Copies of this presentation are available for download in PDF format from avoncompany.com. The presentation will be archived for 14 days at that site.

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1 1 Please see our form 10K of February 20, 2009, filed with the SEC, for our cautionary statement regarding forward-looking comments made in today s remarks. Copies of this presentation are available for download in PDF format from avoncompany.com. The presentation will be archived for 14 days at that site. 2

2 Avon U.K. Investor Meeting March 26, Anna Segatti General Manager, UK and Republic of Ireland 4

3 AGENDA Introduction to U.K. Beauty Market Avon U.K. Overview The Avon Representative Experience 5 The U.K. Beauty Market Population: 61 million Female population 15-64: 21 million Per capita CFT spend: 116 in th largest CFT market 6

4 Ranking of U.K. Market 2007 Size of Market (US$B) U.S. Japan Brazil France UK Source: Euromonitor 7 Direct Selling Share of U.K. CFT Market 2007 Share of Market Retail 88% CAGR 02-07: 4% L Oreal Procter&Gamble Unilever Estee Lauder Alliance Boots Beiersdorf Direct Selling 5% CAGR 02-07: 4% AVON Amway Virgin Vie Other 7% CAGR 02-07: 19% Internet Home shopping Source: Euromonitor 8

5 Avon U.K. Started operations in 1959 Fifth largest Avon Market Largest market of WEMEA 9 Avon U.K. Is A trusted, relevant, female-friendly brand Providing an earnings opportunity to more and more women Offering value-for-money products to smart shoppers A model of success in a developed market Leveraging core strengths to aggressively follow playbook in turbulent economic times A regional centre of excellence, successfully executing Global turnaround initiatives 10

6 Avon U.K. A Beauty Market Jewelry 8% Home 9% Fashion 15% CFT 68% Skin Care 20% Fragrance 21% Others 9% Personal Care 15% Make Up 35% 11 Regional Centre of Excellence Local presence supported by matrix structure Home to European Brand Management and Supply Chain Lead market for Global initiatives Product Line Simplification Open To Buy 12

7 Avon U.K. Commercial Structure 3-week campaign cycle 18 campaigns per year 4 million brochures per campaign Seen by two out of three UK women 13 Supply Chain Structure CFT mostly sourced from Europe (Poland, Germany) Single distribution center (Corby) 10,000-15,000 Representative orders/day 400, million pieces /day Home delivery to 100% Representatives 99% on-time delivery to Representatives 78% Representatives order through internet Direct customer service home delivery (3%) Piece fill rate superior to retail competitors 14

8 A Trusted, Relevant, Female-friendly Brand Brand Recognition % Body Shop Dove Avon Nivea Olay Boots No.7 Max Factor Rimmel L'Oreal Source: Ipsos Avon Tracking Study Dec A Trusted, Relevant, Female-friendly Brand Penetration and Customer Reach Representative Access Ever Seen Brochure Ever Purchased 64% 87% 83% Source: Ipsos Avon Tracking Study Dec

9 Advertising Has Propelled Brand Awareness Increased advertising fivefold since 2006 Representative earnings opportunity Product and brand awareness Supported through aggressive PR campaign 17 Advertising Cut Through Marketing 28 th May Marketing 9 th June 18

10 Advertising Awareness 2008 Avon Recall Ranking vs. Key Competitors 1 st - 2 nd - 3 rd - 4 th - 5 th - 6 th - C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16 C17 C18 Source: Ipsos Campaignly Tracker 19 Brand Kudos Boosted by Leverage of Global Alliance Strategy 20

11 Local Extension of Alliance Strategy Further Promotes Brand Experts Designer equity Local celebrities 21 A Trusted, Relevant, Female-friendly Brand Supporting Women s Causes: A Point of Difference for Representatives and Customers Increased brochure space in 2009 to further promote female-friendly credentials Resonance: half of UK Representatives are either personally affected by breast cancer (58%) or domestic violence (46%), or know someone who is Avon UK launched the Avon Breast Cancer Crusade in 1992 now active in over 50 markets 22

12 Awareness of Avon s Support of the Fight Against Breast Cancer is Highest Avon Asda Boots Tesco Flora Estee Lauder Source: Ipsos Avon Tracking Study Dec A Model of Success in a Developed Market: Product Line Simplification (PLS) FROM 53 concepts TO 19 concepts 24

13 A Model of Success in a Developed Market: PLS Success Category 2007 SKUs 2008 SKUs Decrease Sales uplift Fragrance % +15% Eyecream % +46% Lipgloss % +35% Mascara % +16% Nail enamel % +47% 25 Open To Buy Managing inventory by controlling purchases Key benefits: Reduction in inventory: 4Q % COG reduction Maximize cash flow Example: Closed to buy a percentage of the range is cancelled balancing risk of lost sales, total sales, margin and inventory targets Deleted New Ellisia collection Replaced Sales Extended Excess flow convertible bra 26

14 These Are Unprecedented Times Global Recession Credit Squeeze Job Layoffs Currency Volatility Consumer Contraction 27 We Have an Updated Playbook for These Times 28

15 We Have an Updated Playbook for These Times 29 GROW Active Representatives + New Customers Outrun consumer spending contraction and protect market share 30

16 Accelerating Focus on Recruiting: Advertising Updated Representative recruitment advertising running from mid-january 2009 focus on extra earnings in tough times 31 Play recruitment ad VIDEO 30 secs 32

17 Accelerating Focus on Recruiting: PR Warmed Up Environment to Maximise Advertising Impact in Accelerating Focus on Recruiting: PR Continued aggressive campaign to showcase success stories and profile modern Avon Over 60 pieces of positive media coverage creating over 300,000,000 opportunities to see or hear about the earnings opportunity in

18 Accelerating Focus on Recruiting: PR High-profile local radio and TV coverage 2009 includes Sales Leaders such as Angie Winter 35 Play Look East VIDEO approx 2 mins 36

19 Accelerating Focus on Recruiting: Online Your Dream Job section renamed Earn Extra money to leverage current economic climate Online materials to support Representations, such as downloadable flyer Articles on avon.uk.com to offer advice on building your business Internet advertising, such as Google and Facebook, with focus on parttime working and earning extra money to beat the recession 77.5% of all Representatives placed their order online C Promoting the Avon Shopping Experience 38

20 Accelerating Focus on Smart Value: Emphasising Pricing 39 Accelerating Focus on Smart Value: Emphasising Pricing 40

21 Accelerating Focus on Smart Value: Creating Buzz and Freezing Prices 41 Accelerating Focus on Smart Value: PR 42

22 Accelerating Focus on Smart Value: Exciting Marketing Offers Focus on high-unit movers at exceptional prices: in brochure, online and in promotional flyers Key message: Avon is the answer to the recession Campaigns 4 and 5 Recession Buster flyer: Want to be Beautiful on a Budget? 43 Accelerating Focus on Smart Value: Exciting Marketing Offers Focus on high-unit movers at exceptional prices: in brochure, online and in promotional flyers Key message: Avon is the answer to the recession Campaigns 4 and 5 Recession Buster flyer: Want to be Beautiful on a Budget? 44

23 GROW Active Representatives + New Customers Outrun consumer spending contraction and protect market share 45 Management Q&A 46

24 The Representative Experience as Told By Sales Leader Hannah Cooke Sales Leader Yogeeta Mistry 47 Representative Q&A 48

25 Avon U.K. Is A trusted, relevant, female-friendly brand Providing an earnings opportunity to more and more women Offering value-for-money products to smart shoppers A model of success in a developed market Leveraging core strengths to aggressively follow playbook in turbulent economic times A regional centre of excellence, successfully executing Global turnaround initiatives 49 50