| Nature of business and significant events |
| 1. |
Nature
of business and significant events |
Betterware
de México, S.A.P.I. de C.V. (formerly Betterware de México, S.A.B. de C.V.) (“Betterware or BWM”) and its subsidiaries
are hereinafter jointly referred to as the “Group” or the “Company”. The Group’s object is the direct-to-consumer
selling, which operates through two business segments: the home organization products (“Betterware segment” or “BWM
segment”) and the beauty and personal care products (B&PC) (“JAFRA segment”). The Betterware’s segment is
divided in seven categories of the home organization: (i) Kitchen and food preservation, (ii) Home solutions, (iii) Bedroom, (iv) Bathroom,
(v) Laundry & Cleaning (vi) Tech & mobility and (vii) wellness. The JAFRA segment is divided in four categories of the beauty
and personal care: (i) fragrance, (ii) color (cosmetics), (iii) skin care and (iv) toiletries. The Group’s business segments products
are sold in twelve catalogs published throughout the year. The Group operates mainly in Mexico and the United States. The Group’s
address, registered as its office and primary place of business, is Gdl-Ameca-Huaxtla Km-5, El Arenal, Jalisco, México, and Zip
Code 45350. Betterware’s controlling shareholder is Campalier, S.A. de C.V. (“Campalier”).
Significant
events and transactions –
2023
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a) |
Long-term
debt and bond issuances: |
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Ø |
On
July 5, 2023, Betterware signed an agreement with BBVA to acquire a simple line of credit for Ps.1,500,000. |
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On
July 7, 2023, Betterware successfully concluded the third and fourth bond issuance offering for a total of Ps.813,974, with 4 and 7-year
maturities, offerings in the Mexican Market. |
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As
of July 10, 2023, the debt for the syndicated loan used for the acquisition of JAFRA in 2022, amounted to Ps.3,248,695. Betterware settled
the debt of the syndicated loan using the Ps.1,500,000 of the credit line with BBVA and the import issuance of bonds net of issuance
costs per placement, that is, the net amount of Ps.810,197, the remainder of the credit was settled with drawdowns of short-term credit
lines and the cash available on hand at that date (see note 16). |
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On
September 12, 2023, Betterware signed an agreement with HSBC to acquire a simple line of credit for Ps.950,000. |
2022
|
b) |
On
January 18, 2022, the Company entered into an agreement to acquire 100% of JAFRA in Mexico and the United States, along with its “JAFRA”
trademarks, for a total cash consideration of Ps.5,044,371 (see note 11). JAFRA is a global leading brand in direct sales in the Beauty
and Personal Care (B&PC) industry with a strong presence in Mexico and the United States with independent leaders and consultants
who sell its unique products. In addition, JAFRA provides the opportunity to the Company to expand its geographic presence in the United
States, enhancing its international focus on the North American market. |
On
March 24, 2022, the Federal Economic Competition Commission (“COFECE”) approved the JAFRA Acquisition, which was concluded
on April 7, 2022. The necessary funds to pay the purchase price under the JAFRA Acquisition were obtained from a long-term loan of Ps.4,498,695
(see note 16), plus the available cash resources from the Company.
|
c) |
On
March 28, 2022, the Ordinary General Assembly of Shareholders of GurúComm, S.A.P.I., approved the retirement of Betterware as
its shareholder. Consequently, we were reimbursed for 55,514 subscribed and paid shares, and 37,693 subscribed and unpaid shares were
cancelled. Betterware withdrew its investment because the business was not growing according to our expectations, and the return on investment
would take more years than anticipated. The effect on profit and loss of this transaction was a loss of Ps.16,610. |
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d) |
On
November 18, 2022, the Ordinary General Assembly of Shareholders of Innova Catálogos, S.A. de C.V. approved the retirement of
Betterware as a shareholder. Consequently, we were reimbursed for and canceled 238 subscribed and paid shares. Betterware withdrew its
investment because the business was not growing according to our expectations, and the return on investment would take more years than
anticipated. The effect on profit and loss of this transaction was a loss of Ps.5,252. |
2021
|
e) |
On
July 1st, 2021, all employees from BLSM Latino America Servicios, S.A. de C.V., (“BLSM”) were transferred to Betterware.
BLSM provided administrative, technical, and operational services to Betterware until June 30, 2021. |
|
f) |
Betterware’s
legal form was changed to Sociedad Anónima Promotora de Inversión (S.A.P.I.) de Capital Variable, as approved during
an extraordinary shareholders meeting held on August 2, 2021. |
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g) |
On
August 30, 2021, Betterware successfully concluded the offering of a two-tranche sustainability bond issuance for a total of Ps.1,500,000,
with maturities across 4 and 7 years, offered in the Mexican Market with favorable conditions for the Company (see note 16). |
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