Coty Inc. · NYSE:COTY
Coty — Investor Day (April 2021)
120 slides from Coty's investor day presentation, Apr 23, 2021
Slide 1: Coty: Stabilize, Build and Grow
COTY STABILIZE, BUILD AND GROW
Slide 2: Coty Overview
| COTY OVERVIEW
Slide 3: Our Legacy in Beauty
OUR LEGACY IN BEAUTY COTY Create the best product you can, present it in a perfect container, beautifully simple but of impeccable taste, charge a reasonable price for it, and you will witness a great business arise such as the world has never seen. – François Coty 3
Slide 4: Who We Are Today
WHO WE ARE TODAY… A GLOBAL LEADER IN FRAGRANCE AND COLOR COSMETICS STRONG POSITIONS IN KEY MARKETS WITH A DIVERSE BRAND PORTFOLIO in fragrances CY20 Net Revenues in color cosmetics #2 in Prestige Fragrances #2 in Prestige Fragrances #1 in Prestige Fragrances #2 in Mass Cosmetics #1 in Mass Cosmetics
Slide 5: Sales Diversified Across Channels
SALES DIVERSIFIED ACROSS CHANNELS 17% 1H FY21 47% REVENUE MIX 36% LUXURY B&M MASS B&M CONFIDENTIAL & FOR INTERNAL USE ONLY E-COMMERCE 5
Slide 6: Sales Diversified Across Categories
SALES DIVERSIFIED ACROSS CATEGORIES BODY CARE MASS PRESTIGE FRAGRANCES COSMETICS 8% 7% PRESTIGE 3% SKINCARE 6% 1H21 REVENUE MIX 24% MASS COSMETICS 52% PRESTIGE FRAGRANCES CONFIDENTIAL & FOR INTERNAL USE ONLY 6
Slide 7: Sales Diversified Across Geographies
SALES DIVERSIFIED ACROSS GEOGRAPHIES 1H FY21 REVENUE MIX GLOBAL TRAVEL RETAIL 3% WESTERN NORTH AMERICA EUROPE (INCL. KYLIE) 28% 32% EASTERN EU & MIDDLE EAST CHINA 18% 3% APAC BRAZIL 7% & LATAM 8% 7
Slide 8: A Portfolio of Iconic Brands Across Key Price Tiers
A PORTFOLIO OF ICONIC BRANDS ACROSS KEY PRICE TIERS Kim Kardashian West SKINCARE 8
Slide 9: 116 Years of Innovation
116 YEARS OF INNOVATION IN FRAGRANCES, MAKE UP… LA ROSE JACQUEMINOT, 1st fragrance mixing natural and synthetic components (bottles by Baccarat) CHYPRE – Latest olfactive family ever invented COTY AIR SPUN FACE POWDER, the most sold cosmetics in 1930’s COTY 24 LIPSTICK, 1st long-lasting lipstick DAV
Slide 10: And Pioneering in Skin Care
AND PIONEERING IN SKIN CARE COVERGIRL launches medicated make-up ‘Clean’ LANCASTER, 1st to introduce Retinol Patent LANCASTER, 1st to introduce Dynamic Hydration LANCASTER, 1st to introduce Oxygen LANCASTER, 1st to introduce DNA Repair Claim COVERGIRL launches make-up / skincare hybrid ‘Simply Agele
Slide 11: Beauty Market Outlook
2 BEAUTY MARKET OUTLOOK
Slide 12: Beauty Is a Robust and Resilient Market
BEAUTY IS A ROBUST AND RESILIENT MARKET WITH GROWTH LED BY LUXURY LUXURY BEAUTY 2019 $119B MASS BEAUTY 2019 $187B CAGR 2017/19 +11% CAGR 2015/19 +4.4% $32B $42B +2.8% +4% $47B 17.0% 35% +20% 39% 10.6% $20B +4.1% 54.7% $102B 11.0% $21B +5.1% +4.3% 26% 6.7% $31B +8% $13B +3.5% CONFIDENTIAL & FOR INTER
Slide 13: Expect Luxury Beauty to Maintain Strong Growth
LUXURY EXPECT LUXURY BEAUTY TO MAINTAIN STRONG GROWTH, WITH SKINCARE OUTPERFORMING Expect High-Single-Digit CAGR in next 3 years High-single-digit to Low-teens CAGR 47 45 Mid-single-digit CAGR 40 FRAGRANCE 38 37 37 42 38 39 33 30 31 Mid-single-digit CAGR SKINCARE 28 27 26 25 24 MAKE-UP 21 2015 2016
Slide 14: Luxury Beauty Key Future Growth Drivers
LUXURY BEAUTY KEY FUTURE GROWTH DRIVERS CHINA MOMENTUM, LED BY GROWING DISPOSABLE INCOME, FUELING DEMAND FOR LUXURY BEAUTY AND SKINCARE STRONG E-COMMERCE ACCELERATION ULTRA PREMIUM REMAINING THE FASTEST GROWING SUBCATEGORY TRAVEL RETAIL ACCELERATING FROM A HEAVILY DEPRESSED BASE CONFIDENTIAL & FOR I
Slide 15: China Fueling Luxury Beauty Growth
CHINA FUELING LUXURY BEAUTY GROWTH CHINA LUXURY BEAUTY MARKET REACHED ~$14.5B IN CY20 / ~13% OF GLOBAL LUXURY BEAUTY MARKET, WEIGHTED TOWARD SKINCARE MARKET GREW +23% IN CY20 AND EXPECT CLOSE TO 20% GROWTH IN COMING 3 YEARS KEY CONTRIBUTING FACTORS: ▪ CHINA’S DISPOSABLE INCOME PER CAPITA EXPECTED TO
Slide 16: E-Commerce Fueling Luxury Beauty Growth
E-COMMERCE FUELING LUXURY BEAUTY GROWTH ▪ CONSUMERS GLOBALLY HAVE LEAP-FROGGED IN E-COMMERCE ADOPTION ▪ LUXURY E-COMMERCE GROWTH BEING LED BY FRAGRANCES AND SKINCARE 4QCY20 LUXURY BEAUTY E-COM MARKET SALES +67% +34% CONFIDENTIAL & FOR INTERNAL USE ONLY Source: Retail Panel Beaute Research CY20 Sell-
Slide 17: Premiumization Fueling Luxury Fragrance Growth
PREMIUMIZATION FUELING LUXURY FRAGRANCE GROWTH Luxury Fragrances Luxury Fragrances $ 4.1 Bn /-8% vs YA $ 1.1 Bn / +23% vs YA Ultra Premium 9.0% 9.9% +1% Ultra Premium 16.2% +58% 20.8% 35.8% 38.6% -1% Premium+ Premium+ +21% 63.8% 63.0% Premium 41.6% 38.6% Premium 7.4% 4.3% Low Premium 13.6% 12.9% 12.
Slide 18: Premiumization Fueling Luxury Skincare Growth in China
PREMIUMIZATION FUELING LUXURY SKINCARE GROWTH IN CHINA CY20 ULTRA PREMIUM 35% weight / +39% PREMIUM+ 19% weight / +13% TOTAL MARKET +33% Source: Retail Panel Beaute Research CY20 Sell-Out data including Ecom // NPD Sell-Out data (TMM for US) CY20 18
Slide 19: Travel Retail Recovery to Fuel Luxury Beauty Growth
TRAVEL RETAIL RECOVERY TO FUEL LUXURY BEAUTY GROWTH ▪ CY19 TRAVEL RETAIL BEAUTY MARKET REACHED $37B WITH 25% FRAGRANCES, 24% MAKE UP AND 51% SKIN CARE ▪ CY20 TRAVEL RETAIL BEAUTY MARKET DECLINED BY -50%, DRIVEN BY OVER 97% DECLINE IN INTERNATIONAL PASSENGER TRAFFIC ▪ HAINAN HAS EMERGED AS A LEADING
Slide 20: Expect Mass Beauty to Continue Moderate Growth
MASS EXPECT MASS BEAUTY TO CONTINUE MODERATE GROWTH, LED BY SKINCARE EXPANSION AND MAKE-UP RECOVERY EXPECT LOW-SINGLE-DIGIT CAGR IN NEXT 4 YEARS Low-single-digit CAGR SKINCARE 53.0bn 102 (*) 100 97 43.0bn Low-to-mid single digit CAGR MAKE-UP 32 33.0bn 31 27 23.0bn Stable market DEODORANTS 19 20 20 L
Slide 21: Mass Beauty Key Future Growth Drivers
MASS BEAUTY KEY FUTURE GROWTH DRIVERS PREMIUMIZATION DIGITAL AND E-COMMERCE ACCELERATION CLEAN, SUSTAINABLE BEAUTY SKINIFICATION OF BEAUTY ROUTINES CONFIDENTIAL & FOR INTERNAL USE ONLY 21
Slide 22: Premiumization Fueling Mass Beauty Growth
PREMIUMIZATION FUELING MASS BEAUTY GROWTH PREMIUM FRANCHISES AS % OF MASS BEAUTY SALES (B&M AND RETAILER.COM) +600bps YoY +200bps YoY CONFIDENTIAL & FOR INTERNAL USE ONLY Source: Nielsen, retailer sales data 22
Slide 23: E-Commerce Fueling Mass Beauty Growth
E-COMMERCE FUELING MASS BEAUTY GROWTH CY20 NEXT 3 YEARS B&M BEAUTY DOWN LOW SINGLE RETAIL SALES -13% YoY DIGIT CAGR AMAZON BEAUTY SALES +28% YoY UP TEENS % CAGR (U.S., U.K, Germany) CONFIDENTIAL & FOR INTERNAL USE ONLY Source: Nielsen, Profitero, internal estimates 23
Slide 24: Clean Beauty Fueling Mass Beauty Growth
CLEAN BEAUTY FUELING MASS BEAUTY GROWTH CLEAN BEAUTY ESTIMATED TO HAVE REACHED ~$36B IN 2019, ACCOUNTING FOR CLOSE TO 10% OF THE TOTAL BEAUTY MARKET CLEAN MASS COSMETICS OUTPACED OVERALL MASS COSMETICS IN THE U.S. BY 17PPS IN THE LAST 12 MONTHS BEAUTY PRODUCT LAUNCHES IN 2020 WITH CRUELTY-FREE, VEGA
Slide 25: Skinification of Beauty Routines
SKINIFICATION OF BEAUTY ROUTINES % OF FACE MAKEUP PRODUCTS WITH SPF (CY20) 68% 19% CONFIDENTIAL & CONFIDENTIAL FOR INTERNAL & FOR ONLY USE ONLY INTERNAL USE Source: Mintel, Beaute Research Sell-Out Data CY20, NPD Sell-Out data (TMM for US) CY20 24 25
Slide 26: Coty's Strategy
5 COTY’S STRATEGY
Slide 27: Our Strategic Priorities
OUR STRATEGIC PRIORITIES STABILIZE CONSUMER BEAUTY MAKE-UP BRANDS & MASS FRAGRANCES ACCELERATE LUXURY FRAGRANCES & BECOME A KEY PLAYER IN PRESTIGE MAKE UP BUILD SKINCARE PORTFOLIO ACROSS BOTH DIVISIONS BUILD E-COMMERCE AND DIRECT-TO-CONSUMER EXPERTISE AND CAPABILITIES EXPAND IN CHINA ON LUXURY AND S
Slide 28: (1) Stabilizing Consumer Beauty
BEAUTY CONSUMER (1) STABILIZING 28 CONFIDENTIAL & FOR INTERNAL USE ONLY
Slide 29: Clarified Brand Portfolio in Cosmetics
CB ENGINE CLARIFIED BRAND PORTFOLIO IN COSMETICS CONSUMER BEAUTY STABILIZATION VIA BRANDS REPOSITIONINGS NEW CLARIFIED CB BRANDS PORTFOLIO CONFIDENTIAL & FOR INTERNAL USE ONLY 29
Slide 30: Consumer Beauty Stabilization via Brand Repositionings
CB ENGINE CONSUMER BEAUTY STABILIZATION AND GROWTH VIA BRANDS REPOSITIONINGS THE UPLIFTING POWER OF MAKE UP New equity implemented in March 2021 FROM ORDINARY TO EXTRAORDINARY EACH New equity starts in June 2021 CB BRAND HAS NOW THE FREEING POWER OF MAKE UP A DISTINCTIVE SENSE New equity starts in J
Slide 31: CoverGirl – The Uplifting Power of Makeup
CB ENGINE COVERGIRL – THE UPLIFTING POWER OF MAKEUP CONFIDENTIAL & FOR INTERNAL USE ONLY 31
Slide 32: Stabilize CoverGirl
STABILIZE COVERGIRL #1 CB BRAND BY REVENUE BRAND EQUITY POSITIONING IN KEY TRENDS CONSUMER TARGETS IN-STORE EXECUTION 32
Slide 33: Beautiful, Loved, Powerful Brand
BEAUTIFUL, LOVED, POWERFUL BRAND SPONTANEOUS AWARENESS BRAND POWER INDEX 52 50 RANK: 1 332 33 32 RANK 1 2 332 220 2 3 220 201 3 201 Covergirl Maybelline Revlon L'Oreal 4 178 4 178 5 5 165 165 MAKEUP BRAND CONSUMERS MENTION 15% 9% 3% 14% 7% Source: Kantar Brand Equity 2019 33
Slide 34: Consumer-Loved Products from the Leader in Face
CONSUMER-LOVED PRODUCTS FROM THE LEADER IN FACE CLEAN FRESH SIMPLY AGELESS OUTLAST TRUBLEND Fresh, Healthy-Looking Anti-Aging Makeup for Full-Coverage 24HR Meet Your Perfect Match Skin. Vegan Mature Skin Long-Wear Foundation 61 Shades Across Matte and #1 New Foundation Launch #1 in Anti-Aging Sweat-
Slide 35: Must-Have Products for Every Eye Look
MUST-HAVE PRODUCTS FOR EVERY EYE LOOK LASH BLAST EXHIBITIONIST PERFECT POINT TRUNAKED An industry Icon. 10X Volume Our Standout New Addition Perfect Blend of Control High-pigmented shades and Versatility and endless possibilities Molded brush invented by CG 11 Straight Quarters of #1 Eyeliner Brand
Slide 36: 2018 Relaunch Took CoverGirl Away from Its Core
2018 RELAUNCH TOOK COVERGIRL AWAY FROM ITS CORE Pre - 2018 2018 - 2019 Logo + Tagline Creative Aesthetic A-List, Celebrity Lifestyle Talent Strategy 36
Slide 37: CoverGirl Correcting Prior Packaging Mistakes
COVERGIRL CORRECTING PRIOR PACKAGING MISTAKES BEFORE 2019 2021 37
Slide 38: CoverGirl Harnessing Our Equity to Propel into the Future
NOW, COVERGIRL IS HARNESSING OUR EQUITY TO PROPEL INTO THE FUTURE 2018 - 2019 2019 – 2021 and beyond Logo + Tagline EASY BREEZY BEAUTIFUL Creative Aesthetic Mainly A-List, Talent Strategy Lifestyle Epitomize healthy & carefree American beauty 38
Slide 39: Turnaround Strategy Rooted in Key Pillars
TURNAROUND STRATEGY ROOTED IN KEY PILLARS WINNING WINNING IN WINNING WITH WINNING IN IN MAKEUP HISPANIC OMNI-CHANNEL CLEAN BEAUTY “SKINIFICATION” CONSUMERS LANDSCAPE 39
Slide 40: CoverGirl Clean Fresh
COVERGIRL CLEAN FRESH THE NEW GENERATION OF EASY BREEZY BEAUTIFUL ▪ LAUNCHED IN SPRING 2020 ▪ SHOW OFF FRESH, HEALTHY, NATURAL SKIN ▪ FORMULATED WITHOUT PARABENS, SULFATES, PHTHALATES & TALC ▪ INFUSED WITH COCONUT MILK & ALOE #1 FOUNDATION LAUNCH OF SPRING ‘20 2X TRIAL RATE 125 INDEX VS. CLOSEST COM
Slide 41: Lash Blast Clean Mascara
LASH BLAST CLEAN MASCARA AN INDUSTRY ICON, NOW IN A CLEAN FORMULA • LAUNCHED IN DECEMBER 2020 • UP TO 10X VOLUME • FREE FROM PARABENS, SULFATES, TALC AND MINERAL OIL • CLUMP-PROOF, WEAR-PROOF FORMULA LASTS ALL DAY +49% AHEAD OF LAUNCH PLAN TOP 4 CUSTOMERS + AMAZON #2 COVERGIRL MASCARA ACCELERATING T
Slide 42: Fresh Start, Returning CoverGirl to the Blue Skies
IT WAS TIME FOR A FRESH START, RETURNING COVERGIRL TO THE BLUE SKIES AND FRESH AIR WHICH FIRST MADE HER FAMOUS, AND WHICH AMERICA IS LONGING FOR, AFTER A YEAR OF BEING INSIDE. THIS WILL BE THE BRAND THAT BRINGS CLEAN BEAUTY TO ALL CG LILI REINHART VIDEO
Slide 43: Total Clean Fresh + Lash Blast Clean Retail Sales
5/23/2020 5/30/2020 6/6/2020 6/13/2020 6/20/2020 6/27/2020 Source: Nielsen USA, weekly data to 20th March 2021 7/4/2020 7/11/2020 7/18/2020 7/25/2020 8/1/2020 8/8/2020 8/15/2020 8/22/2020 8/29/2020 9/5/2020 9/12/2020 9/19/2020 9/26/2020 #2 PLAYER IN CLEAN COSMETICS 10/3/2020 10/10/2020 10/17/2020 10
Slide 44: CoverGirl Leading Makeup Skinification with Simply Ageless
COVERGIRL LEADING THE MAKEUP SKINIFICATION TREND WITH SIMPLY AGELESS FRANCHISE ▪ COVERGIRL INVENTED MAKE-UP/SKINCARE HYBRID PRODUCTS (2009) ▪ SIMPLY AGELESS ALREADY THE #1 ANTI-AGING FOUNDATION IN AMERICA ▪ FOCUS NOW ON ELEVATING THE FRANCHISE AS SKINCARE-POWERED MAKEUP GAINS MOMENTUM 44
Slide 45: New Simply Ageless Campaign Airing End of April
NEW SIMPLY AGELESS CAMPAIGN AIRING END OF APRIL NIKI TAYLOR, THE ICONIC COVERGIRL SPOKESPERSON FROM THE 90S, TO BE THE FACE OF THE NEW SIMPLY AGELESS CAMPAIGN CAMPAIGN TAPS INTO KEY INSIGHTS: ▪ POWER OF NOSTALGIA IN PROMOTING BRAND TRUST POST COVID ▪ COVERGIRL’S 60TH BIRTHDAY THIS YEAR ▪ SIMPLY AGEL
Slide 46: Multi-Pronged Strategy to Win with Hispanic Consumers
MULTI-PRONGED STRATEGY TO WIN WITH HISPANIC CONSUMERS ▪ HISPANIC POPULATION ACCOUNTS FOR ~18% OF THE U.S. POPULATION AND IS THE FASTEST GROWING SEGMENT ▪ THESE CONSUMERS OVER-INDEX ON BEAUTY PURCHASES BUT HAVE BEEN SWITCHING FROM TRADITIONAL RETAIL CHANNELS & BRANDS TO SPECIALTY CHANNELS & NICHE BRA
Slide 47: Focus on Magnificent 8
FOCUS ON MAGNIFICENT 8 COVERGIRL $ SELL-OUT MAGNIFICENT 8 REPRESENT ALL CLEAN ~ 70% OF THE BUSINESS OTHERS & PERFORMING IN LINE WITH THE MASS COLOR COSMETICS MAGNIFICENT LASH CATEGORY BLAST EYE EIGHT ENHANCER PERFECT STABLE COVERGIRL SHELF POINT TRUE SPACE IN SPRING 2021 AND OUTLAST BLEND LIKELY FAL
Slide 48: More Focused Media Allocation
MORE FOCUSED MEDIA ALLOCATION Lashblast / Clean 100% 90% 23% Simply Ageless Olay 80% 37% 70% 60% Trublend 22% 60% 18% 50% Spectrum 20% 40% 16% 30% 18% Portfolio 24% 17% 20% 10% 22% 12% Outlast 9% 0% FY19 FY20 FY21 Exhib CONFIDENTIAL & FOR INTERNAL USE ONLY 48
Slide 49: We Continue to Hold Shelf Space in 2021
WE CONTINUE TO HOLD SHELF SPACE IN 2021 49
Slide 50: CoverGirl Rolling Out New Walls from April 2021
COVERGIRL ROLLING OUT NEW NEW WALLS FROM APRIL 2021 FIXTURE SYSTEM EXISTING FIXTURE SYSTEM 50
Slide 51: Clean Portfolio Enabling CoverGirl to Win in E-Com
CLEAN PORTFOLIO ENABLING COVERGIRL TO WIN IN E-COM ▪ IN DEC. Q, COVERGIRL SELL-OUT ON AMAZON: +45% (VS. CATEGORY +36%) YOY ▪ MOST E-RETAILERS ARE BUILDING CLEAN FLAGSHIPS, WITH COVERGIRL PROVIDING SUPPORT ▪ US E-COMMERCE TEAM WON CLEAN BEAUTY CATEGORY LEADERSHIP WITH KEY ONLINE RETAILERS LOOKFANTAST
Slide 52: Total CoverGirl Retail Sales Rebounding in March
TOTAL COVERGIRL RETAIL SALES REBOUNDING IN MARCH BRAND RESPONDING TO REPOSITIONING, MEDIA CAMPAIGN AND INNOVATION 14,000,000 National Media 80% campaign goes live Average weekly sales in 12,000,000 60% March 2021 +26% vs. average weekly sales 10,000,000 40% April 2020 – Feb 2021 20% % Change 8,000,0
Slide 53: Sally Hansen – Salon Expertise at Affordable Price
CB ENGINE SALLY HANSEN – SALON EXPERTISE AT AFFORDABLE PRICE 53
Slide 54: Sally Hansen Expanding Its Nail Leadership
SALLY HANSEN EXPANDING ITS NAIL LEADERSHIP #3 CB BRAND BY REVENUE SUPPORTED BY CONTINUED GROWTH IN DEMAND FOR AT-HOME MANICURES GOOD.KIND.PURE LAUNCH STELLAR RESULTS: #1 CLEAN COSMETICS FRANCHISE IN THE U.S. #2 LAUNCH IN TOTAL U.S. MASS COSMETICS IN CY20 CONFIDENTIAL & FOR INTERNAL USE ONLY 54
Slide 55: Sally Hansen Winning Globally in Cosmetics
SALLY HANSEN WINNING GLOBALLY IN COSMETICS Sally Hansen Color Cosmetics Market Share Gains (B&M) Sally Hansen has gained market share across many key markets in North America, EMEA, and APAC, 160 bps 160 bps led by rise in at-home nail care 150 bps 140 bps 110 bps 100 bps 60 bps 60 bps 60 bps 30 bps
Slide 56: Rimmel – The Freeing Power of Makeup
CB ENGINE RIMMEL – THE FREEING POWER OF MAKEUP 56
Slide 57: Strengthen Rimmel
STRENGTHEN RIMMEL #2 CB BRAND BY REVENUE RIMMEL HAS LED UK MASS COSMETICS AS THE #1 BRAND FOR MANY YEARS POSITIONING HAS BECOME SUBDUED / NEEDED A REFRESH WILL LEAD THE « CLEAN » TREND IN EUROPE ‘OLD CG’ VIDEO 57
Slide 58: Rimmel Had Started to Become Apologetic
RIMMEL RIMMEL RIMMEL LONDON LONDON LONDON i foe ASCFTMATIE THATLASTS LASTINGANSHIVATIE RIMMEL HAD STARTED TO BECOME APOLOGETIC.... BANAL AND TAME | FLor LASTINGANSH25+ RFQUNDATIN
Slide 59: Rimmel – The Freeing Power of Makeup
RIMMEL – THE FREEING POWER OF MAKEUP RIMMEL EQUITY VIDEO
Slide 60: Rimmel Winning in the UK, Gaining Share in Europe
RIMMEL WINNING IN THE UK, GAINING SHARE IN EUROPE Rimmel UK Market Share (B&M) 35% 10% 30% 8% RIMMEL HAS ACHIEVED 20 CONSECUTIVE 25% 6% 20% MONTHS OF SHARE GROWTH AS THE 15% 4% 2% UK’S #1 BRAND 10% 0% 5% 0% -2% 05.12.20 30.01.21 04.01.20 18.07.20 23.05.20 01.02.20 29.02.20 20.06.20 28.03.20 15.08.20
Slide 61: Max Factor – From Ordinary to Extraordinary
CB ENGINE MAX FACTOR – FROM ORDINARY TO EXTRAORDINARY 61
Slide 62: Reigniting Max Factor
REIGNITING MAX FACTOR #5 CB BRAND BY REVENUE ➢ “From Ordinary to Extraordinary” Signing a key brand ambassador with ~80M followers to be announced soon Positive channel feedback: ➢ Great retailer reception to repositioning plan ➢ Already sell-out on Amazon in the UK and Germany has been growing doub
Slide 63: Max Factor Became Ordinary
Shade, High 1 fresh . siyle & definition, finish in finish - minimum seconds . allin one effort MAX FACTOR © MAX FACTOR NEW NEW MAX FACTOR Max Factor became ORDINARY.
Slide 64: We Will Polish the Max Factor Star to Be Bright Again
WE WILL POLISH THE MAX FACTOR STAR TO BE BRIGHT AGAIN MF EQUITY VIDEO
Slide 65: Injecting Colour Through Sensorial Textures
INJECTING COLOUR THROUGH SENSORIAL TEXTURES Please note, all images you see are unretouched low res IN STORE IN JUNE 2021
Slide 66: Injecting Colour Through Sensorial Textures
INJECTING COLOUR THROUGH SENSORIAL TEXTURES Please note, all images you see are unretouched low res IN STORE IN JUNE 2021
Slide 67: Model Visuals – Application/Close Up
MODEL VISUALS –APPLICATION/CLOSE UP IN STORE IN JUNE 2021
Slide 68: Build Adidas into 'Self-Care' Powerhouse
BUILD ADIDAS INTO ‘SELF-CARE’ POWERHOUSE #4 CB BRAND BY REVENUE ▪ Adidas brand currently anchored in shower gels, deodorants and mass fragrances ▪ Our brand studies confirm Adidas is viewed as Aspirational amongst German and Chinese consumers, and Mainstream by US consumers 68
Slide 69: Build Adidas into 'Self-Care' Powerhouse
BUILD ADIDAS INTO ‘SELF-CARE’ POWERHOUSE #4 CB BRAND BY REVENUE ACTIVE SKINCARE ACTIVE BODYCARE BODY CLEANSING 69
Slide 70: Adidas Greenshoots
ADIDAS GREENSHOOTS Market Share Improvement in Select Regions Stellar China E-Commerce Performance Adidas Deodorant Market Share Change (B&M) 2.7 1.9 0.5 0.2 -0.5 -0.3 Tmall CNY JD.com Sales Vol Germany Poland Last 12 Months Last 3 Months Last 1 Month 70 Source: Nielsen, ending Jan 2021
Slide 71: Strong Portfolio of Local Brazil Brands
STRONG PORTFOLIO OF LOCAL BRAZIL BRANDS #1 Nail brand in Brazil mass #2 Female deo brand cosmetics #1 Shaving brand #2 body lotion brand Mainstream to Premium Value to Mainstream price tier Value price tier price tier 71
Slide 72: Local Brazil Brands Continuing to Win
LOCAL BRAZIL BRANDS CONTINUING TO WIN Brazil Sell-Out Growth & Market Share (B&M) DESPITE COVID IMPACT, LOCAL COTY 12% 6.8% BRAZILIAN BRANDS ARE GROW AND 10% GAINING MARKET SHARE 8% 6.7% 6% 6.6% 4% 2% 0% FY20 FY21 YTD Last 2 Months FOR THE MOST RECENT PERIOD (JAN- Sell-Out Growth yoy Market Share FE
Slide 73: Path to Stabilizing Consumer Beauty
PATH TO STABILIZING CONSUMER BEAUTY ▪ TOP 5 BRANDS IN CONSUMER BEAUTY (COVERGIRL, RIMMEL, SALLY HANSEN, ADIDAS, AND MAX FACTOR) ACCOUNT FOR ~70% OF THE CONSUMER BEAUTY PORTFOLIO ▪ STRATEGIC WORK TO REPOSITION EACH BRAND HAS BEEN COMPLETED: - REPOSITIONING PLANS IN PLACE - ALREADY SIGNING NEW BRAND A
Slide 74: (2) Accelerate in Luxury Fragrances & Build Prestige Makeup Portfolio
(2) ACCELERATE IN LUXURY FRAGRANCES & BUILD PRESTIGE MAKEUP PORTFOLIO 74
Slide 75: Well Positioned to Drive Strong Growth in Luxury Fragrances
WELL POSITIONED TO DRIVE STRONG GROWTH IN LUXURY FRAGRANCES ▪ 3 brands in Top 10 female fragrances and 2 brands in Top 10 male fragrances in CY20 ▪ Marc Jacobs Perfect #1 fragrance launch of CY20 in U.S. and U.K. ▪ Hugo Boss Alive best female fragrance launch in Germany over last 3 years ▪ No major
Slide 76: Focusing on New Iconic Female Franchises and Artisanal Fragrances
FOCUSING NOW ON NEW ICONIC FEMALE FRANCHISES AND EXPANDING IN ARTISANAL FRAGRANCES MALE FRAGRANCES FEMALE FRAGRANCES ARTISANAL FRAGRANCES ~33% of Luxury ~67% of Luxury ~10-20% of Luxury Fragrances, Fragrance market Fragrance market depending on the market Coty leads segment with iconic Coty is stron
Slide 77: Scale Presence in Ultra-Premium, Artisanal Fragrances
SCALE PRESENCE IN ULTRA-PREMIUM, ARTISANAL FRAGRANCES Several portfolio brands have proven their ability to extend into ultra premium artisanal fragrances Small but growing part of Coty’s fragrance portfolio Gucci – The Alchemist’s Garden: Chloe Atelier des Fleurs: ➢ Launched in 2019 ➢ #1 productivi
Slide 78: Starting to Build Prestige Cosmetics Portfolio
STARTING TO BUILD PRESTIGE COSMETICS PORTFOLIO PREMIUM+ ENTRY PRESTIGE 78
Slide 79: Strong Progress Already in Prestige Cosmetics
STRONG PROGRESS ALREADY IN PRESTIGE COSMETICS Gucci Cosmetics Gucci foundation has sold >60K units globally in just 2 months In last 9 months, Gucci cosmetics sell-out in the U.S. grew over 110% and in Asia Pacific grew over 50% Burberry Cosmetics Burberry make-up retail sales +48% in China and gain
Slide 80: Already High-Door Productivity
ALREADY HIGH-DOOR PRODUCTIVITY SHANGHAI - IFC 222 SKUs 155 SKUs 613 SKUs Source: Beauté Research sell-out data, CY20 period 80
Slide 81: (3) Build Skincare Portfolio in Both Divisions
(3) BUILD SKINCARE PORTFOLIO IN BOTH DIVISIONS 81
Slide 82: Future Portfolio Should Address Key Trends
FUTURE PORTFOLIO SHOULD ADDRESS KEY TRENDS GREEN/CLEAN/ DERMATOLOGY-LED REGENERATIVE GEN-Z VEGAN/SUSTAINABLE SOLUTIONS MEDICINE BRANDS CONFIDENTIAL & FOR INTERNAL USE ONLY 82
Slide 83: Coty Has Strong IP in Skincare
COTY HAS STRONG IP IN SKINCARE LIGHT AND ENVIRONMENTAL AGEING PROTECTION • Unique combination of ingredients which neutralizes harmful effect of all sun rays (UVA+UVB+VIS, IR) not only UV • Broadest Sun Protection ever developed • Protects against Blue Light • Adaptable to Skin & Color Category VECT
Slide 84: Coty Has Strong IP in Skincare
COTY HAS STRONG IP IN SKINCARE REGENERATIVE med-inspired • Unique combination of repairing enzymes from natural origin • Vectorized through a unique liposome allowing to reach the core of the cell, the nucleus • Contributes to minimize daily damage and preserve skin youth THE SCIENCE OF LONGWEAR/MAT
Slide 85: We Can Build a Comprehensive Skincare Portfolio
WE CAN BUILD A COMPREHENSIVE SKINCARE PORTFOLIO DESIGNERS’ SKIN CARE DESIGNER BRANDS THE REGENERATIVE MEDICINE EXPERT Kim Kardashian West MOST POPULAR PROCEDURES-INSPIRED SC SKINCARE THE GREEN + CLEAN CEUTICAL SC SKIN THE GEN-Z DESTINATION CONFIDENTIAL & FOR INTERNAL USE ONLY BASIC AND PERFORMANCE S
Slide 86: Philosophy
PHILOSOPHY From a US centric wellbeing beauty brand To a leader in green, clean ceutical skincare
Slide 87: Lancaster
ZANCASTER MONACO
Slide 88: Lancaster Skincare Firsts
2015 – 1ST TO COMBINE 1976 – 1ST TO 1993 – 1ST TO GENETIC & EPIGENETIC IN INTRODUCE RETINOL INTRODUCE OXYGEN REPAIR TECHNOLOGY 88
Slide 89: From a Regional UV Protection Brand (Currently)
FROM A REGIONAL UV PROTECTION BRAND (CURRENTLY) 89
Slide 90: To a Brand Positioned in Premium + Regenerative Skincare
TO A BRAND THAT IS POSITIONED IN PREMIUM + REGENERATIVE SKINCARE HIGH-END HERITAGE - In 1965, Lancaster became the exclusive beauty provider to her Serene Highness Princess Grace of Monaco - The brand pioneered skincare technology in: light protection, vectorization of dermotological grade actives,
Slide 91: Lancaster Already Anchored in Skincare in China
LANCASTER ALREADY ANCHORED IN SKINCARE IN CHINA 91
Slide 92: (5) Build E-Commerce and DTC
(5) BUILD E- COMMERCE AND DTC 92
Slide 93: Already Strong in Retailer.com and Pure-Players
ALREADY STRONG IN RETAILER.COM AND PURE-PLAYERS ▪ E-COMMERCE ALREADY 17% OF SALES IN 1H21 AND 19% IN Q2 ▪ GROWING OVER 40% ▪ E-COMMERCE CURRENTLY ~50% PURE-PLAYERS, ~33% RETAILER.COM, AND ~13% DTC ▪ STRONGLY MARGIN ACCRETIVE CONFIDENTIAL & FOR INTERNAL USE ONLY 93
Slide 94: Coty Winning on Amazon
COTY WINNING ON CONFIDENTIAL & FOR INTERNAL USE ONLY Source: Profitero, covering Amazon sales in US, UK, and Germany 94
Slide 95: Driving Huge Reach Through a Holistic Social Ecosystem
DRIVING HUGE REACH THROUGH A HOLISTIC SOCIAL ECOSYSTEM COTY BRANDS FASHION HOUSES CORE TALENTS 5M IG FOLLOWERS 3M IG FOLLOWERS 42M IG FOLLOWERS 10M IG FOLLOWERS 2M IG FOLLOWERS 2.4M IG FOLLOWERS 21M IG FOLLOWERS KIM KARDASHIAN HARRY STYLES DAVID BECKHAM 193M IG FOLLOWERS 34M IG FOLLOWERS 65M IG FOLL
Slide 96: Be Consumer Centric Through Real Time Social Listening
BE CONSUMER CENTRIC THROUGH REAL TIME SOCIAL LISTENING Deployment of a full suite of solutions and dashboards and qualitative/quantitative analysis to inform the business in real time on: BRAND SENTIMENT & Measure brand equity and perception REPUTATION PRODUCTS CONSUMER Measure product evaluation in
Slide 97: Envisioned DTC Journey
ENVISIONED DTC JOURNEY GO BIG IN US (Owned Websites) FY22 GO BIG IN CHINA (Tmall Flagship stores) FY22 KIM SKIN • Launch our fully New Kylie D2C website -Q1 FY22 • Unlock the full potential of Gucci • Kick off of our Kim Skincare D2C -FY22 • Maximize the revenue on Burberry • Bring Philosophy D2C of
Slide 98: Advocacy & Social Commerce Priorities
ADVOCACY & SOCIAL COMMERCE PRIORITIES THE EDGY PILOTS COTY IS ON ADVOCACY: SOCIAL COMMERCE: CAPITALIZE ON ORGANIC BETA TESTERS AND LEAD FOR ADVOCATES TO BOOST SALES AMAZON BEAUTY LIVE EVENTS LIVESTREAMING: SOCIAL COMMERCE: MASTER LIVESTREAMING SEAMLESS SHOPPING EVENTS WITH PUBLISHERS EXPERIENCE ON S
Slide 99: From Natural Advocacy to Commerce
FROM NATURAL ADVOCACY TO COMMERCE SIMPLY AGELESS GOING VIRAL ON TIKTOK STARTING FROM A POST FROM A MICRO INFLUENCER, BRAND ADVOCATED ORGANIC TIKTOK BUZZ QUICK BOOST PLAN WRINKLE DEFY SKU EXPLODES! Creator Content Compared Wrinkle US-Canada Partnered to Drive Action Sales Gains Across All Key Retaile
Slide 100: (5) Expand in China
(5) EXPAND IN CHINA 100 CONFIDENTIAL & FOR INTERNAL USE ONLY
Slide 101: Highly Desirable Fragrance Brands in China
HIGHLY DESIRABLE FRAGRANCE BRANDS IN CHINA GUCCI CALVIN KLEIN BURBERRY FRAGRANCES FRAGRANCES FRAGRANCES 1 CONFIDENTIAL & FOR INTERNAL USE ONLY Source: Beaute Research, 4QCY20 covering department stores and stand-alone boutiques 101 1: At November 2020 launch
Slide 102: Leading Artisanal Fragrance Brands in China
LEADING ARTISANAL FRAGRANCE BRANDS IN CHINA Chloé Atelier des Fleurs Tiffany & Co Bottega Veneta #1 productivity in China Sephora #5 fragrance brand in China amongst artisanal fragrances Sephora Brand revenues in China 3Q YTD Chloé revenues in China 3Q YTD >60% YoY and >40% vs. FY19 Brand revenues i
Slide 103: Growing Footprint in Prestige Cosmetics & Skincare
GROWING FOOTPRINT IN PRESTIGE COSMETICS & SKINCARE Gucci Make-Up Burberry Make-Up Lancaster Leading suncare brand, moving into CONFIDENTIAL & FOR INTERNAL USE ONLY Source: Beaute Research, 4QCY20 covering department stores and stand-alone boutiques 103
Slide 104: Spectacular Initial Results from Gucci Beauty on Tmall
SPECTACULAR INITIAL RESULTS FROM GUCCI BEAUTY ON TMALL Very strong grand opening sell-out: A Top 4 performance for luxury beauty brand grand opening since 2018, with strong performance of key lines during the opening period: #1 lipstick on March 14 & 15, #4 in face category, #1 beauty powder, #1 fra
Slide 105: Coty Expanding in Hainan
COTY EXPANDING IN HAINAN Rapid footprint expansion in Hainan: ➢ 7 downtown stores and 1 airport store currently open and active ➢ 1 downtown store and 1 airport store opening by end CY21 Gucci and Burberry sell-out in CY20 at 3X CY19 Informal feedback from retailer suggests both Gucci and Burberry r
Slide 106: (6) Become a Beauty Leader in Sustainability
(6) BECOME A BEAUTY LEADER IN SUSTAINABILITY 106
Slide 107: Sustainability Is Driving Product Innovation
THE BEAUTY OF OUR PRODUCT: SUSTAINABILITY IS DRIVING PRODUCT INNOVATION THE ‘BEAUTY THAT LASTS’ INDEX: integrating sustainability criteria into packaging and formula development for ALL new products 107
Slide 108: The Beauty of Our Planet: The Example of LanzaTech
THE BEAUTY OF OUR PLANET: THE EXAMPLE OF LANZATECH • Over two years, perfected a process that recycles carbon into ethanol - purified for use in perfume. This is the ultimate upcycling and a true industry first • Carbon-captured ethanol utilizes near-zero water consumption and significantly lowers C
Slide 109: Accelerating Our DE&I Strategy
THE BEAUTY OF OUR PEOPLE: ACCELERATING OUR DE&I STRATEGY First successes + new targets! New pay equity Development of new responsible Majority commitment - to ensure marketing guidelines and playbook: female we pay equitably including promoting positive body Board and for similar roles and types, di
Slide 110: Financial Framework
4 FINANCIAL FRAMEWORK
Slide 111: FY21 Revenue Baseline Impacted; EBITDA Target Confirmed
FY21 REVENUE BASELINE IMPACTED BY STRUCTURE AND COVID; EBITDA TARGET CONFIRMED NET REVENUE AND EBITDA MARGINS ▪ On track to end FY21 with net $6.3B revenues of ~$4.5-4.6B ~16-17% ~$0.3B Adj EBITDA ▪ ~$2.0B of net revenues in 2H21 ~$0.3B Margin approximately evenly split ~$4.5-4.6B ~$0.1B between Q3
Slide 112: Luxury Business to Drive Future Revenue & Profit Growth
LUXURY BUSINESS TO DRIVE FUTURE REVENUE & PROFIT GROWTH SKINCARE CHINA PRESTIGE COSMETICS (Prestige + Mass; (% of Total Net Revenues) (% of Total Net Revenues) % of Total Net Revenues) High Single Over 10% Over 10% Digit % ~6% ~3% ~3% FY21 FY25 FY21 FY25 FY21 FY25 Est Target Est Target Est Target 11
Slide 113: Confirming CY21 Leverage Target
CONFIRMING CY21 LEVERAGE TARGET 3Q FY21 4Q FY21 / 1H FY22 CY20 NET 3Q FY21 CY21 DEBT KKW transaction NET DEBT EBITDA expansion LEVERAGE +$200M Working capital Wella WC negative improvement led by Towards reversal over $100M $4.8B ~$5.1B inventory 5x Seasonal free cash Other cash initiatives outflow,
Slide 114: Successful Bond Issuance Extends Maturities
SUCCESSFUL BOND ISSUANCE EXTENDS MATURITIES ▪ ON APRIL 21, COMPLETED THE ISSUANCE OF $900M OF 5% SENIOR SECURED NOTES DUE IN 2026 ▪ VERY STRONG DEMAND RESULTED IN BOND OFFERING BEING UPSIZED TO $900M FROM INITIAL EXPECTATION OF $750M ▪ PROCEEDS ARE NET LEVERAGE NEUTRAL AND WILL BE USED TO PAYDOWN FY
Slide 115: Multiple Levers to Further Improve Leverage and FCF
MULTIPLE LEVERS TO FURTHER IMPROVE LEVERAGE AND FCF EBITDA EXPANSION STEADY GROWTH DRIVEN BY REVENUE ACCELERATION AND MARGIN IMPROVEMENT WORKING CAPITAL IMPROVEMENT SIGNIFICANT OPPORTUNITY IN INVENTORY; FURTHER OPTIMIZATION OF RECEIVABLES MONETIZATION OF ASSETS OPPORTUNITIES TO MONETIZE SOME PP&E AN
Slide 116: Conclusion
5 CONCLUSION
Slide 117: Coty: A Unique Beauty Company at an Inflection Point
COTY: A UNIQUE BEAUTY COMPANY AT AN INFLECTION POINT FOR SALES & PROFIT GROWTH ONE OF THE MOST BEAUTIFUL PORTFOLIOS, WITH TWO COMPLIMENTARY DIVISIONS ▪ Our new strategy, presented today, has clarified the Coty story and set a clear path toward value creation ▪ We have one of the most beautiful & com
Slide 118: Coty: A Unique Beauty Company at an Inflection Point
COTY: A UNIQUE BEAUTY COMPANY AT AN INFLECTION POINT FOR SALES & PROFIT GROWTH A NEW SENSE OF URGENCY ▪ We have reinvented brand equities across key Consumer Beauty brands in the last 7 months ▪ Action plans already being implemented, with a reveal of all repositionings before end of CY21 ▪ A new se
Slide 119: Disclaimer
DISCLAIMER Forward-Looking Statements Certain statements in this presentation are forward-looking statements. These forward-looking statements reflect the Company's current views with respect to, among other things, the impact of COVID-19 and potential recovery scenarios, the Company’s comprehensive
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