11.12.18
After years of declining sales, most recently posting a 2.0% decline in Q3 sales and a 1.7% decline for the nine months, Revlon is initiating a program to streamline operations, reporting structures and business process; i.e., more cuts are on way.
The new 2018 Optimization Program is designed to maximize productivity and improve profitability, cash flows and liquidity. The major initiatives underlying the 2018 Optimization Program include:
Revlon expects that the actions to be implemented under the 2018 Optimization Program will be substantially completed by December 31, 2019 and it is currently projected to result in annualized cost reductions in the range of approximately $125 million to $150 million by the end of 2019. In connection with implementing the 2018 Optimization Program, the Company expects to recognize approximately $30 million to $40 million of total pre-tax restructuring and related charges, consisting of employee-related costs, such as severance, pension and other termination costs, as well as related third party expenses. The Company also expects to incur approximately $10 million of additional capital expenditures. Of the restructuring charges, the Company expects that it will record in the fourth quarter of 2018 an estimated pre-tax restructuring charge of approximately $8 million to $10 million, with the balance to be recognized in 2019. Approximately 85% of the restructuring charges are expected to be paid in cash, with approximately $6 million to $8 million expected to be paid in 2018 and $20 million to $26 million in 2019.
The new 2018 Optimization Program is designed to maximize productivity and improve profitability, cash flows and liquidity. The major initiatives underlying the 2018 Optimization Program include:
- Optimizing Global Supply Chain: Realizing manufacturing efficiencies and rationalizing the global warehouse network and office locations to drive greater efficiency, lower cost base and enhance speed-to-market capabilities for new innovations.
- Enhancing In-Market Execution: Optimizing commercial and organizational structures to create more efficient global and regional capabilities.
- Reducing Overhead Costs and Streamlining Functions: Streamlining functions and workflows by leveraging technology and shared services and standardizing and simplifying business processes, leading to greater agility and faster decision-making.
Revlon expects that the actions to be implemented under the 2018 Optimization Program will be substantially completed by December 31, 2019 and it is currently projected to result in annualized cost reductions in the range of approximately $125 million to $150 million by the end of 2019. In connection with implementing the 2018 Optimization Program, the Company expects to recognize approximately $30 million to $40 million of total pre-tax restructuring and related charges, consisting of employee-related costs, such as severance, pension and other termination costs, as well as related third party expenses. The Company also expects to incur approximately $10 million of additional capital expenditures. Of the restructuring charges, the Company expects that it will record in the fourth quarter of 2018 an estimated pre-tax restructuring charge of approximately $8 million to $10 million, with the balance to be recognized in 2019. Approximately 85% of the restructuring charges are expected to be paid in cash, with approximately $6 million to $8 million expected to be paid in 2018 and $20 million to $26 million in 2019.