Brown Forman : Q3 2023 Brown-Forman Corporation Earnings Conference Call

Third Quarter and Year-to-Date Fiscal 2023 Results

March 8, 2023

Forward-Looking Statements

This presentation contains statements, estimates, and projections that are "forward-looking statements" as defined under U.S. federal securities laws. Words such as "aim," "anticipate," "aspire," "believe," "can," "continue," "could," "envision," "estimate," "expect," "expectation," "intend," "may," "might," "outlook," "plan," "potential," "project," "pursue," "see," "seek," "should," "will," "would," and similar words indicate forward- looking statements, which speak only as of the date we make them. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections. These risks and uncertainties include, but are not limited to:

• Our substantial dependence upon the continued growth of the Jack Daniel's family of brands
• Substantial competition from new entrants, consolidations by competitors and retailers, and other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing, or free goods), marketing, category expansion, product introductions, or entry or expansion in our geographic markets or distribution networks
• Route-to-consumerchanges that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, or result in higher fixed costs
• Disruption of our distribution network or inventory fluctuations in our products by distributors, wholesalers, or retailers
• Changes in consumer preferences, consumption, or purchase patterns - particularly away from larger producers in favor of small distilleries or local producers, or away from brown spirits, our premium products, or spirits generally, and our ability to anticipate or react to them; further legalization of marijuana; shifts in consumer purchase practices; bar, restaurant, travel, or other on-premise declines; shifts in demographic or health and wellness trends; or unfavorable consumer reaction to new products, line extensions, package changes, product reformulations, or other product innovation
• Production facility, aging warehouse, or supply chain disruption
• Imprecision in supply/demand forecasting
• Higher costs, lower quality, or unavailability of energy, water, raw materials, product ingredients, or labor
• Impact of health epidemics and pandemics, including the COVID-19 pandemic, and the risk of the resulting negative economic impacts and related governmental actions
• Unfavorable global or regional economic conditions, particularly related to the COVID-19 pandemic, and related economic slowdowns or recessions, low consumer confidence, high unemployment, weak credit or capital markets, budget deficits, burdensome government debt, austerity measures, higher interest rates, higher taxes, political instability, higher inflation, deflation, lower returns on pension assets, or lower discount rates for pension obligations
• Product recalls or other product liability claims, product tampering, contamination, or quality issues
• Negative publicity related to our company, products, brands, marketing, executive leadership, employees, Board of Directors, family stockholders, operations, business performance, or prospects
• Failure to attract or retain key executive or employee talent
• Risks associated with acquisitions, dispositions, business partnerships, or investments - such as acquisition integration, termination difficulties or costs, or impairment in recorded value
• Risks associated with being a U.S.-based company with a global business, including commercial, political, and financial risks; local labor policies and conditions; protectionist trade policies, or economic or trade sanctions, including new retaliatory tariffs on American whiskeys and the effectiveness of our actions to mitigate the negative impact on our margins, sales, and distributors; compliance with local trade practices and other regulations; terrorism; and health pandemics
• Failure to comply with anti-corruption laws, trade sanctions and restrictions, or similar laws or regulations
• Fluctuations in foreign currency exchange rates, particularly a stronger U.S. dollar
• Changes in laws, regulatory measures, or governmental policies - especially those that affect the production, importation, marketing, labeling, pricing, distribution, sale, or consumption of our beverage alcohol products
• Tax rate changes (including excise, corporate, sales or value-added taxes, property taxes, payroll taxes, import and export duties, and tariffs) or changes in related reserves, changes in tax rules or accounting standards, and the unpredictability and suddenness with which they can occur
• Decline in the social acceptability of beverage alcohol in significant markets
• Significant additional labeling or warning requirements or limitations on availability of our beverage alcohol products
• Counterfeiting and inadequate protection of our intellectual property rights
• Significant legal disputes and proceedings, or government investigations
• Cyber breach or failure or corruption of our key information technology systems or those of our suppliers, customers, or direct and indirect business partners, or failure to comply with personal data protection laws
• Our status as a family "controlled company" under New York Stock Exchange rules, and our dual-class share structure

For further information on these and other risks, please see the risks and uncertainties described in Part I, Item 1A. Risk Factors of our 2022 Form 10-K and those described from time to time in our future reports filed
with the Securities and Exchange Commission (SEC).	2

Year-to-Date Fiscal 2023 Highlights

Reported net sales growth of +8% (+12% organic1)

Jack Daniel's Tennessee Whiskey

+6% reported net sales growth

(+12% organic1)

Ready-to-Drink

+12% reported net sales growth

(+15% organic1)

Woodford Reserve

+34% reported net sales growth

(+35% organic1)

Reported gross margin decreased 170 basis points

Reported advertising expense increased +20% (+24% organic1)

Reported operating income decreased 13% (+9% organic1)

Earnings per share decreased

16% to $1.20

largely due to the decrease in reported operating income and a $27 million pension settlement charge

• See appendix for reconciliations from non-GAAP measures to most comparable GAAP measures, non-GAAP measure definitions, and additional information.

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Year-to-Date Fiscal 2023 Results

Net Sales

Gross Profit

Advertising Expense

SG&A Expense

Operating

Income

EPS

Reported		Reported	Acquisitions and	Impairment	Foreign	Organic Change1
($ in millions,		Change	Divestitures	Charges	Exchange
except per share	(%)	(+/-)	(+/-)	(+/-)	(%)
amount)
$3,182	8%	-%	-%	4%	12%
$1,859	5%	-%	-%	6%	11%
$372	20%	-%	-%	5%	24%
$541	9%	-2%	-%	4%	11%
$829	-13%	5%	9%	9%	9%
$1.20	-16%

Notes - Change is versus prior-year period. Totals may differ due to rounding.

• See appendix for reconciliations from non-GAAP measures to most comparable GAAP measures, non-GAAP measure definitions, and additional information.

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Year-to-Date Fiscal 2023

Net Sales Across Brands

REPORTED

ORGANIC 1

Whiskey

Jack Daniel's Family of Brands

Jack Daniel's Tennessee Whiskey

Premium Bourbons

Ready-to-Drink

Tequila

Total Portfolio

9%	Whiskey
10%
5%	Jack Daniel's Family
12%	of Brands
6%	Jack Daniel's
17%	Tennessee Whiskey

	10%		33%	Premium Bourbons
5%	12%			Ready-to-Drink
	12%	25%		Tequila
	8%			Total Portfolio
	11%

14% 15%

11% 14%

12%

20%

34% 10%

15% 4%

11%

24%

12% 14%

FY23

FY22

FY23

FY22

Notes - Change is versus prior-year period. Totals may differ due to rounding.

Beginning in fiscal 2023, we began presenting "Ready-to-Drink" products as a separate aggregation. These products are no longer included in the Whiskey and Tequila aggregations. See the brand aggregations in Definitions section.

• See appendix for reconciliations from non-GAAP measures to most comparable GAAP measures, non-GAAP measure definitions, and additional information.

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