Disclosure of entity's operating segments [text block] | Note 6 Financial Information as per operating segments The Company has defined three Operating segments, essentially defined with respect to its revenues in the geographic areas of commercial activity: 1. Chile, 2. International business and 3.Wine. These Operating segments mentioned are consistent with the way the Company is managed and how results are reported by CCU. These segments reflect separate operating results which are regularly reviewed by the chief operating decision maker in order to make decisions about the resources to be allocated to the segment and assess its performance. Operating segment Products and services Chile Beers, non-alcoholic beverages, spirits and SSU. International Business Beers, cider, non-alcoholic beverages and spirits in Argentina, Uruguay, Paraguay and Bolivia. Wines Wines, mainly in export markets to more 80 countries. Corporate revenues and expenses are presented separately within the Other, in addition in the other presents the elimination of transactions between segments. The Company does not have any customers representing more than 10% of consolidated revenues. The detail of the segments is presented in the following tables: a) Information as per operating segments for the years ended December 31, 2019 and 2018 : Chile International Business Wines Others Total 2019 2018 2019 2018 (4) 2019 2018 2019 2018 (4) 2019 2018 (5) ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ Sales revenue external customers 1,134,048,629 1,080,974,052 452,267,652 473,972,819 203,230,777 201,305,759 - - 1,789,547,058 1,756,252,630 Other income 16,438,937 15,754,493 11,724,538 9,404,839 3,806,545 4,190,594 1,023,619 (2,320,219) 32,993,639 27,029,707 Sales revenue between segments 13,816,469 12,845,646 495,259 548,184 5,284,436 1,022,378 (19,596,164) (14,416,208) - - Net sales 1,164,304,035 1,109,574,191 464,487,449 483,925,842 212,321,758 206,518,731 (18,572,545) (16,736,427) 1,822,540,697 1,783,282,337 Change % 4.9 - (4.0) - 2.8 - - - 2.2 - Cost of sales (540,048,331) (501,255,744) (248,880,925) (230,068,601) (128,763,785) (133,271,578) 9,374,851 4,584,531 (908,318,190) (860,011,392) % of Net sales 46.4 45.2 53.6 47.5 60.6 64.5 - - 49.8 48.2 Gross margin 624,255,704 608,318,447 215,606,524 253,857,241 83,557,973 73,247,153 (9,197,694) (12,151,896) 914,222,507 923,270,945 % of Net sales 53.6 54.8 46.4 52.5 39.4 35.5 - - 50.2 51.8 MSD&A (1) (429,093,171) (407,242,869) (210,155,693) (210,591,361) (55,595,811) (52,408,689) (9,726,563) (11,332,903) (704,571,238) (681,575,822) % of Net sales 36.9 36.7 45.2 43.5 26.2 25.4 - - 38.7 38.2 Other operating income (expenses) 5,266,475 1,586,173 14,201,709 223,078,626 515,019 1,828,938 1,173,780 532,889 21,156,983 227,026,626 Adjusted operating result (2) 200,429,008 202,661,751 19,652,540 266,344,506 28,477,181 22,667,402 (17,750,477) (22,951,910) 230,808,252 468,721,749 Change % (1.1) - (92.6) - 25.6 - - - (50.8) - % of Net sales 17.2 18.3 4.2 55.0 13.4 11.0 - - 12.7 26.3 Net financial expense - - - - - - - - (14,602,562) (7,766,206) Equity and income of associates and joint ventures - - - - - - - - (16,431,759) (10,815,520) Foreign currency exchange differences - - - - - - - - (9,054,155) 3,299,657 Results as per adjustment units - - - - - - - - (8,255,001) 742,041 Other gains (losses) - - - - - - - - 3,156,799 4,029,627 Income before taxes 185,621,574 458,211,348 Tax income (expense) (39,975,914) (136,126,817) Net income for year 145,645,660 322,084,531 Non-controlling interests 15,503,968 15,193,739 Net income attributable to equity holders of the parent 130,141,692 306,890,792 Depreciation and amortization 66,301,914 63,148,804 27,077,745 19,798,708 9,826,148 7,935,006 1,815,127 2,406,676 105,020,934 93,289,194 ORBDA (3) 266,730,922 265,810,555 46,730,285 286,143,214 38,303,329 30,602,408 (15,935,350) (20,545,234) 335,829,186 562,010,943 Change % 0.3 - (83.7) - 25.2 - - - (40.2) - % of Net sales 22.9 24.0 10.1 59.1 18.0 14.8 - - 18.4 31.5 (1) MSD&A included Marketing, Selling, Distribution and Administrative expenses. (2) Adjusted operating result (for management purposes we have defined as Net income before other gains (losses), net financial expense, equity and income of joint venture, foreign currency exchange differences, result as per adjustment units and income taxes). (3) ORBDA (for management purpose we have defined as Adjusted Operating Result before Depreciation and Amortization). (4) The net impact, related to early termination of Budweiser license, on International Business Operating segment earnings was a one-time gain of ThCh$ 211,228,960 in ORBDA and a loss in Other for an amount of ThCh$ 2,386,517. (5) The net impact, related to early termination of Budweiser license (See Note 1 – General information, letter C ), on CCU’s consolidated earnings was a one-time gain of ThCh$ 208,842,443 in ORBDA and ThCh$ 157,358,973 in Net income attributable to equity holder of the parent. b) Information as per operating segments for the years ended December 31, 2018 and 2017 : Chile International Business Wines Others Total 2018 2017 2018 (4) 2017 2018 2017 2018 (4) 2017 2018 (5) 2017 ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ Sales revenue external customers 1,080,974,052 1,020,763,055 473,972,819 457,178,413 201,305,759 200,455,713 - - 1,756,252,630 1,678,397,181 Other income 15,754,493 14,667,777 9,404,839 2,740,533 4,190,594 3,105,064 (2,320,219) (549,761) 27,029,707 19,963,613 Sales revenue between segments 12,845,646 11,688,658 548,184 398,100 1,022,378 893,005 (14,416,208) (12,979,763) - - Net sales 1,109,574,191 1,047,119,490 483,925,842 460,317,046 206,518,731 204,453,782 (16,736,427) (13,529,524) 1,783,282,337 1,698,360,794 Change % 6.0 - 5.1 - 1.0 - - - 5.0 - Cost of sales (501,255,744) (483,604,499) (230,068,601) (190,387,412) (133,271,578) (126,244,373) 4,584,531 1,497,629 (860,011,392) (798,738,655) % of Net sales 45.2 46.2 47.5 41.4 64.5 61.7 - - 48.2 47.0 Gross margin 608,318,447 563,514,991 253,857,241 269,929,634 73,247,153 78,209,409 (12,151,896) (12,031,895) 923,270,945 899,622,139 % of Net sales 54.8 53.8 52.5 58.6 35.5 38.3 - - 51.8 53.0 MSD&A (1) (407,242,869) (383,169,121) (210,591,361) (225,341,789) (52,408,689) (53,941,735) (11,332,903) (6,330,835) (681,575,822) (668,783,480) % of Net sales 36.7 36.6 43.5 49.0 25.4 26.4 - - 38.2 39.4 Other operating income (expenses) 1,586,173 2,438,416 223,078,626 678,153 1,828,938 251,765 532,889 687,209 227,026,626 4,055,543 Adjusted operating result (2) 202,661,751 182,784,286 266,344,506 45,265,998 22,667,402 24,519,439 (22,951,910) (17,675,521) 468,721,749 234,894,202 Change % 10.9 - 488.4 - (7.6) - - - 99.5 - % of Net sales 18.3 17.5 55.0 9.8 11.0 12.0 - - 26.3 13.8 Net financial expense - - - - - - - - (7,766,206) (19,115,361) Equity and income of associates and joint ventures - - - - - - - - (10,815,520) (8,914,097) Foreign currency exchange differences - - - - - - - - 3,299,657 (2,563,019) Results as per adjustment units - - - - - - - - 742,041 (110,539) Other gains (losses) - - - - - - - - 4,029,627 (7,716,791) Income before taxes 458,211,348 196,474,395 Tax income (expense) (136,126,817) (48,365,976) Net income for year 322,084,531 148,108,419 Non-controlling interests 15,193,739 18,501,066 Net income attributable to equity holders of the parent 306,890,792 129,607,353 Depreciation and amortization 63,148,804 64,807,818 19,798,708 15,568,301 7,935,006 7,505,440 2,406,676 4,317,945 93,289,194 92,199,504 ORBDA (3) 265,810,555 247,592,104 286,143,214 60,834,299 30,602,408 32,024,879 (20,545,234) (13,357,576) 562,010,943 327,093,706 Change % 7.4 - 370.4 - (4.4) - - - 71.8 - % of Net sales 24.0 23.6 59.1 13.2 14.8 15.7 - - 31.5 19.3 (1) MSD&A included Marketing, Selling, Distribution and Administrative expenses. (2) Adjusted operating result (for management purposes we have defined as Net income before other gains (losses), net financial expense, equity and income of joint venture, foreign currency exchange differences, result as per adjustment units and income taxes). (3) ORBDA (for management purpose we have defined as Adjusted Operating Result before Depreciation and Amortization). (4) The net impact, related to early termination of Budweiser license, on International Business Operating segment earnings was a one-time gain of ThCh$ 211,228,960 in ORBDA and a loss in Other for an amount of ThCh$ 2,386,517. (5) The net impact, related to early termination of Budweiser license (See Note 1 – General information, letter C ), on CCU’s consolidated earnings was a one-time gain of ThCh$ 208,842,443 in ORBDA and ThCh$ 157,358,973 in Net income attributable to equity holder of the parent. Sales information by geographic location Net sales per geographical location For the years ended as of December 31, 2019 2018 2017 ThCh$ ThCh$ ThCh$ Chile (1) 1,342,369,499 1,289,513,013 1,226,668,091 Argentina (2) 390,443,569 421,607,095 413,466,737 Uruguay 17,805,957 17,708,773 16,402,136 Paraguay 47,148,643 43,565,171 41,823,830 Bolivia (3) 24,773,029 10,888,285 - Foreign countries 480,171,198 493,769,324 471,692,703 Total 1,822,540,697 1,783,282,337 1,698,360,794 (1) Includes net sales correspond to Corporate Support Unit and eliminations between geographical locations. Additionally, includes net sales made in Chile of the Wines Operating segment. (2) Includes net sales made by the subsidiaries Finca La Celia S.A. and Los Huemules SRL., registered under the Wines Operating segment and Chile Operating segment, respectively. (3) See Note 15 – Business combinations, letter a) . Sales information by customer For the years ended as of December 31, Net Sales 2019 2018 2017 ThCh$ ThCh$ ThCh$ Domestic sales 1,702,109,548 1,664,613,889 1,572,617,473 Exports sales 120,431,149 118,668,448 125,743,321 Total 1,822,540,697 1,783,282,337 1,698,360,794 Sales information by product category Sales information by product category For the years ended as of December 31, 2019 2018 2017 ThCh$ ThCh$ ThCh$ Alcoholic business 1,206,288,857 1,206,506,503 1,158,451,078 Non-alcoholic business 583,258,201 549,746,127 519,946,103 Others (1) 32,993,639 27,029,707 19,963,613 Total 1,822,540,697 1,783,282,337 1,698,360,794 (1) Others consist mainly of sales of by-products and packaging including bottles, pallets, and glasses. Depreciation and amortization as per operating segments Depreciation and amortization For the years ended as of December 31, 2019 2018 2017 ThCh$ ThCh$ ThCh$ Chile operating segment 66,301,914 63,148,804 64,807,818 International Business operating segment 27,077,745 19,798,708 15,568,301 Wines operating segment 9,826,148 7,935,006 7,505,440 Others (1) 1,815,127 2,406,676 4,317,945 Total 105,020,934 93,289,194 92,199,504 (1) I ncludes depreciation and amortization corresponding to the Corporate Support Units. Cash flows Operating Segments Cash flows Operating Segments For the years ended as of December 31, 2019 2018 2017 ThCh$ ThCh$ ThCh$ Cash flows from operating activities 242,320,045 429,313,131 262,161,431 Chile operating segment 139,560,085 155,728,711 161,413,504 International business operating segment 3,885,657 228,740,495 58,773,027 Wines operating segment 37,196,293 14,340,011 16,167,068 Others 61,678,010 30,503,914 25,807,832 Cash flows from investing activities (144,185,726) (199,002,101) (173,614,379) Chile operating segment (125,009,624) (115,670,330) (78,746,298) International business operating segment (38,558,437) (35,475,310) (32,312,751) Wines operating segment (28,895,781) (16,749,301) (10,870,574) Others (1) (*) 48,278,116 (31,107,160) (51,684,756) Cash flows from financing activities (199,420,161) (52,963,862) (53,001,198) Chile operating segment (14,458,606) (60,093,788) (65,996,567) International business operating segment 25,039,794 (100,573,425) (8,217,846) Wines operating segment 439,231 3,741,241 (15,171,642) Others (1) (*) (210,440,580) 103,962,110 36,384,857 (1) Others include Corporate Support Units, due to cash flows are managed by CCU. (*) It includes contribution to joint ventures. See Note 8 - Cash and cash equivalents . Capital expenditures as per operating segments Capital expenditures (property, plant and equipment and software additions) For the years ended as of December 31, 2019 2018 2017 ThCh$ ThCh$ ThCh$ Chile operating segment 69,394,303 78,887,075 80,866,369 International Business operating segment 38,524,717 32,756,828 32,312,751 Wines operating segment 22,020,111 16,961,638 10,948,212 Others (1) 10,548,718 2,834,881 1,638,148 Total 140,487,849 131,440,422 125,765,480 (1) Others include the capital investments corresponding to the Corporate Support Units. Assets as per operating segments Assets as per Operating segment As of December 31, 2019 As of December 31, 2018 ThCh$ ThCh$ Chile operating segment 1,255,267,920 1,183,145,732 International Business operating segment 460,237,744 463,913,523 Wines operating segment 380,892,311 341,959,321 Others (1) 257,292,739 416,846,340 Total 2,353,690,714 2,405,864,916 (1) I ncludes assets corresponding to the Corporate Support Units. Assets per geographic location Assets per geographical location As of December 31, 2019 As of December 31, 2018 ThCh$ ThCh$ Chile (1) 1,862,882,784 1,924,196,897 Argentina (2) 370,434,173 373,091,516 Uruguay 26,403,153 26,925,415 Paraguay 55,536,326 53,126,091 Bolivia (3) 38,434,278 28,524,997 Total 2,353,690,714 2,405,864,916 (1) Includes the assets corresponding to the Corporate Support Units and eliminations between geographic location and investments in associates and joint ventures. Additionally, includes part of Wines Operating segment and excludes its argentine subsidiary Finca La Celia S.A. (2) Includes the assets of the subsidiaries Finca La Celia S.A. and Los Huemules S.R.L., registered under the Wines Operating segment and Chile Operating segment, respectively. (3) See Note 15 – Business combinations, letter a) . Liabilities as per operating segments Liabilities as per Operating segment As of December 31, 2019 As of December 31, 2018 ThCh$ ThCh$ Chile operating segment 479,278,341 457,517,605 International Business operating segment 170,050,938 172,893,966 Wines operating segment 139,805,629 112,427,830 Others (1) 121,628,583 273,909,572 Total 910,763,491 1,016,748,973 (1) O thers include liabilities corresponding to the Corporate Support Units. Operating Segment’s additional information The Consolidated Statement of Income classified according to the Company’s operations management is as follows: CONSOLIDATED STATEMENT OF INCOME Notes For the years ended December 31, 2019 2018 (*) 2017 ThCh$ ThCh$ ThCh$ Sales revenue external customers 1,789,547,058 1,756,252,630 1,678,397,181 Other income 32,993,639 27,029,707 19,963,613 Net sales 1,822,540,697 1,783,282,337 1,698,360,794 Change % 2.2 5.0 - Cost of sales (908,318,190) (860,011,392) (798,738,655) % of Net sales 49.8 48.2 47.0 Gross margin 914,222,507 923,270,945 899,622,139 % of Net sales 50.2 51.8 53.0 MSD&A (1) (704,571,238) (681,575,822) (668,783,480) % of Net sales 38.7 38.2 39.4 Other operating income (expenses) 21,156,983 227,026,626 4,055,543 Adjusted operating result (2) 230,808,252 468,721,749 234,894,202 Change % (50.8) 99.5 - % of Net sales 12.7 26.3 13.8 Net financial expense 32 (14,602,562) (7,766,206) (19,115,361) Equity and income of associates and joint ventures 16 (16,431,759) (10,815,520) (8,914,097) Foreign currency exchange differences 32 (9,054,155) 3,299,657 (2,563,019) Results as per adjustment units 32 (8,255,001) 742,041 (110,539) Other gains (losses) 31 3,156,799 4,029,627 (7,716,791) Income before taxes 185,621,574 458,211,348 196,474,395 Tax income (expense) 24 (39,975,914) (136,126,817) (48,365,976) Net income for year 145,645,660 322,084,531 148,108,419 Non-controlling interests 28 15,503,968 15,193,739 18,501,066 Net income attributable to equity holders of the parent 130,141,692 306,890,792 129,607,353 Depreciation and amortization 29 105,020,934 93,289,194 92,199,504 ORBDA (3) 335,829,186 562,010,943 327,093,706 Change % (40.2) 71.8 - % of Net sales 18.4 31.5 19.3 (*) The net impact, related to early termination of Budweiser license (See Note 1 – General information, letter C) , on CCU’s consolidated earnings was a one-time gain of ThCh$ 208,842,443 in ORBDA and ThCh$ 157,358,973 in Net income attributable to equity holder of the parent. See definition of (1), (2) and (3) in information as per Operating segment under this Note. The following is a reconciliation of our Net income, the main comparable IFRS measure to Adjusted Operating Result for the years ended December 31, 2019, 2018 and 2017 : For the years ended December 31, 2019 2018 (*) 2017 ThCh$ ThCh$ ThCh$ Net income of year 145,645,660 322,084,531 148,108,419 Add (Subtract): Other gains (losses) (3,156,799) (4,029,627) 7,716,791 Finance income (13,117,641) (15,794,456) (5,050,952) Finance costs 27,720,203 23,560,662 24,166,313 Share of net loss of joint ventures and associates accounted for using the equity method 16,431,759 10,815,520 8,914,097 Foreign currency exchange differences 9,054,155 (3,299,657) 2,563,019 Result as per adjustment units 8,255,001 (742,041) 110,539 Income tax expense 39,975,914 136,126,817 48,365,976 Adjusted operating result 230,808,252 468,721,749 234,894,202 Depreciation and amortization 105,020,934 93,289,194 92,199,504 ORBDA 335,829,186 562,010,943 327,093,706 (*) The net impact, related to early termination of Budweiser license (See Note 1 – General information, letter C) , on CCU’s consolidated earnings was a one-time gain of ThCh$ 208,842,443 in ORBDA and ThCh$ 157,358,973 in Net income attributable to equity holder of the parent. The following is a reconciliation of the consolidated amounts presented for MSD&A with the comparable amounts presented on the face of our consolidated statement of income: For the years ended December 31. 2019 2018 2017 ThCh$ ThCh$ ThCh$ Consolidated statement of income Distribution costs (327,543,973) (314,391,183) (290,227,129) Administrative expenses (136,975,243) (152,376,458) (142,514,649) Other expenses by function (241,479,749) (216,236,609) (238,704,061) Other expenses included in ´Other expenses by function´ 1,427,727 1,428,428 2,662,359 Total MSD&A (704,571,238) (681,575,822) (668,783,480) Segment information by joint ventures and associates The Administration of the Company review the financial situation and result of the all of their joint ventures and associated that is described in Note 16 – Investments accounted for using equity method . |