Brazilian Beauty Giant Natura&Co Posts $1.599 billion in Net Revenue in Q1 Slips 38%
- Chaileedo Press
- May 10, 2022
- 4 min read
Brazilian beauty giant Natura&Co has reported its results for the first quarter of fiscal 2022, which witnessed consolidated net revenues reaching $1.599 billion, down 12.7% year-on-year. Natura&Co said that its Q1-22 performance was notably impacted by rising inflation affecting discretionary spending, cost pressures in the supply chain, and the war in Ukraine.
On May 6, Brazilian beauty giant Natura&Co reported its results for the first quarter ended March 31, 2022. During the period, the Group's consolidated net revenues reached $1.599 billion, down 12.7% year-on-year at current exchange rates and 4.6% at constant exchange rates, and adjusted EBITDA was $115.4 million, down 38.1% year-on-year.
It is reported that in early 2020, Avon announced that it officially joined the Natura&Co Group. After Avon joined, Natura&Co Group became the fourth largest cosmetics group in the world, with four iconic cosmetic companies under the group, namely Avon, Natura (Brazilian skincare brand), The Body Shop (British organic skincare brand), and Aesop (Australian organic skincare brand).
Natura Latam achieved net revenue down 1.9% in Q1-22 in BRL and up a solid +5.3% at CC, reflecting the appreciation of the BRL versus Hispanic market currencies. In Brazil, net revenue was +3.1% in Q1-22 (+27.5% vs. Q1-19), with a significant market share gain in the quarter, according to Kantar, on the back of a strong comparable in Q1-21. Productivity per consultant resumed growth, gaining a strong +10.5%.
Natura launched a complementary fragrance for Brazil's largest perfume brand company that uses 45% recycled glass, and 100% recyclable plastic caps, and reduces waste by 35% and carbon emissions by 56% compared to standard perfume bottles.
Avon International Q1 net revenue was down 22.1% in BRL (-10.1% at CC), mainly impacted by the war in Ukraine, lower disposable income in Europe from rising inflation, and fewer representatives, reflecting a higher comparable base last year when the channel benefited from lockdowns, as well as intentional optimization linked to the implementation of the new commercial model. It continued to see progress on Avon's business fundamentals, including sequentially higher productivity since the rollout of the new commercial model (14 markets), with an increase of +9.1% in productivity and stable activity (excluding Russia and Ukraine).
Aesop's net revenues increased by 9.6% year-on-year to $24.1 million, with an adjusted EBITDA margin of 21.7%. The brand achieved double-digit growth in all markets, with strong performances in North America and the Asia Pacific. The brand's online sales accounted for 23.5% of net revenues during the period.
In its financial report, it highlighted that Aesop Asia outperformed despite Covid impacts from lockdowns, mainly in China. And its China entry plans are ongoing, including investments in digital platforms.
Natura& Co's Aesop has also been on a digital path in China. 2012 saw the acquisition of Australian brand Aesop by Natura&Co. On May 24, 2021, Brazilian beauty giant Natura& Co's Aesop officially launched its official WeChat mini-app store, offering a wide range of products including skincare, hair care, and body care. Aesop is now available on the Chinese e-commerce platform Taobao. Currently, Aesop's overseas flagship store has more than 670 thousand followers on the Chinese e-commerce platform Taobao. The top seller is Aesop Resurrection Aromatique Hand Balm with total sales of 80,000+ and a price of $29.
It is reported that Natura&Co Group has business in more than 100 countries and regions. In terms of sales markets, in the first quarter, more than 45% of the Group's net revenue came from regions outside Latin America, with growth mainly coming from Asia and North America. Currently, Body Shop and Aesop have suspended trading in Russia due to the Russian-Ukrainian war, and Avon has suspended its exports to Russia.
On March 23, Natura&Co announced the suspension of its NYSE listing plan and focused on a major push to transform its brand Avon. Natura&Co said that Avon International's new business model has helped improve some key performance indicators, with China becoming an important market for the group's layout.
And in 2018, Natura Group's CEO João Paulo Ferreira said that he hopes that one day Natura Group can surpass L'Oreal, Unilever, and Estee Lauder Group in the first place in the global beauty company ranking. To achieve this goal, the layout of the Chinese market has become a must for Natura Group's expansion.
Natura & Co also strives to defend Human Rights and be Human-Kind. On International Women's Day, Natura &Co used the power of our collective to amplify the message for peace, standing in solidarity with women everywhere, especially those facing unacceptable military aggression in Ukraine. Angela Cretu, Avon International CEO, used the day to create even more momentum and activate Avon networks across the world. It has made progress on equitable pay, with a significant reduction in our explained pay gap and remaining at just -1.19% in our unexplained pay gap. It has a history of creating economic opportunities for its Consultants and Representatives, arming them with tools, and support to scale their businesses, giving them flexibility and financial independence.
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