Company Positioned for Sales and Profit Growth
in 2023
GUADALAJARA, Mexico, Oct. 27,
2022 /PRNewswire/ -- Betterware de Mexico S.A.P.I.
de C.V. (NASDAQ: BWMX), ("Betterware" or the "Company"), announced
today its consolidated financial results for the third quarter
fiscal year 2022. 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 October 28, 2022, to discuss its results for the
third quarter of 2022.
![(PRNewsfoto/Betterware de México, S.A.B. de C.V.) (PRNewsfoto/Betterware de México, S.A.B. de C.V.)](https://mma.prnewswire.com/media/1317803/Betterware_Logo.jpg)
Luis G. Campos, Executive
Chairman of the Board, stated, "The third quarter saw
significant progress toward our strategy, and we believe we are in
position to resume revenue and profit growth. Operationally,
the quarter saw stabilization in Betterware's sales force levels; a
better-than-expected performance from JAFRA, our newly acquired
business, and compelling innovation in our products and
categories. Financially, we began activities that have us on
track to improve cash flow and increase ongoing profitability
through acquisition synergies, permanent cost reductions and
improved inventory management. Structurally, the Jafra
acquisition provides compelling product portfolio complementarity
to the whole Group, contributing to our financial strength in
changing business environments.
While the macro-economic environment remains challenging, we are
confident that the actions we have taken will make our Company even
stronger as we maximize the power of our disruptive business and
leverage the combined operations of Betterware and JAFRA group,
which accelerates our geographic expansion into the US and extends
our categories served to include the Beauty industry.
We expect the implementation of our strategy to deliver
sustained long-term profitable growth and increased value for our
shareholders."
Growth Resumption in Q4 and Beyond
- Betterware is positioned to resume top line growth and
recover profitability in 2023 driven by the stabilization of its
salesforce and business restructuring
- JAFRA delivered better-than-expected sales growth, gross
margin expansion and cash flow generation with synergies on track
to produce high single to low double-digit sales growth beginning
in fiscal 2023
- Betterware/JAFRA Group continues to possess strong balance
sheet and cash flow
Group's Third Quarter Summary
Betterware: set to resume growth in 2023.
A softer-than-expected economic environment, marked by weak
consumer spending, post-covid demand normalization, and high
inflation rates in Mexico,
negatively impacted spending on discretionary products in the
quarter. This resulted in Q3 2022 net revenue of Ps.
1,489.6 M, or Ps. 871.9 M below Q3 2021, a decrease of 37%.
Gross margin declined 240 bps to 54% in Q3 2022 from 56% in Q3
2021, mainly due to 150 bps of negative impact from promotional
activities aimed at reducing excess inventories, and 147 bps of
negative impact from exchange rate devaluation, partially offset by
efficient cost management. EBITDA of Ps. 266.8 M was Ps. 441.7
M below Q3 2021, a decrease of 62%, and margin
declined 1,209 bps to 18% from 30% in Q3 2021, mainly driven by the
lower gross margin, 275 bps impact from extraordinary expenses of
Ps. 41 M related to the
organizational and expense restructuring process, and the
lower operating leverage relative to the prior year period as a
result of the decline in net revenues, with SG&A as a percent
of net revenues of 36% for Q3 2022, compared to 26% in Q3 2021.
The stabilization trend that started in Q2 continued into Q3
with our sales network average of 870 thousand associates and 43
thousand distributors from mid-May to date. This and the resumption
of productivity initiatives including live sales meetings, expanded
categories and offerings has us poised to deliver net revenue
growth and thereby increased operating leverage in 2023. The
completion of our organizational and expense restructuring process
will contribute to profitability with annual savings of
approximately Ps. 300 M in 2023. This
will allow us to achieve full year 2022 EBITDA in the range of Ps.
1,400 and 1,600 M with a margin of
22-25%, before resuming growth and increased profitability in
2023.
Betterware continues to achieve significant growth ahead of
2019, pre-pandemic. As of Q3 2022, net revenue has increased
116% vs. Q3 2019; EBITDA has grown 107% vs. Q3 2019; and
the average number of distributors has grown 134% versus 2019,
and associates have increased 148% with respect to 2019.
With a strong sales force, we expect our powerful innovation
pipeline to continue to lead the way for top-line growth and
increased profitability in 2023. The launch of our differentiated
cleaning products line and new product categories such as Baby
& Kids, and Wellness, an increased range of products within the
Hydration, Home Improvement & Table Top territories, and the
re-design of our physical and digital catalog will be part of our
focus for 2023.
The home solutions market's pre-pandemic secular trends remain
valid and stronger than ever, and hence we expect to regain growth
and profitability by 2023 once inflation recedes and consumer
confidence improves.
JAFRA: an accretive acquisition delivering results ahead of
expectations.
JAFRA Mexico.
JAFRA Mexico's Q3 results reflect a strong performance ahead of
our plan as net revenue for the quarter reached Ps. 1,333.0 M, that is Ps. 132.0 M above Q3 2021, an increase of 11%,
marking the return to growth since 2017 and following a decline of
7% in sales between 2019 to 2021. Resumption of live and in situ
sales meetings with leaders and consultants, a revamped incentives
program, the release of the renewed product catalog and the
execution of promotional campaigns to increase and strengthen our
sales force have been key to achieve this outcome.
Particularly in September, JAFRA Mexico's net revenue rose even
faster with year-over-year growth of 22%, driven by an increase in
JAFRA consultants with 51 thousand added in the month of September
alone as a result of targeted recruiting promotions, noting that
such a high incorporation last occurred in May 2021. Also key to the September's performance
were the accelerated launch of new products within our Skin Care
and Fragrances portfolio stemming from our improved time-to-market
of products from 18 months to 8 months and achieved since Q2, along
with double digit growth in our Fragrances portfolio vs. Q3
2021.
Profitability is also a positive story. JAFRA Mexico
EBITDA surpassed our expectations, reaching Ps. 272.4 M, an increase of Ps. 218.5 M vs. Q3 2021, or 405%, and a 20% margin
vs. 4% in Q3 2021. It should be noted that EBITDA for Q3 2022
was favorably impacted by the cumulative effect of prior quarters'
expense reduction opportunities that were identified and included
in Q3 results, for an amount of Ps. 62
M. After adjusting for the latter, EBITDA for Q3 2022 is Ps.
210.4 M, and represents an increase
of Ps. 115.5 M versus 2021 comparable
adjusted EBITDA of Ps. 94.9 M, or
122%, and a margin of 16% vs. 3Q 2021adjusted margin of 8%.
Going forward, net revenue growth and profitability is expected
to continue reflecting our actions to accelerate sales force
additions, increase efficiencies and maintain tight expense
control. We also expect Jafra to benefit from the positive
trend in the beauty and personal care market, which continues
recovering to pre-pandemic levels. Overall, we expect to deliver
net revenue growth of 10% in Q4 2022 vs. Q3 2022 and achieve
approximately 2% growth for the full 2022 Year versus prior Year,
with full year EBITDA 2022 in a range of Ps. 750 and 850 M and a margin of 15-17%. JAFRA Mexico's
EBITDA exhibits an upward trend from Q1 to Q3, as it reached Pls.
123.9 M in Q1, and Ps. 214.5 M, excluding Ps. 62
M of non-recurring items. For Q4 2022, we expect EBITDA to
be in the Ps. 150 – 250 M range.
Additionally, our plan to improve credit terms with suppliers
through factoring, increase manufacturing efficiency, and sell
unproductive assets is expected to contribute to profitability and
cashflow generation. In 2023, improved credit terms will increase
cashflow by Ps. 230M and efficiency
opportunities in manufacturing will deliver Ps. 170M in annual cost savings. The sale of JAFRA´s
Headquarters in Mexico City, set
to conclude in 2023, is expected to generate estimated proceeds of
around Ps. 500-700M, to be used to
prepay debt. Furthermore, synergies of around Ps. 200 and
300M will materialize in 2023.
JAFRA USA.
As for JAFRA USA, its relevance to the entire Group is still
quite low, accounting for around 7% of net revenues, and its
performance is far from its full potential. Net revenue for the
quarter reached Ps. 335.2 M, Ps.
60.0 M below Q3 2021 or 15%, and an
EBITDA of Ps. (35.7) M, Ps.
85.6 M below Q3 2021.
In the short term, JAFRA USA's management team remains focused
on mirroring JAFRA Mexico's business model to improve its
fundamentals, transferring successful strategies and improving
significant inefficiencies that existed prior to the Betterware
acquisition, made in late 2021 that negatively impacted sales force
growth, retention and consequently, net revenues. Corrective
actions began shortly after the acquisition and have already proven
successful as the sales force totaled 32.9 thousand consultants in
July 2022 and has increased to 35.2
thousand in September.
While JAFRA USA's Q4 results are
expected to reflect the pre-acquisition issues it faced, we believe
the corrective measures we are taking will lead to improvements
over time and deliver net revenue growth and improved profitability
by Q3 of 2023.
We will accelerate the entire JAFRA business growth to high
single digits or low double digits in 2023 and continue to improve
its profitability and cash flow generation.
Group Betterware / JAFRA: consolidating growth, profitability
and cash flow generation
The JAFRA acquisition has proven to be accretive to
shareholders. Its Q3 better-than-expected results represent
progress toward our goal of resuming revenue and earnings growth.
We are on track to realize acquisition synergies; we have executed
initiatives to achieve continuous cost reductions and efficiency
improvements. Mirroring Betterware's successful business model at
JAFRA will continue solidifying its position as a leading consumer
products company.
Further to the above, JAFRA acquisition represents a highly
strategic asset, as it brings valuable portfolio complementarity to
the Group in terms of seasonality, consumer's needs, and repurchase
frequency. JAFRA's portfolio of consumable beauty and personal care
goods involves frequent repurchases, in contrast with Betterware's
leading home solution's portfolio, which is more durable and
seasonally driven in nature. Both businesses serve similar consumer
profiles, but solve different needs based on a deep understanding
and commitment to them. In this way, JAFRA and Betterware
independent but complementary product portfolios become valuable
assets that contribute to the Group's resilient growth, financial
stability, and improved performance in changing market
conditions.
JAFRA´s and Betterware´s management teams will remain focused on
their respective business, and continue operating as independent
companies, supported by the corporate structure which will be
overseeing both companies.
Betterware is on track to begin operations in the U.S. in late
2023, and we continue to make progress in our assessment of that
market and are building the right team to lead the expansion. We
are aiming for further international expansion in South America, specifically Colombia and Peru between 2025 and 2026. JAFRA will
enter Guatemala in 2023, and
Colombia and Peru will follow in the coming years to
consolidate the Group's expansion.
In the immediate term, Group's focus is on stabilizing and
resuming growth at Betterware, and, for JAFRA, consolidating its
strong results. Furthermore, the work we have done to reduce
elevated inventory and increase the Group's profitability is
expected to fuel cashflow generation from operations. Cash
flow generation will be further buoyed by acquisition synergies and
the divestment of unproductive assets and used to fund debt
paydown. The Betterware/JAFRA Group will establish itself as a
benchmark of constant growth, profitability, and cash flow
generation, laying the foundation for long-term sustained
shareholder value.
Q3 2022 Operating Metrics and Consolidated Results
|
Consolidated
Results
|
Figures in M
Pesos
|
Net
Revenue
|
Gross
Margin
|
EBITDA
|
%EBITDA
|
Betterware
|
1,489.6
|
54 %
|
266.8
|
18 %
|
JAFRA Mexico
|
1,333.0
|
83 %
|
272.4
|
20 %
|
JAFRA USA
|
335.2
|
74 %
|
(35.7)
|
(11 %)
|
Total
|
3,157.8
|
68 %
|
503.5
|
16 %
|
Variation Vs. Q3
2021
|
+34 %
|
+1,209bps
|
(29 %)
|
(1,405bps)
|
Increase in Net Revenues: increased 34% to Ps.
3,157.8 M from Ps. 2,361.5M.
Increase in Gross Margin: expanded 1,209 bps to 68% in Q3
2022 from 56% in Q3 2021.
Decrease in EBITDA: decreased 29% Year-on-Year to
Ps. 503.5 M vs. Ps. 708.4M in Q3 2021.
Decrease in Net Income: decreased Year-on-Year to Ps.
6.5 M, compared to Ps. 513.4 M in 3Q 2021.
Net Revenues: increased mainly due to the inclusion of
JAFRA´s net revenues.
Gross Margin: reflects the incorporation of JAFRA´s
operations to our business which entails a higher gross margin
profile, partially offset by Betterware´s gross margin contraction
mainly driven by promotional activities equivalent to 150 bps of
net revenue aimed at reducing excess inventories, 147 bps of
negative impact from exchange rate devaluation, partially
compensated by efficient cost management, optimization actions and
price increases implemented in Q1.
EBITDA: Betterware contributed Ps. 266.8 M to consolidated EBITDA, JAFRA Mexico Ps.
272.4 M and JAFRA USA Ps.
(35.7) M.
Consolidated EBITDA margin contracted 1,405bps to 16% in Q3 2022
compared to 30% in Q3 2021, reflecting the incorporation of JAFRA
into the results, which historically has had a lower EBITDA margin
than Betterware, as well as extraordinary expenses for Ps.
50.7M related to organizational
restructuring, accounts receivable write-off and loss on sale of
equipment.
Net Income: mainly due to lower EBITDA and higher
interest expense related to the acquisition of JAFRA.
Cumulative Q3 2022 Operating Metrics and Consolidated
Results
|
Consolidated
Results
|
Figures in M
Pesos
|
Net
Revenue
|
Gross
Margin
|
EBITDA
|
%EBITDA
|
Betterware
|
4,961.5
|
59 %
|
1,197.8
|
24 %
|
JAFRA
Mexico*
|
2,675.8
|
83 %
|
487.4
|
18 %
|
JAFRA USA*
|
632.6
|
74 %
|
(38.6)
|
(6 %)
|
Total
|
8,269.9
|
68 %
|
1,646.7
|
20 %
|
Variation Vs. Q3
2021
|
+5 %
|
+1,067bps
|
(31 %)
|
(1,035bps)
|
*JAFRA Mexico and JAFRA
USA cumulative figures include operations since April
7th, 2022, following the acquisition by
Betterware.
|
JAFRA Mexico and JAFRA
USA Non-IFRS net revenue and adjusted EBITDA from January 1st to
April 6th were Ps. 1,686.8M and Ps. 158.4M,
respectively.
|
Increase in Net Revenues: increased 5% to Ps.
8,269.9 M from Ps. 7,857.6 M in Q3 2021.
Increase in Gross Margin: expanded 1,067bps to 68% from
57% in the same period of 2021.
Decrease in EBITDA: decreased 31% Year-on-Year to Ps.
1,646.7 M, compared to Ps.
2,378.1 M in the same period of
2021.
Decrease in Net Income: decreased Year-on-Year to Ps.
525.8 M, compared to Ps. 1,612.8 M in the same period of 2021.
Net Revenues: lower net revenue resulted mainly from
return to normality effects and high inflation rates.
Gross Margin: expansion mostly explained by the inclusion
of JAFRA´s operations to the business, reflecting its higher gross
margin profile, and cost efficiencies achieved by both
companies.
EBITDA: Betterware represented approximately 73% of
consolidated EBITDA for the period, JAFRA Mexico 29% and JAFRA USA
(2%). Consolidated EBITDA margin contracted 1,035bps to 20%
compared to 30% in 2021, reflecting JAFRAs inclusion to the results
and Betterware's margin contraction due to lower operating
leverage, as well as extraordinary expenses for Ps. 73.5 M related to organizational restructuring,
accounts receivable write-off and loss on sale of equipment.
Net Income: mainly due to lower EBITDA and higher
interest expense related to the acquisition of JAFRA.
Balance Sheet
The mainly debt funded acquisition of JAFRA, which resulted in a
cash outflow of Ps. 574 M from
Betterware's balance sheet, is reflected in our leverage ratio of
2.5x Net Debt to EBITDA in Q3 2022. The Group expects to
increase cash flow generation in Q4 and 2023 as it realizes the
savings associated with its restructuring program, synergies from
the acquisition of JAFRA and drives growth through its strategic
initiatives.
As of Q3 2022, Betterware's Balance Sheet includes approximately
Ps. 300M in additional inventory
proactively acquired at the beginning of the year in response to
supply chain disruptions and to a lesser extent certain inventory
that reflects lower-than-expected sales. We have adjusted our
sourcing plans, which is expected to allow inventory to gradually
align with expected sales growth, which will improve our cash
conversion cycle, without impacting our gross margins.
Growth Expectations for 2022
In 2022 we expect our consolidated net revenues to be in the
range of Ps. 13,000 M and Ps.
13,300 M, and our consolidated EBITDA
to be in the range of Ps. 2,100 and Ps. 2,300 M.
Dividend
Based on the prevailing macroeconomic outlook of persistently
low growth, high inflation, and rising interest rates for the
coming months, and as part of our immediate focus on stabilizing
Betterware and achieving JAFRA's maximum potential, our Board of
Directors has proposed to discuss in 2023 the long-term sustainable
dividend policy that the Group will follow, as we move forward with
the ongoing initiatives.
Share Repurchase Program
During the third quarter, we paused the execution of our share
repurchase program. We will analyze the appropriate execution of
the repurchase program, since the management efforts are focused on
improving JAFRA's profitability and margins in the short-term and
increasing generation of cash flow.
Betterware de México, S.A.P.I.
de C.V. Consolidated Statements of Financial
Position As of September 30, 2022, and 2021 (In
Thousands of Mexican Pesos)
|
|
|
September
2022
|
September
2021
|
Assets
|
|
|
Cash and cash
equivalents
|
471,585
|
1,273,481
|
Trade accounts
receivable, net
|
1,251,993
|
878,961
|
Accounts receivable
from related parties
|
229
|
95,965
|
Inventories
|
2,417,522
|
1,207,080
|
Prepaid
expenses
|
143,211
|
207,951
|
Derivative financial
instruments
|
-
|
58,001
|
Other assets
|
552,151
|
51,733
|
Total current
assets
|
4,836,691
|
3,773,172
|
Property, plant and
equipment, net
|
1,815,290
|
1,053,631
|
Right of use assets,
net
|
137,187
|
19,100
|
Deferred income
tax
|
302,651
|
17,605
|
Investment in
subsidiaries
|
1,237
|
26,310
|
Intangible assets,
net
|
618,970
|
334,782
|
Goodwill
|
3,158,464
|
371,075
|
Other assets
|
116,875
|
3,292
|
Total non-current
assets
|
6,150,674
|
1,825,795
|
Total
assets
|
10,987,365
|
5,598,967
|
Liabilities and
Stockholders' Equity
|
|
|
Short term debt and
borrowings
|
642,647
|
-
|
Accounts payable to
suppliers
|
1,362,098
|
2,045,266
|
Accrued
expenses
|
389,190
|
188,288
|
Provisions
|
805,636
|
-
|
Income tax
payable
|
159,425
|
202,883
|
Value added tax
payable
|
77,272
|
42,687
|
Trade accounts payable
to related parties
|
120,370
|
27,302
|
Statutory employee
profit sharing
|
103,235
|
19,567
|
Lease
liability
|
103,274
|
6,129
|
Derivative financial
instruments
|
29,926
|
-
|
Total current
liabilities
|
3,793,073
|
2,532,122
|
Employee
benefits
|
227,923
|
1,938
|
Deferred income
tax
|
98,304
|
56,959
|
Lease
liability
|
33,190
|
13,336
|
Long term debt and
borrowings
|
5,910,384
|
1,507,080
|
Total non-current
liabilities
|
6,269,801
|
1,579,313
|
Total
Liabilities
|
10,062,874
|
4,111,435
|
Stockholders'
Equity
|
923,743
|
1,487,532
|
Non-controlling
interest
|
748
|
-
|
Total Stockholders'
Equity
|
924,491
|
1,487,532
|
Total Liabilities
and Stockholders' Equity
|
10,987,365
|
5,598,967
|
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 September 30, 2022, and 2021 (In
Thousands of Mexican Pesos)
|
|
|
Q3
2022
|
Q3
2021
|
Δ%
|
Net Revenue
|
3,157,842
|
2,361,461
|
36.4 %
|
Cost of
sales
|
999,584
|
1,032,998
|
2.9 %
|
Gross
profit
|
2,158,258
|
1,328,463
|
62.5 %
|
Administrative
expenses
|
730,710
|
285,444
|
160.6 %
|
Selling
expenses
|
862,474
|
254,425
|
233.8 %
|
Distribution
expenses
|
157,968
|
101,323
|
55.9 %
|
Total
expenses
|
1,751,152
|
641,192
|
173.1 %
|
Share of results of
subsidiaries
|
-
|
(882)
|
(100 %)
|
Operating
income
|
407,106
|
686,389
|
(40.8 %)
|
Interest
expense
|
(184,873)
|
(18,004)
|
926.8 %
|
Interest
Income
|
7,070
|
8,041
|
(12.1 %)
|
Unrealized gain in
valuation of financial derivative instruments
|
12,978
|
192,880
|
(93.3 %)
|
Foreign exchange loss,
net
|
(25,503)
|
(125,385)
|
(79.7 %)
|
Financing cost,
net
|
(190,328)
|
57,532
|
(430.8 %)
|
Income before income
taxes
|
216,778
|
743,921
|
(70.9 %)
|
Income taxes
|
210,680
|
230,564
|
(8.6 %)
|
Net income including
minority interest
|
6,098
|
513,357
|
(98.8 %)
|
Non-controlling
interest loss
|
414
|
-
|
100.0 %
|
Net
income
|
6,512
|
513,357
|
(98.7 %)
|
EBITDA breakdown
(Ps. 503.5 million)
|
Concept
|
Q3
2022
|
Q3
2021
|
Δ%
|
Net income including
minority interest
|
6,098
|
513,357
|
(98.8 %)
|
(+) Income
taxes
|
210,680
|
230,564
|
(8.6 %)
|
(+) Financing cost,
net
|
190,328
|
(57,532)
|
(430.8 %)
|
(+) Depreciation and
amortization
|
96,434
|
22,057
|
337.2 %
|
EBITDA
|
503,540
|
708,446
|
(28.9 %)
|
EBITDA
margin
|
15.9 %
|
30.0 %
|
(14.4 %)
|
EBITDA
|
503,540
|
Extraordinary
Items:
|
|
Organizational
restructuring
|
16,952
|
Accounts Receivable
Write-off
|
31,355
|
Loss on sale of
equipment
|
2,380
|
Adjusted
EBITDA
|
554,227
|
Adjusted EBITDA
margin
|
17.6 %
|
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 on September 30, 2022, and 2021 (In
Thousands of Mexican Pesos)
|
|
|
Sep
2022
|
Sep
2021
|
Δ%
|
Net revenue
|
8,269,897
|
7,857,599
|
6.1 %
|
Cost of
sales
|
2,683,549
|
3,388,349
|
(18.9 %)
|
Gross
profit
|
5,586,348
|
4,469,250
|
25.0 %
|
Administrative
expenses
|
1,837,868
|
919,897
|
101.2 %
|
Selling
expenses
|
1,907,406
|
824,757
|
129.7 %
|
Distribution
expenses
|
384,184
|
403,452
|
(4.8 %)
|
Total
expenses
|
4,129,458
|
2,148,106
|
92.2 %
|
Share of results
subsidiary
|
(18,333)
|
(1,561)
|
1,074.4 %
|
Operating
income
|
1,438,557
|
2,319,583
|
(38.0 %)
|
Interest
expense
|
(345,453)
|
(47,123)
|
633.1 %
|
Interest
income
|
22,783
|
16,642
|
36.9 %
|
Unrealized (loss) gain
in valuation of financial derivative instruments
|
(58,119)
|
360,123
|
(116.1 %)
|
Foreign exchange loss,
net
|
(50,551)
|
(311,503)
|
(83.8 %)
|
Financing cost,
net
|
(431,340)
|
18,139
|
(2,478.0 %)
|
Income before income
taxes
|
1,007,217
|
2,337,722
|
(56.9 %)
|
Income taxes
|
482,459
|
724,951
|
(33.4 %)
|
Net income including
minority interest
|
524,758
|
1,612,771
|
(67.5 %)
|
Non-controlling
interest loss
|
1,050
|
-
|
100 %
|
Net
income
|
525,808
|
1,612,771
|
(67.4 %)
|
EBITDA breakdown
(Ps. 1,646.6 million)
|
Concept
|
Sep
2022
|
Sep
2021
|
Δ%
|
Net income including
minority interest
|
524,758
|
1,612,771
|
(67.5 %)
|
(+) Income
taxes
|
482,459
|
724,951
|
(33.4 %)
|
(+) Financing cost,
net
|
431,340
|
(18,139)
|
(2,478.0 %)
|
(+) Depreciation and
amortization
|
208,123
|
58,472
|
255.9 %
|
EBITDA
|
1,646,680
|
2,378,055
|
(30.8 %)
|
EBITDA
margin
|
19.9 %
|
30.3 %
|
(10.5 %)
|
EBITDA
|
1,646,680
|
Extraordinary
Items:
|
|
Organizational
restructuring
|
22,257
|
Accounts Receivable
Write-off
|
51,309
|
Loss on sale of
equipment
|
2,380
|
Adjusted
EBITDA
|
1,722,626
|
Adjusted EBITDA
margin
|
20.8 %
|
Betterware de México, S.A.P.I.
de C.V. Consolidated Statements of Cash
Flows For the nine months ended on September 30, 2022,
and 2021 (In Thousands of Mexican
Pesos)
|
|
Cash flows from
operating activities:
|
Sep
2022
|
Sep
2021
|
Profit for the
period
|
524,758
|
1,612,771
|
Adjustments
for:
|
|
|
Income tax expense
recognized in profit of the year
|
482,459
|
724,951
|
Depreciation and
amortization of non-current assets
|
208,123
|
58,472
|
Interest income
recognized in profit or loss
|
345,453
|
(16,642)
|
Interest expense
recognized in profit or loss
|
(22,783)
|
47,123
|
Gain of property,
plant, equipment sale
|
(5)
|
-
|
Unrealized loss (gain)
in valuation of financial derivative instruments
|
58,119
|
(360,123)
|
Share-based payment
expense
|
9,011
|
7,902
|
Currency translation
effect
|
(153)
|
-
|
Loss in
subsidiary
|
3,388
|
1,277
|
Movements in working
capital:
|
|
|
Trade accounts
receivable
|
18,170
|
(121,155)
|
Trade accounts
receivable from related parties
|
7,637
|
(95,965)
|
Inventory,
net
|
(70,369)
|
66,946
|
Prepaid expenses and
other assets
|
(157,574)
|
(50,456)
|
Accounts payable to
suppliers and accrued expenses
|
(839,766)
|
(105,849)
|
Provisions
|
940
|
-
|
Value added tax
payable
|
98,361
|
15,984
|
Statutory employee
profit sharing
|
(9,265)
|
12,213
|
Trade accounts payable
to related parties
|
120,573
|
2,899
|
Income taxes
paid
|
(433,955)
|
(612,323)
|
Employee
benefits
|
12,371
|
260
|
Net cash (used) generated in operating activities
|
355,493
|
1,188,285
|
Cash flows from
investing activities:
|
|
|
Investment in
subsidiaries
|
(4,699,204)
|
(26,102)
|
Payments for property,
plant and equipment, net
|
(129,218)
|
(347,551)
|
Proceeds from disposal
of property, plant and equipment, net
|
7,229
|
17,220
|
Interest
received
|
27,597
|
16,642
|
Net cash used in investing activities
|
(4,793,596)
|
(339,791)
|
Cash flows from
financing activities:
|
|
|
Proceeds from
borrowings
|
5,490,252
|
1,527,080
|
Repayment of
borrowings
|
(370,157)
|
(646,554)
|
Interest
paid
|
(334,987)
|
(50,446)
|
Costs
emission
|
(88,144)
|
-
|
Lease
payment
|
(37,600)
|
(4,913)
|
Share
repurchases
|
(25,264)
|
-
|
Dividends
paid
|
(899,610)
|
(1,050,000)
|
Net cash generated (used) in financing activities
|
3,734,490
|
(224,833)
|
Net decrease in cash and cash equivalents
|
(703,613)
|
623,661
|
Cash and cash
equivalents at the beginning of the period
|
1,175,198
|
649,820
|
Cash and cash
equivalents at the end of the period
|
471,585
|
1,273,481
|
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
revenues
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.
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.
Q3 2022 Conference Call
Management will hold a conference call with investors on
October 28, 2022, 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: 13733337
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: 13733337
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SOURCE Betterware de México, S.A.B. de C.V.