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Revlon Sales Up 3.2% for 2012

Posted: February 5, 2013

Revlon, Inc. announced results for the year and the fourth quarter ended December 31, 2012. For 2012, as compared to 2011, net sales came in at $1,426.1 million versus $1,381.4 million, an increase of 3.2%. Excluding unfavorable foreign currency fluctuations of $21.2 million, 2012 net sales increased by 4.8%. Also, operating income in 2012 was $188.7 million, which included $24.1 million of restructuring and related charges associated with the actions announced in September 2012, and a net charge of $8.9 million related to estimated costs of settling previously disclosed shareholder litigation related to the company’s 2009 exchange offer, compared to $203.3 million.

Commenting on the announcement, Revlon president and CEO Alan T. Ennis said, “2012 was a very positive year. We delivered top line growth of almost 5%, reflecting the effectiveness of our strategy. From a marketplace perspective, we introduced new, innovative products, which, together with effective brand communication and strong in-store execution, drove positive performance of our Revlon branded products in many of our key regions. Our financial performance was strong as we again maintained highly competitive margins and delivered $84 million of free cash flow. We are also very pleased with the integration and performance during the year of our SinfulColors and Pure Ice acquisitions.”

Ennis concluded, “We are pleased with our performance in 2012 and, as we enter 2013, we continue to focus on driving profitable growth.”

Effective for the period beginning October 1, 2012, the company has consolidated Latin America and Canada into a single region. As a result, prior period amounts have been reclassified to conform to this presentation. See quarterly historical data at the end of the release.

In the U.S., net sales in 2012 were $799.8 million, an increase of $42.4 million, or 5.6%, compared to $757.4 million in 2011. The increase was primarily driven by higher net sales of Revlon color cosmetics and SinfulColors color cosmetics, as well as the inclusion of the net sales of Pure Ice, partially offset by lower net sales of Almay color cosmetics.

In Asia Pacific, net sales in 2012 were $238.9 million, an increase of $5.5 million, or 2.4%, compared to $233.4 million last year. Excluding the favorable impact of foreign currency fluctuations, net sales increased $4.4 million, or 1.9%, primarily due to higher net sales of Revlon color cosmetics in Japan and certain distributor territories, partially offset by lower net sales of Revlon color cosmetics in China.

In Europe, Middle East and Africa, net sales in 2012 were $184.4 million, a decrease of $24.3 million, or 11.6%, compared to $208.7 million last year. Excluding the unfavorable impact of foreign currency fluctuations, net sales decreased $8.9 million, or 4.3%. Net sales were adversely impacted by the previously announced higher sales returns accrual of $1.6 million associated with restructuring and related activities in France and Italy; lower net sales of fragrances in the U.K. and certain distributor territories; and lower net sales of other beauty care products throughout the region. These decreases were partially offset by higher net sales of Mitchum anti-perspirant deodorant in the U.K. and Revlon ColorSilk hair color in South Africa, Italy and certain distributor territories.

In Latin America and Canada, net sales in 2012 were $203 million, an increase of $21.1 million, or 11.6%, compared to $181.9 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations, net sales increased $28.0 million, or 15.4%. The increase was primarily due to higher net sales of Revlon and Almay color cosmetics and Revlon ColorSilk hair color throughout the region. Net sales in Venezuela and Argentina benefited from higher selling prices reflecting market conditions and inflation, which accounted for approximately one-third of the $28.0 million net sales increase in the region. Venezuela’s increase in net sales was also impacted by the absence of sales for a portion of 2011 as a result of the June 5, 2011 fire that destroyed the company’s facility there.

Revlon’s net sales in the fourth quarter of 2012 were $391.3 million, an increase of $31.5 million, or 8.8%, compared to $359.8 million in the fourth quarter of 2011. Excluding unfavorable foreign currency fluctuations of $1.8 million, net sales increased by $33.3 million, or 9.3%. The increase was primarily driven by higher net sales of Revlon color cosmetics, Revlon ColorSilk hair color and SinfulColors color cosmetics, as well as the inclusion of the net sales of Pure Ice. These increases were partially offset by lower net sales of Almay color cosmetics.

In the U.S., net sales in the fourth quarter of 2012 were $219.2 million, an increase of $27.6 million, or 14.4%, compared to$191.6 million in the same period last year. The increase was primarily driven by higher net sales of Revlon color cosmetics, Revlon ColorSilk hair color and SinfulColors color cosmetics and the inclusion of the net sales of Pure Ice, partially offset by lower net sales of Almay color cosmetics.

In Asia Pacific, net sales in the fourth quarter of 2012 were $66.1 million, an increase of $2.3 million, or 3.6%, compared to $63.8 million in the same period last year. Excluding the favorable impact of foreign currency fluctuations, net sales increased $1.7 million, or 2.7%, primarily due to higher net sales of Revlon color cosmetics in Japan and Australia, partially offset by lower net sales of Revlon color cosmetics in China.

In Europe, Middle East and Africa, net sales in the fourth quarter of 2012 were $50.4 million, a decrease of $5.5 million, or 9.8%, compared to $55.9 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations, net sales decreased $3.5 million, or 6.3%. Lower net sales of fragrances in the U.K., Italy and certain distributor territories and other beauty care products in France and South Africa were partially offset by higher net sales of Revlon color cosmetics in the U.K. and South Africa.

In Latin America and Canada, net sales in the fourth quarter of 2012 were $55.6 million, an increase of $7.1 million, or 14.6%, compared to $48.5 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations, net sales increased $7.5 million, or 15.5%. The increase was primarily due to higher net sales of Revlon color cosmetics and other beauty care products in Venezuela and Argentina and higher net sales of Revlon ColorSilk hair color throughout the region. Venezuela and Argentina also benefited from higher selling prices reflecting market conditions and inflation, which accounted for approximately one-third of the $7.5 million net sales increase in the region.

Learn more details about these financial results from 2012 from Revlon here.