Betterware de Mexico SAPI de CV (BWMX) 2023 Q4 法說會逐字稿

Good morning, welcome to Betterware Fourth Quarter 2023 earnings conference call. Joining us today are the leadership team members, Executive Chairman, Luis Campos, Chief Executive Officer, Andres Campos, and Corporate Chief Financial Officer. Alejandro Ulloa.

早上好，歡迎參加 Betterware 2023 年第四季財報電話會議。今天加入我們的有領導團隊成員、執行主席路易斯·坎波斯 (Luis Campos)、執行長安德烈斯·坎波斯 (Andres Campos) 和公司財務長。亞歷杭德羅·烏略亞.

Before we begin, I would like to remind you that the call will include forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations and any such statements should be considered in conjunction with cautionary statements and the Safe Harbor statement in the earnings release and risk factors discussed in reports filed with the SEC that aware assumes no obligation to update any of these forward-looking statements or information.

在我們開始之前，我想提醒您，電話會議將包含前瞻性陳述，這些陳述受到各種風險和不確定性的影響，可能導致實際結果與預期存在重大差異，任何此類陳述應與警示性陳述一起考慮以及收益發布中的安全港聲明以及向美國證券交易委員會提交的報告中討論的風險因素，aware 不承擔更新任何這些前瞻性聲明或資訊的義務。

A reconciliation and other information regarding non-GAAP financial member measures discussed on the call can be found in our earnings release issued yesterday as well as in the Investors section of the company's website.

有關電話會議中討論的非公認會計準則財務成員措施的調節表和其他信息，請參閱我們昨天發布的收益報告以及公司網站的投資者部分。

I would now like to turn call over to the company's Executive Chairman, Luis Campos. Please proceed.

我現在想將電話轉給公司執行主席路易斯·坎波斯。請繼續。

Thank you, operator, and good morning, everyone. 2023 has been a transformative year for Betterware. As a growth, we've had become a stronger and more diversified, also leveraging our core competitive advantages, such a consumer product and value of selling legal. This was reflected in a 5.2% year-on-year net revenue increase with the strength in profitability, achieving a total of MXN2,721 million in EBITDA.

謝謝接線員，大家早安。 2023 年對 Betterware 來說是變革的一年。隨著成長，我們變得更加強大和更加多元化，同時也利用了我們的核心競爭優勢，例如消費產品和合法銷售的價值。這體現在淨利潤年增 5.2%，獲利能力強勁，EBITDA 總計達到 27.21 億墨西哥比索。

At the midpoint of our initial guidance and exceeding our revised guidance for the year, on their 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.

他們的全年 EBITDA 利潤率高達 20.9%，處於我們最初指導方針的中點，並且超過了我們今年修訂後的指導方針。我們強勁的現金流量使我們能夠減少債務並進一步加強我們的資產負債表。

I would like to comment the entire vector of our Mexico team for their success in navigating challenging post pandemic statements. The stabilization we are seeing in Mexico 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.

我想對我們墨西哥團隊的整個團隊發表評論，感謝他們在應對大流行後充滿挑戰的聲明方面所取得的成功。我們在墨西哥家庭解決方案市場看到的穩定，加上我們商業策略的強勁執行，使第四季淨收入年增了 7%。自 2021 年第三季以來，我們的第一季實現了成長。今天，我們已準備好迎接持續成長的新時代。

I would also like to express my appreciation toBetterware our JAFRA team. JAFRA also passed 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 on achieving almost break-even in the US.

我也要向 Betterware 我們的 JAFRA 團隊表示感謝。JAFRA 也超出了我們最初的預期，事實證明這是一項具有高度增值性的收購。2023 年第四季 EBITDA 表現出色，墨西哥業務年增 45.3%，而美國業務幾乎達到收支平衡。

Initial implementation of our proven business models, key elements, product innovations, technology and business intelligence has to pull the company back into a growth phase, also with meaningful strategies resulting in cost savings across these businesses. The JAFRA team with the benefit of a strong new leadership are well positioned for continued future success. As Alejandro will discuss in more detail shortly, the Group's fourth quarter 2023 net revenue represents a 44% CAGR since the fourth quarter 2019, representing an increase to MXN3,402 million from MXN791 million for the same period in 2019.

我們經過驗證的商業模式、關鍵要素、產品創新、技術和商業智慧的初步實施必須將公司拉回成長階段，同時制定有意義的策略，從而節省這些業務的成本。由於強大的新領導層，JAFRA 團隊已做好充分準備，在未來繼續取得成功。正如Alejandro 稍後將更詳細討論的那樣，該集團2023 年第四季的淨收入自2019 年第四季以來複合年增長率為44%，從2019 年同期的7.91 億墨西哥比索增加至34.02 億墨西哥比索。

Therefore, while our Betterware business achieved a 17% [CAGR], the remaining CAGR, which leads our JAFRA acquisition. Among these and the auto milestones we will discuss today. We were pleased to announce in January that Andres has assumed the position of better work group CEO, which includes a Betterware and JAFRA brands in Mexico and abroad. Andres, has to gain a deep understanding of our business over these 11 years with Betterware, successfully navigating our progress on development and contributing to our overall success as a strong leader with a strategic vision.

因此，雖然我們的 Betterware 業務實現了 17% [複合年增長率]，但剩餘的複合年增長率則領先於我們對 JAFRA 的收購。其中包括我們今天將討論的汽車里程碑。我們在一月份很高興地宣布，Andres 已擔任 Better Work 集團首席執行官，該集團包括墨西哥和海外的 Betterware 和 JAFRA 品牌。Andres 先生在 Betterware 的這 11 年裡必須對我們的業務有深入的了解，成功地引導我們的發展進程，並為我們作為具有戰略願景的強大領導者的整體成功做出貢獻。

I look forward to my continued involvement in our company's accomplishments, and I am confident in our promising path ahead. Our strong foundation built through decades as an industry leader led by our verticalized management is a winning formula for success.

我期待著繼續參與我們公司的成就，並對我們充滿希望的未來道路充滿信心。幾十年來，我們作為產業領導者在垂直化管理的領導下建立了堅實的基礎，這是成功的致勝法寶。

With that, let me pass our compensation to Andres, and I will return for some brief closing remarks.

接下來，讓我將我們的補償轉達給安德烈斯，然後我會回來發表一些簡短的結束語。

Thank you, Luis, and good morning to everyone. 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 enables a strengthened capital structure as we enter 2024, as Alejandro will discuss in more detail shortly.

謝謝你，路易斯，祝大家早安。正如路易斯指出的那樣，今年最後一個季度的強勁表現推動了我們的全年業績。我們實現了兩位數的營收成長，並在 2023 年繼續獲利。正如 Alejandro 稍後將更詳細討論的那樣，隨著我們進入 2024 年，強勁的現金流生成可以增強資本結構。

I am extremely proud of the team's success in returning better work to our growth path during the fourth quarter of 2023. I will focus on 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.

我對團隊在 2023 年第四季成功地將更好的工作帶回我們的成長道路感到非常自豪。我將重點放在與去年相比，淨收入提高 7%，EBITDA 提高 17.6% 的執行力，這展示了我們在逆境中交付成果的能力。

Our execution is stronger and 2023 results demonstrate the focus across the organization to enhance the customer experience. I would like to highlight some relevant accomplishments, which enabled our success. Number one, we launched three new categories throughout the years, Wellness, Kids and Pets. Wellness showed outstanding success, and we can modify kids and pets to maintain the most effective concept.

我們的執行力更強，2023 年的業績顯示整個組織都致力於增強客戶體驗。我想強調一些使我們成功的相關成就。第一，我們多年來推出了三個新類別：健康、兒童和寵物。健康方面取得了顯著的成功，我們可以改變孩子和寵物以保持最有效的觀念。

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.

第二，透過深入了解客戶的心態和不斷變化的需求，並應對不斷變化的環境，我們在三個核心類別（即家居整理、廚房產品和家居裝修）中看到了新的吸引力。

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.

我們正在發起進一步的創新和市場激活，以抓住我們所服務的市場中引人注目的長期成長機會。利用我們獨特的能力來分析透過多個管道收到的大量數據。

Number three, price decreases implemented in September of 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.

第三，2023 年 9 月實施的降價反映了匯率環境的改善和運費條件的緩和，從而在全年產生了積極的牽引力，年底銷量大幅增長。

Number four, we are seeing a strong positive results from training and incentivizing the on-site field staff. We began reintegrating in February 2023, also from mentoring our distributors to improve their businesses and accompanying them on their routes.

第四，我們看到培訓和激勵現場工作人員取得了積極的成果。我們於 2023 年 2 月開始重新整合，同樣是指導我們的經銷商改善他們的業務並陪伴他們完成他們的路線。

Number five, we have continued to strengthen our better workflows app through the launch of more than five new functions throughout the year. Importantly, this resulted in stronger activity rates and increased average monthly orders. This is normally driven by an increase in our associate base. However, this did not happen in 2023, meaning the average order per associate is increasing. This will result in a reactivation in the ground of the associate base growth going forward.

第五，我們透過全年推出超過五個新功能，繼續增強我們更好的工作流程應用程式。重要的是，這導致了更高的活動率和平均每月訂單的增加。這通常是由我們員工人數的增加所推動的。然而，這種情況在 2023 年並沒有發生，這意味著每位員工的平均訂單量正在增加。這將導致未來聯營基礎成長的基礎重新激活。

Betterwares's strong commercial strategy enables us to reach more homes and increase our share of wallet. Today, we have 25% total home penetration in Mexico and then estimated 4% market share, representing a significant growth opportunity, which we are actively pursuing. I am confident that with some [PROs] new leadership, which we also announced in January that were Mexico's team is poised for success going forward.

Betterwares 強大的商業策略使我們能夠覆蓋更多家庭並增加我們的錢包份額。如今，我們在墨西哥的家庭總滲透率為 25%，預計市場佔有率為 4%，這是我們積極追求的重大成長機會。我相信，在一些[PRO]新的領導層的帶領下，我們在一月也宣布了墨西哥隊將在未來取得成功。

Turning to JAFRA Mexico, we gradually implemented key elements of our Betterware succes formula into April 2022 acquisition. Combined with a strong management team, this resulted in a double digit growth in 2023.

談到 JAFRA 墨西哥，我們在 2022 年 4 月的收購中逐步實施了 Betterware 成功公式的關鍵要素。加上強大的管理團隊，2023 年實現了兩位數的成長。

Importantly, this is the second consecutive year of growth for JAFRA Mexico, contracting a single digit year on year increase in 2022 compared to 2021. The team has been laser focused on our four operational success pillars, which during the year resulted in. Number one, accelerated innovation, representing 15% of 2023 net revenue from only 6% in 2022.

重要的是，這是 JAFRA 墨西哥公司連續第二年實現成長，與 2021 年相比，2022 年年增幅僅為個位數。團隊一直專注於我們的四大營運成功支柱，並在這一年中取得了成果。第一，加速創新，佔 2023 年淨收入的 15%，而 2022 年僅為 6%。

Number two continued growth in fragrances, our main category also with the launch of very successful lines of brand extensions during the year. Number three, increased customer conversion rate resulting from an improved catalog graphic design Mercantile, which made our catalogs more enticing. Number four, increased consultant acquisition through small targeted and impactful incentive program adjustments. Number five, each in doing business for our leaders and consultants through the inaugural launch of our sales force app, which we will continue to improve upon based on the team's feedback.

第二，我們的主要品類香水持續成長，年內推出了非常成功的品牌延伸系列。第三，改進的 Mercantile 目錄圖形設計提高了客戶轉換率，這使我們的目錄更具吸引力。第四，透過小規模、有針對性和有影響力的激勵計畫調整來增加顧問的招募。第五，透過首次推出銷售團隊應用程序，為我們的領導者和顧問開展業務，我們將根據團隊的回饋繼續改進該應用程式。

And last but not least, number six, improved more efficient interaction with our leaders and consultants through our newly launched chat bot, enabling us to expand our consultant base reflected in 2.5% year-on-year increase for the fourth quarter 2023.

最後但並非最不重要的第六點是，透過新推出的聊天機器人提高了與領導者和顧問的更有效互動，使我們能夠擴大顧問基礎，2023 年第四季度同比增長 2.5%。

Going forward, the JAFRA Mexico team is well positioned to continue to capture the vast opportunity in the Mexico drilling market, and importantly, expand our 12% market share to become the number one direct sales beauty brand in Mexico. Continued execution of our four pillars will enable our success.

展望未來，JAFRA 墨西哥團隊已做好充分準備，繼續抓住墨西哥鑽探市場的巨大機遇，更重要的是，擴大我們 12% 的市場份額，成為墨西哥第一大直銷美容品牌。繼續執行我們的四大支柱將使我們取得成功。

Finally, turning to our international operations. '23 was an important year for JAFRA, US. While we began the year with operating challenges and declining revenue, we made swift decisions to recalibrate these deployments and correct our revenue levels in the second half of the year. We remain focused on reigniting our growth to gain market share within the sizable US beauty space.

最後，轉向我們的國際業務。 23 年對美國 JAFRA 來說是重要的一年。儘管我們在年初面臨營運挑戰和收入下降，但我們迅速做出決定，重新調整這些部署並糾正下半年的收入水平。我們仍然專注於重振成長，以在美國龐大的美容領域獲得市場份額。

However, it is important to note that despite the year's headwinds within our US operation, we successfully streamlined expenses for our return to profitability, achieving our most profitable quarter in the fourth quarter since acquiring JAFRA. However, we are well positioned to launch Betterware's US operation in the second quarter of 2024.

然而，值得注意的是，儘管我們美國業務今年遇到了阻力，但我們成功地精簡了開支以恢復盈利，並在第四季度實現了自收購 JAFRA 以來盈利最高的季度。不過，我們已做好充分準備，可以在 2024 年第二季啟動 Betterware 的美國業務。

I would like to take this opportunity to announce that we have recently hired our new CEO to lead Betterware US. [Diego saso] has considerable US consumer product experience with companies including Procter & Gamble and Hershey, which one lesson doing better was the brand experience and proven business model should result in continued success.

我想藉此機會宣布，我們最近聘請了新任執行長來領導 Betterware US。 [Diego saso] 在寶潔和好時等公司擁有豐富的美國消費產品經驗，做得更好的一個教訓是品牌經驗和經過驗證的商業模式應該會帶來持續的成功。

Our planned investment for the initial launch phase Betterware US operations is between $5 million to $7 million in the first year and do not expect a meaningful contribution in the 1st year of operations. Our focus will be on the Hispanic market comprised of $16 million people, representing USD3.4 trillion in estimated GDP making it the world's fifth largest economy and doubled the size of Mexico according to the Latino buffer collaborative time.

我們計劃在第一年對 Betterware 美國業務的初始啟動階段投資 500 萬至 700 萬美元，預計在營運的第一年不會做出有意義的貢獻。我們的重點將放在由1,600 萬美元人口組成的西班牙裔市場上，預計GDP 達3.4 兆美元，使其成為世界第五大經濟體，並且根據拉丁裔緩衝協作時間，其規模是墨西哥的兩倍。

Finally, we made further progress toward our launch of Betterware, Peru, carrying our general manager, let's say, [August] or who has more than 15 years of experience in the Peruvian and Latin American direct-selling industry. We look forward to sharing further updates as they unfold.

最後，我們在秘魯設立 Betterware 方面取得了進一步的進展，我們的總經理（假設是 [August]）或在秘魯和拉丁美洲直銷行業擁有超過 15 年的經驗。我們期待分享進一步的更新。

Let me now pass the call to Alejandro, who will review our financials in more detail.

現在讓我把電話轉給亞歷杭德羅，他將更詳細地審查我們的財務狀況。

Thank you, Andres, and good morning, everyone. I would like to review our fourth quarter and fiscal year 2023 results by venture perspectives on how we are approaching '24 and discuss our capital allocation strategy going forward.

謝謝你，安德烈斯，大家早安。我想從創投的角度回顧我們第四季和 2023 財年的業績，了解我們如何迎接 24 世紀，並討論我們未來的資本配置策略。

Please keep in mind that the currency. I will refer to when reviewing our results and guidance through the Mexican peso, which is our functional and reporting currency. Additional details can be reviewed in our earnings release published yesterday. by investor perspectives on how we are approaching 2024 and discuss our capital allocation strategy going forward.

請記住貨幣。我將在審查我們的結果和指導時參考墨西哥比索，這是我們的功能和報告貨幣。其他詳細資訊可以在我們昨天發布的收益報告中查看。從投資者的角度了解我們如何邁向 2024 年，並討論我們未來的資本配置策略。

Our consolidated results for the quarter are the following. Consolidated net revenue increased 5.2% compared to fourth quarter of 2022, supported by positive performance of our two brands in Mexico, partially offset by a revenue decline in JAFRA units. It is relevant to highlight the Betterware's net revenue grew 7% compared to fourth quarter of 2022, the first quarter of the year-over-year growth since Q3 2021.

我們本季的綜合業績如下。與 2022 年第四季相比，合併淨收入成長了 5.2%，這得益於我們兩個品牌在墨西哥的積極業績，但部分被 JAFRA 部門收入下降所抵消。值得一提的是，Betterware 的淨收入與 2022 年第四季相比成長了 7%，這是自 2021 年第三季以來的第一季同比增長。

Consolidated gross margin was roughly in line with fourth quarter 2022, decreasing 48 basis points to 7%. This decline was mainly due to margin contraction in Betterware explained by unfavorable sales mix. In particular, promotions accounted for a larger share of sales than the fourth quarter of 2022. However, this was mostly offset by margin expansion JAFRA Mexico, driven by favorable exchange rates, reduced costs from supplier negotiations and favorable sales mix.

綜合毛利率與 2022 年第四季大致持平，下降 48 個基點至 7%。這一下降主要是由於銷售組合不利導致 Betterware 的利潤率下降。特別是，促銷活動在銷售額中所佔的份額比 2022 年第四季更大。然而，這主要被有利的匯率、供應商談判成本降低和有利的銷售組合推動的 JAFRA Mexico 利潤率擴張所抵消。

Consolidated EBITDA for the quarter, we were 36.7% to MXN819.5 million, compared to MXN599.3 million in the fourth quarter of 2022. And EBITDA margin expanded 556 basis points to 24.1%. Profitability improvements in multiple subsidiaries were achieved through successful efforts in expense optimization, allowing us to exceed our EPS expectations for the quarter. Consolidated net income was MXN406.1 million, 62.5% higher than in fourth quarter '22, mostly explained by net revenue growth and an increase in operating leverage, which allowed us to increase our earnings to MXN10.9 per share.

本季綜合 EBITDA 成長 36.7%，達到 8.195 億墨西哥比索，而 2022 年第四季為 5.993 億墨西哥比索。EBITDA 利潤率擴大 556 個基點，達到 24.1%。透過費用優化的成功努力，多個子公司的獲利能力得到提高，使我們超出了本季的每股盈餘預期。合併淨利潤為 4.061 億墨西哥比索，比 2022 年第四季成長 62.5%，主要原因是淨收入成長和營運槓桿增加，這使我們能夠將每股收益提高到 10.9 墨西哥比索。

And for the year, consolidated net revenue increased 13.1% compared to 2022 explained by the consolidation of JAFRA can results for the full period this year compared to almost three quarters during 2022. Outstanding net revenue growth in JAFRA, Mexico was partially offset by the decline of net revenues in Betterware due to lower average industry returns and associate base and net revenue decline in JAFRA US.

今年，合併淨收入比 2022 年增長了 13.1%，原因是 JAFRA 合併了今年整個期間的業績，而 2022 年幾乎是三個季度。墨西哥 JAFRA 淨收入的出色成長被 Betterware 淨收入下降所部分抵消，該下降是由於平均行業回報率較低以及 JAFRA US 的員工基礎和淨收入下降所致。

Gross margin for the year expanded 265 basis points to 71.5%, compared to 68.9% in 2022. Boosted by JAFRA's higher gross margin profile included in our results for the whole year 2003, which was partially offset by gross margin contraction in Betterware due to unfavorable sales mix during the last quarter of the year.

全年毛利率成長 265 個基點至 71.5%，而 2022 年為 68.9%。我們 2003 年全年業績中包含了 JAFRA 較高的毛利率，但由於該年最後一個季度不利的銷售組合，Betterware 的毛利率下降部分抵消了這一影響。

Consolidated EBITDA for 2023 was MXN2,721 million, 17.5% higher than 2022 and exceeding our previous full year guidance. EBITDA margin expanded 79 basis points to 20.1% due to the positive performance in our two subsidiaries, driven by efficient expense control, leading to margin expansion in all our subsidiaries and closing near break-even profitability in JAFRA US.

2023 年綜合 EBITDA 為 27.21 億墨西哥比索，比 2022 年成長 17.5%，超過我們先前的全年指引。由於我們兩家子公司的積極業績，在有效的費用控制的推動下，EBITDA 利潤率擴大了79 個基點，達到20.1%，導致我們所有子公司的利潤率擴大，並在JAFRA US 實現接近收支平衡的獲利能力。

Consolidated net income increased 20.3% to MXN1,049.5 million, driven by higher operating leverage, offsetting the effect of higher interest rates on our debt. Earnings per share for the year was MXN28.2. And finally, our free cash flow generation for the year defined as operating cash flow minus CapEx increased 79.6% attributed to 67.9% increase in operating cash flow from [EBITDA] increase. In the turnover improvement in local businesses and improve payment conditions with suppliers in JAFRA, couple with lower CapEx investments.

在營運槓桿上升的推動下，合併淨利潤增加了 20.3%，達到 10.495 億墨西哥比索，抵消了利率上升對我們債務的影響。本年度每股收益為 28.2 墨西哥比索。最後，我們今年的自由現金流量（定義為營運現金流量減去資本支出）增加了 79.6%，這歸因於 [EBITDA] 成長帶來的營運現金流量增加了 67.9%。當地企業的營業額得到改善，JAFRA 供應商的付款條件也得到改善，資本支出投資也隨之降低。

As for volume sheet, the company's financial position continues to improve as we reduce our total net debt by 11.9% during the year, closing 2023 with a net debt to EBITDA ratio of 1.8 times compared to 2.5 times at the end of previous year.

就數量表而言，公司的財務狀況持續改善，年內淨負債總額減少了 11.9%，截至 2023 年，淨負債與 EBITDA 的比率為 1.8 倍，而上年末為 2.5 倍。

As we have previously stated, while we are now comfortable with our conservative balance sheet, we will continue to use most of our operating cash flow to improve our financial position, aiming to bring our net debt to EBITDA ratio to approximately 1.5 times during 2024. Having said that, I'm highlighting the confidence we have in our growth prospects. Our Board of Directors has proposed a dividend payment of MXN250 million for the quarter, which is subject to the approval at the ordinary game of shareholders' meeting to be held on March 6, 2024.

正如我們之前所說，雖然我們現在對保守的資產負債表感到滿意，但我們將繼續使用大部分營運現金流來改善我們的財務狀況，目標是在2024 年將淨債務與EBITDA 的比率提高到約1.5 倍。話雖如此，我強調我們對成長前景充滿信心。我們的董事會已提議支付本季股利 2.5 億墨西哥比索，該股利須經 2024 年 3 月 6 日舉行的普通股東大會批准。

We remain committed to returning value to even shareholders over the long term. We are confident and optimistic about the results achieved so far and the opportunities that lay ahead of us.

我們仍致力於長期為股東回報價值。我們對迄今為止所取得的成果以及擺在我們面前的機會充滿信心和樂觀。

For the full year 2024, we expect our consolidated net revenue to be in the range of MXN13,800 million to MXN14,400 million and our consolidated EBITDA to be in the range of MXN2,900 million to MXN3,100 million. Over the long term, we remain confident in our ability to seize growth opportunities, which will allow us to continue to generate strong cash flows and maximize shareholders' value.

對於 2024 年全年，我們預計合併淨收入將在 138 億墨西哥比索至 144 億墨西哥比索之間，合併 EBITDA 將在 29 億墨西哥比索至 31 億墨西哥比索之間。從長遠來看，我們對抓住成長機會的能力仍然充滿信心，這將使我們能夠繼續產生強勁的現金流並最大化股東價值。

I will now turn the call over to the operator and we will take any questions you may have.

我現在將把電話轉給接線員，我們將回答您可能提出的任何問題。

Thank you.

謝謝。

Thank you. (Operator Instructions)

謝謝。（操作員說明）

Eric Beder, SCC research.

Eric Beder，SCC 研究。

Good morning.

早安.

Congratulations on a solid end to the year.

恭喜您今年圓滿結束。

Hi, Eric.

嗨，艾瑞克。

I heard about significant strides in reducing inventory levels, especially when you compare to the growth in the top line, how should we be thinking about inventories in 2024 and beyond?

我聽說在降低庫存水準方面取得了重大進展，特別是與營收的成長相比，我們應該如何考慮 2024 年及以後的庫存？

Hi, Eric, this is Andreas. Again. So yeah, we feel positive about our ability to continue to reduce inventories during 2024. We think that 2023 was a great year in this regard where we were able to reduce inventory in both companies, and we think we can reach normal levels by the end of 2024.

嗨，艾瑞克，我是安德烈亞斯。再次。所以，我們對 2024 年持續減少庫存的能力感到樂觀。我們認為 2023 年在這方面是偉大的一年，我們能夠減少兩家公司的庫存，我們認為到 2024 年底我們可以達到正常水準。

Okay. So there's still growth there, is still (multiple speakers)

好的。所以那裡仍然有成長，仍然（多個發言者）

Still opportunity to reduce inventories.

仍有機會減少庫存。

And we will continue to do so. And a context of growing revenue will obviously help us to make that last, that leaves the impact in the inventory to return to normal levels.

我們將繼續這樣做。收入成長的背景顯然將幫助我們實現這一點，從而使庫存的影響恢復到正常水平。

Right? But when you look at the opportunities at JAFRA, Mexico and JAFRA, USA, obviously have a very strong position in perfume. What other categories which you think make a lot more -- will continue to have it makes sense to add or to expand upon to capture more of your customers' share of wallet?

正確的？但當你看看墨西哥 JAFRA 和美國 JAFRA 的機會時，你會發現在香水領域顯然擁有非常強大的地位。您認為哪些其他類別的收入更高，並將繼續有必要添加或擴展以獲取更多客戶的錢包份額？

Yeah, Eric, this is Andres again. Yeah, so obviously, the fragrances category is the most relevant. As you can remember, we are today in Mexico, we are the number one direct selling brand in fragrances in Mexico. And the categories where we see a lot of opportunity are basically colour skin care and toiletries. They are three very big categories, both in Mexico and in the US. And we see a lot of opportunity to expand these categories and make them very relevant such as we have made with fragrances. So they will, in fact be very important for growth going forward and they speak about our great opportunity to grow going forward.

是的，艾瑞克，這又是安德烈斯。是的，很明顯，香水類別是最相關的。正如您所記得的，我們今天在墨西哥，我們是墨西哥第一大香水直銷品牌。我們看到很多機會的品類基本上是彩妝保養品和盥洗用品。在墨西哥和美國，它們是三個非常大的類別。我們看到了許多擴展這些類別並使它們非常相關的機會，例如我們用香水製作的產品。因此，事實上，它們對於未來的成長非常重要，並且它們談到了我們未來成長的巨大機會。

And kind of on a structural question on Betterware USA. So you're rolling that out in Q2.

關於 Betterware USA 的結構性問題。所以你將在第二季推出這項計畫。

How are you going to be shipping product from Mexico? How do you look upon that as a rollout? And are you going to initially focus on kind of more of the Southwestern regions? Or is it kind of nationwide? How should we be thinking about kind of the cadence of the rollout and how you're going to support it?

您將如何從墨西哥運送產品？您如何看待這是一次推出？您最初會關注更多的西南地區嗎？還是全國都這樣？我們應該如何考慮推出的節奏以及您將如何支持它？

Yeah, a very good question, very theoretical. So as have we spoke about, we are weeks away from launching (technical difficulty) will be based off of Dallas in Texas. And it's very important also to know, we are leveraging on many of just capabilities such as issuing large distribution center and using some of the back office that JAFRA and synergies for our (technical difficulty)

是的，這是一個非常好的問題，非常理論化。正如我們所說，我們距離推出（技術困難）將在德克薩斯州達拉斯進行。同樣重要的是要知道，我們正在利用許多公正的能力，例如發行大型配送中心和使用 JAFRA 的一些後台以及我們的協同效應（技術難度）

We are experiencing technical difficulty conference will resume momentarily. once again, thank you for your patience. We are experiencing technical difficulty.

我們遇到技術困難，會議將立即恢復。再次感謝您的耐心等待。我們遇到技術困難。

And the conference will resume momentarily.

會議將暫時恢復。

Thank you for your patience. We are ready to resume. Go ahead, sir.

感謝您的耐心等待。我們已準備好恢復。繼續吧，先生。

Okay. Thank you, Eric, this is Andres, you hear me there? so we --

好的。謝謝你，艾瑞克，我是安德烈斯，你聽到我的聲音了嗎？所以我們--

Yes, we can.

我們可以。

Okay. Perfect. Thank you.

好的。完美的。謝謝。

So and I will tell you so we are ready to launch in the US, we will begin selling only in the state of Texas to pilot test of all operations and everything. So it is important to note that first year 2024, we should not expect any significant positive impact from our Betterware launch. It will be a year where we will basically focus in Texas in the first months and then maybe expand to other states in the following months.

因此，我會告訴您，我們已準備好在美國推出，我們將開始僅在德克薩斯州銷售，以對所有業務和所有內容進行試點測試。因此，值得注意的是，在 2024 年第一年，我們不應期望 Betterware 的發表會產生任何重大的正面影響。今年的頭幾個月我們基本上將重點放在德克薩斯州，然後可能在接下來的幾個月擴展到其他州。

And I'd also like to add state that we will focus at the beginning, mainly in the Hispanic markets. As we stated during the call, it's a very big market. It's according to some stories, it's a 60 million population markets with huge potential, and it's a market that is very similar in many ways to the Mexican market. So we think that we can be very successful in that market and during the first years.

我還想補充一點，我們將在一開始就專注於西班牙市場。正如我們在電話會議中所說，這是一個非常大的市場。據一些報導稱，這是一個擁有6000萬人口、潛力巨大的市場，而這個市場在許多方面與墨西哥市場非常相似。因此，我們認為我們可以在該市場以及最初幾年內取得非常成功。

Great.

偉大的。

Thanks.

謝謝。

Congratulations, and look forward to 2024.

恭喜你，期待 2024 年。

Thank you.

謝謝。

Thank you, Eric. Have a good day.

謝謝你，埃里克。祝你有美好的一天。

(Operator Instructions)

（操作員說明）

Cristina Fernández with Telsey Advisory Group.

特爾西諮詢小組的克里斯蒂娜·費爾南德斯。

Hi, good morning and congratulations on the good results. I wanted to see if you can put in context the results for the first quarter relative to your updated guidance in October, where did the upside come relative to expectations? Did you see a significant acceleration or change in the trend of the business in November and December. Just wanted to understand what was different and where the upside came from?

你好，早安，恭喜你取得了好成績。我想看看您是否可以將第一季的業績與 10 月更新的指引聯繫起來，相對於預期，上漲空間在哪裡？您是否看到 11 月和 12 月業務趨勢出現顯著加速或變化？只是想了解有什麼不同以及好處來自哪裡？

Thanks.

謝謝。

Hi, Cristina, how are you? This is Andreas. So we saw a significant impact of our commercial strategies in Betterware Mexico. I think that in our first part, Betterware Mexico had a great fourth quarter. All the different commercial strategies that we had implemented, as Luis mentioned, really hit us and then it helped. We did the price decrease in September, which kind of helped all the strategies to start streamlining off again and have a great quarter for Betterware Mexico.

嗨，克里斯蒂娜，你好嗎？這是安德烈亞斯。因此，我們看到了 Betterware Mexico 商業策略的重大影響。我認為在我們的第一部分中，Betterware Mexico 第四季度表現出色。正如路易斯所提到的，我們實施的所有不同的商業策略確實給了我們很大的打擊，然後也起到了幫助作用。我們在 9 月降低了價格，這有助於所有策略再次開始精簡，並為 Betterware Mexico 帶來了一個美好的季度。

Then on the other hand, at the same time in JAFRA Mexico, we had a great quarter as well. And the especially in terms of profitability for JAFRA Mexico, we've had a great impact from an increased gross margin in the fourth quarter, which helped our EBITDA results for the fourth quarter.

另一方面，同時在墨西哥賈夫拉，我們也度過了一個很棒的季度。特別是在 JAFRA 墨西哥的獲利能力方面，第四季度毛利率的提高對我們產生了巨大影響，這有助於我們第四季度的 EBITDA 業績。

So those were main reasons both revenue, we think that Betterware Mexico had a great impact for to achieve the revenue. And in this case, JAFRA Mexico contributed was one, contributed more in the profitability with an increased gross margin of about 581 basis points.

這些都是收入的主要原因，我們認為 Betterware Mexico 對實現收入產生了巨大影響。在這種情況下，JAFRA 墨西哥公司的貢獻就是其中之一，它對獲利能力的貢獻更大，毛利率增加了約 581 個基點。

(multiple speakers) extra call?

（多位發言者）額外通話？

Yeah.

是的。

Yeah, thank you for that. Sorry.

是的，謝謝你。對不起。

Go ahead, Cristina.

繼續吧，克里斯蒂娜。

Yeah, I just had a follow up on the on the JAFRA Mexico profitability. Was there anything that was one-time in nature that helped deliver that 31% EBITDA margin for that segment.

是的，我剛剛對 JAFRA 墨西哥的盈利能力進行了跟進。是否有任何一次性因素可以幫助該細分市場實現 31% 的 EBITDA 利潤率？

And then as we look at 2024, how should we think about the EBITDA margins for Betterware and JAFRA Mexico, I mean, you give them Betterware it has been -- sort of in that 20% range and then down a little bit from first half of the year versus JAFRA that has been accelerating the profitability?

然後，當我們展望 2024 年時，我們應該如何考慮 Betterware 和 JAFRA Mexico 的 EBITDA 利潤率，我的意思是，你給他們的 Betterware 的利潤率一直在 20% 左右，然後比上半年略有下降與一直在加速獲利的JAFRA 相比，年度最佳企業是什麼？

Christina. So I'll go back (technical difficulty) November to explain that extraordinary profitability of JAFRA for the fourth quarter and to give you what we can expect in terms of EBITDA margins going forward for 2024?

克里斯蒂娜.因此，我將返回（技術難度）11 月，解釋 JAFRA 第四季度的非凡盈利能力，並為您提供我們對 2024 年 EBITDA 利潤率的預期？

Yeah, hello, Cristina, nice talking to you. This is Alejandro. What happened in the last quarter with our gross margin in JAFRA, Mexico, we have a significant improvement in this gross margin basically because of favorability in the exchange rate, exchange rate and the appreciation of the peso during this quarter was positive.

是的，你好，克里斯蒂娜，很高興與你交談。這是亞歷杭德羅。上個季度我們在墨西哥 JAFRA 的毛利率發生了什麼，我們的毛利率有了顯著改善，主要是因為本季匯率、匯率和比索升值的有利性是正面的。

We also have reduced costs achieved through supplier negotiations with specific vendors, and that added almost 2-percentage-points for gross margin. And you can have a favorable variation in product volume in our manufacturing facilities, so volume additionally, add up back and the mix also of that products that we manufactured. So that combination, all right with this this improvement in margins. But what we are expecting for 2024 is that this will be normalized and we will be once again in margins between 80% to 82% range?

我們也透過與特定供應商的供應商談判降低了成本，這使毛利率增加了近 2 個百分點。您可以在我們的製造工廠中獲得有利的產品數量變化，因此，我們製造的產品數量以及數量也可以加起來。因此，這種組合可以提高利潤率。但我們對 2024 年的預期是，這將正常化，我們的利潤率將再次達到 80% 至 82% 的範圍？

Thanks. And then the last question I had was on the revenue outlook for 2024, the 6% to 11%. What are you assuming as far as like industry growth? You talked about the home solutions market stabilizing. Do you think that market can grow in 2024 and how. Maybe you can talk about the overall consumer and the beauty market. Just that's underpinning the revenue outlook for the year?

謝謝。我的最後一個問題是關於 2024 年的收入前景，即 6% 至 11%。您對產業成長有何假設？您談到了家庭解決方案市場的穩定。您認為該市場到 2024 年會成長嗎？如何成長？也許你可以談談整體消費者和美容市場。這就是今年收入前景的基礎嗎？

Yeah. Cristina, This is Andres again?

是的。克里斯蒂娜，這又是安德烈斯？

So on the Betterware (technical difficulty) we're saying, I would say the market has pretty much stabilized. It is important to note that that during the pandemic, after the huge market growth then came a very steep decline. And now from the market studies that we make year after year, we see that it has stabilized and with a stabilized market, there's a lot that we can do.

因此，就我們所說的 Betterware（技術難度）而言，我想說市場基本上已經穩定下來。值得注意的是，在大流行期間，市場在經歷了巨大的成長之後，出現了非常急劇的下降。現在，從我們年復一年所做的市場研究來看，我們看到它已經穩定下來，隨著市場的穩定，我們可以做很多事情。

It is important to remember that we only have around 4% of market share today, and we also only have about 25% of home penetration today. So there is a lot of room for us to grow with a stabilized market. So what we're assuming for Betterware, Mexico is that the market continues to be stabilized. We're not assuming speed growth in the market and (technical difficulty) even more.

重要的是要記住，我們今天只擁有大約 4% 的市場份額，而且我們今天只有大約 25% 的家庭滲透率。因此，隨著市場的穩定，我們還有很大的成長空間。因此，我們對墨西哥 Betterware 的假設是市場持續穩定。我們並沒有假設市場的快速成長和（技術難度）。

And now in the process cost side, that the beauty market in Mexico is that it's a buoyant and growing market today after the beauty market had some troubles. -- And now after pandemic, it's growing. Buoyant leads grew between 10% and 15% last year, the beauty market in Mexico, and we think we can ride this market growth and also expand our market share in JAFRA, Mexico. We also have around a 4% market share. And it's important to understand that around 50% of the market is sold through direct selling in the beauty space in Mexico.

現在在流程成本方面，在美容市場遇到一些麻煩之後，墨西哥的美容市場如今是一個活躍且不斷增長的市場。 ——現在大流行之後，它正在成長。去年，墨西哥的美容市場成長了 10% 至 15%，我們認為我們可以利用這一市場成長，並擴大我們在墨西哥 JAFRA 的市佔率。我們還擁有約 4% 的市場份額。重要的是要了解墨西哥美容領域約 50% 的市場是透過直銷銷售的。

So we have a lot of room to grow. A lot of room to grow in JAFRA. So these two combined will help. Now additional to this in our international operations, as I spoke earlier, we should not expect any significant contribution from Betterware, US. What we should expect JAFRA US to start growing again and contribute little by little to the overall revenue of the Group.

所以我們有很大的成長空間。JAFRA 有很大的發展空間。所以這兩者結合起來會有幫助。現在，除了我們的國際業務之外，正如我之前所說，我們不應指望美國 Betterware 會做出任何重大貢獻。我們應該期待 JAFRA US 再次開始成長，並逐漸為集團的整體收入做出貢獻。

Thank you.

謝謝。

Thank you.

謝謝。

Andres Lomeli, LCA capital.

安德烈斯·洛梅利 (Andres Lomeli)，LCA 資本。

Hello. Thank you for taking my question and congratulations again for the great results. My question is regarding the expansion to new markets. You mentioned that you want to keep margin stable. I just wanted to know if you could talk a little bit about how you plan on managing the costs associated with the expansions, maybe new hires, new offices and met maintaining those margins, EBITDA margins stable throughout the years?

你好。感謝您提出我的問題，並再次恭喜您取得的優異成績。我的問題是關於向新市場的擴張。您提到您希望保持利潤率穩定。我只是想知道您是否可以談談您計劃如何管理與擴張相關的成本，也許是新員工、新辦公室和會議，以保持這些利潤率、EBITDA 利潤率多年來保持穩定？

Thank you.

謝謝。

Yeah. Thank you, Andres.

是的。謝謝你，安德烈斯。

This is Andreas again.

這又是安德烈亞斯。

And for the Betterware, US expansion, we are estimating within our projections, -- million-dollar investments during 2024. So it's not a very relevant investment as regards to our yearly EBITDA and we are leveraging a lot of our capabilities in JAFRA today. As I mentioned earlier, we are going to be distributing off JAFRA distribution center, the excess capacity that we have there. So that will not be a very relevant cost. We're also leveraging on all the back office.

對於 Betterware 在美國的擴張，我們預計 2024 年將投資數百萬美元。因此，對於我們的年度 EBITDA 而言，這並不是一項非常相關的投資，而且我們今天正在利用 JAFRA 的大量能力。正如我之前提到的，我們將在 JAFRA 配送中心進行配送，那裡有過剩的產能。所以這不會是一個非常相關的成本。我們也利用所有後台部門。

We will finance HR all the back office and this investment will be mainly in our commercial team for a Betterware, US and one of the good things of our business model is that we can streamline expenses very efficiently when we launch a new market, so we are going to go step-by-step, not going to go out and invest mode, we're going to go step-by-step and it will not be a relevant investment.

我們將為所有後台部門的人力資源提供資金，這項投資將主要投資於我們美國Betterware 的商業團隊，我們商業模式的好處之一是，當我們推出新市場時，我們可以非常有效地簡化開支，所以我們我們會一步一步走，不會出去投資模式，我們會一步一步走，不會是相關投資。

Also in Peru, we are going also step-by-step, we are estimated an investment of between $500,000 to $1 million to make all the preparations in the pre-operating expenses. So in general, we don't expect this to be to relevance and it is already implied in our guidance.

同樣在秘魯，我們也逐步進行，預計投資50萬至100萬美元，用於前期營運費用的所有準備工作。因此，總的來說，我們不希望這具有相關性，並且它已經暗示在我們的指導中。

Perfect. Thank you very much. And once again, congratulations on a great quarter.

完美的。非常感謝。再次恭喜這個季度的出色表現。

Thank you, Andres.

謝謝你，安德烈斯。

(Operator Instructions) That will conclude our question and answer portion of today's conference call. I would like to turn the call back over to management for closing remarks.

（操作員說明）今天電話會議的問答部分就到此結束。我想將電話轉回管理層以供結束語。

Hello, this is Luis. Hello, everybody. Thank you, operator, and thank you everyone for joining us today.

你好，我是路易斯。大家好。謝謝運營商，也謝謝大家今天加入我們。

As we look forward to the year ahead, we expect 2024 will be transformative, expanding our Mexico businesses also with allowance of Betterware US and continue to ours Betterware, Peru in early 2025.

展望未來的一年，我們預計 2024 年將是變革性的一年，我們將在美國 Betterware 的支持下擴大我們的墨西哥業務，並於 2025 年初繼續擴大秘魯 Betterware 的業務。

Our company's strong fundamentals led by our new leadership team will drive accelerated growth and shareholder value. Thank you for your support and being on this journey with us. Thank you, everyone, and have a good day.

在新領導團隊的領導下，我們公司強勁的基本面將推動加速成長和股東價值。感謝您的支持並與我們一起踏上這段旅程。謝謝大家，祝你有美好的一天。

Ladies and gentlemen, this concludes Betterware fourth quarter 2023 conference call. We would like to thank you again for your participation. You may now disconnect.

女士們先生們，Betterware 2023 年第四季電話會議到此結束。我們再次感謝您的參與。您現在可以斷開連線。