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1
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2

3 Reason for being
3
Vision
3
Beliefs
4 Culture drivers

5 Message from the Chairmen
7 Message from the Executive Committee
9 Organizational profi le
15 Our commitments
17
Governance
25 Natura Management System
26 Outlook and strategy
29 High-priority sustainability topics
35 Innovating innovation
38 Collective construction
39 Quality of relationships
44 Employees
53 Consultants and NCAs
59
Consumers
61
Suppliers
64 Supplier communities
68 Surrounding communities
71
Shareholders
73
Government
79 Natura value chain
80 Creation of environmental value
93 Creation of social value
99 Creation of economic value
104 Financial Statements
135 DNV Statement
138 About This Report
139 Global Compact Principles
140 GRI Index
1. WHAT WE BELIEVE IN

2. OUR MOMENT





3. WHAT WE AIM FOR

4. WHO WE WORK WITH








5. WHAT FOOTPRINT WE LEAVE



6.
ATTACHMENTS
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3
1.
WHAT WE BELIEVE IN
Life is a chain of relationships. Nothing
in the universe exists alone. Everything
is interdependent.
We believe that valuing relationships
is the foundation of an enormous human
revolution in the search for peace, solidarity,
and life in all of its manifestations.
Continuously striving for improvement
develops individuals, organizations, and society.
Commitment to the truth is the route
to perfecting the quality of relationships.
The greater the diversity, the greater the
wealth and vitality of the whole system.
The search for beauty, which is the
genuine aspiration of every human being,
must be free from preconceived ideas
and manipulation.
The company, a living organism, is a
dynamic set of relationships. Its value
and longevity are connected to its ability
to contribute to the evolution of society
and its sustainable development.
BELIEFS
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, identifi ed with the community
of people who are committed to
building a better world, based on
better relationships with themselves,
with others, with nature of which they
are part, and with the whole.
VISION
Our Reason for Being is to create and sell
products and services that promote well-
being/being well.
WELL-BEING
is the harmonious and pleasant relationship
of a person with oneself, with one's body.
BEING WELL
is the empathetic, successful, and gratifying
relationship of a person with others,
with nature, and with the whole.
REASON
FOR BEING
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4
CULTURE DRIVERS
THE CULTURE DRIVERS ARE BASED ON OUR
ESSENCE, AND WERE CREATED TO GUIDE OUR
CHOICES AND ATTITUDES. THEY ARE LIKE TRACKS,
TRACING A CONCRETE ROUTE AND SIGNALING
WHAT DESERVES OUR SPECIAL ATTENTION IN OUR
DAY-TO-DAY WORK.
THE DRIVERS WERE FORMED IN A COLLABORATIVE
PROCESS INVOLVING THE FOUNDERS OF THE
COMPANY, THE MEMBERS OF THE EXECUTIVE
COMMITTEE, AND THE LEADERSHIP TEAM. WE
ALSO TOOK INSPIRATION FROM THE CULTURE
DIALOGUES, WHICH WERE HELD IN 2009 WITH
150 EMPLOYEES FROM THE ADMINISTRATIVE,
OPERATIONAL, AND SALES STAFFS. THE CULTURE
DRIVERS ARE:
COMMITMENT TO THE TRUTH
Be authentic and steadfast, making this
commitment to oneself and to others.
Defend what you believe and act consistently
with one's beliefs.
LOOKING AFTER RELATIONSHIPS
Doing things together is better if one opens up
to others with generosity and empathy, creating
an environment of trust with quality interaction.
Recognize that others are different from you,
listen without judging, respect others' opinions,
welcoming disagreements in order to fi nd the
best outcome for everyone.
CONTINUOUS IMPROVEMENT
Always strive to improve, moving forward in
all dimensions: material, emotional, intellectual,
and spiritual.
Continuously seek to know oneself, recognizing
one's talents and limitations.
Create an environment that fosters learning
and continuous improvement and that
recognizes high performance.
DOING THINGS WELL
Resolve to do everything with simplicity, but also
with beauty, quality, and with an eye for detail.
Have the discipline to deliver what was promised.
INNOVATION
Be an entrepreneur, take a leading role, do what
has never been done before, and take risks.
Continually question the status quo and
encourage the search for new ideas.
SUSTAINABLE DEVELOPMENT
Constantly deliver superior results and relevant
value in the economic, social, and environmental
dimensions.
Manage the short term with a commitment to
building the future of the company.
PLEASURE AND HAPPINESS
Face day-to-day challenges with optimism,
composure, and good spirit.
Celebrate achievements, fueling the enthusiasm
and energy that encourage us to move forward,
to do more, and to do it better.
Find fulfi llment in your work and affi nity with your
life purpose by fi nding meaning in everything you do.
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5
License granted by Intellectual Properties
Management, Inc., Atlanta, Georgia, as
exclusive licensor of the Estate of
Dr. Martin Luther King, Jr.
INDIVIDUALS, COMPANIES, AND NATIONS NEED A GUIDING FORCE. AN OBJECTIVE. AN
IDEAL. WE STILL USED TO HEAR, WHEN WE FOUNDED NATURA, STRONG ECHOES OF
THE MESSAGE, THE DREAMS AND THE UTOPIAS OF MARTIN LUTHER KING, AND WE
WERE ALSO DRIVEN BY A PURPOSE THAT SEEMED UNATTAINABLE.
Since then, the determination to build our company has been nurtured by the dream of building
a better world. Like Martin Luther King, we are convinced that life makes sense only if we think,
feel, and act in a systematic way.
2.
OUR MOMENT
2.1
MESSAGE FROM
THE CHAIRMEN
THE POWER OF
TRANSFORMATION
W E A R E
CONNECTED
TO THE PEOPLE AND THE
CHALLENGES OF OUR TIME.
WE WORK TOWARDS THE
P E R M A N E N T
E V O L U T I O N
O F O U R AC T I V I T I E S A N D
THEIR IMPACT ON THE THE
C O M M U N I T I E S
THAT WELCOME US.
IN A REAL SENSE,
A L L O F L I F E I S
I N T E R R E L A T E D.
A L L P E R S O N S A R E C AU G H T I N
A N I N E S C A PA B L E N E T W O R K
O F M U T U A L I T Y, T I E D I N A
S I N G L E G A R M E N T O F D E S T I N Y.
W H AT E V E R
A F F E C T S O N E
D I R E C T L Y,
A F F E C T S A L L
INDIRECTLY. I CAN NEVER BE WHAT I
OUGHT TO BE UNTIL YOU ARE WHAT
YOU OUGHT TO BE, AND YOU CAN
NEVER BE WHAT YOU OUGHT TO BE
UNTIL I AM WHAT I OUGHT TO BE.
THIS IS THE INTERRELATED STRUCTURE
O F R E A L I T Y
Martin Luther King
.
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6

ANTONIO LUIZ DA CUNHA SEABRA

PEDRO LUIZ BARREIROS PASSOS
Co-Chairmen of the Board of Directors
We are now observing the clash of sometimes opposing forces. Exacerbated individualism seek-
ing only to maximize material values coexists with the growth of a vision focused on the collective
interest. Actions and greater awareness concerning the socio-environmental cause are revealing
examples of the emergence of a change in the direction of civilization. We must therefore mobilize
society to build an agenda of transformation.
Over the years, it has become increasingly clear that if this agenda is to fl ourish, it must be lived
by all those who make Natura what it is and ­ so we aspire ­ by those with whom we relate. We
live this objective intensely, aware of the fact that in the world there are those who have been
excluded, there is prejudice, social inequality, corruption.. In other words, shadows that engender
indignation and demand immediate action, as they are an affront to the ethics of life, justice and
the possibility of peace.
The individualist vision may consider it naïve for a company to have an ideal that recognizes the need
for societal change. With all due respect for those who have a different opinion, we believe we must
take into account the world that surrounds us. Looking back at our history -- beginning with the
dream that is, little by little, blossoming into a tangible reality -- we know we can be successful. And
the progress we have made at Natura shows that we have made the right choices.
In 2008, we began to prepare our business structure for future development. At that time, we took
steps to strengthen the foundation of our organizational culture, align our leadership more closely
with our Essence, develop a new management system, redesign our logistics model, and concentrate
on expanding our market share in Latin America and building our leadership position in Brazil.
The future holds both opportunities and challenges. We are aware of the tougher competitive
environment and remain confi dent in our strengths. These include a strong brand that inspires our
consumers, who are now served by 1.2 million sales consultants, both male and female; our renewed
management abilities; and our ability to innovate -- which is apparent in everything we do, from
promoting quality in our relationships to transforming biodiversity assets into products.
We would like to express our acknowledgement of the motivated and talented leadership team that
carried out this process and which is now channeling its energy into pursuing the plans to expand
our activities. We would also like to extend our gratitude to the entire Natura community for its
effort and engagement in our common causes.
The collective energy of our leadership and all of those with whom we work will power the ex-
pansion of this movement. We believe we can contribute to meeting the challenges of the future
through our willingness to fi nd solutions that transform socioenvironmental dilemmas into sustain-
able business opportunities, while generating prosperity for everyone.
This, Natura's historical calling, makes our value proposition even more attractive, thus enabling
us to set our sights beyond the current borders and to see our brand transforming even more
distant realities.
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7
COMMITMENT
TO THE FUTURE
ALTHOUGH SOME OF OUR INITIATIVES ARE STRUCTURAL AND REQUIRE MORE TIME IN
ORDER TO MATURE, OUR ENTHUSIASM IS FUELED, BY THE KNOWLEDGE THAT WE HAVE
ACHIEVED ALL OF OUR INITIAL OBJECTIVES.
We saw yet another year of vigorous business expansion. Consolidated net revenues rose 21.1%, and
EBITDA was up 24.6%. We took on more sales consultants in all of our operations. Latin America is
a fertile market for business expansion and is increasingly important to our ability to grow. To meet
our expansion plans in the region, we initiated local production through partnerships in Argentina,
Colombia, and Mexico. In Brazil, Natura made strong gains, reaching a preference rate of 49% among
consumers. We expanded our leadership position by 1.1 percentage points, reaching a 23.6% share of
our target market. We created and distributed more value to all of our major stakeholders. And we
mobilized the business sector around the topic of biodiversity and reduced the environmental impact
of our products.
Not everything turned out as we had planned. Despite these advances, we still have progress to make
in the level of service we provide to our consultants. Nevertheless, we are confi dent that the invest-
ments we have made in our infrastructure will raise our level of service to the standard we desire.
Despite our efforts, we also failed to achieve the results we had hoped for in organizational climate,
which were below the progress expected. However, we are convinced that we have taken the right
steps to improve the quality of our relationships with our employees. Because this is such an impor-
tant issue for Natura, we are redoubling our efforts to raise these stakeholders' level of satisfaction.
2.2
MESSAGE FROM THE
EXECUTIVE COMMITTEE
NATUR A IS IN A POSITION TO
RESPOND TO THE
CHALLENGES
OF THESE NEW TIMES
. OUR
CONFIDENCE STEMS
FROM OUR CONTINUED ROBUST
PERFORMANCE IN RECENT YEARS.
IN 2010, WE WERE DELIGHTED
T O
R E P O R T S T R O N G
E A R N I N G S
-- E V E N A S W E
C O N T I N U E D TO E X E C U T E T H E
P L A N B E G U N I N 2 0 0 8 T H AT I S
I N T E N D E D TO M A I N TA I N O U R
PA C E O F G R O W T H
I N
BRAZIL AND ESTABLISH BASES FOR
FUTUR E E XPANSION
.
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The plan we put in place in 2008 included initiatives that have both an immediate impact and long-
term impacts. Several of these measures have contributed to our current results: innovation in our
business model with the establishment of Natura Consultant Advisers (NCA); concentrating our
portfolio on important product launches, such as the Una make-up range, Amó perfume, and Chro-
nos anti-aging facial cream; and greater investment in marketing and communications through an ad-
ditional injection of R$410 million, enabled by productivity gains of R$449 million.
We also undertook longer-lasting actions. We implemented a new process-based management model
structured around business units and regions; we refreshed our organizational culture, focusing on
developing and attracting leaders who are aligned with our Essence; we set the pace for managing the
quality of our relationships by expanding engagement practices; and we invested in our infrastructure,
upgrading our production, logistics, and information technology capabilities to improve services.
Concurrently, we turned our gaze to a more distant horizon and built our 2030 Vision. This is a long-
range commitment to strengthening Natura's future while alerting us to the challenges and uncertain-
ties of a world in rapid transformation. It reiterates our intention to create sustainable results and to
contribute to a fairer, more inclusive and more responsible society.
Many of the events of 2010 have a common thread: enthusiasm for a project that imbues us with new
energy at every cycle of achievement. We wish to thank all of you who have been so dedicated in your
support for Natura. By working together, we will achieve innovative solutions that transform the busi-
ness challenges of the next 20 years into development opportunities that benefi t society as a whole.
ALESSANDRO CARLUCCI
Chief Executive Offi cer
JOÃO PAULO FERREIRA
Senior Vice President
of Supply Chain
JOSÉ VICENTE MARINO
Senior Vice President
of Sales and Marketing
MARCELO CARDOSO
Senior Vice President of
Organizational Development
and Sustainability
ROBERTO PEDOTE
Senior Vice President of Finance,
Legal Affairs, and Information
Technology
TELMA SINICIO
Senior Vice President of Innovation
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9
We are a Brazilian cosmetics, fragrances and personal care company with a strong presence in Latin America.
Since our founding in 1969, we have built a culture that values relationships. Our corporate behavior is focused
on promoting sustainable development by improving awareness about responsible and innovative use of bio-
diversity assets. We strive to create value through solutions and new opportunities that we identify in partner-
ship with our stakeholders -- always with an eye to fi nding a balance between the social, environmental, and
economic impacts of our business.
We have adopted a direct sales business model because we believe in our ability to generate and distribute
income, offer development alternatives and inspire more than 1.2 million sales consultants to disseminate our
value proposition to our consumers.
Natura directly employs more than 7,000 professionals. Our head offi ce is in Cajamar, state of São Paulo, and
we have fi ve commercial offi ces in Brazil: Salvador (Bahia), Campinas and Alphaville (São Paulo), Rio de Janeiro
(Rio de Janeiro), and Porto Alegre (Rio Grande do Sul). Our plants and Research and Technology centers are
located in Cajamar (São Paulo) and Benevides (Pará), and in 2006, we opened an Advanced Technology Center
in Paris, France. In Brazil, our products are delivered to our consultants and consumers from distribution centers
in Cajamar and Jundiaí (São Paulo), Canoas (Rio Grande do Sul), Matias Barbosa and Uberlândia (Minas Gerais),
Simões Filho (Bahia), Jaboatão dos Guararapes (Pernambuco), and Castanhal (Pará).
We have company-owned operations in France, Argentina, Chile, Colombia, Mexico, and Peru. In addition, we
use local distributors to sell our products in Bolivia, Guatemala, Honduras, and El Salvador. In 2010, we began
manufacturing in Argentina through local partnerships. We also have Natura Houses, which are centers where
our consultants can work and train and where consumers can get to know our products. We have seven of
these in Brazil, all in the state of São Paulo, 14 elsewhere in Latin America, and one in France.
We have been a publicly traded company since 2004, with about 40% of our shares listed on the New Market of
the São Paulo Stock Exchange (BM&FBovespa). For fi ve consecutive years, we have been included in Bovespa´s
Corporate Sustainability Index (CSI) (learn more on page 71, Shareholders).
MAIN HIGHLIGHTS OF THE YEAR
ECONOMIC
¾ Our net revenues totaled R$5.1 billion, a growth of 21.1%.
¾ We recorded EBITDA of R$1.2 billion, up 24.6% from the previous year, and an EBITDA margin
of 24.5%, compared with 23.8% in 2009.
¾ We achieved net income of R$744.1 million, 8.8% above the previous year.
¾ We distributed more wealth to our stakeholders. The wealth generated to our employees increa-
sed 20%, for our consultants 19% and for our shareholders 17%.
¾ International manufacturing began through partnerships in Argentina. In 2011, we will begin
operations in Mexico and Colombia.
2.3
ORGANIZATIONAL
PROFILE
T H RO U G H O U R P RO D U C T S A N D
SERVICES, WE SEEK TO ENCOURAGE SELF-
AWARENESS AND
PROMOTE WELL-
BEING WELL.
WE ASPIRE TO PROVIDE
CONSUMERS WITH NEW WAYS OF
ESTABLISHING RELATIONSHIPS WITH
THEMSELVES
, WITH THOSE AROUND
T H E M ,
A N D W I T H T H E WO R L D.
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10
SOCIAL
¾ Natura had 1.2 million consultants at the end of 2010. This represents a growth of 17% in Brazil
and of more than 20% in our international operations.
¾ The Natura Crer para Ver (Believing Is Seeing) program, which invests in education, received a
record R$10 million in funding, 168% more than in 2009. Funding is based on sales of specifi c
items in our portfolio. Revenues from sales of these items outside of Brazil totaled R$1.3 million.
¾ Although progress has been made, the quality of the service we provide to consultants has not yet
reached the level we desire. We continue working to reduce our nonservice rate (NSR), which
keeps track of products that are ordered by consultants but are unavailable.
¾ The survey on working climate generated a 73% overall favorable response rate from our
employees, one percentage point below 2009. Declines in ratings in our international operations
and among operational staff in Brazil contributed to this decrease.
¾ The loyalty of our consultants in Brazil rose from 17% to 21%, but declined among Natura Con-
sultant Advisers, from 37% to 32%.
ENVIRONMENTAL
¾ We extended the period for achieving a 33% reduction in our relative greenhouse gas emissions
to 2013. The original target date was 2011. By 2011, our reduction was 21%
¾ We launched the fi rst refi ll packaging made of polyethylene from sugar cane, a renewable source
of energy. In addition to being 100% recyclable, it reduces greenhouse gas emissions that cause
global warming by 58% compared with common plastic.
¾ We reduced relative water consumption by 10%, thanks to improvements that are intended
to guarantee effi cient use of resources.
¾ We created a methodology that measures the socioenvironmental impacts of our supply chain,
in an effort to improve the selection of our suppliers.
¾ We were charged by the Brazilian Institute of the Environment and Renewable Natural Resources
(Ibama) for failing to secure prior authorization to conduct research using inputs from Brazilian
biodiversity. Natura does not agree with the procedure and has formally contested these charges.
AWARDS AND RECOGNITIONS RECEIVED BY NATURA IN 2010
CUSTOMER SERVICE
Recognition
Organization
Category Awarded
Place
Top 25 Companies in Customer
Service in the Country
IBRC/Exame
Top Companies in Customer
Service in the country
2
nd
Cosmetics Industry Ranking
1
st
COMMUNICATION
Recognition
Organization
Category Awarded
Place
Comunique-se
Comunique-se Magazine
Corporate Communication Professional: Rodolfo
Guttilla, Director of Corporate Affairs and Government
Relations at Natura
1
st
FINANCE
Recognition
Organization
Category Awarded
Place
Top 100 Shares
Você S/A magazine
Top 100 Shares
7
th
As Melhores da Dinheiro
(The Best of Dinheiro)
Isto É Dinheiro magazine
Best Company in the Pharmaceutical, Hygiene and
Cleaning industry
1
st
The top 1000 companies with greatest revenues
- Argentina
Mercado magazine
General Ranking
120
th
The biggest companies in Latin America
America Económica magazine
General Ranking
92
nd
Agência Estado Distinguished Companies
Estado de S. Paulo
General ranking of the top 10 companies listed on
Bovespa
5
th
Valor 1000
Valor Econômico newspaper
Best Company in the Hygiene and Cosmetics industry
1
st
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11
INSTITUTIONAL
Recognition
Organization
Category Awarded
Place
Most Admired - Carta Capital
Carta Capital magazine
Most Admired Companies in Brazil
1
st
Most Admired Company in the Personal Hygiene
Industry
1
st
Most Admired Leader: Alessandro Carlucci
10
th
Biggest and Best
Exame
Best Company in the Consumer Goods Category
3
rd
Biggest and Best Ranking
68
th
"What is a Company Image Worth" Survey
Exame Magazine and
Reputation Institute - NY
The 10 Companies in Brazil
with the Best Reputation
5
th
Euromoney Ranking
Euromoney magazine
The Best Company in the Consumer Goods Category
in Latin America
1
st
Excellence in Corporate Management in Brazil
1
st
Image Ranking - Top 100 ­ Argentina
Imagen magazine
General Ranking
59
th
GRI and RCA Awards
The GRI Amsterdam Global
Conference
The Value Chain Award
1
st
The GRI Reader's Choice Award - Best Overall
5
th
The Bizz
World Confederation of
Businesses
Business Excellence
1
st
INTERNET
Recognition
Organization
Category Awarded
Place
Quality Standard in B2B
B2B magazine
Best Company in the Cosmetics, Hygiene and Cleaning
category
1st
Top of Mind Internet Award
UOL
We were recognized as the most remembered Brand
by consumers on the Internet in the Beauty Products
category
1
st
BRAND
Recognition
Organization
Category Awarded
Place
Brands for Decision Makers
Jornal do Comércio RS
Recognized as the Leading Brand in the Personal Beauty
and Hygiene industry and in Environmental Preservation
1
st
Most Valuable Brands in Brazil
Interbrand and Isto É Dinheiro
5
th
place in the ranking of Most Valuable Brands.
5
th
Apex Brazil Award
Apex
Best International Brand Management
1
st
IMPARAward ­ Preferred Brands and Regional
Affi nity Index
Impar Magazine/PR
2
nd
place in the preference of State of Paraná in the
Perfume and Cosmetics Segment
2
nd
Brazil Intangibles Award ­ PIB
Grupo Padrão and Consumidor
Moderno magazine
Pioneering in Intangibles
1
st
Brand Recall Award
Jornal do Commércio
Newspaper ­ Recife
Sustainability
1
st
Top 100 most valuable brands in Brazil
The Brander magazine/IAM
Most valuable brands in Brazil
48
th
Top of Mind
Folha de São Paulo
Most remembered brand in the category of
Environmental Preservation.
1
st
Top of Mind Successful Brands Minas Gerais
Mercado Comum magazine
(MG)
Most remembered brand in the category Leadership in
Women's Beauty Products.
1
st
Top of Mind Amanhã Magazine ­ Porto Alegre
Amanhã magazine
Most remembered brand in the categories Perfumes
and Sustainability
1
st
Top Vale
Vale Paraibano newspaper
Category Cosmetics & Environment
1
st
World's Hottest Brands Advertising Age Brasil
Advertising Age
Natura was recognized as a regional brand - Brazil South
America
1
st
Trusted Brands
Readers' Digest
Voted the most socially responsible company, Best Brand
in the category "skin creams". In addition, the CEO
Alessandro Carlucci was named "Executive of the Year".
1
st
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12
MARKETING, PRODUCT AND PACKAGING
Recognition
Organization
Category Awarded
Place
ABRE Design and Packaging
Brazilian Packaging Association
Best Packaging for Cosmetics and Personal Care - New
Natura Chronos Line
1st
Módulo Marketing - Best Communication Strategy Açaí
Harvest 2009
1st
Atualidade Cosmética
Atualidade Cosmética magazine
and J.R. Paula Jr. Design
Chronos Facial Treatment
1st
Latin American Men's Perfume: Essencial Exclusivo
1st
Elle Beauty Awards ­ Mexico
Expansión Group
Best spa product
1st
Nova Beleza Award
Nova magazine
Hair: Natura Fixplant Post Hair Straightening Anti-Frizz
Finishing Cream. Best Shampoo and Conditioner for
straight hair - Natura Smooth Plant
1st
Chronos Facial Exfoliant
1st
Double Action - Natura Una Lipstick
1st
Bar soap Natura Ekos - Cupuaçu Soap for slicing
1st
HUMAN RESOURCES
Recognition
Organization
Category Awarded
Place
HR Personality of the Year Award from ABTD/
PR
ABTD/PR
Marcelo Cardoso was recognized as HR Personality of
the Year
1st
Você HR Professional of the Year Award
Editora Abril
Marcelo Cardoso was recognized as professional of the
Year 2009 in the Hygiene and Cleaning Industry.
1st
HR of the Year: Marcelo Cardoso, Vice President of
Organizational Development and Sustainability
1st
Great Place to Work - Peru
Great Place to Work Institute and
El Comércio Newspaper
Best Companies to work for in Peru
33rd
Best companies to work for Mexico
Great Place to Work
One of the best companies to work for
11th
Company of the Dreams of Youngsters
DMRH Group and Cia de
Talentos
Awarded in the ranking of the top 10 companies in the
preference of young Brazilians
5th
SUSTAINABILITY
Recognition
Organization
Category Awarded
Place
2011 Global 100
Corporate Knights
100 Most Sustainable Corporations in the World
66th
ET Carbon Verifi cation Leaders Award ­
Environmental Investment Organization (EIO)
Carbon Disclosure Project
Global company for its strategies of control, verifi cation
and dissemination of carbon emissions
1st
Global 100 Most Sustainable Corporations in
the World
Corporate Knights Inc., Innovest
Strategic Value Advisors, Asset 4
and Bloomberg
The 100 most sustainable companies in the world
99th
Best Practices for Social Responsibility ­ Mexico
Centro Mexícano para La
Filantropia (Mexican Center for
Philanthropy)
Best practices 2010: Bond with the community
1st
AMCHAM Corporate Citizenship Award ­
Argentina
AMCHAM Argentina
Awarded in the category Sustainability-Oriented
Management
2nd
Top 100 most sustainable corporations
according to the media
Mídia B + Portal Imprensa
Overall Ranking
2nd
Health, Cosmetics and Cleaning - Pharmaceutical
Industry
1st
Ranking Fundación Chile: Companies Best
Prepared for Climate Change
Fundación Chile and Revista
Capital
Companies Best Prepared for Climate Change
3rd
RSE National Ranking - Chilean Socially
Responsible Companies
Fundación Prohumana and Que
Pasa magazine
Honorable Mention in Chilean Socially Responsible
Companies
16th
RSE Ranking - Argentina
Apertura magazine
Overall Ranking
16th
Road to Credibility
SustainAbility and FBDS
Best Sustainability Report
1st
Top Consumer Excellence in Consumer
Relations and Respect for the Environment - Rio
Grande do Sul
INEC - National Institute for
the Consumer and Citizen and
Consumer Test
Distinguished Commitment to Sustainable Consumption
1st
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13
INVESTOR RELATIONS
Recognition
Organization
Category Awarded
Place
Abrasca - Best Annual Report
Public Company
7th
Ibovespa Most Transparent Companies
BM&FBovespa
Ibovespa's Most Transparent Companies
Top Companies for Shareholders
Capital Aberto magazine
Top Companies for Shareholders
1st
IR Magazine BRazil Awards
IBRE ­ Instituto Brasileiro de
Economia and FGV ­ Fundação
Getúlio Vargas
Best Corporate Governance and Best Environmental
Sustainability
1st
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14
OUR MARKET
Once again, the cosmetics, fragrances, and personal hygiene sector continued growing at a record pace last
year, this time, however, amid a scenario of strong expansion of Brazilian economy, estimated at 7.5% of
GDP in 2010. With less strength, but with the same consistency, the rest of Latin America -- notably Chile
and Mexico -- also repor ted increases in economic activity.
The growth of the Latin American cosmetics market was double that of Europe and the United States over
the past decade. The region now represents nearly 15% of the global cosmetics market, revealing the scale
of oppor tunities in Latin America.
According to data published by the Brazilian Association of the Cosmetic, Toiletry, and Fragrance Industries
(Sipatesp/Abihpec), Brazil's target market registered a nominal growth of 13.5% in 2010. Our value pro-
position once again boosted our leadership by more than 1.1 percentage points and reached a 24% share
of our target market.
Year after year, the direct-sales industry continues to attract people. According to the Brazilian Association
of Direct Seles Companies (ABEVD), there are 2.7 million direct-sales representatives in Brazil. This repre-
sents a 12.2% increase over 2009.
OPERATIONS MAP
Mexico
France
Brazil
Colombia
Argentina
Chile
Peru
COMMERCIAL OPERATIONS
PLANTS
COMMERCIAL OFFICES
DISTRIBUTION CENTERS
NATURA HOUSES
RESEARCH AND TECHNOLOGY CENTERS
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15
CONSULTANTS AND (NCAs)
QUALITY OF RELATIONSHIPS
4.
2011 COMMITMENT:
Achieve an 18% loyalty rate with consultants.
ACHIEVED:
We achieved a 21% loyalty rate.
2011 COMMITMENT:
Record a 22% loyalty rate with consultants.
5.
2010 COMMITMENT:
Achieve a 40% loyalty rate with NCAs.
NOT ACHIEVED:
The loyalty rate with NCAs was 32%.
2011 COMMITMENT:
Achieve a 37% loyalty rate among NCAs.
EDUCATION
6.
2010 COMMITMENT:
Register the participation of 517,400 consultants in training programs.
ACHIEVED:
We had the participation of 540,000 consultants in our training programs.
2011 COMMITMENT:
Achieve the participation of 540,000 consultants in our training programs.
7.
2010 COMMITMENT:
Raise R$6 million from the sale of products of the Crer para Ver (Believing Is Seeing) line.
ACHIEVED:
We achieved record revenues of R$10 million.
2011 COMMITMENT:
Record R$13 million from the sale of products of the Crer para Ver line.
EMPLOYEES
QUALITY OF RELATIONSHIPS
1.
2010 COMMITMENT:
Achieve a 76%
1
favorable response rate in the Natura climate survey.
NOT ACHIEVED:
Natura achieved a 73% favorable response rate.
2011 COMMITMENT:
Achieve a 76% favorable response rate in the Natura climate survey.
2011 COMMITMENT:
Achieve a 32% loyalty rate with Natura employees.
1. Due to a calculation error, we recorded a target in the previous report a target of 77%.
EDUCATION
2.
2010 COMMITMENT:
Achieve an average of 100 hours of training per employee in Brazil.
NOT ACHIEVED:
We recorded an average of 90 hours of training per employee in the Brazilian operations.
2011 COMMITMENT: Record an average of 100 hours of training per employee in Brazil.
2011 COMMITMENT:
Record an average of 88 hours of training in Natura's overall average, including international operations.
2.4
OUR
COMMITMENTS
8
COMMITMENTS
ACHIEVED
2
COMMITMENTS
UNDER WAY
7
COMMITMENTS
NOT ACHIEVED
SUPPLIER COMMUNITIES
QUALITY OF RELATIONSHIPS
3.
2010 COMMITMENT:
Increase resources allocated to supplier communities by 44% (made up of supply, distribution of
benefi ts, funding, and support, use of image, training, certifi cation, studies, and assistance).
ACHIEVED:
We increased resources by 57% compared to 2009.
2011 COMMITMENT:
Increase resources allocated to communities by 25% from 2010.
2011 COMMITMENT:
Record an average grade of 3.7 in the BioQlicar (Quality, Logistics, Innovation, Competitiveness, Ser-
vice, and Relationship) assessment.
2011 COMMITMENT:
Achieve a 44% loyalty rate with supplier communities.
O V E R T H E Y E A R S , W E H A V E
D E M O N S T R AT E D A C O M M I T M E N T TO
S T R E N G T H E N I N G O U R P E R F O R M A N C E
INDIC ATORS. THESE INDIC ATORS REFLECT
O U R W I L L I N G N E S S TO I N C O R P O R AT E
I M P ROV E D M A N AG E M E N T O F O U R
PRIORITY SUSTAINABILITY TOPICS INTO
OUR STRATEGIC PLANNING
. TO L E A R N
MORE ABOUT THE TARGETS OUTLINED IN
THIS TABLE, PLEASE REFER TO THE CHAPTERS
"WHO WE WORK WITH" AND "WHAT WE
AIM FOR."
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16
ENVIRONMENT
GREENHOUSE GASES (GHGs)
13.
2010 COMMITMENT:
Reduce our relative emissions of GHGs by 33% by 2011, based on the inventory conducted in 2006.
COMMITMENT UNDERWAY:
As of 2010, we achieved a 21% reduction.
TARGET:
The estimated 33% reduction was postponed to 2013.
14.
2010 COMMITMENT:
Reduce our emissions of GHGs related to scope 1 and 2 of GHG Protocol by 10% by 2012, based
on 2008 emissions.
COMMITMENT UNDERWAY:
Accumulated variation from 2008 to 2010 indicated an increase of 38%.
TARGET:
Reduce our emissions of GHGs related to scope 1 and 2 of GHG Protocol by 10% by 2012, based on 2008 emissions.
PRODUCT IMPACT
15.
2010 COMMITMENT:
Reach a rate of 18.5% on the sale of refi lls on items billed in Brazil.
NOT ACHIEVED:
We achieved a 16.9% rate of refi ll sales, which represents a lower percentage compared to 2009.
16.
2010 COMMITMENT:
Reduce the total weight of waste per unit billed by 6%.
NOT ACHIEVED:
Our index increased by 8% to 25.7 grams per unit billed.
2011 COMMITMENT:
Reduce the total weight of waste per unit billed by 3%.
17.
2010 COMMITMENT:
Reduce water consumption per unit billed by 10%.
ACHIEVED:
Consumption was reduced by 10%.
2011 COMMITMENT:
Reduce total water consumption per unit billed by 3%.
SUPPLIERS
QUALITY OF RELATIONSHIPS
12.
2010 COMMITMENT:
Achieve a satisfaction rate of 85% with the company.
NOT ACHIEVED: We recorded a rate of 81%, the same level achieved in 2009.
2011 COMMITMENT:
Maintain a 28% loyalty rate with Natura.
Notes:
1.In order to have a more thorough picture of the quality of our relationship with our stakeholders, we have also adopted a loyalty index
that includes three aspects: satisfaction, intention to continue the relationship with Natura, and the recommendation of our brand, unlike the
satisfaction survey, which considers only one of these aspects. Concerning our employees, in addition to the loyalty index, we also conduct the
climate survey, which assesses more specifi c issues related to the work environment, careers and job satisfaction.
2. The above indicators for quality of relations have an error margin corresponding to a 95% confi dence interval.
3. Except for the favorable responses in the Climate Survey, the commitments for quality of relationships refer to the Brazilian operations.
CONSUMERS
PRODUCT IMPACT
9.
2010 COMMITMENT:
Eliminate parabens from our product portfolio by December 1, 2010.
NOT ACHIEVED:
Due to technical diffi culties related to the process, system, and formulation, we were not able to ex-
clude parabens as an ingredient in the formulation of all products in this portfolio, including in our international operations.
2011 COMMITMENT:
Eliminate this ingredient completely from our portfolio by June 30, 2011.
10.
2010 COMMITMENT:
Eliminate phthalates from our portfolio as an ingredient in product formulation by July 1, 2010.
ACHIEVED:
Natura excluded phthalates as an ingredient in the formulation of all products in its portfolio.
QUALITY OF RELATIONSHIPS
11.
2010 COMMITMENT:
Maintain the consumer loyalty rate at 46%.
ACHIEVED:
We achieved a 53% loyalty rate among consumers.
2011 COMMITMENT:
Maintain a 54% loyalty rate with Brazilian consumers.
8.
2010 COMMITMENT:
Have 100,000 consultants engaged in the Natura Movement.
ACHIEVED:
113,100 consultants engaged in the Natura Movement.
2011 COMMITMENT:
Reach 135,000 consultants engaged in the Natura Movement.
2011 COMMITMENT:
Reach a 13% engagement rate among consultants in the Crer para Ver program.
2. target refers to Brazilian operations
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17
Our Board of Directors comprises six members, including two founding partners, Antonio Luiz da Cunha Seabra
and Pedro Luiz Barreiros Passos. The third founding partner, Guilherme Peirão Leal, resigned in 2010 to run as
the Green Party vice presidential candidate. Of the other four members of the Board, three are independent.
Board members are selected for their qualifi cations, knowledge on sustainability, experience in executive posi-
tions, and the absence of confl icts of interest. Board members' compensation includes a fi xed monthly compo-
nent and a variable annual component linked to Natura's economic, fi nancial, social, and environmental results.
We continually improve and reinforce internal controls and processes, which has enabled Natura to achieve SOX
certifi cation for accounting controls and fi nancial reporting. SOX certifi cation is based on criteria in the 2002 U.S.
Sarbanes-Oxley Act and is required of companies listed on the New York Stock Exchange. Natura is among the
fi rst Brazilian companies to obtain SOX certifi cation, though this is not a Brazilian legal requirement. We believe
that an effi cient control environment produces transparency in the performance of our operations, ensures that
our fi nancial statements accurately present our business processes, and provides security for our stakeholders.
In an effort to acquaint Board members with the customs of the various regions where we operate, the Board
has scheduled meetings outside the company's head offi ce. Of the six regular meetings held last year, one took
place in Rio de Janeiro in April, and another was held in Mexico in September. We will maintain this practice in
2011, holding one meeting annually in a Brazilian regional offi ce and another meeting each year in one of the
countries in which we do business.
The Board of Directors is supported by four committees: Strategy; Corporate Governance; People and Or-
ganizational Development; and Audit, Risk Management, and Finance. The latter was reorganized in December
2010, and now only external and independent members may serve on this committee. This reorganization was
intended to improve internal controls. The Audit, Risk Management, and Finance Committee is responsible for
evaluating accounting, taxes, corporate affairs, and new investments. New members who took offi ce in February
2011 receive technical support from a group of external specialists and Natura executives.
In 2010, we sought to expand the participation of individual shareholders at the Annual Shareholders' Meeting.
We gathered 200 investors at our Cajamar unit, and they were able to follow -- in real time -- the sharehol-
ders' meeting taking place at Natura's head offi ce in Itapecerica da Serra. Through this event, investors were able
to come into closer contact with our company, its controlling shareholders, and executives (learn more on page
71 ­ Shareholders).
Since 2007, Natura has been a member of the Company Circle of Latin American Corporate Governance,
which consists of a group of Latin American corporations selected by the International Financial Corporation of
the World Bank based on the quality of their governance practices.
BOARD OF DIRECTORS
PEDRO LUIZ BARREIROS PASSOS
Co-chairman of the Board of Directors in offi ce
ANTONIO LUIZ DA CUNHA SEABRA
Co-chairman of the Board of Directors
EDSON VAZ MUSA
Member
JOSÉ GUIMARÃES MONFORTE
Member; President of the Audit, Risk Management, and Finance Committee
JULIO MOURA NETO
Member; President of the Strategy Committee
LUIZ ERNESTO GEMIGNANI
Member; President of the People and Organizational Development Committee
2.5
GOVERNANCE
NATURA CORPORATE GOVERNANCE
IS PERMANENTLY ENHANCED.
W E H AV E B E E N S I G N I F I C A N T LY
FOCUSED ON THIS OBJECTIVE SINCE
2 0 0 4 , W H E N N AT U R A W E N T
PUBLIC
AND LISTED ITS SHARES ON
THE SÃO PAULO STOCK EXCHANGE.
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18
PRESIDENTIAL ELECTIONS
The decision of one of the co-chairmen of our Board of Directors, Guilherme Leal, to par ticipate in the
2010 presidential elections was one of Natura's key governance challenges for the year. Guilherme Leal
resigned from Natura shor tly after the Green Par ty announced him as its candidate for vice president.
Throughout this process, we emphasized transparency, clearly separating Natura's business operations
from an individual's decision to run for public offi ce.
Natura's governance structure ensured that the company took all steps required to insulate corporate
governance from political infl uence. Our campaign donation policy, in force since 2006, forbids donations to
candidates or political par ties -- a policy that gained greater signifi cance last year. We also set up a special
committee to monitor media exposure of Natura and its founding par tner during the elections.
EVALUATION OF THE BOARD OF DIRECTORS
In 2010, we conducted two evaluations of the members of our Board of Directors and the members of
the committees advising the Board: one self-evaluation and one external evaluation, which enabled us to
identify oppor tunities to improve our governance.
The self-evaluation was carried out by the Governance Committee, which conducted a series of indi-
vidual inter views to capture the impressions of the members concerning the dynamics of the Board and
its autonomy to make decisions, among other issues. The main findings and conclusions were compiled
and presented to the Board itself. Among the progress identified in this self-evaluation are: the resump-
tion of the executive sessions and the improvements in the working agendas.
The external evaluation, conducted by a consulting firm, involved an analysis of the size and composition
of the Board and its advisor y committees, the degree of empowerment, the working climate and the
value added by its members, among other matters. Individual inter views were organized independently
by the consulting firm, based on a comparison of Natura's initiatives with the best governance practices
identified internationally.
The aspects that received the highest marks in the external evaluation refer to the good working climate,
the freedom to address issues and to express opinions, and the clarity of the information submitted to
the Board for consideration. Never theless, it was also found that the criteria for the process of evaluat-
ing the Board and its committees should be better disseminated to the company's senior management.
Fur thermore, it was discovered that while the general information is adequately transmitted, the flow
could be improved to give the members more time to analyze the issues. The changes resulting from this
evaluation will be implemented throughout 2011.
COMMITTEES SUPPORTING THE BOARD OF DIRECTORS
AUDIT, RISK MANAGEMENT AND FINANCE
Since early 2011, it has been formed by the independent Board members José Guimarães Monfor te,
Edson Vaz Musa and Luiz Ernesto Gemignani, and by the external specialists Gilber to Mifano and Taiki
Hirashima, the Senior Vice President of Financial, Legal and Information Technology, Affairs Rober to
Pedote, the Corporate Governance Director, Moacir Salzstein, and the Risk Management and Internal
Audit Manager, Mercedes Stinco, who ser ves as the committee secretar y. It meets four times a year
and is primarily responsible for advising the Board of Directors in its financial and risk analysis and in its
relationship with external auditors.
STRATEGY
This committee is made up of three Board members ­ Pedro Luiz Barreiros Passos, Julio Moura Neto
and Edson Vaz Musa ­ in addition to the CEO Alessandro Carlucci. They analyze strategic issues, prepar-
ing guidelines and recommendations for the Board of Directors. The committee monitors the strategic
projects in progress, defined in Natura's Strategic Planning, and discusses the company's long-term ac-
tions. It meets on a monthly basis, except in Januar y and June.
CORPORATE GOVERNANCE
Among the functions of this committee is to discuss improvements and progress in governance and in
running the business. It is made up of three Board members: Pedro Luiz Barreiros Passos, José Guimarães
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19
Monfor te and Júlio Moura Neto, in addition to Corporate Governance Director, Moacir Salzstein, who
ser ves as the committee secretar y. The meetings are held on a quar terly basis, although the committee
convened five times in 2010, once in an extraordinar y meeting to discuss the changes to the Audit, Risk
Management and Finance Committee. The Corporate Governance committee was also responsible for
the self-evaluation process of the Board of Directors and its advisor y committees, as well as for oversee-
ing the external evaluation process that occurred in the last quar ter of 2010.
PEOPLE AND ORGANIZATIONAL DEVELOPMENT
This committee is comprised of three Board members ­ Pedro Luiz Barreiros Passos, Edson Vaz Musa
and Luiz Ernesto Gemignani ­ and Fátima Raimondi, an external member who joined in 2010, as well as
the CEO Alessandro Carlucci and the Senior Vice President of Organizational Development and Sustain-
ability, Marcelo Cardoso. The meetings are held on a monthly basis, except in Januar y and July. The com-
mittee addresses topics such as remuneration, leadership projects, succession, training and topics of in-
terest to the Human Resources Depar tment, the Culture Program and the Natura Management System.
EXECUTIVE GOVERNANCE
Natura's main executive body, the Executive Committee (Comex), is made up of Natura's Chief Executive
Offi cer, Alessandro Carlucci, and fi ve deputy chairmen. Comex's priorities are management of the business
and assessment of economic, social, and environmental results. Comex also monitors strategic planning
and our strategic projects.
The structure of Comex was consolidated in 2010 to enable a global outlook on business. Comex is sup-
por ted by eight committees that discuss thematic topics and represent the executive body. The original
six committees suppor ted Comex on issues related to brand, sustainability, ethics, commercial innovation,
products, and processes. Two new committees, the Customer Committee and the Ideas and Concepts
Committee, were established in early 2011.
NATURA EXECUTIVE COMMITTEE
ALESSANDRO CARLUCCI
Chief Executive Offi cer
JOÃO PAULO FERREIRA
Senior Vice President of Supply Chain
JOSÉ VICENTE MARINO
Senior Vice President of Sales and Marketing
MARCELO CARDOSO
Senior Vice President, Organizational Development and Sustainability
ROBERTO PEDOTE
Senior Vice President of Finance, Legal Affairs, and Information Technology
TELMA SINICIO
Senior Vice President of Innovation
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20
NATURA EXECUTIVE BOARD IN 2010
ALEXANDRE CRESCENZI
Commercial Vice President ­ Brazil
ALESSANDRA DA COSTA
Human Resources Vice President ­ Brazil
ANA LUIZA MACHADO ALVES
Brand Vice President
ANGEL MEDEIROS
Logistics Innovation Vice President
ARMANDO MARCHESAN NETO
Customer Services Vice President ­ Brazil
ARNÔ ARAÚJO
Commercial Vice President ­ Mexico
AXCEL MORICZ
General Vice President ­ Colombia
CECÍLIA GOYA MEADE
General Vice President ­ Mexico
DANIEL GONZAGA
General Vice President ­ Peru
DANIEL LEVY
New Business Vice President
DENISE ALVES
Culture Vice President
DENISE FIGUEIREDO
Business Unit Vice President
DIEGO DE LEONE
Business Unit Vice President
ERASMO TOLEDO
Commercial Development and Innovation Vice President
FLÁVIO PESIGUELO
Organizational Development and
Sustainability Vice President ­ International Operations
GILBERTO XANDÓ
Business Vice President ­ Brazil
HERIOVALDO SILVA
Commercial Vice President ­ International Operations
JORGE ROSOLINO
Financial Vice President ­ Brazil
JOSELENA PERESSINOTO ROMERO
Product Availability Vice President
JOÃO CARLOS MOCELIN
Industrial Vice President
JOÃO AUGUSTO PEDREIRA
Business Unit Vice President
Lucilene Prado
Legal Vice President
LUIS BUENO
Regional Unit Vice President
LUIZ CARLOS LIMA
Corporate Finance Vice President
MARCEL GOYA
Finance Vice President ­ International Operations
MARCOS PELAEZ
Information Technology Vice President
MARCUS OLIVER RISSEL
Regional Unit Vice President
MOACIR SALZSTEIN
Corporate Governance Vice President
MÔNICA GREGORI
Communication and Marketing Vice President
NESTOR FELPI
Customer Services Vice President ­ International Operations
PEDRO GONZALES
General Vice President ­ Argentina
PEDRO VILLARES
Superintendent of Natura Institute
RENATO ABRAMOVICH
Regional Unit Vice President
RICARDO FAUCON
Supply Vice President
ROBERT CLAUS CHATWIN
Business Development Vice President
RODOLFO WITZIG GUTTILLA
Corporate Affairs and Government Relations Vice President
ROGÉRIO CHER
Corporate Human Resources Vice President
TATIANA PIGNATARI
Business Unit Vice President
TOMAS JANS
Business Vice President ­ International Operations
VICTOR FERNANDES
Ideas, Concepts, Science and Technology Vice President
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21
COMMITTEES SUPPORTING COMEX
CUSTOMERS
Created in January 2011, the main function of this committee is to monitor the quality of the services provided
by Natura to its fi nal consumers and consultants. It is chaired by the Senior Vice President of Operations and
Logistics, João Paulo Ferreira, and another Comex representative, the Senior Vice President of Innovation, Telma
Sinicio, also serves on the committee.
ETHICS
Monitors issues related to the Natura Relationship Principles and makes decisions on cases of violations of these
principles. It is headed up by the Senior Vice President of Financial, Legal and Information Technology Affairs Ro-
berto Pedote, and other Comex members include the CEO Alessandro Carlucci and the Senior Vice President
of Organizational Development and Sustainability, Marcelo Cardoso.
IDEAS AND CONCEPTS
Chaired by the CEO Alessandro Carlucci, this committee was created in March 2011 to defi ne the long-term
innovative ideas and concepts for the company. Also serving on this committee are Senior Vice President of
Innovation, Telma Sinicio, and the shareholders and members of the Board of Directors Pedro Luiz Barreiros
Passos and Antonio Luiz da Cunha Seabra.
COMMERCIAL INNOVATION
Its primary function is to analyze the projects that bring commercial innovation to the business. This committee
is chaired by the Senior Vice President of Business, José Vicente Marino, while also serving is the Senior Vice
President of Finance, Legal Affairs and Information Technology, Roberto Pedote.
BRAND
Responsible for management of the Natura brand and analyzing topics such as brand architecture, assessing the
Natura language and reviewing its main developments. It is chaired by the CEO Alessandro Carlucci, with the
Senior Vice President of Business, José Vicente Marino, and the Senior Vice President of Organizational Develop-
ment and Sustainability, Marcelo Cardoso, also serving.
PROCESSES
Monitors the implementation of the Management by Process model, defi ning focuses of attention and strategies.
It is chaired by the Senior Vice President of Organizational Development and Sustainability, Marcelo Cardoso.
The Senior Vice President of Operations and Logistics, João Paulo Ferreira, also represents Comex on this com-
mittee.
PRODUCTS
Oversees the steps and processes involved in the approval of new products created by Natura. It is chaired by
the Senior Vice President of Innovation, Telma Sinicio, while also serving is the CEO Alessandro Carlucci and the
Senior Vice President of Business, José Vicente Marino.
SUSTAINABILITY
Monitors the management of the sustainability topics associated with the company's Integrated Planning meth-
odology, namely: monitoring the Socio-Environmental Budget (targets and commitments assumed by Natura
in these areas) and defi ning the Materiality Matrix. Furthermore, it also oversees the management of strategic
projects related to sustainability, such as Carbon Neutral and the Solid Waste project. The committee is also
responsible for evaluating positions and strategies concerning the company's vision of sustainability and Quality
of Relationships. It is chaired by the Senior Vice President of Organizational Development and Sustainability, Mar-
celo Cardoso, with the participation of the Senior Vice Presidents of Financial, Legal and Information Technology
Affairs, Roberto Pedote, and of Operations and Logistics, João Paulo Ferreira.
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22
RISK MANAGEMENT
Natura's risk management strategy involves analysis of two primary risks to our business: strategic risks,
which are external threats to the continuity of our business; and operational risks. Responsible managers
and their teams evaluate internal processes to identify potential operational risks. In both cases, the analysis
considers potential economic, social, and environmental outcomes.
Natura's risk management strategy identifi es processes and control mechanisms to address Natura's pri-
mary strategic and operational risks. These include physical risks, but not risks related to climate change.
Our actions do, however, evaluate regulatory risks and identify oppor tunities to offer new technologies
and products that address the challenges posed by climate change.
An impor tant development in 2010 was the consolidation of Natura's strategic risks map, which was
incorporated into our strategic planning. This map is now monitored by all committees that suppor t the
corporate governance and executive structures.
As par t of a more comprehensive contingency plan, we have established a crisis prevention system based
on the most relevant scenarios experienced by the company. This initiative has been developed by Natura
since 2009.
As par t of the review of our internal control processes, we redefi ned the user profi les for accessing
Natura information and data, thereby streamlining our fraud prevention management. We also reviewed
our Relationship Principles, including more details and clarifi cations about two specifi c principles for
our employees and in-house outsourced workers, on confl icts of interest and personal favoritism (read
more on page 45 ­ Employees).
Since 2009, Natura has been conducting an Internal Controls Evaluation to identify the main operational
risks and the controls of all its 132 processes. Last year, the evaluation involved the application of 212
questionnaires and the mobilization of 219 managers and directors. In addition to forwarding the most
impor tant identifi ed risks to Strategic Planning, they were also incorporated into the Natura's process
planning. We also developed specifi c action plans to mitigate the higher risks.
INTERNAL AUDIT
Made up of 16 professionals, Natura's internal audit team repor ts to the Audit, Risk Management, and Fi-
nance Committee. This structure guarantees the independence of auditors, who are free from interference
from other areas of the company. In 2010, the team performed 33 audits of Natura's technical capabilities,
management and operational processes, and international operations. This number far exceeded the 13
audits conducted in 2009.
Internal audits include a series of tests and procedures to evaluate the control environment and evaluate
the potential for fraud and corruption. Of the 33 audits performed in 2010, 11 cases required investigation.
Five of these cases ultimately were found to involve irregularities, and those involving misconduct resulted
in the dismissal of six employees. Each of these cases led Natura to strengthen its control mechanisms.
SENIOR MANAGEMENT COMPENSATION
Natura's executive compensation package intends to stimulate entrepreneurship and promote executive enga-
gement, and is, in part, linked to the company's growth and capital appreciation. Our profi t-sharing system for
executives is based on multiples of base salary, in accordance with their duties. When this model was reviewed
in 2009, the variable pay component was expanded, thus enabling the company to be more competitive.
The remuneration received by the chief executive offi cer, vice presidents, offi cers and senior managers is
consistently linked to the commitment to our long-term project by means of the Stock Option or Share
Subscription Plan.
The Share Purchase or Subscription Option Program has stipulated, since 2009, that adherence to the
program is bound by the agreement of the executive to invest at least 50% of the amount received as
profi t sharing in the acquisition of Natura shares. The shares may only be exercised after a vesting period
of three years for 50% of the shares, and of four years for 100% of the shares. In either case, there is an
eight year validity, and the shares are not available for sale until the end of the third year.
In 2008, the Board of Directors established an annual limit of 0.6% of total shares and a maximum limit
of 3% for the program. The model established in 2009, more aggressive than the previous year, set an
annual limit of 0.75% and a maximum of 4% . In December 2010, the amount of options held by execu-
tives represented nearly 1.59% of Natura's shares, compared to 1.29% in December 2009. The number
of Natura shares on December 31, 2010, totaled 430,881,416.
Since 2002, we have granted 19,638,804 options, of which 23% have been cancelled due to the resigna-
tion of executives.
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23
APPRECIATION OF THE PLANS
Amounts in Thousands of R$
Plan
Restated
Amount of
the Plan
Real Discount
Obtained in
the Year
Discount
Obtained in
the Year
1
Potential
Discount of
the Mature
Balance
2
Potential
Discount of the
Non-Mature
Balance
2
Status of
the Plan
2002
R$ 6.85
42,412.4
52,216.3
0.0
0.0
Expired
2003
R$ 3.84
66,917.3
79,701.6
0.0
0.0
Expired
2004
R$ 9.44
26,152.8
29,308.9
0.0
0.0
Expired
2005
R$ 20.25
6,712.1
7,032.5
2,302.6
0.0
100% Mature
2006
R$ 30.17
2,664.6
2,739.4
6,930.7
0.0
100% Mature
2007
R$ 28.53
1,703.9
1,742.2
4,573.2
6,712.4
50% Mature
2008
R$ 22.16
0.0
0.0
0.0
26,700.5
Não Mature
2009
R$ 24.17
0.0
0.0
0.0
56,909.6
Não Mature
2010
R$ 35.46
0.0
0.0
0.0
25,706.1
Não Mature
Total
146,563.1
172,740.9
13,806.6
116,028.6
1. Accumulated amounts, adjusted by the brazilian IPCA (Extended National Consumer Price Index) until December 2010.
2. Price of Natura shares (NATU3) on December 30, 2010: R$ 47.83.
50% Mature
100% Mature
Validity
10-apr-05
10-apr-06
10-apr-08
10-apr-06
10-apr-07
10-apr-09
10-apr-07
10-apr-08
10-apr-10
16-mar-08
16-mar-09
16-mar-11
29-mar-09
29-mar-10
29-mar-12
25-apr-10
25-apr-11
25-apr-13
22-apr-11
22-apr-12
22-apr-14
22-apr-12
22-apr-13
22-apr-17
19-mar-13
19-mar-14
19-mar-18
VARIABLE REMUNERATION
Variable Remuneration is intended to recognize and reward the executives of Natura for their performance and
results over the year, to guarantee a competitive compensation package and to align the interests of executives
and shareholders. The total amount of annual profi t sharing, the basis of the long-term compensation program, is
limited to 10% of the company's net profi t. With these limits, Natura has a consistent and well-controlled system
that avoids distortions between remuneration and the company performance.
The variable component, whether short-term or long-term gains, allocates a larger amount for senior executives
than for other employees. In addition to well-defi ned limits, all variable remuneration is tied to the effective at-
tainment of targets and to the surpassing of minimum growth expectations established annually by management.
Natura's performance, therefore, must reach a minimum set for this remuneration to be paid.
NUMBER OF OPTIONS
Plan
Granted
Exercised
Mature Balance
Non-Mature Balance
Cancelled
2002
3,533,610
2,712,645
0
0
820,965
23%
2003
3,969,220
3,404,495
0
0
564,725
14%
2004
1,901,460
1,606,063
0
0
295,397
16%
2005
1,120,760
567,874
83,48
0
469,406
42%
2006
1,153,756
230,227
392,492
0
531,037
46%
2007
1,305,508
110,852
236,987
347,839
609,831
47%
2008
1,800,010
0
0
1,039,961
760,049
42%
2009
2,742,128
0
0
2,404,809
337,319
12%
2010
2,112,352
0
0
2,077,658
34,694
2%
Total
19,638,804
8,632,156
712,959
5,870,267
4,423,423
23%
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24
2010
Average number
of employees
Total salary
(in millions)
1
Total variable
(in millions)
2
Stock Options Plan
for 2011 (in number
of options)
3
Board of Directors
6
2.64
2.08
-
Executive Committee
6
5.25
6.28
-
Senior Management
and Offi cers
86
27.04
17.83
-
Middle Management
336
42.17
18.14
-
Administrative Staff
1,255
63.63
6.29
-
Sales Force
905
44.60
43.19
-
Operational Staff
2,542
41.89
10.33
-
Total 2010
5,135
227.23
104.13
-
1. Total Salary: Includes annual average base pay over 12 months (net) plus overtime in millions.
2. Total Variable: Bonuses, Profi t Sharing and Sales Prizes paid over the year.
3. Stock Options: Plan for 2011 will be approved in March 2011.
1. Total Salary: Includes annual average base pay over 12 months (net) plus overtime in millions.
2. Total Variable: Total Salary plus Bonuses, Profi t Sharing and Sales Prizes. Profi t Sharing refers to the stated year, paid in the subsequent year.
3. The number of options refers to the plan of the current year.
4. Employee numbers revised after one member of the Executive Committee was mistakenly counted as a member of the Board of Directors
in the 2009 report.
2009
Average number
of employees
Total salary
(in millions)
1
Total variable
(in millions)
2
Stock Options
Plan for 2010 (in
number of options)
3
Board of Directors
4
7
3.49
1.33
-
Executive Committee
4
5
3.96
7.78
683,656
Senior Management
and Offi cers
74
19.77
20.17
1,347,440
Middle Management
283
32.86
20.50
0
Administrative Staff
903
44.63
5.59
0
Sales Force
981
43.76
46.25
0
Operational Staff
2,239
37.09
5.59
0
Total 2009
4,492
185.56
107.21
2,031,095
2008
Average number
of employees
Total salary
(in millions)
1
Total variable
(in millions)
2
Stock Options
Plan for 2009 (in
number of options)
4
Board of Directors
5
7
2.64
1.33
0
Executive Committee
5
6
5.45
7.29
694,726
Senior Management
and Offi cers
81
24.31
21.22
2,040,931
Middle Management
302
39.85
22.57
0
Administrative Staff
971
53.54
8.67
0
Sales Force
1,097
43.81
40.06
0
Operational Staff
2,132
37.89
8.63
0
Total 2009
4,597
207.50
109.77
2,735,657
The criteria determining the variable component take into account three sets of performance indicators, all
derived from the Strategic Planning. In 2010, the following indicators were used:
¾ Economic ­ Consolidated Ebitda, Brazilian and international operations;
¾ Social ­ Organizational climate survey in the Brazilian and international operations and the consultant
loyalty index;
¾ Environmental ­ Carbon emissions;
¾ Other ­ Non-Service Rate (NSR), which shows the percentage of products that are unavailable when
orders are placed by our consultants, in the Brazilian and international operations.
See below the remuneration amounts of the main staff groups:
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25
In order to organize the information fl ow across all Natura's processes and guarantee the alignment of deci-
sions with our principles, the Natura Management System has been under development since 2008, when
the model incorporated our Regional Units (in all Brazilian regions and international operations) and Business
Units (by product segment).
The System is designed to reproduce our method of operating wherever we are by means of well-defi ned
processes and routines, enhancing a non-centralized and integrated management model that allows greater
independence for managers and greater proximity to consultants and consumers. The expansion of our in-
ternational actions allows greater importance on the new model.
In the coming years, our challenge will be to have this integrated management system become understood
and adopted by all Natura employees, becoming an instrinsic way of how Natura routinely does business.
To assist with this challenge, we have identifi ed 12 interrelated priority components that are critical to the
success of the Natura Management System: leadership, strategic planning, relationships, sustainability, learning,
individuals, processes, brand, culture, customers, innovation, and triple bottom-line results.
The component of this new management system that is in the most advanced stage of completion is the
Management by Process model, which was established with the creation of our Business Units and Regional
Units. In 2010, we fully integrated 22 key processes in Natura. To guarantee proper implementation, we stage
assessments and process certifi cation. We have created indicators for each process and have designed six
new processes to be certifi ed in 2011. This has created a more effective structure for monitoring of Natura's
18 strategic projects. They are all directly attached to our growth proposal for the coming years and they
have been approved by the Board of Directors. They are also regularly monitored by senior management.
2.6
NATURA
MANAGEMENT SYSTEM
OUR ACTIONS ARE INTENDED TO
E N G A G E A N D I N S P I R E O U R
EMPLOYEES
, SUPPORTING THEM
IN CLEARLY DEFINED PROCESSES,
ENABLING THE IMPLEMENTATION OF
THE COMPANY'S STRATEGY AND
PLANS, AND GUARANTEEING THE
EXPANSION OF OUR DIFFERENTIATED
BUSINESS MODEL.
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26
As a result of these intense structural developments, Natura is poised to take advantage of opportunities in
the cosmetics, fragrances and personal care market in Brazil and Latin America. We are strengthening our
competitive advantage at a time when our region enjoys a positive outlook. The expansion of manufacturing, the
participation of women in the job market, falling unemployment, and rising family incomes have led to prolonged
periods of economic growth in several Latin American countries.
We understand that the attractiveness of our market results in increased competition. We believe, however, that
the Brazilian market still offers many growth opportunities through the regionalization of our operations and by
fi lling the space where our brand is not yet present. Our international operations are becoming stronger year
after year. We now have the infrastructure, market knowledge, leadership, products, sales channels, and relation-
ship networks needed to increase our share in these markets.
We are entering a cycle in which innovation is increasingly relevant in all aspects of our business -- not only in
product development, but also in our sales model, in building relationships, and in fi nding solutions to social and
environmental challenges. Inspired in our culture, we intend to deepen the search for solutions related to the
performance of our role as change agents in society.
STRUCTURAL CHANGES
In 2010, we initiated international production through partnerships. The shift from an exportation model to a
local production model will benefi t society and reduce environmental impacts, in a combination that enables the
construction of a sustainable development model.
Operations in Argentina started in the second half of 2010 with perfume-bottling activities. In 2011, we will initi-
ate operations in Mexico and Colombia. Within three years, we intend for 50% of revenues from our interna-
tional operations in Latin America to come from products manufactured outside Brazil. When fully deployed by
2013, this new manufacturing structure will eliminate 70% of greenhouse gas emissions that result from supply
logistics in these countries.
3.
WHAT WE AIM FOR
3.1
OUTLOOK
AND STRATEGY
WE BELIEVE IN
THE TRANSFORMATIVE POWER
O F P E O P L E , C O M P A N I E S ,
NETWORKS, AND COMMUNITIES,
A N D W E WA N T TO P L AY A
L E A D I N G R O L E I N T H E
EVOLUTION
OF
OUR SOCIET Y
.
OVER THE PAST THREE YEARS, WE
HAVE COMBINED
SIGNIFICANT
B U S I N E S S G R OW T H W I T H
CHANGES IN OUR MANAGEMENT
AND INFR ASTRUC TURE MODEL
AND IN OUR RELATIONSHIPS
W ITH S TA K E H O L D E R S .
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27
We restructured some executive positions to monitor operations more closely, giving us the agility required
for superior management. We merged our Business and Internationalization vice presidencies and created two
general executive offi ces, one for Brazil and another for international operations. These initiatives provided our
leaders with greater autonomy and our Executive Committee with a more global and strategic vision. In January
2010, our offi ce in Buenos Aires, Argentina, began to manage our international operations.
We expect this new production-and-logistics model to drive expansion in our domestic and international busi-
ness. Additional innovations in the planning stage will improve the assistance we provide to our sales consultants
and consumers.
We have made signifi cant investments in information technology, which will support our growth cycle in the
coming years. This initiative will provide greater scalability, integration, and connectivity to our systems platform.
Approximately 85% of orders from our sales consultants are received via the Internet.
To prepare for the changes taking place at Natura, we will transfer our administrative unit and the distribution
center in Itapecerica da Serra this year to a new facility in the city of São Paulo. We understand that these chan-
ges, which aim to provide employees with better working conditions, will also impact the local community, espe-
cially with respect to tax collection. To mitigate these impacts, we are engaging in a dialogue with the municipal
administration about the pending relocation and our plans to continue to invest in the community (learn more
on page 68, Surrounding Communities). Some administrative functions now based in Cajamar, as well as the pic-
king center (preparation of boxes with products for sending to consultants) will also be transferred to São Paulo.
OUR PLANNING
In 2010, we set up a new Strategic Planning cycle for the period from 2011 to 2015. We defi ned targets and
identifi ed critical success factors, indicators, and milestones required to achieve our objectives.
We know that the success of this initiative rests in part on our ability to develop leaders whose actions align with
our Essence so that they can become real agents of social transformation. We also intend to create an internal
environment with constant learning opportunities, supported by a strong organizational culture enhanced by
the many countries in which we operate. We place a high priority on taking advantage of opportunities that
derive from connectivity so that we can foster sustainable development.
These elements will guide our strategic planning for the next fi ve years, allowing us to maintain our leadership
position in Brazil and to expand our direct sales model in Latin America. They will also help us generate more
value for Natura's stakeholders. As a result, we will continue to delight and be delighted by our customers, fos-
tering our well-being well concept in an innovative manner, strengthening our brand, and maintaining the quality
of relationships with our stakeholders.
Thinking about the future is the fi rst step toward innovation. In 2010, one outgrowth of our strategic planning
process was the development of our 2030 Vision. With the support of senior management, we stretched our
vision beyond the fi ve-year planning cycle to focus on long-term scenarios and potential challenges.
Given the potential scenarios we predict for the world in 2030, we note one positive trend: a growing col-
lective awareness awakened by the threat posed by climate change. Nevertheless, if current patterns of pro-
duction and consumption are maintained, environmental degradation may take on devastating proportions.
In this context, we should reassert our position as social change agents and channel our capacity to inno-
vate towards fi nding a balance in our business activities, by investing in new technologies and production
practices, and by infl uencing the partners in our production chain ­ from suppliers of raw materials to our
consumers. We want to be part of the network of organizations committed to the creation of a new model
of development.
EXECUTIVE SUMMARY OF THE VISION OF NATURA IN 2030
One quick look at what humanity is experiencing reveals the inequality, corruption, hunger, disease and war
that plague our societies. Against this backdrop, the environmental devastation and growing global warming,
also consequences of man's actions, indicate that our life in 2030 is under threat.
Faced with this desolate outlook, globalization presses on with fast-growing economic activity in large centers,
but without the global governance aimed at solving the socio-environmental challenges. Nevertheless, given
the scale of the threat posed to the future of the planet, we have noticed the awakening of a collective aware-
ness of respect for life rising above any other value or interest.
When confronted with this new hope, we see that our range of beliefs, values and Reason for Being will be-
come even more appreciated. We also believe that Brazil could be a source of inspiration for this imbalanced
world that is advancing rapidly towards globalization and universalization. Brazil could inspire the world, since
it is an extremely diverse country abounding with cultural, social and environmental wealth. And, like the
Brazilian company we are, we will help us become a leading country in the development of a new economy
for the 21
st
century.
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28
To be living in this world in constant transformation not only inspires us, it also motivates us towards a more
radical, broad and thorough application of our values. We all have the opportunity to contribute to the de-
velopment of a new civilizational process and we believe that the international community will increasingly
appreciate the initiatives of companies that are committed to this change.
At Natura, we shall continue our dedicated pursuit of balance in our business activities, diminishing our negative
impacts on the environment until we can guarantee positive processes throughout our production chain. At the
same time, and with just as much determination, we will try ­ demonstrating the contagious enthusiasm that
the world needs ­ to fulfi ll our vocation as social change agents, justly remunerating the network involved in the
development and sale of our products and providing inclusion opportunities for the excluded population. We
need to share knowledge and opportunities so that everyone can, in a positive and autonomous manner, be part
of a collective awareness of respect for life, for the human condition and for the planet.
Therefore, we believe that our brand will enjoy global presence and recognition, and that we will be known for
our pioneering work in the development of new business based on the transformation of socio-environmental
challenges into opportunities. We also believe that we will be part of a network of interconnected entrepre-
neurs and companies recognized for producing leaders who are committed to the creation of a new model
of development.
With equal responsibility, we shall employ our capacity to innovate more comprehensively, considering the
integral vision of the human being and our mission to creatively meet consumer needs, while also seeking to
respect and preserve the threatened web of life, taking our inspiration from the collective dream to shape a
healthier future for the planet.
SUSTAINABILITY MANAGEMENT
The way we do business is guided by our search for a sustainable development plan. We are aware that
the joint management of economic, social and environmental aspects of all processes is a major challenge.
However, we have managed to effectively incorporate this integrated vision into our routine operations.
Sustainability is one of the cornerstones of our processes and a part of Natura's Strategic Planning, which is
approved by the Board of Directors and closely monitored by senior management. Our main socioenviron-
mental indicators serve to integrate the company's strategic plan, and these indicators are communicated to
all business units to guide their processes.
The Executive Sustainability Offi ce is responsible for this process, educating and disseminating practices throug-
hout the company. In both Brazil and in our international operations, we rely on a network of sustainability
leaders who convey global practices to each unit and assure that these practices are integrated into decision
making. Our Biodiversity Management Group systematically monitors our sustainable use of biodiversity so that
through technology development, stewardship, ethical trade actions, and benefi t sharing, we preserve natural
resources and have a positive impact in our local communities.
We also seek to make continual progress in the construction of our materiality matrix. This involves a pro-
cess of determining which aspects of our company's sustainability efforts are viewed as most relevant by our
stakeholders. This process is carried out every two years. The results of the actions related to our six priority
topics in 2010 (Amazon, Biodiversity, Greenhouse Gas Emissions, Education, Product Impact and Quality of
Relationships) are reported to Natura's senior management by the Sustainability Committee. In 2010, for the
fi rst time, we invited our international operations to take part in this process. The new materiality matrix will
be included in the next reporting cycle and incorporated into 2011 strategic planning (learn more on page
109, About this Report).
Maintaining the quality of the relationships we have established with our stakeholders is also part of our sustain-
ability management process, and this includes our educational programs on relations and dialogue with stakeholders
(read more on page 38, Quality of Relationships).
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29
3.2
HIGH PRIORITY
SUSTAINABILITY TOPICS
Twelve years ago, we decided to incorporate biodiversity assets into our products in a sustainable
manner, respecting the ways of traditional communities and the livelihoods of local families.
Based on this experience, we developed the Amazon Program, which seeks to stimulate the crea-
tion of sustainable supply chains and new businesses based on science, innovation, and entrepre-
neurship, in addition to the natural and cultural resources offered by the region. Through the Ama-
zon Program, we can contribute to sustainable development proposals that offer opportunities to
local inhabitants while keeping the forest standing.
In preparing this strategy, we refl ected on the lessons of our previous actions and from workshops
on the Amazon with Natura's senior management. The knowledge gained from these actions gave
rise to the program, which is based on the expansion of our activities in science, technology and
innovation; sustainable production chains; and the region's institutional strengthening.
PALM OIL
We convened a panel of key opinion leaders, experts, and representatives of civil society, govern-
ment, and nongovernmental organizations to discuss a sustainable model for palm cultivation in the
region. What we learned from this process gave rise to the Amazon Program, which allows us to
build guidelines that will help us to develop a balanced production plan.
Because of improper agricultural practices that have damaged ecosystems in Asian countries, the
production of palm oil has negatively affected the biodiversity in tropical forests. However, we be-
lieve that the sustainable production and use of palm oil is possible, driving income generation and
regional development.
In 2010, we joined the Roundtable On Sustainable Palm Oil (RSPO), a global initiative led by the
WWF to certify the production process and assure compliance with social, environmental and eco-
nomic criteria. Our palm oil supplier, Agropalma, has begun the process to certify its production and
Natura will pursue its own certifi cation once this has been completed.
We want to accompany the national discussions on the impact of palm and engage in dialogue with
regional leaders to develop a domestic plan for sustainable production. Since 2008, we have been
working in partnership with Embrapa to research agroforestry systems for palm production in con-
junction with other species in the Amazon, and its combined use with other oilseed crops.
AMAZON
W E S E E T H E A M A ZO N R E G I O N A S A
S T R AT E G I C D R I V E R F O R B R A Z I L ' S
ECONOMIC DEVELOPMENT
. FINDING
NEW OPPORTUNITIES FOR SUSTAINABLE
U SE OF TH E A MA ZON ' S R ESO U RCES I S
PARAMOUNT TO GUARANTEEING QUALITY
OF LIFE FOR FUTU RE GE N E R ATION S .
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30
Our experience shows that production processes with lower environmental impact and innova-
tive solutions may generate positive results for both society and business. Our production model
involves some 2,300 families in Brazil and is based on the creation of fair trade and compensation
for the use of genetic heritage and traditional knowledge, proper handling of raw materials, and
promotion of local development (learn more on page 30, Supplier Communities). Our opera-
tions are guided by the Policy for the Sustainable Use of Biodiversity and Cultural Heritage, crea-
ted in 2008 based on the Convention on Biological Diversity (CBD), which establishes guidelines
for the use of raw materials and for the sharing of their benefi ts.
Reaffirming our leadership role in the area of biodiversity, we headed the Brazilian Business
Movement for the Conser vation and Sustainable Use of Biodiversity . More than 80 par tici-
pating companies and civil organizations signed a letter declaring their commitment to the
conser vation of Brazilian biodiversity. This document encourages the government to define a
regulator y framework that fosters research and scientific advances that integrate production,
use, and conser vation. The Movement sent the letter to the federal government and presented
it at the 10th Conference of the Par ties to the Convention on Biological Diversity (COP 10),
in Nagoya, Japan.
As a result of this imperfect legislation, in 2010 we received infraction notices from the Brazilian
Institute of the Environment and Renewable Natural Resources (Ibama) for alleged irregular ac-
cess to biodiversity (learn more on page 80, Creation of Environmental Value).
BIODIVERSITY
"SUSTAINABILITY SHOULD BE SEEN AS
AN INTEGRAL, INSEPARABLE PART OF
THE BUSINESS."
Christian Moura, Supplier.
W E R E CO G N I Z E T H AT CO M PA N I E S ,
SOCIET Y, AND GOVERNMENT SHARE
R E S P O N S I B I L I T Y
F O R T H E
CONSERVATION OF BIOMES AND FOR
PURSUING ECONOMIC OPPORTUNITIES
FOR THE SUSTAINABLE MANAGEMENT
OF NATURAL RESOURCES.
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31
EDUCATION
In 2010, we created the Natura Institute, a non-profi t organization that is responsible for all our
private social investment. Through the Crer para Ver (Believing Is Seeing) program, we invest the
proceeds from the sale of a special line of products into initiatives that can affect the quality of
education in Brazil and Latin America. In addition, we offer educational technologies to society that
can have a positive infl uence on public education policies to improve literacy skills for preschool-
aged children. This would be similar to what we achieved in Brazil with the Trilhas (Trails) Project,
and we will share this with the Ministry of Education. In 2010, the Crer para Ver program obtained
the highest funding in its history, R$10 million, 168% higher than the previous year. Revenues from
international operations contributed R$1.3 million to this program in 2010 (learn more on page
93, Creation of Social Value).
Our concern with education extends to our employees, suppliers, and consultants. At a time when
Brazil faces the challenge of fi nding a qualifi ed workforce to drive its development, there is a clear
shortfall in secondary, technical, and higher education. Accordingly, we seek to offer our employees
education and professional development for all positions. In 2010, we created a program for the
operational staff that links career development to education. We also signifi cantly increased the
number of young apprentices and launched a program that prepares these young workers for the
professional market (learn more on page 44, Employees).
In 2011, we will offer preparatory courses for job openings at Natura in the community of Cajamar
to increase the number of qualifi ed candidates at Natura and other companies (learn more on page
68, Surrounding Communities). We also invest in the training of our consultants. In 2010, more than
500,000 consultants participated in training; most had less than 3 years of experience working for
Natura (learn more on page 54, Consultants and NCAs).
EDUCATION IS A MAJOR CHALLENGE
THROUGHOUT L ATIN AMER IC A . THE
GEOGR APHICAL OUTREACH OF OUR
B U S I N E S S O F F E R S T H E S C O P E
AND CONDITIONS
FOR LARGE-SCALE
PROJECTS AND INITIATIVES, POSITIVELY
INFLUENCING A MOVEMENT FOR THE
NEED FOR QUALIT Y EDUCATION .
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32
Besides offsetting our emissions through support to socioenvironmental projects, we committed to
reducing our relative greenhouse gas (GHG) emissions by 33% between 2007 and 2011. By the end
of 2010, we had reached a total reduction of 21%, even with an increase in production. Given what
we have learned over these past fi ve years, we have deferred our achievement of this goal to 2013.
Due to the reduction obtained in the last four years, even with the increase in our production, we
have learned important lessons. Today, the carbon issue is an integral part of Natura's strategy and
infl uences the company's decision making. We have adopted innovative initiatives and conducted an
in-depth analysis of the impact of our processes so that our managers understand the contribution
of each process to GHG emissions.
We carried out a broad diagnosis of our operations in 2010 to identify new opportunities for re-
ducing and mobilizing the entire company so that these targets are met. The new study includes the
expected gains from various ongoing structural projects, from the revision of product mass and use
of biopolymers in packaging to the distribution process with the new logistic model and the start of
international manufacturing.
The complexity of these actions, involving a deep transformation of how we run our business, partially
explains the revision of our goals. An important point to highlight is that our commitment to reduction
is not limited to our own operations, but also the extraction of raw materials by all our suppliers,
which makes our reduction efforts all the more complex and our achievements all the more signifi -
cant. (Learn more on page 80, Creation of Environmental Value).
We also face the additional challenge of reducing 2012 absolute emissions in the Brazilian operation
by 10% from 2008 levels. These are emissions that result from our internal production processes. We
maintained our target despite delays in the implementation of internal programs that could help us
achieve this goal, and despite the change in the Brazilian electricity matrix. The latter increased the use
of thermal plants, thereby raising the rate of carbon emissions to produce electricity.
GREEN HOUSE GASES
IT IS NOT EASY TO CHANGE THE POLITICS OF
A COUNTRY. BUT IT IS POSSIBLE TO EDUCATE
AND CREATE A CRITICAL MASS THAT WILL MAKE
SUSTAINABLE DECISIONS.
Claudia Rodríguez, civil society organization representative
"
"
WE KNOW THAT ONLY SIGNIFICANT
C U T S
I N T H E VO LU M E S O F C A R B O N
LAUNCHED INTO THE ATMOSPHERE WILL
EFFEC TIVELY CONTAIN THE FORCE S
TH AT C R E ATE C LI M ATE C H A N G E .

TO HELP TO ACHIEVE THIS, WE CREATED THE
CARBON-NEUTRAL PROGRAM
IN 2007.
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33
PRODUCT
IMPACT
The management of solid waste was a priority in our discussion panels with stakeholders. In 2010,
we developed a more extensive program, enlisting the help of 40 people, among packaging manu-
facturers, garbage collectors, industry professionals, academics, specialists, and consumers in defi ning
issues and guidelines for improvement. Our fi rst action, to be implemented in 2011, will be to work
with our suppliers and outsourced production partners to search for effi ciencies and innovative waste
solutions -- from the time raw materials are extracted all the way through postconsumption.
It is worth mentioning that new concepts were acknowledged in the recently instituted National
Policy for Solid Waste, such as the priority assigned to reduction prior to recycling and the responsi-
bility of the consumer, who is a part of the chain. The business community now faces the additional
challenge of searching for alternative treatments for its waste, including in the postconsumption phase.
Management of water consumption is another priority. This year, we decided to broaden the analysis
of our impact on this natural resource. Previously, we had focused on our internal processes and our
main suppliers. More recently, however, we started to use the water footprint concept, which gives
us a more comprehensive vision of the impact of water usage throughout the life cycle of a product
or process. The water footprint includes not only consumption, but also the potential for pollution. In
2009, we became a partner of the Water Footprint Network (WFN) group, the purpose of which is
to promote sustainable, equitable, and effi cient use of water. In 2010, we used the methodology des-
cribed in the Water Footprint Manual in two of our products to learn how this applies to our business.
Natura is the fi rst cosmetics company in the world to use this methodology in the manufacture of
cosmetic products (learn more on page 80, Creation of Environmental Value).
THE FOCUS IS ON HOW TO FACE THE PROBLEM.
LITTLE HAS BEEN DISCUSSED ABOUT HOW NOT
TO GENERATE IT.
Lucio Di Domenico, civil society organization representative
"
"
ONE OF OUR PRIMARY CHALLENGES IS
TO R E D U C E T H E I M PAC T C A U S E D B Y
THE MANUFACTURE, DISTRIBUTION,
AND USE
OF OUR PRODUCTS. THIS HAS
LED US TO INVEST IN PRACTICES AND
TECHNOLOGIES THAT AIM TO MINIMIZE
THESE IMPACTS
, E S P E C I A L LY I N T WO
A S P E C T S : M A N A G E M E N T O F S O L I D
WASTE
AND WATER CONSUMPTION.
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34
QUALITY OF
RELATIONSHIPS
We invest in the development of efficient channels for dialogue, in sharing experiences, in
transparency, in ethical behavior, and in the creation of oppor tunities to find shared solutions.
We rely on formal channels of interaction, such as the Natura Ser vice Channel and Natura
Consumer Ser vice Channel, specifically created for our consultants and consumers. Through
our Ombudsman's Office, our employees, suppliers, and Natura Consultant Advisers can also
obtain information or file complaints.
Our objective is to listen to our stakeholders, who we believe can help us improve the way we
plan and manage our operations. Last year, we demonstrated this by hosting discussion panels
that ultimately led to the establishment of a series of new initiatives at Natura. These initiatives
included a waste management program (learn more on the previous page, High-priority Topics/
Product Impact) and our position on the sustainable use of palm (learn more on page 29, High-
priority Topics/Amazon). The results of these dialogues infl uenced our decision-making and the
development of our strategic planning, and also helped us develop our processes and behaviors,
which contributed to raising the standard of our relationships. We also star ted to include our
international operations in the process of defi ning the materiality matrix (learn more on page
109, About the Repor t), by holding discussion panels in Colombia, Mexico, Peru, and Argentina in
2010, and in Chile in March 2011 (learn more on page 39, Quality of Relationships).
W E B E L I E V E T H AT SOLUTIONS TO
T H E C U R R E N T C H A L L E N G E S FAC E D
BY HUMANITY ENTAIL A COLLECTIVE
PROCESS OF THINKING ABOUT THE
FUTURE
WITH A FOCUS ON RAISING
A W A R E N E S S A N D D I A L O G U E .
T H E R E F O R E , N AT U R A B E L I E V E S I N
T H E I M P O RTA N C E O F M A I N TA I N I N G
T H E QUA L I T Y O F I T S R E L AT I O N S H I P S .
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35
Two impor tant developments took place in 2010: the construction of our Vision 2030 (learn more on
page 23) and Natura's Vision of Innovation. These independent projects give us a long-term perspective,
outlining future oppor tunities and defi ning the paths we want to follow.
We have identifi ed the need to develop new competencies, beyond the classical sciences, developing a
more comprehensive approach. These strategies include increasing our knowledge of sciences that govern
sustainability, social biodiversity, and sensorial experience, while pursuing innovation in other fi elds of
knowledge associated with the perceptions, behaviors, and rituals of groups of people. Through these new
strategic fronts, we are fi ne-tuning our direction in science and technology.
This vision has also reinforced our commitment to searching for alternatives to reduce our environmental
impact and to embracing the principles of ecodesign (the development of products, processes, and services
that take environmental impact into account). As par t of this commitment, for example, Natura established
a carbon-emissions limit for the approval of new products in the company (learn more on page 63, Crea-
tion of Environmental Value).
Among other innovative initiatives in sustainability management, we prepared a methodology for evaluating
the social and economic impacts of our suppliers (learn more on page 49, Suppliers) and developed a pilot
experiment to calculate the water footprint of two products in our por tfolio ­ including, in addition to our
own operations, the consumption from extracting the raw material. (learn more on page 63, Creation of
Environmental Value).
To suppor t these changes, we expanded our investments in research, science, and technology, and in the
creation of knowledge networks. The investment of our net revenues in innovation-related activities increa-
sed to 2.8% (R$139.7 million). This amount was invested exclusively in science and technology, innovation
management and par tnerships, product development and marketing, regulatory affairs management, and
product safety (graphs 1 and 2).
Strategic por tfolio management dictates that the ideal level of innovation, as measured by the Innovation
Index (see formula below), should range between 55% and 65%. In 2010, we recorded 61% that guaran-
teed to Natura a differentiated market presence and the appropriate strenght to the channel.
1. INVESTMENT IN
INNOVATION (R$ MILLIONS)
103.0
2008
111.8
2009
139.7
2010
2. NUMBER OF PRODUCTS
LAUNCHED (UN)
118
2008
103
2009
168
2010
3.3
INNOVATING
INNOVATION
INNOVATION IS AT THE CENTER OF NATURA'S
VALUE CREATION AND INVOLVES ALL
THE COMPANY'S STRATEGIC PILLARS. IT
IS EXPRESSED THROUGH THE INNOVATION
O F O U R P R O D U C T S , S A L E S M O D E L S ,
T H E M A N AG E M E N T S Y S T E M A N D T H E
WAY IN WHICH WE TRANSFORM SOCIAL
A N D E N V I R O N M E N TA L C H A L L E N G E S
I N TO O P P O RT U N I T I E S F O R L E A R N I N G
A N D S U P P O R T I N G S U S TA I N A B L E
DEVELOPMENT.
FOR US, INNOVATION
MEANS CREATING A FLOW OF WELL-
B E I N G W E L L
T H AT S U R PA S S E S T H E
EXPECTATIONS OF OUR STAKEHOLDERS.
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36
INNOVATION INDICATORS (%)
2008
2009
2010
Percentage of net sales invested in innovation
2.8
2.6
2.8
Innovation Index
1
67.5
67.6
61.4
1. Gross revenues for the past 12 months from products launched in the past 24 months, divided by total gross revenues for the past 12 months.
Natura's innovation is sustained by its search for excellence in:
¾ Scientifi c research to identify ingredients from Brazilian sociobiodiversity and to enable the use of
these new ingredients in the manufacturing of products that offer special benefi ts;
¾ Scientifi c fundamentals on hair and skin, and in-depth knowledge of consumer needs;
¾ New models and methods to ensure product safety and global strategies on regulatory matters;
¾ Cosmetic Vigilance System, which monitors possible adverse impacts of products, supports the con-
sumer, and drives the innovation process;
¾ Focus on scientifi c understanding of controversial ingredients and replacement strategy;
¾ Systemic understanding of well-being and its relations in the physical, emotional, cultural, and social
dimensions;
¾ Concept creation and development of new products that provide a continuous fl ow of product
launches in both the short and long term;
¾ New packaging, and other innovative and different ways of providing benefi ts to the consumer, with
the lowest possible environmental impact;
¾ Transformation of socio-environmental challenges into business opportunities and products, including
the sustainable use of natural resources, social biodiversity, ecodesign, and environmental indicators.
We launched products with concepts that are deeply connected to our beliefs, leading the consumer
toward new ideals and experiences. One example is Natura Chronos, a line of anti-aging cream, which
we relaunched last year. Knowing that signs of aging can differ among women in the same age group, we
developed an innovative product designed for people with different skin types rather than one based on
a consumer's age.
The new Amó fragrance, meanwhile, is intended to stimulate the senses, the intimacy and the closeness be-
tween people. The product line aims to encourage consumers to refl ect on their relationships and propose
the redemption of true love.
Similarly, when developing the new Natura UNA cosmetic line, we refl ected on the motivation behind wear-
ing make-up and its symbology. In addition to using high performance raw materials, the new line is also in-
novative in its packaging and in the ingredients used in the products, combining sophistication and naturalness.
The high technology at the service of sustainability was also spotlighted with the launch of refi lls for the Na-
tura Erva Doce liquid hand soap, which use green polyethylene made from sugarcane. It is the fi rst cosmetic
with this kind of packaging available on the market, helping us meet our product impact reduction target (read
more on pages 86, Creation of Environmental Value).
OPEN INNOVATION
The broadening of the scope of innovation in 2010 is par t of our open innovation strategy, fi rst develo-
ped in 2005. This strategy is the foundation for the development of our products, processes, and tools,
through par tnerships with science and research centers in Brazil and abroad. In 2010, we teamed up with
leading technological centers, such as the Massachusetts Institute of Technology, in Boston, United States
of America, and we streamlined relationships with our other international par tners. We also qualifi ed 27
employees in innovation management through the international cer tifi cation program offered by the Hult
Business School in par tnership with the IXL Center. This qualifi cation is accredited by the Global Innovation
Management Institute.
We improved employee training to include the development of innovation competencies, including: how to
best generate new ideas and concepts; how to leverage technological convergence and our knowledge of
sustainability; and other themes related to our Essence. Staff in our business units and Brand and Sustaina-
bility depar tments received more than 8,000 hours of innovation training in 2010. Additionally, we offered
technical and functional training in the more traditional areas of science and technology.
We believe that a scientifi c foundation, together with the systematic acquisition of knowledge using the
open-innovation model, will enable the creation of innovative concepts and ideas, enabling more rapid
development of new products and processes at a reduced cost to Natura.
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37
NATURA CAMPUS
Created in 2007, the Natura Campus Technological Innovation Program is part of our open innovation program.
It has the support of the National Council for Scientifi c and Technological Development, the São Paulo State
Research Support Foundation, and the Research and Financing Projects of the Brazilian Innovation Agency to
develop partnerships with the academic community. These institutions contribute to the joint fi nancing of pro-
jects and provide participants with equipment, scientifi c scholarships, and research materials.
The Natura Campus Portal (www.natura.net/campus) registered 6,000 visits in 2010. It contains a database
of voluntary researchers and has 280 research groups linked to 108 science and technology institutions. The
website, which was updated last year, is an important tool for our relationship with the academic community.
Through this portal, we received 13 new proposals from nine institutions. Two of these proposals have already
been approved.
We staged the second edition of the Natura Innovation Award last year, and the winning project was a study
by the Institute of Nuclear Energy Research, which intends to develop a non-invasive methodology for making
skin diagnoses. Held every two years, the award, supported by the Brazilian Development Bank (BNDES),
recognizes Brazil's scientifi c production and its contribution to the technological innovation process at Natura.
In 2010, we received R$900,000 in fi nancial support from Finep for research and development projects.
We also obtained another R$135.7 million in BNDES fi nancing for innovation, industrial training, logistics and
information technology.
COMMERCIAL AND RELATIONSHIP INNOVATION
Commercial innovation was in the spotlight last year after the creation of a committee dedicated to this area.
We also increased the use of digital tools in our contact and relationships with our sales consultants and consu-
mers. This year, our sales consultants placed 85% of their orders through the Internet. We continued to improve
our relationship with consultants through use of the "Consultancy" blog (www.blogconsultoria.natura.net) and
Twitter; we use these media to give our consultants information about our actions, products, and sustainability
measures (learn more on page 45, Consultants and NCAs).
Internet access to the Natura digital magazine (www.natura.net) increased more than 100% in the period. In
February 2011, we launched a version of this publication for the iPad. This application allows for more interactive
contact and gives users a 360-degree view of the products. Additionally, on the make-up pages, users can change
the color of the products used by the model and gain access to make-up hints. Our pages on Facebook and
Twitter and our blogs have also become strategic relationship tools that allow us to offer fl exible assistance to
our consumers (learn more on page 59, Consumers).
We also redesigned, in February 2011, the Natura Conecta portal (www.naturaconecta.com.br). This allowed us
to continue improving the company's use of virtual instruments in its relationship with stakeholders (learn more
on page 38, Quality of Relationships).
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38
3.4
COLLECTIVE
CONSTRUCTION
As par t of the preparation of this annual repor t, we relied once again on the Wiki Repor t, a vir tual com-
munity of the Natura Conecta platform (www.naturaconecta.com.br) open to the par ticipation of anyone
who is interested in our activities. This is an innovative and collaborative experience that enables conti-
nuous improvement by capturing the opinions and suggestions of different stakeholders.
The discussions held in the vir tual forums gave rise to "The Natura we share" letter, published in our 2009
annual repor t. In 2010, we did not make the progress we had hoped for because of the reframing of Natu-
ra Conecta, which was relaunched in February 2011 (learn more on page 3, Quality of Relationships). We
hope to increase the use of this tool and transform the Wiki Repor t into an active forum for discussion.
We used Wiki to build Natura's new corporate materiality matrix. The main issues identifi ed in dialogues
online in Brazil and in our international operations were put to a vote by the online community. More than
150 par ticipants chose the most relevant issues. The results are being analyzed and the new materiality
matrix will be disclosed in 2011.
Another initiative to promote dialogue with our stakeholders was the panel to discuss the "Future of the
Repor t." The meeting, held in December 2010, engaged exper ts in communication and sustainability, as well
as employees and suppliers involved in our repor ting process, in a discussion about choices for the next
20 years. Many promising ideas arose from this event. Some of the subjects that par ticipants discussed are
in line with our goals; these include the need to create more collaborative platforms for repor ting and to
establish multidisciplinary teams to run the process of disclosing our fi nancial results. The discussions have
continued on the vir tual platform.
As a result of this meeting, we expanded our most recent annual disclosure. In addition to the traditional
videoconference for investors and analysts, we organized an open conference to present our results. This
event, held on February 25, 2011, was chaired by Natura's CEO and the Senior Vice President of Financial,
Legal, and Information Technology Affairs. The executives presented the key economic, social, and environ-
mental highlights of 2010, and answered questions from par ticipants.
Our goal is to continue to expand these collaborative oppor tunities. To par ticipate in Natura Conecta,
register at www.naturaconecta.com and join the Wiki Repor t community.
W E S E E K TO I N C LU D E D I F F E R E N T
PERSPECTIVES AND TO STRENGTHEN
T R A N S PA R E N C Y
R E G A R D I N G
THE DISCLOSURE OF OUR RESULTS
BY MEANS OF INNOVATIVE AND
COLL ABOR ATIVE TOOLS
. THIS
STRATEGY IS PART OF OUR GOAL TO
CONTINUOUSLY INCREASE THE SPACE
GIVEN TO OUR STAKEHOLDERS
T O E X P R E S S T H E M S E LV E S
.
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39
4.
WHO WE WORK WITH
In 2010, we heard from 824 people through meetings with employees, consultants, shareholders, suppli-
ers, supplier communities, consumers, the media, and people from the surrounding communities. We also
included others in this process -- experts on specifi c issues, key opinion leaders, and representatives of
government and civil society.
In all, we held 22 dialogue panels, more than twice as many as in 2009, when nine meetings were held. They
included dialogue panels held in our operations in Latin America (Colombia, Mexico, Peru, and Argentina),
which together contributed to the construction of our materiality matrix. The purpose was to develop a cor-
porate matrix that refl ects the interests of stakeholders from all operations. In February 2011, this cycle will
be concluded with the organization of a meeting in Chile. Key issues identifi ed in this process become part of
our strategic planning (learn more on page 136, About This Report).
In addition to this quantitative accomplishment, we experienced signifi cant advancements in quality. Through
a process of "co-construction," participants discussed priority issues, such as the mapping of external factors
linked to our production chain, in partnership with suppliers (learn more on page 49, Suppliers), and the initia-
tives related to the sustainable use of palm oil and solid waste management (learn more on page 28 and 32,
High-High-priority Topics/Amazon and Impact of Products).
In 2011, we relaunched the Natura Conecta virtual network (www.naturaconecta.com.br), which now has its
own platform and is integrated with other Natura virtual communities. Because of this relaunch, the use of
virtual resources to build relationships with stakeholders did not reach the extent we envisioned; however,
these activities have resumed, and everyone who is interested in our business is invited to participate (learn
more on page 37, Collective Construction).
4.1
QUALITY OF
RELATIONSHIPS
OUR RESULTS
A R E T H E F R U I T
O F C O L L E C T I V E
C O N S T R U C T I O N .
T H U S , W E S E E K T O
DEVELOP SPACES AND
Q U A L I T Y
RELATIONSHIPS
T H A T E N A B L E T H E
JOINT CREATION
O F S O L U T I O N S
S I N C E 2 0 0 9, N AT U R A H A S B E E N
D E V E L O P I N G S T R U C T U R E D
RE L ATION S HIP- MANAGE ME NT
P R A C T I C E S . T H E S E P R A C T I C E S
E N CO U R AG E A CO L L A B O R AT I V E
APPROACH TO FINDING SOLUTIONS
TO C H A L L E N G E S W E A L L FA C E .
THIS SPIRIT IS REFLECTED IN THE IN-
PERSON DIALOGUE PANELS WE
HOLD WITH OUR STAKEHOLDERS, AS
WELL AS IN EVENTS THAT INTENDED
T O I M P R O V E T H E I R S E L F -
DEVELOPMENT AND AWARENESS.
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40
With the goal of building transparent and straightforward relationships, we organized a series of actions for
different stakeholders. One such activity was the Refl ection Cycle on Cultural Biology, with biologist Hum-
berto Maturana and professor Ximena Dávila. This event was designed to foster awareness and generate
positive change in relationships. We also continue to develop the Você tem fome de quê? (What Do You
Crave?) program by including stakeholders beyond our employees. This program involves lunch-hour talks at
the Cajamar unit. In 2010, presenters included top international thinkers, such as quantum physicist Amit Go-
swami, American entrepreneur Charles Watson, Massachusetts Institute of Technology innovation specialist
Otto Scharmer, and spiritual teacher Diane Hamilton.
For the fi rst time ever, we held a meeting with former employees. The event in Cajamar brought together
more than 200 people. We thanked each of them for their contributions to the company, seeking to build
relationships of friendship and trust with this group.
Among the activities to promote individual development, we staged the Refl ection Cycle on Cultural Biol-
ogy with the Chilean biologist Humberto Maturana and the human relations professor Ximena Dávila. This
activity was intended to raise the awareness of the participants and generate positive changes in relationships.
Some 100 representatives from different stakeholder groups took part in the activities.
We also organized a series of eight lectures as part of the program "Você tem fome de quê?" (What do you
crave?), offering other stakeholders, including our employees, the opportunity to participate. The program is
held periodically during the lunch period at our headquarters in Cajamar. In 2010, lectures were given by lead-
ing international thinkers, such as the Indian physicist Amit Goswami, the creative process specialist Charles
Watson, the Massachusetts Institute of Technology professor Otto Scharmer and the Zen Buddhist teacher
Diane Hamilton.
We also gave away 100 free admissions to the International Conference of the Ethos Institute 2010, which
was held under the theme "The World Under New Management ­ Sustainability: Society's New Contract
with the Planet".
DIALOGUE PANELS HELD IN 2010
Stakeholder
Number of
participants
Date (month) and Place Main topics
Consumers
22
January/2010
Cajamar (SP)
Analysis of Natura's strategy based on the pillars
of product, channel and corporate behavior
Surrounding
community
10
April/2010
Cajamar (SP)
Presentation of the new system of resource
allocation for the Municipal Councils of Children
and Adolescents (CMDCAs); discussion and
agreement of the principles of relationship
Consultants
33
May/2010
Cajamar (SP)
Diagnosis of problems and opportunities for
improvement of consulting activities
Surrounding
community
19
May/2010 Itapecerica
da Serra (SP)
Presentation of the new system of resource
allocation for the Municipal Councils of Children
and Adolescents (CMDCAs); discussion and
agreement of the principles of relationship
Surrounding
community
10
June/2010
Cajamar (SP)
Dialogue between the groups with presentation
of projects under development in the municipality
and discussions between them
Multistakeholder 55
July/2010
Colombia
Defi nition of priority topics for corporate
materiality matrix.
Multistakeholder 65
July/2010
Argentina
Defi nition of priority topics for corporate
materiality matrix.
Multistakeholder 40
August/2010
Cajamar SP
Debate on Natura's positioning and practices in
relation to solid waste. Discussions contributed
to the guidelines of the new waste management
project
Surrounding
community
26
August/2010
Itapecerica da Serra
(SP)
Dialogue between the groups with presentation
of projects under development in the municipality
and discussions between them
Natura Consultant
Adviser (NCA)
40
August/2010
Osasco (SP)
Diagnosis of problems and opportunities for
improvement of consulting activities
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41
Suppliers
70 people
August/2010
Cajamar (SP)
Discussion to determine the social and
environmental impacts to which the supply chains
are exposed (Mapping externalities)
Consultants ­
Central Region of
Brazil
22
October/2010
Belo Horizonte (MG)
Dialogue with NCs with up to 18 months
of activity to diagnose the key problems and
opportunities for improvement on beginning
consultant activities
Former consultants
- Central Region of
Brazil
11
October/2010
Belo Horizonte (MG)
Dialogue with former NCs who left Natura with
less than 18 months of activity to diagnose the
key problems and improvement opportunities
Natura Consultant
Advisers (NCAs) -
Central Region of
Brazil
31
October/2010
Rio de Janeiro (RJ)
Dialogue with NCAs with up to 18 months
of activity to diagnose the key problems and
opportunities for improvement on beginning
NCA activities
Former Natura
Consultant
Advisers (NCAs) -
Central Region of
Brazil
20
October/2010
Rio de Janeiro (RJ)
Dialogue with former NCAs who left Natura
with less than 18 months of activity to
diagnose the key problems and improvement
opportunities
Supplier and
processing
communities
60 November/2010
Cajamar (SP)
Reappraisal of the topics covered in dialogue
panels in 2009; Bioqlicar assessment and
discussion of future scenarios and joint
opportunities
Multistakeholder 40
November/2010
Peru
Defi nition of priority topics for corporate
materiality matrix.
Multistakeholder 40
November/2010
Cajamar (SP)
Discussion about Natura's positioning regarding
the use of palm oil and building a sustainable
model for the production of this input in the
Amazon region
Multistakeholder 30
December/2010
São Paulo (SP)
Dialogue on the future and changes required for
the Natura Annual Report
Multistakeholder 65
December/2010
Cajamar (SP)
Reappraisal of Natura's actions on the priority
topics of sustainability and redefi nition of priority
topics for corporate materiality matrix
Multistakeholder 45
December/2010
Mexico
Defi nition of priority topics for corporate
materiality matrix.
Brand Suppliers
70
December/2010
Cajamar (SP)
Dialogue with strategic partners and employees
who work in the production of the main
expressions of our brand (products, advertising,
Natura magazine, media, events, Natura Meetings,
etc.). Refl ections on challenges and strategy of
both short and medium terms for each of these
forms of brand expression.
Stakeholder
Number of
participants
Date (month) and Place Main topics
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42
OMBUDSMAN'S OFFICE
Natura's Ombudsman's Offi ce is a formal dialogue channel between the company and its employees, in-house
outsourced workers, and suppliers (Brazil). This important function helps us to monitor compliance with our
Relationship Principles commitments and whether our own actions are derived from our Essence. This resource
is also available to former employees.
These contacts are recorded and analyzed by the Ombudsman team and submitted to the responsible manager.
The Ombudsman's Offi ce investigates complaints and allegations of misconduct, welcomes suggestions and
compliments, and receives general inquiries. Natura's historical records do not include any cases of discrimina-
tion. All contacts that may be considered misconduct are reported to the ethics committee, of which the com-
pany's CEO is also a member. When necessary, the offi ce enlists the support of internal auditors (learn more
on page 18, Governance).
TOTAL NUMBER OF INQUIRIES RECEIVED THROUGH THE OMBUDSMAN CHANNEL
2008
2009
2010
Internal stakeholders, Brazil
783
1,096
1,120
Internal stakeholders, Latin America
26
13
18
Suppliers, Brazil
19
13
17
Consultants, Brazil
1
52
34
8
Total 880
1,156
1,163
1. Data refer to a pilot project in a sales department in the Greater São Paulo area.
Natura Ombudsman's Offi ce surveys Brazilian employees about their satisfaction with its services. In 2010, the of-
fi ce achieved a 97% satisfaction level, which is statistically equivalent to the fi gure reported in 2009 (98%). We do
not conduct surveys with employees in our international operations or with suppliers or consultants since we still
don't have a signifi cant sample for this measurement.
BRAZILIAN OPERATIONS' INTERNAL STAKEHOLDERS
In 2010, we recorded 1,120 inquiries from internal stakeholders in Brazil. The percentage of issues handled,
83% in 2009, decreased to 52% last year. This decrease resulted from our decision to change the criteria
for use of the Ombudsman's Offi ce in an effort to promote greater dialogue between employees and their
managers. Our goal is to create a culture that encourages collaborative problem solving, reserving the Om-
budsman's Offi ce for cases where solutions are elusive. As a result, technical inquiries regarding processes,
policies, procedures, and infrastructure were rerouted to appropriate managers.
Other changes in channel behavior were also observed. Anonymous reports decreased, thus strengthening
the consolidation of the channel as an additional tool of dialogue and relationship for employees and in-house
outsourced workers in Brazil.
Some 53% of the inquiries handled by the Ombudsman's Offi ce related to "people management", primarily
benefi ts such as medical and dental assistance, transportation, and meals. In 2009, 73% of the inquiries fi elded
by the Ombudsman's Offi ce were of this nature.
PROFILE OF CONTACTS BY INTERNAL STAKEHOLDERS IN BRAZIL
Criticisms 77%
Compliments
10%
Queries 7%
Suggestions
4%
Complaints/ethical misconduct
2%
Total number of contacts
1,120
1. SATISFACTION WITH THE
OMBUDSMAN CHANNEL (%)
1
1. Result refers to positive responses
to the question, "Are you satisfi ed with
this dialogue channel?"
96
2008
98
2009
97
2010
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43
RELATIONSHIP PRINCIPLES
In 2010, we reviewed the Natura Relationship Principles, a set of commitments that guide our day-to-day
actions and attitudes, and we made changes to the content, adding more details to two principles: confl icts
of interest and personal favoritism. Intended specifi cally for our employees and in-house outsourced work-
ers, these principles include clarifi cations on the giving and receipt of gifts, making trips, hiring suppliers and
engaging in outside activities that may be in confl ict with the work performed at Natura.
As a result of this initiative, we are now providing better guidance to our employees so they do not put
themselves in situations that involve, or may be interpreted as involving, a potential confl ict of interest or case
of personal favoritism. The initiative has provoked refl ection and raised awareness and respect for the topics
that were addressed, reinforcing the message that knowledge and observance of the Relationship Principles
is an individual responsibility.
INTERNAL OMBUDSMAN'S OFFICE ­ LATAM
In 2010, we observed an increase in the number of contacts, to 18 from 13 in 2009, with the majority origi-
nating in Peru, primarily from former employees who were dismissed due to ethical issues, after an analysis
and verifi cation that involved various different departments of Natura. We saw a reduction in the number of
anonymous comments, causing the percentage of identifi ed contacts to rise sharply from 31% in 2009 to 50%
in 2010. Most of the anonymous contacts are made on behalf of groups. The contacts are handled primarily by
the senior management and the People and Communication Department. Finally, most of the contacts were
made by Relationship Managers (44%), unlike in the Brazilian operations, where this channel is used most
frequently by the operational and administrative staff.
SUPPLIERS
In 2010, we also registered a small increase in contacts from suppliers, to 17 from 13 the year before. The
majority of this increase represents criticisms. The number of complaints fell from 50% of the contacts in
2009 to just 18% last year. Most of the contacts were made by suppliers of services (88%), while suppliers
of products made 12% of the contacts. All the contacts last year were identifi ed, unlike in 2009 when 38% of
the contacts from service suppliers were made anonymously.
CONSULTANTS
The offi cial channel for our consultants to contact us is the Natura Service Center (NSC). The Ombudsman's
Offi ce only handles cases that are not solved by the NSC. We have also modifi ed some criteria for registering
behavioral concerns (such as, for example, problems contacting NCAs and relationship managers, incorrect
orders, etc.) and guaranteeing that technical issues are dealt with by the channel. We handled 5,335 contacts
from this stakeholder group in 2010. (Read more about our consultants on page 56).
CONSUMERS
Our consumers can use the Natura Customer Service Center (NCSC). Nevertheless, just like the service for
consultants, we may also intervene in special cases that are not solved by the NCSC, such as dissatisfaction
with the replacement of a product. In 2010, we also modifi ed the criteria, starting to lend more support to
the legal fi eld and the press, which require a much faster response. In 2010, we handled 730 issues from this
stakeholder group (read more about Consumers on page 59).
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44
4.2
EMPLOYEES
Because of this, Natura has made a conscious effort to improve its "people management" over the last several
years. In this regard, education -- a driver of sustainability -- received a good deal of attention in 2010. We
established education-and-development programs for employees at different levels of the company, strength-
ened our organizational culture, created more effi cient retention processes, and completed the training of our
international staff.
NUMBER OF NATURA EMPLOYEES
1
2008
3
2009
2010
Brazil 4,386
4,821
5,509
Argentina
2
306
331
395
Chile 222
264
293
Mexico 277
335
329
Peru 290
296
293
Colombia 135
168
170
France 32
45
48
Total 5,648
6,260
7,037
Other employment contracts
4
Apprentices
6
12
10
152
Trainees 66
47
68
Temporary staff
5
445
340
128
In-house outsourced workers
7
1,787
1,310
2,065
1.Consolidated data as of December 31, 2010.
2.Of this total, 61 employees are part of the structure that deals with international operations, with headquarters in Argentina.
3.The operation in Venezuela was closed in 2009 and had 50 employees in 2008.
4.Includes operations in Brazil, Argentina, Chile, Colombia, Peru, and Mexico (except outsourced workers).
5.Staff hired for a fi xed period under the CLT Labor Code by employment agencies and subordinated to these agencies are consid-
ered temporary.
6.In 2010, Natura launched the Semear (Seed) Program in Brazil, as the focal point for development of young apprentices.
7.Suppliers that provide services to Natura and that work in or have access to company premises for a period exceeding six
months are deemed to be in-house outsourced workers. This includes Cajamar, Itapecerica da Serra, Barueri, São Paulo and our
international operations. The scope of the indicator was changed in 2010, but it was not possible to review the historical basis due
to the change in the classifi cation and defi nition of the concept of outsourced workers.
With Natura's business expansion across Latin America, our staff increased by 12.4% in 2010. The commencement
of international activities created challenges, making our structure more complex and more culturally diverse. We
intend to extend our best practices to employees working in other countries in which we operate.
Our organizational climate survey indicated a drop of one percentage point in the overall satisfaction with the
workplace environment, with a 73% rate of favorable responses from our employees. This indicator was below our
target of 76% . In Brazil, this fi gure remained at 72%. We achieved a signifi cant improvement among administrative
staff and maintained a high rate among the sales force.
Notwithstanding our efforts, there was a decrease in favorable responses from our operational staff. This suggests
that actions such as the Renovação (Renewal) Program and its career and development initiative, Meu Caminho
(My Way) (learn more on the next page, Education), are falling short of their goals. This program was implemented
in the second half of 2010, and we believe that it will begin to show greater benefi ts in 2011.
1. Due to a calculation error, a 77% target was included in last year's report.
T H E GOO D R E S U LT S O F T H E AC T I O N S
TAKEN IN MORE THAN 40 YEARS WERE ONLY
ACHIEVED BECAUSE OF OUR DEDICATED
STA F F A N D IT S A LIG N M E NT TO OU R
ESSENCE
. MAINTAINING THE QUALIT Y OF
OUR RELATIONSHIP WITH EMPLOYEES IS ONE
OF OUR PILLARS FOR PROMOTING SUSTAINABLE
DE VELOPMENT AND VALU E GENER ATION .
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45
According to the survey of the operational staff, we made progress in factors such as Leadership, Perfor-
mance Management, Development, Communication, Quality of the Decision-Making Process, as well as Re-
muneration and Benefi ts, the aspects of the Renovação Program where the most headway has been made.
In 2011, we intend to improve the Career and Management aspects of the program.
Another issue that needs to be addressed, particularly among the administrative staff, is the management of
our physical facilities, which no longer meet current requirements. We will, therefore, in the fi rst half of 2011,
inaugurate new facilities for our operations.
Satisfaction with the overall quality of the workplace also declined in our international operations. This was
the result of specifi c factors in countries such as Argentina, Chile, and Peru and because of events related to
the implementation of our international business strategy. These events generated restructuring actions in
some countries. We aim to improve the execution of strategies that we believe will strengthen the quality of
our relationships with international employees.
ORGANIZATIONAL CLIMATE ­ APPROVAL (%)
1 2
2008
2009
2010
Brazil 69
72
72
Argentina 80
77
64
Peru 77
78
71
Chile 83
77
69
Mexico 85
84
82
France 60
75
72
Colombia 84
88
84
Natura 72
74
73
1. Percentages indicated are the share of employees who rated 4 and 5 on a scale of 0­5, with 5 being the highest score. The survey
considers such issues as management, workplace environment, and career development.
2. The research methodology was adapted to incorporate the assessment of our Culture Drivers. The change, however, does not affect
comparability with the results of previous years.
We also measured employee loyalty, which registered 30% in 2010. This indicator tracks general satisfaction,
intention to continue a relationship with Natura, and whether they would recommend our brand. We also
measure the loyalty of our employees, and we are now reporting these results for the fi rst time. Monitored by
Natura since 2009, this indicator cross-references information about overall satisfaction and the intention to
continue working for Natura and to recommend the company. In 2010, we achieved a result of 30% on this
indicator, one percentage point below the previous year. For 2011, we want to reach 32% loyalty in this indicator,
which will now be the main gauge of the quality of our relationship with employees.
EDUCATION
Education was an important theme in our relationships with employees during 2010. Despite falling short of our goal
to provide 100 training hours per employee in Brazil, we reached 90 hours and consider this result very signifi cant. In
2011, we plan to monitor educational efforts in our international operations.
AVERAGE HOURS OF TRAINING PER EMPLOYEE PER YEAR IN BRAZILIAN OPERATIONS
1
2008
2009
2010
Production 105
86
90
Administrative 90
79
90
Management 68
61
83
Board 9
78
67
Total² 94
82
90
1. This indicator includes training of the sales force (sales managers and relationship managers).
2. Includes total hours of all levels divided by the total number of employees in December of the corresponding year.
Delays in the implementation of training programs for our operating staff and our own overly ambitious
timetable for implementation contributed to the lower-than-expected number of training hours provided.
This development program is specifi c for operational employees, and linked to career progress. Employees
expand their knowledge and qualify to take on new positions at Natura through training programs. In 2010,
about 30% of our operational staff participated. Classes take place during working hours and on weekends,
and special classes are offered for the hearing impaired.
We also developed an educational program specifi cally for young apprentices. In addition to receiving the legally
required technical training, apprentices study subjects related to living our values and career development.
The program for apprentices led to the hiring of 134 youngsters in 2010, expanding the opportunities offered
to young people. Despite the large number of admissions, we have still not met the legal quota established by
the Young Apprentice program, although we are working towards compliance with this legislation. The pro-
gram's technical learning was structured in partnership with the National Learning Service and the National
Commercial Learning Service.
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46
More than 2,000 candidates participated in our selection process. The strong demand, in addition to confi rm-
ing the attractiveness of Natura, illustrated the need young people have for new opportunities. Accordingly,
after the selection process, we invited the 500 shortlisted candidates to take part in a careers workshop to
contribute to the professional development of those who were not hired. We also plan to extend the scope
of the program, by helping the youngsters improve their chances of being hired in future selection processes
at Natura or by other companies (read more on page 68, Surrounding Communities).
INVESTMENT IN EDUCATION AND TRAINING OF EMPLOYEES (IN R$ `000)
1
Operation
2008
4
2009
2010
Brazil
2
14,062.0
20,221.3
25,744.0
Argentina 162.5
103,3
93.3
Chile 82.7
164,6
127.0
Mexico
3
473.8
526.3
567.5
Peru 74.9
222,7
210.0
Colombia
3
12.8
21,9
39.9
France 73.4
51,0
100.3
Total 14,942.1
21,311.1
26.882.0
1. Data in Brazilian Reais was converted to U.S. dollars at US$ 1: 2008 - R$ 1.8346; 2009 - R$ 1.7412; 2010 - R$ 1.71.
2. The fi gure for investment in Brazil incorporates investment in Corporate Education, including courses with Time Jobs, and Sales Force
training (sales managers and relationship managers). For International Operations, it incorporates education courses for employees, includ-
ing relationship managers and team work.
3. Historical data for Mexico and Colombia contained inconsistencies and was recalculated.
4. The operation in Venezuela was closed in 2009 and investment in education in 2008 was 98.1.
In 2010, we also organized some specifi c educational activities in the area of innovation, primarily for our
research and development staff. We invested in the use of new formats and methodologies, staging in-person
and virtual courses, as well as dialogue and discussion sessions and workshops. We also run the Natura Educa-
tion Program, which grants scholarships to employees and their family members to encourage continued
learning. In 2010, we invested R$862,000 in the program (see tables).
IN THE BRAZILIAN OPERATION - NATURA EDUCATION PROGRAM
1
2008
2009
2010
Scholarships awarded
473
611
546
Scholarships awarded/enrollment (%)
32.6
48.3
43.2
Amount invested in Natura Education (R$ thousands)
720
841
862
1. Includes all employees enrolled and selected during the year.
NATURA EDUCATION PROGRAM - COURSES HELD BY EMPLOYEES
OR FAMILY MEMBERS WHOLLY OR PARTLY SUBSIDIZED BY NATURA (BRAZIL)
2008
2009
2010
Technical/vocational 48
77
47
Languages 118
117
134
Pre-university 11
6
5
University 219
292
259
MBA and postgraduate
77
119
101
All new employees in Brazil (including in-house outsourced workers) undergo integration training, where they learn
about topics related to human rights, the environment and social responsibility. These issues are also addressed in
lectures that are open to all our employees. In total, we offered 5,593 hours of training in these programs in 2010. Al-
though we have no specifi c training on issues related to corruption and human rights, all our new employees learn our
Relationship Principles, which are inspired by the Declaration of Human Rights. These principles clearly demonstrate
our offi cial stance against corruption ­ banning all forms of bribery, corruption and kickbacks.
Our internal security staff at Cajamar have received special training on human rights and techniques for approach-
ing and searching people before they can work on the random search system at Cajamar. Implemented as a pilot
project in 2010, the searches may be conducted on employees of all levels at the company and are randomly defi ned
by electronic sensors installed at the parking exits and the bus terminal. The purpose of the searches is to preserve
company property.
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47
ORGANIZATIONAL CULTURE
By developing our organizational culture, we lay the groundwork for our Vision of the Future and reinforce our
Essence among our employees. These efforts align behavior, strategies, programs, processes, and relationship
expectations.
In 2010, we developed seven Culture Drivers (learn more on page 3), inspired by our Essence. These drivers pro-
vide clear guidance for our choices and attitudes and illustrate the behaviors and values expected by the company.
These drivers were the result of a collaborative process that involved the company's founders, the Executive
Board, and the leadership team. We also considered suggestions made in 2009 by nearly 150 employees in the
administrative, operational, and sales areas. The drivers will be rolled out to all Natura employees in 2011, when
we will also review our main practices, symbols and organization systems, and set forth the procedures to gua-
rantee the ongoing promotion and reassertion of our culture.
LEADERSHIP
A leadership team that is committed to our Essence is fundamental to our growth. Natura has invested in the
training and development of almost 600 leaders in Brazil and abroad. In 2010, we fi lled 62% of our open leadership
positions with internal staff.
In 2011, we will establish a leadership-specifi c educational program that will support our desired organizational
competencies. We believe this will strengthen our organizational culture. The project will include onsite classes and
distance learning; study groups formed by people with similar interests; workshops; and activities that promote the
exchange of knowledge and ideas.
The intent of this program is to qualify leaders and to strengthen our succession plans. We map our critical positions
and, at the end of 2010, had defi ned a succession plan for 40% of our short-, medium-, and long-term positions.
Our leaders currently have their careers monitored by external consultants. In 2011 we will implement a pilot
project for internal members of the Executive Committee and the Board of Directors to become mentors and
accompany the long-term development of leaders.
We have started to analyze the career development of these leaders using a 360-degree feedback assessment,
which makes an appraisal of the individual based on a self-assessment and the perception of their superiors, peers,
subordinates and other stakeholders such as suppliers. Far more transparent and participative, this assessment also
addresses performance and adherence to Natura's Essence. Through a process of engagement, the leaders can
evaluate their life purposes inside and outside Natura and, after also considering the external evaluations, prepare a
development plan for the next fi ve years. In 2011, we plan to extend this assessment process to the administrative
and operational staff.
ATTRACTION AND ENGAGEMENT
Natura relies on recruitment-and-selection processes that attract candidates who are not only technically quali-
fi ed but who also identify with our Essence and values.
The new attraction model implemented in 2010 moves in this direction and goes beyond the traditional selec-
tion model. We view the application process as an opportunity for individual personal and career development.
We also seek feedback from applicants at all stages of the selection. We aim to stimulate a refl ection about the
process. This initiative will formally begin in 2011.
This model has already been applied to our trainee program, back in 2009. Lasting two years, the 35 selected
young people participated in a comprehensive selection process guided by diversity, without considering univer-
sity education or fl uency in languages, and with the age limit increased to 28 years.
Though we have established a strong track record for fi lling leadership positions with internal staff, we did not
reach the target we established for ourselves in 2010. Compared with 2009, the internal fi ll rate dropped by
25 percentage points, in part because of Natura's growth and because of steps taken to incorporate strategic
market competencies. To reverse this trend, we redesigned our job opportunities program, which encourages
employees to seek professional growth. The job opportunities program also addresses the responsibilities of all
involved in the process, including candidates, the hiring manager, and Human Resources. In 2011, this program
will be extended to our international operations. We also made eligibility-for-advancement criteria more fl exible
and strengthened efforts to promote job openings.
Outside Brazil, we offer "global opportunity allowances" that enable employees to move to other countries. This
initiative will help us form a multicultural team and allow staff to share knowledge and experiences.
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48
Our international operations strategy depends on the formation of mixed teams of employees who are respon-
sive to our value proposition and people who are knowledgeable about these markets. Currently, most of the
staff within our international operations consist of local professionals.
TURNOVER
We registered a small increase in employee turnover in Brazil in 2010 (see table). This increase is primarily due
to Natura's decision to dismiss employees with low performance or commitment.
In our international operations, Mexico registered a signifi cant drop in turnover rates. This was the result of bet-
ter-defi ned employment profi les, as well as improved recruitment, selection, and monitoring of new employees.
Increased turnover in Peru resulted principally from the restructuring of the Sales Department and the resulting
change in job requirements. In Chile, the increase in turnover was driven primarily by temporary outsourcing
after a February 2010 earthquake.
EMPLOYEE TURNOVER (%)
1
2008
2009
2010
Brazil 12.4
7.5
8.4
Argentina 16.6
12.5
12.3
Chile 13.9
13.6
16.4
Mexico 42.7
25.3
11.6
Peru 12.2
16.6
26.6
France 35.0
15.5
12.6
Colombia 35.4
39.7
21.0
1. Although we monitor data by age group and gender, we do not take this information into account in our business.
TOTAL DEPARTURES
2008
2009
2010
Brazil 891
551
641
Argentina 50
38
40
Chile 29
36
49
Peru 33
49
75
Colombia 35
31
37
Mexico 121
81
38
France 20
11
5
Considering the members of the senior management recruited from the local community, we achieved a rate
of 100% in France, 67% in Argentina, 33% in Chile and 17% in Colombia and Mexico. In Peru, we have yet to
hire local staff.
All our employees with less than three months service participate in our Performance Management Program
and receive regular feedback during their assessment cycle, in addition to structuring their own individual de-
velopment plan.
In 2010, we extended the scope of the analysis, with a view to providing a clearer performance management in
the assessment of our employees, and to offering more assertive and effi cient feedback.
VOLUNTEERING
We are restructuring the initiative in 2011 to encourage more of our employees to participate in the corporate
volunteering program, whose goal is to foster transformation opportunities through volunteer work. In 2010,
we registered 57 participants. The staff who enrolled in the program worked on social projects during business
hours and, in some cases, over the weekends.
DIVERSITY
Building a more equitable and sustainable society depends on respect for diversity. In Brazil, the main challenge
is social inclusion, and the insertion of classifi cations such as age group and gender is not, by itself, a guarantee
of diversity.
Education provides the best path to social inclusion. Companies' efforts to improve the quality of education
beyond their own doors can have a substantial impact on inclusion and promote the personal and professional
maturity of the employees (learn more on pages 30 and92 High-High-priority Topics/Education and Generation
of Social Value).
1. POSITIONS FILLED
BY INTERNAL STAFF-
PLACES OFFERED/TAKEN
BY EMPLOYEES (%)
2008
2009
2010
61
71
36
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49
Our vision of diversity also consists of engaging professionals in regions where we operate. Their experience
with other societies, cultures, and value systems provides us with a means for improving our relationships with
our stakeholders. In our units, 23% of leaders have had professional experience in other countries.
Although our vision on the theme has evolved, we know that we still have to improve our positioning regarding
diversity and deploy more effective actions.
MULTICULTURE
1 2
2008
2009
2010
Total foreign leaders or leaders
with international experience
n.d
12
27
Percentage of foreign leaders or of leaders with
international experience in relation to all leaders (%)
n.d
13
23.1
1. Includes process management, business and global leaders.
2. We take into consideration current or past international experience in Natura in operations with nationality different to that of the
employee and with a minimum duration of two years.
In 2010, we recorded an increase in the hiring of people with disabilities, although still slightly below the mini-
mum quota of 5% established by law, as a result of the higher rise in the staff numbers than the growth in the
hiring of these employees. We are streamlining our program to provide for the development not only of people
with disabilities, but also for their managers, and we are also hiring people with different types of disabilities.
We believe that in addition to simply complying with the hiring quota, we have the responsibility to promote
the integration of disabled employees in the company, in society and with coworkers, which is why we are now
offering more basic skills training courses, attended by 217 people in 2010, nearly three times the previous year.
We also completed the training of 57 employees in sign language, to act as facilitators to improve the inclusion
of the hearing impaired.
DIVERSITY ¹
2008
2009
2010
Total employees in Brazil
4,386
4,821
5,509
Women
In relation to total employees (%)
63.7
60.5
60.7
In management positions compared to
the total number of management positions (%)
52.3
51.9
54.2
In board positions compared to the total
number of board positions (%)
19.2
17.6
21.7
Above 45 years
In relation to total employees (%)
10.5
12.2
10.6
In management positions compared to
the total number of management positions (%)
8.2
11.3
9.2
In board positions compared to the total
number of board positions (%)
38.5
35.3
28.3
1. In this edition, we no longer report the classifi cation by race due to a different understanding about diversity, which involves broader
concepts of social inclusion.
HIRING AND TRAINING OF PEOPLE WITH DISABILITIES (BRAZIL)
2008
2009
2010
Employees with disabilities
237
236
249
People with disabilities in relation to total employees (%)
5.4
5.0
4.5
People with disabilities, trained in the
Basic Professional Skills program
39
67
217
COMPENSATION
Our compensation practices follow the corporate policy effective in all countries. However, if inecessary,
we may adjust amounts and potential earnings in accordance with each market.
Salaries are established according to reference surveys, the salary structures of Brazilian or multinational
companies, publicly held companies, and companies whose compensation practices are similar to ours. The
comparability is based on the scope and complexity of functions. We maintain a salary average that is in
line with market practices.
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50
PROPORTION OF LOWEST WAGE COMPARED TO THE MINIMUM WAGE IN EACH COUNTRY
2008
2009
2010
Brazil
1.2
1.1
1.4
Argentina
1.5
2.0
1.7
Chile
1.4
1.3
1.3
Peru
1.6
1.7
1.0
Mexico
4.6
4.8
4.6
Colombia
1.1
1.6
1.1
France
1.1
1.5
1.1
We also offer a variable compensation model adjusted to the characteristics of each stakeholder, with specifi c
forms of payment, targets, and amounts. Income distributions to nonexecutive stakeholders are limited to 3% of
the operating income. In 2010, our operational employees received, on average, the equivalent of three additional
months' salary in variable pay.
Looking to cater to the growth and the internationalization of the company, we offer an expatriate program with
a package of special services and benefi ts, as well as development and career opportunities. We currently have 30
expatriate employees at our operations in Chile, Argentina, Peru, Mexico, Franca and Colombia.
In 2010, collective bargaining agreements provided our employees in Brazil with a salary increase of around 7.17%.
Female administrative employees who comprise the sales force ­ relationship managers and sales managers ­ re-
corded a higher salary increase than the collective bargaining agreement due to the sales bonuses they obtained.
Over the year, the sales bonuses earned by the female staff increased 7.8% compared to 2009.
RATIO OF WOMEN'S SALARIES COMPARED TO MEN'S (BY EMPLOYEE CATEGORY) (%)
2008
2009
2010
Operational -18.34
-15.59
-15.83
Administrative 13.56
32.80
30.43
Managers -4.38
-5.63
-4.44
Executives -19.60
-18.62
-19.00
SALARY PROFILE (R$) - AVERAGE MONTHLY SALARY IN OPERATION BRAZIL
1 2 3
2008
2009
2010
Women - total (R$)
4,352.0
4,755.1
4,943.6
Average monthly salaries for production jobs
1,104.5
1,150.0
1,201.6
Average monthly salaries for administrative positions
5,287.9
6,137.4
6,189.8
Average monthly salaries for management positions
12,341.1
13,105.1
13,351.0
Average monthly salaries for board members
31,185.9
34,309.8
37,195.7
Men - total (R$)
3,550.3
3,574.3
3,851.9
Average monthly salaries for production jobs
1,352.5
1,362.3
1,427.5
Average monthly salaries for administrative positions
4,656.4
4,621.5
4,745.5
Average monthly salaries for management positions
12,906.9
13,886.2
13,971.7
Average monthly salaries for board members
38,788.7
42,162.5
45,919.0
Over 45 years (R$)
7,540.2
8,067.5
8,088.8
Average monthly salaries for production jobs
1,676.3
1,712.7
1,770.2
Average monthly salaries for administrative positions
8,161.9
8,961.0
9,166.3
Average monthly salaries for management positions
15,198.0
17,437.9
18,343.6
Average monthly salaries for board members
38,395.8
38,242.9
44,089.5
Up to 45 years (R$)
3,653.3
3,850.4
4,095.0
Average monthly salaries for production jobs
1,213.6
1,240.7
1,293.2
Average monthly salaries for administrative positions
4,652.1
5,266.5
5,304.9
Average monthly salaries for management positions
12,379.8
13,068.4
13,144.4
Average monthly salaries for board members
36,658.4
41,570.5
43,637.8
1. The calculation does not consider payment of short-term incentives (Profi t Sharing).
2. Bonuses paid to sales managers and relationship managers were considered for the purpose of calculating this indicator. Sales
employees, when distributed in categories, reinforce the average female wages by sales bonus, excluding production jobs.
3. In this edition, we no longer report the classifi cation by race due to a different understanding of diversity, which involves broader
concepts of social inclusion.
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51
In all our operations, we follow the standards and limits established by local legislation concerning collective
bargaining. In Brazil, for example, the collective bargaining agreements sealed with unions include all employees.
We recognize and uphold the right of all employees to be represented by their respective unions, although we
have no formal processes in place to identify operations in which the right to exercise freedom of association
and collective bargaining may be at risk. However, our employees have the Natura Ombudsman's Offi ce at their
disposal to report any type of complaint (read more in Quality of Relationships). Natura's relationship with
unions is managed by the Human Resources Department and we organize meetings to discuss agendas that are
set in advance with union representatives.
Even though prior notifi cation of operational changes is not specifi ed in the collective bargaining agreements,
we always make an effort to communicate these changes in advance and, upon doing so, provide clarifi cations.
In our pension scheme, each employee can decide on the amount they wish to contribute, from a scale of 1%
to 5% of their salary, and Natura will add another 60% to their contribution. The scheme is optional and avail-
able to all employees in Brazil. With the exception of relationship managers and sales managers, who receive
bonuses proportional to the results they achieve, all our employees receive, in addition to their annual salary,
two additional month's wages at the end of each year (known in Brazil as the 13
th
and 14
th
salaries, the 13
th
being required by law).
Natura does not have any formal program to prepare employees for retirement, although in 2011 we are going
to implement a pilot project for our relationship managers. The project consists of a series of workshops on
career transition that are intended to promote refl ection on the future. Individual sessions will also be organized
throughout the year for the relationship managers. Among other topics, these sessions will address career plan-
ning, alternative activities such as a second job or volunteer work, and saving and investing. The program is vol-
untary and geared towards managers who are approaching retirement. The project will eventually be expanded
to include all employees.
BENEFITS
Our benefi ts policy is centered on the idea of offering well-being to all who work with us. Learn about the
benefi ts offered:
Benefi ts offered to employees in the Brazilian Operation:
¾ Natura Educação (Natura Education) Program: scholarships for employees and their families
¾ Construindo o Futuro (Building the Future) Program (includes savings incentives): Encourages the habit
of saving among employees
¾ Nursery for employees' children up to 2 years and 11 months of age
¾ Support for adoption processes
¾ Health care plan
¾ Dental care plan
¾ Check-up for employees from management level upwards
¾ Partial reimbursement of drug costs for cardiovascular diseases, diabetes, renal failure, cancer, liver
diseases, neurological disorders, work-related musculoskeletal disorders and psychiatric disorders
¾ Telemedicine: ECG by phone in emergencies
¾ Saúde em Movimento (Health in Motion) Program: encouraging physical activity. Medical and nutri-
tional evaluations and also of physical fi tness before starting activities
¾ Fitness Center Grant for Relationship Managers and Sales Managers
¾ Five free products per month for employees at managerial level
¾ Health Area: Urgent and emergency medical care, physiotherapy, RPG, gynecology and obstetrics,
acupuncture, orthopedics, nutrition and psychology. Also included are programs for Hearing Conser-
vation and Occupational Health Medical Control with examinations for admission, periodic exams,
job changes, return to work and layoffs, and activities for early detection, treatment and monitoring
of cases of occupational diseases
¾ Quero Estar Bem (I Want to Be Well) Program, created in 2010, includes all the specialties and profes-
sionals of the Health Area, considering the human being fully in four dimensions: physical, emotional,
spiritual and social (read more in Worker's Health and Safety).
As well as these benefi ts, the employee is entitled to:
¾ Ergonomics Program, which seeks a productive and comfortable adjustment of the worker to their work,
promoting the changes necessary for their well being, inside and outside the company.
1. CONTRIBUTIONS
MADE BY NATURA TO
EMPLOYEE PENSION
PLAN (R$ MILLION)
1. The company's contributions
increased due to the end of the
surplus situation of the pension fund
3,076.0
2008
1,387.0
2009
2,527.8
2010
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52
¾ Social Services. Ensures employees an opportunity for discussion, understanding and resolution of issues
of a social order.
¾ Workplace exercise program
¾ Purchase of fi ve Natura products per month with 40% discount
¾ Vacation Project (activities in Espaço Natura, in July, aimed at employees' children aged between 6 years
and 12 years 11 months)
¾ Professional guidance
¾ Cuidando de Quem Cuida (Caring for Carers) Program: postnatal meeting, course for pregnant women
¾ Subsidized day care and special needs care (offered to employees with children with special needs), to
defray the costs of education
¾ Life Insurance
¾ Payroll deduction loan
¾ Vehicles for management-level employees
¾ Family Moment: entertainment, culture and recreation for employees with children up to 9 years 11
months and distribution of toys
¾ Pharmacy Agreement
¾ Contracted transportation
¾ Runners Project, running and walking workouts monitored by specialized professionals
¾ Restaurant
¾ Christmas Basket
¾ Gifts (Mother's Day, Father's Day and birthday)
¾ Sale of Discounted School Materials
¾ Fitness, swimming pool and multisport court services at Natura Club (Cajamar and Itapecerica da Serra)
and Well Being Area
¾ Services and facilities: seamstress, laundry, shoemaker, optician, insurance, postal services, rental of books
and videos
¾ End of Year Party
¾ Celebrations for years worked
Benefi ts offered to resident third parties:
¾ Course for pregnant women
¾ Health Area - emergency care
¾ Runners Project
¾ Restaurant
¾ Workplace exercise
¾ Toys
¾ Christmas Basket
¾ Contracted transportation
¾ Fitness, swimming pool and multisport court services at Natura Club (Cajamar and Itapecerica da
Serra) and Well Being Area
¾ Services and facilities: seamstress, laundry, shoemaker, optician, insurance, postal services, rental of
books and videos
¾ Gifts - Mother's Day and Father's Day
HEALTH AND SAFETY
We continued to step up our safety efforts, investing R$882,000 in accident prevention in 2010. We main-
tained throughout the year the same low level of work-related accidents as in 2009: 17 in total, of which 7
were accidents with leave and 10 were accidents without leave.
A special project conducted with service suppliers cut the number of accidents suffered by outsourced workers
by 25%. An analysis of the accidents indicates that workplace behavior is the main cause of injury. For 2011, we
intend to concentrate on developing and implementing a system of health and safety management that focuses on
avoiding risky behavior, and on providing better support and services to our units in both our Brazilian operations
(distribution centers, Natura Houses, etc.) and our international operations.
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53
TYPICAL INJURIES AND LOST WORKDAYS AND WORK-RELATED ABSENCES (INCLUDING OUTSOURCED
EMPLOYEES) IN THE BRAZILIAN OPERATION 1
2008
2009
2010
Employees - number of accidents with leave²
16
12
7
Employees - number of accidents without leave³
5
5
10
Number of work accidents per employee
0.005
0.004
0.004
Outsourced employees ­ number of accidents with leave
4
11
4
4
Subcontractors - number of accidents without leave 4
2
4
2
Working days lost5
131
84
64
Frequency rate of accidents with leave
6
1.71
1.31
0.69
Frequency rate of accidents with/without leave
7
2.24 1.85
1.67
Investment in disease prevention per employee (R$)
479.6
707.4
736.5
Investment in accident prevention per employee (R$)
8
722.8
851.5
882.5
Number of cases of occupational diseases reported
to the National Social Security Institute ­ Cajamar
5
10
9
Number of occupational diseases reported to the
National Social Security Institute on - Itapecerica da Serra
1
0
0
Rate of absenteeism (%)
9
n/a
n/a
5.45
Number of deaths
0
0
0
Occupational illness frequency rate
10
0.64
1.09
0.88
1. This includes accidents recorded in the units of Cajamar, Itapecerica da Serra, Barueri, São Paulo, Benevides and distribution centers.
2. Accidents with leave are those in which the employee does not return to their activities on the next working day.
3. Accidents without leave are those in which the employee returns to work on the same day of the accident or the next working day.
4. This includes our "resident" and "non-resident" service providers.
5. This refers to Natura employees.
6. Equal to the number of accidents with leave per million man-hours worked (HHT).
7. Equal to the number of accidents or employees involved in accidents with or without leave per million man-hours worked (HHT).
8. Includes the entire budget of the Department of Occupational Safety, expenditures and investments carried out by the Engineering and
Manufacturing area to guarantee and/or improve occupational safety conditions. This does not include spending on training.
9. We began tracking the rate of absenteeism in 2010.
10. Number of cases per 106 man hours worked.
Formal agreements with unions include measures to improve workplace protection, namely the use of
protection equipment, procedures for the prevention of accidents with machinery and equipment, commu-
nication of workplace accidents, and the installation of an Internal Accident Prevention Commission (IAPC).
All our employees in Brazil are represented in formal health and safety committees and also in the different
IAPCs, on which any company employee, regardless of their seniority, may serve. They observe the follow-
ing structure: 50% of their representatives appointed by Natura and 50% appointed by our staff.
We invested R$736 million in health management in 2010 and we prepared a diagnosis of the health of our
staff. Based on this assessment, in December 2010 we launched an illnesses prevention program to encourage
employees to take care of their health. One of the initiatives involves better management of more complex
health issues, in which employees or their dependents who have a specifi c condition will be invited to take part
in programs to monitor their health problem. We shall also launch in 2011 a program to prevent hypertension.
Once identifi ed, cases of occupational illness are treated by a multidisciplinary team made up of occupational
health doctors, an ergonomist, an orthopedist, a physiotherapist, an acupuncturist, a psychologist, Global
Postural Reeducation (GPR) therapy and a social worker. Furthermore, frequent evaluations will be made of
our work stations and we also offer workplace exercise classes for everyone at the company.
In November 2010, 33 employees, part of a group working in special areas of the factory to rehabilitate
from physical injury, were dismissed by Natura. The layoffs followed a thorough evaluation and were made
exclusively due to lack of commitment and improper behavior in the workplace. Natura operates in strict
compliance with legislation and we are confi dent that we have always acted respectfully and transparently
towards our employees. The dismissed employees who had surgeries scheduled, in accordance with prevail-
ing legislation and their employee category's collective bargaining agreement, had their health insurance ex-
tended. When questioned by the Labor, Administration and Public Service Commission of the Lower House
of Congress, we presented all the necessary explanations concerning the layoffs.
COMMUNICATIONS WITH EMPLOYEES
In 2010, we made improvements to the quality of our communication with the operational staff, including chang-
es in the use of language and an expansion of the specifi c means of communication for this group of employees.
We also segmented the Natura TV Channel, which is broadcast at 23 points in our Brazilian operations, offering
specifi c programming for our operational employees. We also improved communication with the staff at the
Benevides Industrial Plant.
Employees can also use Natura Nós (Natura Us), an internal social network that is also available to in-house
outsourced workers and relationship managers. In 2010, a review of the network was made and improvements
will be introduced in 2011.
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54
In 2010, we reached an impor tant milestone: Our sales force exceeded 1 million consultants in Brazil and
200,000 in our international operations. The number of sales consultants grew by 18% in Brazil, and by
more than 20% internationally.
Favorable economic conditions aside, this development is due primarily to the consolidation of our Natura
Consultant Adviser (NCA) model. Natura completed its fi rst operating cycle in all regions of Brazil in 2010
using the new NCA model. NCAs are a signifi cant par t of our commercial strategy and enable a closer re-
lationship with our consultants. Within this structure, relationship managers work more closely with NCAs,
each of whom, in turn, offers suppor t to up to 150 consultants by providing guidance and assistance to
their development, in addition to working as consultants themselves.
In 2010, we had more than 11,000 NCAs, 24% more than in 2009. Relationship, commercial training, and
sales actions focused on new consultants played an impor tant role in promoting the growth of the sales
channel. Together with the NCA platform, these activities converged to produce one of the lowest turno-
ver rates ever at Natura.
In our international operations, the most signifi cant factors fueling the growth of our sales force were
increased recognition of our brand, consultant-recruitment campaigns, management-improvement proces-
ses, and better monitoring of the sales channel.
NUMBER OF CONSULTANTS IN BRAZIL AND INTERNATIONAL OPERATIONS (THOUSANDS)¹
2
2008
2009
2010
Brazil 730.1
879.7
1,028.7
Argentina
37.3
46.5
53.2
Chile 17.5
24.5
31.0
Mexico 20.0
31.2
41.2
Peru 35.2
42.6
45.5
Colombia 5.9
13.0
19.0
France 0.8
1.4
2.5
Total 846.8
3
1,038.9
1,221.1
1. In Brazil, the fi gure refers to the number of consultants available at the end of the year.
2. In the international operations, the data refers to the closing position of cycle 17.
3. Operations in Venezuela, with 2,800 consultants, were discontinued in 2009.
Our international operations are not based on the NCA model. In 2010, however, we implemented a project
in Mexico inspired by the success of this initiative in Brazil. We created the Natura Consultant Entrepreneur
(NCE), whose primary function is to attract new consultants and promote entrepreneurship. This strategy is
based on the characteristics of local markets and was designed to boost Natura's direct sales in Mexico by
attracting new consultants to our business and value generation model.
The quality of our consultant relationships is a key driver of our success. We held six dialogue panels in 2010
to detect improvement opportunities and build collaborative solutions that may assist in the development of
our activities. Some of these meetings were attended by consultants and NCAs who had been working with
the company for less than a year and a half, as well as by former consultants and NCAs who worked with the
company less than 18 months. The purpose was to gain a better understanding of the challenges consultants
faced in the early stages of their work with Natura.
5,844
9,083
11,276
2008
2
2009
3
2010
1. NUMBER OF NCAs
IN BRAZIL
1
1. Refers to the number of NCAs
at year's end.
2. Includes Midwestern, São Paulo
Interior, Northeastern, Rio de
Janeiro, and Minas Gerais regions.
3. The increase in the number of
NCAs is related to the expansion
of the model in São Paulo Capital,
North, and South regions.
4.3
CONSULTANTS
AND NCAs
OUR SALES CONSULTANTS ARE A
FUNDAMENTAL COMPONENT
OF OUR BUSINESS MODEL. THEY NOT
ONLY SELL OUR PRODUCTS BUT ALSO
DI S S E MINATE OU R E S S E NCE
A N D O U R VA LU E P RO P O S I T I O N .
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55
The level of satisfaction is permanently monitored, and our relationship-quality rates have remained stable
over time. The loyalty of our consultants increased from 17% to 21% in 2010. The loyalty index of our NCAs
has fallen. Because of the novelty of the NCA model, we still face challenges, such as our response time in
meeting NCA needs. We continue to seek ways to improve this relationship.
QUALITY OF RELATIONSHIPS WITH CONSULTANTS (BRAZILIAN OPERATIONS) (%)
1
Jan/08
Jan/09
Jan/10
Satisfaction
2
88
88
90
Loyalty
3
16
17
21
QUALITY OF RELATIONSHIPS WITH NCAs (BRAZILIAN OPERATIONS) (%)
1
Jan/08
Jan/09
Jan/10
Satisfaction
2
93
95
94
Loyalty
3
31
37
32
1. As of 2010, we have modifi ed the survey criteria, no longer monitoring the relationship with consultants and with NCAs and instead
adopting Satisfaction and Loyalty as indicators of the quality of the relationship.
2. Consultants and NCAs either "satisfi ed" or "completely satisfi ed." - Top 2 Box
3. Loyalty denotes Top Box for satisfaction, intention to continue a relationship with Natura, and willingness to recommend the brand.
INCOME AND PRODUCTIVITY
Average annual income distributed to consultants increased, from R$3,900 in 2009 to R$4,100 last year. These
data are positive in light of the signifi cant increase in the numbers of new consultants joining us in recent years,
and they are now quicker to reach the productivity levels of those who have been active for longer. However,
there was a slight decrease in NCA per-capita income due to the business model's rapid growth.
ANNUAL AVERAGE INCOME GENERATED IN THE BRAZILIAN OPERATIONS (R$)
2008
2009
2010
Natura Consultant Advisers (NCAs)¹
3,380
9,841
9,802
Natura Consultants
2
4,097
3,987
4,128
1.We consider the catalogue price (full price) and the consultant's 30% profi t.
2. NCAs are commissioned based on performance in terms of number of consultants submitting orders and volume of orders.
TRAINING AND CAPACITY BUILDING
The success of our business strategy also depends on the level of training and engagement of our con-
sultants, so we have been investing increasing amounts of resources in training. In 2010, in Brazil 517,400
consultant trainings took place, exceeding our target of 500,000. We emphasize training oppor tunities for
consultants with less than three years' experience through distance learning and in-person courses; 78%
of these consultants have taken advantage of this. We have also developed a specifi c training model for
our international operations, to be applied in 2011, with a revised approach drawing on our experience
in Brazil and the content adapted to local needs. These activities are comprehensive and cover product
knowledge, sales techniques, and socioenvironmental awareness.
Natura Houses are used for training and for Natura meetings at the beginning of each cycle, when we
present new products and developments to our consultants. In 2010, we opened two new Natura Houses
in Brazil, one in the Itaquera neighborhood of São Paulo and the other in Santo André, a city inside the
metropolitan region of São Paulo. The latter caters to a smaller number of consultants, enabling a closer
relationship with them to achieve even greater engagement. We also opened three new units for our in-
ternational operations: one in Lima, Peru, and one each in Buenos Aires and Cordoba, Argentina. In all, we
have seven Natura Houses in Brazil and 15 abroad.
PARTICIPATION OF CONSULTANTS IN TRAINING IN BRASIL (IN THOUSANDS)
2008
2009
2010
New consultants
304.0
430.2
457.9
Initial training
164.9
354.4
360.9
Training participations
1
458.2
583.0
592.6
1. May include more than one participation by the same Natura consultant even when repeating a training course.
New consultants take part in induction training, during which they are monitored from the moment they join
Natura until they receive the products from their fi rst order. This allows them to familiarize themselves with the
work of consultants and with our value proposition. They also have at their disposal on the internet our Portal do
Conhecimento (Knowledge Portal), with exclusive content and news for consultants, information about Natura
products and tips about making sales.
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56
We completed the course given in partnership with the National Service for Commercial Education (Senac), in
which we offered our consultants in São Paulo training in entrepreneurship and make-up techniques, and we are
looking to forge new partnership to continue the project. We continue to invest in new initiatives to improve pro-
fessional development, such as special training in new products that we consider strategic.
For NCAs, we upgraded the initial training program, extending the course from just two days to one month, and
basing it on in-person meetings, virtual tools and content, while promoting individual refl ection and making available
the support of relationship managers.
For our managers, we offer training on the operational side of the business and to prepare them for an increasingly
more autonomous role as managers of groups of consultants and NCAs. Every two years, managers are invited
to participate in a workshop on our competitive advantages, during which they address topics such as: brand,
products, quality of relations and sustainability. We also decided to extend this training to our NCAs, and 50% of
them took the course in 2010.
As a signatory to the Brazilian Direct Selling Association code of conduct for business-to-business and direct sellers,
Natura develops programs to train consultants for the business and to uphold the company's ethical standards.
In 2010, as in previous years, no legal or administrative cases were fi led against Natura involving any violation of
privacy or consultants' personal data. Nor was there any record of legal cases on issues such as child, hazardous,
or slave labor involving consultants.
QUALITY OF SERVICES
In 2010, we reduced our non-service rate (NSR), reversing the upward trend of 2009. This indicator mea-
sures the nonavailability of products ordered by consultants. Despite this improvement, we are still far from
offering the level of service we hope to provide to our sales channel.
When a nonservice cannot be avoided, we try to minimize the inconvenience caused to our consultants by
offering substitute products and running promotions. We have aligned business areas for service response,
logistics control and marketing planning to ensure effective communication with relationship managers,
consultants, and NCAs in dealing with cases of nonservice.
The changes being made to the logistics model are having a benefi t on the sales channel. In 2010, to ex-
panded capacity and opened new distribution centers, thus raising the quality of service provided to our
consultants and cutting delivery times (Learn more on page 26, Structural Changes).
The increased numbers of distribution centers will improve inventory management and help us to avoid
product loss. In 2010, as par t of our effor t to reduce the NSR, we built up the inventories, though this
results in a higher level of product loss because of label expirations or, in some cases, discontinuation of
sales. In 2011, we will improve inventory management to reduce loss rates.
Complaints from consultants about the services we provide have been reduced nearly 40%. Like the NSR,
this indicator measures their complaints in relation to problems during the order cycle, from requests for
products to their delivery to consultants.
In 2010, we also improved the service through better management of commemorative dates. We surveyed
consultants to anticipate demand at par ticular times, thus infl uencing planning to cater to extra demand.
COMMUNICATION CHANNELS
We have several structured communication channels to suppor t sales activities. The share of consultant
orders placed over the Internet rose to 85% in Brazil in 2010. In 2009, the percentage was 70%. The rate
for our international operations is 69%. In 2009, consultants only in Chile and France were able to place
orders over the Internet; in 2010, Internet ordering was extended to Argentina, Peru, and Colombia. In
2011, it will be extended to Mexico (graph 1).
In addition to making the order-taking process more effi cient, electronic tools also enabled us to enhance and
expand our interaction with consultants. To facilitate access, all Natura offi ces have computers with internet
access for use by consultants, who may be assisted by NCAs to become familiarized with this channel.
Visits to our redesigned Consultancy blog (www.blogconsultoria.natura.net) doubled during 2010, from an
average of 40,000 to 80,000 per month. Visits to our Natura digital magazine (www.natura.net) increased
100%. In February 2011, we also launched a revised digital reader version for the iPad (Learn more on
page 35, in Innovating Innovation).
The Natura Service Center (NSC) is also available to our consultants. The NSC offers a toll-free hotline for
receiving product orders; answering queries about products and services; and handling compliments, com-
plaints and suggestions. We continuously strive to improve this resource, and in 2010 we launched a new
project to settle more queries on the fi rst call. Critical issues are forwarded to the Ombudsman's Offi ce.
4,277.6
8,941.1
12,900.5
2008
2009
2010
1. NUMBER OF ORDERS
PLACED THROUGH
THE CONSULTANT
SITE IN BRAZIL (IN
THOUSANDS)
1
1. Orders taken by a consultant
over the Internet, as billed for
indicated years.
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57
In 2010, the NSC received 23,700 calls a day, down from 28,000 in 2009. This reduction is a direct result
of greater Internet for placing orders; only 14% of orders were made through the NSC, compared with
29% in 2009.
RECOGNITION AND INCENTIVES
We seek to strengthen relationships with our consultants by holding events in which we acknowledge and
thank them. In Brazil in 2010, more than 73,000 consultants were thanked for their length of service, and
more than 9,000 were recognized for outstanding performance in both sales volume and sales of refi lls and
products from Natura's Crer para Ver (Believing Is Seeing) line. Consultants who have been active for 15
years are invited to visit the Natura plant in Cajamar (São Paulo), where they are welcomed at an event and
honored by our directors and vice presidents.
Consultants who have been with the company for fi ve and 10 years receive awards, and we also give prizes
for outstanding sales performances. In 2010, we launched a recognition program for NCAs who made good
progress and achieved strong results.
We also organized incentive campaigns for the purpose of driving up sales, with messages that are aligned
with our value proposal. One of the main events in 2010 was the Chronos Convention, attended by more
than 300 consultants, NCAs and relationship managers.
In the NCA recognition program, 2,200 NCAs were rewarded for their good progress and 3,000 for their
strong results.
RECOGNITION NCS
2008
2009
2010
Total NCs recognized for time in activity
65,000
64,030
73,286
Total NCs recognized for performance
14,493
10,572
9,137
Number of awards for recognition with distinction
1,120
473
473
Number of events of recognition with distinction
56
43
43
NATURA MOVEMENT
The Natura Movement is intends to raise awareness of our values among our consultants and infl uence
positive behavioral changes in their families, customers, and surrounding communities. The Natura Move-
ment involves our own projects as well as external initiatives that are focused on two main pillars: reducing
environmental impacts (with a focus on Natura products) and social transformation (through social inclu-
sion and human-development projects).
Across Brazil, we have worked with 12 projects. Last year, 113,000 consultants were involved in these
activities -- more than twice the number in 2009 and exceeded our goal of engaging 100,000 consultants.
To achieve this goal, we invest our effor ts in raising awareness and mobilization initiatives. In 2010, we set
up our Acolher (Welcome) Program, which provides technical and fi nancial suppor t for environmental
projects developed by consultants across Brazil. The fi rst projects to receive suppor t from the program
will be announced in April 2011.
The program also seeks to promote an exchange of knowledge and to engage consultants in socially res-
ponsible actions. This program's por tal, www.movimentonatura.com.br/acolher, offers a way for consultants
to connect and to share experiences and provides information about other initiatives and social entrepre-
neurship. Almost 3,000 consultants have registered on the por tal, which received more than 100,000 visits
between September and December 2010.
The Natura Movement also suppor ts Natura's Crer para Ver (Believing Is Seeing) program by encouraging
consultants to make online sales of products. In 2010, some 65,000 consultants par ticipated in each sales
cycle (learn more on page 92, Creation of Social Value).
In the Natura Product Recycling program, which encourages consultants to collect the empty product contain-
ers during their visits to customers, more than 184 metric tons of packaging was gathered, compared to 120
metric tons in 2009. We made little progress, however, increasing the number of participating consultants, a
fi gure that stood at around 15,000 last year. We realize that the scope of this recycling is too limited, since it
does not come close to the scale necessary for collecting all the post-consumption packaging. This is why we are
structuring a more comprehensive waste management plan at Natura (read more on page 32 Priority Topics/
Product Impact).
2. CAN - NATURA
SERVICE CENTER IN
BRAZIL
1
32.8
28.0
23.7
2008
2009
2010
1. NCS ENGAGED IN
NATURA MOVEMENT¹
1
n.a.
45,467
113,118
1. Equal to the absolute number of
consultants average/year. This indicator
has been monitored since
2008
2009
2010
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58
This recycling program ­ which was already in place at the end of 2009 in the city of São Paulo and along the
São Paulo state coastline, in the Baixada Fluminense region of Rio de Janeiro, throughout the state of Espírito
Santo and in the state capitals of Recife (Pernambuco) and Salvador (Bahia) ­ was extended to include the
whole state of Rio de Janeiro in 2010. The containers are delivered to our transportation companies, which in
turn deliver them to recycling cooperatives, contributing to raising the incomes of recyclable waste collectors
and to the proper disposal of the containers.
RECYCLING PROJECT
2008
2009
2010
Penetration of participating consultants¹
2.3%
2.4%
1.2%
Total collected (metric tons)²
118.0
120.0
184.3
1. Percentage of participating consultants (delivery of box with waste) out of total consultants active in the cycle.
2. Natura packaging and products after use.
OTHER PROJECTS SUPPORTED BY THE NATURA MOVEMENT
ÁGUA DE VIVER
Realizado em parceria com a ONG SOS Mata Atlântica, grupos formados por CNs, CNOs e gerentes de
relacionamento monitoram a qualidade da água de rios e riachos das comunidades onde vivem e atuam, pro-
movendo o engajamento da população local. Em 2010, foram realizados 76 monitoramentos em 37 cidades
com a participação de 610 CNs.
ÁGUA DE VIVER (WATER TO LIVE)
Developed in partnership with SOS Mata Atlântica, an environmental NGO, groups formed by consultants,
NCAs and relationship managers monitor the quality of the water in rivers and streams in the communities
where they live and work, promoting the engagement of the local population. Last year, 76 monitoring exercises
were conducted in 37 towns with the participation of 610 consultants.
MATA ATLÂNTICA É AQUI (ATLANTIC FOREST IS HERE)
Also run in partnership with SOS Mata Atlântica, a truck travels to Brazilian towns showing an exhibition on the
Atlantic Forest biome and staging activities to raise awareness, mobilize and educate about the importance of
preserving the forest. In 2010, the activities were held in 36 towns with the participation of 4,600 consultants,
while some 114,500 people visited the exhibition.
GRUPO CULTURAL AFROREGGAE (AFROREGGAE CULTURAL GROUP)
The partnership with the Grupo Cultural AfroReggae completed four years in 2010. Natura provides institu-
tional support for the organization in its activities that involve an exchange of knowledge and promote culture.
Last year, 121 consultants participated in the actions of the group that benefi ted some 2,000 people.
RESPEITO SÃO PAULO (RESPECT SÃO PAULO)
The program is organized by Natura and aims to raise awareness among our consultants so they can act as
change agents in the region. Average participation in each cycle of the program was 3,000 consultants.
OTHER ACTIONS
We continue to support the Civil Police of Rio de Janeiro which, together with AfroReggae, engage in dialogue
on human rights and the culture of peace in various different communities in the state, involving 12,000 people
in 2010. We have also started to support the Gol de Letra Foundation in Rio de Janeiro, the Pracatum Associa-
tion in Salvador (Bahia) and the Canta Brasil Socio-Cultural Group in Bento Gonçalves (Rio Grande do Sul).
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59
Over the past two years, we have signifi cantly expanded our efforts to survey, listen to, and engage in dialo-
gue with consumers to understand them better and to offer products that exceed their expectations. The
information we get in return infl uences our strategic planning and provides input for the innovation process.
In 2010, Natura's investment in market research grew 58% from the previous year. It is wor th noting that
we had already taken a major step forward in 2009, setting up our Consumer Insight area to improve
our knowledge of the market and to identify trends. We expanded this initiative to our international
operations in 2010.
In this context, we want to go beyond product-development surveys to examine and understand our
consumers' attitudes and behaviors. We want to be present in all the market segments, from the very fi rst
moments of a child's life through old age. Therefore, we are studying specifi c consumer segments, such
as men, seniors, and preteens. We are also extending consumer behavior research to areas we consider
relevant, such as beauty and conscious consumption.
In 2010, we held our fi rst dialogue panel exclusively for consumers. Twenty-two members of the public
from several regions of Brazil and different age groups par ticipated. At the meeting, we discussed their
ideas for improving our products, services, and activities.
This commitment to strengthening ties with our customers has ensured Natura's continuing high levels of ac-
ceptance, as shown by the Brand Essence/Ipsos image survey. According to this study, 81% of consumers gave
top marks to our brand. In addition, 49% of cosmetics consumers selected Natura as their brand of choice.
Our consumer loyalty rate, which demonstrates consumer satisfaction and their willingness to recommend and
continue to buy our products, is 53% -- a signifi cant increase over the previous year's rate of 46%. Through our
expansion in the Brazilian market, we have reached 55% of homes in Brazil (graphs 1 and 2).
QUALITY OF RELATIONSHIPS WITH CONSUMERS IN BRAZIL (%)
1 2
2008
2009
2010
Loyalty
3
n.a.
46
53
Preference 47
47
49
Would recommend
n.a.
72
78
1. Source: Brand Essence.
2. From 2009 onward, the survey expanded its coverage to include three more cities, totaling six areas. Last year, we did not report the
three new survey areas because there was no historical comparison. In 2010, we are including this analysis, and we have revised the 2009
fi gures accordingly.
3. The loyalty index is calculated based on the percentage of consumers who gave the maximum score for Satisfaction, Intention to Conti-
nue Buying, and Recommendation.
We maintain other channels for engaging consumers, such as our growing Internet presence through social
networks and our own online communities for building relationships with customers. Examples of this prac-
tice include portals called I Love Make-Up (www.adoromaquiagem.com.br), Skin Care (www.cuidedapele.
com.br), and Love in Motion (www.amoremmovimento.com.br). These sites encourage visitors to exchange
experiences. We also launched the Natura Musical portal (www.naturamusical.com.br), a community that
offers information about the project and invites our customers to interact with sponsored artists. In 2010,
these communities registered 3.3 million accesses and were visited by more than 2.7 million people.
Another important factor is the growing consumer interest in gift items suggested by Natura, as sales of these
products have increased twice as fast as our standard items. This can be attributed to a greater perception of the
value of our brand, but also to the information garnered from surveys that led us to reformulate our strategy for
commemorative dates such as Mother's Day, Valentine's Day and Christmas.
4.4
CONSUMERS
80
81
81
2008
2009
2010
1. Source: Brand Essence.
2. The top box overall assessment
metric considers respondents that
gave top marks to the Natura
brand on a scale from 1 to 5.
46,3
52,4
54,8
2008
2009
2010
1. Source: Kantar World Panel.
2. Penetration is the percentage
of households in the population
covered by the survey that have
purchased the brand in the
specifi ed period.
OUR CONSUMER-RELATIONS INITIATIVES
ARE DRIVEN BY OUR DESIRE TO LEARN
ABOUT THE HABITS AND NEEDS OF
THE MILLIONS OF CONSUMERS WHO
U S E O U R P R O D U C T S . W E WA N T
TO OFFER THEM AN EXPERIENCE
THAT STIRS THEIR SENSES AND
PROMOTES WELL-BEING WELL.
1. GLOBAL EVALUATION
OF BRAND IMAGE
SURVEY (BRAZIL) (%)¹ ²
2. PENETRATION
IN BRAZILIAN
HOMES (%) ¹ ²
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60
We also encourage our consumers to play a more active role in product development, such as in the launch
of the Una make-up line. The tones of classic lipstick colors (those most used by consumers), for example,
were chosen based on the results of market research involving more than 2,000 women.
In addition to promoting products, our advertising and publicity also makes a commitment to raising con-
sumer awareness, upholding ethical principles and championing diversity. It also expresses our concern
with advertising to children and with the sustainable use of biodiversity assets.
Natura operates within the rules of the Adver tising Self-Regulation Council and the codes of conduct
of the Brazilian Association of Adver tisers, the Brazilian Consumer Protection Association and the Bra-
zilian Association of Direct Selling Companies. These rules are used organically as guidelines in all our
communications.
CUSTOMER SERVICE
The main channel for consumers to contact us is the Natura Customer Service (NCS). The NCS received
more than 1 million calls in Brazil in 2010, 31% fewer than the previous year.
This decrease is associated with efforts to reduce false reporting of product defects. We began to analyze
products returned by consumers before replacing them and improved our controls as a result. Complaints
fell by 62% , a decrease we believe is associated with the reduction of false reports, and we have become
more effi cient at replacing products that present genuine problems. Information derived from the analysis
of genuine problems contributes to innovation and the continuous improvement of our products and
services.
The initiative has enhanced our response and prompted an improvement in the quality of our service. With
a smaller volume of calls, we have been able to improve the management of NCS services and the number
of unanswered calls fell from 7% in 2009 to 4% in 2010.
NCS - NATURA CUSTOMER SERVICE (CALLS IN THOUSANDS)
1
2008
2009
2010
Total 1,531.0
1,484.4
1,028.9
Answered 1,471.0
1,375.3
987.0
Unanswered 60.0
109.1
41.8
1 Calls relating to Brazilian operations.
As we are concerned with the privacy and confi dentiality of our consumers, everyone who contacts us
through the internet or the NCSC is protected by policies and systems that ensure data security. In 2010, we
did not record any proven complaints of privacy violation or loss of data of our consumers.
HEALTH AND SAFETY
In 2010, we restructured our consumer safety area. We brought all of our processes related to the
safety and effectiveness of ingredients together under a single management system. This includes fi nished
products, regulatory issues, the cosmetic vigilance system, and clinical research. With our international
expansion in 2010, we worked with our teams in Latin America to improve our understanding of regula-
tory issues outside of Brazil.
The health and safety of our consumers and the effi cacy of our products are concerns that have been
incorporated into our business process, from the development of product concepts to the fi nal disposal
of packaging, including research and development, cer tifi cation, manufacturing, marketing and promo-
tion, storage, distribution, supply, customer service and actual product use.
In 2010, we completed product reformulations to eliminate phthalates from our production and, by
June 2011, we expect to eliminate parabens from our formulas. Our target was to have both completely
eliminated in 2010, but we revised our goal because of technical challenges. Although these ingredients
do not pose proven risks to consumers, we decided to remove them from our formulas because there
is no scientifi c consensus about proper precautions.
Parabens belong to a group of preservatives used in cosmetics and foods. Since Natura only uses com-
pounds that pose no risk to human health, this lack of scientifi c consensus on the potential harmful ef-
fects of some types of parabens (the types not used by Natura) prompted us to completely eliminate the
use of all parabens. Phthalates, meanwhile, are a family of compounds used for many different purposes,
including as additives in the manufacture of plastics and in the cosmetic industry. Natura used to work
with a compound from this family, diethyl phthalate, as a solubilizer of fragrances, a bittering agent and
alcohol denaturizer. When applied in low concentrations, there are no indications that diethyl phthalate
can be harmful to health. Never theless, since this ingredient may be mistaken for other controversial
versions of phthalates, they have also been completely eliminated from our production.
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61
The precautionary principle is invariably adopted by Natura before using a new ingredient or launching
a new formula. In other words, if the international medical and scientifi c communities have any doubts
about the potential adverse health effects of a product, we choose not to use it. For raw materials that
have some limitation on the permitted concentration, we always try to comply with the standards of
countries with the most restrictive legislation. All our new ingredients and formulas are tested by a team
of dermatologists.
We also have a Cosmetic Vigilance System that monitors the potential adverse effects of our products.
In addition to protecting the end consumer, this system also fuels our innovation process. All the com-
munication we receive on health or safety reactions is investigated and monitored.
In 2010, Natura received no legal penalties or inquiries from the National Health Surveillance Agency
(Anvisa), Brazil's health sector regulator, not any fi nes resulting from the effects of our products on the
health and safety of consumers. Fur thermore, we did not receive any signifi cant fi nes related to product
labeling.
There were 463 complaints fi led with the Brazilian Consumer Protection Agency against Natura. Most
referred to requests to negotiate the debts of consultants, third par ty inquiries related to undue black-
listing as a result of registration fraud, and complaints from dissatisfi ed customers who did not get a
product exchange or refund. All complaints are analyzed by the relevant depar tments and the fi ndings
are used to improve our processes.
The number of supplier-par tners we work with totaled just over 4,900. Of these, about 5% work with
finished goods and production inputs (biodiversity ingredients, raw materials, packaging materials). The
remainder provides ser vices or delivers ingredients and materials indirectly required for our business
processes. Despite the growth of our international activities, these par tners are located mainly in Brazil
In Latin America, we recently adopted the strategy of developing local production through outsourced part-
ners. In 2010, we started bottling perfume in Argentina and, in 2011, we will expand production to Colombia
and Mexico. This model, in addition to cutting costs and having less of an environmental impact, takes into
account important concepts for Natura, such as partnership and co-construction, and it places a value on
partners with local knowledge and good socio-environmental practices. (Read more on page 25, Structural
Changes).
We aim to continually evolve our processes in order to boost our business par tners' levels of satis-
faction. In 2010, the supplier-satisfaction index remained stable at 81%, compared with 82% in 2009.
This fell shor t of our target of increasing satisfaction to 85%. Some operational issues, such as logistical
bottlenecks, contributed to this. We will introduce new processes for planning and handling materials in
the first quar ter of 2011.
We also did not move forward as fast as we would have liked with improving the flow of contracts and
payments, an issue raised by suppliers during the dialogue panels. Through our ser vices center, we have
improved monitoring of payments and have optimized the process of drafting contracts and related
suppor t systems. We believe these advances, made in the second half of 2010, will be reflected in better
ser vice during 2011.
4.5
SUPPLIERS
OUR PURSUIT OF CONTINUOUS
IMPROVEMENT IN THE QUALITY
OF OUR PARTNERSHIPS
WITH
SUPPLIERS PL AYS A KEY ROLE IN
MAINTAINING OUR COMMITMENT
TO SUSTAINABILITY.
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62
One positive aspect is that our suppliers' loyalty rate rose from 25% in 2009 to 28% in 2010. This indicator,
which we are repor ting for the fi rst time, has been monitored by Natura since 2008, and it combines ove-
rall satisfaction, intention to continue a relationship with Natura, and whether a supplier would recommend
Natura to other suppliers. For 2011, we hope to mantain a 28% supplier-loyalty rate, which will now be the
main indicator for assessing our relationships with suppliers (graph 1).
Since 2009, we have been active on five fronts identified for improving our supplier relationships: em-
ployee awareness of critical issues affecting the supplier relationship; closer relations with strategic
suppliers; improving the product innovation funnel process to include suppliers; improving the payment
process; and extension of our corporate supplier development program to other categories of supplies
and ser vices.
To raise the awareness of new employees as to the impor tance of supplier relations, we reinforced the
theme in the integration program. This is an impor tant point that should be intensified in 2011 to align
new employees with the precepts that guide our quality in relations with suppliers.
We held four dialogue panels with suppliers to discuss the following issues: solid waste, the relationship
between suppliers and supplier communities, and sustainable supply chains. We continued to hold meetings
to monitor the performance of the Qlicar (Quality, Logistics, Innovation, Competitiveness, Service, and
Relationship) program, with a focus on continuous improvement, as well as the effectiveness of procedures
that defi ne our relationships with strategic par tners. These periodic meetings -- which include "Breakfast
Meetings with Suppliers" and "Alliance Conferences" enable us to maintain and improve these relationships.
In the product innovation process, we intensifi ed the fl ow of information to suppliers and established clearer
rules for project management, consolidating these initiatives with the creation of a department devoted ex-
clusively to innovation with suppliers.
QLICAR PROGRAM
In 2010, we extended the reach of Qlicar, which covered 97 partners -- mainly suppliers of inputs and some
of our service providers. Qlicar was extended to vendors that provide such services as marketing and com-
munication campaigns and sub-brand publicity. We also reactivated BioQlicar for our supplier communities
(learn more on page 64, Supplier Communities).
We emphasize continuous performance improvement in our programs involving suppliers of fi nished goods
and among our transportation companies, call centers, and logistics vendors. In 2011, we will extend this ap-
proach to in-depth awareness of environmental issues.
We also reinforced the educational pillar, staging workshops on how to prepare sustainability reports and use
them as a tool for evaluating and monitoring a company's management. We also organized a training course
on the production of greenhouse gas emissions inventories.
In the fi eld of education, we began, half way through 2010, to train suppliers how to prepare sustainability
reports using the Global Reporting Initiative (GRI) model adopted by Natura. Seven suppliers from different
sectors are taking a course of workshops, scheduled for completion in July 2011, intended to qualify and engage
them in the use of sustainability reporting to evaluate and managetheir socio-environmental impacts. This train-
ing is conducted in partnership with the Brazilian Association of Corporate Communication (Aberje).
We are also training six suppliers on the subject of Climate Change, based on the guidelines of the Green-
house Gas Protocol (GHG Protocol) ­ the methodology used by companies and governments to under-
stand, measure and manage their carbon emissions. This project is run in partnership with the Getúlio Vargas
Foundation and its goal is to help these partners improve their emissions monitoring.
In another development that deserves attention, seven suppliers signed up to the Brazilian Business Move-
ment for the Conservation and Sustainable Use of Biodiversity, led by Natura. This is a movement of compa-
nies that have made a voluntary commitment to the conservation of social biodiversity. The companies that
joined the initiative were: Agropalma, Beraca, Firmenich, Centrofl ora, IFF, Native and Solabiá.
Our suppliers are required to complete self-evaluations and audits to analyze issues of quality, environment
and social responsibility, and also aspects related to human rights, such as the use of child labor, forced labor or
the equivalent of slave labor. In 2010, no cases of human rights violations were identifi ed. All our 187 product
suppliers completed the self-evaluation process and 53% submitted to periodic audits. Additionally, all the
suppliers who are part of the Qlicar program were audited.
74
82
81
2008
2009
2010
1. OVERALL
SATISFACTION ­ BY
SUPPLIER (%)¹
2
1 Percentage of suppliers
satisfi ed or fully satisfi ed.
2 The indicators have a margin
of error corresponding to a 95%
confi dence interval.
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63
SUPPLIERS AUDITED OR SELF-EVALUATED ON QUALITY, ENVIRONMENT AND SOCIAL RESPONSIBILITY
1
2008
2009
2010
Productive Suppliers (self-evaluated %)
100
100
100
Productive suppliers audited (%)
48
48
53
Suppliers Qlicar audited (%)
100
100
100
1. The aspects of human rights covered are child labor and slave labor or labor analogous to slave labor.
HUMAN RIGHTS CLAUSES IN CONTRACTS
1 2
2008
2009
2010
Percentage of signifi cant investment agreements
that include human rights clauses
100%
100%
100%
Total number of signifi cant investment agreements
that include human rights clauses (thousands)
2.0
2.5
2.2
1. The defi nition of signifi cant investment was revised to represent the expressed number more coherently. Among the criteria to verify
whether a particular investment is signifi cant or not, are: value (contracts over R$ 200,000); contracts involving intellectual property; real
estate acquisitions; donations and sponsorship.
2. The clauses relate to child labor and slave labor or labor analogous to slave labor.
SUSTAINABLE SUPPLY CHAINS
We took on a great challenge in 2010: to develop a methodology to quantify the environmental impacts
that our par tners' activities may cause for society (known as socio-environmental externalities) and con-
ver t the data into monetary values. The new methodology will be incorporated into the process of selec-
ting suppliers and is aligned with our ambition of developing sustainable supply chains.
The study links the primary impacts of the supply chain with Natura's priority sustainability issues. We
applied it on a pilot basis for the selection of two suppliers in 2010: one from the services segment and
the other from products. In both cases, we decided to select par tners who, in addition to meeting tradi-
tional technical criteria, demonstrated advantages in social and environmental indicators, such as reducing
greenhouse gas emissions and investing in education.
Our goal is to apply this methodology to 16 groups of materials and services (accounting for 60% of the
value of our purchases) by the end of the fi rst quar ter of 2011, and to reach 100% of our por tfolio within
the next two years.
This pioneer process is a result of collective construction. We held two dialogue panels gathering 70 peo-
ple from 14 supplier categories, which helped us identify all the externalities to which each one is exposed.
The methodology was developed in par tnership with the consulting fi rm A.T. Kearney, known for its work
in supply chain management, and with the suppor t of representatives from The Economics of Ecosystems
and Biodiversity (TEEB), of the United Nations.
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64
This business model produces value for Natura and helps to create wealth for communities and small
farmers while driving local development. In 2010, our network of relationships involved 25 supplier com-
munities comprising 2,301 families in the Nor th, Nor theast, Southeast, and South of Brazil and in Ecuador.
Eleven supplier communities provide materials for our plant that makes oils and soaps in Benevides (Pará)
(learn more on page 68, Surrounding Communities). The number of families involved was 14% higher than
the previous year. Examples of progress in this relationship include a 57% increase in resources allocated
to communities and the effective implementation of our Rural Supplier Development program, called Bio-
Qlicar (Quality, Logistics, Innovation, Competitiveness, Service and Relationship). This program is growing
into a robust platform for dialogue and for the development of small farmers and par tner communities
involved in our supply chains of biodiversity inputs (graphs 1 and 2).
Our relationship with supplier communities is based on the Natura Policy for the Sustainable Use of Bio-
diversity and Associated Traditional Knowledge, and is aligned with the International Convention on Bio-
logical Diversity. This policy, which was formulated in 2008 and disseminated to our stakeholders in 2009,
regulates our processes and helps us improve the planning of demand for inputs purchased from these
communities. It also sets parameters for negotiating the equitable distribution of benefi ts obtained from
the use of these ingredients.
Our policy dictates that approval to embark on a relationship with new communities or to start new research
and supply projects must involve internal forums to assess all the risks and opportunities, both for the commu-
nity and for Natura. The selection is made based on a diagnosis of the following characteristics of the communi-
ties: supplies, relationship, plant production and marketing, and it also includes an analysis of the traceability, the
administrative organization and the legal structure of the association or cooperative, engagement with partners
and environmental conservation practices, among other things.
In what we consider our priority communities, we are committed to the preparation of sustainable develop-
ment plans, implemented through projects run in partnership with the communities and other organizations.
The focus of these plans is to contribute to sustainable local development, so society as a whole can develop.
The reasons for terminating a relationship may include the discontinuation of a product line or use of a specifi c
raw material, or failure to satisfy critical supply criteria (quality, volume, etc.). It is worth pointing out that this
analysis is only made after a period in which all the conditions that allow the community to meet these require-
ments have been provided (training, investments in infrastructure, management, etc.).
Internally, we have a multidisciplinary team that uses management systems and governance mechanisms to pro-
mote a more comprehensive inclusion of these communities into our business model, and we are also streamlin-
ing our procedures so we can adapt better to the local contexts of each community.
In 2010, we began to assess the loyalty of supplier communities to Natura, based on a survey similar to that
which is conducted with our other suppliers. These methodologies will be consolidated in 2011. The initial
assessment revealed the need for improvement in some aspects of these relationships, such as communi-
cation, the procurement process, and joint development oppor tunities in the supply chains.
22
25
25
2008
2009
2010
1,823
2,012
2,301
2008
2009
2010
4.6
SUPPLIER
COMMUNITIES
1. NUMBER OF
COMMUNITIES WITH
WHICH NATURA
DOES BUSINESS ¹
1. In 2010, we revised the
criteria for quantifi
cation of
supplier communities, which
now consider only traditional
communities and family farmers.
We revised the numbers for
2008 and 2009 accordingly.
2. BENEFITED FAMILIES
W H E N N AT U R A CO M M I T T E D TO A
TEC H N O LOGY PL ATFO R M T H AT
INCORPOR ATES INPUTS E X TR AC TED
FROM BR A ZILIAN BIODIVE RSIT Y
IN A SUSTAINABLE WAY, WE INITIATED
R E L AT I O N S H I P S W I T H S U P P L I E R
COMMUNITIES THAT PROVIDE NOT ONLY
R AW MATER IAL S B U T AL SO ACCESS
TO TR ADITIONAL KNOWLEDGE .
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65
We also improved dialogue with supplier communities by inviting them to a three-day conference.
This meeting, involving 60 people, also included representatives of processing companies (suppliers
that take ingredients such as almonds, seeds, or fruit from our supplier communities and conver t them
into oils or other substances that are incorporated into our products). Through dialogue, we have
promoted better integration between these two impor tant groups in our supply chain. At the confe-
rence, we showed how the issues discussed in 2009 had evolved and we conducted an assessment of
BioQlicar. We also discussed scenarios for the coming years, the future of our relationships, and each
side's role in fostering sustainability.
As a way of giving fresh impetus to the communities and making clear their importance to Natura, we staged
two product launches in the communities that supply their inputs. We launched the Una make-up line at the
Cooperative of Small Agroextractivist Producers in Esperantinópolis, in the state of Maranhão, which supplies
ground babassu coconut. We also chose the community of Jacarequara ­ home to the Mixed Farmers Coopera-
tive Between the Caeté and Gurupi Rivers (Coomar), in Santa Luiza do Pará, in the state of Pará ­ as the site
of the launch of our new Ekos line of soap. This event was attended by 30 journalists from across Brazil, who
not only learned more about the new product, but were also introduced to the work conducted in the com-
munities. These events have also brought our consultants and supplier communities closer together, creating an
environment for the exchange of cultures and world visions between the different links in Natura's sales and
production chain.
We also presented the work of our supplier communities at the 10th Conference of the Parties to the Conven-
tion on Biodiversity (COP-10), in Nagoya, Japan. Furthermore, the Ekos Portal (www.naturaekos.com.br), which
promotes the range of products from the Ekos line, also contains information on the work in these communities,
such as the model of sustainable extraction and the socio-environmental concerns.
We organized anthropological studies in 2010 on the involvement of children and adolescents, members of the
supplier communities' families, in the production chain. The studies reveal that this involvement is not limited to
the economic or legal dimension, but also considerssocial and cultural issues. The social division of labor in the
extractivist communities observes a characteristic vision of the world that belongs to their own cultural system.
As a result, we did not identify any practices justifying corrective action. We will continue to monitor the issue
in 2011 to make sure that no children or adolescents are being exposed to risk.
It is worth noting that in 2010 we did not register any incidents involving indigenous populations in the locations
were we operate.
RESOURCES FOR COMMUNITIES
In 2010, our transfer of resources to supplier communities rose 57% over 2009 levels, to R$8.7 million. This
amount refers to payments for the supply of inputs; contracts for sharing benefi ts; for access to genetic he-
ritage or associated traditional knowledge; for use of images; and for direct investments in local sustainable
development.
RESOURCES ALLOCATED (R$ THOUSANDS)
1
2008
2009
2010
Supply 2,283.9
2,767.2
4,373.6
Sharing benefi ts from access to genetic heritage or
associated traditional knowledge
2
1,435.7
1,056.3
1,480.1
Funds and support
3
631.2
1.087.7
1.551.7
Use of image
4
15.4
14.5
76.5
Training
5
56.4
151.8
184.6
Certifi cation and stewardship
6
23.4
27.8
212.2
Studies and advisory services
7
555.5
435.1
827.7
Total 5,001.5
5,540.4
8,706.4
1. Data for 2008 and 2009 have been revised due to the reallocation and reclassifi cation of project expenses in supplier communities and
the exclusion of amounts associated with one community that is no longer part of this group.
2. Sharing of benefi ts with the communities enabling access to Genetic Heritage and/or Associated Traditional Knowledge.
3. Corresponds to Funds and Sustainable Development Agreements voluntarily supported by Natura, for which disbursement has always been
contingent on projects or sponsorship for infrastructure improvements.
4. Amounts paid by Natura for the use of images of community members in institutional publicity pieces or in marketing.
5. Includes Natura's payments to hold workshops and courses for communities to improve their sustainable production techniques.
6. Amounts invested in certifi cation and stewardship plans in cultivation areas within supplier communities.
7. Includes reports and consulting services provided by specialists and NGOs contracted by Natura to work with supplier communities.
Growth in the amount of resources resulted from higher demand - driven by new product launches - but also
by more benefi t-sharing payment contracts coming due in 2010 than in previous years. For 2011, we expect
total distribution to grow 25%, a lower percentage than last year.
In 2011, we intend to streamline our information system on the various different divisions of Natura that
are part of this relationship, extending our control over this and other indicators associated with supplier
communities.
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66
RESOURCES ALLOCATED PER FAMILY (R$ THOUSANDS)
2008
2009
2010
Direct resources
1
2.4
2.5
3.1
Supply
2
1.4
1.5
2.0
1. Includes resources actually received by the communities: supply of inputs, benefi t sharing, use of image, funding and support.
2. Sub-item of direct resources, highlighting the funding received for supply.
BIOQLICAR PROGRAM
Our supplier communities take par t in the BioQlicar Program, an initiative similar to the development
program applied to the other suppliers.
Five years ago, we began to develop a program to monitor and improve the supply chain that provides
us with ingredients from biodiversity. After a period of conceptual and methodological evaluation, by
2010 we had a more robust model consisting of two indicator categories: BIO (economic, physical, en-
vironmental, social and human resources); and Qlicar (monitoring the production performance of rural
suppliers). We hope to use this program to promote an objective dialogue, streamline our par tnerships
and strengthen our business model. BioQlicar helps communities organize in different ways, stimulating
their development and guiding their relations with the market as a whole. It also guides our procedures
and relationship strategies to make supply chains more sustainable. This model considers two indicator
categories: bio (economic, physical, environmental, social, and human resources) and Qlicar (monitoring
the production performance of rural suppliers). In 2011, we will assess the program together with the
communities, and our goal is to reach a score of 3.7 on a scale of 0 to 5.
We also conducted, for the first time, a complete sur vey of data from the communities for the program.
This involved meetings in 23 of the 25 supplier communities and with 7 processing companies. The re-
sults were discussed with these two groups, enabling us to prepare joint action plans and improve the
supply chains.
The construction of BioQlicar obser ved the seven principles of the BioTrade Program of the United
Nations Conference on Trade and Development (UNCTAD), which addresses, among other things, the
conser vation of biodiversity, fair and equitable sharing of benefits, compliance with national and interna-
tional regulations, and respect for the rights of all the actors involved.
SHARING BENEFITS AND CULTURAL HERITAGE
We signed four new benefi t sharing contracts in 2010, which were negotiated based on the principles of the
Natura Policy for the Sustainable Use of Biodiversity and Associated Traditional Knowledge. In general, the
amount of resources shared depends on the number of raw materials produced from the plant, and on the
commercial success of the products c
The fi rst contract was signed with the Ver as Ervas Association, from Belém in the state of Pará, for the tradi-
tional knowledge associated with the use of the ingredient pataqueira (Conobea scoparioides). According to
the terms of the contract, the resources will be used in projects for the community, such as the renovation of
the association's facilities.
We also signed a benefi t sharing contract for genetic access to the species aperta-ruão (Piper aduncum) with
the group Consórcio Terra Medicidinal, from Barra do Turvo in the state of São Paulo, and the NGO Programa
da Terra. The resources will be invested in improving the quality of life of family farmers involved in the process
and to develop the production chain.
The third contract involved access to yellow passion fruit (Passifl ora edulis fl avicarpa Degener) and was signed
with the Agroindustrial Cooperative of Farmers from Corumbataí do Sul and Region (Coaprocor), in the state
of Paraná. The community has used the benefi t sharing resources to make improvements to the production
chains, such as purchasing land for its new facilities, training and mobilization events for farmers.
The fi nal contract involves macela-do-campo (Achyradine satureoides), signed with the Bernado Hakvoort
Agroforestry Institute, located in the town of Turvo, also in the state of Paraná. The resources will be spent
on the institutional strengthening of the organization and the local cooperative, through technical training and
increasing the number of farmers associated with the projects of Natura.
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67
LOCAL DEVELOPMENT
Natura's relationship with the supplier communities is not restricted to commercial relations and production.
The relationship also involves the promotion of actions geared towards sustainable local development. We try
to invest in projects that strengthen the social fabric of the communities and help in matters such as environ-
mental conservation, cultural promotion and the improvement of local infrastructure.
One example is the partnership with the Federation of Agencies for Social Welfare and Education (FASE) and
Labor, in Benevides, which has generated a series of training courses for local producers (read more on page
68, Surrounding Communities).
Projects that contribute to the local development of supplier communities:
MIXED COOPERATIVE OF EXTRACTIVIST PRODUCERS FROM THE SUSTAINABLE DEVELOPMENT
RESERVE OF THE IRATAPURU RIVER ­ COMARU (AMAZONAS)
Offers scholarships for technical and higher education courses
with funding from the Iratapuru Fund.
COOPERATIVE OF AGROECOLOGICAL, ARTISANAL AND FORESTRY PRODUCERS OF TURVO ­
COOPAFLORA (PARANÁ)
We organized a training course on managing cooperatives and a meeting of youngsters from the region of
Turvo, attended by more than 300 people. The purpose of the event was to encourage the young people to
remain in the countryside, strengthening family farming and curbing rural migration.
The funds for these actions are provided by Natura's local development program.
PARTNERSHIP FOR ECONOMIC REFORESTATION ­ RECA (RORAIMA AND ACRE)
We supported, with funding from the local development program, the construction of an agricultural school
to provide a vocational education in the communities. The school currently has more than 70 students.
COOPERATIVE OF AGROEXTRACTIVIST DEVELOPMENT AND ENERGY OF MÉDIO JURUÁ - CO-
DAEMJ (AMAZONAS)
In partnership with the Small Business Support Agency (Sebrae) and the Chico Mendes Institute for the
Conservation of Biodiversity, we supported a training course on how to run a cooperative for 40 people.
BURITI PALM OIL PRODUCERS FROM THE MUNICIPALITY OF PALMEIRA DO PIAUÍ (PIAUÍ)
We staged training courses in citizenship, associativism and cooperativism, and agroforestry systems for 50
people, organized with the non-monetary shared benefi ts resulting from our access to the traditional knowl-
edge and genetic heritage of the Buriti Palm.
WOMEN'S MOVEMENT OF THE ISLANDS OF BELÉM (MMIB), COTIJUBA (PARÁ)
Using its own resources, Natura supported the fi nal stages of construction of the MMIB's handicrafts facility,
used to produce biojewelry, benefi tting the 13 families that are members of the association.
ASSOCIATION OF PRODUCERS OF BOA VISTA DO ACARÁ ­ (AMAZONAS)
We held a workshop to teach the skills needed for organizational management for the 23 families in the com-
munity. The initiative was organized with our own resources.
VER AS ERVAS ASSOCIATION, BELÉM (PARÁ)
We organized training for 100 people in how to develop projects to support the association and raise money.
Although the community does not supply Natura, the relationship involves the sharing of traditional knowl-
edge. The initiative was organized with Natura's own resources.
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68
However, we recognize that we must develop new strategies for ensuring smooth transitions in other com-
munities as our operations grow in Brazil and abroad. For example, our relationship strategy should include
places where we have distribution centers: Jundiaí (São Paulo), Matias Barbosa (Minas Gerais), Jaboatão dos
Guararapes (Pernambuco), Canoas (Rio Grande do Sul), Simões Filho (Bahia), Uberlândia (Minas Gerais),
and Castanhal (Pará). The same should apply to our international operations. Outsourced manufacturing in
Argentina started at the end of 2010 and will be extended to Mexico and Colombia. Our aim is to contribute
to the development of these regions through partnerships with the community, authorities and representa-
tives of civil society.
In an effort to understand the needs of the communities surrounding our operations at Cajamar and Itapecerica
da Serra, we held fi ve dialogue panels involving representatives of civil society, government, associations, and
nongovernmental organizations in 2010. At these events, we sought to learn the issues and challenges these
communities face, understand how these groups interact with one another in the community, exchange experi-
ences, and fi nd joint solutions.
Investments in projects at Cajamar and Itapecerica da Serra totaled R$438,700 in 2010, of which R$408,700
were corporate-funded and R$30,000 were revenues from the Natura Crer para Ver program. Natura also al-
locates 1% of its income tax to Municipal Councils for the Rights of Children and Adolescents, and we intend
to build relationships with these bodies to monitor the use of these funds more closely (learn more on page
93, Creation of Social Value).
INVESTMENT IN INFRASTRUCTURE AND SERVICES FOR PUBLIC BENEFIT (R$ THOUSANDS)
1
2008
2009
2010
Investment in communities around
Natura units ­ Natura funds
342.8
407.9
408.7
Investment in communities around
Natura units ­ Crer para Ver program²
249.2
2.5
30.0
Total 592.0
410.4
438.7
1. Investments in the municipalities of Itapecerica da Serra and Cajamar.
2. This amount does not include funds intended for the Trilhas (Trails) project at Cajamar or the Encontros de Leitura (Reading) project at
Itapecerica, both related to the
Crer para Ver program.
In 2010, the number of employees living in Cajamar rose from 565 to 659. This increase was slightly below the rate
of growth of Natura's staff as a whole. We have noted in past years that many people from our surrounding com-
munities have sought employment with us but do not have the qualifi cations we require. This refl ects shortcomings
in educational and training facilities, which is a challenge not only in these locations but also in Brazil as a whole. In
general, youngsters who applied to join Natura through our Young Apprentice program also demonstrated this lack
of qualifi cation. We believe there is an opportunity for us to take action in this respect, and in 2011 we will develop
training programs for these groups to increase their own marketability, whether for positions at Natura or other
companies in the community (learn more on page 31, High-priority Topics/Education).
EMPLOYEES FROM THE SURROUNDING COMMUNITIES (%)
1
2008
2009
2010
Cajamar 18.2
17.4
16.6
Benevides
2
96.0
98.0
94.5
1. Itapecerica da Serra does not have employees from the surrounding communities.
2. The municipalities near Benevides are also considered as surrounding communities.
4.7
SURROUNDING
COMMUNITIES
WE KNOW THAT OUR OPERATIONS
BRING ABOUT CHANGE IN THE
LOC ATIONS WHERE WE OPER ATE,
SO WE HAVE INVESTED IN CLOSE
RELATIONS WITH THE COMMUNITIES
AROUND OUR UNITS
IN CAJAMAR
(SÃO PAULO), ITAPECERICA DA SERRA
(SÃO PAULO), AND BENEVIDES (PARÁ).
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69
Natura does not have any specifi c procurement policy for surrounding communities, although the new methodol-
ogy for selecting suppliers to be used in 2011 considers location together with other technical and socio-environ-
mental criteria (read more on page
XX
, Suppliers). In 2010, we recorded an increase in the volume of business with
partners in the communities surrounding Natura's three main units, which is the result of maintaining partnerships
with the current suppliers.
PURCHASES FROM SUPPLIERS FROM THE COMMUNITIES SURROUNDING THE UNITS
1
(R$ MILLION)
2008
2009
2010
Cajamar
2
52.0
69.9
73.6
Itapecerica da Serra
2
1.2
1.2
1.3
Benevides
3
34.4
44.6
46.5
Total 87.6
115.7
121.4
1. The values include taxes.
2. Purchases from suppliers located in the municipalities of Cajamar and Itapecerica da Serra, metropolitan region of São Paulo, Brazil.
3. Purchases from suppliers in the state of Pará exclusively the industrial unit of oils and soap mass located in Benevides, in northern Brazil.
CAJAMAR
One of the highlights of Natura's performance at Cajamar in 2010 was the revision of the Municipal Education
Plan. In 2003, we supported the local government's fi rst plan, and once again we are part of this initiative. In 2003,
community involvement was low, whereas now 300 representatives of civil society are involved -- evidence that
this group is more cohesive and participatory.
Last year, in conjunction with Cajamar's municipal government, we engaged a higher-education institution (Funda-
ção Escola de Sociologia e Política de São Paulo) to help us to revise the plan. We covered 70% of the cost of the
contract, and the municipal government paid the remainder. The project was planned jointly with the community
through meetings held in all districts. The new plan covers education for municipal schools for the next 10 years --
setting targets, strategies, and action plans. We also used funds from the Natura Crer para Ver (Believing is Seeing)
program to produce a booklet to be distributed to the community, providing details on how the plan will work.
We have a partnership with the NGO Mata Nativa. In 2010, we commissioned the Institute of Socio-Environmen-
tal Research and Projects to advise on the process of improving and streamlining the NGO's management. Mata
Nativa is a benchmark institution in the town, and it has been contacted by several industries seeking assistance
with socio-environmental issues.
Also in partnership with Mata Nativa, in 2010 we completed a project to map the potential areas for reforestation
in Cajamar. The study consisted of a general inventory of the local fl ora and an identifi cation of protected areas
(known as "Permanent Preservation Areas" and "Legal Reserves"), degraded areas and riparian forests. Technical
reports and georeferenced maps were drawn up of the potential areas for reforestation found in the region. This
project was widely publicized in the municipality and it can provide valuable insight for the creation of the mu-
nicipality's Master Plan and Agenda 21. The initiative also received the support of the National Biomass Reference
Center and the Advanced Studies Center in Applied Economics, both part of the University of São Paulo.
For the past four years, we have sponsored the publication "Cajamar em Verso e Prosa" (Cajamar in Verse and
Prose), a project that encourages an appreciation for the written word and celebrates the memory of the town,
organized by the Municipal Board of Education. We also sponsor the printing of newspapers for schools in the
municipality.
Cajamar was included in the Trilhas (Trails) project of Natura's Crer para Ver (Believing is Seeing) program, which is
organized in all the municipality's public schools catering to children from 4 to 6 years old in primary or pre-school.
The project lasted two years and involved 16 municipal schools, 125 teachers and 2,863 pupils in 2009 and 2010
(read more on the Trilhas project on page 92, Creation of Social Value/Crer para Ver).
ITAPECERICA DA SERRA
Our main activity in Itapecerica da Serra revolves around expanding the selective garbage collection program.
Therefore, we support the Municipal Environment Department (Green Division) and the local recycling coop-
erative. The medium-term goal is for selective collection to cover the entire municipality through a mixed system
involving motorized transport, collectors, and voluntary points of delivery.
In 2011 we will transfer our operations in Itapecerica da Serra to the city of São Paulo. We have outgrown our
current facilities in Itapecerica da Serra, which no longer offer ideal working conditions (learn more on page 26,
Structural Changes). We are aware that this decision will affect the community, and we are carrying out a transi-
tion process to minimize these impacts. We have maintained social investment in 2011 and are preparing the
cooperative and the municipal government to independently manage the selective collection service. This has
been the objective of this project since its outset; throughout the partnership, we have supported the reorgani-
zation of the cooperative, the structuring of its processes, the professionalization of the cooperative members,
and the increase in the volume collected.
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70
Natura lent its support by commissioning the Institute of Socio-Environmental Research and Projects to advise
the cooperative and train its members. As a result, the cooperative has received more funding to expand its
premises, structure its accounting and fi nancial practices and understand the importance of the professionaliza-
tion of its membership. The cooperative currently has 25 members and, in 2010, they all started to pay into the
Brazilian Social Security System (INSS). The average monthly volume of recyclables handled by the cooperative
increased from 50 metric tons in 2009 to 69 metric tons last year, and it also reported record earnings.
In 2010, the municipality of Itapecerica da Serra also participated in the Encontros de Leitura (Reading Meetings)
project of the Crer para Ver (Believing is Seeing) program. The project trains teachers who work with children
of 4 and 5 years old in reading and writing activities. It was attended by 50 teachers from 29 schools and 37
technical professionals and school principles, benefi ting 1,461 pupils.
BENEVIDES
The Benevides plant has been in operation since 2006. It has the responsibility for training, negotiating, and main-
taining relationships with farmers that supply some of the biodiversity ingredients it uses. These agroextractivist
producers and communities (mostly grouped into cooperatives) are called "community enterprises" and are also
part of our supplier communities (learn more on page 64, Supplier Communities). They are located in various
towns and cities in the state of Pará, well beyond the municipality of Benevides.
In 2010, we worked with 11 associations and cooperatives comprising 1,100 families -- 80% more than the 610
families in 2009. There was also growth in the amount of raw materials purchased, from 394 tons in 2009 to 500
tons in 2010. Our operations in Benevides will be expanded in 2011 with the construction of a new soap plant,
which is expected to increase the production capacity of our local operations.
To achieve the signifi cant growth that we report each year, we make an effort to improve the production systems
of these associations and to promote the diversifi cation of their products. For example, we organize development
activities for these producers in partnership with the organizations Labor and the Federation of Agencies for So-
cial Welfare and Education (FASE). These include the Workshop on Almond Quality, the Murumuru Stewardship
Course, Health Workshops, the Course on Security and Environment for Extractivists, the Cooperativism Training
Program and the Training Program in Cooperative Management. In addition, we stage technical consulting activities,
lasting two days each, in which Natura visits the partners and gives lectures on production quality, environment,
security and social organization.
In 2010, we launched a pilot project with the Coofruta cooperative, located in Abaetetuba, in the state of Pará, to
decentralize the production of the oils we use in our products. Currently, the communities supply the inputs (such
as seeds, almonds, etc.) to processing companies that produce the oil and deliver it to Natura. Our goal is to help
the communities to produce the oil themselves, thereby increasing their earnings and diversifying their business, in
addition to improving the logistics of the production process. To assess the results of this project, we are develop-
ing indicators to measure not only rising incomes, but also the social benefi ts associated with the new production
opportunities (read more about the communities around Benevides on page 64, Supplier Communities).
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71
We follow the recommendations of Brazil's Securities and Exchange Commission and the rules of the
BM&FBovespa, where Natura shares are listed on the New Market segment.
Our Annual Shareholders' Meeting, in April 2010 at our Cajamar facility, brought together more than 200 share-
holders. These individuals had an opportunity to develop closer contact with our company, our controlling sha-
reholders, and our executives (learn more on page 17, Governance). This year, we also held the second Natura's
Day, a meeting with 80 Brazilian and international capital market analysts and professionals.
To maintain close relations with this group during 2010, we conducted quarterly conference calls and took
part in conferences and individual meetings in Brazil and abroad. We held 600 meetings with investors. We also
redesigned our website (www.natura.net/investidor), our main communication channel. The site's functionality
has improved, facilitating better access to information and providing greater interactivity, such as an investment
simulator and the section Fale com RI (Talk to IR). Since its launch in June, we have recorded an average of 16,000
visits per month.
PROFILE OF SHAREHOLDERS
2008
2009
2010
Individuals
9,993
7,699
7,838
Brazilian legal entities
396
560
560
Foreign legal entities
538
668
850
Total 10,927
8,927
9,248
At the end of 2010, foreign corporate investors held 88% of outstanding shares. Brazilian corporate investors
held 7% and individual investors held 5% of these shares.
CAPITAL STRUCTURE
SHAREHOLDERS
INTEREST
NUMBER OF SHARES
Majority shareholders
59.88%
258,017,219
Treasury shares
0.00%
655
Management shares
0.57%
2,458,016
Outstanding shares
39.55%
170,405,526
Total shares
100.00%
430,881,416
MAJORITY SHAREHOLDERS
The capital stock of Natura consists exclusively of common shares. The table below shows the percentage of
shares held in 2010 by shareholders that own 5% or more of the capital stock and by the Board.
SHAREHOLDER NUMBER
OF
%
____________ COMMON
SHARES
_________
Lisis Participações S.A.
Controlled by Antonio Luiz da Cunha Seabra 95,946,968
22.27
Utopia Participações S.A.
Controlled by Guilherme Peirão Leal 91,557,964
21.25
Passos Participações S.A.
Controlled by Pedro Luiz Barreiros Passos 22,606,809
5.25
4.8
SHAREHOLDERS
SINCE NATURA WENT PUBLIC IN
2004, WE HAVE SOUGHT TO BUILD
A TRANSPARENT AND HIGH-
QUALITY RELATIONSHIP
WITH
OUR SHAREHOLDERS, INVESTORS,
AND CAPITAL MARKET ANALYSTS BY
KEEPING THEM WELL INFORMED.
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72
SHAREHOLDER NUMBER
OF
%
____________ COMMON
SHARES
_________
ANP Participações S.A.
Controlled by Anizio Pinotti 22,583,608
5.24
RM Futura Participações S.A.
Controlled by Ronuel Macedo de Mattos 15,918,754
3.69
Antonio Luiz da Cunha Seabra
3,628,920
0.84
Guilherme Peirão Leal
3,462,917
0.80
Pedro Luiz Barreiro Passos
855,038
0.20
Anizio Pinotti
854,160
0.20
Ronuel Macedo de Mattos
602,081
0.14
NATURA SHARE PERFORMANCE
The price of Natura shares rose 37% in 2010, while Brazil's main stock market index (Ibovespa) ended the
year just 1.3% higher. Trading volume also rose 30% from the previous year. Since 2004, when we went public,
Natura shares have risen 754.7%, while the Ibovespa gained 267.9% in the same period.
2005
2006
2007
2008
2009
2010
NATU3: +37.9%
Ibov: +28.3%
NATU3: +51.1%
Ibov: +29.1%
NATU3: ­ 41.4%
Ibov: +47.4%
NATU3: +18.0%
Ibov: ­ 41.4%
NATU3: +101.6%
Ibov: +82.7%
NATU3: +37.0%
Ibov: +1.3%
2004
NATU3: +87.2%
Ibov: +33.0%
Natu3
Ibovespa
755%
268%
NATU 3
05/25/2004
R$ 5.61
FOLLOW ON
07/31/2009
Base 100 = 05/25/2004
NATU 3
12/30/2010
R$ 47.70
We continue to be part of the leading Brazilian stock market indexes - Ibovespa, IBrX-50 (which lists the 50
most liquid shares on the exchange), the Tag Along Stock Index, the Corporate Governance Index, and the
Corporate Sustainability Index, the latter of which uses sustainability criteria to select shares of companies.
We are also listed on the Morgan Stanley Composite Index, a benchmark for foreign investors.
Particularly noteworthy last year was the inclusion of our shares on the BM&FBovespa's Carbon Effi cient
Index, which considers each company's greenhouse gas emissions. Created with the aim of encouraging com-
panies to measure, monitor, and disclose their carbon emissions,the index incorporates indicators related to
climate change issues. Consisting of companies that were already listed on the IBrX-50 and that voluntarily
accepted these emissions standards, the new index requires companies to run periodic emission inventories
to remain in the portfolio. Natura has been conducting emission inventories since 2007 (for more details, see
page 62 in Creation of Environmental Value).
PAYMENT OF DIVIDENDS
On February 23, 2011, Natura's Board of Directors approved a proposal for the payment of R$659.6 million in
dividends and R$59.9 million in interest on capital (R$50.9 million net of withholding tax) for the 2010 fi nancial
year. This proposal was to be shared at the Annual Shareholders' Meeting on April 8, 2011.
On August 12, 2010, Natura paid dividends amounting to R$253.9 million and interest on capital of R$30.1
million (net of withholding tax). The remaining balance, to be paid on April 14, 2011, following ratifi cation by
the Annual Shareholders' Meeting, will be R$405.6 million in dividends and R$20.7 million in interest on capital
(net of withholding tax). These dividends and interest on capital referring to earnings for 2009 will represent net
earnings per share of R$1.65 (R$1.37 per share in 2009), corresponding to 99% of free cash generation
1
and
95% of net income
2
for 2010.
1. (Internal cash generation) +/- (changes in working capital and long-term liabilities) ­ (acquisitions of property, plant and equipment).
2. Net income as defi ned by Law 6404/76.
1.Source: Economática.
18,098
2008
25,983
2009
33,182
2010
1. AVERAGE DAILY SHARE
VOLUME TRADED
(R$ MILLIONS)
1
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73
The year 2010 was marked by two major events: the International Year of Biodiversity and the Brazilian
presidential elections. These issues occupied our Agenda of Priority Topics for Government Relations,
which also included the optimization of the tax burden, the regulation of solid waste and the development
of strategic regional plans. The agenda lists the issues in which the Brazilian government's political and ins-
titutional sphere of infl uence affects Natura's Strategic Planning.
Once again, our main effor ts were aimed at introducing a new legal framework for access to biodiversity
and associated traditional knowledge, ensuring the conditions for sustainable use of the nation's genetic
heritage and the traditions associated with it.
This matter has been on our agenda for 10 years. We believe that if Brazil is to create wealth from the sus-
tainable use of its biodiversity, consolidating its global leadership in this area, legislation is required to pro-
vide guidance and protection to companies and researchers. Today, the issue is regulated by an incomplete
and inconsistent Provisional Measure that does not guarantee institutional stability for the development of
science and technology. We believe that building a model that brings together production, consumption,
and conservation is the only way to contain loss of biological diversity. Establishing alternatives depends on
the government resolving the current standoff.
Our action plan for moving this issue forward is focused on three priorities: communication, which can
improve societal understanding and unite the community to demand action; engagement with communities
to seek suppor t for this effor t; and infl uencing decision makers to move forward with the legal framework.
We believe that the bill, which has been stalled with the chief of staff of the President of the Republic since
2007, should be sent to Congress. Throughout 2010, we reaffi rmed this belief. In the legislature, the bill will
be discussed, negotiated, and adapted to provide an appropriate legal framework.
We staged hearings with federal congressmen and senators, and meetings with representatives of the
Ministry of the Environment, the Ministry of Development, Trade and Industry, the Ministry of Science
and Technology and the Offi ce of the Chief of Staff. We were also one of the founding members of the
Business Movement for the Conservation and Sustainable Use of Biodiversity, an initiative expressing the
commitment of Brazilian companies to conserve biodiversity that has been signed up to by more than 60
companies and a number of civil society organizations. (Read more on the topic on page 29 and 79, Priority
Topics/Biodiversity and Creation of Environmental Value).
As a result of Brazil's imperfect regulatory framework, in 2010 we received infraction notices from the
Brazilian Institute for the Environment and Renewable Natural Resources (Ibama). We disagree with these
fi ndings and have formally challenged them (read more on page 64, Creation of Environmental Value).
Another topic on our agenda was the par ticipation of Guilherme Leal, then co-chairman of the Board of
Directors, in the 2010 presidential elections. (read more on page 18, Governance).
In relation to taxation, we worked with the Brazilian Association of Cosmetic, Toiletry and Fragrance Indus-
try (Abihpec), to raise awareness in Congress about the effects of Provisional Measure 497 of July 2010.
This measure would dramatically increase the tax burden on cosmetics companies. Taxation is already very
high, and fur ther increases would also have a signifi cant impact on consumers.
Concerning state taxation, we support the efforts of the Brazilian Association of Direct Selling Companies
(ABEVD) in the working group set up by the National Public Finance Policy Council (Confaz) to establish a
common methodology for calculating Value Added Margin (VAM) in all Brazilian states. This would be a major
breakthrough both for our process system and for the states, since it would reduce the likelihood of an inter-
state tax war. Since no progress has been made on this issue, we continue to negotiate directly with state go-
vernments and we still have cases pending in court in the states of Paraná, Mato Grosso do Sul and the Federal
District, where it has not been possible to reach an agreement on the method of calculating VAM.
4.9
GOVERNMENT
NATUR A'S REL ATIONSHIP WITH THE
G OV E R N M E N T I S G U I D E D BY O PE N ,
T R A N S P A R E N T, A N D U N B I A S E D
DIALOGUE
. WE WANT TO BE RECOGNIZED
AS AN IMPORTANT CONTRIBUTOR TO THE
PROCESS OF FORMULATING PUBLIC POLICY,
PL AY I N G A L E A D I N G RO L E I N SOC IAL
TRANSFORMATION
ON ISSUES RELATED TO
OUR BUSINESS AND OUR WORLD VISION.
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74
On the matter of waste treatment, the publication of the National Policy on Solid Waste, following the
approval of Law 12,305 of 2010, was a major breakthrough. The new policy paves the way for the conso-
lidation of a system that involves the entire solid waste process, including manufacturers, government and
consumers. However, there is still a great deal of work to be done to regulate the law, such as defi ning clear
responsibilities and goals. In 2010, we met with industry representatives to forge a common understanding
on the regulation of the National Policy. We shall continue, through Abihpec, to negotiate a sector-wide
agreement to share the responsibilities for the treatment of waste. (read more on page 32, Priority Topics/
Product Impact).
Among the challenges for 2011, Natura's expanding international business will require a more robust go-
vernance system for our relations with government, in order to guide our corporate and local relationships
in environments with different political contexts and varying degrees of representativeness. One of our
planned strategies is to regionalize our Priority Agenda, targeting our regional offi ces in Brazil and also
our international operations. As a result, we shall remain closer to the issues that can impact our business.
We obtained fi nancing from government agencies through tax incentives that reached just over R$34
million in 2010. Tax benefi ts for our research and innovation projects represented the largest share of
this funding. Law 11,196 of 2005, known locally as Lei do Bem (Law of the Good), provides incentives for
companies developing technological innovations.
GOVERNMENT FUNDS (R$ MILLIONS)
2008
2009
2010
Tax incentives for support and sponsorship
1
5.2
6.1
8.5
Lei do Bem (income tax and social contribution tax
deductions on up to twice the amount spent on research
and technological innovation)
2
15.6
12.4
19.0
Subsidy for ICMS (state VAT) in Itapecerica da Serra
1.8
3.1
6.0
Incentive for extension of maternity leave
3
0.0
0.0
0.6
Total 22.6
21.6
34.1
1. In 2010, Natura sponsored projects eligible for tax deduction under the Rouanet Law (Articles 18 and 26) and the Ancine pro-
gram. Tax incentives were also received for Natura Musical ­ ICMS in the state of Minas Gerais.
2. Tax benefi t related to the 2009 Lei do Bem was amended by the projects' review / audit process.
3. Created by Decree 7052/2009, this expense is not deductible from the calculation of taxable income or from CSLL social contri-
bution tax, but it is fully deductible from corporate income tax (IRPJ).
LOBBYING AND SOCIAL INFLUENCE
We favor the practice of political lobbying when it is done transparently and ethically. We suppor t regula-
tion of this activity, which is lawful and legitimate but lacks rules and limits. In attempting to fi ll this regula-
tory vacuum, we follow our own guidelines for government relations. Lobbying on behalf of our company
is conducted by Daniel Serra, Elizabete Vicentini, Kassia Reis, Rodolfo Guttilla, and Thais Chueiri, who are
all Natura employees.
In addition, we publish other documents outlining our positions and our conduct. We distribute these do-
cuments at our meetings with government representatives.
These documents are: the Integrity Policy against Corruption and Bribery, in which we condemn all illicit prac-
tices, and the Campaign Donation Policy, which clarifi es our decision not to make donations to political parties
or candidates, whether inside or outside election periods. For 2011, we are going to publish our policy on hiring
lobbyists, since we believe that this is another good practice in transparency with our stakeholders.
To join forces and move forward on collective demands for our industry, Natura is a member of Abihpec
and the Brazilian Direct Selling Association (ABEVD). Through these associations, we and our market com-
petitors present a unifi ed voice on issues related to our business and the competitiveness of our industry.
Natura is also a member of the World Federation of Direct Selling Associations.
In 2010, this organization continued to implement its long-term strategic plan that was approved in 2009. Our
membership secures Natura an important foothold in the international market, giving us the opportunity to
learn in different countries and allowing us to broaden our global relationship network. We are also working to
increase our role and infl uence in sector associations in Latin America, in virtue of our expansion in the region.
Continuing in our efforts to positively infl uence our stakeholders through open and transparent dialogue, we
actively take part in networking opportunities, discussions and collaboration events both in Brazil and abroad.
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75
In 2010, we were formally represented in 54 industry associations, entities, and organizations.
REPRESENTATION IN CLASS ENTITIES AND ASSOCIATIONS
Entity/Association
Natura Representative
Type of Representation
ABA ­ Associação Brasileira de Anunciantes (Brazilian Association
of Advertisers)
1. José Vicente Marino
1. Member of the National
Executive Board
2. Vanessa Giannotti
2. Representative of the Committee
of Good Communication Practices
ABERJE ­ Associação Brasileira de Comunicação Empresarial
(Brazilian Association of Corporate Communication)
(www.aberje.com.br)
Rodolfo Guttilla
Chairman of the Decision-Making
Council
ABEVD ­ Associação Brasileira de Empresas de Vendas Diretas
(Brazilian Association of Direct Selling Companies)
(www.abevd.org.br)
1. Rodolfo Guttilla
1. Vice
Chairman
2. Lucilene Prado
2. Coordinator of the Committee
of Legal Affairs and Government
Relations
3. Vice Chairman of the Ethics
Committee
3. Daniel Serra
ABIA ­ Associação Brasileira das Indústrias da Alimentação
(Brazilian Association of Food Industries)
Rodolfo Guttilla
Director
ABIFRA ­ Associação Brasileira das Indústrias de Óleos Essenciais,
Produtos Químicos Aromáticos, Fragrâncias, Aromas e Afi ns
(Brazilian Association of Essential Oils, Aromatic Chemical
Products, Fragrances, Aromas and Similar Industries)
Sérgio Gallucci
Representative
ABIHPEC ­ Associação Brasileira da Indústria de Higiene Pessoal,
Perfumarias e Cosméticos (Brazilian Association of the Personal
Hygiene, Perfume and Cosmetic Industries) (www.abihpec.org.br)
1. Rodolfo Guttilla
1. Vice Chairman
2. Lucilene Prado
2. Director
3. Elizabete Vicentini
3. Representative of the Technical
and Regulatory Committee
4. Thais Chueiri
4. Representative of the
Environment Committee
5. Representative to the Labor
Relations GroupRelações com
Trabalho
5. Luiz Felipe
ABNT ­ Associação Brasileira de Normas Técnicas (Brazilian
Association of Technical Standards) (www.abnt.org.br)
Elizabete Vicentini
Representative
ABPI ­ Associação Brasileira da Propriedade Intelectual (Brazilian
Association of Intellectual Property) (www.abpi.org.br)
Lucilene Prado
Representative
ABRASCA ­ Associação Brasileira das Companhias Abertas
(Brazilian Association of Listed Companies) (www.abrasca.org.br)
Helmut Bossert
Representative
ABRH ­ Associação Brasileira de Recursos Humanos (Brazilian
Association of Human Resources)
Denise Asnis
Representative
AIPPI ­ Association Internationale pour la Protéction de la
Propriété Intellectuelle (International Association for the
Protection of Intellectual Property) (www.aippi.org)
Lucilene Prado
Representative
AMVD ­ Associación Mexicana de Ventas Directas (Mexican
Direct Selling Association)
Cecilia Riviello
Representative
ANPEI ­ Associação Nacional de Pequisa, Desenvolvimento e
Engenharia das Empresas Inovadoras (Brazilian Association of
Research, Development and Engineering of Innovative Companies)
(www.anpei.org.br)
Luciana Hashiba
Director
ASIPI ­ Associación Interamericana de la Propriedad Industrial
(Interamerican Association of Industrial Property) (www.asipi.org)
Lucilene Prado
Representative
Asociación Civil Argentina de Empresas Brasileñas (Argentine Civil
Association of Brazilian Companies) (www.grupobrasil.com.ar)
Heriovaldo Silva
Deputy Treasurer
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76
CASIC - Consejo de Asociaciones de la Industria de Cosmeticos
Latinoamericana (Council of the Latin America Cosmetics Industry
Association)
Rodolfo Guttilla
Representative
CAVEDI ­ Cámara de Venta Directa de Argentina (Direct Selling
Chamber of Argentina)
Pedro Gonzalez
Representative
CEMEFI ­Centro Mexicano para la Filantropia ( Mexican Center
for Philanthropy)
1. Javier Herrero
1. Representative
2. Rosana Bertozzi
2. Representative
CIESP ­ Centro das Indústrias do Estado de São Paulo (Center of
Industries of the State of São Paulo) (www.ciesp.org.br)
Rodolfo Guttilla
Director
CONAR ­ Conselho Regional de Autoregulamentação Publicitária
(Regional Council for Advertising Self-regulation)
José Vicente Marino
Member of the Higher Board
CONSOCIAL ­ Conselho Superior de Responsabilidade Social
(Higher Board of Social Responsibility) (FIESP)
Maria Lucia Guardia
Council Member
ETHOS ­ Institutos Ethos de Empresas e Responsabilidade Social
(Ethos Institute of Companies and Social Responsibility)
(www.ethos.org.br)
In defi nition
2. Marcelo Cardoso
2. Member of Ethos Steering Group
10 Years
FNQ ­ Fundação Nacional da Qualidade (Brazilian National
Foundation on Quality) (www.fnq.org.br)
Pedro Luiz Passos
Vice Chairman of the Board of
Trustees
FUNBIO ­ Fundo Brasileiro para a Biodiversidade (Brazilian
Fund for Biodiversity) (www.funbio.org.br)*
In defi nition
Fundação SOS Mata Atlântica (SOS Atlantic Forest Foundation)
Pedro Luiz Passos
Member of the Board
GIFE ­ Grupo de Institutos, Fundações e Empresas (Group of
Institutions, Foundations and Companies)
Maria Lucia Guardia
Representative
Global Compact - Caring for Climate
Marcos Vaz
Member of Steering Committee
GRI - Global Reporting Initiative (www.globalreporting.org)
Rodolfo Guttilla
Member of the Stakeholder Council
and Co-chair of the Brazilian
National Annex
IBGC ­ Instituto Brasileiro de Governança Corporativa (Brazilian
Institute of Corporate Governance) (www.ibgc.org.br)
Moacir Salztein
Representative
IBRI ­ Instituto Brasileiro de Relações com Investidores (Brazilian
Institute of Investor Relations) (www.ibri.org.br)
Helmut Bossert
Representative
IEDI ­ Instituto de Estudos para o Desenvolvimento Industrial
(Institute of Studies for Industrial Development) (www.iedi.org.br)
Pedro Luiz Passos
Chairman of the Board
IIRC - International Integrated Reporting Committee
Roberto Pedote
Member of Steering Committee
Instituto Empreender Endeavor Brasil (Endeavor Brazil
Entrepreneur Institute) (www.endeavor.org.br)
Pedro Luiz Passos
Member of the Board
Instituto São Paulo Contra a Violência (São Paulo Institute Against
Violence) (www.spcv.org.br)
Rodolfo Guttilla
Representative
ASPI ­ Associação Paulista de Propriedade Intelectual (São Paulo
Association of Intellectual Property) (www.aspi.org.br)
Lucilene Prado
Representative
Cámara de Comercio de Lima (Chamber of Commerce of Lima)
Daniel Gonzaga
Representative
Cámara Peruana de Venta Directa (Peruvian Chamber of Direct
Selling)
Daniel Gonzaga
Representative
Cámara de Venta Directa do Chile (Direct Selling Chamber of Chile
Hans Werner
Representative
CAMBRAS ­ Cámara de Comercio Argentino Brasileña (Argentine
Brazilian Chamber of Commerce) (www.cambras.org.ar)
Heriovaldo Silva
Representative
CANIPEC ­ Cámara Nacional de la Industria de Permumeria,
Cosmetica y Articulos de Tocador e Higiene (México) (Mexican
National Chamber of the Perfumery, Cosmetics and Beauty and
Personal Care Products Industry)
1. Carolina Muñoz
1.Representative
2. Javier Herrero
2. Representative
CAPA ­ Cámara Argentina de la Indústria de Cosmética y Perfumeria
(Argentine Chamber of the Cosmetics and Perfumery Industry)
Heriovaldo Silva
Deputy Member of the Accounts
Review Commission
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77
INTA - International Trademark Association
Lucilene Prado
Representative
IPT ­ Instituto de Pesquisas Tecnológicas (Institute of Technological
Research) (www.ipt.br)
Pedro Luiz Passos
Member of the Board
LIDE ­ Grupo de Líderes Empresariais (Business Leaders Group)
1. Alessandro Carlucci
1. Representative
2. Rodolfo Guttilla
2. Representative
MBC ­ Movimento Brasil Competitivo (Competitive Brazil
Movement) (www.mbc.org.br)
Pedro Luiz Passos
Member of the Board
Movimento Nossa São Paulo (Our São Paulo Movement)
(www.nossasaopaulo.org.br)
In defi nition
PCPC Council - Personal Care Products Council
(www.personalcarecouncil.org)
Elizabete Vicentini
Representative
Rede Social São Paulo (São Paulo Social Network)
Maria Lucia Guardia
Member of the Management
Committee
SIPATESP ­ Sindicato da Indústrtia de Perfumaria e ARtigos de
Toucador do Estado de São Paulo ( Perfume and Beauty Products
Industry Union in the State of São Paulo)
1. Rodolfo Guttilla
1. Vice Chairman
2. Lucilene Prado
2. Deputy Director
The Arthur W. Page Society (www.awpagesociety.com)
Rodolfo Guttilla
Representative
UEBT - Union For Ethical Biotrade
Marcos Vaz
Vice-Chairman
WBCSD - World Business Council for Sustainable Development
(www.wbcsd.org)
Alessandro Carlucci
Conselheiro
WFDSA - World Federation of Direct Selling Associations
1. Alessandro Carlucci
1. Treasurer
2. Rodolfo Guttilla
2. Counselor
WWF Brasil (www.wwf.org.br)*
In defi nition
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78
5.

WHAT FOOTPRINT WE LEAVE
W E WA N T TO
CREATE VALUE
FOR ALL THOSE DIRECTLY
OR INDIRECTLY INVOLVED
W I T H O U R C O M PA N Y B Y
REDUCING
OUR ENVIRONMENTAL
I M P A C T
W H I L E G E N E R A T I N G
E C O N O M I C A N D S O C I A L
B E N E F I T S
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79
5.1
NATURA
VALUE CHAIN
CROSS-SECTIONAL INDICATORS
1. EXTRACTION AND
TRANSPORTATION OF RAW
MATERIALS AND PACKAGING
(DIRECT AND INDIRECT SUPPLIERS)
R$ 3.7 BILLION distributed to
suppliers for the purchase of ingredients,
raw materials, and services
81% of suppliers were satisfi ed
36 CERTIFIED INGREDIENTS used
106,144 METRIC TONS of
greenhouse gases emitted related to the
extraction and transportation of raw
materials and packaging
24,775 METRIC TONS of greenhouse
gases emitted by our direct suppliers
(process and transportation to Natura)
4. USE OF PRODUCTS AND
DISPOSAL OF PACKAGING.
16.9% of refi lls on items billed in Brazil
65.4 millipoints/kg is the
environmental impact of packaging per
quantity of products
1
58,509 metric tons of greenhouse gas
emissions related to the fi nal disposal of
products and packaging
1. This includes the impact of extraction and
manufacturing of packaging.
NATURA'S MAIN PERFORMANCE
INDICATORS IN 2010 RELATED TO
THE STAGES OF OUR VALUE CHAIN.
2. INDUSTRIAL AND INTERNAL
PROCESSES.
R$ 769.2 MILLION distributed to
employees as benefi ts and salaries
R$ 139.7 MILLION invested in
innovation
0.47 LITER of water consumed
per unit billed
443.8 KILOJOULES of energy
consumed per unit billed
25.7 GRAMS of waste generated
per unit billed
25,611 METRIC TONS of
greenhouse gases emitted in
internal processes
3. PRODUCT SALES
(TRANSPORTATION AND
DISTRIBUTION).
R$ 2.7 BILLION distributed to
consultants as sales-related earnings
1.2 MILLION consultants in all
operations
21% consultant loyalty index
168 new products launched
38,275 METRIC TONS of
greenhouse gases emitted transporting
products to consultants and consumers
R$744.1 MILLION in net income
R$5.1 BILLION in net revenues
EBITDA of R$1.2 BILLION
EBITDA margin of 24.5%
R$80 MILLION invested in
corporate responsibility
R$1.4 BILLION paid to the
government in direct and indirect taxes
R$646.9 MILLION distributed
to shareholders as dividends and
interest on capital
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80
We continue to build on our intiatives related to waste generation and effi cient uses of water and energy.
In 2009, we made a decision to be mindful not only of our own impacts on the environment, but to consider
the environmental performance when evaluating potential supply chain partners. As such, our calculation
of our key indicators ­ water and electricity consumption and waste generation ­ included data from con-
tracted suppliers. In 2010, we began to include the performance of our distribution centers and other Natura
facilities in these indicators. Our challenge now is to include the results of our international operations in
these data. Through these initiatives, we can glean a more accurate portrayal of the impact generated by our
business, devise more comprehensive action plans, and infl uence our suppliers to take measures to ensure
environmentally balanced production.
CARBON NEUTRAL
In 2007, we started our Carbon-Neutral Program to signifi cantly reduce our emissions of greenhouse gases
(GHGs). This initiative compels us to fi nd alternatives for improving our effi ciency and ensures our success
by mitigating the environmental impacts of our rapid growth.
Starting the program was the fi rst step of a commitment we made to society: to reduce the company's
GHG emissions by 33% within fi ve years, using our 2006 emissions as a baseline. Since than, we reached a
21% reduction and induced a profound transformation in the processes of our business, besides we neutral-
ized our emissions by supporting social-environmental projects. Through a diagnosis, in 2010 we reviewed
the program deadline for achieving the goal of 2011 to 2013 (read more on next page).
Last year, Natura's absolute emissions totaled 253,312 metric tons of CO
2
e, continuing the trend we set in
recent years for emissions to grow at a slower pace than our business output. In relative terms, there was a
7.3% decline in GHG emissions, due primarily to signifi cant process improvements in our order cycle (which
involves product distribution), international operations, and business management.
Three core components form the heart of the Carbon-Neutral Program: expanding the scope of our in-
ventory; reducing GHG emissions; and offsetting those that cannot be avoided (graphs 1 and 2).
TOTAL EMISSIONS CO
2
e (METRIC TONS)
1 2 3
2008
2009
2010
Direct GHG emissions (Scope 1)
5,469
6,104
7,969
Indirect GHG emissions from energy (Scope 2)
1,692
1,135
2,249
Other indirect GHG emissions (Scope 3)
194,332
225,587
253,094
Total 201,493
232,827
253,312
1 CO
2
e (or CO
2
equivalen)t, a measure used to express GHG emissions, based on their global warming potential.
2 The inventory calculation model was upgraded in 2010. The 2009 base has been recalculated to ensure comparability, and the 2008
base has been maintained because the variation did not exceed the 5% recalculation threshold defi ned by the GHG protocol.
3. The scope of Natura's inventory has a life cycle view, and it includes all direct and indirect emissions, considering the entire value chain,
from extraction of raw materials to fi nal product disposal.
1. TOTAL CO
2
e EMISSIONS
1 2
(IN METRIC TONS)
201,493
2008
232,827
2009
253,312
2010
5.2
CREATION OF
ENVIRONMENTAL
VALUE
O U R M A I N C H A L L E N G E I S T O
B A L A N C E T H E G R OW T H O F
OUR BUSINESS WITH OUR USE OF
N AT U R A L R E SO U RC E S L E A D I N G
US TO DEVELOP INNOVATIVE
TO O L S A N D P R AC T I C E S
TO
REDUCE THE IMPACT OF OUR
O P E R AT I O N S A N D P R O D U C T S .
1. CO2e (or CO2 equivalent): mea-
sure used to express greenhouse
gas emissions, based on the global
warming potential of each one.
2 The inventory calculation model was
enhanced in 2010 to ensure more ac-
curate methods, particularly emission
factors used in calculations. The 2009
base has been recalculated to enable
accurate assessment of performance
in 2010. The 2008 base has been
maintained because the improvement
made in 2010 did not exceed the re-
calculation threshold of 5% variation
defi ned by the GHG protocol.
2. RELATIVE EMISSIONS
(KG OF CO2E/KG
PRODUCTS INVOICED)
1
2
3.82
2008
3.55
2009
3.30
2010
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81
EMISSIONS INVENTORY
To calculate our inventory, we take into account the total volume of our emissions related to scope 1, 2 and
3 ­ in other words, the survey covers the extraction of raw materials in nature to the fi nal disposal of the
product. Our inventory follows the standards of the Greenhouse Gas Protocol Initiative and ABNT stan-
dard NBR ISO 14064-1, which set out the rules for conceiving, developing, managing and preparing
them.
PwC, an independent auditing and consulting fi rm, conducts specifi c verifi cation (limited assurance) of the
data in the 2010 Natura Consolidated GHG Inventory Report.
Periodically, we make improvements to streamline the process of calculating the inventory and speed up
the access to the information. In 2010, the analysis started to be made on a quarterly basis, instead of the
previous practice of every four months. This shorter cycle allows for the identifi cation of improvement
opportunities throughout the inventory process, making it possible to correct distortions throughout the
year to achieve the targeted results. Since last year, we have been using a new methodology thatallows an
evaluation of the impacts of each Natura product.
Our operations do not emit or use substances that damage the ozone layer. Emissions of particulate matter
and NOx and SOx gases are monitored and are not signifi cant.
REDUCTION
Only carbon-emissions cuts will contain climate change and its impacts. That is why reducing our GHG
emissions is central to the Carbon Neutral Program.
The complexity of the actions, which involve a deep transformation of how we do business, partly explain the
revised deadline for attaining the target reduction of 33%. Several forecasts made at the outset of the program
in 2007 turned out to be incorrect or were overly ambitious to achieve the goal in fi ve years. We also found
ourselves behind schedule in implementing some of our projects, partly because of a slower-than-expected
technological evolution of the market. Among the diffi culties we currently face is a low supply of raw materials
from plant origin, like biopolymers used in manufacturing lower-impact plastic packaging, and a shortage of com-
mercially viable recycled materials with traceable chains for use in the manufacturing of packaging.
To accelerate carbon-emission reductions in the years ahead, we launched the Less Carbon, More Pro-
ductivity program in 2010. This initiative is structured on fi ve action fronts: staff engagement, education,
and training, identifi cation of projects, improvements in processes, and connecting with the business. In
the last three pillars, signifi cant advances have been made in incorporating the carbon impact into business
decisions by creating policies for prioritizing materials and new measurement tools.
We also now generate detailed analyses of the emissions from Natura's major processes. We have a tool
capable of estimating gas emissions from each process, which enables managers to understand the impact
of their activities on the company's emission inventory and to make more conscientious decisions as a re-
sult. In the new product development area, we have created a tool for estimating emissions from products
and packaging beginning with their conception. In other words, based on specifi c data, this tool can forecast
a potential product's future environmental impact in addition to making comparisons with items of the
same category and Business Unit.
On another front of the Less Carbon More Productivity program, we identifi ed 10 projects with new reduc-
tion opportunities and we created eight rules for the development of new products. One of these rules, for
example, establishes that the launch of new items or modifi cations to existing ones must have GHG emissions
that are equal or lower than the product they are replacing or the average of the category the item belongs to.
If emissions are higher, it must be submitted to analysis by the Product Committee, which reports to Natura's
Executive Committee.
The program also encompasses education and engagement, seeking to disseminate knowledge on climate
change among employees from different levels and departments of Natura.
These efforts have resulted in the formation of a portfolio of projects with the potential for us to achieve our
target to cut GHG emissions by 33% by 2013. They have also prompted a shift in our management, which now
incorporates carbon reduction criteria into our business processes. Moreover, carbon has also been incorpo-
rated into Natura's key processes, such as the strategic growth plan for product categories and the Natura
Project Management Methodology.
We have already begun to reap the fruit of this process by exceeding the relative emissions reduction
target, having achieved 7.3% in 2010 compared to a projected target of 4.4% . The decline is primarily due
to signifi cant reductions in several processes like the Order Cycle (which involves the distribution of our
products), international operations and Business Management.
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82
¾ Consolidation of the regional distribution centers (we have opened three new centers since 2009)
and greater incentives for these centers to use maritime transport. These logistical changes have
brought us closer to our consultants and cut diesel and gasoline consumption by transportation com-
panies delivering orders.
¾ Use of smaller boxes in product distribution, permitting more effi cient loading of cars and trucks.
¾ In our international operations, the sharp rise in product billings (nearly 60%), driven primarily by
the operations in Argentina and Colombia, contributed to the reduction of relative emissions, since
carbon emissions did not rise proportionally.
¾ Advances in the sale of products with a lower carbon index than the average of Natura products in
the skin/body care category: soaps and oils, in addition to the launch of the new refi ll.
We also face the additional challenge of reducing absolute GHG emissions by 10% between 2008 and
2012. This target refers to direct emissions and electricity consumption (the so-called scopes 1 and 2 of
our Brazilian operations). We are sticking to our commitment, although we have not yet reached the
expected results given the delay in implementing projects, in addition to external factors. Because of
the delay in release of the environmental license, we postponed by almost a year the installation of a
fl ex boiler, which began operating at the end of 2010. Another postponed initiative was the adoption of
ethanol-powered vehicles for the sales force, implemented beginning March 2011, eight months after the
initial period. These two initiatives will produce results this year and represent over 60% of the emis-
sions to be cut.
A further diffi culty involves the increased use of coal-fi red thermal power plants in Brazil. With a more
polluting energy matrix, the emission factor of the electricity grid was increased by over 100% in the com-
position of total GHG emissions.
OFFSETTING
Emissions that cannot be avoided are offset through projects that focus on energy effi ciency, the exchange
of fossil fuels for renewable energy, and the reforestation of degraded areas. Methods are selected using a
biannual public tender available throughout Brazil.
In the process for the 2009­2010 two-year period, six projects were selected in Brazil, from among the 82
submitted, which were expected to neutralize 465,237 metric tons of CO
2
e emissions in 2009 and 2010. Part
of these emissions were offset by purchasing credits and others will be offset with future credits. In 2011, a
new contract is expected to be concluded that will include a project to offset emissions in Latin America.
GHG emission offset projects supported by Natura ­ 2009/2010 series
ENERGY PROJECTS
USE OF RENEWABLE BIOMASS
SUSTAINABLE CARBON CONSULTING
The project promotes the use of sawdust, woodchips and sugarcane bagasse to replace native fi rewood
taken from Brazil's cerrado savannah region for the furnaces of the ceramic roof tile company Cerâmica
Santorini in Ituiutaba, in the state of Minas Gerais. We have purchased 35,634 metric tons of CO
2
already
generated and sealed a partnership to offset another 102,200 metric tons in seven years.
USE OF RENEWABLE BIOMASS
SUSTAINABLE CARBON CONSULTING
The project intends to replace native wood used in furnaces, which has added to the deforestation of Bra-
zil's caatinga thorn forest, with inputs such as coconut shells, pruned branches of cashew trees, sugarcane
bagasse and sawdust. The project is developed at ceramics company Cerâmica JL Silva, in Lajedo, in the
state of Pernambuco. It has offset 74,880 metric tons of CO
2
e in four years.
ENERGY EFFICIENT STOVES IN THE RECÔNCAVO BAIANO II
PERENE INSTITUTE
The project expands the 2009 initiative to replace rudimentary wood-burning stoves for more effi cient
versions in rural households in Bahia. The initiative will install 5,000 new stoves in the region. Rudimentary
stoves consume more wood, emit more greenhouse gases and add to the degradation of the Atlantic For-
est, and they are also a health hazard due to the smoke they release. The project will offset 94,000 metric
tons of CO
2
e in eight years.
REPLACING FUEL OIL WITH SEBUM
EQAO CONSULTING
The reduction in emissions results from the partial replacement of fossil fuels (oil) with renewable fuel (se-
bum) used in the boilers of the textile company Companhia de Fiação e Tecidos Santo Antônio, in Pirapora,
in the state of Minas Gerais. The project has offset 13,523 metric tons of CO
2
e in one year.
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83
FORESTRY PROJECTS
EMAS-TAQUARI BIODIVERSITY CORRIDOR CARBON PROJECT
ORÉADES GEOPROCESSING CENTER
The project will restore 200 hectares of degraded forest ­ of a total area of 600 hectares ­ with native
species around the Emas National Park and the River Taquari Springs State Park (in the states of Goiás
and Mato Grosso do Sul). The forecast is for the project to offset 70,000 metric tons of CO
2
e in 30 years.
XINGU SOCIO-ENVIRONMENTAL CARBON
SUSTAINABLE XINGU ASSOCIATION, SOCIOAMBIENTAL INSTITUTE (ISA) AND CENTRO DE
VIDA INSTITUTE (ICV)
The objective of this project is to restore 220 hectares of degraded land earmarked for preservation
around the source of the Xingu River in the state of Mato Grosso. The project will offset 75,000 metric
tons of CO
2
in 30 years.
GHG emission offset projects in progress ­ 2007/2008 series
FORESTRY PROJECTS
CARBON, BIODIVERSITY AND COMMUNITY IN THE PAU-BRASIL ECOLOGICAL CORRIDOR (2008 SERIES)
BIOATLÂNTICA INSTITUTE (IBIO)
Reforestation project in the Pau-Brasil National Park and the Monte Pascoal National Park, in Porto Seguro,
in the state of Bahia. It will offset 79,050 metric tons of CO
2
for Natura in 30 years.
Status in 2010 ­ The project should be fully implemented in 2011 and the fi rst carbon credits are forecast for 2015.
XINGU SOCIO-ENVIRONMENTAL CARBON (2008 SERIES)
SOCIOAMBIENTAL INSTITUTE (ISA) AND CENTRO DE VIDA INSTITUTE (ICV)
Recovery of 116 hectares of degraded riparian forest and springs at the source of the Xingu River in the state
of Mato Grosso. It will offset 40,000 metric tons of CO
2
in 30 years.
Status in 2010 ­ The project should be fully implemented in 2011 and the fi rst carbon credits are forecast
for 2014.
FOREST CARBON ­ RECOVERY AND PRESERVATION OF NATURAL RESOURCES (2007 SERIES)
ECOLÓGICA INSTITUTE
The project is working to recover nearly 150 hectares of degraded land, by planting native species of trees in
the protected areas ("Permanent Preservation Areas" and "Legal Reserves") of two rural settlements in the
region of Cantão, in the state of Tocantins. When complete, the project will have offset 60,000 metric tons
of CO
2
e in 20 years.
Status in 2010 ­ The project has been implemented and the fi rst carbon credits are forecast for 2013.
LANDSCAPE RESTORATION AND AGROFORESTRY SYSTEMS (2007 SERIES)
ECOLOGICAL RESEARCH INSTITUTE (IPÊ)
Restoring the vegetation and protecting the diversity of species in an area of 55 hectares, in addition to
implementing 129 hectares of agroforestry systems for the production of coffee. The project will commer-
cially benefi t the rural producers in Pontal do Paranapanema, in the state of São Paulo. The fi nal offset will be
60,000 metric tons of CO
2
e in 30 years.
Status in 2010 ­ The project has been fully implemented and the fi rst carbon credits are forecast for 2011.
ENERGY PROJECTS
ENERGY EFFICIENT STOVES IN THE RECÔNCAVO BAIANO (2008 SERIES)
PERENE INSTITUTE
The project provides for the replacement of rudimentary wood-burning stoves for families living in the
rural communities of the Recôncavo Baiano region of the state of Bahia with more effi cient stoves. The
target is to offset 18,880 metric tons of CO
2
e in eight years.
Status in 2010 ­ The project should be fully implemented in 2011 and the fi rst carbon credits are forecast
for 2014.
Completed projects
ENERGY
USE OF RENEWABLE BIOMASS (2007 SERIES):
ECOLÓGICA ASSESSORIA
Use of renewable biomas for fi ring ceramics at four companies in the states of Pará and Tocantins (60,000
metric tons of CO
2
e offset)
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84
SMALL HYDROELECTRIC POWER PLANT COOPERATIVES (2007 SERIES):
Generation of renewable energy by the cooperatives Creral, Cooperluz and Ceriluz in the state of Rio
Grande do Sul (which resulted in the offsetting of 14,000 metric tons of CO
2
e).
REPLACING FUEL OIL WITH CERTIFIED BIOMASS (2007 SERIES):
Replacing oil-based fossil fuel for renewable fuel from woodchips certifi ed by the Forest Stewardship
Council (FSC) at AMC Têxtil in the state of Santa Catarina (30,000 metric tons of CO
2
e offset).
USE OF RENEWABLE BIOMASS (2008 SERIES):
SUSTAINABLE CARBON
Use of renewable biomass for fi ring ceramics in the state of Alagoas (60,000 metric tons of CO
2
e offset).
BIODIVERSITY
The United Nations declared 2010 as the International Year of Biodiversity. We strengthened our actions in
support of a policy that leads to sustainable development through the use of biodiversity assets and the creation
of a new Brazilian legal framework for access to genetic heritage and its associated traditional knowledge.
Since 2008, we have relied on the Natura Policy for the Sustainable Use of Biodiversity and Traditional
Knowledge. This policy establishes directives for the use of raw materials and the sharing of benefi ts, such
as raw material extraction with the mandatory use of sustainable stewardship through extractivist fam-
ily agriculture-based systems. It is the fruit of the experience acquired as part of a group that plunged
into little-explored complex topics and followed the principles of the Convention on Biological Diversity
established by the United Nations. It presents action guidelines for all internal departments involved in
product research and development on the basis of genetic resources and/or their associated traditional
knowledge. In the case of our relationship network, it serves, among other purposes, as an instrument to
support decision making by upholding our values and the manner in which we work (learn more on page
30, High-Priority Topics/Biodiversity).
SANCTIONS APPLIED BY IBAMA
In November and December 2010, Natura received 68 infraction notices from the Brazilian Institute of the
Environment and Renewable Natural Resources (Ibama) with fi nes of R$22 million for allegedly irregular
access to biodiversity for research and product development. Other local and foreign companies, scientists,
and public research institutions also received notices.
Natura does not agree with these actions and has formally challenged them. We believe that the need for
authorization from the government to start research is a barrier to the development of science and does
not uphold the rights of traditional communities nor does itguarantee protection of biomes. In addition, the
time taken to analyze an application, usually about two years, would mean that pure or applied research
by business would not be feasible.
We believe that our activity complies with the principles of the Convention on Biological Diversity (CBD),
the United Nations treaty on which Natura bases its policy for the sustainable use of biodiversity and tra-
ditional knowledge. Natura has prior approval from all suppliers of biological materials, has signed contracts
with them, and shares benefi ts from the commercial exploitation of species, and does so fairly and equitably.
In 2010, we received important endorsements, particularly from abroad, that attest to our commitment.
The World Business Council for Sustainable Development selected, from among 2,000 companies around
the world, 24 case studies in the responsible use of biodiversity. Natura was identifi ed by the study as the
only company that manages to comply with the three principles of the Convention on Biological Diversity
(CBD): prior consent, sharing of benefi ts and environmental conservation. We were also mentioned in
The Economics of Ecosystems and Biodiversity, published by the United Nations Environment Program,
currently the most important study on the economics of ecosystems and biodiversity.
We view the notifi cations as a positive opportunity, however, to discuss the urgency of developing a legal
framework for biodiversity.
CERTIFICATION OF INGREDIENTS
We certifi ed six more ingredients in 2010 used in perfumes and cosmetics and in our Frutífera line of fruit teas.
They include Cinnamon, Cloves and Dog Rose. We also modifi ed the status of one ingredient to uncertifi ed in
virtue of the changes in the renewal process for organic certifi cation.
We ended the year with 36 certifi ed species, which means that more than 60% of the biodiversity assets
used by Natura have certifi ed production and origin.
background image
85
This process is part of our Program for the Certifi cation of Ingredients, which is a statement of our commitment
to respecting the ecological limits to the production of ingredients we acquire from supplier communities. This
program guarantees that production remains within the levels the environment is capable of supporting.
NUMBER OF ASSETS LICENSED
1
2008
2009
2010
Total assets licensed (units)
26
31
36
Percentage of total licenses
2
(%)
54
58
61
1. Includes vegetable inputs in the form of waxes, oils, extracts, essential or fresh oils (cosmetics and teas).
The certifi cations include family farmers and the traditional communities whose production is certifi ed by
three different protocols: organic agriculture (the Biodynamics Institute, Ecocert, the International Agricul-
tural Organization, and the Ecological Market Institute); sustainable agriculture (the Sustainable Agriculture
Network); and forestry (the Forest Stewardship Council).
Natura does not use invasive species or engage in habitat conversion, which involves transforming a natural
environment to cater to production interests. We look for raw materials in places where they occur naturally,
we avoid monoculture and we give preference to products that are pesticide-free, in accordance with organic
production models.
One of the prerequisites of certifi cation is production traceability, a process in which producers document
and provide information on the origin of all their production.
STATUS OF THE NATURA INGREDIENT CERTIFICATION PROGRAM 2010
Ingredient/Ekos (State)
Start
End
Start
End
Start
End
Production System
Andiroba
Carapa guianensis (Amazonas)
X
X
X
Manejo tradicional
Açaí Berry
Euterpe precatoria (Rondônia)
X
X
X
X
X
X
Agroforestry
system
SAN
Lemongrass (F)
Cymbopogon citratus
(Paraná and São Paulo)
X
X
X
X
X
X
Cultivation
ECOCERT
Brazil Nut
Bertholletia excelsa (Amapá)
X
X
X
X
X
X
Traditional
stewardship
Imafl ora
Cacau
Theobroma cacao (Bahia)
X
X
X
X
X
X
Agroforestry
system
IBD
White Pitch
Protium pallidum (Amapá)
X
X
X
X
X
X
Traditional
stewardship
Imafl ora
Cupuaçu
Theobroma grandifl orum
(Rondônia)
X
X
X
X
X
X
Agroforestry
system
SAN
Passion Fruit
Passifl ora edulis (Minas Gerais)
X
X
Cultivation
Yerba Mate
Ilex paraguaiensis
(Rio Grande do Sul)
X
X
X
X
X
X
Traditional
stewardship
Imafl ora
Murumuru Palm
Astrocaryum murumuru
(Amazonas)
X
X
X
Traditional
stewardship
Pitanga
Eugenia unifl ora
(São Paulo and Paraná)
X
X
X
X
X
X
Cultivation
and organic
stewardship
ECOCERT
Priprioca
Cyperus articulatus (Pará)
X
X
X
X
X
X
Cultivation
IBD
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86
1. We have nine certifi ed ingredients that are part of the portfolio of products that have not yet been launched on the market. They are
not, therefore, listed in this table.
2. The raw materials marked with an (F) are part of the Frutífera organic fruit tea line.
3. Stage I: Internal process of identifi cation and selection of a potential supplier area. This phase is characterized by the typology of produc-
ers, the organization of the community and the existing type of stewardship (agricultural or forestry).
4. Stage II: Preparation of certifi cation strategies, involving discussion of the processes with plant product suppliers, choice of the certifi ca-
tion agency and preliminary analysis of the supplier area by this agency (when necessary).
5. Stage III: Inspection of certifi cation in the supplier areas, implementation of the action plan to meet the compliance requirements of the
certifi cation agencies and opinion of the certifi cation agency to obtain the seal.
* Forest Certifi cation, Forest Stewardship Council (FSC) seal (partner certifi cation agency - IMAFLORA)
Sustainable Agriculture Certifi cation, Sustainable Agriculture Network (SAN) seal (partner certifi cation agency - IMAFLORA)
Organic Certifi cation, Biodynamics Institute (IBD) seal (partner certifi cation agency - IBD)
Organic Certifi cation, Ecocert seal (partner certifi cation agency - ECOCERT)
Organic Certifi cation, International Agricultural Organization (OIA) seal (partner certifi cation agency in Argentina)
Organic Certifi cation, Ecological Market Institute (IMO) seal (partner certifi cation agency - IMO)
Carqueja (F)
Bacharis genisteloides D.C.
(Paraná)
X
X
X
X
X
X
Cultivo
orgânico
ECOCERT
Peppermint (F)
Mentha piperita L. (Paraná)
X
X
X
X
X
X
Organic
cultivation
ECOCERT
Chamomile (F)
Chamomilla recutita (Paraná)
X
X
X
X
X
X
Organic
cultivation
ECOCERT
Fennel (F)
Foeniculum vulgare Miller
(Paraná)
X
X
X
X
X
X
Organic
cultivation
ECOCERT
Cinnamon (F)
Cinnamomum zeylanicum Ness
(Alemanha)
X
X
X
X
X
X
Organic
cultivation
IMO
Cloves (F)
Caryophyllus aromaticus L.
(Bahia and Germany)
X
X
X
X
X
X
Organic
cultivation
IMO
Dog Rose (F)
Rosa canina L. (Germany)
X
X
X
X
X
X
Organic
cultivation
IMO
Paracress
Spilanthes oleracea (São Paulo)
X
X
X
X
X
X
Organic
cultivation
IBD
Lemon Brazil
Ocimum americanum (Pará)
X
X
X
X
X
X
Organic
cultivation
IBD
STAGE I
STAGE II
STAGE III
Ingredient/Other
Start
End
Start
End
Start
End
Notes
Arabica Coffee
Coffea arabica (Minas Gerais)
X
X
X
X
X
X
Cultivation SAN
Fragrant Granadilla
Passifl ora alata (São Paulo)
X
X
X
X
X
X
Cultivation IBD
Paramela
Adesmia buronioides (Patagônia,
Argentina)
X
X
X
X
X
X
Stewardship
OIA
Poejo
Cunilla gallioides
(Rio Grande do Sul)
X
X
X
X
X
X
Cultivation ECOCERT
Carnaúba Palm
Copernicia cerifera
(Rio Grande do Norte)
X
X
X
X
X
X
Stewardship
IBD
Palo Santo
Bursera graveolens (Ecuador)
X
X
X
X
X
X
Stewardship
ECOCERT
Copaíba
Copaifera spp (Amazonas)
X
X
X
X
X
X
Cultivation
ECOCERT
Green Tea (F)
Camelia sinensis (Paraná)
X
X
X
X
X
X
Stewardship
ECOCERT
Candeia
Eremanthus erythropappus
(Minas Gerais)
X
X
X
X
X
X
Stewardship
Imafl ora
Lemon Balm (F)
Melissa offi cinalis (Paraná)
X
X
X
X
X
X
Organic
cultivation
ECOCERT
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87
Of all the inputs used by Natura, two are developed from species on the endangered list compiled by the Bra-
zilian Institute for the Environment and Renewable Natural Resources (Ibama) and the International Union
for the Conservation of Nature and Natural Resources (IUCN). These are Brazil Nut (Bertholletia excelsa)
and Yerba Mate (Ilex paraguariensis). For this reason, we have funded studies in partnership with Embrapa
Genetic Resources and Biotechnology to preserve these species. Furthermore, we only purchase these raw
materials from areas certifi ed by the FSC.
AREAS OF OPERATION
Natura works with suppliers of species of Brazilian biodiversity from across the country. Some of them are
situated in areas protected by the National System of Preservation Units, such as the Médio Juruá Extractivist
Reserve, in the state of Amazonas, and the São Francisco Community, located in the Iratapuru Sustainable De-
velopment Reserve, in the state of Amapá.
In the Médio Juruá Extractivist Reserve, which comprises 253,000 hectares of protected land, Andiroba and
Murumuru Palm stewardship occurs in an area smaller than 1% of the total reserve.
The sustainable stewardship of Brazil Nuts, Copaiba and White Pitch, meanwhile, occurs in an area of approxi-
mately 4,000 hectares, less than 0.5% the 842,000 hectares of the Médio Juruá Extractivist Reserve. All produc-
tion has the approval of these Preservation Units.
Natura's head offi ce is located in an area of 646,000 square meters inside an Environmental Protection Area
off the Anhanguera Highway, in the municipality of Cajamar, in Greater São Paulo. A stewardship plan developed
by Natura has been removing exotic species, restoring the native forest and increasing the local biodiversity. In
2010, some 3,500 trees of 90 species native to the Atlantic Forest were planted. The project also controls and
monitors the species of fl ora and fauna.
Our facility in the municipality of Itapecerica da Serra, in the state of São Paulo, alongside the Régis Bittencourt
Highway, stands on an area of 96,543 square meters inside the Protection and Recovery Area of the Springs of
the Guarapiranga Water Basin. In 2008, we completed a project to restore riparian forest and, since 2009, we
have been handling the maintenance of the area.
The restoration projects developed at Cajamar and Itapecerica da Serra are monitored by the São Paulo State
Natural Resources Protection Department, the government agency responsible for this issue. Both units have
permanent preservation reserves. Although administrative activities are conducted at both units, production oc-
curs in Cajamar. All these operations are in full compliance with applicable legal requirements.
PRODUCT IMPACT
We monitor the impact of our product packaging using the Life Cycle Assessment (LCA) tool, in addi-
tion to carbon emissions. This tool enables us to quantify and monitor the ecological impact of packaging
materials from the extraction of the raw materials through production, use, and disposal (graphs 1 and 2)
To reduce this impact, Natura invests in innovative technologies and employs the concepts of ecological design,
which includes reducing the mass of packaging and using recycled and recyclable materials. (Read more on our
position on page 32, Priority Topics/Product Impact).
TOTAL MATERIAL USED BY TYPE (EXCEPT WATER) IN THOUSANDS ¹
2008
2009
2010
Kilograms 22,434.4
27,991.3
22,475.3
Liters 8,792.0
10,813.9
11,016.7
1. Refers to the Cajamar site. Consumables reported are inputs (raw materials and packaging) for processing of fi nished and semi-
fi nished products.
In 2010, we launched in Brazil the fi rst cosmetic product with green polyethylene packaging: refi lls for
Natura Erva Doce hand soap. Manufactured from sugar cane, a renewable source, green polyethylene is
100% recyclable and reduces (GHG) emissions by 58% compared with conventional plastic, according to
Natura internal studies.
We also launched a new refi ll for the Todo Dia (Everyday) moisturizer. Internal studies showed 66% less
environmental impact in comparison with the previous refi ll, 83% less plastic than in regular packaging, and
a 97% reduction in waste generated.
In spite of these advances, we saw a decline in the use of refi lls in comparison with all items billed by Na-
tura. We sought to achieve a target an 18.5% of the total of these items; our rate in 2010 was 16.9% . This
development was due in part to greater representativeness of sales of items in special or seasonal kits that
cannot be refi lled. The potential for increasing refi lls is signifi cant. While 40% of our products have a refi ll
option, they represent 55% of our billed products. In our international operations, use of refi lls is increasing
in most countries except Mexico, with a consistent recovery in Argentina and Chile. For 2011, our challenge
is to increase the awareness of refi ll options for our consumers outside Brazil.
1. ENVIRONMENTAL
IMPACT OF PACKAGING BY
QUANTITY OF PRODUCT
(MPT/KG)
71.3
2008
69.5
2009
65.4
2010
2. RECYCLED
MATERIALS USED (%)
1
1. The indicator considers packaging
materials and distribution materials
(magazines, distribution boxes, and
bags) recycled after use.
13.0
2008
10.4
2009
10.4
2010
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88
REFILLS PERCENTAGE OF ITEMS BILLED (%)¹
2008
2009
2010
Brazil 19.9
18.4
16.9
Argentina 20.7
15.9
18.3
Chile
16.1
11.7
13.9
Colombia 12.1
12.2
13.2
France 9.3
8.5
9.8
Mexico 11.6
11.5
11.3
Peru 21.4
18.6
18.9
1. Corresponds to total refi lls billed divided by total items billed.
Since 2007, we have been compiling an environmental table for our products, raising the awareness of our con-
sumers by providing information on the origin, the manufacturing process and the percentage of certifi ed raw
materials, in addition to the use of recycled and recyclable materials and the number of refi lls.
PRODUCT
2008
2009
2010
% material of renewable plant origin
77.4
79.2
81.5
% material of natural plant origin
8.0
5.2
6.6
% material with certifi cate of origin
20.3
16.1
16
Packaging
% recycled material after use
0.7
0.7
0.8
% recyclable material
85.8
85.9
85.7
1. More information on the environmental table at http://www2.natura.net/Web/Br/Inst/src/TabMeioAmbiente.asp
2. Certifi cate of origin 99% organic farming and 1% forest stewardship
We comply with all legal requirements on the provision of information on product ingredients, instructions for
use, declared benefi ts and outsourced production. Our labels observe all applicable legislation and respect all
the cosmetics-related regulations issued by Anvisa in Brazil, as well as the regulatory agencies of other countries
where we operate. We also compile an environmental table for our products, which provides information on
their environmental impact.
WASTE MANAGEMENT
Solid waste management at Natura includes separation, classifi cation, conditioning, collection, transporta-
tion, and fi nal disposal, with the aim of reducing volume, expanding recycling, and being particularly careful
with hazardous waste. In 2010, we began to develop an extensive solid waste management project cover-
ing the entire life cycle of our products, from the extraction of raw materials to the disposal of packaging
and the reuse of materials (learn more on page 33, High-Priority Topics/Product Impact).
We recorded an increase of 19.8% in total waste generated last year and 8.2% in the relative index, which
compares the quantity of waste per product unit billed. This increase can be attributed to the inclusion of
data in the indicator from four distribution centers and the Natura Houses in Brazil. Had these areas not
been included, the index would have remained at the same level as the previous year. Our increase in pro-
duction and the higher disposal of obsolete products also affected waste generation. These developments
present a glimpse of the challenge we face in improving our waste management processes (graph 1).
We also recorded an increase in the generation of hazardous waste, due primarily to the amount of
discontinued or expired cosmetics products in stock. This was prompted by our efforts to improve the
quality of service. We increased our inventories in 2009 in an attempt to avoid product shortages for our
consultants, causing us to register a higher loss index in 2010. We have reviewed this practice to avoid such
high losses again.
To reverse this situation, we have established an action plan that includes alternatives that minimize the
environmental impact of the primary waste-generating processes, periodic verifi cation of the indicator, and
a review of items currently incinerated or sent to landfi lls so as to defi ne alternative recycling methods.
We also plan to standardize data collection at Natura and third-party units. The goal of this is to improve
the quality of the information collected and initiate waste monitoring in our international operations. Our
target for 2011 is to reduce the total weight of waste per unit billed by 3% .
With new alternatives for disposing of materials that were previously incinerated, and through a partner-
ship with our cardboard supplier to recycle 100% of this material in Cajamar, we increased the percentage
of recycled waste by 8.3% . Today, 92.1% of all waste produced at Natura is recycled.
25.8
2008
23.8
2009
25.7
2010
1. TOTAL QUANTITY
OF WASTE PER UNIT
BILLED (GRAMS/UNIT)
1
1. Before 2008, the indicator was
calculated considering only the
waste generated at Natura units. In
2010, we included main contractors
and improved the calculation basis
to match the indicators of water and
energy. For this reason, the historical
record was recalculated.
background image
89
We have been running a pilot recycling project in Colombia since 2009, in which our consultants assist by
collecting recyclable material. In 2010, we more than doubled the amount of material collected, reaching
97,285 metric tons. This increase can be attributed to the introduction of the Natura Changemaker Con-
sultant program, which encourages consultants to get involved in their communities (housing complexes,
department stores, etc.) to install recycling banks for these materials. We also seal partnerships with local
companies to support the project with logistical and administrative assistance.
TOTAL AMOUNT OF WASTE BY TYPE (mt) AND LOCATION GENERATED
1 2
2008
2009
2010
Class I
3
1,348.3
1,436.6
2,128.2
Class II-A
4,330.7
4,817.8
4,717.5
Class II-B
1,444.6
1,390.5
1,308.0
Waste at the Cajamar and Itapecerica da Serra sites
7,123.6
7,618.9
8,153.7
Waste at other Natura sites
4
224.5
251.4
1,412.1
Waste at Natura contracted manufacturers
5
1,286.8
1,241.6
1,346.5
Total weight of waste disposed of
8,634.9
9,111.9
10,912.3
1. According to NBR 10.004/2004: Class I Waste: hazardous waste (outdated cosmetics, clinical and laboratory waste and alcohol); Waste
Class II-A, non-inert waste (physico-chemical and biological effl uent treatment plant sludge, paper, cardboard); Waste Class II-B: inert waste
(metals, plastics).
2. Natura does not include in this indicator waste generated in construction works (debris) carried out on its sites.
3. Refers to Class I waste, deemed hazardous under the Basel Convention, transported and treated. We do not import, export or transport
such waste internationally.
4. Refers to the generation of waste from the industrial unit at Benevides - Pará, opened in May 2007, and the Administrative Unit of
Barueri (Alphaville), in the distribution centers of Matias Barbosa (MG), Recife (PE), Salvador (BA), Canoas (RS), the outpost of Uberlândia
(MG), the hub at Jundiaí (SP), and in Natura houses.
5. Contracted manufacturers are companies that make (or are involved in the fi nal stage of production of) fi nished products with the
Natura brand. We monitor the 10 main contracted parties responsible for approximately 90% of the units produced outside Cajamar.
WASTE DISPOSAL
1
2008
2009
2010
Incinerated
(%) 2.5
1.9
1.2
(mt) 176.3
142.4
101.0
Dumped in landfi ll
(%) 8.8
6.6
6.7
(mt) 627.8
510.3
546.5
Recycled
(%) 88.7
91.5
92.1
(mt) 6,319.5
6,958.3
7,535.7
1. Waste at the Cajamar, Itapecerica da Serra and Alphaville sites
RECYCLING OF WASTE BY DISPOSAL METHOD (mt)
1
2008
2009
2010
Composting
942.5
1,284.8
1,112.7
Co-processing
727.8
1,288.1
1,635.8
Transformation 4,649.2
4,385.4
4,787.3
1. Waste at the Cajamar, Itapecerica da Serra and Alphaville sites
WATER AND EFFLUENTS
Following the implementation of effi ciency projects, awareness programs and water consumption control,
we achieved a 10% reduction in relative consumption per unit billed. Our absolute consumption of water
remained stable, even as our production rose. The improvements implemented in waste management
also resulted in gains in water reuse and recycling in 2010. Knowing that sustainable use of water is a major
global challenge, we have made progress in analyzing our water footprint (learn more on page 33, High-
priority Topics/Product Impact).
The reduction in relative water consumption was motivated by reductions at Cajamar and Itapecerica da
Serra, which reduced consumption by 5% . However, there was a 17% increase in water use in other Natura
areas, the result of having incorporated the Simões Filho Distribution Center, in the state of Bahia, into the
indicator. We also recorded an increase of 3.5% in absolute consumption at outsourced companies, stem-
ming from an increase in units purchased (graph 2).
2. WATER CONSUMPTION
PER UNIT BILLED (LITERS/
UNIT BILLED)
1
1. The indicator takes into account
the volume of water used by Natu-
ra and the major contracted parties
0.48
2008
0.52
2009
0.47
2010
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90
WATER CONSUMPTION BY SOURCE AT THE MAIN NATURA SITES
2008
2009
2010
Cajamar and Itapecerica da Serra sites m
3
)
1
112,342
123,012
116,883
Other Natura sites in Brazil (m
3
)
2
11,894
27,813
32,600
Contracted Natura manufacturers (m³)
3
37,090
49,783
51,507
Total water consumption (m
3
) 161,326
200,608
200,991
1. Consumption in the two units includes all administrative and production activities and events at the sites.
2. Water consumption at other Natura Brasil sites refers to the units of Alphaville, Benevides, Natura Houses, Distribution Centers (DCs)
and Outposts. For the 2010 calculation, one more DC was included.
3. Contracted manufacturers are companies that manufacture fi nished products on behalf of Natura; the indicator covers 95% of all units
purchased by Natura.
The percentage of reused water increased from 35% to 38% of the total amount used in our operations. The
volume of recycled and reused water in 2010 was 49,700 cubic meters, nearly 40% more than in 2009. This
increase occurred in virtue of Natura's decision to reuse residual water from the treatment system, redirecting
it to supply the site in observance of all standards and controls required by law.
PERCENTAGE AND TOTAL VOLUME OF WATER RECYCLED AND REUSED
2008
2009
2010
Recycled and reused water (m³)
1
35,824.0
35,838.0
49,734.0
Percentage of reused water of total treated water
at effl uent treatment plant (%)
2
38.0
35.0
38.0
Percentage of reuse over total water drawn (%)
32
29
43
1. Recycled water is water extracted from waste water generated at the Cajamar site that, after physiochemical and biological treatment
at the Effl uent Treatment Plant, is used for irrigation, urinals, fl oor cleaning and ponds. Reused water is water that returns from the process
with suffi cient quality to be used in the supply process.
2. This percentage refers to the volume of reused water from the treatment plant compared to the total volume of water treated at the
Cajamar and Itapecerica da Serra treatment plants.
SIGNIFICANT DISCHARGES TO WATER (m³)
1
2008
2
2009
2010
Total volume of treated effl uent
100,979.0
101,672.0
102,903.0
1. Refers to the Cajamar and Itapecerica da Serra sites.
2. The information was revised because of a calculation error.
For our everyday consumption, given the absence of a public supply system, the water used at our facilities
in Cajamar and Itapecerica da Serra is drawn from two artesian wells. Our underground water source is a
crystalline aquifer, and the water extraction meets the regulations of the São Paulo State Water and Electrical
Energy Department (DAEE). In 2010, following a risk analysis conducted by Natura, we applied for a permit
to build a third well as a contingency to support the growth of production. We have a permit to draw water
from our artesian wells up to the following limits: 8m3/h in Itapecerica, 12m3/h at the fi rst well in Cajamar and
15m3/h at the second well in Cajamar.
A study completed in 2010 identifi ed that the region possesses water in suffi cient quantities to supply our cur-
rent demand without running the risk of compromising our activities or those of the surrounding area. New
studies will be conducted based on the company's forecast growth for the next few years.
In Benevides, water is obtained from artesian wells and captured rainwater. At our other facilities, such as Natura
Houses and Distribution Centers, it is provided by the public water supply system.
In 2010, we registered no incidents of signifi cant spills or accidents involving products or substances causing an
environmental impact as a result of our operations.
Before being discharged, all our effl uents pass through the Effl uent Treatment Station (ETE). The quality fully
meets the applicable legal requirements, respecting all discharge conditions and standards provided for in Brazil-
ian legislation. In the town of Cajamar, the treated effl uent is discharged into the Juqueri River, which is consid-
ered a class 3 river, meaning its water may be used in household supply after conventional treatment. In 2010, the
Cajamar ETE was modernized, improving even further the quality of the operation's effl uent treatment system.
The Itapecerica da Serra ETE, meanwhile, is located in a spring water preservation area, and after conventional
treatment the effl uents fi lter through the soil. The effi ciency of the organic matter removal is, on average, 96.9%.
At the Benevides Industrial Plant, we have a system to capture industrial wastewater, which is treated exter-
nally by a contracted company. After treatment, domestic effl uent is channeled to a septic tank. We intend to
install an ETE in Benevides in 2011, but this depends on the Municipal Environment Department releasing
the necessary licenses.
1. The indicator takes into account the
volume of water used by Natura and
the major contracted parties
4. WATER CONSUMPTION
PER UNIT BILLED
(LITERS/UNIT BILLED)
1
0.48
2008
0.52
2009
0.47
2010
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91
CAJAMAR PERMEATE
Legal
parameter
2008
2009
2010
BOD
(mg/L)
60 5.5 6.0
7.4
COD
(mg/L)
150 43.6 43.0
45.0
Oils and greases (mg/L)
120
7.8
7.1
15.4
TREATED EFFLUENT ITAPECERICA DA SERRA
Legal
parameter
2008
2009
2010
BOD
(mg/L)
60 19.6 20.2
25.4
COD
(mg/L)
150 73.2 69.0
65.2
Oils and greases (mg/L)
120
8.1
7.5
14.8
ENERGY
In 2010, we reduced relative energy consumption (consumption per unit billed) by 0.8% . To achieve this
result, we implemented several improvements, primarily at Cajamar, in addition to effi ciency gains from
better energy resource management. In absolute terms, the Cajamar and Itapecerica da Serra units reg-
istered a 2.8% combined increase in consumption, owing to the installation of new manufacturing equip-
ment. The 22.1% increase in other Natura areas was the result of having incorporated the Simões Filho
Distribution Center, in Bahia, in this indicator, as well as the modernization of three other distribution
centers. Total consumption by major subcontractors parties rose by 30.8% because of the greater number
of units acquired (graph 1).
We registered a 74% decline in diesel oil consumption in our generators, due to fewer power outages at
our head offi ce. This means there was less demand for generators.
2010 ENERGY MATRIX (CAJAMAR AND ITAPECERICA) (%)
2008
2009
2010
Electricity 75.9
75.9
77.3
LPG
22.0
23.1
22.4
Diesel 2.1
1.0
0.3
Solar energy
0.01
0.01
0.02
We encourage the use of energy generated from renewable and alternative sources. In 2010, we introduced the
Encouraged Energy Sales Contract, which stipulates that electrical energy supplied to our facilities in Cajamar
and Itapecerica come from the primary encouraged sources (wind, biomass, solar and small hydroelectric power
stations). In previous years, electrical energy was purchased from the Brazilian energy grid, which is generated
from both renewable and non-renewable sources.
In Cajamar, we also use a system of solar energy that now provides lighting for the parking lot and heats water
in the changing rooms and in the kitchen. The solar energy represents 0.03% of our energy matrix. In December
2010, we substituted 80% of the LP gas used in our boilers in Cajamar for alcohol, which will result in an emis-
sions reduction of around 1,360 metric tons of CO2 per year, starting in 2011.
DIRECT ENERGY USE, SEGMENTED BY PRIMARY SOURCES (JOULES X 10
12
)
2008
2009
2010
Primary source of electricity
95.9
94.0
98.9
Self-generated electricity (diesel generator)
0.03
0.03
0.03
Diesel fuel used in generators
2.7
1.6
0.41
Consumption of LPG
27.8
28.9
28.6
TOTAL
126.4
124.5
127.9
DIRECT ENERGY CONSUMPTION (JOULES X 10
12
)
2008
2009
2010
Renewable
sources
0.03 0.03
0.03
Non-renewable sources
30.50
30.50
29.01
INDIRECT ENERGY CONSUMPTION (JOULES X10
12
)
2008
2009
2010
Primary electricity source
95.9
94.0
98.9
1. ENERGY
CONSUMPTION
PER UNIT BILLED
(KILOJOULES)
1
1. The indicator takes into account the
energy used by Natura and major con-
tracted parties.
552.1
2008
447.3
2009
443.8
2010
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92
ENERGY SAVED BY USING SOLAR ENERGY (JOULESX10
9
)
2008
2009
2010
Consumption of solar energy (joules)
19.96
19.96
19.96
ENERGY SAVED BY ENERGY EFFICIENCY PROJECTS (JOULESX10
9
)
1
2008
2009
2010
n.a
1.95
2.55
1. Projects intended to reduce the consumption of electrical energy, diesel oil or LPG
IMPACTS FROM MAIN SUPPLIERS
We are also analyzing the impacts of our suppliers, with the intention of stepping up the monitoring of our value
chain for water and energy consumption and waste generation. (Learn more on this issue at www.natura.net/
relatorio).
In 2010, we analyzed 58 partners and we can assert that their investments have improved their energy effi ciency
and kept the indicator almost stable in spite of the increased demand for production. An improvement was
observed in the water indicator after one supplier installed a water reuse system. The same performance was
not seen in the generation of waste, however, which rose 28%, the result of the increase in production and the
lack of effi ciency gains.
We withdrew the data from our distribution centers that were previously included in this indicator: Matias Bar-
bosa, Jaboatão and Canoas. The change is due to our decision to incorporate consumption by the distribution
centers into Natura's own performance indicators. This process is part of the adjustments we have made to
provide a more accurate diagnosis of the impact of our operations. The information on our main outsourced
suppliers that produce some of our products is also excluded from this analysis, since their data are also included
in the performance indicators of Natura.
LEADING NATURA SUPPLIERS OF PACKAGING AND RAW MATERIALS
1 2
2008
2009
2010
Number of suppliers evaluated
46
58
58
Energy Consumption (joules x 10)
Primary source of electricity - electricity consumption
127.0
210.6
146.2
Self-generated electricity - diesel generator
4.6
4.2
0.1
Consumption of LPG
1.8
4.7
4.9
Other - natural gas
113.8
140.3
207.1
Total energy consumed
247.2
359.8
358.3
Water consumption (m
3
)
Total water consumption (thousand)
118.1
155.4
135.5
Waste generation by leading Natura suppliers (tonnes)
Total waste generated
1,752
2,669
3,419
1. Leading input suppliers of the following categories: accessories, packaging, graphics, fragrances, raw materials, printing services and Na-
tura boxes. The numbers are estimated: suppliers are requested to allocate their energy, water consumption and waste generation, taking
into account the percentage production for Natura.
2. In 2010, the numbers for three distribution centers (Matias Barbosa, Jaboatão and Canoas) were redirected to Natura internal indica-
tors. To ensure comparability of indicators, we reviewed the numbers for 2008 and 2009, excluding those DCs.
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93
NATURA INSTITUTE
We have made systematic private social investments since the 1990s because we believe this is a way to express
our Essence: that the value and longevity of a company are related to its ability to contribute to the evolution
of society and its sustainable development.
In 2010, we took an important step forward by founding the Natura Institute, an independent nonprofi t orga-
nization, to extend and strengthen our initiatives, and improve internal management and governance processes
and practices for our social initiatives. Fostering education - a priority for sustainability in Natura's view - is also
the pillar that supports all the activities of the new organization.
The Institute was founded with the participation of members of our Board of Directors and executives. In 2011,
we will make progress in its administrative organization and set up an audit committee and an advisory board,
as well as defi ne a strategic plan for the institution. The institute is given 0.5% of Natura's annual net income in
addition to funds from Natura's Crer para Ver (Believing is Seeing) program.
CRER PARA VER (BELIEVING IS SEEING) PROGRAM
The highlight of our societal activity in 2010 was the record amount of funds raised by the Natura Crer para Ver
program. We had committed to reaching R$6 million, but by the end of the year we had reached R$10 million,
the largest amount raised by the program since its inception in 1995. In 2010, the program invested more than
R$3.9 million in projects. This amount is the result of a R$2.1 million savings from the year's investment plan, es-
timated at R$6 million, through partnerships and exchanges. Therefore, the difference of more than R$5 million
between the amount we collected and what we spent in the year is available in cash holdings for use in 2011
and will help us expand the current projects.
The goal of Crer para Ver is to improve the quality of public schooling. The program funds literacy initiatives
in preschools and elementary schools, as well as for young adults. Our consultants actively participate in the
program by selling the exclusive Crer para Ver product line, receiving no commission for doing so. The Natura
Institute has assumed the administration of our investments in educational initiatives.
INVESTMENT IN EDUCATION FOR PUBLIC BENEFIT IN BRAZIL (R$ THOUSANDS)
2008
2009
2010
Net funds raised by the Crer para Ver program
1
3,767.0
3,768.2
10,098.5
Total amount of projects developed and supported
2
3,381.0
4,075.6 3,876.4
1. Refers to income before income tax (IR) deduction for the Crer para Ver program's fund. Until 2009, net funds raised by the program
had referred to net profi t after IR tax.
2. Refers to the total actually contributed in the year (from the fund and directed to projects and their implementation).
The strong growth in the funds allocated to the program was prompted by a review of our operational strategy.
We have upgraded our portfolio, launched new products with a stronger sales appeal and conducted a diagnosis
to identify new sub-brand visibility opportunities.
In 2010, participation in the program by our consultants in Brazil reached 9.9%, higher than the fi gure in 2009
but still lower than our expectations to engage 12% of consultants. For 2011, we intend to further increase
this participation. We realize that this is a major challenge and, to overcome it, we shall continue to step up our
awareness-raising actions with consultants.
1 PENETRATION -
CRER PARA VER
(% CYCLE)
1
1. This percentage is based on the
number of consultants that purchased
at least one item of the Crer para Ver
line within a cycle divided by the total
number of consultants that placed or-
ders during the same cycle.
9.9
2008
7.1
2009
9.9
2010
5.3
CREATION OF
SOCIAL VALUE
O U R G O A L I S T O C R E A T E
SOCIAL BENEFITS
BY INVESTING
I N E D U C AT I O N , S H A R I N G T H E
G E N E R AT E D R E S O U R C E S A N D
S U P P O R T I N G P E O P L E A N D
INSTITUTIONS THAT ARE COMMITTED
TO T H E CO N S T R U C T I O N O F A
S U STAI N A B LE SOC I ET Y.
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94
Using funds raised by the Natura Crer para Ver program, we extended its reach to 100 new municipalities.
The program now invests in 350 municipalities across Brazil and benefi ts nearly 450,000 people, namely
students, teachers, coordinators, and principals in 5,690 public schools.
Our international operations implemented this program in 2009. Net revenues reached R$1.3 million in 2010,
compared with R$430,000 in the previous year. Funds in these countries are invested in teacher training
and benefi t vulnerable populations. In Chile, for instance, some of these funds are helping to rebuild schools
destroyed by the February 2010 earthquake.
The main initiative of the Crer para Ver program in Brazil is the Trilhas (Trails) Project. This project benefi ts
310,000 children and 15,000 educators in 4,300 schools. The Trilhas Project is designed for children ages 4­6
and provides instructional materials and support for teachers and school principals to help students develop
reading, writing, and speaking skills. In 2010, we signed a technical cooperation agreement with the Ministry
of Education, enabling the ministry to share this methodology with other municipalities and institutions --
transforming the project into a public initiative.
In 2010, we questioned 60% of the principals and teachers from the schools involved, in all regions of the country,
to evaluate the project. The principals and teachers gave an average score of 9.46 and 9.19, respectively, when asked
about the contribution of Trilhas to improving education. More than 80% of the educators considered the teaching
activities to be adequate for children and almost half of them confi rmed that they started to read more to their
pupils after the project started.
OTHER CRER PARA VER PROJECTS
In 2010, we invested in projects such as Encontros de Leitura (Reading Meetings), Formar em Rede (Network-
ing) and the Chapada Project. Since we believe that the fi rst two projects have achieved their goals, they have
been withdrawn from the program, which will invest in new initiatives in 2011. We also support the improve-
ments being made to the Municipal Education Plan in Cajamar, where our head offi ce is located.
ENCONTROS DE LEITURA (READING MEETINGS)
The project is run in partnership with the Education and Documentation Center for Community Action, and last
year it continued to operate in the same 226 schools that were involved in 2009. It benefi tted 1,200 teachers
and 14,000 pupils in 10 municipalities in the following states: Goiás, Rio Grande do Norte, Bahia, Amazonas, São
Paulo, Santa Catarina, Sergipe, Acre and Espírito Santo. The project consists of meetings between education spe-
cialists, school principals, supervisors and teachers to discuss and develop actions to encourage reading among
children from 4 to 6 years old.
FORMAR EM REDE (NETWORKING)
Developed by the Avisa Lá Institute and the Razão Social Institute, this project is supported by Natura in 6
municipalities. The initiative establishes virtual communities formed by education specialists and teachers from
the public school system, with the objective to improve the quality of pre-school education for children up to
6 years old. These communities organize in-person and distance actions to improve, develop and disseminate
practices in the fi eld of reading, caring and playing.
CHAPADA PROJECT
This initiative has received technical and fi nancial support from the Natura Crer Para Ver program since 1997.
Run by the Chapada Institute of Research and Education, the project aims to improve the quality of public pri-
mary education in 24 municipalities in the Chapada Diamantina region of Bahia. To achieve this, it stages ongoing
training for educational directors, supervisors and other teaching professionals. In 2010, the project worked with
600 schools, nearly 5,300 educators and more than 92,000 pupils.
We also conducted the second overall evaluation of the project, listening to the opinions of nearly 4,200 pupils
and more than 500 educators. This process identifi ed progress in important areas of education, namely how well
the children are learning and the defi nition of the role of educational directors, supervisors and local coordina-
tors in training actions.
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95
CRER PARA VER ACTIONS IN 2010
Action Front/
Project
Name of partner
organization
Munici-
palities
served
Number
of schools
served
No. of partici-
pating teachers,
coordinators
and principals
No. of
students
benefi ted
Investment R$
Projects
Developed
EI - Reading
Meetings Project
Centro de Educação
e Documentação para
Ação Comunitária
(Education and Docu-
mentation Center for
Community Action)
10
226
1,201
14,236
972,661.05
EI - Trilhas
Project
Education and Docu-
mentation Center for
Community Action
310
4,378
15,245
309,684
2,297,120.16
Projects
supported
EF - Chapada
Project
Chapada Institute
24
600
5,339
92,973
483,626.07
EF - Training
Network
Avisa Lá Instituto and
Razão Social Institute
6
486
1,076
10,792
85,279.98
Cajamar
Municipal
Education Plan
Update
CENPEC ­ Centro de
Estudos e Pesquisas em
Educação, Cultura e Ação
Comunitária (Center for
Studies and Research in
Education, Culture and
Community Action)
FESPSP ­ Fundação
Escola de Sociologia e
Política de São Paulo
(School of Sociology and
Politics Foundation of São
Paulo)
-
-
-
-
37,784.87
Total
350
5,609
22,861
427,685
3,876,472.13
1.EI ­ Pre-School
2. EF ­ Primary School
Our business expansion has allowed us, for another year running, to increase the generation and distribution
of wealth to our main audiences.
DISTRIBUTION OF WEALTH
Our growing business has enabled us to generate wealth and distribute it to our main stakeholders again this year.
This is the result of Natura's growth and the expanding market in which we operate. Revenues to suppliers in
particular increased, thanks to the growth of output in 2010.
DISTRIBUTION OF WEALTH (R$ MILLIONS)
1
2008
2009
2010
Shareholders
2
425.9
551.9
646.9
Consultants
2,023.8
2,302.5
2,738.2
Employees 556.4
643.0
769.2
Suppliers
3
2,357.2
3,087.5
3,707.4
Government
3
1,276.7
1,147.4
1,476.5
1. More details of value-added statements may be found in the Accounting Statements (page 75, 78, 79 and 103).
2. The amount of wealth distributed to shareholders refers to dividends and interest on capital for the period.
3. Data have been revised from last year's report because we identifi ed an inconsistency in the classifi cation criteria used.
In relation to government, transfers were higher due to the growth of Natura's gross revenue in the period,
which is the calculation base for sales taxes, and there was also a larger taxable income base for income tax (IR)
and social contribution tax (CSLL).
INVESTMENT MATRIX
In 2010, we maintained our level of investment in corporate responsibility at 1.3% of net revenues. These in-
vestments include increased spending on the education and training of our consultants and employees, in line
with our educational strategy (learn more on page 26 in High-Priority Topics, Education). We also increased
our investments to support civil society organizations (learn more below). Total investments with respect
to the environment were lower because negotiations on carbon emissions-offsetting projects have yet to be
fi nalized. We concluded negotiations for fi ve environmental projects for the 2009/2010 season, and negotia-
tions for fi ve others are expected to be concluded in the fi rst quarter of 2011.
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96
MATRIX FOR INVESTMENT IN CORPORATE RESPONSIBILITY
1
(R$ THOUSANDS)
2008
2009
2010
Employees, family members, and others
18,729.3 17,251.3
20,159.9
Consultants
2,566.8 3,563.4
4,800.0
Consumers
270.9
480.3
600.0
Suppliers
212.8 243.8
329.8
Supplier communities
647.0 1,424.6
1,805.7
Surrounding communities
342.8
407.9
408.7
Society
2
8,827.4 15,772.0
23,387.0
Environment
5,467.2 8,073.6
6,638.7
TOTAL invested in stakeholders
37,064.2 47,217.0
58,130.2
Management expenses
7,148.3
4,045.7
4,972.0
TOTAL Natura funds
44,162.5
51,162.7
63,032.2
Percentage of net revenue
1.2%
1.2%
1.3%
Net amount raised by consultants for
the Crer para Ver (Believing Is Seeing) program
3,767.0 3,768.2
10,098.5
Tax-deductible investments under Roaunet Law
2,852.8
2,422.2
3,095.1
Audiovisual Law / ANCINE
400.0 920.0
1,100.0
State VAT tax (ICMS) in Minas Gerais
2,000.0 645.0
823.4
State VAT tax (ICMS) in São Paulo
3
622.1
0
0
1% Income Tax to CMDCA
4
0
0
319.0
1% Income Tax to Condeca
5
1,015.0 938.00
1,682.0
GRAND TOTAL
54,869.4 59,956.0
80,220.1
1. Amounts invested in support and sponsorship are included in this matrix, but are shown as they were divided among benefi ciaries. The matrix
includes investments in projects or actions that are not intrinsic to Natura's business and go beyond legal requirements.
2. The data on society were revised since we added one resource that was not previously considered.
3. Due to an error reported last year, the 2008 data was revised.
4. CMDCA = Municipal Council for Rights of Children and Adolescents. Since 2008, 1% of income tax (IR) has been allocated to the CMDCA.
5. Condeca = Council for Rights of Children and Adolescents.
SUPPORT AND SPONSORSHIPS
Our social investments not only express our well-being well concept, but also reiterate the underlying driv-
ers of our corporate behavior. In 2010, we allocated R$24.3 million to intiatives that fall under three broad
themes: strengthening civil society organizations, supporting sustainable development, and promoting Bra-
zilian culture with a focus on music.
Our business model entails the expansion of relationships with organizations that are committed to building
a sustainable society, which is why we invest in organizations that share our vision for the world and that
support causes that are signifi cant to our industry. For instance, we sponsored several programs of the Ethos
Institute for Business and Social Responsibility. These Ethos programs included the Sustainable Amazon
Forum, Sustainable Connections, Corporate Responsibility in the Media, and Promotion of Integrity and
Fighting Corruption.
In 2010, we participated once again in the Global Entrepreneurship Week, coordinated by the Endeavor
Institute, which is located in Brazil. As the largest global movement focused on entrepreneurship, the event
took place simultaneously in 102 countries for seven days of talks, competitions, workshops, games, fairs,
and awareness-building activities.
We continued to support the Global Reporting Initiative (GRI), which develops international guidelines
and standards for compiling sustainability reports. We sponsored GRI's Amsterdam Global Conference on
Sustainability and Transparency (May 26­28, 2010), at which our stakeholders met to discuss sustainability
and transparency-related issues.
We enjoy a partnership with Associação Brasileira de Comunicação Empresarial (Brazilian Association of
Corporate Communication ­ Aberje). This organization presented an event designed to help Brazilian com-
panies develop guiding principles for communicating with the news media and key opinion leaders. Natura
sponsored this event and presented its connection with biodiversity, focusing on its relationship with sup-
plier communities.
We also sealed a partnership with the United Nations Conference on Trade and Development (UNCTAD) to
disseminate good business practices related to social biodiversity. We supported the organization's schedule of
events for the International Year of Biodiversity, attending the Global Expo, in Shanghai, and the Global Business
of Biodiversity Symposium, in London, and also participating in the 10th Conference of the Parties (COP-10) to
the Convention on Biological Diversity (CBD), held in Nagoya, Japan.
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97
See below other highlights of 2010:
HUMAN RIGHTS
We support the Human Rights Fund, an institution that promotes the defense of human rights in Brazil, by creat-
ing sustainable grant mechanisms. Each year, the institution stages a selection process to give fi nancial support to
a regionally diverse range of projects, preferably benefi ting those with less access to traditional funding sources.
Natura supported four of these projects, in the Amazon region, with the intention of strengthening local move-
ments and offering social development opportunities.
CONSERVATION OF BRAZILIAN FLORA
The project "Plants of Brazil: An Historic Recovery and Virtual Herbarium for the Knowledge and Conservation
of Brazilian Flora", coordinated by the National Council of Scientifi c and Technological Development (CNPq),
retrieves images and information on samples of Brazilian fl ora that were collected up until the 20th century by
foreign missions and taken to museums and herbariums around the world. The repatriated digital fi les will form
the database of the Authenticated Virtual Herbarium of Species of Brazilian Flora (Refl ora).
HISTORICAL HERITAGE
We have donated funds for the reconstruction of the Artistic Culture Theater, which began in March 2010 and
should be complete by 2012. This historical theater, located in downtown São Paulo, was inaugurated in 1950
and was partially destroyed by a fi re in 2008. This investment by Natura is intended to help preserve Brazilian
culture, represented by this important building.
We continue to underwrite initiatives that increase societal awareness about sustainable development. One
such example is our support of the documentary Tudo mudo pode mudar o mundo (Everyone Can Change the
World). This fi lm, by Mara Mourão, presents stories of societal leaders and the Afro-Reggae cultural group.
See below some highlights of 2010:
SOCIAL ACTIONS
We continued to sponsor the AfroReggae group, from Rio de Janeiro. Among the projects supported by the
group is the television program Conexões Urbanas (Urban Connections), aired on the Multishow channel,
which addresses violence, citizenship and sustainability. The NGO also runs more than 70 social projects that
impact the lives of more than 10,000 residents in communities in the city.
We also kept up our support for the Pamáali Indian Municipal School ­ run by the Baniwa and Coripaco in-
digenous peoples and attended by native Brazilian groups from the region of Alto Rio Negro in São Gabriel da
Cachoeira, in the state of Amazonas. The school caters to some 3,000 people from the community. The funding
pays for research by the students, the publication of teaching and outreach material, network meetings, training
workshops for teachers and sustainability activities in the fi eld of food security.
DESIGN
The 3rd Brazilian Design Biennial was held from September 14 to October 31, at different venues in the Paraná
state capital of Curitiba, under the theme "Design, Innovation and Sustainability". During this exhibition, the city's
streets and parks were transformed into a stage for the event, interacting with residents and visitors.
FILMMAKING
"Everyone can change the world" is a Brazilian documentary that tells the story of social leaders around the
planet, showing the social impacts of their work, the obstacles they encounter and the gratifi cation they derive
from their work.
The Natura Musical (Musical Natura) program continues as our primary expression of support for Brazilian
culture. A national call for projects and another regional call in the state of Minas Gerais allowed us to choose
projects from different artistic areas, as well as those selected directly by the program. In 2010, we supported
17 projects. Since Natura Musical began in 2005, we have supported more than 140 such initiatives.
The components of the program include: support for music, sponsorship of national tours, the Natura Musi-
cal (Musical Natura) portal (www.naturamusical.com.br), an on-line radio, a radio show broadcast across the
country and the Natura Nós (Natura Us) Festival. The funding comes from incentive laws and contributions
by Natura.
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98
See more details about the projects:
FILMS AND DVDS
The fi lm "Music according to Tom Jobim" celebrates the work of the singer and songwriter, interpreted by vari-
ous Brazilian and foreign artists, as a project to document and preserve the memory of the songwriter.
We also supported the recording on DVD of the concert "Pra Nhá Terra", by the musical groups Ponto de
Partida and Meninos de Araçuari, and the feature length documentary "Iê Iê Iê", made from a four-part television
series with music by Arnaldo Antunes.
INTERNET
In the project "Mestres Navegantes" (Master Mariners), we recorded the work of regional musicians who pre-
serve the customs, folklore and cultural traditions in the Vale do Paraíba region of São Paulo. The project has
released CDs, photos, videos and personal pages on each musical act on the internet, in addition to organizing
free workshops on the musicians for young people in the historical town of São Luiz do Paraitinga, in São Paulo.
CONCERTS AND TOURS
Natura supported the recording and the tour of the singers Vanessa da Mata and Carlinhos Brown, and seven
free performances by the São Paulo State Symphony Orchestra Choir (OSESP) in the city of São Paulo.
To raise awareness about the topic of sustainability through art and culture, we organize the Natura Nós (Na-
tura Us) Festival. In 2010, it was held in October, in the city of São Paulo, and featured acts such as Air, Snow
Patrol, Jamiroquai and the Brazilians Vanessa da Matta, Céu, Karina Buhr, Cidadão Instigado, Móveis Coloniais de
Acaju and Marcelo Jeneci. The fi rst day of the festival was dedicated to children, with performances by Adriana
Partimpim, Pequeno Cidadão, Palavra Cantada and Pato Fu.
SUPPORT AND SPONSORSHIPS ­ INVESTMENTS BY TOPIC (R$ THOUSANDS)
1
2008
2009
2010
Sustainable development
2
3,382.0
2,174.0
2,052.4
Promoting Brazilian culture with a focus on music
3
6,077.0 7,833.0 15,442.5
Civil society and governmental organizations
2,247.1
2,725.6
6,809.9
Sustainable Development
Total funds invested by Natura
1702.4
1600
2832
Total funds from incentives
550
574
350
Federal Cultural Incentive Law (Rouanet Law)
450.00
474.00
250.00
Law on investment in production and co-production
of cinematographic and audiovisual projects, and in
infrastructure for production and exhibition
(Audiovisual Law/Ancine)
100.00
100.00
100.00
Promoting Culture
Total funds from Natura
1327.403
4844
10720.6
Total funds from incentives
4749.6158
2989
4721.9
Federal Cultural Incentive Law (Rouanet Law)
2227.542
1524
2898.5
State Cultural Incentive Law, Minas Gerais
1600
645
823.4
State Cultural Incentive Law, São Paulo
4
622.07
0.0
0.0
Law on investment in production and co-production
of cinematographic and audiovisual projects, and in
infrastructure for production and exhibition
(Audiovisual Law/Ancine)
300.00
820.00
1.000.00
Strengthening Civil Society Organizations
Total funds from Natura
1771.879
2102.066
6279.93
Total funds from incentives
475.2655
623.5
530
Federal Cultural Incentive Law (Rouanet Law)
475.27
623.50
530.00
1 Includes funds invested by Natura and funds from incentive legislation.
2 Funds related to sustainable development have been revised from previous reports, given that we included a sponsorship that was not
previously included in fi gures reported.
3 Data on promoting Brazilian culture has been revised from previous reports due to a reporting error.
4. The amount of funds resulting from the São Paulo State Cultural Incentive Law in 2008 was revised, since we identifi ed an error in the
reported fi gure.
background image
99
Consolidated net revenue in 2010 was R$5.136 billion, an increase of 21.1% over 2009. EBITDA (earnings
before interest, taxes, depreciation, and amortization) was R$1.256 billion with an EBITDA margin of 24.5% .
Net income was R$744.1 million. This performance refl ects the strength of our marketing strategy, the launch
of new products, and an 18% increase in the number of consultants -- who now total more than 1,221,000
in our operations in Brazil and overseas.
COSTS AND EXPENSES
We reduced the costs of goods sold (COGS) from 30.5% in 2009 to 30.3% in 2010. Infl ationary pressure
remained under control, the exchange rate was favorable during this period, and our strategy for increasing
prices proved to be effi cient, with less dispersion among the categories. These positive effects, however,
were partly offset by higher product losses in Brazil -- the result of additional inventories generated in the
fi nal quarter of 2009. For 2011, the loss-prevention process is being strengthened, and we expect a signifi cant
improvement in this indicator.
We also recorded a reduction in sales expenses, accounting for 33.2% of net revenues in 2010 (35.3% in
2009). We made greater investments in marketing, which provides vigorous support for product launches, as
well as training and events for the sales force. This increase was mitigated by greater logistical effi ciency and
the dilution of sales force costs. The highlight was the percentage of orders placed over the Internet in Brazil,
which stood at 86% in 2010 (71.2% in 2009).
Administration and general expenses accounted for 11.8% in 2010 (10.6% in 2009). The increase in the year-
over-year comparison, which was in line with our forecasts, is due to higher expenditures for research and
development (rising from 2.5% of net revenues in 2009 to 2.8% in 2010); higher investments in projects that
enable the company to grow, primarily in the areas of information technology, logistics, and leadership devel-
opment; a higher head count to support the advance of the model of Management by Process, Business Units,
and Regional Units; and the cost of maintaining investments made in information technology.
EBITDA AND NET INCOME
In 2010 our consolidated net income stood at R$744.1 million, which represents growth of 8.8% compared
with the previous year. In 2009, we recorded a lower effective IR/CSLL rate as a result of having accelerated the
fi scal amortization of goodwill in the period. This fi scal benefi t ended last year. This year, the effective tax rate
was 33.5%.
Consolidated EBITDA stood at R$1.256 billion in 2010, up 24.6% over 2009. The margin rose from 23.8% to
24.5% in 2010 (graph 2).
2008
2008
2009
2009
2010
2010
1. CONSOLIDATED
NET REVENUE
(R$ MILLIONS)
3,576.2
4,242.1
5,136.7
2. CONSOLIDATED
EBITDA (R$ MILLIONS)
860.1
1,008.5
1,256.8
5.4
CREATION OF
ECONOMIC VALUE
NATURA'S STRONG PERFORMANCE,
CO U P L E D W I T H T H E G ROW TH
OF
THE COSMETIC, TOILETRY, AND
FR AGR ANCE MARKET R ESULTED
IN POSITIVE ECONOMIC AND
F I N A N C I A L I N D I C A T O R S
.
background image
100
SUMMARY OF CASH FLOW
Free cash generation for the year was R$716.3 million versus R$418.6 million in 2009. This 71.1% increase
resulted from more effi cient working capital management by extending payment terms for suppliers; reducing
inventory coverage; reducing the balance of recoverable taxes; and making the change from annual to quarterly
income tax assessments and payments. We are refi ning cash fl ow management processes, which should result
in even more effi ciency in 2011.
Internal cash generation was R$832.9 million for the year. This growth of 7.3% over the previous year is in line
with the growth of 8.8% recorded in net income for the period.
SUMMARY OF CONSOLIDATED CASH FLOWS (R$ MILLIONS)
2009
2010
Var.
%
Net income for fi nancial year
683.9
744.1
8.8
(+) Depreciation and amortization
92.4
88.8
(3.9)
Internal cash generation
776.3
832.9
7.3
(Increase)/decrease in Working Capital (189.9)
99,6
(152.4)
Non-cash items (exchange variation) (27.5)
20.7
(175.3)
Operational cash generation
558.9
953.2
70.5
Additions of intangible assets (140.4)
(236.9)
68.7
Free cash generation¹
418.6
716.3
71.1
1 (Internal cash generation) +/- (changes in working capital and long-term liabilities) ­ (acquisitions of property, plant and equipment).
Investments in property, plant, and equipment in 2010 totaled R$236.9 million and were concentrated in informa-
tion technology, manufacturing capacity, and logistics infrastructure. Investments in property, plant and equipment in
2011 are estimated at R$300 million and will concentrate on the ongoing development of our information tech-
nology platform, including a sound base for the international area, in addition to continuing our project to improve
logistics and increase our industrial capacity.
PRO FORMA RESULTS PER OPERATION BLOCK
The profi t margin achieved on exports from Brazil to international operations was deducted from the COGS of
the respective operations, revealing the real impact of these subsidiaries on the company's consolidated results.
Accordingly, the Pro Forma Statement of Results for Brazil shows only sales in the domestic market.
The performance of our operation in Brazil remained strong, with growth of 20.6% in net revenues, reaching
R$4.764 billion. The EBITDA in Brazil was R$1.335 billion compared to R$1.085 billion in 2009, representing
growth of 23%. Margins were 28% in 2010 and 27.5% in 2009.
PRO FORMA FINANCIAL HIGHLIGHTS, BRAZIL (R$ MILLION)
2009
2010
Var
%
Total number of consultants -
end of period (thousands)
875.2
1,028.7
17.5
Product units for resale (millions)
348.1
378.7
8.8
Gross revenue
5,418.5
6,489.6
19.8
Net revenue
3,949.5
4,764.6
20.6
Gross profi t
2,761.4
3,356.4
21.5
Gross margin (%)
69.9
70.4
0.5pp
Selling expenses
(1,300.5)
(1,487.4)
14.4
General and administrative expenses
(376.5)
(516.2)
37.1
Employee profi t sharing
(55.8)
(70.4)
26.1
Management compensation
(14.1)
(14.4)
2.5
Other operating income / (expenses), net
(15.8)
(15.7)
(1.0)
Financial income / (expenses), net
(40.9)
(47.9)
17.1
Earnings before taxes
957.8
1,204.4
25.7
Net income
778.6
836.0
7.4
EBITDA 1,085.9
1,335.2
23.0
EBITDA Margin (%)
27.5
28
0.5pp
1. Number of consultants by the end of the 18
th
cycle of sales.
The year 2010 was positive for our international operations and marked a new phase in business expansion.
International operations represented 7.2% of Natura's consolidated net revenues last year. Net revenues from
these operations grew by 37.3% in local currency (27.2% in Brazilian reais). The sales channel expanded by 20.8%,
enabling us to achieve the fi gure of 192,000 consultants in the region.
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101
PRO FORMA EBITDA PER OPERATION BLOCK (R$ MILLIONS)
2009
2010
Var
%
Brazil 1,085.9
1,335.2
23.0
Argentina, Chile and Peru
8.9
13.1
47.8
Mexico and Colombia
(42.3)
(32.5)
(23.2)
Other investments
(44.1)
(59.1)
34.1
Total 1,008.5
1,256.8
24.6
The operations under consolidation (Argentina, Chile, and Peru) showed growth of 27.4% in local currency
(17% in Brazilian reais) in net revenue. The result was infl uenced by several negative factors, such as the earth-
quake in Chile in February of 2010, which partially destroyed our facilities and interrupted billings for 22 days.
The pro forma EBITDA of this group of operations showed positive consolidation at R$13.1 million for the
year, a growth of 47.8% over 2009. This refl ected a dilution in sales and administrative expenses in spite of
the increasing investment in our brand in these countries.
Operations under implementation (Mexico and Colombia) showed high growth rates of 69.2% in local cur-
rency (64.5% in Brazilian reais), disregarding the revenue from the operation in Venezuela, which was closed
in 2009. Pro forma EBITDA showed a loss of R$32.5 million (versus R$42.3 million in 2009), refl ecting recent
and continuing investments to expand these operations.
PRO FORMA FINANCIAL HIGHLIGHTS - OPERATIONS UNDER CONSOLIDATION
(ARGENTINA, CHILE, PERU) - (R$ MILLIONS)
2009
2010
Var
%
Total consultants - end of period
1
(thousands) 113.6
129.6
14.1
Product units for resale (millions)
22.5
28.4
26.2
Gross revenue
285.4
335.9
17.7
Net revenue
218.5
255.7
17.0
Gross profi t
138.1
157.3
13.9
Gross margin (%)
63.2%
61.5
-1.7pp
Selling expenses
(109.3)
(124.4)
13.8
General and administrative expenses
(23.4)
(21.5)
(8.1)
Other operating income / (expenses), net
1.4
(1.7)
na
Financial income / (expenses), net
0.3
(0.8)
na
Earnings before taxes
7.1
8.9
25.6
Net income / (loss)
(1.1)
3.7
na
EBITDA 8.9
13.1
47.8
Ebitda margin (%)
4.1
5.1
1.1pp
PRO FORMA FINANCIAL HIGHLIGHTS - OPERATIONS UNDER
IMPLEMENTATION (MEXICO AND COLOMBIA)
1
(R$ MILLIONS)
2009
2010
Var
%
Total consultants - end of period
1
(thousands) 44.2
60.2
36.3
Product units for resale (millions)
7.1
13.1
83.6
Gross revenue
76.3
114.0
49.4
Net revenue
66.5
98.3
47.8
Gross profi t
41.8
56.3
34.8
Gross margin (%)
62.8
57.3
-5.5pp
Selling expenses
(69.7)
(76.0)
9.0
General and administrative expenses
(16.1)
(14.8)
(7.9)
Other operating revenues / (expenses), net
(0.2)
(0.1)
(54.3)
Financial income / (expenses), net
(1.3)
(1.0)
na
Earnings before taxes
(45.5)
(35.6)
(21.8)
Net income / (loss)
(48.0)
(36.0)
(25.0)
Ebtida
(42.3)
(32.5)
(23.2)
Ebitda margin (%)
(63.6)
(33.1)
30.5pp
1. Number of consultants by the end of the 18
th
cycle of sales.
background image
102
6.

ATTACHMENTS
ATTACHMENTS
Financial Statements
DNV Statement
About This Report
Global Compact Principles
GRI Index
NATURA COSMÉTICOS S.A.
Financial statements related to fi scal year ended at December 31, 2010
and auditors' report.
In accordance with the legal and statutory rules we submit, to the
appreciation of your honour, the balance sheet and the fi nancial
statements related to the fi scal year ended at December 31, 2010.
Together with the information included in the footnotes here in, the
Company's Management is entirely available to the shareholders to any
other clarifi cation.
FINANCIAL
STATEMENTS
background image
103
Balance Sheets
As of december 31, 2010
(In thousands of Brazilian reais - R$)
Company
(BRGAAP)
Consolidated (BRGAAP e IFRS)
ASSETS
Note
2010
2009
2010
2009
CURRENT ASSETS
Cash and cash equivalents
5
206,125
254,463
560,229
500,294
Trade accounts receivable
6
493,692
414,645
570,280
452,868
Inventories 7
185,092
94,338
571,525
509,551
Recoverable taxes
8
34,799
93,760
101,464
191,195
Related parties
28.1.
25,361
26,757
-
-
Other receivables
52.470
27,620
66,399
62,454
Total current assets
997,539
911,583
1,869,897
1,716,362
NONCURRENT ASSETS
Long-term assets:
Recoverable taxes
8
4,921
33,697
109,264
63,931
Deferred income tax and social contribution
9.a)
87,491
82,952
180,259
146,146
Escrow deposits
10
289,070
187,656
337,007
232,354
Other noncurrent assets
11
20,052
90
44,904
7,429
Investments
12
1,099,188
1,000,600
-
-
Property, plant and equipment
13
92,175
50,375
560,467
492,256
Intangible assets
13
18,586
11,527
120,073
82,740
Total noncurrent assets
1,611,483
1,366,897
1,351,974
1,024,856
TOTAL ASSETS
2,609,022
2,278,480
3,221,871
2,741,218
Company
(BRGAAP)
Consolidated (BRGAAP e IFRS)
LIABILITIES AND SHAREHOLDERS' EQUITY
Note
2010
2009
2010
2009
CURRENT LIABILITIES
Borrowings and fi nancing
15
60,086
469,590
226,595
569,366
Trade and other payables
16
113,232
84,471
366,494
255,282
Suppliers - related parties
28.1
246,589
211,591
-
-
Payroll, profi t sharing and related taxes
63,769
56,750
162,747
130,792
Taxes payable
17
205,361
85,161
371,815
239,574
Provision for tax, civil and labor risks
18
-
1,465
-
1,465
Derivatives
4.2
3,340 6,869 4,061 8,652
Other payables
54,471
26,339
64,747
30,219
Total current liabilities
746,848
942,236
1,196,459
1,235,350
NONCURRENT LIABILITIES
Borrowings and fi nancing
15
368,356
25,707
465,068
134,992
Taxes payable
17
169,912
113,383
209,316
150,280
Provision for tax, civil and labor risks
18
53,282
54,384
73,784
71,432
Allowance for investment losses
12
-
565
-
-
Provision for healthcare plan
24.2.
13,123
2,384
19,742
9,342
Total noncurrent liabilities
604,673
196,423
767,910
366,046
SHAREHOLDERS' EQUITY
Capital
19.a)
418,061
404,261
418,061
404,261
Capital reserves
149,627
142,993
149,627
142,993
Earnings reserves
282,944
253,693
282,944
253,693
Treasury shares
19.c)
(14)
(14)
(14)
(14)
Proposed additional dividend
19.b)
430,079
357,611
430,079
357,611
Other comprehensive losses
(23,196)
(18,723)
(23,196)
(18,723)
Total equity attributable to owners of the Company
1,257,501
1,139,821
1,257,501
1,139,821
Noncontrolling interests
-
-
1
1
Total shareholders' equity
1,257,501
1,139,821
1,257,502
1,139,822
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
2,609,022
2,278,480
3,221,871
2,741,218
The accompanying notes are an integral part of these fi nancial statements.
background image
104
Company (BRGAAP) Consolidated (BRGAAP e IFRS)
Note
2010
2009
2010
2009
NET REVENUE
21
5,514,315
4,593,165
5,136,712
4,242,057
Cost of sales
(2,283,926)
(1,956,558)
(1,556,806)
(1,294,565)
GROSS PROFIT
3,230,389
2,636,607
3,579,906
2,947,492
OPERATING (EXPENSES) INCOME
Selling
22
(1,292,365)
(1,062,579)
(1,704,322)
(1,496,125)
Administrative and general
22
(837,808)
(698,241)
(605,442)
(450,868)
Employee profi t sharing
22
(18,174)
(21,049)
(70,351)
(55,784)
Management compensation
28
(14,417)
(13,139)
(14,417)
(14,063)
Equity in subsidiaries
12
25,764
(2,830)
-
-
Other operating (expenses) income, net
26
456
961
(17,468)
(14,624)
INCOME FROM OPERATIONS BEFORE
-
-
-
-
FINANCIAL (EXPENSES) INCOME
1,093,845
839,730
1,167,905
916,028
Financial income
25
17,515
56,794
53,639
84,176
Financial expenses
25
(58,237)
(83,805)
(103,375)
(126,050)
INCOME BEFORE INCOME TAX AND
SOCIAL CONTRIBUTION
1,053,123
812,719
1,118,169
874,154
Income tax and social contribution
9.b)
(309,073)
(128,795)
(374,120)
(190,230)
NET INCOME
744,050
683,924
744,050
683,924
ATTRIBUTABLE TO:
Owners of the Company
744,050
683,924
744,050
683,924
Noncontrolling interests
-
-
-
-
EARNINGS PER SHARE - R$
Basic
27.1.
1,7281
1,5926
1,7281
1,5926
Diluted
27.2.
1,7219
1,5880
1,7219
1,5880
The accompanying notes are an integral part of these consolidated fi nancial statements.
Statement of Income
For the year ended December 31, 2010
(In thousands of Brazilian reais - R$, except earnings per share)
Company
(BRGAAP)
Consolidated (BRGAAP e IFRS)
Note
2010
2009
2010
2009
NET
INCOME
744,050 683,924 744,050 683,924
Other comprehensive losses-
Losses from translation of fi nancial
statements of foreign subsidiaries
12
(4,473)
(23,884)
(4,473)
(23,884)
TOTAL COMPREHENSIVE INCOME
739,577
660,040
739,577
660,040
ATTRIBUTABLE TO
Owners of the Company
739,577
660,040
739,577
660,040
Noncontrolling interests
-
-
-
-
The accompanying notes are an integral part of these consolidated fi nancial statements.
Statement of Comprehensive Income
For the year ended December 31, 2010
(In thousands of Brazilian reais - R$)
background image
105
Statement of Changes in Shar
eholders' Equity
F
or the y
ear ended December 31,
2010
(In thousands of Br
azilian reais - R$,
except f
or dividends per share)
Ca
pital r
eser
v
e








T
ax
incentiv
e
r
eser
v
e
Ad
ditional

Shar
e
In
v
estment
paid-in
Note








Ca
pital




pr
emium
grants
ca
pital
391,423
101,853
17,378
19,423
-
-
-
-
12





-




-
-





-
-
-
-
-
19.b -
-
-
-
-
-
-
-
-
-
-
-
19.a 12,838
-
-
-
23.2 -
-
-
4,339
23.2 -
1,767
-
(1,767)
-
-
-
-
19.b -
-
-
-
19.b -
-
-
-
19.b -
-
-
-
19.b -
-
-
-
19.f -
-
-
-
404,261
103,620
17,378
21,995
-
-

-
-
1
2
-

-

-

-
-
-
-
-
-
-
-
-
19.a 13,800
-
-
-
23.2 -
-
-
11,288
23.2 -
-
-
(4,654)
-
-
-
-
19.b -
-
-
-
19.b -
-
-
-
19.b -
-
-
-
19.f
-
-
-

-
418,061
103,620
17,378
28,629
B
ALANCES
AS OF DECEMBER 31,
2008
Net income
Other
comprehensiv
e
income
T
otal comprehensiv
e income
2008 dividends and interest on capital
appro
v
ed at the
Ann
ual Shareholder
s'
Meeting of March 23,
2009
Absor
ption of accum
ulated losses with profi

t
retention
reser
v
e
Sale of treasur
y shares due to ex
ercise
of stock options
Capital increase through subscr
iption of shares
Changes in stock option plans:
Gr
ant of stock options
Ex
ercise of stock options
Allocation of net income:
Recognition of tax incentiv
e reser
v
e
Inter
im dividends - R$0,50 per outstanding share
Proposed interest on capital -
R$0,06 per outstanding share
Proposed dividends on Febr
uar
y 24,
2010
Proposed interest on capital on Febr
uar
y 24,
2010
Retained ear
nings reser
v
e
B
ALANCES
AS OF DECEMBER 31,
2009
Net income
Other comprehensiv
e income
T
otal comprehensiv
e income
2009 dividends and interest on capital
appro
v
ed at the
Ann
ual Shareholder
s'
Meeting of
Apr
il 6,
2010
Capital increase through subscr
iption of shares
Changes in stock option plans:
Gr
ant of stock options
Ex
ercise of stock options
Allocation of net income:
Recognition of tax incentiv
e reser
v
e
Inter
im dividends and interest on capital
Proposed dividends on Febr
uar
y 23,
2011
Proposed interest on capital on Febr
uar
y 23,
2011
Retained ear
nings reser
v
e
B
ALANCES
AS OF DECEMBER 31,
2010
Equity
Pr
ofi

t r
eser
v
e





Pr
oposed
Other
attributable to
T
otal
T
ax
Retained
T
r
easur
y
ad
ditional
Accum
ulated
compr
ehensiv
e
o
wners of the
Noncontr
olling shar
eholders'
Legal


incentiv
es
earnings
shar
es
dividend
losses
income (losses)
Compan
y
inter
est





equity
18,650

1,816

155,018
(369)
311,680
(7,924)
5,161
1,014,109
1
1,014,110
-
-
-
-
-
683,924
-
683,924
-
683,924
-




-
-

-

-
-




(23,884)
(23,884)
-

(23,884)
-
-
-
-
-
683,924
(23,884)
660,040
-
660,040
- - - -
(311,680) - -
(311,680) -
(311,680)
- -
(7,924) -
-
7,924 -
- -
-
- - -
355
- - -
355 -
355
- - - -
- - -
12,838 -
12,838
- - - -
- - -
4,339 -
4,339
- - - -
- - -
- -
-
-
3,145 - -
-
(3,145) -
- -
-
- - - -
-
(215,152) -
(215,152) -
(215,152)
- - - -
-
(25,028) -
(25,028) -
(25,028)
- - - -
339,385
(339,385) -
- -
-
- - - -
18,226
(18,226) -
- -
-
- -
82,988 -
-
(82,988) -
- -
-
18,650
4,961


230,082


(14)


357,611
-
(18,723)
1,139,821

1

1,139,822
- - - -
-
744,050 -

744,050 -
744,050
-

-

-
-

-
-
(4,473)

(4,473)

-

(4,473)
- - - -
-
744,050
(4,473)
739,577

-

739,577
- - - -
(357,611) - -
(357,611) -
(357,611)
- - - -
- - -
13,800 -
13,800
- - - -
- - -
11,288 -
11,288
- -
4,654 -
- - -
- -
-
-
5,973 - -
-
(5,973) -
- -
-
- - - -
-
(289,374) -
(289,374) -
(289,374)
- - - -
405,623
(405,623) -
- -
-
- - - -
24,456
(24,456) -
- -
-
-

-
18,624


-


-



(18,624)
-
-
-

-
18,650
10,934
253,360
(14)
430,079
-
(23,196)
1,257,501
1
1,257,502
The accompan
ying notes are an integr
al par
t of these consolidated fi

nancial statements.
background image
106
continue...
Statement of Cash Flows
For the year ended December 31, 2010
(In thousands of Brazilian reais - R$)
Company
(BRGAAP)
Consolidated (BRGAAP e IFRS)
Note
2010
2009
2010
2009
CASH FLOW FROM OPERATING ACTIVITIES
Net
income
744,050 683,924 744,050 683,924
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization
13
15,305
11,918
88,848
92,426
Provision for losses on swap and forward contracts
5,477
(4,539)
8,787
(4,004)
Provision for tax, civil and labor contingencies
18
106
12,188
3,545
9,090
Interest and infl ation adjustment of escrow deposits
(15,318)
(10,266)
(18,129)
(13,240)
Income tax and social contribution
9.a
309,073
128,795
374,120
190,230
(Gain) Loss on sale on property, plant and equipment
and intangible assets
26
(468)
(702)
32,620
19,834
Equity in subsidiaries
(25,764)
2,830
-
-
Interest and exchange rate change on borrowings
and fi nancing and other liabilities
25
(4,668)
33,662
(5,137)
10,825
Stock options plans expenses
4,081
4,339
11,288
8,573
Provision for discount on sale of ICMS credits
-
-
465
2,414
Allowance for doubtful accounts
6
9,005
8,211
9,149
10,051
Allowance for inventory losses
7
3,981
3,635
30,132
9,650
Provision for healthcare plan
24.2
10,739
2,384
10,400
9,342
1,055,598
876,379
1,290,137
1,029,115
(INCREASE) DECREASE IN ASSETS
Current:
Trade accounts receivable
(88,052)
5,565
(126,561)
7,482
Inventories
(77,360)
(56,996)
(92,106)
(185,569)
Recoverable taxes
58,961
(60,485)
89,731
(83,912)
Other receivables
(23,433)
4,081
(3,945)
8,734
Noncurrent:
Recoverable taxes
38,703
(13,509)
(44,597)
(30,441)
Other receivables
(19,962)
(45)
(37,475)
(108)
Subtotal
(111,143)
(121,389)
(214,953)
(283,814)
INCREASE (DECREASE) IN LIABILITIES
Current:
Domestic and foreign suppliers
28,761
(29,302)
111,212
45,499
Payroll, profi t sharing and related taxes, net
7,019
1,688
31,955
86
Taxes payable
18,197