Slide 1: Coty 4Q21 Earnings Call
COTY 4Q21 EARNINGS CALL COTY SINCE 1904
Slide 2: Key Messages
KEY MESSAGES REVENUE GROWTH AHEAD OF EXPECTATIONS, FUELED BY TRIPLE DIGIT GROWTH IN PRESTIGE ▪ ROBUST PRESTIGE FRAGRANCE DEMAND IN U.S. AND CHINA COUPLED WITH CONTINUED EXPANSION OF COTY’S PRESTIGE COSMETICS SAVINGS FUELING BOTH PROFIT DELIVERY AND REINVESTMENT ▪ FY21 ADJ EBITDA OF $760M AHEAD OF GU
Slide 3: Revenues Back to Growth
REVENUES BACK TO GROWTH TITLE OF THE PRESENTATION 3
Slide 4: Q4 Sales Nearly Double, With Americas Growing in Q4 & FY21
Q4 SALES NEARLY DOUBLE, WITH AMERICAS GROWING IN Q4 & FY21 APAC +59% LFL AMERICAS AMERICAS +67% LFL IN Q4 AND +6% IN FY21, 14% +67% LFL WITH FULL YEAR DRIVEN BY DOUBLE-DIGIT GROWTH IN U.S. PRESTIGE AND GROWTH BRAZIL & CANADA 4Q21 42% REVENUE ASIA PACIFIC +59% LFL IN Q4, WITH CHINA MIX GROWING DOUBLE
Slide 5: Strong Q4 Momentum in Prestige
STRONG Q4 MOMENTUM IN PRESTIGE PRESTIGE PRESTIGE +147% LFL IN Q4, AND NEARLY +147% LFL FLAT IN FY21 REFLECTING GROWTH IN GUCCI, MARC JACOBS, CHLOE AND PRESTIGE COSMETICS & SKINCARE PORTFOLIOS 4Q21 46% REVENUE CONSUMER BEAUTY +38% LFL IN Q4, WITH 54% GROWTH LED BY COVERGIRL, RIMMEL AND MIX MAX FACTOR
Slide 6: Profit Ahead of Guidance
PROFIT AHEAD OF GUIDANCE TITLE OF THE PRESENTATION 6
Slide 7: Maintaining Gross Margin Momentum
MAINTAINING GROSS MARGIN MOMENTUM ADJUSTED GROSS MARGIN +2,030 bps +190 bps Q4 GROSS MARGIN AGAIN ABOVE 60%, 60.9% YoY 60.0% YoY DELIVERING ON STRATEGIC FRAMEWORK 58.1% FY21 GROSS MARGIN OF ~60% BACK TO FY19 REMAINCO LEVELS DESPITE LOWER SALES LEVEL, BENEFITTING FROM: 40.6% ➢ MIXSHIFT TOWARDS PRESTI
Slide 8: Stepping Up Marketing Investment
STEPPING UP MARKETING INVESTMENT A&CP AS PERCENT OF SALES STEPPED-UP A&CP IN 4Q21, AS EXPECTED, WITH WORKING MEDIA >30% ABOVE 4Q19 ~26% INVESTMENTS SUPPORTING INITIATIVES WITH ~23% STRONG ROI: ~20% ➢ SUCCESSFUL LAUNCHES AND MOMENTUM BRANDS (MJ PERFECT, COVERGIRL, SALLY HANSEN) ➢ EXPANSION INTO NEW C
Slide 9: Savings Ahead of Target, Fueling Reinvestment and Profit
SAVINGS AHEAD OF TARGET, FUELING REINVESTMENT AND PROFIT • FIXED COSTS -15% YOY IN Q4 AND -16% IN FY21 BREAKDOWN OF FY21 COST SAVINGS • ACHIEVED ~$70M OF SAVINGS IN Q4, WITH FY21 SAVINGS OF >$330M, WELL AHEAD OF INITIAL TARGET OF >$200M Trade Investment • WITH ACCELERATION OF SAVINGS INTO FY21, EXPE
Slide 10: Profit Delivery Ahead of Expectations
PROFIT DELIVERY AHEAD OF EXPECTATIONS ADJUSTED EBITDA • STRONG ADJ EBITDA DELIVERY IN Q4 AND FY21, AHEAD OF GUIDANCE AND 16.4% +1270 bps YoY EXPECTATIONS $760M +300 bps vs. • FY21 ADJ EBITDA MARGIN 300 BPS HIGHER FY19 THAN FY19 REMAINCO 12.0% • DESPITE SALES DECLINE, SIGNIFICANT YOY $127M $175M PROF
Slide 11: Adjusted EPS Impacted by Below-Line Items
ADJUSTED EPS IMPACTED BY BELOW-LINE ITEMS $ Millions Q4 FY21 • Q4 adjusted EPS impacted by: Adjusted EBITDA • ~2 cents mainly from deferred 127 760 financing fee write-offs following (Continuing Ops) the refinancing transactions in the Depreciation & quarter (83) (351) Non-Cash Stock Comp • ~2 cents
Slide 12: Free Cash Flow Inline With Expectations
FREE CASH FLOW INLINE WITH EXPECTATIONS Q4 FY21 FREE CASH FLOW $ Millions • Q4 NEUTRAL FCF DURING Adjusted EBITDA 127 760 SEASONALLY WEAK PERIOD • TIGHT MANAGEMENT OF CAPEX, WITH ONE-OFF CASH COSTS <$200M IN FY21 Capex, WC, one-offs (37) (369) • FY21 FREE CASH FLOW OF $145M Interest and tax (88) (24
Slide 13: Maintaining Tight Control on Debt
MAINTAINING TIGHT CONTROL ON DEBT $0.1 ~$1.26 Negative FX, KKR coupon, refinancing costs $5.2 Wella 40% $5.1 Bn financial Bn stake ~$4.0 Bn Q3 FINANCIAL NET DEBT Q4 FINANCIAL NET DEBT Q4 ECONOMIC NET DEBT REFINANCING SOLID CAPITAL STRUCTURE • COMPLETED THE ISSUANCE OF €700M 3.875% SENIOR • 40% FINAN
Slide 14: Advancing Growth & Deleveraging Agenda
ADVANCING GROWTH & DELEVERAGING AGENDA ➢ CONSIDERING THE DYNAMISM OF THE BEAUTY MARKET, COTY IS ALWAYS ON THE LOOKOUT FOR OPPORTUNITIES TO LEVERAGE ITS ASSETS TO CREATE VALUE AND FUEL GROWTH. ➢ IN ORDER TO SUPPORT THE GROWTH OF THE BRAZIL BUSINESS AND COTY’S PERSONAL CARE BRANDS, COTY CONFIRMS THAT
Slide 15: Executing on Strategic Pillars
EXECUTING ON STRATEGIC PILLARS TITLE OF THE PRESENTATION 15
Slide 16: Stabilizing Consumer Beauty - CoverGirl
STABILIZING CONSUMER BEAUTY - COVERGIRL COVERGIRL NIELSEN SELL-OUT +24% IN L3M VS. COSMETICS GAINING SHARE ON AMAZON CATEGORY +16%, HIGHEST BRAND SHARE IN 5 YEARS Source: U.S. Nielsen through June 30, Amazon Profitero 16
Slide 17: Stabilizing Consumer Beauty - Rimmel
STABILIZING CONSUMER BEAUTY - RIMMEL RIMMEL NEW VISUALS & MASCARA RIMMEL AT HIGHEST U.K. SHARE WONDEREXTENSION ALREADY LAUNCH LIVE ACROSS EUROPE IN IN LAST 10 MOS BRAND’S #1 MASCARA IN JUNE/JULY GERMANY Source: Nielsen 17
Slide 18: Stabilizing Consumer Beauty – Max Factor
STABILIZING CONSUMER BEAUTY – MAX FACTOR NEW VISUALS, BRAND POSITIONING, AND PRIYANKA ASSETS LIVE ACROSS EUROPE IN JULY / AUGUST 18
Slide 19: Accelerating Luxury Fragrances
ACCELERATING LUXURY FRAGRANCES MARC JACOBS ‘PERFECT’ GUCCI FRAGRANCES CHLOE ATELIER DES FLEURS The #1 Launch in the U.S. In Top 10 in key markets, U.S. Top 20 fragrance brand in market in the past 3 years and China, and gaining share China B&M, with sales 2x YoY 19 Source: The NPD Group, Inc. / U.S.
Slide 20: Becoming a Key Player in Prestige Make-up
BECOMING A KEY PLAYER IN PRESTIGE MAKE-UP NM sales in FY19 ~3% of sales in FY21 FY19 % based on Continuing Operations 20
Slide 21: Gucci Make-up Rapidly Growing Rankings
GUCCI MAKE-UP RAPIDLY GROWING RANKINGS U.S. FY21 COMP STORE SALES 2X RANKED IN TOP 10 IN EUROPE CHINA MAKEUP RANKING YOY, WITH SIGNIFICANT SEPHORA DOORS AND TOP 5 IN IMPROVED +11 RANKS VS. LAST DISTRIBUTION GROWTH IN FY22 RUSSIA DOORS WHERE PRESENT YEAR 21
Slide 22: Building Skincare Portfolio
BUILDING SKINCARE PORTFOLIO ~5% sales in FY19 ~6% of sales in FY21 FY19 % based on Continuing Operations 22
Slide 23: Skincare: Building on Philosophy's Strengths
SKINCARE: BUILDING ON PHILOSOPHY’S STRENGTHS PHILOSOPHY #8 PRESTIGE SKINCARE BRAND IN U.S.: #1 FACIAL CLEANSER (PURITY) #2 FACIAL EXFOLIATOR (MICRODELIVERY) ALREADY THE #2 PRESTIGE SKINCARE BRAND ON AMAZON, ONLY 1 YEAR AFTER LAUNCH 23 Source: The NPD Group for TMM for FY21
Slide 24: Skincare: Lancaster Revival Leading with Hainan
SKINCARE: LANCASTER REVIVAL LEADING WITH HAINAN LANCASTER RANKED #3IN JUNE AMONG NICHE SKINCARE BRANDS AT LAGARDERE ‘SUN PERFECT’ LINE LAUNCH (SUN & SKINCARE HYBRID) ~1/3 OF SALES EXPANDING DISTRIBUTION IN FY22: ➢ HAINAN ➢ MAINLAND CHINA ➢ KOREA 24
Slide 25: Building E-Commerce & DTC Expertise
BUILDING E-COMMERCE & DTC EXPERTISE CONTINUED MOMENTUM IN Q4 WITH +19% GROWTH YOY FY21 % OF PENETRATION VS. FY21 YoY REVENUES FY19 PRESTIGE +37% YoY MID TWENTIES % 2X CONSUMER +25% YoY 2X BEAUTY HIGH SINGLE DIGIT % COTY +34% YoY HIGH TEENS % 2X FY19 based on Continuing Operations 25
Slide 26: Evolving Digital Strategy From Conversion to Story-Telling
EVOLVING DIGITAL STRATEGY FROM CONVERSION TO STORY-TELLING COVERGIRL + AMAZON RIMMEL + TIKTOK RELEVANT ENTERTAINMENT + EASY COTY IDENTIFIED AND BOOSTED SHOPPABLE EXPERIENCE ORGANIC RIMMEL CONTENT ON TIKTOK ENGAGING PRIME VIDEO, AMAZON LIVE AND AMAZON RETAIL SIGNIFICANT UPLIFT IN WEEKLY SALES ACROSS
Slide 27: Expanding in China
EXPANDING IN CHINA <3% of sales in FY19 >4% of sales in FY21 27 FY19 % based on Continuing Operations
Slide 28: Growing China Rankings
GROWING CHINA RANKINGS COTY RANKED #9 IN CHINA TOTAL PRESTIGE BEAUTY IN Q4, +1 RANK FROM Q3 ➢ COTY PRESTIGE RETAIL SALES +90% IN 4Q21 VS. MARKET +25%; 2ND CONSECUTIVE QUARTER OUTPERFORMING THE MARKET ➢ OF TOP 20 PRESTIGE FRAGRANCE BRANDS IN CHINA, 5 ARE COTY BRANDS ➢ GUCCI AND BURBERRY ALREADY IN TO
Slide 29: Momentum Building in 1Q22
MOMENTUM BUILDING IN 1Q22 TITLE OF THE PRESENTATION 29
Slide 30: Kylie Cosmetics & DTC Site Relaunch Off to Great Start
KYLIE COSMETICS & DTC SITE RELAUNCH OFF TO GREAT START DTC U.K. DOUGLAS.COM ULTA 300 ORDERS A MINUTE TOP 10 BRAND AT COSMETICS SALES 2X COSMETICS SALES ABOVE IN THE OPENING 15 MIN SELFRIDGES RETAILER FORECASTS RETAILER FORECASTS ‘KYLIE’ LIP KIT THE TOP ‘KYLIE’ LIP KIT IS #3 SELLING HALO EFFECT ON SK
Slide 31: Gucci Flora 'Gorgeous Gardenia'
GUCCI FLORA ‘GORGEOUS GARDENIA’ ANNOUNCEMENT REACHED RANKING #3 IN U.S. SEPHORA & #1 IN CANADA OVER 1.8B IMPRESSIONS SEPHORA, WHERE IT’S CURRENTLY EXCLUSIVE 31
Slide 32: Burberry 'Hero'
BURBERRY ‘HERO’ VIRAL CAMPAIGN REVEAL WITH #1 MALE FRAGRANCE AT #3 MALE FRAGRANCE ON OVER 2.3B IMPRESSIONS BLOOMINGDALES SINCE LAUNCH TMALL SINCE LAUNCH 32
Slide 33: Calvin Klein 'Defy'
CALVIN KLEIN ‘DEFY’ ALREADY DRIVING U.K. MARKET SHARE +30BPS, INITIAL U.S. SELL-OUT ALREADY 1.7X WITH CK MALE FRAGRANCES UP 7 RANKS FORECASTS 33
Slide 34: Sally Hansen 'It Takes Two'
SALLY HANSEN ‘IT TAKES TWO’ BEST-IN-CLASS CONTENT DISRUPTIVE DISPLAYS MIRACLE GEL FRANCHISE ➢ HIGHEST MARKET SHARE IN 4 YEARS ➢ SELL-OUT +19% YOY AND +44% VS. 2019 + ➢ SOCIAL MEDIA ENGAGEMENT OVER 2X BENCHMARKS 34
Slide 35: 1Q22 and FY22 Outlook
1Q22 AND FY22 OUTLOOK 1Q22 FY22 CONTINUED FRAGRANCE MOMENTUM IN U.S. IMPROVING BEAUTY DEMAND, EVEN AS BASE & CHINA, WITH SIGNS OF RECOVERY IN E.U. YEAR COMPARISON GETTING MORE DIFFICULT TRAVEL RETAIL (LOCAL) IMPROVING TRENDS STRONG COTY LAUNCH CALENDAR MAKEUP DEMAND GRADUALLY IMPROVING, ➢ FY22 LFL S
Slide 36: Key Messages
KEY MESSAGES REVENUE GROWTH AHEAD OF EXPECTATIONS, FUELED BY TRIPLE DIGIT GROWTH IN PRESTIGE ▪ ROBUST PRESTIGE FRAGRANCE DEMAND IN U.S. AND CHINA COUPLED WITH CONTINUED EXPANSION OF COTY’S PRESTIGE COSMETICS SAVINGS FUELING BOTH PROFIT DELIVERY AND REINVESTMENT ▪ FY21 ADJ EBITDA OF $760M AHEAD OF GU
Slide 37: 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
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