Coty Announces Turnaround Plan; Sets FY23 Financial Targets - Quick Facts

(RTTNews) - Coty Inc. (COTY) announced a four-year Turnaround Plan to steadily improve gross margin and operating margin, as well as to drive free cash flow and reduce leverage. Under the Plan, Coty expects to reduce fixed costs with a new organizational structure that aligns costs with revenues.

For fiscal 2023, the company projects: operating margin between 14% and 16%; and free cash flow of around $1 billion.

For fiscal 2020, the company expects: moderating decline in net revenues; constant currency adjusted operating income up 5% to 10%; and moderate free cash flow improvement.

The company expects to incur one-time cash costs of approximately $600 million spread over fiscal 2020 through fiscal 2023.

To cut fixed costs, the company plans to reduce organizational layers and positioning all key markets closer to the Executive Committee. Coty plans to change from the current organizational structure into regional commercial teams in Europe, EMEA, Americas & Asia Pacific. Also, the company plans to create a centralized management headquarters in Amsterdam, a cost-efficient location.