Morning, everyone. This is Catherine Chacón, Grupo Nutresa Strategy and Corporate Finance Director, and it is my pleasure to welcome you to Grupo Nutresa's second quarter earnings call, where we will share the main highlights of our performance across our operations and provide insights into this year's strategy. Joining me today is Mr. Jaime Gilinski, Grupo Nutresa CEO, and Andrés Bernal, our CFO and Chief Strategy Officer. We will begin with a presentation with a brief overview of the quarter's highlights and key messages, followed by a detailed financial review.
Afterwards, we will open the floor for your questions. To pose your question, please refer to the chat box on your screen, and don't forget to state your name and the institution that you represent. Similar questions will be grouped in order to allow for everyone to participate. To begin our presentation, I leave you with Mr. Jaime Gilinski, CEO of Grupo Nutresa.
Good morning, everyone, and thank you for joining Grupo Nutresa's second quarter 2026 results call. I would like to frame the quarter around four messages and then hand over to Catherine and Andrés for the details. The first message is our top line. Consolidated sales for the quarter were COP 5.1 trillion, with strong performance in local currencies of our main geographies, excluding the B2B segment and exports affected by the 14% appreciation of the Colombian peso. Total sales in our reporting currency decreased 1.6%, mainly due to conversion effects. When measured in US dollars, total sales grew 14.4%. The second message is the composition of this growth fueled by Colombia, which reports a sales increase of 11.8% with broad-based performance across the portfolio. The third message would be the positive results of our margins.
Our gross margin expanded 450 basis points year-over-year to 42.5%. This expansion is explained by our productivity and efficiency initiatives, our proactive commodity and foreign exchange hedging program, as well as lower input costs from some key commodities. In addition, adjusted EBITDA for the quarter reached COP 941.4 billion, an increase of 19% with a margin of 18.5% against 15.3% in the same quarter last year. The fourth message focuses on inorganic growth. We sign agreements to execute full strategic acquisitions. La Universal in Ecuador, the leading company in chocolate confectionery, and Tío Rico in Venezuela, the leading company ice cream. both transactions are expected to close within the next six months, subject to conditions precedent and regulatory approvals.
Additionally, we received regulatory approval for the ice cream acquisition in Colombia, which we closed during Q2. Moving on to first semester highlights, adjusted EBITDA was COP 2 trillion, up 30.8% at a margin of 19.5%. Lastly, net debt to trailing 12-month adjusted EBITDA stood at 3.84x at the end of June and 3.75x on a run rate basis per semester annualized, including the recent hybrid issuance. 12 months ago, that same ratio was 4.68x . We have therefore reduced net leverage by approximately one turn over the year, and we closed the quarter with cash position of COP 2.5 trillion. We affirm our guidance of an EBITDA in the range of $1.15 billion-$1.25 billion with a margin between 18% and 20%. With that, I will hand over to Catherine and Andrés to walk you through the quarter and semester in more detail.
Thank you, Jaime. Let me begin on slide four with total sales for the quarter. Consolidated sales were COP 5.1 trillion, which is 1.6% below the second quarter of 2025. As Jaime mentioned, the currency translation effect is the single largest driver for this variance. Underlying volume was 1.5% lower than the prior year quarter, mainly impacted by the decrease in B2B sales and exports during the term due to the strong Colombian peso appreciation. On its part, Colombia reported positive volumes during the period and prices were essentially flat due to a strategy of increasing volume and market share.
Looking at the chart, growth was mainly concentrated in four food service with a 21.9% retail food at ice cream at 20.2%, and the other segments growing at a 10.2% rate. On slide five, we break the quarter down between Colombia and our international platforms. Starting with Colombia, sales reached COP 3.3 trillion, an increase of close to 12% year-on-year. Measured in dollars, that is $920 million with a 30% growth. Within Colombia, performance was led biscuits and snacks at 23.2%, food service at 21.9%, retail food at 20.7%. Chocolates was flat in value terms, but I would highlight that it continued to grow in volumes, up 5% for the quarter. In total, five of our eight business units in Colombia delivered double digit growth.
By channel, the traditional channel grew 17.5%, the modern channel grew 14.2%, and our restaurant chains grew 14.5%. Turning to the international platforms, sales for the second quarter were $487.5 million, which is 6.8% below the same period of 2025. Translated into pesos, that is COP 1.8 trillion, a decline of 19.8%, and that decline reflects the appreciation of the Colombian peso against the dollar over the period. Within ice cream biscuits and snacks grew 12%, and our other segments grew 10.3%. Coffee and chocolates were both affected by a contraction in the industrial ingredients category. On slide six, we present the same view but for the first half of the year. Year-to-date sales were COP 10.3 trillion, an increase of 2.4%. What I would highlight here is that the underlying drivers were positive on both axes: volumes and prices.
By business units, double-digit growth came food service with ice cream up close biscuits and snacks, cold cuts, and our other segments also grew at more moderate rates. Lastly, by geography, Colombia grew 13% in local currency. On slide seven, we share Colombia's and the international split on a cumulative basis. In Colombia, sales reach COP 6.6 trillion, an increase of 13% year-over-year. In dollars, that is $1.8 billion with close to 30% growth. Performance was led ice cream, biscuits, retail food, and coffee. Pasta was the only business unit to decline, down 2.2%, reflecting pricing and competitive pressures specific to the category over the term. By channel, the traditional, modern, and our restaurant chains reported double-digit growth. On the international side, sales were essentially flat at $1 billion with 0.4% growth.
Within international platforms, ice cream grew 11.2%, and our other segment grew 8.8%. As in the quarter, coffee and chocolates were affected by the contraction in industrial ingredient sales. By country, these figures are in dollar terms. Ecuador grew 73%, Peru grew 18.6%, and Chile grew 12.5%. On slide eight, we share our revenue mix by geography, which reflects the diversification of the cash flows that support our obligations. Colombia represents 64.2% of consolidated sales. The United States follows at 12.2% and Central America at 9.2%. Taken together, our international platforms are 36% of revenue spread across various markets and no single foreign geography sits above the low teens. Two observations on this page. First, you will notice that Colombia's share moved from 58% to 64.2% year-over-year. That shift is predominantly a translation effect.
It is not a change in the underlying footprint of the business or the performance of our international sales. Second, notwithstanding the currency volatility we saw during the period, our international platforms remained operationally resilient, even where the reported peso figures declined. Moving on to slide nine, we address input costs, which have been a critical driver of our gross margin expansion over the year. Our commodities index, which is denominated in U.S. dollars, declined 29% year-over-year. This reduction is concentrated in four components; cocoa, which declined close to 60% in global prices, sugar 21%, coffee 19%, and pork with a decline of 16%. Two relevant comments on this slide. The first is that a great part of the 450 basis points expansion of our gross margin is a result of our transformation program and proactive hedging decisions, not spot prices alone.
Our reported margin reflects execution as well as market direction. The second is that commodity price relief of this magnitude is cyclical in nature, and we do not assume it persists indefinitely. In fact, we are seeing some increases in market prices over the past months in commodities such as coffee, increasing 9%, cocoa increasing 7%, and wheat with an increase of 14%. Therefore, the sustainable components of our margin improvement are the cost and productivity measures that the company continues to execute. The technical specifications of the index are available on the link shown on the slide. I now leave you with our chief financial officer for a greater look at profitability and our balance sheet position.
Slide 10 presents EBITDA for the quarter. Adjusted EBITDA, which excludes non-recurring expenses, was COP 941.4 billion. That is an increase of 19% year over year, and it represents a margin of 18.5% against 15.3% in the same quarter last year. Measuring dollars, adjusted EBITDA was $260.9 million, up 38.3%. Reported EBITDA was COP 913.5 billion. I will emphasize where that margin expansion sits. It is carried at the gross margin line supported by cost optimization and by the lower raw material and input costs as Cathy discussed. And it was sufficient to absorb a modest increase in expenses associated with marketing investing to drive growth. Growth was positive across the portfolio ice cream, cold cuts, coffee, and chocolates. And four of our business retail food, delivered margin above 20% for the quarter.
Slide 11 shows the cumulative position. First half adjusted EBITDA was COP 2 trillion, which is an increase of 30.8% with a 19.5% reported EBITDA was COP 1.95 billion. In dollars, adjusted EBITDA was $548.1 million, up 50%. This improvement is broad based across nine business units with the first half margin within our target range and consistent with our guidance. Both were positive in every segment food service. Chocolates, retail food each delivered margins above 20%. Slide 12 sets out our consolidated net debt position. Gross loan debt at the end of June was COP 17.5 trillion. Cash was COP 2.5 trillion. That gives us a net debt of COP 15 trillion.
Measured against trailing 12 months adjusted EBITDA of COP 3.9 trillion, then net leverage was 3.84x or 3.75x on a run rate basis when analyzing, sorry, first semester results. The territory across the top of this table is the point I will ask you to focus on. Net leverage has moved from 5.29x in March last year to 4.68x in June of 2025 to 3.84x today. There is a significant reduction over the last 12 months, and it has been achieved principally through EBITDA growth. The increase in gross debt over the year is due to April hybrid issues, of which 50% is treated as debt for the purposes of this calculation, with the rest treated as equity.
Let me turn to the composition of the debt, which I think matters as much as the quantum. 82.5% of our debt stock fixed rate and naturally limits our exposure to any further movement in policy rates. Our foreign currency exposure on direct is managed through principal only swaps. Slide 13 is the last page of my section, and it shows our principal amortization profile. You will see two significant concentrations in 2030 and 2035. Those correspond to the principal repayments of the COP 3 billion issuance we completed last year. Alongside them there are smaller local market maturities in 2027 and 2036. The chart includes 50% principle of the hybrid bond issued in April of this year as per the rating agency's methodology, and assumes the execution of the first call date in 2031.
The weighted average duration of the debt portfolio is currently 5.46 years. The shape of this profile is deliberate. Our net term maturities are modest both relative to our cash position and relative to operating cash generation. In practical terms, we have no refinancing requirements of any consequence before 2030, and that gives us considerable flexibility. With that, I will turn it back to Catherine to begin our Q&A.
Hello Andr é s. Thank you for your comments. Before we begin our Q&A section, we wanted to apologize for the delay at the beginning. It was due to an earthquake here in Colombia that impacted the system of our webcast company. Now moving along to Q&A. Again, I want to remember everyone who wants to pose the question to please go to the chat box on your screen. Our first question comes from. Can you please describe the Holding Company transaction in detail? Specifically, what happened with the intercompany items, the CDA asset, and the HoldCo loan? Is there any change in the cash interest expense paid by Nutresa?
Andr é s.
Okay. At the HoldCo level, it was a merger at the shareholder level, which did not affect Grupo Nutresa structure or the operation at all. Regarding the intercompany loans, is something that we have been doing for the last year and a half. Any excess cash that is generated in different countries is deposited on a bank in Panama, and that bank lends the money on a back-to-back basis to local companies here in Colombia on a very efficient tax strategy. The CDA asset still remains the same. It's getting 8.5% interest rate, which is the average on the initial bonds that range of 8% or 9%. And obviously, that represents $170 million in revenue per year due to that past interest income. Regarding the interest paid by Nutresa, remains the same.
The debt, the loan that we made to the shareholders, which are requesting to ask, it was $1.5 billion. The sources were COP 500 million that they positive invested in preferred shares as we announced previously. The issuance of the hybrid bond for COP 1.25 billion, which we use COP 1 billion for debt. That is the processes we make within this quarter.
Perfect, Andrés. Thank you for your answer. The next question comes from Julian, and it posts: What steps has Nutresa taken to preserve margins amid the upcoming strong El Niño? What input cost pressures has Nutresa observed so far in 3Q 2026 on cocoa and other inputs? Detail any derivatives on the balance that aim to hedge commodity price pressures. A similar question is posted by another of our audience members saying, do you expect pressure on EBITDA margin in the second half of 2026 and in 2027 due to the commodity price increases which you have described? Jaime, if you like, I'll take that one. Perfect.
The first comment we want to share is that the first comments on El Niño were March or April of this year, and it was confirmed a few weeks ago, and it's projected to bring significant heat during the final month of 2026 and the early months of 2027. That heat is not generalized across the globe but particular in certain zones of the crop country. Nutresa initiated action plans in early April that include advancing our hedging strategy. In fact, at this point, we are hedged up to 90% for 2026 across our entire commodity basket. We accelerated hedges on very critical commodities as our audience members have mentioned. We mentioned advancements in cocoa, in coffee, and wheat particularly.
As we mentioned during the slide where we were talking about the commodity baskets, only in the last month, we have seen increases of high single to mid-teens in these commodities. However, we also have our treasury department implementing FX hedges to shield U.S. denominated commodities from the volatility of these raw materials and effects. That also covers our expected EBITDA for 2027. Lastly, Grupo Nutresa has seen these kinds of volatilities over the past decades .
Along with our commodity hedging, which again, we have accelerated our FX hedging to protect U.S. denominated commodities and the operational and efficiency initiatives that we continue to implement at the cost level. We are confident that we're going to be able to maintain very healthy growth margins for 2027 as well. Now, the next question is: What are the expectations of sales of Ecuador and Venezuela given the latest acquisitions that the company has made in the region?
Good. Thank you, Cathy. Basically, I would like to explain that the acquisitions that we have made in Ecuador and Venezuela are both very strategic acquisitions. In the case of Ecuador, we are buying the largest chocolates company in the country. It has revenues today in the neighborhood of $70 million. We believe that once we are approved regulatory, which should happen within the next six months, we should be able to implement a strategy of transforming the company and making it much more efficient using the same principles that we are using in our chocolate factories, especially in Colombia. We are very positive on this acquisition, and we expect that Ecuador as a country, in 2027 should have revenues in the neighborhood of $170 million-$200 million. That is coming up from a $40 million number two to two and a half years ago.
That has been increased with the strategic acquisition of the Yupi business in Ecuador and also now with La Universal and the continuation of growth of some of our other categories from Colombia. In the case of Venezuela, it is also a very important, and we believe, an accretive acquisition for the long term. Venezuela, as you probably remember, about 12 year- 13 years ago, used to be 20%-30% of the revenues of Grupo Nutresa. And that almost became a very small number by last year. Last year, revenues were $14 million. We still kept an organization in Venezuela all along, mostly to sell and distribute in the country.
With the work that we have started from the beginning of the year, a series of visits that I have made to really understand the potential and opportunities of the country, we have strengthened our sales and distribution network. In addition to that, the Tío Rico acquisition is a very strategic acquisition because of two main reasons. The first one, it is about 55% of the market ice creams in the country, is currently the most regarded brand ice creams in Venezuela, known by customers for many, many years. And we believe that we are going to, with the support of our Colombian operations, with the support of our Colombian talent, we should be able to improve not only the margins but improve the products and the innovation in Venezuela to allow us to have a much ice cream business in the country.
Once the economy starts growing, we believe that this will become an interesting new engine of growth. In addition to that, the platform that we acquired has about 200,000 sq m of warehouse space and land that are going to allow us to implement in Venezuela a strategy of growth by bringing some of our other categories that we could produce in the country, once volumes require it. In the meantime, we are analyzing and we continue to export from Colombia. It has not been an easy process, but it has been growing. We expect again in Venezuela that our revenues in 2027, with the Tío Rico acquisition and with some of the expected growth that we have, should be somewhere in the neighborhood of $150 million- $200 million, coming from a $14 million number last year. Thank you.
Thank you, Jaime, very much. The next question goes, hi, can you please share the prices paid for the two M&A transactions, particularly, Jaime, the ones you were just talking about in Venezuela and Ecuador? Any guidance for M&A for 2026 and 2027? This is posted by Carlo Alberto from UCD.
Yeah. I think that the two acquisitions that we made between Venezuela and Ecuador will be about $100 million. We are at the moment consolidating all the regulatory approvals, and we expect that to be paid sometime end of this year or first quarter of 2027. We are constantly looking at opportunities. I think that as you know, since we arrived at Grupo Nutresa, we have made five major acquisitions. The first one was the Yupi acquisition, last year, which allowed us to be in the snack business and snack category, both in Colombia and Ecuador and Panama and some of the other countries where Yupi operates. We consolidated the 100% position in food service business by acquiring Alpina's participation, and that business has continued to grow very well this year.
During this year, we have completed the Mimos acquisition, which is a strategic acquisition to strengthen not only ice cream business in Colombia, but to give our retail stores in Colombia, our retail restaurants, the Mimos product in all of our restaurants, which is going to really increase the category ice creams at the restaurant level. Then both La Universal and Tío Rico are strategic deals in coffee and in Tío Rico, not only ice cream but the platform. But constantly, we are looking at opportunities, we are looking at acquisitions, always being careful that we want to maintain our reviews, our leverage ratios, as we have said, and to continue to grow our EBITDA margins during 2026 and also into 2027. Important to mention that we have continued our transformation initiative during 2026.
A lot of work has happened around the company and around all the geographies. We are really working on a series of initiatives. We have about 400 initiatives this year. As you remember, last year, we completed almost 1,000 initiatives. This year, we are working on different initiatives, which should mean for the company, important improvements during the second semester. We estimate those improvements to be in the neighborhood of $60 million-$80 million. Go ahead, Catherine.
Thank you, Jaime. The next question relates to buybacks, and it says, can you comment on buybacks and how much money you are going to invest in them in the second half of the year?
Andrés.
Actually, the buyback that we made was already done early July. That was made with the cash that we have been generating. Previously to that, we already prepaid $120 million in local debt. As today, we do not expect any additional buybacks, and we remain within the range that we have defined, which is 20%-30% of EBITDA.
Thank you, Andrés. The next question relates to CapEx, and it says, good morning. What is the purpose of the reported CapEx, and what percentage is destined to maintenance of the total CapEx reported for this year? Which again, to remind everyone, is close to COP 650 billion.
Andrés.
Okay. As Cathy mentioned, that is the amount. We continue looking at 2.5% of total sales. Around 40%-45% of that amount is used in maintenance. That means 55%-60% is either increasing capacity or improving efficiency. Beyond that is probably COP 550 billion, the main part to the number that Cathy just mentioned, is because we have been adding electricity generation through solar panels. Last year, we have started 10 of them, and today, Nutresa has 7% of the total energy consumption generated by ourselves. On top of that, on logistics, we have decided to create some synergies reducing the size. So additional investments have been made on those, and we will continue doing so in the main cities. As an example, in Medellín, we already have eight logistic centers, and we will reduce that to two of them. Similar situations in both Cali and Barranquilla.
Thank you, Andrés. The next question is posted by Alexi, and he asks, what year-end COP/USD rate do you assume for your EBITDA guidance?
As an average for the year is COP 3,564. That is COP 3,564. For the end of the year, COP 3,300. To be honest, it has been quite difficult to forecast exchange rates. The Colombian peso last month was the most related currency in the world. We are very confident under new government. However, we do have some risk on the budget capacity of the government. So we will continuously see performance. We hedge loans. We hedge the commodities that we buy on a normal basis. So that trend is quite difficult to forecast, but those are the numbers that we are using at this point in time.
Thank you, Andr é s. The last question that we have at this time is posed by David, and he asks about the merger and whether or not the merger is going to have a significant impact in the finances of Nutresa for this year. Again, to remember, the audience that are joining us here today, this was already answered, and the merger is done at the shareholder level, and it has zero