Avon Completes Sale of China Manufacturing Operation

Concrete Steps to Increase Competitiveness and Accelerate Growth of Asian Region

Avon Delivers on its Commitment to "Open Up" its Global Infrastructure

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Feb 22, 2019, 07:30 ET

LONDON, Feb. 22, 2019 /PRNewswire/ -- Avon Products, Inc. (NYSE: AVP) ("the Company"), a globally recognised leader in direct selling of beauty products, today announced it completed the sale of its China manufacturing facility to TheFaceShop Co., Ltd., a subsidiary of LG Household & Health Care Ltd., one of Asia's largest consumer goods and beauty companies. TheFaceShop has acquired all of the shares of Avon's beauty manufacturing operation in Guangzhou, China. Net proceeds (pre-tax) to Avon are approximately $47 million.

As previously announced, the companies have entered into a manufacturing and supply agreement, under which the Guangzhou factory will manufacture products for Avon's fast-growing Chinese business and other markets, while maximizing the capacity of the plant for its own production. Avon's associates at the facility will remain with the operation.

The closing of the sale is a concrete step in Avon's "Open Up" transformation plan, key to which is a strategic shift to build more relationships with best in class partners. This is one example of measures Avon is taking to manufacture and deliver products more efficiently, to deliver a more agile and improved service to its millions of beauty entrepreneurs and their customers around the world.

Jan Zijderveld, CEO of Avon, said, "We are very pleased to complete this transaction and see it as a significant step in our efforts to "Open Up Avon." The more local structure better fits our purpose and better positions us to grow in China and the wider Asian market.

Mr. Zijderveld continues, "2019 is the year for Avon to execute against its initiatives. In addition to the sale of our China facility, we have recently announced several tangible initiatives to operate a more efficient, leaner and agile global infrastructure, including a 10% global headcount reduction and a 25% SKU reduction in 2019. We will continue to look at our assets and infrastructure and determine the optimal structure as we move forward."

About Avon Products, Inc.
For 130 years Avon has stood for women: providing innovative, quality beauty products which are primarily sold to women, through women. Millions of independent sales Representatives across the world sell iconic Avon brands such as Avon Color and ANEW through their social networks, building their own beauty businesses on a full- or part-time basis. Avon supports women's empowerment, entrepreneurship and well-being and has donated over $1billion to women's causes through Avon and the Avon Foundation. Learn more about Avon and its products at www.avonworldwide.com. #Stand4Her

About LG Household & Health Care Ltd.
LG Household & Health Care (LG H&H) is the #1 consumer goods company in Korea, with leading positions in all major categories including cosmetics, personal care, home care and beverages. The company is listed on the Korea Stock Exchange with a market capitalization of USD 18 billion as of December 1, 2018 and full-year revenue is approximately USD 6 billion (based on Bloomberg Estimates). In recent years, LG H&H has accelerated expansion beyond Korea, with leading luxury cosmetics brands such as 'The history of Whoo', 'su:m' and 'belif', and is now within the top 10 global cosmetics companies in Asia.

Forward-Looking Statements
This press release contains "forward-looking statements" that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements relating to the Company's transformation plan and its strategy and future growth in Asia. Because forward-looking statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the possibility of business disruption, competitive uncertainties, and general economic and business conditions in Avon's markets as well as the other risks detailed in Avon's filings with the Securities and Exchange Commission. Avon undertakes no obligation to update any statements in this press release for changes that happen after the date of this release.

SOURCE Avon Products, Inc.