Slide 1: Coty First Quarter FY20 Results
COTY FIRST QUARTER FY20 RESULTS November 6, 2019 1
Slide 2: 1Q20: Coty in Motion
1Q20: COTY IN MOTION ▪ Turnaround activation ▪ A solid start to the year ▪ FY20 targets confirmed 2
Slide 3: Turnaround Activation: Progress to Date
TURNAROUND ACTIVATION Progress to Date BACK TO LEANER & MORE MARKETING GROSS MARGIN ALIGNED FUNDAMENTALS FOCUS ORGANIZATION ▪ 11% increase in ▪ Better alignment ▪ Organizational working media, with between sell-in and structures defined and biggest step-up in sell-out communicated Consumer Beauty, ▪
Slide 4: Operational Excellence Program Deployment
OPERATIONAL EXCELLENCE PROGRAM DEPLOYMENT Detailed review of assortment, SKU complexity, pricing architecture, brand saliency and media sufficiency 2H19 1H20 2H20 1H21 CB: Russia, Poland, CB: Mexico, CB: U.S., U.K. LATAM Canada CB: Germany, Brazil CB: Japan, Middle East Lux: philosophy, Lux: Italy,
Slide 5: Initial Positive Signals - Europe
INITIAL POSITIVE SIGNALS - EUROPE DRIVEN BY MEDIA SUPPORT AND IN-STORE EXECUTION Rimmel – U.K. Drivers of Improvement: U.K. Color Cosmetics Market Rimmel Cosmetics • Ramp-up of TV media support • Strong performance of new innovations, launched at premium pricing (Wonderluxe mascara, Lasting Matte fo
Slide 6: Initial Positive Signals - U.S.
INITIAL POSITIVE SIGNALS - U.S. DRIVEN BY MEDIA SUPPORT AND IN-STORE EXECUTION Sally Hansen – U.S. Drivers of Improvement: U.S. Nail Color & Treatment Market Sally Hansen Nail Color Sally Hansen Nail Treatment • Digital media support behind Miracle Gel 4.0% 3.6% • Nail Treatment packaging refresh 0.
Slide 7: Initial Positive Signals - Amazon U.S.
INITIAL POSITIVE SIGNALS – AMAZON U.S. • We are reaching fair share on Amazon • Strong sales growth on Amazon driven by: • Close collaboration with Amazon as part of Global Vendor Management Program • TV support for hero sub-brands • Execution focus on core Amazon SKUs Coty Share – Last 12 Weeks Cot
Slide 8: Luxury and Professional Beauty
LUXURY AND PROFESSIONAL BEAUTY Continuing to Execute on Growth Strategies LUXURY • Premiumization: Elevating brand positioning with the launch of ultra premium fragrance collections (Gucci’s Alchemist Garden, Chloé’s Atelier des Fleurs) • Category Extension: Luxury color cosmetics revenues (Gucci, B
Slide 9: 1Q20 Revenue & Operating Profit
1Q20 REVENUE & OPERATING PROFIT Results In-line with Expectations LFL NET REVENUE TREND • 1Q20 revenue trend in-line with 1Q20 1Q20 (ex Younique) guidance -0.1% -1.1% • Strong Professional Beauty and Luxury LFL, with Consumer Beauty improvement (ex- Younique) ADJUSTED OPERATING MARGIN • Gross margin
Slide 10: Luxury Brand Highlights
~~ BURBERRY LUXURY BRAND HIGHLIGHTS
Slide 11: Luxury 1Q20 Results
LUXURY 1Q20 RESULTS Strong Topline and Profit Growth ▪ Growth in Europe on low comps, while Asia & Travel Retail 1Q20 REVENUE GROWTH negatively impacted by HK protests ▪ Strong growth in Gucci, Burberry, and Hugo Boss fragrances Total Revenue LFL ▪ Solid innovation performance: 4.4% ▪ Momentum in Gu
Slide 12: Consumer Beauty Brand Highlights
CONSUMER BEAUTY BRAND HIGHLIGHTS 12
Slide 13: Consumer Beauty 1Q20 Results
CONSUMER BEAUTY 1Q20 RESULTS Gradual Improvement ▪ Step-up in A&CP 1Q20 Revenue Growth ▪ Priority brand-country combos declined low Total Revenue LFL LFL (ex Younique) single digits, fueled by +38% increase in working media -7.8% ▪ Solid Europe results balanced by weaker -9.7% ALMEA post curtailment
Slide 14: Professional Beauty Brand Highlights
PROFESSIONAL BEAUTY BRAND HIGHLIGHTS 14
Slide 15: Professional Beauty 1Q20 Results
PROFESSIONAL BEAUTY 1Q20 RESULTS Strong Revenue Growth ▪ Solid growth in Europe and North America, LFL REVENUE TREND on low comps in the US Total Revenue LFL ▪ ghd continues to deliver very good 5.1% performance, fueled by innovation and execution 2.4% ▪ Strong margin expansion - topline growth and
Slide 16: 1Q20 Coty P&L Focused on Healthier Business
1Q20 COTY P&L FOCUSED ON HEALTHIER BUSINESS ▪ Strong gross margin growth in Luxury and Professional Beauty ▪ Working media up meaningfully, while overall A&CP stable ▪ Robust adjusted operating margin expansion ▪ EPS declined YoY following a tax benefit last year Adjusted Gross Margin Adjusted Opera
Slide 17: Q1 Free Cash Flow Growth
Q1 FREE CASH FLOW GROWTH 1Q20 Adj Operating Income 155 Depreciation 95 ▪ 1Q20 FCF up significantly YoY in Adj EBITDA 250 seasonally weak period, partially helped Noncash Addbacks 64 by factoring Working Capital (incl one-off costs) (177) ▪ Dividend cash payment of $63M in 1Q20 Capex Interest (Cash)
Slide 18: FY20 Outlook: Targets Confirmed
FY20 OUTLOOK Targets Confirmed LFL NET REVENUES Stable to slightly down YoY ADJUSTED OI +5-10% YoY (At Constant Scope Strong A&CP reinvestment and Currency) ADJUSTED EPS Mid-single digit growth YoY FREE CASH FLOW Moderate improvement YoY
Slide 19: Strategic Review Next Step in Ongoing Transformation
STRATEGIC REVIEW NEXT STEP IN ONGOING TRANSFORMATION ▪ Announced Strategic Review of the Professional Beauty business and associated hair brands, as well as the Brazilian operations aimed at: ▪ Unlocking shareholder value ▪ Sharpening focus on fragrance, color cosmetics, and skincare core businesses
Slide 20: Datel
DT DATEL
Slide 21: Disclaimer
DISCLAIMER 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, among other things, Coty’s turnaround plan announced on July 1, 2019 (the “Turnaround Plan”), s