Becle, S.a.b. De C.v. · BMV:CUERVO
Becle, S.a.b. De C.v — Barclays Global Consumer Staples Conference 2019
25 slides from Becle, S.a.b. De C.v's conference presentation, Sep 4, 2019
Slide 1: Board Meeting – Barclays Global Consumer Staples Conference
BECLE, S.A.B. de C.V. Board Meeting Barclays Global Consumer Staples Conference Apr 25 2018 September 4th, 2019
Slide 2: Disclaimer
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 sel
Slide 3: A leading global Spirits Company and undisputed leader in Tequila worldwide
A leading global Spirits Company and undisputed leader in Tequila worldwide Created in 1758, Cuervo is today an 11th generation managed, the only Latin American public spirits company ✓ Undisputed leader in tequila globally, ~30% Key Figures – Financial Statements 1st Half 2019 market share(1) Volum
Slide 4: Our Company
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
Slide 5: Undisputed leader in Tequila worldwide
Undisputed leader in Tequila worldwide Tequila Global Market Share Tequila Market Share by Region As % of volume – 2018 As % of volume – 2018 Total Market Size 32.5mm 9L Cases 1st 29.8% United States (56.3% of Global Volume) 12.4% 24.1% 1st 8.9% 7.1% Rest of the World 2015 5.8% (15.4% of Global Volu
Slide 6: Tequila portfolio across price points
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 Segmen
Slide 7: Extensive portfolio of leading Spirits brands
Extensive portfolio of leading Spirits brands Net Sales by • Over 15 brands in other spirits categories Family / Category 2018 Total Ps$28,158 MM Irish & American Whiskey Rum Premium / Ultra Premium Premium Premium / Premium Standard Ultra Premium Ultra Premium Vodka Gin Mezcal Jose Cuervo Family (3
Slide 8: Focus on innovation
Focus on innovation Fast-Growing Recently Developed Brand Continuous Brand Development and Rejuvenation Premium Rum Tequila Launched in 2009 Reserva de la Maestro Tequilero Familia 2005 Key Market 2016 Ultra Premium Prestige Growing above category average and gaining market share in the U.S. Whiskey
Slide 9: Value-Enhancing M&A
Value-Enhancing M&A Value-Enhancing M&A 2007 2010 2010 2011 2015 2018 Bushmills Irish Whiskey: a Milestone in our M&A Strategy Key Acquisition Criteria ✓ Value Creation Potential: Irish Whiskey Irish Whiskey #3 #3 in the U.S. by in the world by volume volume ✓ Category with Attractive Growth Profile
Slide 10: Right brands / right categories / right markets
Right brands / right categories / right markets U.S. Spirits – Growth Spirits Categories – Global Market Share 2013-2018 Volume CAGR % Volume – 2018 12.9% 6.3% 5.6% Whiskey 14.2% 1.4% 2.3% ~0.3% - Irish Whiskey -0.3% -0.3% -1.3% Tequila Irish U.S. Vodka Gin Scotch Rum Total Vodka 13.4% Whiskey Whisk
Slide 11: Global reach and established U.S. platform
Global reach and established U.S. platform Continued Geographic Diversification: U.S. and Canada represent ~64% of the Company’s Revenues in 2018 Net Sales by Region 2013A ROW 2018 In volume and value: ROW 10% 14% 1 in Tequila 3 in Irish Whiskey Mexico 33% 22% Mexico 57% U.S. and 64% U.S. and Canada
Slide 12: Tequila’s attractiveness in the U.S.
Tequila’s attractiveness in the U.S. Tequila: Among the Fastest Growing Spirits… …Benefiting from Favorable Secular Trends 13A – 18A Volume CAGR in the U.S. 1 Younger ● Millennials eager to try and embrace variety and differentiating innovation Consumer ● Willing to pay a higher price for distinctiv
Slide 13: Untapped international growth
Untapped international growth Key Categories Underpenetrated Outside Core Markets Cross-leverage Platforms to Accelerate Expansion Tequila As % of Total Spirits Retail Sales – 2018 Cuervo derived ~86% of its 2018 net sales in value from the (1) U.S., Canada and Mexico… $3.6 $51.1 $54.8 ~US$511 MM Po
Slide 14: Integrated platform
Integrated platform 1 Agriculture 2 Production Competitive Advantage Resulting from Appellation of Flagship Distilleries and Bottling Facilities Support Origin for Tequila Route-to-Market Strategy La Rojeña (Tequila) Camichines (Tequila) Tamaulipas (11 Municipalities) EDISA Bottling Facility Guanaju
Slide 15: Unique Route-to-Market distribution
Unique Route-to-Market distribution 3 Distribution Own Distribution Platform to Control Route-to-Market and Brand Building Strategy Volume through own distribution network • Vertical integration of profits Benefits from ~25% in 2007 to ~92% as of 2018 • Control and focus of own brands Mexico Proximo
Slide 16: Route-to-Market control was key to U.S. success
Route-to-Market control was key to U.S. success Sales Turnaround Story in the U.S.: Jose Cuervo Case Study Key Turnaround Initiatives Since Proximo tookProximo Since over the tookdistribution over the 1 Enhancing brand health of Jose Cuervo fromofDiageo, distribution volume Jose Cuervo from 2 Focuse
Slide 17: Track record of sustainable growth
Track record of sustainable growth Combined Volume Combined Net Sales (000s of 9 Liter Cases) (Ps$MM)(1) 20,424 20,491 21,279 28,158 18,248 24,396 25,958 17,274 14,210 18,475 15,314 12,305 2013A 2014A 2015A 2016A 2017A 2018A 2013A 2014A 2015A 2016A 2017A 2018A Combined EBITDA(2) and Margin Cash Flow
Slide 18: Above sector growth – Operating Profit
Above sector growth Income Statement Past Performance – 2013A-2018A CAGR (Fiscal Years, in Reporting Currency) 18.0% Net Sales 2.8% 2.2% 1.2% 0.8% -1.2% 17.5% Operating Profit 5.5% 3.9% 1.6% 0.4% -1.5% Cuervo Source: Company Audited Financial Statements and most recent publicly available annual fina
Slide 19: Value of Heritage and Corporate Governance
Value of Heritage and Corporate Governance A True Mexican Success Story Lasting Over 250 Years Supported by Robust Corporate Governance 1758 2019 Post IPO Ownership Independent Board 1795 First license ever to sell tequila 15% 66% 44% 1812 Oldest distillery in Mexico 85% Beckmann Family Independent
Slide 20: Financial Results
Financial Results 20
Slide 21: Statement of comprehensive income
Statement of comprehensive income Six months ended June 30, 2019 Six months ended June 30, 2018 Year over year variance (U.S. $)(1) (Pesos) % of net sales (Pesos) % of net sales $ % (Figures in millions, except per share amounts) Net sales 639 12,247 11,483 763 6.6 Cost of goods sold 295 5,657 46.2
Slide 22: IFRS 16 adoption effect
IFRS 16 adoption effect 1H19 without IFRS 16 effect 1H19 with IFRS 16 effect Effects in profit (Figures in millions) (Pesos) % of net sales (Pesos) % of net sales from IFRS 16 Operating profit 2,234 18 2,234 19 0 Financial results, net 80 1 125 1 45 Consolidated net income 1,606 13 1,561 14 -45 Depr
Slide 23: H1 2019 Statement of financial position
H1 2019 Statement of financial position June 30, 2019 December 31, 2018 (Figures in millions) (1) (U.S. $) (Pesos) (Pesos) Assets Cash and cash equivalents 454 8,704 12,028 Accounts receivable, net 290 5,556 8,536 Inventories, net 599 11,490 8,162 Other current assets 168 3,229 2,502 Total current a
Slide 24: H1 2019 Cash flow statement
H1 2019 Cash flow statement (Figures in millions) Six months ended June 30, 2019 Six months ended June 30, 2018 (U.S. $)(1) (Pesos) (Pesos) Operating activities Income before income taxes 110 2,109 2,206 Items relating to investing activities: 11 209 177 Items relating to financing activities: 62 1,
Slide 25: Investor relations contact
Investor relations contact Mariana Rojo marojo@cuervo.com.mx Alfredo Rubio alrubio@cuervo.com.mx 25
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