Natura &Co doubles net income in Q2, with revenue growth in all three brands
Quarter marked by the announcement of the acquisition of Avon Products, Inc. and Natura &Co's commitment on climate change
SAO PAULO, Aug. 15, 2019 /PRNewswire/ -- Natura &Co posted another strong performance in the second quarter of 2019, with net income more than doubling and revenue growth in all three brands.
The quarter was also marked by the announcement on May 22 of the transformational acquisition of Avon Products, Inc, which will make Natura &Co the world's fourth-largest pure play beauty group and a leader in Direct-to-Consumer.
The group also took an important step by making its first major sustainability commitment at Natura &Co level: Ahead of the UN Climate Action Summit in September, Natura &Co joined 27 other companies in a pledge to hold the increase in the global average temperature to 1.5°C above pre-industrial levels and reach net-zero emissions by 2050. This underscores Natura &Co's commitment to a better way of doing business, combining positive economic, social and environmental impact.
Consolidated net revenue reached R$3.4 billion, up 9.8% on a reported basis and up 7.7% on an adjusted basis. EBITDA rose 27% to R$424.7 million, while adjusted EBITDA rose 10.6% to R$411.3 million. Net income increased nearly 110% to R$66.6 million.
Roberto Marques, executive chairman of Natura &Co, declared: "With strong revenue growth, a double-digit increase in adjusted EBITDA and a doubling in net income, Natura &Co posted another very solid set of results in Q2. All three of our existing brands and businesses contributed to this strong performance while making further progress in their sustainability agendas.
This quarter also saw Natura &Co take a new decisive step in the creation of a global multi-brand, multi-channel, purpose-driven group with the announcement of the acquisition of Avon Products, Inc. We expect to close the transaction as planned in the first quarter of 2020. We are energized by the prospect of working with Avon and its representatives, reinvesting the target synergies to accelerate growth and further strengthen Natura &Co as a force for good in the industry."
The Natura brand's adjusted net revenue in Brazil was up 6.7% in Q2, driven by strong Mother's Day and Valentine's Day campaigns. Productivity per consultant rose for the 11th consecutive quarter, by 7.9%, and Natura's digital platform continues to advance, with 680,000 consultants using it. Latin America also saw solid growth of 5.3% in adjusted net revenue in Reais and a stronger 17.3% in constant currency. Argentina posted a strong performance despite a challenging market environment, and Mexico and Colombia also delivered growth. Natura's consolidated adjusted EBITDA rose 6.5% to nearly R$366 million.