Slide 1: Coty Investor Presentation
COTY INVESTOR PRESENTATION DB CONSUMER CONFERENCE JUNE 5, 2024 1
Slide 2: A Beauty Powerhouse
1 COTY A BEAUTY POWERHOUSE
Slide 3: Our Legacy in Beauty
OUR LEGACY IN BEAUTY Founded in 1904 in A global leader in beauty Paris, France for 120 years 3
Slide 4: Two Profitable Divisions, With Continued Premiumization
TWO PROFITABLE DIVISIONS, WITH CONTINUED PREMIUMIZATION CONSUMER CONSUMER BEAUTY BEAUTY 36% 3Q24 FYTD 41% FY21 REVENUE REVENUE BY DIVISION BY DIVISION 59% 64% PRESTIGE PRESTIGE 4
Slide 5: Diversified Regional Portfolio With Significant White Space
DIVERSIFIED REGIONAL PORTFOLIO WITH SIGNIFICANT WHITE SPACE 3Q24 FYTD COTY REVENUE MIX VS. BEAUTY INDUSTRY CHINA NORTH (INCL. HAINAN) AMERICA (INCL. KYLIE) WESTERN 3% Beauty Industry: 30% EUROPE Beauty Industry: 25% ~13% ~20% Beauty Industry: EASTERN EU ~20% & MEA 17% Beauty Industry: APAC ~8% 6% GL
Slide 6: Coty's Leading Expertise & IP in Beauty
COTY’S LEADING EXPERTISE & IP IN BEAUTY FRAGRANCES COLOR COSMETICS SKINCARE 180+ 50+ Active patents & patent 80+ applications Active patents & patent applications Active patents & patent applications Published scientific Years of expertise 160+ Years of expertise in Color Cosmetics 85+ studies 120+
Slide 7: Best-in-Class LFL Growth in Global Beauty
WE CONTINUE TO CONSISTENTLY DELIVER BEST-IN-CLASS LFL GROWTH IN GLOBAL BEAUTY 3Q 4Q 1Q 2Q 3Q 4Q Q1 Q2 Q3 Q4 Q1 LFL Growth CY21 CY21 CY22 CY22 CY22 CY22 CY23 CY23 CY23 CY23 CY24 Leading Beauty 13% 11% 14% 13% 9% 8% 13% 14% 11% 7% 9% Company #1 Leading Beauty 18% 11% 9% -8% -5% -11% -8% 4% -11% -8% 6%
Slide 8: Beautiful Brand Portfolio Reaching Consumers Across Price Points
BEAUTIFUL BRAND PORTFOLIO REACHING CONSUMERS ACROSS PRICE POINTS ULTRA-PREMIUM $150 - 450 PREMIUM + $50 - 150 PREMIUM $20 - 100 MASS $5 - 20 8
Slide 9: Long-Structured Portfolio Built for Success
LONG-STRUCTURED PORTFOLIO BUILT FOR SUCCESS % of Sales ~85% OF THE PORTFOLIO OWNED OR UNDER LONG-TERM LICENSE (>6 YEARS OR License (~4 EFFECTIVELY PERPETUAL) years) Owned ➢ DERISKING REMAINING PORTION OF THE PORTFOLIO THROUGH: License (6-9 years) I. PROACTIVELY RENEWING & SIGNIFICANTLY EXTENDING LIC
Slide 10: Strengthening Core & Conquering White Spaces Through Owned & Licensed Brands
STRENGTHENING CORE & CONQUERING WHITE SPACES THROUGH BALANCE OF OWNED & LICENSED BRANDS CORE WHITE SPACE WHITE WHITE WHITE SPACE SPACE CORE CORE WHITE SPACE WHITE SPACE SPACE WHITE WHITE SPACE SPACE LIFESTYLE ULTRA ULTRA PREMIUM PRESTIGE LIFESTYLE LUXURY CONSUMER PRESTIGE PREMIUM PRESTIGE MAKEUP MAK
Slide 11: Reaffirming Our Strategic Pillars
REAFFIRMING OUR 6 STRATEGIC PILLARS #1 #2 #3 #4 #5 #6 Stabilize and Accelerate luxury Build skincare Step-change Capture white Become a grow consumer fragrances & portfolio over the organizational space geographic beauty leader beauty makeup become a key mid-to-long growth opportunities in in sustai
Slide 12: Global Beauty Demand Maintains Strong Momentum
GLOBAL BEAUTY DEMAND MAINTAINS STRONG MOMENTUM ~15% ~11% ~10% ~6% 1HFY24 3QFY24 1HFY24 3QFY24 GLOBAL PRESTIGE GLOBAL MASS BEAUTY FRAGRANCES MARKET MARKET Prestige Fragrance market growth source: Retail Panel (NPD) – EUR5+NA+MX - Selective Distribution (US – TMM) Consumer Beauty market growth based o
Slide 13: Beauty: Only U.S. Consumer Sector to Grow Units in 2023
BEAUTY: ONLY U.S. CONSUMER SECTOR TO GROW UNITS IN 2023 TOTAL RETAIL UNIT PERFORMANCE BY INDUSTRY Unit Percentage Change YoY CY23 Prestige Beauty 13% Mass Beauty 1% Foodservice 0% Retail Food & Beverage -1% Other Consumables -1% Healthcare -2% Auto -3% Home Textiles -3% Homecare -3% Books -3% Office
Slide 14: Coty Consumer Beauty Delivering Strong Sales Growth
COTY CONSUMER BEAUTY DELIVERING STRONG SALES GROWTH FYTD 2024 PERFORMANCE ROUGHLY INLINE WITH MARKET +HSD% +7% Market Coty Coty performance based on LFL revenue growth Market growth based on NielsenIQ + Circana + Profitero covering Argentina, Australia, Brazil, Canada, Czech Republic, France, German
Slide 15: Coty Brands Outperforming Established Cosmetics Brands
COTY BRANDS OUTPERFORMING ESTABLISHED COSMETICS BRANDS, SUPPORTED BY SOCIAL MEDIA ADVOCACY STRATEGY COVERGIRL PROPELS TO RIMMEL RISES TO #3 #4 IN U.S. EMV IN MARCH 2024, IN U.K. EMV IN 3Q24, FROM #5 IN 3Q24 AND #6 IN 3Q23 FROM #5 IN 3Q23 EMV rankings are tracked within our competitive set. 15
Slide 16: Moving Up the Fragrance Penetration Curve
U.S., CHINA AND DEVELOPING MARKETS MOVING UP THE FRAGRANCE PENETRATION CURVE >50% HIGH 20S % MSD % FINE FRAGRANCE PENETRATION (VS. LOW 20S % ~5 YEARS AGO) FINE FRAGRANCE PENETRATION Existing users increasing >20% weekly fragrance usage AMONG TIER 1 CITY GEN Z CONSUMERS 16
Slide 17: Multi-Year Track Record of Top-Ranking Innovations
COTY’S MULTI-YEAR TRACK RECORD OF TOP-RANKING INNOVATIONS FY21 FY22 FY23 FYTD24 #1 FEMALE INNOVATION #1 INNOVATION #3 INNOVATION #1 INNOVATION TOP 5 FEMALE INNOVATION TOP 5 INNOVATION #3 MALE INNOVATION #1 MALE INNOVATION #2 FEMALE INNOVATION TOP 6 MALE INNOVATION #2 MALE INNOVATION (CYTD) #1 MALE I
Slide 18: Expanding in New Channels and Categories
COTY CONTINUING TO EXPAND IN NEW CHANNELS AND CATEGORIES ~20% ~9% FYTD Coty’s PENETRATION Coty’s GLOBAL REVENUE FYTD E-COMMERCE TRAVEL RETAIL MIX channel grew channel grew ~20% LFL >20% FYTD LFL FYTD ~4% Coty’s ~3% ~1% Coty’s FYTD FYTD Coty’s NICHE FYTD REVENUE PRESTIGE REVENUE REVENUE SKINCARE FRAG
Slide 19: Expanding in Growth Engine Markets
COTY CONTINUING TO EXPAND IN GROWTH ENGINE MARKETS Growth engine Coty’s growth markets now engine markets account for grew ~18% >20% LFL of Coty’s sales in Q3 and FYTD NORTH ASIA CHINA MEXICO AFRICA SOUTHEAST ASIA BRAZIL & INDIA LATAM 19 19
Slide 20: Key ESG Updates: Progressing Across Our Three Pillars
KEY ESG UPDATES: PROGRESSING ACROSS OUR THREE PILLARS COMMITS TO SETTING EXCEEDS 2030 GOALS EMISSIONS REDUCTION ON SCOPE 1 & 2 EMISSIONS, ENERGY TARGETS IN LINE WITH REDUCTION, AND RECYCLING SCIENCE-BASED WITHIN FACTORIES NET-ZERO & DISTRIBUTION CENTERS 14-WEEK TOWARDS GLOBAL A GENDER BALANCED MINIU
Slide 21: Strong Financial Progress
2 STRONG FINANCIAL PROGRESS
Slide 22: Strong & Broad-Based Revenue Growth of +13% LFL FYTD
STRONG & BROAD-BASED REVENUE GROWTH OF +13% LFL FYTD CONSUMER BEAUTY PRESTIGE APAC +7% LFL +17% LFL +16% LFL AMERICAS 12% +13% LFL 36% FYTD FYTD 42% REVENUE REVENUE MIX MIX 64% 46% EMEA +12% LFL 1 1 VOLUMES +LSD % PRICE +HSD % MIX & OTHER +LSD % (CONTRIBUTION FYTD) (CONTRIBUTION FYTD) (CONTRIBUTION
Slide 23: FY24 Guidance
FY24 GUIDANCE FY24 REVENUES AT HIGH END OF +9-11% LFL, WITH OUTPERFORMANCE BY REVENUE LFL PRESTIGE ~1% BENEFIT FROM FX FOR FULL YEAR AND ~2% HEADWIND FROM THE REPORTED REVENUE IMPACTS DIVESTITURE OF LACOSTE LICENSE IN 2H24 ADJ GROSS MARGIN MODEST EXPANSION YOY ADJ EBITDA MARGIN ADJ EBITDA MARGIN GRO
Slide 24: Strong Value Accretion
STRONG VALUE ACCRETION ~12% ~12-13% LFL CAGR CAGR ~9x ~$1,080M UPPER UPPER to END OF END OF ~$973M $1,090M ~$5.6B ~$6.05 – $0.38 ~$0.44 – ~$5.3B $6.15B ~$905M $0.47 ~$4.6B ~$762M $0.28 $0.05 FY21 FY22 FY23 FY24E FY21 FY22 FY23 FY24E FY21 FY22 FY23 FY24E NET REVENUES ADJUSTED EBITDA ADJUSTED EPS Adju
Slide 25: Strong Margin Expansion
STRONG MARGIN EXPANSION UP UP UP ~400 bps ~ 500 bps ~450 bps MODEST EXPANSION YOY ~63.9% ~13.3% ~14% HIGH ~63.7% ~28% ~27% 20 % ~11.6% RANGE ~60.0% ~22% ~9.4% FY21 FY22 FY23 FY24E FY21 FY22 FY23 FY24E FY21 FY22 FY23 FY24E ADVERTISING & ADJ. GROSS MARGIN ADJ. OPERATING MARGIN CONSUMER PROMOTION 25
Slide 26: Strong Cash Generation and Deleveraging
STRONG CASH GENERATION AND DELEVERAGING DOWN ~4X Roughly ~$550M consistent ~$403M with FY23 >$100M Benefit >$80M Headwind ~6.8x From ~2x leverage Wella from tax adjusted for TSA payments ~4.7x Wella stake sale ~$145M Exit related to ~4.1x and 1x prior years ~3x WC benefits FY21 FY22 FY23 FY24E FY21
Slide 27: Attractive Growth Algorithm
3 ATTRACTIVE GROWTH ALGORITHM
Slide 28: Accelerating Sales and Profit Momentum
ACCELERATING SALES AND PROFIT MOMENTUM FY23 FY24E FY25-27E FY28 & Beyond Upper end of Upper end of NET REVENUES $5.55B +9-11% LFL +6-8% LFL CAGR +6-8% LFL CAGR Mid to high 60s % GROSS MARGIN 63.9% Modest Expansion Expanding by ‘27 EBITDA $973M $1,080 – 1,090M +9-11% CAGR +9-11% CAGR TAX RATE ~26% ~3
Slide 29: Steady Reduction in Leverage
STEADY REDUCTION IN LEVERAGE FY23 FY24E FY27E ADJ EBITDA $973M $1,080– 1,090M $1.4Bn - $1.5Bn 1X CASH COSTS ~$60M NM NM CASH INTEREST ~$230M Mid $200s Mid $100s CASH TAXES ~$60M <$200M <$200M CAPEX ~$223M Mid $200s ~$300M FREE CASH FLOW ~$403M ~$400M >$500M ~2.5x by CY24 LEVERAGE RATIO 4.1x 3.1x in
Slide 30: Strengthening Capital Structure to Enable Deleveraging and Capital Returns
STRENGTHENING CAPITAL STRUCTURE TO ENABLE DELEVERAGING AND CAPITAL RETURNS CY23 CY24-CY25 CAPITAL ALLOCATION BY END OF CY25 CY27 (Cumulative) PRIORITIES Net Debt Net Debt Deleverage <$2.5B Financial ~$3.3B FCF Leverage Cash Returns to Financial >$0.8B Shareholders Leverage ~2x Financial (at least $0
Slide 31: Q&A
4 Q&A
Slide 32: Prestige Volumes 2-Yr CAGR Remains Consistent Into 4Q24
PRESTIGE VOLUMES 2-YR CAGR REMAINS CONSISTENT INTO 4Q24 QUARTERLY PRESTIGE LFL VOLUMES 2-YEAR CAGR VS. FY22 ~3-4% ~3-4 % ~3-4% Q2 Q3 Q4 (est.) PRESTIGE LFL REVENUE GROWTH AND VOLUME GROWTH ACCELERATED BY MSD % BETWEEN 3Q23 AND 4Q23 FULLY DUE TO RETAILER REBUILDING INVENTORY POST SUPPLY SHORTAGES IN
Slide 33: Underlying Prestige Trends Remain Consistent Into 1Q25
UNDERLYING PRESTIGE TRENDS REMAIN CONSISTENT INTO 1Q25 ~LSD-MSD% LFL VOLUME CAGR VS. 1Q22 Supply shortages 1Q22 1Q23 1Q24 1Q25E PRESTIGE LFL VOLUMES 1Q25 OUTLOOK EMBEDS CONSISTENT PRESTIGE LFL VOLUME OF LSD-MSD% CAGR VS. 1Q22, BUT IMPLIES SOME SEQUENTIAL IMPROVEMENT IN YOY GROWTH IN PRESTIGE REVENUE
Slide 34: Since 1904
SINCE 1904
Slide 35: 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, strategic planning, targets and outlook for future reporting periods (including the