Company: AKO-B
Filing Date: 2025-03-26
Form Type: 20-F
Source: 0001410578-25-000473
Chunk: 21

Company: ANDINA BOTTLING CO INC
Filing Date: 2025-03-26
Form: 20-F
Item: Item 3
Chunk 21
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 business and results of operations.
Brazil’s political environment has historically influenced, and continues to influence, the performance of the country’s economy. Political crises have affected and continue to affect the confidence of investors and the general public, which have historically resulted in economic deceleration.
Luiz Inácio Lula da Silva, from the Workers’ Party (Partido dos Trabalhadores) was elected President of Brazil in October 2022 and took office in January 2023. A failure by the Brazilian government to implement necessary reforms may result in diminished confidence in the Brazilian government’s fiscal condition and budget, which could result in downgrades of Brazil’s sovereign foreign credit rating by credit rating agencies, negatively impact Brazil’s economy, lead to further depreciation of the real and an increase in inflation and interest rates, adversely affecting our business, financial condition and results of operations.
Inflation and the Brazilian government’s measures to curb inflation, including by increasing interest rates, may contribute to economic uncertainty in Brazil.
Brazil has historically experienced high rates of inflation, including periods of hyperinflation before 1995. Several measures have been implemented by the Brazilian government in an effort to curb rising inflation, but we cannot predict whether these policies will be effective. According to the National Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo, or “IPCA”), published by the IBGE), Brazilian annual rates of inflation for consumer prices were 5.8% in 2022, 4.6% in 2023 and 4.8% in 2024.

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Inflationary pressures may result in governmental interventions in the economy, including policies that could adversely affect the general performance of the Brazilian economy, which, in turn, could adversely affect our business operations in Brazil. Inflation may also increase our costs and expenses, and we may be unable to transfer such costs to our customers, reducing our profit margins and net income. In addition, inflation could also affect us indirectly, as our customers may also be affected and have their financial capacity reduced. Any decrease in our net sales or net income, as well as any reduction in our financial performance, may also result in a reduction in our net operating margin. Our customers and suppliers may be affected by high inflation rates and such effects on our customers and suppliers may adversely affect us.
The Brazilian real is subject to depreciation and volatility, which could adversely affect our business, financial condition and results of operations.
The Brazilian currency has been subject to significant fluctuations over the past three decades.