Coty Inc. · NYSE:COTY
Coty — Deutsche Bank Global Consumer Conference 2023
28 slides from Coty's conference presentation, Jun 6, 2023
Slide 1: Coty Investor Presentation
COTY INVESTOR PRESENTATION DB CONSUMER CONFERENCE JUNE 6, 2023 1
Slide 2: A Beauty Powerhouse, with Significant White Spaces
COTY A BEAUTY POWERHOUSE, WITH SIGNIFICANT WHITE SPACES 2
Slide 3: Our Legacy in Beauty
COTY OUR LEGACY IN BEAUTY Founded in 1904 in A global leader in beauty Paris, France for over 100 years 3
Slide 4: Two Profitable Divisions Reaching Consumers Across Price Points
TWO PROFITABLE DIVISIONS REACHING CONSUMERS ACROSS PRICE POINTS CONSUMER BEAUTY CONSUMER BEAUTY 38% 3Q23 FYTD 41% FY21 REVENUE REVENUE BY DIVISION BY DIVISION 59% 62% PRESTIGE PRESTIGE 4
Slide 5: Diversified Regional Portfolio, with White Space Potential
DIVERSIFIED REGIONAL PORTFOLIO, WITH WHITE SPACE POTENTIAL NORTH CHINA AMERICA (INCL. KYLIE) WESTERN 4% EUROPE [Beauty 30% 26% Industry: ~13%] [Beauty [Beauty Industry: ~20%] Industry: ~20%] EASTERN EU & MEA 18% [Beauty Industry: ~8%] APAC 6% GLOBAL [Beauty TRAVEL RETAIL Industry: ~20%] 8% BRAZIL &
Slide 6: Global and Category-Led R&D Centers of Excellence
GLOBAL AND CATEGORY-LED R&D CENTERS OF EXCELLENCE FRAGRANCE SKIN & CENTER BODY CENTER OF EXCELLENCE OF EXCELLENCE (SWITZERLAND) (CHINA) COSMETICS SKINCARE CENTER CENTER OF EXCELLENCE OF EXCELLENCE (USA) (MONACO) BODYCARE CENTER OF EXCELLENCE (BRAZIL) 6
Slide 7: Leading Expertise & IP in Beauty
LEADING EXPERTISE & IP IN BEAUTY FRAGRANCES COLOR COSMETICS SKINCARE Years of expertise Active skincare patents Years of expertise reinventing modern in Color Cosmetics perfumery Published scientific Fragrance Scientists, studies Scientists, Evaluators Evaluators and and Industry experts Industry ex
Slide 8: Beautiful Brand Portfolio Reaching Consumers Across Price Points
BEAUTIFUL BRAND PORTFOLIO REACHING CONSUMERS ACROSS PRICE POINTS ULTRA-PREMIUM $150 - 450 PREMIUM + $50 - 150 PREMIUM $20 - 100 MASS $5 - 20 8
Slide 9: Our 6 Strategic Pillars
OUR 6 STRATEGIC PILLARS #1 #2 #3 #4 #5 #6 Stabilize and Accelerate luxury Build skincare Build Expand in China Become a grow consumer fragrances portfolio across e-commerce and Travel Retail, beauty leader beauty makeup & become a both divisions and direct-to- led by Prestige in sustainability brand
Slide 10: Double-Digit Consumer Beauty Sales Growth
DOUBLE-DIGIT CONSUMER BEAUTY SALES GROWTH Coty revenues and sell-out growing double-digits, driving market share gains for 5th consecutive quarter COVERGIRL RIMMEL BRUNO BANANI MONANGE +20 BPS +10 BPS +10 BPS +30 BPS +20 BPS Source: NielsenIQ Market: B&M and E-com Period: Last 3 Months March 2023 Ca
Slide 11: Strengthening Core & Entering White Spaces Through Owned & Licensed Brands
STRENGTHENING CORE & ENTERING WHITE SPACES THROUGH BALANCE OF OWNED & LICENSED BRANDS CORE CORE WHITE SPACE WHITE SPACE LUXURY & ENTRY CONSUMER BEAUTY PRESTIGE SKINCARE ULTRA PREMIUM NICHE PRESTIGE FRAGRANCES MAKEUP FRAGRANCES SIGNATURES ~$40B Market / ~$40B Market / ~$70B Market / ~$4B Market / Est
Slide 12: A New Beginning
A NEW BEGINNING fragrance project to date Collection of 14 scents for the formulation and packaging 12
Slide 13: Orveda
ORVEDA One of the most of all time – of active ingredients up to than the average skincare Worldwide DTC launch in 13
Slide 14: Upgraded Orveda Counters in NYC & Paris
Upgraded Orveda Counters in NYC & Paris: Recent sales have DOUBLED vs. prior monthly run-rate 14
Slide 15: Lancaster Ligne Princiere Launch
LANCASTER LIGNE PRINCIERE LAUNCH Recent KOL livestreaming session on Conversion at new counters inline Douyin generated over to ahead of beauty peers, with Ligne >$300K in sales in ~3.5 hours Princiere driving majority of sales 15
Slide 16: Creating #BeautyThatLasts and Progressing on Our ESG Journey
CREATING #BEAUTYTHATLASTS AND PROGRESSING ON OUR ESG JOURNEY New carbon targets approved by science backed target initiative Pioneer in fragrances using carbon-captured ethanol & First carbon positive fragrance in the world 16
Slide 17: Strong Financial Progress
STRONG FINANCIAL PROGRESS 17
Slide 18: Q3: Strong and Broad-Based Revenue Growth +15% LFL
Q3: STRONG AND BROAD-BASED REVENUE GROWTH +15% LFL SALES GROWTH IN Q3 BENEFITTED FROM RETAILER RESTOCKING POST HOLIDAYS VOLUME GROWTH IN BOTH SEGMENTS CONSUMER BEAUTY PRESTIGE APAC AMERICAS +12% LFL +16% LFL +4% LFL +15% LFL 12% 38% Q3 Q3 42% REVENUES REVENUES 62% 46% EMEA +18% LFL 18
Slide 19: Q4 QTD: Maintaining Strong Growth Momentum
Q4 QTD: MAINTAINING STRONG GROWTH MOMENTUM EMEA Continued strong growth, led by momentum in APAC AMERICAS Prestige Fragrances and Accelerating growth, led by Continued strong growth, led Travel Retail China re-opening and by momentum in Prestige Travel Retail Fragrances, Travel Retail, and LATAM 19
Slide 20: Strong Value Accretion
STRONG VALUE ACCRETION ~12-13% ~12-13% CAGR LFL CAGR (INC. >$40M x8 (ex FX) FX HURT) ~$5.45- ~$955- 965M $0.38- ~$5.30B 5.48B ~$905M 0.39 ~$4.63B ~$762M $0.28 $0.05 FY21 FY22 FY23E FY21 FY22 FY23E FY21 FY22 FY23E NET REVENUES ADJUSTED EBITDA ADJUSTED EPS 20 Adjusted EPS excludes mark-to-market on eq
Slide 21: Strong Margin Expansion
STRONG MARGIN EXPANSION UP UP UP ~500-600bps ~ 400bps ~ 400bps ~64% HIGH ~13% ~28% 20% ~63.7% RANGE ~11.6% ~60.0% ~22% ~9.4% FY21 FY22 FY23E FY21 FY22 FY23E FY21 FY22 FY23E ADVERTISING & ADJUSTED GROSS MARGIN ADJ. OPERATING MARGIN CONSUMER PROMOTION 21
Slide 22: Strong Deleveraging and Cash Generation
STRONG DELEVERAGING AND CASH GENERATION DOWN >3X ~6.8x ~4.7x ~$145M ~$550M >$400M Towards 3x FY21 FY22 CY23E FY21 FY22 FY23E LEVERAGE FREE CASH FLOW 22 FY22 FCF included one-time working capital benefits
Slide 23: Attractive Growth Algorithm
ATTRACTIVE GROWTH ALGORITHM 23
Slide 24: Accelerating Sales and Profit Momentum
ACCELERATING SALES AND PROFIT MOMENTUM FY22 FY23E FY23-26E FY26 & Beyond +9-10% LFL CAGR Upper end of NET REVENUES $5.30B +6-8% LFL CAGR +6-8% LFL CAGR GROSS MARGIN 63.7% Modest Expansion Mid 60s % by ‘25 Expanding EBITDA $905M $955-965M +9-11% CAGR +9-11% CAGR 1 TAX RATE ~28% Mid-to-High 20% Mid-to
Slide 25: Accelerate Free Cash Flow Generation
ACCELERATE FREE CASH FLOW GENERATION FY22 FY23E FY26E ADJ EBITDA $905M $955-965M $1.2Bn - $1.3Bn 1X CASH COSTS <$150M <$50M NM CASH INTEREST ~$215M Mid $200s Low $100s CASH TAXES ~$100M ~$100M Low $100M WORKING CAP Positive Positive Positive CAPEX ~$175M Low $200s Low to mid $200s FREE CASH FLOW ~$5
Slide 26: Strengthening Capital Structure to Enable Deleveraging and Capital Returns
STRENGTHENING CAPITAL STRUCTURE TO ENABLE DELEVERAGING AND CAPITAL RETURNS CY23-CY25 CAPITAL ALLOCATION CY22 (Cumulative) PRIORITIES BY END OF CY25 Net Debt <$3.9B ~75% Net Debt <$2.5B FCF >$1.2B Deleverage (>$0.4B / year) Financial Leverage ~2x Financial Leverage ~4.1x ~25% Capital Returns Capital
Slide 27: Since 1904
SINCE 1904
Slide 28: 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, strategic planning, targets and outlook for future reporting periods (including the