Hypermarcas financial results buoyed by Coty beauty sale

By Simon Pitman

- Last updated on GMT

Hypermarcas financial results buoyed by Coty beauty sale

Related tags Cosmetics Coty

Brazilian conglomerate Hypermarcas has reported that the first payment in the sale of a major slice of its business to Coty has helped boost its fourth quarter results.

The business is the largest maker of over-the-counter medicines in the huge Brazil market, and after receiving the first payment for the acquisition fourth quarter profits rose significantly.

The company reported that net income more than tripled to Reals 283 million ($71.7m), after recording the first payment from Coty for the sale of its beauty portfolio.

Hypermarcas market share on the rise in Brazil

The results also showed that sales grew by 5.9% during the quarter, which was counterbalanced by the 10.7% consumer inflation rate that has hit the troubled market, which is currently facing a significant economic downturn.

But despite the state of the economy, the company’s results underlined that its market share had increased from 9.9% in the corresponding period last year, to reach a figure of 10.5%.

Back in November of last year, Coty announced that it would pay $1bn to acquire a number of leading color cosmetic, skin care and hair care brands, and the deal was sealed on February 1st​ this year.

Coty acquires leading Brazilian beauty brands

Those brands include: Monange – a multi-category personal care brand (body care, hair care, female deodorant); Risqué – the market leader in nail polish; Bozzano – the market leader in men’s care in Brazil; and Paixão – largest skin care brand in the country.

The acquisition also includes a huge manufacturing and distribution center in Goias state, which is strategically placed in the heart of the country, and will provide the critical mass capabilities for Coty to establish firmer footing in Brazil.

The deal has helped to focus the conglomerate’s business on its mainstay over-the-counter medicines business and away from cosmetics and personal care, which it has been building into a significant portfolio with a series of acquisitions over the course of the last five years.  

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