Net Sales Increase 205% from the Prior Year
Period
EBITDA Growth of 287%
Net Income Growth of 339%
Maintains 2021 Revenue and EBITDA
Outlook
Betterware de Mexico S.A.B. de C.V. (NASDAQ: BWMX), has released
its financial results for the first quarter fiscal 2021 ended March
31, 2021, and posted a letter to its shareholders on its investor
relations website at https://ri.betterware.com.mx.
Executive Summary
Q1 2021 vs. Prior-Year Quarter ($ in
Pesos)
Q1 2021 Revenue
Ps. $2,901.7 million
205% increase over Q1 2020
Q1 2021 EBITDA
Ps. $923.1 million or up 679
basis points to 31.8% of Revenue
287% increase over Q1 2020
Q1 2021 Net income
$638.5 million
339% increase over Q1 2020
Q1 2021 Adj. Net income
$505.8 million
578% increase over Q1 2020
Q1 2021 EPS
$17.45
273% increase over Q1 2020
Q1 2021 Distributors
66.4 thousand
158% increase over Q1 2020
Q1 2021 Associates
1.25 million
161% increase over Q1 2020
Luis G. Campos, Executive Chairman of the Board, stated, “We
began the year strongly, reporting outstanding first quarter
results reflecting the power of our business model that has led to
predictable, dependable and consistent growth for nearly
two-decades. The first quarter was highlighted by triple-digit
increases in revenue, EBITDA and Net income; robust cash flow and
significant accomplishments toward our strategy. We attribute our
ongoing strength to the advantages of our business model, the
disciplined execution and successful implementation of our
commercial strategies, our technological expertise combined with
compelling product innovation. Our first quarter revenue increase
was driven by our organic core business with our core organic sales
expected to lead our performance for the next several years. We
continue to elevate and expand our business to leverage our
strengths and maximize our long term potential. To this end, the
first quarter saw our largest marketing campaign, the launch of a
new web platform that seamlessly and efficiently allows consumers
to purchase our products online, acceleration in revenue and margin
in our pilot expansion to Guatemala and the acquisition of 60% of
GurúComm, a Mobile Virtual Network Operator and Software Developer
– giving us the ability to expand our reach to mobile product and
service sales longer term. We remain excited about our business
prospects as we enter the second quarter and expect our positive
performance to continue in fiscal 2021 and beyond. Overall, we
expect our strategy to allow Betterware to eventually become a
preeminent leader in solutions for the home.”
Additional First Quarter Highlights, Betterware:
- Introduces 50 new products in the two catalogues launched
during the period;
- Ends the quarter with Ps. $565.4 million in cash and cash
equivalents;
- Shows strong results with its pilot test in Guatemala, which
demonstrates the Company’s ability to successfully expand its
geographical reach beyond Mexico;
Q1 2021 Year-Over-Year Operating
Results ($ in Pesos)
Q1 2021 Revenue
Ps. $2,901.7 million
205% increase over Q1 2020
Q1 2021 Gross Profit
Ps. $1,668.4 million
212% increase over Q1 2020
Q1 2021 Gross Margin
57.5%
138 bps increase over Q1 2020
Q1 2021 Selling
Expenses
Ps. $295.3 million
119% increase over Q1 2020
Q1 2021 Operating
Margin
31.3%
721 bps increase over Q1 2020
Q1 2021 Interest
Income
Ps. $3.4 million
25% increase over Q1 2020
Q1 2021 Income Tax
Rate
31.0%
Flat with Q1 2020
Q1 2021 EPS
$17.45 pesos
273% increase over Q1 2020
Balance Sheet Highlights
The Company maintained a strong balance sheet. As of March 31,
2021, the Company had Ps. $565.4 million in cash and cash
equivalents. Accounts payable days were 123, consistent with
previous quarters. Inventory growth at quarter end reflected the
significant triple digit growth in revenue as well as unusually low
inventory in the first quarter of 2020 reflecting the initial surge
in demand for home products driven by COVID-19 and the timing of
its factory holiday period due to Chinese New Year. The Company
remains pleased with the level and composition of its inventory as
it begins the second quarter. The Company’s cash conversion cycle
remained strong at -27 days in the first quarter of 2021.
Progress on 2021 Strategic Pillars
- Market Penetration
- Increased its household penetration due to its increase in
distributors and associates network.
- The Company continues to target doubling its market share in
Mexico from 20% by the end of 2020 to 40% household penetration in
the next five years.
- Geographic Expansion
- Continued its successful expansion in Guatemala, which saw
sales growth of 382% compared to the first quarter of fiscal 2020
and EBITDA margin rise significantly to 24.6%, proving that the
company can replicate its business model in other geographies.
- The Company continues to target its international expansion to
Colombia and Peru over the next two to three years.
- Category Expansion
- In the two catalogues launched during the quarter, Betterware
introduced 50 new products.
- Continues to target launch of new categories by the second
quarter of 2021.
- Acquisition of 60% of GurúComm, a Mobile Virtual Network
Operator and Communications Software developer giving the company
the ability to expand its product reach to technology solutions for
the home.
- Business Intelligence and Technology Investments
- Early positive reaction to the new e-commerce platform,
www.betterware.com.mx, which launched in December 2020. The
platform is expected to begin to add to the Company’s growth in the
second half of fiscal 2021 and become increasingly material to the
business over the next three to four years. The transactional site
allows greater accessibility and ease of purchase to consumers by
connecting them directly with Betterware distributors and
associates.
- Successful implementation of new software, Power BI, to monitor
day to day operations.
- Continues to target the launch of its improved App for
distributors and associates, Betternet 3.0.
Full-Year 2021 Outlook
FY 2021
Net Revenue
Ps. $10,100M to $11,100M
EBITDA:
Ps. $3,000M to $3,300M
EBITDA Margin:
29.7%
After a strong start to 1Q21, the Company believes it is
positioned to achieve results closer to the high end of its annual
guidance range for both net revenue and EBITDA.
The Company continues to expect CAPEX in 2021 to be Ps. 460M,
which includes additional equipment for its new campus, technology
and other investments. The new campus and extraordinary technology
investments will represent approximately 81% of CAPEX in 2021,
which is down from 92% in 2020 and 88% in 2019.
Andres Campos, Chief Executive Officer, stated, “During the
first quarter, we made progress on many fronts operationally and
our team continued to execute against our four key strategic
priorities of market penetration, category expansion, business
intelligence, technology investments, and geographic expansion. We
are pleased to deliver against these strategies while also making
disciplined investments across the business and return value to our
shareholders through our ongoing quarterly dividend. We believe the
positive momentum of our core organic business, our advantageous
business model and the strength of our strategic initiatives has us
well positioned to achieve our annual outlook.”
Gurúcomm As previously announced on March 22, 2021, the
Company acquired 60% of GurúComm, a Mobile Virtual Network Operator
("MVNO") and Communications Software developer, with an Enterprise
Value of $75M pesos (approximately $3.5 million USD). The purchase
price was $45 million pesos and the investment was paid out of
existing cash on the Company's balance sheet. The Company does not
expect the acquisition to be material to fiscal year 2021.
Quarterly Dividend As previously announced, the Company
announced that its Board of Directors has proposed the payment of a
cash dividend in the amount of Ps. 1,400 million to shareholders
during 2021, to be paid to investors in four instalments of Ps. 350
million per quarter. The second quarterly dividend is subject to
approval on the next Ordinary General Shareholders’ Meeting to be
held on May, 12, 2021.
Conference Call and Webcast Information The Betterware
management team will host a conference call with the investment
community on May 7, 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://ri.betterware.com.mx/financiera/reportes-trimestrales.
A replay of the webcast will be available at the same URL August 7,
2021.
Please visit the Betterware investor relations website at
https://ri.betterware.com.mx/financiera/reportes-trimestrales 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.B. de C.V. Founded in
1995, Betterware de Mexico is a leading direct-to-consumer selling
company in Mexico. The Company has delivered consistent revenue
growth as evidenced by its compound annual growth rate (“CAGR”) of
25% from 2003-2020 with even stronger revenue growth in the last 5
years, which has accelerated to a CAGR of 57%. Focused on the home
organization and solutions segment, Betterware’s wide product
portfolio includes home organization, kitchen, commuting, laundry
and cleaning, as well as other categories.
Supported by its top-class business intelligence and data
analytics units, which provides daily monitoring of key metrics and
product intelligence, Betterware has been able to achieve
sustainable double-digit growth rates by successfully expanding its
market penetration driven by its almost 66,500 distributors and
1.25 million associates network.
Its 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 distribution center.
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 source
version on businesswire.com: https://www.businesswire.com/news/home/20210506006064/en/
Investor Contacts: Betterware IR ir@better.com.mx +52
(33) 3836 0500 Ext. 2011 Or: ICR Investor
Relations: Allison Malkin 1-203-682-8225 Public
Relations: Alecia Pulman 1-203-682-8225
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