We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Name | Symbol | Market | Type |
---|---|---|---|
Compania Cervecerias Unidas SA | NYSE:CCU | NYSE | Depository Receipt |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.17 | -1.51% | 11.08 | 11.34 | 11.06 | 11.25 | 104,889 | 21:00:08 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
COMPAÑÍA CERVECERÍAS UNIDAS S.A.
(Exact name of Registrant as specified in its charter)
UNITED BREWERIES COMPANY, INC.
(Translation of Registrant’s name into English)
Republic of Chile
(Jurisdiction of incorporation or organization)
Vitacura 2670, 23
rd
floor, Santiago, Chile
(Address of principal executive offices)
_________________________________________
Securities registered or to be registered pursuant to section 12(b) of the Act.
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F ___
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ___ No X
CCU REPORTS CONSOLIDATED FOURTH QUARTER 2018 RESULTS 1 ,2
Santiago, Chile, February 27, 2019 – CCU announced today its consolidated financial and operating results for the fourth quarter 2018, which ended December 31, 2018:
· Consolidated Volumes increased 11.9%. Volume variation per Operating segment was as follows:
o Chile 9.2%
o International Business 19.7%.
o Wine 1.7%
· Net sales increased 7.9%.
· EBITDA reached CLP 114,612 million, a 2.5% decrease. EBITDA variation per Operating segment was as follows:
o Chile 1.4%
o International Business (13.3)%
o Wine 92.1%
· Net income reached CLP 62,698 million, a 13.1% increase.
· Earnings per share reached CLP 169.7 per share.
Key figures |
|
4Q18 |
4Q17 |
Total
|
|
YTD18 |
YTD17 |
Total
|
(In ThHL or CLP million unless stated otherwise) |
||||||||
Volumes |
|
8,648 |
7,731 |
11.9 |
|
28,530 |
26,020 |
9.6 |
Net sales |
550,601 |
510,120 |
7.9 |
1,783,282 |
1,698,361 |
5.0 |
||
Gross profit |
281,963 |
277,051 |
1.8 |
923,271 |
899,622 |
2.6 |
||
EBIT |
87,250 |
90,193 |
(3.3) |
468,722 |
234,894 |
99.5 |
||
EBITDA |
114,612 |
117,562 |
(2.5) |
562,011 |
327,094 |
71.8 |
||
Net income |
62,698 |
55,443 |
13.1 |
306,891 |
129,607 |
136.8 |
||
Earnings per share (CLP) |
|
169.7 |
150.0 |
13.1 |
|
830.6 |
350.8 |
136.8 |
1 For an explanation of the terms used in this report, please refer to the Glossary in Additional Information and Exhibits. Figures in tables and exhibits have been rounded and may not add up exactly to the total shown.
2 All growth or variation references in this Earnings Release refer to 4Q18 compared to 4Q17, unless otherwise stated.
COMMENTS FROM THE CEO |
This year CCU delivered a solid performance, with consolidated volumes that increased 9.6%, to 28.5 million hectoliters, while EBITDA grew by 71.8% to CLP 562,011 million and Net income rose 136.8% to CLP 306,891 million. These results include growth from both ongoing operations, as well as a gain of CLP 208,842 million in EBITDA and CLP 157,359 million in Net income from the CCU Argentina and Anheuser-Busch InBev S.A./N.V. (ABI) transaction (the “Transaction”) executed this year. The application of Hyperinflation Accounting in Argentina favorably impacted EBITDA by CLP 749 million and adversely affected Net income by CLP 6,087 million. Also this year, CCU Argentina opted in to a tax asset revaluation, which generated a CLP 6,822 million positive impact at Net income, including CLP 103 million in related operating expenses. Excluding the effects of the Transaction 1 , the application of Hyperinflation Accounting and the tax asset revaluation in Argentina, EBITDA increased by 7.8% to CLP 352,523 million and Net income, by 14.8% to CLP 148,797 million.
In the fourth quarter, volumes came in stronger than the annual trend, while financial results were weaker, with a consolidated EBITDA that declined 2.5% to CLP 114,612 million, despite volume growth of 11.9%. This financial result was largely explained by the sharp depreciation of our local currencies against the USD, primarily the CLP and ARS which depreciated 7.2% 2 and 119.0% 3 , respectively. These FX fluctuations had an adverse estimated effect of CLP 19,041 million on EBITDA. Excluding these currency variations, EBITDA would have increased by 13.7%.
At the Net income level, we grew 13.1% to CLP 62,698 million this quarter. Net income includes a loss of CLP 3,158 million from Hyperinflation Accounting in Argentina, as well as a CLP 1,732 million gain, mainly due to after tax Financial income related to the Transaction 4 , and a CLP 6,822 million gain from the tax asset revaluation in Argentina; excluding these effects, Net income reached CLP 57,303 million, an increase of 3.4%.
In the Chile Operating segment, our top-line rose 5.8%, driven by volumes that increased 9.2%, partially offset by 3.2% lower average prices, primarily explained by product mix and promotional activities. Gross margin decreased by 48 bps, primarily due to lower prices and higher USD-denominated costs from the weaker CLP. MSD&A expenses as a percentage of Net sales improved by 43 bps, primarily due to scale and efficiencies. As a result, EBITDA grew 1.4%, reaching CLP 85,825 million, and the EBITDA margin deteriorated by 113 bps, from 27.3% to 26.2%. Excluding the negative effect from the FX fluctuation, the segment’s EBITDA would have increased 8.0%.
The International Business Operating segment, which includes Argentina, Bolivia, Paraguay and Uruguay, reported volumes that rose 19.7%, with growth in all countries. Excluding Bolivia 5 , volumes grew 11.8%. Revenue increased by 10.5%, as volume growth was partially offset by lower average prices in CLP, due to the impact of the 99.4% 5 depreciation of the ARS against the CLP. Given that price increases in local currencies were not yet enough to offset FX pressures on USD-linked costs, gross margin contracted from 59.6% to 48.5%. Our MSD&A expenses as a percentage of Net sales improved 274 bps, thanks to efficiencies from the ExCCelencia CCU program and fixed expense dilution. All-in, EBITDA reached CLP 27,378 million, a decrease of 13.3%. EBITDA margin deteriorated by 436 bps, from 20.3% to 15.9%. Excluding the adverse effect of currency fluctuations, the segment’s EBITDA would have increased 33.8%.
The Wine Operating segment reported an 11.4% increase in revenue, explained by a 1.7% rise in volumes and a 9.5% higher average price in CLP. The higher average price was explained by an increase in prices in the domestic market and the positive tailwind on export revenues from the stronger USD against the CLP and ARS. The segment’s gross margin finally marked a turning point this quarter, with an improvement of 310 bps, from 35.3% to 38.4%, explained by the aforementioned higher average price, as well as a lower cost of wine in a portion of our sales, thanks to 2018 harvest yields which returned to historical average levels. MSD&A as a percentage of Net sales also improved this quarter, by 220 bps, explained by greater operating efficiencies. As a result, EBITDA reached CLP 10,514 million, an increase of 92.1%, and EBITDA margin improved by 800 bps, from 11.0% to 19.0%. Excluding the favorable impact from the stronger USD, the segment’s EBITDA would have increased 67.6%.
In Colombia, where we have a joint venture with Postobón, our volumes of our mainly imported premium beer portfolio grew 33.5%, surpassing 0.5 million hectoliters in 2018. In February 2019, we launched our local beer brand, Andina, which is well represented with its slogan “Colombia in a beer”, produced in our new, state-of-the art, three million hectoliter brewery, located in the outskirts of Bogota. Built to international standard specifications, the new plant will also soon begin producing the above mentioned beer portfolio, including Heineken, Miller Genuine Draft, Tecate and Sol, among others.
Looking back at 2018, we continued to consolidate our regional leadership as a multicategory beverage company. CCU delivered profitable and sustainable growth, and executed value-add transactions, while navigating Argentina’s macroeconomic headwinds and the adverse effects of Hyperinflation Accounting, as well meeting the day-to-day challenges of competing with global players in all of our markets. Looking ahead, we have put together a 2019-2021 Strategic Plan that continues to be based on our three Strategic Pillars: Growth, Profitability and Sustainability. Our plan has six strategic goals: 1) grow profitably in all our business units; 2) strengthen our brands; 3) continue to innovate; 4) execute our CCU ExCCelencia plan to capture additional efficiencies; 5) continue working towards the integral development of our employees; and 6) taking care of our planet through the development and implementation of our 2030 Environmental Vision.
1 See page 4 “Consolidated Income Statement Highlights – Full Year 2018”.
2 The CLP currency variation against the USD considers average of period (aop) compared to aop.
3 The ARS currency variation against the CLP or the USD considers 2018 end of period (eop) compared to 2017 aop.
4 See page 3 “Consolidated Income Statement Highlights – Fourth Quarter”.
5 CCU began to consolidate BBO as of August 9, 2018.
Page 2 of 13
CONSOLIDATED INCOME STATEMENT HIGHLIGHTS – FOURTH QUARTER (Exhibit 1 & 3) |
Page 3 of 13
CONSOLIDATED INCOME STATEMENT HIGHLIGHTS – FULL YEAR 2018 (Exhibit 2 & 4) |
Page 4 of 13
HIGHLIGHTS OPERATING SEGMENTS FOURTH QUARTER |
1. CHILE OPERATING SEGMENT |
In the Chile Operating segment, our top-line rose 5.8%, driven by volumes that increased 9.2%, partially offset by 3.2% lower average prices, primarily explained by product mix and promotional activities. Gross margin decreased by 48 bps, primarily due to lower prices and higher USD-denominated costs from the weaker CLP. MSD&A expenses as a percentage of Net sales improved by 43 bps, primarily due to scale and efficiencies. As a result, EBITDA grew 1.4%, reaching CLP 85,825 million, and the EBITDA margin deteriorated by 113 bps, from 27.3% to 26.2%. Excluding the negative effect from the FX fluctuation, the segment’s EBITDA would have increased 8.0%.
For the fourth year in a row, CCU organized the campaign 27 Toneladas de Amor CCU Teletón , which aims to, simultaneously, provide financial support to the Teletón (the annual Chilean charity for disabled children) and help our environment through recycling. This initiative consists in the collection of plastic bottles in 260 locations throughout the country. These bottles are then recycled and the proceeds from the sale of these materials are donated to the Teletón . This year the campaign collected and recycled 67 tons of bottles.
This year we continued to make important progress in our Environmental Vision 2020 plan, where we have already exceeded two of our three goals for the year 2020: we reduced our water consumption by 42.2% (the original target was 33%) and our greenhouse gas emissions by 24.4% (our goal was 20%). We also advanced towards our goal of 100% valorization of industrial waste, ending the year at 98.5%. During 2019, we will be setting the goals for our Environmental Vision 2030 plan.
As part of our electromobility plan, Transportes CCU began to operate the first 100% electric, high-tonnage truck in the country. With a capacity of up to 13 tons and a range of 280 kilometers, the heavy-load vehicle will be used to transport CCU’s products in Santiago. The goal is for electric vehicles to represent 50% of the fleet by 2030.
CCU entered the cider category with the launch of Cygan , a beverage made from green and red apples, with an alcohol content of 4.5° and 64 calories per 100 ml.
CCU launched Escudo Sin Filtrar , an unfiltered beer with strong character and aromas of malt and fresh hops, as well as Smooth Lager de Royal Guard , a refreshing and easy drinking beer based on Royal Guard’s original recipe. We also expanded our no sugar added carbonated soft drink offering with the launch of Pepsi Zero Limón .
2. INTERNATIONAL BUSINESS OPERATING SEGMENT |
The International Business Operating segment, which includes Argentina, Bolivia, Paraguay and Uruguay, reported volumes that rose 19.7%, with growth in all countries. Excluding Bolivia, volumes grew 11.8%. Revenue increased by 10.5%, as volume growth was partially offset by lower average prices in CLP, due to the impact of the 99.4% 4 depreciation of the ARS against the CLP. Given that price increases in local currencies were not yet enough to offset FX pressures on USD-linked costs, gross margin contracted from 59.6% to 48.5%. Our MSD&A expenses as a percentage of Net sales improved 274 bps, thanks to efficiencies from the ExCCelencia CCU program and fixed expense dilution. All-in, EBITDA reached CLP 27,378 million, a decrease of 13.3%. EBITDA margin deteriorated by 436 bps, from 20.3% to 15.9%. Excluding the adverse effect of currency fluctuations, the segment’s EBITDA would have increased 33.8%.
In Argentina, CCU continued to innovate in packaging with the launch of the 710 cc aluminum can for our brand Schneider and the 473 cc aluminum can for our national premium brand Imperial.
3. WINE OPERATING SEGMENT |
The Wine Operating segment reported an 11.4% increase in revenue, explained by a 1.7% rise in volumes and a 9.5% higher average price in CLP. The higher average price was explained by an increase in prices in the domestic market and the positive tailwind on export revenues from the stronger USD against the CLP and ARS. The segment’s gross margin finally marked a turning point this quarter, with an improvement of 310 bps, from 35.3% to 38.4%, explained by the aforementioned higher average price, as well as a lower cost of wine in a portion of our sales, thanks to 2018 harvest yields which returned to historical average levels. MSD&A as a percentage of Net sales also improved this quarter, by 220 bps, explained by greater operating efficiencies. As a result, EBITDA reached CLP 10,514 million, an increase of 92.1%, and EBITDA margin improved by 800 bps, from 11.0% to 19.0%. Excluding the favorable impact from the stronger USD, the segment’s EBITDA would have increased 67.6%.
In December 2018, Viña San Pedro Tarapacá S.A. (VSPT) signed an agreement to acquire part of Pernod Ricard’s wine business in Argentina. The purchase agreement, which is subject to local regulatory approval, includes the Argentine wine brands Graffigna, Colón and Santa Silvia, which represent roughly 1.5 million boxes of 9 liter wine bottles per year, as well as a winery in the San Juan province and two vineyards in Mendoza.
VSPT’s recently launched EPICA Sangría , our first premium sangria beverage in Chile, received the Product of the Year 2019 award, based on the results of an online consumer survey conducted by GfK Adimark.
Page 5 of 13
ADDITIONAL INFORMATION AND EXHIBITS |
ABOUT CCU
CCU is a multi-category beverage company with operations in Chile, Argentina, Bolivia, Colombia, Paraguay, Peru and Uruguay. CCU is one of the largest players in each one of the beverage categories in which it participates in Chile, including beer, soft drinks, mineral and bottled water, nectar, wine and pisco, among others. CCU is the second-largest brewer in Argentina and also participates in the cider, spirits and wine industries. In Uruguay and Paraguay, the Company is present in the beer, mineral and bottled water, soft drinks and nectar categories. In Bolivia, CCU participates in the beer, water, soft drinks and malt beverage categories. In Colombia, the Company participates in the beer industry and in Peru, in the pisco industry. The Company’s principal licensing, distribution and / or joint venture agreements include Heineken Brouwerijen B.V., PepsiCo Inc., Seven-up International, Schweppes Holdings Limited, Société des Produits Nestlé S.A., Pernod Ricard Chile S.A., Promarca S.A. (Watt’s) and Coors Brewing Company.
CORPORATE HEADQUARTERS
Vitacura 2670, 26th floor
Santiago
Chile
STOCK TICKER
Bolsa de Comercio de Santiago: CCU
NYSE: CCU
CAUTIONARY STATEMENT
Statements made in this press release 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. We undertake no obligation to update any of these statements. Persons reading this press release are cautioned not to place undue reliance on these forward-looking statements. These statements should be taken in conjunction with the additional information about risk and uncertainties set forth in CCU’s annual report on Form 20-F filed with the US Securities and Exchange Commission and in the annual report submitted to the CMF (Chilean Market Regulator) and available on our web page.
HYPERINFLATION ACCOUNTING
Inflation in Argentina has shown significant increases since the beginning of 2018. The three year cumulative inflation rate, calculated using different combinations of consumer price indexes, has exceeded 100% for several months, and inflation continues to increase. The three year cumulative inflation calculated using the general price index has already exceeded 100%. Therefore, as prescribed by IAS 29, Argentina was declared a hyperinflationary economy for accounting purposes as of July 1 st , 2018 (For further information see our December 31, 2018 Consolidated Financial Statements).
The application by first time of IAS 29 gave rise to a positive adjustment of CLP 92,241 million, net of taxes, which have been charged to the "Reserve of exchange differences on translation" account (Other comprehensive income). On the other hand, during fiscal year 2018, the application of this standard generated a gain in net monetary position financial income of CLP 2,313 million (before tax), which is recognized in the Consolidated Statement of Incomes under "Result as per adjustment units". Additionally, since the Argentine economy was declared as hyperinflationary, a loss of CLP 6,087 million was recorded in results for the year, generated by the inflation adjustment and translation at the year-end exchange rate as of December 31, 2018.
Page 6 of 13
GLOSSARY
Operating segments
The Operating segments are defined with respect to its revenues in the geographic areas of commercial activity:
· Chile : This segment commercializes Beer, Non Alcoholic Beverages and Spirits in the Chilean market, and also includes the results of Transportes CCU Limitada, Comercial CCU S.A., Creccu S.A. and Fábrica de Envases Plásticos S.A.
· International Business : This segment commercializes Beer, Cider, Non-Alcoholic Beverages and Spirits in the Argentina, Uruguay, Paraguay and Bolivia.
· Wine : This segment commercializes Wine, mainly in the export market reaching over 80 countries, as well as the Chilean domestic market.
· Other/Eliminations: Considers the non-allocated corporate overhead expenses and eliminations of transactions between segments.
ARS
Argentine peso.
CLP
Chilean peso.
Cost of sales
Formerly referred to as Cost of Goods Sold (COGS), includes direct costs and manufacturing costs.
Earnings per Share (EPS)
Net profit divided by the weighted average number of shares during the year.
EBIT
Earnings Before Interest and Taxes. For management purposes, EBIT is defined as Net income before other gains (losses), net financial expenses, equity and income of joint ventures, foreign currency exchange differences, results as per adjustment units and income taxes. EBIT is equivalent to Adjusted Operating Result used in the 20-F Form.
EBITDA
EBITDA represents EBIT plus depreciation and amortization. EBITDA is not an accounting measure under IFRS. When analyzing the operating performance, investors should use EBITDA in addition to, not as an alternative for Net income, as this item is defined by IFRS. Investors should also note that CCU’s presentation of EBITDA may not be comparable to similarly titled indicators used by other companies. EBITDA is equivalent to ORBDA (Adjusted Operating Result Before Depreciation and Amortization), used in the 20-F Form.
Exceptional Items (EI)
Formerly referred to as Non-recurring items (NRI), Exceptional Items are either income or expenses which do not occur regularly as part of the normal activities of the Company. They are presented separately because they are important for the understanding of the underlying sustainable performance of the Company due to their size or nature.
Gross profit
Gross profit represents the difference between Net sales and Cost of sales.
Gross margin
Gross profit as a percentage of Net sales.
Liquidity ratio
Total current assets / Total current liabilities
Marketing, Sales, Distribution and Administrative expenses (MSD&A)
MSD&A includes marketing, sales, distribution and administrative expenses.
Page 7 of 13
Net Financial Debt
Total Financial Debt minus Cash & Cash Equivalents.
Net Financial Debt / EBITDA
The ratio is based on a twelve month rolling calculation for EBITDA.
Net income
Net income attributable to the equity holders of the parent.
UF
The UF is a monetary unit indexed to the Consumer Price Index variation in Chile.
USD
United States Dollar.
Page 8 of 13
Page 9 of 13
Page 10 of 13
Page 11 of 13
Page 12 of 13
Exhibit 5: Balance Sheet |
||
|
December 31 |
December 31 |
|
2018 |
2017 |
(CLP million) |
||
ASSETS |
|
|
Cash and cash equivalents |
319,014 |
170,045 |
Other current assets |
621,993 |
559,062 |
Total current assets |
941,007 |
729,107 |
|
|
|
PP&E (net) |
1,021,267 |
917,913 |
Other non current assets |
443,591 |
329,209 |
Total non current assets |
1,464,858 |
1,247,123 |
Total assets |
2,405,865 |
1,976,229 |
LIABILITIES |
|
|
Short term financial debt |
62,767 |
53,592 |
Other liabilities |
582,957 |
415,158 |
Total current liabilities |
645,724 |
468,749 |
|
|
|
Long term financial debt |
228,185 |
161,002 |
Other liabilities |
142,839 |
119,649 |
Total non current liabilities |
371,025 |
280,651 |
Total Liabilities |
1,016,749 |
749,400 |
EQUITY |
|
|
Paid-in capital |
562,693 |
562,693 |
Other reserves |
(151,048) |
(178,075) |
Retained earnings |
868,482 |
716,459 |
Total equity attributable to equity holders of the parent |
1,280,127 |
1,101,077 |
Non - controlling interest |
108,989 |
125,752 |
Total equity |
1,389,116 |
1,226,829 |
Total equity and liabilities |
2,405,865 |
1,976,229 |
OTHER FINANCIAL INFORMATION |
|
|
|
|
|
Total Financial Debt |
290,952 |
214,593 |
|
|
|
Net Financial Debt |
(28,062) |
44,549 |
|
|
|
Liquidity ratio |
1.46 |
1.56 |
Total Financial Debt / Capitalization |
0.17 |
0.15 |
Net Financial Debt / EBITDA |
(0.05) |
0.14 |
Page 13 of 13
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Compañía Cervecerías Unidas S.A.
(United Breweries Company, Inc.)
/s/ Felipe Dubernet | |
Chief Financial Officer | |
Date: February 27, 2019
1 Year Compania Cervecerias Uni... Chart |
1 Month Compania Cervecerias Uni... Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions