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October 2004
3Q04 Results
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2
Core Business
Financial Performance
Final Remarks
content
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3
content
Core Business
Financial Performance
Financial Performance
Financial Performance
Final Remarks
Final Remarks
Final Remarks
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4
(*) Considers only segments where Natura operates. Excludes diapers, oral hygiene items, hair dye, nail polishes, sanitary pads among others.
Note: wholesale prices, net.
Source: Sipatesp, ABIHPEC (CF&T industry associations)
3,278
3,859
521
708
1H03
1H04
15.9%
18.4%
+17.7%
+35.8%
Target Market*
2,287
216
1,272
365
28.7%
2,006
156
7.8%
1,572
492
31.3%
9.5%
Target Market* - by Category
Cosmetics &
Fragrances
1H04
1H03
1H04
1H03
Toiletry
Items
CF&T target market growth
Brazil
(accumulated 1H04)
Net Revenues - R$ MM
CF&T Market
Natura
Market share
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continuous innovation
165
99
91
117
2001
2002
2003
9M03
9M04
25.5
32.3
35.5
28.8
27.2
2.7%
2.9%
2.9%
3.3%
2001
2002
2003
9M03
9M04
2.7%
144
Investments in innovation are essential to renew the portfolio. The return on
these investments is verified by the effective participation of new products in total
revenues.
Investments in Innovation
(R$ MM)
Number of New Products and
Total Innovation Index
(Innovation + Improvement)
% Net Revenues
Investments in
Innovation
Number of
New Products
44.9%
43.5%
48.8%
48.2%
61.1%
Total Innovation
Index
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Natura's innovation indexes
(1) According to figures release up to the first half 2004 .
(2) The calculation includes all new products (both regular and refill), collection's new shades and re-packing, new kits and sets among others.
Innovation Index
1
Total Innovation Index
(Innovation + Improvement)
2
30.7%
29.2%
38.7%
31.4%
45.8%
2001
2002
2003
1H03
1H04
44.9%
43.5%
48.8%
48.2%
61.1%
2001
2002
2003
9M03
9M04
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highlights for products launched
3Q04
Chronos (Elastinol + R)
Plants
Aquarela
(anti-wrinkle items)
(lipsticks)
(hair treatment items)
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sales channel in Brazil
growth and productivity
The importance of Natura's brand combined to its relationship with consultants
makes the channel grow both in size and productivity.
Available Consultants in Brazil
1
(thousand)
Productivity
2
in Brazil
(R$ thousand per active consultant)
CAGR 01-03
11%
+15%
287
307
355
392
340
2001
2002
2003
9M03
9M04
CAGR 01-03
10%
+11%
Natura
Direct Sales in Brazil (excludes Natura)
8.6
9.0
10.4
4.8
5.2
5.6
2001
2002
2003
9M03
9M04
7.3
8.1
4.2
4.6
Source: Natura, ABEVD (Brazilian Direct Sales Association)
(1) In 9M, it considers the number of available consultants in
Brazil by the end of sales cycle 13.
(2) Volume of orders per average active consultant in the periods.
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In Latin America, excluding Brazil, the sales channel has been growing in a
strong pace.
Available Consultants
1
in Latin America
(thousand)
CAGR 01-03
24%
+32%
13.0
14.4
20.0
18.3
24.0
2001
2002
2003
9M03
9M04
Productivity
2
in Latin America
(US$ thousand)
+14%
1.7
2.0
9M03
9M04
sales channel in Latin America
growth and productivity
(1) In 9M, it considers the number of available consultants in
Latin America by the end of sales cycle 13.
(2) Volume of orders per average active consultant in the periods.
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recognition
2003 Best Annual Report
(privately held company)
Abrasca
(September 2004)
2004 Transparency Award
(privately held company)
Anefac, Fipecafi and Serasa
(September 2004)
Best Company for Women to Work
Exame - VocÍ S/A Ranking
(August 2004)
Most Admired Company in Brazil
Socially Responsible Company
Carta Capital Magazine/InterScience
(August 2004)
2003 Best Social Report
Aberj, Apimec, Ethos, Fides, Ibase
(September 2004)
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content
Core Business
Core Business
Core Business
Financial Performance
Final Remarks
Final Remarks
Final Remarks
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financial summary - quarter
3Q04
3Q03
Change %
Units sold
(million)
47.4
35.9
32.2
Net revenues
448.2
331.7
35.1
Gross profit
306.3
222.5
37.7
Margin (%)
68.4
67.1
-
EBITDA
104.5
75.7
38.0
Margin (%)
23.3
22.8
-
Net Income
77.4
18.4
319.8
Margin (%)
17.3
5.6
-
Net Debt/(Cash)
(32.0)
54.2
n/a
n/a ≠ not applicable
R$ MM - Consolidated
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financial summary ≠ nine months
9M04
9M03
Change %
Units sold
(million)
131.7
101.4
29.8
Net revenues
1,205.9
893.8
34.9
Gross profit
809.7
576.1
40.6
Margin (%)
67.1
64.5
-
EBITDA
289.0
186.0
55.4
Margin (%)
24.0
20.8
-
Net income
200.9
35.4
467.8
Margin (%)
16.7
4.0
-
Net Debt/(Cash)
(32.0)
54.2
n/a
R$ MM - Consolidated
n/a ≠ not applicable
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Latin American operations
Operations in Latin America have been growing consistently. The breakeven of
our subsidiary in Peru has been recently achieved.
Net Revenues x Losses from Operations
(US$ MM)
Net Revenues
Losses from operations
9M03
9M04
8.1
12.7
-2.2
-2.1
+58%
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CAPEX
Investments in the first nine months of 2004 amounted to R$44.2 million. Main
investments were allocated to the construction of the new Vertical Warehouse.
CAPEX - R$ MM
Estimated CAPEX - R$ MM
38.8
25.2
23.9
2001*
2002
2003
Maintenance
Expansion
Process
improvements
23%
60%
17%
* Natura Empreendimentos in 2001
75
2004
44.2
9M04
10%
62%
28%
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cash flow
R$ million
9M04
Net Income in the period
200.9
(+) Depreciation
25.8
(+) Other non-cash expenses
41.1
(=) Cash generated before working capital,
long-term receivables and long-term liabilities
267.8
(-) Changes in working capital, long-term receivables
and long-term liabilities
81.1
(=) Operating cash generation
186.7
(-) CAPEX
44.1
(=) Free cash generation
142.6
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content
Core Business
Core Business
Core Business
Financial Performance
Financial Performance
Financial Performance
Final Remarks
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relationship with the
market
2004
Meeting with
Analysts/Investors
November 11, 2004
Rio de Janeiro Stock Exchange
February 24, 2005 ≠ Earnings Release
February 28, 2005 ≠ Conference Call and Webcast
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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.