Valora achieves further milestone in its „Valora 4 Growth“ strategy

Acquisition of Sweden’s leading cosmetics distributor
With its acquisition of Scandinavian Cosmetics (ScanCo), Valora has secured ownership of Sweden’s largest independent cosmetics distributor, thus successfully extending its implementation of the „Valora 4 Growth“ strategy launched in 2010. With 23% of nationwide sales, ScanCo enjoys a leading position in the Swedish cosmetics market, the largest in Scandinavia. The company, whose successful operations were recognised through the award of the 2011 „Entrepreneur Company of the Year“ prize for Southern Sweden, has so far been privately owned and has been an established cosmetics distributor for nearly 30 years. Ulf Ljunggren, who has owned the company until now, will take on executive duties on the company’s board, thus continuing to contribute his substantial cosmetics know how and expertise. ScanCo’s closely knit, highly professional management team will ensure that this well-known company continues to develop and prosper as part of Valora Trade.

In 2010, ScanCo generated net revenues of some CHF 75 million on which it earned an operating margin in excess of 4%. The purchase price paid by Valora is within the 6-9 x EBIT target range defined in its growth strategy. Valora will finance this transaction entirely from cash generated from ongoing operations. Completion is expected to take effect at the end of July 2011.

Expansion of Valora Trade Sweden’s existing product portfolio
Valora Trade Sweden’s net revenues already amount to some CHF 150 million. The acquisition of ScanCo will raise the company’s net revenues significantly and to more than CHF 225 million. Moreover, the acquisition will complement the current portfolio with a new cosmetics category generating above-average levels of profitability. This investment opens up additional growth opportunities for Valora Trade in one of Scandinavia’s key markets, which the company will pursue through more efficient use of its expanded product portfolio and through initiatives to develop new markets. So far, specialised cosmetics retail has been Scandinavia Cosmetics main sales channel. In future, Valora Trade Sweden’s broad market coverage, particularly in areas such as Grocery Trade, will provide further opportunities for sustained and profitable growth.

New Scandinavian cosmetics distribution platform paves way for further growth opportunities
Following Valora’s purchase of EMH in 2010, its acquisition of ScanCo marks a further significant milestone in the creation of a cross-border Scandinavian cosmetics platform. This will enable Valora Trade sustainably to develop its position in this profitable market, and will make it very well placed to expand further in other Northern European markets. As Thomas Vollmoeller, Valora’s CEO, puts it, “This second acquisition in cosmetics distribution in less than a year (EMH and now ScanCo) has strengthened our position in this growing and profitable product category. It is also entirely congruent with our “Valora 4 Growth” strategy.”