Natura Cosméticos (NATU3) Q4 2025 earnings summary

Executive summary

• Completed corporate simplification and streamlining, including sales of Avon International, CARD, Central America, Dominican Republic, and Russia, and finalized reverse merger, returning NATU3 shares and optimizing holding structure.

• Integrated Natura and Avon in Mexico and Argentina, with operational focus shifting to Brazil and Hispanic America amid macroeconomic uncertainty.

• Achieved recurring EBITDA margin expansion, reduced transformation costs, and implemented a new, more agile business model.

• Net income from continued operations reached BRL 974 million for FY25, with Q4 net income at BRL 620 million, more than double Q4 2024 (excluding non-recurring items).

• Advanced ESG agenda, reducing carbon footprint and increasing recycled packaging, earning top sustainability recognitions.

Financial highlights

• Q4-25 net revenues: BRL 6,193 million, down -12.1% YoY; FY-25 net revenues: BRL 22,218 million, down -5.0% YoY.

• Underlying EBITDA Q4-25: BRL 978 million (15.8% margin, +700 bps YoY); FY-25: BRL 3,132 million (14.1% margin, +190 bps YoY).

• Net income from continued operations: BRL 620 million in Q4-25, BRL 974 million in FY25 (excluding divestment expenses and one-offs).

• Free cash flow to firm for FY-25: BRL 753 million, down BRL 276 million YoY, mainly due to inventory build-up and working capital deterioration.

• Net debt at Q4-25: BRL 3.5 billion, leverage ratio 1.57x (1.31x excluding TBS provision), improved by 0.96x QoQ.

Outlook and guidance

• 2026 positioned as the start of a new growth cycle, with focus on Natura brand leadership and revenue acceleration in Mexico and Argentina.

• Avon brand relaunch planned for March 2026, with recovery expected to be gradual and tied to innovation pipeline.

• Confident in further margin expansion in 2026, driven by operational efficiencies, new organizational model, and cost discipline.

• Targeting historical cash conversion levels (~60%) in 2026 as working capital normalizes and transformation costs end.

• Measures in place to mitigate execution risk and ensure sustainable revenue growth and robust cash generation.