Betterware de México, S.A.P.I. de C.V. (BWMX) Bundle
A Brief History of Betterware de México, S.A.P.I. de C.V.
Betterware de México, S.A.P.I. de C.V., commonly referred to as Betterware, has established itself as a prominent player in the direct selling industry, primarily offering a variety of home and kitchen products. The company has undergone significant transformations and expansions since its inception, with a focus on enhancing its operational efficiencies and market reach.
Company Overview
Founded in 1995, Betterware began to operate in the direct selling space, catering to the growing demand for home solutions in Mexico. As of 2024, Betterware has expanded its product offerings and strengthened its distribution network, which includes a vast number of Associates and Distributors across the country.
Financial Performance
As of the third quarter of 2024, Betterware reported robust financial metrics, demonstrating its resilience amid market challenges. The key figures from the financial statements are summarized in the table below:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Revenue | $3,330,394 | $3,123,507 | +6.6% |
| Gross Margin | 71.2% | 70.2% | +100 bps |
| EBITDA | $156,545 | $529,424 | -70.4% |
| EBITDA Margin | 4.7% | 16.9% | -1,225 bps |
| Net Income | -$115,614 | $196,991 | -158.7% |
| Free Cash Flow | $417,379 | $294,227 | +41.9% |
Market Expansion and Strategic Initiatives
Betterware has actively pursued international expansion, particularly targeting markets in the United States and Peru. The cumulative investments in these markets have reached approximately $80.2 million, with expectations for initial financial contributions by the end of 2025. These strategic initiatives are aimed at enhancing brand presence and diversifying revenue streams.
Product Innovation and Development
The company has placed a strong emphasis on product innovation, launching several new product lines to meet consumer demands. For instance, the introduction of enhanced kitchen and home products has driven significant sales growth, with a focus on higher-priced items that contribute to improved average order values among Associates.
Operational Efficiency
In response to rising costs and market volatility, Betterware has implemented measures to improve operational efficiencies. The company reported a notable increase in its Free Cash Flow, attributed to effective working capital management and a shortened Cash Conversion Cycle, which improved from 58 days to 38 days year-over-year.
Key Financial Metrics Summary
The financial performance for the nine months ending September 30, 2024, is detailed in the following table:
| Metric | 9M 2024 | 9M 2023 | Change (%) |
|---|---|---|---|
| Net Revenue | $10,322,290 | $9,607,815 | +7.4% |
| Gross Profit | $7,470,682 | $6,928,432 | +7.8% |
| Operating Income | $1,276,957 | $1,623,800 | -21.4% |
| Net Income | $479,300 | $643,358 | -25.5% |
Betterware's financial metrics reflect its strategic focus on growth and operational excellence, positioning the company for sustained success in the direct selling market.
A Who Owns Betterware de México, S.A.P.I. de C.V. (BWMX)
Ownership Structure
As of 2024, Betterware de México, S.A.P.I. de C.V. (BWMX) has a diverse ownership structure that includes both institutional and retail investors. The largest shareholders include:
- Grupo Betterware, S.A. de C.V. - 60.3%
- Institutional Investors - 25.5%
- Retail Investors - 14.2%
Key Shareholders
The following table illustrates the key shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage |
|---|---|
| Grupo Betterware, S.A. de C.V. | 60.3% |
| Institutional Investors | 25.5% |
| Retail Investors | 14.2% |
Financial Performance
Betterware's financial performance has shown resilience in 2024, with reported figures as follows:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Revenue | $3,330,394 | $3,123,507 | +6.6% |
| Gross Margin | 71.2% | 70.2% | +1.0% |
| EBITDA | $156,545 | $529,424 | -70.4% |
| Net Income | -$115,614 | $196,991 | -158.7% |
| Free Cash Flow | $417,379 | $294,227 | +41.9% |
Debt and Equity Metrics
As of Q3 2024, Betterware's leverage and equity metrics are as follows:
| Metric | Value |
|---|---|
| Net Debt to EBITDA | 1.76x |
| Interest Coverage | 3.52x |
| Dividend Yield | 11.91% |
| Return on Equity (ROE) | 69.4% |
| Equity Turnover | 14.12x |
Market Position and Future Outlook
Betterware continues to focus on expanding its market presence, especially in the U.S. and Peru, with total investments amounting to $80.2 million since the start of its international initiatives. The company anticipates increased contributions from these markets by the end of 2025.
Betterware de México, S.A.P.I. de C.V. (BWMX) Mission Statement
Company Overview
Betterware de México, S.A.P.I. de C.V. (BWMX) operates in the direct selling industry, focusing on home solutions, personal care, and beauty products. The company aims to enhance the quality of life for its customers and associates through innovative products and a strong community-driven sales model.
Mission Statement
As of 2024, Betterware de México's mission is to "provide a diverse range of high-quality products that empower individuals to enhance their living environments while fostering a supportive and inclusive community of associates." This mission emphasizes customer satisfaction, innovation, and community engagement.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Net Revenue | $3,330,394 | $3,123,507 | +6.6% |
| Gross Margin | 71.2% | 70.2% | +1.0% |
| EBITDA | $156,545 | $529,424 | -70.4% |
| Adjusted EBITDA | $591,575 | $529,424 | +11.7% |
| Net Income | ($115,614) | $196,991 | -158.7% |
| Free Cash Flow | $417,379 | $294,227 | +41.9% |
| Net Debt / Adjusted EBITDA | 1.76x | 2.08x | -15.5% |
| Interest Coverage | 3.52x | 2.55x | +38.0% |
Operational Metrics
Betterware’s operational strategy is anchored in its mission to ensure customer satisfaction while driving sales through a robust network of associates. The following metrics highlight the effectiveness of this strategy:
| Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Average Associates Base | 694,277 | 768,042 | -9.6% |
| Monthly Activity Rate | 66.3% | 65.2% | +1.1% |
| Average Monthly Order | $2,034 | $1,823 | +11.6% |
| Distributors Average Base | 44,639 | 42,551 | +4.9% | Distributors Monthly Activity Rate | 98.0% | 97.9% | +0.1% |
Market Position and Future Outlook
Betterware de México is committed to expanding its market reach and enhancing its product offerings. The company anticipates growth driven by innovation and a strong focus on customer engagement. The expected net revenue for the full year 2024 is projected to be between $13,800 million and $14,400 million, reflecting a 6.1% to 10.7% increase from 2023.
Challenges and Strategic Initiatives
Despite facing challenges such as fluctuating exchange rates and rising operational costs, Betterware aims to mitigate these issues through strategic initiatives focused on product innovation, pricing strategies, and enhanced associate engagement programs. The company plans to continue investing in its U.S. and Peru operations, with total investments amounting to $80.2 million, positioning itself for long-term growth and market presence.
How Betterware de México, S.A.P.I. de C.V. (BWMX) Works
Company Overview
Betterware de México, S.A.P.I. de C.V. (BWMX) operates primarily in the home goods and direct selling sectors, leveraging a network of independent associates and distributors to market its products. The company has positioned itself as a leader in the Mexican market for household items, personal care, and beauty products.
Financial Performance
As of Q3 2024, Betterware reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Revenue | $3,330,394 | $3,123,507 | +6.6% |
| EBITDA | $591,575 | $529,424 | +11.7% |
| Net Income | $-115,614 | $196,991 | -158.7% |
| Free Cash Flow | $417,379 | $294,227 | +41.9% |
| EPS | $-3.10 | $5.28 | -158.7% |
Key Operational Metrics
Betterware's operations rely heavily on its network of associates and distributors. As of Q3 2024, the key operational metrics are as follows:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Average Associate Base | 694,277 | 768,042 | -9.6% |
| Monthly Activity Rate | 66.3% | 65.2% | +1.7% |
| Average Monthly Order (Associates) | $2,034 | $1,823 | +11.6% |
| Average Distributor Base | 44,639 | 42,551 | +4.9% |
| Monthly Activity Rate (Distributors) | 98.0% | 97.9% | +0.1% |
| Average Monthly Order (Distributors) | $21,531 | $21,944 | -1.9% |
Market Strategy and Product Offerings
Betterware focuses on a variety of product categories, including:
- Home Solutions
- Kitchen Goods
- Personal Care Products
- Beauty and Hygiene Products
- Food Preservation Systems
The company has seen double-digit growth in its main product categories year-to-date, and its pricing strategy has shifted towards higher-priced items, enhancing revenue per order.
Cash Flow and Liquidity
The liquidity ratios for Betterware as of Q3 2024 are:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Current Ratio | 1.07x | 1.06x | +0.3% |
| Free Cash Flow / Adjusted EBITDA | 70.6% | 55.6% | +1,498 bps |
| Cash Conversion Cycle (days) | 38 | 58 | -20 days |
Debt and Leverage
Betterware's leverage ratios as of Q3 2024 indicate a strong balance sheet:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Debt to EBITDA | 1.76x | 2.08x | -15.5% |
| Interest Coverage | 3.52x | 2.55x | +38.0% |
Future Outlook
For the full year 2024, Betterware expects:
| Metric | 2024 Guidance | 2023 Actual | Change (%) |
|---|---|---|---|
| Net Revenue | $13,800 - 14,400 | $13,010 | +6.1% - 10.7% |
| EBITDA | $2,900 - 3,100 | $2,721 | +6.6% - 13.9% |
How Betterware de México, S.A.P.I. de C.V. (BWMX) Makes Money
Revenue Streams
Betterware de México, S.A.P.I. de C.V. generates revenue primarily through its direct selling model, which includes the distribution of household and personal care products. The company operates through a network of associates and distributors who sell its products directly to consumers.
In Q3 2024, Betterware Mexico reported net revenue of $1,465,577 million, reflecting a year-over-year growth of 3.2%. For the first nine months of 2024, net revenue reached $4,496,979 million, an increase of 5.7% compared to the same period in 2023.
Product Categories
The company's product offerings are categorized into several key segments:
- On the Go
- Kitchen
- Hygiene
- Home Solutions
- Food Preservation
Each of these categories has demonstrated double-digit growth on a year-to-date basis, contributing significantly to overall revenue.
Sales Performance Metrics
The following table summarizes the sales performance metrics for Betterware Mexico in Q3 2024:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Revenue | $1,465,577 million | $1,420,739 million | +3.2% |
| Gross Margin | 54.8% | 56.2% | -148bps |
| EBITDA | $279,889 million | $328,295 million | -14.7% |
| EBITDA Margin | 19.1% | 23.1% | -401bps |
Associate and Distributor Metrics
The performance of associates and distributors is crucial for Betterware's sales strategy. In Q3 2024, the average base of associates was 694,277, down 9.6% from the previous year. The end-of-period base was 700,893, a 7.7% decline year-over-year. The monthly activity rate among associates was 66.3%, slightly improved from 65.2% in Q3 2023.
Financial Performance Overview
Betterware's financial performance for the nine months ended September 30, 2024, is as follows:
| Financial Metric | 9M 2024 | 9M 2023 | Change (%) |
|---|---|---|---|
| Net Revenue | $10,322,290 million | $9,607,815 million | +7.4% |
| Gross Profit | $7,470,682 million | $6,928,432 million | +7.8% |
| EBITDA | $1,568,072 million | $1,901,417 million | -17.5% |
| Net Income | $479,300 million | $643,358 million | -25.5% |
Cost Structure and Profitability
As of Q3 2024, Betterware's cost structure exhibited the following breakdown:
- Cost of Sales: $2,851,608 million
- Administrative Expenses: $2,350,939 million
- Selling Expenses: $2,907,457 million
- Distribution Expenses: $500,299 million
Total expenses increased by 8.6% year-over-year, reflecting pressures from rising operational costs.
Cash Flow and Liquidity
Free cash flow for Betterware in Q3 2024 was reported at $417,379 million, representing an increase of 41.9% compared to Q3 2023.
The current ratio stands at 1.07x, indicating a stable liquidity position.
Debt and Financial Health
Betterware's leverage metrics as of Q3 2024 include:
- Net Debt to EBITDA: 1.76x
- Interest Coverage Ratio: 3.52x
The company has been focused on reducing its debt levels, with a decrease in the debt to EBITDA ratio from 2.08x in Q3 2023.
Future Outlook and Strategic Initiatives
Betterware plans to focus on product innovation and pricing strategies to enhance profitability and maintain competitive positioning in the market. The company has allocated $80.2 million for international expansion initiatives in the U.S. and Peru.
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Article updated on 8 Nov 2024
Resources:
- Betterware de México, S.A.P.I. de C.V. (BWMX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Betterware de México, S.A.P.I. de C.V. (BWMX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Betterware de México, S.A.P.I. de C.V. (BWMX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.