Betterware (BWMX) WTR Insights Conference: Powered by The Small Cap Showcase summary

Company history and growth

• Founded 25 years ago after acquiring the Latin American division from a British company, achieving strong double-digit CAGR in sales and EBITDA over this period.

• Listed on Nasdaq six years ago and acquired Jafra Cosmetics worldwide four years ago, moving Jafra from the 14th to the 7th beauty brand in Mexico.

• Recently acquired Tupperware Latin America, aiming to revitalize the brand and regain market share.

• Maintained growth through economic cycles, with a notable 41% annual growth from 2014 to 2023 and a significant revenue surge during COVID-19.

• Post-COVID, stabilized at double pre-pandemic size and resumed growth, with diversification into multiple brands and markets.

Brand portfolio and innovation

• Operates three main brands: Betterware (innovative home solutions), Jafra (beauty and skincare), and Tupperware (food containers).

• Jafra doubled in size post-acquisition, with innovation now contributing nearly 20% of revenue.

• Tupperware's Latin American sales declined from MXN 7.7 billion to MXN 5.1 billion, with plans to reignite growth and leverage the Brazilian market.

• Plans to use Tupperware's platform to introduce other brands in Brazil and further diversify sales across Latin America and the U.S.

• Launches 350 new products per year in Betterware, emphasizing continuous innovation and technology investment.

Business model and financial discipline

• Operates exclusively through person-to-person sales, offering gig economy opportunities to nearly 1.5 million sellers.

• Maintains strong financial discipline: 19-20% EBITDA margins, 75% variable expenses, and only 1.6% of sales invested in CapEx.

• High free cash flow conversion (65% of EBITDA), ROTA of 16%, ROIC of 33%, and a 40% dividend payout ratio over the last three years.

• Successfully deleveraged after acquisitions, reducing debt to EBITDA from 3x to 1.5x.

• Social impact highlighted by MXN 4.1 billion in earnings distributed to sellers last year.