Coty keen to attract European investors

On Thursday July 6, two months after announcing it is considering a dual listing on the Paris Stock Exchange, US cosmetics group Coty, which is already listed in New York, staged its first press conference in the French capital, addressing journalists and, primarily, potential European investors. Speaking at the conference, Sue Nabi, Coty’s managing director, and Laurent Mercier, the CFO, presented the group’s latest results, its main assets and future plans. The group’s brand portfolio includes Gucci, Kylie Cosmetics and Lancaster. Coty was founded in Paris in 1904, and next year will celebrate its 120th anniversary.

“We’re still exploring this dual listing idea. Coty’s heritage has very strong links with Paris, a city that holds a prime position in luxury and beauty, two sectors in which the Coty group is operating. We’re keen to add to our pool of potential investors. And, let’s be pragmatic, there is interest. Currently, 30% of our investors are based in Europe, a figure that has risen by 10%,” said Nabi, who has given new impetus to Coty since she joined the group in 2020.

However, Nabi said that, for the time being, no date for the listing has been set, and the conditions haven’t yet been defined. “We’ll have a clearer idea in the next few months,” she added.

In the presentation, Nabi and Mercier emphasised Coty’s main asset: a well-balanced, diversified brand portfolio. In 2022, Coty generated a revenue of €5.3 billion, and its portfolio includes 50 brands (among them CoverGirl, Bourjois, Max Factor, Rimmel, and Lancaster), of which 35 are under licence (Gucci, Chloé, Marc Jacobs, Hugo Boss and others), with an average licence term of 10 years.

Asked about the Gucci licence, which Kering is said to be considering taking over internally, Nabi answered “Let’s talk about facts. None of our licences will expire before five years, and there is no possibility of an early exit. We have a very good relationship with the people at Gucci, but we need to emphasise the fact that Coty’s growth is well-balanced, and even if a brand were to exit, there would be no impact on the group’s growth algorithm.”

In fiscal 2022-23, which ended on June 30, the Coty group’s revenue increased by between 10% and 11%, exceeding the previous forecast of 9%-10%, and the group is predicting a 6% to 8% growth until 2026.

For the years to come, Coty is relying chiefly on expanding in China, given that sales in the country only account for 4% of the group’s revenue. Coty’s ambitious plan is to double its revenue in China by 2026, reaching $600 million (€552 million), relying primarily on the skincare category. Last March, the group re-launched a new version of Lancaster’s Ligne Princière line. Coty is also planning to accelerate in travel retail, which currently accounts for 8% of its revenue. The goal is to reach $600 million by 2026, which would be equivalent to a 50% increase. Finally, the group is also keen to grow in the prestige fragrance segment, in which it will launch the Infiniment Coty line in 2024, hailed as “the perfume brand with the most patents worldwide.”

With regards to potential acquisitions to complete the group’s brand portfolio, Nabi said that “in the last two years, we have beefed up our existing portfolio, and we’re heading in the right direction,” although she didn’t rule out evaluating the potential future acquisition of a new brand or licence.