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| Statement |
|---|
| While prices were driven by revenue management initiatives, EBITDA increased 20.9% and EBITDA margin improved and expanded from 14.2% to 17.5% |
| Our consolidated EBITDA in the year grew 6% and the EBITDA margin improved 159 basis points, driven by our main operating segment, Chile, which expanded EBITDA by 24.8% more than offsetting a 37.4% drop in the Wine Operating segment and a 16% contraction in International Business Operating segment, which includes Argentina |
| The driver for the better operational result was the execution of our regional plan HerCCUles, which encompasses six pillars: Number one, maintain business scale; number two, strengthen revenue management efforts; number three, deliver efficiency gains through our transformation program; number four, optimizing CapEx and working capital; number five, focusing on core brands and high-volume margin innovations; and number six, continue investing in our brand equity |
| But the idea is not reducing all the time you do tacking the tailing, let's say, SKU reduction, but the incentive of that is to really if we need to launch something when innovation should be relevant, should be – should have better margins, should improve the brand equity of the category of the portfolio, improve brand equity, deliver higher margins and also improved volumes |
| January has started in good shape with low-single digit growth because we have a more normalized weather |
| Also Sparkling Wine is doing very well |
| So what we are working in order to make it more profitable and to sustain the scale, even growing in some markets is through improving our execution |
| In Argentina, our water business recorded mid-single digit growth in volumes, despite the complex economic environment, explained by the strength of the brands and a successful route-to-market integration of this business into our operations |
| Finally, I would like to thank all our employees, given their hard work and commitment with CCU, we have been able to navigate challenging years |
| Regarding pillar number three, we were able to deliver efficiency during the year, as total expenses, including manufacturing cost of MSD&A as a percentage of net sales were stable at 47.7% in 2020 through [ph] 2022 and 2023 |
| and in the UK so with these three, let’s say, new endeavors, we think we would significantly improve the execution in those markets Felipe Ucros That’s very clear |
| But at least relative scale we are maintaining thanks to this because we – our portfolio ended up as getting in a very strong way, let's say |
| Now, what I would say, we are seeing some green, let’s say, green grass of some embryonari [ph] good signals in terms that we expect at least in the first quarter to have some growth in terms of the exports volume |
| From a quarterly perspective, consolidated EBITDA dropped 9.9% and EBITDA margin was up from 16% to 19.3% |
| During 2023, we posted a recovery in our operating results and profitability in spite of the volatile business environment, a particularly difficult year for the wine export business and Argentina’s macroeconomic conditions |
| Excluding these effects, consolidated EBITDA in the quarter would have expanded 3.4% versus same quarter of last year |
| Finally, in line with pillar number five and pillar number six, we reduced the number of SKUs following us to focus in core brands and profitable innovation, reducing the complexity of our operations, and we posted solid levels of running [ph] |
| We will continue working united to sustain a path of profitable and sustainable growth |
| Nonetheless, we expect to be able to continue on the recovery path of our financial results and profitability |
| As for pillar number two, we executed revenue management initiatives in all our geographies, especially noticeable in Chile, where average prices increased 7.9% being key to recover margins, offsetting cost and expense pressures and negative mix effects |
| We are innovating a lot especially in the domestic market in Chile through brand extensions, sweet wine in order to keep – to maintain the scale, especially in the domestic market |
| And improved mix also is a way to compensate this pressure in terms of the U.S |
| We have in fact reduced our inventory levels, let's say, to work with less safety in terms of reacting, of course maintaining flexibility towards the market, but in a more efficient way |
| Nonetheless, we maintained relative scale by keeping increasing market shares in our main categories |
| Volumes contracted 8.3%, fully explained by Argentina as all the other geographies posted positive volume growth |
| So it should be a combination of tools, let's say, revenue management, efficiencies, cost and expense control so it's something in order to have stable margins, let's say |
| Great |
| Great |
| Great |
| And this, we need to enhance our revenue management efforts, enhance our efficiency efforts also to speed up some projects that we have in terms of efficiencies |
| Statement |
|---|
| Lower volumes were mostly related to a weakening demand, which was especially affected by weather conditions |
| In terms of pillar number one, consolidated volumes in 2023 were 3.4% below last year, mainly driven by lower consumption in Argentina for the year, a tough scenario for Chilean wine export and a deceleration in volumes in Chile during the second semester |
| In terms of the segment, in the key operating segment, top-line decreased 2.2% in the last quarter due to a 7.3% contraction in volumes, partially compensated with 5.5% higher average prices |
| In the Wine Operating segment, revenues were down 11.7%, mainly explained by an 8.8% decrease in volumes driven by a 10.2% decrease in the Chile domestic market and a 5.6% contraction in exports from Chile |
| Of course, we have some internal algorithms, but is the predict how much? So I think there is a weaker demand itself in the consumer |
| Of course, we suffered a terrible 2023 in the wine export industry not only in Chile, but also Argentina, I saw some numbers yesterday, some numbers yesterday of decrease of Australia exports, Chile exports |
| In International Operating segment, which includes Argentina, Bolivia, Paraguay and Uruguay, net sales dropped 90%, mainly as a result of a contraction of 89.4% in average prices in Chilean pesos due to the impact of hyperinflation accounting stated above as prices in local currency evolves in line with inflation |
| We have had two bad quarters, quarter three and four in terms of not good weather conditions for selling refrigerated drinks, let's say |
| We know that the environment in the region will continue to be challenging, especially in Argentina |
| It’s an industry problem |
| Regarding our main JV and associated business from a yearly perspective, in Colombia volumes contracted low-single digit in 2023, in a scenario of weaker consumption |
| Partially offset by revenue management initiatives in our domestic markets, EBITDA decreased 21.3% [ph] |
| And we are experiencing industry contraction of, let's say, high single digit, let's say during January for the time being |
| Of course we would like to maintain business scale, but it would be difficult given the macro environment |
| This generated a loss in the quarter CLP24,018 million in consolidated EBITDA, of which CLP22,804 million are accounted in International Business Operating segment and CLP1,250 million are accounted in the Wine Operating segment |
| dollar, which impacted negatively our export revenues |
| But certainly, as I mentioned in previous conference call without giving you future forecast, because it's difficult on that, because there are several factor risk and uncertainties |
| Volumes have been falling for the larger part of the last few years |
| How much the weather would influence on this decrease in volume would be difficult |
| But strategically speaking, it’s the segment that seems more challenged in the long term |
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