UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20546
FORM 6-K
REPORT OF FOREIGN PRIVATE
ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE
ACT OF 1934
October 2024
Commission
File Number: 001-39251
BETTERWARE DE MÉXICO, S.A.P.I. DE C.V.
(Name of Registrant)
Luis Enrique Williams 549
Colonia Belenes Norte
Zapopan, Jalisco, 45145, México
+52 (33) 3836-0500
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F
☒ Form 40-F ☐
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
| |
BETTERWARE DE MÉXICO, S.A.P.I. DE C.V. |
| |
|
|
| |
By: |
/s/ Luis Campos |
| |
Name: |
Luis Campos |
| |
Title: |
Board Chairman |
Date: October 24, 2024
Exhibit Index
2
Exhibit 99.1
Message from the Chairman
I am pleased to report that BeFra delivered another
quarter of strong results, with Q3 net revenue growing 6.6% year-over-year and 7.4% year-to-date, reflecting solid performance
across all business units, and reaffirming the strength of our strategic plan.
Betterware Mexico achieved its fourth consecutive
quarter of net revenue year-over-year growth, consolidating its “back to growth momentum”, and paving the way for a stronger
growth coming forward. Jafra Mexico continues to deliver exceptional growth, led by the continued execution of our acquisition business
plan. Jafra US saw another consecutive quarter of growth, as we continue to find the road to success in the US market.
We are well-positioned for a strong close to the
year, supported by key initiatives in Q4, including the improved re-design of the Jafra Mexico catalog, innovative merchandising at Betterware
Mexico, and capitalizing the launch of our new Shopify+ website for Jafra US.
In terms of profitability, our Q3 Adjusted
EBITDA grew an impressive 11.7% year-over-year, highlighting our ability to leverage our growth, and underscoring the relevance of
a diverse product portfolio between our Betterware and Jafra brands. Strong profitability at Jafra Mexico helped offset temporary challenges
at Betterware Mexico, where gross margin was temporarily impacted by the peso depreciation and higher freight costs. Despite these challenges
in Betterware Mexico, it is important to mention that we have implemented corrective measures, expecting gross margin recovery starting
in Q4, if no other external movements appear. This, together with our ongoing commitment seeking the maximum expense productivity, has
led us to achieve great operating leverage with growth.
On a related note, we would like to stand out
that our balance sheet remains strong, with an extraordinary 41.9% increase in Free Cash Flow in Q3 year on year, and the lowest
Net Debt to EBITDA ratio since the Jafra acquisition.
All in all, BeFra’s momentum continues to
strengthen withing the consumer product goods and the direct selling industry, leveraging our pillars of innovation, business intelligence,
and technology. Our evolving business model, cutting-edge brands, and financially strong business, empower our sales force and keep us
ahead. With 24 years of constant double digit growth, we are not just on a sustainable growth path, we are poised to continue to thrive.
As we head into Q4, I am confident we will meet
our full-year targets, driven by our strong teams and sound strategies. Our focus on growth, innovation, efficiency and profitability
across all business remains unwavering, ensuring that we are well-positioned for long-term success.
Luis G. Campos
Chairman of the Board
Q3 2024 Select Consolidated Financial Information
| | |
Q3 | | |
9M | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Net Revenue | |
$ | 3,330,394 | | |
$ | 3,123,507 | |
| +6.6 | % | |
$ | 10,322,290 | | |
$ | 9,607,815 | |
| +7.4 | % |
| Gross Margin | |
| 71.2 | % | |
| 70.2 | % |
| +100 | bps | |
| 72.4 | % | |
| 72.1 | % |
| +25 | bps |
| EBITDA | |
$ | 156,545 | | |
$ | 529,424 | |
| -70.4 | % | |
$ | 1,568,071 | | |
$ | 1,901,416 | |
| -17.5 | % |
| EBITDA Margin | |
| 4.7 | % | |
| 16.9 | % |
| -1,225 | bps | |
| 15.2 | % | |
| 19.8 | % |
| -460 | bps |
| Adj. EBITDA | |
$ | 591,575 | | |
$ | 529,424 | |
| +11.7 | % | |
$ | 2,003,100 | | |
$ | 1,901,416 | |
| +5.3 | % |
| Adj. EBITDA Margin | |
| 17.8 | % | |
| 16.9 | % |
| +81 | bps | |
| 19.4 | % | |
| 19.8 | % |
| -38 | bps |
| Net Income | |
$ | -115,614 | | |
$ | 196,991 | |
| -158.7 | % | |
$ | 479,300 | | |
$ | 643,358 | |
| -25.5 | % |
| Adj. Net Income | |
$ | 180,531 | | |
$ | 196,991 | |
| -8.4 | % | |
$ | 775,445 | | |
$ | 643,358 | |
| +20.5 | % |
| EPS | |
$ | -3.10 | | |
$ | 5.28 | |
| -158.7 | % | |
$ | 12.84 | | |
$ | 17.24 | |
| -25.5 | % |
| Adj. EPS | |
$ | 4.84 | | |
$ | 5.28 | |
| -8.4 | % | |
$ | 20.78 | | |
$ | 17.24 | |
| +20.5 | % |
| Free Cash Flow | |
$ | 417,379 | | |
$ | 294,227 | |
| +41.9 | % | |
$ | 1,235,471 | | |
$ | 1,599,274 | |
| -22.7 | % |
| Net Debt / Adj. EBITDA | |
| 1.76 | | |
| 2.08 | |
| | | |
| 1.76 | | |
| 2.08 | |
| | |
| Interest Coverage | |
| 3.52 | | |
| 2.55 | |
| | | |
| 3.52 | | |
| 2.55 | |
| | |
| | |
| | | |
| | |
| | | |
| | | |
| | | |
| |
| Associates | |
| | | |
| | |
| | | |
| | | |
| | | |
| |
| Avg. Base | |
| 1,127,767 | | |
| 1,212,618 | |
| -7.0 | % | |
| 1,173,222 | | |
| 1,217,716 | | |
-3.7 | % |
| EOP Base | |
| 1,151,069 | | |
| 1,212,755 | |
| -5.1 | % | |
| 1,151,069 | | |
| 1,212,755 | | |
-5.1 | % |
| Distributors | |
| | | |
| | |
| | | |
| | | |
| | | |
| |
| Avg. Base | |
| 65,235 | | |
| 62,746 | |
| +4.0 | % | |
| 64,785 | | |
| 61,535 | | |
+5.3 | % |
| EOP Base | |
| 64,433 | | |
| 62,132 | |
| +3.7 | % | |
| 64,433 | | |
| 62,132 | | |
+3.7 | % |
This quarter, we are reporting adjusted EBITDA,
Net Income and EPS to reflect the one-time effect of the sale of Jafra Mexico’s former headquarters on BeFra’s consolidated
financial results. The sale resulted in a non-cash accounting loss of Ps. 435M as the property was sold for Ps. 385.7M, notably below
its book value of Ps. 811M. The transaction price reflects the current market value of the asset. Essentially, this accounting loss does
not impact on BeFra’s operational performance. The sale will generate post-tax cash inflows of Ps. 315M over the next three years: Ps.
70M expected in November 2024, Ps. 135M in 2025, Ps. 85 in 2026, and Ps. 25.7M in Q2 2027. Excluding this non-recurring event, core EBITDA
growth remains strong and continues to align with our strategic goals.
| ● | Net
Revenue Growth: Consolidated net revenue grew by 6.6% year-over-year in the third quarter
and 7.4% for the first nine months of 2024, reflecting a consistent growth trajectory. All
business units achieved YoY growth. Betterware Mexico marked its fourth consecutive quarter
of year-over-year growth, while Jafra Mexico continues to excel, delivering a 9.2% YoY increase
in the quarter. |
| ● | Robust
EBITDA Growth: Adjusted EBITDA grew by 11.7% for the quarter and increased 5.3% for the
first nine months. This reflects the resilience of core operations despite challenges which
included exchange rate fluctuations and cost pressures, such as freight costs. The growth
highlights the success of operational efficiencies achieved over the last year, strategic
growth initiatives underway across all business units, and the group’s diversified
portfolio of product categories. |
| ● | Free
Cash Flow (FCF) Generation. Free Cash Flow (FCF) increased by 41.9% this quarter, largely
driven by a more efficient working capital management. By shortening the Cash Conversion
Cycle, BeFra is able to convert growing revenues into cash more quickly, resulting in stronger
cash flow generation. |
| ● | Adjusted
Net Income Contracted by 8.4% in Q3, primarily due to an increase in tax provisions for
the period. This impact could be temporary, with a potential reversal by year-end following
the final calculation of the annual inflation effect. For the first nine months of the year,
net income increased by 20.5%, mainly driven by a decrease in interest expense and a gain
on FX forwards. |
For
more details, please refer to the results of each business unit in the following pages.
Unmatched
Financial Strength and Performance
Strong
balance sheet at the end of Q3 2024.
| - | BeFra’s
balance sheet further strengthened in Q3 2024, with net-debt-to-EBITDA decreasing 15.5% YoY
to 1.76x and interest coverage increasing 38.0% to 3.52x, providing greater financial flexibility
to further reduce debt leverage, continue investing in growth and efficiency initiatives,
and pay dividends. |
| - | BeFra’s
inventory increased 15.0% vs last year to prevent any supply chain disruptions that could
affect our fulfillment capabilities for the Q4 season. |
Our
key financial metrics reflect our strength and show why to invest in BWMX:
Cash Flow & Liquidity ratios
BeFra continues to demonstrate robust cash flow generation, as is illustrated
in the table below.
| | |
Q3 2024 | | |
Q3 2023 | | |
∆ | |
| Current Ratio | |
| 1.07 | x | |
| 1.06 | x | |
| +0.3 | % |
| FCF / Adj. EBITDA | |
| 70.6 | % | |
| 55.6 | % | |
| +1,498 | bps |
| CCC (days) | |
| 38 | | |
| 58 | | |
| -20 | bps |
| * | CCC: Cash Conversion Cycle |
Asset Light Business
The Company’s asset-light business model enables flexibility
to swiftly adapt to challenging conditions.
| | |
Q3 2024 | | |
Q3 2023 | | |
∆ bps | |
| Fixed Assets / Total Assets | |
| 19.5 | % | |
| 25.9 | % | |
| -634 | bps |
| Variable Cost Structure | |
| 75.1 | % | |
| 71.6 | % | |
| +351 | bps |
| Fixed Cost Structure | |
| 24.9 | % | |
| 22.2 | % | |
| +270 | bps |
| SG&A / Net Revenues | |
| 51.7 | % | |
| 51.5 | % | |
| +21 | bps |
Fixed Assets decreased significantly due to the sale of the Jafra Mexico
building in Mexico City.
Return on Investment
Over the years, the Company has consistently delivered exceptional
returns, making this business highly attractive to our investors.
| | |
Q3 2024 | | |
Q3 2023 | | |
∆ | |
| Equity Turnover | |
| 14.12 | x | |
| 10.08 | x | |
| +40.1 | % |
| ROE | |
| 69.4 | % | |
| 70.1 | % | |
| -72 | bps |
| ROTA | |
| 11.0 | % | |
| 13.1 | % | |
| -210 | bps |
| Dividend Yield | |
| 11.91 | % | |
| 7.72 | % | |
| +419 | bps |
| * | Equity
Turnover = Net Revenues TTM / Equity |
| * | ROTA
= Net Income TTM / (Cash + Accounts Receivable + Inventories + Fixed Assets) |
| * | Calculation
of Dividend Yield Using the Closing Price on September 30, which was $12.68. |
Leverage
Current debt primarily stems from the acquisition of Jafra, and the
Company is committed to reducing debt levels ahead of the original schedule.
| | |
Q3 2024 | | |
Q3 2023 | | |
∆% | |
| Debt to EBITDA | |
| 1.87 | x | |
| 2.28 | x | |
| -18.0 | % |
| Net Debt to EBITDA | |
| 1.76 | x | |
| 2.08 | x | |
| -15.5 | % |
| Interest Coverage | |
| 3.52 | x | |
| 2.55 | x | |
| +38.0 | % |
Capital
Allocation
Strategic
Focus on Balance Sheet: BeFra’s balance sheet remains a priority. As of September 30, 2024, Net Debt-to-EBITDA was 1.76x, a
decrease from 2.08x at the end of Q3 2023.
Quarterly
Dividends and Shareholder Value: Considering BeFra’s results to date, management remains committed to enhancing shareholder
value through quarterly dividends. The board of directors has proposed a Ps. 250 million dividend for Q3 2024, pending approval at the
Company’s Ordinary General Shareholders’ Meeting on October 28, 2024. This would mark the nineteenth consecutive quarterly
dividend payment since BeFra’s IPO in March 2020. Future levels of dividend payouts are expected to meet this quarter’s proposed
amount, contingent upon BeFra’s financial performance and the ongoing debt repayment plan.
The
Company has introduced a new investment policy to provide clear guidelines for the efficient and sustainable use of BeFra’s Free
Cash Flow, fully aligned with strategic priorities. This policy reinforces BeFra’s commitment to fostering long term growth, maintaining
a solid financial foundation, and delivering consistent value to shareholders. The leverage ratio has been set within a range of 1.5x
to 2.5x Net Debt to EBITDA, depending on the growth opportunities that arise. FCF deployment will prioritize inorganic growth initiatives,
while ensuring the appropriate allocation of resources for dividends and capital expenditures.
2024
Guidance and Long-Term Growth Prospects
Looking
ahead, BeFra is well-positioned to deliver a strong year-end finish within the Company’s guidance range. While Revenue is expected
within range, EBITDA for the full year will be closer to the lower end range due to the temporary impact on the margin of Betterware
Mexico seen in the Q3.
| | |
2024 | |
2023 | | |
Var % |
| Net Revenue | |
$ 13,800 – 14,400 | |
$ | 13,010 | | |
6.1% - 10.7% |
| EBITDA | |
$ 2,900 – 3,100 | |
$ | 2,721 | | |
6.6% - 13.9% |
Q3
2024 Financial Results by Business
Betterware
Mexico
Key
Financial and Operating Metrics
| | |
Q3 | | |
9M | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Net Revenue | |
$ | 1,465,577 | | |
$ | 1,420,739 | | |
| +3.2 | % | |
$ | 4,496,979 | | |
$ | 4,254,128 | | |
| +5.7 | % |
| Gross Margin | |
| 54.8 | % | |
| 56.2 | % | |
| -148 | bps | |
| 57.1 | % | |
| 59.7 | % | |
| -262 | bps |
| EBITDA | |
$ | 279,889 | | |
$ | 328,295 | | |
| -14.7 | % | |
$ | 966,463 | | |
$ | 1,184,159 | | |
| -18.4 | % |
| EBITDA Margin | |
| 19.1 | % | |
| 23.1 | % | |
| -401 | bps | |
| 21.5 | % | |
| 27.8 | % | |
| -634 | bps |
Associates
| Avg. Base | |
| 694,277 | | |
| 768,042 | | |
| -9.6 | % | |
| 708,022 | | |
| 758,121 | | |
| -6.6 | % |
| EOP Base | |
| 700,893 | | |
| 759,310 | | |
| -7.7 | % | |
| 700,893 | | |
| 759,310 | | |
| -7.7 | % |
| Monthly Activity Rate | |
| 66.3 | % | |
| 65.2 | % | |
| +109 | bps | |
| 66.8 | % | |
| 66.7 | % | |
| +12 | bps |
| Avg. Monthly Order | |
$ | 2,034 | | |
$ | 1,823 | | |
| +11.6 | % | |
$ | 2,038 | | |
$ | 1,822 | | |
| +11.8 | % |
| Distributors | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Avg. Base | |
| 44,639 | | |
| 42,551 | | |
| +4.9 | % | |
| 44,159 | | |
| 40,801 | | |
| +8.2 | % |
| EOP Base | |
| 43,939 | | |
| 41,932 | | |
| +4.8 | % | |
| 43,939 | | |
| 41,932 | | |
| +4.8 | % |
| Monthly Activity Rate | |
| 98.0 | % | |
| 97.9 | % | |
| +5 | bps | |
| 98.2 | % | |
| 98.2 | % | |
| - | |
| Avg. Monthly Order | |
$ | 21,531 | | |
$ | 21,944 | | |
| -1.9 | % | |
$ | 22,261 | | |
$ | 22,982 | | |
| -3.1 | % |
Highlights
| ● | Net
Revenue Growth: Betterware Mexico achieved 3.2% year-over-year growth in Q3, marking
its fourth consecutive quarter of annual growth, with a 5.7% increase for the first nine
months. While growth slowed compared to the first half, the Company continues to gain overall
momentum and expects a strong Q4. |
| o | Revenue
growth was driven by a higher pricing mix, reflecting a shift toward higher priced items
that drive Associates’ average monthly order. Net revenue was also significantly enhanced
by the revamp of Betterware’s main categories: On the Go, Kitchen, Hygiene, Home Solutions
and Food Preservation, each reflecting double-digit growth on a year-to-date basis. |
| o | Increased
productivity among Distributors and Associates continues to be an important sales driver,
rather than the expansion of Betterware’s sales force, with activity levels and average
order values increasing YoY. The Company expects that the increased productivity will precede
an expansion of the base. |
| ● | Temporary
EBITDA contraction. Lower than expected sales and the decline in gross margin led to
an EBITDA contraction in Q3 and YTD. Gross margin decreased by 148 bps YoY in Q3, and 262
bps year-to-date (YTD), mainly due to the Mexican peso depreciation (the Peso weakened relative
to the US dollar by 14.5% from its lowest point in Q1 2024 and by 10.7% compared to the average
seen in the first half of the year), and to the international freight costs, which surged
by 154% from the beginning of the year. However, adjustments have been made and will be reflected
in Q4, in addition to the fact that international freight costs have started to decline. |
| ● | Comprehensive
financing costs include gains or losses from foreign exchange hedges used to mitigate
currency risk related to purchases priced in USD. In Q3 2024, we recorded a Ps. 59M gain,
bringing the year-to-date total to Ps. 93M. If hedge accounting had been applied, these gains
would have increased the gross margin by 162 basis points in Q3 to 56.4%, and by 135 basis
points year-to-date to 58.5%. The Company is evaluating initiating the process to transition
to hedge accounting for FX risk management to more accurately reflect these gains or losses
in the gross margin. |
Q4
2024 Priorities
| ● | Product
Innovation: Betterware is launching an ambitious product innovation plan in Q4, with
a robust pipeline in place for the rest of the year to ensure sustained growth and continued
market relevance. |
| ● | Pricing
Strategy: The Company is also implementing a comprehensive pricing strategy to protect
margins while remaining competitive. This plan will enable Betterware to mitigate external
cost impacts, maintain profitability, and strengthen its market position, further enhancing
consumer loyalty. |
| ● | Incentives
Program: The Associates and Distributors incentive program has been refined to better
align rewards with performance, driving increase activity levels, as noted before. |
International
Expansion
| ● | International
operations. We continue to build a strong foundation and establish our presence in the
U.S. and Peru, making progress with the strategic initiatives we have planned for each market.
We anticipate initial tangible results and more relevant financial contributions from Betterware
US by the end of 2025, reflecting investments and projects currently underway in this sizable
market. Since these projects began, total investments in the U.S. and Peru have amounted
to $80.2 million. Without these investments, Betterware Mexico’s EBITDA would have been Ps.
1,047 million, representing an EBITDA margin of 23.3%. |
Jafra
Mexico
Key
Financial and Operating Metrics
| | |
Q3 | | |
9M | |
| | |
| 2024 | | |
2023 | | |
2024 | | |
2023 | |
| Net Revenue | |
$ | 1,623,697 | | |
$ | 1,486,816 | | |
| +9.2 | % | |
$ | 5,144,830 | | |
$ | 4,685,996 | | |
| +9.8 | % |
| Gross Margin | |
| 85.7 | % | |
| 83.0 | % | |
| +274 | bps | |
| 85.5 | % | |
| 82.8 | % | |
| +275 | bps |
| EBITDA | |
$ | -116,882 | | |
$ | 209,267 | | |
| -155.9 | % | |
$ | 610,716 | | |
$ | 755,538 | | |
| -19.2 | % |
| EBITDA Margin | |
| -7.2 | % | |
| 14.1 | % | |
| -2,127 | bps | |
| 11.9 | % | |
| 16.1 | % | |
| -420 | bps |
| EBITDA Adj | |
$ | 318,148 | | |
$ | 209,267 | | |
| +52.0 | % | |
$ | 1,045,746 | | |
$ | 755,538 | | |
| +38.4 | % |
| EBITDA Margin Adj | |
| 19.6 | % | |
| 14.1 | % | |
| +552 | bps | |
| 20.3 | % | |
| 16.1 | % | |
| +42 | bps |
Associates
| Avg. Base | |
| 403,340 | | |
| 414,968 | | |
| -2.8 | % | |
| 435,027 | | |
| 430,413 | | |
| +1.1 | % |
| EOP Base | |
| 421,073 | | |
| 422,956 | | |
| -0.4 | % | |
| 421,073 | | |
| 422,956 | | |
| -0.4 | % |
| Monthly Activity Rate | |
| 51.6 | % | |
| 52.2 | % | |
| -60 | bps | |
| 52.0 | % | |
| 51.7 | % | |
| +27 | bps |
| Avg. Monthly Order | |
$ | 2,347 | | |
$ | 2,088 | | |
| +12.4 | % | |
$ | 2,290 | | |
$ | 2,081 | | |
| +10.0 | % |
| Distributors | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Avg. Base | |
| 18,823 | | |
| 18,553 | | |
| +1.5 | % | |
| 18,883 | | |
| 18,812 | | |
| +0.4 | % |
| EOP Base | |
| 18,722 | | |
| 18,555 | | |
| +0.9 | % | |
| 18,722 | | |
| 18,555 | | |
| +0.9 | % |
| Monthly Activity Rate | |
| 93.2 | % | |
| 94.0 | % | |
| -79 | bps | |
| 94.2 | % | |
| 94.1 | % | |
| +1 | bps |
| Avg. Monthly Order | |
$ | 2,694 | | |
$ | 2,236 | | |
| +20.5 | % | |
$ | 2,594 | | |
$ | 2,319 | | |
| +11.9 | % |
Highlights
| ● | High
Single-digit Growth in Net Revenue. Net revenue for the third quarter increased by 9.2%
YoY, also with a cumulative 9.8% increase over the first nine months. These results were
primarily driven by YTD increases of 17.2% in Fragrances, 7.9% in Toiletries, and 6.4% in
Cosmetics, reflecting the strong performance of Jafra’s best-selling products and key
innovations such as the Gii fragrance and the new Dermocosmetic Skin Care line, BioLab. |
In
Q3, the average Associate base contracted 2.8% year-over-year. Net revenue growth was driven by increased productivity and a higher average
monthly order (+12.4%). While recruitment and retention remain priorities, the higher-value transactions from the existing Associate
network are a positive indicator for future base growth.
| ● | Exceptional
Adjusted EBITDA Growth. Adjusted EBITDA grew significantly; 52.0% for the quarter and
38.4% year-to-date, driven by a combination of increased sales, improved gross margins, and
operating expense efficiencies. Gross margin expanded by 274 bps for the quarter and 275
bps year-to-date, derived from higher volume manufacturing efficiencies. |
Q4
2024 Priorities
| ● | Product
Innovation Plan: Jafra has a strong product innovation pipeline for the remainder of
the year, with key launches planned. Product innovations introduced this quarter, including
BioLab, have already gained market share, positioning Jafra well for continued growth. |
| ● | New
Catalog Design: A new and improved catalog design was launched in October 2024, which
is expected to have a strong impact of the sales growth. |
| ● | Enhanced
Incentives Program Communication: Jafra’s incentive program communication is also
being refined to boost sales force engagement and to drive sponsorship, recruitment, and
Consultant retention to achieve sustained growth levels. |
Jafra
US
Key Financial and Operating Metrics
| |
|
Q3 |
|
|
9M |
|
| |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| Net Revenue |
|
$ |
241,120 |
|
|
$ |
215,952 |
|
|
|
+11.7 |
% |
|
$ |
680,481 |
|
|
$ |
667,691 |
|
|
|
+1.9 |
% |
| Gross Margin |
|
|
73.3 |
% |
|
|
74.1 |
% |
|
|
-81 |
bps |
|
|
73.6 |
% |
|
|
76.2 |
% |
|
|
-257 |
bps |
| EBITDA |
|
$ |
-6,462 |
|
|
$ |
-8,138 |
|
|
|
+20.6 |
% |
|
$ |
-9,108 |
|
|
$ |
-38,281 |
|
|
|
+76.2 |
% |
| EBITDA Margin |
|
|
-2.7 |
% |
|
|
-3.2 |
% |
|
|
+109 |
bps |
|
|
-1.3 |
% |
|
|
-5.7 |
% |
|
|
+439 |
bps |
| Associates | |
| | |
| | |
| | |
| | |
| | |
| |
| Avg. Base | |
| 30,150 | | |
| 29,608 | | |
| +1.8 | % | |
| 30,173 | | |
| 29,183 | | |
| +3.4 | % |
| EOP Base | |
| 29,103 | | |
| 30,489 | | |
| -4.5 | % | |
| 29,103 | | |
| 30,489 | | |
| -4.5 | % |
| Monthly Activity Rate | |
| 41.6 | % | |
| 45.1 | % | |
| -347 | bps | |
| 43.6 | % | |
| 42.4 | % | |
| +118 | bps |
| Avg. Monthly Order | |
$ | 233 | | |
$ | 228 | | |
| +2.2 | % | |
$ | 229 | | |
$ | 232 | | |
| -1.0 | % |
| Distributors | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Avg. Base | |
| 1,774 | | |
| 1,642 | | |
| +8.0 | % | |
| 1,743 | | |
| 1,921 | | |
| -9.3 | % |
| EOP Base | |
| 1,772 | | |
| 1,645 | | |
| +7.7 | % | |
| 1,772 | | |
| 1,645 | | |
| +7.7 | % |
| Monthly Activity Rate | |
| 87.5 | % | |
| 90.4 | % | |
| -290 | bps | |
| 88.8 | % | |
| 85.1 | % | |
| +374 | bps |
| Avg. Monthly Order | |
$ | 233 | | |
$ | 217 | | |
| +7.7 | % | |
$ | 226 | | |
$ | 219 | | |
| +3.6 | % |
Highlights
| ● | Jafra
US Continues to Grow Net Revenues. The business has demonstrated a strong turnaround,
delivering double-digit net revenue growth for the second consecutive quarter. Q3 net revenues
increased by 11.7%, enabling 1.9% year-to-date growth. Strong Q3 revenue was primarily driven
by higher productivity per Associate, and Associate base growth. Jafra US net revenues in
USD grew by 3.4% during the quarter, reaching $12.7M, and by 3.2% for the first nine months
of the year, totaling $38.4M. It is important to stand out that Jafra US successfully launched
a Shopify e-commerce platform in September 2024; a technological development designed to
enhance sales. The launch of this new platform temporarily affected our activity levels in
September, due to a normal “new platform learning curve”, which we expect to
be completed in October. |
| ● | Negative
EBITDA Performance. Jafra US reported a slight negative EBITDA for the third quarter
primarily due to decreased sales in September due to the new platform launch, and from a
slightly reduced gross margin vs last year. However, we continue to reduce losses compared
to last year, demonstrating progress related to stabilizing the business. While our focus
on profitability is now mainly operational leverage from revenue growth, we continue to attack
expense reduction strategies to optimize operational efficiencies. |
Q4
2024 Priorities
| ● | Brochure
Revenue Growth: Q4 2024 growth will be led by further optimization of Jafra’s US
brochure, which will include strategic pricing adjustments, refined pagination, and an enhanced
promotion mix, together with improved design. |
| ● | Skincare
Focus – BioLab Dermocosmetics: Jafra US is positioning BioLab Dermocosmetics as
a flagship offering to more successfully access increasing demand for premium, science-based
skincare. Jafra US expects to significantly boost skincare sector market share by promoting
BioLab. |
| ● | Promotional
Campaigns – “Power Week”: Jafra US is strengthening the execution of
“Jafra Power Week”, a nationwide lead-generation campaign aimed at boosting recruitment
of Associates and Consultants. |
Appendix
Financial
Statements
Betterware
de México, S.A.P.I. de C.V.
Consolidated
Statements of Final Position
As
of September 30, 2024 and 2023
(In
Thousands of Mexican Pesos)
| | |
Sep
2024 | | |
Sep
2023 | |
| Assets | |
| | |
| |
| Cash and cash
equivalents | |
| 316,378 | | |
| 496,068 | |
| Trade accounts receivable,
net | |
| 1,200,117 | | |
| 1,275,837 | |
| Accounts receivable from related
parties | |
| 2,407 | | |
| 48 | |
| Inventories | |
| 2,504,370 | | |
| 2,178,018 | |
| Prepaid expenses | |
| 100,303 | | |
| 129,138 | |
| Income tax recoverable | |
| 67,701 | | |
| 112,215 | |
| Derivative Financial Instruments | |
| 105,469 | | |
| 0 | |
| Other
assets | |
| 421,875 | | |
| 177,761 | |
| Total
current assets | |
| 4,718,620 | | |
| 4,369,085 | |
| Property, plant and equipment,
net | |
| 2,121,418 | | |
| 2,877,944 | |
| Right of use assets, net | |
| 294,056 | | |
| 339,446 | |
| Deferred income tax | |
| 523,568 | | |
| 386,657 | |
| Intangible assets, net | |
| 1,590,916 | | |
| 1,671,845 | |
| Goodwill | |
| 1,599,718 | | |
| 1,599,718 | |
| Other
assets | |
| 14,387 | | |
| 53,794 | |
| Total
non-current assets | |
| 6,144,063 | | |
| 6,929,404 | |
| Total
assets | |
| 10,862,683 | | |
| 11,298,489 | |
| | |
| | | |
| | |
| Liabilities
and Stockholders’ Equity | |
| | | |
| | |
| Short term debt and borrowings | |
| 618,279 | | |
| 600,123 | |
| Accounts payable to suppliers | |
| 2,372,500 | | |
| 1,944,445 | |
| Accrued expenses | |
| 410,253 | | |
| 391,572 | |
| Provisions | |
| 778,992 | | |
| 865,213 | |
| Value added tax payable | |
| 44,614 | | |
| 51,905 | |
| Trade accounts payable to
related parties | |
| 20 | | |
| 0 | |
| Statutory employee profit
sharing | |
| 86,885 | | |
| 104,675 | |
| Lease liability | |
| 107,609 | | |
| 87,815 | |
| Derivative
financial instruments | |
| 0 | | |
| 25,279 | |
| Total
current liabilities | |
| 4,419,152 | | |
| 4,071,027 | |
| Employee benefits | |
| 139,701 | | |
| 161,952 | |
| Deferred income tax | |
| 572,301 | | |
| 783,169 | |
| Lease liability | |
| 214,098 | | |
| 264,594 | |
| Long
term debt and borrowings | |
| 4,334,713 | | |
| 4,743,980 | |
| Total
non-current liabilities | |
| 5,260,813 | | |
| 5,953,695 | |
| Total
liabilities | |
| 9,679,965 | | |
| 10,024,722 | |
| | |
| | | |
| | |
| Stockholders’
Equity | |
| | | |
| | |
| Capital stock | |
| 321,312 | | |
| 321,312 | |
| Share premium account | |
| -25,264 | | |
| -16,370 | |
| Retained earnings | |
| 919,658 | | |
| 974,174 | |
| Other comprehensive income | |
| -31,508 | | |
| -3,412 | |
| Non-controlling
interest | |
| -1,480 | | |
| -1,937 | |
| Total
Stockholders’ Equity | |
| 1,182,718 | | |
| 1,273,767 | |
| Total
Liabilities and Stockholders’ Equity | |
| 10,862,683 | | |
| 11,298,489 | |
Betterware
de México, S.A.P.I. de C.V.
Consolidated
Statements of Profit or Loss and Other Comprehensive Income
For
the three-months ended September 30, 2024 and 2023
(In
Thousands of Mexican Pesos)
| | |
Q3
2024 | | |
Q3
2023 | | |
∆% | |
| Net revenue | |
| 3,330,394 | | |
| 3,123,507 | | |
| 6.6 | % |
| Cost of sales | |
| 959,135 | | |
| 930,636 | | |
| 3.1 | % |
| Gross
profit | |
| 2,371,259 | | |
| 2,192,871 | | |
| 8.1 | % |
| | |
| | | |
| | | |
| | |
| Administrative expenses | |
| 792,483 | | |
| 739,928 | | |
| 7.1 | % |
| Selling expenses | |
| 928,707 | | |
| 867,743 | | |
| 7.0 | % |
| Distribution expenses | |
| 155,992 | | |
| 147,089 | | |
| 6.1 | % |
| Total
expenses | |
| 1,877,182 | | |
| 1,754,760 | | |
| 7.0 | % |
| | |
| | | |
| | | |
| | |
| Other expenses - Sale of fixed
assets | |
| 435,030 | | |
| 0 | | |
| 100.0 | % |
| | |
| | | |
| | | |
| | |
| Operating
income | |
| 59,047 | | |
| 438,111 | | |
| 12.8 | % |
| | |
| | | |
| | | |
| | |
| Interest expense | |
| -161,352 | | |
| -207,722 | | |
| -22.3 | % |
| Interest income | |
| 2,751 | | |
| 11,850 | | |
| -76.8 | % |
| Unrealized gain in valuation
of financial derivative instruments | |
| 82,876 | | |
| 54,787 | | |
| 51.3 | % |
| Foreign exchange loss, net | |
| -27,586 | | |
| -50,082 | | |
| -44.9 | % |
| Financing
cost, net | |
| -103,311 | | |
| -191,167 | | |
| -46.0 | % |
| | |
| | | |
| | | |
| | |
| Income
before income taxes | |
| -44,264 | | |
| 246,944 | | |
| 58.2 | % |
| | |
| | | |
| | | |
| | |
| Income
taxes | |
| 71,326 | | |
| 50,070 | | |
| 463.6 | % |
| | |
| | | |
| | | |
| | |
| Net
(loss) income including minority interest | |
| -115,590 | | |
| 196,874 | | |
| -265.8 | % |
| Non-controlling
interest (loss) gain | |
| -24 | | |
| 117 | | |
| -120.5 | % |
| Net
(loss) income | |
| -115,614 | | |
| 196,991 | | |
| -265.7 | % |
| EBITDA
breakdown (Ps. 591.5 million) |
| Concept | |
Q3
2024 | | |
Q3
2023 | | |
∆% | |
| Net (loss) income
including minority interest | |
| -115,590 | | |
| 196,874 | | |
| -265.8 | % |
| (+) Income taxes | |
| 71,326 | | |
| 50,070 | | |
| 463.6 | % |
| (+) Financing cost, net | |
| 103,311 | | |
| 191,167 | | |
| -46.0 | % |
| (+) Depreciation and amortization | |
| 97,498 | | |
| 91,313 | | |
| 6.8 | % |
| EBITDA | |
| 156,545 | | |
| 529,424 | | |
| -70.4 | % |
| EBITDA
Margin | |
| 4.7 | % | |
| 16.9 | % | |
| | |
| (+) Other expenses - Sale
of fixed assets | |
| 435,030 | | |
| 0 | | |
| | |
| Adjusted
EBITDA | |
| 591,575 | | |
| 529,424 | | |
| 11.7 | % |
| Adjusted
EBITDA Margin | |
| 17.8 | % | |
| 16.9 | % | |
| | |
| Net adjusted income breakdown |
| Concept | |
Q3 2024 | | |
Q3 2023 | | |
∆% | |
| Net (loss) income including minority interest | |
| -115,614 | | |
| 196,991 | | |
| -158.7 | % |
| (+) Other expenses - Sale of fixed assets | |
| 435,030 | | |
| 0 | | |
| 100.0 | % |
| (+) Income taxes for the sale of fixed assets | |
| 71,983 | | |
| 0 | | |
| 100.0 | % |
| (+) Income taxes – deferred | |
| -210,868 | | |
| 0 | | |
| 100.0 | % |
| Net adjusted income | |
| 180,531 | | |
| 196,874 | | |
| -8.4 | % |
Betterware
de México, S.A.P.I. de C.V.
Consolidated
Statements of Profit or Loss and Other Comprehensive Income
For
the nine-months ended September 30, 2024 and 2023
(In
Thousands of Mexican Pesos)
| | |
9M
2024 | | |
9M
2023 | | |
∆% | |
| Net revenue | |
| 10,322,290 | | |
| 9,607,815 | | |
| 7.4 | % |
| Cost of sales | |
| 2,851,608 | | |
| 2,679,383 | | |
| 6.4 | % |
| Gross
profit | |
| 7,470,682 | | |
| 6,928,432 | | |
| 7.8 | % |
| | |
| | | |
| | | |
| | |
| Administrative expenses | |
| 2,350,939 | | |
| 2,307,435 | | |
| 1.9 | % |
| Selling expenses | |
| 2,907,457 | | |
| 2,551,742 | | |
| 13.9 | % |
| Distribution
expenses | |
| 500,299 | | |
| 445,455 | | |
| 12.3 | % |
| Total
expenses | |
| 5,758,695 | | |
| 5,304,632 | | |
| 8.6 | % |
| | |
| | | |
| | | |
| | |
| Other expenses - Sale of fixed
assets | |
| 435,030 | | |
| 0 | | |
| 100.0 | % |
| | |
| | | |
| | | |
| | |
| Operating
income | |
| 1,276,957 | | |
| 1,623,800 | | |
| -21.4 | % |
| | |
| | | |
| | | |
| | |
| Interest expense | |
| -496,610 | | |
| -624,830 | | |
| -20.5 | % |
| Interest income | |
| 20,985 | | |
| 39,338 | | |
| -46.7 | % |
| Unrealized gain (loss) in
valuation of financial derivative instruments | |
| 153,389 | | |
| -9,950 | | |
| -1641.6 | % |
| Foreign exchange loss, net | |
| -88,839 | | |
| -99,190 | | |
| -10.4 | % |
| Financing
cost, net | |
| -411,075 | | |
| -694,632 | | |
| -40.8 | % |
| | |
| | | |
| | | |
| | |
| Income
before income taxes | |
| 865,882 | | |
| 929,167 | | |
| -6.8 | % |
| | |
| | | |
| | | |
| | |
| Income
taxes | |
| 386,534 | | |
| 288,839 | | |
| 33.8 | % |
| | |
| | | |
| | | |
| | |
| Net
income including minority interest | |
| 479,348 | | |
| 640,328 | | |
| -25.1 | % |
| Non-controlling
interest (loss) gain | |
| -48 | | |
| 3,030 | | |
| -101.6 | % |
| Net
income | |
| 479,300 | | |
| 643,358 | | |
| -25.5 | % |
| EBITDA breakdown (Ps. 2,003 million) | |
| Concept | |
9M
2024 | | |
9M
2023 | | |
∆% | |
| Net income including
minority interest | |
| 479,348 | | |
| 640,328 | | |
| -58.1 | % |
| (+) Income taxes | |
| 386,534 | | |
| 288,839 | | |
| 106.8 | % |
| (+) Financing cost, net | |
| 411,075 | | |
| 694,632 | | |
| -40.8 | % |
| (+) Depreciation and amortization | |
| 291,115 | | |
| 277,617 | | |
| 4.9 | % |
| EBITDA | |
| 1,568,072 | | |
| 1,901,417 | | |
| -17.5 | % |
| EBITDA
Margin | |
| 15.19 | % | |
| 19.79 | % | |
| | |
| (+) Other expenses - Sale
of fixed assets | |
| 435,030 | | |
| 0 | | |
| | |
| Adjusted
EBITDA | |
| 2,003,102 | | |
| 1,901,417 | | |
| 5.3 | % |
| Adjusted
EBITDA Margin | |
| 19.4 | % | |
| 19.8 | % | |
| | |
| Net adjusted income breakdown |
| Concept | |
9M 2024 | | |
9M 2023 | | |
∆% | |
| Net (loss) income including minority interest | |
| 479,300 | | |
| 643,358 | | |
| -25.5 | % |
| (+) Other expenses - Sale of fixed assets | |
| 435,030 | | |
| 0 | | |
| 100.0 | % |
| (+) Income taxes for the sale of fixed assets | |
| 71,983 | | |
| 0 | | |
| 100.0 | % |
| (+) Income taxes – deferred | |
| -210,868 | | |
| 0 | | |
| 100.0 | % |
| Net adjusted income | |
| 775,445 | | |
| 643,358 | | |
| 20.5 | % |
Betterware
de México, S.A.P.I. de C.V.
Consolidated
Statements of Cash Flows
For
the nine-months ended September 30, 2024 and 2023
(In
Thousands of Mexican Pesos)
| | |
9M
2024 | | |
9M
2023 | |
| Cash
flows from operating activities: | |
| | |
| |
| Profit
for the period | |
| 479,348 | | |
| 640,328 | |
| | |
| | | |
| | |
| Adjustments
for: | |
| | | |
| | |
| Income
tax expense recognized in profit of the year | |
| 386,534 | | |
| 288,839 | |
| Depreciation
and amortization of non-current assets | |
| 291,114 | | |
| 277,617 | |
| Interest
income recognized in profit or loss | |
| -13,554 | | |
| -39,337 | |
| Interest
expense recognized in profit or loss | |
| 489,179 | | |
| 624,830 | |
| Unrealized
loss in valuation of financial derivative instruments | |
| -153,389 | | |
| 9,950 | |
| Share-based
payment expense | |
| -8,894 | | |
| -3,699 | |
| Loss (gain)
on disposal of equipment | |
| 699,176 | | |
| -2,483 | |
| Currency
effect | |
| -17,021 | | |
| -5,494 | |
| Movements
in non- controlling interest | |
| 103 | | |
| -90 | |
| Other
gains and losses | |
| 0 | | |
| 3,100 | |
| Movements
in working capital: | |
| | | |
| | |
| Trade
accounts receivable | |
| -127,662 | | |
| -304,775 | |
| Trade
accounts receivable from related parties | |
| -2,303 | | |
| 13 | |
| Inventory,
net | |
| -470,236 | | |
| -55,348 | |
| Prepaid
expenses and other assets | |
| -170,656 | | |
| -47,968 | |
| Accounts
payable to suppliers and accrued expenses | |
| 668,348 | | |
| 656,184 | |
| Provisions | |
| -25,756 | | |
| 71,942 | |
| Value
added tax payable | |
| -73,747 | | |
| -37,237 | |
| Statutory
employee profit sharing | |
| -45,970 | | |
| -30,623 | |
| Trade
accounts payable to related parties | |
| 20 | | |
| -96,859 | |
| Income
taxes paid | |
| -633,554 | | |
| -322,241 | |
| Employee
benefits | |
| 12,551 | | |
| 8,045 | |
| Net
cash generated by operating activities | |
| 1,283,631 | | |
| 1,634,694 | |
| | |
| | | |
| | |
| Cash
flows from investing activities: | |
| | | |
| | |
| Payments
for property, plant and equipment, net | |
| -174,996 | | |
| -54,082 | |
| Proceeds
from disposal of property, plant and equipment, net | |
| 126,836 | | |
| 18,662 | |
| Interest
received | |
| 13,554 | | |
| 39,337 | |
| Net
cash (used in) generated by investing activities | |
| -34,606 | | |
| 3,917 | |
| | |
| | | |
| | |
| Cash
flows from financing activities: | |
| | | |
| | |
| Repayment of borrowings | |
| -2,071,500 | | |
| -6,593,695 | |
| Proceeds
from borrowings | |
| 1,945,000 | | |
| 5,708,974 | |
| Interest
paid | |
| -497,796 | | |
| -529,381 | |
| Bond
issuance costs | |
| 0 | | |
| -8,003 | |
| Lease
payment | |
| -109,541 | | |
| -86,958 | |
| Dividends
paid | |
| -748,540 | | |
| -449,124 | |
| Net
cash used in financing activities | |
| -1,482,377 | | |
| -1,958,187 | |
| Net
decrease in cash and cash equivalents | |
| -233,352 | | |
| -319,576 | |
| Cash
and cash equivalents at the beginning of the period | |
| 549,730 | | |
| 815,644 | |
| Cash
and cash equivalents at the end of the period | |
| 316,378 | | |
| 496,068 | |
Key
Operating Metrics
Betterware
Mexico
| | |
Q2
2023 | | |
Q3
2023 | | |
Q4
2023 | | |
Q1
2024 | | |
Q2
2024 | | |
Q3
2024 | |
| Associates | |
| | |
| | |
| | |
| | |
| | |
| |
| Avg.
Base | |
| 753,743 | | |
| 768,042 | | |
| 756,250 | | |
| 716,645 | | |
| 713,144 | | |
| 694,277 | |
| EOP
Base | |
| 756,637 | | |
| 759,310 | | |
| 741,170 | | |
| 724,707 | | |
| 699,033 | | |
| 700,893 | |
| Monthly
Activity Rate | |
| 66.7 | % | |
| 65.2 | % | |
| 66.0 | % | |
| 67.7 | % | |
| 66.4 | % | |
| 66.3 | % |
| Avg.
Monthly Order | |
$ | 1,877 | | |
$ | 1,823 | | |
$ | 1,959 | | |
$ | 2,052 | | |
$ | 2,027 | | |
$ | 2,034 | |
| Monthly
Growth Rate | |
| 15.2 | % | |
| 15.7 | % | |
| 14.9 | % | |
| 15.1 | % | |
| 13.8 | % | |
| 15.7 | % |
| Monthly
Churn Rate | |
| 15.5 | % | |
| 15.5 | % | |
| 15.7 | % | |
| 15.8 | % | |
| 15.0 | % | |
| 15.6 | % |
| Distributors | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Avg.
Base | |
| 40,825 | | |
| 42,551 | | |
| 42,369 | | |
| 42,886 | | |
| 44,953 | | |
| 44,639 | |
| EOP
Base | |
| 41,981 | | |
| 41,932 | | |
| 41,825 | | |
| 44,482 | | |
| 45,009 | | |
| 43,939 | |
| Monthly
Activity Rate | |
| 98.1 | % | |
| 97.9 | % | |
| 98.1 | % | |
| 98.5 | % | |
| 98.0 | % | |
| 98.0 | % |
| Avg.
Monthly Order | |
$ | 23,440 | | |
$ | 21,944 | | |
$ | 23,518 | | |
$ | 23,582 | | |
$ | 21,669 | | |
$ | 21,531 | |
| Monthly
Growth Rate | |
| 10.7 | % | |
| 10.4 | % | |
| 9.9 | % | |
| 11.8 | % | |
| 11.4 | % | |
| 10.4 | % |
| Monthly
Churn Rate | |
| 9.1 | % | |
| 10.4 | % | |
| 10.0 | % | |
| 9.7 | % | |
| 11.0 | % | |
| 11.2 | % |
Jafra
Mexico
| | |
Q2
2023 | | |
Q3
2023 | | |
Q4
2023 | | |
Q1
2024 | | |
Q2
2024 | | |
Q3
2024 | |
| Associates | |
| | |
| | |
| | |
| | |
| | |
| |
| Avg.
Base | |
| 427,289 | | |
| 414,968 | | |
| 461,712 | | |
| 469,290 | | |
| 432,450 | | |
| 403,340 | |
| EOP
Base | |
| 424,435 | | |
| 422,956 | | |
| 467,736 | | |
| 451,692 | | |
| 419,931 | | |
| 421,073 | |
| Monthly
Activity Rate | |
| 51.2 | % | |
| 52.2 | % | |
| 52.9 | % | |
| 53.7 | % | |
| 50.50 | % | |
| 51.6 | % |
| Avg.
Monthly Order | |
$ | 2,091 | | |
$ | 2,088 | | |
$ | 2,181 | | |
$ | 2,238 | | |
$ | 2,284 | | |
$ | 2,347 | |
| Monthly
Growth Rate | |
| 8.9 | % | |
| 10.5 | % | |
| 11.5 | % | |
| 9.5 | % | |
| 8.4 | % | |
| 12.0 | % |
| Monthly
Churn Rate | |
| 9.1 | % | |
| 10.6 | % | |
| 8.3 | % | |
| 10.6 | % | |
| 10.8 | % | |
| 11.9 | % |
| Distributors | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Avg.
Base | |
| 18,853 | | |
| 18,553 | | |
| 18,576 | | |
| 18,927 | | |
| 19,073 | | |
| 18,823 | |
| EOP
Base | |
| 18,721 | | |
| 18,555 | | |
| 18,719 | | |
| 19,159 | | |
| 19,035 | | |
| 18,722 | |
| Monthly
Activity Rate | |
| 94.0 | % | |
| 94.0 | % | |
| 95.3 | % | |
| 96.0 | % | |
| 93.10 | % | |
| 93.2 | % |
| Avg.
Monthly Order | |
$ | 2,463 | | |
$ | 2,236 | | |
$ | 2,624 | | |
$ | 2,396 | | |
$ | 2,693 | | |
$ | 2,694 | |
| Monthly
Growth Rate | |
| 1.0 | % | |
| 1.1 | % | |
| 1.4 | % | |
| 1.6 | % | |
| 0.7 | % | |
| 0.9 | % |
| Monthly
Churn Rate | |
| 1.4 | % | |
| 1.4 | % | |
| 1.1 | % | |
| 0.8 | % | |
| 0.8 | % | |
| 1.5 | % |
Jafra
US
| | |
Q2
2023 | | |
Q3
2023 | | |
Q4
2023 | | |
Q1
2024 | | |
Q2
2024 | | |
Q3
2024 | |
| Associates | |
| | |
| | |
| | |
| | |
| | |
| |
| Avg.
Base | |
| 28,541 | | |
| 29,608 | | |
| 31,268 | | |
| 29,506 | | |
| 30,864 | | |
| 30,150 | |
| EOP
Base | |
| 29,921 | | |
| 30,489 | | |
| 31,117 | | |
| 29,470 | | |
| 31,026 | | |
| 29,103 | |
| Monthly
Activity Rate | |
| 44.4 | % | |
| 45.1 | % | |
| 43.8 | % | |
| 42.4 | % | |
| 46.7 | % | |
| 41.6 | % |
| Avg.
Monthly Order (USD) | |
$ | 235 | | |
$ | 228 | | |
$ | 231 | | |
$ | 223 | | |
$ | 232 | | |
$ | 233 | |
| Monthly
Growth Rate | |
| 12.9 | % | |
| 14.5 | % | |
| 12.5 | % | |
| 11.3 | % | |
| 14.4 | % | |
| 11.2 | % |
| Monthly
Churn Rate | |
| 11.5 | % | |
| 13.8 | % | |
| 11.5 | % | |
| 13.1 | % | |
| 12.5 | % | |
| 13.7 | % |
| Distributors | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Avg.
Base | |
| 2,041 | | |
| 1,642 | | |
| 1,782 | | |
| 1,728 | | |
| 1,726 | | |
| 1,774 | |
| EOP
Base | |
| 1,760 | | |
| 1,645 | | |
| 1,793 | | |
| 1,674 | | |
| 1,766 | | |
| 1,772 | |
| Monthly
Activity Rate | |
| 83.8 | % | |
| 90.4 | % | |
| 90.2 | % | |
| 88.3 | % | |
| 90.7 | % | |
| 87.5 | % |
| Avg.
Monthly Order (USD) | |
$ | 220 | | |
$ | 217 | | |
$ | 215 | | |
$ | 217 | | |
$ | 229 | | |
$ | 233 | |
| Monthly
Growth Rate | |
| 2.6 | % | |
| 6.3 | % | |
| 7.9 | % | |
| 4.6 | % | |
| 8.5 | % | |
| 5.8 | % |
| Monthly
Churn Rate | |
| 7.6 | % | |
| 8.4 | % | |
| 5.0 | % | |
| 6.9 | % | |
| 6.7 | % | |
| 5.7 | % |
Key
Financial Metrics
Consolidated
| | |
Q2
2023 | | |
Q3
2023 | | |
Q4
2023 | | |
Q1
2024 | | |
Q2
2024 | | |
Q3
2024 | |
| Net
Revenue | |
$ | 3,220,097 | | |
$ | 3,123,507 | | |
$ | 3,401,692 | | |
$ | 3,602,503 | | |
$ | 3,389,393 | | |
$ | 3,330,394 | |
| Gross
Margin | |
| 73.3 | % | |
| 70.2 | % | |
| 70.0 | % | |
| 73.6 | % | |
| 72.2 | % | |
| 71.2 | % |
| EBITDA | |
$ | 717,433 | | |
$ | 529,424 | | |
$ | 819,484 | | |
$ | 755,390 | | |
$ | 656,136 | | |
$ | 591,575 | |
| EBITDA
Margin | |
| 22.3 | % | |
| 16.9 | % | |
| 24.1 | % | |
| 21.0 | % | |
| 19.4 | % | |
| 17.8 | % |
| Net
Income | |
$ | 258,370 | | |
$ | 196,991 | | |
$ | 406,104 | | |
$ | 294,146 | | |
$ | 300,768 | | |
$ | 108,548 | |
| Free
Cash Flow | |
$ | 936,121 | | |
$ | 1,134,621 | | |
$ | 1,628,456 | | |
$ | 180,217 | | |
$ | 522,210 | | |
$ | 1,235,471 | |
Betterware
Mexico
| | |
Q2
2023 | | |
Q3
2023 | | |
Q4
2023 | | |
Q1
2024 | | |
Q2
2024 | | |
Q3
2024 | |
| Net
Revenue | |
$ | 1,444,406 | | |
$ | 1,420,739 | | |
$ | 1,472,480 | | |
$ | 1,555,027 | | |
$ | 1,476,375 | | |
$ | 1,465,577 | |
| Gross
Margin | |
| 61.8 | % | |
| 56.2 | % | |
| 50.2 | % | |
| 60.00 | % | |
| 56.4 | % | |
| 54.8 | % |
| EBITDA | |
$ | 443,508 | | |
$ | 328,295 | | |
$ | 250,342 | | |
$ | 382,107 | | |
$ | 304,467 | | |
$ | 279,889 | |
| EBITDA
Margin | |
| 30.7 | % | |
| 23.1 | % | |
| 17.0 | % | |
| 24.60 | % | |
| 20.6 | % | |
| 19.1 | % |
Jafra
Mexico
| | |
Q2
2023 | | |
Q3
2023 | | |
Q4
2023 | | |
Q1
2024 | | |
Q2
2024 | | |
Q3
2024 | |
| Net
Revenue | |
$ | 1,536,775 | | |
$ | 1,486,816 | | |
$ | 1,668,956 | | |
$ | 1,849,996 | | |
$ | 1,671,137 | | |
$ | 1,623,697 | |
| Gross
Margin | |
| 83.3 | % | |
| 83.0 | % | |
| 86.5 | % | |
| 85.00 | % | |
| 86.0 | % | |
| 85.7 | % |
| EBITDA | |
$ | 268,724 | | |
$ | 207,985 | | |
$ | 532,780 | | |
$ | 383,120 | | |
$ | 344,478 | | |
$ | 318,148 | |
| EBITDA
Margin | |
| 17.5 | % | |
| 14.0 | % | |
| 31.9 | % | |
| 20.70 | % | |
| 20.6 | % | |
| 19.6 | % |
Jafra
US
| | |
Q2
2023 | | |
Q3
2023 | | |
Q4
2023 | | |
Q1
2024 | | |
Q2
2024 | | |
Q3
2024 | |
| Net
Revenue | |
$ | 238,916 | | |
$ | 215,952 | | |
$ | 260,256 | | |
$ | 197,480 | | |
$ | 241,881 | | |
$ | 241,120 | |
| Gross
Margin | |
| 77.8 | % | |
| 74.1 | % | |
| 74.4 | % | |
| 74.00 | % | |
| 73.6 | % | |
| 73.3 | % |
| EBITDA | |
$ | 5,201 | | |
$ | (8,138 | ) | |
$ | 37,033 | | |
$ | (9,838 | ) | |
$ | 7,192 | | |
$ | (6,462 | ) |
| EBITDA
Margin | |
| 2.2 | % | |
| (3.2 | )% | |
| 14.0 | % | |
| (5.00 | )% | |
| 3.0 | % | |
| -2.7 | % |
Use
of Non-IFRS Financial Measures
This
announcement includes certain references to EBITDA, EBITDA Margin, Net Debt:
EBITDA:
defined as profit for the year adding back the depreciation of property, plant, and equipment and right of use assets, amortization
of intangible assets, financing cost, net and total income taxes.
EBITDA
Margin: is calculated by dividing EBITDA by net revenue.
EBITDA
and EBITDA Margin are not measures recognized under IFRS and should not be considered as an alternative to, or more meaningful than,
consolidated net income for the year as determined in accordance with IFRS or as indicators of our operating performance from continuing
operations. Accordingly, readers are cautioned not to place undue reliance on this information and should note that these measures as
calculated by the Company, may differ materially from similarly titled measures reported by other companies.
BeFra
believes that these non-IFRS financial measures are useful to investors because (i) BeFra uses these measures to analyze its financial
results internally and believes they represent a measure of operating profitability and (ii) these measures will serve investors to understand
and evaluate BeFra’s EBITDA and provide more tools for their analysis as it makes BeFra’s results comparable to industry
peers that also prepare these measures.
Definitions:
Operating Metrics
Starting
Q2 2024, the Company will report salesforce under the same name for all business units, Distributors (previously stated as Leaders in
Jafra) and Associates (previously stated as Consultants for Jafra). It is important to note that the metrics are calculated with the
same method as previous quarters and the reference name change has no adverse effect on the results of the operating metrics reported
by the Company.
Betterware
(Associates and Distributors)
Avg.
Base: Weekly average Associate/Distributor base
EOP
Base: Associate/Distributor base at the end of the period
Weekly
Churn Rate: Average weekly data. Total Associates/Distributors lost during the period divided by the beginning of the period Associate/Distributor
base.
Weekly
Activity Rate: Average weekly data. Active Associates/Distributors divided by ending Associate/Distributor base.
Avg.
Weekly Order: Average weekly data. Total Revenue divided by number of active Associates/Distributors
Jafra
(Associates and Distributors)
Avg.
Base: Monthly average Associate/Distributor base
EOP
Base: Associate/Distributor base at the end of the period
Monthly
Churn Rate (Associates): Average monthly data. Total Associates lost during the period divided by the number of active Associates
4 months prior. An Associate is terminated only after 4 months of inactivity.
Monthly
Churn Rate (Distributors): Average monthly data. Total Distributors lost during the period divided by end of period Distributors’
base.
Monthly
Activity Rate: Average monthly data. Active Associate/Distributor divided by the end of period Associate/Distributor base.
Avg.
Monthly Order (Associates): Average monthly data. Total Catalogue Revenue divided by number of Associates orders.
Avg.
Monthly Order (Distributors): Average monthly data. Total Distributors Revenue divided by number of Distributors orders.
About
Betterware de México, S.A.P.I. de C.V.
Founded
in 1995, Betterware de Mexico is the leading direct-to-consumer company in Mexico focused on offering innovative products that solve
specific needs related to household organization, practicality, space-saving, and hygiene. Through the acquisition of JAFRA on April
7, 2022, the Company now offers a leading brand of direct-to-consumer in the Beauty market in Mexico and the United States where it offers
Fragrances, Color & Cosmetics, Skin Care, and Toiletries. The combined company possesses an asset-light business model with low capital
expenditure requirements and a track record of strong profitability, double digit rates of revenue growth and free cash flow generation.
Today, the Company distributes its products in Mexico and in the United States of America.
Forward-Looking
Statements
This
press release includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor
provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied
by words such as “believe,” “may,” “will”, “estimate”, “continue”, “anticipate”,
“intend”, “expect”, “should”, “would”, “plan”, “predict”, “potential”,
“seem”, “seek,” “future,” “outlook”, and similar expressions that predict or indicate
future events or trends or that are not statements of historical matters. The reader should understand that the results obtained may
differ from the projections contained in this document and that many factors could cause our actual activities or results to differ materially
from the activities and results anticipated in forward looking statements. For this reason, the Company assumes no responsibility for
any indirect factors or elements beyond its control that might occur inside Mexico or abroad and which might affect the outcome of these
projections and encourages you to review the ‘Cautionary Statement’ and the ‘Risk Factor’ sections of our annual
report on Form 20-F for the year ended December 31, 2020 and any of the Company’s other applicable filings with the Securities
and Exchange Commission for additional information concerning factors that could cause those differences
The
Company undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring
after the date hereof. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the
date hereof. Further information on risks and uncertainties that may affect the Company’s operations and financial performance,
and the forward statements contained herein, is available in the Company’s filings with the SEC. All forward-looking statements
are qualified in their entirety by this cautionary statement.
Q3
2024 Conference Call
Management
will hold a conference call with investors on October 24th, 2024, at 3:30 pm Mexico City Time / 5:30 pm Eastern Time (EST).
For anyone who wishes to join live, the dial-in information is:
Toll
Free: 1-877-451-6152
Toll/International:
1-201-389-0879
Conference
ID: 13749450
If
you wish to listen to the replay of the conference call, please see instructions below:
Toll
Free: 1-844-512-2921
Toll/International:
1-412-317-6671
Replay
Pin Number: 13749450
Contacts.
Company:
BeFra
IR
ir@better.com.mx
+52
(33) 3836 0500 Ext. 2011
InspIR:
Investor
Relations
Ivan
Peill
ivan@inspirgroup.com
Betterware de Mexico SAP... (NYSE:BWMX)
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