Natura sells The Body Shop to Aurelius – 11/14/2023 – Market

Natura&Co announced this Tuesday (14) a binding agreement to sell the cosmetics store chain The Body Shop for around US$254 million (around R$1.24 billion) to German investment manager Aurelius Investment.

According to the statement published in a relevant fact, payment must be made within five years.

Two months ago, Natura had already announced that it was evaluating the sale of the British brand, founded by activist Anita Roddick in 1976, which raised as its flags the end of cosmetics testing on animals and the defense of the environment. The brand has around 2,800 stores in more than 70 countries, selling products for hair, face, body and makeup.

Aurelius presents itself as a group “focused on creating value through the operational improvement of companies with development potential”. With offices in Germany and the United Kingdom, the institution states on its website that it has already made investments in more than 100 companies from “diverse geographies, industries and sectors” and has net cash resources for investments of more than £200 million (R$ 1.2 billion).

In Natura&Co’s assessment, The Body Shop – which was once an icon of sustainable cosmetics, with an activist stance on the consumption of beauty products – has aged and needs to be redesigned. But the Brazilian multinational does not want to be responsible for this work. After a strong expansion movement, the company is looking to focus on its two big brands: Natura and Avon.

The Body Shop, which passed into the hands of L’Oréal in 2006, was sold to Natura in 2017. In April, L’Oréal bought the Australian Aesop from the Brazilian company for US$2.53 billion (R$12.7 billion). At the time, the president of Natura&Co, Fabio Barbosa, said that the deal had the objective of “deleveraging” the company, which had a high level of debt.

Profit of R$7 billion in the third quarter

In addition to the negotiation of The Body Shop, Natura&Co released its balance sheet for the third quarter, which showed a net profit of R$7 billion, reversing the loss of R$560 million suffered a year earlier, driven by the completion of the sale of the Aesop brand in the period .

Excluding the impact of the sale of Aesop, Natura would have ended the third quarter with a net profit of R$745 million, the company stated in its balance sheet.

“The resources obtained from the sale of Aesop, completed at the end of August, allowed us to quickly advance our liability management plan, with more than half of our debt already prepaid by the end of the quarter”, stated Barbosa in the balance sheet .

The quarter’s result came despite a 10.5% drop in net revenue in the annual comparison, to R$7.52 billion. Cash generation measured by adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) was R$751 million, growth of 10% on an annual basis.

_{With information from Daniele Madureira and Reuters}