Becle SAB de CV
BMV:CUERVO
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Becle SAB de CV
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Good morning and thank you for joining Becle's second quarter unaudited financial results call.
During this call, you may hear certain forward-looking statements. These statements may relate to our future prospects, developments and business strategies that may be identified by our use of terms and phrases such as anticipate, believe, could, estimate, expect, intend, may, plan, predict, project, will, goals, target, strategy and similar terms and phrases and may include references to assumptions. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those in forward-looking statements. For all the foregoing reasons, you are cautioned against relying on such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Now I'll welcome Mariana Rojo, Corporate Treasurer and Investor Relations Director.
Good morning, everyone. I'm Mariana Rojo, Corporate Treasurer and Investor Relations Director. Thank you for joining us to discuss the unaudited financial results for the quarter ended June 30, 2020, of Becle, commercially known as Jose Cuervo. I am joined today by Juan Domingo Beckmann, Chief Executive Officer; Michael Keyes, President and CEO of Proximo Spirits; Steve Shanley, Senior VP of Commercial Strategy for Proximo; Luis Félix, Managing Director of Mexico and LATAM; Gordon Dron, Managing Director of EMEA and APAC regions; and Fernando Suárez, CFO.
Before we begin, I would like to remind you that the figures discussed on this call were prepared in accordance with the international financial reporting standards, or IFRS, and published in the Mexican Stock Exchange. The information for the second quarter of 2020 is preliminary and is provided with the understanding that once financial statements are available, updated information will be shared in the appropriate electronic formats.
[Operator Instructions] Now I will pass the call on to Mr. Juan Domingo Beckmann.
Good morning, and thank you for joining us today to discuss Becle's second quarter results. All of us at Becle hope that each and every one of you continue to remain safe and healthy, and we hope you are all successfully navigating the unprecedented and challenging times.
I will begin with opening comments, and then I will ask Mike Keyes to discuss performance of our U.S. and Canada business unit. Luis Félix will review our Mexico and Latin American results. Gordon Dron will discuss our results in the EMEA and APAC regions, and Fernando Suárez will then walk you through our financial results.
The second quarter had both challenges and opportunities across our regions. We continue to face the global COVID-19 pandemic, creating an environment that has proven to be a challenge in every aspect of our lives. And we are hopeful we have started moving towards recovery, but are cautious, and we continue to navigate these ever-changing landscapes towards the new normal, whatever that is.
At Becle, we continue to support and monitor our supply chain by closely working with our vendors and distribution partners to ensure we can support our customers globally. The safety of our supply chain, customers and employees remains at the forefront of every decision. Many of our employees continue to work remotely from home, while maintaining their normal business duties. We have taken extra precautions for those who need to be present in our production facilities and continue to follow all global guidelines and mandates by region to ensure everyone's health and well-being.
During the second quarter, as you will hear in more detail in a minute, we have seen 2 radically different outcomes in our regions, conditions and reactions to the current environment from market to market. Globally, we saw impacts from closures of on-premise channels worldwide as they have been mostly shut down through the quarter. However, this was partially offset by strong growth of off-premise sales in key markets, like the U.S. and Canada, where we manage a portfolio of strong brands in right categories, driving a consolidated net sales increase of 25% and volume increase of 10% year-over-year.
We continue to hold a strong financial position with a solid balance sheet and ample liquidity to better navigate these uncertain times. The strength of our brands and our portfolio recognition in the off-premise channel in certain markets have allowed us to be strategically well positioned to weather this storm, adapt quickly to the changing environment as well as deliver strong financial performance in the first half of the year. We acknowledge the challenges the market presents today, but are confident on our ability to maintain our growth and our ability to premiumize the portfolio of brands in the long term.
Now let me turn the call over to Mike Keyes to discuss our U.S. and Canada results.
Thank you, Juan, and good morning, everyone. We were pleased with our commercial performance in the United States and Canada during the second quarter and for the first half of 2020.
Consumer takeaway in the off-premise for our brands in the United States, as measured by Nielsen, grew over the past 3 months by 67%, outpacing the top 15 suppliers in the industry. Strong wholesaler depletions were also up 40% for the quarter. Our tequila portfolio was up 31%, driven equally by the continued strength in our super premium tequilas and by the increased velocity on Jose Cuervo Especial. Our ready-to-drink margarita category performance was very strong in the second quarter, with depletions up 71%. Our whiskey portfolio grew 23% during the quarter, led predominantly by our Irish brands.
The second quarter was driven by an exceptionally strong off-premise business resulting from the closure of bars and restaurants across both the United States and Canada to various degrees. Our portfolio has benefited from the shift from the on-premise consumption to at-home consumption. Proximo's strength in the ready-to-drink margarita category and the strong distribution of the 1.75 size for many of our key brands were the primary drivers of the increases in depletion growth during the second quarter. Strong consumer takeaway and our depletion growth during the quarter continue to drive strong shipment trends as well. We recognized 34% growth in shipments for the quarter compared to the prior year.
During the quarter, our net sales grew 51%. However, over 60% of the year-on-year growth came from RTDs and our Cuervo mix products, which have lower net sales value rate per case than most of our portfolio. We continue to monitor the shift in consumption patterns and adapt to this changing business environment. We have worked hard to keep our supply chain functioning, while partnering with our distributors to meet the increased demand in the off-premise, and we're developing contingency plans to address the changes that will likely continue to occur in the on-premise.
I will now turn the call over to Luis Félix to discuss Mexico and Latin America.
Thank you, Mike, and good morning, everyone. The second quarter was a real challenge in Mexico, primarily driven by the recent impacts of COVID-19 and the economic conditions of the country.
In Mexico, the spirits industry continues to experience restrictions, even as the country begins to reopen. These impacts are only magnified by the challenging macroeconomic state of the country and the resulting shift towards less expensive liquors and value brands.
Underlying volume in the Mexico region declined 25%, with net sales reducing 33% during the quarter. The second quarter was the first full quarter impacted by the pandemic, with on-premise locations closed, combined with the significant impacts on the wholesaler channel and consumers being more cautious on their spending. As we move into June, we started to see positive trends toward signs of recovery as we work towards the new normal.
In Latin America, the picture was worse than in Mexico as a result of the late onset of the pandemic. We saw a negative impact on shipments, and many countries have placed moratorium on alcohol sales. In addition, economic conditions have been greatly impacted, and local currency have weakened as well.
Despite the challenges in this quarter, we remain hopeful that we begin the process of reopening. The initial trends have been slow but positive, and we are hopeful that we are on the road to recovery.
I will now turn the call over to Gordon Dron to discuss the EMEA and APAC results.
Many thanks, Luis Félix, and good afternoon to everybody from Europe. The impact of COVID-19 and its spread across the EMEA/APAC region has had a more profound effect on performance during the second quarter, with overall sales falling 15% in Q2 versus last year and 10% for the first half. Our major impact of the downturn has been the lag effect caused by the delivery lead times of our tequila business from Mexico to key markets, particularly in Asia Pacific. It was always likely that there would be a delay between the virus impacting the markets and the resulting slowing of sales.
The second significant impact is the closure of the on-premise, which plays a significant role in many Asian and Southern European markets. Tequila, in particular, is highly reliant on this channel, though its closure has significantly impacted depletions in the market.
During the second quarter, duty-free business has also been impacted, although Becle has a very low exposure. And duty-free, in general, only represents less than 2% of our business. Apart from the volume decline we've experienced caused by lockdown, the closure of on-premise and travel retail, we've experienced complete ban of alcohol sales in some markets in the region.
Dealer sales to the end of the first half in Asia Pacific are 28% by volume behind last year. The non-tequila portfolio has fared more favorably. In EMEA, sales were at minus 20%, mainly derived from the on-premise markets of Southern Europe, which were closed throughout the second quarter. Non-tequila brands fared better as the off-premise performed more strongly, most notably in Northern Europe.
The ongoing impact for COVID-19 has resulted in us rephasing our AMP investments, removing investments in areas where consumers were no longer frequenting and investing in e-commerce, in an area which we are seeing growth. We will continue to focus on cost management and on spending where a return can be achieved.
I will now turn the call over to Fernando Suárez to review the financial results.
Thank you, and good morning, everyone. Let me walk you through the second quarter financial results.
During the second quarter, the company reported a 25% increase in consolidated net sales to MXN 8.7 billion on a pro forma or underlying basis. This pro forma or underlying growth adjusts for the nonrenewal of the distribution agreement for the Cholula Hot Sauce brand during April of 2019.
During the second quarter, gross profit increased 21.3% year-over-year to MXN 4.6 billion. And although another sequential quarterly gross margin expansion, gross margin decreased to 53.1% from 54.6% for the second quarter of 2019. This performance primarily reflects year-over-year agave price increases in COGS, partially offset by a Mexican peso depreciation against the U.S. dollar. This depreciation supported our net sales, driving a higher weight to the U.S. and Canada business as a percentage of total net sales.
AMP expenses decreased 14.2% to MXN 1.3 billion when compared to the second quarter of 2019. This AMP expense decrease reflects the company's effort to rephase such expenses and adjust rapidly to potential opportunities as markets reopen. As a percentage of net sales, AMP decreased to 15.8% from 23% in the same prior year period.
In the second quarter of the year, distribution expenses increased 22.4% to MXN 287 million, mainly driven by higher volume, which supports the leverage of fixed costs as well as logistics and fuel cost reduction. As a percentage of net sales, distribution expenses were consistent with the second quarter of 2019.
SG&A expenses increased 9.3% during the second quarter, representing 9.1% of net sales, compared to 10.4% in the second quarter of 2019 driven by SG&A cost control.
Operating income for the second quarter of 2020 increased 74.4% as the operating margin increased 25% from 17.9% in the second quarter of 2019.
Second quarter EBITDA increased 69.3% year-over-year to MXN 2.3 billion, while EBITDA margin was 27.1% versus 20.0% in the same period of last year.
Net financial results were a loss of MXN 214 million during the second quarter. And as a result of our exposure to the exchange rate between the U.S. dollar and the Mexican peso, as of January 1, 2020, the company has designated its $500 million senior notes as a hedge against its net investment in its U.S. operations.
As disclosed in our prior earnings release, the adoption of IFRS 9 or IFRIC 16, net investment hedge accounting treatment, all foreign exchange gains and losses associated with the company's senior notes have been recognized in the other comprehensive income line. The specific amount that resulted from this accounting criteria adoption was MXN 270 million in OCI in the current quarter.
Second quarter consolidated net income increased 69.3% to MXN 1.4 billion, and the net margin increased to 16.7%. Earnings per share were MXN 0.40 for the second quarter.
During the first 6 months of 2020, the company generated net cash from operating activities of MXN 903 million. As of June 30 of this year, cash and cash equivalents were MXN 8.3 billion, and total long-term debt was MXN 11.5 billion. We continue to maintain a solid balance sheet with conservative financial leverage, comfortable debt maturity profile and liquidity to execute our long-term growth strategy.
Regarding our CapEx program. As stated in our previous call, we will maintain our strategic expansion projects, the most significant of which are our 1800 distillery in tequila and the OBD expansion in Northern Ireland. We estimate CapEx for 2020 full year to be around $200 million.
On the capital allocation front, during the general ordinary shareholders' meeting held on June 22, the following actions were approved: first, a cash dividend payment of MXN 0.3081 per share; second, the cancellation of the total amount of treasury shares, representing 28.4 million shares; last, the authorization of a share repurchase program extension of up to MXN 2 billion.
On the debt rating front, during the second quarter, Fitch and S&P affirmed Becle's investment-grade, long-term foreign and local currency ratings of BBB+ and BBB, respectively, both with a stable outlook. During the second quarter, Morgan Stanley announced the company's shares inclusion in the MSCI Mexican composite index effective June 1 of this year.
Given the uncertainty regarding the business outlook, we are not providing full year volume growth guidance at this stage.
Now we will turn the call back to the operator for questions and answers.
[Operator Instructions] Our first question is from Ricardo Alves with Morgan Stanley.
Impressive members. I have a couple of questions. In the U.S., how did depletions perform in the second quarter, particularly later in June or so? I think -- sorry, my line cut off. I think that Mike mentioned it in his preliminary remarks, but just to make sure I got that right. And then also if you could give just a little bit of your overview of how shipments is kicking off into the third quarter.
My other more comprehensive question is -- and the second question is on the U.S. as well, but particularly focused on the ready-to-drink products. But let me -- I think I'll wait until you answer the first question quickly.
Yes. This is -- thank you, Ricardo. This is Mike. Our depletions were excellent, in particular, amongst the brands that I outlined in -- at least at a top level in my opening remarks. We're very well positioned with our portfolio with tequila and ready-to-drinks, and our whiskey business is doing very well. Ready-to-drinks and Jose Cuervo Especial and 1800 are doing exceedingly well right now. They just -- they fit the moment. I sometimes say we're in the right place at a really tough time, though, unfortunately, in our world. And our portfolio fits very nicely with the situation that we're in right now, both from a category standpoint with tequila and ready-to-drinks and whiskey, but also we're uniquely positioned, I think, in the off-premise.
Got it. My follow-up question on ready-to-drink. I mean, the volume was up almost 60% this quarter, if I'm not mistaken, I would assume most of it in the U.S. So could you talk a little bit more about the strength in cocktails in the U.S.? And why do you think your company sold -- it seems to be so well-positioned in the category? Obviously, we should expect some deceleration for the second quarter. But do you think that RTD should remain stronger for longer as a category, even more home consumption so far? I think that kind of perspective would be helpful.
And then perhaps a B question to that would be, looking forward, and this is more in terms of strategic initiatives that you could take, we get that most of your exposure is ready-to-serve margaritas. But given the strength of the category in the U.S., do you envision broadening -- potentially broadening your portfolio in cocktails, perhaps, I don't know, with small presentations, maybe even different liquids, considering tequila is a relatively easy to mix? Just share your thoughts on that.
Yes. So let me -- this is Mike again. Thanks, Ricardo. Let me start from the back to the front because it's easier to remember the last questions than it is from the first question. But with regard to innovation, we constantly are looking at new innovation, not just in the U.S. and Canada, but around the world. And with regard to RTDs, we are testing new products around the world and in the United States.
It's pretty -- I think it's pretty self-explanatory what's going on. We look at this, we're only 4 months into this. But if we look back, we were doing well before the COVID situation, very well. But the COVID situation drove people. I think it's since prohibition, I'm sure, that the on-premise channel has been basically shut down in the United States, and that's a horrible thing for the folks who have businesses in that channel. But our brand, particularly our tequilas and our margaritas, are a benefactor of the fact that the margarita is such an unbelievably popular cocktail, people now can't get it in bars and restaurants. And so our ready-to-drinks give them the opportunity to have their favorite cocktail in a very convenient way for at-home consumption. It's a very unique position for us, and we have quite a bit of business in that category. And as you said, it's up plus 60-plus percent.
It's not unique to us, though, as Proximo around the country and ready-to-drinks and convenient products are doing well, I think, primarily due to the shutdown in the on-premise and certainly due to the seltzer movement.
Our next question comes from Andrea Teixeira with JPMorgan.
This is Peter on for Andrea. I was just curious if you could speak to the trends you were seeing in the U.S. from a channel standpoint, particularly as we move through the up and downs of this pandemic. So first, could you maybe talk to the on- versus off-premise dynamic as some states reopened in the second quarter? And how much consumption shifted back to bars and restaurants, if at all?
And then second, just as we're seeing additional shutdowns and new cases rise in recent weeks, are you seeing kind of the same pronounced shift to at-home consumption back that we saw -- or similar to what we saw in March and April?
Yes. I would say a couple of things. One is that I don't know that we had enough traction with the on-premise reopening to really get a great feel for it. But you all have read the same information that I've read, whereas in certain states, it got up to 30%, 40%, 50% on a per account basis as to where it was before. So as accounts opened up, they got back 30% to 50% perhaps of the business that they had a year ago, but they just weren't open that long. And my own personal opinion is it's going to take a long time, unfortunately, for this very important channel to return to -- I don't even know how we can even talk about it, returning to pre-COVID conditions when many markets are going through a second wave of shutdowns.
And so the other thing that I would just comment on is I hear a lot of people talk about increased consumption. I don't necessarily see that. It's just what I see as a consumption shift -- a necessary consumption shift from bars and restaurants to at-home consumption. And so while there might have been an initial lull because people were nervous and didn't want to be out shopping, I don't see that right now. I just see continued success in the off-premise, and I don't know that, that's changed. It tends to be -- the whole off-premise is doing well. In particular, large big-box retailers are doing very well. And because it's a lot of at-home consumption that has been traded for on-premise consumption, a lot of large size consumption. And I think that, that's true for premium brands all the way up to ultra-premium brands. You'll see more large-format purchases. And like I say, I think it's just going to be a long, long time. Even should we get over some of the challenges of the pandemic, it's just going to be a long time before we return to any pre-COVID situation.
Okay. And then my second question is just more on the lower AMP in the quarter. So 2 parts. First, I mean, how should we be thinking about the rephasing of these expenses in the back half of the year? And then this is just a bit of a longer-term question. But given the strong volume growth, I mean, do you think the company has found a way to be more efficient with AMP, even as we move past the pandemic?
I really appreciate this question, and I appreciate the term rephasing. I do think not just in AMP, in everything, we're learning things that -- I always say, strategy is determined by necessity sometimes. And so as we look at the world changing, I do think we're all getting smarter about things. And so Juan talked about in his opening remarks, I heard 2 things that I just love. One was safety, concern for your safety, our employees' safety. And the second was, I think he used the term adaptability, and sometimes I'll use the word agility.
And so if you looked at pre-March, we were very much planned out for our year, like all companies were, and we had a lot of sports and event sponsorship, things like music festivals. We had a very strong and vibrant live sports television budget. And obviously, those things -- the opportunity to be involved in those things went away with COVID-19. And so we've moved that -- those dollars as best we could on short notice to social media and e-commerce and things like that. But now with baseball and hockey and other things starting to reopen, we will reengage in some of those sponsorships that have been on hold.
And so our intent is not to -- to not support these wonderful brands that are doing unbelievably well right now. Our intent is to be agile and to react and to do the right things for our brands as the opportunities reopen and as we, as you said, get smarter and look for other areas where we've had very, very good success with regard to social media and things like that.
And so Fernando, I don't know if you have anything you want to talk about from a global standpoint. But from a U.S. standpoint, our intent is to be agile and to continue to support these great brands.
Yes. Mike, thank you. Peter, following on to Mike's comment on AMP, and as stated in our previous quarter call regarding AMP rephasing, you should probably look at it more on a year-to-date basis and not just focus on the second quarter AMP as a percentage of NSV print. On a first half basis, as you saw in the numbers, we're actually printing 18.8%, which is south of the full last year, 21.6% AMP that we invested. And our current thinking, as Mike very well explained and articulated, as things reopen and we reengage with the different events and brand sponsorships, our intent is to be closer to the 20% full year. So that's what we would have to say regarding AMP full year spend.
Our next question is from Ben Theurer with Barclays.
Can you hear me?
Yes.
Yes.
Okay. Great. Perfect. So actually, one question to follow up. And Fernando, thank you very much for guiding on AMP for where you think this is going to turn out by the end of the year. One of the questions I had around that is, I mean, clearly, it came down. But actually, if we look at it in peso terms, it was not as much of a decline maybe as you would think. As a percentage of sales, it came down. If you consider that level of 20-ish percent, and now you've had actually a very successful last quarter with a lower level, how would you feel -- how do you feel about the future? How -- where do you think this is going to turn out as the company grows, as the company launches brands and has established brands across the different regions? Where do you think ultimately you're going to end up in a more long-term horizon in regards to AMP? That will be my just first question, follow-up on the topic from, right now.
Thank you, Ben, for the question. Again, our current thinking is in the order of magnitude of 20% AMP for this year. It really has to do with what's our growth expectations for next year. Again, we have an intent to continue growing strongly. We're one of the fastest-growing companies in the sector...
In the U.S.
And the best and the fastest. So it really has to do with how we start planning out next year. But that's what we would have to say at this stage for full year.
Okay. Perfect. And then one on the U.S. So clearly, RTD was very strong. We've elaborated on that during the prepared remarks and one of the questions earlier. Now just to understand then on a consolidated basis. I mean, clearly, U.S. trend, Nielsen, and you've laid it out at NABCA, it was all very strong. But just to understand, with some of the other tequila brand weakness with volume declines, was that really because of the offset in Mexico and the rest of the world? And ultimately, is it more of a weakness elsewhere than maybe in the U.S. on those particular brands? And if we think about RTD, you said the lower average price point, which obviously offsets some of the volume, how much of a profitability difference is there actually between the RTD business and maybe an average tequila in the U.S. segment?
Fernando, do you want me to tackle a part of that and then you tackle the broader global side?
Sure. Go ahead, Mike, and if Steve wants to jump in as well.
Yes. From the U.S. side, overall, our tequila business in the United States is very strong. It's certainly -- it's up significantly in the off-premise channel against, Steve, I think I can say, our entire brand portfolio. We do have a couple of brands actually that have a very high on-premise penetration, and those brands obviously are having more of a challenge than the ones that are more balanced or have a heavier off-premise representation. But all of our tequila businesses are strong right now, and they were strong going into the pandemic as well.
Steve, I don't know if you have anything you want to add.
Yes. I think the only thing that I would add is the incremental cases over what we would have expected primarily came from the RTD and the mix and a little bit from 1.75s of Especial and 1800. But the story is not all about the RTD, and the RTD is a very important piece of business for us. When you look at the NABCA versus Nielsen percentages, there's a little bit more of a representation in Nielsen. Roughly 54% of our representation in Nielsen comes from RTD, but NABCA is closer to the reality of the percentage of volume that we get from a depletion standpoint, and that's about 21% in NABCA. So I think NABCA is very telling when you look not only at our business, but a competitor's business of that shift that Mike spoke about. And it's really not an overall consumption lift. It's just a shift from the on- to the off-premise.
And the only other thing I'd say before I turn it over to Fernando is, obviously, because of their price on the shelf, our RTD business isn't as profitable as our full proof tequila business. But it's a very, very good business for us.
And I would just follow up with Mike and Steve's comment. Again, we don't disclose specifically brand profitability, but I think Mike already answered regarding the profitability of the RTD business. And again, it's a very important business for us.
Our next question is from Miguel Tortolero with GBM.
And congrats again for the results. My first question is on tequila growth. I mean, considering the popularity that tequila continues to gain in the U.S. that has brought this strong performance in volumes but, at the same time, demand more agave than expected, would you say that the vertical integration plans would be further delayed due to this unexpectedly solid demand?
And the second one, first, thanks for the color on the Eire Born Spirits transaction. I know it is a run, but as we speak, it's growing rapidly. But could you give some color on today's contribution in terms of 9-liter cases? And looking ahead, what's the potential you see for this brand? And is there any established path to control?
Yes. Thanks, Miguel, for your questions. First, on vertical integration, as you are aware, we do not disclose the integration levels for some time now for competitive reasons, nor do we like to talk about agave pricing in specifics. So that's what we would have to say on that. And regarding -- can you repeat your question regarding Eire Born Spirits?
Yes. If you could give some color on today's contribution in terms of 9-liter cases. And what's the potential you see in this brand? And if there is any path to control?
Yes. Let me hand over the question to Mike. But first, let me say that our joint venture partner does not disclose volume, so there's little we can say. Maybe Mike can just give you a very general, broad overview of the brand.
Yes. Well, with regard to performance, the brand, it's less than 2 years old, and it's become 1 of the top 4 Irish whiskey brands in the United States, by far the fastest-growing Irish whiskey brand, probably the fastest-growing whiskey brand, is my guess. 34% of the category's growth is being driven right now by Proper No. Twelve, and you guys can get some information. If you look at Nielsen, the last 52 weeks, the brand sold over 40,000 9-liter cases. And you could look at the math there. I mean, Nielsen makes up about 25% or 30% of the spirits overall category, so you can get to a reasonable assumption on volume. But it's a great brand. It's dynamic. Our partners are great partners, and they are -- they have helped us aggressively promote this wonderful product.
Our next question comes from Fernando Olvera with Bank of America.
I have 2. The first one is as compared to being given -- that this -- on the second quarter, I mean, can you share any idea of what volume performance should we see in the second half now that mobility restrictions are easing? That's the first one.
And the second one is about agave prices. Can you give us also an idea about the average price of third parties during the second quarter? And how are you seeing the performance of the agave price for the second half of the year?
Thank you, Fernando, for your questions. Regarding volume performance for the second half, it's simply too early to tell for us to give any type of guidance going forward. There's too much uncertainty, and it really is contingent upon the level of reopenings and/or potential re-lockdowns. So it's very hard for us to give any type of guidance for the second half at this stage.
And regarding your second question on agave prices, again, we do not like to discuss specific agave pricing. The only thing we can tell you at this stage is that in the past few months, we have started to see prices flattening or stabilizing and, in some cases, even going down. We don't know if this is a trend that will sustain itself. And it's simply, again, too early to tell if the agave price super cycle, if we can call it that, is beginning to reserve -- to reverse itself. So it's too early to tell on that. Hopefully, you can understand our position, Fernando.
No, no. Thank you so much for that, for the trend on agave prices. Just going back to Mexico. I mean, I don't know if it's possible to -- I mean, if you can share what was the trend of whiskey in July. I mean, thinking about and hearing that on lower mobility restrictions, I mean, just, do you have a sense how -- I mean, if volumes are recovering?
Thank you, Fernando. In the case of Mexico, yes, we are seeing -- the big hit in Mexico was in April. April, the whole market was down, and we saw more than 26% decline in depletions. Then May was totally different because on May, we saw the ban of -- the shortage of beer. So there was a big -- we have positive depletions in May, but that was only related to the shortage of beer. And everything went to proximity channel in convenience stores and a lot of value brands. What we saw in June, it's also a short decline, single-digit decline in terms of depletions. And the market is basically with minor declines right now. So we -- that's why we are hopeful that June, July, with some openings in on-premise, we will start to see some -- not some big declines as we saw in April -- on March and April.
Ladies and gentlemen, we have reached the end of the question-and-answer session. And I will turn the call back to Juan Domingo for closing remarks.
I would like to thank you again for your continued interest in Becle. We are proud of our resilience as a company during these unprecedented times and remain confident in our history and the strength of our brands. We hope you stay safe and well. Have a good day.
This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.