Estee Lauder Companies, Inc. (the) · NYSE:EL
Estee Lauder Companies, Inc. (the) — The Estée Lauder Companies — Barclays 2015 Global Consumer Staples Conference
35 slides from Estee Lauder Companies, Inc. (the)'s conference presentation, Sep 10, 2015
Slide 1: Estée Lauder Companies
ESTEE LAUDER COMPANIES
Slide 2: Forward-looking statements
The forward-looking statements in this presentation, including those containing words like “expect,” “plans,” “may,” “could,” “anticipate,” “estimate,” “projected,” and “forecasted,” involve risks and uncertainties. Factors that could cause actual results to differ materially from those forward-look
Slide 3: Our Vision
OUR VISION The global leader in prestige POWERHOUSE OF UNRIVALED CREATIVITY AND INNOVATION. ESTEE * Paes
Slide 4: Sustainable, Reliable Growth
SUSTAINABLE, RELIABLE GROWTH 10-YEAR COMPASS PROVIDES DIRECTION ¢ Identifies long-term beauty trends ¢ Determines areas of fastest growth and greatest opportunities to focus on ¢ Allocates resources in an agile way “Keeps our boat in the wind.”
Slide 5: Global Growth Estimates CAGR 2009-2014
GLOBAL GROWTH ESTIMATES CAGR 2009 - 2014 • • • • Beauty data: ELC estimates, Euromonitor 2014, Generations for skin care, makeup and fragrances. HPC: Average of past five years organic sales growth for select European and US based consumer goods companies.
Slide 6: Share of Global Prestige Beauty
SHARE OF GLOBAL PRESTIGE BEAUTY THE ESTÉE LAUDER COMPANIES • • – – – ELC • ELC estimates and Euromonitor 2014 for prestige skin care, makeup and fragrances; excludes travel retail
Slide 7: Focus on Long-Term Strategy Throughout
FOCUS ON LONG-TERM STRATEGY THROUGHOUT NEAR-TERM VOLATILITY THE KOREA TIMES After MERS outbreak, S. Korea to improve monitoring, quarantine protocol Stocks Dive IMF: China can transition 469610 ¥ 20% MEL 6305.69 ¥ 385 STOXKGOO 3525." 2. MPYRLTREAS. 4 1/32, OW $5A1 y FA79 GOLD SLIRID a Sdesibesdmcdow
Slide 8: Multiple Engines of Growth: Brand Opportunities
MULTIPLE ENGINES OF GROWTH FUEL LONG-TERM SUSTAINABILITY - Brand opportunities PREMIUM EDITIONS DE PARFUMS FREDERIC MALLE TOMFORD BEAUTY RODIN Jo MaLone LE LABO HOBB! BROWN Ermenegildo Zegna AUDER Bumble and bumble. PROGRESSIVE Ojon MICHAEL KORS aramis GLAMGLOW smashbox CLINIQUE HILFIGER ENTRY PRICE
Slide 9: Adjusted for SAP sales shifts
• • • • • All figures are adjusted for SAP sales shifts
Slide 10: Multiple Engines of Growth: Channel Opportunities
MULTIPLE ENGINES OF GROWTH FUEL LONG-TERM SUSTAINABILITY - Channel opportunities DOUBLE LINING Channels representing 1/3 of sales are growing double-digits Many department stores growing strongly Specialty-multi promising globally Travel retail passenger growth continues Freestanding retail store ex
Slide 11: FY2015 figures adjusted for SAP sales shifts
• • • • • FY2015 figures are adjusted for SAP sales shifts Share data from Generation 2014
Slide 12: FY2015 figures adjusted for SAP sales shifts
• • • • • FY2015 figures are adjusted for SAP sales shifts
Slide 13: FY2015 figures adjusted for SAP sales shifts
• • • • • FY2015 figures are adjusted for SAP sales shifts
Slide 14: Leverage Retail and Digital Advantage: Omnichannel Capabilities
LEVERAGE RETAIL AND DIGITAL ADVANTAGE: OMNICHANNEL CAPABILITIES
Slide 15: FY2015 figures adjusted for SAP sales shifts
• • • • • FY2015 figures are adjusted for SAP sales shifts
Slide 16: Emerging Markets: Rapid Long-Term Growth
EMERGING MARKETS — RAPID LONG-TERM GROWTH MAC in Turkey * Combined, larger than China ¢ Grew 26% in FY2015 * Sustainable double-digit growth * Strong macro trends / growing middle class * Sourcing consumers from mass Bobbi Brown launch in Mumbai, India ¢ Brand portfolio strength ’ ip i =a * Incremen
Slide 17: China: A Significant Long-Term Growth Opportunity
CHINA: A SIGNIFICANT LONG-TERM GROWTH OPPORTUNITY 238 consneceme = ESTEE LAUDER ise eel AE, ABU? Cities Doors i = = = = 0) Estée Bobbi Jo Tom Lauder Clinique LaMer Brown Origins MAC Malone Ford #3 ELC market at approximately 6% of global sales Grew 6% in FY2015 5 year net sales CAGR +23% 14 brands s
Slide 18: FY2015 figures adjusted for SAP sales shifts
FY2015 figures are adjusted for SAP sales shifts
Slide 19: Categories Driving Long-Term Growth: Makeup
CATEGORIES DRIVING LONG-TERM GROWTH Makeup MAKEUP THAT'S GOING PLACES —n NEW PF DOUBLE WEAR q MAKEUP TO GO 8-hour wear at the push of a button ESTEE LAUDER
Slide 20: Categories Driving Long-Term Growth
CATEGORIES DRIVING LONG-TERM GROWTH . : _ ntroducin Thé Greige Collection ’ : y, -
Slide 21: Categories Driving Long-Term Growth: Skin Care
CATEGORIES DRIVING LONG-TERM GROWTH Skin care NEW DIMENSION The Transformative Beauty of Contouring secre 0308 Join the cult. Drier skins welcome. The lotion is a cult classic. Loved by millions. Sowe asked our dermatologists for a formula drier skins could call their own. Get addicted to that healt
Slide 22: Categories Driving Long-Term Growth: Skin Care
CATEGORIES DRIVING LONG-TERM GROWTH Skin care
Slide 23: Categories Driving Long-Term Growth: Fragrance
CATEGORIES DRIVING LONG-TERM GROWTH Fragrance ESTEE ” LUpas
Slide 24: Categories Driving Long-Term Growth: Hair Care
CATEGORIES DRIVING LONG-TERM GROWTH Hair care Bumble and bumble. Swal Wavst> Wave, “ q (New) Soft waves with sheen
Slide 25: Slide 25
Slide 26: Financial Overview
FINANCIAL OVERVIEW
Slide 27: 5 Year Global Sales Growth
5 YEAR GLOBAL SALES GROWTH • • • • • • Note: All ELC figures are before charges and SAP sales shifts for FY2010-FY2015. Beauty data: ELC estimates, Euromonitor 2014, Generations for skin care, makeup and fragrances. HPC: Average of past five years organic sales growth for select European and US base
Slide 28: SMI Enables Cost Savings and Efficiencies
SMI-ENABLES COST SAVINGS AND EFFICIENCIES * Cost of Goods ° Fewer returns * Lower obsolescence and destructions * Operating Expenses * — Indirect procurement * Demo/A&P effectiveness * Collateral & visual merchandising * Shipping & warehousing * — Productivity improvements * ~$200 million in savings
Slide 29: Optimizing Resource Allocation to Best Opportunities
OPTIMIZING RESOURCE ALLOCATION TO THE BEST OPPORTUNITIES TO SUSTAIN GROWTH yey Mad Lias With Kendall Jenner Reinvestment in growth drivers and modernization * Freestanding retail stores * Information technology * R&D/ innovation Changing media investment * Digital increasing ¢ Brand mix effects
Slide 30: EPS Trends
EPS TRENDS • • • • • Note: All figures are before charges and SAP sales shifts
Slide 31: Strong and Increasing Cash Flow
STRONG AND INCREASING CASH FLOW $ Millions m Operating Cash Flow Free Cash Flow 1,943 1,535 1,470 1127 1,227 1,027 1,025 676 706 766 FY2011 FY2012 FY2013 FY2014 FY2015
Slide 32: ELC Generates and Deploys Strong Cash Flow
ELC GENERATES AND DEPLOYS STRONG CASH FLOW FY2010 — FY2015 $ Millions 44] 2,216 713 ( r ) 6859 iy _ (4,450) (523) 1,945 1,121 i Ending Cash Operating — Stock Based Debt Capital Dividends/ — Acquisitions Ending Cash & 2010 Cash Flow —Comp/Other Expenditures Buybacks Investments 2015
Slide 33: Adjusted net sales and EPS growth note
Note: Adjusted net sales and EPS growth is adjusted for SAP sales shifts in fiscal 2015.
Slide 34: One Year, Five Year stock performance
ONE YEAR FIVE YEAR Source: Bloomberg, S&P 06/30/15. Peer group includes P&G, Avon, Beiersdorf, LVMH, L’Oreal and Shiseido.
Slide 35: Estée Lauder Companies
ESTEE LAUDER COMPANIES
The Estée Lauder Companies — Barclays 2015 Global Consumer Staples Conference on 6ix