Natura Cosméticos (NATU3) Investor Day 2025 summary

Strategic Priorities and Business Model

• Refocused on core strengths in Latin America, prioritizing the Natura brand and leveraging Avon as an entry point for new households and consultants, with Avon now generating positive cash flow and margin after integration.

• Emphasis on direct sales, blended with digital and omnichannel models, supported by significant investments in technology, AI, and integrated planning to enhance consultant productivity and customer experience.

• Integration of Natura and Avon brands in Latin America, with unified management and regional innovation centers, and aggressive restructuring of Avon International to achieve cash neutrality and reduced cash consumption in 2025.

• Continued leadership in sustainability, with commitments to regenerative business practices, integrated P&L, and linking investments to social and environmental indicators.

• Human capital and culture revitalized, focusing on accountability, innovation, and alignment with strategic goals, supported by high engagement and international leadership.

Growth Levers and Market Opportunities

• Significant growth potential in Latin America, especially in Mexico and Hispanic markets, by replicating Brazil’s successful strategies to boost household penetration and cross-selling between Natura and Avon.

• Expansion into new channels, services, and categories, with omnichannel and digital platforms driving revenue growth and household penetration in Hispanic markets at 16% versus 54% in Brazil.

• Innovation in products and business models, including fintech Emana Pay, partnerships with startups, and omnichannel tools to increase consultant productivity and financial inclusion.

• Mexico identified as the largest growth opportunity, with customized strategies and accelerated local production.

• Sustainability and social impact remain core, with integrated business models that monetize environmental and social capital, aiming for a 4x positive impact by 2030.

Profitability and Efficiency Improvements

• Gross margin improved by up to 570 basis points since 2022, driven by integration synergies, portfolio optimization, and manufacturing efficiencies, especially benefiting Avon.

• SG&A efficiencies achieved through sales force optimization, logistics consolidation, and administrative simplification, with further gains expected as Mexico and Argentina are integrated.

• Recurring EBITDA margin expanded for three consecutive years, reaching 13.2% in 2024, with Brazil remaining the most profitable market at over 22% margin post-Avon integration.

• Hispanic region's margin improved from 2.8% in 2016 to 12.5% in 2024, with revenue growth as the main future catalyst.

• Strategic investments in marketing, innovation, and digitalization are expected to yield benefits from 2026 onward, with disciplined project approval based on ROI.