Company to Host Investor Day Event at New York
Stock Exchange Today
Reveals Plan for Above Market Growth through
FY25 and Beyond
Unveils Major New Product Launches in Mass and
Prestige Skincare
Increases Cost Savings Targets to Fuel
Reinvestment and Profit Expansion
Coty Inc. (NYSE: COTY) ("Coty" or "the Company"), one of the
world’s leading beauty companies and global leader in fragrance,
today will host an Investor Day at the New York Stock Exchange. At
the event, Coty will provide an update on the significant progress
made on the Company’s six strategic pillars, elaborate on key
upcoming operational milestones, report on its comprehensive
transformation “All-In To Win” program, and announce its financial
goals through FY25 and beyond.
Sue Y. Nabi, Chief Executive Officer of Coty, said: “Coty has
reclaimed its position as a true beauty powerhouse. We expect to
outperform the beauty market through FY25 and beyond. I am very
proud of the significant progress our teams have made, delivering
against each of our strategic pillars. I am more confident than
ever in Coty’s future and our ability to deliver significant value
for all of our stakeholders.
Coty’s unique and beautiful portfolio of brands, our talented
team, and our single-minded focus on delivering sustainable,
profitable growth, coupled with targeted reinvestment, are enabling
us to evolve. We continue to capitalize on the tremendous growth
opportunities in prestige fragrances, skincare, China, clean beauty
and e-commerce.”
Event Overview
During today’s event, members of Coty’s leadership team will
outline how the business has continued to deliver enhanced
performance against its previously communicated strategic
priorities, including:
- Stabilizing and growing its Consumer Beauty business
- Accelerating luxury fragrances and establishing Coty as a key
player in prestige make-up
- Building a skincare portfolio across its Prestige and Consumer
Beauty divisions
- Enhancing e-commerce and Direct-to-Consumer (DTC)
capabilities
- Expanding in China through Prestige and select Consumer Beauty
brands
- Establishing Coty as an industry leader in sustainability
In addition, presenters will also provide insights into the
Company’s growth framework and the numerous initiatives underway
that are transforming and positioning Coty to succeed,
including:
- The “All-In to Win” program, encompassing cost saving and
capital deployment initiatives that have ignited the full potential
of Coty, with an additional $75M of savings identified for
FY24;
- Coty’s unique and differentiated brand portfolio, spanning key
beauty categories across prestige and mass channels;
- The robust plans to accelerate Coty’s skincare business, that
now incorporates a licensing agreement with the ultra premium,
multi-award winning, Orveda skincare brand, and the recently
announced CoverGirl Clean Fresh Skincare line; and
- Coty’s outstanding growth opportunities that can be achieved by
harnessing the power of its brands, distribution reach, R&D,
IP, and category expertise.
Financial Outlook
The Company is continuing to expand gross margin and cost
savings, allowing it to reinvest into key strategic initiatives and
simultaneously deliver annual profit growth, targeting an adjusted
EBITDA of at a minimum $900 million for FY22, and approaching $1
billion in CY22. The growing confidence in business progress and
capital structure improvement leads Coty to raise its FY22 adjusted
EPS guidance to $0.20-0.24 from its previous guidance of
$0.19-0.23.
Over the coming years, Coty expects to benefit from an improving
beauty market, including a stronger U.S. and Chinese market, a
robust rebound in Travel Retail, and steady improvement across
Europe. Based on this favorable market backdrop, the strong
performance of recent brand repositioning and product launches, and
Coty’s robust category and market expansion plans, the Company is
announcing the following financial targets through FY25 and
beyond:
- Net Revenues to grow 6% to 8% annually LFL through FY25 and
beyond, ahead of expected beauty market growth of 3% to 5%
- Gross Margin to reach mid 60% by FY25, and further annual
expansion thereafter
- Adjusted operating margin expansion of 50-70bps annually
through FY25 and beyond
- Adjusted EBITDA to grow at 9% to 11% annually through FY25 and
beyond
- Adjusted EPS above 30% CAGR through FY25, with mid to high
teens % growth thereafter
- Strong annual improvement in free cash flow
- Leverage target of approximately 4x by end of CY22 and 3x by
end of CY23 through EBITDA and free cash flow expansion, with an
optimal leverage level of below 2x
- Complete divestiture of remaining 26% stake in Wella by FY25,
further strengthening Coty’s balance sheet and leverage
Webcast Information
Coty’s Investor Day presentation will be available via webcast
at investors.coty.com from 8:30 a.m.
ET (Eastern Time), concluding at approximately 12:00 p.m. ET. The
webcast and presentation materials can be accessed through Coty’s
investor relations website. A replay of the webcast will be
available following the event.
About Coty Inc.
Coty is one of the world’s largest beauty companies with an
iconic portfolio of brands across fragrance, color cosmetics, and
skin and body care. Coty is the global leader in fragrance, and
number three in color cosmetics. Coty markets, sells and
distributes the products in approximately 130 countries and
territories. Coty and its brands are committed to a range of social
causes as well as seeking to minimize its impact on the
environment. For additional information about Coty Inc., please
visit www.coty.com.
Forward Looking
Statements
Certain statements in this press release are “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. 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, the Company’s
comprehensive transformation agenda (the “Transformation Plan”),
strategic planning, targets, segment reporting and outlook for
future reporting periods (including the extent and timing of
revenue, expense and profit trends and changes in operating cash
flows and cash flows from operating activities and investing
activities), the impact of the Wella divestiture and the related
transition services (the “Wella TSA”), the Company’s future
operations and strategy (including the expected implementation and
related impact of its strategic priorities), ongoing and future
cost efficiency, optimization and restructuring initiatives and
programs, strategic transactions (including their expected timing
and impact), the Company’s capital allocation strategy and payment
of dividends (including suspension of dividend payments and the
duration thereof), investments, licenses and portfolio changes,
synergies, savings, performance, cost, timing and integration of
acquisitions, including the strategic partnership with Kylie Jenner
and the strategic partnership with Kim Kardashian West, future cash
flows, liquidity and borrowing capacity, timing and size of cash
outflows and debt deleveraging, the availability of local
government funding or reimbursement programs in connection with
COVID-19 (including expected timing and amounts), the timing and
extent of any future impairments, and synergies, savings, impact,
cost, timing and implementation of the Company’s Transformation
Plan, including operational and organizational structure changes,
operational execution and simplification initiatives, fixed cost
reductions, supply chain changes, e-commerce and digital
initiatives, and the priorities of senior management. These
forward-looking statements are generally identified by words or
phrases, such as “anticipate”, “are going to”, “estimate”, “plan”,
“project”, “expect”, “believe”, “intend”, “foresee”, “forecast”,
“will”, “may”, “should”, “outlook”, “continue”, “temporary”,
“target”, “aim”, “potential”, “goal” and similar words or phrases.
These statements are based on certain assumptions and estimates
that we consider reasonable, but are subject to a number of risks
and uncertainties, many of which are beyond our control, which
could cause actual events or results (including our financial
condition, results of operations, cash flows and prospects) to
differ materially from such statements, including risks and
uncertainties relating to:
- the impact of COVID-19 (or future similar events), including
demand for the Company’s products, illness, quarantines, government
actions, facility closures, store closures or other restrictions in
connection with the COVID-19 pandemic, and the extent and duration
thereof, the availability and widespread distribution of a safe and
effective vaccine, related impact on the Company's ability to meet
customer needs and on the ability of third parties on which the
Company relies, including its suppliers, customers, contract
manufacturers, distributors, contractors, commercial banks and
joint-venture partners, to meet their obligations to the Company,
in particular collections from customers, the extent that
government funding and reimbursement programs in connection with
COVID-19 are available to the Company, and the ability to
successfully implement measures to respond to such impacts;
- the Company’s ability to successfully implement its multi-year
Transformation Plan, including its management realignment,
reporting structure changes, operational and organizational
changes, and the initiatives to further reduce the Company’s cost
base, and to develop and achieve its global business strategies
(including mix management, select price increases, more disciplined
promotions, and foregoing low value sales), compete effectively in
the beauty industry, achieve the benefits contemplated by its
strategic initiatives (including revenue growth, cost control,
gross margin growth and debt deleveraging) and successfully
implement its strategic priorities (including innovation
performance in prestige and mass channels, strengthening its
positions in core markets, accelerating its digital and e-commerce
capabilities, building on its skincare portfolio, and expanding its
presence in China) in each case within the expected time frame or
at all;
- the Company’s ability to anticipate, gauge and respond to
market trends and consumer preferences, which may change rapidly,
and the market acceptance of new products, including new products
related to Kylie Jenner’s or Kim Kardashian West’s existing beauty
business, any relaunched or rebranded products and the anticipated
costs and discounting associated with such relaunches and rebrands,
and consumer receptiveness to our current and future marketing
philosophy and consumer engagement activities (including digital
marketing and media);
- use of estimates and assumptions in preparing the Company’s
financial statements, including with regard to revenue recognition,
income taxes (including the expected timing and amount of the
release of any tax valuation allowance), the assessment of
goodwill, other intangible and long-lived assets for impairments,
the market value of inventory, the fair value of the equity
investment, and the fair value of acquired assets and liabilities
associated with acquisitions;
- the impact of any future impairments;
- managerial, transformational, operational, regulatory, legal
and financial risks, including diversion of management attention to
and management of cash flows, expenses and costs associated with
the Company's response to COVID-19, the Transformation Plan, the
Wella TSA, the integration of the King Kylie transaction and the
KKW transaction, and future strategic initiatives, and, in
particular, the Company's ability to manage and execute many
initiatives simultaneously including any resulting complexity,
employee attrition or diversion of resources;
- the timing, costs and impacts of divestitures and the amount
and use of proceeds from any such transactions;
- future divestitures and the impact thereof on, and future
acquisitions, new licenses and joint ventures and the integration
thereof with, our business, operations, systems, financial data and
culture and the ability to realize synergies, avoid future supply
chain and other business disruptions, reduce costs (including
through the Company’s cash efficiency initiatives), avoid
liabilities and realize potential efficiencies and benefits
(including through our restructuring initiatives) at the levels and
at the costs and within the time frames contemplated or at
all;
- increased competition, consolidation among retailers, shifts in
consumers’ preferred distribution and marketing channels (including
to digital and prestige channels), distribution and shelf-space
resets or reductions, compression of go-to-market cycles, changes
in product and marketing requirements by retailers, reductions in
retailer inventory levels and order lead-times or changes in
purchasing patterns, impact from COVID-19 on retail revenues, and
other changes in the retail, e-commerce and wholesale environment
in which the Company does business and sells its products and the
Company’s ability to respond to such changes (including its ability
to expand its digital, direct-to-consumer and e-commerce
capabilities within contemplated timeframes or at all);
- the Company and its joint ventures’, business partners’ and
licensors’ abilities to obtain, maintain and protect the
intellectual property used in its and their respective businesses,
protect its and their respective reputations (including those of
its and their executives or influencers), public goodwill, and
defend claims by third parties for infringement of intellectual
property rights, and specifically in connection with the strategic
partnerships with Kylie Jenner and Kim Kardashian, risks related to
the entry into a new distribution channel, the potential for
channel conflict, risks of retaining customers and key employees,
difficulties of integration (or the risks associated with limiting
integration), risks related to regulation of multi-level marketing
business models, ability to protect trademarks and brand names,
litigation or investigations by governmental authorities, and
changes in law, regulations and policies that affect KKW Holdings,
LLC’s (“KKW Holdings”) business or products, including risk that
direct selling laws and regulations may be modified, interpreted or
enforced in a manner that results in a negative impact to KKW
Holdings’ business model, revenue, sales force or business;
- any change to the Company’s capital allocation and/or cash
management priorities, including any change in the Company’s
dividend policy or, if the Company's Board declares dividends, the
Company’s stock dividend reinvestment program;
- any unanticipated problems, liabilities or integration or other
challenges associated with a past or future acquired business,
joint ventures or strategic partnerships which could result in
increased risk or new, unanticipated or unknown liabilities,
including with respect to environmental, competition and other
regulatory, compliance or legal matters;
- the Company’s international operations and joint ventures,
including enforceability and effectiveness of its joint venture
agreements and reputational, compliance, regulatory, economic and
foreign political risks, including difficulties and costs
associated with maintaining compliance with a broad variety of
complex local and international regulations;
- the Company’s dependence on certain licenses (especially in the
fragrance category) and the Company’s ability to renew expiring
licenses on favorable terms or at all;
- the Company’s dependence on entities performing outsourced
functions, including outsourcing of distribution functions, and
third-party manufacturers, logistics and supply chain suppliers,
and other suppliers, including third-party software providers,
web-hosting and e-commerce providers;
- administrative, product development and other difficulties in
meeting the expected timing of market expansions, product launches,
re-launches and marketing efforts, including in connection with new
products related to Kylie Jenner’s or Kim Kardashian West’s
existing beauty businesses;
- global political and/or economic uncertainties, disruptions or
major regulatory or policy changes, and/or the enforcement thereof
that affect the Company’s business, financial performance,
operations or products, including the impact of Brexit (and related
business or market disruption), the current U.S. administration and
recent election, changes in the U.S. tax code, and recent changes
and future changes in tariffs, retaliatory or trade protection
measures, trade policies and other international trade regulations
in the U.S., the European Union and Asia and in other regions where
the Company operates;
- currency exchange rate volatility and currency
devaluation;
- the number, type, outcomes (by judgment, order or settlement)
and costs of current or future legal, compliance, tax, regulatory
or administrative proceedings, investigations and/or litigation,
including litigation relating to the tender offer by Cottage Holdco
B.V. (the “Cottage Tender Offer”) and product liability cases
(including asbestos), and litigation or investigations relating to
the strategic partnerships with Kylie Jenner and Kim Kardashian
West;
- the Company’s ability to manage seasonal factors and other
variability and to anticipate future business trends and
needs;
- disruptions in operations, sales and in other areas, including
due to disruptions in our supply chain, restructurings and other
business alignment activities, the Wella Transaction and related
carve-out and transition activities, manufacturing or information
technology systems, labor disputes, extreme weather and natural
disasters, impact from COVID-19 or similar global public health
events, and the impact of such disruptions on the Company’s ability
to generate profits, stabilize or grow revenues or cash flows,
comply with its contractual obligations and accurately forecast
demand and supply needs and/or future results;
- restrictions imposed on the Company through its license
agreements, credit facilities and senior unsecured bonds or other
material contracts, its ability to generate cash flow to repay,
refinance or recapitalize debt and otherwise comply with its debt
instruments, and changes in the manner in which the Company
finances its debt and future capital needs;
- increasing dependency on information technology, including as a
result of remote working in response to COVID-19, and the Company’s
ability to protect against service interruptions, data corruption,
cyber-based attacks or network security breaches, including
ransomware attacks, costs and timing of implementation and
effectiveness of any upgrades or other changes to information
technology systems, and the cost of compliance or the Company’s
failure to comply with any privacy or data security laws (including
the European Union General Data Protection Regulation, the
California Consumer Privacy Act and the Brazil General Data
Protection Law) or to protect against theft of customer, employee
and corporate sensitive information;
- the Company's ability to attract and retain key personnel and
the impact of senior management transitions and organizational
structure changes;
- the distribution and sale by third parties of counterfeit
and/or gray market versions of the Company’s products;
- the impact of the Transformation Plan as well as the Wella
Transaction on the Company’s relationships with key customers and
suppliers and certain material contracts;
- the Company’s relationship with Cottage Holdco B.V., as the
Company’s majority stockholder, and its affiliates, and any related
conflicts of interest or litigation;
- the Company’s relationship with KKR, whose affiliates KKR
Rainbow Aggregator L.P. and KKR Bidco are respectively a
significant stockholder in Coty and an investor in the Wella
Business, and any related conflicts of interest or litigation;
- future sales of a significant number of shares by the Company’s
majority stockholder or the perception that such sales could occur;
and
- other factors described elsewhere in this document and in
documents that the Company files with the SEC from time to
time.
When used herein, the term “includes” and “including” means,
unless the context otherwise indicates, “including without
limitation”. More information about potential risks and
uncertainties that could affect the Company’s business and
financial results is included under the heading “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in the Company’s Quarterly Report on Form
10-Q for the period ended September 30, 2021 and annual report on
Form 10-K for the year ended June 30, 2021 and other periodic
reports the Company has filed and may file with the SEC from time
to time.
All forward-looking statements made in this release are
qualified by these cautionary statements. These forward-looking
statements are made only as of the date of this release, and the
Company does not undertake any obligation, other than as may be
required by applicable law, to update or revise any forward-looking
or cautionary statements to reflect changes in assumptions, the
occurrence of events, unanticipated or otherwise, or changes in
future operating results over time or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211118005526/en/
Investor Relations Olga
Levinzon, +1 212 389-7733 Olga_Levinzon@cotyinc.com
Media Antonia
Werther, +31 621 394495 Antonia_Werther@cotyinc.com
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