Coty aims to double revenue to US$600M in FY25 by targeting skincare tech

22 Sep 2022 --- Coty is disclosing its strategy for doubling its skincare sales by the fiscal year 2025 (FY25). The company aims to do so by advancing its skincare technologies, investing and expanding its prestige brands, Kylie Skin, Skkn by Kim, Philosophy, Lancaster and Orveda.

“The company’s revenues are on track to double to US$500 to 600 million by FY25,” affirms Sue Y. Nabi, chief executive officer at Coty.

The company is targeting skincare technologies within five key areas and helping them thrive financially. The areas include full-light protection, oxygen delivery, retinol vectorization, DNA repair and bio-fermented blends.

Projected doubling numbers
The company is projecting 6 to 8% like-for-like (LFL) sales growth, 9 to 11% EBITDA growth, a low 20s EPS CAGR through FY25 and approximately two times leverage by the current yield (CY) 25.

According to Coty, this growth is predicted due to more robust beauty demand. It is set to raise its first quarter fiscal year 2023 LFL sales growth outlook to 8 to 9%, from the previous 6 to 8%.

Owners of celebrity skincare, Kylie Skin and Skkn, predict double earnings. Coty expects to double the revenues from FY22 to FY25, with further acceleration in FY26 and beyond, after adjusting for the impact of the Russian exit. In the past third quarter of FY22, the company reported US$459.8 million in net revenue.

Although many countries are facing economic uncertainty, Coty is still anticipating huge sales increases, even taking that into account. They have predicted an adjusted EBITDA of US$955 to 965 million adjusted EPS growth in the mid-teens percentage to US$0.32 to 0.33, and leverage toward four times exiting CY22.

Skincare technology
The company has been researching these skincare areas for several decades, with patents extending for the next five to ten years, giving them skincare intellectual property.

Coty attributes their growth to “75 years of scientific innovation and leadership, patents and intellectual property,” says Nabi.

“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,” adds Constantin Sklavenitis, chief prestige brands officer at Coty.

“This is critical confirmation that Coty has the technology, brands, strategic clarity and commercial capabilities to win in skin care in the coming years.”

He highlights that these statements are based on certain assumptions and estimates that Coty considers reasonable and are not guarantees of Coty’s future performance.

Earlier this year, Coty reported a solid third fiscal quarter fueled by the company’s Consumer Beauty and Prestige business segments.

Edited by Sabine Waldeck

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