Compañía Cervecerías Unidas S.A. (NYSE:CCU) Q3 2022 Earnings Conference Call November 9, 2022 10:00 AM ET

Company Participants

Claudio Las Heras – Head-Investor Relations

Felipe Dubernet – Chief Financial Officer

Conference Call Participants

Henrique Brustolin – BTG

Carlos Laboy – HSBC

Thiago Bortoluci – Goldman Sachs

Felipe Ucros – Scotiabank

Operator

Good day, and welcome to the CCU's 3Q 2022 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Claudio Las Heras, Head of Investor Relations. Please go ahead, sir.

Claudio Las Heras

Welcome, everyone, and thank you for attending CCU's third quarter 2022 conference call. Today with me are Mr. Felipe Dubernet, Chief Financial Officer; and Mr. Carlos Anwandter, Financial Planning and Investor Relations Manager. You have received a copy of the company's consolidated third quarter 2022 results. Felipe will now review our overall performance and then we will move on to our Q&A session.

Before we begin, please take note of our cautionary statement. Statements made in this call that relate to CCU's future performance or financial results are forward-looking statements, which involve known and unknown risks and uncertainties that could cause actual performance or results to materially differ. This statement should be taken in conjunction with the additional information about risks 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 Mr. Felipe Dubernet.

Felipe Dubernet

Thank you, Claudio, and thank you all for joining us today. In the third quarter of 2022, we continue to face an adverse macroeconomic scenario, which negatively impacted our financial results, particularly in Chile where we also have a challenging comparison base against 2021. In terms of financial results, EBITDA contracted 33.4%, the later fully explained by the contraction in the Chile operating segment, while the international business and wine operating segments improved the financial results. EBITDA margin decreased from 16.3% to 9.9%, indicating that our revenue management efforts and efficiencies have not been enough to offset three main external effects. First, the depreciation of our main local currency against the U.S. dollar, impacting our U.S. dollar denominated costs. Second, higher raw and packaging material costs; and third, other costs expenses and pressures associated with an accelerating inflation in our main geographies.