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1
Introduction
Consolidated net revenue in 3Q12 was R$1,586.5 million, up 14.8% from 3Q11. EBITDA
1
was
R$385.0 million (margin of 24.3%), increasing 15.5% from 3Q11. Net income was R$237.3 million,
growing 17.7% from 3Q11.
In 9M12, consolidated net revenue was R$4,470.7 million, increasing 14.0% from 9M11. EBITDA
was R$1,048.7 million (margin of 23.5%), increasing 13.4% from 9M11. Net income was R$603.9
million, or 11.8% higher than in 9M11.
In the Brazilian operations, net revenue in 3Q12 grew 11.4% to R$1,391.8 million (R$3,966.3
million in 9M12, up 10.9%). EBITDA margin in 3Q12 was 27.6%, compared to 27.9% in 3Q11
(27.0% in 9M12, compared to 27.3% in 9M11).
The international operations accounted for 12.3% of net revenue in 3Q12 (11.3% in 9M12),
which represents the highest contribution ever. Net revenue in 3Q12 was R$194.8 million, growing
by 47.4% in Brazilian real and by 24.1% in weighted local currency (R$504.4 million in 9M12, up
46.5% in Brazilian real and 29.1% in weighted local currency).
The International Operations posted EBITDA of R$1.2 million, compared to the EBITDA loss of
R$14.8 million in 3Q11 (loss of R$21.8 million in 9M12, versus the loss of R$52.0 million in 9M11).
The total consultant base reached 1,518,000 in 3Q12, expanding by 11.5% from 3Q11. In Brazil, we
ended 3Q12 with 1,227,000 consultants, for growth of 8.4% on 3Q11. In the International
Operations, we ended the period with 291,000 consultants, up 26.6% from 3Q11.
Highlights
Natura's strategy is focused on growth in Brazil, accompanied by an increase in consultant
productivity; on accelerated and profitable growth in our international operations; and, in the
medium term, on significant improvement in the experience of our consumers and consultants
through a digital network that will promote more personal relationships. In the third quarter of
2012, consistent with our strategy, we made progress on multiple fronts.
In Brazil, we continued the initiatives to improve consultant productivity based on innovation,
redirecting the marketing mix and improving service quality.
1
Based on pro-forma EBITDA.
São Paulo, October 24, 2012 ­ Natura Cosméticos S.A. (BM&FBOVESPA: NATU3)
announces today its results for the third 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).

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2
The productivity of our consultants in the quarter increased by 1.4% compared to 3Q11. We
implemented adjustments in the management of the sales team and Super Consultants (CNOs),
giving greater importance to productivity metrics, in contrast to the previous model, which
prioritized growing the channel. We also launched the MAIS Natura program, which works to
gradually increase the size of consultants' orders.
We made important perfume launches positioned in various price points. For Cycle 14, we launched
the Natura Tododia line of body splashes with a variety of fragrance options that convey lightness,
well-being and freshness and that ideally are used lavishly. For Cycle 15, we launched the perfume
Natura UNA, which translates all the sophistication and elegance of this brand. The innovation index
stood at 67.3% in 9M12 (compared to 64.6% in 9M11). In 3Q12, investments in research and
development corresponded to 2.7% of net revenue, compared to 2.8% in 3Q11 (2.6% in 9M12,
compared to 2.8% in 9M11).
We continued to improve service quality during the quarter, with a reduction in the number of
out-of-stock items and shorter delivery times for consultants, operating above our historical levels.
These investments also have allowed us to reduce our logistics costs and inventory levels.
We reaffirm our expectation that this set of measures to have favorable impacts on the productivity
of our consultants over the coming quarters.
In the International Operations, we ended 3Q12 with positive EBITDA of R$1.2 million, compared to
the EBITDA loss of R$14.8 million in the same period of 2011, reinforcing our strategy of accelerated
growth accompanied by rising profitability. In the Operations in Consolidation, we reached EBITDA
margin of 18.4%.
Looking ahead to a future in which the relationship between our consultants and end-consumers is
supported by an increasingly connected network, we made progress on investments that will soon
allow us to test and learn from new tools, services and concepts and in turn promote a more
personalized relationship and a better experience for our consumers and consultants.
Cosmetics, Fragrance and Toiletries Industry
According to data collected and published by Sipatesp/Abihpec
2
, Natura's target market in Brazil
grew by 16.8% in the first six months of the year. This level of growth corroborates our expectation
of a recovery in relation to 2011, though at higher-than-expected levels, especially in the personal
care categories, in which relevant launches and investments were made in the first half of the year.
Natura's market share stood at 23.2% in the period, contracting by 1.5 percentage point.
The following table presents the growth in the cosmetics, fragrances and toiletry (CFT) industry and
the variation in Natura's market share.
2
Sipatesp/Abihpec: São Paulo State Perfumery and Toiletry Trade Union / Brazilian Cosmetic, Fragrance and Toiletry Industry
Association. Amounts for 2011 reprocessed by Sipatesp/Abihpec.
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3
Social and Environmental Performance
The following table shows the performance of indicators related to our key social and environmental
themes:
As part of our ongoing commitment to reduce relative greenhouse gas emissions, we achieved a
reduction of 5.3% in 6M12 in relation to 2011, as a result of the adjustments in the product mix and
the use of biofuels in production processes, combined with the lower consumption of LPG and diesel
oil. We also reduced compared to 2011 the emissions associated with our logistics processes, which
consider the supply and management of Distribution Centers and the deliveries to Consultants.
Solid waste generation in 9M12 came in above target, due to the write-off of inventories of
discontinued materials (finished products and raw materials), while the results of the other social
and environmental indicators were in line with the established targets.
Inauguration of the Amazon Natura Innovation Center (NINA)
Charged with the mission of fostering the development of an extensive research network comprised
of local, national and international science and technology institutions, on August 16, 2012, one year
after the launch of the Amazon Program, we inaugurated, in the city of Manaus, the Amazon Natura
Innovation Center (NINA).
Market Size
(R$ Million)
Market Share Natura (%)
6M12
6M11
Change
6M12
6M11
Change
Cosmetics and Fragrances
4,875
4,285
13.8%
37.6%
38.2%
(0.6) pp
Toiletries
5,992
5,018
19.4%
11.5%
13.1%
(1.7) pp
Total
10,867
9,303
16.8%
23.2%
24.7%
(1.5) pp
Source: Sipatesp
Indicator
*Reduce relative greenhouse gas (GHG) emissions by 33.0% by 2013, against 2006 baseline inventory. In 2011 reduction of 25.4% over 2006.
**Refers to 1S12.
***Indicator refers to compensation and purchase of raw materials.
Solid Waste
Collections CPV
2012 Commitment
9M12 Results
Greenhouse gas (GHG) emissions
Reduction of 5.3%
over 2010
Reduce relative greenhouse gas (GHG)
emissions
by 4.5% over 2011*
Reduction of 5.3% over
2011**
2011 Results
Mantain 0.4 liter / unit produced in
Brazil
0.4 liter / unit produced
Funding to
Supplier Communities ***
R$10.0 million
Distribute R$12 million in wealth to
supplier communities.
R$8.8 million
Water consumption
0.4 liter / unit produced
R$8.4 million
Achieve R$10.3 million sales from
Crer para Ver product line in Brazil
R$8.2 million
(throughout the year)
20 grams / unit produced
Maintain quantity of solid waste
generated per unit produced in Brazil
at 20 grams.
25.2 grams/unit
produced
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4
Our goal is to develop knowledge "in" the Amazon, "about" the Amazon and "for" the Amazon, for
which we plan to generate new demand and job opportunities for local researchers, which will be
based on an open-innovation model that we adopted over five years ago.
The initiatives to foster research will focus on the following fields of interest: culture and society;
conservation and biodiversity; forests and agriculture; and product design and processes. By 2020,
we plan to connect around one thousand researchers on the network, including both Natura
employees and members of science and technology institutions.
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5
1.
consolidated
results
Consolidated net revenue was R$1,586.5 million in 3Q12, increasing 14.8% from 3Q11
(R$4,470.7 million in 9M12, advancing 14.0%). In Brazil, net revenue was R$1,391.8 million in
3Q12, 11.4% more than in the same quarter a year ago (R$3,966.3 million in 9M12, for growth of
10.9% on 9M11). In the international operations, net revenue in the quarter was R$194.8 million,
increasing 24.1% in weighted local currency (47.4% in Brazilian real) compared to 3Q11 (R$504.4
million in 9M12, increasing by 29.1% in weighted local currency and by 46.5% in Brazilian real). As was
the case in 2Q12, this quarter exchange variation had a positive effect on results, since the Brazilian real
depreciated against the basket of currencies of the countries in which we operate.
(R$ million)
3Q12
3Q11
Change %
9M12
9M11
Change %
Total Consultants - end of period*
(in thousands)
1.518
1.362
11,5
1.518
1.362
11,5
Total Consultants - average of period**
(in thousands)
1.513
1.332
13,6
1.475
1.279
15,3
Units sold ­ items for resale
(in million)
128,9
118,3
8,9
362,3
327,4
10,6
Gross Revenues
2.154,2
1.862,0
15,7
6.014,9
5.303,2
13,4
Net Revenues
1.586,5
1.381,4
14,8
4.470,7
3.920,9
14,0
Gross Profit
1.131,5
967,6
16,9
3.179,0
2.750,8
15,6
Sales Expenses
(535,3)
(500,2)
7,0
(1.574,1)
(1.409,5)
11,7
General and Administrative Expenses
(232,0)
(163,7)
41,7
(632,9)
(507,0)
24,8
Management compensation
(5,2)
(2,8)
85,3
(15,6)
(9,7)
60,2
Other Operating Income / (Expenses), net
(9,5)
4,2
n/a
(11,1)
21,0
n/a
Financial Income / (Expenses), net
0,4
(4,4)
n/a
(54,6)
(35,7)
52,7
Earnings Before Taxes
350,0
300,7
16,4
890,7
809,9
10,0
Net Income (Losses)
237,3
201,6
17,7
603,9
540,2
11,8
EBITDA**
385,0
333,3
15,5
1.048,7
924,6
13,4
Gross Margin
71,3%
70,0%
1,3 pp
71,1%
70,2%
0,9 pp
Sales Expenses/Net Revenues
33,7%
36,2%
(2,5) pp
35,2%
35,9%
(0,7) pp
General and Admin. Expenses/Net Revenues
14,6%
11,8%
2,8 pp
14,2%
12,9%
1,2 pp
Net Margin
15,0%
14,6%
0,4 pp
13,5%
13,8%
(0,3) pp
EBITDA Margin
24,3%
24,1%
0,1 pp
23,5%
23,6%
(0,1) pp
(*) Positon at the end of the 13th sales cycle
(**) EBITDA = Income from operations before financial effects + depreciation & amortization.
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6
We also observed in the quarter an unfavorable impact on our Net Revenue from the revision of the
Value-Added Margin for CFT products sold via direct sales that was published by the State of São
Paulo on June 26 and took effect on August 1.
Cost of Goods Sold (COGS) decreased from 30.0% of net revenue in 3Q11 to 28.7% in 3Q12,
leading to a reduction of 130 basis points, reflecting the more efficient management of promotions
in our International and Brazilian Operations, the favorable foreign exchange impacts and the
procurement gains.
In 9M12, COGS as a percentage of net revenue decreased by 90 basis points to
28.9%, from 29.8% in 9M11 .
The following table presents the main components of COGS
3
:
Selling expenses corresponded to 33.7% of net revenue in 3Q12, compared to 36.2% in the same
period last year. The efficiency gains resulting from the decentralization of logistics operations and
investments in marketing, combined with the higher dilution of expenses with the sales team, were
sufficient to offset the higher investments already expected in the International Operations. In
9M12, selling expenses decreased to 35.2% of net revenue, from 35.9% in 9M11.
General and administrative expenses corresponded to 14.6% of net revenue in 3Q12, increasing
280 basis points from 3Q11. The increase in general and administrative expenses was mainly due to
the partial reversal of the Profit Sharing Program in 3Q11, the higher investments in Information
Technology to improve systems quality and foreign-exchange and inflation impacts on the corporate
structure in Buenos Aires. In 9M12, general and administrative expenses corresponded to 14.2% of
net revenue, compared to 12.9% in 9M11.
Other operating income and expenses were an expense of R$9.5 million in 3Q12, compared to
income of R$4.2 million in 3Q11 (reflecting the non-recurring impact from the recognition of a credit
of extemporaneous PIS and Cofins taxes on services).
Consolidated net income was R$237.3 million in 3Q12, which represents net margin of 15.0%
and growth of 17.7% compared to 3Q11 (R$603.9 million in 9M12, up 11.8% from R$540.2 million
in 9M11).
Consolidated EBITDA in 3Q12 was R$385.0 million, growing by 15.5% from 3Q11. EBITDA margin
increased from 24.1% in 3Q11 to 24.3% in 3Q12. In 9M12, EBITDA was R$1,048.7 million, growing
13.4% from 9M11. EBITDA margin was 23.6% in 9M11, compared to 23.5% in 9M12.
Representation of the cost breakdown for 2011 due reclassifications.
3Q12
3Q11
9M12
9M11
RM / PM ¹
82,8
83,4
82,0
81,9
Labor
9,3
9,3
9,7
9,7
Depreciation
2,7
2,4
2,7
2,5
Other
5,2
4,9
5,6
5,9
Total
100,0
100,0
100,0
100,0
(¹) Raw materials and packaging materials
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7
EBITDA (R$ million)
Pro-forma EBITDA by areas of operation (R$ million)
2.
cash
flow
(pro forma)
Internal cash generation in 9M12 was R$750.0 million, increasing 19.1% from the year-ago period.
Working capital decreased R$25.1 million, due to the improvement in inventory management, the
provisioning for the Profit Sharing Program (in 3Q11 a portion of this provision was reversed) and
the recovery of taxes.
In 3Q12, we invested R$105.4 million in property, plant and equipment and intangible assets,
bringing the total invested in 9M12 to R$202.5 million. As a result, free cash flow was R$572.7
million, increasing by 141.8% from the same period of 2011.
3Q12
3Q11
Change%
9M12
9M11
Change%
Net Revenues
1.586,5
1.381,4
14,8
4.470,7
3.920,9
14,0
(-) Cost of Sales and Expenses
1.236,9
1.076,3
14,9
3.525,4
3.075,3
14,6
EBIT
349,6
305,1
14,6
945,3
845,6
11,8
(+) Depreciation/Amortization
35,4
28,2
25,8
103,5
79,0
31,0
Total
385,0
333,3
15,5
1.048,7
924,6
13,4
3Q12
3Q11
Change%
9M12
9M11
Change%
Brazil
383,8
348,1
10,3
1.070,6
976,6
9,6
Argentina, Chile and Peru
24,7
9,4
163,9
49,0
18,8
160,1
Mexico and Colombia
(2,8)
(7,2)
(61,0)
(13,9)
(20,6)
(32,5)
Other Investments
(20,7)
(17,0)
22,1
(56,9)
(50,3)
13,1
Total
385,0
333,3
15,5
1.048,7
924,6
13,4
R$ million
9M12
9M11
Change%
Net income
603,9
540,2
11,8
Depreciation and amortization
103,5
79,0
31,0
Non-cash / Other*
42,6
10,5
306,7
Internal cash generation
750,0
629,7
19,1
Working Capital (Increase)/Decrease
25,1
(141,1)
(117,8)
Operating cash generation
775,2
488,7
58,6
CAPEX
(202,5)
(251,8)
(19,6)
Free cash flow**
572,7
236,9
141,8
(*) Some 2011 figures were adjusted for proper disclosure
(**) (Internal cash generation) +/- (changes in working capital and long-term assets and
liabilities) ­ (acquisitions of property, plants, and equipment).
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8
3.
Income Statements
(pro forma)
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 the sales made in the domestic market.

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9
3.1.
Brazil operation
Pro-Forma Income Statements
The number of consultants in Brazil reached 1,227,000 at the end of the quarter, growing in
relation to 3Q11 by 8.4% and 10.8% considering the number of consultants at the end of the
period and the average in the period, respectively.
This quarter, consultant productivity
4
increased by 1.4%, compared to the decreases of 5.7%
and 2.6% in 1Q12 and 2Q12, respectively. This improvement reflects the initiatives
implemented over the last few cycles aimed at promoting higher productivity.
In 9M12, productivity decreased by 2.1% to R$6,381, from R$6,516 in 9M11.
4
Productivity in retail price = (gross revenue/average consultants)/consultant profit
(R$ million)
3Q12
3Q11
Change%
9M12
9M11
Change%
Total Consultants - end of period*
(in thousands)
1.227
1.131
8,4
1.227
1.131
8,4
Total Consultants - average of period**
(in thousands)
1.226
1.106
10,8
1.203
1.067
12,7
Units sold ­ items for resale
(in million)
114,8
105,0
9,3
323,6
292,7
10,6
Gross Revenues
1.903,6
1.693,9
12,4
5.371,7
4.868,1
10,3
Net Revenues
1.391,8
1.249,3
11,4
3.966,3
3.576,6
10,9
Gross Profit
994,9
884,1
12,5
2.831,9
2.538,9
11,5
Sales Expenses
(435,6)
(426,3)
2,2
(1.301,6)
(1.217,9)
6,9
General and Administrative Expenses
(194,9)
(138,3)
40,9
(532,9)
(432,3)
23,3
Management compensation
(5,2)
(2,8)
85,3
(15,6)
(9,7)
60,2
Other Operating Income / (Expenses), net
(8,5)
5,0
n/a
(8,6)
23,4
n/a
Financial Income / (Expenses), net
(0,9)
(1,7)
(46,8)
(58,1)
(33,5)
73,7
Earnings Before Taxes
349,8
320,0
9,3
915,1
869,0
5,3
Net Income (Losses)
240,9
224,3
7,4
633,0
607,9
4,1
EBITDA
383,8
348,1
10,3
1.070,6
976,6
9,6
Gross Margin
71,5%
70,8%
0,7 pp
71,4%
71,0%
0,4 pp
Sales Expenses/Net Revenues
31,3%
34,1%
(2,8) pp
32,8%
34,1%
(1,2) pp
General and Admin. Expenses/Net Revenues
14,0%
11,1%
2,9 pp
13,4%
12,1%
1,3 pp
Net Margin
17,3%
18,0%
(0,6) pp
16,0%
17,0%
(1,0) pp
EBITDA Margin
27,6%
27,9%
(0,3) pp
27,0%
27,3%
(0,3) pp
(*) Positon at the end of the cycle13
(**) Avarage number of consultants in the quarter corresponds to cycles 9 to 13.
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10
3.2.
operations in
consolidation
(Argentina, Chile and Peru) Pro-forma Income Statements
In the operations in consolidation, net revenue was R$133.8 million in 3Q12, increasing by 24.4% in
weighted local currency and by 47.9% in Brazilian real compared to 3Q11. In 9M12, net revenue
from these operations was R$332.6 million, for growth of 27.2% in weighted local currency and
45.9% in Brazilian real.
The number of consultants grew 19.2% to end the quarter at 184,000 (increase of 19.5% in the
quarterly average).
These operations posted positive EBITDA of R$24.7 million in the quarter and R$49.0 million in
9M12. In addition to the gross margin expansion, which benefitted from various initiatives to
(R$ million)
3Q12
3Q11
Change%
9M12
9M11
Change%
Total Consultants - end of period*
(in thousands)
184
154
19,2
184
154
19,2
Total Consultants - average of period**
(in thousands)
180
151
19,5
170
141
20,3
Units sold ­ items for resale
(in million)
9,8
9,1
6,8
25,3
23,8
6,4
Gross Revenues
179,9
120,0
49,9
443,9
300,5
47,7
Net Revenues
133,8
90,5
47,9
332,6
227,9
45,9
Gross Profit
95,3
58,5
62,9
232,2
143,0
62,4
Sales Expenses
(61,0)
(43,3)
41,1
(158,2)
(108,2)
46,1
General and Administrative Expenses
(9,9)
(6,1)
62,4
(26,1)
(16,9)
54,3
Other Operating Income / (Expenses), net
(0,9)
(0,8)
19,2
(2,4)
(1,7)
39,2
Financial Income / (Expenses), net
1,2
(1,5)
n/a
2,9
(0,8)
n/a
Earnings Before Taxes
24,7
6,9
n/a
48,6
15,3
n/a
Net Income (Losses)
21,2
4,7
n/a
44,6
9,2
n/a
EBITDA
24,7
9,4
163,9
49,0
18,8
160,1
Gross Margin
71,2%
64,7%
6,6 pp
69,8%
62,7%
7,1 pp
Sales Expenses/Net Revenues
45,6%
47,8%
(2,2) pp
47,6%
47,5%
0,1 pp
General and Admin. Expenses/Net Revenues
7,4%
6,7%
0,7 pp
7,8%
7,4%
0,4 pp
Net Margin
15,9%
5,2%
10,7 pp
13,4%
4,0%
9,4 pp
EBITDA Margin
18,4%
10,3%
8,1 pp
14,7%
8,3%
6,5 pp
(*) Position of sales at the end of Cycle 12 for Argentina and of Cycle 11 for Chile and Peru
(**) Avarage number of consultants in the quarter corresponds to cycles 9 to 12 for Argentina and cycles 8 to 11 for Chile and Peru.
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11
improve the management of prices and costs and the more favorable exchange rate, in 2012,
marketing investments were distributed differently across quarters.
3.3.
operations under
implementation
(Mexico and Colombia) Pro-forma Income Statements
In the operations in implementation, net revenue in 3Q12 was R$56.6 million, for growth of 26.3%
in weighted local currency and 51.3% in Brazilian real. In 9M12, net revenue was R$157.6 million,
growing 35.9% in weighted local currency and 52.2% in Brazilian real.
The number of consultants expanded by 43.3% to reach 105,000 at the end of 3Q12 (increase of
44.9% considering the average number consultants in the quarter).
These operations recorded an EBITDA loss of R$2.8 million in 3Q12, which compares to the EBITDA
(R$ million)
3Q12
3Q11
Change%
9M12
9M11
Change%
Total Consultants - end of period*
(in thousands)
105
73
43,3
105
73
43,3
Total Consultants - average of period**
(in thousands)
104
72
44,9
100
68
46,1
Units sold ­ items for resale
(in million)
4,2
3,9
6,4
12,5
10,4
20,1
Gross Revenues
65,9
43,3
52,0
183,2
120,0
52,7
Net Revenues
56,6
37,4
51,3
157,6
103,5
52,2
Gross Profit
38,8
23,1
68,1
106,6
62,3
71,1
Sales Expenses
(35,3)
(26,3)
34,2
(103,8)
(71,7)
44,7
General and Administrative Expenses
(7,2)
(4,5)
58,9
(18,8)
(12,1)
55,7
Other Operating Income / (Expenses), net
0,1
(0,0)
n/a
0,1
(0,7)
n/a
Financial Income / (Expenses), net
0,1
(1,2)
n/a
0,7
(1,5)
n/a
Earnings Before Taxes
(3,4)
(9,0)
(61,8)
(15,2)
(23,7)
(35,6)
Net Income (Losses)
(3,8)
(10,1)
(62,3)
(16,0)
(25,9)
(38,1)
EBITDA
(2,8)
(7,2)
(61,0)
(13,9)
(20,6)
(32,5)
Gross Margin
68,6%
61,7%
6,9 pp
67,7%
60,2%
7,5 pp
Sales Expenses/Net Revenues
62,4%
70,3%
(7,9) pp
65,9%
69,3%
(3,4) pp
General and Admin. Expenses/Net Revenues
12,7%
12,1%
0,6 pp
11,9%
11,7%
0,3 pp
Net Margin
(6,7)%
(27,1)%
20,4 pp
(10,2)%
(25,0)%
14,8 pp
EBITDA Margin
(4,9)%
(19,1)%
14,2 pp
(8,8)%
(19,9)%
11,1 pp
(*) Positon at the end of the cycle12
(**) Avarage number of consultants in the quarter corresponds to cycles 9 to 12.
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12
loss of R$7.2 million in 3Q11. There was dilution of selling expenses in the quarter, accompanied by
gross margin expansion, which benefitted from initiatives to improve the management of
promotions, 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$20.7
million in 3Q12 (compared to R$17.0 million in 3Q11). The costs of our structure based in Argentina
were influenced by the depreciation of the local currency against the Argentine peso.
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13
conference call
& webcast
PORTUGUESE:
Friday, October 26, 2012
10:00 a.m. (Brasília time)
ENGLISH:
Friday, October 26, 2012
12:00 p.m. (Brasília time)
From Brazil: +55 11 4688 6341
From the USA: Toll Free + 1 855 281 6021
From other countries: +1 786 924 6977
Conference call ID: Natura
Live webcast:
www.natura.net/investidor
investor
relations
Telephone: +55 (11) 4196-1421
Fabio Cefaly, fabiocefaly@natura.net
Tatiana Bravin, tatianabravin@natura.net
Taísa Hernandez, taisahernandez@natura.net
Yakatherine Menendez, yakatherinemenendez@natura.net
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14
balance
sheets
at September 30, 2012 (in R$ million)
ASSETS
Sep/12
Dec/11
LIABILITIES AND SHAREHOLDERS' EQUITY
Sep/12
Dec/11
CURRENT ASSETS
CURRENT LIABILITIES
Cash and cash equivalents
114.2
515.6
Borrowings and financing
1,135.6
169.0
Short-term investments
1,107.1
-
Trade and other payables
566.9
489.0
Trade accounts receivable
676.1
641.9
Payroll, profit sharing and related taxes
212.5
132.0
Inventories
786.3
688.7
Taxes payable
400.0
446.8
Recoverable taxes
170.0
201.6
Other payables
44.0
37.9
Derivatives
65.6
28.6
Total current liabilities
2,359.0
1,274.7
Other receivables
136.5
126.8
Total current assets
3,055.8
2,203.3
NONCURRENT ASSETS
NONCURRENT LIABILITIES
Long-term assets:
Borrowings and financing
1,071.6
1,017.7
Recoverable taxes
155.2
111.2
Taxes payable
258.6
140.5
Deferred income tax and social contribution
204.0
189.6
Provision for tax, civil and labor risks
65.5
65.0
Escrow deposits
378.4
295.8
Others provisions
72.3
44.8
Other noncurrent assets
33.0
29.9
Total noncurrent liabilities
1,468.0
1,268.0
Property, plant and equipment
865.7
800.4
Intangible assets
185.2
162.8
SHAREHOLDERS' EQUITY
Total noncurrent assets
1,821.5
1,589.8
Capital
427.1
427.1
Capital reserves
155.5
160.3
Earnings reserves
541.4
292.5
Treasury shares
(69.0)
(102.8)
Proposed additional dividend
-
490.9
Other comprehensive losses
(4.6)
(17.6)
Total equity attributable to owners of the Company
1,050.4
1,250.2
Noncontrolling interests
0.0
0.0
Total shareholders' equity
1,050.4
1,250.2
TOTAL ASSETS
4,877.3
3,793.0
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
4,877.3
3,793.0
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15
income
statement
for the quarters and nine-month periods ended
September 30, 2012 and 2011
(R$ million)
3Q12
3Q11
9M12
9M11
NET REVENUE
1,586.5
1,381.4
4,470.7
3,920.9
Cost of sales
(455.0)
(413.7)
(1,291.7)
(1,169.9)
GROSS PROFIT
1,131.5
967.8
3,179.0
2,751.0
OPERATING (EXPENSES) INCOME
Selling expenses
(535.3)
(500.3)
(1,574.1)
(1,409.6)
Administrative and general expenses
(231.9)
(164.0)
(633.0)
(507.0)
Management compensation
(5.2)
(2.5)
(15.6)
(9.7)
Other operating (expenses) income, net
(9.5)
4.2
(11.1)
21.0
INCOME FROM OPERATIONS
BEFORE FINANCIAL (EXPENSES)
INCOME
349.6
305.1
945.2
845.6
Financial income
24.9
49.8
119.2
99.6
Financial expenses
(24.4)
(54.3)
(173.8)
(135.3)
350.0
300.7
890.7
809.9
Income tax and social contribution
(112.7)
(99.1)
(286.8)
(269.7)
237.3
201.6
603.9
540.2
INCOME BEFORE INCOME TAX AND
SOCIAL CONTRIBUTION
NET INCOME
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16
cash flow
statements
for the nine-month periods ended
September 30, 2012 and 2011
R$ million
9M12
9M11
CASH FLOW FROM OPERATING ACTIVITIES
Net income
603.9
540.2
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
103.5
79.0
Provision for losses on swap and forward transactions
(37.0)
(12.3)
Provision (reversal) for tax, civil and labor contingencies
5.6
(9.7)
Interest and inflation adjustment of escrow deposits
(16.4)
(38.5)
Income tax and social contribution
286.8
269.7
(Gain) loss on sale on property, plant and equipment and intangible assets
8.1
5.7
Interest and exchange rate changes on borrowings and financing and other liabilities
71.0
48.0
Exchange rate changes on other assets and other liabilities
13.7
(4.5)
Stock options plans expenses
9.2
9.7
Provision for discount on assignment of ICMS credits
-
0.3
Allowance for doubtful accounts
1.0
(6.7)
Allowance for inventory losses
(17.3)
44.7
Provision for healthcare plan and carbon credits
27.4
2.6
Recognition of untimely used tax credits
(9.7)
(13.9)
Recognition of tax credits related to lawsuit
-
(16.9)
1049.9
897.6
(INCREASE) DECREASE IN ASSETS
Trade receivables
(35.3)
96.3
Inventories
(80.3)
(211.9)
Recoverable taxes
(2.6)
(104.5)
Other receivables
(11.6)
(15.5)
Subtotal
(129.7)
(235.5)
INCREASE (DECREASE) IN LIABILITIES
Domestic and foreign suppliers
79.2
103.6
Payroll, profit sharing and related taxes, net
80.4
(1.3)
Taxes payable
26.0
56.3
Other payables
6.1
(13.1)
Payments of provision for tax, civil and labor contingencies
(5.1)
(0.4)
Subtotal
186.6
145.1
CASH GENERATED BY OPERATING ACTIVITIES
1,106.8
807.1
OTHER CASH FLOWS FROM OPERATING ACTIVITIES
Payments of income tax and social contribution
(241.6)
(265.1)
Payments of derivatives
(15.6)
(18.4)
Payment of interest on borrowings and financing
(5.5)
(40.2)
#N/D
NET CASH GENERATED BY OPERATING ACTIVITIES
844.1
483.5
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17

CASH FLOW FROM FINANCING ACTIVITIES
Acquisition of property, plant and equipment and intangible assets
(202.5)
(251.8)
Proceeds from sale of property, plant and equipment and intangible assets
3.1
3.7
Withdrawal (payment) of escrow deposits
(66.1)
(31.0)
Short-term investments
(3,053.3)
-
Redemption of short-term investments
1,946.2
-
NET CASH USED IN INVESTING ACTIVITIES
(1,372.6)
(279.1)
CASH FLOW FROM FINANCING ACTIVITIES
Repayments of borrowings and financing - principal
(158.4)
(321.4)
Proceeds from borrowings and financing
1,113.5
752.5
Payment of dividends and interest on capital
(491.0)
(430.1)
Interim dividends and interest on capital
(363.5)
(332.8)
Acquisition of treasury shares
-
(104.5)
Sale of treasury shares due to exercise of stock options
28.4
0.7
Capital increase through subscription of shares (353,289 common shares at average price of R$39.69)
-
9.0
NET CASH GENERATED (USED) IN FINANCING ACTIVITIES
129.0
(426.6)
Gains (losses) arising on translating foreign currency cash and cash equivalents
(1.9)
0.8
DECREASE IN CASH AND CASH EQUIVALENTS
(401.4)
(221.4)
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
114.2
338.8
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18
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 updated up to the present date and Natura does not undertake to update it in the event of
new information and/or future events.