Natura &Co Holding SA (NTCO) 2023 Q2 法說會逐字稿

Good morning, and welcome to Natura &Co's Second Quarter 2023 Earnings. On this call today are Fabio Barbosa, CEO of Natura &Co; and Guilherme Castellan, CFO of Natura &Co; Joao Paulo Ferreira, CEO of Natura &Co Latin America will join for the Q&A session. The presentation they will be referring to during this call is available on Natura &Co Investor Relations website.

早上好，歡迎閱讀 Natura &Co 2023 年第二季度收益。 Natura &Co 首席執行官法比奧·巴博薩 (Fabio Barbosa) 出席了今天的電話會議； Guilherme Castellan，Natura &Co 首席財務官； Natura &Co 拉丁美洲首席執行官若昂·保羅·費雷拉 (Joao Paulo Ferreira) 將參加問答環節。他們在本次電話會議中將參考的演示文稿可在 Natura &Co 投資者關係網站上找到。

I will now hand over to Fabio Barbosa.

現在我將把發言權交給法比奧·巴博薩。

Good morning or good afternoon to all of you, and thank you for joining us today. Very happy to be with you again.

大家早上好或下午好，感謝您今天加入我們。很高興再次和你在一起。

Natura &Co continues to deliver on it's road map in the second quarter with a performance that was broadly in line with first quarter. We posted another quarter of top line growth at constant currency with sales up 1.9%, and we also posted a significant improvement in adjusted EBITDA margin of 230 points. This was mainly driven by a solid 430 basis point expansion in gross margin, benefiting from mix effects, partially offset by investment and inflation.

Natura &Co 在第二季度繼續實現其路線圖，業績與第一季度基本一致。按固定匯率計算，我們的營收又實現了一個季度的增長，銷售額增長了 1.9%，調整後的 EBITDA 利潤率也顯著提高了 230 個點。這主要是由於受益於混合效應，毛利率穩定增長了 430 個基點，但部分被投資和通脹所抵消。

Net income continues to be impacted by high financial expense, which will be addressed upon closing of the sale of Aesop. We expect closing to occur in third quarter 2023. The proceeds from the sale of Aesop will strengthen and deleverage Natura &Co's balance sheet, freeing up resources and sharpen our focus on our strategic priorities with discipline.

淨利潤繼續受到高額財務費用的影響，這一問題將在伊索出售結束後解決。我們預計交易將於 2023 年第三季度完成。出售 Aesop 的收益將加強和去槓桿 Natura &Co 的資產負債表，釋放資源並加強我們對戰略重點的關注。

We continue to see good momentum of the Natura brand in Latin America. Avon International fundamental continue to improve as it further adjusted it's commercial model while the Body Shop faced persistent top line challenge. We remain strongly focused on cash conversion. And this quarter, we saw further improvement in operating working capital dynamics, partially offsetting seasonal cash consumption in the quarter. We will continue to drive our cash conversion improvement, notably among other things, through the working capital and net CapEx optimization.

我們繼續看到 Natura 品牌在拉丁美洲的良好勢頭。雅芳國際進一步調整商業模式，基本面繼續向好，而Body Shop則面臨持續的營收挑戰。我們仍然強烈關注現金轉換。本季度，我們看到運營營運資金動態進一步改善，部分抵消了本季度的季節性現金消耗。我們將繼續推動現金轉化率的改善，特別是通過營運資本和淨資本支出優化。

We are confident in our ability to capture further opportunities on this front, although we may see volatility from quarter-to-quarter. Q2 '23 was also a landmark quarter for us as we kicked off Wave 2 of the Natura Avon integration in Latin America, beginning with Peru and Colombia, and we are very pleased with the initial results. We saw a meaningful acceleration of cross-selling between brands and more importantly, significant CFT productivity growth, resulting in greater prosperity for our beauty consultants who benefit from a richer and more compelling offer that features the best of both brands.

儘管我們可能會看到每個季度的波動，但我們對在這方面抓住更多機會的能力充滿信心。 23 年第二季度對我們來說也是一個具有里程碑意義的季度，因為我們從秘魯和哥倫比亞開始在拉丁美洲啟動了第二波 Natura Avon 整合，我們對初步結果非常滿意。我們看到品牌之間的交叉銷售顯著加速，更重要的是，CFT 生產力顯著增長，為我們的美容顧問帶來了更大的繁榮，他們受益於更豐富、更引人注目的產品，這些產品融合了兩個品牌的優點。

Our focus now turns to the rollout of Wave 2 in Brazil. We will build on the initial learning from Peru and Colombia, and we are confident that they will support us to deliver strong results for our biggest market in the region and those that will follow.

我們現在的重點轉向第二波在巴西的推出。我們將以秘魯和哥倫比亞的初步經驗為基礎，相信他們將支持我們為該地區最大的市場及後續市場取得強勁成果。

We also continue to make advance in ESG, which remains in the forefront of our strategy. I am pleased to announce that Natura &Co obtained approval from the science brand-based targets initiatives for it's ambitious plans to reduce absolute scopes 1, 2 and 3 greenhouse emissions by 42% by 2030 from a 2020 base year. Our target is in line with the 1.5% decrease trajectory required by the [payers] agreement.

我們還繼續在 ESG 方面取得進展，這仍然是我們戰略的前沿。我很高興地宣布，Natura &Co 獲得了基於科學品牌的目標倡議的批准，因為其雄心勃勃的計劃是到 2030 年將 1、2 和 3 類溫室氣體絕對排放量從 2020 年基準年減少 42%。我們的目標符合[付款人]協議要求的 1.5% 的下降軌跡。

With that, let me now hand over to Gui to comment on our Q2 performance in greater detail. Gui?

現在，讓我請 Gui 更詳細地評論我們第二季度的表現。桂？

Thank you, Fabio, and hello to everyone. A quick note before going to the numbers to say that Aesop has been classified as discontinued activities, pending the closing of the sale to L'Oreal. So the Q2 operating numbers exclude it's performance and the comparable 2022 numbers have been restated accordingly.

謝謝你，法比奧，大家好。在查看數據之前，請先簡要說明一下，伊索已被歸類為已停止的活動，等待完成對歐萊雅的出售。因此，第二季度的運營數據不包括其業績，並且 2022 年的可比數據已相應重述。

Net income includes discontinued activities. I'll start with Natura &Co's consolidated revenues on Slide 5, which stood at BRL 7.8 billion and grew by 1.9% in constant currency. In reais, sales were down 4.1%, reflecting the depreciation of some currencies versus the real. We will look at the performance by view shortly. But in a nutshell, we posted solid constant currency growth at Natura brand in LatAm, notably in Brazil.

淨利潤包括已終止的活動。我將從幻燈片 5 中 Natura &Co 的合併收入開始，該收入為 78 億雷亞爾，按固定匯率計算增長了 1.9%。以雷亞爾計算，銷售額下降 4.1%，反映了某些貨幣相對雷亞爾的貶值。我們很快就會通過視圖來查看性能。但簡而言之，我們在拉丁美洲（尤其是巴西）的 Natura 品牌實現了穩定的貨幣穩定增長。

Avon's International's fundamentals improved again with another quarter of some growth in the beauty category. The Body Shop continued to face challenges in the top line with trends broadly similar to the previous quarters as core channels posted a mid-single-digit decrease while The Body Shop at Home continued it's steep decline.

雅芳國際的基本面再次改善，美容品類又實現了四分之一的增長。 The Body Shop 的收入繼續面臨挑戰，其趨勢與前幾個季度大致相似，核心渠道出現中個位數下降，而 The Body Shop at Home 則繼續大幅下降。

Finally, as expected, home and style is still showing trend down amidst the rollout of Wave 2. We turn to the adjusted EBITDA margin on Slide 6, which stood at 9.7% in Q2, marking a strong improvement of 230 bps year-on-year with expansion across all businesses. These reflect different moving parts. With a strong 430 bps improvement in gross margin, continued strict cost control, notably at holding company level and at The Body Shop.

最後，正如預期的那樣，在第二波浪潮的推出中，家居和時尚仍然呈現下降趨勢。我們轉向幻燈片 6 的調整後 EBITDA 利潤率，第二季度為 9.7%，同比大幅提高 230 個基點今年所有業務均得到擴展。這些反映了不同的運動部件。毛利率大幅提高 430 個基點，持續嚴格的成本控制，特別是在控股公司層面和 The Body Shop。

In terms of BUs, the main positive impacts were: first, a strong margin expansion at Natura &Co LatAm, up 250 bps, mainly driven by higher gross margin. Second, an improving margin at Avon International, up 110 bps, also boosted by gross margin improvements. Third, a profitability improvement at The Body Shop of 210 bps compared to the same period last year, driven by slight gross margin expansion and SG&A excluding depreciation efficiencies, notably on rental costs amid the footprint optimization process as well as ongoing operational costs. These were partially offset by 3 factors: continued investments in the Natura brands; deleverage at Avon Hispanic LatAm; and finally, investments in lead markets and phase of expenses at Avon International.

就業務單元而言，主要的積極影響是：首先，Natura &Co LatAm 的利潤率強勁擴張，增長了 250 個基點，主要是由於毛利率上升。其次，雅芳國際 (Avon International) 的利潤率有所改善，增長了 110 個基點，這也受到毛利率改善的推動。第三，The Body Shop 的盈利能力較去年同期提高了210 個基點，這得益於毛利率小幅增長和SG&A（不包括折舊效率），特別是佔地面積優化過程中的租賃成本以及持續運營成本。這些因素被 3 個因素部分抵消：對 Natura 品牌的持續投資；雅芳拉美公司的去槓桿化；最後是對主要市場的投資和雅芳國際的支出階段。

On Slide 7, we focus on net income and underlying net income. Net income in Q2 was a negative BRL 732 million, broadly in line with the same period last year. Higher EBITDA was more than offset by higher investments in transformation and integration notably at Avon International and higher losses at discontinued operations, particularly impacted by lower margin at Aesop.

在幻燈片 7 中，我們重點關注淨利潤和基礎淨利潤。第二季度淨利潤為負 7.32 億雷亞爾，與去年同期基本持平。較高的 EBITDA 被轉型和整合方面的較高投資（尤其是雅芳國際）以及終止經營業務的較高虧損（尤其是受到伊索利潤率較低的影響）所抵消。

Q2 '23 underlying net income, which is net income excluding transformational costs, restructuring costs, discontinued operations and PPA effects, was a loss of nearly BRL 219 million. This compares to a loss of BRL 262 million in the same period in 2022. You see the bridge on this slide with the main impacts coming from transformation and integration costs for BRL 239 million, restructuring costs, discontinued operations and other effects from a little over BRL 157 million, and PPA effect for almost BRL 117 million. Let's turn to Slide 8 to our cash flow.

23 年第 2 季度的基本淨利潤（不包括轉型成本、重組成本、終止經營業務和購電協議影響的淨利潤）虧損近 2.19 億雷亞爾。相比之下，2022 年同期的損失為2.62 億雷亞爾。您可以看到這張幻燈片上的橋樑，其主要影響來自2.39 億雷亞爾的轉型和整合成本、重組成本、停業運營以及其他影響。 1.57 億雷亞爾，PPA 效應約為 1.17 億雷亞爾。讓我們轉向幻燈片 8 的現金流。

In Q2 '23, free cash flow from continuing operations was an outflow of BRL 965 million. This compares to an outflow of BRL 611 million in Q2 of the previous year. The deterioration is mainly related to high leverage and interest rates, which increased our financial expenses by BRL 242 million and by FX headwinds, which represented an outflow of BRL 29 million versus an inflow of BRL 134 million in the same period last year.

2023 年第二季度，持續經營業務產生的自由現金流流出為 9.65 億雷亞爾。相比之下，去年第二季度的資金流出量為 6.11 億雷亞爾。這種惡化主要與高槓桿率和利率有關，這使我們的財務費用增加了2.42 億雷亞爾，而外匯逆風導致我們的財務費用流出2,900 萬雷亞爾，而去年同期則流入1.34 億雷亞爾。

It's also important to highlight that Q2 '22 benefited from a positive one-off of BRL 136 million related to a legal dispute at Avon International. Excluding the one-off in Q2 last year, free cash flow to firm would represent an outflow of BRL 303 million versus BRL 326 million in Q2 '22. This was mainly driven by, on the one hand, an improvement in operating working capital with inventories and accounts receivable consuming less cash compared to the same period last year and accounts payable releasing more cash versus Q2 '22.

同樣重要的是要強調，22 年第二季度受益於與雅芳國際公司法律糾紛相關的 1.36 億雷亞爾的一次性正收益。排除去年第二季度的一次性現金流，公司自由現金流將流出 3.03 億雷亞爾，而 2022 年第二季度為 3.26 億雷亞爾。一方面，這主要是由於運營營運資金的改善，與去年同期相比，庫存和應收賬款消耗的現金減少，而應付賬款釋放的現金與 22 年第二季度相比增加。

Operating working capital improved at all BUs, even with solid growth of the Natura brand and consumed BRL 117 million compared to BRL 674 million in the same period last year. On the other hand, these effects were partially offset by the other assets and liabilities line, mainly due to further investments in transformation and restructuring plans.

儘管 Natura 品牌穩步增長，但所有業務部門的營運資本均有所改善，消耗了 1.17 億雷亞爾，而去年同期為 6.74 億雷亞爾。另一方面，這些影響被其他資產和負債項目部分抵消，主要是由於轉型和重組計劃的進一步投資。

In addition, CapEx cash consumption increased by BRL 87 million year-on-year, giving phases between quarters. On Slide 9, we look at our liquidity profile. We ended the quarter with a cash position of BRL 3.7 billion. Our net debt at the end of the quarter was BRL 10 billion, and the net debt-to-EBITDA ratio stood at 4.17x, up from 3.96x at the end of Q1 and 2.46x 1 year ago.

此外，資本支出現金消耗同比增加 8700 萬雷亞爾，分季度進行。在幻燈片 9 中，我們查看了我們的流動性狀況。本季度結束時，我們的現金頭寸為 37 億雷亞爾。截至本季度末，我們的淨債務為 100 億雷亞爾，淨債務與 EBITDA 比率為 4.17 倍，高於第一季度末的 3.96 倍和一年前的 2.46 倍。

Despite improving EBITDA year-on-year, the increase in net debt versus the previous quarter was mainly due to increasing high financial expenses and seasonal cash consumption. As you know, proceeds from the sale of Aesop, which we expect to close in Q3, will be sufficient to allow us to largely eliminate our debt and put us in a net cash position.

儘管 EBITDA 同比有所改善，但淨債務較上季度增加主要是由於高額財務費用和季節性現金消耗增加。如您所知，我們預計將在第三季度完成出售伊索的收益，這將足以使我們在很大程度上消除債務並使我們處於淨現金狀況。

As you see on the second chart, our cash position of BRL 3.7 billion is higher than the total of our debt payments through 2027. The average maturity of our debt is 6.2 years, and we face limited debt repayments until 2028. Note that post closing of the quarter, we repaid in August most of Avon's 2043 bonds through a tender offer for an amount of $246 million. This repayment is an important step of our continuing liability management strategy as it removes certain restrictive covenants and improves the overall cost of debt.

正如您在第二張圖表中看到的，我們的現金頭寸為37 億雷亞爾，高於我們到2027 年的債務支付總額。我們的債務平均期限為6.2 年，到2028 年我們面臨的債務償還有限。請注意，交割後本季度，我們在 8 月份通過要約收購償還了雅芳 2043 債券的大部分，金額為 2.46 億美元。此次償還是我們持續負債管理戰略的重要一步，因為它消除了某些限制性契約並提高了總體債務成本。

Let's turn now to our performance by business unit beginning on Slide 11 with Natura &Co LatAm. Total net sales were up by 5.8% in constant currency and down 1.7% in reais. This was driven by solid double-digit growth of 19.5% in constant currency at the Natura brands, while the Avon brand was down mid-single digit in beauty category and the newly renamed Home Style category, previously called Fashion Home, saw a sharper decline.

現在讓我們從幻燈片 11 中的 Natura &Co LatAm 開始，按業務部門劃分的業績。按固定匯率計算，總淨銷售額增長 5.8%，按雷亞爾計算下降 1.7%。這是由Natura 品牌以固定匯率計算19.5% 的兩位數穩健增長推動的，而雅芳品牌在美容品類中出現中個位數下降，而新更名的家居風格品類（之前稱為時尚家居）則出現了更大幅度的下滑。

The Natura brand continued to post strong momentum with year-on-year growth of 14.7% in Brazil. Growth was supported by price increases and improved mix, and it also benefited in particular from strong campaigns for Mother's Day and Valentine's Day.

Natura品牌繼續保持強勁勢頭，在巴西同比增長14.7%。增長得益於價格上漲和產品組合的改善，尤其受益於母親節和情人節的強勁促銷活動。

In Hispanic LatAm, net revenue was up by 30% in constant currency and 7.7% in reais. Growth excluding Argentina was mainly driven by an acceleration in Peru and Colombia, boosted by the rollout of Wave 2 in those countries. The average available consultant base reached 1.1 million in Q2 '23, down 7.9% year-on-year. Including Peru and Colombia, beauty consultants in the base, the distribution channel, we have shown a steeper decrease amid the rollout of Wave 2 in those regions, as expected.

在拉丁美洲拉美地區，淨收入按固定匯率計算增長了 30%，按雷亞爾計算增長了 7.7%。不包括阿根廷在內的增長主要是由秘魯和哥倫比亞的加速推動的，這兩個國家的第二波浪潮的推出推動了這些國家的增長。 2023 年第二季度，平均可用顧問人數達到 110 萬人，同比下降 7.9%。包括秘魯和哥倫比亞，基地的美容顧問，分銷渠道，我們在這些地區推出第二波的過程中出現了更大幅度的下降，正如預期的那樣。

At the Avon brand in LatAm, net revenue in beauty category was down 4% in constant currency. In Brazil, net revenue showed a slight decrease of 1.8%, impacted by the expected and temporary hit in the distribution channel amid preparations for the rollout of Wave 2 with further portfolio optimization and an increase enables minimum order, among other adjustments.

在拉丁美洲的雅芳品牌，按固定匯率計算，美容品類的淨收入下降了 4%。在巴西，淨收入小幅下降 1.8%，這是由於準備推出第二波產品組合、進一步優化產品組合、提高最低訂單量等調整，導致分銷渠道受到預期和暫時的打擊。

in Hispanic markets, net revenue decreased by 5.6% in constant currency. As a consequence of the total number of available representatives decreasing 23.1% year-on-year, as expected amid preparation for Wave 2. In the Home Style category, Avon posted a steeper decline of 36.9% in constant currency as we continue to execute our strategy to focus on the beauty category.

在西班牙市場，按固定匯率計算，淨收入下降了 5.6%。正如第二波準備工作所預期的那樣，可用代表總數同比減少了 23.1%。在家居風格類別中，隨著我們繼續執行我們的政策，雅芳按固定匯率計算下降了 36.9%。策略聚焦美妝品類。

On Slide 12, we turn to Natura &Co LatAm's Q2 adjusted EBITDA and margin. As shown in the graph, adjusted EBITDA grew by strong 20.8% to BRL 727 million from BRL 601.7 million in the same period in the last year. Adjusted EBITDA margin was up by a solid 250 bps to 13.3%. Margin expansion was driven by 510 bps improvement in gross margin, benefiting from price increases and richer category mix. The main driver of improved gross margin was Avon Brazil. This was partially offset by SG&A investments and deleverage at Avon Hispanic LatAm, as expected.

在幻燈片 12 上，我們轉向 Natura &Co LatAm 第二季度調整後的 EBITDA 和利潤率。如圖所示，調整後 EBITDA 強勁增長 20.8%，從去年同期的 6.017 億雷亞爾增至 7.27 億雷亞爾。調整後 EBITDA 利潤率穩定增長 250 個基點，達到 13.3%。得益於價格上漲和更豐富的品類組合，毛利率提高了 510 個基點，推動了利潤率擴張。毛利率改善的主要推動力是雅芳巴西。正如預期的那樣，這被雅芳拉美拉丁美洲公司的銷售管理、行政管理投資和去槓桿化部分抵消。

The investments are mainly related to Natura's marketing and R&D expenses amid the rollout of Wave 2. Let's now move to Avon International on Slide 14. Revenue was broadly stable versus the same period last year, down 1.3% in constant currency and down 8.1% in reais.

這些投資主要與第二波推出期間Natura 的營銷和研發費用有關。現在讓我們轉向幻燈片14 上的雅芳國際。收入與去年同期相比基本穩定，按固定匯率計算下降1.3%，按固定匯率計算下降8.1%。雷亞爾。

In terms of categories, the beauty category posted another quarter of growth, up 3% despite the expected hit in distribution channel driven by fragrance and color. The Home and Style category for it's part, continue last quarter's trend with a steep decline. Adjusted EBITDA margin was 4.4%, up 110 bps year-on-year.

就品類而言，儘管香水和彩妝產品的分銷渠道預計會受到衝擊，但美容品類仍實現了另一個季度的增長，增長了 3%。家居和時尚品類則延續了上季度的趨勢，但出現了急劇下降。調整後 EBITDA 利潤率為 4.4%，同比增長 110 個基點。

Improving profitability was driven by gross margin expansion of 460 bps driven by carryover of price increases and a positive product mix to improve contribution of innovation and cult products. This was partially offset by investments in lead markets and phasing of expenses. Cash conversion was also a highlight given the continuous working capital improvements.

盈利能力的提高是由於價格上漲的結轉以及積極的產品組合以提高創新和熱門產品的貢獻所推動的毛利率擴大了 460 個基點。這被主要市場的投資和分階段支出所部分抵消。鑑於營運資本的持續改善，現金轉換也是一個亮點。

On Slide 16, we now move to The Body Shop. Q1 net revenues declined by 12.5% at constant currency and 12% in reais. Combined sales of core business distribution channels, in other words, stores, e-commerce and franchisees, show a mid-single-digit decline in constant currency, a slight deterioration compared to the trend observed in the previous quarter.

在幻燈片 16 上，我們現在轉到 The Body Shop。第一季度淨收入按固定匯率計算下降 12.5%，按雷亞爾計算下降 12%。核心業務分銷渠道（即商店、電子商務和特許經營商）的合併銷售額按固定匯率計算呈中個位數下降，與上一季度觀察到的趨勢相比略有惡化。

Revenue was also impacted by a decrease at The Body Shop at Home, which continued it's steep decline. Despite the operating deleverage, adjusted EBITDA margin improved by 210 bps to 5.4%, driven by gross margin improvement and strict cost control in line with the previous quarters. The year-on-year improvement in SG&A, excluding depreciation, was mainly driven by rental costs as The Body Shop continues to optimize it's footprint as well as employees' expenses following the restructuring announced earlier this year.

The Body Shop at Home 的收入也受到了影響，該公司繼續大幅下滑。儘管經營去槓桿化，但在毛利率改善和與前幾個季度保持一致的嚴格成本控制的推動下，調整後 EBITDA 利潤率仍提高了 210 個基點至 5.4%。 SG&A（不包括折舊）的同比改善主要是由於 The Body Shop 繼續優化其占地面積而導致的租金成本以及今年早些時候宣布的重組後的員工費用。

As mentioned last quarter, The Body Shop continues to focus on structural cost reduction and strict cost containment measures to drive a culture of cost discipline throughout the organization as we work to improve net revenue strengths and focus on margin expansion and cash generation in 2023 and beyond.

正如上季度提到的，The Body Shop 繼續專注於結構性成本削減和嚴格的成本控制措施，以在整個組織內推動成本紀律文化，同時我們致力於提高淨收入優勢並專注於2023 年及以後的利潤擴張和現金生成。

Let me now hand back to Fabio for his concluding remarks.

現在讓我請法比奧作總結髮言。

Thank you, Gui. I will conclude now on Slide 18 with our key takeaways. First, Wave 2 of the integration of Natura and Avon in Latin America is underway. We saw encouraging results from the launch of Wave 2 in Peru and Colombia, and we will take those learnings to make a success of the rollout in Brazil, which begins now in the third quarter.

謝謝你，桂。我現在將在幻燈片 18 中總結我們的主要觀點。首先，Natura 和雅芳在拉丁美洲的第二波整合正在進行中。我們在秘魯和哥倫比亞推出了 Wave 2，取得了令人鼓舞的成果，我們將利用這些經驗教訓，使在巴西的推出取得成功，該計劃將於第三季度開始。

Second, we are continuing to simplify our operations and to turn around our international assets. Third, the sale of Aesop, which we expect to close still in the third quarter, we will enable significant deleveraging and free up resources to invest with discipline in our strategic priorities and unlocking value for our shareholders.

其次，我們繼續簡化運營並周轉我們的國際資產。第三，我們預計仍將在第三季度完成伊索的出售，這將使我們能夠大幅去槓桿化並釋放資源，以便有紀律地投資於我們的戰略重點，並為股東釋放價值。

And fourth, our strategic priorities are clear, and the first 2 quarters of 2023 results give us confidence that we are on the right track. We will continue to be focused on improving profitability and cash conversion, though we may see some volatility from 1 quarter to the next. All this should unlock sustainable shareholder value driven by our triple bottom line. Thank you very much for your attention, and Gui and JP and I are now happy to take your questions. Thank you.

第四，我們的戰略重點很明確，2023 年前兩個季度的業績讓我們相信我們正走在正確的軌道上。我們將繼續專注於提高盈利能力和現金轉換率，儘管我們可能會看到從一季度到下一季度會出現一些波動。所有這些都應該釋放由我們的三重底線驅動的可持續股東價值。非常感謝您的關注，我和 Gui、JP 現在很樂意回答您的問題。謝謝。

We will now begin our question-and-answer session. (Operator Instructions) Our first question comes from Danniela Eiger with XP Investments.

我們現在將開始問答環節。 （操作員說明）我們的第一個問題來自 XP Investments 的 Danniela Eiger。

Congrats on the results. I'll leave my Wave 2 questions for tomorrow's call. So I had 2 regarding the results. The first one is regarding restructuring costs. They surprised us in this quarter in terms of level across all BUs. So it would be interesting to know from you guys how we should think about this line behaving going forward, how like if we should see some deceleration into the second half or if it should be sustained at current levels? And my second one is regarding the Home and Style optimization and when do you expect that to stabilize in results?

祝賀結果。我會將第二波問題留到明天的電話會議。所以我對結果有 2 個想法。第一個是關於重組成本。本季度所有業務部門的水平讓我們感到驚訝。因此，從你們那裡了解我們應該如何看待這條線的未來表現會很有趣，如果我們應該看到下半年有所減速，或者是否應該維持在目前的水平，情況會怎樣？我的第二個問題是關於家居和風格的優化，您預計什麼時候結果會穩定下來？

Danni, thank you for your question. This is Gui. I'm going to take the first part of the question, talk a little bit about the second part internationally, and then Joao can talk a little bit about the process in LatAm.

丹尼，謝謝你的提問。這是桂。我將回答問題的第一部分，在國際上談談第二部分，然後若奧可以談談拉丁美洲的進程。

And by the way, I appreciate you leaving the questions for Wave 2 for tomorrow's call. That's the intention. So you're right. I think, again, as expected, it's important to say, as trend this quarter, we had a high number of transformation and restructuring costs in the base. If you look at it, it's mainly coming from Avon International. We have been saying already for a while that Avon International is going through a big restructuring right? Especially in order to improve profitability by reducing the central costs, right? And of course, there may be volatility during the quarters depending on the pace and execution of our plan.

順便說一句，我感謝您將第二波的問題留到明天的電話會議。這就是目的。所以你是對的。我認為，正如預期的那樣，重要的是，按照本季度的趨勢，我們的基地有大量的轉型和重組成本。你看一下，主要來自雅芳國際。我們已經說過一段時間了，雅芳國際正在經歷一次重大重組，對嗎？特別是為了通過降低中心成本來提高盈利能力，對吧？當然，根據我們計劃的節奏和執行情況，這些季度可能會出現波動。

If you go to the release, you will see there that basically, we're saying that 40% of those transformational costs is coming from severance, 20% is coming basically from the dual running of our R&D facility in Suffern. As you know, we are shutting that down and of course, moving to Cajamar. And the remaining is related to the size of line reduction as we put it there.

如果您查看發布版本，您會發現基本上，我們說這些轉型成本的 40% 來自遣散費，20% 基本上來自我們位於薩芬的研發設施的雙重運行。如您所知，我們正在關閉該項目，當然，我們也會搬到卡哈馬爾。其餘的與我們所說的線路減少的大小有關。

So you should expect to see continuing transformational costs coming across the board, derived from other BUs as LatAm goes through the El transformation as The Body Shop continues to deliver their savings agenda. And of course, as I just mentioned, Avon International. And that is, of course, focusing on a more sustainable and higher EBITDA margin in the future.

因此，隨著 The Body Shop 繼續實施其節約議程，LatAm 正在經歷 El 轉型，您應該會看到持續全面的轉型成本，這些成本來自其他業務部門。當然，正如我剛才提到的，雅芳國際。當然，那就是關注未來更可持續和更高的 EBITDA 利潤率。

Now going to your second question, Home Style had a big hit in actually both LatAm and international this quarter. So if you see the CFT revenues for Avon International, it grew low single digits this quarter. And of course, we had a significant reduction, double-digit reduction in Home Style as part of the plan as we have been communicated that you should expect to see that volatility across the board, especially for the next couple of quarters as we continue to execute our plan internationally.

現在回答你的第二個問題，家居風格本季度實際上在拉丁美洲和國際市場都大受歡迎。因此，如果你看到雅芳國際 (Avon International) 的 CFT 收入，就會發現本季度它的增長幅度較低。當然，作為計劃的一部分，我們對家居風格進行了大幅削減，兩位數的削減，因為我們已獲悉，您應該預計會看到全面的波動，特別是在接下來的幾個季度，因為我們將繼續在國際上執行我們的計劃。

Now I'm going to pass to Joao so he can talk a little bit about LatAm.

現在我要轉到若昂，以便他可以談談拉丁美洲。

Danniela, JP here. As regards Home and Fashion here, the portfolio has been significantly reduced already across all of our operations. However, there is still some slow movers in the inventories, which are flowing out through the second half. So by and large, it should stabilize throughout the second half.

丹妮拉，太平紳士在這裡。就家居和時尚而言，我們所有業務的產品組合已大幅減少。然而，庫存仍有一些緩慢流動，這些庫存將在下半年流出。所以總的來說，整個下半場應該會穩定下來。

Our next question comes from Irma Sgarz with Goldman Sachs.

我們的下一個問題來自高盛的 Irma Sgarz。

I wanted to just ask about The Body Shop. I know your focus there remains on profitability and cash generation. But how should we think about the revenue trajectory for this trend? Into the back half on the previous call, you had talked about stabilization into the second half in terms of revenue, constant currency revenue trends. Could you share some of -- and so could you just sort of confirm what you're thinking for the second half is? And could you just sort of share maybe some high-level first actions that Ian was focused on over the last couple of months? And I know you're in constant dialogue. So just love to hear what's been coming out of that?

我只是想問一下 The Body Shop 的情況。我知道您的重點仍然是盈利能力和現金生成。但我們應該如何看待這一趨勢的收入軌跡呢？在上次電話會議的後半段，您談到了下半年收入的穩定、貨幣收入趨勢的穩定。您能否分享一些——那麼您能否確認一下您對下半年的想法？您能否分享一下 Ian 在過去幾個月中關注的一些高層首要行動？我知道你們一直在對話。所以只是想听聽結果如何？

And then just a very small second question. In the general expenses for Avon International, you had a 10% increase, and you talked about the phasing of expenses. Could you just explore that point to touch more and again, also talk about how we should think about this line going forward?

然後是第二個問題。在雅芳國際的一般開支中，你們增加了10%，並且你們談到了分階段的開支。您能否就這一點進行探討，多多接觸，並談談我們應該如何思考這條線的未來？

Thank you, Irma. Thank you for your question. Yes, I'll start talking about The Body Shop and then we go to the SG&A of Avon International in particular.

謝謝你，艾爾瑪。謝謝你的問題。是的，我將首先討論 The Body Shop，然後我們特別討論雅芳國際 (Avon International) 的 SG&A。

Yes. So we had still a challenging quarter in terms of top line for The Body Shop. So you saw that our core distribution channels basically had a reduction of mid-single digits in the quarter. It's worse than the Q1, but not significantly worse. And we continue to see basically The Body Shop at Home with a very steep decline, right? And that part of the equation, of course, as it continues to decline more and more, you should start to see, of course, a lower impact in the overall size of revenues of The Body Shop.

是的。因此，就 The Body Shop 的營收而言，我們這個季度仍然充滿挑戰。所以你看到我們的核心分銷渠道在本季度基本上出現了中個位數的減少。它比 Q1 差，但也沒有差很多。我們繼續看到 The Body Shop at Home 的銷量急劇下降，對吧？當然，隨著這一部分繼續下降，您應該開始看到 The Body Shop 整體收入規模的影響較小。

But as you mentioned, look, this is a new chapter for The Body Shop. And again, we have focused a lot on a few priorities, right, since Ian arrived a few months ago. Basically, there are 4 fronts that we are working. The first one is channel, right? And again, there is a strong focus from the team on the rebalancing of the channel distribution to really meet beauty consumers. This is something that Fabio has been talking a lot as well in the calls about the change in consumer behavior, where they used to shop before, where they are shopping right now, and of course, how we try to optimize our store fleet.

但正如您提到的，看，這是 The Body Shop 的新篇章。再說一次，自從幾個月前伊恩到達以來，我們一直專注於一些優先事項，對吧。基本上，我們正在四個方面開展工作。第一個是頻道，對嗎？同樣，團隊非常注重渠道分銷的重新平衡，以真正滿足美容消費者的需求。法比奧在電話中也多次談到消費者行為的變化，他們以前在哪裡購物，現在在哪裡購物，當然還有我們如何優化我們的商店隊伍。

And of course, our franchisee business as well to meet the best of this demand, right? Digital is something that is a big focus for the team and a big area of expertise of Ian as well. Ian has been focusing a lot with the team, right, to try to speed up and accelerate digital sales for The Body Shop and should expect to see, of course, less focus, much less focus and a big deprioritization on The Body Shop at Home channel, which, by the way, was never the core channel for The Body Shop.

當然，我們的加盟商業務也能最好的滿足這種需求，對嗎？數字化是團隊的重點關注點，也是 Ian 的一大專業領域。 Ian 一直在團隊中投入很多精力，是的，試圖加速 The Body Shop 的數字銷售，當然，應該會看到越來越少的關注，以及 The Body Shop at Home 的優先級大幅下降。順便說一句，該頻道從來都不是The Body Shop 的核心頻道。

The second one is product, right? So again, I think that The Body Shop is known already for a long time to launch very high-quality products, but there is a sense of basically revamping a little bit the R&D and of course, to focus more in some categories such as skin care while continuing to defending Bath & Body.

第二個是產品，對嗎？再說一次，我認為 The Body Shop 長期以來一直以推出非常高質量的產品而聞名，但有一種基本上對研發進行一點改造的感覺，當然，更多地關注某些類別，例如皮膚護理，同時繼續捍衛Bath & Body。

And as you know, Irma, The Body Shop usually has a very strong last quarter in the year, in Q4. One of the reasons for that, of course, is the holidays, but mainly pushed by the Christmas gift, right? That we do. And one of the strategies right now that we are doing in The Body Shop, by the way, copying what JP and the team has done a lot in LatAm, is to bring the gifting occasion all year around, right? So from Mother's Day, Father's Day, Valentine's Day and so on.

如您所知，Irma、The Body Shop 通常在今年最後一個季度（即第四季度）表現非常強勁。原因之一當然是假期，但主要是聖誕禮物推動的，對吧？我們這樣做。順便說一句，我們現在在 The Body Shop 所做的策略之一就是效仿 JP 和團隊在拉丁美洲所做的很多事情，就是全年舉辦送禮場合，對吧？所以從母親節、父親節、情人節等等。

The brand is something that we already have been talking a little bit about investments on reinvigoration of the brand and establishing a clear point of differentiation. And finally, it's the operational model. As I explained in my previous answer, we'll continue to find savings, especially in nonworking money for The Body Shop in the next 2 quarters in order to continue to optimize the margin. So we don't give guidance in terms of revenue.

我們已經討論過品牌重振品牌和建立明確差異化點的投資。最後是運營模式。正如我在之前的回答中所解釋的，我們將繼續尋求節省，特別是在接下來的兩個季度中 The Body Shop 的非工作資金，以繼續優化利潤率。因此，我們不提供收入方面的指導。

But again, you should continue to see, again, challenging trends, of course, in the short term. But we expected that as we see good results coming from those initiatives that I saw, we expect to see some stabilization of the revenues coming soon for The Body Shop.

但同樣，你應該繼續看到，當然，短期內具有挑戰性的趨勢。但我們預計，當我們看到我所看到的這些舉措取得良好成果時，我們預計 The Body Shop 的收入很快就會出現一些穩定。

On SG&A for Avon International, one of the biggest impacts in this quarter was related to phase of expenses. We don't break down what those savings are, Irma, but they are basically admin-related savings. So it really impacted the margin in this Q2.

對於雅芳國際來說，SG&A 方面，本季度最大的影響之一與費用階段有關。 Irma，我們不會詳細說明這些節省是什麼，但它們基本上是與管理相關的節省。所以它確實影響了第二季度的利潤率。

And of course, as we mentioned before, as the operational deleverage goes away, right, because you see that basically in constant currency, Avon International was almost flat this quarter, minus 1%, right? And as we continue to work on the stabilization of the top line there and as the operational deleverage goes away, and of course, these one-offs, these phases of expenses, they also stabilize more as we're expecting to see that in H2, you should expect to see higher margins for Avon International going forward.

當然，正如我們之前提到的，隨著運營去槓桿化的消失，對吧，因為你看到基本上按固定匯率計算，雅芳國際本季度幾乎持平，負1%，對吧？隨著我們繼續努力穩定營收，隨著運營去槓桿化的消失，當然，這些一次性費用、這些階段的費用，它們也會更加穩定，正如我們預計在下半年看到的那樣，您應該預計雅芳國際未來的利潤率會更高。

So this is it. I'm not sure if I missed anything, but I think that I got both of your questions.

所以就是這樣。我不確定我是否錯過了什麼，但我想我已經回答了你的兩個問題。

Our next question comes from Ruben Couto with Santander.

我們的下一個問題來自桑坦德銀行的魯本·庫托。

On Natura &Co LatAm, since the first quarter, you have been talking about that we could see some profitability volatility between quarters to higher investments in marketing, and I think Fabio just repeated that. But it's kind of happened already in this quarter.

在 Natura &Co LatAm 上，自第一季度以來，您一直在談論我們可能會看到季度之間盈利能力出現一些波動，以增加營銷投資，我認為法比奧只是重複了這一點。但這在本季度已經發生了。

I mean our marketing expenses did show a sequential increase on a year-over-year basis. So just wanted to understand if we should see more of this increased spend in marketing? Or was this mostly done already in the second quarter? Overall, what should we expect in terms of SG&A expenses in Natura &Co LatAm for the second half of the year? That would be helpful.

我的意思是，我們的營銷費用確實同比呈連續增長。所以只是想了解我們是否應該看到更多的營銷支出增加？或者這大部分已經在第二季度完成了？總體而言，我們對 Natura &Co LatAm 下半年的 SG&A 支出有何預期？那會有幫助的。

Ruben, JP here. Yes, you should see us investing more behind our brands and behind innovation going forward. So that's one. I mean we expect to gain efficiency in many other lines, but we do want to strengthen both Natura and Avon going forward.

魯本，太平紳士在這裡。是的，您應該看到我們在品牌和創新方面投入更多資金。這就是其中之一。我的意思是，我們希望在許多其他生產線中提高效率，但我們確實希望未來加強 Natura 和雅芳。

We are pretty confident on a very strong innovation pipeline, soon to hit the market as well as new positionings for both brands. And that comes in a very good moment as we implement El across most countries, especially in Brazil. So yes, expect to see further investments behind our brands.

我們對即將投放市場的非常強大的創新渠道以及兩個品牌的新定位充滿信心。這是一個非常好的時刻，因為我們在大多數國家（尤其是巴西）實施了 El。所以，是的，預計我們的品牌將得到進一步的投資。

Our next question comes from Thiago Macruz with Itau BBA.

我們的下一個問題來自 Itau BBA 的 Thiago Macruz。

You mentioned that you were able to repurchase roughly 90% of Avon bonds due 2043. And other than the restrictive covenants that you're going to fix from now onwards, what other benefits do you expect as a consequence of this transaction? Does this unlock any sort of tax management opportunities? This is my question.

您提到您能夠回購大約 90% 2043 年到期的雅芳債券。除了您將從現在開始修復的限制性契約之外，您預計此次交易還會帶來哪些其他好處？這是否會釋放任何形式的稅務管理機會？這是我的問題。

Macruz, thank you for the question. Look, you're right. Let's take one step back, right? Basically, if you look at the liability management strategy that the company has adopted in the last couple of years, basically, you will see that this is the odd man out there, right? Is the only legacy bond that we have from Avon, right? The other outstanding one was the 27 that we repaid last year.

馬克魯斯，謝謝你的提問。你看，你是對的。讓我們退後一步，對吧？基本上，如果你看看公司在過去幾年中採取的負債管理策略，基本上，你會發現這是一個奇怪的人，對吧？這是我們從雅芳那裡得到的唯一遺產，對嗎？另一個未償還的是我們去年還清的27。

And basically, the covenants and the characteristics that we have in this bond, they are completely different than the last bonds that we have issued, both sustainability-linked bonds and the 29th last year, right?

基本上，我們在這款債券中所具有的契約和特徵，它們與我們發行的上一份債券完全不同，無論是與可持續發展相關的債券還是去年的第 29 期債券，對嗎？

So there's a -- those bonds, they have basically, they're almost investment-grade like while the 43s. There were legacy bonds that again had some covenants, which, by the way, as repaying those covenants not only allow us to eliminate some reporting obligations, as you mentioned, but other simplifies a little bit our structure as well, which is something that we're pursuing, right?

所以，這些債券基本上都是投資級的，就像 43 年代的債券一樣。有些遺留債券再次有一些契約，順便說一句，正如您提到的那樣，償還這些契約不僅使我們能夠消除一些報告義務，而且還簡化了我們的結構，這是我們所要做的正在追求，對嗎？

Tax was not a reason why we repay this. This is part of our liability management process, has a very expensive cost of debt, overall cost of debt. But you should assume, of course, going forward, right, and this is why Arlo is so important in LatAm and the turnaround of our international assets is so important outside that, again, any leverage that we remain with the company, we'll try to allocate, of course, in countries where we have profits in order for us to take advantage of the tax shoot, right?

稅收不是我們償還這筆錢的原因。這是我們負債管理流程的一部分，債務成本非常昂貴，總體債務成本非常昂貴。但你當然應該假設，繼續前進，對吧，這就是為什麼 Arlo 在拉丁美洲如此重要，而我們國際資產的周轉在外部如此重要，再次強調，我們在公司保留的任何槓桿作用，我們都會當然，嘗試在我們有利潤的國家進行分配，以便我們能夠利用稅收優惠，對嗎？

But no, taxes was not one of the reasons. There is no tax restructuring related to the [43s] but was an important milestone, an important step for us as part of our liability management process as this was something that we were trying to do, right? The repayment of the 43s, something that we're trying to do already for a couple of years.

但不，稅收不是原因之一。沒有與 [43s] 相關的稅務重組，但這是一個重要的里程碑，對我們來說是責任管理流程的重要一步，因為這是我們一直在努力做的事情，對吧？償還 43 美元，這是我們幾年來一直在努力做的事情。

Our next question comes from Joseph Giordano with JPMorgan.

我們的下一個問題來自摩根大通的約瑟夫·佐丹奴。

So my question here goes on the gross margin front. I would like to understand a little bit better which were the main drivers. So you mentioned in the release portfolio optimization pricing carryover and cost. So if you could attribute like which were the main factors behind this gross margin? How should we think about it going to next quarter? It would be great.

所以我的問題是關於毛利率。我想更好地了解哪些是主要驅動因素。所以您在發布的投資組合優化定價結轉和成本中提到了。那麼，您是否可以將毛利率背後的主要因素歸因於哪些因素呢？我們應該如何看待下個季度的情況？這會很棒。

And my second and I think smaller question is that how are you guys seeing the potential impact from the devaluation of the Argentine peso that started to accelerate recently?

我的第二個也是我認為較小的問題是，你們如何看待最近開始加速的阿根廷比索貶值的潛在影響？

Joe, thanks for the question. I'm going to talk a little bit about that, and then I'm going to pass to JP so he can add anything on Argentina in particular.

喬，謝謝你的提問。我將對此進行一些討論，然後我將轉給 JP，以便他可以補充有關阿根廷的任何內容。

So another strong quarter of gross margin. We're quite satisfied. We've been in this journey, Joe, I think you probably remember since we announced this in the Q2 results of last year, right, that as the inflation was increasing across our BUs, inflation costs was increasing across our BUs. We had even a stronger focus, right, at the time, mainly, of course, at Avon International and at LatAm to focus on gross margin, right?

因此，毛利率又一個強勁的季度。我們已經很滿意了我們一直在這個旅程中，喬，我想你可能還記得，自從我們在去年第二季度的業績中宣布這一點以來，隨著我們各個業務部門的通貨膨脹不斷增加，我們各業務部門的通貨膨脹成本也在增加。我們當時有更強烈的關注，對吧，當然，主要是在雅芳國際和拉丁美洲，關注毛利率，對嗎？

And of course, as Q4 came to the books, we started saying the same thing about The Body Shop. And I think you saw the results in Q1 and of course, where we are here in Q2 with very strong results, especially coming from Avon International and from LatAm.

當然，隨著第四季度的到來，我們開始對 The Body Shop 說同樣的話。我認為您看到了第一季度的結果，當然，我們在第二季度取得了非常強勁的業績，尤其是來自雅芳國際和拉丁美洲的業績。

So the -- I mean the main reason for that, again, being super straightforward, has been the carryover of the price increases that we have done in the last 12 months. As we mentioned in the last quarter, right, that carryover started to catch up in Q2, and we should continue to see that Q3 onwards, but we'll continue to defend our gross margin by telco price increases in our BUs.

因此，我的意思是，主要原因是我們在過去 12 個月中進行的價格上漲的結轉。正如我們在上個季度提到的那樣，結轉在第二季度開始迎頭趕上，我們應該從第三季度開始繼續看到這種情況，但我們將繼續通過業務部門的電信價格上漲來捍衛我們的毛利率。

As we have said, the -- in the last quarter, right, most of our BUs, we did an acceleration of price increases in Q1 of this year in several countries. So now we're being more tactical for additional price increases and of course, for reduction of promotions and things like that.

正如我們所說，在上個季度，我們的大多數業務部門，今年第一季度在幾個國家加速了價格上漲。因此，現在我們對額外的價格上漲採取了更有策略的做法，當然還有減少促銷活動等。

So if you look at both Avon and LatAm, the carryover has been a very important part of that. And of course, additional telco price increases in Q2 is also part of that explanation, and we can continue to assume that we will continue to use this weapon going forward.

因此，如果你看看雅芳和拉美，就會發現結轉是其中非常重要的一部分。當然，第二季度電信價格的額外上漲也是這一解釋的一部分，我們可以繼續假設我們將繼續使用這一武器。

Now the other important topic, Joe, is that we have a complex business in terms of different countries with different margins and so on, right? So if you look at LatAm in particular, right? Not only you have the impact of category mix, but we have a big impact of country mix, right, as Natura Brazil, which is basically our highest margin, continues to overperform -- continues to show a strong momentum as it did in Q1 and in Q2 of this year, we should continue to see some benefit coming up from country and region mix, particularly in the case of LatAm.

喬，現在另一個重要的話題是，我們在不同的國家/地區擁有不同的利潤率等複雜的業務，對吧？所以如果你特別關注拉丁美洲，對吧？不僅受到品類組合的影響，而且我們還受到國家組合的巨大影響，對吧，因為Natura 巴西（基本上是我們利潤率最高的國家）繼續表現出色，繼續表現出強勁的勢頭，就像第一季度和今年第二季度，我們應該會繼續看到國家和地區組合帶來的一些好處，特別是拉丁美洲。

Now in the case of international, we see that basically coming from the mix impact coming from categories, right, especially as Angela and the team continue to focus on cult products and skin care. And this is something that, of course, has benefited us since Q1 and we saw the same benefit in Q2.

現在就國際而言，我們看到這基本上來自於類別的混合影響，對吧，特別是當安吉拉和團隊繼續專注於邪教產品和皮膚護理時。當然，自第一季度以來，這讓我們受益匪淺，我們在第二季度也看到了同樣的好處。

So as we said in Q1 last year, right, we can expect to see some volatility in gross margin, not necessarily every quarter. We'll continue to report gross margin growth of 500 bps versus the previous year. But again, we're confident with the strategy that we started taking 1 year ago, and we are happy with the results so far. And again, as our revenue continues to stabilize, especially outside LatAm, we should see the flow-through of that gross margin falling to EBITDA more and more in the next few quarters.

正如我們去年第一季度所說，我們預計毛利率會出現一些波動，但不一定每個季度都會出現波動。我們將繼續報告毛利率較上年增長 500 個基點。但我們再次對一年前開始採取的戰略充滿信心，並且對迄今為止的結果感到滿意。同樣，隨著我們的收入繼續穩定，特別是在拉丁美洲以外的地區，我們應該會看到未來幾個季度毛利率的流量越來越多地下降到 EBITDA。

On Argentina, again, I think you saw what we disclosed, right, in terms of the margin, excluding Argentina. Of course, we're following very closely the events in the country. I just want to highlight, and Joao will talk more that Argentina is a very important country for us, has been part of our strategy for a while. We have a big network there, committed network to both Natura and Avon. And of course, in Latin America, we're not operating in volatile environment is not news for the team, right? So I'm going to pass the word Joao so he can add anything on the case of Argentina.

關於阿根廷，我想您也看到了我們所披露的內容，對吧，就利潤率而言，不包括阿根廷。當然，我們正在密切關注該國的事態發展。我只是想強調一下，若奧將更多地談論阿根廷對我們來說是一個非常重要的國家，一段時間以來一直是我們戰略的一部分。我們在那裡有一個龐大的網絡，致力於為 Natura 和雅芳提供網絡。當然，在拉丁美洲，我們並不是在不穩定的環境中運營，這對團隊來說並不是什麼新聞，對吧？因此，我將轉達若昂這個詞，以便他可以就阿根廷的情況補充任何內容。

So a few additional remarks on our Argentinian operation. First of all, we are by far the #1 player in CFT there. Our brands are beloved by our consumers and consultants. And more important, we have a very talented team managing the operation there. And that's the reason why we were able to achieve such leadership amongst very volatile times there.

關於我們阿根廷業務的一些補充說明。首先，我們是迄今為止 CFT 領域排名第一的玩家。我們的品牌深受消費者和顧問的喜愛。更重要的是，我們擁有一支非常有才華的團隊來管理那裡的運營。這就是為什麼我們能夠在非常動蕩的時期取得如此領導地位的原因。

So going forward, of course, that we had planned for currency devaluation only that we didn't know exactly when that would happen with such an intensity. And by the way, it could happen even more in the near future. So because of that, we have prepared for some volatility. We have inventories there. We are able to adjust prices on real-time, which are associated with the quality of our management there tells us that we're going to get through it. I mean there might be noise in the transition. But I'm pretty confident that we will stabilize in a period of time and defend our leadership.

當然，展望未來，我們計劃進行貨幣貶值，只是我們不知道這種情況何時會發生如此嚴重的程度。順便說一句，在不久的將來，這種情況可能會發生更多。因此，我們已經為一些波動做好了準備。我們那裡有庫存。我們能夠實時調整價格，這與我們的管理質量有關，告訴我們我們將度過難關。我的意思是過渡過程中可能會有噪音。但我非常有信心我們會在一段時間內穩定下來並捍衛我們的領導地位。

Our next question comes from Robert Ford with Bank of America.

我們的下一個問題來自美國銀行的羅伯特·福特。

How are you thinking about The Body Shop and the weakness there? And how much of that is by choice as you make the changes in the channel efforts as well as economic and competitive environment? And when it comes to Home and Style in Brazil and Latin America, how big is that as a percentage of revenue? And where do you expect that to stabilize? And JP, you mentioned slow-moving inventory in Home and Style. How should we think about clearing that? And then lastly, can you discuss competitive dynamics in Brazil and Latin America as well as maybe discuss how the business is trending so far in the third quarter?

您如何看待 The Body Shop 及其弱點？當您改變渠道工作以及經濟和競爭環境時，其中有多少是您的選擇？巴西和拉丁美洲的家居與時尚業務佔收入的比例有多大？您預計這種情況會穩定在哪裡？ JP，您提到了家居和時尚領域的庫存流動緩慢。我們應該如何考慮清除它？最後，您能否討論巴西和拉丁美洲的競爭動態，以及第三季度迄今為止的業務趨勢？

Well, let me take just the TBS, and then I'll pass it on. But as it was mentioned here by Gui on the previous question, I mean, Ian is going through a very deep analysis on what are the issues that we have to be touching, and I think some of these points were listed there.

好吧，讓我只看TBS，然後我會把它傳遞出去。但正如 Gui 在上一個問題中提到的那樣，我的意思是，Ian 正在對我們必須觸及的問題進行非常深入的分析，我認為其中列出了其中一些要點。

We did not expect that I think it took over -- it was in February, may be March, very early. So a very short period of time for any result to be seen. But what we are glad to see is that we are touching the points which we thought were not the ones that should have been emphasized. So we're looking to costs. Again, we're looking to channels. We are revisiting. I mentioned several times that there's -- after the COVID and the pandemic, we see different behavior and different locations and so on.

我們沒想到我認為它接管了——那是在二月，可能是三月，非常早。因此，任何結果都需要很短的時間才能看到。但我們很高興看到的是，我們觸及了我們認為不應該強調的要點。所以我們正在考慮成本。再次，我們正在尋找渠道。我們正在重新審視。我多次提到，在新冠疫情和大流行之後，我們看到了不同的行為和不同的地點等等。

So we are reassessing all those things, okay? So we are looking at the plants and so on. We're not promising anything here. But I think the concrete message here that -- concrete results that we'll see will be much more beginning on cost and some adjustments on store location then on revenues picking up immediately. Okay. Gui?

所以我們正在重新評估所有這些事情，好嗎？所以我們正在研究植物等等。我們在這裡不承諾任何事情。但我認為這裡的具體信息是——我們將看到的具體結果將更多地從成本和商店位置的一些調整開始，然後是收入立即回升。好的。桂？

Yes. Bob, sorry, I just want to -- again, I'm not going to repeat the question on The Body Shop. I think Fabio gave the answer. Just want to make sure that for all your questions, the first 1 is about the Body Shop. The second one, you asked about Home and Style. And that was LatAm, right, in LatAm?

是的。鮑勃，抱歉，我只是想——再說一次，我不會在 The Body Shop 上重複這個問題。我想法比奧給出了答案。只是想確保您的所有問題中，第一個是關於 Body Shop 的。第二個問題，您詢問了家居和風格。那是拉丁美洲，對吧，在拉丁美洲？

Yes, hard question on, yes, percentage of what it represents the revenue and where you expect that to stabilize as well as the inventory that seems to be slow moving and they need to clear it.

是的，這是一個難題，是的，它佔收入的百分比，你預計收入會穩定在哪裡，以及庫存似乎移動緩慢，他們需要清理它。

So I'm going to pass to Joao so he can answer. Sorry.

所以我將把球傳給若奧，以便他可以回答。對不起。

And then just to confirm here, by the way, Ian was indicated on April, not even March. So it's a short period of time for him to show the results. Go ahead, JP.

然後順便確認一下，Ian 是在四月，甚至不是三月。所以他展示成果的時間很短。繼續吧，JP。

Bob, we disclosed before that Fashion and Home, as we called it then, represented around 30% of Avon business in Latin America. You recall that, that's on average, varying from 20s to 50 plus in some countries. And we also disclosed the revenue decline this quarter, 30% or so.

鮑勃，我們之前透露過，時尚和家居（當時我們稱之為時尚和家居）約佔雅芳拉丁美洲業務的 30%。您還記得嗎，在某些國家/地區，平均年齡從 20 多歲到 50 多歲不等。而且我們還披露了本季度營收下降30%左右。

And as I said, I mean, the portfolio reduction has been already implemented apart from flowing out some slow movers. So given that we remove 1/3 of this 30%, so going to get close to 20% of the -- on an aggregate level of what was Avon business here, which will again be further diluted when we combine with Natura as a percentage of the total business. We are flowing these low movers basically bringing them back to campaigns more frequently. We are not giving deeper discounts, if that's what cross your mind because we are focusing on increasing profitability of that portfolio.

正如我所說，我的意思是，除了一些行動緩慢的股票外，投資組合的縮減已經實施了。因此，考慮到我們刪除了這 30% 的 1/3，因此雅芳業務的總體水平將接近 20%，當我們與 Natura 合併為百分比時，這將再次被進一步稀釋佔總業務的比重。我們正在流動這些低動者，基本上使他們更頻繁地返回競選活動。如果您有這樣的想法，我們不會提供更大的折扣，因為我們專注於提高該投資組合的盈利能力。

You also referred to the competitive dynamics in the region. And as no real change from last quarter, the industry increased prices along the last 12 months. That seems to be a movement that stabilized. Volumes are flattish or so on average, skewed to personal care and no significant change from the ones that we referred last quarter.

您還提到了該地區的競爭動態。由於與上季度相比沒有實際變化，該行業在過去 12 個月中提高了價格。那似乎是一個穩定下來的運動。平均銷量持平左右，偏向個人護理，與我們上季度提到的相比沒有顯著變化。

And just where would you like to see Fashion and Home stabilize? So if you were 30, let's assume now you're close to 20, what do you -- what's the right proportion, if any, of the category?

您希望時尚和家居在哪裡穩定下來？因此，如果您當時 30 歲，那麼我們假設現在您已接近 20 歲，您會做什麼——該類別的正確比例（如果有）是多少？

Well, if we're -- if we achieve our goals in terms of profitability and cash generation, I will be pleased if it stabilizes where it is now.

好吧，如果我們——如果我們實現了盈利能力和現金生成方面的目標，如果它穩定在現在的水平，我會很高興。

Our next question comes from Joao Soares with Citibank.

我們的下一個問題來自花旗銀行的若昂·蘇亞雷斯。

First of all, I just wanted to explore Avon International and margins. And I think there's a broader discussion, and I don't know if it's time to revisit that discussion on where should we see that profitability stabilizing, right?

首先，我只是想探索雅芳國際和利潤率。我認為這是一個更廣泛的討論，我不知道是否是時候重新審視我們應該在哪裡看到盈利能力穩定的討論了，對嗎？

Before we had a guidance that is no longer valid, but it was pretty ambitious, right, getting to mid-teens margins. So I just wanted to discuss in broader terms, where do you currently sit in terms of the contribution margins of the overall geographies and what's the potential here if we can have any visibility on that, it would be interesting.

之前我們有一個不再有效的指導，但它非常雄心勃勃，對吧，達到了十幾歲左右的利潤。因此，我只是想從更廣泛的角度討論一下，就整個地區的貢獻邊際而言，您目前處於什麼位置，以及這裡的潛力是什麼，如果我們能夠對此有任何了解，那將會很有趣。

And the second point is on the working capital. As you pointed out, there were some improvements, especially in payables and inventories. So I just wanted to explore that with you, Gui, if possible. Where should we see that going forward?

第二點是關於營運資金。正如您所指出的，有一些改進，特別是在應付賬款和庫存方面。所以如果可能的話，我想和你一起探索這個問題，Gui。我們應該在哪裡看到這一點？

Joao, thank you for the question. Yes. So look, you're right, right, on Avon International. I think let's take 1 step back and basically look at the -- a little bit all the steps that we have taken in Avon International.

若昂，謝謝你的提問。是的。所以看，你是對的，對的，雅芳國際。我認為讓我們退後一步，基本上看一下我們在雅芳國際採取的所有步驟。

Basically, in the last 3 years, it has been 100% focusing on fixing the fundamentals, right? In the middle, of course, we got a big cyber incident that impacted the channel. We got COVID. We got a lot of turbulence in some markets. But I think it's fair to say when we look at the results that we are seeing in the channel, even though, right, there are still addition changes in the commercial channels, that is still going on.

基本上，過去3年，它一直100%專注於修復基本面，對嗎？當然，在中間，我們遇到了影響頻道的重大網絡事件。我們感染了新冠病毒。我們在一些市場遇到了很多動盪。但我認為，當我們看到我們在渠道中看到的結果時，可以公平地說，儘管商業渠道中仍然存在額外的變化，但這種變化仍在繼續。

Remember that we start changing our commercial channel in Avon International basically in September, October of last year. So even though we are in that -- we are almost 1 year out, we're still seeing basically adjustments in the channel going forward.

請記住，我們基本上是在去年九月、十月開始改變雅芳國際的商業渠道。因此，即使我們已經進入這個階段——我們已經快一年了，我們仍然看到未來渠道的基本調整。

And there is some encouraging KPIs that we can see in the channel. But of course, as we mentioned also in the past, this is a journey. And of course, as time passes, we make other adjustments, but we are confident that we are in the right track.

我們可以在渠道中看到一些令人鼓舞的關鍵績效指標。但當然，正如我們過去也提到的，這是一個旅程。當然，隨著時間的推移，我們會做出其他調整，但我們相信我們正走在正確的軌道上。

As you see, revenues, especially on CFT, stabilizing more and more. Now we are entering to a period now of basically as the fixed the fundamentals, we're entering into the period of stabilizing those revenues. Because as we have been saying, the operational deleverage has hit us a lot on the margin, right? Has hit us a lot on the margin because the pace that we can deliver our transformational agenda was not the same pace that we saw revenues declining. So we are entering this phase of more stabilization on the revenues, of course, with some volatilities depending on the external scenario. And a scenario that again we'll be able to see more and more the transformational costs flowing in full to the EBITDA.

正如你所看到的，收入，尤其是 CFT 的收入，越來越穩定。現在我們正在進入一個基本面基本固定的時期，我們正在進入穩定這些收入的時期。因為正如我們一直所說的，運營去槓桿對我們的邊際打擊很大，對嗎？這對我們造成了很大的打擊，因為我們實現轉型議程的速度與我們看到收入下降的速度不同。因此，我們正在進入收入更加穩定的階段，當然，根據外部情況會出現一些波動。在這種情況下，我們將再次看到越來越多的轉型成本全額流入 EBITDA。

So we're confident, look, that we're on the right track there. And the role of Avon International right now is not a role of growing top line, and we should not expect that big growth in top line for Avon in the short term -- short to medium term. But it's a role of improving profitability. It's a role, of course, of getting the EBITDA margin improvement every single quarter compared to previous year, and that's what we're trying to do. We were able to deliver that in Q1. We were able to deliver that in Q2, albeit is marching as more improvement. And we're targeting to do the same thing in H2 to finish with a good momentum.

所以我們有信心，看，我們正走在正確的軌道上。雅芳國際目前的作用不是增加收入，我們不應期望雅芳在短期內（中短期）收入大幅增長。但這是提高盈利能力的作用。當然，與去年相比，每個季度的 EBITDA 利潤率都有所提高，這就是我們正在努力做的事情。我們能夠在第一季度實現這一目標。我們能夠在第二季度實現這一目標，儘管正在取得更多改進。我們的目標是在下半年做同樣的事情，以良好的勢頭結束。

Keeping in mind that the transformational agenda will continue because we need to do more savings to come in Avon International. Now as you know, we basically -- we took out those -- that guidance that you referred in the past. So the guidance is not valid anymore. But of course, we'll continue to focus on delivering a sustainable solid margin for Avon International in the short to medium term.

請記住，轉型議程將繼續下去，因為我們需要為雅芳國際節省更多資金。現在如您所知，我們基本上 - 我們刪除了您過去提到的那些指導。因此該指南不再有效。但當然，我們將繼續專注於在中短期內為雅芳國際提供可持續的穩健利潤。

On the working capital, we had a good quarter in terms of improvements. It's not where we want to be yet, just to be clear. There's a lot to be done. Again, we have been talking the last few quarters about payables in particular. This quarter, we had a better quarter in payables. Of course, that as LatAm continues to overperform, especially Brazil, you can imagine that, that adds some pressure in terms of receivable, which the team has been able to match quite well. And inventories will follow our strategy across the countries and regions to minimize that. And of course, the stack of migrating Home and Styles specifically to consignment sales is going to definitely help us on the track.

在營運資本方面，我們在改善方面度過了一個不錯的季度。需要澄清的是，這還不是我們想要的結果。還有很多事情要做。同樣，過去幾個季度我們一直在特別討論應付賬款。本季度，我們的應付賬款情況有所好轉。當然，隨著拉丁美洲繼續表現出色，尤其是巴西，你可以想像，這會增加應收賬款方面的一些壓力，而該團隊已經能夠很好地匹配這一點。庫存將遵循我們在各個國家和地區的戰略，以盡量減少這種情況。當然，專門將 Home 和 Styles 遷移到寄售銷售的堆棧肯定會幫助我們走上正軌。

So as Fabio mentioned in his letter, right, in the release, we still see additional benefits coming from working capital, especially if you compare on a full year basis, right, because there may be volatility within quarters. And as we mentioned, again, we don't give guidance, of course. But we're now happy to have a positive working capital percentage of net revenues, right? As the business continues to grow, that adds pressure basically in the cash consumption that you have in your balance sheet.

因此，正如法比奧在他的信中提到的那樣，對，在新聞稿中，我們仍然看到來自營運資金的額外好處，特別是如果你以全年為基礎進行比較，對吧，因為季度內可能會出現波動。正如我們再次提到的，我們當然不會提供指導。但我們現在很高興營運資本占淨收入的比例為正，對吧？隨著業務的不斷增長，這基本上會增加資產負債表中現金消耗的壓力。

So we are in that journey, and it has been a big focus for the company. And we will continue to do so as incentives are aligned for the company to deliver better working capital and free cash flow dynamics.

所以我們正處於這個旅程中，這一直是公司的重點。我們將繼續這樣做，因為激勵措施旨在為公司提供更好的營運資本和自由現金流動態。

There are no further questions at this time, so that concludes our question-and-answer session. I would like now to turn the floor back over to Fabio Barbosa for his closing comments. Please, sir, go ahead.

目前沒有其他問題，我們的問答環節到此結束。現在我想請法比奧·巴博薩（Fabio Barbosa）發表結束語。先生，請繼續。

Thank you very much for being with us today. Our results improved in first half 2023. We are still not satisfied with them. We continue to be strongly focused on delivering our strategy, further position Natura &Co on the cost towards strong profitability and low leverage, allowing us to pursue meaningful and sustainable growth in the future.

非常感謝您今天和我們在一起。 2023年上半年我們的業績有所改善，但我們仍然不滿意。我們繼續專注於實施我們的戰略，進一步將 Natura &Co 的成本定位為實現強勁的盈利能力和低杠桿率，使我們能夠在未來追求有意義和可持續的增長。

Closing the sale of Aesop, implementing Wave 2 in LatAM, continue to work on simplifying and turning around our international assets while delivering our ESG agenda are all fundamental steps that will help us achieve our ambition. Thanks for your attention, and have a great day.

完成 Aesop 的出售、在拉丁美洲實施 Wave 2、繼續致力於簡化和周轉我們的國際資產，同時落實我們的 ESG 議程，這些都是幫助我們實現抱負的基本步驟。感謝您的關注，祝您有美好的一天。

Thank you.

謝謝。

The conference has now concluded. Thank you for your participation, and you may now disconnect. Have a good day.

會議現已結束。感謝您的參與，您現在可以斷開連接。祝你有美好的一天。