Natura &Co posts constant currency sales growth and stable margin in Q 3.

SAO PAULO: Natura &Co (NYSE - NTCO; B3 - NTCO3) posted a resilient performance in the third quarter, with sales growth in constant currency and stable adjusted EBITDA margin, while making significant progress on moves to make the Group leaner and simpler and give brands more autonomy and accountability.

Natura &Co posted consolidated net revenue of R$ 9 billion, up 2.2% at constant currency (-5.7% in BRL) in the third quarter. Adjusted EBITDA margin was 8.6%, stable compared to Q3 of last year. Net income was R$ (560) million and the Group ended the quarter with a solid cash position of R$ 4.6 billion. Efforts to focus on cash generation also showed good results, with a significant improvement in cash conversion in Q3.

Digitally-enabled sales, which include online sales (e-commerce + social selling) and relationship selling using digital apps, reached 50.1% of total net revenue, up from 49.8% in Q3 of last year. At Avon International, penetration of the Avon On app (active representatives who logged in at least once in the last three campaigns) rose to 19.7% in Q3-22, compared to 13.7% in Q3-21. At Natura in Latam, the average number of consultants sharing content increased to 28.6% this quarter, compared to 23.9% in Q3-21, while orders through the 1.5 million+ consultant online stores increased by 15% in the region.

Fabio Barbosa, Group CEO of Natura &Co, declared: "Natura &Co posted results in line with our expectations, with top line trending better, while margins continued to be pressured by the challenging macroeconomic environment marked by high inflation, lower discretionary spending and foreign exchange impacts.

Natura &Co Latam posted solid performance, notably the Natura brand and the Avon CFT segment in the region. Aesop posted another consistent quarter of growth while Avon International showed another sequential improvement in results and in key channel indicators. On the other hand, The Body Shop continued to post challenging results amid channel decline in the At-home segment and slower franchise recovery.

The Group reorganization that we announced last quarter has made good progress. We have significantly reduced operating costs at the Holding and continue to implement important steps to give each brand more autonomy and accountability. Other structural steps are also in motion: We are accelerating the integration of the Avon and Natura businesses in Latin America, starting in 2023 with Peru and Colombia, quickly followed by...