Strong performance of Natura Brand in Brazil combined with solid margin results from the Wave 2-implemented countries led to YoY profitability evolution and more than offset Avon International’s margin contraction amid sales deleverage

SÃO PAULO, May 14, 2024 /PRNewswire/ — Natura &Co’s (B3: NTCO3) first quarter 2024 financial results (Q1-24), released today, showed increased profitability driven by solid results from Natura &Co Latam, which is benefiting from the integration of Natura and Avon in the region (referred to as ‘Wave 2’), coupled with richer country and brand mix. This more than offset the margin contraction at Avon International amid sales deleveraging. Natura &Co’s consolidated net revenue reached BRL 6.1 billion in Q1-24, up 1.1% vs Q1-23 in constant currency (CC) and down 5.7% year-on-year (YoY) in Brazilian Reais (BRL).

At Natura &Co Latam, Q1-24 revenues grew 3.1% YoY in CC. Natura Brazil was again the highlight, reporting an 11.3% YoY increase in Q1-24 revenues, attesting strong momentum despite the tough comparative base from Q1-23 when the brand had achieved a 25% YoY growth rate in the region. This performance includes retail sales which showed robust growth in the country, fueled by solid same-store sales and a still strong pace of store openings. The brand opened 132 stores in the last twelve months (13 own and 113 franchised), reaching a total network of 896 stores (115 own and 781 franchised). The results were also boosted by the successful launch of a fragrance sales campaign called “Perfumada”, which contributed to a richer product mix.

This strong result in Natura Brazil was offset by Avon Latam, which is still delivering soft top-line, with revenues down 11.3% in Brazil and 11.8% in Hispanic Latam, as a result of the impacts in the regions where Wave 2 was already implemented, including a smaller number of representatives in the base. Worth noting that Avon Brazil already showed improving top-line trends throughout the quarter.

Avon International had a slow start in Q1 in terms of revenue, down by 4.7% YoY in CC. Despite a decrease in revenue, primarily attributed to challenges in the direct selling channel, Avon showed resilience in other areas. Efforts to strengthen Gross Margin and streamline operations led to only a slight decrease in Adjusted EBITDA margin of -60 bps YoY (ex TBS) despite sales deleverage. The company is also actively exploring opportunities from other distribution channels, including retailers. Avon is already being sold in the UK via Superdrug, in Italy via Naima stores and in Turkey via representative’s retail franchise stores.

Improved consolidated profitability is principally attributed to the expansion of gross margin that reached 65.2% in Q1-24, up 90 bps vs. Q1-23 driven by the strong gross margin expansion from Latam (+170 bps). Adjusted EBITDA reached BRL 683 million, and adjusted EBITDA margin expanded 110 bps YoY.

Q1-24 reported net loss was BRL 935 million, compared to a net loss of BRL 652 million in Q1-23, impacted by discontinued operations, higher taxes from country mix and FX losses and hyperinflation accounting impacts. The Underlying Net Income, which is net income excluding transformation costs, restructuring costs, discontinued operations and PPA effects, was BRL 116 million (vs. a loss of BRL 373 million in Q1-23 or BRL 260 million excluding TBS and Aesop). Excluding the one-off of BRL 137 million of losses related to transferring cash out from Argentina, Underlying Net Income would be a profit of BRL 21 million in the quarter.

Fabio Barbosa, Group CEO of Natura &Co, commented: “We are encouraged that the first quarter of the year showed positive recurring results with a consolidated margin expansion of 110 bps vs previous year, driven by solid results from Natura &Co Latam, benefiting from the Natura and Avon integration in the region, coupled with richer country and brand mix. This more than offset the margin contraction at Avon International amid sales deleveraging. From a cash conversion perspective, seasonal cash consumption also improved on a YoY basis to BRL-1.0 billion (excluding one-off discontinued operations tax payments), compared to a pro-forma (excluding TBS) of BRL -1.4 billion in the same period last year or BRL -1.8 billion reported in Q1-23.

The ongoing roll-out of Wave 2 is a pivotal step in our transformational process, and although we have experienced expected and unexpected challenges in its implementation, we continue to see sustainable improvements in key metrics such as productivity, cross selling, and better portfolio mix, resulting in gross margin improvement in all countries where Wave 2 was implemented. In Brazil, Avon still experienced headwinds impacting the top-line, but with an improving trend month over month, and we expect Avon’s top-line to stabilize in the second half of the year. We also saw significant margin expansion in Peru and Colombia as Wave 2 results start to impact the P&L in full while investments in channel and other one-offs start to fade away.

As expected, our integration initiative is driving improved savings in both G&A and selling expenses, although the latter is being offset by higher marketing investments and other initiatives focused on improving service levels. The solid start to the year gives us confidence that the initiatives we are implementing are beginning to deliver the expected results and we are extremely confident with the potential of the integration of both brands in Latam.

Avon International had a slow start of the year, following a solid Q4 2023 profitability performance. The new management team took office in January and is working on simplifying the market, focusing on key countries, and enhancing our portfolio with superior promotional execution. We believe these steps are crucial to stabilize revenues and keep us on track to improve profitability.

We are also continuing to study a possible separation of Avon and Natura, as we announced in February, in line with our goal of simplifying our corporate structure and giving more autonomy to the business units. We will inform the market as soon as we have news on this subject.

Lastly, but certainly not least, our hearts go out to all those affected by the devastating floods in the Rio Grande do Sul region of Brazil. We are closely monitoring the situation and extending our support to our vast network of nearly 100,000 people in the area, including Beauty Consultants, colleagues and partners. Through telemedicine and our Social Center, we are providing critical medical, social and psychological support. In addition, Natura &Co Latam will replenish lost inventory, forgive debts, defer payments for affected consultants and franchisees, and has designated two spaces as donation hubs for several companies to facilitate logistics. All these initiatives already exceed the amount of BRL 10 million.

With the aim of engaging our network to continue supporting those most affected, we have launched a matching funds initiative to help consultants most affected by the floods to rebuild their homes. For every real donated, Natura commits to matching it with another real. We expect to reach one million reais by May 30th.”

The full earning report and financial statements can be accessed at https://ri.naturaeco.com/en/.

About Natura &Co

Natura &Co is a global purpose-driven group uniting Natura and Avon brands. We connect more than 200 million clients worldwide, engaging them through 7 million dedicated Consultants and Representatives, 900 stores and franchises, and 22,000 employees. 

We believe in promoting real positive economic, social, and environmental impact. We believe that the world does not need another big company. The world needs symbols of change capable of blazing new trails and inspiring others to follow. We believe in the power of cooperation, co-creation, and collaboration for a better way of living and doing business. 

We are Natura &Co. 

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Leveraging Infosys Cobalt to deliver industry-leading infrastructure-managed services

BENGALURU, India, May 14, 2024 /PRNewswire/ — Infosys (NSE: INFY) (BSE: INFY) (NYSE: INFY), a global leader in next-generation digital services and consulting, today announced a multi-year strategic collaboration with First Abu Dhabi Bank (FAB), the largest bank in the United Arab Emirates (UAE), to optimize and modernize FAB’s IT infrastructure services.

As part of this collaboration, Infosys will leverage Infosys Cobalt, a set of services, solutions, and platforms for enterprises to accelerate their cloud journey, to deliver industry-leading, infrastructure-managed services, including service desk capabilities, to transform FAB’s IT infrastructure. Infosys will help integrate a suite of enterprise tools to drive significant improvements in FAB’s service quality, risk reduction, and business outcomes. These include:

• Artificial Intelligence- (AI) and Machine Learning (ML)-based automation, providing self-healing and self-help capabilities.
• Proactive and prognostic monitoring and observability, improving the resilience of the infrastructure estate.
• Blueprint-based environment provisioning, helping to reduce provisioning time exponentially, allowing faster time to market.
• Leveraging Infosys Topaz, an AI-first set of services, solutions, and platforms, using generative AI technologies to improve productivity and efficiency.

The collaboration aims to transition to an outcome-oriented, automated-managed services model that delivers high-quality, compliant IT services with increased speed and agility. In the long term, it will also establish a highly scalable and flexible IT infrastructure. 

The Middle East is a strategic growth market for Infosys, and this collaboration furthers Infosys’ committed focus in the region to enable large enterprises to navigate their cloud-first, digital-first, and AI-first journeys.

Suhail Bin Tarraf, Group Chief Operating Officer, First Abu Dhabi Bank (FAB), said, “At FAB, we are committed to transforming our IT organization and delivering world-class services that drive tangible business outcomes. After a thorough evaluation, we selected Infosys as our strategic partner due to their proven expertise, innovative solutions, and the strong trust they built at all levels. Infosys’ outcome-oriented managed services model coupled with their automation-powered delivery approach will help us significantly improve service quality, compliance, and operational efficiency.”

Dennis Gada, Executive Vice President and Global Head of Banking & Financial Services, Infosys, said, “We are delighted to collaborate with First Abu Dhabi Bank to optimize and modernize their IT infrastructure services, by leveraging Infosys Cobalt and Infosys Topaz. FAB recognized the need to transform their IT operating model, and entrusted Infosys with their IT infrastructure, enabling their digital journey to proceed faster and with more resilience on the backend. By leveraging our global expertise and investments in AI, cloud and infra, Infosys will also enable FAB to transition to an outcome-oriented, automation-driven execution model and help position it as a digital leader in the financial services industry.”

About First Abu Dhabi Bank:

Headquartered in Abu Dhabi with a strategic global footprint across 20 markets, FAB is the finance and trade gateway to the Middle East and North Africa region (MENA). With total assets of AED 1.2 trillion (USD 323 billion), FAB is among the top 50 banks globally by market capitalisation and one of the world’s largest banking groups. The bank provides financial expertise to its wholesale and retail client franchise across four business units: Investment Banking, Corporate and Commercial Banking, Consumer Banking, and Global Private Banking. FAB is listed on the Abu Dhabi Securities Exchange (ADX) and rated Aa3/AA-/AA- by Moody’s, S&P and Fitch, respectively, with a stable outlook. On sustainability, FAB holds an MSCI rating of ‘A’, also ranked among the top 10% of banks globally by Refinitiv’s ESG Scores and the best performer in the MENA region.

For further information, visit: www.bankfab.com

About Infosys

Infosys is a global leader in next-generation digital services and consulting. Over 300,000 of our people work to amplify human potential and create the next opportunity for people, businesses and communities. We enable clients in more than 56 countries to navigate their digital transformation. With over four decades of experience in managing the systems and workings of global enterprises, we expertly steer clients, as they navigate their digital transformation powered by cloud and AI. We enable them with an AI-first core, empower the business with agile digital at scale and drive continuous improvement with always-on learning through the transfer of digital skills, expertise, and ideas from our innovation ecosystem. We are deeply committed to being a well-governed, environmentally sustainable organization where diverse talent thrives in an inclusive workplace.

Visit www.infosys.com to see how Infosys (NSE, BSE, NYSE: INFY) can help your enterprise navigate your next.

Safe Harbor

Certain statements in this release concerning our future growth prospects, or our future financial or operating performance, are forward-looking statements intended to qualify for the ‘safe harbor’ under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results or outcomes to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the execution of our business strategy, our ability to attract and retain personnel, our transition to hybrid work model, economic uncertainties, technological innovations such as Generative AI, the complex and evolving regulatory landscape including immigration regulation changes, our ESG vision, our capital allocation policy and expectations concerning our market position, future operations, margins, profitability, liquidity, capital resources, our corporate actions including acquisitions, and cybersecurity matters. Important factors that may cause actual results or outcomes to differ from those implied by the forward-looking statements are discussed in more detail in our US Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2023. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company’s filings with the Securities and Exchange Commission and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.

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LONDON, May 14, 2024 /PRNewswire/ — IRIS Software Group, a leading global software provider of accounting, edtech, payroll and HR solutions, today released the results of its anonymous poll of UK-based accountants, conducted during February and March 2024. Accountants responded to 13 multiple-choice questions pertaining to pricing, AML compliance, and cybersecurity confidence.

How much do accountants charge across the UK?

• Tax returns: 90% of respondents charge between £126 and £400 for a tax return. The remainder charge £400 to £600 with 1% charging over £600.
• Bookkeeping: 84% charge between £25 and £40 for bookkeeping per hour. The remainder charge more than £40 per hour.
• Set of accounts: 78% charge between £500 and £1000 for a set of accounts, with 22% charging more than £1000.
• Advisory services: 38% of accountants offer advisory services are part of their compliance work. 60% charge separately and 2% do not offer advisory services.

Process and efficiency
63% of survey respondents indicated that they need to strengthen their efficiency, yet 56% still use paper-based processes to handle anti-money laundering (AML) compliance, 72% have not mapped out and documented their processes in over 18 months, and 53% still monitor and manage workflow tasks in spreadsheets.

Cybersecurity preparedness

• High cybersecurity confidence: The majority of accountants feel confident that their firms are protected against potential cybersecurity attacks, with accountants in the North West feeling the most confident (77%) and accountants in the Midlands feeling least confident (46%).
• Multi-factor authentication: Accountants in Scotland are more likely (62%) to utilize multi-factor authentication (MFA) than those in Northern Ireland (35%). For accountants in the North West, the Midlands and the South East, MFA usage was split down the middle, with 55%, 48%, and 45%, respectively.
• Reliability: Only 6% of respondents in Northern Ireland experienced ‘slow downs’ in the speed of their internet connection during peak times of usage, compared with 36% in Scotland.

Commenting on the research, Mark Chambers, Managing Director for Accountancy at IRIS said: “Digitisation and automation not only help accountants work smarter and spend less time on manual tasks and compliance obligations, but also free up capacity to take on higher-value advisory roles. This said, in a landscape of cybersecurity threats, it’s essential for accountancy practices to adopt multi-factor authentication and conduct rigorous evaluations of technology suppliers. The Government’s Cyber Essentials self-assessment and certification is a strong benchmark and standard to adopt.”

Notes to editors:

The anonymous IRIS poll received 139 responses.  The full dataset is available on request.

About IRIS Software Group
IRIS Software Group is a global provider of mission critical software and one of the UK’s largest privately held software companies. IRIS provides software solutions and services for finance, HR and payroll teams, educational organizations, and accountancy firms that takes the pain out of processes and lets professionals focus on the work they love. Through simplifying, automating and providing insights on everyday mission critical tasks for organizations of all shapes and sizes, IRIS ensures customers can look forward with certainty and confidence.

IRIS is the largest third-party online filer with the UK Government. Ninety-three of the top 100 UK accountancy firms use IRIS software. One in six of the UK’s workforce is paid by IRIS payroll offerings, and globally, six million employees receive their payslip via IRIS software every month. More than 850,000 UK employees are managed by IRIS HR solutions. Over 12,000 UK schools and academies use IRIS, with four million parents and guardians using IRIS apps to connect with their children’s school; 300 million messages are delivered between schools and parents each year, and over £15 million transactional payments are processed every month. IRIS is certified as a Great Place to Work® and recognized as one of The Times Top 50 Employers for Gender Equality in 2023. IRIS is also recognized as one of the Best Workplaces for Wellbeing, one of the Best Workplaces in Tech and one of the Best Workplaces for Women.

To see how IRIS helps organisations get things right first time, every time, visit www.iris.co.uk or follow IRIS Software Group on LinkedIn, Twitter and Instagram.

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