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      Betterware Reports Fourth Quarter and Fiscal Year 2023 Results


      News provided by

      Betterware de México, S.A.P.I. de C.V.

      Feb 22, 2024, 18:52 ET

      Share this article

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      GUADALAJARA, Mexico, Feb. 22, 2024 /PRNewswire/ -- Betterware de México S.A.P.I. de C.V. (NASDAQ: BWMX), ("Betterware" or the 'Company"), announced today its consolidated financial results for the fourth quarter and fiscal year 2023. The figures presented in this report are expressed in nominal Mexican Pesos (Ps.) unless otherwise noted, presented and approved by the Board of Directors, prepared in accordance with IFRS, and may include minor differences due to rounding.

      The Company will host a conference call at 9:00 am (Eastern Time) on February 23, 2024, to discuss its results for the fourth quarter of fiscal year 2023.

      Message from the Chairman

      We are immensely proud of our performance throughout the last quarter of the year, which significantly contributed to our strong overall results for 2023. This includes achieving double-digit revenue growth and increased profitability. Moreover, our robust cashflow generation has enabled us to further strengthen our capital structure and bolster the resilience of our balance sheet as we enter 2024.

      As a group, we have embarked upon a phase of renewed growth, driven in part by the notable stabilization of Mexico's home solutions market following the pandemic's disruptive impact. This, coupled with strong execution on commercial strategies based on our four key elements (Portfolio, Incentives, Ease of Doing Business, and Kinship) have fueled a resurgence in growth at Betterware Mexico, reflected in a 7% year over year increase in Q4 revenues.  Further, Jafra Mexico continues to capture the tremendous opportunity in Latin America's second largest beauty market and the tenth largest globally.  And we are well-positioned to grow Jafra US and to introduce Betterware to the US market in 2024.  

      Our Jafra acquisition has proven both successful and highly accretive; surpassing our expectations and delivering exceptional results. Prior to the acquisition, Jafra Mexico faced a declining trend in net revenue, which we successfully reversed to secure double-digit growth in 2023. Similarly, EBITDA and EBITDA margin have followed this positive trend. The initial implementation of our proven model's key pillars- product innovation, technology, and business intelligence- has propelled the company back into a growth phase while elevating profitability to new heights.  We have also realized meaningful synergies resulting in cost savings across various areas including catalog printouts, cardboard, insurance, market research, software, technology resources, and organizational optimization.  Jafra is poised for a strong trajectory within Mexico's large and growing beauty market, approximately 50% of which is served by the direct sales segment.  2023 has been a pivotal year in our pursuit of becoming the number one direct sales beauty company in Mexico, and we remain steadfast in our commitment to implementing all necessary transformations to achieve this goal.

      We are currently ramping up our international operations.  Despite 2023's challenging start at Jafra US, due to unforeseen decisions made by the prior newly installed management, we have successfully stabilized revenue and made important decisions to position the Company for future growth.  A key milestone was almost reaching operational breakeven in the fourth quarter. This marks a crucial turning point for the Company, setting the stage for a new phase of financial stability and expansion opportunities.  In parallel, Betterware US is ready for launch at the beginning of Q2, showcasing an enhanced direct selling model that we are confident will pave the way for success.  Finally, we made continued progress to launch Betterware in Peru during the first half of 2025.

      Looking ahead, we will continue to focus on successfully executing our commercial plans to expand top line growth with an eye towards cost efficiencies, building upon our strong results for continued positive EBITDA and cash flow generation.

      Without minimizing the challenges we have faced, I am confident in our promising path ahead.  Our Company's strong foundation of decades as an industry leader, coupled with our revitalized management, remains a winning formula for success.  We are committed to setting ambitious goals and upholding the highest standards, enabling us to fulfill our mission of creating opportunities for more individuals to enhance their lives.

      Luis G. Campos
      Chairman of the Board

      4Q23 and Fiscal 2023 Consolidated Selected Financial Information


      4Q23

      4Q22

      2023

      2022

      Net Revenue

      $3,401,692

      $3,232,460

      +5.2 %

      $13,009,507

      $11,507,549

      +13.1 %

      Gross Margin

      70.0 %

      70.4 %

      (48 bps)

      71.5 %

      68.9 %

      +265 bps

      EBITDA

      $819,483

      $599,342

      +36.7 %

      $2,720,900

      $2,316,108

      +17.5 %

      EBITDA Margin

      24.1 %

      18.5 %

      +556 bps

      20.9 %

      20.1 %

      +79 bps

      Free Cash Flow

      $652,555

      $992,440

      (34.2 %)

      $2,255,981

      $1,256,140

      +79.6 %

      Net Income

      $406,104

      $249,948

      +62.5 %

      $1,049,461

      $872,557

      +20.3 %

      EPS

      $10.9

      $6.7

      +62.5 %

      $28.2

      $23.6

      +22.2 %

      Net Debt / TTM EBITDA

       1.8x

      2.5x 





      Interest Coverage ratio (TTM)

      2.9x 

       3.7x





      *2022 Figures include Jafra´s operations since April 7th, 2022.


      4Q23

      4Q22

      2023

      2022

      Associates and Consultants







      Avg. Base

      1,249,230

      1,299,717

      (3.9 %)

      1,225,595

      1,322,840

      (7.4 %)

      EOP Base

      1,240,023

      1,268,945

      (2.3 %)

      1,240,023

      1,271,036

      (2.4 %)

      Distributors and Leaders







      Avg. Base

      62,727

      62,679

      +0.1 %

      61,833

      66,300

      (6.7 %)

      EOP Base

      62,337

      60,798

      +2.5 %

      62,337

      60,798

      +2.5 %

      Highlights

      • Revenue Growth Resumes.  YoY net revenue growth of 5.2% in the 4Q23, supported by growth of our two brands in Mexico.      
      • Solid EBITDA Growth.  YoY EBITDA growth of 36.7% in 4Q23 and 17.5% in FY23 when compared to last year.
        • Gross margin increased by 265-bps in 2023, primarily due to a favorable exchange rate, resulting in better cost structure for Betterware products and raw materials for Jafra.
        • EBITDA margin rose by 556-bps from 18.5% in 4Q22 to 24.1% in 4Q23, and by 79-bps from 20.1% in FY22 to 20.9% in FY23.
        • Year-over-year EBITDA growth in all three group companies was bolstered by successful expense optimization efforts.
        • We exceeded our EBITDA expectations for 4Q23, and met the expectation for FY23, generating full year total EBITDA of Ps. 2,721M.
      • Strong Free Cash Flow Generation.  Increased FY23 free cash flow 79.6% compared to prior year, which includes Jafra´s results since the acquisition was completed in April 2022.  Operating cash flow increased 67.9% on EBITDA increase, as well as inventory holding period improvements in all businesses, as well as improved supplier conditions negotiated, mainly, in Jafra Mexico.
      • Continued Debt Reduction. Reduced total net debt to Ps. 4,955M (from Ps. 5,625M in 2022), lowering our Net Debt / EBITDA ratio to 1.8x by the end of 2023, despite a decrease in our interest coverage ratio (derived from higher interest rates that affect our variable interest rate loans).
      • Robust Overall Quarter and Full Year Results. Ended 2023 with consolidated full year financial results surpassing the previous year in most of the key metrics: gross margin, EBITDA, EBITDA margin, Free cash flow, and EPS.

      2024 Priorities

      • Revenue. Ramping up execute of 2024 commercial plan.
      • Cost control. Maintaining the gross margin at 68%-70% range throughout 2024 by persisting in our strategies to improve cost efficiency. This entails securing hedges against exchange rate fluctuations, negotiating costs of raw materials and products with our key suppliers, and design-to-cost engineering efforts.
      • Betterware US Launch. Launching our Betterware US (BWUS) operations in 2Q24, initially focusing on the Hispanic Population, with an expected annual investment of around $6M USD for 2024. While first year operations are not expected to provide a meaningful contribution, we will keep the market updated on key milestones.  The team is in place for a successful launch.
      • Betterware Peru preparations.  Currently assembling the management team that will spearhead the launch of our operations in 2025. This includes setting up the company and foundational infrastructure to make a significant and rapid impact in the Peruvian market.

      4Q23 and Fiscal 2023 Financial Results by Business

      Betterware Mexico
      Key Operating and Financial Metrics


      4Q23

      4Q22

      2023

      2022

      Net Revenue

      $1,472,480

      $1,376,625

      +7.0 %

      $5,726,608

      $6,343,344

      (9.7 %)

      Gross Margin

      50. %

      57.7 %

      (730 bps)

      57.3 %

      59.4 %

      (205 bps)

      EBITDA

      $250,342

      $212,923

      +17.6 %

      $1,434,501

      $1,480,855

      (3.1 %)

      EBITDA Margin

      17.0 %

      15.5 %

      +153 bps

      25.0 %

      23.3 %

      +170 bps


      4Q23

      4Q22

      2023

      2022

      Associates







      Avg. Base

      756,250

      819,790

      (7.8 %)

      757,653

      897,989

      (15.6 %)

      EOP Base

      741,170

      778,845

      (4.8 %)

      741,170

      778,845

      (4.8 %)

      Monthly Activity Rate

      66.0 %

      64.7 %

      +132 bps

      66.5 %

      67.7 %

      (115 bps)

      Avg. Monthly Order

      $1,959

      $1,711

      +14.5 %

      $1,856

      $1,733

      +7.1 %

      Distributors







      Avg. Base

      42,369

      41,109

      +3.1 %

      41,193

      44,084

      (6.6 %)

      EOP Base

      41,825

      39,413

      +6.1 %

      41,825

      39,413

      +6.1 %

      Monthly Activity Rate

      98.1 %

      98.2 %

      (11 bps)

      98.2 %

      98.3 %

      (10 bps)

      Avg. Monthly Order

      $23,518

      $22,421

      +4.9 %

      $23,104

      $24,281

      (4.8 %)

      Highlights

      • Net Revenue Surge: 4Q23 grew 7.0% vs. 4Q22, marking the first instance of YoY growth since 3Q21 (vs.3Q20).
        • Growth fueled by a 3.1% expansion in the average Distributor base, a significant 1.3 pp rise in Associates' activity, and a 14.5% increase in their average monthly order.
        • This follows the stabilization of sales resulting from our back to growth initiatives previously discussed. Despite softer growth recovery than anticipated, we are now on the right track and committed to executing all our strategies to strengthen this revenue growth.
        • 2024 Focus: Adhere to strategic commercial plan.
      • Increased EBITDA margin: 4Q23 and FY23 margins improved by 153-bps and 170-bps when compared to the prior year, mainly explained by a more streamlined operational structure and effective expense control.
        • Notable decrease in direct expenses: 4.2-pps in 4Q23 and 3.2-pps in FY23 versus last year, due to efficient promotions, reduced catalog and packaging material costs, and improved pick and pack processes.
        • ­Significant operating expense reduction: 15.8% in 4Q23 and 9.6% in FY23, mainly due to adjustments made during 3Q22 and 4Q22, incurring in extraordinary expenses to align the operational structure with the new sales level.
        • Financial discipline focus in 2024 to preserve gross margin and manage direct and operating expenses effectively.
      • Regained strength in generating operating cash flow. Operating cash flow in FY23 reached Ps. 1,178M, marking a significant 254% increase compared to FY22.
        • Transition in working capital from a negative to a positive change.
        • Marked improvement in the cash conversion cycle for 4Q23 to 14 days, down from 73 days in 4Q22, primarily due to enhancement in days inventory outstanding (DIO).
        • Expecting strong cash flow generation through a combined focus on commercial and operating strategies, including increased inventory management efficiencies.
      • Stabilized Sales Force. Stabilization in Associate and Distributor bases, although figures remain below 2022 levels.
        • Over the past four quarters, the Associate churn rate has mirrored the rate of new incorporations.
        • Improving monthly incorporation in 2023 reaching 15.2% as compared to rate in 2022 was 12.6%, thus allowing us to remain stable.
        • Continued growth of Distributors projected to activate recruitment of new Associates.
        • Churn reduction strategies include:
          • Generating more sales per Associate derived from a better overall portfolio management.
          • Offering segmented incentives for Associates to remain with us.
          • Developing improved training programs.
          • Fostering more kinship with Associates.
      • Gross Margin: Gross margin contracted 730-bps in 4Q23 compared to 4Q22, which can be explained by: 270-bps from prices reductions to be more competitive (benefits from the appreciation of the Mexican Peso passed on to consumers), 170-bps from a higher promotional share within the sales mix due to a very successful Christmas portfolio during the season, 180-bps for air freight incurred to have enough merchandise for a higher demand than expected, and 132-bps contracted due to an increase in import taxes (in some products) made by local authorities in 4Q23. For FY23, the gross margin closed at 57.3%, hitting the lower boundary of the expected range for this business.
      • For 2024, we anticipate our gross margin to be in the range of 58% to 59% derived from: (a) sales mix shift towards core products with higher margins, (b) Cost structure fortified through FX hedging and fixed freight costs, and (c) 2024 pricing strategy designed to maintain competitiveness and ensure profitability.
      • Reducing Inventory: 13% reduction in total inventory compared to the previous year, but still have excesses from heightened innovation activities in 2023.
        • During 2023, we achieved a 77% reduction in 2022's excess inventory, exceeding our target of 50% for the year, with the balance intended for 2024. Nevertheless, the year's innovation efforts resulted in additional inventory accumulation, hindering expected reductions.  We expect to reduce almost all excess inventories throughout 2024.

      2024 Priorities

      • Strategic commercial plan: Several initiatives to grow net revenue included in our 2024 commercial plan, which comprise the launching of new Betterware sub-brands, licensing collaborations for specific products, Betterware Design Lab expansion, sponsorships (Mexican Olympic Team), catalog enhancements, branding campaigns, social media presence, tailored incentives for Associates/Distributors, as well as, more training, innovative financing options for product purchases, and technological enhancements to the Betterware+ App.

      Jafra Mexico 

      Key Operating and Financial Metrics


      4Q23

      4Q22

      2023

      2022

      Net Revenue

      $1,668,956

      $1,522,363

      +9.6 %

      $6,354,952

      $4,198,120

      +51.4 %

      Gross Margin

      86.5 %

      80.7 %

      +581 bps

      83.7 %

      81.9 %

      +185 bps

      EBITDA

      $532,780

      $366,790

      +45.3 %

      $1,287,036

      $854,250

      +50.7 %

      EBITDA Margin

      31.9 %

      24.1 %

      +783 bps

      20.3 %

      20.3 %

      (10 bps)

      *2022 Figures include Jafra´s operations since April 7th, 2022.


      4Q23

      4Q22

      2023

      2022

      Consultants







      Avg. Base

      461,712

      445,535

      +3.6 %

      438,238

      389,680

      +12.46 %

      EOP Base

      467,736

      455,969

      +2.6 %

      467,736

      455,969

      +2.6 %

      Monthly Activity Rate

      52.9 %

      53.8 %

      (93 bps)

      52.0 %

      53.6 %

      (160 bps)

      Avg. Monthly Order

      $2,181

      $2,006

      +8.7 %

      $2,107

      $1,989

      +5.9 %

      Leaders







      Avg. Base

      18,576

      19,387

      (4.2 %)

      18,753

      20,107

      (6.7 %)

      EOP Base

      18,719

      19,290

      (3.0 %)

      18,719

      19,290

      (3.0 %)

      Monthly Activity Rate

      95.0 %

      93.3 %

      +170 bps

      94.3 %

      92.3 %

      +200 bps

      Avg. Monthly Order

      $2,624

      $2,295

      +14.4 %

      $2,396

      $2,310

      +3.7 %

      Highlights

      • Strong Net Revenue. Growth momentum continues, reflected in robust 4Q23 and FY23 performance driven by the prior year's growth.
        • Two consecutive years of growth, with a 51.4% year on year increase vs. 2022, which includes Jafra´s results since the acquisition was completed in April 2022.
        • Increased revenue resulted from the implementation and execution of our business model, which includes refreshing the brand and accelerating product innovation with time-to-market reduced to 7.8 months (compared to 18 months previously), applying commercial technology, redesigning our catalog, enhancing incentive programs, and boosting overall sales force motivation, among other initiatives.
        • Double-digit net revenue growth expected for 2024 on more of our commercial model fronts, including Revenue Growth Management (RGM) initiatives, continued product innovation enhancements, and further technological implementations to ease the way of doing business, regaining a foothold in historically successful cities, among others.
      • Resumed consultant base growth. The consultant base reflected a considerable 10.6% sequential quarterly increase by the end of 4Q23. Leaders saw almost a 1.0% increase in the same period.
        • FY23 strategy led to a reduction in Leader base for quality improvement (re-engage leaders in the business to increase their sales and those of their lineage), while Consultants grew by 2.6% year on year.
        • 2024 strategy: Focus shift to recruitment from retention (2023), supported by planned monthly initiatives to encourage enrollment.
        • Established program to develop more Consultants into Leaders.
      • Average monthly order increasing. 8.7% and 14.4% growth in average monthly orders for Consultants and Leaders, respectively, in 4Q23 compared to the previous quarter.
        • Consistent optimal monthly activity rates for Consultants and Leaders throughout the year.
        • This productivity created an ideal mix for revenue growth of 9.6% in 4Q23 and 51.4% in FY23, when compared to the previous year.
        • 2024 focus on encouraging the involvement of the next generation within our base of top leaders and increasing our conversion rate from the base of young Consultants to Leaders.
      • Enhanced Gross Margin. Significant 5.8-pps gross margin improvement during 4Q23, driven by a favorable exchange rate (2.9-pps), reduced costs achieved through supplier negotiations (1.7-pps), and a favorable variation in production volume and mix (1.2-pps). This also applies to the 1.9-pps enhancement for FY23.
        • Favorable product mix and exceptional performance from a strategic plan to boost sales of top and medium product sellers, supported by the Fragrance category, resulting in segmented pricing.
        • Anticipating a normalized gross margin in 2024, within the 80% to 82% range.
      • EBITDA and EBITDA margin at historic highs: Achieved a 7.8-pps margin improvement in 4Q23 due to increased net revenue, gross margin, and operational expense efficiencies resulting from the adjustments made in 2022, which were fully reflected in 2023 operating results. These improvements helped balance additional direct expense investments aimed at recovering the Consultants base, with expected short-term benefits aligned with Consultant base growth.
        • Improved cost absorption due to producing more units than initially projected.
        • Contributions from the above factors led to a 45.3% increase in 4Q23 EBITDA and a 50.7% year on year increase for the FY23 (which includes Jafra´s results since the acquisition in April 2022).
        • Anticipated 2024 benefits from 2023 adjustments for increased profitability, including closure of 55 customer service offices, to be offset by call center, chatbot in app, and personalized sales staff service.
      • Cash flow. Strong profitability led to a substantial Ps. 1,028M cash flow from operations, closing the period with a strong balance sheet.
        • Improved cash conversion cycle by extending payment terms to 120 days with most suppliers, from 30 days when acquired.
      • Skin-care category performing below expectations: Skin-care performance marginally surpassed 2022 results but fell short of expectations.
        • 2024 strategy to significantly improve category performance:
          • Introducing innovative products
          • Recalibrate offerings with affordable and competitive options
          • Top performing product brand extensions

      2024 Priorities

      • Revenue enhancement: Implement all strategies within 2024 commercial plan.
      • Expense improvement: identify further expense improvement opportunities.

      Jafra USA

      Key Operating and Financial Metrics


      4Q23

      4Q22

      2023

      2022

      Net Revenue

      $260,256

      $333,472

      (22.0 %)

      $927,947

      $966,085

      (3.9 %)

      Gross Margin

      74.4 %

      76.1 %

      (165 bps)

      75.7 %

      74.9 %

      +82 bps

      EBITDA

      $36,361

      $19,629

      +85.2 %

      $(638)

      $(18,997)

      +96.6 %

      EBITDA Margin

      14.0 %

      5.9 %

      +808 bps

      -0.1 %

      -2.0 %

      +190 bps

      *2022 Figures include Jafra´s operations since April 7th, 2022.


      4Q23

      4Q22

      2023

      2022

      Consultants







      Avg. Base

      31,268

      34,393

      (9.1 %)

      29,704

      35,171

      (15.5 %)

      EOP Base

      31,117

      34,131

      (8.8 %)

      31,117

      36,222

      (14.1 %)

      Monthly Activity Rate

      43.8 %

      46.8 %

      (300 bps)

      42.8 %

      50.6 %

      (780 bps)

      Avg. Monthly Order (USD)

      $231

      $245

      (5.8 %)

      $232

      $244

      (4.9 %)

      Leaders







      Avg. Base

      1,782

      2,183

      (18.4 %)

      1,886

      2,109

      (10.6 %)

      EOP Base

      1,793

      2,095

      (14.4 %)

      1,793

      2,095

      (14.4 %)

      Monthly Activity Rate

      90.2 %

      90.0 %

      +20 bps

      86.4 %

      91.6 %

      (520 bps)

      Avg. Monthly Order (USD)

      $215

      $236

      (8.7 %)

      $218

      $206

      +5.8 %

      Highlights

      • Stabilized Leaders' monthly activity rate: Leaders' monthly activity rate increased to 90.2% in 4Q23 from 81.1% in 1Q23, marking a nearly 9-pps increase; a positive trend throughout the year.
        • Success through leader-targeted promotion to boost team growth and development, resulting in a lower churn rate and enhanced activity levels beyond the annual average.
          • In 2024, continue to champion the above strategy to drive team expansion, and further strengthen Consultant recruitment.
      • Positive EOP Consultants' base: QoQ Consultant base growth recovery achieved.
        • Sustained sequential growth over the last three quarters, with an 8.2% increase from the end of 1Q23 to the end of 4Q23.
        • Reintroducing fundamental business practices to reconnect with the field in 2024, such as incentives in new Consultants initial months, as well as monthly sponsoring and sales rewards for all Consultants.
      • Strong EBITDA turn around. Achieved Ps. 36.4M in positive EBITDA for 4Q23, attributed to cost control, expense efficiencies, and high order fulfillment rate in December.
        • EBITDA margin reached 14.0%, an 11.8-pps increase from 2Q23, the other quarter in 2023 where a positive EBITDA was achieved.
        • 4Q23 performance led to near break-even for FY23, markedly better than FY22's negative EBITDA of Ps. 19.0M, primarily due to a 30% decrease in operating expenses, and due to not incurring in extraordinary expenses that amounted almost Ps. 19M in 2022.
        • 2024 will mark the resurgence of growth. Priorities are to re-engage with the field, transform the customer experience, provide an irresistible brochure & product portfolio, and simplify across the board.
      • YoY decrease in Consultants' base: Decreased consultant base performance across all operational metrics.
        • 14.1% end-of-period Consultant base decrease in 2023, year on year.
        • More than 5-pps monthly activity rate decrease.
        • 4.9% decrease in average monthly order.
        • Focus on sustainable growth of Consultant and Leader bases and on expanding U.S. household reach in 2024
      • Revenue: 2023 revenue decrease mainly due to commercial decisions we made at the beginning of the year. These included eliminating physical catalog in January and reducing key promotions.  After significant adverse impact in 1Q23, achieved a 22.3% growth recovery when compared 1Q23 to 4Q23.  
        • The Jafra Growth Acceleration Program includes a compensation plan revamp, ensuring Consultants receive significant compensation starting from their first order.
        • Key actions:
          • Shopify implementation - empowers Leaders with a centralized digital resource hub to remain connected to their business
          • Expedited digital content launch
          • Rebuild overall customer experience.

      2024 Priorities

      • Progress in 2023 lays the foundation improved EBITDA and cash flow generation.
      • To increase base of Consultants and Leaders and expand household presence within the U.S., we will pursue the following strategies:
      1. Enhance product appeal with strengthened portfolio and increased innovation.
      2. Transform consumer relationship management by enhancing sales force incentive and training programs, strengthen sales force trust and engagement.
      3. Further development of advanced technological solutions that enable Leaders and Consultants to effortlessly expand their businesses.
      4. Hispanic segment focus, leveraging digital transformation to expand our reach.

      Capital Allocation

      Directed cash flow primarily towards debt repayment during the year, successfully achieving targeted leverage ratio decrease to below 2.0x by the end of 2023, ending the year with a 1.8x Net Debt / EBITDA leverage ratio from 2.5x in December 2022.  Remain focused on further decreasing leverage ratio to approximately 1.5x by year end 2024.

      Additionally, we remain committed to returning value to our shareholders through quarterly dividends, particularly in light of the Group's strong 2023 performance.  The Group returned Ps. 650M in dividends during 2023; for a total dividend yield of 7.17% when considering a USD $12.29 average share price, and 6.32% based on a USD $13.94 share price as of December 31, 2023. The Group has therefore proposed a Ps. 250M dividend payment for the fourth quarter 2023, subject to approval at the Group's Ordinary General Shareholders' Meeting to be held on March 6th, 2024. We remain committed to returning value through dividends to our shareholders over the long term.

      2024 Outlook and Financial Guidance


      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%

      *Figures in millions Ps.

      We remain confident in the Company's long-term growth prospects in Mexico and the United States, with continued growth in the home solutions and beauty markets through the direct sales channel in Mexico.

      As we navigate the evolving business landscapes, our strategic focus includes stabilizing and strengthening our U.S. presence with continued growth within the dynamic Mexican market. This comprehensive approach positions the Group to capitalize on diverse opportunities, ensuring financial resilience in current changing environments.

      Betterware de México, S.A.P.I. de C.V.

      Consolidated Statements of Financial Position

      As of December 31, 2023, and 2022

      (In Thousands of Mexican Pesos)



      Dec 2023

      Dec 2022

      Assets



      Cash and cash equivalents

      549,730

      815,644

      Trade accounts receivable, net

      1,072,455

      971,063

      Accounts receivable from related parties

      104

      61

      Inventories

      2,030,533

      2,122,670

      Prepaid expenses

      79,115

      52,562

      Income tax recoverable

      29,462

      204,860

      Other assets

      230,688

      188,266

      Total current assets

      3,992,087

      4,355,126

      Property, plant and equipment, net

      2,910,353

      2,973,374

      Right of use assets, net

      358,704

      293,565

      Deferred income tax

      523,568

      319,157

      Investment in subsidiaries

      -

      1,236

      Intangible assets, net

      1,649,953

      1,743,882

      Goodwill

      1,599,718

      1,599,718

      Other assets

      53,757

      46,675

      Total non-current assets

      7,096,053

      6,977,607

      Total assets

      11,088,140

      11,332,733

      Liabilities and Stockholders' Equity



      Short term debt and borrowings

      508,731

      230,419

      Accounts payable to suppliers

      1,790,026

      1,371,778

      Accrued expenses

      306,997

      305,588

      Provisions

      804,748

      793,412

      Value added tax payable

      117,864

      89,142

      Trade accounts payable to related parties

      -

      96,859

      Statutory employee profit sharing

      132,855

      135,298

      Lease liability

      117,094

      85,399

      Derivative financial instruments

      47,920

      15,329

      Total current liabilities

      3,826,235

      3,123,224

      Employee benefits

      127,150

      153,907

      Deferred income tax

      783,169

      833,557

      Lease liability

      255,882

      206,509

      Long term debt and borrowings

      4,622,691

      5,918,256

      Total non-current liabilities

      5,788,892

      7,112,229

      Total Liabilities

      9,615,127

      10,235,453




      Stockholders' Equity

      1,474,646

      1,096,097

      Non-controlling interest

      (1,633)

      1,183

      Total Stockholders' Equity

      1,473,013

      1,097,280

      Total Liabilities and Stockholders' Equity   

      11,088,140

      11,332,733

      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 on December 31, 2023, and 2022

      (In Thousands of Mexican Pesos)



      Q4 2023

      Q4 2022

      ∆%

      Net revenue

      3,401,692

      3,232,460

      5.2 %

      Cost of sales

      1,021,872

      955,398

      7.0 %

      Gross profit

      2,379,820

      2,277,062

      4.7 %





      Administrative expenses

      601,510

      799,416

      (24.8 %)

      Selling expenses

      908,624

      910,236

      (0.2 %)

      Distribution expenses

      147,719

      89,332

      65.4 %

      Total expenses

      1,657,853

      1,798,984

      (7.8 %)





      Share of results of subsidiaries

      -

      (5,251)

      (100.0 %)





      Operating income

      721,967

      472,827

      52.7 %





      Interest expense

      (195,432)

      (197,869)

      (1.2 %)

      Interest income

      5,719

      5,906

      (3.2 %)

      Unrealized gain in valuation of financial derivative instruments

      (22,641)

      14,597

      (255.1 %)

      Foreign exchange loss, net

      (7,657)

      (32,817)

      (76.7 %)

      Financing cost, net

      (220,011)

      (210,183)

      4.7 %





      Income before income taxes

      501,956

      262,644

      91.1 %





      Income taxes

      95,545

      13,090

      629.9 %





      Net income including minority interest

      406,411

      249,554

      62.9 %

      Non-controlling interest (loss) gain

      (307)

      394

      (177.9 %)

      Net income

      406,104

      249,948

      62.5 %

      EBITDA breakdown (Ps. 819 million)

      Concept

      Q4 2023

      Q4 2022

      ∆%

      Net income including minority interest

      406,411

      249,554

      62.9 %

      (+) Income taxes

      95,545

      13,090

      629.9 %

      (+) Financing cost, net

      220,011

      210,183

      4.7 %

      (+) Depreciation and amortization

      97,517

      126,515

      (22.9 %)

      EBITDA

      819,484

      599,342

      36.7 %

      EBITDA margin

      24.1 %

      18.5 %

      5.5 %

      Betterware de México, S.A.P.I. de C.V.

      Consolidated Statements of Profit or Loss and Other Comprehensive Income

      For the twelve-months ended on December 31, 2023, and 2022

      (In Thousands of Mexican Pesos)



      Dec 2023

      Dec 2022

      ∆%

      Net revenue

      13,009,507

      11,507,549

      13.1 %

      Cost of sales

      3,701,255

      3,579,093

      3.4 %

      Gross profit

      9,308,252

      7,928,456

      17.4 %





      Administrative expenses

      2,908,945

      2,596,642

      12.0 %

      Selling expenses

      3,460,367

      2,808,030

      23.2 %

      Distribution expenses

      593,174

      473,516

      25.3 %

      Total expenses

      6,962,486

      5,878,188

      18.4 %





      Share of results of subsidiaries

      -

      (21,862)

      (100.0 %)





      Operating income

      2,345,766

      2,028,406

      15.6 %





      Interest expense

      (820,262)

      (543,321)

      51.0 %

      Interest income

      45,056

      28,689

      57.0 %

      Unrealized loss in valuation of financial derivative instruments

      (32,591)

      (43,522)

      (25.1 %)

      Foreign exchange loss, net

      (106,847)

      (83,368)

      28.2 %

      Financing cost, net

      (914,644)

      (641,522)

      42.6 %





      Income before income taxes

      1,431,122

      1,386,884

      3.2 %





      Income taxes

      384,384

      516,920

      (25.6 %)





      Net income including minority interest

      1,046,738

      869,964

      20.3 %

      Non-controlling interest gain

      2,723

      2,593

      5.0 %

      Net income

      1,049,461

      872,557

      20.3 %

      EBITDA breakdown (Ps. 2,721 million)

      Concept

      Dec 2023

      Dec 2022

      ∆%

      Net income including minority interest

      1,046,738

      869,964

      20.3 %

      (+) Income taxes

      384,384

      516,920

      (25.6 %)

      (+) Financing cost, net

      914,644

      641,522

      42.6 %

      (+) Depreciation and amortization

      375,134

      287,702

      30.4 %

      EBITDA

      2,720,900

      2,316,108

      17.5 %

      EBITDA margin

      20.9 %

      20.1 %

      0.8 %

      Betterware de México, S.A.P.I. de C.V.

      Consolidated Statements of Cash Flows

      For the twelve-months ended on December 31, 2023, and 2022

      (In Thousands of Mexican Pesos)



      Dec 2023

      Dec 2022

      Cash flows from operating activities:



      Profit for the period

      1,046,738

      869,964

      Adjustments for:



      Income tax expense recognized in profit of the year

      384,384

      516,920

      Depreciation and amortization of non-current assets

      375,134

      287,702

      Interest income recognized in profit or loss

      (45,056)

      (28,689)

      Interest expense recognized in profit or loss

      820,262

      543,321

      Gain of property, plant, equipment sale

      (1,460)

      4,758

      Unrealized loss in valuation of financial derivative instruments

      32,591

      43,522

      Share-based payment expense

      (3,699)

      5,991

      Currency translation effect

      (4,349)

      (8,653)

      Movements in not- controlling interest

      (93)

      10,983

      Others

      1,236

      -

      Movements in working capital:



      Trade accounts receivable

      (101,393)

      266,640

      Trade accounts receivable from related parties

      (43)

      30,246

      Inventory, net

      92,136

      171,260

      Prepaid expenses and other assets

      (86,062)

      (48,383)

      Accounts payable to suppliers and accrued expenses

      423,104

      (940,039)

      Provisions

      11,476

      (24,640)

      Value added tax payable

      28,722

      110,231

      Statutory employee profit sharing

      (2,443)

      22,798

      Trade accounts payable to related parties

      (96,859)

      97,029

      Income taxes paid

      (474,941)

      (542,527)

      Employee benefits

      (32,606)

      21,268

          Net cash generated by operating activities

      2,366,779

      1,409,702

      Cash flows from investing activities:



      Payment of business acquisition net of cash acquired

      -

      (4,698,463)

      Other investment in subsidiaries

      -

      (1,886)

      Payments for property, plant and equipment, net

      (131,066)

      (175,653)

      Proceeds from disposal of property, plant and equipment, net

      20,682

      22,091

      Interest received

      45,056

      28,689

          Net cash used in investing activities

      (65,328)

      (4,825,222)

      Cash flows from financing activities:



      Repayment of borrowings

      (7,633,715)

      (1,120,025)

      Proceeds from borrowings

      6,498,994

      5,818,705

      Interest paid

      (652,313)

      (502,847)

      Costs of emission

      (8,355)

      (88,722)

      Lease payment

      (123,241)

      (76,214)

      Share repurchases

      -

      (25,321)

      Dividends paid

      (648,735)

      (949,610)

          Net cash (used in) generated by financing activities

      (2,567,365)

      3,055,966

          Net decrease in cash and cash equivalents

      (265,914)

      (359,554)

      Cash and cash equivalents at the beginning of the period

      815,644

      1,175,198

      Cash and cash equivalents at the end of the period

      549,730

      815,644

      Key Operating Metrics

      Betterware


      1Q23

      2Q23

      3Q23

      4Q23

      2023

      2022

      Associates







      Avg. Base

      752,577

      753,743

      768,042

      756,250

      757,653

      897,989

      EOP Base

      764,024

      756,637

      759,310

      741,170

      741,170

      778,845

      Monthly Activity Rate

      68.1 %

      66.7 %

      65.2 %

      66.0 %

      66.5 %

      67.7 %

      Avg. Monthly Order

      $1,767

      $1,877

      $1,823

      $1,959

      $1,856

      $1,733

      Monthly Growth Rate

      15.0 %

      15.2 %

      15.7 %

      14.9 %

      15.2 %

      12.6 %

      Monthly Churn Rate

      15.6 %

      15.5 %

      15.6 %

      15.7 %

      15.6 %

      15.2 %

      Distributors







      Avg. Base

      39,028

      40,825

      42,551

      42,369

      41,193

      44,084

      EOP Base

      39,991

      41,981

      41,932

      41,825

      41,825

      39,413

      Monthly Activity Rate

      98.5 %

      98.1 %

      97.9 %

      98.1 %

      98.2 %

      98.3 %

      Avg. Monthly Order

      $23,562

      $23,440

      $21,944

      $23,518

      $23,104

      $24,281

      Monthly Growth Rate

      9.1 %

      10.7 %

      10.4 %

      10.0 %

      10.1 %

      6.5 %

      Monthly Churn Rate

      8.6 %

      9.1 %

      10.4 %

      10.1 %

      9.6 %

      8.7 %

      Jafra Mexico


      1Q23

      2Q23

      3Q23

      4Q23

      2023

      2022

      Consultants







      Avg. Base

      448,982

      427,289

      414,968

      461,712

      438,238

      389,680

      EOP Base

      427,280

      424,435

      422,956

      467,736

      467,736

      455,969

      Monthly Activity Rate

      51.7 %

      51.2 %

      52.2 %

      52.9 %

      52.0 %

      53.60 %

      Avg. Monthly Order

      $2,063

      $2,091

      $2,088

      $2,181

      $2,107

      $1,989

      Monthly Growth Rate

      9.2 %

      8.9 %

      10.5 %

      11.5 %

      10.1 %

      11.50 %

      Monthly Churn Rate

      11.3 %

      9.1 %

      10.6 %

      8.3 %

      9.8 %

      20.10 %

      Leaders







      Avg. Base

      19,030

      18,978

      18,553

      18,576

      18,753

      20,107

      EOP Base

      18,952

      18,875

      18,555

      18,719

      18,719

      19,290

      Monthly Activity Rate

      94.3 %

      93.9 %

      94.0 %

      95.0 %

      94.3 %

      92.30 %

      Avg. Monthly Order

      $2,259

      $2,463

      $2,236

      $2,624

      $2,396

      $2,310

      Monthly Growth Rate

      1.0 %

      1.0 %

      1.1 %

      1.4 %

      1.1 %

      0.80 %

      Monthly Churn Rate

      1.6 %

      1.4 %

      1.4 %

      1.1 %

      1.4 %

      1.50 %

      Jafra USA


      1Q23

      2Q23

      3Q23

      4Q23

      2023

      2022

      Consultants







      Avg. Base

      29,399

      28,541

      29,608

      31,268

      29,704

      35,171

      EOP Base

      28,749

      29,921

      30,489

      31,117

      31,117

      36,222

      Monthly Activity Rate

      37.7 %

      44.4 %

      45.1 %

      43.8 %

      42.8 %

      50.60 %

      Avg. Monthly Order (USD)

      $232

      $236

      $229

      $231

      $232

      $244

      Monthly Growth Rate

      9.7 %

      12.9 %

      14.5 %

      12.5 %

      12.4 %

      11.00 %

      Monthly Churn Rate

      15.0 %

      11.5 %

      13.8 %

      11.5 %

      13.0 %

      10.80 %

      Leaders







      Avg. Base

      2,080

      2,041

      1,642

      1,782

      1,886

      2,109

      EOP Base

      2,099

      1,760

      1,645

      1,793

      1,793

      2,095

      Monthly Activity Rate

      81.1 %

      83.8 %

      90.4 %

      90.2 %

      86.4 %

      91.60 %

      Avg. Monthly Order (USD)

      $219

      $220

      $217

      $215

      $218

      $206

      Monthly Growth Rate

      1.9 %

      2.6 %

      6.3 %

      7.9 %

      4.7 %

      4.40 %

      Monthly Churn Rate

      1.8 %

      7.6 %

      8.4 %

      5.0 %

      5.7 %

      4.80 %

      Disclosure
      We hereby disclose certain figures pertaining to the net revenues generated by our Jafra Mexico entity in select quarters of 2022 and 2023. These figures should be regarded as understated yet inaccurate due to timing issues in sales recognition, specifically related to the fulfillment of orders placed by our sales force, and in accordance with IFRS 15 we should have not recognized them until delivered.

      Annual net revenues were presented fairly in all material respects as of December 31st, 2022, and 2023, and for the years then ended. Cut-off adjustments represent a decrease in net revenues and EBITDA in some quarters as follows (Consolidated figures):




      Same figures





      6/30/2022

        9/30/2022

      12/31/2022

        3/31/2023

        6/30/2023

        9/30/2023

      Net Revenues

      3,071,360

      3,115,894

      3,232,460

      3,074,500

      3,223,935

      3,049,230

      Cost of sales

      941,688

      968,678

      955,398

      839,161

      862,241

      912,001

      Gross Margin

      2,129,672

      2,147,216

      2,277,062

      2,235,339

      2,361,695

      2,137,229

      SG&A expenses  

      1,644,064

      1,714,400

      1,677,720

      1,749,584

      1,737,655

      1,689,972

      EBITDA

      485,608

      432,816

      599,342

      485,755

      624,040

      447,257

      This is due to timely issues because a higher portion of Jafra's monthly sales is made in the last week of the month, and orders to consultants take a few days to deliver. Annual cut off for the year ended December 31st, 2023, represented just Ps. 15M, which is not significant and is properly presented.

      A mere 0.2% of the value of orders placed at the end of each quarter does not materialize as sales, due to damages incurred by the products during their delivery process or returns made by our consultants for receiving a product different from what they ordered.

      The Company, since the close of 2023, has initiated a strategy to minimize cutoff adjustments each quarter, aligning commercial efforts to advance orders to the third week of the month and adjusting the logistics of shipments and deliveries to ensure that the majority of these are completed before the end of the period.

      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.
      Betterware believes that these non-IFRS financial measures are useful to investors because (i) Betterware 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 Betterware's EBITDA and provide more tools for their analysis as it makes Betterware's results comparable to industry peers that also prepare these measures.

      Definitions: Operating Metrics

      • Betterware de México (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 (Consultants and Leaders)

      Avg. Base: Monthly average Consultant/Leader base
      EOP Base: Consultant/Leader base at the end of the period
      Monthly Churn Rate (Consultants): Average monthly data. Total Consultants lost during the period divided by the number of active Consultants 4 months prior. A Consultant is terminated only after 4 months of inactivity.
      Monthly Churn Rate (Leaders): Average monthly data. Total Leaders lost during the period divided by end of period Leader's base.
      Monthly Activity Rate: Average monthly data. Active Consultants/Leaders divided by the end of period Consultant/Leaders base.
      Avg. Monthly Order (Consultants): Average monthly data. Total Catalogue Revenue divided by number of consultant orders.
      Avg. Monthly Order (Leaders): Average monthly data. Total Leaders Revenue divided by number of leaders 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 creating innovative products that solve specific needs regarding organization, practicality, space saving and hygiene within the household. Betterware's wide product portfolio includes home organization, kitchen, commuting, laundry and cleaning, as well as other categories that include products and solutions for every corner of the household.

      The Company has a differentiated two-tier network of distributors and associates that sell their products through twelve catalogs per year. All products are designed by the Company and under the Betterware brand name through its different sources of product innovation. The Company's state-of-the-art infrastructure allows it to safely and timely deliver its products to every part of the country, backed by the strategic location of its national distribution center. Today, the Company distributes its products in Mexico and Guatemala, and has plans of additional international expansion.

      Supported by its asset light business model and its three strategic pillars of Product Innovation, Business Intelligence and Technology, Betterware has been able to achieve sustainable double-digit growth rates by successfully expanding its household penetration and share of wallet.

      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.

      4Q2023 & FY2023 Conference Call 
      Management will hold a conference call with investors on February 23, 2024, at 8:00 am Central Standard Time (CST)/ 9:00am 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: 13744249

      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: 13744249
      Contacts.

      SOURCE Betterware de México, S.A.P.I. de C.V.

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