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March, 2013

March, 2013. reason for being. OUR REASON FOR BEING IS TO CREATE PRODUCTS AND SERVICES THAT PROMOTE WELLBEING/BEING-WELL. WELL-BEING Is the harmonious and gratifying relationship of a person with oneself and with one’s body. BEING-WELL

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March, 2013

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  1. March, 2013

  2. reason for being OUR REASON FOR BEING IS TO CREATE PRODUCTS AND SERVICES THAT PROMOTE WELLBEING/BEING-WELL WELL-BEING Is the harmonious and gratifying relationship of a person with oneself and with one’s body BEING-WELL is the empathetic, pleasing and rewarding relationship of a person with others, with nature and with the whole

  3. value economic _strong cash generation _growth and profitability _consistent dividend payout proposition PRODUCT CORPORATE BEHAVIOR social _wealth creation for consultants _benefits shared with communities involved in extractive activities CHANNEL triple bottom line brand essence environmental _carbon neutral _use of refill packaging _sustainable extraction _use of recycled and recyclable materials

  4. we are in relevant markets with differentiated growth DIRECT SALES SHARE IN THE CF&T MARKET SIZE OF CF&T MARKET (in US$ billion, Fixed FX) YoY BRAZIL TARGET MARKET GROWTH (nominal) Source: Sipatesp / ABEVD 2011 Source: Euromonitor 2011 • The markets in which Natura operates represent 15% of the global CF&T market and have a growth rate more than 2 times of the total market Source: Euromonitor 2011

  5. best standards of corporate behavior and continually strives for excellence in this area 2011 Awards and Recognitions _ The second most sustainable company in the world by the Canadian Research Institute _ The 8th most innovative Company worldwide by Forbes Magazine Socio-Environmental Commitments and Targets: _ Water _ Education _ Climate Change _ Sociobiodiversity _ Solid Waste _ Sustainable Entrepreneurship _ Relationship Quality Best standard for corporate governance _ Natura was the first Brazilian Company to voluntarily obtain the SOx certification _ Around 250 investors (particular our individual investors) attend to our Ordinary General Shareholders’ Meeting _ Management Compensation System linked to Triple Bottom Line dimensions: Consolidated Ebitda, Organizational Climate Surveys; CO2 Emission and Stock out index

  6. innovation to create products that provide an ongoing flow of well being well experiences for our consumers 67.6% 67.2% 64.8% 68.8% 65.7% 56.8% Innovation Index¹ (% of revenue from products launched in last 24 months) Number of product launches 113 168 104 123 183 191 R&D % Net Revenue 2.8% 2.9% 2.8% 2.6% 2.7% 2.5% 2007 2008 2010 2009 2011 2012 _Products with functional. emotional and philosophical benefits _Sustainable use of Brazilian biodiversity _Open Innovation exceeded 69% of the projects 1 Products launched in last 24 months as a percentage of the company’s revenue

  7. strategic focus to drive channel growth in the last 5 years with the implementation of the CNO model Channels differentiations Number of consultants (thousand; CAGR `07- `10) High productivity12.2 times higher than its peers 304 Strong growthCAGR ‘07 – ‘12 of 16.9% YoY 23.7% 246 YoY 27.3% 193 CAGR 30.9% Training480.000 consultants trained in 2012 Business model that generates income and work 86 YoY7.9% YoY 14.3% CAGR17.6% Low turnover30% on average 1,268 632 1,029 1,175 High satisfaction290% in 2012 2007 2010 2012 2011 International Brazil • Consultants are Natura’s first consumers • Sales driven through personal relationships • Channel disseminates Natura's values with consultants acting as agents of social transformation 1 Source: Company. ABEVD (Brazilian Association of Direct Sales Companies) 2 HAY Consultant annual opinion poll for consultants satisfaction

  8. strong presence in Brazilian households with the preferred brand in the CFT market Brand Preference² in Brazil’s CFT Market(%) Natura Penetration¹ (Household Consumption Panel, Kantar) 61.8 57.2 49 52.0 47 47 46 47.4 42 39.3 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 ¹ % of households buying at least one Natura product in last 12 months ² Source: Brand Essence / Ipsos

  9. opportunity to expand Natura’s consumption per household and consultant productivity in Brazil Penetration by Category (2011, %) Market Natura 99.9 99.5 92.7 91.3 91.1 75.2 63.8 61.8 36.5 32.5 29.1 28.7 26.5 8.0 24.5 21.2 4.4 17.7 13.5 3.6 13.2 11.2 Soap Shampoo Post-Shampoo Deo Facial Care Body Care Oils Fragrance Sun Care Makeup Total Basket Size 61.8% 52.3% 50.1% % of households buying at least one Natura product in last 12 months >5 categories 8.0% 10.2% 9.6% 8.6% 4 categories 10.3% 11.3% 14.6% 17.2% 3 categories 17.5% No. of categories purchased 25.0% 2 categories 24.9% 24.8% 1 category 38.0% 36.2% 43.9% 2009 2010 2011 Source: Kantar World Panel

  10. in International Operations, over the last 5 years, Natura grew revenue by 3.5 times Results of International Operations(LatAm and France) 11.6% 9.0% 7.2% 6.9% 5.9% Share (% Consolidated Net Revenue) 2008 2012 2011 2010 2009 Net Revenue (R$ million, nominal) 212.7 292.6 372.1 503.8 704.4 EBITDA (R$ million, nominal) (82.2) (77.4) (78.4) (51.1) (11.8)

  11. leading company in Brazil since 2005, and increasing market share in other LatAm countries Major Players in Brazil(Euromonitor) Natura(Euromonitor) 14.5 14.5 13.4 13.4 4.0 10.4 10.2 2.1 9.1 1.0 0.1 8.8 2011 2007 8.3 7.2 8.2 Brazil 6.0 Operations in Consolidation (Argentina, Chile and Peru) 5.9 5.7 Operations in Implementation (Mexico and Colombia) 2007 2011 Natura Unilever Avon P&G Boticário L'Oréal

  12. strategic focus _expanding our leadership in Brazil: CN and CF productivity; _accelerated growth with profitability in Latin America, becoming a relevant player; _connecting and strengthening network relations through Biosphera. _service excellence as a competitive advantage; _intensifying the efficiency program; _transforming our technological platforminto a driver of the business; _accelerating the recruiting and development of leadership and acquiring new competencies.

  13. the productivity of our consultants decreased in the last 5 years Execution problems Need for higher marketing investments 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 2Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Accelerated channel growth, impacting Natura’s average productivity Note: Productivity at retail prices = (gross revenue Brazil / average number of consultants) / consultant profit

  14. pillars of the productivity program Adjustments in the commercial model (sales team incentives) Service Excellence Cross-Category (communication and promotions) Product Innovation (White Spaces and Price Points)

  15. after a strong investment plan in supply chain in the last years, we have a differentiated service level _complete review ofSupplier chain _expansionof own and outsourced production network _modernizationand improvement of transaction systems _integrated Supply Chain management solutions

  16. new logistic Enables 93% of orders delivered within 48h network • 2013 • New DCSP • Inauguration of new DCNE • 2014 • Inauguration of new HUB SP • Inauguration of new DCN • Inauguration of new HUB NE • 2010 • Inauguration of DC Uberlândia • Inauguration of DC Castanhal • Expansion of DC Canoas • 2011 • Inauguration of DC São José dos Pinhais - PR • Inauguration of new DC Matias • Inauguration of new DC Jaboatão • Expansion of DC Simões • 2012 • Stabilization and Optimization DC Castanhal DC+Hub Jaboatão DC Simões Filho DC Uberlandia DC MatiasBarbosa DC São Paulo DC Curitiba DC Canoas • International Operations • All DCs expanded 2010-2012 • 3x Capacity • New cycle starting in 2013

  17. evolution in service level deliveries D2 (%orders) on-time deliveries (% orders) 3.0% 85% 96% 74% 21.1% 30.9% 35.3% 34.2% 28.5% Jan/11 Mar May Jul Sep Nov Jan/12 Mar May Jul Dec 2009 2010 2011 Oct Jan/12 CN cycle duration (days) 47% Cycle

  18. productivity program status Next Steps: _new White Spaces; _Cross-Category evolution _continuous evolution in Service Level Sep/12 _White SpaceTododia Body Splash Feb/13 _Cross-Category Aug/12 Oct/12 _White SpaceUNA Fragrance _MAIS Natura Program _management of Sales Team: CNO and Relationship Managers Evolution in Service Level

  19. recovery on consultant productivity during 2012 Launch of MAIS Natura, adjustments in sales team and white spaces 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 2Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Recovery in service level and market efficiency Note: Productivity at retail prices = (gross revenue Brazil / average number of consultants) / consultant profit

  20. a business platform in the International Operations, with accelerated growth and profitability France Mexico DS: 30.9% CN: 75,100 10.3 Colombia DS:35.1% CN: 37,000 • Growth drivers: • Growing the channel: • CNO model in Peru, Colombia and Chile, new model in Mexico • continuous improvement in service level • building the brand • Corporate behavior 3.5 Peru 1.9 DS:41.1% CN: 63,500 2.6 International Chile Natura Consultants (CNs): 304,400 (4th quarter 2012) DS: 18.8% CN: 52,100 4.4 Argentina DS: 27.4% CN: 74,800 Total CF&T Market, US$ billion Source: Euromonitor 2011

  21. Biosphera project • Innovate direct selling model, connecting and strengthening consultant and consumer relation with the use of digital and social technologies • _better and faster consumer purchase experience • _increase consultant productivity and capacity to generate business • _digital and social inclusion

  22. project structure • Dedicated team to implement a pilot, started in Nov 2012 with: • _digital platform for consultants • _direct delivery to final consumer • _more options for payment means • _use of CRM tools

  23. consolidated results Net Revenue (R$ million) CAGR 10-12 = 11.1% EBITDA and Margin (R$ million, % Net Revenue) CAGR 10-12 = 9.6% Net Income and Margin (R$ million, % Net Revenue) CAGR 10-12 = 7.6% +6.0 % +13.5 % +3.7% • After excluding the nonrecurring effects and the reversal of the provision for profit sharing that had a significant positive impact on the 2011 results, the improvement in the fundamentals of our business supported a EBITDA growth of 17%.

  24. International results Argentina, Chile and Peru Net Revenue (R$ million) EBITDA and EBITDA Margin (R$ million, %) CAGR 10-12 = 38.0% +27.4 %in local currency +32.6 %in local currency International results Mexico and Colombia Net Revenue (R$ million) EBITDA and EBITDA Margin (R$ million, %) CAGR 10-12 = 51.9%

  25. sustainability results Wealth distributed to Supplier Communities (R$ million) Funding for the program Crer Para Ver (R$ million) +21% +15% -16% 52% +57% +168% 12.1 5.5 8.7 10.0 3.7 10.0 8.4 12.8 2009 2010 2011 2012 2009 2010 2011 2012 Relative Emissions (kg CO2e / kg product invoiced) -7.3% -5.3% -4.0% 3.55 3.30 3.12 3.00 2009 2010 2011 2012

  26. consolidated results Dividends and Payout (R$ million, % Net Income) Capital Expenditure (R$ million) * * Proposal to be submitted to the Annual Shareholders Meeting to be held on April 12, 2013.

  27. strategic focus _expanding our leadership in Brazil: CN and CF productivity; _accelerated growth with profitability in Latin America, becoming a relevant player; _connecting and strengthening network relations through Biosphera. _service excellence as a competitive advantage; _intensifying the efficiency program; _transforming our technological platforminto a driver of the business; _accelerating the recruiting and development of leadership and acquiring new competencies.

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