Becle ratings affirmed at BBB as Fitch sees stable leverage and margin support

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Becle BBB rating and outlook

Highlights

Becle's 'BBB' ratings with Stable Outlook are affirmed by Fitch, citing its global tequila leadership, strong brands and wide geographic reach with 72% of revenue from tequila.
Fitch forecasts weak near-term revenue with sales volumes falling mid-single digits in 2026 and low-single digits in 2027, while Mexico is seen recovering by end-2027.
EBITDA margin is expected at around 20% and free cash flow at 6% margin through 2028, with MXN4.8 billion debt repaid in 2025 and net leverage at 0.9x by June 2026.

Rating rationale and operating outlook

As reported by Fitch Ratings, Becle's Long-Term Foreign and Local Currency Issuer Default Ratings and senior unsecured notes are affirmed at 'BBB', with a Stable Outlook.

The agency says the ratings reflect Becle's leading global position in tequila, backed by vertically integrated production and distribution operations, strong brand recognition through Jose Cuervo and broad geographic diversification across more than 85 countries. Tequila accounts for nearly 72% of total revenue, while about 84% of net revenue comes from the U.S., Canada and Mexico, the company's key markets.

Fitch expects weak near-term revenue growth, with low-single-digit declines in constant-currency sales through 2026 and part of 2027. Sales volumes are projected to fall by the mid-single digits in 2026 and by the low-single digits in 2027, reflecting the U.S. distributor transition, softer demand and increased competition in the U.S. and Canada, while organic growth in Mexico is expected to recover by the end of 2027 and the rest of the world remains resilient.

Margins, cash flow and balance sheet impact

Fitch expects EBITDA margins to hold at around 20% over the next few years, helped by low agave input costs and favorable foreign exchange rates. Agave prices are expected to remain low during 2026 to 2028 because of supply-demand imbalances, while Becle's pricing actions, premiumization strategy and advertising efficiency are expected to offset possible cost pressure.

The agency also expects free cash flow to remain positive and average a 6% margin over the next three years, including capital expenditure equal to 4% of revenue and average annual dividend distributions of around MEX1.6 billion during 2026 to 2028. Fitch says Becle's cash generation and available cash balances position the company to absorb a moderate increase in working capital needs.

Becle's conservative capital structure remains a key support for the rating. After repaying about MXN4.8 billion of debt in 2025 tied to senior notes and syndicated loans, the company is expected to keep debt levels stable through 2027, and Fitch's base case assumes MXN2.8 billion of debt reduction in 2028 funded by internal cash flow; for the 12 months ended June 30, 2026, gross leverage stands at 2.0x and net leverage at 0.9x.

Our earlier report on Fitch’s BBB rating affirmation for Ipsos explained that the Stable Outlook was supported by diversification, solid free cash flow generation, and conservative leverage even as the group pursues acquisition-led growth. It also noted that Fitch expected pressure on growth and margins through 2026, followed by a gradual recovery from 2027 as execution improves, with leverage remaining contained despite a stepped-up M&A pace.

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