Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2021shares | |
Document Information [Line Items] | |
Entity Registrant Name | BETTERWARE DE MÉXICO, S.A.P.I. DE C.V. |
Document Type | 20-F |
Current Fiscal Year End Date | --12-31 |
Entity Common Stock, Shares Outstanding | 37,316,546 |
Amendment Flag | false |
Entity Central Index Key | 0001788257 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Large Accelerated Filer |
Entity Well-known Seasoned Issuer | No |
Document Period End Date | Dec. 31, 2021 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | FY |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | true |
Entity Shell Company | false |
Document Annual Report | true |
Document Shell Company Report | false |
Document Transition Report | false |
Entity File Number | 001-39251 |
Entity Incorporation, State or Country Code | O5 |
Entity Interactive Data Current | Yes |
Entity Address, Address Line One | Luis Enrique Williams 549 |
Entity Address, City or Town | Zapopan |
Entity Address, Postal Zip Code | 45145, |
Entity Address, Country | MX |
Document Registration Statement | false |
Document Accounting Standard | International Financial Reporting Standards |
Title of 12(b) Security | Ordinary Shares, no par value per share |
Trading Symbol | BWMX |
Security Exchange Name | NASDAQ |
Auditor Name | Deloitte Touche Tohmatsu Limited |
Auditor Firm ID | 1153 |
Auditor Location | Guadalajara, Jalisco, Mexico |
Business Contact [Member] | |
Document Information [Line Items] | |
Entity Address, Address Line One | Luis Enrique Williams 549 |
Entity Address, City or Town | Zapopan, |
Entity Address, Postal Zip Code | 45145 |
Entity Address, Country | MX |
Contact Personnel Name | Luis Campos |
Local Phone Number | 3836-0500 |
City Area Code | 33 |
Consolidated and combined state
Consolidated and combined statements of financial position - MXN ($) $ in Thousands | Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 |
Current assets: | |||
Cash and cash equivalents | $ 1,175,198 | $ 649,820 | $ 213,697 |
Trade accounts receivable, net | 778,054 | 757,806 | 247,087 |
Accounts receivable from related parties | 24 | 610 | |
Inventories | 1,339,378 | 1,274,026 | 345,554 |
Prepaid expenses | 69,224 | 94,501 | 53,184 |
Derivative financial instruments | 28,193 | ||
Other assets | 81,988 | 130,417 | 20,574 |
Total current assets | 3,472,059 | 2,906,570 | 880,706 |
Non-current assets: | |||
Property, plant and equipment, net | 1,069,492 | 791,127 | 207,350 |
Right of use assets, net | 17,384 | 24,882 | 23,811 |
Deferred income tax | 17,605 | 5,082 | |
Investment in subsidiaries | 497 | ||
Intangible assets, net | 369,760 | 319,361 | 310,965 |
Goodwill | 371,075 | 348,441 | 348,441 |
Other assets | 4,274 | 5,774 | 13,371 |
Total non-current assets | 1,832,482 | 1,507,190 | 909,020 |
Total assets | 5,304,541 | 4,413,760 | 1,789,726 |
Current liabilities: | |||
Short term debt and borrowings | 28,124 | 105,910 | 148,070 |
Accounts payable to suppliers | 1,984,932 | 2,078,628 | 529,348 |
Accrued expenses | 142,169 | 109,767 | 54,456 |
Provisions | 115,192 | 151,008 | 46,689 |
Income tax payable | 88,679 | 85,221 | 34,709 |
Value added tax payable | 26,703 | 30,299 | |
Employee profit sharing payable | 55,305 | 7,354 | 5,006 |
Lease liability | 6,102 | 7,691 | 14,226 |
Derivative financial instruments | 295,115 | 15,555 | |
Total current liabilities | 2,420,503 | 2,867,397 | 878,358 |
Non-current liabilities: | |||
Statutory employee benefits | 2,093 | 1,678 | 1,630 |
Derivative financial instruments | 25,179 | 16,754 | |
Deferred income tax | 80,907 | 56,959 | 78,501 |
Lease liability | 11,778 | 16,687 | 10,358 |
Long term debt and borrowings | 1,482,261 | 523,967 | 529,643 |
Total non-current liabilities | 1,577,039 | 624,470 | 636,886 |
Total liabilities | 3,997,542 | 3,491,867 | 1,515,244 |
Stockholder's equity | |||
Common stock | 294,999 | 281,722 | 55,985 |
Share premium account | 6,659 | 909,428 | |
Retained earnings (deficit) | 990,103 | (268,539) | 218,376 |
Other comprehensive income | 583 | (718) | 121 |
Equity attributable to owners of the company | 1,292,344 | 921,893 | 274,482 |
Non-controlling interest | 14,655 | ||
Total stockholders' equity | 1,306,999 | 921,893 | 274,482 |
Total liabilities and stockholders' equity | $ 5,304,541 | $ 4,413,760 | $ 1,789,726 |
Consolidated and combined sta_2
Consolidated and combined statements of profit or loss and other comprehensive income - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Profit or loss [abstract] | |||
Net revenue | $ 10,039,668 | $ 7,260,408 | $ 3,084,662 |
Cost of sales | 4,399,164 | 3,290,994 | 1,280,829 |
Gross profit | 5,640,504 | 3,969,414 | 1,803,833 |
Administrative expenses | 1,247,436 | 664,677 | 319,133 |
Selling expenses | 1,264,581 | 853,355 | 551,300 |
Distribution expenses | 463,779 | 331,023 | 121,155 |
Total operating expense | 2,975,796 | 1,849,055 | 991,588 |
Operating income | 2,664,708 | 2,120,359 | 812,245 |
Financing income (cost): | |||
Interest expense | (75,818) | (80,253) | (85,429) |
Interest income | 25,872 | 10,930 | 7,028 |
Unrealized gain (loss) in valuation of derivative financial instruments | 330,315 | (287,985) | (15,680) |
Changes in fair value of warrants | (851,520) | ||
Foreign exchange loss, net | (319,739) | (30,402) | (13,330) |
Total financing income (cost) | (39,370) | (1,239,230) | (107,411) |
Income before income taxes | 2,625,338 | 881,129 | 704,834 |
Income taxes: | |||
Current | 782,901 | 576,834 | 229,900 |
Deferred | 41,553 | (34,066) | 2,792 |
Total income taxes | 824,454 | 542,768 | 232,692 |
Net income for the year | 1,800,884 | 338,361 | 472,142 |
Net income for the year attributable to: | |||
Owners of the Company | 1,804,590 | 338,361 | 472,142 |
Non-controlling interest | (3,706) | ||
Net income for the year | 1,800,884 | 338,361 | 472,142 |
Items that will not be reclassified subsequently to profit or loss: | |||
Remeasurement of defined benefit obligation, net of taxes | 83 | (839) | 76 |
Total comprehensive income for the year | 1,800,967 | 337,522 | 472,218 |
Comprehensive income for the year attributable to: | |||
Owners of the Company | 1,804,673 | 337,522 | 472,218 |
Non-controlling interest | (3,706) | ||
Total comprehensive income for the year | $ 1,800,967 | $ 337,522 | $ 472,218 |
Basic earnings per common share (pesos) (in Pesos per share) | $ 48.81 | $ 9.93 | $ 15.63 |
Diluted earnings per common share (pesos) (in Pesos per share) | $ 48.33 | $ 9.84 | $ 15.63 |
Consolidated and combined sta_3
Consolidated and combined statements of changes in stockholders' equity - MXN ($) $ in Thousands | Common stockOpening balance after adjustment | Common stock | Share premium accountOpening balance after adjustment | Share premium account | Retained earnings (deficit)Accounting effects for changing reporting period | Retained earnings (deficit)Opening balance after adjustment | Retained earnings (deficit) | Other comprehensive incomeOpening balance after adjustment | Other comprehensive income | Non-controlling interests. | Accounting effects for changing reporting period | Opening balance after adjustment | Total |
Balance at Dec. 31, 2018 | $ 55,985 | $ 24,234 | $ 45 | $ 80,264 | |||||||||
Dividends paid | (278,000) | (278,000) | |||||||||||
Total comprehensive income for the year | 472,142 | 76 | 472,218 | ||||||||||
Balance at Dec. 31, 2019 | 55,985 | 218,376 | 121 | 274,482 | |||||||||
Capital increase | 225,737 | $ 909,428 | 1,135,165 | ||||||||||
Effects of merger with related party | 4,724 | 4,724 | |||||||||||
Dividends paid | (830,000) | (830,000) | |||||||||||
Total comprehensive income for the year | 338,361 | (839) | 337,522 | ||||||||||
Balance at Jan. 03, 2021 | $ 281,722 | 281,722 | $ 909,428 | 909,428 | $ (22,466) | $ (291,005) | (268,539) | $ (718) | (718) | $ (22,466) | $ 899,427 | 921,893 | |
Reclassification of share premium to retained earnings | (876,518) | 876,518 | |||||||||||
Others | 13,277 | (26,251) | 1,218 | (11,756) | |||||||||
Dividends paid | (1,400,000) | (1,400,000) | |||||||||||
Effect of acquisition of subsidiaries | $ 18,361 | 18,361 | |||||||||||
Total comprehensive income for the year | 1,804,590 | 83 | (3,706) | 1,800,967 | |||||||||
Balance at Dec. 31, 2021 | $ 294,999 | $ 6,659 | $ 990,103 | $ 583 | $ 14,655 | $ 1,306,999 |
Consolidated and combined sta_4
Consolidated and combined statements of cash flows - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Operating activities: | |||
Net income for the year | $ 1,800,884 | $ 338,361 | $ 472,142 |
Adjustments for: | |||
Income tax expense | 824,454 | 542,768 | 232,692 |
Depreciation and amortization | 82,122 | 43,688 | 38,394 |
Accounting effects for changing reporting period | (22,466) | ||
Interest expense | 75,818 | 80,253 | 85,429 |
Interest income | (25,872) | (10,930) | (7,028) |
(Gain) loss on disposal of non-current assets | (478) | 9,216 | |
Share-based payment expense | 32,910 | ||
Others | (12,974) | ||
Changes in fair value of warrants | 851,520 | ||
Unrealized gain (loss) in valuation of derivative financial instruments | (330,315) | 287,985 | 15,680 |
Total adjustments to reconcile profit (loss) | 2,391,173 | 2,175,771 | 837,309 |
(Increase) decrease in: | |||
Trade accounts receivable | (19,720) | (510,719) | (48,311) |
Trade accounts receivable from related parties | (24) | 610 | (610) |
Inventory | (64,312) | (928,472) | (43,348) |
Prepaid expenses and other assets | 31,184 | (95,532) | (40,263) |
Accounts payable to suppliers and accrued expenses | (81,882) | 1,604,591 | 101,857 |
Provisions | (35,843) | 104,319 | 7,703 |
Value-added tax payable | (26,703) | (3,596) | 12,675 |
Statutory employee profit sharing | 47,951 | 2,348 | 2,290 |
Employee benefits | 1,722 | (743) | 351 |
Income taxes paid | (777,949) | (526,321) | (224,207) |
Net cash provided by operating activities | 1,465,597 | 1,822,256 | 605,446 |
Investing activities: | |||
Control obtained over subsidiaries | 50 | ||
Payments of fixed and intangible assets | (401,736) | (617,686) | (182,625) |
Proceeds from disposal of fixed assets | 12,521 | 18,270 | |
Interest received | 25,872 | 10,930 | 7,028 |
Restricted cash | 42,915 | (42,915) | |
Net cash used in investing activities | (320,378) | (631,401) | (175,597) |
Financing activities: | |||
Proceeds from borrowings | 1,520,000 | 1,712,207 | 104,500 |
Repayment of borrowings | (646,716) | (1,757,112) | (83,041) |
Repayment of derivative financial instruments | (18,172) | ||
Bond emission costs | (18,931) | ||
Interest paid on borrowings | (49,123) | (121,297) | (82,654) |
Restricted cash | 22,940 | ||
Lease payments | (6,899) | (8,825) | (12,325) |
Cash received for issuance of shares | 250,295 | ||
Dividends paid | (1,400,000) | (830,000) | (342,955) |
Net cash used in financing activities | (619,841) | (754,732) | (393,535) |
Increase in cash and cash equivalents | 525,378 | 436,123 | 36,314 |
Cash and cash equivalents at the beginning of year | 649,820 | 213,697 | 177,383 |
Cash and cash equivalents at the end of year | $ 1,175,198 | $ 649,820 | $ 213,697 |
Nature of business and signific
Nature of business and significant events | 12 Months Ended |
Dec. 31, 2021 | |
Nature of business and significant events | |
Nature of business and significant events | 1. Betterware de México, S.A.P.I. de C.V. (formerly Betterware de México, S.A.B. de C.V.) (“Betterware”) is a direct-to-consumer selling company, focused on the home organization sector, whose product portfolio includes home organization products, kitchen utensils and appliances, food containers, and other categories of products (“home organization products”). Betterware purchases these home organization products and sells them in twelve catalogs published throughout the year. Betterware’s controlling shareholder is Campalier, S.A. de C.V. (“Campalier”). BLSM Latino America Servicios, S.A. de C.V., (“BLSM”), which as of March 10, 2020, became a wholly-owned subsidiary of Betterware, provided administrative, technical, and operational services to Betterware until June 30, 2021 (formerly a related party of Betterware). On July 1 st Betterware and BLSM (hereinafter jointly referred to as the “Group” or the “Company”) are entities incorporated in Mexico that carry out their operations in Mexico. 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. Significant events and transactions – 2021 a) The Company´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. b) On August 30,2021 Betterware successfully concluded the offering of 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 (see Note 15). 2020 c) As a result of the coronavirus (COVID-19) outbreak and its global spread to a large number of countries, the World Health Organization classified the viral outbreak as a pandemic on March 11, 2020. Public health measures were taken in Mexico to limit the spread of this virus, including but not limited to, social isolation and the closure of educational centers (schools and universities), commercial establishments and non-essential businesses. The Group’s operations were not interrupted as a result of the COVID-19 pandemic, as its product lines include hygiene and cleaning solutions, which qualify as an essential activity in Mexico. The Group’s gross margin was negatively affected by the depreciation of the Mexican peso compared to the US dollar, since 90% of its products sold are in US dollars. To mitigate this risk, the Company enters into forwards contracts to fix the exchange rate for future purchases in US dollars, which allowed it to partially reduce the effects of the exchange rate due to the COVID-19 pandemic. The Group implemented a proven track record of performance and a clear and executable growth plan, which includes expansion in current geographies and categories, as well as the addition of new markets and product extensions, all supported by a strong infrastructure deeply rooted in business intelligence. The Company maintained sufficient liquidity to comply with its contractual obligations as a result of having financing sources, in addition, the payment conditions of its clients are maintained between 14 d) On March 10, 2020, Betterware’s legal name changed from Betterware de México, S.A. de C.V. to Betterware de México, S.A.P.I. de C.V. On August 5, 2019, Betterware and DD3 Acquisition Corp. (“DD3”, a publicly listed entity in the US and whose shares were trading on the Nasdaq Capital Market (“Nasdaq”)), announced they had entered into a business combination agreement. As part of this transaction, DD3 merged into Betterware through an exchange of shares with their respective shareholders and Betterware survived as the acquiror. BLSM would became a wholly-owned subsidiary of Betterware. The transaction closed on March 13, 2020, and as a result, all Betterware shares that were issued and outstanding immediately prior to the closing date were canceled and new shares were issued. This transaction was accounted as a capital reorganization, whereby Betterware issued shares to the DD3 shareholders and obtained US$ 22,767 (Ps. 498,445 ) in cash through the acquisition of DD3 and, simultaneously settled liabilities and related transaction costs on that date, for net cash earnings of US$ 7,519 (Ps. 181,734 ) on such date. In addition, Betterware assumed the obligation of the warrants issued by DD3 (see description below), a liability inherent to the transaction, equivalent to the fair value of Ps. 55,810 of the warrants. No other assets or liabilities were transferred as part of the transaction that required adjustment to fair value as a result of the acquisition. On the same date, 2,040,000 Betterware shares, that were offered for subscription and payment under its initial public offering on Nasdaq, were subscribed and paid for by different investors. As of the closing date of the transaction, BLSM became in a fully-owned subsidiary of Betterware. The acquisition by Betterware of BLSM was considered a common control transaction and accounted for as a pooling of interests, whereby the historical values of BLSM’s assets and liabilities where the same before and after. As a result of the transaction, Betterware’s original shareholders held 87.7% of the total outstanding shares; DD3 shareholders obtained a 6.4% stake, and investors under the Nasdaq listing, a 5.9% shake. After the closing date, Betterware had 34,451,020 issued and outstanding shares. e) On March 10, 2020 and as a result of the aforementioned transaction, the warrants that DD3 had issued were automatically converted into warrants for the purchase of a total of 5,804,125 Betterware shares. Such warrants were exercised in accordance with the terms of the warrant agreement governing those securities, which also considered the option to purchase 250,000 units that automatically became an option to issue 250,000 Betterware shares and warrants to buy 250,000 additional Betterware shares. This purchase option of units resulted in the issuance of 214,020 Betterware shares, which were exercised on a cashless basis. Warrants could be exercised starting on April 12, 2020, and expired on November 9, 2020 (see Note 1.i). The exercise price of the warrants was US$ 11.50 per share, adjusted by dividends paid that exceeded US$ 0.50 per share within a year, resulting in an exercise price of US$ 11.44 . As warrants and securities purchase options (and underlying securities) were exercised in the 53-week period ended January 3, 2021, additional Betterware shares were issued, resulting in a dilution for Betterware shareholders and increasing the number of Betterware shares eligible for resale in the public market. f) On July 30, 2020, Betterware modified the long-term share-based incentive plan with certain officers and directors (“Incentive Plan”) granted on August 15, 2019. The purpose of the Incentive Plan was and remains being to provide eligible officers and directors with the opportunity to receive share-based incentives to encourage them to contribute significantly to the growth of the Group and to align the economic interests of those individuals with those of the shareholders. The delivery of certain shares to the executives and directors was agreed and approved by the Board of Directors. The Incentive Plan is aligned with the shareholders’ interest in terms of the management capacity to obtain operating results that potentially benefit the share price; if the established results are achieved, it will cause a gradual delivery of shares over a period of 4 to 5 years (see Note 22). g) On July 14, 2020, Betterware’s legal name changed from Betterware de México, S.A.P.I. de C.V. to Betterware de México, S.A.B. de C.V. h) On August 28, 2020, the Company filed a Registration Statement on Form F-1 with the SEC in order to (i) register the warrants that were protected under the Registration Rights Agreement, and (ii) modify the Registration Declaration on Form F-4 that had been filed with the SEC on January 22, 2020. In the terms established in the Registration Declaration, it was effective on September 11, 2020. The registration of Form F-1 triggered the investors rights to exercise their warrants on a cash basis. i) On October 8, 2020, the Company announced that, based on the agreements reached at the Ordinary General Shareholders’ meeting held on October 2, 2020, it would carry out the redemption of all outstanding warrants for the purchase of shares of the Group. As a result of the redemption, a “cashless” exercise of the warrants was considered for an exercise price of US$ 11.44 per share, expiring on November 9, 2020, with which the warrant holders would receive 0.37 shares of the Company for each warrant that was redeemed. j) On December 14, 2020, Betterware and Promotora Forteza, S.A. de C.V. (“Forteza”, and one of Betterware’s shareholder), entered into a merger agreement pursuant to which Forteza agreed to merge with and into Betterware, surviving Betterware as the acquiror. On December 16, 2020, the merger was completed. Consequently, considering that Forteza was a Betterware shareholder, the number of Betterware shares were delivered to Forteza’s shareholders in proportion to their shareholding in Betterware, without implying an increase in Betterware’s share capital or in the total number of outstanding shares of the Company. The net effects of the merger was an increase in equity of Ps. 4,724 . 2019 k) During August 2019, the Group started building a distribution center which were completed in the first quarter of 2021. At the end of the years 2021, 2020 and 2019, payments related to this construction amounted to Ps. 397,000 , Ps. 508,958 and Ps. 165,000 , respectively. The total investment amounted Ps. 1,070,958 . |
Significant accounting policies
Significant accounting policies | 12 Months Ended |
Dec. 31, 2021 | |
Significant accounting policies | |
Significant accounting policies | 2. Significant accounting policies a. Basis of preparation The consolidated and combined financial statements of 2021 include the financial statements of Betterware, BLSM, GurúComm, Innova Catálogos, Programa Lazos and Betterware de Guatemala (the “consolidated and combined financial statements”). Prior to the merger transaction disclosed in Note 1.d, Betterware and BLSM were subsidiaries under the common control of Campalier, operating under common management; therefore, combined financial statements of these entities were prepared as of December 31, 2019. On March 10, 2020, BLSM became a subsidiary of Betterware resulting in the preparation of its consolidated financial statements as of such date. As a result, the combined statement of changes in stockholders’ equity for the year ended on December 31, 2019, present the net parent investment gross by including contributed capital and retained earnings (rather than net as presented in prior years), as management believes it is a preferable presentation for comparability purposes with the share structure and presentation as of and for the year ended December 31, 2021 and the 53-week period ended January 3, 2021. On March 12, 2021, GurúComm became a subsidiary of Betterware and later on July 22, 2021, Innova Catálogos, S.A. de C.V., became a subsidiary of Betterware. Until 2020, Betterware’s financial year was a 52- or 53-weeks period ending on the Sunday nearest to December 31, however, due to the fact that in 2021 Betterware placed debt on the Mexican Stock Exchange, the financial period must be presented in compliance with the Mexican General Corporate Law, which must coincide with the calendar year, therefore the financial information of 2021 is presented as of December 31, 2021 and for the year then ended. The comparative financial year of 2020 and of 2019 consisted of 53 and 52 weeks ended on January 3, 2021, and December 31, 2019, respectively, which were not adjusted to calendar year because the effects of the change are not significant. The financial information as of December 31, 2021, and for the year then ended is also herein referred to the 2021 period (the “2021 period” or the “period of 2021”). The financial information as of January 3, 2021, and for the 53-week period ended on such date is also herein referred to the 2020 period (the “2020 period” or the “period of 2020”). The financial information for the year ended December 31, 2019 (equivalent to a 52-week period) is also herein referred to the 2019 period (the “2019 period” or the “period of 2019”). Transactions among Betterware and its subsidiaries: BLSM GurúComm, Innova Catálogos, Programa Lazos and Betterware de Guatemala, and the balances and unrealized gains or losses arising from intra-group transactions have been eliminated in the preparation of the consolidated and combined financial statements. b. Basis of accounting The consolidated and combined financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). c. Basis of measurement The consolidated and combined financial statements have been prepared on the historical cost basis except for certain financial instruments measured at fair value. Functional and presentation currency These consolidated and combined financial statements are presented in Mexican pesos (“Ps or $”), which is the Group’s functional currency. All financial information presented in Mexican pesos has been rounded to the nearest thousand (except where otherwise specified). When referring to U.S. dollars (“US$”), means thousands of United States dollars. Consolidated and combined statement of profit or loss and other comprehensive income The Group opted to present a single consolidated and combined statement of profit or loss and comprehensive income, combining and consolidating the presentation of profit and loss, including an operating profit line item, and comprehensive income in the same statement. Due to the commercial activities of the Group, costs and expenses presented in the consolidated and combined statements of profit or loss and other comprehensive income were classified according to their function. Accordingly, cost of sales and operating expenses were presented separately. d. Basis of consolidation The consolidated financial statements of the Group, incorporate the financial statements of the Betterware, and the entities controlled by Betterware: BLSM, GurúComm, S.A.P.I. de C.V., Betterware de Guatemala, S.A., Programa Lazos, S.A. de C.V., and Innova Catálogos, S.A. de C.V. Control is achived when the Company: ● Has the power over the investee ● Is exposed, or has rights, to variable returns from its involvement with the investee ● Has the ability to use its power to affect its returns The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. When the Company has less than a majority of the voting rights of an investee, it considers that it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances an assessing whether or not the Company´s voting rights in an investee are sufficient to give power, including: ● The size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders. ● Potential voting rights held by the Company, other vote holders or other parties. ● Rights arising from other contractual arrangements; and ● Any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the year are included in profit or loss from the date the Company gains control until the date when the Company ceases to control the subsidiary. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with the Group’s accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation. Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. Those interests of non-controlling shareholders that are present ownership interests entitling their holders to a proportionate share of net assets upon liquidation may initially be measured at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets. The choice of measurement is made on an acquisition-by-acquisition basis. Other non-controlling interests are initially measured at fair value. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of the subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amount of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company. When the Group loses control of a subsidiary, the gain or loss on disposal recognized in profit or loss is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), less liabilities of the subsidiary and any non-controlling interests. All amounts previously recognized in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as required/permitted by applicable IFRS Standards). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IFRS 9 Financial Instruments when applicable, or the cost on initial recognition of an investment in an associate or a joint venture. Betterware, has control over its subsidiaries due to the shares and voting rights acquired, which generate rights over the variable returns from the subsidiaries, and has the ability to influence those returns through his power over them. As of December 31, 2021, the percentage of participation that it maintains over its subsidiaries are the following: Participation´s % BLSM Latino America Servicios, S.A. de C.V. 99% GurúComm, S.A.P.I. de C.V. 60% Betterware de Guatemala, S.A. 70% Programa Lazos, S.A. de C.V. 70% Innova Catálogos, S.A. de C.V. 70% e. Cash and cash equivalents and restricted cash Cash and cash equivalents consist mainly of bank deposits and short-term investments in securities, highly liquid and easily convertible into cash in a period no longer than three months. Cash is stated at nominal value and cash equivalents are valued at fair value. Any cash or cash equivalent that cannot be disposed of in less than three months is classified as restricted cash. In cases where the definition of cash and cash equivalents is not met due to restrictions, the amounts are presented in a separate line in the consolidated and combined statements of financial position and is excluded from cash and cash equivalents in the consolidated and combined statements and cash flows. f. Financial instruments Financial assets and financial liabilities are recognized in the Group’s consolidated and combined statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. g. Financial assets All recognized financial assets are measured subsequently in their entirety at either amortized cost or fair value, depending on the classification of the financial assets. Classification of financial assets Debt instruments that meet the following conditions are measured subsequently at amortized cost: ● the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and ● the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding. Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI): ● the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and ● the contractual terms of the financial asset give rise on specified dates to cash flows that are SPPI on the principal amount outstanding. By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL). Despite the foregoing, the Group may make the following irrevocable election/designation at initial recognition of a financial asset: ● the Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met; and ● the Group may irrevocably designate a debt investment that meets the amortized cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch. Amortized cost and effective interest method The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The amortized cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortized cost of a financial asset before adjusting for any loss allowance. Foreign exchange gains and losses T Impairment of financial assets The Group always recognizes lifetime expected credit losses (“ECL”) for trade receivables. The expected credit losses on these financial assets are estimated using the simplified approach by using a provision matrix, estimated based on historical credit loss experience based on the past due status of the debtors, adjusted as appropriate to reflect current conditions and estimates of future economic conditions. For financial assets that are not subject to the simplified approach, the Group recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. Write-off policy The Group writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g., when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or in the case of trade receivables, when the amounts are over one year past due, whichever occurs sooner. Financial assets written off may still be subject to enforcement activities under the Group’s recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognized in profit or loss. h. Financial liabilities All financial liabilities are measured subsequently at amortized cost using the effective interest method or at FVTPL. Financial liabilities at FVTPL are measured at fair value, with any gains or losses arising on changes in fair value recognized in profit or loss to the extent that they are not part of a designated hedging relationship. Financial liabilities and equity Classification as debt or equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. Financial liabilities measured subsequently at amortized cost Financial liabilities that are not (i) contingent consideration of an acquirer in a business condensation combination and consolidation, (ii) held-for-trading, or (iii) designated as at FVTPL, are measured subsequently at amortized cost using the effective interest method. The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortized cost of a financial liability. Foreign exchange gains and losses For financial liabilities that are denominated in a foreign currency and are measured at amortized cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortized cost of the instruments. These foreign exchange gains and losses are recognized in the ‘Foreign exchange (loss) gain, net’ line item in the consolidated and combined Statements of Profit or Loss and Other Comprehensive Income for financial liabilities that are not part of a designated hedging relationship. The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognized in profit or loss for financial liabilities that are not part of a designated hedging relationship. Derecognition of financial liabilities The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged, canceled or have expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss. When the Group exchanges with the existing lender one debt instrument into another one with the substantially different terms, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the Group accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability and the recognition of a new liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective rate is at least 10 per cent different from the discounted present value of the remaining cash flows of the original financial liability. If the modification is not substantial, the difference between (1) the carrying amount of the liability before the modification; and (2) the present value of the cash flows after modification should be recognized in profit or loss as the modification gain or loss within other gains and losses. i. Derivative financial instruments The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including foreign exchange forward contracts and interest rate swaps. Further details of derivative financial instruments are disclosed in Note 18. Derivatives are recognized initially at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as a financial liability. Derivatives are not offset in the consolidated and combined financial statements unless the Group has both legal right and intention to offset. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realized or settled within 12 months. Other derivatives are presented as current assets or current liabilities. Warrants The warrants meet the definition of a derivative financial instrument as they represent a written put option that gives the holders of the warrants the right to exchange them for the Group’s shares at a fixed price. Although the warrants will be exchanged for the Group’s shares based on the terms of the warrant agreement, the warrants were classified as a derivative financial liability measured at FVTPL, and not as an equity instrument, given that the functional currency of the Company (MXN) differs from the strike-price of the warrants, which is fixed in USD. Changes in the fair value of the financial liability are presented in the consolidated and combined statements of profit or loss under the heading “Loss in valuation of warrants”. For purposes of the Company’s adjusted EBITDA, the changes in the fair value of the liability are excluded as they represent non-cash charges. The exchange of warrants for the Group’s shares give rise to the settlement of the obligation associated with the liability with a corresponding increase in equity. The redemption of warrants will result in a net impact in equity resulting from the increase in their fair value is recorded in profit or loss (reducing retained earnings), offset by the equivalent increase in equity as a result of the issuance of shares. j. Inventories and cost of sales Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on weighted-average. The net realizable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. k. Prepaid expenses Prepaid expenses are mainly comprised of advanced payments for printed catalogs, as well as, advanced payments for the purchase of inventories that are received after the date of the consolidated and combined statement of financial position and during the normal course of business, and they are presented in current assets in accordance with the classification of the destination item. l. Other assets Other assets mainly include inventory of rewards, and rent security deposits. They are presented in current or non-current assets in accordance with the classification of the destination item. Under the reward program, the Group grants reward points to its distributors for the recruitment of associates, while associates receive such points for the referral of new associates within a catalogue. These points are exchangeable for products that Betterware acquires from other suppliers, which are not related to a revenue contract. The points expire based on commercial terms established by the Group that can be modified at management’s discretion. Inventory of rewards mainly consist of certain products and items (in the form of rewards) that Betterware acquires with the purpose to encourage sales among the distributors and associates. Such inventory is acquired once the distributors and associates redeem the reward points that are granted by the Group so that the balance of inventory at each reporting period only relates to items already redeemed but not delivered. Inventory of rewards are recognized at cost of acquisition. m. Property, plant and equipment, net Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. If significant parts of an item have different useful lives, then they are accounted for as separate items (major components). Depreciation is recognized using the straight-line method. The estimated useful lives and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The following useful lives, considering separately each of the asset's components, are used in the calculation of depreciation: Buildings 5 Molds 5 years Vehicles 4 years Computers and equipment 3 Leasehold improvements 3 years Property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss. Borrowing costs directly attributable to the acquisition or construction of qualifying assets (designated asset), which are assets that necessarily take a substantial period of time before they are available for their intended use, are added to the cost of those assets, until such time as the assets are available for their intended use. If any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalization rate on general borrowings. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are recognized in profit or loss in the period in which they are incurred. n. Intangible assets ● Brand This is an intangible asset with an indefinite useful life and corresponds mainly to the value of the “Betterware” brand, which was transmitted to the Group through a merger with Strevo Holding, S.A. de C.V. (“Strevo”, an unrelated third party) on July 28, 2017. This intangible asset is subject to annual impairment testing, and whenever there is an indication that the asset may be impaired. Additionally, the Group has incurred expenditures related to registration of trademark rights, which have a finite life. Such expenditures are amortized on a straight-line basis over their estimated useful lives which range from 10 ● Customers relationship This is an intangible asset with a definite useful life of ten years and is being amortized on a straight-line basis. It was transmitted to the Group through a merger with Strevo on July 28, 2017. This intangible asset is subject to impairment testing whenever there is an indication that the asset may be impaired. ● Derecognition of intangible assets An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized. o. Impairment of tangible and intangible assets other than goodwill At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise, they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Any impairment is recognized immediately in profit or loss. When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in profit or loss unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. p. Goodwill Goodwill represents the excess of the acquisition cost of a subsidiary over the Company´s interest in the fair values of the net assets acquired determined at the date of acquisition and is not subject to amortization. Goodwill is not amortized but is tested annually for impairment. Goodwill arising from a business combination is allocated to the cash generating unit (“CGU”) receiving a benefit from the synergies of the combination. An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other long-lived assets in the CGU on a pro rata basis. An impairment loss in respect of goodwill is not reversed. q. Leases The Group as lessee The Group evaluates whether a contract is or contains a lease agreement at inception of a contract. A lease is defined as an agreement or part of an agreement that conveys the right to control the use of an identified asset for a period of time in exchange for a consideration. The Group recognizes an asset for right-of-use and the corresponding lease liability, for all lease agreements in which it acts as lessee, except in the following cases: short-term leases (defined as leases with a lease term of less than 12 months); leases of low-value assets (defined as leases of assets with an individual market value of less than US$5,000 (five thousand dollars)); and, lease agreements whose payments are variable (without any contractually defined fixed payment). For these agreements, which exempt the recognition of an asset for right-of-use and a lease liability, the Group recognizes the rent payments as an operating expense in a straight-line method over the lease period. The right-of-use asset comprises all lease payments discounted at present value; the direct costs to obtain a lease; the advance lease payments; and the obligations of dismantling or removal of assets. The Group depreciates the right-of-use asset over the shorter of the lease term or the useful life of the underlying asset; therefore, when the lessee will exercise a purchase option, the lessee shall depreciate the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Depreciation begins on the lease commencement date. The lease liability is initially measured at the present value of the future minimum lease payments that have not been paid at that date, using a discount rate that reflects the cost of obtaining funds for an amount similar to the value of the lease payments, for the acquisition of the underlying asset, in the same currency and for a similar |
Changes in significant accounti
Changes in significant accounting policies | 12 Months Ended |
Dec. 31, 2021 | |
Changes in significant accounting policies | |
Changes in significant accounting policies | 3. a. Application of new and revised International Financing Reporting Standards (“IFRSs” or “IAS”) that are mandatorily effective for the current year In the current year, the Group has applied a number of new and amended IFRS and interpretations issued by the International Accounting Standards Board (“IASB”) that are mandatorily effective for an accounting period that begins on or after January 1, 2021. The conclusions related to their adoption are described as follows: New and amended IFRS Standards that are effective for the current year Phase 2 of the benchmark interest rate reform (IBOR- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) Interbank benchmark rates such as LIBOR, EURIBOR and TIBOR, which represent the cost of obtaining unsecured funds, have been questioned about their viability as long-term financing benchmarks. The changes in the reform to the reference interest rates in its phase 2 refer to the modifications of financial assets, financial liabilities and lease liabilities, requirements for accounting coverage and disclosure of financial instruments. These improvements are effective as of January 1, 2021, with retrospective application, without the need to redo the comparative periods. Regarding the modification of financial assets, financial liabilities and lease liabilities, the IASB introduced a practical expedient that involves updating the effective interest rate. At the time a fall-back clause is activated due to the substitution of the reference rate defined in the contract, without requiring recognition of a change in the valuation of the financial instrument. On the other hand, regarding hedge accounting, the hedge relationships and documentation must reflect the modifications to the hedged item, the hedging instrument and the risk to be hedged. Hedging relationships must meet all criteria for applying hedge accounting, including effectiveness requirements. Finally, regarding disclosures, entities should disclose how they are managing the transition to alternative reference rates and the risks that may arise from the transition; in addition, they must include quantitative information on financial assets and non-derivative financial liabilities, as well as non-derivative financial instruments, that continue under the reference rates subject to the reform and the changes that have arisen to the risk management strategy. The Company evaluated the impacts arising from the application of these amendments, however it does not have a material impact on its consolidated financial position or results of operations, due to the Company does not maintain financial instruments related to LIBOR rate. Amendments to IFRS 16, Rent concessions related to Covid-19 The amendments introduce a practical expedient that provides lessees the option not to assess whether a rent concession that meets certain conditions is a lease modification. The practical expedient is applicable to rent concessions occurring as a direct consequence of the Covid-19 pandemic and only if all of the following conditions are met: a) The change in the lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change. b) Any reduction in lease payments affects only payments originally due on or before June 30, 2022 (previously on or before June 30, 2021); and c) There is no substantive change to other terms and conditions of the lease. The Group determined there were no impacts on the adoption of these amendments, considering that it did not enter into rental concessions for the leases that it maintains as a lessee Additionally, the Group adopted the following amendments, which did not have any effects on the financial statements in the current year: ● Amendments to IAS 1 and IAS 8, Definition of material ● Amendments to IFRS 3, Definition of a business ● Amendments to IFRS 4, Insurance Contracts in the application of IFRS 9, Financial Instruments ● Amendments to IFRS 9, IAS 39 and IFRS 7, Interest rate benchmark reform – Phase 1 ● Amendments to the IFRS’s conceptual framework New and revised IFRS Standards in issue but not yet effective At the issuance date of these financial statements, the Group has not applied the following new and revised IFRS that have been issued but are not yet effective. Based on management’s analysis, the Group does not expect that the adoption of the following standards will have a material impact on the financial statements in future periods: ● Amendments to IAS 1, Classification of liabilities as current or non-current (1) ● Amendments to IAS 16, Property, plant and equipment - proceeds before intended use (1) ● Amendments to IAS 37, Onerous contract - Cost of fulfilling a contract (1) ● Amendments to IFRS 9, Financial instruments (1) ● Amendments to IAS 41, Biological Assets (1) ● Amendments to IAS 1, and Statement of practice 2 - Disclosure of accounting policies (2) ● Amendments to IAS 8, Disclosure of accounting estimates (2) ● Amendments to IAS 12, Deferred tax related to assets and liabilities arising from a single transaction (2) ● IFRS 17, Insurance Contracts (2) (1) Effective for annual reporting periods beginning on January 1, 2022 (2) Effective for annual reporting periods beginning on January 1, 2023 |
Critical accounting judgments a
Critical accounting judgments and key sources of estimation uncertainty | 12 Months Ended |
Dec. 31, 2021 | |
Critical accounting judgments and key sources of estimation uncertainty | |
Critical accounting judgments and key sources of estimation uncertainty | 4. In the application of the Group’s accounting policies, which are described in Note 2, management of the Group is required to make judgments, estimates, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The judgments, estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. Management has exercised the following critical judgments in the process of applying its accounting policies, which is considered to have the most significant effect on the amounts recognized in the consolidated and combined financial statements: - Contingencies Management makes judgments and estimates in recording provisions for matters relating to claims and litigation. Actual costs may vary from estimates for several reasons, such as changes in cost estimates for resolution of complaints and disputes based on different interpretations of the law, opinions and evaluations concerning the amount of loss. Contingencies are recorded as provisions when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. It is not practical to estimate sensitivity to potential losses if other assumptions were used to record these provisions, due to the number of underlying assumptions and the range of possible reasonable outcomes regarding potential actions by third parties, such as regulators, both in terms of loss probability and estimates of such loss. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The significant estimates impacting the Group’s consolidated and combined financial statements are as follows: - Key assumptions used in impairment testing on long-lived assets The Group performs annual impairment testing on long-lived assets, for which key assumptions are used in the calculation of the recoverable amount (see Note 11). For impairment testing, goodwill is allocated to the cash-generating unit (“CGU”) from which the Group has considered that economic and operational synergies of business combinations are generated. The recoverable amounts of the CGU have been determined based on the calculations of their value in use, which require the use of estimates. The most significant of these estimates are as follows ● Estimates of future gross and operating margins, according to the historical performance and industry expectations of the CGU. ● Discount rate based on the weighted average cost of capital (WACC) of the CGU. ● Long-term growth rates. - Estimation of probability of default and recovery rate to apply the model of expected losses in the impairment of financials assets The Group assigns to the debtors with whom it maintains an account receivable at each reporting date, either individually or as a group, an estimate of the probability of default in the payment of accounts receivable and the estimated recovery rate, in order to reflect the cash flows that are expected to be received from the current assets on that date. |
Cash and cash equivalents
Cash and cash equivalents | 12 Months Ended |
Dec. 31, 2021 | |
Cash and cash equivalents | |
Cash and cash equivalents | 5. 2021 2020 2019 Cash on hand in banks Ps. 951,092 629,146 96,008 Time deposits 224,106 20,674 117,689 Ps. 1,175,198 649,820 213,697 As of December 31, 2021, and 2019 the Group did not maintain restricted cash. As of January 3, 2021, cash and cash equivalents balance excluded an amount of Ps. 42,915 of restricted cash derived from the guarantee of some forwards which were due between May and August 2021, which was presented as a current asset in the consolidated and combined statement of financial position (see Note 9) and under investing activities in the consolidated and combined statements of cash flows. |
Trade accounts receivables
Trade accounts receivables | 12 Months Ended |
Dec. 31, 2021 | |
Trade accounts receivables | |
Trade accounts receivables | 6. 2021 2020 2019 Trade account receivables Ps. 868,218 766,889 260,727 Expected credit loss (90,164) (9,083) (13,640) Ps. 778,054 757,806 247,087 The trade accounts receivable detailed above are measured at their amortized cost. The average, with respect to the turnover of accounts receivable, is from 14 to 28 days as of December 31, 2021, and January 3, 2021, and 30 days as of December 31, 2019. No interest is charged on pending accounts receivable. The Group measures the loss reserve for commercial accounts receivable in an amount equal to the expected lifetime credit loss. Expected credit losses in accounts receivable are estimated using a provisions matrix with reference to the debtor's previous default history and an analysis of the debtor's current financial situation, adjusted for factors specific to the debtors and the general economic conditions of the industry in which the debtors operate, and assessing both current and predicted conditions as of the reporting date. The Group’s significant growth in recent years combined with the impacts of the COVID-19 pandemic have caused volatility in collections. Because of this, management has applied significant judgment in evaluating and giving effect to historical loss information in estimated expected credit losses. The Group cancels an account receivable when there is information that indicates that the debtor is experiencing serious financial difficulties and there is no realistic prospect of recovery, e.g., when the debtor has been placed in liquidation or has entered bankruptcy proceedings, or when a commercial account receivable is more than one year old, whichever occurs first. For the periods ended December 31, 2021, January 3, 2021, and December 31, 2019, Ps. 117,414, Ps. 62,184 and Ps. 18,215 have been canceled, respectively. The following table shows the expected lifetime credit loss recognized for accounts receivable in accordance with the simplified approach established in IFRS 9. Trade receivables – days past due Not past As of December 31, 2021 due 14-21 21 – 28 >28 Total Expected credit loss rate 1 % 27 % 60 % 28 % Estimated total gross carrying amount at default Ps. 593,104 31,439 22,463 221,212 868,218 Expected credit loss Ps. 6,814 8,338 13,386 61,626 90,164 Trade receivables – days past due Not past As of January 03, 2021 due 14-21 21 – 28 >28 Total Expected credit loss rate 2 % 30 % 62 % 33 % Estimated total gross carrying amount at default Ps. 539,693 31,918 17,772 53,743 643,126 Expected credit loss Ps. 8,163 9,588 10,946 17,563 46,260 Trade receivables – days past due Not past As of December 31, 2019 due 14-21 21 – 28 >28 Total Expected credit loss rate 2 % 20 % 49 % 42 % Estimated total gross carrying amount at default Ps. 207,032 12,098 7,045 29,807 255,982 Expected credit loss Ps. 3,950 2,454 3,477 12,634 22,515 The following table shows the movement in lifetime expected credit loss that has been recognized for trade account receivables in accordance with the simplified approach set out in IFRS 9. Total Balance as of January 01, 2019 Ps. (9,340) Expected credit loss (22,515) Amounts written off 18,215 Balance as of December 31, 2019 (13,640) Expected credit loss (46,260) Specific credit loss (11,367) Amounts written off 62,184 Balance as of January 03, 2021 (9,083) Expected credit loss (198,495) Amounts written off 117,414 Balance as of December 31, 2021 Ps. (90,164) |
Inventories and cost of sales
Inventories and cost of sales | 12 Months Ended |
Dec. 31, 2021 | |
Inventories and cost of sales | |
Inventories and cost of sales | 7. 2021 2020 2019 Finished goods Ps. 901,523 904,999 224,025 Packing material 35,718 26,029 4,577 937,241 931,028 228,602 Merchandise in transit 402,137 342,998 116,952 Ps. 1,339,378 1,274,026 345,554 The cost of inventories recognized in income within cost of sales of the year was Ps. 4,399,164, Ps. 3,290,994 and Ps. 1,280,829 for the periods of 2021, 2020 and 2019. The cost of inventories recognized as an expense includes Ps. 43,645, Ps. 24,438 and Ps. 14,273 for the periods 2021, 2020 and 2019, respectively, in respect of write-downs of inventory to net realizable value. Such write-downs have been recognized to account for obsolete inventories. |
Prepaid expenses
Prepaid expenses | 12 Months Ended |
Dec. 31, 2021 | |
Prepaid expenses | |
Prepaid expenses | 8. 2021 2020 2019 Printed catalogs Ps. 33,628 41,920 21,692 Premiums paid in advance for insurance 16,961 10,061 9,628 Advances to suppliers 1,320 2,689 12,973 Other 17,315 39,831 8,891 Ps. 69,224 94,501 53,184 |
Other assets
Other assets | 12 Months Ended |
Dec. 31, 2021 | |
Other assets | |
Other assets | 9. 2021 2020 2019 Inventory of rewards Ps. 54,247 28,804 13,315 Rewards catalogs 12,067 10,492 — Recoverable taxes 10,725 44,618 — Security deposit 4,274 5,774 3,549 Restricted cash — 42,915 — Transaction costs of the merger — — 9,822 Other receivables 4,949 3,588 7,259 86,262 136,191 33,945 Current 81,988 130,417 20,574 Non-current 4,274 5,774 13,371 Ps. 86,262 136,191 33,945 |
Property, plant and equipment,
Property, plant and equipment, net | 12 Months Ended |
Dec. 31, 2021 | |
Property, plant and equipment, net | |
Property, plant and equipment, net | 10. 2021 2020 2019 Acquisition cost Ps. 1,231,794 905,840 305,874 Accumulated depreciation (162,302) (114,713) (98,524) Ps. 1,069,492 791,127 207,350 As of As of January 01, December 31, Acquisition cost: 2019 Additions Disposals 2019 Land Ps. — 47,124 — 47,124 Molds 37,515 3,754 — 41,269 Vehicles 1,602 — — 1,602 Computers and equipment 59,640 7,183 — 66,823 Leasehold improvements 24,492 5,390 — 29,882 Construction in progress — 119,174 — 119,174 Ps. 123,249 182,625 — 305,874 As of As of January 01, Depreciation December 31, Accumulated depreciation: 2019 Additions Disposals 2019 Molds Ps. (22,963) (2,685) — (25,648) Vehicles (1,446) (59) — (1,505) Computers and equipment (36,500) (11,503) — (48,003) Leasehold improvements (19,368) (4,000) — (23,368) Ps. (80,277) (18,247) — (98,524) As of As of December 31, January 03, Acquisition cost: 2019 Additions Disposals 2021 Land Ps. 47,124 2,132 — 49,256 Molds 41,269 85,049 (22) 126,296 Vehicles 1,602 28,740 (17,235) 13,107 Computers and equipment 66,823 3,273 (2,056) 68,040 Leasehold improvements 29,882 4,426 — 34,308 Buildings — 326,644 — 326,644 Construction in progress 119,174 169,015 — 288,189 Ps. 305,874 619,279 (19,313) 905,840 As of As of December 31, Depreciation January 03, Accumulated depreciation: 2019 Additions Disposals 2021 Molds Ps. (25,648) (3,636) — (29,284) Vehicles (1,505) (633) — (2,138) Computers and equipment (48,003) (9,837) 1,043 (56,797) Leasehold improvements (23,368) (1,856) — (25,224) Buildings — (1,270) — (1,270) Ps. (98,524) (17,232) 1,043 (114,713) As of As of January 03, Acquisition of December 31, Acquisition cost: 2021 subsidiaries Additions Disposals Transferred 2021 Land Ps. 49,256 — — — — 49,256 Molds 126,296 — 82,457 (2,334) 63,729 270,148 Vehicles 13,107 — 6,046 (1,439) — 17,714 Computers and equipment 68,040 13,473 709 (19,764) 18,521 80,979 Leasehold improvements 34,308 539 119 (831) 3,980 38,115 Buildings 326,644 — — — 351,654 678,298 Construction in progress 288,189 — 246,979 — (437,884) 97,284 Ps. 905,840 14,012 336,310 (24,368) — 1,231,794 As of As of January 03, Depreciation December 31, Accumulated depreciation: 2021 expense Disposals 2021 Molds Ps. (29,284) (20,236) 759 (48,761) Vehicles (2,138) (3,162) 17 (5,283) Computers and equipment (56,797) (9,374) 11,983 (54,188) Leasehold improvements (25,224) (4,915) 203 (29,936) Buildings (1,270) (22,864) — (24,134) Ps. (114,713) (60,551) 12,962 (162,302) Depreciation expense is included in administrative expenses line in the consolidated and combined statement of profit or loss and other comprehensive income. No impairment losses have been determined. During August 2019, the Group began to build a distribution center, which was completed in the first quarter of 2021. As of December 31, 2021, January 3, 2021, and December 31, 2019, the total payments related to this construction amounted Ps. 397,000 Ps. 508,958, and Ps. 165,000, respectively. The total investment amounted to Ps. 1,070,958. For the periods of 2020 and 2019, the Group capitalized borrowing costs in the amount of Ps. 33,460 and Ps. 9,284, respectively, directly related to the distribution center that was under construction. In 2021 the Group didn´t capitalized borrowing costs related to the distribution center that was under construction. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill | |
Goodwill | 11. As of As of January 03, December 31, 2019 Additions Disposals 2019 Cost Ps. 348,441 — — 348,441 As of As of December 31, January 03, 2019 Additions Disposals 2021 Cost Ps. 348,441 — — 348,441 As of As of January 03, December 31, 2021 Additions Disposals 2021 Cost Ps. 348,441 22,634 — 371,075 As of January 3, 2021 and December 31, 2019, goodwill corresponded to the resulting excess between the consideration given and the fair values of the net assets acquired on the acquisition date by Betterware Latinoamerica Holding México, S.A. de C.V. (BLHM) and Strevo Holding, S.A. de C.V. On March 12, 2021, Betterware entered into an agreement to acquire 60% of GurúComm for Ps.45,000. GurúComm is a Mobile Virtual Network Operator ("MVNO") and communications software developer. Moreover, on July 22, 2021, Betterware entered into an agreement more to acquire 70% of Innova Catálogos, S.A. de C.V., for Ps.5,000. Innova Catálogos is a company dedicated to the purchase and sale of clothing, footwear and accessories. The goodwill addition of Ps.22,634 is the result between the consideration paid and the fair values of the net assets acquired from both companies. For impairment testing purposes, goodwill has been allocated to a cash generating unit (“CGU”). The recoverable value of the CGU was based on the fair value minus disposal costs, estimated using discounted cash flows. The fair value measurement was classified as a Level 3 fair value based on the inputs in the valuation technique used. The values assigned to the key assumptions represent the administration’s assessment of future trends in relevant industries and are based on historical data from external and internal sources. As of December 31, 2021, January 3, 2021, and December 31, 2019, the estimated recoverable amount of the CGU, exceeded its carrying amount. The key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to the key assumptions represent Management’s assessment of future trends in the relevant industries and have been based on historical data from both internal and external sources. In percentages 2021 2020 2019 Discount rate 12.8 11.2 12.4 Terminal value growth rate 3.0 3.0 3.0 Budgeted EBITDA growth rate 30.0 38.0 14.0 The discount rate was a post-tax measurement estimated based on the historical industry average, weighted-average cost of capital and a market interest rate of 5.7%, 7.3% and 7.2% as of December 31, 2021, January 3, 2021, and December 31, 2019, respectively. The cash flow projections included specific estimates for 5 years and a terminal growth rate thereafter. The terminal growth rate was determined based on management’s estimate of the long-term compound annual EBITDA growth rate, consistent with the assumptions that a market participant would make. Budgeted EBITDA was estimated taking into account past experience and a revenue growth rate projected taking into account the average growth levels experienced over the past 5 years and the estimated sales volume and price growth for the next five years. It was assumed that the sales price would increase in line with forecast inflation over the next five years. |
Intangible assets, net
Intangible assets, net | 12 Months Ended |
Dec. 31, 2021 | |
Intangible assets, net | |
Intangible assets, net | 12. As of As of January 01, December 31, Acquisition cost: 2019 Additions Disposals 2019 Brand Ps. 253,000 — — 253,000 Customer relationships 64,000 — — 64,000 Software 17,135 4,516 — 21,651 Brands and logo rights 6,209 1,399 — 7,608 Ps. 340,344 5,915 — 346,259 As of As of January 01, Amortization December 31, Accumulated amortization: 2019 expense Disposals 2019 Customer relationships Ps. (24,533) (6,400) — (30,933) Software — (421) — (421) Brands and logo rights (3,712) (228) — (3,940) Ps. (28,245) (7,049) — (35,294) As of As of December 31, January 03, Acquisition cost: 2019 Additions Disposals 2021 Brand Ps. 253,000 — — 253,000 Customer relationships 64,000 — — 64,000 Software 21,651 24,333 — 45,984 Brands and logo rights 7,608 276 (2,491) 5,393 Ps. 346,259 24,609 (2,491) 368,377 As of As of December 31, Amortization January 03, Accumulated amortization: 2019 expense Disposals 2021 Customer relationships Ps. (30,933) (6,400) — (37,333) Software (421) (6,675) — (7,096) Brands and logo rights (3,940) (647) — (4,587) Ps. (35,294) (13,722) — (49,016) As of As of January 03, December 31, Acquisition cost: 2021 Additions Disposals 2021 Brand Ps. 253,000 — — 253,000 Customer relationships 64,000 — — 64,000 Software 45,984 65,356 — 111,340 Brands and logo rights 5,393 70 — 5,463 Ps. 368,377 65,426 — 433,803 As of As of January 03, Amortization December 31, Accumulated amortization: 2021 expense Disposals 2021 Customer relationships Ps. (37,333) (6,400) — (43,733) Software (7,096) (8,377) — (15,473) Brands and logo rights (4,587) (250) — (4,837) Ps. (49,016) (15,027) — (64,043) As of December 31, 2021, January 3, 2021, and December 31, 2019, a carrying amount of Ps. 253,000 for the value of “Betterware” brand is presented in the consolidated and combined statements of financial position. Such brand was transmitted to the Group through a merger carried out on July 28, 2017 with Strevo (a related party, under common control). Strevo obtained such brand when acquiring the majority of the Group’s shares in March 2015. As of December 31, 2021, January 3, 2021, and December 31, 2019, a carrying amount of Ps. 20,267 Ps. 26,667, and Ps. 33,067, respectively, for the value of the Group’s intangible asset comprised of customers relationships, is presented in the consolidated and combined statements of financial position. Such intangible asset was transmitted to the Group through the merger carried out on July 28, 2017 with Strevo as previously discussed. This intangible asset has a useful life of ten years and is being amortized on a straight-line basis. Additionally, as of December 31, 2021, January 3, 2021, and December 31, 2019, the intangible asset line in the consolidated and combined statement of financial position includes Ps. 626, Ps. 808, and Ps. 3,668, respectively, corresponding to paid rights related to registration of brands and logos before the intellectual property authorities. Such rights are valid ranging a defined period from 10 At each reporting date, the Group reviews the carrying amounts of its non-financial assets to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. As of December 31, 2021, January 3, 2021, and December 31, 2019, no indications of impairment have been identified. In relation to impairment of intangible assets with indefinite useful life (brand), the Group estimates the recoverable amount of the intangible asset which is based on fair value less costs of disposal, estimated using discounted cash flows. The fair value measurement was categorized as a Level 3 fair value based on the inputs in the valuation technique used. Key assumptions are the same as those used for estimating the recoverable amount for Goodwill (See Note 11). |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Leases | 13. Right of use assets, net The Group leases a fleet of cars for its sales staff and qualified employees with different contract expiration dates, as well as computers and servers being the latest expiration date in April 2025. Those leases were recorded as right of use assets as follows: As of As of January 1, December 31, 2019 Additions Disposals 2019 Cost Ps. 36,909 — — 36,909 As of As of January 1, Depreciation December 31, 2019 expense Disposals 2019 Accumulated depreciation Ps. — (13,098) — (13,098) As of As of December 31, January 03, 2019 Additions Disposals 2021 Cost Ps. 36,909 20,531 (17,861) 39,579 As of As of December 31, Depreciation January 03, 2019 expense Disposals 2021 Accumulated depreciation Ps. (13,098) (12,734) 11,135 (14,697) As of As of January 03, December 31, 2021 Additions Disposals 2021 Cost Ps. 39,579 1,388 (3,275) 37,692 As of As of January 03, Depreciation December 31, 2021 expense Disposals 2021 Accumulated depreciation Ps. (14,697) (6,544) 933 (20,308) The right-of-use asset depreciation expense for the periods of 2021, 2020 and 2019 amounted to Ps.6,544, Ps.12,666 y Ps.13,098, respectively. During 2021 and 2020, the Group entered into master lease agreements of computers and servers. As of December 31, 2021, the Group lease warehouses, offices, commercial locals, and equipment, used in normal operations of the Company, to which the short-term exemption was applied, considering that the lease term was for less than one year. The rental expense for the year ended December 31, 2021, was Ps.52,660. As of January 3, 2021, and December 31, 2019, the Group leased warehouses and an administrative office space that expired on January 3, 2021, and that were renewed during the first three months of 2021 in order to relocate the operations to the new distribution center. Rental expense for the periods of 2020 and 2019 was Ps.15,703 and Ps.11,605, respectively. Lease liability The lease liabilities as of December 31, 2021, January 3, 2021, and December 31, 2019, amounted Ps. 17,880, Ps. 24,378 and Ps. 24,584, respectively. The maturity analysis of total future minimum lease payments, including non-accrued interest, is as follows: Year Amount 2022 Ps 6,543 2023 5,980 2024 3,078 2025 2,925 2026 339 Ps 18,865 Interest expense generated from the lease liability amounted to Ps. 717, Ps. 2,054 and Ps. 3,765 for the periods of 2021, 2020 and 2019, respectively. |
Accounts payable to suppliers
Accounts payable to suppliers | 12 Months Ended |
Dec. 31, 2021 | |
Accounts payable to suppliers | |
Accounts payable to suppliers | 14. Trade accounts payables to suppliers principally comprise amounts outstanding for trade purchases and ongoing costs. The average payment period is 4 months, with no interest charged. The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2021 | |
Borrowings | |
Borrowings | 15. 2021 2020 2019 Two-tranche sustainability bond, with maturities across 4 and 7 years, offered in the Mexican Market through the Bolsa Mexicana de Valores; the first offer of Ps.500,000 started paying interest at 5.15% plus 0.40% and for the monthly subsequent payments, the rate will be based on the 29-day TIIE rate issued by BANXICO plus 0.40%; the second offer of Ps.1,000,000 will pay interest semi-annually at a fixed rate of 8.35%, during the sustainability bond term. Ps. 1,482,261 — — Innova Catálogos has a loan for financial support or "Emerging Plan for the protection of employment and income of people"; The loan was acquired at the beginning of 2021, for the amount of Ps.40, with maturity across 18 months, and monthly payments of Ps.2.2, this loan does not accrue interest, however in case of default, it will accrue interest at the rate of 24% on unpaid balances. 15 — — Secured credit line with Banamex, for up to Ps.400,000, bearing interest at the TIIE rate plus 260 basis points. Withdrawals from this secured credit line can be made during a 10-month period starting December 15, 2018, and are payable on a quarterly basis from December 17, 2019, up to December 18, 2025. This secured credit line was prepaid on August 31, 2021, with the proceeds from the sustainability bond. — 373,333 135,209 Secured credit line with Banamex for up to Ps.195,000, bearing interest at the TIIE rate plus 295 basis points, payable on a quarterly basis from October 30, 2020, to December 30, 2025. This secured credit line was prepaid on August 31, 2021 with the proceeds from the sustainability bond. — 188,500 — Credit line with BBVA for up to Ps.75,000 bearing interest at 7.5%, payable monthly from September 20, 2020, to August 31, 2023. This credit line was prepaid on August 31, 2021 with the proceeds from the sustainability bond. — 64,721 — Credit line with MCRF P, S.A. de C.V. SOFOM, E.N.R. of Ps.600,000, bearing interest at a fixed rate of 13.10%. This credit line is payable on a quarterly basis starting May 15, 2019, through May 15, 2023. BLSM Latino América Servicios, S.A. de C.V., is a guarantor in this loan. — — 516,597 Unsecured credit line with Banamex, for up to Ps. — — 15,000 Interest payable Ps. 28,109 3,323 10,907 Total debt 1,510,385 629,877 677,713 Less: Current portion 28,124 105,910 148,070 Long-term debt Ps. 1,482,261 523,967 529,643 Long term debt- Offering of bonds 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 and issued at favorable conditions for the Company. The first offer of sustainability bonds for Ps.500,000 started paying interest at 5.15% plus 0.40% and for subsequent monthly payments, the rate will be based on the 29-day TIIE rate issued by Banxico plus 0.40% and the second offer of Ps.1,000,000 will pay interest semi-annually at a fixed rate of 8.35%, during the sustainability bond term. On August 31, 2021, Ps. 588,300 of proceeds received from the bond offering, were used for the prepayment of the following long-term debt: Ps.521,449 were paid to the secured credit line with Banamex, plus an additional Ps.18,172 to cancel the swap linked to that loan, and Ps.48,679 to the credit line with BBVA. The rest of the proceeds were used for general corporate purposes, including additional investments in Campus Betterware and other initiatives with positive environmental and social impacts. Banamex- Secured credit line ● On December 2018, the Group obtained a secured credit line with Banamex for an amount of Ps. 400,000 to build the new Campus Betterware. On January 30, 2020, the Group renegotiated the interest rate of the secured credit line with Banamex, which changed from the TIIE rate plus 317 basis points to the TIIE rate plus 260 basis points. In addition, withdrawals from this credit line were extended to August 2020 and were payable on a quarterly basis from September 2020 up to December 18, 2025. This loan was liquidated on August 31, 2021. ● On July 30, 2020, a total amount of Ps. 195,000 was withdrawn from a credit agreement signed on June 3, 2020, with Banamex. This loan beared interest at the TIIE rate plus 295 basis points maturing on December 30, 2025. This loan was liquidated on August 31, 2021. ● During the first seven months of 2021, Betterware made payments to secured credit line with Banamex, for Ps. 46,167 , and as of August 31, 2021, this secured credit line was liquidated totality for Ps. 521,449 , including interest. Banamex- Unsecured credit line ● Betterware has an unsecured credit line with Banamex up to Ps. 100,000 amounted to TIIE plus 285 basis points. As of December 31, 2019, the interest rate was TIIE plus 275 basis points. As of December 31, 2021, Betterware has not used this unsecured credit line. BBVA-Credit line ● On September 20, 2020, the Group entered into a credit line with BBVA for up to Ps. 75,000 bearing interest at 7.5% , payable monthly. The credit line had racks in the Group’s distribution center pledged as collateral for an amount of Ps. 80,901 . This credit line was liquidated on August 31, 2021. ● During the first seven months of 2021, Betterware made payments to credit line with BBVA, for Ps. 16,325 and as of August 31, 2021, this credit line was liquidated totality for Ps. 48,679 , including interest. HSBC-Credit line ● On March 10, 2020, Betterware entered into a current account credit line agreement with HSBC México, S.A., for an amount of Ps. 50,000 , with provisions by means of promissory notes specifying payment of principal and interest. BLSM is jointly liable for this credit. On May 4, 2020, the first amendment agreement was signed, in which the amount of the credit line was increased to Ps. 150,000 . The maturity date of this credit line is March 10, 2022, and it bears interest at the TIIE rate plus 350 basis points. During 2021 and 2020, the Group utilized Ps. 20,000 and Ps. 115,000 , respectively, of which as of December 31, 2021, and January 3, 2021, the entire amounts have been repaid. CreditSuisse- Credit line ● On March 27, 2020, the Group made a prepayment to the credit line with MCRF P, S.A. de C.V. SOFOM, E.N.R of Ps. 258,750 . In addition, on April 27, 2020, the Group paid the outstanding amount of the credit line. As of December 31, 2021, Betterware does not have payable borrowings to banks. As of December 31, 2021, January 3, 2021, and December 31, 2019, the fair value of the debt in 2021, 2020 and 2019, amounted to Ps. 1,499,867, Ps. 634,992, and Ps. 679,188, respectively. The fair value of the long term bond in 2021, was calculated based on level 1 of the value hierarchy, since its price is quoted in an active market on that date, meanwhile the fair value of borrowings in 2020 and 2019 periods, was calculated using the discounted cash flow method and the Interbank Equilibrium Interest Rate (“TIIE”, for its acronym in Spanish), adjusted for credit risk, and used to discount future cash flows. Interest expenses related to the borrowings presented above are included in the interest expense item in the consolidated and combined statement of earnings and other comprehensive income. Reconciliation of movements of liabilities to cash flows arising from financing activities The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s consolidated and combined statement of cash flows as cash flows from financing activities. Derivative Long-term debt financial and borrowings Interest payable instruments, net Balance as of January 01, 2019 Ps. 620,164 11,227 16,629 Changes that represent cash flows - Loans obtained 104,500 — — Restricted cash (1) 22,940 — — Payments (82,996) (95,033) — Changes that do not represent cash flows - Interest expense — 85,429 — Borrowing costs capitalized in PP&E — 9,284 — Valuation effects of derivative financial instruments — — 15,680 Amortization of commissions and debt issuance costs 2,198 — — Balance as of December 31, 2019 Ps. 666,806 10,907 32,309 Changes that represent cash flows - Loans obtained 1,712,207 — — Restricted cash (1) (42,915) — — Payments (1,757,112) (121,297) — Changes that do not represent cash flows - Interest expense — 80,253 — Borrowing costs capitalized in PP&E — 33,460 — Valuation effects of derivative financial instruments — — 287,985 Amortization of commissions and debt issuance costs 4,653 — — Balances as of January 03, 2021 Ps. 583,639 3,323 320,294 Changes that represent cash flows - Loans obtained 1,520,000 — — Restricted cash (1) 42,915 — — Payments (646,716) (49,123) (18,172) Bond issuance costs (18,931) — — Changes that do not represent cash flows - Interest expense — 73,909 — Control obtained over subsidiaries 177 Amortization of commissions and debt issuance cost 1,192 — — Valuation effects of derivative financial instruments — — (330,315) Balance as of December 31, 2021 Ps. 1,482,276 28,109 (28,193) (1) Balances in column “ Long-term debt” in the table above, are netted with restricted cash balances on 2020 period. The Group’s long-term debt and interest maturities as of December 31, 2021, including non-accrued interest, are as follows: Year Amount 2022 Ps. 115,343 2023 115,343 2024 115,343 2025 605,829 2026-2028 1,253,283 Ps. 2,205,141 The long-term debt has the following financial covenants: a) Pay interest: The first offer of sustainability bonds for Ps. 500,000 started paying interest at 5.15% plus 0.40% and for subsequent monthly payments, the rate will be based on the 29-day TIIE rate issued by Banxico plus 0.40% and the second offer of Ps. 1,000,000 will pay interest semi-annually at a fixed rate of 8.35% , during the sustainability bond term. b) Use the resources derived from the placement of the Stock Certificates for initiatives with positive environmental and social impacts. c) Compliance with the general provisions applicable to securities issuers and other participants; Among them, the delivery of quarterly financial information and an annual report to the Banking Commission (CNBV, for its acronym in Spanish) and Securities Commission and to the Mexican Stock Exchange (BMV, for its acronym in Spanish). d) Compliance with the general provisions applicable to entities and issuers supervised by the CNBV that hire external audit services. The credit line agreements with Banamex contained the following financial covenants: a) To maintain a short-term debt coverage ratio not lower than 1.5 . b) To maintain a total debt coverage ratio not greater than 3.0 . c) To maintain a leverage ratio not greater than 7.0 . d) To maintain a minimum cash and cash equivalents balance of Ps. 40,000 The Group was in compliance with all covenants as of December 31, 2021, January 3, 2021, and December 31, 2019. The Group obtained permission from Banamex prior to December 31, 2019. to consummate the merger disclosed in Note 1.d |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income taxes | |
Income taxes | 16. The subsidiaries of the Group in México and abroad are individually subject to the payment of income taxes. These taxes are not determined based on the consolidates figures of the Group but are calculated individually at the level of each company declaration and each of these presents its taxes separately. According to the specific requirements of each country, the statutory rates for 2021, 2020 and 2019 periods were 30% for México and 25% for Guatemala and will continue as such in future periods. Income tax recognized in profit or loss for the periods of 2021, 2020 and 2019 was comprised of the following: 2021 2020 2019 Current tax Ps. 782,901 576,834 229,900 Deferred tax expense (benefit) 41,553 (34,066) 2,792 Ps. 824,454 542,768 232,692 Income tax expense recognized at the effective ISR rate differs from income tax expense at the statutory tax rate. Reconciliation of income tax expense recognized from statutory to effective ISR rate is as follows: 2021 2020 2019 Profit before income tax Ps. 2,625,338 881,129 704,834 Tax rate 30 % 30 % 30 % Income tax expense calculated at 30% statutory tax rate 787,601 264,339 211,450 Inflation effects, net 25,039 8,333 6,278 Non-deductible expenses 5,790 5,493 3,202 Loss on valuation of warrants — 255,456 — Share-based payments 1,744 8,275 — Other items, net 4,280 872 11,762 Ps. 824,454 542,768 232,692 31 % 62 % 33 % Realization of deferred tax assets depends on the future generation of taxable income during the period in which the temporary differences will be deductible. Management considers the reversal of deferred tax liabilities and projections of future taxable income to make its assessment on the realization of deferred tax assets. Based on the results obtained in previous years and in future profit and tax projections, management has concluded that it is probable the deferred tax assets will be realized. As of December 31, 2021, January 3, 2021, and December 31, 2019, the Group had no tax loss carryforwards. Composition of the deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances as of December 31, 2021, January 3, 2021, and December 31, 2019, is presented below: Recognized in As of other As of January 01, Recognized in comprehensive December 31, Temporary differences 2019 profit or loss income 2019 Deferred tax assets: Expected credit loss Ps. 2,802 2,415 — 5,217 Accruals and provisions 26,632 (668) (26) 25,938 Derivative financial instruments 4,989 (4,989) — — Property, plant and equipment 74 4,505 — 4,579 Deferred tax liabilities: Intangible assets (87,740) 1,920 — (85,820) Inventories (6,192) (3,161) — (9,353) Derivative financial instruments — (89) — (89) Other assets and prepaid expenses (11,192) (2,699) — (13,891) Net deferred tax liability Ps. (70,627) (2,766) (26) (73,419) Recognized in As of other As of December 31, Recognized in comprehensive January 03, Temporary differences 2019 profit or loss income 2021 Deferred tax assets: Expected credit loss Ps. 5,217 (3,732) — 1,485 Accruals and provisions 25,938 42,340 360 68,638 Derivative financial instruments — 35,886 — 35,886 Property, plant and equipment 4,579 (4,579) — — Deferred tax liabilities: Intangible assets (85,820) 1,920 — (83,900) Inventories (9,353) (21,687) — (31,040) Derivative financial instruments (89) 89 — — Property, plant and equipment — (10,888) — (10,888) Other assets and prepaid expenses (13,891) (5,644) — (19,535) Net deferred tax liability Ps. (73,419) 33,705 360 (39,354) As of other As of January 03, Recognized in comprehensive December 31, Temporary differences 2021 profit or loss income 2021 Deferred tax assets: Expected credit loss Ps. 1,485 21,203 — 22,688 Accruals and provisions 68,638 (31,514) — 37,124 Derivative financial instruments 35,886 (35,886) — — Property, plant and equipment — 5,538 — 5,538 Deferred tax liabilities: Intangible assets (83,900) 1,920 — (81,980) Inventories (31,040) 830 — (30,210) Derivative financial instruments — (7,380) — (7,380) Property, plant and equipment (10,888) 10,888 — — Other assets and prepaid expenses (19,535) (7,152) — (26,687) Net deferred tax liability Ps. (39,354) (41,553) — (80,907) |
Provisions
Provisions | 12 Months Ended |
Dec. 31, 2021 | |
Provisions | |
Provisions | 17. Commissions, Bonuses and promotions and other employee Professional other benefits services fees Total As of, January 01, 2019 Ps. 35,805 1,958 1,223 38,986 Increases 345,148 90,843 2,026 438,017 Payments (348,174) (79,445) (2,695) (430,314) As of December 31, 2019 Ps. 32,779 13,356 554 46,689 Increases 1,272,651 51,253 16,947 1,340,851 Payments (1,198,284) (21,039) (17,209) (1,236,532) As of January 03, 2021 Ps. 107,146 43,570 292 151,008 Increases 2,054,420 140,130 17,541 2,212,091 Payments (2,048,135) (182,439) (17,333) (2,247,907) As of December 31, 2021 Ps. 113,431 1,261 500 115,192 Commissions, promotions and other Commissions, promotions, and other includes commissions payable to the sales force on the last week of the period, which are paid in the first week of the year or of the following period. Additionally, it includes the provision of reward points obtained by distributors and associates for the sale of products and for expanding the network of registered distributors and associates. Bonuses and other employee benefits Bonuses and other employee benefits include annual performance bonuses as well as vacation provisions, vacation bonuses, savings funds, and more. Fees for professional services Fees for professional services includes fees for services such as external audits, legal services, internal audits, and more. |
Derivative financial instrument
Derivative financial instruments | 12 Months Ended |
Dec. 31, 2021 | |
Derivative financial instruments | |
Derivative financial instruments | 18. 18.1 Interest rate and exchange rate derivatives In connection with the secured credit line for up to Ps. 400,000 contracted with Banamex, and in order to mitigate the risk of future increases in interest rates, the Group entered into a derivatives contract with Banamex, which consists of an interest rate swap. By using this interest rate swap, the Group converts its variable interest rates into fixed rates. On August 31, 2021, the SWAP with Banamex, was cancelled as the secured credit line was prepaid. A cancellation fee of Ps.18,172 was paid, as mentioned in Note 15. In addition, to reduce the risks related to fluctuations in the exchange rate of the US dollar, the Group uses derivative financial instruments such as forwards to mitigate foreign currency exposure resulting from inventory purchases made in US dollars. The details of the derivative financial instrument contracts entered into by the Group as of December 31, 2021, January 3, 2021, and December 31, 2019, are as follows: As of December 31, 2021 Notional Average amount in Fair Strike Instrument thousands Value Ps./US$ Maturity date Forwards US Dollar / Mexican Peso US$ 134,050 Ps. 28,193 20.66 Weekly, through October 2022 Total Assets Ps. 28,193 As of January 3, 2021 Notional amount in Fair Contract Maturity Rate Rate Instrument thousands Value date date received paid Liabilities: Interest rate swap Ps. 353,333 Ps. 32,842 11/15/2018 12/15/2023 TIIE 28 days (1) 8.33 % Average Strike Ps./US$ Maturity date Forwards US Dollar / Mexican Peso US$ 140,325 Ps. 287,452 22.36 Weekly, through October 2021 Total Liabilities Ps. 320,294 Non-current liability Ps. 25,179 Total current liability Ps. 295,115 (2) As of January 3, 2021, the 28-day TIIE rate was 4.49% . As of December 31, 2019 Notional amount in Fair Contract Maturity Rate Rate Instrument thousands Value date date received paid Liabilities: Interest rate swap Ps. 50,000 Ps. 19,614 11/15/2018 12/15/2023 TIIE 28 days (1) 8.33 % Average Strike Ps./US$ Maturity date Forwards US Dollar / Mexican Peso US$ 47,690 Ps. 12,695 19.61 Weekly, through October 2020 Total Liabilities Ps. 32,309 Non-current liability Ps. 16,754 Total current liability Ps. 15,555 (1) As of December 31, 2019, the 28-day TIIE rate was 7.55% . The impacts in profit or (loss) of the derivative financial instruments for the periods of 2021,2020, and 2019 amounted to gain (loss) of Ps. 330,315, Ps. (287,985) and Ps. (15,680), respectively, which is included in the consolidated and combined statements of comprehensive income in the line item of “unrealized gain (loss) in valuation of derivative financial instruments.” 18.2 Warrants As part of the merger with DD3 as disclosed in Note 1.d, during 2020, Betterware assumed an obligation that allowed existing warrant holders to purchase (i) a total of 5,804,125 Betterware shares subject to exercise as of April 12, 2020 at a price of is US$ 11.50 per share that would expire on or before March 25, 2025 at the time of redemption or settlement, and (ii) the option to purchase 250,000 units that automatically became an option to issue 250,000 Betterware shares and warrants to buy 250,000 additional Betterware shares. The Company registered the warrants to be traded on OTC Markets, which had an observable fair value. During July and August 2020, the Group repurchased 1,573,888 warrants. From August 18 th During September 2020, the purchase option of units was exercised by their holders on a cashless basis, which resulted in the issuance of 214,020 Betterware shares. Additionally, on October 8, 2020 and as part of the terms of the warrant agreement, the Company issued a notice requiring all of its outstanding public warrants to be redeemed by its holders given that the condition to exercise the redemption was complied. Such condition required that the share price reached US$ 18.00 during a period of at least 20 days. The redemption of warrants was exercised on a cashless basis by exchanging 3,087,022 warrants for 1,142,325 of the Company’s shares. 8,493 public warrants were not exercised by their holders during the redemption period that expired on November 9, 2020, and they were paid by the Company for a price of US$ 0.01 per warrant. Finally on December 23, 2020, 239,125 private warrants were exercised on a cashless basis by their holders and exchanged for 156,505 of the Company’s shares. As of January 3, 2021, the warrant holders had redeemed all of the outstanding warrants and purchase option of units and the Company recognized a loss for the increase in the fair value of the warrants of Ps. 851,520, which is recognized under the heading “Loss in valuation of warrants” in the consolidated and combined statement of profit or loss. |
Employee benefits
Employee benefits | 12 Months Ended |
Dec. 31, 2021 | |
Employee benefits | |
Employee benefits | 19. Post-employment benefits – The Group recognizes the liability and corresponding impacts to profit and loss as well as comprehensive income regarding to the seniority premiums to be paid to its employees. This benefit is determined considering the years of service and the compensation from the employees. The components of the defined benefit liability for the periods of 2021, 2020 and 2019, are as follows: a) Movement in net defined liability – The following table shows a reconciliation from the opening balances to the closing balances for the net defined benefit liability and its components: 2021 2020 2019 Balance at January 01 Ps. 1,678 1,630 1,355 Included in profit or loss: Current service cost 614 425 424 Interest cost 101 114 123 Net cost of the period 715 539 547 Included in other comprehensive income: Actuarial loss (gain) (83) 1,199 (102) Income tax effect — (360) 26 Other: Benefits paid (217) (1,330) (196) Balance as of December 31, 2021 Ps. 2,093 1,678 1,630 b) Actuarial assumptions – The following were the principal actuarial assumptions at the reporting date (expressed as weighted averages): 2021 2020 2019 Financial: Future salary growth 5.0 % 4.0 % 4.5 % Discount rate 7.6 % 6.1 % 7.1 % Demographic: Number of employees 1,272 1,294 654 Age average 32 years 31 years 35 years Longevity average 2 years 2 years 3 years c) Sensitivity analysis – Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation considering a change of ±0.50% in the discount rate. Effects as of Effects as of Effects as of December 31, January 03, December 31, 2021 2021 2019 Increase / decrease in the discount rate + 0.50% Ps. 156 126 (127) - 0.50% (174) (141) 115 |
Financial instruments
Financial instruments | 12 Months Ended |
Dec. 31, 2021 | |
Financial instruments | |
Financial instruments | 20. Below is the categorization of the financial instruments, excluding cash and cash equivalents, held by the Group as of December 31, 2021, January 3, 2021, and December 31, 2019, as well as the indication of fair value hierarchy level, when applicable: Accounting classification and fair values Fair value Amortized through profit Fair value As of December 31, 2021 cost or loss hierarchy level Financial assets - Trade account receivables, net Ps. 778,054 — Trade account receivables from related parties 24 — Derivative financial instruments — 28,193 2 Total 778,078 28,193 Financial liabilities - Accounts payable to suppliers 1,984,932 — Lease liability 17,880 — Long term debt 1,510,385 — — Total 3,513,197 — Fair value Amortized through profit Fair value As of January 03, 2021 cost or loss hierarchy level Financial assets - Trade account receivables, net Ps. 757,806 — Total 757,806 — Financial liabilities - Debt 629,877 — Accounts payable to suppliers 2,078,628 — Lease liability 24,378 — Derivative financial instruments — 320,294 2 Total 2,732,883 320,294 Fair value Amortized through profit Fair value As of December 31, 2019 cost or loss hierarchy level Financial assets - Trade account receivables, net Ps. 266,938 — Other receivables 5,867 — Total 272,805 — Financial liabilities - Debt 677,713 — Accounts payable to suppliers 529,348 — Lease liability 24,584 — Derivative financial instruments — 32,309 2 Total 1,231,645 32,309 Measurements of fair values Fair value hierarchy levels 1 to 3 are based on the degree to which the fair value is observable: ● Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities; ● Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and ● Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). As previously disclosed, some of the Group’s financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial liabilities are determined (in particular, the valuation technique(s) and inputs used). Financial assets/ financial liabilities Valuation technique(s) and key input(s) Significant unobservable input(s) Relationship and sensitivity of unobservable inputs to fair value Foreign currency forward contracts and interest rate swaps (see Note 18) Discounted cash flows. N/A N/A There were no transfers between Level 1 Financial risk management The Group’s Treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyses exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk, and price risk), credit risk, liquidity risk. The Group seeks to minimize the effects of these risks by using derivative financial instruments to hedge these risk exposures. The use of financial derivatives is governed by the Group’s policies approved by the board of directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. Market risk The Group’s activities expose it primarily to the financial risks of changes in exchange rates and interest rates (see below). The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign currency risk, including: ● In order to reduce the risks related to fluctuations in the exchange rate of foreign currency, the Group uses derivative financial instruments such as forwards to adjust exposures resulting from foreign exchange currency. ● Additionally, the Group occasionally used interest rate swaps to adjust its exposure to the variability of the interest rates or to reduce their financing costs. The Group’s practices vary from time to time depending on judgments about the level of risk, expectations of change in the movements of interest rates and the costs of using derivatives. See Note 18 for disclosure of the derivative financial instruments entered into for the periods of 2021, 2020 and 2019. Exchange risk management The Group undertakes transactions denominated in foreign currencies, mainly U.S. dollars; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilizing forward foreign exchange contracts. The carrying amounts of the Group’s U.S. dollars denominated financial assets and financial liabilities at the reporting date are as follows: 2021 2020 2019 Assets US$ 10,686 29,559 1,331 Liabilities (35,148) (49,570) (16,095) Net position US$ (24,462) (20,011) (14,764) Closing exchange rate of the year 20.5157 19.9352 18.8452 Exchange rate sensitivity analysis The Group is mainly exposed to variations in the Mexican Peso / the U.S. Dollar exchange rate. For sensitivity analysis purposes, the Group has determined a 10 percent increase and decrease in Ps. currency units against the U.S. dollar (“relevant currency”). The 10 percent is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated financial assets/liabilities and adjusts their translation at the year-end for a 10 percent change in foreign currency rates. Given that the foreign exchange currency net position results in a liability, a positive number below indicates an increase in profit where currency units strengthen 10 percent against the relevant currency. For a 10 percent weakening of currency units against the relevant currency, there would be a comparable impact on the net income, and the balances below would be negative. 2021 Impact on net income Ps. 50,186 Foreign exchange forward contracts It is the policy of the Group to enter into foreign exchange forward contracts to manage the foreign currency risk associated with anticipated purchase transactions up to 6 months. Basis adjustments are made to the initial carrying amounts of inventories when the anticipated purchases take place. See Note 18 with details on foreign currency forward contracts outstanding at the end of the reporting period. Foreign currency forward contract assets and liabilities are presented in the line ‘Derivative financial instruments’ within the consolidated and combined statement of financial position. The Group has entered into contracts to purchase raw materials from suppliers in China, with such purchases denominated in U.S. dollars. The Group has entered into foreign exchange forward contracts to hedge the exchange rate risk arising from these anticipated future purchases. Interest rate risk management During 2020 and 2019, the Group was exposed to interest rate risk from the borrowings at a variable interest rates. The risk is managed by the Group by maintaining an appropriate balance between fixed and variable rate borrowings, and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite; ensuring the most cost-effective hedging strategies are applied. The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note. As of December 2021, the Group does not have any SWAP contracted. Interest rate sensitivity analysis The sensitivity analyses determined in 2020, ware based on the exposure to interest rates on the reporting date. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the reporting date was outstanding during the year. A one per cent increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates. If interest rates had been one per cent higher/lower and all other variables would have held constant, the Group’s net income as of January 3, 2021, and December 31, 2019, would decrease/increase by Ps. 6,266 and Ps.1,352, respectively. This is attributable to the Group’s exposure to interest rates on its borrowings as described in Note 15. As of December 31, 2021, the borrowings were prepaid. Interest rate swap contracts During the first months of 2021 and prior periods, under interest rate swap contracts, the Group agreed to exchange the difference between fixed and variable rate interest amounts calculated on agreed notional principal amounts. Such contracts enabled the Group to mitigate the risk of changing interest rates on the cash flow exposures on the issued variable rate debt held. The fair value of interest rate swaps in 2020 was determined by discounting the future cash flows using the curves at the reporting date and the credit risk inherent in the contract and was disclosed in Note 18. The average interest rate was based on the outstanding balances at the end of the financial period. Credit risk management The Group’s exposure to credit risk is not significant as no customer represents more than 10% of sales and receivables. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated, spread across diverse geographical areas. Credit policy has been implemented for each customer establishing purchase limits. Customers who do not satisfy the credit references set out by the Group, can only carry out transactions with the Group through prepayment. See Note 6 for further details on trade account receivables and the expected credit loss estimate. Collateral held as security and other credit enhancements The Group does not hold any collateral or other credit enhancements to cover its credit risks associated with its financial assets. Overview of the Group’s exposure to credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss/gain to the Group. As of December 31, 2021, the Group’s maximum exposure to credit risk without taking into account any collateral held or other credit enhancements, which will cause a financial loss to the Group due to failure to discharge an obligation by the counterparties and financial guarantees provided by the Group, arises from the carrying amount of the respective recognized financial assets as stated in the consolidated and combined statement of financial position. For trade receivables, the Group has applied the simplified approach to measure the loss allowance at lifetime ECL. The Group determines the expected credit losses on these items by using a provision matrix, estimated based on historical credit loss experience based on the past due status of the debtors, adjusted as appropriate to reflect current conditions and estimates of future economic conditions. Accordingly, the credit risk profile of these assets is presented based on their past due status in terms of the provision matrix. Note 6, includes further details on the loss allowance for these assets. Liquidity risk management The ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities, and reserve borrowing facilities, by continuously monitoring the forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Details of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk are set out below Liquidity maturity analysis The Group manages its liquidity risk by maintaining adequate reserves of cash and bank credit lines available and consistently monitoring its projected and actual cash flows. The maturity analysis of lease liabilities is presented in Note 13 and long-term debt maturities effectives in 2021, 2020 and 2019 are presented in Note 15. The Group has access to financing facilities as described below. The Group expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets. Bank credit lines and long-term debt 2021 2020 2019 Amount used Ps. 1,500,000 626,554 656,459 Amount not used 250,000 297,828 260,500 Total credit lines and long-term debt Ps. 1,750,000 924,382 916,959 On August 31, 2021, the bank credit lines were liquidated in advance see Note 15. Capital risk management The Group manages its capital to ensure it will be able to continue as a going concern, while it maximizes returns for its shareholders through the optimization of its capital structure. The Group’s management reviews the capital structure when presenting its financial projections to the Board of Directors and stockholders as part of the annual business plan. When performing its review, the Board of Directors considers the cost of equity and its associated risks. The capital structure of the Group consists of net debt (bonds in 2021 and borrowings in 2020 disclosed in Note 15 after deducting cash and bank balances) and stockholders’ equity of the Group. |
Stockholders' equity
Stockholders' equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' equity | |
Stockholders' equity | 21. Stockholders’ equity as of December 31, 2021, January 3, 2021, and December 31, 2019, by number of shares, is as follows: Betterware de Betterware de México, S.A.P.I. de C.V. México, S.A.P.I. de and BLSM Latino America Servicios, C.V. S.A. de C.V. (1) As of December 31, As of January 03, As of December 31, 2021 2021 2019 Fixed capital 10,000 10,000 10,000 Variable capital 37,306,546 36,574,968 8,687,317 37,316,546 36,584,968 8,697,317 (1) As of December 31, 2019 , for the period ended December 31, 2019, the Group presented combined financial statements including Betterware and BLSM as they were entities under common control. The Group previously prepared combined statements of changes in net parent investment when all periods presented represented the combined results of both entities. As a result of the merger in March 2020, which resulted in BLSM becoming a wholly owned subsidiary of Betterware and the issuance of shares to the existing shareholders of such entities, the Group now prepares consolidated financial statements as of such date. The Group has therefore presented a combined statement of changes in stockholders’ equity for the period ended December 31, 2019, (presenting the net parent investment gross by including contributed capital and retained earnings, rather than net as presented in prior periods), as management believes it is a preferable presentation for comparability purposes with the existing share structure and presentation applicable to the consolidated financial statements as of December 31, 2021, and January 3, 2021, and for the periods ended December 31, 2021, and January 3, 2021. The capital stock is represented by fully subscribed and paid common shares with no par value, with the exception of fixed capital, for which the par value per share is Ps. 10. The variable capital stock is unlimited. As of December 31, 2021 and January 3, 2021 the Company had 283,403 and 1,015,072 treasury shares. 2021 During the ordinary shareholders’ meeting held on February 18, 2021, a reclassification of Ps.876,518 from share premium account to retained earnings was approved. On June 21, 2021, the Group issued 731,669 treasury shares in favor to Campalier, related to the long-term incentive plan based on shares with the Executive Chairman of the Board, agreed between shareholders on August 15, 2019 and modified on June 30, 2020. 2020 On March 10, 2020, DD3 was merged into Betterware. Due to the merger, which resulted in the Company increased its variable capital by issuing shares to the previous shareholders of DD3 by Ps.181,865, less issuance costs of Ps.16,736. On the same date, a liability of Ps. 55,810 for the fair value of the assumed warrants obligation was recognized. On October 2, 2020, the Ordinary Shareholders’ Meeting approved an increase in the Company’s variable capital by an amount of Ps. 89,235, due to the cash exercise of 352,256 warrants, equivalent to 352,256 shares. On November 9, 2020, the Ordinary Shareholders’ Meeting approved an increase in the Company’s variable capital by an amount of Ps. 27,183, due to the cash exercise of 109,874 warrants, equivalent to 109,874 shares. On November 9, 2020, the Ordinary Shareholders’ Meeting approved an increase in the Company’s share premium by an amount of Ps. 860,571, due to the cashless exercise of 3,520,489 warrants as of such date and as part of the redemption (see Note 1.f), equivalent to 1,301,293 shares. On December 14, 2020, the Ordinary Shareholders’ Meeting approved the merger of Promotora Forteza (a commonly controlled entity) into Betterware. As part of the merger stockholders’ equity increased Ps. 4,724. As of January 3, 2021, and as a result of the exercise of the purchase option of units by its holders (see Note 18.2) and the share-based payments granted to certain directors and executives (see Note 22), the total capital increase in share premium amounted Ps. 909,428. Dividends 2021 On February 18, 2021, the General Shareholders' Meeting approved a payment of dividends from retained earnings in the amount of Ps.350,000, which were paid in cash on March 4, 2021. Part of this amount (Ps.180,489) was paid to Campalier based on its shareholding. The dividend per share was Ps.9.57. On May 12, 2021, the General Shareholders' Meeting approved a payment of dividends from retained earnings in the amount of Ps.350,000, which were paid in cash on May 20, 2021. Part of this amount (Ps.180,489) was paid to Campalier based on its shareholding. The dividend per share was Ps.9.57. On August 13, 2021, the General Shareholders' Meeting approved a payment of dividends from retained earnings in the amount of Ps.350,000, which were paid in cash on August 19, 2021. Part of this amount (Ps.183,812) was paid to Campalier based on its shareholding. The dividend per share was Ps.9.38. On October 29, 2021, the General Shareholders' Meeting approved a payment of dividends in the amount of Ps.350,000, which were paid in cash on November 4, 2021. Part of this amount (Ps.183,812) was paid to Campalier based on its shareholding. The dividend per share was Ps.9.38. 2020 On January 10, 2020, the General Shareholders’ Meeting approved a payment of dividends from retained earnings in the amount of Ps. 70,000, which were paid in cash on January 10, 2020. Part of this amount (Ps. 42,739) was paid to Campalier based on its shareholding. The dividend per share was Ps. 2.32. On May 8, 2020, the General Shareholders’ Meeting approved a payment of dividends on account of the profits to be generated in the fiscal year 2020 in the amount of Ps. 100,000, which were paid in cash on May 28, 2020. Part of this amount (Ps. 53,522) was paid to Campalier based on its shareholding. The dividend per share was Ps. 2.90. On August 17, 2020, the Ordinary General Shareholders’ Meeting approved a payment of dividends on account of the profits to be generated in fiscal year 2020 in the amount of Ps. 330,000, which were paid in cash on August 20, 2020. Part of this amount (Ps. 176,621) was paid to Campalier based on their shareholding. The dividend per share was Ps. 9.27. On November 9, 2020, the Ordinary General Shareholders’ Meeting approved a payment of dividends on account of the profits to be generated in the fiscal year 2020 in the amount of Ps. 330,000, which were paid in cash on November 19, 2020. Part of this amount (Ps. 168,136) was paid to Campalier based on their shareholding. The dividend per share was Ps. 9.11. 2019 On May 29, 2019, the Ordinary General Shareholders’ Meeting approved dividends payment from retained earnings for an amount of Ps. 128,000 which were paid in cash. Part of this amount (Ps. 78,151) was paid to Campalier based on its equity interest. On October 8, 2019, the Ordinary General Shareholders’ Meeting approved dividends payment from retained earnings for an amount of Ps. 150,000 which were paid in cash. Part of this amount (Ps. 91,583) was paid to Campalier based on its equity interest. Legal reserve Retained earnings include the statutory legal reserve. The Mexican General Corporate Law requires that at least 5% of net income of the year be transferred to the legal reserve until the reserve equals 20% of common stock at par value (historical pesos). The legal reserve may be capitalized but may not be distributed unless the Group is dissolved. The legal reserve must be replenished if it is reduced for any reason. As of December 31, 2021, January 3, 2021, and December 31, 2019, the legal reserve, in pesos, was Ps. 10,679. Ps. 10,679, and Ps. 10,370, respectively and it is included in retained earnings. |
Share-based payments
Share-based payments | 12 Months Ended |
Dec. 31, 2021 | |
Share-based payments | |
Share-based payments | 22. As disclosed in Notes 1.f and 2.w, the Group grants a compensation plan based on Betterware’s shares to Executive Chairman and certain key Directors and executives. The plans were granted at the Board of Directors' Meeting on August 15, 2019, and modified July 30, 2020, in which it was established that to obtain the rights to the corresponding shares of the Group, there should be a performance metric based on EBITDA (Earnings before interest, taxes, depreciation and amortization) and their continuance at Betterware, which will be delivered based on the particular compensation plans of each individual. The effects associated with the award of share-based payments were recognized in the consolidated and combined statement of income and other comprehensive income, with the corresponding effect in stockholders' equity. In May 2021, the conditions of the share-based compensation plan for the Executive Chairman of the Board were met, for which Betterware shares equivalent to 2% were delivered to Campalier. |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings per share | |
Earnings per share | 23. The amount of basic earnings per share is calculated by dividing the net income for the period attributable to shareholders of the Group’s ordinary shares by the weighted average of the ordinary shares outstanding during the period. The amount of diluted earnings per share is calculated by dividing the net income attributable to shareholders of the Group's common shares (after adjusting it due to changes in the fair value of warrants recognized at FVTPL in accordance with IFRS 9 in 2020) by the weighted average of the common shares outstanding during the period plus the weighted average number of ordinary shares that would have been issued at the time of converting all diluted potential ordinary shares into ordinary shares. The following events resulted in the issuance of ordinary shares for the 2021 and 2020 periods: 2021 ● For the year 2021, the share-based payment incentive plans with the Executive Chairman of the Board, certain key Directors and executives, issued by the Group (see Note 22) qualified as a potentially dilutive event, resulting in 20,680 potentially dilutive shares, corresponding to the share-based incentive plan for directors and key executives. The Group issued 731,669 treasury shares during the year related to the share-based incentive plan of the Executive Chairman of the Board; such shares were considered from January 1, 2021, within the calculation of diluted earnings per share for the year ended December 31, 2021. 2020 ● The warrants that DD3 had issued and that were automatically converted into warrants to purchase a total of 5,804,125 shares, exercised by its holders through a cash and cashless basis. The cash exercises resulted in the issuance of 462,130 shares and the cashless exercises in the issuance of 1,457,798 shares. ● The unit purchase option subject to the warrant contract to issue 250,000 Betterware shares and warrants to buy 250,000 additional Betterware shares (see Note 1.e). The purchase option resulted in the issuance of 214,020 Betterware shares, which were excersied on a cashless basis. ● The effect of warrants and unit purchase options throughout the 2020 and while not exercised in the period qualified as antidilutive events. In accordance with IAS 33, antidilutive potential ordinary shares are disregarded in the calculation of diluted earnings per share. ● On 2020, the merger transaction was, which closed on March 13, 2020, between Betterware and DD3 and the subscription and payment of Betterware shares on Nasdaq, were considered on the operation, moreover all Betterware shares issued and outstanding immediately prior to the closing date were canceled and new shares were issued. Additionally, IFRS requires that the calculation of basic and diluted earnings per share ("EPS") for all periods presented be adjusted retrospectively when the number of ordinary shares or potential ordinary shares outstanding increases as a result of a capitalization, bond issue, or share split, or decreases as a result of a reverse share split, EPS calculations for the reporting period and the comparative period should be based on the new number of shares. As of December 31, 2021, January 3, 2021, and December 31, 2019, Betterware had 37,316,546, 34,451,020 and 30,199,945 outstanding shares, respectively. The following table shows the income and share data used in the calculation of basic and diluted earnings per share for the periods of 2021, 2020 and 2019: 2021 2020 2019 Net income (in thousands of pesos) Attributable to Owners of the Company Ps. 1,804,590 338,361 472,142 Shares (in thousands of shares) Weighted average of outstanding shares Basic 36,974 34,083 30,200 Diluted 37,337 34,383 30,200 Basic and diluted earnings per share: Basic earnings per share (pesos per share) Ps. 48.81 9.93 15.63 Diluted earnings per share (pesos per share) 48.33 9.84 15.63 |
Related parties balances and tr
Related parties balances and transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related parties balances and transactions | |
Related parties balances and transactions | 24. The following balances were outstanding as of December 31, 2021, January 3, 2021, and December 31, 2019: 2021 2020 2019 Trade accounts receivable from related parties Fundación Betterware., A.C. Ps. 24 — 610 Ps. 24 — 610 Trading transactions – 2021 Lease income Donations Revenues /expenses to Betterware with: Fundación Betterware., A.C. Ps. 42 920 Remuneration of key management personnel – Key management personnel compensation comprised short-term employee benefits of Ps. 42,170, Ps.37,713 and Ps.34,540 as of December 31, 2021, January 3, 2021, and December 31, 2019, respectively. Compensation of the Group’s key management personnel includes salaries and non-cash benefits. No long-term employee benefits were paid to key management personnel during 2021, 2020 and 2019. |
Revenue and operating expenses
Revenue and operating expenses | 12 Months Ended |
Dec. 31, 2021 | |
Revenue and operating expenses | |
Revenue and operating expenses | 25. Revenue – Revenue recognized in the 2021, 2020 and 2019 periods, is generated in Mexico. A disaggregation per home product is as follows: 2021 2020 2019 Kitchen and food preservation Ps. 3,274,245 2,532,420 1,229,148 Home solutions 2,312,675 1,456,666 529,551 Bedroom 1,603,930 826,965 275,722 Bathroom 1,214,524 842,724 441,093 Laundry & Cleaning 823,880 828,473 318,782 Tech & mobility 767,614 773,160 290,366 Internet, telephone services and equipment 19,030 — — Interest income 12,498 — — Clothes and shoes 11,272 — — Ps. 10,039,668 7,260,408 3,084,662 Contract balances As of December 31, 2021, January 3, 2021, and December 31, 2019, the Group did not identify significant costs to obtain/fulfill a contract that are required to be capitalized as an asset. Consequently, the Group did not perform any analysis in order to identify possible impairment losses. See Note 6 about the expected credit loss model applicable to all financial assets measured at amortized cost. Operating expenses – Operating expenses by nature, for the periods of 2021, 2020 and 2019 are as follows: 2021 2020 2019 Cost of personnel services and other employee benefits Ps. 621,519 564,213 423,956 Promotions for the sales force 503,291 172,177 26,311 Distribution costs 463,762 331,023 121,155 Sales catalog 425,814 247,250 128,687 Packing materials 201,006 112,512 58,361 Impairment loss on trade accounts receivables 198,495 57,627 22,512 Events, marketing and advertising 109,822 19,237 37,848 Depreciation and amortization 82,122 43,688 38,394 Commissions and professional fees 69,954 61,403 13,577 Rent expense 52,660 22,451 17,663 Bank fees 34,335 23,965 15,436 Travel expenses 11,258 13,522 18,835 Other 201,758 179,987 68,853 Ps. 2,975,796 1,849,055 991,588 |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2021 | |
Segment information | |
Segment information | 26. Information reported to the Chief Operating Decision Maker (“CODM”), for the purposes of resource allocation and assessment of business performance, focuses on the Group as a whole and with main strategies on a company-wide basis. As discussed in Note 1, the Group is focused on the home organization segment whose product portfolio includes home organization; kitchen preparation, food containers, and practical furniture, among other categories (see Note 25). The Group’s products are offered through 9 catalogs in Mexico over the year. As such, no reporting on segment information is deemed necessary to assess the Group performance given its business model and current operations. In addition to the above, the Group obtains all its revenue from the Mexican market, therefore no geographic information is disclosed. Also, the Group considers that there are no major customers, and therefore, no concentration risks exist given the nature of the business and the sale of its products through a significant number of distributors. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Contingencies | |
Contingencies | 27. The Group is a subject to various legal actions in the normal course of its business. The Group is not involved in or threatened by proceedings for which the Group believes it is not adequately insured or indemnified or which, if determined adversely, would have a material adverse effect on its consolidated and combined financial position, results of operations and cash flows. Additional taxes payable could arise in transactions with related parties if the tax authority, during a review, believes that prices and amounts used by the Group are not similar to those used with or between independent parties in comparable transactions. In accordance with the current tax legislation, the authorities have the power to review up to five fiscal years prior to the last income tax return filed. On August 12, 2014, the International Inspection Administration "4" (“AFI”, for its acronym in Spanish), under the Central Administration of International Control, in relation to the General Administration of Large Taxpayers of the Tax Administration Service (“SAT” for its acronym in Spanish), requested information regarding the Group’s 2010 income tax filing, which was provided at that time. On February 20, 2017, the final agreement was signed with the Taxpayer Advocacy Office (“PRODECON”) regarding the SAT’s review. On March 2, 2017, the SAT notified the Group about certain issues on which an agreement was not reached. As a result, the Group filed a lawsuit for annulment before the SAT’s resolution, which is in progress as of the date of issuance of these consolidated and combined financial statements. Based on the evaluation of the Group’s Management, tax liabilities are not expected to arise as a result of this matter. As of December 31, 2021, the maximum exposure was considered not significant. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent events | |
Subsequent events | 28. In the preparation of the consolidated and combined financial statements, the Company has evaluated the events and transactions for their recognition or disclosure subsequent to December 31, 2021, and until April 28, 2022 (date of issuance of the consolidated and combined financial statements), and except as noted below, has not identified subsequent significant events: On January 18, 2022, Betterware entered into an agreement to acquire 100% of JAFRA´s (“JAFRA”) operations in Mexico and United States from the Vorwerk Group based in Germany for a total cash consideration of US$255,000 equivalent to Ps.5,355,000. JAFRA is a leading global brand in direct sales in the Beauty and Personal Care (B&PC) industry with a strong presence in Mexico and the United States with 443,000 independent leaders and consultants who sell unique products. The JAFRA Acquisition was approved by the Federal Economic Competition Commission (“COFECE”) on March 24, 2022, and consummated on April 7, 2022. The funds necessary to pay the purchase price under the JAFRA Acquisition were obtained from (i) a long-term syndicated loan of US$225,000, and (ii) US$30,000 from operating cashflow of the Company. On February 11, 2022, a dividend payment of Ps. 350,000, paid on March 3, 2022, was approved at the Ordinary General Shareholders’ Meeting. On March 28, 2022, the Ordinary General Assembly of Shareholders of GurúComm, S.A.P.I. approved the retirement of Betterware as a shareholder. Then, 55,514 subscribed and paid shares were reimbursed, and 37,693 subscribed and unpaid shares were canceled. Betterware retired its investment because the business was not growing according to shareholder expectations, and the return on investment would take more years than anticipated. The financial effect that this transaction had at consolidated level was a loss of Ps.14,648. As of the date of the consolidated and combined financial statements, the Company has repurchased 72,626 shares amounted Ps. 25,321, according to the program approved on September 10, 2021, by the Board, which states that it would be possible to repurchase up to US$ 50,000 until December 31, 2022. |
Authorization to issue the cons
Authorization to issue the consolidated and combined financial statements | 12 Months Ended |
Dec. 31, 2021 | |
Authorization to issue the consolidated and combined financial statements | |
Authorization to issue the consolidated and combined financial statements | 29. On April 28, 2022, the issuance of the Group’s consolidated and combined financial statements was authorized by Andrés Campos, Chief Executive Officer, and Diana Jones, Chief Financial Officer. * * * * * * |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Significant accounting policies | |
Basis of preparation | a. Basis of preparation The consolidated and combined financial statements of 2021 include the financial statements of Betterware, BLSM, GurúComm, Innova Catálogos, Programa Lazos and Betterware de Guatemala (the “consolidated and combined financial statements”). Prior to the merger transaction disclosed in Note 1.d, Betterware and BLSM were subsidiaries under the common control of Campalier, operating under common management; therefore, combined financial statements of these entities were prepared as of December 31, 2019. On March 10, 2020, BLSM became a subsidiary of Betterware resulting in the preparation of its consolidated financial statements as of such date. As a result, the combined statement of changes in stockholders’ equity for the year ended on December 31, 2019, present the net parent investment gross by including contributed capital and retained earnings (rather than net as presented in prior years), as management believes it is a preferable presentation for comparability purposes with the share structure and presentation as of and for the year ended December 31, 2021 and the 53-week period ended January 3, 2021. On March 12, 2021, GurúComm became a subsidiary of Betterware and later on July 22, 2021, Innova Catálogos, S.A. de C.V., became a subsidiary of Betterware. Until 2020, Betterware’s financial year was a 52- or 53-weeks period ending on the Sunday nearest to December 31, however, due to the fact that in 2021 Betterware placed debt on the Mexican Stock Exchange, the financial period must be presented in compliance with the Mexican General Corporate Law, which must coincide with the calendar year, therefore the financial information of 2021 is presented as of December 31, 2021 and for the year then ended. The comparative financial year of 2020 and of 2019 consisted of 53 and 52 weeks ended on January 3, 2021, and December 31, 2019, respectively, which were not adjusted to calendar year because the effects of the change are not significant. The financial information as of December 31, 2021, and for the year then ended is also herein referred to the 2021 period (the “2021 period” or the “period of 2021”). The financial information as of January 3, 2021, and for the 53-week period ended on such date is also herein referred to the 2020 period (the “2020 period” or the “period of 2020”). The financial information for the year ended December 31, 2019 (equivalent to a 52-week period) is also herein referred to the 2019 period (the “2019 period” or the “period of 2019”). Transactions among Betterware and its subsidiaries: BLSM GurúComm, Innova Catálogos, Programa Lazos and Betterware de Guatemala, and the balances and unrealized gains or losses arising from intra-group transactions have been eliminated in the preparation of the consolidated and combined financial statements. |
Basis of accounting | b. Basis of accounting The consolidated and combined financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). |
Basis of measurement | c. Basis of measurement The consolidated and combined financial statements have been prepared on the historical cost basis except for certain financial instruments measured at fair value. Functional and presentation currency These consolidated and combined financial statements are presented in Mexican pesos (“Ps or $”), which is the Group’s functional currency. All financial information presented in Mexican pesos has been rounded to the nearest thousand (except where otherwise specified). When referring to U.S. dollars (“US$”), means thousands of United States dollars. Consolidated and combined statement of profit or loss and other comprehensive income The Group opted to present a single consolidated and combined statement of profit or loss and comprehensive income, combining and consolidating the presentation of profit and loss, including an operating profit line item, and comprehensive income in the same statement. Due to the commercial activities of the Group, costs and expenses presented in the consolidated and combined statements of profit or loss and other comprehensive income were classified according to their function. Accordingly, cost of sales and operating expenses were presented separately. |
Basis of consolidation | d. Basis of consolidation The consolidated financial statements of the Group, incorporate the financial statements of the Betterware, and the entities controlled by Betterware: BLSM, GurúComm, S.A.P.I. de C.V., Betterware de Guatemala, S.A., Programa Lazos, S.A. de C.V., and Innova Catálogos, S.A. de C.V. Control is achived when the Company: ● Has the power over the investee ● Is exposed, or has rights, to variable returns from its involvement with the investee ● Has the ability to use its power to affect its returns The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. When the Company has less than a majority of the voting rights of an investee, it considers that it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances an assessing whether or not the Company´s voting rights in an investee are sufficient to give power, including: ● The size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders. ● Potential voting rights held by the Company, other vote holders or other parties. ● Rights arising from other contractual arrangements; and ● Any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the year are included in profit or loss from the date the Company gains control until the date when the Company ceases to control the subsidiary. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with the Group’s accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation. Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. Those interests of non-controlling shareholders that are present ownership interests entitling their holders to a proportionate share of net assets upon liquidation may initially be measured at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets. The choice of measurement is made on an acquisition-by-acquisition basis. Other non-controlling interests are initially measured at fair value. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of the subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amount of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company. When the Group loses control of a subsidiary, the gain or loss on disposal recognized in profit or loss is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), less liabilities of the subsidiary and any non-controlling interests. All amounts previously recognized in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as required/permitted by applicable IFRS Standards). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IFRS 9 Financial Instruments when applicable, or the cost on initial recognition of an investment in an associate or a joint venture. Betterware, has control over its subsidiaries due to the shares and voting rights acquired, which generate rights over the variable returns from the subsidiaries, and has the ability to influence those returns through his power over them. As of December 31, 2021, the percentage of participation that it maintains over its subsidiaries are the following: Participation´s % BLSM Latino America Servicios, S.A. de C.V. 99% GurúComm, S.A.P.I. de C.V. 60% Betterware de Guatemala, S.A. 70% Programa Lazos, S.A. de C.V. 70% Innova Catálogos, S.A. de C.V. 70% |
Cash and cash equivalents and restricted cash | e. Cash and cash equivalents and restricted cash Cash and cash equivalents consist mainly of bank deposits and short-term investments in securities, highly liquid and easily convertible into cash in a period no longer than three months. Cash is stated at nominal value and cash equivalents are valued at fair value. Any cash or cash equivalent that cannot be disposed of in less than three months is classified as restricted cash. In cases where the definition of cash and cash equivalents is not met due to restrictions, the amounts are presented in a separate line in the consolidated and combined statements of financial position and is excluded from cash and cash equivalents in the consolidated and combined statements and cash flows. |
Financial instruments | f. Financial instruments Financial assets and financial liabilities are recognized in the Group’s consolidated and combined statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. |
Financial assets | g. Financial assets All recognized financial assets are measured subsequently in their entirety at either amortized cost or fair value, depending on the classification of the financial assets. Classification of financial assets Debt instruments that meet the following conditions are measured subsequently at amortized cost: ● the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and ● the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding. Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI): ● the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and ● the contractual terms of the financial asset give rise on specified dates to cash flows that are SPPI on the principal amount outstanding. By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL). Despite the foregoing, the Group may make the following irrevocable election/designation at initial recognition of a financial asset: ● the Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met; and ● the Group may irrevocably designate a debt investment that meets the amortized cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch. Amortized cost and effective interest method The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The amortized cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortized cost of a financial asset before adjusting for any loss allowance. Foreign exchange gains and losses T Impairment of financial assets The Group always recognizes lifetime expected credit losses (“ECL”) for trade receivables. The expected credit losses on these financial assets are estimated using the simplified approach by using a provision matrix, estimated based on historical credit loss experience based on the past due status of the debtors, adjusted as appropriate to reflect current conditions and estimates of future economic conditions. For financial assets that are not subject to the simplified approach, the Group recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. Write-off policy The Group writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g., when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or in the case of trade receivables, when the amounts are over one year past due, whichever occurs sooner. Financial assets written off may still be subject to enforcement activities under the Group’s recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognized in profit or loss. |
Financial liabilities | h. Financial liabilities All financial liabilities are measured subsequently at amortized cost using the effective interest method or at FVTPL. Financial liabilities at FVTPL are measured at fair value, with any gains or losses arising on changes in fair value recognized in profit or loss to the extent that they are not part of a designated hedging relationship. Financial liabilities and equity Classification as debt or equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. Financial liabilities measured subsequently at amortized cost Financial liabilities that are not (i) contingent consideration of an acquirer in a business condensation combination and consolidation, (ii) held-for-trading, or (iii) designated as at FVTPL, are measured subsequently at amortized cost using the effective interest method. The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortized cost of a financial liability. Foreign exchange gains and losses For financial liabilities that are denominated in a foreign currency and are measured at amortized cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortized cost of the instruments. These foreign exchange gains and losses are recognized in the ‘Foreign exchange (loss) gain, net’ line item in the consolidated and combined Statements of Profit or Loss and Other Comprehensive Income for financial liabilities that are not part of a designated hedging relationship. The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognized in profit or loss for financial liabilities that are not part of a designated hedging relationship. Derecognition of financial liabilities The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged, canceled or have expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss. When the Group exchanges with the existing lender one debt instrument into another one with the substantially different terms, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the Group accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability and the recognition of a new liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective rate is at least 10 per cent different from the discounted present value of the remaining cash flows of the original financial liability. If the modification is not substantial, the difference between (1) the carrying amount of the liability before the modification; and (2) the present value of the cash flows after modification should be recognized in profit or loss as the modification gain or loss within other gains and losses. |
Derivative financial instruments | i. Derivative financial instruments The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including foreign exchange forward contracts and interest rate swaps. Further details of derivative financial instruments are disclosed in Note 18. Derivatives are recognized initially at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as a financial liability. Derivatives are not offset in the consolidated and combined financial statements unless the Group has both legal right and intention to offset. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realized or settled within 12 months. Other derivatives are presented as current assets or current liabilities. Warrants The warrants meet the definition of a derivative financial instrument as they represent a written put option that gives the holders of the warrants the right to exchange them for the Group’s shares at a fixed price. Although the warrants will be exchanged for the Group’s shares based on the terms of the warrant agreement, the warrants were classified as a derivative financial liability measured at FVTPL, and not as an equity instrument, given that the functional currency of the Company (MXN) differs from the strike-price of the warrants, which is fixed in USD. Changes in the fair value of the financial liability are presented in the consolidated and combined statements of profit or loss under the heading “Loss in valuation of warrants”. For purposes of the Company’s adjusted EBITDA, the changes in the fair value of the liability are excluded as they represent non-cash charges. The exchange of warrants for the Group’s shares give rise to the settlement of the obligation associated with the liability with a corresponding increase in equity. The redemption of warrants will result in a net impact in equity resulting from the increase in their fair value is recorded in profit or loss (reducing retained earnings), offset by the equivalent increase in equity as a result of the issuance of shares. |
Inventories and cost of sales | j. Inventories and cost of sales Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on weighted-average. The net realizable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. |
Prepaid expenses | k. Prepaid expenses Prepaid expenses are mainly comprised of advanced payments for printed catalogs, as well as, advanced payments for the purchase of inventories that are received after the date of the consolidated and combined statement of financial position and during the normal course of business, and they are presented in current assets in accordance with the classification of the destination item. |
Other assets | l. Other assets Other assets mainly include inventory of rewards, and rent security deposits. They are presented in current or non-current assets in accordance with the classification of the destination item. Under the reward program, the Group grants reward points to its distributors for the recruitment of associates, while associates receive such points for the referral of new associates within a catalogue. These points are exchangeable for products that Betterware acquires from other suppliers, which are not related to a revenue contract. The points expire based on commercial terms established by the Group that can be modified at management’s discretion. Inventory of rewards mainly consist of certain products and items (in the form of rewards) that Betterware acquires with the purpose to encourage sales among the distributors and associates. Such inventory is acquired once the distributors and associates redeem the reward points that are granted by the Group so that the balance of inventory at each reporting period only relates to items already redeemed but not delivered. Inventory of rewards are recognized at cost of acquisition. |
Property, plant and equipment, net | m. Property, plant and equipment, net Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. If significant parts of an item have different useful lives, then they are accounted for as separate items (major components). Depreciation is recognized using the straight-line method. The estimated useful lives and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The following useful lives, considering separately each of the asset's components, are used in the calculation of depreciation: Buildings 5 Molds 5 years Vehicles 4 years Computers and equipment 3 Leasehold improvements 3 years Property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss. Borrowing costs directly attributable to the acquisition or construction of qualifying assets (designated asset), which are assets that necessarily take a substantial period of time before they are available for their intended use, are added to the cost of those assets, until such time as the assets are available for their intended use. If any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalization rate on general borrowings. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are recognized in profit or loss in the period in which they are incurred. |
Intangible assets | n. Intangible assets ● Brand This is an intangible asset with an indefinite useful life and corresponds mainly to the value of the “Betterware” brand, which was transmitted to the Group through a merger with Strevo Holding, S.A. de C.V. (“Strevo”, an unrelated third party) on July 28, 2017. This intangible asset is subject to annual impairment testing, and whenever there is an indication that the asset may be impaired. Additionally, the Group has incurred expenditures related to registration of trademark rights, which have a finite life. Such expenditures are amortized on a straight-line basis over their estimated useful lives which range from 10 ● Customers relationship This is an intangible asset with a definite useful life of ten years and is being amortized on a straight-line basis. It was transmitted to the Group through a merger with Strevo on July 28, 2017. This intangible asset is subject to impairment testing whenever there is an indication that the asset may be impaired. ● Derecognition of intangible assets An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized. |
Impairment of tangible and intangible assets other than goodwill | o. Impairment of tangible and intangible assets other than goodwill At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise, they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Any impairment is recognized immediately in profit or loss. When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in profit or loss unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. |
Goodwill | p. Goodwill Goodwill represents the excess of the acquisition cost of a subsidiary over the Company´s interest in the fair values of the net assets acquired determined at the date of acquisition and is not subject to amortization. Goodwill is not amortized but is tested annually for impairment. Goodwill arising from a business combination is allocated to the cash generating unit (“CGU”) receiving a benefit from the synergies of the combination. An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other long-lived assets in the CGU on a pro rata basis. An impairment loss in respect of goodwill is not reversed. |
Leases | q. Leases The Group as lessee The Group evaluates whether a contract is or contains a lease agreement at inception of a contract. A lease is defined as an agreement or part of an agreement that conveys the right to control the use of an identified asset for a period of time in exchange for a consideration. The Group recognizes an asset for right-of-use and the corresponding lease liability, for all lease agreements in which it acts as lessee, except in the following cases: short-term leases (defined as leases with a lease term of less than 12 months); leases of low-value assets (defined as leases of assets with an individual market value of less than US$5,000 (five thousand dollars)); and, lease agreements whose payments are variable (without any contractually defined fixed payment). For these agreements, which exempt the recognition of an asset for right-of-use and a lease liability, the Group recognizes the rent payments as an operating expense in a straight-line method over the lease period. The right-of-use asset comprises all lease payments discounted at present value; the direct costs to obtain a lease; the advance lease payments; and the obligations of dismantling or removal of assets. The Group depreciates the right-of-use asset over the shorter of the lease term or the useful life of the underlying asset; therefore, when the lessee will exercise a purchase option, the lessee shall depreciate the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Depreciation begins on the lease commencement date. The lease liability is initially measured at the present value of the future minimum lease payments that have not been paid at that date, using a discount rate that reflects the cost of obtaining funds for an amount similar to the value of the lease payments, for the acquisition of the underlying asset, in the same currency and for a similar period to the corresponding contract (incremental borrowing rate). To determine the lease term, the Group considers the non-cancellable period, including the probability to exercise any right to extend and/or terminate the agreement. Subsequently, the lease liability is measured increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and reducing the carrying amount to reflect the lease payments made. When there is a modification in future lease payments resulting from changes in an index or a rate used to determine those payments, the Group remeasures the lease liability when the adjustment to the lease payments takes effect, without reassessing the discount rate. However, if the modifications are related to the lease term or exercising a purchase option, the Group reassesses the discount rate during the liability’s remeasurement. Any increase or decrease in the value of the lease liability subsequent to this remeasurement is recognized as an adjustment to the right-of-use asset to the same extent. Finally, the lease liability is derecognized when the Group fulfills all lease payments. When the Group determines that it is probable that it will exercise an early termination of the contract that leads to a cash disbursement, such disbursement is accounted as part of the liability’s remeasurement mentioned in the previous paragraph; however, in cases in which the early termination does not involve a cash disbursement, the Group cancels the lease liability and the corresponding right-of-use asset, recognizing the difference immediately in the consolidated and combined statement of profit or loss and other comprehensive income. The Group as lessor During 2021, Betterware leased a space on its offices at the “Betterware Campus” to a related party. As of January 3, 2021, and December 31, 2019, the Group did not maintain any leases as lessor. |
Foreign currency | r. Foreign currency In preparing the consolidated and combined financial statements, transactions in currencies other than the Mexican Peso, which is the functional currency of the consolidated and combined entities with the exception of Betterware de Guatemala, S.A., which has the Quetzal as its functional currency, are recognized at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of transaction. Exchange differences on monetary items are recognized in profit or loss in the period in which they arise. |
Employee benefits | s. Employee benefits Retirement benefits - Defined benefit obligations The Group’s defined benefit obligations cover seniority premiums which consist of a lump sum payment of 12 day’s wage for each year worked, calculated using the most recent salary, not to exceed twice the legal minimum wage established by law. The related liability and annual cost of such benefits are calculated with the assistance of an independent actuary on the basis of formulas defined in the plans using the projected unit credit method at the end of each annual reporting period. The Group’s net obligation with respect to the defined-benefit plan are calculated separately for each plan, estimating the amount of future benefit accrued by employees in return for their services in ongoing and past periods; that benefit is discounted to determine its present value, and the costs for the services that have not been recognized and the fair value of the plan assets are deducted. The discount rate is the yield at the reporting date of the government bonds that have maturity dates approximate to the maturities of the Group’s obligations which are denominated in the same currency in which benefits are expected to be paid (Mexican pesos). Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows: ● Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements). ● Net interest expense or income; and ● Remeasurements. Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if applicable), are recognized immediately in the liability against other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is never reclassified to profit or loss. Past service cost is recognized in profit or loss in the period in which a plan amendment or curtailment occurs, or when the Group recognizes the related restructuring costs or termination benefits, if earlier. Short-term and other long-term employee benefits and statutory employee profit sharing (“PTU”) A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. Likewise, a liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service. Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Group in respect of services provided by employees up to the reporting date. Statutory employee profit sharing (“PTU”) PTU is recorded in the results of the year in which it is incurred and is presented in operating expenses line item in the consolidated and combined statement of profit or loss and other comprehensive income. As a result of the 2014 Income Tax Law, PTU is determined based on taxable income, according to Section I of Article 9 of the that Law. Termination benefits Termination benefits are recognized as an expense when the Group’s commitment can be evidenced, without real possibility of reversing, with a detailed formal plan either to terminate employment before the normal retirement date, or else, to provide benefits for termination as a result of an offer that is made to encourage voluntary retirement. If the benefits are payable no later than 12 months after the reporting period, then they are discounted at present value. |
Income taxes | t. Income taxes Income tax expense represents the sum of the tax currently payable and deferred tax. ● Current tax Current income tax (“ISR”) is recognized in the results of the year in which is incurred. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in profit or loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. A provision is recognized for those matters for which the tax determination is uncertain but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. The assessment is based on the judgment of tax professionals within the Group supported by previous experience in respect of such activities. ● Deferred income tax Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated and combined financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. ● Current and deferred tax for the year Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. |
Provisions | u. Provisions Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions mainly include incentives granted to distributors and associates in the form of reward points, discounts and others such as compensations to employees (bonuses) not paid at the reporting date, professional services fees, among others. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. Warranties When the Group grants assurance-type warranties in contracts with customers, those rights to the customer are recognized in profit or loss in the cost of sales line item against a provision in the statement of financial position; however, when the Group provides its customers with service-type warranties, those are treated under the revenue recognition model as a performance obligation. The Group has not granted any service-type warranties to its customers. Reward Points Through its loyalty program (see Note 2v), the Group also grants reward points to its distributors for the recruitment of associates, while associates receive such points for the referral of new associates within a catalogue. The loyalty program allows the Group’s distributors and associates to accumulate sales points which are exchangeable for products that are purchased from other retailers. Since these types of points also provide a benefit to distributors and associates that they would not receive without purchasing the Group’s products, this loyalty program represents a separate performance obligation, which is recognized as described in Note 2v. |
Revenue recognition | v. Revenue recognition Revenues comprise the fair value of the consideration received or to receive for the sale of goods and services in the ordinary course of the transactions, and are presented in the consolidated and combined statement of profit or loss, net of the amount of variable considerations (discounts and product returns). To recognize revenues from contracts with its customers, the Group applies a comprehensive model, which is based on a five-step approach consisting of the following: (1) identify the contract (verbal or written); (2) identify performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when the Group satisfies a performance obligation. The Group recognizes revenue at a point in time, when it transfers control over a product to a customer, which occurs when the customers take delivery of the products and formally accepts them. The Group invoices its customers at the shipment date with payment terms between 15 Discounts to distributors and associates are included in the invoice price and are presented in the net sales line item from the moment in which the customer acquires control of the products sold; thus, management does not perform estimates over discounts to be taken by the customers. Loyalty program The Group operates a loyalty program through which its distributors and associates accumulate points on sales of Betterware goods that entitle them to exchange the points for products the Group acquires from different suppliers. Since these points provide a benefit to distributors and associates that they would not receive without purchasing the Betterware products, this loyalty program represents a separate performance obligation. Therefore, the transaction price is allocated between the product and the points on a relative stand-alone selling price basis. The stand-alone selling price per point is estimated based on the fair value of the product to be given when the points are redeemed by the distributors and associates and the likelihood of redemption, as evidenced by the Group’s historical experience. Additionally, a contract liability is recognized for revenue relating to the loyalty points at the time of the initial sales transaction, reducing the revenue recognized upon the initial sale of the goods. Revenue from the loyalty points is recognized when the points are redeemed by the customer and exchanged for the related products. Revenue for points that are not expected to be redeemed is recognized in proportion to the pattern of rights exercised by customers. Variable considerations The Group adjusts the transaction price according to the estimations that may result in a variable consideration. These estimates are determined according to the terms and conditions of the contracts with the customer, the history or the customer’s performance. Contract costs The Group capitalizes incremental costs to obtain a contract with a customer if it expects to recover those costs. However, the Group does not capitalize incremental costs if the amortization period for the asset is one year or less. For any other costs related to the fulfillment of a contract with a customer, that is not part of the revenue recognition, it is considered as an asset including all the costs incurred, only if such costs are directly related to an existing contract or specific anticipated contract and if those costs generate or enhance resources that will be used to satisfy performance obligations in the future and are expected to be recovered. The Group amortizes the asset recognized for the costs to obtain and/or fulfill a contract on a systematic basis, consistent with the pattern of transfer of the good to which the asset relates. |
Share-based payments | w. Share-based payments The share-based compensation plans to eligible executives and directors settled by providing Betterware shares are measured at their fair value as of the grant date and are subject to compliance with certain business performance metrics of the business and their continuance at the Company for an established period. The fair value determined at the grant date is recorded as an expense based on the vesting period and the intrinsic value method, which consists of recognizing the expense from the grant date over the period the executives or directors render the service and earn the benefits stipulated according to the plan, with a corresponding increase in equity. At the end of each period, the Company reviews its estimates of the number of equity instruments that are expected to be awarded. |
Financing income and cost | x. Financing income and cost Financing income (cost) are comprised of interest income, interest expense, the foreign currency gain (loss) on financial assets and financial liabilities; and gain (loss) in valuation of financial derivative instruments. Those are recognized in the consolidated and combined statement of profit or loss and other comprehensive income when accrued. |
Contingencies | y. Contingencies Significant obligations or losses related to contingencies are recognized when it is probable that their effects will materialize and there are reasonable elements for their quantification. If these reasonable elements do not exist, their disclosure is included qualitatively in the notes to the consolidated and combined financial statements. Income, profits or contingent assets are recognized until such time as there is certainty of their realization. |
Significant accounting polici_2
Significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Significant accounting policies | |
Percentage of participation | Participation´s % BLSM Latino America Servicios, S.A. de C.V. 99% GurúComm, S.A.P.I. de C.V. 60% Betterware de Guatemala, S.A. 70% Programa Lazos, S.A. de C.V. 70% Innova Catálogos, S.A. de C.V. 70% |
Schedule of useful lives are used in the calculation of depreciation | The following useful lives, considering separately each of the asset's components, are used in the calculation of depreciation: Buildings 5 Molds 5 years Vehicles 4 years Computers and equipment 3 Leasehold improvements 3 years |
Cash and cash equivalents (Tabl
Cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Cash and cash equivalents | |
Schedule of cash and cash equivalents | 2021 2020 2019 Cash on hand in banks Ps. 951,092 629,146 96,008 Time deposits 224,106 20,674 117,689 Ps. 1,175,198 649,820 213,697 |
Trade accounts receivables (Tab
Trade accounts receivables (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Trade accounts receivables | |
Schedule of trade accounts receivables | 2021 2020 2019 Trade account receivables Ps. 868,218 766,889 260,727 Expected credit loss (90,164) (9,083) (13,640) Ps. 778,054 757,806 247,087 |
Schedule of trade accounts receivables past due | Trade receivables – days past due Not past As of December 31, 2021 due 14-21 21 – 28 >28 Total Expected credit loss rate 1 % 27 % 60 % 28 % Estimated total gross carrying amount at default Ps. 593,104 31,439 22,463 221,212 868,218 Expected credit loss Ps. 6,814 8,338 13,386 61,626 90,164 Trade receivables – days past due Not past As of January 03, 2021 due 14-21 21 – 28 >28 Total Expected credit loss rate 2 % 30 % 62 % 33 % Estimated total gross carrying amount at default Ps. 539,693 31,918 17,772 53,743 643,126 Expected credit loss Ps. 8,163 9,588 10,946 17,563 46,260 Trade receivables – days past due Not past As of December 31, 2019 due 14-21 21 – 28 >28 Total Expected credit loss rate 2 % 20 % 49 % 42 % Estimated total gross carrying amount at default Ps. 207,032 12,098 7,045 29,807 255,982 Expected credit loss Ps. 3,950 2,454 3,477 12,634 22,515 |
Schedule of expected credit loss | Total Balance as of January 01, 2019 Ps. (9,340) Expected credit loss (22,515) Amounts written off 18,215 Balance as of December 31, 2019 (13,640) Expected credit loss (46,260) Specific credit loss (11,367) Amounts written off 62,184 Balance as of January 03, 2021 (9,083) Expected credit loss (198,495) Amounts written off 117,414 Balance as of December 31, 2021 Ps. (90,164) |
Inventories and cost of sales (
Inventories and cost of sales (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventories and cost of sales | |
Schedule of inventories and cost of sales | 2021 2020 2019 Finished goods Ps. 901,523 904,999 224,025 Packing material 35,718 26,029 4,577 937,241 931,028 228,602 Merchandise in transit 402,137 342,998 116,952 Ps. 1,339,378 1,274,026 345,554 |
Prepaid expenses (Tables)
Prepaid expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Prepaid expenses | |
Schedule of Prepaid expenses | 2021 2020 2019 Printed catalogs Ps. 33,628 41,920 21,692 Premiums paid in advance for insurance 16,961 10,061 9,628 Advances to suppliers 1,320 2,689 12,973 Other 17,315 39,831 8,891 Ps. 69,224 94,501 53,184 |
Other assets (Tables)
Other assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other assets | |
Schedule of other assets | 2021 2020 2019 Inventory of rewards Ps. 54,247 28,804 13,315 Rewards catalogs 12,067 10,492 — Recoverable taxes 10,725 44,618 — Security deposit 4,274 5,774 3,549 Restricted cash — 42,915 — Transaction costs of the merger — — 9,822 Other receivables 4,949 3,588 7,259 86,262 136,191 33,945 Current 81,988 130,417 20,574 Non-current 4,274 5,774 13,371 Ps. 86,262 136,191 33,945 |
Property, plant and equipment_2
Property, plant and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, plant and equipment, net | |
Disclosure of detailed information about property, plant and equipment [text block] | 2021 2020 2019 Acquisition cost Ps. 1,231,794 905,840 305,874 Accumulated depreciation (162,302) (114,713) (98,524) Ps. 1,069,492 791,127 207,350 |
Schedule of property, plant and equipment, net acquisition cost | As of As of January 01, December 31, Acquisition cost: 2019 Additions Disposals 2019 Land Ps. — 47,124 — 47,124 Molds 37,515 3,754 — 41,269 Vehicles 1,602 — — 1,602 Computers and equipment 59,640 7,183 — 66,823 Leasehold improvements 24,492 5,390 — 29,882 Construction in progress — 119,174 — 119,174 Ps. 123,249 182,625 — 305,874 As of As of December 31, January 03, Acquisition cost: 2019 Additions Disposals 2021 Land Ps. 47,124 2,132 — 49,256 Molds 41,269 85,049 (22) 126,296 Vehicles 1,602 28,740 (17,235) 13,107 Computers and equipment 66,823 3,273 (2,056) 68,040 Leasehold improvements 29,882 4,426 — 34,308 Buildings — 326,644 — 326,644 Construction in progress 119,174 169,015 — 288,189 Ps. 305,874 619,279 (19,313) 905,840 As of As of January 03, Acquisition of December 31, Acquisition cost: 2021 subsidiaries Additions Disposals Transferred 2021 Land Ps. 49,256 — — — — 49,256 Molds 126,296 — 82,457 (2,334) 63,729 270,148 Vehicles 13,107 — 6,046 (1,439) — 17,714 Computers and equipment 68,040 13,473 709 (19,764) 18,521 80,979 Leasehold improvements 34,308 539 119 (831) 3,980 38,115 Buildings 326,644 — — — 351,654 678,298 Construction in progress 288,189 — 246,979 — (437,884) 97,284 Ps. 905,840 14,012 336,310 (24,368) — 1,231,794 |
Schedule of property, plant and equipment accumulated depreciation | As of As of January 01, Depreciation December 31, Accumulated depreciation: 2019 Additions Disposals 2019 Molds Ps. (22,963) (2,685) — (25,648) Vehicles (1,446) (59) — (1,505) Computers and equipment (36,500) (11,503) — (48,003) Leasehold improvements (19,368) (4,000) — (23,368) Ps. (80,277) (18,247) — (98,524) As of As of December 31, Depreciation January 03, Accumulated depreciation: 2019 Additions Disposals 2021 Molds Ps. (25,648) (3,636) — (29,284) Vehicles (1,505) (633) — (2,138) Computers and equipment (48,003) (9,837) 1,043 (56,797) Leasehold improvements (23,368) (1,856) — (25,224) Buildings — (1,270) — (1,270) Ps. (98,524) (17,232) 1,043 (114,713) As of As of January 03, Depreciation December 31, Accumulated depreciation: 2021 expense Disposals 2021 Molds Ps. (29,284) (20,236) 759 (48,761) Vehicles (2,138) (3,162) 17 (5,283) Computers and equipment (56,797) (9,374) 11,983 (54,188) Leasehold improvements (25,224) (4,915) 203 (29,936) Buildings (1,270) (22,864) — (24,134) Ps. (114,713) (60,551) 12,962 (162,302) |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill | |
Schedule of goodwill | As of As of January 03, December 31, 2019 Additions Disposals 2019 Cost Ps. 348,441 — — 348,441 As of As of December 31, January 03, 2019 Additions Disposals 2021 Cost Ps. 348,441 — — 348,441 As of As of January 03, December 31, 2021 Additions Disposals 2021 Cost Ps. 348,441 22,634 — 371,075 |
Schedule of values assigned to the key assumptions represent management's assessment of future trends in the relevant industries and have been based on historical data from both internal and external sources | In percentages 2021 2020 2019 Discount rate 12.8 11.2 12.4 Terminal value growth rate 3.0 3.0 3.0 Budgeted EBITDA growth rate 30.0 38.0 14.0 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure of intangible assets [text block] [Abstract] | |
Schedule of intangible assets | As of As of January 01, December 31, Acquisition cost: 2019 Additions Disposals 2019 Brand Ps. 253,000 — — 253,000 Customer relationships 64,000 — — 64,000 Software 17,135 4,516 — 21,651 Brands and logo rights 6,209 1,399 — 7,608 Ps. 340,344 5,915 — 346,259 As of As of January 01, Amortization December 31, Accumulated amortization: 2019 expense Disposals 2019 Customer relationships Ps. (24,533) (6,400) — (30,933) Software — (421) — (421) Brands and logo rights (3,712) (228) — (3,940) Ps. (28,245) (7,049) — (35,294) As of As of December 31, January 03, Acquisition cost: 2019 Additions Disposals 2021 Brand Ps. 253,000 — — 253,000 Customer relationships 64,000 — — 64,000 Software 21,651 24,333 — 45,984 Brands and logo rights 7,608 276 (2,491) 5,393 Ps. 346,259 24,609 (2,491) 368,377 As of As of December 31, Amortization January 03, Accumulated amortization: 2019 expense Disposals 2021 Customer relationships Ps. (30,933) (6,400) — (37,333) Software (421) (6,675) — (7,096) Brands and logo rights (3,940) (647) — (4,587) Ps. (35,294) (13,722) — (49,016) As of As of January 03, December 31, Acquisition cost: 2021 Additions Disposals 2021 Brand Ps. 253,000 — — 253,000 Customer relationships 64,000 — — 64,000 Software 45,984 65,356 — 111,340 Brands and logo rights 5,393 70 — 5,463 Ps. 368,377 65,426 — 433,803 As of As of January 03, Amortization December 31, Accumulated amortization: 2021 expense Disposals 2021 Customer relationships Ps. (37,333) (6,400) — (43,733) Software (7,096) (8,377) — (15,473) Brands and logo rights (4,587) (250) — (4,837) Ps. (49,016) (15,027) — (64,043) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Schedule of right of use assets | As of As of January 1, December 31, 2019 Additions Disposals 2019 Cost Ps. 36,909 — — 36,909 As of As of January 1, Depreciation December 31, 2019 expense Disposals 2019 Accumulated depreciation Ps. — (13,098) — (13,098) As of As of December 31, January 03, 2019 Additions Disposals 2021 Cost Ps. 36,909 20,531 (17,861) 39,579 As of As of December 31, Depreciation January 03, 2019 expense Disposals 2021 Accumulated depreciation Ps. (13,098) (12,734) 11,135 (14,697) As of As of January 03, December 31, 2021 Additions Disposals 2021 Cost Ps. 39,579 1,388 (3,275) 37,692 As of As of January 03, Depreciation December 31, 2021 expense Disposals 2021 Accumulated depreciation Ps. (14,697) (6,544) 933 (20,308) |
Schedule of total future minimum lease payments | Year Amount 2022 Ps 6,543 2023 5,980 2024 3,078 2025 2,925 2026 339 Ps 18,865 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure of borrowings [text block] [Abstract] | |
Schedule of long-term debt | 2021 2020 2019 Two-tranche sustainability bond, with maturities across 4 and 7 years, offered in the Mexican Market through the Bolsa Mexicana de Valores; the first offer of Ps.500,000 started paying interest at 5.15% plus 0.40% and for the monthly subsequent payments, the rate will be based on the 29-day TIIE rate issued by BANXICO plus 0.40%; the second offer of Ps.1,000,000 will pay interest semi-annually at a fixed rate of 8.35%, during the sustainability bond term. Ps. 1,482,261 — — Innova Catálogos has a loan for financial support or "Emerging Plan for the protection of employment and income of people"; The loan was acquired at the beginning of 2021, for the amount of Ps.40, with maturity across 18 months, and monthly payments of Ps.2.2, this loan does not accrue interest, however in case of default, it will accrue interest at the rate of 24% on unpaid balances. 15 — — Secured credit line with Banamex, for up to Ps.400,000, bearing interest at the TIIE rate plus 260 basis points. Withdrawals from this secured credit line can be made during a 10-month period starting December 15, 2018, and are payable on a quarterly basis from December 17, 2019, up to December 18, 2025. This secured credit line was prepaid on August 31, 2021, with the proceeds from the sustainability bond. — 373,333 135,209 Secured credit line with Banamex for up to Ps.195,000, bearing interest at the TIIE rate plus 295 basis points, payable on a quarterly basis from October 30, 2020, to December 30, 2025. This secured credit line was prepaid on August 31, 2021 with the proceeds from the sustainability bond. — 188,500 — Credit line with BBVA for up to Ps.75,000 bearing interest at 7.5%, payable monthly from September 20, 2020, to August 31, 2023. This credit line was prepaid on August 31, 2021 with the proceeds from the sustainability bond. — 64,721 — Credit line with MCRF P, S.A. de C.V. SOFOM, E.N.R. of Ps.600,000, bearing interest at a fixed rate of 13.10%. This credit line is payable on a quarterly basis starting May 15, 2019, through May 15, 2023. BLSM Latino América Servicios, S.A. de C.V., is a guarantor in this loan. — — 516,597 Unsecured credit line with Banamex, for up to Ps. — — 15,000 Interest payable Ps. 28,109 3,323 10,907 Total debt 1,510,385 629,877 677,713 Less: Current portion 28,124 105,910 148,070 Long-term debt Ps. 1,482,261 523,967 529,643 |
Schedule of cash flows arising from financing activities | Derivative Long-term debt financial and borrowings Interest payable instruments, net Balance as of January 01, 2019 Ps. 620,164 11,227 16,629 Changes that represent cash flows - Loans obtained 104,500 — — Restricted cash (1) 22,940 — — Payments (82,996) (95,033) — Changes that do not represent cash flows - Interest expense — 85,429 — Borrowing costs capitalized in PP&E — 9,284 — Valuation effects of derivative financial instruments — — 15,680 Amortization of commissions and debt issuance costs 2,198 — — Balance as of December 31, 2019 Ps. 666,806 10,907 32,309 Changes that represent cash flows - Loans obtained 1,712,207 — — Restricted cash (1) (42,915) — — Payments (1,757,112) (121,297) — Changes that do not represent cash flows - Interest expense — 80,253 — Borrowing costs capitalized in PP&E — 33,460 — Valuation effects of derivative financial instruments — — 287,985 Amortization of commissions and debt issuance costs 4,653 — — Balances as of January 03, 2021 Ps. 583,639 3,323 320,294 Changes that represent cash flows - Loans obtained 1,520,000 — — Restricted cash (1) 42,915 — — Payments (646,716) (49,123) (18,172) Bond issuance costs (18,931) — — Changes that do not represent cash flows - Interest expense — 73,909 — Control obtained over subsidiaries 177 Amortization of commissions and debt issuance cost 1,192 — — Valuation effects of derivative financial instruments — — (330,315) Balance as of December 31, 2021 Ps. 1,482,276 28,109 (28,193) (1) Balances in column “ Long-term debt” in the table above, are netted with restricted cash balances on 2020 period. |
Schedule of long-term debt maturities | Year Amount 2022 Ps. 115,343 2023 115,343 2024 115,343 2025 605,829 2026-2028 1,253,283 Ps. 2,205,141 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income taxes | |
Schedule of income tax recognized in profit or loss | 2021 2020 2019 Current tax Ps. 782,901 576,834 229,900 Deferred tax expense (benefit) 41,553 (34,066) 2,792 Ps. 824,454 542,768 232,692 |
Schedule of reconciliation of income tax expense recognized from statutory to effective ISR rate | 2021 2020 2019 Profit before income tax Ps. 2,625,338 881,129 704,834 Tax rate 30 % 30 % 30 % Income tax expense calculated at 30% statutory tax rate 787,601 264,339 211,450 Inflation effects, net 25,039 8,333 6,278 Non-deductible expenses 5,790 5,493 3,202 Loss on valuation of warrants — 255,456 — Share-based payments 1,744 8,275 — Other items, net 4,280 872 11,762 Ps. 824,454 542,768 232,692 31 % 62 % 33 % |
Schedule of deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances | Recognized in As of other As of January 01, Recognized in comprehensive December 31, Temporary differences 2019 profit or loss income 2019 Deferred tax assets: Expected credit loss Ps. 2,802 2,415 — 5,217 Accruals and provisions 26,632 (668) (26) 25,938 Derivative financial instruments 4,989 (4,989) — — Property, plant and equipment 74 4,505 — 4,579 Deferred tax liabilities: Intangible assets (87,740) 1,920 — (85,820) Inventories (6,192) (3,161) — (9,353) Derivative financial instruments — (89) — (89) Other assets and prepaid expenses (11,192) (2,699) — (13,891) Net deferred tax liability Ps. (70,627) (2,766) (26) (73,419) Recognized in As of other As of December 31, Recognized in comprehensive January 03, Temporary differences 2019 profit or loss income 2021 Deferred tax assets: Expected credit loss Ps. 5,217 (3,732) — 1,485 Accruals and provisions 25,938 42,340 360 68,638 Derivative financial instruments — 35,886 — 35,886 Property, plant and equipment 4,579 (4,579) — — Deferred tax liabilities: Intangible assets (85,820) 1,920 — (83,900) Inventories (9,353) (21,687) — (31,040) Derivative financial instruments (89) 89 — — Property, plant and equipment — (10,888) — (10,888) Other assets and prepaid expenses (13,891) (5,644) — (19,535) Net deferred tax liability Ps. (73,419) 33,705 360 (39,354) As of other As of January 03, Recognized in comprehensive December 31, Temporary differences 2021 profit or loss income 2021 Deferred tax assets: Expected credit loss Ps. 1,485 21,203 — 22,688 Accruals and provisions 68,638 (31,514) — 37,124 Derivative financial instruments 35,886 (35,886) — — Property, plant and equipment — 5,538 — 5,538 Deferred tax liabilities: Intangible assets (83,900) 1,920 — (81,980) Inventories (31,040) 830 — (30,210) Derivative financial instruments — (7,380) — (7,380) Property, plant and equipment (10,888) 10,888 — — Other assets and prepaid expenses (19,535) (7,152) — (26,687) Net deferred tax liability Ps. (39,354) (41,553) — (80,907) |
Provisions (Tables)
Provisions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Provisions | |
Schedule of provisions | Commissions, Bonuses and promotions and other employee Professional other benefits services fees Total As of, January 01, 2019 Ps. 35,805 1,958 1,223 38,986 Increases 345,148 90,843 2,026 438,017 Payments (348,174) (79,445) (2,695) (430,314) As of December 31, 2019 Ps. 32,779 13,356 554 46,689 Increases 1,272,651 51,253 16,947 1,340,851 Payments (1,198,284) (21,039) (17,209) (1,236,532) As of January 03, 2021 Ps. 107,146 43,570 292 151,008 Increases 2,054,420 140,130 17,541 2,212,091 Payments (2,048,135) (182,439) (17,333) (2,247,907) As of December 31, 2021 Ps. 113,431 1,261 500 115,192 |
Derivative financial instrume_2
Derivative financial instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative financial instruments | |
Schedule of derivative financial instrument contracts | As of December 31, 2021 Notional Average amount in Fair Strike Instrument thousands Value Ps./US$ Maturity date Forwards US Dollar / Mexican Peso US$ 134,050 Ps. 28,193 20.66 Weekly, through October 2022 Total Assets Ps. 28,193 As of January 3, 2021 Notional amount in Fair Contract Maturity Rate Rate Instrument thousands Value date date received paid Liabilities: Interest rate swap Ps. 353,333 Ps. 32,842 11/15/2018 12/15/2023 TIIE 28 days (1) 8.33 % Average Strike Ps./US$ Maturity date Forwards US Dollar / Mexican Peso US$ 140,325 Ps. 287,452 22.36 Weekly, through October 2021 Total Liabilities Ps. 320,294 Non-current liability Ps. 25,179 Total current liability Ps. 295,115 (2) As of January 3, 2021, the 28-day TIIE rate was 4.49% . As of December 31, 2019 Notional amount in Fair Contract Maturity Rate Rate Instrument thousands Value date date received paid Liabilities: Interest rate swap Ps. 50,000 Ps. 19,614 11/15/2018 12/15/2023 TIIE 28 days (1) 8.33 % Average Strike Ps./US$ Maturity date Forwards US Dollar / Mexican Peso US$ 47,690 Ps. 12,695 19.61 Weekly, through October 2020 Total Liabilities Ps. 32,309 Non-current liability Ps. 16,754 Total current liability Ps. 15,555 (1) As of December 31, 2019, the 28-day TIIE rate was 7.55% . |
Employee benefits (Tables)
Employee benefits (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Employee benefits | |
Schedule of net defined benefit liability and its components | 2021 2020 2019 Balance at January 01 Ps. 1,678 1,630 1,355 Included in profit or loss: Current service cost 614 425 424 Interest cost 101 114 123 Net cost of the period 715 539 547 Included in other comprehensive income: Actuarial loss (gain) (83) 1,199 (102) Income tax effect — (360) 26 Other: Benefits paid (217) (1,330) (196) Balance as of December 31, 2021 Ps. 2,093 1,678 1,630 |
Schedule of principal actuarial assumptions | 2021 2020 2019 Financial: Future salary growth 5.0 % 4.0 % 4.5 % Discount rate 7.6 % 6.1 % 7.1 % Demographic: Number of employees 1,272 1,294 654 Age average 32 years 31 years 35 years Longevity average 2 years 2 years 3 years |
Schedule of sensitivity analysis | Effects as of Effects as of Effects as of December 31, January 03, December 31, 2021 2021 2019 Increase / decrease in the discount rate + 0.50% Ps. 156 126 (127) - 0.50% (174) (141) 115 |
Financial instruments (Tables)
Financial instruments (Tables) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2021 | |
Financial instruments | ||
Schedule of financial instruments | Fair value Amortized through profit Fair value As of December 31, 2021 cost or loss hierarchy level Financial assets - Trade account receivables, net Ps. 778,054 — Trade account receivables from related parties 24 — Derivative financial instruments — 28,193 2 Total 778,078 28,193 Financial liabilities - Accounts payable to suppliers 1,984,932 — Lease liability 17,880 — Long term debt 1,510,385 — — Total 3,513,197 — Fair value Amortized through profit Fair value As of January 03, 2021 cost or loss hierarchy level Financial assets - Trade account receivables, net Ps. 757,806 — Total 757,806 — Financial liabilities - Debt 629,877 — Accounts payable to suppliers 2,078,628 — Lease liability 24,378 — Derivative financial instruments — 320,294 2 Total 2,732,883 320,294 Fair value Amortized through profit Fair value As of December 31, 2019 cost or loss hierarchy level Financial assets - Trade account receivables, net Ps. 266,938 — Other receivables 5,867 — Total 272,805 — Financial liabilities - Debt 677,713 — Accounts payable to suppliers 529,348 — Lease liability 24,584 — Derivative financial instruments — 32,309 2 Total 1,231,645 32,309 | |
Schedule of fair value hierarchy levels at the reporting date | Financial assets/ financial liabilities Valuation technique(s) and key input(s) Significant unobservable input(s) Relationship and sensitivity of unobservable inputs to fair value Foreign currency forward contracts and interest rate swaps (see Note 18) Discounted cash flows. N/A N/A | |
Schedule of financial assets and financial liabilities at the reporting date | 2021 2020 2019 Assets US$ 10,686 29,559 1,331 Liabilities (35,148) (49,570) (16,095) Net position US$ (24,462) (20,011) (14,764) Closing exchange rate of the year 20.5157 19.9352 18.8452 | |
Schedule of exchange rate sensitivity analysis | 2021 Impact on net income Ps. 50,186 | |
Schedule of bank credit lines | Bank credit lines and long-term debt 2021 2020 2019 Amount used Ps. 1,500,000 626,554 656,459 Amount not used 250,000 297,828 260,500 Total credit lines and long-term debt Ps. 1,750,000 924,382 916,959 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' equity | |
Schedule of stockholders' equity number of shares | Betterware de Betterware de México, S.A.P.I. de C.V. México, S.A.P.I. de and BLSM Latino America Servicios, C.V. S.A. de C.V. (1) As of December 31, As of January 03, As of December 31, 2021 2021 2019 Fixed capital 10,000 10,000 10,000 Variable capital 37,306,546 36,574,968 8,687,317 37,316,546 36,584,968 8,697,317 (1) As of December 31, 2019 , for the period ended December 31, 2019, the Group presented combined financial statements including Betterware and BLSM as they were entities under common control. The Group previously prepared combined statements of changes in net parent investment when all periods presented represented the combined results of both entities. As a result of the merger in March 2020, which resulted in BLSM becoming a wholly owned subsidiary of Betterware and the issuance of shares to the existing shareholders of such entities, the Group now prepares consolidated financial statements as of such date. The Group has therefore presented a combined statement of changes in stockholders’ equity for the period ended December 31, 2019, (presenting the net parent investment gross by including contributed capital and retained earnings, rather than net as presented in prior periods), as management believes it is a preferable presentation for comparability purposes with the existing share structure and presentation applicable to the consolidated financial statements as of December 31, 2021, and January 3, 2021, and for the periods ended December 31, 2021, and January 3, 2021. |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings per share | |
Schedule of income and share data used in calculation of basic earnings per share | 2021 2020 2019 Net income (in thousands of pesos) Attributable to Owners of the Company Ps. 1,804,590 338,361 472,142 Shares (in thousands of shares) Weighted average of outstanding shares Basic 36,974 34,083 30,200 Diluted 37,337 34,383 30,200 Basic and diluted earnings per share: Basic earnings per share (pesos per share) Ps. 48.81 9.93 15.63 Diluted earnings per share (pesos per share) 48.33 9.84 15.63 |
Related parties balances and _2
Related parties balances and transactions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Related parties balances and transactions | |
Schedule of related parties outstanding | 2021 2020 2019 Trade accounts receivable from related parties Fundación Betterware., A.C. Ps. 24 — 610 Ps. 24 — 610 2021 Lease income Donations Revenues /expenses to Betterware with: Fundación Betterware., A.C. Ps. 42 920 |
Revenue and operating expenses
Revenue and operating expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue and operating expenses | |
Schedule of revenue and operating expenses | 2021 2020 2019 Kitchen and food preservation Ps. 3,274,245 2,532,420 1,229,148 Home solutions 2,312,675 1,456,666 529,551 Bedroom 1,603,930 826,965 275,722 Bathroom 1,214,524 842,724 441,093 Laundry & Cleaning 823,880 828,473 318,782 Tech & mobility 767,614 773,160 290,366 Internet, telephone services and equipment 19,030 — — Interest income 12,498 — — Clothes and shoes 11,272 — — Ps. 10,039,668 7,260,408 3,084,662 |
Schedule of operating expenses by nature | 2021 2020 2019 Cost of personnel services and other employee benefits Ps. 621,519 564,213 423,956 Promotions for the sales force 503,291 172,177 26,311 Distribution costs 463,762 331,023 121,155 Sales catalog 425,814 247,250 128,687 Packing materials 201,006 112,512 58,361 Impairment loss on trade accounts receivables 198,495 57,627 22,512 Events, marketing and advertising 109,822 19,237 37,848 Depreciation and amortization 82,122 43,688 38,394 Commissions and professional fees 69,954 61,403 13,577 Rent expense 52,660 22,451 17,663 Bank fees 34,335 23,965 15,436 Travel expenses 11,258 13,522 18,835 Other 201,758 179,987 68,853 Ps. 2,975,796 1,849,055 991,588 |
Nature of business and signif_2
Nature of business and significant events (Details) $ / shares in Units, $ in Thousands, $ in Thousands | Aug. 30, 2021MXN ($)tranche | Dec. 14, 2020MXN ($) | Oct. 08, 2020$ / sharesshares | Mar. 13, 2020MXN ($)shares | Mar. 13, 2020USD ($)shares | Mar. 10, 2020$ / sharesshares | Jul. 31, 2020 | Oct. 07, 2020$ / shares | Dec. 31, 2021MXN ($)itemshares | Jan. 03, 2021MXN ($)shares | Dec. 31, 2019MXN ($)shares | Mar. 13, 2020USD ($)shares |
Nature of business and significant events (Details) [Line Items] | ||||||||||||
Number of catalogs published throughout the year | item | 12 | |||||||||||
Percentage of products sold in the United States | 90.00% | |||||||||||
Payment conditions to suppliers | 120 days | |||||||||||
Cash obtained | $ 498,445 | |||||||||||
Net cash | 181,734 | |||||||||||
Liability transaction equivalent fair value | $ 55,810 | |||||||||||
Shares offered for subscription and payment | shares | 2,040,000 | 2,040,000 | ||||||||||
Percentage of shares held by shareholders | 87.70% | 87.70% | ||||||||||
Percentage of shares held by acquired entity shareholders | 6.40% | 6.40% | ||||||||||
Percentage of shares held by other investors | 5.90% | 5.90% | ||||||||||
issuance of shares issued and outstanding | shares | 34,451,020 | 37,316,546 | 34,451,020 | 30,199,945 | 34,451,020 | |||||||
Purchase total share | shares | 5,804,125 | |||||||||||
Purchase option unit share | shares | 250,000 | |||||||||||
Option issue share | shares | 250,000 | |||||||||||
Additional share | shares | 250,000 | |||||||||||
Issuance share | shares | 214,020 | |||||||||||
Exercise price per share | $ / shares | $ 11.44 | |||||||||||
Warrant holder receive share | shares | 0.37 | |||||||||||
Increase equity | $ 4,724 | |||||||||||
Total investment | $ 1,070,958 | |||||||||||
Major ordinary share transactions [Member] | ||||||||||||
Nature of business and significant events (Details) [Line Items] | ||||||||||||
Payments related to construction | $ 397,000 | $ 508,958 | $ 165,000 | |||||||||
Two Tranche Sustainability Bond [Member] | ||||||||||||
Nature of business and significant events (Details) [Line Items] | ||||||||||||
Debt instrument, number of tranches | tranche | 2 | |||||||||||
Notional amount | $ 1,500,000 | |||||||||||
Bottom of range [member] | ||||||||||||
Nature of business and significant events (Details) [Line Items] | ||||||||||||
Payment conditions of clients | 14 days | |||||||||||
Shares vested over a period | 4 years | |||||||||||
Bottom of range [member] | Two Tranche Sustainability Bond [Member] | ||||||||||||
Nature of business and significant events (Details) [Line Items] | ||||||||||||
Maturity term | 4 years | |||||||||||
Top of range [member] | ||||||||||||
Nature of business and significant events (Details) [Line Items] | ||||||||||||
Payment conditions of clients | 28 days | |||||||||||
Shares vested over a period | 5 years | |||||||||||
Top of range [member] | Two Tranche Sustainability Bond [Member] | ||||||||||||
Nature of business and significant events (Details) [Line Items] | ||||||||||||
Maturity term | 7 years | |||||||||||
United States of America, Dollars | ||||||||||||
Nature of business and significant events (Details) [Line Items] | ||||||||||||
Cash obtained | $ 22,767 | |||||||||||
Net cash | $ 7,519 | |||||||||||
Exercise price per share | $ / shares | $ 11.44 | $ 11.50 | ||||||||||
Paid exercise price per share | $ / shares | 0.50 | |||||||||||
Exercise price per share adjusted for dividends paid | $ / shares | $ 11.44 |
Significant accounting polici_3
Significant accounting policies (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Significant accounting policies (Details) [Line Items] | |
Intangible asset with a definite useful life | 10 years |
Number of days per year worked to determine the defined benefit obligations cover seniority premiums which consist of a lump sum | 12 days |
Bottom of range [member] | |
Significant accounting policies (Details) [Line Items] | |
Expenditures are amortized on a straight-line basis over their estimated useful lives | 10 years |
Customers shipment date with payment terms | 15 days |
Top of range [member] | |
Significant accounting policies (Details) [Line Items] | |
Expenditures are amortized on a straight-line basis over their estimated useful lives | 30 years |
Customers shipment date with payment terms | 30 days |
Significant accounting polici_4
Significant accounting policies - Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Buildings [Member] | Bottom of range [member] | |
Significant accounting policies (Details) - Schedule of useful lives are used in the calculation of depreciation [Line Items] | |
Estimated useful lives and depreciation method | 5 years |
Buildings [Member] | Top of range [member] | |
Significant accounting policies (Details) - Schedule of useful lives are used in the calculation of depreciation [Line Items] | |
Estimated useful lives and depreciation method | 50 years |
Molds [Member] | |
Significant accounting policies (Details) - Schedule of useful lives are used in the calculation of depreciation [Line Items] | |
Estimated useful lives and depreciation method | 5 years |
Vehicles [Member] | |
Significant accounting policies (Details) - Schedule of useful lives are used in the calculation of depreciation [Line Items] | |
Estimated useful lives and depreciation method | 4 years |
Computers and equipment [Member] | Bottom of range [member] | |
Significant accounting policies (Details) - Schedule of useful lives are used in the calculation of depreciation [Line Items] | |
Estimated useful lives and depreciation method | 3 years |
Computers and equipment [Member] | Top of range [member] | |
Significant accounting policies (Details) - Schedule of useful lives are used in the calculation of depreciation [Line Items] | |
Estimated useful lives and depreciation method | 10 years |
Leasehold improvements [Member] | |
Significant accounting policies (Details) - Schedule of useful lives are used in the calculation of depreciation [Line Items] | |
Estimated useful lives and depreciation method | 3 years |
Significant accounting polici_5
Significant accounting policies - Percentage of Participation (Details) | 12 Months Ended |
Dec. 31, 2021 | |
BLSM Latino America Servicios, S.A. de C.V. [Member] | |
Significant accounting policies (Details) [Line Items] | |
Percentage of participation | 99.00% |
GurComm, S.A.P.I. de C.V. [Member] | |
Significant accounting policies (Details) [Line Items] | |
Percentage of participation | 60.00% |
Betterware de Guatemala, S.A.[Member] | |
Significant accounting policies (Details) [Line Items] | |
Percentage of participation | 70.00% |
Programa Lazos, S.A. de C.V. [Member] | |
Significant accounting policies (Details) [Line Items] | |
Percentage of participation | 70.00% |
Innova Catlogos, S.A. de C.V. [Member] | |
Significant accounting policies (Details) [Line Items] | |
Percentage of participation | 70.00% |
Cash and cash equivalents (Deta
Cash and cash equivalents (Details) $ in Thousands | Jan. 03, 2021MXN ($) |
Cash and cash equivalents | |
Restricted cash | $ 42,915 |
Cash and cash equivalents - Sch
Cash and cash equivalents - Schedule of cash and cash equivalents (Details) - MXN ($) $ in Thousands | Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | Dec. 31, 2018 |
Cash and cash equivalents (Details) - Schedule of cash and cash equivalents [Line Items] | ||||
Cash and cash equivalents | $ 1,175,198 | $ 649,820 | $ 213,697 | $ 177,383 |
Cash on hand in banks [Member] | ||||
Cash and cash equivalents (Details) - Schedule of cash and cash equivalents [Line Items] | ||||
Cash and cash equivalents | 951,092 | 629,146 | 96,008 | |
Time deposits [Member] | ||||
Cash and cash equivalents (Details) - Schedule of cash and cash equivalents [Line Items] | ||||
Cash and cash equivalents | $ 224,106 | $ 20,674 | $ 117,689 |
Trade accounts receivables - Sc
Trade accounts receivables - Schedule of trade accounts receivable (Details) - MXN ($) $ in Thousands | Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 |
Schedule of trade accounts receivable [Abstract] | |||
Trade account receivables | $ 868,218 | $ 766,889 | $ 260,727 |
Expected credit loss | (90,164) | (9,083) | (13,640) |
Trade receivables | 778,054 | 757,806 | 247,087 |
Accounts receivable canceled | $ 117,414 | $ 62,184 | $ 18,215 |
Trade accounts receivables - _2
Trade accounts receivables - Schedule of trade accounts receivable past due (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Trade accounts receivable (Details) - Schedule of trade accounts receivable past due [Line Items] | |||
Estimated total gross carrying amount at default | $ 868,218 | $ 643,126 | $ 255,982 |
Expected credit loss | $ 90,164 | $ 46,260 | $ 22,515 |
Turnover of accounts receivables | 30 days | ||
Top of range [member] | |||
Trade accounts receivable (Details) - Schedule of trade accounts receivable past due [Line Items] | |||
Turnover of accounts receivables | 28 days | 28 days | |
Bottom of range [member] | |||
Trade accounts receivable (Details) - Schedule of trade accounts receivable past due [Line Items] | |||
Turnover of accounts receivables | 14 days | 14 days | |
Not Past Due [Member] | |||
Trade accounts receivable (Details) - Schedule of trade accounts receivable past due [Line Items] | |||
Expected credit loss rate | 1.00% | 2.00% | 2.00% |
Estimated total gross carrying amount at default | $ 593,104 | $ 539,693 | $ 207,032 |
Expected credit loss | $ 6,814 | $ 8,163 | $ 3,950 |
14-21 [Member] | |||
Trade accounts receivable (Details) - Schedule of trade accounts receivable past due [Line Items] | |||
Expected credit loss rate | 27.00% | 30.00% | 20.00% |
Estimated total gross carrying amount at default | $ 31,439 | $ 31,918 | $ 12,098 |
Expected credit loss | $ 8,338 | $ 9,588 | $ 2,454 |
21 - 28 [Member] | |||
Trade accounts receivable (Details) - Schedule of trade accounts receivable past due [Line Items] | |||
Expected credit loss rate | 60.00% | 62.00% | 49.00% |
Estimated total gross carrying amount at default | $ 22,463 | $ 17,772 | $ 7,045 |
Expected credit loss | $ 13,386 | $ 10,946 | $ 3,477 |
>28 [Member] | |||
Trade accounts receivable (Details) - Schedule of trade accounts receivable past due [Line Items] | |||
Expected credit loss rate | 28.00% | 33.00% | 42.00% |
Estimated total gross carrying amount at default | $ 221,212 | $ 53,743 | $ 29,807 |
Expected credit loss | $ 61,626 | $ 17,563 | $ 12,634 |
Trade accounts receivables - _3
Trade accounts receivables - Schedule of expected credit loss (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Schedule of expected credit loss [Abstract] | |||
Balance | $ (9,083) | $ (13,640) | $ (9,340) |
Expected credit loss | (198,495) | (46,260) | (22,515) |
Specific credit loss | (11,367) | ||
Amounts written off | 117,414 | 62,184 | 18,215 |
Balance | $ (90,164) | $ (9,083) | $ (13,640) |
Inventories and cost of sales_2
Inventories and cost of sales (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Inventories and cost of sales | |||
Cost of inventories recognized as an expense | $ 4,399,164 | $ 3,290,994 | $ 1,280,829 |
Write-downs of inventory | $ 43,645 | $ 24,438 | $ 14,273 |
Inventories and cost of sales -
Inventories and cost of sales - Schedule of inventories and cost of sales (Details) - MXN ($) $ in Thousands | Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 |
Schedule of inventories and cost of sales [Abstract] | |||
Finished goods | $ 901,523 | $ 904,999 | $ 224,025 |
Packing material | 35,718 | 26,029 | 4,577 |
Cost of inventories | 937,241 | 931,028 | 228,602 |
Merchandise in transit | 402,137 | 342,998 | 116,952 |
Inventories | $ 1,339,378 | $ 1,274,026 | $ 345,554 |
Prepaid expenses - Schedule of
Prepaid expenses - Schedule of Prepaid expenses (Details) - MXN ($) $ in Thousands | Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 |
Schedule of Prepaid expenses [Abstract] | |||
Printed catalogs | $ 33,628 | $ 41,920 | $ 21,692 |
Premiums paid in advance for insurance | 16,961 | 10,061 | 9,628 |
Advances to suppliers | 1,320 | 2,689 | 12,973 |
Other | 17,315 | 39,831 | 8,891 |
Total prepaid expenses | $ 69,224 | $ 94,501 | $ 53,184 |
Other assets - Schedule of othe
Other assets - Schedule of other assets (Details) - MXN ($) $ in Thousands | Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 |
Schedule of other assets [Abstract] | |||
Inventory of rewards | $ 54,247 | $ 28,804 | $ 13,315 |
Reward Catalogs | 12,067 | 10,492 | |
Recoverable taxes | 10,725 | 44,618 | |
Security deposit | 4,274 | 5,774 | 3,549 |
Restricted cash | 42,915 | ||
Transaction costs of the merger | 9,822 | ||
Other receivables | 4,949 | 3,588 | 7,259 |
Total other assets | 86,262 | 136,191 | 33,945 |
Current | 81,988 | 130,417 | 20,574 |
Non-current | $ 4,274 | $ 5,774 | $ 13,371 |
Property, plant and equipment_3
Property, plant and equipment, net - Schedule of property, plant and equipment, net (Details) - MXN ($) $ in Thousands | Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of property, plant and equipment, net [Abstract] | ||||
Acquisition cost | $ 1,231,794 | $ 905,840 | $ 305,874 | $ 123,249 |
Accumulated depreciation | (162,302) | (114,713) | (98,524) | |
Total property, plant and equipment, net | $ 1,069,492 | $ 791,127 | $ 207,350 |
Property, plant and equipment_4
Property, plant and equipment, net - Schedule of property, plant and equipment, net acquisition cost (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment, net acquisition cost [Line Items] | |||
Acquisition cost, Beginning balance | $ 905,840 | $ 305,874 | $ 123,249 |
Acquisition cost, Acquisition of subsidiaries | 14,012 | ||
Acquisition cost, Additions | 336,310 | 619,279 | 182,625 |
Acquisition cost, Disposals | (24,368) | (19,313) | |
Acquisition cost, Ending balance | 1,231,794 | 905,840 | 305,874 |
Land [Member] | |||
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment, net acquisition cost [Line Items] | |||
Acquisition cost, Beginning balance | 49,256 | 47,124 | |
Acquisition cost, Additions | 2,132 | 47,124 | |
Acquisition cost, Ending balance | 49,256 | 49,256 | 47,124 |
Molds [Member] | |||
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment, net acquisition cost [Line Items] | |||
Acquisition cost, Beginning balance | 126,296 | 41,269 | 37,515 |
Acquisition cost, Additions | 82,457 | 85,049 | 3,754 |
Acquisition cost, Disposals | (2,334) | (22) | |
Acquisition cost, Transferred | 63,729 | ||
Acquisition cost, Ending balance | 270,148 | 126,296 | 41,269 |
Vehicles [Member] | |||
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment, net acquisition cost [Line Items] | |||
Acquisition cost, Beginning balance | 13,107 | 1,602 | 1,602 |
Acquisition cost, Additions | 6,046 | 28,740 | |
Acquisition cost, Disposals | (1,439) | (17,235) | |
Acquisition cost, Ending balance | 17,714 | 13,107 | 1,602 |
Computers and equipment [Member] | |||
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment, net acquisition cost [Line Items] | |||
Acquisition cost, Beginning balance | 68,040 | 66,823 | 59,640 |
Acquisition cost, Acquisition of subsidiaries | 13,473 | ||
Acquisition cost, Additions | 709 | 3,273 | 7,183 |
Acquisition cost, Disposals | (19,764) | (2,056) | |
Acquisition cost, Transferred | 18,521 | ||
Acquisition cost, Ending balance | 80,979 | 68,040 | 66,823 |
Leasehold improvements [Member] | |||
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment, net acquisition cost [Line Items] | |||
Acquisition cost, Beginning balance | 34,308 | 29,882 | 24,492 |
Acquisition cost, Acquisition of subsidiaries | 539 | ||
Acquisition cost, Additions | 119 | 4,426 | 5,390 |
Acquisition cost, Disposals | (831) | ||
Acquisition cost, Transferred | 3,980 | ||
Acquisition cost, Ending balance | 38,115 | 34,308 | 29,882 |
Construction in progress [Member] | |||
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment, net acquisition cost [Line Items] | |||
Acquisition cost, Beginning balance | 288,189 | 119,174 | |
Acquisition cost, Additions | 246,979 | 169,015 | 119,174 |
Acquisition cost, Transferred | (437,884) | ||
Acquisition cost, Ending balance | 97,284 | 288,189 | $ 119,174 |
Buildings [Member] | |||
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment, net acquisition cost [Line Items] | |||
Acquisition cost, Beginning balance | 326,644 | ||
Acquisition cost, Additions | 326,644 | ||
Acquisition cost, Transferred | 351,654 | ||
Acquisition cost, Ending balance | $ 678,298 | $ 326,644 |
Property, plant and equipment_5
Property, plant and equipment, net - Schedule of property, plant and equipment accumulated depreciation (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment accumulated depreciation [Line Items] | |||
Accumulated depreciation, Beginning balance | $ (114,713) | $ (98,524) | $ (80,277) |
Accumulated depreciation, Depreciation expense | (60,551) | (17,232) | (18,247) |
Accumulated depreciation, Eliminated on disposals | 12,962 | 1,043 | |
Accumulated depreciation, Ending balance | (162,302) | (114,713) | (98,524) |
Molds [Member] | |||
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment accumulated depreciation [Line Items] | |||
Accumulated depreciation, Beginning balance | (29,284) | (25,648) | (22,963) |
Accumulated depreciation, Depreciation expense | (20,236) | (3,636) | (2,685) |
Accumulated depreciation, Eliminated on disposals | 759 | ||
Accumulated depreciation, Ending balance | (48,761) | (29,284) | (25,648) |
Vehicles [Member] | |||
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment accumulated depreciation [Line Items] | |||
Accumulated depreciation, Beginning balance | (2,138) | (1,505) | (1,446) |
Accumulated depreciation, Depreciation expense | (3,162) | (633) | (59) |
Accumulated depreciation, Eliminated on disposals | 17 | ||
Accumulated depreciation, Ending balance | (5,283) | (2,138) | (1,505) |
Computers and equipment [Member] | |||
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment accumulated depreciation [Line Items] | |||
Accumulated depreciation, Beginning balance | (56,797) | (48,003) | (36,500) |
Accumulated depreciation, Depreciation expense | (9,374) | (9,837) | (11,503) |
Accumulated depreciation, Eliminated on disposals | 11,983 | 1,043 | |
Accumulated depreciation, Ending balance | (54,188) | (56,797) | (48,003) |
Leasehold improvements [Member] | |||
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment accumulated depreciation [Line Items] | |||
Accumulated depreciation, Beginning balance | (25,224) | (23,368) | (19,368) |
Accumulated depreciation, Depreciation expense | (4,915) | (1,856) | (4,000) |
Accumulated depreciation, Eliminated on disposals | 203 | ||
Accumulated depreciation, Ending balance | (29,936) | (25,224) | $ (23,368) |
Buildings [Member] | |||
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment accumulated depreciation [Line Items] | |||
Accumulated depreciation, Beginning balance | (1,270) | ||
Accumulated depreciation, Depreciation expense | (22,864) | (1,270) | |
Accumulated depreciation, Ending balance | $ (24,134) | $ (1,270) |
Property, plant and equipment_6
Property, plant and equipment, net (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Property, plant and equipment, net | |||
Total payments related to this construction | $ 397,000 | $ 508,958 | $ 165,000 |
Total investment | $ 1,070,958 | ||
Capitalized borrowing costs | $ 33,460 | $ 9,284 |
Goodwill (Details)
Goodwill (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | Jul. 22, 2021 | Mar. 12, 2021 | |
Disclosure of detailed information about intangible assets [line items] | |||||
Weighted-average cost of capital and a market interest rate | 5.70% | 7.30% | 7.20% | ||
Estimates terminal growth, Period | 5 years | ||||
Average growth levels experienced | 5 years | ||||
Estimated sales volume and price growth period | 5 years | ||||
Forecast inflation period | 5 years | ||||
Goodwill additions | $ 22,634 | ||||
GurComm, S.A.P.I [Member] | |||||
Disclosure of detailed information about intangible assets [line items] | |||||
Percentage of voting equity interests acquired | 60.00% | ||||
Consideration transferred | $ 45,000 | ||||
Innova Catlogos, S.A. de C.V. [Member] | |||||
Disclosure of detailed information about intangible assets [line items] | |||||
Percentage of voting equity interests acquired | 70.00% | ||||
Consideration transferred | $ 5,000 |
Goodwill - Schedule of goodwill
Goodwill - Schedule of goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021MXN ($) | |
Schedule of goodwill [Abstract] | |
Goodwill additions | $ 22,634 |
Goodwill cost, Ending | $ 371,075 |
Goodwill - Schedule of values a
Goodwill - Schedule of values assigned to the key assumptions represent management assessment of future trends in the relevant industries and have been based on historical data from both internal and external sources (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Schedule of values assigned to the key assumptions represent management's assessment of future trends in the relevant industries and have been based on historical data from both internal and external sources [Abstract] | |||
Discount rate | 12.80% | 11.20% | 12.40% |
Terminal Value Growth Rate | 3.00% | 3.00% | 3.00% |
Budgeted EBITDA Growth Rate | 30.00% | 38.00% | 14.00% |
Intangible assets, net (Details
Intangible assets, net (Details) - MXN ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Intangible assets, net (Details) [Line Items] | ||||
Carrying amount of intangible assets | $ 369,760 | $ 369,760 | $ 319,361 | $ 310,965 |
Bottom of range [member] | ||||
Intangible assets, net (Details) [Line Items] | ||||
Useful life measured as period of time, intangible assets other than goodwill | 10 years | |||
Top of range [member] | ||||
Intangible assets, net (Details) [Line Items] | ||||
Useful life measured as period of time, intangible assets other than goodwill | 30 years | |||
Brand [Member] | ||||
Intangible assets, net (Details) [Line Items] | ||||
Carrying amount of intangible assets | 253,000 | $ 253,000 | 253,000 | 253,000 |
Customer relationships [Member] | ||||
Intangible assets, net (Details) [Line Items] | ||||
Carrying amount of intangible assets | $ 20,267 | 20,267 | 26,667 | 33,067 |
Amortized useful lives | ten years | |||
Brands and logos [Member] | ||||
Intangible assets, net (Details) [Line Items] | ||||
Carrying amount of intangible assets | $ 626 | $ 626 | $ 808 | $ 3,668 |
Intangible assets, net - Schedu
Intangible assets, net - Schedule of intangible assets (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Intangible assets, net (Details) - Schedule of intangible assets [Line Items] | |||
Acquisition cost, beginning balance | $ 368,377 | $ 346,259 | $ 340,344 |
Additions | 65,426 | 24,609 | 5,915 |
Disposals | (2,491) | ||
Acquisition cost, ending period | 433,803 | 368,377 | 346,259 |
Accumulated amortization, beginning balance | (49,016) | (35,294) | (28,245) |
Amortization expense | (15,027) | (13,722) | (7,049) |
Accumulated amortization, ending period | (64,043) | (49,016) | (35,294) |
Brand [Member] | |||
Intangible assets, net (Details) - Schedule of intangible assets [Line Items] | |||
Acquisition cost, beginning balance | 253,000 | 253,000 | 253,000 |
Acquisition cost, ending period | 253,000 | 253,000 | 253,000 |
Customer relationships intangible assets [Member] | |||
Intangible assets, net (Details) - Schedule of intangible assets [Line Items] | |||
Acquisition cost, beginning balance | 64,000 | 64,000 | 64,000 |
Acquisition cost, ending period | 64,000 | 64,000 | 64,000 |
Accumulated amortization, beginning balance | (37,333) | (30,933) | (24,533) |
Amortization expense | (6,400) | (6,400) | (6,400) |
Accumulated amortization, ending period | (43,733) | (37,333) | (30,933) |
Software [Member] | |||
Intangible assets, net (Details) - Schedule of intangible assets [Line Items] | |||
Acquisition cost, beginning balance | 45,984 | 21,651 | 17,135 |
Additions | 65,356 | 24,333 | 4,516 |
Acquisition cost, ending period | 111,340 | 45,984 | 21,651 |
Accumulated amortization, beginning balance | (7,096) | (421) | |
Amortization expense | (8,377) | (6,675) | (421) |
Accumulated amortization, ending period | (15,473) | (7,096) | (421) |
Brands and logo rights [Member] | |||
Intangible assets, net (Details) - Schedule of intangible assets [Line Items] | |||
Acquisition cost, beginning balance | 5,393 | 7,608 | 6,209 |
Additions | 70 | 276 | 1,399 |
Disposals | (2,491) | ||
Acquisition cost, ending period | 5,463 | 5,393 | 7,608 |
Accumulated amortization, beginning balance | (4,587) | (3,940) | (3,712) |
Amortization expense | (250) | (647) | (228) |
Accumulated amortization, ending period | $ (4,837) | $ (4,587) | $ (3,940) |
Leases (Details)
Leases (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Leases | |||
Rental expense | $ 15,703 | $ 11,605 | |
Lease liabilities | $ 17,880 | 24,378 | 24,584 |
Short term lease rental expenses | 52,660 | ||
Interest expense generated from the lease liability | 717 | 2,054 | 3,765 |
Depreciation right of use assets | $ 6,544 | $ 12,666 | $ 13,098 |
Leases - Schedule of right of u
Leases - Schedule of right of use assets (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Schedule of right of use assets [Abstract] | |||
Cost, Beginning | $ 39,579 | $ 36,909 | $ 36,909 |
Cost, Additions | 1,388 | 20,531 | |
Cost, Disposals | (3,275) | (17,861) | |
Cost, Ending | 37,692 | 39,579 | 36,909 |
Accumulated depreciation, Beginning | (14,697) | (13,098) | |
Accumulated depreciation, Depreciation expense | (6,544) | (12,734) | (13,098) |
Accumulated depreciation, Eliminated on disposals | 933 | 11,135 | |
Accumulated depreciation, Ending | $ (20,308) | $ (14,697) | $ (13,098) |
Leases - Schedule of total futu
Leases - Schedule of total future minimum lease payments (Details) $ in Thousands | Dec. 31, 2021MXN ($) |
Leases (Details) - Schedule of total future minimum lease payments [Line Items] | |
Total future minimum lease payments | $ 18,865 |
2022 [Member] | |
Leases (Details) - Schedule of total future minimum lease payments [Line Items] | |
Total future minimum lease payments | 6,543 |
2023 [Member] | |
Leases (Details) - Schedule of total future minimum lease payments [Line Items] | |
Total future minimum lease payments | 5,980 |
2024 [Member] | |
Leases (Details) - Schedule of total future minimum lease payments [Line Items] | |
Total future minimum lease payments | 3,078 |
2025 [Member] | |
Leases (Details) - Schedule of total future minimum lease payments [Line Items] | |
Total future minimum lease payments | 2,925 |
2026 [Member] | |
Leases (Details) - Schedule of total future minimum lease payments [Line Items] | |
Total future minimum lease payments | $ 339 |
Borrowings (Details)
Borrowings (Details) | Aug. 31, 2021MXN ($) | Aug. 30, 2021MXN ($)tranche | Jul. 30, 2020MXN ($) | Mar. 27, 2020MXN ($) | Jul. 31, 2021MXN ($) | Dec. 31, 2021MXN ($)tranche | Jan. 03, 2021MXN ($) | Dec. 31, 2019MXN ($) | Sep. 20, 2020MXN ($) | May 04, 2020MXN ($) | Mar. 10, 2020MXN ($) | Jan. 30, 2020 | Jan. 29, 2020 | Dec. 31, 2018MXN ($) |
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Prepayment of credit | $ 646,716,000 | $ 1,757,112,000 | $ 83,041,000 | |||||||||||
Fair value of borrowings | $ 1,499,867,000 | 634,992,000 | $ 679,188,000 | |||||||||||
Short term debt coverage ratio | 1.5 | |||||||||||||
Total debt coverage ratio | 3 | |||||||||||||
Leverage ratio | 7 | |||||||||||||
Minimum amount of cash and cash equivalents to be maintained under the financial covenants | $ 40,000,000 | |||||||||||||
Long term debt derivated sustainability bond [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Debt instrument, number of tranches | tranche | 2 | 2 | ||||||||||||
Notional amount | $ 1,500,000,000 | |||||||||||||
Credit line withdrawn | $ 588,300,000 | |||||||||||||
Prepayment of credit | 18,172,000 | |||||||||||||
Long term debt derivated sustainability bond [Member] | Bottom of range [member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Debt Instrument, term | 4 years | 4 years | ||||||||||||
Long term debt derivated sustainability bond [Member] | Top of range [member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Debt Instrument, term | 7 years | 7 years | ||||||||||||
Long term debt derivated sustainability bond Tranche One [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Interest rate | 5.15% | 5.15% | ||||||||||||
Notional amount | $ 500,000,000 | $ 500,000,000 | ||||||||||||
Borrowings, additional interest rate for subsequent payments | 0.40% | 0.40% | ||||||||||||
Long term debt derivated sustainability bond Tranche One [Member] | 29 days Term TIIE Rate [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Borrowings, adjustment to interest rate basis | 0.40% | |||||||||||||
Long term debt derivated sustainability bond Tranche Two [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Interest rate | 8.35% | 8.35% | ||||||||||||
Notional amount | $ 1,000,000,000 | $ 1,000,000,000 | ||||||||||||
Long term debt derivated sustainability bond Tranche Two [Member] | 29 days Term TIIE Rate [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Borrowings, adjustment to interest rate basis | 0.40% | |||||||||||||
Subsidiary Innova Catalogos Credit [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Interest rate | 24.00% | |||||||||||||
Debt Instrument, term | 18 months | |||||||||||||
Monthly payments of debt | $ 2,200 | |||||||||||||
Notional amount | $ 40,000 | |||||||||||||
Secured credit line with Banamex [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Prepayment of credit | $ 46,167,000 | |||||||||||||
Liquidated totality amount | 521,449,000 | |||||||||||||
Secured credit line with Banamex due December 18, 2025 [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Debt Instrument, term | 10 months | |||||||||||||
Credit line, Maximum capacity | $ 400,000,000 | $ 400,000,000 | ||||||||||||
Secured credit line with Banamex due December 18, 2025 [Member] | TIIE Rate [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Borrowings, adjustment to interest rate basis | 2.60% | 3.17% | ||||||||||||
Secured credit line with Banamex due December 30, 2025 [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Credit line, Maximum capacity | $ 195,000,000 | |||||||||||||
Credit line withdrawn | $ 195,000,000 | |||||||||||||
Secured credit line with Banamex due December 30, 2025 [Member] | TIIE Rate [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Borrowings, adjustment to interest rate basis | 2.95% | 2.95% | 2.60% | |||||||||||
Credit line with BBVA due August 31, 2023 [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Interest rate | 7.50% | 7.50% | ||||||||||||
Credit line, Maximum capacity | $ 75,000,000 | $ 75,000,000 | ||||||||||||
Prepayment of credit | $ 16,325,000 | |||||||||||||
Liquidated totality amount | 48,679,000 | |||||||||||||
Pledged as collateral amount | $ 80,901,000 | |||||||||||||
Credit line with MCRF P, S.A. de C.V. SOFOM, E.N.R. Due May 15, 2023 [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Interest rate | 13.10% | |||||||||||||
Credit line, Maximum capacity | $ 600,000,000 | |||||||||||||
Prepayment of credit | $ 258,750,000 | |||||||||||||
Unsecured credit line with Banamex, [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Interest rate | 2.85% | |||||||||||||
Credit line, Maximum capacity | $ 80,000,000 | $ 100,000,000 | ||||||||||||
Unsecured credit line with Banamex, [Member] | TIIE Rate [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Borrowings, adjustment to interest rate basis | 2.85% | 2.75% | ||||||||||||
Credit line with HSBC Mexico S. A [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Credit line, Maximum capacity | $ 150,000,000 | $ 50,000,000 | ||||||||||||
Credit line withdrawn | $ 20,000,000 | $ 115,000,000 | ||||||||||||
Credit line with HSBC Mexico S. A [Member] | TIIE Rate [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Borrowings, adjustment to interest rate basis | 3.50% | |||||||||||||
Banamex [member] | Long term debt derivated sustainability bond [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Prepayment of credit | 521,449,000 | |||||||||||||
BBVA [Member] | Long term debt derivated sustainability bond [Member] | ||||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||||
Prepayment of credit | $ 48,679,000 |
Borrowings - Schedule of long-t
Borrowings - Schedule of long-term debt (Details) - MXN ($) $ in Thousands | Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 |
Disclosure of detailed information about borrowings [line items] | |||
Total debt | $ 1,510,385 | $ 629,877 | $ 677,713 |
Interest payable | 28,109 | 3,323 | 10,907 |
Less: Current portion | 28,124 | 105,910 | 148,070 |
Long-term debt | 1,482,261 | 523,967 | 529,643 |
Long term debt derivated sustainability bond [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Total debt | 1,482,261 | ||
Subsidiary Innova Catalogos Credit [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Total debt | $ 15 | ||
Secured credit line with Banamex due December 30, 2025 [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Total debt | 188,500 | ||
Secured credit line with Banamex due December 18, 2025 [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Total debt | 373,333 | 135,209 | |
Credit line with BBVA due August 31, 2023 [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Total debt | $ 64,721 | ||
Credit line with MCRF P, S.A. de C.V. SOFOM, E.N.R. Due May 15, 2023 [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Total debt | 516,597 | ||
Unsecured credit line with Banamex, [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Total debt | $ 15,000 |
Borrowings - Schedule of cash f
Borrowings - Schedule of cash flows arising from financing activities (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Changes that represent cash flows - | |||
Long term debt | $ 1,520,000 | $ 1,712,207 | $ 104,500 |
Bond emission costs | (18,931) | ||
Changes that do not represent cash flows - | |||
Interest expense | 75,818 | 80,253 | 85,429 |
Long-term debt [Member] | |||
Borrowings (Details) - Schedule of cash flows arising from financing activities [Line Items] | |||
Balance | 583,639 | 666,806 | 620,164 |
Changes that represent cash flows - | |||
Loans obtained | 1,520,000 | 1,712,207 | 104,500 |
Restricted cash | 42,915 | (42,915) | 22,940 |
Payments | (646,716) | (1,757,112) | (82,996) |
Bond issuance costs | (18,931) | ||
Changes that do not represent cash flows - | |||
Control obtained over subsidiaries | 177 | ||
Amortization of commissions and debt issuance costs | 1,192 | 4,653 | 2,198 |
Balance | 1,482,276 | 583,639 | 666,806 |
Interest payable [Member] | |||
Borrowings (Details) - Schedule of cash flows arising from financing activities [Line Items] | |||
Balance | 3,323 | 10,907 | 11,227 |
Changes that represent cash flows - | |||
Payments | (49,123) | (121,297) | (95,033) |
Changes that do not represent cash flows - | |||
Interest expense | 73,909 | 80,253 | 85,429 |
Borrowing costs capitalized in PP&E | 33,460 | 9,284 | |
Balance | 28,109 | 3,323 | 10,907 |
Derivative financial instruments [Member] | |||
Borrowings (Details) - Schedule of cash flows arising from financing activities [Line Items] | |||
Balance | 320,294 | 32,309 | 16,629 |
Changes that represent cash flows - | |||
Payments | (18,172) | ||
Changes that do not represent cash flows - | |||
Valuation effects of derivative financial instruments | (330,315) | 287,985 | 15,680 |
Balance | $ (28,193) | $ 320,294 | $ 32,309 |
Borrowings - Schedule of long_2
Borrowings - Schedule of long-term debt maturities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021MXN ($) | |
Borrowings | |
2022 | $ 115,343 |
2023 | 115,343 |
2024 | 115,343 |
2025 | 605,829 |
2026-2028 | 1,253,283 |
Total | $ 2,205,141 |
Income taxes (Details)
Income taxes (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Income Taxes [Line Items] | |||
Tax rate | 30.00% | 30.00% | 30.00% |
MEXICO | |||
Income Taxes [Line Items] | |||
Tax rate | 30.00% | 30.00% | 30.00% |
GUATEMALA | |||
Income Taxes [Line Items] | |||
Tax rate | 25.00% | 25.00% | 25.00% |
Income taxes - Schedule of inco
Income taxes - Schedule of income tax recognized in profit or loss (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Schedule of income tax recognized in profit or loss [Abstract] | |||
Current tax | $ 782,901 | $ 576,834 | $ 229,900 |
Deferred tax expense (benefit) | 41,553 | (34,066) | 2,792 |
Income tax recognized in profit or loss | $ 824,454 | $ 542,768 | $ 232,692 |
Income taxes - Schedule of reco
Income taxes - Schedule of reconciliation of income tax expense recognized from statutory to effective ISR rate (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Schedule of reconciliation of income tax expense recognized from statutory to effective ISR rate [Abstract] | |||
Profit before income tax | $ 2,625,338 | $ 881,129 | $ 704,834 |
Tax rate | 30.00% | 30.00% | 30.00% |
Income tax expense calculated at 30% statutory tax rate | $ 787,601 | $ 264,339 | $ 211,450 |
Inflation effects, net | 25,039 | 8,333 | 6,278 |
Non-deductible expenses | 5,790 | 5,493 | 3,202 |
Loss on valuation of warrants | 255,456 | ||
Share-based payments | 1,744 | 8,275 | |
Other items, net | 4,280 | 872 | 11,762 |
Total income tax expense | $ 824,454 | $ 542,768 | $ 232,692 |
Average effective tax rate | 31.00% | 62.00% | 33.00% |
Income taxes - Schedule of defe
Income taxes - Schedule of deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Expected credit loss [Member] | |||
Income Taxes (Details) - Schedule of deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances [Line Items] | |||
Balance, assets | $ 1,485 | $ 5,217 | $ 2,802 |
Recognized in profit or loss | 21,203 | (3,732) | 2,415 |
Balance, assets | 22,688 | 1,485 | 5,217 |
Accruals and provisions [Member] | |||
Income Taxes (Details) - Schedule of deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances [Line Items] | |||
Balance, assets | 68,638 | 25,938 | 26,632 |
Recognized in profit or loss | (31,514) | 42,340 | (668) |
Recognized in OCI | 360 | (26) | |
Balance, assets | 37,124 | 68,638 | 25,938 |
Derivative Financial Instruments, Assets [Member] | |||
Income Taxes (Details) - Schedule of deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances [Line Items] | |||
Balance, assets | 35,886 | 4,989 | |
Recognized in profit or loss | (35,886) | 35,886 | (4,989) |
Balance, assets | 35,886 | ||
Property, Plant and equipment [Member] | |||
Income Taxes (Details) - Schedule of deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances [Line Items] | |||
Balance, assets | 4,579 | 74 | |
Recognized in profit or loss | 5,538 | (4,579) | 4,505 |
Balance, assets | 5,538 | 4,579 | |
Intangible assets [Member] | |||
Income Taxes (Details) - Schedule of deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances [Line Items] | |||
Balance, liabilities | (83,900) | (85,820) | (87,740) |
Recognized in profit or loss | 1,920 | 1,920 | 1,920 |
Balance, liabilities | (81,980) | (83,900) | (85,820) |
Inventories [Member] | |||
Income Taxes (Details) - Schedule of deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances [Line Items] | |||
Balance, liabilities | (31,040) | (9,353) | (6,192) |
Recognized in profit or loss | 830 | (21,687) | (3,161) |
Balance, liabilities | (30,210) | (31,040) | (9,353) |
Property, plant and equipment1 [Member] | |||
Income Taxes (Details) - Schedule of deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances [Line Items] | |||
Balance, liabilities | (10,888) | ||
Recognized in profit or loss | 10,888 | (10,888) | |
Balance, liabilities | (10,888) | ||
Other assets and prepaid expenses [Member] | |||
Income Taxes (Details) - Schedule of deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances [Line Items] | |||
Balance, liabilities | (19,535) | (13,891) | (11,192) |
Recognized in profit or loss | (7,152) | (5,644) | (2,699) |
Balance, liabilities | (26,687) | (19,535) | (13,891) |
Derivative financial instruments1 [Member] | |||
Income Taxes (Details) - Schedule of deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances [Line Items] | |||
Balance, liabilities | (89) | ||
Recognized in profit or loss | (89) | ||
Balance, liabilities | (89) | ||
Derivative financial instruments [Member] | |||
Income Taxes (Details) - Schedule of deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances [Line Items] | |||
Balance, liabilities | (89) | ||
Recognized in profit or loss | (7,380) | 89 | |
Balance, liabilities | (7,380) | (89) | |
Net deferred tax liability [Member] | |||
Income Taxes (Details) - Schedule of deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances [Line Items] | |||
Balance, liabilities | (39,354) | (73,419) | (70,627) |
Recognized in profit or loss | (41,553) | 33,705 | (2,766) |
Recognized in OCI | 360 | (26) | |
Balance, liabilities | $ (80,907) | $ (39,354) | $ (73,419) |
Provisions - Schedule of provis
Provisions - Schedule of provisions (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Provisions (Details) - Schedule of provisions [Line Items] | |||
Beginning balance | $ 151,008 | $ 46,689 | $ 38,986 |
Increases | 2,212,091 | 1,340,851 | 438,017 |
Payments | (2,247,907) | (1,236,532) | (430,314) |
Ending balance | 115,192 | 151,008 | 46,689 |
Commissions, promotions and other [Member] | |||
Provisions (Details) - Schedule of provisions [Line Items] | |||
Beginning balance | 107,146 | 32,779 | 35,805 |
Increases | 2,054,420 | 1,272,651 | 345,148 |
Payments | (2,048,135) | (1,198,284) | (348,174) |
Ending balance | 113,431 | 107,146 | 32,779 |
Bonuses and other employee benefits [Member] | |||
Provisions (Details) - Schedule of provisions [Line Items] | |||
Beginning balance | 43,570 | 13,356 | 1,958 |
Increases | 140,130 | 51,253 | 90,843 |
Payments | (182,439) | (21,039) | (79,445) |
Ending balance | 1,261 | 43,570 | 13,356 |
Professional services fees [Member] | |||
Provisions (Details) - Schedule of provisions [Line Items] | |||
Beginning balance | 292 | 554 | 1,223 |
Increases | 17,541 | 16,947 | 2,026 |
Payments | (17,333) | (17,209) | (2,695) |
Ending balance | $ 500 | $ 292 | $ 554 |
Derivative financial instrume_3
Derivative financial instruments (Details) $ in Thousands | Dec. 23, 2020shares | Oct. 08, 2020D$ / sharesshares | Aug. 31, 2021MXN ($) | Sep. 30, 2020shares | Oct. 07, 2020MXN ($)shares | Oct. 07, 2020$ / sharesshares | Dec. 31, 2021MXN ($) | Jan. 03, 2021MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2020shares | Aug. 31, 2020shares | Apr. 12, 2020$ / sharesshares |
Disclosure of financial assets [line items] | ||||||||||||
Credit line derivative (in Pesos) | $ | $ 400,000 | |||||||||||
TIIE rate | 4.49% | 7.55% | ||||||||||
Loss of derivative financial instruments (in Pesos) | $ | $ 330,315 | $ (287,985) | $ (15,680) | |||||||||
Number of securities called by warrants or rights | 621,098 | 621,098 | 5,804,125 | |||||||||
Exercise price of warrants or rights | $ / shares | $ 11.50 | |||||||||||
Number of additional securities called by warrants or rights | 250,000 | |||||||||||
Warrants repurchased | 1,573,888 | |||||||||||
Warrants exchanged | 895,597 | |||||||||||
Warrants settled on cash basis | 462,130 | 462,130 | 433,467 | |||||||||
Number of securities called by each warrant or right | 1 | 1 | 0.37 | |||||||||
Exercise price per share | $ / shares | $ 11.44 | |||||||||||
Cash received | $ | $ 116,419 | |||||||||||
Issuance of betterware shares | 214,020 | |||||||||||
Derivative price (in Dollars per share) | $ / shares | $ 18 | |||||||||||
Threshold trading days for share price | D | 20 | |||||||||||
Warrant exchange | 3,087,022 | |||||||||||
Warrant share | 1,142,325 | |||||||||||
Public warrant not exercised | 8,493 | |||||||||||
Price per warrant (in Dollars per share) | $ / shares | $ 0.01 | |||||||||||
Private warrant exercised | 239,125 | |||||||||||
Exchange for Shares | 156,505 | |||||||||||
Fair value warrant recognized (in Pesos) | $ | $ 851,520 | |||||||||||
Swap With Banamex | ||||||||||||
Disclosure of financial assets [line items] | ||||||||||||
Interest Rate Swap, Cancellation Fee | $ | $ 18,172 |
Derivative financial instrume_4
Derivative financial instruments - Schedule of derivative financial instrument contracts (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021MXN ($) | Jan. 03, 2021MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2021USD ($) | |
Liabilities: | ||||
Contract date | 11/15/2018 | |||
Maturity date | Oct. 1, 2022 | Dec. 15, 2023 | ||
Rate paid | 8.33% | |||
Interest rate swap [Member] | ||||
Liabilities: | ||||
Notional amount in thousands | $ 353,333 | $ 50,000 | $ 134,050 | |
Fair Value | $ 28,193 | $ 32,842 | $ 19,614 | |
Contract date | 11/15/2018 | |||
Maturity date | Dec. 15, 2023 | |||
Rate received | TIIE 28 days(1) | TIIE 28 days(1) | ||
Rate paid | 8.33% |
Derivative financial instrume_5
Derivative financial instruments - Schedule of derivative financial instrument contracts (Details) - Forwards US Dollar-Mexican Peso [Member] $ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019MXN ($)$ / $ | Dec. 31, 2021MXN ($)$ / $ | Jan. 03, 2021MXN ($)$ / $ | Jan. 03, 2021USD ($)$ / $ | Dec. 31, 2019USD ($)$ / $ | |
Derivative financial instruments (Details) - Schedule of derivative financial instrument contracts [Line Items] | |||||
Notional amount | $ 12,695 | $ 287,452 | $ 140,325 | $ 47,690 | |
Total Liabilities | $ 32,309 | $ 320,294 | |||
Total Assets | $ 28,193 | ||||
Average Strike | $ / $ | 19.61 | 20.66 | 22.36 | 22.36 | 19.61 |
Maturity date | Weekly, through October 2020 | ||||
Non-current liability | $ 16,754 | $ 25,179 | |||
Total current liability | $ 15,555 | $ 295,115 |
Derivative financial instrume_6
Derivative financial instruments - Schedule of maturities of the notional amount (Details) $ in Thousands, $ in Thousands | Dec. 31, 2021USD ($) | Jan. 03, 2021MXN ($) | Jan. 03, 2021USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2019USD ($) |
Interest rate swap [Member] | |||||
Liabilities: | |||||
Notional amount | $ 134,050 | $ 353,333 | $ 50,000 | ||
Forwards US Dollar-Mexican Peso [Member] | |||||
Liabilities: | |||||
Notional amount | $ 287,452 | $ 140,325 | $ 12,695 | $ 47,690 |
Employee benefits - Schedule of
Employee benefits - Schedule of net defined benefit liability and its components (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Schedule of net defined benefit liability and its components [Abstract] | |||
Balance | $ 1,678 | $ 1,630 | $ 1,355 |
Current service cost | 614 | 425 | 424 |
Interest cost | 101 | 114 | 123 |
Net cost of the period | 715 | 539 | 547 |
Actuarial loss (gain) | (83) | 1,199 | (102) |
Income tax effect | (360) | 26 | |
Other: | |||
Benefits paid | (217) | (1,330) | (196) |
Balance | $ 2,093 | $ 1,678 | $ 1,630 |
Employee benefits - Schedule _2
Employee benefits - Schedule of principal actuarial assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2021employee | Jan. 03, 2021employee | Dec. 31, 2019item | |
Financial: | |||
Future salary growth | 5.00% | 4.00% | 4.50% |
Discount rate | 7.60% | 6.10% | 7.10% |
Demographic: | |||
Number of employees | 1,272 | 1,294 | 654 |
Age average | 32 years | 31 years | 35 years |
Longevity average | 2 years | 2 years | 3 years |
Employee benefits - Schedule _3
Employee benefits - Schedule of sensitivity analysis (Details) - MXN ($) $ in Thousands | Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 |
Schedule of sensitivity analysis [Abstract] | |||
+0.50% | $ 156 | $ 126 | $ (127) |
-0.50% | $ (174) | $ (141) | $ 115 |
Financial instruments (Details)
Financial instruments (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Financial instruments | |||
Transfers out of Level 1 into Level 2 of fair value hierarchy, assets | $ 0 | ||
Transfers out of Level 2 into Level 1 of fair value hierarchy, assets | 0 | ||
Transfers out of Level 1 into Level 2 of fair value hierarchy, liabilities | 0 | ||
Transfers out of Level 2 into Level 1 of fair value hierarchy, liabilities | $ 0 | ||
Changes in interest rate sensitivity analysis | $ 6,266 | $ 1,352 | |
Credit risk management, percent | 10.00% |
Financial instruments - Schedul
Financial instruments - Schedule of financial instruments (Details) - MXN ($) $ in Thousands | Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 |
Financial assets - | |||
Trade receivables | $ 778,054 | $ 757,806 | $ 266,938 |
Trade account receivables from related parties | 24 | ||
Derivative financial instruments | 28,193 | ||
Other receivables | 778,078 | 5,867 | |
Total | 757,806 | 272,805 | |
Financial liabilities - | |||
Debt | 629,877 | 677,713 | |
Accounts payable | 1,984,932 | 2,078,628 | 529,348 |
Lease liability | 17,880 | 24,378 | 24,584 |
Long-term debt | 1,510,385 | 629,877 | 677,713 |
Total | 3,513,197 | 2,732,883 | 1,231,645 |
Fair value through profit or loss [member] | |||
Financial assets - | |||
Derivative financial instruments | 28,193 | ||
Other receivables | 28,193 | ||
Financial liabilities - | |||
Derivative financial instruments | 320,294 | 32,309 | |
Total | 320,294 | 32,309 | |
Fair value hierarchy level [member] | |||
Financial assets - | |||
Derivative financial instruments | $ 2 | ||
Financial liabilities - | |||
Derivative financial instruments | $ 2 | $ 2 |
Financial instruments - Sched_2
Financial instruments - Schedule of financial assets and financial liabilities at the reporting date (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||||||||
Dec. 31, 2021MXN ($)$ / $ | Dec. 31, 2021USD ($) | Jan. 03, 2021MXN ($)$ / $ | Jan. 03, 2021USD ($) | Dec. 31, 2019MXN ($)$ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2021USD ($)$ / $ | Jan. 03, 2021USD ($)$ / $ | Dec. 31, 2019USD ($)$ / $ | |
Financial instruments (Details) - Schedule of financial assets and financial liabilities at the reporting date [Line Items] | |||||||||
Assets | $ 5,304,541 | $ 4,413,760 | $ 1,789,726 | ||||||
Liabilities | (3,997,542) | (3,491,867) | (1,515,244) | ||||||
Net position | $ (1,800,884) | $ (338,361) | $ (472,142) | ||||||
United States of America, Dollars | |||||||||
Financial instruments (Details) - Schedule of financial assets and financial liabilities at the reporting date [Line Items] | |||||||||
Assets | $ 10,686 | $ 29,559 | $ 1,331 | ||||||
Liabilities | $ (35,148) | $ (49,570) | $ (16,095) | ||||||
Net position | $ (24,462) | $ (20,011) | $ (14,764) | ||||||
Closing exchange rate of the year | $ / $ | 20.5157 | 19.9352 | 18.8452 | 20.5157 | 19.9352 | 18.8452 |
Financial instruments - Sched_3
Financial instruments - Schedule of exchange rate sensitivity analysis (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021MXN ($) | |
Schedule of exchange rate sensitivity analysis [Abstract] | |
Impact on net income | $ 50,186 |
Financial instruments - Sched_4
Financial instruments - Schedule of bank credit lines (Details) - MXN ($) $ in Thousands | Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 |
Schedule of bank credit lines [Abstract] | |||
Amount used | $ 1,500,000 | $ 626,554 | $ 656,459 |
Amount not used | 250,000 | 297,828 | 260,500 |
Total credit lines | $ 1,750,000 | $ 924,382 | $ 916,959 |
Stockholders' equity (Details)
Stockholders' equity (Details) - MXN ($) $ / shares in Units, $ in Thousands | Oct. 29, 2021 | Aug. 13, 2021 | Jun. 21, 2021 | May 12, 2021 | Feb. 18, 2021 | Jan. 03, 2021 | Nov. 09, 2020 | Oct. 02, 2020 | Aug. 17, 2020 | May 08, 2020 | Mar. 10, 2020 | Jan. 10, 2020 | Dec. 31, 2021 | Jan. 03, 2021 | Dec. 14, 2020 | Dec. 31, 2019 | Oct. 08, 2019 | May 29, 2019 |
Disclosure of offsetting of financial assets [line items] | ||||||||||||||||||
Par value per share (in Pesos per share) | $ 10 | |||||||||||||||||
Treasury shares (in Shares) | 283,403 | 1,015,072 | ||||||||||||||||
Reclassification of Share Premium Account to Retained Earnings | $ 876,518 | |||||||||||||||||
Increased variable capital | $ 27,183 | $ 89,235 | $ 181,865 | |||||||||||||||
Issuance cost | 16,736 | |||||||||||||||||
Fair value liability | $ 55,810 | |||||||||||||||||
Cashless exercises of issuance shares (in Shares) | 3,520,489 | 1,457,798 | 214,020 | |||||||||||||||
Warrant shares (in Shares) | 109,874 | 352,256 | ||||||||||||||||
Cash exercise (in Shares) | 109,874 | 352,256 | ||||||||||||||||
Increased share premium | $ 860,571 | |||||||||||||||||
Redemption of shares (in Shares) | 1,301,293 | |||||||||||||||||
Merger stockholders' equity increased | $ 4,724 | |||||||||||||||||
Total capital increase share premium amount | $ 909,428 | |||||||||||||||||
Dividends from retained earnings | $ 350,000 | $ 350,000 | $ 350,000 | 350,000 | $ 70,000 | |||||||||||||
Dividend to campalier based on its shareholding | $ 183,812 | $ 183,812 | $ 180,489 | $ 180,489 | $ 42,739 | |||||||||||||
Dividend per shares (in Pesos per share) | $ 9.38 | $ 9.38 | $ 9.57 | $ 9.57 | $ 2.32 | |||||||||||||
Dividends from profits generated | $ 100,000 | |||||||||||||||||
Dividend paid in cash | $ 330,000 | $ 330,000 | $ 53,522 | |||||||||||||||
Dividend per shares (in Pesos per share) | $ 2.90 | |||||||||||||||||
Remaining part of dividend | $ 168,136 | $ 176,621 | ||||||||||||||||
Dividends per share (in Pesos per share) | $ 9.11 | $ 9.27 | ||||||||||||||||
Dividends payment from retained earnings | $ 150,000 | $ 128,000 | ||||||||||||||||
Equity interest | $ 91,583 | $ 78,151 | ||||||||||||||||
Statutory reserve | $ 10,679 | $ 10,679 | $ 10,679 | $ 10,370 | ||||||||||||||
Campalier, S.A. de C.V | ||||||||||||||||||
Disclosure of offsetting of financial assets [line items] | ||||||||||||||||||
Treasury Stock, Shares Issued | 731,669 |
Stockholder's equity - Schedule
Stockholder's equity - Schedule of stockholder equity number of shares (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Betterware de Mexico, S.A.B. de C.V. [Member] | |||
Stockholders' equity (Details) - Schedule of stockholders' equity number of shares [Line Items] | |||
Number of shares of stockholders' equity | 37,316,546 | ||
Betterware de Mexico, S.A.B. de C.V. [Member] | Fixed Capital [Member] | |||
Stockholders' equity (Details) - Schedule of stockholders' equity number of shares [Line Items] | |||
Number of shares of stockholders' equity | 10,000 | ||
Betterware de Mexico, S.A.B. de C.V. [Member] | Variable Capital [Member] | |||
Stockholders' equity (Details) - Schedule of stockholders' equity number of shares [Line Items] | |||
Number of shares of stockholders' equity | 37,306,546 | ||
Betterware de Mexico, S.A.B. de C.V. and BLSM Latino America Servicios, S.A. de C.V. [Member] | |||
Stockholders' equity (Details) - Schedule of stockholders' equity number of shares [Line Items] | |||
Number of shares of stockholders' equity | 36,584,968 | 8,697,317 | |
Betterware de Mexico, S.A.B. de C.V. and BLSM Latino America Servicios, S.A. de C.V. [Member] | Fixed Capital [Member] | |||
Stockholders' equity (Details) - Schedule of stockholders' equity number of shares [Line Items] | |||
Number of shares of stockholders' equity | 10,000 | 10,000 | |
Betterware de Mexico, S.A.B. de C.V. and BLSM Latino America Servicios, S.A. de C.V. [Member] | Variable Capital [Member] | |||
Stockholders' equity (Details) - Schedule of stockholders' equity number of shares [Line Items] | |||
Number of shares of stockholders' equity | 36,574,968 | 8,687,317 |
Share-based payments (Details)
Share-based payments (Details) | 1 Months Ended |
May 31, 2021 | |
Share-based payments | |
Percentage of Shares Delivered | 2.00% |
Earnings per share (Details)
Earnings per share (Details) - shares | Nov. 09, 2020 | Mar. 13, 2020 | Mar. 10, 2020 | Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 |
Earnings per share | ||||||
Conversion of warrants to purchase | 5,804,125 | |||||
Issuance of shares | 462,130 | |||||
Cashless exercises of issuance shares | 3,520,489 | 1,457,798 | 214,020 | |||
Issuance of warrants | 250,000 | |||||
Additional shares purchased | 250,000 | |||||
Potentially dilutive shares | 20,680 | |||||
Percentage of shares held by shareholders | 87.70% | |||||
Percentage of shares held by acquired entity shareholders | 6.40% | |||||
Percentage of shares held by other investors | 5.90% | |||||
issuance of shares issued and outstanding | 34,451,020 | 37,316,546 | 34,451,020 | 30,199,945 | ||
Treasury shares issued under stock based incentive plan | 731,669 |
Earnings per share - Schedule o
Earnings per share - Schedule of income and share data used in calculation of basic earnings per share (Details) - MXN ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Net income (in thousands of pesos) | |||
Attributable to Owners of the Company | $ 1,804,590 | $ 338,361 | $ 472,142 |
Shares (in thousands of shares) | |||
Basic | 36,974 | 34,083 | 30,200 |
Diluted | 37,337 | 34,383 | 30,200 |
Basic earnings per share (pesos per share) | $ 48.81 | $ 9.93 | $ 15.63 |
Diluted earnings per share (pesos per share) | $ 48.33 | $ 9.84 | $ 15.63 |
Related parties balances and _3
Related parties balances and transactions (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Related parties balances and transactions | |||
Short-term employee benefits | $ 42,170 | $ 37,713 | $ 34,540 |
Related parties balances and _4
Related parties balances and transactions - Schedule of related parties outstanding (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Related parties balances and transactions (Details) - Schedule of related parties outstanding [Line Items] | |||
Trade accounts receivable from related parties | $ (24) | $ 610 | $ (610) |
Fundacion Betterware., A.C. [Member] | |||
Related parties balances and transactions (Details) - Schedule of related parties outstanding [Line Items] | |||
Trade accounts receivable from related parties | 24 | $ 610 | |
Lease income | 42 | ||
Donation | $ 920 |
Revenue and operating expense_2
Revenue and operating expenses - Schedule of revenue and operating expenses (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Revenue and operating expenses (Details) - Schedule of revenue and operating expenses [Line Items] | |||
Revenue recognized per home product | $ 10,039,668 | $ 7,260,408 | $ 3,084,662 |
Kitchen and food preservation [Member] | |||
Revenue and operating expenses (Details) - Schedule of revenue and operating expenses [Line Items] | |||
Revenue recognized per home product | 3,274,245 | 2,532,420 | 1,229,148 |
Home solutions [Member] | |||
Revenue and operating expenses (Details) - Schedule of revenue and operating expenses [Line Items] | |||
Revenue recognized per home product | 2,312,675 | 1,456,666 | 529,551 |
Bedroom [Member] | |||
Revenue and operating expenses (Details) - Schedule of revenue and operating expenses [Line Items] | |||
Revenue recognized per home product | 1,603,930 | 826,965 | 275,722 |
Bathroom [Member] | |||
Revenue and operating expenses (Details) - Schedule of revenue and operating expenses [Line Items] | |||
Revenue recognized per home product | 1,214,524 | 842,724 | 441,093 |
Laundry & Cleaning [Member] | |||
Revenue and operating expenses (Details) - Schedule of revenue and operating expenses [Line Items] | |||
Revenue recognized per home product | 823,880 | 828,473 | 318,782 |
Tech & mobility [Member] | |||
Revenue and operating expenses (Details) - Schedule of revenue and operating expenses [Line Items] | |||
Revenue recognized per home product | 767,614 | $ 773,160 | $ 290,366 |
Internet, Telephone Services And Equipment [Member] | |||
Revenue and operating expenses (Details) - Schedule of revenue and operating expenses [Line Items] | |||
Revenue recognized per home product | 19,030 | ||
Interest Income [Member] | |||
Revenue and operating expenses (Details) - Schedule of revenue and operating expenses [Line Items] | |||
Revenue recognized per home product | 12,498 | ||
Clothes And Shoes [Member] | |||
Revenue and operating expenses (Details) - Schedule of revenue and operating expenses [Line Items] | |||
Revenue recognized per home product | $ 11,272 |
Revenue and operating expense_3
Revenue and operating expenses - Schedule of operating expenses by nature (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 03, 2021 | Dec. 31, 2019 | |
Revenue and operating expenses (Details) - Schedule of operating expenses by nature [Line Items] | |||
Operating expenses by nature | $ 2,975,796 | $ 1,849,055 | $ 991,588 |
Cost of personnel services and other employee benefits [Member] | |||
Revenue and operating expenses (Details) - Schedule of operating expenses by nature [Line Items] | |||
Operating expenses by nature | 621,519 | 564,213 | 423,956 |
Promotions for the sales force [Member] | |||
Revenue and operating expenses (Details) - Schedule of operating expenses by nature [Line Items] | |||
Operating expenses by nature | 503,291 | 172,177 | 26,311 |
Distribution costs [Member] | |||
Revenue and operating expenses (Details) - Schedule of operating expenses by nature [Line Items] | |||
Operating expenses by nature | 463,762 | 331,023 | 121,155 |
Sales catalog [Member] | |||
Revenue and operating expenses (Details) - Schedule of operating expenses by nature [Line Items] | |||
Operating expenses by nature | 425,814 | 247,250 | 128,687 |
Packing materials [Member] | |||
Revenue and operating expenses (Details) - Schedule of operating expenses by nature [Line Items] | |||
Operating expenses by nature | 201,006 | 112,512 | 58,361 |
Impairment loss on trade accounts receivables [Member] | |||
Revenue and operating expenses (Details) - Schedule of operating expenses by nature [Line Items] | |||
Operating expenses by nature | 198,495 | 57,627 | 22,512 |
Events, marketing and advertising [Member] | |||
Revenue and operating expenses (Details) - Schedule of operating expenses by nature [Line Items] | |||
Operating expenses by nature | 109,822 | 19,237 | 37,848 |
Depreciation and amortization [Member] | |||
Revenue and operating expenses (Details) - Schedule of operating expenses by nature [Line Items] | |||
Operating expenses by nature | 82,122 | 43,688 | 38,394 |
Commissions and professional fees [Member] | |||
Revenue and operating expenses (Details) - Schedule of operating expenses by nature [Line Items] | |||
Operating expenses by nature | 69,954 | 61,403 | 13,577 |
Rent expense | |||
Revenue and operating expenses (Details) - Schedule of operating expenses by nature [Line Items] | |||
Operating expenses by nature | 52,660 | 22,451 | 17,663 |
Bank fees [Member] | |||
Revenue and operating expenses (Details) - Schedule of operating expenses by nature [Line Items] | |||
Operating expenses by nature | 34,335 | 23,965 | 15,436 |
Travel expenses [Member] | |||
Revenue and operating expenses (Details) - Schedule of operating expenses by nature [Line Items] | |||
Operating expenses by nature | 11,258 | 13,522 | 18,835 |
Other [Member] | |||
Revenue and operating expenses (Details) - Schedule of operating expenses by nature [Line Items] | |||
Operating expenses by nature | $ 201,758 | $ 179,987 | $ 68,853 |
Subsequent events (Details)
Subsequent events (Details) $ in Thousands, $ in Thousands | Mar. 28, 2022MXN ($)shares | Jan. 18, 2022USD ($)item | Jan. 01, 2022MXN ($)shares | Dec. 31, 2021MXN ($) | Jan. 03, 2021MXN ($) | Dec. 31, 2019MXN ($) | Mar. 03, 2022MXN ($) | Jan. 18, 2022MXN ($) | Jan. 18, 2022USD ($) | Jan. 01, 2022USD ($) | Oct. 08, 2019MXN ($) | May 29, 2019MXN ($) |
Subsequent events (Details) [Line Items] | ||||||||||||
Long-term debt | $ 1,510,385 | $ 629,877 | $ 677,713 | |||||||||
Cash from operating activities | 1,465,597 | 1,822,256 | 605,446 | |||||||||
Dividends payment from retained earnings | $ 150,000 | $ 128,000 | ||||||||||
Cumulative amount of retained earnings | $ 990,103 | $ (268,539) | $ 218,376 | |||||||||
Non-Adjusting Events After Reporting Period [Member] | ||||||||||||
Subsequent events (Details) [Line Items] | ||||||||||||
Dividends payment from retained earnings | $ 350,000 | |||||||||||
Number of shares repurchased | shares | 72,626 | |||||||||||
Total value of shares repurchased | $ 25,321 | |||||||||||
Authorized value of shares repurchased | $ 50,000 | |||||||||||
Non-Adjusting Events After Reporting Period [Member] | GurComm, S.A.P.I [Member] | ||||||||||||
Subsequent events (Details) [Line Items] | ||||||||||||
Shares subscribed and paid, Reimbursed | shares | 55,514 | |||||||||||
Shares subscribed and paid, Canceled | shares | 37,693 | |||||||||||
Increase (decrease) in goodwill | $ 14,648 | |||||||||||
Non-Adjusting Events After Reporting Period [Member] | JAFRA | Mexico and United States | ||||||||||||
Subsequent events (Details) [Line Items] | ||||||||||||
Percentage of voting equity interests acquired | 100.00% | 100.00% | ||||||||||
Consideration transferred | $ 5,355,000 | $ 255,000 | ||||||||||
Number of independent leaders and consultants | item | 443,000 | |||||||||||
Long-term debt | $ 225,000 | |||||||||||
Cash from operating activities | $ 30,000 |