Betterware de México raised its growth outlook on Wednesday following a presentation at the Water Tower Research Virtual Insights Conference, highlighting how its acquisition of Tupperware's Brazilian operations is driving incremental revenue and margin expansion while keeping leverage modest.
Andrés Campos, the company's chief executive officer, said the Tupperware acquisition added approximately 30% to combined sales and EBITDA. Raúl del Villar, the CFO, noted that Tupperware is "very profitable" and will effectively finance its own purchase over time. The acquisition left pro forma net leverage at 1.6 times.
Tupperware's business carries an EBITDA margin of roughly 27% and generates about $100 million in annual revenue from Brazil, according to the presentation. Historically, the Brazil operation experienced quarterly sales declines in the 10% to 15% range, but the pace of decline narrowed to 6% in June. Betterware also expects to capture MXN 3 million in working-capital benefits so far, with an additional MXN 25 million possible over the next nine to twelve months as supplier terms extend toward 120 days.
On a running yearly basis, Mexico accounts for approximately 80% of the combined business. The Andean region — comprising Peru, Colombia, Ecuador, and Bolivia — represents roughly 70% of the Mexican market size. Betterware has held market leadership in Mexico for 25 years and acquired Jafra four years ago; the beauty brand has since grown nearly 70%, climbing from the No. 14 to the No. 7 position in Mexico.
The company operates about 700,000 associates in Mexico for Betterware, 500,000 for Jafra, and 250,000 for Tupperware, with each associate selling an average of 1.5 to 2 catalogs.
Campos framed the company's positioning against larger peers. "We are not a retailer, we are the brand," he said, comparing Betterware more closely to Procter & Gamble or Unilever than to Walmart or Amazon.
On the capital-return front, Betterware has issued 26 consecutive quarterly dividends since its IPO. The second-quarter payout was lifted to MXN 250 million, pushing the dividend yield to 7.77%. Free cash flow yield stands at 20%, and the shares trade at a price-to-earnings ratio of 7.48.
