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Moacir Salzstein Director of Corporate Governance

NATURA CORPORATE GOVERNANCE. Brazilian-American Chamber of Commerce November 2, 2010. Moacir Salzstein Director of Corporate Governance. OUR COMPANY. REASON FOR BEING. Our reason for being is to create and sell products and services that promote well-being well.

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Moacir Salzstein Director of Corporate Governance

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  1. NATURA CORPORATE GOVERNANCE Brazilian-American Chamber of Commerce November 2, 2010 Moacir Salzstein Director of Corporate Governance

  2. OUR COMPANY

  3. REASON FOR BEING Our reason for being is to createand sell products and services that promote well-being well. Well-beingis the harmonious, pleasant relationship of a person with oneself, with one´s body. Being wellis our empathetic, successful, and gratifying relationship of a person with others, with nature, and with the whole.

  4. OUR BELIEFS Life is a chain of relationships. Nothing in the universe exists alone. Everything is interdependent. The continuous search for improvement promotes the development of individuals, organizations and society. Commitment to the truth is the route to perfecting the quality of relationships. The greater the diversity, the greater the wealth and vitality of the whole system.

  5. OUR BELIEFS The search for beauty, which is the genuine aspiration of every human being, must be free of preconceived ideas and manipulation. The company, a living organism, is a dynamic set of relationships. Its value and longevity are connected to its ability to contribute to the evolution of society and its sustainable development.

  6. VISION Because of its corporate behavior, the quality of the relationships it establishes and the quality of its products and services, Natura will be an international brand, identified with the community of people who are committed to the construction of a better world, based on a better relationship with themselves, with others, with nature of which they are part, with the whole.

  7. OUR COMPANY VALUE PROPOSAL ESSENCE PRODUCTS AND CONCEPTS CHANNEL CORPORATE BEHAVIOR • Sustainable development: • Consistent economic results , • Greater generation and distribution of wealth, • Care with the environment. • Relationship quality. First and foremost,our Consultantsare individuals. Our Consultantsare our first consumers. Sales through relationships. Disseminationof well being well. Products that improve a better relationship with: your body, with yourself, with others, with the whole. Science and popular tradition. Low environmental impact. Safety and quality. Pleasure in use.

  8. OUR COMPANY OUR NUMBERS As on Dec 31, 2009 • Net sales: R$ 4.2 billion; • Ebitda: R$ 1.0 billion; • Products for different segments: fragrances, make up, creams, soaps, deodorants, hair products • Over 1 million consultants (sales representatives); • 6,260 employees; • Headquartered in Cajamar, São Paulo; • Listed on the Sao Paulo Stock Exchange’s • New Market; • Investments in innovation: R$ 111.8 million (2.6% of net revenue); • Investments in corporate responsibility: • R$ 59.9 million; • Committed to reducing GHG emissions by 33% between 2007 and 2011. In three years, we eliminated 16.1%.

  9. OUR COMPANY OUR UNITS France Mexico Guatemala (distributor) Honduras (distributor) El Salvador (distributor) Colombia Peru Brazil Bolivia (distributor) Chile Argentina

  10. OUR COMPANY AWARDS AND RECOGNITIONS 2009 • Biggest and Best, Exame Magazine: Best company in the Consumer Goods category and the company of the year; • Best of Dinheiro, IstoÉ Dinheiro magazine: Best company in the Pharmaceutical, Hygiene and Cleaning industry; • Capital Aberto magazine: Natura ranked 1st in the “Best Companies for Shareholders” award in the category of companies with a market value between R$ 5 and R$ 15 billion; • Valor Econômico Newspaper: Best Company in the Hygiene and Cosmetics Industry; • Carta Capital magazine: Most Admired Company in Brazil; • IBGC Corporate Governance Award: we won in the “Evolution in Corporate Governance” category; • Finep Award: We won in the Large Company category; • Exame Sustainability Guide: among the 20 most distinguished companies in Brazil; • Época Climate Change: Natura distinguished itself as one of the Leading Companies in Climate Policies.

  11. EVOLUTION – GROWTH HIGHLIGHTS TIMELINE 2,492 657 170 5 80s 70s 90s 00s 1969: a small lab and two passions. 1974: choice for direct sales. Sound growth based on regional expansion and products portfolio. Commitment to social and environmental accountability. Search for management excellence. International expansion. Sustainable development: Ekos Line (2000). Opening of “Espaço Natura,” in Cajamar (2001). The company went public, having its shares traded on Bovespa (2004). Net sales US$ M X

  12. EVOLUTION – GROWTH HIGHLIGHTS TIMELINE Sales of refill packs for cosmetic products. “Sève” line. Make-up and perfumes market. Direct Sales and Consultants. 1969 1974 1979 1981 1982 1983 Natura’s foundation Creation of Natura System. “Sr. N.” line Beginning of operations in Chile.

  13. EVOLUTION – GROWTH HIGHLIGHTS TIMELINE Beginning of operations in Argentina and Peru. “Mamãe e Bebê” line. Reason for Being and Beliefs. “Chronos” line. 1984 1986 1989 1990 1992 1994 “Erva Doce” line. “Truly Beautiful Woman” concept. Merger of companies that integrated the Natura System.

  14. EVOLUTION – GROWTH HIGHLIGHTS TIMELINE Casa Natura, in Paris (France), and Mexico City. Chronos Spilol. NBR ISO 9001 certification. “Espaço Natura,” in Cajamar. Annual Report following the GRI model. Board of Directors. 1995 1998 2000 2001 2004 2005 “Crer para Ver” program. “Natura Ekos” line. Initial Public Offering (Novo Mercado of Bovespa). NBR ISO 14001 certification.

  15. EVOLUTION – GROWTH HIGHLIGHTS TIMELINE 1 million Consultants Crer para Ver in all Latin American operations. Natura Management System: process, culture and development of leaderships. Launch of “Amor America.” Beginning of operations in Colombia and Venezuela. Chronos Passiflora(Natura Campus). 2006 2007 2008 2009 End of tests in animals. Direct sales and technology center in Paris. Casa Natura, inCampinas (State of São Paulo). Soap factory in Benevides (State of Pará). Profit sharing agreement. Launch of Naturé. Appreciation of 18% in shares. Beginning of the organizational restructuring process.

  16. CORPORATE GOVERNANCE

  17. CORPORATE GOVERNANCE PRACTICES EVOLUTION “Best Annual Report among Closed Corporations” award granted by Abrasca (Brazilian Association of Publicly-Held Companies). Beliefs, Vision and Reason for Being. Creation of the Audit and Risk Management Committee de Riscos 1990 2001 1989 1998 2000 2003 External audit. Creation of the Board of Directors. Management reports. Human Resouces Committee (currently named “People’s Committee”).

  18. CORPORATE GOVERNANCE PRACTICES EVOLUTION We reached a new level and strengthened our four support committees: Strategic; Corporate Governance; People and Organizational Development ; and Audit, Risk Management and Finance IBGC Award Ibovespa. External Evaluation conducted by Egon Zehnder Listed on Novo Mercado. 2004 2009 2005/06 2006 2007 Annual self-evaluation process. IBrX50, MSCI, IGC, ISE and Itag index.

  19. CORPORATE GOVERNANCE BOARD OF DIRECTORS OBJECTIVES AND ROLE • Constantly improve the qualityof Natura corporate governance. • Create a managed decision-making space for the founders to exercise their contributions. • To challenge the assumptions of the management. • To foster the dissemination of Natura’s success elements, which are mostly concentrated on the company’s Reason for Being, Vision and Beliefs.

  20. CORPORATE GOVERNANCE BOARD OF DIRECTORS OBJECTIVES AND ROLES • To monitor the management of the company’s Brand, so as to preserve and improve its identity and perception among groups with relationships with Natura. • To guarantee the strong commitment to the obligations assumed in its Mission with all stakeholders.

  21. CORPORATE GOVERNANCE BOARD OF DIRECTORS • Board Composition • 7 members, 4 of which are external members and 3 independent members. • Board Committees • - Corporate Governance • Strategic • People and Organizational Development • Audit, Risk Management and Finance

  22. CORPORATE GOVERNANCE CORPORATE GOVERNANCE COMMITTEE Quarterly meetings/half day meetings Search for best practices in corporate governance Development of the Corporate Governance System, and follow its implementation Evaluation of Natura’s Corporate Governance System Oversight of Natura’s Corporate Governance System Members: Pedro Luiz Passos (chairman), Luiz Seabra, José Guimarães Monforte and Julio Moura

  23. CORPORATE GOVERNANCE STRATEGIC COMMITTEE Monthly meetings/8 hours meetings Assessment of strategic issues Follow up of the strategic projects in progress Discussion on Natura’s long-term strategies Members: Julio Moura (chairman), Pedro Luiz Passos,, Edson Musa and Alessandro Carlucci.

  24. CORPORATE GOVERNANCE PEOPLE AND ORGANIZATIONAL DEVELOPMENT COMMITTEE Monthly meetings/half day meetings Evaluation and oversight of main Human Resources subjects: compensation, conduction of leadership projects, succession, qualification Creation and follow up of Human Resources Policies Members: Luiz Ernesto Gemignani (chairman), Pedro Luiz Passos, Edson Musa, Fátima Raimondi (external member), Alessandro Carlucci and Marcelo Cardoso.

  25. CORPORATE GOVERNANCE AUDIT, RISK MANAGEMENT AND FINANCE COMMITTEE Monthly meetings/8 hours meetings Support the Board of Directors in the analysis of financial and risk issues, as well as its relationship with external audits Assessment of quarterly and annual financial results Members: José Guimarães Monforte (chaiman), Roberto Pedote, Moacir Salzstein and two external members, Gilberto Mifano and Taiki Hirashima

  26. CORPORATE GOVERNANCE GOVERNANCE EVOLUTION INITIATIVES: AGOE CASE • Meeting held in Cajamar in order to promote a closer contact with investors, including individual shareholders • Unheard of initiative in Brazil • Expansion of opportunities for investors to have access and increase their participation: • Improve their knowledge about the company; • Participate in decisions that have impact on the company’s future; • Get to know and experience our beliefs and our way to make business. • Possibility for investors to vote via web. • Increase the value of the stock market for minority Brazilian investors. • Participation of 206 investors.

  27. CONCLUSIONS

  28. ONGOING EVOLUTION IN OUR CORPORATE GOVERNANCE We believe thatgood governance, transparencyand quality of information improve economic, social and environmental results.

  29. SHAREHOLDERS

  30. CORPORATE GOVERNANCE APPRECIATION natura (Natu3) vs. Ibovespa *Valor acumulado até 12/10/2010

  31. CORPORATE GOVERNANCE TOTAL VOLUME OF SHARES TRADED (R$ million) 6,894 6,392 4,506 2007 2008 2009

  32. CORPORATE GOVERNANCE PAYMENT OF DIVIDENDS AND INTEREST ON CAPITAL (R$ million) 551.9 425.9 391.1 2007 2008 2009

  33. 4.02 3.82 3.63 20072 20082 2009 RELATIVE CO2 EMISSIONS (kg of CO2e/kg of billed product)¹² 2. The model to calculate the inventory was improved in 2009. The 2008 base was recalculated, as 2007 data is only an estimate that is currently being reviewed.

  34. INVESTMENT IN CORPORATE RESPONSIBILITY(R$ thousands) 59,856.0 54,791.7 53,007.2 2007 2008 2009

  35. MAIN CHALLENGES AND REFLECTIONS FOR 2011 Evolution of the board in the light of a long term strategyAdequacy of board members

  36. Thank you! Moacir Salzstein (55) (11) 3074-1527 moacirsalzstein@natura.net

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