Revlon Reports Year 2010, Q4 Financials

Revlon Reports Year 2010, Q4 Financials

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Revlon, Inc. announced results for the year and the fourth quarter ended December 31, 2010. The results included net sales of $1,321.4 million compared to $1,295.9 million in 2009, an increase of 2.0%, and operating income was $199.8 million compared to $170.8 million the previous year.

Commenting on the announcement, Revlon president and CEO Alan T. Ennis said, "In 2010, we continued to execute our business strategy. We grew the top line, improved our financial performance and strengthened our organizational capability with key management appointments in R&D, marketing and general management. 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."

Ennis continued, "From a marketplace perspective, we introduced a number of successful, innovative, high quality, consumer preferred products across our entire portfolio and significantly increased investment behind our brands. We delivered positive performance in many of our key markets and remain focused on realizing our strategic objective of profitably growing our business."

Net sales in 2010 were $1,321.4 million, an increase of $25.5 million, or 2.0%, compared to net sales of $1,295.9 million in 2009. Excluding unfavorable foreign currency fluctuations of $3.8 million, net sales increased by 2.3%. Higher net sales of Revlon color cosmetics and Revlon ColorSilk hair color were partially offset by lower net sales of Almay color cosmetics and Mitchum antiperspirant deodorant.

As previously disclosed, effective for periods beginning January 1, 2010, the company reports Canada separately and reports South Africa as part of the Europe, Middle East and Africa region. As a result, prior year quarterly and year to date amounts have been reclassified to conform to this presentation.

In the United States, net sales in 2010 were $729.1 million, a decrease of $18.8 million or 2.5%, compared to $747.9 million in 2009, driven primarily by lower net sales of Almay color cosmetics, Revlon ColorSilk hair color and Mitchum antiperspirant deodorant, partially offset by higher net sales of Revlon color cosmetics. Net sales of color cosmetics benefitted from lower promotional allowances as the company continued to optimize its brand support mix, and also benefitted from lower returns.

In Asia Pacific, net sales in 2010 were $209.9 million, an increase of $20.8 million or 11.0%, compared to $189.1 million in the same period last year. Excluding the favorable impact of foreign currency fluctuations, net sales increased $6.0 million, or 3.2%. Higher net sales of Revlon color cosmetics, Revlon ColorSilk hair color and other beauty care products in the region were partially offset by lower net sales of Revlon color cosmetics in Australia and Japan.

In Europe, Middle East and Africa, net sales in 2010 were $200.4 million, an increase of $16.6 million or 9.0%, compared to $183.8 million in the same period last year. Excluding the favorable impact of foreign currency fluctuations, net sales increased $8.6 million, or 4.7%. The increase was primarily due to higher net sales of fragrances throughout the region as well as higher net sales of color cosmetics and other beauty care products in South Africa.

In Latin America, net sales in 2010 were $107.9 million, a decrease of $1.0 million or 0.9%, compared to $108.9 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations (which includes the unfavorable impact of the January 2010 devaluation of Venezuela's local currency relative to the U.S. dollar), net sales in Latin America increased $32.1 million, or 29.5%. The increase was primarily due to higher net sales of Revlon ColorSilk hair color, Revlon color cosmetics and other beauty care products in both Venezuela and certain distributor markets. Higher selling prices in Venezuela, reflecting market conditions and inflation, accounted for approximately half of the $32.1 million net sales increase in the region.

In Canada, net sales in 2010 were $74.1 million, an increase of $7.9 million or 11.9%, compared to $66.2 million in the same period last year. Excluding the favorable impact of foreign currency fluctuations, net sales in Canada increased $1.4 million, or 2.1%. The increase was primarily driven by higher net sales of Revlon color cosmetics which were partially offset by lower net sales of Revlon beauty tools.

Net sales in the fourth quarter of 2010 were $369.2 million, compared to $344.6 million in the fourth quarter of 2009, an increase of $24.6 million, or 7.1%. Excluding unfavorable foreign currency fluctuations of $6.5 million, net sales increased by 9.0%, driven primarily by higher net sales of Revlon and Almay color cosmetics.

In the United States, net sales in the fourth quarter of 2010 were $201.0 million, an increase of $14.0 million, or 7.5%, compared to $187.0 million in the same period last year, driven primarily by higher net sales of Revlon and Almay color cosmetics, partially offset by lower net sales of Revlon ColorSilk hair color and Mitchum anti-perspirant deodorant. The increase in net sales of color cosmetics resulted primarily from lower returns, as well as lower promotional allowances as the Company continued to optimize its brand support mix.

In Asia Pacific, net sales in the fourth quarter of 2010 were $60.8 million, an increase of $10.5 million or 20.9%, compared to $50.3 million in the same period last year. Excluding the favorable impact of foreign currency fluctuations, net sales increased $7.5 million, or 14.9%, driven by higher net sales of Revlon color cosmetics and other beauty care products throughout the region, most notably in Australia.

In Europe, Middle East and Africa, net sales in the fourth quarter of 2010 were $56.7 million, an increase of $1.4 million or 2.5%, compared to $55.3 million in the same period last year. Excluding the favorable impact of foreign currency fluctuations, net sales increased $0.5 million, or 0.9%.

In Latin America, net sales in the fourth quarter of 2010 were $29.9 million, a decrease of $3.3 million or 10.0%, compared to $33.2 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations (which includes the unfavorable impact of the January 2010 devaluation of Venezuela's local currency relative to the U.S. dollar), net sales in Latin America increased $8.0 million, or 24.1%. The increase was primarily due to higher net sales of Revlon color cosmetics and Revlon ColorSilk hair color. Higher selling prices in Venezuela, reflecting market conditions and inflation, accounted for approximately two-thirds of the $8.0 million net sales increase in the region.

In Canada, net sales in the fourth quarter of 2010 were $20.8 million, an increase of $2.0 million or 10.6%, compared to $18.8 million in the same period last year. Excluding the favorable impact of foreign currency fluctuations, net sales increased $1.2 million, or 6.4%, primarily due to higher net sales of Revlon color cosmetics.

More information on this financial report is available here.