Slide 1: Coty Third Quarter FY20 Results
e4 COTY THIRD QUARTER) FY20 RESULTS / Y/ May 11, 2020
Slide 2: Thank You
THANK YOU Coty teams continue to show strong commitment, energy and solidarity Hydro-alcoholic hand sanitizer produced in 12 plants in 10 countries and donated to frontline workers Coty brands donating gloves, caps, and shampoo to local hospitals Numerous relief funds established globally
Slide 3: Accelerating Our Transformation
ACCELERATING OUR TRANSFORMATION Announcing a Strategic Partnership with KKR: > $750M Convertible Preferred shares subscribed by KKR-immediate strong liquidity > Exclusive talks for a 60/40 partnership on Professional Beauty & Retail Hair for enterprise value of $4.3B (12.3x FY19 EBITDA) Q3 LFL net r
Slide 4: Strategic Review
STRATEGIC REVIEW Scope of Partnership with KKR: = Professional Beauty and Retail Hair = Generated $2.35B of sales and ~$350M of EBITDA in FY19 = Brazil mass beauty operations to remain fully with Coty Valuation: = Strategic partnership, with KKR owning 60%/Coty 40% = Enterprise value of $4.3B = Expe
Slide 5: Strong Liquidity Position
STRONG LIQUIDITY POSITION ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ 5
Slide 6: Accelerated Transformation: Fixed Cost Reduction of $700M by FY23
ACCELERATED TRANSFORMATION Amplify Turnaround — Fixed Cost Reduction of $700M by FY23 MAKE COTY End to end supply Adapt to demand Increase flexibility Reduce cost Business services -30% Cut discretionary spend Rationalize A&CP/ Re-invest 50% of savings Organizational simplification Further simplify
Slide 7: Accelerated Transformation: Make Coty More Efficient
ACCELERATED TRANSFORMATION Make Coty: More Efficient Avg utilization <40% Network optimization Over 30K product flow combos Portfolio complexity >50K SKUs Speed to market Accelerate by 20% Target fixed cost reduction (>S1B base ae 50% fixed) Detailed roadmap ready by end August COTY
Slide 8: Accelerated Transformation: Make Coty Fit for Growth
ACCELERATED TRANSFORMATION Make Coty: Fit for Growth A&CP Business Services * Global media negotiation * Reduce cost of network: real estate, IT, T&Es... * Platforming marketing materials * Reduce external services & projects * Increased spend accountability * Target next quartile benchmark Reinvest
Slide 9: Accelerated Transformation: Make Coty Simpler
ACCELERATED TRANSFORMATION Make Coty: Simpler Accelerate organizational | simplification $180M / Majority by end FY21 ever age Coty n Perating Massive process simplification Competitive, affordable Adapt parameters to new compensation environment Leverage / grow internal Push internal opportunities
Slide 10: 3Q20 Results Snapshot
3Q20 RESULTS SNAPSHOT LFL Net Operating EPS Free Cash Revenue Income Flow 3 Months -20% SOM ($0.08) ($319M) \ 9 Months -7% $480M $0.25 ($2M)
Slide 11: Strong Innovation Results
STRONG INNOVATION RESULTS COVERGIRL BOSS ck Huco Boss Calvinklein Boss Alive the #1 female scent CK Everyone a Top 3 Amazon U.S. up to #3 in Germany after only 4 weeks launch at Macy's and a from #4 Top 5 launch in units in Mass cosmetics ranking on Clean Fresh the #1 RIMMEL. Sal tfansen. oo Canada
Slide 12: Mkt -19% Mkt -2% Mkt +9%
▪ 110 10 -60 Mkt -19% Mkt -2% Mkt +9% 323% 26% 259% 25% 164% 22% 114% 12
Slide 13: 3Q20 Revenue
▪ ▪ 3Q20 REVENUE Mkt -17% -17% -25% UK Germany U.K. Germany MEA Russia 13
Slide 14: Asia Pacific 3Q20 Results
ASIA PACIFIC 3Q20 RESULTS COVID Driven Pressure * Pressure from COVID-19 in China and Travel Retail beginning in February * China trends improving in April, though other markets remain in lockdown 3Q20 REVENUE GROWTH Total Revenue LFL 2... & ADJUSTED OPERATING MARGIN 3Qlg en ° Coty Australia Mass Be
Slide 15: Adjusted Operating Margin
▪ ▪ ADJUSTED OPERATING MARGIN 15
Slide 16: 3Q20 Coty Results
3Q20 COTY RESULTS * Total revenue LFL of -19.5% inline with revised outlook, reflecting broad-based lockdowns by end of Q3 " Net revenues down ~$370M => operating income drop off of ~$174M * Additional non-recurring COVID related charges of $53M: FX transaction losses, excess & obsolescence spike, a
Slide 17: 3Q20 Free Cash Flow
▪ 3Q20 Adj Operating Income 0 Depreciation 103 Adj EBITDA 103 ▪ Noncash Addbacks 54 Working Capital (incl one-off costs) (322) ▪ Capex (61) Interest (Cash) (45) Tax (Cash) (48) Free Cash Flow (319) Dividends (67) M&A and Other (598) Cash Available for Debt Paydown (984) Net Debt - Closing (3/31/20)
Slide 18: Ready for Growth
READY FOR GROWTH Leverage Luxury innovation Boss Alive, CK Everyone Capitalize on Mass Beauty Cover Girl, Sally Hansen, trends Rimmel ) OPEX as a tool to restart Prioritize markets and SKUs Keep e-commerce Share gains on Amazon / momentum retailer.com sites Strong skin care trends Europe launch May
Slide 19: Since 1904
SINCE 1904
Slide 20: 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 strategic pla