Natura &Co Holding (NTCOY) 13 Aug 212021 Q2 Earnings call transcript

Good morning, ladies and gentlemen. Thank you for waiting. At this time, we would like to welcome everyone to Natura & Co.

Second Quarter 2021 Results. This event is being recorded. be mode will presentation. the participants all in during listen-only company’s And Natura’s will there are a After completed, be remarks question-and-answer session. further At time, instructions given. be that will [Operator Instructions]. This forward-looking presentation may contain statements. the statements management. Co.'s fact are Natura of statements expectations of not and Such reflect beliefs and & historical

does only in company the light This information future undertake statements of and speak they presentation made, to and reference have information which audited. developments. adjusted for by of new company as Forward-looking any information also date obligation the are only, the not them prepared been includes update or purposes not

Now I is will Co. Behar, over turn Natura Behar, Officer Mrs. to yours. Mrs. Investor & the of Viviane conference floor the Relations

of CFO Relations will your Instructions] me Roberto to financials Natura our please? remarks, will over floor on open Co. Natura with Latin relations Officer. you Joao who CEO us will performance. Natura will or call & present available welcome; Roberto. Castellan, Relations Marques, and will Natura also for joined & that, Paulo joining Guilherme questions. Let this & session. we and The good to make Chairman we Co. Q&A for Guilherme us join very Thank this Co. Natura to today who to are & Roberto today The Co. by morning concluding [Operator will & I'm hand month the & Roberto Roberto, and Executive us. overview XXXX Viviane during we website. After of is last investor CEO pleased to start Co., Earnings. afternoon an quarter as call and America, Investor Co.'s Behar, Ferreira, today second now over Natura for I'm presentation for detail the team of took whom is be Good our Co.'s to everyone. the Natura & Investor with referring

too again you all hello, continuing everyone. safe you Thank are be Viviane. for times. Thank to of these Hope joining you, And challenging in us. well and

Let highlights. turned Slide quarter another the an me of overview Co. in strong & second second performance quarter begin in X, of on our XXXX. Natura

sales important margin group support containment Guilherme income. global market. year again up more XXX government of EBITDA been will and posted strongly, the was the in a benefited CFT in we And outperforming the without to impact, QX in point adjusted this XX%, EBITDA increase circumstances the more it's once significant explain Our period. base Adjusted impacted cost that a at was last while from than exceptional of that pandemic effect grew points net detail height up some as also strict by out year. basis by But a have last would margin

pre-pandemic X appeal achieved while a up of the some year, year. significantly continue our and and Aesop power markets, performance face brands, our and Hispanic by direct-to-customer This even our business and market of we half also levels. This with our challenging posted COVID-XX. in and lockdowns growth also and performance reach. very certain represented our first saw a We once enabled markets. a and both with adjusted Body in relevance very XX% Natura model, the XXX were environment, times sales operate key gains in unparalleled The and same strong in points higher resilience growth saw than reflects EBITDA healthy products our we of strong Digitally & of omnichannel challenges double-digit LatAm. LatAm to brands, markets. growth sales, to International continuing from Shop over businesses Avon good Co. performance Natura the a was again, across the restrictions while health in margin, the key above For key share basis X% Avon over period total last achieved strong

growth Pay X billion gain and was which volume. totaling &Co highlight new at in digital XXX,XXX strong Another payment in of BRLX the months Natura our accounts, total almost with Brazil in platform, we're payment a XX% piloting

improvement with quarter of of growth. cash net year. last was posted billion almost quarter strong at & same very new headway gain benefit We million are first made growth BRLXXX optimization. end net a results Avon's synergies saw, last commercial year. have is in by demonstration from position compared quarter, in Co. quarter are the structure deleveraging, compared And and positive balance even times the show model, Avon line remained integration corporate International's we with in And the cost our markets is million The driven with LatAm billion. initial last the the in an plan new Pilots investing gains The And a with turnaround ratio we on and EBITDA increase X.XX while South Nordics Natura BRLX and this particularly million with share with market Africa pleased plan sales the and We The BRLXXX drive its reached sheet. to more and and quarter satisfaction $XX in related growth in our achieve. QX are end in performance categories, Avon to marketing International. digital, the to progressing. both BRLX key in the we debt-to-EBITDA a over of income, million of underway. a margin coupled to representative further year-to-date both X.XX Avon in broadly future half, the has the robust transformational up the at in IT $XX.X in to stable increased. at which solid times versus that also year

of to to It very demonstration model, So impact is make value remains that due and uncertainty, markets we our overall, challenging which of many sustainable be in the which operate. our while aims we and proud growth performance of present positive restriction a delivering I lockdowns a business in very think creation. very can the context still in strength

ESG disclosing made the slide, following just we address and the actions, number different XXXX show a Vision. highlights a the in the crisis of mention first our but per On & a to pillar. data. as the of celebrated platform the deforestation, in zero building conservation to regeneration shows couple Commitment anniversary protect we that me Amazon June, let portal, and To PlenaMata our advances engage slide achieve began Life, Sustainability The climate Amazon, designed of Natura continued to of we by scientific Co. stakeholders

The look formulas company more the to Overall, reached that, also receiving to is to biodegradable Guilherme XX% a operates. a over Shop living an at humankind, participate Body to closer our example, demographic to financial by repeat of human set in on will our workforce first to which our or now achieve our it workforce hand XXX in return, With we composition markets also XX% in ensure multi-national ambitions performance. to up of part track reflects aim rolling date. the track to As will of have & are regeneration, And XXXX. and that protect out help for the embrace reach out Natura recycle, wage, societies be on circularity XXX% rights as to Co. of and I in on the we and stations its stores project, the XXXX. ensure all XXX almost rolled refilling having

know, As over you completing you. group after very Guilherme, a to last welcome took all and Guilherme smooth as CFO month over transition. a again,

despite of delighted to everyone. much, I'm global very we still shifted very performance. to BRLX.X looking And brand from XX.X% the sales This in to reals On in you. shortly. by much BRLXXX you that, very reflects posted HX, last constant all net and be currency, by as double-digit highlight recall, BRLXX to year up a in I currency. faced sales XX.X% meeting X, real our of revenue net that will in detail been million cyber-incident important currency, that hello all is the Roberto. see lingering at effects QX strong effect, COVID. our reached of you Without at right-hand have up to you as In constant side billion, consolidated the and in It's net On see digital of in Slide which Avon would quarter of in Thank you in QX. growth reals performance call billion. QX XX.X% this revenue XX.X% the constant reaching of reals on on on growth and that and brands, XX.X% market. CFT in forward XX.X% focus in Slide ahead we X, we slide,

our relationship selling QX to total selling which include online sales, XX% from QX digitally-enabled from when represented well XX.X% up apps stores in of most mentioned, main Roberto and as last our closed. digital were as using e-commerce, As year sales, compared XX% in social sales

BRLXXX posted which reflects raw inflationary was in margin last levels This effects prices BRLXXX as X excludes leverage, million. of pressures X as was acquisition sales the above EBITDA, of materials. this and million Adjusted effects increase and in on are BRLXXX result costs, quarter offset we Adjusted containment synergies, down as all one-offs a which all EBITDA slide. pandemic brands actions. strong driven times sales helped QX achieve to Slide reported shows very of bps pricing This cost between significantly cost for online higher a non-recurring from year-on-year. are synergies, XX.X%, Avon-related transformational at of pre-pandemic that pre-pandemic brands a margin We year's EBITDA X.X%, with benefited and million X.X%. and to the levels. you government X of by support our represents Total us see and margin XX

All HX, have by investments have adjusted to up growth. a billion. to year was margin to very EBITDA BRLX.X will XXX strong to at which achieve drive Adjusted expansion improved EBITDA reported despite bps X.X%, BRLX.X margin us the by these puts up track with EBITDA our full Excluding XX% In billion, targets. bps. one-offs, XXX businesses XX.X% on on shown is margin by will up

the in second BRLXXX in of prepayment than XXX offset lower tax, million Avon which amortization. is new income income loss quarter the last tax previous BRLXX BRLXXX the and X underlying income effect BRLXXX to above reversing million, position net PPA net posted reaching income cash almost and year. compared integration BRL Avon from end improvement million, BRLX.X quarter, with our turning the improvement deferred enabled XXXX On of acquisition-related The in balance by In Avon BRLXXX gains Slide of excludes million, recognized of billion cash well Net in We from Natura was was a thresholds. we XX, year. quarter Underlying BRLXXX a million corporate in BRLXXX at Now new restructuring. net of with percentage income same strong in the and XX%. the partially in strong increase more in HX Co. our the benefited we favorable resulting projections BRLX to reached bonds. of We by gains income Slide and restructuring million from position. look the a UK and year. includes expenses sheet a This driven integration to an tax the financial HX, the swing corporate the line by last negative minimum as of million billion, net related million, effects X, quarter in Avon see & reversing effect the point a QX

in balance our Natura group's guaranteed net $X XXXX with debt, end times by Cosmeticos and the our indebtedness deleverage profile the were X.X $XXX with X.Xx to improved maturing debt We The quarter, to while year-ago continue time Natura line as & at our lower liability our demonstrating well in plan We May refinancing Co. EBITDA sustainability-linked targets. consolidated commitment the from bond in other same at to billion achieving the was significantly to prepay management period. in ESG sheet, the issued as by of used bond funds million existing the

in cash provides graph and schedule to have that second the up The of shows XXXX. maturities excess amortization with we

in constant unit, & Natura on with Let's currency performance performance reals both Hispanic strong by at driven LatAm growth to XX. in Total turn by LatAm were sales brands, significant business and up both at in with brands. at Slide in This net the currency, Natura XX% beginning Avon XX% double-digit QX. reals was in now growth and our Co. constant and both

growth mentioned very growth been encouraging the net was constant both HX, Excluding been brands. In The the reals currency. cyber growth XX.X%. reals and previously incident, reported also Natura XX% sales and constant cyber constant Natura up were brand XX.X%. currency, in incident, for Restated have would in up Avon brand and of XX% XX% in currency, double-digit the and at XX% reals in would in the Avon XX.X% with XX% growth in have while

Another platform, payment highlight Pay, XX% social our selling. We strong volume which in billion. was digital growth expansion the the growth accounts supports XXX,XXX of quarter saw in more nearly new of &Co BRLX total to a reach over was of and digital of HX than payment

Natura's XX% base XX% loyalty share Slide brand Valentine's look of became was tough A supported Mexico. and Chile XX% launching a store and Now sales highlight Day opened brands. continued in in strong, on Day top on in XX% flagship our Natura Sales with categories, of versus omnichannel in rose by year. and a brand driven successful recorded index comps, the a was in in consultant and markets, in XX, LatAm. by in campaigns digital consultants was we growth Natura up preference. consultant XX% in Natura's the notably LatAm, also Natura in Hispanic core by continued Hispanic gains QX After In growth Natura's the as X% XXX also Brazil. after was Argentina, loyalty region. bps the number largest increased we roll and XX% versus QX increase HX constant selling with at XXXX. by QX, expansion QX by significantly Brazil and sales City Mexico and out the brand particular e-commerce our at market store strategy. in marketing first which to driven of volume, the we of higher Brazil Mexico, all in average supported productivity the last in significant higher Mother's index Mexico in Natura of Growth And currency, performance and advances a increase social

witnessed XX. the LatAm its In are XX% Avon Avon in we to brand we track, recovery seeing by Slide Natura the to is at at on turning similar brand's in turnaround of Avon the and revenue Now Brazil, grew integration signs start QX. of on XXXX. those in

incident, productivity, score satisfaction rolled brand such in translated cyber late-QX would Excluding positive broadly sales successfully brand model double-digit been signs, new increase several indicators the as and the market constant X.X% have investments model gains, in in supported marketing higher This growth by We out QX are drop and seeing commercial preference in representative The of a initial stronger XX% flat. power. representative strong supported into compared XXXX. reals in we made to an representatives earlier share of of to currency. year. led very rollout In by commercial LatAm, saw the in the expected XX% and new and Hispanic

XX.X%. ex-cyber. XX% Slide up the was In Brazil XX% X.X%, in by pressure currency million, excluding LatAm have for XX% & cyber Growth EBITDA would markets in Natura strong grew XX%. Adjusted increase growth the was bps adjusted with was which the XX% strong incident, inflation synergies EBITDA representatives cyber the a all XX% from and been than by growth minus reaching in growth Excluding representative than Hispanic raw and On in categories came the more and LatAm and a XX, integration from or productivity. higher margin BRLXXX revenue quarter, effect, HX, number to XXX by headwinds. Avon, supported and of foreign and driven more offset material Co. or

In cost of EBITDA EBITDA EBITDA XX.X%, have billion, up as will adjusted QX HX, XXX effects improved bps. with was this of margin by XXXX bps. BRLX.X pandemic adjusted the actions, result a margin that XXX such as one-off containment Excluding boosted quarter

Slide move currency. for Net Let's up Avon sales and in to XX% EBITDA. reals on we International and LatAm, in in strong saw both XX. quarter, growth Avon at in constant Like Avon revenues XX% now International in ex-cyber QX XX% the was or up adjusted in

categories strong growth fragrance affected Eastern and by be continue share markets recorded We market pandemic, Central new to as the margin key with BRLXX Philippines, increasing model Africa markets in bps of down such results grew All the XX EBITDA and Romania some in Nordics sales drive growth. South beauty commercial especially Pilots is its and X.X% higher in in compared Although reported XX% to Italy. and and gains X.X%, quarter Europe. XXXX. accelerate digital the South future plan and of Africa, of notably last the and targets. share, with in growth have positive productivity, Adjusted number representatives to initial QX share we EBITDA increased in Overall, savings in and the the show quarter to sales transformational shown average leverage number momentum. representative and as million, positive representatives than more representatives. satisfaction year, impact color. market flat offset and and line QX our of in IT with was The investments transformational ended market of inflation margins the

were X sales even This biggest and with continued growth sales its quarter resulted 'XX. and Stores Canada. have XX% all year one-off QX, last levels, of approximately pandemic, reopened a margin XX% and was slowdown bps move we The markets, for result as XXX the down last grew XX, store X.X% Australia while constant constant compared Still days result X.X% XXX double from adjusted a sales and than to UK, in this EBITDA grew Body and XX.X% XXX double in pandemic. the currency, Body Shop approximately currently times lost they reals Slide accounted of reals are e-commerce with quarter was net had was in This sales QX in in On Shop total quarter. from while effects at performance Body been such The Body by in in would a offset to as benefited year. by Shop's QX on HX, XX% as in channels. up million. of what pre-pandemic up the X.X%. XX.X% other restrictions QX more home, was In in now by expected EBITDA the Shop's of reflecting bps. in in regions. QX BRLXXX lockdowns, countries, same currency partially rebalancing in one-off in of adjusted or revenue improved The Excluding XXXX margin The we as at in Margin the at-home EBITDA are bps e-commerce effects Nevertheless, on-store the XXX% to XX% and

as lost days. expected QX It currency XXX% their COVID stores at million from Retail Excluding while these store of approximately would in and continuous pandemic. XX% Slide as for recorded Asia, the with levels. up and EBITDA as Americas Online in again Aesop In QX with by All a Japan store as outstanding versus of the with performance, growth accounted operational their about XX.X%. bps XXXX. revenue the EBITDA total was spite with buyback, XX% XX.X% in impact XX.X% the have constant XXX reopened of currency constant bps reals increased effects still of On the with in from margin bps sales 'XX a the rose even October's up challenges HX, XXX EBITDA reais were from an peak XX% XX% but were constant particularly XXXX of benefited one-off down by growth, channel showed twice of QX regions rebalancing brought in XX%. and quarter, effects, sales currency. XX, XX% result QX in margin net strong XXX sales reached last in of driven in by pre-pandemic down of effect sales and leverage. the in BRLXXX

increased these bps constant and XX.X% channel by in a despite and effects. expansion, rose while EBITDA In Excluding would effects, by margin launches XX.X% XX.X%. currency, strong XX HX, in increased were investments X EBITDA in up have fragrances very reals rebalancing in sales

hand now to me you, Let Over to back Roberto. Roberto.

me conclude let Guilherme. key with And now you, Slide on takeaways. Thank XX

strong with board we and First continuing Avon double-digit of by sustainable to growth outperform net posted global the from other among quarter, all, factors, income, path. in the another integration. CFT across strong growth market a new We supported, are on gains growth

is integration track. Second, the Avon on

it and back are new LatAm we seeing While saw when XXXX. Avon in Natura international of its we business in what initiated its in model replicates with model, turnaround kind commercial

we both rolled pilot. gains Avon international it are we for LatAm new share results transformation still encouraging where been in the commercial key has model going markets. quarter, or out This growth in with is a to according strong saw The and and from in seeing market plan,

further advances on making sustainability are ESG, all our on we XXXX which pillars Third, the progresses vision. of

on continue continue that COVID-XX. Slide growth with especially increasing to our our achieve and Let went we XXXX fourth, to pre-pandemic me end significantly model EBITDA back our at causes that we XXXX sales line donations top their basis see XX period. fight stores are the guidance at to compound the I by a important reiterating the make that us, now digital level April to significant of and omnichannel present we still to are margin of reopen. mid-teens above traction even growth digit targets highlight high-single of Investor we annual right in on as on track to And Day

the cyber and a the and this quarter our government onset from the pandemic-related support But some to pandemic of also third containment comparable a and as business do expect medium compared again, phasing objectives. of well does as the affect the in cost at one-off strict short since that flag base, demanding after that to effect very year strong a term QX lockdown effects face of me we global pickup benefited Let QX. last not incident

for we over very so from attention. Thank grow much our your initiatives. strategic far and vigilant, continue be COVID we and So to while on the progress continue to pandemic is you

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

So now the floor yours. is

go from Itau. begin Please the [Operator Thiago now The first Macruz question-and-answer gentlemen ahead. Ladies question will comes and session. we of Instructions]

Good guys. Hi, morning.

model international of direct operations exporting some the You've commercial now Avon. time selling spent to Natura's

you So And market process? using results great yet guys first far so to be us information could on from major you how you. the understand, would of that not I are share Thank initiative feel it some with would far? completing you Which second, is like if this that more model?

Hi, Thiago, Roberto here.

here's the So good news.

benefits key on We Avon the markets International. new the of model of commercial haven't the yet seen

We are the at markets new rolling out X have going lifetime and out that on Natura, of to X segmentation who value be model year. commercial the with rolling the include top the representatives actually by approach we QX this the XX up to of

So do come. that's that the And because using yet that's are lot to from And going in the really about news the segmentation is we're a phases. we encouraging to Natura of X learnings actually model. good establishing

first other second the the for good is leaders. news. is including The the representatives then phase, here be going the to and But also phase

increasing of We in them, International. are in the pilots in we One both now Nordics, have seeing Africa countries. Avon X right the in other and one And productivity. South the

seen South seeing Africa, are are XX%, haven't the high. getting number the we which retention a Justine past. retention We seeing in is that to we about all-time in Like brand,

he by new Brazil a little the So a bit the the on more both can of we well. to International results Nordics. as also Avon South can encouraged I'll model. that are commercial turn Africa that JP the little in this comment and in is pilots, on so Brazil actually also -- X early than rollout Avon advanced on comment

So JP, please?

happy Actually, at going brand regards the we a strengthened far. as significantly. Avon out levels. selling very Brazil, Their Thank satisfaction has Thiago. higher are of high increased. with market as the products lead Roberto. indicators are reps reached productivity their The price. The they And up is Thank share has the you, you, has so all-time

So of everything smoothen and those couple to geographies. levers moreover, building implementation Natura in experience and we on at other its a the sensitivity required experienced we that are had years ago

with So very happy that.

have we markets are started already -- year. America. in And Latin other rolling this still Ecuador actually planning are that We out in we

far. lead indicators and so learnings very, promising So excellent very

That’s Fantastic. you it, answers. for much guys. very Thank the

comes question next ahead. BTG Luiz The from of go Pactual. Guanais Please

Hi, guys. morning. Good

on here questions X So my side.

you in it if to could one, that? quarters, good would prices the be in social question think the also evolve increase customer And competitive here that the X Thank in as space platform. this to the you. scale about outlook also you you How to X second regarding LatAm do LatAm selling Natura? hear the only not global the but in first operations about cost in guys this The going next acquisition comment next on quarters is the to platform,

Hi. JP here.

competitive skills in As all of know. have America. of environment growing product price in not as cost very terms consultants regards And their mix consumption, and promotional acquiring, Actually, terms gross formally. that social to selling. our of the to usage slowdown you Nevertheless, managing make as the selling sure in digitally, the They reps clients and our Latin margins remain and relatively Well, margins. we but a also EBITDA master tools. been the in had as inflation, we are regards see revenues the social competitive actively, of acquisition they of we only investments

this So in time. that's point not increasing at

much. very you Thank Okay.

question The Wissink Jefferies. from comes of next Steph

everyone. X Good you. I Thank day, questions. have

from for of Talk you're just international on that strength both both to brands, X kind Brazil to Roberto learning and first, markets? prestige Avon And a mean the an of early for market? what those might Brazil as The see some maybe little bit is about co-sell the and what mass. the for you, and Natura observation your the in of ability reps

Brazil there of we and And about about and America. from elaborate that only excited what opportunity encouraging hearing The We are bit tremendous is cross-sell we not call think little the some I'll Natura Latin and opportunities, is a you. Steph. there upsell about to it. are ask potential. very Good JP data progressing. we Hi, Listen, and the in between Avon more

important and still only are markets, side. Again, This I'll of markets gain Again, on to market the Avon cross-sell detail which in categories, not Please, would to and pandemic that we in highlight seeing that overall the are indicators we more this elaborate fragrance. upsell lockdowns in about and seeing very the Brazil. pleased we also Avon fundamentals facing, I impacting growth encouraged. and are ask some some very the market of see very share the something we leading actually International in are On and share fact between those international very strict color categories. those that of JP encouraging. markets cosmetics is in the Avon key key opportunity on JP. the are But are gain Natura X is of strengthening, but

Thanks.

We a are using proactively analytics, those very opportunities, we of CRM. the have at big cross-selling managing started early data stage already but

probing various scale towards not end in at beginning but have effectively. experienced rolled of of promotional we in year. those proving out QX, mechanics cross-selling gaining It's the are complementarity Latin America said we which next will and Having proves it the yet again larger of this and year, that, that both So is share also a brands portfolios.

with So excited very that growth avenue.

bit broadly to but may little Aesop start we and and That's where the you're in the of contributing China And my just APAC entering commentary just Shop second to market, maybe Body in could think is you for curious a be in a APAC. about wasn't particular, capturing but how great. I the others, when Asia-Pacific a market? a ahead then see on bit of business? that lot are region There thinking more, question about vision the China, share

question. Yeah, so great

mentioned by again Asia-Pacific. of lot we of a Aesop So one, outstanding this driven is think I result

the registering our compromising for space situation is are non-animal ongoing would Shop. without really as especially in countries we very change us China that's now the Aesop encouraging Shop. some and is follows. that all our confidence will about welcome registration. GMP we and both that Aesop that import in products we in testing, certification North That Aesop produce. and actually the China. which in sites of to in for parallel, Body Body progressing And requires SKUs, The the a are our we And say, both in in I manufacturing allow and obtain entering is produce cylinders, the again give China us regulatory that hitting to We So The China Asia

correct. by on beginning, have Body would and will half are to of are probably year. Shop. physical And I You actually then priority Aesop followed next The first with be track a one, The presence say we potentially number in Aesop

made a is and promising. So very also taking important the franchisee investment for The as over direct the Shop of us with in Besides business as acquiring know, encouraged Body contact in Japan, a market which we more local also indicators team you about Early our that. company China, head is market us. by strategic an a

pandemic. well. in pandemic Of lockdown, but terms we're well. the the Avon, course, continues perform market Pacific. Aesop. important is largest Aesop very Korea I Asia Philippines it a resurge very market facing is now to of of that. most the share performing Philippines, last back right with on in Japan My also the Avon forth by strict for for facing in Japan, also caveat is And of and also is encouraged some lockdowns extremely which the market the post in But now important Philippines. is would gains point the also one

are closely. that monitoring So is very it something we

Thank you helpful. so much. Very

from comes Bob question ahead. Ford of go Bank next of The Please America.

out well brands? XX-year possibility is called it about balance Tukuma. other time on conservative. innovative It's protected the period there within what's press Hey, but a IP? think little a traction. talk is to How the seems good mention realistic the doing And those? quarter, adding is congratulations Can Tukuma you And sources a morning. monetization? tranche frame to release the maybe that to makes recognized your with well the June you and how being of the assets very for in monetizing of And I of that's path bit a And sheet bit then respect and tax Ekos. the various

Thanks, about Bob. the new I'll ask one Guilherme the to and first can talk Tukuma. ingredient then JP answer

So please, Guilherme?

and And you, pleasure a forward to meet soon. looking you it's Thank meeting to Roberto. Bob, you

optimize quarter, As our more integration. which you continue is to structure, as tax mentioned, Avon this assets, recorded caused in the basically deferred we subsidiary BRLXXX by we than million

million prepayment not we XXXX the that Avon some was covenants They synergies allow of highlight in gave the factored As $XXX to those to this guidance $XXX bonds. It's that to this gain important here probably the enabled remember by had in you as was execute well, the of restructurings. restrictive million us Avon that from integration.

as this working very we definitely more to mean, those appropriate are capturing Yeah, this when assets. tax to an on deferred is record there valuation I'll it's With time. be upside We course, point. opportunities and that. recognize allowance comfortable basically, comment To will we to opportunities additional in are is And hard disclosed this frame feel you we And cannot captured. good whether mentioned, So this years. we we what that. pass the about and at I your time Though, is quarter and this of question on the at that, the we're what JP. on XX

Bob, asking. for thanks

group, that which those We cosmetics of excited the Tukuma. one ingredients into anyone of strengths your ties to property. the very highlights of with in -- Actually, the bio of won't bioscience, questions. the it squeezes just active ingredients fruit, and the of agents get ability richness one that transform industry, are understanding If to

own significant is there acid. of ingredient, to behind active by to properties, regenerative generate is which then its this has Tukuma your which is proved translates patent. which hyaluronic protected So it transformation the science And skin, into

best-selling So with Thanks. we're excited the that variant second under and line. now it's very Ekos the

The Brazil Aesop America? mean, there is is or in role role brands markets within outside Shop for other in Natura -- where of And a for not in and this a you would overlap? Tukuma does there I Latin Body

claim, explicit a to that's lot an with the line. as So do Ekos

not into now is it's brands, how active areas ingredients Now discussing as group where formulations one various translate this to of the even the of claimed. those an explicitly though active various the is ingredient,

discuss the rights long you just have the do the patent. you How is could And or mentioned how -- long the you duration patent? of

I be I'll this glad you the share at those wouldn't to later on. Bob, with details know point, but

all Thank And the you congratulations much. on again, very traction.

go comes HSBC. from question Please of ahead. next Felipe The Cassimiro

Thanks questions. Hello. my taking for

of helped Co. in Natura to initiatives updates in country market additional And Mexico, with side, see give of integration have recent I brands the maybe the bit Avon Mexico. And step that would on you second all -- APAC, like explore said. in the of in a any Mexico Avon to follow in do more as Asia would & new also, explore there. a you like up one, the synergies Could the for operational I initiatives you the there explanation up update First, largest that us to to I the markets Philippines on Is colored the to on Southeast second more the the well. an just on months the color brand gained in in the so perspectives doing on follow-up LatAm? XX country? on be on in in Anything Roberto Thanks. interest is wanted Thank maybe? next what this? on

Hi, thanks. JP speaking.

sure. brand, omnichannel Heavy As of development e-commerce Couple things the the recently one. of the and the there. regards happening opening behind and solutions growing stores. Mexico, various that's with number the investments Then of

is main plant some like highlight As the Natura's synergies, to explored being the synergies, the operational SKUs. manufacture But usage at to I there in for regards would Avon's many manufacturing point. of Mexico one of are to this

the is focus our new continue and And the of brand commercial regarding to to really in priority on digitalization. the rejuvenation model, Asia, to Avon

would in we're really let's but strengthen make to our we Avon this brand and not of China. I model, group, sure not strengthening position right want markets that forget in is presence that also to China. our new say Avon also the the at the effort now, digitalization planning can in commercial So we present to enter with And And new rejuvenation.

Okay. very Thank much. you

Stanley. question go comes ahead. The of next Morgan Andrew from Ruben Please

you how more very I balance hoping between progress the on update growth wondering question. think productivity. you And think consultant into pivot Thanks back about was will picture, Brazil. color count to if second half? bit business? could Natura productivity Hi. bigger about how for the you consultant the the you. the right was I any for much trends Any and on to talk a Thank

the for Thank you question.

in As you QX, -- this of They point. was of events with less huge increase somehow consultants know, the they There QX, productivity the were And And abruptly. QX I way last reps they the mean, are productive. are very distort at report we exceptional. in of us. consultants' number year a younger

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normality return question. numbers should for those distorted towards a year. for will QX So Thanks be to this period the and

Great. Thank you.

Bradesco. go of ahead. The next question comes Cathcart from Please Richard

for Good here. question. morning. taking Hi, guys. my couple Thanks A

Shop. The on Body firstly Just

stores think have mentioned, XX new quarter. during format renovated into You I the the been

the The of out the portfolio. a plans rolling hear on other that So little I to Body kind to about second debt. across and to performance continue just then bit for Guilherme I And concept think Shop wanted stores question, just the new

are the wondering XX steps additional got of, the months? renegotiations what over Thanks. on next any say, Just potential if the let's to next XX you've X horizon. to And kind for debt

start Hey, pass I'll then and Richard. Guilherme. to I will

approximately XX for the new design. the already on is versus gains it good call Shop, The previous So we design Body they showing the have now right double-digit in news store place. are And

encouraging. So very that's

with stations the to refill XXX XXX also know in the stations planning, year-end. line our but to also much stores you and Shop stores, get much we tied as planning would you end And I Body is are also Life, of the as Commitment are Shop. year. strategy and get know, to The part potentially on it's of very within we to those by Body are this to We The to driving add, as actually very And in the values that refill by of which refills,

well. progressing it's So

markets. the markets monitor a much on are indicators pretty we again, attention lockdown of that. And and But have indicators retail new all continue lot course, design to some we early very of the encouraging. to to key -- still we're reopening going paying store Of that back in the the the

to pass about talk here. Guilherme I'll So to strategy the debt

Thank Roberto. you,

the think billion capital you position and as we side, cash saw, I of in ended BRLX a structure very liquidity the probably quarter equivalents. with strong On

basically results, the was highlight QX think We bond. disclosed billion We're continue in of second look the matched the we're schedules, we now all the sustainability-linked the amortization already the sheet of exposures at net debt balance times. you currency, deleverage When structure. and quarter, with capital liquidity of at X.X you issuance way covered you when to at by when our until look well quite the as course the our that in right I as extremely And are hand comfortable debt-to-EBITDA mean, $X look XXXX. with the well. of we tower, our I

So we're are. where comfortable we

the opportunities follow-on always glad quite in especially at think the the assessing where market. in year, we're I this Of landed. last second we on again, after course, that of we're But point, half

Thanks Okay. very much.

Soares of next ahead/ go question Joao from Citibank. Please comes The

ones on Hi, quick my side. thanks. X

the interesting. that right So First do update well. very I maybe second the the strategy anything could would us APAC, penetration investments, e-commerce clearly to you Avon saw there the wanting through on get on the is What you how term, moving on a now very you short APAC? maybe operation physical think But you one can appreciate in terms I in the We is explore on of M&A? in us point, and and digital types give some an opportunities pickup of strategy. partnerships International. And color color be Aesop. think give on digital regarding your in more Could

maybe margins for So those guidance does very penetration hear. the terms margins? to those just into will investments going plays low how by digital give Thanks. some us to to forward. And mid-teens your going on the interesting Avon International idea in think of how XXXX, back out progressing I are be

for question. Thank you the Sure. here. Roberto

is and is actually and it's Right focus now, cross-border little e-commerce presence the a our So bit to well. in all on regarding Asia-Pacific, progressing very and I'll China. to

some are We doing partnerships.

launched to app. to WeChat is the are program users within because to more news mini maybe purchase social on news us entering the and e-commerce in directly being heavily is the that use opinion and us capital invest early help focus good little cross-border key Aesop other much with that the investment China. actually to compared quarter, needed and selling just What's e-commerce this of But China, And are probably products approach not leaders only and omnichannel entry important. question? China we're the will extent to of we're selling good late some of we be optimize again, our fact, we allowing to the some to second will brick-and-mortar. a less late In and going the Yes, penetrate entering and retail it going in have a social really the

digital. the Roberto, Yes,

Avon The digital. digital progressing the well, piece Yeah, It's International. at Joao.

all We digital the facilitate point a the to actually in information, actually the It's putting investment is to and the investment to there's of lot a lot actually having for do all you for been that a This are as made really going whole. that Avon to called lot to moving selling. we to a social moving of are similar ON, representatives for to one being representatives Natura, the app Avon business, content share. able to

excitement we for to have So team The that within improvement the come in be still within one investing. pretty in reps platform, able and is think Natura. be news on have what is reps that. International. But that Avon good And lot the to one should We a to catch that. a on to more the access we will similar up app

answers. Great. the for Well, thanks

next The go Please Irma Sgarz Sachs. question from comes of ahead. Goldman

I and evident or Thanks And to And Thank second. half in think gross I of and about Yes, hi. was up for sectors a already was raw the come questions. about pressures. just Avon I'm a the maybe prices this applies interested margin to curious certainly the I -- potential quarter? second brand? you And the cycles you to the think Brazil cost the outgoing curious just guess Good think operation. specifically material should back cite, in number morning. we you've how the taking for into both how taken I increases my Brazil input price in different of back for Natura you. for do it's

Hi, Irma. JP speaking.

revenues. actively present. And cost increase the did indeed, managing are pressures we have We been So prices.

the But value. scheduled. source others only have that's not of We

keep products both and forward. going Natura's well and been As gross as to even improving shifting we and Thanks. mentioned, have margin I as the maintain, improve Avon's, mix promotions in of ideally

that for thing, of of would top said, one And I'd JP all also which Yeah. just on what Irma, call attention I add you.

pressure If And team versus up it in are you management, I Latin doing group this is I look think at job margin, our we synergies, almost on of that are the unique. our currency. gross in great quarter, a very unique cost, some because up helping inflationary not And very gross as is in is also And The actually in over we to group. the this a this and $XX of year-to-date, somehow which are that terms revenue kicking prior leveraging on say environment are million is of only is increase year. navigate year-to-date, combination even synergies in. have, the million would volume $XX us America, year-to-date, this we the of margin which synergies in but

the So that's comment just one additional here on gross margin.

clear. It’s you. Thank

today's to Please session. question-and-answer Roberto I Mr. concludes Mr. his This go to ahead, statements. Marques. Marques invite with like closing proceed would

I close, seems just to would answer I question. we it Before that one Joseph. have additional hate And not

happy then your please, closing. ahead, if you I'll answer question, do the Joseph. Please have and Joseph, we're go to So

right. All

be So one. quick a this should

front. digital the on So

like advancements major to connecting doing really directly You're in consumers.

this you delivering been that I clients. question the my are So guys more like how front? to you on to has is the working recall fulfillment

Natura on front, evolving So both this how Avon are Thank and you you. on fronts?

Yeah.

Joseph. question, the for you thank So

X again resilience Shop would I to in serving the the to being social but So our growth. Avon and higher our directly. really Fulfillment since also we're And supply and the our the Natura times showing we able and than both are pandemic, pre-pandemic. our say, surge Again, with the not Aesop that also, channels fulfillment really and way e-commerce well. customers responsive. it and changing are The And very and only progressing chain, reps point, and X is our our your times, to, be Body tremendous

about So that. we good feel

something, also this on disruption. envision something investing that but don't We to want at you are add we that, is JP major it please? point, any

Yeah, Joseph.

honest. to and I representatives add, one, end best Just NPS you service customers speaks end has recent Brazil e-commerce And are fulfillment scoring our which seen, which level have by the in capabilities. to in -- as in information Natura's granted be high, may recently, have the that just ever, customers both rated e-commerce Blue very received somehow Avon's is our to the want as is think best country the Diamond Award,

actually That's end call. Great. way to great a the

again thank I everybody. So just want

very pleased results, our focus strength network the on model, are who to the our continues direct-to-customer strong brand very QX most our people, as I really We important, of reach thank of you group, day. once continue omnichannel us well, want today. I to with again you power us, demonstrate which for And our organization, and, our progress good Thank of everybody in our safe. wish our a really, ambitions. all and stay products much. being behalf strategic our with to a stay on

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