Betterware de Mexico, S.A.P.I. de C.V. 2026 Q3 Earnings Call

Please go ahead, sir. Thank you, operator, and good afternoon, everyone.

The third quarter marked a significant step in BeFra's evolution as we substantially increased our scale, brand diversification, geographic reach, and financial strength. It was also our first full quarter with Tupperware as part of the group. We are very pleased with the progress we are seeing across our businesses. Betterware delivered its third consecutive quarter of year-over-year growth, and we are encouraged by the progress at Tupperware. At Jafra, we experienced a slight revenue shortfall, which we are addressing head-on through stronger promotional planning, faster commercial execution, and a change in management. Together with our strong cash generation and continued deleveraging, this quarter's results reinforce our long-term strategy of building a unique house of brands, supported by our person-to-person commercialization model and disciplined financial management. Let's move to Slide 4 and review the highlights of the quarter.

Consolidated revenue increased 43.1% year-over-year to MXN 4,832 million. On an organic basis, meaning Betterware and Jafra, revenue increased 2.3%, supported by another strong quarter at Betterware and partially offset by lower revenue at Jafra. Both brands faced a more challenging summer period as World Cup-related shifts in consumer attention affected commercial activity. Betterware offset these pressures through higher associate productivity, while Jafra's commercial execution did not fully compensate for it. The addition of Tupperware also expanded our commercial networks. Our consolidated average associate base reached approximately 1.46 million during the quarter, an increase of 23.7% year-over-year, while the organic associate base was broadly stable. These results demonstrate the greater scale of the group while also highlighting the importance of disciplined execution across each brand. Turning to Slide 5, the addition of Tupperware has meaningfully expanded and diversified BeFra's revenue base.

In the third quarter, Betterware represented 31.5% of consolidated revenue, Jafra represented 40%, and Tupperware represented 28.5%. Our geographic mix also broadened. Mexico remained our largest market at 87.5% of revenue, while Latin America increased to 8.2%, primarily reflecting the addition of Tupperware's Brazil operations. This broader portfolio provides BeFra with multiple avenues for growth across brands, categories, and markets, both in Mexico and abroad. Turning to Slide 6, consolidated EBITDA increased 39.6% year-over-year to MXN 1,008 million, reflecting Tupperware's contribution and continued profitability at Betterware, partially offset by lower EBITDA at Jafra. The consolidated EBITDA margin was 20.9%, compared with 21.4% in the prior year quarter, as operating expense discipline helped mitigate profitability pressures across the portfolio. For the first nine months, EBITDA margin expanded to 19.2% from 18.5% in the prior year period. Net income increased a strong 24.2% year-over-year to MXN 390 million.

Net income in the quarter was affected by a higher effective tax rate than the prior year period. Based on our current expectations, the full-year effective tax rate is expected to normalize landing in the mid-30s by year-end. Even with that tax effect, net income growth remained substantial and reflected the earnings contribution of our expanded portfolio. Turning to Slide 7, the strength of our three-brand portfolio is coming into focus, with each brand contributing differently to our results and shaping our opportunities for growth. On the left, at Betterware brand, Mexico revenue increased 8.5% year-over-year, demonstrating strong commercial momentum. Betterware Latin America also remained on a continued growth trajectory, with the region developing into a second growth engine for the brand. Turning to Jafra in the middle, the brand faced a more difficult quarter, with a total revenue down 2.8%.

In Mexico, as I mentioned before, lower associate activity related to the World Cup and the extended summer holiday period affected sales. And unlike Betterware, Jafra was not able to fully offset this effect through higher productivity. Following several quarters of inconsistent growth, I have taken on the role of interim managing director of Jafra Mexico for the short term. My immediate priority is to reverse Jafra's revenue trajectory by reinforcing alignment with the group's commercial model and accelerating commercial execution as we unlock the full potential of the brand. In the United States, Jafra delivered its second consecutive EBITDA positive quarter under its leaner expense structure, an encouraging sign of the progress being made there. At Tupperware, on the right, core direct selling revenue increased a strong 14%, demonstrating the renewed growth momentum of the business as Tupperware continues its integration into BeFra.

In Mexico, direct selling revenue grew 23% year-over-year, while in Brazil, the decline moderated to 3.3%, a substantial improvement from the 10%-15% declines experienced before the acquisition. At the brand level, reported revenue declined 6.8% on a pro forma basis, as the third quarter of 2025 included a significant amount of exports and business-to-business sales, the latter of which we have chosen to strategically discontinue to focus on our person-to-person channel. Because a significant portion of these business-to-business sales occurred in the third quarter of 2025, the reported comparison does not fully reflect the strong growth of the core direct selling business. This impact will not carry into the fourth quarter, as there were no significant retail sales in the fourth quarter of 2025. With that, I'll hand the call over to Raúl to cover our key financial metrics, dividends, and guidance.

Thank you, Andrés. Turning to guidance, as we approach year-end, we are narrowing organic net revenue growth guidance to 4%-5% within our original range. At the same time, based on Tupperware's first full quarter contribution and our performance through the first nine months, we are raising post-acquisition net revenue growth guidance to 24%-26%. We continue to expect a full year EBITDA margin of 19%. That assumption incorporates a prudent view of the growth investments required at Tupperware and the cost associated with expanding the scale of the group. We believe this balance reflects the strong progress we've achieved to date while preserving the flexibility to invest in long-term opportunity. Slide 9 highlights the earnings and shareholder return benefits of our expanded portfolio.

For the first nine months of the year, pro forma EPS increased 114% to MXN 45.4, reflecting the inclusion of Tupperware's net income for the full nine-month period and demonstrating the strong accretive nature of the acquisition. A dividend of MXN 250 million was approved at the October shareholders meeting and will be paid in the fourth quarter of this year. This will represent BeFra's 27th consecutive quarter of dividend payments since the IPO. This continuity reflects our commitment to shareholder value while maintaining the financial discipline required to invest in the group and strengthen the balance sheet. Slide 10 shows the strength of our balance sheet and cash generation. Pro forma net debt to trailing 12 months EBITDA improved to 1.65 times, supported by debt reduction of MXN 431 million, while interest coverage increased to 6.91 times. As we continue deleveraging and generating strong EBITDA.

Turning to cash flow, reported free cash flow reached MXN 1,059 million or 105% of EBITDA. Strong cash generation across all three brands supported continued balance sheet strengthening during the quarter. Through the first nine months, reported free cash flow reached MXN 1,871 million, representing 78% conversion of year-to-date EBITDA, with contributions from both the organic businesses and Tupperware. Tupperware has been profitable and cash generative since day one as part of BeFra. Our cash conversion cycle improved to 50 days from 78 days a year ago. This reflects a stronger working capital efficiency across the group, including improved supplier terms at Tupperware. Taken together, these results demonstrate the strength of BeFra's business model, as well as our capacity to reduce leverage while continuing to invest in growth and, as I said, continuing raising shareholder value through dividends. I will now hand the call back to Andrés for closing remarks.

Thank you, Raúl. In conclusion, this was a very strong quarter for BeFra. We delivered substantial consolidated growth. Betterware continued to build momentum. Jafra US remained EBITDA positive for the second consecutive quarter, and Tupperware's core direct selling business grew strongly while contributing attractive profitability and cash generation. At Jafra Mexico, as we mentioned, our focus is on building upon the brand's strong foundation and taking the actions necessary to help the business reach its full potential. The quarter also demonstrated the value of our expanded portfolio and the financial discipline behind it. We generated strong cash flow, reduced leverage, strengthened interest coverage, and continued to return capital to shareholders. We believe BeFra is stronger, more diversified, and better positioned than ever. This was a very successful quarter, and the best is yet to come. With that, operator, we would be happy to take your questions.