Kevin Monaco - Head, IR, SVP and Treasurer Michele Scannavini - CEO Patrice de Talhouët - CFO.

Bill Schmitz - Deutsche Bank John Faucher - JPMorgan Lauren Lieberman - Barclays Capital Wendy Nicholson - Citigroup Chris Ferrara - Wells Fargo Securities Connie Maneaty - BMO Capital Markets Mark Astrachan - Stifel Nicolaus.

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 quarter.

Nail dragged the color market down as it recorded a decline of 7% for the year and a 13% decline in the last quarter. Encouragingly, we have seen in the last few weeks a progressive improvement with the nail market still negative but in the mid to low-single digit.

We believe that this change in the market dynamic is also a result of an outstanding consumer response to the Sally Hansen Miracle Gel launch which I am reviewing in more detail later. Let me now give you some information on our performance by product segments. In Fragrances, our net revenues grew 1% in the fiscal year and in the last quarter.

Growth reflected good performance by our power brands Calvin Klein, Marc Jacobs, Chloe and Davidoff and by the more recent Bottega Veneta, Roberto Cavalli and Katy Perry brands. Calvin Klein enjoyed strong momentum in emerging markets, such as the Middle East, China, Australia and Eastern Europe.

Also, the recent launch of Endless Euphoria brought the brand to gain market share in the U.S. in the prestige market in the last quarter. Marc Jacobs enjoyed another strong year particularly in travel retail, China, the U.S. and the UK.

Chloe keeps growing despite an unfavorable launch phasing versus the prior year thanks to the strength of the signature product line.

Growth in the Fragrance segment has been partially offset by the softness of consumption in the mass channel and no renewal of some low volume licenses, in our strategic effort of concentrating on fewer and bigger brands. Color cosmetic net revenues declined 7% for the year and 4% for the quarter. The decline was due to the nail business.

Net of nail our color cosmetic business would have grown low single-digit in the year.

As we’ve discussed in detail over the last several earning calls, the sharp slowdown of the nail market triggered retail’s reaction but is aligning in a drastic inventory reduction in the first part of the year and the reduction of the promotions loss granted to the category in the second part of the year.

In the midst of this turbulent environment, we faced a strong competitive attack from many players, particularly low priced brands which turned into market share revolution for the categories of Sally Hansen.

However, we are particularly excited to see the first sign of turnaround in our nail business in the beginning of this fiscal year, driven by the launch of the new Sally Hansen Miracle Gel. First sales results are outstanding. According IRI retail panel in the four weeks ending August 11 Sally Hansen hit its highest market share in the last two years.

As I said before the all nail category seems to benefit from the positive impact of this launch and I believe this is a confirmation that our strategy of shifting focus from the fashionable special effects to performance driven innovations is paying dividends for us and for the market.

Retailers are strongly supported this launch and we’re confident that the success of this initiative will bring back retailers full confidence and interest in the category. Rimmel continues its strong momentum, recording solid growth in the year and in the quarter, gaining market shares in key European countries and in the U.S.

In the U.S., Rimmel was the fastest growing color brand among the top-10 in mass in fiscal year ’14.

The fast innovation phase and the edginess of the market mix supported by an outstanding spokesperson list, including Kate Moss, Georgia May Jagger and Rita Ora and by creating digital program keep resonating in a meaningful way with the young generation.

Turning to Skin & Body Care, net revenues grew 1% like-for-like during the fiscal year with growth across each of our key brands Philosophy, Adidas, and Lancaster partially offset by the sharp decline in TJoy. Philosophy registered a fifth consecutive quarter of growth generated both from increases in the U.S.

market and continues international expansion. Adidas continues to enjoy strong momentum in key emerging markets including Brazil, China and the Middle East partially offset by European market softness. Lancaster keeps performing well in the same category and it is finding strong acceptance by the Chinese consumer.

As far as TJoy, we discussed on the last call the poor performance of the brand is our intention to drive changes to the setup of our China business in the mass channel to significantly improve our cost structure and bringing more focus on brands with higher growth potential.

Since then we’ve announced in June our new partnership with Li & Fung a leading Chinese company to distribute some of Coty’s international brands including Adidas, Playboy and Rimmel and concomitantly the discontinuation of the TJoy brand. This move will allow us to improve our profitability in the country and in the overall Skin & Body Care segment.

Let’s turn now to our business by region. In EMEA net revenues grew 3% for the year and 4% for the quarter which is a remarkable performance considering the softness of several European markets. Growth was mostly driven by the UK, Travel Retail, Eastern Europe, Middle East and South Africa.

In Americas, net revenue declined 9% during the year and 7% during the quarter. As previously discussed, the decline was mostly driven by North America and particularly in the nail category and fragrance statement.

This was partially offset by double-digit growth in Latin America with particularly strong results in Brazil where we leverage our new go-to-market partnerships. Speaking of Brazil, our partnership with Avon remains on track with the first Coty brand slated to be included in Avon’s holiday catalog.

In Asia Pacific, net revenues grew 7% in the year and 3% in the quarter. Growth was driven mostly by Southeast Asia where we leverage on our new platform following the acquisition of the StarAsia Distribution Company and Australia where we’re enjoying strong leadership positions in both fragrances and color.

In China our growth was low single-digit hampered by TJoy declines. Our strategic goal to expand our business in the emerging markets to over a third of our total net revenues is well underway. In the last two fiscal years we have built new structures and partnerships in Brazil, the Middle East, South Africa, Southeast Asia, China and Korea.

We also drove our product development to better address the specific needs of consumers with completely different beauty cultures and tastes generating lines of products such as Arabian fragrances for the Middle East, skin care with specific texture and light filters for Asia and light concentration fragrances of Latin America.

As a result of this comprehensive effort, emerging markets have reached 29% of our total net revenues in fiscal ’14 up from 26% in fiscal ’13 on a like-for-like basis. Revenues in the emerging markets grew 10% like-for-like in fiscal ’14 and 12% in the fourth quarter. Let’s now spend a few moments on our long-term and short-term future.

I first want to come back to our strategic roadmap for long-term growth. Our vision is to strengthen Coty’s position as a global leader in beauty with brand building and creativity at its core. To achieve our vision we have developed a comprehensive plan that we call internally Coty 2020.

This plan incorporates many of the elements we shared with you over the last year. Our long-term financial targets remain intact, including growing our net revenues in line with or faster than the markets and segments where we compete, expanding profitability and margins, and generating strong cash flow.

The achievement of our strategic vision and financial targets rest of the following five drivers; one, developing our power brands with strong focus on superior innovation and increased investment in brand support including creative digital marketing and superior in store execution; number two, strengthening our leadership position in the fragrance and core cosmetic categories.

Our ambition is to be undisputed number one global player in fragrance and to be among the top-three global players in color. We will also continue expanding our presence in Skin & Body Care with particular focus on emerging markets opportunities.

We plan to progress toward our ambition through organic growth of our current portfolio and through a well targeted acquisition strategy; three, progressing our emerging market expansion strategy, which has been very successful in the last two fiscal years with objective to grow the weight of those markets on total Coty net revenues from the current 29% to more than one third; four, leveraging our multichannel distribution capabilities to seize growth opportunities across broad consumer universe and with offerings spanning across different price points; five, gaining efficiency and simplification in our operating model.

Thanks to a global efficiency plan that is designed to drive the different cost components of our business. This plan aims at delivering annual savings in excess of $200 million within the next three fiscal years. We plan to use these additional resources to fuel investment behind our key brands and deliver earning growth at a faster pace than sales.

The key element of this plan will be addressed in a few moments by Patrice. I believe that both our targeted revenue and earnings growth will be enabled by our new organizational design and operating model which was announced on the 9th of July and that we’re kicking off in fiscal ’15.

The principle is to evolve our organization from two standalone divisions Coty Prestige and Coty Beauty to a simpler and more integrated organization built around categories and regions. This new organization will help bring a more holistic view of growth opportunities across our other category.

It is also expected to increase focus on the specific consumer and retailer needs of each region which is particularly important given our goal of accelerated development in the emerging markets.

Finally, it is designed to eliminate duplication and redundancies particularly in back office and commercial market and services, and to simplify our internal processes ultimately bringing operational efficiencies. Now let’s turn to the short-term outlook.

We are entering into the new fiscal year with a strong line-up of new product initiatives in strengthening our retail performance. In the fragrance segment, we have three major launches in the first half of the year on our power brands. First in the row, we have the launch of Marc Jacobs’ Daisy Dream which hit the shelves in the beginning of July.

Initial sell through results are very strong bringing the total Daisy franchise to a top-ranking in the U.S., UK and Australia female markets and is off to an outstanding start in travel retail as well.

In the next two months, we plan to launch the new Calvin Klein Reveal globally and Chloe Love Story with initial launch in Europe and rollout to the U.S. in the spring.

We will also have high quality initiatives on Bottega Veneta and Balenciaga in top-tier of selected distribution and the launch of Enrique Iglesias and Playboy Generation in mass channel. In color cosmetic, I already mentioned the outstanding start of Sally Hansen Miracle Gel in the U.S. market.

On Rimmel, we are launching as we speak, a new mascara called Wonderful aiming at further strengthening the brand’s premier position in this product category and fueling Rimmel momentum.

In Skin & Body Care, we are launching in Q1 a new Adidas line dedicated to the UEFA Champions League, the most prestigious football competition in the world with global awareness and media coverage. On Philosophy, we are planning to launch a new line named No Reason to Hide, the all-in-one solution to skin imperfection.

While we are not expecting a significant improvement in the market dynamics in the next few months and probably an even tougher situation in Europe given current economic headwinds, our objective in the fiscal year ’15 is to return to revenue growth supported by our aggressive innovation plan, increased marketing spending and continuous expansion in the emerging markets.

We are expecting modest growth in the first half of the year as we continue to see softness in our core fragrances and color cosmetic segments particularly in the mass channel and retailers are managing inventory very tightly given the uncertainty of the future outlook.

In this challenging environment, we remain focused on strengthening the retail performance of our key brands to enable a faster pace of growth in the second half. In Fiscal 2015, we are also targeting to expand our operating margin, reflecting our cost reduction effort across the organization.

This is expected to materialize in the second half when the global efficiency plan should start having a more relevant impact. I will now handover the call to Patrice, who will bring you through the financials and the global efficiency plan in more detail. Patrice..

first, our new organization design. As part of the new organizational structure we announced in early July we are currently in the process of transitioning from a divisional structure base on distribution channels to a more integrated structure base around categories and regions as Michele said.

We believe this new design will allow for better resource allocation amongst categories and markets more closely aligned marketing and R&D and better leverage our scale across distribution channels. But we believe it will also eliminate many duplications in our previous operating model.

For example, we will now have one country general manager in each key region and one, finance and back office support staff rather than two. Our regional dealers will have full ownership over the financial P&L of each global market while our category innovation leaders will be accountable for the strategic P&L.

The second part of our operation improvement is realizing efficiencies in the P&L increasing the direct procurement of material and packaging and the indirect procurement of marketing and promotional material and services.

By integrating the two previous divisions we will be much better positioned to leverage our scale across the three segments and for the company as a whole.

Third, optimizing the manufacturing and supply chain footprint, as a first step in line with our China organization and especially the TJoy brand discontinuation we have closed two of our out of the three manufacturing plants we had acquired through the TJoy acquisition.

The remaining plans will continue to manufacture Adidas for China and other Asian countries. And we will also maintain R&D capabilities. On top of this we are evaluating other opportunities to optimize our overall supply chain structure.

Fourth, improving factory productivity, as part of the previously announced productivity program we are already well into our efforts to improve productivity and manufacturing efficiency in each of our plans.

Fifth, savings through active portfolio management, with non-power brands accounting for approximately 30% of our net revenues, we see opportunities to deemphasize some of the non-performing brands.

Additionally, we believe there is room to rationalize number of skews across our broader portfolio which will allow for better inventory management and better cost rationalization.

In total, we believe the steps we are taking as part of our global efficiency plan will not only position Coty to accelerate supply and growth and expanding geographical reach, but will also contribute to a more profitable and cash generating business model. With that I will turn the call back to the operator for questions. Thank you..

Question:.

and:.

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?.

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 I should say particularly in male, when we are seeing the market turning from 20% growth to being flat and then start declining.

And the retailers that were planning the business on a growth of 20% had a very fast and I should say rather drastic decrease over inventory. Since then the consumption in male kept on declining so the retailer kept on managing their inventory down to align their inventory to the trend of the category.

What we see today in the beginning of this fiscal year actually we still see some of the stocking not of the same size of the entity what we have seen one year ago. But we are seeing that there is at least one big retailer in mass that has been rather aggressive in managing in inventory down in the first part of the year.

As we have seen also some destocking in prestige, now this is due to two things, number one, as I said before, the market performance has been rather fast particularly in quarter four. So some retailer getting into back-to-school and early the season had to reflect the inventory based on the consumption trend.

Number two, our retail performance in the U.S. in the last few months has not been good enough. So this is a slowdown replenishment order and that these have impacted also the phenomena of reducing inventory on our brand.

So all-in-all I should say that still today we see some inventory reduction, not at the level that we saw one year ago but there is still some needed to be adjust the inventory to the recent trend..

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. .

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..

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..

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..

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..

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?.

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.

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?.

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?.

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 to the trade. On top of that there is the compensating factor as I explained before some destocking we see in the trade that is let me say reducing the replenishment more in this moment.

But as I said before what we see in terms of market shares both in the U.S. and in Europe in the first part of the fiscal is encouraging and tell us that the increase investment behind our brand and started yielding fruit.

Now in terms of what is the right level, so we always have that, we’re thinking to move away to push our business is to invest between 23%, 24% of our sales actually in the last period we were close at the 23 which we were on lowest side of our rate and progressive we want to go to the high side of our range or even slightly above.

Now the important thing is to think in terms of weight or in terms of spending because while it will increase spending we’re also looking to how we can be more efficient in our spending both through improving our procurement capabilities so getting efficiency in our media buying that also related to the mix of the spending.

As I said before for instance digital that becomes more progressively each quarter and more important part all the spending behind the brand is more efficient way to reach the target with the special. So it means that you can get more targeted stronger weight within a more efficient spending.

So we are working in the future in the two directions to increase significantly the weight, media weight, under our key brands and at the same time try to gain efficiencies both in our media mix and in our spending.

So all-in-all we spend to grow some of the percentage but is really important the markets are going to be even higher it was where we see as a percentage on the season the P&L..

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