Avon 2015 Annual Report Download - page 9

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Invest in Growth. We will invest in our brand through an increase in media spend as well as
a shift of our media mix to a greater focus on digital. We will also continue to execute Avon’s
Beauty for a Purpose brand program, which we launched in 2015 to a very positive response.
We’re investing to improve the earnings and experience of our Representatives. This includes
segmentation strategies to better meet each Representative’s needs and signifi cant improvements
in the service model. We will also invest to contemporize our model through social selling.
Drive out Cost. Over three years, we will reduce our cost base by $350 million. We announced
significant changes in our operating model in March that include reduction in our corporate
infrastructure, the transition of Avon’s Corporate headquarters to the United Kingdom, and
headcount reductions of approximately 2,500 filled and open positions. These changes are
expected to deliver $50 million of the $70 million savings committed to in 2016. The team has
identified additional areas of opportunity to close the remaining savings gap and is creating the
plans to capture those additional savings for the year.
Improve Financial Resilience. In 2015, we took steps to improve our financial flexibility, including
the renegotiation of our working capital facility, the divestiture of the Liz Earle business, and the
suspension of the dividend. We will continue this work with focus on shifting our cost base out
of hard currencies to better match our revenue portfolio, repaying debt in 2016 if the opportunity
is appropriate, and identifying additional tax-planning opportunities.
LOOKING TO THE FUTURE
Avon has a very strong foundation to build on. We participate in attractive and growing categories
and markets. We have high-quality, innovative products and strong Research & Development
capabilities. We have a growing Representative base and leadership positions in key international
markets and beauty categories. The Avon brand is iconic and purpose driven.
We have mapped out a clear path forward for Avon with our three-year transformation plan and
are executing against that plan with speed and rigor.
2016 is a special year for Avon as it marks our 130th anniversary. We’re very proud of our
heritage and of the positive impact we have had on millions of women’s lives. I am confident
that the steps we are taking will build shareholder value and also ensure Avon’s relevance for
generations to come.
Thank you,
Sheri McCoy
Chief Executive Offi cer
April 2016
We will strengthen Avon’s position as a leader in beauty,
unleash the power of the Avon network, and introduce a new
generation of women to a brand we know they will love.