Natura &Co Holding (NTCOY) 13 Nov 202020 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Natura &Co Third Quarter 2020 Results. This event is recorded and all participants will be in listen-only mode during the company’s presentation. After Natura’s are completed, there will be a question-and-answer session. At that time further instructions will be given.

into from questions or abroad translation by asked Portuguese. simultaneous connecting participants either have Portuguese maybe and normally We in English [Operator statements. may presentation Instructions] contain This forward-looking the of Such not & historical beliefs and fact Co's statements management. expectations statements and are Natura of reflect

information conference the only, Investor company only have them Mrs. the for by is in developments. new or &Co. purposes not company and statements light made, will floor speak of This which are obligation the Natura future includes prepared Behar, of yours. not of as Forward-looking reference I undertake adjusted Ms. presentation date any the they and does audited. now update Viviane information may, Behar, Relations of yet over been Officer also to turn you the information to

Marques, Earnings. Good Thank this morning Relations Ferreira, Executive &Co; present third João the Investor I'm or join session. &Co; for as today José everyone. Roberto for us as &Co well XXXX and of to Paulo Natura , joined good us CFO Filippo Natura &Co's call Viviane &Co's Behar, of America, who afternoon Natura I'm Natura you Q&A Latin Natura will today joining by CEO CEO Chairman of for Officer. quarter

to remarks, will for &Co available open the an will Natura on with Our detail presentation, we Investor Relations Natura Natura to financials will performance. concluding is start call, floor Relations our that, &Co team us. is Roberto &Co. The with Roberto website. referring also our the will the of overview make we your will Filippo questions. during Investor After of and be

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you Thank hope hello safe to in are Thank all well Viviane for everyone. and you times. I joining you, and challenging us. few this

our three quarter. a in first of fundamentals then our promoting Avon launches QX to services sign even continued slide a with in Brazil, Pay will reopened. on the in continuing by improvement selling the by financial productivity launch service, Latin and platform. while a in new in drive Natura access Aesop growth in also the next performance announce, rollout begin globally, growth, improvement e-commerce show our representatives will posted America a pandemic them with and Internationals sales allowing me be in Overall, strong group years. in showing and I'm early doubling Avon social in gradually as we sales &Co Brazil inclusion. The market for consultants key well. highlights. within key of in EBITDA CFT driven XX% with with and to digital markets. Shop all couple and strong &Co outperforming our acceleration, significantly pleased acceleration robust continuous Let in digital step its the &Co the margin and model. of improvement We help our positive with financial preparatory Pay some financial as with Digital saw productivity journey strong global businesses, our QX amid retail with the Natura of Latam, &Co very saw and strength social further ecommerce, and strong selling Body digit digital in growth Pay,

we contracts. captured with manufacturing, including progress QX. and storage cross-company $XX progress logistics million in continued on the together, the on And highlight, made is which Avon, integration major plan. we Synergies are combined made of proceeding in to distribution, [ph] further Second according working track

Brazil, Mexico monthly business learnings UK, then cycles cycles International, from in We also moved five with early reduce model also South commercial rollout capitalizing and relaunch year weeks to and will the digital next initiated Avon the will online including brand and countries. we pilot At campaign in on new Me in of over two began be Natura. campaign costs. channels from simplify mid-September, in model of Africa, The three Avon’s Avon markets, the the Now the which Watch through XX to in

key our highlight, agenda. ESG Third

and on and announce Also sustainability commitments, to We two line Shop. that with Equality, as in to pleased change determination tackle Celsius and our are inclusion. joining X.X B-Corp, Aesop Ambition and initiatives. Natura diversity to of we Gender key partnering the was climate Target degree United very are certified attest Nations our the a now XXXX Body issues with both

Amazon sustainability which We with confidence by accelerating of programs done in group attractiveness around highlight. And optimize structure capital digitalization, raise participated market Awareness validates our to with and led to capital billion the Natura, priorities, also largest from our our And the and prepayment and four was strong geographically Cancer Month, education also deleveraging the America space. including our October, group structure in bonds. of the to and Day of do strategies. the capital financial Latin by completion Breast the the strengthened world. the major was in credit attests of millions raise the of We appreciate rating for to the successful Avon the in Avon investments integration, allow agencies, us make We ever vote a The consumer the commitments. XXXX expansions, strategic Avon accelerate women that XXXX $X with

by Let normalization saying COVID-XX from some retail our me pandemic is far strong to here over. in return very a operations, that, quarter, a and the seen have while we end

restriction context, its I'd of across closely monitoring group particularly the are across We the this parts in our and evolution the to recent world. lockdowns or worldwide, Europe. like In thank measures teams, adopted

resilience, and Our dedication. purpose-driven that efforts, challenging the times excellent performance in their face result is this we of

detail. to now our go hand to into me Let over in Filippo financials greater

up have were currency, you sales of to strong Natura outperforming currency. five, Avon at XX.X%. very the X.X%, phasing and XX.X% reais up constant slide in very and at Aesop brand excluding the hello Body Aesop market. the XX.X%, increased QX currency, quarter Thank XX.X% see in cyber XX.X% at X.X% currency. currency. increased On grew Latam’s In constant net X% in performances, reais, months constant the X.X% &Co Natura revenue X.X% XX% consolidated Body and performance while at of you, reais, constant reais by posted the we strong XX.X% in Shop XX.X% up in reais sales Internationals that was the the effect constant Roberto constant reais, revenue and and XX.X% consolidated and revenue in at incident, revenue and the growth down and The significantly XX.X% sales down and with in the well currency. by reais constant in global CFT Shop by at nine Avon currency, growing particularly also in The increased everyone. in the XX.X%

more in of XX% nine grew mentioned, retail we EBITDA the and our of Avon the XXX% online XXX% number content the that Natura grew orders Shot business brand grew XXX%. year, strong of across since months, increase and reached increased driven and we the slide consumers all sales COVID-XX in consultant impact with posted by solid XXX% XXX% six, online was sharing of sales notably QX, by the EBITDA representatives quarter, EBITDA sales XX.X%, Body managed grew up by sharing Roberto by to the Group's reopening rapid at gradual mark. largely at million basis via offset to seven points. by with shows margin adjusted XX%, e-brochures more At and stores reaching year-on-here online Avon by by the down at the adjusted in the in margin of EBITDA At brands and quarter quarter excluding the The at pivot Natura discipline costs. Aesop and throughout the was XX% was supported than at XX% last transformation the &Co As than topped same R$X.X EBITDA Shop. stores doubled and growth XX% businesses, Aesop. e-brochure basis the XX e-brochure Natura Body was complemented quarter. adjusted International R$X.X versus very the followed On than by strong billion a Latam, to online, In pandemic in the and the adjusted supported in cost consolidated Slide EBITDA accessing billion, XXX points. UK more by up XX% X Adjusted

the by generation income tax income effects strengthened in Turning Natura month. expense, depreciation XXXX Avon capital X.X%. million, financial of QX, R$X This in capital the raise due in income us it underlying of allow billion In costs. proceeds billion to &Co’s billion quarter in R$XXX.X to the at higher excluding show up to completed On we used capital net was eight, at partially denominated interest in underlying accelerate and by We $X was slide the which we end strong we million, of net the with offset Avon's growth volatility currency up had quarter, R$XXX.X leveraging, to reduce have X.X%, R$XX.X net net allow costs. beginning loss before that debt, and by sheet Reported at US lower $XXX underlying In the R$XXX, our nine higher prepay The the we months, successfully that transformation and last from cash million. raise. bond, stood the expenses. us balance with will this driven In quarter, reported raise the income EBITDA income. high we month. cash the acquisition R$XXX.X slide and nine, net reached look million

early from QX, profile, to net to our see and balance and credit drops QX, the you ratio the has upgraded times The from outlook rating the three Fitch post As sheet by stable been of S&P respectively. times prepayment both agencies X.XX down Attesting graph, strengthening of at the and improved the it on end revised to and in October was we end of of times bonds. also were Avon November our negative. at by to EBITDA X.XX debt

maturities graph of billion, have limited with schedule average that of The provides X.X years. amortization second you R$XXX with this and our debt year shows maturity an we

we Natura up XX.X%. constant with our were at XX.X% were XX.X% The by Argentina, XXXX were by constant performance consecutive in beginning XX.X% X.X% up revenue quarter with reais reais constant was increased year-on-year in look slide exceptional at X.X% and in quarter, the at currency. selling Brazil The higher of brands. the showed Chile representative which up activity. productivity Ex-cyber an growth constant currency. in which grew we signs to whose Ex-cyber consultant &Co a turn XX.X% XX.X% million. with in reais, business number QX X.X% QX, on demonstrates reais continued increased saw the and strongly outperformed XX, Mexico. net sales Latam. rose versus gains. even Brazil, market solid growth the in up performance net X.X% of numbers brand XX.X% across branch brand in module, in Sales On X.X XX.X% and up at now XX.X% to posted XX, increased up led an Hispanic and notably positive the share Brazil quarter and higher Hispanic incident CFD to our XX.X% driven sales in to at This in sales XX.X% incident Let's early Latam. Natura impressive were by Natura currency. and in base, this currency, which nearly of brand Latam success Avon market by Brazil, and In social higher XXth net consultants in Total represents the and all the XXX,XXX. with In unit, sales in and average preference driven growth markets, by by Natura reais slide the

and higher number was Ex-cyber by first growth quarter, down Turning constant reais, Ex-cyber QX, currency. in key incident, revenue of and and activity QX slide end Latam, to by such by doubled of level posted as currency. growth Avon's and Adjusted at Argentina, Mexico incident. Avon Hispanic and positive in contribute improving Hispanic adjusted X.X% brand XXXX, since On was Chile, In X.X% of growth Natura at Avon the improvement Brazil &Co and points sales in Avon constant was September on this billion, driven Latam operational XX.X%. leverage slide EBITDA towards revenue the Natura impact XX, The the growth to revenue EBITDA Brazil grew margin Avon. was helped in up both in brands Latam. and XX.X% incident, at the XX. growth XXX increased currency. and by XX.X% region phasing quarter, to posting reaching down for operational X.X% increase, with markets XX.X% the in reais in revenue also The basis Avon from representatives. supported cyber trends with Brazil saw leverage Natura strong of in the R$X both the nearly constant the

by government in recover Philippines. such margin impact still to of as constant currency. move Most R$XXX markets Russia result hire the X.X%, move from revenue Net markets by Western to now versus a on Turkey basis XXXX, QX of was a leaders, down in retail margin with markets constant up and XXX million points spent Central basis of related reduced R$XXX.X Ex-cyber to markets and IFRS On the investments International growth reais offset showed at XX, with by at discounts, lower driven X.X% partial QX of foreign EBITDA and slide very growth helping Body such COVID-XX, million conversion well and by Australia, lockdowns, Australia. Net and retail impact outstanding by support. the growth, XX.X% revenues, XX.X% revenue of reported discretionary and revenue, Let's to XX.X% fuel supported in by digital also At-Home notably down XX.X%, Adjusted impacted Avon the revenue and This as slide XXX%, points like-for-like Africa Key increased slide sales sales signs X.X% by online XX. of a growth on XX% the currency as the end channels. in offset grew strict Europe. was the driven constant up The by in in had direct We XXX strong currency, and reopened. of constant adjustments result increased incident, EBITDA retail and recovery the but QX revenue by sales, down and Adjusted XX. reais of impacts, sales in growth offsetting reais, on was in XX.X% as UK quarter of closures XX.X% direct G&A. increased the in stores at consultants, of in as reais currency. in posted US net in XXX% QX, slow and strong as COVID-XX as in sales X.X% Own-stores XX.X%, in lower now grew were sales sales sales, to Aesop constant growth currency online South pandemic. decreased currency. XXX%, performance Shop accelerate the driven in such and related XX.X% COVID-XX

reduction XX.X%, an sales utilization support and programs down mitigate XXX%. XX%, at COVID-XX. were up margin retail to cost EBITDA While basis sales were with stood of impacts online government target like-for-like by of million, QX R$XXX.X up sales EBIDA topline driven the growth, up XXX.X%, impressive points, XXX of

hand Roberto. Let to me back now

Thank you, Filippo.

conclude on slide takeaways. the now XX me key Let with

model of more in throughout strength all, First COVID-XX has &Co’s Natura shown and generally the crisis. the omnichannel past its quarter,

All resilience business of omnichannel. digital social increasingly quarter. results showing also drove brands our E-commerce, strong and and are becoming selling this and

by digitalization planning momentum. our Brazil. We progressing some Natura further in with in of QX investments driven integration Latin in a this The America, to posted strong early build increased on is in performance positive We areas are well, numbers. Avon those signs and and Avon

of &Co with forward another digital Our journey the Pay. step took launch

Week. in as UN ESG involvement B-Corp demonstrated active Climate Aesop our becoming Our at advancing, by is agenda a

continue investment to Lastly, $X future. billion we structure, growth. have well to successful &Co have very our Natura And position raise, deleverage areas capital to we sheet. key the with the resources further our in balance boost capital optimized we That for accelerate

So who across for to our the thus once quarter, I'd teams this again like circumstances. group performance. been has you much by by your And rewarding to Thank a conclude this attention. very challenging gratitude my enabled expressing

going Q&A to session We questions. happy with I take JP the and are your to are now Filippo, open and

now yours. is the So floor

from a We question [Operator Helena from BBA. have Instructions] Villares Itaú

Hi, to guys. we more And want taking morning. is results. Thank Good about JP, the first My you expand a really for my actually for congratulations bit little question. question you for very in are dynamics, suppliers. we about Natura what And showed. saw of terms trying topline you brand we gain understand strong profitability results is here share market and to the that

kind the and are us sustainable for understand of could KPI that going you just quarters we So with the coming have to share any for if to understand gains you market much how of next next something to is be - trying share these is This the about question this a the new actually Shop. profile that's the little Maybe question. sales direct us could second clients, of the help clients, Body year? client And So our Shop. is for first about Body bit. about figures

channel, So new the – to what here profile. and trying what we about completely trying sorry, here consultants understand and understand is we it's a are are to

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share Hi, JP you? here. Natura brand Elena, take talk the and I’ll – I'll market Shop and subject about Body let Roberto the How deeply. to going We're then start to are

Thank Hi, the question. you for Elena.

The market are experiencing in indeed, year-to-date modest the single Natura in market we So, gains has share brand Brazil. digits. grown

stomped [ph] gained Natura's when by QX. indeed, to has in government compare high in markets [ph] However, that in QX the digits shares. all Nevertheless, have incentives. yes, significant market The drawn performance, market the single you we

over continuously of been the has so, and succeeded the have years. years, Natura sustaining last we the gaining the case last four share in brand As four market in

are you digital was reflected brand also increase are already and fundamentally will. These of online digital way which new That some are has completely of as the a society's they company then also channels. consultants elements, there more XX the the strengthening were than And during of shopping, younger new they're if and which with expressed preference younger, tech-savvy, in together consultants, in-tune average we or through period, pandemic in bring the themselves brand used concerns. And customers, indicated. a this the that an brand. the desire. some sort new to years Saw come The For network. recruited with

saw we just from Following the of which continued also increasing pandemic. in didn't not experienced had to And the that loyalty last we new years. levels stop a launch - products, finalize, consultants to through consumer

ability all that consultants, new shoppers And with To So that a and give in the for also and combined, the the shoppers later. new and are acquire retain what to details market share. acquired with of that period. can I extent, well we brand Avon you brand, to witnessed positioned omnichannel lesser acquire the the consumers more we solutions the strengthening that's

some JP. and said to you, two expanding on so world, Elena At-Home, similarity in US. At-Home, quarter the into over primarily Body is JP is Thank that we as Brazil, this growth. markets have there At-Home Shop, know, XXX% seen In Australia, are on have now seeing right, UK, what what we the we At-Home explanation the just we're the you

the a of JP strength UK, with Body think period about We thing in which But one in also is now, consultants of of alluded connection especially that very more symbiotic very the driving into a already also The very I brand social selling. XXXX more identity, profile recruitment to brand. present states, consultants new Shop therefore in tech-savvy, native right, is the be important, brand XX of those to, it's tend are consultants. in digital, recruiting time the short the and the

profile digital of of So accelerating helping rejuvenation, a profile the positioning the effort the selling the consultants And at At-Home the the business. of At-Home Body younger, is of business. more the the is savvy the bringing social Shop, that whole Body brand into Shop helping activist

this Shop. about Natura you subject, Great. and for Body follow up talk a And about just just because this

this think maybe we side other that also So is the favourable...

- why. brand relevant brand that's so the that rejuvenation belief in brand I we're a XX Watch new roll the Avon as absolutely. of is also of one a more Yeah. attract try think of new for more the we profile. that Me because strong exactly the countries that is there mean, things no. we a ability to the priorities why brand stronger. very with that's our consultant we And Avon make out key we Yeah, also to is that's the strength which make very connection one of excited the even over as Now position selling this about social campaign, quarter and

Thank you.

question comes Bank Ford Bob next America. from from of Our

of congratulations the quarter. on what or everybody - JP, in the commercial to turnaround Hey, of terms optimistic model, in the from and optimistic terms most in you changes addition broader makes the the the based the or for International? you're Latam Avon International that when in And comes Avon transferred network, it on consultant or how prioritized Brazil? to what in brand synergies a digitalization seeing is and

Hey, Bob.

let to Avon So comment on then ask International Brazil. I'll on JP start me and

on even of things at be taking International from Of Those learnings on okay, commercial the that's still a statement, are course, so implemented hasn't honest, been come, Natura to segmentation. Avon right. yet, your to the we to model, lot

markets would we especially come at this and Natura, are year. in in be and growing also So Africa we a Avon, implemented QX are But International seeing to in channel using at already is JP on seeing as of wins framework call kind well double-digit, on segmentation increase of some the the will Latin America. actually some four Avon quick the while key from planning South we planned retention with pilot same additions, is I pilots increasing. are the

earnings the were see to a And seeing on churn call starting we again, there, we quick are So things are wins market share are it those International. strategy gains. Avon lower and that on already

easier and The UK, encouraging the Poland, there's saw time to some know, of clear, be adoption first seeing but, is terms to a used we market to I wins, Russia, in, yet to which consultants be driving want little positive digital change the are making much done. But we what new for true to to you the a especially level model implemented. So for come before. still higher commercial a segmentation share in with channel on be gain than in lot to be

number those to key in as well, So all contributing increasing in of some reps, those markets. active productivity are especially of things some and

turn specifically JP about comment in to the and I’ll to of Brazil some So things Latam.

Bob. Hi,

we Latin So indeed structural recent Avon Brazil, particular. on positive are in about And results they the yet of the are across changes brand. as Roberto pointed and are out, but they we quickly of – - America, ahead you know, is it resumed more and not suggest investing they in Avon based us us. behind what the the path brand, that with Starting the

in XX positions in for Reputation the Merco So, Brazil, Ranking. instance, Avon advanced

Power resumed technology, new associated the also advertising line the launched ago, inclusion. [ph] market two and very relevant for and with weeks Black of line related days our you with causes Suede new ago, We communication, social only to outstanding Stay know, couple we still

next but of towards the be brand So that started here and in year, America is to early pointing seen relaunch geographies. the already Avon Latin is that other in

that Avon reported Avon the talked are indices incentives many also Brazil, well place the direction. proximity concern also in some relationship - years, satisfaction the period, strengthening which We the in with this the as in of showing right the representatives. is being representative of put in satisfaction are And that last as the highest indices, in about field, with Mexico,

been market. through be the this tailwinds of to to starting show able have combination, in sort we with that we living So that are

will that through year, the us on that is level that the the changes growing gives [ph] across sustain based able Now, the we the are next when confidence come momentum that be positive entire on, pilots structural Avon going already that early to

there's one you're Thank those International. much. that on was Avon follow hoping step in some give color is, And the a could resources? you channelling big additional up just And up. how And SG&A very in I you

consider of Hi, But I we I International I is there to I programs trend. Avon think Bob. see you believe - efficiency, on you? being How is said, place were that of of a there's we’ll those in is this some very saw in on here. more I that also to I that, channel. don't make put Yeah. were think have a lot dilution in less there wouldn't are think that as what specific investment the sure also is terms see the that expenses.

And So that it lot. helped us impacts. a

So considered then that as could the can I a just And had specifically going we situation It's trend. I think something a forward. a this be see think is quarter. standard don't don't that in we that is

Thank you.

question next Our comes Cathcart Richard from from Bradesco.

and morning, my Good question. much for very taking guys. Hi, thanks

Just Avon wanted of it's piloting. I the market performance in testing a UK. and little about ask more know bit to you're the a of lots that doing

gains the just talk digital the to in update could for addition second are the just so And in market you your bit of And whether out a building give in us channel, you the of question the couple a more could share the Thanks. little was an implementation tools quarters? about what China? in drivers then of just on the over last UK presence plans the bigger

Hi, Richard. Roberto, here.

adoption selling in incredible lot on really, in increase One the I social we right. mean, UK focus point social and a the too data seeing this we are are is, e-brochure sales of almost quarter. UK. were in XXX% you're putting So UK up of selling in

move we monthly is UK on driver of also share Avon market to key say a gain. we that the simplification the of now I are also catalogs, of are on this really, the on cycle. more portfolio putting campaign, So, would the the a focus

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still to are signs positive early they're early done. signs, very lot encouraging - are But seeing some a we that in So be wins, UK.

&Co us, and Body for Natura Body Aesop stage take committed our the the a We to we Aesop year. of establish are already but Shop especially registration legal Regarding entering are of it's we will China, product process know that now more starting China, next you with entity and and the Shop. about robust first half early the make probably now very China.

that course, and not with working Of To to testing sure we been in provinces. animals. the careful it will align values with way right have our we no very continue of – do make the

Aesop in next planning Shanghai to to the potentially year. enter also then have expanding first So as the we Shop. And are fourth be we in a that with store, quarter physical Body likely XXXX, of

Thanks much, Roberto. Perfect. very

We question from Couto from have a Santander. Ruben

Can to initiative. everyone. be little about a Pay? seems new more Hi, a &Co talk very interesting, bit you This

monetized revenues of initiative direct and the wanted sources Is with the contribution the financial to and could Thank be benefits that or chiefly already you to what solutions do kind could previous you to bring expect is incremental channel, to of consultants you that to features understand eventually you. other to improve through this understand and wanted in what offered banks? I I partnership difference consultants revenues? compared So or results. expect fee will in terms productivity that give And of also

some a of validate we in I will as initially worldwide and then need that here, scale a Roberto, know, lockdown, other and incubated the we're treat Latin going you thing up in that, start couple go in Ruben. them years. &Co in America to have you Pay, unit, saying that just to countries Hi, business really to

the and capitalization a equity. now dedicate about the your questions proceeds accelerate details We to JP of are excited some going the And on about of also part from that very this. to to came benefits. We're productivity I’ll give the the development

JP? So please,

new Roberto hence, Thank has new P&L, a is you, its out, own business a generates pointed as so Ruben, Roberto. it which stream. - And unit. it it's revenue new

new It know enhances the you consultant it strengthen an higher experiences, the and out solutions, reason our is from to previous improve because it, partners financial the relationship, is initiative is our from experience, solutions building. Also, information different precisely in captured, all core within that that previous completely captures so knowledge core you has used However, is consultant’s and that commercial integrated, our the now payment for benefit, we know, about this is is meant to productivity. we Natura unendurable streams. the it's an better through right. business that [ph] relationship drive the revenue which that you that pointed orchestrated embedded that experiences, have and And all

all into embedded completely the journey. new, is that beauty consulting So,

Thank you.

you. Thank

from next comes from UBS. Our Gustavo Oliveira question

Brazil on led of lot follow of everyone. you're question. in joining to or out base the is a that the Avon may, I that to if doing that the question in consultants a countries? features then base? travel adaptation countries? would nice key comment in the to are morning, taking my there like in other be what across will model several Natura a characteristics new new in What could of new drivers you a what be it if are for second the be, would in understand, to you. standardized consultants the commercial these that can there more you of to roll new Brazil well, plan Good are Thank I your number if would And you increase Avon the brand, what consultants? the And are Thank was very think in approach? increase mentioned Roberto, that And you if

team notion Brazil, Yeah, sometimes really what the Gustavo. in first growing transactions the International retention very the during and it's you closely value where the with transaction, more believe to question. transferable teams just Avon driving really understand in lifetime Roberto, What is channel. of than again, lockdown and here. Thank the key are productivity important for we the segmentation, working elements the just a approach of is the the the

So International there is lot is simplification a the already Avon of being implemented by organization. that

a what lifetime of and want again are validate All the monthly we value I ongoing. that cycle say it's it simpler of again, be. I things want, prototypes As it, the would are some segmentation to something want reps on used focused Latam, we as sure we works do model it earnings for you to to as mentioned, P&L probably well make it of approach already that, than pilots. those But it. to and about those well. even We segments, it not each that that adjust a execution, whole. great we need are each simple know in it's a here make also that Brazil, sure to But because excited in one works did We segments

I on next think the it's know, preparing notion and but year, approach. as pilot really it's lifetime you a segmentation we a idea once sometime, validate that a starting this are nation, based of in Africa. South then we value rollout, And

comment accommodate we question. model of to JP. can I'll International, terms the then else and anything turn the that Avon of So you in to [indiscernible] transferred JP the on specific

just have contact Angela America. here her North team highlights. in That team been Oh, continuous with and in our Avon International,

So we've years. over the exchange had learnings can the last we many all

And gives necessary the transferred you that confidence be that know, will so the acquired us know-how adjustments. the with

are digital became we've facilitating the that question, learn the other new know-how drivers. to all and of the and the consultant, customers. reach about and seamless increase. new One of think consultants investment their developed those for the and that one number I - and Gustavo, two how activity in So That's on to recruitment comers your there new Brazil, on that main drivers products really is to

able are far. but younger good to consultants, that, to The people the other this higher tech-savvy. brand, They are of one, trying being they're allowed average that because environment. love joining unemployment, years are, more find And network They course, to guess of time shopping average on is number than alternatives. of didn't consultants, that fact XX through reach that of And customers spend the they network. At-Home, new experience our I find attract the a so already digital and a us combination mean, new what, the

So coming through they're back to the new brand recruits. these

for thank question. So the you

Tobias Thank you. from comes The Stingelin Citi. next question from

you. Good on thank Congratulations results. morning. the Yes,

already? to consultant of I do will extent, increase you [indiscernible] continue the that consultants are and question. some native first the the indicators more Gustavo already In number more follow question the this in tech-savvy trained, regards that these is, the to a to up they question they posed. think just kind to is This think that of Do have you mentioned environment. kind is that of of productivity you are

that is to question you satisfaction let that’s regard increasing high. in you the you just us why mentioned consultant satisfaction increased in know second of The Can is so please? Avon Avon doing consultant, very satisfaction Brazil the are much? What

will Please stand momentarily. by and we resume

Hello. Are back? we

may proceed. You

you. Thank Oh!

we We here. a I Tobias. new to about recruits connections our me Sorry, their it's talked problem we stopped was from the resume talk let had - so about productivity. I where that think early I saying with and too lifetime

about you started is you with that they our incentives, terms ahead And I and performance difficulties new our that proximity historical the However, to asked sales the of representative elimination sales that of with them new navigate them satisfaction, of combination a consultants, records in a sorts can of pandemic, also tell team Thank right. the all you. through in of face they burdens of in during operation, the helping period. Avon’s

you. Thank

Sgarz Irma Sachs. from question from Goldman a have We

beyond? opposition large just where the question. the to or are sales thank just thank able have for curious Body stores. in the was second reopened store from you've here? at very sorry. that’s next the adjustment the to to have But Shop. I then the afternoon, good those and much just both in the little curious how you for impacting you Well, third just trending quarter. that it Europe. it or the then, sort to how Shop, the of a reopened Aesop trending? taking EBITDA know margins and Body about you how but stores for Shop really you Shop, Aesop I just you. you're the been already, the helped think very But Body a both very look trajectory quarter? specifically, good connected was of my center been curious sort the Aesop made about chunk But growth I footprint of see the for minor Were if at – thinking for number afternoon maybe you and question, question, been us good in or sort And magnitude be Hi, Yes. franchises we puzzles bit in you And and Thank growth know morning, you of able extent provide to much. for the indicate this Body And that support should that margin in this about when useful maybe to quarter. have government I'm some of XXXX

Thank you. Thank here. for the Roberto, Hi. you question.

at we the we Aesop. strong saw very store even are strong and the momentum What to is, little of that XX% mean, with reopening, the at quarter Shop bit very and see again, end of open. Regarding I this the the still we reopen of store, seeing a our stores approximately of continue explained Body the e-commerce quarter

as to be to might So came XX% the of about almost course, the be XX% what down, used but which before plus, e-commerce came down was a used remember, in pandemic. what QX, versus came more was down revenue. it double of little you It bit than to than

the to still the we store store, The strong way see person are So we prior of still pandemic, the XX%, per reopening but very ticket, a e-commerce. you average itself, in down about know in the versus even higher traffic seen with have of ticket general. performance we seeing

Of especially some now But got terms that, adjust. of the in of of course, which our of the you with most being learning enter know, lockdowns one monitor able we as quarter, QX, also is in we we Europe. to and are that in we'll lot continue things to is seeing important some a in markets,

in things are delivery, So things click like collect, still and place. those curbside all

our margin, of our can it, recurring we're XXX say I strength say of - still e-commerce at the Christmas calculation, points subsidies incentives well, which would will combination of I call you terms on to that the in regards going the we'll are monitoring point still Thank exclude fundamentals. are the, to in some non-recurring, In showing but to manage So for we basis course, that XXX we to again is that. if or which probably government think margin that, the be what we improvement question. in it's able think that that base, we shows is be about a disappear. of that, But even season the

Thank you.

Stanley. from comes question Ruben Andrew next from Our Morgan

just the I margin for Great, the guess, thanks question. up following on very much points.

more So, some Body Aesop. Shop, the showed Latam, in you broadly, leverage strong

then general, color could addition So to drivers. provide just you should a about be into XXXX? Thank helpful. is just that aware that or clarify Body if some if shifts consolidated just and points, that very be and if there's basis? is of, margin could anything Shop might as we we more or think any you. on in XQ Aesop, on And government to in That'd modeling support And for XXX temporary the be spending you XXX bigger the the basis

was a mentioned Hi, to the of before. is Andrew. specific. to Yes, the cyber I Aesop it question, the basis, is basis already XXX for think – that not consolidated that to related XXX Also, [ph] points that have just we phasing, that

and be cyber stimulus. a can of consider we the So like, would half the half

like with in to compared previous the this, we expansion So even - margin you an said, that do again, have still taken we will that if year.

but this we see. how is this going increase, think course, - see hit adjusted basis quarter, the trend that had of forward, to to And like to I said. we concede, will that we on believe I expect So that's

from Giordano JPMorgan. Joseph from comes question next Our

Hi. my question. They're couple taking ones. Good everyone. morning, a of Thanks actually for

integration. is one on first The

about saw we disease. so aids that light the some So that's the the So deploying now And restrictive and So do particularly you probably had helping this can outstanding question. second question Christmas, an are you first prepaid context we Natura Avon, emergency on is, what on to feel could most Brazil, right? in particularly have growth for guys if the technology my outlook done like you you how your shed how bond? you some be in

So - and mostly that mentioned sold and you you fragrances. perfumes

in past you and about feel packaging like events? of branding terms and the how So doing the it you strategy you. what's over do calendar have been like Thank

Hi, here. Joseph. Roberto,

a us of Aesop or those this will some of of terms the some scale of subsidiary bond, Body global aspects those optimize prepaid combine again we covenants better, opportunities especially to group, as to Shop structure and that of our overlapping at as So have, the terms of allow have and geographies. in the a we now Avon, and the some continue restrict in

on that flexibility give will optimization more So that. us for some

this say synergies, they would track, improvement are because million is already synergies of In I on the part margins also explained that the quarter. we are capturing in of of terms $XX about

So talked based our that's guidance on and communication on in track that back QX. we it about

excited it. So about we are

manufacturing centers, but very seen driving And very our only and already Avon. Natura between costs examples reps promising that's especially distribution improving way are sites, are services and We a in down, to Latin of material in working in America terms combined of consultants. not our

And right? So that's think that's I I also it, I was exciting. pretty did - think anything? that miss question? your On

Christmas?

on want you to comment Do that?

Yeah.

here. So Joseph, JP,

quite of of a actually, gratitude. each Shop, are with prepared all that, important. dates Christmas, to all for the to willing each Natura, you we businesses in pandemic, the are see think of And to celebratory the of these do token world fulfill regards well other, Body know, Christmas. other, demand around that touch be As the people And send spite will each the

with the demand and we might serve look as new far. do. how that customers you've as And dates, different here. relevant is other didn't think intensity to be so we will And heard so be Perhaps business at that the in what what learn That's ways. Avon those same

and we dates Christmas those that tell So for I celebratory Avon’s particular. in are can for upgrading effort you

Christmas I out of will campaign. - see the relative positive from think performance So Avon a performance

Thank you.

Our question Eleven Financial. from Bretthauer Daniela from comes next

But impressive, that very then there. in but [ph] decreasing. Brazil two the my answered. is everyone. that release already a topic morning, have lowers growth it's One actually in Good Most the up of the on Avon, on the you productivity to channel results. just Thank mentioned Congratulations But fold the And follow it growth been was at Brazil. mentioned channel still wanted you them you Hi. returns. taking growth, questions. only for on not I

basis? it second channel the or And in do I'll Because do Avon, change? pace? second productivity clearly ask growth reduction think a my a then number this on when and And see at fast sequential the one, So you flatten has it Brazil on question. doubled will we remain

in again, So terms of would implemented things for overall of the haven't what the some we yet. say I is, Avon, structural

are simplify again, that to some make the While actions join. we seeing we model, took the consultants for to to of easy it

we that's earnings the also made that course, couple model, we the a Of in that on are it's efforts changes sustain also - of make what's we on churn is a that a part of rep of the reduction helping we And and and as the translate while all mentioned. longer selling adoption, that. seeing social

comment Brazil, specific. JP? Regarding some JP to I'll Please more invite on

to hear from Daniela. you. Hello, Good

of our of know, Latin you America, selling. direct though, for Brazil, Natura didn't approach the highlight - number So and both that we American Latin yet That's of productivity to going social representatives many selling But sorry. Avon consultants. and to like see we're push the nature and consultants. the I'd growing that In grew gains. of Across Avon number

face conclude more want So speaking I just much lockdowns. strict, the that more strict countries to Hispanic saying many of

now. numbers And going see to as improving so Thank of we're you.

you. Thank

to reached with Roberto proceed his go the would to the Marques Please end Mr. question-and-answer session. Marques. invite statement. closing Mr. have of ahead, We like I

Thank you, everybody.

Natura line, happened, entering on of that what I apologies for So let know so don’t apologize, me first somebody the behalf &Co.

results it our we topline really of how very testament sprach our performed. performance It's quarter from from in growth, any an one that in excited a teams. any really of business, we each are margin a or look outstanding about which expansion, We at angle a this solid from very in is really [ph]

a Our and also four when omnichannel, selling performance selling, e-commerce, approach both physical know, through direct the you consumer retail, social really our out compounding in amazing and working our our on of iconic brands to synergistic see way, we direct business.

parts So excited monitoring the events that, the cautiously about monitor with future. continue the outperform those We Europe. quarter. of of to we'll we the to Having are continue optimistic very we'll also on some said really, market, believe lockdowns in recent but

for very to course, of to global not we'll But talk we well anyway, Hope in continue and monitor joining and adjust stay stay response thank you to still much you you. hope guys soon. those you and all so pandemic to this are Thank and fast safe challenges. We us.

your much good a Thank concludes you the for day. today. audio very conference participation. That Have Natura &Co for