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

Transcription

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

2 2:30 PM - Introduction Building a new group Roberto Marques, Executive Chairman of the Board, and Josie Romero, Supply Chain Vice-President 3:00 PM - One group, three distinctive brands 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, CEO Aesop 4:15 PM A strengthened financial profile Group financial results and outlook Roberto Marques Key takeaways Roberto Marques 4:30 PM Q&A 5:25 PM APIMEC ceremony 5:30 PM Closing remarks Page 2

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

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 1 2 Multichannel growth in multiple geographies Capitalize on the strengths of each brand Direct sales Broad store network (70 countries) E-commerce Wholesale Leveraging group scale Attract new connected customers Expand 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 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 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 Page 7 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 Strategically positioned in a growing global market (US$ billion) Cosmetics, fragrances and toiletries Direct sales 3 5.2% CAGR 5.3% % E E-commerce 15.3% 36.6 Retail 4.3% Source: Euromonitor Page 10

11 A complementary and innovative product portfolio across categories 3 8% 9% 18% 7% 4% 25% 29% 5% 7%2% 5% 5% 29% 9% 32% 7% 5% 27% 29% 4% 19% 8% 46% 11% 29% 9% 12% Fragrance, body care, gifts and core beauty Body care, skin care and gifts Skin and hair care K Launch in October 2017 of the first deo parfum in the Kaiak family with high quality ingredients 100% organic alcohol and 100% recycled glass Shea Body butter Sourced from a community trade supplier in Ghana, where it helps provide a fair wage to 500 women Provides intense moisture and 48 hour hydration Elemental Face Barrier cream Vegetable waxes to provide a protective layer Copper and Zinc PCA are combined with Ginger Root extract to provide soothing and anti-inflammatory properties Page 11 Body Care Fragrance Gifts Makeup Skin care Hair care Others

12 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 12

13 4 A governance and management structure combining scale and autonomy Roberto Marques Executive Chairman João Paulo Ferreira Natura CEO David Boynton TBS CEO Michael 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 13

14 Leveraging group scale to unlock synergies 4 Growth synergies Natura international growth acceleration, building on The Body Shop expansion in Latin America, capitalizing -how Cost synergies Efficiency and scale gains Global procurement Lower group cost of capital Aesop: Entering new geographies Page 14

15 Making the most of the group: Steering collaboration through Networks of Excellence 4 Launch of 3 Networks of Excellence: Sustainability Digital Retail Key objectives: Sponsors João Paulo Ferreira (Natura) David Boynton (TBS) Leverage capabilities and expertise in each company Stimulate sharing of best practices Develop common agendas Capture synergies Working together in a collaborative, non-hierarchical network: Multi company teams Fostering cooperation between brands and businesses for the benefit of the group Page 15

16 Synergy case study: Creating a common procurement organization 4 Capture of synergies and scale through a Global Procurement Organization, leveraging the expertise available throughout the group Key objectives: Speak to the supplier base with a single Natura &Co voice to optimize costs, payment terms and inventory management Harmonize protocols and policies, reducing compliance and supply risks Develop strategic partnerships with key suppliers for co-creation (faster and bolder innovation) Promote purchasing process transparency Page 16

17 Level of Globalization of Supplier Market A two-wave implementation plan through Low High Gifts * Aerosol* Soaps Pumps Oleochemicals Glass Tubes Plastics Marketing Samples, Surfactants Folding carton and corrugate* Fragrance & Alcohol Services Make Up Store furniture Filters, Pigments Real Estate IT Logistics 3PL Travel International freight Low Natura &Co Ability to win/leverage High Page 17 *Only Natura spend

18 A lean and cost-efficient organization 4 Operating model functional network Procurement Committee Global Procurement Leader, Supply Chain VPs, Procurement Directors, category and business buyers Procurement Teams Category Expert Market facing: Scouting, cost models Drive category strategy Manage strategic supplier relationship Category transformation projects Business Buyer Business Facing: Define and manage need Develop and deliver projects/actions Manage supplier performance Manage tariffs, budget and NPD Page 18

19 *At current exchange rates. A R$ 420 million opportunity for the group 4 Global procurement spend approx.: R$ 8.5 billion a year 5% Cumulative cost savings in 3 years: R$ 420 million* This figure is part of the overall guidance provided further on in this presentation. It is based on a mapping of the scale gain purchasing volumes in such categories as logistics, third party services, raw materials, packaging, information technology and others. There are other opportunities to capture from access to a larger number of suppliers, currency diversification and centralized negotiations with suppliers. The estimated savings result from a comparative overview of market practices. Page 19

20 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 20

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

22 N a t u r a & Co D a y N A T U R A The Natura Journey: A growth story based on passion for cosmetics and relationships BRAZIL EXPANSION LATAM EXPANSION INTERNATIONAL EXPANSION Direct Sales 2010 Direct Sales 2020 Exponential Model + + Multichannel & Digitization Convergence & Transcendence 2030 Page 22

23 N a t u r a & Co D a y N A T U R A with some short-term bumps on the road : NATURA WAS LOSING MOMENTUM AMID CHANGING STRUCTURAL MARKET TRENDS: LOSING TOUCH WITH: New brands New competitors in direct sales Changing shopping habits and channels Beauty attributes Higher-income consumers Young consumers RESULTING IN: Lower market share in direct sales Lower household penetration share-of- wallet Page 23

24 N a t u r a & Co D a y N A T U R A 2017: A new roadmap for Natura 1 2 A S I X- P I L L A R A C T I O N P L A N TO R E - D Y N A M I Z E O U R B U S I N E S S M O D E L A N D R E S U M E G R O W T H NATURA BRAND CATEGORIES AND BRANDS STRATEGY REVITALIZATION OF DIRECT SALES ONLINE & OFFLINE CONVERGENCE OF THE COMMERCIAL MODEL MULTI- CHANNEL SHOPPING EXPERIENCE EXPANSION INTO NEW MARKETS Page 24

25 N a t u r a & Co D a y N A T U R A 1 2 WE REPOSITIONED THE NATURA BRAND Natura brand relaunch Revised brand architecture Key sub-brands relaunch Page 25

26 Live your living beauty Page 26

27 N a t u r a & Co D a y N A T U R A We redesigned the brand architecture 2 CORE CATEGORIES BRAND STRATEGY Fragrances Body care Gifts Higher household penetration Ekos Chronos Tododia Faces Aquarela Kaiak Essencial Humor Una Luna Core beauty Strengthen beauty attributes Clear role to reach target consumers Page 27

28 Ekos Chronos Page 28

29 Perfumery House Page 29

30 Natura Homem Page 30

31 Tododia (Wear your skin, live your body) Page 31

32 Faces Aquarela Page 32

33 N a t u r a & Co D a y N A T U R A Relevant innovation combining cosmetics, technology and biodiversity 1 2 Innovation index +9.1p.p. 64.6% 55.5% Q2-16 Q4-17 Page 33

34 N a t u r a & Co D a y N A T U R A Leadership recovery in key categories Resuming market share gains in Brazil in Market share % Fragrance Body care Gifts 2017 jan out nov dez jan out nov dez jan out nov dez Main competitor Page 34

35 N a t u r a & Co D a y N A T U R A Transforming our model from direct sales to relationship selling 3 Previous model New model Value proposition Sales through relations Natura Consultants Business Leader Silver Gold Diamond Direct sales = 26% of Brazilian CFT market New Narratives Beauty Consultants Beauty Consultants Seed Bronze Silver Gold Diamond Page 35

36 Relationship Selling Page 36

37 N a t u r a & Co D a y N A T U R A 3 More consultants in top 3 tiers and higher overall productivity Number of consultants vs. productivity (Brazil) +18.0% 150 Productivity per consultant Total consultants (million) % 80 Silver, Gold and Diamond consultants Gross revenue Productivity Number of consultants Jul/2017 Feb/2018 Page 37

38 N a t u r a & Co D a y N A T U R A Digital solutions enhance direct sales shopping experience Providing our consultants with tools to amplify their potential 4 E-commerce Direct sales v Relational e-commerce Direct sales revitalization through digital Relationship-driven model fostered by digital Page 38

39 N a t u r a & Co D a y N A T U R A Using cutting- 4 Target: 1 million consultants by 2019 An app designed for consultants 555,000 active consultants 21% of total orders +10% average productivity gain/consultant Rapid adoption Outstanding UEx Growing relevance 10X times more interactions with Natura Bots, agumented reality, analytics and CRM High customer review rating in app stores Page 39

40 N a t u r a & Co D a y N A T U R A Multiple channels for different shopper profiles and category drivers 5 Shopper profile 30% A S S I S TA N C E 36% E X P E R I E N C E 34% C O N V E N I E N C E Fragrance/ makeup Face care Personal care Natura Relationship Selling can deliver an excellent shopping experience: Extensive reach Assortment with innovation Endorsement and advocacy marketing High service level Advice on products and beauty Which can be complemented with other channels Page 40

41 N a t u r a & Co D a y N A T U R A Natura is increasingly multichannel to attract younger, more affluent beauty consumers 5 Rede Natura One of the most visited digital sales channels for beauty products in Brazil Growing database of direct consumers Relationshipbased model Natura Beauty Consultants Natura Beauty Specialists Natura Beauty Entrepreneurs Natura stores AB1 consumers 26 stores (19 in Brazil) Makeup and face care Premium portfolio: Ekos, Chronos, Una Page 41

42 N a t u r a & Co D a y N A T U R A 3. O N L I N E & O F F L I N E C O N V E R G E N C E O F T H E C O M M E R C I A L M O D E L We have created a powerful online sales platform: Rede Natura 5 _ Best online store in 2017¹ _ Leader in traffic in cosmetics 2 _ High doubledigit growth Double-digit EBITDA margin Rede Natura _ 220,000+ digital consultants; 62% of online sales _ 3.5 million consumers 30% aged below 30 (vs. 18% in direct sales) _ 50% of sales through mobile Source: ¹Ebit popular vote ²Source: Similarweb. Cosmetics segments (natura.com.br+natura.net), Page 42

43 N a t u r a & Co D a y N A T U R A A growing physical store network 5 _ 26 stores (19 in Brazil) _ Average store size: 70m² _ Break-even: Less than 2 years _ Premium portfolio _ Focus on core beauty _ Further expansion in 2018 Page 43

44 N a t u r a & Co D a y N A T U R A Natura resumes n o 1 ranking in Brazil Page 44

45 N a t u r a & Co D a y N A T U R A Latam: Successful growth platform to be boosted by commercial innovation Several drivers for further sustainable growth Rolling out our multichannel model Fast-growing market Increasing brand awareness Strong brand preference Growing number of consultants Improving productivity LATAM CFT Market (US$ Billion) CAGR 10.1% CAGR 8.0% 35,3 Online sales and first store openings in Argentina and Chile 19,5 23,7 25,9 Page E

46 N a t u r a & Co D a y N A T U R A Latam: Strong performance across the region Growth 3X above average of competitors 5.1% CFT Market 1 (USD billion) Market share 1 2.4% Brand awareness 2 97% 97% 100% 99% 98% Brand preference 2 *1º 3º *1º 1º 2º 589,000 Market share 1 4.9% 2.4% 6.5% 5.5% 9.5% Number of consultants 302,000 Source: ¹ Euromonitor International 2017, LATAM Beauty and Personal Care (Argentina, Chile, Peru, Colombia and Mexico) Source: ² Equity Millward Brown, 2017 *Tied for first place Q4-12 Q4-13 Q4-14 Q4-15 Q4-16 Q Page 46

47 N a t u r a & Co D a y N A T U R A Sales and profitability growth back on track (R$ million) Natura consolidated performance Brazil: Turnaround underway Latam: Continued profitable growth Net sales EBITDA Net sales EBITDA Net sales EBITDA % 7.8% % % 23.1% 19.8% % % % 22.6% % 18.0% % % 27.6% 13.8% Constant exchange rates EBITDA Margin (%NR) Page 47

48 N a t u r a & Co D a y N A T U R A Strong upside potential in new geographies and channels Beauty and Personal Care Market size 6 20% 20% 8% Western Europe North America Middle East, Africa and Australia 58% Store-based retailing Internet retailing Direct sales Where is Natura present? LATAM 14% 14% 5% 32% Global Market Latin America Eastern Europe Asia Pacific 2% 26% 14% Latin America Beauty specialist retailers Non-retail channels Direct sales 26% 3.6% of geographies and channels of global CFT market Source: Euromonitor International 2017, Beauty and Personal Care. Page 48

49 N a t u r a & Co D a y N A T U R A 6 Lower entry costs Synergies, scale gains Faster break-even Intimacy with local markets 68 countries 80% of global CFT market of which 66% is new to Natura Page 49

50 A M E R I C A S N A T U R A Transcendence: The 2 X 20 X 200 opportunity 6 2 million connected consultants 20 million consumers in Latam, consuming content, products and cosmetic services 200 million consumers connected to the Natura ecosystem worldwide Page 50 Source: PEN

51 NATURA &CO DAY David Boynton 20 April 2018 CEO 2015 The Body Shop International plc

52 ICONIC BRITISH BEAUTY BRAND 22,000 PEOPLE 68 COUNTRIES 3,049 STORES 400 GLOBAL TRAVEL RETAIL LOCATIONS Page 52

53 BUSINESS AS A FORCE FOR GOOD Page 53

54 1976 THE FIRST THE BODY SHOP STORE OPENS IN BRIGHTON, UK 1992 PUBLISHED OUR FIRST ENVIRONMENTAL STATEMENT 1997 THE BODY SHOP BECOMES THE FIRST COMPANY RECOGNISED UNDER THE HUMANE COSMETICS STANDARD BY BUAV (NOW CFI) 2011 THE BODY SHOP HELPS FORM THE GLOBAL SHEA ALLIANCE 2017 EAST CROYDON INNOVATION LAB OPENS 2020 WE WILL MEET OUR TARGETS IN OUR FIRST STEP TO BECOMING THE SUSTAINABLE BUSINESS 1987 COMMUNITY TRADE (TRADE NOT AID) LAUNCHES 1994 THE BODY SHOP AT HOME IS LAUNCHED TO GIVE WOMEN THE OPPORTUNITY TO WORK FLEXIBLY 2006 THE BODY SHOP PURCHASED 2016 THE BODY SHOP LAUNCHES ITS ENRICH NOT EXPLOIT TM COMMITMENT 2017 THE BODY SHOP IS PURCHASED BY BRAZILIAN BEAUTY BRAND, NATURA Page 54

55 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 Page 55

56 MULTI-CHANNEL APPROACH IN-STORE 3,049 STORES GLOBALLY DIGITAL 33 E-COMMERCE SITES WHOLESALE DIRECT SALES THE BODY SHOP AT HOME 56

57 OUR KEY CATEGORIES BODYCARE BODY BUTTER, LOTION HANDS, LIPS, GIFTS SKINCARE MOISTURISER, SERUMS, MASKS, CLEANSER, MEN, GIFTS BODY HYGIENE SHOWER GEL SCRUBS, DEO, MISTS HAIRCARE SHAMPOO, CONDITIONER MAKEUP FACE, LIP FRAGRANCE EDT, OILS, BODY LOTION Page 57

58 OUR MOST-LOVED PRODUCTS GINGER SHAMPOO 400ML 7 DROPS OF YOUTH YOUTH CONCENTRATE 50ML 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 *AS OF FEBRUARY 2018 Page 58

59 MORE INNOVATION IN 2018 Launch of body yogurt Specially formulated to apply on damp skin Contains Community Trade organic almond milk Available in our six best-selling scents Investing in critical body care category 100% vegan Fast absorbing, 48 hour moisturising Initial launch in US and Finland 59 Page 59

60 IMPROVING PERFORMANCE Page 60 60

61 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 Page 61

62 WELL-SPREAD SALES ACROSS GEOGRAPHIES NORTH AMERICA 21% +4% vs EUROPE, MIDDLE EAST & AFRICA 49% -1% vs Excluding Saudi Arabia the growth is 1% LATIN AMERICA 3% +19% vs ASIA PACIFIC 27% +6% vs Page 62

63 WELL-BALANCED SALES BY CHANNEL AND CATEGORY By channel By category Own Store E-commerce Franchisee Others Body Care Skin Care Gifts Make up Fragrance Hair Care Others Page 63

64 2022 TRANSFORMATION UNDERWAY Page 64

65 A FIVE-PILLAR TRANSFORMATION PLAN REJUVENATE THE BRAND OPTIMISE RETAIL OPERATIONS ENHANCE OMNI- CHANNEL IMPROVE OPERATIONAL EFFICIENCY RE-DESIGN ORGANISATION Transformation office with a dedicated team Committed and accountable 200-strong transformation team 17 workstreams within these five pillars 65

66 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 SECURE THE SUCCESS OF BODY YOGURT AND CHRISTMAS 2 OPTIMISE 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 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 Page 66

67 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 67

68 SEVERAL ACTIONS TO DELIVER COST IMPROVEMENTS A 2019 E 2022 E Redesign the operating model to bring half of total expected savings by 2019 Reduction of indirect costs to bring a third of total savings by 2019: Store footprint rationalization Third party services Remaining cost improvements coming from packaging, supply chain, shared facilities and improved warehouse efficiency 8.4% 10-11% 12-14% Simplification of product portfolio: Reduce total live SKUs by at least 20%, analysis already underway Page 68

69 FOCUSED ACTIONS TO DELIVER TOP LINE GROWTH A 2019 E 2022 E Turn around the US, Germany, Denmark and Sweden through store portfolio and brand rejuvenation Grow owned ecommerce sales to 15% of total by 2022; roll out new ecommerce sites in all remaining sizeable Head Franchise markets (21 currently live) Achieve a 25% increase in marketing investments as a percentage of net sales by 2022 Create a clearer and more transparent pricing architecture to reflect the quality of our products Grow Latam footprint by leveraging Natura's infrastructure and capabilities 8.4% 10-11% 12-14%

70 CONCLUSION: THREE KEY GOALS 1 Deliver the transformation plan 2 3 Drive sustainable triple bottom line growth Regain The Body Shop s activist voice Page 70

71

72 Aesop: Poised for further growth Michael O'Keeffe, CEO Natura &Co Day. April 20, 2018

73 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 Page 73

74 Aesop has a direct presence in 23 countries Aesop retail presence Aesop stockist presence No presence Americas: 15% 2017 growth: 34% Retail subsidiaries 3 Signature stores 61 Counters 19 Europe: 22% 2017 growth: 27% Retail subsidiaries 9 Signature stores 54 Counters 17 Asia: 36% 2017 growth: 2017 growth: 34% Retail subsidiaries 7 Signature stores 58 Counters 38 ANZ: 27% 20 % Retail subsidiaries 2 Signature stores 36 Counters 24 Page 74

75 A customer first approach Products Design A non-conformist culture Page 75

76 A portfolio of incredible stores around the world Aesop Nolita New York Aesop Marais Paris Aesop Tokyo Aesop Oscar Freire São Paulo Page 76

77 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 77

78 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 Aesop store locations No stores Lighten our environmental impact and have a positive impact on society Page 78

79 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 79

80 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 80

81 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 81

82 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 Custome r Customer a Page 82

83 aesop.com was re-launched in 2017 across most markets Evolve into an omni-channel retailer Page 83

84 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 84

85 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 85

86 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 86

87 Lighten our environment al 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 Page 87

88 In contribution to our wider community, the Aesop Foundation was established in 2016 to provide individuals with greater opportunities through the development of literacy and storytelling. We partner with organisations to cultivate written and verbal skills, and provide a platform for expression to those who may otherwise struggle to be heard. Through two distinct granting programs, it is our hope that we nurture diversity within the community, and the culture of the arts with resounding effect. Lighten our environmental impact and have a positive impact on society Established the Aesop Foundation AUD$1.2m distributed to charities 10 charitable organisations supported 70+ charities in the pipeline Development of Global Philanthropy Strategy Staff engagement Page 88

89 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, Aesop store locations No stores and good brand recognition among the wider community. Lighten our environmental impact and have a positive impact on society Growing businesses in all major markets of the world with committed leaders and supported staff. Page 89

90 Group financial results and outlook Roberto Marques Executive Chairman of the Board 90

91 Solid increase in consolidated net revenue supported by growth in all businesses R$ million As reported Pro forma (at constant exchange rates) 24.5% 7.2% 7, , , , Natura TBS Aesop 91

92 Robust improvement in EBITDA R$ million 1,343.6 As reported 29.6% 1,741.9 Pro forma (at constant exchange rates) 1, % 1, Natura TBS Aesop 92

93 Solid cash generation and deleveraging ahead of plan Free cash flow generation Net debt to EBITDA ratio x 3.6x initial guidance 3.0x 1.4x 1.4x End 2016 Q3-17 End 2017 End 2021 Free cash flow generation (reported) PERT disbursement 93

94 A clear financial strategy to fund further growth Focus on continuous improvement in cash flow generation CAPEX R$ millions 586 Allocate resources to projects with the highest returns Reach pre-transaction indebtedness ratio in 2021, one year ahead of initial schedule * 146* Maintain 2017 dividend payout level to allow deleveraging * 300 Capex Natura: Focus on retail and digital development, innovation and Latam expansion TBS: New stores and store refits, digital and infrastructure Aesop: Focus on signature store expansion and refurbishings Natura Aesop TBS * TBS capex (Pro forma) 94

95 Targeting solid sales and EBITDA growth through 2022 Over the next five years, we target high single-digit growth in net sales 1 and low double-digit growth in EBITDA 2 on a compound annual growth rate (CAGR) basis, aiming at a near-doubling of EBITDA by 2022 Net sales 1 (in R$ MM) EBITDA 2 (in R$ MM) High singledigit CAGR 17,150 Low doubledigit CAGR 3,100 11,667 1, In BRL, 2017 net sales include full year of The Body Shop pro-forma. 2 In BRL, 2017 EBITDA includes full year of The Body Shop pro-forma and was adjusted to exclude non-recurring effects of R$ 127 million, as detailed in appendix I. 95 Under current accounting principles and including estimated foreign exchange rates (see appendix II)

96 Key takeaways Roberto Marques Executive Chairman of the Board 96

97 Key takeaways: The new group on the move Governance in place and first synergies identified, strong potential to -how to unleash further value creation Clear roadmaps for the three brands: Revival of an iconic brand underway in each of the five pillars turnaround plan Back on a growth path through the transformation of its business model in Brazil, accelerated expansion in Latin America and a growing international footprint Continue strong growth performance and increase its relevance within the group A Strengthened consolidated financial performance High single digit compound annual growth in net sales through Near doubling of EBITDA by Return to pre-transaction indebtedness level of 1.4x EBITDA in

98 Natura &Co: A compelling investment case Three empowered, iconic brands with clear roadmaps A global, increasingly multichannel presence A complementary product portfolio in key categories, based on innovation and sustainability Leveraging the Group's scale and know-how to share resources and enhance efficiency A clear financial strategy to fund further growth Positioned in an attractive, growing industry Solid sales and EBITDA growth through

99 Q&A 99

100 APIMEC 100

101 NATURA COSMÉTICOS S.A. APIMEC 101

102 102

103 Thank you 103