Mar 5, 2021
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Body Shop, Avon and Aesop all outperform for Natura in Q4

Mar 5, 2021

The Body Shop, Avon and Aesop owner Natura & Co reported a sales surge and net profits up 200% in Q4, with the Brazilian giant saying it's continuing to outperform the wider market. 

The Body Shop

It was another quarter of impressive growth, driven by a continued ramp-up in digital sales across all brands that helped offset the continued impact of the pandemic.

Its consolidated net revenue was up 24.3% to BRL12 billion (€1.77 billion) on a reported basis and rose 6.4% of constant currency as it saw sales growth at all four of its brands. 

Adjusted EBITDA was up 12.3% to BRL1.5 billion, with a margin of 12.4%, and net income surged 200.7% to BRL177.4 million.

As mentioned, digital was a huge part of this and the company’s overall digital sales rose 79% during the period with all brands seeing the highest ever e-commerce sales. 

In fact, Aesop’s total e-sales jumped 190% to make up almost 30% of its revenue. And The Body Shop “rapidly pivoted to online and At-Home channels, which combined grew more than 130%, representing 40% of total sales”.

The company added that social selling continues to grow, with e-brochure revenue up nearly 90% vs Q4 2019 at Avon globally. Avon's business model was clearly a benefit during the period with the company less dependent on physical shops than so many beauty brands.

Looking at the wider results for its brands, The Body Shop posted another strong quarter, with net revenue increasing 48.4%, despite store closures, as digital filled the gap, especially in Europe. Adjusted EBITDA in Q4 was BRL492.8 million, although the adjusted margin of 23.7% was down 290 bps.

Avon International saw net revenue growth of 12.1%, with a particularly strong performance in the UK, where it recorded sales growth of 3% in constant currency and gained market share for the third consecutive quarter. Adjusted EBITDA was BRL118.9 million, but also with a lower margin (down 560 bps) at 4.1%, reflecting investments in brand, digital and commercial areas to accelerate future growth.

Aesop posted “another stellar performance” with strong double-digit growth in both sales and profitability. Net sales grew 62.1% with “a remarkable performance in Asia” and a 190% increase in digital sales. EBITDA rose 66.1% to BRL271.6 million, with the margin up 90 basis points to 37.1%.

And Natura & Co Latam's net revenue increased 20.5% with strong growth both in Brazil (+16.2%), and Hispanic Latam (+44.5%). Adjusted EBITDA rose 33.6% to BRL774.1 million with the adjusted EBITDA margin up 120 bps to 12.2%.

But the quarter was also notable for some other developments outside of sales and profits. At the Natura brand in Latin America, the number of consultants sharing content grew by more than 300% since Q1 and the number of orders through the 1 million+ consultant online stores in the region increased by 60% year-on-year.

And after unveiling its 2030 sustainability vision, Commitment to Life, Natura & Co reached a new milestone by becoming a B-Corp, and also the world's biggest certified company. It also avoided 32% in emissions.

And it strengthened its capital structure during the quarter too, with the successful completion in October of a US$1 billion capital raise. This allowed it to significantly deleverage its balance sheet, and it ended 2020 with a net debt-to-EBITDA ratio of 0.97 times.

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