Natura reports strong 2004

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Brazilian direct cosmetics sales company Natura has reported a
growth in sales of nearly 30 per cent and a very healthy increase
in profits, following its expansion into the Mexican and French
market during the course of the year, reports Simon Pitman.

The company reported that gross revenues increased by 33 per cent to reach BRL 2.539 billion (€743.68m), while net profit increased 33.2 per cent to reach BRL300.3, compared to the figures for 2003.

The number of units sold during 2004 stood at 193.3 million, up 33.5 per cent from the 144.8 million items sold in 2003.

For the fourth quarter, gross revenues were up by 29.1 per cent to reach BRL 801.3 million, while net income was up 249.1 per cent to reach BRL 99.3 million, compared to the figures for 2003.

Natura​ said that concentrated demand for certain product lines had caused bottlenecks during the fourth quarter, which had in turn impacted gross revenue growth rate. The company said that this explained why growth tailed off slightly during this period, compared to the rest of the year.

In the company's core market Natura reported that it grew its share of a market, currently valued at BRL 8.652 billion, from 17.1 per cent in 2003 to 18.9 per cent in 2004 - representing a gross revenue of BRL 2.472 billion. This increase was attributed to a general buoyancy in the Brazilian economy, combined with the increasing consumer spending power of women combined with the successful launch of a number of new products onto the market there.

Net revenues in Latin America, which include Argentina, Chile and Peru, increased from BRL 12.2 million in 2003 to reach BRL 18.5 million in 2004, an increase of 52 per cent. However, the small scale of the operations means that the company has still not been able to break out of the red, with the loss from the operations coming in at BRL 3.3 million, compared to a loss of BRL 3.2 million in 2003.

Currently Natura is expanding into a number of new markets, with Mexico and France having been introduced during the course of the year. Currently sales outside of Brazil account for just 2.7 per cent of its group sales, but on the back of strong domestic growth, the company is expecting to invest significantly more in expanding its international markets during the course of 2005.

The company said that in 2005 it has an investment budget of BRL 120 million, which will be used to focus on making the logistics process more flexible, reducing problesm such as the bottlenecking experienced during the fourth quarter. These investments will include a new vertical warehouse, a new automatic picking line, increases in manufacturing capacity and production process automation as well as a number of programmes to upgrade IT operations throughout the company.

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