• Mexico is the 7th largest direct-to-consumer market with ~US$ 6bn annual revenue, and
~5% annual growth.
• Well suited to Mexico’s geographic, demographic and economic dynamics:
i) small communities scattered across the country, low retail penetration and unique last mile logistics
ii) emerging middle-income consumers
iii) high consumer confidence.
• Resilient to external economic adversities given low average sales price to consumers and sources of income for sales reps.
Clear Strategy Differentiation
• Full control on its ~400k distributors and associates network, backed by a robust
market intelligence unit that tracks daily performance and target budgets.
• New product development drives repeat purchase rate.
• Big data analytics and market research provides constant support to management.
Outstanding Financial Performance
• 2015-’18 CAGR in Net Company Sales and EBITDA of 37% and 41% in USD terms, respectively.
• Well-above industry margins with a ̴60% gross margin and ̴27% EBITDA margin in 2018.
• Asset-light structure with minimal capex requirements, yields FCF conversion of ̴62%1.
• Strong balance sheet with positive working capital and low leverage levels at 0.8x2.
1. As a % of EBITDA in 2020P
2. Net Debt to EBITDA Ratio as of June 2019
Considerable Growth and Efficiency Opportunities
• Well-identified underserved market segments to support Betterware’s continuous double-digit growth.
• Potential to enhance balance sheet flexibility by financing new campus, inorganic growth, or refinance debt.
• Further investment in digital transformation to accelerate growth.
• Replicable and scalable model to other LatAm markets, both organically and through add-on acquisitions.
Attractive Valuation and Transaction
• Considerable EV/2019P EBITDA discount to direct-to-consumer peers, significantly enriched when adjusted
• FCF yield of 9.0% in 2020P vs peers average of 6.0%, in addition to double-digit EBITDA growth.
• Existing Betterware shareholders to remain as operating owners of ~80%3 of the consolidated business after closing the transaction.
3. Assuming no redemptions from trust account