CCU's Q4 is very difficult to read due to distortions from Argentina's inflationary accounting. Reported revenues surged over 60%, but organic sales volumes were flat, an oxymoron in almost anyLong-only investment, evaluating companies from an operational, buy-and-hold perspective.Quipus Capital does not focus on market-driven dynamics and future price action. Instead, our articles focus on operational aspects, understanding the long-term earnings power of companies, the competitive dynamics of the industri ...

Compañía Cervecerías Unidas S.A. (NYSE:CCU) Q4 2024 Earnings Conference Call February 26, 2025 10:00 AM ET Company Participants Claudio Las Heras - Head, Investor Relations Felipe Dubernet - Chief Financial Officer Conference Call Participants Fernando Olvera - Bank of America Ewald Stark - BICE Inversiones Fernando Olvera - Bank of America Constanza Gonzalez - Quest Capital Alvaro Garcia - BTG Pactual Francisca Taverne - LarrainVial Operator Good day, everyone. Welcome to CCU's Fourth Quarter 2024 Earnings ...

Industry Overview - The Zacks Beverages – Alcohol industry is facing rising costs due to inflationary pressures on labor, transportation, and raw materials, which are straining margins and profitability [1][7][8] - Newly imposed tariffs by President Donald Trump are expected to disrupt the U.S. beverage alcohol market, increasing prices for imported brands and potentially reducing consumer demand [2][10][11] Market Trends - Despite challenges, the alcohol industry is experiencing strong growth driven by premiumization, with consumers seeking distinctive, high-quality beverages [3][12] - Trending segments include ready-to-drink (RTD) spirits, canned wine and cocktails, hard seltzers, cider, and flavored malt beverages, reshaping the market [3][13] Company Strategies - Key players like Molson Coors, The Boston Beer Company Inc., and Compañía Cervecerías Unidas are prioritizing innovation and product development to align with shifting consumer preferences [4][12] - Companies are making strategic investments in premiumization, technology, and product innovation to position themselves for sustained growth [4] Company Performance - Molson Coors has seen a 13% decline in stock over the past year but is focused on a revitalization plan aimed at sustainable growth through innovation and premiumization [20][21] - The Boston Beer Company has experienced a 35.9% decline in stock over the past year, with a focus on revitalizing its brands and expanding its Beyond Beer segment [22][23] - Compañía Cervecerías Unidas has risen 9.4% in the past year, with a strong portfolio and a consensus estimate suggesting growth of 6.4% in sales and 12.3% in earnings for 2025 [24][25] Industry Performance Metrics - The Zacks Beverages – Alcohol industry has underperformed the broader sector and the S&P 500, with a collective decline of 26.8% over the past year compared to a 22.3% increase in the S&P 500 [17] - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 13.89X, significantly lower than the S&P 500's 22.52X [18]

Players in the Zacks Beverages – Alcohol industry are grappling with rising costs, driven by inflationary pressures on labor, transportation and raw materials. Higher ingredient prices, shipping expenses and packaging costs have strained margins, while increased spending on advertising, promotions and operations challenges profitability. These cost pressures are expected to persist in the near term. Meanwhile, the newly imposed tariffs by President Donald Trump are set to disrupt the U.S. beverage alcohol m ...

Financial Data and Key Metrics Changes - In Q2 2024, the company's revenues contracted by 8.6%, primarily due to a 12.7% drop in volumes, partially offset by a 4.6% increase in average prices in Chilean pesos [6][7] - Gross profit decreased by 15.8%, and the gross margin as a percentage of net sales deteriorated by 338 basis points due to higher cost pressures from currency depreciation [7] - EBITDA reached CLP10,053 million, representing a 78.7% decrease, with an EBITDA margin contraction of 629 basis points [7][8] - Net income reported a loss of CLP15,888 million, excluding a non-recurring gain from land sale, which would have resulted in a gain of CLP5,040 million if included [7][8] Business Line Data and Key Metrics Changes - In the Chile Operating segment, net sales contracted by 5.5%, driven by an 8.4% volume drop, partially offset by a 3.1% growth in average prices [8] - The International Business Operating segment saw a 22.1% drop in net sales, with a 27.2% reduction in volumes, partially offset by a 7% rise in average prices [9] - The Wine Operating segment experienced a revenue increase of 12%, driven by an 11.9% rise in average prices, with export volumes expanding by 9.1% [10] Market Data and Key Metrics Changes - The Chilean peso and Argentine peso depreciated by 16.8% and 255.1% against the U.S. dollar, respectively, increasing U.S. dollar-denominated costs [6] - Despite the challenging economic environment, the company maintained overall market share in both Chile and Argentina [6] Company Strategy and Development Direction - The company is focusing on revenue management and cost control measures under the HerCCUles plan to return to profitability [6][7] - Management emphasized the importance of a multi-category beverage strategy to leverage synergies and improve financial performance [48] Management Comments on Operating Environment and Future Outlook - Management noted that the second quarter was heavily impacted by adverse weather conditions and a challenging economic context in Chile and Argentina [5][6] - Looking ahead, management expressed cautious optimism for volume recovery in July and anticipated a gradual improvement in the second half of 2024 [14][38] Other Important Information - The company does not expect to have any non-recurring asset sales similar to the land sale in the second half of the year [40] - Management confirmed that they do not hedge raw materials due to the unpredictability of commodity prices [42] Q&A Session Summary Question: Impact of weather on volume performance - Management acknowledged that weather significantly affected beer volumes, with extreme conditions in May and June leading to a notable decline [12][14] Question: Competitors' pricing actions - Management indicated that competitors are facing similar cost pressures and are likely to follow price increases to recover margins [16][18] Question: Transition from Coke distribution in Argentina - Management reported a smooth transition to their own distribution system, which has resulted in positive financial outcomes [20][21] Question: Volume and pricing expectations in Argentina - Management expressed uncertainty about volume recovery but anticipated a gradual improvement towards the end of 2024 [38] Question: Cost outlook for the remainder of the year - Management noted that while some raw material costs have softened, the overall outlook remains volatile due to currency fluctuations [34][35] Question: Measures to recover margins - Management highlighted cost control, revenue management initiatives, and efficiency improvements as key strategies to enhance profitability [36][37]

We estimate that our weighted volume market share for the Chile Operating segment was approximately 46.2%, 45.2% and 45.0% in 2021, 2022 and 2023, respectively. The calculation of the weighted average for past periods includes markets and industries that CCU entered at a later date. Weighted volume market share includes all categories in which CCU participates in the Chilean domestic market, excluding HOD, powder drinks and energy drinks, according to Nielsen figures. We produce and sell alcoholic and non-a ...

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics an ...

Investors with an interest in Beverages - Alcohol stocks have likely encountered both Cervecerias Unidas (CCU) and Boston Beer (SAM) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highligh ...

Compañía Cervecerías Unidas S.A. (NYSE:CCU) Q4 2023 Earnings Conference Call February 28, 2024 11:00 AM ET Company Participants Claudio Las Heras – Head-Investor Relations Felipe Dubernet – Chief Financial Officer Conference Call Participants Felipe Ucros – Scotiabank Fernando Olvera – Bank of America Ulises Bolio – J.P. Morgan Operator Ladies and gentlemen, good day, and welcome to CCU’s Fourth Quarter 2023 Earnings Conference Call on the 28th of February. Today’s conference call is being recorded. At this ...

Price-to-book ratio or P/B ratio is essentially the ratio of stock price to book value, i.e., how much an investor needs to pay for each dollar of book value of a stock. It is calculated by dividing the current closing price of the stock by the book value per share.In value investing, it is a common practice to pick stocks that are cheap but fundamentally strong. There are a number of investment styles for finding great stocks at attractive values.While considering valuation metrics, though price-to-earning ...