NEW YORK, Nov. 18, 2014 /PRNewswire/ -- Avon Products,
Inc. (NYSE: AVP) today announced a series of changes to the
company's management structure designed to support its multiyear
turnaround plan.
"To return the Avon business to
sustainable, profitable growth, we continue to improve processes,
reduce cost, and invest in our top markets," said Sheri McCoy, Chief Executive Officer of Avon
Products, Inc.
Avon's Latin America management responsibilities will
be divided between two Avon
executives who will each oversee a defined set of markets within
the region. David Legher, currently Senior Vice President and
President of Avon Brazil, will assume additional responsibility for
the South Market Group*. Mr. Legher will report directly
to Ms. McCoy and join Avon's
Executive Committee. Fernando
Acosta, currently Senior Vice President and President,
Latin America, will retain
responsibility for North Latin
America and the Andean Cluster**.
"Latin America is our largest
region representing more than half of our annual revenue. Driving
growth in our Latin American markets is a top priority for
Avon, and adjusting the business
management responsibilities between two seasoned Avon executives will allow for better
management focus and sustained growth," said Ms. McCoy. "David has
a deep knowledge of the Avon
business, particularly in Latin
America, and he will add a strong market perspective to the
Executive Committee."
Mr. Legher is a 13-year veteran of Avon having held positions of increasing
responsibility throughout Avon Latin America, leading up to
management of the company's largest market, Avon Brazil. Mr. Legher
will maintain his responsibility for the Brazilian
market.
This change will not impact Avon's financial reporting structure.
To accelerate the pace of improvement in its two core processes
of commercial marketing and field management, Avon also announced changes in the marketing
organization and increased support of the sales organizations in
its key markets.
Mr. Acosta, in addition to his management responsibilities in
North Latin America and the Andean
Cluster, will take on additional responsibility as Avon's Head of Global Brand Marketing. In this
role, he will lead all global marketing activities, including
brand, product category strategy, and research & development.
He continues to report to Ms. McCoy and serve on the company's
Executive Committee.
Mr. Acosta has led Avon's
Latin America region for more than
three years. Prior to joining Avon, he spent 19 years at Unilever where he
advanced through a series of senior marketing and operating
positions for some of Unilever's most prominent brands.
"We've made progress on both brand and product category
management over the past two years, and this next step will allow
us to continue our work to elevate the Avon brand and better
innovate and invest in our top markets," said Ms. McCoy. "Fernando
has a unique combination of expertise in both business operations
and global brand management that will serve us well in successfully
activating on the local level across all geographies."
Patricia Perez-Ayala, currently,
Senior Vice President, Chief Marketing Officer, and Global Brand
& Category President, will be leaving Avon effective January
2, 2015.
John Higson, currently Senior
Vice President & President, Europe, Middle
East, Africa (EMEA), will
take on an expanded role as Head of Global Field Operations. In
this capacity, he will provide assessment and advisory support to
the sales teams in Avon's top 12
markets, aiming to accelerate the onboarding for Sales Heads new to
their role and improve the Avon
pipeline to ensure more "ready now" successors for key field
management assignments. Mr. Higson will maintain responsibility for
the Avon EMEA business unit. He continues to report to Ms.
McCoy and serve on the company's Executive Committee.
"John's expanded management role will allow for more direct
engagement with our field sales operations globally, and will help
us to identify and remediate any potential field issues," said Ms.
McCoy. "Having someone with John's depth of experience in this role
will provide a consistent lens for our ongoing efforts to
innovate our social selling model."
During his 29-year career at Avon, Mr. Higson has held a variety of sales,
strategy and general management assignments.
The Company also announced additional actions relating to its
previously disclosed $400 million
cost savings initiative. These actions primarily consist of
initiatives relating to improving supply chain efficiencies,
including contract terminations, as well as global headcount
reductions, and are expected to result in annualized pre-tax
savings of approximately $40 million.
Total pre-tax charges to be recorded as a result of these actions
are expected to be approximately $45
million, with approximately $30 to
$35 million expected to be recorded in the fourth quarter of
2014.
Avon, the company for women, is
a leading global beauty company, with $10
billion in annual revenue. As one of the world's largest
direct sellers, Avon is sold
through more than 6 million active independent Avon Sales
Representatives. Avon products are
available in over 100 countries, and the product line includes
color cosmetics, skincare, fragrance, and fashion and home
products, featuring such well-recognized brand names as Avon Color,
ANEW, Skin-So-Soft, Advance Techniques, and mark. Learn more about
Avon and its products at
www.avoncompany.com.
*The South Market Group includes Argentina, Chile, and Uruguay.
** North Latin America
includes Mexico, El Salvador, Guatemala, Honduras, Nicaragua, Panama, and Dominican Republic. The Andean Cluster is
comprised of Colombia,
Peru, Ecuador, and Venezuela.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR"
STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
Statements in this release that are not historical facts or
information may be forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Words such as
"expect," "will" and similar expressions, or the negative of those
expressions, may identify forward-looking statements. They include,
among other things, statements regarding our anticipated or
expected results, future financial performance, various strategies
and initiatives (including our stabilization strategies, cost
savings initiatives, multi-year restructuring programs and other
initiatives and related actions), and costs and cost savings. Such
forward-looking statements are based on management's reasonable
current assumptions, expectations, plans and forecasts regarding
the Company's current or future results and future business and
economic conditions more generally. Such forward-looking statements
involve risks, uncertainties and other factors, which may cause the
actual results, levels of activity, performance or achievement of
Avon to be materially different
from any future results expressed or implied by such
forward-looking statements, and there can be no assurance that
actual results will not differ materially from management's
expectations. Such factors include, among others, the
following:
- our ability to improve our financial and operational
performance and execute fully our global business strategy,
including our ability to implement the key initiatives of, and
realize the projected benefits (in the amounts and time schedules
we expect) from, our stabilization strategies, cost savings
initiatives, multi-year restructuring programs and other
initiatives, product mix and pricing strategies, enterprise
resource planning, customer service initiatives, sales and
operation planning process, outsourcing strategies, Internet
platform and technology strategies including e-commerce, marketing
and advertising strategies, information technology and related
system enhancements and cash management, tax, foreign currency
hedging and risk management strategies, and any plans to invest
these projected benefits ahead of future growth;
- the possibility of business disruption in connection with our
stabilization strategies, cost savings initiatives, multi-year
restructuring programs, or other initiatives;
- our ability to reverse declining revenue, margins and net
income, particularly in North
America, and to achieve profitable growth, particularly in
our largest markets, such as Brazil, and developing and emerging markets,
such as Mexico and Russia;
- our ability to improve working capital and effectively manage
doubtful accounts and inventory and implement initiatives to reduce
inventory levels, including the potential impact on cash flows and
obsolescence;
- our ability to reverse declines in Active Representatives, to
enhance our sales Leadership programs, to generate Representative
activity, to increase the number of consumers served per
Representative and their engagement online, to enhance branding and
the Representative and consumer experience and increase
Representative productivity through field activation programs and
technology tools and enablers, to invest in the direct-selling
channel, and to compete with other direct-selling organizations to
recruit, retain and service Representatives and to continue to
innovate the direct-selling model;
- general economic and business conditions in our markets,
including social, economic and political uncertainties in the
international markets in our portfolio, such as in Russia and Ukraine, and any potential sanctions,
restrictions or responses to such conditions imposed by other
markets in which we operate;
- the effect of economic factors, including inflation and
fluctuations in interest rates and currency exchange rates, as well
as the designation of Venezuela as
a highly inflationary economy and the devaluation of its currency,
the availability of various foreign exchange systems including
limited access to SICAD II in Venezuela, foreign exchange restrictions,
particularly currency restrictions in Venezuela and Argentina, and the potential effect of such
factors on our business, results of operations and financial
condition;
- any developments in or consequences of investigations and
compliance reviews, and any litigation related thereto, including
the ongoing investigations and compliance reviews of Foreign
Corrupt Practices Act ("FCPA") and related United States ("U.S.") and foreign law matters
in China and additional countries,
as well as any disruption or adverse consequences resulting from
such investigations, reviews, related actions or litigation,
including our ability to finalize settlements with the United
States Securities and Exchange Commission ("SEC") and the United
States Department of Justice ("DOJ") with regard to the ongoing
FCPA investigations on terms consistent with our current
understandings with the government or, if we are able to reach such
final settlements, what the timing of such final settlements will
be or whether the SEC settlement will be authorized by the
Commission or whether each of the settlements will receive the
necessary court approvals, or if we are unable to reach such final
settlements, the outcome of any subsequent litigation with the
government which could have a material adverse effect;
- a general economic downturn, a recession globally or in one or
more of our geographic regions, or sudden disruption in business
conditions, and the ability of our broad-based geographic portfolio
to withstand an economic downturn, recession, cost inflation,
commodity cost pressures, economic or political instability,
competitive or other market pressures or conditions;
- the effect of political, legal, tax and regulatory risks
imposed on us in the U.S. and abroad, our operations or our
Representatives, including foreign exchange, pricing, data privacy
or other restrictions, the adoption, interpretation and enforcement
of foreign laws, including in jurisdictions such as Brazil, Russia, Venezuela and Argentina, and any changes thereto, as well as
reviews and investigations by government regulators that have
occurred or may occur from time to time, including, for example,
local regulatory scrutiny in China;
- the impact of changes in tax rates on the value of our deferred
tax assets, and declining earnings, including the amount of any
domestic source loss and the type, jurisdiction and timing of any
foreign source income, on our ability to realize foreign tax
credits in the U.S.;
- competitive uncertainties in our markets, including competition
from companies in the cosmetics, fragrances, skincare and
toiletries industry, some of which are larger than we are and have
greater resources;
- the impact of the adverse effect of rising energy, commodity
and raw material prices, changes in market trends, purchasing
habits of our consumers and changes in consumer preferences,
particularly given the global nature of our business and the
conduct of our business in primarily one channel;
- our ability to attract and retain key personnel;
- other sudden disruption in business operations beyond our
control as a result of events such as acts of terrorism or war,
natural disasters, pandemic situations, large-scale power outages
and similar events;
- key information technology systems, process or site outages and
disruptions, and any cyber security breaches, including any
security breach of our systems or those of a third-party provider
that results in the theft, transfer or unauthorized disclosure of
customer, employee or company information or compliance with
information security and privacy laws and regulations in the event
of such an incident which could disrupt business operations, result
in the loss of critical and confidential information, and adversely
impact our reputation and results of operations, and related costs
to address such malicious intentional acts and to implement
adequate preventative measures against cyber security
breaches;
- the risk of product or ingredient shortages resulting from our
concentration of sourcing in fewer suppliers;
- the impact of any significant restructuring charges or
significant legal or regulatory settlements on our ability to
comply with certain covenants in our debt instruments;
- any changes to our credit ratings and the impact of such
changes on our financing costs, rates, terms, debt service
obligations, access to lending sources and working capital
needs;
- the impact of our indebtedness, our access to cash and
financing, and our ability to secure financing or financing at
attractive rates;
- the impact of possible pension funding obligations, increased
pension expense and any changes in pension regulations or
interpretations thereof on our cash flow and results of
operations;
- our ability to successfully identify new business
opportunities, strategic alliances and strategic alternatives and
identify and analyze alliance and acquisition candidates, secure
financing on favorable terms and negotiate and consummate alliances
and acquisitions, as well as to successfully integrate or manage
any acquired business;
- disruption in our supply chain or manufacturing and
distribution operations;
- the quality, safety and efficacy of our products;
- the success of our research and development activities;
- our ability to protect our intellectual property rights;
and
- the risk of an adverse outcome in any material pending and
future litigation or with respect to the legal status of
Representatives.
Additional information identifying such factors is contained in
Item 1A of our 2013 Form 10-K, as updated by our Quarterly Report
on Form 10-Q for the quarterly period ended March 31, 2014, and other reports and documents
we file with the SEC. We undertake no obligation to update any such
forward-looking statements.
SOURCE Avon Products, Inc.