Betterware De Mexico, S.a.p.i. De C.v. · NYSE:BWMX
Betterware De Mexico, S.a.p.i. De C.v — Betterware de Mexico — Investor Presentation (November 2021)
36 slides from Betterware De Mexico, S.a.p.i. De C.v's investor presentation, November 2021
Slide 1: Investor Presentation November 2021
INVESTOR PRESENTATION NOVEMBER 2021
Slide 2: Forward-looking statements disclaimer
The information presented here may include statements regarding future events and / or projected financial results. The results obtained may differ from those projected in this presentation because they are subject to risks and uncertainty that may change based on various factors that are not under
Slide 3: Revolutionizing How Consumers Shop For Household Products
1 Revolutionizing How Consumers Shop For Household Products
Slide 4: Betterware At A Glance
2 Betterware At A Glance Key Facts (as of 10/31/2021) Stock Price $27.18 USD Market Capitalization $1,014M USD FY2021 Guidance Net Revenue $10,800M - $11,300M 49%-56% increase over 2020 EBITDA $3,200M - $3,400M 48%-57% increase over 2020 EBITDA Margin 29.6% - 30.1% -20bps to +30bps vs. 2020 CAPEX $4
Slide 5: Key Investment Highlights
Outstanding Track Record of Consistent Growth 3 Unique Business Model Supported by Three Strategic Pillars: Product Innovation, Technology and Business Intelligence Powerful Distribution Model ● Two-Tier Independent Distributors and Associates ● Compelling Primary or Secondary Income Opportunity Key
Slide 6: Outstanding Track Record of Consistent Growth
Outstanding Track Record of 4 Consistent Growth Historic growth as of 2020 Net Revenue MXN Millions EBITDA MXN Millions Associates and Thousands Distributors CAGR 24% CAGR 23% CAGR 27% CAGR 63% CAGR 57% CAGR 64% 1,290 $7,260 $2,164 $762 $179 113 $136 $22 20 2001 2015 2020 2001 2015 2020 2001 2015 20
Slide 7: 2020 Growth Explained By Acceleration of Long-Term Trends
5 2020 Growth Explained By Acceleration of Long-Term Trends Long-Term trends, which are Betterware´s key strengths, accelerated in 2020: Cleaning and Home Technology Gig Economy Big Data Organization Solutions Basing business decisions Today, people are Adoption to technology will in data is more re
Slide 8: Unique Business Model Supported by Three Strategic Pillars
Unique Business Model Supported by 6 Three Strategic Pillars: Product Business Innovation Technology Intelligence
Slide 9: Product Innovation
7 Product Innovation Anthropological Strategic Quick polls Pipeline Studies Roadmap Ongoing research studies Constant feedback from our Innovation plan updated on Proprietary tecnology platform and interviews made by our associates and distributors a yearly basis and monitored that enables control a
Slide 10: Product Innovation
8 Product Innovation +300 New Products per Year In-House Design: Proprietary designs developed by in-house department together with our manufacturers in Asia and Mexico. Betterware Design Partners: Community of freelance designers that increase our innovation capabilities. Betterware Design Lab: Co-
Slide 11: Product Innovation: Net Company Sales by Category
Product Innovation 9 Net Company Sales by Category Kitchen Home Commuting 34% 23% 8% Laundry & Cleaning Bathroom Bedroom 9% 12% 14% Source: Management, Last 12 Months
Slide 12: Technology
10 Technology Providing a better experience for our Distributors, Associates and Customers Mobile App New B2C digital platform For Distributors and Associates ● New customers buy online, distributors and ● Everything on the go associates deliver products to their homes ● +1M Downloads ● Distributors
Slide 13: Technology: Expanding and Strengthening Digitalization
11 Technology Expanding and Stregthening Digitalization of our Business Artificial Product Home Mobile App 3.0 Intelligence Innovation 2.0 Technology Order Tracking Upgrading our digital Expanding our AI Upgrading product Providing an efficient way Enable our platform, focusing on capabilities by in
Slide 14: Business Intelligence
Business Intelligence 12 Best-in-class Technological Tools Clear Strategy Product Intelligence Tight Monitoring Well-mapped distribution Extensive product analysis to Proprietary live performance network location and track performance and tracking platform penetration by socio- instant market reacti
Slide 15: Business Intelligence
Business Intelligence 13 1 1 Dots represent a Target areas by socio distributor. Color scales economic segments indicate current week ’s performance vs target sales 2 2 Color scales represent Separated areas to assign the segments’ responsibilities to acquisition power Company’s development managers
Slide 16: Powerful Distribution Network Model
14 Powerful Distribution Network Model Overview Two-Tier Distribution Network 64K Average Distributors Rewards for Distributors ▪ 80% of Distributors place orders every week ▪ Average weekly order ticket of ~US$400 (MXN$8.0K) • 10-16% discount on its Associates’ sales ▪ High tenure 1 Distributor pla
Slide 17: Critical Mass with Significant White Space Potential
Critical Mass with Significant White 15 Space Potential Business is highly Strong distributor and Innovation supports Increased technology New marketing to consistent and easily associate growth in continued expansion in support including web drive increased replicated in new 2020 – paves the way ex
Slide 18: Growth Opportunities
16 Growth Opportunities
Slide 19: Demonstrated Performance in New Markets
Demonstrated Performance in 17 New Markets Growth Roadmap Well-mapped execution Deployment of Detailed geographic Guatemala profitable Possible Expansion to plan focused on new and distributors to cover mapping helps in less than a year, New Markets underpenetrated new zones and spark distributors t
Slide 20: Growth Opportunities
18 Growth Opportunities Organic Inorganic Room to grow: Geographic Expansion: ● Low household penetration (24%). • Identify the right partners to replicate our business ● Low Share of Wallet (20%). model: • Colombia and Peru (2/3 of Mexican market size) Market M&A: potencial ● GuruComm ● Replicate o
Slide 21: New E-Commerce Platform
New E-Commerce Platform 19 Closer Connection to Consumers ▪On December 8th, 2020, Betterware launched its B2C web app platform nationwide ▪E-commerce platform is an additional selling channel and important tool which will: ✓ Attract new customers and enter untapped market segments ✓ Increase Big Dat
Slide 22: New E-Commerce Platform: How it Works
New E-Commerce Platform 20 How it Works 1 Customer makes purchase order 2 App locates 3 Betterware delivers 4 Customer receives the products to the products from through the app or closest Distributor Distributor Distributor website Distributor Distributor Customer Distributors and Associates are al
Slide 23: Betterware Connect
Betterware Connect 21 ▪ On March 22, Betterware acquired 60% of GuruComm with an Enterprise Value od $75M Pesos (approximately $3.5M USD). GuruComm will operate within Betterware, as Betterware Connect. ▪ The acquisition will not be material for Fiscal Year 2021 results, but Betterware expects it to
Slide 24: Asset light Business with High Free Cash Flow Conversion
Asset light Business with High Free Cash 22 Flow Conversion +300 New Products Adjusted Levered Free Cash Flow per Year Capital Expenditures as % of Net Revenues (Ps. Millions) $700 8.5% 9.0% 1400 8.0% $600 1200 5.9% 4.2% 7.0% $500 64% 6.0% 1000 59% 54% 54% $400 800 47% 1,140 1,140 5.0% $300 618 4.0%
Slide 25: Optimized process
New Corporate Headquarter Campus Allows for Increased Efficiencies 23 Optimized process Manufacturing Warehousing Distribution ▪ Betterware has a warehouse facility ▪ Betterware ships to distributors once a where it receives all products imported ▪Betterware’s products are designed and week through
Slide 26: Talented Management Team
24 Talented Management Team LUIS CAMPOS ANDRES CAMPOS DIANA JONES MAURICIO ÁLVAREZ LUIS LOZADA EXECUTIVE CHAIRMAN CHIEF EXECUTIVE OFFICER (CEO) CHIEF FINANCIAL OFFICER (CFO) CHIEF INFORMATION OFFICER CHIEF STRATEGY OFFICER (CSO) (CIO) Mr. Campos has been in the direct- Mr. Campos has been CEO of Dia
Slide 27: Key Investment Highlights
Outstanding Track Record of Consistent Growth 25 Unique Business Model Supported by Three Strategic Pillars: Product Innovation, Technology and Business Intelligence Powerful Distribution Model ● Two-Tier Independent Distributors and Associates ● Compelling Primary or Secondary Income Opportunity Ke
Slide 28: Financial Overview
26 Financial Overview
Slide 29: Strong Growth Continues in 2021
Strong Growth Continues in 2021 27 Third Quarter Fiscal Year 2021 Financial Results Q3 2021 vs. Prior-Year Quarter ($ in Pesos) Q3 2021 Net Revenue $2,361.5 million 4% increase over Q3 2020 $1,328.5 million or 56.3% Q3 2021 Gross Profit 7% increase over Q3 2020 of Revenue $708.4 million or 30.0% Q3
Slide 30: Historical Financial Overview
Historical Financial Overview 28 End of Period Distributors and Net Company Sales Associates (In ‘000s) (Ps. Millions) 1,198 1,223 1,290 9000 1,231 8000 7000 1,162 438 6000 7,858 5000 343 1,139 4000 7,260 213 3000 162 325 417 4,659 2000 201 3,085 152 2,317 1,450 1000 60 59 61 1,063 10 12 18 21 0 201
Slide 31: Historical Financial Overview
Historical Financial Overview 29 Gross Margin and EBITDA Margin2 EBITDA Evolution (Ps. Millions) 2,378 2,164 59.8% 61.5% 58.6% 58.5% 54.7% 56.9% 1,140 1,357 851 408 29.8% 30.3% 27.6% 578 23.6% 24.5% 24.9% 355 251 2016 2017 2018 2019 2020 9M2021 2016 2017 2018 2019 2020 9M20 9M21 Source: Management 1
Slide 32: Commercially Aggressive, but Financially Conservative
30 Commercially Aggressive, but Financially Conservative Stable Gross Margin Prudent Leverage Ratio ▪ Historically, the Company has been able to maintain a ▪ The Company has maintained a prudent and improving stable gross margin despite external shocks, such a Leverage Ratio (Net Debt to EBITDA Rati
Slide 33: Historical Financial Overview (Cont'd)
Historical Financial Overview (Cont’d) 31 Strong Balance Sheet and Cash Generation ▪ Capex requirements are low, estimated CAPEX of Ps. $460M for 2021. 1,140 ▪ Minimal working capital needs with suppliers fully financing the inventory and receivables cycle. 408 ▪ Betterware has a solid balance sheet
Slide 34: Historical Financial Overview (Cont'd)
Historical Financial Overview (Cont’d) 32 Dividends to Shareholders Working Capital1 & Cash Conversion +69% vs 2020 (Ps. Millions) (Ps. Millions) Days of Cash Conversion Cycle 36 69 0 12 -13 -8 -20 -24 -30 1 4.6% -4.3% -3.9% -2.1% -6.9% 1,400 -1000.0% -3000.0% $48.4 -5000.0% 830 -$62.0 -$61.7 -7000.
Slide 35: Investor Relations
33 INVESTOR RELATIONS ir@better.com.mx +52 (33) 3836-0500 investors.betterware.com.mx
Slide 36: Betterware
— Betterware:
Betterware de Mexico — Investor Presentation (November 2021) on 6ix