Index
Message from the
Founders
page 4
Message from
the Executive
Committee
page 6
Management and
Organization
Natura’s business behavior,
geared to sustainable
development, ethics and
transparency
page 18
Natura
The company today, its
business model and its main
results in 2014
page 8
Strategy
The strategy adopted by
Natura, including its most
recent investment cycle and
new sustainability vision, fully
connected with the business
page 12
Brands and
Products
Innovation as the key
element in delivering
products and services
that drive well being well
and generate social and
environmental value
page 23
Our Network
Constant focus on the
Natura relationship network,
essential for the future of
the business
page 30
Pre sentation
Direct communication
this report aims to present an integrated vision of the multiple faces
of the company’s life
Natura PrESENtS this summarized version of its annual
report. the document contains essential information about the
company, providing an overview of key events in 2014.
reporting initiative) G4 parameters, an international standard which
incorporates sustainability data and transparency into the reporting
of business activities.
once again, the website www.natura.com.br/relatorioanual is the
main channel for communicating natura’s performance, offering
expanded content, interactivity, exclusive videos and links to other
company documents or publications.
in addition to striving to reflect essential company values, such as
lightness and beauty, the report structure has incorporated natura’s
new sustainability Vision, launched in 2014. in its 15th report,
natura has the pleasure of sharing its most recent history with you.
the report adopts iirC (international integrated reporting
Council) integrated reporting guidelines, aimed at consolidating
the integrated communication of the organization’s financial, social
and environmental results. it is also aligned with Gri (Global
enjoy reading it!
Marcelo Bicalho Behar
Corporate affairs Director
1
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our essence
reason for Being
Vision
our reason for Being is to create and sell products and
services that promote well-being/being well.
Well Being
is the harmonious relationship of the individual with himself,
with his own body.
Being well
is the empathetic, successful and pleasurable relationship of an
individual with other people, with nature, and with the whole.
Because of its corporate behavior, the quality of the
relationships it establishes and the quality of its products
and services, natura will be a group of brands with strong
local and global expression, identifi ed with the community
of people committed to building a better world through a
better relationship with themselves, with others, with the
nature of which they are a part, with the whole.
Beliefs
Life is a chain of relationships. nothing in the universe stands
alone. everything is interdependent.
the greater the individual diversity, the greater the wealth and
vitality of the whole system.
natura believes that valuing relationships is the foundation of the
great human revolution in the pursuit of peace, solidarity, and life
in all of its manifestations.
Continuously striving for improvement develops individuals,
organizations, and society.
Commitment to the truth is the route to enhance quality in
relationships.
the pursuit of beauty, a genuine aspiration of every human being,
should 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
towards the evolution of society and its sustainable development.
Accomplishments
-
-
2050 Sustainability Vision: evolution
in sustainability strategy towards
generating positive impacts, with
business directives up until 2050
and commitments and ambitions up
until 2020.
B Corp certifi cation: certifi cation
that attests Natura’s commitment
to economic growth allied with
the promotion of social and
environmental well being.
1.3 million NCs in Brazil and 400
thousand NCs in the International
Operations.
- Natura Network (online sales
platform) extended to whole of
Brazil.
-
Average order delivery time of
4.5 days (6.8 in 2011) and 38% of
orders delivered to consultants in
up to two days in Brazil.
- Net revenue: R$ 7.4 billion, up 5.7%
-
compared with 2013.
-
International Operations: 19.2% of
consolidated net revenue (16.1%
in 2013) and 16 million units
produced by third-party suppliers
(10.3 million in 2013).
Ecoparque: inaugurated in March in
Benevides, Pará. The soap factory
installed on the site generates
fi nancial and social value for
the community and reduced
environmental impacts due to 100%
local production.
-
Aesop: 98 stores in 14 countries. 18
opened in 2014.
- Natura Consultants: more than
-
Inclusion: 18% of the staff on the high
technology picking line in the São
Paulo Distribution Center (CDSP)
are physically/intellectually disabled.
The company’s target is 30%.
Challenges
- Net profi t: R$ 732.8 million*, 13%
-
down on 2013.
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Business volume in the Amazon:
R$ 197 million (R$ 201.5 million
in 2013). In relation to base year
2010, the accumulated business
volume is R$ 582.1 million.
- Market share: 1 p.p. retraction in
Natura’s share of Brazilian market
in 2014.
-
Emissions: 2.2% increase
in relative greenhouse gas
emissions compared with 2013.
Accumulated 6.7% reduction
against base year 2012.
- Water consumption: 11% increase
in water consumption per item
manufactured (0.45 liter of water
per item in 2014 compared with
0.40 liter per item in 2013).
*Excluding market measurement.
2
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MessaGe froM the founDe rs
Commitment to life
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“São Paulo is almost out of water.”
Paulo Nogueira Neto, professor of Ecology at
the University of São Paulo (USP) and, at that
time, Special Environment Secretary, in an
article in the newspaper Folha de S.Paulo on
May 25, 1977.
“the year 2015 can be a turning
point in human development if we
agree on a path to resilience through
strong agreements on disaster risk
reduction, development financing,
climate change and a new set of
sustainable development goals.”
Ban Ki-moon, secretary-general of the United
Nations Organization, at the World Economic
Forum in Davos, January 2015.
BEtWEEN tHE aLErt issued by
the respected, pioneering environmentalist
in 1977 about the crisis now evident
all over the southeast of Brazil and Ban
Ki-moon’s call to action at the beginning
of the year in course, awareness of the
growing risks posed to life on our planet
has grown dramatically, imposing the
need for a transformation that will enable
us to build a sustainable civilization. the
impacts of this water crisis will certainly
lead to more conscious consumption of
this precious resource, raising its value, not
just philosophically and emotionally, but
also materially, in a way never seen before
in our society. thus we have, triggered by
this local climatic phenomenon and its
consequences, an example of how 2015
might indeed be a year of transformation,
in line with the un secretary general’s
proposal. in são Paulo, in Brazil and
worldwide.
there have been more than twenty years
of negotiations and fifteen revisions to
the eight united nations Millennium
Goals, targets proposed for combating
key social and environmental issues.
today, with higher levels of awareness
and wider reaching governance forums,
the time has come to take decisive steps
towards building a world once again
connected with the ethics of life. this
year there will be three major acts in this
concer ted movement of nations towards
the common good: in July, in addis ababa,
ethiopia, nations will work on adequately
allocating the trillions of dollars earmarked
for infrastructure investments; two months
later, at the un General assembly in
new York, the world will decide on the
sustainable Development
convergence of interests, but we believe
that all of us – governments, companies,
civic organizations and individuals – have
a role to play in this interconnected and
challenging environment characterized by
finite resources. throughout natura’s 45
year history, the perception has matured
that we are agents of social transformation
based on genuine interactions with
everyone in our relationship network.
Driven by this conviction, in 2014 we
renewed our collective commitments
to the future through the launch of our
2050 sustainability Vision. this vision is
based on a set of guidelines aimed at
expanding our value creation by promoting
well being well and provoking a positive
economic, social and environmental
impact on the world. at the same time, we
obtained B Corp certification, which, using
clear parameters, identifies companies
committed to building a better world. We
are honored to be a part of this global
movement of companies working to
transform society. We are also committed
to helping the movement grow and attract
new partners.
Goals that will orient post-2015 efforts;
and in December, in Paris, the Climate
Change Conference will establish a new
global agreement that, we hope, will
promote the advances and commitments
necessary for the planet. We are
aware that we depend on a complex
internally, 2015 will also be decisive for the
company. We need to recognize that in
spite of our many accomplishments, we still
have to advance in key areas, particularly
with regard to our recent performance
in Brazil. natura’s strength is in its origins.
We depend on our fundamentals, on the
valuable network of relationships built
up over time and reinforced recently by
significant investments in infrastructure,
technology and logistics. We have also
enthusiastically accompanied the growing
acceptance of our value proposition in the
other Latin american countries in which
we operate.
in this new cycle, natura will be led by
the experienced executive roberto Lima,
who was already a board member and
who readily accepted our invitation to
become chief executive officer. this will
ensure continuity of the work initiated
by alessandro Carlucci, whom we thank
for his 25 years of dedication to the
Company, ten of which as Ceo. We are
confident that this transition will represent
a new driving force for the future of the
company. We would like to invite our
entire relationship network to engage in
this key moment of defining the course
of our civilization, so that, rising above any
ideology, ambition, need or market logic,
we may strive to guide human activity
based on value and respect for life.
antonio Luiz da Cunha seabra
Guilherme Peirão Leal
Pedro Luiz Barreiros Passos
from left to right, top to
bottom, the members of
natura’s administration
Council:
Julio Moura neto,
Luiz ernesto Gemignani,
raul Gabriel Beer roth,
antonio Luiz da Cunha
seabra, Guilherme
Peirão Leal, Pedro Luiz
Barreiros Passos, Marcos
de Barros Lisboa,
silvia Lagnado and Plínio
Villares Musetti
4
5
MessaGe froM th e exeCutiVe CoMMi ttee
our contract with society
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Roberto Oliveira de Lima
Chief executive officer
Agenor Leão de Almeida Junior
Vice President, Digital technology
Erasmo Toledo
Vice President, international
operations
Gerson Valença Pinto
Vice President, innovation
C OHErENCE aND F IrM NESS
of purpose are usually determinant in the
achievement of goals in the most diverse
areas of life. and it is no different in
business. for almost half a century, natura
has remained resolute in its vocation
of creating not just economic, but also
environmental and social value through its
relationship network. this explains why our
corporate conduct was recognized in 2014
by the attainment of B Corp certification,
which identifies companies around the
world that are committed to providing
returns that go beyond profit. We are
aware that financial results are fundamental
in enabling our ongoing effort to become
a better company for the planet, but we
also know that our social pact encompasses
much more than commitments among the
immediate actors. it is in fact a commitment
to society as a whole.
Bearing this in mind, we have reached
the understanding that the strategic cycle
that led us to leadership of the cosmetics,
fragrances and toiletries industry in Brazil
must evolve. our value proposition,
based on promoting well being well, on
relationship selling and on sustainable
development, is still powerful, but our
translation of this into products and actions
must stay abreast of an ever more dynamic
and competitive market reality.
were well below expectations. sales grew
by 1.9%, while the overall target market
regained vigor, growing some 10%. our
operations in Latin america maintained
the accelerated growth rate they have
shown over the last three years, worthy of
note being the advances in our consultant
network, which already numbers over
400,000 in the five countries in which we
have operations. aesop, acquired in 2013,
also presented a robust performance,
closing the year with 98 stores around
the world.
With this, consolidated net revenue totaled
r$7.4 billion, with eBitDa at r$1.6 billion
and a net income of r$732.8 million. in
2014, we maintained our major investment
plan which, over the last four years, has
allocated around r$2 billion to positioning
natura’s technological, production and
logistics infrastructure on a completely
new level. We inaugurated facilities that
will support our future growth, such as the
ecoparque industrial Complex in the state
of Pará, a new plant in the town of Cajamar
and the são Paulo Distribution Center,
while simultaneously strengthening and
enhancing our digital technology platform. in
our Latin american operations, we doubled
our order picking capacity in Chile, Peru,
argentina and Mexico.
our 2014 results reflect this transition. We
need to recognize that our results in Brazil
this upgrade in data analysis capacity and in
connectivity tools will enable us to leverage
relationship selling, while forging even closer
links between natura, our consultants
and our customers. We can now identify
individual needs and buying habits and
provide even more personalized service,
moving beyond mere geographic or social
segmentation. it is our understanding
that natura’s proposition, for many years
unbeatable, sought to deliver well being
well to everyone homogenously, always
supported by relationships, products and
commitments that set us apart. increased
competition, whether in the retail or direct
sales areas, has affected our presence and
our performance. We believe that the
time has come to upgrade the concept of
well being well for everyone by proposing
well being well for each person, using
technology as an enabler to strengthen
links with each individual, as has been done
with our network.
it was for this reason that the company
developed the natura network, a digital
channel through which consultants can
stay abreast of changes in the way people
relate to each other. We are fully focused
on taking advantage of the innumerous
opportunities offered by the digital age, a
case in point being order processing, with
98% of our orders now being placed over
the internet.
our more than 6,000 employees in Brazil
and in the international operations have
a key role to play in the improvements
we intend to implant. We have designed
a new personnel management model for
them, accompanied by an organizational
culture that incorporates recent workplace
transformations and seeks to bring them
closer to our business strategy.
together we will continue to innovate
in our commercial structure and in
the development of new products and
concepts. it is our understanding that
constant progress towards sustainable
development is an important driver of
innovation, for which reason we have
renewed our ambitions and priorities with
the launch of our 2050 sustainability Vision
in 2014. Generating positive impacts at
all of natura’s points of interaction with
people and the environment is, in essence, a
reaffirmation of our contract with society.
With a background that gives us the
credibility to assume such a commitment,
we invite whoever identifies with natura
to engage in this journey of conscious and
responsible transformation in value creation
throughout our relationship network.
roberto Lima,
Chief executive officer, on behalf of the
executive Committee
João Paulo Ferreira
Vice President, networks
José Vicente Marino
Vice President, Brands and
Businesses
Josie Peressinoto Romero
Vice President, operations and
Logistics
Lilian Guimarães
Vice President, People and
Culture
Robert Claus Chatwin
Vice President, internationalization
Roberto Pedote
Vice President, finance and
institutional relations
6
7
a
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Who We are
the well being well
company
natura works toward generating
more and more value for all its
stakeholders
LEaD Er OF BraZIL’S cosmetics, fragrances and toiletries
industry, natura has been dedicated to creating value for its entire
relationship network since its foundation in 1969.
through a direct selling model, the company offers more than 1.3
million natura consultants in Brazil and more than 400 thousand in
the international operations (argentina, Chile, Colombia, france,
Mexico and Peru) the opportunity to generate income, while
continuously driving social and environmental entrepreneurship
throughout the network.
underpinned by its brand and product portfolio, the company
strives to get close to its customers, encouraging changes in habits
and the adoption of more sustainable behaviors. natura products
are also commercialized in Bolivia, through local distributors. aesop,
an australian company in the premium cosmetics segment which
natura acquired at the beginning of 2013, operates in 14 countries
and ended the year with 98 stores (18 of which opened in 2014).
With around 6,600 employees in Brazil and overseas, natura
focuses on developing competencies that will enhance the
business in an entrepreneurial and civically responsible way.
furthermore, natura dedicates special attention to its suppliers
and the 33 communities with which it currently maintains relations.
the communities ensure the sustainable supply of biodiversity
ingredients that form the technological base for natura products.
to make this model feasible, we have a robust foundation of
infrastructure, logistics and digital technology in Brazil and in the
international operations (see map).
uSa
Aesop Stores
Paris (France)
Natura Store
Natura today
Colombia
Production and distribution
New York (uSa)
Innovation Hub
Europe
Aesop Stores
asia
Aesop Stores
Peru
Distribution
Mexico
Production and distribution
Chile
Distribution
argentina
Production and
distribution
Oceania
Aesop Stores
5 COMPaNY-OWNED
MaNuFaCturINg PLaNtS
4 in Cajamar (São Paulo)
1 in Benevides (Pará)
4 PrODuCt trIaL
kIOSkS
2 in Campinas (São Paulo)
2 in São José dos Campos
(São Paulo)
8 DIStrIButION CENtErS IN
BraZIL
São Paulo DC (São Paulo)
Canoas DC (Rio Grande do Sul)
São José dos Pinhais DC (Paraná)
Mathias Barbosa DC (Minas Gerais)
Uberlândia DC (Minas Gerais)
Castanhal DC (Pará)
Jaboatão dos Guararapes DC (Paraíba)
Simões Filho DC (Bahia)
3 rESEarCH aND
INNOvatION
CENtErS
Cajamar (São Paulo)
Benevides (Pará)
Manaus (Amazônia)
98 Aesop stores in Europe, Oceania, Asia and
North America
More than 1.3 million NCs in Brazil
More than 400,000 NCs in the IOs
More than 5,200 employees in Brazil
More than 1,300 employees in the IOs
Around 5 thousand suppliers
33 communities supplying social biodiversity
ingredients
Around 30% of the portfolio renewed every year
Around 1,500 products made available every
sales cycle
18 sales cycles in 2014
95.5% on-time delivery in 2014
38% of deliveries in up to 48 hours (Brazil)
56% of deliveries in up to 48 hours (IOs)
Natura Network (online sales platform) available
in every state in Brazil
a
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hoW We Do it
Business Model
Guided by our essence, we strive to develop products and concepts that add
value for all stakeholders throughout our chain
product
conception
inputs
suppliers
internal
processes
transportation
business
model
consumption
O
U
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R
E
S
O
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C
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S
Global research center, the
Natura Amazônia Innovation
Center and an innovation
office in New York
Innovation network with
more than 220 partners in
Brazil and abroad
Relationship
communities (3,1oo
families), who supply
inputs such as pitanga,
Brazil nut and moriche
palm, or who share in
the benefits
13.3% of inputs in terms
of value acquired from
the Amazon region
190suppliers of raw
materials and
packaging, such as
fragrances, organic
alcohol and glass
39,91% free floating
shares in capital market
R$ 505,7 million invested in
capital expenditure
6,600 employees
13distribution
centers in Brazil
and in the IOs
Transportation
service providers
1,7 million
NCs in Brazil, Latin America
and France and 13,300 Natura
Consultant Advisors (NCAs)
Aesop, an Australian brand
with 98 stores in 14 countries
57%of Brazilian households
consume Natura products
at least once a year1
a
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t
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Guaranteed product
quality and safety
Radical transparency:
moving toward full
traceability of
portfolio
Co-creating:
collaborative
innovation initiative
involving customerss
Encouraging conscious
and sustainable
consumption
Promoting well being
well and positive
experiences
Brand leadership
in Brazil
Steady growth
in brand preference
in IOs
Our
Essence
Innovative products
and concepts
that promote well
being well
Network of
relationships
through which we
sell our products
Corporate behavior
geared to sustainable
development
H
O
W
W
E
T
R
A
N
S
F
O
R
M
R$216
million (3% of revenues)
invested in innovation
and development funding
in 2014
GHG and waste impacts are
calculated before the
product is designed
Sharing benefits with
communities
Sustainable
management
Research into
renewable sources of
inputs for formulas
and packaging
Selection and
development
programs for
suppliers based on
social and
environmental
criteria
Sustainability vision that
incorporates business
plans and indicates
priorities for 2020
Production in Brazil, in
Latin America and in
Australia (Aesop)
High technological
capacity enables
more than 2.4
million products to
be picked, fulfilling
more than
61.000
orders per day
Investments in marketing
Incentives for personal
development and
entrepreneurship
Training and tools to leverage
consulting activities
Expansion by means of
digital consultants
W
H
A
T
W
E
D
E
L
I
V
E
R
30%
of the portfolio
renewed every year
Portfolio that contributes
to socio-environmental
development
R$582
million invested in the
economic, environmental
and social development
of the Amazon region up
to 2014
% of total
carbon emissions
43% of absolute
CO2e emissions related
to the extraction of
biodiversity raw materials
and other inputs
environmental
Solid Waste
% of recycled post-consumer material
% of product recyclability¹
% eco-efficient packaging²
Water
Water consumption (l/unit prod.)
Carbon
relative GhG emissions (kgCo2e/kg
product invoiced)3
2012
2013
2014
1,6
84
14
1,4
56
22
1,2
58
29
2012
0,40
2013
2014
0,40
0,45
2012
2013
2014
3,21
2,93
3
absolute GhG emissions (‘000 t)3
299
328
332
economic
Social and
environmental
development of
partners'
businesses
Cash generation of
approximately 0.14 times
Ebitda and low net
indebtedness
(1.08 times Ebitda)
delivery time to NCs
4,5days is the average
38%of deliveries within
95,5%
48 hours
on-time delivery
Natura Movement:
collaboration network to
support Natura Consultants'
social and environmental
projects and other
stakeholders
Social, economic and human
development of the NCs
10% of absolute
CO2e emissions
9% of absolute
CO2e emissions
15% of absolute
CO2e emissions
23% of absolut
CO2e emissions
1Kantar Worldpanel (october 2013 to september 2014).
Distribution of wealth (r$ millions)
2012
2013
2014
shareholders5
Consultants6
employees
suppliers
Government7
so c ial
846
854
3.671
4.107
803
4.837
1.743
917
5.425
1.804
702
4.152
1.010
5.989
1.721
Quality of relationships
2012
2013
2014
Climate sur vey – favorability among
employees (Brazil and ios)8
supplier loyalty (Brazil and ios)9
nC loyalty Brazill9
nCa loyalty Brazil9
72
24
24
40
51
38
49
49
78
31
23
38
52
38
47
54
75
26
27,5
30
64
39
45
64
oth er in di ca tor s
number of nCs (‘000s)
overall rating in brand image sur vey in
Brazil (%)10
amount raised by Believing is seeing
Brazil (education) – (r$ million)
2012
1.573
79
2013
1.657
78
2014
1.743
74
12,8
17,1
18,8
amount raised by Believing is seeing ios
(education) – (r$ million)
4,5
4,8
6,7
accumulated business in the amazon
region (r$ million)11
122
385
582
to incorporate packaging with a reduction in weight of at least 50% in comparison
with regular/similar packaging; or composed of 50% potentially marketable recycled
materials and/or renewable non-cellulosic materials that do not increase mass;
3Changes were made to the GhG inventor y emission factor. figures for 2012
and 2013 were recalculated to ensure comparability; 4takes aesop into account;
5orepor ted figures correspond to dividends and interest on equity effectively paid to
shareholders, i.e., cash basis of accounting; 6ein 2014, due to advances in Latin
american operations, we adjusted our estimate of nC margins. Previous amounts
were restated to ensure comparability; 7the item Government represents the taxes
levied on natura’s activities and those of the nCs, that is, the total load of direct
and indirect taxes, subtracted from the taxes levied in previous stages in the chain,
Economic indicators (r$ MM)
2012
2013
2014
Consumer loyalty Brazil9
Consolidated net revenue
6.345,7
7.010,3
7.408,4
nC loyalty ios9
Consolidated ebitda
1.511,9
1.609,0
1.554,5
nCa loyalty ios9
Consolidated net income
874,4
842,6
732,8
Consumer loyalty ios9
internal cash generation
1.018,9
1.023,9
922,6
average daily stock trading volume
% of revenue from ios (%)
54,3
11,6
61,1
16,14
47,8
19,24
PerforManCe
Generating shared value
Consolidated net revenue for Brazil and the international operations
increased by 5.7% compared with 2013
IN 2014, natura’s net revenue in
Brazil reached r$ 6 billion, up 1.9% on
the previous year. During the year, the
international operations accounted for
19.2% of consolidated revenue, against
16.1% in 2013. the fi gures include the
australian brand aesop and the operation
in france. Local production in Latin
america exceeded 16 million units, against
10.3 million in 2013.
Consolidated net revenue for Brazil and
the ios grew 5.7% in 2014, totaling $ 7.4
billion. ebitda was r$ 1.6 billion with net
income of r$ 732.8 million, a reduction of
13% compared with 2013.
Wealth distributed to natura stakeholders
totaled r$ 13.6 billion. the total for the
supplier communities was r$ 8.9 million,
compared with r$ 11.2 million in 2013.
the reduction is explained by the use of
inputs held in stock over recent years.
from January to october 2014, the
Brazilian Cosmetics, fragrances and
toiletries (Cft) market grew 14%,
according to the industry associations
sipatesp/abihpec, par ticularly worthy of
note being the soap, hair and deodorant
segments in toiletries.
according to euromonitor data, natura’s
market share in Brazil suffered a 1 p.p.
retraction in 2014. in the Latin american
operation, in addition to increased
profi tability, natura showed the highest
growth in market share during the year. in
Chile, argentina and Peru, natura already
fi gures among the preferred brands.
Net revenue
(R$ billion)
Net revenue IOs*
(R$ million)
Number of NCs*
(thousands)
Dividends
(R$ per share)
Relative CO2 emissions *
(kg of CO2e/kg of product)
+10% g.y.*
+40% g.y.
+9% g.y.
-0,3% g.y.
2010: 5.100
2014: 7.400
2010: 372,1
2014: 1.419,2
2010: 1.221
2014: 1.743
2010: 1,65
2014: 1,63
2012: 3,21
2014: 3
*average annual growth
*international operations
*natura Consultants
*accumulated reduction: 6,7%
1in 2014, the indicator began to incorporate additional aspects and the figure for
represented under the item suppliers; 8Climate sur vey – hay Group; 9Loyalty sur vey –
2013 was recalculated to ensure comparability; 2the indicator was redefined in 2014
instituto ipsos; 10Brand essence sur vey - ipsos institute; 11Base year 2010.
11
strategy
Business strateGY
evolution of model
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Recycling workshop at the Casa Natura, in Argentina
natura is working on leveraging relationship selling and
strengthening the brand for consultants and clients, enhancing
the well being well proposition
gr OWtH IN INCOM E in Brazil and the
resulting expansion in the number of retail and direct
selling brands have significantly transformed the
business environment for the cosmetics, fragrance
and toiletries industry. as a result, natura realized it
needed to strengthen operations around the company’s
fundamentals: offering quality products that promote
well being well for the company’s relationship network.
We also want to strengthen the company’s presence
among customers through the development of
complementary channels – such as the natura
network digital platform – which enable and leverage
direct sales. the company also aims to differentiate its
communication, bringing the natura brand closer to
its stakeholders once again by underscoring the core
attributes that unite them.
We are still capturing the benefits of an investment
cycle totaling almost r$ 2 billion over the last four
years, which enhanced our technological, production
and logistics infrastructure. We plan to capitalize on this,
leveraging relationship selling through high connectivity
and extensive information processing and analytical
capacity. the 1.7 million natura consultants form a
powerful social network that must be supported by
technological resources able to recognize the needs
and behaviors of the consultants’ customers, providing
personalized offerings driving greater convenience and
satisfaction with the buying experience.
the company has been investing in the provision of
information, applications, means of payment and other
instruments to enhance the consultants’ performance.
in the international operations, the target is to
accelerate the transfer of innovations and learning,
in particular to the countries in which the businesses
have reached a higher level of consolidation, such as
argentina, Chile and Peru, while continuing to expand
the sales channel and the level of brand awareness
in Colombia and in Mexico. Meanwhile, aesop will
continue to grow in large urban centers worldwide,
focused on the premium cosmetics segment. this
expansion will include the opening of stores in Brazil
in 2015. the acquisition of aesop reinforces our belief
in the potential for expanding natura’s business in the
future through new brands and product categories.
Continuous growth in the IOs
-
19.2% of natura’s consolidated revenue
- More than 400 thousand nCs (115 thousand in
argentina alone)
-
Local production (via partners) of 16 million units in
argentina, Colombia and Mexico
- Most valuable retail brand in Latin america (Best retail
Brands/interbrand)
- Management system (buying, stocks, finance etc.)
implanted in Peru and Mexico
-
-
-
56% of deliveries in up to 48 hours
r$ 6.7 million raised through Believing is seeing program
for promotion of educational actions
elected the best company to work for 2014 (Great Place
to Work) in Colombia
- Differentiated multi-level model (sustainable relations
network) drives the development of leaders,
entrepreneurship and socio-environmental actions in Mexico
-
Leadership in direct selling segment in Chile
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risKs
Continuous monitoring
Main risks monitored
the risk management structure includes
different information sources, a dedicated
team and constant monitoring by senior
leadership
rI Sk
Commercial model
innovation capacity
MItIgatION MEaSurES
Permanent monitoring of sector of activity and focus on projects to
improve the company’s commercial model and value proposition,
exemplified by the launch of the natura network digital relationship
and sales platform
Continuous investment in innovation on a number of different fronts
(commercial strategy, product development, logistics and distribution
network etc.). the company invests around 3% of its annual revenue
in innovation
Leadership development
natura has a specific program to develop and retain leaders. this
is coordinated by the People Management area and is linked with
business strategy
information security
Product quality
Climate change
social biodiversity
structured management of this question with guidelines set forth
in the company’s code of conduct and constant efforts to drive
employee awareness. full communication traceability and compliance
with the iso 27.002:2013 information security standard
the portfolio is compliant with all quality and safety standards from
the conception stage on
here the objective is to combine financial and socio-environmental
gains. to reduce the impact of emissions from its operations,
natura has its Carbon neutral program which covers three areas:
emissions measurement (throughout the value chain), reduction and
compensation
the use of social biodiversity inputs is controlled by the natura
sustainable use of social Biodiversity Products and services policy,
which guarantees fair benefit sharing with the supplier communities
and sustainable management of ingredients and assets. natura
also seeks to promote sustainable businesses through its amazon
program. together with other organizations, the company is
engaged in an effort to approve new legislation governing access to
biodiversity
tax load
Permanent monitoring of taxation at federal and state level. active
participation in industry associations such as abihpec and aBeVD
other external risks (interest rates,
exchange variation, inflation etc.)
senior management permanently monitors the external risks
presented by the economic conjuncture, modifying strategic planning
as necessary
institutional Conjuncture (Brazil
and international operations)
Permanent monitoring of the political-economic conjuncture in the
countries in which natura operates, modifying strategy as necessary.
the alterations in importation rules in argentina, impacting natura’s
supply capacity, influenced the decision to increase local production
in the ios, generating reductions in costs and environmental impacts
IN LINE WItH StratEgIC planning, at natura
economic and socio-environmental risks are divided into two
categories: strategic ones, which may affect business ambitions and
the continuity of the company, and operational ones, related to
internal company processes.
the risk mapping process is fed by different information sources:
the analysis of internal and external factors, mapping of the natura
value chain (the natura management system), self-assessment
of risks, loss and fraud indicators, internal audit reports, controls
stemming from sox certification (based on the us sarbanes-oxley
act) and reports received by the ombudsman.
action plans to mitigate risks are monitored by the executive
Committee. all strategic risks for natura are also accompanied by
the Board of Directors through the advisory committees.
Representation of global
monitoring of discussions
about controversial
ingredients
a whole new level of customer service
inVestMents
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investments in logistics infrastructure and digital technology drive gains in efficiency
and improved service levels
2014 Sa W tHE CuLM INatION
of logistics infrastructure and digital
technology projects driven by an
approximate investment of r$ 2 billion
initiated in 2011. operations were initiated
at a new 11 thousand m² factory in
Cajamar (são Paulo) which is a reference
in automation and productivity. in
Benevides (Pará), the ecoparque industrial
complex, which houses the natura soap
plant, was inaugurated.
the company’s new high technology são
Paulo Distribution Center (CDsP) came
into regular operation in the first half of
the year, complementing the activities of
the seven other centers around Brazil.
of a series of indicators that monitor
distribution, pre and post sale service and
product availability), which soared from
40% in 2011 to 71% in 2014.
in addition to reducing operating costs, the
investments have impacted service levels
for nCs and customers. “from 2011 to
2014, we improved our customer service
indicators significantly”, says the company’s
vice president of operations and Logistics,
Josie romero. the best illustration of this
is the customer service index (consisting
the natura network is already operating
on a flexible, fully digital technology
platform that services both the traditional
and the digital direct selling models.
to maintain service levels, natura has
implanted an internal support and service
center operating 24 hours a day, seven
days a week, which monitors the buying
experience for consultants and customers
on the digital platforms available.
the evolution in infrastructure and
technology is also matched in the
international operations, as exemplified by
the duplication of order picking capacity
in Peru, argentina, Chile and Mexico, and
the forthcoming launch of the natura
network in Chile, scheduled for 2015.
Service levels - Brasil
2011
2014
95,5%
84%
71%
6,8 days
40%
38%
4,5 days
on-time
deliveries
15%
Delivery
within 48
hours
Customer
service rate
average
delivery time
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sustai naBi Li tY Vision
think positive impact
the new sustainability vision combines strategic directives for 2050 and ambitions
to be achieved by 2020
LauNCHED IN 2014, the new
sustainability vision is fully aligned with
business strategy and is intended to
transform natura into a company that
generates positive impacts in every
dimension of its activities. What this means
is that its operations should improve the
environment and society, rupturing the
current paradigm whereby impacts are
merely reduced and mitigated.
the new vision consists of a set of
strategic guidelines to build this positive
impact for all the company’s businesses
by 2050, in addition to the targets natura
is committed to achieving by 2020. “the
vision clearly indicates the path we want
to follow. More than ever, this strategy will
guide not only product innovation, but
also innovation in all our work processes”,
networks vice president João Paulo
ferreira underscores.
the targets are organized in three
interdependent pillars (Brands and
Products; our network; and Management
and organization), the integrated
management of which will be incorporated
into organizational culture.
to further enhance the sustainability vision,
in 2014 natura also reviewed its materiality
matrix. after consulting stakeholders in
Brazil and in the international operations,
cross referencing perceptions with the
2020 ambitions and validation by senior
leadership, natura identifi ed fi ve new
priority topics that will help guide company
management and its interactions with key
stakeholders and society.
Priority topics
1. Solid waste: development of packaging
that provokes lower environmental impact
and promotes conscious consumption.
2. Climate change: reduction of greenhouse
gas emissions throughout the value chain, as
well as neutralization through projects that
generate social benefi ts.
3. Valuing social biodiversity: promoting
sustainable business through the use of
products and services coming mainly from
the Pan-amazon region.
4. Water1: relative reduction in
consumption and pollution of water
throughout the value chain and
neutralization of impact on water sources..
5. Transparency and origin of products:
increased visibility of natura business
practices and origins of its products
6. Education2: developing the consultant
network, employees, and public education.
1included due to the water crisis affecting southeastern
Brazil, where natura’s main operation is located; it
reflects the business’s high dependence on water and
the fact that it is one of its major impacts; 2in the
stakeholder consultation process, the topic was focused
on developing education for nCs. action fronts within
the topic were educational measures for employees and
suppor t for improvements in public education.
Pilars from the Sustainability Vision 2050
Natura’s Materiality Matrix
BRANDS AND
PRODUCTS
OUR
NETWORK
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MANAGEMENT AND
ORGANIZATION
4
6
2
5
3
1
non-prioritized
topics of the
vision
priority topics of
the vision for key
audiences
topics from the
vision prioritized
by stakeholders
and validated
as strategic by
leadership
Sustainability performance
Brands and products
2020 ambitions and
Our Network
2020 ambitions and
Not initiated
At planning stage
Underway
Technical and economic
feasibility study and analysis
stage, awaiting approval
Projects/initiatives at
pilot or operational
test stage
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Dimension
commitments
2014 Performance
Status*
Dimension
commitments
2014 Performance
Status*
Packaging
use at least 10% post-consumer
natura used 1.2% post-consumer
Employees
achieve rate of 50% women in
natura achieved the rate of 30%
recycled material in the total mass
recycled material in the total mass of
of natura packaging in Brazil
natura packaging in Brazil
1,4%
2013
2020
10%
Completion 2014
-2,3%
leadership positions (director level
women in leadership positions
and above) at natura
(director level and above)
Climate change
reduce relative greenhouse gas
natura’s relative greenhouse gas
Communities
Develop strategies for social
a strategy has been developed
29%
2013
2020
50%
Completion 2014
5%
Underway
biodiversity territories in the Pan-
and validated for the neighboring
amazon region and the communities
communities in Cajamar, nasp
around our main operations in Brazil
(são Paulo) and Benevides, as well
through dialogue and collaborative
as for the territories in the Médio
construction with the local
Juruá and Baixo tocantins – in the
populations and actors
northeast of Pará.
in the Médio Juruá and around
Benevides, territorial Development
Plans have been drafted involving
an agenda of projects, targets
and indicators that is shared with
other companies. the plans for
remaining territories and surrounding
communities are under preparation
emissions for natura brand by 33%
emissions increased by 2.2% in
(scopes 1, 2 and 3)
2014. against base-year 2012, the
accumulated reduction is 6.7%
0%
2012
2020
-33%
Completion 2014
21%
Social biodiversity
achieve a business volume of r$ 1
Business volume of r$ 197 million in
billion in the Pan-amazon region
2014. in the region, total accumulated
r$
millions
business volume from the base year
89
2010
2020
1.000
2010 is r$ 582.1 million
Solid waste
Collect and recycle 50% of the solid
Confi guration of integrated
waste generated by natura product
Management Project, the pilot
packaging in Brazil (in t equivalent)
of which will be initiated in the
second half of 2015. natura has
been discussing this issue with
organizations and companies to link
the entire reverse logistics chain
effi ciently and fairly
Completion 2014
54%
At planning stage
Water
for the natura brand in Brazil,
the study of natura’s water footprint
implement a strategy to reduce
began in 2014 and will be concluded
consumption and neutralize impact
in 2015. in addition to taking into
based on measurement of water
account the extended chain, the
footprint throughout the value chain
methodology measures levels of
Not initiated
biodegradability and ecotoxicity, that
is, the effects products may cause
on living organisms when they are
discharged into the environment
Supply chains
By 2015, ensure the traceability of
natura developed and implemented
100% of the inputs produced by the
the natura Biodiversity input supply
direct manufacturers (last link) and,
Chain Verifi cation system, aimed at
by 2020, implement a traceability
monitoring and developing these
program for the remaining links in
chains. the development of the
the natura brand value chain
strategy for tracing remaining inputs
will be initiated in 2015
Our Network
Dimension
Consultants
2020 ambitions and
commitments
2014 Performance
Status*
encourage interest in continuous
natura enhanced its educational
learning and provide an extensive
offerings for nCs, both online and
educational offer that meets their
in the classroom. in partnership with
needs
a specialized organization, a pilot
project involving 15 thousand nCs
offered vocational courses with
mixed online and classroom delivery.
200 courses from the escola Digital
platform were also included in the
Portal do Conhecimento (Knowledge
Portal), where e-learning measures for
consultants are concentrated
Management and Organization
2020 ambitions and
Dimension
commitments
2014 Performance
Status*
Management model
for the natura brand, implement the
natura has begun to develop a
evaluation of socio-environmental
methodology to evaluate its own
externalities, taking into account
environmental externalities and those
the positive and negative impacts
of the entire value chain. in addition to
At planning stage
of the extended value chain (from
solid waste and emissions, for which
the extraction of raw materials to
inventories are ready, the company will
product disposal)
fi nalize studies on its water footprint
in 2015 and is concluding methods of
measuring use of land and biodiversity
assets. these externalities will be
evaluated in 2015 and integrated into
the management model
At planning stage
Ethics and
transparency
for the natura brand, implant
after a diagnosis undertaken in 2014,
total transparency in the provision
which indicated that the data on
of information on products
product labels no longer refl ect all of
and evolution of the company’s
natura’s environmental initiatives, the
At planning stage
sustainability vision
environmental table on the packaging
will be updated in 2015. new
indicators were defi ned based on the
company’s new sustainability vision.
the way company communicates its
business practices and its sustainability
vision will also be enhanced
Underway
Governance of
implant an advisory Council
Planning for the advisory Council was
sustainability
comprising external specialists, to
initiated in 2014. after approval, it is
evaluate the company’s progress and
expected to be implanted in 2015
to further develop its strategy
At planning stage
*refers to achievement of ambition in 2014 relative to 2020 and to the base-year stipulated.
COMPA N Y’S PERSPECTIVE
The full list of ambitions and 2020 commitments may be consulted in the complete version of the Annual Report: www.natura.com.br/relatorioanual
17
Management and Organization
Ethics and transparency
Natura continually updates its processes to reinforce ethical behavior
throughout the company
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Neusa Nascimento, Rafael Avila and Claudineia Zorzela, Natura employees
Since itS beginni ng, Natura has continually reviewed
and enhanced its practices and processes in order to ensure
ethical and transparent conduct in the company. In 2014, with the
entry into force of Brazil’s new anti-corruption law, the company
developed a series of associated initiatives, such as mapping all
critical areas based on the degree of interaction with public
authorities, as well as the creation of more rigorous procedures for
selecting suppliers and accounting for payments.
The Code of Conduct was also updated in accordance with the
new law and to highlight certain key questions. Another important
measure was the development of two specific codes of conduct,
one for the sales force and the other for suppliers. Furthermore,
the Ombudsman channel was restructured, involving the contracting
of a partner specialized in business ethics, the expansion of the
telephone service, which is now available 24 hours a day, seven
days a week, in Portuguese, Spanish and English, and the creation
of a website (www.ouvidorianatura.com.br).
For the fifth year running, the Natura operation complied
voluntarily with the United States Sarbanes-Oxley Act, which
imposes a series of audit and security mechanisms designed to
prevent fraud.
For the first time ever, the operations in Argentina, Mexico and
Peru were also Sox compliant.
18
19
gOvErNA NCE
In constant movement
Evolution in management reflects Natura’s
commitment to best governance practices and its
future strategy
AFteR 2 5 YeARS in Natura, ten of
which as chief executive officer, Alessandro
Carlucci left the company in 2014, ending
a cycle of important achievements. To
take his place, the Board of directors
invited roberto Lima, who was a board
member in 2012 and 2013 and has broad
experience leading large corporations.
“Natura has an exemplary history and a
strategy in place to which I will strive to
contribute, remaining true to the principles
and values which have made this company
one of the most admired in Brazil and
abroad”, said Lima, who took over as CEO
of Natura in September.
In October, Silvia Lagnado was elected
to the Board of directors. She brings
relevant experience as a result of her
years of executive experience in the
international cosmetics and toiletries
market.
Also in 2014, the founding partners
Antônio Luiz Seabra, guilherme Peirão
Leal and Pedro Luiz Barreiros Passos
once again participated in the Board of
directors’ advisory committees, with the
exception of the Audit Committee, where
membership is restricted to external
members. Additionally, the company’s
related Parties Transactions policy was
disseminated to ensure that any decisions
with the potential to generate conflict
be taken transparently and in line with
Natura’s best interests.
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Dow Jones Sustainability Index
In 2014, Natura was listed on the New York Stock Exchange’s dow Jones
Sustainability Index (dJSI), a reference for investors who take socio-
environmental matters into consideration in their decision making.
during the year, the company also engaged with investors from Asia, and for the first
time ever organized a road show in Chile. Another advance was the reformulation of
the webpage for investors (http://natu.infoinvest.com.br/), underscoring data related
to the strategy, the commercial model and sustainability
Recognition of performance
A review of Natura’s variable remuneration policy was one of the People
Management area’s main priorities in 2014. The changes will include a new profit
share system for all managers, which will come into effect as of 2015. It comprises
four indicators:
-
-
-
-
Consolidated Ebitda (Brasil and International Operations): 40%
Country Ebitda: 30%
Socio-environmental indicators: 20%
Individual performance appraisal: 10%
The biggest B
Corporation in the
world
in tHe L ASt MOntH of 2014,
Natura received B Corp certification,
becoming part of a global network of
companies that associate economic
growth with the promotion of social
and environmental well being. This
commitment will be set forth in
the company’s bylaws – one of the
movement’s prerogatives. Natura thus
became the largest B Corp certified
company in the world, as well as the
first publicly traded company to obtain
this distinction.
For João Paulo Ferreira, vice president of
Networks, the achievement came at the
right time. “This certification underscores
our need to focus on short-term strategy,
but without losing sight of the long-term,
the company’s future. Our objective in
becoming a B Corporation is to maximize
value for society as a whole.”
The movement was born in the United
States in 2006, lead by the not-for-profit
organization B Lab. Today, it consists
of around 1,200 organizations in 38
countries. In Brazil, some 30 companies
participate in the movement.
gOvErNMENT ANd SOCIETY
Fairer and more supportive education
The Instituto Natura consolidates its position, forming partnerships that
promote learning by and for all
nAtURA HA S An AMbi tiOn
active role in the debate to formulate public policies that drive the
sustainable development of society. One of the areas in which the
company wants to do this is education, a key focus for its private
social investment strategy, conducted through the Instituto Natura.
the assumption of an
Created in 2010, the institute manages the funds raised by the sale
of Believing is Seeing products, which are subsidized by Natura
and promoted and sold by the consultants on a non-profit basis.
In 2014, consultant mobilization reached a record 20.15% of the
active network in Brazil, generating r$ 18.8 million in revenues from
product sales, also a record. These funds are invested in providing
support for the public education administrations, innovation in
educational technologies and educational and social transformation.
An example is the Education Support Network (rAE in the
Portuguese acronym), a program that builds bridges between
projects and public and private partners. In 2014, the network
was active in 26 municipalities in the northeast of Pará – a priority
region for the Amazon program created by Natura in 2011 –,
implementing the institute’s own projects such as the Trilhas (Trails)
literacy program for early learners, which has been recognized as
public policy by the Brazilian Ministry of Education since 2012.
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Brands and products
Ana Luisa de Toledo Camargo, Natura employee
PEOP LE MANA gEMEN T
A new way of working
CULTUrE
10 years of Natura Musical
Natura prepares its employees to execute
company strategy without losing sight of its
values and culture
company’s
bASeD On tHe
strategy for the future and new trends
in labor relations, Natura reviewed
its people management model and
its organizational culture. This broad
internal reassessment led to the
updating of the organizational design,
of the company’s forms of appraisal
and recognition, as well as its internal
communication strategy.
the introduction of 360º appraisal for all
employees based on the competencies
established for their positions. The
results will be discussed with the newly
created People Forum, which will then
draft an individual development plan
for each employee, define suitable
recognition (both financial and non-
financial) and determine the individual’s
next career steps.
The first step was to draft the new
profile of the Natura employee,
identifying the functional, behavioral
and leadership competencies required
for diverse positions within the
company. As a result of this process,
Natura developed its new appraisal
and performance management model
(already tested among management
level employees), which will come into
force in 2015. The main changes include
The major goal is to consolidate a team
that is even more prepared to meet
current and future business challenges
and to contribute effectively to achieving
the results expected by the company.
“We are clear about where we want
to get to, and it will require discipline
and persistence to reap the fruits of the
transformation we are undertaking”, says
Lilian guimarães, vice president of People
and Culture.
22
In 2015, Natura Musical, part of
the company’s cultural support and
sponsorship program, will celebrate a
decade of activities.
during this time, the project has
developed into a platform for the
renovation of Brazilian music, which is
disseminated to different audiences in
diverse manners. Examples are the Natura
Musical festival, with its free shows in
public areas, the Natura Musical website,
with exclusive contents, as well as an
online radio station.
recently the program was expanded, with
an increase from four to six public tenders
to select projects and fund them using the
company’s own resources or tax incentive
funding. In 2014, the selection processes
(one nationwide and five at state level:
Bahia, Minas gerais, Pará, rio grande do
Sul and São Paulo) attracted 4,226 entries.
30 proposals were selected.
2014 Natura Musical
-
r$ 8,4 million in private funds
+ r$ 6.7 million in incentive law
funding invested in Natura Musical in
2014
-
-
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45 projects underway
70 shows with an estimated total
audience of 100 thousand people
40 thousand people in the 14th
edition of Natura Musical Festival in
Belo Horizonte (Minas gerais)
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Collective learning
beLieF in Open and networked
innovation means that currently 60% of
Natura’s innovation projects are developed
jointly with more than 200 partners,
including companies, universities, research
institutions, test laboratories and foment
organizations.
By organizing an innovation marathon in
2014, the company strengthened its relations
with the MIT’s (Massachusetts Institute of
Technology) Media Lab based in Boston
(USA), which will receive two Brazilian
researchers selected in the initiative.
Behavior) is underway, with the defi nition of
a partnering university to host the research
center scheduled for 2015.
In Brazil, the unprecedented partnership
with the research body Fapesp (Fundação
de Amparo à Pesquisa do Estado de São
Paulo) for the creation of the Centro
de Pesquisa Aplicada em Bem-Estar e
Comportamento Humano (Center of
Applied research in Well-Being and Human
In 2014, the company also consolidated
its Innovation Hub, an offi ce in New York
(USA) dedicated to identifying trends in
conjunction with the Natura innovation
areas in Brazil: the global Innovation Center
in Cajamar, a science and technology center
in Benevides and NINA (Natura Amazônia
Innovation Center), in Manaus.
The company also maintained its Co-
creating program, which is open to Natura
customers, consultants and anyone who
identifi es with the brand and wishes to
participate in the conception of products
and services. Four co-creating journeys,
involving virtual and face-to-face dynamics
were organized in 2014, generating 884
contributions.
# U r B A N O
L U N A
E C O C O M PAC TO
E KO S 1 0 0 %
A M A z Ô N I A
S OA P S
N AT U r A
TO d O d I A
P L A N T
I N T E N S A
Main launches in 2014
S
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Juliana Rodrigues Calil, employee at the Natura
Global Innovation Center, in Cajamar
Creating via partnerships is the formula
IN NOvATION
representing a new
signature in the men’s
With fragrances and
bottles inspired by
Available in different
The line increased the
The entire product line was
Providing regenerative
Natura fragrances, with
concentration of the vegetable
repositioned with new formulas
cosmetic scalp therapy
perfume market. The
women’s sensuality and
prolonged perfume and
oils extracted from Amazon
that permit greater moisturizing
as an alternative to
concept speaks to a young
femininity
performance
social biodiversity assets in the
and more fragrance, as well as
moisturizing in the
public into the urban ar t
scene
bar soap noodles (base mass)
more functional and sustainable
hairdressing salon
packs that use green plastic
Natura strategy is intended to respond to current socio-environmental and
cultural challenges
Results
One e XAMpLe OF how the company
transforms socio-environmental challenges into new
business oppor tunities was the 2014 launch of the
Ecocompacto aerosol deodorant, enabling Natura
to enter a new segment offering a more sustainable
product. For Natura, entering this market was
an enormous challenge, because aerosols uses
propellant gases to propagate the antiperspirant
ingredient in the form of a spray or mist.
developed in Brazil, the pioneering Ecocompacto
resulted from a close par tnership between Natura
and its suppliers. It is a high-performance product,
employing 15% less aluminum, having half the
volume and generating 48% fewer greenhouse
gas emissions than conventional products, while
providing the same yield.
“For Natura, green technologies are the driving
force behind business growth. Increasingly, our
products will be developed in the forefront of
ecodesign and eco-effectiveness, involving the entire
value chain,” says gerson Pinto, vice president of
Innovation.
Ecocompacto
Gan h os dos produtos
Investment in innovation1
(R$ million)
Percentage of net revenue invested
in innovation
Number of products launched
(units)
Innovation rate2
-48%
lower GHG
emissions
Natura 's entr y into
aerosol deodorant
segment, where the
biggest market is
Brazil (22% share of
global deodorant
market)¹
-72%
emissões
de GEE
-20%
na compra do refil
dos frescores
100%
reciclado
pós-consumo
pack
volume
-50%
-15%
aluminum
100%
de ativos da
biodiver sidade amazônica e
154
produzido no Ecoparque
(PA) com justa repar tição
de benefícios com as
comunidades envolvidas
Gera
• redução de custos
para a Natura
• valor financeiro
e social para a
comu nidade local
2012
2013
207
216
3%
3%
2,6%
239
67,2%
63,4%
67,9%
179
104
2014
2012
2013
2014
2012
2013
2014
2012
2013
2014
12013 Euromonitor data
12013 Euromonitor data
Refis Frescores
1 Natura started to take some indirect innovation expenses and the cost of innovation in Latin America into account. The new metric is valid for 2013 and 2014; 2 The percentage of revenues from the sale of products launched in the last two years.
Sabonetes 100% Amazônia
24
25
Resultados
Receita líquida
(em R$ MM milhões)
Receita líquida OIs
(em R$ MM por ação)
+13% a.a.
+40% a.a.
2009: 4242,1
2013: 7010,3
2009: 292
2013: 1130,1
Dividendos
(em R$ por ação)
Número de CNs
(em milhares)
+10% a.a.
+12% a.a.
2009: 1,37
2013: 1,99
2009: 1038,9
2013: 1656,5
Emissão relativa de CO2
(kg de CO2e/kg de produto)
-6% a.a.
2009: 3,55
2013: 2,79
Programa Amazônia
Consumption of Amazonian inputs as percentage
of total Natura consumption (%)
30
11,4
13,4
13,3
2012
2013
2014
2020 ambition
Accumulated business volume in
Pan-Amazon region1 (R$ million)
1.000
582
385
122
2012
2013
2014
2020 ambition
1Base year 2010.
BLENDER
EXTRUSION
STAMPING
PACKING
NOODLES WITH
BIODIVERSITY
ACTIVE
INGREDIENTS
+
BIODIVERSITY
ACTIVE
INGREDIENTS
+
ADDITIVES
PHASE 3
FINALIzATION
OF PrOdUCTION
IN THE NATUrA
SOAP PLANT
When the noodle is
ready, additives and
other biodiversity
active ingredients
are blended into
the soap mass.
The ingredients
are subject to
the additional
production stages
and the soap is
fi nalized in the
Ecoparque plant.
Vegetable
blend
Biodiversity
oils
Saponification
Additives
Drying
NOODLE
CONTAINING
BIODIVERSITY
ACTIVE
INGREDIENTS
PHASE 4
dISTrIBUTION OF
THE NATUrA EKOS
100% AMAzÔNIA
SOAP BArS
Third-party providers transport the
soap to the distribution centers.
The distribution centers pick the
orders and deliver the product to the
Natura consultant’s home.
With the Natura Network online
platform, the soap may also be
delivered directly to the customer’s
home.
Customers acquire
a high added value
product, leveraging
the potential of the
Amazon region’s
social biodiversity.
ECOPARQUE
DIST RIBU TION
CEN TERS
CON SULTANT’S
HOME
CLIENT’S
HOME
COMM UNITIES
(RETU RN IN
THE FORM OF
FUNDS )
J O U R N E Y O F N AT U R A E KO S
1 0 0 % A M A Z Ô N I A S O A P
With the inauguration of the Ecoparque in Benevides (Pará), all the stages of the Natura Ekos soap manufacturing process were concentrated
in the Natura soap factor y. In parallel, more social biodiversity active ingredients were added to the formulation. Previously, the products were
finalized by third-par ty contractors in Minas gerais and São Paulo.
PHASE 1
EXTrACTION OF THE
vEgETABLE OIL
Natura’s partnering supplier
communities use sustainable
management techniques to extract
oils from plants that make up the
region’s biodiversity: açaí berries,
murumuru palm, andiroba, buriti
palm etc.
The communities
receive an amount
related to benefit
sharing. This foments
local entrepreneurship
and a standing forest
economy.
AÇAÍ BERRIES
ANDIROBA
BURITI PALM
AND
OTHERS
PHASE 2
PrOdUCTION OF
THE SOAP NOOdLES
IN THE NATUrA
SOAP PLANT
The oils extracted
from biodiversity
ingredients are
inserted during the
noodle (dry soap
mass shaped like a
noodle) manufacturing
process.
Resultados
Receita líquida
(em R$ MM milhões)
Receita líquida OIs
(em R$ MM por ação)
+13% a.a.
+40% a.a.
2009: 4242,1
2013: 7010,3
2009: 292
2013: 1130,1
Dividendos
(em R$ por ação)
Número de CNs
(em milhares)
+10% a.a.
+12% a.a.
Sodium
hydroxide
2013: 1656,5
2009: 1,37
2013: 1,99
2009: 1038,9
Emissão relativa de CO2
(kg de CO2e/kg de produto)
-6% a.a.
2009: 3,55
2013: 2,79
Programa Amazônia
Consumption of Amazonian inputs as percentage
of total Natura consumption (%)
30
11,4
13,4
13,3
2012
2013
2014
2020 ambition
Accumulated business volume in
Pan-Amazon region1 (R$ million)
1.000
582
385
122
2012
2013
2014
2020 ambition
Relative CO2
emissions
(kg of CO2e/kg of product invoiced)¹
Post-consumer
recycled material
in finished product
packaging
in Brazil
Recyclability
(recyclable material
in finished product
packaging)2
in Brazil
Eco-efficient
packaging3
in Brazil
S
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d
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P
d
N
A
S
d
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B
3,21
2,93
3
1,6%
1,4%
83,7%
1,2%
56%
57,5%
29%
21,7%
13,4%
2012
2013
2014
2012
2013
2014
2012
2013
2014
2012
2013
2014
1There were changes in the gHg inventory emissions factor. The 2012 and 2013 were restated to ensure comparability; 2In 2014, the indicator incorporated additional recycling feasibility factors in Brazil, and the 2013 amount was restated to ensure
comparability; 3Eco-efficient packs are those that represent a reduction of at least 50% in weight compared with a similar/ regular pack; or which consist of 50% post-consumer recycled material and/or renewable non-cellulosic material, as long as there is
no increase in mass.
Essencial:
pack provides
information on
percentage of post-
consumer recycled glass
EC O-EFFI CIENC Y
More recyclable and recycled materials
The refill for the Natura Ekos line of perfumes is yet another example
of innovation in sustainable technologies
innO vAtin g tOwARDS a
positive impact for the business, society
and the environment. This phrase is an
excellent illustration of the way one of
the main novelties in the Natura portfolio
was developed in 2014: these are the
refills for the Natura Ekos Frescores line
of fragrances, made from 100% recycled
post-consumer PET containers, generating
72% fewer greenhouse gas emissions.
With this launch, Natura became the first
major cosmetics brand to use this type of
material in the perfume category.
After enhancing the facilities of partnering
glass recyclers, at the beginning of 2015
the company included 20% recycled post-
consumer premium category glass in the
packs of some perfume brands.
Nowadays the innovation and product
development areas have an integrated
calculator to measure environmental gains
and losses, enabling the estimation of the
potential environmental impact in terms
of emissions, solid waste and quantity
of recycled post-consumer material
generated.
2014 rESULTS
The year saw a 2.2% increase in Natura’s
relative emissions, as a result of revenue
growth below initial estimates. This is
because a percentage of the emissions is
related to the operation’s fixed structure
the cost of which does not vary in function
of the annual production volume. Even so,
considering 2012 (the base year for the
new target of an additional 33% reduction
in emissions by 2020), there was an
accumulated reduction of 6.7%. According
to the company’s Sustainability manager,
Keyvan Macedo, it is expected that it will
be easier to achieve the new target from
2017 on, when specific projects that will
contribute more effectively to reductions
will be launched.
The proportion of post-consumer recycled
material used, targeted to reach 10% by
2020, was 1.2% in 2014. This represents
a slight reduction due to the variation in
the product mix (lower sales of products
using post-consumer recycled materials or
higher sales of products not using recycled
material). An expansion will be implanted
to ensure the 2020 target is achieved.
Eco-efficient packaging increased by 7 p.p.,
corresponding to 29% of the total.
After remaining stable for three years,
water consumption also increased by 11%,
due to the lower production volume, the
expansion of the Cajamar industrial unit
and the opening of the Ecoparque.
Radical transparency
In line with the new sustainability
vision which intends to implant total
transparency in the provision of product
information, from 2015 the packaging for
the entire Natura portfolio will present
a new environmental table. After a study
conducted in 2014 and based on best
market practices, a series of new indicators
have been defined, as has the best way of
communicating these.
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Our Network
A powerful social network
K
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Lívia Santos da Conceição, Natura
Consultant in Salvador
The aim is to continually enhance the value proposition for the
consultant network, supported by new technologies
bASeD On A FiRM beLi eF in the power of relationships,
Natura chose the direct selling model to deliver its portfolio to
customers. Today the company has more than 1.3 million consultants
in Brazil and over 400 thousand in its International Operations.
In 2014, NCs all over Brazil gained an additional channel for
generating business: the Natura Network. This enables consultants
to have their own webpage on the internet as a vehicle for building
relationships and commercializing products, combining this format
with traditional direct selling and boosting their productivity.
The Natura Network has been attracting a new consultant profile.
These are generally younger people who feel at home in the virtual
environment and who tend to prefer not to have to deal with
operational factors, such as payments and delivering product to
customers. This is the case with rafael gustavo Noris (25), from the
town of Pedreira in São Paulo state. Owner of a book store, rafael
has also been a digital consultant since October 2014. “The space is
very accessible and easy to operate, I do not have to worry about
payments and the company provides me with different kinds of
support materials for promotional purposes”, he states.
With the Network in nationwide operation, the challenge now is
to gain more in-depth understanding of the profile of consultants
operating in the digital environment. This will permit Natura to
provide them with ongoing targeted training, driving business
growth throughout the network.
The company is also testing its first multi-category offering via the
Natura Network. For the time being available in São Paulo state,
Natura + involves the commercialization of fashion and household
products developed by partnering entrepreneurs and available
exclusively via the internet.
Digital business
relationship managers (Natura employees):
have access to a tablet which facilitates
their activities. There are also exclusive
order capture applications for tablets and
smartphones that expand relationship
possibilities in the Natura encounters and
other events.
NCAs (Natura Consultant Advisors): with
a tool developed in SMS messaging format,
the NCAs may access information on the
sales cycle status and monitor individual
consultants more closely.
NCs (Natura Consultants) and customers:
also in SMS format, customers are able
to locate an NC and make purchases by
sending a message with the word Natura to
the number 28128.
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I
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R
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F
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K
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K
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O
Sônia Ceneviva, Natura Consultant in Catanduva (SP),
presides an organization supporting women with
cancer. Marisa Cabral, a Natura customer from the
city of São Paulo, collaborates with Sônia’s initiative.
The two are connected by the Movement
Legenda de Imagem com o nome da Déborah
Salles e Fernanda Érika
K
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Top left:
Anadelli Soares Braz,
a consultant who
participates in the
Natura Movement. She
organizes a project
aimed at providing
young people with
professional training in
the city of São Paulo
Top right:
The consultant Celma
grace de Oliveira in
the NgO she created
to train female artisans
in goiânia (goiás)
Bottom left:
In Manhumirim
(Minas gerais), the
consultant Flávia dias
Herculano heads a
recyclable waste
picker cooperative
Bottom right:
The consultant Iria de
Sá Pinheiro teaches
music to children and
adolescents in the region
of Tartarugalzinho
(Amapá).
The project is part of
the Natura Movement
Training courses explore virtual world
tRAining AnD DeveLOpMent
initiatives for consultants also made inroads into
the digital world. In the second half of the year, the
company introduced an online version of the Natura
Encounter, a product communication event organized
every sales cycle. In par tnership with the Instituto
Natura, the company’s e-learning platform, known as
the Knowledge Por tal, hosted a pilot project to boost
the training por tfolio on offer. After a sur vey, 200
vocational courses from the Escola digital platform
were included in the por tal.
The same initiative led to a par tnership with the
company Prepara Cursos for the offer of vocational
courses delivered in a combined face-to-face and
online format. Around 15 thousand consultants had
access to a free course on personal finance and
other programs offering special payment terms were
also made available. 80% of the NCs taking courses
rated the experience as good or very good.
HDI-NC
In 2014, Natura took measures to create an index
capable of measuring the impact of the company’s
business model on the human development of its
consultant network. This was inspired by the HdI
(Human development Index), adapted to the reality
of the direct selling model and Natura. The HdI-NC
will be measured on an annual basis and its results
will feed the development of specific action plans.
Natura Movement
in new format
Since 2006, the Natura Movement has been the major
channel through which the company supports and
encourages NCs to engage in actions aimed at socio-
environmental transformation. In 2014, the movement
went beyond the boundaries of the company and the
consultant network, becoming a digital platform that
connects the diverse initiatives with people interested
in participating in them. Social entrepreneurs, including
Natura consultants, may file their initiatives on the
website www.movimentonatura.com.br. Once an
initiative has been selected by Natura, it is shared with
everyone. People who are interested in supporting
a project may declare their skills and interests, and
the Natura Movement will then help them to find an
initiative that requires someone with the profile they
have posted.
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K
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Closer and closer
Knowing in order to grow
K
r
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T
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N
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Monitoring center in the city of São Paulo tracks the NCs’
and customers’ buying experience on the digital platforms
Ivanildo Melo is the director of the Camtauá cooperative,
supplier of the active ingredient andiroba which enhances the
Natura Ekos line
FASteR, MORe integRA teD and connected with the
world. A company that is closer and readily available, with products
and services driving well being well the way everyone wants it and
needs it. These are the drivers through which Natura intends to
revitalize its direct selling model, with initiatives that offer expanded
shopping experiences. To do this, the company has increased its
use of CrM (Customer relationship Management) tools and data
analysis to segment offers, channels and communication, supporting
consultants in the activation of their customer portfolio. “Companies
need to recognize the needs of each customer profile in mass
markets. Our recent investments in technology enable us to do this,
but the investments will continue”, states Agenor Leão, Natura’s vice
president of digital Technology.
In 2014, the extension of the Natura Network to the whole of Brazil
provided customers with yet another option for access, with the
facility of online payment (credit card or payment order) and faster
delivery, directly from Natura. With the extension of the platform, the
company launched the Natura Closer movement, offering exclusive
products, promotions and gifts during the 2014/2015 summer season.
The movement encouraged customers to look for the NCs during
this period, either in person, via the internet or via SMS message, the
company’s latest novelty.
The new experiences on offer include the Natura gift Card, which is
currently available in the whole of the state of São Paulo. The cards may
be acquired the same way as any other items in the Revista Natura.
AS SOOn AS it included the sustainable use of biodiversity
ingredients in its business platform, Natura was faced with the
challenge of managing its supply chains efficiently and ensuring
traceability. Even though this monitoring already existed in
almost all the chains, there was still a lack of systematized
information in a robust, secure data bank that could be audited
and used for crop planning.
such as investments under taken, production levels and local
infrastructure, as well as integration with other corporate
management systems. With mobile tools (tablets used by
the field teams),it is possible to consult, collect and update
information on family farmers and cooperatives, including
photographic documentation.
This became possible in 2014 with the implementation of
the Natura Social Biodiversity system. As Mauro Costa, Social
Biodiversity Supply and relationship manager in the Supply area,
explains, this is a geographic information system that enables
online localization of all the chains and access to indicators
To forge closer ties with the company’s some 5 thousand
suppliers, in 2014 Natura implemented a more efficient supply
management tool which drives greater process transparency. The
company also consolidated its Supplier Committee, a forum in
which the terms and conditions of par tnership may be defined
and the demands of these stakeholders may be aired.
34
35
Vice President of Finance and Institutional Relations
roberto Pedote
Corporate Affairs
Marcelo Bicalho Behar
Institutional Communication
Newton Branda
Coordination of the Annual Report
Jaqueline Nichi
Support
Francisco Higa and rafael Seara (valuepoint)
Corporate Finance
Financial information
Alexandre Nakamaru, José Wanderley and Enzo russo
Market relations
Fabio Cefaly and Tatiana Carvalho
Sustainability
Luciana villa Nova and Juliana Pasqualini
Copy and sustainability consulting
report Sustentabilidade
Editing Álvaro Almeida (MTb 45.384/rS), Talita Fusco (MTb 11.615/Mg)
and Michele Silva (MTb 11.829/rS)
Reporting Fernanda Mori and gabriela Scheinberg
Project and relationship management Ana Souza
Materiality and GRI consulting victor Netto and Tatiana Lopes
Revision
Assertiva Produções Editoriais
Art direction and graphic design
Trip Editora
Chief editor Paulo Lima
Superintendent Carlos Sarli
Editorial director Fernando Luna
Creative director Ciça Pinheiro
Director Claudio govêa
Copy director Andréa de Marco
Account managementAriane Komatsu
Art ricardo Martini and Thiago Freitas
Designers Frederico Floeter and Beatriz Midon
Executive production Carol gariani
Photography Marlos Bakker, vavá ribeiro, Melissa duarte, Eduardo
delfin, Kiko Ferrite, Marcos Suguio and Acervo Natura
Illustration Eva Uviedo
Acknowledgements Atelier Carlos Motta
Translation to english
raymond Maddock
Printing
Stilgraf
All carbon emissions related to the production of this report have been offset.
NATU3
BM&FBOVESPA
®
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Tel. +33 1 53 64 21 00