Operator: Thank you, and welcome to BeFra's Q3 2026 earnings conference call. Before BeFra's management begins their prepared remarks, please note the disclaimer regarding forward-looking statements on slide two to remind participants that this call may contain forward-looking statements which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Please consider these statements alongside the cautionary language and safe harbor statement in today's earnings release, as well as the risk factors outlined in BeFra's SEC filings. BeFra undertakes no obligation to update any forward-looking statements. A reconciliation of and other information regarding non-GAAP financial measures discussed on this call can also be found in the earnings release published earlier today, as well as the investor section of the company's website. Present on today's call are BeFra's President and Chief Executive Officer, Andrés Campos, and Chief Financial Officer, Raúl del Villar.
Operator: I will now turn the conference over to Mr. Campos. Please go ahead, sir.
Andrés Campos: Thank you, operator, and good afternoon, everyone. The Q3 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 four and review the highlights of the quarter.
Andrés Campos: 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.
Andrés Campos: In the Q3, 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.
Andrés Campos: 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 seven, 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%.
Andrés Campos: In Mexico, as I mentioned before, lower associate activity related to the World Cup and the extended summer holiday period affected sales. 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.
Andrés Campos: 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% to 15% decline experienced before the acquisition. At the brand level, reported revenue declined 6.8% on a pro forma basis, as the Q3 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 this business-to-business sales occurred in the Q3 2025, the reported comparison does not fully reflect the strong growth of the core direct selling business. This impact will not carry into the Q4, as there were no significant retail sales in the Q4 2025. With that, I'll hand the call over to Raúl to cover our key financial metrics, dividends, and guidance.
Raúl del Villar: Thank you, Andrés. Turning to guidance, as we approach year-end, we are narrowing organic net revenue growth guidance to 4% to 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% to 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 nine highlights the earnings and shareholder return benefits of our expanded portfolio.
Raúl del Villar: For the first 9 months of the year, pro forma EPS increased 114% to MXN 45.4, reflecting the inclusion of Tupperware's net income for the full 9-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 Q4 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 1.65x, supported by debt reduction of MXN 431 million, while interest coverage increased to 6.91x as we continue deleveraging and generating a strong EBITDA.
Raúl del Villar: 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 9 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.
Andrés Campos: 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. Thank you.
Operator: Thank you. We will now begin the question and answer session. To ask a question, dial in by phone and press star then one on your telephone keypad. Make sure your mute function is turned off, and if you are using speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Your first question comes from Eric Beder with SCC Research. Please proceed with your question.
Eric Beder: Good afternoon. Congratulations on the quarter. I want to talk a little bit about.
Andrés Campos: Hi, Eric. Thank you.
Eric Beder: Thank you. I want to talk a little bit about Tupperware. You have owned it now for about four months. I know you are a very innovative company in terms of new products and other pieces. Betterware is almost 80% of that, meaning Jafra is a very high number, while Tupperware, for various reasons not related to you, has not been as high. I guess the question is, should it be higher? Yes, it should. What do you see going forward in terms of the opportunities at Tupperware to increase the level of innovation?
Andrés Campos: Eric, sorry, just to clarify the question, is your question should the revenue be higher?
Eric Beder: No. The question is, what are the opportunities in terms of new products and categories at Tupperware?
Andrés Campos: Okay. Yeah. Thank you, Eric. This is Andrés here. Well, we believe the opportunities are very important. You know that on one hand, Tupperware had been, in history, very focused in plastic material products. We are considering other materials beyond plastic. In the container category, there are new materials like glass or stainless steel, ceramics, or other kinds of material that we are obviously considering to continue to expand the brand in its core category, which is food containers. At the same time as managing other materials in that category, we are also looking to expand other categories within Tupperware that are not fully exploited, such as drinking ware, it is a category that can be more highly exploited. Another one is kitchen utensils or kitchen appliances in general for cooking. So there are different avenues for growth in Tupperware, I would say, beyond plastics and beyond containers.
Andrés Campos: We think that there is a lot to do there. We are assembling a very strong innovation team. As we announced, we brought in David Kusuma, who used to be back in the time, Tupperware's Global R&D and Innovation Director. Together with that, we are assembling a whole innovation team and process, and we think there is a lot of interesting to come for Tupperware there.
Eric Beder: Okay. Betterware, you have done a great job turning it around with the associates and the revenue coming back. How sustainable do you see that, and what do you see the opportunities there at the Betterware division, both in Mexico and for potential expansion outside of Mexico right now?
Andrés Campos: At the Betterware division? Yes. As you can see in the report, we are very glad at the results of Betterware Mexico, and Betterware in general. Betterware has started to come back to growth. We have our third quarter of consecutive growth year-over-year, and now almost reaching double digits. Betterware's growth is strengthening, both in Mexico and abroad. This was our first brand, and it had huge CAGR in the last 10 years, then became flat two or three years, but now we are starting to regain growth from all the different strategies, commercial strategies that we have laid forward before, and we are happy for that to be happening. We still have a lot of room to grow in Mexico, as we have said before. At the same time, we opened Ecuador last year. We just opened Colombia this year.
Andrés Campos: With our focus in the Andean region, we think that the brand in general will continue to expand at a very good pace.
Eric Beder: Great. I guess a question for Raúl. The net debt, even after the acquisition, has remained pretty steady in terms of net debt to EBITDA. What should we be looking at here longer term as a use of for free cash flow? What kind of ratio should we be thinking as goals longer term for the company in terms of debt and again, use for the free cash flow? Thank you.
Raúl del Villar: Hi, Eric. Thank you for your question. I don't think we are ready at this point to provide a long-term guidance on where we want to be in terms of net debt. But the message I want to convey is that we will continue executing disciplined operations with disciplined finance, and we will continue deleveraging as we have in the past. All of our three businesses are cash generative. All of them are performing well. As you can see, we are generating enough cash to invest in expansion, invest in CapEx, and at the same time, continue paying dividends and deleveraging. So that's what you would expect. I don't think we have a definite guidance on where we want to be in terms of leverage, but we will continue performing as we have as of today.
Eric Beder: Great. Thank you, and good luck on the holiday season.
Andrés Campos: Thank you, Eric.
Operator: Your next question comes from Linda Bolton Weiser with Water Tower Research. Please proceed with your question.
Linda Bolton Weiser: Hi. How are you? I just wanted to ask about the narrowing of the organic sales growth guidance range. Because in the quarter, even though Jafra was below expectations, I guess Betterware did really well. It was quite a bit above where I would have expected it to grow. Tupperware's revenue was quite a bit higher than I would have thought. It seemed to me that the whole thing kind of put together was, net, it was better than I would have expected. I guess I am wondering, even with Jafra having problems, if Betterware is kind of doing well on the top line, why did you feel the need to narrow that guidance or kind of actually lower it at the midpoint you lowered it? What is the real reason? Is it the Jafra more than anything that is the issue? Thanks.
Andrés Campos: Hi, Linda. This is Andrés. Thank you for your question. We believe that we can turn Jafra around fairly quickly. Obviously, we do not want to overreach on that expectation. We do believe we can reach mid-single digit growth in Jafra for Q4. With that, plus Betterware growing stronger and Tupperware performing well. Obviously, our guidance contemplates that for Q4 and for the year round. We should expect high single digits organic growth in a combination of mid-single digit for Jafra and high single digit for Betterware.
Linda Bolton Weiser: Okay. So that is in Q4, you were just saying?
Andrés Campos: Yeah, in Q4.
Linda Bolton Weiser: Okay. Gotcha. Secondly, on the cost side, I just wanted to ask you about, you mentioned, and it is appearing in the numbers, that Betterware's gross margin did seem a little pressured. I guess you mentioned supply chain pressures, and Tupperware's gross margin was actually quite strong. It was better than I would have expected. Is this just a difference of where you are sourcing Betterware, you are bringing it in from outside and Tupperware, you are sourcing more regionally? What is the difference in terms of why those two businesses are experiencing different effects on the gross margin?
Andrés Campos: Well, what you mentioned is exactly right. It is where we source from. As you remember, Tupperware manufactures most of its products in our plants, both in Mexico and in Brazil. We manufacture locally and Betterware manufacturers mostly in China. What made the difference in Betterware was mainly the freight prices. Freight prices have gone up and have stayed higher than we expected, for a longer period of time, because of the whole supply chain issues in Hormuz, et cetera. It is mainly the freight prices that affected Betterware and which are not affecting Tupperware.
Linda Bolton Weiser: Okay. That makes sense.
Andrés Campos: Yeah.
Linda Bolton Weiser: Are you considering different pricing actions then, in Betterware to try to offset or what is your plan in terms of trying to improve the Betterware gross margin?
Andrés Campos: Well, we were waiting a little bit to see if this corrected in the short term because freight prices have been a little bit volatile because of all the global situations. They have eased a little bit, but not as much as we expected. We are taking the strategic actions to recover, either through pricing, promotions or certain strategies to compensate for that in Betterware Mexico. We are taking actions to recover our gross margin, not expecting these tariffs to decrease highly in the short term.
Linda Bolton Weiser: Okay. I guess just going back, I was interested in your comment that you thought Jafra, you could turn it around and have growth, year-over-year growth in Q4. What is it that you think you can do so quickly? Is it just a particular product launch or promotions or what do you think you can do so quickly to improve Jafra?
Andrés Campos: I think, Linda, the angle is more, I would say on two things. The first thing is, for short-term results, the inconsistency was more from inconsistent operating decisions that affected our short-term results. It is more about taking the correct decisions, the operating decisions. Taking the correct decisions, you can see a very quick rebound. We saw it, for instance, in Q2 of this year. It is just that we have been taking inconsistent decisions, managerial-wise in Jafra Mexico. This is the reason why the board and I decided that I would take over directly to make sure that we start making more consistent decisions in the short term.
Andrés Campos: Now, the other part is more in the midterm, is that after five years, that we have had Jafra, we started implementing the more low-hanging fruit of our commercial model at Jafra, but now we need to go into the mid-hanging fruit. We were not going into the mid-hanging fruit strategies as quickly as we wanted to. This is also the reason why I am taking over to accelerate strategies. When I am talking about this, I am talking about new technologies. We are working to launch the new app, the new Jafra Plus app next year. We had some delays in the launch, and now we are set to launch it at the beginning of next year. More complex innovation into more complex products in skincare. Some ways of making it easier for consumers to buy and sellers to execute.
Andrés Campos: We are rolling out this second phase of strategies within our model, and we have had some delays in them and now we are going to accelerate. I think these things together can bring the short term back to growth and then the midterm continue at consistent growth.
Linda Bolton Weiser: Okay, that sounds good. I just have two more questions.
Andrés Campos: Yeah.
Linda Bolton Weiser: One of them has to do with, I think you mentioned that in the Tupperware financials, there are maybe some unusual integration charges or expenses because the OpEx did look pretty high for the Tupperware piece. Is there any way to quantify that in terms of how much one-time type expenses there were in Q3 under the Tupperware?
Andrés Campos: Let me pass the word to Raúl to clarify exactly.
Raúl del Villar: So what we mean with the extraordinary expenses for the Tupperware acquisition actually sit at the consolidated base and actually are reflected. Keep in mind that our holding company is also the operating company of Betterware. So when you look at the Betterware results, they include some extraordinary expenses that we incurred for the acquisition of Tupperware. So that is what we mean. Those expenses are reflected in the consolidated books, but not necessarily in Tupperware standalone books. I do not know if that is what you referred to.
Linda Bolton Weiser: Well, it is
Raúl del Villar: If you want to
Linda Bolton Weiser: Top line.
Raúl del Villar: And just to give you the number, those expenses accounted for MXN 47 million. So it is significant for the quarter, but it is really non-material on a full year basis.
Linda Bolton Weiser: Okay, got you. Thank you. My last question is the question of innovation and other categories for Tupperware Latin America. I used to follow the US, well, all of Tupperware, but in the US, Tupperware certainly had many kitchen utensil items. They were very diversified. They even had cutlery and all kinds of things. Are you saying that those innovations were purely sort of more developed markets like the US and they were never taken into Latin America? Do you have the rights to any of those designs or products or innovations that Tupperware US had? Or do you have to start all over again and redesign certain of their items?
Andrés Campos: Yeah, Linda. In the past, Tupperware did go into some of these categories. But in our view and from our standpoint, it did not go in enough depth into the categories or with the correct strategy. This includes the fact that some of these products cannot be designed for a worldwide success because each market has specific cooking needs and even specific economic needs that you cannot satisfy worldwide markets with one same product. Now one of the important and very interesting things is that we are going to start innovating specifically for the Latin American markets in these categories, with understanding the consumer in Brazil, understanding the consumer in Mexico. And this makes a huge difference, because not necessarily what works for the US or Europe is going to work for Latin America.
Andrés Campos: Even though we can have access to past innovations or to products that are in the worldwide organization or the new party, we are thinking more about innovating products, new products, completely new products specific for the Latin American markets. And we think that that is going to make a huge difference for the success and for the depth and breadth into which we can go into these categories.
Linda Bolton Weiser: Okay. That makes complete sense. Thank you very much for explaining all that. I will leave it at that. Thank you.
Andrés Campos: Thank you, Linda.
Operator: Thank you. Again, if you have a question, please press star then one. Your next question comes from Cristina Fernández with Telsey Advisory Group. Please proceed with your question.
Cristina Fernández: Good afternoon. Thanks for taking my questions. I had a few on Betterware. I wanted to see if you can give an update of what you have learned in the last 90 days since the last call, and what changes you have made to drive the 14% growth you saw in Mexico.
Andrés Campos: You mean in Tupperware? Hi, Cristina. This is Andrés. You mean
Cristina Fernández: Hi. Yes, in Tupperware.
Andrés Campos: in Betterware or in Tupperware?
Cristina Fernández: In Tupperware. Yes.
Andrés Campos: Okay. Sorry, I thought you had said Betterware. But yeah. So a little bit similar to within our commercial model, we have some low-hanging fruit strategies that we started implementing in Tupperware Mexico. Some of that has to do with, for instance, catalog organization and catalog design. Our catalog is a store, but the benefit we have is that we can do a whole revamp of the design of our store very quickly. So we launched the new design of the Tupperware catalog, both design and merchandising techniques in the catalog, such that it becomes a lot more attractive, and this is really starting to help us to grow. At the same time, our sales force distributors and associates, they have kind of lost a lot of confidence from what was going on and the fact that they did not know what was going to happen with Tupperware.
Andrés Campos: We did a whole tour to make sure to communicate that now Tupperware Latam was part of BeFra, that its future was secure, and that its future has great possibilities. This brings a lot of confidence to the sales force, who are now investing time and investing effort again into expanding their businesses. This together with some promotional techniques that we also applied. This is kind of the first run in Tupperware since it had come from a long period of very unfavorable results. We think that these strategies have a higher impact in the short term, as we are seeing now. So we are happy with the start. I would also say, and it's very important to know, that the Tupperware management, in general, is a great management.
Andrés Campos: The thing is that they needed to have the foundation on which they could invest and the correct guidance or the correct direction in order to execute correctly. They were a little bit tied in hands before of what they could do and what they could not. But something very important to stand out is that management is great, and so we are able to execute very fast on what we need to execute with them. So I think all of this combination, good management, better confidence and trust of our distributors and associates, plus some of the first strategies such as catalog design and promotional techniques, are all coming together to start picking the business in the short term.
Cristina Fernández: Thank you. Then also on Tupperware, you mentioned that you were going to make some investments in the brand and in scaling the group. Could you provide more detail into what those investments are?
Andrés Campos: Yeah. First of all, I think the most important is we're investing in the innovation team. Tupperware had no innovation team. We are assembling the team, the processes, the capabilities, everything we need in terms of innovation. I think that's going to be the main thing. A couple of capabilities that we're building is technological capabilities. We have in Betterware, the Betterware Plus app. In Jafra, as I mentioned before, we're about to launch the Jafra Plus app. Obviously, we are aiming to build the Tupperware Plus app, which are all built on the same technology, on the same platform. We're building on the technology team to expand the technological capabilities of Tupperware. Finally, the third thing in which we're investing is business intelligence.
Andrés Campos: We have talked a lot about the great impact of business intelligence in our model, and Tupperware did not have that capability built in it. We are building that capability, and we think that we've talked a lot about these three pillars in our model: innovation, technology, and business intelligence. We're building on those three, which were basically at zero. We think these three things together are going to bring a lot of value in the medium and long term.
Cristina Fernández: The last one I had was, in the past, you've talked about some synergies from the acquisition, primarily in procurement, in manufacturing. Any update there or quantification of what the synergies could be?
Andrés Campos: We do not have an update yet there, Cristina. We're still evaluating. The reality is that our first priority is implementing the commercial model and everything that I just talked about in innovation, technology, et cetera, to accelerate revenue. We are analyzing the potential synergies of, for instance, bringing some Betterware products to be manufactured in the Tupperware plant in Mexico or helping Tupperware develop other material products with Betterware's supply chain capabilities. We are assessing all of that, but still early to tell. We have not quantified them yet.
Cristina Fernández: Thanks so much.
Andrés Campos: Thank you, Cristina.
Operator: Thank you. That concludes our question and answer portion of today's conference call. I would like to turn it back over to management for closing remarks.
Andrés Campos: Thank you again to all for joining us today. We are very pleased with this strong quarter, which demonstrates the strength of our expanded portfolio and the financial discipline behind it. BeFra is stronger, more diversified, and well-positioned for the future. Thank you again, and we look forward to speaking to you in the next quarter. Thank you.
Operator: Ladies and gentlemen, this concludes BeFra's Q3 2026 earnings conference call. We would like to thank you again for your participation. You may now disconnect.
