Natura & Co, which owns the brands Natura, Aesoap, The Body Shop and Avon, posted a consolidated net revenue growth of R $ 7.5 billion in the 1Q, up 1.9% (or a 6.2% at constant currency), given the strong growth at Natura in Brazil and Hispanic Latam and Aesoap, as well as an increase in digital sales acrpss all brands. The Group’s e-commerce has accelerated exponentially since mid-March. Total group e-commerce sales grew nearly 250% in recent weeks vs prior year.

However, the reported net loss was R$820.8 million, compared to the R $ 82 million loss for the same period in 2019. According to the companu, the result “was impacted by a higher effective income tax rate due to non-deductible acquisition-related expenses and effects of PPA at The Body Shop, related to deferred tax liabilities in the United Kingdom (reversion of the nominal tax rate from 17% to 19%). ”

The adjusted EBITDA in BRL was R $ 571.5 million in the period, while last year’s was R $ 722.6 million, a decrease of 20.9%. Natura ended the quarter with a strong cash position of R $ 4.6 billion (R $ 3.6 billion in cash and R $ 1.0 billion in short-term deposits), in line with projections and above our limits minimums.

The company’s cash outflow between January and March 2020 was R $ 1,659.9 million, as expected, consistent with the group’s first quarter, historically seasonal and most impacted by the effects of Covid-19.

The company explained: “Consumption in Q1-20 includes Avon and is mainly related to non-recurring acquisition costs of R$501.0 million, COVID-19 impacts on sales and FX effects due to the devaluation of the BRL in working capital for Avon International, The Body Shop and Aesop..”

Natura’s net revenue grew 14.9% in BRL (+ 12.4% in constant currency), due to the strong increase in sales in Brazil (+ 9.8%) pointed to the resilience of the direct sales channel, with productivity of consultants by 7.6% and Latam Hispanic (+ 25.8%, or + 19.7% in constant currency), despite the impacts of Covid19 at the end of the quarter. The rapid adoption of new and existing digital social selling tools also contributed to the result. Avon declined 7.1% in BRL, or -11.9% at CC, on a reduction in Representatives across all markets in Latin America and a Covid-19 impact later in the quarter, partially offset by an improved price/mix combination.

Ahead of the Natura & Co. group, responsible for the global strategies of the cosmetics brands Natura, Avon, The Body Shop and Aesop, Brazilian executive Roberto Marques said that the pandemic of the new coronavirus ended up serving as a catalyst for changes within the corporation, in a press conference on the 12th.

“The adoption of digital tools by our dealers has grown dramatically. At Avon, sales by electronic catalogs grew by more than 85%. At Natura, 90% of the consultants already use digital tools on a daily basis. ”

“Aesop, which is a business with a unique experience in physical stores in the world, e-commerce grew 500%. The Body Shop brand grew more than 300%. We still believe that, in the resumption, physical retail will return, but that this new level of e-commerce is a transformational change. ”