Good morning, ladies and gentlemen. Thank you for waiting. We would like to welcome everyone to Natura &Co's call to discuss the perspective on the sale of Aesop. On this call today are Fabio Barbosa, CEO of Natura &Co, and Guilherme Castellan, CFO of Natura &Co. After Natura's remarks are completed, there will be a short question and answer session. This call may contain forward-looking statements. Such statements are not statements of historical fact and reflect the beliefs and expectations of Natura &Co's management. 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. I will now hand the call over to Fabio Barbosa. Please go ahead, sir. Thank you. Good morning to all of you, and thank you for joining us on this call at very short notice so we can share with you a few thoughts on Natura &Co's perspective on the sale of Aesop that we just announced and then answer your questions. I'm here with Guilherme Castellan, our CFO, who'll make a few brief initial comments, and we'll then open the floor for a Q&A session. As we know, we announced in a material fact that Natura &Co has reached an agreement to sell Aesop to L'Oréal. This sale follows a strategic review of the different alternatives for Aesop that had been previously communicated to the market. The transaction is all cash and values Aesop at $2.525 billion. The price reflects the spectacular growth trajectory of Aesop during this time as part of the Natura Group, as we will show shortly. The transaction remains subject to regulatory and other customary approvals. We expect to close it in the third quarter of 2023. For Natura & Company, this sale is guided by two key aspects. First of all, the proceeds from the sale will allow us to improve Natura & Company's capital structure. We view the leverage in our balance sheet as a path to unlock value for our shareholders, and we'll be very disciplined in our capital allocation. Second, the proceeds we enable allow us to invest in our strategic priorities, which, as we have said previously, include furthering and accelerating the integration of the Natura and Avon brands in Latin America, as well as the further optimization of Avon's international footprint and the continued improvement of The Body Shop's business. Let me hand over to Guilherme to give you a bit more granularity on this. Gui? Thank you, Fabio, and good morning to all of you. The key question is what we'll do with the proceeds of this transaction. As we have indicated, we're focusing on executing our strategic priorities and generating proof of stability and cash conversion while returning the company to a growth position. At Natura &Co Latam, the Natura brand continues with a very strong momentum, both in Brazil and Hispanic markets, and we will continue to invest to strengthen its leading market position. For the Avon brand in Latam, the major focus is on the so-called Wave 2 to accelerate the integration with Natura in order to capture the full benefits operating both businesses. The fundamental idea is to unify the value propositions for our consultants can operate with both brands while enhancing the consultants' and the company's profitability. At Avon International, we are continuing the business transformation after the rollout of a new commercial model, which is already showing positive underlying KPIs in the markets where it has been deployed. At the same time, we're further optimizing our geo footprint, discontinuing some unhealthy markets from a profitability point of view, while rightsizing structural costs to improve the overall profitability. At TBS, we are rightsizing the business to adapt to challenging customer environments. As you know, we have already announced such steps as closing The Body Shop at Home in the U.S., a distribution center in the U.K., as well as headcount reduction. The management team is focused on stabilizing the top line of the core business and implementing cost savings to deliver margin expansion and support cash conversion. Over the past decade, under Natura &Co's stewardship, we built up Aesop into a unique global brand in the luxury beauty space, focused on its spectacular growth. Between the end of 2012 and end of 2022, the company has increased net sales by almost 20 times to $537 million from $28 million. It has grown from 52 to 395 stores and has expanded its geo footprint from 8 to 29 markets. In the fourth quarter of 2022, Aesop made successful entry into the Chinese market with the launch of two physical stores, along with the aesop.com platform and a domestic Tmall operation. The company has also diversified into new categories, notably fragrances. In this growth, which shows Natura &Co's ability to grow businesses that allow Aesop to command the premium valuation of today's transaction. We'd like to salute the company's performance. We know it will continue this growth trajectory under its new ownership. Let me now hand back to Fabio for his concluding remarks. Thank you, Guilherme. What are the key takeaways? As you saw, Aesop growth strongly under Natura &Co, and we wish it every success under its new owners. Following the divestment of Aesop, Natura &Co will be a refocused company. The substantial valuation commanded by the transaction will give us a strengthened financial structure, and we'll use most of these funds to invest in our strategic priorities, always with the utmost strict financial discipline. With that, Guilherme and I are now happy to answer your questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Please hold while we poll for questions. Our first question comes from Danniela Eiger with XP Investimentos. Hi, Fabio, Gui. Thank you for taking my question, and congratulations on the transaction. I have two questions. The first one is actually regarding taxes on capital gain. I just wanted to check if the capital gain is actually subject to a 34% tax rate, and if that's the case, if the company could use accumulated credit to pay for part of the total of that, the taxes. The second one regarding the use of proceeds. You guys mentioned that you aim to improve capital structure. Just wanted to understand how you're thinking about how much to be dedicated to prepay debt, and if you already, like, mapped which ones are you targeting the most? Thank you. Gui, can you pick up that? Sure. Thanks, Dani, for the question. Hope everything is well with you. Well, first of all, I'd like to just to say that in order to improve our communication and our transparency, we have been trying to communicate things as fast as possible in a very clear and transparent way. There are things that we can communicate, there are things, of course, that we cannot communicate for regulatory reasons and there are things that, of course, with the fluid environment, given the uncertainty, we just don't know yet, right? I think taxes there, it fall in between number 2 and number 3, right? We're working, of course, on our tax planning. At this point, we have absolutely nothing to talk about taxes. We cannot give any type of guidances in our results this year, as you are aware. Of course, as we continue to work on that, we'll communicate to the market the impact. As a Brazilian company, of course, Natura &Co's match course is indeed subject to Brazilian taxes as you know, Dani. We have paid taxes according to the law for all the years that we operated in Brazil and in other countries. Now to your second question on the liability management. Yes, as Fabio mentioned and I repeat it, one of the focus will be to reduce gross debts with the proceeds after the closing of the transaction. Basically the main priority here will be focused on the cost of debt on cash flow, right? As you know, Dani, we have been talking to the market about this. Our free cash flow to firm last year was almost flattish, right? The negative cash flow that we are incurring on a recurring twelve-month basis has been mainly because of the interest burden, right? One of the focus will be for us to reduce that. Of course, always with mind looking at maturity as well, right? I think maturity and the cost of debt, especially from a cash flow perspective, will be the two key points. We already have mapped what we will do. Of course, we'll communicate that throughout the next months as we approach the closing. Hope that helps, Dani. No, it helped a lot. Thank you, Gui. Thank you. Our next question comes from Joseph Giordano with JP Morgan. Hi, good morning, everyone. Good morning, Fabio, Gui. Thanks for taking my question. I have a question, still on this business simplification, right? You're, at this point, like we're talking about, streamlining the gross debt position, so eliminating very expensive debt. My question to you is if we do have further asset sales to take place or equality that you guys mentioned, that some assets could be sold in Latin America? My question to you is like, if there is something extra to come? On top of this, like, if, like thinking on, on the core, right, we could be thinking about, like, selling another brand, in the future to further simplify the operation? Last but not least, like, when should we start to think about, like, a dividend, again in the story? Thank you very much. May I will take that. No, we are not considering any other sale. As we said, the idea now is to follow the strategy and make the investments that we understand necessary and with a discipline, financial discipline. I think this is the utmost important message here is the capital discipline or the discipline on capital allocation that we have implemented here at the company. By the way, already for many months ago, when we put margin, EBITDA margin as a key priority, number one, cash flow generation as a second priority, and growth in sales, at this point in time, at least as a third priority. We are after profitability and a very disciplined capital allocation. What we are doing is we have this plan now, which is widely known for integrating Avon LatAm and Natura LatAm, and everything is taking place and so on. It's already on the move. We are also working on Avon International, where we are gonna focus on the key markets where there is growth, and we are revisiting our presence in other markets where there is little or no growth or no profitability, let's put it this way. Where as I said, and I repeat here, we may go from full presence to head franchise, from head franchise to the to distribution or even get out of these markets, exit those markets depending on where we are, depending on perspectives and so on. We will do, again, based on the disciplined capital allocation. We'll put money in Avon International where there is possibility of growth. Again, there are ten markets, take it or leave it, where this happens. For TBS, it's the same situation, but more localized. It's not like going around the world, but, how do we rejuvenate the brand and as well as how do we improve the geographical position. We've seen UK, we've seen Canada, we've seen Australia, which are the key markets. Given the fact that, there's some dynamic now after COVID, after home office and so on, and we are working on that, reducing costs, cutting off on the central expense and so on. No, there is nothing being thought along the lines that you mentioned, of a possible sales spin-off or anything. There's nothing on the table right now. In terms of dividends, I think it will depend on how we manage now this capital allocation, how we see the investments, how we see the debt restructure that we'll do. Of course, there is lots of things to be done. Just to bear in mind, of course, there's planning being worked, but this transaction is to be closed on third quarter, so there are lots of studies and to be made and so on in terms of how do we best allocate these funds. There is no commitment on dividends or not, or on no dividends whatsoever. It's open. Okay? Perfect. Thank you very much, Fabio. Thank you. Our next question comes from Robert Ford with Bank of America. Congratulations on the transaction, Fabio and Gui, and thanks for taking my questions. How much investment will the optimization of the Avon International footprint, the continued improvement of The Body Shop and Wave 2 of Avon require? You know, how does the Aesop sale influence how you're thinking about international expansion for The Body Shop and Natura? Gui, you take that? Yes. Thanks, thanks, Bob, for the question. I want to reinforce just one point, right? We have three brands in the portfolio right now after the divestment, after the closing of the divestment of Aesop, right? Natura, Avon, and The Body Shop. Three valuable brands that we're very proud of all of them. Three brands that are in moments, in distinct moments and of course, that will work in different ways in the short and medium term. Why I'm saying all of that is because I want to reinforce that the great focus, of course, in terms of investments in the short term will be related to the integration in LatAm, right? Of course, that, as Fabio said, we'll continue the footprint optimization in Avon International, right? We have talked a little bit about that in the end of last quarter, focusing especially on developing markets. We'll continue to work on the turnarounds of The Body Shop that again, will include the closure of The Body Shop at Home, some geographies, optimization of some fixed assets and locations, et cetera, et cetera. The bulk of the investments that we're planning in the short term are related to the integration in LatAm, which again, as we have discussed, Bob, we believe will be transformational for Natura &Co. Bob, can you just repeat your second part of the question, if that's okay? Of course. It was just, how does the sale of Aesop influence how you're thinking about international expansion, right? For The Body Shop as well as for Natura. Yeah. We will continue our, we'll continue our plans, our strategic plans for each one of the BUs independently as they have been built in the last few months, right? Of course, we still have investments to do in Latin America, as I mentioned in my previous question. We'll continue to invest in other countries as well outside Latin America, to support Avon International and The Body Shop, right? As we also have discussed previously, there are some geographies like China, for example, that the short-term plan was Aesop plan, right? Was not a Natura, was not a The Body Shop, was not an Avon plan, right? We'll continue with that, focusing on the battlefields that we believe are important, at this point. But of course, any changes in terms of geographic expansion internationally, we'll communicate to the market accordingly. Perfect. Thank you very much. Just Robert, just to put some color on it, this is basically one of the main changes that took place from a year ago, more or less, which is not to go for expansion in new markets, but rather to consolidate our presence in the markets where we are doing well. Avon International in particular being the case. There are, again, 10 countries, a little bit more, a little bit less, where the company is doing well, the results are good, the growth is there. We want to consolidate there, invest in marketing again, which we had not done much in the past on these countries, then revisit our business model in other countries. The idea of expanding meaning opening new countries and so on, be it for The Body Shop or be it for Avon International, the answer is not on the map right now. Thank you so much, Fabio. Very helpful. Thank you. Our next question comes from João Soares with Citi. Thanks. Good morning, everybody. Congrats on the transaction, Gui, Fabio. I just wanted to really, I mean, I think you gave a lot of messages regarding the cash conversion. Guy, I mean, looking forward, I think last year, one of the biggest consumers of that cash flow was your cost of debt burden. Right now, when you think about, you talk about a lot about capital discipline, really diligent CapEx. I just wanted to hopefully get more color in terms of working capital to really try to review how should we think about this cash conversion going forward. If you could generally talk about that, it'll be great. Thank you. Yes. Thank you. Thank you, João. Yeah, I talked a little bit in the first question about the cash flow firm and the cash flow to equity, right? I said that though the cash flow to firm was almost flattish this year, the biggest burden has been the cash interest cost of debt, right? It is very important though for us to separate the two things, right? Because independently of the proceeds of Aesop, we are aiming, João, to improve cash flow to firm significantly this year, right? It's compared to previous years. It's not only about repaying debt and taking away the interest burden, right? Also, as we have discussed, of course, we saw an improvement in working capital last year, and that improvement needs to continue this year, right? Again, I think this year we have an exercise. Last year, the main focus, as you know, was on the inventory side. This year, we have an exercise to do, as well as inventories, but payables as well. As we discussed, we should see some optimization in terms of net CapEx as well, right? Not only gross CapEx, but net CapEx as the integration of the Business Unit term should result in some divestments, right? From a free cash flow firm standpoint, we should see some improvements already in 2023 compared to 2022. Of course, that together with the liabilities management exercise that we should do after the closing. Keep in mind that the closing, as we mentioned, it is expected to happen in Q3, so you probably are not gonna have, of course, the full annualized savings on that. With the liability management exercise we're planning to do, you should also see significant benefits coming from a lower interest burden in your cash flow, right? I think it is important to divide both things because we should expect to see some working capital optimization as part of course of our plan this year. Of course, cash flow is, as you know, João, it's very seasonal for Natura. Q1 is always a quarter that we expect to see some headwinds in terms of cash flow. Of course, when you look at 2023 as a whole, as we disclosed last quarter, we are expecting to see improvements in terms of the cash flow to firm and of course, the cash flow to equity. Great, Guy. Very clear. Thanks so much. Thank you. Our next question comes from Maria Clara with Itaú. Hi, guys. Thanks for getting my question and congrats for the transaction. During the call, you gave us more color about the main initiatives to further develop each business unit operation. Thinking about the short term, could you please rank what are the main priorities on a consolidated view after the in-integration of Avon? What are the other core priorities that you have in mind here? Are you likely to see any operating improvements of the use of this investment during this year, in the short term? Thank you. Maria Clara, I'll get the first part of it. Thank you. The main focus right now, the biggest, let's say, change that we're investing on is exactly the merge between Natura and Avon in Latin America. To give you an idea, I think we are starting with the pilots in Peru and Colombia, and it will start in Brazil between October, September, take it or leave it. There is a long way to go. This is our main focus. We do not wanna have any diversion on that. As I mentioned in the past, we started on first phase with, let's say, simple, search for synergies in Latin America, now we are going much deeper. There are lots of synergies. We are beginning with more on back office and let's say HR, for instance, finance, treasury, for instance. Now we are going into the sales force. Now we are going into the systems. Now we are going to delivery. Now we are going into minimum orders and things like that, which are substantial change, which we believe will improve substantially the margin. That's what we are after. I also mentioned, I'll repeat here that I mentioned in past meetings, not today, but we are de-emphasizing the non-cosmetic sales that was an important part, so to speak, on Avon representatives. We are focusing on cosmetics where the margins are good and the brand is worth it and so on. This is the main one. And that's where we want to concentrate the effort and so on. Further in the future, of course, we have to consolidate better margins and growth and so on, but this is not the short term that you asked for. In terms of the Avon and The Body Shop, I don't think I have much to add to what I said. We continue the process. I mean, we have mapped, okay, so Avon International, the countries, what we wanna do in each one of them. Of course, some of them are more difficult. We have presence in Russia, and this is not an easy situation to do what we want, but what we can do, for instance, but that's more on a, an ad hoc situation. When we go into other countries, we are revisiting it. Investments, yes, are being made, basically, they are investments which were decided even before this transaction with Aesop. It's basically to concentrate efforts on few countries instead of spreading out in the 40 countries more or less that we had. In The Body Shop is the same. We are going through a process which had already been approved to enhance the stores. I mean, the stores today, they look much cleaner and there is a proved improvement on the performance of the stores which are cleaner. We are getting away from discounts, which was a little bit the emphasis that we saw in the last few years. Let's say you go, buy 3, take 4, and things like that, and working on the brand and on the design. We have to improve it. We have to see the performance coming. For the experiments that we are doing, it looks good. We will continue doing that. We are also taking the measures in terms of reducing the central costs and the administrative structure and so on. There are investments which were already decided before this. We, Guilherme and myself, we are very much focused talking about the after sale of Aesop, because everything I said here were decisions that we took even before that. We very much say it's capital discipline. As all of you know, I mean, we have to be careful when we have the cash that we do not do things just because we have the cash. We are very strict on what are the good things we wanna know, wanna do, and what kind of capital we need in order to do those things. We are, let's say, guardians here of this capital discipline. Thank you. Thank you. Our next question comes from Ruben Couto with Santander. It appears we have lost connection to Ruben Couto. Our next question comes from Eugenia Cavaleiro with JP Morgan. Good morning, Fabio, Guilherme. Thank you for the call and for the details on the transaction. My question here is if you could provide us a level of net leverage you feel comfortable running the company. How could you see this figure evolving as soon as you have the cash inflow from the transaction? Thank you. Hi, Eugenia. Yeah, I will. Fabio, thanks. I think we spoke a little bit about this in the earnings call in the previous quarter in Q4, right? We are not intending at this point to give any guidance in terms of optimal capital structure or optimal leverage ratio for the company. As we also have mentioned, when we look at the company, the profitable markets, and the cash flow generation for the previous years, we will be very comfortable running the company with a leverage between 1 to 1.5 times, which again, we believe that will be the range for our optimal capital structure in the short term. Of course, as markets become more profitable and they evolve, that also will change. Of course, everything is also fluid, right? The focus on the short term is to focus, is the cash flow, right? Is the cash conversion. Hence that's why we are basically starting to minimize the liability to take out the interest burden. Thank you very much. Thank you. Our next question comes from Alex Wright with Nau Securities. Yeah, thank you very much. I just have one remaining question, please. As a result of the Aesop sale, are there any synergies across the group that you may expect to lose? If so, would you be able to provide any details of where those would be, please? Thank you. Just talking about the synergy that we might lose, that was the first part of your question. I didn't get it 'cause actually the second part. The first part, very little. If you remember, in June, we decided to change a little bit our strategy from a search for synergy among the four units to independence, what we call the given latitude with accountability. Therefore we every unit and Aesop being one of them of course, decided on many of their own initiatives, not looking for what kind of benefits could we have. For instance, a concrete example, just to put some color on it. HR system, shall we have the same HR system for everybody? Previously we said yes, and then we said no. I mean, actually everyone goes and do whatever. We're based in different countries. We have different legacies and so on, so everyone goes. There were very few synergies, so to speak. As you know as well, we have a fantastic valuation of the company. In terms of the percentage of sales and so on and number of people and so on, it's not a major part of Natura. It's not like we are taking a good part of the results or a good part of the people or the head count and so on. It's so to speak, it's a very valuable business, very profitable business. Which will not make any difference in terms of the synergies that you asked. There was a second part in your question that I think I missed. Could you repeat, please? No. That's fully answered my question. Thank you. Okay. Congratulations. Thank you, Andrew. Thank you. Bye. Thank you. There are no further questions at this time. I would like to turn the floor back over to Fabio Barbosa for closing comments. Just to thanks everybody. I mean, we are very excited about it. It really, I'm using the expression, it puts new horizons for us, and we are very careful on making sure that we take this opportunity of improving the, all the system of the company in terms of looking for the best alternatives. Again, capital allocation so on, being the key and central mode at this point in time. Thank you very much for your confidence and we'll certainly take calls and answers and so on the next few days. It would be a pleasure. Thanks, everybody. Have a nice day. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.