Q4 2024 Compania Cervecerias Unidas SA Earnings Call
Okay.
Operator: Good day everyone. Welcome to CCU's fourth quarter 2024 earnings conference call on the 26th of February 2025. Please note that today's call is being recorded.
Speaker Change: Good day, everyone welcome to Ccu's fourth quarter 2024 earnings conference call on the 26 six of February 2025. Please note that today's call is being recorded at this time I would like to turn the conference call over to <unk> <unk> head of Investor Relations. Please go ahead Sir.
Claudio Lazeiras: At this time, I'd like to turn the conference call over to Claudio Lazeiras, the Head of Investor Relations. Please go ahead. Welcome everyone and thank you for attending CCU's 4th quarter 2024 conference. Today with me are Mr. Felipe Dubernet. Chief Financial Officer, Joaquin Trejo, Financial Planning and Investor Relations Manager, and Carolina Burgos, Senior Investor Relations Analyst. You have received a copy of the Company's Consolidated Four-Quarter Earnings Release. Felipe will now review our overall results and we will then move into a Q&A session.
Welcome everyone.
Speaker Change: And thank you for attending Ccu's.
Speaker Change: Our quarter 2020 conference call.
Speaker Change: Today with me are Mr Felipe who admit.
Speaker Change: <unk> financial officer.
Speaker Change: Working today.
Speaker Change: Financial planning and Investor Relations manager and Carolina Senior Investor Relations analyst.
Speaker Change: You have received a copy of the company's consolidated fourth quarter earnings release.
Olivier: Olivier will now review, our overall results and.
Speaker Change: We will then move into Q&A session.
Claudio Lazeiras: As usual, before we begin, please take note of our cautionary statement. Statements made in this call that relate to CCU's future financial results are forward-looking statements which involve known and unknown risks and uncertainties that could cause that our actual performance or results to materially differ. This statement should be taken in conjunction with the additional information about risk and uncertainty set forth in CCU's annual report in Form 20-F filed with the U.S. Security and Exchange Commission and in the annual report submitted to the CMF and available on our website.
Speaker Change: As usual before we begin please take note of our cautionary statements.
Speaker Change: The statements made in this call.
Speaker Change: That relate to Ccu's future financial results are forward looking statements.
Speaker Change: Each in both known and unknown risks and uncertainties certainties that could cause.
Speaker Change: Our actual performance or results to materially differ.
Speaker Change: 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 <unk>.
Speaker Change: Annual report submitted to CMS and available on our website.
Felipe Dubernet: It's my pleasure now to introduce Mr. Felipe Dubernet. Thank you, Claudio, and thank you all for joining us today. Before moving into the quarter, I would mention some highlights of the full year 2020. In 2024, CCU delivered higher financial results versus 2023 after a strong turnaround during the second half. Also, we continue to advance in our strategy in a particularly challenging and volatile business environment. Through the year, we faced a low 20s contraction in the beer and water industries in Argentina and a modest economic growth in Chile that led to flat volumes in the Chile operating fund.
Philippe: My pleasure now to introduce Mr. Philippe <unk>.
Philippe: Thank you Clive and thank you all for joining us today.
Philippe: Before moving into the quarter.
Philippe: Mention some highlights of the full year 2024.
Philippe: 'twenty 'twenty four CCU deliver higher financial results versus 2023 after a strong turnaround during the second half.
Philippe: Also we continued to advance in our strategy in a particularly challenging and volatile business environment.
Philippe: Through the year, we faced a low twenty's contraction in the beta on water industries in Argentina, and a modest economic growth in Chile that led to flat volumes in the Chile operating segment.
Felipe Dubernet: In addition, we experienced cost and expenses pressures coming from the depreciation of our local currencies against the U.S. dollar. In this context, and excluding the non-recurring effect of the sale of a portion of land in Chile in Q2 2024, full-year consolidated EBITDA reached 387,267,000,000 Chilean pesos, increasing 2.1%. when including the non-recurring gain, EBITDA increased 9.6% versus last year. Same time, and also excluding the non-recurring gain, full-year consolidated net income expanded 32.5%. When including the non-recurring gain, net income increased 52.3% versus last year. The strong turnaround in the second half of the year where consolidated EBITDA surged by 27.7% was mainly explained by a solid performance in the quarter 4 in all our operating segments, more than offsetting a challenging first half where we paused a 26.5% decline in EBITDA as of June 2024.
Philippe: In addition, we experienced cost and expenses pressures coming from the depreciation of our local currencies against the U S dollar.
Philippe: In this context and excluding the nonrecurring effect of the sale of a portion of land in Chile in quarter. Two 2020 for full year consolidated EBITDA reached 387002, Kangaroo on 67 million Chilean pesos, increasing two 1% when <unk>.
Philippe: The nonrecurring gain EBITDA increased nine 6% versus last year.
Philippe: At the same time and not excluding the nonrecurring gain full year consolidated net income expanded 32, 5% when including the nonrecurring gain net income increased 52, 3% versus last year.
Philippe: This strong turnaround in the second half of the year were consolidated EBITDA surged by 27, 7% was mainly explained by a solid performance in the quarter all in all our operating segments more than offsetting a challenging for Scott, where we passed a 26 five.
Philippe: Our cent decline in EBITDA.
Philippe: June 2024.
Felipe Dubernet: This upward trend was driven by effective initiatives in revenue management and efficiencies in all our operating segments, enabling us to more than offset the negative impacts in our result from the challenging scenario described above. The initiatives mentioned above were executed under the regional plan Hercules, which we started in 2022 and ended in 2021. been key to align the company under six pillars with the objective of recovering financial results, resulting in positive EBITDA and net income growth. The later, well above inflation in that period, despite an unfavorable external context with devaluation of the currencies and low economic growth in the region.
Philippe: This upward trend was driven by effective initiatives in revenue management and efficiencies in all our operating segments enable enabling us to more than offset the negative impact in our result from the challenging scenario described above.
Philippe: The initiatives mentioned above were executed under the regional plan adequate which we started in 2022 and ended in 2024.
Philippe: Being key to align the company under six pillars with the objective of recovering financial results, resulting in positive EBITDA.
Philippe: Net income growth the late that well above inflation in the period, despite an unfavorable external context with devaluation of the currencies are low economic growth in the region.
Felipe Dubernet: Regarding our business strategy, during the year, CCU continues strengthening its regional footprint. In July 2024, we started consolidating Aguas Dorigen, our water business, with Danone in Argentina, which will continue bringing synergies to our operations in that country. In October 2024, we increased our scale in Paraguay through a partnership with the BRC Group, which includes the PepsiCo license for the production and distribution of beverage, as well as the distribution of snacks. This association, Paraguay, became the second country where the PepsiCo license is part of CCU's brand portfolio, in addition to... At the same time, we continue investing in our brands, achieving a strong brand preference, especially here in Chile, and kept reinforcing our digital transformation to support sales execution and drive operational efficiencies in the future.
Philippe: Right.
Philippe: Regarding our business strategy during the year CCU continued strengthening is regional footprint in July 'twenty 'twenty four we started consolidating our study our water business with Danone in Argentina, which will continue bringing synergies to our operations in <unk>.
Philippe: Country.
Philippe: In October 2024, we increased our skin partway through a partnership with the plc group, which includes the Pepsico license for the production and distribution of beverage as well as the distribution of the snacks with.
Philippe: With these associations Paraguay became the second country was the Pepsico license is part of Ccu's brand portfolio. In addition to Chile.
Philippe: At the same time, we continue investing in our brands, achieving a strong brand preference, especially beginning Chile, and jetblue reinforcing our digital transformation to support sales execution and drive operational efficiencies in the future.
Felipe Dubernet: Finally, we were the first to inaugurate a modern PET recycling plant bottle-to-bottle in Chile named Circular.
Philippe: We were the first to navigate a modern pp recycling plant bottle to bottle in Chile main shipyard.
Felipe Dubernet: Now, I will move into the quarter. In Q4 2024, CCU delivered a solid set of results. Consolidated EDIFTA reached 182,621,000,000 Chilean Pesos, a 65.2% increase. This result was driven by all operating sectors. important to mention, as we mentioned in that moment, that in quarter four, 2023, the application of... IAS 29 from IFRS in Argentina generated a loss of 24,018 million Chilean pesos. in Consolidated Evita versus a gain of 1,095 Chilean Million Pesos in quarter 4-24. Nonetheless, even isolating this mentioned effect due to the hyperinflationary accounting, Consolidated EDIPTA expanded robustly by 34.9%. In terms of quarterly volumes, excluding the inorganic volumes from the consolidation of Aguas de Origen and the association with the BFC Group in Paraguay, volumes were down 0.1% in Q4 2024, fully explained by an international business operating segment which continued to contract versus last year due to Argentina, almost fully offset by an expansion in the Chile operating segment while wine volumes were flat.
Philippe: Now I will move into the quarter.
Philippe: What the report when people before CCU delivered a solid set of results.
Philippe: Consolidated the Beecher EBITDA reached 182600 21 million Chilean pesos is 65, 2% increase. These recite. This result was driven by all operating segments. It is important to mention as we mentioned in.
Philippe: In that moment that in water for 2023 the application of.
Philippe: I a S 29 from FRS in Argentina generated a loss of 24000 18 million Chilean pesos in consolidated EBITDA versus a gain of 1990 5 million pesos in quarter 424.
Philippe: Nonetheless, even isolate team.
Philippe: This mentioned effect due to the Hyperinflationary accounting.
Philippe: Consolidated EBITDA expanded all mostly by 34.9%.
Philippe: In terms of quarterly volumes, excluding the inorganic volumes from the consolidation of our duty and the association with the FC Group in Paraguay volumes were down 0.1% in quarter. Four 2024 fully explained by an international business operating segment, which continued to contract.
Philippe: Versus last year due to Argentina.
Philippe: Almost fully offset by an expansion in the <unk> operating segment, while wind volumes were flat.
Felipe Dubernet: I would like to mention anyway that Argentina continues to improve its scale compared to previous quarters. Consolidated Net Income. reached a gain of 74,153 million Chilean pesos up by 77.7 percent driven by the better operational result and a better non-operating result particularly in Argentina. In terms of our segment, in the Chile operating segment, top line expanded 9.9% as a result of 4.9% increase in average prices and 4.7% higher volume. Average prices were boosted by revenue management efforts, partially compensated by negative mix prices. while volume expanded mainly due to a low comparison base in Q4 2020.
I would like to mention any way that Argentina continued to improve its scale compared to previous quarters.
Philippe: Okay.
Philippe: Consolidated.
Philippe: Consolidated net income.
Philippe: Breached a gain of 74150 3 million Chilean pesos up by 77, 7% driven by debated operate charter shell unabated Nonoperating result, particularly in Argentina.
In terms of our segments in the Chile operating segment topline expanded nine 9% as a result of four 9% increase in our net prices and four 7% higher volumes average prices were boosted by revenue management efforts partially compensate.
Philippe: By negative mix effects, while volume expanded mainly due to a low comparison base in what that for 2020.
Felipe Dubernet: EBITDA expanded 23% and EBITDA margin grew 208 basis points to 19.6%. In the international business operating segment, excluding the inorganic volumes from the consolidation of HADO and AV in Argentina and Paraguay respectively, organic net sales recorded a sharp increase driven by higher organic average prices, which more than offset an 11.5% contraction in organic Higher organic average prices were mostly caused by a low comparison base due to a negative impact on revenues from the sharp Argentinian pesos devaluation against the U.S. dollar in last quarter of last year, and to a lesser extent, revenue management initiatives. Evita more than tripled versus last year, driven by all the jobs.
Philippe: EBITDA expanded 23% and EBITDA margin in Q2 calendar at eight basis points to 19, 6%.
Philippe: In the international business operating segment, excluding inorganic volumes from the consolidation of hurdle.
Philippe: In Argentina, but our respectively organic net sales recorded a sharp increase driven by higher organic average prices, which more than offset an 11, 5% contraction in organic volumes.
Philippe: Higher organic average prices were mostly caused by a low comparison base due to a negative impact on revenues from the TARP.
Philippe: Argentinian peso devaluation against the U S dollar in last quarter of last year.
Philippe: To a lesser extent revenue management initiatives.
Philippe: EBITDA more than tripled versus last year, driven by all of the geographies.
Felipe Dubernet: wine operating segment posted a top-line expansion of 21.4% driven by 21.7% rise in average prices where volumes were flat. Exports expanded during the quarter. being almost fully compensated by the drop in the Argentine domestic market as Chilean domestic volumes were flat. The better average prices were most explained by a favorable comparison base, a weaker Chilean peso, and its favorable impact on export revenues, and positive mix-up. EBITDA posted a 16% growth and EBITDA margin was down 74%. Regarding our main joint venture and associated business in Colombia, volume reached 2.3 million hectolitres in full year 2024, increasing 7.8% and we reached positive EBITDA.
Philippe: Why not breaking segment posted its topline expansion of 21, 4% driven by 'twenty one.
Philippe: 7% rising average prices where volumes were flat.
Philippe: <unk> expanded during the quarter being.
Philippe: Being almost fully compensated by the drop in the Argentine Argentine domestic market Australian domestic volumes were flat.
Philippe: <unk> average prices were most explained by a favorable comparison base a weekend.
Philippe: TTM peso and its February impact on export revenues and positive mix effects.
Philippe: EBITDA posted 16% growth and EBITDA margin was down 74 basis points.
Philippe: Regarding our main joint venture and associate the business.
Philippe: Colombia volume reached $2 3 million Hectoliters in full year 2024, increasing seven 8% and we reached positive.
Operator: Now, I will be glad to answer any questions you may have. Thank you, so we'll now move to the question and answer section. If you'd like to ask a question, please press star 2 on your phone and wait to be prompted. If you're dialed in by the web, you can type your question in the box provided or request to ask a voice question.
Philippe: Now I will be glad to answer any questions you may have.
Philippe: Okay.
Speaker Change: Thank you. So we'll now move to the question and answer section if you'd like to ask a question. Please press star two on your phone and wait to be prompted for Darden by the web you can type. Your question in the box provided a request Wesco voice question, well just wait a moment or two for questions to come in.
Operator: We'll just wait a moment or two for questions to come in.
Fernando Oveira: Okay, so our first question comes from Fernando Oveira from Bank of America. Please go ahead, sir. Your line is now open. Great. Good morning, everyone. Good afternoon there. Thanks for taking my questions. I have two.
Philippe: Okay.
Speaker Change: Okay. So our first question comes from Fernando Olvera from Bank of America. Please go ahead, Sir your line is now open.
Fernando Olvera: Great. Good morning, everyone. Good afternoon there.
Fernando Olvera: Thanks for taking my questions I have two my first question is if you can comment what was the performance.
Fernando Oveira: My first question is, if you can comment, what was the performance in Chile, between premium and mainstream beer? And how much represents premium of your beer volume now? How do you expect the mix to behave this year?
Fernando Olvera: In Chile.
Fernando Olvera: Between premium and mainstream beer and how much represents premium of your beer volume now how do you expect the mix to behave this year.
Felipe Dubernet: And my second question is, how are you thinking about the price elasticity in Chile? Thank you. So, I understood, in your first question, I understood the first part of the question.
Fernando Olvera: And my second question is how are you thinking about the price elasticity in Chile.
Fernando Olvera: Thank you.
Fernando Olvera: Yes.
Fernando Olvera: Yes so.
Fernando Olvera: Understood in your first question I understood. The first part of your question, we have some communication problems in the second part. So let me answer first the first part of your question what is premium on.
Felipe Dubernet: We have some communication problems in the second part. So, let me answer first the first part of your question, what is premium and mainstream. So, how was the mix? This is your first question regarding that. Yes, and basically, what is your outlook for this year? No, in these two categories. Thank you, Felipe. Okay, so I would say between premium and mainstream is rather stable, the mix, in comparing quarter four 24 and quarter four 23. The outlook in Chile, so... You know, Quarter 4, the industry was, I would say, soft, because although we have a mid-single-digit growth in Chile, during the quarter, 4.7% we grew the volumes, it's worth to say that the company's own base of last year, as we mentioned in our press release at that time, due to weather conditions, was a low-comparison base.
Fernando Olvera: Our mainstream.
Fernando Olvera: Uh huh.
Fernando Olvera: So how was the mix. This is your first question regarding that.
Fernando Olvera: And basically what is your outlook for this year.
Fernando Olvera: In these two categories.
Fernando Olvera: Right.
Fernando Olvera: Thank you if I look at I would say between premium and mainstream is rather stable.
Fernando Olvera: In comparing.
Fernando Olvera: For 24 in quarter four 2003.
Fernando Olvera: The outlook in Chile so.
Fernando Olvera: No.
Fernando Olvera: The industry was so I would say soft because although we have a mid single digit growth in Chile.
Fernando Olvera: During the during the quarter.
Fernando Olvera: Four 7% we grew the volumes.
Fernando Olvera: It is worth.
Say.
Fernando Olvera: That the company some base of last year as we mentioned in our press release at that time due to weather conditions.
Felipe Dubernet: So if we exclude that, we could conclude that the industry is rather flat. So I would say soft. What do we expect in the future? And, you know, it's too early to call, because only we have one month, but it was slightly positive, I would say, compared to last year. to the first quarter of last year, but it's too early to call, but it would be a soft industry for sure. I would say the economic growth in Chile is expected to be 2% in the long term. So do not expect, you know, a big jump in the industries.
Fernando Olvera: So it was a low comparison base. So if we exclude that we could conclude that the industry is rather rather rather flat.
Fernando Olvera: So.
Fernando Olvera: I would say a soft what do we expect in the future.
Fernando Olvera: <unk>.
Fernando Olvera: Too early to call because only we have one month, but.
Fernando Olvera: What we.
Fernando Olvera: Slightly positive.
Fernando Olvera: Compared to.
Fernando Olvera: To.
Fernando Olvera: Yes.
Fernando Olvera: To the first quarter of last year, but it's too early to call.
Fernando Olvera: <unk>.
Speaker Change: It would be a soft industry for sure I would say the economic growth in Chile is expected to be 2% in the long term.
Fernando Olvera: So do not expect.
Fernando Olvera: Peak EBITDA.
Fernando Olvera: In the in the in the.
Felipe Dubernet: I would say a similar year in terms of growth of what we experienced, a little bit more growth maybe, but low single-digit growth would be something reasonable.
Fernando Olvera: In the industries.
Fernando Olvera: I would say a <unk>.
Fernando Olvera: <unk> year in terms of Grove, what we experienced.
Fernando Olvera: A little bit more to grow maybe low single digit growth would be.
Fernando Olvera: <unk> reasonable.
Fernando Olvera: Okay.
Fernando Olvera: Okay.
Felipe Dubernet: And regarding the second question, how are you thinking about price elasticity? Think about that soft volume. Yeah, yeah, you know, uh, um... At the end of the day, if we look at the overall quarter, excuse me, the overall Chile operating segment We grew the volumes, and volumes are, let's say, running at, you know, a very similar rate, you know. So, I would say that the price elasticity, of course, we aim, we increase prices by 4.9%. This is in part, as we have discussed, in many... phone calls, that we need to recover our margins due to this big jump after the pandemics of the input costs, because we still have a lower gross margin compared to 2019, for example, that is the year previous to the pandemic.
Fernando Olvera: And regarding the second question.
Fernando Olvera: Or are you thinking about price elasticity.
Fernando Olvera: You don't care about that soft volume.
Fernando Olvera: Yeah.
Fernando Olvera: No.
Fernando Olvera: At the end of the day, if you look at the overall quite a bit.
Speaker Change: Excuse me the overall, Chile operating segment.
Fernando Olvera: We grew the volumes and volumes.
Speaker Change: Let's say.
Fernando Olvera: Are running up.
Fernando Olvera: No.
Fernando Olvera: Yeah.
Fernando Olvera: You know a very similar rate.
Fernando Olvera: So I would say that the price elasticity.
Fernando Olvera: Of course, we aim we increased prices by four 9%. This is in part as we kept discussing many.
Fernando Olvera: In many.
Fernando Olvera: Phone calls that we need to recover our margins due to this big jump after the pandemics of the input costs.
Fernando Olvera: Because we still got a.
Fernando Olvera: Lower gross margin compared to 2019 for example that is the year.
Fernando Olvera: As to the permit.
Felipe Dubernet: So we need to continue to do revenue management efforts. And price elasticity, I think, you know, there is something, but at the end, it's exactly the same we have. So remember, in 2019, for example, we used to sell in the last quarter, 6 million hectoliters. just as a data, you know. And in the 2024 last quarter, we sold 6.6 million hectoliters, while we have increased the prices in line with inflation. So it's not the same price. So, there is a... So, we could increase price while increasing the industry. Because, if you see the numbers, we are against 2019.
Fernando Olvera: So.
Fernando Olvera: We need to continue to do revenue management efforts.
Fernando Olvera: On price elasticity.
Fernando Olvera: I think.
Fernando Olvera: You know there is some thing.
Fernando Olvera: But.
Fernando Olvera: But at the end.
Fernando Olvera: Exactly the same we kept so remember in 2019 for example, we used to sell in in the last quarter 6 million Hectoliters.
Fernando Olvera: Yes.
Fernando Olvera: The data.
Fernando Olvera: And in the.
Fernando Olvera: In the <unk>.
Fernando Olvera: 2024 last quarter, we sold six 6 million ex told us while we have increased the prices.
Fernando Olvera: In line with inflation, so it's not the same price.
Fernando Olvera: So.
Fernando Olvera: That is.
Fernando Olvera: Yes.
Fernando Olvera: So we could increase price, while increasing the industry because if you see the numbers.
Fernando Olvera: Yeah.
Fernando Olvera: We are against 2019.
Fernando Oveira: 15% above in terms of volumes. So the first pillar of Hercules was to maintain the scale. And still, we are more than maintaining the scale, despite the prices increases. These prices increases were not enough to compensate the input cost. But, we have increased the prices while increasing the volumes. Great. Thank you, Felipe. Thank you.
Fernando Olvera: 15% above in terms of volumes.
Fernando Olvera: The first pillar of Hercules was to maintain the escape and still we are more than maintaining escape.
Fernando Olvera: Despite the price increases these prices increases were not enough to compensate.
Okay, but.
Fernando Olvera: We have increased the prices while increasing their volumes.
Fernando Olvera: Okay.
Fernando Olvera: Great.
Fernando Olvera: Thank you Philippe.
Ewald Stark: Our next question comes from Ewald Stark from Vice Inversiones. Please go ahead, sir. Your line is open. Hello, thanks for taking my question. I have a question regarding Argentina. So far in 2025, how have you seen Argentina performing and what are your expectations going forward? Thanks.
Speaker Change: Thank you. Our next question comes from <unk> from <unk>. Please go ahead, Sir your line is open.
Speaker Change: Hello, Thanks for sneaking me.
Fernando Olvera: Christian.
Fernando Olvera: I have a question regarding Argentina.
Fernando Olvera: So far in 2025.
Fernando Olvera: Have you seen or simply not performing.
Fernando Olvera: What are your expectations going forward.
Fernando Olvera: Okay.
Felipe Dubernet: Thank you, Eval, for your question regarding Argentina. In Argentina, after the big decrease in volumes occurred in quarter 2 and quarter 3, where we saw a high 20s decrease in volumes, between 25 to 28% decrease in volumes compared to the same quarter of the previous year. In quarter 4 we saw an improvement, so we decreased our volumes in a much lesser extent. So we saw a gradual improvement in Argentina. just to give you a flavor on that. This is seasonally-adjusted voting. In quarter 1.24, our seasonally adjusted volumes, this is not including the inorganic volumes of Ado, were 5.8 million hectoliters.
Fernando Olvera: Thank you <unk> for your question regarding Argentina.
Fernando Olvera: In Argentina. After you know the big the big decrease in volumes for cure in a quieter to uncollectible III.
Fernando Olvera: Where we saw.
Fernando Olvera: Hi, <unk> this decrease in volumes between 25% to 28% decrease in volumes.
Fernando Olvera: The second quarter of the previous year.
Fernando Olvera: In quarter four we saw an improvement so we were we decreased our volumes.
Fernando Olvera: In a much lesser extent.
Fernando Olvera: The volumes.
Fernando Olvera: So.
Fernando Olvera: So we saw gradual improvements in.
Fernando Olvera: In Argentina.
Fernando Olvera: Just to give you a flavor on that.
Fernando Olvera: This is.
Fernando Olvera: Seasonally adjusted volumes.
Fernando Olvera: In quarter 124 hour seasonally.
Fernando Olvera: Adjusted volume this is not including the inorganic volume so Paolo.
Fernando Olvera: Were five 8 million hectoliters so in quarter four.
Felipe Dubernet: So in quarter four, it was 5.6. So we haven't yet recovered the quarter one volume. However, in quarter two, which was the bottom, was 5.2. So, we continue to see some improvement in January.
Fernando Olvera: It was five six so we haven't yet to recover to the quarter one volume.
Fernando Olvera: However in quarter, two which was the bottom was five two.
Fernando Olvera: So we continue to see some improvement in January.
Felipe Dubernet: But as I like to mention, it's too early to call. But we think it would gradually recover a higher scale Argentina.
Fernando Olvera: I should like to mention is too early to call, but we think it will.
Fernando Olvera: Absolutely.
Fernando Olvera: Recover.
Fernando Olvera: A highlight of scale.
Felipe Dubernet: Would Argentina recover the scale we had in 2023? No. But certainly, the industry, as inflation is more control. and us, it is projected a higher economic growth. should continue to recover in the way to recover the scale we had previous to the macro adjustment in Adelante. Okay, perfect.
Argentina would Argentina recovered the scale, we've got in 2023, no, but certainly we.
Fernando Olvera: The industry US you know.
Fernando Olvera: Inflation is more control.
Fernando Olvera: And it.
Fernando Olvera: It is protected.
Fernando Olvera: Okay.
Fernando Olvera: Economic growth.
Fernando Olvera: Should.
Fernando Olvera: Should continue to recover in the way to recover the scale, we had previous to the macro adjustment in <unk>.
Felipe Dubernet: Do you have any sense about when 2023 volumes will be achieved going forward, maybe in 2026, 2027? It's difficult to predict, you know. I would say maybe, but you mentioned exactly what could be reasonable between two to three years. It would depend on many factors, because in Argentina you have still many macro-challenges.
Fernando Olvera: Okay perfect.
Speaker Change: Do you have any sense.
Fernando Olvera: Route.
Fernando Olvera: Quinn.
Fernando Olvera: 2020, threep volumes could be achieved going forward, maybe in 2026 2027.
Fernando Olvera: Okay.
Fernando Olvera: It's difficult to predict.
Fernando Olvera: I would say maybe.
Fernando Olvera: But you mentioned exactly what what could be reasonable between two to three years. It will depend on many factors because in Argentina.
Felipe Dubernet: Would the government release the CEPO at the end of the day? So... You know, we are in a good path, with sequential improvements, I would like to say. But to predict, you know, when we would recover the scale in Argentina, because at the end, Argentina today manages a completely different micro and macroeconomic reality.
Fernando Olvera: The many macro challenges.
Fernando Olvera: The government released a staple at the end of the day.
Fernando Olvera: So.
Fernando Olvera: You know.
Fernando Olvera: We are adding up.
Fernando Olvera: In the in the with.
Fernando Olvera: With sequential improvements like two two.
Fernando Olvera: To say but to predict.
Sure.
Fernando Olvera: When we would recover to scaling Argentina, because at the end, Argentina today manage a completely different.
Fernando Olvera: Micro and macro economic reality.
Felipe Dubernet: You know, it's a country that maybe, the first question you may ask me, or we may think, is when hyperinflation would end, for accounting purposes, you know. Because, yeah, we saw very good results in inflation, with improvements. But, you know, salaries need to recover, employment need to recover, so the macros need to recover.
Fernando Olvera: It is a country that may be.
Fernando Olvera: The first question you May ask me or we May we may see is when hyper inflation.
Fernando Olvera: We'll then in accounting for accounting purposes.
Fernando Olvera: Because yes, we saw a.
Fernando Olvera: Very good results in inflation with improvements.
Fernando Olvera: But salaries need to recover employment need to recover so the macro sneak to recover and then we answered and then we could answer the question regarding when.
Operator: And then we could answer the question regarding when would we recover the scale in Argentina. But we are in the path. Quarter 4 results show that. Early January results show that we continue with the sequential improvement that we are saying that is happening since Quarter 3. Quarter 3 more moderate, Quarter 4 better, and we expect Quarter 1 to be a little bit better and continue to recover the scale. Okay, perfect. Thanks. Have a nice day. Okay, thank you. Just a reminder, if you'd like to ask a question, please press star 2 on your phone and wait to be prompted.
Fernando Olvera: Would be recovered this scale in Argentina, but we are in the past quarter. Four results showed up early January results show that we continue with the sequential improvement that we are saying that is happening since quarter three.
Fernando Olvera: The three more moderate quarter for bad debt, and we expect quarter, one to be a little bit better and continue to recover.
Fernando Olvera: The escape.
Speaker Change: Okay. Thanks.
Speaker Change: Okay. Thank you.
Speaker Change: As a reminder, if you'd like to ask a question. Please press star two and your phone and wait to be prompted if you're dialed in via the web you can type. Your question in the box provided our request Wesco voice question, we'll just wait a moment or two for questions come in.
Operator: And if you're dialed in by the web, you can type your question in the box provided or request to ask a voice question. We'll just wait a moment or two for questions.
Martin Zetsch: So we have a question from Martin Zetsch from Fundamenta Capital. Should we expect margin recovery during 2025 and 2026? Would that recovery come on the back of price increases going ahead of cost inflation?
Speaker Change: So we have a question from Martin <unk> from fundamental capital.
Speaker Change: Should we expect margin recovery during 2025, and 2026 would that recovery come on the back of price increases going ahead of cost inflation.
Felipe Dubernet: Thank you. Yeah, Thank you, Martín, for the question. At the end, the last quarter results are encouraging, especially in the case of Chile. As you compare, we recovered our margin path. So, for example, in 2024, we have exactly the same margin as we had in 2021, when we had an extremely high volume. In general terms, it's a tough scenario, it's very volatile, so it would depend a lot on external factors, especially the exchange rate. So, if you ask me that question at the beginning of the year with the Chilean Pesos at 1,000 Pesos per U.S.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Yes. Thank you Martin for the question yes.
At the end we are.
Speaker Change: So the last quarter results are encouraging, especially.
Speaker Change: Indicate.
Speaker Change: Awesome.
Speaker Change: As you compare we.
Speaker Change: We recovered our margin path. So for example in 2024, we have exactly the same margin as we had in 2021, when we had an X.
Speaker Change: <unk> hi.
Speaker Change: Hi.
Speaker Change: Hi, Paul.
Speaker Change: In general terms.
Speaker Change: That scenario is what it is variable and volatile so it would depend a lot on external factors, especially the exchange rate.
Speaker Change: So if you ask me that question at the beginning of the year with the Chilean peso the south.
Speaker Change: Baird.
Felipe Dubernet: Dollar, it would be very difficult to improve EBITDA much. But we will continue our revenue management effort, as well as our efficiencies effort, in order to show sequential improvement in margins. These are key. As you mentioned in your question, revenue management is key. Not only increasing prices, but also Rationalizing promotions is key in that sense so certainly the improvement of margin will not come from volumes, so it should come from revenue management. but also from a fish. But we should be seeing an improvement. And this I'm talking regarding In the case of Argentina, if as far as we, as I mentioned in the previous question, we continue with this sequential improvement, we should be, we should recover margin surplus.
Speaker Change: As Hudson peso U S dollar would be very difficult to.
Speaker Change: To improve EBITDA margins.
Speaker Change: But we will continue our revenue management efforts as well as our efficiency efforts in order to show sequential improvement in margins. These are the key.
Speaker Change: As you mentioned in your question revenue management is key not only increasing prices, but also.
Speaker Change: Rationalizing promotions is key.
Speaker Change: In that sense.
Speaker Change: So certainly the improvement on margin will not come.
Speaker Change: From volumes so it should come from.
Speaker Change: Revenue management.
Speaker Change: Also from efficiencies, but we should be seeing an improvement at least I'm talking.
Speaker Change: Regarding Qi <unk>.
Speaker Change: In the case of Argentina.
Speaker Change: If.
Speaker Change: We as I mentioned in the previous question, we continue with the sequential improvement.
Speaker Change: We should be.
Speaker Change: Sure.
Speaker Change: We should recover.
Speaker Change: Margin setback.
Felipe Dubernet: Okay, thank you.
Fernando Oveira: It looks like we have a follow-up question from Fernando Zera from Bank of America.
Speaker Change: Okay. Thank you it looks like we have a follow up question from Fernando is that up from Bank of America. Your line is now open. Please go ahead.
Fernando Oveira: Your line is now open, please go ahead. Hello, guys. Thank you for taking my question again.
Fernando Olvera: Hi, Hello, guys. Thank you for taking my question again.
Felipe Dubernet: Maybe if you can comment about the wine division. I mean, your volume is still far from the peak, Richard, in 2021. So how do you expect volume to behave this year? And what is your outlook on export and the corresponding domestic markets?
Speaker Change: And maybe.
Fernando Olvera: If you can comment about the wine division now.
Fernando Olvera: I mean, your volume is still far from the big Richard in 2021, So how do you expect volume to behavior here and what is your outlook on export.
The corresponding domestic markets.
Felipe Dubernet: And also, if you can comment about Colombia, about volumes in Colombia, how are you seeing the behavior this year, given the solid growth that we saw in 2024? Thank you.
Fernando Olvera: And also if you can comment about about Colombia, how about volumes in Colombia, how are you seeing the behavior. This year given the solid growth that we saw in 2024.
Fernando Olvera: Yes.
Felipe Dubernet: Okay, regarding the wine division, I would maybe divide your question in three answers because we operate in different markets. So, first of all, exports. Exports, as we haven't yet recovered the scale we had previous to the pandemic. We are below the 2019 volumes by 13% in exports. 2024 was the first step in terms of recovering that as we grew 4%, 3.9%. We think we will continue to recover, especially by the implementation of our commercial offices in China, the U.S., and the U.K. This initiative certainly will improve our execution in these three key markets. along with the recovery of other markets such as Korea.
Fernando Olvera: Okay.
Fernando Olvera: Okay regarding the wind division I would.
Fernando Olvera: Maybe divide.
Fernando Olvera: Your question three answers because we operate in.
Fernando Olvera: Different markets. So first of all exports exports as we haven't yet recover the scale, we had previous to the fund Debbie.
Fernando Olvera: We are below.
Fernando Olvera: The.
Fernando Olvera: 2019 volumes by 13% in exports from TV.
Fernando Olvera: 2024 was the first step in terms of recovering that as we grew at 4% three 9%.
Fernando Olvera: SBA is moderate we think we will continue to recover especially by the implementation of.
Fernando Olvera: Our commanders shallow.
Fernando Olvera: Offices in China U S and UK. These initiatives certainly will improve our execution in these three key.
Fernando Olvera: Key markets.
Fernando Olvera: Along with the recovery of other markets such as Korea.
Felipe Dubernet: So, in general terms, we should be recovering, growing this year and in the way to recover this market. It's tough, it's a very competitive market. You know, we have experienced this stocking in 2023 of all of our clients and going forward 2024 show growth, but we are still far from recovering the we had previous to the pandemic.
Fernando Olvera: So in general terms.
Fernando Olvera: We should be recovering.
Fernando Olvera: Knowing this year.
Fernando Olvera: And in the way to recover these market staff is a very competitive market.
Fernando Olvera: You know we have experienced stocking in 2023 of all of our clients and going forward.
Fernando Olvera: 24 showed growth.
Fernando Olvera: But we need to.
Fernando Olvera: But we ought to be fired from recovering the scale we've got.
Previous to the update.
Felipe Dubernet: So, another important level is innovation. Innovation is key in a category that globally doesn't grow. So, innovation Jumping now to Chile Domestic, in that case it's the opposite to the export market because we have a higher scale than previous to the pandemic, so we have preserved the scale despite an improvement in margins as we have increased prices. But in that sense, this is a very good that we are in very good shape, we are the market leaders and innovation has been key in that.
Fernando Olvera: So another important lever lever is innovation innovation scheme in a category that globally duffin grows so innovation is key.
Fernando Olvera: Jumping now to Chile domestic in that case is the opposite.
Fernando Olvera: Export markets, because we have a higher scale than previous to the pandemic. So help preserve escape despite an.
Fernando Olvera: An improvement in margins as we have.
Fernando Olvera: Increased prices so.
Fernando Olvera: But in that sense, we are.
Fernando Olvera: A very good business that we are in very good shape, we are the market leaders.
Fernando Olvera: Yes.
Fernando Olvera: Innovation has been key in that.
Felipe Dubernet: Argentina suffering from what's happening in Argentina in terms of volume. This year we suffered in the domestic Argentinian market in 2024. So overall the perspective is growing exports, maintaining our leading position in Chile, but essentially the recovery of export volume is key going forward.
Fernando Olvera: Argentina suffering from.
Fernando Olvera: What happened in Argentina in terms of volume of.
Fernando Olvera: This year we.
Fernando Olvera: We suffered in the domestic Argentinian market in 2024.
Fernando Olvera: So overall the perspective is growing exports.
Fernando Olvera: Maintaining our leading position in Chile.
Fernando Olvera: So.
Fernando Olvera: But.
Fernando Olvera: Essentially the recovery of exports volumes ski going forward okay.
Fernando Olvera: Yes.
Felipe Dubernet: Excellent.
Fernando Olvera: Excellent.
Felipe Dubernet: And regarding Colombia... Regarding Colombia, we grew high single-digit. Gaming share with an excellent performance of Andina Light, also an excellent performance of Tecate, there is still a job to be done in our execution. The team in Colombia is working hard, also with our partner, Postobon, in improving our, especially our sales execution, and also while increasing our brand preference there. But we are very happy about the performance of Andina Lite. Okay, so you expect the good performance to continue? And as I mentioned, we reached positive EBITDA, which is very important, to continue to invest behind the brand.
Fernando Olvera: Okay.
Fernando Olvera: And regarding Colombia.
Fernando Olvera: Regarding Colombia, we give you high single digit gain.
Fernando Olvera: Gaining share.
Fernando Olvera: With an excellent performance of <unk>.
Fernando Olvera: Also an excellent performance.
Speaker Change: Pick up.
Speaker Change: This is Steve jobs to be done in our execution.
Speaker Change: The team in Colombia is working hard also with our partner of the bond and improving our especially our what.
Speaker Change: <unk> execution.
So while increasing.
Speaker Change: Our brand preference there.
Speaker Change: But we are very happy about the performance of <unk>.
Speaker Change: Okay, So you're going to shove you expect the good performance to continue.
Speaker Change: And as I mentioned.
Speaker Change: We reached a positive EBITDA, which is very important to continue to invest behind the brands.
Felipe Dubernet: Okay. Oh, perfect.
Speaker Change: Okay.
Felipe Dubernet: And just, uh... a quick one.
Speaker Change: Perfect.
Speaker Change: And just a.
Speaker Change: I have a quick wins.
Felipe Dubernet: About the massive blackout from yesterday in Chile, I mean, I was just wondering if that blackout affected in some way your operation, no? if it was highly affected or not. no not significantly so first of all uh the only we lost You know, one shift of production, because production, you don't have backups for the full production, only for the essential, for example, to keep the beer in the fermentation tanks, you have backups. All the distribution is not a heavy user of electricity, so you have full backups. So, we completely deliver our customer orders without any disruption.
Speaker Change: About the about the massive blackout from yesterday in Chile.
Speaker Change: I was just wondering if is that lockout.
Speaker Change: Affecting some way your operation.
Speaker Change: If it was highly affected or not.
Speaker Change: No not significantly so first of all.
Speaker Change: The only we lost.
Speaker Change: You know one chip production because production you don't have backups for the full production only for the essential for example to keep the year in the in the fundamental patents.
Speaker Change: You cover.
Speaker Change: Backups.
Speaker Change: All the distribution.
Speaker Change: It's not a heavy user of electricity. So you've got full backup so we completely believe in our our customer orders without any.
Felipe Dubernet: We lost one shift of production, it's not significantly, as we could extend some shift going forward and completely recover this shift that we lost. but our contingency plans work perfectly in the IT side, in our data centers and also in the distribution to completely deliver the products to our clients.
Speaker Change: Disruption, we lost one shift of production is not significantly.
Speaker Change: We could.
Speaker Change: Extend some cheap going forward wireline completely recover so cheap that we.
Speaker Change: We lost.
Speaker Change: Our contingency plans work perfectly in the IP side in our data centers and also in the distribution to completely deliver the products to our guidance.
Felipe Dubernet: Great.
Felipe Dubernet: Thank you, Felipe.
Speaker Change: Great.
Speaker Change: Thank you Felipe.
Operator: Okay, thank you.
Constanza González: Our next question comes from Constanza Gonzalez from Quest Capital. Your line is now open, please go ahead. Good afternoon, Felipe and team. Thank you for taking my question. I have two. The first one regarding CAPEX. What is the CAPEX that you are expecting for this year? And I appreciate if you can make the separation between investment and maintenance. And the second one is just regarding CAPEX II. Do you have any target regarding the VIDDA that you intend to invest in the future?
Speaker Change: Okay. Thank you. Our next question comes from constant cycle in <unk> from <unk> capital. Your line is now open. Please go ahead.
The Jackson: The Jackson.
The Jackson: Sandeep and team. Thank you for taking my question.
The Jackson: I have two.
The Jackson: First one regarding capex.
The Jackson: The Capex that you are expecting.
The Jackson: Yes.
The Jackson: If we say if you're counting.
The Jackson: And then the spring <unk>.
The Jackson: <unk>.
The Jackson: And the second one is is it really type of topic.
The Jackson: Do you have.
Speaker Change: Annie <unk>.
The Jackson: Yes.
The Jackson: That you are canceling.
The Jackson: Thanks Keith.
Felipe Dubernet: Thank you.
The Jackson: Thank you.
The Jackson: Hello.
The Jackson: Okay.
Felipe Dubernet: Hello, Constanza. Thank you for your question regarding CAPEX. Yeah, what we can say is that CAPEX against depreciation would be going forward a little bit above inflation, above depreciation. Our CAPEX would be a little bit above depreciation, but much lower of what we saw in previous year, let's say 2019-22, where it was a period of big expansion in terms of volume capacity. So we moved from between 1.4 on average, 1.3 to 1.7, where it was the peak in 2022. We are moving to ranges between 1.1 and 1.2 going forward. So because, as I mentioned, we saw a soft industry at least in 2025 and maybe in two years, as I mentioned, we need to recover the scale in Argentina.
Speaker Change: Hello Constanza. Thank you for your question regarding regarding Capex.
The Jackson: Yes, we what we can say is that the cap.
Speaker Change: Capex against depreciation would be.
Speaker Change: Going forward, a little bit above inflation above above depreciation our capex would be a little bit above.
Speaker Change: Above depreciation.
Speaker Change: But much lower of what we saw in previous year, let's say.
Speaker Change: 2019 'twenty two.
Speaker Change: Period of peak.
Speaker Change: Spansion in terms of volume capacity.
Speaker Change: We moved from.
Speaker Change: One point between one.
Speaker Change: On average one three to one.
Speaker Change: Seven four was the peak in therapy in 'twenty two.
We are moving to range between.
Speaker Change: Between one one and one two.
Speaker Change: Going forward.
Speaker Change: Because as I mentioned, we sold.
Soft industry at least 25 and 25 and maybe.
Speaker Change: In two years, we need to risk as I mentioned, we need to recover the scale in Argentina. So we saw a more moderate capex going forward.
Felipe Dubernet: So we saw a more moderate CAPEX going forward. So CAPEX as percentage of sales were in ranges between 7% to 7.5% on average, 2019-20, 2023-2025 we saw something around 5.5%.
Speaker Change: So capex, especially that of sites were in ranges.
Speaker Change: Seven 7% to seven 5% on average 2019, 'twenty two 'twenty three 'twenty five we saw something around five 5%.
Felipe Dubernet: That's for topics. Could you repeat your second part of the question? Of course, do you have any target regarding CAPEX versus EBITDA? or it's not a measure that you follow? No, the metrics I mentioned are the metrics we use. You know, CAPEX as a percentage of net sales. As I mentioned, we don't have a... Because capex, you need to be flexible enough. If we have a jump in industries, you need to invest in capacity. Main capex, you know, the mix of capex now is moving to efficiencies, is moving to regulation. As I mentioned, a big jump in capex last year was due to the construction of Circular, which is a plant to recycle PET bottles.
Speaker Change: Thus that's for Capex.
Speaker Change: Could you repeat your question second part of your question.
Speaker Change: Do you have any any target regarding topics nurses.
Speaker Change: You bet.
Speaker Change: Or if not a nation that you follow.
Speaker Change: No.
Speaker Change: The metrics I mentioned are the metrics we use capex.
Speaker Change: As a percentage of net sales.
Speaker Change: As I mentioned, we don't have.
Speaker Change: Because copper unit to be flexible enough. If we have a dumping industries you need to invest in capacity main capex you know the mix of Capex that was moving to efficiencies is moving to regulation as I mentioned, a big jump in Capex last year was due to the construction of Sip lab, which is a plant to recycle.
Felipe Dubernet: Okay, so it's more linked to environmental and efficiencies rather than capacity. So I think our level of capex should be in the average of the industry. What we have seen is between 5% to 8%, depending on what are the needs. But there is no specific, but I think this would be the level of the capex that's a little bit above inflation, between 1.2 times... by Times Depreciation, excuse me, not inflation, depreciation.
Speaker Change: The ped bottles, okay. So it's more a linkage to environmental and efficiencies rather than that.
Speaker Change: So I think our level of Capex should be evidence of the industry. What we have seen is between 5% to 8% depending on what are the needs but.
But there is no specific but I think this would be the level of the capex thats, a little bit above inflation between.
Speaker Change: One <unk>.
Speaker Change: Alright, thanks, depreciation schedules nothing patient negotiation.
Felipe Dubernet: Thank you, Felipe. I have another question. Regarding net financial debt over EBITDA, are you evaluating some rate in the next year, or are you comfortable with your current levels? Yeah, in general terms, we are within the range, we don't have a public target on that, but I think when we compare with the industry, comparing with other actors, I think we have a reasonable level as far as we kept our investment grade, which is key. That's important for us, we still are keeping our investment grade level, we need to be in that range. As I mentioned, we have maybe less capex in the next three years, because we are moving from 1.5 times inflation to 1.2 times depreciation.
Speaker Change: Thank you Filippo.
Speaker Change: I have another question.
Speaker Change: Or is that net financial.
Speaker Change: Bob.
Speaker Change: Are you are you evaluating any common range.
Speaker Change: In the next year.
Speaker Change: Are you comfortable with.
Right.
Speaker Change: Correct.
Speaker Change: Yeah in general terms, we are within the range, we don't have a target on that.
Speaker Change: Thank you Sir.
Speaker Change: When we compare with the industry.
Speaker Change: Comparing with other airports I think we have a reasonable.
Speaker Change: Sure.
Speaker Change: Level of spot us, we keep we kept our investment grade which is key.
Speaker Change: That's important for US we still are keeping our.
Speaker Change: Our investment grade level.
Speaker Change: We need to be in the in the in that rate.
Speaker Change: As I mentioned, we have maybe less capex in the next three years, because we are moving from one five times inflation to one two times.
Felipe Dubernet: Again, I said inflation, depreciation, or moving from above 7 percent, I'm not saying capex, this indicator will continue to improve. In fact, in the last quarter, we moved from net financial debt to debt from two times to 1.8, so we are in the good path, but it's key for us to serving our investment grade.
Speaker Change: Excuse me depreciation again, I said inflation depreciation.
Speaker Change: Or moving from.
Above 7%, especially on the Capex.
Speaker Change: This this is Nicky.
Speaker Change: Nicky.
Speaker Change: We continue to improve in fact in the last quarter, we move.
Speaker Change: We move.
Speaker Change: We move from net financial debt to EBITDA from <unk>.
Speaker Change: 2.2 times two times two.
Speaker Change: Yes.
One.
Speaker Change: One eight.
Speaker Change: We are in the in the good spot, but if keep water decitabine eyewear.
Speaker Change: Investment grade.
Felipe Dubernet: Thank you so much for your answers. Okay, thank you.
Speaker Change: Thank you so much for your answers.
Speaker Change: Okay. Thank you.
Alvaro Garcia: Our next question is from Alvaro Garcia from VTG Pactual. Can I ask about Chile's cost inflation outlook specifically and your outlook on how this might impact the rationality of pricing in Chile over the next year? Thank you.
Speaker Change: Our next question is from Alvaro Garcia from BTG Pactual.
Alvaro Garcia: Can I ask about Chile cost inflation outlook, specifically and your outlook on how this might impact the rationality of pricing in Chile over the next year. Thank you.
Speaker Change: Okay.
Felipe Dubernet: Okay, Alvaro, thank you for your question. Regarding cost inflation, as I mentioned in the previous question, it's very volatile, because it's very different, this business, with a thousand pesos per dollar exchange rate. It's very different than 940. These are 60 Chilean pesos, and you know, it's 1% of the valuation. It's a lot of money in our P&L that we need to compensate with efficiencies or with prices. Because, as I mentioned, we will not have great news from volume. So at the end, that's key for us. If the dollar going forward is maintained in a range of 940.
Speaker Change: Okay, Yes. Thank you for your question.
Speaker Change: Regarding cost inflation as I mentioned in the previous question is very volatile because it's very different this business with.
Speaker Change: A cell cymbalta.
Speaker Change: Samsung pesos per dollar exchange rate.
Speaker Change: It's very different.
Speaker Change: 946.
Speaker Change: 60.
Speaker Change: Chilean pesos and you know each 1% of the evaluation is a lot of money in our P&L that we need to compensate.
Speaker Change: With efficiencies all week.
Speaker Change: Bryce.
Speaker Change: Because as I mentioned.
Speaker Change: We'll not have.
Speaker Change: Great news from from volumes so.
Speaker Change: And.
Speaker Change: That's key for us.
Speaker Change: The dollar.
Speaker Change: Going forward is maintained in a range of 940.
Felipe Dubernet: Every price increase we do, at least in line with inflation, would be good news in terms of overall market. And this is the aim, you know, usually in the long term, CCU is aiming to increase price in line with. Our ability to increase prices would depend on several factors, and one of the factors is competition, of course. But more than thinking about the competition, we need to think about ourselves, and this is what is key, and it was a big pillar in Hercules and continues to be a very important KPI for us, is brand health.
Speaker Change: Every price increase we do at least in line with inflation.
Speaker Change: Would be a good news in terms of overall market.
Speaker Change:
Speaker Change: This is <unk>.
Speaker Change: Usually in the long term CCU.
Speaker Change: Is aiming to increase price in line with inflation.
Speaker Change: Our ability to increase prices would depend in several factors and one of the factors is.
Speaker Change: <unk> of course, but more than thinking about the competition, we need to think about our salt and.
Speaker Change: What is key and it was a big pillar inadequacies and continue to be.
Speaker Change: Very important kpis for us is branches.
Felipe Dubernet: The stronger our brands are, the more our brands are in the heart of the consumer, the better price we can get for our brands. If the competition does promotions or, you know, discounts, we need to rely on our brand equity in order to sell, you know, at better prices. Of course, it's key, as I mentioned, the volatility in the markets. But if we have a scenario of 940, I would say it is reasonable to increase the prices in line with inflation or a little bit above inflation.
Speaker Change: Stronger our plans are.
Speaker Change: The more our brands, having the health of the consumer demand that we can do better price, we can get for our brands.
Speaker Change: Even.
Speaker Change: If the competition, thus promotions or you know discounts and.
Speaker Change: We need to rely in our.
Speaker Change: Brand equity in order to.
Speaker Change: To sell.
Speaker Change: Better prices of course.
<unk> is key as I mentioned.
Speaker Change: The volatility in the markets.
Speaker Change: But if we have a scenario of 940 <unk> I would say it is reading level.
Speaker Change: These devices.
Speaker Change: In line with inflation.
Speaker Change: Bobby.
Speaker Change: Above inflation.
Felipe Dubernet: Okay, thank you.
Speaker Change: Okay. Thank you.
Felipe Dubernet: Our next question comes from Francisca Taverne from Lara Envial. Have you seen competition regarding price increases in the beer market in Chile? Have they followed in the last month? Yeah. We have been in the last quarter increasing prices in some specific packages. So because we have some packages that are less profitable than others, so we have touched these packages, especially the large size. packages, and this has been implemented, especially in the beer category in Chile. So, as still, I think every company has suffered a lot in terms of margins. of the levels we had before the pandemic, we need to continue to recover profitability.
Speaker Change: Our next question comes from Francisco <unk> from <unk> have you seen competition regarding price increases in the beer market in Chile.
Speaker Change: Have they followed in the last months.
Speaker Change: Yes, yes.
Speaker Change: Yes, we have been in the last.
Speaker Change: Sure.
Speaker Change: Sure.
Speaker Change: Increasing prices in some specific packages so.
Speaker Change: Because we have some packages.
Speaker Change: Less profitable than others. So we have touch these packages, especially.
Speaker Change: The large size.
Speaker Change: Packages and this is disgusting.
Speaker Change: Implement that especially in the beer in the beer category in there.
Speaker Change: In Chile.
Speaker Change: So our steel I think every company.
Speaker Change: A lot in terms of margins.
Speaker Change: Of the levels, we had before the pandemic, we need to continue to recover.
Felipe Dubernet: usually competition or the whole industry has increased the prices along the path. So, and this is what I said. At the end, it's a combination of overall industry price, but also brand equity matter in, not only in the price list, but also in rationalizing promotions.
Speaker Change: <unk> ability.
Speaker Change: Usually competition or the whole industry has increased prices along the path.
Speaker Change: So.
Speaker Change: And this is what I said at the end, it's a combination of overall industry price, but also brand equity.
Speaker Change: Matt there in not only in the price list, but also in Russia, and our licensing promotions.
Speaker Change: This is key in a very competitive market.
Speaker Change: Okay.
Speaker Change: Okay.
Felipe Dubernet: Okay, thank you.
Operator: Just a reminder, if you'd like to ask a question, please press start to your phone and wait to be prompted. And if you're down there by the web, you can type your question in the box provided or request to ask a voice question. We'll wait a moment or two for questions.
Speaker Change: Okay. Thank you.
Speaker Change: Just a reminder, if you'd like to ask a question. Please press starts on your phone and we to be prompted by the web you can type. Your question in the box provided our request Wesco place questions. We will wait a moment or two for questions to come in.
Sergio Winter: So we have a question from Sergio Winter from Falcon Capital. In your press release, you mentioned that Hercules is already concluded. Is there any other plan or measure to continue working on efficiencies in 2025?
Speaker Change: So our we have a question from cellular winter from <unk> capital.
Speaker Change: In your press release, you mentioned that at Colas is already concluded.
Speaker Change: Is there any other planner measure to continue working on efficiencies in 2025.
Speaker Change: Okay.
Felipe Dubernet: Hello Sergio, thank you for your question, maybe we haven't been very clear in the press release but we are mentioning that of course Hercules as a name, as an idea, as a brand ended in 2024, it was a three year plan in order to recover our results against 2022 that was in fact a very disappointing year in terms of results. In fact we recovered a bit of growth and especially net income growth that was above inflation in that period. So now, going forward, as we mentioned, our focus will be on developing our 2025-2027 strategic plan, reinforcing our three pillars, profitability, growth, and sustainability.
Sergio: Hello, Sergio. Thank you. Thank you for your question, maybe we haven't been.
Sergio: Very clear in the press release, but we have mentioned mentioning that of course escalates as a name.
Speaker Change: Yes Brown ended in 2024, it was a three year plan in order to recover our results against 2022 that was in fact, a very disappointing year in terms of results.
Speaker Change: And in fact will recover EBITDA growth, we and especially net income growth.
Speaker Change: It was above inflation in that detail.
Speaker Change: So now going forward as we mentioned our focus will be on developing our 2025 2027.
Speaker Change: Our strategic plan reinforcing our three pillars profitability growth and sustainability so.
Felipe Dubernet: So Hercules ended, but many elements of Hercules are still present and will be still present in our 2025-2027 strategic plan. In the upcoming annual report that we will issue, according to the regulation going forward, we will be more specific and give more color on different KPIs of that new strategic plan 2025-2027. But many elements of the plan would continue, especially in terms of profitability. where we need to continue to recover gross margin because this is what suffered the industry, as well reducing our expenses as a percentage of net sales in, let's say, kind of efficiencies at gross margin level and efficiencies also at expenses level in order to protect our bottom line going forward.
Speaker Change: And but many elements of Lps.
Speaker Change: Still present, and we are still present in outlet.
Speaker Change: In our 2025 2027.
Speaker Change: Flat.
Speaker Change: In the upcoming annual report, but we will issue. According to the regulation going forward, we will be more specific and give more color on different.
Speaker Change: Kpis of adapt.
Speaker Change: Our new strategic plan 2025, 2027, but many elements of.
Speaker Change: The plan would compete.
Especially in terms of profitability, where we need to continue to recover gross margin.
Speaker Change: Because this is what's offered the industry as well, reducing our expenses as percentage of off net sales.
Speaker Change: <unk>.
Speaker Change: Let's say kind of efficiencies.
Speaker Change: Margin 11, and efficiencies also up expenses level in order to protect our.
Speaker Change: Both online.
Felipe Dubernet: But it is worth to say that Hercules was a successful plan in order to recover to some extent, despite the external effects we had, the contraction in Argentina, at the end Hercules helped us in the delivery of the results that are shown, especially in the last quarter.
Speaker Change: Hum.
Speaker Change: But it is worth to say that.
Speaker Change: <unk> was a successful succession plan in order to recover to some extent despite the external effects with Scott.
Speaker Change: The contraction in Argentina of BNS fully scaled Pos.
Speaker Change: In the delivery of the results that are showed in especially in the last one.
Speaker Change: Got it.
Operator: Okay, thank you. We are not seeing any further questions. Thank you everyone who asked questions.
Speaker Change: Okay.
Speaker Change: Okay. Thank you we are not seeing any further questions. Thank you everyone, who ask questions I'll be handing the line back to the <unk> team for closing remarks.
Felipe Dubernet: I'll be handing the line back to the CCU team for closing remarks. Thank you all for attending this conference call. To conclude, in 2024 we posted strong turnaround in our financial results during the second half of the year, expanding EBITDA and net income versus 2023 in a challenging business scenario. At the same time, we strengthen our regional footprint. Looking ahead, we are cautious about 2025, as the business scenario will remain volatile and uncertain. Our focus will be on developing our 2025-2027 strategic plan, reinforcing our three strategic pillars, profitability, growth, and sustainability, with a special focus on profitability through revenue management efforts.
Speaker Change: Thank you all for attending this conference call.
Speaker Change: To conclude in 2024, we posted strong turnaround in our financial results during the second half of the year, expanding EBITDA and net income versus 2023 in a challenging business scenario.
Speaker Change: At the same time, we strengthened our regional footprint.
Speaker Change: Looking ahead, we are cautious about 30 35 after business scenario will remain volatile and uncertainty.
Speaker Change: Our focus will be on developing our 2025 27 strategic plan reinforcing our three strategic pillars profitability growth and sustainability with a special focus on profitability through revenue revenue how much of an effort on efficiencies finance I would like to.
Felipe Dubernet: Finally, I would like to extend my gratitude to all our employees. Their dedication and commitment have been key to navigate challenging times. We will continue to work to ensure sustainable and profitable growth for CC.
Speaker Change: Then my gratitude to all our employees.
Speaker Change: Medication and commitment have been key to navigate challenging times, we will continue to work.
Speaker Change: To ensure sustainable and profitable profitable growth for CCU.
Felipe Dubernet: I wish you a wonderful afternoon today. Thank you.
Speaker Change: A wonderful afternoon.
Speaker Change: Today. Thank you.
Operator: That concludes the call. Thank you and have a nice day.
Speaker Change: That concludes the call. Thank you and have a nice day.