Financial Data and Key Metrics Changes - The company reported a double-digit revenue growth of 11.1% in Q4 2024 compared to the same period last year [4] - Consolidated net revenue for the full year increased by 8.4%, driven by Betterware Mexico's 4.6% growth and Jafra Mexico's 13% growth [19] - EBITDA increased by 2% to MXN 2.8 billion, slightly below the low end of the guidance range of MXN 2.9 billion [6][26] - Adjusted earnings per share grew by 10.5% in Q4 and 17.3% for the full year [26] Business Line Data and Key Metrics Changes - Jafra Mexico achieved a remarkable 22.2% revenue growth in Q4, contributing significantly to overall performance [5][17] - Betterware Mexico demonstrated resilience with a 1.5% net revenue growth in Q4, despite challenges [18] - Jafra U.S. experienced a revenue decrease of 17.6% in U.S. dollars, primarily due to implementation issues with Shopify Plus [18] Market Data and Key Metrics Changes - Betterware Mexico holds an estimated 4% market share in the household product market, with a goal to deepen market penetration [8] - Jafra Mexico aims to become the number one direct sales beauty brand in Mexico, currently holding a 4% market share [37] Company Strategy and Development Direction - The company plans to focus on five priority fronts: conquering Mexico, international expansion, inorganic growth, centralized services, and sustainability [33][39][45] - The strategy includes enhancing operational efficiency, expanding product offerings, and improving sales force engagement [35][38] - The company aims to lower its net debt to EBITDA ratio to 1.5 times or below by 2025 [26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged unexpected external headwinds affecting profitability, including supply chain disruptions and currency depreciation [6][7] - The outlook for 2025 includes expectations of mid to high single-digit growth for both net revenues and EBITDA [27] - Management expressed confidence in the company's growth trajectory and commitment to delivering long-term shareholder value [28][46] Other Important Information - The company has proposed a dividend of MXN 250 million for Q4, marking the 20th consecutive dividend since its IPO [27] - Adjusted EBITDA for the full year increased by 2%, despite a decline in Betterware Mexico's EBITDA [24] Q&A Session Summary Question: Inventory levels and future expectations - The company experienced inventory shortages in the first half of the year and built up inventory in the second half due to rising freight costs and supply chain disruptions [49] - Normalized inventory levels are expected to be around MXN 2,000 million instead of MXN 2,500 million by the end of 2024 [55]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 11.1% in Q4 2024 compared to the same period last year, driven by strong performance in Jaffra Mexico [3][11] - For the full year 2024, consolidated revenue increased by 8.4% compared to 2023, with Jaffra Mexico achieving a 13% increase and Better World Mexico a 4.6% increase [4][14] - EBITDA increased by 2% to RUB 2.8 billion versus 2023, although it was slightly below the low end of the guidance range [4][18] - Adjusted earnings per share grew by 10.5% in Q4 and 17.3% for the full year, supported by lower interest expenses and gains on derivative instruments [20] Business Line Data and Key Metrics Changes - Jaffra Mexico experienced a remarkable 22.2% revenue growth in Q4, while Better World Mexico showed resilience with a 1.5% growth [3][12] - Jaffra U.S. saw a revenue decrease of 17.6% in U.S. dollars, primarily due to challenges with the implementation of Shopify Plus [13] - Better World Mexico's EBITDA surged by 31.8% in Q4, with a margin expansion of 508 basis points [18] Market Data and Key Metrics Changes - Better World Mexico holds an estimated 4% market share in the household product market, with plans to deepen market penetration [5] - Jaffra Mexico's gross margin improved significantly, rising to 76.3%, driven by a favorable product mix and pricing strategy [17] Company Strategy and Development Direction - The company aims to consolidate its operations in Mexico, focusing on expanding market share and enhancing operational efficiency [25][26] - Plans for international expansion include positioning brands in the U.S. market and entering Latin America, starting with Ecuador [29][30] - The company is committed to inorganic growth by exploring acquisitions that complement existing brands [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged external challenges, including supply chain disruptions and rising costs, but expressed confidence in the company's resilience and growth potential [19][21] - The target for 2025 includes mid to high single-digit growth for both net revenues and EBITDA [21] Other Important Information - The company plans to launch a new online training program for its sales force and enhance digital capabilities [28] - A dividend of Ps. $250,000,000 for Q4 has been proposed, marking the twentieth consecutive dividend since the 2020 IPO [20][21] Q&A Session Summary Question: Inventory levels and normalization - Management indicated that inventory levels rose due to previous shortages and rising costs, with expected normalized levels around MXN 2,000 million for 2024 [37][44]

Group 1 - The individual investor focuses on undercovered companies, particularly in technology, software, electronics, and energy transition sectors [1] - The investor has over 50 companies on their watchlist and has been investing personal capital for over 7 years globally [1] - The investor holds a Master's degree in Electrical Engineering and works as an automotive battery R&D engineer in Sweden [1] Group 2 - The investor aims to identify asymmetric investment opportunities to achieve market-beating returns through diligent research of small to mid-cap companies [1]

Company Performance - Betterware de Mexico SAPI de C reported quarterly earnings of $0.26 per share, missing the Zacks Consensus Estimate of $0.29 per share, and down from $0.31 per share a year ago, representing an earnings surprise of -10.34% [1] - The company posted revenues of $176.15 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 4.72%, but down from $183.09 million year-over-year [1] - Over the last four quarters, Betterware de Mexico has surpassed consensus revenue estimates four times [1] Market Performance - Betterware de Mexico shares have lost about 11.8% since the beginning of the year, while the S&P 500 has gained 21.5% [2] - The current Zacks Rank for Betterware de Mexico is 5 (Strong Sell), indicating expected underperformance in the near future [4] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0.47 on revenues of $181.91 million, and for the current fiscal year, it is $1.72 on revenues of $702.45 million [4] - The estimate revisions trend for Betterware de Mexico is currently unfavorable, which may impact future stock performance [4] Industry Context - The Consumer Products - Discretionary industry, to which Betterware de Mexico belongs, is currently in the bottom 40% of the Zacks industry rankings [5] - Research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [5] - Spectrum Brands, another company in the same industry, is expected to report quarterly earnings of $1.13 per share, reflecting a year-over-year change of -16.9% [5]

Financial Data and Key Metrics Changes - Net revenues increased by 6.6% year-over-year and 7.4% over the first nine months of 2024 [3] - Adjusted EBITDA grew by 11.7%, reaching MXN 592 million, with an EBITDA margin expanding by 81 basis points to 17.8% [17] - Adjusted net income decreased by 8.4% year-over-year, totaling MXN 180.5 million, primarily due to increased tax provisions [17] Business Line Performance - Betterware Mexico's net revenue grew by 3.2% in Q3 and 5.7% year-to-date, marking its fourth consecutive quarter of growth [7] - Jafra Mexico's revenue increased by 9.2% in Q3 and 9.8% year-to-date, driven by successful product innovations [9] - Jafra U.S. showed promising results with net revenue up 11.7% in Q3 and 1.9% year-to-date, moving closer to breakeven [11] Market Data and Key Metrics Changes - The depreciation of the Mexican peso negatively impacted gross margins, which fell to 54.8% compared to 56.2% last year [19] - Freight costs increased significantly, affecting gross margins by approximately 150 basis points [19] Company Strategy and Industry Competition - The company is focused on expanding its product portfolio, increasing SKUs from approximately 370 to 420 to capitalize on new categories while maintaining core categories [8] - Strategic investments in international expansion are ongoing, with MXN 8.2 million invested in expanding Betterware into the U.S. and Peru [20] - The company aims to maintain a net debt-to-EBITDA ratio of 1.5 to 2.5 times, depending on acquisition prospects [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in finishing the year strongly, with a solid pipeline of new product launches and strategic initiatives [4][44] - The company remains committed to delivering shareholder value, announcing its 19th consecutive dividend payment [4][24] - Management acknowledged challenges from macroeconomic factors but emphasized operational resilience [3] Other Important Information - The sale of Jafra's former headquarters resulted in a non-cash accounting loss of MXN 435 million, which does not impact operational performance [18] - The company is evaluating the potential application of hedge accounting to better reflect the impact of foreign exchange hedges [21] Q&A Session Summary Question: Increase in SKUs and Pricing Strategy - Management explained that the increase in SKUs targets both new categories and core categories, with a focus on introducing lower-priced items to balance growth [26][28] Question: Inventory Levels - Management confirmed that inventory levels are prepared for the holiday season, addressing previous stock-outs and ensuring readiness for Q4 [29] Question: U.S. Expansion and Peru Rollout - Management indicated that Betterware U.S. is in the piloting phase, with operations already launched, and plans to launch in Peru by Q1 or Q2 of next year [30][31] Question: Cost Structure Changes - Management noted that the cost structure has shifted to be more variable, reflecting growth and optimization efforts in fixed expenses [35][36] Question: Future Inventory Investments - Management stated that additional inventory investments will depend on the stabilization of the supply chain and prices, indicating no need for further buildup if conditions remain stable [40][41]

BeFra Q3 2024 Earnings Results October 2024 Q3 2024 Highlights: Continued Growth Q3 2024 consolidated net revenue increased by 6.6% YoY, driven by growth across all three business units. Adjusted EBITDA continued its growth trajectory, achieving 11.7% YoY growth, despite challenging market conditions for Betterware. Free Cash Flow Generation remained in line with our targets, increasing by 23.4% YoY. Deleveraging efforts are progressing, achieving a Net Debt to EBITDA ratio of 1.76 times. Next Steps Executi ...

Financial Performance - Q3 net revenue increased by 6.6% year-over-year to $3,330,394, and year-to-date revenue grew by 7.4% to $10,322,290[9]. - Adjusted EBITDA rose by 11.7% in Q3 to $591,575, reflecting operational efficiencies despite challenges[10]. - Free Cash Flow surged by 41.9% in Q3 to $417,379, driven by improved working capital management[10]. - Net revenue for Q3 2024 increased by 6.6% to Ps. 3,330,394 compared to Ps. 3,123,507 in Q3 2023[39]. - Gross profit for Q3 2024 rose by 8.1% to Ps. 2,371,259, up from Ps. 2,192,871 in Q3 2023[39]. - Operating income decreased by 12.8% to Ps. 59,047 in Q3 2024 from Ps. 438,111 in Q3 2023[39]. - Net loss for Q3 2024 was Ps. 115,614, a decline of 265.7% compared to a net income of Ps. 196,991 in Q3 2023[39]. - EBITDA for Q3 2024 dropped by 70.4% to Ps. 156,545, down from Ps. 529,424 in Q3 2023[39]. - Net revenue for the nine months ended September 30, 2024, increased by 7.4% to Ps. 10,322,290 compared to Ps. 9,607,815 in the same period of 2023[41]. - Operating income for the nine months ended September 30, 2024, decreased by 21.4% to Ps. 1,276,957 from Ps. 1,623,800 in 2023[41]. - Net income for the nine months ended September 30, 2024, was Ps. 479,300, a decrease of 25.5% from Ps. 643,358 in 2023[41]. Revenue Growth by Segment - Jafra Mexico achieved a 9.2% year-over-year revenue increase in Q3, contributing to overall growth momentum[10]. - Betterware Mexico achieved its fourth consecutive quarter of year-over-year revenue growth, indicating a solid recovery[3]. - Betterware Mexico achieved a net revenue of $1,465,577 in Q3 2024, representing a year-over-year growth of 3.2% and a 5.7% increase for the first nine months[24]. - Jafra Mexico reported a net revenue of $1,623,697 in Q3 2024, reflecting a 9.2% year-over-year growth and a cumulative increase of 9.8% for the first nine months[28]. - Jafra US net revenue increased by 11.7% in Q3 2024, totaling $241,120, driven by higher productivity per Associate[32]. Margin and Cost Management - Betterware Mexico's EBITDA decreased by 14.7% in Q3 2024, totaling $279,889, with a year-to-date decline of 18.4% to $966,463[24]. - Jafra Mexico's adjusted EBITDA grew by 52.0% in Q3 2024, reaching $318,148, and increased by 38.4% year-to-date[28]. - Betterware Mexico's gross margin fell to 54.8% in Q3 2024, down 148 basis points year-over-year, primarily due to peso depreciation and increased international freight costs[27]. - Betterware is implementing a comprehensive pricing strategy to protect margins and enhance consumer loyalty amid external cost pressures[27]. Future Outlook - The company plans to propose a Ps. 250 million dividend for Q3 2024, marking the nineteenth consecutive quarterly dividend payment[20]. - 2024 net revenue guidance is set between $13,800 million and $14,400 million, reflecting a growth range of 6.1% to 10.7%[23]. - The company expects full-year EBITDA to be closer to the lower end of the guidance range due to temporary margin impacts[22]. Operational Metrics - Betterware Mexico's average monthly order rose by 11.6% in Q3 2024, reaching $2,034, while Jafra Mexico's average monthly order increased by 12.4% to $2,347[24][28]. - Total investments in Betterware's U.S. and Peru operations reached $80.2 million, with expected financial contributions by the end of 2025[27]. - Jafra US launched a Shopify e-commerce platform in September 2024, aimed at enhancing sales despite a temporary impact on activity levels[35]. Company Overview - Betterware de México, S.A.P.I. de C.V. is the leading direct-to-consumer company in Mexico, focusing on innovative household products and has expanded into the beauty market through the acquisition of JAFRA on April 7, 2022[63]. - The company operates with an asset-light business model, demonstrating strong profitability and double-digit revenue growth rates, alongside free cash flow generation[63]. - The company distributes its products in both Mexico and the United States, enhancing its market reach[63]. Investor Relations - The Q3 2024 conference call is scheduled for October 24, 2024, at 3:30 pm Mexico City Time, providing an opportunity for investors to engage with management[65].

Financial Data and Key Metrics Changes - In Q2 2024, the company achieved a 5.3% year-over-year revenue growth, with an 8% growth in net revenue for the first half of the year and a 3% increase in EBITDA [2][6][19] - The consolidated gross margin contracted by 103 basis points due to a less favorable product mix, higher freight costs, new import taxes, and peso depreciation [15][19] - Free cash flow decreased by 39% during the quarter, attributed to a 30% year-over-year reduction in operating cash flow [16][19] Business Line Data and Key Metrics Changes - Betterware Mexico experienced a 2.2% year-over-year revenue increase in Q2, achieving 7% growth for the first half of 2024 [29] - Jafra Mexico posted a 10.1% year-over-year revenue increase, indicating effective product strategies and market positioning [31] - Jafra US recorded its first year-over-year revenue growth since its acquisition, with a 1.2% increase in Mexican pesos and a 4.4% increase in US dollars [32] Market Data and Key Metrics Changes - The peso depreciated by 7.5% in June, contributing to market volatility [27] - Container prices surged by 11.6% on average during Q2 due to increased demand for shipping from China to Mexico [7] Company Strategy and Development Direction - The company is focused on product innovation and enhancing demand forecasting to prevent future sellouts, with plans to implement improved pricing structures [10][12] - A redesigned catalog and a more effective merchandising plan are set to launch in October to boost market position [11] - The strategic acquisition of Jafra is seen as instrumental in diversifying the product portfolio and enhancing market resilience [12][13] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2024 revenue and EBITDA targets, highlighting the company's resilience in navigating challenges [3][19] - The company anticipates sustaining double-digit growth at Jafra over the medium and long term [31] - Management is optimistic about the second half of the year, expecting to leverage strategic initiatives for sustained growth and profitability [34] Other Important Information - The company plans to sell a property in Mexico City valued between MXN40 million and MXN50 million to service outstanding debt [17] - The board approved a quarterly dividend payment of MXN250 million, marking the 18th consecutive quarterly dividend since the IPO [37] Q&A Session Summary Question: Product availability and inventory management - Management acknowledged temporary sellouts in Q2 but expressed confidence in meeting demand for the rest of the year [20] Question: Impact of import tariffs and freight costs on profitability - Management indicated that they have negotiated better costs with suppliers and implemented price increases to offset higher import taxes and freight costs [21][47] Question: Innovation pipeline for Jafra - Management confirmed a strong innovation pipeline for the second half, particularly highlighting the launch of the Jafra Biolab skincare line [23][49]

Core Viewpoint - Betterware de México is transferring its stock listing from Nasdaq to the New York Stock Exchange (NYSE), effective June 7, 2024, under the ticker symbol "BWMX" [1][2]. Group 1: Company Overview - Betterware de México, founded in 1995, is the leading direct-to-consumer company in Mexico, focusing on innovative household products [3]. - The company expanded its portfolio by acquiring JAFRA on April 7, 2022, enhancing its presence in the beauty market in Mexico and the United States [3]. - Betterware operates with an asset-light business model, characterized by low capital expenditure requirements and a strong track record of profitability, double-digit revenue growth, and free cash flow generation [3]. Group 2: Strategic Move to NYSE - The transfer to the NYSE is seen as a strategic move to enhance the company's market visibility and leverage the NYSE's hybrid trading model, which is designed to mitigate trading volatility [2]. - The leadership of Betterware expressed confidence in the NYSE's market infrastructure and the potential for long-term value creation for shareholders [2]. - The NYSE welcomes Betterware as part of a global community of 2,400 companies, emphasizing the visibility and market quality that the exchange provides [2].

Investment Thesis - The company has shown resilience by paying dividends for seventeen consecutive quarters despite pandemic-induced volatility since going public via SPAC in March 2020 [1] - Current share price offers an attractive valuation with an 8% dividend yield and an EV to 2024 EBITDA multiple below 5, with potential growth from entering the US market [2] Company Overview - Betterware de Mexico (NASDAQ:BWMX) operates a capital-light direct-to-consumer model selling household items primarily through multi-level marketing and its own website [3] - The acquisition of Jafra in April 2022 has significantly impacted revenue, with Jafra contributing 57% and Betterware 43% to consolidated revenue for FY2023 [4] Financial Review - The company experienced a robust revenue growth of nearly 13% in FY2023 after navigating challenges in 2022, with gross margins reaching 74% in Q1 2024 [8] - Management's guidance for FY2024 anticipates revenue growth of 8% and EBITDA growth of 11%, indicating strong operating leverage [9][11] - The company has reduced its net debt to TTM EBITDA ratio from 2.6 to 1.78, with a focus on debt repayment following the acquisition of Jafra [12] Valuation - BWMX is projected to deliver approximately $180 million in EBITDA for 2024, with a free cash flow estimate of $125 million, indicating a 70% conversion from EBITDA [13] - The company trades at significant discounts compared to peers in the direct-to-consumer space, with EV to 2024 EBITDA ratios of 4.8 compared to 9.4 for Newell Brands and 17.7 for The Container Store Group [14][15] US Market Entry - The company officially entered the US market, leveraging Jafra's existing presence, with plans to target the substantial Hispanic population in the US [16][17] - The Hispanic population in the US generates a GDP twice that of Mexico's, presenting a significant growth opportunity for the company [18]