Betterware de México, S.A.P.I. de C.V. Q2 FY2025 earnings call

• Betterware Mexico returned to sequential growth with revenue up 4% QoQ, narrowing the gap to a negative 1.1% vs last year. Achieved through aggressive pricing strategies, product investments, new incentive program leading to net associate growth, more attractive points program, new personal tagging system, innovation in home solutions and kitchen categories, and improved sales app functionality. • Jafra Mexico had double-digit growth and returned to profitability with revenue up 10.9% YoY and EBITDA margin 21.2%. Drivers include category strength from rebranding (fragrance and skin care), sales force productivity (associate base growth and higher average monthly ticket), and margin investments. • Jafra US had revenue decrease 8.9% YoY but 15.6% QoQ rebound, associate base grew 8.5% sequentially. Transformation activities include compensation plan revamp, U.S. market-specific innovations launching in Q3, and new catalog design in September. • Geographic expansion: Betterware Ecuador launched in May with 2,500 active associates; Betterware Guatemala Q2 sales returned to positive growth. Assessing Colombian market for entry in 2026. • Financials: Consolidated gross margin 67.1%, EBITDA increased 3.5% YoY to MXN 679 million, free cash flow MXN 592 million, consolidated EPS grew 7.7% YoY, net debt-to-EBITDA ratio 1.97x.

Consolidated revenue grew 5.1% year-over-year and 1.8% quarter-on-quarter. Betterware Mexico had revenue up 4% quarter-over-quarter, EBITDA margin 19.9%. Jafra Mexico had revenue up 10.9% year-on-year, EBITDA margin 21.2%. Jafra US had a 15.6% quarter-on-quarter rebound in revenue. Betterware Mexico expanded its associate base from 649,000 to 670,000, a 3.3% Q-on-Q growth. Jafra Mexico's associate base increased 2.3%, and Jafra US's associate base grew 8.5% sequentially. Betterware Mexico contributed to strong cash flow, and Jafra Mexico returned to profitability.

• Maintained full year guidance for 2025 of 6% to 9% revenue and EBITDA growth. • Board of Directors proposing a MXN 200 million dividend from Q2 2025, subject to ratification. • Expect margin improvement in Betterware due to strong peso, lower freight costs, and higher margin mix from internal strategies. • Aim to reach historical free cash flow conversion level of around 60% of EBITDA to free cash flow in total year 2025. • Jafra US expected to reach breakeven point by year-end with continued top line improvement and cost controls.

• Uncertainty in the macroeconomic environment which could impact consumption trends and challenge growth if it worsens.

Q: How much to attribute to better macro vs company-specific initiatives for sequential improvement?

A: While there was slight stabilization in consumption, more attributed to internal strategies like merchandising, pricing, promotion, and product techniques.

Q: Key drivers to get to full-year 6%-9% growth?

A: Stable macro environment and ability to grow revenue and associate base as seen in Q2.

Q: Areas for Betterware to return to 23%-24% EBITDA margin?

A: Improvement in gross margin due to strong peso, lower freight costs, and higher margin mix from reduced promotional activity; also expense reduction and efficiency in expenses.

Q: Opportunities in Chinese market?

A: Opportunities to work with suppliers to improve product design and costs.

Q: Inventory progress and future?

A: Inventory is coming down, aiming to reduce purchases and get back to normal position.

Q: Betterware catalog 30th anniversary celebration as driver?

A: Celebrating anniversary reinforces trust with sales force, associates, and distributors, building confidence for growth.