“Refocused, deleveraged and leaner, Natura &Co will now be able to fully concentrate on its core relationship selling expertise in Latin America while also continuing the optimization of Avon International’s footprint,” said Fábio Barbosa, Group CEO of Natura &Co. 

Barbosa described the deal as “another important step in Natura &Co’s new development cycle to unlock significant value,” and analysts expect proceeds from the sale to create significant dividends for stockholders. 

The post Natura &Co Sells The Body Shop for $254 Million   first appeared on Direct Selling News.

Consolidated gross profit during the quarter reached $1.01 billion, posting a gross margin improvement year-over-year in all business units. Consolidated adjusted EBITDA was $154 million with a margin of 10%.  

The company ended the quarter with net cash of $143 million. 

“Avon International posted broadly stable top line and further margin improvements, reaching high-single-digit adjusted EBITDA margin,” said Fábio Barbosa, Group CEO of Natura &Co. “The proceeds from the sale of Aesop, closed in late August, enabled us to quickly advance in our liability management plan, with more than half of our debt already prepaid by the end of the quarter. This is an important step to unlock sustainable value for our investors and deliver on our financial priorities of maintaining a strong capital structure, strict financial discipline on costs and expenses, and boosting cash conversion. On the latter, we reached a neutral cash generation this quarter despite the normal seasonal cash consumption to build up inventories for the holiday season. Furthermore, marking the third year of our sustainability vision, after having made substantial progress towards our goals set in 2020, our approach has evolved. We have realigned our metrics, and targets to address the pressing concerns of our time. We have been a partner of the Union for Ethical Biotrade (UEBT) for over fifteen years and together we will work towards Natura &Co’s adoption of regenerative practices to deliver even more positive impact. Finally, we recently announced updates related to The Body Shop sale process and we will keep the market informed of any relevant news. This is another important step to continue to streamline our business, a journey started in the second half of 2022. We are confident that our enhanced capital structure, combined with a laser-focus strategy on our key priorities, will allow us to unlock significant value for our shareholders in the future through both topline growth and margin expansion.”   

The post Natura &Co Posts $1.54 Billion in Q3 2023 Net Revenue   first appeared on Direct Selling News.

In April, Natura &Co entered into an agreement to sell Aesop to L’Oréal as part of its efforts to strengthen and deleverage its balance sheet and focus on further optimization of Avon International’s footprint and integration in Latin America. 

The company said it would not guarantee that the exploration of strategic alternatives for The Body Shop would result in a transaction. 

The post Natura &Co Considers Selling The Body Shop  first appeared on Direct Selling News.

The company saw a net loss of $146 million with a consolidated adjusted EBITDA of $151 million. Continued challenges with The Body Shop, which saw a 12.5% decline in net revenue, as well as an expected drop in Avon’s Home & Style category in Latam offset progress. 

“Natura & Co’s second-quarter performance continued to show the improvement already observed in Q1, with low-single digit top line growth at constant currency and a significant improvement in adjusted EBITDA margin,” said Fábio Barbosa, Natura &Co Group CEO. “This was mainly driven by gross margin, benefiting from mix effects, partially offset by investments and inflation. We look forward to delivering our strategy, continuing to position Natura &Co on the course towards strong profitability and low leverage, allowing us to pursue meaningful and sustainable growth in the future.” 

The post Natura &Co Posts Q2 2023 Net Revenue of $1.5 Billion   first appeared on Direct Selling News.

Net revenue for Avon International and The Body Shop both declined more than 20% in BRL during the quarter and 9.9% and 8.4% at constant currency, respectively. For the full year, Avon International posted a net revenue decline of 22.9%. The Body Shop also saw a significant decline in full year net revenue of 24.3%. 

Aesop revenues were more stable, with fourth quarter net revenues that saw a 2.1% decline in BRL but an 18.2% increase in constant currency. For the full year, Aesop net revenues experienced a 4.6% increase in BRL, or 21% increase at constant currency. 

Although the company wields an omnichannel strategy, traditional direct selling still generates 70% of the company’s overall net revenue. Retail was the second greatest revenue generator at 19%. 

“We started 2022 navigating in a challenging macroenvironment, which worsened with the war in Ukraine, and uncertainty surrounding the performance of a few business units after a post-pandemic change in consumer behavior,” said Fabio Barbosa, Natura &Co Group Chief Executive Officer. “In this environment, we decided in mid-2022 to reassess the group’s growth model to enter a new stabilization cycle. Important changes were carried out, such as a stronger focus on profitability and cash conversion (with incentives adjusted accordingly), a revision of the cost structure and the role of the Holding company, alongside important revisions in our global footprint in order to position the business for success going forward.” 

The company also announced its plans for restructuring the brands to maximize shareholder value and streamline efficiencies within key retail channels. 

“Structural steps to create sustainable shareholder value are in motion in all our brands,” Barbosa said. “At Natura &Co Latam, we are accelerating the integration of Natura and Avon in order to capture the full benefits of the combination in the region. At Aesop, we are evaluating strategic options aiming to improve the company’s capital structure. At Avon International, we are continuing to optimize its geographic footprint in order to concentrate on profitable markets while reducing the cost structure. At The Body Shop, we are rightsizing the business, focusing on efficiencies and the core retail model in the face of the challenging channel mix changes it has experienced.” 

The post Natura &Co Posts Net Loss of $169.7 Million in Q4 2022  first appeared on Direct Selling News.

The group’s digital presence had a significant impact on sales. Online, ecommerce, social selling and relationship selling through digital apps accounted for half of total net revenue, a slight increase from last year’s third quarter. Active Avon International representatives who logged in to the Avon On app at least once in the last three campaigns rose by almost 20% in the third quarter from last year. 

Avon International’s net revenue was down by 8.1% in the third quarter, which the company attributes to conflict in Ukraine and low consumer confidence in Europe. As part of its efforts to improve profitability, the company is relocating its R&D operations to Brazil and Poland and outsourcing its IT infrastructure and services to global technology partners. 

The Body Shop’s net revenue was down by 19.5% in the third quarter as the organization faced what it described as “post-lockdown channel rebalancing.” The company announced plans to implement strict cost containment, balancing inventory levels among head franchisees and continued store footprint optimization. The company’s new Workshop store is now showing a 15 percentage point bump in sales as compared to the traditional model. 

Aesop’s net revenue increased by 21.5%, with all regions except Europe seeing double-digit growth. The company is still in the midst of a comparative study to decide between an initial public offering of Aesop or a spin-off to separate Aesop from Natura &Co. 

“Natura &Co posted results in line with our expectations, with top line trending better, while margins continued to be pressured by the challenging macroeconomic environment marked by high inflation, lower discretionary spending and foreign exchange impacts,” said Fabio Barbosa, Group CEO of Natura &Co. “Natura &Co Latam posted solid performance, notably the Natura brand and the Avon CFT segment in the region. Aesop posted another consistent quarter of growth while Avon International showed another sequential improvement in results and in key channel indicators. On the other hand, The Body Shop continued to post challenging results amid channel decline in the At-home segment and slower franchise recovery. The Group reorganization that we announced last quarter has made good progress. We have significantly reduced operating costs at the Holding and continue to implement important steps to give each brand more autonomy and accountability. Other structural steps are also in motion: We are accelerating the integration of the Avon and Natura businesses in Latin America, starting in 2023 with Peru and Colombia, quickly followed by Brazil. We are continuing to optimize Avon International’s geographic footprint, with significant changes in markets such as India and Saudi Arabia. We also announced the closing of Avon’s Suffern R&D facility in the US and the outsourcing of Avon’s IT infrastructure. The Body Shop has taken steps to right size its organization and, as announced in the Material fact published on October 17th, we continue to analyze strategic alternatives for Aesop.” 

The post Natura &Co Posts $1.69 Billion in Q3 2022 Net Revenue  first appeared on Direct Selling News.

Digitally-enabled sales accounted for a significant portion of the company’s total sales (49.5%) and were above pre-pandemic levels at all business units. 

Avon International’s net revenue dipped by 11% in the quarter, mainly due to the ongoing conflict in Ukraine and diminishing purchase power in European households. The new commercial model that has been implemented in 16 markets did result in higher productivity and activity and a stabilized number of representatives outside of Europe. 

Similarly, The Body Shop’s net revenue was down 11.8% in the second quarter, but store revenues were up compared to the same quarter last year. The company’s leadership is now focused on leveraging recent investments to drive store productivity, as well as store footprint optimization, margin improvement and a detailed review of SG&A costs. 

Aesop had a strong quarter, with net revenue increasing 24.5% and all markets delivering double-digit growth. 

“In my first few weeks as Group CEO, I have focused mainly on two priorities: the first is redesigning Natura &Co’s organizational structure to make it lighter and leaner,” said Fabio Barbosa, Group CEO of Natura &Co. “At this stage, we have mapped significant savings at the holding company level. If the company had implemented those changes last year the impact would have been an annualized reduction of at least 40% in recurring corporate expenses. Other changes and estimated savings will be announced later. The second is a review of the governance model and ways of working within Natura &Co, with the holding company strongly concentrated on defining key performance indicators, monitoring and tracking the performance of more autonomous brands, leading the allocation of resources within the group and continuing to promote our 2030 Commitment to life sustainability vision. We are confident that a leaner and a more agile structure, built on a strong foundation of accountability for results, will empower the business units to respond with agility to their current strategic and market challenges. At the same time, we are strongly focused on improving the fundamentals of our underperforming businesses, which we regard as our principal challenge and main upside driver. Though we expect our businesses’ revenues to trend better in the second half of the year, we believe the challenges in the macro environment will persist and our margins will remain pressured in the short term. In this context, our clear and immediate priority is to focus on margins and operational cash-flow, and the teams at all our brands and businesses are mobilized and incentivized on those clear goals.” 

The Group ended the quarter with a net cash position of $824.3 million. 

The post Natura &Co Reports Net Revenue of $1.6 billion in Q2 2022  first appeared on Direct Selling News.

The Bravo Global Good Award award honors companies that take a proactive approach to environmental, philanthropic and social responsibility issues. In this, its second year of existence, the DSN Awards Panel chose to recognize the incredible work being done by Natura &Co.

Natura &Co is a group of four purpose-driven businesses, Avon, Natura, The Body Shop and Aesop, that believes that business can—and should—be a force for good. That’s why in June 2020, they launched their Commitment to Life Sustainability Vision to do their part in tackling some of the world’s most urgent and challenging issues including:

• Addressing the climate crisis and protecting the Amazon;
• Defending human rights and being what they call “human kind;” and
• Embracing circularity and regeneration.

They strive to always balance profit with people and the planet. They also believe that what gets measured gets done, so these ambitious goals are diligently measured against 31 metrics and targets to ensure Natura &Co is a company that always gives back to the world more than it takes.

We recently sat down with Ana Costa, Vice President of Legal and Government Affairs for Natura &Co Latin America to get her thoughts on how their commitment to be a force for good in the world is helping their business and the planet in equally impactful ways.

Creating Opportunity for Everyone

One integral part in Natura &Co’s overarching mission to make the world a better place through its Commitment to Life is to defend human rights and be “human kind” by creating stringent metrics surrounding inclusion and diversity.

“We believe that a truly inclusive workforce focuses on all aspects of culture, including gender, but also beyond it,” explained Costa. “And with diversity comes greater innovation and creativity; a breadth of skills and perspectives; and higher employee morale. These are benefits that every business should welcome.”

When it comes to women in leadership, Natura &Co’s aim was to go beyond the UN SDG goal of 30 percent of women in leadership, increasing their goal to 50 percent by 2023. They hit that mark two years early in 2021, reaching a 50.4 percent balance.

But Natura &Co plans to go even farther. As Costa shared, “We have also committed to delivering a living wage for our people in more than 100 countries by 2023 and are working towards 30 percent inclusion of underrepresented groups across our management levels. This includes six factors: ethnicity, the socioeconomically disadvantaged, sexual diversity, gender identity and physical or mental disability.

Protecting the Environment

Natura &Co. recognizes the importance of protecting the planet and doing its part to maintain the highest standards of sustainability, integrity and transparency. That is why the company made a bold commitment to become Net Zero across their entire value chain.

To do this, they have pledged to set science-based targets across Scopes 1, 2 and 3 by 2022. These goals—both short and long-term—are in line with the Science Based Targets Initiative. “We’ve been working with the Carbon Trust to consolidate our organizational footprints,” Costa explained. “Throughout 2021, our first step to address our ambition to become Net Zero was to create a task force consisting of people from the group and the brands to calculate our GHG (greenhouse gas) inventory and create a GHG inventory baseline for Natura &Co.”

Additionally, Natura &Co is the world’s largest B Corp which means they are certified as a company that meets the highest standards of social and environmental performance, transparency and legal accountability to balance profit and purpose.

“Being a B Corp means striving for continuous improvement, which is what we all will need to do to create a fairer, more sustainable world. We will never stop reaching higher and going further to generate positive impact,” Costa said.

Making a Difference

Natura &Co’s commitment to being a positive force in the world—both for the environment and for human rights—is impressive and makes them a deserving recipient of the Bravo Global Good Award. Costa accepted the award on behalf of the company via video during the DSN Global Celebration.

“Our channel has proven to be more resilient and relevant than ever before, showing that direct selling can make a great contribution and difference to our society,” she said. “Receiving the Global Good Award is proof that Natura &Co is on a good path. We’d like to express our sincere gratitude and honor at receiving this award. Thank you!”

From the June 2022 issue of Direct Selling News magazine.

The post Natura &Co / Creating Real and Lasting Change first appeared on Direct Selling News.

The company’s U.S. stores will receive the first refill stations, with the goal to equip 49% of all U.S. locations by the end of the year. By the end of 2022, the company plans to have available refill stations in roughly half of its store locations across the country, and will serve from six to twelve products, depending on store size. 

“The foundation of The Body Shop’s environmental activism was born out of ideas like these, when our founder, Dame Anita Roddick, refilled her first bottle out of necessity in 1976,” said Hilary Lloyd, Vice President of Marketing and Values, North America. “Our customers have been eagerly awaiting for refills to return to The Body Shop. We’re thrilled to be embracing a circular economy approach and provide this sustainable alternative.” 

The post The Body Shop Launches In-Store Refill Program to Support Sustainability Initiatives first appeared on Direct Selling News.

“We spent the past few months talking to our shareholders and potential investors, and the conclusion is pretty clear: the U.S. listing makes sense strategically, but maybe timing isn’t right,” said Chief Executive Officer Roberto Marques. “We’ll assess the appropriate moment to resume it.” 

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