Puig recovers pre-pandemic sales and returns to profit | Economy

The pandemic made it necessary to maintain social distance and cover a large part of the face with a mask. Perfumes and makeup stopped making much sense, and the blow was felt in Puig, the Catalan multinational that brings together brands such as Paco Rabanne, Carolina Herrera or Charlotte Tilbury. For the first time in its history, in 2020 it recorded losses. But the results of 2021, presented this Monday, show that this bump has been left behind: Puig returned to profits last year and earned 234 million euros, while he obtained record sales of 2,585 million. These figures allow this family company to be optimistic in its forecasts, although it admits that the increase in costs due to inflation has already been transferred to product prices.

“The year of the pandemic was a total stagnation, it completely impacted the world of color cosmetics and perfumery. Now we return to reunions, we see that people want to go out again and recover social interaction”, summarized Marc Puig, CEO of the group and member of the third generation of the family that heads the company. In 2020, the company recorded losses of 70 million euros and billed 1,537 million, 24% less than in 2019. Last year’s sales imply a growth of 68% compared to the year of the pandemic, of which Puig highlighted that it is a record figure —which not only recovers the pre-pandemic level but also exceeds it—, as well as the profit before taxes, of 365 million.

The pandemic bump came just as the group embarked on its transformation. The company designed a strategic plan to adjust to the changes that the sector itself has experienced. In Puig, perfumery brands predominated, followed by make-up and skin products, contrary to what prevails in the sector and how demand has evolved. “We want our photo of the distribution of the cake to fit more and more into the photo that the sector has, where the skin is the most important, the makeup the second and the perfumery the third”, highlighted the CEO. The goal is that by 2025 makeup products account for 23% of total sales, and for this, in June 2020, the purchase of the makeup brand Charlotte Tilbury was made official, an operation that Bloomberg then estimated at 900 million .

The strategic plan, presented in 2020, also included the forecast of doubling turnover in two years (up to 3,000 million) and tripling it in five (up to 4,500 million). “At the moment we have already exceeded the forecasts and in 2022, a year earlier than we said, we hope to achieve a turnover of 3,000 million. We have fulfilled all the commitments that we have been acquiring, except in 2020″, Puig underlined. “From now on”, the CEO pointed out, both make-up and dermocosmetics – where Puig’s participation in the Isdin company stands out – “will continue to grow, after carrying out the strategic change”. This will happen by promoting its brands, although the company does not rule out that it can continue to grow in an inorganic way: “We come from a very significant acquisition, and therefore we need time to digest, but it should not surprise us that by 2025 there may be new acquisitions”. The debt, Puig has detailed, is below 0.5 times the Ebitda (which in 2021 was 425 million).

Nor is it ruled out to divest in some products or sell local and less significant brands in the perfumery segment. With regard to the countries in which the group is present, the United States continues to be the first market and has experienced significant growth, with an increase of 104% in sales compared to 2020. The United Kingdom and Spain are the second and third market, while China is the fastest growing, with an increase of 212%. The pandemic also boosted the channel on-linewhich last year accounted for 28% of sales.

Despite the good results, the challenges continue, now in the form of an increase in inflation and the consequences that the war in Ukraine may have. Puig has ruled out that the conflict has a very large direct impact on his business, since “the Eastern European markets are not very important for the group”, but he has admitted an increase in costs due to supply problems, which They have already moved on to the prices. “Our product is an affordable, self-esteem-boosting luxury, and at this time when people want to go out again, there is demand. So I don’t think a price increase will have much of an impact on sales,” she said.