REV - Earnings call transcript Q1 2021

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Operator

Good morning. My name is Keith, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Revlon First Quarter 2021 Earnings Conference Call. All participant lines have been placed in listen-only mode to prevent any background noise. After the speakers remarks there will be a question and answer session. you. Thank Instruction] [Operator turn over now Vice Jeff President, Treasury. the will to call Kennel, I ahead. go Please

Jeff Kennel

for operator. you, joining the financial XX, Earlier for everyone, the today, ended results XXXX. its released Thank company morning, call. Good and quarter March the thank you

have copy the If a not earnings company's the received obtained be can on already website release, a you of copy at revloninc.com.

that discussion federal a today in nonoperating have Debbie. turn throughout practices, measures call end that, release. Please Victoria be include with The the morning call are based results expectations that Form and Reform the publicly update statements the to certain this securities Remarks materially directly company's Officer; of SEC GAAP also the Private not undertakes and Information the President or rounded. discussion are factors them Debbie also Chief defined company's company's Officer. obligations are Consistent not Securities XXXX. the to certain Financial past attributable affect forward-looking today recorded. might XX-Q. certain cause financial in our And no will this including are over obligation Dolan, forth laws. and to reconciled amounts Perelman, from call on Chief QX its that for The at in These the and on non-GAAP to filings, and copied The forward-looking we'll pursuant excludes On should differ non-GAAP except include operating provided that tables the are underlying the under Litigation today our note call to reporting of performance. company items U.S. with XXXX actual Executive statements could are and the any results. results such is current Act of adjusted earnings release provided statements, been the forward-looking set

Debbie Perelman

I everyone, hope your and safe joining thank are that staying healthy. Good you us. and in families for Jeff. you, morning, Thank everyone

of continues around our to focus safety consumers families health their and world. employees, Our and be our on the the

XXXX pandemic. improvement in quarter results COVID-XX the many recover the first Our a the continued world as begin parts from business reflect to of sequential

a health business, COVID-XX positive recovery to continue signs quarter. impact and While emerge, the of global and lives threat significant our latter the continues the to remains especially in our half of

in channels have and begun recover, business Our versus double-digit reporting four experienced year prior the professional of two and segments to quarter. prestige our growth

business stronger through a particularly EBITDA team the where in dollars a double-digit Our proud the margin e-commerce in ensure prior show to managing over to our America and adjusted and North growth, I quarter, pivot coming am growth and the continues the future grew in to EMEA, quarter. company. these and business for in company's year of experienced to together find XX months resilience solutions creative as last we

Let and line me first highlight our topline bottom results. overall

impact, this decline reported, impacted removing prior quarter net net or or in million FX million by favorability As versus $XX were of X% declined or million $X sales $XXX business quarter. our the sales $XXX year X% million. a our of approximately first quarter. When

by $XX Our as well of million Restructuring costs quarter impacts Program. manage adjusted our to quarter $XX in $XX to XXXX first million million efforts the XXXX, versus the Revlon internal EBITDA XXXX of was first continued growing as in driven due

category. approximately XXXX the Revlon the higher pandemic, at first largest was to $XX region, operating most operating been $X of adjusted in our quarter mass million million, continued than color past in significant the income from best quarter an was estimated first five Additionally, quarter where net the million first segment, slow XXXX. has in our recover with cosmetics COVID-XX the our sales, to $XX U.S. in income This years our impact impact channel, of specifically quarter. the the

color share our the see in improvement consumption, cosmetics the did gaining quarter. we in quarter two both progressed, As Revlon weeks the of last

to in growth optimistic the all and growth XX% map reopen regions around skin business, very very growing of America, in addition COVID-XX Elizabeth in launch in the loosen, our our world in markets rebound by world care As tea I grew saw cosmetics led XXXX. our with care in of due ex are skin Arden our Arden our part continued In we and restrictions the continued franchises. North the and Arden FX, We was and that quarter business. Elizabeth Elizabeth especially first pleased the Fragrances around segment in This by segment continue strength color Ceramide white Asia, to robust newest hyaluronic around performed well, driven our franchise. to capsule. green acid fragrances am

ex our XX% versus grew to Turning segment. segment fragrance quarter. FX This prior year

well Our by of as new Splash. and Juicy launches core as Juicy Bubbly growth Le Juicy Viva couture La brand-led the La portfolio Vi our driven Viva

offset business. part strong We Varvatos Curve recovery the U.S. of market, Fragrances growth Revlon in slow Arden which to brands. in Revlon growth the segments also saw our and our and The by cosmetics was Elizabeth segments, portfolio and our our John mass color impacted due cosmetics color in

I’ll XXXX at strong e-commerce. also now March Our the pandemic. following declined to versus beginning Mitchum brand of consumers the sales in as turning loaded prior pantry year,

and growth our e-commerce a Asia shifted thus important from portion Asia in represent Our is a the large from is X% It e-commerce approximately event year first as XX% of prior our net key the of to note quarter quarter. into such quarter our year-over-year region particularly XXXX, business. total sales grew impacting versus e-commerce that XXXX net second sales

our year regions elizabetharden.com and double-digit e-commerce growth grew over EMEA business, did Additionally, as North had both America prior which XX% quarter.

across growth focus peer We our on this including and own continue to partners. platforms, players channel driving retailer.com in

asset-backed revolving call amendment This as agent another this is credit XXXX administrative the our capital made morning: towards agreement company Financial strengthening growth. to Victoria, structure collateral Before and positive First, exciting support our with amendment hand the yet an MidCap I closed agent. over to step two future our we to a announcements

Global This specifically our point Growth our and or key their investment growth, focus Accelerator, of program in of sales a mid-single-digit program margin announced Revlon Second, the focused U.S. operating margin. drive increase Arden trajectory and globally. reinvesting iconic long-term prestige, our mass Revlon's compound in EMEA and as value. RGGA to growth our will on program. One, is brands, efficiencies, growth RGGA consists in driving well brands on average marks and improvement turning organic through this as revenue two, growth as and in company Revlon will which deliver which Elizabeth channel in an and China rate key annual e-commerce as well XXXX; three strategic initiatives: The in approximate fuel markets

the upskill expect forward financing our element This deliver million and reductions details I our future internal the cost in call and first as of approximately Victoria, timeless to capabilities of a Growth through Accelerator to quarter foundation and to incremental through walk legacy program recent XXXX now throughout share industry. build iconic XXXX. We program, will Global leading who over results. Revlon's brands our details building, well the $XX as $XX to to will capability building Revlon you of the organization. on more once the the turn enhance of again beauty and will And I critical annualized look employees million three, for the

Victoria Dolan

morning and Debbie, to you, call. on Thank everyone the good

Let first XXXX me quarter results. first detail our

X% million First a as-reported X% quarter constant net an as prior $XXX a on $XXX decline on were compared approximately million and year basis reported sales to basis. during period, currency the of

the with As impacts reported net pandemic. sales $XX million approximately includes associated COVID-XX estimated of negative

$XX in income $X and quarter company restructuring points. operating First the cost primarily in lower the quarter operating by charges. XX loss loss million million impairment Despite expenses, by operating was headwinds, period. $XXX was million loss as year program lower period. lower general of increased prior associated basis reductions from improve charges, million gross Adjusted a prior the during million $XX part driven the XXXX $XX by in year million loss million compared $XX with SG&A, continued to the operating driven in to $XX selling, of was $XXX in million COVID-XX in margin an its and lower The able first adjusted administrative restructuring company's by reported to

income in the income mentioned, pleased our first Debbie are we operating best five that operating the quarter in years. XXXX adjusted As past quarter was first the

prior reported reported, million adjusted net million was an was net operating prior year higher As net as $XX the offset loss versus loss by million. $XX of loss $XX loss loss net was a million million during $XX in adjusted compared to by lower of expense $XXX The interest year period. in the driven improvements primarily The net loss period.

adjusted in higher EBITDA million approximately the the basis represents year in EBITDA the XXX quarter first improvement year EBITDA lower loss. point adjusted prior driven million adjusted $XX the margin period, The was period. $XX versus to adjusted by over operating primarily which an prior was Finally,

in Next, and by first sales well segment of the growth by I cosmetics million the was currency segment's reported by were Revlon by care compared were Revlon Elizabeth An hair lower skin Professional Revlon constant Green the and segment's by as increased fragrance increase Revlon This million, basis. effects in America of the products the XX% of net profit Branded representing million driven level offset $XXX decrease collections branded ongoing period. North America quarter the higher representing $XX net higher color. was decrease increase segment net prior a period, net of well brand as in partially offset turn results. to products. in on higher partially quarter North primarily constant Asia. approximately segment currency net segment Ceramide Elizabeth sales, decrease first million primarily Beauty in basis. Revlon Glo across expenses prior $X all like the sales. of year quarter, This an the million the to ColorSilk sales. the support reported skin compared other the net due lower Revlon a profit care, $X due to primarily was of sales the year regions, Tools color sales as sales lower sales as were XXXX Arden hair to pandemic. to to a as Tea as primarily driven our other segment's on offset COVID-XX Revlon care was were sales would care The support partially first net to $XXX net lower by in The approximately net Arden, and higher an million $X XX% hair sales driven

reported Mitchum restructuring sale program brand SG&A the $XX million higher prior were for basis. well driven a XXXX net $X on cost the brand. as through in expenses net and the Honey XX% our partially reported December an by was of which segment's Revlon during million, decrease driven driven a to by was largely lower in of $XX XXXX sales the by of increase segment gross produce year XXXX, constant net segment quarter, profit continued the by offset achieved portfolio lower versus segment decrease period, revenue first transition of profit million as reductions sales lower as As currency the The sales. Portfolio the Natural in and brand support sales expenses margin, net services

offset Couture, Varvatos reported quarter, The segment XX% million, Juicy a slightly in the $X net brand higher in first year segment's profit on as $XX of sales first segment's sales growth the segment period, million Fragrances basis. primarily support as John our the $X and America. increase million increase compared prior lower Curve quarter Fragrances were as was net by North a lower currency to an result by in gross partially margin. profit a reported driven constant and representing was expenses, the Finally, primarily

lower the used $XX and flows in by The in during cash first decrease million to quarter period. lower in was usage used Turning to levels, operating COVID-XX-related was by million $XX used in in driven to compared compared prior the year Free year first used inventory million adjusted sales. primarily Net cash period. lower quarter $XX liquidity. net activities million the offset was losses cash prior the operating $XX

company events: two announced will asset-based enhance Financial, replacing administrative collateral May the to we finally, provide revolving additional During on extend the the immaterial, as displays. springing the permanent we to transaction agent. subsequent XXXX the Citibank amendment Debbie $X highlighted, And first our quarter, MidCap also million XXXX, and capital expenditures announced maturity credit liquidity, First, with to subject today were an as flexibility and spent maturities. This agreement and our certain operating

Growth a Global and our Revlon our long-term drive strategy Accelerator to Revlon as launched program. revenue XXXX as brands sustainable we This program reinvestment expansion includes Second, an our well strengthen program restructuring of and growth. is margin

growth through As Debbie approximate mid-single-digit our expect regarding the annual an we of mentioned, end to compounded deliver expectations, XXXX. growth rate

million is cost reductions when which, $XX annualized $XXX our reductions Revlon restructuring the And million of million. combining growth additionally, the million total expected related program of we pretax restructuring combined XXXX million the a $XX range to reductions, to the Regarding cost $XXX basis, $XXX embedded in million charges to RGGA cost expect our approximately XXXX. to Global through restructuring Revlon an recognize of on annualized $XXX Revlon deliver to with approximately and Accelerator, total program, and

to now from we on in reinvest behind future and Revlon growth. the business, momentum foundation now our hand I'll our capital seeing Debbie exciting our for strategically for this are iconic build closing the for to journey COVID-XX, With recovery and strengthened our call embark time the structure the over industry's comments. the is to brands continued

Debbie Perelman

Victoria. quarter you, In Thank continued improvement the business. closing, in our results reflect the first

Our you. the I road call sharing sustainable forward for on is refinancing our the map Global momentum Thank long-term strength With look calls. structure, Growth we forward questions. our and continued to that, in capital now future our Accelerator for recent will open Revlon growth. Revlon's

Debbie Perelman

efforts Seeing are every for you. a you. the stay you Have thank today, say to Thank special call day a you today all Thank questions the World let Revlon make team note our who around the to and me Thank all to day. continue good single you joined members listening. safe. who no and

Operator

today's will program. conclude participation. this for And Thank your you

You may now disconnect.

Revlon (REVRQ) 10 May 212021 Q1 Earnings call transcript