6-K 1 ccupr3q10_6k.htm PRESS RELEASE ccupr3q10_6k.htm - Provided by MZ Technologies

 

 

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

 

 

COMPANIA CERVECERIAS 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

 

 

 

 


FOR IMMEDIATE RELEASE
For more information contact:
Rosita Covarrubias / Carolina Burgos
Investor Relations Department
Compañía Cervecerías Unidas S.A.
www.ccu-sa.com; www.ccu.cl
(56-2) 427-3581 / (56-2) 427-3104

CCU S.A. REPORTS CONSOLIDATED THIRD QUARTER 2010 AND YTD RESULTS (1)

THIRD QUARTER 
Net sales up 11.3%, Operating result increases 9.7%, EBITDA(2) up 7.9% 
Net profit(3) up 8.9% to CLP 61.4 per share 
YTD 
Net sales up 7.8%, Operating result increases 19.3%, EBITDA(2) up 14.6% 
Net profit(3) down 22.5% to CLP 231.9 per share 
 
THIRD QUARTER BEFORE NON RECURRING ITEMS (NRI)
Operating result before NRI increases 9.3%, EBITDA(2) before NRI up 7.6% 
Net profit before NRI up 40.4% to CLP 59.6 per share
YTD BEFORE NRI
Operating result before NRI increases 12.1%, EBITDA(2) before NRI up 9.2% 
Net profit before NRI up 13.5% to CLP 218.4 per share

 

(Santiago, Chile, November 3, 2010) -- CCU announced today its consolidated financial results under IFRS for the third quarter ended September 30, 2010. (4)

COMMENTS FROM THE CEO 

 

We are pleased with CCU s third quarter volumes. The consolidated volumes grew 8.7% to 3.8 million Hectoliters, with the contribution of practically all segments: Non alcoholic with 13.2%, Beer Argentina increased 7.9%, Spirits was up 7.4%, Beer Chile grew 6.8% and Wines grew 6.3% in the domestic market and decreased 7.1% in the export and Argentine markets. We attribute these positive changes to the effectiveness of our commercial efforts in line with the recovery of the economy and the subsequent private consumption dynamic.

__________________________________
(1)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 SVS and available in our web page.
(2)EBITDA represents Operating result plus depreciation and amortization. EBITDA is not a calculation based on generally accepted accounting principles. For more detail, please see full note before Exhibits.
(3)Net profit attributable to parent company shareholders as per IFRS.
(4)All the comments below refers to Q3 10 figures compared to Q3 09.

1


Net sales increased 11.3% due to the explained increase in volumes and to 2.3% average increase in prices.

The total EBITDA was influenced by the 18.1% decrease of the Wine s EBITDA as a consequence of higher raw material cost due to a lower yield in the 10 harvest, to the scarcity of wine pursuant the earthquakes related losses, and to the adverse impact on exports of the Chilean peso appreciation as compared to Q3 09: 6% vis a vis the US dollar and 16% with respect to the Euro. Also, the Beer Argentina s EBITDA measured in Chilean pesos increased 6.8% which is explained by the same reason. These foreign currency effects were not sufficiently compensated by the lower raw material cost in Beer Chile and Non-alcoholic beverages because their dollar related raw material inventories were converted at a higher foreign exchange rate. Additionally, our Marketing expenses increased 19% mostly due to expenses related to volume and to the bicentennial activities as well as to the final rounds of the Soccer World Cup. The EBITDA margin decreased from 21.6% to 21.0% in Q3 10, mostly as a consequence of these two effects (FX rates and marketing expenses), while the Operational result increased 9.7% and EBITDA grew 7.9%.

Finally, with regards to the February 2010 earthquake s damages, we have recorded in Accounts receivables the amount corresponding to cost and expenses incurred in relation with damage control tasks and destroyed inventory, according to our insurance policies. The receivable amount does not include the value of fixed assets write offs since the Company, together with the insurance adjusters, is in the final process of sorting out the assets to be replaced. As of September the Company had register CLP23,296 million as Accounts receivables and received partial cash advances from the insurance companies for CLP19,652 million (and CLP2,177 million in October for a total of CLP21,829 million) which reduced the total account receivable outstanding. We have also expensed CLP391 million corresponding to uncollectable provisions and write offs of non covered fixed assets.

2


CONSOLIDATED INCOME STATEMENT HIGHLIGHTS (Exhibits 1 & 2) 

 

NET SALES

Q3 10  Total Net sales increased 11.3% to CLP 193,134 million as a result of 8.7% higher consolidated volumes and 2.3% higher average price. Volumes increased in almost all our segments, contributing to the consolidated volume growth: the Non-alcoholic beverages increased 13.2%, Beer Argentina was up by 7.9%, Spirits was 7.4% higher, our Beer segment in Chile achieved a 6.8% larger volume and domestic Wine volume increased 6.3%; partially compensated by a 7.1% decrease in Wine volumes in the export and Argentine markets. The higher average price is mainly explained by 17.3% rise in domestic Wine, 12.4% increase in the average price of Beer in Argentina, 2.3% price increase in Beer Chile, 2.0% in Spirits and 1.2% in Non-alcoholic beverages partially compensated by 2% decrease in Wine exports due to the appreciation of the Chilean peso. Prices increased due to changes in mix as well as to price list rises in Wine, Beer Chile and Beer Argentina. The appreciation of the Chilean peso eroded the price increases in the wine export and Beer Argentina segments. 
 
2010  Accumulated Net sales increased 7.8% amounting to CLP 587,533 million, as a result of 6.9% higher consolidated volumes and 1.3% higher average prices. 

 

3


Net sales by segment

  Q3 (million CLP)
  2010 2009 % Chg. 
Beer Chile  61,014  31.6%  56,428  32.5%  8.1% 
Beer Argentina  31,588  16.4%  26,155  15.1%  20.8% 
Non-alcoholic beverages  50,719  26.3%  44,337  25.5%  14.4% 
Wine  37,557  19.4%  36,874  21.2%  1.9% 
Spirits  12,914  6.7%  11,088  6.4%  16.5% 
Other/Eliminations  -659  -0.3%  -1,322  -0.8%  - 
TOTAL  193,134  100.0%  173,560  100.0%  11.3% 

 

  YTD (million CLP)
  2010 2009 % Chg. 
Beer Chile  196,921  33.5%  191,393  35.1%  2.9% 
Beer Argentina  105,676  18.0%  93,968  17.2%  12.5% 
Non-alcoholic beverages  157,051  26.7%  142,204  26.1% 10.4% 
Wine  100,658  17.1%  92,327  16.9%  9.0% 
Spirits  31,728  5.4%  28,136  5.2%  12.8% 
Other/Eliminations  -4,501  -0.8%  -3,046  -0.6%  - 
TOTAL  587,533  100.0%  544,982  100.0%  7.8% 
 
GROSS PROFIT
 
Q3 10  Increased 10.7% to CLP 99,338 million as a result of 11.3% higher Net sales, partially offset by 11.9% higher Cost of goods sold (COGS) which amounted to CLP 93,796 million. As a percentage of Net sales, the COGS increased from 48.3% in Q3 09 to 48.6% in Q3 10, mostly due to higher price of wine raw material as a consequence of a lower yield in the 10 harvest and the scarcity of wine pursuant the February 27 earthquake inventory losses. Accordingly, the Gross profit, as a percentage of Net sales, decreased from 51.7% in Q3 09 to 51.4% this quarter. 
 
2010  Increased 11.3% to CLP 314,797 million and, as a percentage of Net sales, the consolidated Gross profit increased from 51.9% to 53.6% when compared to 2009. 

 

OPERATING RESULT

Q3 10  Increased 9.7% to CLP 29,358 million due to the higher Gross profit, partially offset by higher Marketing/Selling, Distribution and Administrative expenses (MSD&A). MSD&A expenses increased in Q3 10 by 11.3%, to CLP 69,996 million. MSD&A expenses, as a percentage of Net sales, remained almost flat: 36.3% in Q3 09 to 36.2% in Q3 10. The consolidated operating margin decreased slightly from 15.4% in Q3 09 to 15.2% in Q3 10. 
 
2010  Increased 19.3% amounting to CLP 111,208 million and the operating margin was 18.9%, increasing 1.8 percentage points when compared to 2009 due to a better performance and also due to a non recurring item (NRI) derived from the sale of a site in Lima which generated a one time profit before taxes of CLP 6,791 million. The accumulated Operating result before NRI increased 12.1% and its margin grew from 17.1% in 2009 to 17.8% in 2010. 

 

4


Operating result and Operating margin by segment

  Q3
  Operating result (million CLP)  Operating margin 
  2010  2009  % Chg  2010  2009 
Beer Chile  15,269  14,253  7.1%  25.0%  25.3% 
Beer Argentina  1,633  1,597  2.3%  5.2%  6.1% 
Non-alcoholic beverages  6,636  3,863  71.8%  13.1%  8.7% 
Wine  4,009  5,392  -25.7%  10.7%  14.6% 
Spirits  2,256  1,807  24.9%  17.5%  16.3% 
Other/Eliminations  -443  -160  177.1%  -  - 
TOTAL  29,358  26,751  9.7%  15.2%  15.4% 
 
  YTD 
  Operating result (million CLP)  Operating margin 
  2010  2009  %Chg  2010  2009 
Beer Chile  54,807  50,265  9.0%  27.8%  26.3% 
Beer Argentina  13,123  11,612  13.0%  12.4%  12.4% 
Non-alcoholic beverages  23,011  14,987  53.5%  14.7%  10.5% 
Wine  9,338  9,591  -2.6%  9.3%  10.4% 
Spirits  4,837  4,947  -2.2%  15.2%  17.6% 
Other/Eliminations  6,092  1,776  243.1%  -  - 
TOTAL  111,208  93,178  19.3%  18.9%  17.1% 

 

EBITDA
Q3 10  Increased 7.9%, to CLP 40,495 million and the consolidated EBITDA margin decreased from 21.6% in Q3 09 to 21.0% in Q3 10, mostly explained by foreign exchange rates, higher marketing expenses and cost/expenses pressures in Argentina. 

 

5


2010  Increased 14.6% to CLP 143,947 million and the EBITDA margin grew from 23.0% in Q3 09 to 24.5% in Q3 10. The accumulated EBITDA before NRI increased 9.2% to CLP 137,156 and the margin increased from 23.0% in 2009 to 23.3% in 2010. 

 


EBITDA by segment

  Q3
  EBITDA (million CLP)  EBITDA margin 
  2010  2009  % Chg  2010  2009 
Beer Chile  18,853  18,151  3.9%  30.9%  32.2% 
Beer Argentina  2,847  2,665  6.8%  9.0%  10.2% 
Non-alcoholic beverages  9,053  6,306  43.6%  17.8%  14.2% 
Wine  5,629  6,876  -18.1%  15.0%  18.6% 
Spirits  2,679  2,247  19.2%  20.7%  20.3% 
Other/Eliminations  1,433  1,279  -  -  - 
TOTAL  40,495  37,524  7.9%  21.0%  21.6% 
 
  YTD 
  EBITDA (million CLP)  EBITDA margin 
  2010  2009  % Chg  2010  2009 
Beer Chile  65,476  61,229  6.9%  33.2%  32.0% 
Beer Argentina  16,700  15,085  10.7%  15.8%  16.1% 
Non-alcoholic beverages  30,015  22,123  35.7%  19.1%  15.6% 
Wine  14,194  14,900  -4.7%  14.1%  16.1% 
Spirits  6,098  6,243  -2.3%  19.2%  22.2% 
Other/Eliminations  11,464  5,992  -  -  - 
TOTAL  143,947  125,573  14.6%  24.5%  23.0% 

 

 

 

6


ALL OTHER

Q3 10  In All other we include the following: Net financing expenses, Share of profits of associates and joint ventures, Exchange rate differences, Result of indexed units and Other gains/(losses). The total variation of these accounts, when compared to the same quarter last year, is a lower income of CLP 5,194 million mainly explained by: 
 
 
  • Results of indexed units, which worsened CLP 2,347 million, mainly due to the absence this year of the 2009 deflation effect on our UF denominated financial debt, which generated an extraordinary gain in 2009. (The UF is a monetary unit indexed to the CPI variation). 
  • Other gains/(losses) and Exchange rate differences, which decreased CLP 3,792 million mostly due to losses related to the hedges covering foreign exchange variations on taxes. 
 
  All of the above was partially compensated by: 
 
  • Net financing expenses, which decreased CLP 929 million, from a net expense of CLP 2,702 million to CLP 1,773 million as a result of the timely procurement of the refinancing of a US$100 million loan due November 2009. 
 
2010  Reduced from a profit of CLP 20,737 million to a loss of CLP 10,527 million due to the same reasons as explained above and lower non recurring profits in 2010. The accumulated Result of indexed units represented a lower profit of CLP 9,259 million in 2010. Other gains/(losses) considers the absence of CLP 24,439 million one time profit in 2009 generated by the sale of 29.9% of Aguas CCU-Nestlé Chile S.A. partially compensated by higher results of CLP 2,337 million on the foreign currency hedge. 

 

INCOME TAX

Q3 10  Income tax decreased CLP 238 million mostly due to the absence of the tax credit related with the merger in Aguas CCU-Nestlé during 2009, partially compensated by the positive effect of foreign exchange fluctuations on taxes. 
 
2010  Increased CLP 11,450 million mainly due to the absence this year of a non recurrent positive effect in Q1 09 and to the additional tax paid on the Peru site sale s profit. 

 

MINORITY INTEREST

Q3 10  Decreased CLP 3,956 million to CLP 2,493 million mostly due to the lower results of Viña San Pedro Tarapaca and the absence of the 2009 one time effect in taxes of Aguas CCU-Nestlé. 
 
2010  Decreased CLP 3,245 million to CLP 7,163 million mainly explained by the two reasons mentioned before. 

 

7


NET PROFIT

Q3 10  Increased CLP 1,607 million to CLP 19,569 million due mostly to higher Operating result, lower Income tax and lower Minority interest, partially compensated by lower Non operating result. 
 
2010  Decreased CLP 21,440 million to CLP 73,855 million due mostly to the absence this year of the profit related to 2009 non recurring items. 

 

8


BUSINESS UNITS HIGHLIGHTS (Exhibits 3 and 4) 

 

Business segments are reflected in the same way that each Strategic Business Unit (SBU) is managed. Corporate shared services and distribution and logistics expenses have been allocated to each SBU based on Service Level Agreements. The non-allocated corporate overhead expenses and the result of the logistics subsidiary are included in Other/Eliminations .

BEER CHILE 

 

Net sales increased 8.1% to CLP 61,014 million as a result of 6.8% higher sales volume and 2.3% higher average prices.

Operating result increased 7.1% to CLP 15,269 million, mainly as a result of higher Gross profit partially offset by higher MSD&A expenses. Gross profit increase is explained by higher Net sales partially offset by higher COGS which increased 8.4% to CLP 25,033 million. As a percentage of Net sales, COGS remained practically flat, changing from 40.9% in Q3 09 to 41.0% in Q3 10. The MSD&A expenses increased 8.8% to CLP 20,742 million due mostly to higher marketing and distribution expenses. As a percentage of Net sales, MSD&A increased from 33.8% to 34.0%. The operating margin decreased from 25.3% to 25.0%.

EBITDA increased 3.9% to CLP 18,853 million, while the EBITDA margin was 30.9% or 1.3 percentage points lower than in Q3 09.

Comments Sales have shown a dynamic which is mainly explained by consumption acceleration. Beer Chile had a price increase on its premium segment and one way packaging of 6% on August 1, which was later partially compensated by higher discount in order to remain competitive. Raw materials costs in Chilean pesos are lower this year because of a stronger peso as compared to the dollar, however one way packaging products have had a more significant growth, thus neutralizing the lower cost of malt. Due to the time lag between the acquisitions of dollar indexed raw material and the price translation into Chilean pesos at the then foreign currency exchange, and the depletion opportunity, we expect to see the full benefit of the present lower exchange rate during the Q4 10. Marketing expenses were higher due to the implementation of the new brand image of Cristal, to marketing expenses related to the Bicentennial festivities and to marketing activities in July in relation with final rounds of the South African Soccer World Cup.

BEER ARGENTINA 

 

Net sales measured in Chilean pesos increased 20.8% to CLP 31,588 million, as a result of 7.9% higher sales volumes and 12.4% higher average prices in order to partially compensate the increase in costs and expenses due to inflation.

Operating result measured in Chilean pesos increased 2.3% to CLP 1,633 million in Q3 10, as a consequence of higher Gross profit, partially compensated by higher MSD&A. Gross profit increased due to higher Net sales, partially compensated by higher COGS which increased 18.1%, to CLP 14,820 million this quarter. As a percentage of Net sales, COGS decreased from 48.0% to 46.9% in Q3 10. MSD&A expenses increased 26.5% from CLP 11,960 million to CLP 15,123 million due to inflation, unionization of sales personnel, higher distribution, sales taxes and the introduction of Schneider s new brand image. As a percentage of sales, MSD&A expenses increased from 45.7% to 47.9%. The operating margin decreased from 6.1% in Q3 09 to 5.2% in Q3 10.

9


EBITDA increased 6.8% or CLP 182 million to CLP 2,847 million this quarter, while the EBITDA margin decreased from 10.2% to 9.0%.

Comments The third quarter results were affected by the 9.7% appreciation of the Chilean peso vis a vis the Argentine peso. COGS and MSD&A increased due to inflationary pressure, mostly in expenses such as marketing, salaries, distribution costs and sales tax.

NON-ALCOHOLIC BEVERAGES 

 

Net sales increased 14.4% to CLP 50,719 million due to higher volumes of 13.2% and a 1.2% increase in the average price.

Operating result increased 71.8% to CLP 6,636 million as a consequence of higher Net sales, partially compensated by higher COGS and higher MSD&A expenses. COGS increased 12.3% to CLP 25,299 million. COGS, as a percentage of Net sales, decreased from 50.8% to 49.9%. As a consequence, gross margin increased from 49.2% to 50.1%. MSD&A increased 5.6% to CLP 18,812 million. As a percentage of Net sales, MSD&A decreased from 40.2% to 37.1% mostly due to dilution of fixed expenses. The operating margin increased from 8.7% to 13.1%.

EBITDA increased 43.6% to CLP 9,053 million and the EBITDA margin reached 17.8%, 3.6 percentage points higher than in Q3 09.

Comments Volumes had a very positive performance in all categories during the quarter, soft drinks increased 11.1%, water 15.2% and nectars 20.3%. The segment s average price increased 1.2% due to last year s September 2.1% price increase.

Conversely, the water and nectar average price decreased due to a higher mix of larger packages, which tend to have a lower price per hectoliter.

WINE 

 

Net sales increased 1.9% to CLP 37.557 million due to an increase of 3.8% in the average price in CLP partially compensated by a decrease in volume of 0.7%, excluding bulk wine. The Chile domestic volume grew 6.3%, Chile exports and Argentina s volume decreased 7.1%. The 17.3% price increase in the domestic market was the consequence of a price increase in August of 6% on average on top of the 8% increase in April and a scaling up of the sales portfolio. Exports prices increased 3% in foreign currencies which was cancelled out by the appreciation of the Chilean peso in the quarter. The Chilean currency became 6.4% stronger than the US dollar and 16.4% stronger than the Euro (approx. 30% of VSPT exports sales are in Euros, 55% in USD, 10% in Pounds and 5% in Canadian dollars).

10


Operating result decreased 25.7% from CLP 5,392 million to CLP 4,009 million in Q3 10, due mostly to higher COGS and lower exchange rate, both in dollars and Euros. COGS increased 5.8% from CLP 22,129 million to CLP 23,408 million due to the higher cost of wine. As a percentage of Net sales, COGS increased from 60.0% to 62.3%. Consequently, the gross margin decreased from 40.0% to 37.7% in Q3 10. As a percentage of Net sales, MSD&A increased from 25.8% to 27.2%. As a consequence, the operating margin decreased from 14.6% in Q3 09 to 10.7% in Q3 10.

EBITDA decreased 18.1% to CLP 5,629 million and the EBITDA margin decreased from 18.6% to 15.0%.

Comments The Company has been increasing prices in order to overcome the higher cost of wine (as raw material) and the appreciation of the Chilean peso. This, in combination with a better sales mix, has been reflected in the better average prices, and has helped to partially offset the very challenging cost and foreign exchange condition.

SPIRITS 

 

Net sales increased 16.5% to CLP 12,914 million due to 7.4% higher volume and 2.0% higher average prices.

Operating result increased 24.9% from CLP 1,807 million to CLP 2,256 million, mainly due to higher Net sales partially compensated by higher COGS and MSD&A expenses. COGS increased from CLP 5,916 million to CLP 6,806 million due to higher raw material costs and finished product inventory depletion. COGS as a percentage of Net sales decreased from 53.4% to 52.7%. MSD&A increased 14.7% to CLP 3,818 million, mostly due to higher marketing and distribution expenses. As a percentage of Net sales, MSD&A decreased from 30.0% to 29.6%. As a consequence, the operating margin increased from 16.3% to 17.5%.

EBITDA increased 19.2% from CLP 2,247 million to CLP 2,679 million and the EBITDA margin increased from 20.3% to 20.7%.

Comments The industry is showing a positive trend driven by higher volume in the Pisco category and Rum category compared to last year. The performance improvement of Pisco is mostly explained by the strengthening of our Mistral premium brand. The participation of CPCh in the Shanghai fair encouraged us to actively pursue the introduction of Pisco in Asia.

(The exhibits to follow, figures have been rounded and may not sum exactly the totals shown.)
Note: EBITDA represents Operating result plus depreciation and amortization. EBITDA is not a calculation based on generally accepted accounting principles. The amounts in the EBITDA calculation, however, are derived from amounts included in the historical statements of income data. EBITDA is presented as supplemental information because management believes that EBITDA is useful in assessing the Company s operations. EBITDA is useful in evaluating the operating performance compared to that of other companies, as the calculation of EBITDA eliminates the effects of financing, income taxes and the accounting of capital spending, which items may vary for reasons unrelated to overall operating performance. When analyzing the operating performance, however, investors should use EBITDA in addition to, not as an alternative for, operating income and net income, as those items are defined by GAAP. Investors should also note that CCU s presentation of EBITDA may not be comparable to similarly titled measures used by other companies

11


Exhibit 1: Income Statement (Third Quarter 2010)

Q3 2010  2009  2010(1)  2009(1)  VARIANCE % 
(CLP million)  (CLP million)  (US$ million)  (US$ million)   
Core revenue  188,607  169,579  390  350.6  11.2 
Other revenue  4,527  3,981  9  8.2  13.7 
Interco sales revenue  0  0  0  0.0  - 
Net sales  193,134  173,560  399.3  358.9  11.3 
Cost of goods sold  (93,796)  (83,793)  (193.9)  (173.3)  11.9 
% of net sales  48.6  48.3  48.6  48.3   
Gross profit  99,338  89,767  205.4  185.6  10.7 
MSD&A (2)  (69,996)  (62,916)  (144.7)  (130.1)  11.3 
% of net sales  36.2  36.3  36.2  36.3   
Other operating income/(expenses)  (104)  (101)  (0.2)  (0.2)  3.8 
OPERATING RESULT before NRI  29,237  26,751  60.5  55.3  9.3 
% of net sales  15.1  15.4  15.1  15.4   
Other NRI  121  0  0.3  0.0  - 
OPERATING RESULT  29,358  26,751  60.7  55.3  9.7 
% of net sales  15.2  15.4  15.2  15.4   
Net financing expenses  (1,773)  (2,702)  (3.7)  (5.6)  -34.4 
Share of profits of associates and joint ventures  401  386  0.8  0.8  3.8 
Exchange rate differences  (1,178)  413  (2.4)  0.9  -385.3 
Results of indexed units  (1,339)  1,008  (2.8)  2.1  -232.8 
Other gains/(losses)  (2,486)  (285)  (5.1)  (0.6)  771.7 
INCOME/(LOSS) BEFORE TAXES  22,984  25,571  47.3  52.9  -10.1 
Income tax  (921)  (1,159)  (1.9)  (2.4)  -20.5 
NET PROFIT FOR THE PERIOD  22,063  24,411  45.4  50.5  -9.6 
 
NET PROFIT ATTRIBUTABLE TO:           
PARENT COMPANY SHAREHOLDERS  19,569  17,962  40.2  37.1  8.9 
MINORITY INTEREST  2,493  6,449  5.2  13.3  -61.3 
 Net profit attributable to Parent Company 
 Shareholders as % of net sales 		 10.1  10.3  10.1  10.3   
Earnings per share  61.4  56.4  0.1  0.1  8.9 
Earnings per ADR  307.2  282.0  0.6  0.6  8.9 
EBITDA(3) before NRI  40,374  37,524  83.5  77.6  7.6 
% of net sales  20.9  21.6  20.9  21.6   
EBITDA(3)  40,495  37,524  83.7  77.6  7.9 
% of net sales  21.0  21.6  21.0  21.6   

 

OTHER INFORMATION           
Number of shares  318,502,872  318,502,872  318,502,872  318,502,872   
Shares per ADR  5  5  5  5   
 
 
Depreciation and Amortization  11,137  10,773  23  22.3  3.4 
Capital Expenditures  22,232  24,817  46  51.3  (10.4) 
(1) Exchange rate: US$1.00 = CLP 483.65           
(2) MSD&A refers to Marketing selling, distribution and administrative expenses         
(3) EBITDA = Operating result + Depreciation and Amortization         

 

12


Exhibit 2: Income Statement (Nine Months Ended September 30, 2010)

AS OF SEPTEMBER 2010  2009  2010(1)  2009(1)  VARIANCE % 
(CLP million)  (CLP million)  (US$ million)  (US$ million)   
Core revenue  575,397  531,302  1,190  1,098.5  8.3 
Other revenue  12,137  13,680  25  28.3  -11.3 
Interco sales revenue  0  0  0  0.0  - 
Net sales  587,533  544,982  1,214.8  1,126.8  7.8 
Cost of goods sold  (272,737)  (262,029)  (563.9)  (541.8)  4.1 
% of net sales  46.4  48.1  46.4  48.1   
Gross profit  314,797  282,953  650.9  585.0  11.3 
MSD&A (2)  (210,617)  (188,803)  (435.5)  (390.4)  11.6 
% of net sales  35.8  34.6  35.8  34.6   
Other operating income/(expenses)  238  (972)  0.5  (2.0)  -124.5 
OPERATING RESULT before NRI  104,417  93,178  215.9  192.7  12.1 
% of net sales  17.8  17.1  17.8  17.1   
Other NRI  6,791  0  14.0  0.0  - 
OPERATING RESULT  111,208  93,178  229.9  192.7  19.3 
% of net sales  18.9  17.1  18.9  17.1   
Net financing expenses  (6,145)  (7,851)  (12.7)  (16.2)  -21.7 
Share of profits of associates and joint ventures  627  840  1.3  1.7  -25.3 
Exchange rate differences  (1,139)  374  (2.4)  0.8  -404.4 
Results of indexed units  (4,016)  5,243  (8.3)  10.8  - 
Other gains/(losses)  146  22,131  0.3  45.8  - 
INCOME/(LOSS) BEFORE TAXES  100,681  113,916  194.1  235.5  -11.6 
Income tax  (19,664)  (8,214)  (40.7)  (17.0)  139.4 
NET PROFIT FOR THE PERIOD  81,017  105,702  153.5  218.6  -23.4 
 
NET PROFIT ATTRIBUTABLE TO:           
PARENT COMPANY SHAREHOLDERS  73,855  95,294  138.7  197.0  -22.5 
MINORITY INTEREST  7,163  10,407  14.8  21.5  -31.2 
Net profit attributable to Parent Company 
Shareholders as % of net sales 		 12.6  17.5  11.4  17.5   
Earnings per share  231.9  299.2  0.4  0.6  -22.5 
Earnings per ADR  1,159.4  1,496.0  2.2  3.1  -22.5 
EBITDA(3) before NRI  137,156  125,573  283.6  259.6  9.2 
% of net sales  23.3  23.0  23.3  23.0   
EBITDA(3)  143,947  125,573  297.6  259.6  14.6 
% of net sales  24.5  23.0  24.5  23.0   

 

OTHER INFORMATION           
Number of shares  318,502,872  318,502,872  318,502,872  318,502,872   
Shares per ADR  5  5  5  5   
 
DEPRECIATION  32,739  32,395  68  67.0  1.1 
Capital Expenditures  48,157  50,838  100  105.1  (5.3) 
(1) Exchange rate: US$1.00 = CLP 483.65           
(2) MSD&A refers to Marketing selling, distribution and administrative expenses         
(3) EBITDA = Operating result + Depreciation and Amortization         

 

13


Exhibit 3: Segment Information - Third Quarter 2010

Q3  Beer Chile  Beer Argentina  Non-Alcoholic  Wines  Spirits  Other/eliminations  Total 
(CLP million)  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009 
Core revenue  60,250  55,131  31,372  25,863  49,697  43,380  35,617  34,547  11,671  10,658  0  0  188,607  169,579 
Other revenue  609  768  199  275  292  143  1,936  2,323  720  150  770  321  4,527  3,981 
Interco sales revenue  154  529  16  17  731  813  4  4  524  280  (1,429)  (1,643)  0  0 
Net sales  61,014  56,428  31,588  26,155  50,719  44,337  37,557  36,874  12,914  11,088  (659)  (1,322)  193,134  173,560 
variance %  8.1    20.8    14.4    1.9    16.5        11.3   
Cost of goods sold  (25,033)  (23,084)  (14,820)  (12,548)  (25,299)  (22,525)  (23,408)  (22,129)  (6,806)  (5,916)  1,571  2,410  (93,796) (83,793) 
% of net sales  41.0  40.9  46.9  48.0  49.9  50.8  62.3  60.0  52.7  53.4      48.6  48.3 
Gross profit  35,981  33,343  16,767  13,607  25,420  21,812  14,149  14,745  6,108  5,171  913  1,088  99,338  89,767 
MSD&A (1)  (20,742)  (19,068)  (15,123)  (11,960)  (18,812)  (17,808)  (10,227)  (9,529)  (3,818)  (3,329)  (1,273)  (1,223)  (69,996) (62,916) 
% of net sales  34.0  33.8  47.9  45.7  37.1  40.2  27.2  25.8  29.6  30.0      36.2  36.3 
Other operating income/(expenses)  31  (23)  (11)  (51)  28  (142)  87  176  (34)  (35)  (204)  (26)  (104)  (101) 
OPERATING RESULT before NRI(2)  15,269  14,253  1,633  1,597  6,636  3,863  4,009  5,392  2,256  1,807  (564)  (160)  29,237  26,751 
variance %  7.1    2.3    71.8    -25.7    24.9        9.3   
% of net sales  25.0  25.3  5.2  6.1  13.1  8.7  10.7  14.6  17.5  16.3      15.1  15.4 
NRI  0  0  0  0  0  0  0  0  0  0  121  0  121  0 
OPERATING RESULT  15,269  14,253  1,633  1,597  6,636  3,863  4,009  5,392  2,256  1,807  (443)  (160)  29,358  26,751 
variance %  7.1    2.3    71.8    -25.7    24.9        9.7   
% of net sales  25.0  25.3  5.2  6.1  13.1  8.7  10.7  14.6  17.5  16.3  67.3  12.1  15.2  15.4 
EBITDA before NRI(2)  18,853  18,151  2,847  2,665  9,053  6,306  5,629  6,876  2,679  2,247  1,312  1,279  40,374  37,524 
variance %  3.9    6.8    43.6    -18.1    19.2        7.6   
% of net sales  30.9  32.2  9.0  10.2  17.8  14.2  15.0  18.6  20.7  20.3      20.9  21.6 
EBITDA  18,853  18,151  2,847  2,665  9,053  6,306  5,629  6,876  2,679  2,247  1,433  1,279  40,495  37,524 
variance %                          7.9   
% of net sales                          21.0  21.6 
 
Q3  Beer Chile  Beer Argentina(3)  Non- alcoholic(4)  Wine(5)  Spirits  Other/eliminations  Total 
VOLUMES(HL)  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009 
SEGMENT VOLUME  1,091,742  1,021,976  845,664  783,910  1,494,664  1,319,893  339,332  341,696  60,674  56,513      3,832,075  3,523,988  
variance %  6.8    7.9    13.2    -0.7    7.4        8.7   
          SOFT DRINKS  CHILE DOMESTIC         
          989,145  890,274  172,703  162,411         
variance %          11.1    6.3           
          NECTAR  CHILE EXPORTS         
          245,701  204,156  145,174  150,212         
variance %          20.3    -3.4           
          WATER  ARGENTINA         
          259,818  225,463  21,454  29,072             
variance %          15.2    -26.2               
(1) MSD&A refers to Marketing selling, distribution and administrative expenses                  
(2) NRI refers to Non-recurring items                  
(3) Excludes exports to Chile of 2,468 Hl and 3,049 Hl in 2010 and 2009 respectively                  
(4) Includes softdrink (sofdrink, tea , sports and energetic drinks) , nectars and water (purified and mineral)                   
(5) Excludes bulk wine of 23,174 Hl and 43,832 Hl in 2010 and 2009 respectively                  
 
Q3  Beer Chile  Beer Argentina  Non-Alcoholic  Wines  Spirits  Other/eliminations  Total 
AVE. PRICES (CLP/Hl)  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009 
SEGMENT AVE. PRICE  55,187  53,945  37,098  32,992  33,249  32,866  104,963  101,106  192,348  188,596      49,218  48,121 
variance %  2.3    12.4    1.2    3.8    2.0        2.3   
          SOFT DRINKS  CHILE DOMESTIC         
          32,266  31,733  77,514  66,069         
variance %          1.7    17.3           
          NECTAR  CHILE EXPORTS         
          43,312  43,481  131,002  133,618         
variance %          -0.4    -2.0           
          WATER  ARGENTINA             
          27,479  27,732  149,713  128,847             
variance %          -0.9    16.2               

 

14


Exhibit 4: Segment Information - Nine Months September 30, 2010

AS OF SEPTEMBER  Beer Chile  Beer Argentina  Non-Alcoholic  Wines  Spirits  Other/eliminations  Total 
(CLP million)  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009 
Core revenue  193,587  187,451  102,360  92,500  153,856  138,705  95,971  85,224  29,623  27,422  0  0  575,397  531,302 
Other revenue  1,961  2,271  1,150  1,413  793  720  4,677  7,088  1,075  342  2,481  1,847  12,137  13,680 
Interco sales revenue  1,373  1,671  2,166  56  2,402  2,779  10  15  1,030  372  (6,981)  (4,893)  0  0 
Net sales  196,921  191,393  105,676  93,968  157,051  142,204  100,658  92,327  31,728  28,136  (4,501)  (3,046)  587,533  544,982 
variance %  2.9    12.5    10.4    9.0    12.8        7.8   
Cost of goods sold  (79,241)  (81,966)  (46,449)  (42,505)  (76,037)  (72,085)  (62,898)  (57,717)  (16,528)  (14,651)  8,417  6,896  (272,737) (262,029) 
% of net sales  40.2  42.8  44.0  45.2  48.4  50.7  62.5  62.5  52.1  52.1      46.4  48.1 
Gross profit  117,680  109,427  59,227  51,463  81,014  70,118  37,761  34,610  15,200  13,485  3,916  3,850  314,797  282,953 
MSD&A (1)  (63,140)  (58,779)  (46,092)  (39,821)  (58,163)  (54,743)  (28,534)  (25,226)  (10,328)  (8,478)  (4,360)  (1,756)  (210,617) (188,803) 
% of net sales  32.1  30.7  43.6  42.4  37.0  38.5  28.3  27.3  32.6  30.1      35.8  34.6 
Other operating income/(expenses)  267  (382)  (12)  (30)  160  (388)  112  206  (35)  (59)  (254)  (318)  238  (972) 
OPERATING RESULT before NRI(2)  54,807  50,265  13,123  11,612  23,011  14,987  9,338  9,591  4,837  4,947  (698)  1,776  104,417  93,178 
variance %  9.0    13.0    53.5    -2.6    -2.2        12.1   
% of net sales  27.8  26.3  12.4  12.4  14.7  10.5  9.3  10.4  15.2  17.6      17.8  17.1 
NRI  0  0  0  0  0  0  0  0  0  0  6,791  -  6,791  - 
OPERATING RESULT  54,807  50,265  13,123  11,612  23,011  14,987  9,338  9,591  4,837  4,947  6,092  1,776  111,208  93,178 
variance %  9.0    13.0    53.5    -2.6    -2.2        19.3   
% of net sales  27.8  26.3  12.4  12.4  14.7  10.5  9.3  10.4  15.2  17.6      18.9  17.1 
EBITDA before NRI(2)  65,476  61,229  16,700  15,085  30,015  22,123  14,194  14,900  6,098  6,243  4,673  5,992  137,156  125,573 
variance %  6.9    10.7    35.7    -4.7    -2.3        9.2   
% of net sales  33.2  32.0  15.8  16.1  19.1  15.6  14.1  16.1  19.2  22.2      23.3  23.0 
EBITDA  65,476  61,229  16,700  15,085  30,015  22,123  14,194  14,900  6,098  6,243  11,464  5,992  143,947  125,573 
variance %                          14.6   
% of net sales                          24.5  23.0 
 
AS OF SEPTEMBER  Beer Chile  Beer Argentina(3)  Non- alcoholic(4)  Wine(5)  Spirits  Other/eliminations  Total 
VOLUMES (HL)  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009 
TOTAL SEGMENT  3,526,842  3,476,043  2,806,317  2,660,911  4,664,140  4,206,058  931,024  811,333  153,905  143,894      12,082,227  11,298,239
variance %  1.5    5.5    10.9    14.8    7.0        6.9   
          SOFT DRINKS  CHILE DOMESTIC         
          3,070,192  2,797,728  438,990  387,768         
variance %          9.7    13.2           
          NECTAR  CHILE EXPORTS         
          659,932  567,147  435,673  368,240         
variance %          16.4    18.3           
          WATER  ARGENTINA             
          934,016  841,184  56,361  55,325             
variance %          11.0    1.9               
(1) MSD&A refers to Marketing selling, distribution and administrative expenses                       
(2) NRI refers to Non-recurring items                      
(3) Excludes exports to Chile of 80,952 Hl and 11,260 Hl in 2010 and 2009 respectively                       
(4) Includes softdrink (sofdrink, tea , sports and energetic drinks) , nectars and water (purified and mineral)                   
(5) Excludes bulk wine of 51,898 Hl and 88,745 Hl in 2010 and 2009 respectively                       
 
AS OF SEPTEMBER  Beer Chile  Beer Argentina  Non-Alcoholic  Wines  Spirits  Other/eliminations  Total 
AVE. PRICES (CLP/Hl)  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009  2010  2009 
SEGMENT AVE. PRICE  54,890  53,927  36,475  34,762  32,987  32,977  103,081  105,042  192,473  190,573      47,623  47,025 
variance %  1.8    4.9    0.0    -1.9    1.0        1.3   
          SOFT DRINKS  CHILE DOMESTIC         
          32,393  32,153  72,584  68,113         
variance %          0.7    6.6           
          NECTAR  CHILE EXPORTS         
          44,086  44,167  128,647  138,769         
variance %          -0.2    -7.3           
          WATER  ARGENTINA         
          27,096  28,175  142,991  139,380             
variance %          -3.8    2.6               

 

15


Exhibit 5: Balance Sheet

  September 30  December 31  September 30  Decem ber 31  % 
  2010  2009  2010  2009  Change 
ASSETS  (CLP million)  (CLP million)  (US$ million)(1)  (US$ million)(1)   
Cash and cash equivalents  123,872  137,354  256  284  -9.8% 
Other current assets  276,75 0  271,033  572  560  2.1% 
Total current assets  400,623  408,387  828  844  -1.9% 
PP&E (net)  505,164  488,447  1,044  1,010  3.4% 
Other non current assets  189,702  206,882  392  428  -8.3% 
Total non current assets  694,866  695,329  1,437  1,438  -0.1% 
Total assets  1,095,489  1,103,716  2,265  2,282  -0.7% 
 
LIABILITIES           
Loa ns and other liabilities  8,833  21,051  18  44  -58.0% 
Other liabilities  187,05 3  224,025  387  463  -16.5% 
Total current liabilities  195,886  245,076  405  507  -20.1% 
Loans and other liabilities  220,061  211,839  455  438  3.9% 
Other liabilities  75,966  73,595  157  152  3.2% 
Total non current liabilities  296,028  285,435  612  590  3.7% 
Total Liabilities  491,914  530,509  1,017  1,097  -7.3% 
 
EQUITY           
Paid-in capital  231,020  231,020  478  478  0.0% 
Other reserves  (33,286)  (25,194)  (69)  (52)  0.0% 
Retained earnings  293,332  256,404  606  530  14.4% 
Net equity attributable to parent company shareholders  491,065  462,230  1,015  956  6.2% 
Minority interest  112,50 9  110,977  233  229  1.4% 
Total equity  603,575  573,207  1,248  1,185  5.3% 
Total equity and liabilities  1,095,489  1,103,716  2,265  2,282  -0.7% 
 
OTHER FINANCIAL INFORMATION           
 
Total financial debt  228,895  232,890  473  482  -1.7% 
 
Net debt (2)  105,022  95,537  217  198  9.9% 
 
Liquidity ratio  2.05  1.67       
Financial Debt / Capitalization  0.27  0.29       
Net debt / EBITDA (3) 0.53  0.53       
(1) Exchange rate: US$1.00 = CLP 483.65           
(2) Total financial debt minus cash & cash equivalents           
(3) Last 12 months of EBITDA.           

 

16

 

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/ Ricardo Reyes       

                                                                                    Chief Financial Officer

Date: November  9, 2010