COMPAÑÍA CERVECERÍAS UNIDAS S.A. ANNUAL REPORT
2023
Content
2023 Highlights | 14 | |
2023 Performance | 17 | |
2.3 | Ownership | 25 |
2.3.1 Controlling group | 25 | |
2.3.2 Significant changes in ownership or control | 25 | |
2.3.3 Identification of partners or majority shareholders | 26 | |
2.3.4 Shares, their attributes and rights | 27 | |
2.3.5 Other Securities | 28 | |
3. Corporate Governance | 29 | |
3.1 | Governance framework | 29 |
3.2 | Board of Directors | 32 |
Management of the Board of Directors | 32 | |
Matrix of knowledge and experience of the Board of Directors | 35 | |
Responsibility Statement | 39 | |
Board of Directors' Compensation | 40 | |
Field visits | 43 | |
3.3 | Board Committees | 44 |
3.4 | Senior executives | 49 |
3.5 | Adherence to national or international codes | 52 |
3.6 | Risk management and Internal Control | 53 |
3.6.1 Risk Management | 53 | |
3.6.2 Internal Controls | 62 | |
3.7 | Relationship with Stakeholders and the General Public | 64 |
4. Strategy | 72 |
4.1 Time horizons | 72 |
4.2 Strategic objectives | 73 |
Strategic Plan 2022 - 2024 | 73 |
4.3 Investment plans | 74 |
4.4 Sustainability | 75 |
Performance of the Sustainability Management Model in 2023 75 | |
People who move us | 75 |
Planet we care for | 79 |
Brands that inspire us | 88 |
Sustainability Strategy Update | 92 |
5. People | 96 | |
5.1 | 2023 Employees | 97 |
5.1.1 By gender | 97 | |
5.1.2 By nationality | 98 | |
5.1.3 By age range | 99 | |
5.1.4 By seniority | 99 | |
5.1.5 People with disabilities | 100 | |
5.2 | Type of contract | 100 |
5.3 | Work adaptability | 100 |
2023 Annual Report | 1 |
5.4 | Salary equity by gender | 100 |
5.4.1 Gender equality policy | 100 | |
5.4.2 Salary gap | 101 | |
5.5 | Workplace and sexual harassment | 101 |
5.6 | Occupational Safety | 102 |
5.7 | Maternity leave | 104 |
5.8 | Training and benefits for employees | 105 |
5.9 Outsourcing Policy | 113 | |
5.10 Work Environment, identification of skills and knowledge | 113 | |
5.10.1 Performance management | 113 | |
5.10.2 Upward evaluation | 114 | |
5.10.3 Recruitment and selection | 114 | |
5.10.4 Internal mobility and promotion | 115 | |
5.10.5 Talent management | 115 | |
5.10.6 Organizational climate | 115 |
6. Business model | 116 | |
6.1 | Industrial Sector | 116 |
Competition | 116 | |
Regulatory Framework | 118 | |
National or foreign regulatory entities | 123 | |
Memberships and affiliations | 129 | |
6.2 | Business | 135 |
Operating Segments | 136 | |
Joint Ventures and associated companies | 138 | |
Marketing, distribution & sales | 139 | |
Licensing and Contracts | 140 | |
6.3 | Stakeholder Relations | 142 |
6.4 Properties and Plants | 142 |
Operational excellence in our plants and distribution centers | 143 |
6.5 Subsidiaries, associates and investments in other companies | 144 |
2023 Structure | 145 |
7. Suppliers | 146 | |
7.1 | Vendor payments | 146 |
7.2 | Suppliers' evaluation | 147 |
8. Indicators | 149 | |
8.1 | Legal and regulatory compliance | 149 |
8.1.1 In relation to our clients | 149 | |
8.1.2 In relation to our employees | 149 | |
8.1.3 Environmental | 150 | |
8.1.4 Antitrust | 150 | |
8.2 | Sustainability indicators by industry type (SASB) | 151 |
9. Relevant or material Event | 154 | |
10. Comments from shareholders and the | ||
Directors' Committee | 157 | |
11. Financial Reports | 157 | |
12. Exhibits | 158 | |
General Information | 158 | |
GRI Index | 159 | |
Subsidiaries and Affiliated Companies (Associates and Joint | ||
Ventures) of Compañía Cervecerías Unidas S.A. | 162 |
2023 Annual Report | 2 |
Message from the Chairman of the Board
Dear Shareholders:
I am pleased to share with you the annual report and the consolidated financial statements of Compañía Cervecerías Unidas S.A. (CCU) and its subsidiaries for the year 2023.
For the first time in the 33 years that I have been part of CCU, I have the immense honor of addressing you as Chairman of the Board, after having been CEO between 1991 and 1998 and a member of the Board for the last two and a half decades. I do so with deep gratitude for the trust placed in me, an awareness of the responsibility that this entails and a commitment to continue the successful strategy and business model of this great company, which thousands of people have built over time and was led until December 2023 by Andrónico Luksic Craig.
During the 10 years that he led the company to which he had contributed since 1986 as a member of the Board, Andrónico Luksic left an invaluable mark of passion and commitment to CCU, its employees, customers, consumers and communities. Since 2013, under his leadership, the company significantly increased its regional presence, deepened and added alliances with strategic partners, strengthened its financial position, grew in investments and improved its results, while reinforcing its deep commitment to sustainability. Today, CCU is a multi-category beverage company with a presence in six countries in South America and is vigorously advancing in its purpose of creating experiences to share a better life together.
On this journey, the progress made during the decade in which the company was led by Andrónico Luksic is evident.
Regarding regional expansion, CCU entered Paraguay, Bolivia and Colombia in its expansion across the continent, joining Argentina, Uruguay and, of course, Chile. The company's entry into Paraguay was completed in 2013 through the acquisition of close to 50% of Bebidas del Paraguay S.A. and Distribuidora del Paraguay S.A., stakes that the company increased to close to 55% at the beginning of 2023 and up to 100%, after Sudameris Bank exercised the put option established
Francisco Pérez Mackenna
Chairman of the Board
in the agreements. CCU entered the Bolivian market in 2014 through a partnership with Grupo Monasterio, acquiring 34% of Bebidas Bolivianas S.A., which the company increased to 51% in 2018. In the case of Colombia, CCU's entry was achieved through a series of agreements signed with Grupo Postobón, which allowed the company to enter a country of more than 50 million inhabitants, through a joint venture to produce beer and malt-based beverages in a market until then dominated almost 100% by a single multinational company. To compete vigorously, the company built a 3-million-hectoliter plant on the outskirts of Bogota, which was officially opened in 2019, the same year the company launched the Andina beer brand there.
Regarding partners and strategic alliances, during the decade headed by Andrónico Luksic, CCU strengthened its relationship with PepsiCo, increasing the duration of the licenses for the production of its brands in Chile and being recognized as the best bottler in the world on one occasion and twice being named the best bottler in the region. Furthermore, in 2015, CCU entered the powdered beverage industry through a partnership with Empresas Carozzi and added some Molson Coors Brewing Company brands to its portfolio in the Chilean, Argentinean and Colombian beer markets.
corporativoGobierno 3
Estrategia 4
Personas 5
Modelo de 6 negocios
Gestión de 7 proveedores
Indicadores 8
Hechos 9
relevantes o esenciales
Comentarios 10 de accionistas
y del Comité de Directores
Informe 11
Financiero
Message from the Chairman of the Board | 2023 Annual Report | 3 |
Anexos 12
In 2016, in Chile, the company added Red Bull as a strategic partner, expanding its offering in the growing energy drink industry. In 2022, the company entered the mineral and flavored water category in Argentina through a joint venture with Danone, enabling CCU to strengthen its presence in the country's multi-category segment. Additionally, in 2023, CCU celebrated 20 years of strategic alliance with Heineken, which is today the second largest brewer in the world and a shareholder of CCU in partnership with Quiñenco. This has undoubtedly been a successful long-term alliance for CCU, which has allowed the company to offer its customers and consumers a wide range of Heineken products.
With respect to the evolution of the strengthening of the company's financial profile, there are two milestones that mark these 10 years. In 2013, CCU carried out a successful capital increase for CLP 331,719 million, with new shares placed both in the local market and also in the United States and other countries through ADRs. At the debt level, in 2022, the company issued for the first time in its history an international bond for USD 600 million for 10 years, obtaining favorable financial conditions. These achievements have been key factors in sustaining the Company's growth.
In the area of investments, between 2013 and 2023, CCU invested near to USD 2,500 million in the region, contributing to the development of the countries where it operates. Among the most noteworthy projects is the "CCU Renca" project in Chile, which includes a new distribution center and a new non-alcoholic beverage plant in that municipality, and the Company significantly increased its beer production capacity in Chile and Argentina. In addition, the Company upgraded its regional technology platforms, launched modern sales platforms for consumers and customers, such as "La Barra" and "Mi Carro", and implemented artificial intelligence tools to strengthen the sales process.
These and other achievements have been reflected in the Company's results. Between 2014 and 2023, the Company paid dividends to its shareholders in the amount of CLP 1,067,421 million, equivalent to USD 1,477 million. In addition, during the same period, consolidated volumes grew from 22.9 million hectoliters to 33.1 million hectoliters, revenues from CLP 1,297,966 million to CLP 2,565,556 million and EBITDA from CLP 250,155 million to CLP 379,402 million.
In parallel, in terms of sustainability, the Company successfully completed its Environmental Vision 2020 during the last decade, surpassing its goals in the reduction of water use, greenhouse gas
emissions and achieving almost 100% recovery of solid industrial waste. In addition, the Company launched its Environmental Vision 2030, which reinforces the measures of the previous version and adds new topics for action. In addition, in the sphere of personnel, CCU became a leader in attracting talent in Chile and developed numerous initiatives for its employees in all the countries where it operates, and they have acknowledged these efforts with excellent levels of job satisfaction.
All these advances, both strategic and financial, would not have been possible without the vision and work of Andrónico Luksic, whom I thank once again for his dedication to CCU for more than 36 years.
Specifically, with respect to the year being reported today, CCU set out to revitalize its financial results and profitability in 2023 after a challenging year in 2022. To this end, actions were framed under the "HerCCUles" regional plan, which includes six pillars: (i) maintain business scale, (ii) strengthen revenue management efforts, (iii) deliver efficiency gains through our Transformation program, (iv) optimize CAPEX and working capital, (v) focus on core brands and high volume/margin innovations and (vi) continue investing in brand equity.
In line with this plan, despite lower overall volumes, which contracted 3.4% compared to the previous period, the Company was able to maintain the relative scale of its operations, sustaining its market share in the main categories in which it participates.
At the financial level, EBITDA reached CLP 379,402 million, an increase of 6.0% compared to 2022. The Company's main operating segment, Chile, stood out with an expansion of 24.8%, mainly explained by revenue management initiatives, efficiencies and solid levels of brand preference. On the other hand, the EBITDA of the International and Wine operating segments contracted by 16.0% and 37.4%, respectively, mainly due to the difficult economic situation in Argentina and the challenging scenario for wine exports. Thus, at the end of the year, net income attributable to the owners of the controlling company reached CLP 105,653 million. In addition, the company's solid cash flow generation was noteworthy, which caused the net financial debt to EBITDA ratio to improve from 2.25x at the end of 2022 to 2.01x at the end of 2023.
corporativoGobierno 3
Estrategia 4
Personas 5
Modelo de 6 negocios
Gestión de 7 proveedores
Indicadores 8
Hechos 9
relevantes o esenciales
Comentarios 10 de accionistas
y del Comité de Directores
Informe 11
Financiero
Message from the Chairman of the Board | 2023 Annual Report | 4 |
Anexos 12
Regarding the company's main joint ventures, in Colombia, volumes contracted slightly in a scenario of slowing consumption. In Argentina, our water business posted positive growth in volumes, explained by the strength of the brands and a successful process of integration of distribution and sales in our beer, cider, wine and spirits operations.
As part of the Company's sustainability efforts, in line with its commitment to the circular economy, CCU began construction of a new PET recycling plant, called "CirCCUlar", in 2023. It is expected to be operational by the end of this year and will be capable of processing 18,000 tons of PET per year, equivalent to 870 million bottles. "CirCCUlar" will also have state-of-the-art technology, incorporating certified renewable energies.
In addition, during the fourth quarter, CCU announced a new sustainability strategy called "Juntos por un Mejor Vivir", which will enable the company to address its Environmental, Social and Governance (ESG) challenges in the coming years. This new strategy has two pillars: "Our Planet" and "Our People", which comprise eight work agendas and 20 goals for the year 2030. The "Our Planet" pillar will address the issues of Water Balance, Circular Vocation, Climate Challenges and Responsible Procurement. The "Our People" pillar will focus on the "SER CCU" Experience, Passion for the Consumer, Conscious Consumption and Country Progress. The objectives of Environmental Vision 2030 are fully reflected in this new strategy, and, as detailed in this report, CCU continues to make progress on each one of them.
To conclude, I would like to thank all CCU employees for their effort, talent and dedication, which are always underpinned by the principles of "SER CCU": Excellence, Integrity, Commitment and Empowerment. Our most sincere recognition goes to all of them for their commitment, which has been demonstrated in the challenging moments the company has faced in recent years.
I am also grateful for the trust placed by the shareholders in the Board of Directors that I now chair, and I echo the appeal that Andrónico Luksic used to make at the end of his letters, that we face the future with optimism and energy and continue to build this great Company together.
Francisco Pérez Mackenna
Chairman of the Board
Compañía Cervecerías Unidas S.A.
March 2024
corporativoGobierno 3
Estrategia 4
Personas 5
Modelo de 6 negocios
Gestión de 7 proveedores
Indicadores 8
Hechos 9
relevantes o esenciales
Comentarios 10 de accionistas
y del Comité de Directores
Informe 11
Financiero
Message from the Chairman of the Board | 2023 Annual Report | 5 |
Anexos 12
02
Company Profile
2.1 Mission, vision, purpose and values
About us
(GRI 1, 2-4)
Compañía Cervecerías Unidas S.A. and its subsidiaries ("CCU" or the "Company"), is a multi-category beverage company with operations in Chile, Argentina, Bolivia, Colombia, Paraguay and Uruguay.
In Chile, CCU is one of the largest players in each of the categories in which it participates, including beer, soft drinks, mineral and bottled waters, juice, wine and pisco, among others.
Regionally, CCU is the second largest brewer in Argentina, where we also operate in the cider, spirits and wine industries. In addition, we participate in the mineral water and flavored water categories through a joint venture with Danone. In Bolivia, CCU is present in the beer, water and soft drink, analcoholic and malt-based beverage categories. In Uruguay and Paraguay, we operate in the beer, mineral and bottled water, soft drink, wine and juice categories.
In Colombia, we operate in the beer and malt beverage categories through a joint venture between CCU and Postobón S.A. and its related companies ("Grupo Postobón").
Our operations are divided into the following three operating segments: (i) Chile Operating Segment, which includes beer, soft drinks, spirits, cider and the Strategic Service Units ("SSUs") in the Chilean market; (ii) International Business Operating Segment, which includes beer, cider, soft drinks and spirits, among other categories, in Argentina, Uruguay, Paraguay and Bolivia; and (iii) Wine Operating Segment, which includes wine and sparkling wine in the domestic market, in Chile and Argentina, and exports to more than 80 countries. Revenues and expenses of the Corporate Support Units ("CSUs") are presented separately in Other. The CSUs, like the SSUs, provide shared services within the Company in order to capture operational synergies.
At the operational management level, CCU reports results in accordance with the aforementioned Operating Segments, depending on the geographic origin of revenues and commercial activity.
We are a Company with a long tradition that dates back to 1850 and, throughout our history, we have been able to create and share high-value experiences with our communities, understanding the changes in the environment, growing profitably and being an important part of the society to which we belong.
As a result of an important strategic reflection in 2017, we undertook a process of updating our corporate identity, which, among other changes, inspired us to migrate to a purpose, promise and organizational principles to replace the mission and vision. This new framework, called "SER CCU" ("BE CCU"), embodies our aspirations as a Company.
2.1 Mission, vision, purpose and values | 2023 Annual Report | 6 |
Exhibits 12
This annual report is based on the requirements of the regulations of the Financial Market Commission ("CMF") under General Rule ("NCG") N° 461. The report is also constructed in accordance to the standards of the Global Reporting Initiative ("GRI"), the Sustainability Accounting Standards Board ("SASB") indicators for the alcoholic and non alcoholic beverage sector, the Company's own indicators and the Dow Jones Sustainability Index ("DJSI").
What does inspire us
Being CCU inspires us to transcend the legitimate interests of those who work here, with a concrete purpose and promise that seeks to build a better life for all those with whom we interact.
BEING
WHAT DOES | P1 |
INSPIRE |
US
P2
P1 Our Purpose
We are passionate about creating experiences to share a better life together.
P2 Our Promise
With a wide range of beverage brands and experiences, we enhance and accompany life's different moments, guided by our principles, for the benefit of the people we interact with and the care of the environment.
Our | Our |
Purpose | Promise |
HOW | HOW WE |
WHO WE
How we are
SER CCU is to live by our principles and reflect our personality at all times.
WE ARE | P3 DO IT | P5 | P6 |
Ours | ||
Ours | Strategic | Ours |
Principles | Pillars | Processes |
P4 | P7 |
Our | |
Our | Business |
Personality | Platform |
WORK P8 FOR
Our
People
P9
Our
Planet
P3 Ours
Principles
Excellence: Somos apasionados por la calidad y el trabajo bien hecho. Commitment: We strive for good for others and our environment, in harmony with our legitimate interests.
Integrity: We follow the rules and regulations, always inspired to act correctly. Empowerment: We are driven by an entrepreneurial, innovative and proactive attitude.
P4 Our
Personality
Pride: We feel legitimately proud of who we are and of our history.
Empathy: We relate to and collaborate with our people based on affection and trust. Overcoming: We like to set ambitious goals, exceed them and adapt to the market. Passion: We are enthusiastic and we like to communicate it.
2.1 Mission, vision, purpose and values
2023 Annual Report | 7 |
Business 6 model
Suppliers 7
Indicators 8
Relevant or 9 material Event
Commentsfrom 10 shareholdersand
theDirectors' Committee
Financial 11
Reports
Exhibits 12
How we do it
Being CCU is to do things based on solid strategic pillars, from a robust business platform and an execution of excellence, through processes throughout the organization.
Who we work for
We live in a fully integrated world where the actions we take have an impact on all the people we interact with. At CCU we are inspired by this interaction, which is why we constantly seek to positively impact people's lives through commitments and concrete actions that we carry out every day.
P5 | Ours |
Strategic Pillars |
Profitability: Maximize the economic value of the businesses we operate. This is achieved by optimizing the final return on investment, which is a consequence of better margins and the efficient use of resources.
Growth: Increase the size and scope of our operation. This is achieved by increasing market share, serving new needs, new channels, new consumption occasions and entering new
P6 Ours
Processes
CCU's organization, starting with its processes, maintains the necessary balance between a formal and an informal organization. While the former allows us to be clear that what we do guarantees an orderly, structured and replicable management, the latter incorporates the necessary spontaneity that arises from leadership and interpersonal relationships within the Company.
P8 Our People
Consumers: We accompany your moments responsibly.
Clients:: We deliver satisfaction, quality of service and maximum performance.
Workers: We promote safety, development and growth.
Suppliers: We foster collaborative relationships.
Communities: We build trust and mutual value and contribute to their development. Shareholders: We generate sustainable value.
Society: We have a positive impact on society and on the Environment.
regions, businesses and categories.
Sustainability: To ensure the long-term value of the Company. This is achieved by taking into consideration the current and future well-being of all the people with whom we interact, the development of our brands and care for the environment.
Managers processes
InformalFormal
organizationorganization
Operational
processes
P9 Our Planeta
Environmental Vision 2030
We recognize the importance of doing business with a long-term Environmental Vision, which implies short- term actions in order to achieve our goals, and we promote an internal culture oriented to environmental care.
We are inspired to lead environmental initiatives throughout our value chain and our commitment is embodied
in a specific Environmental Vision for each decade. The 2030 dimensions consider:
Emissions
Suppliers 7
Indicators 8
Relevant or 9 material Event
P7 Our
Business Platform
Our business is based on operating, with focus and synergies, a multi-category portfolio of valued beverage brands, with responsible promotion, both regionally and for export
2.1 Mission, vision, purpose and values
Reduce our CO2 emissions per liter produced. | Incorporate recycled material in our containers |
Use renewable energie. | and packaging. |
Waste | Water Use |
Promote waste reduction and recovery. | Reduce water used per liter produced. |
Make our containers and packaging resusable, recyclable | |
or compostable. |
2023 Annual Report | 8 |
Commentsfrom 10 shareholdersand
theDirectors' Committee
Financial 11
Reports
Exhibits 12
2.2 Historical Information
History
1850
The first brewery in Chile is born in Valparaíso, founded by Mr. Joaquín Plagemann.
1889
The first brewery in Valparaíso merges with Fábrica de Cerveza de Limache, giving rise to Fábrica Nacional de Cerveza.
1902
Fábrica Nacional de Cerveza is incorporated as a corporation with the name Compañía Cervecerías Unidas.
1924
CCU acquires the breweries of Concepción and Talca.
1933
CCU acquires the brewery from Jorge Aubel's estate in Osorno.
1942
The Escudo beer brand is launched.
1851
The German immigrant Mr. Carlos Anwandter establishes Compañía de Cerveza de Valdivia.
1901
Fábrica Nacional de Cerveza acquires Fábrica de Cerveza y Hielo of Gubler and Cousiño.
1916
CCU becomes the leading beer producer in Chile after the incorporation of the breweries Ebner in Santiago, Anwandter in Valdivia and Compañía Cervecera La Calera. // CCU enters the soft drink business with Bilz, after the incorporation of Ebner, the company that introduced Bilz to the Chilean market in 1905.
1927
CCU acquires the Mitrovich Hermanos brewery in Antofagasta.
1950
CCU acquires the brewery from the company Floto y Cía. in La Serena.
Strategy 4
People 5
Business 6 model
Suppliers 7
1959
CCU begins to produce Pepsi-Cola under license.
1979
The corporate name of the Company is changed to "Compañía Cervecerías Unidas S.A."
1990
Through an agreement with Paulaner Brauerei A.G., CCU begins to produce and distribute the German beer Paulaner in Chile. // CCU expands its mineral water business with the acquisition of Agua Mineral Porvenir S.A.
1994
CCU enters the wine business through the acquisition of Viña San Pedro S.A., today Viña San Pedro Tarapacá S.A. ("VSPT" o "VSPT Wine Group"). // CCU enters the beer business in Croatia, acquiring 26.9% and, later, control of Karlovacka Pivovara d.d., which it sold to Heineken in 2003.
Indicators 8
Relevant or 9 material Event
1960
The Company acquires the Cachantun water brand and its facilities in Coinco.
1986
The Luksic group, through Quiñenco S.A., and the German group Schörghuber, through Paulaner-Salvator A.G., create the company Inversiones y Rentas S.A., in which they have equal ownership, which acquires 64.3% of Compañía Cervecerías Unidas S.A. ("CCU S.A.").
1992
CCU is the second Chilean and third Latin American company to place ADRs in the U.S. market.
1995
CCU enters the Argentine beer market through the acquisition of two regional breweries: Compañía Industrial Cervecera S.A. of Salta and Cervecería Santa Fe S.A. // CCU signs agreements with Anheuser-Busch, to produce, sell and distribute the Budweiser brand in Argentina.
Commentsfrom 10 shareholdersand
theDirectors' Committee
Financial 11
Reports
2.2 Historical Information | 2023 Annual Report | 9 |
Exhibits 12
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CCU - Compañía Cervecerías Unidas SA published this content on 11 July 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 July 2024 21:36:04 UTC.
