Welcome to Natura & Co's second quarter 2022 earnings. On this call today are Fábio Barbosa, CEO of Natura & Co, and Guilherme Castellan, CFO of Natura & Co. João Paulo Ferreira, CEO of Natura & Co Latin America, will join for the Q&A session. The presentation they will be referring to during this call is available on the Natura & Co investor relations website. Please limit yourself to one question each in the Q&A session, so we can allow more people to ask questions. Thank you for your understanding and cooperation on this. I will now hand over to Fábio Barbosa. Good morning or good afternoon to all of you, and thank you for joining us today. Very happy to be with you for my first quarterly earnings call since becoming CEO of Natura & Co less than two months ago. Gui, the CFO, will comment on the results shortly, so I will limit myself to a more qualitative commentary. Q2 was a difficult quarter, marked by high inflation, lower consumer spending, continuous supply chain disruption, and of course, the macroeconomic and geopolitical uncertainty that results from the war in Ukraine. Our performance in the quarter, of course, reflects this challenging environment. Let's be clear, it also reflects structural issues within our group that we have clearly identified and that we are now addressing. As you know, when I was appointed CEO, we also announced that I would head up a streamlined transition committee, and I'm pleased to report that we are making good headway in redefining the respective roles of the holding company and the business units in order to make our group less complex, leaner, and more decentralized, so that each BU can get on with the business of improving its performance, getting the support it needs, but also the latitude it needs. We want to preserve what makes Natura & Co strong and unique, notably its culture and commitment to sustainability. The BUs need to have the agility to react quickly to their market and strategic challenge. In my first few weeks, I have focused on two main priorities within the transition committee. The first is delivering a lighter and leaner organizational structure, one that combines autonomy and accountability. I'm happy to announce today that we have already identified significant savings in corporate expense, which we are implementing as we speak. To give you an idea of the magnitude, the savings we already identified would represent at least 40% of 2021 corporate expenses if the new structure was already in place last year, just as a reference of what we're doing. The second is reviewing the governance model and new ways of working within Natura & Co. The idea is to have a concentrated and streamlined holding company structure focused on a few key priorities, defining KPIs, monitoring the performance of more autonomous brands, and capital allocation. We are advancing well, and I confirm today that the transition committee, which is by nature transitory, will have concluded its work before the end of the year. At the same time, of course, we are continue our ongoing work to improve the fundamentals of our brands and business, and notably the underperforming ones, which we regard as our principal challenge, but also our main upside driver. We expect the environment to continue to be challenging in the second half, and we will continue to see headwinds. Revenue trends should improve in the second half. Two, we want to say that revenue should improve, but I mean, the revenue should improve, but margins should continue to be pressured in the short term. In this context, our priority is very clear. We are strongly focused on improving margins and generating cash flows. This is the guideline for every single business units, and they are all mobilized and incentivized accordingly to achieve these goals. With that, let me now hand over to Gui to comment on our Q2 performance in greater detail. Gui? Thank you, Fábio, and hello to everyone. I'll start with Natura & Co's consolidated revenue on slide 5, which stabilized in constant currency in the quarter amid a challenging macro environment. This stabilization came on the back of a high comparable base, as sales in Q2 of last year were up 31.7% at constant currency. In reais, sales were down 8.6%. We'll look at performance by view shortly, but in a nutshell, we posted solid growth in Natura & Co Latam with a strong performance by the Natura brand, and Aesop continues to post double-digit growth at constant currency. Avon International's performance was impacted by the war in Russia, but trends improve in most other markets. The Body Shop had a difficult quarter from challenging macro and a slow retail recovery, which could not offset the decrease in The Body Shop At Home and e-commerce. On slide 6, we zoom in more specifically on our digital sales. Digitally enabled sales, which includes both online sales from e-commerce and social selling, as well as relationship selling using our main digital apps, held versus last year at nearly 50%, despite the reopening of retail post-lockdowns. They remain significantly above pre-pandemic levels. The slide shows you a few key highlights. First, our digital payments platform, &Co Pay, continues to grow. The number of accounts at Natura in Brazil grew to 457,000 from approximately 390,000 the previous quarter. Total payment volume reached BRL 7.5 billion in the first half. As all direct selling and e-commerce payments at Natura Brasil already capture and process through the platform. Natura consultants who use the platform generally record higher activity levels and lower payment default. Second, relationship selling using apps continues to progress. At Natura Latam, the average number of consultants sharing content reached 28% this quarter, compared to 24% in Q2 2021. At Avon International, penetration of the Avon ON app reached 23% in Q2, 7 percentage points more than in the same period of last year. Third, our online sales are above pre-pandemic levels at all our brands, with strong growth notably at Natura and Avon. We turn to adjusted EBITDA margin on slide 7, which was resilient at 8% in Q2, down 50 basis points compared to the same period last year. As shown in this slide, the major unfavorable impacts were on gross margin. We managed to partially offset them through improvements in SG&A in Latam and a reduction in corporate expenses. The main unfavorable impacts on EBITDA were, first, 750 basis points from inflationary and FX pressure. Second, impacts of the war in Ukraine and others. These were partially offset by two positive impacts, 550 basis points of synergies and revenue management and other efficiencies, cost containment and one-offs, which improved margin by approximately 200 basis points. This includes corporate expense savings of BRL 60 million, of which BRL 20 million is cost containment and phasing effects of expenses. On slide eight, we focus on underlying net income. This slide shows you the bridge from net income, which was -BRL 706.7 million, to underlying net income, which was -BRL 262 million. The difference between the two comes from transformation costs for BRL 282 million, BRL 66 million from discontinued operations, and the PPA effect from the acquisition of Avon for BRL 158 million. On slide nine, we look at our balance sheet and liquidity profile. We ended the quarter with a cash position of BRL 4.3 billion. This cash position comes after free cash flow outflow of BRL 586.5 million in Q2. Management is strongly focused on optimizing cash conversion in the short and medium term. While we cannot be satisfied with our second quarter performance, it is an improvement of nearly BRL 736 million over Q2 of last year. This was notably driven by improved inventory levels as the businesses focus more on managing inventory, greater discipline in CapEx, and favorable exchange rate variation. Our net debt to EBITDA ratio stood at 2.46x at quarter end, up from 2.13x in Q1, and 1.43x in Q2 of last year. The leverage ratio reflects cash consumption and lower EBITDA. As you see on the second graph, our cash position of BRL 4.3 billion is higher than the total of our debt payments through 2027. The average maturity of our debt is 6.3 years, and we face limited debt repayments until 2028. Note that this does not include the July 2022 issue by Natura Cosméticos of BRL 826 million in debentures maturing 2027. These debentures partially replace the 2022 and 2024 issues, further expanding our average debt maturity to 6.5 years as part of our continued liability management. Let's turn now to our performance by business unit, beginning on slide 11 with Natura & Co Latam, which returned to growth in the quarter. Total net sales were up 5.6% in constant currency. This was driven by double-digit growth at the Natura brand, which grew by nearly 15% at constant currency, partially offset by a decline in Avon brand. Although trends have been improving since Q3 of 2021, particularly in beauty. The Natura brand gained momentum over the previous quarter and posted year-on-year growth of 14.3% in Brazil, supported by an acceleration in consultant productivity, up by 17.5% in Q2. In Hispanic Latam, net revenue was up 15.5% at constant currency and 8.8% in reais. Growth was mainly driven by Argentina and Colombia. Excluding Argentina, growth in Hispanic markets was still up in low single digits at constant currency, despite a very strong comparable base in Q2 of last year. Another highlight of the period was that the Natura brand was again ranked the strongest cosmetics brand in the world by Brand Finance. At the Avon brand in Latam, net revenue was down 5.1% at constant currency. In Brazil, trends are improving every quarter in recent periods. In Q2, net revenue showed the lowest revenue decline since Q3 2021 at -10.7%. It's important to highlight that the beauty segment actually grew by 5%, which was offset by a 31% sales contraction in Fashion and Home. The beauty segment in Brazil saw a double-digit gain in consultant productivity. In Hispanic markets, net revenue was down 2.8% at constant currency and 13.9% in reais. Here too, due to a drop in Fashion and Home. The new commercial model is showing significant progress in Ecuador and Colombia. With sales growth and a sequential improvement in the number of representatives, activity and productivity. Rep productivity in the beauty segment was positive across most markets compared to last year, and also improved sequentially. The total number of available representatives was stable versus Q1 of 2022, driven by Ecuador and Colombia, while the churn ratio improved in Ecuador, Colombia and Central America. On slide 12, we turn to Natura & Co Latam's Q2 adjusted EBITDA margin. As shown on the graph, EBITDA was up slightly by 70 basis points, while margin at 10.8% was stable versus last year. This performance was supported by synergies, revenue management and strict financial discipline, which offset by the impact of sales deleverage at Avon, raw material inflation and FX headwinds. The Natura brand's margin remains very strong despite high cost pressures. Avon was impacted by the continuing effects of the transformational plan, higher inflations and logistic expenses too. Let's now move to Avon International on slide 14. Revenue was down 11.4% at constant currency and 25.4% in reais. This drop was strongly impacted by the situation in Ukraine. Excluding Russian and Ukraine markets, sales were down 5.8% at constant currency and improved sequentially versus the previous quarter. Sales also reflected lower purchasing power in Europe, but this drop was partially mitigated by an aggressive revenue management plan across all markets. Fundamentals continue to show improvement and the new commercial model, now implemented in 16 markets, resulted in better rep productivity and activity and a reduction in churn ratio. Q2 adjusted EBITDA margin stood at 3.3%, down 100 basis points versus the same period last year. This was due to substantially higher cost pressures, the impact of the war in Ukraine and lower volumes mainly in European markets. These were partially offset by an effective revenue management strategy across markets and cost reduction resulting from strict financial discipline and a leaner operating model. On slide 16, we now move to The Body Shop. Q2 net revenues declined 11.8% at constant currency and 25.3% in reais. This reflects falling consumer confidence, but also post-lockdown channel rebalancing. Store revenues were up versus last year and improved versus Q1 2022, with growing footfall, but they remain below their pre-pandemic levels. This progressive retail recovery was outpaced by a decrease in sales in other channels, The Body Shop At Home and e-commerce, although they remain above pre-pandemic levels. Sales to franchisees also posed a decline in Q2, but are showing increased retail sales month-on-month, further reducing franchisees' inventory as they recover from lockdowns. Q2 adjusted EBITDA margin was 3.3%, down 970 bps versus Q2 2021, driven by lower volumes and channel mix as a result of decreases at home and e-commerce and lower sell-in to franchisee partners. In order to address these challenges through H2, management has been focused on actions to drive margin improvement. This includes leveraging recent investments to drive store and consultant productivity, especially in the critical fourth quarter, the continuation of the store footprint optimization, margin improvement from the continuing focus on product mix, and a detailed review of SG&A costs. On slide 18, Aesop again recorded an excellent performance with another quarter of double-digit growth in constant currency, up 25.4%, despite a challenging comparable base. Revenue in reais was up 5.7%. All regions delivered double-digit growth led by North America, Asia Pacific. Aesop continues to consistently post superior sales growth on a like-for-like basis, while continuing to roll out new stores in existing and new cities. Aesop is also continuing to see channel rebalancing, but online sales at 23% of the total are still more than twice above their pre-pandemic level. China entry plans are on track for launch by year-end 2022, including investments in digital platforms in the quarter. Q2 adjusted EBITDA margin of 16.2% was down 480 basis points compared to Q2 2021. This reflects planned high investments in digital, categories, geographies, notably China, and human resources to continue driving future sustainable growth. Let me now hand back to Fábio. Thank you, Gui. I will conclude now on slide 21 with our key takeaways, basically reinforcing what I said at the opening here. First, the transition committee work is progressing according to plan, and we fully expect to have it completed its work before the end of the year. Second, the work of the transition committee is clearly aimed at delivering a leaner, less complex and more decentralized organization, giving our BUs more autonomy, but also more accountability to a holding structure that is clearly focused on monitoring performance, tracking the right KPIs and allocating capital to well-defined priorities. Third, we believe that headwinds will continue and in the second half. Sales trends should improve as we cycle over weaker comps, but margins will remain under pressure in the short term. Fourth, in this context, our immediate focus, and that of all our business units, is on defending margin and generating cash flow. The whole organization is mobilized and incentivized to achieve these goals. This is part of our ongoing focus on improving the fundamentals of our underperforming business, which we view both as our principal challenge and our main upside driver. Thank you very much for your attention, and Gui, JP, and myself are happy to take your questions. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from Robert Ford of Bank of America. Please go ahead. Hey, good morning everybody, this is Bob Ford at BofA. Thanks for taking my question. Fábio, I'd like to ask a question about governance. As you review governance structures, incentives and KPIs, what are some of the early takeaways in terms of misalignments or flaws? And what does that mean for senior management scorecards moving forward? You know, and what kind of tracking and monitoring were in place for more autonomous brands and regions? Were those, or did you have, you know, reliable brand health indicators in place or measures of competitive dynamics that you could understand? And what do you feel is needed to better understand those businesses? Thank you. Well, lots of things here. Yes, we have the KPIs. KPIs not only in terms of, let's say, working capital, but also KPIs in terms of brand soundness, aspiration. We're gonna track many of these things in terms of expense control and everything. In terms of the incentives, what we are doing now, especially for the second half, is giving a lot more focus on margins and cash generation, and little less on growth, at least in the short term. These are the priorities we are having. The idea, when you give more latitude to the brands, the business units, of course, I mean, you have to have the accountability. Basically, when we talk about the role of the holding company, it's not to. Again, we will maybe continue to find synergies, but it's not gonna be the driving force here. The driving force is more to give autonomy and say, "Okay, these are the things that we believe are necessary." Again, in terms of performance, in terms of brand, in terms of sales force, in terms of, I mean, sustainability is something that we keep on. The KPIs will be the monthly tracked, and that's the way we will be able to make sure that the guardrails which are sending to the people right now, we have sent already to the various business units, that they will be followed, and we'll be tracking any deviation we have from there. It's a lot closer monitoring of KPIs without going to the details of each one's decision, given the specificities that we are dealing with on different brands, different markets, different realities, and different kind of problems that you're facing in our views. Okay? Fábio, I think in that it sounded like you felt there was an overemphasis on synergies before. Were there other flaws in terms of the incentive structure that was in place in your opinion? No flaws. I think incentives are designed to give a sense of priority for that period of time. The sense of priority that we're giving now, like if we had ended the cycle where we're looking for synergies, is saying, "Listen, for this point in time," I mean, given also inflation and all the pressures we are having on raw materials and everything, is to make sure that we take good care of the margins. That we take good care of the cash flow generation, which has to do with working capital and so on. That we give less emphasis at this point in time to grow sales, especially in a difficult market with rising costs. This is, these are the ideas. It's not flaws, it's another cycle that we are going through, but the incentives are aligned now for this, for the priorities we defined. Thank you very much. The next question comes from Joseph Giordano of Banco J.P. Morgan. Please go ahead. Hi, good morning, everyone, and thanks for taking my question. My question goes into the streamlining strategy of the business. We do see a very challenging environment on Avon International, so I don't know, like, if you guys are evaluating any kind of change there, particularly now that we have this sad situation between Russia and Ukraine. Maybe you would be considering discontinuing some of those operations. That's my first question. The second question goes, I think to JP. It seems that, like, even in Brazil it was not just synergies, but we also had some savings there. My question to you is, like, if you still see some, like, low-hanging fruits on the expense side, to make the company a little bit leaner and faster, to match the market dynamics in Brazil. Lastly, like, when we start to look at the store strategy, how should we be thinking about the franchise model and accelerate that to really change the dynamics of the channel? Thank you very much. Joe, Guy here. Great to hear from you. Just to be clear on your third questions about The Body Shop. No, it's not. Okay, perfect. I'm gonna take the first one, and then I'm gonna pass the word to JP, so he can expand on the other questions, right? I think to your first question, Joe, we are always looking, of course, at optimizing our footprint, right? We'll continue to do so, especially in those markets that we're not able to generate profit and especially in the short term, not able to generate cash flow, right? We're doing that as we speak. We'll continue to do that throughout the second half. If we have to exit, if we have to put any markets into another trading model, we'll act in that sense. Fábio mentioned, the short-term priority is very much focused on EBITDA margin expansion and cash flow. If we have to close markets or exit markets to improve that in the short term, we'll do that, right? With a sustainable long-term view, of course. Having said that, I think it's important for us to highlight a few things in Avon International, right? First, excluding the two markets of Russia and Ukraine, the trend is significantly better than before. We're posting -5.8% compared to double-digit decline in other quarters, right? Not only that, but we're seeing some advances due to the change in the commercial model. Activity is up in most of the markets, and more important, productivity is very healthy, right? The team has done a good job, of course, to offset part of the commodities pressure and the inflation pressure with revenue management. That gross margin pressure that we see in Avon International would have been much worse if the team wouldn't have reacted fast on the revenue management side. It's very important that even with the operational deleverage that we have in Avon International and with the gross margin pressure, which was significant in this quarter, you see that the team was able basically to offset part of that decrease in SG&A, right? The EBITDA margin for the period was only 1 percentage point. That is still at very low levels, and of course, we cannot be satisfied with that, and we're working to improve that towards the second half of the year, especially in the very critical Q4, which has, of course, a big seasonality impact, not only for Avon International, but for all our brands. It's a key priority for us to continue to work on SG&A as well to improve profitability. Yes, exiting some markets if that's the case, revisiting some markets if that's the case, but also continue our organic commercial model expansion and thorough revision of SG&A. With that, I'm gonna pass the word to JP so he can comment on Latam. Yeah. Hi, Joseph. JP here. Your first question was to do with additional synergies opportunities, and the answer is yes, there are. I'd like to remind you that we are not through the entire integration program, just to start with. There's that. But moreover, as we see Avon trending to stabilization in the region, we will accelerate business combination opportunities, which was, you know, roughly known as Wave 2, and that will bring additional opportunities also on SG&A. We are pushing in that direction going forward, no doubt. The second question was to do with our retail franchise stores for Natura. Well, retail for Natura is doing extremely well, not only in terms of additional stores, but same store sales is performing extremely well. That model will continue to expand very cautiously, where we think there are opportunities to expand our presence. We are very happy with that and that we will expand. Perfect. Thank you. The next question comes from Thiago Macruz of Itaú. Please go ahead. Hi, guys. Good morning. My question is regarding The Body Shop. Is it fair to say that you guys have tried to increase prices to offset the inflationary pressures and saw significant demand sensitivity? Or are you still deciding on whether to pursue that route? On that topic, can you give us more color on the inventory levels of the franchisees? How far are we today from the highs? Those are my two questions on The Body Shop. Thank you. Thank you, Macruz. Yeah, look, I think the story on The Body Shop this quarter is a story in which the retail recovery, of course, has improved year over year, right? Given the COVID last year. But of course, hasn't offset the decline, the big decline in The Body Shop At Home, right? The issue there is that the retail, even though it's improving year over year, is still down compared to 2019, right? When we look basically at the overall public information that we have on the retail in the UK, which is our main market, right? We get a sense that the footfall is down basically double digits, right? Compared to 2019. Which is significant, right? Especially in the masstige retail segments that we see in the country. However, in order to, of course, offset that footfall, the main action in revenue management for The Body Shop hasn't been on price increasing in the first half of the year. Has been mainly on the category mix, right? With a big focus on innovation and a big focus on some categories like skincare, which has a better margin in the end of the day, right? Now, with the retail footfall improving, which by the way, it has improved on a monthly basis when we look at the trends in the last few months, month-over-month is better. It's just again a little bit lower than our expectations. We intend to, of course, look at other ways of revenue management such as price increases for The Body Shop in Q4, and especially in 2023. Just to mention that in the sense of discounts, right? Which was a big problem for The Body Shop a few years ago, we have improved significantly, even though, again, in some periods of time and some countries we may be tactical about giving discounts due to the inventory level. Your question on franchisees. Franchisees, of course, is a channel very important as it drives significantly higher margin at the end of the day. It has been lackluster in the first quarter of the year, and it follows the same trend the second quarter of the year. Even though, to your point, the inventory level has improved, right? When we look at the inventory level by the end of June and compare that inventory level by the beginning in Q2, right, end of March or April. That level has improved in most of the countries that we operate through franchisees, right? Looking at the consolidated basis, inventory level is certainly better. However, just to be clear, it remains still at a higher level than what we had estimated, right? We continue to be cautious, especially in Q3, with the retail recovering in some of the countries about franchisees. We do expect that, at least to achieve better levels in the very critical Q4 for The Body Shop. Perfect, Gui. Thank you very much. The next question comes from Stephanie Wissink of Jefferies. Please go ahead. Thank you for taking our question. We have a two-part question related to growth margins. If you could talk a little bit about your current inventory position and maybe across your major brands. I know you just talked about Body Shop on the franchisee side, but just at the more global level. If you could talk about inventory by brand. Then on price strategy, which brands have you implemented price to help offset inflation? Which brands do you still need to implement price, and are you finding that consumers are receiving price without significant elasticity? Thank you. Thanks, Stephanie. Thanks for the question. Great to hear from you. Yeah, look, gross margin was significantly impacted this quarter, right? We look at basically Avon International. We had almost 300 points impacting gross margin. We look at The Body Shop with 250 basis points approximately, and Latam with 160 basis points of impact, right? Basically, all our units were impacted by gross margin as we had, of course, a big inflationary pressure and FX headwinds, basically in all of them, right? We saw almost 600 basis points of negative impact in inflation and in FX, right? Just to give an example, I think we wrote about that in the release. Palm oil has increased almost 50% when compared to the same period of last year. Print and Paper double digits as well with an increase of 10%, right? We're still seeing a big commodity inflation in basically our raw materials, and we expect to continue to see that in the short term, right? To your point on inventories, basically, I think inventories, it really depends. It really depends on a BU basis. But on a consolidated basis, though we are improving the way that we're managing inventory through a better SOP process, we're still operating with high inventories, right? Still there is a lot of room for us to improve. If you look at Latam, for example, on a year-to-date basis, there is already significant improvement in inventories in the first half of this year compared to the first half of the previous year, right? We'll continue to intend to do the same thing in H2. It is also a category story, right? We see, for example, inventories in fashion and home increasing more than of course the inventories in beauty. As we described before, as beauty continues to gain momentum in Avon in Latam, with a growth in Brazil of 5%, right? It really depends also on the category and of course in the country. We're still expecting some supply chain issues, right? Especially for our retail operations that has an impact, especially for the very critical Q4. I repeat, right, that's for both The Body Shop and Aesop as well, right? In that very uncertain scenario, we may see inventories for the retail increasing a little bit in Q3 for the preparation of Q4, right? It's again a fluid situation. We're improving a lot of process again, even though potentially at a lower pace than what we were expecting. We are already seeing some improvements in our inventory management process. We continue to intend to do so, even with all the external pressures throughout the second half of the year. Did I miss anything, Stephanie? I think you had a question as well about overall pricing, right? Yes, please. Thank you. Perfect. I'm gonna talk about our three BUs, and then I'm gonna pass to JP to talk about pricing in Latam, right? Look, I think with the exception of The Body Shop, I think both Aesop and Avon International has passed prices through H1. Of course, in different proportions, different categories, and different locations, right? Avon International, as I mentioned before in my previous question, we have been able to pass prices aggressively, actually, in most of the countries that we operate. The Body Shop, as I mentioned, we haven't been super active on price increase. Our attention has been more, of course, on managing discounts and in the short term, given, of course, the footfall decrease compared to pre-pandemic levels in some of the markets. I repeat, as it recovers, we'll tend, of course, to continue revenue management, not only through category mix in The Body Shop, but also potentially through some price increases in a few markets, right? With that, I'm gonna pass the word to JP so he can comment a little bit on the LatAm situation. Hi, Stephanie. As regards to the markets where we operate, what we are seeing across Latin America is that the industry is seeing increasing prices and volumes remain relatively flat up to now, right? Within that context, we haven't shied away from increasing our own prices. We already have and we will continue to try and protect our gross margins. If trends change, of course, we will make sure that our offerings continue competitive against our main competitors in the region. Thanks. Very helpful. Thank you. The next question comes from João Soares of Citibank. Please go ahead. Okay, thanks. Thanks for the question. I just wanted to hear about Avon Brazil. I mean, you're already seeing improvement in terms of the beauty line. Just hoping to see when we should see this overall productivity improve. We know you have been reducing the Fashion and Home, so I don't know if there's any additional adjustments to be made there. Just wanted to hear about the initial cross-selling, right? The initial effects of the cross-selling. How are you on that front? Lastly, about China. In the last call you mentioned that you were revisiting certain growth strategies, and of course, you're now focused on margins and cash flow. Just hoping to see where we are at that strategy. Thanks. João, can you repeat the last question, please? Sure, Gui. No, just on China expansion. How are the plans for China? Have they been completely postponed? Thank you, João. J.P. is gonna start here, and then I'll answer the other questions. João, we are confident on the trends coming from Avon. As if you look at the trends quarter-over-quarter, you see that it's trending towards stabilization, as I mentioned before. That trend should continue and driven by beauty, which was a deliberate choice. As regards Fashion & Home, we have simplified the portfolio. We are working, you know, towards targeting a more profitable business and simpler business there. That should remain somewhat negative in terms of productivity, but so that we can focus on beauty. That's what you're seeing there. If you extrapolate the data points, I think you can estimate when we should reach stabilization. As regards cross-selling, we are aiming to see a significant acceleration of the cross-selling initiatives toward the end of this year. We do think we are now better prepared to do that. Gui, should you comment? Yeah. Yeah. -Simon? Yeah, I will. Thank you, João. We're super excited about the entry of Aesop in China in Q4, right? We remain enthused about that. Aesop already has a pretty good brand awareness and brand equity in China, even though it hasn't operated there with own retail. And again, all the indications that we have is that basically the consumers are gonna be also very much into the Aesop proposition through the different experiences that Aesop offers, right? Especially compared to other luxury brands, right? So the plan for China, João, just to be super clear, in the short term is an Aesop plan, right? We're still expecting to launch two stores until the end of the year in Q4. We already have basically decided on the retail location. We're working on that. We still committed here with a Q4 entry, at least in two store locations in Shanghai, with a plan to continue to expand that in 2023, right? In the short term, that plan will be mainly focused around the Aesop brand. We're very enthused about that story in mainland China. Very helpful, Gui and JP. Thanks. The next question comes from Irma Sgarz of Goldman Sachs. Please go ahead. Yes. Hi, thanks for taking my question. I was hoping to get a little bit more detail on the integration cost line, which I think was primarily coming from Natura & Co LatAm this quarter, as well as the group restructuring cost of, I think, about BRL 150 million. I mean, obviously, you've talked about a little bit of what you're doing in terms of group restructuring, but I was hoping to get a little bit more detail of exactly what is in those lines and also how you're thinking about the forward for those lines. Should we think about those lines to recur for a couple more quarters? What sort of magnitude? Any sort of indication there would be useful. Then also about guidance. You had revised guidance, or the previous management had revised guidance in May, if I recall correctly. Especially for the leverage targets that you had pushed out to 2024. I was just curious if you're maintaining those targets. Thank you. Thank you, Irma. Good to hear from you. Thanks for the question. Yeah, look, we continue to deliver basically on our transformation costs, namely for Avon International and the integration costs in LatAm, right? You're right, in Q2 of this year, we had approximately BRL 100 million coming from integration in LatAm, right? Of course, that is efficiencies that we find with the Avon/Natura combination. Part of that, of course, is related to people as the transformation costs of Avon is related to people as well. Was a big impact in Q2. We should expect to continue to see some impacts in the second half of the year as we continue to find efficiencies, sustainable efficiencies for our business, going forward. You're right. Look, there is a group restructuring costs that already impacted Q2. That was basically the decisions that we took in the last quarter. Basically what Fábio had mentioned at the beginning of his presentation, that there's basically a cost savings map around 40% that if we had implemented that in the base of 2021, not necessarily that number is the impact in Q2. That number, we're gonna see that in, especially in Q3, but mainly in the second half of the year. You should estimate to see more, let's say, expenses coming from the group restructuring in the short term to drive, of course, recurring savings in our group as we move towards a more leaner and lighter structure, as Fábio mentioned. The second question, sorry, was about? Guidance. Guidance. Yes. Guidance. Thanks. Thanks, Irma. Yes. No, look, we're not commenting on guidance at this point. I mean, as we discussed before, right, the transition committee continues to analyze the structure and the new governance model, which we know that there will be a potential impact in our financial forecasts, right? And again, the idea of that is not only looking for savings in the group structure, but also to improve the governance, gives more autonomy and accountability for the BUs, so we can be a little bit more agile in reacting to the market, to the market challenges, right? We'll continue to review our strategy, especially in the very important Q3. Of course, assuming there is any change related to that topic, we'll make a formal communication to the market. At this point, there is absolutely nothing to comment on the change in guidance. Okay, thank you. The next question comes from Ruben Couto of Bradesco. Please go ahead. Hi, everyone. Good morning. Thanks for taking my question. Just a quick one here. I mean, both Fábio and indeed, you talked about improving cash generation. You know, this quarter, I think we saw a pretty large consumption of cash. I was just hoping that you could, you know, take us through a little bit of the detail about what has driven that in the second quarter. Thanks very much. Ruben, thank you for the question. Just to be clear, the question is about the cash flow in the second quarter, right? Then the main drivers. Is that correct? That's correct. Yeah, yes. Yeah, okay. Perfect. Now look, again, I think we already said that. I don't wanna be repetitive, but I'm gonna say again, right? Cash flow has become, I think, the top priority for the company, right? In terms of focus, especially in the short term, right? Very important, as Fábio mentioned, the BUs are incentivized to deliver that as well, of course, as the holding is, right? It is very important for the firm to continue to focus on cash generation, right? We're not happy with the Q2 results, right? We understand that there are of course some one-offs there, and some catch up to do in Q3 and Q4, but we're not happy on that. Even though again, we already see some better results, as I mentioned, especially on the inventory management level in terms of working capital. On the return on investment as we do a more diligent and thorough CapEx review of the projects in the short term, right? As I mentioned before, Ruben, the three priorities for us when we look at cash conversion, right, will continue to be working capital, will continue to be on the inventory management, which we believe is one of our biggest turns that we have there, will continue to be on payables. We understand that the results in the second quarter of the year on payables were not satisfactory, and we expect to catch up, especially in Q4, in that sense. Of course, receivables, even though again we continue to see an improvement in bad debt in most of the countries that we operate. Of course, we'll continue to be diligent in that sense, as well. CapEx is also another lever, as we have seen in Q2 and H1, right? Will continue to be, by the way, in H2, even with some investments, as I mentioned, for Natura and for Aesop, especially geography and category for Aesop. But that will continue to see a lever of improvement, especially when we look as percentage of net revenues. Finally, cash tax rates, especially in the second half of the year, where again, we see a better profitability coming from the markets and we continue to evolve in our tax planning side. It's very important to highlight though, right, and again, I want to be very clear that we're not happy with cash flow, but I think it's very important to highlight that historically, the business has a big seasonality in terms of cash consumption in H1 and cash generation in H2, especially in the very critical Q4, right? Which again is basically a seasonal quarter for all the BUs and basically a huge cash generation quarter for Natura & Co, right? We remain very much focused on delivering the cash flow in H2. As I said in the beginning of my answer, all the BUs are mobilized and more importantly incentivized to deliver on that front. Okay. Thanks very much, Guilherme Castellan. The next question comes from Danniela Eiger of XP Investimentos. Please go ahead. Hi. Thank you for taking my question. The first one is a follow-up on the restructuring expenses. You mentioned that it was mainly related about the adjustments made on Q4. Just wanted to know if we should expect that to continue in the coming quarters. I know that the transformation and integration expenses should continue, but just on this particular line. My second one is actually regarding the tone of the speech in the release regarding the second half of the year. I understood it as more cautious on profitability, though still constructive on the top line and obviously very focused on cash generation. I just wanted to understand if that's correct or if maybe you could provide a little bit more color on how you're thinking about the margin dynamics for second half of the year across brands. My last one, if I may, is regarding leverage. Given that there is a lot of headwinds both on the macro front and the restructuring of the businesses, how you're feeling about that going forward. I know that again, you're very focused on cash generation, but just wanted to have a greater view on how you are thinking about this going forward. Thank you. Thank you, Danniela. I'm gonna try to cover all of your three questions. If I forget anything, let me know. I think the first one was related to corporate expenses. We saw a decrease in the corporate expense in the quarter, basically from our more than BRL 150 million in Q2 of the previous year to BRL 88 million in the Q2 of 2022, right? Just to be clear, as we stated in the release, there's approximately BRL 20 million that was driven mainly by cost containment and phasing of expenses, right, in Q2 of this year. Of course, there are savings that are gonna stick. There are savings that, as we discussed before, they were related already to the actions announced in Q2. Now, we expect more savings to come, as Fábio mentioned in the beginning of the call, as of course, we continue to deliver this leaner and lighter structure at the holding level. Even though, again, we are not giving any type of guidance about our corporate expenses for the short term or for the medium term. We do expect significant savings to continue to flow into the bottom line coming from a leaner structure, and especially the announcements that we have made and will continue to make throughout the Q3. The second question, I think was related to the tone and to the H2 outlook, right? Look, the situation is very fluid, right? I think you can get a sense as per our results about some good news coming from a few places. Other places are still showing a little bit of a challenging environment and so on, right? We're being cautious, yes, about the H2. We're still expecting to see basically commodities and inflationary pressure to play a role in our gross margin. We'll continue to offset that through revenue management, right? Not only price increases and discount management, but also through basically a mix of categories, right, which has been a focus for us in most of our views. We're expecting, of course, as we saw in the second quarter in Q2, we expect our revenues to trend better. We're seeing basically our views trending better, Q2 versus Q1, and we continue cautiously, of course, expecting to see that trend flow into the H2. In terms of margins, I think you're right. We're still expecting the commodities to play a role in the short term. We are working thoroughly on the margin side, as I think one example of that is the corporate expenses in the holding that you just saw. Not only that, all the BUs are very much focused on delivering margin in H2, even with the challenging scenario that some are experiencing. I think it's a yes, given how the situation is fluid and how the situation is uncertain and how we're still being impacted by geopolitical tensions, and inflation in most of the markets. We are cautious about the second half, even though, again, I repeat, we're not providing any type of guidance in terms of margin for the second half of the year. Keep in mind that as cash flow margins also have a seasonality, right? Of course, I repeat that Q4 is the critical quarter for us to deliver a good margin in terms of results, right? When we say that we're being cautious on margin, not necessarily we are comparing to H1, but we're comparing to the margins of the previous year. I think that the third question was related to leverage. Yes. I think, look, on that, a couple of things impacted our leverage. The first one is all the transformations that we see in our P&L, either through the transformations of Avon or integration costs of Latam and the corporate restructuring. Of course, that has an impact in the reported EBITDA, right? Though, again, those savings, they're supposed to be recurring. We should have, again, the benefit of those actions supporting bottom line in the future. Cash is a priority, right? Both cash and margin is a priority. Cash is a priority for us, as we discussed. We continue to, of course, to track and monitor results of the BUs and of the holding very closely and incentivizing them a quarter, right? From a financial perspective, I think you saw the chart and you're aware, of course, of the chart in terms of debt level, maturity. We're comfortable with that, but that doesn't mean that we shouldn't focus on leverage in the short term, and is again a priority for us as you well described. That's super clear. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Fábio Barbosa for any closing remarks. Thank you very much for being with us today. As it was extensively discussed here and is widely known, we are all operating in a challenging environment. We have a clearly defined priority, and we are mobilized to deliver them. How? Just to stress it. First, by allowing BUs to increasingly focus on their specificities. Two, by setting the right guardrails and incentives from the holding for the people which are close to the action to go in the direction that we all believe we need to go. Thank you for your attention. Have a great weekend. Goodbye. The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.