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, 23rd 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 SECOND QUARTER 2020 RESULTS1,2
Santiago, Chile, August 5, 2020 – CCU announced
today its consolidated financial and operating results for the second quarter 2020, which ended June 30, 2020.
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Consolidated Volumes decreased
12.0%. Volume variation per Operating segment was as follows:
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o
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International Business (12.0)%
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Net sales were down 15.6%
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EBITDA reached CLP 19,654 million,
a 62.1% decrease
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Net income reached a loss of
CLP 3,257 million, a drop of 118.1%
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Earnings per share reached
a loss of CLP 8.8 per share
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Key figures
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2Q20
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2Q19
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Total
change %
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YTD20
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YTD19
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Total
change %
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(In ThHL or CLP million unless stated otherwise)
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Volumes
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5,181
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5,889
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(12.0)
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13,811
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13,998
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(1.3)
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Net sales
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318,376
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377,362
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(15.6)
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829,609
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854,220
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(2.9)
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Gross profit
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134,567
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177,755
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(24.3)
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388,361
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423,230
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(8.2)
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EBIT
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(7,457)
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24,731
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(130.2)
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54,981
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100,624
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(45.4)
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EBITDA
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19,654
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51,879
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(62.1)
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110,384
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152,307
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(27.5)
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Net income
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(3,257)
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18,040
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(118.1)
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28,978
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66,556
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(56.5)
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Earnings per share (CLP)
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(8.8)
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48.8
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(118.1)
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78.4
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180.1
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(56.5)
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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
2Q20 compared to 2Q19, unless otherwise stated.
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PRESS RELEASE
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OUR FOCUS DURING THE COVID-19 PANDEMIC:
To face this challenging scenario, since March we have been executing a regional plan with three priorities: (i) people, (ii) operation
continuity, and (iii) financial health. First, to ensure the health and safety of all our workers and the people we interact with,
we have operated with strict sanitary protocols in all our plants and distribution centers. Also, we have reinforced our commitment
to support society through initiatives such as: the production and donation of hand-sanitizer, disinfectant alcohol, facial shields
to protect our clients, and products to support several community organizations; also, the sanitizing of streets in communities
near to our wineries, the support to bars and restaurants through the campaign “Yo Invito”, and the repatriation of
Colombian and Chilean citizens, among other initiatives. Second, we have maintained the operation of our plants and distribution,
together with the activities of procurement, sales, marketing and administration. At the same time, we have kept working with our
suppliers and supporting our clients. Third, in spite of our strong financial position, reflected in a low net financial debt,
we recently issued local bonds for CLP 186,527 million, with an average real interest rate of 0.88%, to ensure our financial health
in this uncertain scenario. Finally, we would like to thank the strong commitment and dedication of all CCU employees, which made
all of the above possible.
CONSOLIDATED PERFORMANCE DURING THE COVID-19
PANDEMIC: EBITDA fell 62.1% to CLP 19,654 million and EBITDA margin dropped from 13.7% to 6.2%. Net income recorded a loss
of CLP 3,257 million from a gain of CLP 18,040 million in 2019. With respect to this quarter, we would like to highlight: (i) the strengthening of our market position, (ii) the deterioration
of margins, and (iii) the control of our expenses. As for our market position, in spite of a decrease of 12.0% in consolidated
volumes, we were able to maintain or gain market share in our main categories in Chile based on continuous improvement in brand
equity and sales execution. The lower volumes were mainly driven by a deep contraction in non-alcoholic in Chile and in the International
Business Operating segment, being the sharpest fall in April, and since then we have seen an upward trend. In Chile, this quarter,
total alcohol per capita consumption decreased (internal estimates), due to a sharp fall in spirits, whereas beer and domestic
wine increased. Regarding the margins, Gross margin dropped from 47.1% to 42.3%, mainly explained by negative external effects
from the devaluation of the CLP and ARS against the USD, which depreciated 20.4%3
and 65.1%4, respectively, affecting our USD-denominated costs, and lower average
prices in CLP, mainly due to the absence of price increases in Argentina, not allowing us to offset the impact in costs of the
high inflation and devaluation in that country. It is important to mention that it takes time to compensate a sharp devaluation
of the currencies through pricing and efficiencies. Finally, in respect of expenses, MSD&A expenses decreased 7.9%, mainly
due to lower distribution and marketing expenses.
OPERATING SEGMENTS AND JV PERFORMANCE DURING
THE COVID-19 PANDEMIC: (i) In the Chile Operating segment, volumes dropped 13.4%, while average prices rose by 0.7%. EBITDA
reached CLP 24,537 million, contracting 46.7%, and EBITDA margin deteriorated from 19.6% to 12.0%. This performance was largely
associated with lockdown measures, which deeply impacted high margin consumer occasions, mainly through the closure of the on premise
channel and the sharp contraction of the single serve consumption, the latter especially in water, juices and sports drinks. During
the quarter our e-commerce platform, “La Barra”, increased its sales by six times, helping us, although in a lower
scale, to offset the drop in volumes and improve our mix. (ii) The International Business Operating segment, which includes Argentina, Bolivia, Paraguay and Uruguay, reported a 12.0% decline
in volumes and a 25.6% decrease on average prices in CLP. EBITDA registered a loss of CLP 11,831 million. The drop in volumes was
across all the geographies, and it was deeper in countries with stricter restrictions due to the pandemic. The lower average price
in CLP was mainly explained by the absence of price increases in Argentina. (iii) The Wine Operating segment posted a 6.5% rise
in volumes and a 1.2% growth in average prices. EBITDA reached CLP 10,384 million, an expansion of 33.7%, and EBITDA margin improved
from 14.3% to 17.8%. The higher result was driven by a good performance in volumes in the Chilean and Argentine domestic markets,
associated with the brands acquired in Argentina in 2019, a stronger USD on export revenues and a lower cost of wine. (iv) In Colombia,
where we have a joint venture with Postobón, volumes were slightly positive, due to a strong recovery in May and June, the
latter showing double-digit growth, which more than offset the deep contraction in April due to the lockdowns. This performance
allowed us to gain market share, reflecting a consolidated brand portfolio and a strong distribution network.
CLOSING REMARKS: In the second quarter of
2020, CCU’s performance was deeply affected by the restrictions to control the Covid-19 pandemic, which sharply impacted
consumer occasions across all our geographies. In this context we continued focusing on people, operation continuity, and financial
health. In addition, the highlights of the quarter were the strengthening of our market position, despite volume drop, due to continuous
improvement in brand equity and sales execution; the margins deterioration, mainly associated with negative external effects; and
the control of our expenses. Looking ahead we will continue putting our efforts in recovering profitable growth through revenue
management initiatives, efficiencies and strong brands.
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3 The CLP currency variation against the USD considers average of period
(aop) compared to aop.
4 The ARS currency variation against the CLP or the USD considers 2020
end of period (eop) compared to 2019 eop.
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PRESS RELEASE
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CONSOLIDATED
INCOME STATEMENT HIGHLIGHTS - SECOND QUARTER (Exhibit 1 & 3)
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Net sales decreased 15.6%, explained by a 12.0%
drop in consolidated volumes and by 4.1% lower average prices in CLP.
The contraction in volumes was driven by a decline of 13.4% and 12.0% in the Chile and the International Business Operating segments,
respectively, while the Wine Operating segment increased 6.5%, explained by the Chilean and Argentine domestic markets, associated
with the brands acquired in Argentina in 2019, partially offset by a decrease in exports. The negative consolidated volume growth
reflected the impact of the restrictions to control the pandemic across the region and its deep impact on consumer occasions. The
lower average prices in CLP were explained by a 25.6% fall in the International Business Operating segment, due to the absence
of price increases in Argentina, partially compensated by a 1.2% growth in the Wine Operating segment, as a consequence of a stronger
USD on export revenues, and a 0.7% rise in the Chile Operating segment.
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Cost of sales was down 7.9%, explained by the
12.0% contraction in volumes partially offset by a 4.7% rise in the Cost of sales per hectoliter. The Chile Operating segment reported
an 11.7% growth in Cost of sales per hectoliter, driven by the increase in USD-linked costs from the 20.4%3 devaluation
of the CLP against the USD, partially offset with lower costs in raw materials, especially PET and aluminum. In the International
Business Operating segment, the Cost of sales per hectoliter in CLP decreased 12.4%, due to a currency translation effect, given
that in local currency Cost of sales per hectoliter increased as result of higher USD-linked costs, largely explained by the 65.1%4
devaluation of the ARS against the USD, and the impact of inflation, partially compensated with lower costs in raw materials.
In the Wine Operating segment, the Cost of sales per hectoliter decreased 4.2%, impacted by a lower cost of wine that more than
offset the effect of the depreciation of the CLP against the USD on our packaging materials linked to this currency.
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Gross profit reached CLP 134,567 million, a
24.3% decline, resulting in a 484 bps drop in our Gross margin, from 47.1% to 42.3%, as a consequence of the effects described
above.
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MSD&A expenses fell 7.9%, due to the reduction
in marketing and distribution expenses. In the Chile Operating segment, MSD&A expenses contracted 5.2%. In the International
Business Operating segment MSD&A expenses were down 18.3% and In the Wine Operating segment, MSD&A expenses grew 9.1%.
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EBIT reached a loss of CLP 7,457 million, a
contraction of CLP 32,188 million. The weaker financial result was mainly explained by: (i) a 12.0% contraction in consolidated
volumes, (ii) negative external effects from the devaluation of the CLP and ARS against the USD, affecting our USD-denominated
costs and the translation of our results, partially compensated by wine export revenues, and (iii) lower average prices in CLP,
mainly reflecting the absence of price increases in Argentina, not allowing us to offset the impact in costs of the high inflation
and devaluation in this country. These effects were partially compensated by the decrease of 7.9% in MD&A expenses, mainly
due to lower distribution and marketing expenses.
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EBITDA was down 62.1%, or CLP 32,225 million,
reaching CLP 19,654 million, explained by a fall of CLP 21,492 million in the Chile Operating segment, and a CLP 12,448 million
drop in the International Business Operating segment, partially offset by an increase of CLP 2,615 million in the Wine Operating
segment. EBITDA margin dropped 757 bps, from 13.7% to 6.2%.
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Non-operating result totalized a loss of CLP
240 million, a decrease of 96.7% when compared to a loss of CLP 7,271 million last year, primarily due to: (i) a higher gain in
Foreign currency exchange differences by CLP 9,329 million, (ii) a better result of CLP 4,287 million in Results as per adjustment units, mostly explained by a lower UF variation during 2Q20 compared with 2Q19 and
its impact on UF-linked liabilities, and (iii) a better result in Equity and income of JVs and associated by CLP 4,261 million,
mainly caused by a higher financial result in Colombia. These effects were partially offset by: (i) higher Net financial expenses
by CLP 5,420 million, mainly due to higher Cash and cash equivalents held last year for tax expenses and dividend payments related
to the 2018 ABI Transaction5, and a higher financial debt, (ii) lower result
in other gains/(losses) by CLP 5,427 million, mostly explained by losses on forward contracts entered into to mitigate the impact
of foreign exchange rate fluctuations on our foreign currency denominated assets.
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Income taxes reached a gain of CLP 4,058 million,
mostly explained by a negative taxable income in 2020.
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Net income reached a loss of CLP 3,257 million,
a contraction of CLP 21,297 million, mostly explained by the reasons described above and by a positive non-recurrent effect of
CLP 6,731 million from a tax asset revaluation in 2019 in Argentina.
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5 For further information about the Transaction see the Note 1- letter C, of
our Consolidated Financial Statements as of December 31st 2019.
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PRESS RELEASE
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CONSOLIDATED
INCOME STATEMENT HIGHLIGHTS - FIRST HALF (Exhibit 2 & 4)
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Net sales decreased 2.9%, explained by a 1.3%
drop in consolidated volumes and by 1.6% lower average prices in CLP. Volume contraction was driven by a 5.9% fall in the International
Business Operating segment, while the Chile and Wine Operating segments recorded an increment of 0.4% and 4.8%, respectively. The
negative consolidated volume growth was explained by the restrictions to control the Covid-19 pandemic in the region, which sharply
impacted consumer occasions during the second quarter. The lower average prices in CLP were explained by a 7.9% drop in the International
Business Operating segment, mostly due to the absence of price increases in Argentina, and
by a 1.0% decrease on average prices in the Chile Operating segment, as a result of promotional activities in the first quarter.
These effects were partially offset by a 4.1% growth in the Wine Operating segment, as a consequence of a stronger USD on export
revenues.
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Cost of sales was up 2.4% explained by the 3.8%
increment in Cost of sales per hectoliter, partially compensated by the 1.3% contraction in volumes. The Chile Operating segment
reported a 6.9% growth in Cost of sales per hectoliter, driven by the increase in USD-linked costs from the 20.3%3 devaluation
of the CLP against the USD, partially offset with lower costs in raw materials, especially aluminum and PET, and efficiencies in
manufacturing. In the International Business Operating segment, the Cost of sales per hectoliter in CLP increased 0.8%, mostly
as a result of higher USD-linked costs, largely explained by the 65.1%4 devaluation of the ARS against the USD, and
the impact of inflation, partially compensated with lower costs in raw materials and efficiencies. In the Wine Operating segment,
the Cost of sales per hectoliter decreased 6.0%, impacted by a lower cost of wine that more than offset the effect of the depreciation
of the CLP against the USD on our packaging materials linked to this currency.
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Gross profit reached CLP 388,361 million, an
8.2% drop, resulting in a 273 bps contraction in our Gross margin, from 49.5% to 46.8%, as a consequence of the effects described
above.
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MSD&A expenses grew by 2.6%, and as a percentage
of Net sales increased by 218 bps. In the Chile Operating segment, MSD&A increased 3.0% and as a percentage of Net sales rose
132 bps. In the International Business Operating segment, MSD&A decreased 3.4% in CLP and as a percentage of Net sales deteriorated
by 552 bps, mostly associated with the high level of inflation in Argentina, not compensated with price increases. In the Wine
Operating segment, MSD&A grew 15.3% and as a percentage of Net sales rose 154 bps, mainly explained by higher marketing expenses
due to marketing export expenses, mostly denominated in USD and Euros.
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EBIT reached CLP 54,981 million, a contraction
of 45.4%. The weaker financial result was mainly explained by: (i) strong negative external effects from the devaluation of the
CLP and ARS against the USD, affecting our USD-denominated costs and the translation of our results, partially compensated by wine
export revenues, (ii) a 1.3% decrease in consolidated volumes, and (iii) lower average prices in CLP, mainly reflecting the absence
of price increases in Argentina, not allowing us to offset the impact in costs of the high inflation and devaluation in this country.
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EBITDA was down 27.5%, reaching CLP 110,384
million, explained by a 21.0% contraction in the Chile Operating segment and a drop of CLP 19,955 million in the International
Business Operating segment, partially compensated by a 55.6% expansion in the Wine Operating segment. Consequently, EBITDA margin
dropped 452 bps, from 17.8% to 13.3%.
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Non-operating result totalized a loss of CLP
6,424 million, a decrease of 47.3% when compared to a loss of CLP 12,190 million last year, primarily due to: (i) a better result
in Foreign currency exchange differences by CLP 5,080 million, (ii) a lower loss in Equity and income of JVs and associated by
CLP 5,015 million, mainly caused by a higher financial result in Colombia, (iii) a lower loss of CLP 2,916 million in Results as
per adjustment units, mostly explained by a lower UF variation during the first half of 2020 compared with 2019 and its impact
on UF-linked liabilities, and (iv) a higher result in other gains/(losses) by CLP 2,838 million, explained by a better result on
forward contracts entered into to mitigate the impact of foreign exchange rate fluctuations on our foreign currency denominated
assets. These effects were partially offset by higher Net financial expenses by CLP 10,083 million, mainly due to higher Cash and
cash equivalents held last year for tax expenses and dividend payments related to the 2018 ABI Transaction5 and higher
debt.
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Income taxes reached CLP 16,280 million, expanding
8.9% from last year, mostly explained by higher taxes resulting from our foreign currency denominated assets as a consequence of
the appreciation of the USD against the CLP during the first half of the year and a positive non-recurrent effect of CLP 6,731
million from a tax asset revaluation in 2019 in Argentina, partially compensated by a lower taxable income.
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Net income reached CLP 28,978 million, a contraction
of 56.5%.
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PRESS RELEASE
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HIGHLIGHTS OPERATING SEGMENTS SECOND QUARTER
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CHILE OPERATING SEGMENT
In the Chile Operating segment,
volumes dropped 13.4%, while average prices rose by 0.7%. EBITDA reached CLP 24,537 million, contracting 46.7%, and EBITDA margin deteriorated from 19.6% to 12.0%. This performance was largely associated
with lockdown measures, which deeply impacted high margin consumer occasions, mainly through the closure of the on premise channel
and the sharp contraction of the single serve consumption, the latter especially in water, juices and sports drinks. During the
quarter our e-commerce platform, “La Barra”, increased its sales close to six times, helping us, although in a lower
scale, to offset the drop in volumes and improve our mix.
During the Covid-19 sanitary emergency, CCU has reinforced
its commitment to society by developing initiatives which reflect the essence of its business. Thus, in addition to the production
and donation to the Ministry of Health of over fifty thousand liters of hand sanitizer, using as raw material the alcohol generated
from the dealcoholization process of our non-alcoholic beers Cristal Cero and Heineken 0.0., and over sixty thousand liters of
disinfectant alcohol, using alcohol obtained from the distillation process from our subsidiary Compañía Pisquera
de Chile, through the initiative “Almacén Seguro” we produced and distributed more than sixty thousand face
shields, made by our subsidiary Plasco using PET pre-forms for our clients protection. Also, CCU and its JV Central Cervecera de
Colombia, made available a charter flight to the Chilean and Colombian Foreign Affairs ministries in order to allow that more than
two hundred people to be reunited with their families in the middle of the health emergency, in line with the concept “Juntémonos”
of our beer brand Cristal and “Colombia en una Cerveza” of our beer brand Andina. In addition, we launched the campaign
“Yo Invito” to support bars and restaurants, donated products to support community organizations and provided additional
financial and consulting support to our clients through CRECCU.
In terms of brands, we launched Pure Life Alkaline,
a still water with more minerals to achieve a higher ph level, and a new edition of Mistral Selección de Barricas, a limited
edition premium pisco aged in oak. Also during the quarter, we adapted our marketing strategy to be close to our consumers even
in the current context. Thus, we strengthened our digital channels by developing initiatives such as on-line football tournaments
with our beer brand Cristal, live concerts with our beer brand Escudo, and the relaunch of the Pepsi Channel which includes music
and contests.
INTERNATIONAL BUSINESS OPERATING SEGMENT
The International Business Operating segment, which
includes Argentina, Bolivia, Paraguay and Uruguay, reported a 12.0% decline in volumes and a 25.6% decrease on average prices in
CLP. EBITDA registered a loss of CLP 11,831 million. The drop in volumes was across all the geographies, and it was deeper in countries
with stricter restrictions due to the pandemic. The lower average price in CLP was mainly explained by the absence of price increases
in Argentina.
Regarding initiatives related to the Covid-19 pandemic,
in Colombia, through our brand Andina, we participated in the Sunrise Project, a digital platform which allows donations and pre-purchases
to over 1,600 bars and restaurants, we produced and donated five thousand facial shields to the Ministry of Health and to our
clients in Uruguay, and fifty thousand units of hand-sanitizer in Argentina, in collaboration with other companies. Also in Argentina,
under the campaigns #AquíEstamos and #AhíEstaremos, which committed the donation of beer to bars and restaurants,
we donated 100 thousand glasses of the beer brand Salta and 175 thousand glasses of the beer brand Santa Fe.
In terms of brands,
in Uruguay, we launched Imperial Cream Stout, a dark beer especially for the winter season. Also, we strengthened our digital
channels developing virtual interaction with our clients in Argentina and Bolivia through our main brands. Finally, in Paraguay
we recently started the operation of a new distribution center with more capacity and space for our products and workers.
WINE OPERATING SEGMENT
The Wine Operating segment posted a 6.5% rise in
volumes and a 1.2% growth in average prices. EBITDA reached CLP 10,384 million, an expansion of 33.7%, and EBITDA margin improved from 14.3% to 17.8%. The higher result was driven by a good
performance in volumes in the Chilean and Argentine domestic markets, associated with the brands acquired in Argentina in 2019,
a stronger USD on export revenues and a lower cost of wine.
During the quarter, in addition to contributing to
the sanitation of the streets of several locations in Chile, VSPT made available PCR laboratory equipment to the Ministry of Health
of Chile in order to strengthen the detection capabilities of Covid-19. In terms of international recognition VSPT obtained the “For Life” certification, an accreditation that evaluates the
foundations of a sustainable and socially responsible company, ensuring excellence in meeting the demands of the society to corporations.
Regarding brands, the marketing campaign “Gato Negro 9Lives” was the winner in the branded content category, in the
international competition NYX Videos Awards.
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PRESS RELEASE
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ADDITIONAL INFORMATION AND EXHIBITS
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ABOUT CCU
CCU is a multi-category
beverage company with operations in Chile, Argentina, Bolivia, Colombia, Paraguay 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 and in the malt 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.
GLOSSARY
Operating segments
The Operating segments are defined with respect to its revenues
in the geographic areas of commercial activity:
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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.
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International Business: This segment commercializes
Beer, Cider, Non-Alcoholic Beverages and Spirits in Argentina, Uruguay, Paraguay and Bolivia.
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Wine: This segment commercializes Wine, mainly
in the export market reaching over 80 countries, as well as the Chilean and Argentine domestic market.
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Other/Eliminations: Considers the non-allocated
corporate overhead expenses and eliminations of transactions and volumes between segments.
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PRESS RELEASE
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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.
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.
|
PRESS RELEASE
|
|
|
Exhibit 1: Consolidated Income Statement (Second Quarter 2020)
|
|
Second Quarter
|
2020
|
2019
|
Total
|
|
|
(CLP million)
|
Change %
|
|
Net sales
|
318,376
|
377,362
|
(15.6)
|
|
Cost of sales
|
(183,809)
|
(199,607)
|
(7.9)
|
|
% of Net sales
|
57.7
|
52.9
|
|
|
Gross profit
|
134,567
|
177,755
|
(24.3)
|
|
MSD&A
|
(145,673)
|
(158,216)
|
(7.9)
|
|
% of Net sales
|
45.8
|
41.9
|
|
|
Other operating income/(expenses)
|
3,649
|
5,192
|
(29.7)
|
|
EBIT
|
(7,457)
|
24,731
|
(130.2)
|
|
EBIT margin %
|
(2.3)
|
6.6
|
|
|
Net financial expenses
|
(6,678)
|
(1,258)
|
430.8
|
|
Equity and income of JVs and associated
|
(2,482)
|
(6,743)
|
(63.2)
|
|
Foreign currency exchange differences
|
10,245
|
916
|
1,018.9
|
|
Results as per adjustment units
|
613
|
(3,674)
|
(116.7)
|
|
Other gains/(losses)
|
(1,939)
|
3,488
|
(155.6)
|
|
Non-operating result
|
(240)
|
(7,271)
|
(96.7)
|
|
Income/(loss) before taxes
|
(7,698)
|
17,460
|
(144.1)
|
|
Income taxes
|
4,058
|
3,622
|
12.0
|
|
Net income for the period
|
(3,639)
|
21,082
|
(117.3)
|
|
|
|
|
|
|
Net income attributable to:
|
|
|
|
|
The equity holders of the parent
|
(3,257)
|
18,040
|
(118.1)
|
|
Non-controlling interest
|
383
|
(3,042)
|
(112.6)
|
|
|
|
|
|
|
EBITDA
|
19,654
|
51,879
|
(62.1)
|
|
EBITDA margin %
|
6.2
|
13.7
|
|
|
|
|
|
|
|
OTHER INFORMATION
|
|
|
|
|
Number of shares
|
369,502,872
|
369,502,872
|
|
|
Shares per ADR
|
2
|
2
|
|
|
|
|
|
|
|
Earnings per share (CLP)
|
(8.8)
|
48.8
|
(118.1)
|
|
Earnings per ADR (CLP)
|
(17.6)
|
97.6
|
(118.1)
|
|
|
|
|
|
|
Depreciation
|
27,111
|
27,148
|
(0.1)
|
|
Capital Expenditures
|
29,520
|
35,629
|
(17.1)
|
|
PRESS RELEASE
|
|
|
Exhibit 2: Consolidated Income Statement (Six months ended on June 30, 2020)
|
|
YTD as of June
|
2020
|
2019
|
Total
|
|
|
(CLP million)
|
Change %
|
|
Net sales
|
829,609
|
854,220
|
(2.9)
|
|
Cost of sales
|
(441,248)
|
(430,990)
|
2.4
|
|
% of Net sales
|
53.2
|
50.5
|
|
|
Gross profit
|
388,361
|
423,230
|
(8.2)
|
|
MSD&A
|
(341,214)
|
(332,673)
|
2.6
|
|
% of Net sales
|
41.1
|
38.9
|
|
|
Other operating income/(expenses)
|
7,835
|
10,068
|
(22.2)
|
|
EBIT
|
54,981
|
100,624
|
(45.4)
|
|
EBIT margin %
|
6.6
|
11.8
|
|
|
Net financial expenses
|
(11,336)
|
(1,253)
|
804.9
|
|
Equity and income of JVs and associated
|
(5,307)
|
(10,322)
|
(48.6)
|
|
Foreign currency exchange differences
|
6,355
|
1,276
|
398.3
|
|
Results as per adjustment units
|
(1,586)
|
(4,502)
|
(64.8)
|
|
Other gains/(losses)
|
5,449
|
2,611
|
108.7
|
|
Non-operating result
|
(6,424)
|
(12,190)
|
(47.3)
|
|
Income/(loss) before taxes
|
48,557
|
88,434
|
(45.1)
|
|
Income taxes
|
(16,280)
|
(14,944)
|
8.9
|
|
Net income for the period
|
32,277
|
73,490
|
(56.1)
|
|
|
|
|
|
|
Net income attributable to:
|
|
|
|
|
The equity holders of the parent
|
28,978
|
66,556
|
(56.5)
|
|
Non-controlling interest
|
(3,299)
|
(6,934)
|
(52.4)
|
|
|
|
|
|
|
EBITDA
|
110,384
|
152,307
|
(27.5)
|
|
EBITDA margin %
|
13.3
|
17.8
|
|
|
|
|
|
|
|
OTHER INFORMATION
|
|
|
|
|
Number of shares
|
369,502,872
|
369,502,872
|
|
|
Shares per ADR
|
2
|
2
|
|
|
|
|
|
|
|
Earnings per share (CLP)
|
78.4
|
180.1
|
(56.5)
|
|
Earnings per ADR (CLP)
|
156.8
|
360.2
|
(56.5)
|
|
|
|
|
|
|
Depreciation
|
55,402
|
51,682
|
7.2
|
|
Capital Expenditures
|
67,302
|
61,896
|
8.7
|
|
PRESS RELEASE
|
|
|
Exhibit 3: Segment Information (Second Quarter 2020)
|
|
|
1. Chile Operating segment
|
|
2. International Business Operating segment
|
|
YTD as of June
|
|
|
(In ThHL or CLP million unless stated otherwise)
|
2020
|
2019
|
YoY %
|
|
2020
|
2019
|
YoY %
|
|
Volumes
|
3,390
|
3,917
|
(13.4)
|
|
1,433
|
1,629
|
(12.0)
|
|
Net sales
|
205,118
|
235,434
|
(12.9)
|
|
60,638
|
92,608
|
(34.5)
|
|
Net sales (CLP/HL)
|
60,500
|
60,103
|
0.7
|
|
42,329
|
56,859
|
(25.6)
|
|
Cost of sales
|
(110,531)
|
(114,305)
|
(3.3)
|
|
(40,816)
|
(52,954)
|
(22.9)
|
|
% of Net sales
|
53.9
|
48.6
|
|
|
67.3
|
57.2
|
|
|
Gross profit
|
94,587
|
121,129
|
(21.9)
|
|
19,822
|
39,655
|
(50.0)
|
|
% of Net sales
|
46.1
|
51.4
|
|
|
32.7
|
42.8
|
|
|
MSD&A
|
(87,024)
|
(91,778)
|
(5.2)
|
|
(41,842)
|
(51,218)
|
(18.3)
|
|
% of Net sales
|
42.4
|
39.0
|
|
|
69.0
|
55.3
|
|
|
Other operating income/(expenses)
|
129
|
210
|
|
|
3,395
|
4,762
|
|
|
EBIT
|
7,693
|
29,561
|
(74.0)
|
|
(18,624)
|
(6,801)
|
173.8
|
|
EBIT margin
|
3.8
|
12.6
|
|
|
(30.7)
|
(7.3)
|
|
|
EBITDA
|
24,537
|
46,029
|
(46.7)
|
|
(11,831)
|
617
|
(2,018.7)
|
|
EBITDA margin
|
12.0
|
19.6
|
|
|
(19.5)
|
0.7
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Other/eliminations
|
|
Total
|
|
Second Quarter
|
|
|
(In ThHL or CLP million unless stated otherwise)
|
2020
|
2019
|
YoY %
|
|
2020
|
2019
|
YoY %
|
|
Volumes
|
(27)
|
(18)
|
|
|
5,181
|
5,889
|
(12.0)
|
|
Net sales
|
(5,745)
|
(4,871)
|
17.9
|
|
318,376
|
377,362
|
(15.6)
|
|
Net sales (CLP/HL)
|
|
|
|
|
61,454
|
64,076
|
(4.1)
|
|
Cost of sales
|
2,851
|
2,272
|
25.5
|
|
(183,809)
|
(199,607)
|
(7.9)
|
|
% of Net sales
|
|
|
|
|
57.7
|
52.9
|
|
|
Gross profit
|
(2,894)
|
(2,600)
|
11.3
|
|
134,567
|
177,755
|
(24.3)
|
|
% of Net sales
|
|
|
|
|
42.3
|
47.1
|
|
|
MSD&A
|
(1,174)
|
(896)
|
31.0
|
|
(145,673)
|
(158,216)
|
(7.9)
|
|
% of Net sales
|
|
|
|
|
45.8
|
41.9
|
|
|
Other operating income/(expenses)
|
34
|
89
|
|
|
3,649
|
5,192
|
|
|
EBIT
|
(4,035)
|
(3,407)
|
18.4
|
|
(7,457)
|
24,731
|
(130.2)
|
|
EBIT margin
|
|
|
|
|
2.3
|
6.6
|
|
|
EBITDA
|
(3,435)
|
(2,535)
|
35.5
|
|
19,654
|
51,879
|
(62.1)
|
|
EBITDA margin
|
|
|
|
|
6.2
|
13.7
|
|
|
PRESS RELEASE
|
|
|
Exhibit 4: Segment Information (Six months ended on June 30, 2020)
|
|
|
1. Chile Operating segment
|
|
2. International Business Operating segment
|
|
3. Wine Operating segment
|
|
YTD as of June
|
|
|
|
(In ThHL or CLP million unless stated otherwise)
|
2020
|
2019
|
YoY %
|
|
2020
|
2019
|
YoY %
|
|
2020
|
2019
|
YoY %
|
|
Volumes
|
9,388
|
9,350
|
0.4
|
|
3,774
|
4,012
|
(5.9)
|
|
687
|
656
|
4.8
|
|
Net sales
|
546,487
|
549,580
|
(0.6)
|
|
185,180
|
213,757
|
(13.4)
|
|
107,877
|
98,871
|
9.1
|
|
Net sales (CLP/HL)
|
58,214
|
58,776
|
(1.0)
|
|
49,070
|
53,285
|
(7.9)
|
|
156,998
|
150,758
|
4.1
|
|
Cost of sales
|
(273,758)
|
(255,093)
|
7.3
|
|
(109,292)
|
(115,250)
|
(5.2)
|
|
(63,085)
|
(64,056)
|
(1.5)
|
|
% of Net sales
|
50.1
|
46.4
|
|
|
59.0
|
53.9
|
|
|
58.5
|
64.8
|
|
|
Gross profit
|
272,729
|
294,488
|
(7.4)
|
|
75,888
|
98,507
|
(23.0)
|
|
44,792
|
34,816
|
28.7
|
|
% of Net sales
|
49.9
|
53.6
|
|
|
41.0
|
46.1
|
|
|
41.5
|
35.2
|
|
|
MSD&A
|
(208,607)
|
(202,509)
|
3.0
|
|
(99,335)
|
(102,858)
|
(3.4)
|
|
(30,847)
|
(26,746)
|
15.3
|
|
% of Net sales
|
38.2
|
36.8
|
|
|
53.6
|
48.1
|
|
|
28.6
|
27.1
|
|
|
Other operating income/(expenses)
|
521
|
675
|
|
|
6,819
|
8,696
|
|
|
410
|
180
|
|
|
EBIT
|
64,642
|
92,653
|
(30.2)
|
|
(16,629)
|
4,345
|
(482.7)
|
|
14,355
|
8,249
|
74.0
|
|
EBIT margin
|
11.8
|
16.9
|
|
|
(9.0)
|
2.0
|
|
|
13.3
|
8.3
|
|
|
EBITDA
|
98,385
|
124,473
|
(21.0)
|
|
(1,914)
|
18,041
|
(110.6)
|
|
20,023
|
12,865
|
55.6
|
|
EBITDA margin
|
18.0
|
22.6
|
|
|
1.0
|
8.4
|
|
|
18.6
|
13.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Other/eliminations
|
|
Total
|
|
|
|
|
|
YTD as of June
|
|
|
|
|
|
|
(In ThHL or CLP million unless stated otherwise)
|
2020
|
2019
|
YoY %
|
|
2020
|
2019
|
YoY %
|
|
|
|
|
|
Volumes
|
(37)
|
(20)
|
|
|
13,811
|
13,998
|
(1.3)
|
|
|
|
|
|
Net sales
|
(9,935)
|
(7,989)
|
24.4
|
|
829,609
|
854,220
|
(2.9)
|
|
|
|
|
|
Net sales (CLP/HL)
|
|
|
|
|
60,068
|
61,026
|
(1.6)
|
|
|
|
|
|
Cost of sales
|
4,887
|
3,408
|
43.4
|
|
(441,248)
|
(430,990)
|
2.4
|
|
|
|
|
|
% of Net sales
|
|
|
|
|
53.2
|
50.5
|
|
|
|
|
|
|
Gross profit
|
(5,048)
|
(4,580)
|
10.2
|
|
388,361
|
423,230
|
(8.2)
|
|
|
|
|
|
% of Net sales
|
|
|
|
|
46.8
|
49.5
|
|
|
|
|
|
|
MSD&A
|
(2,425)
|
(561)
|
332.3
|
|
(341,214)
|
(332,673)
|
2.6
|
|
|
|
|
|
% of Net sales
|
|
|
|
|
41.1
|
38.9
|
|
|
|
|
|
|
Other operating income/(expenses)
|
85
|
518
|
|
|
7,835
|
10,068
|
|
|
|
|
|
|
EBIT
|
(7,388)
|
(4,624)
|
59.8
|
|
54,981
|
100,624
|
(45.4)
|
|
|
|
|
|
EBIT margin
|
|
|
|
|
6.6
|
11.8
|
|
|
|
|
|
|
EBITDA
|
(6,111)
|
(3,072)
|
98.9
|
|
110,384
|
152,307
|
(27.5)
|
|
|
|
|
|
EBITDA margin
|
|
|
|
|
13.3
|
17.8
|
|
|
|
|
|
|
PRESS RELEASE
|
|
|
Exhibit 5: Balance Sheet
|
|
|
|
|
June 30
|
December 31
|
|
|
2020
|
2019
|
|
|
(CLP million)
|
|
ASSETS
|
|
|
|
Cash and cash equivalents
|
260,687
|
196,369
|
|
Other current assets
|
565,027
|
592,913
|
|
Total current assets
|
825,715
|
789,282
|
|
|
|
|
|
PP&E (net)
|
1,102,880
|
1,071,730
|
|
Other non current assets
|
506,720
|
492,679
|
|
Total non current assets
|
1,609,600
|
1,564,409
|
|
Total assets
|
2,435,315
|
2,353,691
|
|
|
|
|
|
LIABILITIES
|
|
|
|
Short term financial debt
|
101,371
|
68,386
|
|
Other liabilities
|
287,803
|
414,896
|
|
Total current liabilities
|
389,173
|
483,282
|
|
|
|
|
|
Long term financial debt
|
445,572
|
261,769
|
|
Other liabilities
|
168,024
|
165,712
|
|
Total non current liabilities
|
613,597
|
427,481
|
|
Total Liabilities
|
1,002,770
|
910,763
|
|
|
|
|
|
EQUITY
|
|
|
|
Paid-in capital
|
562,693
|
562,693
|
|
Other reserves
|
(131,400)
|
(137,503)
|
|
Retained earnings
|
888,218
|
902,863
|
|
Total equity attributable to equity holders of the parent
|
1,319,512
|
1,328,054
|
|
Non - controlling interest
|
113,033
|
114,873
|
|
Total equity
|
1,432,545
|
1,442,927
|
|
Total equity and liabilities
|
2,435,315
|
2,353,691
|
|
|
|
|
|
OTHER FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
Total Financial Debt
|
546,943
|
330,155
|
|
|
|
|
|
Net Financial Debt
|
286,256
|
133,786
|
|
|
|
|
|
Liquidity ratio
|
2.12
|
1.63
|
|
Total Financial Debt / Capitalization
|
0.28
|
0.19
|
|
Net Financial Debt / EBITDA
|
0.97
|
0.40
|
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.)
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/s/ Felipe Dubernet
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Chief Financial Officer
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Date: August
5, 2020
Compania Cervecerias Uni... (NYSE:CCU)
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