Good morning. My name is Tihisha, and I will be your conference operator for today’s call. At this time, I would like to welcome everyone to Coty's Fourth Quarter and Full Year Fiscal 2014 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. (Operator Instructions) As a reminder, this conference call is being recorded today, Thursday, August 28. Thank you. I will now turn the call over to Kevin Monaco, Coty's Senior Vice President, Treasurer and Investor Relations. Mr. Monaco, please go ahead.

Good morning and thank you for joining us. On today's call are Michele Scannavini, Chief Executive Officer; and Patrice de Talhouët, Chief Financial Officer. Before we begin, I would like to remind you that many of our comments may contain forward-looking statements. Please refer to our press release and our reports filed with the SEC, where you will find factors that could cause actual results to differ materially from these forward-looking statements. Except where noted, the discussion of our financial results and our expectations do not reflect certain non-recurring and other charges. You can find the bridge from reported to adjusted results including foreign exchange translation impact in the reconciliation tables in the earnings release. The discussion of our net revenue growth is on a like-for-like basis, and therefore constitutes non-GAAP measures. You can find the reconciliation between GAAP and non-GAAP figures in our press release. I will now turn the call over to Michele.

Thank you, Kevin, and good morning, everybody. Today we will address our quarterly and year-end financial results, as well as our long-term growth roadmap that verify into where is Coty 2020. Let’s start discussing our full year and quarterly results. Fiscal 2014 was a challenging year for Coty. We reported a marginal decline both on top-line and bottom-line. Our net revenues decreased 1.6% and our adjusted net income decreased 2.2%. The revenue decline was mainly due to the pressure we had on our nail business, particularly in the U.S. which more than offset the growth we had in the Fragrance and Skin Care segments. Geographically, we recorded solid growth in EMEA, Asia Pacific and Latin America, more than offset by the decline in North America. Importantly, we delivered on our strategy to expand our presence in emerging markets as sales in these regions grew 10% during the year, reaching 29% of our overall net revenues on a like-for-like basis. Our fourth quarter net revenues slightly declined at minus 0.7%. During the fiscal year, the consolidated market remained rather soft. In Western Europe, the Fragrance market was flat in the year and in the last quarter. While the mass color market grew marginally in the year but turned negative in the last quarter. This overall class situation in Europe is mostly driven by continuous softness in South European countries. Due to continued economic headwinds in the region, we believe it is unlikely to see an improvement of the market dynamics anytime soon. In the U.S., accounting for close to 30% of our business, the total fragrance market was negative 1.5% for the year driven by decline in the mass channel, while prestige was overall flat. The U.S. color cosmetic market in mass was flat in the year a negative 2% last…

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Thank you. (Operator Instructions) Your first question will come from the line of Bill Schmitz from Deutsche Bank. Please proceed.

Can you guys help me? I'm trying to bridge the gap on the sales declines in the U.S. We obviously get the Nielsen data. And if you look at that data, it seems like, for the year, your skin sales declined 7%. But I think you said outside the U.S. mass, the business was actually flat, and so I'm having a real tough time trying to figure out, like, where the incremental declines are, noting that the international business grew. So I know it's kind of a broad, long question, but I'm kind of backing into like 12 points from destocking in terms of the growth in the U.S. mass business. Does that make directional sense to you? Deutsche Bank: Can you guys help me? I'm trying to bridge the gap on the sales declines in the U.S. We obviously get the Nielsen data. And if you look at that data, it seems like, for the year, your skin sales declined 7%. But I think you said outside the U.S. mass, the business was actually flat, and so I'm having a real tough time trying to figure out, like, where the incremental declines are, noting that the international business grew. So I know it's kind of a broad, long question, but I'm kind of backing into like 12 points from destocking in terms of the growth in the U.S. mass business. Does that make directional sense to you?

So let me try to see how I can answer to this question. First of all, it’s important for you to know that when we talk about market trends of market share or market performance in the U.S. as source we refer to IRI in terms of retail panel for mass and to NPD in terms of retail panel for prestige. And I specify that because as you know Nielsen is a consumer panel, the following mass and sometimes the number between IRI and Nielsen are not really matching. So I am making my comment on these sources, the sources that they mentioned. So what we see from IRI in terms of market trend for the two key categories where we compete that is fragrance and color, as I said for the total year, mass fragrances was negative and as well in the last quarter of the year and as well keep on being on negative in the first let me say six weeks of this fiscal year. As far as color is concerned, we have seen the total year being rather flat, turning down to negative performance in the last quarter and then had some improvement in the first six weeks of the year when we turn back to the marginal positivity. As far as nail is concerned instead we had decline through all the year, last year, minus 7% in average, minus 12% the last quarter. Now again, we have seen some better trend in the last six months but still the market be negative in the low single-digit. Now these are the things that are in my hand. As far as the stocking is concerned, as we discussed we have seen a pretty significant stocking phenomenon at the beginning of last year particularly in color cosmetic and…

Your next question will come from the line of John Faucher from JPMorgan. Please proceed.

I wanted to follow-up on Europe, where I was reading the commentary that you guys gave about Europe and maybe a little less positive than what we had talked about a couple of months ago. So I wanted to see if there's really any change in your thought process there. And then a second question would be if we take a look at your cost save targets, it's a fairly substantial number as a percentage of sales. Can you talk about how you plan to use that in terms of dropping to the bottom line, or are there specific brand investments that you see -- think that you need to make in terms of the use of these savings? Thanks. JPMorgan: I wanted to follow-up on Europe, where I was reading the commentary that you guys gave about Europe and maybe a little less positive than what we had talked about a couple of months ago. So I wanted to see if there's really any change in your thought process there. And then a second question would be if we take a look at your cost save targets, it's a fairly substantial number as a percentage of sales. Can you talk about how you plan to use that in terms of dropping to the bottom line, or are there specific brand investments that you see -- think that you need to make in terms of the use of these savings? Thanks.

Okay. So let’s talk of Europe first. Now if I look at purely the beauty market numbers, I should say that we don’t see significant changes there. The market is softer as we described mainly driven by declines in the South European countries, partially offset by marginal growth in Central and Northern Europe. It is true that when would we see, and I am sure you read this on the newspaper, the situation Europe is going through from an economic standpoint is difficult to be positive at least on the short run. Several key countries have zero or negative GDP growth, several key countries in a quite depletion situation this creating a lot of concern in many governments but still not visible structural reports, unemployment is raising so I don’t see concrete element to think that anytime soon we will see a significant change of trend for the trend in Europe of the total economy and also all the beauty market it was rather flat last year and as far as I can see from what I read and what I’m experiencing should be more or less in the same direction for the next year. Now talking of our global efficiency plan as Patrice explained, this global efficiency plan basically is going to pass in two directions. Number one to generate resources to invest behind our key brands; two, generate growth, clearly growth is our number one priority. We are not happy with that business or with the modest growth business we want to accelerate this in order to achieve this we need to dedicate more resources behind our key brand as our launches. So the number one objective of this effort to find efficiencies across all organization need to provide the fuel to invest behind our brands and strategic initiatives to strengthen our growth. Second, we are also generating opportunities to improve our profit given that our top-line growth is not at the moment in line with what we would like our growth here is very important to put a lot of focus on efficiency to ensure that we deliver on our strategic objective of expanding our margin even in a situation of low top-line growth and this plan will then pass in finding efficiencies and saving to allow us to reach our objectives.

Your next question will come from the line of Lauren Lieberman from Barclays. Please proceed.

Thanks, good morning. I was hoping you could give us a little bit of color on advertising and marketing plans and initiatives in emerging markets. I think you talk quite regularly about the distribution partnerships, but I feel like we know a little bit less about how you're going to the market from a consumer standpoint? Thanks. Barclays: Thanks, good morning. I was hoping you could give us a little bit of color on advertising and marketing plans and initiatives in emerging markets. I think you talk quite regularly about the distribution partnerships, but I feel like we know a little bit less about how you're going to the market from a consumer standpoint? Thanks.

Thanks, good morning. I was hoping you could give us a little bit of color on advertising and marketing plans and initiatives in emerging markets. I think you talk quite regularly about the distribution partnerships, but I feel like we know a little bit less about how you're going to the market from a consumer standpoint? Thanks.

Okay. So first of all welcome back and congratulation.

Thank you so much. Barclays: Thank you so much.

Thank you so much.

So in terms of consumer investing in emerging market, let me say that the focus for us over the last I should say 12 to 18 months was to build the structure. So the key investment for us as being to be the growth market structure and distribution through partnership or through acquisition for instance in Southeast Asia. And the first step for us is that reaching the consumer and distributing our products. So we did not put a particular focus and pressure on A&P because the first objective was to reach a certain level of distribution. Now going forward we plan to have level of A&P that these comparable to our level or A&P so we are not planning to over invest in the emerging markets also it is important to know that in most of the emerging market digital is a very strong and effective way to reach consumer and in some of the market the digital contract and use and reach is much, much higher for instance we have in Europe and digital is a very effective way of reaching consumer compared to traditional media. So basically summing up two steps, first to build the structure, to build distribution and then to start investing in those market at least in line with what we see in the remaining parts of the world.

Your next question will come from the line of Wendy Nicholson from Citi. Please proceed.

Hi, good morning. I have two questions. First of all, I don’t think you offered guidance for the tax rate for next year, and I know there was a lot of variability this year, so if you could give us some sense of what to expect next year for that. But then my second question has to do with the destocking that we’ve seen and just the fact that it’s gone on so long and particularly with Wal-Mart when we’ve seen it in other categories, it kind of happens for a quarter or two and then it’s done. So my question is, have some of your retailers kind of permanently changed the way they view specifically the nail category? Have they taken like linear shelf facings away from the category and is that contributed to destocking? Or has there been no reset and this is just month after month, quarter after quarter of consumer weakness? Thanks. Citigroup: Hi, good morning. I have two questions. First of all, I don’t think you offered guidance for the tax rate for next year, and I know there was a lot of variability this year, so if you could give us some sense of what to expect next year for that. But then my second question has to do with the destocking that we’ve seen and just the fact that it’s gone on so long and particularly with Wal-Mart when we’ve seen it in other categories, it kind of happens for a quarter or two and then it’s done. So my question is, have some of your retailers kind of permanently changed the way they view specifically the nail category? Have they taken like linear shelf facings away from the category and is that contributed to destocking? Or has there been no reset and this is just month after month, quarter after quarter of consumer weakness? Thanks.

So, on the first part of your question on guidance on tax rates so we don’t really give guidance on tax rate, however, what I can indicate to you is actually this year was very positive impacted by a one-off in the third quarter. So you should not take the adjusted effective tax rate of 19% as that we have in the fiscal ’14, as the guidance for ’15 so you should take more guidance which is in line with what we had in 2013 marginally improved. Patrice de Talhouët: As far as destocking so how does the word destocking so how basically we are destocking basically clearly and let’s take nail as an example it is a good example. This has been destocking was last year when we had this abrupt change of trend in the market. And this was the first big of effecting on inventory in line with consumption trend. Then consumption progressively kept on decelerating and quarter after quarter the decline became bigger so the retailer progressively had to adjust and we adjusted that inventory to the consumption trend. It’s also true as I said in my script that because of the negative trend in particularly in the second half of the year some promotion was locked in our case the year before to the nail category where I will take the other two categories with the last year trend. So there was not really an effecting of the nail set of the wall but was more the promotion was locked that was indicated to the category the work sheet to other categories. Now so these are the situations generally speaking also I believe that the quarter four was somehow worst that the retail effecting and I believe that several retailer to be ready in good shape for back to school and for the holiday season has to manage their inventory down in order to have a clean situation with the start of the year. Now my or let me say hope looking to the first weeks of the fiscal year talking of nail is that the stronger success of Sally Hansen, innovation in Sally Hansen, is important not just because of it’s a category leader it makes around in the last reading 37%, 38% of the total market. The success will bring back retailer attention interest to the category. We have seen that the market from double digit decline in the last period was -- it was a low single digit decline so it’s not a growth but it’s a better situation. And if then continues like that I am pretty confident that the retailer will get back to bring focus on the category and focus means also more promotional opportunity to develop the business.

(Operator Instructions) Your next question will come from Chris Ferrara from Wells Fargo. Please proceed.

Guys, I was hoping that you could help to reconcile the fiscal 2015 top-line guidance. You've said modest growth for the first half of the year I guess which is precisely when the comparisons are very, very easy. And that implies acceleration in the back half of 2015, when the comps get progressively more difficult. So you are really assuming a pretty big underlying acceleration if it works out to only modest growth in the first half. So I was hoping, especially considering you are saying nail has already picked up a little in the first six weeks tentatively, can you talk about why you would see such a big underlying acceleration through the year, and why even, on really easy comps, growth would be so modest in that first half of the year? Wells Fargo Securities: Guys, I was hoping that you could help to reconcile the fiscal 2015 top-line guidance. You've said modest growth for the first half of the year I guess which is precisely when the comparisons are very, very easy. And that implies acceleration in the back half of 2015, when the comps get progressively more difficult. So you are really assuming a pretty big underlying acceleration if it works out to only modest growth in the first half. So I was hoping, especially considering you are saying nail has already picked up a little in the first six weeks tentatively, can you talk about why you would see such a big underlying acceleration through the year, and why even, on really easy comps, growth would be so modest in that first half of the year?

Okay, so thanks for the question that tell me to expand a bit more on our crucial outlook for the first half of the year. So, number one as I was explaining before, the category where we have the core of our business that are fragrances mass and prestige and color cosmetic and nail in mass still see a rather soft market situation. So, both in the consolidated countries mostly we are not anticipating a significant change of the trend discounts on the back of quarter four there was rather slow rather soft. So as I said before this is triggering very, very crucial attitude of retailer and I should particularly mass in manage inventory at placing replenishment toward. So this is clearly the first reason why we are looking at the next few months with a very cautious attitude. Now two, we had over the last few months and particular in the U.S. a retail performance that was not good enough so we need to restore confidence on certain of our brands. Now I am encouraged to see that in July not only on color and the nail but also in fragrance we see some very positive sign and some improvement in market share. So this will help and then we will continue to deliver this result to contributor accelerated growth trend in the second part of the year, number three, there is also situation on the emerging markets. Now in emerging markets we are growing very nicely and keep on planning to growth. But it’s still that there are some situations, there is some concern for two reasons, one for social and political turmoil, I am referring mostly the Middle East, Russia and some Eastern Country that is impacting in domestic consumption and particularly into our retail business. And number two for country like China where we are seeing a clear deceleration of consumption trend across different categories and we see that some distributor and wholesalers are rather heavy with their inventory. So all-in-all, I should say that when you see U.S., Europe and the emerging market, the short-term future doesn’t induce a lot of optimism. That’s why we are keeping our outlook for the first part of the year very cautious.

The next question will come from the line of Connie Maneaty from BMO Capital Markets. Please proceed.

On the global efficiency plan, could you give us what the savings and costs are for 2015, what the cash charges are, and if there is a change in the number of people at Coty, if that is planned as well? And then I have a housekeeping question. What was the year-end share count? Thanks BMO Capital Markets : On the global efficiency plan, could you give us what the savings and costs are for 2015, what the cash charges are, and if there is a change in the number of people at Coty, if that is planned as well? And then I have a housekeeping question. What was the year-end share count? Thanks

Okay. So thank you for your questions. On the first part of the question, so we don’t really give any guidance and detail on this program by year. However, I can give you a couple of indications. So first as you know, this program is comprised of three parts. First one is China and as you know, we said that the annual savings that we would expect from the China reorganization would be north of $20 million. Clearly the bulk of this will sit in fiscal ’15. Second we have the productivity program and also what we have indicated on the productivity program is that the savings that we would expect exiting fiscal ’15 would be a $45 million. So I think you can take this into account. But as far as the $120 million of the third leg of the comprehensive global efficiency plan, what I can indicate to you is that clearly we are kicking up this program early summer. As a result of that the first half impact will be a minimal if any and we will get some impact in the second half of the year but clearly the program is going to gain much more momentum in fiscal ’16 and fiscal ’17. Now as far as the share count is concerned, and at the end of the fiscal ’14, so June 30, we had 354 million shares. Thank you.

Your next question will come from the line of Mark Astrachan from Stifel. Please proceed.

Ad spend, so that amount has increased in recent quarters yet and revenue growth remains a little weaker than expected, and I know you talked a bit about expectations first half of the year, second half of the year. And maybe talk about it a little bit from a specific spend standpoint in that the response to revenue growth from the increased ad spend and sort of directionally thoughts about what you think the right levels need to be to drive that growth going forward? Stifel Nicolaus: Ad spend, so that amount has increased in recent quarters yet and revenue growth remains a little weaker than expected, and I know you talked a bit about expectations first half of the year, second half of the year. And maybe talk about it a little bit from a specific spend standpoint in that the response to revenue growth from the increased ad spend and sort of directionally thoughts about what you think the right levels need to be to drive that growth going forward? Patrice de Talhouët: Okay. So Michele said, starting second part of fiscal particularly last quarter, we have increased our A&P spend and actually you see already I believe the impact, the benefit of this looking at the initial sell through result over July and the beginning of August but we see most important and in fact there are some good reaction to our investment. Now clearly what is the cycle? The cycle is that you may behind our brand hopefully, you start improving your retail performance and your sell through. This is going to create more replenishment order and then you will see this impacting the sell-in. So there is always a lag, a time lag, of how the investment behind your brand is affected on your sell-in…

Ladies and gentlemen that does conclude today’s conference. Thank you for participation. You may now disconnect. Have a great day.