Coty Inc 8-K, filed Apr 30, 2020
Coty Inc. (COTY)
8-K
2020-04-30
For: 2020-04-30
View Original
Added on
April 10, 2026
About this 8-K
Coty Inc filed this 8-K on April 30, 2020.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 30, 2020
(Exact Name of Registrant as Specified in its Charter)
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||||||||
Registrant’s telephone number, including area code: (212 ) 389-7300
(Former name or former address, if changed from last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o
Item 7.01. Regulation FD Disclosure.
Operating and reportable segments (referred to as “segments”) reflect the way the Company is managed and for which separate financial information is available and evaluated regularly by the Company’s chief operating decision maker ("CODM") in deciding how to allocate resources and assess performance. The Company has designated its Chief Executive Officer as the CODM.
On July 1, 2019, the Company announced its turnaround plan, which included the Company’s CODM changing the reporting structure used to allocate resources from the previous category focused organizational structure that included three operating and reportable segments: Luxury, Consumer Beauty and Professional Beauty, to a structure based on regional commercial business units. These changes were implemented during the three months ended March 31, 2020.
As a result of these changes, the Company has four operating segments and reportable segments: Europe, Middle East & Africa (“EMEA”); Americas; Asia Pacific; and Professional Beauty. EMEA, Americas and Asia Pacific include the businesses focused on prestige fragrances, premium skin care, premium color cosmetics, mass color cosmetics, retail hair coloring and styling products, mass fragrance, mass skin care and body care, and are supported by central marketing teams.
The Company has recast its results for each quarter of fiscal 2019, fiscal year 2019 and the first and second quarters of fiscal 2020 to reflect the changes in its segments in Exhibit 99.1.
The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(i)Exhibits:
| Exhibit No. | Description | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Coty Inc. | ||||||||||||||
| (Registrant) | ||||||||||||||
| Date: April 30, 2020 | By: | /s/Pierre-André Terisse | ||||||||||||
| Pierre-André Terisse | ||||||||||||||
| Chief Financial Officer | ||||||||||||||
EXHIBIT INDEX
| Exhibit No. | Description | |||||||
| 99.1 | Supplemental unaudited historical financial information. | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
COTY INC. & SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Overview
Operating and reportable segments (referred to as “segments”) reflect the way the Company is managed and for which separate financial information is available and evaluated regularly by the Company’s chief operating decision maker ("CODM") in deciding how to allocate resources and assess performance. The Company has designated its Chief Executive Officer as the CODM.
On July 1, 2019, the Company announced its turnaround plan, which included the Company’s CODM changing the reporting structure used to allocate resources from the previous category focused organizational structure that included three operating and reportable segments: Luxury, Consumer Beauty and Professional Beauty, to a structure based on regional commercial business units. These changes were implemented during the three months ended March 31, 2020. See Note 1—Description of Business in the December 31, 2019 10-Q for information on the Company’s turnaround plan update announced on October 21, 2019.
As a result of these changes, the Company has four operating segments and reportable segments: Europe, Middle East & Africa (“EMEA”); Americas; Asia Pacific; and Professional Beauty. EMEA, Americas and Asia Pacific include the businesses focused on prestige fragrances, prestige skin care, prestige color cosmetics, mass color cosmetics, retail hair coloring and styling products, mass fragrance, mass skin care and body care, and are supported by central marketing teams.
Certain income and shared costs and the results of corporate initiatives are managed by Corporate. Corporate primarily includes restructuring and realignment costs, costs related to acquisition and divestiture activities and impairments of long lived assets, goodwill and intangibles that are not attributable to ongoing operating activities of the segments. Due to the changes in the reporting structure to the CODM, certain internal cost allocations between the segments were revised. Further, previously incurred amortization expense and asset impairment charges related to goodwill and intangible assets that have historically supported Luxury and Consumer Beauty categories were reallocated. The results of Younique, LLC ("Younique") are included in "Other." Corporate costs are not used by the CODM to measure the underlying performance of the segments.
In order to reflect the changes in its segments, the Company has recast by segment the following quarterly and fiscal year financial information for each quarter of fiscal 2019, the fiscal year 2019, and for the first and second quarters of fiscal year 2020:
•Reported net revenue;
•Reported year-over-year and like-for-like net revenue trends; and
•Reported operating income (loss) and adjusted operating income.
The Company’s total reported net revenue, operating income (loss), and adjusted operating income remain consistent with previously issued quarterly and annual reports.
The Company operates on a fiscal year basis with a year-end of June 30. Unless otherwise noted, any reference to a year preceded by the word “fiscal” refers to the fiscal year ended June 30 of that year. For example, references to “fiscal 2020” refer to the fiscal year ending June 30, 2020. For the periods described in this recast, the term “like-for-like” describes the Company's core operating performance, excluding the financial impact of (i) acquired brands or businesses in the current year period until we have twelve months of comparable financial results, (ii) the divested brands or businesses or early terminated brands, generally, in the prior year non-comparable periods, to maintain comparable financial results with the current fiscal year period and (iii) foreign currency exchange translations to the extent applicable.
1
COTY INC. & SUBSIDIARIES
NET REVENUES BY SEGMENT
(In millions)
(Unaudited)
| Fiscal 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended | Fiscal Year to Date | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2018 | December 31, 2018 | March 31, 2019 | June 30, 2019 | June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Americas | $ | 605.8 | $ | 710.0 | $ | 581.6 | $ | 629.7 | $ | 2,527.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EMEA | 725.9 | 974.5 | 705.6 | 724.7 | 3,130.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asia Pacific | 199.2 | 209.6 | 197.7 | 221.5 | 828.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Professional Beauty* | 406.5 | 523.1 | 419.0 | 455.9 | 1,804.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other** | 93.9 | 94.0 | 86.7 | 83.6 | 358.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 2,031.3 | $ | 2,511.2 | $ | 1,990.6 | $ | 2,115.4 | $ | 8,648.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2019 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Americas | $ | 547.8 | $ | 648.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| EMEA | 718.2 | 961.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asia Pacific | 204.0 | 208.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Professional Beauty* | 417.3 | 526.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other** | 55.5 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 1,942.8 | $ | 2,345.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
*Professional Beauty net revenues differ inconsequentially from reported amounts in prior quarterly and annual filings as the net revenues attributable to professional beauty products sold through mass retail and travel retail channels are now reflected in the respective regional segment.
**In September 2019, the Company divested all of its membership interest in Younique. Younique’s historical net revenues and operating income (loss) are presented in the “Other” segment.
2
COTY INC. & SUBSIDIARIES
NET REVENUES BY SEGMENT
YOY (Year-over-Year) and LFL (Like-for-Like) trends
(Unaudited)
| Fiscal 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended | Fiscal Year to Date | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2018 | December 31, 2018 | March 31, 2019 | June 30, 2019 | June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| YOY | LFL | YOY | LFL | YOY | LFL | YOY | LFL | YOY | LFL | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Americas | (13.5) | % | (10.5) | % | 2.1 | % | 7.7 | % | (7.5) | % | (2.4) | % | (10.5) | % | (8.0) | % | (7.3) | % | (3.4) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EMEA | (11.0) | (10.1) | (9.0) | (2.3) | (15.1) | (5.6) | (9.3) | (3.7) | (11.0) | (5.2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asia Pacific | (0.6) | (2.0) | (2.6) | 4.6 | (1.8) | 5.8 | 11.6 | 15.9 | 1.6 | 6.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Professional Beauty* | (4.4) | (2.1) | (4.1) | (0.8) | (6.0) | (0.5) | (6.9) | (3.0) | (5.3) | (1.6) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other** | (3.1) | (3.1) | (15.3) | (15.3) | (25.4) | (25.4) | (23.3) | (23.3) | (17.3) | (17.3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | (9.2) | % | (7.7) | % | (4.8) | % | 0.7 | % | (10.4) | % | (3.7) | % | (8.0) | % | (4.1) | % | (8.0) | % | (3.5) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2019 | December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net revenues | YOY | LFL | YOY | LFL | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Americas | (9.6) | % | (8.9) | % | (8.6) | % | (7.2) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EMEA | (1.0) | 2.9 | (1.4) | 0.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asia Pacific | 2.4 | 4.5 | (0.4) | 0.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Professional Beauty* | 2.6 | 5.3 | 0.7 | 2.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other** | (40.8) | (32.0) | NM** | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | (4.4) | % | (1.1) | % | (6.6) | % | (1.4) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
*Professional Beauty net revenues differ inconsequentially from reported amounts in prior quarterly and annual filings as the net revenues attributable to professional beauty products sold through mass retail and travel retail channels are now reflected in the respective regional segment.
**In September 2019, the Company divested all of its membership interest in Younique. Younique’s historical net revenues and operating income (loss) are presented in the “Other” segment.
3
COTY INC. & SUBSIDIARIES
OPERATING INCOME (LOSS) AND ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT
(In millions)
(Unaudited)
| Fiscal 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended | Fiscal Year to Date | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2018 | December 31, 2018 | March 31, 2019 | June 30, 2019 | June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating income (loss)*** | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Americas | $ | 29.0 | $ | (358.7) | $ | 36.4 | $ | (1,157.3) | $ | (1,450.6) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EMEA | (3.1) | (258.3) | 53.8 | (1,071.0) | (1,278.6) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asia Pacific | 16.4 | (68.2) | 22.4 | (193.8) | (223.2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Professional Beauty | (3.2) | 81.0 | 33.0 | 11.7 | 122.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | (4.0) | (4.1) | (2.9) | (7.6) | (18.6) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate | (55.8) | (196.3) | (57.2) | (313.7) | (623.0) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | (20.7) | $ | (804.6) | $ | 85.5 | $ | (2,731.7) | $ | (3,471.5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted operating income (loss)*** | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Americas | $ | 53.4 | $ | 69.2 | $ | 56.4 | $ | 85.6 | $ | 264.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EMEA | 42.8 | 139.2 | 88.3 | 81.5 | 351.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asia Pacific | 24.3 | 10.1 | 29.2 | 33.8 | 97.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Professional Beauty | 14.9 | 98.9 | 49.7 | 55.9 | 219.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other** | 4.8 | 4.7 | 5.6 | 1.2 | 16.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate | 0.6 | 0.2 | 0.3 | (0.9) | 0.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 140.8 | $ | 322.3 | $ | 229.5 | $ | 257.1 | $ | 949.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal 2020 | ||||||||||||||||||||||||||||||||
| Three months ended | ||||||||||||||||||||||||||||||||
| September 30, 2019 | December 31, 2019 | |||||||||||||||||||||||||||||||
| Operating income (loss)*** | ||||||||||||||||||||||||||||||||
| Americas | $ | (2.0) | $ | 38.9 | ||||||||||||||||||||||||||||
| EMEA | 39.2 | 117.0 | ||||||||||||||||||||||||||||||
| Asia Pacific | 16.8 | 10.8 | ||||||||||||||||||||||||||||||
| Professional Beauty | 28.3 | 81.9 | ||||||||||||||||||||||||||||||
| Other | (11.0) | — | ||||||||||||||||||||||||||||||
| Corporate | 54.7 | (213.2) | ||||||||||||||||||||||||||||||
| Total | $ | 126.0 | $ | 35.4 | ||||||||||||||||||||||||||||
| Adjusted operating income (loss)*** | ||||||||||||||||||||||||||||||||
| Americas | $ | 16.1 | $ | 57.7 | ||||||||||||||||||||||||||||
| EMEA | 74.1 | 150.3 | ||||||||||||||||||||||||||||||
| Asia Pacific | 23.6 | 18.2 | ||||||||||||||||||||||||||||||
| Professional Beauty | 45.5 | 99.1 | ||||||||||||||||||||||||||||||
| Other** | (3.6) | — | ||||||||||||||||||||||||||||||
| Corporate | (1.0) | (0.3) | ||||||||||||||||||||||||||||||
| Total | $ | 154.7 | $ | 325.0 | ||||||||||||||||||||||||||||
**In September 2019, the Company divested all of its membership interest in Younique. Younique’s historical net revenues and operating income (loss) are presented in the “Other” segment.
*** The reported Operating Income (Loss) reconciles to the Adjusted Operating Income and the adjustments primarily include restructuring and business realignment costs, costs related to acquisitions and divestitures, asset impairment charges and amortization expense. The reconciliations were disclosed in the filings as noted below.
4
Note Regarding Non-GAAP Presentation
The following information is incorporated herein by reference:
Reconciliations of reported operating income (loss) to adjusted operating income and reported net revenues to like-for-like net revenues was reported under sections “Reconciliation of Reported Income (Loss) to Adjusted Operating Income” and “Reconciliation of Reported Net Revenues to Like-For-Like Net Revenues”, respectively, of the listed Earnings Reports:
–Fiscal Second Quarter 2020 Results (released February 5, 2020)
–Fiscal First Quarter 2020 Results (released November 6, 2019)
–Fiscal Fourth Quarter 2019 Results (released August 28, 2019)
–Fiscal Third Quarter 2019 Results (released May 8, 2019)
–Fiscal Second Quarter 2019 Results (released February 8, 2019)
–Fiscal First Quarter 2019 Results (released November 7, 2018)
5