Q4 2025 Coty Inc Earnings Call - Q&A

A question and answer conference call.

As a reminder, this conference call is being recorded today August 21, 2025 at eight o'clock a M eastern time or two o'clock P M Central European time.

Please note that on August 20th at approximately 430 P. M. Eastern time, or 10, 30 P. M Central European time, Cody issued a press release and prepared remarks webcast, which can be found on its investor relations website.

On today's call are tsunami, Chief Executive Officer, and Laura <unk>, Chief Financial Officer.

I would like to remind you that many of our comments today may contain forward looking statements.

Please refer to <unk> earnings release, and the reports filed with the SEC or the company.

Speaker #2: Good morning and good afternoon, everyone. My name is Chelsea, and I'll be your conference operator today. At this time, I would like to welcome everyone to Coty's fourth quarter fiscal 2025 question-and-answer conference call.

That could cause actual results to differ materially from these forward looking statements.

Conference System: Thank you for calling.

Chelsea (Conference Operator): Good morning and good afternoon, everyone. My name is Chelsea, and I will be your conference operator today. At this time, I would like to welcome everyone to Coty Inc.’s fourth quarter fiscal 2025 question and answer conference call. As a reminder, this conference call is being recorded today, August 21, 2025, at 8:00 A.M. Eastern Time or 2:00 P.M. Central European Time. Please note that on August 20, at approximately 4:30 P.M. Eastern Time or 10:30 P.M. Central European Time, Coty Inc. issued a press release and prepared remarks webcast, which can be found on its investor relations website. On today’s call are Sue Nabi, Chief Executive Officer, and Laurent Mercier, Chief Financial Officer. I would like to remind you that many of the comments today may contain forward-looking statements.

In addition, except where noted the discussion of coatings financial results Encodings expectations reflect certain adjustments as specified in the non-GAAP financial measures section of the company's release.

Speaker #2: As a reminder, this conference call is being recorded today, August 21st, 2025, at 8:00 AM Eastern Time, or 2:00 PM Central European Time.

With that we will now open the line for questions.

If you would like to ask a question at this time. Please press star one on your telephone keypad.

Speaker #2: Please note that on August 20th, at approximately 4:30 PM Eastern Time, or 10:30 PM Central European Time, Coty issued a press release and prepared remarks webcast, which can be found on its Investor Relations website.

Once again that is star one to ask a question.

And we'll take our first question from Olivia Tong with Raymond James. Please go ahead.

Hey, Thanks, good morning.

So clearly there's a lot going on with respect to the macros as well as the category.

Speaker #2: On today's call are Sue Nabi, Chief Executive Officer, and Laurent Mercier, Chief Financial Officer. I would like to remind you that many of the comments today may contain forward-looking statements.

And you did a pretty detailed guide for Q1, and Q2 sales EBITDA and EPS.

Speaker #2: Please refer to Coty's earnings release and the reports filed with the SEC, where the company lists factors that could cause actual results to differ materially from these forward-looking statements.

Chelsea (Conference Operator): Please refer to Coty Inc.’s earnings release and the reports filed with the SEC, where the company lists factors that could cause actual results to differ materially from these forward-looking statements. In addition, except where noted, the discussion of Coty Inc.’s financial results and Coty Inc.’s expectations reflect certain adjustments as specified in the non-GAAP financial measures section of the company’s release. With that, we will now open the line for questions. If you would like to ask a question at this time, please press star one on your telephone keypad. Once again, that is star one to ask a question. We will take our first question from Olivia Tong with Raymond James. Please go ahead.

But kept it pretty open ended for the second half.

So wanted to understand a little bit about if you could provide a little bit more detail on the second half.

Speaker #2: In addition, except where noted, the discussion of Coty's financial results and Coty's expectations reflects certain adjustments as specified in the non-GAAP financial measures section of the company's release.

What initiatives go into place what hedged versus just using com.

Your thought process around the magnitude of improvement in the second half versus the first half and the key drivers of that thank you.

Speaker #2: With that, we will now open the line for questions. If you would like to ask a question at this time, please press *1 on your telephone keypad.

Yes, absolutely. Thank you. Thank you for your question sorry.

I think it is very important.

Speaker #2: Once again, that is star one to ask a question. And we'll take our first question from Olivia Tong with Raymond James. Please go ahead.

We will give you a very clear indication.

Thank you too.

We have this visibility and reshaped very precise guidance and if he does we highlighted.

Speaker #3: Great. Thanks. Good morning. So, clearly there's a lot going on with respect to the macros as well as the categories. And you gave a pretty detailed guide for Q1 and Q2 on sales, EBITDA, and EPS.

Olivia Tong: Great. Thanks. Good morning. Clearly, there is a lot going on with respect to the macros as well as the categories. You gave a pretty detailed guide for Q1 and Q2 on sales, EBITDA, and EPS, but kept it pretty open-ended for the second half. I wanted to understand a little bit about, if you could provide a little bit more detail on the second half, what initiatives go in place, what hits, versus just the easing comps, your thought process around the magnitude of improvement in the second half versus the first half, and the key drivers of that. Thank you.

We are seeing that we are studying in phase of the.

Retailer inventory reduction, which should last till the end.

Calendar year 'twenty five.

That's why we are giving you noted a sequential improvement in Q1 and Q2, despite feed them they get too. So at the same time as we indicated.

Speaker #3: But, but kept it pretty open-ended for the second half. So I wanted to understand a little bit about, if you could provide a little bit more detail on the second half.

We are seeing in those categories, especially prestige fragrance, but also in most spread loans.

Speaker #3: What initiatives go in place? What hits versus just the easing comps? What's your thought process around the magnitude of improvement in the second half versus the first half, and the key drivers of that?

Very good to see I mean low to mid single digits.

We are senior sewer fit out.

You know performing well in their key markets. So so no what it means is that.

Speaker #3: Thank you.

Speaker #4: Yeah. Absolutely. Thank you. thank you, Olivia, for for your question. So indeed, I think it's it's very important indeed that we you know, we give you a very clear indication for Q1 and Q2 and and we have this visibility and we shared very precise guidance.

Laurent Mercier: Absolutely. Thank you, Olivia, for your question. Indeed, I think it is very important that we give you very clear indications for Q1 and Q2. We have this visibility, and we shared very precise guidance. As we highlighted, we are seeing that we are still in a phase of retailer inventory reduction, which should last until the end of calendar year 2025. That is why we are giving the sequential improvement in Q1 and Q2, despite still being negative. At the same time, as we indicated, we are seeing the category, especially in prestige fragrance, but also in mass fragrance, remaining very healthy, meaning low to mid-single digit. We are also seeing our sell-out performing well in the key markets. What this means is that the plan is that we are expecting that at the end of calendar year 2025, this retailer inventory headwind will end.

The plan is that we expect.

End of calendar year 'twenty for you know these.

These retailer inventory.

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Then we enter into calendar 'twenty, six or <unk> 26.

Very hard to see where our system.

Speaker #4: And indeed, as we highlighted, we are seeing that we are still in the phase of, you know, retailers' inventory reduction, which should last until the end of calendar year 2025.

Jim will coincide with.

We don't set out.

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The market she knows the Hep C market and don't sell OTC Cathedral. So by you know very strong innovations that we just shared geranium during the presentation and which will be at full speed. So she sees relief.

Speaker #4: And that's why we are giving, you know, this sequential improvement in Q1 and Q2, despite still being negative. So at the same time, as we indicated, we are seeing, you know, the category—especially in prestige fragrances, but also in mass fragrances—remaining very healthy.

The algorithm.

Indeed, we didn't give you a more precise.

Members on <unk>, because as you say.

Hi, Brett GTT I mean, there are lots of macro movements, but for sure I mean, I can tell you with high level of confidence that.

Speaker #4: I mean, low to mid-single-digit. And we are seeing also our sell-out, you know, performing well in in the key markets. So so now what it means is that the the plan is that we are expecting that end of calendar year 25, you know, these retailer inventory, headwind will will end.

<unk> two will be back to gross.

One indeed, we are.

Going through each one so that's really the the rezoning Andrea so logic on them on the top line.

Speaker #4: And then we are entering calendar year 2026 or H2 fiscal 2026 in a very healthy manner, where our selling will coincide with our sell-out.

Laurent Mercier: Then we are entering calendar year 2026, so our H2 fiscal 2026, in a very healthy manner, where our selling will coincide with our sell-out. This is supported by the healthy market. Our sell-out is also supported by very strong innovations that we just shared during the presentation, and which will be at full speed in H2. This is really the algorithm. Indeed, we did not give more precise numbers on H2 because, as you say, there is high volatility. There are a lot of macro movements. But for sure, I can tell you with a high level of confidence that our H2 will be back to growth once we are going through this H1. That is really the reasoning and the logic on the top line. On EBITDA, that is also a similar approach. We are giving very precise indications on the Q1 and the Q2.

Does.

That's also similar approach okay. So we are really.

Giving very precise indications of Q1 Q2, then on edge with full confidence we stopped lines being back to growth and also all the actions.

Speaker #4: And and this is supported indeed by the the market, you know, the healthy market. And our sell-out is supported also by, you know, very strong innovations that we we just shared, you know, during during the presentation.

And those all into wind being a full speed, we really bring us two of them go to positive EBITDA growth in India true, so which means that it.

Speaker #4: And which will be at full speed in H2. So this is really the algorithm. Now, indeed, we didn't give, you know, more precise numbers on H2 because, as you say, there is high volatility.

It would be the full year will be would be about 1 billion or four Shaw and indeed that means that the major gaps that we are seeing and it would be done through year.

Driven by very strong.

Are you sure your way so if we if we exclude tariffs.

Speaker #4: I mean, there are a lot of macro movements. But for sure, I can tell you with a high level of confidence that indeed our H2 will be back to growth.

On a full year.

Our EBITDA would just be slightly slightly negative, but it is a major headwind is the ease of tariffs and last but not least I mean, our free cash flow will grow in fiscal 2006. So this is really the big picture I can give you to explain to you really where we are.

Speaker #4: once indeed we are you know, going through these these H1. So that's really the the the reasoning and really the the logic on on the top line.

Speaker #4: On EBITDA, we also have a similar approach. So we are really, you know, giving a very precise indication for Q1 and Q2. Then for H2, we have full confidence, you know, with the top line being back to growth.

Detailed guidance. So is this way and it for sure.

To give you a.

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Laurent Mercier: Then on H2, with full confidence, with top line being back to growth, and also all the actions, all into winning at full speed, will really bring us to positive EBITDA growth in H2. This means that our EBITDA full year will be above $1 billion, for sure. Indeed, the major gap that we are seeing in EBITDA on the full year is driven by tariff. If we exclude tariffs on a full year, our EBITDA would just be slightly negative. But indeed, the major headwind is the tariff. Last but not least, our free cash flow will grow in fiscal 2026. This is really the big picture I can give you to explain why we built our guidance this way. It is also really to give you that it is very built, you know, with very strong facts, analysis, and again, very strong confidence in the H2.

These very strong facts analyses and again very strong confidence in <unk>.

Speaker #4: And also all the actions you know, all in to win, being at full speed will really bring us to, you know, positive EBITDA growth in H2.

Good morning, Richard So speaking to add to long comment one thing very important indeed, there is the.

The launches of H, one specifically the Hugo boss beyond the bottle, which is starting as probably the biggest launch of the company's history, even bigger than what we did with this but there is a second blockbuster launch happening in the second half of the year also so this is a second element to add in the third.

Speaker #4: So, which means that, you know, our EBITDA for the full year will be above $1 billion for sure. And indeed, I mean, the major gap that we are seeing in EBITDA for the full year is driven by tariff.

Speaker #4: Tariff, in a way. So if we exclude tariff for a full year, our EBITDA will just be, you know, slightly negative.

The demand is that the a.

A few have missed attack plan of the company with almost a dozen brands of the company going into this area with clearly innovative formulations that I could say a little bit more later maybe.

Speaker #4: But indeed, the major headwind is the tariff. And last but not least, I mean, our free cash flow will grow in fiscal 2026.

Speaker #4: So this is really the big picture. I can give you to explain to you really why we built our guidance this way.

Are.

Are you going to represent something that could be like one extra launch added to the pipeline of the company if you'd taken them altogether. So this is the image of H two as Don just described it.

Speaker #4: And it's also really important to give you that it's very built, you know, with very strong facts analysis. And again, very strong confidence in the H2.

Got it that's helpful. Thank you.

With that said I do want to talk a lot about that fulfill our duty.

Speaker #4: And to add to Laurent, good morning. Olivia, this is Sue speaking. To add to Laurent's comment, one thing very important indeed is the launch of H1, specifically the Hugo Boss Beyond bottle, which is starting as probably the biggest launch in the company's history, even bigger than what we did with Goddess.

Sue Nabi: To add to Laurent, good morning, Olivia. This is Sue speaking. To add to Laurent's comment, one thing very important, indeed, there is the launches of H1, specifically the Hugo Boss Bottled Beyond, which is starting as probably the biggest launch of the company's history, even bigger than what we did with Burberry Goddess. There is a second blockbuster launch happening in the second half of the year also. This is a second element to add. The third element is that the perfume-mist attack plan of the company, with almost a dozen brands of the company going into this area with clearly innovative formulations that I could say a little bit more later maybe, are honestly going to represent something that could be like one extra launch added to the pipeline of the company if you take them all together.

First around the the last color side, just your commentary from last night's prepared remarks surrounding the evolution, that's that level, particularly on that color.

How you're thinking about levels of investment this year versus last year at all going forward.

Speaker #4: But there is a second blockbuster launch happening in the second half of the year also. So this is a second element to add. And the third element is that the perfume mist attack plan of the company, with almost a dozen brands of the company going into this area with clearly innovative formulations, that I could say a little bit more about later, maybe.

And then lastly in golf balls.

It is essential that that's a bright spot how do you think about the sprinkle them over.

Over time like as a percentage of sales the episodes of Croda.

The ability to differentiate relative to others in the category and it effectively.

Speaker #4: Our honesty is going to represent something that could be like one extra launch added to the pipeline of the company if you take them all together.

Who the audience is for that thank you very much.

So yeah on the first part of it which is around how we are going to invest.

Speaker #4: So this is the full image of H2 as long. Just described it.

Sue Nabi: This is the full image of H2 as Laurent just described it.

Invest behind our color cosmetics category. Indeed, I think the tone is clear this is the year of increasing.

Speaker #3: Got it. That's helpful. Hey, since you touched on it, I do want to talk a little bit about consumer beauty, first around the mass color side. Just your commentary from last night's prepared remarks around the evolution of investment levels, particularly on mass color.

Olivia Tong: Got it. That is helpful. Since you touched in, I do want to talk a little bit about consumer beauty. First, around the mass color side, just your commentary from last night's prepared remarks around the evolution of investment levels, particularly on mass color, and how you are thinking about levels of investment this year versus last year and then going forward. On mass fragrances, you just mentioned that that is a bright spot. How do you think about this business over time, both as a percentage of sales, the opportunity to grow this, the ability to differentiate relative to others in the category, and effectively who the audience is for that? Thank you very much.

Increasing the profitability of this business and in fact this was not just a decision driven by the P&L, even if the P&L is clear.

Clearly telling us to go in this direction, but it's also driven by what we learned.

Learns throughout the 2025 year.

Speaker #3: And how are you thinking about levels of investment this year versus last year, and then going forward? And then on mass fragrances, you know, you just mentioned that that's a bright spot.

Where we realized that maybe the.

I would say the move from traditional media to mainly advocacy marketing was a little bit too radical for a brand like truck I'll go. So what we're realizing is that these markets and including the dynamics of the markets.

Speaker #3: How do you think about this business over time? Like, both, you know, as a percentage of sales, the opportunity to grow this, the ability to differentiate relative to others in the category, and effectively who the audience is for that.

Today Hertz by and this is interesting to hear innovation fatigue. This is something we hear and simplification of <unk>. These are the things we learned from the recent studies. We have made I think a lot of loyal consumers above 30 years consumers got lost in translation given the complex.

Speaker #3: Thank you very much.

Speaker #4: So yeah, on the first part, Olivia, which is around how we are going to invest behind our color cosmetics category. Indeed, I think the tone is clear.

Laurent Mercier: On the first part, Olivia, which is around how we are going to invest behind our color cosmetics category, indeed, I think the tone is clear. This is the year of increasing the profitability of this business. In fact, this was not just a decision driven by the P&L, even if the P&L is clearly telling us to go in this direction, but it's also driven by what we learned throughout the 2025 year, where we realized that maybe the, I would say, the move from traditional media to mainly advocacy marketing was a little bit too radical for a brand like CoverGirl. What we're realizing is that this market, including the dynamics of the markets, are today hurt by, and this is interesting to hear, innovation fatigue. This is something we hear, and simplification of routines. These are the things we learned from the recent studies we have made.

City of this category today, a lot of people don't know the difference between an ink between a better between our bone between the liquids you've called out between a project with Qatar and the list goes on so there is a kind of innovations are cheap and we used the influenza marketing tool to talk to everyone. The decision we have made.

Speaker #4: This is the year of, you know, increasing the profitability of this business. In fact, this was not just a decision driven by the P&L, even if the P&L is clearly telling us to go in this direction.

Speaker #4: But it's also driven by what we learned throughout the 2025 year. where we realized that maybe the the I would say the the move from traditional media to mainly advocacy marketing was a little bit too radical for a brand like CoverGirl.

Is to dedicate.

I would say most sophisticated innovative products to the youngest while those who understand this very well and easily get into the complexity of the category.

Coming back to traditional advertising when it comes to categories that are the biggest by the way in the color cosmetics category, such as Mascara and foundations, which are by the way the strengths of our brands and we believe that they do.

Speaker #4: So, what we are realizing is that this market, including the dynamics of the markets, is today hurt by, and this is interesting to hear.

Speaker #4: Innovation fatigue is something we hear about, along with the need for simplification of routines. These are insights we gained from the recent studies we've conducted. I believe many loyal consumers over 30 years old have become lost in translation, given the complexity of this category today.

Doing well the lowest to invest less in absolute value and in a very <unk> driven way. So this is the way I would explain the shift that's driven by consumer understanding loyal consumer that were mistreated in a way for the last two years by everyone, including us, but also a P&L wise.

Laurent Mercier: I think a lot of loyal consumers, above 30 years old consumers, got lost in translation given the complexity of this category today. A lot of people don't know the difference between an ink, between a butter, between a balm, between a liquid lip color, between a bullet lip color, and the list goes on. There is a kind of innovation fatigue. We used the influencer marketing tool to talk to everyone. The decision we have made is to dedicate the, I would say, most sophisticated, innovative products to the youngest, who are those who understand this very well and easily get into the complexity of the category, while coming back to traditional advertising when it comes to categories that are the biggest, by the way, in the color cosmetics category, such as mascaras and foundations, which are, by the way, the strengths of our brands.

Speaker #4: A lot of people don't know the difference between an ink, a butter, a balm, a liquid lip color, a bullet lip color, and the list goes on.

As explained earlier now when it comes to the the fragrance the mass fragrance category. This is more or less 7% of the net revenues of the company. It's been growing nicely. The market is growing everywhere around the world and this is part of what we used to call the fragrance index, but.

Speaker #4: So, there is a kind of innovation fatigue. And we used the influencer marketing tool to talk to everyone. The decision we have made is to dedicate the, I would say, most sophisticated innovative products to the youngest, who are those who understand this very well and easily get into the complexity of the category, while coming back to traditional advertising when it comes to categories that are the biggest—by the way, in the color cosmetics category, such as mascaras and foundations, which are, by the way, the strengths of our brands.

Today, we are more into what we call the treat genomics phenomenon, which is the economy of treats and we see that as a fragrances from $5 to $500 are becoming really the go to destination in the beauty industry, Hence I would say the dynamism of this category and this explains why.

Consumers today are continuing to buy fragrances at every price level, including in mass fragrances Theyre also diversifying the way they were fragrances, hence our procure missed attack and this category I know you wrote recently about the profitability potentially of this category.

Speaker #4: And we believe that this way of doing things will allow us to invest less in absolute value and in a very ROI-driven way. So, this is the way I would explain the shift that's driven by consumer understanding—loyal consumers who were mistreated in a way for the last two years by everyone, including us.

Laurent Mercier: We believe that this way of doing will allow us to invest less in absolute value and in a very ROI-driven way. This is the way I would explain the shift that's driven by consumer understanding, loyal consumers that were mistreated in a way for the last two years by everyone, including us, but also P&L-wise, as I explained earlier. Now, when it comes to the mass fragrance category, this is more or less 7% of the net revenues of the company. It's been growing nicely. The market is growing everywhere around the world. This is part of what we used to call the fragrance index. But I think today we are more into what we call the treat economy phenomenon, which is the economy of treats.

Speaker #4: But also P&L-wise, as I explained earlier. Now, when it comes to the fragrance, the mass fragrance category, this is more or less 7% of the net revenues of the company.

It is for US is as profitable as a fragrance launch so there is absolutely no dilution.

This game and we see this game because it's a game of layering we see this game as a purely additional it's an $8 billion market doubling year on year and this is an area, where Kochi, which is the leader in sensing and in fragrance as a cloud should play and so we are paying big and we believe this is going.

Speaker #4: It's been growing nicely. The market is growing everywhere around the world, and this is part of what we used to call the fragrance index.

Speaker #4: But I think today we are more into what we call the tree genomics phenomenon, which is the economy of treats. We see that fragrances from $5 to $500 are becoming really the go-to destination in the beauty industry.

So to help us on the second half of the year.

Laurent Mercier: We see that fragrances from $5 to $500 are becoming the go-to destination in the beauty industry, hence, I would say, the dynamism of this category. This explains why a lot of consumers today are continuing to buy fragrances at every price level, including in mass fragrances. They are also diversifying the way they wear fragrances, hence our perfume-mist attack. This category, I know you wrote recently about the profitability potentially of this category. For us, it is as profitable as a fragrance launch. There is absolutely no dilution playing this game. We see this game because it is a game of layering. We see this game as purely additional. It is an $8 billion market doubling year on year. This is an area where Coty, which is the leader in scenting and in fragrances at large, should play in. So we are playing big.

Thank you.

Our next question will come from Susan Anderson with Canaccord Genuity.

Speaker #4: Hence, I would say the dynamism of this category. This explains why a lot of consumers today are continuing to buy fragrances at every price level, including in mass fragrances.

Hi, good morning, Thanks for taking my question.

I was wondering maybe you can just start off if you could talk about how quickly they clean fragrance performed and if you have any new innovation coming out in the cosmetic and skincare brands. This year and then also just wondering what investments you're making in the area as well.

Speaker #4: They are also diversifying the way they wear fragrances. Hence, our perfume mist attack. And this category, I know you wrote recently about the profitability potential of this category.

Yeah good morning.

Thank you for the question indeed.

That's a good question because if you look at our prestige portfolio. It's a majority of fragrances, but there is also a color cosmetics category and this is really what explains also the contract performance in terms of setting, but also set out in Asia, mainly due to the two.

Speaker #4: It's for us; it's as profitable as a fragrance launch. So, there is absolutely no dilution play in this game. And we see this game because it's a game of layering. We see this game as purely additional.

Speaker #4: It's an $8 billion market doubling year on year. And this is an area where Coty, which is the leader in scenting and in fragrances at large, should play in.

The resellers as we like to call them today.

None that is shrinking.

Speaker #4: So we are playing big, and we believe this is also going to help us in the second half of the year.

Shrinking if not totally dragging in Asia between Hainan, China and Korea ecosystem. This is really one of the key explanations of the.

Laurent Mercier: We believe this is going to help us on the second half of the year.

Speaker #2: Thank you. Our next question will come from Susan Anderson with Canaccord Genuity.

Chelsea (Conference Operator): Thank you. Our next question will come from Susan Anderson with Canaccord Genuity.

Figures don't elements of the division wise fragrances continue to grow including just got 25 year, which was one of the most difficult chair. We had so this is one to expensive second now it comes to skincare skincare. The two biggest brand of the company are she Joseph here in the U S and non cashed out.

Speaker #5: Hi. Good morning. Thanks for taking my question. I was wondering maybe just to start off if you could talk about how Prestige excluding fragrance performed and if you have any new innovations coming out in the cosmetic and skincare brands this year.

Susan Anderson: Hi. Good morning. Thanks for taking my question. I was wondering, maybe just to start off, if you could talk about how Prestige Excluding Fragrance performed and if you have any new innovation coming out in the cosmetic and skincare brands this year, and then also just what investments you are making in the area as well. Thanks.

Speaker #5: And then also just what investments you're making in the areas as well. Thanks.

Which is a European slash Chinese brands.

Great News is that non cash that is now growing super Super strongly in China, It's among the top five fastest.

Speaker #4: Yeah. Good morning, Susan. Thank you for the question. Indeed, that's a good question because if you look at our Prestige portfolio, it's a majority of fragrances.

Laurent Mercier: Good morning, Susan. Thank you for the question. Indeed, that is a good question because if you look at our Prestige portfolio, it is a majority of fragrances. There is also a color cosmetics category. This is really what explains the counter-performance in terms of sell-in, but also sell-out in Asia, mainly due to the resellers, as we like to call them today, a phenomenon that is shrinking, if not totally drying in Asia between Hainan and China and Korea ecosystem. This is really one of the key explanations of the figures' counter-performance of the division, while fragrances continue to grow, including in fiscal 2025, which was one of the most difficult years we had. This is one to explain for you. Now it comes to skincare. In skincare, the two biggest brands of the company are Philosophy in the U.S. and Lancaster, which is a European/Chinese brand.

First is growing brands, it's growing three times or four times faster than the skin care market and it explains also our absolutely outstanding performance I'm looking at the figures what I'm talking to you the skincare category.

Speaker #4: But there is also a color cosmetics category, and this is really what explains the counter performance in terms of selling. But also sell-out in Asia, mainly due to the, you know, to the resellers, as we like to call them today, phenomenon that is a shrinking, if not totally drying, in Asia between Hainan and the China and Korea ecosystem.

Our outperform the market by 11% for Gucci.

<unk> was around 3% as I said and this is driven mainly by AECOM and on E. Com. It's really two legs. It's on one side, our fragrance business that is growing six times faster than the market trades and our lung cast their business that is growing 40% faster than the Gucci, China than the Chinese <unk>.

Speaker #4: So, this is one to explain for you. Second, now it comes to skincare. In skincare, the two biggest brands of the company are Philosophy in the U.S. and Lancaster, which is a European/Chinese brand.

Speaker #4: Really, one of the key explanations of the figures is the counter-performance of the division, while fragrances continue to grow. This includes fiscal year 2025, which was one of the most difficult years we had.

System market. So it really is.

It's really this figures that I wanted to show with you to give you a vision on prestige excluding fragrances.

Okay, Great and then also you talked about the higher promotional environment and if you could talk a little bit about how you expect that to play out this fiscal year and what you're doing.

Speaker #4: The great news is that Lancaster is now growing super, super strongly in China. It's among the top five fastest-growing brands, expanding three to four times faster than the skincare market.

Laurent Mercier: The great news is that Lancaster is now growing super, super strongly in China. It is among the top five fastest-growing brands. It is growing three times or four times faster than the skincare market. It explains also our absolutely outstanding performance. I am looking at the figures while I am talking to you. The skincare category outperformed the market by 11% for Coty Inc. The market was around 3%, as I said. This is driven mainly by e-commerce. On e-commerce, it is really two legs. It is on one side our fragrance business that is growing six times faster than the market rate, and our Lancaster business that is growing 40% faster than the Chinese ecosystem market. It is really these figures that I wanted to share with you to give you a vision on Prestige Excluding Fragrances.

I mean, who compete in that environment.

So I guess is it anywhere between Pepsi getting not just in terms of the promotional environment or is one area where it's another.

Speaker #4: And it explains also our absolutely outstanding performance. I'm looking at the figures while I'm talking to you. The skincare category outperformed the market by 11% for Coty.

Thank you Suzanne.

Indeed, I mean, absolutely I mean, we are observing I mean no.

A few months indeed, some you know.

Speaker #4: The market was around 3%, as I said. And this is driven mainly by e-commerce. And on e-commerce, it's really two legs. On one side, our fragrance business is growing six times faster than the market rate.

Freeze over promotional activities and from some of our peers.

We are managing these very cautiously.

Of course, that's for you.

Our strategy to enter.

Speaker #4: And our Lancaster business is growing 40% faster than Coty in China, than the Chinese ecosystem market. So it's really these figures that I wanted to share with you to give you a vision on Prestige, excluding fragrances.

Pension really true to protect video icons and to protect homerun. So how do we manage it. So I mean, we are very strict.

And these are promotional note, where do you see an under absorption on the all the activities, but at the same time we are.

I mean, we shipped several times that we have a team dedicated on what we call strategic revenue management and he's exactly how to we expand the portfolio and we need to come with new format. I. Just give you. One example, which is been spray. Thanks.

Speaker #5: Okay, great. And then also you talked about the higher promotional environment. Maybe if you could talk a little bit about how you expect that to play out this fiscal year and what you're doing to compete in that environment.

Susan Anderson: Okay, great. You also talked about just the higher promotional environment. Maybe if you could talk a little bit about how you expect that to play out this fiscal year and what you are doing to compete in that environment. I guess, is it similar between Prestige and Mass just in terms of the promotional environment, or is one area worse than the other? Thanks.

Speaker #5: And then also, I guess, is it similar between prestige and mass just in terms of the promotional environment? Or is one area worse than the other?

Thanks spray ease of use this segment, which is really growing very fast in the U S. So no immediate liters at some things that you can put in your handbag or easy to take with you in April so far.

Speaker #5: Thanks.

Speaker #4: Thank you, Susan. Indeed, I mean, absolutely. I mean, we are observing, I mean, now for a few months, indeed, some, you know, increase in promotional activities from some of our peers.

Laurent Mercier: Thank you, Susan. Indeed, absolutely. We are observing now since a few months, some increase of promotional activities from some of our peers. We are managing this very cautiously. That is really a strategic intention to protect our icons and to protect our brands. So how do we manage this? We are very strict in this promotional policy and also on all the activities. At the same time, we are playing, you know, we shared several times that we have a team dedicated on what we call strategic revenue management. This is really how to expand the portfolio and to come with new formats. I just give you one example, which is Pen Spray. Pen Spray is a segment which is growing very fast in the U.S. It is 30 milliliters. It is something that you can put in your handbag or easy to take with you.

Contact example, okay. So we see that some consumers are going there and then when they like they go to as a product but of course, it's also more affordable.

Speaker #4: We are managing this very cautiously. And of course, that's really a strategic intention to protect our icons and to protect our brand.

<unk> been very profitable so that's okay.

The game that we're playing in.

In Greece.

Avoid entering Xu.

Speaker #4: So how do we manage this? I mean, we are very strict in these promotional policies and also on all the activities. But at the same time, we have shared several times that we have a team dedicated to what we call strategic revenue management.

Sure Noel game, but also when we talk about.

Strategic revenue management will refer to it if you take current run times of Great News is that you see the fragrance.

A full range of course you have.

Speaker #4: And this is exactly how to expand the portfolio and come up with new formats. I just give you one example, which is Pent Spray.

The prestige of price points, but you see you know high.

Hi, <unk>.

This is the fastest growing category. So you see that he spoke to you about the liquidity in the appetite from consumers, but at the same time, you see mass fragrance.

Speaker #4: Pent Spray is a segment which is really growing very fast in the US. So it's, you know, 30 milliliters is something that you can put in your handbag or, you know, easy to take with you.

Growing very fast and we explained also a bunch of.

Good evening.

In a way we are not.

Speaker #4: And it's also a fantastic sample. Okay. So we see that some consumers are going there. And then, you know, when they like, they go to the product.

Laurent Mercier: It is also a fantastic sample. We see that some consumers are going there. Then, when they like, they go to the product. Of course, it is also more affordable, but very profitable. That is the kind of game that we are playing, and really so to avoid entering this promotional game. Also, when we talk about strategic revenue management, and so refer to it, if you take fragrance, the great news is that you see that fragrance, now you have the full range. Of course, you have the prestige price points, but you see the high-end, the niche fragrance. This is the fastest-growing category. So you see that here, it is not, it is really about the quality and the appetite from consumers. At the same time, you see mass fragrance is growing very fast. So I explain also about the body mist.

It's a bunch of attention, but we are not concerned because indeed, we can you know.

Seeds of consumer needs.

Who knows if group of Fisher.

Speaker #4: But of course, it's also more affordable but very profitable. So that's the kind of game that we are playing. And really, to avoid entering these promotional games.

Just to complement on what law and it just strikes me as said.

If you look at the market. There is two parts that are growing the fastest indeed as I mentioned at the niche which is about $150 is growing by 14, 14% one four and everything under $50 is growing by 11%. This two part of the market.

Speaker #4: But also, when we talk about strategic revenue management and so refer to it, if you take fragrance, I mean, the great news is that you see that fragrance now you have the full range.

Fastest growing so instead of getting in the game, which has played a lot by the competitors who are heavily exposed to the Asian Chinese ecosystem, which we don't want an answer to the same extent, we put in place the mist for few missed that back a year ago precisely for this because we understood that.

Speaker #4: Of course, you have, you know, the prestige price points. But you see the high-end, the niche fragrance. I mean, this is the fastest-growing category.

Speaker #4: So you see that here it's not really about the quality and the appetite from consumers. But at the same time, you see mass fragrance is growing very fast.

For those who are looking for value you cannot just sell the same brand with a 50% discount you need to propose specific for the younger consumer all the ways to increase the basket or to replace the basket with the same profitability. So the mist. We have long said that I can't give you. The example of the CK missed that started early.

Speaker #4: And so, explain also about the body mist. So in a way, we are not its point of attention, but we are not concerned because indeed we can feed the consumer needs across the full partition.

Laurent Mercier: In a way, we are not, it is a point of attention, but we are not concerned because indeed we can feed the consumer needs across the full partition.

This summer.

Speaker #4: Susan, just to complement what Laurent just rightly said, if you look at the Prestige market, there are two parts that are growing the fastest.

Sue Nabi: Susan, just to complement on what Laurent Mercier just rightly said, if you look at the prestige market, there are two parts that are growing the fastest. Indeed, as Laurent Mercier mentioned it, the niche, which is above $150, is growing by 14%. And everything under $50 is growing by 11%. These two parts of the market are the fastest growing. Instead of getting in the game, which is played a lot by the competitors who are heavily exposed to the Asian-Chinese ecosystem, which we don't want to enter to the same extent, we put in place the perfume-mist attack a year ago precisely for this because we understood that for those who are looking for value, you cannot just sell the same brand with a 50% discount.

Some of your travel this summer you could see them in aircrafts and the only place where could you see a teenager's skewing. We're in front of the displays of the CK Miss and it boosted also the sales of pens sprays and the sales of <unk> fragrances.

Speaker #4: Indeed, as Laurent mentioned, the niche that is above $150 is growing by 14.25%. Everything under $50 is growing by 11%.

Another way to give people the ability with the same profitability without getting the gross to net equation of our very profitable center business the prestige fragrance.

Speaker #4: These two parts of the market are the fastest growing. So instead of getting in the game, which is played a lot by the competitors who are heavily exposed to the Asian, Chinese ecosystem, which we don't want to enter to the same extent, we put in place the mist perfume mist attack a year ago, precisely for this. Because we understood that for those who are looking for value, you cannot just sell the same brand with a 50% discount.

Thank you.

Our next question will come from Ashley Hogan with Jefferies. Please go ahead.

Hi, This is Stephanie on for Ashley. Thanks for taking our question can you just elaborate a little bit more on the comment on innovation to pink.

Speaker #4: You need to propose specifically for the younger consumer all the ways to increase the basket or to replace the basket with the same profitability.

Sue Nabi: You need to propose specifically for the younger consumer other ways to increase the basket or to replace the basket with the same profitability. The mist we have launched, and I can give you the example of the CK mist that started earlier this summer. If some of you traveled this summer, you could see them in airports. The only place where you could see teenagers queuing were in front of the displays of the CK mist. It boosted also the sales of Pen Sprays and the sales of 30 ml fragrances. That's another way to give people affordability with the same profitability without killing the growth-to-net equation of our very profitable center business of prestige fragrances.

I think on the February earnings call, you called out kind of thing a lack of innovation in color and that I believe.

So it feels like the market got flooded in the last six months or so and then just curious are you.

Speaker #4: So the mist we have launched, and I can give you the example of the CK mist that started earlier this summer. If some of you traveled this summer, you could see them in airports.

The thing that and color that happening at all and then on promotion.

Speaker #4: And the only place we could see teenagers queuing was in front of the displays of the CK Mist. It also boosted sales of the Pent Sprays and the sales of 30 ml fragrances.

Can you share how that varied between channels and then how that trended throughout the quarter and what you're seeing quarter to date. Thank you.

Good morning. Thank you for the question I'm going to take the first step in that is our own can complement on the.

Speaker #4: So that's another way to give people affordability with the same profitability, without killing the growth to net equation of our very profitable core business of Prestige fragrances.

And part of the question so regarding the topic of innovation fatigue.

Which is one of the reasons why the market is not as dynamic as it used to be.

You'll have to calculate or so with the simplification of megaprojects, which more or less.

Speaker #2: Thank you. Our next question will come from Ashley Hogans with Jefferies. Please go ahead.

Chelsea (Conference Operator): Thank you. Our next question will come from Ashley Helgans with Jefferies. Please go ahead.

The same story I think this is something that started maybe 18 months ago and that recently with the inflation of lunches. Indeed, we all felt that we need to do the race and do more and more launches from TPS in as quickly as two months is with new <unk>.

Speaker #5: Hi, this is Simeon for Ashley. Thanks for taking our question. Can you just elaborate a little bit more on the comment regarding innovation fatigue?

Ashley Helgans: This is Sydney on for Ashley Helgans. Thanks for taking our question. Can you just elaborate a little bit more on the comment on innovation fatigue? I think on the February earnings call, you called out seeing a lack of innovation in color and mass, I believe. Is it feeling like the market got flooded in the last six months or so? And then just curious, are you only seeing that in color? Is that happening at all in prestige? On promotion, can you share how that varied between channels and then how that trended throughout the quarter and what you're seeing quarter to date? Thank you.

Speaker #5: I think on the February earnings call, you called out seeing a lack of innovation in color and mass, I believe. So is it feeling like the market got flooded in the last six months or so?

Each new change new makeup finishes et cetera, and in fact, the result is that a lot of consumers got lost in translation specifically those above 25 to 30 years all of this we heard it in the consumer studies, we have conducted during this first half of fiscal 2025, we don't see.

Speaker #5: And then, just out of curiosity, are you only seeing that in color? Is that happening at all in Prestige? And then on promotion, can you share how that varied between channels?

Speaker #5: And then how that trended throughout the quarter? And what you're seeing quarter-to-date? Thank you.

Something similar at all in fragrances simply because the market of fragrances is still quite simple you know you have a miss which is becoming for me like a kind of model on the <unk> now, which is generally confined to easy to wear not all about where to make it easy to pair it with some.

Speaker #4: Good morning, Ashley. Thank you for the question. I'm going to take the first part, and maybe Laurent can complement the second part of the question.

Laurent Mercier: Good morning, Ashley. Thank you for the question. I am going to take the first part, and maybe Laurent Mercier can complement on the second part of the question. Regarding the topic of innovation fatigue, which is one of the reasons why the market is not as dynamic as it used to be, you have to couple it also with the simplification of makeup routines, which more or less tells the same story. I think this is something that started maybe 18 months ago and that peaked recently with the inflation of launches. Indeed, we all felt that we need to do the race and do more and more launches from TPMs in as quickly as two months with new gallixics, new routines, new makeup finishes, et cetera. In fact, the result is that a lot of consumers got lost in translation, specifically those above 25 to 30 years old.

Speaker #4: So, regarding the topic of innovation fatigue, which is one of the reasons why the market is not as dynamic as it used to be, you have to couple it also with the simplification of makeup routines, which more or less tells the same story.

Gas and then entry are fragrances, and then niche fragrances and inside this categories you will have the usual or the trial.

Speaker #4: I think this is something that started maybe 18 months ago, and that peaked recently with the inflation of launches. Indeed, we all felt that we need to do the race and do more and more launches from TPMs in as quickly as two months, with new galenics, new routines, new makeup finishes, etc.

Oh, the tougher each year, it's very simple and people navigate quite simply under educated the very well by the cost of Influencers, who are explaining this different ways of using fragrances, explaining the different ingredient trends and explaining what works in terms of Leerink for example, so in.

Speaker #4: And in fact, the result is that a lot of consumers got lost in translation, specifically those above 25 to 30 years old. This, we heard in the consumer studies.

In fact, what we see is that the dynamism of the assenting category, because we should maybe moved from the word fragrance to something which is what he wants to own from $5 to $500.

Laurent Mercier: This, we heard it in the consumer studies we have conducted during this first half of fiscal 2025. We do not see something similar at all in fragrances simply because the market of fragrances is still quite simple. You know, you have mist, which is becoming, for me, like a kind of modern eau de cologne, which is generous content, easy to wear, not overwhelming, easy to pair it with something else, and then entry fragrances, and then niche fragrances. Inside these categories, you will have the usual eau de toilette, eau de parfum, and elixir. It is very simple, and people navigate quite simply. They are educated very well by the cohort of influencers who are explaining these different ways of using fragrances, explaining the different ingredient trends, and explaining what works in terms of layering, for example.

Speaker #4: We have conducted, during this first half of fiscal 2025, we don't see something similar at all in fragrances. Simply because the market of fragrances is still quite simple.

Is one about this.

Im quoting what consumers told us for damage hugging the button hugging about.

Speaker #4: You know, you have mists, which are becoming, for me, like a kind of modern eau de cologne. It's generous content, easy to wear, not overwhelming, and easy to pair with something else.

That explains why and this is going to last or if you think about contact studies about the treat danone makes trend, which is more or less the index fragrance index story, they see it lasting for the next five to eight years. So it's not something that's going to be ending tomorrow, it's not anymore. The discussion.

Speaker #4: And then entry fragrances. And then niche fragrances. And inside these categories, you'll have the usual eau de toilette, eau de parfum, and elixir. It's very simple.

The category and have been saying that Atlanta since five years and I still continue to hear people are almost willing that this is going to come to an end, but it's not coming through on that simply because taking care of your brain taking care of your mood taking care of your.

Speaker #4: And people navigate quite simply. They are educated very well by the court of influencers who are explaining these different ways of using fragrances.

Speaker #4: Explaining the different ingredient trends. And explaining what works in terms of layering, for example. So in fact, what we see is that the dynamism of the scenting category, because we should maybe move from the word fragrance to scenting, which is what Coty wants to own from $5 to $500.

No our moods in a way is essential as taking care of his skin. So it's absolutely a must have rather than a nice to have so this is for the first part and I'll, let Laura I'll, maybe comment on the second one.

Laurent Mercier: In fact, what we see is that the dynamism of the scenting category, because we should maybe move from the word fragrance to scenting, which is what Coty Inc. wants to own from $5 to $500, is all about this. I am quoting what consumers told us. For them, it is hug in a bottle. Hug in a bottle, I think it is a great expression that explains why. This is going to last. You know, if you think about Kantar studies about the treat economy trend, which is more or less the fragrance index story, they see it lasting for the next five to eight years. It is not something that is going to be ending tomorrow. It is not anymore the discretionary category.

On promotions.

I would say that indeed, I mean, we saw stocking in consumer beauty and Codelco Smith peak.

Speaker #4: It's all about this; you know I'm quoting what consumers told us. For them, it's "hugging a bottle." Hugging a bottle. I think it's a great expression that explains why this is going to last.

A year ago.

Of course, it's also related to.

There was a slowdown of the category. So there is always these kind of mechanical reactions that too.

Speaker #4: You know, if you think about Kantar studies, about the tree genomics trend, which is more or less the Index Fragrance Index story, they see it lasting for the next five to eight years.

Lower consumption and in D C. The specialty what we saw in the U S. And then it is creating these kind of tension on promotion and that's just explain or so linked to some.

Speaker #4: So it's not something that's going to be ending tomorrow. It's not anymore the discretionary category. And I've been saying that at length for five years.

Innovation fatigue, so he's really a wet created.

Laurent Mercier: I have been saying that at length since five years, and I still continue to hear people almost willing that this is going to come to an end. It is not coming to an end simply because taking care of your brain, taking care of your mood, taking care of your moods in a way is essential, as taking care of your skin. So it is absolutely a must-have rather than a nice-to-have. This is for the first part, and I will let Laurent Mercier maybe comment on the second part. On promotions, I would say that indeed, we saw this starting on consumer beauty and color cosmetics, probably a year ago. Of course, it is also related to the slowdown of the category. So there is always this kind of mechanical reaction that lowers consumption, and this is especially what we saw in the US.

Speaker #4: And I still continue to hear people almost willing that this is going to come to an end. But it's not coming to an end.

So pattern on Caracas music on prestige prestige fragrance. Indeed, we observe these more recently, it's more Q3 and even Q4 again. The reasons are I mean, we saw some of our peers playing playing that game.

Speaker #4: Simply because taking care of your brain, taking care of your mood, and taking care of your, you know, moods in a way is essential, as taking care of your skin.

Speaker #4: So it's absolutely a must-have rather than a nice-to-have. This is for the first part, and I let Laurent maybe comment on the second part.

Some retailers are back to the point of trade inventories and also pressure on their working capital. So we we will do so again as I just explained before.

Speaker #4: Yes. Laurent, on promotions, I would say that indeed, we saw this starting in consumer beauty and color cosmetics, etc. Probably a year ago.

Manageable, we are managing very very tightly we don't want to play.

Speaker #4: And, of course, it's also related, you know, to the slowdown of the category. So there is always this kind of mechanical reaction that, you know, lower consumption, and this is especially what we saw in the U.S.

Short term reaction that's always a drop of course, we know the retention on the topline on the results, but this is exactly what we want to avoid a again we want to reduce.

Speaker #4: And then it's creating this kind of tension on promotion. As we just explained, this is also linked to some innovation fatigue. So this is really a, you know, what created this pattern in color cosmetics.

Our inventory is.

Laurent Mercier: Then it is creating this kind of tension on promotion, and as we just explained, also linked to some innovation fatigue. This is really what created this pattern on color cosmetics. On prestige fragrance, indeed, we observe this more recently. It is more Q3 and even Q4. Again, the reasons are, we saw some of our peers indeed playing that game. Also, some retailers, back to the point of trade inventory, and also pressure on their working capital. So we observe this. Again, as I just explained before, it is manageable. We are managing this very tightly. We do not want to play the short-term reaction. That is always a trap. Of course, we know there is tension on the top line, on the results, but this is exactly what we want to avoid.

As a trade.

Bringing trunk innovation, that's where laser based sensor and also we are improving increasing our media really to support.

All the icons or innovations and again as we just discussed.

Speaker #4: On Prestige, Prestige fragrance, indeed, we observe this more recently. It's more Q3 and even Q4. Again, the reasons are... I mean, we saw some of our peers indeed playing that game.

Full range must shrugged rounds played.

Teach fragrance and are so high and so that's the best answer to these promotional activities, but indeed, we are observing in the.

In this sector.

Speaker #4: Also some retailers back to the point of, you know, trade inventory. So and also pressure on their working capital. So we we observe this.

Thank you.

Our next question comes from Oliver Chen with TD Securities.

Good morning, Thank you for all that.

Speaker #4: So again, as I just explained before, it's manageable. We are managing these very tightly. We don't want to play, you know, the short-term reaction.

Salaries and a normalization of that.

Can you provide important more details on how we can travel retail evolving into fiscal year 'twenty.

Speaker #4: That's always a trap. Of course, we know there is tension on the top line, on the results. But this is exactly what we want to avoid.

Within travel retail how healthy that channel in terms of South Hill, which brands outperforming and how are you thinking about channel strategy over the next few years I can add to the market.

Speaker #4: Again, we want to reduce our inventory through trade. Bringing strong innovation is always the best answer. Additionally, we are improving and increasing our media.

Laurent Mercier: Again, we want to reduce our inventory with a trade, bring strong innovation. That is always the best answer. Also, we are improving, increasing our media really to support all the icons, all the innovations. Again, as we just discussed, the full range, mass fragrance, prestige fragrance, and also high-end. So that is the best answer to these promotional activities. But indeed, we are observing this pattern in the sector.

The consumer trends are constantly change that could influence demand. Thank you.

Thank you good morning, so on travel retail are indeed, that's a good question.

Speaker #4: Really to support all the icons, all the innovations. And again, as we just discussed, you know, the full range: mass fragrance, prestige fragrance, and also high-end.

In fact, what we are doing is that we are reinforcing the ability of this channel to become a destination to discover newness and you know there were there were question marks around the should I buy in travel retail is still this channel off price channel.

Speaker #4: So that's the best answer to this promotional activity. But indeed, we are observing this pattern in the sector.

I think what's happened recently and the shift is happening hand in hand between us and our partners in travel retail is really to make this channel of discovery channel.

Speaker #2: Thank you. Our next question comes from Oliver Chen with TD Securities.

Chelsea (Conference Operator): Thank you. Our next question comes from Oliver Chen with TD Securities.

Speaker #5: Good morning. This is Julia Shelensky on for Oliver Chen. You mentioned resellers and normalization in Asia. Could you provide a bit more detail on how you see travel retail evolving into fiscal year '26?

Ashley Helgans: Good morning. This is Julia Shilanski on for Oliver Chen. You mentioned resellers and normalization in Asia. Could you provide a bit more details on how you see travel retail evolving into fiscal year 2026? Within travel retail, how healthy is the channel today in terms of sell-through? Which brands are outperforming, and how are you thinking about channel strategy over the next few years? Add to that as well if you are seeing any noteworthy consumer trends across regions that could influence demand. Thank you.

Our decision to make the key innovations of this fiscal year, our new fiscal year, sorry travel retail excuses for our Montana House.

C N signed the Hugo boss bottled beyond the only in travel retail and that's also a great well I'm episodic I said before the products hit the.

Speaker #5: And within travel retail, how healthy is the channel today in terms of sell-through? Which brands are outperforming? And how are you thinking about channel strategy over the next few years?

Speaker #5: Tied to that as well, if you're seeing any noteworthy consumer trends across regions that could influence demand. Thank you.

Our global distribution outside of travel retail. So this is a way to make sure.

Speaker #4: Thank you. Good morning, Julia. So, on travel retail, indeed, that's a good question. In fact, what we are doing is reinforcing the ability of this channel to become a destination to discover newness.

Laurent Mercier: Thank you. Good morning, Julia. On travel retail, indeed, that is a good question. In fact, what we are doing is that we are reinforcing the ability of this channel to become a destination to discover newness. You know, there were question marks around, "Should I buy in travel retail? Is still this channel a price channel? Blah, blah, blah, blah, blah, blah." I think what happened recently, and the shift is happening hand in hand between us and our partners in travel retail, is really to make this channel a discovery channel. Hence, our decision to make the key innovations of this fiscal year, new fiscal year, sorry, travel retail exclusives for a month and a half. You could see and find the Hugo Boss Bottled Beyond only in travel retail.

Even if the flow of Fox is stabilizing but the consumers who are traveling more attracted towards this kind of exclusivity that make these channels look almost like a niche boutique with the newness and the things they do not get to find anywhere else of course with the with the price incentives.

Speaker #4: You know, there were question marks around, "Shall I buy in travel retail? Is this still a price channel?" Blah, blah, blah, blah, blah.

So this is what I can tell you about the travel retail today.

Speaker #4: I think what happened recently, and the shift is happening hand in hand between us and our partners in travel retail, is really to make this channel a discovery channel.

Our sales in travel retail Americas and in the EMEA region are growing nicely I have to say it.

The only region that is still indeed as you said it in your question, though still heavily affected is the Asia and travel retail which is heavily linked to the Chinese.

Speaker #4: Hence, our decision to make the key innovations of this fiscal year, new fiscal year, sorry, travel retail exclusives for a month and a half. You could see and find Hugo Boss, Bottle Beyond, only in travel retail.

Always a consumption in a way the good news is that in China. We are seeing that the beauty market is gradually improving.

Speaker #4: And that's also a great warm-up, if I may say, before the products hit the global distribution outside of travel retail. So this is a way to make sure that the consumers who are traveling even if the flow of packs is stabilizing, but the consumers who are traveling are more attracted towards this kind of exclusivities that make this channel look almost like a niche boutique with the newness and the things they do not yet find anywhere else.

Laurent Mercier: That is also a great warm-up, if I may say, before the products hit the global distribution outside of travel retail. This is a way to make sure that the consumers who are traveling, even if the flow of packs is stabilizing, but the consumers who are traveling are more attracted towards these kinds of exclusivities that make this channel look almost like a niche boutique with the newness and the things they do not get to find anywhere else, of course, with a price incentive. This is what I can tell you about the travel retail today. Our sales in travel retail Americas and in the EMEA region are growing nicely, I have to say it. The only region that is still, indeed, as you said it in your question, still heavily affected is the Asian travel retail, which is heavily linked to the Chinese consumption in a way.

Prestige beauty, specifically in the June Costa positive for the first time in many a plus 3% and outperformance from the fragrance category at 7%. So these are elements that gives us confidence that the missing part when it comes to the food travel retail picture, which is the Asian Chinese travel retail.

Regeneron is hopefully going to come back to a little bit more dynamism.

Yeah.

Thank you.

Our next question comes from Andrea Teixeira with Jpmorgan.

Speaker #4: Of course, with the price incentive. So this is what I can tell you about the travel retail today. Our sales in Travel Retail Americas and in the EMEA region are growing nicely.

Thank you good morning, everyone. Good afternoon there.

I have a question so I appreciate the commentary about.

Speaker #4: I have to say it. The only region that is still indeed, as you said in your question, heavily affected is the Asian travel retail, which is heavily linked to the Chinese consumption in a way.

About the nurse and and just thinking about how you kind of give it.

That's coming of course, you're going to continue to the successes that you've been highlighting and innovation in the nail category, but also if you think about how to.

Speaker #4: The good news is that in China, we are seeing that the beauty market is gradually improving, with Prestige Beauty specifically in the June quarter showing positive results for the first time in many quarters.

Laurent Mercier: The good news is that in China, we are seeing that the beauty market is gradually improving with prestige beauty, specifically in the June quarter, positive for the first time in many, plus 3%, and outperformance from the fragrance category at 7%. These are elements that give us confidence that the missing part when it comes to the full travel retail picture, which is the Asian-Chinese travel retail region, is hopefully going to come back to a little bit more dynamism.

In terms of.

Channels and then distribution.

Just curious how you're setting yourself up for the balance of 2026.

Speaker #4: Plus 3%. And outperformance from the fragrance category at 7%. So these are elements that give us confidence that the missing part when it comes to the full travel retail picture, which is the Asian, Chinese travel retail region, is hopefully going to come back to a little bit more dynamism.

In terms of like the a fiscal 'twenty sick the second half in terms of stuff like distribution gains and losses in that math of that.

And then a question to Aloha and in terms of like the way, we should be thinking of.

Talking I appreciate that you mentioned that that Destocking had a 11% impact in the first and the second I think it's the second half of fiscal.

Speaker #2: Thank you. Our next question comes from Andrea Teixeira with JP Morgan.

Chelsea (Conference Operator): Thank you. Our next question comes from Andrea Teixeira with JPMorgan.

Fiscal 'twenty, five and then coming down to five.

Speaker #5: Thank you. Good morning, everyone. Good afternoon there. I have a question. I appreciate the commentary about the mists and just thinking about how you're going to pivot—assuming, of course, you're going to continue to do the successes that you've been highlighting in innovation in the male category.

Olivia Tong: Thank you. Good morning, everyone. Good afternoon there. I have a question. I appreciate the commentary about the mists. Thinking about how you are going to pivot, assuming, of course, you are going to continue to do the successes that you have been highlighting in innovation in the male category, but also if you think about how to pivot in terms of channels and then your distribution. I am curious how you are setting yourself up for the balance of 2026 in terms of like the fiscal 2026, the second half, in terms of like distribution gains and losses and net of that. Then a question to Laurent Mercier in terms of like the way we should be thinking of the destocking.

Tell me if you can break down why are you assuming for Q1 and Q2 within that guide I'm, assuming you're still hoping to get the sell out too.

To grow I think the numbers in July were quite supportive, but just to think about how sell through against sell in and win it seems like from your commentary you expect.

Speaker #5: But also, if you think about how to pivot in terms of channels and then your distribution, I'm just curious how you're setting yourself up for the balance of 2026.

Just talking to our Alaska to calendar 'twenty 25, So if you can give us like a little bit of that color.

And if I can squeeze one about well and win.

Speaker #5: In terms of the fiscal Q2 2026, the second half, in terms of distribution gains and losses and net of that, and then a question to Laurent in terms of the way we should be thinking of the stocking.

The strategic feel they are strategic options that you're contemplating at this point. Thank you.

Yeah, Thanks, George and counter out or indeed.

Can start to really from a you know on the answer Destocking and indeed as we.

Speaker #5: I appreciate that you mentioned that the stocking had a 11% impact in the first in the second, I think it's the second half of fiscal 25 and then coming down to five.

Olivia Tong: I appreciate that you mentioned that the destocking had an 11% impact in the first, in the second, I think it is the second half of fiscal 2025, and then coming down to 5%. I am assuming if you can break down what you are assuming for Q1 and Q2 within that guide, I am assuming you are still hoping to get the sell-out to grow. I think the numbers in July were quite supportive. Just to think about how sell-through against sell-in, and when it seems like from your commentary, they expect the destocking to last through calendar 2025. If you can give us like a little bit of that color. If I can squeeze one about Wella, what is the strategic view there, strategic options you are contemplating at this point? Thank you.

We shared that several times and we share again, and indeed that week, we started to see in disease of the Destocking impact I have to say a year ago.

Speaker #5: So I'm assuming if you can break down what you're assuming for Q1 and Q2 within that guide. I'm assuming you're still hoping to get the sell-out to grow. I think the numbers in July were quite supportive.

But a year ago.

As you remember we were still on the you know on a very good trajectory I just want to remind that our.

Q1 prestige.

Sure was plus 7%. So we just need to remind that we are on a high base.

Speaker #5: But just to think about how sell-through compares to sell-in, and when it seems like, from your commentary, they're expecting the stocking to last through calendar 2025.

I want also to remind you you can go.

Some headwinds, but when you look at the fragrance prestige.

The last two years of growth if I exclude lycos and Russia is a plus 18%.

Speaker #5: So, if you can give us a little bit of that color, and if I can squeeze one about Wella, what is the strategic fuel there, the strategic options you're contemplating at this point?

It's important to them so too to zoom out under each one of those it's not that we are coming from a very high you're done and then indeed.

Speaker #5: Thank you.

We saw starting a year ago with visa Destocking, So youre right.

Speaker #4: Yeah. Thank you. Thank you, Andrea. So indeed, you know, I can start really from, you know, on the destocking. Indeed, as we shared, you know, several times and we share again.

Laurent Mercier: Thank you. Thank you, Andrea. So, indeed, I can start on the destocking. Indeed, as we shared several times, and we share again, we started to see this destocking impact. I have to say, a year ago, as you remember, we were still on a very good trajectory. I just want to remind that our Q1 prestige last year was plus 7%. We just need to remind that we are on a high base. I want also to remind, even though there are some headwinds, when you look at fragrance prestige, the last two years of growth, if I exclude Lacoste and Rocher, is a plus 18%. I think it is important also to zoom out and really to understand that we are coming from a very high dynamic. Then, what we saw starting a year ago was this destocking.

It was a gap indeed observed at the beginning of the year was pretty high.

We saw we see reducing step by step so and get into Q4. It was more the 5%. So we are assuming in our model that you know these gap is going to continue to reduce.

Speaker #4: And indeed that we started to see indeed these destocking impact I have to say indeed a year ago. But a year ago, as you remember, we were still on the, you know, on a very good trajectory.

And indeed, the big one ease of use are indeed, because he sees where we have to reserve the biggest gap. So we need to reduce in Q1.

Speaker #4: I just want to remind you that, you know, our Q1 Prestige last year was +7%. So we just need to remind you that we are on a high base.

And then really to reduce again in Q2 fiscal 'twenty six and then to come to a level of unit be nil in Q3 fiscal of 'twenty. So it is gradual.

Speaker #4: And I want to also remind you, even though there are some headwinds, when you look at Fragrance Prestige, the last two years of growth—if I exclude Lacoste and Russia—it's a plus 18%.

Roger will seek onshore that's why we are.

Very vocal about visa sequential.

The same time as we discussed before year I mean, we've seen is that the retailers are pretty nervous about their working capital. So they are also very cautious on their inventory. So indeed, there are a lot of moving pieces.

Speaker #4: So I think it's important also to zoom out and really understand that we are coming from a very high dynamic. Then, indeed, what we saw starting a year ago was this destocking.

Speaker #4: So you're right indeed that the gap indeed that at the beginning of the year was pretty high. We saw it. We see it reducing step by step.

Laurent Mercier: You are right, indeed, that the gap at the beginning of the year was pretty high. We saw it, we see it reducing step by step. In the Q4, it was more 5%. We are assuming in our model that this gap is going to continue to reduce. The big one is the US, indeed, because this is where we had really the biggest gap. We need to reduce in Q1 fiscal 2026, and then really to reduce again in Q2 fiscal 2026, and then to come to a level of being nil in the Q3 fiscal 2026. It is gradual. It is gradual. It is sequential. That is why we are very vocal about this sequential. At the same time, as we discussed before, we feel that our retailers are pretty nervous about their working capital. They are also very cautious on their inventory.

We are seeing and its creaking disease, but at GDP, but again. These GAAP is going to continue to reduce.

And we step by step come to zero and that's why we are.

Speaker #4: So, indeed, in Q4 it was more than 5%. We are assuming in our model that this gap is going to continue to reduce.

Absolutely confident that we are back to growth.

In the extreme and there is no gap between selling and.

So that's <unk>.

Speaker #4: And indeed, the big one is the U.S. Indeed, because this is where we had really the biggest gap. So, really to reduce in Q1 fiscal 26, and then really to reduce again in Q2 fiscal 26.

<unk> Destocking.

John just to you know.

He's a homebuilder just two two of Vela.

I mean, we stay absolutely committed.

To divest I mean, our stake I mean, we may be.

Speaker #4: And then to come to a level of, you know, being nil in Q3 fiscal '26. So it's gradual. It's gradual. It's sequential. That's why we are, you know, very vocal about these sequential.

Very clear several times. So indeed, we are contemplating auctions and really making sure always that keeps us.

Good timing and good value for cookie, but this is absolutely key.

Speaker #4: At the same time, as we discussed before, yeah, I mean, we feel that our retailers are pretty nervous about their working capital. So they're also very cautious about their inventory.

You know the biggest.

Type of big moves that we want to operate four for Coty, and we will keep you posted.

I'm sorry.

So you come back to yes, I'm going to take the question regarding you know the I was trying.

Speaker #4: So indeed, there are a lot of moving pieces that we are seeing. And it's creating indeed these volatility. But again, this gap is going to continue to reduce.

Laurent Mercier: Indeed, there are a lot of moving pieces that we are seeing, and it is creating this volatility. Again, this gap is going to continue to reduce and really step by step come to zero. That is why we are absolutely confident that we are back to growth in the H2, and there is no gap between the sell-in and the sell-out. That is really on the destocking. I jumped in the wrong order just to Wella. We stay absolutely committed to divest our stake. We made it very clear several times. Indeed, we are contemplating options and really making sure always that it is good timing and good value for Coty. This is absolutely a big step, a big move that we want to operate for Coty, and we keep you posted. If I am back to.

To understand and in fact, the question regarding the trend is to dwell a Andrea it's about how we are gaining or losing in terms of distribution.

Speaker #4: And really, step by step, come to zero. And that's why we are absolutely confident that we are back to growth in H2 and there is no gap between the selling and the sell-out.

So we have big distribution gains on fragrances, specifically on mass fragrances, which are up 20%.

The fragrance mist that we're playing both in mass and prestige are purely incremental in terms of shelf space, but also in terms of sales, while bringing the same profitability and then cutoff cosmetics. The distribution is broadly stable you commented about Ms Ms and a blockbuster fragrances.

Speaker #4: So that's really on the destocking. I just, you know, in the wrong order, just to Vella. I mean, we stay absolutely, you know, committed to divest.

Speaker #4: I mean, our stake. I mean, we made it very clear several times. So indeed, we are contemplating options and really making sure always that it's a good timing and good value for Coty.

It's in and the story rather than in either its really both that we are playing on regarding our ability to execute both at the same time and again, what we are seeing is that we could see a young man or young women buying the key fragrance at the moment from us while at the same time buying one or two.

Speaker #4: But this is absolutely a big step, a big move that we want to operate for Coty. And we keep you posted. Okay. So if I'm back to.

Miss if you think about our consumer beauty missed they are around $10 an hour prestige reached around $30, but this is very very affordable and some people even by two to three minutes to play with this layering phenomenon together stated with the signature fragrance, So it's really and and story has.

Speaker #4: Yes. I'm going to take the question regarding, you know, the I was trying to understand, in fact, the question regarding the if I understood well, Andrea, it's about how we are gaining or losing in terms of distribution.

Sue Nabi: Yes. I am going to take the question regarding, you know, the I was trying to understand, in fact, the question regarding the, if I understood well, Andrea Teixeira, it is about how we are gaining or losing in terms of distribution. We have big distribution gains on fragrances, specifically on mass fragrances, which are up 20%. The fragrance mists that we are playing both in mass and in prestige are purely incremental in terms of shelf space, but also in terms of sales while bringing the same profitability. On color cosmetics, the distribution is broadly stable. You commented about mists and blockbuster fragrances. It is an and story rather than an either. It is really both that we are playing on regarding our ability to execute both at the same time.

Speaker #4: So we have big distribution gains on fragrances, specifically on mass fragrances, which are up 20%. The fragrance mist that we are playing both in mass and in prestige are purely incremental in terms of shared space, but also in terms of sales, while bringing the same profitability.

And incremental space, both in mass and prestige.

Thank you.

Our next question will come from Steve powers with Deutsche Bank.

Great good.

Speaker #4: And on color cosmetics, the distribution is broadly stable. You commented about mist and blockbuster fragrances. It's an end story rather than an either. It's really both that we are playing on.

Good morning, good afternoon, everybody I'm wrong.

I just wanted to go back to what I thought I heard you say in response to Olivia's original question I think you had said that.

Absent tariffs.

EBITDA for the year, you thought would be down slightly.

Speaker #4: Regarding our ability to execute both at the same time. And again, what we are seeing is that we could see young men or young women buying the key fragrance of the moment from us, while at the same time buying one or two mists. If you think about our consumer beauty mists, they are around $10, and our Prestige mists are around $30.

I think you're expecting a 50 $55 million net headwind from tariffs if I subtract that from.

Sue Nabi: Again, what we are seeing is that we could see young men or young women buying the key fragrance of the moment from us, while at the same time buying one or two mists. If you think about our consumer beauty mists, they are around $10, and our prestige mists, they are around $30. This is very, very affordable. Some people even buy two to three mists to play with this layering phenomenon together still with the signature fragrance. So it is really an and story, hence an incremental space both in mass or in prestige.

You know where the the EBITA basis. It only gives you like a 20 $25 million a window to stay above $1 billion. I think you also said that you expect it to be above a $1 billion of EBITDA for the year. So I just wanted to replay that passed.

Speaker #4: So, this is very, very affordable. Some people even buy two to three mists to play with this layering phenomenon together, still with the signature fragrance.

That's what I heard and pester confidence because I think there's at least a 20 $25 million EBITDA window in your first half guidance.

Speaker #4: So, it's really an end story; hence, an incremental space both in mass and in prestige.

So just trying to understand where the confidence comes in for the full year. Thank you.

Yeah, Yeah, absolutely I mean, a good morning, Steve So I mean, you're correct.

Speaker #2: Thank you. Our next question will come from Steve Powers with Deutsche Bank.

Chelsea (Conference Operator): Thank you. Our next question will come from Steve Powers with Deutsche Bank.

Absolutely. So indeed, we are.

Again, we are giving you the precise guidance in Q1 and Q2, because indeed, we have good visibility and we are also good visibility you know coming from salaries and indeed it is.

Speaker #6: Great. Good morning. Good afternoon, everybody. Laurent, I just wanted to go back to what I thought I heard you say in response to Olivia's original question.

Steve Powers: Great. Good morning. Good afternoon, everybody. Laurent, I just wanted to go back to what I thought I heard you say in response to Olivia's original question. I think you had said that, absent tariffs, EBITDA for the year you thought would be down slightly. I think you are expecting a $50, $55 million net headwind from tariffs. If I subtract that from where the EBITDA base is, it only gives you like a $20, $25 million window to stay above a billion. I think you also said that you expected to be above $1 billion of EBITDA for the year. So I just wanted to replay that and test what I heard and test your confidence because I think there is at least a $20, $25 million EBITDA window in your first half guidance. So just trying to understand where the confidence comes in for the full year.

Speaker #6: I think you had said that, you know, absent tariffs, EBITDA for the year you thought would be down slightly. I think you're expecting a $50 million to $55 million net headwind from tariffs.

Hurricanes or gross margin in each one I can tell you is that in.

Indeed.

The loss that we have on gross margin in each one of these is mostly driven by your diaries.

Speaker #6: If I subtract that from, you know, where the EBITDA base is, it only gives you like a $20 million to $25 million window to stay above a billion.

And also to some extent the euro dollar.

Some sourcing in Europe to the U S.

Each also impacting.

The gross margin. So this is indeed, the major headwind and at the same time, indeed truing into the EBITDA.

Speaker #6: And I think you also said that you expect it to be above a billion dollars of EBITDA for the year. So I just wanted to replay that and test what I heard and test your confidence because I think there's at least a 20, 25 million dollar EBITDA window in your first half guidance.

Wings that we are sharing.

Q2 combined of course, we just seem to get either top line now moving to the edge to them.

Speaker #6: So just trying to understand where the confidence comes in for the full year. Thank you.

We start to inject some productivity actions you know related to tariffs. So the 20 million I'm, referring to I mean, we'll be really full speed from procurement and manufacturing. So it will really secures the H twos and sitcoms very importantly that youre going to win.

Steve Powers: Thank you.

Speaker #4: Yeah. Yeah. Absolutely. I mean, good morning, Steve. So, I mean, your math is correct. Absolutely. So indeed, we are, you know, again, we are giving, you know, precise guidance in Q1 and Q2 because, indeed, we have good visibility.

Laurent Mercier: Yeah. Yeah, absolutely. I mean, good morning, Steve. So, your math is correct, absolutely. So, indeed, we are, again, we are giving precise guidance in Q1 and Q2 because indeed we have good visibility, and we have also good visibility coming from the tariffs. And indeed, it is hurting the gross margin in H1. I can tell you that indeed, the loss that we have on gross margin in H1 is mostly driven by tariffs. And also, to some extent, the euro dollar, as we still have some sourcing in Europe to the U.S., it is also impacting the gross margin. So, this is indeed the major headwind. At the same time, indeed, flowing into the EBITDA headwinds that we are sharing in Q1 and Q2, combined, of course, with a still negative top line. Now, moving to the H2, we start to inject some productivity actions related to tariffs.

<unk> that we announced in April will be at full speed.

Speaker #4: And we have also good visibility, you know, coming from the tariff. And indeed, it's hurting the gross margin in H1. I can tell you that indeed the loss that we have on gross margin in H1 is, you know, is mostly driven by tariff.

Image too and that will bring savings engage too so to make it very clear Steven Fisher.

Okay.

Okay.

Yeah.

It does.

Okay.

Okay.

Speaker #4: And also, to some extent, that the euro dollar, as we still have some sourcing in Europe to the U.S., it's also impacting the gross margin.

On the top.

Top line, but also in productivity and savings.

Neither sufficient protection.

To be to be above the 1 billion on a fiscal year 'twenty six.

Speaker #4: So this is indeed the major headwind. And at the same time, indeed, flowing into the EBITDA headwinds that we are sharing, in Q1, in Q2, combined, of course, with the still negative top line.

Okay. Okay.

Thank you for that and then Sue if I could I guess it sounds like.

Initiatives like skin care from your perspective, a high level are still on track I just wanted to.

Speaker #4: Now, moving to the H2, we start to inject some productivity actions, you know, related to tariff. So the 20 million I'm referring to, I mean, will be really full speed from procurement and from manufacturing.

Okay.

Okay.

Laurent Mercier: So, the $20 million I am referring to will be really full speed from procurement and from manufacturing. So, it will really secure the H2. Second, very important, is that the all-in-to-win plans that we announced in April will be also at full speed in H2 and will bring savings in the H2. So, to make it very clear, Steve, on your question, yes, there is a tariff headwind, but there is absolute confidence that all the actions that we have in place, either on the innovation stop line, but also on productivity and savings, give us sufficient protection to be above the $1 billion on the fiscal year 2026.

Thank you.

Okay.

Hum.

As you've talked about.

Speaker #4: So, it will really secure the H2. And second, very importantly, the all-in-to-win plans that we announced in April will also be at full speed in H2.

Last night.

Kind of.

Yeah.

Okay.

Cosmetics.

It is.

Okay.

Speaker #4: And will bring savings in the H2. So to make it very clear, Steve, on your question, yes, there is a tariff headwind. But there is absolute confidence that all the actions that we have in place either on the innovation top line but also on productivity and savings, you know, give us sufficient protection to be above the $1 billion on the fiscal year 26.

Yeah.

What would have been.

P J.

Perfect.

Sure.

Okay.

Thanks.

Okay.

Hum.

Progressing undeterred.

Do you update them.

Okay.

Okay.

Okay.

Okay.

Speaker #6: Okay. Okay. Thank you for that. And then, Sue, if I could, I just want to say it sounds like initiatives like skincare, from your perspective at a high level, are still on track.

Steve Powers: Okay. Thank you for that. Sue, if I could, I just want, it sounds like initiatives like skincare from your perspective, high level, are still on track. I just wanted to get your perspective and any thoughts as to whether or not, as you update the strategy, refresh the strategy on fragrances, as you have talked about today and last night, and also kind of recalibrate on the cosmetic side. As you do that work, is there any opportunity cost, just a distraction from what would have been the strategic investments and prioritization of skincare, or are those two things distinct enough that the efforts in skincare evolution can progress undeterred as you update on fragrance and cosmetics?

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Treatment.

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Yeah.

Yeah.

$200 from anything that's adjacencies hunting to classical fragrances in the ixia.

Speaker #6: I just wanted to, you know, get your perspective and any thoughts as to whether or not, you know, as you as you update the strategy, refresh the strategy on fragrances, as you've talked about today and last night, and also kind of recalibrate on the cosmetic side, as you do that work, is there any opportunity cost to just distraction from what would have been the strategic investments and prioritization of skincare or are those two things distinct enough that the efforts in skincare evolution can progress undeterred as you update on fragrance and cosmetics?

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Future.

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Yeah.

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Connecticut.

Perfect.

Degrees that both push for growth for the next I would say decades because of the aging of the population and when it comes to skincare and the fact that people are really willing and obsessed with the fact that they want to age gracefully are in good health.

The global warming and the U V I would say exposure of human beings for them for the decades to come will require everyone to use sand protection. This is something I can tell you. So it's also for me a bet on the future now coming back to the present, we are going to be much more I would say.

Speaker #4: Yeah, that's indeed a fair question. What I can tell you is that, of course, we are betting—double betting—on the tree genomics, the fragrance index, and the company will own the full spectrum from $5 to $500.

Laurent Mercier: Yeah, that's indeed a fair question. What I can tell you is that, of course, we are double betting on the treat economy, the fragrance index, and the company will own the full spectrum from $5 to $500, from anything that's adjacency scenting to classical fragrances and elixirs. But I also believe that part of my role is to prepare for the far future of this company. The far future of this company is into anything that's around care. I think fragrances are a care of the mind. Skincare is, by definition, the care of the skin. These are two categories that have a lot of similarities. They are both very profitable categories.

Radical in terms of how much we invest the good news is that the size of the brand is small and therefore the growth is almost natural because of the size. So we are going to be very very careful in making the food resources available behind what is our strength what is our uniqueness.

Speaker #4: From anything that's adjacency scenting to classical fragrances and elixirs. But I also believe that part of my role is to prepare for the far future of this company.

Speaker #4: And the far future of this company is into anything that's around care. I think fragrances are a care of the mind. Skincare is, by definition, the care of the skin.

And what is our growing business today.

Speaker #4: These are two categories that have a lot of similarities. They are both very profitable categories. They are both poised for growth for the next, I would say, decades.

And most profitable business also which is sending a couch.

Laurent Mercier: They are both poised for growth for the next, I would say, decades because of the aging of the population when it comes to skincare and the fact that people are really willing and obsessed with the fact that they want to age gracefully or in good health. The global warming and the UV, I would say, exposure of human beings for the decades to come will require everyone to use sun protection. This is something I can tell you. So it's also, for me, a bet on the future. Now, coming back to the present, we are going to be much more, I would say, radical in terms of how much we invest. The good news is that the size of the brand is small, and therefore, the growth is almost natural because of the size.

Thank you.

Speaker #4: Because of the aging of the population when it comes to skincare, and the fact that people are really willing and obsessed with the idea of aging gracefully or in good health.

Our next question will come from Chris Carey with Wells Fargo Securities.

Hi, everyone I wanted to ask about cash flow.

Speaker #4: The global warming and the UV, I would say, exposure of human beings for the decades to come will require everyone to use sun protection.

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Over the next several years.

What are the cash commitments that we should be thinking about.

Speaker #4: This is something I can tell you. So it's also for me a bet on the future. Now, coming back to the present, we are going to be much more, I would say, radical in terms of how much we invest.

I think I'm, specifically thinking about the swaps you also talked about refinancing of the <unk>.

Certain debt, but.

Speaker #4: The good news is that the size of the brand is small. Therefore, the growth is almost natural because of the size. We are going to be very, very careful in making the full resources available behind what is our strength, what is our uniqueness, and what is our growing business today.

I was just wondering if we could get.

Some sense of kind of obligations you might have over the next several years and I have.

The more strategic follow up.

Laurent Mercier: So we are going to be very, very careful in making the full resources available behind what is our strength, what is our uniqueness, and what is our growing business today, and most profitable business also, which is scenting at large.

Yeah, Yeah. Good morning, Chris I mean, I keep repeating and I'm, saying that of course smoke.

Sure. They regime as you know remains a member when he keeps or indeed, I mean, we are building a plant.

Speaker #4: And most profitable business also, which is scenting at large.

As I just shared I mean, we you know afghanis visa all fiscal year of 2006 cash rule I mean, we'd increase yes.

Speaker #2: Thank you. Our next question will come from Chris Carey with Wells Fargo Securities.

Chelsea (Conference Operator): Thank you. Our next question will come from Chris Carey with Wells Fargo Securities.

Yes.

It's called <unk>.

Did you you understand that you need we have these headwinds.

Speaker #6: Hi, everyone. I wanted to ask about cash flow. Laurent, over the next several years, what are the cash commitments that we should be thinking about?

Chris Carey: Hi, everyone. I wanted to ask about cash flow. Laurent, over the next, you know, several years, what are the cash commitments that we should be thinking about? I think I am specifically thinking about the swaps. You also talked about refinancing of certain debt. I was just wondering if we could get some sense of the obligations you might have over the next several years, and I have a more strategic follow-up.

Could you. Please try we still have headwinds.

Another year.

For fiscal 'twenty six due to the.

These retailers you know inventory Destocking impact, but then as we are entering.

Speaker #6: I think I'm specifically thinking about the swaps. You also talked about refinancing certain debt. But I was just wondering if we could get a sense of the obligations you might have over the next several years.

Under your 26, then Gail really back from the 12 volt Casher cycles.

All the regions I would say we are.

Muttering very well so starting of course with EBITDA, but also very tight control on the inventory.

Speaker #6: And I have the more strategic follow-up.

Jointly we shared the several times I'm annoyed stocking for speed that we are.

Speaker #4: Yeah. Yeah. Good morning, Chris. I mean, you know, I keep repeating and saying that, of course, you know, cash on deleveraging is, you know, remains the number one imperative.

Laurent Mercier: Yeah. Good morning, Chris. I mean, I keep repeating and saying that, of course, cash and deleveraging remains the number one imperative. So indeed, we are building the plans. As I just shared, our plan is really that our fiscal year 2026 cash flow will increase versus our fiscal 2025. Indeed, you understand that we had these headwinds in fiscal year 2025. We still have headwinds in the first half of fiscal 2026 due to these retailers' inventory destocking impact. Then, as we are entering calendar year 2026, we are really back to our normal cash cycle. That is really with all the ingredients that I would say we are mastering very well, starting, of course, with the EBITDA, but also very tight control on the inventory. Inventory, we shared several times, and now it is starting full speed that we are implementing a new forecasting tool, O9.

<unk> team and our new forecasting tool.

And he's getting video and each will give more and more.

Results in terms of forecast accuracy, which has a direct effect on excess and obsolescence, but most importantly, the rate impact on the level of inventory and we had some cash.

Speaker #4: So indeed, I mean, we are building the plans. And as I just shared, I mean, you know, our plan is really that our fiscal year 2026 cash flow.

Speaker #4: I mean, will increase versus, you know, our fiscal 25. And indeed, you understand that indeed we had these headwinds in fiscal year 25. We still have, you know, headwinds in calendar year in the first half of fiscal 26 due to the, you know, again, these retailers, you know, inventory destocking impact.

We stay very strict on that one he has sold very strict on O. U P. Also of course to make sure that you know.

N genius in motion so.

Indeed.

Yes.

So that means as you can make gordy's is really that oh.

It's really something that we can activate that someone mentioned weather as a share buyback. So of course, we are making sure that he's the right moment and really when we get out to the more difficult context that indeed, we can continue again those east.

Speaker #4: But then, as we are entering the calendar year 2026, we are really back to our normal cash cycle. So that's really, with all the ingredients that I would say we are mastering very well.

Speaker #4: So starting, of course, with the EBITDA. But also, very tight control on the inventory. Inventory, we share several times. And now it's starting full speed that we are implementing, you know, a new forecasting tool, O9.

As the agenda and on your last point, Yeah, I mean refinancing yes of course.

We have we have maturity in calendar year 'twenty six.

It's a no brainer.

Speaker #4: And it's giving really and it will give more and more strong results in terms of forecast accuracy, which has a direct impact on excess and obsolescence.

Actively working and ease of a.

Laurent Mercier: It is giving really, and it will give more and more, strong results in terms of forecast accuracy, which has a direct impact on excess and obsolescence, but most importantly, a direct impact on the level of inventory and will help the cash. We stay very strict on our DSO, very strict on our DPO, of course, to make sure that our cash engine is fully in motion. Indeed, the swaps, as you know, the ultimate goal is really that it is something that we can activate at some moment as a share buyback. Of course, we are making sure that it is the right moment and really when we get out of a more difficult context that indeed we can continue again this agenda. On your last point, refinancing, yes, of course. We have maturity in calendar year 2026.

Refinancing to extend the maturity I mean, we are in a good position.

And of course, you know taking benefit total.

Speaker #4: But most importantly, direct impact on the level of inventory and will help the cash. So, you know, we stay very strict on our DSO, very strict on our DPO.

You have a constant creatives.

Great.

Our last refinancing was very successful.

Speaker #4: So, of course, to make sure that, you know, our cash engine is fully in motion. So indeed, the swaps, I mean, is as you know, I mean, the ultimate goal is really that it's really something that we can activate at some moment, you know, as a share buyback.

Good position and of course ready to to continue with these healthy trajectory.

Oh, gosh refinancing and deleveraging the company.

Yes, we are confident in setting that up.

Absolutely.

Okay great.

Thank you.

Speaker #4: So, of course, we are making sure that it's the right moment and really when we get out of a more difficult context that indeed we can continue again this agenda.

Just from a consumer beauty standpoint, this balance between.

Revenue and profitability.

Can you just maybe outline a bit more aspiration is for <unk>.

Speaker #4: And on your last point, yeah, I mean, refinancing, yes, of course, we have maturity in calendar year 2026. So it's a no-brainer that we are actively working on these refinancing to extend the maturity.

Profitability in the business, maybe from a margin perspective in the coming few years and how you might.

Laurent Mercier: It is a no-brainer that we are actively working on this refinancing to extend the maturity. We are in a good position. Of course, taking benefit of our consecutive rating upgrades. Our last refinancing was very successful. We are in a good position. Of course, really to continue this healthy trajectory on cash refinancing and deleveraging the company.

Because I guess be comfortable with a.

Revenue impacts if if if you achieve profitability objectives in the coming two years.

Speaker #4: I mean, we are in a good position. And of course, you know, taking benefit of our consecutive rating upgrades. You know, our last refinancing was very successful.

Yeah.

That's all I can tell you a temporary T. I mean you.

You see I mean of course into into numbers that we are really seems that of course that means a bigger a big pillar of our profit generation.

Speaker #4: We are in a good position. And of course, we need to continue this healthy trajectory on cash, refinancing and deleveraging the company. Yes, we are confident in selling Vella.

East from prestige.

And she is indeed, 90% of the proceeds and indeed.

Sue Nabi: Yes, we are confident in selling Wella.

Speaker #4: I'll start the second part. Yes, absolutely.

Laurent Mercier: Yes.

The consumer beauty is indeed generating you know the profit piece too. So we are we have we are working very actively on.

Sue Nabi: To answer the second part.

Laurent Mercier: Yes. Absolutely.

Speaker #6: Okay. Great. Thank you. And just from a consumer beauty standpoint, this balance between revenue and profitability—can you outline a bit more aspirations for profitability in the business, maybe from a margin perspective, in the coming few years?

Chris Carey: Okay. Great. Thank you. From a consumer beauty standpoint, this balance between revenue and profitability, can you just maybe outline a bit more?

Several initiatives to improve significantly.

The profitability of this division I mean is that so that's the number one Monday and as you can imagine I mean, we are going through I mean, the food value creation.

Conference System: aspirations for profitability in the business, maybe from a margin perspective in the coming few years, and how you might be comfortable with potential revenue impacts if you achieve profitability objectives in the coming few years. Thanks.

Speaker #6: And how you might, you know, I guess, be comfortable with, you know, potential revenue impacts if you achieve profitability objectives in the coming few years?

Model. So looking at of course, the cost of goods I mean or is G&A.

So on a yes or no against <unk>.

You know sue referred to that.

Speaker #6: Thanks.

At the beginning so each need to be more precise N V. Twin just kind of where we locate oh money and Nvidia are still making sure we are protecting our loyal consumers.

Speaker #4: Yeah. I mean, that's, I can tell you, a key priority. I mean, you see, of course, in the numbers that we are releasing, that, of course, I mean, the big pool of our profit generation, you know, is from Prestige, and this is indeed 90% of the profit.

Laurent Mercier: I mean, that is a key priority. I mean, you see, of course, in the numbers that we are releasing that, of course, the big pool of our profit generation is from prestige, and this is indeed 90% of the profit. And indeed, the consumer beauty is generating, the profit is too low. So we are working very actively on several initiatives to improve significantly the profitability of this division. I mean, that is a number one mandate. As you can imagine, we are going through the full value creation model. So looking at, of course, the cost of goods, our SG&A, and also on our A&CP. Sue Nabi referred to that at the beginning. So it is really to be more precise and really to understand where we allocate our money, and really also making sure we are protecting our loyal consumers.

All drugs, we have a very strong loyal consumers, who we need to make sure that.

We keep.

Communicating with our wisdom. So it means I mean, it seems this is beyond Europe.

Question, So there's always a trade off between profitability and top line.

Indeed this is what we are looking in.

Very detailed manner, yes, it may imply that in some cases in some specific situations, where we think that its not profitable enough.

Yeah. We made you get we may take some choices, which may impact indeed, the net revenue.

And in the wastewater system it seems that you're driving.

And good reason or so on nitro the new so the number one Monday no for this division is really productivity.

Thank you.

Next question will come from Ana <unk> with Bank of America.

Uh huh.

And thank you so much for the question.

Laurent Mercier: I mean, you know our brands, we have very strong loyal consumers. So we need to make sure that we keep communicating with them. So it means, and I think this is behind your question, it is always a trade-off between profitability and top line. Indeed, this is what we are looking at in a very detailed manner. Yes, it may imply that in some cases, in some specific situations where we think that it is not profitable enough, we may take some choices which may impact indeed the net revenue. In a way, it is also something that is driving our algorithm also on net revenue. So the number one mandate now for this division is really profitability.

I wanted to ask on the prestige fragrance market in the past and you mentioned that growth in prestige fragrances.

That's for my kitchen craft back what's included Gen V NAND and Hispanic.

I was wondering if you're seeing a particular call backfriend ethnic demographics or income carriers, particularly in the U S.

And then on the broader U S beauty market are you seeing any specific.

And concurrent with a pullback or a wider array.

Thanks, so much.

Please standby for one moment, probably reconnect the speaker line.

Yeah.

Operator: Thank you. Our next question will come from Anna Lizzul with Bank of America.

Chelsea (Conference Operator): Thank you so much for the question. I wanted to ask on the prestige fragrance market. In the past, you mentioned that growth in prestige fragrances was due to growth from a few demographics, which included Gen Z, men, and Hispanics. I was wondering if you are seeing a particular pullback from specific demographics or income tiers, particularly in the US. On the broader US beauty market, are you seeing any specific, you know, income tiers with a pullback or a wider array? Thanks so much.

Once again, please stand by.

While we reconnect the speaker.

Yeah.

There was a disconnection on the mainline so now we are back in here as well.

Yeah, I can hear you now.

Were you speaking is it now.

Yeah, that's an Anna <unk> from Bank of America.

Oh, sorry.

Thank you.

I took notes, but my understanding is that the prestige fragrance market in the past the market. He will die cost until the market and you are right.

Thanks, so much.

Operator: Please stand by for one moment while we reconnect the speaker feed line. Once again, please stand by while we reconnect the speaker feed line.

Please standby for one moment, while we reconnect the speaker line.

Mentioned.

In the U S.

You mentioned also and then you mentioned the surgeon.

And there is a pullback in some of these demographics, we don't see a pullback in these demographics.

See penetration continuing to increase among the main demographics.

Once again please.

Okay.

Standby, while we reconnect the speaker feedback.

Consumers specifically the male consumers who are today those behind the biggest successes men's fragrances. That's one of the regions, probably the Natus Hugo boss beyond launching decision, making so well.

Okay.

Laurent Mercier: I think there was a disconnection on the main line. Now we are back. Can you hear us well?

There was a disconnection on the mainline so now we are back and you're here as well.

Of course, it's also attracts this younger generation versus what we did in the past. The Hispanic community is continuing to be another consumer of.

Chelsea (Conference Operator): I can hear you.

Yes, I can hear you.

Laurent Mercier: Who is speaking? Is it Anna?

Were you speaking is it enough.

Chelsea (Conference Operator): Yes. This is Anna from Bank of America.

Yes. This is Anna <unk> from Bank of America.

I would say, a very strong and long lasting fragrances, which we have seen consistent continuing.

Laurent Mercier: Oh, okay. Sorry. Anna, thank you. I took notes, but my understanding is that on the prestige fragrance market in the past, the market was fueled by courts entering the market. You rightly mentioned Hispanics in the U.S. You mentioned men. You mentioned Gen Zs. If there is a pullback in some of these demographics, we do not see a pullback in these demographics. We even see a penetration curve continuing to increase among the main demographics that are the Gen Z consumers, specifically the teen male consumers who are today those behind the biggest successes in male fragrances. That is one of the reasons probably the latest Hugo Boss Bottled Beyond launch is resonating so well. It is because it also attracts this younger generation versus what we did in the past.

Okay I'm sorry.

Thank you so I'm.

I took notes, but my understanding is that in the prestige fragrance market in the past the market was fueled by cost entering the market and you rightly.

No.

Also see among Gen Z is the heavy users proportion has never been higher than now so they own a lot of fragrances, sometimes three or four which is what is called the wadsworth effect and we see now.

Mentioned.

Hispanics in the U S. A you mentioned also men you mentioned us with Gen Z and if there is a pull back in some of these demographics, we don't see a pullback in these demographics, we even see penetration curve continuing to increase among the main demographics that are there.

Maybe you spend them in them, becoming part of this something index acknowledge as I like to cut it so.

So in short we don't pull back from any of these demographics.

Thank you.

Gen Z consumers, specifically the Keene male consumers, who are today those behind the biggest successes men's fragrances. That's one of the regions probably the latest Hugo boss beyond launch is resonating so well.

Our last question will come from the trio.

With Barclays.

Good morning. Thank you so much for taking my question.

Could you speak a little bit about <unk>.

Expectations around the 'twenty 'twenty journey I've kidney continued back a battle.

Because it's also attracts this younger generation versus what we did in the past. The Hispanic community is continuing to be another consumer of.

Laurent Mercier: The Hispanic community is continuing to be an overconsumer of, I would say, very strong and long-lasting fragrances, which we have seen consistently continuing. Last but not least, we also see that among Gen Zs, the heavy users' proportion has never been higher than now. They own a lot of fragrances, sometimes three or four. This is what is called the wardrobe effect. We see now the perfume mist phenomenon becoming part of this scenting index at large, as I like to call it. To answer in short, we do not see pullback from any of these demographics.

The current structure that you currently have it clean.

Secondly.

I would say, a very strong and long lasting fragrances, which we have seen consistently continuing and last but not least we also see that among gen. Z is the heavy users proportion has never been higher than now so they own a lot of fragrances, sometimes three or four this is what is called the wardrobe effect.

Pat.

And calendar 'twenty.

Should we assume that that's.

I E.

Gotcha.

Yeah back half.

For calendar year, 'twenty FX right.

Uh huh.

And we see now the few missed phenomenon, becoming part of this Scenting index Atlas as I'd like to call. It so to answer in short we don't see pushback from any of these demographics.

Al.

Yeah.

Yeah. Good morning, Thanks for the question.

Refinancing.

Sure.

Yes, absolutely I mean, you can be consistent I mean, we just secured structure in place to keep so absolutely yes.

Okay.

Operator: Thank you. Our last question will come from Priya Uri Gupta with Barclays.

Thank you.

Our last question will come from Priya, <unk> Gupta with Barclays.

So on deleveraging.

Olivia Tong: Hey, good morning. Thank you so much for taking the question. Laurent, could you speak a little bit more about your refinancing expectations around the 2026 maturity? Should we continue to expect that that will be consistent with the secured structure that you currently have in place? Then secondly, as we are thinking about the path to deleveraging in calendar 2026, should we assume that that is primarily driven by improving EBITDA trends as some of the cost savings take hold into the back half of the calendar year in 2026, or is there some expectation that the Wella stake sale will also help achieve that outcome? Thank you.

I mean, the model is very clear.

Hey, good morning. Thank you so much for taking the question.

We understand from the guidance, we are giving you need that.

Could you speak a little bit more about your refinancing expectations around the 2026 maturity.

Q1, and Q2 of course will be impacted by it.

Should we continue to expect that that'll be consistent with the secured structure that you currently have in place.

So the way it can be done, but we stay absolutely focused on that.

Working capital.

That makes sense.

Secondly, as we're thinking about the path to Delever.

Then enter into number 26 as I shared before.

Calendar 'twenty six.

EBITDA impact gross cash generation.

Should we assume that that's primarily driven by.

We're going to continue.

EBITDA does.

Virginia agenda.

Okay.

As we shared we are indeed.

The back half of the calendar year 'twenty FX.

New working on.

Or is there some expectation.

And the teacher and indeed to help and support.

That the Wallis stake sale will also help.

Thank you.

Totally agree.

Laurent Mercier: Good morning, Priya. Thank you for the question. On refinancing expectations, yes, absolutely. It will be consistent with the secure structure in place. Absolutely, yes. On deleveraging, the model is very clear. You understand from the guidance we are giving that indeed Q1 and Q2, of course, will be impacted by the lower EBITDA, but we stay absolutely focused on the working capital and the CapEx discipline. Then entering calendar year 2026, as I shared before, with EBITDA being back to growth, cash generation, we are going to continue deleveraging agenda. Indeed, as we shared, we are actively working on the Wella stake divestiture, and indeed to help and support, to accelerate our deleveraging.

Yeah.

Yes. Good morning. Thank you for the question so on.

Thank you.

Yeah.

Refinancing expectations.

Thank you.

Yes, absolutely I mean, it will be consistent with a secured structure in place silky so absolutely yes.

At this time, we have no further questions in the queue. So I would like to turn the call back over to our speakers for any additional or closing remarks.

So on deleveraging.

Thank you very much thank you everyone.

Again, I mean, the model is very clear and you understand from the guidance, we are giving that indeed that.

Of course, we realized our results are not satisfying. Please know that we are acting with urgency, especially in the U S. As you have seen is we have taken all the required action and we have a plan with the first.

Q1, and Q2 of course will be impacted by.

The lower EBITDA, but we stay absolutely focused on the working capital and Capex discipline.

In early April.

We're seeing green shoots.

The company is now more focused it's financially stronger than ever of course, no. One is immune to market with activity, but these results do not reflect the true potential and value of the business. We are building. So we are confident that the strength of the company will be with a knife and visible as quickly.

During calendar year 2006, as I shared before.

EBITDA being back to growth cash generation, we are going to continue.

Did a virginia agenda and indeed as we shared we are indeed.

Actively working really on.

Zyla.

This teacher, and indeed to help and support in the to accelerate our deleveraging.

Thank you very much.

Thank you ladies and gentlemen, this does conclude todays presentation and we appreciate your participation you.

Olivia Tong: Okay. Thank you so much.

Great. Thank you so much.

Yeah.

You may disconnect at any time.

Operator: Thank you. At this time, we have no further questions in the queue. I would like to turn the call back over to our speakers for any additional or closing remarks.

Thank you.

At this time, we have no further questions in the queue. So I would like to turn the call back over to our speakers for any additional or closing remarks.

Mhm.

[music].

Laurent Mercier: Thank you very much. Thank you, everyone. We, of course, we realize our results are not satisfying. Please know that we are acting with urgency, especially in the US, as you have seen it. We have taken all the required action, and we have a clear plan with first and early, very, very promising green shoots. The company is now more focused. It is financially stronger than ever. Of course, no one is immune to market volatility, but these results do not reflect the true potential and value of the business we are building. So we are confident that the real strength of the company will be recognized and visible as quickly as possible in fiscal 2026. Thank you very much.

Thank you very much thank you everyone.

We are of course, we realize our results are not satisfying. Please note that we are acting with urgency, especially in the U S. As you have seen is we have taken all the required action and we have a clear plan with first and early very very promising green shoots there.

Hum.

Yeah.

Company is now more focused it's financially stronger than ever.

Of course, no one is immune to market volatility, but this results do not reflect the true potential and value of the business. We are building. So we are confident that the real strength of the company will be recognized and visible as quickly as possible in fiscal 'twenty six thank you very much.

Yeah.

Operator: Thank you, ladies and gentlemen. This does conclude today's presentation, and we appreciate your participation. You may disconnect at any time.

Thank you ladies and gentlemen, this does conclude todays presentation and we appreciate your participation you.

You may disconnect at any time.

Mhm.

[music].

Hum.

[music].

Hum.

[music].

Okay.