Earnings release
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1 Becle, S.A.B. de C.V. Reports 1Q25 Unaudited Financial Results Mexico City, Mexico, April 29th, 2025 / -- BECLE, S.A.B. de C.V. (“Cuervo”, “B ecle” or the “Company”) (BMV: CUERVO) announced today its financial results for the first quarter ended March 31st, 2025. All figures in this release are derived from the Company’s interim consolidated financial statements as of March 31st, 2025, and for the three-month period that ended on the same date, which are prepared in accordance with International Financial Reporting Standards (IFRS). First Quarter 2025 Highlights • Gross margin increased 570 bps and EBITDA margin increased 270 bps. • Generated $1.5 billion pesos in net cash from operating activities. • Reduced lease-adjusted net leverage to 1.9x. 1Q25 % Sales 1Q24 % Sales YoY % ∆ Like-for-like (2) Volume (1) 4,930 - 5,336 - -7.6% - Net Sales 9,628 100% 8,960 100% 7.5% -6.9% Gross Profit 5,562 57.8% 4,664 52.1% 19.2% -3.9% Net Income 1,166 12.1% 1,010 11.3% 15.5% 38.0% EBITDA 2,167 22.5% 1,776 19.8% 22.0% -10.3% (1) Volume in 000s nine-liter cases. (2) Pro forma figures on a constant currency basis. All abovementioned increases and decreases are compared to the corresponding period from last year. Management commentary “As we open 2025, we are encouraged by our ability to manage the business effectively despite ongoing industry pressures and cautious consumer sentiment. The resilience of our core categories, especially Tequila, and continued execution of our premiumization strategy have reinforced our position in the market. With disciplined brand investment, strong cash flow generation, and a focus on long-term value creation, we remain confident in our ability to navigate near-term challenges while advancing our growth agenda.”
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2 Volume by Region 1Q25 (in 000s nine-liter cases) Region 1Q25 1Q24 % ∆ U.S. & Canada 3,070 3,186 -3.6% Mexico 1,113 1,283 -13.3% Rest of the World 747 867 -13.8% Total 4,930 5,336 -7.6% During the first quarter of 2025, total volume decreased 7.6% to 4,930 million nine -liter cases. In the U.S. and Canada, volume decreased 3.6% year -over-year, driven by challenges in the Ready-to-Drink and Non-Alcoholic categories, partially offset by a st rong performance in Tequila. In Mexico, volume contracted 13.3% due to ongoing market weakness and wholesaler destocking. Meanwhile, the Rest of the World (“RoW”) region’s volume declined 13.8% year -on-year, mainly impacted by high inventory levels, which led to a notable disparity between shipments and depletions. Volume by Category 1Q25 (in 000s nine-liter cases) Category 1Q25 1Q24 % ∆ Jose Cuervo 1,707 1,777 -3.9% Other Tequilas 1,125 1,133 -0.7% Other Spirits 877 968 -9.4% Sub-total Spirits 3,709 3,878 -4.4% Non-alcoholic and Other 511 630 -18.9% RTD 710 828 -14.3% Total 4,930 5,336 -7.6% * Excluding the RTD category, volume would have declined 6.4%. Volume of ‘Jose Cuervo’ decreased 3.9% compared to the same period in 202 4 and represented 3 4.6% of total volume for the first quarter of 202 5. ‘Other Tequilas’ brands accounted for 22.8% of total volume, with volume down 0.7% compared to the prior year , enhancing premiumization mix. ‘Other Spirits’ brands represented 17.8% of total volume and decreased 9.4% in volume compared to the first quarter of 2024. Volume of ‘Non-alcoholic and Other’ contributed 10.4% of total volume and decreased 18.9% compared to the previous year. Volume of ‘RTD’ represented 14.4% of total volume and d ecreased 14.3% compared to the prior year period. 62.3% 22.6% 15.1% 34.6% 22.8% 17.8% 10.4% 14.4%
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3 Net Sales by Region 1Q25 (in P$, millions) Region 1Q25 1Q24 % ∆ % ∆* U.S. & Canada 6,234 5,190 20.1% 0.0% Mexico 1,962 2,277 -13.8% -13.8% Rest of the World 1,432 1,493 -4.1% -20.1% Total 9,628 8,960 7.5% -6.9% *Pro forma figures on a constant currency basis. First quarter 2025 net sales increased 7.5% year-on-year to P$9,628 million pesos, mainly driven by favorable geographic mix and positive currency translation effects. In the U.S. and Canada, net sales rose 20.1% year-on-year, despite a 3.6% decline in volume. This reflects a product mix skewed towards higher sales per case brands, alongside favorable foreign currency effects from the depreciation of the Mexican peso against the U.S. dollar. During the same period, net sales in Mexico decreased 13.8% year -over-year, primarily due to volume declines caused by ongoing market contraction. Net sales in the RoW region declined 4.1% compared to the first quarter of 2024, primarily due to lower volumes. Net Sales by Category 1Q25 (in P$, millions) Category 1Q25 1Q24 % ∆ Jose Cuervo 3,371 3,068 9.9% Other Tequilas 3,524 3,242 8.7% Other Spirits 1,826 1,744 4.7% Sub-total Spirits 8,721 8,054 8.3% Non-alcoholic and Other 294 306 -3.9% RTD 612 600 2.0% Total 9,628 8,960 7.5% *Excluding the RTD category, Net Sales would have increased 7.8%. Net sales of ‘Jose Cuervo’ increased 9.9% compared to the same period of 202 4, representing 3 5.0% of total net sales for the first quarter of 202 5. Net sales of ‘Other Tequilas’ brands increased 8.7% compared to the prior year period, accounting for 3 6.6% of total net sales. ‘Other Spirits’ brands represented 19.0% of total net sales in the period and increased 4.7% compared to the first quarter of 2024. ‘Non -alcoholic and Other’ represented 3.1% of total net sales and decreased 3.9% compared to the prior year period. ‘RTD’ represented 6.4% of total net sales and increased 2.0% compared to the previous year. 64.7% 20.4% 14.9% 35.0% 36.6% 19.0% 3.1% 6.4%
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4 Gross Profit The gross margin increase was primarily due to lower input costs, reflecting a decline in agave market prices , a favorable geographic mix , and favorable foreign currency effects from the depreciation of the Mexican peso against the U.S. dollar. However, this was partially offset by tactical price adjustments across regions in the second half of 2024. Advertising, marketing & promotion (“AMP”) As a percentage of net sales, AMP remained flat at 20.9%, aligning with our full -year guidance of 20-22%. Adjusting for FX, AMP decreased 9.3% compared to the first quarter of 2024. Distribution 1Q25 % Sales 1Q24 % Sales YoY % ∆ 412 4.3% 365 4.1% 12.7% The increase in distribution expenses was primarily due to unfavorable foreign currency effects. Adjusting for FX, distribution decreased 1.7% compared to the first quarter of 2024. 1Q25 % Sales 1Q24 % Sales YoY % ∆ 5,562 57.8% 4,664 52.1% 19.2% 1Q25 % Sales 1Q24 % Sales YoY % ∆ 2,014 20.9% 1,870 20.9% 7.7% 52.1% 57.8% 1Q24 1Q25 20.9% 20.9% 1Q24 1Q25 4.1% 4.3% 1Q24 1Q25 +570bps +20bps
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5 Selling and administrative (“SG&A”) 1Q25 % Sales 1Q24 % Sales YoY % ∆ 1,260 13.1% 1,018 11.4% 23.8% SG&A expenses increased 23.8% mainly driven by unfavorable foreign currency effects. Adjusting for FX, SG&A increased 9.7% compared to the first quarter of 2024. Operating Income 1Q25 % Sales 1Q24 % Sales YoY % ∆ 1,838 19.1% 1,506 16.8% 22.1% Operating margin increased 230-basis points to 19.1%, up from 16.8% in the same period of 2024. This increase was mainly driven by lower input costs and favorable foreign currency effects from the depreciation of the Mexican peso against the U.S. dollar. However, higher AMP, SG&A, and distribution expenses partially offset these gains. EBITDA 1Q25 % Sales 1Q24 % Sales YoY % ∆ 2,167 22.5% 1,776 19.8% 22.0% EBITDA margin increased 2 70-basis points to 2 2.5% versus 19.8% in the same period of 2024. 11.4% 13.1% 1Q24 1Q25 16.8% 19.1% 1Q24 1Q25 19.8% 22.5% 1Q24 1Q25 +170bps +230bps +270bps
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6 Net Financial Result The net financial result recorded an expense of P$262 million pesos in the first quarter of 2025, compared to an expense of P$103 million pesos in the same period of 2024. This increase was primarily driven by a P$53-million-peso year-over-year foreign exchange loss, as the depreciation of the Mexican Peso negatively impacted our net cash exposure in U.S. dollars. Net Income 1Q25 % Sales 1Q24 % Sales YoY % ∆ 1,166 12.1% 1,010 11.3% 15.5% Consolidated net income in the first quarter of 2025 increased 15.5% to P$1,166 million pesos, up from P$1,010 million pesos in the same period of 2024. This was mainly driven by an increase in operating income, partially offset by a higher net financial r esult and income taxes. Net margin stood at 12.1%, compared to 11.3% in the first quarter of 2024. Earnings per share (EPS) was P$0.32 pesos in the first quarter of 2025. Adjusting for FX, net income increased 38.0% when compared to the first quarter of 2024. Financial position and cash flow As of March 31, 2025, cash and cash equivalents were P$11,014 million pesos (an increase of P$3,448 million pesos versus the same period of the previous year). Total financial debt stood at P$26,679 million pesos. During the first quarter of 2025, the Company generated P$1,508 million pesos in net cash from operating activities and deployed P$712 million pesos in net investing activities. Net cash used in financing activities amounted to P$ 530 million for the period ended on March 31, 2025, compared to P$512 million pesos in the previous year. Quarterly Financial Ratios 1Q24 2Q24 3Q24 4Q24 1Q25 Lease adjusted Net Debt / EBITDA 2.6x 2.6x 2.3x 2.1x 1.9x 11.3% 12.1% 1Q24 1Q25 +80bps
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7 IFRS 9; IFRIC 16: Net investment hedge disclosures Financial instruments to hedge net investments in foreign operations Effective January 1st, 2020, the Company designated its US$500 million Senior Notes due 2025 as a hedging instrument for its net investment in Sunrise Spirits Holding, Inc., with the objective of mitigating the exchange rate risk arising between the functional currency of these operations and the functional currency of the h olding company that has such investment. However, on September 27 th, 2021, the Company announced a cash tender offer and a consent solicitation to the holders of outstanding 2025 Senior Notes in circulation. The Company paid a total principal amount of US$346.6 million (Ps7,202 million) of the 2025 Senior Notes (69.3% of the original issuance of US$500 million). Therefore, the coverage designated by this bond is US$153.4 million (Ps3,192 million). On October 31st, 2021, the Company designated a new hedge in the amount of US$346 .6 million (Ps7,202 million), which is part of the Company's US$800 million Senior Notes due 2031, as a hedging instrument for its net investment in Sunrise Spirits Holdings, Inc. On August 31 st, 2022, the Company designated a new hedge in the amount of US$150 million (Ps2,999 million), which is part of the Company's US$800 million Senior Notes due 2031, as a hedging instrument for its net investment in Sunrise Spirits Holdings, Inc. On September 30th, 2024, the Company designated a new hedge in the amount of US$150 million (Ps2,944 million), which is part of the Company's US$800 million Senior Notes due 2031, as a hedging instrument for its net investment in Sunrise Spirits Holdings, Inc. The total coverage established by the Company is US$800 million. The Company formally designated and documented the hedging relationship, setting the objectives, risk -hedging strategy, identification of the hedging instrument, hedged item, nature of the risk to be hedged, and effectiveness assessment methodology. Since the exchange rate hedging relationship is clear, the method the Company used to assess the effectiveness consisted of a qualitative effectiveness test by comparing the critical terms between the hedging instruments and the hedged items. Accounting policy Net investment hedge in a foreign operation The Company applies hedge accounting to the foreign exchange risk resulting from its investments in foreign operations because of changes in exchange rates arising between the functional currency of that operation and the functional currency of the holding company, regardless of whether the investment is held directly or through a sub -holder. The change in exchange rates is recognized in Other Comprehensive Income as part of the translation effect when the foreign operation is consolidated. To this end, the Company designates the debt denominated in foreign currency as hedging instruments; therefore, the exchange effects arising from such debt are recognized in Other
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8 Comprehensive Income, in the translation effects line, to the extent that the hedge is effective. When the hedge is not effective, exchange rate differences are recognized in foreign exchange gain or loss in the consolidated income statement. Conference Call The Company plans to host a conference call for investors at 8:30 a.m. Mexico City Time (10:30 a.m. E.T.) on, Wednesday, April 30th, 2025, to discuss the Company’s first quarter 2025 unaudited financial results. Interested parties may also listen to a simultaneous webcast of the conference call by logging in and registering directly at: https://tinyurl.com/Becles1Q25ConferenceCall. 1Q25 Unaudited Financial Results Conference Call and Webcast Details Date: Wednesday, April 30th, 2025 Time: 8:30 a.m. Mexico City Time (10:30 a.m. EDT) Participants: Juan Domingo Beckmann (CEO) Rodrigo de la Maza (CFO) How to join the conference call via the internet: 1. Please sign up ahead of time to access the webcast at: https://tinyurl.com/Becles1Q25ConferenceCall 2. After registering, you will receive a confirmation email with instructions on how to join. 3. Webinar ID: 884 7631 6978 How to join the conference call via telephone: 1. Dial one of the Mexican or International numbers below. 2. Enter the webcast ID (884 7631 6978), followed by the # sign. 3. If the meeting has not yet started, press # to wait. 4. You will be prompted to enter your unique participant ID. Press # to skip. Dial-in: Mexico +52 558 659 6002 United States +1 646 558 8656 United Kingdom +44 330 088 5830 Brazil +55 21 3958 7888 Other international numbers available at: https://us02web.zoom.us/u/knEOJCJkC About Becle Becle is a globally renowned company in the spirits industry and the world’s largest producer of tequila. Its extraordinary portfolio of over 30 spirits brands, some of them owned, some of them agency brands distributed only in Mexico, has been developed t hroughout the years
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9 to participate in key categories with high growth potential, serving the world’s most important alcoholic beverage markets and delivering on key consumer preferences and tendencies. Becle’s portfolio strength is based on the profound legacy of its iconic internally developed brands such as Jose Cuervo®, combined with complementary acquisitions such as Three Olives®, Hangar 1®, Stranahan’s®, Bushmills®, Pendleton®, Boodles® and Proper No. Twelve®, as well as a relentless focus on innovation that over the years has created renowned brands such as 1800®, Maestro Dobel®, Centenario®, Kraken®, Jose Cuervo® Margaritas and B:oost®. Becle’s brands are sold and distributed in more than 85 countries. EBITDA EBITDA is a measure used in the Company’s financial analysis that is not recognized under IFRS but is calculated from amounts that derive from the Company’s financial statements. We calculate EBITDA as net income plus depreciation and amortization, income tax expense, and interest expense, less interest income, plus foreign exchange gain (loss). EBITDA is not an IFRS measure of liquidity or performance, nor is EBITDA a recognized financial measure under IFRS. We believe that EBITDA can be useful to facilitate comparisons of operating performance between periods on a combined basis, but these metrics may be calculated differently by other issuers. EBITDA should not be construed as an alternative to (i) net income as an indicator of the Company’s operating performance or (ii) cash flow from operating activities as a measure of the Company’s liquidity. Disclaimer This press release contains certain forward-looking statements which are based on Becle’s current expectations and observations. Actual results obtained may vary significantly from these estimates. The information related to future performance contained in this press release should be read jointly with the risks included in the “Risk Factors” section of the Annual Report filed with the Comisión Nacional Bancaria y de Valores (Mexican National Banking and Securities Commission). This information, as well as future statements made by Becle or by any of its legal representatives, either in writing or verbally, may vary significantly from the actual results obtained. These forward-looking statements speak only as of the date on which they are made, and no assura nce can be made as to the actual results obtained. Becle undertakes no obligation and does not intend to update or review any such forward -looking statements, whether as a result of new information, future developments or other related events. Investor Relations: Bryan Carlson bcarlson@cuervo.com.mx Investor Relations ir@cuervo.com.mx Corporate Affairs: Alfredo López alopez@cuervo.com.mx
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10 Consolidated Income Statements First quarter ended March 31, 2025 First quarter ended March 31, 2024 Year over year variance (Figures in millions, except per share amounts) (U.S. $)(1) (Pesos) % of net sales (Pesos) % of net sales $ % Net sales 474 9,628 8,960 668 7.5 Cost of goods sold 200 4,066 42.2 4,296 47.9 (230) (5.3) Gross profit 274 5,562 57.8 4,664 52.1 897 19.2 Advertising, marketing and promotion 99 2,014 20.9 1,870 20.9 144 7.7 Distribution 20 412 4.3 365 4.1 46 12.7 Selling and administrative 62 1,260 13.1 1,018 11.4 242 23.8 Other (income) 2 37 0.4 (95) (1.1) 132 N/A Operating income 90 1,838 19.1 1,506 16.8 333 22.1 Interest income (5) (110) (1.1) (101) (1.1) (9) 8.8 Interest expense 16 319 3.3 330 3.7 (11) (3.5) Foreign exchange loss (gain) 3 53 0.6 (126) (1.4) 179 N/A Financing results 13 262 2.7 103 1.2 159 153.9 Income before income taxes 78 1,576 16.4 1,402 15.7 174 12.4 Income taxes 20 410 4.3 393 4.4 17 4.4 Consolidated net income 57 1,166 12.1 1,010 11.3 157 15.5 Non-controlling interest 0 2 0.0 5 0.1 (3) (65.1) Controlling interest 57 1,164 12.1 1,004 11.2 160 15.9 Depreciation and amortization 16 328 3.4 270 3.0 58 21.6 EBITDA 107 2,167 22.5 1,776 19.8 391 22.0 Earnings per share 0.02 0.32 0.28 0.04 15.5 Shares (in millions) used in calculation of earnings per share 3,591 3,591 3,591 (1) U.S. dollars translated at 20.32 Mexican pesos solely for the convenience of the reader.
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11 Consolidated Statements of Financial Position March 31, 2025 December 31, 2024 (Figures in millions) (U.S. $)(1) (Pesos) (Pesos) Assets Cash and cash equivalents 542 11,014 10,685 Trade receivables 468 9,511 12,038 Related parties 1 23 24 Recoverable income tax 113 2,288 1,372 Other recoverable taxes and receivables 61 1,241 647 Inventories 656 13,334 13,341 Financial Instruments at fair value through profit and loss 2 33 33 Biological assets 109 2,211 2,562 Prepayments 56 1,132 1,106 Total current assets 2,007 40,786 41,808 Inventories 418 8,500 8,134 Biological assets 492 10,000 9,531 Investments in associates 76 1,541 1,470 Property, plant and equipment 883 17,943 17,834 Intangible assets 999 20,308 20,004 Goodwill 332 6,752 6,627 Right-of-use assets 101 2,054 2,266 Deferred income tax 197 4,007 4,860 Employee benefits 32 646 640 Other assets 4 73 71 Total non-current assets 3,535 71,823 71,436 Total assets 5,542 112,609 113,244 Liabilities Senior notes 165 3,347 3,207 Syndicated loan 2 38 43 Trade payables 240 4,878 5,483 Related parties 0 4 3 Lease liabilities 23 466 513 Other accounts payable 307 6,231 6,590 Total current liabilities 736 14,963 15,838 Senior Notes 764 15,520 15,456 Syndicated loan 383 7,774 7,749 Lease liabilities 82 1,662 2,049 Environmental reserve 8 159 157 Other liabilities 12 236 258 Deferred income taxes 202 4,102 4,941 Total non-current liabilities 1,450 29,454 30,610 Total liabilities 2,186 44,417 46,449 Stockholders’ equity Stockholders’ equity attributable to controlling interest 3,353 68,119 66,723 Non-controlling interest 4 74 72 Total stockholders’ equity 3,356 68,193 66,795 Total liabilities and stockholders’ equity 5,542 112,609 113,244 (1) U.S. dollars translated at 20.32 Mexican pesos solely for the convenience of the reader.
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12 Consolidated Statements of Cash Flow Three months ended March 31, 2025 Three months ended March 31, 2024 (Figures in millions) (U.S. $)(1) (Pesos) (Pesos) Operating activities: Income before income taxes 78 1,576 1,402 Adjustment from non-cash items: Depreciation and amortization 16 328 270 Loss on sale of property, plant and equipment 1 17 25 Non-cash items (0) (9) (10) Interest income (5) (110) (101) Unrealized foreign exchange profit (2) (37) (144) Interest expense 12 237 241 Subtotal 99 2,003 1,683 (Increase) decrease in: Trade receivables 126 2,551 2,521 Related parties 0 3 (9) Other recoverable taxes and other receivables (28) (561) 281 Inventories (8) (166) (14) Biological assets (4) (91) (185) Prepayments (1) (23) (59) Other assets 6 116 154 Increase (decrease) in: Trade payable (30) (615) 367 Other accounts payables (68) (1,382) (1,897) Employee benefits (0) (2) (2) Income taxes paid or recoverable (16) (325) (645) Net cash from operating activities 74 1,508 2,196 Investing Activities: Property, plant and equipment (15) (295) (398) Intangible assets (1) (19) (18) Investment in associates and joint ventures (25) (507) (86) Interest income 5 110 101 Net cash flows used in investing activities (35) (712) (401) Financing activities: Interest lease payment (19) (392) (344) Interest paid (7) (138) (168) Net cash flows used from financing activities (26) (530) (512) Net increase (decrease) of cash and cash equivalents 13 266 1,284 Cash and cash equivalents at beginning of year: At beginning of the period 526 10,685 6,367 Effects of exchange rate changes on cash and cash equivalents 3 63 (84) Cash and cash equivalents at end of period 542 11,014 7,566 (1) U.S. dollars translated at 20.32 Mexican pesos solely for the convenience of the reader.