Coty Inc. · NYSE:COTY
Coty — Investor Day (November 2021)
14 slides from Coty's investor day presentation, November 2021
Slide 1: Transformation
TRANSFORMATION GORDON VON BRETTEN 1
Slide 2: "All-In to Win": Transforming Coty End-to-End
“ALL-IN TO WIN”: TRANSFORMING COTY END-TO-END FROM TO CORPORATE AND BRAND STRATEGIES not clear PRODUCT CENTRIC brands and clear COTY portfolio Zero top line GROWTH 6 STRATEGIC PILLARS with accelerated execution IP AND INNOVATION firepower not utilized Investment in INNOVATION and leveraging what we
Slide 3: 5 Key Workstreams to Turn Coty into an Industry Leader
5 KEY WORKSTREAMS TO TURN COTY INTO AN INDUSTRY LEADER FY21 FY22 FY23 PRIMARY FOCUS AREAS KEY OUTCOMES 1 Funding the Journey FIXED COSTS INVEST IN A&CP 2 Gross Margin Attack PRICING, NRM* & COGS INCREASE PROFITABILITY 6 STRATEGIC 3 Deliver Sustainable, Profitable Growth PILLARS FUND GROWTH PROJECTS
Slide 4: On Track for ~$600M Savings Through FY23, ~$675M by FY24
ON TRACK FOR ~$600M SAVINGS THROUGH FY23, ~$675M BY FY24 SAVINGS DELIVERY TIMELINE ($M) ▪ Accelerated savings delivery in FY21 by pulling savings forward from FY22 ~$170M $600M ~$75M ▪ FY22 savings are net savings and ~$100 Structural incorporate headwinds from: >$90M A&CP + Other – Investment in st
Slide 5: FY21 Savings Driven by Streamlined Overhead
FY21 SAVINGS DRIVEN BY STREAMLINED OVERHEAD 1 Funding the Journey BREAKDOWN OF FY21 COST SAVINGS EXAMPLES OF COST REDUCTION ACTIONS Trade • Reduced SG&A headcount by 17% Investment PEOPLE between FY21 and FY20 Structural COST • FY22 plan includes further reductions A&CP 4% and reinvestment of ~200 n
Slide 6: Multi-Pronged Initiative to Improve Our GM
MULTI-PRONGED INITIATIVE TO IMPROVE OUR GM 2 Gross Margin Attack ▪ Coty FY21 gross GROSS MARGIN ATTACK PROGRAM margin of ~60% vs. beauty peers at >70% COMMERCIAL GM ATTACK SUPPLY CHAIN ATTACK Excess & ▪ FY25 objective of mid Pricing and Net Manufacturing Obsolescence Revenue Distribution 60% Managem
Slide 7: Fragrance Manufacturing Consolidation
FRAGRANCE MANUFACTURING CONSOLIDATION 2 Gross Margin Attack ▪ Closure of Cologne site by FY23 and consolidation of volumes into Granollers (Spain) and Chartres (France) sites ▪ Now 2 state-of-the-art facilities with strong focus on continuous improvement, automation, OTIF*, and quality ▪ Significant
Slide 8: Portfolio Optimization Program Driving GM
PORTFOLIO OPTIMIZATION PROGRAM DRIVING GM 2 Gross Margin Attack TAIL-END SKU RATIONALIZATION PLATFORMING ASSORTMENT MANAGEMENT ▪ Removing non-productive SKUs ▪ Standardization of packaging types ▪ Prioritization of competing SKUs ▪ Revenue neutral due to increased ▪ Rolling out winning innovations a
Slide 9: Material & Freight Inflation Being Fully Offset
MATERIAL & FREIGHT INFLATION BEING FULLY OFFSET 2 Gross Margin Attack MATERIAL COST HEADWINDS BY CATEGORY IN FY22 MITIGATING ACTIONS Glass ~5% avg. increase in direct GLOBAL PRICING INITIATIVE Secondary pack 1 More central control and more ambitious view on materials + >20% in inbound freight PACKAG
Slide 10: Supporting Execution of Our Strategic Pillars
SUPPORTING EXECUTION OF OUR STRATEGIC PILLARS 3 Deliver Growth Stabilize and grow CB makeup #1 brands and fragrances CHINA POWER HOUSE HAINAN TASKFORCE Accelerate luxury fragrances #2 and makeup SKINCARE TASK FORCE Build skincare portfolio #3 across both divisions THE TURBO BEHIND THE STRATEGIC PILL
Slide 11: Cash Olympics: Targeting Leverage
CASH OLYMPICS: TARGETING LEVERAGE 4 Cash Olympics KEY STREAMS EXAMPLES OF IDENTIFIED OPPORTUNITES 1 Inventory 2 Receivables 3 Payables 4 Real Estate 5 Long Term Assets 6 CAPEX Freeing up >$150M More than $100M in annual 7 One Off Cost in cash by selling off VAR “value at risk” – 8 Tax / Vat non-core
Slide 12: Key Takeaways
KEY TAKEAWAYS “All-In to Win” end-to-end transformation program fully in implementation, with central leadership and strong execution infrastructure across all work streams On track to deliver $600M in cost reductions by FY23 (and $675M by FY24), resetting Coty’s overhead cost structure; Almost $400
Slide 13: Together, We Are Making Corporate History!
TOGETHER, WE ARE MAKING CORPORATE HISTORY! 13
Slide 14: 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, strategic planning, targets