Fine Fragrance - Forum

Aug 2015 - Managerial Level Case Study
Scent
learncima.com
1
Know Your Preseen (KYP)
This is known as Know Your Pre-seen (KYP) issued by
LearnCIMA.com
KYP is a repetition of the pre-seen and the objective is to
make reading the pre-seen user-friendly.
There are several slides included outside the pre-seen
and they have been marked with an “e”.
2
Financial Manager of Scent
Your are a Financial Manager in Scent, a fragrance
manufacturer.
3
Before we begin- Movie Time!
Perfume: The Story of a Murderer
2006 German Fantasy Thriller
Film directed by Tom Tykwer
Based on Patrick Süskind's
1985 novel called ‘Perfume’
Click icon below
to watch trailer
4
Trailer: https://www.youtube.com/watch?v=zutiIw_2e2g
General Information about Scent
5
Company Profile
Industry
Name
Home Country
Head Office
Inception
– Perfume Industry
– Scent
– Zeeland
– Capital City of Zeeland
– 1945
6
Company Profile
Facilities
– Development Laboratory– At Head Office
– 3 Major Factories
– Outskirts of the Capital city
– South west of Zeeland
Company Structure – Divisional structure
– 4 Divisions
7
Company Profile
Revenue
Gross profit
Net profit
(2015)
– Z$ 1,267 million
– Z$ 576 million
– Z$ 42 million
8
Scent – The Fragrance Manufacturer
Home country is
Zeeland
Scent is a
Fragrance
Manufacturer
Scent is one of the world’s leading
Perfume Houses
9
Scent exports products globally
to over 100 countries
Scent – Company History
Timeline
1945
1995
Scent was
established 70
years ago by two
brothers
Joseph Frederic
the great
grandson of one
founder is now
the Deputy CEO
They developed a successful
range of fine fragrances
Many of them are still being
sold today
2015
Some shares are still being
For the last 20 years Scent has been owned by descendants of the
quoted on the national stock exchange
10
founders
Fragrances, Aromatic Compounds
& the Fragrance Industry
11
Perfume “e”
Perfume is a liquid with a pleasant smell, usually made
from oils taken from flowers or spices used on the
human body, animals, food, objects, and living spaces.
Perfumes have been known to exist in some of the
earliest human civilizations such as in ancient
Mesopotamia and Egypt, through ancient texts or from
archaeological digs.
Wall paintings of
Ancient Egyptians
using Perfume
12
Perfume “e”
Modern perfumery began in the late 19th century with
the commercial synthesis (artificial combination) of
different aroma compounds which allowed for the
creation of perfumes with smells previously
unattainable solely from natural aromatics alone.
1880s Solon Palmer
"Gardenglo" Perfume Bottle
13
Perfume - etymology “e”
‘Perfume’ originated from the Latin word ‘parfumare’ (to
smoke through) – ‘per’ (through) + ‘fumare’ (to smoke)
which formed the French word ‘parfum’ (pleasantsmelling smoke from a burning substance)
14
Fragrance “e”
A Fragrance is a chemical compound that has a smell or
odour.
Synonyms: Aroma Compound, Odorant, Aroma
A Fragrance is:
‘’a pleasant and usually sweet smell’’
‘’ a perfume or cologne’’
15
Meaning of Scent (Noun)“e”
1. ‘’a pleasant smell that is produced by something’’
Ex: The flower has a wonderful scent.
2. ‘’a smell that is left by an animal or person and that can be
sensed and followed by some animals (such as dogs)’’
Ex: The dogs followed the fox's scent.
- often used figuratively (non-literal/symbolically)
Ex: The reporter was on the scent of a big story. [=was
following/investigating a big story]
16
Meaning of Scent (Noun)“e”
3. ‘’a slight indication of something that is going to happen or
that might happen’’
Ex: There was a scent [=hint] of trouble in the air. [=trouble was
developing].
4. ‘’a liquid that is put on your body to give it a pleasant
odour’’
Ex: a bottle of scent.
17
Meaning of Scent (Verb)“e”
1. ‘’to become aware of (something) by smell’’
Ex: The dog scented a rabbit.
- often used figuratively (non-literal/symbolically)
Ex: We scented [=sensed, detected] trouble and left.
2. ‘’ to give (something) a pleasing smell’’
Ex: Roses scented [=perfumed] the air.
- often used as (be) scented
Ex: The room was scented by the flowers.
Ex: The air was scented with/by her perfume.
18
Fragrances & Cosmetics
Fragrances are regarded as part of the cosmetics
industry.
19
Cosmetics “e”
Cosmetics (also known as makeup or make-up) are care
substances used to enhance the appearance or odor of the
human body.
They are generally mixtures of chemical compounds, some
being derived from natural sources (such as coconut oil)
and many being synthetics.
A subset of cosmetics is called
"make-up," which refers primarily
to colouring products intended
to alter the user’s appearance.
20
Types of Cosmetics “e”
Cosmetics include:
skin-care creams
baby products
lotions
bath oils
powders
bubble baths
perfumes
bath salts and many other types
of products.
lipsticks
fingernail & toe nail polish
eye & facial makeup
towelettes
permanent waves
coloured contact lenses
hair colours
hair sprays and gels
deodorants
21
Cosmetics Industry “e”
The cosmetic industry is dominated by a small number
of multinational corporations that originated in the early
20th century, but the distribution and sale of cosmetics is
spread among a wide range of different businesses.
The largest cosmetic companies are The L'Oréal Group,
The Procter & Gamble Company, Unilever, Shiseido
Company, Limited and Estée Lauder Companies, Inc.
22
Describing & Categorization of Perfumes “e”
A perfume can be described using Fragrance Notes and
also using the family/group/category the perfume
belongs to.
There are several main types of Fragrance Categories:
1. Olfactory Fragrance Groups
2. Traditional
•
Emerged around 1900
3. Modern
•
Since 1945, due to great advances in the technology of perfume
creation (i.e., compound design and synthesis) as well as the
natural development of styles and tastes, new categories have
emerged to describe modern scents
4. Fragrance Wheel
•
Created in 1983 by Michael Edwards
23
Fragrance Notes “e”
Fragrances develop in 3 stages, and you will notice that
different aromas are released as these stages progress with
time.
1. Top Note
•
The initial, lighter smell of the fragrance which lasts around 815 minutes. Examples of these notes include citruses, powdery
scents and light florals.
2. Heart or Middle Note
•
The main elements of the fragrance, these notes develop after
the top note clears, usually around 30 minutes after being
sprayed. Heart notes most often include heavier floral scents.
3. Base Note
•
The last to develop and helps fix the fragrance to the skin. This
is where you will smell the bolder notes of the scent, such as
smokes and leathers which become more noticeable when the
fragrance has been on the skin for a while.
24
Fragrance Notes “e”
25
Main Olfactory Fragrance Groups “e”
‘Olfactory’ means relating to the sense of smell.
Grouping & categorisation of perfumes is not definite or
precise.
Many fragrances contain aspects of different families.
Classification by Olfactory
family is a starting point for a
description of a perfume, but
it cannot by itself denote the
specific characteristic of
that perfume.
26
Main Olfactory Fragrance Groups “e”
Citrus
Description Fresh & sharp
based on
aromas of
citrus fruits
Floral
Chypre
Oriental
Biggest group &
varies largely
with different
flowers
Comprised of citrus top
Based on spices
note, floral middle note & and related
oaky & musky bass
scents
Aromatic
compound
examples
• Lemon
• Grapefruit
• Orange
• Lilac
• Lily
• Rose
• Oak moss
• Sandalwood
• Patchouli
Associated
Personality
Energetic &
lively
Romantic &
Softer
Thoughtful, resourceful & Exciting,
humble
adventurous,
fearless &
courageous
27
• Resins
• Vanilla
• Cinnamon
Main Olfactory Fragrance Groups “e”
28
Traditional Classification “e”
Single Floral
Floral
Bouquet
Amber/
Oriental
• Fragrances that are dominated by a scent from one
particular flower; in French called a soliflore.
• Is a combination of fragrance of several flowers in a
perfume compound.
• A large fragrance class featuring the sweet slightly animalic scents
of ambergris or labdanum, often combined with vanilla, tonka
bean, flowers and woods. Can be enhanced by camphorous oils &
incense resins
Woody
• Fragrances that are dominated by woody scents, typically of
agarwood, sandalwood, cedarwood, and vetiver. Patchouli, with its
camphoraceous smell, is commonly found in these perfumes.
Leather
• A fragrance family which features scents of honey, tobacco, wood
and wood tars in its middle or base notes & a scent that indicates
to leather.
Chypre
• Meaning Cyprus in French, includes fragrances built on a
similar accord consisting of bergamot, oakmoss, and
labdanum
Fougère
• Meaning Fern in French, built on a base of lavender, coumarin and
oakmoss. Many men's fragrances belong to this fragrance family,
which is characterized by its sharp herbaceous and woody scent.
Modern Classification “e”
Bright Floral
• Combining the traditional Single Floral & Floral Bouquet
categories
Green
• A lighter and more modern interpretation of the Chypre
type, with pronounced cut grass, crushed green leaf and
cucumber-like scents.
Aquatic/
Oceanic/ Ozonic
• The newest category in perfume history, first appearing in 1988
Davidoff Cool Water. Leading to many of the modern androgynous
perfumes. Generally contains calone, a synthetic scent discovered
in 1966, or other more recent synthetics. Also used to accent floral,
oriental, and woody fragrances.
Citrus
• An old fragrance family that until recently consisted mainly of
"freshening" eau de colognes, due to the low tenacity of citrus
scents. Development of newer fragrance compounds has allowed
for the creation of primarily citrus fragrances.
Fruity
• Featuring the aromas of fruits other than citrus, such as peach,
cassis (black currant), mango, passion fruit, and others.
Gourmand
• French: scents with "edible" or "dessert"-like qualities. These
often contain notes like vanilla, tonka bean and coumarin, as well
as synthetic components designed to resemble food flavors.
The Fragrance Wheel “e”
The Fragrance
wheel is a relatively
new classification
method that is
widely used in
retail & in the
fragrance industry.
The method was
created in 1983 by
Michael Edwards, a
consultant in the
perfume industry.
31
Aromatic Compounds
Fragrances consist of an aromatic compound.
They can be derived from either a natural or synthetic
(artificial) source.
Many natural compounds are obtained from flowers and
other plants which are grown and harvested for the
purpose.
Some compounds are derived from animals, although
many of the traditional animal compounds have been
phased out because of controversy surrounding their
collection.
32
Aromatic Compounds
Instead of natural aromatic compounds, synthetic
compounds can be manufactured in the laboratory.
Chemical processes are used to mimic natural fragrances
that cannot be derived from natural sources,
such as animal products that have been phased out,
and also to produce fragrances that cannot be found in nature.
33
Aromatic Compound Sources “e”
Plant sources
Bark (cinnamon & cascarilla )
Flowers & blossoms (rose, jasmine, citrus , clove , vanilla)
Fruits (citrus such as oranges, lemons, limes)
Leaves and twigs (lavender, hay & tomato leaves, patchouli, sage,
violets, rosemary, and citrus leaves)
Resins (labdanum, frankincense, myrrh, pine and fir resins)
Roots, rhizomes and bulbs (iris, rhizomes, vetiver roots, various
rhizomes of the ginger family)
Seeds (tonka bean, carrot seed, coriander, caraway, cocoa,
nutmeg, mace, cardamom)
Woods (sandalwood, rosewood, birch, cedar, juniper, and pine)
Seaweeds
34
Aromatic Compound Sources “e”
Animal sources – now most are replaced with synthetic compounds
Ambergris ( released by sperm whales-doesn’t harm the whale)
Castoreum (from the North American beaver)
North American
Civet Musk ( from the Civet)
Beaver
Hyraceum (from the Rock Hyrax)
Honeycomb ( made by the honeybee)
Musk ( from the male Musk deer)
Rock Hyrax
Musk deer
35
Aromatic Compound Sources “e”
Synthetic sources
Many modern perfumes contain synthesized odorants. Synthetics can
provide fragrances which are not found in nature.
Synthetic aromatics are often used as an alternate source of
compounds that are not easily obtained from natural sources
The majority of the world's synthetic aromatics are created by
relatively few companies. They include:
International Flavors and Fragrances (IFF)
Givaudan
Firmenich
Takasago
Symrise
36
Aromatic Compounds used by Scent
Some fragrance houses market high-end perfumes using
natural ingredients
But many have replaced expensive natural oils with
cheaper synthetics often without publicising the fact that
their fragrance has changed slightly.
Many of the
compounds used
by Scent are scarce
and some can be
difficult to obtain.
37
Natural vs Synthetic Compounds
Natural Compounds
Strength
Synthetic Compounds
Often prized for their subtlety
Generally more consistent
(delicate features) and complexity
Can be cheaper than natural compounds
(not always the case)
Weakness Can be difficult to recreate a
consistent fragrance
Can lack the complexity of a natural
product
Example
1 kg of essential oil derived from rose
blossoms requires between 3 and 5
tonnes of rose blossoms, over a million
flowers, to be hand-picked on the
morning when the flowers first open. The
resulting oil costs more than Z$5,000 per
kg, whereas the same amount of the
synthetic equivalent can be purchased for
less than Z$400.
Oils extracted from a particular
variety of flower may be affected
by the location in which they have
been grown and even by the
weather in that location.
38
Fragrances
Generally consumers regard fragrances as a luxury
product.
But most consumers who use fragrances use them on a
daily basis in spite it being considered as a luxury.
A bottle of perfume can last for a considerable time with
careful application, even if its used almost daily.
39
Fragrances
Fragrances are often purchased as gifts.
These factors mean that sales of perfume and other
fragrances are not particularly sensitive to economic
trends.
40
Perfume Industry
The perfume industry generates global revenues of Z$30
billion (Z$30,000 million) a year.
41
Global Fragrance market size 2012 - 2021“e”
The estimated size of the global fragrance market from
2012 to 2021 in million U.S. dollars
42
Perfume Industry & Fashion Industry
Many consumers who could not afford clothing made by
a famous designer can enjoy some of the brand
experience by purchasing their fragrance.
For example, a leading fashion house recently stated that
85% of its revenue came from perfume sales.
Global Fashion
Houses which also
sell perfumes
43
Top 3 Fragrance Industry trends in 2015 “e”
1. Niche fragrances to become more popular
According to Euromonitor International, the rising
popularity of niche fragrances is the first noticeable
trend for this year.
Consumers will continue to look for an effective identity
and ability to relate emotionally and personally to a
fragrance and in line with this, industry players are
formulating fragrances with alternative ingredients such
as sea salt and saffron among such ingredients.
44
Top 3 Fragrance Industry trends in 2015 “e”
1. Niche fragrances to become more popular
Estée Lauder’s recent acquisitions of Le Labo and Frédéric
Malle illustrate the attempt of big players to tap into this
market segment.
However, the explosion of niche fragrances in the market also
means that competition is intensifying.
In order to address this challenge, it
is recommended that fragrance player
should “sustain their niche intent and
avoid commoditising the scent.”
45
Top 3 Fragrance Industry trends in 2015 “e”
2. Increased personalization
This is the second trend identified
by Euromonitor International.
The recent My Burberry launch by
Burberry allows consumers to
monogram bottles of the fragrance
with their initials.
Its noted that brands increasingly
allow consumers to personalise
fragrance bottles. Similar initiatives
were seen from Serge Lutens, Atelier
Cologne and Guerlain
46
Top 3 Fragrance Industry trends in 2015 “e”
3. Innovations in retail experiences
The third trend pointed by
Euromonitor International is
the increased competition
between department stores
and specialized retailers to
enhance
the
consumer
purchasing
experience
through new retail formats.
An example is the fragrance
library opened at New York’s
Saks Fifth Avenue. In the
library, consumers can learn
more about fragrances and
the heritage behind them. 47
Top 3 Fragrance Industry trends in 2015 “e”
3. Innovations in retail experiences
Euromonitor’s analyst also points out standalone stores
of brands such as Chanel and Dior where consumers can
find a wide product mix featuring key heritage
fragrances, as well as fashionable new items or best
selling ones.
Also the exclusive collections that top fragrance brands
have been developing during recent years can be added.
Read more: http://blog.euromonitor.com/2014/12/three-trendsshaping-the-fragrances-market-for-2015.html
48
Famous Global Perfume Brands “e”
Calvin Klein
 Calvin Klein Inc. is an
upscale fashion house
founded by American
fashion designer Calvin
Klein.
 Headquartered in Midtown
Manhattan, New York City
and is currently owned by
Phillips-Van Heusen.
Dolce & Gabbana
49
 An Italian luxury industry fashion
house started by Italian designers
Domenico Dolce & Stefano
Gabbana in 1985.
 Produces clothing, footwear,
handbags, sunglasses, watches,
jewellery, perfumery & cosmetics.
Famous Global Perfume Brands “e”
Gucci
 An Italian fashion and
leather goods brand, part of
the Gucci Group, which is
owned by French company
Kering.
 Founded by Guccio Gucci in
Florence in 1921.
 Gucci is also the biggestselling Italian brand.
Chanel
 Chanel S.A. is a French
privately held company.
 It is a high fashion house
that specializes in haute
couture and ready-to-wear
clothes, luxury goods and
fashion accessories.
50
Famous Global Perfume Brands “e”
Prada
Prada S.p.A. is an Italian luxury fashion house, specilialized
ready-to-wear, leather and fashion accessories, shoes, luggage,
perfumes, watches etc., founded in 1913 by Mario Prada.
Bulgari
Is an Italian jewellery and luxury goods brand that produces and
markets several product lines including jewellery, watches,
fragrances, accessories, and hotels.
51
Famous Global Perfume Brands “e”
Christian Dior
Parfums Christian Dior is the perfumery and cosmetics line of the
French fashion house, Christian Dior S.A..
However, the line belongs to the perfumes and cosmetics portfolio
of the world's largest luxury group, the LVMH Group.
Begun in 1947 with the introduction of the women's Miss Dior
perfume, Parfums Christian Dior has since come to include men's
frangrances as well.
52
Famous Global Perfume Brands “e”
Firmenich
Firmenich SA is a private Swiss company in the perfume and
flavor business. It is the largest privately owned company in the
field and ranks number two worldwide.
Firmenich has created perfumes for over 100 years and produced
a number of well-known flavours.
53
Famous Global Perfume Brands “e”
Guerlain
Guerlain is a French perfume house, among the oldest in the
world. It has a large customer following, and has traditionally
been held in high esteem in the perfume industry.
Perfumes by Guerlain are often said to be characterized by a
common olfactory accord known as the "Guerlinade." A perfume
by the same name was launched by Guerlain in 1921.
Lancôme
Lancôme Paris is a French luxury cosmetics house that
distributes products internationally. Owned by L'Oréal since
1964, Lancôme is part of the Luxury Products division, which
offers skin care, fragrances and makeup at higher-end prices.
54
Famous Global Perfume Brands “e”
Burberry
Burberry Group plc is a British luxury fashion house,
distributing clothing, fashion accessories, fragrances and
cosmetics.
Its distinctive tartan pattern has become one of its most widely
copied trademarks. Burberry is most famous for its trench coat,
which was designed by founder Thomas Burberry.
The company has branded stores and franchises around the
world and also sells through concessions in third-party stores.
55
Famous Global Perfume Brands “e”
Givaudan
Givaudan is a Swiss manufacturer of flavorings and fragrances.
The company's scents and flavors are developed most often for
food and beverage makers, but they are also used frequently in
household goods, as well as grooming and personal care
products.
Givaudan was founded as a perfumery company in 1895 in
Zurich by Leon and Xavier Givaudan
In 2008, Givaudan released one of the world's first mobile
perfume recommendation tools, the iPerfumer app.
56
Worlds Most Expensive Perfumes “e”
DKNY Golden Delicious Million Dollar Fragrance Bottle
$1 million
In 2011, DKNY divulged its brilliant apple-formed million dollar
bottle of perfume which contains 2,909 valuable stones.
 The perfume is created in 14-karat yellow and white gold and
contains 183 yellow sapphires, 2,700 white precious stones, a 1.6carat turquoise Paraiba tourmaline from Brazil, a 7.18-carat oval
Cabochon sapphire from Sri Lanka, 15 striking pink jewels from
Australia, 4-rose cut precious stones, a 3.07-carat oval cut ruby, a
4.03-carat pear shape rose cut
jewel, and a 2.43-carat perfect
clear yellow Canary precious stone
embellishing the cap.
 The bottle would be sold to an
aroma devotee and all returns
would be given to the worldwide
philanthropy Action against Hunger.

Worlds Most Expensive Perfumes “e”
Clive Christian No. 1 Imperial
$12,721.89 per ounce
Majesty
Perfume
This perfume holds the Guinness Book of World Records title as the
most costly perfume on the planet.
 Discharged in 2005, just a 10-container run of this super-uncommon,
super-restrictive restricted version aroma was discharged available
to be purchased in the celebrated Harrods store in London and
Bergdorf Goodman in New York. The “No. 1 Imperial Majesty” is truly
simply a Clive Christian No. 1 –
in an exceptionally favour bottle.
 The entire jug contains 16.9
ounces of aroma (importance the
expense for a jug is $215,000), and
is made via Baccarat, beautified with
a 5-carat white precious stone on
the neck and encompassed in a
18-carat robust gold neckline..

Worlds Most Expensive Perfumes “e”
Baccarat Les LarmesSacrees de Thebes
$6,800 per ounce



This perfume is costly for both the smell itself and the container it
comes in.
Baccarat is an extravagance gem crystal producer and one of the
main decisions in artisan bottle creation for top of the line perfume
organizations as far and wide as possible.
In 1998, the organization propelled three of its own constrained
release scents, and this one was the minimum delivered, making it
the rarest and generally significant.
Products of Scent & Perfume
Concentrations
60
Scents Product divisions & Products
Fine Fragrance
• Manufactures
legacy fragrances
• Generally
intended to be
sold in the long
term.
• Many were 1st
developed by
the founders &
still sold today
Cinque
Fleurs
Fleur
d’Herbe
Celebrity
Fragrance
Bath & Body
Fragrance
Home
Fragrance
• Manufactures
celebrity
fragrances
• Manages
relationship with
the celebrities
• Generates
approx. 50% of
Scents revenue
• Manufactures a
range of bath
oils, shower gels,
soaps & body
lotions to match
perfumes
• Manufactures
room scent
diffusers &
candles
• Smallest division
Wim
Wilder
Cologne
61
Scents Product divisions & Products
4 Product
Divisions
Fine Fragrance
Legacy
fragrances
Celebrity
Fragrance
Celebrity
fragrances
Bath & Body
Fragrance
Bath oils, Shower
gels, Soaps &
Body lotions
Home
Fragrance
Room scent
diffusers &
candles
Scent manufactures ranges of
fragrances for both men & women
• Perfumes & Eau de toilette for women
62
• Aftershave & Cologne
for men
Fleur
d’Herbe
Cinque
Fleurs
Wim
Wilder
Cologne
Wim Wilder
is a fictional
Hollywood
action hero
Scents Product divisions & Products
Fine Fragrance
(Legacy
Perfumes)
Celebrity
Fragrance
4 Product
Divisions
Bath & Body
Fragrance
Intended to be
sold in the long
term
Many were first
developed by
founders
Associated with
popular
celebrities such
as Wim Wilder
All perfume
fragrances in
Scent
&
Every new
perfume product
in Scent
falls into the 2
categories –
Fine or Celebrity
Home
Fragrance
Scent manufactures a wide range of
branded fragrances
63
Expensive vs Cheap Products in Scent
Expensive
Cheap
More permanent
brand name
Supported through
advertising &
promotions
Celebrity endorsed
Generates
publicity &
awareness
 More expensive products in Scent are usually given a more permanent
brand name that can be supported through advertising & promotions.
 New products aimed at the lower end of the market are named after
celebrities to increase publicity for the product’s launch.
 The market is keen to buy a product that is associated with a favourite
64
musician or film star.
Scents Product - Fleur d’Herbe







Name:
Fleur d’Herbe
Fleur
d’Herbe
Type:
Women’s Perfume
Creation:
1950’s
Price:
Z$100 (considered very expensive)
Ingredients used: Natural ingrediants
Product Type in Scent: Legacy Perfume
Marketing & Branding:
 Advertised extensively on TV & magazines
 Beautifully packed in a luxury box & bottle
 Associated with many actors, singers and film stars over the
years
 Compared with: (in recent newspaper article)
 Discount supermarket Sellit’s Z$3.99 priced perfume
called ‘Fall’
65
Perfume Concentrations “e”
Specific terms are used to describe a fragrance's approximate
concentration by percent/volume of perfume oil.
A list of common terms is as follows:
No
Type
Code
1
Parfum / Extrait
2
Esprit de Parfum
ESdP
3
Eau de Parfum
EdP
Other names
Aromatic Oil %
Perfume extract /
Perfume
15–40%
15–30%
Eau de perfume/
millésime
10–20%
Parfum de Toilette
PdT
4
Eau de Toilette
EdT
5–15%
5
Eau de Cologne
EdC
3–8%
6
Perfume mist
7
Splash & Aftershave
3–8%
EdS
1–3%
66
Different product types
There are no formal agreed definitions of different
product types, such as aftershave versus cologne, and the
various names are used almost interchangeably.
The following percentages are only very broadly
indicative rather than prescriptive.
Product type
Aromatic compound
(‘oil’) %
Alcohol %
Water %
High quality
perfume/aftershave
25
70
5
Mid-market
perfume/aftershave
10
75
15
Eau de toilette/cologne
5
80
15
The above classification is based on the pre-seen
67
Perfume Concentrations “e”
Fragrances consist of a concentration of perfume oils in a
solvent (usually alcohol).
The more perfume oil in a fragrance (and therefore the less
alcohol), the more ‘strength’ the fragrance has. The strengths
are broken down into the categories shown below:
68
Difference between product types
Differences between different products in a fragrance range are not
only based on the water contents.
For example, Scent has a range called ‘Handle’ comprising:
a perfume,
an eau de toilette
a bath oil
Handle
Perfume
Eau de toilette
Bath oil
Similarities
Identical in many aspects such as fragrance
Differences
Perfume has a much higher concentration
of aromatic compound
Similarities
All 3 – have the same fragrance
Differences
Bath oil is made from different synthetic compounds to help
retain fragrance when diluted in hot bath water
69
Perfume Solvents
The aromatic compound may be diluted with a solvent,
such as ethanol.
The compound is then likely to be further diluted with
oil, such as coconut oil, to carry the fragrance and avoid
harming the wearer’s skin.
70
Perfume Solvents “e”
Perfume oils are often diluted with a solvent, though this is
not always the case, and its necessity is disputed.
By far the most common solvent for perfume oil dilution is
ethanol like brandy, cognac, pisco, rakia and rectified strips
or a mixture of ethanol and water.
Perfume oil can also be
diluted by means of neutralsmelling oils such as
fractionated coconut oil, or
liquid waxes such as jojoba oil.
71
General information about
Zeeland
72
Zeeland
Scent’s Home
country is
Zeeland
Head office is located in
the capital city
Development Laboratory
located at Head office
3 Major Factories located in:
– Outskirts of the capital city
– South west of Zeeland
73
Flower growing - South West Zeeland
 An area in south west of Zeeland has a
warm climate & fertile soil.
 For many years for flowers have been
grown for the the perfume industry in
that area.
 Companies based there harvest the
flowers & distil fragrances to make
perfumes.
Scent also has
a major factory
there
74
Zeeland – Flower growing
Some companies harvest the flowers & distil fragrances to
make perfumes.
Other companies import natural exotic fragrances from
overseas and producing synthetic (artificial) substitutes.
75
Zeeland
Zeeland’s currency is the Z dollar (Z$).
Zeeland has adopted International Financial Reporting
Standards. (IFRS)
76
Manufacturing Fragrances
77
Manufacturing Fragrances
The creation of a new fragrance is an art that requires a
skilled perfumer or ‘nose’.
The development process is ongoing: consumer tastes
change, fragrances sometimes have to be replaced or
manufacturers test the market with a new product
78
Perfumer “e”
A perfumer is a term used for an expert on creating perfume
compositions.
Sometimes referred to affectionately as a Nose (French: le nez)
due to their fine sense of smell and skill in producing olfactory
compositions.
A perfumer must have a keen knowledge of a large variety of
fragrance ingredients and their smells, and be able to
distinguish each of the fragrance ingredients whether alone or
in combination with other fragrances.
A perfumer must also know how each ingredient reveals itself
through time with other ingredients.
79
Perfumer “e”
Most perfumers are employed by several large fragrance
corporations in the world including Mane, Firmenich, IFF,
Givaudan, Takasago, and Symrise.
Some perfumers work exclusively for a perfume house or in
their own company which is not common.
The customers to the perfumer or their employers, are
typically fashion
houses or large
corporations of
various industries.
80
Work role of a Perfumer “e”
The perfumer typically begins a perfume project with a brief by the
perfumer's employer or an outside customer.
A brief will contain the specifications for the desired perfume, and will
describe in often poetic or abstract terms what the perfume should smell
like or what feelings it should evoke in those who smell it, along with a
maximum per litre price of the perfume oil concentrate.
This allowance, along with the intended application of the perfume, will
determine what aromatic ingredients will be used in the perfume
composition.
The perfumer will then go through the process of blending multiple
perfume mixtures and will attempt to capture the desired feelings specified
in the brief.
After presenting the perfume mixtures to the customers, the perfumer may
"win" the brief with their approval.
81
Work role of a Perfumer “e”
They proceed to work with the customer, often
with the direction provided by a panel or artistic
director, which guides and edits the modifications
on the composition of the perfume.
This process typically spans several months to
several years, going over many iterations & may
involve cultural & public surveys to tailor a
perfume to a particular market.
The perfume composition will then be either
used to enhance another product as a functional
fragrance (shampoos, make-up, detergents, car
interiors, etc.) or marketed & sold directly to the
public as a fine fragrance.
Alternatively, the perfumer may simply be inspired to create a perfume &
produce something that later becomes
marketable or wins a brief. This is more
82
common in smaller or independent perfume houses.
Fragrance Manufacturing Process “e”
1. Collection
Initial ingredients must be brought to the manufacturing center.
Plant substances are harvested from around the world, often handpicked for their fragrance.
Animal products are obtained by extracting the fatty substances
directly from the animal.
Aromatic chemicals used in synthetic perfumes are created in the
laboratory by perfume chemists.
83
Fragrance Manufacturing Process “e”
2. Extraction
Oils are extracted from plant substances by several methods: steam
distillation, solvent extraction, enfleurage, maceration, and
expression.
In solvent extraction, flowers are put into large rotating tanks or drums and
benzene or a petroleum ether is poured over the flowers, extracting the
essential oils. The flower parts dissolve in the solvents and leave a waxy
material that contains the oil, which is then placed in ethyl alcohol. The oil
dissolves in the alcohol and rises. Heat is used to evaporate the alcohol, which
once fully burned off, leaves a higher concentration of the perfume oil on the
bottom.
Maceration is similar to enfleurage except that warmed fats are used to soak
up the flower smell. As in solvent extraction, the grease and fats are dissolved
in alcohol to obtain the essential oils.
Expression is the oldest and least complex method of extraction. By this
process, now used in obtaining citrus oils from the rind, the fruit or plant is
manually or mechanically pressed until all the oil is squeezed out.
84
Fragrance Manufacturing Process “e”
2. Extraction
In steam distillation, steam is passed through plant material held in a still,
whereby the essential oil turns to gas. This gas is then passed through tubes,
cooled, and liquified. Oils can also be extracted by boiling plant substances
like flower petals in water instead of steaming them.
85
Fragrance Manufacturing Process “e”
2. Extraction
During enfleurage, flowers are spread on glass sheets coated with
grease. The glass sheets are placed between wooden frames in tiers.
Then the flowers are removed by hand and changed until the grease
has absorbed their fragrance.
86
Creating an enfleurage in the
2006 movie called ‘Perfume: A
story of a Murderer’
Fragrance Manufacturing Process “e”
2. Extraction
Methods
87
Fragrance Manufacturing Process “e”
3. Blending
Once the perfume oils are collected, they are ready to be blended
together according to a formula determined by a master in the
field, known as a "nose." It may take as many as 800 different
ingredients and several years to develop the special formula for a
scent.
After the scent has been created, it is mixed with alcohol. The
amount of alcohol in a scent can vary greatly.
Most full perfumes are made of about 10-20% perfume oils
dissolved in alcohol and a trace of water. Colognes contain
approximately 3-5% oil diluted in 80-90% alcohol, with water
making up about 10%. Toilet water has the least amount—2% oil
in 60-80% alcohol and 20% water.
88
Fragrance Manufacturing Process “e”
4. Aging
Fine perfume is often aged for several months or even years after it
is blended.
Following this, a "nose" will once again test the perfume to ensure
that the correct scent has been achieved.
Each essential oil and perfume has three notes: top notes, central
or heart notes and base notes.
More "notes," of various smells, may be further blended.
89
Intellectual Property, Brands &
Celebrity Endorsement
90
Intellectual Property Protection
Intellectual
Property
Protection
Possible
• Protect brand
names
• Protect images
• Protect bottles
& packaging
• Right to use
celebrity names
Actions taken
by Scent
Not Possible
• Patent or
trademark a
specific and
exact smell
• Scent owns a
large number of
trademarks
• Brand names
are owned
• Owns the right
to use specific
images, bottles
& package
designs
91
Scents & Competitors Products
Theoretically Scent or its competitors can analyse each others
products in a laboratory and the chemical elements could be
identified.
Practically its virtually impossible to make a perfect copy of
another manufacturer’s fragrances due to:
Not knowing the precise sources of the different aromatic
compounds used in the perfume
Not knowing the method in which they were combined
92
Intellectual property of Scent
TM
A large number of trademarks
The brand names
of its products
Scent owns
the following :
The rights to use
specific images
on its packaging
Bottles with
distinctive designs
TM
Packaging designs
93
Many are trademarked & cannot
be copied without permission
Developing Brands
Pays a marketing agency a fee to
create a brand name for a new
product
General steps
in developing
a Brand name
in Scent
Potential brand
names are tested in
the marketplace by
the agency’s
consultants
A fee is paid for
development of
the brand name
94
All rights to the brand
belong to Scent
Celebrity Endorsement
Celebrity-endorsed fragrances are considered as very
important factor in the fragrance market.
Every year more than 500 new celebrity perfumes are
released in the whole industry.
The highest sale of celebrity fragrances are typically
during the year-end holiday season.
95
Celebrity Endorsement
A Celebrity is:
Required to do
• Engage in
promotional
activities
• Photographed
for magazine
adverts
• Filmed for
adverts
Agreed NOT to
do
• Endorse any
other
products in
the fragrance
or cosmetic
market
Time period of
contract
• Right to use
celebrity’s
name by
Scent
• Normally
between 1020 years
Intellectual rights related to
celebrity names are normally
more complicated
96
Famous Celebrity Perfumes “e”
Brad Pitt
Actor
Perfume House: Chanel
Introduced: 1921
Scent Classification: Floral Aldehyde
Featured in: Fall 2012 campaign
Madonna
Singer, world's top selling female recording artist of all time
Perfume: Truth or Dare
Perfume House: Dolce & Gabbana
Introduced: 2010
97
Famous Celebrity Perfumes “e”
Rihanna
Singer
Perfume House: Parlux Fragrances
Perfumes: Reb'l Fleur (2011), Rebelle (2012), Nude (2012) & Rogue (2013)
98
Famous Celebrity Perfumes “e”
James Franco
Actor
Perfume House: Gucci (Owned by P & G)
Perfumes: Gucci Pour Homme (2008)
Gucci Made to Measure (2013)
Scent Classification:
Gucci Pour Homme - Woody
Made to Measure - Spicy Oriental
99
Bottles, Packaging, Distribution &
Delivery
100
Bottles and Packaging
Bottles & packaging have iconic and distinctive designs.
They are featured prominently in advertising campaigns.
Packaging is designed by marketing agencies.
Packaging & bottles are manufactured by independent
manufacturers .
101
Distribution Channels
Department Stores
Specialist
Fragrance
shops
Retail Outlets
Pharmacies
Supermarkets
Online Stores
102
Distribution Channels
Department Stores
 Many exclusive department stores have fragrance
departments.
 Scents more expensive brands are stocked by these stores.
 Customers can try samples of different products.
 Advisers suggest suitable fragrances as gifts, depending on
the age & lifestyle of the intended recipient.
Other types of Stores
 These often compete on the basis of selling price.
 These aim for high volume sales.
 Therefore they require significant discounts from Scent.
Online Stores
 A number of online vendors sell Scent’s products.
 Online store customers often make repeat purchases
of known brands.
 Easy to deliver products by post as in small packages.
103
Delivery Process
 Scent sells exclusively to retailers.
 Products are only delivered in bulk to the retailers
warehouse or distribution center.
 Doesn’t deliver to retailers’ individual shops or
stores.
 Each order is packed securely and
loaded onto pallets for delivery.
104
Scent’s Board of Directors & Corporate
Structure
105
Scent’s Board of Directors
.
CEO
Operations
Director
Finance
Director
Executive
Deputy
CEO
Marketing
Director
Board of
Directors
Chairman
NED 3
106
Non
Executive
NED 1
NED 2
Executive Directors
Georgy Stone – Chief Executive Officer
Since: 2010
Previous position: Creative director- Fine fragrance
division of Scent
Work Experience:
Began his career as blender of fragrances at a well-known
perfume producer.
Worked many years in the perfume industry.
107
Executive Directors
Beth Miller – Finance Director
Since: 2012
Qualification: Professionally qualified accountant
Work Experience:
Specialised in the luxury goods market
Worked for a number of renowned providers of high quality
goods since graduating in 1985
108
Executive Directors
Charles Chevalier – Operations Director
Since: 2005
Career at Scent: Since 2003, joined from a major competitor
Work Experience:
Began his career working for a producer and supplier of high
quality natural perfume oils
109
Executive Directors
Jaspar Skornia – Marketing Director
Since: 2002
Qualifications: Graduated from university with a
Marketing Degree
Work Experience:
Has worked in the sales division for several major companies
Most recent designation: Franchise Director for a major
manufacturer of perfumes, make up and skin care.
110
Executive Directors
Joseph Frederic – Deputy Chief Executive Officer
Since: not given
Relationship: Great grandson of one of the founders of Scent
Qualifications: Professionally qualified lawyer
111
Non Executive Directors
Ethan Bazalgette – Chairman
Since: 2010
Previous designation: CEO of Scent
Committees served: Audit & Nomination Committees
Other positions held: Director of the Zeeland Cosmetic,
Toiletry & Perfume Association
112
Non Executive Directors
Lewis Jamieson – Non-Executive Director
Since: 2012
Previous experience: Successful career in business
Qualifications: Professionally qualified lawyer specialising
in intellectual property protection
Committees served: Convener of Scent’s Nomination
committee
113
Non Executive Directors
Olivia MacMillan – Non-Executive Director
Since: 2009
Previous Experience: Highly successful career with
Zeeland’s largest bank
Committees served: Convener of Scent’s Audit committee
114
Non Executive Directors
Martyna Litwinienko – Non-Executive Director
Since: 2012
Previous experience: Partner with a major accountancy
firm
Committees served: Serves on both the nomination and
audit committees
115
Scent’s Corporate Structure
116
Scent’s Corporate Structure
Scent has a divisional structure.
Each of the four divisions is made up of a number of
subsidiary companies.
Some of which have been purchased as part of the group’s
expansion strategy.
Sales, customer relations & finance functions are managed
centrally at head office.
117
Risk Management
118
Foreign Exchange Risks
Foreign Exchange Risks
How?
Why?
Why?
• Fluctuation in
foreign
exchange
rates
• Effects profits
& cash flows
• Exports to
over 100
countries
• International
operations is
approx. 70%
of business
• Financial
reports are in
Z$
• Currency
Risks (Ex:
Translation
risks)
119
Legal Risks
Legal Risks
How?
• Subject to
international
government
laws &
regulations
• Subject to laws
in Zeeland
Why?
• Transacts with
over 100
countries
• International
operations is
approx. 70% of
business
120
Why?
• Compliance
with regulation
on fragrance
formulation can
be difficult and
expensive,
requiring
reformulation,
relabelling or
discontinuation
of products.
Risks associated with Sales
Risks related to Sales
How?
• No long-term
contracts with
customers
• Demand for
celebrity
fragrances
diminishes
Effects
Actions to mitigate
• Revenue & cash
flows will be
affected
• Approx. 50% are
from celebrity
fragrances &
huge risks due to
demand drops
for celebrity
products
• Maintain
relationships
with customers
• Demand for
celebrity is based
on reputation
and appeal Need to select
correct
celebrities &
manage
relationships
121
Celebrity misbehaviour & Impairment losses
Two celebrities who held endorsed fragrances with scent were
convicted of drug-related offences.
The fragrance ranges that bore their names are to be:
Reformulated slightly
Re-launched with completely different names &
Completely different packaging.
The cost of brand names associated with two celebrities were
considered as an impairment loss
Impairment losses are shown as part of cost of sales (in the
year ended June 2015)
122
Risks related to Customers
Risks related to Customers
Actions to
mitigate
How?
Why?
• Customers’ poor
business
conditions will
also affect
Scents business
as well
• Ex: Reduction in
retail demand,
Credit risks of
customers
• The fragrance
industry is highly
competitive and
customer
preferences can
change rapidly.
123
• Making products
appealing to a
wide range of
consumers
• Must be able to
anticipate &
respond to
market trends
Expansion & Acquisition Risks
Expansion & Acquisition Risks
How?
• Not be able to
successfully
integrate acquired
new businesses
• Note being able to
achieve intended
benefits of
acquisition
Why?
• Expansion of Scents
business depends on
acquiring new
businesses
124
Risks related to Intellectual Property
Risks of Intellectual Property
How?
Effects
• Not be able to
protect our
brand names &
intellectual
property
• Impairment of
intangible assets
• Revenues would
be adversely
affected
• Profits will be
affected due to
impairment of
intangible assets
125
Investment Risks & Information
Investment Risks
Projects are evaluated
using discounted cash flow
How?
• Scent’s investment
strategy might lead
to investing in
negative net present
value projects.
Weighted average cost of
capital (WACC) is 12%
126
General Information About LK
127
LK – Scents biggest competitor
Name
Home Country
Inception
Founder
Founders job
– LK
– Zeeland
– 2005
– Olivia Kelly
– Hollywood make-up artist
LK is Scents biggest
competitor
128
LK – Scents biggest competitor
Products Made – (similar products to that of Scent but a smaller
range)
Perfumes
After Shaves
Bath oils
Home fragrances
Manufacturing location – All products in one Factory in
Zeeland
Factory location
– intentionally located in an area of
high unemployment to make a positive
impact on the local community.
129
LK and Olivia Kelly
Founded LK ten years ago
A Hollywood make-up artist
Olivia Kelly received initial funding to establish LK from
a number of Hollywood stars with whom she had worked
while in the film industry.
She developed her own range of fragrance products,
using only:
organic and
natural ingredients
for the aromatic compound.
130
Celebrities and LK Products
LK’s products are focussed more on the sector occupied
by Scent’s celebrity fragrances.
LK has always promoted its products on the basis of
simplicity and sustainability.
These virtues are appealing to the Hollywood celebrities
who have invested in the company and lent their names
to some of its leading products.
They have also been able to use their contacts in the film
industry to persuade other leading celebrities to sign
contracts to lend their names to the company’s products.
131
LK – Social Responsibility
LK has a policy of assisting its employees as much as
possible.
Examples:
Single parents can apply for flexible working hour
arrangements that fit in with their child care responsibilities
Applicants who have been unemployed in the long-term can
apply for a training programme that improves their prospects of
obtaining a job upon completion
The factory of LK is deliberately located in an area of high
unemployment to make a positive impact on the local
community
132
Newspaper Articles in the Scent Case Study
133
Article#1: Celebrity-endorsed Perfume Cost
134
Article#1: Celebrity-endorsed Perfume Cost
135
Article#2: Restrictions on Raw materials
136
Article#3: Substitutes of Competitors
137
Article#3: Substitutes of Competitors
138
Article#4: Independent Producers
139
Scent Group’s Financials
140
Scent- Statement of Profit/Loss
30 June 2015
30 June 2014
Z$ Million
Z$ Million
Revenue
1,267
1,436
Cost of goods sold
(691)
(723)
576
713
(507)
(558)
69
155
(27)
(25)
42
130
Tax expense
(54)
(57)
Profit/(loss) for the year
(12)
73
Gross profit
Selling, general and administrative expenses
Profit/loss from operations
Interest expense
Net profit/loss
141
Scent- Statement of changes in Equity
As at 30 June 2014
Share capital
Other
components
of equity
Retained
Earnings
Total
Z$ Million
Z$ Million
Z$ Million
Z$ Million
400
Loss on revaluation
104
105
(21)
609
(21)
Loss for year
(12)
(12)
Dividend
(30)
(30)
63
546
As at 30 June 2015
400
142
83
Scent- Statement of Financial Position
30 June 2015
30 June 2014
Z$ Million
Z$ Million
Non current assets
Property, plant and equipment
117
107
Brands and trademarks
316
357
32
32
465
496
Inventories
348
326
Trade receivable
157
209
54
63
559
598
1024
1094
Goodwill
Current Assets
Cash and Cash Equivalents
Total Assets
143
Scent- Statement of Financial Position
30 June 2015
30 June 2014
Z$ Million
Z$ Million
Equity
Share Capital
400
400
Revaluation reserve
83
104
Retained Earnings
63
105
546
609
295
277
52
46
347
323
Trade payables
82
111
Tax liabilities
49
51
131
162
1024
1094
Non-current liabilities
Loans
Deferred tax
Current Liabilities
Total equity and liabilities
144
Scent- Cash Flow Statement
30 June 2015
30 June 2014
Z$ Million
Z$ Million
Cash flows from operating activities
Profit before finance costs
69
155
139
90
Loss on disposal on non-current assets
5
1
Changes in inventories, trade paybl: & trade recv:
1
12
(50)
(59)
164
199
(135)
(82)
1
6
(134)
(76)
18
(25)
Dividends paid
(30)
(35)
Interest paid
(27)
(25)
(39)
(85)
Cash and cash equivalents at beginning of period
63
25
Cash and cash equivalents at end of period
54
63
Depreciation, amortisation & impairment losses
Tax paid
Net cash from operating activities
Cash flows from investing activities
Purchase of non-current assets
Proceeds of disposal of non-current assets
Net cash from investing activities
Cash flows from financing activities
Loans taken out/(repaid)
Net cash from financing activities
145
Note 1 – Geographical Segmental Report
Europe,
Middle East
& Africa
America
Asia
Total
Z$ million
Z$ million
Z$ million
Z$ million
Revenue
405
646
216
1,267
Operating profit
25
29
15
69
Revenue
17%
32%
Operating Profit
Europe,
Middle East
& Africa
22%
America
51%
36%
Europe,
Middle East
& Africa
America
42%
Asia
Asia
146
Note 1 – Product wise Segmental Report
Fine
Fragrance
Celebrity
Fragrance
Bath & Body
Fragrance
Home
Fragrance
Total
Z$ million
Z$ million
Z$ million
Z$ million
Z$ million
Revenue
380
570
228
89
1,267
Operating
profit
26
21
14
8
69
Operating profit
Revenue
Fine
Fragrance
7%
30%
18%
Celebrity
Fragrance
12%
38%
20%
Home
Fragrance
147
Celebrity
Fragrance
Bath & Body
Fragrance
Bath & Body
Fragrance
45%
Fine
Fragrance
30%
Home
Fragrance
Note 2 – Property, plant and equipment
Cost or valuation
As at 30 June 2014
Additions
Property
Equipment
Z$ Million
Z$ Million
211
331
15
72
87
(65)
(65)
(35)
As at 30 June 2015
Z$ Million
120
Disposals
Revaluation
Total
(35)
100
218
318
61
163
224
(59)
(59)
Depreciation
As at 30 June 2014
Disposals
Revaluation
(14)
Charge for year
(14)
4
46
50
51
150
201
As at 30 June 2014
49
68
117
As at 30 June 2015
59
48
107
As at 30 June 2015
Net book value
148
Note 3 – Brands and Trademarks
Property
Cost
Z$ Million
As at 30 June 2014
402
Additions
48
As at 30 June 2015
450
Amortisation and impairment losses
As at 30 June 2014
45
Impairment
54
Charge for year
35
As at 30 June 2015
134
Net book value
As at 30 June 2015
316
As at 30 June 2014
357
149
Note 3 – Brands and Trademarks
• Impairment losses are shown as part of cost of sales.
• They relate to the cost of brand names associated with
two celebrities who have been convicted of drug-related
offences.
• The fragrance ranges that bore their names are to be:
• reformulated slightly and
• relaunched with completely different names and
packaging.
150
Note 4 – Tax
• The tax expense for the year ended 30 June 2015
includes a penalty charge levied by the tax authorities in
respect of previous periods
151
LK- Statement of Profit/Loss
Revenue
30 June 2015
30 June 2014
Z$ Million
Z$ Million
847
802
(496)
(465)
351
337
(144)
(138)
Profit/loss from operations
207
199
Interest expense
(11)
(12)
Net profit/loss
196
187
Tax expense
(37)
(32)
Profit/(loss) for the year
159
155
Cost of goods sold
Gross profit
Selling, general and administrative expenses
152
LK- Statement of changes in Equity
As at 30 June 2014
Share capital
& Premium
Retained
Earnings
Total
Z$ Million
Z$ Million
Z$ Million
200
Profit for the year
Dividend
As at 30 June 2015
200
153
407
607
159
159
(124)
(124)
442
642
LK- Statement of Financial Position
30 June 2015
30 June 2014
Z$ Million
Z$ Million
Non current assets
Property, plant and equipment
94
92
205
132
18
18
317
242
Inventories
348
326
Trade receivable
157
209
54
63
559
598
876
840
Brands and trademarks
Goodwill
Current Assets
Cash and Cash Equivalents
Total Assets
154
LK - Statement of Financial Position
30 June 2015
30 June 2014
Z$ Million
Z$ Million
Equity
Share Capital
200
200
Retained Earnings
442
407
642
607
140
140
21
18
161
158
Trade payables
37
41
Tax liabilities
36
34
73
75
876
840
Non-current liabilities
Loans
Deferred tax
Current Liabilities
Total equity and liabilities
155
The end…
156