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Segment information

12 Months Ended

Dec. 31, 2022

27.

Segment information

The information by operating segments is presented consistent with the information included in the internal reports provided to the highest authority in making operating decisions (Chief Operating Decision Maker or “CODM”).

The Board of Directors is who evaluates the financial performance, the situation of the Group and makes strategic decisions. It has been identified as the highest authority in operating decision-making, and it is integrated by seven independent members, two members and the Executive Board Chairman.

As discussed in note 1, the Group has identified the reportable business segments as follow:

●

Home organization segment (Betterware segment or BWM’ segment): Some of the categories through which Betterware offers its product line include kitchen and food preservation, home solutions, bathroom, laundry & cleaning, tech and mobility and bedroom (see note 26). BWM’s products are sold through catalogues and are distributed to the end customer by its network of distributors and associates in Mexico. As of December 31, 2022, the net income corresponding to this reportable segment represented 55.1%.

●

Beauty and Personal Care (B&PC) segment (JAFRA segment), formed by four main categories: fragrance, color (cosmetics), skin care and toiletries. JAFRA’s products are sold through 12 promotional catalogues published on a monthly basis and are distributed to the end customer by its network of leaders and consultants in its operative segments located in Mexico (JAFRA Mexico) and the United States (JAFRA US). As of December 31, 2022, the net income corresponding to this reportable segment represented 44.9%.

The segment information of the Group is detailed in the following table:

	As of December 31, 2022												As of December 31, 2021			As of January 3, 2021
The Group’s companies	BWM´s segment			JAFRA´s segment			Eliminations⁽¹⁾			Total			BWM´s segment			BWM´s segment
EBITDA		1,514,227			801,881			-			2,316,108			2,683,987			2,107,023
Depreciation and amortization		109,055			178,647			-			287,702			82,122			43,688
Operating income		1,405,172			623,234			-			2,028,406			2,601,865			2,063,335
Interest income		10,607			32,777			(14,695	)		28,689			25,872			10,930
Interest expense		(546,977	)		(11,039	)		14,695			(543,321	)		(75,818	)		(80,253	)
Unrealized (loss) gain in valuation of DFI		(43,522	)		-			-			(43,522	)		330,315			(287,985	)
Changes in fair value of warrants		-			-			-			-			-			(851,520	)
Foreign exchange loss, net		(81,212	)		(2,156	)		-			(83,368	)		(319,739	)		(30,402	)
Income before income taxes		744,068			642,816			-			1,386,884			2,562,495			824,105
Income taxes		367,166			149,754			-			516,920			814,556			525,661
Income for the year		376,902			493,062			-			869,964			1,747,939			298,444
Net revenue	Ps.	6,343,344			5,166,545			(2,340	)		11,507,549			10,067,683			7,237,628
Divestment in subsidiaries	Ps.	(21,862	)		-			-			(21,862	)		-			-
Total assets	Ps.	8,958,162			8,154,942			(5,780,371	)		11,332,733			5,185,229			4,359,706
Total liabilities	Ps.	(8,363,605	)		(2,592,037	)		720,189			(10,235,453	)		(3,985,026	)		(3,477,730	)
Fixed assets additions	Ps.	77,899			50,201			(3,492	)		124,608			336,310			619,279

⁽¹⁾

The column of eliminations corresponds to the transactions between the Group’s subsidiaries for the concepts of loans, interest income (expenses), expenses for corporate services, sales of fixed assets, initial investment in subsidiary, among the most important.

The income recognized during the year 2022, 2021 and 2020, national and foreign, is shown below:

	2022		2021		2020
Revenue in Mexico	Ps.	10,531,505		10,059,285		7,237,628
Revenue in United States ⁽²⁾		966,085		-		-
Revenue in Guatemala		9,959		8,398		-
Total revenue of the Group	Ps.	11,507,549		10,067,683		7,237,628

⁽²⁾

The main concentration of JAFRA’s income is in Mexico, however, there is an entity in the United States which represents a smaller percentage 8% of the Group’s total income.

The Group considers that there are no concentration risks given the nature of the business and the sale of its products through a significant number of distributors, leaders and consultants.