December 4, 2012

         Introduction Portfolio implications Macroeconomic review Review of Company Relevant stock market prospect Financial analysis Financial projections Application of valuation tools Recommendation

 The makeup market was worth $43.6 billion in 2007 growing at a rate of 7.1% per annum. However this sector proves to be very cyclical. The market value growth rate declined to 6.6% in 2008 and even turned negative to -3.3% in 2009. As the economy picks up, the market is expected to reverse and in 2011 many projections of the growth are approximately 3%  Decline in volume growth rate in 2008-09: The number of makeup users grew at a stable 1.2% (global population growth rate). The growth rate of consumption per user dropped from 1.4% in 2007 to 0.7% in 2008 and further down  It has been noted that the average per-unit price has declined during the recessionary times as consumers substituted lower-priced brands of a product on account of reduced disposable incomes.

Source: Consumer Confidence Jumps to Highest Level Since 2008 - http://www.bespokeinvest.com

 US is a major market for color cosmetics, amounting to over 18% of the global market size and Revlon commands over 20% share of the US market in color cosmetics.

 Anti-aging creams and anti-cellulite skin care products are in high demand among an aging population in the developed countries, notably Japan (with the oldest demographic), the US, and Western Europe.

 REV was founded in 1932. The company markets its products through its own stores, mass volume retailers, chain drug and food stores, and the internet  Product with volatiles sales periods, largely depending on the popularity of the products and advertising expenses  Recent growth primarily though acquisitions

 “ We are focused on the five elements of our business strategy, specifically, to (i) build our strong brands; (ii) develop our organizational capability; (iii) drive our company to act globally; (iv) increase our operating profit and cash flow; and (v) improve our capital structure. “ ▪ Alan T. Ennis, President and Chief Executive Officer

 After a significant bidding war in 1986, Ronald Perelman paid $1.8 billion to Revlon's shareholders for control of Revlon, which is now 75% owned by Perelman’s MacAndrews and Forbes Holdings.  Perelman had Revlon sell numerous divisions and replaced most management  Following Perelman’s acquisition, the company did not report a profitable quarter until 2007

 Brand names  Revlon  Almay  Charlie  Jean Nate  Ultima II  Gatineau  Mitchum  Products  Skin care  Bath and Body  Cosmetics  Hair Care  Fragrance Products

   Bargaining power of customers: High -Significant number of products offered by other companies.

-WMT is primary customer (~10% of sales)   Threat of New Entrants: Low -Continually low margins reduce incentive   Threat Substitute Products: High -Significant number of products   Competition within rivalry: High -Especially during recessionary times    Bargaining Power of Suppliers: Low -Chemicals, products, and packaging are provided at low margins -Evident in high gross margins at companies in industry

• • • • Strengths Strong Positioning Strong Growth Prospects Opportunities Innovation EMEA • • Weaknesses Limited Customer base Limited Operating Margin • • Threats Highly competitive market Consumer Preferences

 Current share price = $14.90

Source: Yahoo! Finance – Rev 12/3/2012

 Revlon stock performance vs. competitors Source: Google.com – REV 12/03/2012

1.

2.

3.

4.

Innovative, high-quality, consumer-preferred brand offering Effective brand communication Appropriate levels of advertising and promotion Superb execution with retail partners

1. Building our strong brands 2. Developing our organizational capability 3. Driving company to act on a global scale 4. Increasing our operating profit and cash flow 5. Improving our capital structure Source: 2011 10-K

Sales by Region

300 200 100 0 800 700 600 500 400 United States Asia Pacific Europe, Middle East and Africa 2011 2010 2009 Latin America Canada

• • • Net Sales - $1,381.4 million as of 2011 United States – 55% Outside U.S. – 45% (Canada, Australia, China, and U.K.) • • Increased $60 million (4.5%) year over year Driven by the inclusion of Sinful Colors in March 2011 • Improved profitability offset by June 2011 fire at Venezuela facility • Higher Net Sales expected for 2012 fiscal year after the acquisition of Pure Ice in July Source: 2011 10-K

• • • SG&A expenses increased $18.9 million in 2011 Driven by $17.8 million higher general and administrative expenses Fluctuations in foreign currencies Source: 2012 10-Q

Sales

COGS

Gross Profit

SG&A Other (Income)/Expense

EBIT

Interest Expense

Pre-tax Income

Income Taxes Minority Interest Preferred Dividends

Net Income Reported Income Statement Fiscal Year Ending December 31, 2009A $1,295.9

474.7

$821.2

629.1

21.3

$170.8

112.5

$58.3

8.3

1.5

$48.5

2010A $1,321.4

455.3

$866.1

666.6

(0.3)

$199.8

113.6

$86.2

6.4

$327.0

2011A $1,381.4

492.6

$888.8

685.5

-

$203.3

107.3

$96.0

36.8

6.4

$52.8

LTM 9/30/2012 $1,394.6

501.4

$893.2

700.0

21.0

$172.2

89.2

$83.0

36.0

6.4

$40.6

Weighted Avg. Diluted Shares 51.7

Diluted EPS $0.94

52.3

$6.25

52.3

$1.01

52.4

$0.78

Cash and Cash Equivalents Accounts Receivable Inventories

2011A

$101.7

212.0

111.0

Prepaids and Other Current Assets

Total Current Assets

94.0

$518.7

9/30/2012

$45.2

195.7

143.4

105.9

$490.2

Property, Plant and Equipment, net 98.9

Goodwill and Intangible Assets Other Assets

Total Assets

194.7

344.8

$1,157.1

99.9

217.7

375.8

$1,183.6

Accounts Payable Accrued Liabilities Other Current Liabilities 89.8

231.7

102.7

266.5

Total Debt Other Long-Term Liabilities

Total Liabilities

Noncontrolling Interest Preferred Stock Shareholders' Equity

Total Liabilities and Equity

1,179.3

300.8

$1,801.6

1,177.1

269.7

$1,816.0

48.4

(692.9) 48.3

$1,157.1

$1,183.6

Mid-Year Convention Sales

% growth

COGS

Gross Profit

% margin

SG&A

EBITDA

% margin

Depreciation & Amortization

EBIT

% margin

Taxes

EBIAT 2012 $1,409.0

2.0%

507.3

2013 $1,430.2

1.5%

514.9

$901.8

$915.3

Projection Period 2014 $1,458.8

2.0%

525.2

2015 $1,502.5

3.0%

540.9

64.0%

634.1

$267.7

19.0%

63.4

$204.3

14.5%

77.6

$126.7

64.0%

643.6

$271.7

19.0%

64.4

$207.4

14.5%

78.8

$128.6

2016 $1,547.6

3.0%

557.1

$933.6

$961.6

$277.2

19.0%

65.6

64.0%

656.4

$211.5

14.5%

80.4

$131.1

64.0%

676.1

$285.5

19.0%

67.6

$217.9

14.5%

82.8

$135.1

$990.5

64.0%

696.4

$294.0

19.0%

69.6

$224.4

14.5%

85.3

$139.1

Plus: Depreciation & Amortization 63.4

Less: Capital Expenditures (14.1) 8.1

64.4

(14.3) (0.6) 65.6

(14.6) (0.8) 67.6

(15.0) (1.2) 69.6

(15.5) (1.2)

Unlevered Free Cash Flow

Discount Rate Discount Period Discount Factor

$184.0

$178.1

$181.4

$186.5

$192.1

1.0

0.90

2.0

0.80

$164.9

$143.0

3.0

$130.6

$120.3

5.0

0.58

$111.0

CAGR ('11 - '16)

2.3% 2.2% 2.2% 2.0% 2.0%

Implie d Equity Va lue a nd Sha re Price

Enterprise Value Less: Total Debt Less: Preferred Securities $2,369.3

(48.3) Less: Noncontrolling Interest Plus: Cash and Cash Equivalents

Implie d Equity Va lue

45.2

$1,189.1

Fully Diluted Shares Outstanding

Implie d Sha re Price $22.71

11.0% 11.5% 12.0% 12.5% 13.0% 9.0x

20.44

19.61

18.80

18.01

17.24

Implied Share Price Exit Multiple 9.5x

22.11

21.24

20.39

19.57

18.77

10.0x

23.77

22.87

$21.99

21.13

20.29

10.5x

25.44

24.50

23.58

22.69

21.82

11.0x

27.11

26.13

25.18

24.25

23.34

Implie d Pe rpe tuity Grow th Ra te PV of Terminal Value as % of Enterprise Value Exit Multiple

Sales

% growth

COGS

Gross Profit

% margin

SG&A

EBITDA

% margin

Depreciation & Amortization

EBIT

% margin

Taxes

EBIAT

Plus: Depreciation & Amortization Less: Capital Expenditures Less: Increase in Net Working Capital

2013 $1,409.0

2.0%

507.3

$901.8

64.0%

634.1

$267.7

19.0%

63.4

$204.3

14.5%

65.0

$139.3

Projection Period 2014 $1,430.2

1.5%

514.9

$915.3

64.0%

643.6

$271.7

19.0%

64.4

$207.4

14.5%

66.0

$141.4

2015 $1,458.8

2.0%

525.2

$933.6

64.0%

656.4

$277.2

19.0%

65.6

$211.5

14.5%

67.3

$144.2

2016 $1,502.5

3.0%

540.9

$961.6

64.0%

676.1

$285.5

19.0%

67.6

$217.9

14.5%

69.3

$148.6

2017 $1,547.6

3.0%

557.1

$990.5

64.0%

696.4

$294.0

19.0%

69.6

$224.4

14.5%

71.4

$153.0

63.4

(14.1) 8.1

64.4

(14.3) 65.6

(14.6) (0.8) 67.6

(15.0) (1.2) 69.6

(15.5) (1.2)

Unlevered Free Cash Flow Present Value of Free Cash Flow $196.7

$190.9

$194.5

$200.0

$206.0

$167.4

$138.3

$119.9

$104.9

$92.0

Current Price Implied Discount Rate $15.00

17.50% Unrealistic discount rate implied by current market price after considerable reduction in debt load and very conservative revenue growth assumptions.

Target Company Revlon, Inc.

Comparable Companies

The Estée Lauder Companies Inc.

L'Oreal SA High Average Median Low

Equity Value Enterprise Value EnterpriseLTM EBITDA LTM Value Margin EBITDA NTM EBITDA Market Value LTM NTM LTM Net IncomeNet IncomeLFCF Greenblatt Ratio Earnings Yield $778 $1,958 16.55% 8.48x

6.73x

18.96x

8.96x

4.8x

10.32%

$22,926 $82,088 $23,242 $81,785 17.84% 19.33% 13.31x

15.59x

15.59x

14.45x

14.45x

13.31x

12.1x

NM 12.10x

12.10x

12.10x

12.10x

26.12x

24.93x

26.12x

25.53x

25.53x

24.93x

21.53x

NM 21.53x

21.53x

21.53x

21.53x

34.26x

40.09x

40.09x

37.18x

37.18x

34.26x

6.20% 5.39%

Implied Share Price

LTM EBITDA EBITDA Multiple

Enterprise Value

Less: Total Debt Less: Preferred Securities Plus: Cash and Cash Equivalents

Equity Value

Fully Diluted Shares Outstanding

Implied Share Price

$234.1

10.0x

$2,340.6

1177.1

48.3

45.2

$1,160.4

52.357

$22.16

 Buy 500 shares at Market  ~$7,450  DCF - $22.71

 Comps - $22.16

 Significantly undervalued due to Perelman factor, present price = $14.90