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