Becle (CUERVO) Q2 2025 earnings summary

Executive summary

• Net sales increased 2.8% year-over-year to COP 11.5 billion in Q2 2025, driven by FX tailwinds, premiumization, and product mix, despite a 4.2% volume decline.

• EBITDA margin expanded by 270 bps to 23.4%, with healthy cash generation and sixth consecutive quarter of gross margin expansion.

• Net income surged 300.2% year-over-year to COP 2 billion, mainly due to higher operating income and significant FX gains.

• Core tequila segment showed resilience, with premium offerings outperforming and market share gains in Mexico.

• Management remains focused on disciplined execution, brand development, and long-term value creation amid global volatility.

Financial highlights

• Net sales: COP 11.5 billion (+2.8% YoY); EBITDA: MXN 2.7 billion (+16.7% YoY); EBITDA margin: 23.4% (+270 bps YoY).

• Net income: COP 2 billion (+300.2% YoY); EPS: COP 0.56.

• Operating income: COP 2.4 billion (+15.6% YoY); operating margin: 20.6% (+230 bps YoY).

• Gross margin: 55.1% (+80 bps YoY); continued expansion, though at a slower pace due to regional mix shifts.

• Lease-adjusted net leverage reduced to 1.7x from 2.6x a year ago.

Outlook and guidance

• Full-year guidance reaffirmed, expecting continued margin expansion and solid profitability.

• Management observes early signs of improvement in some markets and continues to align shipments and depletions.

• Near-term volatility anticipated in US and Canada; focus remains on premiumization and adapting to consumer trends.

• Expectation of sustained growth in Asia, stabilization in Europe, and emerging opportunities in Africa and Middle East.

• AMP expenses as a percentage of net sales decreased to 20.0%, in line with full-year guidance of 20-22%.