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March 2017
Agenda
Context, strategies & priorities
Revitalizing direct selling
Digitalization
Retail
Fragrances
2016 Results
Latam
Aesop
Sustainability and Governance
Context, strategies & priorities
BRAZIL LATAM INTERNATIONAL
REPOSITIONING THE NATURA BRAND
REVITALIZING DIRECT SELLING
REVISING THE CATEGORY & BRAND STRATEGY
MULTI-CHANNEL SHOPPING
EXPERIENCE
EXPANDING IN DEVELOPED & DEVELOPING MARKETS
STRENGTHENING OF CFT POSITION IN LATAM
SUSTAINABILITY (Positive Impact)
INNOVATIONOPERATIONS & LOGISTICS
SERVICESDIGITAL
TRANSFORMATIONPEOPLE & CULTURE
EFFICIENCY & PRODUCTIVITY
STRATEGY FACILITATORS
Strategic map
2017 Priorities
Brazil
Fragrances & gifts
Relaunching direct selling
Accelerating digitalization
New Channels
Maintaining Latam momentum
Culture & Organization Program
Revitalizing direct selling
Improve qualification of new recruits
Project Goals
Live the beauty of your choicesPositioning
New language Value Proposition
Brand and Communication
Me with myself
Myself with the world
Myself with others
PROSPERITY
Value Proposition
Natura Beauty Specialists
Channel segmentation
Natura Beauty Entrepreneurs
Natura Beauty Consultants
Natura Beauty Entrepreneurs Micro-entrepreneurs with points of sales
Target public: consumers from B2C income classes
Visual standardization of interior and exterior
Stores located in a high foot traffic areas
Convenience sales with product experimentation, stock on hand and payment means
Aqui retail operations with brand experience
Before After
Natura Beauty Entrepreneurs
Natura Beauty SpecialistsProfessionals connected to the universe of beauty, with higher education levels and ideal profile for selling "core beauty"
Consulting as a career: self-fulfillment and pleasure
Focus on face care and makeup
Unique experience: assistance and experimentation
Exclusive opportunities :
Training in partnership with Anhembi MorumbiUniversity
Independent career development
Demonstration kit and samples
Specific recruitment and selection
Digital tool for service level improvement
36 hours training about make up, face care, fashion, style, business.
Partnership with Anhembi Morumbi University
Certified Training
Daily activities supported by Consulting App with integrated CRM:
Client portfolio management
Customized communication
Synchronized calendar
Check-out system with payment means
After sales functionalities
Service level review by end consumer (under development)
App
Natura Beauty ConsultantsLarge or midsized consultants that dedicate a significant amount of time to direct selling
Reclaim the value of Natura Consulting
Increase average income
Accelerate opportunity for career growth
Improve quality recruiting and initial training
Strength of the relationship
Digitalization
Rede Natura
One of Brazil's largest beauty e-commerce retailers
Diamond Ebit Certification and most admired cosmetics and fragrance store
• 1.6mn consumers registered
• 100K Digital Natura Consultants
• 50% of channel is incremental: Purely digital Natura Digital Consultant
• 2x revenue in 2016 vs. 2015
Natura is a digital business: 99,65% of all orders are captured digitally.
CONSULTING APP
10.2% average productivity gain
270k active consultants
2% average sales growth with activation via
push
Order Capture
Promotions / Digital Magazine
Voice Orders
Payments
NATURA APP (end consumer)
+150k Subscription
25% retention (market average: 18%)
Online shopping
Locate consultants & stores
Augmented reality
Subscription
Differentiated use of information and digital intelligence.
Brazil Retail
Natura Shopping Anália Franco, SP
Natura Stores
AB1 consumers
5 stores in São Paulo in 2016
Scale up in 2017
Makeup and face care
More premium portfolio mix: Ekos, Chronos & Una
Natura Shopping Anália Franco, SP
Drugstores
Sou Line in three drugstore chains, ~3,000 stores, and expansion to other chains in 2017
Faces line in drugstores in the first semester of 2017
Fragrances
Fragrances
Natura is world's tenth largest player and is:
» Leader in fragrances for men in Brazil
» Second in fragrances for women in Brazil
Largest CFT category in Brazil
Source: Euromonitor/ Kantar
Natura Day 2016 [Confidencial]
Sustainable Innovations
Natura FragrancesOur differentials
Quality Our BrandsArt of Perfumery
91 85 75 71 71 81
ESSENCIAL UNA HUMOR
Natura fragrances are equally or more pleasant than international ones
Quality
Acceptance(Top 3 box)
Quantitative research 2.560 interviews
International fragrances
67 66 73 75 71 65 64 63 71
5. Muito mais forte
4. Um pouco mais forte
3. Ideal, como eu gosto
2. Um pouco mais fraca
1. Muito mais fraca
Quality
Intensity throughout the day
Natura fragrances with ideal intensity, in line with or superior to international ones
Quantitative research 2.560 interviews
International fragrances
ESSENCIAL UNA HUMOR
A lot stronger
Slightly stronger
Ideal, the way I like it
Slightly lighter
A lot lighter
Revised marketing strategy
Regional initiatives
Sales force incentives
Portfolio improvement
New style of communication
2017
2016 RESULTS
Consolidated Net Revenue (R$Mn)
Annual DataCAGR 11 to 16: 7.2%
YTD DataChange: -1.6%
LatamBrazil Aesop
Consolidated EBITDA (R$Mn)
Consolidated EBITDA Margin (%NR)LatamBrazil Aesop
1.425 1.512 1.609 1.554
1.496 1.344
453 462
2011 2012 2013 2014 2015 2016 4Q15 4Q16
25,5% 23,8% 23,0% 21,0% 18,9% 17,0%
19,4%20,1%
Annual DataCAGR 11 to 16: -1.2%
YTD DataChange: 2.0%
Consolidated CAPEX (R$Mn)
Lower capex than in prior years, with a focus on supporting growth in Latam, Aesop and expandinginto new channels in Brazil.
LatamBrazil Aesop
25%
62%
13%
Proposal *
Meeting on April 11th, 2017
Sustainability
Crer para Ver product Line
Funding of R$38.2mn in 2016 (+27%)
Natura Consultant Education Program
12,000 beneficiaries between July and December 2016
We are advancing towards 2020 goals:
Indicator 2016 2020
Relative carbon emissions
3.17 Kg CO2/
Kg prod billed
2.15 Kg CO2/
Kg prod billed
% post consumption recycled materials
4.3 % 10.0 %
Cumulative business volume in the Pan-
Amazon regionR$ 972.6 mn R$ 1 bn
Latam
4418
49
122
31
264
206
Argentina Chile Colombia Mexico Peru Latam Brazil
Latam Market
21%
9%
9%30%
7%
24%22,7%
15,4%
34,5%
23,8%
35,4%
24,9% 25,2%
Argentina Chile Colombia Mexico Peru Latam Brazil
Sources: Euromonitor 2015, IMF WEO Oct 2016 (2016f data)
Beauty and Personal care market in Latam is almost as big as in Brazil (~US$ 30bn)
% Direct Selling in Beauty and Personal care market is similar in Brazil and Latam
Population (Mn) GDP per capita
Argentina
ChilePeru
MexicoColombia
12,4 12,9
5,6
8,7
5,7
8,7 8,6
Argentina Chile Colombia Mexico Peru Latam Brazil
487
164
Latam Brazil
Natura Latam
Market Share CFT Market Share Natura CFT Direct Selling
Population / Natura Consultant Productivity / Natura Consultant (Items/NC)
2,5%3,0%
3,5%
4,1%
2012 2013 2014 2015
∆ 12-15:
+1,6pp
Sources: Euromonitor 2015, IMF WEO Oct 2016 (2016f data)
17%
45%
Latam Brazil
~200 to ~900
11,113,1 12,3 12,5 13,4
21,6 22,320,2
17,615,3
2012 2013 2014 2015 2016
Latam Brazil
1
53 65
170
248
53 58
9,1%11,1%
0,1%
5,4% 5,6%
9,1%
12,5%
-0,1
-0,05
0
0,05
0,1
2012 2013 2014 2015 2016 4Q15 4Q16
-
50
100
150
200
250
300
350
EBITDA Latam
EBITDA (R$ Mn) EBITDA Margin
Natura Latam
Brand PreferenceProfitability
Latam Preference27.3%
Strong construction of attributes of brand value and performance combining technology and nature
Natura is ready to sustain strong pace growth
- Operation and logistics services (34% regional production)
- Local team and positive reputation
- Multi-channel shopping experience
Source: Brand Essence (IPSOS) 2016* Countries with 2015 data
2016
27% 1st
35%* 1st
28% 1st
11%* 5th
5%* 6th
-
2,0
4,0
6,0
8,0
10,0
12,0
14,0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Unilever
P&G
L'Oréal
Colgate
Avon
Natura
Belcorp
BeiersdorfJafra
J&J
Natura 2021
Ambition
#1 DS#4 CFT
1,5%
10,0%
12,7%
7,5%
4,1%
3,1%
6,3%
2,1%2,8%
Source: Euromonitor - Beauty and Personal Care Market Sizes - Historic Retail Value RSP Current Prices | Fx Exchange Rates
Natura
Competitors
7,1%
Total Latam Market Share
Aesop
Aesop Saint-Sulpice, Paris
Aesop
Finest quality skin, hair and body care products
Plant-based and laboratory-made ingredients
Design is essential signature stores
Great buying experience and loyalty
Double-digit growth in same store sales
Aesop Saint-Sulpice, Paris
138 242
432
580
171 192
2013 2014 2015 2016 4Q15 4Q16
+76%
+78%
+12%
+34%
26 53
90 115
55 56
32,3%29,0%
19,0% 21,9% 20,9% 19,8%
-0,2
-0,1
0
0,1
0,2
0,3
-30
20
70
120
170
220
2013 2014 2015 2016 4Q15 4Q16
EBITDA (R$ Mn) EBITDA Margin
AesopNet Revenue (R$ Mn)
8098
135
176
2013 2014 2015 2016
Signature Stores
14 18 20*Countries:
* Oceania: Australia, New Zealand | Asia: Hong Kong, Malaysia, Singapore, Taiwan, Macau, Japan,Korea | Europe: France, Germany, Switzerland, Italy, Norway, Sweden, Denmark, United Kingdom| North America: USA, Canada | South America: Brazil
10
EBITDA
+85 department
stores
Aesop Stores by region
50
48
42
34
2
EuropeAsiaNorth AmericaOceaniaLatin America
Sustainability andGovernance
Sustainability
Sustainable Innovations in fragrances: 100% organic alcohol; 20% recycled glass; 100% recycled PET for refills
New Technologies and Traditional Communities Project
Launch of Natura Amazonia Challenge: Businesses for the Standing Forest
Carbon Neutral Program
EP&L Project in implementation (Environmental Accounting):
Innovation in business performance analysis by effective TBL evaluation
Recognition in 2016
Época Empresas Verdes case Ekos Ucuuba
Exame Sustainability Guide
Corporate Sustainability Index (ISE)
20 most sustainable companies corporations in the world (Corporate Knights)
Robust and Consolidated Governance Model
One of the first companies listed on Novo Mercado segment
Board of Directors, created in 1998, currently has 9 members, 5 of which are independent
Luiz Seabra, Guilherme Leal, Pedro Passos, Carla Schmitzberger, Giovanni Giovanneli, Marcos Lisboa, PlínioMusetti, Roberto de Oliveira Marques and Silvia Lagnado
Support committees
Corporate Governance
Audit, Risk Management & Finance
Strategic
People & Organizational Development
Largest publicly traded B-Corporation
Component of major stock indexes
Corporate Governance
Key takeaways
Brazil recovery
Direct Selling transformation
Multi-channel experience focused on end consumer
Ready to offer distinct service level
Cost control and focus on cash generation
Three businesses at different development stages
Thank you.
