested.

Especially in Chile. This is for US it was the moment to do it.

We believe that many industries.

And also including our suppliers are investing.

But we believe that this is not to give it.

Speaker 2: and it will depend on how the country gets on track for it to continue to happen. And that is everyone's responsibility.

And it will depend on how the country gets on track for it to continue to happen and that is everyone's responsibility, especially the political sector. We are very happy with integration and with the ramp up of our new plant in <unk> and other.

Speaker 2: especially the political sector. We are very happy with the inauguration and with the ramp up of our new plant in Renka and other CapExR countries. Thank you, Diego. Thank you.

Capex okay.

Okay.

Thank you.

Thank you Philippe.

Yeah.

Thank you and we'll move on to our next question.

Well listen it is one of the SBC as soon as I thought about from Jpmorgan. So I just wanted to touch on another issue that you mentioned there and then in the press release.

Speaker 14: Hello, señoras. Buenas dias. This is Ulysses Argoite from JP Morgan. So I just wanted to touch on another issue that you mentioned there in the press release related to those logistic issues on the wine segment for the export business, obviously. So I was wondering if you can comment a little bit on any expectations that you have there, any actions that you can take to mitigate these impacts, any color that you can provide there would be really helpful. Thank you.

Related to those logistic issues from the wine segment for the export business. Obviously, so I was wondering if you can comment a little bit on any expectations that you have there any actions that you can take.

So to mitigate these impacts any any color that you can provide there would be really helpful. Thank you.

Right.

Speaker 3: releases thanks to here about you so yes we have been mentioning things I would say may a completely collapse on international freight to export wine

Well Lisa Thanks to hear about you. So yes, we have been mentioning since I would say no.

Completely collapse on international freight to export wine.

Speaker 2: So it was very tough, especially in the third quarter. However, now we are seeing an instanti-sheets brought the further. We are seeing we are a little bit more of a mystic because also for software, because the reality that can come and turn that, it was a little bit better the logistics to export wine during October .

So it was very tough, especially in the third quarter. However, now we are.

We are seeing an astonishing for opex.

Have seen we added a little bit more optimistic because as of October.

Can't comment on that.

What's a little bit better.

The logistics to export Wang during October.

Speaker 2: But I've mentioned in the previous question, B.

As I mentioned in the previous question.

Shipments are these international freight.

Speaker 3: keep them for this international trade crisis. Good last, there are some experts that said to you and Peter's second semester next year, other keeping companies says more time. So I will be cautious on that, however, in October was better.

A crisis.

Good luck there are some export that said to you in detail.

Second incentive next year other shipping companies.

More time, so I would be cautious on that however in October well.

Beth.

Speaker 14: Okay, perfect, that's great to hear. Thanks for that color and congratulations from the Stronger Solskies.

Okay, perfect that's great to hear thanks.

Thanks for that color and congratulations on the strong results guys.

Okay.

Speaker 1: Thank you. And once again, if you like to ask a question today, may do so by pressing star one. And we'll take our next caller.

Thank you and once again, if you would like to ask a question today you may do so by pressing star one if you will.

Take our next caller.

Thank you.

Yeah.

Speaker 3: Hi guys, this is Sebastian Ramirez from Manchile, many things for presentation. I just got a quick question in regards to the Chilean operation. When we hit the ship to the more premium products, should we think that they cost breakdown in terms of...

Hi, guys. This is Sebastian Ramirez from banks, many things for Tinder.

I just got a quick question in regards to the Chilean operation.

When we see these ships to the more premium products shouldn't we think that.

The breakdown in terms of.

Bowler link cost should grow with this new mix.

Speaker 9: Bollard link cost should grow with this new mix. And how should we think that the impact would be going forward with this kind of new mix that you are getting with a more premium?

How should we think that they impact.

<unk> would be going forward with this kind of in your mix that you are getting with our more premium.

Okay.

Behavior than it was before.

Speaker 3: Nice to hear about you. The premium portfolio has higher margins, so it's more or less protected than the mainstream portfolio. One of the reasons that we are experiencing such margins increases is the higher sales in the immune system.

Okay.

Yes, nice to hear about you.

Yes.

Portfolio.

Higher margin, so, it's more or less protected than maintenance.

Okay great.

One of the reasons I think.

Yeah.

Margin increased despite <unk>.

The cost increase is the higher sales in our country.

Okay.

We have some noise behind you.

Great.

Sorry, and I have been very clear many thanks.

Yeah.

Thank you we'll move on to our last question.

Speaker 1: Thank you. We'll move on to our last question. Yes. Hi. Good morning.

Yes, hi, good morning.

Philippe Thanks.

Thanks for the call.

Q2 questions quick questions.

They can do something about busy from temple's I'm sorry.

Speaker 15: What is the topics that you expect for this year? And you have any projection for the following year, but you can share with us.

Okay.

The Capex that you expect for this year do you have any projections for the following year.

That's my first question.

But yes, I do recognize your voice so thank you anyway for stating your name but in this in this.

Speaker 2: But yeah, I did recognize your voice. So thank you anyway for stating your name, but in this, in this,

Speaker 3: I recognize you Argentinean accent. Okay, so let me hand over to question for topics to Nico. Nico please go ahead. Yeah, I'm terrible.

I recognize you.

Argentine an excellent okay. So let me handover to question for Capex to Nico.

Please go ahead, yes, hi, Cynthia.

Speaker 5: Regarding the topic, we will keep in this thing in line with the topic's projection, about which in our report, that is something around 180,000 million.

Regarding capex, we will keeping investing in line with the.

Capex for injection published in our annual reports and that is.

Something around 180000 million.

Speaker 5: on 2021 and probably the next year we're going to have something similar. This level of traffic is around 50% higher.

In 2021.

And probably the next year, we were going to have something similar.

This level of Capex is around 50% higher.

Speaker 5: than our depreciation. And that is explained and in line with the things that the industry has been saying, with a strong volume growth, obviously we need more capacity.

And our depreciation and that is to explain and in line with the things that Jennifer has been saying.

With a strong volume growth.

Obviously, we need more capacity.

Speaker 15: It's too,ñas to talk a bit about the oiling

Two two.

Got it.

That demand the volume.

Speaker 5: We're going to have that little and the next year.

We and we are going to have that that lateral and effort and the next and then the next year, we're going to have.

Speaker 5: more numbers in our annual report. But that is pretty much in line with the report that we already have. And in line with the Mika Basin, we need the level of volumes that we have in team.

More numbers and in our annual report.

But that is pretty much in line.

There was one that we already know and in line with the new capacity that we need with the level of volumes that we haven't seen.

Yes.

Okay excellent.

Speaker 2: have NE which is zero series the Begin grabs the pressure.

You were breaking up but since have each 108.

Yes.

For the year.

Yes, yes.

So for next year will really be working our projection that will be public certainly with the annual report because as I mentioned.

Speaker 3: So for next year we will be working a projection that will be public certainly with the annual report because as I mentioned...

Speaker 3: We approve a lot of projects, not only for being in place this year, but a lot for being operating from next season, 2022-23. In our annual report we have something around 130. Could be higher. Could be higher because we don't have the final numbers, we are in the budgeting process. Right. Okay.

We approve a lot of projects not only for being in place this year, but a lot.

Being opex.

Operating from next season 'twenty two 'twenty three.

Our annual reporting we have something around 130 could be <unk> could be higher liquidity higher because we don't have the final numbers. We are in the budgeting process right. Okay.

Great.

Thank you very much.

Congratulations.

Strong for SUNS.

Thank you Santiago.

Yes.

Speaker 1: Thank you. And that does conclude our question and answer session today. I would like to turn the conference back over to Felipe for any additional or and or closing remarks.

Thank you.

Does conclude our question and answer session today, I would like to turn the conference back over to Philippe <unk> for any additional or Andrew or closing remarks.

Thank you all for attending this.

Speaker 2: Thank you all for attending this conference call. I hope you will find it useful. During the third quarter of 2021, CCU delivered another positive quarter, outperforming volumes and financial results versus last year and pre-tandemic feedback.

Conference call I hope refinery used to.

During the third quarter of 2021, CCU delivered another positive quarter outperforming volumes and financial results versus last year and pre pandemic figures at the same time, we continue recovering our margins in a competitive and English audio inflationary scenario.

Speaker 3: At the same time, we continue recovering our margins in competitive and inflationary, inflationary scenarios.

Speaker 3: In the coming process, we'll keep executing a strategy with focus on our business scale and profitability.

In the coming quarters, we will keep executing our strategy with focus on our business of scale and profitability.

Speaker 3: the latest through the implementation of revenue management, management initiatives and efficiency.

The late <unk>.

The implementation of revenue management initiatives and efficiencies.

Face challenging external effects from the higher cost of all of PDL.

Speaker 3: to face challenging external effects from a higher cost of productivity.

Speaker 3: trade rates, said wind and inflation. And also, as I mentioned, we will keep investing in the heat projects as we did in the recently upgraded RENCA plan.

They contain great headway.

And inflation.

Also as I mentioned, we will keep investing in key project as we did in the recently inaugurated ranker plant.

Speaker 3: in China and the region especially for

In Chile, and the region, especially for capacity.

Speaker 2: Thank you all for attending this call and have a very good rest of the day. Thank you very much.

Thank you all for attending this call and have a very good rest of the day.

Very much.

Thank you and that does conclude today's teleconference. We do appreciate your participation you may now disconnect.

Speaker 1: Thank you, and that does conclude today's teleconference. We do appreciate your participation. You may not disconnect.

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Yes.

Okay.

Yeah.

Okay.

Yes.

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Yes.

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