Becle, S.A.B. de C.V. Corporate Presentation Nov, 20 2018
Disclaimer This presentation has been prepared by Becle , S.A.B. de C.V. (“ Becle ”, “Cuervo” or the “Company”) for informational purposes. Nothing in this presentation is intended to be taken by, or should be taken by, any individual recipient as investment advice, a recommendation to buy, hold or sell any security, or an offer to sell or a solicitation of offers to purchase any security. Although the information presented in this presentation has been obtained from sources that Becle believes to be reliable, Becle does not make any representation as to its accuracy, validity, timeliness or completeness for any purpose. No representation or warranty express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Certain of the information contained in this presentation represents or is based upon forward looking statements or information. These forward-looking statements may relate to Becle’s financial condition, results of operations, plans, objectives, future performance and business, including, but not limited to, statements with respect to general macroeconomic conditions, consumer preferences, competition and availability of raw materials. All statements contained in this presentation that are not clearly historical in nature are forward- looking, and the words “anticipate,” “believe,” “continues,” “expect,” “estimate,” “intend,” “project” and similar expressions and future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or simi lar expressions are generally intended to identify forward-looking statements. The information in this presentation, including but not limited to forward-looking statements, applies only as of the date of this presentation and is not intended to give any assurance as to future results. Becle expressly disclaims any obligation or undertaking to update or revise the information, including any financial data and forward-looking statements, and will not publicly release any revisions they may make to this presentation that may result from events or circumstances arising after the date of this presentation. 2
A Leading Global Spirits Company and Undisputed Leader in Tequila Worldwide Created in 1758, Cuervo is today an 11 th generation managed, the only Latin American public spirits company ✓ Undisputed leader in tequila globally , ~30% Key Figures – Combined Financial Statements TTM market share (1) Volume (9L cases) 20.4mm ✓ Comprehensive portfolio of over 30 brands retailed in Net Sales P$26,228 MM more than 90 countries. EBITDA P$5,897 MM ✓ Track record of innovation and value EBITDA Margin 22.5% enhancing/strategic M&A ✓ Strong geographic diversification and relevant Net Sales Value Breakdown – TTM exposure to the U.S. and Canada, the world’s largest By Region By Category profit pool Non-Alcoholic ROW & Other ✓ Strong market position in high growth Irish Whiskey Tequila 8% 13% RTDs category with Bushmills 12% Mexico 24% 57% 23% ✓ Vertically integrated from production to distribution 63% Non- Tequila U.S. and Canada Source: Company information and IWSR Notes: 1. Based on IWSR total volume as of 2017 3
Our Company 1 Undisputed leader in tequila worldwide Unique portfolio of iconic brands in key fast-growing spirit categories, built 2 upon an innovation focus and value enhancing M&A Global spirits company with leading presence in most profitable spirits markets 3 with significant upside potential 4 Integrated model with robust route-to-market strategy 5 Track record of profitable growth and resilient cash flow generation 6 Heritage built upon continued value creation and consistent family leadership 4
Undisputed Leader in Tequila Worldwide Tequila Market Share by Region Tequila Global Market Share As % of volume – 2017 As % of volume – 2017 Total Market Size 31.2mm 9L Cases United States 29.7% 1 st (56.2% of Global Volume) 12.9% 1 st 24.5% 7.8% 6.8% 4.6% Rest of the World 2015 (15.1% of Global Volume) >2x nearest 3.6% Mexico competitor 1 st (28.8% of Global Volume) 32.4% 3.4% 1 st 37.8% 2.8% 2.7% 2.1% Cuervo Is the Owner of 3 of the Top 5 Selling Tequila Brands by Volume Globally 1 st 2017 19.3% 7.9% 5.8% 4.6% 4.6% 3.9% 3.6% 3.2% 2.9% 2.4% Source : IWSR (total volume data as of June 2017) №1 №1 №1 №1 №3 №1 №2 5
Tequila Portfolio Across Price Points • Most comprehensive tequila portfolio across price segments • Focus on premiumization with a strong portfolio of ultra premium and prestige tequila brands … With a Focus on Fast -Growing Portfolio of Powerful Established Brands… Ultra Premium and Prestige Segments… Focus on brand premiumization Brand Super Premium/ Ultra Premium Super Premium Super Premium Segment Prestige Ultra Premium Premium Main Markets Market Position in №1 №1 №1 №1 №3 №1 №2 1 1 1 2 1 3 5 3 1 Segment №1 №1 №1 №1 №3 №1 №2 №1 №1 №1 №1 №3 №1 №2 Source: Company information, IWSR 6
Extensive Portfolio of Leading Non-Tequila Brands Net Sales by • Over 15 brands in non-tequila categories Family / Category • 8 brands in #1 / #2 position within their segment TTM Total Ps$26,228 MM Irish & American Whiskey Rum Premium Premium / Premium / Premium Ultra Premium Standard Ultra Premium Ultra Premium 7 2 2 2 3 3 Vodka Gin Mezcal Jose Cuervo Family (34%) 1800 Family (12%) Ultra Ultra Premium Premium Value Premium Premium Premium Other Tequila (11%) 3 3 3 1 3 Bushmills (5%) Kraken (4%) RTD’s Non-alcoholic Other Spirits (13%) Premium Premium Premium Premium Mid Price Premium RTDs (8%) Non-Alcoholic & Other 1 3 1 1 1 1 (12%) Source: Company information, IWSR Note: Company’s portfolio includes other brands not displayed above 7
Focus on Innovation… Fast-Growing Recently Developed Brand Continuous Brand Development and Rejuvenation Premium Rum Tequila Reserva de la Maestro Tequilero Launched in 2009 Familia 2005 Key Market 2016 Ultra Premium Prestige 3 Growing above category average and gaining market share in the U.S. Whiskey Stranahan’s Bushmills Steamship Diamond Peak (Travel Retail) Developed the Cristalino Category 2015 2016 Ultra Premium Ultra Premium Ultra Premium Tequila Launched in 2009 Key Markets Vodka / Hangar 1 FogPoint Creyente Mezcal 2016 2016 Ultra Premium Ultra Premium Mezcal Vodka Ultra Premium Tequila Launched in 2015 Key Markets RTDs JC Especial Cans JC Authentic Margarita 2016 1993 Premium Tequila Premium Tequila RTD RTD Cristalino brands were introduced to compete in the ultra-premium segment, the fastest growing tequila segment globally 8
… and Value -Enhancing M&A Value-Enhancing M&A 2010 2007 2010 2011 2015 2018 Bushmills Irish Whiskey: a Milestone in our M&A Strategy Key Acquisition Criteria ✓ Value Creation Potential: Irish whiskey Irish whiskey #2 #3 in the U.S. by in the world by volume volume ✓ Category with Attractive Growth Profile: 17.9% CAGR 2009-2015 in volume in the U.S. − ✓ Premium Brands: well known brands with broad portfolio offering ✓ Global Presence in Key Countries: 2015A figures (10 months) (1) Key Markets: 1) U.S. and Canada, 2) Eastern Europe, 3) Western Volume: 579,071 9L Cases − Europe, 4) UK/Ireland, 5) Global Duty Free Revenues: Ps$867 MM ✓ Commercial Synergies Source: Company information Notes: 1. From March to December 9
Right Brands / Right Categories / Right Markets U.S. Spirits – Growth Spirits Categories – Global Market Share % Volume – 2017 2013-2017 Volume CAGR 13.5% Vodka 13.8% 6.0% 4.9% 2.4% 1.6% (0.9%) (1.0%) (1.1%) Whiskey 0.3% 8.6% Tequila Irish U.S. Vodka Gin Rum Scotch Total Whiskey Whiskey Spirits Irish Whiskey Brandy 6.0% Global Spirits – Growth 2013-2017 Volume CAGR Tequila & Irish 8.7% Whiskey remain Rum 4.4% 5.2% 4.3% underrepresented 3.3% categories within 0.2% spirits (0.4%) (1.5%) Tequila (2.8%) 1.0% Tequila Irish U.S. Gin Scotch Rum Vodka Total (1) Whiskey Whiskey Spirits Source: IWSR Notes : 1. Excludes Baiju 10
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