Natura profits from Brazilian cosmetics boom

By Simon Pitman

- Last updated on GMT

Related tags: Cent, Brazil, Cosmetics

Brazilian direct sales cosmetics player Natura is benefiting from a
booming domestic economy and renewed vigor for all things cosmetic,
having announced a big increase in its end of year sales and
profits.

The company said that gross revenues for the full 2005 year increased by 27.7 per cent over those achieved in 2004, to reach BRL3.24bn ($1.52bn), while net income came in at BRL396.9m, an increase of 32.2 per cent from a year ago.

And the fourth quarterly results reflect that the company's performance has been growing all the more towards the end of the year, with a net profit of BRL138.5m representing a 39.2 per cent from the BRL99.4 million seen in the same quarter of 2004, and gross revenues increasing 28.5 per cent to reach BRL1.02bn.

Of the total revenues in 2005, the company said that 97.1 per cent were attributed to the domestic market, with the remainder being concentrated on the international market.

The international sales also represented a considerable boost over the figure in 2004, when international sales represented 2.6 per cent of the total.

In the third quarter the company opened its first European store in Paris, a move that is expected to fuel future international growth and a continued focus on international markets is expected to occur throughout the coming year.

But undoubtedly it is the booming domestic market that is helping to drive the company's performance right now. Currently Brazil's cosmetics association, Abhpec, estimates the country's cosmetics and toiletries sector grew by an estimated 16.5 per cent during the first ten months of 2005.

Feeding this growth there has also been a big increase in cosmetics and toiletries manufacturing activity in the country. Abihpec figures reveal that a further 107 cosmetic and toiletries facilities were completed during 2005, bringing the total number to 1,367.

Natura says it has been able to top this phenomenal sector growth rate through a continued to drive on sales channel expansion. In 2005 the company launched 156 new products - a very strong rate considering the company's current size.

In line with the strong sales growth, Natura also reported that it increased its market share in Brazil, up from 18.6 per cent of the market for the first ten months in 2004, to 20.6 per cent for the first ten months of 2005.

Looking ahead to the next year, the company says that it will stand by its existing strategy by concentrating its efforts on innovation and the development of new products that capitalize on the Brazilian biodiversity and technological development.

Natura has been working with leading natural ingredients supplier Beraca in an effort to increase the sourcing of natural based ingredients from the Amazon basin.

The Amazon rainforests are considered to be a still relatively unexplored and vast source for a range of cosmetic ingredients and sustainable sourcing is something many of the leading cosmetics players are currently pursuing.

Related topics: Business & Financial

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