natura day 2010 finance - infoinvest · 2018-07-05 · natura day 2010 es. schedule 18 time...
TRANSCRIPT
Roberto Pedote Vice President, Finance,
IT and Legal Affairs
Finance
Natura Day 2010
Agenda
• Schedule
• Value Proposition
• Value Chain
• Results
2
Schedule
3
Schedule
Time Duration Activity Presenter
8:30 am 30 min Breakfast and Registration IR
9:00 am 40 min New makeup line Natura UNA Liliane
9:40 am 20 min Welcome - Schedule - Results Pedote / Helmut
10:00 am 25 min General Overview and Prospects Alessandro
10:25 am 25 min Brazilian Operations Zé Vicente
10:50 am 20 min Break
11:10 am 25 min International Operations Zé Vicente
11:35 am 25 min Innovation, Research & Development Telma
12:00 pm 50 min Q&A: Alessandro + Zé Vicente + Telma + Pedote
12:50 pm 90 min Lunch with Relationship Managers All participants
2:20 pm 25 min Operations and Logistics João Paulo
2:45 pm 25 min Development of Leadership, Culture and Sustainability Marcelo
3:10 pm 40 min Q&A: Alessandro + João Paulo + Marcelo + Pedote
3:50 pm Closing Alessandro
3:50 pm 60 min Cocktail
4:30 pm 30 min Tour
4
Alessandro Carlucci
› CEO
› Joined Natura in 1989
› Member of the Board of Directors of the
World Federation of Direct Selling Associations
and Redecard
› BBA from FGV, Chicago’s Kellogg-Northwestern
Roberto Pedote
› Vice President of Finance, IT and Legal Affairs
› Joined Natura in 2008
› BA in Public Administration from FGV and Law
from USP, MBA from Michigan University
› 16 years experience at Unilever (Brazil, UK and
LatAm), Nokia in Brazil
João Paulo Ferreira
› Vice President, Operations and Logistics
› Joined Natura in 2009
› Engineering (USP), MBA (Michigan)
› 20 years experience at Unilever, with local,
regional and global roles. Vice President,
Supply Chain
José Vicente Marino
› Business Vice President
› Joined Natura in 2008
› BBA and MBA from FGV, MBA in Retail
(USP)
› Served as executive VP of hygiene and
personal care division of Johnson & Johnson
in Brazil
Marcelo Cardoso
› Vice President, Organizational Development
and Sustainability
› Joined Natura in 2008
› BBA
› MBA in Retail (USP), Chicago’s Kellogg-
Northwestern
› Served at GP Investimentos (HopiHari,
Playcenter, Método Engenharia), Regional DBM
› President
Telma Sinicio
› Vice President, Innovation
› Joined Natura in 2009
› BS and Masters in Engineering ESALQ (USP),
Wharton Business School
› 26 years at Johnson & Johnson Consumer Products
Companies Worldwide in R&D
Executive Committee
5
Our Relationship Managers invite you all for lunch...
Glaucilene
Vanessa
Andreia
Eliana
Roseli
Sandra
Cintia
Julia
Monica
Gilseia
Patricia
Mara Lucia
Ivani
Rita
6
Value Proposition
7
UNIQUE Value Proposition
CHANNEL PRODUCTS
CORPORATE BEHAVIOR
BRAND
“Triple Bottom Line”
Social › Wealth creation for consultants
› R$ 60 mn invested in CSR1 in 2009
› Sharing benefits with supplier
communities
Economic › Strong cash flow generation
› Growth and profitability
› Consistent dividend payment
Environmental › Carbon neutral operations
› Use of refill package
› Sustainable extraction
› Use of recycled and recyclable
materials
1 Corporate Social Responsibility
Transform social and
environmental challenges
into business opportunities
8
Value Chain
9
Value Chain
support processes
management processes
Natura Differential
NA
TU
RA
CO
RE
VA
LU
ES
va
lue
pro
po
sit
ion
People Management
Finance
main processes
Information Technology
Strategic
Planning
Corporate
Governance
IOs
IOs
Brazil
Commercial
Management
Market
Management
Brazil
Business
Management
Brazil
IOs
Management
Systems
Partnerships
& Alliances
Product
Quality Management
Support
Services
Relationship Sustainability Risks and
Audit
Legal
Requirements
Rela
tion
sh
ip b
etw
een
co
nsu
ltan
t an
d e
nd
co
nsu
mer
Brand Management
Products Made Available
IOs
Brazil Order Cycle
Business
Innovation
Product
Innovation
Commercial
Innovation
End C
onsum
er
Funnel of Ideas and Concepts
10
support processes
management processes
Natura Differential
NA
TU
RA
CO
RE
VA
LU
ES
va
lue
pro
po
sit
ion
People Management
Finance
main processes
Information Technology
Strategic
Planning
Corporate
Governance
IOs
IOs
Brazil
Commercial
Management
Market
Management
Brazil
Business
Management
Brazil
IOs
Management
Systems
Partnerships
& Alliances
Product
Quality Management
Support
Services
Relationship Sustainability Risks and
Audit
Legal
Requirements
Rela
tion
sh
ip b
etw
een
co
nsu
ltan
t an
d e
nd
co
nsu
mer
Brand Management
Products Made Available
IOs
Brazil Order Cycle
Business
Innovation
Product
Innovation
Commercial
Innovation
End C
onsum
er
Funnel of Ideas and Concepts
11
Alessandro Carlucci CEO: Natura Core Values and Prospects
support processes
management processes
Natura Differential
NA
TU
RA
CO
RE
VA
LU
ES
va
lue
pro
po
sit
ion
People Management
Finance
main processes
Information Technology
Strategic
Planning
Corporate
Governance
IOs
IOs
Brazil
Commercial
Management
Market
Management
Brazil
Business
Management
Brazil
IOs
Management
Systems
Partnerships
& Alliances
Product
Quality Management
Support
Services
Relationship Sustainability Risks and
Audit
Legal
Requirements
Rela
tion
sh
ip b
etw
een
co
nsu
ltan
t an
d e
nd
co
nsu
mer
Brand Management
Products Made Available
IOs
Brazil Order Cycle
Business
Innovation
Product
Innovation
Commercial
Innovation
End C
onsum
er
Funnel of Ideas and Concepts
12
José Vicente-VP Business: Brazilian Operations
support processes
management processes
Natura Differential
va
lue
pro
po
sit
ion
People Management
Finance
main processes
Information Technology
Strategic
Planning
Corporate
Governance
IOs
IOs
Brazil
Commercial
Management
Market
Management
Brazil
Business
Management
Brazil
IOs
Management
Systems
Partnerships
& Alliances
Product
Quality Management
Support
Services
Relationship Sustainability Risks and
Audit
Legal
Requirements
Rela
tion
sh
ip b
etw
een
co
nsu
ltan
t an
d e
nd
co
nsu
mer
Brand Management
Products Made Available
IOs
Brazil Order Cycle
Business
Innovation
Product
Innovation
Commercial
Innovation
End C
onsum
er
Funnel of Ideas and Concepts
13
José Vicente-VP Business: International Operations
NA
TU
RA
CO
RE
VA
LU
ES
support processes
management processes
Natura Differential
va
lue
pro
po
sit
ion
People Management
Finance
main processes
Information Technology
Strategic
Planning
Corporate
Governance
IOs
IOs
Brazil
Commercial
Management
Market
Management
Brazil
Business
Management
Brazil
IOs
Management
Systems
Partnerships
& Alliances
Product
Quality Management
Support
Services
Relationship Sustainability Risks and
Audit
Legal
Requirements
Rela
tion
sh
ip b
etw
een
co
nsu
ltan
t an
d e
nd
co
nsu
mer
Brand Management
Products Made Available
IOs
Brazil Order Cycle
Business
Innovation
Product
Innovation
Commercial
Innovation
End C
onsum
er
Funnel of Ideas and Concepts
14
Telma Sinício-VP, Innovation: Product Innovation, R&D
NA
TU
RA
CO
RE
VA
LU
ES
support processes
management processes
Natura Differential
va
lue
pro
po
sit
ion
People Management
Finance
main processes
Information Technology
Strategic
Planning
Corporate
Governance
IOs
IOs
Brazil
Commercial
Management
Market
Management
Brazil
Business
Management
Brazil
IOs
Management
Systems
Partnerships
& Alliances
Product
Quality Management
Support
Services
Relationship Sustainability Risks and
Audit
Legal
Requirements
Rela
tion
sh
ip b
etw
een
co
nsu
ltan
t an
d e
nd
co
nsu
mer
Brand Management
Products Made Available
IOs
Brazil Order Cycle
Business
Innovation
Product
Innovation
Commercial
Innovation
End C
onsum
er
Funnel of Ideas and Concepts
15
João Paulo Ferreira-VP, Operations and Logistics Logistics Model
NA
TU
RA
CO
RE
VA
LU
ES
support processes
management processes
Natura Differential
va
lue
pro
po
sit
ion
People Management
Finance
main processes
Information Technology
Strategic
Planning
Corporate
Governance
IOs
IOs
Brazil
Commercial
Management
Market
Management
Brazil
Business
Management
Brazil
IOs
Management
Systems
Partnerships
& Alliances
Product
Quality Management
Support
Services
Relationship Sustainability Risks and
Audit
Legal
Requirements
Rela
tion
sh
ip b
etw
een
co
nsu
ltan
t an
d e
nd
co
nsu
mer
Brand Management
Products Made Available
IOs
Brazil Order Cycle
Business
Innovation
Product
Innovation
Commercial
Innovation
End C
onsum
er
Funnel of Ideas and Concepts
16
Marcelo Cardoso-VP Organizational Development and Sustainability, Leadership and Culture
NA
TU
RA
CO
RE
VA
LU
ES
support processes
management processes
Natura Differential
va
lue
pro
po
sit
ion
People Management
Finance
main processes
Information Technology
Strategic
Planning
Corporate
Governance
IOs
IOs
Brazil
Commercial
Management
Market
Management
Brazil
Business
Management
Brazil
IOs
Management
Systems
Partnerships
& Alliances
Product
Quality Management
Support
Services
Relationship Sustainability Risks and
Audit
Legal
Requirements
Rela
tion
sh
ip b
etw
een
co
nsu
ltan
t an
d e
nd
co
nsu
mer
Brand Management
Products Made Available
IOs
Brazil Order Cycle
Business
Innovation
Product
Innovation
Commercial
Innovation
End C
onsum
er
Funnel of Ideas and Concepts
17
Natura Day 2010 N
AT
UR
A C
OR
E V
AL
UE
S
Schedule
18
Time Duration Activity Presenter
8:30 am 30 min Breakfast and Registration IR
9:00 am 40 min New makeup line Natura UNA Liliane
9:40 am 20 min Welcome - Schedule - Results Pedote / Helmut
10:00 am 25 min General Overview and Prospects Alessandro
10:25 am 25 min Brazilian Operations Zé Vicente
10:50 am 20 min Break
11:10 am 25 min International Operations Zé Vicente
11:35 am 25 min Innovation, Research & Development Telma
12:00 pm 50 min Q&A: Alessandro + Zé Vicente + Telma + Pedote
12:50 pm 90 min Lunch with Relationship Managers All participants
2:20 pm 25 min Operations and Logistics João Paulo
2:45 pm 25 min Development of Leadership, Culture and Sustainability Marcelo
3:10 pm 40 min Q&A: Alessandro + João Paulo + Marcelo + Pedote
3:50 pm Closing Alessandro
3:50 pm 60 min Cocktail
4:30 pm 30 min Tour
Consistent Results Since IPO
19
53
55
60
2007 2008 2009
Social and Environmental Results
CO2 Emissions (CO2 emissions / Kg
of product sold)
» Carbon Neutral since 2007
» 10th anniversary - EKOS: Sustainable use of natural ingredients and respect for
cultural heritage.
» Engagement with 26 communities, benefitting 2,084 families
» Crer Para Ver (Seeing is Believing) program – improvement in Brazilian public
education: 7.1% of consultants voluntarily sold products
» Corporate climate study:
» consultants: 90% in 2009
» employees: 74% in 2009
» suppliers: 82% in 2009
CSR Investments (R$ million)
20
Energy Consumption per product sold (kJ/unit)
433
1,170
1,034
850
718
617
521
Consolidated CAGR 19.0% CAGR Brazil 16.6% CAGR IOs 43.4%
Results
Natura Consultants
18%
988
21
9M09 9M10
Results
Consolidated Net Revenue R$ million
CAGR 19.1%
22
35
67
91
121
164
219
2004 2005 2006 2007 2008 2009
Receita Líquida Op. Consolidação
3 10
25
48
74
2005 2006 2007 2008 2009
Receita Líquida Op. Implantação
Results
Net Revenue CAGR 19.3%
23
R$ million
Brazil
CAGR 95.8%
Operations in Implementation
CAGR 26.3%
Operations in Consolidation
Results
EBITDA and EBITDA Margin
CAGR 18.5%
24
R$ million
Results
International Investments
25
CAGR 20.4%
Brazil
Operations in Implementation Operations in Consolidation
R$ million
216
319360
415
500
59872%
80% 78%
89%
96%
87%
2004 2005 2006 2007 2008 2009
Dividendos
Dividendos Pay Out Ratio
Results
26
Dividends and Payout Ratio
CAPEX
R$ million
Results
Strong compared to PEERS..
Desempenho Ações 2010 (Base 100)
Base-date: 6/30/2010 (6M10)
Source: Thomson Reuters
1/1/2010 16/1/2010 31/1/2010 15/2/2010 2/3/2010 17/3/2010 1/4/2010 16/4/2010 1/5/2010 16/5/2010 31/5/2010 15/6/2010 30/6/2010 15/7/2010 30/7/2010 14/8/2010 29/8/2010
NATURA AVON L´oreal ESTEE LAUDER Oriflame
+33%
25,023,3
13,512,6
10,7
NATURA L´oreal ESTEE LAUDER Oriflame AVON
Margem EBITDA (%)
NATURA L´oreal ESTEE LAUDER Oriflame AVON
27
Stock performance 2010 (base 100)
25.0 23.3
13.5 12.6
10.7
Results
Performance NATU3
Natu3 Ibovespa
NATU322/10/2010
R$47,15
NATU325/05/2004
R$5,61
2004 2005 2006 2007 2008 2009
NATU3: +87.2%Ibov: +33.0%
NATU3: +37.9%Ibov: +28.3%
NATU3: +51.1%Ibov: +29.1%
NATU3: -41.4%Ibov: +47.4%
NATU3: +18.0%Ibov: -41.4%
NATU3: +101.6%Ibov: +82.7%
2010
NATU3: 33.1%Ibov: 1.4%
741%
269%
28
NATU3
5/25/2010
R$5.61
NATU3
10/22/2010
R$47.15
Recent Results
29
713
899
09M09 09M10
EBITDA
2.923
3.579
09M09 09M10
Receita Líquida
Recent results... 9M10
80
dez-09 jan-10 mar-10 abr-10 mai-10 jun-10 jul-10 ago-10 set-10
Ibovespa
NATU3
» Channel growth: 18.4%
» CNO fully implemented
» Improved working capital management
» 96% increase in free cash flow
» 39% growth in IOs (local currency)
» More investment: Marketing, Innovation,
Structural projects
» Productivity gains: Logistics, Inputs, Sales force
22.5%
26.0%
25.1% 24.4%
30
R$ million
Net Revenue
EBITDA and EBITDA Margin
Stock performance 2010 (base 100)
2,923
3,579
9M09 9M10
9M09 9M10
9M09 9M10
end.thank you
Alessandro Carlucci CEO
Natura’s strategy
NATURA DAY 2010
natura
HISTORY PRESENCE VALUE PROPOSITION
2
3
70s 80s 90s 00s Today
170
657
4,700
Sales Volume (retail) in US$ million
5
A small lab and
two passions:
cosmetics and
relationships
(1969)
Natura opts for
direct sales
system (1974)
High growth based
on regional
expansion and
product portfolio
Commitment to
social and
environmental
responsibility
Pursuit of
management
excellence
Corporate
governance
initiatives and
publication of GRI
Annual Report
Sustainable
development
Natura Ekos line
(2000)
Natura Plant in
Cajamar (2001)
IPO on Bovespa
(2004)
Increasing
leadership in the
Brazilian market
New growth cycle
in other Latin
American
countries
Evolution of the
management
model
OUR HISTORY
3
4
CF&T Market, 2009 (US$ billion)
Source: Euromonitor
Peru
Chile
Argentina
France
Mexico
Colombia
7.4
3.0
1.4
1.7
2.9
Brazil
28.4
OUR PRESENCE
UNIQUE
Value Proposition
CHANNEL PRODUCTS
CORPORATE
BEHAVIOR
BRAND
“Triple Bottom Line”
Social › Wealth creation for consultants
› R$ 60 mn invested in CSR1 in 2009
› Sharing benefits with supplier
communities
Economic › Strong cash flow generation
› Growth and profitability
› Consistent dividend payment
Environmental › Carbon neutral operations
› Use of refill package
› Sustainable extraction
› Use of recycled and recyclable
materials
1 Corporate Social Responsibility
Transform social and
environmental challenges
into business opportunities
5
STRATEGY
6
Investments and Structural Projects:
CAPEX (IT, production capacity and logistics)
New logistical model (New DCs, HUBs, production abroad)
Natura TODAY
Management Model and
Leadership
Implementation of process
management (BUs e RUs) –
strategic categories and regions
Organizational culture
strengthening
Leadership development
Foreign trade composition
International operations
Preparation for a new growth cycle with profitability
(scale, regional adaptations/corporate and channel)
Value proposition acceptance
Focus on management and adjustments in strategic
categories (personal care, makeup and facial care)
Brazil
Brand strengthening
More efficient investments in the marketing
matrix
7
FUTURE prospects
Management Model and
Leadership
Reduce environmental impacts and
improve the social inclusiveness of
our business (TBL management)
Improve the quality of our
relationships with stakeholders
(consultants, end consumers, super
consultants, suppliers and supplier
communities)
Achieve excellence in service to
consultants and end consumers
Institutionalize Natura’s
management system
Promote the development of
engaged and inspiring leaders
Strengthen our culture
International Operations
To be a leading CF&T brand direct sales, with profitability and
recognition for its leadership in sustainability
Increase investments in advertising (More Pull than Push)
To innovate in the commercial model, stimulating sustainable
entrepreneurialism, improving the purchasing experience of
consultants and end consumers and accelerating channel growth
Brazil
More innovative, segmented and efficient marketing to
build the Natura brand
Develop products with adequate pricing for our
customers
Investments and Structural Projects
To expand the participation of innovative concepts and products (Balanced Flow)
Make progress in new product availability, the order cycle and IT management with an
infrastructure to sustain this growth
To be reference in the application of social networks and digital connectivity 8
end.thank you
José Vicente Marino
Business Vice President
Brazilian Operations
Natura Day 2010
Agenda
• CF&T Market Overview
• Business Proposition
• BUs and RUs • Categories and sub-brands • Marketing Matrix
CF&T Market Overview
4
Countries 2009 CAGR % „04- „09
United States 59 1.6%
Japan 40 0.7%
Brazil 28 14.1%
Mexico 7 7.4%
Argentina, Chile, Colombia and Peru
9 10.8%
Countries with Natura operations 44 12.2%
World 351 5.1%
CF&T market size (US$ billion)
Source: Euromonitor 2009
Brazil is the third largest
CF&T market in the world
Direct sales in CF&T market
Region Direct Sales (%)
Latin America 27.3%
Brazil 24.4%
Argentina 23.8%
Chile 19.5%
Colombia 38.5%
Mexico 31.6%
Peru 28.0%
Asia Pacific 11.7%
North America 8.5%
Western Europe 3.2%
Australasia 9.2%
Africa / Middle East 2.3%
Source: Euromonitor 2009
Large market Exceptional growth Direct sales
Growing above GDP...
GDP growth
Real core market growth
2002 2.7% 2.5%
2003 1.1% 7.0%
2004 5.7% 12.2%
2005 3.2% 9.6%
2006 3.8% 10.1%
2007 5.4% 8.3%
2008 5.1% 10.8%
2009 -0.2% 10.4%
CAGR ‘02- ‘09 3.4% 8.9%
2010E 6.9%
Real core market growth vs. GDP in Brazil
Source: IBGE, Central Bank and Abihpec
Demand Vectors
› Increasing purchasing power
of low and lower-middle income earners
› Greater participation of
women in the labor market
› Cultural emphasis on
personal care and beauty
5
11,1%
15,1%
42,4%
53,0%
16,4%
13,7%
30,2%
18,2%
2003 2004 2005 2006 2007 2008 2009
Brazil- Social Income Classes
Class AB Class C Class D Class EUpper/
Upper
Middle
Middle Lower
Middle
Low
income
53.0%
18.2%
13.7%
15.1%
10,5
13,212,6
9,9
7,9
9,5
2,9
6,7
6,3 6,37,3
6,1
2003 2004 2005 2006 2007 2008 2009
Natura Unilever Avon
Procter & Gamble O Boticario Colgate
Natura achieved market leadership in 2005 and has maintained it ever since…
Market Share, Total CF&T (Euromonitor)
(Percentage)
Source: Euromonitor 2009
But there are still many opportunities for growth…
9.5%
6.3%
9.9%
6.1% 6.3%
6.7%
13.2%
7.9%
12.6%
7.3%
2.9%
10.5%
Categories
Core market breakdown by category
Source: Sipatesp
Market penetration of categories
99,6
%
90,8
%
89,1
%
89,7
%
64,0
%
21,5
% 13,3
%
56,6
%
18,0
%
37,8
%
100,0
%
sabonete
sham
poo
pos s
ham
poo
desodora
nte
s
corp
o
rosto
óle
os
perf
um
es
pro
t sola
r
maquia
gem
tota
l
MercadoMarket
so
ap
sh
am
po
o
sty
lin
g
de
od
ora
nt s
bo
dy
fac
ial c
are
oil
s
fra
gra
nc
e
aft
er-
su
n
ma
ke
up
tota
l
99
.6%
90
.8%
89
.1%
89
.7%
64
.0%
13
.3%
21
.5%
56
.6%
18
.0%
37
.8%
10
0.0
%
Soap 15.5% Beard
0.9%
Fragrances 19.7%
Oils 1.6%
Facial Care 6.3% Sunscreen
4.7% Body 6.8%
Deodorant 12.8%
Makeup 8.1%
Hair 23.6%
Brand strength
10
Strong brand, well accepted by consumers
Source: Ipsos Brand Essence
Brand Preference (%)
Preferred Brand
Top 3 preferred
Intention purchase again
Purchased in last 6 months
Considers purchasing
Est. brand recognition
Natura 2009
83
92
94
88
71
100%
92%
76%
72%
63%
46%
2008 2009
47 46
16 16
Natura
2nd place
Business Proposition
Business Proposition
Our choices: evolution of the segmented market model with the
maintenance of categories and regionalization strategies, focusing
investments in the marketing matrix (advertising, samples, Natura catalog
and training) and Research & Development.
Efforts in productivity gains for reinvestment in the marketing matrix.
Less Carbon, More Productivity Movement
Structured organization-wide efforts to reduce carbon emissions and
generate cost savings in several processes.
Planned advertising to build brand attributes and in line with key
movements.
Structuring aiming at the Development & Innovation of Brands now and for
the future.
We have a major opportunity to leverage all the potential of the categories and sub-brands: Clear priorities Alignment among BUs and RUs Sustain high growth rates
Categories and sub-brands
Accelerated
Maintenance Moderate
Nucleus
Local Satellite
Continuous evolution in Advertising, Natura Catalog, Samples and Training accounts, primarily driven by Productivity gains and reduced COGS.
Marketing Matrix
Advertisement
Samples Natura Catalog
Training
BUs and RUs
BU Leader
Categories and Strategies
Key brands
Main BU goals
Inspiration
Oils Soaps
Ekos Amor América Sève
Gilberto Baptista
Face Makeup Sunscreen
Chronos UNA Aquarela Faces/Faces ZIP Fotoequilíbrio
Mônica Gregori
Body, Hair, Beard and Deodorants
Tododia Erva Doce Natura Homem Plant
Guto Pedreira
- Competition with retail products (price repositioning) - Daily use products
-Technological innovation (protection, sensations) - “Beauty” products
Give new meaning to routines
Reveal beauty Appreciate diversity
- Use of natural ingredients - Innovation in sensations and textures - Sustainable and recyclable packaging
Fragrance Children‟s Vertical Strategies
Amó Humor Kaiak Natura Águas Naturé Mamãe e Bebê CPV
Denise Figueiredo
-Fragrance and sample innovation - Regionalized fragrances
Strengthen relationships
BU B BU D BU C BU A
Regional Units
SPC
With the operations in progress, regionalization initiatives are already functional...
» Regionalized product launches
» Targeted catalogs for different regions
» Promotions adapted to regional opportunities
09-2010 Cycle Central Brazil
Cover Inside cover - sales Back cover
09-2010 Cycle São Paulo, São Paulo State, South
Cover Inside cover Back cover
09-2010 Cycle North/Northeast
Cover Inside cover Back cover
11-2010 Cycle Central Brazil
Cover Inside cover - sales Back cover
11-2010 Cycle São Paulo, São Paulo State, South
Cover Inside cover Back cover
11-2010 Cycle North/Northeast
Cover Inside cover Back cover
... And we will implement new initiatives in the coming years.
» Regionalized product portfolio
» Intersecting regional and category strategies targeted to
meet regional opportunities
» Increased understanding of local consumption habits
» Transformation of social challenges to establish an
inclusive, sustainable business model that can be
replicated in all regions
end.thank you
Natura Day 2010
International Operations
José Vicente Business Vice President
AGENDA
» Market & Competition
» International Operating Proposition
» International Strategy
2
WHERE WE ARE...
Argentina Employees: 329 (174 SF)
NCs: 54 thousand
Chile
Employees: 294 (132 SF)
NCs: 30 thousand
Peru
Employees: 281 (174 SF)
NCs: 46 thousand
Mexico
Employees: 341 (250 SF)
NCs: 36 thousand
Colombia
Employees: 172 (110 SF )
NCs: 18 thousand
Available Consultants (C12): 186 thousand
Employees: 1,465 (860 SF)
International France
Employees: 48 (20 SF)
NCs: 2 thousand
7.4
3.0
1.4
1.7
2.9
Total CF&T Market Source: Euromonitor SF - Sales Force CNs – Natura Consultant
3
Core market size
2009 (US$ million) 5,456 2,271 2,254 1,263 998
Direct sales 2009
(US$ million)
CFT growth 01-09
(%) CAGR 7% 9% 21% 8% 8%
% Direct sales 2009 32% 38% 24% 19% 28%
• P&G •P&G • Unilever • Unilever • P&G
• Unilever •Unilever •P&G •L´Oréal • Unilever
•Colgate-Palm. •Colgate-Palm. •L´Oréal •P&G •Colgate-Palm.
•Avon • Avon •Avon •Avon • Belcorp
•Jafra • Belcorp •Natura •Belcorp • Unique
•Fuller •Yanbal •Tsu •Natura •Avon
• Fragrance • Fragrance • Hair • Hair • Hair
• Hair • Hair • Deodorants • Deodorants • Fragrances
• Facial care • Body • Fragrances • Fragrances • Makeup
• Fragrances • • Fragrances • •
• Makeup • • Body • •
• Facial care • Body • Makeup • Face • Face
Main competitors
Retail
874 1.724 536 246 279
Top 3 Categories
Total market
Top 3 Categories Direct sales
Direct sales
MARKET & COMPETITION LatAm CFT market presents country-specific challenges
Mercado Alvo Fonte: Euromonitor 4
Main competitors
Fragrances
Makeup
Fragrances
Makeup
Fragrances
Makeup
INTERNATIONAL OPERATING PROPOSITION
To be among the leading brands in direct CF&T sales
in all Latin America countries where we operate in and to be recognized
for its leadership in sustainability and with
profitability.
5
INTERNATIONAL STRATEGY
› Well accepted value proposition
› Financial break even in Argentina, Chile and Peru
› Relevant base of 159 thousand
consultants in 2009 (versus 20 thousand in 2004)
› “Regionalization” of marketing mix - Products - Channel - Communications
› Recognition the corporate
behavior
› Operating efficiency gains
Current Future Strategy
New growth cycle
“Export”
Model
“Regionalization”
Model
6
BASED ON VALUE PROPOSITION
CHANNEL PRODUCTS
CORPORATE
BEHAVIOR
ESSENCE
“Triple Bottom Line”
7
BRAND
» Well-accepted brand, although still little-known
» Marketing matrix: + push - pull
» Increased investments in advertising and samples
8
PRODUCTS
» Focus resources in regionally strategic categories (Personal care, Makeup and Facial care) and core brands (Ekos, Tododia, Chronos and UNA)
» Develop technologies and products that incorporate local biodiversity
» More efficient portfolio management: › Quantity of SKUS › Product Regionalization › Price Positioning › Promotions › Local Production
9
CHANNEL
» NEW COMMERCIAL MODEL
» To promote accelerated growth
» More levels
» To stimulate economic, social and environmental entrepreneurship
IMPLEMENTATION TIMELINE
Mexico
1H11
Colombia
2H11
Argentina, Chile and Peru
2012
10
INTERNATIONAL TEAM
» Development of local leadership
» More robust succession plan, considering mobility restrictions
» Corporate team focused on international operations
» Creation of business units
»Process management
RUs
PROCESSES STRATEGIC
CHALLENGES PEOPLE
BUs
11
effective management of impacts related to water, carbon and waste
significant changes in relationship quality through education and global dialogue
consistent communications and promotion of joint initiatives
CORPORATE BEHAVIOR
12
Create an identity that distinguishes our corporate performance based on
Social and environmental
entrepreneurialism of our channel Sustainable use of regional biodiversity
TRIPLE BOTTOM LINE RESULT
Economic Operations in consolidation reached break even point
Investments in operations in implementation
Social Believing is Seeing (“Crer para Ver”) in all countries since 2008
2010: Start of dialogues with stakeholders
Environmental Discussion of priority issues
0%
5%
10%
15%
20%
25%
30%
Ac. 2009
Ac. 2010
Meta 2010
Meta 2011
Meta 2012
Meta 2013
Meta 2014
Meta 2015
Argentina
Chile
Perú
Colombia
Mexico
Francia
Brasil
Refill Sales Believing is Seeing penetration
13
16.0% 15.1% 15.5%
16.0% 17.0%
18.5% 20.0%
Peru
France
Brazil
Real Real Target Target Target Target Target Target
end.thank you
Telma Sinicio
Innovation Vice President
Innovation
Natura Day 2010
Agenda
Innovation
• What is innovation at Natura?
• Natura’s Vision of Innovation
• Organizational Structure
• New Abilities
• Innovation Processes
What is innovation at Natura?
Starting point
What is innovation at Natura?
Starting point
Create Flow
Experience
Natura’s Vision of Innovation
To create an innovative experience flow of well being well
to exceed the expectations of our relationship network
Innovation Drivers
Must generate value for
Natura and its stakeholders, directly or indirectly (triple bottom
line)
Innovation must target
beauty and esthetic realization as a means of demonstrating Natura’s
ethics
Natura must be attentive
to capture society’s changing values
Innovation born from
various sources as well as technology, translated
into deep, philosophic concepts
Innovation must be
inspired on empathy with consumers, creating complete experiences
that respect individuality
Innovation at Natura
must be developed in a network open to all
employees, partners and other institutions
Innovation must be
inspired on Natura’s core values, aiming at new ways to interpret well
being well
Innovation born in a humane environment of
encouragement, overcoming challenges and
reciprocal learning
Vanguard
Value Esthetics
Concept
Consumer
Identity
Network Innovation at Natura must
be seen as a world reference in the art of constantly
exceeding our customers’ expectations
Learning
Aspiration
Organizational Structure
Ideas and Concepts
Science and Technology
Victor Fernandes
Consumer Safety
Elizabete Vicentini
Product Development
Alessandro Mendes
Management and Innovation Networks
Luciana Hashiba
Innovation Vice President
Telma Sinício
Structuring and more long-term
focus Maintain new
product excellence Strategic interface
and portfolio management
Strategic assistance and global training
Ideas and Concepts
_Flow that feeds all innovative processes
_Long term platform for conception of innovative ideas
Science and
Technology Integrity
Senses and Experience Design
Traditional Science Ingredients
Science and Technology
Sustainable Technologies
_Relevance and leadership in knowledge and application of
the traditional and emerging sciences
_ Pioneering partners and global reach
Intensify
Maintain excellence
Expand
Ciência e Tecnologia
Senses and Experience Design
Ciência Clássica
Science and Ingredients Technology
Sustainable Technology
_Development of technological
processes to extract ingredients,
focusing on ethnobotanical resources,
preferably Brazilian, and clean
processes.
_Understanding of controversial
ingredients to develop replacements.
Science and Technology Integrity
Ciência e Tecnologia
Integralidade
Sentidos e Design de
Experiências
Traditional Science
Science and Ingredients Technology
Sustainable Technologies
Science and Technology
_Relevance and leadership in traditional and emerging
sciences, with the capacity to choose the most
appropriate partners with international reach,
interaction models and pioneering partnerships
_Transformation social and environmental
challenges into business and product
opportunities, including the sustainable use of
natural resources, biodiversity, ecodesign and
environmental indicators.
_Development of packages, formats and
materials to bring new benefits to customers
with minimum environmental impact.
Integrity
Senses and Experience Design
Classical Science
Science and Ingredient Technology
Tecnologias Sustentáveis
__Relevance and leadership in traditional and
emerging sciences, with the capacity to choose the
most appropriate partners with international reach,
interaction models and pioneering partnerships
_Development of new ingredients from Brazilian ethnobotany to
create products with new and different benefits for skin, the
scalp and hair
_Development of the basic scientific, biological and physical-
chemical processes related to skin, scalp and hair, in line with
consumers’ cosmetic needs
_Non-invasive methods for treating human skin, scalp and hair
conditions
Science and Technology
Science and Technology
Integrity
Senses and Experience Design
Traditional Science
Science and Ingredient Technology
Sustainable Technology
_Relevance and leadership in knowledge and
application of traditional and emerging sciences
_Pioneering partnerships with international reach
Cosmetic experience and interaction
design that transform perception and
encounters while increasing our self-
worth (body, mind, identity and
awareness) and our appreciation of
others and the world.
Science and Technology
Science and Technology
Science and Technology
Integrity
Senses and Experience Design
Traditional Science
Science and Ingredient Technology
Sustainable Technology
_Relevance and leadership in knowledge and
application of traditional and emerging sciences
_Pioneering partnerships with international reach
_Holistic understanding of well being and its
correlation to the physical, emotional,
cultural and social aspects.
Product Development
_Formula and packaging
_Raw materials
_Open Innovation for formulation and packaging
_Environmental impact
_Indicators management
Consumer Safety
_Ingredient safety
_Safety and effectiveness of products
_Integration and intelligence of product information and ingredients
_New testing methods
_Post-sales consumer safety
_Excellence in international legal and regulatory aspects
Management and Innovation
Network
_Innovation Networks expansion: ICTs and Companies
_Innovation Incentive Management
_Integrated Innovation Management – processes, strategies,
projects, portfolio, pipeline and knowledge
_Intellectual Property Management
_Innovation Communication
Innovative Processes
_Evolution of the ideas and concepts pipeline
_Optimization of the alignment between the technology pipeline and
business strategy
_Short-, medium-, and long-term idea, concept and product
development pipeline
_Portfolio management using world-class tools
end.thank you
João Paulo Ferreira VP Operatio e Logística
Strategy O&L
NATURA DAY 2010
João Paulo Ferreira VP, Operations & Logistics
our
LOGISTIC NETWORK
2
Order Cycle 21 days
Distribution 1.170 million points of sale
Customer Service CAN, SNAC, Credit and Collection
Separation Order picking 400 thousand units year
Production Plants
DIRECT SALES
Suppliers › Botanic assets extracted sustainably
›66% of the portfolio is renewed in less than 2 years
›Promotions: around 50% of the sales volume
›Leverage of the promotional mix:
›8 to 15 times
3
our
SUPPLY CHAIN
4
36 native species + 38 exotic
Nearly 800 products
Around 50 million customers
8 Countries
56 raw materials
34 suppliers 2,084 families
Espaço Natura + Benevides Industrial Unit + Suppliers
NATURA VALUE CHAIN
5
1. Extraction and transportation of raw materials and packaging (direct and indirect suppliers) 23,606 tons of CO2e (suppliers) 105,570 tons of CO2e (extraction and transportation)
43%
2. Industrial process and internal processes 14,767 tons of CO2 and 23,606 tons of CO2e (outsourced)
16%
4. Use of products and packaging waste
57,873 tons of CO2e
24%
3. Product sales (transportation and distribution) 43,980 tons of CO2e
18%
6
NATURA VALUE CHAIN
Brazil is the second largest CF&T market in the world.
Natura’s Goal: to reduce relative GHG
emissions by 33%
in 5 years (2007-2011)
GROWTH CHALLENGE
2007 2008 2009
- 16.1%
Relative Emissions (kg of CO2 e/kg per billed unit)
3.95
3.82 3.63
7
new
LOGISTICAL MODEL
8
Argentina
Brazil
Chile
Peru
Mexico
Colombia
France
DC
Production
› Plants: 4
› Hubs: 1
› Distribution Centers: 11
› Delivery Points: 1 million
› Billed units: 384 million
› Total km traveled per year: 1.6 million
› Total orders/year: 12.8 million
› SKUS: 1200
› Employees: 6260
› Raw material and packaging suppliers: 200
› Outsourced (co-producers): 20
*Data as of 2009 – source: Natura Annual Report
our CURRENT NETWORK
9
Production
International Production
Hubs
› Fábricas: 4
› Hubs: 6
› Centros de Distribuição: 14
› Terceiristas (co-makers): 24
our NETWORK IN 2011
Argentina
Brazil
Chile
Peru
Mexico
Colombia
França
› Product Availability
› Orders 48-hour
› Orders 24-hour
› Consultant Cycle (days)
› Consumer Cycle (days)
› Cost per Order (R$/order)
› Non-Conformities
› OEE
› PPM
› Supply Productivity
› Gross Margin
› Planning Cycle
› Supplier Satisfaction
› NC/EC Satisfaction
› Operational Climate
› Inventories (%NR)
› Suppliers Terms (%NR)
› Accidents w/ absence
› Innovation OTIF
› Communities
10
Argentina
Brazil
Chile
Peru
Mexico
Colombia
França
› New service policy
› Revision of the global distribution network
› Order Tracking
› New customer/consultant service system
› Reconfiguration of production in Brazil
› International production
› Global Sourcing
› Operating and strategic integration with suppliers
› Risk Management
› Initial Control - agility and precision in innovation
› Elimination of losses and quality management (TPM/
6σ)
› Safety- management by behaviors
› Integrated and global network planning (DRP, MPS,
MRP)
› S&OP
11
Production
International Production
Hubs
our NETWORK IN 2011
› Expansion of Espaço Natura, Cajamar
› 4 new DCs in Brazil: Castanhal (PA),
Uberlândia (MG), Curitiba (PR) and São Paulo,
in addition to the expansion of DC in Canoas (RS)
› 2 new Hubs in Brazil (Belém and Salvador) and
3 abroad (Colombia, Chile and Mexico)
› Outsourced international production:
› Just (Argentina), fragrance lines, body, facial
care and sunscreen
› Hada (Colombia), bar soap
› Prebel (Colombia), makeup, and also body,
sunscreen and fragrances
› Fortalab (Mexico), hair and fragrances
› Expansion of DCs in Argentina, Chile, Peru,
Colombia and Mexico
our NETWORK IN 2011
12
VISION FOR THE FUTURE
13
Strategic TBL Sourcing– appreciation of social and
environmental externalities
› Collective Conception (academia, consulting firms and partner
network)
› Ambition: leverage of social and environmental
transformation
› Global vision of opportunities for value generation and
development
› Sustainable development program with supplier
communities
› Program for certification of botanical active ingredients
› Program of botanization and organic alcohol
(use of materials from plant-based renewable sources:
79.2%)
› Incorporation of green plastic (biopolymers)
› Community development to supply ethnobotanic raw
materials in international operations
SUPPLY global and sustainable chain
Non social development
Fermentation w/ antibiotics
Traditional Monoculture
Petrochemical Fertilizer
Use of pesticides
Fauna damage
Polination damage
Sugar cane burning
Biodiversity and the Amazon
Greenhouse Gases
Product Impact
Relationship quality
Education
Water
5
6
1
1
1
1
1
1
6
6
2
2
2
Acquisition
Cost
A
Acquisition
Cost
B
Externalities
Positive Impact
GHG
transportation
and emission
$
$
$
$
Materiality Matrix
14
› Construction of an international network of
production partners aligned with the Triple Bottom
Line
› Eco-efficiency in internal processes
› New technologies for effluent treatment and
energy generation
PRODUCTION global and sustainable network
15
› Redesign of the global distribution network with CO2
optimization (25%) and improved service
› New order picking technologies to increase
productivity, reduce errors and promote social inclusion
› Secondary packaging optimization program
› Reverse Logistics: recycling program
› Order tracking through the end consumer
16
DISTRIBUTION
optimizing costs and
reducing GHG emissions
› Green S&OP
› Integration and colaboration through tier
2
› Global visibility in real time
› New IT tools, ex. GHG optimizer
› Integrated international work and
decision making processes
PLANNING global footprint
17
› Integration with suppliers: innovation, strategic and long-term relationships, social and environmental chains
› Entrepreneurialism together with the chain
› New distribution network: 25% decrease in CO2 emissions per order at the distribution
› Positive social impact considering social development indexes
› Increased response capacity: flexibility and reliability for the end consumer
› Improved service: broader availability and faster delivery
› Optimized working capital: integrated global planning
› Global presence: international production footprint, intensive use of partners, global supply management
› New TBL processes within Supply Chain Management
EXPECTED RESULTS
18
› Social and environmental guidelines as part of
the decision making processes and of Supply Chain modeling
› Value creation for the business as from a sustainable supply network
› Sustainability as a strength to redefine service and collaboration standards
› Dichotomy between global presence and relationship with local communities – cultural diversity
› Training and development of employees with TBL abilities
SUPPLY NETWORK global and sustainable
19
end.thank you
Marcelo Cardoso
Vice President, Organizational Development and Sustainability
Leadership, Culture and Management
NATURA DAY 2010
NMS - Natura Management System
• To build the foundations for the future while always reinforcing Natura’s Core Values
• Development of inspiring and engaged leaders
• Development of proactive and inspiring individuals
Leadership Culture
NMS (Natura Management System)
• Management structuring to support and evolve the process Management Model, supporting BU’s and RU’s
Management
TRIBLE BOTTOM LINE (TBL) RESULTS
2
NMS - Natura Management System
Building a System that expresses our Core Values
“Establish and institutionalize the Natura Management System, aligning strategy, process management, people development and culture building,
making it replicable in other business lines and operations.”
- Natura Management System
3
Leadership Development Strategic Priority
Inspiring and engaged leadership development
“Leaders engaged with Natura’s purpose, who share its
values and are exemplars of Natura’s desired behavior,
inspiring, mobilizing and improving our relationship network to seek individual and collective highlighted results and to act as real agents for social change.”
- Leadership is one of Natura’s strategic priorities
4
Inspiring leadership
• Agent of change in all aspects of his or her life
• Mobilizes people in favor of the common good
• Shares Natura’s beliefs and values
• Consonance between talk and action
• Builds quality relationships
• Innovation capacity
• Global perspective
• Constantly seeks high performance
Engaged Leadership
• Committed to Natura’s purpose based on personal projects
• Takes responsibility for decision-making
• Constantly seeks new challenges
• Trains his or her successors
• Delivers better triple bottom line results
• Seeks personal and professional growth
Well being Being well
Natura’s Leadership Development Program:
Leadership office (“Foco”) creation
Carry out the chain of succession for critical positions
Increase the number of leaders developed in-house
Inspiring and engaged leadership development
5
Leadership Development Strategic Priority
Paths ("Caminhos") Project Non-management Employee Development
“To be a organization that stimulates proactivity in a open, multicultural and constantly learning environment.”
Natura’s hopes to have proactive, inspiring employees.
Paths Projects highlights:
Engagement
Self-awareness as a foundation for Education and Development
Attraction Model linked to values and purposes
“My Choices” Program to capitalize on internal talent
New recognition and rewards model
Training plan for operational and administrative employees
Professional Growth Tracks
Integral, inclusive and accelerated growth education
Performance Management 6
To continue developing Natura’s Culture, aiming at building the foundations our future
vision, maintaining and reinforcing the company’s core values.
Our culture will be created through the alignment of behavior, symbols/rituals and the organization’s management systems to the desired culture.
Organizational Culture Culture Project
Core Values
Conducts Symbols/Rituals Systems
7
Management – Process, BU and RU Model
BU
s
RU
s
Areas
Develo
pm
ent
HR
Fin
ances
Units
Processes (policy suppliers and guardians)
8
9
Management – Process, BU and RU Model
end.thank you