SEC Form 6-K filed by Compania Cervecerias Unidas S.A.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
COMPAÑÍA CERVECERÍAS UNIDAS S.A.
(Exact name of Registrant as specified in its charter)
UNITED BREWERIES COMPANY, INC.
(Translation of Registrant’s name into English)
Republic of Chile
(Jurisdiction of incorporation or organization)
Vitacura 2670, 23rd floor, Santiago, Chile
(Address of principal executive offices)
_________________________________________
Securities registered or to be registered pursuant to section 12(b) of the Act.
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F ___
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ___ No X
Santiago, Chile, August 7, 2024 – CCU announced today its consolidated financial and operating results1,2
for the second quarter 2024, which ended June 30, 2024.
· Consolidated Volumes decreased 12.7%. Volume performance per Operating segment was as follows:
| o | Chile (8.4)% |
| o | International Business (27.2)% |
| o | Wine 0.2% |
· Net sales were down 8.6%
· Gross profit decreased 15.8%
| · | EBITDA reached CLP 38,722 million3. Excluding the non-recurring gain from the sale of a portion of land in Chile, EBITDA totalized CLP 10,053 million, a 78.7% decrease. |
| · | Net income reached a gain of CLP 5,040 million3. Excluding the non-recurring gain from the sale of a portion of land in Chile, Net income totalized a loss of CLP 15,888 million, versus a loss of CLP 3,943 million last year. |
| · | Earnings per share reached CLP 13.6 per share. |
| Key figures | 2Q24 | 2Q23 | D % / bps | YTD24 | YTD23 | D % / bps | |
| (In ThHL or CLP million unless stated otherwise) | |||||||
| Volumes | 6,010 | 6,883 | (12.7) | 14,962 | 16,245 | (7.9) | |
| Net sales | 524,641 | 574,242 | (8.6) | 1,270,665 | 1,306,272 | (2.7) | |
| Gross profit | 210,113 | 249,415 | (15.8) | 562,240 | 604,361 | (7.0) | |
| EBIT | 2,444 | 12,952 | (81.1) | 91,358 | 117,174 | (22.0) | |
| EBITDA | 38,722 | 47,126 | (17.8) | 162,885 | 182,503 | (10.7) | |
| EBITDA margin % | 7.4 | 8.2 | (83) bps | 12.8 | 14.0 | (115) bps | |
| Net income | 5,040 | (3,943) | (227.8) | 57,243 | 54,424 | 5.2 | |
| Earnings per share (CLP) | 13.6 | (10.7) | (227.8) | 154.9 | 147.3 | 5.2 | |
| Excluding the non-recurring effect of the sale of a portion of land in Chile(3) | |||||||
| EBIT | (26,225) | 12,952 | (302.5) | 62,689 | 117,174 | (46.5) | |
| EBITDA | 10,053 | 47,126 | (78.7) | 134,216 | 182,503 | (26.5) | |
| Net income | (15,888) | (3,943) | 302.9 | 36,315 | 54,424 | (33.3) | |
1 For an explanation of the terms used in this report, please refer to the Glossary in Additional Information and Exhibits. Figures in tables and exhibits have been rounded and may not add up exactly to the total shown.
2 All growth or variation references in this Earnings Release refer to 2Q24 compared to 2Q23, unless otherwise stated.
3 Results of 2Q24 include a non-recurring gain from the sale of a portion of land in Chile, totalizing a gain before taxes of CLP 28,669 million, and a gain after taxes of CLP 20,928 million. At the Operating segments level, this non-recurring effect was accounted in Others/eliminations.
| Page 1 of 13 |
2Q24 PRESS RELEASE |  |
| COMMENTS FROM THE CEO |
In the second quarter of 2024 (2Q24) CCU’s financial results were much weaker than last year, as they were heavily impacted by two effects; a particularly difficult context for demand in Chile and Argentina, and the depreciation of our main local currencies. In Chile, the industries of our core categories decreased, largely explained by adverse weather conditions, with unusual low temperatures and record rain-fall during the quarter. In Argentina, we faced a sharp contraction in the economy and in the beer industry, associated with a challenging context for consumption. It is important to mention that we maintained overall market share in both countries. In terms of our main local currencies, the CLP and ARS depreciated 16.8%4 and 255.1%5 against the USD, respectively, increasing our USD-denominated costs, impacting our operating results. In this scenario, under our regional plan “HerCCUles”, further actions in terms of revenue management and costs and expenses control are currently in place. These actions, in a more normalized context for volume growth, should help us to return to the profitability path.
During 2Q24, our revenues contracted 8.6%, fully explained by 12.7% volumes drop, partially compensated by 4.6% higher average prices in CLP. Lower volumes were largely caused by a weaker demand in Chile and Argentina. Average prices were higher due to revenue management initiatives in all operating segments. Gross profit was down 15.8%, and as percentage of Net sales, deteriorated 338 bps, from 43.4% to 40.0%, due to higher cost pressures, mainly coming from the depreciation of the CLP and the ARS mentioned above. MSD&A expenses expanded 1.7%, and as a percentage of Net sales deteriorated 464 bps, mainly as a consequence of lower volumes and its negative impact in fixed expenses dilution. In all, EBITDA reached CLP 10,053 million, a 78.7% decrease, and EBITDA margin contracted 629 bps. Net income reached a loss of CLP 15,888 million.
All the above does not consider the non-recurring gain from the sale of a portion of land in Chile, with a favorable effect before taxes of CLP 28,669 million, and after tax of CLP 20,928 million. Including this non-recurring effect, EBITDA totalized CLP 38,722 million and Net income reached a gain of CLP 5,040 million. The following analysis also does not consider this non-recurrent event.
In the Chile Operating segment, top line contracted 5.5% driven by 8.4% volumes drop, partially offset by 3.1% growth in average prices. Volume contraction was caused by weaker demand due to unfavorable weather conditions during the quarter. Nonetheless, we saw a much better performance in July, being a good sign for volumes looking ahead. Average prices were higher driven by revenue management efforts in all our categories, partially offset by negative mix effects in the portfolio. In this regard, in July we implemented additional price actions. Gross margin decreased from 44.0% to 41.0%, as a result of higher cost pressures, largely coming from our USD-denominated costs. MSD&A expenses were flat, due to efficiencies that helped to compensate higher USD-denominated expenses. Consequently, EBITDA totalized CLP 26,587 million, contracting 39.7%.
In the International Business Operating segment, which includes Argentina, Bolivia, Paraguay and Uruguay, Net sales recorded a 22.1% drop, as a result of 27.2% reduction in volumes, partially offset by 7.0% rise in average prices in CLP. Weaker volumes were mostly concentrated in Argentina. On the other hand, Paraguay and Bolivia expanded volumes, while Uruguay dropped, due to a high comparison base, explained by an uncommon drought in 2023 which boosted packaged water consumption. The better average prices in CLP were driven by revenue management efforts in all the countries, partially offsetting strong cost pressures, mostly coming from the sharp depreciation of the ARS against the USD and its impact in USD-denominated costs. Consequently, Gross margin deteriorated from 46.0% to 35.7%. MSD&A expenses increased 3.3%, and as a percentage of Net sales deteriorated 1,692 bps, mainly due to the lower business scale in Argentina. Altogether, EBITDA reached a loss of CLP 24,373 million.
The Wine Operating segment continued in a recovery trend, with revenues expanding 12.0%, driven by 11.9% higher average prices. Volumes showed a strong recovery in exports from Chile, which expanded 9.1%, while the Chile domestic market was down 5.4%. The better average prices were boosted by the weaker CLP and its favorable impact on export revenues and revenue management initiatives in our domestic markets. Gross profit rose 28.5% and Gross margin improved 511 bps. MSD&A expenses increased 12.4%, mainly due to higher marketing expenses related to exports which are denominated in USD, and as a percentage of Net sales remained flat. In all, EBITDA reached CLP 10,419 million, a 59.2% growth.
Regarding our main JVs and associated businesses, in Colombia, volumes increased mid-teens, driving better financial results. In Argentina, our water business with Danone, recorded a contraction in volumes due to the challenging scenario for consumption; nonetheless, financial results improved versus last year due to efficiencies from a successful route-to-market and back office integration with CCU Argentina.
To conclude, our 2Q24 results were negatively impacted by a particularly difficult context for demand in Chile and Argentina, and the depreciation of our main local currencies, which resulted in higher cost pressures. Given this scenario, we are confident that our multicategory beverage strategy based on focus and synergies, should help us to return to the profitability path, which is our short-term priority going forward.
4 The CLP currency variation against the USD considers 2024 average of period (aop) compared with 2023 (aop). Source Central Bank of Chile.
5 The ARS currency variation against the USD considers 2024 end of period (eop) compared with 2023 (eop). Source Central Bank of Argentina.
| Page 2 of 13 |
2Q24 PRESS RELEASE | |
| CONSOLIDATED INCOME STATEMENT HIGHLIGHTS – SECOND QUARTER (Exhibit 1 & 3) |
| · | Net sales were down 8.6%, as a result of 12.7% contraction in consolidated volumes, partially compensated by a 4.6% increase in average prices in CLP. The lower volumes were caused by a difficult context for demand in Chile and Argentina. By Operating segment the performance was as follows: (i) a 27.2% drop in the International Business Operating segment, mainly concentrated in Argentina, and to a lesser extent in Uruguay due to a high comparison base, explained by an uncommon drought in 2023 which boosted packaged water consumption, partially compensated by volume expansion in Paraguay and Bolivia; (ii) a 8.4% decrease in the Chile Operating segment due to a weaker demand driven by adverse weather conditions, with overall stable market shares; and (iii) a 0.2% expansion in the Wine Operating segment mostly boosted by exports from Chile, which expanded 9.1%, while domestic market in Chile was down 5.4%. The higher average prices in CLP were given by: (i) 7.0% growth in the International Business Operating segment, driven by revenue management initiatives in all the geographies; (ii) 3.1% rise in the Chile Operating segment, related to revenue management initiatives, partly offset by negative mix effects in the portfolio; and (iii) an 11.9% growth in the Wine Operating segment, mainly as a result of a weaker CLP and its favorable effects on export revenues, and revenue management efforts in our domestic markets. |
| · | Cost of sales decreased 3.2%, due to the lower volumes mentioned above, as Cost of sales per hectoliter rose 10.9% in CLP. The latter was due to: (i) a 27.3% expansion in the International Business Operating segment, highly driven by the negative impact from the 255.1%5 devaluation of the ARS against the USD in our USD-linked costs; (ii) an 8.6% increase in the Chile Operating segment, explained by the 16.8%4 depreciation of the CLP against the USD and its impact on USD-denominated costs, partially compensated by better prices in raw and packaging materials, mainly aluminum, malt and PET, counterbalanced partially by higher prices in sugar and fruit pulp; and (iii) in the Wine Operating segment, the Cost of sales per hectoliter increased 3.1%, mainly due to higher USD-linked costs, partially compensated by a lower cost of wine. |
| · | Gross profit, as a result of the above, reached CLP 210,113 million, a 15.8% contraction, and Gross margin was lower by 338 bps, from 43.4% to 40.0%. |
| · | MSD&A expenses were up 1.7%, and as percentage of Net sales, deteriorated 464 bps, from 41.0% to 45.7%. The breakdown per operating segment was as follows: (i) in the Chile Operating segment, MSD&A expenses were almost flat, expanding 0.6%, due to efficiencies that helped to compensate higher USD-linked expenses, and as a percentage of Net sales deteriorated 242 bps, as lower volumes impacted negatively fixed expenses dilution; (ii) in the International Business Operating segment MSD&A expenses in CLP were up 3.3%, and as a percentage of Net sales deteriorated 1,692 bps, the latter due to the lower business scale in Argentina, impacting negatively fixed-expenses dilution; (iii) in the Wine Operating segment, MSD&A expenses went up 12.4%, as a result of higher marketing expenses related to exports which are denominated in USD, and as a percentage of Net sales remained flat. |
| · | EBIT reached CLP 2,444 million. Excluding the non-recurring gain from a sale of a portion of land in Chile, EBIT totalized a loss of CLP 26,225 million versus a gain of CLP 12,952 million in 2Q23. |
| · | EBITDA reached CLP 38,722 million. Excluding the non-recurring gain from a sale of a portion of land in Chile, EBITDA totalized CLP 10,053 million, down 78.7% versus 2Q23. By Operating segment, the contraction on EBITDA was mostly driven by the International Business Operating segment, which posted a loss of CLP 24,373 million versus a gain of CLP 1,875 million last year, and the 39.7% reduction in the Chile Operating segment. This was partially offset by the Wine Operating segment, increasing 59.2%. |
| · | Non-operating result totalized a loss of CLP 23,514 million versus a negative result of CLP 25,246 million last year. The lower loss was explained by: (i) a better result in Foreign currency exchange differences by CLP 7,119 million, mainly coming from a lower foreign currencies exposure in Argentina, and (ii) a lower loss in Equity and income of JVs and associated by CLP 3,602 million, driven by better financial results in Colombia and in our JV with Danone in Argentina. This was partially compensated by: (i) a higher loss in Other gains/(losses) by CLP 2,383 million, mostly caused by derivative contracts6, specifically, forward contracts entered into to mitigate the impact of foreign exchange rate fluctuations on our foreign currency balance position; and (ii) a higher loss by CLP 6,744 million in Net financial expenses, due to a lower level of Cash and cash equivalents and a higher debt, both in Argentina. |
| · | Income taxes reached a positive result of CLP 27,900 million versus a positive result of CLP 8,695 million last year. The lower taxes were due to a higher loss in Income before taxes, mainly due to a weaker result in Argentina. |
| · | Net income reached a
gain of CLP 5,040 million. Excluding the non-recurring gain from a sale of a portion of land in Chile, Net income reached a loss of CLP
15,888 million versus a loss of CLP 3,943 million last year, explained by the effects mentioned above. |
6 See Note 32 Other Gain/(Losses) of our Financial Statements ended in June 30, 2024.
| Page 3 of 13 |
2Q24 PRESS RELEASE | |
| CONSOLIDATED INCOME STATEMENT HIGHLIGHTS – FIRST HALF (Exhibit 2 & 4) |
| · | Net sales were down 2.7%, as a result of a 7.9% contraction in consolidated volumes, partially compensated by 5.6% increase in average prices in CLP. The lower volumes were largely caused by the 19.9% contraction in the International Business Operating segment, almost fully explained by Argentina, while Paraguay and Bolivia expanded volumes, and Uruguay decreased due to a high comparison base, explained by an uncommon drought in 2023 which boosted packaged water consumption. The Chile Operating segment decreased 4.0%, with overall stable market shares, mainly driven by adverse weather condition during 2Q24. The Wine Operating segment expanded volume by 1.3% fully driven by exports from Chile, which expanded 6.5%, while domestic market in Chile decreased 3.1%. The higher average prices in CLP are breakdown as follows: (i) a 12.1% growth in the International Business Operating segment, driven by revenue management initiatives in all the geographies; (ii) a 3.4% rise in the Chile Operating segment, related to revenue management initiatives, partly offset by negative mix effects in the portfolio; and (iii) a 10.4% growth in the Wine Operating segment, mainly boosted by the weaker CLP and its favorable effects on export revenues. |
| · | Cost of sales grew 0.9%, as a consequence of the 9.6% increase in Cost of sales per hectoliter, partially counterbalanced by a 7.9% drop in volumes. The higher Cost of sales per hectoliter was due to: (i) the 28.1% expansion in the International Business Operating segment mostly driven by the negative impact from the 255.1%5 devaluation of the ARS against the USD in our USD-linked costs; (ii) a 5.8% increase in the Chile Operating segment, explained by the 16.7%4 depreciation of the CLP against the USD and its impact on USD-denominated costs, partially compensated by better prices in raw and packaging materials, mainly aluminum, and PET, partially counterbalanced by higher prices in sugar and fruit pulp; and (iii) a 0.8% increase in the Wine Operating segment. |
| · | Gross profit, as a result of the above, reached CLP 562,240 million, a 7.0% contraction, and Gross margin was lower by 202 bps, from 46.3% to 44.2%. |
| · | MSD&A expenses were up 3.4%, and as percentage of Net sales, deteriorated 236 bps, from 37.3% to 39.6%. The breakdown per operating segment was as follows: (i) in the Chile Operating segment, MSD&A expenses expanded 4.2%, and as a percentage of Net sales, increased 167 bps, mainly explained by lower volumes which impacted negatively fixed-expenses dilution, higher depreciation and larger USD-linked expenses; (ii) in the International Business Operating segment MSD&A expenses in CLP were up 0.8%, and as a percentage of Net sales increased 564 bps, the latter due to a lower business scale in Argentina impacting negatively fixed-expenses dilution; (iii) in the Wine Operating segment, MSD&A expenses went up 14.0%, and as a percentage of Net sales deteriorated 58 bps, mainly due to higher marketing expenses related to exports which are denominated in USD. |
| · | EBIT reached CLP 91,358 million. Excluding the non-recurring gain from a sale of a portion of land in Chile in 2Q24, EBIT totalized CLP 62,689 million, a 46.5% decrease compared to last year. |
| · | EBITDA reached CLP 162,885 million. Excluding the non-recurring gain from a sale of a portion of land in Chile in 2Q24, EBITDA totalized CLP 134,216 million, down 26.5% compared to last year. By Operating segment, the lower EBITDA was explained by a 95.4% contraction in the International Business Operating segment, more than explained by Argentina, and a 14.3% reduction in the Chile Operating segment. This was partially offset by the Wine Operating segment, increasing EBITDA by 70.2%. |
| · | Non-operating result totalized a loss of CLP 42,779 million versus a negative result of CLP 52,559 million. The better result was explained by: (i) a lower loss in Other gains/(losses) by CLP 6,134 million, mostly caused by derivative contracts6, specifically, forward contracts entered into to mitigate the impact of foreign exchange rate fluctuations on our foreign currency balance position; (ii) a better result in Equity and income of JVs and associated by CLP 4,103 million, mainly driven by our JV with Danone in Argentina; and (iii) a lower loss in Foreign currency exchange differences by CLP 2,979 million, mostly coming from a lower foreign currencies exposure in Argentina. These effects were partially compensated by a higher loss by CLP 3,351 million in Net financial expenses, due to lower Cash and cash equivalents and a higher debt in Argentina. |
| · | Income taxes reached a positive result of CLP 13,280 million versus a loss of CLP 6,652 million last year. The lower taxes were mainly explained by a lower taxable income, the latter concentrated in Argentina. |
| · | Net income reached a gain of CLP 57,243 million. Excluding the non-recurring gain from a sale of a portion of land in Chile in 2Q24, Net income totalized CLP 36,315 million, decreasing 33.3% explained by the effects mentioned above. |
| Page 4 of 13 |
2Q24 PRESS RELEASE | |
| HIGHLIGHTS OPERATING SEGMENTS – SECOND QUARTER |
CHILE OPERATING SEGMENT
In the Chile Operating segment, top line contracted 5.5% driven by 8.4% volumes drop, partially offset by 3.1% growth in average prices. Volume contraction was caused by weaker demand due to unfavorable weather conditions during the quarter. Nonetheless, we saw a much better performance in July, being a good sign for volumes looking ahead. Average prices were higher driven by revenue management efforts in all our categories, partially offset by negative mix effects in the portfolio. In this regard, in July we implemented additional price actions. Gross margin decreased from 44.0% to 41.0%, as a result of higher cost pressures, largely coming from our USD-denominated costs. MSD&A expenses were flat, due to efficiencies that helped to compensate higher USD-denominated expenses. Consequently, EBITDA totalized CLP 26,587 million, contracting 39.7%.
During the quarter we met an important milestone: the inauguration of “CirCCUlar”, our PET recycling plant. This achievement is an important step in our Sustainability Strategy, specifically in the “Our Planet” pillar, since the new recycling plant has the capacity to process 18,000 tons of PET annually, equivalent to 870 million bottles per year. In this way, together with the local NGO “Desafío Levantemos Chile”, we launched “Desafío CirCCUlar”, a competitive fund aimed at small recycling companies, with the aim of supporting their growth and increasing their capacities for recycling PET bottles. Likewise, during the quarter our water brand Cachantun, through its “Refesca tu barrio” program, inaugurated a new sustainable green area in Chile, reaching 13 new parks, since 2019. These spaces are designed in conjunction with the communities and are constructed from recycled PET.
CCU was once again distinguished among the 100 most responsible companies in the MERCO Responsabilidad ESG Chile 2023 ranking, which evaluated ESG aspects. The company achieved 1st place in the beverage sector, for the fifth consecutive year, and 16th in the general ranking.
In terms of brands, our flavored water brand MAS launched a new Raspberry-Lemon variety, without added sugar and with natural juice, expanding our successful portfolio of more than ten flavors in this category.
INTERNATIONAL BUSINESS OPERATING SEGMENT
In the International Business Operating segment, which includes Argentina, Bolivia, Paraguay and Uruguay, Net sales recorded a 22.1% drop, as a result of 27.2% reduction in volumes, partially offset by 7.0% rise in average prices in CLP. Weaker volumes were mostly concentrated in Argentina. On the other hand, Paraguay and Bolivia expanded volumes, while Uruguay dropped, due to a high comparison base, explained by an uncommon drought in 2023 which boosted packaged water consumption. The better average prices in CLP were driven by revenue management efforts in all the countries, partially offsetting strong cost pressures, mostly coming from the sharp depreciation of the ARS against the USD and its impact in USD-denominated costs. Consequently, Gross margin deteriorated from 46.0% to 35.7%. MSD&A expenses increased 3.3%, and as a percentage of Net sales deteriorated 1,692 bps, mainly due to the lower business scale in Argentina. Altogether, EBITDA reached a loss of CLP 24,373 million.
WINE OPERATING SEGMENT
The Wine Operating segment continued in a recovery trend, with revenues expanding 12.0%, driven by 11.9% higher average prices. Volumes showed a strong recovery in exports from Chile, which expanded 9.1%, while the Chile domestic market was down 5.4%. The better average prices were boosted by the weaker CLP and its favorable impact on export revenues and revenue management initiatives in our domestic markets. Gross profit rose 28.5% and Gross margin improved 511 bps. MSD&A expenses increased 12.4%, mainly due to higher marketing expenses related to exports which are denominated in USD, and as a percentage of Net sales remained flat. In all, EBITDA reached CLP 10,419 million, a 59.2% growth.
| Page 5 of 13 |
2Q24 PRESS RELEASE | |
ABOUT CCU
CCU is a multi-category beverage company with operations in Chile, Argentina, Bolivia, Colombia, Paraguay and Uruguay. CCU is one of the largest players in each one of the beverage categories in which it participates in Chile, including beer, soft drinks, mineral and bottled water, nectar, wine and pisco, among others. CCU is the second-largest brewer in Argentina and also participates in the cider, spirits, wine and water industries. In Uruguay and Paraguay, the Company is present in the beer, mineral and bottled water, soft drinks, wine and nectar categories. In Bolivia, CCU participates in the beer, water, soft drinks and malt beverage categories. In Colombia, the Company participates in the beer and in the malt industry. The Company’s principal licensing, distribution and / or joint venture agreements include Heineken Brouwerijen B.V., PepsiCo Inc., Seven-up International, Schweppes Holdings Limited, Société des Produits Nestlé S.A., Pernod Ricard Chile S.A., Promarca S.A. (Watt’s), Red Bull Panamá S.A., Stokely Van Camp Inc., and Coors Brewing Company.
CORPORATE HEADQUARTERS
Vitacura 2670, 26th floor
Santiago
Chile
STOCK TICKER
Bolsa de Comercio de Santiago: CCU
NYSE: CCU
CAUTIONARY STATEMENT
Statements made in this press release that relate to CCU’s future performance or financial results are forward-looking statements, which involve known and unknown risks and uncertainties that could cause actual performance or results to materially differ. We undertake no obligation to update any of these statements. Persons reading this press release are cautioned not to place undue reliance on these forward-looking statements. These statements should be taken in conjunction with the additional information about risk and uncertainties set forth in CCU’s annual report on Form 20-F filed with the US Securities and Exchange Commission and in the annual report submitted to the CMF (Chilean Market Regulator) and available on our web page.
GLOSSARY
Operating segments
The Operating segments are defined with respect to its revenues in the geographic areas of commercial activity:
| · | Chile: This segment commercializes Beer, Non Alcoholic Beverages, Spirits and Cider in the Chilean market, and also includes the results of Transportes CCU Limitada, Comercial CCU S.A., Creccu S.A., Fábrica de Envases Plásticos S.A. y La Barra S.A. |
| · | International Business: This segment commercializes Beer, Cider, Wine, Non-Alcoholic Beverages and Spirits in Argentina, Uruguay, Paraguay and Bolivia. |
| · | Wine: This segment commercializes Wine and Sparkling Wine, mainly in the export market reaching over 80 countries, as well as the Chilean and Argentine domestic market. |
| · | Other/Eliminations: Considers the non-allocated corporate overhead expenses and eliminations of transactions and volumes between segments. |
| Page 6 of 13 |
2Q24 PRESS RELEASE | |
ARS
Argentine peso.
CLP
Chilean peso.
Cost of sales
Formerly referred to as Cost of Goods Sold (COGS), includes direct costs and manufacturing costs.
Earnings per Share (EPS)
Net profit divided by the weighted average number of shares during the year.
EBIT
Earnings Before Interest and Taxes. For management purposes, EBIT is defined as Net income before other gains (losses), net financial expenses, equity and income of joint ventures, foreign currency exchange differences, results as per adjustment units and income taxes. EBIT is equivalent to Adjusted Operating Result used in the 20-F Form.
EBITDA
EBITDA represents EBIT plus depreciation and amortization. EBITDA is not an accounting measure under IFRS. When analyzing the operating performance, investors should use EBITDA in addition to, not as an alternative for Net income, as this item is defined by IFRS. Investors should also note that CCU’s presentation of EBITDA may not be comparable to similarly titled indicators used by other companies. EBITDA is equivalent to ORBDA (Adjusted Operating Result Before Depreciation and Amortization), used in the 20-F Form.
Exceptional Items (EI)
Formerly referred to as Non-recurring items (NRI), Exceptional Items are either income or expenses which do not occur regularly as part of the normal activities of the Company. They are presented separately because they are important for the understanding of the underlying sustainable performance of the Company due to their size or nature.
Gross profit
Gross profit represents the difference between Net sales and Cost of sales.
Gross margin
Gross profit as a percentage of Net sales.
Liquidity ratio
Total current assets / Total current liabilities
Marketing, Sales, Distribution and Administrative expenses (MSD&A)
MSD&A includes marketing, sales, distribution and administrative expenses.
Net Financial Debt
Total Financial Debt minus Cash & Cash Equivalents.
Net Financial Debt / EBITDA
The ratio is based on a twelve month rolling calculation for EBITDA.
Net income
Net income attributable to the equity holders of the parent.
UF
The UF is a monetary unit indexed to the Consumer Price Index variation in Chile.
USD
United States Dollar.
| Page 7 of 13 |
2Q24 PRESS RELEASE | |
| Exhibit 1: Consolidated Income Statement (Second Quarter 2024) | |||
| Second Quarter | 2024 | 2023 | Total Change % |
| (CLP million) | |||
| Net sales | 524,641 | 574,242 | (8.6) |
| Cost of sales | (314,528) | (324,826) | (3.2) |
| % of Net sales | 60.0 | 56.6 | 338 bps |
| Direct costs | (228,286) | (243,869) | (6.4) |
| Manufacturing costs | (86,242) | (80,957) | 6.5 |
| Gross profit | 210,113 | 249,415 | (15.8) |
| % of Net sales | 40.0 | 43.4 | (338) bps |
| MSD&A | (239,698) | (235,689) | 1.7 |
| % of Net sales | 45.7 | 41.0 | 464 bps |
| Other operating income/(expenses) | 32,028 | (775) | >500 |
| EBIT | 2,444 | 12,952 | (81.1) |
| EBIT margin % | 0.5 | 2.3 | (179) bps |
| Net financial expenses | (12,286) | (5,542) | 121.7 |
| Equity and income of JVs and associated | (2,578) | (6,180) | (58.3) |
| Foreign currency exchange differences | 2 | (7,117) | (100.0) |
| Results as per adjustment units | (3,395) | (3,533) | (3.9) |
| Other gains/(losses) | (5,256) | (2,874) | 82.9 |
| Non-operating result | (23,514) | (25,246) | (6.9) |
| Income/(loss) before taxes | (21,070) | (12,294) | 71.4 |
| Income taxes | 27,900 | 8,695 | 220.9 |
| Net income for the period | 6,831 | (3,599) | (289.8) |
| Net income attributable to: | |||
| The equity holders of the parent | 5,040 | (3,943) | (227.8) |
| Non-controlling interest | (1,790) | (345) | 419.6 |
| EBITDA | 38,722 | 47,126 | (17.8) |
| EBITDA margin % | 7.4 | 8.2 | (83) bps |
| Excluding the non-recurring effect of the sale of a portion of land in Chile(3) | |||
| EBIT | (26,225) | 12,952 | (302.5) |
| EBIT margin % | (5.0) | 2.3 | |
| EBITDA | 10,053 | 47,126 | (78.7) |
| EBITDA margin % | 1.9 | 8.2 | |
| Net income (attributable to equity holders of the parent) | (15,888) | (3,943) | 302.9 |
| OTHER INFORMATION | |||
| Number of shares | 369,502,872 | 369,502,872 | |
| Shares per ADR | 2 | 2 | |
| Earnings per share (CLP) | 13.6 | (10.7) | (227.8) |
| Earnings per ADR (CLP) | 27.3 | (21.3) | (227.8) |
| Depreciation | 36,278 | 34,174 | 6.2 |
| Capital Expenditures | 39,089 | 30,621 | 27.7 |
| Page 8 of 13 |
2Q24 PRESS RELEASE | |
| Exhibit 2: Consolidated Income Statement (Six months ended on June 30, 2024) | |||
| YTD as of June | 2024 | 2023 | Total Change % |
| (CLP million) | |||
| Net sales | 1,270,665 | 1,306,272 | (2.7) |
| Cost of sales | (708,425) | (701,912) | 0.9 |
| % of Net sales | 55.8 | 53.7 | 202 bps |
| Direct costs | (543,728) | (548,334) | (0.8) |
| Manufacturing costs | (164,697) | (153,578) | 7.2 |
| Gross profit | 562,240 | 604,361 | (7.0) |
| % of Net sales | 44.2 | 46.3 | (202) bps |
| MSD&A | (503,653) | (486,892) | 3.4 |
| % of Net sales | 39.6 | 37.3 | 236 bps |
| Other operating income/(expenses) | 32,771 | (294) | >500 |
| EBIT | 91,358 | 117,174 | (22.0) |
| EBIT margin % | 7.2 | 9.0 | (178) bps |
| Net financial expenses | (18,951) | (15,600) | 21.5 |
| Equity and income of JVs and associated | (5,895) | (9,999) | (41.0) |
| Foreign currency exchange differences | (8,466) | (11,445) | (26.0) |
| Results as per adjustment units | (5,275) | (5,189) | 1.6 |
| Other gains/(losses) | (4,192) | (10,326) | (59.4) |
| Non-operating result | (42,779) | (52,559) | (18.6) |
| Income/(loss) before taxes | 48,579 | 64,615 | (24.8) |
| Income taxes | 13,280 | (6,652) | (299.6) |
| Net income for the period | 61,858 | 57,963 | 6.7 |
| Net income attributable to: | |||
| The equity holders of the parent | 57,243 | 54,424 | 5.2 |
| Non-controlling interest | (4,615) | (3,538) | 30.4 |
| EBITDA | 162,885 | 182,503 | (10.7) |
| EBITDA margin % | 12.8 | 14.0 | (115) bps |
| Excluding the non-recurring effect of the sale of a portion of land in Chile(3) | |||
| EBIT | 62,689 | 117,174 | (46.5) |
| EBIT margin % | 4.9 | 9.0 | |
| EBITDA | 134,216 | 182,503 | (26.5) |
| EBITDA margin % | 10.6 | 14.0 | |
| Net income (attributable to equity holders of the parent) | 36,315 | 54,424 | (33.3) |
| OTHER INFORMATION | |||
| Number of shares | 369,502,872 | 369,502,872 | |
| Shares per ADR | 2 | 2 | |
| Earnings per share (CLP) | 154.9 | 147.3 | 5.2 |
| Earnings per ADR (CLP) | 309.8 | 294.6 | 5.2 |
| Depreciation | 71,527 | 65,329 | 9.5 |
| Capital Expenditures | 83,936 | 53,497 | 56.9 |
| Page 9 of 13 |
2Q24 PRESS RELEASE | |
| Exhibit 3: Segment Information (Second Quarter 2024) | |||||||||||||||||||
| 1. Chile Operating segment | 2. International Business Operating segment | 3. Wine Operating segment | 4. Other/eliminations | Total | |||||||||||||||
| Second Quarter | |||||||||||||||||||
| (In ThHL or CLP million unless stated otherwise) | 2024 | 2023 | YoY % | 2024 | 2023 | YoY % | 2024 | 2023 | YoY % | 2024 | 2023 | YoY % | 2024 | 2023 | YoY % | ||||
| Volumes | 4,414 | 4,818 | (8.4) | 1,260 | 1,732 | (27.2) | 356 | 356 | 0.2 | (21) | (23) | (5.9) | 6,010 | 6,883 | (12.7) | ||||
| Net sales | 355,613 | 376,378 | (5.5) | 111,002 | 142,512 | (22.1) | 72,125 | 64,369 | 12.0 | (14,097) | (9,017) | 56.3 | 524,641 | 574,242 | (8.6) | ||||
| Net sales (CLP/HL) | 80,557 | 78,123 | 3.1 | 88,079 | 82,287 | 7.0 | 202,337 | 180,882 | 11.9 | 87,296 | 83,429 | 4.6 | |||||||
| Cost of sales | (209,654) | (210,704) | (0.5) | (71,319) | (77,024) | (7.4) | (43,391) | (42,015) | 3.3 | 9,837 | 4,916 | 100.1 | (314,528) | (324,826) | (3.2) | ||||
| % of Net sales | 59.0 | 56.0 | 297 bps | 64.3 | 54.0 | 1,020 bps | 60.2 | 65.3 | (511) bps | 60.0 | 56.6 | 338 bps | |||||||
| Direct costs | (161,761) | (162,072) | (0.2) | (43,440) | (53,351) | (18.6) | (33,552) | (33,444) | 0.3 | 10,468 | 4,997 | 109.5 | (228,286) | (243,869) | (6.4) | ||||
| Manufacturing costs | (47,893) | (48,632) | (1.5) | (27,879) | (23,673) | 17.8 | (9,839) | (8,571) | 14.8 | (631) | (82) | <(500) | (86,242) | (80,957) | 6.5 | ||||
| Gross profit | 145,959 | 165,674 | (11.9) | 39,682 | 65,488 | (39.4) | 28,733 | 22,355 | 28.5 | (4,261) | (4,102) | 3.9 | 210,113 | 249,415 | (15.8) | ||||
| % of Net sales | 41.0 | 44.0 | (297) bps | 35.7 | 46.0 | (1,020) bps | 39.8 | 34.7 | 511 bps | 40.0 | 43.4 | (338) bps | |||||||
| MSD&A | (140,748) | (139,867) | 0.6 | (76,312) | (73,856) | 3.3 | (21,592) | (19,216) | 12.4 | (1,046) | (2,750) | (61.9) | (239,698) | (235,689) | 1.7 | ||||
| % of Net sales | 39.6 | 37.2 | 242 bps | 68.7 | 51.8 | 1,692 bps | 29.9 | 29.9 | 8 bps | 45.7 | 41.0 | 464 bps | |||||||
| Other operating income/(expenses) | 522 | (1,004) | 152.0 | 192 | 38 | 401.6 | 171 | 198 | (13.6) | 31,143 | (7) | >500 | 32,028 | (775) | >500 | ||||
| EBIT | 5,733 | 24,802 | (76.9) | (36,438) | (8,329) | 337.5 | 7,312 | 3,337 | 119.1 | 25,836 | (6,859) | (476.7) | 2,444 | 12,952 | (81.1) | ||||
| EBIT margin | 1.6 | 6.6 | (498) bps | (32.8) | (5.8) | (2,698) bps | 10.1 | 5.2 | 495 bps | 0.5 | 2.3 | (179) bps | |||||||
| EBITDA | 26,587 | 44,106 | (39.7) | (24,373) | 1,875 | <(500) | 10,419 | 6,543 | 59.2 | 26,089 | (5,398) | >500 | 38,722 | 47,126 | (17.8) | ||||
| EBITDA margin | 7.5 | 11.7 | (424) bps | (22.0) | 1.3 | (2,327) bps | 14.4 | 10.2 | 428 bps | 7.4 | 8.2 | (83) bps | |||||||
| Excluding the non-recurring effect of the sale of a portion of land in Chile(3) | |||||||||||||||||||
| EBIT | 5,733 | 24,802 | (76.9) | (36,438) | (8,329) | 337.5 | 7,312 | 3,337 | 119.1 | (2,833) | (6,859) | (58.7) | (26,225) | 12,952 | (302.5) | ||||
| EBITDA | 26,587 | 44,106 | (39.7) | (24,373) | 1,875 | <(500) | 10,419 | 6,543 | 59.2 | (2,580) | (5,398) | (52.2) | 10,053 | 47,126 | (78.7) | ||||
| Page 10 of 13 |
2Q24 PRESS RELEASE | |
| Exhibit 4: Segment Information (Six months ended on June 30, 2024) | |||||||||||||||||||
| 1. Chile Operating segment | 2. International Business Operating segment | 3. Wine Operating segment | 4. Other/eliminations | Total | |||||||||||||||
| YTD as of June | |||||||||||||||||||
| (In ThHL or CLP million unless stated otherwise) | 2024 | 2023 | YoY % | 2024 | 2023 | YoY % | 2024 | 2023 | YoY % | 2024 | 2023 | YoY % | 2024 | 2023 | YoY % | ||||
| Volumes | 11,002 | 11,463 | (4.0) | 3,342 | 4,173 | (19.9) | 654 | 645 | 1.3 | (36) | (35) | 1.7 | 14,962 | 16,245 | (7.9) | ||||
| Net sales | 857,552 | 864,196 | (0.8) | 305,255 | 339,899 | (10.2) | 130,890 | 117,016 | 11.9 | (23,032) | (14,838) | 55.2 | 1,270,665 | 1,306,272 | (2.7) | ||||
| Net sales (CLP/HL) | 77,943 | 75,391 | 3.4 | 91,345 | 81,461 | 12.1 | 200,245 | 181,345 | 10.4 | 84,928 | 80,410 | 5.6 | |||||||
| Cost of sales | (474,093) | (466,988) | 1.5 | (169,602) | (165,327) | 2.6 | (79,419) | (77,777) | 2.1 | 14,688 | 8,181 | 79.5 | (708,425) | (701,912) | 0.9 | ||||
| % of Net sales | 55.3 | 54.0 | 125 bps | 55.6 | 48.6 | 692 bps | 60.7 | 66.5 | (579) bps | 55.8 | 53.7 | 202 bps | |||||||
| Direct costs | (382,884) | (378,280) | 1.2 | (116,224) | (117,736) | (1.3) | (60,524) | (60,854) | (0.5) | 15,903 | 8,536 | 86.3 | (543,728) | (548,334) | (0.8) | ||||
| Manufacturing costs | (91,209) | (88,708) | 2.8 | (53,378) | (47,592) | 12.2 | (18,895) | (16,923) | 11.7 | (1,215) | (355) | 241.9 | (164,697) | (153,578) | 7.2 | ||||
| Gross profit | 383,459 | 397,207 | (3.5) | 135,654 | 174,571 | (22.3) | 51,471 | 39,239 | 31.2 | (8,344) | (6,657) | 25.3 | 562,240 | 604,361 | (7.0) | ||||
| % of Net sales | 44.7 | 46.0 | (125) bps | 44.4 | 51.4 | (692) bps | 39.3 | 33.5 | 579 bps | 44.2 | 46.3 | (202) bps | |||||||
| MSD&A | (301,711) | (289,606) | 4.2 | (157,500) | (156,193) | 0.8 | (40,769) | (35,773) | 14.0 | (3,673) | (5,321) | (31.0) | (503,653) | (486,892) | 3.4 | ||||
| % of Net sales | 35.2 | 33.5 | 167 bps | 51.6 | 46.0 | 564 bps | 31.1 | 30.6 | 58 bps | 39.6 | 37.3 | 236 bps | |||||||
| Other operating income/(expenses) | 809 | (861) | 193.9 | 380 | 82 | 361.3 | 341 | 317 | 7.6 | 31,241 | 168 | >500 | 32,771 | (294) | >500 | ||||
| EBIT | 82,557 | 106,740 | (22.7) | (21,467) | 18,461 | (216.3) | 11,043 | 3,783 | 191.9 | 19,225 | (11,810) | (262.8) | 91,358 | 117,174 | (22.0) | ||||
| EBIT margin | 9.6 | 12.4 | (272) bps | (7.0) | 5.4 | (1,246) bps | 8.4 | 3.2 | 520 bps | 7.2 | 9.0 | (178) bps | |||||||
| EBITDA | 123,320 | 143,867 | (14.3) | 1,725 | 37,683 | (95.4) | 17,086 | 10,039 | 70.2 | 20,754 | (9,086) | (328.4) | 162,885 | 182,503 | (10.7) | ||||
| EBITDA margin | 14.4 | 16.6 | (227) bps | 0.6 | 11.1 | (1,052) bps | 13.1 | 8.6 | 447 bps | 12.8 | 14.0 | (115) bps | |||||||
| Excluding the non-recurring effect of the sale of a portion of land in Chile(3) | |||||||||||||||||||
| EBIT | 82,557 | 106,740 | (22.7) | (21,467) | 18,461 | (216.3) | 11,043 | 3,783 | 191.9 | (9,444) | (11,810) | 20.0 | 62,689 | 117,174 | (46.5) | ||||
| EBITDA | 123,320 | 143,867 | (14.3) | 1,725 | 37,683 | (95.4) | 17,086 | 10,039 | 70.2 | (7,915) | (9,086) | 12.9 | 134,216 | 182,503 | (26.5) | ||||
| Page 11 of 13 |
2Q24 PRESS RELEASE | |
| June 30 | December 31 | |
| 2024 | 2023 | |
| (CLP million) | ||
| ASSETS | ||
| Cash and cash equivalents | 636,539 | 618,154 |
| Other current assets | 875,886 | 983,529 |
| Total current assets | 1,512,425 | 1,601,683 |
| PP&E (net) | 1,448,145 | 1,273,988 |
| Other non current assets | 629,831 | 548,275 |
| Total non current assets | 2,077,976 | 1,822,263 |
| Total assets | 3,590,401 | 3,423,946 |
| LIABILITIES | ||
| Short term financial debt | 196,013 | 114,294 |
| Other liabilities | 463,800 | 573,189 |
| Total current liabilities | 659,812 | 687,483 |
| Long term financial debt | 1,246,262 | 1,268,308 |
| Other liabilities | 161,081 | 130,773 |
| Total non current liabilities | 1,407,344 | 1,399,081 |
| Total Liabilities | 2,067,156 | 2,086,564 |
| EQUITY | ||
| Paid-in capital | 562,693 | 562,693 |
| Other reserves | (52,475) | (240,200) |
| Retained earnings | 913,928 | 895,872 |
| Total equity attributable to equity holders of the parent | 1,424,146 | 1,218,365 |
| Non - controlling interest | 99,099 | 119,018 |
| Total equity | 1,523,244 | 1,337,383 |
| Total equity and liabilities | 3,590,401 | 3,423,946 |
| OTHER FINANCIAL INFORMATION | ||
| Total Financial Debt | 1,442,275 | 1,382,602 |
| Net Financial Debt | 805,736 | 764,448 |
| Liquidity ratio | 2.29 | 2.33 |
| Total Financial Debt / Capitalization | 0.49 | 0.51 |
| Net Financial Debt / EBITDA | 2.24 | 2.01 |
| Page 12 of 13 |
2Q24 PRESS RELEASE | |
| Exhibit 6: Summary of the Statement of Cash Flow | ||
| Second Quarter | 2024 | 2023 |
| (CLP million) | ||
| Cash and cash equivalents at beginning of the period | 692,386 | 572,309 |
| Net cash inflows from operating activities | (34,596) | 53,449 |
| Net cash (outflow) from investing activities1 | 8,702 | (35,151) |
| Net cash (outflow) flow from financing activities | (4,374) | 7,667 |
| Net (decrease) increase in cash and cash equivalents | (30,269) | 25,965 |
| Effects of exchange rate changes on cash and cash equivalents | (25,579) | (7,259) |
| Increase (decrease) in cash and cash equivalents | (55,847) | 18,706 |
| Cash and cash equivalents at end of the period | 636,539 | 591,015 |
| YTD as of June | 2024 | 2023 |
| (CLP million) | ||
| Cash and cash equivalents at beginning of the year | 618,154 | 597,082 |
| Net cash inflows from operating activities | 86,684 | 147,074 |
| Net cash (outflow) from investing activities1 | (45,274) | (59,894) |
| Net cash (outflow) flow from financing activities | (44,446) | (39,870) |
| Net (decrease) increase in cash and cash equivalents | (3,036) | 47,310 |
| Effects of exchange rate changes on cash and cash equivalents | 21,421 | (53,376) |
| Increase (decrease) in cash and cash equivalents | 18,385 | (6,066) |
| Cash and cash equivalents at end of the period | 636,539 | 591,015 |
| 1 Figures of 2024 include a non-recurring cash inflow from the sale of a portion of land in Chile of CLP 49,821 million. | ||
| Exhibit 7: Impact on quarterly EBIT and EBITDA from the application of IAS 29 from IFRS in accumulated results in Argentina | ||
| Second Quarter | 2024 | 2023 |
| (CLP million) | ||
| Consolidated EBIT | 2,444 | 12,952 |
| Impact of IAS 29 in accumulated results in Argentina | 727 | 1,097 |
| Impact of IAS 29 in the International Business Operating segment | 684 | 1,100 |
| Impact of IAS 29 in the Wine Operating segment | 43 | (3) |
| Consolidated EBIT excluding the impact of IAS 29 | 1,717 | 11,855 |
| Second Quarter | 2024 | 2023 |
| (CLP million) | ||
| Consolidated EBITDA | 38,722 | 47,126 |
| Impact of IAS 29 in accumulated results in Argentina | 1,199 | 1,424 |
| Impact of IAS 29 in the International Business Operating segment | 1,137 | 1,411 |
| Impact of IAS 29 in the Wine Operating segment | 62 | 14 |
| Consolidated EBITDA excluding the impact of IAS 29 | 37,523 | 45,702 |
| Page 13 of 13 |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Compañía Cervecerías Unidas S.A.
(United Breweries Company, Inc.)
| /s/ Felipe Dubernet | |
| Chief Financial Officer | |
Date: August 7, 2024