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01/10 16:06
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents mixed signals: while there are positive aspects like EBITDA growth and export volume increases, challenges such as inflation in Argentina, cost pressures from the r-PET law, and management's refusal to provide guidance weigh negatively. The market cap suggests moderate volatility, hence, a neutral short-term stock price reaction is anticipated.
Consolidated EBITDA Nearly doubled versus last year, mainly driven by Chile (59.1% growth) and Wine Operating segment (8.3% growth). Reasons include volume growth, revenue management efforts, and efficiency, offsetting inflation-related cost pressures.
Net Income Posted a lower loss versus last year. Reasons include higher consolidated EBITDA and improved EBITDA margin.
Organic Net Sales Up 4.8%, explained by 4.7% higher organic volumes while organic average prices were flat.
Gross Profit Grew 6.7% organically and gross margin expanded 73 basis points. Reasons include revenue management efforts and efficiencies.
MSD&A Expenses Grew 5.8%, mainly due to the consolidation of Aguas de Origen in Argentina. As a percentage of net sales, improved 197 basis points. Without the consolidation, expenses would have increased 0.5%.
EBITDA Margin Expanded 150 basis points. Reasons include volume growth, revenue management efforts, and efficiency.
Chile Operating Segment - Top Line Expanded 9.4% due to a 6% increase in average prices and 3.2% higher volumes. Reasons include revenue management efforts and positive growth across all categories.
Chile Operating Segment - Gross Profit Increased 12.5% and gross margin expanded 115 basis points. Reasons include revenue management efforts offsetting cost pressures from unfavorable packaging mix and higher manufacturing costs.
Chile Operating Segment - MSD&A Expenses Grew 2.1% and as a percentage of net sales improved 265 basis points due to efficiencies.
Chile Operating Segment - EBITDA Increased 59.1% and EBITDA margin expanded 339 basis points. Reasons include revenue management efforts and efficiencies.
International Business Operating Segment - Organic Volume Posted a 9.8% expansion. Reasons include a low comparison base in Q2 2024 in Argentina and a recovery trend in volumes.
International Business Operating Segment - Net Sales Recorded an 11.4% contraction due to 19.3% lower organic average prices in Chilean pesos. Reasons include Argentine peso devaluation and a challenging pricing scenario in Argentina.
International Business Operating Segment - EBITDA Loss was similar to last year despite volume growth. Reasons include devaluation of the Argentine peso and higher marketing expenses.
Wine Operating Segment - Top Line Expanded 6%, driven by 4.2% rise in volumes and 1.7% higher average prices. Reasons include export growth and revenue management initiatives.
Wine Operating Segment - Gross Profit Flat, with gross margin deteriorating by 222 basis points. Reasons include cost pressures from higher wine costs and USD-linked packaging costs.
Wine Operating Segment - MSD&A Expenses Dropped 3.7% with efficiencies, and as a percentage of net sales improved 174 basis points.
Wine Operating Segment - EBITDA Increased 8.3% and EBITDA margin was up 32 basis points. Reasons include export growth and revenue management initiatives.
PET recycling plant (CirCCUlar): Higher manufacturing costs were associated with the PET recycling plant, indicating its operational impact.
Chile Operating Segment: Top line expanded 9.4% due to a 6% increase in average prices and 3.2% higher volumes. All categories posted positive growth.
International Business Operating Segment: Organic volume expanded 9.8%, but net sales contracted 11.4% due to a 19.3% decline in organic average prices, mainly from Argentine peso devaluation.
Wine Operating Segment: Top line expanded 6%, driven by 4.2% rise in volumes and 1.7% higher average prices. Export volumes grew 17.4%, while domestic market volumes declined 4.1%.
EBITDA Growth: Consolidated EBITDA nearly doubled, driven by volume growth, revenue management, and efficiency improvements.
Cost Management: MSD&A expenses grew below inflation in Chile, improving as a percentage of net sales by 265 basis points.
2025-2027 Strategic Plan: Focused on profitability, growth, and sustainability, with emphasis on revenue management and operational efficiencies.
Challenging Scenario in Argentina: The company faces a challenging business environment in Argentina, impacting the International Business Operating segment's results. This includes the devaluation of the Argentine peso against the U.S. dollar and a challenging pricing scenario.
Cost and Expense Pressure from Inflation: Despite higher consolidated EBITDA, the company is experiencing cost and expense pressures due to inflation, which could impact profitability if not managed effectively.
Unfavorable Packaging Mix and Higher Manufacturing Costs: In the Chile Operating segment, cost pressures are related to an unfavorable packaging mix and higher manufacturing costs, particularly associated with the PET recycling plant CirCCUlar.
Higher Cost of Wine and Packaging Costs in Wine Segment: The Wine Operating segment is facing cost pressures from a higher cost of wine due to a lower harvest and higher USD-linked packaging costs, which have deteriorated gross margins.
Soft Volume Trends in Beverage Industry: The company is operating in a context of soft volume trends for the beverage industry in the region, which could limit growth potential.
Second Half 2025 Strategic Plan Execution: The company will continue executing its 2025-2027 Strategic Plan, focusing on profitability, growth, and sustainability. Special emphasis will be placed on profitability through revenue management efforts and operational efficiencies across all operating segments.
Chile Operating Segment Outlook: The company expects continued growth in the Chile Operating segment, driven by revenue management efforts and efficiencies. Gross profit and gross margin are anticipated to expand despite cost pressures from packaging and manufacturing.
International Business Operating Segment Outlook: The company anticipates a recovery trend in organic volumes for the fourth consecutive quarter, despite challenges such as the devaluation of the Argentine peso and a difficult pricing environment in Argentina.
Wine Operating Segment Outlook: The company projects growth in export volumes, supported by a weaker Chilean peso and revenue management initiatives. However, cost pressures from a lower harvest and higher USD-linked packaging costs may impact margins.
Colombian Market Strategy: The company plans to strengthen its brand portfolio and execution in Colombia to achieve sustainable growth in volume and results.
The selected topic was not discussed during the call.
The earnings call reveals strong financial performance, with a high ROIC, increased EPS, and reduced net debt. The shareholder return plan is balanced, with significant buybacks and dividends. Despite a revenue dip in one segment, margins improved, and client sentiment is bullish. The Q&A highlighted potential risks like operating costs and unclear guidance, but overall, the strategic execution and positive financial metrics suggest a positive stock price movement.
The earnings call presents a mixed picture. Positive aspects include growth in the Chile segment's EBITDA and international EBITDA, along with strategic initiatives in Colombia. However, there are concerns about declining margins, especially in the wine segment, and challenges in Argentina. The Q&A reveals uncertainty in Argentina and potential cost pressures. The overall sentiment is neutral, with no strong catalysts for a significant stock move. Given the company's small-cap status, it may experience mild fluctuations, but the overall impact is expected to be neutral.
The earnings call presents mixed signals: while there are positive aspects like EBITDA growth and export volume increases, challenges such as inflation in Argentina, cost pressures from the r-PET law, and management's refusal to provide guidance weigh negatively. The market cap suggests moderate volatility, hence, a neutral short-term stock price reaction is anticipated.
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