WINDS OF CHANGE: REIMAGINING GROWTH IN THE GLOBAL BEAUTY INDUSTRY

NICHOLAS MICALLEFSENIOR INDUSTRY ANALYST - BEAUTY AND PERSONAL CARE04 APRIL 2017

THE GLOBAL PICTURE: DETECTING GROWTH POCKETS

LESS IS MORE: A LIFESTYLE REDEFINING CONSUMER VALUES AND PRIORITIES

SHIFTING CONSUMER PRIORITIES CREATE CROSS-INDUSTRY OPPORTUNITIES

FUTURE SCENARIOS

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2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-20163

4

5

6

7Global Beauty and Personal Care / Premium / Mass

Growth

% R

etai

l val

ue G

row

thPremium Beauty Consolidates As Industry’s Growth EngineTHE GLOBAL PICTURE: DETECTING GROWTH POCKETS

20bn US$ of extra value to come from premium beauty by

2021

54%Of total premium beauty revenues

by 2021 to be generated by US and China

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US$ 7-30BillionUS$ 60 Billion

Growth Shifts: US Solid, EM Mixed Results of Falter and Recovery THE GLOBAL PICTURE: DETECTING GROWTH POCKETS

US$ 141 Billion US$ 92 Billion

8.7%

6.8%

9.2%

5.2%

4.6%

1.8%4%

%value growth US$ fixed 2016

BRAZIL4.8%

INDONESIA10.6%

INDIA9.2%SAUDI

ARABIA1.3%

MEXICO6.7%

EGYPT16.6%

RUSSIA9.8%

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Latin A

merica

Asia Pac

ific

Middle Eas

t/Afri

ca

Easter

n Euro

pe

Australa

sia

North

Amer

ica

Wester

n Euro

pe0

2000

4000

6000

8000

10000

12000

14000

16000

0

1

2

3

4

Beauty and Personal Care Forecasts by Region 2016-2021

Premium BPC Mass BPC % CAGR Total BPC

Abs

olut

e V

alue

Gro

wth

(U

S$ m

illio

n)

% C

AG

R

North America Dominates Scope with Premium BeautyTHE GLOBAL PICTURE: DETECTING GROWTH POCKETS

US$90North America’s per capita expenditure on premium beauty

in 2021. Highest global spend and

increase over 2016

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Skin Care Hair Care Colour Cosmetics Fragrances0

20

40

60

80

100

120

140

0

1

2

3

4

Global Beauty and Personal Care: Historic vs Forecast Sales Growth in Key Categories

Value Sales 2016 Absolute Sales Growth 2016-2021Historic CAGR Forecast CAGR

Ret

ail V

alue

Sal

es (

US$

bill

ion)

% C

AG

R

Premium Segment Buoys Skin Care and Colour Cosmetics THE GLOBAL PICTURE: DETECTING GROWTH POCKETS

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Facial Moisturis-

ers

Anti-Agers Facial Make-Up Lip Make-Up Eye Make-Up Face Masks Facial Cleansers

0

1

2

3

4

5

6

0

2

4

6

8

10

12

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18Top Categories by Forecast Absolute Growth and % CAGR

2016-2021

Absolute Growth 2016-2021 (Constant Prices) 2015 Growth 2016 Growth

Abs

olut

e V

alue

Gro

wth

(U

S$ b

illio

n)

% Y

-oY

Gro

wth

Pursuit of Prevention and Wellness Echoed In Thriving CategoriesTHE GLOBAL PICTURE: DETECTING GROWTH POCKETS

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FoggVult

Urban DecayWardah

BeautrioE.L.F.

HonestInnisfree

The History of WhooIT Cosmetics

One LeafDollar Shave Club

Too FacedRodan + Fields

NYXSeeyoung

Harry's

0 40 80 120

Fast Growing Brands 2015-16

(<20%)

Beauty Industry Growth Drives Reflect A More Diverse Landscape THE GLOBAL PICTURE: DETECTING GROWTH POCKETS

Yunnan BaiyaoLa Roche-Posay

LakméKiko Milano

HimalayaYanbal

OGXTom's of Maine

MonangeFaberlicYunifang

Carolina HerreraPatanjali

Tom FordRituals

KanSBulldog

Smashbox

0 2 4 6 8 10 12 14 16 18 20

Fast Growing Brands 2015-16

(10-20%)

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Skin Care and Make-Up a Hotbed For Niche and Start-Up ActivityTHE GLOBAL PICTURE: DETECTING GROWTH POCKETS

Personalised skin care through diagnostics with

focus on skin renewal over anti-ageing positioning

Exuviance Cover Blend Skin Caring Foundation

SPF 20, make-up born out of a dermocosmetic brand

Deciem’s Niod Photography Fluid, a skin care and make-up hybrid

Dr. Russo’s sun protective facial cleanser

THANK YOU FOR YOUR ATTENTION

For more insights, contact:Nicholas MicallefSenior Industry Analyst - Beauty and Personal CareTwitter: @NichMicallef

To download the full presentation, click here.