Coty Inc. (COTY) Earnings Call Transcript & Summary

Good. Fantastic, great to see everyone. Thank you for coming. A very, very warm welcome to Coty's ever -- first-ever conference -- investor conference here in Paris. And without further ado, let me introduce our CEO, Sue Nabi.

Good afternoon, everyone. So welcome, everyone. As you know it, we are really altogether delighted to welcome you to our investor conference here at Hotel D'Or Louvre in Paris. And you know later why hotel D'Or Louvre. I'm very happy to be here, as you can guess it, to share an overview of the company as we've made tremendous progress over the last few years, setting a clear strategy, executing on our growth pillars and significantly improving the financial standing of the company. So there is one key message I want to convey to all of you today. Coty is a beauty powerhouse with deep European roots and a strong ongoing commitment to Europe, and we are unleashing our profitable growth engines as we capture the significant untapped potential in front of us in this very highly attractive beauty category. So let me first introduce the team who will be presenting with me today. As background on myself, I spent close to 2 decades at L'Oréal, leading and transforming the company's largest brands like L'Oréal Paris and Lancome before leaving to found ultra-premium skincare brand, Orveda. In mid-2020, I joined Coty as the CEO of this company. And in the last 2.5 years, my team and I have been leading Coty's amazing transformation into a beauty powerhouse. Today, you'll hear from our CFO, that most of you know, Laurent Mercier, who has brought a very high level of financial discipline and skill set to significantly improve the financial positioning of Coty. You'll hear from Caroline Andreotti, our newly appointed Prestige Chief Commercial Officer, who has deep knowledge not only on our core fragrance, skincare and color cosmetic categories, but also within Coty having spent 15 years in the company. You'll also hear from our Consumer Beauty Chief Commercial Officer, Alexis Vaganay, who brings extensive knowledge of the complex mass beauty market, both through his extended tenure at Coty and other leading consumer companies. Our leadership team has worked diligently to achieve the tremendous progress we've had over the past few years and we're very, very excited to finally share that story with you today here in Paris. We're going to start today with an overview of who Coty is. I'll then focus on our strategy, the progress we've made so far, and more importantly, the significant white space opportunities in front of us. Alexis will focus on Consumer Beauty strategic pillar and Caroline will discuss our prestige strategy covering fragrances, makeup and skincare in both divisions. Then Laurent will review our strong financial progress over the past 2 years, our near term outlook and our attractive and balanced growth algorithm. So let me first summarize the main messages we want to leave you with today. First, Coty is successfully delivering on the new strategy, my team and I unveiled in 2021. Second, we continue to see robust beauty demand across markets and across categories. Number three, Coty has differentiated and scaled end-to-end capabilities and industry-leading IP to propel our next phase of growth. Number four, we are a company rooted in Europe with over 120 years of European heritage, innovation and operations driving business momentum. Number five, we are actively capturing white space opportunities as we grow market share in China and in travel retail. Number six, we are are making strong progress towards sustainability and digital leadership. As you know, we are increasing our fiscal '23 revenue and EBITDA outlook, which is a true testament to the attractiveness of both the beauty industry and our strong execution. And finally, we are delivering a best-in-class medium-term growth algorithm including a mid- to high 20s percentage EPS, CAGR, active deleveraging and capital returns as we propel our growth story and strengthen our position as a true beauty powerhouse. Let me first start by sharing with you an overview of Coty. As you know it, we are not only an established player in beauty with a strong European heritage and operations, but we established ourselves as a beauty powerhouse with significant untapped potential in the portfolio. Last year, we reported $5.3 billion in revenues, over $900 million in EBITDA. We operate in over 125 countries. We have roughly 11,000 employees, 8 manufacturing plants. In fact, we operate the largest fragrance manufacturing plant in the world, which is located in Spain. And we are top 3 globally in both fragrances and mass color cosmetics. As you can see on this slide, our portfolio includes some of the leading and most desirable global beauty brands. These include well-known brands like Hugo Boss, Burberry and Chloé in the prestige channel and Rimmel, Bourjois, Max Factor in the consumer beauty channel. At the same time, we have beautiful brands that are only building voice and awareness like Lancaster and Orveda, which we would be scaling in the coming quarters and coming years. We are a company with a rich history, whose legacy is rooted here right here in Paris. Coty was founded in 1904 in France as a fragrance pioneer opening fine fragrance to all society with the launch of La Rose Jacqueminot. And we've been a global leader in beauty for the past 120 years with over 50 brands. You can see on this slide some of the major milestones in our rich and storied history. Whether it's the opening of our first Coty boutique in Paris' Place Vendôme nearby here in 1907, the move of Coty's operations to the U.S. in the leap-up to World War II or the acquisition of some of our iconic European brands. I'm thinking about Lancaster, Chloé or Bourjois in the '90s or in the years 2000. With such a rich heritage, it's only fitting that on the 120th anniversary of Coty, we would come full circle to our roots not only by exploring the dual listing of our shares in Paris but also launching a Coty-branded fragrance line called Infiniment Coty Paris, which you will hear more about today. In fact, our French and American identity has been at the root of Coty from the beginning. This Coty ad from 1947 underscores 2 core pillars on our ongoing legacy in beauty, a commitment to technological innovation and product excellence and our deep ties between France and the U.S. This very hotel has a special connection with Coty. We are just around the corner Grand Magasins du Louvre where François Coty famously dropped the La Rose Jacqueminot perfume on the floor with the scent attracting customers and igniting the modern day fragrance industry. We're also very close to Paris' Place Vendôme, where the first Coty boutique was opened. At the same time, this hotel is in and of itself emblematic of Coty's ambitions. Almost 150 years ago, this very room hosted the fundraising event for the Statue of Liberty, which commemorated the historic relations between France and the U.S.A. Today, we are similarly aiming to unite our French and American roots and centers of gravity by engaging the investment communities in France, in Europe and in the U.S. And this video gives a great introduction into Coty's rich history and our beautiful brand portfolio, spanning different channels, different categories and different price points. Let's have a look now. [Presentation]

That's a good summary. So we are one of the few companies operating with 2 divisions that reach consumers across price points. This is a critical element in our business diversification strategy. As we've continued to drive the premiumization of our portfolio, our Prestige division now accounts for 62% of our sales. Our Consumer Beauty division accounts for 38% of the sales of the company. Our portfolio, as you've seen, it is diversified across categories. Fiscal year-to-date through the third quarter, Prestige fragrances accounted for over 50% of the mix. Mass cosmetics in the second -- is the second largest category at 25% of the mix of the company. Skincare and Prestige cosmetics are still fairly small with each at a low to mid-single-digit percentages of the mix, and these are the areas we plan to meaningfully grow in the coming years. Finally, body care and mass fragrances are each mid- to high single digits. We're also diversified geographically. North America is roughly 1/3 of our revenues. Western Europe is less than 30%. We are still small in China, in Asia Pacific and Latin America, and of course, see a lot of white space opportunity to grow meaningfully in each of these markets. This is particularly true in China, which currently accounts for roughly 4% of our sales, but represent a low teens percentage of the global beauty market. And travel retail accounts for 8% of our sales year-to-date, continuing to grow at a tremendous pace. As I mentioned earlier, Coty was founded in Paris, almost 120 years ago, and our ties and commitment to Europe have been unwavering ever since. We hold leading positions in the European fragrance and cosmetics markets and a direct presence in over 10 European countries. We also have a very strong presence and commitment to Europe. More generally, with over half of our employees based in the EMEA region and half of our 8 manufacturing plants located in Europe, which underpin our Made in France and Made in Monaco ethos. Not only do we have extensive operations and footprint in Europe and leading positions in our categories, but many of our brands were also founded here in Europe. You can see on this slide many of our iconic European brands, spanning from Prestige brands, think of Hugo Boss, Burberry, Chloé and Davidoff to Consumer Beauty brands like Rimmel, Adidas, Bruno Banani or Bourjois. While there are many beauty players competing globally, we are one of the few to have true end-to-end beauty capabilities, spanning brands, marketing and digital, innovation and R&D, manufacturing and of course, high rich distribution. Let me spend a few minutes going into more details on each of these critical areas. Starting with the first component, which is our brands. You can see here our beautiful portfolio of brands and how they truly reach consumers across all price points. Starting with mass brands, like CoverGirl and Rimmel with many products priced below $10. All the way up to ultra-premium with prices ranging from $150 to $450 led by brands like Orveda, Chloé Atelier des Fleurs, the recently launched Lancaster in France and the just announced Infiniment Coty Paris fragrance collection. As you can see here, our brands truly resonate with Gen Z consumers because of our commitment to sustainability, our ability to do digital activations and of course, our partnership with a leading Gen Z cultural icons. First, we are a leader in clean, vegan and sustainable products, whether it's Rimmel's Kind & Free, vegan and creative makeup branch or Gucci, Where My Heart Beats, the first globally distributed fragrance, manufactured using alcohol from 100% up-cycled carbon emissions from factories. Next, social media has made our launches and campaigns go viral. For example, CoverGirl Yummy Gloss latest campaign has been a viral hit with Gen Z consumers reaching over 100 million views on TikTok while the Clean Fresh TikTok challenge reached 6 billion views. And finally, we are partnering with brand ambassadors. Think of Kylie Jenner, Kim Kardashian or Miley Cyrus, who all combined together has close to 1 billion followers on social media. Coty is also a company with very strong expertise, know-how and IP in each of our core key categories. As you can see here, our R&D organization is anchored in category-led R&D centers of excellence. We have a fragrance center of excellence in Switzerland. We have a cosmetics -- color cosmetic center of excellence in North America. We have a skincare center of excellence in Monaco and increasingly China, we have a body care center of excellence in Brazil with a focus on what we call melanin rich skins. Let me now take a few minutes to discuss Coty's extensive expertise and technology across our key categories, fragrances, cosmetics and of course, skincare. Starting with fragrances. As you know, this company has been reinventing modern perfumery for the last 180 years, starting with Rimmel's first perfume in the 1800s and Francois Coty La Rose Jacqueminot in the early 1900s. In this area, we have close to 130 scientists and industry experts, and we have over 80 patents and patent applications in this space. As you can see here, at Coty, we leverage fragrance and technology to bring disruptive effective innovation. With biomimicry, we sampled the molecules released by the plants and the flowers and leverage our analytical equipment and technical perfumery experts to master fully reproduce the captured scent. Similarly, as color is one of the identities of a fragrance and some ingredients tend to change color over time, our technical teams have developed sophisticated algorithm to deliver a broad range of color alternatives for our fragrance brands. We also have industry-leading IP around what we call cyclodextrins or sugar molecules and sugar derivative molecules. Both of these technologies adjust the volatility of fragrance molecules, allowing the release of specific fragrance nodes over the course of the day. They also enable us to create unique scent profiles. This technology is unique to Coty and position us as a clear technological leader in the fragrance area. We have integrated these proprietary technologies into some of our fragrances and they are increasingly being integrated in our ultra-premium fragrance innovations as a key point of differentiation, particularly as consumers are more and more looking for long-lasting and high diffusing sense. Finally, with alcohol as the #1 fragrance ingredient by volume, we've become the global leader in co-developing carbon-captured alcohol, which meets the quality standard of Prestige fragrance formulations. In fact, we recently launched the world's first globally distributed fragrance manufactured using ethanol from 100% recycled carbon emissions in a partnership with biotech LanzaTech. We are also coupling our fragrance know-how with growing research on fragrance and neuroscience research. In the last 10 years, we've partnered on research in key areas like fragrance and sleep, fragrance impact on sports performance led by brands like Adidas, and we have also been innovating in our products the connection between fragrance and happiness or confidence. All of these research areas underscore how fragrances appeal to consumers at the neuro level. Shifting now to our deep expertise in color cosmetics. We've also been fueling innovation with color cosmetics for over 160 years. And we've been pioneering new technologies in skincare for over 70 years. As you can see on this slide, we have large teams of scientists and industry experts working on each of these critical beauty categories. In fact, as we've actively expanded clean product ranges for each of our cosmetic brands, we've become the global leader in clean cosmetics and we continue to be very active in our research and patent activity with 7 patent applications under review across these key categories. One of the key areas in cosmetics where Coty truly excels and leads the industry is mascara. Our brands have been at the forefront of the biggest mascara innovations. In fact, for those who don't know, Rimmel invented the first mascara. And Bourjois created recently a very innovative design that functions as 2 mascaras in 1, which was the #1 mascara in France last year. And due to our leadership in mascara, we recently launched CoverGirl's new Lash Blast Clean Volume Mascara, which is the brand's first plant-powered, clean mascara. While our skincare business is still small, it's important to highlight that we have been leading skincare science and technology now for half a century. We have over 50 leading skincare patents among which we have several patents that cover the top skincare trends of today and tomorrow including vectorization of active ingredients and full light protection. Over 80 published skincare scientific studies and over 120 dedicated skincare scientists and industry experts. And all of this brings a robust innovation pipeline for the coming years. So on this slide, you can see that Coty and specifically our Lancaster brand has been bringing leading-edge skincare technology to the market since 1948. Lancaster was the first to patent retinal formulations. It was also the first brand to introduce DNA repair enzymes technologies, retinal vectorization or oxygen delivery molecules and the first and still the only patent that covers what we call full light protection, be it visible or invisible light. And with long-term patents on these core skincare technologies and more breakthrough innovation now launching in market including the ultra-premium Lancaster Ligne Princière line, the Orveda new omnipotent serum or Philosophy dose of wisdom serum, it's clear that this company is a beauty company deeply rooted in science. A key pillar in our leading end-to-end capabilities is our manufacturing footprint. As you've heard it, we have 8 manufacturing facilities across 4 continents, and we have advanced several of our facilities to become carbon-neutral, each facility specializes in key beauty categories, including the largest fragrance factory in the world located in Spain. In total, we produced over 1 billion products annually in state-of-the-art facilities, which we continue to upgrade, to automate and continuously improve in terms of productivity and rate utilization. In a world where global supply chains have been disrupted over the past few years where localized manufacturing is increasingly paramount and where scaled players are prioritized by suppliers, our manufacturing capabilities are a crucial competitive advantage. In fact, we manufacture roughly 80% of our products in-house. And hand in hand with our leading manufacturing capabilities are our extensive commercial and distribution reach. We have distribution centers and warehouses all over the world with the process and -- which process and ship over 0.5 million customer orders every year. We also have sales organizations directly running our operations in over 20 countries and directly and indirectly reaching over 125 markets. This means our brands are able to reach over 100,000 doors globally, spanning from the leading luxury department stores to perfumeries, specialty beauty retailers, drugstores, mass merchants, duty-free stores, niche boutiques and of course, e-com pure players as well as social media platform, which are increasingly transforming into pure commerce platforms. There are very few players who rival our commercial scale and reach in this beauty industry. Of course, the combination of our deep multi-category beauty expertise, a portfolio of key technologies and patents, leading manufacturing capabilities and extensive distribution and commercial capabilities, all this reinforce the scale of our platform and position Coty as the partner of choice for global beauty brand licensors. For Coty, our core existing business and forward strategy are fueled by a very balanced between our own brands and licensed brands, playing across the Prestige and Consumer Beauty divisions. And it's clear that for global luxury houses, we have spent decades building long-lasting desirable brands. Coty is a natural partner to expand their brands into the world, very competitive world of beauty. To this long and enduring partnership, we bring some of the best IP and beauty know-how including patents for long-lasting fragrances, which is, as you know, it increasingly is a key priority for consumers around the world. We have proven multi-category beauty industry expertise and best-in-class consumer insights and testing in key markets, which in turn results in a track record of launching market-leading successful innovations. We have, as you've seen, its state-of-the-art manufacturing capabilities, including, again, the largest fragrance manufacturing plant in the world, which manufactures over 180 million units every year. We have an extensive distribution, sales and marketing capabilities across the globe as we have local affiliates directly managing close to 30 markets, enabling our top brands to reach over 20,000 doors globally. These internal capabilities truly highlight the scale of our beauty platform, which very few in the industry can match. Building up such capabilities in-house is prohibitively costly as you can imagine, time consuming and risky, which is why we have been partnering with many of our brands for over 2 decades. And in exchange for the global brand rights, we compensate our brand partners with a royalty stream as a percentage of the sales. In fact, there are only a few players in this industry who can manage the complexity of a licensing model and offer fashion brands, such end-to-end capabilities at the appropriate scale and of course, reach. As you've seen it, we have a highly concentrated high-quality portfolio of licensed brands with long-standing relationships lasting over 25 years. We don't have any sizable licenses up for renewal in the next 5 years. In fact, the average remaining duration of Coty's top 7 licenses, which account approximately 90% of our Prestige fragrance business is now 11 years. It's important to highlight that our business model is anchored on driving balanced growth across Coty-owned brands and Coty-licensed brands. This is true in our existing core business of Prestige fragrances, but also in Consumer Beauty. In Prestige fragrances, which is a $40 billion market, growing mid- to high single digits, our incredibly strong partnership with our leading licenses and thinking of Hugo Boss, Calvin Klein, Marc Jacobs, Gucci, Burberry, mean that on average, we have over a decade remaining for top 7 licenses. At the same time, we have attractive entry price fragrance brands that we can continue to expand in the $18 billion mass fragrance market, including in markets like Brazil. We are also well established in the $40 billion Consumer Beauty makeup market, which is growing low to mid-single digits and where our own brands like CoverGirl, Rimmel and Max Factor are excelling. Looking forward, we are actively targeting significant white space opportunities, in Prestige skincare, in ultra-premium niche fragrances and in Prestige makeup. Here again, we will be leveraging a combination of Coty-owned brands and licensed brands to win in these very attractive categories. The $70 billion Prestige skincare market continues to grow in the mid- to high single digits. And we have begun activating core Coty brands, think of Lancaster, Philosophy or Orveda with promising initial results and much more still to come. The ultra-premium niche fragrance market is still relatively small at roughly $4 billion, but growing very, very quickly and our extension of some of our lines at the brand like Chloé Atelier des Fleurs or Burberry with signatures into this segment are both already proving successful. And we will be supplementing this with our recently announced Infiniment Coty Paris fragrance brand, which we have developed 100% in-house. Finally, the $30 million -- $30 billion, sorry, Prestige makeup market which continues to grow in the mid-single digits, and we have there expanded some of our brands, think of Burberry or Gucci while at the same time, driving the strong Gen Z appeal of brands such as Kylie Cosmetics. A critical part of our strategy is our unwavering focus on driving a balanced growth. As you can see on this very important slide, our Q3 fiscal '23 year-to-date like-for-like growth is very balanced across segments, across regions, across volume, price and mix. We delivered double-digit growth in both divisions year-to-date, fueled by low single-digit volume growth and high single-digit expansion via price and mix. Geographically, our growth was broad-based, driven by all regions, as you can see it, particularly Americas and EMEA. Our Q3 fiscal '23 year-to-date sales growth is also very balanced by brand. Not only do we have a broad-based portfolio of brands with even our leading brands at all below approximately 10% of revenues. But as you can see on the graph, we aren't overly relying on any 1 brand to drive our growth now and for the future. The 10% core like-for-like growth we delivered in the first 9 months as of the year were driven by a balanced mix of Prestige brands like Hugo Boss, Calvin Klein, Burberry and consumer brands like CoverGirl, Rimmel and Monange in Brazil. As we've continued to drive the premiumization of our portfolio, our Prestige division now accounts for 62% of sales, up from 52% in fiscal '19. This 10% increase in Prestige revenues mix is proof that our strategy to premiumize by accelerating our luxury fragrance business, led in particular by female fragrances establishing a presence in Prestige makeup and building out our skincare portfolio is working. We still have ambition for further premiumization and expect that Prestige will account for roughly 67% of our revenues in fiscal '26. Key differentiator of Coty today versus the Coty several years ago is, this company is now led by a team of seasoned beauty executives. Most members of our Executive Committee have 20 to 25 years of experience in beauty. I myself spent 2 decades at L'Oréal and then started my own skincare brand. We have altogether 300 years of combined experience in beauty. As you know it, for over a century, our brands have empowered people to express themselves and to create their own vision of beauty. In October 2022, we unveiled our purpose, vision and values, which step further codifying our corporate values and culture under the framework of being forward and being fearless in our processes, in our businesses and of course, with people, we are all encouraging the same Philosophy. We see fearless, kindness of ourselves of orders and our planet as a strength, as a value to live by and a commitment to standby. To sum up, in Prestige, we are excelling in each of our 3 categories. In fragrance, we have a top 3 market position globally with strong category momentum in each region and large innovation pipeline. Our skincare strategy is in full motion with an attractive brand portfolio, strong patents, IP and expertise that started already to resonate with consumers, especially in China. In Prestige Cosmetics, our brands have increased productivity and reach with expanding distribution and assortment for brands like KKW Beauty, Burberry Beauty or Gucci Beauty. At the same time, our Consumer Beauty business captures the value-conscious consumers with high-quality and cool beauty products at affordable prices. Our leading global brands are at the forefront of clean color cosmetics and are back to share growth with especially strong performances in the U.S. and in Europe. In mass fragrances, we are seizing white space opportunities, including in Brazil, which, as you know, it is the largest fragrance market. And in skincare, we are capitalizing on the success of local Brazilian brands and white space areas for a brand like Adidas. We're also using our existing cosmetics brand to expand into hybrid skincare offerings. With that overview of who Coty is, let me now share the great progress we've made in executing on our strategy and the significant white space opportunities still in front of us. As you know, in a complex global environment, beauty remains one of the fastest growing consumer categories and consumer demand for beauty product remains as strong as ever. Globally, the category is expected to grow at a CAGR of roughly 6% by 2027 with roughly 8% CAGR in China and roughly 11% CAGR in travel retail, which are 2 strategic regions with significant white space opportunities for our company. Beauty is an advantaged category with consumers at the sweet spot of affordable luxury, self-care, confidence boosting and health trends. We continue to see the fragrance index and premiumization in full effect with increased fragrance usage by Gen Zs, by men, by Hispanic consumers in the U.S. further underpinned by social media activities. All of these supportive [Technical Difficulty] trends, coupled with Coty's strategic vision and innovative pipeline in an offer-driven industry position us well to win [Technical Difficulty] backdrop. We remain committed to our six pillar strategy, which includes: number one, growing our Consumer Beauty business; number two, accelerating our luxury fragrance business and establishing Coty in the Prestige makeup arena; number three, building our skincare portfolio; number four, building e-com and DTC capabilities; number five, expanding in the high-potential regions that are China and travel retail; and number six, becoming a leader in the sustainability area. Now I'll turn it over to Alexis to discuss our first strategic pillar, which is, of course, growing our Consumer Beauty business. Alexis, the floor is yours.

Good afternoon. So I suggest we deep dive into the Consumer Beauty division now. And looking at how Coty is capturing the value-conscious consumer. The first good news is we operate in a very dynamic market that posted high single-digit growth. And I'm thrilled to share with you that actually Coty outperformed its market, posting plus 11% in the past 3 quarters. And that's thanks to a fabulous portfolio of brands, heritage brands that manage to evolve to meet today's trends. The first one being Rimmel, which was founded in 1834, known to be encapsulating the London look and to be extremely appealing to Gen Z consumers with refreshed values. And we see how we've managed to dial up the cool factor of the brand. Max Factor was founded in 1909 in Hollywood. It's got the power of transformation. And today, it's growing its inclusive consumer base across emerging markets, mainly. Bourjois. Bourjois was born here in France in 1863. It's synonymous with effortless fine beauty with a new omnichannel go-to-market approach. CoverGirl, a staple of America founded in 1961, which today managed to attract a lot of Gen Z'ers and draft penetration among Latinx and Hispanics, which are very strategic consumers for mass beauty. And Adidas founded in 1924, a truly global brand at the intersection of personal care and wellness. When you have us in full force the power of those amazing heritage brands, you get very strong market positions, obviously. And this is a snapshot of their respective performance. Rimmel in the U.K. undisputed leader, but also with great presence across Europe, all the way to Latin America and posting 15 basis points of share growth recently. Max Factor, number 6 across Europe and interesting fact, we relaunched the brand in China. And just this past month in June during the [ 6/18 ] key consumption period in China, we've managed to secure the #1 spot of foundation in the whole country for that month. Bourjois, number 3 in France, but also strong in countries like Saudi Arabia and the Middle East and very strong across Europe with stable positions. CoverGirl, number 3 in the U.S. and growing share in key segments such as lip, eye and concealers which are so strategic for Gen Z. And Adidas, the #1 sport brand in beauty, posting high single-digit growth. With such a portfolio and such a huge credible heritage, we appeal to the Gen X, notably by leading the skinification of makeup in Consumer Beauty. Max Factor and it's pure Miracle Pure Foundation delivers instant transformation with more Regent and glowing skin, for instance, which is precisely what Gen X are looking for. And for more than 2 decades, CoverGirl has been mixing up in its formulations, some skincare ingredients with the pigments of color cosmetics under its franchise called Simply Ageless. But in addition to being attractive to Gen X, those brands also managed to pivot the model to make sure to attract the new Gen Z generation. And leading the clean makeup movement has been a game-changer for these brands. Sue presented and shared how Rimmel managed to launch a full subrange of clean makeup that happens to be vegan and cruelty-free. It's also true for Bourjois healthy mix foundations, for instance. You see also how Max Factor or Sally Hansen are leveraging the power of plants-based formulations to also deliver some clean nail polish. But in order to sustain our growth momentum on CB, we had to really simplify and reshape our portfolio. So what have we done? First, we focused, focused on the 5 brands that I just highlighted, which account for 70% of our portfolio and much more in terms of weight of our investments. The second thing is we cut through the clutter of complexity by reducing by 30% of SKU count and also, in the meantime, drastically exploding the productivity of our SKUs. We also repositioned all our brands to make sure that they were true to the DNA but also very relevant for the new generation. I have to mention Brazil, which account for 10% of our net revenues on Consumer Beauty, where we have a portfolio of unique local brands that are posting double-digit growth and associated with market share gains. We made great inroads with e-commerce where we reached 10% penetration. And after stabilizing our distribution across the world in Consumer Beauty, we're now managing to make some incremental gains in our developed countries. Now what I suggest to do is to walk you through each of our brands, right? So you can have a flavor of what this stands for. Let me start with Rimmel. Rimmel, as I said, has managed to really dial up its cool factor. It's been [indiscernible] approved, which is essentially the official way to be recognized as cruelty-free. Judging by the amount of comments on digital from consumers and influencers, this is a big deal because it was the first certification of the brand of this size. Now we also mentioned that Rimmel stands for mascaras and Sue shared the 3 CK launch that happened a year ago, which was our biggest mascara launch ever under e-mail. And with this, I'd like to share with you the commercial. So you get a flavor of the brand. [Presentation]

So let's move on to Max Factor. We said it was all about the Hollywood glamor. This is known as the makeup of makeup artists. And in order to really turn around the brand, we use the superpowers of a superstar, Priyanka Chopra Jonas. And we'll see now in the next commercial how this marked the turnaround of the brand and you will understand why we're enjoying such momentum with Max Factor, especially in emerging markets these days. [Presentation]

Now moving to Bourjois. You see how we wanted to highlight how the brand pivoted towards clean makeup and cool makeup securing excellent ratings on UCA. But we also diminished our impact by moving our plastic blisters, cards in the French retail into cardboard blisters. That happened just a month ago here in France, successfully. And of course, this is a great way to further evolve the brand. Now speaking of clean makeup, I want to share the newly released innovation, tinted beautifier. And with this commercial, you see how we've managed to reconnect Bourjois to its core DNA. [Presentation]

CoverGirl. CoverGirl is a beacon of America. It's the easy-breezy beautiful brand for everybody. We completely rejuvenated CoverGirl's equity with great success. And lately, we launched a game-changer for Gen Z'ers, a lead product called Yummy Gloss. And again, I wanted to share the commercial with you. It's a great example of how we've boosted the equity of the brand in a way that's super relevant and current. [Presentation]

And if you want a fun fact, this is the very first edible LEAP product that you can -- that's been launched on the market, right? So moving to Adidas. Adidas is going through a complete revolution. And we are poised to really turn it into a very powerful proposition differentiated with a much more elevated equity. And it's all about products that are looking after your skin and you mind together with superior active ingredients, notably 10% of hyaluronic acid complex. But also much more sustainable formulas that are so fat-free and wrapped in 100% recycled and refillable bottle. This new range secured a 93 score in UCA. I mentioned earlier on how we take seriously China as a market. And we just launched and relaunched actually Adidas this past week in China with this specific range of shower gels and new deodorants. For this, we harness the power of very iconic sport figure in China. He is Chinese. His name is Su Yiming, superstar. He's a gold medalist of snowboarding and a world champion. And you see how he endorses the brand and demonstrate all the hydration benefits that we're now delivering. [Presentation]

And I cannot not mention our beautiful portfolio in Brazil. This is made of 4 winning brands, Monange, Risqué, Paixao, Bozzano, all staples that resonate really strongly with Brazilian consumers. Take Monange, for instance. Monange is the #3 master brand in -- for female in mass. It's the #3 deodorant in female. And it's got 50% household penetration in Brazil. Risqué, the undisputed market leader in nail polish with 30% market share and the first choice for 80% of Brazilian users of nail polish. Paixao is the #1 body oil, and we know how oil is a big deal for this population. And then number two, body lotion, securing almost 4 points of market share gains in the past year. And Bozzano is the leader in pre and post shave, the leader in styling, and the #3 deodorant brand. And we are on a mission to take this portfolio and further elevate it towards more beauty propositions, premiumizing the proposition of those forwards. But the biggest white space opportunity that we have in Brazil, and Sue mentioned it, lies with our mass fragrance portfolio. Brazil is the biggest mass fragrance market in the world with the highest level of consumption per capita. And we just recently launched our mass fragrance portfolio there in 2,000 doors successfully. We are further tailoring our portfolio to the local consumer requirements and preferences. And our ambition is to reach 15,000 points of sales in Brazil down the road. To conclude on this very important section about consumer [indiscernible]. You see how much momentum we've got but more importantly, how much leeway for further growth we've got ahead of us. Let me highlight 4 of them. We mentioned that we've got a fabulous portfolio of heritage brands. They are extremely well positioned to win with Gen X and Gen Z. And I mentioned how viral these brands went in social media, especially with the superpowers of influencers, highlighting how much -- these brands are the smart choice for the value-conscious consumers. Number two, our footprint is heavily reliant today on Europe and North America. But we are on a mission to really expand in emerging markets such as Middle East, Latin America, Africa, Southeast Asia, China, just to name a few. Number three, post COVID, there is this massive well-being trend, and we're extremely well positioned to leverage it with brands such as Adidas or Monange. Number four, even in our mature markets, we managed to make distribution gains on e-commerce, pure players, but also new distribution channels. So with this, I want to conclude and leave you with this key message. We're enjoying great momentum, and it's only the beginning. Thank you very much, and over to Caroline.

Ladies and gentlemen, good afternoon. Thank you very much, Alexis and Sue for the great presentation. Now I have the -- I'm absolutely delighted to take you through our Prestige business. And as you will see with Prestige fragrances and makeup brands, we are now able to capture the luxury consumer. Now as many of you have seen, the Prestige fragrance category today has been on fire in the last couple of years, and this is not a function of post-COVID recovery. There have been concrete drivers for this acceleration, which we expect to fuel and continue the robust growth today. Now what are those drivers? The first driver is consumers in the U.S. and in China are increasingly gravitating towards fragrances. Great news. Fragrances as both mood boosters and affordable luxury. Fragrance consumption today is also being fueled in-store as well as online. And the third one across all markets, we are seeing consumers premiumizing in the fragrance purchases. Social media, as you all know, is also a key platform for fragrances discovery and storytelling. Now here, you can see the results of latest consumer studies we have conducted. Fragrance consumption in the U.S. has accelerated. And as we can see here, among women, there has been a significant 5% uptake in the uses of ultra-premium fragrances in the last couple of years. And among men, also, fragrance penetration has increased by over 2%, which is a significant market expansion. Now if you look at both men and women, there has been a significantly uptick in heavy users on fragrances and in general, in both the U.S. and in Europe. We are seeing more fragrance users using fragrances more often and purchasing more premium products. Now we are seeing significant Prestige fragrance momentum in the U.S. but also in Europe. Prestige fragrance growth in the U.S., as you can see here, is 60% higher versus 3 years ago. Now in the last 3 months, we have also seen consumption accelerating by over 15% in the U.S. very much supported by premiumization as well as more fragrance users. And in Western Europe, Prestige fragrance growth is almost 30% versus 3 years ago, while it has accelerated by 16% in Europe versus the last 3 months. We're also seeing quite big changes in the way consumers are purchasing fragrance today, whereas fragrances were historically seen as a gifting-driven category. The data now shows that consumers are increasingly buying fragrances for themselves rather than for others. In the last year, the fragrance market in the U.S. and Europe grew by a strong 14%. In that same period, single bottle sales increased between 1% and 3%, while gifting, gift sets have actually declined between 1% and 3% of the total mix of sales. Now this is clearly very positive implications, not only for the overall fragrance penetration but also from a profitability point of view, as you can imagine, single bottle sales or single bottles have much higher margins than gift sets. Now what our studies also show very distinctively that there are 4 very distinct clear drivers for increasing fragrance usage. And these 4 drivers are: first of all, fragrances are a confidence booster. They provide a feel-good factor. They're also a great social connector and they are also a great source of [indiscernible]. Now what you can see here are quotes from consumers on reasons why they wear fragrances today. And what is very clear is that for young consumers, fragrances are a source of confidence. Fragrances make them feel good or feel better about themselves. They are also a very strong component in their wardrobe and a natural conversation-starter. And in a world that has been confined for several years, fragrances also allow consumers to mentally escape into exotic destinations. Now looking at the fragrance market today, there is a great opportunity for Coty. If we assume that fragrance penetration among U.S. consumers, which is currently around 20%, which is the one of Europe, which is about 50%. This represents an incremental $1.4 billion in sales opportunity for Coty. And if you look at China, where fragrance penetration today is still modest at 4%, if we assume that China's penetration reaches only 15% in the medium term, which is a conservative estimate, that would be approximately $300 million of additional sales for Coty based on the current market share. All in all, this represents a massive opportunity for Coty, about $1.6 billion from Prestige fragrances alone. As for the brands that consumers are gravitating we see 2 key trends. The first trend is designer brands. Designer brands today still dominates the fragrance market and represents 75% of the overall mix. And what you can see as well is that they are growing ahead of the overall market -- of the overall fragrance market at plus 28%. Now this clearly shows the importance of our leading design of fragrances such as Burberry, Hugo Boss, Gucci, Chloé, Marc Jacobs. At the same time, niche pure player fragrances are still very small, but growing at more than 3x the market growth rate. And we are going to discuss more about the niche pure players in the fragrance category. This is definitely an area that we, at Coty, intend to build our presence. Now let's have a look, let's talk about Chloé. Chloé, a French brands. Chloé has been extremely popular, premium brands with our consumers. In 2008, we launched our iconic Chloé Signature that is ranked today among the top 15 female fragrances worldwide. In 2018, we launched Chloé Nomade. And in 2019, we stepped with Chloé into the ultra-premium fragrance markets, launching its high-end collection called Chloé Atelier des Fleurs. Now Chloé Atelier des Fleurs continues to be a spectacular success in Asia and particularly in China. Sales of Chloé Atelier des Fleurs have grown 5x in the last couple of years, and the collection today is ranked #4 in China Travel Retail. Now in order for us to meet the strong consumer demand for Chloé Atelier des Fleurs, we are rapidly expanding the distribution in all markets. We will double the already large presence that we have in travel retail and in Asia Pacific in the next 3 years. In EMEA, we plan to grow 1.5x and we plan to triple our presence in the U.S. Now this significant white space opportunity is an area again where we absolutely intend to build our presence. Now let's have a look at our top breaking innovations. Launched last year, we have achieved tremendous success on our fragrance innovations. We are continuing that momentum this year, where we have launched the usually popular Hugo Boss [indiscernible], our Burberry Hero Fragrance, and Gucci Flora Gorgeous Gardenia Jasmine. And as we enter fiscal '24, we are all very excited about innovation pipeline that is including the newly announced Burberry Goddess female fragrance, which is just being launched. The test results of Burberry Goddess on the juice, on the packaging and on the marketing concept are absolutely outstanding. And we are very pleased to confirm that our retailers are sharing the enthusiasm that we have about the potential of the fragrance as well as the first results of this launch. In addition to this premium segment launch, we are also actively pursuing the ultra-premium niche fragrance market, which is relatively small. It's currently at roughly $4 billion, but is growing very quickly. And within this, the extension of some of our licensed brands like Chloé, like Burberry into the segments are already proving to be very successful. Now we also have a great news to share with you today. We are actually supplementing this with our recently announced most ambitious, most premium fragrance project today Infiniment Coty Paris fragrance brand. We are absolutely thrilled to have this -- develop this fragrance in-house and we'll be launching the brands globally in 2024. So as you can see, we are leading. We are driving today the fragrance industry across subsegments, across brand territories and across price points. And I remain personally extremely confident about the fragrance opportunity that we have ahead of us in Coty. Talking about Infiniment Coty. As you may have seen, on the eve of Kansas Fin Festival, we officially launched our plans for Infiniment Coty Paris. The collection will ultimately include a range of 14 distinctive and diverse sense with patent spending for both the formulations and the packaging. This truly represents a return to Coty's roots as the fragrance pioneer founded in 1904, with now a new cutting-edge vision for fragrances. Coty was the first perfumer to advertise fragrances and prioritize packaging. It was way ahead of its time. And we were the first company actually to combine flowers with synthetic molecules to access a much wider range of scents. Now building on the extensive expertise in fragrances, Infiniment Coty Paris will be a leading pioneer in the industry using beauty, science and art. Now complementing our strong position in Prestige fragrances is also our growing presence in the Prestige makeup. And Prestige makeup represents today a large untapped opportunity for Coty within our existing brand portfolio. By broadening our makeup offering, we are expanding the productivity and reach of our Prestige brands. Now it is important to highlight the underlying trends that exist in the Prestige makeup today. And as you can see in here, in the last 5 years, the 2 parts of Prestige makeup markets that are continuing to gain market share are the couture brands -- are the couture makeup brands as well as the indie brands. And these trends are expected to continue in the next coming years. Now the growth of the couture makeup brands clearly confirms the potential and strength of our Prestige brands, Burberry and Gucci. And similarly, growing penetration of indie maker brands also confirms the immense potential that we have for Kylie makeup. We also see that by adding makeup offering into our counters for Gucci and Burberry, we increased the productivity of our counters by over 30%. We are able to attract a broader consumer base to our counters, and our beauty advisers are also able to cross-sell and increase the basket size. Now this is clearly a very key positive trend for our broader Prestige division, increasing the reach and productivity for our brands online as well as offline. Now we have been ramping on our presence in Prestige makeup in a record time. You can see a picture of one of our beautiful counter. And while we were not present in the category in fiscal '19, by fiscal '22, our Prestige makeup already accounted for 4% of our sales, led by Gucci, Burberry and Kylie Cosmetics. Now we continue to target growing in the segments and reach approximately 10% of our sales in makeup by fiscal '26. Now in order for us to achieve this very robust growth in Prestige makeup, we actually embraced a new strategy, which has actually led to a strong growth momentum in the category. So what is the strategy? For our couture and indie brands, we actually moved to a business model where we have fewer stores, but a larger online presence, which is more profitable and requires much less, as you can imagine, capital expenditure. In addition, we partnered with Kylie Jenner and the growing penetration of indie maker brands confirms the potential of Kylie makeup, given her tremendous reach as one of the most followed female on social media. Now in China, we recently launched our Long Way Foundation under both Burberry and Gucci as part of our strategy to enter the high loyalty complexion subcategory. The new Burberry Beyond Wear Mass Foundation is inspired by the iconic fabric of Burberry's trench coat and provides 24 hours wear and protection against natural elements. The launch is off to a great start with consumers in China already naming it The Trench Foundation and sales are above our targets. At the same time, in the U.S., our Prestige makeup brands continue to outpace the category and thrive with both Gucci makeup and Kylie makeup sales growing over 30% faster than the category growth in the U.S. Prestige market, so doing extremely well. And finally, on Kylie Cosmetics, the brand's makeup sales have grown double digits in the last quarter. Now this growth was fueled by an increased distribution, including a growing footprint in Macy's and a recent successful launch in Dubai. We have also expanded the assortment of the brands. And we recently launched Kylash. This is Kylie's latest coming first ever mascara that is off to a great start and started fueling a very positive momentum. Now I would like to focus on skincare, which we believe represents today the biggest and the most profitable white space opportunity for Coty. Very importantly, we intend to capitalize on the skincare opportunity through Coty's superior skincare technology, through our IPs and of course, our strong and differentiated skincare brands. And as we shared, at our skincare Investor Day in last September, our ambition is to double our skincare business to over $500 million in the coming years. And as you can see in here, we have a very robust brand portfolio covering the full range of price points and subsegments. For Monange and Paixao at the entry level in Brazil, to Philosophy at the entry premium level, to Lancaster at the Prestige and ultra-premium levels and to Orveda at the ultra-premium side of the market. Now we have a very comprehensive skincare strategy with exciting initiatives across each of our skincare brands, whether it's Lancaster, whether it's Philosophy, whether it's Orveda and many more to come in the next quarters and years. Now beginning in fiscal '22 and fiscal '23, we made already very large and very necessary investments in the foundation of our skincare strategy whether it's on R&D, whether it's on marketing, analytics and digital capabilities. And over the past few months, we have undertaken a number of Coty skincare launches, in-store activations, new campaigns in the stores as well as communicating and new ways of communicating with consumers. Now the most exciting of which was the launch and I personally very proud of, Lancaster's ultra-premium skincare line called Ligne Princière. Ligne Princière bringing to the forefront Lancaster heritage as the exclusive brand of the Monaco Princely family. In fiscal '24, we will initiate local market launches across key brands and will fully build out our multiyear innovation pipeline. In fiscal '25 and fiscal '26, we will fully activate and will accelerate skincare. Now let's talk a bit about China and skincare. As you know, skincare in China represents 70% of the overall business in 2022. Chinese consumers have always been or always had very strong preferences towards highly premium, science-based, highly efficacious skincare products and product efficacy is crucial to these markets, absolutely crucial. Now these reasons actually make China a market to focus for our strategic skincare efforts which have kicked off with the successful launch of Lancaster ultra-premium skincare line called Ligne Princière. Now in addition to covering all price points, our Prestige skincare brands also have very distinctive positioning and very clear differentiated sense of purpose. What are the different -- what is the differentiation among our skincare brands? Lancaster is behind the science of fast cellular recovery for Monaco. Orveda is all about highly concentrated French biotech that works with the skin and not against it. Philosophy is the American dermatological wisdom authority. And Kylie, Kylie Skin offers Gen Zs, consumers the skincare toolbox. SKKN BY KIM is democratizing dermatology secrets. Very importantly, winning in skincare is ultimately about delivering superior product performance. This is absolutely key. Now our patented technologies, deep formulations and know-how are absolutely central to our success. For example, we have patented until 2027, full light protection technology, which actually is rooted in biomimetic principles of reflect, absorb and neutralize to protect our skin across the entire sunlight spectrum. Now we have a wide range of other patents that promote oxygen delivery, retinal vectorization as well as DNA repair. And we believe that the recipe for success in skincare requires 3 key ingredients. The first one is expertise. Second one is pattern and know-how and the third one is superior product performance. Now as I mentioned earlier, in mid-March, we actually launched Lancaster, ultra-premium skincare line called Ligne Princière, in China's leading stores, including Hangzhou in time and Nanjing Daji, I had the privilege of being there at the launch. And while we are at a very still and very early stages of Ligne Princière launch, the initial results continue to be extremely positive and very promising. And as you can see in here, our counters, the service provided in the store are absolutely on a very high level. Now based on large unbranded consumer testing that we conducted in China, where we have some of the most discerning customers in the world, Lancaster's 365 serum wins over #1 and leads over #2 market leaders, not only in efficacy, but also in texture and in fragrance. And I have to tell you, this is absolutely a very proud moment for Coty scientists and indeed for the Coty skincare teams. Now as I just mentioned, we launched Ligne Princière, and the results are very promising. Ligne Princière today has reached the #1 spot in social buzz across all social media platforms in China, which is a critical component in driving consumer awareness in -- and awareness and trial in the market. And in fact, a recent key opinion live stream on Douyin, which is, as you know, the Chinese TikTok version generated over $300,000 in sales in only 3.5 hours, demonstrating its popularity to Chinese consumers is the nickname that they have given to our Ligne Princière cream. They're calling it the Kelly Cream online, okay, coming from Monaco having been the line used by Princess Grace Kelly, they have nickname, it's Kelly Cream. Now the conversion rates at our new counters in China, especially Hainan, are exceeding the leading beauty peers with Lancaster Ligne Princière driving the majority of sales and the consumer comments and reviews on Ligne Princière are overwhelmingly positive, on the packaging, on the scents, on the texture with an average product rating given at 4.9 out of 5. Now we view those KPIs as social buzz, sales conversion and product reviews as the most important metrics to measure the success of a skincare launch. And of course, we will continue to focus on these areas for each of our key skincare brands in the coming years. Now turning to our ultra-premium skincare brand, Orveda. The brand was conceived from the very beginning by Sue Nicolas, the Orveda cofounders, with key objectives to be: one, leveraging the power of biofermentation to create formulas that have 15x more active ingredients than the average skincare without harming the skin, okay? 15x more concentrated than any average skincare you can find today in the markets, clean, vegan, sustainable and genderless. These are all the key attributes of Orveda. Now Orveda was one of the first brands to focus on the skin's microbiome with the skin's market increasingly moving into that direction. As a very exclusive brand, Orveda is currently distributed in a selective number of ultra high-end stores and spas across the world. And we see, of course, tremendous opportunities for Orveda in key markets such as the U.S., China and travel retail. Very importantly, the brand was designed from the start from the beginning with the Chinese consumers in mind, assuring that the formulas and the texture that we are using would work best and we will work well in these critical markets. Now let's have a look at the brand manifesto. [Presentation]

Now we are extremely excited about the brand, as you can imagine. And I'm personally very proud to share the clinical results of Orveda's latest clean, green, vegan biotech formulation product line. Using our biofermentation blends, we have seen unprecedented improvements across key skin dimensions in just 4 weeks. Now these clinical results support Orveda's ambition as an ultra-premium skin care product. Now as part of the activation of the Orveda brand, we have recently also upgraded the merchandising at Orveda's flagship counters whether it's in Samaritaine, Paris, which you will see later today as well as Saks Fifth Avenue in New York. Now we are happy to share that we have seen already great sales upsides and at both locations. Sales have been doubling versus last month's run rate, so great results. Now in the last few months, we have also began to build the awareness, buzz and the durability of these ultra-premium skin care brands among our target consumers. Who are our target consumers, the ultra-high net worth individuals, celebrities or penal leaders, especially in the scientific community and leading figures in the out world. Now as part of our continued quest to power beauty with cutting-edge science, Orveda has created the omnipotent concentrates serum launching worldwide online on DTC in August '23 and off-line in selective markets in September. The new potent serum is a scientific innovations in the areas of microbiome and cellular longevity with concentration of active ingredients up to 15x more than any average skin care you find today. The omnipotent concentrate has shown very strong clinical results and is expected to further cement Orveda's leading position in innovation, in beauty and in wellness. Now in a blind formulation that was conducted in Shanghai, Orveda serum beats leading luxury serums. Now we are conducting other trials with ultra-premium skin care users in Beijing and Shanghai, as we speak. And despite its very young age, Orveda has already won multiple prestigious awards, such as the Prix d'Excellence Marie Claire, which is considered to be the Oscars of the beauty industry. Now this very young skin care brand is already Coty's most awarded skin care brands globally. Now the third brand in our skin care portfolio is philosophy. Philosophy was created over 20 years ago by Christina Carlino and was a leading niche skin care brands in the early 2000, actually one of the first niche skin care brands. Now I'll come back of the brands kicked off last month across all touch points in the U.S. with first philosophy announcing a new brand formulation principle called dermatologic wisdom. Secondly, philosophy has launched its latest product innovation, dose of wisdom, bouncy skin reactivating serum. And while still very early, sales results are already over 20% ahead of our targets. Let's have a look at the campaign video. [Presentation]

Now what we did as well is that we have launched Philosophy's DTC, a new website, which is today represented a very significant portion of the brand sales. The new website offers a much more elevated brand experience overall. It includes many more new features, immersive contents, enhanced product detail pages, subscription programs, replenishment orders programs and also personalized product recommendations. Now while we are still very early in the launch, we have already begun to see a clear improvement in the conversion rates in our new website compared to the previous one. Finally, we have updated our in-store displays and merchandising beginning with Alta. And the brand is really off to a great start. Now as to conclude, as you can see, our skin acceleration, our skincare acceleration today has begun in the last few months, spanning through new innovations, elevated online and offline merchandising and as well, very importantly, unique storytelling and brand equity building. Strategic investments in the future will be focused on store productivity, brand visibility and reach, of course, and building hero products that enjoy a strong reputation in the scientific community. That is absolutely key. Now as we ramp towards our targets of over $500 million in the next few years, we will maintain also a very strict and tight controls on our investments overall. And we'll make sure that we track the success in our eye along the way. Thank you very much, ladies and gentlemen. I really would like to thank you for being with us today. And I would like now to hand over to Sue, who will be able to provide an update on our digital and sustainability progress. Thank you.

Thank you, Caroline. Thank you, Alexis. I think it was intense. I'm going to take you through pillar 3, 4, 5 and 6 before a coffee break. So think of this, it's coming soon. So now let's talk about the fourth pillar, which is strengthening our digital e-com and direct-to-consumer capabilities. When we first presented our digital and e-com strategy in 2021, we highlighted the top 5 priority areas where we would focus our efforts, investments and capability building to unlock the full potential of this company and of course, of our amazing portfolio of brands. These 5 areas include: first, unlocking the full potential of e-com, including indirect e-com through retailers, retailers, DTC e-com and social commerce, mainly in China. Second, building love brands. That's so important through deep consumer insight, engaging content, digital services, community management, fueling natural advocacy for our brands; number three, putting in place a best-in-class omnichannel IT ecosystem with leading data crunching capabilities; number four, leveraging data to drive precision advertising and direct consumer engagement. Number five, building out our digital organization, both globally and of course, locally, while simultaneously upskilling the broader Coty organization. 2.5 years later, sorry, setting the strategy in motion, we are well advanced. I can tell you in each of these areas with clear road maps in place for further digital improvement and digital acceleration. In fact, let me share a snapshot of where we stand today and our priorities in the short to medium term. The first milestone to highlight is that all of our DTC brands are now operating on the same platforms and offering consumers innovative services to drive higher conversion and repeat purchases. Second, we are ramping up our organizational capabilities to fully unleash the potential of live streaming in China with a particular focus on brands such as Lancaster, Adidas or Max Factor. Finally, we are step changing our media efficiency through the deployment of a next-gen marketing mix modeling program with already great insights on our key brands. At the same time, we are deploying a new content operating model to create more content on time and with higher consumer relevancy. Starting with the first point, which is maximizing our direct-to-consumer potential. Within our portfolio, 4 key brands lead in driving a sizable portion of their revenues through their own brand sites. This includes Philosophy, Kylie, SKKN BY KIM and Orveda. As you can see on this slide, over the past year, we have moved all 4 brand websites onto a common platform with a common platform in place, would begin immediately, and we will continue to introduce best-in-class features and services. These include virtual try-ons, skin diagnosis, video consultations, live streaming sessions, immersive shoppable videos and of course, for our high-end brands, human-to-human concierge services. And as we amplify our DTC website with these new services, this further drives improved consumer engagement, higher conversion and higher order values. Our new DTC websites are also aimed at boosting consumer loyalty and repeat purchases while inviting consumers to sign up for our e-mail updates and replenishment programs and join our loyalty programs. This not only brings our brands closer to the consumer, but also boost the lifetime value of each and every customer. In sum, while we are still relatively small in terms of DTC exposure, we have been rapidly advancing our DTC presence and capabilities to unleash the potential of our brands, leading, of course, with skin care and in China. The second priority and opportunity is indeed the live streaming phenomenon in China. It's important to highlight that the beauty channel landscape in China is evolving extremely fast, while with emerging players like Douyin capitalizing on the Chinese consumers' desire for engaging and educational content. In fact, I firmly believe that our entry into the Chinese skin care market with Lancaster and soon with Orveda, is perfectly timed to take advantage of this significant market disruptions and new way of selling. By not having large, embedded businesses on either classical e-retailer or department stores or huge organizations supporting this more mature but now slower growing platforms, we can more rapidly embrace the live streaming phenomenon where key opinion leaders, KOLs, with a real brand knowledge or scientific credentials are gaining share of mind and therefore, share of wallet. Lancaster is a perfect example of the nimbleness of the Coty organization. We launched the Lancaster Ligne Princière line only 3 months ago in March, with only 1 KOL activated on Douyin. Seeing the market shifts in China while we were there in March and the success of live streaming, we've been activating a full live streaming strategy, including expanding our KOL partnership from 1 originally to over 10 today, upskilling some of our beauty advisers in stores and bringing on board professional horse for the live streaming programs more than doubling the number of live streaming hours per day on Douyin, which is TikTok. And as a result, we have tripled our Lancaster monthly sales on this strategic channel. Given this success, we have an active road map to further accelerate our KOL partnerships and live streaming presence as we progress through this -- through the year, integrating our learnings, upscaling our beauty advisers and positioning the company as a leader in this rapidly growing live streaming channel. While the live streaming phenomenon is most widespread and advanced in China, this is also becoming an emerging trend in Western markets as well, particularly among Gen Z consumers. We are the forefront of this trend in some of our key Western market. A great recent example was our U.K. launch of Marc Jacobs' Daisy Drops. We worked with a TikTok influencer with over 3 million followers to tease the launch on her TikTok account, which generated, as you imagine, millions of views. We then aired a live reveal of the launch with both the influencer and one of Coty's marketers hosting the live stream and streaming it on their social media accounts, resulting instantly in great consumer engagement and great learnings for future events and for Coty. Our digital tools and capabilities are also enabling us to embrace the Gen Z TikTok phenomenon in the Western world. You can see on this video, some examples from our Rimmel chill-to-thrill TikTok campaign, which increased ad recall by 11% versus beauty benchmarks and drove over 40 million views surfacing the engagement rate of Rimmel's market-leading previous campaign with Kind & Free range. Similar to the China leapfrog, we are leapfrogging in the Western world with live streaming and TikTok-driven marketing for Gen Z consumers embedded into our teams. We are also attracting Gen Z consumers by completely reinventing the ceremony of gifting for today's consumers by invoking Chloé Atelier des Fleurs retail expression as a Parisian, flower [indiscernible] and the act of selecting personalized flower bouquet for a loved one. We have integrated a virtual experience across our Chloé online platforms to allow consumers to gift or to personalize a bouquet of Chloé Atelier des Fleurs perfumes. As we seek to reach and engage Gen Z consumers wherever they are present, our digital efforts also extend to the gaming world. We've introduced Gucci Flora gorgeous Jasmine fragrance and Miley Cyrus Avatar in Gucci Town on Roblox, with here again, exceptional results, including 3.7 million visits and over 70,000 average daily active users. Our third priority is deploying leading-edge media mix modeling capability across the full organization. In the ever-changing media landscape with very dynamic consumer behavior, we are deploying a system which has been effectively utilized in other beauty businesses and can answer key business questions on how to allocate our valuable media resources amongst brands and amongst markets and across the different platforms of media. And at the same time, we have been implementing a new content operating model, which we are executing as we speak. This means we are putting in place the right organizational structure both globally and locally to create even more photo and video brand content to be utilized across e-com sites, social media accounts and in conjunction with our influencer partners. The goal is to generate the most engaging and the most compelling content at a quicker pace, which is more relevant for our brands communities around the world. Turning now to China and Travel Retail. Number five. The 2 areas which represent the next legs of outsized growth for the company, where economic factors in China steadily improve. We remain as confident as ever in the structural drivers, which will drive outsized beauty growth in China for the many years to come. Number one, China per capita beauty consumption is still less than half of mature markets like U.S. Europe, Japan or Korea. Number two, while China's beauty market continues to be dominated by skin care, demand for prestige fragrances and mass fragrances has increased by over 60% versus 3 years ago, growing at 1.5x the growth of the overall beauty market. Number three, fragrance are now over 10% of China's beauty market and Chinese consumers continue to gravitate towards the most premium fragrances, even more than Western consumers. So the beauty opportunity for Coty in China is immense. Against this very attractive market backdrop, our business in China is still small at 4% of our revenues. However, we have been scaling our China business very quickly and building out our footprint in the market. You can see in this video, our futuristic Garden team booth at the recent Hainan Expo. In fact, Coty is already the fifth Prestige fragrance player in China. Our business here is roughly 80% Prestige. And therefore, as you can imagine, very profitable with gross margins roughly 70%. And with our highly desirable brand portfolio, we see, of course, significant opportunity ahead for Coty in China. Our fragrance brands are doing exceptionally well in this country. In fact, the latest data confirms that one of our latest launches, Burberry, Hero eau de perfume has now entered the top 3 melt fragrances in China next to Bleu De Chanel and Sauvage Dior. As we continue to build out our footprint in China, both offline and online and expand our category assortment, I am confident that we have the right brands, the right capabilities and the right teams to succeed in this very competitive market. Our ambition is, therefore, to more than double our China sales in the next few years to over $600 million. So how will we achieve our ambitions in this country? It's helpful to frame both how much we have progressed in the last 2 years. And of course, how much potential is in store in the years ahead. As you can see on this slide, over the last 2 years, we have, number one, grown our presence by 25% to roughly 400 cities. Number two, we have expanded our prestige counters and freestanding stores by over 40% to 130 doors. Number three, we have expanded our Consumer Beauty point of sales by over 25% to 38,000 doors. Number four, we have grown our e-com store across both divisions by 60% to reach 18 e-stores. While these are, of course, great accomplishments please think that our footprint is still a fraction of some of the leading beauty players in China, and we are only just starting our build-out of skin care and ultra-premium fragrances. In other words, the potential again for Coty in China is immense. And as I have highlighted during the discussion on our digital strategy, the significant changes occurring today in China beauty channel landscape mean that we are activating our skincare strategy at the perfect time as we can fully embrace the new channels and business models without being hindered by legacy businesses. I've just returned this weekend from a trip to China, together with Alexis and Caroline and the rest of the EC team, visiting our teams over there, seeing our brands in action. And I can confirm that the progress we have made in only a few short months is truly incredible. I'm really encouraged and energized, I have to say, by the potential I see for our company in this country. Shifting to the second big market opportunity for Coty, which is Travel Retail. While global travel has been rapidly rebounding as you've seen it for those who traveled a lot over the past year, as countries removed COVID restrictions, international traffic is still over 20% lower than the one of 2019, particularly in Asia. Against this backdrop, Coty Travel Retail business is now back to 8% of our overall sales. On a teens percentage of our prestige business on par with pre-COVID levels. And this expansion of our Travel Retail business is also nicely accretive with here again, gross margins of roughly 70%. The strong rebound in our Travel Retail business speaks to our focus on this key channel over the last few years, including expanding our category presence, increasing distribution and launching channel exclusive. As a result, you can see that we have grown our Travel Retail market share in each key regions with particularly impressive market share gains in EMEA. The critical piece of our market share growth in Travel Retail in the last few years that will fuel further market share growth in the coming years is our category expansion. Pre-COVID, Coty was predominantly an entry prestige fragrance player in Travel Retail. As we ramped up our footprint in Prestige makeup last year, 1/5 of our Travel Retail sales came from Prestige makeup. And based on our plans for the coming years, we see skin care reaching close to 10% of our Travel Retail sales by calendar '26 on top of almost 20% from Prestige makeup. And we see ultra-premium niche fragrances reaching over 10% by calendar '26. We look for the Travel Retail channel to continue to rebound in the coming year as more consumers return to travel, and we continue to expect outsized growth in our Travel Retail business as we broaden our portfolio presence. Combined, our ambition is to grow our Travel Retail sales by roughly 50% in the next 3 years to over $600 million. Our recent results that you can see on the slide confirms that we are continuing to see incredible momentum in our sales in this unique channel. Both in Q3 and year-to-date, our Travel Retail sales grew 30% year-on-year and with no signs of slowing in global consumers' appetite for travel, coupled with the return of Chinese travelers in the coming quarters, we remain very optimistic about the growth potential of this channel for the beauty industry as a whole and of course, for Coty in particular. Turning now to our sixth and final strategic pillar, becoming a leader in sustainability. Our sustainability strategy that we call Beauty That Lasts, is our path to delivering a more sustainable, more inclusive world with sustainability as our ultimate driver or/and for innovation launched in Feb 2020. This program is structured around 3 pillars: number one, the products; number two, the planet; and number three, our people and the people of the societies where we are operating. Our products have an important role to play in building a sustainable future, and we are dedicated to innovating sustainably and sourcing responsibly, conserving and protecting the natural environment is a vital part of our responsibility as a business, and we're taking actions to achieve healthy, clean and safe environment. Finally, we are committed to creating a more inclusive business and society for our employees and of course, challenging stereotypes and championing individuality and self-expression. We've had, as you can see on this slide, several ESG milestones over the last few months. We reached a top quartile ESG ranking by leading firm sustain analytics. And we have deployed sustainability training across the whole of our company. On the planet pillar, we announced recently new climate targets formally approved by the SBTi, science-backed targets initiative. We also have 0 waste to landfill and have an 80% recycling rate across our factories and distribution centers. And importantly, all of our supply chain sites use 100% renewable electricity. With strong packaging targets underpinning our broader climate targets, these targets are fully aligned with our climate and ecodesign ambitions. On this slide, you can see some of few examples of how we have been driving sustainability across our Prestige and Consumer Beauty portfolios. One example, the new Chloe Naturalle Intense with refill is delivering over 60% reduction in greenhouse gas emissions, water consumption, energy consumption and mineral resources consumption. The new Adidas skin and mind range has an over 18% reduction in packaging weight. And the last CoverGirl pressed powder has 35% less plastic versus the original product. It's clear that with the new innovations we bring to market, we are steadily improving the sustainability profile of our products. And at the same time, we are scaling our cruelty free ambitions with 5 of our brands now officially certified by the leading organization, which is Cruelty Free International. We are also a sustainability pioneer in fragrances. Coty is producing the world's first globally distributed fragrances using carbon captured alcohol, which is, as you know, with the #1 ingredient of fragrances by volume. Importantly, we are targeting for the majority of our fragrance portfolio to be produced using carbon-captured alcohol by the end of calendar 2023. We launched the world's first globally distributed fragrance manufactured using alcohol from 100% recycled carbon emissions in partnership with LanzaTech. This fragrance, which is Gucci latest launch, Where My Heart Beats is a key development in Coty's Beauty that Lasts sustainability strategy. And we know today that consumers are willing to pay a premium for clean and sustainable products. In addition to our progress on sustainability, D&I is driving Coty's culture and businesses. We pioneered in our industry by achieving gender pay equity and introducing gender-neutral parental leave. And we have also majority female executive committee and Board of Directors. We also introduced our new purpose vision and values anchored in being fearless and being a forward-thinking company. Building on this purpose, vision and values, Coty launched a campaign called #UndefineBeauty campaign. This campaign recognizes that current English language definitions of the term beauty are outdated and calls on dictionary publishers to remove the implicit ages and sexes from their definitions. We've seen a very strong positive response from our employees, our licensed brand partners and, of course, our retail customers with $230 million in organic reach and over $25 million in social media reach and over finally 3,000 people signing the petition, truly positioning our company as a thought leader on this crucial topic. Now I propose that we take a short break coffee, after which Laurent will discuss our strong financial progress. Thank you for your attention so far. [Break]

Welcome back. So let me now take a few minutes to discuss our financial outlook. So Coty has made very substantial financial progress in the last several years. We have significantly improved our P&L and balance sheet with more improvement to come. So before sharing the broader financial framework, let me start with a brief update on our Q4 outlook. Since the fourth quarter has closed, we have better insight into some metrics like revenues, and we are able to make updates to our outlook. Though as we finalize the closing, we will be able to share the full financial metrics when we report at the end of August. For Q4, we now expect revenues to grow 12% to 15% like-for-like, which is a significant increase from our previous outlook, which was 10% like-for-like. This revenue upside is primarily driven by global momentum in the Prestige division, coupled with the recovery in China, particularly in light of the lockdowns, which occurred in the prior year period. For total fiscal '23, we now expect revenues for the core business, adjusting for the impact of the Russia exit to grow 10% to 11% like-for-like to $5.5 billion up from our previous outlook, which was 9% to 10% like-for-like. We now expect fiscal '23 adjusted EBITDA of $965 million to $970 million based on current ForEx rates, which is above our previous outlook of $955 million to $965 million. While our profit outlook has clearly moved higher. It's worth noting that a portion of the profits from these incremental revenues are being partially offset by negative ForEx impact of over $10 million, bringing the total fiscal '23 negative ForEx impact on EBITDA to close to $70 million. So with these near-term trends in mind, let me frame the evolution of our P&L in the last 2 years. Over the last 2 years, we've grown our core revenues at a CAGR of 13% to 14% like-for-like, which excludes a high single-digit headwind from ForEx. We've also grown adjusted EBITDA at a CAGR of 12% to 13% since 2021 despite significant ForEx headwinds of over $40 million. And adjusted EPS has increased by 8x in the last 2 years. As we've continued to highlight, our focus is on driving a balanced growth agenda. We delivered double-digit like-for-like revenue growth in fiscal '22 fueled in particular by our Prestige division. And this year, we are on track to report another year of double-digit like-for-like revenue growth, fueled by both Prestige and Consumer Beauty. In addition, as you can see on this slide, we also have very balanced regional growth. In fiscal '22, we delivered double-digit like-for-like revenue growth across America, EMEA and APAC. And this year, we are seeing strong growth in each of our regions again, particularly in EMEA, even in the face of constraints in China for much of the year. This again reinforces the strength of our business model and our diversified growth engines. Fueling to strong profit growth has been very strong margin expansion. Gross margins have increased by roughly 400 basis points in the last 2 years. We are on track to end fiscal year '23 with gross margins of roughly 64%. The combination of the strong top line growth, gross margin expansion and savings delivery have allowed us to significantly step up our marketing investments, which are on track to increase 500 to 600 basis points over the last 2 years. As a result, our adjusted operating margin is also on track to increase by roughly 400 basis points as we expect to end fiscal year '23 with adjusted operating margin of approximately 13%. At the divisional level, we have driven margin expansion in both Prestige and Consumer Beauty over the last 2 years, with expectations for further expansion in both divisions in the coming years. At the center of our significant financial improvement in the last 2 years and our outlook for continued strong momentum is the growth flywheel, which we have set in motion. By delivering above-market revenue growth and offsetting inflation through a combination of savings, price and mix, we have been able to drive gross margins significantly higher. And as we maintain a tight control on our fixed cost, even as we reinvest in our growth capabilities, we have been able to not only fuel a significant increase in marketing investments, but also meaningfully expand our operating margins by roughly 400 basis points. And this reinvestment in both marketing and capabilities will continue to fuel this virtuous flywheel in the years to come. At the same time, we have significantly improved the health of our balance sheet. We ended calendar year '22 with leverage of around 4x, and we are on track to end calendar year '23 with leverage towards 3x. In fact, factoring in the value of our retained Wella stake, our targeted leverage exiting calendar year '23 is even closer to 2x. This deleveraging has been enabled by both tactical asset monetizations and strong free cash flow, and we are on track to generate around $400 million in free cash flow this year. Let me take a minute to remind everyone about the Wella stake we currently have on our books. In '20 and in '21, we sold most of our Wella hair care business to KKR in order to further simplify the Coty story, reduce our debt balance and focus on our 2 core segments. We currently retain a 26% stake in Wella, which is a purely financial stake, which we have committed to divest by calendar '25. As you can see on this slide, the Wella business is very attractive with leading positions in professional and retail hair color and styling and in professional name. The business has been performing very strongly and is nicely profitable. We don't -- and as a reminder, we do not consolidate any of Wella's revenues or profits in our P&L. So while the book value of our retail Wella stake remains over $1 billion based on the business profile, the return that we can get by the time we divest the remainder of our stake can easily be above this level. We have been delivering the strong margin and profit growth despite the accelerated inflation. For fiscal '23, we continue to expect COGS inflation of around 2%. And we have been offtaking this pressure through key areas. #1 is pricing. We've taken mid-single-digit pricing in Q1, taking another round of mid-single-digit pricing right now in Q3 and evaluating another potential increase in early fiscal '24. #2 is mix. While the strong growth of Consumer Beauty in the last 6 months meant an incrementally negative mix equation, all of the strategic growth pillars to discuss our margin accretive. And of course, we are continuing to premiumize the portfolio in both divisions. #3 is savings. We've also been generating strong savings to fuel our agenda. We have delivered $516 million of savings to date targeting another $165 million savings in the next 2.5 years. Enabling the simplification of the business and strong margin expansion has also been our strong focus on productivity. At our Investor Day in November 2021, we highlighted that one of the drivers behind our targeted gross margin expansion is reducing the tail of our portfolio. Specifically, focused -- we are focused on cutting nonproductive SKUs, which account for roughly 1/3 of the SKUs with a single-digit percentage of revenues. Over the last 2.5 years, very strong progress on this front. In Consumer Beauty, we cut SKU down by almost 1/3, while the revenue per SKU more than offset this, increasing over 50%. In Prestige, which is less a complex portfolio, reduced -- we have reduced SKUs by 16% in the last 2 years, while revenue per SKU is also up around 50%. In part due to our continued premiumization. This has been one of the critical parts of the 400-basis points improvement in our gross margin. While we have done a lot of these heavy lifting, there is, of course, always room for further improvement -- for further portfolio productivity improvement. We have also been generating strong savings to fuel our agenda. We are on track to deliver over $170 million in Savings in fiscal year '23 for a total of $600 million since 2020. And as you can see, the breakdown of savings is well balanced across the 4 key savings categories: trade investment; COGS; structural A&CP; and fixed costs. Earlier this year, we raised savings targets for the next 2 years to $165 million combined, roughly 60% is coming in gross margin. The rest is in fixed cost and in A&CP. A lot of work streams are underpinning these planned savings. Rolling out the strategic revenue management program to key markets, continued work on material value analysis, improving processes on marketing materials ordering, continuous productivity in supply chain and distribution, and optimizing our overhead functions. We have always said that all in to win will have 3 phases. The first phase was funding the journey. When kicked off right when we started in the middle of the COVID with a focus on immediate cost cuts, such as layoffs, spending cuts and A&CP. The second phase was focused on structural cost improvements like value engineering, distribution network redesign and factory closure in Germany and outsourcing in specific cases. The third phase is focused on enabling growth, building capabilities and process efficiency. In fiscal '24 and fiscal '25, we will continue to focus on savings delivery. As you can see on this slide, most of the other priorities are focusing on building capabilities to enable growth. With a strong financial improvement in the last 2 years, let me now turn to the past [indiscernible]. In light of the continued strong and resilient beauty market and the significant enter growth potential for Coty, we continue to expect a very attractive growth algorithm for the company. Looking out over the next 3 years, we continue to expect to be at the upper end of the 6% to 8% like-for-like revenue CAGR, reflecting the momentum in our categories and the progress we have made. This will be fueled by strong momentum in our largest segment, Prestige Fragrance and outsized growth in the areas where we are still small, particularly skin care. Consistent with what we have shared, our focus is on driving a balanced growth agenda. Based on our targeted growth algorithm, we expect Prestige Fragrance to still be in the largest category at a little of over 50% of the total skin care to reach roughly 10% of our sales from 5% currently, Prestige Cosmetics to increase to a high single-digit percentage of sales from 3% currently and negligible in fiscal '19. Based on the regional growth algorithm, we expect further diversification in our regional sales footprint. Specifically, we expect both China and travel retail to reach roughly 10% of sales each by fiscal '26 or roughly 20% combined from 12% currently. Turning now to the P&L growth algorithm. Our outlook remains largely consistent with what we have shared at our Investor Day in November 2021 and CAGNY earlier this year. We continue to see a like-for-like CAGR at the upper end of 6% to 8% over the next 3 years. We continue to expect gross margin in the mid-60s, driving a 9% to 11% EBITDA at CAGR. And we continue to target a mid-20s EPS CAGR, supported by lower interest expense as we deliver and also lower share count. Over the past few years, we have steadily reduced our leverage, and we are on track to reduce our leverage towards 3x exiting calendar year '23. By fiscal '26, we expect adjusted EBITDA in the $1.2 billion to $1.3 billion range, free cash flow over $500 million and leverage of around 2x exiting calendar year '25. Finally, this brings me to the framework for our capital structure and anticipated capital returns. First, we exited calendar year '22 with net debt below $3.9 billion and leverage around 4x. Over the next 3 years, we expect to generate around $400 million free cash flow annually or over $1.2 billion cumulatively. We also continue to target the divestiture of our Wella stake by calendar year '25 with a proceed of over $1 billion. Together, this brings cash inflow of over $2.2 billion over the next 3 years. Assuming 3 quarters allocated to deleveraging and the quarter allocated to capital returns this should drive a very attractive capital structure in calendar year '25, including net debt below $2.5 billion, leverage 2x, capital returns of around $500 million, including the $400 million of share buybacks we have announced via equity swaps with our banks. So with this, let me now hand you over to Sue for a few words of conclusion.

So thank you very much, Laurent. So to conclude, Coty is successfully delivering as you've seen it on the new strategy my team and I have unveiled already in 2021. Second important information of the day, we continue to see a robust beauty demand across markets and across categories. #3, Coty has, as you've seen during this long demonstration, differentiated and scaled end-to-end capabilities and industry-leading IP to propel our next phase of growth. #4, we are a company rooted in Europe with over 120 years of European heritage, innovation and operations, driving business momentum. #5, we are actively capturing white space opportunities as we grow market share in China and in Travel Retail. #6, we're making very strong progress towards sustainability and digital leadership. As you've seen it, we are increasing our fiscal '23 revenue and EBITDA outlook, which is again a true testament to the attractiveness of both the luxury industry and of course, our strong execution. Finally, we are delivering a best-in-class medium-term growth algorithm, including a mid- to high 20 percentage EPS CAGR, active deleveraging capital returns as we propel our growth story and strengthen our position as a beauty powerhouse. And with that, we're here to answer to your questions, Laurent and myself. Thank you very much.

Before we start, I would just like to remind everyone who joined us online, they can also submit questions in the webcast portal.

Filippo Falorni, Citi. Maybe first, a clarification on the guidance increase for this year. You mentioned better Prestige momentum and better China, how much is more the category doing better versus Coty doing better from a market share standpoint? And then secondly, in terms of licenses, I know you mentioned there's no sizable license up for renewal in the next 5 years. But can you comment how you view Kering recent acquisition of Creed and their expansion into beauty and their ambition into beauty?

Yes, I can start with the guidance. I mean, so indeed, we announced this morning that we are increasing our Q4, which was actually around 10% or 12% to 13%. So it's really the confirmation of what the team have explained that, really, these categories are very dynamic. And you see really the benefits of all the initiatives that Coty has implemented. So this is in line with our plans and really the concrete output of the great work, for both categories and the Coty work. To add another element is -- and I shared, of course, there is great momentum on Prestige, great initiatives, Consumer Beauty did a fantastic year also. In Q4, we have also a China effect which is also compared to last year, which was led down. So it's about 250 basis points in Q4, which is a mechanical effect from China, but also helped by the new initiatives that we are launching. So this gives you a global view for the Q4 acceleration.

So the second part of your question, if I understood well, it's about the Kering Gucci license that you are mentioning. Again, I think you said that there is no new news on this part. There is no significance of our licenses coming to an end before 5 years at minimum. There is no early exit mechanism to make this charter. First, this is important for all the brands that we own at Coty. Second, important element, as you've seen it is that we've resigned a lot of new licenses -- current licenses, sorry, extended the length of these licenses, which brings in fact, the top 7 licenses today to a length of over 10 years, a decade, 11 years precisely, some of them much more than this. So this is the second part of the answer. The third part of the answer, which is again on the factory side of things is you've seen we've spent a lot of time showing you how we are building the growth algorithm of the company. And the word balance is of utmost importance, as you can imagine. You've seen that there is no brand that representing more than 10% of our net revenues. And this is today. So you can imagine that by igniting other growth engines, including skin care, where most of our licensed brands are not operating, we are innovating, in fact, the ability of these brands to represent a significant amount of our net revenue. So this is to give you an idea that, in fact, whatsoever happens, the algorithm that we just presented to you is valued more than ever. The second part of your question was around the acquisition, correct? Again, let me answer by giving you again a highlight on what we have presented to you in terms of how Coty is a platform for beauty brands. You've seen the reach of this company in terms of a number of points of sale. We're talking about 20,000, not 1,000. We are talking about 180 million units in our Spanish factory. As you can imagine, this is a fantastic way to absorb fixed costs. And when you absorb fixed costs the remaining money goes in EBITDA and in, of course, in advertising and A&CP. What can I tell you in terms of distribution we own all the distribution teams we have in the key countries, which is a very, very important element. Last but not least, R&D is super, super important as you've seen it. Our four centers of excellence in Brazil, in the U.S., in Europe and of course, in Monaco and more and more in China are giving us this ability to put on the market products that we can price up. And this is something you can do if and only if you have exclusivity on your technologies, which is not the case when you either work with including fragrance houses, and this is something we're starting to do to put our patented molecules in such fragrances to create really 100% owned formulations. So this is the full picture of how I see the topic that you are referring to.

Hello. It's Linda Bolton-Weiser with D.A. Davidson. So I was wondering if you could tell us a little bit more about the Infiniment fragrance launch. And it was interesting that you said it was developed all in-house. Do you mean that you didn't work with Firmenich or IFF and you developed at all? Can you...

No, we did in fact develop in-house means that you're right, it's not a fragrance that has been taken from a license or a name that [indiscernible] it's the name of the company. We worked on this product to give substance to the name Coty. Coty stands for the inventor of modern perfumery since now 120 years. And when you see this coming to life, I think this should be for you, for everyone, for consumers, for retailers, for anyone investing in Coty or analyzing this company. The best of the know-how of the company in terms of fragrance creation. It's probably one of the only launches in the industry that will use a lot of patents. Traditionally, patents and fragrances are not words that are commonly used together. This is more a topic of skincare, as you know it sometimes make up, but never fragrances. And this is an area where we intend to update at Coty. And you see this line really showing to everyone who is looking at us the best of the know-how of the company, giving substance to the name. And of course, I did this -- I push this idea inside the company because I really wanted to show directions, in fact, on where this company is heading to. Be it in skin care within platinum skin care essence brand, I know quite well or [indiscernible] Coty, which is honestly to fragrances what Orveda is to skin care in terms of innovation, in terms of creativity, et cetera. And I see these are ways also to teach between bracket, the company, the future ways to launch brands in the beauty world, which I believe are changing really, really fast. So these brands are not only going to be reasons and directions, but they're also going to be a kind of marketing schools in-house.

And can I also ask you, so I think you said you're ending this fiscal year with like an overall high 20s percent advertising and promo ratio. Do you think that over time, as you grow bigger, that you can leverage the nonworking piece of A&P and that, that ratio will come down a little bit because of that leverage? Or do you think you want to put more back in that ratio?

Maybe I let Laurent answer this question?

Yes. Of course. I mean you saw the flywheel, which is in motion, and I made also very clear that the all-in to win program that we have and $165 million savings coming in the next few years at A&CP part of it. So it means that we have some productivity work we are doing in A&CP. But then we continue the work of this flywheel is really that part of the savings this year, of course, to deliver the EBITDA, but also to be used to support all the strategic initiatives. So we continue to monitor this way. Doing productivity and allocating the resource where we have strategic initiatives and also stronger volume. So this is an important matter that now we are really well equipped, very focused and also understanding really very well each category, each channel and each market. So this is really the way we animate and the way we will continue in the coming years.

So a couple of questions from our participants running online. So the first one is from Anna from Bank of America. In terms of the Lancaster Ligne Princière launch in China, do you feel you're primarily benefiting from the growth of the category or taking share from other prestige brands? And if so, which brands in the space?

It's a good question. Again, we were there just a few days ago, and we had a fantastic presentation by the teams who have been executing this launch since 3 years. You've seen how we've been shifting from a traditional, if I can say, traditional at the state of China, the traditional way of launching, activating the different levers to focusing our investment and know-how, expertise, focus on live streaming because this is the future way to sell skin care, probably fragrances and maybe even makeup. Simply because anything that has to do with content-driven social media is clearly becoming the name of the game. People learn what the brand is about, and then, of course, they can shop it because the ecosystem is made in a way that you can shop where you are, in fact, learning about the brand history. So in terms of this brand, again, Caroline has presented the results. As I love to say, we have a kind of cockpit of different lights and other lights are green. In fact, in terms of ratings, you've seen the ratings are outstanding. They are far above what normally a brand can reach. We are attracting the right users. In fact, we did a call back recently on a few hundred people. And we've seen that those who buy us are exactly those we wanted to target, which are high-end skin care buyers. Did they tell us that they were coming from La Mer or these kind of brands? It's something that we heard. It's not a study where we really want to check in their homes, which is normally the service way of doing things. But on [indiscernible], as we say it, they come from ultra-premium skin care brands. There are in thousands of ultra-premium skin care brands in China, but also a lot of people who are also moving from -- sometimes we heard people buying their skincare into dermatologists. And they love the story we told them about the vectorization of retinol, which allow you to put less retinol, therefore, to get the same results with less irritation all the story that I've been saying since 2 years, at least for those who followed our last investor meeting on skin care in Monaco. All these elements of what I call the radicalization -- the scientific radicalization of the skin care market in China. They were also part of the regions why we were bought. So ultra-premium skin care and also outside the traditional outlets where probably people are coming from dermatology world, where they do injections, peels, and they buy the skincare that is usually sold in these kind of places.