Coty Inc. (COTY) Earnings Call Transcript & Summary

Hello, everyone, and welcome to Coty's Strategic Update Webcast. With us today, we have Sue Y. Nabi, Coty's Chief Executive Officer; and Laurent Mercier, Coty's Chief Financial Officer. [Operator Instructions] With that, let me turn it over to Sue and Laurent.

Good morning, good afternoon. Laurent Mercier, Coty's Chief Financial Officer; and myself are very happy to welcome you to this strategic update today. I'm very excited to be able to share with you our strategic plans, which really expands on the 5 core strategic pillars we have been discussing in the recent months. But at the same time, we've been moving incredibly fast to put our action plans in motion, and it's my pleasure to be able to share how our strategy is already coming to life in our core brands and core markets with some tangible operational improvements. While our focus today is on our multiyear strategy to accelerate growth, we expect to come back to you in the fall of this year as we plan a formal Investor Day, during which we will share more details on the strategy, more example of what's been accomplished and more granular financial targets. So Coty overview. Let me start first by giving you an overview of this company, both its rich heritage and what our company looks like today. As you can see, this is a quote from the last century by François Coty who said that creating the best products, presenting these products in a perfect container, beautifully simple but of impeccable taste, charge a reasonable price for it and you will witness a great business arise such as the world has never seen. So let's see what is Coty today. Coty today is a global leader in fragrance and color cosmetics with strong positions in key markets with a diverse brand portfolio. As you can see here, Coty is the #1 fragrance maker worldwide, is the #4 color cosmetics maker with revenues at the level of EUR 4.2 billion, #2 in America when it comes to prestige fragrances, #2 in the U.S. when it comes to mass cosmetics, same position in prestige fragrances in U.K., #1 in mass cosmetics in U.K., #1 in prestige fragrances in Germany, #4 in mass cosmetics, with a collection of a portfolio of iconic and modern brand across fragrances, cosmetics and skin care, as you can see at the bottom of the slide. Our sales are diversified across channels as you can see on this slide, with luxury representing almost half of our business; and mass beauty representing 36% of our business; and last but not least, e-commerce representing 17% in the first half of '21 fiscal year, reaching almost 19% on the last quarter of Q2. If you move now to the next slide, you'll see that this company is also diversified in terms of categories. As you can see here, the company is strongly rooted in prestige fragrances, 52% of the business. And then 1/4 of the business is rooted in mass cosmetics in Europe and in America. Prestige skin care is still small, and the room there is huge, 6%. Prestige cosmetics is only 3% of the company. Body care is 8% of the company, and mass fragrances represent 7% of the company. Now if we move to the geographical footprint. As you can see, this company is having a diversified sales, I would say, footprint worldwide with North America representing 1/3 of our sales; then, Western Europe representing almost 1/3 again of our sales; Eastern Europe and Middle East representing 18% of our sales; Latin America representing 8% of our sales; and last but not least, China only 3%; global travel retail, 3%. And this is clearly due to the loss of people traveling during fiscal '20 and fiscal '21, so this is clearly going to rebound quickly. China, 3%, as I said before; moreover, APAC representing 7%. So you can imagine where the growth potential is for a company like Coty. If you move to the next slide, you'll see that we have also a portfolio of iconic brands across key price tiers, moving from mass with brands such as COVERGIRL, Sally Hansen, Max Factor, adidas, David Beckham, Rimmel; to brands in the premium area of the business such as, of course, Lancaster, Marc Jacobs, philosophy, Calvin Klein, Hugo Boss, Kylie by Kylie Jenner, Lacoste; and of course, brands that are at the top of the pyramid in the prestige area such as Chloé, Burberry, Gucci or Bottega Veneta, to name a few. This company has also a long story of innovations, 116 years of innovations, first in fragrances and makeup. As you can see at the beginning of the last century, Coty and François Coty has been inventing the first fragrance mixing natural and synthetic components; the first company to invent the latest olfactive family ever invented, which is the chypre category; more recently, in the '80s, the invention of the first long-lasting cologne called Davidoff Cool Water, the first unisex fragrance under Calvin Klein with CK One; or in 2007, something that's really reinvented what it is to be a premium fragrance brand with Marc Jacobs Daisy that won all the prizes for its very unique packaging. This was in fragrances and makeup, but the story is almost the same when it comes to skin care. As you can see here, the company and some of the key brands of the company, mainly Lancaster on one side and a bit of COVERGIRL, have been inventing key categories of the beauty business of today. As you can see here on this slide, in 1961, so 60 years ago, COVERGIRL invented what we call today clean beauty, clean makeup. It launched the first medicated foundation, mixing a makeup foundation and on the other side, Noxzema. So this is clearly something that's being -- becoming today a key segment of the growth of the beauty market worldwide. In 1976, brands such as Lancaster has introduced the first retinol patent. And guess what? Today, everyone is talking about retinol and how this dermatological inspired ingredients are taking over the world of skin care. Lancaster has also been the brand that invented what we call dynamic hydration that has become a norm today when it comes to how do we hydrate skin deep inside. And Lancaster has also been a brand that has been introduced in things such as DNA repair claims or oxygen therapies when it comes to skin care formulation. Clearly, this brand, Lancaster, has been continuing -- including more recently with this genetic and epigenetic repair technology that's a patented one, has been continuing to fuel, in a way, innovation that was not used in the rest of the company at Coty. So as you can imagine, this is clearly an area in which we are going to build. On the other side, as I've said before, COVERGIRL has invented 60 years ago clean makeup and invented, in fact, what we call today, and everyone is speaking about, the skinification of the makeup industry when it launched in 2009 the first makeup/skincare hybrid called Simply Ageless. So as you can see, there is a lot of history, a lot of patents, a lot of IP and a lot of innovation on which this company has been built in the past, and we can really leverage this to build the future. And you see it throughout my presentation. Let's have now a quick look at the beauty market. This beauty market is clearly a robust and resilient market that's been growing thanks to the luxury business that you can see on this slide, displayed on the left of the slide, clearly driven by the biggest chunk of the market, which is skin care, has been growing very, very strongly in the last years; and then second, of course, fragrances, plus 4%. And last but not least, makeup, which is 1/4 of this market, has been also growing until the crisis of the COVID by 8%. On the mass beauty side, the CAGR since 2015 has been lower, around 4%. And again, the key drivers and the biggest chunk of the market are skin care and then, of course, makeup and a mix of fragrances, shower gels and deodorants, which we call self-care. If you move to the next slide, you'll see that clearly, the growth in the luxury business is going to be clearly fueled by categories such as skin care but also fragrances and clearly, a clear rebound of makeup that's going to happen as soon as, hopefully, the beginning of next year. You can see on the next slide that it's clearly the beauty drivers of this business, especially the luxury one are China, whose momentum is led by growing disposable income, fueling demand for luxury beauty and of course, heavy, heavy, heavy exposure toward skin care, specifically premium skin care. Clearly, the acceleration on e-commerce is a key driver for this business, the luxury business; number three, the ultra-premium category that's remaining the fastest growing subcategory, be it in fragrances or skin care; and last but not least, travel retail that's heavily depressed today but is going to reaccelerate back as soon as probably starting this summer. You can see more in details that this China growth is fueled by clearly key contributing factors such as disposable income that's going to grow per capita by 50% in the next 4 to 5 years. And of course, you can clearly see that China's current beauty spending per capita has room to progress in the future since this represents more or less 20% to 40% of the one from the U.S. and 10% to 20% of countries such as Korea and Japan. Now we move to the second growth lever, which is e-com. That's clearly a key driver with countries such as China. As you can see on the figures on the left of the slide, luxury beauty e-com market sales plus 67% at the end of last year; plus 34% in America. Now the other element of premiumization is clearly the premiumization of all categories in this area of luxury business. Starting with fragrances. Here, you have 2 examples, the American market and the Chinese one. Both regions and countries, you can see that premium plus, plus ultra-premium are clearly very, very strongly growing and key drivers of the growth of this market. We can see the same picture when it comes to China. That's fueling the luxury skin care market with ultra-premium representing 1/3 -- more than 1/3 of this market and super, super strongly growing at plus 40%. Premium plus is 20% of this market, growing at 13%. And the overall market is growing at plus 33%. The fourth lever of this growth is clearly travel retail recovery. That's hand in hand with the luxury beauty growth market. So in calendar '19, travel retail market reached $37 billion, with 25% made of fragrances, 24% made of makeup and 51% made of skin care. Calendar year '20 travel retail beauty market declined very strongly, as you know it, driven by over 97% decline in international passenger traffic. But at the same time, what we call domestic travel retail and more specifically, Hainan has emerged as a leading destination for almost 80 million Chinese consumers with beauty sales reaching already $2 billion. And you can expect the international travel to start inflecting in the second half of this calendar year with consumer surveys suggesting strong pent-up demand for travel. Now we move to the mass beauty. And as you can see, mass beauty continued moderate growth in the coming years, led mainly by skin care expansion and clearly also by makeup recovery. What are the mass beauty key future growth drivers? As you can see, number one, again, premiumization; number two, digital and e-com acceleration; number three, clean sustainable beauty, and we'd see it later, is fueling this growth; and number four, the skinification of all beauty routines. Number one, premiumization fueling mass beauty growth. As you can see it here, premium franchises as a percentage of mass beauty sales have been growing by 600 basis points year-on-year in the U.S., 200 basis points year-on-year in the U.K. Now e-com is the second driver of mass beauty growth. As you can see it here, clearly, in terms of brick-and-mortar sales for the next 3 years, we see this growing in a down low single-digit CAGR while Amazon beauty sales, for example, that has been doing plus 18 -- 28% year-on-year during calendar '20, are going probably to continue to grow in the up teens in terms of CAGR for the next 3 years. The third lever of growth is the one -- this one is really linked to the product offer, and we clearly see beauty fueling -- sorry, mass beauty growth very strongly. Clean beauty is estimated to have reached something like $36 billion in 2019 already and accounted for close to 10% of total beauty markets. Clean mass cosmetics outpaced overall mass cosmetics in the U.S. by 17 points of percentage in the last 12 months. And beauty product launches last year with cruelty-free, vegan, clean or natural claims accounted for 1/3 of the American launches and 1/4 of the launches that we've seen in Europe. The fourth lever of growth is the one of skinification of the makeup industry and in general of all beauty routines. As you can see here on the left side of the slide, this is clearly going to reach -- the percentage of launches on the color cosmetics using moisturizing claims is going to reach almost 40% worldwide. And on products such as face makeup, you see which ones are displaying an SPF. Last year, already 70% almost of the products have SPF in China, and 20% of these display an SPF claim in America. So you can imagine the room there is very, very important. Now let's move to Coty's strategy. So we have 6 strategic priorities, and I'm going to spend a bit of time, a few seconds on this one because these are the things we're going to repeat meeting after meeting, both internally and externally: number one, stabilizing our consumer beauty makeup brands and mass fragrances. Number two, there is huge potential to accelerate our luxury fragrances and become a key player in prestige makeup given the powerful portfolio of licenses we have in the luxury division. Number three, we are going to build a skin care portfolio across both divisions; number four, of course, building e-com and direct-to-consumer expertise and also capabilities. Number five -- these, #1, #2, #3 and #4 levers are going clearly to help us to expand in China on luxury and select consumer beauty brands. And of course, becoming a beauty leader in sustainability is clearly the direction in which the 2 divisions are going into. So let's start first with how we are stabilizing our consumer beauty business. If you move to the next slide, you see that we've been working a lot since a few months to clarify the brand portfolio in cosmetics. And this is clearly the key condition to consumer beauty stabilization via brand positioning and repositioning. As you can see on this pyramid, we have clarified each and every brand positioning in terms of price tier but also in terms of competition. COVERGIRL, Rimmel London and I would say, the German Rimmel that we intend to merge with Rimmel London into another MANHATTAN are competing in front of a brand that's Maybelline New York. And then on the other -- on the upper tier, you can see that a brand like Max Factor with its very professional makeup artistry image or Bourjois with its chic -- French chic is clearly going to compete in front of a brand like L'oreal Paris. And on top of the pyramid, we have a jewel that no one else has in this industry, which is called Sally Hansen, which we are positioning more than ever as the brand that is going to propose at affordable prices salon alternative solutions. If we move to the next slide, you'll see that each consumer beauty brand has been repositioned. If we go from the top to the bottom, you see that COVERGIRL has a brand-new brand equity and sense of purpose. This brand is clearly going to encompass the uplifting power of makeup, and you'll see what this means. And this new equity is -- has started to be implemented as early as last month. Max Factor is going to become the brand that's going to take consumers from ordinary to extraordinary, with a new equity that starts to be deployed in stores and online and on TV as soon as next June 2021. Rimmel London is going to encompass the freeing power of makeup with a new equity that's starting, again, in stores and you'll see it also in TV commercials in June 2021. Bourjois, French beauty with power of positivity, this one is going to be introduced a bit later. And of course, Sally Hansen, the salon expertise at affordable price. The strong -- a strong equity is already in place, and there, it's really the expansion of the brand. So if we move to the next slide, you'll see that we start with COVERGIRL, the one that's going to encompass what we call the uplifting power of makeup. Stabilizing COVERGIRL, which is consumer beauty #1 brand by revenue, starts with a redefinition of the brand equity, making sure this brand is positioned in key trends that I've been sharing with you earlier, which are clean beauty and the skinification of everything, making sure this brings new targets to the brand but also to our retailers and of course, making sure this is visible quite quickly in in-store execution. So you can see on the next slide that COVERGIRL is still the most beautiful, the most loved and the most powerful brand in America; #1 spontaneous awareness, as you can see on the right of the slide, ahead of the competitors; the first makeup brand consumers mention, ahead of key historical competitors but also for all the new indies; and last but not least, very strong in terms of brand power, almost 1/3 bigger than the second brand. And this is clearly linked to the fact that this brand is still the most loved makeup brand in America. So why is this brand loved? You can see on the next slide that consumers love COVERGIRL because of its products and because of its leadership since years and years. As I've said it before, COVERGIRL invented clean makeup 60 years ago. And COVERGIRL has reinvented clean makeup through Clean Fresh launch that happened last spring, with fresh, healthy looking skin, 100% vegan formulation. And this product has been the #1 new foundation launch for the last calendar year. COVERGIRL was also the brand that invented what we call today the skinification of the makeup industry with the first anti-aging makeup for mature skin, but still the #1 anti-aging foundation in America. And this was invented in 2009. Last but not least, COVERGIRL has invented Outlast, which is the first what we call non-transfer foundation of the American market. That's sweatproof, transfer-proof and humidity-proof, providing full coverage and long wear as a result. Last but not least, on the face category, it's been also putting on the market one of the ranges that displays the biggest number of shades to include all skin types and all skin colors with Tru. COVERGIRL was also, as you see on the next slide, the inventor of what we call modern mascara. COVERGIRL invented what we call molded-brush mascaras. This molded-brush mascaras are the only ones that are allowed to get a very, very visible high volume, and at the same time, a very, very, I would say, defined lash definition. This is clearly something that reinvented the mascara market, and COVERGIRL was the brand that has invented this years and years -- I would say decades ago. I remember this from my older life. And this Lash Blast franchise is still an industry icon with its claim of 10x the volume. COVERGIRL has been also innovating more recently to capture what we would call the premium part of the mascara market with Exhibitionist that's been growing steadily for 11 straight quarters of double-digit growth; many other things such as Perfect Point, the #1 eyeliner in America; or TruNaked, which is still the #1 palette brand in color cosmetics. So as you can see, this brand has been inventing a lot of things that are making today what we call modern makeup, modern skinification of makeup, clean makeup or trendy makeup with high-end mascaras, palettes and liners. But you're going to ask me what went wrong, in fact. So again, in 2018, the relaunch took COVERGIRL away from its core. As you can see here, pre 2018, the logo and the tagline of the brand was very clear. It was all about this Easy, Breezy, Beautiful vision of beauty with creative aesthetics that were very, very easily recognizable and an A-list celebrity talent strategy. In 2018, 2019, COVERGIRL moved to a new tagline that is "I am what I am make up," which was absolutely impossible to understand by everyone, including people into the company; a new creative aesthetic that you can see is very, very dark with a vision of femininity that had nothing to do with what the brand has been doing in the past; and a more lifestyle talent strategy, which really took away the light from COVERGIRL. And I wanted to show you something very, very simple in terms of example. This one is -- speaks by itself. As you can see on the left, these are the blisters of Lash Blast, which is the #1 mascara equity in America prior to 2019. As you can see on the blister, the brush of the mascara is visible. The orange brush is visible. The purple one behind is also visible. And as you know it maybe, consumers when they shop in store, they like to see the size and the shape of the brush which will give them a sense of the result. And then somebody has decided in 2019 to close the mascaras, to put these mascaras on black and white blisters. And suddenly, the sales started to drop simply because people didn't recognize their favorite mascara, they couldn't understand anymore why this mascara is better than the others just by watching the brushes. And last but not least, when you go with the black and white blister, as you can imagine, the backgrounds of the Walmart or CVS stores are white. Suddenly -- and gray sometimes. Suddenly, the products didn't pop anymore in store. So we've decided to come back to these blisters as soon as now so that we can show back these brushes. And this is clearly a big change that's going to help us. And this happened not only in mascaras, but it also happened on lip color, where lip color was displayed and then was hidden and now it's back again and displayed again in stores. So this is going to help us a lot to recover our uniqueness, our strength in terms of visibility when it comes to our unique products in stores. Now you can see on the next slide that we are also harnessing our equity to propel into the future. So we are back to the COVERGIRL -- Easy, Breezy, Beautiful, COVERGIRL. And as you can see on the next slide, the brand equity is clearly back with a mainly A-list epitomizing healthy and carefree American beauty. So on the next slide, you'll see that to do that, we've been clearly betting on the key trends of the market: first, winning in clean beauty; second winning in what we call makeup skinification; number three, winning with Hispanic consumers; and of course, number four, making sure this brand is expressing itself in an omnichannel landscape. So first, winning in clean beauty. So this is clearly what we've been doing last year with Clean Fresh that's been launched in spring 2020. That's really all about showing a fresh, healthy, natural skin, which is one of the biggest trend of the beauty industry in general. This product was formulated without parabens, sulfates, phthalates talc and many other things. And it was also infused with coconut milk and aloe. It's been the #1 foundation launch of spring 2020, and it's had 2x the trial rate of the closest competitor. This product was 100% incremental to the total clean franchise, and it's over-indexing consumers under 34 and Hispanic consumers. The second wave of clean makeup at COVERGIRL has been made this year with Lash Blast clean mascara, which is an industry icon, now in a clean formula. That's been launched at the end of last year, still giving this 10x the volume claim that's very unique to Lash Blast franchise, but at the same time, providing a formula that's free from parabens, sulfates, talc and mineral oils; that's wearproof and lasting all day. And the first result has been outstanding: plus 49%, ahead of the launch plan; clearly in the top 4 at all our customers and on amazon.com; already the #2 COVERGIRL mascara and probably very soon, the #1 COVERGIRL mascara; driving a clear share growth with 1.1 points of growth since the launch; and again, building a huge buzz on Instagram with engagement 10x higher than the average run we had at the beginning of this calendar year. Now it's time to move to the new COVERGIRL. So we say -- at COVERGIRL, we say that it's time for a fresh start, returning COVERGIRL to the blue skies and to fresh air, which first made her famous and which America is longing for after a year of being inside. This will be the brand that brings clean beauty to all. And I'm very happy to share with you the first generation of a new kind of advertising that's we call the selfie advertising. And we've asked our spokespeople to film themselves at home because this was done during lockdown in Feb, and of course, getting outside their gardens to show what the new COVERGIRL could look like. So the first one is for Lash Blast Clean, displaying Lili Reinhart, who is a celebrity among Gen Z consumers. [Presentation]

So as you can see here, clearly the efforts are paying off in strong results. Lash Blast Clean mascara is growing with each week and halo onto Clean Fresh face makeup franchise. As you can see here on the figures on the right side of the slide, Clean Fresh makeup and Last Blast Clean are propelling the whole Coty company, together with [ quick and pure ], of course, to the second player in clean cosmetics in America. And you see with the start of the national media campaign that went live somewhere at the end of Feb, the growth of the sales is clearly very, very strong. So this was on the clean side of how COVERGIRL is going to own clean beauty in America. Number two, how COVERGIRL is leading and going to need more than ever the makeup skinification trend with Simply Ageless franchise. COVERGIRL, again, as I said before, invented what we call today makeup and skin care hybrid in 2009. Since then, Simply Ageless has always been the #1 anti-aging foundation in America. And now our focus is on elevating the franchise as the iconic "skin care meets makeup" since this trend of the market is clearly gaining a strong momentum since 2 years, which has been accelerated by the crisis we've been in since 1.5 years. So now we are going to display something very unique for you that's a scoop, if I may say, the new Simply Ageless campaign that's airing at the end of this month, with the return of one of the most iconic COVERGIRL spokespersons from the '90s, Niki Taylor, who is going to become the face of the new Simply Ageless campaign after having been the face of clean makeup in the '90s. This campaign, as you can imagine, is tapping into key insights which are: number one, the power of nostalgia in promoting brand trust post COVID. Number two, it's going to be -- this year is the 60th anniversary of COVERGIRL. Number three, again, Simply Ageless, the inventor of the skinification of makeup and still America's #1 anti-aging foundation. Last but not least, this new generation of healthy, fresh take on traditional beauty advertising with what we are going to call, with Lili Reinhart and now with Niki Taylor, the selfie shot beauty ad, which is much more cost efficient, as you can imagine. It's 10x less expensive than a traditional advertising, which will allow us to put more money on working media. And again, it's a whole new generation of advertising that's been tested recently with Lash Blast Clean mascara, getting probably the best results COVERGIRL has ever had on mascara advertising. So now let's have a look at the new COVERGIRL Simply Ageless campaign featuring, for the first time since 20 years, Niki Taylor. [Presentation]

So again, this is clearly going to change the future of this brand because this is very unique. No one else is displaying makeup today in America the way COVERGIRL is doing it. And it's very true to the story of COVERGIRL on one side but also very true to what consumers are looking for today and what they will be looking for tomorrow, specifically younger consumers under 34 years old but also Hispanic consumers. Why Hispanic consumers? This population is accounting for 18% of the U.S. population and is clearly, as you know it, the fastest growing segment. Hispanic consumers over-index on beauty purchases but has also been switching from traditional retail channel and brands to specialty channels and niche brands. So you can understand why they are strategic for a brand like COVERGIRL but also for our customers such as CVS or Walmart. COVERGIRL is clearly already winning these consumers back, over-indexing these consumers, as we've seen before, with clean beauty launches but also making sure we have, for the first time, Spanish-language Amazon media campaign that helped us to bring 70% of new consumers -- new Hispanic consumers to COVERGIRL but also to our customers. Another thing that's been done to make this brand more easy to read for you and for us also is to make sure we are going to concentrate -- and this is really a new way of working. Instead of creating every year new sub-brands, we're going to concentrate more than ever on what we call the magnificent 8 today: clean makeup, Lash Blast franchise, TruBlend franchise, Simply Ageless franchise, Exhibitionist, Outlast, Perfect Point and eye enhancers. This magnificent 8 represents 70% of COVERGIRL business, and they've been performing in line with the mass color cosmetics category. And these are the ones that are helping us to stabilize COVERGIRL's shelf space in spring 2021 and likely in fall 2021. Again, the way we are going to work, as you can see, if you compare to fiscal '19, on the left, we were investing on something like 6 franchises while we'll be investing like in 2021 probably on 4 key assets of the brand, 2 per half, which is going to help us really put more money on what's working to make sure there is visibility, there is growth and there is also areas of the business that only COVERGIRL can animate and own. So as I've said a few seconds ago, we continue to hold shelf space in 2021 with COVERGIRL starting this month to roll out its new wall in America, moving from the existing fixture system to the new fixture system that's going to display video, that's going to be much more easy to shop and that's going to overexpose what we call the magnificent 8. This is also going to be mirrored in our clean portfolio that you can see here is clearly leading the growth of COVERGIRL online. Because simply, this -- our key retailers are creating clean flagships, and COVERGIRL, because it's been the fastest brand to move into this direction with clean makeup and now with Simply Ageless, makeup meets skin care, clearly, we have an advantage. And this advantage is visible when you see that the makeup category in the December quarter at Amazon grew by 36% while COVERGIRL was at plus 45%. This clearly shows how and why, and the way I've been explaining it to you earlier, clean beauty is driving the growth online. And this also is a great also, for me, proof that this brand is absolutely not broken because online, where you concentrate on the key assets, where you promote in a very, very efficient way clean makeup and the skinification of the brand, you can see that the results are far over and higher than the ones you see from the competitors. Now let's see very quickly, before moving to the other brands, how these first, I would say, achievements and very, very quick reaction we've been doing since 6 months now has had an effect with the brand responding to the repositioning, to media campaigns and to innovation. As you can see here, the orange line is a comparative versus 1 year ago, and the green line is comparative versus 2019. Both comparative clearly see an average weekly sales in March 2021 growing by 26% versus the average weekly sales between April '20 and February '21. And even if we compare to 2 years ago, we have a minus 14%, I would say, achievement, if I may say. That's, by the way, improving by 20 percentage points versus the period of April '20 to February '21. So this shows us that something is starting. It's going to be long. But again, we wanted to quickly have green shoots to build on and to reinvent the brand very quickly so that people understand the direction this company is going in. Now we move to the second American jewel, if I may say, and the second big American brand, which is Sally Hansen. That's the salon alternative. Sally Hansen clearly is expanding its nail leadership, being the #3 consumer beauty brand by revenue, and this is clearly supported by the continued growth in demand for at-home manicures. And the latest launch from Sally Hansen called Good.Kind.Pure., which was on the clean side of the market, had stellar results, being the #1 clean cosmetic franchise in America and the #2 launch in the total U.S. mass cosmetic business in calendar '20. And this result is not only seen in the U.S., but you can see that Sally Hansen is winning globally in cosmetics, be it in the U.S., as I said it before; in Canada; in Australia; in U.K.; in Italy; in France; in Czech Republic, as you see on the last 3 months but also on the last 12 months. Now we move to Europe, and we're going to talk about our superstar in Europe, Rimmel, which is going to be repositioned under the freeing power of makeup. We are going to strengthen Rimmel, which is our #2 consumer beauty brand by revenue. Rimmel, as you know, it has led U.K. mass cosmetics as the #1 brand for many years. Its positioning has become unfortunately subdued and needed a refresh. And we intend also with this brand -- in the same way we're doing it in America with COVERGIRL, we intend to lead the clean trend in Europe, thanks to Rimmel. So what does the brand look like today? This is what Rimmel looks like today. I would say and summarize it in 1 sentence. This brand that used to be super, super strong, super bold, almost into the face, started to become apologetic, banal and tame. So we intend to reinvent Rimmel under the freeing power of makeup equity. As you can see, these are just for your eyes only [ mood board ] that can give you a sense of what this brand can own and how this brand is going to be repositioned very soon. And to give you a flavor, and again, this is for your eyes only, very happy to share with you a mood board that we've been working on since a few weeks that's going to be clearly looking at what the brand is going to be looking like in the summer. [Presentation]

So as you have seen it on this film, clearly, Rimmel is going to be repositioned as the leading brand when it comes to self-expression, freedom, boldness becoming again an unapologetic brand. And we'll be announcing quite soon the new phase of Rimmel and the new, I would say, equity in terms of advertising that's going to be visible as soon as this summer. So -- but in the meantime, Rimmel is already winning in the U.K. and gaining share in Europe, as you see on this slide, has been achieving 20 consecutive months of share growth in the U.K., #1 brand. It's a brand that's also gaining share in countries such as France, Spain and Italy. And Rimmel is very, very strongly winning on Amazon U.K., for example, with market share growth of over 300 basis points in the last year. Now we move to the second brand equity in Europe, which is Max Factor, and again, this brand is going to really bring products that are going to take our consumers from ordinary to extraordinary. It's clearly the premium brand of the portfolio, #1 consumer beauty brand by revenue. And the equity from ordinary to extraordinary is going to be super helpful to take the brand to the next level, to make sure the brand is rooted again in its, I would say, history of the inventor of what we call today makeup artistry or professional makeup. We are going to announce here again a key brand ambassador with 80 million followers that's going to represent this brand very soon. And we start to have already super positive feedbacks from our retailers with a great reception to the repositioning plan that we've already presented and already sell-out growth on Amazon in the U.K. and in Germany that has been growing double digits in the recent months. So how does this brand look like today? As you can see, Max Factor today is honestly very ordinary with a white background with, I would say, the girl next door, which has never been the story of Max Factor. Max Factor has always been about superstars, fabulous faces, makeup artistry and taking women, what we say, from ordinary to extraordinary. So if you move to the next slide, you can see here how we are about to polish the Max Factor star to be bright again, taking it from ordinary to extraordinary. So we're going to show you, again, a mood board video that's going to tell you the story of Max Factor and the direction in which we are going. [Presentation]

So as you can see, again, this brand clearly had been reinvented in as quickly as a few months, and you'll see the first, I would say, new Max Factor arriving in store very soon, probably this summer. We will be injecting color through sensorial textures, as you can see here, with color products in store as soon as June 2021. We'll be doing the same thing when it comes to face products with a brand-new identity that's clearly going to take its inspiration from the luxury and makeup artistry business. You can even see it on these models that are going clearly to lead the game in terms of bringing makeup artistry to the next level in mass distribution. So this is it for Max Factor. And now we're moving to other brands than makeup. And again, we have a beautiful jewel in the company called adidas. And this company and this brand is going to be developed into what we call self-care to become a self-care powerhouse. adidas is our #4 consumer beauty brand by revenue, and this brand has been, until now, anchored in shower gels, deodorants and mass fragrances. Clearly, this brand has a huge potential. Our studies confirm that adidas is viewed as one of the most aspirational brands amongst German, Chinese or American consumers, and you can see here on the next slide that we are able -- we'll be able to take this brand from what it is today, which is deodorant and body cleansing to active body care and why not active skin care. So you can imagine the growth potential this brand has in the future both in terms of categories, geographical footprint and price tiers. But today, already, the brand is showing green shoots almost everywhere with market share improvements in select regions. Two examples here, one in Germany and 1 one Poland, in brick-and-mortar on the left. But also, on China e-com performance with a stellar growth online in February of 111%, plus 24% on Tmall during Chinese New Year, in Australia and plus 24% on JD.com sales more recently. So this brand is clearly one of the brands you'll hear more and more about when we will do our presentations on Coty. Last but not least for the consumer beauty division, we have a very strong -- unknown but very strong portfolio of local Brazilian brands that are having outstanding results. The first brand is Risqué. That's the #1 nail brand in Brazil in the mass cosmetic distribution, being positioned as a mainstream to premium price tier. The second one, which is probably the fifth brand of the consumer beauty division after the 3 makeup brands, adidas, is Monange, #2 female deodorant brand in Brazil, #2 body lotion brand in Brazil. This one is a value price tier. And last but not least, Bozzano, which is the first shaving brand in Brazil with a positioning in the value to mainstream price tier. These local brands are having outstanding results, as you can see on this slide, despite of COVID impact, which is even bigger there. Local -- our local Coty brands in Brazil have been growing and gaining market share. And for the most recent period, which is Jan and Feb, our brands have been growing 5x faster than the market. So this takes me to the conclusion on the consumer beauty side. Our path to stabilizing consumer beauty is very, very clear. We have top 5 brands in consumer beauty, which are COVERGIRL, Rimmel, Sally Hansen, adidas and Max Factor, that account for 70% of the consumer beauty portfolio. This strategic work that we've been doing at the speed of light to reposition each and every brand has now been completed. The repositioning plans are in place. There -- we have already been signing and will be soon announcing new brand ambassadors for each and every consumer beauty brand with almost monthly announcement planned through calendar year-end. We've been sharing plans with key retailers, and the support has been tremendous. And the new brand equities are going to be implemented online and in store starting from now. Additionally, we have this Brazilian local business that account for over 10% of the consumer beauty business and that's doing fabulously well and that we intend to take to the next level. So now we are going to move to the luxury business. And our first priority in the luxury division is to grow our fragrance business and start to build a makeup -- prestige makeup portfolio. We have today very well positioned brands in fragrances to drive strong growth in this luxury area. Three of our brands are in the top 10 female fragrances and 2 brands are in the top 10 male fragrances in calendar year '20. Marc Jacobs Perfect has been the #1 fragrance launch of calendar '20 in America and in U.K. Hugo Boss Alive has been the best female fragrance launch in Germany for over the last 3 years. Another information that's very important, we do not have any major license up for renewal in the next 5 years. And last but not least, many licenses allow the extension of the brand beyond the fragrance business. So now let's come back to the -- to how we are going to reignite and take the fragrance business to the next level. As you can see on the left part of this slide, the male fragrance -- the male luxury fragrance arena is 33% of the business worldwide. And Coty is clearly leading this area with iconic brands, very strong male fragrances, such as Calvin Klein, Hugo Boss, Gucci, Burberry, to name a few. The female side, which is representing 2/3 of the market, Coty is strong but we think we can benefit from additional iconic franchises added to top -- global top 10. And last but not least, it's small area of the business but highly, highly and strongly growing, which is the one called the niche fragrance business, our artisanal fragrance business, accounting for 10% to 20% of the luxury fragrances, depending on the market. And there, Coty is going to build out its presence with key brands such as Gucci, Chloé, Bottega Veneta, Roberto Cavalli or many others, to name a few. On this area of artisanal fragrances, we are scaling the presence in this area, that's the ultra-premium side of the business, with several portfolio brands that have proven their ability to extend into this ultra-premium category. It's still small but it's a strongly growing Coty fragrance portfolio with, on the left, as you can see, the Gucci, the Alchemist's Garden. That's been launched 2 years ago with sales weighted to EMEA and Asia Pacific, as you can imagine, where Alchemist's Garden sales grew double digits in calendar '20. On the other side, Chloé Atelier des Fleurs, which is booming in regions such as China, the #1 productivity in Sephora in China amongst all artisanal fragrance brands. Or just another example to share with you, Bottega Veneta, which is the #1 fragrance brand in Sephora in China. Now we move to the second growth engine for the luxury division, which is the one of prestige cosmetics. As you can see here, we are building this portfolio with 3 brands that are new to the company, Gucci and Burberry on the premium side of the market that we've been developing since 2 years now, so it's just the beginning of the expansion of these brands; and of course, since 1 year, the arrival of Kylie Cosmetics on the entry prestige part of the market. The first results we're having today are showing a strong progress already in prestige cosmetics. Gucci cosmetics -- and you've heard it already, and you'll hear it more and more in the coming future. With Gucci, first foundation designed for the Asian market that has sold more than 60,000 units globally in just 2 months. And in the last 9 months, Gucci cosmetics sell-out has been growing 110% in America and plus 50% in Asia Pacific. We had the same kind of results with Burberry cosmetics with this makeup sales growing by 48% in China and gaining market share consistently. In these 2 brands, you have to have in mind that the productivity of these 2 brands is already super high. If you compare to leaders who have around 600 SKUs, Gucci is still having 222 SKUs and Burberry 155 SKUs. So you can imagine, once we will be complementing the portfolio, which is happening in calendar '21, calendar '22, calendar '23, the growth potential of these 2 makeup brands in Asia but also in America and in Europe. The third engine of the company this time is building a skin care portfolio in both divisions. As you can see on the next slide, we need to make sure that this portfolio is encompassing the key trends of the skin care business worldwide. The first key trend is the one that everyone has heard of, is the one of green, cleaner, vegan, more sustainable skin care options. And this one is clearly towards, I would say, the younger consumers, Gen Z and millennials, and entry premium brands. Then you have 2 other parts of the market that are heavily growing. The first one is the one that I call dermatology-led solutions. That's the one all about the growth that you have seen online, driven by the search for ingredients coming from dermatology such as vitamin C or retinol. This area, we need to have a brand position on this one. Three, what we call regenerative medicine. This area is clearly the origin of key big successes of the skin care industry worldwide, and this area is clearly an area where you can position premium plus or ultra-premium brands. Last but not least, brands that are going to educate young consumers that we call Gen Z brands, thinking about Kylie, of course, that are brands that are going really to educate consumers about how to use their first cleanser, first moisturizer or first lip balm. And these skin care trends, we are very confident that we're going to grow them very, very strongly because they will be rooted on a strong IP in skin care in the Coty company. The first IP is the one that we call light and environmental aging protection. This is, again, thanks to Lancaster that's been continuing to lead the game in this area, being a leading game when it comes to UV and pollution protection that are key trends, as you can imagine, in Asia and moreover in China. And Lancaster owns patents in this area such as the broadest sun protection ever developed in skin care with protection including against blue light and also technologies that are very, very easily adaptable to skin and color categories. The number two IP on which we are going to build each and every skin care brand is what we call the vectorization of dermatological-grade actives. Here, again, think of retinol, think of vitamin C, think of niacinamide, which are ingredients whose surge has been booming online and on which a company and a brand like Lancaster has been heavily investing not only 3 years ago, 5 years ago, but since 30 years with unique and patented cationic liposome technologies that allow to precisely deliver these active ingredients in the core of the cells. And these are inspired by the gene therapy vectors, which are the most performant intracellular penetration vectors. And this is really a very, very important topic since this spike towards dermatological ingredients is usually happening at the same time where people get irritation because these ingredients are not mastered the right way by many, many skin care brands. And Lancaster, because of its liposome technologies, is going to allow consumers to use these highly efficient ingredients while taking care of the skin sensitivity. The third IP that this company has is the one in regenerative medicine-inspired technologies with unique combination of repairing enzymes from natural origin, most of them that are going to be vectorized using, again, liposome technologies, which are going to contribute to skin regeneration and damage repair to preserve skin youth. The fourth, I would say engine, that's going to help us a lot will be makeup -- face makeup, which is going to benefit strongly from the skinification trend, but also on skin care in regions of the world where the global warming is going to be very, very quickly, I would say, visible and is going to transform the wear of skin care, very, very complex. In fact, these patents we own in longwear, thanks to a brand like COVERGIRL, are very, very useful to make sure we create skin care formulations adapted to markets where the temperatures are going to rise very, very strongly in the coming years. So this will lead to a portfolio that could look like the one you have here in front of your eyes that's a very comprehensive portfolio with brands that we own today like philosophy, Lancaster, brands that we have recently acquired such as Kylie or the upcoming launch of SKKN by Kim. And of course, we could also imagine going on selected consumer beauty brands into the skin care arena. So this portfolio of brands will go from, I would say, the basic and performance-led skin care at affordable prices: Kylie becoming the Gen Z destination and entry premium skin care line; philosophy becoming the green and clean ceutical skin care queen, I would say; and then, of course, SKKN by Kim that we are going to root clearly as a brand that's going to democratize the most popular procedures; Lancaster, the regenerative medicine expert. Or we can imagine one day to have some of our designer brands going into skin care, and we can even think about what could be at the tip of this pyramid. So very quickly, we are going to start. We started already to do the same work that has been done on the makeup -- mass makeup industry that we have at Coty, which is to reposition each and every brand. We will be very happy to present as quickly as next month the new positioning of philosophy that's going to move from a U.S.-centric well-being beauty brand into a leader in green, clean and ceutical skin care. The second brand we are repositioning is Lancaster. That's going to become Lancaster Monaco. This is another jewel that we own with a very, very strong heritage. If you look at the next slide, you can see that Lancaster has been the company that has been introducing retinol in cosmetics, oxygen therapies in the '90s, again, in skincare. When I say cosmetics, we mean skincare. And more recently, we are the first company -- we've been the first company and the first brand to combine genetic and -- epigenetic, sorry, in repair technologies in the 365 skin repair serum. So today, this is how the brand looks. It's clearly a regional UV protection brand, and we are going to take this brand into a premium plus regenerative skin care brand benefiting from many things. First of all, the high-end heritage. You may know it or you may not know it, but Lancaster in 1965, it became the exclusive beauty provider to her serene highness Princess Grace of Monaco, and you can imagine how these kind of stories can be leveraged very strongly in key parts of the world such as China, but also we're going to leverage all the areas in skincare technologies that Lancaster has been pioneering, such as light protection, vectorization of dermatological-grade actives and of course, regenerative skin repair technologies. So you will see soon Lancaster becoming a leading-edge skincare brand in the areas of skincare. And again, today, the brand is already anchored in the skincare area now. As you can see today being a strong, strong contender at Sephora, where the brand is sold exclusively, and you can see here some visuals about our 365 serum or our UV protection products that are, again, promoted by key opinion leaders from China. So this is it for, I would say, the repositioning of each and every brand in the luxury division with the creation of a luxury prestige makeup portfolio, a skincare portfolio in both divisions, but mainly in the luxury business. But last but not least, accelerating our luxury fragrance business, specifically the female one, and of course the artisanal niche one. Now, of course, this has to be built around our e-commerce and direct-to-consumer capabilities. As you already know it, we've been already showing strong retailer.com and pure-player performances, with e-com already representing 17% of our sales for the first half of fiscal '21, almost reaching 19% in quarter 2, growing over 40%. And e-commerce being represented today. 50% is made with pure players, 1/3 is made with retailer.com business, and 13% is made with our direct-to-consumer businesses, namely Kylie, philosophy and a bit of Bourjois. And again, you may know it that this business is strongly margin accretive for Coty overall. So our brands has been winning again on key places such as Amazon. As you see it here on December quarter, the color cosmetics category was 36% of growth while Coty growth in general was 133%. Mass fragrance business has been growing at Amazon at 39%, and Coty was growing almost 4x faster. And again, you can imagine this picture if we power it with the drive huge -- using the drive of our huge reach through holistic social media ecosystem. If you go from the left to the right, you can see that Coty brands have already something like 16 million followers on the different social networks. Our fashion houses have 1 -- extra 127 million followers. And if you add the, I would say, the reach of our core talents, such as Kim Kardashian, 193 million followers; Kylie Jenner, 200 million followers; but also Lili Reinhart, 26 million followers; for David Beckham, 65 million followers. This takes us to almost 700 million followers that we can reach with the different brands we have in the different divisions. And our strategic, I would say, focus in the digital area, specifically on the direct-to-consumer journey is clearly to focus on what we call consumer-centric data innovation and data, in a way, gathering through real-time social listening. We are deploying a full suite of solutions and dashboards and qualitative/quantitative analysis to inform the business in real time, which we didn't have a few months ago. Brand sentiment and reputation, product consumer feedback, what are the key trends, what are the key consumer [ tribes ] on which we could invest, who are the advocates and influencers that we can build on. And of course, how do we optimize the consumer experience through analysis and measurements. And this clearly will help us to envision our direct-to-consumer, I would say, journey that's going to be big in the U.S. on owned website as soon as fiscal '22 with the launch of our fully new Kylie direct-to-consumer website that's going to happen in the first quarter of fiscal '22. The kickoff of our team, skincare direct-to-consumer in fiscal '22; bringing philosophy direct consumer -- direct-to-consumer offer to the next level, which will happen somewhere in the second half of fiscal '22. And at the same time, building the next-generation of supply chain capabilities to fully support the direct-to-consumer ambition, which is starting already now. And then on the other side of the world, we're going to go big in China. With Tmall flagship stores as soon as now, unlocking the full potential of brands such as Gucci and Burberry, creating the conditions for success for our other iconic brands to go big in China. And yes, of course, unlocking the potential of what's becoming today the norm, which is like streaming and social e-commerce. And I took 2 examples to show you, again, the power of what we call advocacy and social commerce that are going to become key priorities for Coty as soon as now. Advocacy is clearly capitalizing on organic advocates to boost sales. Social commerce is clearly putting in place beta testers and lead for Amazon Beauty live events. And we are going to expand on confidential things that I cannot share with you today that are going to be on the live stream side of the business and in social e-commerce. I can share with you 1 example today, which is the one how of advocacy and how can we use natural advocacy to create commerce. And this example is about Simply Ageless that went viral on TikTok starting from a post from a micro influencer who is having 22,000 followers that advocated the content around COVERGIRL Wrinkle Defying Foundation. And this was quickly boosted with a media investment from our U.S. and Canada teams that happened then as quickly in -- as 24 hours, securing the user's rights, boosting the paid media campaign, partnering with e-commerce to make sure inventory was there. And again, the results were outstanding at our key retailers. As you can see it on the right side of the slide, with sales of this key franchise doubling or tripling almost overnight. So this gives you a sense of how our e-com is becoming, not only a key place and a key partner for the business in the company, but clearly, we are going to be more innovative, and we are going to be leading this game in this area starting from now and on and, of course, on our consumer beauty brands, but also, as you can imagine, our strong fashion brands but also in skincare. All these engines, and you can imagine the growth in the luxury business, fragrances, niche fragrances, prestige makeup, skincare, powerful brands on social media, powerful consumer beauty brands that are going to lead, I would say, the social media discussion with clean makeup and the skinification of the beauty industry. All these engines on top of e-comm are going to help us in a dramatic way to expand our business in China. So what do we have in terms of business in China? We have a highly desirable fragrance brand in this country. Gucci fragrances are already #8 in China, Calvin Klein fragrances are #6 on JD.com. Burberry fragrances are #10 in this country. Our leading artisanal fragrance brands, as you can see on this slide, such as Chloe Atelier des Fleurs, which is the first #1 productivity in China Sephora amongst all niche brands. Chloe revenues in the -- are growing very, very strongly, including recently. Tiffany & Co, whose brand revenues are growing again double digits year-on-year. And last but not least, a brand like Bottega Veneta, which is our #1 fragrance brand in China in Sephora, with here again, business that's growing triple-digit growth in this country. We're going also to increase our footprint in prestige cosmetics and in skin care, with Gucci makeup that's been gaining, as we have seen it already, 16 base points of share more recently, Burberry makeup, gaining 10 points again, in the makeup business and more new things to happen on a brand like Lancaster that's already leading the sun care business in countries like China that we are going to move very, very quickly into skincare, as you will see it very, very, very soon. And the first results we got in this country are spectacular, specifically from the introduction of Gucci on Tmall, very strong grand opening sell-out. Gucci Beauty has been a top 4 performance for luxury beauty brand grand openings since the number top 4 performer since 2018 with a very strong performance in key lines during the opening period #1 on lipstick, #4 in face category, #1 in beauty powder and #1 on fragrances. And this is -- and this was thanks to the incredible power of key opinion leaders such as Luhan and top KOL Austin who has done a very, very interesting live streaming that generated over 50 million social discussions, allowing the brand to gain 90,000 followers in 46 days and 43,000 K-members on Tmall. And I'm very happy to share with you a few seconds of this very, very successful live streaming. [Presentation]

So you can see -- you can clearly see here how much these desirable brands that we do own are going to operate very strongly online in countries such as China, but moreover in the rest of the digital world. So last but not least, Coty clearly expanding in this region in what we call domestic travel retail. The example of Hainan is -- speaks by itself. We have 7 downtown stores, 1 airport store that's currently o-pic -- sorry, open and active. One downtown store and 1 airport store that are going to open by the end of this calendar year and brands such as Gucci and Burberry, who sell-out last year, has been growing 3x versus 2019. And informal feedback recently suggesting that Gucci and Burberry are ranking among the top 5 brands in fragrances, with the strongest growth in the makeup area. The last engine of the company growth is the one of sustainability. So we can start with the beauty of our products. As you can see it on the next slide, sustainability is clearly driving product innovation. We've seen it several times with Clean Fresh make up line on COVERGIRL, Miracle Cure on Sally Hansen and the recent launch of Calvin Klein at CK Everyone. The second engine of our sustainability journey is the one of the beauty of our planet. You're all aware of the exclusive partnership Coty has recently signed with LanzaTech, which is very, very important to allow Coty, which is the #1 fragrance maker in the world to transform and up cycle this business into, I would say, a sustainable business, transforming carbon captured from factories into ethanol -- cosmetic-grade ethanol to be used in our fragrances with the majority of our fragrance portfolio using carbon-captured ethanol by as soon as 2023. And the third, I would say, pillar of our D&I strategy is the one around our people with a majority female board and executive committee level, rolling out, change the conversation, trainings all over the company. And things arriving that are new, such as something we have recently announced, which is a new pay equity commitment to ensure we pay equitably for similar roles and performances regardless of gender by 2022 are things to be presented to you very soon. So now I'm going to turn it over to Laurent for a high-level discussion of the financial framework of this presentation. Thank you very much for your attention.

Thank you, Sue. So let me share now with you the financial overview. We are on track to end FY '21 with net revenues of about $4.5 billion to $4.6 billion, with $2 billion of net revenue in H2 '21, approximately evenly split between Q3 and Q4. We are confirming our fiscal year '21 adjusted EBITDA target of $750 million. Despite net revenue decrease due to net M&A with exit of Younique, low-quality sales reduction and COVID impact, we are able to improve our adjusted EBITDA margin by 300 basis points through strong profit protection efforts. Now looking ahead, as Sue explained with our strategic priorities, our luxury business will drive future revenue and profit growth. Skincare in '25 will be over 10%, prestige cosmetic high-single-digit percentage; and China, over 10%. We are confirming our calendar year '21 leverage target. Our Q3 fiscal year '21 net debt is landing approximately $5.1 billion with KKW transaction of about $200 million, Wella working capital negative reversal over $100 million and seasonal free cash outflow, offset by positive ForEx. We continue our EBITDA expansion, working capital improvement led by inventory. Other cash initiatives in Q4 fiscal year '21 and H1 fiscal year '22 to move towards leverage calendar '21 toward 5x. Important milestone for Coty is our successful bond issuance to extend maturities. We have recently completed the issuance of $900 million or 5% senior secured notes due in 2026. There was a very strong demand, which resulted in bond offering being upsized to $900 million from initial expectation of $750 million. Proceeds are net leverage-neutral and will be used to pay on fiscal year '23 term loans, reducing refinancing risk. As I explained, we have multiple levers to further improve leverage and free cash flow: number one, EBITDA expansion, with steady growth driven by revenue acceleration and margin improvement; number two, working capital improvement, significant opportunity in inventory further optimization of receivables; number three, monetization of assets, opportunities to monetize some of our PP&E and intangible assets; last but not least, we have a financial stake in Wella. No near-term exit plans, but we expect value of stake to grow from the $1.2 billion value at Wella transaction close. Let me now hand over to Sue for the conclusion.

I'm going to make a quick conclusion. Again, I really would like you to go away from this presentation. Having in mind that Coty is a very unique beauty company, which is today at an inflection point for sales and profit growth. Why? First, one of the -- Coty has one of the most beautiful portfolios of the beauty industry with 2 very complementary divisions. Our new strategy that I have presented to you today has clearly been a great clarification of the Coty story, the Coty portfolio and sets a clear path towards value creation. We have also, again, as I said it, one of the most beautiful and most comprehensive brand portfolios in the industry, and we are the only group at this level to operate 2 complementary divisions, luxury and, of course, consumer beauty. Second, there is a significant growth potential in our current luxury portfolio. Beauty demand, for sure is going to rebound post pandemic and is going to be led by the luxury business. Our extensive portfolio of highly desirable luxury brand licenses will allow us to capture opportunities in the most attractive areas of the beauty market, luxury makeup, luxury skincare, China, Asia Pacific and, of course, travel retail. Number three, region. There is a new sense of urgency. As you can see it -- you've seen it during this presentation. You've seen at which speed, we've been repositioning and reinventing almost each and every brand in each and every division. This sense of emergency is clearly what's going to help us to benefit from the new wins that are hopefully going to blow starting this summer and for sure, after the summer and in fiscal '22. Action plans that's been already implemented with the reveal of all repositionings that you'll see before the end of this calendar year. This new sense of focus will help us clearly to grow the 15, 20 brands amongst 70 of the company in areas of the business that are the most promising, focusing luxury resources, as we say in-house on big countries, big cities and e-commerce to mirror the future luxury retail world. Number four, phasing out, of course, low-quality sales is also a great way to strengthen the health of our brands and the health of our businesses. So the new Coty, I would ask you to measure it through sell-out trends and profitability. As you can imagine, several points of revenue growth in the next couple of years will be dedicated to cleaning up this value distribution. For me, this marks the end of an old system and the takeoff of the new Coty that hopefully you're going to see in the coming 2 years. Thank you very much for your attention. It's been a real pleasure to prepare this presentation for you. And with Laurent and myself, I'm very happy to take your questions about this presentation and the, I would say, key opportunities for Coty as a company in the coming years. Thank you very much.

[Operator Instructions] And the first question is for Sue. You have given a lot of great detail on the forward strategy, but is there any framework you can provide about how to think about the revenue and profit outlook in the coming years?

Hello, everyone. Thank you, Olga. So again, that's a question I was waiting for. So I would say that we do understand, of course, the importance of providing long-term guidance to measure our performance and, of course, the success of the strategy that we've just presented. At the same time, it's very important for us as well as our investors that this long-term guidance is credible and at the same time, achievable. And in the current very volatile micro backdrop with new lockdowns, as you know it, and restrictions in many parts of the world, we do not believe we could accurately provide the level of guidance at this time. We are committed to provide a lot more clarity on our medium-term outlook at our planned Investor Day in fall 2021. However, what we can absolutely say today with certainty is that fiscal '21 has been a reset year for Coty in terms of scope refinement, low-quality sales reduction and meaningfully improving our cost base. As such, our strategic progress should be measured against fiscal '21. And in the coming years, we intend to accelerate both our sales and profit growth from this fiscal '21 baseline. Providing a few building blocks, again, to refer to the presentation that you have just seen and to help you think our -- on our forward trajectory, I would say that as we discussed it today, we expect the makeup category to grow at low single-digit, middle-single-digit CAGR, if I may say, in the next 4 years, as we did and we have laid out today, the immediate focus for the mass business is to stabilize our market share and to get to a point where we are performing at a similar level as the overall market. And we are already going full speed in activating our plans on each and every brand that I have been presenting to you today. For prestige fragrances, we already have a very, very strong position and historically, we've been growing in line or ahead of the market, which is forecasted to grow at middle single-digit figure over the next few years. On top of these 2 category trends, what I can tell you is that we have a number of opportunities, as you have understood from this presentation that we are highlighting in our, I would say, strategic priorities, and that will be fully incremental to the current and existing portfolio. These include, of course, prestige cosmetics. As you've seen, currently 3% of our sales, very, very tiny, and we are targeting to reach high single-digit percent by fiscal '25. The second area of growth potential worldwide, but also in Asia is skincare, which is currently representing 6% of our sales, and we are targeting to reach over 10% by fiscal '25 here again. And last but not least, China, which is currently 3% of the sales of the company, and we expect to reach over 10% of sales by fiscal '25. If you take all these together, I would say that we believe this position us for a nice acceleration in growth in the coming years, even after taking into account, and I've insisted on this at the end of my presentation, a couple of points of impact from continued reduction in low-quality sales to improve the overall profitability, where we will be, again, on this topic very, very active, but at the same time, very, very pragmatic. So I would say that it's too early maybe to comment on fiscal '22 outlook. But based on everything we see today and based on this presentation, I would say that the external expectations don't look unreasonable. That would be, I would say, a good summary of the mindset of the company today in terms of outlook.

Great, thank you, Sue. Our next question is for Laurent. As skincare, prestige cosmetics and DTC become an increasing mix of your business, where do you expect gross margins to be in the next few years?

So thanks for the question. So definitely, so we are not disclosing precise gross margin numbers, but definitely, and Sue explained during the presentation is that definitely, this is an accretive business. So this -- I mean, growing this activity will increase our gross margin. In addition to a lot of other initiatives, either on supply chain, on mix, on pricing, on revenue management. So indeed, it's a big component of our gross margin improvement journey.

Great. Thank you, Laurent. Our next question is for Sue from Andrea Teixeira at JPMorgan. Are you starting to see an improvement in the COVERGIRL mascara in your packaging? And what is your aspiration for COVERGIRL Clean Fresh? How much could it represent of sales? And finally, do you expect fragrance momentum to continue with some pantry destocking given strong holidays?

So let's start with the last part of the question. I would say that the fragrance momentum, I think, is going to continue because it's been clearly at the top of the growth. The market in America, for example, in the luxury business when it comes to fragrances, you're seeing a double-digit growth versus 2019. And Coty is overperforming this market. So as you can imagine, this is clearly an area that we don't see, in fact, going down in the near future, and we are today far ahead of the, I would say, holiday stocks. The second question, which is about COVERGIRL, yes, we start to see, I would say, strong green shoots on COVERGIRL. The new mascara Lash Blast Clean was launched already with the new look. You know the one I have been presenting to you with a brush that's visible on top of a beautiful campaign. That had probably one of the best results in terms of testing, but also in terms of sellouts. And hot of the press, I'm happy to share with you things that I think some of you have spotted already that are details about the latest Nielsen data up to 10th of April. We can say that COVERGIRL is growing ahead of the U.S. market for the first time since a long time. The brand gained 0.6% market share by growing plus 59% in a market that's, of course booming, it's 50%. And the mag 8 that we've been talking about several times are growing, again, far ahead of the market at 65% of growth. And this has been driven by 3 consecutive weeks of share gains, 0.5 points and then 1.4, 1.7, which is, again, in a way, amplifying. And again, at customers like Target and Walmart, we have seen the highest COVERGIRL growth rates among the key retailers, which are responding very strongly to the new campaign that we've been hearing. in, recently, beginning of March on Lash Blast Clean with a strong halo effect on the Clean franchise. And again without giving any numbers about the weight of this franchise, but this is going to become clearly, it's already the biggest franchise at COVERGIRL, and it's going to grow again because it's been made up to now by, I would say, face and complexion products. So now we are adding a lot of SKUs into this area. So probably Clean franchise at COVERGIRL is going to be, by far, #1 franchise, which is already today, but in a bigger manner, but also the growth, I would say, engine for this brand. And you've been I think very happy to see the big comeback of Niki Taylor after a few decades. She's used to be the face of Clean makeup. She becomes today because she's using Simply Ageless, the face of Simply Ageless and this really is a campaign that's really rooted in many trends of the market. First, it's the 60th anniversary of COVERGIRL. Second, I would say this is really rooted in what people are looking for today, which is this, I would say, a wave of nostalgia towards things that were reassuring, things that we were happy to be in, et cetera. Three, it's really our key asset on the American market. Simply Ageless is #1 anti-aging and rejuvenating foundation on the American market. And last but not least, the average price of Simply Ageless is 50% higher than the average base price of COVERGIRL face product. So this is also accretive in terms of bringing stronger gross margin to this brand in America.

Great, thank you, Sue. So our next question is also for you from Faiza at Deutsche Bank and on a similar kind of note around the COVERGIRL turnaround. So for COVERGIRL, the focus is on the magnificent 8, and that makes perfect sense. But it doesn't seem good enough to offset the decline of the rest of the tail. So Faiza wants to understand what is the aspiration to grow COVERGIRL? Or do we simply want to stabilize it at the current level? What do we need to grow it? And similarly, how would you raise the relative quality of COVERGIRL products versus 10 to 15 years ago? What changes have we made on the formulations? And finally, on COVERGIRL, when will the in-store execution be completed?

Okay, so let's start with the last part of the question, again. The in-store execution is starting now, and we are going to, in a way, revamp something like 3,000 stores for this, I would say, coming months, which are the key, I would say, highest-productivity stores, and we'll see how things are going to evolve, and then we'll go to the next step if we feel and see that there is positive results. When it comes to COVERGIRL, I would say, product quality, honestly again I've been in this industry for now quite a long time. And COVERGIRL, and I've been using, to be very transparent with you COVERGIRL foundations, COVERGIRL mascara. I use at the moment Lash Blast Clean, et cetera. Honestly, the quality of COVERGIRL products is one of the best that you can find today on the overall makeup business, including the, I would say, the more premium side of the business. Why? Because this brand has been inventing a lot of things that are today central to the makeup industry worldwide, such as you know, the molded brushes on Lash Blast. You cannot achieve high-volume without clumps if you don't have this kind of, I would say, modern plastic brushes. You cannot achieve long wear foundation, especially now with the mask wear if you don't own the, I would say, technologies that are behind the nontransfer results, and this requires a certain kind of formulations using the power of volatile ingredients, et cetera, on the skin. And again, Clean Fresh makeup is really a formula that's been cleaning everything that people don't want to see any more in a foundation formulation. So I would say that this brand is still at the forefront of anything that consumers are looking for, be it on performance side because at the end of the day, people are looking for performance products, but also on the clean side of things, which is the new requirement that the younger, especially the Gen Z consumers, are looking for. And again, in the presentation, I was mentioning the Hispanic target that's really clearly toward this kind, I would say, of new formulation, but at the same time, highly efficient to provide long wear, to provide visible volume, and at the same time, to reassure this target of consumers when it comes to the healthiness of the formulation. And these customers that are, in general, younger for the COVERGIRL line, but also younger for the -- for our retailers, are key target to bring back business that once went into, I would say, specialty stores or maybe a more niche brands. So clearly, this brand is going in the right direction. And again, the latest Nielsen from yesterday that I've been sharing with you a few minutes ago, clearly shows that we can, not only stabilize COVERGIRL, but on key areas of the business. And there, it's really, I would say, the amplitude of the success we are going to have today on Clean Fresh and then on Simply Ageless and then on the next franchise that we are going to revive quite soon. It's clearly there that we'll be able to say that are we just stabilizing the brand? Or are we taking it to a growth mode? But I'm quite confident that what's happening today is really inventing the new COVERGIRL and the reaction of customers -- consumers, sorry, be it consumers shopping online or consumers back to stores, shopping today in stores, is absolutely, I would say, amazing for us because this was really a key element to validate this new strategy.

Great. Thank you, Sue. Our next question comes from Steph Wissink at Jefferies, and it goes to Laurent. So 2 questions. Can you talk a bit more about the working capital improvements in inventory? And there's a -- the second question is thinking about the mix by category, so mass versus prestige and across the categories, what do you see as the most ideal balance to maximize margins and free cash flow?

Okay, thank you. So indeed, on -- as I mentioned, so we have really -- we are really working on streams to improve our free cash flow and to deleverage. And inventory indeed is a key pillar of these initiatives. So there are really a few elements. So one, and we mentioned, is really about decomplexification. So we are really working, and especially in mass, we are reducing the number of SKUs because we made a deep study, and we see that we have low rotation schedules so we are reducing this. And in fact, this low rotation SKUs, they represent a very small portion of our net revenue. And then we use the shelf space on high-rotation SKUs. So it's good for the -- really for the top line. But by doing that, we simplify the portfolio, and it's a key lever to reduce inventory. So these are really the strong actions we are working on. Point number two is also we are really working with the supply chain team on forecast accuracy. So it's really 360 work between supply chain and commercial. So it's really, okay, improving this forecast accuracy. So it is 360-degree again. And so the objective of this work is, of course, we are reducing inventories, so we are really gaining immediate cash. But even beyond this is also a strong lever to improve our gross margin. By doing that, we are reducing what we are calling E&O, which is extinct and obsolete, which are products that sometimes we cannot sell anymore or we need even to destroy because, okay, they are overstocked. So it's really a vision or a positive circle that we are implementing with supply chain. So again, gaining cash, but also improving the gross margin. So that's really the strong work we are doing in inventory. And again, I'm insisting, it's not only supply chain. It's a global company initiative, which bringing very strong positive element on all the elements. On your second question, so mass and prestige, so today, the share is about 40% of our portfolio is mass and 60% is prestige. Sue has really clearly explained the strategy. So indeed, on the one hand, we are stabilizing the mass business. And then we have a lot of initiatives indeed to improve all the premium luxury to increase, to keep a very positive track record on fragrance. And again, accelerating skin care and also China. And as we mentioned, this part of the portfolio is very accretive. So yes, it will have a higher share in the total portfolio. And in addition, it's accretive for the margin. So to answer your point, yes, I mean, this part of premium, skin care and also D2C. We have a higher share within this strategy.

Great, thank you, Laurent. Our next question is for Sue, and it comes from Javier Escalante at Evercore, and the question is, what percentage of the company's sales are expected to be phased out? And how are these declines, how can they obscure the turnaround? And to what extent pulling resources on these noncore brands can accelerate their declines and lead to basically operating deleverage? So focusing on the tail and how we are phasing that out and the impact on the business.

Can you said it again, Olga? Sorry, I didn't hear the beginning of the question.

Sure, so I think the question is focused on what percentage of our overall current sales we expect to phase out. And what is the impact on losing that scale on our business and then our presence with retailers and customers?

Okay. I'm not sure I understood the question precisely, but let me just answer the way I understand it. If you take, for example, our mass beauty business, we've been talking a lot about tails, our COVERGIRL. I've been asked several times. What does it mean, the 30% that is not part of the 70% to 80% that we call the magnificent 8. In fact, this part of the business, it's a lot of SKUS, but that represents a very small amount of turnover. It's something like 40% of SKUs representing less than 5% of the revenue in Consumer Beauty, for example, if you want to have an image. So this part of the business is, not only going to, once we would phase out from this, is going to help us, as Laurent just explained, to overexpose what we call, if you take COVERGIRL, the magnificent 8, and we have exactly the same kind of thinking when it comes to Rimmel or Max Factor in Europe, which are brands in which there are a few sub-brands driving not only the growth, but also the profitability and the success of the brand. And these are areas of the business that we were under exposing, in fact, and up to now. So we're going to overexpose these areas of the business. So again, these tails, I don't see them as removing any kind of growth potential from the company for a simple reason, in fact, what happened up to now, and this is part, if I take again the example of COVERGIRL of the mistakes, as I called them from the past, which is that we were investing media behind sub-brands, sometimes once, sometimes twice during the year, and then we move to the next sub brand. And this is not the best way to build a brand in a way. A brand is built with, I would say, core sub-brands that stand for something on which to invest year-after-year. And any new SKU that you are going to bring to the game should ideally be under one or the other of these sub-brands. And as Laurent was mentioning it in the question that he had earlier, I would say that this -- how should I say this? Yes, this part of the work, which we summarize sometimes and we say fewer and bigger, it looks like just like a formula like this, but this is really going from the top of the company to any kind of department and including making sure any new launch is part of this strategy. And this has huge impacts because when you do fewer and bigger, the quantities are bigger. The cost of goods are better. The gross margin, by definition, improves. The E&O improves, all the rest and the investment of media, the media investment is behind key bets of the company, and I can give you an infinite list of consequences of this new thinking that we're implementing today on a daily basis at Coty now that we are starting to think about '22 and '23 and '24. Of course, this is clearly an area we are making huge progress almost on a daily basis today.

Great, thank you, Sue. The next question is also for you from Chris Carry at Wells Fargo. It's a 3 part question. So the first part is around how we're thinking about the global category growth rate going forward and Coty getting back to the category growth rate. The second question is around with all of the initiatives that we've highlighted around getting skincare to a higher percentage of sales prestige cosmetics and China to a higher percentage of sales, what is our -- can we comment on the investments we think we need to have in order to hit these targets? And more broadly, the appropriate level of advertising investment as a percentage of sales going forward.

Thank you. So again, when it comes to the global growth of the market, again, what we see at Coty is, again, to grow, hopefully as soon as possible, in line with the mass market growth. Again, this is clearly our objective on our key make up brands, and we can imagine that on a brand like adidas, but also on other brands have not been talking about that are key assets such as Bruno Banani in Germany or Vera Wang license in America when it comes to mass fragrances. These are, I would say, jewels of the company that we intend to take to the next level. The idea is really to stabilize this business and to reach a growth that's in parity with the market. This is one. Clearly, the growth of the company is going to come from the luxury side. It's been the case up to now for the luxury division that's been growing sometimes in parity with the market, sometimes better. And again, the new growth engines we're adding to this division are going hopefully to take us ahead of this level of the luxury growth. The second question, which is about skincare, prestige and China, are they going to help us fuel? And it's the same question, I guess, about advertising. Are they going to help us fuel, I would say, this growth? In fact, the equation I have in mind, and Laurent and myself are discussing on a daily basis, it's the one that's growth of the revenue growth of the gross margin, the 2 together, yes, are going to develop, I would say, money to invest behind these brands, including advertising campaigns when it comes to skin care. The prestige makeup the results that we had today on Gucci has been launched recently on Tmall are absolutely phenomenal. Of course, as you can imagine, this is going to be invested in key countries, including China. That's part of our strategic, I would say, objectives. When it comes to advertising levels, again, we've been saying during the Q2 earnings that we intend to be back to the levels of 2019, which is already the case in percentage and during entering Q4, the idea and the first month of Q4, that's now, the idea is really to make sure we are putting money, including in absolute value, behind the key brands that's at the level of 2019. So this is clearly the reason why we've been accelerating on the cost reduction program, the reason why we've been putting in place this fewer, bigger, I would say, strategy. The reason why we are doing this pay-as-we-go new way of working, which is top-down, bottom-up way of deciding where to invest money, in which country, behind which brand. This is really helping us to put amounts of money that are significantly at the level of 2019, sometimes over on the key bets of the company rather than stretch among the large number of brands just to say, overall, we are at the level of '19. The idea is that we are at the level of '19 or sometimes higher on the key bets of the company. And that's the way we would like you to look at the company now and on.

Great, thank you, Sue. Our next question goes to Laurent, and it comes from Carla Casella at JPMorgan. And it's a 2-part question. So the first part is around the new COVERGIRL displays, which was beautiful, but the question is around how much we expect to spend on our display CapEx in the next year or so? And the second part of the question is around the refinancing of our term loans. Do you have any additional near-term plans to extend the revolver and remaining term loan maturities? And are we comfortable with the leverage covenants we have beginning in June?

Okay, so on the first question on COVERGIRL, again, this is exactly what Sue has explained. So when we are talking about media investment, CapEx is part of the discussion. So same story. We keep our CapEx under control. So there is a really strong discipline on CapEx, but we make sure that we focus this CapEx on the big bets and where there is ROI. So concretely, what we are doing now exactly to support the COVERGIRL plan is that we are shifting some CapEx really to make this COVERGIRL expansion and also in-store as a priority. So we are taking the money from other initiatives where there is no ROI. And again, it's a total review. We are also taking -- CapEx is also from IT, from supply chain or sometimes from projects where the payback is too long. So again, we are stopping projects where there is no payback, and we are putting the money on big bets like COVERGIRL. So it's not an increase in CapEx. It's again better allocation on CapEx. So now on -- I move to the second question. So indeed, on the term loan, yes. So you saw -- and I explained that we had this successful launch issue. So we are using it to reduce a significant part of our term loan. And now indeed, we are going to work actively, and we have new initiatives indeed to postpone and to amend and extend maturity of this term loan and same for the revolver. So to answer your point, and we will keep you posted, but definitely, yes, we are going to work and so that soon. We -- this maturity in '23 is extended to '25 or '26.

Great, thank you, Laurent. The next question goes to Sue from [ Eva Correga ] at Bank of America. How should we think about the potential for the fragrance category in China, given low per capita consumption in the category across much of Asia, including Japan?

Yes, that's a good question, it's been a question that we've been discussing internally a lot. It is true that today, this is, I would say, the lowest of the big categories in China, but it's one of the fastest in terms of growth, specifically on the highest end of the market. Again, you've seen during my presentation how what we call premium plus or ultra-premium is growing far ahead of the rest of the market. Specifically in China, but not only in China. And this is the reason why we are not only, of course, putting our resources between our fragrance powerhouses, Gucci, Burberry, Calvin Klein, Hugo Boss, Chloe, et cetera, but we are also shifting some investment, not media investment because this premium, ultra-premium business is all about, I would say, exclusivity, presence in stores, beautiful presentation in stores, experience in stores. And if I take the example of one of our jewels, which is Chloe Atelier des Fleurs, which is a brand that's all about mimicking the atmosphere of a florist. If you go to one of the most beautiful florists in America or anywhere else, you are in a world that you're surrounded with the sun, sunflowers. This is the whole story of Chloe Atelier des Fleurs. And as you can imagine, this resonates very strongly with Chinese consumers. And this brand, for example, if you take this example, and it's not the only one that has the highest productivity among niche and artisanal brands at Sephora, where it's present today in China. So again, we're going to have 2 arms, if I may say, the one that's towards kind of education of Chinese consumers when it comes to mainstream fragrances. And then we have the tip of the pyramid where have consumers that are today at the forefront of anything new that are ready to spend $150, $200, $300 be it on Atelier des Fleurs, on Gucci, The Alchemist Garden around the same kind of collection under Burberry. And we are playing with both and we'll see, which one is going to become the key driver of the Chinese market. But we feel that in the -- in China, sorry, next to skincare, that's where the potential for Coty is huge. Prestige makeup where the potential is starting to be visible for Coty. And again, the path is very, very important in the future. Still, we have a third engine, which is the fragrance one. And as the #1 fragrance maker having probably one of the most beautiful portfolio in the fragrance and the prestige fragrance arena, we have the third engine if this becomes a key area of the Chinese business.

Great, thank you, Sue. Our next question goes to you from Robert Ottenstein at Evercore, asking to discuss the new hire from L'oréal at JD. And what is -- what our management team is expected to look like?

Okay. So yes, I think -- what is he referring to?

I think he's talking about today's announcement that JD has a hire from L'oréal joining on the digital side.

Okay. Yes, my understanding is that this hiring, the person that we are talking about, will not be part of Coty's Board, of course, and it's not going to be involved in any matter that has to do with Coty today. So again, over this, I have no comments to do on this, I would say, new hiring. So many things to happen on Coty so 100% focused on what's happening at Coty today.

Great, thank you. Sue the next question is also from you -- for you. Which brand do you expect to be the biggest contributor to your skin care growth? And on that similar vein, has the new Lancaster counter opened in Hainan? And if so, how have the initial results been?

So yes, that's a key question again. Yes, you're right. Lancaster, I've been saying during the last calls that we were shifting again and presented it today during the strat plan. This brand for me has the potential to become one of the key skincare brands in China and hopefully one day elsewhere. So for me, this brand is clearly going to be our #1 and first, at least in terms of time line, growth engine in China. And again, the first, I would say, feedbacks that we had is that the counter we are intending to open in Hainan, which is going to be -- to look like what the dream of how this brand should look like, is going to open beginning of June. But we've opened another one on a temporary location with absolutely no support and the latest sell out we got from there give us an idea of what's the potential of Lancaster in Hainan, and therefore, in the Chinese world. And the recent, I would say sell-out, we've got to say that this brand could become a top 20 skincare brand in China at the level of brands such as Elizabeth Arden, that's been there for years. Or Caudalie, which is another, I would say, French skincare brand. So this gives us a lot of confidence in how much this brand has potential when it's going to become a skincare brand, presenting the different layers of any skincare brand in China with a basic offer, cleansers, moisturizers, the 7 or 8 steps of the skincare, and hopefully, one day, super premium offer on the -- on this line. So for me, it's going to be the #1 growth drivers, but it's not going to be the only one. This one is clearly the one I see for China. In the U.S., which is a very different market from the Chinese one. Clearly, we are going to reposition philosophy as I presented it today to you. I didn't say more because we intend to present this to the retailers very soon. And then, of course, as you can imagine, Kylie skincare and then Kim Kardashian, SKKN by Kim line are going to be huge growth drivers for this category in America and probably in the rest of the world. So we have engines that are adapted to the different markets. As you know, China is all about ultra premiumness. It's there where you have 40% of growth. And America is all about, I would say, premium entry price -- entry premium, entry prestige products where Kim and Kylie has a huge potential to take us to the next level together with philosophy. And by the way, these 3 brands are DTC-operated, and therefore, you can imagine that they are also margin-accretive for the American market. And of course, on the other markets where they will be operated.

Great. Thank you, Sue. Our next question comes from Eric Heinz, and it goes to you as well. With all the changes that are occurring throughout the organization, are incentives being changed to motivate the organization differently than before?

Yes, this is a hot topic, as you can imagine. We are thinking about how to start fiscal '22. And again, the work that has been done is going in the right direction. We are reimagining how to build, of course, the team of the talents at Coty worldwide. A lot of focus is being made in areas where there is, of course, future potential for growth. And we intend to put in place what needs to be put in place to really make sure not only we are growing our talents, the retention of our talents, but also bringing into the company as much as possible new talents, specifically on the skincare area and, of course, from the digital side of the business.

Great. Thank you. And I think this would probably be our last question, and it's focused on e-commerce. What can e-commerce mix reach in the next 3 to 5 years? And how far long are we in terms of building our DTC backbone and which brands are driving that?

So let's start with the second part of the question. When it comes to DTC, backbone and again, what are the brands, as I said it to you, today, it's clearly on one side in America. Kylie Skin Care, soon Kim -- SKKN by Kim line of skincare and of course, philosophy. By the way, philosophy on its direct-to-consumer, I would say, channel is showing strong -- very strong growth, like a lot of skin brands before and now during the pandemic and now that we are hopefully out of this, I would say, moment. So this is an area we are progressing very fast. As you know it, we've been reorganizing the house company around digital, and digital is becoming a kind of central engine. And this is, by the way, I would say, also when you start after the others, the way you do it is probably easier because you don't need to reorganize the whole company and make sure digital is a key part of it. We are reorganizing the company with digital at the center, creating a digital content factory in-house. Same thing when it comes to direct to consumers in China. And again, I've been sharing with you the first outstanding results of our fashion houses on Tmall, such as Gucci, the third or fourth, I think, top 4 launch and since 2018 on this platform. So again, these are areas that are, of course, highly accretive for the business, but that are areas in which we are going to build a lot of capabilities, expertise. And the rest of the digital, I would say, priorities, we are really just starting to touch. And this is, for me, a huge possibility. I've been sharing this with you during the presentation. When it comes to what we call advocacy, live shopping and social e-commerce this is clearly an area where because of our digital listening tools that we are putting in place, tools and teams by the way, we'll be probably able on an hourly basis, on a daily basis to catch where there is advocacy and to transform this into social e-commerce or live streaming shopping. So these are areas in which the company is just starting, I would say, to put the finger on, and it's probably going to be an infinite source of progress and an infinite source of also data gathering to learn more about who are our consumers. In terms of what's the level, you know the levels we've been communicating at the end of calendar '20, which were around 20%, strongly growing by 40% versus a year ago, of course. But again, I don't enter into this race of the levels, et cetera. For me, this is going to become a key channel of sales for any beauty industry or any company in the world, by the way. And idea is that we have to be at the level of this, I would say, part of the business, and this is clearly an area where we intend to be as big as possible, probably less in terms of percentages because it's not going to be anything in the near future, but in terms of making sure we are on par or better than the market. And the latest figures we got from pure players such as Amazon show that, for example, in America, but not only there in U.K., we are clearly progressing ahead of the different categories we are selling there, be it mass cosmetics or mass fragrances, sometimes overperforming by 10 to 20 points. So it's really a new area that's happening for the company, and we intend to be where people are shopping and ideally overperform the category.

Great. Thank you, Sue. I think that probably brings us to an end. If you want to make any ending remarks.

No. I think, hopefully, this has been clarifying again what is Coty. For me, understanding is buying, if I may say. So probably today, people are understanding what Coty stands for, how beautiful is the portfolio of this company, how beautiful is the potential of this company. And on top of, of course, the amazing portfolio of brands we have today. I've been showing you on the very, very quick and sense of emergency, if I may say, that we've been putting in place in the company since September 2020 in the middle of the pandemic, as you can imagine, how this was not easy. But honestly, we are very, very happy to see progress, to see green shoots on COVERGIRL. What we are going to announce month after month, probably for the different repositionings, support people, new advertising, new positioning is clearly giving -- is going to give you a sense of how this company is operating a beautiful and wonderful portfolio of brands. And this, for me, was a key, I would say, a message I wanted to share with you guys today. And of course, as you can imagine, it's impossible without a great team of talent. And again, we've been, of course, promoting people in-house, hiring people from outside. Everyone is a huge expert not only of the beauty industry, but also of the fields they are taking care of. And this is really the new Coty we want -- I want people to look, to follow and hopefully, to be part of. Thank you very much.