Natura &Co Natura &Co: A transformational com Acionistas... · 2013 2017 1969 Page 4 A step-change:...

Natura &Co:A transformational journey

to unlock value

1

Natura &Co:A transformational

journey to unlock value

April 20, 2018 – São Paulo

Presentation

Q&A

Brunch

Closing remarks

Agenda

Welcome Coffee09:30

10:00

11:00

12:00

13:30

Building a new group – Roberto Marques, Executive Chairman of the Board

Governance and results– Marcel Goya, Financial and IR director

Taking Natura to the next level - João Paulo Ferreira, CEO Natura

The Body Shop: Transformation underway - David Boynton, CEO The Body Shop

Aesop: Poised for further growth – Michael O’Keeffe, CEO Aesop

Mobilization for education – David Saad, President of Instituto Natura

1

Building a

new group

Roberto Marques

Executive Chairman of the Board

2013

2017

1969

A step-change: From Natura to Natura &Co

Aesop

acquisition

Leading position in Brazil

and successful expansion

across Latin America.

First steps

in internationalization

and multichannel expansion

A global, multibrand,

multichannel,

purpose-driven Group

Creation of Natura –

Passion for cosmetics

and relationships

The Body Shop

acquisition

community

collaboration

co-creation

connection

The power of the co_

economic & social & environment

what & why & how

the big & the small

the long & the short

The power of the &

A new corporate identity for a new multibrand group

1 2

34

Multibrand model

Leveraging group scale

Three empowered iconic brands

Distinct value proposition per brand

Mantaining strong brand autonomy

Expand Natura’s international

footprint and grow TBS in Latam

Capture synergies

A clear financial strategy focused on

profitable growth, cash generation

and deleveraging

Solid corporate governance, focused

on value creation and commitment

to ethical business practices

Multichannel growthin multiple geographies

Innovation and sustainability

Capitalize on the strengths of each brand• Direct sales• Broad store network (70 countries) • E-commerce• Wholesale

Attract new connected customers

Cruelty free products, sustainably sourced

Fair trade-based, collaborative relationships with

supplier communities

Innovation-driven product porftolio

Four key drivers to create value

1

“Through our corporate behavior,

the quality of the relations we

establish and our products and

services, we will be a group of

brands with strong local and global

expression, identified with the

community of people committed to

building

a better world."

“Enrich Not Exploit™. For us, this

means enriching people as well as our

planet, its biodiversity and resources.

We are committed to working fairly

with our farmers and suppliers and

helping communities to thrive. Our

products enrich, but never make false

promises and are never tested on

animals."

“We value all human endeavors undertaken

with intellectual rigor, vision, and a nod to

the whimsical. Every Aesop product is

made with the same attention to detail we

believe should be applied to life at large,

taking into consideration a diversity

of needs as well as seasonal and

environmental conditions.”

We are committed to generating positive economic, social and environmental impact, delivering value in all

businesses, brands and geographies

Three distinct businesses sharing a common vision

bem estar bemNourish through

intelligent interactionsEnrich not Exploit™

93%

1%

5% 1%

2016

100%

2012

Natura Natura + Aesop Natura + Aesop + TBS (proforma)

64%4%

23%

7%

2%

2017

2

2017

Direct Selling

E-commerce

Retail

Franchises

Wholesale

1.7 million

consultants

26

owned stores

3,049

stores

1,950

franchised

1,099

owned 209

owned stores

99

department

storeschannel

breakdown2%

digital sales

+

555,000

consultants

using the app9%

digital sales

10%

digital sales

An expanding multichannel presence evolving towards omnichannel

66%25%

9%

48%

18%

34%

2

Pre-TBS

acquisition

Net sales by geography(2017)

Post-TBS

acquisition

Proforma

Brazil Latin America Others9countries

68countries

23countries

A global footprint: From 7 countries in 2012 to 72 in 2017

3

Natura joining forces

with TBS to make

its Forever Against

Animal Testing

campaign global

and more powerful

Natura certified

since 2014.

Aesop and TBS on the

road to certification

Support for local

communities by

each of the

three brands

Joining forces to promote a common vision

4

Board of Directors

serving the entire group

Group Operating Committee formed

to capture synergies, allocate resources

and carry out consolidation

Natura, TBS and Aesop are run

autonomously, each with a CEO

and its own Executive Committee

Roberto Marques

Executive Chairman

Paula Fallowfield

Human Resources

João Paulo Ferreira

Natura CEO

David Boynton

TBS CEO

Michael O’Keeffe

Aesop CEO

Robert Chatwin

Chief Transformation

Officer

Josie Romero

Supply Chain

Itamar Gaino Filho

Legal and Compliance

Roger Schimid

Innovation and Sustainability

José Filippo

CFO

Networking organization

Moacir Salzstein

Governance

A governance and management structure combining scale and autonomy

4

Turn around TBS and accelerate

its growthin Latam

Expand Natura’smultichannel

transformationand international

footprint

Continue Aesop’sgrowth

momentum andexpantion

Looking ahead: Natura &Co’s priorities to unlock value

A clear financial strategy focused onprofitable growth,

cash generation anddeleveraging

Establishing

governance

and culture

Driving value creationGetting the most out of

the Group

Capture Natura Group synergies

Strengthengovernance, international capabilities &

processes

Governance and results

Marcel Goya

Financial and IR director

1. The management's accounts and financial statements for the year ended 31 December 2017;

2. Capital budgeting for 2018, allocation of net income for the fiscal year ended on 31 December 2017

and ratification early distributions of dividends and interest on own capital;

3. Election of the Board of Directors, with a mandate until 2019;

4. Overall remuneration of the directors of the company to be paid until the completion of the AGO from

2019.

1. Amendment of the bylaws for harmonization with the new regulation of the new market and social

status consolidation.

AGO and AGE approvals

In AGE were approved

In AGO were approved

• One of the first companies to join the Novo Mercado

• First publicly traded company B

• Integrated annual report since 2002(www.natura.com.br/relatorioanual/2017)

• Board of Directors since 1998, currently has 9 members,

being independent 5. Committees:

_Corporate Governance

_Audit, risk management and finance

_Strategic

_People and Organization development

_Group Operations

46%

24%

21%

5%

3%

40%

60%

6% 15% 79%11,137 287 607

Shareholding structure

% em circulaçãoNº de investidores

6%15%79%

Pessoa Física Pessoa Jurídica Brasil Pessoa Jurídica Exterior

46%

24%

21%

5%3%

AMERICA DO NORTE

EUROPA

BRASIL

ASIA

OUTROS

Natu3 vs. BOVESPA since the IPO

18

Shares Performance

10.880,1 11.667,5

2016 2017

7,912.6

9,852.7

2016 2017

24.5%

7.2%

ReportedPro forma

(in constant currency)

Solid increase in net revenue

R$ million

10.880,1 11.667,5

2016 2017

Natura TBS Aesop

1,565.51,783.2

2016 2017

1,343.6

1,741.9

2016 2017

29.6%13.9%

Robust improvement at EBITDA

Reported

Pro forma

(in constant currency)

R$ million

10.880,1 11.667,5

2016 2017

Natura TBS Aesop

Free cash generation (reported))

617.2

242.5

2017

469.9

2016

859.7

1.4x

3.5x

3.0x

1.4x

End 2016 Q3-17 End 2017 End 2021

PERT (regularization)

3.6x guidance

Strong cash generation and rapid de-leveraging

R$ million

Free cash-flow Debt

Taking Natura to the

next level

João Paulo Ferreira

CEO Natura

E n c o n t r o c o m A c i o n i s t a s | N A T U R A

3



•

•

•

•

•

•

•

•

•

•

•

•

•

•


Silver Gold DiamondSeed Bronze

Silver Gold Diamond

v



•

•

•


Source: ¹Ebit popular vote | ²Source: Similarweb. Cosmetics segments (natura.com.br+natura.net),

jan out nov dez jan out nov dez jan out nov dez


Main competitor

21



Q4-12 Q4-13 Q4-14 Q4-15 Q4-16 Q4-17

(R$ milhões)


19.3%

22.6%

12.5%

13.8%17.1%

19.8%

EBITDA Margin (%NR)

Constant exchange rates

The Body Shop:

Transformation

underway

David Boynton

CEO The Body Shop

ICONIC BRITISH BEAUTY BRAND

• 22,000 PEOPLE

• 68 COUNTRIES

• 3,049 STORES

• 400 GLOBAL TRAVEL

RETAIL LOCATIONS

BUSINESS AS

A FORCE FOR

GOOD

A TRULY GLOBAL BRAND

NORTH AMERICA2 COUNTRIES

COMPANY OWNED

257 STORES

EUROPE,

MIDDLE EAST

& AFRICA47 COUNTRIES

12 COMPANY-OWNED

35 HEAD FRANCHISE

1,489 STORES

ASIA

PACIFIC16 COUNTRIES

3 COMPANY-OWNED

13 HEAD FRANCHISE

1,127 STORES

LATIN AMERICA3 COUNTRIES

COMPANY OWNED

176 STORES

OUR MOST-LOVED PRODUCTS

GINGER SHAMPOO

400ML

HIMALAYAN

CHARCOAL

FACIAL MASK

HEMP HAND

PROTECTOR 100ML

DROPS OF YOUTH™

YOUTH CONCENTRATE

50ML

TEA TREE

OIL 20ML

SHEA BODY

BUTTER 200ML

1 2 3 4 5 6

DROPS OF YOUTH™

LIQUID PEEL

DROPS OF YOUTH™

YOUTH

CONCENTRATE

30ML

DROPS OF YOUTH™

DAY CREAM 50ML

ALMOND MILK

& HONEY BODY

BUTTER 200ML

7

TEA TREE OIL

10ML

8 9 10 11 12

TEA TREE SKIN

CLEARING FACIAL

WASH 250ML

51

IMPROVING PERFORMANCE

GROWTH IN REVENUE AND EBITDA IN 2017

Net revenues1

(Constant currency £M)

EBITDA 1

(Constant Currency £M)

777.8 794.9

2016 2017

6166

2016 2017

8.6%

1 Pro-forma: includes financial performance prior to the acquisition

• First EBITDA growth since 2013

• Clear opportunities for future growth

2.2%

5823

9

10

Own Store Franchisee

E-commerce Others

32

29

12

9

85 5

Body Care Skin Care GiftsMake up Fragrance Hair CareOthers

2022TRANSFORMATION

UNDERWAY

1REJUVENATE

BRAND

REVITALISE THE BODY

SHOP PURPOSE AND

BRING IT TO LIFE FOR

CUSTOMERS

REDUCE PROMOTIONAL

INTENSITY & IMPROVE

PRICING ARCHITECTURE

RESET CATEGORY

STRATEGIES, EVENT

MANAGEMENT AND

STOCK MANAGEMENT

SECURE THE SUCCESS

OF BODY YOGURT AND

CHRISTMAS

3ENHANCE

OMNI-CHANNEL

DRIVE ECOMMERCE IN

EXISTING AND NEW

MARKETS

DEFINE AND DRIVE THE

GLOBAL CHANNEL

STRATEGY INCLUDING

WHOLESALE

INVEST IN CRM &

MARKETING TO

INCREASE TRAFFIC

2OPTIMISE

RETAIL OPERATIONS

TURN AROUND THE US

TURN AROUND

GERMANY, DENMARK

AND SWEDEN

RENEW STORE

FOOTPRINT

ENTER NEW HEAD

FRANCHISE MARKETS

BOOST LATAM GROWTH

CREATE A WINNING

IN-STORE CUSTOMER

EXPERIENCE

4IMPROVE

OPERATIONAL EFFICIENCY

REDUCE OPEX THROUGH

INDIRECT AND DIRECT

SAVINGS

INCREASE CAPEX SPEND

EFFICIENCY

5RE-DESIGN

ORGANISATION

STRENGTHEN CULTURE

AND TALENT

RE-DESIGN THE

OPERATING MODEL TO

ENABLE THE STRATEGY

8.4%10-11%

12-14%

61 61 61

21 - 25 21 - 25

41 - 4982 - 86

123 - 135

2016 A 2019 E 2022 E

WE AIM TO DOUBLE EBITDA TO £123M BY 2022

2016 EBITDA

baseline

Cost improvement

Topline growth

EBITDA margin

Expected EBITDA evolution £M

1 Based on December 2017 rate of 0.75 £ for 1 US$

1

CONCLUSION: THREE KEY GOALS

Deliver the transformation plan1

2

3

Drive sustainable triple bottom line

growth

Regain The Body Shop´s activist voice

Aesop: Poised for further

growthMichael O’Keeffe

CEO da Aesop

Aesop: Poised for further growthMichael O'Keeffe, CEO

Encontro com Acionistas - Natura &Co. 20 de abril de 2018

The Aesop – Natura partnership: A growth story

2012

Aesop before Natura Partnership

2017

Sales A$57 million X 5 A$291 million

Signature

Stores52 +157 209

EBITDA A$7 million X 8 A$55 million

Countries 10 +13 23

Headcount ~300 X 6.5 1,979

Aesop has a direct presence in 23 countries

Aesop retail presence

Aesop stockist presence

2017 growth: 34%

Retail subsidiaries 3

Signature stores 61

Counters 19 2017 growth: 20%


Signature stores 36

Counters 24

2017 growth: 27%


Signature stores 54

Counters 17

No presence

2017 growth: 34%


Signature stores 58

Counters 38

Americas: 15%

Europe: 22%

Asia: 36%

ANZ: 27%

Aesop is a distinct organisation differentiated by…

A customer first approach Products

Design A non-conformist culture

Aesop Nolita New York Aesop Marais Paris

Aesop Tokyo Aesop Oscar Freire São Paulo

A portfolio of incredible stores around the world

Aesop | Vision: We are only at the start of an exciting journey

A global integrated network of online and physical stores

that delivers exceptional products and experiences, with

strong connections to core customers in all markets,

and good brand recognition among the wider community.

Growing businesses in all major markets of the world

with committed leaders and supported staff.

Aesop | Vision: Four main areas of focus

Build deeper

penetration in markets

across the globe

Evolve into an

omni-channel retailer

Continue to launch new

and innovative products

Lighten our

environmental impact

and have a positive

impact on society

Aesop store locations

No stores

2017

2020

Signature Stores 209 Further expansion

Countries 23 29 - 31

Leveraging our regional offices, Aesop will continue to grow its business

through both existing and new cities

12 month like-for-like growth rates:• Signature stores 15%• Department stores 15%

Our signature store presence will expand by almost 50% by 2020

In addition to new stores,

Aesop will continue to drive

its returns from existing

stores by increased

customer conversion and

improved transaction size

Build deeper


across the globe

• Through a mix of subsidiaries and distributors, with a focus on leveraging our presence in existing regions.

• In 2017, Aesop entered Austria and UAE (Dubai), with both countries trading strongly.

• A carefully sequenced roll-out plan taking into account market potential and resourcing has been developed.

Asia Pacific

• Philippines

• Indonesia

• Vietnam

Europe

• Russia (2018)

• Belgium (2018)

• Netherlands

• Spain (2019)

• Portugal

By 2020, our geographical footprint will extend into a further 6-8 countries

Build deeper


across the globe

Continue to grow our

business

Evolve into an




Lighten our


and have a positive

impact on society


AESOP 2005

AESOP 2025

Aesop’s vision is to create a One Retail organization

R&D Brand DistributionR&D Brand Distribution

Retail Customer

PRODUCT-CENTRIC

(Aesop 2005)

RETAIL CENTRIC

(Aesop 2017)

ONE RETAIL

STRATEGY

Customer

D

a

i

Evolve into an

omni-channel

retailer


business

Evolve into an




Lighten our


and have a positive

impact on society


Aesop will continue to release limited, best-in-class products

In Two Minds Range

(Cleanser, Toner and Hydrator)

Toothpaste

Deodorants Roll-On

Hwyl Eau de Parfum

Room Sprays

• Skin care is our dominant product category, but Aesop is also strong across body, hair, perfume and home products Continue to launch new



business

Evolve into an




Lighten our


and have a positive

impact on society


20172020

2025

20132017

20202013

Sustainable store design

principles instilledAesop Foundation launched B Corp benchmarking

Deliver transformation required

to be a triple bottom line business

100% of products vegan

and cruelty freeLight-weighting of packaging Audit high risk suppliers

B Corp Certification and

continuous improvement

First sustainability strategy outlinedProduct Stewardship function

instilled100% recycled PET

Robust ethical sourcing and supply

chain transparency audit program

Ecological balancing / offsetting

AU$1.2 million gifted to

charitable entities to support

literacy and storytelling

Product LCA indexation

completeReduced emissions targets set

We are at the beginning of our sustainability journey, with more to come…

Lighten our

environmental

impact and have

a positive impact

on society

Aesop store locations

No stores

Aesop | Vision: An exciting journey so far. Significantly more growth and development to come


business

Evolve into an




Lighten our


and have a positive

impact on society

A global integrated network of online and physical stores

that delivers exceptional products and experiences, with

strong connections to core customers in all markets,

and good brand recognition among the wider community.

Growing businesses in all major markets of the world

with committed leaders and supported staff.

Mobilization for

education

David Saad

President of Instituto Natura

A B O U T O U R C O M P A N Y | N A T U R A

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Q&A

83

Thank you

84

Natura &Co Natura &Co: A transformational com Acionistas... · 2013 2017 1969 Page 4 A step-change:...

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Transcript of Natura &Co Natura &Co: A transformational com Acionistas... · 2013 2017 1969 Page 4 A step-change:...