09.21.22
Global beauty company Coty has announced a comprehensive update on its Skincare strategy, one of Coty’s six strategic growth pillars, with a focus on its Prestige brands.
“Coty’s skincare portfolio is one of the most exciting growth areas in our business, with revenues on track to double to $500M-600M by FY25,” said Sue Y. Nabi, CEO of Coty. “Our strategy is underpinned by world-recognized brands serving key white space opportunities and consumer needs, 75-years of scientific innovation and leadership, superior patents and distinct intellectual property, and a large and growing team of skincare experts across the organization. We have begun our skincare revolution in Hainan and mainland China, where we are already seeing proof that our brands, formulations, and communication can win over consumers. At the same time, our research & development efforts are focused on the fastest growing consumer needs and health trends. All of this gives us confidence that we can capture significant opportunities in the $150 billion global skincare market.”
Coty’s scientific update will focus on the company’s distinct and superior technologies in five key areas: full-light protection, oxygen delivery, retinol vectorization, DNA repair, and bio-fermented blends. Coty’s research in these critical skincare areas goes back several decades, with key patents extending for the next 5-10 years.
Coty’s brand overview and commercial update will center on the Company’s robust portfolio of prestige skincare brands, including Lancaster, Orveda, philosophy, Kylie Skin and SKKN by Kim. Coty’s prestige skincare brands cover the most promising segments of the skincare market, while offering a unique proposition and clear sense of purpose to today’s consumers.
Constantin Sklavenitis, Coty’s chief prestige brands officer, said: “Our five prestige skincare brands each offer their own sense of purpose, technology, and cater to a specific market segment that shows great potential. The transformation of our skincare portfolio has already begun with Lancaster, which in the past year has become one of the fastest growing brands in Hainan amongst key retailers. This is critical confirmation that Coty has the technology, brands, strategic clarity, and commercial capabilities to win in skincare in the coming years.”
Coty will provide further details on its skincare intellectual property, upcoming operational and portfolio milestones, early evidence of success, and financial goals through FY25 and beyond at an in-person Investor Event at Coty’s Monaco skincare R&D and manufacturing facility today.
In the near term, Coty is seeing stronger beauty demand, leading the Company to raise it 1QFY23 LFL sales growth outlook to +8-9%, from previous +6-8%, adjusting for the impact of the Russia exit. The improved outlook is being fueled by both Prestige and Consumer Beauty, and across Europe, the Americas, and Global Travel Retail. The strong sales momentum also underpins a stronger Q1 gross margin outlook, despite continued inflationary pressures.
“Coty’s skincare portfolio is one of the most exciting growth areas in our business, with revenues on track to double to $500M-600M by FY25,” said Sue Y. Nabi, CEO of Coty. “Our strategy is underpinned by world-recognized brands serving key white space opportunities and consumer needs, 75-years of scientific innovation and leadership, superior patents and distinct intellectual property, and a large and growing team of skincare experts across the organization. We have begun our skincare revolution in Hainan and mainland China, where we are already seeing proof that our brands, formulations, and communication can win over consumers. At the same time, our research & development efforts are focused on the fastest growing consumer needs and health trends. All of this gives us confidence that we can capture significant opportunities in the $150 billion global skincare market.”
Coty’s scientific update will focus on the company’s distinct and superior technologies in five key areas: full-light protection, oxygen delivery, retinol vectorization, DNA repair, and bio-fermented blends. Coty’s research in these critical skincare areas goes back several decades, with key patents extending for the next 5-10 years.
Coty’s brand overview and commercial update will center on the Company’s robust portfolio of prestige skincare brands, including Lancaster, Orveda, philosophy, Kylie Skin and SKKN by Kim. Coty’s prestige skincare brands cover the most promising segments of the skincare market, while offering a unique proposition and clear sense of purpose to today’s consumers.
Constantin Sklavenitis, Coty’s chief prestige brands officer, said: “Our five prestige skincare brands each offer their own sense of purpose, technology, and cater to a specific market segment that shows great potential. The transformation of our skincare portfolio has already begun with Lancaster, which in the past year has become one of the fastest growing brands in Hainan amongst key retailers. This is critical confirmation that Coty has the technology, brands, strategic clarity, and commercial capabilities to win in skincare in the coming years.”
Coty will provide further details on its skincare intellectual property, upcoming operational and portfolio milestones, early evidence of success, and financial goals through FY25 and beyond at an in-person Investor Event at Coty’s Monaco skincare R&D and manufacturing facility today.
Financial Outlook
With all the key elements of Coty’s strategy now in place, the company expects to double its skincare revenues from FY22 to FY25, with further acceleration in FY26 and beyond. This coupled with the continued momentum in the rest of the Coty business, reinforces the Company’s commitment to its medium-term financial targets laid out at the Investor Day in November 2021. This includes 6-8% LFL sales growth, 9-11% adjusted EBITDA growth, a low 20s EPS CAGR through FY25, and approximately 2x leverage by CY25.In the near term, Coty is seeing stronger beauty demand, leading the Company to raise it 1QFY23 LFL sales growth outlook to +8-9%, from previous +6-8%, adjusting for the impact of the Russia exit. The improved outlook is being fueled by both Prestige and Consumer Beauty, and across Europe, the Americas, and Global Travel Retail. The strong sales momentum also underpins a stronger Q1 gross margin outlook, despite continued inflationary pressures.