Becle, S.a.b. De C.v. · BMV:CUERVO
Becle, S.a.b. De C.v — Investor Presentation (November 2018)
23 slides from Becle, S.a.b. De C.v's investor presentation, Nov 20, 2018
Slide 1: Corporate Presentation
Becle, S.A.B. de C.V. Corporate Presentation Nov, 20 2018
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 – Combined Financial Statements TTM market share(1) Volume
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 – 2017 As % of volume – 2017 Total Market Size 31.2mm 9L Cases 1st 29.7% United States (56.2% of Global Volume) 12.9% 24.5% 1st 7.8% 6.8% 4.6% Rest of the World 2015 (15.1% 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 Non-Tequila Brands
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 / Ultra Premium Premium Premium / Premium Standard Ultra Premium
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 3 Prestige Growing above category average and gaining market share in the U.S. Whis
Slide 9: … and Value-Enhancing M&A
… and 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 #2 #3 in the U.S. by in the world by volume volume ✓ Category with Attractive Growth P
Slide 10: Right Brands / Right Categories / Right Markets
Right Brands / Right Categories / Right Markets U.S. Spirits – Growth Spirits Categories – Global Market Share 2013-2017 Volume CAGR % Volume – 2017 13.5% Vodka 13.8% 6.0% 4.9% 1.6% 2.4% (0.9%) (1.0%) (1.1%) Whiskey 0.3% 8.6% Tequila Irish U.S. Vodka Gin Rum Scotch Total Whiskey Whiskey Spirits Iris
Slide 11: Global Reach and Established U.S. Platform
Global Reach and Established U.S. Platform Continued Geographic Diversification: U.S. and Canada Represent ~63% of the Company’s Revenues in TTM Net Sales by Region 2013A ROW 2018 TTM ROW 10% 13% 1 in Tequila 2 in Irish Whiskey Mexico 33% 24% Mexico 57% U.S. and 63% U.S. and Canada Canada Source: Co
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 11A – 17A 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 – 2017 Cuervo derived ~85% of its 2017 net sales in value from the (1) U.S., Canada and Mexico… $2.7 $49.0 $51.1 ~US$490 MM Po
Slide 14: Integrated Platform…
Integrated Platform… 1 Agriculture 2 Production Competitive Advantage Resulting from Appellation of Flagship Distilleries and Bottling Facilities Support Origin for Tequila Route-to-Market Strategy La Rojeña (Tequila) Tamaulipas Camichines (11 Municipalities) (Tequila) Guanajuato EDISA Bottling faci
Slide 15: … with Unique Route-to-Market Distribution
… with Unique Route-to-Market Distribution 3 Distribution Own Distribution Platform to Control Route-to-Market and Brand Building Strategy Volume through own distribution network • Vertical integration of profits Benefits from ~25% in 2007 to ~90% as of 2015 • Control and focus of own brands Mexico
Slide 16: Route-to-Market Control Was Key to U.S. Success
Route-to-Market Control Was Key to U.S. Success Sales Turnaround Story in the U.S.: Jose Cuervo Especial Case Study Key Turnaround Initiatives Since Since Proximo Proximo took took over the over the distribution 1 Enhancing brand health distribution of Jose Cuervo of Jose volume from Diageo, Cuervo
Slide 17: Track Record of Profitable Growth and Cash Flow Generation Capacity…
Track Record of Profitable Growth and Cash Flow Generation Capacity… Combined Volume Combined Net Sales (000s of 9 Liter Cases) (Ps$MM)(1) 20,424 20,491 25,958 18,248 24,396 17,274 14,210 18,475 15,314 12,305 2013A 2014A 2015A 2016A 2017A 2013A 2014A 2015A 9M15A 9M16A Combined EBITDA(2) and Margin C
Slide 18: Above Sector Growth
Above Sector Growth Income Statement Past Performance – 2013A-2017A CAGR (Fiscal Years, in Reporting Currency) 20.5% CAGR in US$ Net Sales 9.3% 6.5% 1.6% 1.2% 1.2% -2.1% (1) 28.2% CAGR in US$ Operating Profit 16.3% 2.7% 2.4% 1.3% 1.2% -1.8% (1) Source: Company Audited Financial Statements and most r
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 2017 Post IPO Ownership Independent Board 1795 First license ever to sell tequila 15% 29% 1812 Oldest distillery in Mexico 85% 71% Beckmann Family Independent
Slide 20: Financial Results
E Jose Cuervo B Financial Results 20
Slide 21: YTD Sept Financial statements summary MXN
YTD Sept Financial statements summary MXN As of Sept 30 2018 2017 Act 2018 Var (18-17) (MXN MM) Abs %NSV Abs %NSV Abs % Ex Rate 18.9351 19.0275 0.1 0.5 Volume 9L 14,075 13,976 -99 -0.7 Net Sales 17,620 17,890 270 1.5 Cost of goods 6,368 36.1% 7,498 41.9% 1,130 17.8 Gross profit 11,252 63.9% 10,392 5
Slide 22: Q3 2018 Balance Sheet (MXN)
Q3 2018 Balance Sheet (MXN) Assets Dec 31, 2017 Sep 30, 2018 (Ps$ MM) 2017 2018 Cash and cash equivalents 19,996 12,120 Accounts receivable, net 7,260 5,235 Inventories, net 7,419 8,552 Other current assets(1) 1,923 3,516 Total Current Assets 36,598 29,423 Inventories (Non-current) 3,878 6,135 Prope
Slide 23: Q3 2018 Cash Flow (MXN)
Q3 2018 Cash Flow (MXN) Dec 31, 2017 Sep 30, 2017 Sep 30, 2018 (Ps$ MM) 2017 2017 2018 Income before income taxes 5,955 3,360 2,744 Items related to investing activities 447 338 388 Items related to financing activities -464 900 -462 Changes In Working Capital -3,895 -2,117 -4,329 Net Cash provided
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