Betterware De Mexico, S.a.p.i. De C.v. · NYSE:BWMX
Betterware De Mexico, S.a.p.i. De C.v — Merger or Acquisition (January 2022)
28 slides from Betterware De Mexico, S.a.p.i. De C.v's merger presentation, Jan 18, 2022
Slide 1: Investor Presentation
INVESTOR PRESENTATION January 2022
Slide 2: Disclaimer
Disclaimer Forward Looking Statement Disclaimer Statements contained in this presentation that are not historical and reflect our views about future periods and events, including our future performance, constitute “forward-looking statements” within the meaning of the Private Securities Litigation R
Slide 3: Agenda
Agenda 1. Acquisition Summary 2. Overview of JAFRA 3. Strategic Rationale 4. Sources and Uses 5. Closing Remarks 6. Appendix 3
Slide 4: Acquisition Summary
JAFRA ROYAL Jarra REVITALIZE CLEANSING Mie (GEL FACIAL CWPIabOR REVITALIZE REVITALIZE venus eresine 7330 onoevy ay | q | | Jira rau INTRA pore pie R ee : 2 — Acquisition Summary Bétterware |JAFRA 4
Slide 5: Betterware Acquisition of JAFRA
Betterware Acquisition of JAFRA Betterware to acquire JAFRA Cosmetics business in Mexico and the US, expanding its product offering, distribution channel and geographic presence JAFRA is a worldwide brand and leader in the beauty and personal care products 5
Slide 6: Strategic Rationale to Create a Multi-channel Group Through Unique Brands
Strategic Rationale to Create a Multi-channel Group Through Unique Brands Entry to Attractive and Growing B&PC Industry of ~US$100bn (Mexico + US) 1 Acquisition of a world leading and renowned brand of direct selling in the beauty and personal care products industry with important presence in Mexico
Slide 7: Transaction Summary
Transaction Summary ▪ Betterware to acquire of 100% of JAFRA’s businesses in Mexico and US for a total cash offer price of US$255mm, equivalent to Ps.5,355mm1, considering cash-free and debt-free balance at closing Acquisition Summary ▪ JAFRA is one of the world’s leading direct sellers of high-qual
Slide 8: Overview of JAFRA
JAFRA UNA BRIGHT ROYAL ROYAL Be cerns 4 f "GEL CLEANSER 5 : GEL LIMPIADOR LUNA BRIGHT = IFICANTE CON a feo ACLARADOR t LUNA BRIGHT oS ehoaD SpecraGm =r 50 hi | ORGHTENING romper olstoazee x ieoeyed erEcro AcLARAOO* } | = ol | Overview of JAFRA Bétterware JAFRA 8
Slide 9: JAFRA at a Glance
JAFRA at a Glance Revenue of Ps.5,754mm Experienced 2021 revenues of Ps.4,493mm Management team with deep in Mexico and of Ps.1,261mm in knowledge of the B&PC the US industry in Mexico and the US +2.5 million followers ~448k consultants1 Hashtags mentioning JAFRA Brand ambassadors with direct surpas
Slide 10: Product Portfolio
Product Portfolio Fragrance Color & Cosmetics ▪ JAFRA is the #1 fragrance player in Mexico 62% ▪ The JAFRA Color portfolio addresses the needs and aspirations of a diverse customer base 14% ▪ The JAFRA Fragrance portfolio consists of over 90 high-quality fragrances for women, men, ▪ Two distinctive
Slide 11: Business Model
Business Model Overview Distribution Network JAFRA is vertically integrated, with an end-to-end operation encompassing product development, R&D, manufacturing and distribution 1 Identification of trends and opportunities based on market and consumer data Leader 2 Creation of initial concept Product
Slide 12: Financials
Financials Consultants (Average)1 Net Revenues (Ps.mm) Mexico USA Mexico USA 504,520 500,719 5,833 5,973 5,917 5,754 467,796 448,071 34,694 38,297 40,460 966 1,101 1,223 40,933 1,261 469,826 462,421 427,337 407,138 4,867 4,873 4,694 4,493 2018A 2019A 2020A 2021A 2018A 2019A 2020A 2021A Gross Profit
Slide 13: Strategic Rationale
Strategic Rationale 13
Slide 14: Strategic Rationale Overview
Strategic Rationale Overview Creating a multi-channel group through unique brands targeting different consumer profiles and distribution channels in Mexico and US With 65+ years of experience in the direct selling of beauty and personal care (B&PC) products, JAFRA is a well positioned international
Slide 15: Leading Brand in The Attractive Beauty & Personal Care Market
Leading Brand in The Attractive Beauty & Personal Care Market JAFRA Brands and Intellectual Property B&PC Players Ranking1 ▪ JAFRA’s main trademark is registered in more than 70 countries including all current markets and all relevant markets for potential global expansion Mexico Market ▪ JAFRA main
Slide 16: JAFRA to support Betterware's US expansion
JAFRA to support Betterware’s US expansion Top focus of Betterware will be grow in the US, specifically in California and Texas Acquisition will accelerate Betterware’s international expansion to the US Betterware to leverage JAFRA’s current operations in the US to overcome entry barriers 1 Founded
Slide 17: Replicate Betterware's Three Strategic Pillars
Replicate Betterware’s Three Strategic Pillars Reinforce JAFRA’s business model and growth with Betterware’s Three Strategic Pillars Product Innovation Technology Business Intelligence Prioritize product innovation to meet target Provide its own mobile app tool to JAFRA’s Map JAFRA’s consultants acr
Slide 18: Technology and Digital Transformation for E-commerce
Technology and Digital Transformation for E-commerce JAFRA to leverage Betterware’s Mobile App and B2C Digital Platform in the US since most of the Direct Selling business model is carried via E-commerce in the region BetterNet Mobile App B2C Digital Platform Competitive Advantage Rewards for Associ
Slide 19: Potential Cost Synergies and Efficiencies
Potential Cost Synergies and Efficiencies Entry multiple of ~5.5x EBITDA 2022E does not consider identified cost synergies and efficiencies of US$5mm to US$10mm Client Service Corporate Third Party Cash Conversion Distribution and Centers Structure Providers Cycle Logistics Considering the mid point
Slide 20: Sources and Uses
Sources and Uses Bétterware'|JAFRA 20
Slide 21: Sources & Uses
Sources & Uses Acquisition Funding Details Sources & Uses ▪ Purchase price of US$255mm, equivalent to Ps.5,355mm, considering an excess cash-free, debt-free balance at closing and normal levels of working capital Sources US$mm % Purchase Price ▪ Valuation multiple of 5.5x EBITDA 2022E without consid
Slide 22: Leverage Impact
Leverage Impact Transaction considers the acquisition of JAFRA with additional debt of US$225mm Financial Debt Outstanding Figures in US$mm 225 296 71 No Financial Debt Outstanding Betterware JAFRA Acquisition Acquisition Total Debt Debt Financing Proforma Total Debt / EBITDA 2022E = ~1.4x 22
Slide 23: Closing Remarks
Closing Remarks Bétterware'|JAFRA 23
Slide 24: Closing Remarks
Closing Remarks 1 Accelerate JAFRA’s growth by integrating Betterware’s best practices Accretive transaction on day one, fully financed with debt and JAFRA’s 2 EBITDA covering ~2.8x acquisition debt’s interest payment 3 Refocus Betterware’s international expansion primarily in the US 24
Slide 25: Appendix
Appendix Bétterware'|JAFRA 25
Slide 26: Financially Compelling Acquisition
Financially Compelling Acquisition JAFRA’s Financial Profile Cost Synergies and Efficiencies Cashflow Working Capital Strong cashflow generation resulting from high cash conversion Improving inventory management, incentivizing receivables and negotiating better payment terms with suppliers and distr
Slide 27: Mexico Beauty & Personal Care Market
Mexico Beauty & Personal Care Market Market Outlook Sales of B&PC (US$bn) ▪ As the economy recovers from the COVID-19 pandemic, B&PC retains significant room ▪ In Mexico, B&PC spend growth has outpaced GDP per capita growth 10 out of the last for growth 14 years, resulting to be considered a growing
Slide 28: USA Beauty & Personal Care Market
USA Beauty & Personal Care Market Market Outlook Sales of B&PC (US$bn) ▪ COVID-19 pandemic halted years of modest growth in the US B&PC industry, resulting ▪ B&PC sales registered a CAGR ‘15A – ’20A of 2.1% in declines for the first time since 2009 In 2020, JAFRA represented ~0.1% of US’ Total B&PC
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