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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Avon Products Inc | NYSE:AVP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 5.60 | 0 | 01:00:00 |
NEW YORK, Feb. 11, 2016 /PRNewswire/ -- Avon Products, Inc. (NYSE: AVP) today reported fourth-quarter and full-year 2015 results. "Our operating performance for the fourth quarter and fiscal year was in-line with our most recent outlook. Looking back at 2015, our key local markets drove steady improvement in overall performance. Importantly, we improved year-on-year Active Representative trends – with full-year growth of 1%," said Sheri McCoy, Chief Executive Officer of Avon Products, Inc. "We are on track to close our partnership with Cerberus and fully engaged in executing our transformation plan."
Fourth-Quarter 2015 Income Statement Review (compared with fourth-quarter 2014)
Estimated Impact of Foreign Currency on Continuing Operations | ||||||||||
Fourth-Quarter 2015 |
Full-Year 2015 | |||||||||
Estimated impact |
Estimated impact |
Estimated impact |
Estimated impact | |||||||
Total revenue |
(21) pts |
(21) pts |
||||||||
Adjusted operating profit - transaction |
$ (75) |
$ (0.11) |
$ (210) |
$ (0.31) | ||||||
Adjusted operating profit - translation |
(60) |
(0.09) |
(265) |
(0.38) | ||||||
Total Adjusted operating profit |
$ (135) |
$ (0.20) |
$ (475) |
$ (0.69) | ||||||
Adjusted operating margin |
(530) bps |
(480) bps |
||||||||
Revaluation of working capital |
$ 25 |
$ 0.04 |
$ 10 |
$ 0.01 | ||||||
Adjusted diluted EPS from continuing operations |
$ (0.16) |
$ (0.68) | ||||||||
Adjustments to Fourth-Quarter 2015 GAAP Results to Arrive at Adjusted Results
During the fourth quarter of 2015, the following items had an aggregate impact of $0.04 per diluted share on the financial results:
Fourth-Quarter 2015 Regional Highlights (compared with fourth-quarter 2014)
THREE MONTHS ENDED DECEMBER 31, 2015 | ||||||||||||||||||||||||
REGIONAL RESULTS | ||||||||||||||||||||||||
($ in millions) |
Revenue |
Active Reps |
Average |
Units Sold |
Price/Mix C$ | |||||||||||||||||||
Revenue & Drivers |
US$ |
C$ |
||||||||||||||||||||||
% var. vs |
% var. vs |
% var. vs |
% var. vs |
% var. vs |
% var. vs | |||||||||||||||||||
Latin America |
$ |
779.2 |
(26)% |
-% |
(1)% |
1% |
(6)% |
6% | ||||||||||||||||
Europe, Middle East & Africa |
669.5 |
(13) |
6 |
8 |
(2) |
7 |
(1) | |||||||||||||||||
Asia Pacific |
158.6 |
(16) |
(8) |
- |
(8) |
(7) |
(1) | |||||||||||||||||
Total from operations |
1,607.3 |
(20) |
1 |
2 |
(1) |
(2) |
3 | |||||||||||||||||
Global and other |
- |
- |
- |
- |
- |
- |
- | |||||||||||||||||
Total |
$ |
1,607.3 |
(20)% |
1% |
2% |
(1)% |
(2)% |
3% | ||||||||||||||||
2015 GAAP |
Adjusted Operating Profit |
Adjusted Operating Margin | ||||||||||||||||||||||
Operating Profit/Margin |
Operating |
Operating |
2015 |
2014 |
2015 |
2014 |
Change |
Change | ||||||||||||||||
Latin America |
$ |
47.5 |
6.1% |
$ |
49.0 |
$ |
93.0 |
6.3% |
8.8% |
(250) bps |
(80) bps | |||||||||||||
Europe, Middle East & Africa |
77.5 |
11.6 |
83.7 |
107.2 |
12.5 |
13.9 |
(140) |
(70) | ||||||||||||||||
Asia Pacific |
8.5 |
5.4 |
8.9 |
11.7 |
5.6 |
6.2 |
(60) |
10 | ||||||||||||||||
Total from operations |
133.5 |
8.3 |
141.6 |
211.9 |
8.8 |
10.5 |
(170) |
(450) | ||||||||||||||||
Global and other * |
(70.6) |
- |
(44.8) |
(6.6) |
- |
- |
- |
- | ||||||||||||||||
Total |
$ |
62.9 |
3.9% |
$ |
96.8 |
$ |
205.3 |
6.0% |
10.2% |
(420) bps |
(260) bps | |||||||||||||
*As a result of its classification within discontinued operations, Global and other amounts have been adjusted as compared to amounts previously reported as Global and other. This is primarily due to the inclusion of amounts of Global expenses that were previously allocated to North America, as these represent costs associated with functions of the Company's continuing operations. |
Fourth-Quarter 2015 Regional Highlights
Full-Year 2015 Income Statement Review (compared with full-year 2014)
As a result of the above, Net loss attributable to Avon for the full year of 2015 was $1.1 billion, or a loss of $2.60 per diluted share, as compared to a loss of $389 million, or a loss of $0.88 per diluted share in the prior year.
Full-Year 2015 Cash Flow Review
Adjustments to Full-Year 2015 GAAP Results to Arrive at Adjusted Results
During the full year 2015, the following items had an aggregate impact of $1.82 per diluted share on the financial results:
Transformation Plan
In January 2016, the Company announced a Transformation Plan, which includes cost reductions in an effort to continue to improve its cost structure and to enable the Company to reinvest in growth. As a result of this plan, the Company expects pre-tax annualized cost savings of approximately $350 million after three years, with an estimated $200 million from supply chain reductions and an estimated $150 million from other cost reductions. These pre-tax cost savings are expected to be achieved through restructuring actions as well as other cost-savings strategies that will not result in restructuring charges. The Company plans to reinvest a portion of these cost savings in growth initiatives, including media, social selling and information technology systems that will help the Company modernize its business. The Transformation Plan was initiated in order to enable the Company to achieve its long-term goals of low double-digit operating margin and mid single-digit constant-dollar revenue growth.
Annual Meeting of Shareholders
The Company also announced today that it plans to hold its 2016 Annual Meeting of Shareholders on May 26, 2016. Further details, including time, location, admission requirements and the business to be conducted will be more fully described in the Notice of Annual Meeting of Shareholders and Proxy Statement.
Conference call
Avon will conduct a conference call at 9:00 A.M. today to discuss the full-year and quarterly results. The dial-in number for the call is (800) 843-2086 in the U.S. or (706) 643-1815 from non-U.S. locations (conference ID number: 33073299). The call will be webcast live at www.avoninvestor.com and can be accessed or downloaded from that site for a period of one year.
About Avon Products, Inc.
Avon is the Company that for 130 years has proudly stood for beauty, innovation, optimism and, above all, women. Avon products include well-recognized and beloved brands such as ANEW, Avon Color, Avon Care, Skin-So-Soft, and Advance Techniques. Sold through nearly 6 million active independent Avon Sales Representatives, Avon products delight consumers in approximately 70 countries worldwide. Learn more about Avon and its products at www.avoncompany.com.
Footnotes
1 "Adjusted" items refer to financial measures that are derived from measures calculated in accordance with generally accepted accounting principles in the United States ("GAAP"), but which have been adjusted to exclude certain items. Other Adjusted financial measures that we refer to include Constant dollar (C$) items. All of these adjusted items are Non-GAAP financial measures as described below under "Non-GAAP Financial Measures." These Non-GAAP measures should not be considered in isolation, or as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Please refer to our "Non-GAAP Financial Measures" description at the end of this release and the reconciliations we provide of these Non-GAAP financial measures to their comparable GAAP measures.
2 To supplement our financial results presented in accordance with GAAP and the Non-GAAP Financial Measures discussed above, we have included an additional analysis, "Non-GAAP Impact of Special Revenue Items Affecting Year-Over-Year Comparisons," which presents the change in three Non-GAAP financial measures – constant-dollar revenue, Adjusted gross margin and Adjusted operating margin – in each case, excluding certain revenue items which impact the comparability of our results. These special revenue items include the impacts of 1) the recognition of tax credits in 2014 in Brazil for expected VAT recoveries, which did not recur in 2015 ("2014 Brazil VAT credits"), 2) a new IPI tax law on cosmetics in Brazil which went into effect in May 2015 ("2015 Brazil IPI tax"), and 3) lower constant-dollar revenue in the fourth quarter and the full year of 2015 as compared to the fourth quarter and the full year of 2014 as a result of the sale of Liz Earle in July 2015 ("Liz Earle divestiture"). We believe this additional analysis helps investors to better understand the underlying business results. All of these additional adjustments to those three Non-GAAP financial measures are themselves Non-GAAP financial measures and should not be considered in isolation, or as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Please refer to the reconciliations on pages 20 and 21 in the schedules of this Release that we provide of these Non-GAAP financial measures to our other, related Non-GAAP Financial Measures and then to their comparable GAAP measures.
Forward-Looking Statements
Statements in this release that are not historical facts may be forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed from time to time in reports filed by Avon Products, Inc. with the Securities and Exchange Commission, including Forms 8-K, 10-Q, and 10-K. Some forward-looking statements in this release include and concern our outlook and expected results, cost-reduction actions and savings, and the impact of foreign currency, taxes and tax rates. These forward-looking statements involve risks, uncertainties and other factors, which may cause the actual results, levels of activity, performance or achievement of Avon to be materially different from any future results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, our ability to improve our financial and operational performance, our ability to successfully complete the planned separation of our North America business, the impact of a continued decline in our business results, the possibility of business disruption, competitive uncertainties, and general economic and business conditions in our markets, including fluctuations in foreign currency exchange rates. Any forward-looking statements speak only as of the date they are made. The Company does not undertake to update any such forward-looking statements.
AVON PRODUCTS, INC. | ||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||
Three Months Ended |
Percent |
Twelve Months Ended |
Percent | |||||||||||||||
December 31 |
Change |
December 31 |
Change | |||||||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||||||||
Net sales |
$ |
1,585.8 |
$ |
1,963.7 |
(19)% |
$ |
6,076.5 |
$ |
7,472.5 |
(19)% | ||||||||
Other revenue |
21.5 |
50.4 |
84.0 |
175.5 |
||||||||||||||
Total revenue |
1,607.3 |
2,014.1 |
(20)% |
6,160.5 |
7,648.0 |
(19)% | ||||||||||||
Cost of sales |
663.7 |
776.3 |
2,445.4 |
3,006.9 |
||||||||||||||
Selling, general and administrative expenses |
873.8 |
1,063.0 |
3,543.2 |
4,206.8 |
||||||||||||||
Impairment of goodwill and intangible asset |
6.9 |
- |
6.9 |
- |
||||||||||||||
Operating profit |
62.9 |
174.8 |
(64)% |
165.0 |
434.3 |
(62)% | ||||||||||||
Interest expense |
32.3 |
26.9 |
120.5 |
108.8 |
||||||||||||||
Loss on extinguishment of debt |
- |
- |
5.5 |
- |
||||||||||||||
Interest income |
(2.8) |
(3.4) |
(12.5) |
(14.8) |
||||||||||||||
Other expense, net |
26.2 |
50.4 |
73.7 |
139.5 |
||||||||||||||
Gain on sale of business |
- |
- |
(44.9) |
- |
||||||||||||||
Total other expenses |
55.7 |
73.9 |
142.3 |
233.5 |
||||||||||||||
Income from continuing operations, before taxes |
7.2 |
100.9 |
(93)% |
22.7 |
200.8 |
(89)% | ||||||||||||
Income taxes |
(22.0) |
(406.3) |
(819.2) |
(545.3) |
||||||||||||||
Loss from continuing operations, net of tax |
(14.8) |
(305.4) |
95% |
(796.5) |
(344.5) |
* | ||||||||||||
Loss from discontinued operations, net of tax |
(317.1) |
(24.2) |
(349.1) |
(40.4) |
||||||||||||||
Net loss |
(331.9) |
(329.6) |
(1,145.6) |
(384.9) |
||||||||||||||
Net income attributable to noncontrolling interests |
(1.5) |
(1.1) |
(3.3) |
(3.7) |
||||||||||||||
Net loss attributable to Avon |
$ |
(333.4) |
$ |
(330.7) |
(1)% |
$ |
(1,148.9) |
$ |
(388.6) |
* | ||||||||
Loss per share:(1) |
||||||||||||||||||
Basic |
||||||||||||||||||
Basic loss per share from continuing operations |
$ |
(0.04) |
$ |
(0.70) |
94% |
$ |
(1.81) |
$ |
(0.79) |
* | ||||||||
Basic loss per share from discontinued operations |
(0.72) |
(0.06) |
(0.79) |
(0.09) |
||||||||||||||
Basic loss per share attributable to Avon |
$ |
(0.76) |
$ |
(0.75) |
(1)% |
$ |
(2.60) |
$ |
(0.88) |
* | ||||||||
Diluted |
||||||||||||||||||
Diluted loss per share from continuing operations |
$ |
(0.04) |
$ |
(0.70) |
94% |
$ |
(1.81) |
$ |
(0.79) |
* | ||||||||
Diluted loss per share from discontinued operations |
(0.72) |
(0.06) |
(0.79) |
(0.09) |
||||||||||||||
Diluted loss per share attributable to Avon |
$ |
(0.76) |
$ |
(0.75) |
(1)% |
$ |
(2.60) |
$ |
(0.88) |
* | ||||||||
Weighted-average shares outstanding: |
||||||||||||||||||
Basic |
435.4 |
434.7 |
435.2 |
434.5 |
||||||||||||||
Diluted |
435.4 |
434.7 |
435.2 |
434.5 |
||||||||||||||
* Calculation not meaningful |
||||||||||||||||||
(1) Under the two-class method, loss per share is calculated using net loss allocable to common shares, which is derived by reducing net loss by the loss allocable to participating securities. Net loss allocable to common shares used in the basic and diluted loss per share calculation was ($329.8) and $327.6 for the three months ended December 31, 2015 and 2014, respectively. Net loss allocable to common shares used in the basic and diluted loss per share calculation was ($1,133.2) and ($383.9) for the twelve months ended December 31, 2015 and 2014, respectively. |
AVON PRODUCTS, INC. | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
(Unaudited) | |||||||||
(In millions) | |||||||||
December 31 |
December 31 | ||||||||
2015 |
2014 | ||||||||
Assets |
|||||||||
Current Assets |
|||||||||
Cash and cash equivalents |
$ |
686.9 |
$ |
936.4 | |||||
Accounts receivable, net |
443.0 |
515.6 | |||||||
Inventories |
624.0 |
707.7 | |||||||
Prepaid expenses and other |
296.1 |
590.7 | |||||||
Current assets of discontinued operations |
291.1 |
314.1 | |||||||
Total current assets |
2,341.1 |
3,064.5 | |||||||
Property, plant and equipment, at cost |
1,495.7 |
1,867.9 | |||||||
Less accumulated depreciation |
(728.8) |
(831.1) | |||||||
Property, plant and equipment, net |
766.9 |
1,036.8 | |||||||
Goodwill |
92.3 |
249.3 | |||||||
Other assets |
499.1 |
1,034.3 | |||||||
Noncurrent assets of discontinued operations |
180.1 |
211.9 | |||||||
Total assets |
$ |
3,879.5 |
$ |
5,596.8 | |||||
Liabilities and Shareholders' (Deficit) Equity |
|||||||||
Current Liabilities |
|||||||||
Debt maturing within one year |
$ |
55.2 |
$ |
121.7 | |||||
Accounts payable |
774.2 |
806.3 | |||||||
Accrued compensation |
157.6 |
174.9 | |||||||
Other accrued liabilities |
419.6 |
539.1 | |||||||
Sales and taxes other than income |
174.9 |
160.8 | |||||||
Income taxes |
23.9 |
36.8 | |||||||
Payable to discontinued operations |
100.0 |
100.0 | |||||||
Current liabilities of discontinued operations |
489.7 |
207.6 | |||||||
Total current liabilities |
2,195.1 |
2,147.2 | |||||||
Long-term debt |
2,159.6 |
2,428.7 | |||||||
Employee benefit plans |
177.5 |
249.6 | |||||||
Long-term income taxes |
65.1 |
75.2 | |||||||
Other liabilities |
78.4 |
93.8 | |||||||
Noncurrent liabilities of discontinued operations |
260.2 |
297.0 | |||||||
Total liabilities |
4,935.9 |
5,291.5 | |||||||
Shareholders' (Deficit) Equity |
|||||||||
Common stock |
187.9 |
187.6 | |||||||
Additional paid-in-capital |
2,254.0 |
2,207.9 | |||||||
Retained earnings |
2,448.1 |
3,702.9 | |||||||
Accumulated other comprehensive loss |
(1,366.2) |
(1,217.6) | |||||||
Treasury stock, at cost |
(4,594.1) |
(4,591.0) | |||||||
Total Avon shareholders' (deficit) equity |
(1,070.3) |
289.8 | |||||||
Noncontrolling interests |
13.9 |
15.5 | |||||||
Total shareholders' (deficit) equity |
(1,056.4) |
305.3 | |||||||
Total liabilities and shareholders' (deficit) equity |
$ |
3,879.5 |
$ |
5,596.8 | |||||
AVON PRODUCTS, INC. | |||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
(Unaudited) | |||||||||||
(In millions) | |||||||||||
Twelve Months Ended | |||||||||||
December 31 | |||||||||||
2015 |
2014 | ||||||||||
Cash Flows from Operating Activities of Continuing Operations |
|||||||||||
Net loss |
$ |
(1,145.6) |
$ |
(384.9) | |||||||
Loss from discontinued operations, net of tax |
349.1 |
40.4 | |||||||||
Loss from continuing operations, net of tax |
$ |
(796.5) |
$ |
(344.5) | |||||||
Adjustments to reconcile net loss to net cash provided by operating activities: |
|||||||||||
Depreciation |
94.0 |
121.7 | |||||||||
Amortization |
32.1 |
47.7 | |||||||||
Provision for doubtful accounts |
144.1 |
171.1 | |||||||||
Provision for obsolescence |
45.4 |
78.4 | |||||||||
Share-based compensation |
51.2 |
38.9 | |||||||||
Foreign exchange losses |
44.3 |
41.4 | |||||||||
Deferred income taxes |
644.6 |
236.4 | |||||||||
Charge for Venezuelan monetary assets and liabilities |
(4.2) |
53.7 | |||||||||
Charge for Venezuelan non-monetary assets |
101.7 |
115.7 | |||||||||
Pre-tax gain on sale of business |
(44.9) |
- | |||||||||
Impairment of goodwill and intangible assets |
6.9 |
- | |||||||||
Other |
11.6 |
10.8 | |||||||||
Changes in assets and liabilities: |
|||||||||||
Accounts receivable |
(184.7) |
(179.0) | |||||||||
Inventories |
(106.6) |
(170.5) | |||||||||
Prepaid expenses and other |
8.7 |
(77.0) | |||||||||
Accounts payable and accrued liabilities |
80.4 |
142.6 | |||||||||
Income and other taxes |
50.7 |
57.5 | |||||||||
Noncurrent assets and liabilities |
(87.4) |
(56.0) | |||||||||
Net cash provided by operating activities of continuing operations |
91.4 |
288.9 | |||||||||
Cash Flows from Investing Activities of Continuing Operations |
|||||||||||
Capital expenditures |
(92.4) |
(126.3) | |||||||||
Disposal of assets |
8.2 |
15.7 | |||||||||
Net proceeds from sale of business |
208.3 |
- | |||||||||
Purchases of investments |
(35.3) |
(26.8) | |||||||||
Proceeds from sale of investments |
53.7 |
36.9 | |||||||||
Net cash provided (used) by investing activities of continuing operations |
142.5 |
(100.5) | |||||||||
Cash Flows from Financing Activities of Continuing Operations |
|||||||||||
Cash dividends |
(108.8) |
(110.2) | |||||||||
Debt, net (maturities of three months or less) |
(59.1) |
(22.4) | |||||||||
Proceeds from debt |
7.6 |
- | |||||||||
Repayment of debt |
(261.2) |
(66.5) | |||||||||
Net proceeds from exercise of stock options |
- |
0.2 | |||||||||
Repurchase of common stock |
(3.1) |
(9.8) | |||||||||
Other financing activities |
(5.9) |
- | |||||||||
Net cash used by financing activities of continuing operations |
(430.5) |
(208.7) | |||||||||
Cash Flows from Discontinued Operations |
|||||||||||
Net cash provided by operating activities of discontinued operations |
20.7 |
70.9 | |||||||||
Net cash used by investing activities of discontinued operations |
(4.2) |
(4.6) | |||||||||
Net cash used by financing activities of discontinued operations |
(15.0) |
(10.1) | |||||||||
Net cash provided by discontinued operations |
1.5 |
56.2 | |||||||||
Effect of exchange rate changes on cash and cash equivalents |
(80.7) |
(183.3) | |||||||||
Net decrease in cash and cash equivalents |
(275.8) |
(147.4) | |||||||||
Cash and cash equivalents at beginning of year (1) |
960.5 |
1,107.9 | |||||||||
Cash and cash equivalents at end of year (2) |
$ |
684.7 |
$ |
960.5 | |||||||
(1) Includes cash and cash equivalents of discontinued operations of $24.1 and $17.9 at the beginning of the year in 2015 and 2014, respectively. | |||||||||||
(2) Includes cash and cash equivalents of discontinued operations of ($2.2) and $24.1 at the end of the year in 2015 and 2014, respectively. |
AVON PRODUCTS, INC. | ||||||||||||||||||||||||
SUPPLEMENTAL SCHEDULE | ||||||||||||||||||||||||
SEGMENT PERFORMANCE METRICS | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||||||
THREE MONTHS ENDED DECEMBER 31, 2015 | ||||||||||||||||||||||||
REGIONAL RESULTS | ||||||||||||||||||||||||
Revenue |
Active Reps |
Average Order C$ |
Units Sold |
Price/Mix C$ | ||||||||||||||||||||
Revenue & Drivers |
US$ |
C$ |
||||||||||||||||||||||
% var. vs 4Q14 |
% var. vs 4Q14 |
% var. vs 4Q14 |
% var. vs 4Q14 |
% var. vs 4Q14 |
% var. vs 4Q14 | |||||||||||||||||||
Latin America |
$ |
779.2 |
(26)% |
-% |
(1)% |
1% |
(6)% |
6% | ||||||||||||||||
Europe, Middle East & Africa |
669.5 |
(13) |
6 |
8 |
(2) |
7 |
(1) | |||||||||||||||||
Asia Pacific |
158.6 |
(16) |
(8) |
- |
(8) |
(7) |
(1) | |||||||||||||||||
Total from operations |
1,607.3 |
(20) |
1 |
2 |
(1) |
(2) |
3 | |||||||||||||||||
Global and other |
- |
- |
- |
- |
- |
- |
- | |||||||||||||||||
Total |
$ |
1,607.3 |
(20)% |
1% |
2% |
(1)% |
(2)% |
3% | ||||||||||||||||
2015 GAAP |
Adjusted Operating Profit (Loss) in US$ |
Adjusted Operating Margin | ||||||||||||||||||||||
Operating Profit/Margin |
Operating |
|
2015 |
2014 |
2015 |
2014 |
Change US$ |
Change in C$ | ||||||||||||||||
Latin America |
$ |
47.5 |
6.1% |
$ |
49.0 |
$ |
93.0 |
6.3% |
8.8% |
(250) bps |
(80) bps | |||||||||||||
Europe, Middle East & Africa |
77.5 |
11.6 |
83.7 |
107.2 |
12.5 |
13.9 |
(140) |
(70) | ||||||||||||||||
Asia Pacific |
8.5 |
5.4 |
8.9 |
11.7 |
5.6 |
6.2 |
(60) |
10 | ||||||||||||||||
Total from operations |
133.5 |
8.3 |
141.6 |
211.9 |
8.8 |
10.5 |
(170) |
(450) | ||||||||||||||||
Global and other |
(70.6) |
- |
(44.8) |
(6.6) |
- |
- |
- |
- | ||||||||||||||||
Total |
$ |
62.9 |
3.9% |
$ |
96.8 |
$ |
205.3 |
6.0% |
10.2% |
(420) bps |
(260) bps | |||||||||||||
TWELVE MONTHS ENDED DECEMBER 31, 2015 | ||||||||||||||||||||||||
REGIONAL RESULTS | ||||||||||||||||||||||||
Revenue |
Active Reps |
Average Order C$ |
Units Sold |
Price/Mix C$ | ||||||||||||||||||||
Revenue & Drivers |
US$ |
C$ |
||||||||||||||||||||||
% var. vs FY14 |
% var. vs FY14 |
% var. vs FY14 |
% var. vs FY14 |
% var. vs FY14 |
% var. vs FY14 | |||||||||||||||||||
Latin America |
$ |
3,260.4 |
(23)% |
1% |
(2)% |
3% |
(5)% |
6% | ||||||||||||||||
Europe, Middle East & Africa |
2,272.3 |
(16) |
6 |
7 |
(1) |
5 |
1 | |||||||||||||||||
Asia Pacific |
627.8 |
(11) |
(5) |
(2) |
(3) |
(7) |
2 | |||||||||||||||||
Total from operations |
6,160.5 |
(19) |
2 |
1 |
1 |
(2) |
4 | |||||||||||||||||
Global and other |
- |
- |
- |
- |
- |
- |
- | |||||||||||||||||
Total |
$ |
6,160.5 |
(19)% |
2% |
1% |
1% |
(2)% |
4% | ||||||||||||||||
2015 GAAP |
Adjusted Operating Profit (Loss) in US$ |
Adjusted Operating Margin | ||||||||||||||||||||||
Operating Profit/Margin |
Operating |
|
2015 |
2014 |
2015 |
2014 |
Change in US$ |
Change in C$ | ||||||||||||||||
Latin America |
$ |
103.1 |
3.2% |
$ |
224.9 |
$ |
443.6 |
6.9% |
10.5% |
(360) bps |
(180) bps | |||||||||||||
Europe, Middle East & Africa |
217.1 |
9.6 |
227.5 |
324.1 |
10.0 |
12.0 |
(200) |
(70) | ||||||||||||||||
Asia Pacific |
35.3 |
5.6 |
45.9 |
30.2 |
7.3 |
4.3 |
300 |
330 | ||||||||||||||||
Total from operations |
355.5 |
5.8 |
498.3 |
797.9 |
8.1 |
10.4 |
(230) |
(270) | ||||||||||||||||
Global and other * |
(190.5) |
- |
(146.7) |
(84.4) |
- |
- |
- |
- | ||||||||||||||||
Total |
$ |
165.0 |
2.7% |
$ |
351.6 |
$ |
713.5 |
5.7% |
9.3% |
(360) bps |
(180) bps | |||||||||||||
*As a result of its classification within discontinued operations, Global and other amounts have been adjusted as compared to amounts previously reported as Global and other. This is primarily due to the inclusion of amounts of Global expenses that were previously allocated to North America, as these represent costs associated with functions of the Company's continuing operations. |
AVON PRODUCTS, INC. | ||||||||||||||||
SUPPLEMENTAL SCHEDULE | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions) | ||||||||||||||||
CATEGORY SALES (US$) | ||||||||||||||||
Consolidated | ||||||||||||||||
Three months ended December 31 |
US$ |
C$ | ||||||||||||||
2015 |
2014 |
% var. vs 4Q14 |
% var. vs 4Q14 | |||||||||||||
Beauty: |
||||||||||||||||
Skincare |
$ |
435.6 |
$ |
568.7 |
(23)% |
(1)% | ||||||||||
Fragrance |
459.2 |
551.8 |
(17) |
6 | ||||||||||||
Color |
262.1 |
342.2 |
(23) |
(2) | ||||||||||||
Total Beauty |
1,156.9 |
1,462.7 |
(21) |
2 | ||||||||||||
Fashion & Home: |
||||||||||||||||
Fashion (jewelry/watches/apparel/footwear/accessories/children's) |
250.9 |
278.7 |
(10) |
9 | ||||||||||||
Home (gift & decorative products/housewares/entertainment & leisure/children's/nutrition) |
178.0 |
222.3 |
(20) |
1 | ||||||||||||
Total Fashion & Home |
428.9 |
501.0 |
(14) |
5 | ||||||||||||
Net sales |
1,585.8 |
1,963.7 |
(19) |
2 | ||||||||||||
Other revenue |
21.5 |
50.4 |
(57) |
(46) | ||||||||||||
Total revenue |
$ |
1,607.3 |
$ |
2,014.1 |
(20) |
1 | ||||||||||
Consolidated | ||||||||||||||||
Twelve months ended December 31 |
US$ |
C$ | ||||||||||||||
2015 |
2014 |
% var. vs FY14 |
% var. vs FY14 | |||||||||||||
Beauty: |
||||||||||||||||
Skincare |
$ |
1,791.2 |
$ |
2,281.0 |
(21)% |
-% | ||||||||||
Fragrance |
1,632.8 |
1,966.3 |
(17) |
7 | ||||||||||||
Color |
1,078.1 |
1,365.1 |
(21) |
1 | ||||||||||||
Total Beauty |
4,502.1 |
5,612.4 |
(20) |
3 | ||||||||||||
Fashion & Home: |
||||||||||||||||
Fashion (jewelry/watches/apparel/footwear/accessories/children's) |
907.8 |
1,040.4 |
(13) |
6 | ||||||||||||
Home (gift & decorative products/housewares/entertainment & leisure/children's/nutrition) |
666.6 |
819.7 |
(19) |
4 | ||||||||||||
Total Fashion & Home |
1,574.4 |
1,860.1 |
(15) |
5 | ||||||||||||
Net sales |
6,076.5 |
7,472.5 |
(19) |
3 | ||||||||||||
Other revenue |
84.0 |
175.5 |
(52) |
(40) | ||||||||||||
Total revenue |
$ |
6,160.5 |
$ |
7,648.0 |
(19) |
2 | ||||||||||
AVON PRODUCTS, INC. | |||||||||||||||||||||||||
SUPPLEMENTAL SCHEDULE | |||||||||||||||||||||||||
NON-GAAP FINANCIAL MEASURES | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
(In millions, except per share data) | |||||||||||||||||||||||||
This supplemental schedule provides adjusted Non-GAAP financial information and a quantitative reconciliation of the difference between the |
|||||||||||||||||||||||||
THREE MONTHS ENDED DECEMBER 31, 2015 | |||||||||||||||||||||||||
CTI |
Pension |
Asset |
|||||||||||||||||||||||
Reported |
restructuring |
Venezuelan |
settlement |
impairment and |
Other |
Special |
Adjusted | ||||||||||||||||||
(GAAP) |
initiatives |
special items |
charge |
other charges |
items |
tax items |
(Non-GAAP) | ||||||||||||||||||
Total revenue |
$ |
1,607.3 |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
1,607.3 | |||||||||
Cost of sales |
663.7 |
- |
1.9 |
- |
- |
- |
- |
661.8 | |||||||||||||||||
Selling, general and administrative expenses |
873.8 |
20.9 |
- |
1.1 |
- |
3.1 |
- |
848.7 | |||||||||||||||||
Impairment of goodwill and intangible assets |
6.9 |
- |
- |
- |
6.9 |
- |
- |
- | |||||||||||||||||
Operating profit |
62.9 |
20.9 |
1.9 |
1.1 |
6.9 |
3.1 |
- |
96.8 | |||||||||||||||||
Income from continuing operations, before taxes |
7.2 |
20.9 |
1.9 |
1.1 |
6.9 |
3.1 |
- |
41.1 | |||||||||||||||||
Income taxes |
(22.0) |
0.3 |
- |
- |
- |
- |
(18.7) |
(40.4) | |||||||||||||||||
(Loss) income from continuing operations, net of tax |
$ |
(14.8) |
$ |
21.2 |
$ |
1.9 |
$ |
1.1 |
$ |
6.9 |
$ |
3.1 |
$ |
(18.7) |
$ |
0.7 | |||||||||
Diluted EPS from continuing operations |
$ |
(0.04) |
$ |
0.05 |
$ |
- |
$ |
- |
$ |
0.01 |
$ |
- |
$ |
(0.04) |
$ |
- | |||||||||
Gross margin |
58.7% |
- |
0.1 |
- |
- |
- |
- |
58.8% | |||||||||||||||||
SG&A as a % of revenues |
54.4% |
(1.3) |
- |
(0.1) |
- |
(0.2) |
- |
52.8% | |||||||||||||||||
Operating margin |
3.9% |
1.3 |
0.1 |
0.1 |
0.4 |
0.2 |
- |
6.0% | |||||||||||||||||
Effective tax rate |
* |
98.3% | |||||||||||||||||||||||
SEGMENT OPERATING PROFIT (LOSS) |
|||||||||||||||||||||||||
Latin America |
$ |
47.5 |
$ |
(0.4) |
$ |
1.9 |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
49.0 | |||||||||
Europe, Middle East & Africa |
77.5 |
(0.7) |
- |
- |
6.9 |
- |
- |
83.7 | |||||||||||||||||
Asia Pacific |
8.5 |
0.4 |
- |
- |
- |
- |
- |
8.9 | |||||||||||||||||
Global and other |
(70.6) |
21.6 |
- |
1.1 |
- |
3.1 |
- |
(44.8) | |||||||||||||||||
Total |
$ |
62.9 |
$ |
20.9 |
$ |
1.9 |
$ |
1.1 |
$ |
6.9 |
$ |
3.1 |
$ |
- |
$ |
96.8 | |||||||||
SEGMENT OPERATING MARGIN |
|||||||||||||||||||||||||
Latin America |
6.1% |
(0.1) |
0.2 |
- |
- |
- |
- |
6.3% | |||||||||||||||||
Europe, Middle East & Africa |
11.6% |
(0.1) |
- |
- |
1.0 |
- |
- |
12.5% | |||||||||||||||||
Asia Pacific |
5.4% |
0.3 |
- |
- |
- |
- |
- |
5.6% | |||||||||||||||||
Global and other |
-% |
- |
- |
- |
- |
- |
- |
-% | |||||||||||||||||
Total |
3.9% |
1.3 |
0.1 |
0.1 |
- |
- |
- |
6.0% | |||||||||||||||||
Amounts in the table above may not necessarily sum because the computations are made independently. |
|||||||||||||||||||||||||
* Calculation not meaningful |
AVON PRODUCTS, INC. | |||||||||||||||||||||||||
SUPPLEMENTAL SCHEDULE | |||||||||||||||||||||||||
NON-GAAP FINANCIAL MEASURES | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
(In millions, except per share data) | |||||||||||||||||||||||||
This supplemental schedule provides adjusted Non-GAAP financial information and a quantitative reconciliation of the difference between the |
|||||||||||||||||||||||||
TWELVE MONTHS ENDED DECEMBER 31, 2015 | |||||||||||||||||||||||||
CTI |
Pension |
Asset |
|||||||||||||||||||||||
Reported |
restructuring |
Venezuelan |
settlement |
impairment and |
Other |
Special |
Adjusted | ||||||||||||||||||
(GAAP) |
initiatives |
special items |
charge |
other charges |
items |
tax items |
(Non-GAAP) | ||||||||||||||||||
Total revenue |
$ |
6,160.5 |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
6,160.5 | |||||||||
Cost of sales |
2,445.4 |
- |
28.5 |
- |
- |
- |
- |
2,416.9 | |||||||||||||||||
Selling, general and administrative expenses |
3,543.2 |
49.1 |
91.7 |
7.3 |
- |
3.1 |
- |
3,392.0 | |||||||||||||||||
Impairment of goodwill and intangible asset |
6.9 |
- |
- |
- |
6.9 |
- |
- |
- | |||||||||||||||||
Operating profit |
165.0 |
49.1 |
120.2 |
7.3 |
6.9 |
3.1 |
- |
351.6 | |||||||||||||||||
Income from continuing operations, before taxes |
22.7 |
49.1 |
116.0 |
7.3 |
6.9 |
(33.8) |
- |
168.2 | |||||||||||||||||
Income taxes |
(819.2) |
(2.4) |
0.8 |
- |
- |
(6.7) |
666.4 |
(161.1) | |||||||||||||||||
(Loss) income from continuing operations, net of tax |
$ |
(796.5) |
$ |
46.7 |
$ |
116.8 |
$ |
7.3 |
$ |
6.9 |
$ |
(40.5) |
$ |
666.4 |
$ |
7.1 | |||||||||
Diluted EPS from continuing operations |
$ |
(1.81) |
$ |
0.11 |
$ |
0.26 |
$ |
0.02 |
$ |
0.02 |
$ |
(0.09) |
$ |
1.51 |
$ |
0.01 | |||||||||
Gross margin |
60.3% |
- |
0.5 |
- |
- |
- |
- |
60.8% | |||||||||||||||||
SG&A as a % of revenues |
57.5% |
(0.8) |
(1.5) |
(0.1) |
- |
(0.1) |
- |
55.1% | |||||||||||||||||
Operating margin |
2.7% |
0.8 |
2.0 |
0.1 |
0.1 |
0.1 |
- |
5.7% | |||||||||||||||||
Effective tax rate |
* |
95.8% | |||||||||||||||||||||||
SEGMENT OPERATING PROFIT (LOSS) |
|||||||||||||||||||||||||
Latin America |
$ |
103.1 |
$ |
1.6 |
$ |
120.2 |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
224.9 | |||||||||
Europe, Middle East & Africa |
217.1 |
3.5 |
- |
- |
6.9 |
- |
- |
227.5 | |||||||||||||||||
Asia Pacific |
35.3 |
10.6 |
- |
- |
- |
- |
- |
45.9 | |||||||||||||||||
Global and other |
(190.5) |
33.4 |
- |
7.3 |
- |
3.1 |
- |
(146.7) | |||||||||||||||||
Total |
$ |
165.0 |
$ |
49.1 |
$ |
120.2 |
$ |
7.3 |
$ |
6.9 |
$ |
3.1 |
$ |
- |
$ |
351.6 | |||||||||
SEGMENT OPERATING MARGIN |
|||||||||||||||||||||||||
Latin America |
3.2% |
- |
3.7 |
- |
- |
- |
- |
6.9% | |||||||||||||||||
Europe, Middle East & Africa |
9.6% |
0.2 |
- |
- |
0.3 |
- |
- |
10.0% | |||||||||||||||||
Asia Pacific |
5.6% |
1.7 |
- |
- |
- |
- |
- |
7.3% | |||||||||||||||||
Global and other |
-% |
- |
- |
- |
- |
- |
- |
-% | |||||||||||||||||
Total |
2.7% |
0.8 |
2.0 |
0.1 |
0.1 |
- |
- |
5.7% | |||||||||||||||||
Amounts in the table above may not necessarily sum because the computations are made independently. |
|||||||||||||||||||||||||
* Calculation not meaningful |
AVON PRODUCTS, INC. | ||||||||||||||||||||||
SUPPLEMENTAL SCHEDULE | ||||||||||||||||||||||
NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||||
This supplemental schedule provides adjusted Non-GAAP financial information and a quantitative reconciliation of the difference between the |
||||||||||||||||||||||
THREE MONTHS ENDED DECEMBER 31, 2014 | ||||||||||||||||||||||
CTI |
Pension |
|||||||||||||||||||||
Reported |
restructuring |
Venezuelan |
FCPA |
settlement |
Special |
Adjusted | ||||||||||||||||
(GAAP) |
initiatives |
special items |
accrual |
charge |
tax items |
(Non-GAAP) | ||||||||||||||||
Total revenue |
$ |
2,014.1 |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
2,014.1 | ||||||||
Cost of sales |
776.3 |
- |
1.4 |
- |
- |
- |
774.9 | |||||||||||||||
Selling, general and administrative expenses |
1,063.0 |
27.1 |
- |
- |
2.0 |
- |
1,033.9 | |||||||||||||||
Operating profit |
174.8 |
27.1 |
1.4 |
- |
2.0 |
- |
205.3 | |||||||||||||||
Income from continuing operations, before taxes |
100.9 |
27.1 |
1.4 |
- |
2.0 |
- |
131.4 | |||||||||||||||
Income taxes |
(406.3) |
(7.6) |
- |
(18.5) |
(0.7) |
395.7 |
(37.4) | |||||||||||||||
(Loss) income from continuing operations, net of tax |
$ |
(305.4) |
$ |
19.5 |
$ |
1.4 |
$ |
(18.5) |
$ |
1.3 |
$ |
395.7 |
$ |
94.0 | ||||||||
Diluted EPS from continuing operations |
$ |
(0.70) |
$ |
0.04 |
$ |
- |
$ |
(0.04) |
$ |
- |
$ |
0.90 |
$ |
0.21 | ||||||||
Gross margin |
61.5% |
- |
0.1 |
- |
- |
- |
61.5% | |||||||||||||||
SG&A as a % of revenues |
52.8% |
(1.3) |
- |
- |
(0.1) |
- |
51.3% | |||||||||||||||
Operating margin |
8.7% |
1.3 |
0.1 |
- |
0.1 |
- |
10.2% | |||||||||||||||
Effective tax rate |
* |
28.5% | ||||||||||||||||||||
SEGMENT OPERATING PROFIT (LOSS) |
||||||||||||||||||||||
Latin America |
$ |
82.9 |
$ |
8.7 |
$ |
1.4 |
$ |
- |
$ |
- |
$ |
- |
$ |
93.0 | ||||||||
Europe, Middle East & Africa |
101.2 |
6.0 |
- |
- |
- |
- |
107.2 | |||||||||||||||
Asia Pacific |
5.3 |
6.4 |
- |
- |
- |
- |
11.7 | |||||||||||||||
Global and other |
(14.6) |
6.0 |
- |
- |
2.0 |
- |
(6.6) | |||||||||||||||
Total |
$ |
174.8 |
$ |
27.1 |
$ |
1.4 |
$ |
- |
$ |
2.0 |
$ |
- |
$ |
205.3 | ||||||||
SEGMENT OPERATING MARGIN |
||||||||||||||||||||||
Latin America |
7.9% |
0.8 |
0.1 |
- |
- |
- |
8.8% | |||||||||||||||
Europe, Middle East & Africa |
13.1% |
0.8 |
- |
- |
- |
- |
13.9% | |||||||||||||||
Asia Pacific |
2.8% |
3.4 |
- |
- |
- |
- |
6.2% | |||||||||||||||
Global and other |
-% |
- |
- |
- |
- |
- |
-% | |||||||||||||||
Total |
8.7% |
1.3 |
0.1 |
- |
0.1 |
- |
10.2% | |||||||||||||||
Amounts in the table above may not necessarily sum because the computations are made independently. |
||||||||||||||||||||||
* Calculation not meaningful |
AVON PRODUCTS, INC. | ||||||||||||||||||||||
SUPPLEMENTAL SCHEDULE | ||||||||||||||||||||||
NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||||
This supplemental schedule provides adjusted Non-GAAP financial information and a quantitative reconciliation of the difference between the Non-GAAP financial measure and the financial measure calculated and reported in accordance with GAAP. |
||||||||||||||||||||||
TWELVE MONTHS ENDED DECEMBER 31, 2014 | ||||||||||||||||||||||
CTI |
Pension |
|||||||||||||||||||||
Reported |
restructuring |
Venezuelan |
FCPA |
settlement |
Special |
Adjusted | ||||||||||||||||
(GAAP) |
initiatives |
special items |
accrual |
charge |
tax items |
(Non-GAAP) | ||||||||||||||||
Total revenue |
$ |
7,648.0 |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
7,648.0 | ||||||||
Cost of sales |
3,006.9 |
- |
121.1 |
- |
- |
- |
2,885.8 | |||||||||||||||
Selling, general and administrative expenses |
4,206.8 |
86.6 |
16.0 |
46.0 |
9.5 |
- |
4,048.7 | |||||||||||||||
Operating profit |
434.3 |
86.6 |
137.1 |
46.0 |
9.5 |
- |
713.5 | |||||||||||||||
Income from continuing operations, before taxes |
200.8 |
86.6 |
190.8 |
46.0 |
9.5 |
533.7 | ||||||||||||||||
Income taxes |
(545.3) |
(22.2) |
(11.9) |
(18.5) |
(3.4) |
395.7 |
(205.6) | |||||||||||||||
(Loss) income from continuing operations, net of tax |
$ |
(344.5) |
$ |
64.4 |
$ |
178.9 |
$ |
27.5 |
$ |
6.1 |
$ |
395.7 |
$ |
328.1 | ||||||||
Diluted EPS from continuing operations |
$ |
(0.79) |
$ |
0.15 |
0.41 |
$ |
0.06 |
$ |
0.01 |
$ |
0.90 |
$ |
0.74 | |||||||||
Gross margin |
60.7% |
- |
1.6 |
- |
- |
- |
62.3% | |||||||||||||||
SG&A as a % of revenues |
55.0% |
(1.1) |
(0.2) |
(0.6) |
(0.1) |
- |
52.9% | |||||||||||||||
Operating margin |
5.7% |
1.1 |
1.8 |
0.6 |
0.1 |
- |
9.3% | |||||||||||||||
Effective tax rate |
* |
38.5% | ||||||||||||||||||||
SEGMENT OPERATING PROFIT (LOSS) |
||||||||||||||||||||||
Latin America |
$ |
279.8 |
$ |
26.7 |
$ |
137.1 |
$ |
- |
$ |
- |
- |
$ |
443.6 | |||||||||
Europe, Middle East & Africa |
300.9 |
23.2 |
- |
- |
- |
- |
324.1 | |||||||||||||||
Asia Pacific |
20.9 |
9.3 |
- |
- |
- |
- |
30.2 | |||||||||||||||
Global and other |
(167.3) |
27.4 |
- |
46.0 |
9.5 |
- |
(84.4) | |||||||||||||||
Total |
$ |
434.3 |
$ |
86.6 |
$ |
137.1 |
$ |
46.0 |
$ |
9.5 |
$ |
- |
$ |
713.5 | ||||||||
SEGMENT OPERATING MARGIN |
||||||||||||||||||||||
Latin America |
6.6% |
0.6 |
3.2 |
- |
- |
- |
10.5% | |||||||||||||||
Europe, Middle East & Africa |
11.1% |
0.9 |
- |
- |
- |
- |
12.0% | |||||||||||||||
Asia Pacific |
3.0% |
1.3 |
- |
- |
- |
- |
4.3% | |||||||||||||||
Global and other |
-% |
- |
- |
- |
- |
- |
-% | |||||||||||||||
Total |
5.7% |
1.1 |
1.8 |
0.6 |
0.1 |
- |
9.3% | |||||||||||||||
Amounts in the table above may not necessarily sum because the computations are made independently. |
||||||||||||||||||||||
* Calculation not meaningful |
AVON PRODUCTS, INC. | ||||||||||||||
SUPPLEMENTAL SCHEDULE | ||||||||||||||
NON-GAAP IMPACT OF SPECIAL REVENUE ITEMS AFFECTING YEAR-OVER-YEAR COMPARISONS | ||||||||||||||
(Unaudited) | ||||||||||||||
This supplemental schedule provides adjusted Non-GAAP financial information and a quantitative reconciliation of the difference between the Non-GAAP financial measures shown, other related Non-GAAP financial measures we present elsewhere and the financial measures calculated and reported in accordance with GAAP. | ||||||||||||||
THREE MONTHS ENDED DECEMBER 31, 2015 | ||||||||||||||
Constant $ revenue | ||||||||||||||
Year-over-Year Impacts of: |
||||||||||||||
Revenue % change |
C$ revenue % change |
2014 Brazil VAT credits |
2015 Brazil IPI tax |
Liz Earle divestiture |
C$ revenue % change, excluding special revenue items |
C$ revenue % change, excluding Liz Earle divestiture | ||||||||
Total Avon |
(20)% |
1% |
1 pt |
2 pts |
2 pts |
6% |
3% | |||||||
Latin America |
(26)% |
-% |
2 pts |
4 pts |
- |
6% |
||||||||
Brazil |
(44)% |
(14)% |
4 pts |
8 pts |
- |
(2)% |
||||||||
Europe, Middle East & Africa |
(13)% |
6% |
- |
- |
4 pts |
10% |
10% | |||||||
Gross Margin |
Operating Margin |
|||||||||||||
Total Avon |
2015 |
2014 |
Change |
2015 |
2014 |
Change |
||||||||
Reported (GAAP) |
58.7% |
61.5% |
(280) bps |
3.9% |
8.7% |
(480) bps |
||||||||
Adjusted (Non-GAAP) |
58.8% |
61.5% |
(270) bps |
6.0% |
10.2% |
(420) bps |
||||||||
Impacts of: |
||||||||||||||
2015 Brazil IPI tax |
20 bps |
- |
100 bps |
- |
||||||||||
2014 Brazil VAT credits |
- |
(50) bps |
- |
(110) bps |
||||||||||
Adjusted, excluding special revenue items |
59.0% |
61.0% |
(200) bps |
7.0% |
9.1% |
(210) bps |
||||||||
Operating Margin |
||||||||||||||
Latin America |
2015 |
2014 |
Change |
|||||||||||
Reported (GAAP) |
6.1% |
7.9% |
(180) bps |
|||||||||||
Adjusted (Non-GAAP) |
6.3% |
8.8% |
(250) bps |
|||||||||||
Impacts of: |
||||||||||||||
2015 Brazil IPI tax |
190 bps |
- |
||||||||||||
2014 Brazil VAT credits |
- |
(220) bps |
||||||||||||
Adjusted, excluding special revenue items |
8.2% |
6.6% |
160 bps |
|||||||||||
Note: Liz Earle has an immaterial impact on the Adjusted gross margin and Adjusted operating margin change of Total Avon and Europe, Middle East & Africa. |
||||||||||||||
Refer to the Non-GAAP Financial Measures schedules for the reconciliation of the Adjusted Non-GAAP financial measures. |
AVON PRODUCTS, INC. | ||||||||||||||
SUPPLEMENTAL SCHEDULE | ||||||||||||||
NON-GAAP IMPACT OF SPECIAL REVENUE ITEMS AFFECTING YEAR-OVER-YEAR COMPARISONS | ||||||||||||||
(Unaudited) | ||||||||||||||
This supplemental schedule provides adjusted Non-GAAP financial information and a quantitative reconciliation of the difference between the Non-GAAP financial measures shown, other related Non-GAAP financial measures we present elsewhere and the financial measures calculated and reported in accordance with GAAP. | ||||||||||||||
TWELVE MONTHS ENDED DECEMBER 31, 2015 | ||||||||||||||
Constant $ revenue | ||||||||||||||
Year-over-Year Impacts of: |
||||||||||||||
Revenue % change |
C$ revenue % change |
2014 Brazil VAT credits |
2015 Brazil IPI tax |
Liz Earle divestiture |
C$ revenue % change, excluding special revenue items |
C$ revenue % change, excluding Liz Earle divestiture | ||||||||
Total Avon |
(19)% |
2% |
1 pt |
1 pt |
1 pt |
5% |
3% | |||||||
Latin America |
(23)% |
1% |
2 pts |
3 pts |
- |
6% |
||||||||
Brazil |
(34)% |
(8)% |
5 pts |
5 pts |
- |
2% |
||||||||
Europe, Middle East & Africa |
(16)% |
6% |
- |
- |
2 pts |
8% |
8% | |||||||
Gross Margin |
Operating Margin |
|||||||||||||
Total Avon |
2015 |
2014 |
Change |
2015 |
2014 |
Change |
||||||||
Reported (GAAP) |
60.3% |
60.7% |
(40) bps |
2.7% |
5.7% |
(300) bps |
||||||||
Adjusted (Non-GAAP) |
60.8% |
62.3% |
(150) bps |
5.7% |
9.3% |
(360) bps |
||||||||
Impacts of: |
||||||||||||||
2015 Brazil IPI tax |
20 bps |
- |
80 bps |
- |
||||||||||
2014 Brazil VAT credits |
- |
(40) bps |
- |
(100) bps |
||||||||||
Adjusted, excluding special revenue items |
61.0% |
61.9% |
(90) bps |
6.5% |
8.3% |
(180) bps |
||||||||
Operating Margin |
||||||||||||||
Latin America |
2015 |
2014 |
Change |
|||||||||||
Reported (GAAP) |
3.2% |
6.6% |
(340) bps |
|||||||||||
Adjusted (Non-GAAP) |
6.9% |
10.5% |
(360) bps |
|||||||||||
Impacts of: |
||||||||||||||
2015 Brazil IPI tax |
140 bps |
- |
||||||||||||
2014 Brazil VAT credits |
- |
(190) bps |
||||||||||||
Adjusted, excluding special revenue items |
8.3% |
8.6% |
(30) bps |
|||||||||||
Note: Liz Earle has an immaterial impact on the Adjusted gross margin and Adjusted operating margin change of Total Avon and Europe, Middle East & Africa. | ||||||||||||||
Refer to the Non-GAAP Financial Measures schedules for the reconciliation of the Adjusted Non-GAAP financial measures. |
AVON PRODUCTS, INC. | ||||||||
SUPPLEMENTAL SCHEDULE | ||||||||
NON-GAAP IMPACT OF INCLUDING NORTH AMERICA | ||||||||
(Unaudited) | ||||||||
This supplemental schedule provides adjusted Non-GAAP financial information and a quantitative reconciliation of the difference between the Non-GAAP financial measure and the financial measure calculated and reported in accordance with GAAP. This supplemental schedule provides a pro forma analysis of the Company's financial information had the results of the North America business continued to have been reported within continuing operations of the Company. We believe that providing this analysis helps investors to better understand the business results within the context of the expectations and outlook previously provided by the Company. | ||||||||
TWELVE MONTHS ENDED DECEMBER 31, 2015 | ||||||||
Constant $ revenue | ||||||||
Revenue % change |
C$ revenue % change |
Year-over-Year Impact of North America |
C$ revenue % change, including North America | |||||
Total Avon |
(19)% |
2% |
(2) pts |
-% | ||||
Operating Margin |
||||||||
Total Avon |
2015 |
2014 |
Change |
|||||
Reported (GAAP) |
2.7% |
5.7% |
(300) bps |
|||||
Adjusted (Non-GAAP) |
5.7% |
9.3% |
(360) bps |
|||||
Impacts of: |
||||||||
2015 North America Adjusted operating margin |
(30) bps |
- |
||||||
2014 North America Adjusted operating margin |
- |
(100) bps |
||||||
Adjusted, including North America |
5.4% |
8.3% |
(290) bps |
|||||
Note: Amounts previously allocated from Global and other to North America have been moved to Global and other for all periods presented, as these represent costs associated with functions of the Company's continuing operations. | ||||||||
Refer to the Non-GAAP Financial Measures schedules for the reconciliation of the Adjusted Non-GAAP financial measures. |
Non-GAAP Financial Measures
To supplement our financial results presented in accordance with generally accepted accounting principles in the United States ("GAAP"), we disclose operating results that have been adjusted to exclude the impact of changes due to the translation of foreign currencies into U.S. dollars, including changes in: revenue, operating profit, Adjusted operating profit, operating margin and Adjusted operating margin. We also refer to these adjusted financial measures as Constant $ items, which are Non-GAAP financial measures. We believe these measures provide investors an additional perspective on trends and underlying business results. To exclude the impact of changes due to the translation of foreign currencies into U.S. dollars, we calculate current-year results and prior-year results at a constant exchange rate. Foreign currency impact is determined as the difference between actual growth rates and constant-currency growth rates.
We also present gross margin, selling, general and administrative expenses as a percentage of revenue, total and net global expenses, operating profit, operating margin, net income, diluted earnings per share and effective tax rate on a Non-GAAP basis. We refer to these Non-GAAP financial measures as "Adjusted." We have provided a quantitative reconciliation of the difference between the Non-GAAP financial measures and the most directly comparable financial measures calculated and reported in accordance with GAAP. The Company uses the Non-GAAP financial measures to evaluate its operating performance and believes that it is meaningful for investors to be made aware of, on a period-to-period basis, the impacts of 1) costs to implement ("CTI") restructuring initiatives, 2) costs and charges related to the devaluations of Venezuelan currency in February 2015 and March 2014 combined with being designated as a highly inflationary economy ("Venezuelan special items"), 3) the additional $46 million accrual recorded in the first quarter of 2014 for the settlements related to the Foreign Corrupt Practices Act investigations and the associated approximate $19 million net tax benefit recorded in the fourth quarter of 2014 ("FCPA accrual"), 4) the settlement charges associated with the U.S. pension plan ("Pension settlement charge"), 5) the goodwill impairment charge related to the Egypt business ("Asset impairment and other charges"), 6) various other items associated with the sale of Liz Earle, the sale of North America and debt-related charges ("Other items") and 7) the non-cash income tax adjustments associated with the Company's deferred tax assets recorded in 2015 and 2014, and an income tax benefit realized as a result of tax planning strategies ("Special tax items"). The Company believes investors find the Non-GAAP information helpful in understanding the ongoing performance of operations separate from items that may have a disproportionate positive or negative impact on the Company's financial results in any particular period. These Non-GAAP measures should not be considered in isolation, or as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
The Venezuelan special items include the impact on the Consolidated Statements of Operations in 2015 and 2014 caused by the devaluations of Venezuelan currency on monetary assets and liabilities, such as cash, receivables and payables; deferred tax assets and liabilities; and non-monetary assets, such as inventories. For non-monetary assets, the Venezuelan special items include the earnings impact caused by the difference between the historical U.S. dollar cost of the assets at the previous exchange rate and the revised exchange rate. In 2015 and 2014, the Venezuelan special items also include adjustments of approximately $11 million and approximately $116 million, respectively, to reflect certain non-monetary assets at their net realizable value. In 2015, the Venezuelan special items also include an impairment charge of approximately $90 million to reflect the write-down of the long-lived assets to their estimated fair value. In 2014, the devaluation was caused as a result of moving from the official exchange rate of 6.30 to the SICAD II exchange rate of approximately 50. In 2015, the devaluation was caused as a result of moving from the SICAD II exchange rate of approximately 50 to the SIMADI exchange rate of approximately 170.
The Pension settlement charge includes the impact on the Consolidated Statements of Operations in the third and fourth quarters of 2015 and the second, third and fourth quarters of 2014 associated with the payments made to former employees who were vested and participated in the U.S. defined benefit pension plan. Such payments fully settle the Company's pension plan obligation to those participants who elected to receive such payment.
The Asset impairment and other charges include the impact on the Consolidated Statements of Operations caused by the goodwill impairment charge related to the Egypt business in the fourth quarter of 2015.
The Other items include the impact during 2015 on the Consolidated Statements of Operations due to the gain on the sale of Liz Earle. The Other items also includes the impact on the Consolidated Statements of Operations in the fourth quarter of 2015 caused by nonrecurring items of $3.1 million associated with the planned separation of North America that were not classified within discontinued operations. In addition, Other items includes the impact on the Consolidated Statements of Operations in the third quarter of 2015 of the loss on extinguishment of debt caused by the make-whole premium and the write-off of debt issuance costs and discounts associated with the prepayment of the Company's 2.375% Notes. The Other items also include the impact during the second quarter of 2015 on other expense, net in the Consolidated Statements of Operations of $2.5 million associated with the write-off of issuance costs related to the Company's previous $1 billion revolving credit facility.
The Special tax items include the impact during 2015 on income taxes in the Consolidated Statements of Operations due to a non-cash income tax charge in the first quarter of 2015 and a non-cash income tax benefit in the second quarter of 2015, each associated with valuation allowances, to adjust the Company's U.S. deferred tax assets to an amount that was "more likely than not" to be realized. In the first quarter of 2015, the additional valuation allowance was due to the continued strengthening of the U.S. dollar against currencies of some of its key markets, and in the second quarter of 2015, the Company released a portion of its valuation allowance due to the weakening of the U.S. dollar against currencies of some of its key markets. The Special tax items also include the impact during the third quarter of 2015 on income taxes in the Consolidated Statements of Operations due to a non-cash income tax charge as a result of establishing a valuation allowance for the full amount of the Company's U.S. deferred tax assets due to the impact of the continued strengthening of the U.S. dollar against currencies of some of its key markets and its associated effect on the Company's tax planning strategies. Additionally, the Special tax items includes the impact during the third quarter of 2015 on income taxes in the Consolidated Statements of Operations due to a non-cash income tax charge associated with valuation allowances, to adjust certain non-U.S. deferred tax assets to an amount that is "more likely than not" to be realized. The non-U.S. valuation allowance included an adjustment associated with Russia, which was primarily the result of lower earnings, which were significantly impacted by foreign exchange losses on working capital balances. The Special tax items also include the impact during the fourth quarter of 2014 on the income taxes in the Consolidated Statements of Operations due to a non-cash income tax charge primarily associated with a valuation allowance to reduce the Company's U.S. deferred tax assets to an amount that is "more likely than not" to be realized, and was primarily due to the strengthening of the U.S. dollar against currencies of some of its key markets and, to a lesser extent, the finalization of the FCPA settlements. The Special tax items also include the impact during the fourth quarter of 2015 on the income taxes in the Consolidated Statements of Operations due to an income tax benefit realized as a result of the implementation of foreign tax planning strategies.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/avon-reports-fourth-quarter-and-full-year-2015-results-300218731.html
SOURCE Avon Products, Inc.
Copyright 2016 PR Newswire
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