Q4 2025 Compania Cervecerias Unidas SA Earnings Call
Speaker #2: Welcome, and thank you for attending CCU's fourth quarter 2025 conference call. Today with me are Mr. Felipe Azocar, Chief Financial Officer, and Carolina Burgos, Senior Investor Relations Analyst.
Speaker #2: You have received a copy of the company's consolidated fourth quarter 2025 results, as usual the call will start by reviewing our overall results and then we will then move into a Q&A session.
Claudio Las Heras: Before we begin, please take note of the following statement: The statements made in this call that relate to CCU's future financial results are forward-looking statements, which involve known and unknown risks and uncertainties that could cause that our performance or results could materially differ. These statements, as well, 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 US Securities and Exchange Commission, and also as the annual report submitted at the CNS. It is now my pleasure to introduce to Mr. Felipe Duwenage.
Speaker #2: Before we begin, please statement: The statement made in this call that relates to CCU's future financial results are forward-looking statements, which involve known and unknown risks and uncertainties that could cause that our performance or results could materially differ.
Speaker #2: This statement, as well, should be taken in conjunction with the additional information about risk and uncertainties set forth in CCU's annual report, in Form 20F filed with the US Security and Exchange Commission, and also as the annual report submitted at the CMF.
Speaker #2: It is now my pleasure to introduce to Mr. Felipe Azocar. Thank you, Claudio, and thank you, you all, for joining the call today. During 2025, CCU posted strong set of results in its main operating segment, Chile.
Felipe Dubernet: Thank you, Claudio. Thank you all for joining the call today. During 2025, CCU posted a strong set of results in its main operating segment, Chile, while it faced a particularly challenging year in Argentina and in the wine business, especially during the second half of this. Isolating the non-recurring gain from the sale of a portion of land in Chile in 2024, consolidated EBITDA decreased 2.9%. By operating segment, Chile posted a robust 7.8% EBITDA growth, which was diluted by the 29.5% contraction in international business operating segment, a 14.9% drop in the wine operating segment. In addition, net income was down 16.3%. Under the same criteria, isolating Argentina, consolidated EBITDA would have grown mid-single digits in 2025.
Speaker #2: While it faced a particularly challenging year in Argentina, and in the wine business, especially during the second half of this year. Isolating the non-recurring gain from the sale of a portion of land in Chile in 2024, consolidated EBITDA decreased 2.9%.
Speaker #2: The operating segment in Chile posted a robust 7.8% EBITDA growth, which was diluted by the 29.5% contraction in the international business operating segment, and a 14.9% drop in the wine operating segment.
Speaker #2: In addition, net income was down 16.3%. Under the same criteria and isolating Argentina, consolidated EBITDA would have grown mid-single digit in 2025. In terms of business scale, consolidated volumes reached 36.2 million hectoliters, expanding 7.3% versus 2024.
Felipe Dubernet: In terms of business scale, consolidated volumes reached 36.2 million hectoliters, expanding 7.3% versus 2024. Organic volumes increased 0.6%, fully driven by the Chile operating segment, which expanded 1.1%, recovering growth after 3 consecutive years of contraction. In terms of our strategy, during the year, we moved forward in our 2025, 2027 strategic plan and its 3 pillars: profitability, growth, and sustainability. Regarding profitability, as mentioned, our core operating segment, Chile, expanded EBITDA by 7.8%, well above inflation, and EBITDA margin grew 48 basis points, while we keep growing in high-margin innovation and delivering efficiencies in every aspect of the business. Regarding our growth pillar, we strengthened our regional footprint by successfully integrating in Paraguay, PepsiCo's beverage portfolio and snacks distribution.
Speaker #2: Organic volumes increased 0.6%, fully driven by the Chile operating segment, which expanded 1.1%. Recovering growth after three consecutive years of contraction. In terms of our strategy, during the year we move forward in our strategic 2025-2027 strategic plan, and its three pillars: profitability, growth, and sustainability.
Speaker #2: Regarding profitability, as mentioned, our core operating segment, Chile, expanded EBITDA by 7.8%, well above inflation, and EBITDA margin grew 48 basis points, while we keep growing in high-margin innovation and delivering efficiencies in every aspect of the business.
Speaker #2: Regarding our growth pillar, we strengthened our regional footprint by successfully integrating in Paraguay PepsiCo's beverage portfolio and snacks distribution. Furthermore, we posted volume growth in our water business in Argentina in a tough business scenario, and increased our beer scale in Colombia and Morocco.
Felipe Dubernet: Furthermore, we posted volume growth in our water business in Argentina, in a tough business scenario, and increased our beer scale in Colombia more. Also, to meet evolving consumer trends, we posted double-digit growth in low-alcohol and ready-to-drink flavored products in Chile, innovating and consolidating our leadership in this high-growing cross-category segment, which involves beer, wine, and spirits in a context of soft industries. Regarding non-equity, we recorded a solid performance in Chile, increasing non-equity levels, being key to expand overall market share. Finally, as of sustainability, in our Juntos por un Mejor Vivir strategy, within the planet pillar, we kept reducing industrial water consumption. Regarding the people pillar of our strategy, and in the year that we celebrated 175 years of history, we reached important milestone.
Speaker #2: Also, to meet evolving consumer trends, we posted double-digit growth in low-alcohol and ready-to-drink beverage products in Chile, innovating and consolidating our leadership in this high-growing cross-category segment, which involves beer, wine, and spirits, in a context of soft industries.
Speaker #2: Regarding brand equity, we recorded a solid performance in Chile, increasing brand equity levels, which has been key to expanding overall market share. Finally, as for sustainability in our Juntos por un Mejor Vivir strategy, within the climate pillar, we continued reducing industrial water consumption.
Speaker #2: Regarding the people pillar of our strategy, and in the year that we celebrated 175 years of history, we reached important milestones. We obtained a high level of employee satisfaction, got certified in Chile and Argentina as Top Employer of the Year by the Top Employer Institute, moved up in the CADEM ranking of citizen brands, and were awarded as one of the companies with best practices in corporate governance by the survey La Voz del Mercado 2025.
Felipe Dubernet: We obtained a high level of employee satisfaction, got certified in Chile and Argentina as a Top Employers by the Top Employers Institute, moved up in Cadem ranking of citizen brands, and got awarded as one of the companies with best practices in corporate governance by the survey, La Voz del Mercado 2025. From a quarterly perspective, consolidated volumes rose 0.6%, fully driven by the Chile operating segment. Our financial results were below last year, mostly explained by a challenging business scenario in Argentina, together with a high comparison base in EBITDA in that country and headwinds in the wine operating segment.
Speaker #2: From a quarterly perspective, consolidated volumes rose 0.6%, fully driven by the Chile operating segment. Our financial results were below last year, mostly explained by a challenging business scenario in Argentina, together with a high company’s home base in EBITDA in that country, and headwinds in the wine operating segment.
Felipe Dubernet: This was partially compensated by our main operating segment, Chile, which continued in a positive path of results. Consolidated EBITDA contracted 17.2%, where the 6% expansion in the Chile operating segment was more than offset by the 44.5% and 45.2% EBITDA contraction in the international business and wine operating segment, respectively. Net income contracted 25.7%. Consolidated EBITDA, isolating Argentina, would have expanded low single digits in the quarter. In terms of our segment performance, in Q4 2025, the Chile operating segment top line expanded 5.5% as a result of 4.1% increase in volumes and 1.3% higher average prices. Volumes were boosted by non-alcoholic categories. Average prices were driven by revenue management efforts, offset by negative mix effects.
Speaker #2: This was partially compensated by our main operating segment, Chile, which continued on a positive path of results. Consolidated EBITDA contracted 17.2%, where the 6% expansion in the Chile operating segment was more than offset by the 44.5% and 45.2% EBITDA contraction in the international business and wine operating segments, respectively.
Speaker #2: Net income contracted 25.7%. Consolidated EBITDA isolating in Argentina would have expanded low-single digit in the quarter. In terms of our segment performance, in quarter 4/2025, the Chile operating segment top line expanded 5.5% as a result of 4.1% increase in volumes and 1.3% higher average prices.
Speaker #2: Volumes were boosted by non-category, non-alcoholic categories. Average prices were driven by revenue management efforts offset by negative mix effects. EBITDA increased 6%, mostly due to a 9.1% gross profit expansion, partially offset by 10.1% higher MSMBNA expenses.
Felipe Dubernet: EBITDA increased 6%, mostly due to a 9.1% gross profit expansion, partially offset by 10.1% higher MSD&A expenses. Regarding gross profit, the rise was driven by higher volumes, lower cost pressures related to favorable prices in some raw materials, with the exception of aluminum, and the appreciation of the Chilean peso against the US dollar, which is positive on US dollar-linked costs, partially compensated by higher costs from our PET recycling plant, CirCCUlar. On the other side, MSD&A expenses expanded, mostly associated with higher distribution expenses as for in Yu, and larger marketing expenses to support branding. In International Business operating segment, net sales recording a 36.3% decrease, mostly driven by lower average prices and a 4.6% volume contraction, highly driven by a high single-digit contraction in the beer industry in Argentina.
Speaker #2: Regarding gross profit, the rise was driven by higher volumes, lower cost pressures, related to favorable prices in some raw materials, with the exception of aluminum and the appreciation of the Chilean peso against the US dollar, which is positive on US dollar-linked costs.
Speaker #2: Partially compensated by higher costs from our PEP recycling plant, Circular. On the other side, MSMBNA expenses funded mostly associated with higher distribution expenses as volume grew, and larger marketing expenses to support brand equity.
Speaker #2: In international business operating segment, net sales recording a 36.3% decrease, mostly driven by lower average prices, and a 4.6% volume contraction. Highly driven by a high single-digit contraction in the beer industry in Argentina.
Felipe Dubernet: The decrease in average prices in Chilean pesos was driven by Argentina, impacted by a negative translation effect, pricing below inflation through the year, and negative mix effects. The latter was partially compensated by efficiencies. In all, EBITDA dropped 44.5%. The wine operating segment posted a top line contraction of 16.8%, driven by 9.7% drop in volumes, together with 7.9% decrease in average prices. Lower scale was driven by both exports and domestic markets. The weaker average prices were mostly explained by the stronger Chilean peso and its negative impact on export revenues and negative mix effects in the portfolio, partially compensated with revenue management initiatives. EBITDA contracted 45.2%, also impacted by the higher cost of wine.
Speaker #2: The decrease in average prices in Chilean pesos was driven by Argentina, impacted by a negative translation effect, pricing below inflation through the year, and negative mix effects.
Speaker #2: The latter was partially compensated by efficiencies. In all, EBITDA dropped 44.5%. The wine operating segment posted a top line contraction of 16.8%, driven by 9.7% drop in volumes together with 7.9% decrease in average prices.
Speaker #2: Lower scale was driven by both exports and domestic markets. The weaker average prices were mostly explained by stronger Chilean peso and its negative impact on export revenues and negative mix effects in the portfolio, partially compensated with revenue management initiatives.
Speaker #2: EBITDA contracted 45.2%, also impacted by a higher cost of wine. Regarding our main joint venture and associated business, in Colombia, volumes reached 2.4 million hectoliters in 2025, increasing 6.1%.
Felipe Dubernet: Regarding our main joint venture and association business in Colombia, volumes reached 2.4 million hectoliters in 2025, increasing 6.1%. We continue to build a robust brand portfolio and sales execution in Colombia, which is the path to long-term volume and financial growth. Now, I will be glad to answer any question you may have.
Speaker #2: We continue to build a robust brand portfolio and sales execution in Colombia, which is the path to long-term volume and financial growth. Now, I will be glad to answer any question you may have.
Operator: Thank you very much. We'll now move to the Q&A part of the call. If you'd like to ask a question, please press star two on your phone. That is star two if you're connected from the phone, and if you're connected from the web, you can type your question in the box provided, or also request to ask a voice question. We'll give it a few moments for the questions to come in. Okay, our first question is from Fernando Olvera from Bank of America. Your line is now open. Please go ahead.
Speaker #1: Thank you very much. We'll now move to the Q&A part of the call. If you'd like to ask a question, please press star two on your phone.
Speaker #1: That is star two. If you're connected from the phone, and if you're connected from the web, you can type your question in the box provided, or also request to ask a voice question.
Speaker #1: We'll give it a few moments for the questions to come in. Okay, so our first question is from Fernando Olvera from Bank of America.
Speaker #1: Your line is now open. Please go ahead.
David Brown: Hi. Hello, guys. Thanks for taking my question. The first one, it's regarding the volume growth seen in Chile this quarter. I don't know if you can comment if this was favored by the alliance with Nestlé, highlighted in the press release. And some additional questions are, if you can share what was the performance of beer during the quarter? And also how these low-alcohol products that you have mentioned will favor volume performance in 2026. Thank you.
Speaker #2: Hi, hello guys. Thanks for taking my question. The first one is regarding the volume growth seen in Chile this quarter. If you can comment if this was favored by the alliance with Nestlé highlighted in the press release.
Speaker #2: And some additional questions are if you can share what was the performance of beer during the quarter and also how this low alcohol products that you have mentioned will favor volume performance in 2026.
Speaker #2: Thank you.
Felipe Dubernet: Thank you, Fernando. Thank you, Fernando, for your question. We have a robust growth in Chile, growing 4.1%, driven, as we highlighted, by the non-alcoholic categories. However, our spirits unit grew a mid-single digits, thanks to a very good performance on all the low-alcohol, ready-to-drink, flavored products of that category. It was a very good quarter where we grew overall market share in the quarter. This drove a good growth in the overall sector. Regarding beer, the quarter in general terms was good. We experienced flat volumes against the same quarter of 2024.
Speaker #3: Thank you, Fernando. Yeah, thank you, Fernando, for your question. Yeah, we have a robust growth in Chile, growing 4.1% driven as we highlighted by the non-alcoholic categories.
Speaker #3: However, our spirits unit grew mid-single digit thanks to a very good performance on all the low alcohol ready-to-drink flavored products of that category. So it was a very good quarter where we grew overall market share in the quarter.
Speaker #3: And this drove a good growth in the overall segment. Regarding beer the quarter in general terms was good. We experienced flat volumes against the same quarter of 2024.
Felipe Dubernet: Seasonally adjusted was a bigger quarter than Q3, let's say, seasonally adjusted. Experiencing seasonally adjusted growth, the beer category. You are asking a more of an old question regarding alcohol consumption. Per capita alcohol consumption decreased mid-single digits, something like 4%. We are still calculating because it depends on the population estimates. Overall, decreased 4%. Regarding specifically in beer, we come back to 2019 per capita consumption. Following, as we highlighted, consumer trends, we are delighted of the growth that we are experiencing in all our low alcohol ready-to-drink favorite products portfolio, which grew 20s. It's growing on the 20, more than 20% and reaching in the chill breaking segment, practically 7% of the mix.
Speaker #3: And seasonally adjusted was a bigger quarter than quarter three, let's say. Seasonally adjusted. So experiencing seasonally adjusted growth, the beer category. You are asking more overall question regarding alcohol consumption.
Speaker #3: Per capita alcohol consumption decreased mid-single digit something like 4%. We are still calculating because it depends on the population estimates. But overall, decreased 4%.
Speaker #3: Regarding specifically in beer, we come back to 2019 per capita consumption. But following as we highlighted consumer trends, we are delighted of the growth that we are experiencing in all our low alcohol ready-to-drink flavored products portfolio which grew 20s is growing on the 20 more than 20% and reaching in the Chile operating segment practically 7% of the mix.
Felipe Dubernet: This encompasses proposition on beer as mixers. We are very satisfied of the growth we are experiencing in the Stone brand and all its different flavors. Also in the spirits, where all the low alcohol ready-to-drink favorite products are growing practically 25%. The consumer is moving towards these products, and fortunately, we have a high innovation rate on that specific category, and where CCU has more than 80% of market share of the overall market. This is Fernando. Hope I have answered your question.
Speaker #3: And this encompasses propositions on beer as mixers. We are very satisfied with the growth we are experiencing in the Stone brand and all its different flavors.
Speaker #3: And also in the spirits, where all the low alcohol ready-to-drink flavored products are growing practically 25%. So the consumer is moving towards these products.
Speaker #3: And fortunately, we have a high innovation rate on that specific category. And where CCU has more than 80% of market share of the overall market.
Speaker #3: This is Fernando Hope. I have answered your question.
David Brown: Great. Yes. Thank you, Felipe. Have a great day.
Speaker #2: Great. Yes, thank you, Felipe. Have a great day.
Operator: Thank you. Our next question is from Felipe Ucros from Scotiabank. Your line is now open. Please go ahead.
Speaker #1: Thank you. Our next question is from Felipe Ucros from Scotiabank. Your line is now open. Please go ahead.
Felipe Ucros: Thanks, operator. Hola, Felipe, Claudio, and team. Thanks for the space. A couple of questions on my side, one, a little more short-term, and the other one a little more long-term in nature. The first one on SG&A in Chile, you've been generally posting improvements in your SG&A to sales ratio over the last couple of years, so I was a bit surprised to see you backtrack this quarter. SG&A grew a little bit faster than sales, and you did mention in the release that it came partly from investments in marketing. Can you comment on this and whether you expect to continue this investment at a higher level? Also, if you could talk to us a little bit about where that investment's going.
Speaker #3: Thanks, operator. Hola, Felipe. Claudio and team, thanks for the space. A couple of questions on my side—one a little more short-term and the other one a little more long-term in nature.
Speaker #3: So the first one on SG&A in Chile— you’ve been generally posting improvements in your SG&A-to-sales ratio over the last couple of years.
Speaker #3: So, I was a bit surprised to see you backtrack this quarter. SG&A grew a little bit faster than sales, and you did mention in the release that it came partly from investments in marketing.
Speaker #3: So can you comment on this and whether you expect to continue this investment at a higher level? And also, if you could talk to us a little bit about where that investment's going.
Felipe Ucros: Perhaps it's just, you know, additional spending to give some impulse to the RTD category that is new for you, or perhaps it's something you're having to do in beer, you know, to keep it at neutral volumes. Then the second question, a little bit longer term, it has to do with the fact that beer's been lagging non-alcoholic beverages for quite some time at this point, right? There's probably more than one thing at play here. Just wondering if you could comment about the different rates of volume growth that you expect there. You know, in a tough environment, it's expected that beer would underperform because it's more discretional, but there's also this structural migration from consumers away from alcoholic beverages.
Speaker #3: Perhaps it's just additional spending to give some impulse to the RTD category that is new for you, or perhaps it's something you're having to do in beer to keep it at neutral volumes.
Speaker #3: And then the second question, a little bit longer term, it has to do with the fact that beer's been lagging non-alcoholic beverages for quite some time at this point, right?
Speaker #3: And there's probably more than one thing at play here. So just wondering if you could comment about the different rates of volume growth that you expect there.
Speaker #3: In a tough environment, it's expected that beer would underperform. Because it's more discretional. But there's also this structural migration from consumers away from alcoholic beverages.
Felipe Ucros: Just wondering if you can comment on the difference between those two factors and how it's impacting you, looking ahead. Thank you.
Speaker #3: So just wondering if you can comment on the difference between those two factors and how it's impacting you looking ahead? Thank you.
Felipe Dubernet: No, hello, Felipe. Thank you for your question. Regarding marketing investment, was mainly driven by beer. As also we had a low comparison base in Q4, so it was a temporary more investment in Q4 2025 compared to Q4 2024, and essentially went to support our premium portfolio. And we think this is to build, you know, a stronger premium portfolio, because at the same time, price growth in beer was in the quarter in line with inflation, which is very good, a little bit above inflation. It's a different combination on the PNL, but nothing to worry about. Regarding your question, more on the long term...
Speaker #4: Yeah, Felipe, thank you for your question. Regarding marketing investment was mainly driven by beer. Also, we had a low comparison base in quarter four.
Speaker #4: So, it was a temporary increase in investment in Q4 2025, compared to Q4 2024. And essentially, it went to support our premium portfolio. So, we think this is to build a stronger premium portfolio, because at the same time, price growth in beer was, in the quarter, in line with inflation, which is very good.
Speaker #4: A little bit above inflation. So it's a different combination on the P&L, but nothing to worry about. Regarding your question more on the long term, we think in the future our winning non-alcoholic portfolio will continue to grow with especially the water business in both pure plain water we had a tremendous success on Cachantun strong gas proposition.
Felipe Dubernet: We think in the future, our winning non-alcoholic portfolio will continue to grow with, especially, the water business in both pure plain water. We had a tremendous success on Cachantun, a strong gas proposition. Also, we continue to grow at a high rate on our flavored or enhanced water portfolio with the brand Más. All of this is driving the growth on non-alcoholic that should grow in line with private consumption in our view, and especially the categories where we lead. Regarding alcohol, the situation as I mentioned in the previous question, in beer specifically, we come back to the per capita consumption in 2025 that we had in 2019.
Speaker #4: Also, we continue to grow at the high rate on our flavored or enhanced water portfolio with the brand Mass. So all of these is driving the growth on non-alcoholic that should grow in line with private consumption in our view.
Speaker #4: And especially the categories where we live. Regarding alcohol, the situation, as I mentioned in the previous question, in beer specifically, we come back to the per capita consumption in 2025 that we had in 2019.
Felipe Dubernet: Bear in mind that 20 years ago, per capita consumption in Chile in 2014 was 44 liters per capita. In 2019, 52, and in 2025, 52. I think overall, this category, we cannot forecast the future, but should stabilize the overall beer category around 0% to 1% growth, and would be driven by the low-alcohol beer propositions. We recently launched in January a great success, Cristal Ultra, but also we lead, specifically the low-alcohol ready-to-drink portfolio of flavored products or mixers, which I mentioned in the previous question, growing a lot. This would certainly sustain growth in the near future. Again, these are projections and... We are following consumer closely, all the consumer trends.
Speaker #4: But bear in mind that 12 years ago, per capita consumption in Chile in 2014 was 44 liters per capita. In 2019, 52. And in 2025, 52.
Speaker #4: So I think overall, this category, we cannot forecast the future, but should stabilize the overall beer category around 0 to 1% growth. And would be driven by the low alcohol beer propositions.
Speaker #4: We recently launched, in January, with great success, Cristal Ultra. But also, we lead specifically the low-alcohol, ready-to-drink portfolio of flavored products or mixers.
Speaker #4: Which I mentioned in previous question growing a lot. So this would certainly sustain the growth in the near future. But again, this is our projections.
Speaker #4: And we are following consumer closely all the consumer trends. Thanks, Felipe. That's the answer, Felipe.
Felipe Dubernet: That's is the answer.
Felipe Ucros: Thanks so much. If I could do a quick follow-up on the first one. Do you expect this higher marketing spend? I know there was a comparison base, but should we expect it to grow at more historical levels going forward, or do you expect a higher marketing spend going forward?
Speaker #3: Thanks so much. If I could do a quick follow-up on the first one. Do you expect this higher marketing spend? I know there was a comparison base, but should we expect it to grow at more historical levels going forward?
Speaker #3: Or do you expect a higher marketing spend going forward?
Felipe Dubernet: No, the marketing rate would be the same, Elijah.
Speaker #4: No, the marketing rate would be the same, Felipe.
Felipe Ucros: understood. Thanks so much.
Speaker #3: Understood. Thanks so much.
Operator: Thank you very much. Our next question is from Guilherme Aguiar from Ágora Investimentos. What is your pricing strategy in Chile going into 2026 for alcoholic and for non-alcoholic beverages? To what extent do you plan to raise prices, or do you plan to take advantage of lower cost pressure to be more aggressive in gaining share?
Speaker #1: Thank you very much. Our next question is from Guilherme Aguiar from Apple Capital: What is your pricing strategy in Chile going into 2026 for alcoholic and for non-alcoholic beverages?
Speaker #1: To what extent do you plan to raise prices? Or do you plan to take advantage of lower cost pressure to be more aggressive in gaining share?
Felipe Dubernet: Hello, Guilherme. Overall, the company historically is aiming to grow prices in line with inflation. As in the last years, you know, our input cost inflation was much higher than inflation. We have some lag in terms of recovering profitability that we had in the past. Still, we have this lag. Overall, the aim is to take every revenue management initiative. But this could be by raising prices, which is a, you know, the less sophisticated answer to your question in terms of pricing, but also launching higher margin innovation. In fact, the portfolio that is growing, the low alcohol ready-to-drink flavored products, at a premium in the case of beer, compared to the mainstream beer.
Speaker #4: Hello, Guilherme. Overall, the company historically is aiming to grow prices in line with inflation. As in the last years, our input cost inflation was much higher than inflation.
Speaker #4: We have some lag in terms of recovering profitability that we had in the past. Still, we have this lag. So, overall, the aim is to take every revenue management initiative.
Speaker #4: But this could be by raising prices, which is the less sophisticated answer to your question in terms of pricing. But also, launching higher margin innovation.
Speaker #4: In fact, the portfolio that is growing, the low alcohol ready-to-drink flavored products had a premium in the case of beer compared to the mainstream beer.
Felipe Dubernet: So you could increase prices, or your revenue per hectoliter, in different ways. Bottom line, the aim is not gain share to pricing or promotions, more sustaining the market share in the long term through brand equity and marketing investments, and high-quality products, rather than try to gain share with, you know, aggressive promotions. The aim is to increase prices, but always you have a market, you have competition, but the aim is to increase prices in line with inflation.
Speaker #4: So you could increase prices or your revenue per capita in different ways. But bottom line, the aim is not gaining share through pricing or promotions.
Speaker #4: More sustaining the market share in the long term through brand equity and marketing investment. And high-quality products. Rather than try to gain share with aggressive promotions.
Speaker #4: So the aim is to increase prices. But always, you have a market. You have competition. But the aim is to increase prices in line with inflation.
Operator: Thank you. Our next question is from Constanza Gonzalez from Quest Capital. Your line is now open. Please go ahead.
Speaker #1: Thank you. Our next question is from Constanza Gonzalez from Quest Capital: Your line is now open. Please go ahead.
Constanza Gonzalez: Good afternoon, Felipe and team. Thank you for the presentation. I have 2 questions. The first one regarding the environment in Argentina. Could you give us more details about the trending consumption that you are expecting for this year, and some recovery in the volumes? Secondly, I would like to ask you about the CapEx for this year. Thank you.
Speaker #5: Good afternoon, Felipe and team. Thank you for the presentation. I have two questions. The first one, regarding the environment in Argentina. Could you give us more details about the trending consumption that you are expecting for this year?
Speaker #5: Some recovery in the volumes? And secondly, I would like to ask you about the CapEx for this year. Thank you.
Felipe Dubernet: Thank you, Constanza, for the question. Hope you are doing well. Yeah, regarding Argentina, the alcoholic industry was very soft. I would say a declining industry we are in the year, but affected specifically also beer. In wine was more dramatic, but in beer, we have a decline. The thing is that towards the end of the year, we saw some gradual improvement. During the quarter, we had a terrible November in terms of weather, because every weekend we have rain. With rain, you don't do barbecues, you don't drink beer. At the end, we had this terrible November. Despite this terrible November, seasonally adjusted, volumes in Q4 compared to Q3, improved 4%. This is what sustained my statement that we saw a gradual improvement. We don't know...
Speaker #6: Thank you, Constanza, for the question. Hope you are doing well. Yeah, regarding Argentina, the alcoholic industry was very soft. I would say declining industry.
Speaker #6: We are in the year. That affected specifically also beer. In wine, it was more dramatic. But in beer, we have a declining industry. The thing is that towards the end of the year, we saw some gradual improvement.
Speaker #6: During the quarter, we had a terrible November in terms of weather, because every weekend we had rain. So, with rain, you don't do barbecues.
Speaker #6: You don't drink beer. So at the end, we had this terrible November. Despite this terrible November, seasonally adjusted, volumes in quarter four compared to quarter three improved 4%.
Speaker #6: This is what sustained my statement that we saw a gradual improvement. We don't know. We don't have clarity if we exclude the weather, we had in November, if maybe this would be an improvement of high single beer.
Felipe Dubernet: We don't have clarity. If we exclude the weather we had in November, maybe this would be an improvement of high single digit, seasonally adjusted. Today, we are seeing, let's say, a gradual recovery in terms of volume in Argentina. It was the two questions. No, the second question. Constanza, could you repeat the second question? Because I had a sound problem here.
Speaker #6: Seasonally adjusted. Today, we are seeing let's say a gradual recovery in terms of volume in Argentina. It was the question. No, the second question.
Speaker #6: Constanza, could you repeat the second question? Because I had a sound problem here.
Constanza Gonzalez: Sure. I asked you about the CapEx that you are expecting for this year?
Speaker #5: Sure. I asked you about the CapEx that you are expecting for this year.
Felipe Dubernet: Regarding CapEx, we will be investing depreciation, no more than depreciation.
Speaker #6: Yeah. Regarding CapEx, we will be investing depreciation. No more than depreciation.
Constanza Gonzalez: Thanks, Felipe.
Speaker #5: Thank you, Felipe.
Operator: Thank you. Our next question is from Aldo Morales, from BICE Inversiones. Can you please explain if this negative inflection point in Argentina, in ARS, is seem to continue over the next quarters? Also, can you please explain how persistent could be this negative pricing scenario in wine vs PT?
Speaker #1: Thank you. Our next question is from Aldo Morales from BC Inversiones: Can you please explain if this negative inflection point in Argentina in ARS is seen to continue over the next quarters?
Speaker #1: Also, can you please explain how persistent could be this negative pricing scenario in wine, VSPT?
Felipe Dubernet: Aldo, nice to hear about you. Aldo, 2025. In a broader perspective, in 2023, our prices, our beer prices in Argentina were above inflation. In 2024, it's slightly above inflation. We saw big numbers. In 2025, we were below inflation, right? 2025, in terms of price, was not a good year for beer in Argentina. Although, looking at the future, we have increased prices in December, effective in January. This would lead some improvement in profitability in the near future, along with the gradual improvement I mentioned that we saw towards the end of last month.
Speaker #6: Yeah. Aldo, nice to hear about you. So Aldo, yeah, 2025, yeah, in a broader perspective, in 2023, our prices our beer prices in Argentina were above inflation.
Speaker #6: In 2024, slightly above inflation. We saw big numbers. And in 2025, we were below inflation. So 2025, in terms of price, was not a good year for beer in Argentina.
Speaker #6: Although, looking at the future, we have increased prices in December, effective in January. So this would lead some improvement in profitability in the near future, along with the gradual improvement, I mentioned, that we saw towards the end of last quarter.
Felipe Dubernet: Regarding the other question, regarding wine, this is due to mixed effects, mainly in exports, as in the domestic market, we increased prices above inflation. It was mostly due at export prices and was due to mix effects.
Speaker #6: Regarding the other question about wine, this is due to mixed effects, mainly in exports. In the domestic market, we increased prices above inflation.
Speaker #6: So it was mostly due at export prices. And was due to mixed effects.
Operator: Thank you. Our next question is from Thiago Bortoluci, from Goldman Sachs. Your line is now open. Please go ahead.
Speaker #1: Thank you. Our next question is from Thiago Bortolucci from Goldman Sachs. Your line is now open. Please go ahead.
Thiago Bortoluci: Yes. Hey, guys. Good morning, everyone. Thanks, Felipe, for the presentation and for the questions. I would just like to move back the discussion on pricing in Chile, right? During your remarks, you mentioned that, you know, essentially, beer prices are growing with inflation. Your headline prices are growing a bit below inflation, which suggests, all else equal, that your price mix for non-alcoholic is negative, right? Obviously, there are a lot of moving parts here. I would just like to understand how much of this is mix? How much of this is like for like, and more importantly, particularly for non-alcoholic, what's the strategy going forward? Thank you very much.
Speaker #7: Yes. Hey, guys. Good morning, everyone. Thanks, Felipe, for the presentation and for the questions. I would just like to move back the discussion on pricing in Chile, right?
Speaker #7: During your remarks, you mentioned that essentially, beer prices are growing with inflation. Your headline prices are growing a bit below inflation. Which suggests all else equal, that your price mix for non-alcoholic is negative, right?
Speaker #7: Obviously, there are a lot of moving parts here. I would just like to understand, how much of this is mix? How much of this is like-for-like?
Speaker #7: And more importantly, particularly for non-alcoholic, what's the strategy going forward? Thank you very much.
Felipe Dubernet: Yeah. Overall prices, we the geography semi increase price by 3.5% in the year. Price effect was something like 4.3%, and mix effect something like 0.8%. That was the impact of mix leading for that. In the last quarter, we have more mix effect due, as I said, accelerated water sales during the quarter. Regarding specifically non-alcoholic, as I mentioned, the pricing strategy would be to at least increase prices in line with inflation.
Speaker #6: Yeah. Overall prices, the Chile price is semi-increased by 3.5% in the year. Price effect was something like 4.3%, and mix effect, something like 0.8%.
Speaker #6: That was the impact of mix, leading for that. In the last quarter, we have more mixed effect due, as I said, to accelerated water sales during the quarter.
Speaker #6: Regarding specifically non-alcoholic, as I mentioned, the pricing strategy would be to at least increase prices in line with inflation.
Thiago Bortoluci: Thank you, Felipe.
Speaker #1: Thank you, Felipe. Thank you. Our next question is from Martín Zech from Fundamenta Capital: How should we think about margins in Chile, finishing in 2026, given these favorable levels for the Chilean peso?
Operator: Thank you. Our next question is from Martin Cech, from Fundamenta Capital. How should we think about margins in Chile finishing in 2026, given the favorable levels for the Chilean peso?
Felipe Dubernet: Martin, I will not provide a specific number for margin or during 2026. It's forward-looking. As you mentioned in your question, we are facing favorable effects in Chile, which would certainly impact positively our raw material. This would come more in effect in Q1 of this year, because we carry out some inventory in Q4 of a specific raw material such as malt. This is why you didn't see at the full extent the benefit of having a lower exchange rate in Chile. However, there are also some signals in some raw materials, specifically aluminum, where we are seeing high, very high prices, above $3,000 per ton aluminum, comparable of what we saw in 2022.
Speaker #6: Martín, I will not provide a specific number for margin or in Chile in 2026. This is forward-looking. But as you mentioned in your question, we are facing favorable effects in Chile, which would certainly impact positively our raw material.
Speaker #6: And this would come more into effect in quarter one of this year, because we carry out some inventory in quarter four of a specific raw material, such as small.
Speaker #6: So this is why you didn't see the full extent of the benefit of having a lower exchange rate in Chile. However, there are also some signals in some raw materials, specifically aluminum.
Speaker #6: Where we are seeing high, very high prices, above $3,000 per ton aluminum comparable of what we saw in 2022. So that's a bit of concern.
Felipe Dubernet: That's a bit of concern, but this should be more than compensated by exchange rate, as you pointed out. Taking into account this, we should be seeing a favorable EBITDA margin, positive expansion of EBITDA in 2026. Again, this is based on assumptions that could change during the year.
Speaker #6: But this should be more than the compensated rate, as you pointed out. So, taking this into account, we should be seeing a favorable, albeit modest, positive expansion of EBITDA in 2026.
Speaker #6: But again, this is based on assumptions that would change during the year.
Operator: Thank you. Our next question is from Alvaro Garcia from BTG. Your line is now open. Please go ahead.
Speaker #1: Thank you. Our next question is from Álvaro García from BTG: Your line is now open. Please go ahead.
Alvaro Garcia: Hey, Felipe. Hope you're doing well. I was wondering if you could maybe comment on the non-alcoholic front in Chile on the performance of Pepsi Más, maybe how it's positioned relative to Coke Zero or to other competitors in Chile. Maybe specific commentary on some of the better performing products in Chile would be helpful. Thank you.
Speaker #8: Hey, Felipe. Hope you're doing well. I was wondering if you could maybe comment from a non-alcoholic front in Chile, on the performance of Pepsi Max.
Speaker #8: Maybe how it's positioned relative to Coke Zero or to other competitors. In Chile, to maybe specific commentary on maybe some of the better-performing products in Chile would be helpful.
Speaker #8: Thank you.
Felipe Dubernet: Yeah. In Chile, we do have Pepsi Zero. We do not have Pepsi Más. It's a highlight, Pepsi Zero, doing very well. Tremendous success in Chile. In fact, the carbonated soft drink category grew in the last quarter, low single digits, which for this category of being Chile, a high consumption level of CSD, is a very good growth in Chile. Of course, Pepsi has been increasing brand equity and market share in the last years. Overall, what is really driving the category are the water business, especially enhanced water products, are growing double digits during the quarter.
Speaker #6: Yeah. In Chile, we do have Pepsi Zero. We do not have Pepsi Max. It's a highlight, Pepsi Zero. It's doing very well. Tremendous success in Chile.
Speaker #6: In fact, the carbonated soft drink category grew in the last quarter low single-digit, which for this category of being Chile, high consumption level of CSD, is a very good growth in Chile.
Speaker #6: And of course, Pepsi has been increasing brand equity and market share in the last years. So overall, what is really driving the category are the water business, especially enhanced water products.
Speaker #6: Are growing double-digit, grew during the quarter. And another product, such as ready-to-specifically functional drinks, growing mid-single-digit.
Felipe Dubernet: Another product such as, you know, ready to specifically functional drinks growing mid-single digits.
Operator: Okay, thank you. Our next question is from Nicole Helm, from MetLife Investment. Can you elaborate on your financial policy going forward in terms of net leverage and capital allocation? S&P has maintained the company on negative outlook for some time. Do you expect to preserve the current rating, and are there any specific measures you're taking for this?
Speaker #1: OK, thank you. Our next question is from Nicole Helm from MetLife Investment: Can you elaborate on your financial policy going forward, in terms of net leverage and capital allocation?
Speaker #1: S&P has maintained the company on negative outlook for some time. Do you expect to preserve the current rating? And are there any specific measures you're taking for this?
Felipe Dubernet: Thank you, Nicole, for your question. If I understood well, you are asking about net financial debt EBITDA ratio. Yeah, the aim is to maintain the notch that we are having with the risk analyst. It's something below a ratio of 2. Today, we are finishing with 2 in terms of net financial debt to EBITDA, is to maintain or even decrease if the business do better. We don't have a specifically policy on that. However, the aim is to maintain the specific notch that we have within the risk analyst.
Speaker #6: Thank you, Nicole, for your question. This I understood well. You had asked about net financial debt EBITDA ratio. Yeah. The aim is to maintain the notch that we are having with the risk analyst.
Speaker #6: So it's something below a ratio of 2. Today, we are finishing with 2 in terms of net financial debt to EBITDA. It's to maintain or even decrease if the business do better.
Speaker #6: But we don't have a specifically policy on that. But however, the aim is to maintain the specific notch that we have within the risk analyst.
Operator: Thank you. We'll now move on to our final question from Santiago Petri from Franklin Templeton. Hello, thanks for the presentation. Could you guide us on your raw material cost expectations for 2026? What impact would that have on your margins?
Speaker #1: Thank you. We'll now move on to our final question from Santiago Petri from Franklin Templeton: Hello. Thanks for the presentation. Could you guide us on your raw material costs, expectations for 2026?
Speaker #1: What impact would that have on your margins?
Felipe Dubernet: Yes. Santiago, yes, specifically, I will answer the question more for Chile, starting by the... What is being positive today, as we mentioned in previous question, is the appreciation of the Chilean pesos. We have some sensitivity on that each 1% appreciation is something about CLP 4,000 million of better results at a consolidated basis. Because also considering the offset we would have in the export revenues we had in the wine business. It's positive on that, but I would not predict, of course, the exchange rate scenario. If this is maintained, we are talking about a significant amount of money.
Speaker #6: Yeah, Santiago, yes. Specifically, I will answer the question more for Chile. Starting with what is being positive today, as we mentioned in the previous question, is the appreciation of the Chilean pesos.
Speaker #6: We have some sensitivity on that, that each 1% appreciation is something about to $4,000 million Chilean pesos of better results. At the consolidated basis, because it also considering the offset, we would have in the export revenues we had in the wine business.
Speaker #6: So it's positive on that. But I would not predict, of course, the exchange rate scenario. But if this is maintained, we are talking about a significant amount of money, as last year, the average exchange rate was $953.
Felipe Dubernet: Last year, the average exchange rate was 953, and this year now, the spot is 960. We are talking about 10%, so it's a significant amount of money. This, as always, is being compensated by a higher aluminum prices that we are suffering, and higher PET recycled prices. You know, we have a law in Chile, where 50% of the plastic bottles should have recent, local recycling PET, and prices on that are the higher in Latin America. To answer your question, we are seeing overall a positive scenario on input costs, thanks to exchange rates.
Speaker #6: And this year, now the spot is $960. So we are talking about 10%. So it's a significant amount of money. But this, as always, is being compensated by a higher aluminum prices that we are suffering.
Speaker #6: And higher PET recycled prices. As you know, we have a law in Chile where 50% of the plastic bottles should have local recycling PET.
Speaker #6: And prices on that are the higher in Latin America. So answer your question, we are seeing overall a positive scenario on input costs. Thanks to exchange rates.
Operator: Thank you. We would like to thank everyone for the participation today. I will now hand it to the CCU team for the closing remarks.
Speaker #1: Thank you. We would like to thank everyone for the participation today. I will now hand it to the CCU team for the closing remarks.
Felipe Dubernet: Okay, thank you. Thank you to you all for attending today. To conclude, in 2025, in context of soft industry, we posted solid performance in our main operating segment, Chile, recovering volume growth after 3 years of volume contraction, and expanded EBITDA and EBITA margin. However, consolidated results were weaker due to a difficult macroeconomic scenario in Argentina, together with a contraction in the beer industry in this country and strong headwind in the wine business. We look to the future with optimism, as CCU's core strength remains solid. Our focus will be on continuing developing our 2025, 2027 strategic plan, reinforcing our 3 strategic pillars: profitability, growth, and sustainability, with a special focus on profitability through revenue management efforts and efficiency and high-margin innovation growth.
Speaker #6: OK. Thank you. Same to you all for attending today. To conclude, in 2025, in a context of soft industry, we posted solid performance in our main operating segment, Chile, recovering volume growth after three years of volume contraction.
Speaker #6: And expanded EBITDA and EBITDA margin. However, consolidated results were weaker due to a difficult macroeconomic scenario in Argentina together with a contraction in the beer industry in this country and strong headwind in the wine business.
Speaker #6: We look to the future with optimism, as CCU's core strength remains solid. Our focus will be on continued developing our 2025-2027 strategic plan, reinforcing our three strategic pillars: profitability, growth, and sustainability.
Speaker #6: With an special focus on profitability through revenue management efforts and efficiency, and high margin innovation growth. Finally, I would like to extend my gratitude to all our more than 10,000 employees in a special year for our company, as we celebrated our 175th anniversary.
Felipe Dubernet: Finally, I would like to extend my gratitude to all our more than 10,000 employees in a special year for our company, as we celebrated our 175 anniversary. Their dedication and commitment with the said CCU principles: excelencia, entrega, integridad, and empoderamiento, have been key to navigate challenging times. We will continue to work to ensure sustainable and profitable growth for CCU. Thank you all, and I wish you a wonderful afternoon.
Speaker #6: Their dedication and commitment to the CER CCU principles—excelencia, entrega, integridad y empoderamiento—have been key to navigating challenging times. We will continue to work to ensure sustainable and profitable growth for CCU.
Speaker #6: Thank you, you all. And I wish you a wonderful afternoon.
Operator: That concludes the call for today. We'll now be closing all the lines. Thank you, and have a nice day.