Natura Cosméticos (NATU3) Q2 2025 earnings summary

Executive summary

• Completed merger of Natura &Co into Natura Cosméticos, streamlining the holding structure and consolidating Latam operations.

• Avon International and CARD reclassified as assets held for sale, with discontinued operations impacting reported figures.

• Integration of Avon and Natura in Latam (Wave Two) nearing completion, with Mexico integration done and Argentina live as of July.

• Strong Natura brand performance in Brazil and Hispanic markets offset Avon's decline and integration-related volatility.

• ESG progress recognized with an A score from the Carbon Disclosure Project and new 2050 regenerative vision.

Financial highlights

• Q2-25 net revenue was BRL 5.7 billion, down 1.7% YoY in BRL but up 5.5% in constant currency; H1-25 net revenue reached BRL 10.8 billion, up 4.5% YoY.

• Recurring EBITDA margin expanded to 14.0% consolidated (+80 bps YoY), 14.7% in Latam; recurring EBITDA was BRL 796 million.

• Net income for continuing operations was BRL 445 million; reported net income was BRL 195 million, with underlying net income at BRL 564 million.

• Net debt increased to BRL 4.0 billion (from BRL 2.4 billion in Q4-24), mainly due to Avon International's reclassification and cash consumption; net debt/EBITDA at 2.18x.

• Free cash flow from continuing operations was BRL -9 million in H1-25, a significant improvement from BRL -1.2 billion in H1-24.

Outlook and guidance

• Wave Two integration expected to complete by year-end, with system simplifications and production transition ongoing.

• Management expects continued margin expansion for FY25, with cost efficiencies and integration completion.

• Macroeconomic headwinds in Latam, especially Brazil and Mexico, and FX risks in Argentina are noted as challenges.

• New product launches for Avon expected to impact results in 2026; Natura pipeline remains robust.

• Digital and alternative channels expected to grow above company average over the next three years.