Dear Shareholders:
On behalf of the Board I preside, it is a pleasure to present the Annual Report and Financial Statements for 2008, a year that has been marked by sustained management excellence of our team, turning us into a multinational company with a solid financial position in each one of our markets and -with the support of our operations and investments- with a strong capacity to face the critical times we have gone through. Although the company has a privileged financial position it cannot afford to ignore the lower growth projected world-wide, however we trust that as long as the countries uphold the macroeconomic stability and that there is room in the agenda for increasing working capital and productivity, the effects of this crisis will begin to diminish.

Embotelladora Andina is focused on constantly creating value, searching for new opportunities to harness future growth and investing in more efficient logistics and distribution tools. In this sense, during 2008 we invested a total of US$ 100 million in Chile, Brazil and Argentina, in order to continue growing by increasing our productive capacity, operational improvement and the presence of new assets in the points of sale.

Consolidated volumes of our products grew 3% amounting 455 million unit cases*. Operating Income and Net Income increased 10.3% and 6.7%, respectively. Consolidated EBITDA* amounted to US$278 million, a 12.2% improvement. Our operation in Chile reached US$116 million in Operating Cash Flow*. This was an exceptional year in terms of results, after a favorable first semester, when volumes increased approximately 6%. During the last quarter we were faced with the world-wide financial crisis, which impacted the expectations of our consumers as well as the whole country`s economy. In spite of this situation, also worthy of mention: we managed to fulfill the commitments adopted with our Board of Directors in terms of volume, operating results, and cash flow generation. Also worthy of mention is how we managed prices, allowing us to front the highest rates of inflation of last decade; the excellent operation of the new distribution centers, Maipú and Puente Alto: and the great efficiency of our bottling process.

We made a successfull introduction of new categories and products that enabled us to continue leading the Chilean market. We launched the energy drink Burn; we incorporated Benedictino in the waters segment achieving a more competitive position; we redefined our strategy for Dasani flavored waters focusing on the Anti Ox feature through four flavors. In the Mixers segment, we incorporated new formats for the Nordic brand and in soft drinks we launched Fanta Limón (lemon flavored) and we repositioned the low calories version through Fanta Zero. In non-carbonated products, we introduced Green Tea, of the Nestea brand and in juices we launched new flavors in the light segment. All of this has allowed us to continue increasing a diversified portfolio that adapts to the needs of the different types of consumers and to the trends of a healthier lifestyle.

Operating Cash Flow of our subsidiary in Brazil amounted to US$119 million, reflecting a 20% growth. Important innovations and advances were achieved during 2008, in addition to facing significant challenges resulting from the crisis that affected the country. In spite of this economic scenario, thanks to the implemented strategy and management in Brazil-ranked third in terms of sales volume of soft drinks after the United States and Mexico- we see good perspectives for the next years. Together with The Coca-Cola System in Brazil, we continued strengthening the offer of non carbonated products, increasing our market share in all categories. We launched I9, the first isotonic of the Brazilian market and acquired the brand Jugos del Valle. All this led to the consolidation of our extensive product portfolio reaching different market segments. We also prospered in the concept of “upsizing” our PET formats, mainly in the selfservice channels, also taking this accessibility feature to the non returnable formats. Furthermore, in order to face competition from private labels (B-brands), we extended the accessibility feature to returnable formats, by focusing on accessibility of the regions that have lower spending power. During this year we achieved great advances in logistics, opening two new distribution centers: São Gonçalo and São Pedro da Aldeia in the state of Rio de Janeiro. We also invested in industrial infrastructure and we restructured the water treatment processes. All of this leading to an increased competitiveness and the capacity to more effectively and efficiently face the challenges that this market presents.

Operating Cash Flow of our operation in Argentina amounted to US$48 million, representing a 42.5% growth. 2008 was the best year of our history, in the midst of a highly uncertain scenario in the country, which is a mirror image of the excellent mazagement capacity of our team focused on productivity and the consolidation of each process. Operating decentralization was a key factor in the achievement of a greater market share. We created a specific division for our juice and isotonic businesses that allowed us to obtain a market share figures exceeding 10% in both categories, and nearly 30% in the main cities where we are present.

All this growth has driven us to build a modern plant in Cordoba, which we will inaugurate in 2009, and that will supply 100% of our demand and possibly support the rest of The Coca-Cola System in Argentina. For the purpose of assuring supply to our consumers in a scenario of sustained demand growth, we carried out the largest investment of the last years: US$17.8 million. We continued to strengthen our leadership relationship with our clients: achieving 100% of geographic coding and key advances in terms of service indexes. Given the complexity of our territory in this country, we also have continued perfecting the supply chain model in order to effectively reach our extensive network of deposits and remote distributors throughout the country. 2008 triggered a world-wide economic contraction upon our business, and in spite of this, we are proud of the solid financial position that Embotelladora Andina has attained in its operations.

This position, together with the strategic view of the company, is a key factor in finding new opportunities in the region. We have consolidated a market of over 37 million inhabitants through a strong leadership, given by the best brand in the world; a vast knowledge of the local realities of each of the countries in which we are present: a diversified product portfolio, supported by constant innovation in launches and formats; and, over six thousand employees who are committed with the growth of a company that safeguards the creation of value in each process.

We are confident that we will reach the established goals for the new year and hope that once the crisis is over, we will recover our growth and efficiency rates. At Embotelladora Andina, more than 62 years of trajectory and market knowledge, have proven how important it is to plan our investments for the long term progress of our operations. This is how we visualize the company, as a great human team that works every day seizing growth opportunities, by training and developing its talents in order to assure a complete alignment with the challenges our business portrays. Lastly, we are grateful for the confidence of our shareholders, our workers and families, clients, suppliers and all those who contributed with enthusiasm, dedication and professionalism, in building the world-wide class company we have today.