Good day, everyone, and welcome to CCU's Third Quarter 2025 Earnings Conference Call on the 6th of November, 2025. Please note that today's call is being recorded. At this time, I'd like to turn the conference call over to Claudio Las Heras, the Head of Investor Relations. Please go ahead, sir. Welcome, and thank you for attending CCU's Third Quarter 2025 Conference Call. Today with me are Mr. Felipe Dubernet, Chief Financial Officer, Mr. Joaquín Trejo, Financial Planning and Investor Relations Manager, and Carolina Burgos, Senior Investor Relations. You have received a copy of the company's consolidated third quarter 2025 earnings release. The call will start by reviewing our overall results, and then we will move into a Q&A session. As every quarter, before we begin, please take note of the following statement. The statements made in this conference call that relate to CCU's future financial results are forward-looking statements, which of course, involve known and unknown risks and uncertainties that could cause actual performance or results to materially differ. These statements should be taken in conjunction with the additional information about risk and uncertainties set forth in CCU's Annual Report in Form 20-F filed with the U.S. Securities and Exchange Commission and in the annual report submitted to the CMF and available on our website. It is now my pleasure to introduce our CFO, Mr. Felipe Dubernet. Thanks to Claudio, and thanks to you all for joining the call today. In the third quarter 2025, CCU posted higher operating results and increased profitability versus last year in a volatile and uncertain business scenario. Consolidated EBITDA grew 4.6% versus last year, mainly driven by our main operating segment in Chile, which in the context of soft industries, expanded EBITDA margin through gross margin improvement and efficiencies, maintaining the positive trend in financial results throughout the year. The international business operating segment also expanded EBITDA versus last year. Within the segment, we are facing a very challenging scenario in Argentina, where the beer industry contracted mid-single digits during the quarter. On the other hand, the wine operating segment posted a lower EBITDA driven by weaker domestic markets in Chile and Argentina, together with a higher cost of wine. Our year-to-date results show that our path to recover our profitability remains on track, supported by our 2025/2027 strategic plan, which prioritizes profitability through revenue management efforts and efficiencies. Regarding our main consolidated figures, in the third quarter 2025, net sales were down 1.1%, explained by 2.2% lower average prices in Chilean pesos, partially compensated by 1.2% volume growth. Gross profit decreased 2.9%, and gross margin was down 79 basis points. In addition, consolidated SG&A expenses in Chilean pesos dropped 4.7% due to efficiencies and a favorable translation currency effect from Argentina. In all, EBITDA expanded 4.6%, and EBITDA margin expanded 60 basis points. For the first nine months of the year, and excluding the non-recurring gain from the sale of a portion of land in Chile in the second quarter 2024, consolidated EBITDA expanded 9.9%. In terms of our segments, in the Chile operating segment, top line expanded 1.8% as a result of a 2.4% increase in average prices, partially offset by 0.6% lower volumes. Higher average prices were explained by revenue management efforts in all the categories. This was offset by mixed effects between alcoholic and non-alcoholic categories. Volumes were below last year due to soft industries, mainly in alcoholic categories. Gross profit and gross margin expanded 3.6% and 75 basis points, respectively, due to lower cost pressures, cost pressures related to favorable prices in some raw materials, which compensated higher costs from our PET recycling plant, CirCCUlar. MSD&A expenses grew 3.2% below inflation in spite of higher marketing expenses, and as a percentage of net sales, increased by 46 basis points. Altogether, EBITDA increased 4.8%, and EBITDA margin expanded 41 basis points. Isolating costs and expenses associated to CirCCUlar, EBITDA would have expanded 10.2% and EBITDA margin by 117 basis points. In international business operating segment, volumes posted a 5.3% expansion, although net sales contracted 8.9%, driven by 13.5% lower average prices in Chilean pesos. The decline in average prices in Chilean pesos was mainly due to the 42.2% devaluation of the Argentine peso against the U.S. dollar, and a very challenging pricing scenario in Argentina, where prices grew below inflation and negative mix effects within the beer category. The volume expansion, excluding AV, the recent acquisition in Paraguay, was mainly explained by Argentina, fully driven by the water category, while beer volumes contracted in line with the industry. Regarding our other operations, Bolivia and Paraguay posted higher volumes and Uruguay contracted low single digits. Gross profit decreased 16.6% and gross margin contracted 382 basis points. MSD&A expenses were down 19.2% and spread on net sales decreased 552 basis points. In all, EBITDA grew 73.1%, driven by all geographies in this international segment. The wine operating segment posted a top-line expansion of 1.6%, mainly driven by a 4.8% rise in average prices, while volumes were 3% lower. The higher average prices were mostly explained by a weaker Chilean peso and favorable impact on export revenues and revenue management initiatives in domestic markets. Volumes contracted due to a 6.3% decrease in Chile's domestic market, in line with the industry, partially offset by 4.5% growth in exports. Gross profit decreased 1.6% and gross margin deteriorated by 128 basis points due to cost pressures from a higher cost of wine and higher U.S. dollar-linked packaging costs. MSD&A expenses rose 4.5% and, as a percent of net sales, increased 78 basis points due to higher marketing expenses. Altogether, EBITDA decreased 12% and EBITDA margin was down 224 basis points. Finally, regarding our main joint venture and associated business in Colombia, we delivered low double-digit volume growth, outperforming the industry. We continue to build a robust brand portfolio and sales execution, which is the path to the long-term volume and financial growth. Now, I will be glad to answer any question you may have. Thank you very much. We'll now move to the Q&A part of the call. If you'd like to ask a question, please press star two on your phone. That is star two from the phone, and if you're connected from the web, you can type your question in the box provided or request to ask a voice question. We'll give it a few moments for the questions to come in. Just a reminder, it's star two if you're connected from the phone, and if you're connected from the web you can also send a text or voice question. Okay, our first question is from Constanza González from Quest Capital. Your line is now open. Please go ahead. Hello, Felipe and the rest of the team. Thank you for taking my question. I had a question regarding the international segment, specifically in Argentina. Are you expecting a recovery in prices for the fourth quarter of this year? What are you expecting for 2026? Are you expecting a recovery in prices and volumes? Secondly, could you tell us more about the environment that you are seeing in consumption in that country? Thank you. Okay. Good morning, Constanza, and practically good afternoon here in Chile. Thank you for your question regarding Argentina. In the second semester, we are facing a much more challenging scenario in Argentina, with, let's say, decline, especially in the first quarter of the volumes, especially in beer. While the water business is growing nicely, let's say. The point of that, as you indicated, is, that is, with prices that are below inflation. In fact, we are practically 9% below inflation this year- to- date. We have increased prices on our side, but the scenario is competitive. The market share are rather stable, but we expect in the near future, because everybody needs to recover profitability, price increases, all right? That's key in order to recover the profitability of the business. Regarding volumes, let's say, we have maybe a more stable scenario in Argentina after the elections, where the government is expected to, let's say, to decrease the uncertainty and its financial issues, regarding especially the U.S. dollar. On the other hand, it is expected to do some reforms in this new Congress. Regarding the near future, we expect an increase in private consumption, but more than that, in this increase in private consumption that's expected to be next year, 3%, it would be different among different consumption categories. Maybe as you know, many Argentinians changed their car at the beginning of the year. They have had some records in car sales. Normal people that I'm considering myself normal, I do not change the car every year. It's a very bad business. Maybe some of these resources from the consumers would come back to our categories, especially categories that are more linked to have fun as the beer. Responsible fun. Responsible consumption of beer, and to regain momentum in the industry in the near future. Along with, we hope, recovery of the overall economy. We have had a bad third quarter, however, we expect recovery next year, I would say. Also more price adjustments to be at least in the near future in line with inflation. Thank you, Felipe, for your answer. Thank you. Our next question is from Thiago Bortoluci from Goldman Sachs. Your line is now open. Please go ahead. Yes, thank you very much. Hola, Felipe. Good morning, everyone. Thank you very much for taking our questions. Always a pleasure to talk to you guys. I would like to turn the conversation back to Chile, right? Obviously, there are different dynamics playing out there, but what I see from the consolidated numbers is your pricing growth moderating, actually printing even a little bit below inflation, while, I wouldn't call it for a material decline in volumes, but volumes is likely down, meaning, you know, probably, these efforts to be less aggressive on pricing, let's say, are not necessarily resulting in a stronger demand. Could you please elaborate more, how you're seeing, you know, pricing versus volume growth versus competition market share across the different categories, soft drinks, and beer for, please? More importantly than that, how much space you see for eventually more pricing to be implemented in each one of those going forward? Thank you very much. Thank you, Thiago. Good to hear about you. Thank you for your question regarding Chile. Let me make very clear on price because I saw your report and then your commentary now. Price, in general, per category are in line with inflation or above inflation. The thing that you are seeing is the entire segment, Chile, that is showing a price of 2.7%, 2.4% quarter-on-quarter, but because there is a big mixed effect between alcoholic categories and non-alcoholic categories. As the industry in alcoholic categories is declining, I have a negative mixed effect in price. Excluding that mixed effect, prices are increasing 4%, which is above inflation. I need to make this precision because I read your report. The competitive dynamic, I would say, is very competitive in Chile, as you know. In terms of market share in the overall beverage industry, I would say we gained slightly share compared to previous quarter and quarter-on-quarter, compared to same quarter last year, also we gained some share. In both alcoholic and non-alcoholic categories, because now we're seeing the market for alcoholic and non-alcoholic, especially when you have industries that are declining and there are shifts between industries. I would say it's a very competitive, but thanks to our brand equity, our revenue management strategies, our execution, while we have increased prices in alcoholic and non-alcoholic categories, we have been able even to slightly gain share. The point regarding going forward and price, always we have an aim of optimizing our revenue management in all the categories. Of course, to regain, you know, profitability. Of course, there is competition. Alcoholic categories, especially wine, but also beer. The industries are very soft and declining. The one that is declining the most is wine. But beer is also declining in the third quarter of the industry. The only one that is growing low single-digit in alcoholic is spirits, thanks to the ready-to-drink where we lead innovation, we lead the market in this fast-growing category, which are the spirits ready-to-drink. Also, we have, you know, low alcohol or non-alcohol beer and all the shandies and flavored beer such as, for example, the Lemon Stones brand in Chile where we led the market and it's also grown. Innovation is key in this scenario. Okay. That's the answer, Thiago. That's helpful, Felipe. Thank you very much. If I may follow up in Chile, right? Obviously, I know this is a harder answer, but would love to pick our brains on that. I guess across the world we are seeing, in general, declining volumes in beer, right? 2025 has been an atypical year. In some regions you have adverse weather. You have obviously volatile macro, particularly across South America. What's your assessment of this weakness in beer, particularly for Chile? Would you say something more temporary? Would you say there is a structural component related to the consumption occasions, new generations preferences? What is CCU doing itself to try to, you know, revert this trend? Thiago, it's not useful. I prefer to talk about alcoholic categories rather than specific, because we have different pictures in different segments, let's say. As I said in my previous answer, the one that the industry is declining the more is wine. This is a global trend, and it has been for many years, and also a Chilean trend in the last ten years. Wine, the per capita consumption in 2014 was 13.5 L per capita, and in 2024 it was 10.5. In the opposite of beer, in 2014 per capita consumption was 44 L per capita, and last year 54 L per capita. There is no single explanation. We carried out very scientific or very based on data and on quantitative and qualitative. What are the reasons? Maybe this year in 2025 we saw a further decline from where we were in 2021, or what we have experienced in previous year. There are a high numbers of factors that came from, and you pointed out correctly, is how much money has the consumer. The economy has not been brilliant in the last years in Chile, growing 2% on average or less than 2%. Huge adjustment, interest rates. Interest rates are declining now. The perspective of the Chilean economy should be better in the next two or three years. Copper prices are on the rise, thanks to the climate change and all of these. There are a number of projects that Chile will enhance GDP. We are positive about the economy in Chile in the near future. This, if we have this, maybe we will see a better perspective for overall categories, not only alcoholic, but also non-alcoholic categories. There are other reasons that are linked to alcohol consumption. One example is insecurity. People feel very insecure in Chile than it was 10 years ago. You know, the sense of going out to on-premise, having a beer or having a cup of wine, and let's say, the on-premise was in Chile 10% and nowadays is 5%-6%. This is linked to insecurity. All presidential candidates, in 10 days there will be presidential elections in Chile. The number one priority is on security. When you ask the consumer, "Why you are not consuming so much alcohol? Or, why are you not going out and having, as you said in Brazil, a chopp or, you know, a beer with friends?" "No, because I feel insecure to go in the night, so I prefer to stay home and not meet my friends." There are many reasons, yeah. But with inaudible, because we have studied other realities such as the U.S. market. The U.S. market is declining a lot in beer consumption. However, there have been some periods of history where we have seen rebounds in consumption in a specific category. The category that is performing very well because it has, it's linked to trends, is the ready to drink category. In spirits, but also, you know, variants of beer where you have flavor, you have low alcohol content, beers that are more seasonal. Innovation is key because we led the categories, especially in Chile, the alcoholic category. Innovation is key to, let's say, and it's a key pillar of our strategic plan to overcome the situation, let's say. Those are all fair points, Felipe. Thank you very much, you were helpful. Thank you very much. Thank you. Our next question is from Fernando Olvera from Bank of America. Your line is now open. Please go ahead. Hi. Thank you. Can you hear me? Yes, we can hear you. Great, perfect. Thank you for taking my question. The first one is related to costs. If you can comment, Felipe, regarding the outlook on costs for the fourth quarter or and 2026, would be great. My second question is related to CapEx, also for next year. I mean, considering the soft demand that we are seeing overall in alcoholic beverages, what is your initial thoughts on CapEx for 2026? Thank you. Hello, Fernando. I think it's good morning for you. You're in Mexico, I think. So Thank you. Yes. It's in the morning. Here it's already afternoon. Fernando, yeah, good question about the cost and commodities. You know, I will give you a medium term, let's say 2026, as per our cautionary statement, I don't do forecasts. Yeah. What we are seeing, we are doing the budget right now, we are seeing favorable news in practically all the commodities except aluminum. Compared to 2025 and also compared to 2024. Not yet at the level of prices of commodities that we had pre-pandemic, 2019. We are seeing better news in barley, sugar, virgin PET resins, pulps. That was a big hit, especially orange juice, in the next two years. We are seeing materially better commodity prices with the exception of aluminum. We are talking about, and it's easy, a projection about $10 million of better commodity price, priced in U.S. dollar. As I said, my number one commodity is the U.S. dollar. It seems stable in Chile, at least. Chile, which accounts for 70% of the EBITDA, exchange rate seems stable going forward. Along with a lot of initiatives in terms of efficiencies in Chile, that are linked to procurement, let's say, strategic sourcing. Also, design to value. We always see at our packaging or our formulations in order without affecting at all quality, however, doing in a more valuable or more cost effective way to deliver the same benefits to the consumer. The consumer is first, however, we always look and we work on new material, new specification to reduce costs. Third, is what we call nearshoring. That is to have closer production of our raw materials and packaging materials to our breweries or factories, let's say. To decrease logistics costs. That side, also we have a strong efficiency program. We saw a better scenario with the exception of aluminum for next year. That is increasing practically in our projection 5%. On the other hand, and we have highlighted this year we have had higher cost and expenses as linked to the CirCCUlar. CirCCUlar is about introducing recycled packaging in our PET bottles up to 15%. So far, this has had a significant impact in our EBITDA, about CLP 10 billion, roughly $12 million of extra cost and expenses year-to-date. You know, on a yearly basis, this year would cost us something like CLP 15 billion. Overall, the aluminum is increasing, but all the rest is in better shape. We have efficiencies, so we expect a better scenario for raw materials and packaging materials going forward. That's. No, that's a great insight. Yeah. What about CapEx, Felipe? CapEx, I will hand over this question to my colleague, Mr. Joaquín Trejo, Financial Planning Manager. Thanks, Felipe, and thank you Fernando for your question. Regarding CapEx, we actually estimate to close the year slightly below what we published in our annual report, between 10% and 15% below the published figure for 2025. Looking ahead, we don't actually see major CapEx needs for capacity as the volume trend is what Felipe mentioned earlier, but rather focusing on technology. We are changing our IT system for sales and distribution, and also innovation to address these new consumer trends, as Felipe also mentioned in previous questions, and also regulatory requirements. The ratio we like to look at is the CapEx over sales, and we forecast it to be below 6%, going forward. This is why the CapEx over depreciation ratio should be at some point below one going forward, where the new projects are actually a smaller amount compared to previous years, where we had, for example, the CapEx for the CirCCUlar plant. This is also offset by some CapEx carryover from 2025 that is going to be transferred to 2026. In general terms, Fernando, that's the trend we foresee. Great. Thank you so much. Thank you. Just a reminder, if you'd like to ask a question, it's star two on your phone. Star two from the phone. If you're connected from the web, you can send a text or ask a voice question. Our next question is from Claudia Raggio from Provida AFP. Thank you for the presentation. Could you give us some color on the sales volumes of beer in Argentina on October? I would anticipate that we have had in both, alcoholic and non-alcoholic, we saw decline also in October. We have maintained in alcoholic the same trend we have in quarter three. In water, particularly flat, small decline in water business. Thank you. We'll give it a few more moments for any further questions to come in. Okay, looks like we have no further questions. I'll now hand it back to the CCU team for the closing remarks. Thank you all for attending today. In summary, in the third quarter of 2025, our main operating segment in Chile continued in a trend of high financial results and profitability in a context of soft industries and higher costs from CirCCUlar. The latter was boosted by gross margin improvements, efficiencies, and lower prices in raw materials. The international business operating segment posted higher EBITDA, although results were negatively affected by a challenging scenario in Argentina due to a sharp deceleration in consumption. The wine operating segment contracted EBITDA due to a higher cost of wine and weak scenario in domestic market, while export volume significantly. We will keep executing our 2025/2027 strategy, strategic plan and its three pillars, profitability, growth, enhancing innovation, and sustainability. With a special focus on profitability, supported by both revenue management efforts backed by our strong and diversified portfolio of brands and efficiencies across all operating segments and functions. Thank you very, very much for attending today, and I wish you a wonderful end of day. That concludes the call for today. Thank you and have a nice day.