Betterware de México, S.A.P.I. de C.V. (NASDAQ:BWMX) Q4 2023 Earnings Conference Call February 23, 2024 9:00 AM ET

Company Participants

Luis Campos – Executive Chairman

Andres Campos – Chief Executive Officer

Alejandro Ulloa – Chief Financial Officer

Conference Call Participants

Eric Beder – SCC Research

Cristina Fernández – Telsey Advisory Group

Andres Lomeli – LCA Capital

Operator

Good morning. Welcome to Betterware's Fourth Quarter 2023 Earnings Conference Call. Joining us today are the leadership team members Executive Chairman, Luis Campos; Chief Executive Officer, Andres Campos; and Corporate Chief Financial Officer, Alejandro Ulloa.

Before we begin, I would like to remind you that the call will include forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations, and any such statement should be considered in conjunction with cautionary statements and the safe harbor statement in the earnings release and risk factors discussed in reports filed with the SEC. Betterware assumes no obligation to update any of these forward-looking statements or information. A reconciliation and other information regarding non-GAAP financial measures discussed on the call can be found in the earnings release issued yesterday as well as in the Investors section of the company's website.

I would now like to turn the call over to the Company's Executive Chairman, Luis Campos. Please proceed.

Luis Campos

Thank you, operator, and good morning, everyone. 2023 has been a transformative year for Betterware. As a group, we have become stronger and more diversified also leveraging our core competitive advantages such as consumer product and direct selling leaders. This was reflected in a 5.2% year-on-year net revenue increase with a strengthened profitability, achieving a total of Ps.2,721 million in EBITDA. At the midpoint of our initial guidance and exceeding our revised guidance for the year and a strong full-year EBITDA margin of 20.9%. Our strong cash flow generation has enabled us to reduce debt and further strengthen our balance sheet.

I would like to commend the entire Betterware Mexico team for their success in navigating challenging post-pandemic headwinds. The stabilization we are seeing in Mexico's home solutions market, coupled with robust execution of our commercial strategy, enabled a 7% year-over-year increase in Q4 net revenue our first quarter of growth since the third quarter of 2021. Today, we are well positioned for a new era of sustained growth. I would also like to express my appreciation to our Jafra team. Jafra has surpassed our initial expectations as an acquisition that has proven to be highly accretive, delivering exceptional fourth quarter 2023 EBITDA with a 45.3% year-on-year increase in Mexico and achieving almost breakeven in the U.S.