Natura &Co:A transformational
journey to unlock value
Natura &Co DayApril 20, 2018 São Paulo
2:30 PM - Introduction
Building a new group Roberto Marques, Executive Chairman of the Board, and Josie Romero, Supply Chain Vice-President
4:15 PM A strengthened financial profile
Group financial results and outlook Roberto Marques
Key takeaways Roberto Marques
4:30 PM Q&A
5:25 PM APIMEC ceremony
5:30 PM Closing remarks
3:00 PM - One group, three distinctive brands
Taking Natura to the next level - João Paulo Ferreira, CEO Natura
The Body Shop: Transformation underway - David Boynton, CEO The Body Shop
Aesop: Poised for further growth Michael , CEO Aesop
Page 2
Building a new group
Roberto MarquesExecutive Chairman of the Board
Aesopacquisition
Leading position in Braziland successful expansion
across Latin America.
First stepsin internationalization
and multichannelexpansion
A global, multibrand, multichannel,
purpose-driven Group
Creation of Natura Passion for cosmetics
and relationships
2013
The Body Shop acquisition
2017
1969
A step-change: From Natura to Natura &Co
Page 4
community
collaboration
co-creation
connection
The power of the co_
economic & social & environment
what & why &how the big & the small
the long & the short
The power of the &
A new corporate identity for a new multibrand group
Page 5
Multibrand model
Leveraging group scale
Three empowered iconic brands
Distinct value proposition per brand
Mantaining strong brand autonomy
Expand internationalfootprint and grow TBS in Latam
Capture synergies
A clear financial strategy focused onprofitable growth, cash generationand deleveraging
Solid corporate governance, focusedon value creation and commitmentto ethical business practices
1
Multichannel growthin multiple geographies
2
3Innovation and sustainability
4
Capitalize on the strengths of each brand• Direct sales• Broad store network (70 countries) • E-commerce• Wholesale
Attract new connected customers
Cruelty free products, sustainably sourced
Fair trade-based, collaborative relationships with supplier communities
Innovation-driven product porftolio
Four key drivers to create value
Page 6
Through our corporatebehavior, the quality of the
relations we establish and our products and services, we will
be a group of brands with strong local and global
expression, identified with the community of people
committed to building a better world."
means enriching people as well as our planet, its biodiversity and
resources. We are committed to working fairly with our farmers
and suppliers and helping communities to thrive. Our
products enrich, but never make false promises and are never
tested on animals."
We value all human endeavors undertaken with intellectual rigor, vision, and a nod to the whimsical.
Every Aesop product is made with the same attention to detail we believe
should be applied to life at large, taking into consideration a diversity
of needs as well as seasonal and
We are committed to generating positive economic, social and environmental impact, delivering value in all
businesses, brands and geographies
1
Three distinct businesses sharing a common vision
bem estar bemNourish through
intelligent interactions
Page 7
93%
1%
5% 1%
2016
100%
2012
Natura Natura + Aesop Natura + Aesop + TBS (proforma)
64%4%
23%
7%
2%
2017
Direct Selling
E-commerce
Retail
Franchises
Wholesale
1.7 millionconsultants
26owned stores
3,049 stores
1,950 franchised
1,099 owned 209
owned stores
99 departmentstores
channelbreakdown
2%digital sales+555,000consultantsusing the app
9%digital sales
10%digital sales
An expanding multichannel presence evolving towards omnichannel
2
2017
Page 8
66%25%
9%
Pre-TBS acquisition
Net sales by geography(2017)
48%
18%
34%Post-TBS
acquisitionProforma
Brazil Latin America Others9countries
68countries
23countries
2
A global footprint: From 7 countries in 2012 to 72 in 2017
Page 9
359.4
374.9
2016 2017
31.7
36.6
2016 2017
40.3
42.7
2016 2017
441.7464.8
602.9
2016 2017 2022 E
Direct sales
RetailE-commerce
Cosmetics, fragrances and toiletries
Source: Euromonitor 2017
(US$ billion)
5.3%
5.2%
5.9%
15.3%4.3%
CAGR
3
Strategically positioned in a growing global market
Page 10
• Sourced from a community trade supplier in Ghana, where it helps provide a fair wage to 500 women
• Provides intense moisture and 48 hour hydration
29%
25%18%
8%
9%
7%4%
29%
29%
19%
9%
5%7%
2%
32%
8%
12%9%
29%
5%5%
27%
4%
11%46%
7%5%
Fragrance, body care,gifts and core beauty
Skin andhair care
Body care, skin care and gifts
Body Care Fragrance Gifts Makeup Skin care Hair care Others
• Vegetable waxes to provide a protective layer
• Copper and Zinc PCA are combined with Ginger Root extract to provide soothing and anti-inflammatory properties
• Launch in October 2017 of the first deo parfum in the Kaiakfamily with high quality ingredients
• 100% organic alcohol and 100% recycled glass
Elemental Face Barrier creamShea Body butterK
3
A complementary and innovative product portfolio across categories
Page 11
Natura joining forces with TBS to make
its Forever AgainstAnimal Testing
campaign globaland more powerful
Natura certifiedsince 2014.
Aesop and TBS on theroad to certification
Support for local communities by
each of thethree brands
3
Joining forces to promote a common vision
Page 12
Board of Directorsserving the entire group
Group Operating Committee formedto capture synergies, allocate resourcesand carry out consolidation
Natura, TBS and Aesop are runautonomously, each with a CEO and its own Executive Committee
Roberto MarquesExecutive Chairman
Paula FallowfieldHuman Resources
João Paulo FerreiraNatura CEO
David BoyntonTBS CEO
Michael Aesop CEO
Robert ChatwinChief Transformation
Officer
Josie RomeroSupply Chain
Itamar Gaino FilhoLegal and Compliance
Roger SchimidInnovation and Sustainability
José FilippoCFO
Networking organization
Moacir SalzsteinGovernance
4
A governance and management structure combining scale and autonomy
Page 13
Growth synergies
• Natura international growth acceleration, building on
• The Body Shop expansionin Latin America, capitalizing
-how
• Aesop: Entering new geographies
Cost synergies• Efficiency and scale gains
• Global procurement
• Lower group cost of capital
4
Leveraging group scale to unlock synergies
Page 14
Launch of 3 Networks of Excellence:
• Sustainability
• Digital
• Retail
Key objectives:
• Leverage capabilities and expertise in each company
• Stimulate sharing of best practices
• Develop common agendas
• Capture synergies
Working together in a collaborative,
non-hierarchical network:
• Multi company teams
• Fostering cooperation between brands and businesses
for the benefit of the group
• João Paulo Ferreira (Natura)
• David Boynton (TBS)
•
4
Making the most of the group: Steering collaboration through Networks of Excellence
Sponsors
Page 15
Key objectives:
• Speak to the supplier base with a single Natura &Co voice to optimize costs,
payment terms and inventory management
• Harmonize protocols and policies, reducing compliance and supply risks
• Develop strategic partnerships with key suppliers for co-creation
(faster and bolder innovation)
• Promote purchasing process transparency
Capture of synergies and scale through a Global Procurement Organization, leveraging the expertise available throughout the group
4
Synergy case study: Creating a common procurement organization
Page 16
Gifts *
Aerosol*
Pumps
Glass
Folding carton and corrugate*
Services
Marketing
Plastics
TubesStore furniture
Real Estate
Travel
Natura &Co Ability to win/leverage
Le
velo
f Glo
ba
liza
tio
no
f Su
pp
lier
Ma
rke
t
Soaps
Oleochemicals
Fragrance& Alcohol
Logistics3PL
IT
Filters, Pigments
Make Up International freightSamples,
Surfactants
Low High
Lo
wH
igh
2018
2019
*Only Natura spend
4
A two-wave implementation plan through 2019
Page 17
Procurement CommitteeGlobal Procurement Leader, Supply Chain VPs, Procurement Directors,
category and business buyers
Category Expert
Market facing: Scouting, cost modelsDrive category strategyManage strategic supplier relationshipCategory transformation projects
Procurement Teams
Business Buyer
Business Facing:Define and manage needDevelop and deliver projects/actionsManage supplier performanceManage tariffs, budget and NPD
Operating model
4
A lean and cost-efficient organization
functional network
Page 18
4
A R$ 420 million opportunity for the group
R$ 420 million*
Global procurement spend approx.:
5%
R$ 8.5 billion a year
Cumulative cost savings in 3 years:
Page 19
This figure is part of the overall guidance provided further on in this presentation. It is based on a mapping of the scale gainpurchasing volumes in such categories as logistics, third party services, raw materials, packaging, information technology and others. There are other opportunities to capture from access to a larger number of suppliers, currency diversification and centralized negotiations with suppliers. The estimated savings result from a comparative overview of market practices.
*At current exchange rates.
Turn around TBS and accelerate
its growthin Latam
Expand Natura’smultichannel
transformationand international
footprint
Continue Aesop’sgrowth
momentum andexpantion
4
A clear financial strategy focused onprofitable growth,
cash generation anddeleveraging
Establishing governance and culture
Driving value creationGetting the most out of the Group
Capture Natura Group synergies
Strengthengovernance, international capabilities &
processes
Page 20
Taking Natura to the next level
João Paulo FerreiraCEO Natura
Page 21
1990
2000
2010
20202030
BRAZILEXPANSION
INTERNATIONALEXPANSION
DirectSales
DirectSales
ExponentialModel
+ +Multichannel
&Digitization
Convergence&
Transcendence
The Natura Journey: A growth story based on passion for cosmetics and relationships
N a t u r a & C o D a y | N A T U R A
LATAMEXPANSION
Page 22
2014 2016:NATURA WAS LOSING MOMENTUM
N a t u r a & C o D a y | N A T U R A
with some short-term bumps on the road
LOSING TOUCH WITH:
Beautyattributes
Higher-income consumers
Young consumers
Lower market share in direct sales
Lower household penetration share-of- wallet
RESULTING IN:
AMID CHANGING STRUCTURAL MARKET TRENDS:
New brands
New competitorsin direct sales
Changing shopping habits and channels
Page 23
4 5 6
REVITALIZATION
OF DIRECT SALES
ONLINE & OFFLINE
CONVERGENCE OF THE
COMMERCIAL MODEL
MULTI-CHANNEL SHOPPING
EXPERIENCE
N a t u r a & C o D a y | N A T U R A
2017: A new roadmap for Natura
A S I X- P I L L A R A C T I O N P L A N TO R E - D Y N A M I Z E O U R B U S I N E S S M O D E L A N D R E S U M E G R O W T H
NATURA BRAND
1
CATEGORIES AND BRANDS
STRATEGY
EXPANSION INTO NEW MARKETS
2 3
1 2
Page 24
Natura brand relaunch
N a t u r a & C o D a y | N A T U R A
WE REPOSITIONED THE NATURA BRAND
Revised brand architecture
Key sub-brands relaunch
1 2
Page 25
Live your living beautyPage 26
We redesigned the brand architecture
• Fragrances• Body care• Gifts
CORE CATEGORIES BRAND STRATEGY
Higher household penetration
• Ekos• Chronos• Tododia• Faces • Aquarela
• Kaiak• Essencial• Humor• Una • Luna
Clear role to reach target consumers
N a t u r a & C o D a y | N A T U R A
2
• Core beauty
Strengthen beauty attributes
Page 27
Ekos ChronosPage 28
Perfumery HousePage 29
Natura HomemPage 30
Tododia (Wear your skin, live your body)Page 31
Faces AquarelaPage 32
N a t u r a & C o D a y | N A T U R A
55.5%
64.6%
Q2-16 Q4-17
+9.1p.p.
Relevant innovation combining cosmetics, technology and biodiversity
Innovation index
1 2
Page 33
jan out nov dez
Fragrance
jan out nov dez jan out nov dez
N a t u r a & C o D a y | N A T U R A
Leadership recovery in key categoriesResuming market share gains in Brazil in 2017
Body care Gifts
Main competitor
Marketshare
%
2017
Page 34
1 2
Salesthrough relations
Previous model
Natura Consultants
Beauty Consultants
New model
Business Leader
Silver Gold DiamondSeed
BronzeBeauty
Consultants
Silver Gold Diamond
Value proposition
Transforming our model from direct sales to relationship selling
N a t u r a & C o D a y | N A T U R A
26%Direct sales
of Brazilian CFT market
3
=
New Narratives
Page 35
Relationship SellingPage 36
80
90
100
110
120
130
140
150
More consultants in top 3 tiersand higher overall productivity
Number of consultantsvs. productivity (Brazil)
2017
N a t u r a & C o D a y | N A T U R A
Gross revenue Number of consultantsProductivity
Jul/2017 Feb/2018
Silver, Gold and Diamond
consultants
Totalconsultants
(million)
Productivity per consultant
+5.8%
1.21.0
+18.0%
3
Page 37
N a t u r a & C o D a y | N A T U R A
Digital solutions enhance direct sales shopping experienceProviding our consultants with tools to amplify their potential
v
E-commerce Direct sales
Direct sales revitalization
through digital
Relationship-driven model fostered by digital
Relational e-commerce
4
Page 38
Target:
1 millionconsultants
by 2019
N a t u r a & C o D a y | N A T U R A
Using cutting-
An app designed for consultants
• 10X times more interactions with Natura
• Bots, agumented reality, analytics and CRM
• High customer review rating in app stores
555,000active consultants
21% of total orders
+10% average productivity
gain/consultant
Rapid adoption
4
Outstanding UEx
Growing relevancePage 39
Natura Relationship Selling can deliver an excellent shopping experience:
N a t u r a & C o D a y | N A T U R A
Multiple channels for different shopper profiles and category drivers
• Extensive reach• Assortment with innovation• Endorsement and advocacy marketing• High service level• Advice on products and beauty
Which can be complemented with other channels
Fragrance/makeup
Face care
Shopperprofile
Personalcare
30% A S S I S TA N C E
36% E X P E R I E N C E
34% C O N V E N I E N C E
5
Page 40
N a t u r a & C o D a y | N A T U R A
Natura is increasingly multichannel to attract younger, more affluent beauty consumers
Natura Beauty Consultants
Natura Beauty Entrepreneurs
Natura Beauty Specialists
Rede Natura
One of the most visited digital sales
channels for beauty products in Brazil
Growing database
of direct consumers
Natura stores
AB1 consumers
26 stores (19 in Brazil)
Makeup and face care
Premium portfolio: Ekos, Chronos, UnaRelationship-
based model
5
Page 41
N a t u r a & C o D a y | N A T U R A | 3 . O N L I N E & O F F L I N E C O N V E R G E N C E O F T H E C O M M E R C I A L M O D E L
We have created a powerful online sales platform: Rede Natura
_Best online store in 2017¹
_Leader in trafficin cosmetics2
_High double-digit growthDouble-digitEBITDA margin
_220,000+digital consultants; 62% of online sales
_3.5 millionconsumers30% aged below 30 (vs. 18% in direct sales)
_50% of sales
through mobile
Source: ¹Ebit popular vote | ²Source: Similarweb. Cosmetics segments (natura.com.br+natura.net),
Rede Natura
5
Page 42
_26 stores (19 in Brazil)
_Average store size: 70m²
_Break-even: Less than 2 years
_Further expansion in 2018
_Premium portfolio
_Focus on core beauty
N a t u r a & C o D a y | N A T U R A
A growing physical store network
5
Page 43
N a t u r a & C o D a y | N A T U R A
Natura resumes no 1 ranking in Brazil
Page 44
1 2 3 4 5
Rolling out our multichannel model
•Fast-growing market
• Increasing brand awareness
•Strong brand preference
•Growing number of consultants
• Improving productivity
LATAM CFT Market (US$ Billion)
Online sales and first storeopenings in Argentina and Chile
Several drivers for further sustainable growth
CAGR 10.1%
CAGR 8.0%
N a t u r a & C o D a y | N A T U R A
Latam: Successful growth platform to be boosted by commercial innovation
19,5 23,7
25,9
35,3
2015 2017 2018 2022 E
1 2 3 4 5
Page 45
302,000
589,000
Q4-12 Q4-13 Q4-14 Q4-15 Q4-16 Q4-17
5.1%Growth 3X above average
of competitors
Market share1
CFT Market1
(USD billion)
Brand awareness2
Market share1
98%
2º
5.4
9.5%
99%
1º
3.3
5.5%
97%
3º
9.4
2.4%
97%
*1º
3.3
4.9%
100%
*1º
2.2
6.5%Number of
consultants
2012 2017
2012 2017
N a t u r a & C o D a y | N A T U R A
Latam: Strong performance across the region
Source: ² Equity Millward Brown, 2017 | *Tied for first place
Source: ¹ Euromonitor International 2017, LATAM Beauty and Personal Care | (Argentina, Chile, Peru, Colombia and Mexico)
2.4%
24
1 2 3 4 5
Brand preference2
Page 46
1.256
1.525
2016 2017
7.333
7.690
2016 2017
Natura consolidated performance
EBITDA
Latam: Continued profitable growthBrazil: Turnaround underway
19.3%
EBITDA Margin (%NR)
22.6%
12.5%
13.8%
(R$ million)
Constant exchange rates
23.1%
21.3%
17.1%
19.8%
5.335 5.575
2016 2017
1.032
1.257
2016 2017
21.8%4.5%4.9%
7.8%
1.983 2.108
2016 2017
248
292
2016 2017
17.9%
27.6%
6.3%
18.0%
N a t u r a & C o D a y | N A T U R A
Sales and profitability growth back on track
Net sales EBITDANet sales EBITDANet sales
1 2 3 4 5
Page 47
32%
5%
14%
8%
20%
20%
Global Market
Western Europe
North America
Middle East, Africaand Australia
Latin America
Eastern Europe
Asia Pacific
N a t u r a & C o D a y | N A T U R A
Strong upside potential in new geographies and channels
Where is Natura present?
LATAM 14%
Direct sales 26%
3.6%
14%
26%
2%
58%
Latin America
Store-basedretailing
Internet retailing
Direct sales
Beauty specialistretailers
Non-retailchannels
Source: Euromonitor International 2017, Beauty and Personal Care.
Beauty and Personal Care Market size
6
of geographiesand channels of
global CFT market
Page 48
N a t u r a & C o D a y | N A T U R A
Lower entry costs
Synergies, scale gains
Faster break-even
Intimacy with local markets
68 countries
6
80% of global CFT marketof which 66% is new to Natura
Page 49
A M E R I C A S | N A T U R A
Transcendence: The 2 X 20 X 200 opportunity
Source: PEN 2018 - 2022
2 millionconnected
consultants
20 millionconsumers in Latam, consuming content,
products and cosmetic services
200 millionconsumers connected
to the Natura ecosystem worldwide
6
Page 50
© 2015 The Body Shop International plc
NATURA &CO DAY20 April 2018
David Boynton CEO
ICONIC BRITISH BEAUTY BRAND
• 22,000 PEOPLE
• 68 COUNTRIES
• 3,049 STORES
• 400 GLOBAL
TRAVEL
RETAIL LOCATIONS
Page 52
BUSINESS AS A FORCE FOR
GOOD
Page 53
1976THE FIRST
THE BODY SHOP STORE OPENS IN BRIGHTON, UK
1992PUBLISHED OUR FIRST
ENVIRONMENTAL STATEMENT
1987COMMUNITY
TRADE(TRADE NOT AID)
LAUNCHES
1994 THE BODY SHOP
AT HOME IS LAUNCHED
TO GIVE WOMEN THE OPPORTUNITY
TO WORK FLEXIBLY
1997THE BODY SHOP
BECOMES THE FIRST COMPANY RECOGNISED
UNDER THE HUMANE COSMETICS STANDARD
BY BUAV (NOW CFI)
2017 EAST CROYDON
INNOVATION LAB OPENS
2016 THE BODY SHOP
LAUNCHES ITS ENRICH NOT EXPLOITTM
COMMITMENT
2020WE WILL MEET OUR
TARGETS IN OUR FIRST STEP TO BECOMING THE
SUSTAINABLE BUSINESS
2006THE BODY
SHOP PURCHASED
2011THE BODY SHOP
HELPS FORM THE GLOBAL
SHEA ALLIANCE
2017THE BODY SHOP
IS PURCHASEDBY BRAZILIAN
BEAUTY BRAND, NATURA
Page 54
A TRULY GLOBAL BRAND
NORTH AMERICA2 COUNTRIESCOMPANY OWNED257 STORES
EUROPE, MIDDLE EAST
& AFRICA47 COUNTRIES
12 COMPANY-OWNED 35 HEAD FRANCHISE
1,489 STORES
ASIA PACIFIC
16 COUNTRIES3 COMPANY-OWNED
13 HEAD FRANCHISE1,127 STORES
LATIN AMERICA3 COUNTRIESCOMPANY OWNED176 STORES
Page 55
56
MULTI-CHANNEL APPROACH
IN-STORE3,049 STORES GLOBALLY
DIGITAL33 E-COMMERCE SITES
WHOLESALE DIRECT SALESTHE BODY SHOP AT HOME
OUR KEY CATEGORIES
BODYCAREBODY BUTTER, LOTION
HANDS, LIPS, GIFTS
SKINCAREMOISTURISER, SERUMS,
MASKS, CLEANSER, MEN, GIFTS
BODY HYGIENESHOWER GEL SCRUBS,
DEO, MISTS
HAIRCARESHAMPOO, CONDITIONER
MAKEUPFACE, LIP
FRAGRANCEEDT, OILS, BODY LOTION
Page 57
OUR MOST-LOVED PRODUCTS
*AS OF FEBRUARY 2018
GINGER SHAMPOO
400ML
HIMALAYAN CHARCOAL
FACIAL MASK
HEMP HAND PROTECTOR 100ML
DROPS OF YOUTHLIQUID PEEL
DROPS OF YOUTHYOUTH CONCENTRATE
50ML
DROPS OF YOUTHYOUTH
CONCENTRATE 30ML
TEA TREE OIL 20ML
DROPS OF YOUTHDAY CREAM 50ML
SHEA BODY BUTTER 200ML
ALMOND MILK & HONEY BODY BUTTER 200ML
7
TEA TREE OIL 10ML
1 2 3 4 5 6
8 9 10 11 12
TEA TREE SKIN CLEARING FACIAL
WASH 250ML
Page 58
59
MORE INNOVATION IN 2018
• Launch of body yogurt
• Investing in critical body care category
• 100% vegan
• Fast absorbing, 48 hour moisturising
• Initial launch in US and Finland
Specially formulated to apply on damp skin
Contains Community Trade organic almond milk
Available in our six best-selling scents
Page 59
60
IMPROVING PERFORMANCE
Page 60
GROWTH IN REVENUE AND EBITDA IN 2017
Net revenues1
(Constant currency £M)EBITDA 1
(Constant Currency £M)
777.8 794.9
2016 2017
6166
2016 2017
8.6%
1 Pro-forma: includes financial performance prior to the acquisition
• First EBITDA growth since 2013
• Clear opportunities for future growth
2.2%
Page 61
WELL-SPREAD SALES ACROSS GEOGRAPHIES NORTH AMERICA21% +4% vs. 2016
EUROPE, MIDDLE EAST & AFRICA
49%-1% vs. 2016
ASIA PACIFIC
27%+6% vs. 2016
LATIN AMERICA3%+19% vs. 2016
Excluding Saudi Arabia
the growth is 1%
Page 62
WELL-BALANCED SALES BY CHANNEL AND CATEGORY
5823
9
10
By channel
Own Store Franchisee
E-commerce Others
32
29
12
9
85 5
By category
Body Care Skin Care GiftsMake up Fragrance Hair CareOthers
Page 63
2022TRANSFORMATION
UNDERWAY
Page 64
65
A FIVE-PILLAR TRANSFORMATION PLAN
REJUVENATETHE BRAND
1
OPTIMISE RETAIL OPERATIONS
2
RE-DESIGN ORGANISATION
5
ENHANCE OMNI-CHANNEL
3
IMPROVE OPERATIONAL EFFICIENCY
4
• Transformation office with a dedicated team
• Committed and accountable 200-strong transformation team
• 17 workstreams within these five pillars
1REJUVENATE
BRAND
REVITALISE THE BODY SHOP PURPOSE AND BRING IT TO LIFE FOR CUSTOMERS
REDUCE PROMOTIONAL INTENSITY & IMPROVE PRICING ARCHITECTURE
RESET CATEGORY STRATEGIES, EVENT MANAGEMENT AND STOCK MANAGEMENT
SECURE THE SUCCESS OF BODY YOGURT AND CHRISTMAS
3ENHANCE
OMNI-CHANNEL
DRIVE ECOMMERCE IN EXISTING AND NEW MARKETS
DEFINE AND DRIVE THE GLOBAL CHANNEL STRATEGY INCLUDING WHOLESALE
INVEST IN CRM & MARKETING TO INCREASE TRAFFIC
2OPTIMISE
RETAIL OPERATIONS
TURN AROUND THE US
TURN AROUND GERMANY, DENMARK AND SWEDEN
RENEW STORE FOOTPRINT
ENTER NEW HEAD FRANCHISE MARKETS
BOOST LATAM GROWTH
CREATE A WINNING IN-STORE CUSTOMER EXPERIENCE
4IMPROVE
OPERATIONAL EFFICIENCY
REDUCE OPEX THROUGH INDIRECT AND DIRECT SAVINGS
INCREASE CAPEX SPEND EFFICIENCY
5RE-DESIGN
ORGANISATION
STRENGTHEN CULTURE AND TALENT
RE-DESIGN THE OPERATING MODEL TO ENABLE THE STRATEGY
Page 66
8.4% 10-11% 12-14%
61 61 61
21 - 25 21 - 25
41 - 4982 - 86
123 - 135
2016 A 2019 E 2022 E
WE AIM TO DOUBLE EBITDA TO £123M BY 2022
2016 EBITDAbaseline
Cost improvement
Topline growth
EBITDA margin
Expected EBITDA evolution £M
1 Based on December 2017 rate of 0.75 £ for 1 US$
1
Page 67
8.4% 10-11% 12-14%
61 61 61
21 - 25 21 - 25
41 - 4982 - 86
123 - 135
2016 A 2019 E 2022 E
SEVERAL ACTIONS TO DELIVER COST IMPROVEMENTS
Redesign the operating model to bring half of total expected savings by 2019
Reduction of indirect costs to bring a third of total savings by 2019:
Store footprint rationalization
Third party services
Remaining cost improvements coming from packaging, supply chain, shared facilities and improved warehouse efficiency
Simplification of product portfolio: Reduce total live SKUs by at least 20%, analysis already underway
Page 68
8.4% 10-11% 12-14%
61 61 61
21 - 25 21 - 25
41 - 4982 - 86
123 - 135
2016 A 2019 E 2022 E
FOCUSED ACTIONS TO DELIVER TOP LINE GROWTH
Turn around the US, Germany, Denmark and Sweden through store portfolio and brand rejuvenation
Grow owned ecommerce sales to 15% of total by 2022; roll out new ecommerce sites in all remaining sizeable Head Franchise markets (21 currently live)
Achieve a 25% increase in marketing investments as a percentage of net sales by 2022
Create a clearer and more transparent pricing architecture to reflect the quality of our products
Grow Latam footprint by leveraging Natura's infrastructure and capabilities
CONCLUSION: THREE KEY GOALS
Deliver the transformation plan1
2
3
Drive sustainable triple bottom line growth
Regain The Body Shop´s activist voice
Page 70
Aesop: Poised for further growthMichael O'Keeffe, CEO
Natura &Co Day. April 20, 2018
The Aesop Natura partnership: A growth story
2012Aesop before Natura Partnership
2017
Sales A$57 million X 5 A$291 million
Signature Stores
52 +157 209
EBITDA A$7 million X 8 A$55 million
Countries 10 +13 23
Headcount ~300 X 6.5 1,979
Page 73
Aesop has a direct presence in 23 countries
Aesop retail presence
Aesop stockist presence
2017 growth:
34%
Retail subsidiaries 3
Signature stores 61
Counters 19
2017 growth:
20%
Retail subsidiaries 2
Signature stores 36
Counters 24
2017growth:
27%
Retail subsidiaries 9
Signature stores 54
Counters 17
No presence
2017 growth:
34%
Retail subsidiaries 7
Signature stores 58
Counters 38Americas: 15%
Europe: 22%
Asia: 36%
ANZ: 27%
Page 74
A customer first approach
Products
Design A non-conformist culture
Page 75
Aesop Nolita New York Aesop Marais Paris
Aesop Tokyo Aesop Oscar Freire São Paulo
A portfolio of incredible stores around the world
Page 76
Aesop | Vision: We are only at the start of an exciting journey
A global integrated network of online and physical stores
that delivers exceptional products and experiences, with
strong connections to core customers in all markets,and good brand recognition among the wider
community.
Growing businesses in all major markets of the worldwith committed leaders and supported staff.
Page 77
Aesop | Vision: Four main areas of focus
Build deeper penetration in
markets across the globe
Evolve into anomni-channel
retailer
Continue to launch new and innovative
products
Lighten our environmental
impact and have a positive impact on
societyAesop store
locations
No stores
Page 78
2017
2020
Signature Stores 209 Further expansion
Countries 23 29 - 31
Leveraging our regional offices, Aesop will continue to grow its business through both existing and new cities
12 month like-for-like growth rates:• Signature stores 15%• Department stores 15%
Our signature store presence will expand by almost 50% by 2020
In addition to new stores, Aesop will continue to drive its returns from existing stores by increased customer conversion and improved transaction size
Page 79
Build deeper penetration in
markets across the globe
• Through a mix of subsidiaries and distributors, with a focus on leveraging our presence in existing regions.
• In 2017, Aesop entered Austria and UAE (Dubai), with both countries trading strongly.
• A carefully sequenced roll-out plan taking into account market potential and resourcing has been developed.
Asia Pacific• Philippines
• Indonesia
• Vietnam
Europe• Russia (2018)
• Belgium (2018)
• Netherlands
• Spain (2019)
• Portugal
By 2020, our geographical footprint will extend into a further 6-8 countries
Build deeper penetration in
markets across the globe
Page 80
Continue to grow our business
Evolve into anomni-channel
retailer
Continue to launch new and innovative
products
Lighten our environmental
impact and have a positive impact on
society
Aesop | Vision: Four main areas of focus
Page 81
AESOP 2005
AESOP 2025
R&D Brand DistributionR&D Brand Distribution
Retail Customer
PRODUCT-CENTRIC(Aesop 2005)
RETAIL CENTRIC(Aesop 2017)
ONE RETAILSTRATEGY
Customer
D
a
i
Page 82
Evolve into anomni-channel
retailer
aesop.com was re-launched in 2017 across most markets
Page 83
Evolve into anomni-channel
retailer
Continue to grow our business
Evolve into anomni-channel
retailer
Continue to launch new and innovative
products
Lighten our environmental
impact and have a positive impact on
society
Aesop | Vision: Four main areas of focus
Page 84
Aesop will continue to release limited, best-in-class products
Continue to launch new and innovative
products
In Two Minds Range
(Cleanser, Toner and Hydrator)
Toothpaste
Deodorants Roll-On
Hwyl Eau de Parfum
Room Sprays
• Skin care is our dominant product category, but Aesop is also strong across body, hair, perfume and home products
Page 85
Continue to grow our business
Evolve into anomni-channel
retailer
Continue to launch new and innovative
products
Lighten our environmental
impact and have a positive impact on
society
Aesop | Vision: Four main areas of focus
Page 86
Sustainable store design principles instilled
Aesop Foundation launched
B Corp benchmarkingDeliver transformation required to be a triple bottom line business
100% of products vegan and cruelty free
Light-weighting of packaging
Audit high risk suppliersB Corp Certification and continuous improvement
First sustainability strategy outlined
Product Stewardship function instilled
100% recycled PETRobust ethical sourcing and supply chain transparency audit program
Ecological balancing / offsetting
AU$1.2 million gifted to charitable entities to support literacy and storytelling
Product LCA indexation complete
Reduced emissions targets set
20172020
2025
20132017
20202025
2013
Page 87
Lighten our environmental impact and
have a positive
impact on society
Established the Aesop Foundation
AUD$1.2m
distributed to charities
10 charitable organisations
supported
70+ charities in the pipeline
Development of Global Philanthropy
StrategyStaff engagement
In contribution to our wider community, the Aesop Foundation was established in 2016 to provide individuals with greater opportunities through the development of literacy and storytelling. We partner with organisations to cultivate written and verbal skills, and provide a platform for expression to those who may otherwise struggle to be heard. Through two distinct granting programs, it is our hope that we nurture diversity within the community, and the culture of the arts with resounding effect.
Lighten our environmental
impact and have a positive impact on
society
Page 88
Aesop | Vision: An exciting journey so far. Significantly more growth and development to come
Page 89
Continue to grow our business
Evolve into anomni-channel
retailer
Continue to launch new and innovative
products
Lighten our environmental
impact and have a positive impact on
societyAesop store
locations
No stores
A global integrated network of online and physical stores
that delivers exceptional products and experiences, with
strong connections to core customers in all markets,and good brand recognition among the wider
community.
Growing businesses in all major markets of the worldwith committed leaders and supported staff.
Group financial results and outlook
Roberto MarquesExecutive Chairman
of the Board
90
7,912.6
9,852.7
2016 2017
24.5% 7.2%
As reportedPro forma
(at constant exchangerates)
91
10,880.1 11,667.5
2016 2017
10.880,1 11.667,5
2016 2017
Natura TBS Aesop
R$ million
Solid increase in consolidated net revenue supported by growth in all businesses
1,565.51,783.2
2016 2017
1,343.6
1,741.9
2016 2017
As reportedPro forma
(at constant exchangerates)
29.6%13.9%
92
10.880,1 11.667,5
2016 2017
Natura TBS Aesop
R$ million
Robust improvement in EBITDA
Free cash flow generation (reported)
617.2
242.5
2017
469.9
2016
859.7
Free cash flow generation
1.4x
3.5x
3.0x
1.4x
End 2016 Q3-17 End 2017 End 2021
Net debt to EBITDA ratio
PERT disbursement
93
3.6x initial guidance
Solid cash generation and deleveraging ahead of plan
Capex
• Natura: Focus on retail and digital development, innovation and Latam expansion
• TBS: New stores and store refits, digital and infrastructure
• Aesop: Focus on signature store expansion and refurbishings
94
* TBS capex (Pro forma)
*
A clear financial strategy to fund further growth
481
322
229 218300
24
61
77 80
103
189*146*
183
506
383
495
444
586
2014 2015 2016 2017 2018
Natura Aesop TBS
R$ millions• Focus on continuous improvement in cash flow generation
• Allocate resources to projects with the highest returns
• Reach pre-transaction indebtedness ratio in 2021, one year ahead of initial schedule
• Maintain 2017 dividend payout level to allow deleveraging
CAPEX
11,667
17,150
2017 2022
Net sales 1
(in R$ MM)
95
1In BRL, 2017 net sales include full year of The Body Shop pro-forma.2 In BRL, 2017 EBITDA includes full year of The Body Shop pro-forma and was adjusted to exclude non-recurring effects of R$ 127 million, as detailed in appendix I.Under current accounting principles and including estimated foreign exchange rates (see appendix II)
Over the next five years, we target high single-digit growth in net sales1 and low double-digit growth in EBITDA2 on a compound annual growth rate (CAGR) basis,
aiming at a near-doubling of EBITDA by 2022
High single-
digit CAGR
1,656
3,100
2017 2022
EBITDA2
(in R$ MM)
Lowdouble-
digit CAGR
Targeting solid sales and EBITDA growth through 2022
Key takeaways
Roberto Marques Executive Chairman
of the Board
96
A Strengthened consolidated financial performance
• High single digit compound annual growth in net sales through 20221
• Near doubling of EBITDA by 20222
• Return to pre-transaction indebtedness level of 1.4x EBITDA in 202197
Key takeaways: The new group on the moveGovernance in place and first synergies identified, strong potential to
-how to unleash further value creation
Back on a growth path through the transformation of its business
model in Brazil, accelerated expansion in Latin America and a growing international footprint
Revival of an iconic brand underway in
each of the five pillars
turnaround plan
Continue strong growth performance
and increase its relevance within
the group
Clear roadmaps for the three brands:
98
Three empowered, iconic brands with
clear roadmaps
A global, increasinglymultichannel presence
A complementary productportfolio in key categories,
based on innovationand sustainability
Leveraging the Group'sscale and know-how to
share resources andenhance efficiency
A clear financial strategyto fund further growth
Positioned in an attractive, growing industry
1 2 3
4 5 6
Natura &Co: A compelling investment case
Solid sales and EBITDA growth through 2022
Q&A
99
APIMEC
100
APIMEC
101
NATURA COSMÉTICOS S.A.
102
Thank you
103