Q1 2025 Natura &Co Holding SA Earnings Call (English, Portuguese) Transcript
Key Points
- Natura &Co Holding SA (BSP:NTCO3) reported a revenue growth of 12.2% year-on-year in constant currency in Latin America, with a notable 8.2% growth in Brazil.
- The company achieved a significant improvement in recurring EBITDA margin in Latin America, reaching 15% in Q1 2025, up from 9.6% in Q4 2024.
- Strong cash generation was reported in a typically weaker quarter, with a cash inflow of BRL185 million in Latin America.
- The company is progressing with Wave 2 implementation in Mexico and Argentina, which is expected to bring further efficiencies and margin improvements.
- Natura &Co Holding SA (BSP:NTCO3) is undergoing a simplification process, including the merger of Natura &Co into Natura Cosméticos, which is expected to streamline operations and reduce costs.
- Avon International recorded another quarter of revenue deleveraging, leading to high operational cash burn.
- The Avon brand in Brazil experienced a 12% decline in revenue, impacted by a lower number of product launches, particularly in the makeup category.
- The company posted a net loss of BRL151 million in Q1 2025, driven by transformation expenses, financial expenses, and tax expenses.
- Cash flow was negative by BRL675 million in the quarter, with significant cash outflows from operating working capital and other assets and liabilities.
- The restructuring of Avon International includes drastic measures such as the reduction of around 1,100 jobs, indicating ongoing challenges in this business unit.
Good morning, ladies and gentlemen. Thank you for waiting. Welcome to Natura &Co's first-quarter 2025 earnings call. Simultaneous translation services are available on the platform. (Operator Instructions)
We have Mr. Joao Paulo Ferreira and Ms. Silvia Vilas Boas, respectively, the CEO and CFO of the company are here with us today. The presentation we'll be referring to during this call is available on the Investor Relations website.
I now hand it over to Mr. Joao Paulo Ferreira.
Good morning, everyone. Thank you for being here with us. It is with great enthusiasm and confidence that I begin a new chapter for Natura. Today, we are reporting the results for the first quarter of 2025. I would like to start with the group's latest news.
We have just completed another very important step in our simplification journey as the extraordinary general meeting approved the merger of Natura &Co into Natura Cosméticos. This process
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