Coty Q4 and year-end results

17-Aug-2016 - Last updated on 18-Aug-2016 at 15:56 GMT

The cosmetics, skin care, and fragrance company announced its latest financials this week, showing a decline in revenue for the year, better numbers on a quarterly basis, and optimism about integrating the beauty brands that Coty is acquiring from P&G.

The deal with P&G will close this October. “In support of this strategy [for a ‘healthier and better business’], we are actively preparing for the transformational merger with the P&G Beauty Brands business,” Bart Becht, Coty chairman and interim CEO, tells the press.

“We have completed the cost and cash synergy analysis for the merger, confirming earlier announced targets of total potential cost savings of $780 million over four years post transaction close,” he notes later in Coty’s press release about the latest results.

Acquisition track record

Coty points to its ongoing growth through acquisition as a sort of forecast that the P&G brands will only do well for the company. “We also made substantial progress on successfully integrating our recent acquisitions.”

Then, the company goes on to highlight its purchase of Chanel’s Bourjois cosmetics brand (a deal that was completed in April of last year). The brand is now profitable for Coty at a level consistent with other color cosmetics lines.

Beamly, the content agency that Coty acquired last October got a mention, as that team “is contributing to a step change in our capabilities to digitally engage with our consumers.” And, Coty’s integration of the Brazilian Hypermarcas beauty and personal care brands is on track to be complete next month.

Year-end numbers

Coty reports $4,349.1m in net revenue for the 2016 fiscal year, a decrease of 1% compared to the previous year’s revenue. Operating income was down more significantly—36% to $254.2m—because of expenses related to all those acquisitions mentioned above.

The company’s reported net income for the year amounts to $156.9m, a figure that’s down 33%, and adjusted net income of $485.2m, up 19% over the prior year.

Notes on Q4

For the quarter ending 30 June 2016, Coty’s net revenue as reported increased by 6%, compared to the same quarter last year, to come in at $1,075.6m. That same figure is a 1% like-for-like decrease, according to the summary circulated by the company.

Coty reported a 6% increase in adjusted net income for the quarter from $43.1m in Q4 of fiscal 2015 to $45.7m in Q4 this year, a figure which translates to a reported loss of $31m.