Good day, and welcome to the CCU's 4Q '21 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Claudio Las Heras, Head of Investor Relations. Please go ahead.

Welcome, everyone, and thank you for attending CCU's Fourth Quarter 2021 Conference Call. Today with me are Felipe Dubernet, Chief Financial Officer; and [ Carlos Anvantor ], Financial Planning and Investor Relations Manager. You have received a copy of the company's consolidated fourth quarter 2021 results. Felipe will now review our overall performance, and we will then move on to a question-and-answer session. Before we begin, please take note of our cautionary statement. Statements made in this call 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. These statements should be taken in conjunction with the additional information about risks and uncertainties set forth in CCU's annual report in Form 20-F filed with the U.S. Securities and Exchange Commission and in the annual report submitted to the CMF and available on our website. It is now my pleasure to introduce Felipe Dubernet.

Thank you, Claudio, and thank you all for joining us today. In 2021, CCU continued operating under regional plan in the context of the pandemic, focusing on 3 priorities: the safety of our people, operation continuity and financial sense. In terms of our performance, we posted a positive year by gaining business scale and exceeding pre-pandemic results in spite of significant cost pressure in raw materials. As a fact, in terms of volume, we reached 34.7 million hectoliters, growing 13% versus 2020, explained by higher consumption, the recovery of consumer occasions and a solid sales execution. In terms of financial results, in EBITDA, we post a 50.1% increase versus last year, while EBITDA margin grew to 17.9%. The latter was driven by higher volumes, the implementation of revenue management initiatives, the premiumization of our portfolio and efficiencies from the ExCCelencia CCU program as our MSD&A expenses over net sales improved by 244 basis points. In terms of net income, we recorded CLP 199,163 million, expanding 107.1% versus 2020 figures. As for financial health, we ended 2021 with a net financial debt over EBITDA of 0.74 after having paid a nonrecurring dividend of CLP 165,168 million in December 2021. In addition, to ensure liquidity, in January 2022, we issued USD 600 million, a 10-year bond, in the international market for general corporate purposes with a yield to maturity of 3.365%. Regarding the fourth quarter of 2021, CCU continued delivering growth in volumes and financial results. Our revenue -- our revenues expanded 37.1% due to a 5.3% growth in volumes and 30.3% higher average prices in Chilean pesos. The expansion in volumes was explained by higher consumption, our solid brand equity and excellence in sales execution. The better prices in Chilean pesos were mainly due to positive mix effects, revenue management initiatives…

[Operator Instructions] And we'll go ahead and take the first question.

Can you hear me?

Yes.

Fernando Olvera from Bank of America. I have two, both of them are related to Chile. And a third one. Can you comment what was the volume performance between alcoholic and nonalcoholic beverages during the quarter? And how do you expect volumes to behave this year given the tough comparison you will face? And the second question is how much room do you see for further price increases in Chile? And how do you expect margins to behave in coming quarters as cost inflation keeps mounting?

Yes. Fernando, thank you for your question regarding Chile. What I can say, overall, you are right, we have a good volume growth in Chile, especially led by a very good growth of premium beers. And nonalcoholic also grew. And the rest of the portfolio also grew. However, in the case of beer, we had a very high comparison base, especially for mainstream, compared to the fourth quarter of 2020, let's say. But overall, we saw growth in all categories. We saw more growth in premium beers, in liquors and non-alcoholic unless and is -- where the drivers for the volume growth in Chile. How we saw 2022, we don't do too much -- we don't do at all forward-looking. But I think still we are seeing that at least we will maintain the scale, I would say, especially in the first semester. The second semester is too far away to do a prediction. Still, there is liquidity among the consumers. And we see that we will still see, at least for the first semester, a very good growth. But as I said, it's difficult to do forward looking, especially with the volatility that we are seeing in the world, I would say. Prices increases, as we have stated in the -- in our earnings release, of course, we need to compensate an impact of such magnitude in raw materials, that also if we look recent events, let's say with an oil jumping to $100 per barrel today, I would say we need to do more effort in revenue management. But it takes time, and I think you need to bear in mind that scale is also important for this kind of businesses. So we will continue to do revenue management efforts, but not only price would -- we are willing to compensate this impact of raw materials, but also efficiencies. So we will work in both revenue management and efficiencies, Fernando.

And we'll go ahead and take the next question.

I have a quick question on Colombia. Can you give us more visibility on the drivers behind such strong results coming from there? And how is the competitive and pricing environment as well?

Thank you, Marcella. Marcella, right?

Yes. Yes.

I recognize your voice. So -- so yes, we experienced, as you saw, a very high growth in the last quarter. And we reached for the first time in December double-digit market share. I think there is a very good sales execution, also in brand equity, as brand equity of Heineken -- especially in Heineken, but also Andina is growing. So -- and as a consequence, we experienced such very good growth and market share gains in the Colombian market. So -- and this trend continue right now also. So I would say that the keys for the growth should be, as I said, these 2 dimensions: brand equity and sales execution, jointly with having to ensure supply and also distribution with our Postobon partners.

[Operator Instructions] We'll go ahead and take the next question.

Can you hear me?

Yes.

This is Ulysees [indiscernible] from JPMorgan. Actually, we had a couple. Maybe one tying back to the response you were given to the first question there from Fernando. But how much more efficiencies can we expect, let's say, in the next year's share from the ExCCelencia CCU program? Obviously, MSD&A has been performing really well, so maybe just getting a sense on how we should think about that in the coming years. And then the second one, if I may, elaborate a little bit on maybe the CapEx outlook that you have for the year and dig deeper on how capacity utilization is currently running across your operations, if there's any constraints and the need for reinvestment there.

Thank you, Fernando -- Ulysees , excuse me, for your question. Regarding efficiencies, as I mentioned, we'll continue to suffer a lot from cost pressure. So efficiencies are more than welcome. So we will continue seeking efficiencies through an enhanced ExCCelencia CCU program. In fact, we are turning this program into a transformation program. So -- and this has to do with -- also with innovation, to get more efficiencies. Because the ExCCelencia CCU program we launched in 2015, and it has been very successful in order to compensate all the external effects that we have year after year in order to protect our margins. So in fact, we are launching this enhanced ExCCelencia CCU program that now we will be calling our transformation program, that this will allow to get further efficiencies. And as an example, this program now is with new technologies, such as, for example, artificial intelligence in both sales, for example, logistics, in order to get a new generation of efficiencies that will allow us to keep bringing these into our P&L, let's say. So now we are relaunching the efficiency program. In terms of CapEx, usually, we have been investing in the last year over depreciation 1.2, 1.3. But I would say in the last year or 1.5 years, given the volumes increase in per capita consumption, also shift in packaging in the portfolio, we are mainly investing in new capacity, especially in 2021, and we will continue to do this for 2022. We are finalizing the final figures that usually we publish in the 20-F report and the annual report now in March and in April. But what I can see, that we are focusing on capacity increases in practically all the categories, but especially in beer, but also in nonalcoholic beer in Chile and in Paraguay and in Argentina. And nonalcoholic, especially in Chile. So in terms of capacity utilization, yes, this is the reason why we are starting investing, because we think that we are reaching a level that we need to further invest in capacity.

And we'll go ahead and take the next question.

This is Felipe Ucros Nunez from Scotiabank. Felipe, congrats on the results once again. I wanted to focus a little bit on Colombia. Obviously, you've achieved amazing results, very hard to break into a monopoly market like you guys have done. And obviously, quite the mark achieving positive EBITDA for the year. What are your plans going forward for the next few years in Colombia? Are you expecting to get to positive profitability in the next couple of years? I'm just wondering what your plans are in terms of utilization as well now that you've gotten to 2 million hectoliters. So that's the first question. And the second one relates to dividends for the year. Obviously, you had an extraordinary dividend in 2021. So just wondering how we should think about the plans for 2022.

Thank you, Felipe, especially for congratulating us. It was, in fact, a very encouraging 20201 year with many challenges, but at the end of the day, we have delivered a solid result. Regarding Colombia, yes, it's always difficult to break a monopoly. But I think we have the tools in order to continue our progress there. We have the distribution, thanks to our partners of Postobon. But also, as I mentioned, brand equity is key, and we work a lot on that. We don't discount our brands. It's a gradual work in order that our brands to be the preferred brands for the Colombian consumers. Also, it was a very good year in terms of per capita consumption in Colombia, and this helped us in order to have more funds in order to build our scale there. This year was very good as we reached positive EBITDA, as we mentioned in our release. We reached more than 2 million hectoliters. We asked -- since the beginning of the project, our aim with this first plant or brewery we built in the Bogota region was to reach 3 million hectoliters. And I think we are in the right path to do this. And with 3 million hectoliters, we will post -- surely, we are in the way to post positive net income. The point is that we are facing challenges, as the rest of the world, in terms of input costs. But given the recent events, right, since raw material cost, oil, but not only oil, but also rains, our margins would be compressed in the short term. But we need to take the measures, as I mentioned, as we're taking in the other markets. But we are very happy, especially towards the end of the year, with the evolution of our beer volumes in Colombia. Regarding dividends, as you know, by the corporate rules, let's say, this would be proposed the second week of March to the shareholders in order then to decide by mid-April. So I do not have any guidance so far for the definitive dividend coming forward. And as you mentioned, we paid an extraordinary dividend end of December -- beginning of December.

[Operator Instructions] We will go ahead and take the next question.

This is [indiscernible] from [indiscernible]. My question is if you can provide a further breakdown of the [indiscernible] inflation accounting adjustment in Argentina that results in a triple-digit increase in average prices in international business.

Yes. I will not -- hyperinflation is sometimes a little bit difficult to understand. But what I can say is the following. Inflation level in Argentina or inflation, let's say, valuation in Argentina during last year was much higher than devaluation variation, let's say, okay? And at the same time, the translation to Chilean pesos make it more favorable the conversion of the results into Chilean pesos. And at the same time, and that this is very important, because we were able to increase the prices in line with inflation. So all in, and you take especially and where it makes -- it matters the hyperinflation accounting, is that you take for conversion purposes the exchange rate of the last day of the year. So that means that this was very favorable for the conversion of the Argentinian results into Chilean pesos as the Chilean pesos devaluate against the Argentinian peso. So but what I would -- but on top of hyperinflation accounting that you could experience this kind of conversion that is favorable, what I would say is that by increasing the prices in line with inflation is key. Because otherwise, our P&L would suffer in Argentina if we are not able to increase prices. Okay, Paulina?

And we'll go ahead and take the next question.

This is Ulysees from JPMorgan once again. So the follow-up question that I had was related to raw material costs. So how are you seeing this cost shaping up for you into 2022? And does the kind of current volatility and what we saw last year make you reassess that policy of not hedging or not covering there on the raw material side of things?

Yes. We -- as you mentioned, we don't hedge our flows. We don't the hedge raw materials. And today will not be a good day to do hedge on raw material at all. But it would never be the case of CCU as we don't hedge. Raw material trends, raw material -- commodity price has been increasing for a while. Now we are seeing further movements, unfavorable movements given the world situation with the Ukraine war or crisis. So it's very volatile, very complicated. And I would say it should be a big concern for us in terms of cost inflation for right now. But it's difficult to do a forward looking what would be the level. Today, we saw increases in oil prices, but also in rains, as I mentioned, and this certainly would impact. The only positive thing I would say today is that we are -- but this -- is little compared to the rest of the weight that it has in our cost is that we expect a normal wine harvest for this year in Chile. Not in Argentina as we experience rains. So -- but we saw a very volatile, very, I would say, bullish commodity market as we experienced in 2021.

We'll go ahead and take the next question.

This is Fernando Olvera from Bank of America. I just have one more question regarding the wine business. Can you comment how are you dealing with the glass bottle supply disruption in Argentina and how you expect volumes in the division perform going ahead?

Yes, the bottle disruption supply in Argentina was a very, let's say, a very sad event, that had one supplier in Mendoza. We expect that the supply will be normalized by the second semester, completely normalized by the second semester. We are experiencing shortages there. So -- and the supply has been disrupted. So this is the information I can give you in that sense. So -- and suffering not only wine but also the beer categories. So in wine it's more difficult, as practically -- especially for exports, is depending on glass supply. For beer, it's less relevant because you can sell domestic beer in cans and there is enough capacity. So the problem is affecting more the wine business.

And at this time, there are no further questions.

Okay. Thank you, everybody, for attending this call. In 2021, as I mentioned, we posted a positive year in the development of our strategy by expanding business scale, market share and exceeding pre-pandemic results in spite of a challenging and inflationary scenario. For 2022, we will continue to reinforce our 3 priorities that we had during the pandemic, the safety of our people, operation continuity and financial health, as well as concentrate our effort in strengthening our portfolio of brands, gaining business scale and implementing revenue management initiatives and efficiencies in a scenario of higher cost of raw material, exchange rate headwinds and inflation. Finally, I would like to thank all CCU employees, as for their effort and dedication, we have been able to overcome a particularly challenging period in the last 2 years due to the pandemic. We need to continue taking care of each other and work united to create experiences for sharing together a better life. I wish you a wonderful rest of the day.

Thank you. And that does conclude today's conference. We do thank you for your participation. Have an excellent day.