Coty Enters Strategic Partnership with Burberry, Acquiring Exclusive Long-Term License Rights for Burberry Beauty Luxury Fragrances and Cosmetics

Strategic Partnership To Enhance Coty’s Global Position in Luxury Fragrances and Expand its Presence in Luxury Cosmetics

NEW YORK--()--Coty Inc. (NYSE:COTY) announced today that it has entered into an agreement to acquire the exclusive long-term global license rights for Burberry Beauty luxury fragrances, cosmetics and skincare. This strategic partnership combines Burberry’s British heritage of innovation, craftsmanship and design with Coty’s expertise and leadership in luxury beauty products. Under the agreement, Coty will develop, manufacture and distribute the full range of Burberry Beauty products globally.

Camillo Pane, CEO Coty, said, “We are proud to welcome Burberry as a strategic partner of Coty. We look forward to growing further Burberry’s luxury beauty products using Coty’s world-class expertise in developing and bringing to market beauty brands.”

Edgar Huber, President Coty Luxury, added, “Burberry is an iconic luxury brand. It fits perfectly with Coty Luxury’s portfolio, which includes contemporary and globally relevant prestige beauty brands. We are uniquely positioned to develop Burberry Beauty to the next level. This is another significant step in building Coty’s Luxury division.”

Commenting on the strategic partnership, Christopher Bailey, Chief Creative and Chief Executive Officer, Burberry, said, “We are delighted to partner with Coty, a world leader in luxury fragrance and make-up. Working with a global partner of Coty’s scale and expertise will help drive the next phase of Burberry Beauty’s development and position this business for growth.”

The Burberry Beauty business will be managed within Coty’s Luxury division, which is the world leader in prestige fragrance with a growing presence in prestige cosmetics and skincare. Headquartered in Paris, Coty Luxury develops, produces, markets and distributes globally a range of fashion house fragrances including Gucci, Marc Jacobs, Hugo Boss, Calvin Klein, Alexander McQueen, Bottega Veneta and Balenciaga, as well as premium cosmetics and skin care under the philosophy, Lancaster and Gucci brands. Both Coty and Burberry share strong heritages, which date back to 1856 for Burberry and 1904 for Coty. Both are renowned for innovation in their fields.

Coty and Burberry will work in partnership on delivering best-in-class creative executions and leverage Coty’s global capabilities in beauty strategy, innovation, supply-chain and go-to-market. Burberry beauty products will be sold in leading luxury beauty retailers globally as well as in Burberry stores and digital channels.

In FY 2015/16 Burberry Beauty revenue was £203M, as disclosed in Burberry’s annual results. Coty will pay a cash consideration of £130M for the long-term exclusive global license.

The deal is expected to close in calendar Q4 2017, at which point Coty will buy from Burberry approximately £50M of inventory. The deal is subject to customary regulatory approvals.


About Coty Inc.
Coty Inc. is one of the world’s largest beauty companies with approximately $9 billion in revenue, with a purpose to celebrate and liberate the diversity of consumers’ beauty. Its strong entrepreneurial heritage has created an iconic portfolio of leading beauty brands. Part of the S&P 500, Coty is the global leader in fragrance, a strong number two in professional salon hair color & styling, and number three in color cosmetics. Coty operates three divisions – Coty Consumer Beauty, which is focused on color cosmetics, retail hair coloring and styling products, body care and mass fragrances sold primarily in the mass retail channels with brands such as COVERGIRL, Max Factor and Rimmel; Coty Luxury, which is focused on prestige fragrances and skincare with brands such as Calvin Klein, Marc Jacobs, Hugo Boss, Gucci and philosophy; and Coty Professional Beauty, which is focused on servicing salon owners and professionals in both hair and nail, with brands such as Wella Professionals, OPI, ghd and Sebastian Professional. Coty also has a 60% ownership of Younique the fast-growing peer to peer social selling international beauty ecommerce business. Coty has over 20,000 colleagues globally and its products are sold in over 130 countries. Coty and its brands are committed to a range of social causes as well as seeking to minimize its impact on the environment. Coty was founded in 1904.

For additional information about Coty Inc., please visit www.coty.com.


About Burberry
Established in 1856, Burberry is a global British luxury brand with a heritage of innovation, craftsmanship and design. The Burberry business comprises 5 divisions: mens, womens, childrens, accessories and beauty. Burberry has launched award-winning luxury fragrances such as My Burberry and Mr Burberry, redeveloped and relaunched make-up, and boosted sales of new luxury fragrances in key markets. Burberry is headquartered in London and listed on the London Stock Exchange (BRBY.L) Burberry is a constituent of the FTSE 100 index

Visit www.Burberry.com for further information.

Forward-Looking Statements
Certain statements in this communication are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Coty Inc.’s (“Coty’s”) current views with respect to, among other things, the consummation of the transactions with Burberry (the “Transactions”), the future performance and expected growth of Burberry Beauty and Coty and its luxury fragrance portfolio, and Coty’s ability to support its planned business operations on a near- and long-term basis. These forward-looking statements are generally identified by words or phrases, such as “anticipate”, “estimate”, “plan”, “project”, “expect”, “believe”, “intend”, “foresee”, “forecast”, “look forward”, “will”, “may”, “should”, “outlook”, “continue”, “target”, “aim” and similar words or phrases. These statements are based on certain assumptions and estimates that Coty considers reasonable and are subject to a number of risks and uncertainties, many of which are beyond the control of Coty, which could cause actual events or results to differ materially from such statements, including:

  • Coty’s ability to achieve its global business strategy, compete effectively in the beauty industry and achieve the benefits contemplated by the transaction with Burberry within the expected time frame;
  • inherent risks associated with licenses generally and the Transactions specifically, including relating to control and decision-making and restrictions on Coty generally and Burberry Beauty specifically, including potential loss of the cash consideration under certain circumstances;
  • managerial, integration, operational, regulatory, legal and financial risks and expenses associated with Coty’s strategic transactions and internal reorganizations generally and the Transactions specifically;
  • Coty, its other brand partners and licensors’, and Burberry’s ability to obtain, maintain and protect their respective intellectual property rights, including trademarks, brand names and other intellectual property used in their respective businesses and products and Burberry Beauty and their abilities to protect their respective reputations and defend claims by third parties for infringement of intellectual property rights;
  • the distribution and sale by third parties of counterfeit and/or gray market versions of Coty’s products and Coty’s effectiveness in reducing such distribution and sale;
  • Coty’s and Burberry’s ability to anticipate, gauge and respond to market trends and consumer preferences, which may change rapidly, and the market acceptance of new products;
  • Coty’s ability to manage seasonal variability;
  • the integration of The Procter & Gamble Company’s global fine fragrances, salon professional, cosmetics and retail hair color businesses along with select hair styling brands with Coty’s legacy business, operations, systems, financial data and culture and the ability to realize synergies and other potential benefits within the time frames currently contemplated;
  • changes in law, regulations and policies that affect Coty’s business or products;
  • Coty’s ability to successfully execute its announced intent to divest or discontinue non-core brands and to rationalize wholesale distribution by reducing the amount of product diversion to the value and mass channels;
  • risks related to Coty’s international operations and joint ventures, including reputational, compliance, regulatory, economic and foreign political risks;
  • Coty’s dependence on certain licenses, entities performing outsourced functions and third-party suppliers, including third party software providers;
  • administrative, development and other difficulties in meeting the expected timing of market expansions, product launches and marketing efforts;
  • global political and/or economic uncertainties or disruptions;
  • increased competition, consolidation among retailers, shifts in consumers’ preferred distribution channels and other changes in the retail, e-commerce, and wholesale environment in which we do business and sell our products;
  • disruptions in operations, including due to disruptions or consolidation in supply chain, manufacturing rights or information systems, labor disputes and natural disasters;
  • Coty’s ability to attract and retain key personnel; and
  • other factors described elsewhere in this document and from time to time in documents that Coty files with the U.S. Securities and Exchange Commission (the “SEC”).

More information about potential risks and uncertainties that could affect the Coty’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 Coty’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2016 and other periodic reports Coty has filed and may file with the SEC from time to time.

All forward-looking statements made in this communication are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this communication, and Coty does not undertake any obligation, other than as may be required by 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.

Contacts

Coty
Investor Relations
Kevin Monaco, +1 212 389 6815 (New York)

Or

Media
Andraea Dawson-Shepherd, +44 20 3873 9587 (London) – ads@cotyinc.com
Arnaud Leblin, +33 6 80 35 06 60 (Paris) – Arnaud_Leblin@cotyinc.com
Jennifer Friedman, +1 917 754 8399 (New York) – Jennifer_Friedman@cotyinc.com

Contacts

Coty
Investor Relations
Kevin Monaco, +1 212 389 6815 (New York)

Or

Media
Andraea Dawson-Shepherd, +44 20 3873 9587 (London) – ads@cotyinc.com
Arnaud Leblin, +33 6 80 35 06 60 (Paris) – Arnaud_Leblin@cotyinc.com
Jennifer Friedman, +1 917 754 8399 (New York) – Jennifer_Friedman@cotyinc.com