Top Companies Report

8. Coty

July 1, 2015

New York, NY
212.479.4300
www.coty.com

Sales: $4.5 billion, for the year ended June 30, 2014.

Key Personnel: Bart Becht, chairman and interim chief executive officer; Patrice de Talhouët, executive vice president and chief financial officer; Mario Reis, executive vice president, supply chain; Jean Mortier, president, global markets; Ralph Macchio, senior vice president, global R&D and chief scientific officer.

Major Products: Fragrances, skin care, color cosmetics. Brands include Adidas, Calvin Klein, Chloe, Davidoff, Marc Jacobs, OPI, Philosophy, Playboy, Rimmel and Sally Hansen.

New Products: Fragrances—Katy Perry Killer Queen, Ultrasense White by Jil Sander, Marc Jacobs Mod Noir, Philosophy Live Joyously, Reveal Calvin Klein, Daisy Marc Jacobs Sorbet, Roberto Cavali Oud al Qasr, Jeremy Scott for Adidas, Bottega Veneta pour home Extrême, Daisy Dream, Vespa for Her and for Him; Color Cosmetics—Sally Hansen Miracle Gel Top Coat and Insta-Dri nail colors, OPI Aloha Hawaii Collection, Bourjois color cosmetics (acquisition); Skin Care—Philosophy Renewed Hope in a Jar. To be launched: Marc Jacobs Decadence fragrance (October).

Comments: As this issue went to press, the industry was waiting for the official word that Coty was the big winner in the Procter & Gamble Sell-Off Sweepstakes. Although neither party would confirm it at press time, Coty reportedly agreed to pay $12 billion for Max Factor, Cover Girl and Wella.

There was other news coming from Coty’s corporate office as this issue went to press; Elio Leoni Sceti, who had been ready to take over as CEO, decided to not take on the role he was scheduled to start in July. Sceti was hired in April to replace Michele Scannavini who resigned in September for personal reasons.

Bart Becht—who is now interim CEO as well as chairman—has been steering Coty through an efficiency program in an effort to improve the bottom line. But these things take time. Through nine months March 31, 2015, sales fell 4% to $3.3 billion. But Becht seems undeterred, noting that Q3 was just the second quarter of Coty’s new strategy.

“We have made excellent progress in driving profit growth behind efficiency programs, as shown by the 24% growth in Q3 adjusted operating profits,” Becht enthused. “As our success in this area is very good, we will be looking to increase the $200 million target for our Global Efficiency Plan.”

In fiscal 2014, sales fell 2% to $4.5 billion. Unit volume fell 3%, but was partially offset by positive price and mix. At the end of the fiscal year, Coty eliminated the TJoy brand and the reorganized its mass business in China. New launches represented 15% of net revenue during the year. The contribution from new launches was partially offset by an approximate 16% decline in net revenues from existing products that are later in their life cycles.

Coty calls itself the No. 2 player in the global fragrance market and fragrances accounted for 55% of sales, followed by color cosmetics (30%) and skin care (15%).

In fiscal 2014, Coty manufactured 75% of its fragrances, with Europe, Middle East and Africa accounting for 54% of sales, followed by the Americas (30%) and Asia Pacific (16%). Top fragrance brands by percentage of net revenues are Calvin Klein, Marc Jacobs, Davidoff, Playboy and Chloé.

Coty says it is the No. 2 player in the global nail care segment and “emerging leader” in color cosmetics, ranking No. 5 globally and No. 3 in the North American and European mass market. Its top color cosmetics brands are Rimmel, Sally Hansen and OPI.
On April 1, Coty closed the Bourjois acquisition, noting that the firm’s strength in key European color cosmetics markets is complementary to Coty’s existing color portfolio.

Skin and body care sales, where Coty has three main brands (Adidas, Lancaster and Philosophy), were essentially flat. 
By region, Europe, the Middle East and Africa accounted for 50% of sales last year, followed by the Americas (38%) and Asia Pacific (12%). Sales in the Americas fell 11% due to a decline in sales of Sally Hansen, OPI and fragrances, particularly older fragrances like Playboy, Chloé, Calvin Klein and Davidoff.

EMEA results were better, as sales increased 5%, driven by gains in the UK, Eastern Europe and the Middle East. During the year, Coty formed a joint venture in the UAE and established a South African subsidiary, which is part of the company plan to expand into emerging markets. Better UK sales reflected incremental net revenues from OPI resulting from the acquisition of a UK distributor and from Katy Perry Killer Queen as well as growth from David Beckham and Rimmel.

Sales in Asia Pacific fell less than 1%, but Coty noted that excluding the impact of reorganization of its China business and foreign currency exchange translations, net revenues in increased 7%. 
  • It’s Magic!

    It’s Magic!

    Melissa Meisel, Associate Editor||March 20, 2017
    Argan oil-infused ‘Moroccan’ lip care brand jumps from WholeFoods into CVS.

  • On the Cutler Edge

    On the Cutler Edge

    Melissa Meisel, Associate Editor||March 13, 2017
    Top brand source at Redken forecasts up-to-the-minute hair trends.

  • Take The Hint

    Take The Hint

    Christine Esposito, Associate Editor||March 13, 2017
    Water brand forays into sun protection by capitalizing on scent and experience.

  • Supply-Side Innovations

    Supply-Side Innovations

    Tom Branna, Editorial Director||March 1, 2017
    Raw material suppliers roll up their sleeves and roll out their new products for the global cleaning industry.

  • New Faces in Familiar Places

    New Faces in Familiar Places

    Tom Branna, Editorial Director||March 1, 2017
    The American Cleaning Institute officially welcomed its new president.

  • Special Delivery

    Special Delivery

    Tom Branna, Editorial Director||March 1, 2017
    UV protection is important, but what good is that sunscreen if consumers won’t apply it?

  • Garden Variety

    Garden Variety

    Melissa Meisel, Associate Editor||March 1, 2017
    Color cosmetics for Spring 2017 are inspired by the beauty of nature and new beginnings.

  • OTC = TLC

    OTC = TLC

    Christine Esposito, Associate Editor||March 1, 2017
    Over-the-counter treatments provide consumers’ skin and hair with extra care.

  • The Green Dot

    The Green Dot

    John Kim and Lambros Kromidas, PhD*, Shiseido Americas||March 1, 2017
    Insights into one of the most used trademarks in the world.

  • An Essential Read

    An Essential Read

    Tom Branna, Editorial Director||March 1, 2017
    Industry expert Nadim Shaath takes the reader on a fascinating journey through the history and the future of essential oils.

  • Sustainability, Brexit and AI Are in Focus at In-Cosmetics

    Sustainability, Brexit and AI Are in Focus at In-Cosmetics

    March 1, 2017
    In-Cosmetics Global 2017 will take place in London, April 4-6, 2017

  • Trade Association Directory 2017

    February 2, 2017
    Contact details of trade associations that serve various segments of our industry and are mentioned frequently in Happi.

  • What the Halal  Is Going On?

    What the Halal Is Going On?

    Imogen Matthews , In-Cosmetics||February 2, 2017
    Demand for these beauty products is surging thanks to a fastgrowing Muslim population.

  • Relief for Sensitive Scalps

    Relief for Sensitive Scalps

    Guadalupe Pellon and Annette Mehling , BASF||February 2, 2017
    BASF researchers detail the attributes of the company’s highly effective hair care system focusing on scalp sensitivity.

  • What’s in Style?

    What’s in Style?

    Melissa Meisel , Associate Editor||February 1, 2017
    The latest sprays, gels, mousses, serums and creams for hair are filled with luxury components and meet a variety of needs

  • Defining Clean Skin

    Defining Clean Skin

    Nava Dayan PhD, Dr. Nava Dayan LLC||February 1, 2017
    A look at the issues, research and history surrounding this controversial topic.

  • Linked In

    Linked In

    Christine Esposito , Associate Editor||February 1, 2017
    Through virtual reality, apps and connected devices, beauty and personal care brands can strengthen their customer relations

  • Hitting the Right Notes

    Hitting the Right Notes

    January 6, 2017
    Agilex Fragrances is the leader in the middle market fragrance category.

  • The Smell of Clean in 2017

    The Smell of Clean in 2017

    January 6, 2017
    Changing consumer lifestyles and demographics are impacting the scents found in the household cleaning category.

  • On the Edge

    On the Edge

    January 6, 2017
    Expanding beauty brands to watch in 2017

  • A New Contender?

    A New Contender?

    January 6, 2017
    Detergent sales are up, innovation continues and Henkel is determined to make it a dogfight in the segment.

  • Engagement 2016

    Engagement 2016

    January 6, 2017
    CSPA convenes in Fort Lauderdale for annual meeting.

  • Slow & Steady

    Slow & Steady

    Tom Branna, Editorial Director||December 1, 2016
    In a tumultuous environment, steady gains posted in the industrial and institutional cleaning sector are welcomed.

  • The World Comes to Orlando

    The World Comes to Orlando

    Tom Branna, Editorial Director||December 1, 2016
    More than 1,600 chemists traveled to Florida for the IFSCC Congress

  • The Plex Phenomenon

    The Plex Phenomenon

    Denise Costrini, Croda North America||December 1, 2016
    Croda details the hair-protecting qualities of bond multipliers and the company’s new bond-building formulation system.

  • New Hair Care Ingredients

    December 1, 2016
    Check out the latest releases from suppliers.

  • Hair & Now

    Hair & Now

    Melissa Meisel, Associate Editor ||December 1, 2016
    The shampoo and conditioner category is expanding with modern takes on these classic formulations.

  • Perform or Perish

    Perform or Perish

    Christine Esposito, Associate Editor||December 1, 2016
    Success in today’s skin care sector begins with active ingredients, formulated in products that address modern-day issues.