Compañía Cervecerías Unidas (CCL) Q3 2024 earnings summary

Executive summary

• Achieved a positive turnaround in Chile and Wine segments with volume and EBITDA growth, while International Business, especially Argentina, faced sharp volume and revenue contractions.

• Consolidated volumes rose 5.7%, but organic volumes declined 5.5% due to weak demand in Argentina.

• Net income surged 211.1% to CLP 29,548 million, driven by improved non-operating results and non-recurring gains from asset and land sales.

• EBITDA margin contracted by 200 bps to 10.6% in 3Q24, reflecting higher costs and lower gross margin.

• Strategic focus on profitable growth, innovation, and operational efficiency under the 2022-2024 plan.

Financial highlights

• Net sales: CLP 665,823 million in 3Q24, down 3.0% year-over-year; YTD 2024 net sales: CLP 1,936,489 million, down 2.8%.

• Organic revenues declined 6.9% year-over-year, with organic volumes down 5.5% and average prices down 1.5% in Chilean pesos.

• EBITDA: CLP 70,431 million in 3Q24, down 18.4% year-over-year; organic EBITDA fell 17.2% to CLP 71,483 million.

• EBITDA margin contracted 200 bps to 10.6%.

• Consolidated net income rose 211.1% to CLP 29,548 million, mainly due to improved non-operating results and non-recurring land sale gain.

Outlook and guidance

• Focus remains on profitability recovery, revenue management, and cost efficiencies, especially in Chile and Wine segments.

• Expecting a catch-up in wine export sales in Q4 after logistical delays in September.

• Anticipate easier comps and potential upside in Chile for Q4 due to last year’s weather-related volume drop.

• Sequential improvement in Argentina volumes seen in October, with cautious optimism for continued recovery.

• Continued execution of transformation and innovation programs to drive growth.