Coty Inc. · NYSE:COTY
Coty — Merger or Acquisition (November 2019)
12 slides from Coty's merger presentation, Nov 18, 2019
Slide 1: Coty + Kylie Beauty Partnership
Coty + Kylie Beauty Partnership NOVEMBER 18, 2019 1
Slide 2: Key Messages
KEY MESSAGES • Coty + Kylie strategic partnership sets foundation for a global beauty business • Partnership combines: ➢ Kylie’s strong brand equity and unparalleled social media reach, particularly amongst Gen Z ➢ Coty’s global R&D, manufacturing, distribution capabilities and multi- category exper
Slide 3: The Next Step in Coty's Transformation
THE NEXT STEP IN COTY’S TRANSFORMATION Phase 1 Phase 2 Phase 3 • Completed bottoms- • Began activating • Amplify growth up assessment of the turnaround plan potential of the portfolio Coty business and • With Kylie partnership: brands • Launched strategic review of the • Step-changing • Detailed 4-y
Slide 4: A Social Media Powerhouse Expanding Consumer Reach with Gen Z
A SOCIAL MEDIA POWERHOUSE EXPANDING CONSUMER REACH WITH GEN Z Kylie is a megabrand with 270M+ followers* • 7th most followed person on Instagram • 75% aged between 18 - 34 On Instagram Kylie Beauty has: • Second highest # of followers • Gaining 7K followers per day • Highest engagement amongst all b
Slide 5: Kylie Beauty Business Overview
KYLIE BEAUTY BUSINESS OVERVIEW TTM revenue est Channel Mix EBITDA Margin ~$177M ~50% DTC >25% >40% Growth vs CY18 ~50% Retail 5
Slide 6: Multi-Category Potential: Very Strong Start in Skin
MULTI-CATEGORY POTENTIAL VERY STRONG START IN SKIN Skincare • Launched in May 2019 on kylieskin.com and sold out in 10 hours • Launched at Ulta in Sep 2019 • >50% repeat purchase amongst skincare customers • On track for ~$25M sales in CY19 Strong potential to expand the brand to other core Coty cat
Slide 7: Strong International Potential
STRONG INTERNATIONAL POTENTIAL OVER HALF OF KYLIE’S FOLLOWERS OUTSIDE THE U.S. Advertising Value Equivalency United Kingdom Kylie Jenner: $2.1B Digital Icon #2: $1.3B Canada Digital Icon #3: $2.6B Kylie Jenner: $521M Digital Icon #2: $425M Germany Digital Icon #3: $801M Kylie Jenner: $995M Digital I
Slide 8: Strong International Potential: Leveraging Coty's Global Platform
STRONG INTERNATIONAL POTENTIAL LEVERAGING COTY’S GLOBAL PLATFORM Manufacturing Sites Skin care Cosmetics Fragrances R&D
Slide 9: Compelling Financial Equation
COMPELLING FINANCIAL EQUATION • Coty to buy 51% of Kylie beauty for $600M • Transaction expected to be: • Accretive to the revenue growth of Coty’s core business¹ by >1% • ROIC > WACC by Year 3 • EPS neutral in Year 1, with substantial accretion by Year 3 9 ¹ Core businesses include fragrances, colo
Slide 10: Q&A
Q&A 10
Slide 11: Disclaimer
DISCLAIMER • 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, among other things, Coty’s turnaround plan announced on July 1, 2019 (the “Turnaround Plan”
Slide 12: Disclaimer (continued)
DISCLAIMER (continued) • Coty’s and King Kylie’s ability to anticipate, gauge and respond to market trends and consumer preferences, which may change rapidly, and the market acceptance of new products; • risks related to Coty’s and King Kylie’s international operations, including reputational, regul