Revlon Reports 2016 Net Sales Growth across All Segments; Raises and Accelerates Acquisition Synergy Estimates

Newly-Combined Company Benefits From Enhanced Scale, Greater
Profitability and Strong International Growth

Revlon CEO, Fabian Garcia, Enthusiastic About Long-Term Growth
Potential

NEW YORK–(BUSINESS WIRE)–Revlon, Inc. (NYSE: REV) today announced its results for the year ended
December 31, 2016.

The above table presents 2016 results using the following measures: U.S.
GAAP (“As Reported”); non-GAAP (“Adjusted”), which excludes
certain Non-Operating Items and Unusual Items from As Reported results;
and Non-GAAP pro forma (“Pro Forma Adjusted”), which presents the
Adjusted results on a pro forma basis as if Revlon and Elizabeth Arden
were a combined company for all of the periods presented (“Pro Forma”).
See footnote (a) for further discussion of the Company’s Adjusted and
Pro Forma Adjusted measures. Reconciliations of As Reported and Pro
Forma results to Adjusted and Pro Forma Adjusted results are provided as
an attachment to this release. In addition, where indicated, the Company
analyzes and presents its results excluding the impact of foreign
currency translation (“XFX”).

Year ended December 31, 2016 Highlights:

• As Reported net sales were $2,334.0 million in 2016, an increase of
  21.9% over 2015. On a Pro Forma basis, 2016 net sales decreased
  slightly, but increased 1.4% XFX over 2015.
• As Reported income from continuing operations, before income taxes,
  was $8.5 million in 2016, compared to $110.7 million in 2015. On a Pro
  Forma basis and after adjusting for charges related to the Elizabeth
  Arden acquisition, as well as impairment charges and other
  Non-Operating Items and Unusual Items, Pro Forma Adjusted income from
  continuing operations, before income taxes, was $82.5 million in 2016,
  representing a $24.9 million increase, as compared to Pro Forma
  Adjusted income from continuing operations, before income taxes of,
  $57.6 million in 2015.
• As Reported net income (loss) was $(21.9) million in 2016 and $56.1
  million in 2015. On an Adjusted basis, net income was $83.7 million in
  2016, compared to $103.1 million in 2015, a decline of 18.8%,
  primarily driven by a 2015 favorable impact from the reduction of a
  deferred tax valuation allowance in certain foreign jurisdictions that
  benefitted 2015 and did not repeat in 2016.
• Adjusted EBITDA was $419.4 million in 2016, a 13.0% increase, or 14.0%
  XFX, over 2015. On a Pro Forma basis, Adjusted EBITDA was $409.4
  million, a 9.5% increase, or 9.7% XFX.

Commenting on today’s announcement, Revlon President and Chief Executive
Officer, Fabian Garcia, said “I am encouraged by the progress we have
made since the acquisition of Elizabeth Arden, and enthusiastic about
the opportunities presented by our newly combined company’s enhanced
portfolio of brands, size, scale, profitability and international growth
momentum. On a Pro Forma, XFX basis, our Company grew net sales 1.4% for
2016 and increased Pro Forma Adjusted EBITDA 9.7% over last year. These
promising results were achieved despite foreign currency and
macroeconomic challenges, and while managing significant organizational
change.”

“All of our segments posted robust International constant currency net
sales growth in 2016; while we faced some specific challenges in North
America, as U.S. mass retailers were impacted by beauty consumption
shifting to specialty and online channels, particularly during the
year-end holiday season. Our strategy to drive long-term growth
continues to focus on strengthening our iconic brands, continuing to
build distribution in high growth channels, accelerating innovation and
enhancing our digital capabilities,” commented Mr. Fabian Garcia,
President & CEO.

Mr. Garcia continued, “The integration of our two companies, with a new
organizational structure and leadership team, better aligns our company
and resources in support of our strategy and long-term growth ambitions.
As we reported, focused efforts and careful planning by our integration
teams have resulted in significant increases to our previously-announced
estimated annualized synergies and cost reductions from $140 million to
approximately $190 million, which we plan to realize on an accelerated
timetable. In addition to capturing more cost synergies sooner, we have
also begun to explore, with some of our key customers, opportunities to
accelerate top line growth by leveraging the power of our larger,
combined portfolio of beauty brands.”

Elizabeth Arden Integration Program

On January 3, 2017, the Company announced that it had begun the process
of implementing certain integration activities, including consolidating
offices, eliminating certain duplicative functions and streamlining
back-office support, in connection with integrating the Elizabeth Arden
and Revlon organizations (the “EA Integration Restructuring Program”).
In connection with implementing the EA Integration Restructuring
Program, the Company expects to recognize approximately $65 million to
$75 million of total pre-tax restructuring and related charges (the
“Integration Restructuring Charges”).

As a result of the EA Integration Restructuring Program, as well as
other actions related to integrating the Elizabeth Arden organization
into the Company’s business (all together, the “Elizabeth Arden
Integration Program”), the Company has identified increased annualized
synergies and cost reductions of approximately $190 million. The $190
million of expected annualized synergies and cost reductions are
expected to be generated over a multi-year period. For 2016, the Company
realized approximately $3 million of these cost-reductions, which
primarily benefited the Elizabeth Arden segment results.

In 2016, the Company has incurred EA Integration Restructuring Charges
of $34.5 million and Elizabeth Arden acquisition and integration costs
of $40.7 million.

Full Year 2016 Results

All figures in the below discussion of segment and geographic results,
except where indicated, are presented on an XFX basis and in the case of
the Elizabeth Arden segment, on a Pro Forma basis as if Revlon and
Elizabeth Arden were a combined company for all of the periods
presented. The Company excludes certain unallocated corporate costs from
the definition of segment profit. See “Pro Forma Segment Profit
Reconciliation” attached to this release.

Segment Results

Pro Forma Adjusted net sales in 2015 excludes the impact of $13.0
million of returns and markdowns under the Elizabeth Arden 2014
Performance Improvement Plan^(c). The above
table has not been adjusted for the Unusual Items discussed in footnote
(a). Segment profit is defined in footnote (b) below.

Consumer Segment

Consumer segment net sales in 2016 increased by 0.7% compared to 2015,
primarily as a result of incremental net sales from the Company’s global
consolidation of the Cutex nail care brand, which was completed with two
separate acquisitions that closed for the U.S. in October 2015 and for
the U.K., Australia and certain other International territories in May
2016, as well as higher net sales of Revlon beauty tools and Mitchum
anti-perspirant deodorants, mostly offset by lower net sales of Almay
color cosmetics. Net sales of Revlon color cosmetics were essentially
flat, as a result of strong sales growth internationally, offset by
lower net sales in North America due to softening trade conditions in
core cosmetics categories.

Consumer segment profit in 2016 decreased by 2.3% compared to 2015,
partially due to a 2015 gain of $3.5 million related to the sale of a
non-core consumer brand. In addition, Consumer segment profit decreased
due to the unfavorable impact of FX transaction within cost of sales,
partially offset by decreased brand support on lower performing brands.

Professional Segment

Professional segment net sales in 2016 increased by 2.4% compared to
2015, primarily due to higher net sales of American Crew men’s grooming
products as a result of the Elvis Presley branded marketing campaign and
Revlon Professional hair products in part due to the launch of Revlon
Professional Be Fabulous and Revlonissimo Colorsmetique. These increases
were partially offset by lower net sales of CND nail products.

Professional segment profit in 2016 decreased by 3.4% compared to 2015,
primarily resulting from the absence in 2016 of a $3.0 million gain
related to the sale of a non-core professional brand that was completed
in 2015. Excluding this gain, Professional segment profit would have
been essentially flat.

Elizabeth Arden Segment

Elizabeth Arden segment Pro Forma net sales in 2016 increased by 1.8%
compared to 2015, primarily driven by increased net sales of Elizabeth
Arden skin care and color cosmetics, partially offset by lower net sales
of celebrity fragrances.

Elizabeth Arden Pro Forma segment profit in 2016 increased by 46.3%
compared to 2015, primarily driven by higher net sales, coupled with
lower cost of goods sold as a result of cost reduction initiatives, as
well as the favorable impact of product and channel mix.

Other Segment

The Other segment primarily includes the operating results of the CBB
fragrance business. Net sales in 2016 increased by 4.9% compared to
2015, primarily due to net sales associated with newly-acquired
distribution rights in Europe.

Other segment profit in 2016 decreased compared to 2015 primarily due to
higher packaging and design expenses. Other segment profit does not
include the impairment charges of $23.4 million recognized in 2016, and
discussed further below.

As a result of the Company’s annual impairment testing, the Company
recognized $23.4 million in non-cash impairment charges attributable to
its Other segment during the fourth quarter of 2016. Of this amount,
$16.7 million related to goodwill and $6.7 million related to intangible
assets acquired in the CBB Acquisition. These non-cash impairment
charges are primarily due to the Company’s expectations regarding the
future performance of the Other segment, in relation to the carrying
amounts of CBB’s goodwill and acquired intangible assets. The driver
behind the decline in the Other segment’s future operating expectations
was the result of the termination of certain fragrance licenses that
were not replaced.

Geographic Net Sales

Pro Forma Adjusted net sales in 2015 excludes the impact of $13.0
million of returns and markdowns under the Elizabeth Arden 2014
Performance Improvement Plan^(c).

Consumer Segment

North America

In the Consumer segment, North America net sales in 2016 decreased by
4.0% compared to 2015, primarily as a result of softening trade
conditions in core categories which impacted Revlon color cosmetics and
Almay color cosmetics, as well as increased competition impacting Revlon
ColorSilk hair color. These decreases were partially offset by
incremental net sales in connection with the Company completing the
global consolidation of the Cutex nail care brand, as well as higher net
sales of Revlon beauty tools.

International

In the Consumer segment, International net sales in 2016 increased by
9.4% compared to 2015, primarily driven by higher net sales of Revlon
color cosmetics and Revlon ColorSilk hair color, as well as incremental
net sales from Cutex nail care products. From a geographic perspective,
the increase in International net sales was mainly attributable to
higher net sales in Argentina, the U.K. and Mexico.

Professional Segment

North America

In the Professional segment, North America net sales in 2016 increased
by 1.9% compared to 2015, primarily driven by increased net sales of
American Crew men’s grooming products as a result of the Elvis Presley
branded marketing campaign as well as Creme of Nature hair products,
offset by lower net sales of CND nail products.

International

In the Professional segment, International net sales in 2016 increased
by 2.7% compared to 2015, primarily driven by increased net sales of
Revlon Professional hair products, in part due to the launch of Revlon
Professional Be Fabulous, as well as an increase in net sales of
American Crew men’s grooming products throughout most of the
International region. These increases were partially offset by lower net
sales of CND nail products.

Elizabeth Arden Segment

North America

In the Elizabeth Arden segment, North America Pro Forma net sales in
2016 decreased by 1.4% compared to Pro Forma Adjusted net sales in 2015,
primarily driven by decreased net sales of fragrances sold within the
mass-retail channel, partially offset by higher net sales of Elizabeth
Arden skin care products.

International

In the Elizabeth Arden segment, International Pro Forma net sales in
2016 increased by 6.6% compared to Pro Forma Adjusted net sales in 2015,
primarily driven by higher net sales of Elizabeth Arden branded products
in the Asia Pacific and Europe regions, as well as higher net sales of
designer fragrances in Asia and EMEA.

Total Company Results

In calculating Adjusted results, adjustments were made for the
Non-Operating and Unusual Items described in footnote (a). Refer to the
chart on page 1 of this release for the As Reported, Adjusted and Pro
Forma Adjusted results that are discussed below.

On an XFX basis, Pro Forma Adjusted EBITDA in 2016 increased by 9.7%
compared to 2015, driven by improved profitability of the Elizabeth
Arden segment, as well as lower non-restructuring severance in 2016.

Pro Forma Adjusted income from continuing operations, before income
taxes, was $82.5 million in 2016, compared to $57.6 million in 2015, an
improvement of 43.2%, driven by the drivers for Adjusted EBITDA
discussed above, partially offset by higher depreciation and
amortization expense in 2016.

Cash Flow for the Full Year Period

Net cash provided by operating activities in 2016 was $116.9 million,
compared to net cash provided by operating activities of $155.3 million
in 2015, representing a $38.4 million decrease. Free cash flow in 2016
was $58.1 million, compared to $113.2 million provided in 2015,
representing a $55.1 million decrease. These decreases were primarily
driven by the payment of acquisition and integration costs in 2016,
higher interest payments in 2016 as a result of increased debt incurred
in connection with the Elizabeth Arden acquisition, as well as the
timing of certain accounts payable disbursements and accounts receivable
collections at the end of 2015 compared to 2016.

Fourth Quarter 2016 Results

On an As Reported basis, total Company net sales were $800.7 million in
the fourth quarter of 2016, compared to $521.9 million in the fourth
quarter of 2015, an increase of $278.8 million, or 53.4%. On a Pro Forma
basis, total Company net sales decreased by 4.5%, or 2.7% XFX, in the
fourth quarter of 2016, compared to the prior year quarter.

All figures in the below discussion of segment and geographic results,
except where indicated, are presented on an XFX basis and in the case of
the Elizabeth Arden segment, on a Pro Forma basis as if Revlon and
Elizabeth Arden were a combined company for all of the periods
presented. The Company excludes certain unallocated corporate costs from
the definition of segment profit. See “Pro Forma Segment Profit
Reconciliation” attached to this release.

Segment Results

The above table has not been adjusted for the Unusual Items discussed
in footnote (a). Segment profit is defined in footnote (b) below.

Consumer Segment

Consumer segment net sales in the fourth quarter of 2016 decreased by
3.3% compared to the prior year quarter, primarily as a result of lower
net sales of Revlon color cosmetics and Almay color cosmetics in the
U.S., primarily offset by incremental net sales from the Company’s
global consolidation of the Cutex nail care brand, as well as initial
sales from the launch of CND Vinylux in the mass-retail channel.

Consumer segment profit in the fourth quarter of 2016 increased by 1.3%
compared to the prior year quarter, primarily driven by decreased brand
support on lower performing brands, mostly offset by the decline in net
sales.

Professional Segment

Professional segment net sales in the fourth quarter of 2016 increased
by 1.8% compared to the prior year quarter, primarily due to higher net
sales of American Crew men’s grooming products and Revlon Professional
hair products, partially offset by lower net sales of CND nail products.

Professional segment profit in the fourth quarter of 2016 was
essentially flat compared to the prior year quarter.

Elizabeth Arden Segment

Elizabeth Arden segment net sales in the fourth quarter of 2016
decreased by 2.0% compared to the prior year quarter, primarily driven
by decreased net sales of celebrity and designer fragrances, partially
offset by higher net sales of Elizabeth Arden skin care products, led by
Elizabeth Arden Ceramides.

Elizabeth Arden Pro Forma segment profit in the fourth quarter of 2016
decreased slightly by 1.8% compared to the prior year quarter.

Other Segment

Other segment net sales in the fourth quarter of 2016 decreased by 38.2%
compared to the prior year quarter, primarily due to lower net sales of
celebrity fragrances.

Other segment profit in the full year of 2016 decreased by $4.7 million
compared to the prior year quarter, primarily due to lower net sales, as
well as higher packaging and design expenses.

Geographic Net Sales

Consumer Segment

North America

In the Consumer segment, North America net sales in the fourth quarter
of 2016 decreased by 9.0% compared to the prior year quarter, primarily
as a result of softening trade conditions in core categories which
impacted Revlon color cosmetics and Almay color cosmetics. These
decreases were partially offset by initial sales from the launch of CND
Vinylux in the mass-retail channel.

International

In the Consumer segment, International net sales in the fourth quarter
of 2016 increased by 6.7% compared to the prior year quarter, primarily
driven by higher net sales of Revlon color cosmetics and Revlon
ColorSilk hair color, as well as incremental net sales from Cutex nail
care products. From a geographic perspective, the increase in
International net sales was mainly attributable to higher net sales in
Argentina and certain distributor territories.

Professional Segment

North America

In the Professional segment, North America net sales in the fourth
quarter of 2016 increased by 2.4% compared to the prior year quarter,
primarily driven by increased net sales of American Crew men’s grooming
products.

International

In the Professional segment, International net sales in the fourth
quarter of 2016 increased by 1.4% compared to the prior year quarter,
primarily driven by an increase in net sales of American Crew men’s
grooming products and Revlon Professional hair products throughout most
of the International region, partially offset by lower net sales of CND
nail products.

Elizabeth Arden Segment

North America

In the Elizabeth Arden segment, North America Pro Forma net sales in the
fourth quarter of 2016 decreased by 7.8% compared to the prior year
quarter, primarily driven by decreased net sales of designer, celebrity
and heritage fragrances, partially offset by higher net sales of
Elizabeth Arden skin care products.

International

In the Elizabeth Arden segment, International Pro Forma net sales in the
fourth quarter of 2016 increased by 8.3% compared to the prior year
quarter, primarily driven by higher net sales of Elizabeth Arden skin
care in China and heritage fragrances in Europe, partially offset by
lower net sales of Elizabeth Arden fragrances in the Middle East and
South Africa.

Other Segment

International

In the Other segment, net sales during the fourth quarter of 2016
decreased by 38.2%, primarily driven by lower net sales of celebrity
fragrances.

Total Company Pro Forma Results

In calculating Adjusted results, adjustments were made for the
Non-Operating Items and Unusual Items described in footnote (a).

Total Company Pro Forma Adjusted EBITDA in the fourth quarter of 2016
was $149.4 million, compared to $147.8 million in the prior year
quarter, an increase of 1.1%, or 3.9% XFX.

Pro Forma Adjusted income from continuing operations, before income
taxes, was $54.8 million in the fourth quarter of 2016, compared to
$61.

Contacts

Revlon, Inc.
Investor Relations:
Siobhan
Anderson 212-527-5230
or
Media Relations:
Pamela
Alabaster 212-527-5863

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