Revlon has filed an investor presentation with the SEC that outlines the new, bigger $3 billion global beauty powerhouse it will become as a result of its acquisition of Elizabeth Arden.
The presentation lays out that the combined companies will yield a portfolio with 31 percent of sales from color, 28 percent from fragrance, 18 percent from hair care, 10 percent from beauty care (deodorant and tools), 7 percent from skin care and 6 percent from nail. About 59 percent of sales will come from North America, 21 percent from Europe, the Middle East and Africa, 16 percent from Asia Pacific and 3 percent from Latin America.
The newly formed company will also yield a more diverse channel of distribution with prestige, travel retail, spa and department stores rounding out Revlon’s existing mass channel base.
The presentation showed that the acquisition will help Revlon gain a foothold in two key categories, fragrance and skin care, categories that are expected to grow 8.6 percent and 6.8 percent, respectively, from 2015 to 2020 according to data from Euromonitor. Color cosmetics is slated to grow 7.8 percent during the five years, with hair care yielding 6.3 percent growth.
Revlon’s market share success with its Love is On campaign is also outlined, showing that eye makeup share grew to 4.1 percent for the period ending May 21 2016 versus 2.5 percent a year ago. Mascara share increased to 9.2 percent versus 5.5 percent during the same time period, while Revlon’s overall color market share grew to 10.8 percent in May 2016 from 10 percent in 2014.
The firm expects to achieve cost reductions of $9 million in 2016 and annualized cost reductions of $10 million to $15 million thereafter. Sales have seen growth at a compounded annual rate of 9.2 percent from 2011 to 2015.
The presentation also included Arden’s strides, including how year to date the brand is up 4 percent, with 5 percent gains in North America for the quarter. Increases in the John Varvatos (+30 percent), Juicy Couture (+5 percent) scents helped growth.