Estee Lauder Companies, Inc. (the) · NYSE:EL
Estee Lauder Companies, Inc. (the) — The Estée Lauder Companies — Shareholder Meeting (November 2015)
50 slides from Estee Lauder Companies, Inc. (the)'s shareholder meeting presentation, Nov 12, 2015
Slide 1: Estee Lauder Companies
ESTEE LAUDER COMPANIES
Slide 2: FY2015 Continued Our Beautiful Momentum
FY2015 CONTINUED OUR BEAUTIFUL MOMENTUM
Slide 3: Fiscal 2015 Highlights
FISCAL 2015 HIGHLIGHTS Grew net sales ahead of prestige beauty worldwide Achieved strong double-digit sales growth in key areas Sales grew in all geographic regions and major product categories Implemented last major wave of Strategic Modernization Initiative Acquired four brands in fast growing are
Slide 4: Before charges and SAP sales shifts, cash flow as reported
Before charges and SAP sales shifts, cash flow as reported.
Slide 5: Broad-Based Regional Sales Growth
BROAD-BASED REGIONAL SALES GROWTH In Constant Currency AMERICAS +6% EUROPE, THE MIDDLE EAST & AFRICA +8% ASIA / PACIFIC +4% ESTEE Pes
Slide 6: Broad-Based Category Sales Growth: Skin Care
RARE ENERGY NOW FOR EYES Re-Nutriv Ultimate Diamond Transformative Energy Eye Creme Eye Creme Re-Nuftfiv ESTEE LAUDER BROAD-BASED CATEGORY SALES GROWTH In Constant Currency SKIN CARE +2% Before SAP sales shifts.
Slide 7: Broad-Based Category Sales Growth: Makeup
BROAD-BASED CATEGORY SALES GROWTH In Constant Currency MAKEUP +10% ESTEE 7 Paes
Slide 8: Broad-Based Category Sales Growth: Fragrance
BROAD-BASED CATEGORY SALES GROWTH In Constant Currency FRAGRANCE +8% ESTEE Paes
Slide 9: Broad-Based Category Sales Growth: Hair Care
BROAD-BASED eee CATEGORY SALES GROWTH In Constant Currency HAIR CARE +7% ~ BETHE ARTIST OF YOU Techniques from Aveda Artists make it easy ESTEE Before SAP sales shifts. LAUDER
Slide 10: Fiscal 2015 Stockholder Value Created
FISCAL 2015 STOCKHOLDER VALUE CREATED $4.1 BILLION Value appreciation $983 MILLION Share repurchases $350 MILLION Dividends paid
Slide 11: Quarterly Dividend Increase
25% QUARTERLY DIVIDEND INCREASE $.30 PER SHARE ESTEE Paes
Slide 12: One Year Five Year
ONE YEAR FIVE YEAR Source: Bloomberg, S&P 06/30/15. Peer group includes P&G, Avon, Beiersdorf, LVMH, L’Oreal and Shiseido.
Slide 13: Our Strategy for Continued Beautiful Momentum
OUR STRATEGY FOR CONTINUED BEAUTIFUL MOMENTUM
Slide 14: Our Vision
OUR VISION The global leader in prestige POWERHOUSE OF UNRIVALED CREATIVITY AND INNOVATION. ESTEE Paes
Slide 15: 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 16: 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 17: Multiple Engines of Growth Fuel Long-Term Sustainability - Brand Opportunities
MULTIPLE ENGINES OF GROWTH FUEL LONG-TERM SUSTAINABILITY - Brand opportunities CLASSIC —__ (iia —_ PROGRESSIVE PREMIUM FREDERIC MALLE © TOMFORD BEAUTY RODIN fie anti Ermenegildo Zegna “ M ARN I! Bumble and bumble. LAB Donnakaran MICHAELKORS aramis SERIES GLAMGLOW smashbox ORIGINS GoodSkin CLINIQUE T
Slide 18: All figures are adjusted for SAP sales shifts
• • • • All figures are adjusted for SAP sales shifts
Slide 19: Multiple Engines of Growth Fuel Long-Term Sustainability - Brand Opportunities
MULTIPLE ENGINES OF GROWTH FUEL LONG-TERM SUSTAINABILITY - Brand opportunities LE LABO’ GRASSE ~ NEW YORK GLAMGLOW ; e 3 } ! | [ 5 | onl 2. oe an r. +«4 | Neell RODIN olio lusso
Slide 20: Multiple Engines of Growth - Channel Opportunities
MULTIPLE ENGINES OF GROWTH FUEL LONG-TERM SUSTAINABILITY - Channel opportunities * Channels representing 1/3 of sales are growing double-digits ¢ Many department stores growing strongly * Travel retail passenger growth continues * E-commerce growing double digits * Freestanding retail store expansio
Slide 21: Travel Retail Is Accretive to Long-Term Growth and Margin
TRAVEL RETAIL IS ACCRETIVE TO LONG-TERM GROWTH AND MARGIN Estee Lauder in Vancouver Equity driver for the brands 4a “ RY a ™ °° International passenger traffic eco Els alee sae ‘ rising bel = { 3 i 4 Fn 7 . ca. ee ee ol, fa * Expanding brands within current = a OG art distribution and in new airport
Slide 22: Accelerate E/M-Commerce
ACCELERATE E/M- COMMERCE * Leader in prestige beauty with 1 mover advantage * ELC Online grew 28% in FY2015 ¢ US and UK >12% of sales online e ELC sites in >30 countries and growing = Photo Live Chat Ag
Slide 23: Accelerate Freestanding Retail Stores
ACCELERATE FREESTANDING RETAIL STORES ¢ ~1,500 retail stores globally ¢ Enter markets where prestige distribution is undeveloped ¢ Build awareness * Engage directly with the consumer A
Slide 24: Leverage Retail and Digital Advantage: Omnichannel Capabilities
LEVERAGE RETAIL AND DIGITAL ADVANTAGE: OMNICHANNEL CAPABILITIES
Slide 25: FY2015 figures are adjusted for SAP sales shifts
• • • • FY2015 figures are adjusted for SAP sales shifts
Slide 26: China: A Significant Long-Term Growth Opportunity
CHINA: A SIGNIFICANT LONG-TERM GROWTH OPPORTUNITY ¢ #3 ELC market at approximately 6% of global sales * Crew 6% in FY2015 * 5year net sales CAGR +23% ¢ 14 brands sold in China, less than half the portfolio ESTEE LAUDER HFS E TS ¢ |n 100 cities, see potential for 300 ¢ E-commerce more than doubled in
Slide 27: Other Emerging Markets - Rapid Long-Term Growth
OTHER 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 * Brand portfolio strength Bobbi Brown launch in Mumbai, India 5 ¢ wi) a ¢ ey
Slide 28: Emerging Markets - Collaborations and Local Relevance
EMERGING MARKETS — COLLABORATIONS AND LOCAL RELEVANCE ESTEE * Pes
Slide 29: Emerging Markets - Collaborations and Local Relevance
EMERGING MARKETS — COLLABORATIONS AND LOCAL RELE ESTEE ” Pes
Slide 30: Emerging Markets - Collaborations and Local Relevance
EMERGING MARKETS — COLLABORATIONS AND LOCAL RELEVANCE MuiO DE RNST Wel ST KAJAL LINER ESTEE ® Pes
Slide 31: Emerging Markets - Collaborations and Local Relevance
EMERGING MARKETS — COLLABORATIONS AND LOCAL RELEVANCE , a “IB 7 ig ag (7
Slide 32: Emerging Markets - Collaborations and Local Relevance
EMERGING MARKETS — COLLABORATIONS AND LOCAL RELEVANCE ESTEE ” Pes
Slide 33: Emerging Markets - Collaborations and Local Relevance
EMERGING MARKETS — COM ABORATIONS AND LOCAL RELEVANCE ESTEE Pes
Slide 34: FY2015 figures are adjusted for SAP sales shifts
FY2015 figures are adjusted for SAP sales shifts
Slide 35: Categories Driving Long-Term Growth
CATEGORIES DRIVING LONG-TERM GROWTH a SS = _— WEN BY DESIRE PURE COLOR-ENVY SCULPTING GLOSS = LIPS&BOYS ESTEE LAUDER ESTEE * Laps
Slide 36: Categories Driving Long-Term Growth
CATEGORIES DRIVING LONG-TERM GROWTH HEALTHY BEAUTIFUL SKIN 9% New Intensive Skin Serum Foundation SPF 40 BOBRI BROWN
Slide 37: Categories Driving Long-Term Growth: Makeup
CATEGORIES DRIVING LONG-TERM GROWTH Makeup Half sugar. Half shine. Twice as tempting.
Slide 38: Categories Driving Long-Term Growth: Skin Care
CATEGORIES DRIVING LONG-TERM GROWTH Skin care V/s | DARPHAW i i PARIS Hy Our light bulb moment. lfawoman can do at least four things at once, her skin care should too. New For Eyes Visibly erase wrinkles. Even skin tone. Lift. Brighten. celebrate Gourage, eng ucsitely Clinique Smart Gustom-Repair ‘S
Slide 39: Categories Driving Long-Term Growth: Skin Care
CATEGORIES DRIVING LONG-TERM GROWTH Skin care AGE BEFORE BEAUTY. NOT ANYMORE. New w/tra-nourishing 4 THREE PART HARMONY? ~~ for renewal. repair and radiance \ AA Three Part
Slide 40: Categories Driving Long-Term Growth: Skin Care
CATEGORIES DRIVING LONG-TERM GROWTH Skin care NOw, LOOK GENAISSANCE DE LA MER 1 new serum essence to transcend tine DIMENSION Wshape + Fill Expert Serum AFIRST ——s FOR EYES New Firm + & 7
Slide 41: Categories Driving Long-Term Growth: Fragrance
CATEGORIES DRIVING LONG-TERM GROWTH Fragrance ESTEE * Pes
Slide 42: Categories Driving Long-Term Growth: Hair Care
CATEGORIES DRIVING LONG-TERM GROWTH Hair care Bumble and bumble. Swell Ways t Wave, (New) Soft waves with sheen
Slide 43: SMI Enables Cost Savings and Efficiencies
SMI-ENABLES COST SAVINGS AND EFFICIENCIES e Fewer returns ¢ Lower Obsolescence and destructions ¢ Indirect procurement ¢ Demo/A&P effectiveness * Collateral & visual merchandising ¢ Shipping & warehousing ¢ Productivity improvements
Slide 44: Optimizing Resource Allocation to the Best Opportunities to Sustain Growth
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 / data * R&D/ innovation Reflecting changes in media landscape * Digital increasing
Slide 45: Before charges and SAP sales shifts
Before charges and SAP sales shifts.
Slide 46: Adjusted net sales and EPS growth
Note: Adjusted net sales and EPS growth is adjusted for SAP sales shifts in fiscal 2015.
Slide 47: ESTEE
ESTEE” Pes
Slide 48: GAAP Reconciliation
GAAP RECONCILIATION In an effort to provide additional and useful information regarding the Company's financial results and other financial information as determined by generally accepted accounting principles (GAAP), this presentation contains certain non- GAAP information. See “GAAP Reconciliation
Slide 49: Forward-looking statements
The forward-looking statements in this presentation, including those containing words like “expect,” “plans,” “may,” “could,” “anticipate,” “estimate,” “projected,” “forecasted,” those in Mr. Freda’s remarks and those in the “Long-term goals” slide involve risks and uncertainties. Factors that could
Slide 50: Estee Lauder Companies
ESTEE LAUDER COMPANIES
The Estée Lauder Companies — Shareholder Meeting (November 2015) on 6ix