Slide 1: Creating a New Global Leader and Challenger in Beauty
Creating a New Global Leader and Challenger in Beauty Investor Presentation July 9, 2015
Slide 2: Disclaimer: Forward-Looking Statements
DISCLAIMER Forward- 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 fo
Slide 3: Disclaimer: Important Notices and Additional Information
DISCLAIMER Important Notices and Additional Information In connection with the proposed transaction, Coty and the P&G Beauty Business will file registration statements with the SEC registering shares of Coty’s common stock and common stock of the P&G Beauty Business. Coty’s registration statement wi
Slide 4: 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! 4
Slide 5: Transaction Overview
MARC JACOBS DECADENCE Fransaction Overview
Slide 6: Strategically Compelling Merger
Strategically Compelling Merger The merger is targeted to create the following benefits: • Creates a pure play, new global leader and challenger in the beauty industry with approximately $10Bn in net revenues based on FY14 performance • Brings to Coty an attractive new category in the beauty industr
Slide 7: Transaction Summary
Transaction Summary Structure and Consideration • Transaction proposal was valued at $12.5Bn • Combination of equity valued at $9.6Bn based on basic Coty shares and an average trading price when proposal was submitted, and assumed debt of $2.9Bn • Assumed debt of $2.9Bn subject to a $1Bn adjustment
Slide 8: Attractive Financial Impact
Attractive Financial Impact Income Statement • Coty and P&G Beauty Business would have more than $10Bn in combined pro forma FY14 revenues, doubling the size of Coty • Coty expects to realize approximately $550MM in total cost savings, including $400MM in non-transferred overhead costs and an increm
Slide 9: Overview of P&G Beauty Business
Overview of P&G Beauty Business
Slide 10: P&G Beauty Business Overview
P&G Beauty Business Overview FY2014 Sales by Segment (1) (1) FY2014 EBITDA by Segment (1) Color Cosmetics Color Cosmetics 19% Hair Color 28% 43% 44% 38% Hair Color Fragrance 28% Fragrance Total: $5.9Bn $5.9Bn Total: $1.15Bn $1.15Bn Note: (1) FY2014 ending June 30 10
Slide 11: P&G Beauty Business Overview: Brands
P&G Beauty Business Overview Brands Description • Three large brands: − Hugo Boss: Strong presence in Europe with 30 year heritage Fragrance − Dolce & Gabbana: Global “edgy” reach − Gucci: Global Italian luxury brand • Among leading brands in Germany, Spain, the UK, Italy Mexico, the US, and France
Slide 12: Benefits of the Merger
Benefits of the Merger
Slide 13: Creation of a New Leader and Challenger in Beauty
Creation of a New Leader and Challenger in Beauty Global Beauty (1) FY14 Net Sales ($Bn ($Bn) Bn) 10.5 5.9 4.6 Pure Play Beauty Player Source: Based on Company Information, Nielsen and Euromonitor data, Estimates Non Pure Play Beauty Player Note: (1) Global Beauty defined as Fragrances, Color, Skin,
Slide 14: A Balanced Portfolio & An Attractive New Category
A Balanced Portfolio & An Attractive New Category FY2014 Revenue by Business Coty ($4.6Bn) P&G Beauty Business ($5.9Bn ($5.9Bn) 5.9Bn) Skin & Color Body Cosmetics Care 19% 19% 51% 43% Hair Color Color Fragrance Cosmetics 30% 38% Fragrance Pro Forma Coty ($10.5Bn ($10.5Bn) 10.5Bn) Skin & Body Care Ha
Slide 15: Creation of the Worldwide #1 in Fragrances
Creation of the Worldwide #1 in Fragrances Global Fragrances FY14 Net Sales ($Bn ($Bn) Bn) 4.5 2.3 2.2 Green L'Oréal Coty LVMH P&G Avon Chanel Natura E. Lauder Pure Play Beauty Player Non Pure Play Beauty Player Source: Based on company information, Euromonitor data, estimates 15
Slide 16: Leading Fragrance Brands
Leading Fragrance Brands FY14 Revenues Coty (1) P&G Beauty Business (1) P&G Beauty Coty Business Fragrance $4.5 $5.5Bn $2.3Bn $2.2Bn Bn Note: (1) Refer to appendix for portfolio of Coty and P&G Beauty Business Fragrance brands 16
Slide 17: Creation of the Worldwide #3 in Color Cosmetics
Creation of the Worldwide #3 in Color Cosmetics Global Color FY14 Net Sales ($Bn ($Bn) Bn) 2.5 1.4 1.1 L'Oréal EL Green Avon Coty P&G Shiseido Revlon LVMH Chanel Kao Pure Play Beauty Player Non Pure Play Beauty Player Source: Based on company information, Euromonitor data, estimates 17
Slide 18: Leading Color Cosmetics Brands
Leading Color Cosmetics Brands FY14 Revenues Coty P&G Beauty Business P&G Beauty Coty Business Retail Color $1.1Bn $2.5 Bn $1.4Bn Color Salon 18
Slide 19: Creation of the Worldwide #2 in Hair Salon
Creation of the Worldwide #2 in Hair Salon Global Salon FY14 Net Sales ($Bn ($Bn) Bn) 1.5 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 19
Slide 20: Leading Salon Professional & Hair Color Brands
Leading Salon Professional & Hair Color Brands FY14 Revenues Coty P&G Beauty Business P&G Beauty Coty Business Salon Professional & Hair Color $2.5Bn $2.5Bn 20
Slide 21: Opportunity to Accelerate Growth
Opportunity to Accelerate Growth Timing • Post integration, and after the rationalization of the brand portfolio and wholesale business Focus • Commitment to becoming a global leader as a pure play beauty company • Emphasis on superior understanding & capabilities relative to consumers, distribution
Slide 22: Better Scale in Key Geographies
Better Scale in Key Geographies FY14 Change In Sales: Coty and P&G Beauty Business vs. Coty Brazil 523% Japan 509% Russia 349% Italy 239% Mexico 153% Germany 144% Netherlands 138% U.S. 112% Spain 108% UK/ Ireland 96% Canada 73% France 71% China 62% Ability to enter large new Beauty markets, includin
Slide 23: Substantial Cost Synergies
Substantial Cost Synergies P&G Beauty Business Pro Forma FY14 EBITDA ($MM) 150 1,300 • Total cost savings of approximately $550MM 1,150 (~10% of the FY14 acquired sales of $5.9Bn), including: 550 ‒ $400MM in P&G costs that will not transfer 400 (1) ‒ $150MM of incremental cost synergies (3% of acqui
Slide 24: Combination Drives Strong Margin Enhancement
Combination Drives Strong Margin Enhancement Operating Profit Margins (%) At Announcement With Run- Run-Rate Synergies 17.3 ~1 ~15 ~14 14.6 ~2 ~12 (2) (2) Standalone Coty FY15E FY15E Adj. Pro Forma Coty FY15E Run-rate Incremental Cost Pro Forma Coty Adj. Operating Margin Operating Margin Adj. Operat
Slide 25: Significant Combined Earnings Power
Significant Combined Earnings Power Pro Forma EPS Accretion ($ / Share) At Announcement With Run- Run-Rate Synergies 1.28 – 1.37 0.15 0.83 1.13 – 1.23 0.95 – 0.98 (0.58) – (0.65) Coty FY15E Impact of Share P&G Beauty Business Coty Run-rate Incremental Cost Adj. Coty (4) Targeted Adj EPS Issuance, Tr
Slide 26: Strong Cash Flow Supports Continued Growth
Strong Cash Flow Supports Continued Growth Standalone Coty Pro Forma Coty At Close At Close Adjusted Free ~$400MM ~$900MM Cash Flow (1) Net Debt ~$2.2Bn ~$5.5Bn (2) Net Debt / ~2.7x ~3.0x EBITDA • Additional cash flow post transaction close including: – Working capital initiatives will cumulatively
Slide 27: Benefits of the Merger
Benefits of the Merger The merger is targeted to create the following benefits: • Creates a pure play, new global leader and challenger in the beauty industry with approximately $10Bn in net revenues based on FY14 performance • Brings to Coty an attractive new category in the beauty industry through
Slide 28: Appendix
Appendix
Slide 29: Overview of Fragrance Brands
Overview of Fragrance Brands COTY P&G Beauty Business Fragrance 29
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