Santander

11th Annual Conference

São Paulo, BR | August, 2010
Company Overview
 Our History
70‟s 80‟s 90‟s 00‟s Current Moment
4.300

657

170
5

A small Strong growth Commitment with Sustainable Management model

laboratory and based on regional social and development focus evolution
two passions: expansion and environmental
cosmetics and products portfolio responsibility Natura Ekos Line New circle of growth
relationships developed (2000) among other Latin
(1969) Seek to excel in American countries
management Natura Space,
Choice to purse Cajamar site opened Increased
a direct sales (2001) leadership in Brazil
platform
(1974) IPO on the Bovespa
(2004)

Follow on BOVESPA
Free Float to 40%
(2009)
Sales Volume Evolution (retail) in US$ million
3
 Where we are…

France

Mexico 7.4

Colombia 3.0

Peru 1.4
28.4 Brazil

Chile 1.7

2.9 Argentina

Size of CF&T Market

Retail Price, 2009 (US$ billion)
Source: Euromonitor
4
Value Proposition
 Differentiated Value Proposition

Attractive market with

differentiated growth profile

channel products

brand

corporate
behavior

Delivery of “Triple Bottom Line”:

Economic: Social: Environmental:

› Strong cash flow generation › Wealth creation to consultants › Carbon neutral operations
› Attractive growth and profitability › R$ 60 million invested in CSR 1 in 2009 › Utilization of refill packages
› Consistent dividend payments › Benefits extended to extractives › Sustainable extraction
communities › Use of recycled and recyclable materials

Corporate and Social Responsibility 6

1
 Relevant market with
differentiated growth in LatAm…
Size of CF&T market (in US$ billion) Direct sales share in the CF&T Market

CAGR % Region Direct Sales (%)

Countries 2009
„04- „09

United States 59 1.6% Latin America 27.3%

Japan 40 0.7% Brazil 24.4%

Argentina 23.8%
Brazil 28 14.1%
Chile 19.5%
Mexico 7 7.4%
Colombia 38.5%
Argentina, Chile, Colombia
9 10.8% Mexico 31.6%
and Peru
Peru 28.0%

Countries in which Natura operates 44 12.2% Asia Pacific 11.7%

World 351 5.1% North America 8.5%

Western Europe 3.2%

Source: Euromonitor 2009

Australasia 9.2%
The markets in which Natura operates
Africa / Middle East 2.3%
represent 12.5% of the global CF&T
Source: Euromonitor 2009
market and have a growth rate of 2.4x that
of the total market

7
 ... leveraged in the Brazilian
context
Core market growth in real terms vs. Demand drivers in Brazil
GDP in Brazil
GDP
Core market › Increasing purchasing power of C
growth in real
growth
terms and D income classes

2002 2.7% 2.5%

› Greater participation of women in
2003 1.1% 7.0% the labor market
2004 5.7% 12.2%

2005 3.2% 9.6%

› Cultural emphasis on personal and
aesthetic treatments
2006 3.8% 10.1%

2007 5.4% 8.3%

2008 5.1% 10.8%

2009 -0.2% 10.4%

CAGR ‘02- ‘09 3.4% 8.9%

2010E 6.9%

Source: IBGE, Central Bank and Abihpec

8
 Leadership position in Brazil..

Market Share Total CF&T (Euromonitor) Core Market (ABIHPEC / SIPATESP)

(Percentage) Natura Market Share per Segment
13,2
12,6

23.7%
10,5
9,9
9,5

7,9
7,3 6,7
6,3 CF: 38.8%
6,3
6,1

2,9 T: 12.7%

2003 2004 2005 2006 2007 2008 2009 1st Bi 10

Natura Unilever Avon

Procter & Gamble O Boticario Colgate
Source: Euromonitor 2009

9
 ..gaining share in LATAM

3.984
Sales Natura (at retail prices)¹ 3.738
(US$ Million)

Total Market (LATAM²) : US$53,6 billion

244.5
Share Natura 2009
LATAM

7,43%
7,43%

Share Natura 2009 0.45% 0.45% 2.99% 4.52% 2.75% 1.46% 13.16%

Evolução Share LATAM

+0.28pp
Colombia +0.15pp
Mexico +0.78pp
Chile +0.67pp
Peru +0.55pp
Argentina +0.40pp +0.24pp
Brazil Total Natura
2008 -> 2009 (Natura)

Ranking Natura 2009 23º 22º 9º 8º 6º 12º 1º

Ranking Evolution
Natura 2008 -> 2009 33º-> 23º 30º-> 22º 10º-> 9º 10º-> 8º 11º-> 6º 16º-> 12º Steady

Avon (11.1%) P&G (15.7%) P&G (13.7%)

Top 3 Players P&G (16.2%) Unilever (15.5%) Unilever (18.2%) Natura (13.2%)
P&G (10.9%) Colgate (11.3%) P&G (12.3%) Unilever (9.8%) Avon (12.2%) Unilever (10.5%) Unilever (9.9%)
(mkt share) Colgate (9.4%) Belcorp (8.3%) P&G (10.9%) Avon (9.1%) Avon (9.5%)
Unilever (8.3%) L'Oréal (10.1%)

Total sales at retail price 3.049 7.399 1.744 1.421 2.948 28.415
(global ranking) 16.734
(20º) (11º) (25º) (28º) (21º) (3º)

¹ Source: Euromonitor 2009

10
10
 Brand recognition in Brazil

CF&T brand by Most valuable brands among Brazilian

preference (%) public companies (2009)¹
47 46
42 47 Brand value Mkt. Cap
46 Ranking Company
(in R$ BN) (in R$ BN)

1º Petrobrás (Oil) 19.3 347.1

2º Bradesco (Bank) 14.9 103.2

18
16 16
Itaú Unibanco
18 3º 13.3 154.4
16 16 (Bank)

Banco do Brasil
4º 11.0 76.3
(Bank)
Natura
2007 2008 2009 5º 6.1 15.6
(Cosmetics)
Skol2
Natura
2008 2nd place
2009 6º
(Beverages) 5.4 98.2

Natura 2nd place

Source: Ipsos Brand Essence 1 Source: BrandAnalytics and Millward Institute
2 Considers Ambev's Market Cap

11
 Brand Position

Prestige
Masstige
Massive

Source: Booz & Company research, 2009 12

 R$ 2.94 each
5 unit package

R$ 4.95 /each
3 unit package

R$ 10.50 /each
1 unit package

13
 Channel strength

Available consultants (in thousands) Channels differentiations

Brazil Int’l Total High productivity1 Training

2Q: 941.9 2Q: 177.7 2Q: 1,119.6 2.2 times higher than 583,000
(+17.9%) (+26.8% ) (+19.3%) its peers consultants
trained in 2009
1.119
942
1.034
875
799 939 Business model
731 850 that generates
632 719 income and work
Low
+19.8% 159
177 turnover
140 +21.8%
119 36% on
86 average High satisfaction2
+33.9% 90% in 2009

2007 2008 2009 1H09 1H10

2007 2008 2009 2007 2008 2009 1H09 1H10

› Consultants are Natura‟s first consumers

› Drive sales through personal relationships
› Channels disseminate Natura's values with consultants acting as agents of social transformation
› Natura reached 1 million consultants in October, 2009
1 Source: Company, ABEVD (Brazilian Association of Direct Sales Companies)
2 HAY Consultant annual opinion poll for consultants satisfaction
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 Commercial model - CNO

• Platform for channel growth

• Stronger and more productive relationship with our consultants
• Greater emphasis on training
CNO Model
Old Model
CN

CN CN
CN CNO
Brazil (2010)
CN CN
CN CN 1 GR 11 CNOs
GR GR
CNO CNO 1 CNO 96 CNs
CN CN CN CN
CN 1 GR 1,048 CNs
CN CN
By the end of the 9th cycle.

1 GR: up to 15 CNOs GR – Relationship Manager

CNO – Natura Super Consultant
CN – Natura s Consultant
1 CNO : up to 150 CNs
1 GR: 600 CNs

1 GR: up to 2,250 CNs

Hired under CLT regulations
15
 Innovation

Number of new products & › Products with

innovation index¹ functional, emotional
and philosophical
benefits

68,8% 67,6% 64,6% 68,1%

56,7% › Sustainable use of
Brazilian biodiversity

183 › Open Innovation

exceeded 50% of the
projects
123
113

52
38

3.5%* 2.9%* 2.6%*

2007 2008 2009 1H09 1H10

Number of launches Innovation Index

* Percentage of net revenue invested in innovation

Source: Company

Note:
1 Percentage of products launched in the last 24 months in
the company‟s revenues 16
Summer Winter Launches 2010

Ekos Line Chronos Line

17
 Corporate behavior

» Evolution on relationship quality

» Systematic process of stakeholder engagement:
Consultants, employees, consumers, supplier communities and investors
» 1,500 people involved

» Third company to be publicly listed on the Bovespa Novo Mercado

» First Latin American Company to adopt the 2001 Global Reporting Initiative (GRI)

» Part of ISE – Corporate Sustainability Index

» Best company (Exame); Most admired company in Brazil, 2009 (Carta Capital)

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Triple Bottom Line Results
19
 Social and Environmental Results

CO2 emissions Power consumption per product

(CO2 emitted / Kg of sold
product sold) (Kjoules / unit)
598,9 552,1
4,02

3,82
447,3

3,63

2007 2008 2009 2007 2008 2009

» Carbon Free since 2007

» Ekos 10th anniversary: Sustainable use of biodiversity and cultural heritage.
Engagement with 26 communities, benefiting 2,084 families
» Crer Para Ver program – improvement of brazilian public education: 7.1% of
the consultants joined the voluntary product selling
» Climate research
» consultants: 90% in 2009
» employees: 74% in 2009
» suppliers: 82% in 2009
20
 Economics

Net Revenues EBITDA and Margin Net Income and Margin

(R$ million) (R$ million) (R$ million)
CAGR „07-„09 = 17.5% CAGR „07-„09 = 19.5% CAGR „07-„09 = 21.2%

24,1% 25,0% 16,1%

18.6% 16,4% 14,5%
23,8% 15,1% 14,5%
23,5%
23,0%

4.242 17.2% Consolidated net incom

32.0%
3.576
23.0%
3.073 8.5%
1.008 31.0%
684
860
2.298 518
706 465
1.868
575
439 307 333

2007 2008 2009 1H09 1H10 2007 2008 2009 1H09 1H10 2007 2008 2009 1H09 1H10

Source: Company

21
 Economics

Capex Leverage Dividends paid and pay-out ratio

(in R$ million)
(in R$ million) (Net debt / EBITDA)
CAGR „07-„09 = 20.0%

250

96%
89% 87%

136 141

110
0,2 0,2
598
500
415
0,1

2007 2008 2009 2010E 2007 2008 2009 2007 2008 2009

Source: Company
22
 Economics – International operations

Net revenues (R$ million)

Operations in implementation (R$ Million)

+ 67.0% in
local currency
Operations in consolidation (R$ Million)

66,5
218,5 + 32.7% in
local currency

164,4
44,0 43,3

(Mexico and Colombia)

121,2
114,0 31,6
(Argentina, Chile, Peru)

100,9

21,7

2007 2008 2009 1H09 1H10 2007 2008 2009 1H09 1H10

EBITDA (R$ million)

2007 2008 2009 1H09 1H10

8,9

5,2

(12,8)
1,8

(25,4)
2007 2008 2009 1H09 1H10 (28,0)
(1,4)

(37,9)
(5,1) (42,3)

23
Looking Ahead
24
 Looking ahead

Brazil
Management Model
Continue enhancing leadership via
brand and channel strength
Managing through processes
Opportunity to gain its market
Strengthening organizational
share in sub-categories
culture
Leadership development
Latin America Business and regional units
New growth cycle
Business model focused on
increased customization
Corporate behavior

Consistent investments: Increase in CAPEX

IT (commercial and logistic processes)
Logistic Model
Production capacity

25
 Management model

› Leadership development

› Strengthening of corporate culture based on Natura's core values

› Implementation of regional and business units

Business Units
Management by Category and Brands
› Proximity to market
A B C D
› Regionalization of marketing mix
Regional Unit

São Paulo Metro

› Increased autonomy and accountability
Channels

São Paulo
Countryside

Mid West1
› Leadership development opportunities
North/Northeast

South

Note:
1 Includes the Mid West region and the following states: Minas Gerais, Rio de Janeiro and Espírito Santo

26
 Vision

Because of its corporate behavior, the

quality of the relationships it establishes and
the quality of its products and services,
Natura will be an international brand,
identified with the community of people who
are committed to building a better world,
based on better relationships among
themselves, with others, with
nature of which they are part,
with the whole.
IR Team +55 11 4196-1421

www.natura.net/investidor

Helmut Bossert

Patricia Anson

Bruno Caloi
Back Up
 Beliefs

Life is a chain of relationships. The greater the diversity,

Nothing in the universe exists
alone. Everything is
interdependent.
We believe that valuing relationships
is the foundation of an enormous
human revolution in the search for
peace, solidarity, and life in all of its
manifestations.
Continuously striving for
improvement
develops individuals,
organizations,
and society.
the greater the wealth and vitality of the
whole system.
The search for beauty,
which is the genuine aspiration of
every human being, must be free of
preconceived ideas and manipulation.
The company, a living organism, is a
dynamic set of relationships
Its value and longevity are connected to
its ability to contribute to the evolution
of society.

Commitment to the truth

is the route to perfecting the quality
of relationships.

30
 Beliefs

Reason for being

Our reason for being is to create and sell
products and services that promote well-
being/being well.

Well-being
is the harmonious, pleasant
relationship of a person with
oneself, with one's body.

Being well
is the empathetic,
successful, and gratifying
relationship of a person
with others, with nature
and with the whole.
Ekos
sustainable use
of biodiversity
Chronos
a truly beautiful
woman
Todo Dia
(every day)

caring for body

and mind
Mamãe e Bebê
(mom and baby)

the importance of
the bond between
parents and
their children
 Core Market CF&T - Brazil

Cosmetics and Fragrances Toiletries CF&T Market¹

(R$ billion) (R$ billion) (R$ billion)

+ 93 bps + 121 bps + 111 bps

33,0% 33,9% 21,5% 22,6%

11,2% 12,4%
17,5

15,3

9,3
8,3 8,1 +14.4%
7,2

+14.7% +14.1%

2008 2009 2008 2009 2008 2009

36
(1) Core market: Skin care, sunscreen, makeup, perfumes, fragrances, hair care, shaving products and deodorant - excludes diapers, nail
polishes, sanitary pads, hair dyes and oral hygiene. Source: Sipatesp/ ABIHPEC.
 Productivity - Brazil

Consultant Productivity1 in Brazil (R$ per average available consultant)

9.495 9.622 9.493

2.5%

2.8%

4.386 4.498

2.391 2.457

2007 2008 2009 2Q09 2Q10 1H09 1H10

(1) At retail prices.

37
 NATU3 Performance

2004 2005 2006 2007 2008 2009 2010

NATU3: +87.2% NATU3: +37.9% NATU3: +51.1% NATU3: -41.4% NATU3: +18.0% NATU3: +101.6% NATU3: 15.9%
Ibov: +33.0% Ibov: +28.3% Ibov: +29.1% Ibov: +47.4% Ibov: -41.4% Ibov: +82.7% Ibov: -3.6%

NATU3
23/07/2010
R$41.10

Natu3 Ibovespa
632%

NATU3 251%
26/04/2004
R$6.67

38
 P&L Natura

R$ million 2Q10 2Q09 1H10 1H09

NET REVENUES 1.283,6 1.034,3 2.298,0 1.867,9

Cost of sales (400,1) (301,8) (711,8) (563,4)

GROSS PROFIT 883,6 732,5 1.586,2 1.304,6

Operating expenses (566,9) (505,6) (1.046,8) (912,9)

Financial income (expenses), net (12,8) (19,7) (19,4) (12,8)
Other operating income (expenses), net (12,4) 0,7 (13,2) 0,6

INCOME BEFORE INCOME TAX

AND SOCIAL CONTRIBUTION 291,5 207,9 506,9 379,5

Income tax and social contribution (100,0) (39,7) (173,9) (72,5)

NET INCOME FOR THE YEAR 191,5 168,2 333,1 307,0

Ratios

Gross Margin 68,8% 70,8% 69,0% 69,8%

G&A / Net revenues 10,3% 11,8% 10,6% 11,6%
Selling Expenses / Net revenues 32,2% 35,3% 33,2% 35,4%
Net Margin 14,9% 16,3% 14,5% 16,4%
 Purchasing power is increasing in
Brazil..
Brazil- Social Income Classes
53,0% › 36 million people will move up to
Classes A,B and C (FGV) until
42,4% 2020

› 20 million people left poverty

30,2% since 2003

18,2%
16,4%
15,1%
13,7%
11,1%

2003 2004 2005 2006 2007 2008 2009

Class AB Class C Class D Class E

Class Income (R$)
AB More than 4.808
C 1.115 – 4.808

D 804 -1.115

E Up to 804
Source: FGV 2009