Natura Cosméticos (NATU3) Q4 2025 earnings summary

Executive summary

• Completed group simplification, including the sale of Avon International, Central America, Dominican Republic, and Russia, and streamlined holding structure, returning NATU3 shares.

• Integrated Natura and Avon in Mexico and Argentina (Wave 2), reducing administrative headcount by ~25% and creating a leaner, more agile organization.

• Achieved recurring EBITDA margin expansion for the fourth consecutive year, with significant reduction in transformation costs and improved leverage.

• Net income from continued operations reached BRL 974 million for FY25, or BRL 463 million excluding non-cash provisions and divestment expenses.

• Advanced ESG agenda, reducing carbon footprint, increasing recycled packaging, and earning top sustainability recognitions.

Financial highlights

• FY25 net revenues were BRL 22.2 billion, down 5.0% YoY; Q4-25 net revenues at BRL 6.2 billion, down 12.1% YoY, mainly due to Brazil's slowdown and FX/hyperinflation impacts in Hispanic markets.

• Underlying EBITDA reached BRL 3.1 billion for FY25 (14.1% margin, +190 bps YoY), with Q4-25 underlying EBITDA at BRL 978 million (15.8% margin, +700 bps YoY).

• Net income from continued operations was BRL 974 million for FY25 (BRL 463 million excluding non-cash provisions and divestment expenses); Q4-25 net income at BRL 620 million (BRL 186 million excluding one-offs).

• Free cash flow to firm from continuing operations in FY25 was BRL 753 million, down BRL 276 million YoY, mainly due to inventory build-up.

Outlook and guidance

• 2026 expected to mark a new growth cycle, with revenue growth anticipated as integration pressures normalize in Mexico and Argentina and commercial initiatives in Brazil gain traction.

• Focus on expanding reported EBITDA margin beyond the 14.1% underlying margin posted in 2025, supported by maturing integrations, savings from the new operating model, and normalized structural investment.

• Avon brand relaunch planned for March 2026, with gradual recovery expected.

• Measures in place to mitigate execution risk and ensure sustainable revenue growth and robust cash generation.