Robust Sales Growth in Both Divisions, Led by Europe and Travel Retail Continued Gross Margin Expansion, Despite Inflationary Environment Strong FY22 Cash Flow and Deleveraging Progress FY23 Revenue and Profit Expected to Grow In-Line With Medium-Term Targets
NEW YORK--(BUSINESS WIRE)-- Coty Inc. (NYSE: COTY) ("Coty" or "the Company") today announced its results for the fourth quarter of fiscal year 2022, ended June 30, 2022. The Company delivered its eighth consecutive quarter of results in-line to ahead of expectations, while also continuing to progress across each of its strategic growth pillars.
In Q4, Coty's sales increased 10% as reported and 16% on a LFL basis, including over 150 bps of negative impact from exiting its Russia business, ahead of its prior guidance for low-double-digit LFL growth in Q4. As a result, Coty ended FY22 with reported sales growth of 15% and LFL sales growth of 16%, above its original target of low-teens LFL sales growth and well ahead of the underlying beauty market, putting Coty amongst the best in its competitive set.
Coty's sales were driven by strong and consistent momentum in both divisions, with Prestige growing 20% as reported and 22% LFL in FY22, and Consumer Beauty growing 7% as reported and 8% LFL in FY22. Geographically, revenue improvement was fueled by double-digit growth across nearly all EMEA markets, the doubling of sales in Travel Retail enabled by Coty's category expansion and premiumization strategy, double digit growth in Brazil which continues to successfully manage the highly inflationary environment, and continued momentum in the U.S.
E-commerce continued its strong performance, with double-digit sales growth in Q4 and FY22, supporting high teens e-commerce penetration for the year.
Coty's Prestige segment led during the quarter with reported sales growth of 16% versus the prior year and 23% growth on a LFL basis. Prestige fragrance sales remained robust, delivering another quarter of growth over 20% in Q4 and ahead of the overall category. Nearly all brands in the segment delivered robust double-digit growth, with particular strength from Hugo Boss, Burberry, Chloé, Calvin Klein, and Gucci Beauty. The performance was driven by the continued in-market success of Coty's FY22 fragrance innovations, including Burberry Hero and Burberry Her EDT, Hugo Boss The Scent Le Parfum and Boss Bottled Marine, and Gucci Flora Gorgeous Gardenia. Prestige cosmetics also continued to deliver strong double-digit growth in Q4.
Consumer Beauty revenue rose 3% as reported and 7% LFL in Q4, with growth across all product categories and nearly all key brands. During the quarter, the total global mass beauty market increased at a mid-single-digit rate versus last year, while Coty outperformed the market and continued to gain share on a global basis. In fact, June marked the eighth consecutive month of market share growth, with the largest year-over-year increase in market share to date. Encouragingly, CoverGirl's share performance improved exiting the quarter, driven by the very strong in-market performance of the recently launched Exhibitionist Stretch & Strengthen Mascara and as its temporary supply constraints on key products subsided. During June, Rimmel and Max Factor both gained global market share. Rimmel's performance was supported by the continued strength of its Kind & Free line of clean, vegan beauty, and Max Factor by the launch of its Miracle Pure skinified foundation and re-activation of its iconic franchises. Complementing the strength in its cosmetics category, Coty also gained share in bodycare and mass fragrances, led by key brands Bruno Banani, David Beckham, and Monange.
During Q4, Coty continued to generate very robust gross margin expansion, allowing for an increased level of media investment, in turn further fueling revenue and sell-out performance. In the quarter, reported gross margins increased by 140 bps YoY to 61.8%, while adjusted gross margin grew 120 bps YoY to 62.1%. For FY22, Coty delivered a reported gross margin of 63.5% and adjusted gross margin to 63.7%, a robust expansion of 370 bps YoY, even as inflationary headwinds worsened throughout the year to over 2% of revenues in Q4. Coty's Q4 gross margin improvement was driven by strong pricing and mix momentum in both Prestige and Consumer Beauty, divisional mixshift, and stronger absorption from volume growth.
Coty delivered Q4 reported operating loss of $77.4 million and adjusted EBITDA of $132.4 million. Coty delivered FY22 adjusted EBITDA of $905.3 million, slightly ahead of guidance of approximately $900M, reflecting 19% growth YoY. Driven by the strong profit expansion and significant improvement in Coty's capital structure - including a substantial reduction in convertible preferred stock and lower interest expense through our deleveraging efforts - Coty's reported FY22 EPS grew to $0.08 and adjusted FY22 EPS grew by 5x YoY to $0.28.
Financial Net Debt at the end of Q4 sequentially remained relatively stable at $4.3 billion and improved substantially by $0.9B versus the prior year through Coty's active deleveraging efforts, including free cash flow generation of $552.5 million. As a result, Coty's Q4 financial leverage ratio of 4.7x remained consistent with Q3, a decline of over 2 turns versus the prior year. During the year, Coty received multiple ratings upgrades from the leading rating agencies, reflecting its strong progress in strengthening its balance sheet. At quarter end and based on Coty's methodology, Coty's Wella Company stake was valued at approximately $0.8 billion, reflecting Wella's exit from Russia as well as the market driven increase in the discount rate. At the same time, Wella continues to perform ahead of plan and with Wella having recently completed the acquisition of a high growth haircare company, Coty would expect this to drive value expansion in Wella over time. Factoring in the retained Wella stake, Coty's Economic Net Debt totaled approximately $3.4 billion.
Commenting on the operating results, Sue Y. Nabi, Coty's CEO, said:
"Today marks the end of another successful year at Coty as we continued to make significant progress strategically, operationally, and financially. We have also demonstrated the sustainability of Coty's turnaround in the business by delivering eight consecutive quarters of results in-line to ahead of expectations. While the external environment became increasingly complex through the year, Coty proved resilient through operational excellence that enabled us to surpass our guidance and deliver double-digit sales and EBITDA growth. We have generated sales growth in both Q4 and FY22 that is well above the underlying beauty market and among the best in our competitive set.
While macro concerns continue to dominate headlines, it's important to remember that beauty is amongst the most resilient discretionary categories. It is upon us and our peers to inspire consumers and create new demand through innovative products, new looks, and disruptive campaigns. We therefore remain committed to protecting our media investments going forward. In this context, Coty's presence in both premiumized mass beauty and prestige beauty is a crucial asset in the current macroeconomic environment.
I am also pleased to say that we continued to make strong progress across each of our strategic pillars. Starting with Consumer Beauty, the business continued to gain market share globally during Q4, marking eight consecutive months of expanding market share. This momentum was supported by the re-positioning of our key brands, including CoverGirl, Rimmel, and Max Factor. Importantly, we are just getting underway with the repositioning of Adidas, and I look forward to sharing these results with you in the coming quarters.
Our Prestige fragrance business continued to deliver outstanding growth, increasing 18% as reported and 26% LFL during the quarter, supported by robust category trends, which remain nicely above pre-pandemic levels, coupled with the success of our recent innovations. Encouragingly, we made additional progress expanding into Prestige cosmetics and have plenty of white space to build out both distribution and product portfolios for each of our brands.
We continued building out our skincare business in Q4, and remain well-positioned as we enter FY23. In the quarter, Lancaster was the #2 exclusive brand at Sephora China, and was #3 amongst niche skincare brands in key Hainan retailers. In June, we launched SKKN by Kim and have been pleased to see revenues coming in ahead of plan.
For our fourth strategic pillar, Digital, the momentum continued through the quarter with e-commerce sales increasing at a mid-teens pace, supported by our efforts across livestreaming and social commerce, TikTok activations, virtual try-on capabilities, and an expanded e-commerce presence.
Progress on our fifth strategic pillar, expanding our presence in China, was impacted by the resurgence of COVID and related restrictions during much of the quarter. However, I am pleased to say Coty's Prestige sell-out grew double digits in FY22, far ahead of the market which declined modestly.
Finally, we made strong strides in our sixth strategic pillar, sustainability, with multiple innovations, including clean formulations, more sustainable packaging, and animal friendly. We took upcycling to the next level through our partnership with LanzaTech by beginning to manufacture prestige fragrances utilizing carbon-capture based ethanol, which is the #1 ingredient in fragrances.
With continued momentum in the fragrance category, Europe and global travel retail, and a strong pipeline of innovation, we expect FY23 to be a year of continued expansion, in-line with our medium-term growth targets. At the same time, we remain vigilant in monitoring the ever-evolving macro backdrop, with resilience plans developed to support the business should conditions worsen.
In summary, our balanced portfolio, covering key categories, channels, price tiers, and geographies; our portfolio of iconic key brands which continue to solidify their positionings and gain share; and our substantial white space opportunities in skincare, China and Travel Retail, all reinforce Coty's attractive value proposition in the historically resilient beauty market. Our virtuous cycle will only further strengthen the Company, allowing for continued above-market sales growth and gross margin expansion, resulting in fuel for brand reinvestment, profit improvement, and further deleveraging. We remain committed to growing Coty's position as a true beauty powerhouse."
*Adjusted financial metrics used in this release are non-GAAP. See reconciliations of GAAP results to Adjusted results in the accompanying tables. |
|
E-commerce revenues and penetration cover the vast majority of Coty’s markets and exclude certain markets like Travel Retail in EMEA and Americas. Additionally, the data includes estimated data for Brick and Click sales, which may be subject to change. |
Highlights
Outlook
Entering 1Q23, Coty continues to see prestige fragrance market momentum globally, coupled with strong demand growth particularly in Europe, global Travel Retail, Middle East & Africa, and Brazil. The combination of this market backdrop, and Coty's strong launch pipeline in both Prestige and Consumer Beauty, are fueling the Company's expectations for FY23 for the core business, adjusting for the impact of the Russia exit, to grow relatively in-line with its medium-term growth algorithm, including 6-8% LFL revenue growth. Based on current exchange rates, the Company anticipates FX headwinds on revenues in FY23 to be 4-5%.
Coty is targeting FY23 adjusted EBITDA of $955-965M based on current FX rates, relatively in-line with its medium term growth target of +9-11%, adjusting for the impact of the Russia exit.
Coty expects FY23 adjusted EPS growth in the mid-teens, which assumes no significant changes in the current tax regulations or any mark-to-market adjustments on the equity swap. The Company anticipates adjusted EPS growth acceleration in FY24 and beyond fueled by lower interest expenses as part of its deleveraging efforts, consistent with its medium-term targets.
1Q23 and 1H23 revenue and EBITDA growth trends are expected to be in-line with the annual growth targets. 1H23 sales results will include the impact from exiting the Russia business, estimated at 2-3% of revenues, as well as estimated FX headwind on sales of 4-6% at current rates.
In addition, the Company continues to target leverage towards 4x exiting CY22 based on CY22 adjusted EBITDA approaching $950M, and continues to expect leverage of approximately 2x exiting CY25.
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:
Gross Margin:
Operating Income and EBITDA:
Net Income from continuing operations attributable to common shareholders:
Earnings Per Share (EPS) - diluted:
Operating Cash Flow:
Financial Net Debt:
Fourth Quarter Business Review by Segment*
Prestige
In 4Q22, Prestige net revenues of $662.8 million or 57% of Coty sales, increased by 16% versus the prior year. On a LFL basis, Prestige net revenues delivered robust growth of 23%, driven by growth across all regions, with particular strength across all EMEA markets, Travel Retail, and the U.S. For FY22, Prestige net revenues of $3,267.9 million rose 20% from the prior year and increased 22% LFL.
During Q4, the Prestige fragrance category continued to see robust growth across North America and Europe, increasing approximately 20% versus last year, with all major markets generating double-digit growth. Encouragingly, Coty's fragrance sales outperformed the market during the quarter. Coty's robust fragrance performance was broad-based across its key fragrance brands with particular strength from Hugo Boss, Burberry, Chloe, Calvin Klein, and Gucci. Importantly, many of Coty's recent key fragrance innovations continued to generate very strong sell-out results and remain top innovations in many key markets.
Coty continued to make progress further expanding into Prestige cosmetics and skincare during the quarter. Prestige cosmetics sales rose strong double-digits during the quarter, and were up over 70% during FY22. In skincare, Lancaster delivered double-digit growth in Q4 and FY22.
The Prestige segment generated a reported operating income of $9.7 million in 4Q22, compared to a loss of $17.6 million in the prior year. The 4Q22 adjusted operating income was $47.9 million, up from an adjusted operating income of $32.3 million in the prior year, driven by strong gross margin improvement, partially offset by higher A&CP expenses. Adjusted EBITDA for the Prestige segment rose to $78.9 million from $67.4 million in the prior year, with a margin of 11.9%. FY22 reported operating income of $367.2 million compared to $158.1 million in the prior year, while the adjusted operating income increased to $530.1 million from $359.3 million. The FY22 adjusted EBITDA rose 33% to $668.8 million with a margin of 20.5%.
Consumer Beauty
In 4Q22, Consumer Beauty net revenues of $505.5 million, or 43% of Coty sales, increased by 3.0% versus the prior year. On a LFL basis, Consumer Beauty net revenues rose 7% with growth across color cosmetics, mass fragrances, body care, and skincare. Importantly, all regions generated LFL growth in the quarter. For FY22, Consumer Beauty sales of $2,036.5 million increased 7% and rose 8% LFL.
The total Coty Consumer Beauty business continued to gain market share globally during Q4, driven by the strong performance of color cosmetics, which has increased share globally for 8 consecutive months. In the U.S., CoverGirl trends improved through the quarter as the temporary supply constraints subsided, and the brand saw particular strength with its recently launched Exhibitionist Stretch & Strengthen mascara. In Europe, Coty gained market share for the eighth consecutive month in June, supported by the re-positionings of Rimmel and Max Factor. While Sally Hansen gained market share in U.S. Nail Color and expanded internationally, sales were impacted by the year-over-year declines in the broader nail category due to the difficult comparisons in the previous year.
The Consumer Beauty business reported operating loss was $24.8 million in 4Q22, down from reported operating income of $1.1 million in the prior year. The 4Q22 adjusted operating income of $17.2 million increased from $13.0 million in the prior year, driven by lower depreciation. During the quarter, adjusted EBITDA declined slightly to $53.5 million from $60.1 million in the prior year, with a margin of 10.6%. FY22 reported operating income of $9.5 million compared to $26.9 million in the prior year, while adjusted operating income increased to $85.4 million from $76.9 million. FY22 adjusted EBITDA decreased 8% to $236.5 million, with a margin of 11.6%.
Fourth Quarter Fiscal 2022 Business Review by Region*
Americas
EMEA
Asia Pacific
*As previously disclosed, we have realigned our reportable segments to a principally product category-based structure, comprised of a Prestige business segment and a Consumer Beauty business segment. In addition, we have amended the definition of stock compensation expense for use in certain Non-GAAP Financial Measures. In order to reflect these changes, the Company has recast reported net revenue by segment, reported operating income (loss) by segment, adjusted operating income (loss) by segment and total, adjusted EBITDA by segment, and total adjusted income (loss) before income taxes and total adjusted net income (loss) from continuing operations for all comparative periods shown. |
Noteworthy Company Developments
Other noteworthy company developments include:
Conference Call
Coty Inc. will issue pre-recorded remarks at approximately 7:20 AM (ET) today, August 25, 2022 and will hold a live question and answer session beginning at 8:15 AM (ET). 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 (800) 579-2543 in the U.S. or (785) 424-1789 internationally (conference passcode number: COTY4Q22).
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 approximately 125 countries and territories. Coty and our brands empower people to express themselves freely, creating their own visions of beauty; and we are committed to making a positive impact on 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, the impact of COVID-19 and potential recovery scenarios, 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 wind down of the Company’s operations in Russia (including timing and expected impact), the Company’s future operations and strategy (including the expected implementation and related impact of its strategic priorities), ongoing and future cost efficiency, optimization and restructuring initiatives and programs, strategic transactions (including their expected timing and impact), expectations and/or plans with respect to joint ventures (including Wella Company and the timing and size of any related 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), 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, including the strategic partnerships with Kylie Jenner and Kim Kardashian West, 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 transformation agenda (including operational and organizational structure changes, operational execution and simplification initiatives, fixed cost reductions and supply chain changes), 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 expected impact of geopolitical risks including the ongoing war in Ukraine 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 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:
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, 2022 and annual report on Form 10-K for the year ended June 30, 2022 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
The Company operates on a global basis, with the majority of net revenues generated outside of the U.S. Accordingly, fluctuations in foreign currency exchange rates can affect results of operations. Therefore, to supplement financial results presented in accordance with GAAP, certain financial information is presented excluding the impact of foreign currency exchange translations to provide a framework for assessing how the underlying businesses performed excluding the impact of foreign currency exchange translations (“constant currency”). Constant currency information compares results between periods as if exchange rates had remained constant period-over-period, with the current period’s results calculated at the prior-year period’s rates. The Company calculates 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 constant 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. The constant currency information presented may not be comparable to similarly titled measures reported by other companies. The Company discloses the following constant currency financial measures: net revenues, organic like-for-like (LFL) net revenues, adjusted gross profit and adjusted operating income.
The Company presents period-over-period comparisons of net revenues on a constant currency basis as well as on an organic (LFL) basis. The Company believes that organic (LFL) better enables management and investors to analyze and compare the Company's net revenues performance from period to period. For the periods described in this release, the term “like-for-like” describes the Company's core operating performance, excluding the financial impact of (i) acquired brands or businesses in the current year period until we have twelve months of comparable financial results, (ii) the divested brands or businesses or early terminated brands, generally, in the prior year non-comparable periods, to maintain comparable financial results with the current fiscal year period and (iii) foreign currency exchange translations to the extent applicable. For a reconciliation of organic (LFL) period-over-period, see the table entitled “Reconciliation of Reported Net Revenues to Like-For-Like Net Revenues”.
The Company presents operating income, operating income margin, gross profit, gross margin, effective tax rate, net income, net income margin, net revenues, EBITDA, and EPS (diluted) on a non-GAAP basis and specifies that these measures are non-GAAP by using the term “adjusted” (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.
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:
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 Company 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").
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(a) | ||||||||||||||||||
RESULTS AT A GLANCE | ||||||||||||||||||
|
| Three Months Ended June 30, 2022 | Year Ended June 30, 2022 | |||||||||||||||
(in millions, except per share data) |
|
|
| Change YoY |
|
| Change YoY | |||||||||||
CONTINUING OPERATIONS |
|
|
| Reported Basis |
| (LFL) |
|
| Reported Basis |
| (LFL) | |||||||
Net revenues |
| $ | 1,168.3 |
|
| 10 | % |
| 16 | % | $ | 5,304.4 |
| 15 | % |
| 16 | % |
Operating income - reported |
|
| (77.4 | ) |
| 100 | % |
|
| |||||||||
Operating income - adjusted* |
|
| 65.1 |
|
| 44 | % |
|
|
| 615.5 |
| 41 | % |
|
| ||
EBITDA - adjusted |
|
| 132.4 |
|
| 4 | % |
|
|
| 905.3 |
| 19 | % |
|
| ||
Net income (loss) attributable to common shareholders - reported** |
|
| (286.0 | ) |
| (29 | %) |
|
|
| 55.5 |
| >100 | % |
|
| ||
Net income (loss) attributable to common shareholders - adjusted* ** |
|
| (5.7 | ) |
| 91 | % |
|
|
| 232.1 |
| >100 | % |
|
| ||
EPS attributable to common shareholders (diluted) - reported |
| $ | (0.34 | ) |
| (26 | %) |
|
| $ | 0.07 |
| >100 | % |
|
| ||
EPS attributable to common shareholders (diluted) - adjusted* |
| $ | (0.01 | ) |
| 88 | % |
|
| $ | 0.28 |
| >100 | % |
|
| ||
|
|
|
|
|
|
|
|
|
|
|
| |||||||
COTY, INC. |
|
|
|
|
|
|
|
|
|
|
| |||||||
Net income (loss) attributable to common shareholders - reported ** |
|
| (284.8 | ) |
| (35 | %) |
|
|
| 61.2 |
| >100 | % |
|
| ||
Net income (loss) attributable to common shareholders - adjusted* ** |
|
| (5.7 | ) |
| 91 | % |
|
|
| 232.1 |
| 28 | % |
|
| ||
EPS attributable to common shareholders (diluted) - reported |
| $ | (0.34 | ) |
| (26 | %) |
|
| $ | 0.08 |
| >100 | % |
|
| ||
EPS attributable to common shareholders (diluted) - adjusted* |
| $ | (0.01 | ) |
| 88 | % |
|
| $ | 0.28 |
| 17 | % |
|
| ||
* These measures, as well as “free cash flow,” “adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA),” "immediate liquidity," “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 Continuing Operations and Coty Inc. are net of the Convertible Series B Preferred Stock dividends. |
FOURTH QUARTER BY SEGMENT (CONTINUING OPERATIONS)
|
| Three Months Ended June 30, |
|
| ||||||||||||||||||||
|
| Net Revenues |
| Change | Reported Operating Income (Loss) |
| Adjusted Operating Income | |||||||||||||||||
(in millions) |
| 2022 |
| 2021 |
| Reported Basis |
| LFL |
| 2022 |
| Change |
| Margin |
| 2022 |
| Change |
| Margin | ||||
Prestige |
| $ | 662.8 |
| $ | 571.3 |
| 16% |
| 23% |
| $ | 9.7 |
| >100% |
| 1 % |
| $ | 47.9 |
| 48% |
| 7% |
Consumer Beauty |
|
| 505.5 |
|
| 491.1 |
| 3% |
| 7% |
|
| (24.8) |
| 100% | |||||||||
Convertible Series B Preferred Stock dividends (c) |
| (3.3 | ) |
|
| (24.2 | ) |
| 86% |
| (198.3 | ) |
|
| (102.3 | ) |
| (94)% | ||||||
Reported Net income (loss) attributable to Continuing Operations | $ | (286.0 | ) |
| $ | (221.1 | ) |
| (29%) | $ | 55.5 |
|
| $ | (166.3 | ) |
| >100% | ||||||
% of Net revenues |
| (24.5 | %) |
|
| (20.8 | %) |
|
|
| 1.0 | % |
|
| (3.6 | )% |
|
| ||||||
Adjustments to Reported Operating Income (a) |
| 142.5 |
|
|
| 43.5 |
|
| >100% |
| 374.6 |
|
|
| 484.8 |
|
| (23%) | ||||||
Change in fair value of investment in Wella Business (d) |
| 175.1 |
|
|
| (10.0 | ) |
| >100% |
| (403.9 | ) |
|
| (73.5 | ) |
|