Coty Inc. · NYSE:COTY
Coty — Deutsche Bank dbAccess Global Consumer Conference 2016
31 slides from Coty's conference presentation, Jun 14, 2016
Slide 1: Deutsche Bank dbAccess Global Consumer Conference
Deutsche Bank dbAccess Global Consumer Conference June 14, 2016
Slide 2: 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! 2
Slide 3: Benefits of the P&G Beauty Transaction
BENEFITS OF THE P&G BEAUTY TRANSACTION
Slide 4: Creation of a ~$9Bn Leader and Challenger in Beauty
Creation of a ~$9 ~$9Bn Leader and Challenger in Beauty Global Beauty (1) FY15 Net Sales ($Bn ($Bn) Bn) 9.2 4.8 4.4 Pure Play Beauty Player Notes: Source: Based on company information, Nielsen and Euromonitor data, and estimates (1) Global Beauty defined as Fragrances, Color, Skin, Retail Hair Color
Slide 5: Creation of the Worldwide #1 in Fragrances
Creation of the Worldwide #1 in Fragrances Global Fragrances FY15 Net Sales ($Bn ($Bn) Bn) 3.5 2.2 1.3 Green L'Oréal Coty LVMH Avon Estee Lauder P&G ex D&G Boticario Chanel Pure Play Beauty Player Non Pure Play Beauty Player Source: Based on company information, Euromonitor data, and estimates 5
Slide 6: Strong Worldwide #3 Position in Color Cosmetics
Strong Worldwide #3 Position in Color Cosmetics Global Color FY15 Net Sales ($Bn ($Bn) Bn) 2.5 1.4 1.1 L'Oréal EL PF Coty Coty P&G Shiseido Avon LVMH Revlon Kao Pure Play Beauty Player Non Pure Play Beauty Player Source: Based on company information, Euromonitor data, and estimates 6
Slide 7: Addition of the Worldwide #2 in Hair Salon
Addition of the Worldwide #2 in Hair Salon Global Salon FY15 Net Sales ($Bn ($Bn) Bn) 1.4 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, and estimates 7
Slide 8: A Well Balanced Portfolio
A Well Balanced Portfolio… FY2015 Revenue by Business Coty ($4.4Bn) (1) P&G Beauty Brands ($4.8Bn) (2) Skin & Retail Hair & Body Care Cosmetics ($0.8Bn) ($2.1Bn) Fine Fragrances 18% 44% 27% ($1.3Bn) Fragrance 49% Color ($2.2Bn) Cosmetics 33% 29% ($1.4Bn) Salon Professional ($1.4Bn) New Coty ($9.2Bn)
Slide 9: With a Powerful Portfolio of Brands
…With a Powerful Portfolio of Brands… Each of the three divisions will be anchored in 3 major brands Coty Luxury Coty Consumer Beauty Coty Professional Beauty Pro Forma FY2015 Pro Forma FY2015 Pro Forma FY2015 Revenue: $3.8Bn Revenue: $3.8Bn (1) (1 ) Revenue: $1.7Bn Note: (1) Does not include acquir
Slide 10: Transaction Update
TRANSACTION UPDATE
Slide 11: Transaction Summary
Transaction Summary Structure and Consideration • Transaction proposal was valued at $12.5Bn, comprised of $9.6Bn equity and $2.9Bn debt • Assumed debt subject to certain adjustments, including up to a $1.1Bn adjustment based on the trading price of Coty stock (within a collar of $22.06 to $27.06) p
Slide 12: Update on Progress
Update on Progress Transaction Milestones • S-4 registration statement filed on April 22, 2016 and amended on June 1, 2016 • Unconditional antitrust clearance from the E.U., the U.S., and several other required countries, with the antitrust clearance process nearly completed • Confirmed transfer of
Slide 13: A Global Leader in Beauty: Led by a Very Strong Management Team
Led by a Very Strong Management Team Chairman and Interim CEO Chief Financial Officer BART BECHT PATRIC E DE TAL HOUËT President, Coty Luxury Chief Growth and Digital Officer EDGAR HUBER CAMILLO PANE A Global Leader in Beauty President, Coty Consumer Beauty President, Coty Professional Beauty ES I E
Slide 14: Hypermarcas Beauty Business Integration Well Underway
Hypermarcas Beauty Business Integration Well Underway Transaction Milestones • Hypermarcas Beauty Business transaction announced November 2, 2015 • Transaction closed February 1, 2016 • Carve-out transaction encompasses ~2,500 employees • (1) Annual sales of approximately $250MM USD Operational Mile
Slide 15: Financial Update
FINANCIAL UPDATE
Slide 16: Forward Looking Statements
FORWARD LOOKING STATEMENTS Certain statements in this presentation are forward-looking statements. These forward-looking statements reflect Coty Inc.’s ( “Coty’s”) current views with respect to the completion of the transaction with The Procter & Gamble Company (“P&G”). These forward-looking stateme
Slide 17: Substantial Synergies
Substantial Synergies Impact on P&G Beauty Brands Pro Forma EBITDA ($MM) Operating Savings and One- One-Time Costs • Total potential cost savings of approximately $780MM or 16% of acquired revenues, composed of two parts: 400 1,350 ~$380MM initial synergies, reflecting P&G costs that will not transf
Slide 18: Coty's Adjusted Performance Metrics
Coty’s Adjusted Performance Metrics FY15 Adjusted Operating Income $MM 75 604 529 • Adjusted performance metrics have been refined to exclude historical and prospective amortization of acquisition- related intangible assets Standalone Coty FY15 Old Adj. Standalone Coty FY15 Standalone Coty FY15 New
Slide 19: Combination Drives Strong Margin Enhancement
Combination Drives Strong Margin Enhancement Adjusted Operating Profit Margins (%) With Change in FY2015 Pro Forma Before Scope and Change in Scope Run- Run-Rate Synergies ~4.3 ~19.3 • P&G Beauty Brands will enhance the margin 15 - 18 profile of New Coty from Day 1 1.6 15.3 13.7 ~(0.3) • P&G Beauty
Slide 20: Significant Combined Earnings Power
Significant Combined Earnings Power Pro Forma Adjusted EPS Accretion ($ / Share) Share) Excludes Historical and Prospective Amortization of Acquisition- Acquisition-Related Intangible Assets FY2015 Pro Forma Before Change With Change in Scope and in Scope Run- Run-Rate Synergies 0.39 1.59 – 1.64 • P
Slide 21: Attractive Cash Flow and Return of Capital
Attractive Cash Flow and Return of Capital Cash Flow • Anticipated ongoing pro forma free cash flow as presented below • Retained free cash flow is net of the impact of one-time items in the initial years: ‒ One-time capex of ~$500MM to build the infrastructure of New Coty, which will be ~90% incurr
Slide 22: The Coty Journey
BOURJOIS eee ee SE GS San RT SHEER EE SESE EEE MEETS EEE
Slide 23: The Coty Journey: Our Ultimate Objective
The Coty Journey Our Ultimate Objective Creating a global leader & challenger in Beauty with increasingly better revenue growth rates and best-in- class margins and cash conversion 23
Slide 24: Coty Growth Roadmap
Coty Growth Roadmap • Step change the revenue growth rate of New Coty o Rationalize the portfolio (up to 8% to be divested or terminated) o Keep upgrading talent & capabilities o Exploit the more intense focus of the new organization o Drive the key growth drivers harder: Innovation Communication E-
Slide 25: Summary: Shareholder Value Creation
Summary • The merger creates a pure play, new global leader & challenger in the Beauty industry with $9.2B in net revenues • Transaction expected to contribute Earnings Per Share of approximately $0.50 by FY20 • Targeted to generate substantial pro forma free cash flow of $800-900MM, providing finan
Slide 26: Appendix
lvin Kl 30) Ls s Pe E B r= a primi focshing & refining moista pailosophy= live with SE EEEEEEEEE pees
Slide 27: P&G Beauty Brands Revenue and EBITDA Bridges
P&G Beauty Brands Revenue and EBITDA Bridges Fiscal Year 2015 Revenue Bridge $MM 6,000 5,518 5,434 (84) 4,848 5,000 (586) 4,000 (1) FY2015 S-4 P&G Divested Brands FY2015 Adjusted Revenue Excluded FY2015 Revenue Revenue Brands (2) Acquired Fiscal Year 2015 EBITDA Bridge $MM 1,500 102 1,081 379 ~950 6
Slide 28: P&G Beauty Brands Performance
P&G Beauty Brands Performance FY15 Sales Drivers— Drivers—Total $Bn 6.2 6.0 (1)% (1)% 5.6 5.5 (6)% 5.0 (1) FY14 Net Sales as Reported Organic Growth for Acquired Impact of Divested and Excluded Foreign Exchange FY15 Net Sales as Reported (2) Brands Brands First Nine Months FY16 Sales Drivers— Driver
Slide 29: Reconciliation from Reported to Adjusted Metrics
Reconciliation from Reported to Adjusted Metrics Nine Months Ended Twelve Months Ended June 30, March 31 (in millions) 2015 2014 2013 2016 2015 Reported Operating Income 395.1 25.7 394.4 257.1 418.5 % of Net revenues 9.0% 0.6% 8.5% 7.9% 12.4% Restructuring and other business realignment costs 91.4 3
Slide 30: Disclaimer: Definitions and Notes
DISCLAIMER Definitions and Notes Fiscal year represents Coty’s fiscal year ended June 30. Unless otherwise specified, beauty industry revenues and Coty and P&G Beauty Brands industry rankings are based on Euromonitor International Ltd. 2015 calendar year data and represent worldwide retail sales in
Slide 31: Slide 31
Coty — Deutsche Bank dbAccess Global Consumer Conference 2016 on 6ix