Splash Corp 1Q ’08 Net Income Up 14%

July 2008

Listed personal care manufacturer Splash Corp. posted a net income of P44.65 million in the first quarter of this year ending March 31, up 14% over the same period in 2007.

Net sales in the period were up 7%, driven by new skin and facial care product introductions. Net sales in the first three months were up P39.9 million year-on-year to P627.7 million from P587.8 million over the same period last year.

Mr. Jessin Soriano, Splash Corp. President & Chief Operating Officer said in a statement that Splash Corp. continued to lead in market share for anti-aging, exfoliants, and whitening products.

The Company’s core brands, Maxipeel, Extraderm, Skin White, and Kolours are dominant market leaders in their respective categories.

Sales last year topped P3 billion, up 21% over 2006, with skin care products accounting for close to a third of its net sales. Net operating income hit P317 million, a hefty 44% growth over that of 2006.

Soriano said that the company’s net income and sales performance were “concrete manifestation of the collective efforts that the Splash organization put into in order to fulfil the commitments we made to our investors and stakeholders.”

Splash launched 14 major products last year which contributed 16% of total sales. This represents a 174% growth over that of last year. “The significant contribution of our new products to total sales is a critical success indicator of our robust innovation process,” Hortaleza said.

International operations contributed close to 10% to total revenues while providing higher net returns at 28%.

“The Company is looking at our international operations as the new frontier that will drive growth. While we would like to exploit all opportunities, we are choosing our battles in order not to spread ourselves too thinly. In the short term, we will focus on overseas markets where Splash enjoys good brand equity. Our international operations will steadily increase its contribution to the Company’s revenues,” Soriano added.

Soriano said that the Company’s focus, as far as its beauty and personal care products are concerned are the countries in the Asean region where the population generally has the same skin type as the Filipinos.

“One advantage of Splash in this arena is the harmonization of the Asean regulations on cosmetics where our Company has adequately prepared,” he added.

The Company improved efficiencies across its value chain translating to the improvement in profitability. Although there was a slight rise in the cost of goods sold as a percentage of sales, this was more than compensated by the relatively lower cost-to-sales ratio of operating expenses.

Looking forward, Soriano said that the 2008 would even be a more exciting year for Splash. “The new products we launched in the second half of 2007 are in the growth path, we will intensify our brand building initiatives, there will be more innovative products, especially in the health and wellness category, that will be launched this year, we are continuously improving our value chain efficiencies, and international operations would go on a high gear. We expect that 2008 would give us even better revenue and profit growth in 2008,” Soriano said.

Splash Corp. went public in November last year, raising close to 2 billion from the float of its primary shares in order to fund investments in aggressive brand building, product research and development, and acquisition of brands.

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