CCU

Business Context and Reporting Period

Company: Compañía Cervecerías Unidas S.A. (United Breweries Company, Inc.)
Filing Type: Form 6-K (Report of Foreign Issuer)
Reporting Period: Second Quarter (2Q) and Year-to-Date (YTD) ended June 30, 2026.
Operations: Multi-category beverage company operating in Chile, Argentina, Bolivia, Colombia, Paraguay, and Uruguay. Key segments include Chile, International Business, and Wine.

Key Financial Metrics (2Q26 vs. 2Q25)

Liquidity and Debt (as of June 30, 2026):

• Cash and Cash Equivalents: CLP 346,974 million (down from CLP 519,176 million at Dec 31, 2025).
• Total Financial Debt: CLP 1,290,194 million.
• Net Financial Debt: CLP 943,220 million.
• Liquidity Ratio: 1.84.
• Net Financial Debt / EBITDA: 2.43x.

Material Changes vs. Prior Period

Revenue and Volume Dynamics:

• Consolidated Volumes: Decreased 1.5% to 7,059 ThHL.
• Price Mix: Net sales grew 4.8% driven by a 6.4% increase in average prices (CLP), offsetting volume declines.
• Segment Performance:
  • Chile: Volumes +2.5%; Net Sales +1.5%. Strong performance in non-alcoholic categories and flavored low-alcohol RTD products.
  • International Business: Volumes -7.4%; Net Sales +15.7%. Driven by price increases in Argentina (inflation-linked) despite volume contraction in beer/water and operational disruptions in Bolivia.
  • Wine: Volumes -13.7%; Net Sales -14.1%. Impacted by global demand contraction and higher wine costs.

Profitability Drivers:

• EBITDA: Expanded 59.4% primarily due to the Chile segment (+26.2%) and reduced losses in International Business (-25.8% loss). The Wine segment EBITDA contracted 61.9%.
• Net Income: Loss widened to CLP 20,712 million. This was driven by non-operating items, specifically a CLP 6,068 million impairment loss related to Bolivia and lower income tax benefits compared to a non-recurring positive tax effect in Argentina in 2Q25.

Guidance, Outlook, and Management Commentary

Strategic Direction:
Management introduced the "Vamos por Más" strategy focused on four pillars: (i) increased business focus, (ii) operational synergies, (iii) greater agility, and (iv) accelerated transformation. Organizational changes are being implemented gradually to ensure continuity.

Segment Outlook:

• Chile: Maintaining market share with growth in non-alcoholic and flavored low-alcohol RTD products (8.3% of total alcohol volume).
• International: Facing a soft consumption environment in Argentina and social unrest in Bolivia. Restructuring expenses of CLP 1,408 million incurred in Argentina.
• Wine: Navigating difficult global trends with a focus on high-margin innovation (e.g., single-serve cans) and efficiency. Restructuring expenses of CLP 1,633 million incurred.

Risks and Contingencies:

• Geopolitical/Operational: Social unrest and roadblocks in Bolivia disrupting operations.
• Market: Global contraction in wine demand and soft consumption in Argentina.
• Financial: Inflation impacts on liabilities (IAS 29 adjustments) and foreign exchange fluctuations.

Unusual Items:

• Impairment: Non-recurrent impairment loss of CLP 6,068 million related to Bolivia.
• Acquisition: Acquired remaining 49.9% equity interest in Aguas CCU-Nestlé Chile S.A., reaching 100% ownership.

Investor Verification Checklist

• Impairment Details: Verify the specific assets and valuation methodology behind the CLP 6,068 million Bolivia impairment loss (Note 18).
• Argentina Tax Effects: Confirm the nature of the non-recurring positive tax effect in 2Q25 that is no longer present, impacting year-over-year net income comparison.
• Bolivia Operations: Assess the duration and financial impact of social unrest and roadblocks on the International Business segment.
• Wine Segment Turnaround: Evaluate the success of high-margin innovation strategies (e.g., "Gato Selección Dulce" cans) in offsetting volume declines.
• Cash Flow Sustainability: Review the significant decrease in cash and cash equivalents (from CLP 519B to CLP 347B) and the impact of investing outflows (CLP 258B YTD) on liquidity.