Compañía Cervecerías Unidas S.A. (CCU) Earnings Call Transcript
November 4, 2026
Earnings Call Speaker Segments
Good day, everyone, and welcome to CCU's Third Quarter 2026 Earnings Conference Call on November 4, 2026. Please note that today's call is being recorded. At this time, I would like to turn the conference call over to Claudio Heras, the Head of Investor Relations. Please go ahead, sir.
Welcome, and thank you for attending CCU Third Quarter 2026 Conference Call. Today with me are Mr. Eduardo Rodríguez, Chief Executive Officer; Mr. Eduardo Rodríguez, Chief Financial Officer; and Mr. Thomas Munizaga, Financial Operations and Investor Relations Manager. You have received a copy of the company's consolidated third quarter 2026 earnings release and also our financial statements. The call will start by reviewing our overall results, and we will then move on to a Q&A session. Before we begin, please take note of the following cautionary statement. The statements that we make here in this call 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 the additional information about risks and uncertainties set forth in CCU's annual report submitted to the CMF and in Form 20-F filed with the U.S. Securities and Exchange Commission, both documents available on the website. It is now my pleasure to introduce our CEO, Mr. Eduardo Ffrench-Davis.
Thank you, Claudio, thank you all for joining us today. In the third quarter, we delivered higher financial results and continue to strengthen our regional competitive position under our new strategy, [indiscernible] and fast framework, which entails increasing our focus on the business, act with greater agility, boost operational synergies and accelerate our transformation. Overall performance in the quarter was sustained by a 15.5% increase in net sales based on higher consolidated volumes, which grew 4.4% with all operating segments expanding mid-single digits and an active revenue growth management. In addition, we delivered efficiency gains in key areas of the business across all operating segments, more than compensating restructuring expenses, which will drive operational synergies and efficiency gains over the medium term. As a consequence, consolidated EBITDA grew 13.4% and EBITDA margin contracted 20 basis points. Excluding restructuring expenses in the 3 quarter of '26 and 3 quarter '25, EBITDA would have expanded 21.3% and EBITDA margin would have risen 59 basis points. In addition, net income was 5% above last year. The stronger financial performance was mostly driven by a 16.3% EBITDA growth in the Chile operating segment, alongside EBITDA expansion in the international business operating segment. On the other hand, the wine operating segment contracted EBITDA mainly due to the industry headwinds, which we are actively addressing through innovations, restructuring and efficiencies. The positive performance through the first 9 months of the year was reflected in CTU net cash flow from operating activities, which increased 60.3% as of September 2026, backed by EBITDA growth and disciplined working capital management. At the same time, we maintain a prudent CapEx allocation, focusing on our transformation projects that drive medium-term efficiencies. As we advance towards the execution of our 2 strategic plan under our B for mass strategy anchored in the past framework, we have defined 6 strategic priorities to accelerate our top line and to deliver profitable and sustainable growth across the region. These are the following ones: Number one, revitalizing volume trends in alcoholic beverage by unlocking new consumption occasions while promoting responsible consumption. The second one, strengthening our market positions in challenger categories and geographies through customized commercial strategies one by one. Number three, capitalizing of the conscious wellness trends by expanding our better-for-you portfolio in alcoholic but also in nonalcoholic categories. Number four, developing our multi-category portfolio around consumption occasions. The fifth one, transforming our commercial route-to-market and revenue growth management capabilities through advanced analytics. And the last one, accelerating the end-to-end logistics and industrial transformation to optimize our cost to serve and enhance supply chain agility. These priorities will be enabled by our digital transformation, talent and culture alignment and a more agile and redefined role of the corporate center. We are confident that this road map will reinforce CCU's regional footprint. I will now pass the call to our CFO, Felipe Dubernet, who will give further details about our performance by operating segment and the JVs during the quarter. Felipe?
Thank you, Eduardo. The Chile operating segment expanded top line by 6%, led by 5% higher volumes and 1% higher average prices.aloholic categories grew high single digit and alcoholic categories, which encompasses beer and spirits posted a low single-digit increase. During the quarter, we gained overall market share in alcoholic and nonalcoholic categories, supported by brand equity driven by brands such as [indiscernible] and Heineken in beer and Pepsi, Mani and M in nonalcoholic. Flavored low-alcohol ready-to-drink products led by brands such as stone in beers and Inralpirits continue strong momentum with volumes growing double digits and representing 6.6% of total alcohol in the quarter. Average prices rose due to revenue management initiatives in all categories, partially offset by mix effect. [indiscernible] profit increased 5.6% and total expenses grew 2.5% below inflation, improving 151 basis points as a percentage of net sales originated by [indiscernible] which more than offset higher oil prices and the already mentioned restructuring expenses. Altogether, EBITDA rose 16.3% and EBITDA margin expanded 141 basis points. In International business operating segment, net sales increased 52.8%, boosted by 46.4% higher average prices in Chilean pesos and 4.4% higher volumes. Higher average prices in CMP were the result of revenue management initiatives, mainly through pricing actions in Argentina in line with inflation in local currency on a year-to-date basis and the positive effect from hyperinflation accounting. Volumes in these segments were larger than last year, mainly explained by Argentina, boosted by low teens volume expansions in alcoholic categories due to a weak comparison base in quarter 3 of 2025, gaining market share versus last year in beer, partially offset by mid-single-digit contraction in nonalcoholic categories in this country. [indiscernible] decreased 180 basis points, reflecting higher cost pressures in raw materials, especially aluminum. Total expenses as a percentage of net sales contracted 97 basis points. EBITDA was up 7.1% versus third quarter of 2025 and EBITDA margin improved by 59 basis points. The wine operating segment posted a net sales expansion of 3.4%, mostly driven by 4.9% increase in volumes as average prices contracted 1.4%. Higher volumes were explained by the Argentine domestic market, more than doubling volumes versus last year, fueled by a strong performance of our brand [indiscernible] extension innovation. Chile domestic market and export contracted 4.5% and 1.9%, respectively, in line with industry trends. The decline in average prices was associated with a strong Chilean pesos against the U.S. dollar, which impacted negatively export revenues and mix effect. profit grew 2%, although margin contracted 68 basis points. Total expenses rose 15.1% as a percentage of net sales were up 46 basis points, mostly due to higher restructuring expenses. Altogether, EBITDA contracted 35.5% expenses, EBITDA was down 11%. During the quarter, we kept pursuing efficiencies and continue accelerating high-margin innovation by our multi-category production capabilities to to gradually recover scale and profitability in this challenging scenario for the wine industry. Regarding our main joint venture and associated business in Colombia, first, we want to express our deepest sympathy and solidarity with the people affected by the recent earthquake. Regarding our performance, we posted low single digit volume growth during the quarter, impacted by temporary route-to-market disruption in certain affected regions. Now, we will be glad to answer any question you may have.
[Operator Instructions] Our first question comes from Thiago Bortoluci from Goldman Sachs.
I would just like to explore a little bit better your performance in Chile, right? So, it would be very helpful if you could comment on how volumes and your true rate pricing behaved, particularly for beer, soft drinks, and water, please. Thank you very much.
Apologize for that. So, Thiago, thank you for your question. Yes, the results on Chile were very, very good. This is mainly explained by market share gains in every different segment. We have gained a low single digit on alcoholic, which includes beer, spirits, and wine in Chile. And we are gaining around 100 basis points in non-alcoholic business in this quarter. So, both businesses, alcoholic and non-alcoholic, are increasing their volume, mainly through market share gains. This is one thing. The second thing is the prices are seeing very, very well. Both categories are -- at least alcohol categories are in line with inflation. So the prices are in line with inflation rates. And in the nonalcoholic categories, we are a little bit below inflation rates, but due mainly through mix mix effect. If you are excluding the mix effect, we are above the inflation rate. And why this mix effect is affecting the price is because we are selling more water, especially more water, which is in terms of pricing, it's below the other categories, but in terms of margin, it's a very high margin product as well. So especially the mineral water. So our growth is mainly explained by our commercial strategies and having some effects -- positive effects on the market share and without decreasing our price performance. I don't know, Felipe, if you want to complement something.
No. As a nutshell, we have a very good growth in both in alcohol growing for the first time on the year 1 single digit and in nonalcoholic mid-single digit.
Our next question comes from Alejandro Fuchs from Itau BBA.
Congrats on the results. I just have one very quick one regarding volumes. I think -- it was very impressive to see all the volumes pretty much growing during the quarter. I wanted to get your sense maybe on how you see sustainability, especially for the alcoholic part of the portfolio. Do you think that we have maybe reached the bottom and now you think things should continue to improve given your commercial strategy? Are you maybe a little bit more optimistic about 2027 for the alcohol part of the business?
Thank you, Alejandro. It's a good question. It's not easy to answer based on because it's a future. But we have seen 2 main things. The first one is that we are improving our alcohol volumes through innovation. That means that all the different consumer occasions that we are pressing with, for example, RTD products, Campanario, Mistral Ice on the spirit side and beyond beer products like, for example, all the things that we have done with stones and seasonable beers that improves the frequency of purchase are giving us a good future looking. So we don't know if we are in the bottom part of the per capita consumption in terms of alcohol, but we know that our innovations are being very successful trying to recover that trend. So the short question is we don't know yet, but the things that we are doing are having results. That's my answer.
Our next question comes from Felipe Ucros from Scotiabank.
A couple on my end. The first one on utilization. Volumes were very high in quality, right, up in all segments. How important is this for you in terms of utilization of your fixed assets and the dilution of fixed costs after what has been a couple of hard years. Is this something that immediately starts to move your needle when volumes start moving up like this? And then the second one has to do with the trajectory of your restructuring project. It looks like you have obviously a very big project on your hands. Wondering if you can give us an idea of what that trajectory looks like, -- meaning where is the peak in the restructuring charges? And maybe if you can tell us more or less in how long you think you will be done with the project, mostly to help us on the analyst side kind of build this into our models, that would be super helpful.
Thank you, Felipe, for both questions. Let me answer the second one. In terms of our trajectory of restructuring costing, we are already finished with the Stage 1, which is basically restructure our businesses in Argentina and restructure our businesses in Chile, mainly wines and spirits. We combine our sales force. We have done -- we have reviewed all the different macro process within those those business units integrated in one. And all that stage, it's already done. Now actually, we have implemented 100% fully 100% in every single operations. We have adjusted all the systems to operate these synergies. So on the future, we are going to see the benefits of these synergies and no more restructuring costs. The second stage, and we are reviewing all the different macro process as a whole, it's more involving the transformation area. So the transformation area is reviewing the different macro process, which are mainly focused on logistics and industrial footprint in order to gain more synergies of those cost buckets. And we are reviewing all of them in the different geographies -- and probably we have more restructuring activities in both areas. But it's more in an ongoing process in terms of transformation, adopting new technologies, changing the processes that we are doing certain things and for sure, culture and talent management. That's my answer on the number two. Number one question, maybe.
Regarding capacity utilization and volumes, Felipe, in the last decade, we -- the shape of our CapEx was driven by capacity expansions, especially in beer because I think per capita consumption was growing. As you know, the reach in Chile jumped from 2014 from 44 liters per capita to peak in 2021 of 64. So a lot of capacity expansions were done in our breweries. On the other hand, also in nonalcoholic, we need also capacity expansion. So regarding our alcohol network or alcohol utilization is lower than in nonalcoholic in Chile. However, which is good in alcohol is that we have capabilities of synergies we can do to produce the ready-to-drinks in our breweries. As we have higher speed lines and we have higher efficiencies, it makes us a competitive advantage by producing products there also avoiding logistic costs from plant of 400 kilometers north of Santiago. So at the end, we have that capacity in ready-to-drink is doing very well. We don't need significant investment to innovate because, of course, innovation makes our portfolio a little bit more complex. We need to be conscious also of tackling the tail and see what works and what doesn't work in innovation. But so far, the tremendous success of a brand like Cantal has been possible using the current assets that we have -- regarding nonalcoholic, we did capacity expansion this year because the category is doing very well, especially enhanced water or flavored water with the brand mass as we highlighted in our commentary. And we have -- and going forward, more of the CapEx will be more oriented towards transformation, as Eduardo said, to get more efficiencies on that, control towers, real-time operation more than in capacity. So at the end, this will -- in the medium, long term, we have enough capacity.
That's very, very clear. Great news on how you're redeploying that excess capacity to RTDs. Correct me if I'm wrong, just a very quick follow-up on the first piece. It sounds like Stage 1 was a lot more restructuring expense heavy and it sounds like Stage 2 will have to do a little bit more with CapEx or even though the CapEx is not going to plants, it seems like it's going to capabilities. Is that the correct read?
Well, it's a correct read in terms of -- it's more heavily in terms of people. The OpEx of restructuring in the Stage 1 was very important, especially for [indiscernible] Argentina. The Stage 2, it's more including all the transformation technologies and review all of our micro process in order to gain synergies. those synergies could be gained from, I don't know, for sure, expensive human resources expenses, but also and more importantly, for real-time control in terms of all the other expenses, for example, maintenance in terms of industrial areas, for example, in terms of kilometers that our trucks are doing every single day. All these kind of synergies that a company like us, which is so big in terms of scale are very helpful and very necessary to get a competitive advantage, and we are decided to use our synergies in order to be more profitable and be more and improve our top line growth. All the not necessarily efficiencies are helping you to reach the EBITDA through expenses, but also are gaining momentum in terms of top line growth. So it's quite okay how you read it, but it's not necessarily more CapEx.
Our next question comes from Kevin Zavala from UBS.
Two questions on my side. First on international. Beer volume growth was very positive in the quarter, especially when compared with peers. So I just want to -- I would like to double-click here on nonalcoholic beverage, mainly on your water portfolio in Argentina. If you could help us set expectations going forward and explain the strategy to regain traction as well as the role of this nonalcoholic portfolio in our strategy in the country. And the second one regarding innovation. If you could give us more details on your plan to transform the route to market and revenue growth management with digitalization. I mean what are the mechanisms and the main tools you are implementing to achieve this goal? Which metrics are you monitoring? And what levels do you aim to reach?
Okay. So thank you, Kevin, for your questions. Yes, Argentina, as you already know, it's a not an easy country. As you know, all the growth that we are seeing in Argentina in terms of investments are not necessarily going through the market. So in this case, nonalcoholic business, it has a more -- it has a very easy to -- especially water. If you are not having money on your pockets, you are going to switch between bottled water to tap water. So for water business, it's not an easy thing to play in a difficult macroeconomic area. In that sense, we're still investing in our brands because we have a very interesting brands in terms of brand equity. [indiscernible] is a powerful brand in terms of mineral water, so they can ask for a price premium in that area. And [indiscernible] was a very important brand in terms of flavored water. We are doing some adjustments in order to recover that position, but it's a very interesting one. But the main strategy over there in Argentina is to play alongside the total nonalcoholic categories. We are not only going to play in waters competing against brands or plain water or the Coca-Cola system. We want to compete in the different categories that can fulfill need states and states in different occasions for our consumers. So the strategy is not only based on trying to sell plain water and trying to navigate the macroeconomic downtrends. It's also to play as a multi-category operator, which is something that is defined by our DNA, and it's -- and we will implement it in Argentina through innovations and through going to play in a multi-category nonalcoholic environment. The second question was about route to market, sorry, and RGM details. For sure, I can't say too much on them because some of them, the majority of them are confidential. But in the route to market, we are going to in terms of our philosophy, we are going to try to go deeper in a segment of one. Segment of one is a granularity. So in order -- when you have more granularity about your clients, about your SKU per client, about your geographies, you can implement a better route-to-market promotions, a better route-to-market systems, a better route-to-market from our salespeople. And we are going to move from an order-based system to a next how to say this next best action system, which is going to guide us and guide our salespeople to implement different actions in the point of sale in order to create more top line growth, not only to get the purchase order, but also to implement a better actions in order to pull more volume from our clients. In the revenue growth management, there are several different alternatives that we are pursuing, but all of them includes algorithm and AI that will help us to improve our ROI in promotions, our discount management and our PPA, our portfolio price pipe architecture according to our big bets. We have talked about the strategic priorities, the 6 strategic priorities that I talked at the beginning of the conference and all of these RGM tools, we are going to improve our 6 big bets. I cannot tell any more about it, but we are going to face on that direction.
[Operator Instructions] Our next question is a text question from Roberto Segers from Impresas Senta. Looking 5 years ahead, how do you envision CCU evolving? What should investors expect to see materially differently in the company compared to today?
Thank you, Roberto, for your question. For sure, as you already know, we don't have a forward-looking policy in terms of numbers and figures. But what has said is how do we see CCU looking 5 years ahead. I see a CCU recovering the downtrend in alcoholic consumption. So we are leaders on -- not only in Chile, but also in Argentina, we have a very strong position in Colombia, we're gaining momentum. So we are seeing -- trying to recover the downtrend in terms of alcoholic. We see a better competitive position in our challenger markets and in our challenger categories. We are leading in capitalizing the better-for-you trend. We are very good at it. Our -- especially our nonalcoholic portfolio is built on that trend, especially for waters, flavored waters, functional products, juices and nectars and so on. So we are -- we see us leading that trend. We see CCU evolving to a new model based in consumer occasions and not in portfolio product system. We believe that we have to serve our consumers based on wood states and mid states in different consumer occasions. It doesn't matter which category is fulfilling that [indiscernible]. We see CCU with a new route to market and with new RGM tools, managing the business in real time. We see operation -- in terms of operational system, we see a more end-to-end optimized supply chain, improving our -- how to say this, our expenses against the top line growth. And finally, we see CCU a more agile organization, more empowered and thirsty for more, thirsty for growth, thirsty for going to the second stage and to the end of our [indiscernible]. So that's my key. It's very philosophical, if you want to say in that way, but it represents the way that we want to see the company of the future.
Thank you. And the next question from Roberto. What do you think the market is currently missing or underappreciating about CCU?
Yes, it's a very difficult question, but I could mention 3 different things. The first one is our multi-category model. If the consumer is going, the trend for our consumer, it's more oriented in terms of consumer occasions and not based on product or category segmentations. We think that CCU's portfolio and CCU way of working, it's very well positioned to manage those things. Why? Because we are a company truly multi-category. We know our consumers from 0, 1 years old until 100 years old. We know our customers, our clients in the whole value chain because, for example, in Chile, there are certain clients that only commercialize alcohol products. We know them all. We have synergies in terms of combining nonalcoholic products, wine products, RTD capabilities that could face better the consumer trends on the future. This is the #1 reason that I think that it's underappreciating CCU on that way. The second one, it's our portfolio. It's better prepared for future trends in terms of consumers, better-for-you trends, nonalcoholic -- for example, our nonalcoholic products portfolio, it's mainly based on consumer groups. When you see trends in the, I don't know, in the U.S.A., in Europe, in other countries, all the markets are going towards what we are trying to play now. I'm not going to talk about competitors for sure, but I think our portfolio, it's a future-proof portfolio compared to the other ones. And the last one, I think that the market is underappreciating our future performance in high potential markets. Obviously, we haven't done in certain geography, we haven't done well, but I think that we have prepared our portfolio, our capabilities and our route to market in those markets in order to harvest now the benefits. We have implemented a very solid portfolio in Paraguay. We have done very huge investments in Argentina. We are betting for Colombia during these last 10 years. And we believe that now our portfolio is better prepared to compete with high-end competitor, giant competitor overseas. So those 3 things, I think that are very interesting when you see CCU on the future.
We have a follow-up question from Felipe Ucros.
Yes, A couple of follow-ups on my end. I wanted to make sure everyone got their time in, but since you have some time left over. I wanted to ask about flavored low alcohol RTD products in Chile. Obviously, very good growth here and obviously more important for the business as a whole. It's already relevant in the mix. We already at 7% in the mix from the data that you guys gave. So what are you doing differently here? And are you -- do you feel like you're ring with the tide? Or do you think you're leading the tide? I think you've sort of answered the question a little bit in your last one, but if you can tell us a little bit more about what you're doing there. And also in Argentina, you're in alcoholic beverages and alcoholic beverages has been trading for quite some time in Argentina. So I wanted to get your views on what turned around this quarter, whether it was an industry thing or the launch or purely based on the launch that you did?
Felipe, thank you for your question. Let me answer first Argentina. Argentina, it's -- we have been there for 30 years. We are playing not only now in alcoholic beverage, but also in nonalcoholic beverage. We still believe in Argentina profit pool. Obviously, there are some challenges as always in Argentina, but we have done this JV with Danone on the nonalcoholic beverage because we want to implement a multi-category approach in Argentina. So we are moving fast to install certain capabilities, not only in route to market and RGM, but also in terms of innovation pipeline in Argentina in developing new categories, new way to fulfill consumer occasions. So on the future, in Argentina, you will see in nonalcoholic business, CCU playing in different categories. giving alternatives for consumers in those areas. The consumption of CSDs in Argentina is very similar than the one that we have in Chile. We have done it in Chile with very successful with the [indiscernible], we want to play the same thing on Argentina on the future. In terms of alcoholic beverage in Argentina, you have seen Felipe mentioned, we are doing a great job with ciders. We started the distribution network with Pernod Ricard in the north of Argentina. So we are building a broader portfolio in terms of alcohol. We are playing with innovations in beer, not only in flavored beers, which is -- we were the first one with Schneider, but also in the better-for-you alternatives for our consumers in the beer as well. So you will see a lot of innovation in Argentina, but mainly implementing the same strategy that we have done in Chile, a multi-category approach, trying to fulfill consumer demand in their different occasions. That's my answer about Argentina. I don't know if you want to complement something, Felipe. The other question. It was around flabored. I didn't understand, It was flavor nonalcoholic or flavor in beer.
In alcohol... Flavored low alcohol RTD products, which I I think you mentioned was around 7% of the mix at this point.
So, okay, we talk about RTDs in CCU. What is the the success around it? It's it's mainly connected with consumer trends. Young people, especially young consumers, are willing two things. They want to test diverse flavors, diverse alternatives. They are now buying for repertoire. They are not buying only one single product. Imagine myself 25 years ago, if I'm going to a barbecue, for sure, I'm going with one single product, one single beer, one single pisco, one single -- maybe one single CSD. Nowadays, the consumers are buying repertoire. They are not going with one single product. They are going with different alternatives because they want to taste more things. This is something that it's critical. And the other thing, the success part of the story is that young people don't want so many entry barriers to the product. For example, let me put an example, the wine. If you want to drink a wine, you need to drink the whole bottle, first of all. Then you need the cola, you need -- you need to drink it a certain temperature, you need to drink it in a certain glass. You have to mash with special food. And nowadays, consumers don't want all the kind of sophistication or complicated things. They want to make it simple. And RTDs products make people life easier. And this is something that we have -- we don't want to avoid because the world is moving towards there, and we are going to fulfill those needs.
I'm not seeing any more questions. So perhaps I can hand it back to CCU team for closing remarks.
Okay. So thank you, everyone, to join us today. We have had good results, a good quarter, and our past framework is key to navigating a challenging and volatile environment with resilience. By executing this, we are confident in our ability to move forward in our 6 strategic priorities to accelerate our top line and to deliver profitable and sustainable growth for CCU. [Foreign Language] and have a great day.
That concludes the call for today. Thank you, and have a nice day.
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