Business Context and Reporting Period
Company: BETTERWARE DE MEXICO, S.A.P.I. DE C.V. (BeFra Group)
Filing Type: Form 20-F (Annual Report)
Reporting Period: Fiscal Year Ended December 31, 2025
Business Overview: The Group operates in the direct-to-consumer sector with two primary segments: Home Organization (Betterware/BWM) and Beauty & Personal Care (Jafra). Operations are concentrated in Mexico (>90%), with presence in the U.S. and expanding into Latin America (Guatemala, Peru, Ecuador, Colombia). The company utilizes a two-tier sales model involving independent distributors, associates, leaders, and consultants.
Key Financial Metrics (2025 vs. 2024)
| Metric | 2025 (Ps. Thousands) | 2024 (Ps. Thousands) | Change |
|---|---|---|---|
| Net Revenue | 14,243,015 | 14,100,758 | +1.0% |
| Net Income | 1,060,804 | 711,522 | +49.1% |
| EBITDA | 2,647,048 | 2,078,394 | +27.4% |
| Adjusted EBITDA | 2,647,048 | 2,774,697 | -4.6% |
| Operating Cash Flow | 2,236,727 | 1,797,130 | +24.5% |
| Total Debt (Outstanding) | 4,107,654 | 4,824,943 | -14.9% |
| Cash & Equivalents | 328,344 | 296,558 | +10.7% |
Note: All figures in thousands of Mexican Pesos (Ps.).
Material Changes and Segment Performance
- Revenue Mix: The Beauty & Personal Care (Jafra) segment grew revenue by 5.5% to Ps. 8.55 billion, driven by higher average monthly sales orders. Conversely, the Home Organization (BWM) segment declined 5.1% to Ps. 5.69 billion due to softer national consumption and lower associate activity.
- Cost of Sales: Increased 5.4% primarily due to higher raw material costs (glass prices up 6%) at Jafra and foreign exchange losses on inventory purchases at BWM.
- Administrative Expenses: Decreased 9.5% to Ps. 2.45 billion. This reduction was significantly aided by the absence of a Ps. 166.6 million impairment charge on assets held for sale that occurred in 2024.
- Financing Costs: Net financing costs improved, with interest expense decreasing 15.4% due to debt prepayments. However, a Ps. 108.8 million loss on the valuation of derivative financial instruments offset some gains.
- Property Sales: In 2024, the company recognized a Ps. 529.7 million loss on the sale of Jafra properties ("Las Flores" and "San Angel"). No such non-recurring losses occurred in 2025.
Guidance, Outlook, and Risks
Outlook and Strategic Initiatives
- Tupperware Acquisition: On January 19, 2026, the Company signed a definitive agreement to acquire Tupperware's operating assets in Latin America (primarily Mexico and Brazil) for US$250 million (US$215 million cash + US$35 million shares). Closing is expected in H1 2026, subject to regulatory approval.
- Expansion: Continued expansion in the Andean region (Peru, Ecuador, Colombia) and Guatemala. U.S. operations were closed in April 2025 to focus on Central America due to tariff reforms.
- Debt Management: Management aims to maintain a leverage index below 2x. A new syndicated credit facility of Ps. 3.8 billion was secured in April 2026 to fund the Tupperware acquisition.
Key Risks and Contingencies
- Internal Controls: The Company identified material weaknesses in internal control over financial reporting as of December 31, 2025. These relate to controls over business combinations (goodwill impairment), period-end reporting, and IT general controls. Remediation is ongoing.
- Geopolitical & Economic: Significant exposure to Mexico's economic conditions (90% of operations). Risks include inflation, high interest rates, and potential U.S. tariff policies affecting imports from China (87% of BWM products).
- Supply Chain: Dependence on contract manufacturers in China and a single manufacturing facility in Queretaro, Mexico, for the Jafra segment.
- Regulatory: Risks related to the classification of independent distributors as employees and evolving tax laws in Mexico.
Investor Verification Checklist
- Internal Control Remediation: Verify the progress of the remediation plan for the identified material weaknesses in internal controls, specifically regarding goodwill impairment testing and IT general controls.
- Tupperware Acquisition Status: Monitor the regulatory approval process (Mexican Antitrust Commission) and the closing timeline for the Tupperware Latin America acquisition.
- Debt Covenants: Confirm continued compliance with financial covenants (leverage ratio < 3.0-3.5x; debt service coverage > 1.25x) given the new debt incurred for the Tupperware deal.
- FX Hedging Effectiveness: Review the impact of the strong Mexican Peso on future earnings, given the high reliance on USD-denominated imports for the BWM segment.
- Segment Performance: Assess the sustainability of the Jafra segment's growth versus the decline in the BWM segment in a soft consumption environment.