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Natura
bem estar bem
Deutsche Bank
9th Annual Global Consumer Conference
June 2012 l Paris - London
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Natura
essence
2
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our reason for
being is to
create products
and services
that promote
well-being /
being-well
WELL-BEING
is the
harmonious and
gratifying
relationship of a
person with
oneself and with
ones body
BEING-WELL
is the empathetic.
pleasing and
rewarding
relationship of a
person with others.
with nature and
with the whole
REASON
FOR BEING
3
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Life is a chain of relationships.
nothing in the universe exists alone.
everything is interdependent.
We believe appreciating the
importance of relationships
is the foundation of an enormous
human revolution seeking peace.
solidarity and life in all of its
manifestations.
The continuous pursuit of
improvement promotes the
development of individuals.
organizations and society.
Commitment to the truth
BELIEFS
The greater the diversity
of the parts. the greater the
wealth and vitality of the whole.
The pursuit of beauty. which
is the genuine aspiration of every
human being. must be free of
preconceived notions 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.
4
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VALUE
PROPOSITION
Brand
Essence
Channel
Products
Corporate
Behavior
Social
_ Wealth creation for consultants
_ Benefits shared with
communities involved in extractive
activities
Economic
_ Strong cash generation
_Growth and profitability
_Consistent dividend payout
Environmental
_ Carbon neutral
_ Use of refill packaging
_ Sustainable extraction
_ Use of recycled and recyclable
materials
Triple Bottom Line
5
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Countries
2011
CAGR %
`06- '11
United States
63
1.4%
Japan
47
-0.5%
Brazil
43
12.3%
Mexico
10
7.6%
Argentina,
Chile,
Colombia
and Peru
12
11.8%
Countries in
which
Natura operates
65
11.4%
World
425
5.0%
SIZE OF CF&T MARKET
(in US$ billion, Fixed FX)
Source: Euromonitor 2011
The markets in which Natura operates represent 15% of
the global CF&T market and have a growth rate more
than 2 times of the total market
RELEVANT MARKET WITH
DIFFERENTIATED GROWTH
Market growth
in nominal terms
2004
20.7%
2005
15.9%
2006
13.5%
2007
13.2%
2008
16.2%
2009
14.4%
2010
13.1%
2011
8.2%
CAGR
`04- `11
13.5%
YoY BRAZIL TARGET MARKET
GROWTH (nominal)
Region
Direct Sales
(%)
Latin America
29.1%
Brazil
28.6%
Argentina
27.4%
Chile
18.8%
Colombia
35.1%
Mexico
30.9%
Peru
41.1%
Eastern Europe
19.3%
Asia Pacific
11.8%
Australasia
8.9%
North America
7.4%
Western Europe
3.4%
Africa / Middle
East
3.1%
DIRECT SALES SHARE
IN THE CF&T MARKET
Source: Euromonitor 2011
6
Source: Sipatesp / ABEVD 2011
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2010
49
2009
46
2008
47
2007
42
2011
47
In Argentina and Peru, we are among the three most preferred brands
BRAND PREFERENCE
Brand Preference¹ in Brazils CFT Market (%)
1
Source: Brand Essence / Ipsos
7
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MARKET SHARE
8
Major Players in Brazil
(Euromonitor)
2007
2011
Natura
Unilever
Avon
P&G
Boticário
L'Oréal
Natura
(Euromonitor)
Brazil
Operations in Consolidation
(Argentina, Chile and Peru)
Operations in Implementation
(Mexico and Colombia)
13.4
14.5
2.1
4.0
0.1
1.0
2007
2011
13.4
14.5
10.4
10.2
9.1
8.8
7.2
8.3
6.0
8.2
5.9
5.7
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_
Sustainable use of Brazilian
biodiversity
_
Open Innovation exceeded
69% of the projects
_
Products with functional.
emotional and philosophical
benefits
Number of
product launches
Innovation index
1
68.8
%
123
2.8%
67.3
%
113
2.6%
2010
2009
2008
65.7
%
191
2.8%
2011
64
.8
%
168
2.7%
2007
56
.8
%
183
2.9%
PRODUCTS
_ Innovation index 1T12 stood at 67.0% in 1Q12 (62.6% in 1Q11);

_ Investments in R&D in 1Q12 corresponded to 3.0% of Net Revenues (2.8% in 1Q11).
9
1
Products launched in last 24 months as a percentage of the companys revenue
R&D % Net
Revenues
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Number of consultants
(thousand; CAGR `07- `10)
_
Consultants are Naturas first consumers
_
Sales driven through personal relationships
_
Channel disseminates Natura's values with consultants acting as agents of social
transformation
Channels differentiations
Strong
growth
CAGR ,,07 ­ ,,11
of 18.6%
High
productivity
1
2.2 times higher
than its peers
High
satisfaction
2
87% in 2011
Training
566.000
consultants
trained in
2011
Low
turnover
30% on
average
Business
model that
generates
income and
work
International
Brazil
SALES CHANNEL
2007
632
86
2010
1,029
193
2011
1,175
246
CAGR
17.6%
CAGR
30.9%
YoY
14.2%
YoY
27.5%
1Q11
1,033
197
1Q12
1,179
256
YoY
14.1%
YoY
29.8%
10
1
Source: Company. ABEVD (Brazilian Association of Direct Sales Companies)
2
HAY Consultant annual opinion poll for consultants satisfaction
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2011 Awards and Recognitions
_ The second most sustainable company in
the world by the Canadian Research
Institute
_ The 8th most innovative Company
worldwide by Forbes Magazine
CORPORATE
BEHAVIOUR
11
Socio-Environmental
Commitments and Targets:
Best standard for corporate governance
_ Natura was the first Brazilian Company to voluntarily obtain the SOx certification
_ Around 250 investors (particular our individual investors) attend to our Ordinary
General Shareholders' Meeting
_ Management Compensation System linked to Triple Bottom Line dimensions:
Consolidated Ebitda, Organizational Climate Surveys; CO
2
Emission and Stock out index
_ Water
_ Education
_ Climate Change
_ Sociobiodiversity
_ Solid Waste
_ Sustainable
Entrepreneurship
_ Relationship Quality
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VALUE
PROPOSITION
Brand
Essence
Channel
Products
Corporate
Behavior
Social
_ Wealth creation for consultants
_ Benefits shared with
communities involved in extractive
activities
Economic
_ Strong cash generation
_Growth and profitability
_Consistent dividend payout
Environmental
_ Carbon neutral
_ Use of refill packaging
_ Sustainable extraction
_ Use of recycled and recyclable
materials
Triple Bottom Line
12
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Market share
(Euromonitor)
Driven by the channels expansion, we posted strong
growth in recent years, reaching 100 million consumers,
through 1.2 million Consultants in Brazil
38%
2011
62%
2010
54%
13
2011
2007
2007
Penetration Brazil
(Kantar WorldPanel)
13.4%
14.5%
Brazil
2.1%
4.0%
Operations in
Consolidation
0.1%
1.0%
Operations in
Implementation
¹ Operations in Consolidation (Argentina, Chile and Peru)
² Operations in Implementation (Mexico and Colombia)
³ % of households that purchase at least one Natura product in the last 12 months
¹
³
²
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P&L Highlights
2007
2,927
146
2010
4,765
372
CAGR
17.6%
CAGR
36.6%
YoY
6.8%
YoY
35.5%
Net revenues¹
(R$ Million; CAGR `07 -`10)
CAGR
21.4%
2011
25.5%
1,425
Ebitda consolidated
(R$ Million; CAGR `07 ­ `10)
International
Brazil
2010
24.5%
1,257
2007
22.8%
702
YoY
13.4%
1Q11
1,053
93
1Q12
1,140
136
YoY
8.3%
YoY
45.2%
1Q12
21.3%
272
1Q11
23.0%
264
YoY
3.0%
2011
5,088
504
5,591
5,137
3,073
1,146
1,276
14
1
Net Revenues and Ebitda growth in Brazilian Real. International Operations Net Revenues growth, in weighted local currency, of
40.0% in 2011 and of 39.2% in 1Q12.
2
Excluding other operating expenses and revenues from EBITDA in both quarters, EBITDA margin was 21.8% in 1Q11 and 21.5%
in 1Q12, growing by 9.6% in 1Q12 vs 1Q11.
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Solid DIVIDEND Growth
15
Dividends Declared
(R$MM; % Net Income)
2009
598
2011
824
2010
719
Pay-Out Ratio
(%)
Dividends Declared
CAGR 2007-11: 19%
2008
500
2007
415
89%
97%
87%
97%
99%
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Creating ENVIRONMENTAL VALUE
16
2011 Highlights:
_
R$ 70 million invested in Sustainability Matrix
_
922 thousand students of public schools benefited from the "Crer pra Ver" Program
_
Relationship with wealth creation to 3,235 families in the suppliers communities
_
R$ 3 billion of wealth generated to consultants
CO
2
emissions
(CO
2
emitted / Kg of product
produced)
3.55
2011
3.12
2010
3.30
2009
-5.5%
2011
2010
2009
Water consumption
(liters / unit produced)
0.42
0.40
0.42
-4.8%
422
2011
410
2010
466
2009
Power consumption
per product sold
(Kjoules / unit produced)
-12.0%
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2011
was a year of
transformation in
Brazil and
excellent results
in the
International
Operations
_
The biggest infrastructural investment in our
history: R$ 350 million
_
Service level quality was compromised by
simultaneous implementation of structural
projects
_
Commercial and Promotional efficiency
below our expectations
_
Reduction in greenhouse gas emissions and
natural resources consumption (water and
energy)
_
Strong results in International Operations
already accounting for 9% of consolidated
net revenues
17
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2007 - 2011
2012 - ...
Channel expansion
(implementation of CNO)
CN productivity, Innovation, White
spaces
Investments in infrastructure
Service level as competitive
advantage
IT investments: transactional
Leverage and strength CN - CF
relationships (social and digital
media)
Marketing: more investments
Marketing: efficiency gains
Opportunities to
enhance the
strategy in Brazil
18
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2010
Opening of DC Uberlândia
Opening of DC Castanhal
Doubling of DC Canoas
2011
Opening of DC São José dos Pinhais ­ PR
Opening of New DC Matias
Opening of New DC Jaboatão
Doubling of DC Simões
2012 onwards
HUB PE
New DC SP
New HUB SP
Opening of Two DCs N/NE
Opening of HUB N/NE
DC São Paulo
DC Curitiba
DC Canoas
DC Simões Filho
DC+hub
Jaboatão
DC Castanhal
DC Uberlandia
DC Matias Barbosa
BETTER SERVICE LEVEL:
NEW NETWORK CAN FILL UP TO 93% OF ORDERS WITHIN 48H
19
DC: Distribution Center
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High Penetration in the households and low number of
categories¹
% of households that purchase
at least one Natura product in
the last 12 months
%
purchase
categories
50.1%
52.3%
61.8%
1 category
2 categories
3 categories
4 categories
>5 categories
2009
43.9%
25.0%
14.6%
8.6%
8.0%
2010
38.0%
24.9%
17.2%
10.3%
9.6%
2011
36.2%
24.8%
17.5%
10.2%
focus on increasing
consultant productivity in Brazil,
products and concepts innovation
11.3%
20
1
Source: Kantar WorldPanel
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3.6
Penetration by category
(%)
(2011)
26.5
99.5
13.5
92.7
91.3
24.5
91.1
4.4
29.1
28.7
75.2
8.0
17.7
32.5
63.8
21.2
11.2
36.9
99.9
61.8
Soaps Shampoo After -
Shampoo
Deo
Facial
Care
Body
Care
Oils
Fragrance
Sun
Block
Make
up
Total
Market
Natura
focus on increasing
consultant productivity in Brazil,
products and concepts innovation
13.2
21
Source: Kantar WorldPanel
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Democratic and aspirational brand.
opportunity for white spaces
P
REST
IGE
M
A
S
STIG
E
M
A
S
SIVE
focus on increasing
consultant productivity in Brazil,
products and concepts innovation
22
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With 100 million consumers and brand preference, we have
an opportunity to increase our focus on productivity
Innovation &
Products
(
White Spaces;
Price Points, Process)
Communication
Services
Relationships
(training,
recognition model)
Promotion
planning
Sales Force
Management
Gradually
leveraging
productivity while
taking advantage
of synergies among
actions
focus on increasing
consultant productivity in Brazil,
products and concepts innovation
23
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24
A FUTURE IN WHICH THE RELATIONSHIP BETWEEN CONSULTANTS AND
CONSUMER WILL BE LEVERAGED BY TECHNOLOGY AND
SOCIAL
NETWORKS.
¹ CN: Natura Consultant
² CF: Final Consumer
¹
²
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MAIN DRIVERS:
_Model adapted to local
reality
_Channel expansion
_Brand awareness
_Service quality
Number of CNs: 256.300
International
FRANCE
10.3
3.5
1.9
2.6
4.4
CNs: 2.900
MEXICO
CNs: 65.700
ARGENTINA
CNs: 64.700
CHILE
CNs: 37.500
PERU
CNs: 56.000
COLOMBIA
CNs: 29.500
INTERNATIONAL
OPERATIONS
25
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Strategic Focus
Innovation in products and commercial model
Service Level as competitive advantage
CN & CF Productivity
International Expansion
Leadership
26
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thank you
Roberto Pedote
Fabio Cefaly
Tatiana Bravin
Taísa Hernandez