Betterware (BWMX) Q3 2024 earnings summary

Executive summary

• Q3 2024 net revenue grew 6.6% year-over-year and 7.4% year-to-date, with all business units contributing to growth despite macroeconomic headwinds.

• Adjusted EBITDA increased 11.7% year-over-year, highlighting operational resilience and efficiencies.

• Free cash flow rose 41.9% year-over-year, in line with targets and supporting deleveraging efforts.

• Net debt to EBITDA ratio improved to 1.76x, the lowest since the Jafra acquisition.

• The company announced its nineteenth consecutive quarterly dividend payment.

Financial highlights

• Q3 2024 net revenue: $3,330M (+6.6% YoY); 9M 2024: $10,323M (+7.4% YoY).

• Q3 Adjusted EBITDA: $592M (+11.7% YoY); 9M Adjusted EBITDA: $2,003M (+5.3% YoY).

• Gross margin for Q3 was 71.2% (+100 bps YoY), with Betterware Mexico at 54.8%, impacted by peso depreciation and freight costs.

• Adjusted Net Income was MXN 180.5M, down 8.4% YoY due to increased tax provisions.

• Net debt decreased 4.7% YoY, with net debt to EBITDA ratio at 1.76x and interest coverage at 3.52x.

Outlook and guidance

• 2024 net revenue expected between Ps. 13,800M–14,400M (6.1%–10.7% YoY growth); EBITDA to be at the lower end of Ps. 2,900M–3,100M range due to temporary margin impact.

• Gross margin expected to recover to 58%-59% in Q4, assuming stable freight and exchange rates.

• Management remains confident in meeting full-year targets, supported by product innovation, catalog redesign, and digital initiatives.