Slide 1: Update on Transaction with P&G Beauty Brands
Update on Transaction with P&G Beauty Brands Investor Presentation May 3, 2016
Slide 2: COTY's Ambition in Beauty
COTY’s Ambition in Beauty Transform COTY into a new global leader and challenger in the Beauty Industry For the ultimate benefit of shareholders! 2
Slide 3: Benefits of the Merger
BENEFITS OF THE MERGER
Slide 4: Creation of a ~$9Bn Leader and Challenger in Beauty
Creation of a ~$9 ~$9Bn Leader and Challenger in Beauty Global Beauty (1) FY15 Net Sales ($Bn ($Bn) Bn) 9.2 4.8 4.4 Pure Play Beauty Player Source: Based on Company information, Nielsen and Euromonitor data, estimates Notes: (1) Global Beauty defined as Fragrances, Color, Skin, Retail Hair Coloring
Slide 5: Creation of the Worldwide #1 in Fragrances
Creation of the Worldwide #1 in Fragrances Global Fragrances FY15 Net Sales ($Bn ($Bn) Bn) 3.5 2.2 1.3 Green L'Oréal Coty LVMH Avon Estee Lauder P&G ex D&G Boticario Chanel Pure Play Beauty Player Source: Based on Company information, Euromonitor data, estimates Notes: Non Pure Play Beauty Player (1
Slide 6: Strong Worldwide #3 Position in Color Cosmetics
Strong Worldwide #3 Position in Color Cosmetics Global Color FY15 Net Sales ($Bn ($Bn) Bn) 2.5 1.4 1.1 L'Oréal EL PF Coty Coty P&G Shiseido Avon LVMH Revlon Kao Pure Play Beauty Player Non Pure Play Beauty Player Source: Based on Company information, Euromonitor data, estimates 6
Slide 7: Addition of the Worldwide #2 in Hair Salon
Addition of the Worldwide #2 in Hair Salon Global Salon FY15 Net Sales ($Bn ($Bn) Bn) 1.4 L'Oréal P&G Henkel Kao John Paul Estee Lauder Shiseido Revlon Mitchell Pure Play Beauty Player Non Pure Play Beauty Player Source: Based on Company information, Kline data, estimates 7
Slide 8: A Well Balanced Portfolio…
A Well Balanced Portfolio… FY2015 Revenue by Business Coty ($4.4Bn) (1) P&G Beauty Brands ($4.8Bn) (2) Skin & Retail Hair & Body Care Cosmetics ($0.8Bn) ($2.1Bn) Fine Fragrances 18% 44% 27% ($1.3Bn) Fragrance 49% Color ($2.2Bn) Cosmetics 33% 29% ($1.4Bn) Salon Professional ($1.4Bn) New Coty ($9.2Bn)
Slide 9: …With a Powerful Portfolio of Brands…
…With a Powerful Portfolio of Brands… • Each of the three divisions will be anchored in 3 major brands Coty Luxury Coty Consumer Beauty Coty Professional Beauty Pro Forma FY2015 Pro Forma FY2015 Pro Forma FY2015 Revenue: $3.8Bn Revenue: $3.8Bn (1) (1 ) Revenue: $1.7Bn Note: (1) Does not include Hype
Slide 10: …With Greater Scale and More Emerging Markets Exposure
…With Greater Scale and More Emerging Markets Exposure vs. Coty (1) FY15 Change In Sales in Top 10 Markets: Coty and P&G Beauty Brands vs. Brazil 5.9x (excluding Hypermarcas) Russia 4.3x Italy 2.6x Germany 2.2x U.S. 2.0x U.K. 2.0x Canada 2.0x France 1.9x China 1.7x Australia 1.4x Markets Less than $
Slide 11: Opportunity to Accelerate Growth and Improve Profits / Cash Flow
Opportunity to Accelerate Growth and Improve Profits / Cash Flow Growth • Focused divisional structure with a more efficient and highly customer/consumer-centric organization • Emphasis on sell-out via increased digital consumer engagement, in-store excellence, and strong levels of product innovatio
Slide 12: Transaction Update
TRANSACTION UPDATE
Slide 13: Transaction Summary
Transaction Summary Structure and Consideration • Transaction proposal was valued at $12.5Bn, comprised of $9.6Bn equity and $2.9Bn debt • Assumed debt subject to a $1.0Bn adjustment within a collar based on the trading price of Coty stock (range of $22.06 to $27.06 per share) prior to the close of
Slide 14: Update on Progress
Update on Progress Transaction Milestones • S-4 registration statement filed on April 22, 2016 • Unconditional anti-trust clearance from the E.U., the U.S., and several other required countries, with the anti-trust clearance process nearly completed • Confirmed transfer of ten fragrance licenses Ope
Slide 15: A Global Leader in Beauty Led by a Very Strong Management Team
Led by a Very Strong Management Team Chairman and Interim CEO Chief Financial Officer BART BECHT PATRIC E DE TAL HOUËT President, Coty Luxury Chief Growth and Digital Officer EDGAR HUBER CAMILLO PANE A Global Leader in Beauty President, Coty Consumer Beauty President, Coty Professional Beauty ES I E
Slide 16: Financial Update
FINANCIAL UPDATE
Slide 17: Forward Looking Statements
FORWARD LOOKING STATEMENTS Certain statements in this presentation are forward-looking statements. These forward-looking statements reflect Coty Inc.’s ( “Coty’s”) current views with respect to the completion of the transaction with The Procter & Gamble Company (“P&G”). These forward-looking stateme
Slide 18: Substantial Synergies
Substantial Synergies Impact on P&G Beauty Brands Pro Forma EBITDA ($MM) Operating Savings and One- One-Time Costs • Total potential cost savings of approximately $780MM or 16% of acquired revenues, composed of two parts: 400 1,350 ~$380MM initial synergies, reflecting P&G costs that will not transf
Slide 19: Combination Drives Strong Margin Enhancement
Combination Drives Strong Margin Enhancement Adjusted Operating Profit Margins (%) With Change in FY2015 Pro Forma Before Scope and Change in Scope Run- Run-Rate Synergies ~4.3 ~18 • P&G Beauty Brands will enhance the margin 15- 15 -17 profile of Pro Forma Coty from Day 1 2 14 12 ~(0.4) • The P&G Be
Slide 20: Significant Combined Earnings Power
Significant Combined Earnings Power Pro Forma Adjusted EPS Accretion ($ / Share) Share) Excludes Purchase Price Accounting Related Amortization With Change in Scope and FY2015 Pro Forma Before Change in Scope Run- Run-Rate Synergies 0.39 1.48 – 1.53 0.83 1.20 – 1.25 0.99 (0.11) (0.57 – 0.62) Coty FY
Slide 21: Attractive Cash Flow and Return of Capital
Attractive Cash Flow and Return of Capital Cash Flow Working Capital • Anticipated ongoing pro forma free cash flow of $800-900MM at closing, more than double Coty stand-alone • Further boosted by anticipated working capital synergies of $500MM over four years (up from $200MM targeted in July 2015)
Slide 22: Summary: Shareholder Value Creation
Summary • The merger creates a pure play, new global leader & challenger in the Beauty industry with $9.2B in net revenues • Targeted to increase pro forma EPS by $0.49-0.54 by FY20 • Targeted to generate substantial pro forma free cash flow of $800-900MM, providing ample financial flexibility for t
Slide 23: Appendix
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Slide 24: P&G Beauty Brands Revenue and EBITDA Bridges
P&G Beauty Brands Revenue and EBITDA Bridges Fiscal Year 2015 Revenue Bridge $MM 6,000 5,518 5,434 (84) 4,848 5,000 (586) 4,000 (1) FY2015 S-4 P&G Divested Brands FY2015 Adjusted Revenue Excluded FY2015 Revenue Revenue Brands (2) Acquired Fiscal Year 2015 EBITDA Bridge $MM 1,500 102 1,081 379 ~950 6
Slide 25: P&G Beauty Brands Performance
P&G Beauty Brands Performance FY15 Sales Drivers— Drivers—Total $Bn 6.2 6.0 (1)% (1)% 5.6 5.5 (6)% 5.0 (1) FY14 Net Sales as Reported Organic Growth for Acquired Impact of Divested and Excluded Foreign Exchange FY15 Net Sales as Reported (2) Brands Brands 1H FY16 Sales Drivers— Drivers—Total $Bn 3.2
Slide 26: Disclaimer: Definitions and Notes
DISCLAIMER Definitions and Notes Fiscal year represents Coty’s fiscal year ended June 30. Developed Markets include North America, Western Europe and Japan. Emerging Markets include all countries other than Developed Markets. Unless otherwise specified, beauty industry revenues and Coty and P&G Beau
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