BASF Bets on Allylix Inc.

BASF Bets on Allylix Inc.

• BASF Venture Capital GmbH has invested $13.5 million in Allylix Inc., a US-based renewable chemicals company. The BASF subsidiary led a $18.2 million financing round, joined by existing investors Tate & Lyle Ventures, Avrio Ventures and Cultivian Ventures.

Allylix has a proprietary technology platform to produce a wide variety of renewable specialty chemicals for several industries including flavor and fragrance, food ingredients, cosmetics and other markets. The technology, based on fermentation, allows for the creation of highly pure, renewable compounds that have previously only been available from natural resources in limited quantities.

“Our investment in Allylix could allow us to broaden our use of renewable raw materials for sustainable chemical solutions in the future and leverage our competency in aroma chemicals, nutrition and cosmetic chemicals,” said Dr. Daniela Proske, principal at BASF Venture Capital America. “The company has demonstrated the ability to produce high-quality products at scalable commercial quantities and at a lower price point, which is one of several compelling reasons to invest in Allylix.”

Terpenes and their derivatives are rarely accessible by chemical synthesis and have previously only been available from natural resources in limited amounts. Allylix’s metabolic and protein engineering technology platform is protected by 57 patents, and allows the company to quickly develop and produce by fermentation high-value specialty chemicals at relatively low investment, and at a lower cost than traditional production methods.

Annual Sales Up 13% At Reckitt Benckiser
• Reckitt Benckiser’s 2011 sales rose 13% to $15 billion. For the fourth quarter, sales increase 8% to $3.8 billion.

Commenting on the full year results, Rakesh Kapoor, chief executive officer, said, “Reckitt Benckiser delivered another strong year, exceeding both our net revenue target (12%) and adjusted net income target in an increasingly tough environment. Like-for-like growth of 4% was underpinned by a robust performance in the base business, especially in Q4.

According to Kapoor, sales are being driven by gains in emerging markets and the company’s stable of power brands.

Q2 Sales Rise 10% At Estée Lauder
• The Estée Lauder Companies Inc. reported a strong financial performance for its second quarter ended Dec. 31, 2011, which was slightly ahead of the top of its previously stated guidance, according to the company. For the quarter, net sales rose 10% to $2.74 billion, while net earnings increased 15% to nearly $397 million.

For the six months ended Dec. 31, 2011, net sales increased 14% to $5.21 billion. The company reported net earnings of $675.3 million for the six months, a 26% increase from the same period last year.

“The company’s strong second quarter results complete an outstanding first half performance,” noted Fabrizio Freda, president and chief executive officer. “Our sales and profits this holiday season came in higher than planned and demonstrate the vibrancy of our brand portfolio in solid as well as soft economies.”

According to Freda, gains were reported across brands, regions, categories and channels. The key drivers of the 10% sales growth were the US, China, travel retail and online. Moreover, Estée Lauder continued its consistent gross margin and operating margin improvements.

Skin care sales rose 14%. The Estée Lauder brand had strong sales from the recent launches of Idealist Even Skintone Illuminator, Idealist Cooling Eye Illuminator and Re-Nutriv Replenishing Comfort Creme. Continued growth of Advanced Night Repair Synchronized Recovery Complex and the launch of the Resilience Lift and reformulated Nutritious Vita-Mineral lines of products also contributed incremental sales. The successful launch of Turnaround Overnight Radiance Moisturizer by Clinique, strong sales growth from La Mer and the Plantscription line of products by Origins also contributed to the category’s growth. These sales gains were partially offset by lower sales from certain existing products. Operating income increased sharply, primarily reflecting improved results from higher-margin product launches from certain of the company’s heritage brands, as well as from higher-end prestige skin care products.

Makeup net sales growth reflected strong increases, primarily from the makeup artist brands and certain heritage brands. The higher makeup sales reflected increases across a broad range of products, such as Doublewear Stay-In-Place Makeup SPF 10 and Pure Color lipstick products from Estée Lauder. Repairwear Laser Focus All-Smooth Makeup SPF 15, Lid Smoothie Antioxidant 8-Hour Eye Colour and Even Better Makeup SPF 15 from Clinique generated solid sales gains. The introduction of the Tom Ford line of cosmetics contributed to the category’s growth. Makeup operating income increased, primarily reflecting improved results from the company’s makeup artist brands and certain of its heritage brands.

Fragrance sales decreased, with sales gains in the Americas and Asia/Pacific being more than offset by declines, primarily in Western Europe, due to economic uncertainty. Fragrance sales were up against a tough comparison to the prior-year period when the category grew 11%. Incremental sales were generated from the recent launches of Estée Lauder Sensuous Nude, DKNY Golden Delicious and Coach Poppy Flower. Higher fragrance sales from the Tom Ford and Jo Malone luxury brands also contributed incremental sales. These increases were more than offset by lower sales of DKNY Be Delicious, Estée Lauder Sensuous, Tommy Hilfiger Loud for Her and pureDKNY.

Hair care net sales increased, led by higher sales from Aveda, which included the recent launch of its Invati line of products. Bumble and bumble also posted strong sales growth, primarily reflecting the success of its expanded retail and salon distribution and the launch of Concen-Straight. These gains were partially offset by sales declines at Ojon, due in part to softness in the direct response television channel.

Hair care operating results increased, primarily due to the higher sales, partially offset by an intangible asset impairment charge related to the Ojon brand of $6.7 million.

Net sales growth in the Americas region was primarily attributable to a strong holiday retail environment in prestige beauty channels in the US, which benefited from winning new product offerings from the company. The improvement also reflects strong growth from the company’s heritage and makeup artist brands, as well as increased sales of higher-end prestige skin care products.
Further, growth reflects prestige beauty outpacing mass, due in part to the company’s strong innovations and personalized service. The higher sales also reflect strong double-digit gains in Latin America, which benefited from growth in emerging markets, such as Brazil, the company said.

Sales of the company’s products online increased double digits and its sales to department stores grew high-single digits. Operating income in the Americas increased 14%, reflecting the strong sales gains, which were partially offset by the timing and level of strategic spending activities. Operating results also reflect the intangible asset impairment charge of $6.7 million related to Ojon.

Net sales in Europe, the Middle East and Africa increased in most countries in the region and in each product category, except fragrance. The company reported it is outpacing its competitors in this region.
Despite economic uncertainties in Europe, the company continued to generate solid growth in a soft market. In constant currency, double-digit net sales growth was recorded in a number of areas, led by the Middle East, Italy and Turkey. These increases reflect strong demand for the company’s products, even in relatively soft retail environments. These increases were partially offset by lower net sales in a few countries, led by Russia, due to destocking by a retailer. The higher operating income in the region primarily reflected increases from the Company’s travel retail business, the Middle East, Spain and South Africa. Partially offsetting the overall growth were lower results in certain countries, led by Russia.

In Asia/Pacific, the company generated strong double-digit local currency sales growth in this region, with increases in all countries, except Japan and Singapore. The strongest gains were generated in China, Korea, Hong Kong, Australia and Thailand, primarily reflecting strong sales of skin care and makeup products. Net sales growth in Korea, Australia, Thailand and New Zealand included approximately $25 million related to increased orders from certain of the company’s retailers, as previously discussed. Operating income in the region rose sharply, with improved results in virtually all countries, led by Korea, Hong Kong, Australia, Taiwan and Thailand.

During fiscal 2012, the company expects to continue to increase global advertising spending on winning brands, new initiatives, impactful product launches and successful existing products.

Fiscal 2011 Proves Fruitful for Revlon
• Revlon, Inc.’s sales rose 4.5% to $1.38 billion last year, while operating income increased 2% to $203.3 million. The increase was primarily driven by the inclusion of the net sales of Sinful Colors and higher net sales of Revlon and Almay color cosmetics and Revlon ColorSilk hair color.

These increases were partially offset by lower net sales of Revlon beauty tools and lower net sales in Venezuela due to the June 2011 fire at the company’s local facility.

“2011 was a year of many notable achievements. We delivered net sales growth of 4.5% and sustained highly competitive operating income margins. We delivered our fourth consecutive year of positive free cash flow and we improved our capital structure by refinancing and reducing our net debt,” said Revlon president and CEO Alan T. Ennis.

Ennis added, “From a marketplace perspective, our emphasis on effective brand communication and strong in-store execution drove our positive performance and we introduced a number of successful new, innovative, consumer-preferred products across our entire portfolio.

“We acquired the Sinful Colors brand and signed two of Hollywood’s most sought-after actresses, Emma Stone and Olivia Wilde, as global brand ambassadors for the Revlon brand.”

Ennis concluded, “We continue to manage our business carefully, with an emphasis on maintaining our operating margins, as we remain focused on continuing to realize our strategic objective of profitably growing our business.”

For fiscal 2011, the results of operations related to Sinful Colors are included in the company’s consolidated financial statements commencing on the date of acquisition, March 17, 2011.

In the US, sales rose 3.9% to $757.4 million. The increase was primarily driven by the inclusion of the net sales of Sinful Colors and higher net sales of Almay color cosmetics and Revlon ColorSilk hair color. These increases were partially offset by lower net sales of Revlon beauty tools and Revlon color cosmetics.

In Asia Pacific, sales rose 11.2% to $233.4 million, primarily due to higher sales of Revlon color cosmetics in China and certain distributor markets, partially offset by lower net sales of Revlon color cosmetics in Japan and Australia. In Europe, Middle East and Africa, net sales jumped 4.1% to $208.7 million.

The increase was due to higher net sales of Revlon cosmetics in South Africa and certain distributor markets, partially offset by lower net sales in Italy.

In Latin America, sales were essentially flat at $107.2 million. Excluding the unfavorable impact of foreign currency fluctuations, net sales in Latin America increased $4.6 million, or 4.3%.

The increase was primarily due to higher net sales of Revlon color cosmetics throughout the region and higher net sales of other beauty care products in Argentina. These increases were partially offset by lower net sales in Venezuela where the company had not fully resumed business since the June 2011 fire.

In Canada, sales in 2011 were $74.7 million, essentially unchanged year-over-year. Excluding the favorable impact of foreign currency fluctuations, net sales in Canada decreased $2.3 million, or 3.1%, primarily due to lower net sales of Almay color cosmetics.

Clorox Reports 4% Sales Gain in Q2
• The Clorox Company reported 4% sales growth in its fiscal second quarter, which ended Dec. 31, 2011. Excluding the Burt’s Bees non-cash goodwill impairment charge in the year-ago quarter, diluted EPS from continuing operations increased 16%.

“We delivered strong second-quarter results,” said chairman and CEO Don Knauss. “We grew sales for the fourth consecutive quarter. Our U.S. categories continue to recover, and our market share remains healthy. While the economic climate remains challenging, our strategies are working and our people are executing well. I feel good about our plans for the remainder of the fiscal year.”

Volume for the second quarter of fiscal year 2012 was flat, with gains in the lifestyle and household segments largely offset by lower shipments in international markets and flat volume in the cleaning segment. Sales grew 4%, with increases in three of the company’s four reportable segments. Sales growth was primarily driven by the benefit of price increases and product innovation across several businesses, partially offset by unfavorable product and country mix.

Within the cleaning segment, which includes laundry, home care and away from home, volume was flat, sales rose 5% and pretax earnings jumped 22%.

The away from home business grew volume by double digits, supported by new products and distribution gains in the institutional health care channel. These results were offset by lower shipments in the laundry and home care business units. Laundry volume was lower due to the impact of a recent price increase on Clorox bleach. Home care volume decreased modestly due to lower shipments of Clorox disinfecting wipes. Price increases on several home care brands also reduced volume.

The variance between volume and sales was primarily due to the benefit of price increases. Pretax earnings reflected higher sales and strong cost savings, partially offset by higher commodity costs.