Coty Inc. · NYSE:COTY
Coty — Investor Day (November 2021)
56 slides from Coty's investor day presentation, November 2021
Slide 1: Introduction
INTRODUCTION SUE NABI, Chief Executive Officer 1
Slide 2: Strong framework and transformation initiatives
1 2 3 Strong framework Unlocking growth Significant earnings and and transformation opportunities in cash flow growth initiatives existing portfolio potential
Slide 3: Our Company: A Global Leader in Fragrance and Color Cosmetics
OUR COMPANY A GLOBAL LEADER IN FRAGRANCE AND COLOR COSMETICS STRONG POSITIONS IN KEY MARKETS WITH A DIVERSE BRAND PORTFOLIO in fragrances FY21 Net Revenues in color cosmetics #2 in Prestige Fragrances #2 in Prestige Fragrances #1 in Prestige Fragrances #2 in Mass Cosmetics #1 in Mass Cosmetics #4 in
Slide 4: Sales Diversified Across Categories and Channels
SALES DIVERSIFIED ACROSS AND 7% 6% 3% 16% 6% PRESTIGE FRAGRANCES PRESTIGE B&M CONSUMER BEAUTY FY21 COSMETICS FY21 46% CONSUMER REVENUE PRESTIGE & MASS REVENUE BEAUTY B&M 27% BY CATEGORY SKINCARE BY CHANNEL 51% PRESTIGE COSMETICS E-COMMERCE 38% BODY CARE CONSUMER BEAUTY FRAGRANCES 4
Slide 5: Sales Diversified Across Regions
SALES DIVERSIFIED ACROSS FY21 REVENUE MIX CHINA NORTH AMERICA WESTERN 4% (INCL. KYLIE) EUROPE 32% 27% EASTERN EU & MIDDLE EAST 19% APAC 7% GLOBAL BRAZIL TRAVEL RETAIL & LATAM 4% 7% 5
Slide 6: A Portfolio of Iconic Brands
A PORTFOLIO OF ICONIC BRANDS ULTRA PREMIUM PREMIUM + PREMIUM MASS 6
Slide 7: We Are Playing in a Large and Growing Market
WE ARE PLAYING IN A LARGE AND GROWING MARKET LUXURY BEAUTY 2019 $119B MASS BEAUTY 2019 $187B CAGR 2017/19 +11% CAGR 2015/19 +4.4% $32B #2 $42B +2.8% +4% $47B 17.0% #3 +20% 35% 39% $20B 10.6% +4.1% #1 54.7% $102B +5.1% 11.0% $21B +4.3% $31B 6.7% 26% $13B +8% +3.5% SKINCARE MAKE-UP FRAGRANCE SKINCARE
Slide 8: François Coty quote
“Create the best product you can, present it in a perfect container, beautifully simple but of impeccable taste, charge a reasonable price for it, and you will witness a great business arise such as the world has never seen.“ – François Coty 8
Slide 9: Our Legacy in Beauty
OUR LEGACY IN BEAUTY COTY founded in 1904 in Paris, France by François Coty Global leader in beauty for over 100 years 9
Slide 10: Over 100 Years of Defining Beauty
OVER 100 YEARS OF DEFINING BEAUTY MAX FACTOR SALLY HANSEN LANCASTER COVERGIRL First coined the Pioneered nail care in 1957 Introduced retinol, Invented clean makeup & term makeup UV protection, DNA repair skinified makeup 10
Slide 11: We Are Leading Beauty Trends Today
WE ARE LEADING BEAUTY TRENDS TODAY CLEAN, VEGAN, CAMPAIGNS THAT DISRUPTIVE BUSINESS MODELS CRUELTY-FREE BEAUTY CELEBRATE TRUE DIVERSITY 11
Slide 12: Our Innovation Power
OUR INNOVATION POWER
Slide 13: We Are Building a Leading Skincare Organization
WE ARE BUILDING A LEADING SKINCARE ORGANIZATION DR. SHIMEI FAN VÉRONIQUE SCHWARTZ Coty Chief Scientific Officer SVP Product Development 13
Slide 14: Our Unique IP Is Focused on the Areas Changing Skincare
OUR UNIQUE IP IS FOCUSED ON THE AREAS CHANGING LIGHT AND VECTORIZATION OF SKIN BARRIER THE SCIENCE OF ENVIRONMENTAL DERMATOLOGICAL REGENERATIVE KNOW-HOW LONGWEAR AGING PROTECTION GRADE ACTIVES 14
Slide 15: Coty's Leading R&D Capabilities
COTY’S LEADING R&D CAPABILITIES 15
Slide 16: Our Team
OUR TEAM
Slide 17: Our Team Presenting Today
OUR TEAM PRESENTING TODAY Sue Y. Nabi Laurent Mercier Gordon von Bretten Alexis Vaganay Stefano Curti Isabelle Bonfanti Chief Executive Officer Chief Financial Officer Chief Transformation Officer Chief Commercial Officer, Chief Brands Officer, Chief Commercial Officer, Consumer Beauty Consumer Beau
Slide 18: Let's Make Over the Beauty World
LET’S MAKE OVER THE BEAUTY WORLD, 18
Slide 19: Our Journey
OUR JOURNEY 19
Slide 20: Fuel, Build, Grow
FUEL, BUILD, GROW FY21 FY22 FY23 FY24 FY25 STABILIZE FUEL BUILD & GROW GROWTH FLYWHEEL Executing on Brand Revenue growth above beauty market Funding the Journey Repositioning New Opportunities Set 6 Strategic Pillars Redefining brands A team of beauty top experts • Margin improvements • Simplified P
Slide 21: Our Growth Flywheel
Invest in our brands and our people Growing most profitable categories / markets / channels OUR GROWTH FLYWHEEL Generate cash and de-lever Grow profits and margins 21
Slide 22: Thank You for the Recognition!
THANK YOU FOR THE RECOGNITION! 2022 ALL-AMERICA EXECUTIVE TEAM INVESTOR CEO ENVIRONMENTAL, SOCIAL RELATIONS AND GOVERNANCE PROGRAM PROGRAM 22
Slide 23: 2021 Awards
2021 AWARDS FRAGRANCES SKIN CARE COSMETICS Gucci Lancaster Gucci The Alchemist's Sun Sensitive Goldie Red Garden Visage SPF50 Brilliant #25 Lipstick Chloé Eau de Parfum Philosophy Naturelle Sérum Réparateur Chloé Visage Atelier des Fleurs Papyrus “Our reason for being is producing compelling, innova
Slide 24: Bolder and More Resilient Coty FY22-FY25
BOLDER AND MORE RESILIENT COTY FY22-FY25 24
Slide 25: Our Strategic Pillars
OUR 6 STRATEGIC PILLARS
Slide 26: Our Pillars
OUR PILLARS #1 #2 #3 #4 #5 #6 Stabilize and grow Accelerate luxury Build skincare Build e-commerce Expand in China Become a consumer beauty fragrances & portfolio across and direct-to- on luxury and beauty leader in makeup brands & become a key both divisions consumer select consumer sustainability
Slide 27: Our Pillars
OUR PILLARS #1 #2 #3 #4 #5 #6 Stabilize and Accelerate luxury Build skincare Build e-commerce Expand in China Become a grow consumer fragrances & portfolio across and direct-to- on luxury and beauty leader in beauty makeup become a key both divisions consumer select consumer sustainability player in
Slide 28: Consumer Beauty Stabilization and Growth via Brand Repositionings
CONSUMER BEAUTY STABILIZATION AND GROWTH VIA BRAND REPOSITIONINGS 28
Slide 29: Consumer Beauty Across Geographies
CONSUMER BEAUTY ACROSS GEOGRAPHIES RIMMEL MAX FACTOR K BOURJOIS Salts. aA ddidas \ MAX FACTOR K R\N adidas 29
Slide 30: Our Pillars
OUR PILLARS #1 #2 #3 #4 #5 #6 Stabilize and grow Accelerate Build skincare Build e-commerce Expand in China Become a consumer beauty luxury portfolio across and direct-to- on luxury and beauty leader in makeup brands & fragrances & both divisions consumer select consumer sustainability mass fragranc
Slide 31: Superstar Fragrance Brands Across Tiers
SUPERSTAR FRAGRANCE BRANDS ACROSS TIERS Exclusive Luxury Premium Entry Prestige 31
Slide 32: Prestige Fragrances Across Geographies
PRESTIGE FRAGRANCES ACROSS 32
Slide 33: Prestige Makeup Across Geographies
PRESTIGE MAKEUP ACROSS GEOGRAPHIES GUCCI BURBERRY 33
Slide 34: Natural Tailwinds Driving Growth in Luxury Consumption
NATURAL TAILWINDS DRIVING GROWTH IN LUXURY CONSUMPTION IN: NORTH CHINA AMERICA TRAVEL RETAIL 34
Slide 35: Our Pillars
OUR PILLARS #1 #2 #3 #4 #5 #6 Stabilize and grow Accelerate luxury Build skincare Build e-commerce Expand in China Become a consumer beauty fragrances & portfolio across and direct-to- on luxury and beauty leader in makeup brands & become a key both divisions consumer select consumer sustainability
Slide 36: Orveda Enters Coty Skincare Portfolio
ULTRA PREMIUM MULTI-AWARDED ORVEDA BRAND ENTERS COTY SKINCARE PORTFOLIO PREBIOTIC SKINCARE THAT WORKS WITH THE SKIN’S MICROBIOME 36
Slide 37: CoverGirl Officially Entering Skincare
COVERGIRL OFFICIALLY ENTERING SKINCARE ASSORTMENT OF 5 SKUS HITTING SHELVES THIS JANUARY 37
Slide 38: Our Skincare Portfolio Now Covers Key Trends and All Price Tiers
OUR SKINCARE PORTFOLIO NOW COVERS KEY TRENDS AND ALL PRICE TIERS ULTRA-PREMIUM DESIGNERS’ SKIN CARE DESIGNER BRANDS PRESTIGE Kim Kardashian West PREMIUM CELEBRITY-DRIVEN SKINCARE GREEN / CLEAN SKIN ENTRY PRESTIGE CELEBRITY-DRIVEN INGREDIENT-LED ENTRY SKINCARE BODYCARE 38
Slide 39: Skincare Relevancy by Brand
SKINCARE RELEVANCY BY Kim Kardashian West SKINCARE Kim Kardashian West SKINCARE 39
Slide 40: Our Pillars
OUR PILLARS #1 #2 #3 #4 #5 #6 Stabilize and grow Accelerate luxury Build skincare Build e- Expand in China Become a consumer beauty fragrances & portfolio across commerce and on luxury and beauty leader in makeup brands & become a key both divisions direct-to- select consumer sustainability mass fra
Slide 41: Digital Strategy Anchored on Coty's Differentiators
DIGITAL STRATEGY ANCHORED ON COTY’S DIFFERENTIATORS Creating innovative content and services through partnership with Perfect Corp Leading social commerce, livestreaming and advocacy strategy Next Gen DTC brands in our portfolio 41
Slide 42: Our Pillars
OUR PILLARS #1 #2 #3 #4 #5 #6 Stabilize and grow Accelerate luxury Build skincare Build e-commerce Expand in China Become a consumer beauty fragrances & portfolio across and direct-to- on luxury and beauty leader in makeup brands & become a key both divisions consumer select consumer sustainability
Slide 43: Expanding in China
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Slide 44: Our Pillars
OUR PILLARS #1 #2 #3 #4 #5 #6 Stabilize and grow Accelerate luxury Build skincare Build e-commerce Expand in China Become a consumer beauty fragrances & portfolio across and direct-to- on luxury and beauty leader in makeup brands & become a key both divisions consumer select consumer sustainability
Slide 45: Coty's Sustainability Strategy Is Integral for Our Business and Society
COTY’S SUSTAINABILITY STRATEGY IS INTEGRAL FOR OUR BUSINESS AND SOCIETY The beauty The beauty of PEOPLE of our PRODUCT Create a more INCLUSIVE Drive PRODUCT INNOVATION business and society with SUSTAINABILITY towards the circular economy The beauty of our PLANET Protect and conserve natural resource
Slide 46: Sustainability Is a Key Driver of Consumer Demand
SUSTAINABILITY IS A KEY DRIVER OF CONSUMER DEMAND Proportion Of Beauty Launches With Clean, Vegan, And Natural Claims IN U.S. IN EUROPE 46
Slide 47: Sustainability Is Our Ultimate Driver of Innovation
BEAUTY OF OUR PRODUCT SUSTAINABILITY IS OUR ULTIMATE DRIVER OF INNOVATION Meeting consumers’ desire for cleaner and more sustainable products We integrate sustainability criteria into packaging and formula development for ALL new products 47
Slide 48: Beauty of Our Product: Product and Supply Chain Targets
BEAUTY OF OUR PRODUCT PRODUCT AND SUPPLY CHAIN TARGETS WE ARE TARGETING: • Aim to purchase 100% mass balance-certified palm oil for our production sites in coming years • Already in process of setting specific reformulation roadmaps for each product category 48
Slide 49: Upcycling Carbon Emissions into Sustainable Ethanol for Our Fragrances
UPCYCLING CARBON EMISSIONS INTO SUSTAINABLE ETHANOL FOR OUR FRAGRANCES ETHANOL, PURIFICATION ~ 7” CLEANUP FRAGRANCES CONTAINING HIGH-PURITY SUSTAINABLE CHEMICALS Bus () a) L GASIFICATION COMPRESSION SEPARATION SOLID WASTE Lanzalech9 COTY SINCE 1904
Slide 50: Beauty of Our Planet: 2030 Sustainability Targets
BEAUTY OF OUR PLANET 2030 SUSTAINABILITY TARGETS Post Wella divestiture, Coty completed in-depth environmental footprint study and will be setting an environmental target inline with latest science and climate scenarios Switch to 100% renewable electricity across all sites Send 0 waste to landfill R
Slide 51: Beauty of Our People
BEAUTY OF OUR PEOPLE On track to reach gender pay equity parity by 2022 Female majority Executive Committee and 50% female representation on Board Updated the Charter of our Board Remuneration & Nomination Committee to include DE&I criteria Launched Employee Resource Groups to drive action by Associ
Slide 52: Our Ambition
OUR AMBITION
Slide 53: Our Goal Is to Grow Faster Than the Beauty Market
OUR GOAL IS TO Historical beauty GROW FASTER THAN Coty’s targeted market growth THE BEAUTY MARKET revenue CAGR (FY22-FY25 and Beyond) 53
Slide 54: Strong framework and transformation initiatives
1 2 3 Strong framework Unlocking growth Significant earnings and and transformation opportunities in cash flow growth initiatives existing portfolio potential
Slide 55: Let's Make Over the Beauty World, Together
LET’S MAKE OVER THE BEAUTY WORLD, TOGETHER 55
Slide 56: 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, the impact of COVID-19 and potential recovery scenarios, strategic planning, targets