About Euromonitor International

We’re a global market research firm with a focus on fast moving consumer goods, founded in 1972

With offices in London, Chicago, Singapore, Shanghai, Vilnius, Dubai and Cape Town

Research is conducted in 80 countries around the world In-country researchers add primary market awareness Research uses standardized definitions in all countries Sources include trade press, trade interviews, company analysis, industry

associations, official statistics, local store checks

Today’s Agenda

Snap shot of the Global Cosmetics & Toiletries Market What trends are emerging in the current environment

Defense against the effects of aging gains prominence Going ‘green’: rising demand for natural and organic ingredients Male-specific products gain acceptance among global males Rising demand for ethnic specific products

Future outlook

State of the Global Industry

Emerging markets

North America57.2b US$

Latin America

41b US$ Middle East and Africa

12.6b US$

Asia Pacific70.9b US$

Eastern Europe20.9b US$

Western Europe 83.7b US$

Australasia4.3b US$

+3.8

+4.3%

+1.8% +11.3%

-0.5%

+6.2%

BRIC drives growth in the global market. Local leading brands get aspirational and are starting to expand Expansion of major stores, direct selling are boosting the sales.

+1.8%

+15.0%

Key Trends – Anti Aging

2007: US$17.2 billion Global Anti-Aging Market

2007 Value US$ 02-07 CAGR Forecast 07-12 CAGR

Nourishers/anti-agers $14.9 billion 10.8 7.5

Firming/anti-cellulite body care $2.3 billion 12.9 6.0

Global skin care market: US$65.7 billion in 2007

Global cosmetics & toiletries market: US$291.0 billion in 2007

Japan: 9% of global nourishers/anti-agers value sales and 2% of global population

Western Europe: 34% of global anti-agers sales and 7% of global population US: 15% of global anti-agers value sales and 4.5% of global population Huge demand for anti-aging stimulating NPD across all products

Anti-Aging Statistics

The Global Aging Population Increasing Demand for Anti-aging Products

% of population 50 and Older 1990 2007 2020

World 16.8% 20.4% 24.7%

Asia (Excluding Japan) 14.3% 19.4% 25.2%

Latin America 13.5% 17.5% 23.0%

Middle East & Africa 10.1% 10.8% 12.4%

North America + Western Europe + Japan 28.1% 33.5% 38.7%

Baby Boomers Have Money to Spend

US Consumers aged 50-59 year olds have

the highest average income

Many are empty nesters

Spending on themselves

Today’s Grandmother: Smart, Sexy, Active

Today’s Anti-Aging Consumers: A Diverse Group

Key Trends – Going Green

Growing Interest in Going “Green”

Growing Awareness of Health & Wellness Increases Demand for Natural and Organic Personal Care

Consumers are focusing on what they put in, on and around their bodies Growing health consciousness in developed countries has led to strong

growth in organic foods & beverages Personal care products which contain organic or natural ingredients are in

demand

Use of the term “natural” remains largely unregulated Attempts to define natural personal care are underway

Largely industry-led Whole Foods launches its own standard Natural Products Association standard

Organic certification in personal care is left to national associations In Europe, Soil Association, Ecocert, BDIH and AIAB are working to

harmonize standards The USDA is the main certifying body in the US, but standards were

designed with food in mind

But What is Natural?

A Global Trend with Different Cultural Nuances

Consumers in developed markets demand authenticity from natural/organic brands

Latin America and Eastern Europe also show strong demand yet are less concerned with the claim’s validity

In Asia-Pacific, natural products are seen as a down-market alternative to imported standard brands

Key Trends – Men’s Grooming

19

Men’s Grooming is Not a Fad

The meaning of “looking good” is changing Untapped opportunity Male-specific products only 8% of global personal care market Men = Loyal Customers

Men’s Grooming Snapshot

0

5000

10000

15000

20000

25000

30000

2008 2009 2010 2011 2012

Value US$ millions

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

CAGR

Men's grooming products Men's Skin + Hair + BathMen's grooming products growth Men's Skin + Hair + Bath growth

Men’s Grooming: Emerging Sectors

0

10000

20000

30000

40000

50000

60000

70000

2007

Value US$ millions

Bath and shower Men's bath and shower Hair care Men's hair care Skin care Men's skin care

22

Global Men’s Grooming: Growth Drivers

Rise of well-groomed man is key to success of men’s hair, skin and bath and shower care

Men not afraid to indulge in traditionally feminine personal care routine Younger generations offer significant opportunities Older men taking greater care in appearance Men’s hair care underdeveloped with prospects in shampoos and conditioners Skin care, most ‘feminine’ men’s grooming category, will see strongest growth

Key Trends in Men’s Grooming

Potential for continued growth Education key Men still secondary buyers High loyalty

Mass brands increasing penetration Increasing sophistication in mass products: anti-agers, self-tanning, moisturizers

Key Trends – Ethnic Hair Care

Ethnic Hair Care – Developing Markets

The demand for ethnic specific products has increased US is the largest market for ethnic products followed by South Africa Globally perms and relaxants sector grew by almost 11% in 2007

Annual disposable income Year on year growth 06 - 07 07-12 CAGRBrazil - R$ mn 10.6 9.2South Africa – R$ mn 14.3 11.4

BRAZIL Significant concentrations of people of African descent Ethnic brands have a limited share of sales Rising disposable incomes among consumers will contribute to increase the

sales over the next five years

SOUTH AFRICA South Africa is a major consumer of hair care products because of demand

from black middle class Increased distribution and advertising campaigns have ensured the growth Leading ethnic hair care brands are enjoying increased shelf space and are

present in most leading retail stores Treatment products such as leave-in scalp treatment serums are likely to

become more popular

Brazil & South Africa – Hair Care

US Ethnic Products Ethnic specific products are competing directly

against premium quality hair care Beauty trends towards more natural hair styles

among African-Americans have further depressed sales growth

Sector growth has been driven by products that contain natural ingredients or have treatment/repair properties

Consumers demand products that actually moisturize while improving manageability and style

In Conclusion

Conclusion

Anti-ageing Penetrate other personal care sectors, new demographics

Natural ingredients Demand is there, but need to be better defined Well-groomed male Here to stay Ethnic hair care Opportunity driven by rising disposable income

Thank YouRoman Shuster

Research Analyst

Euromonitor International

For a copy of today’s presentation, please contact me:312-922-1115, ext. 8267

roman.shuster@euromonitorintl.com