Slide 1: Coty 1Q FY25 Earnings Call
COTY 1Q FY25 EARNINGS CALL November 6, 2024
Slide 2: 1Q25 Summary
1Q25 SUMMARY SUE NABI CHIEF EXECUTIVE OFFICER 2
Slide 3: Sustained LFL sales growth, strong fragrance market, robust profit delivery
SUSTAINED LFL STRONG FRAGRANCE SALES GROWTH MARKET ON TRACK FOR ROBUST ACTIVATING WHITESPACE PROFIT DELIVERY OPPORTUNITIES IN FY25 3
Slide 4: Grown ahead of leading global beauty companies
In9 13 of the last quarters, we have grown ahead of the leading global beauty companies 4
Slide 5: LFL Growth vs. leading beauty companies
3Q 4Q 1Q 2Q 3Q 4Q Q1 Q2 Q3 Q4 Q1 Q2 Q3 LFL Growth CY21 CY21 CY22 CY22 CY22 CY22 CY23 CY23 CY23 CY23 CY24 CY24 CY24 21% 12% 19% 16% 9% 4% 15% 17% 18% 11% 10% 5% 4.5% Leading Beauty 13% 11% 14% 13% 9% 8% 13% 14% 11% 7% 9% 5% 3% Company #1 Leading Beauty 18% 11% 9% -8% -5% -11% -8% 4% -11% -8% 6% 8% -5
Slide 6: Prestige fragrance market remains robust
PRESTIGE FRAGRANCE MARKET REMAINS ROBUST ~12% ~12% ~10% FY24 JULY + AUGUST SEPTEMBER 6 Retail Panel (NPD) – EUR5+NA+MX - Selective Distribution
Slide 7: Mass beauty market growing at a more moderate level
MASS BEAUTY MARKET GROWING AT A MORE MODERATE LEVEL HSD % HSD % LSD % LSD % FY24 JULY AUGUST SEPTEMBER 7 NielsenIQ GTC covering B&M and e-commerce channels and countries: Argentina, Australia, Brazil, Canada, France, Germany, Great Britain, Italy, Netherland, Poland, Spain, Switzerland, USA.
Slide 8: Sell-in well below sell-out in several areas, continuing into Q2
SELL-IN WELL BELOW SELL-OUT IN SEVERAL AREAS, CONTINUING INTO Q2 CHINA U.S. (INCL. HAINAN) CONSUMER BEAUTY LSD% of Mix ASIA LDD% TRAVEL RETAIL of Mix AUSTRALIA LSD% of Mix LSD% of Mix 8
Slide 9: 1Q25 LFL growth per segment and region
1Q25 LFL GROWTH PER SEGMENT/ PER REGION BOTH PRICE AND PRICE POINT VOLUME +2% Prestige / 8% EMEA Volume 7% Prestige -1% CB 4% Americas + MSD % Price (est.) Consumer FLAT Beauty Mix & -5% APAC + LSD % Other (est.) Notes: All figures refer to LFL growth. LFL results for 1Q25 included a contribution fr
Slide 10: Growth in mature and growth engine markets
GROWTH TRAVEL ENGINE RETAIL +4% LFL GROWTH IN +15% LFL MARKETS 9% MATURE AND 21% GROWTH ENGINE 1Q25 MARKETS & REVENUE MIX CHANNEL 1Q25 LFL GROWTH 70% MATURE MARKETS +1% LFL LFL results for 1Q25 included a contribution from the Argentina hyperinflationary environment of 5% for growth engine markets.
Slide 11: Financial Results & FY25 Guidance
FINANCIAL RESULTS & FY25 GUIDANCE LAURENT MERCIER CHIEF FINANCIAL OFFICER 11
Slide 12: Growth 1Q22 through 1Q25
GROWTH 1Q22 THROUGH 1Q25 +4.5% +18% LFL LFL +9% LFL ~$1.7B ~$1.6B ~$1.4B ~$1.4B 1Q22 1Q23 1Q24 1Q25 LFL results for 1Q25 included a contribution from the Argentina hyperinflationary environment of 1% for total Coty. 12
Slide 13: Strong gross margin expansion
STRONG GROSS MARGIN EXPANSION +200 BPS 65.5% 63.5% 1Q24 1Q25 13
Slide 14: Maintaining strong A&CP support
MAINTAINING STRONG A&CP SUPPORT +40 BPS ~25% ~25% 1Q24 1Q25 14
Slide 15: Adj EBITDA
ADJ EBITDA FLAT YOY $360M $360M 1Q24 1Q25 15
Slide 16: Adj EPS growth excluding the equity swap
ADJ EPS GROWTH EXCLUDING THE EQUITY SWAP +20% YoY $0.18 $0.15 1Q24 1Q25 Reflects diluted adjusted EPS excluding equity swap. 1Q24 adjusted EPS included a discrete 16 one-time non-cash tax impact of $0.03 from a change in the Swiss statutory rate.
Slide 17: Continuing deleveraging path
CONTINUING DELEVERAGING PATH TARGETING INVESTMENT GRADE PROFILE ~6.8x ~4.7x -0.4x YoY ~4.1x ~3.3x ~3.4x FY21 FY22 FY23 FY24 1Q25 Leverage calculated using net debt to TTM adjusted EBITDA. 17
Slide 18: Future proofing the organization
FUTURE PROOFING THE ORGANIZATION DRIVING AGILITY AND ADDITIONAL EFFICIENCIES >$120M NEW SAVINGS TARGET FOR FY25 UP FROM INITIAL TARGET OF $75M 18
Slide 19: Strong action plans under 5 pillars
STRONG ACTION PLANS UNDER 5 PILLARS 1 CENTERS OF EXCELLENCE 2 OMNICHANNEL APPROACH 3 4 MAXIMIZING SPEED TO EMERGING TECH MARKET AND AI BENEFITS 5 REGIONAL FOOTPRINT ALIGNMENT 19
Slide 20: Expecting sales & profit expansion in FY25
EXPECTING SALES & PROFIT EXPANSION IN FY25 20
Slide 21: 1H25 Framework
1H25 FRAMEWORK +3-4% LFL in 1H, with Q2 +1-2% on continued gap between sell-in REVENUE LFL and sell-out REPORTED REVENUE ~1% scope headwind from the divestiture of Lacoste license and IMPACTS <1% headwind from FX ADJ GROSS MARGIN Continued expansion YoY ADJ EBITDA Low-to-mid single digit % growth Yo
Slide 22: 2H25 Framework
2H25 FRAMEWORK REVENUE LFL LFL growth consistent with 1H25 levels of +3-4% REPORTED REVENUE ~1% headwind from FX IMPACTS ADJ GROSS MARGIN Flattish YoY, and up over 150bps vs. 2H23 Double digit % adj EBITDA growth, with growth accelerating ADJ EBITDA sequentially in Q3 and Q4 ADJ EPS (EXCL. SWAP) $0.
Slide 23: FY25 Guidance
FY25 GUIDANCE REVENUE LFL +3-4% LFL REPORTED REVENUE ~1% headwind from FX and ~1% scope headwind in 1H25 from the IMPACTS divestiture of Lacoste license ADJ GROSS MARGIN Continued expansion YoY Growth toward lower end prior guidance of +9-11% to $1,186- ADJ EBITDA 1,208M; adj EBITDA margin expansion
Slide 24: Continued momentum & new growth opportunities
CONTINUED MOMENTUM & NEW GROWTH OPPORTUNITIES SUE NABI CHIEF EXECUTIVE OFFICER 24
Slide 25: Leading in prestige & mass fragrance
1 2 LEADING IN FUELING COSMETICS PRESTIGE & BRANDS THROUGH MASS FRAGRANCE ADVOCACY AND AGILE INNOVATION 3 4 CAPTURING REACHING SIGNIFICANT KEY ESG GROWTH MILESTONES OPPORTUNITIES 25
Slide 26: Leading in fragrances across all price points
LEADING IN FRAGRANCES ACROSS ALL PRICE POINTS
Slide 27: Burberry Goddess franchise +17% Y/Y
BUILDING LASTING FRAGRANCE FRANCHISES BURBERRY GODDESS FRANCHISE +17% Y/Y GROWTH IN LFL SALES 27
Slide 28: Gucci Flora Orchid propelling franchise to top 10
BUILDING LASTING FRAGRANCE FRANCHISES GUCCI FLORA ORCHID PROPELLING FLORA FRANCHISE TO TOP 10 28
Slide 29: Marc Jacobs Daisy Wild top female launch
MARC JACOBS DAISY WILD TOP 3 FEMALE LAUNCH 29
Slide 30: Launch of Boss Bottled Absolu
LAUNCH OF BOSS BOTTLED ABSOLU DRIVING HUGO BOSS LFL SALES +DD% Y/Y GROWTH IN LFL SALES 30
Slide 31: Ultra premium fragrances +17% Y/Y
ULTRA PREMIUM FRAGRANCES +17% Y/Y GROWTH IN LFL SALES 31
Slide 32: Mass fragrances sales grew +15% in FY24 and >20% in 1Q25
MASS FRAGRANCES SALES GREW +15% IN FY24 AND >20% IN 1Q25 32
Slide 33: Adidas Vibes unlocking mass fragrance opportunity
UNLOCKING MASS FRAGRANCE OPPORTUNITY ADIDAS VIBES FUELING 1.5X INCREASE IN ADIDAS FRAGRANCE SALES 33
Slide 34: Le Ger fragrance #1 SKU in German mass market
UNLOCKING MASS FRAGRANCE OPPORTUNITY LE GER FRAGRANCE #1 SKU IN GERMAN MASS FRAGRANCE MARKET 34
Slide 35: Chanson d'Eau fragrance winning in developed and emerging markets
UNLOCKING MASS FRAGRANCE OPPORTUNITY CHANSON D’EAU FRAGRANCE WINNING IN BOTH DEVELOPED AND EMERGING MARKETS 35
Slide 36: Fueling cosmetics brands through advocacy and agile innovation
FUELING COSMETICS BRANDS THROUGH ADVOCACY AND AGILE INNOVATION 36
Slide 37: Rimmel step-changing social media impact & market share
RIMMEL STEP-CHANGING SOCIAL MEDIA IMPACT & MARKET SHARE EMV OMNICHANNEL +40% YOY MARKET SHARE STABLE #4 RANK L3M 37 EMV rankings are tracked within our competitive set. Source: Traacker.
Slide 38: CoverGirl step-changing social media & market share
COVERGIRL STEP-CHANGING SOCIAL MEDIA & MARKET SHARE EMV OMNICHANNEL +80% YOY MARKET SHARE STABLE #5 RANK L3M EMV rankings are tracked within our competitive set. Source: Traacker. 38 Market share source: CC Mass NIQ xAOC + Amazon 1P.Period ending 9/29/24.
Slide 39: CoverGirl outperforms other legacy brands in the US
COVERGIRL OUTPERFORMS OTHER LEGACY BRANDS IN THE US U.S. Omnichannel Market Share (L3M) CoverGirl L'Oreal Paris Maybelline Revlon Market share source: CC Mass NIQ xAOC + Amazon 1P.Period ending 9/29/24. 39
Slide 40: Next step: activating agile innovation model
NEXT STEP: ACTIVATING AGILE INNOVATION MODEL 40
Slide 41: Capturing significant growth opportunities
CAPTURING SIGNIFICANT GROWTH OPPORTUNITIES 41
Slide 42: Strong e-com share gains in prestige & consumer beauty
STRONG E-COM SHARE GAINS IN PRESTIGE & CONSUMER BEAUTY 42 E -com penetration and contribution based on countries where e -com info is available covering approx. 86% of total Coty. Sources: Circana (Prestige) and Nielsen (CB) August 2024. Additionally, the data includes estimated data for Brick and C
Slide 43: Reinvigorating Lancaster across Europe
REINVIGORATING LANCASTER ACROSS EUROPE DD% 5x Sales growth Growth in in Europe Europe EMV 43
Slide 44: La Maison Orveda NYC
LA MAISON ORVEDA NYC 44
Slide 45: Expanding in growth engine markets
EXPANDING IN GROWTH ENGINE MARKETS NORTH ASIA ~21% THE MIDDLE EAST of Coty’s sales MEXICO INDIA CHINA BRAZIL & LATAM AFRICA SOUTHEAST ASIA +15% LFL in 1Q25 LFL results for 1Q25 included a contribution from the Argentina hyperinflationary environment of 5% for growth engine markets. 45
Slide 46: Reaching key ESG milestones
REACHING KEY ESG MILESTONES 46
Slide 47: Beauty that Lasts at a glance
BEAUTY that LAST AT A GLANCE Climate 65% reduction in air freight emissions vs. baseline 4aNWId Packaging Packaging New 60% — Refills 4onaowd 100% target to reduce virgi ie for color cosmetics, a carbon captured aleerel sourced palm oil for our by 2030 and membership to fragrances and a Used to manu
Slide 48: Transition year in FY25, with growth acceleration into FY26 & beyond
TRANSITION YEAR IN FY25, WITH GROWTH ACCELERATION INTO FY26 & BEYOND 48
Slide 49: One of the most compelling investment opportunities in beauty
ONE OF THE MOST COMPELLING INVESTMENT OPPORTUNITIES IN BEAUTY 49
Slide 50: Appendix
APPENDIX 50
Slide 51: Adjusted EPS delivery
Q1 ADJUSTED EBITDA 360 DEPRECIATION (57) NET INTEREST (62) INCOME TAX 57 ADJUSTED OTHER (53) EPS DELIVERY ADJ PREFERRED DIVIDEND (3) DILUTED SHARE COUNT 899M DILUTED ADJUSTED EPS * 0.15 DILUTED ADJ EPS EXCL. EQUITY SWAP 0.18 * Diluted adjusted EPS calculated under the “if-converted” method for the C
Slide 52: Disclaimer
DISCLAIMER Forward-Looking Statements Certain statements in this presentation are forward-looking statements. These forward-looking statements reflect Coty's current views with respect to, among other things, strategic planning, targets and outlook for future reporting periods (including the extent,
Slide 53: Cautionary note regarding sustainability information
CAUTIONARY NOTE REGARDING SUSTAINABILITY INFORMATION This presentation includes information from our Beauty that Lasts Sustainability Report about our social impact and sustainability goals, targets, initiatives, commitments, and activities. These efforts involve certain risks and uncertainties, suc