《科爾尼：2023全球美容與個護行業研究報告-并購機遇窗口來臨（英文版）（13頁）.pdf》由會員分享，可在線閱讀，更多相關《科爾尼：2023全球美容與個護行業研究報告-并購機遇窗口來臨（英文版）（13頁）.pdf（13頁珍藏版）》請在三個皮匠報告上搜索。

1、Beauty and personal care:resetting the stage for M&APhoto by Stefanie Noll Kearney,DsseldorfThe beauty and personal care(BPC)sector has been an attractive target for mergers and acquisitions(M&A)throughout the past few decades.Benefiting from favorable macro trends such as the increasing focus on he

2、alth and well-being and rising levels of consumer engagement,it has delivered high growth rates and very healthy gross margins for many years.This in turn has led to sustained investor attention and higher transaction volumes than other consumer sectors.But the sector is also facing structural shift

3、s,including fundamental changes in marketing and what defines a brand,new consumer preferences,emerging digital business models,shifting geographic dynamics,and operational hurdles.Against this backdrop,M&As are an important instrument and catalyst enabling companies to rapidly adapt and strengthen

4、their portfolios.However,the M&A track record in the BPC industry is far from positive,with many deals delivering limited or no value creation for shareholders.This track record,in combination with high interest rates and volatile corporate valuations,creates an environment in which a clear M&A stra

5、tegy is paramount.The ability to quickly identify and integrate attractive businesses or smoothly spin off businesses that are no longer worth pursuing will be a decisive factor to outperform competition.We predict the industrys M&A activities will accelerate over the next couple of years with inves

6、tors focusing on smaller investments and selective mega deals.We also predict some changes to the underlying deal rationale and that investors will be a lot more conscious about how they integrate acquired companies.Looking back:historical M&A activity Transaction volumeThe past five years in the BP

7、C industry have been dynamic.An industry accustomed to going to market on its own terms and setting trends rather than chasing them faced rapid changes in consumer preferences(for example,authenticity and local relevance as well as the shift toward clean beauty and natural ingredients),an increase i

8、n regulation,and pandemic-inspired sales shifts between categories as well as e-commerce acceleration.Throughout the past five years M&A activity has remained high,peaking in 2019 when the industry saw both a large number of deals and above-average transaction valuations.While COVID left its mark on

9、 the average M&A transaction size,which declined from a pre-pandemic peak of$435 million to$400 million,deal volume increased by+1.3 percent CAGR to 203 transactions.Following in the wake of this sustained appetite for deals,2023 appears to be no notable exception.For the first half of this year the

10、 average deal size was$326 million and transaction volume was only slightly lower than at this time in past years.As a consolidating industry looks for external growth opportunities and internal synergies,we expect to see both more frequent smaller transactions and an increase in large deals(see fig

11、ure 1 on page 2).M&As are an important instrument and catalyst enabling companies to rapidly adapt and strengthen their portfolios.1Beauty and personal care:resetting the stage for M&A1 Based on deals with reported deal valueNote:Percentages may not resolve due to rounding.Sources:Dealogic;Kearney a

12、nalysisFigure 1Increased overall volume of transactions with small transactions dominating the market compositionBPC M&A activities have remained high throughout the pandemic;the average transaction value recovered in 20222019 saw a drastic increase in mid-size transactions,with large transactions s

13、teadily increasing over the past yearsAverage transaction value in millions1Number of transactionsMedian transaction value in millions12018BPC M&A activities,20182023BPC M&A market composition,201820231(in#of transactions)20192020$2072021$248202220182019202020212022HY12023$400HY12023$326$108$435$16$

14、36$19CAGR 3%CAGR+1%$44$25$1514619518723820359Number of transactionsCAGR+1%146195187238203594%Small transactions($1 billion)86%64%72%20%31%63%8%6%6%19%75%86%26%10%10%10%5%In general,BPC sector transactions can be clustered into three areas:acquisitions to enhance the portfolio,integrate the value cha

15、in,or access capabilities (see sidebar:“Exemplary deals that are shaping the industry”on pages 4 and 5 for examples of different types of transactions in BPC).The vast majority(about 70 percent)of transactions in the past five years were designed to enhance the portfolio of the acquirer with growth

16、brands.While acquisition for scale remains the single most important transaction rationale,many acquirors are increasingly focusing on the acquisition of smaller high-growth brands and players that help diversify their portfolio(see figure 2 on page 3).Acquisitions by strategic investors have been p

17、redominately driven by portfolio enhancement.By contrast,CVC activity is often motivated by capability acquisition and investments in strategic suppliers.One example of this is BOLDs June 2023 investment in Debut,a biotech start-up company.The investment allowed LOral to use Debuts extensive IP port

18、folio to bring brighter active ingredients to market.The deal makersThe mix between financial PE(private equity)and strategic investors has remained largely stable and balanced at almost 50:50.Fifty-two percent of 2022 transactions were initiated by strategic investors,+3 points vs.2019 and thus ove

19、rtaking transactions driven by financial investors(48 percent).Some of the most active strategic investors and acquirers included Unilever,Procter&Gamble,LOral,Givaudan,and Beiersdorf.On the PE side the most active players included KKR,L Catterton,Advent,Carlyle,and Sandbridge.In addition to the mor

20、e traditional PE and strategic investor driving acquisitions,corporate venture capital(CVC)is becoming an increasingly popular topic in the sector.While the overall CVC transaction volume is still comparatively small,and its track record shows mixed results at best,leading CVCs such as Unilever Vent

21、ures or LOral BOLD have gained solid traction and have already mastered a steep learning curve,enabling them to build more sophisticated strategies and develop execution muscle.2Beauty and personal care:resetting the stage for M&AFigure 2CVC activity is more often motivated by capability acquisition

22、 and investments in strategic suppliersBPC CVC activity rationales(in#of transactions)Scale portfolioCapabilityValue chainHY1 202345%27%27%202267%22%11%202155%30%15%202050%38%13%201918%39%43%201850%41%9%Number of transactionsCAGR+1%2228820911Most transactions aim to enhance the portfolio of the acqu

23、irer with growth-focused brandsScale portfolioGrowth accelerationDiversificationExpansionCapabilityValue chain201834%18%11%2019202020212022HY1 20233%14%22%28%17%21%5%15%15%32%19%18%5%10%15%37%21%14%6%10%12%41%22%8%8%9%13%19%35%23%8%15%BPC M&A activity rationales(in#of transactionsstrategic transacti

24、ons only)Note:Percentages may not resolve due to rounding.Sources:Pitchbook;Kearney analysis3Beauty and personal care:resetting the stage for M&AExemplary deals that are shaping the industryScaling the portfolio Deals targeting portfolio scaling have mainly been,by their nature,mega deals.Yet it rem

25、ains to be seen if mega deals in BPC can be successful.Lets look at the most prominent mega deal in recent yearsthe 2015 acquisition of P&Gs beauty brands by Coty,which at the time doubled Cotys size.While it clearly built scale,due to a variety of challenges it ultimately led to the divesture of We

26、lla to KKR,the CEOs exit,an operational restructuring,and a$3 billion write-down on the brands.In 2022,Koninklijke DSM and Firmenich International announced the merger that created DSM-Firmenich,a company with more than$12 billion in revenue.The company combines the strengths and portfolio of DSM in

27、 biotech and nutrition with those of Firmenich in molecular science as well as fragrances and aromas.A similar mindset led to the 2021$1 billion acquisition of Deciem by Este Lauder(ELC).Deciems portfolio includes six brands,of which The Ordinary is the largest,enabling ELC to double down on masstig

28、e science-based ingredient-focused skin care while further tapping into the valuable Gen Z demographic.Growth acceleration In addition to select mega deals the BPC industry has seen strategic smaller transactions.For example,in 2022 Wellaspun off from Coty and now owned by KKRacquired Briogeo,a fast

29、-growing hair care brand offering sustainable,eco-ethical,and natural hair care products.Briogeo also enabled Wella to access prestige retailers such as Sephora and Revolve.Motivated by growth acceleration,Unilever was one of the most active investors between 2018 and 2023.The key deal in recent yea

30、rs was the acquisition of Paulas Choice,a skin care brand known for its science-backed products and digital popularity with Gen Z and Millennials.PUIG completed a series of acquisitions to supercharge its growth while diversifying its portfolio with rising Gen Z blockbusters and high-margin categori

31、es.The group entered the niche fragrance and retail space thanks to the acquisition of Byredo for$1 billion in 2022.It also stepped into wellness and India with Karma Ayurveda the same year.These deals helped enable+30 percent growth in 2022.Este Lauders 2022 blockbuster acquisition of Tom Ford for$

32、2.8 billion can be seen as a way for the conglomerate to,first and foremost,protect one of its key licenses in fragrance and make-up.But it also ensured the brands decision-making will keep on benefiting from one of the most prominent success stories in designer beauty.Category diversificationPUIGs

33、growth acceleration acquisitions followed its diversification in the make-up category with its first majority investment into Charlotte Tilbury in 2020.PUIGs portfolio was initially predominantly fragrance focused.The acquisition enabled PUIG to benefit from Charlotte Tilburys strong brand equity an

34、d high following,while strategically mitigating its dependence on the fragrance category and a licensing model.In terms of diversification,Kerings recent acquisition of the Paris-based perfume house Creed for$2 billion represents the first major acquisition in the beauty space.It positions Kering in

35、 the fast-growing luxury fragrance category and gives Kering in-house know-how.Geographic expansionGeographic expansion or strengthening their footprint in regions in which they traditionally lack a strong footprint is another growth avenue for leading BPCs.Germanys Henkel and Beiersdorf recently ma

36、de such acquisitions.In 2022 Henkel acquired Shiseidos Professional Hair Care business in Asia Pacific.Beiersdorf acquired Coppertone in 2019 to strengthen its North America sun care footprint.Its 2022 acquisition of Chantecaille strengthened its presence in both North America and China.This is also

37、 true if we look toward Asian players.AmorePacific,a South Korea-based cosmetic products manufacturer,made a move to expand in the United States with the acquisition of Tata Harper in 2022,a US luxury clean anti-aging skin care brand.The year before the acquisition AmorePacific saw its revenue from

38、China drop by 20 percent.Value chain integrationEarlier this year,LOral made its largest acquisition to date,purchasing Aesop,the Australian luxury skin and body care company,from Natura&Co for$2.5 billion.The deal allows LOral to tap into the loyal customer base of Aesop consumers and help unlock t

39、he potential of Aesop in China and the travel retail channel.It also gives LOral access to more than 300 Aesop stores globally,creating a downstream integration opportunity.LOral also made upstream integration moves,through the acquisition of a minority stake in French biotech firm and microalgae ma

40、nufacturer Microphyt.LOral will work with Microphyt to build a technological platform to create raw materials from microalgae biomass.4Beauty and personal care:resetting the stage for M&ACapability investments The pursuit of capabilities has emerged as a significant theme with a notable emphasis on

41、intellectual property,research and development,and technology-related acquisitions.In 2023 H1,capability investments have surpassed 2018 levels,accounting for 15 percent of all deals.Nu Skin Enterprises acquisition of 3i Solutions,a developer of oil-soluble materials for cosmetics,food,and nutrition

42、al industries,exemplifies this trend.The deal equips Nu Skin with new technology,ingredients,and IP to expand and innovate their product portfolio.Similarly,Beiersdorf acquired a majority stake in S-Biomedic in 2022,the goal of which is to develop active ingredients for cosmetic products by making u

43、se of living skin bacteria to build capabilities in skin microbiome research.From a tech side,in 2021,Givaudan acquired Myrissi,which has developed a patented AI that translates fragrances into color patterns and images to predict emotional perception of fragrances,enabling Givaudan to offer an olfa

44、ctive digital experience,something impossible to address until now.Hatch Collective,the beauty and wellness incubator,in 2021 acquired Trendalytics,a predictive data firm that analyzes social media profiles and searches to step change its product development process.Besides a need to augment the cur

45、rent portfolio,a key driver for M&A momentum in the next two years will be the opportunity to strike a“bargain.”Due to significant operating expenses(opex)increases,a growing number of indie and celebrity brands are looking for cash infusions and may struggle to raise capital.As a result,we expect l

46、ower multiples in upcoming months versus the past two to three years.As we noted earlier,we expect to see more large ($1 billion)deals and significantly more small($100 million)deals.The only anticipated decrease will be in medium-sized transactions.A driver especially for the smaller transactions i

47、s that investors are looking to make acquisitions or investments earlier in the life cycles of brands or pick up a minority share(see figure 3 on page 6).For the foreseeable future,the rationale behind transactions will not change significantly.Top-line expansion remains high on deal-makers agenda.S

48、trengthening/scaling the business,category diversification,and growth acceleration are the main priorities.Looking ahead:no loss of momentum and more sophisticated executionM&A keeping momentumTo understand what the future holds for BPC M&As we interviewed more than a dozen senior executives who ext

49、ensively focus on M&As around the globe and conducted a survey among 130 senior investment professionals responsible for setting and executing the M&A strategy.Overall transaction volume and deal rationaleOur survey found 89 percent of respondents believe that BPC M&A volume will increase over the n

50、ext two years.This will be driven by the limited growth of the existing brand portfolioaccelerated by the fact that the Gen Z segment is expected to drive about 30 percent of the beauty industry growth and they do not always favor“legacy”brandsand the desire to strengthen the current portfolio.5Beau

51、ty and personal care:resetting the stage for M&A1%of respondents out of total respondents who ranked the capability as top 3 most relevantSources:Dealogic;Kearney BPC M&A Executive survey 2023,Kearney analysisFigure 3Transactions for portfolio enhancement will still be the key deal rationale;transac

52、tions for capabilities will increase88%of respondents expect M&A activity in BPC space will increase in the next 2 years;strengthening existing portfolio is ranked as the most important transaction rationaleTechnology and data and analytics are the most valued capabilities;respondents from North Ame

53、rica value ESG and DEI more than respondents from other regionsTransaction rationale in the next two years importance ranked by respondents(N=130)Capabilities relevancy for future BPC acquisitions(N=130)With regard to capability acquisitions in beauty and personal care,please rank the type of compan

54、ies below based upon their relevance.1ESGand DEITalentIPData andanalyticsTechnologyStrengthen/scaleexisting portfolioCategorydiversificationGrowthaccelerationCapabilityenablementGeographicexpansionUpstreamintegrationDownstreamintegration25%35%38%45%48%54%56%80%77%57%46%40%In the coming years,survey

55、respondents expect skin care to be the dominant BPC category for M&A.Beauty tech as well as supplements and nutrition will also attract significantly more investment than in the past,while make-up will continue to lose momentum from a transaction perspective.We also expect to see an increase in tran

56、sactions in the fragrance category as the market faces consolidation(see figure 4 on page 7).Future price tier focusIn terms of price segment in focus,executives expect good momentum across price tiers,with some priority given to the luxury and prestige segment,especially among European respondents.

57、This is in line with our expectation that acquisitions of strong brands with pricing power and a loyal consumer base remain highly attractive.Learnings from lockdowns and global supply chain challenges have not only created more awareness of resilience but also a willingness to invest accordingly.Re

58、spondents expect further investments primarily in upstream integration and specifically into raw material suppliers,manufacturing capabilities and capacity,and packaging suppliers.Likewise,the continued talent shortage and need for innovation have created a new sense of urgency around investments fo

59、r capabilities.Most M&A executives expect to see more transactions driven by the need to gain access to technology and data and analytics capabilities.This is no surprise considering both past M&A trends and the hype associated with generative artificial intelligence(GenAI)(see figure 3 on page 6).F

60、uture category focusAt the category level,past transactions were driven by skin and body care as well as make-up.Historic data indicates the industrys growing obsession with skin care anddue to the“skinification”of the categoryhair care,which increased from 3 percent of deal volume in 2018 to 10 per

61、cent in 2023.Make-up is now seen as a riskier category due to increasing regulation,lower resilience amid the pandemic,and its dependence on hype make-up.6Beauty and personal care:resetting the stage for M&A1 Percentages may not resolve due to rounding.2 Personal care includes body care,sun care,and

62、 oral care.Sources:Dealogic;Kearney BPC M&A Executive survey 2023,Kearney analysisFigure 4Skin care is expected to continue to dominate,while beauty tech and supplements are likely to attract significantly more investmentGrowing trend toward M&A activities in skin care and body care segment,at the e

63、xpense of make-up targetsBPC M&A activities by target company industry segments(in#of transactions)1Among key subcategories,respondents ranked face/skin care as the most relevant subcategory in the upcoming 2 yearsBeauty and personal care subcategories relevancy ranking in the next 2 years(N=130)Mak

64、e-up2018Face/skin careBody careBeauty tech/appliancesSupplements and othernutritionHair careFragrancesMake-upOral careSun care53%43%46%40%36%30%26%19%11%9%6%24%13%12%8%6%24%10%9%8%7%20%13%9%7%4%1%2%2%23%12%9%6%5%2%12%10%54%41%41%39%34%23%20%16%32%10%6%5%3%2019202020212022HY1 2023Supplements and othe

65、r nutritionPersonal care2Hair careFace/skin careBeauty tech/applianceFragrances7Beauty and personal care:resetting the stage for M&A1%respondents out of total respondents who ranked the capability as one of the top 3 capabilities their company is investing inSource:Kearney BPC M&A Executive survey 2

66、023Figure 5Executives are planning to further invest in M&A strategy and integration planning capabilitiesBeauty and personal care capability relevancy ranking(N=130)Please rank the capabilities that your company is building/investing in according to their importance.1M&A strategy68%56%51%44%41%40%I

67、ntegration planningDeal sourcingDue diligenceIntegration executionDeal executionUnilever and P&G have introduced new business unit(BU)structures.Henkel has created Consumer Brands from their beauty and laundry and home care BU.Kenvue and Haleon have been created from J&J and GSK carve-outs.All these

68、 moves have been done to facilitate portfolio transformations through future acquisitions and divestitures.The expectation is that these companies will go through similar portfolio resets as,for example,Nestl has recently done.All executive survey respondents indicated that they will be making at le

69、ast moderate investments into M&A capabilities along the entire deal cycle.The top of list includes investments into M&A strategy and integration planning capabilities.In interviews with senior BPC executives the investment in divesture and carve-out capabilities was also noted as a muscle they expe

70、ct to build in order to manage future portfolio changes(see figure 5).Future regional focusFrom a regional perspective,the biggest deal volume increase is expected for Chinese-based targets,followed by North American and European targets.However,given the learnings from post-COVID lockdowns and geop

71、olitical tensions,many survey respondents also expect more investments to diversify in markets such as South Korea,Japan,and Indiaas an opportunity to offset the risk of decreasing business in China.More sophisticated execution Investing in capabilitiesAs we noted,the BPC space has a rich transactio

72、nal history and has been generating a large volume of deals.However,many deals have not been successful and have downright destroyed shareholder value.We see an increasing awareness among executives for the need to create the right structures and capabilities to execute more and larger deals.8Beauty

73、 and personal care:resetting the stage for M&AIdentifying the right targetWith around 800 global BPC companies likely in need of new investments or recapitalization over the next three to five years,the market seems to be ripe for an uptick in transactions and consolidation.However,considering mixed

74、 results over the past decade,and the large number of available assets,it will be crucial that acquirers understand the right type of brands they should target,especially when making investments to enhance an existing portfolio.Pure influencer brands(to differentiate from celebrity brands)and pure-p

75、lay direct-to-consumer brands are not considered attractive targets anymore by many executives.Instead,a focus is placed on companies that provide an aspirational brand experience(for example,differentiated and provocative brand storytelling),superior products(for example,signature hero product with

76、 true product innovation and strong claims),and sufficient headroom for growth(via geographic,channel,or subcategory expansion).Now is the time to actGiven the sectors growth and strong margins,BPC is expected to remain one of the most attractive consumer categories for M&A.However,due to foreseeabl

77、e changes in the sector,both strategic and financial investors will need to rethink their acquisition and investment playbook.In the current environment,decisions made regarding portfolios will be of paramount importance and should separate winners from losers.Leading BPC players must now move decis

78、ively to adapt their portfolios in an agile way and smartly integrate attractive,high-potential businesses and divest those that have no profitable future.Given financial market headwinds,the year ahead will undoubtedly present a clear window of opportunity for experienced buyers to go to market.For

79、 strategic investors,post-acquisition integration presents a significant challenge.They need to balance the operational efficiencies of their large-scale business model against the need for agility and creativity to sustain the success of multiple small brands under their umbrella.Numerous examples

80、demonstrate the pitfalls of integration even among the most successful conglomeratesfrom Colgate-Palmolive with Filorga or Shiseido with Laura Mercier,to Cotys challenges with KKW/SKKN.The most successful form of integration,especially of smaller brands,has been the application of an incubation proc

81、ess.This allows smaller brands to operate under a distinct set of financial metrics and avoid the negative impact of immediate integration,which can cause attrition and distract management from the growth plans of the business.During an incubation period small brands can receive the necessary suppor

82、t to mature and flourish before being fully absorbed into a division or broader organization.In the current environment,decisions made regarding portfolios will be of paramount importance and should separate winners from losers.9Beauty and personal care:resetting the stage for M&ATatiana PerimPartne

83、r,New York Gavin MeschnigPartner,Berlin Victor DijonPartner,Zurich Fabian LuxPartner,Dsseldorf The authors would like to thank Valerie Hopf,Christine Schmitt,Anna Sophie Frehse,and Taylor Fogarty,Grisel Ramirez,Luisa Roggenkaemper,Xi Zhang,Mengyang Yu,Emily Reinhold,Francois Pepinter,and Arjun Mahaj

84、an for their immensely valuable contributions to this study.AuthorsAlexandre TerseleerPrincipal,New York Pauline MexmainConsultant,San Francisco 10Beauty and personal care:resetting the stage for M&AFor more information,permission to reprint or translate this work,and all other correspondence,please

85、 email .A.T.Kearney Korea LLC is a separate and independent legal entity operating under the Kearney name in Korea.A.T.Kearney operates in India as A.T.Kearney Limited(Branch Office),a branch office of A.T.Kearney Limited,a company organized under the laws of England and Wales.2023,A.T.Kearney,Inc.A

86、ll rights reserved.Kearney is a leading global management consulting firm.For nearly 100 years,we have been a trusted advisor to C-suites,government bodies,and nonprofit organizations.Our people make us who we are.Driven to be the difference between a big idea and making it happen,we work alongside our clients to regenerate their businesses to create a future that works for