Natura Cosméticos S.A. (BVMF:NATU3)
Brazil · Delayed Price · Currency is BRL 10.19
+0.09 (0.89%)
Apr 30, 2026, 5:07 PM GMT-3
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Investor Day 2020
May 8, 2020
Good morning, ladies and gentlemen. Thank you for waiting. At this time, we would like to welcome everyone to the Investor Day Natura. Today with us, we have Mr. Roberto Marquez, Executive Chairman of the Board of Natura and Company Mr.
Jose Filippo, Chief Financial Officer of Natura and Company Mr. Joao Paulo Ferreira, CEO of Natura Ms. Vivian Behar, Investor Relations Director of Natura and Company Ms. Angela Cretu, Mr. David Boynton and Michael O'Keefe.
This event is being recorded and all participants will be in listen only mode during the company's presentation. After Natura's remarks are completed, there will be a question and answer session. At that time, further instructions will be given. We have simultaneous translation into Portuguese and questions may be asked normally by participants connect from abroad, either in English or Portuguese. We have a simultaneous webcast that may be accessed through Natura's IR website, www.natura.net /investor.
The slide presentation may be downloaded from this website. There will be a replay facility for this call on the website after the end of the event. This presentation may contain forward looking statements. Such statements are not statements of historical fact and reflect the beliefs and expectations of Natura and Company's management. This presentation also includes adjusted information prepared by the company for information and reference purposes only, which have not been audited.
Forward looking statements speak only as of the date they are made, and the company does not undertake any obligation to update them in light of new information or future developments. Now, I will turn the conference over to Mr. Roberto Marquez, Executive Chairman of the Board of Natura and Company. The floor is yours.
Good afternoon to everybody and thank you for joining us for this virtual Investor Day. I'm Vivian Behar, Investor Relations Officer for Natura and Co. I hope all of you and those dear to you are all safe and sound. This Investor Day is not taking place exactly as we planned. The original plan was to host you in our head office in NACV and Sao Paulo, but of course that became impossible with the recent event.
Will be our 1st Investor Day since the acquisition of Avon and we believe it was important to maintain this event to update you on how we have responded to the COVID-nineteen crisis and also to share our roadmap of our purpose driven group. I'm delighted to be joined on this call by our Executive Chairman and Group CEO, Roberto Marquez and by the 4 CEOs of our businesses, Jean Paulo Ferreira, CEO of Naturli Incor LatAm Angela Preto, CEO of Avon David Boyton, CEO of The Body Shop and Michael O'Keefe, CEO of AESA. Our CFO, Naturin Cola Jezafilippo is also with us. Our agenda is as follows. Roberto will start with some introductory remarks.
Filippo will summarize our Q1 results. JP, Angela, David and Michael will then take you through the respective businesses. And after Roberto's concluding remarks, we will then open the floor to you for a Q and A session. So without further ado, let me now hand over to Roberto. Roberto, please.
Thank you, Viviani, and good afternoon to everyone. I hope this finds you and your family safe and well. As Viviani mentioned, this Investor Day is taking place in unusual circumstances and in an unusual form as a result of COVID-nineteen pandemic that is affecting all of us. It is clearly a defining moment. And if there was ever a moment to be a purpose driven company, that moment is now.
As you know, Natura and Co has the aspiration of being not only the best beauty company in the world, but to be the best beauty company for the world. A company that acts not just for its shareholders, but for the whole and the society in which we operate. This past quarter has been a time to put those principles into action. And I can say, without a doubt, that Naturinco as a company, its associates, consultants, representatives and business partners have risen to the occasion. I would like to take this opportunity to thank them for their engagement and commitment over the past 2 months.
We are proud and thankful to all of them. This is clearly a time to care for our people, for our communities and for our company. For our people, 1st and foremost, Natura has done through a series of actions that go beyond recommendations from public health authorities for social distance, in which we actually anticipated. We ensure job security for 60 days, which retail staff on paid leave or holidays, extended flexible credit conditions to our consultants and representatives, set up an emergency fund for consultants or representatives directly or indirectly affected by COVID-nineteen and even provided telemedicine for both associates and consultants. 2nd, for our communities.
We did this by putting our facilities to use to produce what is today the best line of defense against COVID-nineteen short of a vaccine, soap and hand sanitizer. We retool our plants across the group to turn out essential products on a larger scale with a 30% increase in production across all brands. We have seen sales of hand sanitizer rise by over 500% in many of our businesses. We took advantage of underutilized capacity at Avon Plants to produce hand sanitizer gel for Natura. We expect to produce 16,000,000 units of alco gel and 1,000,000 liter of alco with partners primarily direct to donations.
Donations of personal product have totaled over 10,000,000 units to date And the Avon Foundation donated over $1,000,000 in support of the campaign against domestic violence, a topic that is very dear to all of our businesses and brands, and we act on a coordinated effort to try to help break the cycle. And last but not least, care for our company. The past few weeks have been very challenging, but at Natura and Co, our multichannel model, has shown its resilience. Social selling has been an answer to social distance and digital took up a very important role as most of our stores closed across the globe. We launched, for instance, a digital and interactive essential items sales catalog that can be shared over instant messaging tools and social media and our consultants and representatives show remarkable adaptability.
Total group e commerce sales grew nearly 2 50% in the last few weeks versus prior year. At The Body Shop, the growth was around 300% and is up almost 500%. In Natura and Avon combined, the growth was 150%, fueled by consultants sharing their online stores. At Avon International, representatives increased adoption of digital assets from low single digit in 2019 to over 37% in recent weeks, which shows great opportunity to continue accelerate the adoption of those tools. Sales, the representative sharing the e brochure grew 85% at Avon globally in recent weeks.
And in U. K. Itself, it was up 5 fold versus last year. At Natura, over 90% of consultants already use digital assets, while content sharing grew by 64% and the number of orders doubled in the 700,000 plus online consultant stores. We also took several steps to protect cash and liquidity such as reducing operating expenses, limiting CapEx to essential projects, renegotiating rents, freezing new hires and cutting executive pay voluntarily across all companies.
We have a comfortable and strong financial position with over BRL4 1,000,000,000 in available cash and no significant debt maturity until September 2021. We also strengthened our balance sheet and enhanced our liquidity through 2 very important steps. 1st, to improve our capital structure, we are raising an additional BRL1 1,000,000,000 to BRL2 1,000,000,000 to a private placement subscribed to by Natura founding shareholders and other investors and minority shareholders. 2nd, we have raised BRL750 1,000,000 through 1 year promissory notes, which do not impact our net debt. Those two moves give us greater financial flexibility to navigate the current turbulence.
Lippo will provide some more details later on. So yes, there's been a challenging time challenging time and year for Natura and Co. But Natura and Co has proven its resilience and adaptability. And I have confidence that we will emerge even stronger from this crisis and better prepare to address a different consumption environment. On this next slide, I would like to tell you how we're going to grow when we emerge from the crisis.
In summary, we have 4 main growth drivers in the medium term. The first is Prolo's execution. And we have already shown that by exceeding the target we set for EBITDA margin at The Body Shop, which reached 11.3% in 2019 on an adjusted base excluding the transformation cost, which is 370 basis points above 2017. Clalos execution also means leveraging the scale of our group in such areas as procurement. If you all recall, we had set a target of BRL420 1,000,000 in procurement gains over 3 years.
And I'm very pleased to report today that 2 years later, we are already at 97%, and we'll continue on this efficiency path. Our second growth driver is capturing synergies at Avon. As we told you when we closed the acquisition 4 months ago, we see tremendous upside potential at Avon. And the 1st few months of integration have only reinforced this belief. Both Angela and JP have identified numerous growth opportunities and efficiency gains.
And today, I'm pleased to announce that we have raised our target synergies to between $300,000,000 to $400,000,000 annually, including our top line synergies coming from Latin America of between 90,000,000 dollars to $120,000,000 and also further cost synergies at Avon International. I will detail this a bit more on the next slide. Our 3rd priority is digital and here we plan to double down. I told you about the remarkable growth we have seen in digital in the past couple of months and there is no turning back. JP had already had the opportunity at past Investors Day to present to you Natura's digital transformation, which is continuing to progress with over 95% of our consultants using our digital platform and roughly 700,000 consultants virtual stores on hedging Aptura, a 40% increase versus last year.
Avon has huge potential to replicate this model and this is a key priority for the business and the brand. And The Body Shop and Aesop are also becoming increasingly multichannel, not just by necessity as we have seen in the past month, but also in a strategic design to accelerate growth. As an example, capitalizing on Natura's relationship selling experience, The Body Shop at Home has grown by 61% in this past quarter. Aesop as well has seen incredible growth in digital in the past few weeks. And finally, our 4th growth driver is accelerating top line growth in white spaces in all of our business.
Each one of our brands has an avenue to explore. The Body Shop is considering The Body Shop at Home in North America as a vector to growth as well as China through Tmall. And Aesop is also expanding in China through Tmall, but also evaluating other possible avenues. For Avon and Natura, Latin America offers numerous growth opportunity and Natura can pig back on Avon infrastructure to expand. We know there will be a time when COVID-nineteen doesn't dominate all the headlines and Atur and Co is preparing to grow and as activity resumes in a more normal way.
As I mentioned, we are raising our total target synergies from the Avon acquisition to between $300,000,000 $400,000,000 an increase of $100,000,000 There are 2 synergy drivers. The first is cost. And back in January, we unveiled our target of a range between $200,000,000 $300,000,000 annually. The synergies will be largely achieved across the Brazil and Latin American footprint and can be broken down into 3 major buckets. The first of those is sourcing, which should generate annual synergies between $85,000,000 to $115,000,000 at current exchange rates.
As you know, procurement is already one of the main areas of synergies within Atur and Co, and we see strong potential to enhance that through optimized purchasing of raw materials, freight and warehousing, advertising and catalog as well as back office functions. The second bucket is manufacturing and distribution where we see synergies between $50,000,000 to $70,000,000 We will achieve this by optimizing our distribution center footprint, reducing the complexity of our overall plant organization and consolidating such activity as cargo thus improving service level to our consultants and representatives. And administrative expenses are another opportunity for cost savings between $75,000,000 to $90,000,000 for better integration of areas such as IT, data centers and network as well as some supporting functions. On top of this cost synergies, we now expect between €90,000,000 to €120,000,000 in top line synergies, mostly from Natura and Col LATAM, and JP will describe them shortly. We anticipate one time cost of $190,000,000 to achieve the full range of those synergies.
On the right side of the slide, you can see our timeline to achieve the full range of synergies, which 100% achieved by the end of 2024. We're also providing a timeline for the cost to achieve the synergies, which approximate amounts for each year. As I mentioned in January, when we closed the acquisition, synergies are obviously one of the catalysts of this transaction, driven by a powerful industrial logic, but they are not a goal in itself. Rather, they are a means to free up resources that can be reinvested in core capabilities that will accelerate our top line growth. For us, the combination of Natura and Avon is clearly a growth combination.
Let me now hand over to Filippo, and I'll return for some concluding remarks.
Good afternoon to everyone. As you know, we presented our Q1 results this morning, so I'd like to quickly give you an overview of the consolidated headline sales and EBITDA numbers and then show you a snapshot of some cash balance sheet and net debt considerations. Let me start on the first slide with our consolidated net revenue, which reached BRL7.5 billion in Q1. This represents growth of 1.9% in Brazilian reais. In constant currency, net revenue was down 6.2%, excluding currency effects in the quarter.
Looking at sales by business, Natura and Cola Atan was up 2.4% in reais, with very strong growth by Natura both in Brazil and in Hispanic Latin America, while Avon sales in the region were down 7.1%. Sales at Avon International were down 2.4% in reais and a reduction in representatives and the COVID-nineteen impact later in the quarter. This was partially offset by an improved pricemix combination across most markets. The Body Shop sales were up 2.6% in reais. Growth was solid in the early part of the year, but was then impacted by store closures as lockdown measures took hold.
The Body Shop was able to partially offset this with the strong e commerce sales. Finally, Aesop continued its strong double digit growth trajectory, with sales up 26.6 percent in reals, here also with a growing contribution from online, which was up over 500% in recent weeks. On the following slide, we turn to consolidated adjusted EBITDA, which stood at BRL571.5 million in Q1. This excludes 3 effects: 1st, non recurring Avon related acquisition costs of BRL298.3 million second, a non cash non recurring purchase price allocation effect of BRL102.9 million, resulting from the fair market value assessment of Avon, which reflects a step up in inventory value in the cost of goods sold. And finally, transformation costs at Naturin Cola TAM and Avon International for BRL25.1 million.
Adjusted EBITDA margin in the quarter was 7.6%, down 220 basis points. On a reported basis, EBITDA was BRL145.3 million. Let me now turn to our balance sheet on its final slide. We have a strong cash position with BRL4.6 billion in cash at the end of the quarter. As Roberto mentioned in his opening remarks, in the current environment, we have taken 2 additional steps to further strengthen our cash structure and our liquidity through capital raising and new financing.
We are continuing to deleverage Natura Cosmetics. And at the end of Q1, the net debt to EBITDA ratio was down to 2.7x versus 2.95x at the end of the same quarter last year. We are continuing to work towards the target of reducing Natura Cosmetico's leverage to the pre Body Shop acquisition level of 1.4x by 2021. At Natura and Co Holding, consolidated net debt to EBITDA stood as 4.91x and at 3.84x adjusted for nonrecurring transaction costs and PPA impact on EBITDA. Please note that the indebtedness ratio at the holding company level would not be considered for financial covenant purpose in June 2020.
After this quick financial overview, let me now hand over to JP to present Natura and Colata. Thank you very much. And JP, the floor is yours.
Thank you, Filippo, and hello, everyone. Good to be with you today even if it's only virtually. At our previous Investor Days, I spoke to you as the CEO of Natura. Today, I'm here as the CEO of Natura and Co. Latin America, the new business unit we created after the closing of the Avon acquisition and that is tasked with overseeing the development of all 4 of our brands in the region: Avon, Natura, The Body Shop and Aesop.
It has been an amazing experience to begin leading the transformation and integration of 4 iconic brands into a multi brand, multi channel group and the more I experience it, the bigger is the growth potential I see ahead. Natura and Co Latin America is more than just welcoming a new brand, a new business to our family. Adding Avon makes us a powerhouse, the number one CFT player in the region, as measured by Euromonitor. We have gained in scale, in revenue, in capabilities. We are now an even larger network, present in 17 countries with net revenue of almost $5,000,000,000 in 2019, more than 4,000,000 consultants and representatives, 18,000 employees, more than 600 stores and 1,500,000,000 units sold last year.
In the last 4 years, Natura gained momentum in Latin America with the high growth of our Hispanic operations and the very successful turnaround implemented in Brazil. We are now the preferred brand in 4 of the 6 markets in which we operate directly in the region. And that's the story that we will work to repeat with Avon in the coming years, expanding our leadership in the region even further, combining forces to accelerate growth. We started the integration of the businesses at the beginning of the year and at the same time, we worked hard to make it smooth. The world was hit by its biggest challenge in the past several decades, the coronavirus pandemic.
As a society, we face today possibly the most challenging time of our lives and Natura and Co established very clear commitments to face this crisis, always having in mind the essence of our brands and of our companies and the purpose of the group we are building. Taking care of our people is our highest commitment. Across Latin America, we have guaranteed to our employees job security for at least 60 days. We offer telemedicine for employees, consultants, representatives and franchisees. We invested in social support to our consultants and representatives and campaigned against domestic violence.
Finally, we donated soaps and alcohol to health authorities and NGOs across the entire region. Now with the same passion dedicated to our people, we worked to keep the health of our business. Naturium Co supplies essential products which were even more demanded during this period. This allowed us to keep the business running in most countries with a few exceptions where our operations were partially restricted as you may see on the map. At the same time, implemented a cost reduction and cash optimization program, redefining priorities and optimizing spending.
But we have also reinvested in more flexible payment terms for consultants, representatives and franchisees helping to maintain their business active. And most of all, we were able to react fast and seize opportunities that accelerated our digitalization strategy, making it easier for consultants and reps to sell online while staying safely at home. As you know, Natura has already embarked on a far reaching digital transformation that we presented at last year's Investor Day. The digital capabilities already in place in Natura and in Avon enable us to respond extremely fast to the unfolding situation. Online sales, considering e commerce and consultants online stores, gained tremendous momentum in April with some operations growing more than 500%.
Worth highlighting that this amazing acceleration was not restricted to Natura, but happened also in Avon through the Avon Connected stores where available and in The Body Shop where franchisees were enabled to operate their online stores leveraging Natura's platform. Our consultants, digitally empowered, remained active, keeping their income even though they had to stay at home To increase their adoption of the social selling tools, entry barriers were reduced, incentives and training increased. As a consequence, Natura reached almost 1,000,000 digital stores, while the pace of new openings accelerated more than 70% at Avon in the last month. You may also know that content sharing is a powerful fuel for any social network and our platforms and apps allow tailored content to be generated, allow also access to a library of predefined posts, virtual brochures and interactive catalogs that can be shared through different channels. And our network is clearly enjoying those features as you can judge by the high number of Natura's consultants and the growing number of Avon's representatives engaged into that activity.
Finally, as one would expect, those efforts helped bringing new customers. At Natura Brazil alone, the monthly acquisition of new online customers grew by more than 700%, mostly attracted by our own consultants. Much of this was possible because we were leveraging strong existing capabilities. The story of our relationship selling, digital, omni channel transformation journey is familiar to many of you by now. Our new commercial model launched in 2017 has now completed 14 consecutive quarters of increasing consultant productivity.
We diversified the shopping experiences offered to different shopper profiles and different shopping occasions by opening almost 70 owned stores and more than 400 franchised stores, an opportunity that we offer exclusively to the most productive consultants in our network. Additionally, we also operate more than 150 Da Body Shop stores in the region as well as 1 ESOP store in Brazil. Finally, our consultant online stores have been successfully implemented in Chile, Argentina, Colombia and Peru. We also took an important step in our internationalization plan, launching our first operation in Asia in partnership with a head franchisee from The Body Shop in Malaysia, a model that combines social selling, retail and e commerce. And as regards the digitalization of our business, our online platform is now being used by almost 90 percent of our network in Latin America with new tools added every week.
We continue to invest in offering new beauty and well-being services to increase the value proposition we offer to consultants using technologies that enrich the customer experience. We strive to make their journeys easier and I would like to update you on the most recent progresses with a video. The advances of the last years have been guided by a clear vision for our business. We are connecting individuals that compose our extended network to our portfolio of brands through services, products and content. Our Bainstar BANG ecosystem was born aiming to connect our many touch points from consumers to consultants and reps, from content creators to logistics service providers to make our value proposition even more attractive.
And with Avon in our family of brands, we have added to this vision an enlarged network, new capabilities, a committed and passionate team and a range of excellent products to fulfill the needs of different buyer profiles. No doubt the arrival of Avon will create enormous value for all stakeholders in the coming years. As already disclosed, there will be relevant cost synergies to be obtained with the integration in areas such as procurement, manufacturing and distribution. And I can assure you our teams are already on the ground working to guarantee flawless execution even during the pandemic. Now the cost synergies give us the confidence and the resources to unlock yet another source of value, revenue synergies, revenue growth.
I would like to share with you now some details on these top line synergies that this combination will bring. As we combine Natura and Avon's capabilities in Latin America, consider 3 different buckets, 3 waves that will unlock incremental revenues. Wave 1 is all about Avon's turnaround in the region. We are all aware that the brand has been following a declining trend in the last years. Yet Avon has extremely valuable assets, passionate people, innovative, good quality and affordable products, a great brand awareness, a vast network of reps and an amazing household penetration.
What we need is to fix channel and portfolio fundamentals, very much like we did with Natura itself a few years ago. This wave represents some 40% of the value to be created and defines a solid ground on which to build the other 2 waves. Wave 2 focuses on exploring the penetration that both brands already have in households throughout the region, driving cross and upselling through our consultants and reps. For that wave, we estimate some 50% of the top line synergies. Finally, Wave 3 will take the Natura brand to new markets in Latin America where Avon, working as the host, will reduce the entry costs and accelerate growth.
This should account for the remaining 10% of the synergies. As you can see, this is all about the collaboration between brands, exploring the power of the coal. Let me provide more details behind those waves. Avon's turnaround was the main objective of the Open Up program, which continued to be improved as Angela will discuss with you later. In Latin America, we see significant opportunities to accelerate this transformation by focusing on structural improvements in channel management and in the strategy of the categories.
As regards to the channel, we have outlined an action plan that involves segmentation and progression to increase the lifetime value of reps. This will help make bigger reps more productive while reducing the churn of the smaller ones. And that recipe we know well. We will run 2 pilots in important markets this year aiming to a full scale rollout in the beginning of 2021. We are also redefining the brands and categories architecture to increase unit volumes, channel activity and profitability.
For both fronts, we have identified quick wins that will be implemented throughout this year in areas such as pricing, the elimination of commercial bad practices, the alignment of sales field incentives and the revision of campaign planning. The next wave will build on the overlap of our networks to enrich the consumers' basket with products from our combined portfolio. Right after the closing, we presented that 2 thirds of the households penetrated by 1 of our brands in Latin America is not yet penetrated by the other. As we sharpen the complementarity of our brands and categories, we will also build commercial stimuli to our consultants and representatives. We have already cross referenced those databases and segmented the network based on their commercial behavior, from the most productive brand exclusive ones to the small low frequency brand overlapped ones.
For each group, different incentive schemes and reduction of barriers such as credit and logistics will be built using a common digital platform, leveraging data and analytics. Silent tests will be run this year to calibrate elasticities and the effectiveness of different policies, aiming at a progressive rollout later in 2021. The 3rd wave will leverage Avon's footprint to grow Natura in new geographies. And we already have a great opportunity here in Latin America. Just by entering the 9 markets in which Avon is already present and Natura is not, as you can see on the graph, we will already unlock a new market worth US5.4 billion dollars By building on the Malaysian pilot and on Avon's footprint, we will be able to speed up Natura's geographic expansion, gaining market share twice as fast as we did in previous organic entry into new markets.
In summary, the combination of our 4 brands in Latin America created a powerhouse in the beauty industry that enabled Natura and Co not only to defend but actually to expand its regional leadership in the coming years. And we are confident that with the elements presented here, not to mention the significant growth potential of The Body Shop and of Aesop in the region and which we didn't cover today, we are very well positioned for that journey. And now I would like to invite Angela Cretu to talk about her plans for Avon. Angela, please go
ahead.
Thank you, JP. Good afternoon. I'm honored to be speaking to all of you today. Just a few months ago, this wasn't the way I expected to meet you all. I wanted to start by sending you my warmest wishes and hope that you are all staying safe and well.
On my first slide, let me tell you a little bit more about Avon and what we stand for. We are the original relationship selling company with a legacy of almost 135 years of beauty and empowering women. Avon International covers 50 markets in EMEA and Asia, and we partner with 3,700,000 beauty representatives. We have a brand awareness of 98% and we are number 1 in beauty direct selling and in the top 3 brands across color, skincare and fragrance in our major markets. But Avon, it's more than just a beauty brand.
For us, beauty is the journey and women's empowerment is a destination. With this purpose at heart, we have contributed over $1,000,000,000 to women's causes. We supported the fight against breast cancer and against domestic violence. And our business model has created opportunities for women to earn and learn while sharing beauty with their friends. We help them succeed in their own way and on their own terms.
We've been addressing environmental challenges as well as the social ones by ending animal testing, now tracking for 100% sustainably sourced paper in 2020. And part of Natura and Co family, we aim to have even bigger impact on women and on the world at large going forward. Turning on to the next slide, I would like to give you an update at how we are navigating through this coronavirus times. Let me start with people first. We quickly enabled remote working for all our eligible employees and we allowed our frontline teams to make continue making, packing and shipping our product wherever that was possible.
We've donated more than 400,000 units of product and along with funds to support our communities. And understanding the increase of domestic violence during coronavirus home isolation, we committed $1,000,000 in grants to domestic violence support groups around the world. We are focused on protecting our representative earnings and meeting our customers' needs by keeping Avon open for business. And therefore, we increased our production on essential items in line with the demand and we doubled down on our digital social selling channels. With a high touch service in a now no touch environment, we have enabled our representatives to continue to connect with their customers digitally.
And by quickly adjusting our logistics, we succeeded just in a matter of weeks to create a direct delivery to our representatives' customers on their behalf in 25 markets already, and we continue adding markets in the weeks to come. We've seen a significant shift in the adoption and the engagement with our digital tools And the contribution of the online sales has increased already more than 4x from January to April to more than 8%. And that happened via WhatsApp brochure that grew by 4 69% and e commerce sales that grew by 8 50% over the same period of time. Equally, we are taking decisive actions to protect our liquidity and cash and safeguard our business profitability. We are prioritizing critical spend and delaying cash related investments.
We are making use of government aid wherever possible and continuing to monetize non core assets. I'm really proud of how everyone has united during this time. We've seen amazing teamwork, creativity and agility. And with every challenge that we tackled, we discovered a new seed of opportunity. I'm confident that with all these learnings, we shall emerge even stronger.
On the next slide, you can see our Open Up and Grow strategic framework. We started our Open Up strategic turnaround almost 2 years ago. And while we strengthened our cost base and financial resilience, the revenue hasn't yet picked up. We do reach learnings that we have had from both our previous experience at Avon and now from Natura's turnaround, our new enabling leadership team has created in partnership with all of our markets a next chapter of our transformation journey. We call it Open Up and Grow.
We aim to accelerate our transformation to regain Yvonne's relevance and reignite growth. We start with the how. We want to enable a new culture with purpose at heart and people as multipliers. When it comes to purpose, we want to make our voice heard again at all touch points, remobilizing our purpose, inspiring advocacy and engagement in employees, consumers and making it even more tangible and visible impact in each community where we do business. For our people, we aim to provide meaningful career experience, empowering and enabling each of them to multiply the impact of our co created strategy.
And we'll continue to open up and grow by accelerating 3 key levers: optimizing our commercial model and relationship selling framework amplifying our brand and innovation relevance and significantly expanding our digital presence and access cross channels at all touch points. All of this must be underpinned by a growth enabling model, a simpler, leaner operating model that will release resources to reignite growth and sustain a healthier, profitable business going forward. So let's take a closer look at relationship selling on the next slide. We have different models currently in our portfolio and many of them are still overly complex and too focused on short term transactions and value proposition for our diverse representative segments. We aim to move to a simpler relationship selling framework open for all with a compelling segmented experience for our representatives.
We want to create a clear and competitive earnings model playbook for all our markets and we will build a reordering career growth plan and focus on building long term relationships and driving lifetime value. This will be enabled by a fit for growth sales organization and field management processes to provide the support and resources needed to improve engagement and retention. Turning to the next slide, we talk about opening up value. We shall drive reappraisal of our brand, simplification of our portfolio customers with 3 bold initiatives that are aimed to be launched already in the second half of this year. Our new campaign positioning and visual identity will refresh the Avon brand.
We look to a brand campaign that is more modern, more relevant and bolder. It positions Avon as the one you didn't see coming, but now you can't look away. We will use our relationship selling model as our competitive advantage and with our representatives being influencers at scale as brand ambassadors, sharing content and reaching customers across all touch points and this way grow the penetration with new and lapsed customers. Equally, we have reviewed our portfolio to prioritize our core brands like Avon makeup, C. A.
R. E, and N. U, Hero Fragrances, while allowing flexibility to tap into the trends and emotional categories based on the consumer mindset. We are rebalancing our portfolio across all price points to ensure we meet our customer needs from value to premium and we continue to reduce our sales of line by another 30% to create a simpler, cleaner portfolio architecture. We will optimize and simplify innovation by category to drive demand and representative earnings.
And 3rd pillar is winning stores. We aim to create a relevant, gratifying and addictive shopping experience at all touch points for our customers from pre brochure to digital. We are harmonizing our campaign cycle to create an even more relevant selling and shopping experience and we'll boost it daily with exciting digital activations. We will elevate the look and the feel of our brochure to more of a beauty magazine aesthetics with a better brand narrative, clearer navigation, more on trend beauty ideas and we will use cutting edge analytics to reach more customers and drive more spend. Open up access.
Turning on the next slide, you will see that we look to enable 3 60 day selling opportunity through digital tools for our representatives and customers and an omni channel experience for all. In addition to the elevated printed beauty magazine, there will be more frequent digital brochures, allowing us to reach even more quickly react even more quickly to the trends and seasonality and stimulating additional orders. We have developed a digital toolkit allowing our representatives to run their business online from recruiting to selling, from training to accessing content and sharing within their communities. And with all our representatives already placing their orders online, we aim now to accelerate the adoption of the entire e suite of tools and significantly growing their online presence and digital selling and encouraging them to share beauty with their social networks. We continue improving our digital platforms and representative adoption as key strategic focus now and going forward.
My final slide shows how we will sustain Open Up and Grow with resources to reignite our brand, commercial model and digital access while ensuring a sustainable profitable value proposition for all our stakeholders. Firstly, a lean and agile operating model. We are rewiring and refitting the organization at all levels, starting with the top of the house to respond faster to market dynamics and enabling a cultural local empowerment and ownership while leveraging at scale all relevant assets and expertise within Avon and across the group. 2nd, we are redesigning our S and OP and embedding new tools to radically improve the forecasting and planning processes to gain agility in responding to market trends, better service level for our representatives and improved inventory management. And finally, we'll maximize synergies.
We have dedicated work streams to identify, map and tackle revenue and cost synergies to deliver more values more value to all our stakeholders. I'm very excited with the combined power of the Natura and co brands and I'm really looking forward to advancing our work in maximizing the impact of our co creation and collaboration. While we have just started this chapter, I'm confident we'll return Avon to growth. Even within this current unprecedented trading climate, we are seeing green shoots as we make bold decisions and take action. I will end my presentation by saying I am privileged to be part of Avon for more than 20 years and I'm more inspired than ever about our future, our purpose in this world as part of Natura and Co family.
Thank you for listening to me today. Now I would like to hand over to David Boynton to The Body Shop presentation.
Hello, everyone. I'm David Boynton, and it's a great pleasure to spend some time with you today to update you on the transformation of The Body Shop and share more detail with you about our reaction to the COVID-nineteen crisis and how we're seeing the future. Last year, we talked about the 5 pillars of our transformation plan and explained how those pillars were underpinned by a fresh focus on embedding sustainability in everything we do. I'm delighted to say that 20 19 was another good year for The Body Shop. We made lots of progress, and I'll walk you through a few of the highlights.
The key to unlock the future success of The Body Shop is the rejuvenation of the brand and 2019 saw the development of a new top to toe verbal and visual identity system building on the new brand platform of empowering radical bodies that we shared with you last year. This BVIS touches every aspect of how the brand shows up to the outside world from the look and feel of our stores, our product packaging and how we express our point of view in our customer communications and activism. Aside from reinventing the experience our stores deliver, we continued our progress in improving the quality of our store portfolio. As we've closed on profitable stores and made better choices in opening new ones, we've seen a much better performance in store profitability. We continue to see stores as a critical part of our distribution strategy.
We know how to operate them effectively and this channel is highly experiential and an efficient way to recruit new customers. But stores aren't our only focus. From the very beginning, we've adopted an omnichannel mindset and we've seen real progress. This example here is of the U. K.
Where we focus on 3 complementary channels, growing our sales even as we reduce discount and with the store channel holding up well even in difficult trading conditions. Anita Ruddock was a true pioneer and The Body Shop always stood for a better way of doing business. She spoke often about business as a force for good and we've taken that as our inspiration as we get more ambitious for TBS within the Natura and Co family. Last year, we set out to become B Corp certified and I'm delighted to say that we achieved that in what B Lab told us was record time. This rigorous audit gives us a detailed understanding of where we are today and shows how we can improve.
We've also embarked on a bold new way to help the plastic crisis, embarking on a fresh approach to sourcing plastic for recycling from the waste pickers of India and by introducing in a bit of a blast from the past, a new recycling concept in our Bond Street store that we intend to roll out globally. So that's an overview of our ongoing transformation journey, but we aren't operating in a vacuum and of course, we've needed to react to the global COVID-nineteen pandemic. As the virus spread around the world in no time at all, we had to start closing stores and at one point had closed 90% of company stores around the world. We were in fact a retail business with no retail stores to trade. As this unfolded, we quickly pivoted to 3 new objectives to protect the company.
The 3 objectives were, firstly, to stop all spending except in business critical areas. The second was to recover at least 50% of the lost retail store sales through our e commerce sites and Body Shop at Home. Now many of you know that the e commerce business at Body Shop has been historically underdeveloped and share of business in most markets is well under 10%. We're also in the middle of the implementation of a new website. So this challenge was a tall order.
The third objective was around the aftermath, how to recover quickly and figure out how to get back on track. I'm pleased to say we acted fast and have seen encouraging results in our e commerce business. Stores closed, e commerce sales more than tripled. And as you'd expect, our product mix has skewed towards wash and hygiene products with the hand category, for example, now at 10% of sales, up from 4%. There's been some excellent trends in the at home channel too.
We changed from shipping to our consultants and when instead directed their customers to be able to protect the business during lockdown. The performance in the U. K. And in Australia are both looking very encouraging, and we had our best ever month in the history of the U. K.
In April, better even than peak last year. We started to plan to accelerate the rollout of this channel and I'll touch on that later. Shipping directly to Body Shop at Home customers and tripling e commerce revenues with an unexpected category mix has put pressure on the supply chain. When you add in that we've introduced social distancing programs to keep our people safe, this has had an initial 50% reduction in productivity. So we quickly ran into challenges with service levels and availability.
But I'm delighted to say the teams responded magnificently. We've managed to get a temporary warehouse up and running in just 15 days and expect to return to normal service levels by this weekend. This means we'll be in a position to significantly ramp up volumes in the weeks ahead. From the start, we've been clear that this isn't only about protecting our business, it's about serving our communities too. We've paid attention to finding ways to help and make positive contributions to health care professionals in the markets we serve.
So far, we've donated more than a 1000000 pieces of product problem of domestic violence during the lockdown period. So the initial focus has been what you would expect from us. We've cut costs and doubled down on our remaining revenue driving channels, but we're also thinking about the future and what happens next, how we get our stores back open and prepare to deliver a strong Christmas. We're challenging ourselves to find ways to get back to where we expected to be at the end of 2022. So we're sharpening our transformation approach and making sure we act on the lessons we're learning today about how to go faster, how to ensure that our activist voice gets heard, making sure that we challenge ourselves even further on what a right sized store portfolio could look like in the years ahead.
The whole business has seen the power of taking an omni channel approach and this will make change easier as we roll out our new website and extend our At Home platform. So we're seeing the future for The Body Shop perhaps even more confidently than before. We've learned a lot about what we're capable of and have the ambition to go faster and be more impactful. We see several immediate opportunities. Firstly, we're very ambitious for at home.
Historically, this was a U. K. Success story, but we've proven we can turn Australia around and now are determined to enter another market this year. Secondly, e commerce. Our new website lands in the middle of the year.
It's a more flexible headless platform and means we can roll out faster and create a much more experiential site than we have today. And finally, we're encouraged by our start on Tmall Global, which we launched towards the end of last year with the full support of Cruelty Free International. We see this as a great springboard for the China market and we'll continue to progress that opportunity whilst ensuring that the progress we make there is compatible with our values on animal testing. We're working with other group companies on how to establish a base in the market. So to summarize, we made great progress in 2019.
Our transformation is on track. We responded well to COVID-nineteen. It's sharpened our thinking and we've learned what we're capable of. And building on all of that, we're looking to the future and are confident of the growth opportunities ahead. So thank you so much for your attention.
And now I'd like to hand over to Michael O'Keefe, who will update you on progress at ESOP. Thank you.
Good afternoon. My name is Michael O'Keefe and I am the CEO of ESOP. Unfortunately, I can't be with you today, but I'm excited to share with you our 2019 highlights. It was another exciting year of growth and development for the brand across the globe. I'll also discuss how we have managed through the coronavirus crisis.
And lastly, I'll present our strategic priorities moving forward and the impact these will have on the business. As you can see, we ended 2019 in strong shape with global sales of 459,000,000 AUD and close to 3 50 stores and counters across 23 countries. This was an excellent result and in fact, our performance only improved as the year progressed. Sales grew by a little more than 12% across the year, more than double the wider market's growth, despite the issues caused by Hong Kong protests and the Chinese crackdown of Daizhou resellers across many parts of Asia. Although the coronavirus will temporarily affect these growth rates, it also presents us with opportunities to accelerate growth in certain channels and leverage our strengths of meaningful relationships with our customers and communities.
As well as strong so called business as usual performance, 2019 was a year of innovation and development for ESOP with the launch of new channel concepts, exciting new products and many other activities. Some of the highlights included launching our 1st flagship store, ESOP Sydney, offering private consultation areas and a larger scale of store experience developing and opening our first travel retail experiences in both Melbourne and Incheon airports and continued global expansion as we reached new consumers and strengthened our footprint. The key takeaway here is that we still have so much upside and market wide space in which to grow into. Growth will continue to outpace the wider market for a considerable time to come. From a product perspective, we had a strong year with higher than expected sales from new launches.
We released 11 new products across 5 categories, which demonstrates the strong breadth of our offering and brand positioning. Our sustainability journey continues at pace as we launch recycled PET plastic bottles across more than 70% of our range. By the end of 2020, this will be more than 90% of products. We started 2020 with strong momentum and strong Q1 results despite the COVID impact starting to hit Asian markets fairly on in the calendar year. We started to feel the impact of the crisis in late February and quickly established a COVID crisis team with 4 streams of work, all with impressive impact to date.
Firstly, we strengthened our bottom line resilience to ensure operational continuity. Our supply chain team pivoted to ramp up the supply of essential products. During the peak of the crisis, we had 70% of the supply chain capacity focused on this. We also reprioritized projects and implemented strong cost control measures to strengthen our cash position. Secondly, we supported the health, economic position and safety of our people In stark contrast to many of our retail peers, to date, we have protected our people with continued payment of full wages to all operating non executive staff and 100% of top up of wages for furloughed staff.
3rd, we captured new top line opportunities. With more than 91% of our global retail network closed, digital has become a critically important channel for us. Over the period, we experienced year on year growth of more than 500%, which went some way to mitigate the retail losses. To enable this, we ramped up digital fulfillment and capacity with 8 additional centers opening. 4th, compassion for those in need.
During the period, we have donated almost $3,000,000 worth of products globally to support both frontline workers and victims of family violence. As mentioned on the previous slide, our own digital channels have become a critical source of sales during the period of the crisis. We realized this early on and have worked hard to move our customers across to the channel, ensure that the resulting experience is as optimal as possible and that operationally, we have the capacity to serve customers. Traffic and conversion have both grown and exceeded our expectations. As mentioned, we've been working on quick wins to elevate and evolve our online customer experience.
Our conversion rate is now at 4x what it was pre crisis. We also heavily invested into SEM and SEO and created targeted social and e mail campaigns to drive traffic. As a result, sales growth currently is more than 500% ahead of last year and every current trading day is larger than our busiest last year. The reality is that this is the tipping point of the iceberg for us we have true white space in digital and a strong growth trajectory ahead of us as we build this channel. As we look forward, we're starting to see glimmers of light as markets reopen and we relaunch our physical stores.
Germany, Austria, Norway and Malaysia have largely reopened with many other markets set to do so in the coming weeks. Our first priority is to ensure that business as usual activities return to normal in as quick time as possible. So far, the indications are positive with markets trading to expectations. Secondly,
we want
to get the growth engine of the business firing again. This business has so many opportunities with expansion into new geographies, development of new of both existing and new channels, deeper engagement and service of our customers and extension of our product line of our existing product lines and expansion into aligned offerings. Entering China in a values oriented way. China is the 2nd largest but fastest growing cosmetics market in the world and currently, we only have a digital cross border presence into it. There is a huge opportunity for the brand as we know that their people love our products.
I'll elaborate more on this opportunity on the next slide. Elevate our digital offering. COVID has accelerated our digital journey and we need to keep the momentum moving and accelerating where possible. We have a global mobile digital savvy customer base and an enormous opportunity to service them around the world. Enhancing our customer connections and creating a truly integrated customer experience.
Linking to our broader digital activities is the opportunity to really understand our customers far better and anticipate and cater for their needs. We have a stronger program of works planned that includes the launch of an upgraded CRM system, the introduction of more tailored digital and content experiences and expansion of personalized client towing services. Lastly, evolve and innovate across our product line. We have deliberately kept the ESOP product line exceptionally tight. As a result, we only offer between 20% to 40% of the products that our major competitors stock.
There's a large opportunity to continue to build out both existing and new categories without too much risk of cannibalization or buildup of unnecessary inventory. Lastly, as discussed, the Chinese market is an enormous opportunity for ESOP and even through the COVID crisis, we haven't taken our eyes off this prize. Some of the work that we're doing here includes continuing the growth of China facing channels. China is a key area of future growth. We will continue to strengthen our existing channels, for example, Tmall, but at the same time, continue to grow new channels like Little Red Book, Feel Unique and other appropriate digital channels.
We will also be taking more control, strengthening our brand presence and building out our tone of voice and channels of choice. And lastly, we are currently exploring all available options for a values aligned physical entry and think that this might now be possible. In preparation and in conjunction with our sister brands, we are opening an Aesop China office and building a local team. We are also developing plans for an experiential House of ESOP concept in Shanghai. Before I hand back, I'd like to say that last few months have been tough, but our business has been incredibly resilient and has really risen to the challenge.
What our teams, in particular digital, have achieved in such a short period of time has been remarkable and bodes exceptionally well for the months years ahead. Thank you.
Thank you, Michael. I'm sure you gathered from this successive presentations that despite the current environment, we have strong momentum across the group. And what are the key takeaways from today's Investor Day? First of all, Natura and Co has shown remarkable adaptability and resilience during the COVID-nineteen crisis and has shown that it's truly a purpose driven organization. 2nd, we're going to leverage the momentum that the situation has given us to double down on some very important aspects of our business like digital.
3rd, each of one of our business has clear growth plans. For Avon, it is accelerating the open up strategy. For Natura and Col Latane, it's combining the forces of our brands in the region to drive growth. For The Body Shop, it's continue its transformational journey and finding different vectors to accelerate growth. And for Aesop, it's continue, it's relentlessly focused on customer experience now enable even more by digital platforms.
And finally, we have greater financial flexibility to implement our plans, thanks to a strengthened balance sheet and enhanced liquidity. So in conclusion, let me summarize our investment case, which I believe you have gathered through today's presentation in a compelling way. First of all, with the integration of Avon, we have 4 empowered and iconic brands that boost a unique product portfolio across price points and as we saw today, have clear growth roadmaps in the post COVID-nineteen world. 2nd, we are well balanced multi channel group with unparalleled direct to consumer reach affecting more than 200,000,000 consumers around the world. 3rd, as the past 2 months have shown, we have a business model with proven resilience.
4, again, as demonstrated in recent weeks, we have robust and fast growing digital platforms. 5th, as presented today, there is a strong upside to be captured from synergies resulting from the acquisition of Avon. And finally, we are purposely driven. And Avon give us now more powerful voice that we know will resonate in the post COVID-nineteen world, a world in which cooperation will need to connect with a broad range of stakeholders. And before we open for Q and A with Angela, JP, Michael, David and Filippo, I would like to call a video that I believe demonstrates in a beautiful way, especially as the Mother Day is coming in 2 days in most of the countries, the power of the collective, the power of our network in a beautiful message of Natura to the Mother's Day and to all mothers in the world.
So let's watch it and then we'll go to the Q and A.
And our first question online comes from Thiago Matruz from OVPA. Please go ahead. Your line is open.
Hi, guys. Good afternoon and thank you for the presentation. I have a couple of questions. The first question is for JP. It's very clear that there's plenty of opportunities in Avon in Latin America.
You've been laying out the plans for synergy generation for the last few months. And then my question becomes, what's the main source of risk in your view? Do you think that the risk is different technology backgrounds between the two companies, different cultures. When you think about the integration process that you will conduct, what do you think will be the main challenges that you will face, given that it's very clear to us that the opportunities are here? And then my second question is to is directed to Roberto.
Roberto, one of the main challenges of being the Executive Chairman of and a Global CEO of a group this big is to make sure that whatever learnings you have in specific brands are spread to the group? And with that in mind, can you share with us how do you think about this matter? What do you intend to do in the upcoming years to make sure that this happens? That's the these are the two questions that I have for you guys. Thank you.
Okay. Thiago, Roberto here. I will start with the latter part and then I'll ask JP to comment on your first part. But before, I just also want to apologize all of you for the technical difficulties. We had an issue on the streaming side.
So thank you all for hanging in there and staying with us. We'll try at least to take 10 minutes, 15 minutes of Q and A. So appreciate you guys staying for another 10 minutes or 15 minutes. And about the commercial that you guys didn't see, the people in Brazil and Latin America saw it. It's a beautiful commercial, of the Mother's Day that Natura put together that really show the power of our network in a very Natura way of showing the power of the collective and honoring all the mothers.
So on your second part of the question, I would start saying that what we are trying to do is to continue to use our operating model that it talks about autonomy with interdependency. So we want the businesses units to be highly empowered to drive the business locally, where the group is really providing the support. And again, to your point, Thiago, make sure that we are sharing best practice and connecting some of the interdependent areas that are so critical. I have to tell you that this crisis provides some silver lining for us. One of them for sure is that we were able to close the transaction of Avon at the beginning of the year.
And what we've seen is the acceleration of the integration. The teams are working very well together and the need to actually collaborate become even more important now than ever before. So for that, we are sharing already some best practice. Natura is working very closely with Angela's team to understand, for example, all the relationship model, the earnings model, how we drive better segmentation. So when you heard about the simplification of the commercial model, the earnings model that Angel is talking about, it's not a coincidence that it's already incorporating some of the learnings from a very successful earnings and commercial model that Natura implemented on the turnaround 3 years ago.
So that's already a very clear part of collaboration. The other one is the integration and the synergies that we communicated earlier today, dollars 300,000,000 to $400,000,000 That's being led by our Chief Transformation Officer, Robert Chatwin, working also very collaborative between the Latin America part of the business and Avon International. And last, I also would highlight that we create a role under Ciballengado, a sustainable growth officer that will continue to drive some of the important pillars that we see that the group can actually add value, like sustainability, digitalization, how we think about innovation and how we take advantage of our capabilities that we have now across all businesses, so we can create more leverage and do it in a bolder way. So we are really applying that in a way that, again, we expect the autonomy with interdependency. JP, do you want to take the first part of Thiago's question, please?
Sure. Thiago, let me tell you what is not a risk. And there is to do with this strategy, the understanding of the opportunities and the problems, the financial resources, the culture and the people. And as Roberto just pointed out, I mean, we were we had already people dedicated to understanding where the opportunities were even prior to closing. And right after we jumped into action and confirming hypothesis and devising new opportunities and detailing the work plans in all areas.
And the one thing that this crisis allowed us to do was to accelerate the integration. We found talented people. We found people that were moved by similar causes, right, that were I mean, naturally, we're forced to work together, but that was extremely natural. And now we're talking about the combined business in a very smooth and energetic way already. So that's not a source of risk.
Now as you appreciate, at the same time, we are fixing and building. This is very much what I described to you. There are things to be fixed and many opportunities to be built. So the complexity behind this requires a very detailed thinking of all the activities. And I think this is the one thing that we are observing as a source of risk.
There's so many moving parts that requires a very precise sequencing and syncing. And that also includes the IT infrastructure you referred to. So data is critical and we are transferring as much as we can the capabilities which were already installed in Natura to Avon very quickly. But you put this all those things together and that is the main source of risk. And that is also the reason why we have a dedicated transformation team, which is at global scale led by Robert Chatwin, but we have people deployed to the region, to the countries, a very well structured program where we keep pace of every single step to be able to mitigate that what I consider to be perhaps the one most relevant risk.
Thank you, Jan.
Super clear. Thank you, Roberto. Thank you, JP, and thank you all for the presentations.
Thank you. Our next question online comes from Ruben Colton from Santander. Please go ahead. Your line is open.
Good afternoon, everyone. I believe everyone understands the technical difficulties during this time. So thank you for hosting this event event during these trying times. My first question is related to revenue synergies in LatAm. The first wave JP showed is related to fixed fundamentals at Avon on a stand alone base using Natura capability.
Should we expect this to happen in every market, even as operating throughout the world or only in Japan? And in the second wave, can you share some examples of like incentives you can use in overlapping consultants to boost the share of wallet of the 2 brands combined? And if I may, a second question on Avon International. Angela mentioned about a new IMPRO brand campaign. Could you elaborate
a little bit on that?
Are you going to try to show a new type of brand value in this sort of campaign? And also talking about the reduction of the portfolio, What this tell us about the future of the Fashion in Home category? Could you talk a little bit of that as well? Thank you.
Yes. So JP, why don't you start it and then Angela can comment a little bit on the on what we are planning. And again, without unveiling the new campaign, which is pretty exciting, but I think Angela can talk a little bit about the thinking behind. But, Pejep, go ahead and then I think I'll ask Angela to chime in.
Sure. Well, you will hear directly from Angela, but we are our teams are working together to understand how and what to do with the fundamentals of the channel management and with the portfolio. Our teams already met many times from the beginning of the year to fix this thing. So you should see the same sort of movement On a global scale, of course, each country and operation are starting from a different point. So it has to be adjusted in speed and in-depth of those changes.
You asked me about incentives that will be used. I wouldn't like to tell you much about that, but I can already tell you, say, even before the incentives, there are barriers like credit. There might be consultants, which are being blocked in one brand and enabled in another brand. And just by looking at their transactional combined profile, we can unlock credit. Similarly, logistics, there are delivery frequencies that can be incremented as we combine as we combine both brands, in which case it shortens the cycle with which the consultant and representative and finally the end consumer is served.
But without disclosing much, if you look if you think about the complementarity of our portfolios and categories, and this is something that we are we have already defined a plan where we define very precisely where each brand is going to play. If you think about that complementarity and against our competitors, that will be the sort of origin of the incentives that we're going to put in place so that we can encourage able representatives or Natura consultants to embrace the complementary part of the portfolio with the other brands against our main competitors. Angela, would you like to jump in?
Yes. Thank you, JP. Good afternoon. As you are all aware, we do have in this moment 98% of brand awareness in most of our countries. And we are still enjoying top opposition in top 3 brands in color, skincare and fragrance.
However, we see a major opportunity to reignite consideration and promote Avon as a refresh it position as a brand that is relevant cross generations and create this more relevant and really bolder position that will reconnect not our current customers, but the lapsed customers and create an opportunity to have the acquisition of new customers. So we are very excited by it. As Roberto has just said, we are not going to reveal more today, but we are aiming to relaunch the brand in the second half of this year. And JP has already called out the work we do together to reprioritize our core brands, understand their role as a traffic builders, increasing the basket, then looking at all the tiers from value to premium and create a portfolio that really taps into this new trend that we see right now, plus everything we've learned so far and create that emotional connection points, we are equally looking to cut the tail and create a much clear meter portfolio choice for each and every of these years that will give us an opportunity to streamline it by 30% and even more so in Fashion and Home, where we are looking to cut by 40%.
Is this answering your question?
Yes. Just on the Fashion and Home category, what should we think about it going forward? And that's perfect. Thank you.
Yes. So on this one, just briefly, Ruben, again, we see that it still is an important strategic category. But as Angela said, we are potentially taking advantage of this crisis to do a reset. And there is an opportunity in parts of the world to potentially reduce significantly the tail, which we know added a lot of inefficiency in the system with a very low margin. At the same time, there is also possibility to focus on a more strategic part of the business on the well-being side, on fashion and Home and Beauty side of Fashion and Home, it is important in Latin America and JP is also looking into that.
So I think the short answer is, it will continue to be any strategic part of the portfolio, but there is a big opportunity now and we are taking advantage and being very bold as we speak to reset that, to simplify, to streamline and to actually working on a more strategic elements of Fashion and Home.
Very clear. Thank you, guys.
Thank you. Our next question online comes from Joseph Gordono from JPMorgan. Please go ahead.
Good afternoon, everyone. Thanks for taking my question again today. So
like I just want
to understand like a little bit how you guys are seeing structural changes towards the future, right? It seems that like the COVID outbreak kind of fast forward 5 years, the digitalization of many of your customers, right? So and also like probably changing the consumption profile and also the consumption behavior. So at this point, again, I can note maybe it's too early to gauge potential structural changes. How are you guys seeing the consumers post COVID, right?
So on that within COVID, I think it's a little bit easier, but post COVID, how you see like the world changing? And how can that affect the investment plan of Natura and Co, particularly like on the bricks and mortar roll in here like includes Body Shop, Aesop and the rollout of the Natuzzi store? Thank you.
Hi. Hey, Joseph. I will start here and then I'm going to invite David and Michael to comment as well more on the global side and especially on their retail. But I think you already started articulating kind of very much the way we see it. So one, we are calling this new normal and we don't think that the world is going to go back to the way it was before this pandemic.
So there are important lessons and there are things that we want to build and continue to potentially even double down. One of them for sure is the digitalization in e commerce. You heard from the business how nimble, how agile the business has responded. And I think both in terms of our relationship selling, but also our omni channel on with The Body Shop and Aesop. I think we can continue to invest behind that and continue to drive a lot of the opportunities coming from e commerce.
You heard also from David the opportunity for us on the at home, right? So Body Shop at home, the direct selling part, we are seeing tremendous performance both in UK and Australia and we think that there is an opportunity to expand in other geographies. I also think that the consumer behaviors and preferences are going to change. We all discuss and agree that there's going to be different habits of consumers. I think categories related more to protection, hygiene are categories that are going to continue to be high demand and the teams are already working in innovation aspect that can better meet the demands of the consumers even post crisis.
So there's a lot of things that we already seeing and we are doubling down to make sure that we can come out of that even in a stronger way. So let me invite David and Michael to comment a little bit about from a retail perspective.
Thanks, Roberto. Forgive me, Michael, if I just jump in quickly. I think you summed up the situation pretty well. And Joseph, I'd refer you to my earlier presentation about the example that I gave around the U. K.
And the omnichannel approach that we're taking in that market. We continue to see stores as being important. It's the ultimate and most experiential place where we sell our product. So we see stores having a role going forward. As we see the stores reopening in markets, it's the picture is pretty much as you'd expect.
I mean traffic is not what it was pre crisis. And that makes us reflect on economics. So how many stores should we have? In that context, as you suggested in your question, it's probably a little early to say too much on that. But as you know from the progress that we've made in managing our store portfolio over the last couple of years, where there's opportunities to cut back on numbers of marginal and loss making stores, we don't hesitate to do that.
So a bit early in terms of really will be omni channel. And we think our digital channel and At Home is going to be increasingly important.
Yes. Maybe just building on what David just said, what I'd say is I concur from a channel perspective, I think coming out of this, I'm even a bigger believer in direct to consumer channels. I think we're finding and you're seeing in the U. S. With department stores recently going some department stores like Neiman Marcus having problems.
I think if you're just a wholesaler in this market going forward, then you're going to have some issues. The fact that all of our brands have such a large B2C component from a channel perspective, I think, is really powerful and really important going forward. And I just think generally the customer journeys that we're seeing and in markets we're reopening in Asia, it's no longer just either digital or retail. It's click and collect. It's click and curbside.
It's all different varieties. And so you also have to have the tech to back that. And then what I'd also say is, Roberto is right, the tech category is very strong. And we're finding in markets like Korea and Taiwan, Malaysia that's just reopened, customers are certainly interested in that. And for us, they're interested in trading up to a more premium product on that.
Having said that though, the core skincare lines for us and haircare are also trading quite well. So I don't think it's the same sort of consumer pattern post the global financial crisis this time. Thanks for that.
Thank you. Our next question online comes from Bob Ford from Bank of America. Please go ahead.
Thank you and thanks for the presentations. We're all doing these virtual forums for the first time, so it's very understandable to have
a little bit of
difficulty. Angela, I had a question with respect to consultant turnover. It's historically been very higher at Avon in comparison to Natura. And I was wondering how you can reduce that and how you can create a more compelling business opportunity for consultants. And you also mentioned some green shoots and I was hoping you could share some examples of those.
And then David, Michael mentions a 4x increase in store conversion rates and I know ASAP tends to be a little more curated, a little more 1 on 1, but I was wondering if there's similar opportunities for you at The Body Shop. And then you also mentioned expanding in direct sales into new markets. And I was wondering where you see the most compelling white space for that. And I also wanted to ask you when you anticipate putting some technology into that at home business, because my understanding is it's still relatively low tech.
Thank you, Bob. So Angel, go ahead and then I think David you can answer. Just on the 2 markets, Bob, in terms of at home, Again, without getting into much details at this point, as you even highlighted many times and you heard through the presentations, the 2 biggest markets in the world in beauty, we are extremely underdeveloped, right, China and the U. S. And I think it's not a coincidence that we are putting more effort in China, as you heard, Bruce, from David and Michael.
And it is one area that we are looking from an at home perspective at The Body Shop. But we at this point, we haven't committed anything. We are still in the evaluation mode. But Angela, go ahead and then, David, you can please chime in as well.
Sure. So in many of our markets, we have been focused on short term transactions. And this had an impact on the churn of our representatives, especially the new ones. Then we have had significant service issues, very difficult to retain representatives when they come in and they realize that there is a high effort for them to earn the money that they anticipated when they joined. And we are looking right now to improve their experience at all cash points, their service, But equally, their earning model gets to be much more long term focus in creating value proposition for different representative segments, creating that opportunity to bring a lifetime value based on the learnings we have, both from our previous experiences and experiments and as well the rich learning we are getting from Natura's turnaround from 3 years ago.
And all of this is up with simplified field management process that will give us this one to 1 peer support and attention to representative engagement, training and loyalty. And then it's about the value of the brand, yes, because when we create a brand that really create the demand, representatives are finding much more easier to stay connected to their customers and have the right frequency of purchase and the right size of basket, therefore, meaningful opportunity for them to stay with us longer term.
And in terms of green shoots, just some examples?
The green shoots we see as in digital, digital as well. Digital is key to the long term retention of the representatives. We've seen stabilizing already the representative decline, ending the quarter with a better ending rep count than we have been in the Q4 seeing the adoption of the digital channel right now, already 4x more than the one we started with. I mean, this is the highest speed of the acceleration we've seen with people adopting our digital tools. We have 37% of our representatives right now adopting the E Suite of digital apps.
So we do see a high representative engagement. And now during coronavirus, it has been overwhelming, truly humbling to see how the Avon community has raised to the challenge and they stay kept united.
David, do you want to chime in on the body shop? Yes, absolutely.
I'm very happy to. So I think Roberto has really answered the question on evaluation of markets. I mean, there's been a ton of stuff, as you can imagine, Bob, over the last few months. So we're pretty clear about what the landscape might look like in terms of the next 3 years or so. We just need to just get clear on where the next market going to be.
But we're getting fairly close to that decision right now. In terms of technology, so I'm kind of asking the second part of your question answering the second part of your question first. In terms of the technology, actually we had a platform that really did the job in the U. K. And you'll be familiar with the fact that we've made a lot of progress in at home in the UK over the last 3 years or so.
And we continue to be excited. I mean, just as a headline, consultant numbers currently are double what they were a year ago. So we feel good about the progress that we're making there. But the challenge that we have from a tech point of view was Australia was lagging. So last year, we made the investment to put the UK platform into the Australia business and provide some new tools for our leaders down there.
And as a consequence, we've been absolutely delighted with the progress. So we feel from the capacity of being able to do what we need to do with that channel right now, we have a tech platform that does the job. I mean, just going back to the first part of your question, talking a little bit about conversion. The reality is at the moment that when people are shopping, there's visiting sites, visiting stores, there's a high intention to buy. So we're seeing similar levels of improvement in conversion rates on our sites around the world as described by Michael.
And interestingly, as we're starting to reopen stores, and you won't necessarily be completely surprised by this, but we're seeing in the region of about a 10 point improvement in conversion rates in stores, because if you're going to go shopping at a time like this, chances are you're really going to buy something. So yes, conversion is encouraging, ATV is encouraging. You've seen the headlines about what's been going with e commerce. We've tripled our business. We think there's the opportunity to maybe able to do a bit more than that once our new warehouse is fully up to speed.
So, yes, hopefully that answers it,
Paul. And thank you. Our final question comes from Gustavo from UBS. Please go ahead.
Hello, everyone. Thank you very much for taking my question and thank you for continuing with this event despite the technical problems, but I think it's been very helpful to understand what's going on with the company. Thank you. I have a question that I wanted to tie a little bit what JP mentioned in his speech, although I couldn't hear that part. So maybe it's a little bit of a follow-up because of the technical issues.
But I want to take just to understand what happened in the Q1 first. When I look at Natura brand in Brazil and Avon brand in Brazil, the price mix grow and the same similar thing happening in this panic LatAm, but the price mix grow was up 9.7% in Natura brand in Brazil, 9.8% in Avon brand in Brazil, yet the results were very different, right? Natura brand grew almost 10% and Avon brand declined substantially. So tying that to wave 1, where you said that you want to, in a very short term, fix the operation in Brazil. And a few of the things you want to do is getting the pricing right, eliminate commercial bed practice, etcetera.
How that differs from what you're doing already with Natura brand in Brazil? And actually, perhaps understanding whether wave 1, 2 and 3 are sequential waves or actually everything is going to happen in parallel because it seems that a lot of the capabilities that Natura has today that Avon doesn't have in Brazil are in channel and not necessarily in category or pricing position, etcetera? And the last question also to understand what could happen with the turnaround in ANAIVO in Brazil is to pick up one sentence that Angela mentioned, which is the repositioning in Europe of Avon in Europe, when Angela said that you want to focus more on premium on a premium proposition rather than a value proposition, whether this is part of the Avon turnaround in Brazil and Latin America as well. And if that is part of the strategy, in Brazil and Latin America, but also internationally as you are in Brazil and Latin America, but also internationally as you're repositioning from mass to premium? Those are the questions.
Thank you.
So Gustavo, I'm going to start just to clarify a few things and then I'll ask JP. So one is, let's not forget that we acquire Avon and the levels of decline of Avon was around 10%, right, overall. So it is a turnaround story and that's not going to happen in a quarter or 2 quarters or even in a year, right? So just to be setting the expectation, this is a process, the synergies that we present today in revenue, it's a 4 year plan that we actually put it on the presentation, how we are planning to capture those. So it is a turnaround story.
So again, I don't think by magic, you're going to see from 1 month to another a performance of Avon similar to what we're seeing with Natura. We want to get there and I have all the confidence to all the plans that we are doing that we're going to get there, but it's going to take a while, right? So but even Brazil, just as a reference, right? Q4 2019, the So it's a sequential improvement and that's going to be the case. The other thing to clarify, I don't think we are saying and maybe there was a misunderstanding that Avon is going to be a premium brand.
Avon is always going to be a very democratic brand. It has a very important part of the portfolio. Having said that, there are categories and especially in Latin America like perfume that is very important, is a weak part of the portfolio of Avon. Taking all the learnings, all the expertise of Natura, there is an objective or a goal to potentially improve that part and create a little more revenue opportunity for the representative. But having said that, it's not that Avon is
going to become a premium brand.
So with that, let me invite JP to comment in more details about the wave that we put together. JP, please.
Yes. Gustavo, you made so many questions. I thought I would have to disclose all my strategic plan right now to you. But let's try my best here. So first of all, as regards Q1 results, Roberto already pointed out, it's very loaded with the inertia of the business prior to closing, right?
So we are not yet following the same recipe or anything like that. I mean, we are working very close to put together a common plan, but that's not the case. And when you look at one particular metric, which was the price mix numbers, you can already imagine that it's not being compared to 2 brands, the price mix effect is not being driven by the same drivers in both brands. So Natura was more mix, Natura was more price and you cannot just increase prices and expect that the whole equation will balance out if you're not playing with the overall perception of the brands and the different tiers in the portfolio. And that has to do with what Angela actually said and which Roberto pointed out.
Avon is not moving to is not going to become a premium brand. It's only that it plays in different price tiers and we have to be sharper on each of those price tiers and that gives us opportunities to obtain the portfolio better. And that's one of the things we're going to do going forward because perhaps we are we have been using, at least in Latin America, the lower end of that portfolio too much and there's no need for that. There are opportunities for using some more valuable parts of that portfolio, right? Now as regards all the waves, they do overlap to a certain extent,
but there is a sequence.
So wave 1 has to be well on its way for wave 2 to pick up. And both have to be relatively well established for us to push for wave 3. That is the sequence that creates more value and reduce risks to a question that was raised before. But there are even now there are tests going on, which are relevant for wave 3, but the majority of our effort is focused on Wave 1, okay? So Roberto, I think I finished here.
Yes. So guys, I want to again thank you all for joining us. Apologies again for the technical difficulties, but again, the whole thing was really in the spirit of you guys being informed about a lot of moving parts, but at the same time, about the excitement on behalf of the whole management team in terms of how the business is managing through the crisis on a very agile, resilient way and I believe posting outstanding results in a very challenging and unprecedented crisis. We certainly hope that the next meeting hopefully will be smoother or at least on a physical and a remote way. But again, we just hope that this enables us to be more informed about everything that's going on with Natura and Co.
I also want to say that the presentation is going to be available at our Investor Relations site in the audio as well. So you can always refer to that. And our IR team is always available for any further follow-up. We look forward to future exchanges. And in the meantime, please stay safe and be well.
Thank you very much. Have a great weekend. And for the countries with Mother's Day, happy Mother's Day this Sunday. Thank you very much.
Thank you, ladies and gentlemen. That concludes the Natura audio conference today. Thank you very much for your participation. Have a good day.