Compania Cervecerias Unidas Q2 Earnings Call Highlights

Key Points

• Q2 consolidated EBITDA surged 59.4% year over year, driven by stronger profitability in Chile and a narrower international loss. Sales rose 4.8% as 6.4% pricing growth more than offset a 1.5% volume decline.
• Chile was the main growth engine, with EBITDA up 26.2% and margin expanding 264 basis points, supported by market-share gains, non-alcoholic growth and lower costs from peso appreciation. CCU also acquired Nestlé Chile’s remaining stake in its water subsidiary, gaining full ownership.
• The wine business remained a major weakness: sales fell 14.1% and EBITDA dropped 61.9% amid weaker demand, lower exports and higher wine costs. CEO Eduardo Ffrench-Davis introduced the “Vamos por Más” strategy, while leverage rose to 2.4 times EBITDA following the water acquisition.

Compania Cervecerias Unidas NYSE: CCU reported a 59.4% year-over-year increase in consolidated EBITDA for the second quarter of 2026, supported primarily by improved profitability in Chile and a narrower loss in its international business. The company’s wine operation remained under pressure amid weaker category demand and elevated wine costs.

In his first earnings call as chief executive officer, Eduardo Ffrench-Davis said CCU is introducing a strategy called Vamos por Más, designed to address a challenging and volatile operating environment. The strategy is built around four pillars: increasing business focus, boosting operational synergies, acting with greater agility and accelerating transformation. CCU plans to implement organizational and process changes gradually through the rest of 2026 while maintaining operational continuity.

Consolidated sales rise as pricing offsets lower volume

Chief Financial Officer Felipe Dubernet said consolidated net sales increased 4.8%, as average prices in Chilean pesos rose 6.4% and volumes declined 1.5%. The higher pricing reflected revenue-management actions across operating segments.

Gross profit grew 6.8%, with gross margin improving by 76 basis points. Marketing, selling, distribution and administrative expenses increased 3.3%, reflecting higher distribution costs tied to oil prices and restructuring charges in Argentina and the wine segment. Those expenses were partly offset by logistics efficiencies and declined by 62 basis points as a percentage of net sales.

Net income, however, reflected a higher loss than in the second quarter of 2025. Dubernet attributed the result largely to a non-recurring CLP 6.068 billion impairment related to CCU’s Bolivia business, as well as the comparison with a prior-year non-recurring positive tax effect in Argentina.

Chile drives EBITDA growth

CCU’s Chile operating segment recorded 1.5% revenue growth. Volumes increased 2.5% and the company gained overall market share versus the prior-year quarter, though average prices declined 1% in Chilean pesos because of portfolio mix effects.

Non-alcoholic categories grew at a mid-single-digit rate, more than offsetting a low-single-digit decline in alcoholic categories, which include beer and spirits. Flavored, low-alcohol ready-to-drink products such as Stones, Mistral Ice and Kantal delivered double-digit volume growth and represented 8.3% of total alcohol in the Chile segment as of June.

Chile gross profit increased 9.4%, aided by lower direct costs from a 5% appreciation of the Chilean peso against the U.S. dollar, partially offset by higher aluminum prices. Segment EBITDA rose 26.2%, and EBITDA margin expanded 264 basis points.

During the quarter, CCU acquired Nestlé Chile’s 49% stake in subsidiary Aguas CCU-Nestlé, taking full ownership of the water business. Ffrench-Davis said the transaction should make decisions in the water operation more agile while preserving CCU’s strategic relationship with Nestlé, including distribution of ready-to-drink coffee beverages and water brands in Chile.

The company said Chile’s water industry was growing at a low-double-digit rate as of June. Management highlighted continued innovation behind Cachantún mineral water, flavored-water offerings and the Manantial purified-water brand.

Argentina loss narrows; wine business faces continued pressure

International business net sales increased 15.7%, driven by a 24.9% increase in average prices in Chilean pesos, largely from inflation-linked price actions in Argentina. Volumes fell 7.4%, however, due mainly to a high-single-digit contraction in Argentina’s beer and water industries and disruptions in Bolivia caused by social unrest and roadblocks.

The international segment’s gross profit rose 20.8%, while expenses grew 7.6% and declined 460 basis points as a share of sales. EBITDA loss narrowed 25.8% from a year earlier. CCU incurred CLP 1.408 billion in Argentina restructuring expenses during the quarter.

Dubernet said Argentina’s consumption environment had not yet fully recovered despite improved inflation and currency conditions. However, he said seasonally adjusted volume trends had improved month to month since March, and the company expects a more favorable comparison base in the second half after volumes collapsed in the third quarter of 2025.

CCU’s wine segment posted a 14.1% decline in net sales, with volume down 13.7% and average prices down 0.5%. The company cited contraction in export markets and Chile’s domestic wine market, unfavorable portfolio mix and the stronger Chilean peso’s impact on export revenue. Gross profit fell 26.9%, primarily due to higher wine costs, and EBITDA declined 61.9%.

The company recorded CLP 1.633 billion in wine-segment restructuring expenses. Management said it is pursuing efficiencies, integrating wine and spirits capabilities in Chile, and expanding high-margin innovation. Wine-based flavored, low-alcohol ready-to-drink products nearly doubled as of June, led in part by the single-serve can launch of Gato Selección Dulce.

Strategy and capital priorities

Ffrench-Davis said CCU will replace its current strategic plan with a four-year plan extending to 2030, including performance indicators for that period. He said the company intends to differentiate core businesses from high-potential businesses, deepen its multi-category approach to consumer occasions, reduce redundancies and use digital tools and real-time operational controls across sales, logistics, planning and manufacturing.

In Colombia, where CCU reported mid-teens volume growth, management said it sees the country as a core market with room for expansion despite intense competition. The company plans to broaden its portfolio and compete through differentiated brands and channels to improve profitability over time.

CCU’s net financial debt-to-EBITDA ratio rose to 2.4 times from 1.7 times in the prior quarter following the Aguas CCU-Nestlé acquisition, which was funded with cash that included proceeds from a 2022 international bond issuance. Dubernet said management expects leverage to move toward the middle of its stated 1.5-to-2.5-times range if Chile remains strong and Argentina recovers. He added that the company’s policy of distributing at least 50% of net income as dividends remains in place for the current year.

About Compania Cervecerias Unidas (NYSE:CCU)

Compañía Cervecerías Unidas SA NYSE: CCU is a Chile-based beverages company with operations across Latin America. The company engages in the production, marketing and distribution of beer, soft drinks, wines, mineral water and other non-alcoholic beverages. Through a combination of owned brands and licensing agreements, CCU serves both domestic and export markets with a diversified portfolio designed to meet evolving consumer tastes.

In its beer segment, CCU produces flagship brands such as Cristal, Escudo and Royal Guard, while also brewing international labels under license, including Heineken in select markets.

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