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1
UBS
LATAM / EMEA
New York
November 15
th
-17
th
, 2006
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Direct Sales Model (single level)
Categories: fragrances, make-up, skin care,
sun care and toiletries
Gross Revenues: R$ 3.7 billion in Sep06
(LTM)
Consultants: 597 thousand
International presence: Argentina, Chile,
Peru, Mexico and France
Natura
cosméticos s.a.
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3
f i n a n c i a l
r e s u l t s
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revenues
Consolidated gross revenues
(R$ billion)
1.2
1.4
1.9
2.5
3.2
2001
2002
2003
2004
2005
+27.7%
+21,5%
2.2
2.7
9M05
9M06
CAGR (2001-2005) = 29.1%
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profitability
16.6
20.1
22.2
24.4
24.7
2001
2002
2003
2004
2005
23.7
25.0
9M05
9M06
Consolidated ebitda margin
(%)
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P&L
9M06
Net sales
1,904
9M05
1,556
100.0
% of
sales
100.0
22.4
% of
sales
Gross profit
1,318
1,057
69.2
67.9
24.6
Ebitda
477
370
25.0
23.7
29.1
Net income
344
258
18.1
16.6
33.1
R$ million
Growth
%
Consolidated P&L
(R$ million)
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B r a z i l i a n
C F & T
m a r k e t
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target market - Brazil
Sources: IBGE and Sipatesp.
(1) Real terms deflated by IPCA
Target Market and GDP Growth -
Brazil
2001
2002
CAGR (2000-2005)
2003
2004
2005
2.2%
7.4%
GDP
growth
1.4%
Target market
growth
1
4.7%
1.5%
5.7%
0.5%
4.6%
5.2%
12.3%
2.3%
9.7%
Euromonitor forecast 05-10E: 7.0% in real terms
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market share - Brazil
14.3
14.5
2001
2002
17.1
2003
2004
19.2
Natura's market share
in the CF&T Target Market
1
Brazil (%)
(1) Target market: Skin care, sunscreen, make-up, fragrances, hair care, shaving products and deodorants - excludes
diapers, nail polishes, sanitary pads, hair dyes, oral hygiene and others. Source: Sipatesp/ ABHIPEC.
2005
21.4
22.8
20.8
6M05
6M06
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main players
in the Brazilian market
(1) Total CF&T market: Skin care, sunscreen, make-up, fragrances, hair care, shaving products, deodorants, diapers, nail
polishes, sanitary pads, hair dyes, oral hygiene and others. Source: Euromonitor
Market share
according to Euromonitor
Total
CF&T market ­ Brazil, 2005 (%)
Unilever
12.4
Natura
12.1
Avon
8.1
P&G
7.7
Colgate Palmolive
O Boticário
L'Oreal
7.0
5.8
5.8
J&J
3.4
Beiersdorf
1.8
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s t r a t e g y
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our strategy
products
innovation
sales
channel
brand
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b r a n d
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attributes
Sustainable development
Innovation
Biodiversity
Commitment with truth
Quality of relations
essencial
attributes of
our brand
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brand perception
Source: Survey commissioned by Natura. Conducted with 1,200 people across different
social classes in three large Brazilian cities (São Paulo, Porto Alegre and Recife).
71%
64%
2006
2005
70%
68%
2006
2
nd
in rank
27%
27%
Top of mind
Innovation
Quality
56%
49%
25%
Preference
43%
42%
19%
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natura's sustainability:
some initiatives and results
EJA (Young and Adults Educacional Program)
Effective enrolments in 2005
66,600 students
LCA average impact
89.3
% of refills over total items sold
2005
2004
17.4
15.3
Life Cycle Assessment (LCA) and sales of refills
Vegetable Soap Plant
2006*
18.0
85.7
(*) Estimate
New plant in the northern Brazil to process vegetable oil
purchased from small farmers (2600 families)
NA
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truly beautiful women
stereotypes
no
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i n n o v a t i o n
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innovation
Strong investments in R&D
between 3% to 3.5% of net sales
Leverage of R&D investments
through a network of research
partners
Biodiversity as the main research
platform
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innovation
44.5
43.5
48.8
63.2
69.8
2001
2002
2003
2004
2005
Total Innovation Index
(innovation+improvements) %
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o u r
c o n s u l t a n t s
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consultants
300
321
375
433
519
2001
2002
2003
2004
2005
Consolidated number of consultants*
(thousand)
510
597
9M05
9M06
(*) Number of consultants in Argentina, Brazil, Chile, Peru and Mexico.
+19.8%
+17.1%
CAGR (2001-2005) = 14.7%
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productivity
8.5
9.0
10.5
11.5
12.3
2001
2002
2003
2004
2005
Consultant's productivity in Brazil
(R$ thousand per average active consultant per year)
8.9
8.6
9M05
9M06
+6.6%
+3.5%
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Natura vs direct sales industry - Brazil
(R$ thousand per average active consultant in 2005)
Source: ABVED
7,3
12,3
Industry
(except Natura)
Natura
1.7x
productivity
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(1) Number of consultants who stopped activity in relation to the average total consultants figures.
Consultant's churn
1
%
(Brazil)
33
30
28
26
2002
2003
2004
2005
retention
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our consultants
Close relationship
Training
Flexible and fast logistics
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i n t e r n a t i o n a l
e x p a n s i o n
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why go international
Recent results of our international operations in
Latin America indicate:
> good acceptance of concepts and
attributes of Natura's brand
> effective start up model in new markets
CF&T market in Brazil might start to slow down
in 5 to 10 years
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results of existing operations
Gross revenues
Argentina, Chile and Peru (US$ million)
CAGR (2001-2005) = 32.9%
11.6
9.3
15.8
24.1
36.2
+50.2%
24.6
37.3
+51.7%
9M05
9M06
2001
2002
2003
2004
2005
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consultants
13
14
20
26
36
2001
2002
2003
2004
2005
+37.7%
CAGR (2001-2005) = 29.0%
+34.9%
34
46
9M05
9M06
Number of consultants
Argentina, Chile and Peru (thousand)
-> 4 thousand consultants in Mexico at the end of September06
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international expansion strategy
"Protect" Brazilian operation as the
company's source of cash
Consolidate and accelerate Latin
America operations
Assess the potential of new markets
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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.
www.natura.net/investor