The group posts sales growth in all three brands
SÃO PAULO, May 3, 2019 /PRNewswire/ -- Natura &Co posted another strong performance in the first quarter of 2019, with growth in all three brands driving consolidated sales up 8.5%, reaching R$2.9 billion in net revenues. Net income was up 72.8% to R$41.9 million. EBITDA rose by 5.6% to R$336.9 million, while adjusted EBITDA (excluding non-recurring effects) increased 3.7% to R$330.8 million, with strong efficiency gains at The Body Shop.
Roberto Marques, Natura &Co's Executive Chairman of the Board stated: "Natura &Co posted another solid set of consolidated results in the first quarter of 2019, confirming the continuing momentum of the multi-brand, multi-channel, purpose-driven beauty Group we have constituted. All three of our brands and businesses posted sales growth in Brazilian Reais in spite of challenging conditions in some key markets, notably Brazil, demonstrating the group's resilience and the benefits of its geographic footprint."
Natura's net revenue grew 4.6% in Q1-19, and adjusted net revenue was up 2.3%. This performance was driven by Latin America (+10.0% in Q1-19 on an adjusted basis and +19.4% at constant currency), with strong growth in all markets, even in Argentina despite its difficult macro-economic environment. In Brazil, sales were down 1.0% in a weaker CFT market, while Natura continued to gain market share, confirming its leadership in the sector and in direct sales and underscoring the business' solid fundamentals. According to Euromonitor's recently published yearly report, Natura closed 2018 as the leader in the Brazilian CFT market for the second consecutive year, with market share of 11.7%, up from 11.4% in 2017. Also in Q1-19, Natura posted productivity gains by consultants for the tenth consecutive quarter demonstrating the vigour of its Relationship Selling commercial model and Natura's digital platform which continues to progress. EBITDA rose 3.6%, reaching a margin of 14.8%.
The Body Shop's transformation plan is well underway and showing encouraging results. Net revenue was up 10.2% in Brazilian Reais in Q1. At constant currency, sales were stable (-0.2%), impacted by the closure of underperforming stores, as part of the optimization of its store footprint. Like-for-like sales grew 2.4% in the UK, underscoring the brand's growing attractiveness in its biggest market, and strong efficiency gains drove a 41.7% rise in EBITDA.
Aesop delivered yet another quarter of solid double-digit growth both in sales and EBITDA. Revenue increased 34.2% in Reais and 16.3% at constant currency, supported by strong growth in all channels and geographies. Signature stores like-for-like sales growth was 10.6% in the quarter. Q1-19 EBITDA grew by 29.5% vs. Q1-18.
Natura &Co's net-debt-to-EBITDA ratio stood at 2.95 times in Q1, decreasing in comparison to 3.32x at Q1-18. The group is on track to achieve its target of reducing the company's leverage to the pre-Body Shop acquisition level of 1.4 times by 2021.
The group also continued to make a positive social and environmental impact. Natura was included in the Corporate Knight's Global 100 list of the most sustainable corporations in the world for the tenth consecutive year. The Body Shop won Marie Claire's Prix d'Excellence Beauty award for its Bio Bridges programme, boosted by the Christmas campaign, which helped protect a further 11 million square meters of natural habitats in Armenia and the UK. And Aesop reduced plastic consumption by 17% per unit by redesigning some of its bottles, which should contribute to saving 124 tons of virgin plastic over a year. These achievements confirm Natura &Co's commitment to a better way of doing business, combining positive economic, social and environmental impact.
Natura &Co is pleased to announce its participation in a new venture capital vehicle called Dynamo Beauty Ventures (DBV). The new vehicle will work to identify and invest in emerging brands in the cosmetics and wellness segments, particularly in Europe and the United States. DBV will work in partnership with entrepreneurs with extensive experience in the industry to acquire minority stakes in companies with strong growth potential and innovative business models.
*As of January 1st, 2019, a new accounting standard for leases was adopted, IFRS 16, without restating the comparable periods. For the purposes of comparison, the results and analyses related to Q1-19 in this report exclude its effects. Thus, the terms "EBITDA", "Net Income" and "Financial Income and Expenses" presented herein exclude the effects of IFRS 16, whereas "Adjusted EBITDA" also excludes other effects that are not considered recurring nor comparable between the periods under analysis. In section 5 of this report we present the reported results, including the impacts of IFRS 16.
About Natura &Co
Resulting from the combination of Natura, Aesop and The Body Shop, the corporate brand Natura &Co consolidates the creation of a global, multi-channel and multi-brand cosmetics group that is driven by purpose. The three companies that form the group are committed to generating positive economic, social and environmental impact. Founded in 1969, Natura is a Brazilian multinational in the cosmetics and personal care segment, leader in direct sales. Founded in 1976 in Brighton, England, by Anita Roddick, The Body Shop is a global beauty brand that seeks to make a positive difference in the world. The Australian beauty brand Aesop was established in 1987 with a quest to create a range of superlative products for skin, hair and the body.
SOURCE Natura &Co