May 13, 2021
Natura & Co, the Brazil-based owner of The Body Shop, Avon and Aesop, said it
saw another quarter of double-digit revenue growth in Q1, easily beating the wider global Cosmetics, Fragrance, and Toiletries market. That was due to a strong increase in digital sales, while EBITDA surged.
Consolidated net revenue rose almost 26% to BRL9.5 billion (€1.8bn/£1.27bn/$1.8bn), although this was only an 8.1% rise at constant currency rates (CCY). It saw sales growth at the three key brands, as well as its own label, with the margin up 690 basis points to 8.8%.
Adjusted EBITDA, excluding transformation costs and Avon-related acquisition effects, rose 68.5% to BRL963.2 million, with a margin of 10.2%, up 260 basis points.
Total group online sales powered ahead by 166%. At the Natura brand, digital sales were up by 253% and Avon globally rose 132%. Aesop online grew 102%, representing 29% of revenue. The Body Shop continued its pivot to e-commerce and direct selling channels, up 119% and 251% respectively, to jointly represent 51% of total sales.
Looking deeper at the brand performances, The Body Shop saw net revenue increasing 47.7% in BRL. It succeeded in offsetting lost retail sales, notably in Europe, thanks to a focus on direct sales channel and e-commerce. EBITDA in Q1 was BRL194.2 million, with a margin of 14.7% (-30 bps).
Avon International posted Q1 net revenue growth of 11.4% in BRL, with market share gains in all eight of its top markets, including the UK. Adjusted EBITDA was BRL97.4 million, with a 4.1% margin (-70 bps), due to the pandemic effect in key categories, mainly in Europe, and strategic investments.
Aesop posted another “outstanding” performance. Net sales grew 71.9%, with growth in all regions despite store closures in Europe, Canada and parts of Australia. It saw a “remarkable” performance in Asia and a strong increase in digital sales. EBITDA more than doubled to BRL156.6 million, with the margin up 390 basis points to 26.7%.
Natura & Co Latam's net revenue increased by 24.6% and the Natura brand's overall net revenue rose by 29.6%, with strong growth both in Brazil (+12.6%), and Hispanic Latam (+60.4%). The Avon brand's net revenue increased by 20% in BRL, with strong growth of 35.1% in Hispanic Latam easily countering a 2.8% drop in Brazil. Adjusted EBITDA for Natura &Co Latam rose 119.2% to BRL630.3 million, with a margin of 12.2%, up 690 bps.