Ha_e ), DCF and valuation parameters Cosmetics companies maintain last year’s average EBITDA of B Operating aggregates Jimmy Choo 8.5% Prada 8.3% 18% for the FY16E–FY18E period Coach 7.2% Hugo Boss 6.7% Swatch 6.7% Cosmetics companies are expected to report expansion in operating margins in the coming years. L’Oréal and Estée Lauder are showing Tumi 6.5% The key drivers of margin growth are: omtperforming profitabilitq. YOOX Net-A-Porter 6.4% Hermès 6.3% • Increasing disposable income and improving lifestyle of individuals Burberry 6.3% • Demand for high-end products (presenting higher margins) Michael Kors 6.3% Richemont 5.8% Tiffany 5.6% Average 5.6% Salvatore Ferragamo 5.5% Average EBITDA margin, Note: the 2015 EBITDA margin is EBITDA Average ratio computed on the basis of either >Q).=Ç>Q)0= È cgseelics cgepanies Luxottica 5.5% FY14A FY15A/E FY16E FY17E FY18E actual (“A“) or estimated (“E“) margin (FY16E–FY18E) L'Oréal 21.9% Brunello Cucinelli 5.5% figmres for *()- sales, depending L'Oréal *)&) *)&) *)&- *)&0 **&* *)&1 Tod's 5.3% Estée Lauder 20.2% on their availability. As some Estée Lauder *(&) )0&/ )1&- *(&* *(&0 *(&* groups are listed under different Natura 19.4% LVMH 5.1% jurisdictions around the world, :eiejsdgj^ )-&- ).&+ )/&) )/&. )0&* )/&. Moncler 5.0% Coty 19.0% they may use different GAAP, and Shiseido ))&/ 0&0 1&, )(&* ))&* )(&+ Kering 4.9% therefore a direct comparison of Coty )+&1 ).&. )0&+ )1&) )1&- )1&( Average 18.0% EBITDA may be less meaningful Ralph Lauren 4.7% than if their results were presented Natura *(&/ )0&) )0&1 )1&+ *(&( )1&, L'Occitane 18.0% Kafilg 3.3% under International Accounting L'Occitane )1&( )/&) )/&, )0&( )0&. )0&( Beiersdorf 17.6% Chow Tai Fook 2.0% Average 17.4% 16.7% 17.5% 18.0% 18.6% 18.0% Standards. Shiseido 10.3% Hengdeli 0.8% Median 19.0% 17.1% 18.3% 19.1% 19.5% 19.0% Maximum 21.1% 21.1% 21.5% 21.8% 22.2% 21.9% Minimum 11.7% 8.8% 9.4% 10.2% 11.2% 10.3% Source: Data based on consensus of several brokers reports for each company. Estimated data have not been derived from internal insights. The luxury and cosmetics financial factbook 2016