CCU

Good day everyone, and welcome to CCU's second quarter 2026 earnings conference call on August 5, 2026. Please note that today's call is being recorded. At this time, I would like to turn the conference call to Claudio Las Heras, the Head of Investor Relations. Please go ahead, sir.

Welcome, and thank you for attending CCU's second quarter 2026 conference call. Today with me are Mr. Eduardo Ffrench-Davis, Chief Executive Officer, Mr. Felipe Dubernet, Chief Financial Officer, and Mr. Diego Munizaga, Financial Planning and Investor Relations Manager. You have received a copy of the company's consolidated second quarter 2026 earnings release. As usual, the call will start by reviewing our overall results, and then we will move on to a question and answer session. Before we begin, please take note of the following statement. The statements made in this call that relate to CCU's future financial results and forward-looking statements, which involve known and unknown risks and uncertainties that could cause our actual performance or results to materially differ.

These statements should be taken in conjunction with the additional information about risks and uncertainties set forth in CCU's annual report submitted to the CMF and in our Form 20-F filed with the U.S. Securities and Exchange Commission, both documents available on our website. It is now my pleasure to introduce our CEO, Mr. Eduardo Ffrench-Davis.

Thank you very much, Claudio, and thank you all for joining us today. It is my pleasure to share with you our second quarter 2026 financial results. For the first time as CEO of CCU, company in which I have worked for more than 20 years, and I am proud to lead at a time that we need to look to the future with a strength and conviction that has always characterized us, as we face a particularly challenging context. Nonetheless, we have always shown a longstanding track record of adaptability and for sure execution. Therefore, to continue successfully shaping our future, I would like to mention some relevant changes that we have defined. We have defined the strategy Vamos por Más, which is built on our four main pillars. The first pillar, increase our focus on businesses. The second one, boost operational synergies.

The third one, act with greater agility. Fourth one, accelerate our transformation. These pillars are oriented to generate growth and to respond to the new demands and challenges of the market. To support this strategy, we will execute changes in our organizational structure, as well as strengthening our internal processes and capabilities to remain at the cutting edge of new trends while enhancing our technological transformation. This transition will be implemented gradually throughout this year, with our main focus being to ensure operational continuity and for sure performance. I am confident in the commitment that has always characterized all the CCU employees, and together, we will prepare CCU to successfully navigate current and future challenges. Regarding our second quarter performance, CCU delivered a solid 59.4% consolidated EBITDA expansion, mostly driven by a robust set of results in our main operating segment, Chile, which expanded EBITDA 26.2%.

The international business operating segment also contributes to a higher EBITDA by posting a 25.8% lower EBITDA loss, as we continue facing a sub-consumption environment in Argentina. On the other hand, the wine operating segment contracted EBITDA by 61.9%, sharply impacted by unfavorable trends for the wine category globally and a higher cost of wine. I will now pass the call to our CFO, Felipe Dubernet, who will give you further details about our performance by operating segment during this quarter. Felipe?

Thank you, Eduardo, and good morning, everybody. Consolidated net sales grew 4.8%, almost fully explained by 6.4% higher average prices in CLP as volume declined 1.5%. Higher prices in Chilean pesos were mostly a consequence of revenue management initiatives in all our operating segments. In terms of volumes, the 2.5% increase in the Chile operating segment was offset by decreases of 7.4% and 13.7% in international business and wine operating segments, respectively. Gross profit grew 6.8%, and gross margin improved 76 basis points. MSD&A expenses rose 3.3% due to higher distribution expenses associated with higher oil prices during the quarter, and restructuring expenses in Argentina and in the wine operating segment. This was partially offset through ongoing efficiencies initiatives, mainly in logistics. As a percentage of net sales, MSD&A expenses decreased 62 basis points. In all, EBITDA grew 59.4%.

Regarding net income, we recorded a higher loss from second quarter of 2025, mostly due to a non-recurring, negative effect of CLP 6,068 million from an impairment loss related to our business in Bolivia and lower income taxes in second quarter of 2025, coming from a non-recurring positive tax effect in Argentina. In terms of our segment, the Chile operating segment expanded top line by 1.5%, explained by 2.5% higher volumes, gaining overall market share versus same quarter of last year, partially offset by 1% decrease in average prices in Chilean pesos. During the quarter, the non-alcoholic categories grew mid-single digits, outweighing the low single-digit decline in alcoholic categories, which encompasses beer and spirits.

Flavored, low-alcohol, ready-to-drink products led by brands such as Stones in beer, Mistral Ice, and Kantal in spirits, continue to show excellent results, with volume growing double digits in the quarter and representing 8.3% of total alcohol in this segment as of June 2026. Average prices contracted due to mix effect in the portfolio, partially offset by revenue-managing initiatives in all categories. Gross profit increased 9.4%, mainly driven by lower direct costs, mostly coming from the 5% appreciation of the Chilean pesos against the U.S. dollar, impacting favorably our U.S. dollar-denominated costs, partially offset by higher aluminum prices. MSD&A expenses grew 3.5%, below inflation, although as a percentage of net sales increased 71 basis points due to expenses pressures coming from higher distribution costs, partially offset by efficiencies. Altogether, EBITDA recorded a 26.2% increase, and EBITDA margin expanded 264 basis points.

I would like to mention that during the quarter, CCU acquired a 49% equity interest that Nestlé Chile held in our subsidiary, Aguas CCU-Nestlé. After this acquisition, CCU reached 100% ownership in this subsidiary, allowing us to further consolidate our leadership in a steadily growing water industry in Chile, which is expanding low double digits as of June 2026. Following this transaction, we will maintain our strategic relationship with Nestlé, continuing the distribution of the ready-to-drink coffee-based beverage products and water brands in Chile. In the international business operating segment, net sales increased 15.7%, driven by 24.9% higher average prices in Chilean pesos, partially offset by a 7.4% contraction in volumes. Higher average prices in Chilean pesos was due to revenue management initiatives, mainly with price actions in Argentina in line with inflation.

Volumes in these segments were below last year, mainly explained by Argentina due to a high single-digit contraction in beer and water industries and a difficult business scenario in Bolivia, marked by social unrest and road blocks that disrupted our operations. Gross profit increased 20.8%. MSD&A expenses grew 7.6%, as a percentage of net sales decreased 460 basis points. EBITDA resulted in a 25.8% lower loss versus second quarter 2025. During the quarter, we incurred in restructuring expenses in Argentina by CLP 1,408 million. The wine operating segment posted a top-line drop of 14.1%, mostly driven by the 13.7% decrease in volumes as average prices contracted 0.5%. Lower volumes were driven by industry contraction in export and domestic market in Chile.

The decline in average prices were lower due to a negative mix effect in the portfolio and a stronger Chilean peso against the U.S. dollar, which impacted negatively export revenues. These effects were partially offset by revenue management initiatives. Gross profit fell 26.9%, mostly due to cost pressures from a higher cost of wine, partially offset by efficiencies in manufacturing. MSD&A expenses dropped 3.7%, mostly due to the lower business scale. Altogether, EBITDA decreased 61.9%. During the quarter, we incurred restructuring expenses amounting CLP 1,633 million. To navigate the difficult scenario in the wine business, we will continue pursuing efficiencies and keep developing a strategy of accelerating high-margin innovation.

In this regard, as of June 2026, flavored low alcohol ready-to-drink products based on wine almost doubled versus last year, mostly driven by the launch of the single-serve can version of our brand Gato Selección Dulce, among other brands, backed by our multi-category production capabilities. Regarding our major invention and associated business in Colombia, we posted mid-teens volume growth during the quarter. We are focused on that country on building brand equity and scale to intense profitable growth in the future. Now, we will be glad to answer any question you may have.

Thank you. 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. If you are dialing by the web, you can type your question in the box provided or request to ask a voice question. Our first question comes from Alejandro Fuchs from Itaú BBA. Your line is open. Please go ahead.

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

Thank you, Alejandro. I will take the first question from Chile. Thank you for both questions. In terms of competitive environment in Chile, especially in the soft drinks, always this is a very mature category compound by different segments. Actually, we operate nine segments within that macro category, and it has always been very competitive. We believe that the trends will continue. All the better-for-you products, all the healthy products such as waters, flavored waters, juices, functional products are growing, and we will see that they are continue growing.

We have a strong position in terms of market shares in those categories, and we will invest in those categories in order to get more innovations and to push the mix on those categories. Within the CSD categories, we are doing a great job with Pepsi within the cola segment, and with strong brands in the flavor subsegment as well. We believe that the soft drinks will continue growing mainly through better-for-you products, which we believe that we have a very strong position. The second question, the beer in Argentina, I will pass that question to Felipe now.

Hello, Alejandro. The second quarter, as you noticed, the beer industry compression was high single-digit. However, we are comparing a particularly, let's say, high comparison base in the second quarter of last year. Maybe you know in quarter three, volume collapsed, this is in line with a significant rise on interest rate in Argentina, unemployment due to all the macroeconomic adjustment that were done in Argentina last year. We should look or see a recovery in volumes in second half of 2026.

One, because of the comparison base on quarter three on the one hand, also what we are seeing now is a continuous improvement in volume trends in Argentina since March. If we seasonally adjust the volumes in Argentina, we are seeing a recovery month-on-month since March. A more stable macroeconomic scenario in terms of inflation and devaluation in Argentina yet has not translated to a more dynamic consumption environment. You know everything is volatile, and this is a forward-looking that I cannot ensure to you, we should see a more robust consumption environment towards the end of the year, we have seen, let's say, some good signs since March in terms of improvement of volumes. Thank you, Alejandro.

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

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

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

Hi, Fernando. Thank you for your message and, of course, for your questions. I am very optimistic for the future. I will answer both questions. The first one, around the new strategy. For sure, this new strategy will be part of our new strategic plan. We are going to create a new strategic plan based on two main things. The first one, it's going to be a four-year plan looking forward to 2030 and setting some KPIs for that year. The second thing is we are going to interrupt the current strategic plan to create a new one. This new strategic plan is based on the [Non-English content] Vamos por Más that I talked on the beginning of this presentation. This [Non-English content] is based basically in four main pillars. I will explain a little bit more further on these pillars.

The first one is to focus on businesses, which is not mean that we haven't had focus on business, but we will strengthen our focus in our businesses, separating or differentiating our core businesses with our high-potential businesses. We are going to go deep in our multi-category strategy, which focus on each single category, leading distinct consumption occasions and growing volume and margin across all our operations. We are going to be very focused on consumer occasions and to go deeper in those occasions and satisfy consumers in different places, times, with our multi-category portfolio, which is something that we really believe that is very strong. The second one is operational synergies. We will reach greater productivity and efficiencies, leveraging our multi-category strengths and the reduction of redundancies. We are looking for the whole company.

We have done a first single act like synerging wines and light liquors, especially in the domestic Chilean market. We have several more things to come in order to get more synergies, leveraging our multi-category spirits and vocation. The third one is agility. We will implement a greater autonomy to respond to the market. We are living in a very volatile market with accelerated changes, and we want to be more agile in order to respond those changes. Less operational friction, we have called [Non-English content] or tollbooths, and a real-time control in our operations with leaner and more connected structures. The fourth one is transformation. We are doing some transformation, especially with digital tools in sales, for example, with Kuspi in our logistics and planning, integrating new tools, structures, and processes, and in industrial in our facilities as well.

We will go deep on that with an architecture based on new processes and technologies, putting the digital transformation as the number one enabler of synergies and mainly growth. That is answering your first question, Fernando. Obviously, more is coming on our strategic plan, and for sure, I cannot say it anymore. This is the main mindset that we are creating in order to have a new strategic plan focused on profitable growth based on our main capabilities. The second question is about the per capita consumption or volumes trends in Chile. We received the IMACEC yesterday, actually, and was a good thing, we cannot say that as a country, we are ready to grow as we have done in the past. We still believe that our categories are facing a new trend.

For sure, we cannot avoid the downtrend rate that we are facing with alcohol, but we believe that our categories, with innovation and with certain things, we can turn around that situation. The wine situation is basically a global one, but we have seen some early stages of early green grass with, for example, Bliss, it's a ready-to-drink product. We launched our new wines ready-to-drink product, I don't know, one month ago, and it has been very successful. We believe that we can turn around this alcohol downtrend in the domestic market. On the non-alcoholic business, as I mentioned before, we see that our portfolio, better-for-you portfolio, based on waters, flavored waters, juices and nectars, and functional, we are number one in all of those categories.

We believe that will continue growing, integrating new consumer occasions, and satisfying consumer needs that are eager for more alternatives, and not only based on CSDs. We believe that, in terms of per capita consumption, will be a second semester in order to see how the economy is turning around, in a positive way. We believe our portfolio is prepared to turn around the situations that we faced on the first semester.

Let's talk about tax reform.

Yeah.

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

Okay. Thank you both for the answer.

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

Thanks, Operator, and good afternoon, Eduardo, Felipe, and team. Thanks for the space. Eduardo, congrats on the new role. Great to meet you. Perhaps a few follow-ups on the new strategy and the upcoming midterm plan that you're still working on. I realize that you're still working on the plan, so it's probably a little too early to have definitive answers on this, but perhaps you can give us some initial thoughts on three things that I'm curious about. The first one is hedging. CCU has stood out within the publicly traded industry as one of the only companies that doesn't hedge. Right? There's some chatter in the market that this generates different pricing needs than your competitors. So just wondering if, within your strategy, there are any changes that you plan to make around this or perhaps bring to the board for potential changes.

The second side is wine. Obviously, it seems like you're already doing some restructuring there and you're innovating quite a bit, but wondering if there's a bigger transformation around the approach and the strategy that you guys have had towards the wine segment. Perhaps whether you'll try to accelerate privatization or any other things that you plan to change there. The last one is for Colombia, where you guys have had a decent performance this quarter. Just wondering if there are any changes that you plan on that side of the business. Thank you.

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

Hello, Felipe. How are you? Our policy regarding hedging of commodities for exchange rate remain unchanged. This is a policy that is reviewed every year by the board of CCU, but as of today, remain unchanged. Eduardo will answer you the question regarding the two important businesses of wine and Colombia.

Yeah. Regarding wine, for sure, we are facing an important trend globally. We are an important player in Chile for sure, but at the same time, we're an important player outside, in the export. We are doing, I think, two main things. The third one is not only integrating liquors, which we have an important ammunition or power in Chile with the wines in order to get synergies, but also we are doing this in order to fulfill consumer needs that we believe that are coming together. Today, the consumer is not only choosing product by product, it's choosing based on consumer occasions. We believe that together in Chile, with a portfolio combining wines and spirits, we can satisfy better to our consumer and for sure increase volumes due that strategy in terms of global export, we are focusing our main capabilities on VSPT, on exports.

Increase our footprint outside, getting more markets within the company, and basically strengthen our position in terms of production, getting synergies and efficiencies from there. We believe that wine, we are adjusting some places, some pieces. For sure, we are facing a very important global trend, but we believe that we can start turning around that situation with this strategy. For sure, we have to see how it evolves, but we are taking decisions around that business now. In Colombia, we still believe that we have a very important, or plenty of space to grow over there. Colombia is an interesting country. It is facing a change in its government now. For sure, we are living a very good momentum in Colombia. We are double-digit growth with beer and Malta over there.

We have plenty of innovation and a new strategy setting up to Colombia in order to get more of this country. Colombia, for us, in this strategy, Vamos por Más, is a core country for us. We are there to grow, and we are there to win some battles. We are going to strengthen our position in Colombia, and we believe that we can create momentum, continue the momentum that we are facing on that last two.

Great for that color. Maybe if I can do one follow-up on the cost of wine. Less strategic, but you did mention that the cost of wine had increased, and I thought that stood out in stark contrast to what Concha y Toro reported, where they are having much lower cost of wine and a very strong harvest. Just wondering why you think there is a difference. Perhaps it has to do with the regions, different climate in different regions, maybe with the suppliers of grapes that you guys use. Just wondering if you can comment a little about that differential. Thank you.

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

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

Very clear. Thanks for that color.

Thank you very much. Our next question comes from Thiago Bortoluci from Goldman Sachs. Your line is open. Please go ahead.

Thank you very much, Operator. Good afternoon, everyone. [Non-English content], Eduardo, Felipe, Claudio. Eduardo, first of all, congrats on the new role. Wishing you the best of luck, and wishing to continue the conversation with you. Thank you for the opportunity to ask questions. I think my very only one question is for you, Eduardo. Once you take the CEO role and evaluate the situation in Chile more broadly, how satisfied would you say you are with the price points and price sensitivities, price relativities in each of the categories in Chile?

Do you think there is any particular segment that needs a more focused, targeted shift or a strategic pivot in the next six months? Related to this, how should inflation and oil prices particularly impact your pricing decisions, particularly for the second half of the year? I know you have already implemented a price adjustment. How much of your underlying cost inflation is covered with this? Thank you very much.

Hi, Thiago. Thank you for your message and for your questions. Well, as you see in the presentation, we have a very strong results in Chile. Chile, mainly through the different categories, from the two categories, keeping our momentum in market share with the beer category and improving our prices, and the excellent development of non-alcoholic business, improving our market shares and improving our prices, we are facing a very good position regarding the second semester. In that terms, obviously, there are always opportunities in terms of pricing. Consumers are less willing now to take list prices, increase on list prices, as several company have done in the past. New technologies and new studies we have to put in place. In our new strategy, revenue growth management has an important role in our strategy.

Obviously, revenue growth management is a huge area that we can go deep dive, but there are several initiatives, like for example, a good example, the TPO initiatives, trade promotion optimization within the modern trade, and use of algorithms. We have a proprietary algorithms called SALES, which is helping us, our revenue growth management in traditional trade, that can help us to drive price without hitting the consumers and hitting all the places and SKUs at the same time. Technology, processes, and intelligence based on algorithms will help us to improve our mix, not only driven by prices, but also driven by channel and format, or pack types mixture. I am confident that we have done a very good job on prices within the first semester. We will continue with new tools, doing a greater job on the second one.

This is helpful. Thank you very much.

Thank you very much. Our next question comes from Alvaro Garcia from BTG Pactual. Your line is open. Please go ahead. Mr. Alvaro, your line is open. Please go ahead.

Can you hear me?

Yes, we can.

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

Hi, Alvaro. Thank you for your message. Regarding that question, let me answer it with the strategy. As you know, the water business is growing a lot. Within the water business, we have different kind of products. We have mineral waters, which satisfy certain part of the consumers, purified waters, which compete directly with tap water, actually, and flavored waters. Our strategy remains the same, with this acquisition, we are going to strengthen certain part of that strategy. We will continue creating momentum with Cachantún as a number one mineral water within the country. As you may notice, we have launched several innovations with Cachantún Strong Gas, Cachantún, the black one. It has been very successful, not only competing against water business, but also getting momentum and getting consumer occasions from CSDs, which is something that is very interesting in terms of the water penetration.

We will continue with that. Regarding the flavored water, you have seen that flavors are growing, different SKU are growing, different pack types or PPA strategies are getting momentum as well. We have launched several innovations, especially with gas, and they are creating, again, an important growth coming from different categories and not only coming from the water categories. Finally, purified water, we switch our strategy from Nestlé Puravida, Nestlé Pure Life, which was a license fee coming from Nestlé, to our Manantial brand, and Manantial has done a very great job.

Now we are incrementing our market share in a sustainable manner and with strong numbers against our competitors, and at the same time, taking volumes from tap water, which is, in Chile at least, is a huge undercover market. We believe that with this acquisition, we will make more agile our decisions around the water business, and we will on growth.

Leverage questions.

Regarding leverage questions, I will pass the question to Felipe Dubernet.

Hello. How are you, Alvaro? The leverage, as you know, this increased from 1.7 last quarter to 2.4 this quarter. This is due because we used the cash we had on hand, that it came from the issuance of the 1.4 international bond within 2022. It was very good proceed of the money in this acquisition, because it's accredited on the one hand, it would further enhance our net income going forward, as we'll have 100% net income from this business. Going forward at the end, if we could see a recovery going forward in Argentina, that has a terrible second half on last year, and the growth on strong results we are delivering in Chile, we should converge towards the middle of the range that we have defined between 1.5-2.5 net financial debt EBITDA going forward.

Certainly in quarter four, or not certainly, but we look with good perspective on reducing the leverage. Regarding dividend policy, as maybe you know, and it's in the financial statement, the policy in CCU is to distribute at least 50% of net income, and this is maintained in this coming exercise, or coming in this year. For 2027, we need to wait until the shareholder meeting, which is typically in April, if these policies change or not. The policy remains the same, to distribute 50% of the net income, at least.

Great. Wonderful. Thank you very much.

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

Good afternoon. Guys, thanks for taking my question. Just want to touch base again on Argentina. I guess the answer was very clear from a macro perspective, and totally get it. It's hard for us to predict what to expect in the second half. Still was not clear for me, the share performance. When you look at your number and other brewers. Just wonder if you can help me understand what you attribute this share performance we observe during the quarter, specifically in beer. If you can give us granularity on the portfolio, the brands, Heineken portfolio and your own brands.

What are you planning to do in order to revert that share-wise again into the second half? Very quickly would be on to when and what to expect the launch of Heineken Ultimate, if any, following the launch in Brazil. If it would be far too soon, anytime soon, could be in Argentina as well. Those would be my questions. Thank you.

Hi, Rodrigo. This is Eduardo. Thank you for your both questions. The first one regarding the market share in Argentina. Well, our numbers, we have our Nielsen numbers, and we see our market share in Argentina year to date growing a little bit, but flat in that terms. For sure, we are eager for more as we are certainly saying. We believe that our new strategy that we are trying to put in place in Argentina for the next year, we'll get a little bit more market share. We have a very strong national brands, but also we have a very interesting local brands in Argentina that they are doing, or could be do a greater job region by region.

At least our numbers say that we are stable in terms of market share in Argentina, and actually gaining a little bit on value market share comparing the volume market share, because as Felipe mentioned in the presentation, we have done several price increase during the last quarter. Regarding the Heineken Ultimate, for sure we have a very strong pipeline in terms of innovation. Heineken Ultimate is trying to reach consumer occasions that are not satisfied by the typical normal beer products that are in the market. In Brazil, is doing a great job, and we are seeing to integrate that innovation in several operations within our businesses in CCU, not only in Argentina, but in other places as well. News are coming soon.

Excellent. Thank you. Thank you, guys.

Thank you very much. Our next question comes from [Maria Paula Arua from Nestlé]. Your line is open. Please go ahead. Maria, your line is open.

Hello? Hello?

Hi, I can hear you.

I've got two questions about the Colombian market. The first one is: Is the current expectation for Colombia to continue delivering mid-teens growth, or are there any anticipated changes to the growth trajectory moving forward? The second one is, as part of the Vamos por Más strategy, that is Colombia, one of the core countries, and this strategy aims to deliver higher quality and more profitable growth. Should we expect Colombia to continue relying primarily on the value segment as the growth driver, or will there be a stronger strategy focused on premium brands moving forward?

Hi, Maria. Thank you for the two questions. Regarding the first one, for sure it's difficult now to predict. It has always been difficult to predict the future, but now in Colombia, it's more difficult because governments are changing. We will see how this new government set up in Colombia. Regarding that, Colombia is definitely a place that we believe that we have plenty space for growth. We truly believe in that market. We have been there. Obviously, we have a furious competition over there, but we believe that we have built strong brands and certain parts of Colombia, we are doing really well, for example, in Cartagena. We believe in Colombia. We don't know if the market, the industry, will grow at the same pace that we have done in this last quarter, but we believe in to increase our competitive position over there.

In terms of our portfolio, Colombia is a very mainstream portfolio compared other regions, other countries within Latin America, and it's dominated by our competitor over there. We believe that the way that we can improve our profitability over there is to compete asymmetric with a different portfolio. We will increase our portfolio in terms of different brands, sell in different places, and trying to reach profitability with that strategy on the future.

Thank you so much. Our next question comes from Kevin Zavala from UBS. Your line is open. Please go ahead.

Hello, Eduardo, Felipe, Claudio, thanks for the space. Just wanted to question regarding distribution expenses, this quarter remained a source of pressure despite some efficient initiatives already underway. If you could explain which components are driving the increase, such as fuel, labor, fleet utilization, et cetera. In relation with that, which business process are the first targets for your digital investment? I would like to hear from you, where do you expect the most tangible benefits, whether either sales effectiveness, demand forecasting, procurement, manufacturing, logistics from this investment in digital. Thank you.

Okay. Hello, Kevin. We have some problem with the system here, but we solved it. I'm Felipe. I will take your first question. We have some noise problems, but I think you were wondering about how oil and distribution expenses are impacting our P&L. I will take this part of the question. The second part, regarding the future, Eduardo will take it.

As you notice, we build a KPI that is total expenses. It does include production cost, distribution cost, or MSD&A as a whole. Despite the higher distribution cost, because of oil pressures we had, we have been able to reduce our overall expenses, our net sale, by 56 basis points as in a consolidated basis, which is very good, and keep our expenses below Chilean inflation, 3.8%. Chilean inflation in the period is 4.2%. In my view, this is good, because at the same time, we were investing more, especially in Chile, behind our brands that is building the future.

At the end, having this external pressure of oil in distribution costs on the one side, but on the other side, higher level of inflation, but on the other side, being able to invest more for the future for our brands, I think is the perfect equation for a company like us, and this was particularly good this quarter. If you look and we are implementing efficient initiative in all key aspect of the business with good result, mostly in logistics. That, in his previous role, was led by Eduardo, as he was the head of the non-alcoholic business and the logistics in Chile.

Also, I forgot to mention that we have restructuring costs into business that are suffering, such as Argentina and the wine business. If we exclude those effects, our total expenses on a consolidated basis will be around 3% growth. This is much less than inflation. Of course, I will pass to Eduardo, looking at the future, we need to improve our margins, that's sure, especially going towards our pre-pandemic margins that we had. This needs more efforts in terms of synergies and efficiencies. Eduardo will make a commentary on that.

Thank you, Felipe. Yes, Kevin. Of course, within the new study that we have presented, the Vamos por Más transformation is a key pillar, not only for getting efficiencies and improve our EBITDA margin, but also to be a fuel for or enabler for growth, which is something that is for top-line growth, which is something that this kind of business needs in order to be better, stronger, and with higher margin as well. The digital transformation, as Felipe has mentioned, has been very successful, not only with low-hanging fruits initiatives, but also some stage one initiatives. We have done it silos by silos now. The future, and the new structures that we are setting up, is going to integrate all the transformation activities because if I am making a transformation in logistics in order to improve our logistics system, it's not 100% connected with sales transformation.

Sometimes there are inefficiencies between them. The new structure and the new strategy, Vamos por Más, is going to integrate the end-to-end value chain and set an appropriate structure in order to get that transformation an end-to-end system, and also integrate IT and AI capabilities within that structure at the same time. We are going to be more agile and penetrate silos and be end to end in order to get that transformation. Of course, there are plenty of examples for that, but real-time control. Now, for example, control towers in logistics, planning, commercial, industrial, are, for example, a key system that we are going to put in place in order to get real-time synergies.

When you are managing, for example, an efficiency on a line, but you are looking back that numbers with one month, you cannot make the necessary adjustment to get the efficiencies on real time. It is just an example. Obviously, more things to come, but transformation, sorry, on the future is a key point of our strategy.

Thank you.

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

Thank you. Thank you all. Thank you, [inaudible]. Thank you all the people who has listened this Q&A session and listened the presentation. Thank you for the people who has done the question itself. I am very optimistic and I am very eager for more. In this new role in CCU, I have been here 20, 21 years. I born in this company, but I am looking, with several challenges and optimism, the future. Finally, we have to navigate these current challenges and volatile businesses complex and keep protecting CCU's future. We will act with more agility and more focus while delivering synergies and efficiencies across all our operating segments.

Together with a strengthening of our portfolio to adapt to new consumer trends by growing in high-margin innovation category is key for our plan. Working with collaboration, we will be prepared with the strength for our 2027 and 2030 strategy plan with more focus, more synergies, more agility, and more transformation. [Non-English content]Vamos por Más. Thank you very much for your attendance, and see you in the next chapter.

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

Ladies and gentlemen, good day, everyone, and welcome to CCU's first quarter 2026 earnings conference call on the seventh of May, 2026. Please note that today's conference call is being recorded. I would now like to turn the line over to Mr. Claudio Las Heras, the Head of Investor Relations. Please go ahead, sir.

Welcome, and thank you for attending CCU's 1st quarter 2026 conference call. Today with me are Mr. Felipe Dubernet, Chief Financial Officer, Mr. Diego Munizaga, Financial Planning and Investor Relations Manager, and Mrs. Carolina Burgos, Senior Investor Relations Analyst. You have received a copy of the company's consolidated 1st quarter 2026 earnings release. The call, as usual, will start by reviewing our overall results, and then we will move on to a Q&A session. Before we begin, please take note of the following statement. The statements that we will make in this call that relates to CCU future's financial results are forward-looking statements, which of course involve known and unknown risks and uncertainties that could cause actual performance or results to materially differ.

These statements should be taken in conjunction with the additional information about risk and uncertainties set forth in CCU's annual report and in Form 20-F, recently filed with the U.S. Securities and Exchange Commission, and of course, the annual report that's also available on the CMF and our website. It's now my pleasure to introduce our CFO, Mr. Felipe Dubernet.

Thank you, Claudio, and thank you all for joining the call today. We started the year 2026 with a strong set of results in Chile, our main operating segment, while we continue to face a soft consumption environment in Argentina and a particularly weak business context in the wine business. In terms of financial results, consolidated EBITDA was flat versus last year, growing 0.1%, as the robust 13.7% EBITDA growth in the Chile operating segment was offset by contraction of 18.6% and 50.1% in the international business and wine operating segment respectively. In the quarter, consolidated net sales were flat, growing 0.2%, explained by 1.8% higher volumes, almost fully offset by 1.5% lower average prices in Chilean pesos.

Consolidated volumes were driven by a 3.9% expansion in the Chile operating segment, more than offsetting the decreases of 1.7% and 5.9% in the international business and wine operating segment respectively. Lower average prices in Chilean pesos were mostly due to a negative currency translation effect in Argentina, coming from the 28.7% depreciation of the Argentine peso against the U.S. dollar, being partially compensated by revenue management initiatives. Gross profit grew by 1.4%, and gross margin improved 55 basis points, mainly due to lower direct costs and efficiencies. MSD&A expenses were practically flat in Chilean pesos, offsetting with efficiencies, overall expenses pressures, and restructuring costs in Argentina. As a percentage of net sales, MSD&A grew 23 basis points. In all, EBITDA margin was stable at 16.1%.

Net income was down 6.8% from last year. In terms of our operating segment, in Chile, top line expanded 3.9%, explained by higher volumes as average prices were flat. Higher volumes were driven by high single-digit growth of non-alcoholic categories and overall market share gains in alcoholic and non-alcoholic categories. Alcohol products, which encompasses in this segment beer and spirits, decreased low single digits. Although flavored low-alcohol ready-to-drink products, volumes grew low double digits. Flat average prices were a consequence of a mix effect in the portfolio, mainly due to the growth in non-alcoholic, particularly in water.

Gross profit increased 10.2%, and gross margin rose 278 basis points compared to last year, mainly driven by lower costs coming from the 8.1% appreciation of the Chilean peso against the U.S. dollar, impacting favorably our U.S. dollar-denominated costs and efficiency gains in procurement and manufacturing costs, partially offset by higher aluminum prices. MSD&A expenses as a percentage of net sales grew 31 basis points. Altogether, EBITDA increased 13.7%, and EBITDA margin was up by 173 basis points, reaching 20.0% EBITDA margin. In the international business operating segment, net sales recorded a 6.7% decrease, driven by 5.1% lower average prices in Chilean pesos and a 1.7% contraction in volumes.

Lower average prices in Chilean pesos were a consequence of a negative currency translation effect in Argentina and negative mix effect, partially offset by price actions in line with inflation on a year-to-date basis, although still lagging annual inflation in this country. Volumes in this segment were below last year, explained by Argentina to a mid-single-digit contraction in beer in a stable market share scenario, partially offset by a low single-digit increase in the non-alcoholic category. As a result of the challenging scenario in Argentina, gross profit contracted 10.7% in Chilean pesos, and gross margin decreased by 218 basis points due to cost pressures. MSD&A expenses as a percentage of net sales decreased 54 basis points due to efficiencies. In all, EBITDA contracted an 18.6%.

Excluding the before mentioned restructuring cost in Argentina, EBITDA would have contracted 10.4%. The wine operating segment posted a top line drop of 7.2%, mostly driven by 5.9% lower volumes and 1.4% lower average prices. Weaker volumes were explained by a contraction in both exports and our domestic markets, in line with the industries. The lower average prices were mostly as a result of the appreciation of the Chilean peso against the U.S. dollar and its unfavorable impact on export revenues together with mix effect, partially offset by revenue management initiatives in domestic markets. Gross profit was down 21.8%, and gross margin deteriorated by 589 basis points, mostly due to higher cost of wine. MSD&A expenses as a percentage of net sales were flat.

Altogether, EBITDA decreased a 50.1%, and EBITDA margin was down 508 basis points. Regarding our main joint venture and associated business in Colombia, we posted mid-teens volume growth during the quarter, continuing on a positive path of building business scale. We are focused on building brand equity to enhance profitable growth in the future in this country. I will be glad to answer any question you may have.

Thank you very much for the presentation. We'll now be moving to the Q&A part of the call. If you're dialed in by the telephone, please press star two on your keypad. That's star two on your keypad. If you're dialed in by the web, you may also ask a voice or a text question. Our first question comes from Mr. Fernando Olvera from Bank of America. Please go ahead, sir. Your line is open.

Hi. Good morning, everyone. Thanks for taking my questions. The first one is related to Chile. If you can explain or give us some color of what were the drivers of the high single-digit growth of non-alcoholic drinks? How do you expect volume to behave in the quarters ahead? That's the first one.

Okay. Fernando, would you like to maybe the second question right now? You have two questions.

Okay.

Okay.

Sure. The second question is regarding the solid growth margin expansion that you deliver this quarter, you know. How are you thinking about costs the remaining of the year, considering the volatility of aluminum prices and the strength of the Chilean peso? I mean, both questions are related to Chile.

Okay. Thank you, Fernando, for your question.

Thank you.

First, your first question regarding the good expansions we have had on the non-alcoholic category. I would say that there are differences between products in terms of growth. As you know, soft drinks in Chile, we have a high per capita consumption compared to the rest of Latin America. This category particularly grew something flat or very low single digit. However, the rest of the categories show a very good growth, especially driven by water. This I think is more related to consumer trends, some innovations we have had, and continued growth of enhanced water or flavored water with natural juices, such as the Mas brand.

In fact, in all these categories, water that also encompasses the enhanced water, we grew double digits. There are other liquids that regain growth, such as juices growing mid-single digits, and also all the functional ones that we could highlight energy drinks and sport drinks. I would say very low growth in soft drinks. However, very high growth in all the rest of the portfolio, and it's more related to consumer trends, I would say. This particularly very good growth in the non-alcoholic category in Chile. Going forward, I would say we It's difficult to do forecast, especially when the consumer is under pressure given, you know, increases in oil, inflationary pressures.

It's difficult to say how this would evolve going forward because as you know, particularly in Chile, oil prices, gasoline prices, were passed through the consumer very quickly. As you mentioned, on linking with your second question, it's a very volatile scenario, not only for us in terms of input costs, but also for the consumer in terms of how its own cost would evolve, and this could impact our mix of products. So far, very good results in the non-alcoholic category. Regarding input costs, it I would highlight that it's not only aluminum, but also oil prices that impact our distribution costs.

These I would say are the main drivers of higher input costs that currently we are having, linked also with all the plastic-related packaging materials such as PET, polyethylene and polypropylene that we use especially for packaging. As you mentioned, we delivered a solid gross margin in Chile, driven by, of course, the appreciation of the Chilean peso, but also efficiencies in manufacturing and in procurement. Going forward, I would say, every day is, today I saw Bloomberg and oil prices were down 5%, but maybe in a week we could have +5%, it's very volatile.

However, we have took actions since the beginning of this rally on prices, especially as you mentioned aluminum, but also oil. We have in end of March, April, increased prices across the portfolio.

Great. Thank you, Felipe.

Thank you very much. Our next question comes from Constanza González from Quest Capital. Please go ahead, ma'am. Your line is open.

Good afternoon, Felipe Dubernet and the rest of the team. I have two questions. The first concern is about Chile, the EBITDA margin. Are there any spend that can be replicable for the rest of the year? Are these levels sustainable for the remaining of the 2026? The second question is regarding Argentina. Do you expect a recovery in volumes in the coming quarters?

Yeah. Regarding EBITDA margin, as you mentioned, yeah, we have had a nice expansion in terms of EBITDA margin for the because of we had a overall better prices than last year in all the categories. We suffer from mix effect, but that is logical. When you sell more non-alcoholic than alcoholic products, of course it will have an impact on price per ton. Okay? Also, unit costs help us to increase margins. Going forward, your question, I repeat what I have answered to Fernando Olvera in the previous question. We are suffering from a very volatile scenario. We are trying to do everything to compensate this new input costs, but we need to be careful because it's a balance between volume and price.

As I mentioned, we have increased prices in Chile, end of March, beginning of April in all the categories. Also we are searching for additional efficiencies in order to compensate the effects. It's very volatile and it's too early. Until the conflict is not reaching an end, and still, we are suffering with this volatility in oil prices, and also aluminum prices and other packaging materials, as I said, where it is difficult to do a proper forecast. Of course, we have scenarios internally that so far with the price increases we did, more or less, we are able to compensate.

However, as I mentioned, we could face or we could find a more soft consumer, in terms of that the consumer not only consume or buy our products, but has other needs. For example, to run the car. Now he's paying more for the gasoline for his car. We need to be very careful. Regarding Argentina volumes, yeah, the first quarter I would say was soft, still soft. We decreased our volumes in non-alcoholic as we mentioned, mid-single digit. The first quarter of last year was a very high comp. In the following quarters, I am sure we'll be seeing a growth when you compare quarter two against quarter two, quarter three against quarter three, and quarter four against quarter four.

This is related because the last nine months of last year were particularly weak in Argentina. Now I think we face a more stable macroeconomic situation since. However, with a lot of inflationary pressures, I would say. We have high inflation in Argentina. We have been able so far to increase prices in line with inflation as we kept a lag from last year. Last year with our prices increases were below inflation. Overall, in Argentina, I would say we have a more favorable comps. However, we don't see an extraordinarily good recovery. However, it's more stable so far.

Thank you, Felipe. I have a follow-up question. Can you give us a sensitivity in EBITDA according to the volatility in prices in oil prices?

I would say in terms of the impact on oil prices, we have direct effects that are completely direct because all the contracts and the drivers are particularly linked to oil prices, such as distribution costs. This has significant impact, and other costs such as glass, that is very energy-intensive. I would say that each $30 per barrel of oil increase, we are talking something like $30 million direct impact of oil prices. This could be compensate on the other hand by the appreciation of the Chilean peso. Each 1% of appreciation of the Chilean peso is about CLP 4 million.

If we have 10% of appreciation of the Chilean peso, we are talking about significant money to compensate. These are theoretical effects because at the end, it would depend how this would evolve in terms of the volatility we are seeing today.

Thank you, Felipe.

Okay. Thank you very much. Just a reminder once again, star two for any additional questions. Star two, you may also ask a text question via the web. We'll give another few seconds for any additional questions to come through. Okay, we have a follow-up question from Fernando Olvera from Bank of America. Please go ahead, Fernando. Your line is open.

Hi. Thanks for taking my question again. I have just a quick one regarding the wine business. You know, if you can share what is your outlook for the remainder of the year and, I mean, and if you have seen any sign that suggests volume stabilization or, even a recovery of the market?

Thank you. Thank you, Fernando. I would say overall, the wine consumption in the world, Chile is not the exception. Overall in the world, wine consumption is declining. At the end, we need to think differently to enhance innovation in order to focus on key markets and key products or key brands, especially in domestic market. The outlook going forward, I would say the export business is different than the domestic one. I think the domestic one will continue to experience a decline on that. This could be transferred, this consumption, to beer consumption or to other kind of alcoholic beverage, such as the low alcohol, ready-to-drink flavored alcoholic products. There's a switch of the consumer.

I would say the outlook is not positive in our view because at the end, we are experiencing what the world is experiencing in terms of this particular category. However, there are opportunities in the export market as there would be certainly consolidation in the industry. Also we have enough scale to operate in different markets in the export business. Because at the end, in terms of market share of our exports, of the total Chilean wine, that is an overall brand in the world, I would say we will be growing. In the domestic, I would say is more a declining, but however, focusing on more profitable products and on innovation.

Felipe, in that regard, have you considered selling the wine business?

No. No, because it has synergies, especially in the domestic market. As I said, the export business will be growing its profitability and market share. Also consider that the wine business, particularly this year, is very affected by cyclical wine costs. The last harvest was almost normal, let's say. However, this year we have a particularly perfect storm. Lower consumption globally, as I said, and particularly domestic, in the domestic business. We have a very high market share. I would say, as I said, strategy is to focus more on a more profitable portfolio, doing efficiencies and because in the route to market, we have synergies so far. Mm-hmm.

Okay. Oh, great. Thank you, Felipe.

Thank you very much. We have a question from Santiago Petri from Franklin Templeton. Hello, and thank you for the call. Can you please provide us volume breakdown in percentage terms between alcoholic and non-alcoholic in Chile and international? Thank you.

Hello, Santiago. Thank you for the question. As we stated in the press release, we made the disclosure between how much was the growth between alcoholic and non-alcoholic. Particularly in non-alcoholic, we grew high single digits, and in alcoholic products, we declined low single digits. This is what we can say. On the other hand, particularly in Chile, we gain both alcoholic and non-alcoholic products market share. In the other market, that is the other important market that is Argentina, we also stated that we decreased the alcoholic volumes by mid-single digits. On the other hand, we grew the non-alcoholic portfolio by low single digits. That's the disclosure.

Okay. Thank you very much. Reminder star two for any final questions. We'll give them a few seconds. Okay. It looks like we have no further questions at this point. I'll be passing the line back to the management and IR team for the concluding remarks.

Thank you all for attending this conference call. In summary, during 1st quarter of 2026, we delivered a robust performance in Chile, our main operating segment, and faced challenging business environment still in Argentina and particularly in the wine business. Looking forward, we will continue working under the execution of CCU's 2025, 2027 strategic plan and its three pillars: profitability, growth and sustainability. Which will be crucial to face the similar moment that the global economy is going through, given current geopolitical conflicts which have materially increased costs globally, increasing inflationary pressures. Our company is not exempt from this, forcing us to act with caution and deploy our resiliency and our adaptation capacity to navigate this uncertain and volatile scenario.

Regarding this, CCU already took at the end of the quarter proactive actions of revenue management initiatives. We will continue reinforcing efficiency efforts and managing CapEx priorities. All of these initiatives aim to offset the negative impact of the current scenario. Thank you all. I wish you a wonderful afternoon.

Thank you very much. This concludes today's conference call. We will now be closing all the lines. Thank you and goodbye.

Good day, everyone, and welcome to CCU's Fourth Quarter 2025 Earnings Conference Call on the 25th of February 2026. Please note that today's call is being recorded. At this time, I'd like to turn the conference call over to Claudio Las Heras, the Head of Investor Relations. Please go ahead, sir.

Welcome and thank you for attending CCU's Fourth Quarter 2025 Conference Call. Today with me are Mr. Felipe Dubernet, Chief Financial Officer; and Carolina Burgos, Senior Investor Relations Analyst. 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 to our Q&A session. Before we begin, please take note of the following statements. The statements made in this call that relate to CCU's future financial results are forward-looking statements which involve known and unknown risks and uncertainties that could cause that outperformance or results could materially differ. This segment 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 U.S. Securities and Exchange Commission, and also at the annual report submitted at the CMF. It is now my pleasure to introduce to Mr. Felipe Dubernet.

Thank you, Claudio, and thank you, you all for joining the call today. During 2025, CCU posted a strong set of results in its main operating segment while it faced a particularly challenging year in Argentina and in the wine business, especially during the second half of this year. Isolating the nonrecurring gain from the sale of a portion of land in Chile in 2024, consolidated EBITDA decreased 2.9%. On pricing segment, Chile posted a robust 7.8% EBITDA growth, which was diluted by the 29.5% contraction in International Business operating segment and a 14.9% drop in the wine operating segment. In addition, net income was down 16.3%. Under the same criteria and isolating Argentina, consolidated EBITDA would have grown mid-single digits in 2025. 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 strategic 2025-2027, a 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 the dividend efficiencies in every aspect of the business. Regarding our Growth pillar, we strengthened our regional footprint by successfully integrated 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. 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 cost category segment, which involves beer, wine and spirits in the context of soft industries. Regarding Brand Equity, we recorded a solid performance in Chile, increasing brand equity levels being key to expand overall market share. Finally, as of sustainability in our Juntos por un Mejor Vivir strategy within the [ current ] pillar, we kept reducing industrial water consumption. Regarding the [ profitability ] 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 a Top Employer by the Top Employers Institute, moving up in cadet ranking of citizen brands and got rewarded 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 [indiscernible] country and headwinds in the wine operating segment. This was partially compensated by our main operating segment, Chile, which continued in a positive part 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-digit in the quarter. In terms of our segment performance, in quarter 4 2025, the Chile operating segment top line expanded by 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 the revenue management efforts, offset by negative mix effects. EBITDA has reached 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 [ our NIM ] and the appreciation of the Chilean peso against the U.S. dollar which is positive on U.S. dollar linked costs, partially compensated by higher costs from our PET recycling plant [ circular ]. On the other side, MSD&A expenses funded mostly associated with higher distribution expenses [indiscernible] larger marketing expenses to support revenue. In International Business Operating segment, net sales recorded a 36.3% decrease, mostly driven by lower average prices and a 4.6% volume contracts, highly driven by a high single-digit contraction in the beer industry in Argentina. The decrease in average prices in Chilean pesos was driven by Argentina, impacted by negative translation effect, pricing below inflation through the year and negative mix effect. The later 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 sales 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 the revenue management initiatives. EBITDA contracted 45.2% also impacted by the 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%. We continue to build a robust brand portfolio and sales execution in Colombia which is the path to long-term volume and financial [indiscernible]. Now I will be glad to answer any questions you may have.

[Operator Instructions] So our first question is from Fernando Olvera from Bank of America.

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 Nestle highlighted in the press release. And some additional questions, sir, 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.

Yes. We -- thank you, Fernando, for your question. Yes, we have a robust growth in Chile growing 4.1% driven, as we highlighted, by the non-iconic category. However, our spirits unit view a mid-single digit thanks to a very good performance on all the non-alcohol ready-to-drink flavored products of that category. So it was a very good quarter where we do overall market check in the quarter. So -- and this drove good growth in the overall set. Regarding the year -- the quarter, in general terms was good. We experienced flat volumes against the same quarter of 2024. And seasonally adjusted, was a bigger quarter than quarter 3, let's say, seasonally adjusted. So experiencing seasonally adjusted growth the [ beer category ]. You are asking a more overall question regarding alcohol consumption. The capital alcohol consumption decreased mid-single digits something like 4%. We are still calculating because it depends on the population estimates. So -- but overall, decreased 4%. 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, and we are experiencing in all our low-alcohol ready to drink flavored products portfolio, which grew [indiscernible] the 20%, more than 20% and reaching in the Chile operating segment, practically 7% of the mix. And this encompasses proposition on beer as mixers. We are very satisfied of the growth we are experiencing in the [ Stone ] brand and all these different labors. And also in the spirits, where all the low-alcohol flavored products are growing practically 25%. So the consumer is moving towards these products. And fortunately, we have a high innovation grade on that specific category and where CCU has more than 80% of market share of the overall market.

Our next question is from Felipe Ucros from Scotiabank.

Thanks, operator. [Foreign language] 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. 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. So I was a bit surprised to see you back track 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. 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 is going? 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? And then the second question, a little bit longer term, it has to do with the fact that beer has been lagging nonalcoholic beverages for quite some time at this point, right? And there's probably more than one thing at play here. So just wondering if you can comment about the different rates of volume growth that you expect there. In a tough environment, it's expected beer would underperform because it's more discretional. But there's also this structural migration from consumers away from alcoholic beverages. So just wondering if you can comment on the difference between those two factors and how it's impacting you looking ahead.

Felipe, thank you for your question. Regarding the marketing investment, it was mainly driven by the year. As also we had a low comparison base in quarter 4. So it was a temporary -- [ more ] investment in quarter 4 2025 compared to quarter 4 2024, and essentially went to support our premium portfolio. So I 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, 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 water business in both a pure -- plain water. We had a tremendous success on [indiscernible] strong gas proposition. Also, we continue to grow at a high rate on our favored or enhanced water portfolio with [ brand mass ]. So all of these is driving the growth on our colleague that should grow in line with private consumption in our view. And especially the category where we did. Regarding alcohol, the situation, as I mentioned in the previous question, in the year, specifically, we come back to the per capita consumption in 2025 that we had in 2019. But bear in mind that 20 years ago, per capita consumption in Chile in 2014 was 44 liters per capita, in 2019, 52 liters per capita and in '25, 52 liter. 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. 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, which I mentioned in the previous question, growing a lot. So this would certainly sustain growth in the near future. But again, these are projections and -- but we are following consumers closely all the consumer trends. That's [indiscernible].

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?

No. The marketing range would be the same.

Our next question is from [ Guilherme ] [indiscernible] from [ Apple Capital ]. 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?

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 have in the past. Still, we have this lag. So overall, our aim is to take every revenue management initiative. But this could be by rising prices, which is 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 are at a premium in the case of beer compared to the mainstream beer. So you could increase prices or your revenue per hectoliter in different ways. But bottom line, the aim is not gaining share to pricing or promotions, more sustaining the market share in the long term through brand equity and marketing investments and high-quality produce rather than trying to gain share with aggressive promotions. So the aim is to increase prices. But always, you have a market of competition, but the aim is to increase prices in line with inflation.

Our next question is from Constanza Gonzalez from Quest Capital.

I have two questions. The first one regarding the environment in Argentina. Could you give us more detail about the trend in construction that you are expecting for this year? Some recovery in the volumes? And secondly, I would like to ask you about the CapEx for this year. Thank you.

Thank you, Constanza, for your question. Hope you are doing well. Yes. Regarding Argentina, the alcoholic industry was very soft, I would say, declining industry we are in the year have affected specifically also beer and not -- even wine was more dramatic but in beer, we have a decline in this. And the thing is that towards the end of the year, we saw some runway improvement. During the quarter, we had a terrible November in terms of weather because every weekend we have rain. So with rain, you don't do barbecues, you don't drink beer. So at the end, we have this terrible weather. Despite this terrible November, seasonality adjusted volumes in quarter 4 compared to quarter 3 improved 4%. 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, 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 -- two questions -- second question [indiscernible]. Costa, could you repeat the second question because I had a sound problem.

Sure. I asked you about the CapEx that you are expecting for this year.

Yes. Regarding CapEx, we will be investing depreciation. No more than appreciation.

Our next question is from Aldo Morales from BICE Inversiones. Can you please explain if this negative inflection point in Argentina in ARS seems to continue over the next quarters. Also, can you please explain how persistent could be this negative pricing scenario in wine [ VSPT ]?

Aldo [indiscernible] you. So Aldo, yes, 2025 -- yes, in a broader perspective, in 2023, our prices, our beer prices in Argentina were above inflation. 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. Although, looking at the future, we have increased prices in December, effective in January so that this would lead some improvement in profitability in the near future, along with gradual improvement. I mentioned that we saw towards the end of last month. Regarding the other question regarding why, this is due to mix effects mainly in exports. As in the domestic market, we increased prices above inflation. So it was mostly due as export prices and was due to mix effects.

Our next question is from Thiago Bortoluci from Goldman Sachs.

Thanks, Felipe, for the presentation and for the questions. I would just like to move back to the discussion on pricing in Chile, right? 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 nonalcoholic 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?

Overall prices -- the Chile operating segment increased 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 [indiscernible] product. In the last quarter, we have more mix effect due, as I said, accelerated water sales during the quarter. Regarding specifically in non-alcoholic, as I mentioned, the pricing strategy would be to at least increase prices in line with inflation.

Our next question is from Martin Zetzsche from Fundamenta Capital. How should we think about margins in Chile finishing in 2026, given the favorable levels for the Chilean peso?

Martin, I will not provide a specific number for margin or during 2026 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 and this would come more in effect in quarter 1 of this year because we carry out some inventory in quarter 4 of specific raw materials such as [indiscernible] because this is why you didn't see, as a 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 tonne aluminum comparable of what we saw in 2022. So that's a bit of concern, but this should be more than compensated by exchange rate, as you pointed out. So taking into account this, we should be seeing a favorable EBITDA margin, positive expansion of EBITDA in 2026. But again, this is based on assumptions that could change during the year.

Our next question is from Alvaro Garcia from BTG.

Felipe, I was wondering if you can maybe comment on the nonalcoholic front in Chile, on the performance of Pepsi Max, maybe how it's positioned relative to Coke Zero or to other competitors in China. So maybe specific commentary on maybe some of the better-performing products in Chile would be helpful.

Yes. In Chile, we do have Pepsi Zero, we do not have Pepsi much. To highlight, Pepsi Zero is doing very well, tremendous success in Chile. In fact, the coverage of soft drink category grew in the last quarter low single digit, which for this category of being Chile, a high cost -- high consumption level of [ CSP ] is a very good growth in Chile. And of course, Pepsi has been increasing brand equity and market share in the last few years. So overall, but what is really driving the category, the water business, especially enhanced water products are growing double digit during the quarter and other products such as ready to -- specifically functional brings growing mid-single digits.

Our next question is from Nicol Helm from MetLife Investments. 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?

Thank you, Nicol, for your questions. If I understood well, you are asking about net financial debt EBITDA ratio? Yes, the aim is to maintain the notch that we are having with the risk [indiscernible] so 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. 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 announced.

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?

Santiago, yes, specifically, we'll answer the question more for Chile. Starting by the -- what has been positive today, as we mentioned in previous question, is the appreciation of the Chilean peso. We have some sensitivity on that, that each 1% appreciation is something about [ to CLP 4,000 million ] of better results at the consolidated basis because it's also considering the offset we would have in the export revenues we had in the wine business. So is 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. Last year, the average rate was CLP 953 on this year, now the spot is CLP 960. So we are talking about 10% of significant amount of money. But this, as always, is being compensated by higher aluminum prices that we are suffering and higher PET recycling prices. As you know, we have a loan in Chile where 15% of the plastic bottles should have reached the local recycling PET and prices on that are the higher in Latin America. So to answer your question, we are seeing, overall, a positive scenario on input cost, thanks to exchange rates.

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.

Okay. Thank you. Same to you all for attending today. To conclude, in 2025 in context of soft industries, we posted solid performance in our main operating segment, Chile, recovering volume growth after 3 years of volume contraction and expanded EBIT and EBITDA margin. However, consolidated results were weaker due to a difficult macroeconomic scenario in Argentina, together with the 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 remain solid. Our focus will be on continue developing our 2025-2027, the strategic plan reinforcing our three strategic pillars, profitability, growth and sustainability with a special focus on profitability through revenue management efforts and efficiency and high-margin innovation growth. Finally, I would like to send my gratitude to all our more than 10,000 employees in a special year for our company as we celebrated our 175-year anniversary. Their dedication and commitment with the said CCU principles: Excelencia, Entrega, Integridad [indiscernible] 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.

That concludes the call for today. We'll now be closing on the lines. Thank you, and have a nice day.

Good day, everyone, and welcome to CCU's Third Quarter 2025 Earnings Conference Call on the 6th of November 2025. Please note that today's call is being recorded. At this time, I'd like to turn the conference call over to Claudio Las Heras, the Head of Investor Relations. Please go ahead, sir.

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

Thank you, Claudio, and thank you all for joining the call today. In the third quarter 2025, CCU posted higher operating results and increased profitability versus last year in a volatile and an uncertain business scenario. Consolidated EBITDA grew 4.6% versus last year, mainly driven by our main operating segment, Chile, which in the context of soft industries expanded EBITDA margin through gross margin improvement and efficiencies, maintaining the positive trend in financial results throughout the year. The International Business Operating segment also expanded EBITDA versus last year. Within the segment, we are facing a very challenging scenario in Argentina, where the beer industry contracted mid-single digit during the quarter. On the other hand, the Wine Operating segment posted a lower EBITDA driven by weaker domestic markets in Chile and Argentina together with a higher cost of wine. Our year-to-date results show that our path to recover profitability remains on track, supported by our 2025-2027 strategic plan, which prioritize profitability through revenue management efforts and efficiencies. Regarding our main consolidated figures in the third quarter 2025, net sales were down 1.1%, explained by 2.2% lower average prices in Chilean pesos, partially compensated by 1.2% volume growth. Gross profit decreased 2.9% and gross margin was down 79 basis points. In addition, consolidated MSD&A expenses in Chilean pesos dropped 4.7% due to efficiencies and a favorable translation currency effect from Argentina. In all, EBITDA expanded 4.6% and EBITDA margin expanded 60 basis points. For the first 9 months of the year, and excluding the nonrecurring gain from the sale of a portion of line in Chile in the second quarter 2024, consolidated EBITDA expanded 9.9%. In terms of our segments, in the Chile Operating segment, top line expanded 1.8% as a result of a 2.4% increase in average prices, partially offset by 0.6% lower volumes. Higher average prices were explained by revenue management efforts in all the categories. This was offset by mix effects between alcoholic and nonalcoholic categories. Volumes were below last year due to soft industries, mainly in alcoholic categories. Gross profit and gross margin expanded 3.6% and 75 basis points, respectively, due to lower cost pressures related to favorable prices in some raw materials, which compensated higher costs from our PET recycling plant, CirCCUlar. MSD&A expenses grew 3.2% below inflation in spite of higher marketing expenses and as a percentage of net sales increased by 46 basis points. Altogether, EBITDA increased 4.8% and EBITDA margin expanded 41 basis points. Isolating costs and expenses associated to CirCCUlar, EBITDA would have expanded 10.2% and EBITDA margin by 117 basis points. In International Business Operating segment, volumes posted a 5.3% expansion, although net sales contracted 8.9%, driven by 13.5% lower average prices in Chilean pesos. The decline in average prices in Chilean pesos was mainly due to the 42.2% devaluation of the Argentine peso against the U.S. dollar and a very challenging pricing scenario in Argentina, where prices grew below inflation and negative mix effects within the beer category. The volume expansion, excluding AV, the recent acquisition in Paraguay was mainly explained by Argentina, fully driven by the water category, while beer volumes contracted in line with the industry. Regarding our other operations, Bolivia and Paraguay posted higher volumes and Uruguay contracted low single digits. Gross profit decreased 16.6% and gross margin contracted 382 basis points. MSD&A expenses were down 19.2% and as a percentage of net sales decreased 552 basis points. In all, EBITDA grew 73.1%, driven by all geographies in the International segment. The Wine Operating segment posted a top line expansion of 1.6%, mainly driven by a 4.8% rise in average prices, while volumes were 3% lower. The higher average prices were mostly explained by a weaker Chilean peso and its favorable impact on export revenues and revenue management initiatives in the domestic markets. Volumes contracted due to a 6.3% decrease in Chile domestic market, in line with the industry. partially offset by 4.5% growth in exports. Gross profit decreased 1.6% and gross margin deteriorated by 128 basis points due to cost pressures from a higher cost of wine and higher U.S. dollar-linked packaging costs. MSD&A expenses rose 4.5% and as a percentage of net sales increased 78 basis points due to higher marketing expenses. Altogether, EBITDA decreased 12% and EBITDA margin was down 224 basis points. Finally, regarding our main joint venture and associated business in Colombia, we delivered low double-digit volume growth, outperforming the industry. We continue to build a robust brand portfolio and sales execution, which is the path to the long-term volume and financial growth. Now I will be glad to answer any questions you may have.

[Operator Instructions] Our first question is from Constant Gonzalez from Quest Capital.

I have a question regarding the international segment, specifically in Argentina. Are you expecting a recovery in prices for the fourth quarter of this year? And also, what are you expecting for 2026? Are you expecting a recovery in prices and volumes? And secondly, could you tell us more about the environment that you are seeing in conception in that country?

Thank you for your question regarding Argentina. Yes, in the second semester, we are facing a much more challenging scenario in Argentina, let's say, decline especially in the third quarter of the volumes, especially in beer, while the water business is growing mid-teens, let's say. The point of that, as you indicated, is that with prices that are below inflation. In fact, we are practically 9% below the inflation this year, year-to-date. We have increased prices in our side, but the scenario is competitive. The market share are rather stable, but we expect in the near future because everybody needs to recover profitability. Price increases, that's key in order to recover the profitability of the industry. Regarding volumes, let's say, we have maybe a more stable scenario in Argentina after the elections, where the government would -- is expected to, let's say, to decrease the uncertainty and its financial issues regarding -- especially the U.S. dollar. On the other hand, it is expected to do some reforms in this new Congress. Regarding the near future, we expect an increase in private consumption, but more than that, in this increase in private consumption that is expected to be next year, 3%, it would be different among different consumption categories. Maybe as you know, many Argentinians changed their car at the beginning of the year. So they have had some records in car sales. And normal people -- so I'm considering myself normal, I do not change the car every year. It's a very bad business. So maybe some of these resources from the consumers would come back to our categories, especially categories that are more linked to have fun as the beer -- responsible, responsible consumption of beer. And to regain momentum in the industry in the near future, along with -- we hope recovery of the overall economy. So we have had a bad third quarter. However, we expect recovery next year, I would say, and also more price adjustments to be at least in the near future in line with increase.

Our next question is from Thiago Bortoluci from Goldman Sachs.

I'd like to turn the conversation back to Chile, right? Obviously, there are different dynamics playing out there. But what I see from the consolidated numbers is your pricing growth moderating, actually printing even a little bit below inflation, while I wouldn't call it for a material decline in volumes, but volumes slightly down meaning -- I know probably these efforts to be less aggressive on pricing, let's say, are not necessarily resulting in a stronger demand. Could you please elaborate more how you're seeing pricing versus volume growth versus competition, market share across the different categories, soft drinks and beer please? And more importantly than that, how much space you see for eventually more pricing to be implemented in each one of those going forward?

Thank you, Thiago. Good to hear about you. Thank you for your question regarding Chile. Let me make very clear on price because I saw your report and then commentary now. Price in general per category are in line with inflation or above inflation. The thing that you are seeing is the entire segment, Chile that is showing a price of 2.7%, 2.4% quarter-on-quarter, but because there is a big mix effect between alcoholic categories and nonalcoholic categories. As the industry in alcoholic categories is declining, I have a negative mix effect in price. Excluding that mix effect, prices are increasing 4%, which is above inflation. So I need to make this precision because I read your report. The competitive dynamic, I would say, is very competitive, Chile, as you know. In terms of market share in the overall beverage industry, I would say we gained slightly share compared to previous quarter and quarter-on-quarter compared to same quarter last year, also we gained some share in both alcoholic and nonalcoholic categories because now we see the market as alcoholic and nonalcoholic, especially when you have industries that are declining and they are shift between industries. So I would say it's very competitive, but thanks to our brand equity, our revenue management strategies, our execution while we have increased prices in alcoholic and nonalcoholic categories, we have been able even to slightly gain share. The point regarding going forward in price always, we have an aim of optimizing our revenue management in all the categories, of course, to regain profitability, of course, there is competition. Alcoholic categories, especially wine, but also beer, the industries are very soft, are declining. The one that is declining the most is wine. But beer is also a decline in the third quarter, the industry. The only one that is growing low single digit in alcohol is spirit, thanks to the ready-to-drink where we lead innovation, will lead the market in this fast-growing category, which are the spirits ready-to-drink. Also, we have low alcohol or nonalcohol beer and all the shandies and the flavored beer such as, as an example, the Lemon Stones brand in Chile, where we led the market and it's also growing. Innovation is key in this scenario, okay? That's the answer, Thiago.

That's helpful, Felipe. And if I may, a follow-up in Chile, right? Obviously, I know this is a harder answer, but would love to pick our brains on that. I guess, across the world, we are seeing, in general, declining volumes in beer, right? 2025 has been an atypical year in some regions, you have adverse weather, you have obviously volatile macro, particularly across South America. What's your assessment of this weakness in beer, particularly for Chile? Would you say something more temporary? Would you say there is a structural component related to the consumption occasions, new generations, preferences? And what is CCU doing itself to try to revert this trend?

Thiago, it's not useful to -- in alcoholic, I prefer to talk about alcoholic categories rather than specific because we have different pictures in different segments, let's say. As I said in my previous answer, the one that the industry is declining more is wine. This is a global trend and has been for many years and also a Chilean trend in the last 10 years. Wine, the per capita consumption in 2014 was 13.5 liters per capita. And in 2024 was 10.5. In the opposite of beer in 2014, per capita consumption was 44 liters per capita and last year for 54 liters per cap. There is no single explanation. We carried out very scientific or [ values ] based on data and on quantitative and qualitative, what are the reasons maybe this year in 2025, we saw a further decline from where we were in 2021 or what we have experienced in previous year. And there are high numbers of factors that came from, and you pointed out correctly, is how much money has the consumer. The economy has not been brilliant in the last years in Chile growing 2% on average or less than 2%, huge adjustment interest rate. Interest rates are declining now. The perspective of the Chilean economy should be better in the next 2 or 3 years. Copper prices are on the roof, thanks to the climate change and all of this. There are a number of projects that Chile with enhanced GDP. So we are positive about the economy in Chile in the near future. And this -- if we have this, maybe we will see a better perspective for overall categories, not only alcoholic but also nonalcoholic categories. But there are other reasons that are linked to alcohol consumption. One example is unsecurity. People feel very unsecure in Chile than it was 10 years ago. The sense of going out to on-premise, having a beer or having a cup of wine and let's say, the on-premise was in Chile 10%. And nowadays, it's 5% to 6%. So -- and this is linked to unsecurity. All presidential candidates, in 10 days, there will be presidential elections in Chile. The #1 priority is unsecurity. And when you ask the consumer, why you are not consuming so much alcohol or why are you not going out and having, as you said, in Brazil, a [Foreign Language] or a [Foreign Language] in French. Now because I feel unsecure to go in the night, so I prefer to stay home and not miss my friends. So -- there are many reasons, Thiago. But we expect because we have studied other realities such as the U.S. market. The U.S. market is declining a lot to beer consumption. But however, there has been some period of history where we have seen rebounds on consumption in specific categories. And the category that is performing very well because it is linked to trends is the ready-to-drink category in spirits, but also variants of beer, where you have flavor, you have low alcohol content, beers that are more seasonable. So innovation is key because we led the categories, especially in Chile, the alcoholic category. And innovation is key to, let's say -- and it's a key pillar of our strategic plan to overcome the situation, let's say.

Our next question is from Fernando Olvera from Bank of America.

Can you hear me?

Yes, we can hear you.

Great. Perfect. The first one is related to costs. If you can comment, Felipe, regarding the outlook on costs for the fourth quarter and 2026 would be great. And my second question is related to CapEx also for next year. I mean, considering the soft demand that we are seeing overall in alcoholic beverages, what is your initial thoughts on CapEx for 2026?

Fernando, good question about the cost and commodities. I will give you a medium term, let's say, 2026 as our cautionary statement, I don't do forecast. But what we are seeing, we are doing the budget right now. We are seeing favorable news in practically all the commodities, except aluminum compared to 2025 and also compared to 2024, not yet at the level of prices of commodities that we had pre-pandemic, 2019. But we are seeing better news in barley, sugar, virgin, PET, resins, pulps that was a big hit, especially on juice in the next 2 years. So we are seeing a material, let's say, better commodity prices with the exception of aluminum. We are talking about an easy a projection about $10 million of better commodity prices in U.S. As I said, my #1 commodity is the U.S. dollar, and it seems stable in Chile, at least Chile, which is account for 70% of the EBITDA exchange rate seems stable going forward. And along with a lot of initiatives in terms of efficiencies in Chile that are linked to procurement, let's say, the strategic sourcing also design to value. We always see at our packaging or our formulations in order without affecting at all quality, however, doing in a more valuable or more cost-effective way to deliver the same benefits to the consumer. The consumer is first. However, we always look -- and we work on new material, new specification to reduce cost. And third is what we call nearshoring that is to have closer production of our raw materials and packaging materials to our breweries or factories, let's say, to decrease logistic costs. And in that side, also we have a strong efficiency program. So we saw a better scenario with the exception of aluminum for next year that is increasing practically in our projection 5%. On the other hand, what is -- and we have highlighted this year, we have had higher cost and expenses linked to the CirCCUlar. CirCCUlar is about introducing recycled packaging in our PET bottles up to 15%. And so far, this has had a significant impact in our EBITDA, about [ CLP 10 million ], roughly $12 million of extra cost and expenses year-to-date. On a yearly basis, this year would cost us something like CLP 15 billion. But overall, the aluminum is increasing, but all the rest is in better shape. We have efficiencies, so we expect a better scenario for raw materials and packaging materials going forward.

No, that's great insight. And what about CapEx, Felipe?

CapEx, I will hand over this question to my colleague, Mr. Joaquin Trejo, Financial Planning Manager.

Thanks, Felipe, and thank you, Fernando, for your question. Regarding CapEx, we actually estimate to close the year slightly below what we published in our annual report between 10% and 15% below the published figure for 2025. And looking ahead, we don't actually see major CapEx needs for capacity as the volume trend is what Felipe mentioned earlier, but rather focusing on technology. We are changing our IT system for sales and distribution and also innovation to address this new consumer trend that Felipe also mentioned in previous questions, and also regulatory requirements. The ratio we like to look at is the CapEx over sales, and we forecast it to be below 6% going forward. And also, this is why the CapEx over depreciation ratio should be at some point below 1% going forward, where the new projects are actually a smaller amount compared to previous years where we had, for example, the CapEx for the CirCCUlar plant. But this is also offset by some CapEx carryover from 2025 that is going to be transferred to 2026. But in general terms, Fernando, that's the trend we foresee.

[Operator Instructions] Our next question is from Claudia Raggio from Provida AFP. Could you give us some color on the sales volumes of beer in Argentina on October?

Yes, I would anticipate that we have had in both alcoholic and nonalcoholic, we saw decline also in October. So we have maintained in alcoholic the same trend we have in quarter 3. And in water, practically flat, small decline in water business.

Thank you. We'll give it a few more moments for any further questions to come in. It looks like we have no further questions. I'll now hand it back to the CCU team for the closing remarks.

Thank you all for attending today. In summary, in the third quarter 2025, our main operating segment in Chile continued in a trend of financial results and profitability in the context of soft industries and higher costs from CirCCUlar. The later was boosted by gross margin improvements, efficiencies and lower prices in raw materials. International Business Operating segment posted higher EBITDA, although results were negatively affected by a challenging scenario in Argentina due to a tough deceleration in consumption. The Wine Operating segment contracted EBITDA due to a higher cost of wine and weak scenario in domestic market, while export grew mid-single digits. We will keep executing our 2025-2027 strategic plan and its 3 pillars: profitability growth, enhancing innovation, and sustainability. With special focus on profitability, supported by both revenue management efforts backed by our strong and diversified portfolio of brands and efficiencies across all operating segments and functions. Thank you very, very much for attending today, and I wish you a wonderful end of day.

That concludes the call for today. Thank you, and have a nice day.

Good day, everyone, and welcome to CCU's Second Quarter 2025 Earnings Conference Call on the 7th of August 2025. Please note that today's call is being recorded. At this time, I'd like to turn the conference call over to Claudio Las Heras, the Head of Investor Relations. Please go ahead, sir.

Welcome, and thank you for attending CCU's Second Quarter 2025 Conference Call. Today with me are Mr. Felipe Dubernet, Chief Financial Officer; Mr. Joaquín Trejo, Financial Planning and Investor Relations Manager; and Ms. Carolina Burgos, Senior Investor Relations Analyst. You have received a copy of the company's consolidated second quarter 2025 earnings release. The call will start by reviewing our overall results and then we will move on to our Q&A session. As usual, before we begin, please take note of the following statements. The statements made in this call that relate to CCU's future financial results are forward-looking statements, which, of course, involve known and unknown risks and uncertainties that could cause actual performance or results to materially differ. These statements should be taken in conjunction with the additional information about risks and uncertainties set forth in CCU's annual report in Form 20-F filed with the U.S. Securities and Exchange Commission and in the annual report submitted to the CMF and available on our website. For today's conference, as we stated in our second quarter '25 financial report, annual variations and references regarding EBITDA and net income exclude the nonrecurring gain from the sale of a portion of land in Chile in the second quarter 2024. Also, organic variation to which we will refer next exclude the consolidation of ADO in Argentina and AV in Paraguay. For more detail to this, see Footnote 3 of our second quarter '25 financial report. It is now my pleasure to introduce our CFO, Mr. Felipe Dubernet.

Thank you, Claudio, and thank you, all, for joining the call today. In the second quarter of 2025, CCU delivered high financial results and increased profitability versus last year despite the volatile and challenging business environment. Consolidated EBITDA nearly doubled versus last year, mainly driven by our main operating segments, Chile, which expanded EBITDA 59.1% and, to a lesser extent, by the 8.3% growth in the Wine Operating segment. On the other hand, we keep facing a challenging scenario in Argentina, impacting the International Business Operating segment's results. Higher consolidated EBITDA and improved EBITDA margin were driven by volume growth, revenue management efforts and efficiency, more than offsetting cost and expense pressure from inflation. In line with the high operation results, net income posted a lower loss versus last year. Our first half results show that we are taking the right actions to keep delivering higher operational results and profitability in the context of soft volume trends for the beverage industry in the region. For the second half, we will keep executing our 2025-2027 Strategic Plan and its three pillars: profitability, growth and sustainability, with a special focus on profitability supported by both revenue management efforts backed by strong and diversified portfolio of brands and efficiencies across all our operating segments. Regarding our main consolidated figures in the second quarter, organic net sales were up 4.8%, explained by 4.7% higher organic volumes while organic average prices were flat. Gross profit grew 6.7% organically and gross margin expanded 73 basis points. In addition, consolidated MSD&A expenses grew 5.8%, mainly due to the consolidation of Aguas de Origen in Argentina, although as a percentage of net sales, improved 197 basis points. Without the consolidation of Aguas de Origen that we started the consolidation first of July of last year, MSD&A expenses would have increased 0.5%. In all, EBITDA expanded 97.1% and EBITDA margin expanded 150 basis points. In terms of our segments, in the Chile Operating segment, top line expanded 9.4% as a result of 6% increase in average prices and 3.2% higher volumes, where all categories posted positive growth with a better seasonally adjusted volume pace than previous quarters. Increased average prices were explained mainly by revenue management efforts, more than offsetting negative mix effects and were key to expand gross profit and gross margin by 12.5% and 115 basis points, respectively, in the context of cost pressure related to an unfavorable packaging mix and higher manufacturing costs, mainly associated with our PET recycling plant CirCCUlar. MSD&A expenses grew below inflation, expanding 2.1% and as a percentage of net sales improved 265 basis points due to efficiencies. Altogether, EBITDA increased 59.1% and EBITDA margin expanded 339 basis points. In International Business Operating segment, organic volume posted a 9.8% expansion, although net sales recorded an 11.4% contraction driven by 19.3% lower organic average prices in Chilean pesos. The decline in organic average prices was mainly due to the devaluation of the Argentine peso against the U.S. dollar and also due to a challenging pricing scenario in Argentina. The volume expansion was mainly explained by a low comparison base in the second quarter 2024 in Argentina, while volumes seasonally just continue in a recovery trend for the fourth consecutive quarter. Organic gross profit increased 11.6% and organic gross margin was flat. MSD&A expenses were up 10.5% mainly due to the consolidation of ADO and higher marketing expenses. As a percentage of net sales, MSD&A expenses decreased 301 basis points. Without the consolidation of ADO, MSD&A expenses would have increased 5.9%. In all, in spite of volume growth, given the effects mentioned above, EBITDA loss was similar to last year. The Wine Operating segment posted a top line expansion of 6%, mainly driven by 4.2% rise in volumes and 1.7% higher average prices. Larger volumes were led by a 17.4% growth in exports, partially offset by 4.1% decrease in the Chilean domestic market while the industry posted a larger decline. The higher average prices were mostly explained by a weaker CLP and its favorable impact on export revenues and revenue management initiatives in domestic markets, compensated by negative mix effects in the portfolio. Gross profit was flat and gross margin deteriorated by 222 basis points due to cost pressures from a higher cost of wine due to a lower harvest and higher USD-linked packaging costs. MSD&A expenses dropped 3.7% with efficiencies and as a percentage of net sales improved to 174 basis points. Altogether, EBITDA increased 8.3% and EBITDA margin was up 32 basis points. Regarding our main JV and associated business, in Colombia, we delivered low single-digit volume growth in soft industry context. We continue working in strengthening our brand portfolio, our execution to deliver sustainable growth in volume and results in Colombia. Now I will be glad to answer any questions you may have.

[Operator Instructions] Our first question is from Felipe Ucros from Scotiabank.

A couple on my end. So the first one is on the pricing in Argentina. Can you delve a little deeper into your pricing comments? You talk about a difficulty in pricing. So just wondering if you can talk about whether this comes from the competitive environment, with lack of discipline or perhaps it's just the state of the consumer that's keeping you from increasing prices faster and on pace with inflation. And then the second one is on SG&A in Argentina. Operating leverage seemed to drop pretty strongly this quarter, particularly when you compare it to the last three quarters since you acquired Aguas de Origen. So third quarter of last year, which was, seasonally speaking, kind of similar also winter, your SG&A was close to 50% of sales. But this quarter, it was closer to 66%. So pretty stark difference from one year to another. Perhaps the pricing issue has to do with it but just wondering what the drivers are on that de- leveraging pace.

Hello, Felipe. So the first thing is that was key to pricing because at the end of the day, pricing has been very difficult in Argentina, especially in the last, I would say, six months. To give you a reference, last year, beer price in Argentina was compared to inflation in 2024, above inflation by 4.4%. However, this year, year-to-date, is below inflation by 10.5%. So if we take into account where the new government took office in Argentina, let's say the period of 18 months since 1st January 2024, our prices in Argentina are 6% below inflation. As you know also, wages are -- real wages in Argentina are lagging below inflation. This is expected because at the end, the main target of the government is to reduce inflation. So consumer has less Argentinian pesos in his wallet. Argentina is expensive right now. Obviously, this change that, at the end of the day, for the future is for good to reduce inflation in Argentina. Also the good news in Argentina after the announcement of the government mid-April is that we have a new exchange rate policy, let's say. So this is what is affecting overall the industry. Also competition is aggressive because when volumes are difficult to recover. So maybe the good size is that for the fourth consecutive quarter, seasonally adjusted our volumes have grown. However, also, we have had mix effects as we -- as the mix participation of value brands are higher than before. And this has also to do with this deflationary pressure, I would say, in Argentina. So it's very clear that our prices in this period are below inflation. As far as the economy recovery in Argentina and in the future, mainly also a further reduction on inflation, our prices would be in a more healthy perspective, let's say. Regarding the synergies of the water business, no, the synergies are there because at the end, of course, at total expenses level, of course, we have in our P&L the expenses of ADO. There are marketing expenses because these are completely allocated to the category. There is more distribution costs, of course, but also we have, let's say, we are only owners of the 51% of the company, so we have a benefit there because we charge double, [indiscernible] the interest that you need to look. But at the end, you have more marketing expenses because at same quarter last year, we didn't have these. But the good indicator, and this is why we did the pro forma is that if you exclude ADO the consolidation over our MSD&A expenses have decreased 5.9%. And a percentage of net sales, and this is what is very important because in a scenario where you have high inflation and difficulties to prices, our MSD&A expenses organically decreased 600 and 300 basis points. This is the key indicator. So of course, the volumes were disappointing in terms of what we expected as recovery, but what was more difficult was the pricing scenario, Felipe.

No, understood. That's very clear. And if I can do a follow-up, on the other side on Chile, you have very good results on gross margins. Wondering if you can discuss what was the key driver here on the expansion of gross margins in Chile.

Of course. I think -- Okay, Felipe, yes, Chile. Thank you for -- that you notice that Chile, we have got good results. In fact, I think -- we think we have had good results in Chile not only overall but in all categories, let's say, beer, nonalcoholic and also spirits. This is -- first of all, this is, as always, we did a commentary on that. Our brand equity is very strong in Chile. So our pricing power -- so because increasing in this context, the prices, 6%, this is real average prices. It's not effect, it's real average prices. This is much above inflation. And at the same time, we have maintained overall market share and recovering market share, especially in iconic products against previous quarter. So this sounds a good equation, I would say, increasing prices, recovering market share in alcoholic products. We posted in overall alcoholic products low single-digit growth where competition has had negative growth so in a very difficult industry. As I mentioned, last quarter in alcohol beverages. And this is based on sound brand equity. So I, along with this good equation top line, I would like to say also a good effort in efficiencies, especially in logistics. So overall, it's a good quarter in our core operating segment, which is Chile.

Our next question is from Vidhi Vira from Goldman Sachs. Can you give guidance for the second half of 2025 profitability and revenue expectations? Can you share color on the free cash flow you expect to generate this year after interest, tax, net working capital, CapEx, et cetera?

Okay. Thank you Vidhi, for your question. First of all, we don't do forward-looking estimates so I cannot answer this question. On top of that, it's very volatile. U.S. dollar is volatile exchange rate so we have had, at the beginning of a months ago, U.S. dollar was at [ 940 ] We experienced 5% devaluation so it's very volatile. Consumption, as I mentioned in my previous answer especially for Chile, seems to be low single digits, but we need to wait. Pricing scenario has been favorable so far, but we don't know -- of course, we don't know how competition would seem to be. So I can't give you a guidance on a more precise standard. Regarding free cash flow, yes, we have really a good question on operating cash flow not only because we increase our EBITDA but also in working capital, thanks to inventory reduction, thanks to initiatives. Because efficiencies, you can look at efficiencies, on the one hand, in expenses, in cost, but also in working capital. So we are implementing a new planning platform. We do have a new logistic and planning process so that is delivering its fruits. So as a consequence, we experienced inventory -- base inventory reduction. Also good work on accounts receivables, on receivables by the team. Also, in this particular quarter, we changed our operating model with Red Bull, which allow us to free up extra cash flow. In terms of CapEx, we are a little bit behind the phasing of the estimate in public in the 20-F that we would find in the 20-F, but that was more than compensated by these excellent working capital results.

Our next question is from Kevin Cheng from Western Asset Management. Okay. Looks like Kevin dropped. We'll move on to the next question. Our next question is from Lucas Ferreira from JPMorgan.

My first question is on your expectations on COGS for the rest of the year. There was an important drop in aluminum prices, right, in the beginning of the second quarter. Wondering if some of these already was reflected in this quarter's results, or if you expect that drop to be something in favor of the company in the third quarter. And then if you can comment a little bit, especially in Chile, how you see the -- your expectations. You had an important improvement in margins year-over-year in 2Q. If that's still the case for the second half, second half of last year. Especially in the fourth quarter, right, company had a good improvement in profitability, if you think this is offering tough comps for you? Are you comfortable to once again, especially in the fourth quarter, reach the near 20% margin in Chile?

So we are seeing more commodity. Yes, we are seeing a little bit higher aluminum prices, as we mentioned, 5% more than last year so at $2,500 per ton. So we are not seeing -- so -- and as we don't hedge, we prefer to be a bit cautious on that, especially given the trade discussions that the U.S. government is having with China, Brazil and other countries. There are other raw materials that are in a better shape, let's say, sugar, reducing 14% compared to last year so far, and somewhat also barley reducing 60% compared to last year. So we are seeing more rather stable aluminum price going forward. On the other hand, we are a little bit worried about, as I mentioned in my previous answer, to the U.S. dollar because around [ 970 ] last -- so it's -- and for the quarter was [ 933 ] for the entire quarter 2. So now we are facing U.S. dollar pressure. Of course, towards the end of this year, margin will depend on a lot on how we sustain our prices. And I would say that finance are positive because second quarter was very, very encouraging. We are in our best ever run equity levels in all categories with our service. So consumers are preferring despite prices, our products. So at the end of the day, this is a sound foundation of the business. So what will happen, as I mentioned in my previous answer, I will not give you a forward-looking view. But if we sustain this level of prices, we have, of course, some pressures on -- given the recent -- this weak devaluation of the Chilean pesos, but the volumes that we maintain, what I -- the commentary I made this quarter, I think we are growing low single-digit volumes. So we could have a good second half.

Our next question is from Orazio Elera from MBI Inversiones. How do you see the situation in Argentina? Is there any green shoots in terms of profitability?

Orazio, I think -- I know I prefer to have interaction, but it seems that I have answered the question. So we are facing a difficult pricing scenario. Argentina is in a deflation mode. If we continue this trend, I think, is something that Argentina has had to do, let's say, with these inflation levels because I don't know, two, three years ago, we have hyperinflation, we increased prices, volume didn't suffer, but we couldn't get dividend from this operation. And now we are in a moment of change. So the green spot, as I think you asked your question, if this new macroeconomic program achieved to a good end would be good in the long term for our business. We have a solid foundation in Argentina in terms of brand preference, completely aligned with our market share position. We have a good operation that is making efficiencies. We incorporate a new more scale, adding the water -- the retail water business. So for the long term, I saw if the macroeconomic plan in Argentina works, and the country has more investment, I'm seeing a better future. Now we are in the middle of the transition from a hyperinflation economy to a deflation. And of course, our P&L is suffering because it's difficult with the consumer where the salaries are lagging inflation to further increase prices. Also competition is aggressive. But as I said, the things that are under our control is the brand equity and the good work we are doing there.

Our next question is from Ewald Stark from BICE Inversiones.

I saw that in exportation volumes in [indiscernible] Increased by 14% year-over-year. So I was wondering what do you expect going forward? Do you still expect volumes to increase by double digits given that you are taking an active approach in opening distribution channels?

So yes, on why our main priority in the export business was to recover scale. Remember, we have a terrible 2023 with the global destocking of inventory. And this is, I would say, it's a very encouraging quarter where our volumes grew by 17.4% with very good performance in Japan, Brazil and South America, while the U.S. market continued to be very complicated. Going forward, we expect, let's say, for the overall year, to continue the recovery we did in 2024 and let's say, something like mid-single-digit growth in our exports. But the second quarter was very good, also above our expectations somewhat. So as I mentioned, in other business was below our expectation, the volume in Argentina. But on the other hand, export of wine was above our expectation. This is the multi-category. As I said, there are some business that we do good performance, some quarters, some business we do. This is why CCU is a leading multi-category company in order to have a good diversification.

Our next question is from Álvaro García from BTG. Can you comment on the dynamics of beer versus soft drinks in Chile?

No. Both categories have practically the same growth, low single-digit growth, I would say, beer and nonalcoholic. In the case of spirits, we have a very solid growth because we are the market leaders in the new trendy categories such as ready-to-drink with our neutralised brand. We are a sound leader there. So both were in line in terms of low single-digit growth. In the case of beer also outpacing our market share in quarter 2 of what we had in quarter 1. So with a good market share recovery in beer across all the brands. So that was good. In the case of nonalcoholic we grew low single digit. despite an unfavorable mix for us as Colas continue to take more of the whole nonalcoholic beverage or within soft drinks, Colas where we are not the market leaders are taking more portion of the mix. But this has been a trend since the pandemic. However, we -- our Pepsi brand continue to gain brand equity, which is important to compete against the market leader in costs. But despite all of this, we experienced this low single-digit growth in a very competitive, by the way, scenario in nonalcoholic, also in beer. But in nonalcoholic that usually that sometimes is more rational, has been very competitive in the last quarters.

Our next question is from Constanza Gonzales from Quest Capital.

Thank you for taking my questions. I have two . The first one is in relation with Argentina. You said before that you cannot give us a guidance for the year, but could you give us more details about the pass-through to prices of inflation in the month of July? And also just for clarify, in the short term, the priority of the company is to keep the market share in Argentina instead of increased profitability?

Yes, I mentioned to you that the gap in the last 18 months of beer prices in Argentina compared to inflation in the previous question also, that I answered, was 6% low. We expect towards the end of the year to reduce this gap. It was difficult in the 18 months to be in December this year in line with inflation, especially looking at the salaries evolution in Argentina without losing volume and scale. Argentina for us is a mature business. We don't want to gain share through aggressive promotions. So we -- as I mentioned in the previous question, I think we have our fair share compared to our brand equity, let's say. So answering you, if we maintain our brand equity, we will maintain our share. I think what else -- I think this was your -- the answer to you. So that's it. On the other hand, the water business presented better. I didn't mention, but in the accumulated 18 months, water is just 3% below inflation. This is why soft drinks and nonalcoholic beverage are suffering less in the P&L compared to alcoholic beverages because also alcoholic beverage in the past has had more exposure to devaluation of the currency. Also, remember another thing that we have had a big chunk in terms of devaluation in April. So if everything continue in the current impact, let's say, that the government announced, that this is already predicted, let's say. And we expect that inflation levels continue to lower in Argentina. This is the plan of the government. And for the long term, as I said, this is good. Argentina is a special country. Argentina is coming -- is getting out. It's not cheap. Argentina is getting out from a hyperinflationary economy to a normal standard economy. And this is the price we are somewhat paying as the consumers in order to have a better future.

Our next question is from [ Martin Caldente ] from BTG. He has few questions. I wanted to ask how the implementation of the r- PET law has impacted your operations so far and how you're preparing for the upcoming more demanding targets? What kind of operational and financial implications have you seen? And to what extent have you passed these additional costs through to consumer prices? And secondly, how are you currently seeing the outlook of key raw materials such as sugar, fruit pulp, PET, aluminum and other relevant inputs across your main categories?

Okay, thank you. Again, we have [Technical Difficulty] using the platform. But here we go, I think the second part of the question, I already answered. Where we saw better prices in sugar. We pulled, especially sugar. PET is, I would say, is stable, [indiscernible] PET. The PET we import from China. Aluminum, I said, we are seeing a 25% price stable, let's say. So -- but as I mentioned, input costs are subject to the U.S. dollar. And this is not a good week for us regarding the U.S. dollar going forward. The first part of the question regarding “CirCCUlar and the r-PET Law regarding packaging recycling or PET recycling or PET bottle recycling, I will hand over this question to Joaquín Trejo to give you some color on that.

Thank you, Felipe, and thanks, Martin, for your question. Yes, the impact of the r-PET law can be seen in the cost and expenses associated with our PET recycling plant CirCCUlar. To give you more color on that, in the second quarter, the impact is approximately MXN 3 billion. This is mainly due to two factors: one, the manufacturing expenses; and second, the additional cost of the recycle we've seen over the building we see. And on a year-to-date basis, it's about MXN 7 billion more or less. And obviously, this is significant impact considering our total sale because we are talking about more or less 7% of the EBITDA of the Chile operating segment in the quarter. So yes, definitely. And regarding prices, we think it's difficult to pass this on to consumers. In fact, the prices of the nonalcoholic categories in the second quarter grew in line with inflation. So I would say that passing on the cost to prices is difficult to do so as long as consumers actually don't or do value that. So I would say that, yes, it's a challenge because prices in nonalcoholic categories in Chile grew in line with inflation in the second quarter, not above or well above inflation.

Our next question is from Fernando Olvera from Bank of America.

The two are related to Chile. Regarding the billing performance that we have seen year-to-date, I was just wondering how does this compare versus your initial expectation at the beginning of the year. And my second question also related to Chile is, based on the strong pricing that we have seen, how your market share has performed on beer so far this year.

Fernando, nice to hear your view. So regarding Chile volume performance, as I said, we grew low single digit. And year-to-date, I would say we are flat in terms of volumes. Also because the comparison of the first quarter of last year was a little bit high also the second quarter. But we have capped but with a good seasonally adjusted trend, I would say, only stable because it's stabilized, in the case of beer. So in the last, I would say in the last three quarters, let's say, seasonally adjusted industry volumes in Argentina were stable. So of course, we have less volume or per capita consumption compared to 2021. Remember you about the pension fund withdrawal and the consumption part in Chile, let's say. But -- so we are seeing a stabilization of the beer volumes. Nonalcoholic, on the other hand, we are seeing a positive trend, seasonally adjusted with a very good -- because seasonally, so the quarter was much better than same quarter last year, even seasonally adjusted. And we continue, seasonally adjusted, to see better volumes in the last, let's say, four quarters, okay, in nonalcoholic. So in conclusion, I think it's possible to have a low single-digit growth in beer towards the year. And in the case of nonalcoholic between, let's say, low single digit and mid-single digits, a little bit higher. But this is in the overall equation. On the other hand, we are doing very well in spirits, especially because of the ready-to-drink products. I don't know if I answered your question.

Yes, that's great. And Felipe, and regarding the market share now on beer?

No, I already mentioned in the previous question about the share. Overall, it's stable compared to last year, I would say, stable, which is very encouraging is that it's not stable because it's growing, is our brand equity in the year. This is why the pricing power we have.

Our next question is from Thiago Bortoluci from Goldman Sachs.

I have two, but let me start with Chile, right? When I put together, Felipe, a few of the things that you said, you said stable market share in the year. You said consolidated prices moving above inflation with nonalcoholic growing at inflation, right, which implies you are growing materially above inflation on the year, right? What is driving this momentum for beer, in your view? Like you are growing real prices still keeping market share. Is this about to do with competition moderating? Is this to do with channel mix? What is your assessment on this? I'll pause here and then I have another one in international.

So as you know, the beer business all over the world have suffered from very high inflation in the last year. The driver is our priority in recovering profitability in our businesses. And the category that suffered the month after the pandemic because of raw materials, because of exchange rate, is beer, particularly beer. And the driver is that we have a solid brand equity so it's internal driver at the end in order to increase prices. So we need to recover the profitability we had before the pandemic and that's clear. So we continue our revenue management efforts, working on our mixes. So the good news is that the mix has not deteriorated in beer in the last two years. Despite having a more soft industry, mixes remain the same. And of course, we have a higher market share in mainstream, lower market share in premium, but in spite of this, our market share is almost stable. Of course, in the first quarter, we lost a little bit market share, but we recovered then in quarter 2 while increasing prices. So that's good news, I would say. Did I answer your question?

Clearly. And then if I may, a follow-up in International. We all understand quite well what's happening in Argentina, right? We know the activity momentum, inflation and all the volatility there. But none of this is new to the story, right? Everything was already in place in the beginning of the year with one exemption that is clearly the FX, right, that moved a lot. Now this is more of a conceptual question, right, rather than getting the number. What changed from the first quarter to the second quarter for us to see a shifting to double -- well, mid-teens EBITDA margin in the first quarter to negative 20s EBITDA margin in the second quarter? And again, I know I understand the FX part of this equation. But apart of this, how should we think about the underlying momentum, right, particularly when I compare your performance on a quarter-over-quarter basis?

Our pricing when you compare with inflation deteriorated in the second quarter, along with devaluation of the currency. Let me first start with the devaluation because this is something in the second quarter you need to take into account. And we disclosed this in our press release, if you saw, there is a table, which is the exhibit 7, which is the impact of the hyperinflation accounting. And this impacted us a lot, impacted us around $3 million at the EBITDA level, the impact of the IAS 29, which is the update in the quarter of the first quarter. So the first quarter result is adjusted into the second quarter result. Sorry to mention this, sometimes it's complex to you to take into account that because this hyperinflation accounting is a unique country coming up. So this has an impact also in our results. But anyway, despite the accounting matters, let's say, which deteriorated, I think the pace of the recovery slowed down, although we have a recovery, but it slowed down. The recovery in quarter 1 was much higher when you compare seasonally adjusted with quarter 4, but it seems the consumer has less purchasing power, let's say, -- salaries are below inflation. So it is difficult this thing. Also the mix deteriorated in Argentina. That is part of the equation. So we saw -- and this trend has happened between quarter 2 and quarter 1, to be honest. So a lower pace of volume recovery the gap of pricing compared to inflation wide OpEx, aggressive competition also. But we have to continue to work on efficiencies, on expense control. We think in the coming months, maybe with this good trend in terms of inflation in Argentina along the consumer recover is purchasing power, there would be a more favorable scenario in order to start to close this gap in terms of pricing against inflation.

[Operator Instructions] We have a follow-up question from Vidhi Vira from Goldman Sachs. Can you share color on the health of the consumer in Chile? How are you seeing volumes and pricing evolve in July 2025? Are you in a position to increase prices in the second half of 2025 to maintain and improve profitability?

Yes. I think the sense of the consumer of Chile, as I mentioned, alcoholic beverage, especially beer, stabilized. So it's too early to call how would be the volume. Our business is very -- is a very seasonal business, okay? So it's difficult to anticipate quarter 4, which is very important. The comps in July because of price increases of last year, but seasonally adjusted volumes of July were better than quarter 2. This is the only thing I can mention, that's right. Seasonally adjusted beer volumes were better than quarter 2. In nonalcoholic, also it maintain seasonally adjusted -- the July seasonally adjusted was in line in quarter 2. So we continue to see, let's say, this low middle-digit zone in nonalcoholic, okay? Regarding pricing scenario, Chile is a very competitive market. I cannot forecast that. Always if there are opportunities for management, believe me, we will take them. We'll take them along, see other KPIs, but as market share, our brand equity, it's not just to say, okay, price, how is volume July 2025 were stable. We haven't seen something changing on sustaining our prices already achieved. So a good thing would be, let's say, to further enhance our revenue management. But I cannot commit on that because it would be -- it's a very competitive market.

Thank you. It looks like we have no further questions. I'll now hand it back to the CCU team for the closing remarks.

Hello Everyone, to attend this conference call. In summary, in quarter 2 2025, we almost doubled consolidated EBITDA for a robust expansion in our core operating segment, which is Chile, and a high single-digit EBITDA expansion in the Wine Operating segment. As I mentioned, we still face a very challenging scenario in Argentina. But for the future, we think it is for good, as I said. Revenue management and efficiencies were key to achieve this quarter 2. Moreover, we were able to deliver volume growth in all operating segments and core categories in a context of soft industries. To conclude, and I would like to mention that at the end of this call, this is a very symbolic year for CCU as we are celebrating 175 years of history. We will continue implementing in this year our 2025-2027 strategic plan, supported in our multi-category strategy and our vast business experience to ensure sustainable and profitable growth for our company. I wish you a wonderful afternoon. Thank you, all of you.

That concludes the call for today. Thank you, and have a nice day.

Good day, everyone, and welcome to CCU's First Quarter 2025 Earnings Conference Call on the 8th of May 2025. Please note that today's call is being recorded. At this time, I'd like to turn the conference call over to Claudio Las Heras, the Head of Investor Relations. Please go ahead, sir.

Welcome and thank you for attending CCU's first quarter 2025 conference call. Today with me are Mr. Patricio Jottar, Chief Executive Officer. Mr. Felipe Dubernet, Chief Financial Officer. Mr. Joaquin Trejo, Financial Planning and Investor Relations Investor Relations Manager; and Carolina Burgos, Senior Investor Relation Analyst. You have received a copy of the company's consolidated first quarter 2025 earnings release. The goal is to review our overall results, and then we will then move on to our Q&A session. As usual, before we begin, please take note of the following statements. Statements made in this scope that relate to CCU's future financial results are forward-looking statements, which involve known and unknown risks and uncertainties that could cause actual performance or results to materially differ. These statements should be taken in conjunction with additional information about risks and uncertainties set forth in CCU's annual report in Form 20-F with the U.S. Securities and Exchange Commission, and the annual reports submitted to the CMF available on our website. It is now my pleasure to introduce our CEO, Mr. Patricio Jottar.

Thank you, Claudio, and thank you all for joining us today. In the first quarter 2025, we delivered higher financial results versus last year, expanding consolidated EBITDA and net income by 6% and 10.7% respectively, in spite of a highly volatile business environment. In this context, organic consolidated volumes, this is excluding the volumes of Aguas de Origen and AD in Argentina and Paraguay respectively, were down 1.8%, given by all operating segments amid soft consumption in the region. The higher EBITDA was explained by international business operating segments, largely due to Argentina. We're certain that the scenario for 2025 will continue to be challenging and volatile. Our focus in the coming quarters will be to continue implementing our 2025-2027 strategic plan and its three pillars, profitability, growth, and sustainability, with a special focus on profitability, through further efforts in revenue management and efficiency. At the same time, under the growth pillar, in a difficult context for expanding business scale, we'll focus on brand equity, sales execution, and innovations to address new consumer trends. Lastly, in the sustainability pillar, our goal is to progress in our Juntos por un Mejor Vivir strategy in its two pillars, our Planet and our People. The figures that I will refer now for the consolidated and the international business operating segment results consider organic figures. This is excluding, again, the consolidation of Aguas de Origen in Argentina and AD in Paraguay. Regarding our consolidated performance in first quarter 2025, organic consolidated net sales were up 3%, explained by 4.9% higher organic average prices in Chilean pesos, while organic volumes were 1.8% lower. Higher organic average prices in Chilean pesos were explained by all operating segments as a consequence of revenue management efforts. Gross profit grew 1.7% organically, and organic gross margin contracted by 56 basis points due to higher cost of sales. On the other hand, organic MSD&A expenses expanded 2.7% in Chilean pesos, offsetting inflationary pressures with efficiency. And as a percentage of net sales declined 11 basis points. In all, organic EBITDA reached CLP 130,006 million, a 4.8% organic increase. In terms of our segments, in the Chile Operating segment top line expanded 2.8%, as a result of a 4.8% increase in average prices while volumes were down 1.9%. Average prices were driven by revenue management efforts, partially compensated by negative mix effects in the portfolio. Gross profit decreased 1.1% and gross margin was down 180 bps compared to last year, mainly driven by higher manufacturing costs, a negative mix effect in packaging, and cost pressures coming from higher U.S. dollar denominated costs. MSD&A expenses were 2.7% higher, being practically flat as a percentage of net sales, due to efficiencies that compensated inflationary pressures. Altogether, EBITDA reached CLP 94,400 million, a 2.4% decrease, and EBITDA margin was down 97 basis points. In the International business operating segment, excluding the inorganic volumes from the consolidation of ADO and AV, in Argentina and Paraguay, respectively, organic Net sales recorded a 6.3% increase, driven by higher organic average prices, which more than offset a 1.2% contraction in organic volumes. Organic volumes in Argentina were nearly flat, continuing on a recovery path of business scale compared to previous quarters. Meanwhile, Uruguay and Paraguay posted low and mid-single digit organic volume declines, respectively, while Bolivia grew by low-single digits. Higher organic average prices were mostly driven by revenue management initiatives in all the geographies, more than offsetting cost pressures coming especially from a weaker ARS against the USD, and inflationary pressures. Consequently, organic gross profit expanded 10.7%, and organic gross margin grew 202 basis points. Organic MSD&A expenses as a percentage of net sales increased 32 basis points, mostly from inflationary pressures in Argentina. In all, organic EBITDA reached CLP 33,435 million, a 28.1% expansion, driven by Argentina, Uruguay and Bolivia. The U.S. operating segment posted a top-line expansion of 2.1%, fully driven by a 6.2% rise in average prices, while volumes were down 3.8% compared to last year. Lower volumes were explained by a contraction in the Chilean domestic market industry, while exports from Chile were flat. The better average prices were mostly explained by a weaker Chilean peso and its favorable impact on export revenues and revenue management initiatives in the domestic markets. Gross profit was down 1.6% and gross margin deliberated by 142 basis points due to cost pressures from a higher cost of wine and higher U.S. dollar lean packaging costs. MSD&A expenses were flat and as a percentage net sales improved 56 basis points due to efficiency. Altogether, EBITDA reached CLP 6,592 million, a 1.1% decrease, and EBITDA margin was down 36 basis points. Regarding our main JVs and associated businesses, in Colombia, we posted better financial results versus last year despite a slight contraction in volumes, which nonetheless was slightly lower than the industry. Now I will be glad to answer any questions you may have.

[Operator Instructions] Okay, so our first question is from Fernando Olvera from Bank of America. Your line is now open. Please go ahead.

Hi, good morning everyone and thanks for taking my question. First I would like to explore volume performance in Chile. If you can give us some details of how different was the performance between non-alcoholic and alcoholic beverages and specifically on beer. Also, if you can comment about the performance between premium and mainstream? That's my first question. Thanks.

Thank you, Fernando, for your question. Look, according to Nielsen, our overall market share in the Chile operating segment is stable. Now, making double click, we have gained some market share small in non-alcoholic and we have lost some market share small in beer. Taking into consideration, according to Nielsen data, overall alcohol industry is decreasing in its single digits. These are sell-outs volumes to consumers. Companies publish selling volumes to clients including different channels and thus are not necessarily reflected in market share. But again, market share is total, that Chilean operating segment is stable with a small increase or gain in non-alcoholic and a small decrease or loss in beer.

Okay, and regarding the recovery going forward on volumes, how are you seeing such trends?

Excuse me, regarding mainstream and premium. So, regarding mainstream and premium stable. Look, looking forward, there is a big concern not just in Chile but in the world regarding alcohol patterns of consumption. Probably you have heard about this because it is something which is being discussed in every company producing and selling alcohol all over the world. Look, huge figures. Let's take the consumption of alcohol at 100 degrees. To make this calculation, you take beer and calculate 5%, wine calculate 12%, spirits and calculate 35%, tea is 40%. If you are considering other spirits and you calculate the per capita consumption of alcohol at 100 degrees. This figure in Chile in 2019 was 5.3 liters of alcohol per capita per year, 5.3. In pandemic it increases a lot and after pandemic it began to decrease. In 2023 it was still 5.3, same level than pre-pandemic. But in 2024 it decreased to 5.1. And beginning 2025 the trend is to decrease. The same figures for United States, 7.4 in 2019 pre-pandemic, 7 in 2024. So the decrease in United States has been even higher than in Chile. And global in the world as a whole 3.1 liters in 2019 and 2.8 liters in 2024. There are many hypotheses why it is occurring. If you want, we could discuss on this. My main concern regarding the future are volumes on the alcoholic categories. Indeed, I don't see a disaster, a big decline. But the trends are not favorable. We are making a lot of things to change the trend. Of course on responsible consumption basis. But this is a concern.

Okay. And if I may just one last question. If you can give us more color on the lower tax in Argentina. Which I understand that caused the sharp decline on consolidated taxes. And if this effect is expected in the coming quarters? Thank you.

Felipe could you elaborate on this? Could you clarify that this is related to. This is for the import taxes you mean.

Yes, I mean at consolidated taxes you mentioned that it declined significantly year over year. Due to lower tax in Argentina. Because of inflation. I understand.

I understand your question. This is related to the use of inflation for tax purposes. So usually in Argentina until 2019 we didn't use the inflation for tax purposes. Since 2019 we started to use that. We have some provisions related to that. As Argentina has become more stable in terms of macroeconomics. Or liberating as you know the exchange controls. We decided to release some provisions related to that in the use of inflation for tax purposes. This is the explanation.

Okay. And this effect this benefit is expected in coming quarters Felipe?

Yes. Yes. Because it is gravel.

Okay. Perfect. Thank you.

Look Fernando, one more remark regarding trends of alcohol consumption. My remark before showing a decline in Chile and the United States and worldwide. On the alcohol consumption. It is a long term consideration. If you make double clicks in quarters Q2 last year in Argentina was very poor and Q2 in Chile was very poor. So we expect to have a much better result regarding alcoholic volumes in Q2. But leaving it apart. Because it is a consideration on the basis of 2024. The trend is not favorable. For the industry, according the business.

Okay. Great. Thank you so much.

Thank you. Our next question is from Alvaro Garcia from BTG. Your line is now open. Please go ahead.

Can you hear me?

Yes, we can. Please go ahead. Alvaro we cannot hear you now. Okay. Perhaps you can send us a text question or redial.

Can you hear me there?

Now we can. Yes.

Sorry about that. Wrong mic. Hi Patricio, hi Felipe. I have a couple of questions. One on, how you are thinking about margins in Chile in a stronger Chilean peso environment. Into the second half of this year. Obviously you have had a lot of questions over the last couple of years on sort of where you can take margins over the medium term. And we seem to be getting in a better sort of input cost environment for you. So that would be interesting. And then my second question is on Argentina. I was wondering if you could talk about pricing. Because we were a little bit surprised. I mean I know you are consolidating a water business. Which obviously has much lower pricing. But I was wondering if maybe you can comment a bit on pricing. There was a little bit of a surprise let's say in our model there. What you are seeing from a pricing standpoint as inflation comes down? Thank you very much.

Thank you Alvaro for your two questions. I will begin with Argentina. And then I will jump to Chile. Look it's a big question mark. Because I mean for many years’ prices were key in Argentina. And we had no difficulties to increase prices in line to inflation. Even higher than inflation. Because if inflation amount is 10% and increase prices by 11% or 12%. Nothing happens. Consumers are there paying for your products. Now inflation is decreasing a lot. And after the liberation of the exchange rate. The exchange rate remained almost stable in Argentina. So there are different opinions. What is going to happen with inflation in Argentina? Some people think that inflation will continue to be 2% per year. Some people are saying that it will move to zero very rapidly. And there are opinions also saying that probably we will have negative inflation. That is the first remark. Second remark. There are some services which are adjusting their prices. So there is a hidden inflation which will come from those services. Which prices have been controlled? So we expect that the price increase of the industry -- of the consumer products industry will be lower than official inflation for this effect. So we don't know. We are not sure. I prefer to think that inflation is going to be very low. That it is going to be very difficult to continue increasing prices. And that we have to compensate this with input costs. Which are helping. And with strong efficiency programs on SBA. This is what we are doing. If inflation continues to be 2%. Indeed, we will have to increase prices. Otherwise we will have a huge gap. Which is impossible to find. But again. This is executing every single day. But summarizing. If inflation continues being high 2% to 3%. We will continue increasing prices. In line with inflation and more. It is possible. If inflation collapses and goes to zero. We will not be able to increase prices. In both cases we are making strong efforts in reducing expenses. Regarding margins in Chile. We have been increasing prices to compensate the prices that we didn't increase in the past, when the cost of raw material the input cost jumped a lot. We are recuperating margins quarter after quarter and we continue with this trend on one hand. Input costs are helping. And we are being very extreme. On being efficient in our expenses. Altogether we expect to recuperate margins. Having said that. The comparison basis in Q2 2024 was very weak. So we will have a good Q2. But this is something exceptional associated to the weak basis of comparison for 2024. But in the long run, it will start to give great margins.

Great. Thank you. A follow-up on the Argentina element. Would you say that in the first quarter, you passed a little less price than usual? Or was it just pretty standard from a core organic standpoint?

Yes. Definitely less. In 2024 we passed more than inflation to prices. And in Q1 the trend continues, in Q2 it's extremely difficult to increase prices. This is the reason why I think that inflation is going to collapse very soon. I personally think that inflation will move in the range of 0% to 0.5% for maximum 1% per month. Because we realize in our categories. We see the market that prices of consumer goods are very stable and it is very difficult to increase prices.

That’s clear.

We need to see. This is what we are seeing today.

Thank you.

[Operator Instructions] Our next question is from Felipe Ucros from Scotiabank. Your line is now open. Please go ahead.

Thanks operator. Well, Patricio, Felipe and team thanks for taking my question. My first one is around costs. The release mentioned. That you experienced higher manufacturing costs in Chile. I was curious about the language about it being around manufacturing rather than raw materials. Can you expand on what exactly were the drivers for these costs? And then I will have a follow-up after that. Thank you.

Indeed, Felipe. There is one time -- Felipe, why don't you elaborate?

So, the manufacturing costs were due to two reasons. One was about inventory depletion. As we have reduced inventory, at the end the allocation of fixed costs was higher than a year ago. So it is an accounting issue or matter. On the other hand, higher labor costs. That we experienced in Chile. Because of some -- we needed to improve our operation plan. Because we incurred in overtime and this was due to higher labor costs. And also included some write-offs of some lines. That we are not using anymore because they were too old and we replaced by new technology. So we incurred on extra depreciation costs. As we have allocated write-offs in the Chile operating segment in the depreciation line. So we have two write-offs that Patricio mentioned. One is related to write-offs in the Chile operating segment and the second is, we have less inventory than last year in Chile. So it was affected by the allocation of fixed expenses as an accounting matter. And the overtime. That is an inefficiency. Because of let's say, not too good sensor operation, but we have a project. That is called [indiscernible]. That we did some disclosure on that and we are now report that we are working on improving our plan. So we oversee that in the following quarters we should deliver efficiencies and be more efficient in manufacturing.

Very clear. And my next question was actually around efficiency. You managed to maintain your efficiency levels despite having negative volumes. Which is not easy to do? So it seems like your efficiency program is beginning to work. Can you expand a little bit on how far along you are in that program and how much more you expect?

Okay. Thank you for your remarks. More than beginning to work, it has worked for many years. Here we have the figures but the MSD&A has declined by 5 or more percent in a longer period of time. But we are putting much more pressure today on this. As we expect volumes of alcoholic products to be tough in the future. As I mentioned before and as I expect that in Argentina we have tough times. So tougher times regarding prices. The combination of these elements supplies us. So calling our premium to be much more stern when executing efficiency programs. We are moving in that direction.

Let me ask a follow-up on the efficiency side. Are you reducing marketing expenses in any way? Or is that part of the SG&A, kind of the plan is to maintain it consistent and draw the efficiencies from other lines.

No. Particularly on sales efforts we are replacing a lot of functions made by sales people through technology with a lot of success. In a few words, typically for many years our salesperson had four responsibilities. Number one, to recommend that the client looks to buy. Number two to execute on place the order. Number three to execute in the point of sales. And number four, to keep a good personal relation with the client. On these four activities, the first two are completely -- could be completely replaced by technology. Today, our artificial intelligence programs are much smarter than our sales force to recommend the client to buy number one. There are much more efficient ways to place the orders through digital on the other. Sales force is still. Extremely important. To execute in the point of sale and to have the personal relation with the client on the order. We need less sales force to do this and more technology. We are moving rapidly in this direction. If you look at our MD&A especially in Chile, which is the main operating segment. They were below inflation by 2.7%. While marketing expenses were above inflation. So it mean that we are making efficiencies as Patricia said, in sales but also in distribution. Distribution also necessary because it is a big chunk of money there. As you know current efficiency warehouses. There we are perfectly in the good path. Let's say efficiency program. As I said, if we maintain this path of growing our expenses less than inflation while maintaining or investing better in marketing. That is a good sign, Felipe. In fact, we measure four times per year the brand equity of each one of the brands of our portfolio and the brand equity of each one of the brands of our competitors. And the indicators. Of Q1 2025 for like key categories show us that our brand equity indicators are one of the highest. Historically in the last 10 years that our portfolio today is extremely healthy. And this gives us a lot of confidence on having good volumes, good market shares, good prices to continue improving our profitability.

Very clear. Thanks a lot for the color.

Thank you. Our next question is from Ewald Stark from BICE Inversiones. Your line is now open. Please go ahead.

Good morning. Thanks for taking my question. In the press release you mentioned that competition and the context remains highly volatile and you expect to do so in the coming quarters. I wanted to ask how do you expect competition -- how aggressive do you expect competition to be in Chile in the remaining of the year?

Thank you Ewalk for your question. Look, competition has always been very tough. I know the categories where we participate in Chile and other countries. I think that this is not going to change. At the same time this my main comment. The good element -- the tough element of having tough competition difficult to make money, to increase prices, to increase margins. But we would like to do this particularly to efficiency. The good thing of tough competition is that it promotes per capita consumption. Which is key. Because as I mentioned before the alcohol consumption all over the world is under pressure for many reasons. And a lot of competition, a lot of innovation, a lot of marketing, a lot of execution at the point of the sales contributes to offset those trends. Let me give you one example which is a very clear signal of this. Per capita consumption in Chile in beer. We compete strongly in beer. Per capita consumption in beer in 2014 10 years ago it was 44 liters. Per capital consumption beer in 2024 10 years after was 54.2. 10 more liters per capita. In the United States in the same period, per capita consumption has increased from 34 to 46, 74.5. To 59 liters. In the world from 25.4 liters to 22.7 liters. So it’s we have been competing in a very tough way. There is more categories for many years, it will continue. But I think as mentioned, it is good for categories. We are not afraid of this. It obliges us to improve our capabilities day after day. And finally as I mentioned before. The high level of brand equity. Measures quarterly. It got a maximum level in the last 10 years. In the last many years in most of our categories. So we are very glad on that. It will allow us to be a strong competitor in Chile and the other countries where we participate.

Thank you. Our next question is from Constanza Gonzalez from Quest Capital. Your line is now open. Please go ahead.

Good morning, Patricio and Felipe. Thank you for the call and for taking my question. I have a question regarding Argentina. For example, considering that you are seeing a recovery in the economy. Do you expect that volumes in the next quarter are going to increase? And the second question with this the degradation of the economy, do you expect to bring more dollars from Argentina to Chile. How is going to be the process. I would like to appreciate if you can give us some color about that change? Thanks.

Indeed, Contanza. Look, regarding volumes in Argentina, pre the presence of Mr. Milei, when inflation was very high, there was a lot of money in the pockets of consumers. Before the adjustment the running rate -- the volumes of the last quarter adjusted by the industry, let's say it was 100. In the worst moment in 2024 that was Q2 and Q3 volumes of the industry decreased and maintained by 20%, were if handed before were 100%, today we are in 90%. Now just in the middle of the road between pre-adjustment and the worst moment after adjustment. My remark number two. The worst moment of the adjustment was Q2 and Q3 2024. So we expect to have a good growth in volumes compared to those figures. But again 90% is less than 100%. So the industry is stabilizing in a level which is 10% better than the worst moment and 10% lower than the pre-adjustment movement. And then on your second question, I will ask Felipe to elaborate.

Now this was regarding the new measures announced on April 14 by the Argentinian government. Yes, the central bank announced an agreement first with the international monetary fund. Which is good. But also included comprehensive financing package. A new regulatory framework for exchange rate controls. These announcements of course for the futures are very positive. Because for results or income delivered from financial statements, from 2025 and thereafter, we would be able to bring dividends from Argentina. Which is good news for the future. I cannot tell you, if we will bring or not, it will depend on our results and other accounts. And also it was announced a new bonus for our reconstruction of a free Argentina delivering in Spanish. That would allow us to settle some accounts with some commercial partners, that we have foreign rate exposures in our P&L, which is positive. But also to pay some unsettled share sales from the holding company to Argentina. So. First is to settle the accounts, would be the first objective. And then of course for the future is positive, that we could bring dividends from the results from 2025 and thereafter. So we see with very good eyes this new announcement of the government.

Okay. Thank you for your answer. I have a follow-up question. In relation with the shingles in trends. What is, -- I'm sorry, which is the level of margin EBITDA that you feel comfortable for the long term?

See, we do not make projections publicly for the long term. But we are trying to recuperate the EBITDA margin in the year business both in Chile and Argentina.

Okay. Thank you. Thank you for your answers.

Thank you. We have a follow-up question from Fernando Olvera from Bank of America. Your line is now open. Please go ahead.

Great. Thanks for picking up my question again. I would like to hear your thoughts about the weak demand in wine, in both local market and exports. Is there any other reason beside a lower demand of alcohol? And also how do you expect volume to behave the remaining of the year given that you will face easier comps? Thank you.

Thank you Fernando. I mentioned before the trends to reduce the alcohol consumption on the whole alcohol category. But if you double click the wine category has been the one suffering the most. Figures, this is Chile. 2019 the per capita of wine is really stopped investments in wines. The per capita in Chile 2019 12.7 liters. 2024, 10.5 liters. 2025, continually declining. The United States wine as 2019. 9.8 liters. 2024, 8.4 liters. The world as a whole which impacts on our ability to export per capita in 2019, 3.8 liters. 2024, 3.3 liters. Among all the categories the one suffering the most is the wine. The beer and spirit categories have been able to defend themselves. I think that because the wine categories are much more conservative and the beer category has been bringing a lot of innovation and the spirit category has been much more innovation, particularly on flavors alcoholic products which are growing a lot. Low alcohol flavor sparkling those categories are increasing a lot and we are promoting strongly those categories based on beer business. Spirit are also based on wine, we have been able to defend volumes and profitability by doing this. And we expect those categories to grow a lot in the future. Regarding this year, we prefer not to make public estimations. Of course we have our own estimations, but we prefer not to make them public. But again, the trend is complicated as I mentioned before particularly for wine. But we are trying to offset these trends by pushing a lot of those flavors or the low level of alcohol, non-alcoholic products, beer without alcohol. Sparkling wine without alcohol. We expect those categories to grow in the future and we are pushing a lot. With a lot of margin because those categories make sense because they bring volume and they also bring margins. At the very beginning you have to invest in marketing, you have to generate a little bit of additional costs in your operation. But we are convinced that they will be extremely important in the future. Not only in the future in the near future. That's it.

Okay. Great. Thank you so much for the color.

Thank you. We have a question. From Santiago Petri from Franklin Templeton. Good morning. Thanks for the call, do you perceive a change in consumption habits towards beer consumption globally? Why are sodas doing better than beer? What is your outlook for beer consumption in the future?

Thank you Santiago for your question. It's a key question that probably you texted this question before my last remarks. But again I will repeat some figures and give you information on this. All over the world in the last 10 years, let’s compare pre-pandemic with post-pandemic. Beer in all over the world the per capita was 23.9, in 2024 it was 22.7. So a decline but not as important as in the case of wine. In the case of Chile, per capita in 2019, 52.2, in 2024 54.2. So we have been able to move in a different direction than the world in the beer category. Among other reasons in the tough competitive environment that we have in Chile, so apply all competitors to be very smart promote our volumes. So we have been able to move in the right direction. In 2025 the trend is not good. As I mentioned before and it shows. I would say that this is the key challenge for all the companies producing alcohol all over the world. And we are facing this challenge. But indeed it is a challenge.

Thank you very much. I will now be passing the line for the CCU team for the closing remarks.

In summary, the first quarter 2025 we were able to deliver higher financial results expanding EPA. And the income in a challenging business environment for volumes and continues costs pressures. Ii line with our priority of recurring profitability, we implemented revenue margins across all operating segments, while continue to deliver efficiencies. Furthermore, in 2025 we are celebrating 175 years of history. We have overcome many challenging times by being a dynamic and innovative company. Capable of adapting to transformations in Chile and the other countries where we have expanded our operations. This past business experience, will be key to navigating the current uncertain business scenario, especially in terms of consumption trends and the change rate politics. Thus we continue implementing our 2025-2027 strategic plan, supporting our multi-category strategy to ensure sustainable and profitable growth for CCU.

This concludes the call for today. Thank you and have a nice day.