Natura & S A : Demonstrações Financeiras em Padrões Internacionais - Versão em Inglês

Natura &CO Holding S.A.

Individual and Consolidated Financial Statements

For the year ended December 31, 2023

DocuSign Envelope ID: 15F5ACB2-5506-4047-ACD7-3166B6DCFDCB

Independent auditor's report

To the Board of Directors and Stockholders

Natura &Co Holding S.A.

Opinion

We have audited the accompanying parent company financial statements of Natura &Co Holding S.A. (the "Company"), which comprise the statement of financial position as at December 31, 2023 and the statements of profit or loss, comprehensive income, changes in shareholder's equity and cash flows for the year then ended, as well as the accompanying consolidated financial statements of Natura &Co Holding S.A. and its subsidiaries ("Consolidated"), which comprise the consolidated statement of financial position as at December 31, 2023 and the consolidated statements of profit or loss, comprehensive income, changes in shareholder's equity and cash flows for the year then ended, and notes to the financial statements, including material accounting policies and other explanatory information.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Natura &Co Holding S.A. and of Natura &Co Holding S.A. and its subsidiaries as at December 31, 2023, and the financial performance and the cash flows for the year then ended, as well as the consolidated financial performance and the cash flows for the year then ended, in accordance with accounting practices adopted in Brazil and with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) (currently described as "IFRS Accounting Standards" by the IFRS Foundation).

Basis for opinion

We conducted our audit in accordance with Brazilian and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Parent Company and Consolidated Financial Statements section of our report. We are independent of the Company and its subsidiaries in accordance with the ethical requirements established in the Code of Professional Ethics and Professional Standards issued by the Brazilian Federal Accounting Council, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

PricewaterhouseCoopers Auditores Independentes, Avenida Brigadeiro Faria Lima, 3732, 16º andar, partes 1 e 6, Edifício Adalmiro Dellape Baptista B32, Itaim Bibi, São Paulo - SP, CEP 04538-132,T: [phone], F: [phone], www.pwc.com.br

DocuSign Envelope ID: 15F5ACB2-5506-4047-ACD7-3166B6DCFDCB

Natura &Co Holding S.A.

Key audit matters

Key Audit Matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the parent company and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Matters

Why it is a

key audit

matter

How the

matter was addressed

Why it is a Key Audit Matter

How the matter was addressed in the audit

Impairment test of indefinite useful lives intangible assets of the group of cash- generating units Avon International

As described in Notes 17 (a) to the parent and consolidated financial statements as of December 31, 2023, the balance of intangible assets with indefinite useful lives, including goodwill from business combinations, relating to the group of cash- generating units ("CGUs") Avon International,

totaled R$ 4,128 million. As of December 31, 2023, the Company's market capitalization was lower than the carrying amount of its net assets. Also, as described in Note 25.1, the referred group of CGUs Avon International has presented recurring losses in recent years.

For the purposes of the annual impairment test, the Company's management determined the recoverable amount of the group of CGUs Avon International, calculated based on its value in use, considering discounted cash flows. As a result of the annual test performed in 2023, the Company recognized an impairment loss of the goodwill balance allocated to the group of CGUs Avon International, in the amount of R$ 664 million. The cash flows projections prepared by the Company to determine the recoverable amount of the aforementioned group of CGUs include data and assumptions that involve significant judgments made by management, such as: revenue growth rates, discount rate, operating margin, and perpetuity growth rate.

Our audit procedures included, among others, the evaluation and testing of relevant internal controls related to the measurement of the recoverable amount of the group of CGUs Avon International.

With the support of our valuations experts, we analyzed the reasonableness of the calculation models used by management to prepare the projections, in addition to the main assumptions used, such as revenue growth rates, discount rate, operating margin, and perpetuity growth rate, comparing them, when available, to market data.

We tested the logical and arithmetic consistencies of the models prepared by the Company and compared the main assumptions with the approved projections which were complemented by the Company's management for a discretionary period of 10 years, used in the cash flow estimates to determine the recoverable amount of the group of CGUs Avon International.

Finally, we read the information presented in the footnote's disclosures.

Based on the audit procedures performed, we consider that the criteria and assumptions adopted by the Company's management in determining the recoverable amount of intangible assets with indefinite useful lives of the aforementioned group

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DocuSign Envelope ID: 15F5ACB2-5506-4047-ACD7-3166B6DCFDCB

Natura &Co Holding S.A.

Why it is a Key Audit Matter

How the matter was addressed in the audit

This matter was still considered to be one of the key audit matters, considering the relevance of the balance of goodwill and intangible assets with indefinite useful lives of the group of CGUs Avon International, as well as the fact that changes in the main assumptions used can materially impact estimates of projected cash flows and measurement of the recoverable amount of goodwill and intangible assets with indefinite useful lives and, consequently, the financial statements.

of CGUs Avon International, for impairment test purposes, are consistent with data and information obtained.

Realization of deferred income tax assets of the subsidiary Avon Cosmetics Manufacturing S. de R.L. de C.V.

As disclosed in Note 11.1, the subsidiary Avon Cosmetics Manufacturing S. de R.L. de C.V. ("Avon Mexico") presents, as of December 31, 2023, balance of deferred income tax assets arising from temporary differences and tax losses in the total amount of R$ 376 million.

Projections of future taxable income prepared by the Company's management include data, assumptions and tax planning opportunities involving significant judgments.

Thus, the realization of deferred tax assets may occur differently from management's estimates. For this reason, we still consider this matter significant for our audit.

Our audit procedures included, among others, updating the understanding and assessing the relevant internal controls related to the process of assessing the realization of the deferred income tax asset of the subsidiary Avon Cosmetics Manufacturing S. de R.L. de C.V.

We tested the logical and arithmetic consistencies of the of the projections of future taxable income, prepared based on approved cash flow projections, as well as evaluated the reasonableness of the main assumptions used to support the projections of future taxable income generation.

In respect to the effects of tax planning opportunities, we read the formal approvals documents of the plannings and involved tax experts in the evaluation of the legal and tax aspects. We also evaluated the adequacy of the disclosures made by the Company in the consolidated financial statements.

Our audit procedures provide evidence that judgments and assumptions used by management, and the disclosures in the notes to the financials statement are consistent with the data and information obtained.

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DocuSign Envelope ID: 15F5ACB2-5506-4047-ACD7-3166B6DCFDCB

Natura &Co Holding S.A.

Other matters

Statements of Value Added

The parent company and consolidated statements of value added for the year ended December 31, 2023, prepared under the responsibility of the Company's management and presented as supplementary information for IFRS Accounting Standards purposes, were submitted to audit procedures performed in conjunction with the audit of the Company's financial statements. For the purposes of forming our opinion, we evaluated whether these statements are reconciled with the financial statements and accounting records, as applicable, and if their form and content are in accordance with the criteria defined in Technical Pronouncement CPC 09 - "Statement of Value Added ". In our opinion, these Statements of Value Added have been properly prepared in all material respects, in accordance with the criteria established in the Technical Pronouncement, and are consistent with the parent company and consolidated financial statements taken as a whole.

Other information accompanying the parent company and consolidated financial statements and the auditor's report

The Company's management is responsible for the other information that comprises the Management Report.

Our opinion on the parent company and consolidated financial statements does not cover the

Management Report, and we do not express any form of audit conclusion thereon.

In connection with the audit of the parent company and consolidated financial statements, our responsibility is to read the Management Report and, in doing so, consider whether this report is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement in the Management Report, we are required to report that fact. We have nothing to report in this regard.

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DocuSign Envelope ID: 15F5ACB2-5506-4047-ACD7-3166B6DCFDCB

Natura &Co Holding S.A.

Responsibilities of management and those charged with governance for the parent company and consolidated financial statements

Management is responsible for the preparation and fair presentation of the parent company and consolidated financial statements in accordance with accounting practices adopted in Brazil and with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) (currently described as "IFRS Accounting Standards" by the IFRS Foundation), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company and consolidated financial statements, management is responsible for assessing the ability of the Company and its subsidiaries, as a whole, to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and its subsidiaries, as a whole, or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the parent company and consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the parent company and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Brazilian and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Brazilian and International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the parent company and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Company and its subsidiaries.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

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DocuSign Envelope ID: 15F5ACB2-5506-4047-ACD7-3166B6DCFDCB

Natura &Co Holding S.A.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Company and its subsidiaries, as a whole, to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the parent company and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company and its subsidiaries, as a whole, to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the parent company and consolidated financial statements, including the disclosures, and whether these financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the parent company and consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats to our independence or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

São Paulo, March 11, 2024

PricewaterhouseCoopers

Auditores Independentes Ltda.

CRC 2SP000160/O-5

Leandro Mauro Ardito

Accountant CRC 1SP188307/O-0

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NATURA &CO HOLDING S.A.

STATEMENT OF FINANCIAL POSITION AS OF DECEMBER 31, 2023 AND 2022 (In thousands of Brazilian reais - R$)

	Note		Parent			Consolidated		Note		Parent			Consolidated
ASSETS		12/2023	12/2022		12/2023	12/2022	LIABILITIES AND SHAREHOLDERS' EQUITY		12/2023	12/2022		12/2023	12/2022
CURRENT								CURRENT
Cash and cash equivalents	6	1,079	5,566	3,750,944	4,195,713	Borrowings, financing and debentures	19	-	-	163,844	331,151
Short-term investments	7	1,579,899	24,264	4,024,056	1,800,439	Lease	18	341	193	298,600	878,448
Trade accounts receivable	8	2,562	-	3,524,395	3,502,399	Trade accounts payable and reverse factoring operat	20	31,033	6,451	5,302,478	6,375,930
Accounts receivable - sale of subsidiary	1.2	-	-	22,915	-	Trade accounts payable - Related parties	32	333,116	64,576	-	-
Trade accounts receivable - Related parties	32	150,815	66,329	-	-	Dividends and interest on shareholders' equity payab	24	294,231	260	294,231	260
Inventories	9	-	-	3,087,395	4,516,874	Payroll, profit sharing and social charges		19,881	51,485	1,019,688	1,276,977
Recoverable taxes	10	52,367	38,902	608,530	911,410	Tax liabilities	21	83,762	12,191	634,760	828,125
Income tax and social contribution		-	-	175,563	196,143	Income tax and social contribution		-	-	908,442	70,294
Derivative financial instruments	5	-	-	188,997	235,114	Derivative financial instruments	5	-	-	329,676	1,613,968
Other current assets	14		15,545	13,562		604,427	763,384	Provision for tax, civil and labor risks	22	-	-	491,301	463,655
			1,802,267	148,623		15,987,222	16,121,476	Other current liabilities	23	31,984	23,113	970,479	1,499,060
Assets held for sale	13		-	-		-	51
Total current assets		1,802,267	148,623	15,987,222	16,121,527	Total current liabilities		794,348	158,269	10,413,499	13,337,868
NON-CURRENT								NON-CURRENT
Accounts receivable - sale of subsidiary	1.2	-	-	806,582	-	Borrowings, financing and debentures	19	-	-	5,947,858	13,261,135
Recoverable taxes	10	-	-	1,112,407	1,356,868	Lease	18	483	352	851,840	2,392,289
Deferred income tax and social contribution	11	47,948	150,167	2,200,695	3,519,515	Payroll, profit sharing and social charges		4,230	6,029	16,069	26,152
Judicial deposits	12	-	-	408,030	457,550	Tax liabilities	21	-	-	127,194	117,358
Derivative financial instruments	5	-	-	89,453	773,251	Deferred income tax and social contribution	11	-	-	328,090	934,414
Long-term investments	7	-	-	36,698	35,235	Income tax and social contribution		-	-	380,176	448,532
Other non-current assets	14		-	-		1,027,679	1,252,437	Derivative financial instruments	5	-	-	-	191,274
		47,948	150,167	5,681,544	7,394,856	Provision for tax, civil and labor risks	22	1,097	1,051	875,291	873,618
								Other non-current liabilities	23		4,077	17,750		686,533	751,566
								Total non-current liabilities			9,887	25,182		9,213,051	18,996,338

Investments	15	22,056,486	22,215,420	-	-	TOTAL LIABILITIES
Property, plant and equipment	16	-	-	3,457,574	4,966,150
Intangible	17	-	1,445	16,569,866	23,260,970	SHAREHOLDERS' EQUITY	24
Right of use	18	773	530	1,050,809	2,941,887	Capital stock
							Treasury shares
Total non-current assets		22,105,207	22,367,562	26,759,793	38,563,863	Capital reserves
							Accumulated losses
							Other comprehensive income
							Shareholders' equity attributed to the Company's shareholders

Non-controlling interest in shareholders' equity of subsidiaries

804,235	183,451
-	-
12,484,515	12,484,424
(164,236)	(262,360)
10,466,501	10,540,885
780,308	-

• (1,994,555)
  (463,849) 1,564,340

23,103,239 22,332,734

--

23,103,239 22,332,734

19,626,550	32,334,206
-	-
12,484,515	12,484,424
(164,236)	(262,360)
10,466,501	10,540,885
780,308	-

• (1,994,555)
  (463,849) 1,564,340

23,103,239 22,332,734

17,226 18,450

23,120,465 22,351,184

TOTAL ASSETS	23,907,474	22,516,185	42,747,015	54,685,390	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	23,907,474	22,516,185	42,747,015 54,685,390

*The accompanying notes are an integral part of the Financial Statements.

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NATURA &CO HOLDING S.A.

STATEMENT OF PROFIT OR LOSS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(In thousands of Brazilian reais - R$, except for earnings per share)

				Parent			Consolidated
	Note
			2023			2022		2023				2022
NET REVENUE	26		-			-	26,737,277				29,223,656
Cost of Sales	27		-			-	(9,675,435)			(11,770,762)
GROSS PROFIT			-			-	17,061,842				17,452,894
OPERATING (EXPENSES) INCOME
Selling, marketing and logistics expenses	27		-			-	(11,015,940)			(11,558,866)
Administrative, R&D, IT and project expenses	27		(188,615)		(383,514)	(4,225,027)			(5,023,626)
Impairment loss on trade receivables	8		-			-	(605,874)			(604,847)
Share of profits (losses) from subsidiaries	15		3,399,519			(2,560,587)	-				-
Other operating income (expenses), net	30		(2,795)		-	(1,369,849)			(649,192)
OPERATING PROFIT (LOSS) BEFORE FINANCIAL RESULT			3,208,109			(2,944,101)	(154,848)			(383,637)
Financial result	29		(73,119)		5,594	(2,513,499)			(1,784,981)
PROFIT (LOSS) BEFORE INCOME TAX AND
SOCIAL CONTRIBUTION			3,134,990			(2,938,507)	(2,668,347)			(2,168,618)
Income tax and social contribution	11		(152,897)		78,878	86,400				(92,353)
PROFIT (LOSS) FOR THE PERIODS FROM CONTINUING OPERATIONS			2,982,093			(2,859,629)	(2,581,947)			(2,260,971)
DISCONTINUED OPERATIONS
PROFIT (LOSS) FROM DISCONTINUED OPERATIONS	36			(8,362)		-	5,556,457				(597,655)
NET INCOME (LOSS) FOR THE YEAR				2,973,731			(2,859,629)	2,974,510				(2,858,626)
ATTRIBUTABLE TO
The Company´s shareholders			2,973,731			(2,859,629)	2,973,731				(2,859,629)
Non-controlling shareholders			-			-	779				1,003
NET INCOME (LOSS) PER SHARE FOR THE YEAR -R$
Basic	31			2.1582			(2.0843)	2.1582				(2.0843)
Diluted	31			2.1482			(2.0843)	2.1482				(2.0843)

*The accompanying notes are an integral part of the Financial Statements.

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NATURA &CO HOLDING S.A.

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In thousands of Brazilian reais - R$)

				Parent			Consolidated
		Note
				2023			2022		2023				2022
PROFIT (LOSS) FOR THE PERIOD		2,973,731			(2,859,629)	2,974,510				(2,858,626)
Other comprehensive income (loss) to be reclassified to income statement in subsequent periods:
Conversion of financial statements of controlled companies abroad	15	(2,736,293)			(2,958,434)	(2,738,295)				(2,962,142)
Exchange rate effect on the conversion from hyperinflationary economy	15	227,027			24,956	227,027				24,956
Earnings (losses) from cash flow hedge operations	5.3	-			89	746,648				(790,479)
Tax effects on earnings (losses) from cash flow hedge operations	11	-			-	(251,950)				270,035
Equity in earnings (losses) from cash flow hedge operation	5.3	746,648			(790,568)	-				-
Equity in tax effects on earnings (losses) from cash flow hedge operations	11	(251,950)			270,035	-				-
Other comprehensive income (loss) not reclassified for the income (loss) of the periods in subsequent periods:
Actuarial earnings (losses)		-			-	(23,204)				21,764
Tax effects on earnings (losses) from actuarial		-			-	9,583				(61,965)
Equity on actuarial earnings (losses)		(23,204)			21,764	-				-
Equity on tax effects on actuarial earnings (losses)		9,583			(61,965)	-				-
Comprehensive income (loss) for the periods, net of tax effects		945,542			(6,353,752)	944,319				(6,356,457)
ATTRIBUTABLE TO
The Company´s shareholders		945,542			(6,353,752)	945,542				(6,353,752)
Noncontrolling shareholders		-			-	(1,223)				(2,705)
-			945,542			(6,353,752)	944,319				(6,356,457)
*The accompanying notes are an integral part of the Financial Statements.

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