Estee Lauder Companies, Inc. (the) · NYSE:EL
Estee Lauder Companies, Inc. (the) — Investor Day (March 2019)
39 slides from Estee Lauder Companies, Inc. (the)'s investor day presentation, Mar 6, 2019
Slide 1: Investor Day 2019
INVESTOR 2019 DAY
Slide 2: North America and Clinique presenters
CHRIS GOOD GROUP PRESIDENT, NORTH AMERICA NORTH AMERICA JANE LAUDER GLOBAL BRAND PRESIDENT, CLINIQUE
Slide 3: US Prestige Beauty: $26B, +7% in FY18
PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH PRESTIGE BEAUTY US PRESTIGE BEAUTY: $26B, +7% IN FY18 40% of Total US Beauty • • 85% of US Beauty dollar growth Prestige Beauty: size includes all channels excluding Salons Source: NPD for TMM universe, IRI for Food, Drug, Mass, proprietary ELC sizi
Slide 4: Consumers diverse, engaged in prestige beauty
PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH CONSUMERS DIVERSE, ENGAGED IN PRESTIGE BEAUTY 38% MULTI-ETHNIC TODAY, >50% BY 2050 42% GENZ AND MILLENNIALS; 30% AGELESS HIGHLY ENGAGED IN PRESTIGE BEAUTY 60% GenZ purchase Prestige Makeup •
Slide 5: Categories growth drivers
PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH CATEGORIES GROWTH DRIVERS US PRESTIGE BEAUTY: >7% of growth annually since FY16 SKIN CARE 27% OF MIX MAKEUP 46% OF MIX FRAGRANCE 23% OF MIX HAIR CARE 4% OF MIX 5.2% 0.6% FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 Source: NPD. Category mix and growth ar
Slide 6: Media: shift to digital
PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH MEDIA: SHIFT TO DIGITAL DIGITAL: #1, >50% OF MEDIA CONVERGENCE OF MEDIA AND CONSUMPTION >24% of Gen Z and Millennials purchase • directly on social media Source: eMarketer, industry reports, consumer surveys
Slide 7: Channels significant shifts
PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH CHANNELS SIGNIFICANT SHIFTS SPECIALTY-MULTI: #1 CHANNEL ONLINE: DOUBLE-DIGIT GROWTH 8/10 CONSUMERS SHOP IN MORE THAN 5 CHANNELS
Slide 8: #1 company in prestige beauty
PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH #1 COMPANY IN PRESTIGE BEAUTY $4.5B IN NET SALES IN NORTH AMERICA IN FY18 >250 MILLION UNITS SHIPPED ANNUALLY
Slide 9: Winning brands across key categories
PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH WINNING BRANDS ACROSS KEY CATEGORIES SKIN CARE MAKEUP FRAGRANCE HAIR CARE ~1 of 4 products from ELC 30% of products from ELC #2 to #4 Fragrance company High growth • • • • • • • • 4 ELC brands in Top 10: EL, 4 ELC MAC, brands in Top 10: Gaining shar
Slide 10: North America as a granular emerging region
PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH NORTH AMERICA AS A GRANULAR EMERGING REGION
Slide 11: Our five growth drivers
WIN WITH MORE CONSUMERS CHANGING DISTRIBUTION EQUILIBRIUM TARGETED MEDIA INVESTMENT AGILE, EMPOWERED ORGANIZATION BREAKTHROUGH INNOVATION PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH OUR FIVE GROWTH DRIVERS
Slide 12: Our five growth drivers
PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH OUR FIVE GROWTH DRIVERS WIN WITH MORE CONSUMERS CHANGING DISTRIBUTION EQUILIBRIUM TARGETED MEDIA INVESTMENT AGILE, EMPOWERED ORGANIZATION BREAKTHROUGH INNOVATION
Slide 13: Win with more consumers
CONSUMERS YESTERDAY “One size fits all” obsessed. Granular consumer and ll consumers; and execute with local relevance PRESTIGE BEAUTY ELC TODAYBETTER E WIN WITH MORE XPOSED TO GROWTH market insights TODAY Consumer to win with a
Slide 14: Double click: locally-relevant execution
PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH DOUBLE CLICK: LO CALLY-RELEVANT EXECUTION Chicago: From 1 Designated Market Area to >10 catchments 2,600 CONSUMER-CENTRIC CATCHMENTS
Slide 15: Double click: La Mer granular launch activation
PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH DOUBLE CLICK: LA MER GRANULAR LAUNCH ACTIVATION COPY IN MILLENNIAL CATCHMENTS COPY IN LATINA CATCHMENTS COPY IN ASIAN CATCHMENTS
Slide 16: Distribution equilibrium
DISTRIBUTION EQUILIBRIUM YESTERDAY Bricks and Department Stores OF BUSINESS BY CHANNEL PRESTIGE BEAUTY ELC TODAYBETTER E CHANGING XPOSED TO GROWTH brand equity bu ilding channels All stats cover FY15-FY19 period (Jan estimate) TODAY Fast growing, PIVOT: MIX >15% CAGR Fast growing and brand equity bu
Slide 17: Targeted media investment
PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH TARGETED MEDIA INVESTMENT TO WIN IN MUST WIN SUBCATEGORIES YESTERDAY Print and TV; broad messages TODAY Digital and social; personalized targeting
Slide 18: Agile, empowered organization
PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH AGILE, EMPOWERED ORGANIZATION YESTERDAY ‘Traditional’ capabilities TODAY Fueling Retail Excellence, Centers of Excellence, and resource allocation Talent and PL re-engineering to fuel growth UNLOCKING THE POWER OF THE FIELD BEST-IN-CLASS CAPABILITIE
Slide 19: Better exposed to growth
PRESTIGE BEAUTY ELC TODAY BETTER EXPOSED TO GROWTH BETTER EXPOSED TO GROWTH
Slide 20: Clinique US: Better exposed to growth
Clinique US: Better exposed to growth
Slide 21: Clinique in the US
CLINIQUE TODAY BETTER EXPOSED TO GROWTH Clinique in the US ~60M units 1 in 4 beauty products purchased atMacy’sisClinique +10% recruitment frommass
Slide 22: Our consumers
CLINIQUE TODAY BETTER EXPOSED TO GROWTH Our Consumers ~20 million activecustomers +40% retention
Slide 23: Moisturizer business in US
CLINIQUE TODAY BETTER EXPOSED TO GROWTH Moisturizer business in US #1 prestige moisturizer Andwesellmore intheUSthan… moisturizers Source: March 2016-March 2019 NPD
Slide 24: Moisturizer business in US
CLINIQUE TODAY Moisturizer business in US 25% of prestige moisturizers Source: Derived from NPD data pull June 2017 – July 2018. Based on units of prestige moisturizers sold in DS & SMC. BETTER EXPOSED TO GROWTH
Slide 25: Moisturizer business in US
CLINIQUE TODAY BETTER EXPOSED TO GROWTH Moisturizer business in US #1 prestige moisturizer Andwesellmore intheUSthan… moisturizers Source: March 2016-March 2019 NPD
Slide 26: Moisturizer business in US
CLINIQUE TODAY BETTER EXPOSED TO GROWTH Moisturizer business in US ~25% of prestige moisturizers Source: Derived from NPD data pull June 2017 – July 2018. Based on units of prestige moisturizers sold in DS & SMC.
Slide 27: We sell one moisturizer every 4 seconds
CLINIQUE TODAY BETTER EXPOSED TO GROWTH Moisturizer business in US We sell one moisturizerevery 4seconds
Slide 28: The opportunity
CLINIQUE TODAY BETTER EXPOSED TO GROWTH The opportunity 98% 68% ofwomenuseamoisturizer daily havenotyetfoundtheone Women intheUSarespending $860M peryearonmoisturizers thataren’ttherightfit
Slide 29: The "one"
CLINIQUE TODAY BETTER EXPOSED TO GROWTH The “one”
Slide 30: Always formulated for maximum
Always formulated for maximum results without irritation. i No parabens. No phthalates. i fragrance. Just happy skin. > 4 ~ Ss IQUE ‘Allergy Tested. 100% Fragrance Free.
Slide 31: • Always formulated for aximum results without inritation. • parabens. No phthalates. r\J No
• Always formulated for aximum results without inritation. • parabens. No phthalates. r\J No fragrance. Just happy skin. Allergy Tested.100% Fragrance Free.
Slide 32: Recruiting new consumers with Clinique iD
CLINIQUE TODAY BETTER EXPOSED TO GROWTH Recruiting new consumers with Clinique iD 1.5B potentialimpressions 18% engagement +40% newcustomers
Slide 33: Targeted content & media investment
CLINIQUE TODAY BETTER EXPOSED TO GROWTH Targeted Content & Media Investment ~80% mediaspendindigital, influencers&experiences ~30% reducedcost of customeracquisition iDisover-indexing withconsumers under 35
Slide 34: Clinique iD early results
CLINIQUE TODAY BETTER EXPOSED TO GROWTH Clinique iD Early Results
Slide 35: A new kind of breakthrough innovation
CLINIQUE TODAY BETTER EXPOSED TO GROWTH A new kind of breakthrough innovation Clinique iD & beyond
Slide 36: Clinique iD & beyond
CLINIQUE TODAY BETTER EXPOSED TO GROWTH cA uneswtkoinmd oifzation =breakthrough innovation iCnlicnilquuseiioDn& beyond
Slide 37: And this is just the beginning
And this is just the beginning… Foundation Everything we know about skin care goes into our foundation.
Slide 38: Forward-looking information and non-GAAP disclosures
FORWARD-LOOKING INFORMATION AND NON-GAAP DISCLOSURES Statements in the Investor Day presentations, including remarks by the CEO and other members of management, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may a
Slide 39: Forward-looking information and non-GAAP disclosures
FORWARD-LOOKING INFORMATION AND NON-GAAP DISCLOSURES Statements in the Investor Day presentations, including remarks by the CEO and other members of management, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may a