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São Paulo, April 28
th
, 2010
­ Natura
Cosméticos
S.A.
(BM&FBovespa:
NATU3)
announces today its results for the first quarter
of
2010
(1Q10).
Except
where
stated
otherwise,
the
financial
and
operating
information in this report is presented on a
consolidated basis, in accordance with
International Financial Reporting Standards
(IFRS).
1. INTRODUCTION
Natura's 1Q10 results improved significantly from the same quarter a year earlier,
confirming the consistent execution of our strategy in Brazil and in our international
operations.
Our Brazilian operations registered robust growth, with the sales channel expanding
19.3%, capturing the effects of the full implementation of the Natura Super Consultant
(CNO) sales model in May 2009. Our other Latin American operations continue to advance
at an accelerated pace, supported by a more robust development plan for our operations in
the implementation phase: Mexico and Colombia.
Consolidated net revenue increased 21.7%, and EBITDA grew 29.5%, accompanied by
EBITDA margin of 24.0% (22.6% in 1Q09). Income before tax improved 25.6%, while net
income grew 2.0%, reflecting the higher effective income tax rate in 2010
1
. Our net debt
ended the quarter at R$ 58.9 million.
Our market share was 22.5% of the target market in Brazil, up 100 bps from 2008, based
on the latest data for 2009 from the
SIPATESP/ABIHPEC
2
.
In the first quarter, we launched 14 new products, such as the new line of soaps Natura
EKOS. The innovation index remained at the high level of 67.1% (versus 66.8% in 1Q09).
The additional investments made in the marketing mix since the Action Plan was initiated in
2008 totaled R$221.8 million, and were financed by the productivity gains of R$292.1
million in the quarter. The share of orders made over the internet by our consultants has
maintained an upward trend, surpassing 80% of all orders in the period.
Net revenue from international operations increased by 37.0% in local currency terms,
following the trend of recent years.
1
The effective rate of income and social contribution tax in 2009 reflects the goodwill amortization from the corporate restructuring in 2004, which was concluded in
2009.
2
São Paulo State Perfumery and Toiletry Industry Trade Union /
Brazilian Association for the Cosmetics, Toiletry and Fragrance Industry
.
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2
Our operations in Chile were affected by the earthquake, with our facilities partially
damaged, which interrupted our revenue generation for a period of 22 days. Fortunately,
all our employees are well and the operations have returned to normal.
Net revenue from operations in consolidation (Argentina, Chile and Peru) grew by 30.7% in
local currency. However, the EBITDA from these operations was weak, reflecting the
impacts from the earthquake and the gross margin compression in Argentina due to the
depreciation of the peso against the Brazilian real. With signs of advances in the dynamics
of our operations in these countries, we are confident that results will improve over the
course of the year.
Net revenue from operations in implementation (Mexico and Colombia) increased by 89.7%
in local currency. The highlight was the first product developed locally, the perfume Ritual,
which was launched in Mexico with strong media support and very good initial results. We
reiterate that we continue to invest in these countries with more-local operations in line
with our strategy.
The number of consultants in the international operations increased by 30.6%, with
112,400 consultants in countries in consolidation and 45,300 in the countries in
implementation. Combined with our consultants in France, we ended the quarter with a
total of 159,100 consultants.
Sustainability and social and environmental aspects
In 2010, we celebrate ten years since the launch of the EKOS line, which was based on an
innovative model of doing business sustainably. Over these years, we formed partnerships
with 19 supplier communities, which include 1,714 families for the Natura EKOS line alone.
The EKOS line uses 14 ingredients from Brazil's biodiversity.
This year, Natura EKOS enlarged this important sustainability project launching a line of
soaps made with 100% of vegetable oil and between 20% and 50% pure oils coming from
Brazil's biodiversity produced by local communities that adopt agroforestry and organic
management systems, and the active ingredients are supplied by 263 families in eight
different communities in the Amazon Region, which contributes to the preservation of the
Amazon Rainforest.
Natura has established partnerships with 26 communities in various regions of Brazil and
Ecuador, which together involve 2,084 families.
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3
Our primary contribution to Brazil's cultural life is the Natura Musical Program. This project
was created in 2005 and has already sponsored more than 130 initiatives, including CD
recordings, the production of books, festivals, shows, research, expositions, tours and the
recovery of archives. The initiatives are selected through a public competitive process and
enjoy support from cultural incentive laws and matching funds from Natura. In addition to
its commitment to promoting cultural activities, starting this year the Natura Musical
Program
will
broaden
its
focus
by
launching
the
website
Natura
Musical
(www.naturamusical.com.br) and the radio program Natura Musical.
> THE COSMETICS, FRAGRANCES AND PERSONAL CARE SEGMENT IN BRASIL
In 2009, our target market for cosmetics, fragrances and personal care products grew
15.2% in nominal terms (10.4% in real terms), according to SIPATESP/ABIHPEC
3
. The
cosmetics and fragrances segment expanded by 14.8%, while the personal care products
segment grew by 15.5%. In real terms, these figures were 10.0% and 10.7%,
respectively.
The table below shows Natura's share in both the cosmetics & fragrances and personal care
segments. We ended the year with a 96 bps increase in our share of the target market,
from 21.6% in 2008 to 22.5% in 2009.
> CF&T Core Market Net Revenues Breakdown and Natura's Market Share in Brazil
2009
2008
Change %
2009
2008
Change %
Cosmetics and Fragrances
8,262.1
7,199.2
14.8%
34.0%
33.0%
0.9
Toiletries
9,257.4
8,015.1
15.5%
12.4%
11.3%
1.0
Total
17,519.5
15,214.3
15.2%
22.5%
21.6%
1.0
Source: SIPATESP
Market Share - Natura (%)
Core Market (R$ million)
3
São Paulo State Perfumery and Toiletry Industry Trade Union /
Brazilian Association for the Cosmetics, Toiletry and Fragrance Industry
.
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4
2. CONSOLIDATED RESULTS
1Q10
1Q09
Change %
Total Consultants - end of period*
(in thousand)
1,044.2
862.5
21.1
Unit sold ­ items for resale
(in million)
94.6
79.8
18.6
Gross Revenues
1,381.5
1,139.8
21.2
Net Revenues
1,014.4
833.7
21.7
Gross Profit
702.7
572.1
22.8
Gross Margin (%)
69.3%
68.6%
0.6 pp
Sales Expenses
(348.8)
(296.2)
17.8
General and Administrative Expenses
(127.0)
(107.0)
18.7
Management compensation
(4.0)
(4.1)
na
Other Operating Income / (Expenses), net
(0.8)
(0.1)
na
Financial Income / (Expenses), net
(6.6)
6.9
-195.8
Earnings Before Taxes
215.5
171.5
25.6
Net Income (Losses)
141.6
138.7
2.0
Net Margin (%)
14.0%
16.6%
-2.7 pp
EBITDA**
243.5
188.1
29.5
EBITDA Margin (%)
24.0%
22.6%
1.4 pp
(**) EBITDA = Income from operations before financial effects + depreciation & amortization.
> Consolidated Financial Summary
(R$ million)
(*) Positon at the end of the 4th sales cycle
Consolidated net revenue in 1Q10 was R$1,014.4 million, up 21.7% from 1Q09. In
Brazil, net revenue was R$942.4 million, up 22.3% from 1Q09. In the international
operations, net revenue was R$72.0 million, up 37.0% in weighted local currency (13.8%
in reais) from 1Q09. The international operations accounted for 6.9% of net revenue in the
quarter, compared with 7.3% in 1Q09, reflecting the impacts from the foreign exchange
depreciation in weighted local currency between the periods of 16%.
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Our base of consultants, which is an important revenue driver, expanded by 21.1% in the
quarter, attesting to the strength of the brand and the positive effect of the CNO business
model, the implementation of which was concluded in May 2009. At the end of the quarter,
we had 1,044,000 consultants in consolidated terms. The average productivity
4
of
consultants in Brazil rose by 2.3%, from R$1,997 to R$2,042.
Cost of Goods Sold (COGS) decreased from 31.4% of net revenue in 1Q09 to 30.7% in
1Q10. This reduction in COGS and the resulting 80 bps improvement in gross margin in the
quarter were mainly due to the price increases implemented in February and the exchange
gains from local currency appreciation.
The table below shows the main components of COGS:
1Q10
1Q09
RM/PM*
24.1
24.5
Labor
2.8
2.9
Depreciation
0.4
0.5
Others
3.5
3.5
Total
30.7
31.4
(*) Raw material and packaging material
> Composition of Cost of Good Sold
(% Net Revenues)
Selling expenses decreased by 110 bps, from 35.5% in 1Q09 to 34.4% in 1Q10,
supported by productivity gains in logistics
5
, lower costs with the catalog Revista Natura
and the dilution of selling expenses in the international operations, as well as the
depreciation in weighted local currency.
Administrative expenses represented 12.5% of net revenue in 1Q10, compared with
12.8% in 1Q09. The foreign exchange impacts and the dilution of administrative expenses
in the international operations were offset by additional investments in the leadership
development project and in adjustments to structures during 2009.
Consolidated income before income tax and social contribution was R$215.5 million,
up 25.6% on a year earlier. Consolidated net income in 1Q10 was R$141.6 million,
2.0% higher than R$138.7 million in 1Q09. The effective rate of income tax/social
contribution in 1Q09 was 19%, due to the accelerated amortization of goodwill in the
period, a benefit that expired that year.
4
Productivity measured at retail prices
5
Collection of orders, distribution, separation and freight
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6
Consolidated EBITDA was R$243.5 million in 1Q10 and R$188.1 million in 1Q09, for
growth of 29.5%. EBITDA margin increased from 22.6% in 1Q09 to 24.0% in 1Q10. We
reiterate our commitment to maintain EBITDA margin at a minimum of 23.0% for 2010.
1Q10
1Q09
Change %
Net Revenues
1,014.4
833.7
21.7
(-) Cost of Sales and Expenses
792.4
669.0
18.4
EBIT
222.0
164.6
34.9
(+) Depreciation/Amortization
21.5
23.4
-8.3
EBITDA
243.5
188.1
29.5
> EBITDA (R$ million)
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> CASH FLOW
1Q10
1Q09
Var %
Net income
141.6
138.7
2.0
(+) Depreciation and amortization
21.5
23.4
(8.3)
Internal cash generation
163.0
162.1
0.5
Cashflow (Increase) / Decrease
4.5
(15.8)
(128.6)
(+) Non-cash
(0.9)
(9.1)
(90.1)
Operating cash generation
166.6
137.2
21.4
Capex
(12.8)
(18.5)
(30.9)
Free cash flow*
153.9
118.7
29.6
(*) (Internal cash generation) +/- (changes in working capital and long-term assets and liabilities) ­ (acquisitions of property, plants, and
equipment).
> Consolidated cash flow ­ pro-forma (R$ million)
Internal cash flow generation in 1Q10 was R$163.0 million, up 0.5%, reflecting the net
income growth of 2.0%, given the expiration in 2009 of the tax benefit from goodwill
amortization, and the lower depreciation in the period due to the revaluation of the useful
life of assets in accordance with the new accounting standards. This total included a
reduction of R$4.5 million in working capital as well as investment of R$12.8 million in
fixed assets. As a result, free cash generation grew by 29.6% to reach R$153.9 million in
2010.
Inventories remained high, as already observed in 4Q09, but have already declined slightly
in terms of days of coverage. As announced, we continue to work on structural measures
to increase the flexibility and integration of the supply chain, improve the continuous
planning process and optimize the distribution network in the medium and long term.
Recoverable taxes also followed the same trend as in 4Q09. However, our negotiations with
the government have proved effective and the balance should decrease in coming quarters.
For 2010, we maintain our Capex estimate of R$250 million, which will be concentrated in
logistics capacity and information systems in Brazil.


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8
3. Pro-Forma Income Statements
The profit margin on exports from Brazil to international operations was subtracted from
the COGS of the respective operations in order to show the actual impact of these
subsidiaries
6
on the company's consolidated result. Thus, the pro-forma Statement of
Income for the Brazilian operations presents only the result of domestic sales.
6
This adjustment is fully made since 100% of the capital of these subsidiaries is held by Natura Cosméticos S.A.
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9
3.1 BRAZILIAN OPERATIONS ­ Pro-Forma Income Statement
> Financial Highlights - Brazil
(R$ million)
1Q10
1Q09
Change %
Total Consultants -
end of period
*
(in thousand)
885.1
742.0
19.3
Unit sold ­ items for resale
(in million)
86.3
73.7
17.1
Gross Operating Revenues
1,290.9
1,059.8
21.8
Net Operating Revenues
942.4
770.4
22.3
Gross Profit
660.6
531.2
24.4
Gross Margin (%)
70.1%
68.9%
1.1 pp
Sales Expenses
(302.9)
(252.0)
20.2
General and Administrative Expenses
(107.1)
(87.4)
22.5
Management compensation
(4.0)
(4.1)
(1.7)
Other Operating Income / (Expenses), net
0.1
0.4
(76.0)
Financial Income / (Expenses), net
(5.3)
7.7
(169.1)
Earnings Before Taxes
241.4
195.7
23.3
Net Income (Losses)
169.3
165.3
2.4
EBITDA
267.0
210.0
27.1
EBITDA Margin (%)
28.3%
27.3%
1.1 pp
(*) Number of consultants by the end of the 4th cycle of sales
The number of consultants in Brazil stood at 885,100 at the close of 1Q10, 19.3%
more than in 1Q09, reflecting the full implementation of the CNO model in May
2009. In 1Q09, the CNO model had been implemented in Brazil's Northeast and
Midwest, in the states of Rio de Janeiro, Minas Gerais and Espírito Santo, and in the
interior of São Paulo state. In 2Q09, the CNO model was implemented in Brazil's
North and South regions as well as in the city of São Paulo.
We continue to record productivity gains in accordance with the action plan
announced in early 2008, led by the share of online orders, which reached 81.4% in
the quarter, up from 60.7% in 1Q09.
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3.2 OPERATIONS IN CONSOLIDATION (Argentina, Chile and Peru
)
1Q10
1Q09
Change %
Total Consultants -
end of period
*
(in thousand)
112.4
89.9
25.0
Unit sold ­ items for resale
(in million)
5.5
4.5
23.7
Gross Revenues
64.4
60.7
6.0
Net Revenues
49.2
46.2
6.5
Gross Profit
28.7
29.9
(4.0)
Gross Margin (%)
58.4%
64.9%
-6.4 pp
Sales Expenses
(27.3)
(24.1)
13.0
General and Administrative Expenses
(4.7)
(4.7)
0.3
Others Income / (Expenses), net
(0.9)
0.1
-
Financial Income / (Expenses), net
0.3
(0.7)
-
Earnings Before Taxes
(3.8)
0.5
(923.2)
Net Income (Losses)
(5.3)
(1.0)
408.8
EBITDA
(3.5)
1.8
(300.1)
EBITDA Margin (%)
-7.1%
3.8%
-10.9 pp
(*) Number of consultants by the end of the 4th cycle of sales
> Financial Highlights - Operations under Consolidation
(Argentina, Chile and Peru)
(R$ million)
Net revenue from operations in consolidation was R$49.2 million in 1Q10, an
increase of 30.7% in weighted local currency (6.5% in reais) from 1Q09.
The number of consultants increased by 23.1% to reach 112,000 at the end of
1Q10.
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11
These operations recorded an EBITDA loss of R$3.5 million in 1Q10, compared with
an EBITDA gain of R$1.8 million in 1Q09. This performance was affected by the
earthquake in Chile and the sharp devaluation of nearly 28% in the Argentine peso
against the Brazilian real.
The Chile operations were affected by the earthquake at the start of the year,
paralyzing our operations for 22 days, for which we estimate a negative impact of
around R$3 million in the quarter due to revenue generation interruption and
inventory losses.
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12
1Q10
1Q09
Change %
Total Consultants -
end of period
*
(in thousand)
45.3
29.8
52.2
Unit sold ­ items for resale
(in million)
2.7
1.5
77.2
Gross Revenues
22.5
15.9
41.0
Net Revenues
19.4
14.0
38.7
Gross Profit
11.5
9.1
26.0
Gross Margin (%)
59.1%
65.1%
-6.0 pp
Sales Expenses
(15.0)
(16.3)
(7.9)
General and Administrative Expenses
(3.2)
(4.0)
(20.9)
Others Income / (Expenses), net
(0.0)
(0.6)
-
Financial Income / (Expenses), net
(1.6)
(0.2)
-
Earnings Before Taxes
(8.3)
(12.0)
(30.5)
Net Income (Losses)
(8.8)
(12.9)
(31.7)
EBITDA
(6.4)
(11.4)
(44.0)
EBITDA Margin (%)
-32.9%
-81.5%
48.6 pp
(*) Number of consultants by the end of the 4th cycle of sales
> Financial Highlights - Operations under Implementation
(Mexico, Venezuela and Colombia)
(R$ million)
Net revenue from operations in implementation totaled R$19.4 million in 1Q10, an
increase of 89.7% in weighted local currency, excluding Venezuela.
The number of consultants increased by 39.0% to reach 45,000 at the end of 1Q10.
Excluding Venezuela, this increase was 51.0%.
These operations recorded an EBITDA loss of R$6.4 million in 1Q10, compared with
negative EBITDA of R$11.4 million in 1Q09.
3.3 OPERATIONS IN IMPLEMENTATION (Mexico, Colombia and Venezuela
)
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13
Other investments in the international operations recorded losses (EBITDA) of R$13.6
million in 1Q10, versus R$12.3 million in 1Q09.
In 2010, these investments consist of our France operations and expenses relating to our
Latin America corporate office in Buenos Aires (as announced last quarter), the team for
which is being formed. In 1Q09, the investment of R$12.3 million includes our France
operations and expenses with the deactivation of the U.S. operations.
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> CONFERENCE CALL & WEBCAST

Portuguese:
Friday, April 30
th
, 2010
10:00 a.m. ­ Brasília time
English:
Friday, April 30
th
, 2010
12:00 p.m. ­ Brasília time
Brazilian callers: +55 11 4688-6341
U.S. callers (toll free): +1 800 860-2442
Callers from other countries: +1 412 858-4600
Access code: Natura
Live Webcast at:
www.natura.net/investidor
> INVESTOR RELATIONS
Telephone: +55 11 4196-1421
Helmut Bossert,
helmutbossert@natura.net
Patrícia Anson,
patriciaanson@natura.net
Bruno Caloi,
brunocaloi@natura.net
Guilherme Fukuda,
guilhermefukuda@natura.net
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15
> Consolidated income statement for the year


R$ million
1Q10
1Q09
NET REVENUES
1,014.4
833.7
Cost of sales
(311.7)
(261.6)
GROSS PROFIT
702.7
572.1
Operating expenses
(479.8)
(407.3)
Financial income (expenses), net
(6.6)
6.9
Other operating income (expenses), net
(0.8)
(0.1)
INCOME BEFORE INCOME TAX
AND SOCIAL CONTRIBUTION
215.5
171.5
Income tax and social contribution
(73.9)
(32.8)
NET INCOME FOR THE YEAR FROM CONTINUING OPERATIONS
141.6
138.7
Attributable to:
Shareholders
141.6
138.7
Non-controllers
-
-
EARNINGS PER SHARE - R$
Basic
0.3289
0.3233
Diluted
0.3276
0.3227
The accompanying notes are an integral part of these consolidated financial statements.
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16
> Consolidated balance sheet as of March 31
st
, 2010 and December 31
st
, 2009

ASSETS
1Q10
4Q09
LIABILITIES AND SHAREHOLDERS' EQUITY
1Q10
4Q09
CURRENT ASSETS
CURRENT LIABILITIES
Cash and cash equivalents
567.4
500.3
Loans and financing
484.7
569.4
Trade accounts receivable
380.9
452.9
Trade and other payables
230.0
255.5
Inventories
552.4
509.6
Payroll, profit sharing and related taxes
91.3
130.8
Recoverable taxes
210.4
191.2
Taxes payable
427.0
341.3
Other receivables
68.9
62.5
Reserve for tax, civil and labor contingencies
-
1.5
Total current assets
1,780.0
1,716.4
Derivatives
2.9
8.7
Other payables
46.1
30.0
NONCURRENT ASSETS
Total current liabilities
1,282.1
1,337.1
Recoverable taxes
75.5
63.9
Deferred income tax and social contribution
151.6
146.1
NONCURRENT LIABILITIES
Escrow deposits
254.1
232.4
Loans and financing
138.5
135.0
Other financial assets
7.8
7.4
Reserve for tax, civil and labor contingencies
115.7
120.0
Property, plant and equipment
483.4
492.3
Other payables
9.3
9.3
Intangible assets
78.8
82.7
Total noncurrent liabilities
263.6
264.3
Total noncurrent assets
1,051.3
1,024.9
SHAREHOLDERS' EQUITY
Capital
407.1
404.3
Capital reserves
142.4
143.0
Earnings reserves
396.1
253.7
Treasury shares
(0.0)
(0.0)
Proposed additional dividends
357.6
357.6
Accumulated losses
(17.7)
(18.7)
Shareholders' equity attributable to controlling shareholders
1,285.5
1,139.8
NON-CONTROLLING INTERESTS
0.0
0.0
Total shareholders' equity
1,285.5
1,139.8
TOTAL ASSETS
2,831.3
2,741.2
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
2,831.3
2,741.2
The accompanying notes are an integral part of these consolidated financial statements.
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17
> Consolidated cash flow statement
R$ million
1Q10
1Q09
CASH FLOW FROM OPERATING ACTIVITIES
Net income for the quarter
141.6
138.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
21.5
23.4
Reserve for losses on swap and forward derivative contracts
(5.7)
12.1
Reserve for tax, civil and labor contingencies
(5.7)
(1.3)
Deferred income tax and social contribution
(5.5)
(1.0)
Loss on sale of property, plant and equipment and intangible assets
1.5
(0.3)
Interest and exchange rate changes on loans and financing and other liabilities
15.6
6.1
Expenses on stock option plans
0.7
0.8
Allowance for doubtful accounts
2.9
2.0
Allowance for losses on inventories realization
10.6
(4.2)
Subtotal
177.4
176.3
(INCREASE) DECREASE IN ASSETS
Current:
Trade accounts receivable
69.1
103.0
Inventories
(53.5)
(53.2)
Recoverable taxes
(19.2)
(24.0)
Other receivables
(6.6)
(1.5)
Noncurrent:
Escrow deposits
(21.8)
(10.7)
Recoverable taxes
(11.5)
(11.9)
Other receivables
(0.3)
(2.7)
Subtotal
(43.8)
(1.0)
INCREASE (DECREASE) IN LIABILITIES
Current:
Trade accounts payable
(31.0)
17.3
Payroll, profit sharing and related taxes
(39.5)
(45.5)
Taxes payable
91.8
48.2
Other payables
21.6
(0.5)
Noncurrent:
Other payables
-
0.1
Subtotal
43.0
19.6
OTHER CASH FLOWS FROM OPERATING ACTIVITIES
Payments of income tax and social contribution
(6.1)
(39.5)
Payments of derivative transactions
-
(1.3)
Payments of interest on loans and financing
(3.7)
(4.3)
NET CASH PROVIDED BY OPERATING ACTIVITIES
166.7
149.7
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment and intangible assets
(12.8)
(18.5)
Proceeds from sale of property, plant and equipment and intangible assets
2.7
2.6
NET CASH USED IN INVESTING ACTIVITIES
(10.1)
(15.9)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of loans and financing - principal
(152.5)
(60.3)
Funds of loans and financing
60.0
17.3
Payment of dividends and interest on capital
-
(8.6)
Capital increase through subscription of shares
2.8
1.9
NET CASH USED IN INVESTING ACTIVITIES
(89.7)
(49.7)
Effects of exchange rate changes on cash and banks
0.1
3.9
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
67.1
88.0
Cash, banks and cash investments at beginning of quarter
500.3
350.5
Cash, banks and cash investments at end of quarter
567.4
438.5
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
67.1
88.0
The accompanying notes are an integral part of these consolidated financial statements.
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18
EBITDA is not used in the accounting practices adopted in Brazil and does not represent cash flow for the periods. EBITDA
must not be considered an alternative to net income as an indicator of the operating performance or as an alternative to cash
flow as an indicator of liquidity. EBITDA does not have a standardized meaning and its definition by the company may
eventually not be comparable to the Brazilian LAJIDA or to EBITDA as defined by other companies. Although EBITDA does not
provide, according to the accounting practices adopted in Brazil, a measure of cash flow, the Management utilizes it to
measure the Company´s operating performance. Furthermore, we understand that certain investors and financial analysts
utilize EBITDA as an indicator of the operating performance and/or cash flow of a company.

This report contains forward-looking statements. This information represents not only historical facts, but also reflects the
wishes and expectations of Natura's management. The words "anticipate", "wish", "expect", "forecast", "intend", "plan",
"predict", "project", "aim" and similar terms identify statements that necessarily involve known and unknown risks. Known
risks include uncertainties that are not limited to the impact of price and product competition, product acceptance in the
market, product transitions of the Company and its competitors, regulatory approval, currencies, currency fluctuation, supply
and production difficulties and changes in product sales, among other risks. This report also contains "pro forma" information
prepared by the Company to be used exclusively for information and reference purposes, since they are not audited. This
report is updated up to the present date and Natura does not undertake to update it in the event of new information and/or
future events.
ADVICE TO INVESTORS

On April 28th, 2010, our Board of Directors approved the issuance of simple, non-convertible into shares, registered, book-
entry and unsecured Debentures in the total amount of R$350,000,000.00 (three hundred and fifty million Brazilian real)
("Issue"), which will be subject to a public distribution with restricted efforts placement to qualified investors, pursuant to
CVM Instruction n. 476, of January 16, 2009 ("Restricted Offer" and "CVM Instruction n. 476/09", respectively). The proceeds
raised through the Restricted Offer will be allocated to lengthen the average maturity of our debt.

The Restricted Offer will be automatically exempted from registration with the Brazilian Securities and Exchange Commission
(Comissão de Valores Mobiliários - "CVM"), pursuant to CVM Instruction n. 476/09, and therefore from the fulfillment of
certain conditions and procedures commonly seen in public offerings of securities registered with CVM, with which usual
investors of capital market may be familiar. Accordingly, no prospectus will be prepared comprising information about the
Restricted Offer and the documents relating to the Issue and the Restricted Offer will not be subject to review by CVM.

The disclosure of the terms and conditions of the Restricted Offer will be subject to the limits and restrictions established by
CVM Instruction n. 476/09. Qualified investors interested in acquiring debentures under the Restricted Offer must have
knowledge of the financial market and the capital markets enough to conduct their own research, evaluation and independent
research on our company, our activities and our financial situation, and be familiar with the information usually disclosed by
our Company to our shareholders, investors and to the market in general.

WE RECOMMEND TO INVESTORS INTERESTED IN PURCHASE DEBENTURES IN THE RESTRICTED OFFER A CAREFUL READING
OF INFORMATIONAL MATERIALS THAT CONTAINS THE TERMS AND CONDITIONS OF THE RESTRICTED OFFER, AS WELL AS
OUR REFERENCE FORM (FORMULÁRIO DE REFERÊNCIA), OF OUR STANDARDIZED FINANCIAL STATEMENTS - DFP AND OUR
QUARTERLY INFORMATION - ITR, WHICH CONTAINS RELEVANT INFORMATION ABOUT OUR COMPANY, OUR ACTIVITIES AND
OUR FINANCIAL SITUATION, IN PARTICULAR, OF THE SECTION ENTITLED "RISK FACTORS "OF OUR REFERENCE FORM,
WHICH CONTAINS A DESCRIPTION OF CERTAIN RISK FACTORS THAT MUST BE TAKEN INTO CONSIDERATION BEFORE THE
IMPLEMENTATION OF A POSSIBLE INVESTMENT WITHIN THE RESTRICTED OFFER.