One part was: Natura () announced on the morning of Monday (15) the sale of Avon Central America and the Dominican Republic (or card). It now remains in the market, optimistic with the signs, to know the fate of the rest of the international operation – which may include the division of the arm in Russia.
For now, the business represents only the sale of operations in 6 of the 41 countries that constituted the International Avon: Guatemala, Nicaragua, Panama, Honduras, El Salvador and the Dominican Republic. However, it signals for one of the most anticipated movements by the market in Natura’s restructuring process, and “highly probable for the next 12 months”.
Since the acquisition of the brand by Natura in 2020, Avon Internacional has become a headache for the cosmetics company. The assets today for sale have, in general, negative cash flow, which is why they symbolically sold to $ 1 plus $ 22 million due by Avon Guatemala to Natura Mexico, the operation cheered analysts.
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Andrea Aznar, Banco do Brasil Bi’s investment analyst, evaluates the signing of the agreement with optimism, but says she continues to await a definition of other regions where Avon operates outside Latin America.
The design of the strategy to get rid of international assets began to become clearer for about a month, when Natura informed the dismemberment of the International Avon Card and began to treat assets as “kept for sale” in the disclosure of second quarter results. At the time, it defined three perimeters: the card itself, Avon Russia and Avon Cosmetics Limited (ACL).
Is Avon Russia the next?
For XP, Avon Russia is probably the next in the divestment line, which would pave the way to complete the sale of ACL – the rest of the International Avon Operation. Questioned by Infomoneythe company only reaffirmed what the last balance said: “It is highly likely to negotiate the International Avon assets within 12 months – as well as the sale of Avon Card assets, announced today.”
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At a news conference in August, Natura CFO, Silvia Vilas Boas, said the company evaluates “all alternatives for the sales process” of Avon Internacional assets.
In the case of Central America and the Dominican Republic, Avon sold its assets to the GPD group – a consumer goods company with presence in Central America and Peru – but has signed an agreement to continue providing brand products. The production is due to the company’s factory in Celaya, Mexico. The company will also be Licensor of the Avon brand in the region.
Asked about the terms of the licensing contract, Natura said that “they are royalties contracts signed within common market practices.” The company did not respond if new sales can adopt the same model.
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“This movement corroborates what was stated in the investor day held in late June, when the CEO [João Paulo Ferreira] From the company said that the goal of, especially with the brand Natura in Brazil and Latin America, ”says Aznar.“ This was an important step towards achieving the proposed objective, but for some value to be, in fact, it will be necessary to finalize the sales transactions of other regions. ”
A Santander IB report released this afternoon evaluates that, although not apparent relevant financial implications, the announcement improves the feeling of the company’s efforts to resolve International Avon. Based on available information, the bank calculates a cash economy of approximately R $ 60 million for Natura, for an ebitda (cash generation indicator) of R $ 3.3 billion in 2025.
