The Estée Lauder Companies (EL) 23rd annual dbAccess Global Consumer Conference summary

Portfolio strategy and M&A outlook

• Confirms current brand portfolio is strong and competitive in prestige beauty, with large, midsize, and fast-growing smaller brands performing well.

• M&A remains a strategic lever, but any acquisition must be accretive to growth and profitability, and create shareholder value; recent large deal did not proceed due to price.

• Ongoing portfolio review with advisors to assess brand fit and consumer needs; some brands may be revisited or divested.

• Transformation initiatives (PRGP) will be largely completed by end of 2024, enabling readiness for future transformational deals if financially justified.

Operational transformation and supply chain agility

• Major operational, cultural, and leadership transformation underway, with PRGP approval by June 30 and execution largely done by year-end.

• Supply chain regionalization has increased speed, agility, and resilience, with over 60% of finished goods and 70% of materials sourced regionally.

• Investments in fulfillment centers and alternative freight lanes have mitigated tariff and geopolitical risks, notably in the Middle East.

• AI and digital tools are accelerating product launches, optimizing manufacturing, and enabling scenario planning for supply chain disruptions.

Growth, innovation, and market performance

• Confirms top-end of 3% net sales growth guidance for current year, with 3%-5% net sales growth and 4%-6% retail sales growth targeted for next year.

• Innovation now drives 24%-25% of sales, with a goal to reach 30% through a mix of breakthrough, on-trend, and commercial innovation.

• AI and process improvements have doubled product launches under 12 months and enabled faster, more efficient innovation cycles.

• U.S. market is regaining share and volume, with distribution shifting from department stores to specialty and online channels.

• In China, market share gains are driven by local relevance, R&D in Shanghai, and a balanced brand portfolio, despite rising local competition.