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01/10 16:01
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Consolidated EBITDA Grew 4.6% year-over-year, driven by the main operating segment, Chile, which expanded EBITDA margin through gross margin improvement and efficiencies. The International Business Operating segment also expanded EBITDA, despite challenges in Argentina. The Wine Operating segment posted lower EBITDA due to weaker domestic markets in Chile and Argentina and higher wine costs.
Net Sales Decreased 1.1% year-over-year, explained by 2.2% lower average prices in Chilean pesos, partially offset by 1.2% volume growth.
Gross Profit Decreased 2.9% year-over-year, with gross margin down 79 basis points.
Consolidated MSD&A Expenses Dropped 4.7% year-over-year in Chilean pesos due to efficiencies and a favorable translation currency effect from Argentina.
Chile Operating Segment - Top Line Expanded 1.8% year-over-year due to a 2.4% increase in average prices, partially offset by 0.6% lower volumes. Higher average prices were driven by revenue management efforts, while lower volumes were due to soft industries, mainly in alcoholic categories.
Chile Operating Segment - Gross Profit and Margin Gross profit expanded 3.6% and gross margin expanded 75 basis points year-over-year, due to lower cost pressures from favorable raw material prices, which offset higher costs from the PET recycling plant, CirCCUlar.
Chile Operating Segment - EBITDA Increased 4.8% year-over-year, with EBITDA margin expanding 41 basis points. Excluding costs and expenses associated with CirCCUlar, EBITDA would have expanded 10.2% and EBITDA margin by 117 basis points.
International Business Operating Segment - Volumes Posted a 5.3% expansion year-over-year, although net sales contracted 8.9% due to 13.5% lower average prices in Chilean pesos. The decline in average prices was mainly due to the 42.2% devaluation of the Argentine peso and a challenging pricing scenario in Argentina.
International Business Operating Segment - Gross Profit and Margin Gross profit decreased 16.6% and gross margin contracted 382 basis points year-over-year.
International Business Operating Segment - EBITDA Grew 73.1% year-over-year, driven by all geographies in the segment.
Wine Operating Segment - Top Line Expanded 1.6% year-over-year, driven by a 4.8% rise in average prices, partially offset by a 3% decline in volumes. Higher average prices were due to a weaker Chilean peso and revenue management initiatives, while volume contraction was due to a 6.3% decrease in the Chile domestic market, partially offset by 4.5% growth in exports.
Wine Operating Segment - Gross Profit and Margin Gross profit decreased 1.6% and gross margin deteriorated by 128 basis points year-over-year, due to cost pressures from higher wine costs and U.S. dollar-linked packaging costs.
Wine Operating Segment - EBITDA Decreased 12% year-over-year, with EBITDA margin down 224 basis points.
Joint Venture and Associated Business in Colombia Delivered low double-digit volume growth year-over-year, outperforming the industry, supported by a robust brand portfolio and sales execution.
CirCCUlar PET recycling plant: Higher costs from the PET recycling plant impacted gross profit and margin in the Chile Operating segment. However, excluding these costs, EBITDA would have expanded 10.2% and EBITDA margin by 117 basis points.
International Business Operating segment: Volumes expanded 5.3%, driven by water category growth in Argentina and higher volumes in Bolivia and Paraguay. However, net sales contracted 8.9% due to a 42.2% devaluation of the Argentine peso and challenging pricing in Argentina.
Wine Operating segment: Top line expanded 1.6% due to a 4.8% rise in average prices, driven by a weaker Chilean peso and revenue management initiatives. Export volumes grew 4.5%, but domestic volumes in Chile fell 6.3%.
Colombia joint venture: Achieved low double-digit volume growth, outperforming the industry, supported by a robust brand portfolio and sales execution.
Profitability improvements: Consolidated EBITDA grew 4.6% in Q3 2025 and 9.9% year-to-date, driven by revenue management and operational efficiencies.
Cost management: MSD&A expenses in Chilean pesos dropped 4.7% due to efficiencies and favorable currency effects from Argentina.
2025-2027 strategic plan: Focused on profitability through revenue management and operational efficiencies, showing progress in recovering profitability.
Volatile and uncertain business scenario: The company operates in a volatile and uncertain business environment, which could impact financial performance and strategic execution.
Challenges in Argentina: The beer industry in Argentina contracted mid-single digit during the quarter, and the pricing scenario is challenging with prices growing below inflation and negative mix effects.
Weaker domestic markets in Chile and Argentina (Wine Segment): The Wine Operating segment faced weaker domestic markets in Chile and Argentina, coupled with higher costs of wine, leading to a lower EBITDA.
Decline in average prices in International Business: The International Business segment experienced a decline in average prices in Chilean pesos, driven by a 42.2% devaluation of the Argentine peso against the U.S. dollar and challenging pricing conditions in Argentina.
Cost pressures in Wine Segment: The Wine Operating segment faced cost pressures from higher costs of wine and U.S. dollar-linked packaging costs, which negatively impacted gross margin.
Higher costs from PET recycling plant (CirCCUlar): The Chile Operating segment faced higher costs from the PET recycling plant, CirCCUlar, which impacted profitability.
2025-2027 Strategic Plan: The company is focused on recovering profitability through revenue management efforts and efficiencies.
Chile Operating Segment: Revenue management efforts are expected to continue driving higher average prices. Lower cost pressures from favorable raw material prices are anticipated to support gross margin expansion.
International Business Operating Segment: Volume growth is expected, particularly in Argentina's water category, despite challenges in the beer industry. Bolivia and Paraguay are projected to maintain higher volumes, while Uruguay may see slight contractions.
Wine Operating Segment: Export growth is expected to continue, supported by a weaker Chilean peso and revenue management initiatives. However, cost pressures from higher wine and packaging costs may persist.
Joint Venture in Colombia: The company aims to sustain long-term volume and financial growth through a robust brand portfolio and improved sales execution.
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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