Natura &Co: A transformational journey to unlock value

Transcription

1 Natura &Co: A transformational journey to unlock value Natura &Co: A transformational journey to unlock value April 20, 2018 São Paulo 1

2 Agenda 09:30 10:00 Welcome Coffee Presentation 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 11:00 12:00 13:30 Q&A Brunch Closing remarks Page 2

3 Building a new group Roberto Marques Executive Chairman of the Board 1

4 A step-change: From Natura to Natura &Co Creation of Natura Passion for cosmetics and relationships Leading position in Brazil and successful expansion across Latin America Aesop acquisition First steps in internationalization and multichannel expansion The Body Shop acquisition A global, multibrand, multichannel, purpose-driven Group Page 4

5 A new corporate identity for a new multibrand group The power of the co_ community collaboration connection co-creation The power of the & economic & social & environment what & why & how the big & the small the long & the short Page 5

6 Four key drivers to create value Multibrand model Three empowered iconic brands Distinct value proposition per brand Mantaining strong brand autonomy Leveraging group scale 1 2 Multichannel growth in multiple geographies Capitalize on the strengths of each brand Direct sales Broad store network (70 countries) E-commerce Wholesale Attract new connected customers Expand Natura s international footprint and grow TBS in Latam Capture synergies 4 3 Innovation and sustainability 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 Cruelty free products, sustainably sourced Fair trade-based, collaborative relationships with supplier communities Innovation-driven product porftolio Page 6

7 Page 7 Three distinct businesses sharing a common vision We are committed to generating positive economic, social and environmental impact, delivering value in all businesses, brands and geographies 1 bem estar bem 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." Nourish through intelligent interactions 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. Enrich not Exploit 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."

8 An expanding multichannel presence evolving towards omnichannel 5% 1% 2% 100% 1% 7% Direct Selling % 4% % E-commerce Retail 93% Franchises Natura Natura + Aesop Natura + Aesop + TBS (proforma) Wholesale 2017 channel breakdown 1.7 million consultants 26 owned stores 2% digital sales + 555,000 consultants using the app 3,049 stores 1,950 franchised 1,099 owned 9% digital sales 209 owned stores 99 department stores 10% digital sales Page 8

9 A global footprint: From 7 countries in 2012 to 72 in Net sales by geography (2017) 9% 25% Pre-TBS acquisition 66% 34% Post-TBS acquisition Proforma 48% 18% 9 countries 68 countries 23 countries Brazil Latin America Others Page 9

10 Joining forces to promote a common vision 3 Natura joining forces with TBS to make its Forever Against Animal Testing campaign global and more powerful Natura certified since Aesop and TBS on the road to certification Support for local communities by each of the three brands Page 10

11 4 A governance and management structure combining scale and autonomy Roberto Marques Executive Chairman João Paulo Ferreira Natura CEO David Boynton TBS CEO Michael O Keeffe Aesop CEO Networking organization Natura, TBS and Aesop are run autonomously, each with a CEO and its own Executive Committee Paula Fallowfield Human Resources José Filippo CFO Josie Romero Supply Chain Robert Chatwin Chief Transformation Officer Group Operating Committee formed to capture synergies, allocate resources and carry out consolidation Board of Directors serving the entire group Itamar Gaino Filho Legal and Compliance Roger Schimid Innovation and Sustainability Moacir Salzstein Governance Page 11

12 Looking ahead: Natura &Co s priorities to unlock value 4 Establishing governance and culture Driving value creation Getting the most out of the Group Strengthen governance, international capabilities & processes Turn around TBS and accelerate its growth in Latam Expand Natura s multichannel transformation and international footprint Continue Aesop s growth momentum and expantion Capture Natura Group synergies A clear financial strategy focused on profitable growth, cash generation and deleveraging Page 12

13 Governance and results Marcel Goya Financial and IR director

14 AGO and AGE approvals In AGO were approved 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 In AGE were approved 1. Amendment of the bylaws for harmonization with the new regulation of the new market and social status consolidation. Page 14

15 One of the first companies to join the Novo Mercado First publicly traded company B Integrated annual report since 2002 ( 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 Page 15

16 Shareholding structure 5% 3% 21% 46% AMERICA DO NORTE EUROPA BRASIL 60% 40% 24% 21% 5%3% 46% 24% ASIA OUTROS Nº de investidores 11, % em circulação 6% 15% 79% Pessoa Física Pessoa Jurídica Brasil Pessoa Jurídica Exterior Page 16

17 Shares Performance Natu3 vs. BOVESPA since the IPO 18 Page 17

18 Solid increase in net revenue Reported Pro forma (in constant currency) R$ million 24.5% 9, % , ,5 7, Natura TBS Aesop Page 18

19 Robust improvement at EBITDA Reported Pro forma (in constant currency) R$ million 29.6% 1, , % 1, , Natura TBS Aesop Page 19

20 Strong cash generation and rapid de-leveraging Free cash-flow Debt R$ million x 3.6x guidance 3.0x x 1.4x Free cash generation (reported)) PERT (regularization) End 2016 Q3-17 End 2017 End 2021 Page 20

21 Taking Natura to the next level João Paulo Ferreira CEO Natura

22 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 Page 22

23 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 Page 23 3

24 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 Page 24

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26 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 Page 26

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32 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 Page 32

33 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 Silver Gold Diamond Seed Bronze Silver Gold Diamond Page 33

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35 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 v Page 35

36 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 Page 36

37 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 Page 37

38 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 Source: ¹Ebit popular vote ²Source: Similarweb. Cosmetics segments (natura.com.br+natura.net), Page 38

39 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 Page 39

40 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 jan out nov dez jan out nov dez jan out nov dez Main competitor Page 40

41 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 Page 41 21

42 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 Q4-12 Q4-13 Q4-14 Q4-15 Q4-16 Q4-17 Page 42

43 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 (R$ milhões) 19.8% 17.1% 19.3% 22.6% 12.5% 13.8% Constant exchange rates EBITDA Margin (%NR) Page 43

44 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 Page 44

45 The Body Shop: Transformation underway David Boynton CEO The Body Shop

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47 ICONIC BRITISH BEAUTY BRAND 22,000 PEOPLE 68 COUNTRIES 3,049 STORES 400 GLOBAL TRAVEL RETAIL LOCATIONS

48 BUSINESS AS A FORCE FOR GOOD

49 A TRULY GLOBAL BRAND NORTH AMERICA 2 COUNTRIES COMPANY OWNED 257 STORES EUROPE, MIDDLE EAST & AFRICA 47 COUNTRIES 12 COMPANY-OWNED 35 HEAD FRANCHISE 1,489 STORES LATIN AMERICA 3 COUNTRIES COMPANY OWNED 176 STORES ASIA PACIFIC 16 COUNTRIES 3 COMPANY-OWNED 13 HEAD FRANCHISE 1,127 STORES

50 OUR MOST-LOVED PRODUCTS GINGER SHAMPOO DROPS OF YOUTH 400ML YOUTH CONCENTRATE 50ML 7 HIMALAYAN CHARCOAL FACIAL MASK HEMP HAND PROTECTOR 100ML SHEA BODY BUTTER 200ML TEA TREE OIL 20ML ALMOND MILK & HONEY BODY BUTTER 200ML DROPS OF YOUTH LIQUID PEEL TEA TREE OIL 10ML TEA TREE SKIN CLEARING FACIAL WASH 250ML DROPS OF YOUTH YOUTH CONCENTRATE 30ML DROPS OF YOUTH DAY CREAM 50ML

51 IMPROVING PERFORMANCE Page 51 51

52 GROWTH IN REVENUE AND EBITDA IN 2017 Net revenues 1 (Constant currency M) EBITDA 1 (Constant Currency M) 2.2% % First EBITDA growth since 2013 Clear opportunities for future growth 1 Pro-forma: includes financial performance prior to the acquisition

53 Own Store E-commerce Franchisee Others Body Care Skin Care Gifts Make up Fragrance Hair Care Others Page 53

54 2022 TRANSFORMATION UNDERWAY Page 54

55 1 REJUVENATE 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 2 OPTIMISE RETAIL OPERATIONS TURN AROUND THE US TURN AROUND GERMANY, DENMARK AND SWEDEN RENEW STORE FOOTPRINT ENTER NEW HEAD FRANCHISE MARKETS 3 ENHANCE 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 4 IMPROVE OPERATIONAL EFFICIENCY REDUCE OPEX THROUGH INDIRECT AND DIRECT SAVINGS INCREASE CAPEX SPEND EFFICIENCY 5 RE-DESIGN ORGANISATION STRENGTHEN CULTURE AND TALENT RE-DESIGN THE OPERATING MODEL TO ENABLE THE STRATEGY SECURE THE SUCCESS OF BODY YOGURT AND CHRISTMAS BOOST LATAM GROWTH CREATE A WINNING IN-STORE CUSTOMER EXPERIENCE Page 55

56 WE AIM TO DOUBLE EBITDA TO 123M BY 2022 Expected EBITDA evolution M Topline growth Cost improvement EBITDA baseline 2016 A 2019 E 2022 E 8.4% 10-11% 12-14% EBITDA margin 1 Based on December 2017 rate of 0.75 for 1 US$ Page 56

57 CONCLUSION: THREE KEY GOALS 1 Deliver the transformation plan 2 Drive sustainable triple bottom line growth 3 Regain The Body Shop s activist voice Page 57

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59 Aesop: Poised for further growth Michael O Keeffe CEO da Aesop

60 Aesop: Poised for further growth Michael O'Keeffe, CEO Encontro com Acionistas - Natura &Co. 20 de abril de 2018

61 The Aesop Natura partnership: A growth story 2012 Aesop before Natura Partnership 2017 Sales A$57 million X 5 A$291 million Signature Stores EBITDA A$7 million X 8 A$55 million Countries Headcount ~300 X 6.5 1,979

62 Aesop has a direct presence in 23 countries Aesop retail presence Aesop stockist presence No presence Europe: 22% 2017 growth: 27% Retail subsidiaries 9 Signature stores 54 Counters 17 Asia: 36% 2017 growth: 34% Retail subsidiaries 7 Signature stores 58 Americas: 15% 2017 growth: 34% Retail subsidiaries 3 Signature stores 61 Counters 38 ANZ: 27% Counters growth: 20% Retail subsidiaries 2 Signature stores 36 Counters 24 Page 62

63 Aesop is a distinct organisation differentiated by A customer first approach Products Design A non-conformist culture Page 63

64 A portfolio of incredible stores around the world Aesop Nolita New York Aesop Marais Paris Aesop Tokyo Aesop Oscar Freire São Paulo Page 64

65 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. Page 65

66 Aesop Vision: Four main areas of focus Evolve into an omni-channel retailer Continue to launch new and innovative products Build deeper penetration in markets across the globe Lighten our environmental impact and have a positive impact on society Aesop store locations No stores Page 66

67 Our signature store presence will expand by almost 50% by 2020 Leveraging our regional offices, Aesop will continue to grow its business through both existing and new cities Build deeper penetration in markets across the globe Signature Stores 209 Further expansion Countries month like-for-like growth rates: Signature stores 15% Department stores 15% In addition to new stores, Aesop will continue to drive its returns from existing stores by increased customer conversion and improved transaction size Page 67

68 By 2020, our geographical footprint will extend into a further 6-8 countries 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. Build deeper penetration in markets across the globe Europe Russia (2018) Belgium (2018) Netherlands Spain (2019) Portugal Asia Pacific Philippines Indonesia Vietnam Page 68

69 Aesop Vision: Four main areas of focus Evolve into an omni-channel retailer Continue to launch new and innovative products Continue to grow our business Lighten our environmental impact and have a positive impact on society Page 69

70 Aesop s vision is to create a One Retail organization PRODUCT-CENTRIC (Aesop 2005) RETAIL CENTRIC (Aesop 2017) AESOP 2025 ONE RETAIL STRATEGY Evolve into an omni-channel retailer i R&D Brand Distribution R&D Brand Distribution AESOP 2005 D Retail Customer Customer a Page 70

71 Aesop Vision: Four main areas of focus Evolve into an omni-channel retailer Continue to launch new and innovative products Continue to grow our business Lighten our environmental impact and have a positive impact on society Page 71

72 Aesop will continue to release limited, best-in-class products Skin care is our dominant product category, but Aesop is also strong across body, hair, perfume and home products Continue to launch new and innovative products In Two Minds Range (Cleanser, Toner and Hydrator) Deodorants Roll-On Room Sprays Toothpaste Hwyl Eau de Parfum Page 72

73 Aesop Vision: Four main areas of focus Evolve into an omni-channel retailer Continue to launch new and innovative products Continue to grow our business Lighten our environmental impact and have a positive impact on society Page 73

74 We are at the beginning of our sustainability journey, with more to come Lighten our environmental impact and have a positive impact on society Sustainable store design principles instilled Aesop Foundation launched B Corp benchmarking Deliver transformation required to be a triple bottom line business 100% of products vegan and cruelty free Light-weighting of packaging Audit high risk suppliers B Corp Certification and continuous improvement First sustainability strategy outlined Product Stewardship function instilled 100% 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 complete Reduced emissions targets set

75 Aesop Vision: An exciting journey so far. Significantly more growth and development to come Evolve into an omni-channel retailer Continue to launch new and innovative products Continue to grow our business 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 store locations No stores Lighten our environmental impact and have a positive impact on society Page 75

76 Mobilization for education David Saad President of Instituto Natura

77 A B O U T O U R C O M P A N Y N A T U R A Page 77

78 A B O U T O U R C O M P A N Y N A T U R A Page 78

79 A B O U T O U R C O M P A N Y N A T U R A Page 79

80 A B O U T O U R C O M P A N Y N A T U R A Page 80

81 A B O U T O U R C O M P A N Y N A T U R A Page 81

82 A B O U T O U R C O M P A N Y N A T U R A Page 82

83 Q&A 83

84 Thank you 84

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