Betterware de Mexico, S.A.P.I. de C.V.

Thank you, and welcome to BEFRA's second quarter 2024 earnings conference call. Speaking on today's call are BEFRA's Executive Chairman, Luis Campos, Chief Executive Officer, Andres Campos, and Chief Financial Officer, Alejandro Ulloa. Before they begin their remarks, the company would like to remind you that today's call will include forward-looking statements which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Any such statements should be considered in conjunction with the cautionary statements and the safe harbor statement in the earnings release issued yesterday and risk factors discussed in reports filed with the SEC. BEFRA assumes no obligation to update any of these forward-looking statements or information. A reconciliation of other information regarding non-GAAP financial measures discussed on today's call can also be found in the earnings release, as well as the investor section of the company's website. Now, I would like to turn the call over to the company's chairman, Luis Campos. Please proceed, Mr. Campos.

Luis Campos Thank you, operator. Good morning, everyone, and thank you for joining us today. In the second quarter, BFRA maintained its growth momentum and the underlying fundamentals remain strong. We achieved 5.3% year-over-year revenue growth, with Better World Mexico marking its third consecutive quarter of growth, and Jafra US recording its first year-over-year revenue increase since the acquisition of Jafra in 2022. First half results show an 8% growth in net revenue, while EBITDA increased 3%, primarily driven by Jafra Mexico, which has maintained a steady growth pace and a strong performance. Positive results in the period happened under ongoing global supply chain disruptions and temporary market volatility in Mexico experienced after the federal election process. Nevertheless, we remain confident in achieving our 2024 revenue and EBITDA targets, as we will explain. Looking ahead, we remain positive about the second half of the year, Our performance in the second quarter underscores BEFRA's resilience and our ability to effectively navigate challenges. Additionally, we remain firmly committed to increasing shareholder value, as evidenced by our 18th consecutive quarterly dividend payment, representing a yield of 10.7% at the end of the quarter. Now, I will pass the call to Andres to provide more details on BEFRA's business unit performance in the second quarter of 2024.

Thank you, Luis, and good morning, everyone. As Luis noted, our second quarter results demonstrate our ability to navigate volatile market dynamics. Mexico's recent presidential election introduced temporary volatility during the second quarter, with the peso depreciating 7.5% in June alone. Existing global supply chain disruptions were further exacerbated by geopolitical tensions in the Middle East and by an increasing demand for shipping containers traveling from China to Mexico. causing container prices to surge 11.6% on average during the second quarter. Despite these challenges, BEFRA achieved a 5.3% increase in net revenues for the quarter, contributing to a 7.8% growth for the first half of 2024. Over the past 25 years, BEFRA has delivered outstanding performance. boasting a net revenue CAGR of 23% and 24.5% for EBITDA as of 2023. These remarkable growth rates underscore our status as a highly profitable growth company. Looking ahead, we are confident on our ability to sustain and build upon our impressive track record. Turning to Better Work Mexico, net revenue increased 2.2% year over year in the quarter, achieving 7% growth for the first half of 2024. Growth was achieved despite the following factors. Number one, key product sellouts impacted order fulfillment and sales force activity levels, primarily due to cautious demand estimation. However, these sellouts underscore our ability to develop innovative offerings that resonate with consumers, and we expect the growth trend to continue. Number two, import taxes on 116 SKUs averaging a 17% increase pressure profitability. However, our margins remain within historical averages. Additionally, we're strategically increasing some prices to be aligned to the market. Number three, the associate base experience a slight decline, prompting target incentives for recruitment and retention. Offsetting this, we saw an 8% increase in average order size for associates, reflecting higher productivity and continued market share gains. Looking ahead, We are focused on product innovation and enhancing demand forecasting to prevent future sell-offs. Improved pricing structures will also be implemented to bolster market share and sustain momentum. Jafra Mexico capitalized on favorable trends in the beauty market, achieving 8.7% revenue growth in the quarter. This growth was driven by robust performance across all categories. For the first half of 2024, Jafra Mexico posted a 10.1% year-over-year revenue increase, underscoring our effective product strategies and market positioning. We anticipate sustaining double-digit growth at Jafra over the medium and long term. In October, we will launch a completely redesigned catalog featuring a cleaner, more emotionally engaging design to boost purchases. Additionally, a more effective merchandising plan with enhanced pricing and promotional strategies will further strengthen our market position in Mexico's growing beauty market. Now, Jafra US achieved year-over-year growth for the first time since the acquisition, with revenue increasing by 1.2% in Mexican pesos, and by 4.4% in U.S. dollars, and a 3.7% expansion in the associate base. We expect the expanding associate base to be the primary growth driver, given our current low penetration levels in the U.S. market. The positive momentum at Jafra U.S. reflects successful market penetration strategies and effective implementation of our business model under a new leadership. This includes a newly designed catalog launched this month, expected to drive additional growth momentum and positively impact the second half of the year. The rollout of Shopify Plus platform in August will also bolster Jafra's digital presence in the U.S. Additionally, we are revamping our field strategy to empower and equip our sales force with better training and greater motivation. The strategic acquisition of Jafra has been instrumental in diversifying our product portfolio and providing Vefra with exposure to a rapidly growing market. This move not only mitigates temporary challenges, but also enhances the group resilience to market disruption. thereby bolstering our ability to sustain growth and making Befra a more economically resilient company. Our various strategic initiatives underline our commitment to adapting and thriving in dynamic market environments. We remain confident in achieving our full-year guidance and look forward to leveraging these initiatives to drive sustained growth and profitability. I will now hand over to Alejandro to provide a detailed review of our financial results.