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1
São Paulo, April 25, 2012
­ Natura Cosméticos S.A. (BM&FBOVESPA: NATU3) announces
today its results for the first quarter of 2012. Except where stated otherwise, the financial and
operating information in this release is presented on a consolidated basis, in accordance with
International Financial Reporting Standards (IFRS).
In
this
first
quarter
of
2012,
Natura's
consolidated
net
revenue
was
R$1,275.8 million, increasing 11.3% compared to the same period of 2011. EBITDA
was R$272.1 million, increasing 3.0% compared to 1Q11, with EBITDA margin of
21.3%. Net income was R$151.5 million, with net margin of 11.9%.
In the Brazilian operations, net revenue in 1Q12 was R$1,140.2 million, growing by 8.3% on
the year-ago period. EBITDA margin was 25.0%, compared to 27.3% in 1Q11. Excluding the
non-recurring effects, EBITDA margin was 25.1% in 1Q12 and 25.9% in 1Q11.
In the international operations, net revenue in 1Q12 was R$135.6 million, representing growth
of 39.2% in weighted local currency. EBITDA
1
in the quarter was a loss of R$12.7 million,
compared to the EBITDA loss of R$23.5 million in 1Q11.
Highlights in the first quarter:
In Brazil, during 1Q12 we gradually recovered the level of service quality and increased
efficiency in the commercial and marketing areas, which had been compromised in the
second half of 2011 by the simultaneous implementation of structural projects that led to
instability in our operations. At this point, the operational imbalances that occurred in
2011 have been resolved.
Also in Brazil, the net revenue growth of 8.3% was higher than the growth rates
achieved in the second half of 2011, of 5.5% in 3Q11 and 4.4% in 4Q11.
The total consultant base reached 1,435,000, expanding by 16.6% from the same period
of 2011. In Brazil, we ended the quarter with 1,179,000 consultants, up 14.1%. In the
international operations, we ended the period with 256,000 consultants, up 29.8%.
1
Based on pro forma EBITDA.
INTRODUCTION
INTRODUCTION
INTRODUCTION
INTRODUCTION
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2
The innovation index stood at 67.0% in the quarter (62.6% in 1Q11), in line with the
level in recent years. Investments in research and development in the quarter
corresponded to 3.0% of net revenue (2.8% in 1Q11).
The international operations made an important contribution and already account for
10.6% of consolidated net revenue (8.1% in 1Q11). The operations in consolidation
(Argentina, Chile and Peru) recorded net revenue growth in weighted local currency of
35.8% in the first quarter of 2012. EBITDA was R$8.2 million, with EBITDA margin of
9.5% (R$1.3 million in 2011 with margin of 2.2%). In the operations in implementation
(Mexico and Colombia), net revenue in weighted local currency grew by 46.2% in the
quarter.
Also in the international operations, we continued to consolidate the Super Consultant
(CNO) model in Chile, Colombia and Peru, and of the Sustainable Relations Network in
Mexico. We also continued to advance the implementation of local production in
Argentina, Colombia and Mexico.
Cosmetics, Fragrance and Toiletries Industry
According to data from Sipatesp/Abihpec
2
, our target market in Brazil grew by 8.2% in 2011.
Natura's market share in the period was 23.5%, decreasing by 60 basis points from 2010. The
following table presents the growth in the Cosmetics, Fragrance and Toiletries (CFT) industry
and the variation in Natura's market share.
2011
11 x 10 10 x 09
2011
2010
2009
11 x 10
10 x 09
Cosmetics and Fragrances
10,444
7.6%
16.8%
34.0%
34.9%
33.7%
(0.9)
1.2
Toiletries
10,655
8.8%
9.7%
13.2%
13.3%
12.9%
(0.1)
0.5
Total
21,098
8.2% 13.1%
23.5%
24.1%
22.9%
(0.6)
1.2
Source: SIPATESP
Change %
Market Share Natura
Change pp
Market Size
R$ MM
2
Sipatesp/Abihpec: São Paulo State Perfumery and Toiletry Association / Brazilian Cosmetic, Fragrance and Toiletry Industry
Association.
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According to recently released data for 2011 from Euromonitor, Natura maintained, for the
seventh straight year, its leadership in Brazil's CFT industry. Meanwhile, in the other Latin
American Operations we expanded our market share by 50 basis points to 2.2%.
2011
11 x 10 10 x 09
2011
2010
2009
11 x 10
10 x 09
Brazilian Operations
43,029
8.8%
14.0%
14.5%
14.8%
14.3%
(0.3)
0.6
Consolidation Operations
8,871
16.2%
14.2%
4.0%
3.4%
3.0%
0.6
0.4
Implementation Operations
13,821
6.8%
6.9%
1.0%
0.7%
0.4%
0.3
0.3
Total
65,720
9.3% 12.4%
10.3%
10.3%
9.7%
(0.1)
0.6
Source: Euromonitor
Obs.
i. Euromonitor believes the total market for cosmetics, perfumes and toiletries at retail prices
ii. Values

in constant dollars, 2011
iii. Market value and market share for 2009 and 2010 w ere review ed by the consulting
iv. Consolidation Operations: Argentina, Chile and Peru
v. Implementation Operations: Mexico and Colombia
Market Share Natura
Change pp
Market Size
US$ MM
Change %
Outlook
With its position consolidated as the third-largest Cosmetics, Fragrance and Toiletries market in
the world, Brazil continues to present conditions that should enable the country's CFT industry
to outpace growth in the global CFT industry. The investments we have already made in recent
years and which we plan to intensify in 2012 represent a significant effort to prepare Natura for
capturing the opportunities that will emerge in this decade in Brazil as well as in our
International Operations.
With the operational difficulties that occurred in 2011 resolved, the investments made in the
logistics, manufacturing and IT infrastructure have taken us to a new level that will enable us to
ensure excellence in the service provided to consultants and final consumers and to further
expand the competitive advantages of our brand.
These efforts will allow our 1.2 million consultants in Brazil to strengthen the relationships they
enjoy with almost 100 million consumers. In this way, we plan to continue enhacing our
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4
strategy, which will now prioritize productivity in the sales channel, while increasing the
frequency with which consumers make purchases and expanding the variety of products they
acquire. Meanwhile, our consultants will also benefit from the continued enhancements being
made to our sales model and marketing mix, with a better balance between the portion
generated at the national and regional levels. These advances should generate gains gradually
over the course of the year.
At the same time that we are promoting development on multiple fronts, we are also moving
towards a new outlook for the business. We are particularly motivated by the future of direct
sales. We have always believed in the entrepreneurial and transformational capacity of people
working towards a common goal. In a world ever more connected digitally, in which the
personalized treatment of each consumer gains greater relevance, direct sales have an
excellent opportunity to continue expanding. We see a future in which the relationship between
consultant and consumer will be supported by high technology and social networks, which is an
area in which services can evolve dramatically while leveraging the creation of value for all
involved.
Social and environmental performance
On April 13, we published the Natura Annual Report 2011 on the same day as our Annual and
Extraordinary Shareholders Meeting. The product of a learning experience spanning over a
decade, this year's report introduced a series of innovations:
Print version for Opinion Makers: we adopted a journalistic style and a tabloid format
that led to a reduction of around 55% in CO
2
emissions compared to the 2010 edition.
For the first time, we published the Natura Institute Report as a supplement, with the
report attributing greater transparency to the institute's activities aimed at improving the
quality of education in Brazil.
The complete version, which is available only in electronic format, is aligned with the
initial initiatives of the International Integrated Reporting Council (IIRC), which is a pilot
program in which Natura participates that seeks to establish, by 2013, a framework for
the production of an Integrated Report.
Each year we undertake commitments and set targets for the evolution of our social and
environmental performance. The following table shows the results for 1Q12 of selected
indicators and the respective targets for the whole of 2012:
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5
Indicator
2011 Results
2012 Commitment
2012 Results
Greenhouse
gases*
-5.3%
(25.4% cumulative)
Reduce GHG emissions 33% by 2013, based
on the inventory we conduced in 2006.
N/A
Not Avaliable
Water
consumption
0.40 liter/unit
produced
(4.8% reduction)
Mantain 0.40 liter/unit produced in Brazil
0.40 liter/unit produced
Collections CPV
R$ 8.4 million
Raise R$ 10.3 million from produt sales under
the Believing is Seeing (CPV) program in Brazil
R$ 2.8 million
* Indicator: calculated quarterly
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(R$ million)
1Q12
1Q11
Change %
Total Consultants - end of period*
(in thousands)
1,434.8
1,230.2
16.6
Units sold ­ items for resale
(in million)
114.0
100.1
13.9
Gross Revenues
1,712.1
1,556.0
10.0
Net Revenues
1,275.8
1,145.8
11.3
Gross Profit
910.5
802.6
13.4
Sales Expenses
(488.3)
(422.9)
15.5
General and Administrative Expenses
(177.5)
(151.0)
17.6
Management compensation
(4.0)
(3.2)
23.5
Other Operating Income / (Expenses), net
(2.1)
13.8
n/a
Financial Income / (Expenses), net
(15.2)
(10.2)
49.2
Earnings Before Taxes
223.4
229.1
(2.5)
Net Income (Losses)
151.5
150.5
0.7
EBITDA**
272.1
264.1
3.0
Gross Margin
71.4%
70.0%
1.3pp
Sales Expenses/Net Revenues
38.3%
36.9%
1.4pp
General and Admin. Expenses/Net Revenues
13.9%
13.2%
0.7pp
Net Margin
11.9%
13.1%
(1.3pp)
EBITDA Margin
21.3%
23.0%
(1.7pp)
(**) EBITDA = Income from operations before financial effects + depreciation & amortization.
(*) Positon at the end of the 4th sales cycle
Consolidated net revenue was R$1,275.8 million in 1Q12, increasing 11.3% compared to
1Q11. In Brazil, net revenue was R$1,140.2 million in 1Q12, increasing 8.3% on the year-ago
period. In the international operations, net revenue in 1Q12 was R$135.6 million, for growth on
the year-ago period of 45.2% in Brazilian real and 39.2% in weighted local currency.
1. consolidated results
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7
Cost of goods sold (COGS) in 1Q12 corresponded to 28.6% of consolidated net revenue,
decreasing 130 basis points from 1Q11, driven by benefits from the better management of
costs and promotions in the period, as well as the favorable impacts from currency variation on
the costs incurred in our International Operations.
The following table presents the main components of COGS:
1Q12
1Q11
RM/PM*
79.3
82.9
Labor
11.5
10.7
Depreciation
2.9
2.7
Others
6.3
3.6
Total
100.0
100.0
(*) Raw material and packaging material
Selling expenses corresponded to 38.3% of net revenue in 1Q12, increasing 140 basis points
in relation to 1Q11, mainly driven by the higher marketing investments in the international
operations. In Brazil, we continue to advance the strategy of optimizing our market
investments and increasing efficiency in our logistics processes.
General and administrative expenses corresponded to 13.9% of net revenue in 1Q12
(13.2% in 1Q11). We maintained our investments in product and sales innovation and
observed an increase in depreciation costs due to the new level of investment in our
information technology, in line with our planning.
Other operating revenue and expenses was an expense of R$2.1 million in the quarter,
compared to revenue of R$13.8 million in 1Q11, which reflects the non-recurring impact from
the recognition of contingent PIS and Cofins tax assets.
Consolidated net income was R$151.5 million in 1Q12, which represents net margin of
11.9% and growth of 0.7% in relation to 1Q11.
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Consolidated EBITDA in 1Q12 was R$272.1 million, growing by 3.0% from R$264.1 million in
1Q11. EBITDA margin decreased from 23.0% in 1Q11 to 21.3% in 1Q12. Excluding other
operating expenses and revenue in both quarters, EBITDA margin was 21.8% in 1Q11 and
21.5% in 1Q12.
(R$ million)
1Q12
1Q11
Change %
Net Revenues
1,275.8
1,145.8
11.3
(-) Cost of Sales and Expenses
1,037.2
906.6
14.4
EBIT
238.6
239.3
(0.3)
(+) Depreciation/Amortization
33.5
24.8
34.9
EBITDA
272.1
264.1
3.0
> EBITDA (R$ million)
(R$ million)
1Q12
1Q11
Change %
Brazil
284.8
287.6
(1.0)
Argentina, Chile and Peru
8.2
1.3
529.5
Mexico and Colombia
(4.0)
(6.7)
(40.1)
Others Investments
(16.8)
(18.0)
(6.7)
Total
272.1
264.1
3.0
> EBITDA pro-forma by areas of operation (R$ million)
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(R$ million)
03M12
03M11
Var %
Net income
151.5
150.5
0.7
(+) Depreciation and amortization
33.5
24.8
34.9
Internal cash generation
185.0
175.3
5.5
Cashflow (Increase) / Decrease
(29.6)
(68.3)
na
(+) Non-cash
5.1
(16.2)
(131.5)
Operating cash generation
160.5
90.8
76.7
Capex
(33.1)
(22.9)
44.7
Free cash flow*
127.4
68.0
87.4
(*) (Internal cash generation) +/- (changes in working capital and long-term assets and liabilities) ­ (acquisitions of property, plants, and equipment).
Internal cash flow in 1Q12 was R$185.0 million, increasing by 5.5% on the year-ago period. Of
this sum, R$29.6 million was invested in working capital and R$33.1 million in fixed assets. As
a result, free cash flow was R$127.4 million, increasing by 87.4% in relation to the year-ago
period.
Inventories remain at high levels, which is also the case of recoverable taxes, reflecting the
revision of credits from PIS and Cofins taxes on services, financial income and freight activities
in 2011. Both of these should be converted into cash over the course of 2012.
The profit margin obtained on exports from Brazil to the international operations was
subtracted from the COGS of the respective operations in order to show the actual impact of
these subsidiaries on the company's consolidated results. Accordingly, the pro-forma income
statement for the Brazilian operations considers only sales made in the domestic market.
3. pro-forma income statement
2. cash flow (pro-forma)
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10
(R$ million)
1Q12
1Q11
Change %
Total Consultants -
end of period
*
(in thousands)
1,178.6
1,032.7
14.1
Units sold ­ items for resale
(in million)
100.6
90.1
11.7
Gross Operating Revenues
1,540.1
1,438.7
7.0
Net Operating Revenues
1,140.2
1,052.5
8.3
Gross Profit
820.1
747.3
9.7
Sales Expenses
(413.0)
(368.9)
11.9
General and Administrative Expenses
(148.6)
(125.4)
18.5
Management compensation
(4.0)
(3.2)
23.5
Other Operating Income / (Expenses), net
(1.3)
14.7
n/a
Financial Income / (Expenses), net
(16.4)
(9.8)
66.8
Earnings Before Taxes
236.9
254.6
(7.0)
Net Income (Losses)
165.1
178.8
(7.7)
EBITDA
284.8
287.6
(1.0)
Gross Margin
71.9%
71.0%
0.9pp
Sales Expenses/Net Revenues
36.2%
35.1%
1.2pp
General and Admin. Expenses/Net Revenues
13.0%
11.9%
1.1pp
Net Margin
14.5%
17.0%
(2.5pp)
EBITDA Margin
25.0%
27.3%
(2.3pp)
(*) Number of consultants by the end of the 4th cycle of sales
The sales channel continues to register solid growth, expanding by 14.1% to reach
1,179,000 consultants in Brazil.
The productivity
3
of our consultants decreased 5.2% to R$1,851 in 1Q12, versus R$1,953
in 1Q11.
3
Productivity measured at retail prices.
3.1 BRAZIL OPERATIONS
(pro-forma income statement)
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11
(R$ million)
1Q12
1Q11
Change %
Total Consultants -
end of period
(in thousand)
158.2
133.1
18.9
Unit sold ­ items for resale
(in million)
7.6
6.6
15.3
Gross Revenues
114.5
78.8
45.3
Net Revenues
86.1
60.1
43.1
Gross Profit
57.5
36.4
58.0
Sales Expenses
(42.8)
(30.0)
42.7
General and Administrative Expenses
(6.9)
(5.2)
33.8
Others Income / (Expenses), net
(0.7)
(0.8)
(7.5)
Financial Income / (Expenses), net
0.3
(0.1)
n/a
Earnings Before Taxes
7.3
0.3
n/a
Net Income (Losses)
7.2
(1.9)
n/a
EBITDA
8.2
1.3
529.5
Gross Margin
66.8%
60.5%
6.3pp
Sales Expenses/Net Revenues
49.8%
49.9%
(0.2pp)
General and Admin. Expenses/Net Revenues
8.0%
8.6%
(0.6pp)
Net Margin
8.3%
n/a
n/a
EBITDA Margin
9.5%
2.2%
7.3pp
In the operations in consolidation, net revenue in 1Q12 was R$86.1 million, representing
growth of 35.8% in weighted local currency and 43.1% in Brazilian real compared to
1Q11.
The number of consultants grew by 18.9% to reach 158,200 at the close of the first
quarter of 2012.
These operations posted positive EBITDA of R$8.2 million in 1Q12. The higher
investments in marketing were offset by the dilution of expenses with our administrative
and sales teams and by the higher efficiency of our logistics operations.
3.2 OPERATIONS IN CONSOLIDATION
(Argentina, Chile
and Peru) pro-forma income statement
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12
The gross margin of these operations benefitted from various initiatives to improve the
management of prices and costs, as well as from the more favorable exchange rate.
(R$ million)
1Q12
1Q11
Change %
Total Consultants -
end of period
(in thousand)
95.1
65.0
46.5
Unit sold ­ items for resale
(in million)
4.3
3.1
36.8
Gross Revenues
52.0
34.5
50.7
Net Revenues
44.7
29.7
50.4
Gross Profit
29.9
16.7
78.8
Sales Expenses
(29.0)
(20.3)
43.1
General and Administrative Expenses
(5.5)
(3.7)
49.4
Others Income / (Expenses), net
(0.1)
(0.1)
n/a
Financial Income / (Expenses), net
0.9
(0.3)
(432.6)
Earnings Before Taxes
(3.7)
(7.6)
(50.9)
Net Income (Losses)
(3.8)
(8.1)
(53.9)
EBITDA
(4.0)
(6.7)
(40.1)
Gross Margin
66.9%
56.3%
10.6pp
Sales Expenses/Net Revenues
64.8%
68.1%
(3.3pp)
General and Admin. Expenses/Net Revenues
12.2%
12.3%
(0.1pp)
Net Margin
n/a
n/a
-
EBITDA Margin
n/a
n/a
-
In the operations in implementation, net revenue in 1Q12 was R$44.7 million, for growth
of 46.2% in weighted local currency and 50.4% in Brazilian real.
The number of consultants expanded by 46.5% to reach 95,100 at the close of 1Q12.
3.3 OPERATIONS IN IMPLEMENTATION
(Mexico and
Colombia) pro-forma income statement
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13
These operations continued to post an EBITDA loss in 1Q12, of R$4.0 million (although
improving from the EBITDA loss of R$6.7 million in 1Q11), reflecting the ongoing
investments being made.
The gross margin of these operations also benefitted from the initiatives to improve the
management of prices and costs, as well as from the more favorable exchange rate.
The other international investments, namely our operations in France and expenses with
projects and corporate structures dedicated to the international operations, posted an EBITDA
loss of R$16.8 million in 1Q12 (compared to R$18.0 million in 1Q11).
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14
Portuguese:
Friday, April 27, 2012
10:00 a.m. (Brasília Time)
English:
Friday, April 27, 2012
12:00 p.m. (Brasília Time)
From Brazil: +55 11 4688-6341
From the U.S. (toll free): +1 800 700 0802
From other countries: +1 412 824-6977
Code: Natura
Live webcast: www.natura.net/investidor
Tel: +55 (11) 4196-1421
Helmut Bossert,
helmutbossert@natura.net
Fabio Cefaly,
fabiocefaly@natura.net
Patrícia Anson,
patriciaanson@natura.net
Tatiana Bravin,
tatianabravin@natura.net
Taísa Hernandez,
taisahernandez@natura.net
CONFERENCE CALL & WEBCAST
INVESTOR RELATIONS
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15
ASSETS
Mar/12
Dec/11
LIABILITIES AND SHAREHOLDERS' EQUITY
Mar/12
Dec/11
CURRENT ASSETS
CURRENT LIABILITIES
Cash and cash equivalents
587.5
515.6
Borrowings and financing
136.8
169.0
Trade accounts receivable
526.3
641.9
Trade and other payables
466.4
489.0
Inventories
767.9
688.7
Payroll, profit sharing and related taxes
127.3
132.0
Recoverable taxes
220.8
201.6
Taxes payable
426.0
446.8
Derivatives
22.1
28.6
Dividends and interest on capital payable
491.2
0.2
Other receivables
137.6
126.8
Other payables
44.8
37.7
Total current assets
2,262.2
2,203.3
Total current liabilities
1,692.4
1,274.7
NONCURRENT ASSETS
NONCURRENT LIABILITIES
Long-term assets:
Borrowings and financing
987.3
1,017.7
Recoverable taxes
110.0
111.2
Taxes payable
151.3
140.5
Deferred income tax and social contribution
202.6
189.6
Provision for tax, civil and labor risks
65.4
65.0
Escrow deposits
307.1
295.8
Others provisions
47.2
44.8
Other noncurrent assets
28.5
29.9
Total noncurrent liabilities
1,251.2
1,268.0
Property, plant and equipment
797.5
800.4
Intangible assets
163.9
162.8
SHAREHOLDERS' EQUITY
Total noncurrent assets
1,609.6
1,589.8
Capital
427.1
427.1
Capital reserves
157.9
160.3
Earnings reserves
448.6
292.5
Treasury shares
(87.0)
(102.8)
Proposed additional dividend
-
490.9
Other comprehensive losses
(18.5)
(17.6)
Total equity attributable to owners of the Company
928.1
1,250.2
TOTAL ASSETS
3,871.7
3,793.0
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
3,871.7
3,793.0
> BALANCE SHEET AT MARCH 31, 2012
(in thousands of Brazilian real - R$)
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16
R$ million
03M11
03M12
NET REVENUE
1,275.8
1,145.8
Cost of sales
(365.3)
(343.2)
GROSS PROFIT
910.5
802.6
OPERATING (EXPENSES) INCOME
Selling expenses
(488.3)
(422.9)
Administrative and general expenses
(177.5)
(151.0)
Management compensation
(4.0)
(3.2)
Other operating (expenses) income, net
(2.1)
13.8
INCOME FROM OPERATIONS BEFORE FINANCIAL (EXPENSES) INCOME
238.6
239.3
Financial income
35.2
31.4
Financial expenses
(50.4)
(41.6)
INCOME BEFORE INCOME TAX AND SOCIAL CONTRIBUTION
223.4
229.1
Income tax and social contribution
(71.9)
(78.6)
NET INCOME
151.5
150.5
> INCOME STATEMENT FOR THE QUARTERS ENDED
MARCH 31, 2012 AND 2011
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17
R$ million
03M12
03M11
CASH FLOW FROM OPERATING ACTIVITIES
Net income
151.5
150.5
Adjustments to rec oncile net income to net c ash provided by operating ac tivities:
Deprec iation and amortization
33.5
24.8
Provision for losses on swap and forward transactions
6.6
8.4
Provision (reversal) for tax, c ivil and labor contingencies
1.9
(0.3)
Interest and inflation adjustment of escrow deposits
(5.2)
(6.5)
Income tax and social c ontribution
71.9
78.6
(Gain) loss on sale on property, plant and equipment and intangible assets
2.0
2.0
Interest and exc hange rate c hanges on borrowings and financing and other liabilities
(0.2)
4.7
Exchange rate changes on other assets and other liabilities
(0.4)
-
Stock options plans expenses
3.4
1.8
Allowanc e for doubtful ac counts
3.6
(0.9)
Allowanc e for inventory losses
(3.3)
1.7
Provision for healthc are plan and carbon c redits
2.4
0.6
Recognition of untimely used tax c redits
-
(16.9)
267.8
248.6
(INCREASE) DECREASE IN ASSETS
Trade rec eivables
111.9
133.0
Inventories
(75.8)
(111.3)
Recoverable taxes
(18.0)
(19.3)
Other receivables
(18.0)
(25.7)
Subtotal
0.1
(23.3)
INCREASE (DECREASE) IN LIABILITIES
Domestic and foreign suppliers
(22.3)
13.6
Payroll, profit sharing and related taxes, net
(4.8)
(41.8)
Taxes payable
32.4
20.1
Other payables
7.1
(10.6)
Payments of provision for tax, c ivil and labor contingencies
(1.5)
(0.3)
Subtotal
11.0
(19.0)
CASH GENERATED BY OPERATING ACTIVITIES
278.9
206.3
OTHER CASH FLOWS FROM OPERATING ACTIVITIES
Payments of inc ome tax and soc ial contribution
(114.4)
(94.2)
Payments of derivatives
(4.4)
(4.0)
Payment of interest on borrowings and financing
(0.7)
(5.4)
NET CASH GENERATED BY OPERATING ACTIVITIES
159.4
102.7
> CASH FLOW STATEMENT FOR THE QUARTERS ENDED
MARCH 31, 2012 AND 2011
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18
CASH FLOW FROM FINANCING ACTIVITIES
Acquisition of property, plant and equipment and intangible assets
(33.1)
(22.9)
Proc eeds from sale of property, plant and equipment and intangible assets
0.7
1.1
Withdrawal (payment) of esc row deposits
(6.0)
(10.4)
NET CASH USED IN INVESTING ACTIVITIES
(38.4)
(32.2)
CASH FLOW FROM FINANCING ACTIVITIES
Repayments of borrowings and financ ing - princ ipal
(70.0)
(65.4)
Proc eeds from borrowings and financ ing
6.9
301.6
Sale of treasury shares due to exercise of stoc k options
14.7
-
Capital increase through subscription of shares (153,230 common shares at average pric e of R$24.78)
-
3.8
NET CASH USED IN FINANCING ACTIVITIES
(48.4)
240.0
Gains (losses) arising on translating foreign currency c ash and c ash equivalents
(0.8)
(2.6)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
71.9
307.9
Cash and cash equivalents at the beginning of the year/period
515.6
560.2
Cash and cash equivalents at the end of the year/period
587.5
868.1
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
71.9
307.9
ADDITIONAL INFORMATION TO THE STATEMENTS OF CASH FLOWS
Restricted cash
6.8
6.2
Bank overdrafts - unused
235.5
265.5
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19
EBITDA is not a measure under BR GAAP and does not represent cash flow for the periods presented. EBITDA should not be
considered an alternative to net income as an indicator of operating performance or an alternative to cash flow as an indicator of
liquidity. EBITDA does not have a standardized meaning and the definition of EBITDA used by Natura may not be comparable with
that used by other companies. Although EBITDA does not provide under BR GAAP a measure of cash flow, Management has
adopted its use to measure the Company's operating performance. Natura also believes that certain investors and financial analysts
use EBITDA as an indicator of performance of its operations and/or its cash flow.

This report contains forward-looking statements. These forward-looking statements are not historical fact, but rather reflect the
wishes and expectations of Natura's management. Words such as "anticipate", "wish", "expect", "foresee", "intend", "plan",
"predict", "project", "desire" and similar terms identify statements that necessarily involve known and unknown risks. Known risks
include uncertainties that are not limited to the impact of price and product competitiveness, the acceptance of products by the
market, the transitions of the Company's products and those of its competitors, regulatory approval, currency fluctuations, supply
and production difficulties and changes in product sales, among other risks. This report also contains certain pro forma data, which
are prepared by the Company exclusively for informational and reference purposes and as such are unaudited. This report is up-to-
date as of its publication date and Natura is under no obligation to update it in light of new information and/or future events.