Strategy

By looking to the future, we are continuing to concentrate on our strategic priorities: the recovery of margins, the creation and conversion of cash, and greater autonomy of the business units. This approach has allowed us to increase investments to drive sustainable growth, with a solid and diversified omnichannel strategy, innovations focused on consumers, and strong brands that are recognized by everyone.

The Natura &Co Board of Directors is responsible for development of strategic planning, which is then deployed at the Natura &Co Latin America business unit and Avon International business unit.

In line with our purpose and ambition, the business plan is implemented together with Natura’s Regeneration Strategy and the Commitment to Life, an important gauge of the public targets that are to be achieved by 2030, representing a definite move towards the establishment of a regenerative business.

As such, we ensure value creation for the shareholders and for everyone else with whom we have a relationship, anchored in key-indicators concerning impact and relations guided by respect for nature, ecosystems, people and human rights (read more about the involvement of the management in ESG matters in the Corporate Governance chapter pg. 29).

Strategic priorities

1. Greater operational and commercial autonomy for the business units
   Our business units were focused on the expansion of the Ebitda margin and the recovery of cash generation, with plans centered on the challenges, necessary investments and projects for the transformation of each individual operation. The Holding Company took on the role of defining the business guidelines and objectives, which took the shape of proprietary planning developed by Natura &Co Latin America - which, in 2024, revisited its strategy and vision based upon the concept of Regeneration during 2024, and by Avon International which remains committed to the strategy of seeking greater profitability in the regions in which it operates.
   
   
2. Simplification of the Holding Company structure:
   We have continued with the restructuring of the functions to further reduce the involvement of the Holding Company in the day-to-day operations of the business units. In 2024, with this in mind, we reduced corporate expenses by 25.6%. We also concluded the cancellation of the company’s registration with the United States Securities and Exchange Commission (SEC), which the Board of Directors approved in 2024, whilst we continued to trade NTCO3 shares on the Brazilian market.
   
   
3. Strengthening of the capital structure
   The recovery of margins, the focus on cash generation, and the efforts made to strengthen our brands in terms of market share and performance remain priorities for the business units. The resumption of the growth journey in Latin America was driven by the strong performance of the Natura brand in Brazil, with positive trends being noted in the Hispanic countries, as well. At Avon International, we continued to focus on the strategy of prioritizing strategic markets, modernization of the Relationship Selling model, the centrality of the consumers, an omnichannel vision, strengthening of the brand, and technological and operational transformation.
   
   
4. A focus on projects that create value
   Innovation, digitization of the commercial relations, and actions focused on the omnichannel journey were amongst the Company's investment priorities, with the focus being on projects capable of unlocking value generation and enabling renewed growth. In Latin America, we experienced a record year in relation to the allocation of capital tied to the Wave Two initiative, moving forward with the combination of the Natura and Avon businesses in the region, allowing us to achieve the best results which were observed in Brazil, Chile, Peru and Colombia, with an impact on the quality of deliveries, the satisfaction of consumers and Beauty Consultants, and the efficiency of the product allocation processes. The process will be implemented in Mexico and Argentina in 2025. At Avon International, our revitalization plan has continued apace, with the teams dedicating themselves to investing in the regeneration of the brand in key markets, whilst focusing on the regions with greatest potential.

Avon Products Inc. - Chapter 11

In the United States (a market where we have not pursued commercial activities since 2016), the Chapter 11 process pursued by Avon Products Inc. (“API”), a non-operational holding company of the Avon Group, was approved in 2024, with the aim of restructuring the company’s operations and its creditor relations. In December 2024, under the supervision and final approval of the United States’ Justice Department, we announced a global transaction agreement with API’s Unsecured Debtors Committee and the purchase of the brand’s operations outside the United States, by means of a US$ 125 million supply of credit. Under the terms of the agreement, we paid US$ 34 million to the estate of the API debtors in cash, as well as the total sum of the loans in the ‘DIP’ (debtor-in-possession) category - US$ 43 million. Natura has also agreed to waive all the secured and unsecured credits it had held against the API debtors, except for the US$ 125 million used as consideration for our purchase of the ex-United States operations.