Revlon reports sliding sales on Venezuela market exit
The company reported that net sales fell from $497.9m to $482.4m during the second quarter, a fall of 3.4%. However, the results showed that after adjustments that included the loss of Venezuelan revenues, the figure was up 1.4%.
The Venezuelan economy has been highly volatile for some years, with international companies being hard hit by a series of currency devaluations that have impacted businesses primarily trading in other currencies. The latest currency devaluation came in February of this year and was estimated to have wiped around $7bn from the top ten US companies doing business there.
Total company EBITDA during the quarter was $85.9m, a small dip compared to EBITA of $88.6m, but on an adjusted basis the EBITDA was $90.1m, compared to $85.7m in the corresponding period for 2014.
Profitability hit by acquisitions and Venezuela
The company has exited its business operations and moved to a distributor model in the country, while it also tied up the acquisition of CBBeauty Group during the quarter, which also impacted earnings.
“The Company’s exit of its business operations in Venezuela impacted the comparability of period-over-period results, as Venezuela had no net sales in the second quarter of 2015 compared to $8.3 million in the second quarter of 2014,” said Revlon president and CEO Lorenzo Delpani.
“Excluding Venezuela, total Company Adjusted net sales were $482.4 million in the second quarter of 2015, compared to $489.6 million in the second quarter of 2014, a decrease of 1.5%.”
Performance by geography and business segment
The company’s consumer segment reported second quarter sales of $354.7m, compared to sales of $367.3m, a figure that was almost wholly down to the exit in the Venezuela market.
In the professional segment sales were down to $123.4m, compared to $130.6m in the corresponding period last year, while on an currency adjusted basis the figure was up 4.1%.
On an international basis, sales were down from $242.7m to $215.4m, a figure that was significantly impacted by foreign currency exchange rates and the Venezuela market. This was underlined by the fact that on an adjusted basis international sales were up 1.2%.
