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1
Apresentação
Merrill Lynch Pan LatAm Conference
São Paulo, Brazil | March, 2010
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Highlights
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highlights 2009
»
CF&T market growth 16.1% (10M09) / Market Share + 0.7pp (22.1%)
»
CNO model (More than 1 million consultants)
»
Innovation Index 67.6%
»
Action Plan: additional marketing investments R$ 204 million (R$ 252 million
savings)
»
Leadership & regional and business units
»
Brand Preference: 46% in consumer´s preference
3
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highlights 2009
»
Gross revenues: R$ 5.8 billion (+19.3% vs 08)
»
EBITDA: R$ 1 billion (+17.2% vs 08), EBITDA Margin: 23.8%
»
International operations: 6.9% of net revenues (5.9% in 08)
»
Follow on: Free float growth from 26,3% to 39,5%
»
Supplier communities: engaged 26 communities, benefiting 2,084 families
»
Sustainability: 1st to join WWF Brazil climate savers.
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5,6
6,4
33,1%
33,8%
10M08
10M09
Market Size
Market Share Natura (%)
6,4
7,4
11,1%
12,0%
10M08
10M09
Market Size
Market Share Natura (%)
12,0
13,9
21,4%
22,1%
10M08
10M09
Market Size
Market Share Natura (%)
CF&T Market¹
(R$ billion)
CF&T market and
Natura's Market Share
5
Cosmetics and Fragrances
(R$ billion)
(1) Core market: Skin care, sunscreen, makeup, perfumes, fragrances, hair care, shaving products and deodorant - excludes diapers,
nail polishes, sanitary pads, hair dyes and oral hygiene. Source: Sipatesp/ ABIHPEC.
Toiletries
(R$ billion)
+15.5%
+16.7%
+16.1%
+ 70 bps
+ 70 bps
+ 90 bps
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CNO model
CNO Model
Old Model
GR
CN
CN
CN
CN
CN
CN
CN
CN
CN
CNO
CNO
CNO
CN
CN
CN
GR
CN
CN
CN
1 CNO : up to 150 CNs
1 GR: 600 CNs
6
1 GR: up to 15 CNOs
1 GR: up to 2,250 CNs
Hired under CLT regulations
· Platform for channel growth
· Stronger and more productive relationship with our consultants
· Greater emphasis on training
Brazil (2009)
CNO/GR
10
CN/CNO
96
CN/GR
929
By the end of the 18
th
cycle.
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Channel strength
1
Source: Company, ABEVD (Brazilian Association of Direct Sales Companies)
2
HAY Consultant annual opinion poll for consultants satisfaction
Available consultants (in thousands)
Channels differentiations
High productivity
1
2.2 times higher than
its peers
High satisfaction
2
90% in 2009
Training
583,000
consultants
trained in 2009
Low
turnover
36% on
average
>
Consultants are Natura's first consumers
>
Drive sales through personal relationships
>
Channels disseminate Natura's values with consultants acting as agents of social transformation
>
Natura reached 1 million consultants in October, 2009
Business model
that generates
income and work
7
Brazil
632
731
875
2007
2008
2009
+19.8%
Int'l
86
119
159
2007
2008
2009
+33.9%
Total
719
850
1,034
2007
2008
2009
+21.8%
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>
Sustainable use of
Brazilian biodiversity
>
Open Innovation
exceeded 50% of the
projects
>
Products with
functional, emotional
and philosophical
benefits
Innovation
8
Number of new products &
innovation index
Source: Company
Note:
1
Percentage of new products in the company's revenues
183
119
113
56,8%
68,8%
67,6%
2007
2008
2009
New products
Innovation Index¹
3.5%*
2.9%*
2.6%*
* Percentage of net revenue
invested in innovation
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Novos
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Action plan
Marketing investments
»
2008 ­ 2010: additional
R$ 400 million
(versus 2007)
»
Figures accumulated 2008-2009:
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R$ 204 million
­ in marketing investments
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R$ 252 million
­from productivity gains
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More efficient process management reducing product
losses
»
Gains in production and raw materials
»
Natura magazine cost cutback
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Increase in internet orders (71% in 2009 vs 44% in
2007)
11
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Action Plan - Management model
>
Leadership development
>
Strengthening of corporate culture based on Natura's core values
>
Implementation of regional and business units
12
A B C
D
São Paulo Metro
São Paulo
Countryside
Mid West
1
North/Northeast
South
R
e
g
i
o
n
a
l

U
n
i
t
C
h
a
n
n
e
l
s
Business Units
Management by Category and Brands
>
Proximity to market
>
Regionalization of marketing mix
>
Increased autonomy and accountability
>
Leadership development opportunities
Note:
1
Includes the Mid West region and the following states: Minas Gerais, Rio de Janeiro and Espírito Santo
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13
Brand recognition
Source: Ipsos Brand Essence
CF&T brand by
preference (%)
42
47
46
18
16
16
2007
2008
2009
Natura 2nd Place
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465
518
684
15%
14%
15%
2007
2008
2009
Net Income
Net Margin
3,073
3,576
4,242
2007
2008
2009
706
860
1.008
23%
24%
24%
2007
2008
2009
EBITDA
EBITDA Margin (%)
Financial Results
14
Net Revenues
(R$ million)
Source: Company
CAGR `07-`09 = 17.5%
Net Income and Margin
(R$ million)
CAGR `07-`09 = 21.3%
EBITDA and Margin
(R$ million)
CAGR `07-`09 = 19.5%
+19%
+17%
+32%
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Cashflow generation
Leverage
(Net debt / EBITDA)
Dividends paid and pay-out ratio
(in R$ million)
CAGR `07-`09 = 20.0%
Capex
(in R$ million)
Source: Company
15
0.2
0.1
0.2
2007
2008
2009
136
110
141
250
2007
2008
2009
2010E
415
500
598
89%
96%
87%
2007
2008
2009
Dividends
Pay Out Ratio
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22
44
66
2007
2008
2009
121
164
219
2007
2008
2009
+32.9%
International Results
Operations in consolidation
(Argentina, Chile, Peru)
Operations in implementation
(Mexico, Venezuela* and Colombia)
Net Revenues
(in R$ million)
EBITDA
(in R$ million)
+62.2% in
Local Currency
+51.1%
+36.6% in
Local Currency
* Venezuela Operation was closed in 2009. Without Venezuela the growth is 58,3% or 74,2% in local
currency
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Net Revenues
(in R$ million)
EBITDA
(in R$ million)
(5)
(1)
9
(28)
(38)
(42)
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Social and sustainability results
»
Sustainability
»
Relative carbon emissions per product kg: 5,2% reduction
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Water consumption per unit billed (L/un): 4,3% reduction
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Energy consumption per unit billed (kj/un): 1,5% reduction
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Crer Para Ver program ­ improvement of brazilian public education
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7,1% of the consultants joined the voluntary product selling.
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Net revenue 2009: R$ 3.7 million
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Trilhas program ­ fighting functional illiteracy­ more than 200 thousand students
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Climate research
»
consultants: 90% in 2009 (90% in 2008)
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employees: 74% in 2009 (72% in 2008)
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suppliers: 82% in 2009 (74% in 2008)
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Sustainability
18
» Evolution on relationship quality
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Systematic process of stakeholder engagement: consultants,
employees, consumers, suppliers, supplier communities and
investors
»
1.500 people involved
» WWF Climate Savers
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Natura was the 1st Brazilian company to join WWF climate savers
» Ekos 10th anniversary
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Sustainable use of biodiversity and cultural heritage
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Engagement with 26 communities, benefiting 2,084 families
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19
Looking Ahead
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Management Model
· Managing through processes
· Strengthening organizational
culture
· Leadership development
· Business and regional units
Looking ahead
20
Consistent investments
· Increase in CAPEX
- IT (commercial and logistic process)
- Logistic model
- Production capacity
BRAZIL
· Continue enhancing
leadership via brand and
channel strength
· Opportunity to gain its
market share in sub-
categories
LATIN AMERICA
· New growth cycle with
relevant market share
· Business model focused on
increased customization
· Widely-recognized model due
to corporate behavior
Argentina, Chile, Peru, Colombia, Mexico
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Vision
Because of its corporate behavior, the
quality of the relationships it establishes and
the quality of its products and services,
Natura will be an international brand,
identified with the community of people who
are committed to building a better world,
based on better relationships among
themselves, with others, with
nature of which they are part,
with the whole.