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Natura
Natura
Cosm
Cosm
é
é
ticos
ticos
S.A.
S.A.
July 2004
July 2004
2Q04 Earnings Presentation
2Q04 Earnings Presentation
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1
Initial Public Offering at Bovespa
Number of Trades and Trading Value ­ NATU3
Period
Average number
of trades
Share
1
Average daily
volume (R$ 000)
Share
2
June 1-15
204
0.4%
12,212
1.4%
June 16-30
92
0.2%
7,318
0.6%
July 1-15
93
0.2%
3,815
0.3%
July 16-23
1 Share in Bovespa's total number of trades
2 Share in Bovespa's trading value
Natura's IPO was quite successful ­ a milestone in the Brazilian market ­
having significant participation from individual investors. The
appreciation of Natura's shares following the IPO reflects the Company's
determination to balancing financial, social and environmental results.
106
0.2%
4,293
0.4%
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2
Company Commitment
Natura is a Company that creates value for both
its shareholders and society, and all of its
governance and management actions are
determined by its commitment to sustainable
development.
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3
Brand Recognition
Best Annual Report
for a Privately-Held Company
1st Company in the
Pharmaceutical, Hygiene and
Cosmetic Industry
Exame Melhores e Maiores
3rd Most Valuable Brand in
Brazil
Isto É Dinheiro / Interbrand
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4
Ongoing Innovation
Investments in innovation are important to renew our product
portfolio. The return on such investments is made clear by the share
of new products in the Company's total revenue.
* Innovation Index measures the share of innovative products (launched in the past 24 months) in the total revenue of the period -
Brazil.
Investments in Innovation (R$ MM)
Number of launchings and Natura's
Innovation Index*
165
44
91
117
45.8%
31.4%
29.2%
38.7%
30.7%
2001
2002
2003
1H03
1H04
17.1
19.6
35.5
28.8
27.2
2.6%
3.0%
2.9%
3.3%
2001
2002
2003
1H03
1H04
2.7%
64
% Net Revenue
Research and
Development
Investments
Innovation Index*
Number of
Launchings
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5
Sales Channel - Brazil
Size and Productivity Growth
The brand equity combined to the relationship kept with Natura
Consultants develop the sales channel, both in size and productivity.
Growth in the Number of Natura
Available Consultants in Brazil
(thousand)
Productivity Growth
(R$ thousand per active consultant)
CAGR 01-03
11%
+16%
CAGR 01-03
10%
+10,1%
287
307
355
316
367
2001
2002
2003
1H03
1H04
8.6
9.0
10.4
4.8
5.3
2001
2002
2003
1H03
1H04
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6
Financial Summary
2Q04
2Q03
change %
Units sold
(million)
46.3
36.2
27.9
Net Revenues
428.5
322.2
33.0
Gross Profit
282.6
202.4
39.6
Margin (%)
65.9
62.8
-
EBITDA
102.2
67.4
51.5
Margin (%)
23.8
20.9
-
Net Income
78.8
11.9
562.3
Net Debt (cash)
(84.6)
94.7
n/a
n/a ­ not applicable
R$ MM - Consolidated
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7
Financial Summary
1H04
1H03
change %
Units sold
(million)
84.3
65.6
28.5
Net Revenues
757.7
562.1
34.8
Gross Profit
503.4
353.6
42.4
Margin (%)
66.4
62.9
-
EBITDA
184.5
110.1
67.6
Margin (%)
24.3
19.6
-
Net Income
123.5
16.9
630.8
Net Debt (cash)
(84.6)
94.7
n/a
n/a ­ not applicable
R$ MM - Consolidated
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8
Operations ­ Latin America
Latin American operations have been reporting a strong growth. We
have just achieved the breakeven at Peru's subsidiary.
Net Revenue x Operational Result
in the Semester
(US$ MM)
Available Consultants in the
Latin American Channel
(thousand)
CAGR 01-03
24%
+31%
13.0
14.4
20.0
16.8
22.0
2001
2002
2003
1H03
1H04
999
1,156
Productivity
*
* US$/Active Consultant
4.9
7.6
Net Revenue
Operational Result
+55%
1H03
1H04
-1.4
-1.5
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9
CAPEX
Capital expenditures in fixed assets reached R$ 22.7 million in the first
half of 2004. Most of it was concentrated on the construction of the
new Vertical Storehouse.
CAPEX - R$ MM
2004 Estimated CAPEX
38.8
25.2
23.9
22.7
2001*
2002
2003
1H04
Maintenance
Expansion
Process Improvements
14%
65%
21%
* Natura Empreendimentos in 2001
R$ 75 MM
15%
61%
24%
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10
Indebtedness
After BNDESPAR converted debentures amounting to R$ 34.4 million
and cash generation in the period, Natura ended the semester with net
cash of R$ 84.6mm.
Net Debt /(Cash) Evolution
(R$ MM)
Indebtedness Breakdown
R$104 MM
2.8-year
average
maturity
1.8-year
average
maturity
(85)
22
(19)
119
205
2001
2002
2003
1Q04
2Q04
BNDES
Finep
IFC
65%
35%
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11
Dividends and
Interests on Capital
On July 27, Natura's Board of Directors approved the distribution of
dividends and the payment of interest on own capital totaling a gross
amount of R$ 86.8 million, being:
Dividends
R$ 73.4 million
R$ 0.865 per share
Interest on Own Capital
R$ 13.4 million
R$ 0.158 per share (gross amount)
R$ 0.134 per share (net of income taxes)
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12
Relation with the Capital Markets
3Q04
APIMEC
August 18, 2004 ­ Natura ­ 9h30 (Brasília Time)
October 27, 2004 ­ Earnings Release
October 29, 2004 ­ Conference Call and Webcast
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July 2004
July 2004
This presentation contains forward-looking statements. Such statements are not statements of historical
fact, and reflect the beliefs and expectations of the Natura's management. The words "anticipates",
"wishes", "expects", "estimates", "intends", "forecasts", "plans", "predicts", "projects", "targets" and
similar words are intended to identify these statements, which necessarily involve known and unknown
risks and uncertainties. Known risks and uncertainties include, but are not limited to, the impact of
competitive products and pricing, market acceptance of products, product transitions by the Company
and its competitors, regulatory approval, currency fluctuations, production and supply difficulties, changes
in product sales mix, and other risks. This presentation also includes pro-forma information prepared by
the Company for information and reference purposes only, which has not been audited. Forward-looking
statements speak only as of the date they are made, and the Company does not undertake any obligation
to update them in light of new information or future developments.
This presentation contains forward-looking statements. Such statements are not statements of historical
fact, and reflect the beliefs and expectations of the Natura's management. The words "anticipates",
"wishes", "expects", "estimates", "intends", "forecasts", "plans", "predicts", "projects", "targets" and
similar words are intended to identify these statements, which necessarily involve known and unknown
risks and uncertainties. Known risks and uncertainties include, but are not limited to, the impact of
competitive products and pricing, market acceptance of products, product transitions by the Company
and its competitors, regulatory approval, currency fluctuations, production and supply difficulties, changes
in product sales mix, and other risks. This presentation also includes pro-forma information prepared by
the Company for information and reference purposes only, which has not been audited. Forward-looking
statements speak only as of the date they are made, and the Company does not undertake any obligation
to update them in light of new information or future developments.