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So, first and foremost, as you can imagine, this has been an important process for us to find the right home for Avon, to really transform the business and
step-change our strategic ability to execute our ‘Open Up’ strategy.
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We feel the combination with Natura is very logical as well as a strategic fit to execute and give Avon a long-term home with a long-term vision in a pure play
dedicated direct-to-consumer beauty company.
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And I wanted to just highlight a number of the key points about why we’re excited about the deal. Firstly, we’re going to create a really big-scaled beauty
company which is multi-channel, multi-brand, and multi-geography.
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And what do I mean by that? Multi-channel is that, of the business, which is going to be almost $10 billion, a big part, the biggest part, 70 percent, is going to
be focused on direct selling. By combining Avon’s direct selling, social selling business, with Natura’s direct selling business in Latin America, we’ve become a very big and strong direct selling business.
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But on top of that, as you may know, Natura bought The Body Shop. The Body Shop has about 3,000 stores around the world.
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They’re also around the naturalness of the proposition they have and they also bought a company called Aesop which is a very premium personal care, beauty brand
retailer also now in many countries around the world. So, we see – and then, the third leg of the multi-channel of course is the whole e-commerce.
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All the businesses, whether it’s Natura, The Body Shop, Aesop, and of course Avon, are working hard to build an e-commerce leg to the business. So, it’s a very
exciting beauty company, multi-channel, direct selling, and e-commerce.
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It’s also multi-brand. The biggest brand in the new company will be Avon with over $5.5 billion worth of sales. The second brand will be Natura with a couple of
billion dollars’ worth of sales, The Body Shop with a billion, and then we have Aesop at almost half a billion.
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And of course there are many other sub-brands. But we’ll have a whole portfolio of brands that the combined company can then leverage in those various channels
that it has. So, multichannel, multi-brand, and multi-geography. Obviously both Natura and Avon are very, very strong in all of the Latin American countries.
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But also, Avon really adds a much more global footprint with our businesses in Europe, Central and Eastern Europe, in Western Europe, Africa, Middle East, and of
course Asia with a strong Filipino business. But also, the Body Shop is a global brand with retail outlets all across the world as is Aesop.
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So, it’s a multichannel, multi-brand, multi-geography company with beauty and cosmetics and color at its heart. We’ll have a very, very big color business which
is from Avon but also Natura, a very, very big fragrance business as well as skin care and face care. And of course, our fashion and home will also find a right place in there.
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The third element which I like in terms of the business is, both businesses are very, very purpose-driven. We’re very proud of our purpose of empowering women
around the world as well as stand-up for her causes; whether it’s breast cancer or violence against women and girls. But Natura is also a very value-driven company. Its 50-year history is based on sustainability and naturalness.
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And they’re very, very proud of driving the whole ethos of naturalness and sustainability in Natura but also with the acquisition of The Body Shop, is a pillar in
their business. So, the combination of these purpose-driven companies is going to make a very, very powerful new business. And Avon will be a shareholder in this new company.
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We’ve decided on a share deal because we want to not only be part of this combination but also, our shareholders will own 24 percent in this new company, which
means that everything we’ve been doing for the last year and will continue to do until we close the deal, which will be only next year, will go into the new company.
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And I think this is a transformational deal to really step change our ability to stay relevant for tomorrow. And going into a bigger company with a more strategic
partnership with a logical fit in terms of capabilities in direct selling, digital marketing, building direct selling brands with the geographic footprint is a logical and has a certain powerful rationale to it.
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As we think this through, obviously we need to get our emotions into the same place, as we have to win our minds and we have to win our hearts, and then really
start committing and getting excited, as we are, about the opportunities for the company over the next century.
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Because the exciting thing in -- is that we have to not think in years, we have to think in decades and centuries and to secure this company, this brand, this
legacy, and the 6 million bosses that we have for the next decades to come.
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All of us built stories in a building. All of us built chapters in a book. And we’ve got to make sure that this chapter makes a stronger company that looks after
our ladies in a better way. And I’m convinced that this new set up, which may be surprising and may very different, but it is a leap into a new chapter for Avon to make us stronger and bigger in a -- in a better, more strategic-fitting
company.
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So I’m looking around at my colleagues. Amy, have you got any wise words to say? I’m sure that your local teams will be very exciting, your local site leaders,
the general managers and departmental heads have been briefed. I’m sure they won’t be able to answer all the questions, but we will loop them back and see what clarity we can give.
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But thanks, everyone, what they’re doing for the company. I think we’re in a much better position now, having been able to do this deal and then set us up for the
future.
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Let me reiterate again. We are at the early stages. We will continue to do business as usual for at least until next year. So we’ll need to deliver this quarter
and the second half, continue to deliver, ‘Open Up Avon’, and really build this great company to the next level, ready to be then part of a bigger combined entity sometime this next year.
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Cautionary Statements for Purposes of the “Safe Harbor” Statement Under the Private Securities Litigation Reform Act of
1995
Statements in this communication that are not historical facts or information may be forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Among other things, these forward looking statements may include statements regarding the proposed combination of Avon Products, Inc. ("Avon", "we" or "us") and Natura Holding S.A.
(together with Natura
Cosméticos S.A., "Natura &Co")
; our beliefs relating to value creation as a result of a potential combination with Natura &Co; the expected timetable for
completing the transaction; benefits and synergies of the transaction; future opportunities for the combined company; and any other statements regarding Avon’s and Natura &Co’s future beliefs, expectations, plans, intentions, financial
condition or performance. In some cases, words such as “estimate,” “project,” “forecast,” “plan,” “believe,” “may,” “expect,” “anticipate,” “intend,” “planned,” “potential,” “can,” “expectation,” “could,” “will,” “would” and similar expressions,
or the negative of those expressions, may identify forward looking statements. They include, among other things, statements regarding our anticipated or expected results, future financial performance, various strategies and initiatives (including
our transformation plan, Open Up Avon, stabilization strategies, cost savings initiatives, restructuring and other initiatives and related actions), costs and cost savings, competitive advantages, impairments, the impact of foreign currency,
including devaluations, and other laws and regulations, government investigations, results of litigation, contingencies, taxes and tax rates, potential alliances or divestitures, liquidity, cash flow, uses of cash and financing, hedging and risk
management strategies, pension, postretirement and incentive compensation plans, supply chain and the legal status of the representatives. Such forward-looking statements are based on management’s reasonable current assumptions, expectations,
plans and forecasts regarding our current or future results and future business and economic conditions more generally. Such forward-looking statements involve risks, uncertainties and other factors, which may cause the actual results, levels of
activity, performance or achievement of Avon to be materially different from any future results expressed or implied by such forward-looking statements, and there can be no assurance that actual results will not differ materially from
management’s expectations. Therefore, you should not rely on any of these forward-looking statements as predictors of future events. Important factors that could cause our actual results and financial condition to differ materially from those
indicated in the forward-looking statements include, among others, our ability to improve our financial and operational performance and execute fully our global business strategy, the effect of economic factors, our ability to improve working
capital, our ability to reverse declines in active representatives, general economic and business conditions in our markets, our ability to attract and retain key personnel, competitive uncertainties in our markets, any changes to our credit
ratings and the impact of such changes on our financing costs, rates, terms, debt service obligations, access to lending sources and working capital needs, the risk of an adverse outcome in any material pending and future litigation and those
disclosed as risks in other reports filed by us with the Securities and Exchange Commission, including those described in Item 1A of our most recently filed Annual Report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Other risks and
uncertainties include the timing and likelihood of completion of the proposed combination of Avon and Natura &Co, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals for the proposed
transactions that could reduce anticipated benefits or cause the parties to abandon the transactions; the possibility that Avon’s shareholders may not approve the proposed transactions; the possibility that Natura &Co’s shareholders may not
approve the proposed transactions; the possibility that the expected synergies and value creation from the proposed transactions will not be realized or will not be realized within the expected time period; the risk that the businesses of Avon
and Natura &Co will not be integrated successfully; disruption from the proposed transactions making it more difficult to maintain business and operational relationships; the risk that unexpected costs will be incurred; the possibility that
the proposed transactions do not close, including due to the failure to satisfy the closing conditions; the possibility that the intended accounting and tax treatments of the proposed transactions are not achieved; the effect of the announcement,
pendency or consummation of the proposed transactions on customers, employees, representatives, suppliers and partners and operating results; as well as more specific risks and uncertainties. We caution readers that any such statements are based
on currently available operational, financial and competitive information, and they should not place undue reliance on these forward-looking statements, which reflect management’s opinion only as of the date on which they were made. Except as
required by law, we disclaim any obligation to review or update these forward-looking statements to reflect events or circumstances as they occur.
Participants in the Solicitation
Natura &Co, Avon, their respective directors and certain of their respective executive officers and employees may be deemed
to be participants in the solicitation of proxies in connection with the proposed transaction. Information about Natura &Co’s directors and executive officers will be set forth in the definitive joint proxy statement/prospectus, and
information about Avon’s directors and executive officers is set forth in its definitive proxy statement filed with the SEC on April 2, 2019, which also may be obtained free of charge from the investor relations page of Avon’s website
www.Avonworldwide.com. To the extent holdings of Avon securities have changed since the amounts contained in the proxy statement for Avon’s 2019 Annual Meeting of Shareholders, such changes have been or will be reflected on Statements of Change
in Ownership on Form 4 filed with the SEC. Additional information regarding the interests of participants in the solicitation of proxies in connection with the proposed transaction will be included in the registration statement, the joint proxy
statement/prospectus and other relevant materials Natura &Co and Avon file with the SEC.
Additional Information and Where to Find It
The proposed transaction involving Natura &Co and Avon will be submitted to Avon’s
shareholders and Natura &Co’s shareholders for their consideration. In connection with the proposed transaction, Natura &Co will prepare a registration statement on Form F-4 that will include a joint proxy statement/prospectus for
Avon’s shareholders to be filed with the Securities and Exchange Commission (“SEC”). Avon will mail the joint proxy statement/prospectus to its shareholders, and Avon and Natura &Co will file other documents regarding the proposed
transaction with the SEC. This communication is not intended to be, and is not, a substitute for such filings or for any other document that Natura &Co or Avon may file with the SEC in connection with the proposed transaction. SECURITY
HOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE REGISTRATION STATEMENT ON FORM F-4 AND THE JOINT PROXY STATEMENT/PROSPECTUS, CAREFULLY WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. The registration statement, the joint proxy statement/prospectus and other relevant materials (when they become available) and any other documents filed or furnished by Natura &Co or Avon with the SEC may be obtained free of
charge at the SEC’s web site
at
www.sec.gov
. In
addition, security holders will be able to obtain free copies of the registration
statement and the joint proxy statement/prospectus from Natura &Co by going to
www.NaturaeCo.com
and from Avon by going to its investor relations page on its corporate web site at
www.Avonworldwide.com
.
No Offer or Solicitation
This communication is neither an offer to buy, nor a solicitation of an offer to sell, subscribe for or buy any securities or
the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of
applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.