Another quarter of improved margins driving turnaround on profitability at Natura &Co

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USA – English

BRAZIL – Portuguese

Fiscal Year registered positive net cash of BRL 1.7 billion
Net income reached BRL 3.0 billion, of which BRL 979 million will be distributed as dividends

SÃO PAULO, March 12, 2024 /PRNewswire/ — Natura &Co’s (B3:NTCO3) 2023 financial results, released today, reflect the benefits of a strategy defined and implemented 18 months ago, to prioritize profitability and cash conversion versus revenue growth, integrate the Natura and Avon brands in Latin America, and divest non-core assets to deleverage and simplify its corporate structure.

Natura &Co’s 2023 consolidated net revenue reached BRL 26.7 billion in the year, up 3.5% vs 2022 in constant currency (CC) and down 8.5% year-on-year in Brazilian Reais (BRL). Natura brand posted strong growth in Latin America, led by Brazil with revenues up 8.6% YoY, partially offset by expected reductions in Avon Latam with the rollout of Wave 2 in the region, and in Avon International related to decrease in consultants and the portfolio optimization strategy. At the same time, both brands saw improvements in the expense structure while noting the transformational savings recorded at Avon International.

Improved profitability is principally attributed to the expansion of gross margin that reached 63.8% in 2023, up 410 bps vs. 2022, driven by effective pricing strategies, product mix enhancements and portfolio optimization, coupled with reductions in general and administrative expenses. Adjusted EBITDA reached BRL 2,7 billion, and adjusted EBITDA margin expanded 310 bps YoY, showing growth versus prior year in every quarter. These results reinforced the consistent execution of the financial and operational strategy throughout the year, even taking into consideration the Argentinean hyperinflation accounting impacts in the fourth quarter.

Net income totaled BRL 3.0 billion in 2023, an improvement from a net loss of BRL 2.8 billion in 2022, boosted by the proceeds from the USD 2.6 billion sale of Aesop concluded in August. These proceeds contributed to the Company’s solid year-end net cash position of BRL 1.7 billion and the debt-to-EBITDA ratio of -0.79x (vs 3.5x at the end of 2022) after paying ˜60% of its debt.

Fabio Barbosa, Group CEO of Natura &Co, commented: “2023 marked a pivotal chapter in the Company’s history, setting the stage for the ambitious horizons we aim to reach in 2024. Notwithstanding a volatile macro environment in Latin America, we kicked-off Wave 2, our most important strategic project aiming to combine Avon and Natura brands in the region. Progress in Brazil, Peru and Colombia is underway, and the lessons learnt allowed us to implement a softer integration in Chile in early 2024.

On our corporate strategy, we delivered a leaner holding structure as the Business units operate with more autonomy. Our simplification agenda has progressed markedly, thanks to the divestments of Aesop and The Body Shop, which allowed us to pay our debt and end the year with a strong net cash position. The positive free cash flow to firm, alongside our much stronger balance sheet, allowed us to start moving to a more optimal capital structure, and as a result we are announcing BRL 979 million in dividend payments for this year.

Recognizing Natura &Co’s social achievements, the Company is proud to have reached its goal of providing a living wage for all employees across Natura &Co. This commitment extends beyond the notion of a minimum wage, embracing a comprehensive understanding of a dignified life. Our approach reflects a deep commitment to improving the quality of life for our employees and their families, thereby contributing to the construction of a more equitable society. Natura &Co also maintained its commitment to closing its pay gap between men and women for the whole Group.

We are encouraged with the positive results from the strategy set in 2022, but we must continue evolving that strategy. Margins and cash remain as priorities in the short term, paving the way for further investments in brands and technology. In 2024, capital allocation will continue to be a critical driver for future value creation, with a focus on investments in key growth markets and projects. We continue to expect volatility in top-line, but with margin improvements in the full-year, particularly ex-Argentina.”

Subsequent Events

In another step towards simplifying the corporate structure, Natura &Co announced in January 2024 the ADR NYSE delisting, and in February 2024, the Company released a material fact announcing the study of a possible separation of Natura &Co Latam and Avon, unlocking the full potential of both companies. The Company will keep the market informed as these studies evolve.

The full earning report and financial statements can be accessed at

About Natura &Co

Natura &Co is a global purpose-driven group uniting Natura and Avon brands. We connect more than 200 million clients worldwide, engaging them through 7 million dedicated Consultants and Representatives, 900 stores and franchises, and 22,000 employees. 

We believe in promoting real positive economic, social, and environmental impact. We believe that the world does not need another big company. The world needs symbols of change capable of blazing new trails and inspiring others to follow. We believe in the power of cooperation, co-creation, and collaboration for a better way of living and doing business. 

We are Natura &Co. 

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended, or an exemption therefrom. This communication may contain forward-looking statements which reflect Natura &Co’s current view on future events and financial and operational development. Words such as “intend”, “expect”, “anticipate”, “may”, “believe”, “plan”, “estimate” and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development and the actual outcome could differ materially from the forward-looking statements. Any forward-looking statements contained in this communication speak only as at the date hereof, and Natura &Co does not assume or undertake any obligation or responsibility to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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