Coty Inc. Q4 FY2025 earnings call

• Over the past 5 years, Coty transformed, refining strategy, strengthening portfolio, and consistently delivering results, outperforming global peers in Prestige. - Fiscal '25 had challenges including U.S. execution weaknesses, retailer inventory buildup, and headwinds from lapping fiscal '24 innovation. - Focus on returning to blockbuster fragrance launches and steady innovation cadence. - Actions taken include regional structure changes, new leadership in U.S., adjusted bonus structure, next phase of All-in to Win program, transferring fragrance manufacturing to U.S., embedding digital and e-com teams in local markets, and sustainability milestones like Gold EcoVadis rating. - Skin care is a strategic focus, cosmetics is being rebalanced for profitability, and fragrances remain a core strength with best-in-class capabilities.

Prestige fragrances: A $3.5 billion business, delivering a robust CAGR of plus 10% from fiscal '21 to fiscal '25. Prestige fragrances now represent 60% of sales, up from 56% just 2 years ago. Consumer Beauty: Restored to growth with a plus 2% CAGR from fiscal '21 to fiscal '25. Mass fragrance business grew by 8% like-for-like in fiscal '25, representing 7% of Coty's fiscal '25 sales.

• Fiscal '26 expects sequential improvement in sales and profit trends. - Net revenues to remain negative in first half, turn positive in second half. - Adjusted EBITDA expected to decline in Q1 and Q2 '26, then improve. - Adjusted EPS excluding equity swap expected $0.33 to $0.36 in first half. - Seasonally stronger free cash flow in H1 fiscal '26 of over $350 million, targeting investment-grade profile by calendar year '26.

• Tariff impacts, including 15% U.S. tariff on European imports and 30%+ tariffs on Chinese imports. - U.S. execution weaknesses and retailer inventory issues in fiscal '25. - Lapping high comparison bases from fiscal '24 blockbuster launches adding pressure in fiscal '25.