Strong Revenue Growth Across Prestige and
Consumer Beauty in FY24
Solid Gross Margin Expansion Supported by
Multi-Lever Strategy
FY25 Guidance In-line with Medium-Term
Targets, Including Expected Sequential Growth Improvement in Q1 and
1H25
Regulatory News:
Coty Inc. (NYSE:COTY) (Paris:COTY) ("Coty" or "the Company")
today announced its results for the full fiscal year 2024 and the
fourth quarter, ended June 30, 2024. The Company delivered its
fourth year of results ahead of or in-line with expectations, while
consistently executing across its strategic growth pillars.
In FY24, total net revenues grew 10% on a reported and 11% on a
LFL basis, at the upper end of Coty's FY24 guidance range of +9% to
+11% LFL, and ahead of the global beauty market which grew
approximately 9%. The Company continued to deliver balanced
reported net revenue growth, including growth in both Prestige and
Consumer Beauty, across all regions and in each of its core
categories. In FY24, Coty delivered a healthy reported growth mix
with a low-single-digit percentage volume growth and a low
double-digit percentage contribution from a combination of price,
mix & other. In the second half of FY24, which largely balances
out the elevated comparisons in the fourth quarter, net revenues
grew 4% on a reported basis and 8% on a LFL basis, with reported
results supported by growth across all core categories and regions.
In 4Q24, Coty's net revenues grew 1% on a reported basis and 5% on
a LFL basis, which includes several percentage points of impact
from lapping an elevated comparison base in the prior year as
retailers restocked following supply chain shortages. The Q4
reported sales growth was supported by growth in both prestige and
mass fragrances, prestige cosmetics and mass skin & body care,
partially offset by a 2% FX headwind and a 2% negative impact from
the divestiture of the Lacoste license. These results were at the
upper end of the Company's guidance for Q4 of low-to-mid
single-digits percentage growth on a LFL basis. LFL revenue growth
on company-wide basis and in the Americas region includes a
contribution of 1% and 2%, respectively, from Argentina, which
experienced hyperinflation.
In FY24, Prestige net revenues grew a strong 13% on a reported
and 14% on a LFL basis. In FY24, reported net revenue growth in
Prestige was fueled by growth in fragrances, cosmetics and
skincare. In the second half of FY24, which largely balances out
the elevated prior year comparisons in Q4, Prestige net revenues
grew 4% on a reported basis and 9% on a LFL basis. This second half
Prestige reported growth was fueled by growth across fragrances,
cosmetics and skincare partially offset by a headwind from the
divestiture of the Lacoste license and a 1% headwind from FX. In
4Q24, Prestige net revenues were flattish on a reported basis and
increased 6% on a LFL basis, which included a mid-single-digit
headwind from elevated comparisons tied to retailer restocking in
the prior year. Prestige reported net revenue growth in Q4 was
driven by growth in fragrances and cosmetics and included a 4%
negative impact from the divestiture of the Lacoste license and a
2% negative impact from FX.
In FY24, Consumer Beauty revenues increased 6% on both a
reported basis and LFL basis, with growth in color cosmetics, mass
fragrances and mass skin & body care. In the second half of
FY24, Consumer Beauty net revenues increased 4% on a reported
basis, supported by growth in color cosmetics, mass fragrances and
mass skin & body care, and 5% on a LFL basis. In 4Q24, Consumer
Beauty net revenues increased 2% on a reported basis and 4% on a
LFL basis, driven by very strong double-digit growth in mass
fragrance and mass skincare.
All regions generated high-single-digit to double-digit
percentage reported net revenue growth in FY24. Americas net
revenues rose 10% as reported and 12% LFL in FY24 and 3% as
reported and 8% LFL in Q4. Americas reported net revenue growth in
each of these periods was driven by strong high-single-digit to
double-digit percentage growth in Latin America, Canada and the
Travel Retail channel. EMEA's net revenues increased 11% as
reported and LFL in FY24 and 1% as reported and 5% LFL in Q4.
Reported net revenue growth in EMEA in both periods was supported
by growth across many European markets, African markets and the
Travel Retail channel. Asia Pacific net revenues grew 9% as
reported and 11% LFL in FY24, while in 4Q, net revenues declined 4%
as reported and 2% LFL. Asia Pacific reported net revenue growth in
FY24 was supported by double-digit percentage growth in Asia
excluding China and the regional Travel Retail channel.
In FY24, reported and adjusted gross margin was 64.4%, with each
up 50 basis points year-over-year. 4Q24 reported gross margin of
64.2% increased 130 basis points, while adjusted gross margin of
64.2% increased by 140 basis points year-over-year. Coty's FY24 and
Q4 reported gross margin improvement was fueled by supply chain
savings and the benefit from pricing actions and premiumization,
more than offsetting inflationary headwinds.
Coty generated reported operating income of $546.7 million in
FY24, up 1% year-over-year, with a reported operating margin of
8.9%. Coty's Q4 reported operating income of $34.7 million, with a
reported operating margin of 2.5%, was down 73% year-over-year,
reflecting the $104 million cash gain recognized in the prior year
in connection with the divestiture of the Lacoste license. Coty's
FY24 adjusted operating income grew 17% to $863.4 million with an
adjusted operating margin of 14.1%, reflecting strong margin
expansion of 80 basis points, supported by the gross margin
expansion and operating leverage on fixed costs. Q4 adjusted
operating income of $108.0 million increased 3% year-over-year
resulting in 10 basis points of adjusted operating margin expansion
to 7.9%.
FY24 reported net income of $76.2 million decreased from $495.0
million in the prior year and reported net income margin was 1.2%,
with the decline in the reported net income driven by over $300
million of gains recognized in the prior year related to the change
in book value of the Wella stake and the divestiture of Lacoste.
FY24 adjusted net income of $323.1 million decreased from $457.9
million in the prior year, and the adjusted net income margin was
5.3%. Q4 reported net loss of $100.2 million decreased from net
income of $29.6 million in the prior year. In 4Q24, reported net
loss margin of negative 7.3% decreased from 2.2% reported net
income margin the prior year. The Q4 adjusted net loss of $23.9
million decreased from $5.2 million. The decline in reported and
adjusted net income in FY24 and Q4 was fully driven by the negative
impact of $103.8 million in FY24 and $87.8 million in Q4 from the
mark-to-market on the equity swap due to the stock price decline in
FY24 and Q4.
FY24 adjusted EBITDA grew 12% to $1,091.1 million, exceeding the
Company's adjusted EBITDA guidance of $1,080-$1,090 million. This
drove a full fiscal year adjusted EBITDA margin of 17.8%, up 30
basis points year-over-year, at the high end of Coty's guidance
range.
In FY24, cash flow from operating activities was $614.6 million
and free cash flow was $369.4 million. In Q4, cash flow from
operating activities was $176.5 million and free cash flow was
$116.7 million. Total debt at the end of the fourth quarter totaled
$3,913.7 million, while financial net debt totaled $3,612.9
million. This drove the total debt to net income ratio to 35.8x and
the financial leverage ratio (net debt to adjusted EBITDA) to 3.3x.
Coty’s retained 25.8% Wella stake was valued at $1,085.0 million at
quarter-end, supporting economic net debt of $2,527.9 million.
Updates on Strategic
Pillars
- The prestige fragrance market continued to grow approximately
10% in FY24 and in the recent quarter, remaining one of the fastest
growing beauty categories across many markets, including the U.S.
and China. In this favorable backdrop, Coty's prestige fragrance
revenues outperformed and grew by a mid teens percentage in FY24,
fueled by the growth of existing icons and new innovations. In
FY24, reported net revenue for all of Coty's largest prestige
fragrance brands grew by a mid-single-digit to double-digit
percentage. Burberry Goddess, Coty's biggest launch ever, continues
to be a global success and is the number one female fragrance
innovation in FY24 in the U.S. Canada and Germany, which coupled
with strong growth in other Burberry franchises, drove over 50%
expansion in Burberry's total reported net revenues in FY24. Marc
Jacobs Daisy Wild and Cosmic Kylie Jenner remain top ranked female
innovations in the U.S. calendar year-to-date, reinforcing Coty's
position as a fragrance leader and trend-setter. Coty's prestige
cosmetics reported net revenues grew by a double-digit percentage
in FY24, led by Kylie Cosmetics and Burberry. As Coty has continued
to open new Kylie Cosmetics locations around the world, the brand
is resonating globally, including in India, Singapore, Middle East
and South Africa.
- Coty's Consumer Beauty growth of 6% on a reported and LFL basis
in FY24 was broadly inline with the mid-to-high single digit growth
in the global mass cosmetics and mass beauty categories. In FY24
and Q4 on a LFL basis, Consumer Beauty grew across each of its core
categories including cosmetics, mass fragrances, skincare and body
care led by Brazil, with particular outperformance in mass
fragrances which grew by a strong double-digit percentage on a
reported basis. Consumer Beauty e-commerce sales grew approximately
30% in FY24, fueling a significant proportion of the division's
growth and further elevating the importance of channels not
currently tracked by scanner data. As a result of solid execution
in the Consumer Beauty business in FY24, the EBITDA margin for the
segment expanded 50 basis points year-over-year to 11.1%. Coty
continues to focus on its social media advocacy strategy as it
propels viral Consumer Beauty innovations including CoverGirl
Simply Ageless Skin Perfector Essence and Rimmel Thrill Seeker
Extreme mascara, resulting in Rimmel gaining market share globally
for the last 6 months and CoverGirl outperforming the U.S.
omnichannel market in the past quarter.
- Coty’s skincare business, which contributed a mid-single-digit
percentage of sales, generated strong sales growth in FY24. In
FY24, Lancaster delivered double-digit percentage revenue growth,
with improving momentum in Europe and more than doubling its
sell-out in China, supported by its unique positioning as the
photo-aging prevention and repair expert. In FY24, Philosophy
returned to growth, with strong momentum in its core skincare
franchises and a surge in its social media advocacy rankings.
Orveda, with breakthrough innovation like the heavily awarded
Omnipotent Serum, continued to drive strong productivity growth in
its existing doors and DTC, paving the way for additional
distribution targeted for FY25.
- Coty e-commerce channel reported net revenues grew by over 20%
in FY24 and by a double-digit percentage in Q4. As a result, FY24
e-commerce penetration increased approximately 170 basis points
year-over-year to nearly 20%. In Prestige, double-digit percentage
e-commerce channel growth in FY24 was driven by Coty's recent
innovations, strong social media activations and collaboration with
e-retail partners. In Consumer Beauty, e-commerce reported net
revenue growth of over 30% in both FY24 and Q4 was supported by
successful activations and growth in nearly all regions led by the
U.S., LATAM and Europe. Coty gained e-commerce market share in both
segments.
- The Company maintained momentum in growth engine markets and
high growth channels. Coty's global Travel Retail, which accounts
for 9% of the Company's sales, generated robust trends in all three
regions, fueling reported net revenue growth of roughly 20% in
FY24. Coty's momentum in growth engine markets, which account for
approximately 22% of total sales, continued to be robust with
nearly 20% reported growth in FY24 led by strength in Brazil, the
rest of LATAM, Southeast Asia, including India, and Africa. LFL
growth in FY24 in Coty's growth engine markets includes a 4%
contribution from Argentina, which experienced hyperinflation.
- Coty continued to make progress on its sustainability pillar
during Q4, including accelerating supplier engagement in
sustainability and improving the Company's Sustainalytics ESG
rating.
Commenting on the operating results, Sue Nabi, Coty's CEO,
said:
"Our FY24 results set a new milestone in Coty's sustained track
record of top-notch execution and market outperformance. In a
dynamic macroeconomic backdrop, beauty maintains its privileged
position, being neither a consumer goods industry nor a luxury
goods industry. Instead, beauty is at the sweet-spot of desire,
well-being, self-confidence, affordability, ritual, indulgence, and
many new things that we and our consumers will invent. This is what
fuels the strong global beauty growth that we continue to see to
this day and which we expect to continue for the quarters and years
to come.
At Coty, having transformed our organization and strategic path
several years ago, we are now performing as a beauty leader and
more and more as a beauty trendsetter, which we believe is an
opening for a new era for Coty as a beauty powerhouse. Importantly,
a key element of this outperformance has been our unwavering strong
investment into our marketing, regardless of the macroeconomic
volatility, because we believe that this is what will create value
for our brands for the long term.
In a year filled with many milestones for Coty, it's worth
highlighting 4 key achievements of FY24.
First, we once again grew ahead of the underlying beauty market
with 11% LFL growth compared to the beauty market growth of
approximately 9%, fueled by our leadership in fragrances,
strengthened performance in our core cosmetics business, and
over-driving our growth channels, markets, and categories. In fact,
in 8 out of the last 12 quarters, we have delivered LFL growth
which is ahead of the leading global beauty companies. Coty’s
consistent outperformance confirms that our top-notch growth is a
result of our strategic vision, strong execution and our ability to
not only seize but create big and fundamental beauty trends that
are here to stay.
Second, we are building unique and hopefully best-in-class
expertise in each of our core categories. For example, our
unrivaled expertise in fragrances was exemplified by the
blockbuster launch of Burberry Goddess, which was not only the
biggest fragrance launch in Coty’s history, but also the #1 female
fragrance launch for the industry. Goddess is a perfect example of
Coty spearheading an industry trend, in this case an
exclusive-quality vanilla-based fragrance, which has now rippled
into many more vanilla-based fragrance launches first across Coty,
including recent mega hits like the ambery-vanilla Cosmic Kylie
Jenner, and then also across the broader industry.
Third, we are becoming an advocacy-led company, reaching our
consumers through the platforms where they discover newness and
build connections with brands. With the earned media value for both
Rimmel and CoverGirl over 400% higher than a year ago and closing
the gap with leading peers, we are seeing the strong results from
this transformation. The next step is co-creating the trends that
will shape the global beauty industry in the coming quarters and
years.
And fourth, we have once again delivered double digit growth in
our LFL sales and adjusted EPS, excluding the swap impact. This
marks the third consecutive year of double digit growth in both
metrics. Our margins continued to expand supported by
premiumization and the strengthening of our business. We reached
our mid 60s gross margin percentage target a year ahead of plan,
and our FY24 adjusted EBITDA margin expansion of 30 basis points
was at the top end of our guidance range. After raising our FY24
guidance 3 times over the past year, we have ended FY24 with
results sightly above our raised outlook, reaffirming the
steadiness of Coty's execution. The power of our financial
algorithm has been on full display in recent years and reflected in
our outlook, anchored on 6-8% LFL revenue growth, 9-11% adjusted
EBITDA growth, and close to 20% adjusted EPS growth. And, this is
building on the exceptional delivery in FY24 of 11% LFL revenue
growth, 12% adjusted EBITDA growth, and 26% adjusted EPS growth
excluding the equity swap.
Looking to FY25, we expect our financial results to be
consistent with our medium-term algorithm, with our FY25 outlook
further reinforced by our white space opportunities, our robust
commercial plans, and the strength of our innovation pipeline,
including Burberry Goddess Intense, Chloe Signature Intense, Gucci
Flora Gorgeous Orchid, Lancaster Golden Lift, CoverGirl Eye
Enhancer 3D Mascara and adidas Vibes, the first mass fragrance line
designed and scientifically proven to enhance one's mood.
In sum, we are confident in delivering another year of growth in
line with our medium-term targets, steady margin expansion, cash
flow improvement and deleveraging progress. As we strengthen our
position as a global beauty powerhouse, acting with the agility of
smaller brands but also creating the beauty trends of today and
tomorrow, Coty remains one of, if not the most compelling
investment opportunities in our industry."
*Adjusted financial metrics used in this
release are non-GAAP. See reconciliations of GAAP results to
Adjusted results in the accompanying tables.
** E-commerce penetration and contribution
based on countries where e-com info is available covering approx.
86% of total Coty. Sources: Circana (Prestige) and Nielsen (CB) May
2024. Additionally, the data includes estimated data for Brick and
Click sales, which is subject to change.
RESULTS AT A GLANCE
Three Months Ended June 30,
2024
Year Ended June 30,
2024
(in millions, except per share data)
Change YoY
Change YoY
CONTINUING OPERATIONS
Reported Basis
(LFL)(a)
Reported Basis
(LFL)(a)
Net revenues
$
1,363.4
1%
5%
$
6,118.0
10%
11%
Operating income - reported
34.7
(73%)
546.7
1%
Net income (loss) attributable to common
shareholders - reported**
(100.2)
<(100%)
76.2
(85%)
Operating income - adjusted*
108.0
3%
863.4
17%
Net income (loss) attributable to common
shareholders - adjusted* **
(23.9)
<(100%)
323.1
(29)%
EBITDA - adjusted
164.5
(1%)
1091.1
12%
EPS attributable to common shareholders
(diluted) - reported
$
(0.12)
<(100%)
$
0.09
(84)%
EPS attributable to common shareholders
(diluted) - adjusted*
$
(0.03)
<(100%)
$
0.37
(30%)
(a) LFL results for the three months ended
and year ended June 30, 2024 include 1% help from Argentina
resulting from significant price increases due to
hyperinflation.
* These measures, as well as “free cash
flow,” “adjusted earnings before interest, taxes, depreciation and
amortization (adjusted EBITDA),” “financial net debt,” and
"economic net debt" are Non-GAAP Financial Measures. Refer to
“Non-GAAP Financial Measures” for discussion of these measures.
Reconciliations from reported to adjusted results can be found at
the end of this release.
** Net income for Coty Inc. is net of the
Convertible Series B Preferred Stock dividends.
Outlook
Entering FY25, the global beauty market maintains its solid
growth, with particular strength in prestige fragrances. Coty is
continuing to benefit from these positive trends, with growth
across its core categories, a strong innovation pipeline, and
sustained progress in key white spaces. The Company anticipates
beauty demand in mature markets to expand in the mid-single-digits,
including prestige fragrance growth above this range and mass
beauty growth below this range, all supported by strong e-commerce
momentum, with Coty performing in-line to ahead of the market. At
the same time, Coty targets double-digit percentage revenue growth
in its growth engine markets and in the high growth travel retail
channel, which together account for over 30% of the Company's
business. This will be reinforced by the strength of Coty's FY25
innovation pipeline, including Burberry Goddess Intense, Chloe
Signature Intense, Gucci Flora Gorgeous Orchid, Lancaster Golden
Lift, CoverGirl Eye Enhancer 3D Mascara and adidas Vibes, the first
mass fragrance line designed and scientifically proven to enhance
one's mood.
These factors are fueling the Company's expectations for the
core business to grow in-line with Coty's medium-term target range
of 6-8% LFL both in FY25 and in 1H25, with LFL growth in Q1 of
approximately 6% due to elevated launch-related comparisons in Q1
of last year when LFL revenues grew 18%. This outlook for Q1 and
1H25 reflects sequential growth acceleration from Q4 levels,
consistent with the Company's prior guidance, and reflects a
consistent CAGR versus FY22, consistent with the CAGR trends in 3Q
and 4Q24. Reported FY25 revenues are expected to include a
low-single-digit percentage headwind from FX, and a 1% scope
headwind in 1H25 from the divestiture of the Lacoste license.
Coty is targeting FY25 adjusted EBITDA growth of 9-11% to
$1,186-1,208 million, ahead of expectations, despite the expected
FX headwinds and the profit headwind from the divestiture of the
Lacoste license. This implies adjusted EBITDA margin expansion of
10-30 basis points. Within this outlook, Coty expects continued
FY25 gross margin expansion year-on-year. Coty targets total FY25
adjusted EPS, excluding equity swap, of $0.54-0.57, implying strong
+15-20% growth YoY and a 19-22% CAGR on a 2-year basis, which
removes the comparison impact of the 2 cent of net discrete tax
benefit in FY24.
Finally, Coty expects FY25 free cash flow to grow by a
double-digit percentage YoY to the low to mid $400M range. While in
the near-term, the close management of cash and inventory by
retailers is contributing to some fluctuation in Coty's estimated
cash flow in 1H25, the Company expects to end CY24 with leverage
close to 2.5x. The Company continues to target further reduction in
leverage toward ~2x exiting CY25, as part of its goal to reach an
investment grade profile.
Financial Results
Refer to “Non-GAAP Financial Measures” for discussion of the
non-GAAP financial measures used in this release; reconciliations
from reported to adjusted results can be found at the end of this
release.
Revenues:
- FY24 reported net revenues of $6,118.0 million increased 10%
year-over-year driven by a strong 13% increase in Prestige reported
net revenues and a solid 6% increase in Consumer Beauty reported
net revenue. On a LFL basis, net revenues grew 11% driven by a 14%
LFL increase in Prestige and a 6% LFL increase in Consumer
Beauty.
- 4Q24 reported net revenues of $1,363.4 million increased 1%
year-over-year driven by a 2% increase in Consumer Beauty reported
net revenues and flattish Prestige reported net revenues. Reported
net revenues in Q4 include a 2% headwind from FX and a 2% headwind
from the divestiture of the Lacoste license. On a LFL basis, net
revenues increased 5% driven by a 6% LFL increase in Prestige and a
4% LFL increase in Consumer Beauty.
Gross Margin:
- FY24 reported and adjusted gross margin of 64.4% increased 50
basis points year-over-year from 63.9%. The rise in reported gross
margin was fueled by supply chain savings and the benefit from
pricing actions and premiumization, more than offsetting
inflationary headwinds.
- 4Q24 reported gross margin of 64.2% increased 130 basis points
year-over year from 62.9%. The strong improvement in reported gross
margin was fueled by supply chain savings and the benefit from
pricing actions and premiumization. 4Q24 adjusted gross margin of
64.2% increased by 140 basis points from 62.8% in the prior
year.
Reported Profit:
- FY24 reported operating income of $546.7 million increased 1%
and FY24 reported operating margin was 8.9%.
- 4Q24 reported operating income of $34.7 million decreased from
$129.0 million the prior year driven by a $104 million cash gain
recognized in the prior year related to the divestiture of the
Lacoste license. 4Q24 reported operating margin was 2.5% down from
9.5% in the prior year.
- FY24 reported net income of $76.2 million decreased from $495.0
million in the prior year resulting in a reported net income margin
of 1.2%, down from 8.9% in the prior year. This margin decline was
driven by a higher fair value adjustment in the prior year period
to Coty's investment in Wella and a $233 million reversal in the
benefit from the mark-to market on the equity swap, partially
offset by a net tax benefit impact of $14 million related to two
discrete tax positions in FY24.
- 4Q24 reported net loss of $100.2 million decreased from net
income of $29.6 million in the prior year as operating profit
expansion and a $38 million discrete tax benefit were more than
offset by an $88 million negative impact from the mark-to market on
the equity swap compared with a benefit from the mark-to-market on
the equity swap in the prior year. 4Q24 reported net loss margin of
7.3% decreased from 2.2% reported net income margin in the prior
year.
- FY24 reported EPS of $0.09 decreased from $0.57 in the prior
year driven by a higher fair value adjustment for Coty's investment
in Wella recorded in the prior year period and a $0.26 reversal in
the benefit from the mark-to-market on the equity swap.
- 4Q24 reported EPS of $(0.12) decreased from $0.03, as profit
expansion was more than offset by a $0.10 impact in the current
year from the mark-to market on the equity swap.
Adjusted Profit:
- FY24 adjusted operating income of $863.4 million increased 17%
from $738.8 million in the prior year. FY24 adjusted operating
margin was 14.1%, reflecting strong margin expansion of 80 basis
points year-over-year. The improvement in adjusted operating margin
was driven by the strong expansion in FY24 gross margin coupled
with operating leverage on fixed costs.
- 4Q24 adjusted operating income of $108.0 million increased 3%
from $105.1 million in the prior year. 4Q24 adjusted operating
margin was 7.9% up from 7.8% in the prior year. The moderate
improvement in adjusted operating margin was driven by the strong
gross margin expansion partially offset by higher A&CP and
fixed costs as the Company reinvested in its strategic growth
capabilities.
- FY24 adjusted EBITDA of $1,091.1 million grew 12%, exceeding
the Company's guidance, from $972.8 million in the prior year,
while adjusted EBITDA margin of 17.8% increased by 30 basis points
year-over-year supported by higher adjusted operating income and
gross margin expansion.
- 4Q24 adjusted EBITDA of $164.5 million declined 1% from $165.4
million in the prior year driven by lower adjusted depreciation.
Adjusted EBITDA margin of 12.1% decreased by 10 basis points.
- FY24 adjusted net income of $323.1 million decreased from
$457.9 million in the prior year driven by a $103.8 million
headwind from the mark-to-market on the equity swap in the current
year compared with a $128.9 million benefit in the prior year,
which resulted in an adjusted net income margin of 5.3%, down from
8.2% in the prior year.
- 4Q24 adjusted net loss of $23.9 million decreased from adjusted
net income of $5.2 million in the prior year as profit expansion
was more than offset by an $88 million negative impact from the
mark-to market on the equity swap. 4Q24 adjusted net loss margin of
negative 1.8% decreased from 0.4% in the prior year.
- FY24 adjusted EPS of $0.37 included a non-operating negative
impact to EPS of $0.11 from the mark-to-market on the equity swap.
This compared to a FY23 adjusted EPS of $0.53, which included a
non-operating positive benefit of $0.15 from the mark-to-market on
the equity swap in the prior year.
- 4Q24 adjusted EPS of $(0.03) decreased from adjusted EPS of
$0.01 in the prior year. 4Q24 adjusted EPS included a negative
impact from the equity swap mark-to-market of $0.10 due to the
stock price decline in the quarter, compared with a neutral impact
from the mark-to-market on the equity swap in the prior year.
Operating Cash Flow:
- FY24 cash flow from operating activities of $614.6 million was
moderately lower than the prior year operating cash flows of $625.7
million, despite an approximately $90 million increase in tax
payments related to the payment of taxes for prior years.
- FY24 free cash flow totaled $369.4 million, a decrease of $33.5
million year-over-year, reflecting the impact of higher
year-over-year capex primarily related to the SAP S/4HANA
transition executed successfully at the end of FY24.
- 4Q24 cash from operations of $176.5 million increased from
$104.9 million in the prior year driven by a change in phasing of
working capital especially on trade payables, partially offset by
an increase of tax payments related to the payment of taxes for
prior years.
- 4Q24 free cash flow of $116.7 million increased from free cash
flow of $38.1 million in the prior year driven by the $71.6 million
increase in operating cash flow, and a decrease of $7.0 million in
capex.
Financial Net Debt:
- Total debt of $3,913.7 million on June 30, 2024 decreased from
$3,972.3 million on March 31, 2024. This resulted in a total debt
to net income ratio of 35.8x.
- Financial net debt of $3,612.9 million on June 30, 2024
decreased from $3,712.1 million on March 31, 2024. This resulted in
financial leverage of 3.3x, down from 3.4x at the end of the prior
quarter.
- The value of Coty's retained 25.8% Wella stake increased by $5
million to $1,085.0 million at quarter-end, supporting Coty's
economic net debt of $2,527.9 million.
Business Review by
Segment
Prestige
In FY24, Prestige net revenues of $3,857.3 million or 63% of
Coty sales, grew a strong 13% on a reported basis driven
outperformance in EMEA, Latin America, Asia excluding China and the
Travel Retail channel. FY24 Prestige net revenues grew a robust 14%
on a LFL basis. In 4Q24, Prestige net revenues of $802.8 million
were flattish on a reported basis and increased 6% on a LFL basis,
which included a mid-single-digit headwind from elevated
comparisons in the prior year tied to retailer restocking. Growth
in the quarter on a reported basis was impacted by a 4% negative
headwind from the divestiture of the Lacoste license and a 2%
headwind from FX. This impact was more than offset by continued
momentum in prestige beauty demand, which led to growth in most
regions with outperformance in Latin America, Asia excluding China
and the Travel Retail channel.
Coty's Prestige fragrance reported net revenues grew by a
double-digit percentage in FY24. In FY24, the majority of Coty's
leading Prestige fragrance brands grew reported net revenues by a
high-single-digit to a double-digit percentage driven by continued
global demand for beauty and fueled by existing icons and new
innovations. During Q4, the Prestige fragrance category growth
remained strong across North America and Europe, with all major
markets expanding led by the U.S., Canada, the U.K., Spain and
Italy. The Global Travel Retail channel trends continued to be
strong as reported net revenues grew by a double-digit percentage
in Q4 with contributions from each region. Reported net revenues
for Coty’s Prestige cosmetics business grew by a double-digit
percentage in FY24 and a mid-single-digit percentage in Q4 led by
Burberry and Kylie Cosmetics.
FY24 reported operating income was $580.7 million, compared to
$483.7 million in the prior year, with a reported operating margin
of 15.1%, which increased 100 basis points year-over-year. The FY24
adjusted operating income increased to $734.4 million from $635.1
million in the prior year, with an adjusted operating margin of
19.0%, up 40 basis points year-over-year. FY24 adjusted EBITDA
increased to $839.6 million from $745.6 million in the prior year,
with a margin of 21.8%. In 4Q24, the Prestige segment generated
reported operating income of $49.7 million, compared to $46.4
million in the prior year, with a reported operating margin of
6.2%. 4Q24 adjusted operating income was $87.8 million, up from
$85.1 million in the prior year, with an adjusted operating margin
of 10.9%. Q4 adjusted EBITDA rose to $112.8 million, with a margin
of 14.1%.
Consumer Beauty
In FY24, Consumer Beauty sales of $2,260.7 million, or 37% of
Coty's net sales, grew by 6% on a reported basis and LFL basis.
FY24 reported net revenues grew in all key categories and by a
high-single-digit percentage in EMEA and Americas. In 4Q24,
Consumer Beauty net revenues of $560.6 million grew 2% as reported,
which includes a 2% negative impact from FX, and grew 4% LFL.
Consumer Beauty reported growth in Q4 was supported by double-digit
percentage growth in mass fragrances and skin & body care,
particularly in Brazil. Consumer Beauty's EMEA region delivered
solid reported net revenue growth in the quarter, coupled with
strong growth across Latin America, Canada and Asia excluding
China.
In FY24 and Q4 on a reported basis, Coty saw strong momentum in
most of its key brands, with high-single-digit to double-digit
percentage growth across Beckham, Risque, Bruno Banani, Nautica,
Bozzano and Paixao.
FY24 reported operating income was $89.3 million, compared to
$63.3 million in the prior year, with reported operating margin of
4.0%, which increased by 100 basis points year-over-year. FY24
adjusted operating income increased to $129.0 million from $103.7
million in the prior year, with an adjusted operating margin of
5.7%, which increased 80 basis points year-over-year. FY24 adjusted
EBITDA increased to $251.5 million from $227.2 million in the prior
year, with a margin of 11.1%, up 50 basis points from 10.6% in the
prior year. In 4Q24, the Consumer Beauty segment generated reported
operating income of $10.3 million compared with $10.0 million in
the prior year, with a reported operating margin of 1.8%, flat
year-over-year. 4Q24 adjusted operating income of $20.2 million
improved slightly from $20.0 million in the prior year, with an
adjusted operating margin of 3.6%, which was flat year-over-year.
4Q24 adjusted EBITDA declined slightly to $51.7 million from $52.7
million, driving adjusted EBITDA margin to decline 30 basis points
year-over-year to 9.2%.
Business Review by
Region
Americas
- In FY24, Americas net revenue of $2,567.9 million, or 42% of
Coty sales, rose 10% on a reported basis and 12% on a LFL basis,
including a 2% contribution from Argentina, which experienced
hyperinflation. In Q4, revenues in the region grew 3% as reported,
which included a 4% FX headwind and a 1% headwind from the
divestiture of the Lacoste license, and 8% LFL. The regional
performance in both periods was supported by growth in nearly all
markets with outsized reported net revenue growth in Latin America,
Canada and the regional Travel Retail channel.
EMEA
- In FY24, EMEA net revenue of $2,784.0 million, or 45% of Coty
sales, rose 11% on a reported and LFL basis. In Q4, net revenues
increased 1% as reported, which included a 1% FX headwind and a 4%
headwind from the divestiture of the Lacoste license, and grew 5%
LFL. The regional performance across both periods was supported by
most markets and the Travel Retail channel.
Asia Pacific
- In FY24, Asia Pacific net revenue of $766.1 million, or 13% of
Coty sales, increased 9% as reported and 11% LFL. Asia Pacific net
revenues in Q4 declined 4% on a reported basis, which included a 2%
headwind from FX, and declined 2% LFL. On a reported basis in both
periods, Asia excluding China and the Travel Retail Channel grew by
a mid-single-digit to double-digit percentage. In China in Q4,
total Company sales were lower due to high prior year comparisons
and a very gradual market recovery there.
Noteworthy Company
Developments
Other noteworthy company developments include:
- On May 7, 2024, Coty announced that it has signed a new
long-term license agreement with German Television Presenter and
Model, Lena Gercke to develop, produce, and distribute LeGer’s
debut fragrance.
- On May 22, 2024, Coty announced the offering and pricing of
€500 million of 4.500% senior secured notes due 2027. Coty intends
to use the net proceeds from the offering of the Notes to redeem
all of its existing 6.500% Senior Notes due 2026, repay a portion
of the borrowings outstanding under its revolving credit facility,
without a reduction in commitment, and pay the offering expenses
payable by it in connection with the offering of the Notes.
Conference Call
Coty Inc. will issue pre-recorded remarks on August 20, 2024 at
approximately 4:45 PM (ET) / 10:45 PM (CET) and will hold a live
question and answer session on August 21, 2024 beginning at 8:15 AM
(ET) / 2:15 PM (CET). The pre-recorded remarks and live question
and answer session will be available at http://investors.coty.com.
The dial-in number for the live question and answer session is
1-800-225-9448 in the U.S. or 1-203-518-9708 internationally
(conference passcode number: COTY4Q24).
About Coty Inc.
Founded in Paris in 1904, Coty is one of the world’s largest
beauty companies with a portfolio of iconic brands across
fragrance, color cosmetics, and skin and body care. Coty serves
consumers around the world, selling prestige and mass market
products in over 120 countries and territories. Coty and our brands
empower people to express themselves freely, creating their own
visions of beauty; and we are committed to protecting the planet.
Learn more at coty.com or on LinkedIn and Instagram.
Forward Looking
Statements
Certain statements in this Earnings 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,
strategic planning, targets 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 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, expectations of the impact of
inflationary pressures and the timing, magnitude and impact of
pricing actions to offset inflationary costs, strategic
transactions (including their expected timing and impact),
expectations and/or plans with respect to joint ventures (including
Wella Company and the timing and size of any related divestiture,
distribution or return of capital), the Company’s capital
allocation strategy and payment of dividends (including suspension
of dividend payments and the duration thereof and any plans to
resume cash dividends on common stock or to continue to pay
dividends in cash on preferred stock) and expectations for stock
repurchases, investments, licenses and portfolio changes, product
launches, relaunches or rebranding (including the expected timing
or impact thereof), synergies, savings, performance, cost, timing
and integration of acquisitions, future cash flows, liquidity and
borrowing capacity (including any refinancing or deleveraging
activities), timing and size of cash outflows and debt
deleveraging, the timing and extent of any future impairments, and
synergies, savings, impact, cost, timing and implementation of the
Company’s ongoing strategic transformation agenda (including
operational and organizational structure changes, operational
execution and simplification initiatives, fixed cost reductions,
continued process improvements and supply chain changes), the
expected impact, cost, timing and implementation of e-commerce and
digital initiatives, expected impact, cost, timing and
implementation of sustainability initiatives (including progress,
plans and goals), the wind down of the Company’s operations in
Russia (including timing and expected impact), the expected impact
of geopolitical risks (including the ongoing war in Ukraine and/or
armed conflict in the Middle East including the Red Sea conflict)
on our business operations, sales outlook and strategy, the
expected impact of global supply chain challenges and/or
inflationary pressures (including as a result of COVID-19 and/or
the war in Ukraine), and expectations regarding future service
levels and inventory levels, the impact of the dual-listing of the
Company's Class A Common Stock on Euronext Paris, 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 Company’s ability to successfully implement its multi-year
strategic transformation agenda and 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 stabilizing its consumer beauty
brands through leading innovation and improved execution,
accelerating its prestige fragrance brands and ongoing expansion
into prestige cosmetics, building a comprehensive skincare
portfolio, enhancing its e-commerce and direct-to-consumer (“DTC”)
capabilities, expanding its presence in China through prestige
products and select consumer beauty brands, and establishing Coty
as an industry leader in sustainability) 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 the Company's skincare and prestige cosmetics
portfolios, 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), and our ability to effectively manage
our production and inventory levels in response to demand;
- 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, and the fair value of equity
investment;
- 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 transformation agenda, the Company's global business
strategies, the integration and management of its strategic
partnerships, 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, manage supply chain
challenges 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 or similar public health
events 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), and public goodwill, and
defend claims by third parties for infringement of intellectual
property rights;
- any change to the Company’s capital allocation and/or cash
management priorities, including any change in the Company’s
dividend policy and any change in the Company's stock repurchase
plans;
- 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, 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) and management of the
partnerships, the Company's relationships with Kylie Jenner and Kim
Kardashian, the Company's ability to protect trademarks and brand
names, litigation, investigations by governmental authorities, and
changes in law, regulations and policies that affect King Kylie LLC
("King Kylie") and/or 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 King Kylie and/or KKW
Holdings’ business model, revenue, sales force or business;
- 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
and re-launches and marketing efforts, including in connection with
new products in the Company's skincare and prestige cosmetics
portfolios;
- changes in the demand for the Company's products due to
declining or depressed global or regional economic conditions, and
declines in consumer confidence or spending, whether related to the
economy (such as austerity measures, tax increases, high fuel
costs, or higher unemployment), wars and other hostilities and
armed conflicts, natural or other disasters, weather, pandemics,
security concerns, terrorist attacks or other factors;
- 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 the war in Ukraine
and any related escalation or expansion thereof, armed conflict in
the Middle East, the current U.S. administration and future
elections, changes in the U.S. tax code and/or regulations in other
jurisdictions where we operate (including recent and pending
implementation of the global minimum corporate tax (part of the
"Pillar Two Model Rules") that may impact our tax liability in the
European Union, 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, potential
regulatory limits on payment terms in the European Union, recent
and future changes in sanctions regulations, regulatory uncertainty
impacting the wind-down of the Company's business in Russia, and
recent and future changes in regulations impacting the beauty
industry, including regulatory measures addressing products,
formulations, raw materials and packaging, and recent and future
regulatory measures restricting or otherwise impacting the use of
web sites, mobile applications or social media platforms that the
Company uses in connection with its digital marketing and
e-commerce activities;
- currency exchange rate volatility and currency devaluation
and/or inflation;
- the Company's ability to implement and maintain pricing actions
to effectively mitigate increased costs and inflationary pressures,
and the reaction of customers or consumers to such pricing
actions;
- 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 product liability cases (including asbestos and
talc-related litigation for which indemnities and/or insurance may
not be available), distributor or licensor litigation, and
compliance, litigation or investigations relating to our joint
ventures and strategic partnerships;
- 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, manufacturing or information
technology systems, labor disputes, extreme weather and natural
disasters, impact from global public health events, the outbreak of
war or hostilities (including the war in Ukraine and armed conflict
in the Middle East, including the Red Sea conflict, and any
escalation or expansion thereof), impact of global supply chain
challenges or other disruptions in the international flow of goods,
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;
- disruptions in the availability and distribution of raw
materials and components needed to manufacture the Company's
products, and its ability to effectively manage its production and
inventory levels in response to supply challenges;
- the Company's ability to adapt its business to address climate
change concerns, including through the implementation of new or
unproven technologies or processes, and to respond to increasing
governmental and regulatory measures relating to environmental,
social and governance matters, including expanding mandatory and
voluntary reporting, diligence and disclosure, as well as new taxes
(including on energy and plastic), new diligence requirements and
the impact of such measures or processes on the Company's costs,
business operations and strategy;
- 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 practices, and the Company’s ability, or
the ability of any of the third-party service providers used by the
Company to support its business, 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
similar state laws, the Brazil General Data Protection Law and the
China Data Security Law and Personal Information 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;
- the distribution and sale by third parties of counterfeit
and/or gray market versions of the Company’s products;
- the impact of the Company's ongoing strategic transformation
agenda and continued process improvements on the Company’s
relationships with key customers and suppliers and certain material
contracts;
- the Company’s relationship with JAB Beauty B.V. (formerly known
as 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 affiliate KKR Bidco
is an investor in the Wella Company, 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 March 31, 2023 and annual report on Form
10-K for the year ended June 30, 2024 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.
Comparisons of results for current and any prior periods are not
intended to express any future trends or indications of future
performance unless expressed as such, and should only be viewed as
historical data.
Non-GAAP Financial
Measures
To supplement the financial measures prepared in accordance with
GAAP, we use non-GAAP financial measures for continuing operations
and Coty Inc. including Adjusted operating income (loss), Adjusted
EBITDA, Adjusted net income (loss), and Adjusted net income (loss)
attributable to Coty Inc. to common stockholders (collectively, the
“Adjusted Performance Measures”). The reconciliations of these
non-GAAP financial measures to the most directly comparable
financial measures calculated and presented in accordance with GAAP
are shown in tables below. These non-GAAP financial measures should
not be considered in isolation from, or as a substitute for or
superior to, financial measures reported in accordance with GAAP.
Moreover, these non-GAAP financial measures have limitations in
that they do not reflect all the items associated with the
operations of the business as determined in accordance with GAAP.
Other companies, including companies in the beauty industry, may
calculate similarly titled non-GAAP financial measures differently
than we do, limiting the usefulness of those measures for
comparative purposes.
Despite the limitations of these non-GAAP financial measures,
our management uses the Adjusted Performance Measures as key
metrics in the evaluation of our performance and annual budgets and
to benchmark performance of our business against our competitors.
The following are examples of how these Adjusted Performance
Measures are utilized by our management:
- strategic plans and annual budgets are prepared using the
Adjusted Performance Measures;
- senior management receives a monthly analysis comparing budget
to actual operating results that is prepared using the Adjusted
Performance Measures; and
- senior management’s annual compensation is calculated, in part,
by using some of the Adjusted Performance Measures.
In addition, our financial covenant compliance calculations
under our debt agreements are substantially derived from these
Adjusted Performance Measures.
Our management believes that Adjusted Performance Measures are
useful to investors in their assessment of our operating
performance and the valuation of the Company. In addition, these
non-GAAP financial measures address questions we routinely receive
from analysts and investors and, in order to ensure that all
investors have access to the same data, our management has
determined that it is appropriate to make this data available to
all investors. The Adjusted Performance Measures exclude the impact
of certain items (as further described below) and provide
supplemental information regarding our operating performance. By
disclosing these non-GAAP financial measures, our management
intends to provide investors with a supplemental comparison of our
operating results and trends for the periods presented. Our
management believes these measures are also useful to investors as
such measures allow investors to evaluate our performance using the
same metrics that our management uses to evaluate past performance
and prospects for future performance. We provide disclosure of the
effects of these non-GAAP financial measures by presenting the
corresponding measure prepared in conformity with GAAP in our
financial statements, and by providing a reconciliation to the
corresponding GAAP measure so that investors may understand the
adjustments made in arriving at the non-GAAP financial measures and
use the information to perform their own analyses.
Adjusted operating income/Adjusted EBITDA from continuing
operations excludes restructuring costs and business structure
realignment programs, amortization, acquisition- and
divestiture-related costs and acquisition accounting impacts,
stock-based compensation, and asset impairment charges and other
adjustments as described below. For adjusted EBITDA, in addition to
the preceding, we exclude adjusted depreciation as defined below.
We do not consider these items to be reflective of our core
operating performance due to the variability of such items from
period-to-period in terms of size, nature and significance. They
are primarily incurred to realign our operating structure and
integrate new acquisitions, and implement divestitures of
components of our business, and fluctuate based on specific facts
and circumstances. Additionally, Adjusted net income attributable
to Coty Inc. and Adjusted net income attributable to Coty Inc. per
common share are adjusted for certain interest and other (income)
expense items and preferred stock deemed dividends, as described
below, and the related tax effects of each of the items used to
derive Adjusted net income as such charges are not used by our
management in assessing our operating performance
period-to-period.
Adjusted Performance Measures reflect adjustments based on the
following items:
- Costs related to acquisition and divestiture activities: The
Company has excluded acquisition- and divestiture-related costs and
the accounting impacts such as those related to transaction costs
and costs associated with the revaluation of acquired inventory in
connection with business combinations because these costs are
unique to each transaction. Additionally, for divestitures, the
Company excludes write-offs of assets that are no longer
recoverable and contract related costs due to the divestiture. The
nature and amount of such costs vary significantly based on the
size and timing of the acquisitions and divestitures, and the
maturities of the businesses being acquired or divested. Also, the
size, complexity and/or volume of past transactions, which often
drives the magnitude of such expenses, may not be indicative of the
size, complexity and/or volume of any future acquisitions or
divestitures.
- Restructuring and other business realignment costs: The Company
has excluded costs associated with restructuring and business
structure realignment programs to allow for comparable financial
results to historical operations and forward-looking guidance. In
addition, the nature and amount of such charges vary significantly
based on the size and timing of the programs. By excluding the
referenced expenses from the non-GAAP financial measures,
management is able to further evaluate the Company's ability to
utilize existing assets and estimate their long-term value.
Furthermore, our management believes that the adjustment of these
items supplements the GAAP information with a measure that can be
used to assess the sustainability of our operating
performance.
- Asset impairment charges: The Company has excluded the impact
of asset impairments as such non-cash amounts are inconsistent in
amount and frequency and are significantly impacted by the timing
and/or size of acquisitions. Our management believes that the
adjustment of these items supplements the GAAP information with a
measure that can be used to assess the sustainability of our
operating performance.
- Amortization expense: The Company has excluded the impact of
amortization of finite-lived intangible assets, as such non-cash
amounts are inconsistent in amount and frequency and are
significantly impacted by the timing and/or size of acquisitions.
Our management believes that the adjustment of these items
supplements the GAAP information with a measure that can be used to
assess the sustainability of our operating performance. Although we
exclude amortization of intangible assets from our non-GAAP
expenses, our management believes that it is important for
investors to understand that such intangible assets contribute to
revenue generation. Amortization of intangible assets that relate
to past acquisitions will recur in future periods until such
intangible assets have been fully amortized. Any future
acquisitions may result in the amortization of additional
intangible assets.
- Gain on sale and termination of brand assets: The Company has
excluded the impact of gain on sale and termination of brand assets
as such amounts are inconsistent in amount and frequency and are
significantly impacted by the size of the sale and termination of
brand assets.
- Costs related to market exit: The Company has excluded the
impact of direct incremental costs related to our decision to wind
down our business operations in Russia. We believe that these
direct and incremental costs are inconsistent and infrequent in
nature. Consequently, our management believes that the adjustment
of these items supplements the GAAP information with a measure that
can be used to assess the sustainability of our operating
performance.
- Gains on sale of real estate: The Company has excluded the
impact of gains on sale of real estate as such amounts are
inconsistent in amount and frequency and are significantly impacted
by the size of the sale. Our management believes that the
adjustment of these items supplements the GAAP information with a
measure that can be used to assess the sustainability of our
operating performance.
- Stock-based compensation: Although stock-based compensation is
a key incentive offered to our employees, we have excluded the
effect of these expenses from the calculation of adjusted operating
income and adjusted EBITDA. This is due to their primarily non-cash
nature; in addition, the amount and timing of these expenses may be
highly variable and unpredictable, which may negatively affect
comparability between periods.
- Depreciation and Adjusted depreciation: Our adjusted operating
income excludes the impact of accelerated depreciation for certain
restructuring projects that affect the expected useful lives of
Property, Plant and Equipment, as such charges vary significantly
based on the size and timing of the programs. Further, we have
excluded adjusted depreciation, which represents depreciation
expense net of accelerated depreciation charges, from our adjusted
EBITDA. Our management believes that the adjustment of these items
supplements the GAAP information with a measure that can be used to
assess the sustainability of our operating performance.
- Other (income) expense: The Company has excluded the impact of
pension curtailment (gains) and losses and pension settlements as
such events are triggered by our restructuring and other business
realignment activities and the amount of such charges vary
significantly based on the size and timing of the programs.
Further, we have excluded the change in fair value of the
investment in Wella, as our management believes these unrealized
(gains) and losses do not reflect our underlying ongoing business,
and the adjustment of such impact helps investors and others
compare and analyze performance from period to period. We have
excluded the gain on the exchange of Series B Preferred Stock. Such
transactions do not reflect our operating results and we have
excluded the impact as our management believes that the adjustment
of these items supplements the GAAP information with a measure that
can be used to assess the sustainability of our operating
performance.
- Noncontrolling interest: This adjustment represents the
after-tax impact of the non-GAAP adjustments included in Net income
attributable to noncontrolling interests based on the relevant
noncontrolling interest percentage.
- Tax: This adjustment represents the impact of the tax effect of
the pretax items excluded from Adjusted net income. The tax impact
of the non-GAAP adjustments is based on the tax rates related to
the jurisdiction in which the adjusted items are received or
incurred. Additionally, adjustments are made for the tax impact of
any intra-entity transfer of assets and liabilities.
- Deemed Preferred Stock Dividends: The Company has excluded
preferred stock deemed dividends related to the First Exchange and
the Second Exchange from our calculation of adjusted net income
attributable to Coty Inc. These deemed dividends are nonmonetary in
nature, the transactions were entered into to simplify our capital
structure and do not reflect our underlying ongoing business.
Management believes that this adjustment helps investors and others
compare and analyze our performance from period to period.
The Company has provided a quantitative reconciliation of the
difference between the non-GAAP financial measures and the
financial measures calculated and reported in accordance with GAAP.
For a reconciliation of adjusted gross profit to gross profit,
adjusted EPS (diluted) to EPS (diluted), and adjusted net revenues
to net revenues, see the table entitled “Reconciliation of Reported
to Adjusted Results for the Consolidated Statements of Operations.”
For a reconciliation of adjusted operating income to operating
income and adjusted operating income margin to operating income
margin, see the tables entitled “Reconciliation of Reported
Operating Income (Loss) to Adjusted Operating Income” and
"Reconciliation of Reported Operating Income (Loss) to Adjusted
Operating Income by Segment." For a reconciliation of adjusted
effective tax rate to effective tax rate, see the table entitled
“Reconciliation of Reported Income (Loss) Before Income Taxes and
Effective Tax Rates to Adjusted Income Before Income Taxes and
Adjusted Effective Tax Rates.” For a reconciliation of adjusted net
income and adjusted net income margin to net income (loss), see the
table entitled “Reconciliation of Reported Net Income (Loss) to
Adjusted Net Income.”
The Company also presents free cash flow, adjusted earnings
before interest, taxes, depreciation and amortization ("adjusted
EBITDA"), immediate liquidity, Financial Net Debt and Economic Net
Debt. Management believes that these measures are useful for
investors because it provides them with an important perspective on
the cash available for debt repayment and other strategic measures
and provides them with the same measures that management uses as
the basis for making resource allocation decisions. Free cash flow
is defined as net cash provided by operating activities less
capital expenditures; adjusted EBITDA is defined as adjusted
operating income, excluding adjusted depreciation and non-cash
stock-based compensation. Net debt or Financial Net Debt (which the
Company referred to as "net debt" in prior reporting periods) is
defined as total debt less cash and cash equivalents, and Economic
Net Debt is defined as total debt less cash and cash equivalents
less the value of the Wella Stake. For a reconciliation of Free
Cash Flow, see the table entitled “Reconciliation of Net Cash
Provided by Operating Activities to Free Cash Flow,” for adjusted
EBITDA, see the table entitled “Reconciliation of Adjusted
Operating Income to Adjusted EBITDA” and for Financial Net Debt and
Economic Net Debt, see the tables entitled “Reconciliation of Total
Debt to Financial Net Debt and Economic Net Debt.” Further, our
immediate liquidity is defined as the sum of available cash and
cash equivalents and available borrowings under our Revolving
Credit Facility (please see table "Immediate Liquidity").
We operate on a global basis, with the majority of our net
revenues generated outside of the U.S. Accordingly, fluctuations in
foreign currency exchange rates can affect our results of
operations. Therefore, to supplement financial results presented in
accordance with GAAP, certain financial information is presented in
“constant currency”, excluding the impact of foreign currency
exchange translations to provide a framework for assessing how our
underlying businesses performed excluding the impact of foreign
currency exchange translations. Constant currency information
compares results between periods as if exchange rates had remained
constant period-over-period. We calculate constant currency
information by translating current and prior-period results for
entities reporting in currencies other than U.S. dollars into U.S.
dollars using prior year foreign currency exchange rates. The
constant currency calculations do not adjust for the impact of
revaluing specific transactions denominated in a currency that is
different to the functional currency of that entity when exchange
rates fluctuate, or for the impacts of hyperinflation. The constant
currency information we present may not be comparable to similarly
titled measures reported by other companies.
These non-GAAP measures should not be considered in isolation,
or as a substitute for, or superior to, financial measures
calculated in accordance with GAAP.
To the extent that the Company provides guidance, it does so
only on a non-GAAP basis and does not provide reconciliations of
such forward-looking non-GAAP measures to GAAP due to the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliation, including adjustments that could
be made for restructuring, integration and acquisition-related
expenses, amortization expenses, non-cash stock-based compensation,
adjustments to inventory, and other charges reflected in our
reconciliation of historic numbers, the amount of which, based on
historical experience, could be significant.
- Tables Follow -
COTY INC. SUPPLEMENTAL SCHEDULES
INCLUDING NON-GAAP FINANCIAL MEASURES
FOURTH QUARTER BY SEGMENT (COTY INC)
Three Months Ended June
30,
Net Revenues
Change
Reported Operating Income
(Loss)
Adjusted Operating
Income
(in millions)
2024
2023
Reported Basis
LFL(a)
2024
Change
Margin
2024
Change
Margin
Prestige
$
802.8
$
799.6
0%
6%
$
49.7
7%
6%
$
87.8
3%
11%
Consumer Beauty
560.6
552.0
2%
4%
10.3
3%
2%
20.2
1%
4%
Corporate
—
—
N/A
N/A
(25.3)
<(100%)
N/A
—
N/A
N/A
Total
$
1,363.4
$
1,351.6
1%
5%
$
34.7
(73%)
3%
$
108.0
3%
8%
Year Ended June 30,
Net Revenues
Change
Reported Operating Income
(Loss)
Adjusted Operating
Income
(in millions)
2024
2023
Reported Basis
LFL(a)
2024
Change
Margin
2024
Change
Margin
Prestige
$
3,857.3
$
3,420.5
13%
14%
$
580.7
20%
15%
$
734.4
16%
19%
Consumer Beauty
2,260.7
2,133.6
6%
6%
89.3
41%
4%
129.0
24%
6%
Corporate
—
—
0%
0%
(123.3)
<(100%)
N/A
—
N/A
N/A
Total
$
6,118.0
$
5,554.1
10%
11%
$
546.7
1%
9%
$
863.4
17%
14%
(a) LFL results for the three months ended
and year ended June 30, 2024 include 1% help from Argentina
resulting from significant price increases due to
hyperinflation.
Adjusted EBITDA
Three Months Ended June
30,
Year Ended June
30,
(in millions)
2024
2023
2024
2023
Prestige
$
112.8
$
112.7
$
839.6
$
745.6
Consumer Beauty
51.7
52.7
251.5
227.2
Corporate
—
—
—
—
Total
$
164.5
$
165.4
$
1,091.1
$
972.8
FOURTH QUARTER FISCAL 2024 BY REGION COTY INC.
Three Months Ended June
30,
Year Ended June 30,
Net Revenues
Change
Net Revenues
Change
(in millions)
2024
2023
Reported Basis
LFL(a)
2024
2023
Reported Basis
LFL(a)
Americas
$
583.0
$
567.9
3%
8%
$
2,567.9
$
2,343.7
10%
12%
EMEA
598.1
594.2
1%
5%
2,784.0
2,504.5
11%
11%
Asia Pacific
182.3
189.5
(4)%
(2)%
766.1
705.9
9%
11%
Total
$
1,363.4
$
1,351.6
1%
5%
$
6,118.0
$
5,554.1
10%
11%
(a) Americas LFL results for the three
months ended and year ended June 30, 2024 include 2% help from
Argentina resulting from significant price increases due to
hyperinflation.
COTY INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June
30,
Year Ended June
30,
(in millions, except per share
data)
2024
2023
2024
2023
Net revenues
$
1,363.4
$
1,351.6
$
6,118.0
$
5,554.1
Cost of sales
488.0
502.1
2,178.8
2,006.8
as % of Net revenues
35.8%
37.1%
35.6%
36.1%
Gross profit
875.4
849.5
3,939.2
3,547.3
Gross margin
64.2%
62.9%
64.4%
63.9%
Selling, general and administrative
expenses
791.0
672.9
3,162.4
2,818.3
as % of Net revenues
58.0%
49.8%
51.7%
50.7%
Amortization expense
48.0
48.7
193.4
191.8
Restructuring costs
1.7
(1.1)
36.7
(6.5)
Operating income (loss)
34.7
129.0
546.7
543.7
as % of Net revenues
2.5%
9.5%
8.9%
9.8%
Interest expense, net
61.7
72.2
252.0
257.9
Other expense (income), net
80.4
(22.0)
90.2
(419.0)
Income before income taxes
(107.4)
78.8
204.5
704.8
as % of Net revenues
(7.9%)
5.8%
3.3%
12.7%
Provision for income taxes
(11.8)
43.3
95.1
181.6
Net income
(95.6)
35.5
109.4
523.2
as % of Net revenues
(7.0%)
2.6%
1.8%
9.4%
Net (loss) income attributable to
noncontrolling interests
1.3
(1.4)
5.3
(1.8)
Net income attributable to redeemable
noncontrolling interests
—
4.0
14.7
16.8
Net income (loss) attributable to Coty
Inc.
$
(96.9)
$
32.9
$
89.4
$
508.2
Amounts attributable to Coty
Inc.
Net income
$
(96.9)
$
32.9
$
89.4
$
508.2
Convertible Series B Preferred Stock
dividends
(3.3)
(3.3)
(13.2)
(13.2)
Net income (loss) attributable to
common stockholders
$
(100.2)
$
29.6
$
76.2
$
495.0
Earnings per common share:
Basic for Coty Inc.
$
(0.12)
$
0.03
$
0.09
$
0.58
Diluted for Coty Inc.(a)(b)
$
(0.12)
$
0.03
$
0.09
$
0.57
Weighted-average common shares
outstanding:
Basic
867.9
852.0
874.4
849.0
Diluted(a)(b)
867.9
864.7
883.4
886.5
Depreciation - Coty Inc.
$
56.5
$
60.3
$
227.7
$
235.0
(a)
Diluted EPS is adjusted by the effect of
dilutive securities, including awards under the Company's equity
compensation plans, the convertible Series B Preferred Stock, and
the Forward Repurchase Contracts. When calculating any potential
dilutive effect of stock options, Series A Preferred Stock,
restricted stock, PRSUs and RSUs, the Company uses the treasury
method and the if-converted method for the Convertible Series B
Preferred Stock and the Forward Repurchase Contracts. The treasury
method typically does not adjust the net income attributable to
Coty Inc., while the if-converted method requires an adjustment to
reverse the impact of the preferred stock dividends of $13.2, and
to reverse the impact of fair market value losses/(gains) for
contracts with the option to settle in shares or cash of $73.4 and
$(101.8), respectively, if dilutive, for the twelve months ended
June 30, 2024 and 2023 on net income applicable to common
stockholders during the period. The if-converted method requires an
adjustment to reverse the impact of the preferred stock dividends
of $3.3, and to reverse the impact of fair market value
losses/(gains) for contracts with the option to settle in shares or
cash of $67.0 and $1.1, respectively, if dilutive, for the three
months ended June 30, 2024, 2023 on net income applicable to common
stockholders during the period.
(b)
For the three months ended June 30, 2024
and 2023, outstanding stock options and Series A Preferred Stock
with purchase or conversion rights to purchase 3.6 million and 1.9
million weighted average anti-dilutive shares of Common Stock,
respectively, were excluded from the computation of diluted EPS.
For the twelve months ended June 30, 2024 and 2023, outstanding
stock options and Series A Preferred Stock with purchase or
conversion rights to purchase 2.8 million and 4.8 million weighted
average anti-dilutive shares of Common Stock, respectively, were
excluded from the computation of diluted EPS.
RECONCILIATION OF REPORTED TO ADJUSTED
RESULTS FOR THE CONSOLIDATED STATEMENTS OF OPERATIONS
These supplemental schedules provide adjusted Non-GAAP financial
information and a quantitative reconciliation of the difference
between the Non-GAAP financial measure and the financial measure
calculated and reported in accordance with GAAP.
Three Months Ended June 30,
2024
COTY INC.
(in millions)
Reported (GAAP)
Adjustments(a)
Adjusted (Non-GAAP)
Net revenues
$
1,363.4
$
—
$
1,363.4
Gross profit
875.4
—
875.4
Gross margin
64.2%
64.2%
Operating income
34.7
73.3
108.0
as % of Net revenues
2.5%
7.9%
Net loss attributable to common
stockholders
(100.2)
76.3
(23.9)
as % of Net revenues
(7.3%)
(1.8%)
Adjusted EBITDA
164.5
as % of Net revenues
12.1%
EPS (diluted)
$
(0.12)
$
(0.03)
Adjusted diluted EPS includes $0.10 hurt
related to the net impact of the Total Return Swaps in the three
months ended June 30, 2024.
Three Months Ended June 30,
2023
COTY INC.
(in millions)
Reported (GAAP)
Adjustments(a)
Adjusted (Non-GAAP)
Net revenues
$
1,351.6
$
—
$
1,351.6
Gross profit
849.5
(0.1)
849.4
Gross margin
62.9%
62.8%
Operating (loss) income
129.0
(23.9)
105.1
as % of Net revenues
9.5%
7.8%
Net income attributable to common
stockholders
29.6
(24.4)
5.2
as % of Net revenues
2.2%
0.4%
Adjusted EBITDA
165.4
as % of Net revenues
12.2%
EPS (diluted)
$
0.03
$
0.01
Adjusted diluted EPS includes $0.00
related to the net impact of the Total Return Swaps in the three
months ended June 30, 2023.
(a) See “Reconciliation of Reported Net
Income, Adjusted Operating Income and Adjusted EBITDA for Coty Inc”
and “Reconciliation of Reported Net Income to Adjusted Net Income”
for a detailed description of adjusted items.
RECONCILIATION OF REPORTED TO ADJUSTED
RESULTS FOR THE CONSOLIDATED STATEMENTS OF OPERATIONS
These supplemental schedules provide adjusted Non-GAAP financial
information and a quantitative reconciliation of the difference
between the Non-GAAP financial measure and the financial measure
calculated and reported in accordance with GAAP.
Year Ended June 30,
2024
COTY INC.
(in millions)
Reported (GAAP)
Adjustments(a)
Adjusted (Non-GAAP)
Net revenues
$
6,118.0
$
—
$
6,118.0
Gross profit
3,939.2
—
3,939.2
Gross margin
64.4%
64.4%
Operating income
546.7
316.7
863.4
as % of Net revenues
8.9%
14.1%
Net income attributable to common
stockholders
76.2
246.9
323.1
as % of Net revenues
1.2%
5.3%
Adjusted EBITDA
1,091.1
as % of Net revenues
17.8%
EPS (diluted)
$
0.09
$
0.37
Adjusted diluted EPS includes $0.11 hurt
related to the net impact of the Total Return Swaps in the year
ended June 30, 2024.
Year Ended June 30,
2023
COTY INC.
(in millions)
Reported (GAAP)
Adjustments(a)
Adjusted (Non-GAAP)
Net revenues
$
5,554.1
$
—
$
5,554.1
Gross profit
3,547.3
1.9
3,549.2
Gross margin
63.9%
63.9%
Operating income
543.7
195.1
738.8
as % of Net revenues
9.8%
13.3%
Net income attributable to common
stockholders
495.0
(37.1)
457.9
as % of Net revenues
8.9%
8.2%
Adjusted EBITDA
972.8
as % of Net revenues
17.5%
EPS (diluted)
$
0.57
$
0.53
Adjusted diluted EPS includes $0.15
related to the net impact of the Total Return Swaps in the year
ended June 30, 2023.
(a) See “Reconciliation of Reported Net Income to Adjusted
Operating Income, and Adjusted EBITDA” and “Reconciliation of
Reported Net Income to Adjusted Net Income” for a detailed
description of adjusted items.
RECONCILIATION OF REPORTED NET INCOME TO ADJUSTED OPERATING
INCOME AND ADJUSTED EBITDA
CONTINUING OPERATIONS
Three Months Ended June
30,
Year Ended June 30,
(in millions)
2024
2023
Change
2024
2023
Change
Net (loss) income
$
(95.6)
$
35.5
<(100%)
$
109.4
$
523.2
(79%)
Net income margin
(7.0) %
2.6 %
1.8 %
9.4 %
Provision (benefit) for income taxes
(11.8)
43.3
<(100%)
95.1
181.6
(48%)
Income (loss) before income
taxes
(107.4)
78.8
<(100%)
204.5
704.8
(71%)
Interest expense, net
61.7
72.2
(15%)
252.0
257.9
(2%)
Other expense (income), net
80.4
(22.0)
>100%
90.2
(419.0)
>100%
Reported Operating income
$
34.7
$
129.0
(73%)
$
546.7
$
543.7
1%
Reported operating income margin
2.5%
9.5%
8.9%
9.8%
Amortization expense
48.0
48.7
(1%)
193.4
191.8
1%
Restructuring and other business
realignment costs (a)
7.0
(1.3)
>100%
36.6
(6.3)
>100%
Stock-based compensation
18.4
37.0
(50%)
88.8
135.9
(35%)
Gain on sale of real estate (b)
—
(3.9)
100%
(1.6)
(4.9)
67%
Early license termination and market exit
costs (d)
(0.1)
(104.4)
100%
(0.5)
(121.4)
100%
Total adjustments to reported operating
income (loss)
73.3
(23.9)
>100%
316.7
195.1
62%
Adjusted Operating income
$
108.0
$
105.1
3%
$
863.4
$
738.8
17%
Adjusted operating income margin
7.9 %
7.8 %
14.1 %
13.3 %
Adjusted depreciation (c)
56.5
60.3
(6%)
227.7
234.0
(3%)
Adjusted EBITDA
$
164.5
$
165.4
(1%)
$
1,091.1
$
972.8
12%
Adjusted EBITDA margin
12.1 %
12.2 %
17.8 %
17.5%
(a)
In the three months ended June 30, 2024,
we incurred restructuring and other business structure realignment
costs of $7.0. We incurred restructuring costs of $1.7 included in
the Condensed Consolidated Statements of Operations, and business
structure realignment costs of $5.3 included in Selling, general
and administrative expenses, in the Condensed Consolidated
Statement of Operations. In the three months ended June 30, 2023,
we incurred a credit in restructuring and other business structure
realignment costs of $(1.3). We incurred a credit in restructuring
costs of $(1.1) included in the Condensed Consolidated Statements
of Operations and business structure realignment costs of $(0.2)
primarily related to the Transformation Plan. This amount includes
$(0.1) reported in Cost of sales and $(0.1) reported in Selling,
general and administrative expenses in the Condensed Consolidated
Statement of Operations
In fiscal 2024, we incurred restructuring
and other business structure realignment costs of $36.6. We
incurred restructuring costs of $36.7 included in the Condensed
Consolidated Statements of Operations, related to the Current
Restructuring Actions and business structure realignment costs of
$(0.1). This amount includes $(0.1) reported in Selling, general
and administrative expenses. In fiscal 2023, we incurred a credit
restructuring and other business structure realignment costs of
$(6.3). We incurred a credit in restructuring costs of $(6.5)
included in the Condensed Consolidated Statements of Operations,
related to the Transformation Plan, and business structure
realignment costs of $0.2 primarily related to the Transformation
Plan. This amount includes $0.9 reported in Cost of sales in the
Condensed Consolidated Statement of Operations and a credit of
$(0.7) reported in Selling, general and administrative
expenses.
(b)
In the three months ended June 30, 2024, we recognized no gain
related to sale of real estate. In the three months ended June 30,
2023, we recognized a gain of $3.9 related to sale of real estate.
In fiscal 2024, we recognized a gain of
$1.6 related to sale of real estate. In fiscal 2023, we recognized
a gain of $4.9 related to sale of real estate.
(c)
In the three months ended June 30, 2024,
adjusted depreciation expense of $25.0 and $31.5 was reported in
the Prestige and Consumer Beauty segments, respectively. In the
three months ended June 30, 2023, adjusted depreciation expense of
$27.6 and $32.7 was reported in the Prestige and Consumer Beauty
segments, respectively.
In fiscal 2024, adjusted depreciation
expense of $105.2 and $122.5 was reported in the Prestige and
Consumer Beauty segments, respectively. In fiscal 2023, adjusted
depreciation expense of $110.5 and $123.5 was reported in the
Prestige and Consumer Beauty segments, respectively.
(d)
In the three months ended June 30, 2024,
we recognized a gain of $0.1. In the three months ended June 30,
2023, we recognized a gain of $104.4 related to early termination
of Lacoste fragrance license.
In fiscal 2024, we recognized a gain of
$0.5 related to early termination of Lacoste fragrance license and
our decision to wind down our business in Russia. In fiscal 2023,
we recognized a gain of $121.4 related to early termination of
Lacoste fragrance license.
SEGMENT OPERATING INCOME (LOSS), SEGMENT ADJUSTED OPERATING
INCOME (LOSS) AND SEGMENT ADJUSTED EBITDA
OPERATING INCOME, ADJUSTED OPERATING INCOME AND ADJUSTED EBITDA-
PRESTIGE SEGMENT
Three Months Ended June
30,
Year Ended June
30,
(in millions)
2024
2023
Change %
2024
2023
Change %
Reported operating income
$
49.7
$
46.4
7%
$
580.7
$
483.7
20%
Reported operating income (loss)
margin
6.2%
5.8%
15.1%
14.1%
Amortization expense
38.1
38.7
(2)%
153.7
151.4
2%
Total adjustments to reported operating
income
$
38.1
$
38.7
(2)%
$
153.7
$
151.4
2%
Adjusted operating income
$
87.8
$
85.1
3%
$
734.4
$
635.1
16%
Adjusted operating income margin
10.9%
10.6%
19.0%
18.6%
Adjusted depreciation
25.0
27.6
(9)%
$
105.2
$
110.5
(5)%
Adjusted EBITDA
$
112.8
$
112.7
—%
$
839.6
$
745.6
13%
Adjusted EBITDA margin
14.1%
14.1%
21.8%
21.8%
OPERATING INCOME, ADJUSTED OPERATING INCOME AND ADJUSTED EBITDA-
CONSUMER BEAUTY SEGMENT
Three Months Ended June
30,
Year Ended June
30,
(in millions)
2024
2023
Change %
2024
2023
Change%
Reported operating income
(loss)
$
10.3
$
10.0
3%
$
89.3
$
63.3
41%
Reported operating income (loss)
margin
1.8%
1.8%
4.0%
3.0%
Amortization expense
9.9
10.0
(1)%
39.7
$
40.4
(2)%
Total adjustments to reported operating
income
$
9.9
$
10.0
(1)%
$
39.7
$
40.4
(2)%
Adjusted operating income
(loss)
$
20.2
$
20.0
1%
$
129.0
$
103.7
24%
Adjusted operating income (loss)
margin
3.6%
3.6%
5.7%
4.9%
Adjusted depreciation
31.5
32.7
(4)%
122.5
$
123.5
(1)%
Adjusted EBITDA
$
51.7
$
52.7
(2)%
$
251.5
$
227.2
11%
Adjusted EBITDA margin
9.2%
9.5%
11.1%
10.6%
OPERATING LOSS, ADJUSTED OPERATING LOSS AND ADJUSTED EBITDA-
CORPORATE SEGMENT
Three Months Ended
March 31,
Year Ended June
30,
(in millions)
2024
2023
Change %
2024
2023
Change %
Reported operating loss
$
(25.3)
$
72.6
<(100%)
$
(123.3)
$
(3.3)
<(100%)
Reported operating income (loss)
margin
N/A
N/A
N/A
N/A
Restructuring and other business
realignment costs
7.0
(1.3)
>100%
36.6
$
(6.3)
>100%
Stock-based compensation
18.4
37.0
<(100%)
88.8
$
135.9
(35) %
Gain on sale of real estate
—
(3.9)
>100%
(1.6)
$
(4.9)
67 %
Early license termination and market exit
costs
$
(0.1)
(104.4)
>100%
(0.5)
$
(121.4)
100 %
Total adjustments to reported operating
income
$
25.3
$
(72.6)
>100%
$
123.3
$
3.3
>100%
Adjusted operating loss
$
—
$
—
N/A
$
—
$
—
N/A
Adjusted operating income margin
N/A
N/A
N/A
N/A
Adjusted depreciation
—
—
N/A
—
—
N/A
Adjusted EBITDA
$
—
$
—
N/A
$
—
$
—
N/A
Adjusted EBITDA margin
— %
— %
— %
— %
RECONCILIATION OF REPORTED INCOME (LOSS) BEFORE INCOME TAXES
AND EFFECTIVE TAX RATES TO ADJUSTED INCOME BEFORE INCOME TAXES AND
ADJUSTED EFFECTIVE TAX RATES FOR CONTINUING OPERATIONS
Three Months Ended June 30,
2024
Three months ended June 30,
2023
(in millions)
(Loss) income before income
taxes
Provision for income
taxes
Effective tax rate
(Loss) income before income
taxes
Provision for income
taxes
Effective tax rate
Reported Income (Loss) before income
taxes - Continuing Operations
$
(107.4)
$
(11.8)
11.0%
$
78.8
$
43.3
54.9%
Adjustments to Reported Operating Income
(a)
73.3
(23.9)
Change in fair value of investment in
Wella Business (c)
(5.0)
(20.0)
Other adjustments (d)
(6.7)
(0.4)
Total Adjustments (b)
61.6
(16.4)
(44.3)
(21.7)
Adjusted Income (loss) before income
taxes -
Continuing Operations
$
(45.8)
$
(28.2)
61.6%
$
34.5
$
21.6
62.6%
The adjusted effective tax rate was 61.6% for the three months
ended June 30, 2024 compared to 62.6% for the three months ended
June 30, 2023. The differences were primarily due to an increase in
valuation allowances recorded primarily on interest expense
carryforwards offset by a tax benefit recorded as a result of the
issuance of non-refundable income tax credits received from the
Swiss Tax Authorities.
Year Ended June 30,
2024
Year Ended June 30,
2023
(in millions)
(Loss) income before income
taxes
Provision for income
taxes
Effective tax rate
(Loss) income before income
taxes
Provision for income
taxes
Effective tax rate
Reported Income before income taxes -
Continuing Operations
$
204.5
$
95.1
46.5 %
$
704.8
$
181.6
25.8 %
Adjustments to Reported Operating Income
(a)
316.7
195.1
Change in fair value of investment in
Wella Business (c)
(25.0)
(230.0)
Other adjustments (d)
(2.4)
0.2
Total Adjustments (b) (e)
289.3
35.6
(34.7)
(4.5)
Adjusted Income before income taxes
-
Continuing Operations
$
493.8
$
130.7
26.5%
$
670.1
$
177.1
26.4%
The adjusted effective tax rate was 26.5% for the fiscal year
ended June 30, 2024 compared to 26.4% in the fiscal year ended June
30, 2023. The differences were primarily due to an increase in
valuation allowances recorded primarily on interest expense
carryforwards and the tax impact of the revaluation of the
Company’s deferred tax liabilities due to a tax rate increase
enacted in Switzerland offset by a tax benefit recorded as a result
of the issuance of non-refundable income tax credits received from
the Swiss Tax Authorities and a reduction of unrecognized tax
benefits due to the settlement of foreign tax audits.
(a)
See a description of adjustments under
“Adjusted Operating Income (Loss) for Coty Inc.”
(b)
The tax effects of each of the items
included in adjusted income are calculated in a manner that results
in a corresponding income tax expense/provision for adjusted
income. In preparing the calculation, each adjustment to reported
income is first analyzed to determine if the adjustment has an
income tax consequence. The provision for taxes is then calculated
based on the jurisdiction in which the adjusted items are incurred,
multiplied by the respective statutory rates and offset by the
increase or reversal of any valuation allowances commensurate with
the non-GAAP measure of profitability. In connection with our
decision to wind down our operations in Russia, we recognized tax
charges related to certain direct incremental impacts of our
decision, which are reflected in this amount, in fiscal 2024 and
fiscal 2023.
(c)
The amount represents the realized and unrealized loss (gain)
recognized for the change in the fair value of the investment in
Wella Company.
(d)
See "Reconciliation of Reported Net Income
(Loss) Attributable to Coty Inc to Adjusted Net Income (loss)
Attributable to Coty Inc."
(e)
In fiscal 2024, the total tax impact on adjustments includes a tax
expense of $27.6 recorded due to changes to the net deferred taxes
recognized on the assignment of strategic service functions from
Amsterdam to Geneva, as an indirect result of the required
revaluation of the original transfer of the main principal location
from Geneva to Amsterdam in fiscal 2021. The total tax impact on
adjustments also includes a tax benefit of $1.1, $0.4 for fiscal
2024, fiscal 2023, respectively, recorded as the result of the
Company’s exit from Russia.
RECONCILIATION OF REPORTED NET INCOME TO ADJUSTED NET INCOME
FOR COTY INC.
Three Months Ended June
30,
Year Ended June 30,
(in millions)
2024
2023
Change
2024
2023
Change
Net income from Coty Inc., net of
noncontrolling interests
$
(96.9)
$
32.9
<(100%)
$
89.4
$
508.2
(82)%
Convertible Series B Preferred Stock
dividends (c)
(3.3)
(3.3)
—%
(13.2)
(13.2)
— %
Reported Net income (loss) attributable
to Continuing Operations
$
(100.2)
$
29.6
<(100%)
$
76.2
$
495.0
(85%)
% of Net revenues
(7.3%)
2.2%
1.2%
8.9%
Adjustments to Reported Operating Income
(a)
73.3
(23.9)
>100%
316.7
195.1
62%
Change in fair value of investment in
Wella Business (d)
(5.0)
(20.0)
75
(25.0)
(230.0)
89%
Adjustments to other expense (e)
(6.7)
(0.4)
<(100%)
(2.4)
0.2
<(100%)
Adjustments to noncontrolling interests
(b)
(1.7)
(1.8)
6%
(6.8)
(6.9)
1%
Change in tax provision due to adjustments
to Reported Net income attributable to Continuing Operations
16.4
21.7
(24%)
(35.6)
4.5
<(100%)
Adjusted Net Income attributable to
Coty Inc.
$
(23.9)
$
5.2
<(100%)
$
323.1
$
457.9
(29%)
% of Net revenues
(1.8%)
0.4%
5.3%
8.2%
Per Share Data
Adjusted weighted-average common
shares
Basic
867.9
852.0
874.4
849.0
Diluted (c) (f)
867.9
864.7
883.4
862.8
Adjusted Net Income attributable to
Coty Inc. per Common Share
Basic
$
(0.03)
$
0.01
$
0.37
$
0.54
Diluted (c)
$
(0.03)
$
0.01
$
0.37
$
0.53
(a)
See a description of adjustments under
“Adjusted Operating Income (Loss) for Continuing Operations.”
(b)
The amounts represent the after-tax impact
of the non-GAAP adjustments included in Net income attributable to
noncontrolling interest based on the relevant noncontrolling
interest percentage in the Condensed Consolidated Statements of
Operations.
(c)
Diluted EPS is adjusted by the effect of
dilutive securities, including awards under the Company's equity
compensation plans, the convertible Series B Preferred Stock and
the Forward Repurchase Contracts, if applicable. When calculating
any potential dilutive effect of stock options, Series A Preferred
Stock, restricted stock, PRSUs and RSUs, the Company uses the
treasury method and the if-converted method for the Convertible
Series B Preferred Stock and the Forward Repurchase Contracts. The
treasury method typically does not adjust the net income
attributable to Coty Inc. while the if-converted method requires an
adjustment to reverse the impact of the preferred stock dividends
and the impact of fair market value (gains)/losses for contracts
with the option to settle in shares or cash, if dilutive, on net
income applicable to common stockholders during the period.
(d)
The amount represents the realized and
unrealized gain recognized for the change in the fair value of the
investment in Wella Company.
(e)
For the three months ended June 30, 2024,
this primarily represents a recovery of previously written-off
non-income tax credits and the amortization of basis differences in
certain equity method investments. For the three months ended June
30, 2023, this primarily represents the amortization of basis
differences in certain equity method investments and pension
curtailment gains.
For the twelve months ended June 30, 2024, this primarily
represents a recovery of previously written-off non-income tax
credits and the amortization of basis differences in certain equity
method investments. For the twelve months ended June 30, 2023, this
primarily represents the amortization of basis differences in
certain equity method investments and pension curtailment gains.
(f)
For the three months ended June 30, 2024,
Convertible Series B Preferred Stock was excluded from the
computation of diluted loss per share due to the net loss incurred
during the period. For the three months ended June 30, 2023 and the
twelve months ended June 30, 2024 and 2023, 23.7 million dilutive
shares of Convertible Series B Preferred Stock were excluded in the
computation of adjusted weighted-average diluted shares because
their effect would be anti-dilutive.
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES
TO FREE CASH FLOW
COTY INC.
Three Months Ended June
30,
Year Ended June 30,
(in millions)
2024
2023
2024
2023
Net cash provided by operating
activities
$
176.5
$
104.9
$
614.6
$
625.7
Capital expenditures
(59.8)
(66.8)
(245.2)
(222.8)
Free cash flow
$
116.7
$
38.1
$
369.4
$
402.9
RECONCILIATION OF TOTAL DEBT TO FINANCIAL NET DEBT AND
ECONOMIC NET DEBT
COTY INC.
As of
(in millions)
June 30, 2024
Total debt1
$
3,913.7
Less: Cash and cash equivalents
300.8
Financial Net debt
$
3,612.9
Less: Value of Wella stake
1,085.0
Economic Net debt
$
2,527.9
1 Total debt is derived from Footnote 14
from the Form 10-K for the fiscal year ended June 30, 2024 and
includes both the Company's short-term and long-term debt
(including the current portion of long-term debt).
RECONCILIATION OF TTM(a) NET INCOME TO TTM ADJUSTED
EBITDA
Three months ended
Twelve months ended
September 30, 2023
December 31, 2023
March 31, 2024
June 30, 2024
June 30, 2024
(in millions)
Net income (loss) from continuing
operations
$
10.2
$
186.0
$
8.8
$
(95.6)
$
109.4
Provision (benefit) for income taxes on
continuing operations
$
40.9
$
71.4
$
(5.4)
$
(11.8)
$
95.1
Income (loss) from continuing
operations before income taxes
$
51.1
$
257.4
$
3.4
$
(107.4)
$
204.5
Interest expense, net
$
69.8
$
60.1
$
60.4
$
61.7
$
252.0
Other (income) expense, net
$
76.6
$
(80.8)
$
14.0
$
80.4
$
90.2
Reported operating income from
continuing operations
$
197.5
$
236.7
$
77.8
$
34.7
$
546.7
Amortization expense
$
48.6
$
48.3
$
48.5
$
48.0
$
193.4
Restructuring and other business
realignment costs
$
27.3
$
4.0
$
(1.7)
$
7.0
$
36.6
Stock-based compensation
$
29.7
$
20.2
$
20.5
$
18.4
$
88.8
Early license termination and market exit
costs
$
0.8
$
—
$
(1.2)
$
(0.1)
$
(0.5)
(Gain) Loss on sale of real estate
$
(1.7)
$
0.1
$
—
$
—
$
(1.6)
Total adjustments to reported operating
loss
$
104.7
$
72.6
$
66.1
$
73.3
$
316.7
Adjusted operating income
$
302.2
$
309.3
$
143.9
$
108.0
$
863.4
Add: Adjusted depreciation(b)
$
58.1
$
57.1
$
56.0
$
56.5
$
227.7
Adjusted EBITDA
$
360.3
$
366.4
$
199.9
$
164.5
$
1,091.1
(a)
Trailing twelve months (TTM) net income
from continuing operations, reported operating income, adjusted
operating income, and adjusted EBITDA represents the summation of
each of these financial metrics for the quarters ended June 30,
2024, March 31, 2024, December 31, 2023 and September 30, 2023.
(b)
Adjusted depreciation for the twelve
months ended June 30, 2024 represents depreciation expense for Coty
Inc for the period, excluding accelerated depreciation.
COMPARISON OF TOTAL DEBT/NET INCOME FROM CONTINUING
OPERATIONS TO FINANCIAL NET DEBT/ADJUSTED EBITDA
Numerator
Total Debt
Financial Net Debt(c)
$
3,913.7
$
3,612.9
Denominator
TTM Net income from continuing
operations(b)
$
109.4
35.8
N/R(d)
TTM Adjusted EBITDA(a)
$
1,091.1
N/R(d)
3.3
(a)
TTM adjusted operating income for the
twelve months ended June 30, 2024 represents the summation of
adjusted operating income for Coty Inc for each of the quarters
ended June 30, 2024, March 31, 2024, December 31, 2023 and
September 30, 2023. For a reconciliation of adjusted operating
income to operating income for Coty Inc. for each of those periods,
see the table entitled "Reconciliation of TTM of Net Income to
Adjusted Operating Income to Adjusted EBITDA" for each of those
periods.
(b)
TTM Net income (loss) from continuing
operations for the twelve months ended June 30, 2024 represents the
summation of the Net income (loss) from continuing operations for
each of the quarters ended June 30, 2024, March 31, 2024, December
31, 2023 and September 30, 2023.
(c) Financial Net Debt equals Total Debt minus Cash and cash
equivalents as of June 30, 2024. See table titled "Reconciliation
of Total Debt to Financial Net Debt and Economic Net Debt". (d) Not
relevant.
RECONCILIATION OF REPORTED NET REVENUES TO LIKE-FOR-LIKE NET
REVENUES
Three Months Ended June 30,
2024 vs. Three Months Ended June 30, 2023 Net Revenue
Change
Net Revenues Change YoY
Reported Basis
Constant Currency
Impact from Acquisitions and
Divestitures (a)
LFL and Core Business Excluding
Russia(b)
Prestige
— %
2 %
(4) %
6 %
Consumer Beauty
2 %
4 %
— %
4 %
Total Continuing Operations
1 %
3 %
(2) %
5 %
Year Ended June 30, 2024 vs.
Year Ended June 30, 2023 Net Revenue Change
Net Revenues Change YoY
Reported Basis
Constant Currency
Impact from Acquisitions and
Divestitures and Market Exit from Russia (a)
LFL and Core Business Excluding
Russia(b)
Prestige
13 %
12 %
(2) %
14 %
Consumer Beauty
6 %
5 %
(1) %
6 %
Total Continuing Operations
10 %
9 %
(2) %
11 %
(a)
The Company ceased commercial activities
in Russia at the end of the second quarter of fiscal 2023. As a
result, there are no revenues from Russia after the end of the
second quarter of fiscal 2023. The Company also had an early
license termination with Lacoste and concluded the sell-off period
at the end of the second quarter of fiscal 2024. In calculating the
QTD YoY LFL revenue change, to maintain comparability, we have
excluded the fourth quarter of fiscal 2023 Lacoste contribution. In
calculating the YTD YoY LFL revenue change, to maintain
comparability, we have excluded the first and second quarters
fiscal 2023 financial contribution of the Russian subsidiary and
the third and fourth quarter of fiscal 2023 Lacoste financial
contribution.
(b)
LFL results for the three months ended and
year ended June 30, 2024 include 1% help from Argentina resulting
from significant price increases due to hyperinflation.
COTY INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
June 30, 2024
June 30, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
300.8
$
246.9
Restricted cash
19.8
36.9
Trade receivables, net
441.6
360.9
Inventories
764.1
853.4
Prepaid expenses and other current
assets
437.2
553.6
Total current assets
1,963.5
2,051.7
Property and equipment, net
718.9
712.9
Goodwill
3,905.7
3,987.9
Other intangible assets, net
3,565.6
3,798.0
Equity investments
1,090.6
1,068.9
Operating lease right-of-use assets
255.3
286.7
Other noncurrent assets
582.9
755.5
TOTAL ASSETS
$
12,082.5
$
12,661.6
LIABILITIES, MEZZANINE EQUITY AND
STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
1,405.6
$
1,444.7
Short-term debt and current portion of
long-term debt
3.0
57.9
Other current liabilities
1,193.2
1,234.2
Total current liabilities
2,601.8
2,736.8
Long-term debt, net
3,841.8
4,178.2
Long-term operating lease liabilities
218.7
247.5
Other noncurrent liabilities
1,172.5
1,265.8
TOTAL LIABILITIES
7,834.8
8,428.3
CONVERTIBLE SERIES B PREFERRED
STOCK
142.4
142.4
REDEEMABLE NONCONTROLLING
INTERESTS
93.6
93.5
EQUITY:
Preferred Stock
—
—
Class A Common Stock
9.6
9.1
Additional paid-in capital
11,308.0
10,898.6
Accumulated deficit
(4,898.5)
(4,987.9)
Accumulated other comprehensive loss
(795.1)
(662.4)
Treasury stock
(1,796.9)
(1,446.3)
Total Coty Inc. stockholders’
equity
3,827.1
3,811.1
Noncontrolling interests
184.6
186.3
Total equity
4,011.7
3,997.4
TOTAL LIABILITIES, MEZZANINE EQUITY AND
STOCKHOLDERS’ EQUITY
$
12,082.5
$
12,661.6
COTY INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended June 30,
2024
2023
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss)
$
109.4
523.2
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
421.1
426.7
Non-cash lease expense
61.6
63.6
Deferred income taxes
(9.8)
56.3
Provision (release) for bad debts
2.7
(18.9)
Provision for pension and other
post-employment benefits
8.6
8.5
Share-based compensation
88.8
135.9
(Gain) loss on sale of business in
discontinued operations and other business divestiture
—
—
Losses (gains) on disposals of long-term
assets and license terminations, net
3.9
(99.7)
Realized and unrealized gains from equity
investments, net
(21.7)
(226.3)
Realized and unrealized gains on forward
repurchase contracts, net
76.3
(196.9)
Other
61.3
38.8
Change in operating assets and
liabilities, net of effects from purchase of acquired
companies:
Trade receivables
(104.5)
36.8
Inventories
67.2
(180.3)
Prepaid expenses and other current
assets
(11.0)
(15.2)
Accounts payable
(19.4)
138.4
Accrued expenses and other current
liabilities
34.4
(21.9)
Operating lease liabilities
(58.4)
(61.0)
Other assets and liabilities, net
(95.9)
17.7
Net cash provided by operating
activities
614.6
625.7
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures
(245.2)
(222.8)
Proceeds from sale of long lived assets
and license termination
19.0
104.6
Net cash provided by investing
activities
(226.2)
(118.2)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayments from debt, net
(327.5)
(268.2)
Dividend payment on Class A Common Stock
and Convertible Series B Preferred Stock
(13.4)
(13.7)
Proceeds from issuance of Class A Common
Stock in connection with Global Offering, net of offering costs
342.4
—
Proceeds from issuance of Class A Common
Stock and Convertible Series B Preferred Stock
13.5
0.9
Net (payments) for foreign currency
contracts
(7.3)
(128.1)
Payments related to forward repurchase
contracts
(242.6)
(26.4)
Payment of deferred financing fees
(47.1)
—
Other financing activities
(54.7)
(33.8)
Net cash used in financing
activities
(336.7)
(469.3)
EFFECT OF EXCHANGE RATES ON CASH, CASH
EQUIVALENTS AND RESTRICTED CASH
(14.9)
(18.2)
NET DECREASE IN CASH, CASH EQUIVALENTS
AND RESTRICTED CASH
36.8
20.0
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH—Beginning of period
283.8
263.8
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH—End of period
$
320.6
$
283.8
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240820467213/en/
Investor Relations Olga
Levinzon, +1 212 389-7733 olga_levinzon@cotyinc.com
Media Antonia
Werther, +31 621 394495 antonia_werther@cotyinc.com
Coty (NYSE:COTY)
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