Compania Cervecerias Unidas SA

SGO:CCU

Q1-2025 Earnings Call

[Operator]

Good day, everyone, and welcome to CCU's First Quarter 2025 Earnings Conference Call on the 8th of May 2025. Please note that today's call is being recorded.

At this time, I would like to turn the conference call over to Claudio Heras, the Head of Investor Relations. Please go ahead, sir.

[Claudio Heras, executive]

Welcome, and thank you for attending CCU's First Quarter 2025 conference call.

Today with me are Mr. Patricio Jottar, Chief Executive Officer; Mr. Felipe Dubernet, Chief Financial Officer; Mr. Joaquín Trejo, Financial Planning and Investor Relations Manager; and Mrs. Carolina Burgos, Senior Investor Relations Analyst.

You have received a copy of the company's consolidated first quarter 2025 earnings release. The call will start reviewing our overall results and then we will then move on to our Q&A session. As usual, before we begin, please take note for the following statements. Statements made in this call that relate to CCU's future financial results are forward-looking statements, which involve known and unknown risks and uncertainties that could cause actual performance or results to materially differ.

This statement should be taken in conjunction with additional information about risks and uncertainties set forth in PC's annual report in Form 20-F filed with the U.S. Section and Exchange Commission and in the annual report submitted to the CMF available on our website. It is now my pleasure to introduce our CEO, Mr. Patricio Jottar.

[Patricio Jottar Nasrallah, executive]

Thank you, Claudio, and thank you all for joining us today. In the first quarter, 2025, we delivered higher financial results versus last year, expanding consolidated EBITDA and net income by 6% and 10.7%, respectively, in spite of a highly volatile business environment.

In this context, organic consolidated volumes, this is excluding the volumes of Aguas de Origen and AV in Argentina and Paraguay, respectively, were down 1.8%, driven by all operating segments and in soft consumption in the ratio. The higher EBITDA was explained by International Business Operating segment, largely due to Argentina. We are certain that the scenario for 2025 will continue to be challenging and volatile.

Our focus in the coming quarters will be to continue implementing our 2025-2027 strategic plan and its 3 pillars: profitability, growth and sustainability. With a special focus on profitability through further efforts in revenue management and efficiencies. At this time, under the growth pillar in a difficult context for expanding business scale, with focus on brand equity, sales execution and innovation to address new consumer trends. Lastly, in the sustainably pillar, our goal is to progress in our Juntos por un Mejor Vivir in its 2 pillars, Our Planet and Our People.

The figures that I will refer now for the consolidated and the International business operating segment results considered organic figures, this is excluding, again, the consolidation Aguas de Origen in Argentina and AV in Paraguay.

Regarding our consolidated performance in first quarter 2025 organic consolidated net sales were up 3%, explained by 4.9% higher organic average prices in Chilean pesos, while our volumes were 1.8% lower. Higher organic average prices in Chilean pesos were explained by all operating segments as a consequence of revenue management efforts.

Gross profit grew 1.7% organically and organic gross margin contracted by 56 basis points due to higher cost of sales. On the other hand, organic MSD&A expenses expanded 2.7% in Chilean pesos, offsetting inflationary pressures with efficiencies and as a percentage of net sales declined 11 basis points.

In all, organic EBITDA reached CLP 130.6 million, a 4.8% organic increase. In terms of our segments, in the Chile Operating segment, top line expanded 2.8% as a result of a 4.8% increase in average prices when volumes were down 1.9%. Average prices were driven by revenue management efforts, partially compensated by negative mix in the portfolio.

Gross profit decreased 1.1% and gross margin was down 180 basis points compared to last year, mainly driven by higher manufacturing costs and negative mix effect in packaging and cost pressures coming from higher U.S. dollar-denominated costs. MSD&A expenses were 2.7% higher being practically flat as a percentage of net sales due to efficiencies that compensated inflationary pressures. Altogether, EBITDA reached CLP 94,400 million, a 2.4% decrease, and EBITDA margin was down 97 basis points.

In International Business Operating segment, excluding the inorganic volumes from the consolidation of ADO and AV, in Argentina and Paraguay, respectively, organic net sales recorded a 6.3% increase driven by higher organic average prices, which more than offset a 1.2% contraction in organic volumes.

Organic volumes in Argentina were nearly flat, continuing on a recovery part of business sales compared to previous quarters. Meanwhile, Uruguay and Paraguay posted low and mid single-digit organic volume declines, respectively, while Bolivia grew by low single digits. Higher organic average prices were mostly driven by revenue management initiatives in all the geographies. more than offsetting cost pressures coming especially from a weaker Argentina peso against the U.S. dollar and inflationary pressures.

Consequently, organic gross profit expanded 10.7%, our organic gross margin used 202 basis points. Organic MSD&A expenses represented net sales increased 32 basis points, mostly from inflationary pressures in Argentina. In all, organic EBITDA reached CLP 33,435 million, a 28.1% expansion driven by Argentina, Uruguay and Bolivia.

Then Wine Operating segment posted a top line expansion of 2.1%, for driven by a 6.2% rise in average prices where volumes were down 3.8% compared to last year. Lower volumes were explained by a contraction in the Chilean domestic market industry where the exports from Chile were flat. The better average prices were mostly explained by a weaker Chilean peso and its favorable impact on export revenues and revenue management initiatives in the domestic markets.

Gross profit was down 1.6% and gross margin detoriated by 142 basis points due to cost pressures from a higher cost of wine and higher U.S. dollar linked packaging costs. MSD&A expenses were flat as a percentage of net sales from closed 56 basis points due to efficiency. Altogether, EBITDA reached CLP 6,592 million, a 1.1% decrease, and EBITDA margin was down 36 basis points.

Regarding our main JVs and associated businesses, in Colombia, we posted better financial result versus last year despite a slight contraction volumes, which nonetheless was slightly lower than the industry. Now I will be glad to answer any questions you may have.

[Operator]

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

[Fernando Olvera Espinosa de los Monteros, analyst]

First, I would like to explore volume performance in Chile. If you can give us some details of how different was the performance between nonalcoholic and alcoholic beverages. And specifically, beer also if you can comment about the performance between premium and mainstream. That's my first question.

[Patricio Jottar Nasrallah, executive]

Thank you, Fernando, for your question. Look, according this, our overall market share in Chile -- in the Chilean segment is stable. Now, making [ double click ], we have gained some market share, small in nonalcoholic, and we have lost some market share small in beer.

Taking into consideration according to Nielsen data, overall alcohol industry decreasing mid-single digits. These are sell-outs volumes to consumers. The company published selling volumes to clients, including different channels and that are not necessarily reflected in market share. But again, market share in the total Chilean Operating segment stable, with a small increase or gain in nonalcoholic and a small increase or lost in beer.

[Fernando Olvera Espinosa de los Monteros, analyst]

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

[Patricio Jottar Nasrallah, executive]

Excuse me, regarding mainstream and premium? So regarding mainstream and premium stable. Looking forward, there is a big concern not just in Chile, but in the world regarding alcohol patterns of consumption, probably have heard about this because this is something which is being discussed in every company producing and selling alcohol all over the world.

Huge figures. Let's take the consumption of alcohol at 100 degrees. To make this calculation in the beer has 5%, wine calculated 12%, spirits calculated 35%, [indiscernible] of 40%. If you are considering other spirits you calculate the per capita consumption of alcohol of 100 degrees. This figure in Chile, in 2019 was 5.3% liters of alcohol per capita per year, 5.3%. In pandemic, we increased a lot and after pandemic, began to decrease. In 2023 was still 5.3%, same level that pre-pandemic.

But in 2024, it decreased to 5.1% and beginning of '25, the trend is to a decrease, very same figures for United States 7.4% in 2019 pre-pandemic, 7% in 2024. So the decrease in sale has been even higher than Chile and grew well in the world as a whole, 3.1 liters in 2019 at 2.8 liters in 2024.

There are many hypotheses why it is occurring, if you want, we could discuss on this. But my main concern regarding the future are volumes on the alcoholic -- the alcoholic categories. Indeed, I don't see a disaster decline, but the trends are not favorable. We are making a lot of things to change the trend, of course, on responsible consumption base, but this is a concern.

[Fernando Olvera Espinosa de los Monteros, analyst]

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

[Patricio Jottar Nasrallah, executive]

Felipe, could you elaborate on this, please?

[Felipe Dubernet, executive]

Fernando, could you clarify that this is related to -- this is for the import taxes, you mean?

[Fernando Olvera Espinosa de los Monteros, analyst]

Yes. Yes. I mean at consolidated taxes, you mentioned that it declined significantly year-over-year due to lower tax in Argentina because of inflation.

[Felipe Dubernet, executive]

Yes. I understand your question, yes. This is related to the use of inflation for tax purposes. So usually in Argentina until 2019, we didn't use the inflation for tax purposes.

Since 2019, we started to use that, and we have some provisions related to that. Argentina has become more stable in terms of macroeconomics or liberating. As you know, the exchange controls we decided -- we released some provisions related to that in the use of inflation for tax purposes. This is [indiscernible].

[Fernando Olvera Espinosa de los Monteros, analyst]

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

[Felipe Dubernet, executive]

Yes. Yes, because it's gradual.

[Patricio Jottar Nasrallah, executive]

Fernando, one more remark regarding trends of alcohol consumption. My remarks before showing a decline in Chile, United States, and worldwide on the alcohol market consumptions. This is a long-term is a long-term consideration.

But if you consider -- if you make double in quarters, Q2 last year in Argentina was very poor and Q2 in Chile was very poor. So we expect to have a much better result regarding alcoholic volumes in Q2, but the leaving it apart, because it's a consideration on the basis of 2024, the trend is not for the industry according to...

[Operator]

Our next question is from Álvaro García from BTG.

[Alvaro Garcia, analyst]

Just -- I have a couple of questions. One on how you're thinking about margins in Chile in a stronger Chilean peso environment into the second half of this year. Obviously, you've had a lot of questions over the last couple of years on sort of where you can take margins over the medium term, and we seem to be getting in a better sort of input cost environment for you? So that would be interesting.

And then my second question is on Argentina. I was wondering if you could talk about pricing because we were a little bit surprised. I mean I know you're consolidating a water business, which obviously has much lower pricing. But I was wondering if maybe you can comment a bit on pricing? There was a little bit of a surprise, let's say, in our model there, what you're seeing from a pricing standpoint as inflation comes down?

[Patricio Jottar Nasrallah, executive]

Thank you, Álvaro, for your 2 questions. I will begin with Argentina and then I will jump to Chile.

Look, it's a big question mark, because I mean, for many years, prices were key in Argentina, and we have no difficult to increase prices in line to inflation let higher than inflation because if inflation amount is 10% and increase prices by 11% or 12%, nothing happens.

Consumers are there are paying for your products. Now inflation is decreasing a lot and has the deliberation of the exchange rate, the exchange rate remained almost stable in Argentina. So there are different opinions on what's going to happen with inflation Argentina.

Some people think that the inflation will continue to be 2% per year. Some people are saying that it will move to 0 very rapidly and their opinions also saying that probably will have negative inflation, and this is first remark.

Second remark, there are some services which are adjusting their prices. So there is a keen inflation, which we came from those services with which prices have been controlled. So we expect that price increase of the industry of the consumer products industry will be lower than official inflation for this effect.

So we don't know, we're not sure. I prefer to think that inflation is going to be very low. That is going to be very difficult to continue increasing prices and that we have to compensate these within costs, which are helping and with strong efficiencies programs on SG&A.

This is what we are doing. If inflation continues to be 2%, indeed, we will have to increase price. Otherwise, we'll have a huge gap, which is impossible to find. But again, this is executing every single day. Every single day.

But summarizing, if inflation continue being high 2% to 2%, we'll continue increasing price in line with inflationary margins also. If inflation collapse going to 0, we would not be able to increase price in both cases. And we are making a effort in reducing expense.

Regarding margins in Chile, we have been increasing prices to compensate the price that we need to increase in the past when the cost of raw material and the input cost jumped a lot. We are recuperating margin margins quarter after quarter, we continue with this trend. In one hand, input costs are helping, and we are being very extreme on being efficient in our expenses.

Altogether, we expect to recuperate margins. Having said that, the comparison basis in Q2 2024 were very weak. So we'll have a good Q2 but this is something exceptional associated to the weak basis of comparison for 2024. But at long-run the strategy is to recuperate margins.

[Alvaro Garcia, analyst]

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

[Patricio Jottar Nasrallah, executive]

Yes, definitely less. Having that in 2024, we passed more than inflation to prices and in Q1 and the trend continues in Q2, it's extremely difficult to increase prices because -- this is the reason why I think that inflation is going to collapse very soon, but personally, I think the inflation will move in the range of 0 to 0.5% for maximum 1% per month because we had last. Our categories and we see the market that prices of consumer goods are very stable and been very difficult to increase prices. But again, we need to see at least what we are seeing today.

[Operator]

[Operator Instructions]. So our next question is from Felipe Ucros from Scotiabank.

[Felipe Ucros Nunez, analyst]

So my first one is around costs. The release mentioned that you experienced higher manufacturing costs in Chile. I was curious about the language about it being around manufacturing rather than raw materials. Can you expand on what exactly were the drivers for these costs? And then I'll have a follow-up after that.

[Patricio Jottar Nasrallah, executive]

Indeed, Felipe, there are onetime -- Felipe Dubernet why don't you elaborate on details?

[Felipe Dubernet, executive]

So the higher manufacturing costs were due to 2 reasons. One was about the inventory depletion as we have reduced inventory at the end, the allocation of fixed cost wire a year ago. So it's an accounting issue or matter. On the other hand, higher labor costs that we experienced in Chile because of some -- we needed some -- we need to improve definitely our sales and operation planning because we sure in over time, and this was due to higher labor costs and also included some write-offs of some lines that we are not using anymore because they were too old and were replaced by new technologies.

So we incurred on extra depreciation costs as we have allocated write-off in the key operating segment in the Chile segment in the depreciation line. So that was due -- so this is -- so we have 2 one-off that Patricio mentioned, one is related to write-off in the Chile Operating segment. And second is invest.

We have less inventory than last year in Chile, so was affected by the allocation of fixed expenses, that's an accounting matter. And the over time that is an efficiency because of, let's say, not too good sales and project that we have a project that is called [indiscernible], but we did some discussion that we have a report that we are working in improving our plan. So we oversee that in the following quarters, we should deliver efficiencies and be more efficient in manufacturing.

[Felipe Ucros Nunez, analyst]

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

[Patricio Jottar Nasrallah, executive]

Thank you for your remarks more than beginning to work, has worked for many year. Here, we have the figures, but the MSD&A as a percentage of sales has declined by 5% or more in a longer period of time.

But we are putting much more pressure today on this as we expect volumes of alcoholic products to be tough in the future, as I mentioned before, and as I expect that Argentina we have tough times regarding prices. The combination of these elements supplies us and all the companies according to our opinion, to be much more term on executing efficiencies programs, and we are in tight direction. We're moving in that direction.

[Felipe Ucros Nunez, analyst]

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

[Patricio Jottar Nasrallah, executive]

Now from another line , particularly on sales efforts, we are replacing a lot of functions made by sales people through technology with a lot of success. In a few words, typically, for many years, a salesperson had 4 responsibilities.

Number one, to recommend the client for what to buy. Number two, to execute or to place the order. Number three, to execute in the point of sales. And number four, to keep a good personal relation with the client. On these 4 activities, the first 2 are completely could be completely replaced by technology.

Today, our artificial intelligence programs are matched or smarter than our sales force to recommend the client what to buy. Number one, and there are much more efficient ways to place the orders through a digital on the other. Sales force is still extremely important to execute in the cost of sales, number one and to have the personal relation with the client on the app but we need less sales force to do these and more technology, and we're moving rapidly in this direction.

[Felipe Dubernet, executive]

Can I complement Patricio here. If you look at our MSD&A, especially in Chile, the main operating segment. They were below inflation by 2.7%, while marketing expenses were above inflation.

So it means that we are making efficiencies, as Patricio said, in sales but also in distribution. Distribution also is a key because it's a big chunk of money there. As you know, price efficiency warehouses, efficiencies. So there, we are seeing perfectly is in the good path, let's say, efficiency program, as I said.

If we maintain the path of growing our expenses less than inflation while maintaining or investing better in marketing, that's a good sign. In fact, we measure 4 times per year the brand equity of each one of the branch or portfolio and the brand equity of each one of the brands of our competitors.

And the indicators of Q1 2025 for our key categories show us that our brand equity indicators are one of the highest historically in the last 10 years that our portfolio today is extremely healthy. And this gives us a lot of confidence on having good volumes, good market shares, good prices to continue improving our profitability.

[Operator]

Our next question is from Ewald Stark also from BICE Inversiones.

[Ewald Stark Bittencourt, analyst]

In the press release, you mentioned that competition and the context remains highly volatile and you expect to do so in the coming quarters. So I wanted to ask, how do you expect competition? How aggressive you expect competition to be in Chile in the remaining of the year?

[Patricio Jottar Nasrallah, executive]

Thank you, Ewald, for your questions. Competition has always been very tough. Now the category is where we participate in Chile and the other country. I think that it is not going to change. At the same time, this is the same my main comment.

But the good element of -- I mean, the tough element of having tough competition is difficult to make money, to increase prices, to increase margins but we are glad to do this, particularly through efficiencies. The good thing of tough competition is that it promotes per capital consumption which is key because as I mentioned before, the alcohol consumption all over the world is under pressure for many reasons and a lot of competition, a lot of innovation, a lot of marketing, a lot of execution at the point of sale contributes to offset those trends.

Let me give you one example, which is a very clear signal of this. Per capita consumption in Chile in beer, we complete strongly in beer. Per capita consumption in beer in 2014, 10 years ago it was 44 liters. [indiscernible], per capita consumption of beer in 2024 and years after was 54.2%, 10 more liters per capita.

In the United States, in the same period per capital consumption has decreased from 34 -- excuse me, 74.5 to 59 liters. And in the world from 25.4 liters to 22.7 liters. So two, we have been competing in a very tough way in all our categories for many years, still true, and it will continue to be true. But I think that at the end of the day, it's good for categories and we're not afraid of this. And it obliges us to improve our capabilities day after day.

And finally, as I mentioned before, the high level of brand equity mentioned quarterly and got a maximum level in the last 10 years. In the last many years, in most of our categories. So we are very glad on that, and it will allow us to be a strong competitor in Chile and the other countries where we participate.

[Operator]

Our next question is from [ Constanza Gonzalez ] from Quest Capital.

[Unknown Analyst]

I have a question regarding Argentina. For example, hearing that you are seeing recording in the economy. Do you expect that volumes in the quarter are going to increase?

And the second question about with this -- the variation of economy. Do you expect to bring more dollars from Argentina to Chile? How is going to be the process? I would appreciate if you can give us some color about that change.

[Patricio Jottar Nasrallah, executive]

Indeed, [ Constanza ], regarding volumes Argentina. The presence of Mr. [indiscernible] inflection was very high, but there was a lot of man in the pockets of consumers before the adjustment. The value rate of our volumes, the run rate are the volumes of the last quarter adjusted by seasonal effect, I mean, the industry, I mean, let's say, was and [indiscernible].

In the worst moment in 2024, that was Q2 and Q3, volumes of rail industry decreased on valued rate basis by 20%. So if were 100 before, were 8 after. Today, we are in 90 and in the middle of the road between pre-adjustment and the worst moment after adjusting.

This is my remark number two, the movement of the adjustment was Q2 and Q3 2024. So we expect to have good growth in volumes compared with those figures. But again, 90 is less than 100. So the industry is stabilizing in a level which is 10% better than the worst moment but 10% lower than the pre-adjusted movement.

And regarding your second question, I will ask Felipe to elaborate.

[Felipe Dubernet, executive]

This was regarding to the new measures announced on April 14 by the Argentinian government. Yes, the Central Bank announced an agreement first with the International Monetary Fund, which is good, but also includes a comprehensive financing package a new regulatory framework for exchange rate controls.

These announcements, of course, for the futures are very positive because for results or income delivered from audited financial statement for from 2025 and then after we would be able to bring dividends from Argentina, which is a good news for the future. I cannot tell you if we will bring or not dividend will depend on our results and other accounts.

And also, it was announced a new [indiscernible], which is a new bonus our construction at the Argentina Libre in Spanish that would allow us to sell some accounts that we have with some commercial partners that we have foreign rate exposures in our P&L, which is positive, but also to pay some unsettled share service from the old company -- from the company to Argentina.

We saw -- first is to settle the accounts would be the first objective. And then, of course, for the future is positive that we could bring dividends from the results from 2025 and the after. So we see very good is this new announcement of the government.

[Unknown Analyst]

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

[Patricio Jottar Nasrallah, executive]

No, we do not make projections publicly for the long term. But we are trying to recuperate EBITDA margin in beer business, both in Chile and Argentina.

[Operator]

We have a follow-up question from Fernando Olvera from Bank of America.

[Fernando Olvera Espinosa de los Monteros, analyst]

I just -- I would like to hear your thoughts about the weak demand in wine in both local market and exports. Is there any other reason beside a lower demand of alcohol? And also, how do you expect volumes to behave in the remainder of the year given that you will face your comps?

[Patricio Jottar Nasrallah, executive]

Thank you, Fernando. I think I mentioned before the trends to reduce alcohol consumption on the whole alcoholic category. But if you don't keep the one category has been the wine suffering the most figures. This is Chile, 2019, the per capita of wine, including sparkling wine, wine and sparkling wine, 2019, 12.7 liters, 2024 10.5 liters, continued declining.

United States wine and sparkling wine, 2019, 9.8 liters, 2024 8. 4 liters, and there were as a whole, which backs on our ability to export per capita in 2019 of wine, 3.8 liters, 2024, 3.3 liters.

So among all the categories, the one suffering the most is the wine. The beer and spirit categories have been able to defend themselves. I think that because the wine categories are much more conservative. And the category has bringing a lot of innovation and the speed category has been much more innovation, particularly on flavored alcoholic products which are growing a lot. A low alcohol, flavored, sparkling, those categories are increasing a lot, and we are moving strongly in those categories, based on beer, based on spirit, but also based on wine in Chile, we have been able to defend volumes and profitability by doing this, and we expect those categories to grow a lot in the future.

But regarding this year, we prefer not to make public estimations. Of course, we have our own estimations, but we prefer not to make -- not to make that public. But again, the trend is complicated, as I mentioned before, particularly for wine, but we are trying to offset those trends by pushing a lot of those flavored low level of alcoholic producst and also nonalcoholic products ,beer without alcohol and others.

Starting wine without alcohol, we expect those categories to grow in the future, and we are pushing a lot with a lot of margin and in fact, because those categories make sense because they bring volume and they also bring margin. At the very beginning, you have to invest marketing. You have to generate a little bit of additional cost in your operation, but we are convinced that they will be extremely important in the future, not only the future, in the near future, and that's it.

[Operator]

We have a question from Santiago Petri from Franklin Templeton.

Do you perceive a change in consumption habits towards beer consumption globally. Why are soda is doing better than beer? What is your outlook for your consumption in the future?

[Patricio Jottar Nasrallah, executive]

Thank you, Santiago, for your question. It's a key question that probably you text this question beforehand, my last remarks. But again, I will repeat some figures and give you an additional figures all over the world in the last 10 years, I mean let's compare pre-pandemic with post-pandemic here . And all over the world, there capital was 23.9%, 2024, 22.7%. So a decline but not as important than actually the [indiscernible] in the case of wine. Chile per capita in 2019 , 52.2, 2024, 54.2.

So we have been able to moving in a different direction than the work in the beer category. And as [indiscernible] among other reasons in the competitive environment that we have in Chile, which apply all competitors to give very smart on promote our volumes. So we have been able to move in the right direction. 2025 trend is not, as I mentioned before this shows, and this is our -- I would say that this is the key challenge for all the companies producing alcohol all over the world. And we are facing these channels, but indeed, it is a challenge.

[Operator]

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

[Patricio Jottar Nasrallah, executive]

In summary in first quarter 2025, we were able to deliver higher financial results, expanding EBITDA and net income in a challenging business environment for volumes and continuous cost pressures. In line with our priority of recovering profitability, we implemented revenue management efforts across all operating segments while continuing to deliver efficiencies.

Furthermore, in 2025 are celebrating 175 years of history, a period during we have overcome many challenging times by being a dynamic and innovative company, capable of adapting to transformations of Chile and the other countries where we have expanded our operations. This past business experience, we did key to navigating the current uncertain business scenario, especially in terms of consumption trends and exchange rate volatility. Thus, we continue implementing our 2025-2027 segments to be planned, supporting our multi-category strategy to ensure sustainable and profitable growth for CCU.

[Operator]

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