Constantly recognized in corporate governance awards, Natura & Co found itself in an unprecedented position in its history: last month, a meeting between the company and investment funds came to light to talk about results not yet disclosed, violating a basic pillar of transparency. In addition, it faced the disbelief of the market: the shares, in 12 months, fell more than 70%. To give a “turn” and regain confidence, the company brought an old acquaintance from the Brazilian market to the operation: the executive Fabio Barbosa.
Former president of ABN/Real, Santander It’s from April Group, Barbosa has always been involved in the environment and corporate governance, even before ESG – acronym for the environmental, social and governance areas – was fashionable. The executive says he arrived to tidy up the house, reduce the bureaucracy of the business and bring efficiency to a bloated structure. He replaces Roberto Marques, who will join the board and then retire.
To Estadão/Broadcast, the executive said that the decision to change the direction of the group – which owns the Natura, Avon, Aesop and The Body Shop brands – says that the problems of one brand will no longer be able to affect the growth of others and also the business as a all. In the conversation, he admitted that putting the Avon global home was more complex than the company initially anticipated – the purchase was closed on the eve of the outbreak of the coronavirus pandemic. Covid-19.
The change of command, announced yesterday, before the market opened, was well received. Natura shares rose 7.93% yesterday, closing the day at R$ 15.10.
Read the main excerpts from the interview below:
It is a troubled moment in the company, and one of the questions has been about communication with the market. How is it taking over the company at this moment?
The change in strategy was thought out because there is a concern about what can be done for the company to recover its growth. The company suffered from the issue of covid and the like, with externalities, which affected our results. The company’s strategy of seeking synergies guided the first years of the acquisitions. Now this is in the background.
The market does not see the synergy captures with Avon appearing in the company’s numbers…
Where it was possible to capture synergy opportunities, this was done. We realized, however, that we were insisting on seeking synergies and losing focus on each of the businesses. The complexity of the organization prevents having a clear vision in relation to the synergies captured. The search for synergies ended up tying the company down.
The reading of some investors is that Avon was more deteriorated than the company imagined. Is that why the company now decides to run the two businesses separately?
The view that Avon has more complexity than we imagined is correct. Possible integration was in Latin America. Around the world, what could be sought were operational integrations. That was done. Now, having the difficulties that Avon had, including pressures of distribution, logistics and supply chain, the idea is that one business cannot distract the other.
And what needs to change?
We now want to prevent the activity of one of the business units from interfering with another. We listened to investors and this change has to do with a few things. The first was the difficulties that the market imposed on everyone. Then, the internal difficulties that were passed on to us. And third, what we hear from investors. Of course we have internal problems. The transition committee will serve to go into a level of detail that I can’t go into right now and know what will be done in relation to the compensation package, capital allocation processes, for example.
And what are the priorities?
First, is to look at the issue of the compensation package, how to align the incentives to this new structure. Then, establish a capital allocation discipline and define which are the points that deserve capital allocation.
How was the first conversation to assume the executive presidency of Natura?
I have been on Natura’s (management) board for six years and a plan was being discussed to make it more agile. It was an escalating situation and I was asked if I couldn’t do that. I love Natura, and now I need to help the company. It was a project construction process that started six months ago. And, (from the decision on) my name to (assuming) the position, two months.
And what about the company’s plans to list its shares in the US?
It’s all on hold.