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| Statement |
|---|
| An EBITDA margin expanded 556 basis points to 24.1% |
| As a group, we have become stronger and more diversified also leveraging our core competitive advantages such as consumer product and direct selling leaders |
| This was reflected in a 5.2% year-on-year net revenue increase with a strengthened profitability, achieving a total of Ps.2,721 million in EBITDA |
| At the midpoint of our initial guidance and exceeding our revised guidance for the year and a strong full-year EBITDA margin of 20.9% |
| Our strong cash flow generation has enabled us to reduce debt and further strengthen our balance sheet |
| Our company’s strong fundamentals, led by a renewed leadership team, will drive accelerated growth and shareholder value |
| The stabilization we are seeing in Mexico's home solutions market, coupled with robust execution of our commercial strategy, enabled a 7% year-over-year increase in Q4 net revenue our first quarter of growth since the third quarter of 2021 |
| Today, we are well positioned for a new era of sustained growth |
| Jafra has surpassed our initial expectations as an acquisition that has proven to be highly accretive, delivering exceptional fourth quarter 2023 EBITDA with a 45.3% year-on-year increase in Mexico and achieving almost breakeven in the U.S |
| Initial implementation of our proven business model's key elements, product innovations, technology, and business intentions has propelled the company back into a growth phase, also with meaningful strategies resulting in cost savings across this business |
| The Jafra team, with the benefit of a strong new leadership, are well positioned for continued future success |
| One of the good things of our business model is that we can streamline expenses very efficiently when we launch a new market |
| Andres has gained a deep understanding of our business over these 11 years with Betterworth, successfully navigating our progress and development, and contributing to our overall success as a strong leader with a strategic vision |
| The beauty market in Mexico and we think we can ride this market growth and also expand our market share |
| Our strong foundation, built through decades as an industry leader led by our revitalized management is a winning formula for success |
| As Luis noted, particularly strong performance in the last quarter of the year drove our full year results |
| We achieved double digit revenue growth and continued our profitability in 2023 with robust cash flow generation that enabled a strengthened capital structure as we entered 2024 as Alejandro will discuss in more detail shortly |
| I am extremely proud of the team's success in returning better work to our growth path during the fourth quarter of 2023 |
| Our focused execution resulted in improvements versus prior year in 7% in net revenue and 17.6% in EBITDA, showcasing our ability to deliver results despite adversity |
| Our execution is stronger and 2023 results demonstrate the focus across the organization to enhance the customer experience |
| What happened in the last quarter with our gross margin in Jafra Mexico, we had a significant improvement in this gross margin, basically because of a favorability in the exchange rate |
| And especially in terms of profitability for Jafra Mexico, we had great impact from an increased gross margin in the fourth quarter, which helped our EBITDA results for the fourth quarter |
| Number two, we saw renewed traction within our three core categories, namely home organization, kitchen products and home improvement through a deepened understanding of our customers’ mindset and evolving needs, also responding to the ever shifting environment |
| We are launching further innovation and market activation to capture the compelling, long term growth opportunities in the market we serve, leveraging our unique ability to analyze the extensive data we received through multiple channels |
| Number three, price decreases implemented in September 2023 reflecting an improved exchange rate environment and moderating freight rate conditions, resulted in positive traction throughout the year with a positive spike in volumes sold by year end |
| Number four, we are seeing a strong positive results from training and incentivizing the onsite field staff, we began reintegrating in February 2023, also from mentoring our distributors to improve their businesses and accompanying them on their routes |
| And then it helps, we did the price decrease in September, which kind of helped all the strategies to start streamlining up again and have a great quarter for Betterware Mexico |
| Importantly, this resulted in stronger activity rates and increased average monthly orders |
| So, we think that we can be very successful in that market during the first years |
| And they speak about our great opportunity to grow going forward |
| Statement |
|---|
| This decline was mainly due to margin contraction in Betterware explained by unfavorable sales mix |
| While we began the year with operating challenges and declining revenue, we made swift decisions to recalibrate this business and correct our revenue levels in the second half of the year |
| As I mentioned earlier, we are going to be distributing off Jafra’s distribution center the excess capacity that we have there |
| It is important to note that during the pandemic, after the huge market growth then came a very steep decline |
| However, it is important to note that despite the year's headwinds within our U.S |
| Outstanding net revenue growth in JAFRA Mexico was partially offset by the decline of net revenue in Betterware due to lower average distributors and associate base and net revenue decline in JAFRA US |
| Consolidated gross margin was roughly in line with fourth quarter 2022 decreasing 48 basis points to 70% |
| We also had a reduced cost achieved through supplier negotiations with specific vendors, and that impacted almost 2% of points for gross margin |
| So we saw significant impact of our commercial strategies in Betterware Mexico |
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