Betterware (BWMX) Q3 2024 earnings summary

Executive summary

• Q3 2024 net revenue increased 6.6% year-over-year and 7.4% year-to-date, with all business units contributing despite macroeconomic headwinds such as peso depreciation and higher trade costs.

• Adjusted EBITDA rose 11.7% year-over-year, reflecting operational resilience and effective strategic direction.

• Free cash flow grew 41.9% year-over-year, and net debt to EBITDA improved to 1.76x, the lowest since the Jafra acquisition.

• Jafra Mexico led with strong growth and margin expansion, while Betterware Mexico faced temporary margin pressure from peso depreciation and higher freight costs.

• The sale of Jafra Mexico's former headquarters resulted in a non-cash accounting loss, impacting reported net income but not operational performance.

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).

• Q3 net income: -$115.6M (vs. $197M prior year), mainly due to the one-time property sale loss; Adjusted net income: $180.5M (-8.4% YoY) due to higher tax provisions.

• Q3 free cash flow: $417.4M (+41.9% YoY); 9M free cash flow: $1,235M (-22.7% YoY).

• Net debt/Adjusted EBITDA improved to 1.76x (from 2.08x YoY); interest coverage increased to 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 at Betterware Mexico.

• Gross margin expected to return to 58%-59% in Q4 and remain stable if external conditions hold.

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