Puig Returns to Strong Growth, Raises 2022 Guidance

PARIS — Puig beauty and fashion group returned to pre-pandemic growth levels in 2021, spurred by a confluence of factors, including strong gains in the U.S. and China, and from all three of its divisions.

After better-than-expected results last year, the family-owned Spanish company now expects to reach revenues of more than 3 billion euros in 2022, 12 months ahead of its plan.

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“We benefited from a number of structural, strategic decisions we had taken in 2020, in the middle of the pandemic,” said Marc Puig, chairman and chief executive officer of Puig, referring, for instance, to having ramped up the company’s makeup and skin care activities. He also noted “the incredible recovery in some markets — the U.S., clearly. We increased market share in most of our activities and most of our markets.”

In 2021, Puig’s net profits were 234 million euros, versus a net loss of 70 million euros the prior year. Its earnings before interest, taxes, depreciation and amortization reached 425 million euros, a 357 percent rise against 2020 and a 27 percent increase compared to 2019.

The company’s net sales came in at 2.59 billion euros, a 68 percent gain in reported terms and 40 percent growth on a like-for-like basis, had the company’s Charlotte Tilbury Division and Derma Division, with Uriage and Apivita, been a part of Puig throughout 2020.

Compared with 2019, the group registered 27 percent sales growth. Spurring the revenue gains in 2021 were its Derma Division’s incorporation and the acquisition of Charlotte Tilbury in June 2020. Also positively contributing was the recovery of the Europe, Middle East and Africa zone, Asia and 75 percent growth in the Americas. The U.S. became Puig’s number-one market, where sales soared 104 percent.

Last year marked the first time Puig operated with three divisions ­— the Beauty and Fashion Division, as well as the Charlotte Tilbury and Derma Divisions — and served as the kickoff of the 2021-23 strategic plan.

In 2020, Puig had for the first time in recent history closed the year with a loss. Because of lockdowns and social distancing due to the coronavirus pandemic, consumption of makeup, fragrance and fashion were greatly reduced, and brick-and-mortar retail shuttered. Still, Puig said in late April 2021 that it aimed for its sales to double in three years and to triple in five years.

The group noted that in 2021, its fashion and fragrance businesses combined advanced 41 percent to 1.9 billion euros, bolstered by the fragrance category’s recovery in zones such as the EMEA region and successful perfume launches, like Paco Rabanne’s Phantom and Jean Paul Gaultier’s Scandal pour Homme.

There was strong fragrance sales growth in the U.S., driven by Carolina Herrera’s Good Girl scent. Puig said its niche fragrance category, which includes Penhaligon’s, L’Artisan Parfumeur and Christian Louboutin, has increased in importance within the company.

Puig remains the world’s fifth largest fragrance-maker, with almost 10 percent market share. Among the fragrance brands in its portfolio, Paco Rabanne ranks fifth, Carolina Herrera seventh and Jean Paul Gaultier 18th worldwide.

In fashion, the Dries Van Noten business maintained its sales levels of 2019, despite the health crisis. The brand last year opened its first stores in China and its premier location in the U.S., in Los Angeles.

“And there will be more,” said Puig, noting that the brand’s e-commerce launched one month ago.

Puig’s makeup sales, bolstered by the Charlotte Tilbury business, alongside the Christian Louboutin color cosmetics activity, saw sales grow 153 percent on a reported basis and 58 percent in like-for-like terms to 413 million eros. That was also driven by geographic expansion, including new sales points in the U.S. and China.

Puig’s dermocosmetics activity posted sales up 954 percent in reported terms and 18 percent on a like-for-like basis to 274 million euros. The branch, which includes Uriage, Apivita and Charlotte Tilbury, developed its presence in Europe and furthered its international reach in Asia.

Puig’s revenues in Asia were 248 million euros, up 107 percent, while in China, sales climbed 212 percent — the largest increase the company posted in any market.

“It’s in our top 10,” said Puig, adding it won’t be long until China is among the group’s top three markets.

Puig’s sales were up 75 percent in the Americas to 839 million euros, and 60 percent to 1.5 billion euros in the EMEA zone, which showed recovery.

Puig’s digital business remained robust, generating 28 percent of its overall revenues, while travel retail continued to be under pressure, due to ongoing travel restrictions. The channel is expected to recover fully in 2023 or 2024, the executive said.

Just as Puig stepped up its sales guidance by one year, so, too, did it for the EBITDA, which is now expected to exceed 500 million euros in 2022.

The group, which sells products in 150 countries and operates 27 subsidiaries, reaffirmed its aim to triple the net revenues of 2020 by 2025, as well.

Levers of growth will include expanding the company’s digital business; Puig’s growth in Asia, especially China, due to Charlotte Tilbury and the niche brands; more diversification in the color cosmetics and dermocosmetics segments, and travel retail’s gradual recovery.

Puig plans to continue working with entrepreneurs and founders. More acquisitions could be in the offing, possibly in the niche territory or skin care.

“We try to make sure that we have a house of brands and that each of these brands — big or small — really has a reason to be, a story to tell, a soul that you can be proud of and that can be clearly differentiated but also something worth fighting for,” Puig said.

The company in 2021 launched its 2030 agenda related to the environment, society and governance. That aims to help limit global warming by 1.5 degrees centigrade. The agenda is focused on emissions; materials; ingredients and waste; biodiversity; water, and fair sourcing.

Along with creating several ESG governance mechanisms, including an ESG committee and chief sustainability officer position, the group in June joined the United National Global Compact. Puig aligned with other international standards, such as the Paris Agreement on climate change and the EU Action Plan for the Circular Economy.

In receiving an A- from the Carbon Disclosure Project, Puig figured among the top 6 percent of rated companies including more than 13,000 from around the globe. EcoVadis, which provides corporate sustainability qualifications, ranked Pug in the top 5 percent of more than 90,000 companies evaluated.

Puig’s Invisible Beauty Makers social action program, in its seventh edition, now includes a section in which social entrepreneurship, Puig and its brands can work together and cocreate to maximize their social impact.

“It’s an exciting moment for this company,” Puig said.


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