Global cosmetics firm Revlon announced its fourth quarter and year results, reporting an overall increase in net sales despite problematic currency fluctuations in Latin America.
The color cosmetics company reported net sales of $369.2m for the fourth quarter, 7.1 percent up on last year’s $344.6m, primarily driven by higher net sales of Revlon and Almay color cosmetics.
Revlon CEO, Alan T. Ennis said, “In 2010, we continued to execute our business strategy. From a financial perspective, we increased profitability, achieved competitive operating income and EBITDA margins, delivered our third consecutive year of positive free cash flow and improved our capital structure by refinancing and reducing our debt.”
The region which showed the most growth for Revlon was Asia Pacific, increasing its net sales by 20.9 percent to $60.8m versus the previous year, most notably finding success in Australia.
Currency fluctuations in Venezuela
In Latin America, net sales in the fourth quarter of 2010 showed a decrease of 10 percent at $29.9m, compared to $33.2m in the same period last year. However, excluding the unfavorable impact of foreign currency fluctuations (including January 2010 devaluation of Venezuela’s local currency), net sales in Latin America increased 24.1 percent.
Net sales increased 7.5 percent to $201m in the US driven by higher net sales of Revlon and Almay color cosmetics, but partially offset by lower net sales of Revlon ColorSilk hair color and Mitchum anti-perspirant deodorant.
According to Revlon, the increase in net sales of color cosmetics resulted primarily from lower returns, as well as lower promotional allowances as it continued to optimize its brand support mix.
EMEA net sales for the fourth quarter ($56.7m) and Canada ($20.8m) both showed increases of 2.5 percent and 10.6 percent respectively.
Operating income in the fourth quarter of 2010 was $67.8m, compared to $62.3m in the same period last year. Adjusted EBITDA in the fourth quarter was $83.3m compared to $77.9m.
Net sales for the year were $1,321.4m, an increase of 2 percent, and the company explained that higher net sales of color cosmetics and ColorSilk hair color were partially offset by lower net sales of Almay color cosmetics and Mitchum anti-perspirant deodorant.
The year results in Latin America suffered from the devaluation of the Venezuelan currency, with net sales of $107.9m, a decrease of 0.9 percent. Excluding the foreign currency fluctuations net sales in Latin America increased $32.1 million (29.5 percent).
US net sales were $729.1m, decreasing 2.5 percent, whilst net sales in APAC ($209.9m), EMEA ($200.4m) and Canada ($74.1m) all posted an increase of 11 percent, 9 percent and 11.9 percent respectively.
Operating income for the year was $199.8m compared to $170.8 million in 2009, whilst adjusted EBITDA was $260.4 million in 2010 compared to $236.5 million the previous year.