[Management View]
Betterware de México, S.A.P.I. de C.V. reported a 1.4% YoY revenue growth and a 22% YoY increase in EBITDA for Q3 2025. The company emphasized its five strategic pillars: strengthening its Mexican core, accelerating regional expansion, driving digital transformation, exploring new brands and categories, and maintaining financial discipline.

[Outlook]
The company plans to continue its international expansion, with a launch in Colombia in 2026. Betterware aims to leverage digital transformation, including generative AI and agentic AI, to enhance its person-to-person selling model. The management expects to reinvest excess gross margin into growth initiatives.

[Financial Performance]
- Revenue: +1.4% YoY
- EBITDA: +22% YoY, with a margin expansion of 362 basis points to 21.4%
- Free Cash Flow: +32.6% YoY, with a conversion rate of 77% of EBITDA
- Inventory: -17% YoY, targeting MXN 2,100 million by year-end
- Net Leverage: Decreased from 1.97x to 1.8x, targeting 1.6x by year-end

[Q&A Highlights]
Question 1: How should we be thinking about the potential inventory target going forward, and will that provide extra free cash flow to help drive expansion and pay down more debt?
Answer: The expectation is to close 2025 with around MXN 2,100 to 2,200 million in inventory, down from MXN 2,500 million at the start of the year. This reduction will provide extra free cash flow for expansion and debt reduction.

Question 2: How are you taking advantage of the stronger peso in terms of ordering and maximizing margins?
Answer: The strong peso and lower freight costs benefit Betterware Mexico, allowing the company to pass these benefits on to consumers to drive demand while protecting profitability. This enables more aggressive pricing in a sluggish consumption environment.

Question 3: What is the strategy for Jafra's expansion into new areas and potential new markets like Colombia?
Answer: Jafra's expansion will be 100% owned by Betterware, with professional management hired locally. The focus is on growing other categories faster than fragrances and building a diverse revenue mix.

Question 4: What are you seeing with the Mexican consumer in your categories, and how does it compare to the overall market?
Answer: The Mexican consumer has been volatile, with sluggish consumption trends. Betterware focuses on maintaining strong profitability and cash flow while gaining market share even in tough times.

Question 5: How should we think about the sustainability of the current EBITDA margin level?
Answer: The strong gross margin in Jafra Mexico is not expected to sustain at the current level. The normal gross margin target is 74.5% to 75%, with plans to reinvest excess margin into growth.

Question 6: Where do you see the most opportunity to embed greater technology or make it more efficient over the next few years?
Answer: The focus is on leveraging generative AI and agentic AI to enhance the person-to-person selling model. The company aims to stay at the forefront of technological advancements, including social selling and live shopping.

[Sentiment Analysis]
The tone of the management was optimistic and confident, emphasizing strategic growth and financial discipline. Analysts' questions focused on inventory management, margin sustainability, and technological advancements, indicating a positive outlook on the company's strategic direction.

[Quarterly Comparison]
| Metric | Q3 2025 | Q3 2024 |
|-------------------------|---------|---------|
| Revenue Growth | +1.4% | N/A |
| EBITDA Growth | +22% | N/A |
| EBITDA Margin | 21.4% | N/A |
| Free Cash Flow Growth | +32.6% | N/A |
| Inventory Reduction | -17% | N/A |
| Net Leverage Ratio | 1.8x | 1.97x |

[Risks and Concerns]
- Volatile consumer environment in Mexico and the US
- Sustainability of current high gross margins
- Execution risks in international expansion and digital transformation

[Final Takeaway]
Betterware de México, S.A.P.I. de C.V. demonstrated resilience and strategic focus in Q3 2025, with solid financial performance and a clear roadmap for growth. The company's emphasis on digital transformation, regional expansion, and financial discipline positions it well for future opportunities and challenges. Investors should monitor the execution of these strategies and the impact of external market conditions on the company's performance.