GUADALAJARA, Mexico, Oct. 28,
2021 /PRNewswire/ -- Betterware de Mexico S.A.P.I. de
C.V. (NASDAQ: BWMX), has released its financial results for the
third quarter fiscal 2021 ended September
30, 2021, and posted a letter to its shareholders on its
investor relations website at
https://investors.betterware.com.mx/
Q3 2021 vs. Prior-Year Quarter ($ in Pesos)
Q3 2021
Revenue
|
Ps. $2,361.5
million
|
4% increase over Q3
2020
|
Q3 2021 Gross
Profit
|
Ps. $1,328.5 million
or 56.3% of Revenue
|
7% increase over Q3
2020
|
Q3 2021
EBITDA
|
Ps. $708.4 million or
30.0% of Revenue
|
3% decrease over Q3
2020
|
Q3 2021 Average
Distributors
|
63.5
thousand
|
19% increase over Q3
2020
|
Q3 2021 Average
Associates
|
1.18
million
|
20% increase over Q3
2020
|
Luis G. Campos, Executive
Chairman of the Board, stated, "Our Company has a long history of
consistent and profitable growth. Last year, this growth
accelerated sharply as we almost tripled the size of our network of
distributors and associates, becoming the largest active sales
force in the direct-to-consumer market in Mexico. After the extraordinary growth seen in
2020, the first nine months of 2021 have been a transitioning
period where our main objective has been to consolidate our network
of new distributors and associates gained during 2020 and adapt our
operating capabilities to this new significantly higher level of
revenues. The latter allowed us to deliver growth in net revenues
of 4% and a 69% increase in net revenues for the first nine months
of 2021."
Mr. Campos continued: "We move forward having successfully
consolidated our network of distributors and associates,
maintaining essentially the same number of active associates and
distributors as we had by the end of 2020, but with a much more
solid base, and our operating expense structure is aligned to
support our current operations and our expectations for double
digit sales compounded annual growth rate from 2021 to 2025.
Overall, we are confident that the strength of our flexible
business model, expansion as we execute our three strategic
pillars, and our resiliency given our ability to adapt quickly to
various situations has us well positioned to achieve our goals of
doubling our household penetration to 40% by 2025 and increasing
our share of wallet, which would result in doubling our net
revenues from 2020 in 2025."
Summary of Quarterly Results
After the extraordinary
growth seen during 2020, when its network of distributors and
associates grew to almost three times the size it was by the end of
2019, Betterware´s main challenge for 2021 has been to consolidate
its distributors and associates base. During the third quarter, the
Company has successfully consolidated its network of distributors
and associates with a much more solid base and successfully
maintained essentially the same number of distributors and
associates it had by the end of 2020.
During the quarter, the company grew net revenues by 4%, on top
of the almost 200% growth seen in Q3 20. For the first nine months
of 2021, net revenues grew 69% compared to the same period last
year.
Q3 21 gross margin expanded 165 bps to 56.3% in Q3 21
from 54.6% in Q3 20. For the first nine months of 2020, gross
margin expanded 288 bps to 56.9%.
After adjusting its operating expense´s structure during Q1 21,
the Company generated Ps. 708.4M in
EBITDA during Q3 21, slightly below Q3 20 EBITDA, which in turn was
234% higher than EBITDA during the third quarter of 2019. For the
quarter, EBITDA margin was 30.0%. For first nine months of 2021,
EBITDA increased by 75% and EBITDA margin expanded 113 bps to
30.3%.
For the first nine months of the year, net income increased 461%
and adjusted net income increased 49% relative to the same period
last year. Earnings per share for the first nine months of the year
increased 408% to Ps. 43.76 and adjusted earnings per share was Ps.
33.99.
Strength of Betterware´s Differentiated Business
Model
Betterware highlights the key features of its business
model, which combined with the Company´s focus on its three
strategic pillars, have allowed the company to grow at constant
double-digit rates of growth for 20 years and will allow the
company to double its household penetration to 40% by 2025 and
increase its share of wallet.
- High Cash Flow Generation: low CAPEX requirements
and negative cash conversion cycle.
- Asset Light Business Model: third-party product
manufacturing and third-party delivery to distributors
- Flexibility to Adapt and React to Different
Situations.
The Company's financial position remained strong during the
third quarter ending the period with a Net Debt to EBITDA ratio of
0.1x, up from -0.4x in Q3 20. The main strengths of the Balance
Sheet come as a result of its differentiated Business Model, which
allow the company to have a high cash conversion rate, low
liquidity requirements and flexibility to adapt its operation as
demand increases or decreases.
Adjustments of Betterware´s Commercial
Strategies
During the quarter, the Company faced three
external headwinds including: (i) a decline in consumption; (ii) a
shift in consumption trends given the re-opening post the pandemic
and (iii) supply chain disruption in China, driven by increases in sea freight
prices and the rationing of energy. The Company is adjusting its
commercial strategies to adapt to these new external conditions
that it expects to continue in 2022. These changes include, among
others, a change in product mix to make it more attractive for
associates to continue selling and for new associates to join its
network of distributors and associates.
While early, these adjustments already began to show positive
results and are expected to continue to lead to improvements during
November and December 2021. This,
combined with the increased frequency of catalogue distribution is
expected to generate increasingly positive results in 2022 and
going forward. Betterware remains confident in its ability to
further adjust its strategies if necessary.
Full-Year 2021 Guidance and Growth Outlook
The
Company expects the headwinds faced during the quarter to continue,
at least during the fourth quarter of the year. Therefore,
Betterware expects its results for fiscal year 2021 to be closer to
the lower end of its previous guidance of Ps. 10,800M in net revenue and Ps. 3,200M in EBITDA, which implies net revenue
growth of 49% and EBITDA growth of 48%, and an EBITDA margin of
29.6%, on top of the 135% growth in net revenue and 154% growth in
EBITDA during 2020.
Going forward, the Company is confident that given the strength
of its business model and its competitive advantages, and its
ability to adapt to different market conditions, it is well
positioned to double its household penetration to reach its target
40% by 2025, while expanding its share of wallet. In addition to
its organic growth opportunities, the Company is actively
evaluating geographic expansion, and inorganic growth through
attractive M&A opportunities.
Andres Campos, Chief Executive
Officer, stated, "We are pleased with our third quarter results as,
even considering the external headwinds during the period, and
after the growth we saw in 2020 and specially in Q3 20 when our
revenues grew almost 200%, our Q3 21 net revenues grew 4% compared
to the same period last year. Overall, we are pleased with the
continued operational progress we made in the third quarter as we
continue to focus on driving household penetration and share of
wallet. As we enter the fourth quarter, we are adapting our
strategies to the current operating environment and are confident
in our positioning to continue growing during the quarters and for
the coming years, to reach our target of 40% household penetration
by 2025."
Quarterly Dividend
As previously announced and aligned
to the Company's ability to generate strong cash flow after
investments, its Board of Directors has proposed a Ps. 1,400M dividend to be paid to its shareholders
for record in four instalments of Ps. 350M per quarter. The fourth quarterly dividend
is subject to approval at the next Ordinary General Shareholders'
Meeting to be held on October 29,
2021.
Conference Call and Webcast Information
The Betterware
management team will host a conference call with the investment
community on October 29, 2021, at
9 a.m. (ET). The U.S. toll free
dial-in for the conference call is 1-877-451-6152 and the
international dial-in number is 1-201-389-0879. Those wishing
to access the webcast, as well as the financial information
presented during the call, can visit the Investor Relations page on
the company's website at
https://investors.betterware.com.mx/.
Please visit the Betterware investor relations website at
https://investors.betterware.com.mx/ to view the financial
results included in the letter to shareholders. The Company intends
to continue to make future announcements of material financial and
other information through its investor relations website. The
Company will also, from time to time, disclose this information
through press releases, filings with the Securities and Exchange
Commission, conference calls, or webcasts, as required by
applicable law.
About Betterware de Mexico S.A.P.I. de C.V. (NASDAQ:
BWMX)
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
catalogues 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, as past results in no way offer any guarantee of future
performance. 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.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/betterware-announces-third-quarter-fiscal-year-2021-financial-results-301411389.html
SOURCE Betterware de México, S.A.B. de C.V.