NTCO Natura and Co Holding SA

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 15, 2022.

Item 1

Earnings release of Natura &Co Holding S.A. for the six-month period ended June 30, 2022.

São Paulo, August 11, 2022

Q2-22: Sales in constant currency stabilized, still affected by macro
environment; profitability impacted by cost pressure

Latam resumes growth, driven by strong performance of Natura; further solid growth at Aesop
Avon International’s performance impacted by Russia, improving trends elsewhere
The Body Shop shows strong decline due to challenging macro and weak retail environment

Fabio Barbosa, Group CEO of Natura &Co, declared:

“Natura &Co’s second quarter results reflect the difficult environment in which we are operating, marked by high inflation that is pressuring consumer spending, supply chain disruption and continuing macro-economic and geopolitical uncertainty. But they also reflect structural issues within our group that we have clearly identified and have started to address.

In my first few weeks as Group CEO, I have focused mainly on two priorities: The first is redesigning Natura &Co’s organizational structure to make it lighter and leaner. At this stage, we have mapped significant savings at the holding company level. If the Company had implemented those changes last year the impact would have been an annualized reduction of at least 40% in recurring corporate expenses. Other changes and estimated savings will be announced later. The second is a review of the governance model and ways of working within Natura &Co, with the holding company strongly concentrated on defining key performance indicators, monitoring and tracking the performance of more autonomous brands, leading the allocation of resources within the group and continuing to promote our 2030 Commitment to Life Sustainability Vision. We are confident that a leaner and a more agile structure, built on a strong foundation of accountability for results, will empower the Business Units to respond with agility to their current strategic and market challenges. At the same time, we are strongly focused on improving the fundamentals of our underperforming businesses, which we regard as our principal challenge and main upside driver.

Though we expect our businesses’ revenues to trend better in the second half of the year, we believe the challenges in the macro environment will persist and our margins will remain pressured in the short term. In this context, our clear and immediate priority is to focus on margins and operational cash-flow, and the teams at all our brands and businesses are mobilized and incentivized on those clear goals.”

· Avon International

· The Body Shop

¹ OECD’s Consumer Confidence Index in June 2022 is 96.5, compared to 100.4 in June 2021. Source: https://data.oecd.org/leadind/consumer-confidence-index-cci.htm

² “Prices soar in 2022, eroding purchasing power”. Source: https://economic-research_bnpparibas.com/html/en-US/European-household-account-turbulent-story-6/28/202246510

Digital Sales

Digitally-enabled sales, which include online sales (e-commerce + social selling) and relationship selling using our main digital apps reached 49.5% of total revenue, compared to 50.1% in Q2-21, with continued growth at Natura and Avon.

Relationship selling using apps: At Avon International, penetration of the Avon On app (active representatives who logged in at least once in last three campaigns) reached 23% in Q2-22, compared to nearly 16% in Q2-21. At Natura in Latam, the average number of consultants sharing content increased to 28% this quarter, compared to 24% in Q2-21, while orders through the 1.5 million+ consultant online stores increased by 29% in the region.

&Co Pay at Natura posted strong growth both in number of accounts, reaching approximately 460,000, and Total Payment Volume (“TPV”), which reached R$5.3 billion in the quarter (R$7.5 billion in H1). All direct selling and e-commerce payments at Natura Brazil are already captured and processed by &Co Pay, and a pilot is currently underway in Brazil as part of the preparations to roll it out to retail operations and Avon representatives in H2. Natura consultants who use the platform generally record higher activity level and lower payment default.

Innovation

Update on the war in Ukraine

Our primary concern as a global Group with operations in Ukraine continues to be the protection and safety of our employees and representatives facing violence and loss.

The Body Shop and Aesop have suspended trading in Russia. Avon has suspended exports from Russia and is maintaining local operations in support of Representatives who operate as independent entrepreneurs; we believe restricting their access to products would have an outsized impact on women and children there.

Global sanctions on certain industry sectors and parties in Russia, as well as any potential responses that may be provided by the governments of Russia or other jurisdictions, may adversely affect our business.

As of June 30, 2022 consolidated financial statements, the non-recurring impacts of the suspension of the The Body Shop operations Russia amounted to R$42.1 million in our consolidated EBITDA (R$36.3 million at The Body Shop and R$5.8 million at Avon), disclosed as a non-GAAP adjustment. Management is continuously monitoring developments to assess any potential future impacts that may arise as a result of the ongoing crisis.

1. Results analysis   The Group segmentation is composed of:   ·      Natura &Co Latam, which includes all the brands in Latin America: Natura, Avon, The Body Shop and Aesop ·      Avon international, which includes all markets, excluding Latin America  ·      The Body Shop ex-Latin America, and ·      Aesop ex-Latin America   In addition, the results and analysis for the periods under comparison include the effects of the fair market value assessment as a result of the business combination with Avon as per the Purchase Price Allocation – PPA

^a Consolidated results include Natura &Co Latam, Avon International, The Body Shop and Aesop, as well as the Natura subsidiaries in the U.S., France and the Netherlands.

^b Natura &Co Latam: includes Natura, Avon, TBS Brazil and Hispanic Latam and Aesop Brazil 

^c Includes PPA – Purchase Price Allocation effects

^d Expenses related to the management and integration of the Natura &Co Group 

^e Related to business separation at Avon North America

^a Consolidated results include Natura &Co Latam, Avon International, The Body Shop and Aesop, as well as the Natura subsidiaries in the U.S., France and the Netherlands.

^b Natura &Co Latam: includes Natura, Avon, TBS Brazil and Hispanic Latam and Aesop Brazil

^c Includes PPA – Purchase Price Allocation effects

^d Expenses related to the management and integration of the Natura &Co Group

^e Related to business separation at Avon North America

Consolidated net revenue

Gross margin

Q2-22: excluding PPA effects at Natura &Co Latam and Avon International

H1-22: excluding PPA effects at Natura &Co Latam and Avon International

Consolidated EBITDA

Q2 Adjusted EBITDA was R$694.9 million, with an adjusted margin of 8.0% (-50 bps). Q2 margin reflected several impacts related to a challenging operating environment:

Q2-22: Adjusted EBITDA

H1-22: Adjusted EBITDA

(1) Net non-recurring other (income)/expenses: Net effect of gain from the favorable settlement of a legal dispute at Avon International and costs associated with The Body Shop’s suspension of operations in Russia.

SG&A expenses

i)    Reduction and standardization of campaign cycles

ii)    Optimized resource allocation with key markets serving as hubs, and

iii)    Strategic SKU reduction

The above initiatives are generating a run rate of approximately US$100 million at Avon International, as included in our long-term guidance. These partially offset the impacts of sales deleverage, inflation, higher freight costs, foreign currency headwinds and higher investments to accelerate growth at Natura &Co Latam and Avon International, as well as higher investments in digital, product categories and geographic expansion to accelerate growth at Aesop.

Q2-22: excluding PPA effects at Natura &Co Latam and Avon International

H1-22: excluding PPA effects at Natura &Co Latam and Avon International

Synergies

In Q2-22, synergies reached US$ 69 million, notably across procurement, logistics and administrative functions. In the half-year, total synergies reached US$ 136 million.

Costs to achieve synergies were US$ 27 million in Q2-22, totaling US$ 39 million in the half-year.

Financial income and expenses

The following table details the main changes in our financial income and expenses:

Underlying net income (UNI) and net income

Q2-22 reported net loss was R$766.7 million, compared to a net income of R$234.8 million in Q2-21, due mainly to lower EBITDA and higher net interest expense this quarter. Last year’s net income benefitted from a significant income tax gain resulting from the Avon integration, related to corporate structure optimization.   Q2-22 Underlying Net Income, which is net income after excluding transformation costs, discontinued operations and PPA effects, was a loss of R$261.5 million. This compares to a positive R$482.2 million in Q2-21.

Free cash flow and cash position

In Q2-22, free cash flow was an outflow of R$586.5 million. Management is strongly focused on optimizing cash conversion in the short- and medium-term, and while performance is not satisfactory in the second quarter, free cash flow improved R$735.8 million versus Q2-21, with some early returns on optimization efforts. Free cash flow changes were driven by the effects below:

Indebtedness ratios at both Natura &Co Holding and Natura Cosméticos

   ^a Gross debt excludes PPA impacts of R$320.8 million in Q2-22 and R$394.5 million in Q2-21, and excludes lease agreements

   ^b Foreign currency debt hedging instruments, excluding mark-to-market effects

   ^c Short-Term Investments excludes non current balances

The graph below demonstrates the indebtedness trajectory on a quarterly basis, since Q2-21.

New bond issuance and liability management

In line with the Group’s liability management plan to improve its capital structure, Natura &Co Luxembourg completed a US$ 600 million bond issuance on April 13, with a 6.0% coupon maturing in 2029, guaranteed by Natura &Co Holding S.A. and Natura Cosméticos S.A. The funds were used primarily to refinance Avon’s 2023 bond. Our average debt maturity improved from 5.0 years in Q1 to 6.3 years in Q2.

In July 2022, Natura Cosméticos issued R$826 million in debentures maturing in 2027, partially replacing the 2022/2024 issuances, further extending our average debt maturity to 6.5 years.

1. Performance by segment

a Natura Latam includes Natura Brazil, Hispanic and others

b Considers the Average Available Consultants / Representatives in the quarter

NATURA BRAND IN LATAM

Natura Brand in Brazil

Natura Brand in Hispanic Latam

AVON BRAND IN LATAM

Avon Brand in Brazil

Avon Brand in Hispanic Latam

AVON INTERNATIONAL

 

Avon International	Net Revenue change (%)				Operational KPIs change (%)
	Q2-22 vs. Q2-21		H1-22 vs. H1-21		Q2-22 vs. Q2-21
	Reported (R%)	Constant Currency	Reported (R$)	Constant Currency	Representatives
Avon International	-25.4%	-11.4%	-23.7%	-10.7%	-18.3%

 

·

Sequential improvement in net revenue vs Q1-22 (excluding Russia and Ukraine)

 

·

Improvements in the business model transformation and digitization during the quarter, with single-digit growth in productivity and activity and a reduction in churn ratio

 

·

New commercial model implemented in 2 new markets, now totaling 16, representing 90% of all volumes sold

 

·

Social selling penetration (active representatives who used the app in last three campaigns) increased to 23% in Q2-22 vs. 16% in Q2-21 thanks to the relaunch of Avon On

 

·

Online sales reached 6.6% of revenue, compared to 5.1% in Q2-21

 

·

Product launches in the period include Avon’s first ever bespoke fragrance Eve Privé. It is crafted with a customizable musk technology that takes the effects of the skin chemistry one step further, adapts to it and creates a completely unique scent for the person wearing it to smell like themselves, only better

 

·

Net revenue of the Avon brand combined (Avon International + Latam) was -8.0% at CC in Q2-22 vs Q2-21

 

 

 

THE BODY SHOP

 

The Body Shop	Net Revenue change (%)				Operational KPIs
	Q2-22 vs. Q2-21		H1-22 vs. H1-21		Q2-22	Q1-22	Q2-21	Change vs. Q1-22	Change vs. Q2-21
	Reported (R$)	Constant Currency	Reported (R$)	Constant Currency
The Body Shop (Total)	-25.3%	-11.8%	-24.1%	-13.9%	2,455	2,497	2,571	(42)	(116)
Own Stores					989	1,001	1,013	(12)	(24)
Franchise Stores					1,466	1,496	1,558	(30)	(92)

 

·

Net revenue in the quarter continued to reflect the impact of falling consumer confidence. The 11.8% decline at CC is mainly due to decrease in TBSAH, e-commerce sales and sales to franchisees. Stores sales increased significantly vs. Q2-21, but were not sufficient to offset the decline in other channels.

 

·

Footfall in stores remains below 2019 pre-pandemic levels, particularly in the UK. Discretionary spending challenges and the longer-term change towards hybrid working continues to impact footfall of traditional high streets and shopping centers

 

·

Sales by franchisees are increasing month on month, further reducing their inventories as they progressively recover from lockdowns.

 

·

EBITDA was impacted by channel mix, with improvement in store sales not yet sufficient to offset declines in e-commerce and TBSAH as well as lower sell-in to head franchisees. In addition, this quarter did not benefit from government aid, which supported business operations in Q2-21

 

·      The new Workshop stores are outperforming the rest of the network by approximately 13%, with 201 stores renovated in H1-22 and more to come in H2   ·      Steady progress on ESG: In-store refill stations reached 656 (+100 vs Q1-22 and +531 vs Q2-21), including 101 franchisee stores   ·      Launch of Vitamin C Glow Revealing Serum. This skin care product contains 10% of vitamin C, our highest concentration ever. It became the number 1 bestselling new product development by volume   ·      The Body Shop continued to be recognized through high profile awards across the world. These included winning The Beauty Brand that is Making a Difference, awarded by The Sunday Times in the UK, the Health and Beauty Retailer of the Year awarded by Retail Asia Awards in India and the Fast Company Brands That Matter in the United States

 

•

The Body Shop recorded an impact of R$36.3 million related to exit from Russia, including the closing of 26 franchised stores

 

11

 

AESOP

 

Aesop	Net Revenue change (%)				Operational KPIs
	Q2-22 vs. Q2-21		H1-22 vs. H1-21		Q2-22	Q1-22	Q2-21	Change vs. Q1-22	Change vs. Q2-21
	Reported (R$)	Constant Currency	Reported (R$)	Constant Currency
Aesop (Total)	5.7%	24.5%	7.7%	22.9%	376	369	347	7	29
Signature Stores					275	269	253	6	22
Department Stores					101	100	94	1	7

 

·      Retail channels accounted for 69% of sales in the quarter, with signature store revenue up +42% at CC vs. Q2-21   ·      Online sales accounted for nearly 23% of revenues, down 340 bps vs Q2-21, driven primarily by changes in customer behavior post-Covid-19 restrictions, but remain more than 2x above their Q2-19 level (pre-pandemic)   ·      China entry plans are underway for launch by end-2022, including investments in digital platforms in the quarter   ·      Aesop developed a collaboration with celebrated fashion designer Rick Owens, creating sophisticated travel kits with Owen´s favored formulations and an eco-friendly packaging   ·      Signature stores totaled 275 in Q2, including net +6 doors in the quarter

3. Social and environmental performance

 

(all actions refer to Natura &Co Group, unless stated otherwise)

 

In June 2022, Natura &Co attended Stockholm+50, a meeting convened by the United Nations General Assembly. In Sweden, we shared three short-term calls to action to ensure that the next 50 years of sustainable development are a success:

 

·

Commit to reform of environmentally harmful subsidies by 2030 and of Fossil Fuel Subsidies by 2025

 

·

Secure the universal human right to a healthy, clean, and sustainable environment

 

·

Enhance transparency and accountability by supporting harmonized ESG standards like International Sustainability Standards Board (ISSB), creating a global baseline for corporate sustainability reporting

 

Denise Hills, Natura &Co Latin America´s Sustainability Director was chosen by the United Nations Global Compact (UNGC) as one of the global #SDG Pioneers 2022. The award recognizes professionals and business leaders who are doing outstanding work to promote the Sustainable Development Goals (SDGs) and the 2030 Agenda.

 

Natura &Co ranked 3rd in GlobeScan’s 2022 Global Sustainability Leaders Survey, and 1st in Latin America, where it is considered as the leader in integrating sustainability into business strategy.

 

Natura &Co Latin America, Avon International and The Body Shop released their FY21 annual reports with comprehensive sustainability data in line with global reporting frameworks and our Commitment to Life Sustainability Vision.

 

Updates across the Commitment to Life pillars:

 

To address the Climate Crisis and protect the Amazon

 

·

Amazon: In Q2-2022, Natura expanded the purchase of community inputs by 61% YoY and entered into a new partnership with a Colombian community, expanding operations from Brazil to the wider Pan-Amazon region. PlenaMata (DETER/INPE) reported an increase in deforestation of 0.3M ha in Q2, up 10% vs last year. Through the PlenaMata portal Natura establishes partnerships and engages the public by presenting data and information on Amazon deforestation.

 

·

Biodiversity: It was announced that COP15 will now take place in Montreal, Canada in December 2022. In line with Natura &Co´s goal to work collaboratively with the wider business community and society as a whole Natura &Co plans on attending in order to influence the adoption of a transformative global agreement that delivers for nature, climate and people.

 

To defend Human Rights and be Human-Kind

 

Natura IP&L: Natura launched its Integrated P&L (IP&L). This management tool allows Natura to account for the impact of corporate performance in the environmental, social, and human dimensions, in addition to financial results. According to IP&L, summing up all the positive impacts in the human, social and natural fields, and subtracting the negative impacts, for each US$ 1 in revenue. the brand generated a net return of US$1.5 in benefits for society.

 

·

Investment in key causes:

 

·

As part of Sexual Assault Awareness month in April, Avon International partnered with No More to raise awareness of gender-based violence in conflict zones.

 

·

In May 2022 The Body Shop launched its ambitious global activism campaign, Be Seen Be Heard, in partnership with The United Nations. Over the next three years, The Body Shop will seek to inspire a change in legislation or policy, or support initiatives to promote youth participation in political life in all 75+ countries where The Body Shop operates.

 

·

In June 2022 to support Pride month, Aesop launched its Queer Libraries initiative for the second year. In select stores globally, Aesop removed product from shelves and replaced them with books by queer authors to help amplify voices within the LGBTQIA+ community

 

12

 

·

In response to the Roe vs. Wade Supreme Court decision, The Body Shop North America donated to Planned Parenthood and spoke out on its social channels around the world., This stand was highlighted by prominent media in the US, including the New York Times, Women’s Wear Daily, Hello Beautiful, Pop Sugar and Cosmetics Business, citing it as an example of a beauty brand taking action. Aesop publicly shared support for reproductive rights in the US, making donations to two reproductive rights organizations

 

To embrace Circularity and Regeneration

 

·

In Q2 Natura &Co reached 10.3% of recycled plastic content of all plastic used (accumulative January-June 2022).

 

·

In partnership with The Union for Ethical BioTrade, Natura &Co is co-creating a new regenerative certification standard that will highlight the positive impacts our businesses are generating connected to nature

 

4. Capital Markets and Stock Performance

 

NTCO3 shares traded at R$13.42 at the end of Q2-22 on the B3 stock exchange, -48.5% in the quarter. Average Daily Trading Volume (ADTV) for the quarter was R$241.0 million, -28.9% vs Q2-21. NTCO traded at US$5.21 at the end of Q2-22 on NYSE, - 52.3% in the quarter.

 

On June 30, 2022, the Company’s market capitalization was R$18.6 billion, and the Company’s capital was comprised of 1,383,088,200 common shares.

 

5. Fixed income

 

Below is a table with details of all public debt instruments outstanding per issuer as of June 30, 2022:

 

Issuer	Type	Issuance	Maturity	Principal (million)	Nominal Cost (per year)
Natura Cosméticos S.A.	Bond - 2nd issuance (Sustainability Linked Bond)	03/05/2021	03/05/2028	US$ 1,000.0(1)	4,125%
Natura Cosméticos S.A.	Debenture - 9th issuance	09/21/2018	09/21/2018	BRL 302.7	112% DI Tax
Natura Cosméticos S.A.	Debenture - 10th issuance 1st series	08/28/2019	08/26/2024	BRL 400.0	DI + 1.00 per year
		08/29/2019	08/26/2024	BRL 95.7	DI + 1.15 per year
				BRL 686.2	DI + 1.15 per year
				BRL 394.5	DI + 1.15 per year
Natura &Co International S.à r.l. (Natura Lux)	Bonds	04/19/2022	04/19/2022	US$ 600.0	6,000%
Avon Products, Inc.	Unsecured Bonds	03/12/2013	03/15/2043	US$ 216.1	8.450%(2)

(1)    Principal and interests fully hedged (swapped to BRL). For more information, see the explanatory notes to the Company’s financial statements. 

(2)    Coupon based on current credit ratings, governed by interest rate adjustment clause

 

 

Ratings

 

Below is a table with our current credit ratings:

 

Natura &Co Holding S.A.
Agency	Global Scale	National Scale	Outlook
Standard & Poor’s	BB	AAA	Stable
Fitch Ratings	BB	AA+	Positive
Moody’s	Ba3	-	Stable

 

Natura Cosméticos S.A.
Agency	Global Scale	National Scale	Outlook
Standard & Poor’s	BB	AAA	Stable
Fitch Ratings	BB	AA+	Positive
Moody’s	Ba2	-	Stable

 

Avon International
Agency	Global Scale	National Scale	Outlook
Standard & Poor’s	BB-	-	Stable
Fitch Ratings	BB	-	Positive
Moody’s	Ba3	-	Stable

13

 

6. Appendix

 

FREE CASH FLOW RECONCILIATION

 

The correspondence between Free Cash Flow and Statements of Cash Flow is shown below:

 

Statement of Cash Flows			Free Cash Flow Reconciliation
CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) income for the period			(a)	Net Income (loss)
Adjustments to reconciliate net (loss) income for the period with net cash used in operating activities:
Depreciation and amortization			(b)	Depreciation/amortization
Interest and exchange variation on short-term investments			(c)	Non-cash Adjustments to Net Income
Earnings (loss) from swap and forward derivative contracts			(c)
Provision for tax, civil and labor risks			(c)
Inflation adjustment of judicial deposits			(c)
Inflation adjustment of provision for tax, civil and labor risks			(c)
Income tax and social contribution			(c)
Income from sale and write-off of property, plant and equipment, lease and			(c)
non-current assets held for sale
Interest and exchange rate variation on leases			(c)
Interest and exchange rate variation on borrowings, financing and debentures, net of acquisition costs			(c)
Inflation adjustment and exchange rate variation on other assets and liabilities			(c)
Reversal of provision for losses from property, plant and equipment, intangible and leases			(c)
Provision for stock option plans			(c)
Provision for losses with trade accounts receivables, net of reversals			(c)
Provision for inventory losses, net of reversals			(c)
Reversal of provision for the provision for carbon credits			(c)
Effect from hyperinflationary economy			(c)
Other adjustments to reconcile net loss			(c)
						Free Cash Flow		Cash Flow Reconciliation
	Increase (Decrease) in:
	Trade accounts receivable and related parties		(d2)	Decrease (Increase) in Working Capital
	Inventories		(d1)			Net income (loss)		(a)
	Recoverable taxes		(d4)			Depreciation and amortization		(b)
	Other assets		(d4)			Non-cash Adjustments to Net Income		(c)
	Domestic and foreign trade accounts payable and related parties		(d3)			Adjusted Net income
	Payroll, profit sharing and social charges, net		(d4)			Decrease / (Increase) in Working Capital		(d)
	Tax liabilities		(d4)			Inventories		(d1)
	Other liabilities		(d4)			Accounts receivable		(d2)
	OTHER CASH FLOWS FROM OPERATING ACTIVITIES					Accounts payable		(d3)
	Payment of income tax and social contribution		(e)	Income Tax and Social Contribuion		Other assets and liabilities		(d4)
	Release of judicial deposits		(h)	Other Operating Activities		Income tax and social contribution		(e)
	Payments related to tax, civil and labor lawsuits		(h)			Interest on debt		(f)
	(Payments) proceeds due to settlement of derivative transactions		(h)			Lease payments		(g)
	Payment of interest on lease		(g)	Lease Payments		Other operating activities		(h)
	Payment of interest on borrowings, financing and debentures		(f)	Interest on Debt		Cash from Operations
	NET CASH (USED IN) OPERATING ACTIVITIES					Capex		(j)
						Sale of Assets		(i)
	CASH FLOW FROM INVESTING ACTIVITIES					Exchange rate variation		(k)
	Cash from acquisition of subsidiary		(l)	Other financing/investing activities		Free Cash Flow
	Additions of property, plant and equipment and intangible		(j)	Capex		Other financing and investing activities		(l)
	Proceeds from sale of property, plant and equipment, intangible and non-		(i)	Sale of Assets		Cash Balance Variation
	current assets held for sale
	Acquisition of short-term investments		(l)	Other financing/investing activities
	Redemption of short-term investments		(l)
	Redemption of interest on short-term investments		(l)
	NET CASH GENERATED BY (USED IN) INVESTING ACTIVITIES
	CASH FLOW FROM FINANCING ACTIVITIES
	Repayment of lease - principal		(g)	Lease Payments
	Repayment of borrowings, financing and debentures – principal		(l)	Other financing/investing activities
	New borrowings, financing, and debentures		(l)
	Acquisition of treasury shares, net of receipt of option strike price		(l)
	Receipt of funds due to settlement of derivative transactions		(l)
	Capital Increase		(l)
	NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
	Effect of exchange rate variation on cash and cash equivalents		(k)	Exchange Rate Effect
	DECREASE IN CASH AND CASH EQUIVALENTS
	Opening balance of cash and cash equivalents
	Closing balance of cash and cash equivalents
	DECREASE IN CASH AND CASH EQUIVALENTS

14

 

CONSOLIDATED BALANCE SHEET

 

ASSETS (R$ million)	Jun-22	Dec-21		LIABILITIES AND SHAREHOLDER’S EQUITY (R$ million)	Jun-22	Dec-21
CURRENT ASSETS				CURRENT LIABILITIES
Cash and cash equivalents	3,043.8	4,007.3		Borrowings, financing and debentures	726.0	945.1
Short-term investments	1,231.8	1,978.7		Lease	890.6	1,005.5
Trade accounts receivable	3,251.7	3,476.4		Trade accounts payable and reverse factoring operations	5,716.5	6,770.6
Inventories	5,367.4	5,403.5		Dividends and interest on shareholders’ equity payable	180.8	180.8
Recoverable taxes	953.6	973.3		Payroll, profit sharing and social charges	961.9	1,255.3
Income tax and social contribution	258.3	564.5			619.0	766.4
Derivative financial instruments	87.5	81.2		Income tax and social contribution	235.9	365.5
Other current assets	849.6	912.2		Derivative financial instruments	613.6	458.5
Assets held for sale	45.4	52.9		Provision for tax, civil and labor risks	259.4	230.1
Total current assets	15,089.2	17,449.9		Other current liabilities	1,435.3	1,716.1
				Total current liabilities	11,638.9	13,693.9
NON CURRENT ASSETS
Recoverable taxes	1,334.3	1,349.6		NON CURRENT LIABILITIES
Income tax and social contribution	176.6	84.7		Borrowings, financing and debentures	12,313.5	11,771.8
Deferred income tax and social contribution	3,340.5	2,954.1		Lease	2,451.3	2,542.3
Judicial deposits	588.8	585.3		Payroll, profit sharing and social charges	22.5	53.7
Derivative financial instruments	-	894.0		Tax liabilities	113.6	114.8
Short-term investments	50.5	36.9		Deferred income tax and social contribution	906.9	994.0
Other non-current assets	1,518.8	1,763.1		Derivative financial instruments	23.1	-
Total long term assets	7,009.6	7,667.7		Provision for tax, civil and labor risks	1,660.6	1,768.7
				Other non-current liabilities	951.0	942.5
Property, plant and equipment	5,025.8	5,377.4		Total non-current liabilities	18,442.5	18,187.9
Intangible	24,179.3	26,857.6
Right of use	3,027.0	3,096.0		SHAREHOLDERS’ EQUITY
Total non-current assets	39,241.7	42,998.6		Capital stock	12,484.4	12,481.7
				Treasury shares	(263.4)	(151.3)
				Capital reserves	10,427.6	10,478.8
				Legal profit reserve	865.1	871.2
				Retained (losses) income	(1,409.8)	0.0
				Other comprehensive income	2,127.2	4,865.2
				Equity attributable to owners of the Company	24,231.1	28,545.6
				Non-controlling interest in shareholders’ equity of subsidiaries	18.4	21.2
TOTAL ASSETS	54,330.9	60,448.5		TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	54,330.9	60,448.5

 

CONSOLIDATED INCOME STATEMENT- INCLUDING PURCHASE PRICE ALLOCATION (PPA) AMORTIZATION

 

R$ million	Q2-22	Q2-21	Ch. %	H1-22	H1-21	Ch. %
NET REVENUE	8,702.4	9,517.2	(8.6)	16,955.7	18,972.2	(10.6)
Cost of Products Sold	(3,216.8)	(3,318.3)	(3.1)	(6,162.4)	(6,640.8)	(7.2)
GROSS PROFIT	5,485.6	6,198.9	(11.5)	10,793.3	12,331.5	(12.5)
OPERATING EXPENSES
Selling, Marketing and Logistics Expenses	(3,706.2)	(4,045.4)	(8.4)	(7,391.7)	(8,052.8)	(8.2)
Administrative, R&D, IT and Project Expenses	(1,729.4)	(1,816.3)	(4.8)	(3,262.7)	(3,444.0)	(5.3)
Impairment losses on trade receivables	(150.5)	(210.9)	(28.6)	(314.3)	(450.2)	(30.2)
Other Operating Expenses, Net	(38.4)	(179.3)	(78.6)	(97.1)	(304.7)	(68.1)
LOSS FROM OPERATIONS BEFORE FINANCIAL RESULT	(139.0)	(53.0)	162.3	(272.5)	79.7	(441.9)
Financial Income	1,960.4	1,225.5	60.0	3,314.7	2,264.4	46.4
Financial Expenses	(2,387.1)	(1,431.0)	66.8	(4,128.1)	(2,697.8)	53.0
LOSS BEFORE INCOME TAX AND SOCIAL CONTRIBUTION	(565.8)	(258.5)	118.9	(1,085.9)	(353.7)	207.0
Income Tax and Social Contribution	(135.1)	527.4	(125.6)	(217.6)	437.3	(149.8)
(LOSS) INCOME FROM CONTINUED OPERATIONS	(700.9)	269.0	(360.6)	(1,303.5)	83.7	(1,658.2)
Income (Loss) from discontinued operations	(66.1)	(36.7)	80.0	(105.7)	(8.0)	1,226.6
(LOSS) INCOME FOR THE PERIOD	(767.0)	232.2	(430.3)	(1,409.1)	75.7	(1,961.8)
Attributable to controlling shareholders	(766.7)	234.8	(426.5)	(1,409.8)	79.7	(1,869.5)
Attributable to non-controlling shareholders	(0.2)	(2.6)	(90.5)	0.7	(4.0)	(116.8)

 

 

PURCHASE PRICE ALLOCATION (PPA) AMORTIZATION

 

R$ million	Q2-22	Q2-21	H1-22	H1-21
Net Revenue	-	-	-	-
Cost of Products Sold	(1.7)	(13.7)	(3.7)	(22.9)
Gross Profit	(1.7)	(13.7)	(3.7)	(22.9)
Selling, Marketing and Logistics Expenses	(63.4)	(77.4)	(129.6)	(150.9)
Administrative, R&D, IT and Project Expenses	(66.8)	(87.3)	0	(161.9)
Other Operating Income (Expenses), Net	4.6	5.4	32.6	11.0
Financial Income/(Expenses), net	14.6	9.2	(38.9)	21.2
Income Tax and Social Contribution	(39.7)	117.7	0	162.8
LOSS FROM CONTINUED OPERATIONS	(152.4)	(45.9)	(139.6)	(140.7)
Depreciation impact	(132.6)	(174.9)	(38.9)	(343.3)

15

 

CONSOLIDATED STATEMENT OF CASH FLOW

 

R$ million	H1-22	H1-21
CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) income for the period	(1,409.1)	75.7
Adjustments to reconciliate net (loss) income for the period with net cash used in operating activities:
Depreciation and amortization	1,278.9	1,395.3
Interest and exchange variation on short-term investments	(179.1)	(86.8)
Earnings (loss) from swap and forward derivative contracts	559.0	(273.5)
Provision for tax, civil and labor risks	117.8	47.7
Inflation adjustment of judicial deposits	(17.2)	(5.4)
Inflation adjustment of provision for tax, civil and labor risks	23.5	32.7
Income tax and social contribution	217.6	(437.3)
Income from sale and write-off of property, plant and equipment, lease and non-current assets held for sale	22.9	44.2
Interest and exchange rate variation on leases	95.1	180.7
Interest and exchange rate variation on borrowings, financing and debentures, net of acquisition costs	(39.6)	(144.8)
Inflation adjustment and exchange rate variation on other assets and liabilities	1.3	23.4
Reversal of provision for losses from property, plant and equipment, intangible and leases	0.0	(4.3)
Provision for stock option plans	144.2	131.8
Provision for losses with trade accounts receivables, net of reversals	314.3	450.2
Provision for inventory losses, net of reversals	201.8	217.1
Reversal of provision for the provision for carbon credits	(6.8)	(3.3)
Effect from hyperinflationary economy	179.4	72.6
Other adjustments to reconcile net loss	0.0	(1.3)
Increase (Decrease) in:
Trade accounts receivable and related parties	(101.7)	(180.9)
Inventories	(191.4)	(1,023.4)
Recoverable taxes	(1.3)	(383.6)
Other assets	21.9	(15.7)
Domestic and foreign trade accounts payable and related parties	(641.2)	(260.0)
Payroll, profit sharing and social charges, net	(329.5)	(82.3)
Tax liabilities	(153.1)	(235.4)
Other liabilities	(419.3)	(392.4)
OTHER CASH FLOWS FROM OPERATING ACTIVITIES
Payment of income tax and social contribution	(342.0)	(348.9)
Release of judicial deposits	13.8	6.6
Payments related to tax, civil and labor lawsuits	(112.6)	(32.5)
(Payments) proceeds due to settlement of derivative transactions	(256.7)	227.0
Payment of interest on lease	(77.7)	(105.7)
Payment of interest on borrowings, financing and debentures	(362.7)	(426.9)
NET CASH (USED IN) OPERATING ACTIVITIES	(1,449.5)	(1,539.4)
CASH FLOW FROM INVESTING ACTIVITIES
Additions of property, plant and equipment and intangible	(523.1)	(639.8)
Proceeds from sale of property, plant and equipment, intangible and non-current assets held for sale	3.7	13.4
Acquisition of short-term investments	(4,753.0)	(5,630.4)
Redemption of short-term investments	5,446.7	4,614.4
Redemption of interest on short-term investments	59.9	41.9
NET CASH GENERATED BY (USED IN) INVESTING ACTIVITIES	234.1	(1,600.5)
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of lease - principal	(526.7)	(579.6)
Repayment of borrowings, financing and debentures – principal	(3,638.7)	(5,511.9)
New borrowings, financing, and debentures	4,727.0	6,335.7
Acquisition of treasury shares, net of receipt of option strike price	(120.3)	(21.0)
Receipt of funds due to settlement of derivative transactions	109.2	1,615.8
Capital Increase	2.7	0.0
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	553.2	1,839.1
Effect of exchange rate variation on cash and cash equivalents	(301.3)	(16.0)
DECREASE IN CASH AND CASH EQUIVALENTS	(963.4)	(1,316.9)
Opening balance of cash and cash equivalents	4,007.3	5,821.7
Closing balance of cash and cash equivalents	3,043.8	4,504.8
DECREASE IN CASH AND CASH EQUIVALENTS	(963.4)	(1,316.9)

16

 

 

7. Conference call and webcast

 

 

17

 

8. Glossary

 

Abihpec: Brazilian Association of the Personal Hygiene, Perfumery and Cosmetics Industry

 

ADR: An American Depositary Receipt is a negotiable certificate issued by a U.S. depository bank representing a specified number of shares of a non-U.S. company stock.

 

ADS: The individual issuance of shares in a U.S. stock exchange by a non-U.S. company is referred to as American Depositary Shares (ADS)

 

Adjusted EBITDA: Excludes effects that are not considered usual, recurring or not-comparable between the periods under analysis

 

APAC: Asia and Pacific

 

Avon representatives: Self-employed resellers who do not have a formal labor relationship with Avon

 

B3: Brazilian Stock Exchange

 

Benefit Sharing: In accordance with Natura’s Policy for the Sustainable Use of Biodiversity and Associated Traditional Knowledge, benefits are shared whenever we perceive various forms of value in the access gained. Therefore, one of the practices that defines the way in which these resources are divided is to associate payments with the number of raw materials produced from each plant as well as the commercial success of the products in which these raw materials are used

 

BPS: Basis Points; a basis points is equivalent to one percentage point * 100

 

Brand Power: A methodology used by Natura &Co to measure how its brands are perceived by consumers, based on metrics of significance, differentiation and relevance.

 

BRL: Brazilian Reais

 

CDI: The overnight rate for interbank deposits

 

CEE: Central and Eastern Europe

 

CFT: Cosmetics, Fragrances and Toiletries Market (CFT = Fragrances, Body Care and Oil Moisture, Make-up (without Nails), Face Care, Hair Care (without Colorants), Soaps, Deodorants, Men’s Grooming (without Razors) and Sun Protection

 

COGS: Costs of Goods Sold

 

Constant currency (“CC) or constant exchange rates: when exchange rates used to convert financial figures into a reporting currency are the same for the years under comparison, excluding foreign currency fluctuation effects

 

CO2e: Carbon dioxide equivalent; for any quantity and type of greenhouse gas, CO2e signifies the amount of CO2 which would have the equivalent global warming impact.

 

EBITDA: Earnings Before Interests, Tax, Depreciation and Amortization

 

EMEA: Europe, Middle East and Africa

 

EP&L: Environmental Profit & Loss

 

Foreign currency translation: conversion of figures from a foreign currency into the currency of the reporting entity

 

G&A: General and administrative expenses

 

GHG: Greenhouse gases

 

ICON: Consumer Stock Index of the B3 stock exchange, designed to track changes in the prices of the more actively traded and better representative cyclical and non-cyclical consumer stocks

 

Innovation Index: Share in the last 12 months of the sale of products launched in the last 24 months

 

IBOV: Ibovespa Index is the main performance indicator of the stocks traded in B3 and lists major companies in the Brazilian capital market

 

IFRS – International Financial Reporting Standards

 

Kantar: Data, insights and consulting company with global presence

 

Hispanic Latam: Often used to refer to the countries in Latin America, excluding Brazil

 

LFL: Like-for-Like, applicable to measure comparable growth

 

Natura Consultant: Self-employed resellers who do not have a formal labor relationship with Natura

 

Natura Crer Para Ver Program (CPV): Special line of non-cosmetic products whose profits are transferred to the Natura Institute, in Brazil, and invested by Natura in social initiatives in the other countries where we operate. Our consultants promote these sales to benefit society and do not obtain any gains.

 

Natura Institute: Is a nonprofit organization created in 2010 to strengthen and expand our Private Social Investment initiatives. The institute has enabled us to leverage our efforts and investments in actions that contribute to the quality of public education

 

NYSE: New York Stock Exchange

 

P&L: Profit and loss

 

PP: Percentage point

 

PPA: Purchase Price Allocation - effects of the fair market value assessment as a result of a business combination

 

Profit Sharing: The share of profit allocated to employees under the profit-sharing program

 

SEC: The U.S. Securities and Exchange Commission (SEC) is an independent federal government regulatory agency responsible for protecting investors, maintaining fair and orderly functioning of the securities markets, and facilitating capital formation

 

SG&A: Selling, general and administrative expenses

 

SM&L: Selling, marketing and logistics expenses

 

SLB: Sustainability Linked Bond

 

SPT: Sustainability Performance Targets

 

SSS: Same-Store-Sales

 

Supplier Communities: The communities of people involved in small–scale farming and extraction activities in a variety of locations in Brazil, especially in the Amazon Region, who extract the inputs used in our products from the social and biodiversity. We form production chains with these communities that are based on fair prices, the sharing of benefits gained from access to the genetic heritage and associated traditional knowledge and support for local sustainable development projects. This business model has proven effective in generating social, economic and environmental value for Natura and for the communities.

 

Synergies: Synergy is the concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts.

 

TBS: The Body Shop.

 

TMEA: Turkey, Middle East and Africa

 

UNI: Underlying Net Income.

 

WE: Western Europe

 

18

 

9. Disclaimer

 

EBITDA is not a measure under BR GAAP and does not represent cash flow for the periods presented. EBITDA should not be considered an alternative to net income as an indicator of operating performance or an alternative to cash flow as an indicator of liquidity. EBITDA does not have a standardized meaning and the definition of EBITDA used by Natura may not be comparable with that used by other companies. Although EBITDA does not provide under BR GAAP a measure of cash flow, Management has adopted its use to measure the Company’s operating performance. Natura also believes that certain investors and financial analysts use EBITDA as an indicator of performance of its operations and/or its cash flow.

 

This report contains forward-looking statements. These forward-looking statements are not historical fact, but rather reflect the wishes and expectations of Natura’s management. Words such as “anticipate,” “wish,” “expect,” “foresee,” “intend,” “plan,” “predict,” “project,” “desire” and similar terms identify statements that necessarily involve known and unknown risks. Known risks include uncertainties that are not limited to the impact of price and product competitiveness, the acceptance of products by the market, the transitions of the Company’s products and those of its competitors, regulatory approval, currency fluctuations, supply and production difficulties and changes in product sales, among other risks. This report also contains certain pro forma data, which are prepared by the Company exclusively for informational and reference purposes and as such are unaudited. This report is updated up to the present date and Natura does not undertake to update it in the event of new information and/or future events.

 

Investor Relations Team
ri@natura.net

 

 

19

 

 

 

 

 

Item 2

 

Earnings presentation of Natura &Co Holding S.A. for the six-month period ended June 30, 2022.

 

 

 

 

 

August 12 th , 2022 Secon d - Quarter 2022 Results

The words "anticipates," "wishes,“ "expects," "estimates," "intends," "forecasts," "plans," "predicts," "projects," "targets" and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties. Known risks and uncertainties include, but are not limited to, the impact of competitive products and pricing, market acceptance of products, product transitions by the Company and its competitors, regulatory approval, currency fluctuations, production and supply difficulties, changes in product sales mix, and other risks. This presentation also may include pro - forma and adjusted information prepared by the Company for information and reference purposes only, which has not been audited. Forward - looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them in light of new information or future developments. https://ri.naturaeco.com/en/ This presentation may contain forward - looking statements. Such statements are not statements of historical fact and reflect the beliefs and expectations of Natura &Co’s management . 2

Autonomy & Accountabi l ity Q2 highlights: Q2 results reflect difficult environment and structural issues within Natura &Co Transition Committee work advancing: Designing a corporate structure, balancing autonomy and accountability, and reviewing the governance model A clear immediate priority: Focus on margins and cash flow 3

Consol i dated Financial Performance Guilherme Castellan, CFO 4

NET REVENUE (R$ million) HIGHLIGHTS Natura &Co: Sales in constant currency stabilized, still affected by macro environment • Very strong comparable base as Q2 - 21 was up +31.7% vs Q2 - 20 at CC • Strong double - digit growth at CC by both the Natura brand and Aesop • Avon International improved performance in most regions ( - 5.8% in CC excluding Russia and Ukraine) • The Body Shop still trending lower vs. 2021 as retail’s slow recovery hasn’t offset the deceleration at The Body Shop At Home and e - commerce Ae sop +24.5% at CC +5.7% in BRL The Body Shop - 11.8% at CC - 25.3% in BRL Avon International - 11.4% at CC - 25.4% in BRL Natura &Co Latam +5.6% at CC +0.4% in BRL 9 , 5 17 . 2 Q2 - 21 Q2 - 22 8 , 7 02 . 4 ( - 8.6 %) +0.4% CC 5

Continued growth in digital sales at Natura and Avon 1. &Co Pay • Natura in Brazil: 457,000 accounts • Total Payment Volume (“TPV”) of R$ 7.5 billion (H1) • Pilot underway for retail operations and Avon reps in Brazil Re t a i l Net Revenue Breakdown by Channel (R$ million) Digitally - enabled sales 49.5% of total sales vs. 50.1% in Q2 - 21 Online (e - commerce + social selling) Relationship Selling Retail 3. E - commerce Lower online sales from channel rebalancing; still significantly above pre - pandemic levels across the Group 2. Social Selling Adoption • Natura Latam : Average number of consultants sharing content reached 28% (vs 24% in Q2 - 21) • At Avon International : Avon On penetration reached 23% (vs 16% in Q2 - 21) 6

Adj. EBITDA impacted by inflationary pressure mainly on COGS, partly mitigated by SG&A reduction in Latam and lower corporate expenses Q2 - 22 CONSOLIDATED ADJUSTED EBITDA MARGIN • Inflationary, foreign currency pressure and war in Ukraine • Partially offset by: • synergies • revenue management • cost containment and one - offs including corporate expense savings MAIN IMPACTS 7

Underlying Net Income (UNI) and Net Income impacted by lower EBITDA and higher interest expenses ( 7 67) (262) PPA Effect Transformation Costs Net income Q2 - 22 282 Discontinued operations and other effects 66 158 UNI Q2 - 22 NET INCOME TO UNDERLYING NET INCOME (UNI) RECONCILIATION Q2 - 22 (R$ million) Q2 - 21 UNI of R$482.2 million, boosted by a one - time income tax gain, related to Avon Integration 8

Solid cash position and continued liability management R $ 826 million In Natura debentures issued in July, maturing in 2027 , partially replacing the 2022 / 2024 issues Avon’s 2023 bonds fully redeemed R$ 4.3 billion Cash balance at end - June Q2 - 22 2.46x Group net debt to EBITDA ratio NET DEBT AND NET DEBT - TO - EBITDA RATIO (R$ billion) AMORTIZATION SCHEDULE (R$ billion) Q 2 - 21 6 . 7 1.43x Q 2 - 22 Q 4 - 21 5 . 9 1.83x Q 3 - 21 1.52x 2.13x Q 1 - 22 2.46x 6 . 0 7 . 7 8 . 5 Net - Debt Net - Debt - To - Ebitda Ratio a Does not reflect Natura Debentures of R$826 million issued in July and maturing in 2027. Considering this issuance, average debt maturity would have increased to 6.5 years. b R$ 9.9 billion includes Natura Cosméticos US$1.0 billion in sustainability - linked bond due 2028, Natura &Co Holding’s US$ 600 million bonds due 2029, Avon’s US$ 200 million due 2043 2026 9 Cash and s h or t - term deposits 2022 2023 - 2024 2025 2027 2028 o n w ards 4 . 3 - - - 1.6 a 9.9 b Average Maturity: 6.3 years a a 1.2

Natura &Co Latam Financial Performance 10

NET REVENUE Avon brand in Hispanic Latam - 2.8% at CC - 13.9% in BRL Avon brand in Brazil - 10.7% in BRL Natura brand in Hispanic Latam +15.5% at CC +8.8% in BRL Natura brand in Brazil +14.3% in BRL Natura &Co Latam: Double - digit growth at Natura brand; decrease at Avon brand, but trend continues to improve since Q3 - 21 +5.6% C C 5 , 555 5 , 534 Q2 - 21 Q2 - 22 +0.4% Natura Brand: • Strong momentum in Brazil and further growth in Hispanic Latam 11 • Brazil: Consultant productivity up by +17.5% in Q2 • Hispanic: Growth mainly driven by Argentina and Colombia, offsetting a decrease in Chile • Again ranked strongest cosmetics brand in the world by Brand Finance Avon brand: • Brazil Q2 Sales: Beauty sales +5%, with double - digit growth in rep productivity; Fashion & Home – 31% • Hispanic: New commercial model progress in Ecuador and Colombia, with sales growth and a sequential improvement in the number of representatives, activity and productivity • Number of reps: - 6.9%

Stable Q2 adjusted EBITDA margin in Latam ADJUSTED EBITDA 1 AND ADJUSTED EBITDA MARGIN (R$ million) Ma rg in • Margin supported by synergies, revenue management and strict financial discipline • Offsetting the impact of sales deleverage at Avon, raw material inflation and FX headwinds 1 Excluding effects that are not considered recurring nor comparable between the periods under analysis, such as: Transformation costs and cost - to - achieve synergies 598 602 Q 2 - 21 Q 2 - 22 12 Natura Brand Margin remains strong despite cost pressures Avon Brand Impacted by the transformation plan, higher inflation and logistics expenses

Avon International Financial Performance 13

Ma rg in 94 54 Q 2 - 21 Q 2 - 22 2,204 1 , 64 4 - 25. 4 % - 11.4% CC (Ex - Russia and Ukraine - 5.8%) Sequential improvement in net revenue, excluding Russia and Ukraine NET REVENUE (R$ million) Q2 - 21 Q2 - 22 ADJUSTED EBITDA¹ AND ADJUSTED EBITDA MARGIN (R$ million, %) 1 Excluding effects that are not considered recurring nor comparable between the periods under analysis, such as: Transformation costs and costs - to - achieve synergies, gain from the settlement of a legal dispute and provisions reversals i nt e rnat i o nal Revenue impacted by : • War in Ukraine • Lower consumer purchasing power in Europe 1 • Partially mitigated by aggressive revenue management plan across all markets Business fundamentals continued to improve as the new commercial model resulted in higher productivity and activity as well as a stabilizing number of representatives outside Europe Adjusted EBITDA margin reflects: • War in Ukraine • Lower volumes • Higher cost and inflationary pressures • Partially offset by strict financial discipline and a leaner operating model 14 1 ” OECD’s Consumer Confidence Index in June 2022 is 96.5, compared to 100.4 in June 2021. Source: https://data.oecd.org/leadind/consumer - confidence - index - cci.htm

The Body Shop Financial Performance 15

Sales still impacted by channel rebalancing - 25.3% 1,218 909 Q2 - 21 Q2 - 22 ADJUSTED EBITDA¹ AND ADJUSTED EBITDA MARGIN (R$ million, %) 159 31 Q 2 - 21 Q 2 - 22 - 11.8% CC NET REVENUE (R$ million) 1 Excluding effects that are not considered recurring nor comparable between the periods under analysis, such as: restructuring cost associated with Russia’s exit Revenue reflects: • Post - lockdown channel rebalancing as decrease in The Body Shop At Home and e - commerce outpaced retail recovery • Lower sales to franchisees, but increasing retail sales month - on - month, further reducing franchise inventory Drop in Adjusted EBITDA from: • Lower volumes • Sales decline at TBSAH, e - commerce and sell - in sales to franchisees Actions to address EBITDA challenges: • Investments to drive store and consultant productivity • Continued optimization of store footprint • Detailed review of SG&A costs • Margin improvement from focusing on category mix Mar g in 16

Aesop Financial Performance 17

562 594 Q 2 - 21 Q 2 - 22 +5.7 % Another quarter of strong sales growth NET REVENUE (R$ million) +24.5% CC EBITDA AND EBITDA MARGIN (R$ million, %) 118 97 Q 2 - 21 Q 2 - 22 Revenue growth driven by: • Double - digit growth in all markets, led by North America and APAC • Continued superior LFL sales growth , improving overall store productivity, while continuing to roll out new stores in new and existing cities China entry plans underway for late 2022 18 EBITDA margin reflects higher investments in: • Digital • Categories • Geographies • Human resources to drive sustainable growth Ma rg in

Headwinds expected to persist in H2; sales trends expected to improve, margins remain pressured in short - term Creating the best beauty group FOR the world Transition committee to complete its work by year - end 1. Aiming for leaner, less complex, more decentralized organization, with more BU autonomy and accountability Significant corporate expense savings identified 2 . Clear focus of all businesses on defending margin and generating cash flow Ongoing focus on improving the fundamentals of our underperforming businesses 3. 4. Key Tak e aways 20

Thank You

Strong pipeline of innovative products Chronos Plumping Bio Hydrating Hyaluronic acid booster serum that hydrates all layers of the skin to fill in wrinkles and plump the skin. It includes fevillea, an ingredient from Brazilian biodiversity Rick Owen  s Travel Kits Aesop developed a collaboration with celebrated fashion designer Rick Owens – creating sophisticated travel kits with Owen  s favourite formulations and an eco - friendly packaging Eve Privé Avon International launched its first ever bespoke fragrance Eve Privé. It is crafted with a customizable musk technology that takes the effects of the skin chemistry one step further, adapts to it and creates a completely unique scent for the person wearing it to smell like themselves, only better The Glow Revealing Serum This skin care product is made with 10% of vitamin C, our highest concentration ever. It became the number 1 bestselling new product development by number of units 23

% OF SALES FROM RUSSIA AND UKRAINE / TOTAL GROUP SALES (FY21) Update on the war and Ukraine NATURA &CO FULLY MOBILIZED TO PROVIDE SUPPORT • Our primary concern as a global Group with operations in Ukraine continues to be the protection and safety of our employees and representatives facing violence and loss. 24 A LIMITED PRESENCE AT GROUP LEVEL • Revenues in Russia and Ukraine represented under 5% of consolidated revenue in FY21 (including all brands) • Contribution to consolidated Adjusted EBITDA is approximately 3% in FY21 • As of the June 30, 2022, consolidated financial statements, the non - recurring impacts in of the suspension of the The Body Shop operations Russia amounted in R$42.1 million in our consolidated EBITDA, disclosed as a non - GAAP adjustment ACTIONS TAKEN • The Body Shop and Aesop have suspended trading in Russia • Avon has suspended exports from Russia and is maintaining local operations in support of Representatives who operate as independent entrepreneurs; we believe restricting their access to products would have an outsized impact on women and children there • Global sanctions on certain industry sectors and parties in Russia, as well as any potential responses that may be provided by the governments of Russia or other jurisdictions, may adversely affect our business

Address the Climate Crisis & Protect the Amazon Protect Human Rights and be Human - Kind Embrace Circularity & Regeneration Natura IP&L: Natura launched its Integrated P&L (IP&L). This management tool allows Natura to account for the impact of corporate performance in the environmental, social, and human dimensions, in addition to financial results. According to IP&L, summing up all the positive impacts in the human, social and natural fields, and subtracting the negative impacts, for each US$ 1 in revenue, Natura generated US$ 1.5 in positive impact for society in 2021. Investment in key causes: Avon International partnered with No More to raise awareness of gender - based violence in conflict zones, The Body Shop launched its ambitious global activism campaign, Be Seen Be Heard, to support Pride month, Aesop launched its Queer Libraries initiative for the second year In Q2 Natura &Co reached 10.3% of recycled plastic content of all plastic used (accumulative Jan - Jun 2022). In partnership with The Union for Ethical BioTrade, Natura &Co is co - creating a new regenerative certification standard that will highlight the positive impacts our businesses are generating connected to nature Advances on Sustainability Vision 2030 Commitment to Life 26 Amazon: In Q2 - 2022, Natura expanded the purchase of community inputs with a growth of 61% YoY and started a new partnership with a Colombian community, expanding operations in the Pan - Amazon region. PlenaMata (DETER/INPE) detected 0.3M ha deforested in Q2. Considering Q1 and Q2 results, there was an increase of 10% YoY. As means of collaboration to solve this problem, Natura establishes partnerships and engages the public by presenting data and information on Amazon deforestation through the PlenaMata portal. Biodiversity: It was announced that COP15 will now take place in Montreal, Canada in December 2022. Natura &Co plans on attending in order to influence the adoption of a transformative global agreement that delivers for nature, climate and people.

Q2 - 22 DEBT BY TYPE Q2 - 22 DEBT BY CURRENCY 74% 15% 6% 5% 59% 35% 6% Bonds D e b e n t u r e s Working Capital Other BRL USD G BP Debt profile 27

Breakdown of global net revenue by brand NET REVENUE BY BRAND (R$ million) NET REVENUE BREADKDOWN (BY BRAND) (%) BR A N D Q 2 - 22 Q2 - 21 % (R$) % (CC) H1 - 22 H1 - 21 % (R$) % (CC) 1 3 , 285 . 6 2,938.6 + 11 . 8% +14.8% 5,879.2 5,554.3 5.9% 10.4% 3 , 885 . 9 4,776.0 - 18 . 6% - 8.0% 7,861.2 9,689.1 - 18 . 9% - 9.3% 936 . 0 1,239.9 - 24 . 5% - 11.1% 1,977.4 2,579.6 - 23 . 3% - 11.1% 594 . 9 562.7 +5.7% +24.5% 1,238.0 1,149.3 7.7% 24.5% Total Net Revenue 8,702.4 9,517.2 - 8.6% +0.4% 16,955.7 18,972.2 - 10.6 % - 2.0% 37 . 8% 44 . 6% 10 . 7% 6.8% Nat u ra Avon The Body Shop Aesop Q 2 - 22 34 . 7% 46 . 4% 11 . 7% 7.3% Nat u ra Avon 28 1 Includes other revenues and &Co pay The Body Shop Aesop H 1 - 22