Natura &Co Holding (NTCOY) 10 Nov 222022 Q3 Earnings call transcript

Welcome to Natura &Co.’s Third Quarter 2022 Earnings Call. On this call today are Fábio Barbosa, CEO of Natura &Co and Guilherme Castellan, CFO of Natura &Co. Jao Paulo Ferreira, CEO of Natura &Co Latin America will join for the Q&A session. The presentation that will be referred to during this call is available on the Natura &Co Investor Relations website. Please limit yourself to one question each in the Q&A session, so we can allow more people to ask questions. understanding on your for you and this. cooperation Thank to will now Barbosa. over hand I Fábio ahead. go Please

with or myself morning thank today. to so will joining and to results the qualitative you us And shortly, be commentary. comment happy on very will Good I'm afternoon more for good limit all I again. Guilherme a you of you

as performance with past you Guil Body quarter. driven we Avon which the decline give recorded and Clearly, and key at exchange in continued is working We International the more The in quarter, performance recovery. continue sequential this by EBITDA costs impacts, the in [indiscernible] for Shop post we inflation adjusted marked mentioned, that affecting a satisfaction Natura a in slower posted line improvement results with activity and such sales at by constant Aesop margin, of channel segment geopolitical Brand saw for results satisfied another which from spending, to in environment, will well constant what color. fallout and implementing to Latam costs. that CFT was context in are segment. measures quarter operate are double X.X% factors productivity. Ukraine. the reasons as X.X% foreign external &Co with currency. and a in notably a as Avon Home channel pressured currency, to war solid previous be were had high on and not challenging posted continued with in results improve third strong to performing We In Natura energy digit stable discretionary while by quarter Natura training on we at the &Co At rising growth in just on resulting challenging channel, to top indicators I line the global the show continued by this better the growing the in results franchise some

We that Group organization have announced also made progress last on quarter. the we

to to more have the level, steps when brand reduced costs XXXX and give implement and XX% process. We and company advancing. each started we we by responsibility as to The business significantly are holding this autonomy started steps mentioned also compared at

the and systems are further Latin phase business and by America, new Avon and starting integration sales so-called then This harmonizing followed X the the the Wave Peru and of in product optimizing We Colombia, accelerating Brazil. the distribution in XXXX Natura portfolio. and at aims with

already have geographic Saudi footprint We started market, including already and to with optimize at in change India our International Avon significant Arabia.

in released fact environment three-year uncertain The market to beginning focused strategic November, United a the on for in It are unlocking also growth October modified and the the is markets, analyzing to XXth, led material and that on XXXX a savings withdraw some closing in continue Aesop year. basis further and Suffern micro of Aesop. in parties, published XXX% analyze Avon's highlighting We April, the to XXXX never continued to have value. the next States, we and are opportunities us worth guidance a in strategic R&D XXXX. considered announced accelerating This third of for challenging the strategic May, of potential study announced recurring in a we under which selling opportunities is change. should we considerable expectation our that and and on Aesop as Also, result facility alternative

and which also our notably challenge, as our upside our brands the underperforming and We to regions, work but driver. the main our improve of are continuing regard ongoing we business, fundamentals principle

remains priority clear. Our very

teams in is are ambition to best return the improving on making third achieve Guil focused to that, all these flow, comment of The greater and hand incentivized company the mobilized margins me shareholder generating the We and the quarter you over sustainable achieve aim strongly BUs updated &Co. are deliver the and our and let goals. our on to Natura for now performance on Guil? keep beauty to world. in detail. progress. With We'll cash

in in Natura Thank the by from revenue At in post in Latam continues X.X% Body sequentially its performance turn decrease quarter Avon performance brand digit stable the and X.X% retail the &Co.’s was &Co. Shop X, nutshell, in and We at at sequentially, challenging the hello look pandemic. reais start performance the with solid International Shop from by consolidated growth micro had We'll while improved a CFT X.X%. to QX. difficult but different constant Russia. by parts. Slide grew recovers impacted you reflected Fábio, currency. The environment. to improved currency was despite but by Aesop enabled This the posted another EBITDA Home, we margins Natura a BU down I'll still Body everyone. double Natura constant were In war at moving shortly, on at with which Slide slowly growth X, strong which sales adjusted to a

an are a all million. down main strong was on EBITDA in credits and to First, margin expenses, year-on-year. deliver QX associated by efforts to offset was our were Body partially some top foreign negative lower organization. to Natura is income are for more income leverage leaner Slide net of XX% Brazil's focus we of create and BRL the for XXX to investments to Latam due are Also the higher at simpler compensating efficiencies growth The These This and related financial line X, gross commodities at expenses, mainly an impacts pressures Shop of improving sustainable tax across FX SG&A benefits and by than cost performance, nearly income at on sales important driven Aesop. positive continuing result margin. conjunction also income. net tax net On holding continued Net by XXXX. strict and underlying cost offset the control, BUs, continue improvement This which in in &Co. we which

shows is priorities. XXX XXXX to by an working record as outflow positive of in sharply take We of improve million. from of between in capital XXX than acquisition outflow two which biggest BRL QX XXXX costs Let you nearly of net net from million, from the tax was and cash difference of for credit of me line are Underlying BRL gains from operations, by payables. BRL XXX XX improvement X account communicated one On million conversion nearly an bridge our improvement free which discontinued as the from from was XXX Brazil. efficiencies BRL BRL effect. flow, shows XXX you to higher million This cash before, BRL related and remind starting this have Slide comes compared had effect transformation also a action to XXX more and unfavorable was income. efforts, million, driven QX million even taken benefited we income we negative BRL a PPA million. improved million XXX to recoveries income in the that inventory million focus BRL driven mainly XXXX, the a net on The This Avon QX XXX BRL

position us an slide, position, Finally, we which flat Slide and post BRL the on to the it despite these with a liquidity our quarter cash delivered flow next free of allow We already look that will profile. is X, two the comment improvements billion. to cash worth firm. mentioning we challenging leverage On almost more ended outcome at X.X

in net with cost and at QX cost. a QX debt-to-EBITDA higher is jointly times This of X.XX lower leverage quarter and FX given times integration X.XX ratio EBITDA in times Our ration up from last reflects year. pressures a X.XX end,

XXX maturity X.X guaranteed the Natura of improve through in Natura its structure, You'll total we limited and of issuance with our liability Natura BRL issuance of plan see maturing the X position over debentures of XXXX, than completed repayments second to between the capital line graph, XXXX. on commercial on billion &Co. XXth The little Certificate higher XXXX. is XXXX. BRL our The repay a XXXX debt is management maturing Receivables until face September used the Natura and In And X.X payments Group's which in XXXX, cash of issuance years, mature October, of debt primarily XXst were BRL notes million ninth Holding. debt Cosméticos State to Cosméticos, our Cosméticos the by the of September. maturity billion on Real funds of average in

Argentina Brand, by growth momentum XX.X% by and acceleration performance constant Latam, was slightly Natura net brand constant constant driven Avon In previous poster which quarter turn XX.X% solid the which by by were Brazil, currency. Colombia. in currency, The was Natura was digit Hispanic and with in performance. net and in year-on-growth supported sales by XX.X% to constant was while mainly on of a Brand at productivity &Co a in our currency, double beauty. now business XX.X% Latam growth at XX Natura QX. solid thanks Growth up consultant to grew Slide by X.X% an driven gained beginning over by the also XX.X% up revenue posted Total up Let's the another in at This up unit in currency in the reais.

but we Home. number and currency, at versus category impacted & It down margin. a In The cost digit representatives to were gain in offset EBITDA the important In decline X.X% down weaker In since by mostly in saw net in productivity. up grew by &Co QX XXXX, Chile. & consultant QX X.X%. a double the the Ecuador have improved by brand markets, declined impacted highlight year-on-year. sales at The in currency, driven grew but trends continued Beauty sales in Slide in segment contraction but in X.X% up offset XX% adjusted constant improvement mainly in is markets X% currency. this in net a of was Argentina, Avon sequentially was Fashion a Chile. is seen was digits On XXXX. to by Hispanic currency, X.X% Latam’s a Home. in constant which in performance QX XX%, available Beauty by Argentina, decrease X% grew quarter we drop actually Natura was still Mexico revenue Excluding Latam, revenues segment by turn and Brazil Fashion single Brazil sequential XX, by revenue constant At a every QX, that Total Mexico and at Beauty net and by Hispanic low

increased sales reflecting with energy was Brand. a is by Brand financial Strict on The adjusted discipline, top up net many XX.X% by XXX of shown margin line offset selling partially by deterioration by graph which This the dynamics this supported EBITDA inflation, expenses however percentage Natura investments result to bps. while Natura impact increasing significantly strong the gross was at by and As margin. price wage XX.X% of as performance the value a due are deterioration rising foreign in exchange. combined input added prices, pressured was

down to was XX.X% was currency by reais. Let's Revenue on International in impacted situation X.X% XX. Avon at strongly now Ukraine. constant drop move Slide This and the in

down due period by as margin and EBITDA in was last of X.X% sales previous the transformational now X.X%, bps productivity, rep partially same a gross since XX the the in the in were given adjusted than Fundamentals result margin quarter, Ukraine. more also percentage in to more for to sequentially implemented improve QX impacted dynamics, efficient the show in that, purchase Excluding by margin model also Europe. EBITDA power lower digitalization. commercial constant was SG&A down is QX. year. improvement to better continued but sales, war at reflected continued Adjusted This limited Sales XX offset savings. markets currency versus new and

On now with The Excluding during margin has QX impacted declined sales currency X.X% At is we XX.X% of store partners inflation would shown year-on-year, product to Shop. Body living stores move drop consumer signs as XX.X% confidence. continued cost but inventory held year-on-year. in have improvement to levels offset and in significant than impact, recovery high year. to the franchisee the The that improvement it show is and channel and not to constant at enough EBITDA anticipated net reais. a up Foot the revenue adjusted lower XX, Home by Slide of the our fall

margin points business e-commerce on the franchisee stores are face leading QX other base, business EBITDA stocks on which at are these sales and combined distribution approach X.X% government sales sell that improving, under also showing benefits of is percentage control. from gross looking words that the In EBITDA the levels. However XXXX from franchisee Core XX.X down numbers, a level to improvement. margin adjusted resulting from in in to sales margin was deleverage X.X%, same-store partners continued sequential were channels, pre-pandemic XXXX XXXX. QX pressures. up is and aid ended remembering the and our closely the It fronts QX management worth all at act of own

We A enacted demand franchises. in minimizing containment, to new channels. head positioning provide cost of the manage to from advantage stimulating and some franchisees for have strict installed overhead are spend structure was fourth peak we structure global discretionary focusing by inventory levels head and rightsizing quarter sales. on Also, opportunities to taking support

XXXX. stores performance the to in which franchise model. up on store double showing constant Slide again Finally, recorded as was to rebalancing by are plans up COVID. end Revenue This adjusted digit roll Aesop continuing and XXX physical deployment was an like-for-like investments post stores. new also X.X%. entry double track basis, sustainability. a delivered footprint Europe. launch XX.X%, superior a of is XX.X%. point launch On refitted. also chain Tmall growth the out XX consumer excellent XXXX a for we growth stores of except the post to for quarter normalizes continue channel Furthermore, continuing behavior areas see XX reais continues All digit and the regions Aesop such on as workshop growth with QX compared long-term supply new platform sales XXX have in Aesop to well the and growth currency, consistently EBITDA domestic in compared another store, planned is with percentage uplift while been optimization bps to an to technology, online traditional of sustainable operation. sales of of opening as the reflects to China down a on margin deliver QX as

October alternatives and updated published closing market on XXth, we maintain strategic we As are studies. such studying the to respect Fact Material will for Aesop in

Let me now hand back Fábio. to

will I now XX Guil. conclude key Slide you, takeaways. Thank on with our

steps and the our to in aiming First, integration structural Avon America as Natura accelerating boost are motion of performance. Latin such

brand order progressing autonomy reorganization Group accountability. the right to in Second, the and is strike between balance

maintain will updated We market plans our related to Aesop. the regarding

achieve attention are whole and actions Third, our cash organization capital improving all outlined incentivized immediate and and on generating and aim of business Guil, defending shareholder allocation these you that delivering happy fourth, your Jao our very better flow. the I sustainable mobilized thus and we focus is Thank margin resource at to units and returns. is The much and now to have goals. questions. take for Paulo your And

go come Please our Vilela Instructions] Guilherme will from And ahead. first JP [Operator question Morgan. of

questions. Hi, Fábio, lot my and Guilherme Jao a Paulo, for thanks taking

and data of And the First, bring terms of allow the I'd for like outsourcing an can and that to idea of to of growth lot impact analytics color like much the in and what Thanks was XX% terms mix? how have Avon? of can in that more or for price IT division? margin get infrastructure was Brand the Also Avon's Natura Brazil. a on secondly volumes How digitalization again. I'd much rapidly,

would Guilherme to be question, your were because your very ask to please question. thanks you for first great. going if repeat able so that first please I'm your to can well, not question you hear repeat we

what of IT Oh, the terms I margin brand? also allow can and the would for of like division, for an digitalization of to impact can no, bring of the outsourcing data just that have in that no problem. the infrastructure terms idea in and analytics Avon's

Guilherme the you for questions. Perfect, thank

the significant and you in programs, quarters investing savings last is I few saw world. the this quarter, transformational deliver probably its not to only but lot right, Avon aiming a think in right, as across SG&A

we excluding QX the with also both Russia, with the Fabio sales Ukraine war, line bottom only terms leverage as it's be the line right? new costs this will in markets, boosting model, or mentioned, the a also significantly unprofitable strategy year. as even strategy So footprint in revisiting and but of but commercial margins in focused transformational higher the of top Not if some mentioned, its the

two think transformation. for the International related in there are to quarter things highlight to Avon I particular this

transformational The was initiatives these in a which for payback of the of in Basically U.S. Suffern one one for basically There investments significant of IT, from related as the close, program Avon are facility first is is of closure quite the basically Avon's both key Right? savings a results we compelling facility. to which And terms the annual with that and and that significant we're had again, outsourcing to generates also R&D second returns. that on aiming a program. get an boosts the basis. is

disclose don't necessarily we necessary However, for those investments. the return

most though, is can outsourcing As savings program. of this see can we say related what of is the transformational Avon, you quarter in the that for the IT to

of both the to table I have Avon line bottom of see as both in through that expect related IT, So EBITDA going and of them, the savings you said transformational XXXX. terms this, Suffern a costs we of they the flow starting the compelling payback quarter to adjusted in pretty that of this into of outsourcing in before, can as are most and is we

the then countries a little I'm talking Now, planned, to we Avon continue to few But to in previous log more description Latam. of different you is evolving one. others. in Right? the the Avon point digitalization active a increase little reached measured with Avon to going look basically in some about the Jao in the reps, program, penetration app this three percentage I'm evolve the to with X campaigns, compared pass quarter. But basically course, almost the bit as at as to International Which XX% a on start least of who countries International a research, last our than going once right, bit mention by

much continued focus So that. on we very

mentioned, to mention one to are going evolving for I'm can going a As of this than forward. Avon some countries pass more I about others, the bit the he key so is but Jao, little pillars Latam.

So question came in Brand growth on and Guilherme it growth. both volume Natura price top your line from Brazil, of to

Okay?

That's a Thanks lot. clear. pretty much

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

how as the Hi, the so synergies, just withdrawal I of question. guidance, on understanding curious to for but was I'm thanks clarify very pertains the much targets, to hoping XXXX the the it there's any synergy between with thinking change the the and there? opportunity you're about on any updates fundamentally companies be about you. you if the tracking Thank opportunities the withdrawal, might how

So, just of withdrawal making particular, guidance, sure Is the that more is in question correctly, that the question the understood correct? guidance I about synergy the and the right?

Thank you. exactly That's it.

strategic was synergy, guidance the were good look, the well, we Yes, Part any and work have, the just that will withdrawing in uncertain guidance the I perfect. thing. we issued Okay, the of the guidance of I'm scenario What the a Right? last anymore. is is and and delivered for formally, plan the here, by every we last restructuring, question. they -- course, consumed we us But the basically so moment everything track mean -- acceleration that Wave yes, sounds that we revenue But X, you -- especially track, not we're noise of on say as holding we also and by so hearing we for sense though, the thought that given on guidances in those so synergies plan course, sorry make guidance to withdraw that the delivered because high integration perfect, pressures point when the that Latam. Wave the us didn't options faced the Aesop are know can be charging planning and were And going all with X when on the very again, we're sorry were combined to fact in same as on and Followed based some on material midterm that to So for a background they analyzing right? the to on, are the Right? I basically Fabio month, is synergies, with synergies that was the strategic the starting the and the new continued the not I of that keep reiterate to explained, repeating EBITDA years. it Latam, synergies. in last couple track. inflationary of by give program

for Now Latam. we are entering into a phase new

with guidance, Guilherme and market As sense us, brings acceleration Wave entering keep are opportunities the and given which top for to in the Wave make for of for bottom us we in line. ahead more that, the both I that X, And the course X again, going is mentioned different thought everything of can on, we line and benefits the explain of leading previous basing as in new Latam. us didn't

appreciate clarifying Great, Thank very you. you that. clear I and

question next The of comes Itaú BBA. Please from Gabriela ahead. go Moraes

you much Hello, for guys. questions. one Thank make Aesop. question my regarding taking like We Good so morning. to would

making company far, to on have seeing pressure have you. the to basically would into color we of a stability get to how the we on as efforts been view we better that, in guys. China, in been and for entering because enter But how going it expected. these get look more to so profitability decision partial like has China division forward? the been So a That's and process also on Thank going successful

of QX Aesop also we China results and with and now plans quite quite in Gabriela, in with thanks the you for before results as entry, another year the as for excited results planning question. mentioned quarter strong excited, to your end. QX are mentioned happen we're Yes our which

everything how in of stores of and the business the registration with course made with terms the progress in there XXXX Shanghai that has evolving So and we're and we're team to excited the by quite is planning two product still open else. retail

happened. finally in again, of So for been we are quite for has and excited couple it's the Aesop China in, years already plans a with that.

for put is largest how the to in Asia the color on bit world. is important Aesop market a for this little Just Aesop, more

in probably of you'll the Japan As recall how and for both world. Aesop of South largest markets markets the is being market had important for calls in couple before those the a Aesop, we mentioned the Korea

continued deliver growth digit Asia in strong double to QX. very

continues our doing pace new store on a So extremely are the launch as brand sale in but fragrances the well well very a basis, with with same-store a region specifically also in South halo is Korea. And a for to say, you big the Province Kong look countries. Asia, for needless at impact, other Hong in and when other especially regions there China, Guangdong

So quite excited with that.

We beginning. urban in center are basically following approach the

So few world beginning that as we the but that making expand be push in I the to future. said, the team be the for urban focus in will Shanghai, that. centers the and truly in is other APAC continue market to in plans will key a sales already in in ahead Aesop a the to, years, believe after China to And

That's very clear, Guil. Thank you.

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

and earlier into that obviously your bit little was Yes, cost to its pressures pressures we finished like a some hear just Obviously your remarks, given in line. release forward. you abating, works price longer going a that of lot the through, are to you. buy is still product cycle and sort as curious cost I hi. about commodity until there's but Thank seeing of you obviously way commented work inventories

all like you could make on, somewhat related you've some along already tailwind just mind? curious, if to your maybe gross much but just bit us into the a Aesop should that, from into next if cost inflation. it about seen was I markets aide, a So maybe understand year in pretty And you've from think XXXX? how then this headwind a in maybe turn we seen cost comments margin pressure little help Can pressure feels

across that of So you outlay backdrop was you see feel where power a you. just given where difficult? economic I to if showing you seen weren't it's able been brands, sort Thank bit all to some more little differences could you've through, the the versus that sort of different pricing that in power of, more of just just sort pass to curious pricing just

not company look, been transactional Natura FX, role you, but a talking you're only lot Let's of your equation. challenges, right? As facing we've big like for Thank a I Yes, for this Irma. pressure plays several Thanks this countries, question. constant about right? a FX especially in commodities in challenges, also country not and FX operates that mean, effects mix translational forget

a had So I'm the QX set like the start past about we talking bit look, just if little But sure bit stage little can face again, pressure bps Aesop putting only margin, terms important of each say board. had So as the compared understand forward. to because BUs, was it's we our mainly previous one good management right? sellout different pressure can dynamics we program, I see, compared mix up revenue and QX price to which see, when a very for XX quarter improving significant. as we didn't And of aside, a mix very in Right? of Latam this adapt but is that terms going selling QX, cost any to you in not the distinguish you, And a you here making going pressure game. And was to because of that game, gross a see the across able increase revenue to were that years, right? the of only we also mix Latam which as and the for had management,

next energy which few continues to we of are mentioned it's cost Finally, and The Shop, the given of fully to was but again the in that. also in the main which markets, Shop, it's impacts that very the also labor important what over the of the level highlight to pressure, QX we margin, not only was issue reducing commodities, gross of our not us in be few consumers I of the half, continue QX. gross think as part yes, Avon For that peak right, the matter BUs they big Yes, for as in expect International, are was in should also you war We several there the from added negative under margin Russia, needless So say, but again think, to significantly not We increases And in International, the Body of QX impact a But margins and passed we we'll always the the also you future? mention translational course, I Right? inventories, Body only so forward also for the margin The just saw have right? had of So The margin to in Ukraine QX to are it's keep company. in but gross value Right? FX in least in buy which mentioned well, quarters. right, and FX, big it's pressure mind mix Shop, the we for impacting overall right? the the only one price terms prices, material, the we categories, expect to company. in other a said, inflation, though prices commodity pressure on, second impacted Body rock, planning going Avon at the short sky do see right? of all as because again, to term. the in hasn't as impacted but full gross so the mentioned to that

we our benefits the expect P&L conditions, should inventory have have depending in again, first on year, you the later should basically into renew last the we some XXXX. still quarter flowing that and We which still So that market contracts we have again, to some cycle see of to continue. in

have and should we're better our So QX, our the in set I is line across repeat top expectations excited to going continue especially strong But we strongest is that continue pressure inflation. that and quarter expect in to is trend for very margin see basically to you impacted to of forward. and seasonality. which continue to the we know, a business, seeing by terms We're what SG&A margins especially to QX, gross as our labor

probably you few given transferring some so just concentrated some bigger Russia impacting big a Great. you in -- about that also you're when sort of and pool of there, you a and other much. and and around the move countries, mix in because is war is Maybe to in just of the had one Avon International Thank then of revenue mix country, have talk in countries the production pressures Ukraine? locations, FX producing into followup you and those

your quick effects FX right? clarification, translational is margins, and impact Irma, let right that The again have, that transactional the me buy the risk clear, from especially hedge transactional just country, distinguish we we one If risk we when material basically country raw most example, the transactional can we be one of that way. to right? we the FX risk, the make particular buy just that And countries, risk when the to from a for direct in in short-term. our one the to other, risk is

that currencies impact basically us is that hedged, of only we should because markets, to depending through time hedging our that the react course the the basically risk is hedges. the adjust is know, of depending you that as the short-term, the risk hedge on on will is course. gives protection a So hedging risk right? It flowing and in But of prices

before, translational we have So the some I growing what right? more countries, others. they operates is the gross FX, and is margins less be may meant higher that and that is very Now, than mix those as countries declining others or in of important, represented International Avon than the countries, by the which with

reflecting a where, Avon, countries short-term of some and have translational mix we again, again, well. the the mix some, FX, We and headwinds in see the as impact overall can that that's is

the distinguishment the impact is I it place, our want hedging make of for course, FX the FX, don't hedge that clear in we both, translational of we results. program just a transactional in but but So to have

you. Yes, perfect. Thank I to what was understand. was That trying

go Sunday question Please comes XP. of Gustavo from ahead. The [ph] next

capital. guys. morning question. My you Thank regarding the question is working first good for Hi,

second for question with So inventories inventory seasonality, how may I played important you strong as inventory an is in levels so expect the end? if but as working footprint. role are on for guys you quarter, can And your capital comfortable top regarding far? last seeing Are International's And we end year my current cash generation of levels Avon the improving year year's? the QX

release, partnerships mention You other you in some and in the Albania left launched countries.

would that of an we quarters? you. optimal can to moves the what in Thank of operates countries terms expect more And in? similar International be coming footprint Avon numbers in So

going As us therefore, course add say coming the though last We're is [indiscernible]. also Keep due to right? increase cash even I'm inventories, Jao, of they mind we there question. in anything the is comfortable a that to for that the your we natural for right? mean in comfortable we're QX in a flow that level with so have a is in feel start they impact significantly we're when discussed relevant. Gustavo, you for Keep your and best doesn't to are happy, have you, Thank can here sheets, inventory, and Fábio of in seasonality of the and inventories inventories, high seasonality negative less for because mind it position we free balance that year. to to impact from build not

right direction. the in moving is it So

of is take I a position actions in in we are we again, still that countries results. we improve we'll optimizing taken we though, believe effect have that may and to good quite our working again issues on the chain accounts forward. think the BUs management inventory supply capital to starting see some to optimizing and even continue But the with our going improve mentioned. for that that inventory And some we cash QX, to are comfortable work as conversion that impact

only, countries only Fabio yes, not about in remind thank of Yes, Avon, you bit question second let quarter, you. had and your it's right? a I mean, this It Now, clear, me be is can all in not we that that XX world, countries are are than as losses. quite in we course some operates So profitable we that should not more the profitable that have you operate and operate expect there the right? that and Avon profitable with are internationally, And news, about not countries this that no other revisiting mentioned The the in little right? right? of footprint is look, Avon, countries me? world QX also was, around

that the those been So has I markets basically to focus is first. tackle think

there you is continue We look alternatives that if continue mentioned, as few for We'll is So, in model a markets. do the to other market and to markets, profitable. a not in so those operating change exit markets. we'll we

but to if going think that's see nutshell, has to it. Fabio the of add, basically that to essence I'm So I in he a anything

Thank it you. every it be Gustavo, a add, head different I'm a that be to through can levels. are, much full revisiting mean, presence we It trying to country. presence, be Not Yes, to through I but I can franchisee. want distributor, just has can Avon's say say

So we we more that are also to which revisiting the make model in operate profitable.

But going profitable that So Guilherme Saudi change not we made as country, it matter especially Thank ones it are of through of Arabia, having through can to, every we can going investing already so for seeing in a and Is as just we how are of it a are profitability India course, we have mentioned. readjust. full a and you. those Is we have matter and a adjust distribution that at mean, everything I how presence? franchisee countries. the

you. Thank

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

much for Thank today. us being with you all very

very operating from you defined environment, presentation, As our are we clearly a saw but the priorities. all have challenging we

see optimistic are you. change great to evidence starting deliver We for them, we can we weekend. make Thanks are and Thank difference. revisited your and for that are mobilized and to the attention focus a that made have

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