Betterware de Mexico announced its fourth quarter and fiscal year 2021 results, posting a 2021 net revenue growth of 41% year-over-year, and EBITDA growth of 33% year-over-year. Gross margin in 2021 was 56.2%, while EBITDA margin was 27.9%.
“Betterware achieved extraordinary growth from 1Q 2020 to 1Q 2021, mainly driven by our increase in our average associates and distributors base of 183%,” said Luis G. Campos, Executive Chairman of the Board. “This translated into exceptional performance in net revenue and EBITDA. While it was quite a positive result, it turned comparisons with respect to 2020 challenging. Despite a much higher base, 2Q 2021 and 3Q 2021 showed strong YoY growth and traction in net revenues, of 81% and 4% respectively. As for 4Q 2021, on top of the harder comparison base, our business was impacted by a sluggish consumer in Mexico and by external factors related to supply chain disruptions prevailing globally, which resulted in a decline in net revenues and EBITDA for the quarter.”
At the end of the third quarter of 2021, the company’s analytics made it clear that supply chain disruptions could create negative financial impacts. As a result, Betterware enacted a 12% increase in prices to offset cost pressure, increased the share of lower-price items, and increased focus on recruitment and retention of distributors. The company also took operational actions, like signing shipping contracts with more favorable rates, accelerating domestic manufacturing plans, and achieving operational efficiency, as proactive measures against these cost pressures.
“We start 2022 with a strengthened network of distributors and associates, confident of Betterware´s profitable growth in the years to come, which will lead us to reach our target of 40% household penetration in Mexico by 2025,” Campos said. “Aligned to our long-term agenda, the compelling acquisition of JAFRA, a world leading brand of direct selling in the Beauty and Personal Care (B&PC) products industry with a strong presence in Mexico and the United States, announced last month, will contribute towards product diversification, our international expansion strategy, acceleration of profit growth, and acceleration of our digital transformation, while maintaining a low leverage ratio. For Betterware the best is yet to come.”
The company maintains a strong balance sheet and cash flow, with conservative net debt to EBITDA ratio, low total debt to total assets and a negative cash conversation cycle.