"New developments"
Recently, according to foreign media reports, the IPO of Puig Group, a Spanish perfume beauty and fashion giant, has ushered in new progress, and its prospectus has also been reviewed by the Spanish National Securities Market Commission (CNMV).
Qingyan learned from the Puig prospectus that the IPO issue price is 22 euros to 24.5 euros (about 169.73 yuan to 189.02 yuan), the amount raised is about 2.6 billion euros (about 20.059 billion yuan), and the market value after the issuance may be as high as 13.9 billion euros (about 107.239 billion yuan), setting a number of records such as "the largest IPO in Europe this year", "the largest IPO in Spain in the past ten years", "the largest beauty IPO this year" and so on.
It is reported that Puig Group plans to be listed and traded on the Spanish Stock Exchange around May 3 under the ticker symbol "PUIG".
It is worth mentioning that in the past few years, the performance of Puig Group has been excellent in the global beauty market, which has made this 110-year-old, low-key Spanish perfume beauty and fashion giant decide to go to the "front desk". The more than 400-page prospectus disclosed this time also comprehensively revealed the "way to success" of this century-old enterprise for the first time.
Won the biggest beauty IPO "crown" of the year
Proceeds will be used for additional equity in CT
In 1914, Antonio Puig founded the eponymous company, Antonio Puig, marking the official birth of Puig. Eight years later, Puig launched the Milady lipstick, the first cosmetic product produced in Spain. Since then, Puig has grown into a giant spanning various fields such as fashion and beauty by expanding into overseas markets and acquiring fashion and beauty brands.
After 110 years of development, Puig Group's business is mainly divided into three major sectors: fashion and perfumery, makeup, and skin care products, including a total of 17 brands, including well-known beauty brands such as Epiage and Charlotte Tilbury (CT), perfume brands PENHALIGON'S, L'Artisan Parfumeur, Byredo, etc.
▍Puig旗下品牌矩阵 截自Puig招股书
Since September last year, with the announcement of Puig Group's chairman and CEO Marc Puig as a possible option, rumors of Puig's imminent IPO have continued to ferment. "Opening up capital can help avoid the pitfalls that family businesses often encounter, and IPOs are an important option. Marc Puig once said in response to media concerns.
Commenting on the opening of the Puig Group's IPO, Marc Puig said, "We believe that becoming a public company will align our corporate structure with that of a leading family-owned company in the global premium beauty industry, while helping us attract and retain talent and support the growth strategy of our brand and product portfolio." ”
Now, with the disclosure of the prospectus, it means that Puig Group's IPO is ushering in definitive progress and is getting closer and closer to the final listing.
It is worth mentioning that, according to Bloomberg, Puig has surpassed the 2.3 billion Swiss francs (about 18.296 billion yuan) financing amount of Cetaphil's parent company Galderma Group AG last month, making it the largest financing deal in Europe so far this year.
From the perspective of the composition of the financing amount, Puig will generate about 1.25 billion euros (about 9.644 billion yuan) of income by selling enough new shares, and the Puig family will also raise about 1.36 billion euros (about 10.492 billion yuan) by issuing shares. In addition, Puig also authorized Goldman Sachs Bank Europe SE to purchase over-allotment shares on behalf of management, up to about 15% of the underlying issue size, equivalent to 390 million euros (about 3.009 billion yuan).
As for the use of the listing proceeds, Puig said in the prospectus that it intends to use the net proceeds from the issuance of new offering shares for general corporate purposes, including the payment of put options and call options for part of the shares held by CT's minority shareholders, which will be exercised in 2024 and are worth 207 million euros (about 1.597 billion yuan).
Regarding Puig's IPO valuation, the Financial Times reported that Puig said that the IPO valuation ranged from 12.7 billion euros to 13.9 billion euros (about 97.981 billion yuan to 107.239 billion yuan), which is the largest initial public offering in Europe so far this year.
First disclosure of the "Five Principles"
To build CT into a billion euro brand
Puig's aggressive pursuit of listing is underpinned by its impressive track record. According to the prospectus, from 2021 to 2023, Puig Group's net income will be 2.585 billion euros (about 19.943 billion yuan), 3.62 billion euros (about 27.928 billion yuan), and 4.304 billion euros (about 33.205 billion yuan), of which from 2022 to 2023, they will increase by 40% and 18.9% year-on-year respectively, showing a strong growth momentum.
▍Puig Group's 2021-2023 results are taken from Puig's prospectus
In particular, in 2023, Puig's net revenue exceeded 4 billion euros (about 30.86 billion yuan) for the first time, the EBITDA reached a record 849 million euros (about 6.55 billion yuan), and the EBITDA margin was 20%, exceeding the performance target of 3 billion euros in net income in 2023.
From 2021 to 2023, Puig's share of net revenue in EMEA (Europe, Middle East and Africa) increased from 54% to 58%, the share of the US market decreased from 36% to 32%, and the Asia-Pacific market performed smoothly with no significant change.
▍Excerpt from Puig prospectus
Among them, in 2023, Puig's net income in the Asia-Pacific region increased by 26% to 439 million euros (about 3.387 billion yuan). In EMEA (Europe, Middle East and Africa) and the Americas, net income increased by 18%, of which EMEA reached 2.32 billion euros (about 17.9 billion yuan).
From the perspective of business changes, from 2021 to 2023, Puig Group's perfume and fashion, cosmetics, and skin care businesses have maintained rapid growth, which is rare among global beauty giants. Specifically, the perfume and fashion business led the cliff and remained the largest business in Puig, while the cosmetics business and skin care business maintained a solid growth momentum.
▍Excerpt from Puig prospectus
In 2023, Puig's fragrance and fashion division grew by 16.6% to account for 72% of its net revenue, thanks to the strong performance of its own brands. Among them, Rabanne, a fashion and perfume brand that launched a beauty line last year, performed well, becoming the first brand under Puig to have a net income of more than 1 billion euros (about 7.715 billion yuan).
Qingyan also noted that although Puig has been deeply involved in the fashion field for many years, according to the prospectus, in 2023, the net income of fashion products will only account for less than 5% of its perfume and fashion business, that is, the perfume and beauty skin care business will account for more than 96% of Puig Group's net income in 2023. However, Puig said, "Creativity and innovation are the inherent foundation of the fashion market category and our core competencies to drive brand loyalty in our fragrance products." ”
In the past year, led by beauty brand CT, Puig's cosmetics business unit also performed well, with a year-on-year increase of 23%, accounting for 18% of Puig's net revenue. Skincare is Puig's fastest-growing business unit in 2023, with 31% year-on-year growth and 10% of its net revenue, thanks to the market success of Charlotte Tilbury's Magic Cream.
It is worth mentioning that Puig said in the prospectus about the excellent results achieved today, "This is the result of the five principles that have been adhered to over the past 20 years, which are still the main pillars of its strategy today." ”
Among the five principles, Puig ranks "focus on the high-end" at the top of the list. Puig said that we identified the trend of "premiumization" early and decided in 2004 to move from the mass market to the premium market, leveraging Puig's core creative capabilities to create a differentiated fragrance proposition for our premium brands. At the same time, prioritizing private labels, building niche fragrance portfolios, going beyond fragrance and fashion in the beauty business, and carefully planned and selective mergers and acquisitions are also one of the principles that Puig has adhered to for many years.
The prospectus also mentioned that in January this year, Puig Group announced a business plan from 2024 to 2027, including building CT into a 1 billion euro (about 7.715 billion yuan) brand, as well as focusing on strengthening its business in the Asia-Pacific region and expanding its medical skin care and skin care health business.
It is worth mentioning that according to the list of the top 10 cosmetics in the world in 2023 (for details, see the article "Just now! The ranking of the world's top ten cosmetics companies has changed") is ranked as the Brazilian beauty giant Natura & Co, its net revenue in 2023 will be 26.737 billion Brazilian reais (about 37.175 billion yuan), which means that Puig Group's revenue in 2023 is only less than 4 billion yuan, and compared with the continuous growth of Puig Group, Natura &Co's performance declined significantly last year, and the outlook is not optimistic. Therefore, if it can continue its excellent performance in the past, Puig is very likely to pick out Natura &Co next year and become the new top 10 global beauty company.
China is mentioned several times in the prospectus
Puig will continue to increase its presence in the Chinese market
Qingyan noticed that there were many references to China in Puig's prospectus, and for the first time disclosed its investment and development in the Chinese market in the past few years, vividly showing the "ups and downs" of the beauty giant's operation in the Chinese market.
For example, in 2021, Puig exclusively completed tens of millions of dollars in Series B financing for the scent library, which also once refreshed the financing height of the domestic fragrance track, and the prospectus disclosed that it currently holds a 15% stake in the scent library.
▍Excerpt from Puig prospectus
It is particularly worth mentioning that only in the following year after the completion of the investment, due to the impact of the epidemic, Puig's equity impairment loss on the smell library was 19.6 million euros (about 151 million yuan), but due to the recovery of the retail industry after the epidemic, it was partially offset by the impairment loss of 9 million euros (about 69.3954 million yuan) of the smell library.
In addition, the prospectus also disclosed the adjustment of ELZUI's operation in the Chinese market in recent years. Referring to the decline in operating profit of skincare products in 2022, Puig said that the decline mainly reflected the organizational changes of its medical skincare brand in China, from a distributor model to a subsidiary wholesale model, which had a negative impact on profitability.
At that time, Puig's medical skin care brand Elage announced the closure of the official flagship store of Tmall and the transformation of the brand to its own model, which caused a lot of repercussions in China, and it was also reported that it officially established a subsidiary in China last year and is rapidly developing and expanding its local team.
However, as a well-funded beauty giant, it is not unusual for the Chinese market to adjust. In fact, since 2021, Puig has been laying the foundation for its growth in the Chinese market through investment, offline store opening, and in-depth cooperation with Chinese companies.
Especially in recent years, CT and Byredo, a Swedish luxury fragrance brand that Puig has won a lot of money, have accelerated the pace of expansion and marketing of online and offline channels in China. It is understood that Byredo has opened offline physical stores in Shanghai, Beijing, Shenzhen, Nanjing and other places. CT brands, which have performed well in the Chinese market, recently officially announced that Chinese mainland actor Deng Wei has become the spokesperson of CT's global makeup brand to further open up the Chinese market.
At the same time, Puig is constantly introducing new brands to the Chinese market. In September last year, Puig Group's fashion brand Dries Van Noten's beauty and fragrance collection officially landed in the Chinese market.
In a way, niche fragrances may be Puig's latest entry into the Chinese market. This year, in response to the growing demand from Chinese consumers for niche fragrances and high-end beauty, a number of Puig's beauty and fragrance brands will also appear in China Duty Free Sanya International Duty Free Mall as new boutiques, releasing the group's confidence and vision in entering the beauty sector in China.
In the prospectus, Puig also said that it will implement a growth plan for niche fragrances in Asia in 2023, and specifically mentioned the opening of six Penhaligon stores and four Ati Sen stores in China, for a total of ten perfume brand stores.
Looking ahead, with the approach of Puig's listing, the global beauty market may usher in a new round of changes, and after the listing, whether it can continue the past growth trend to meet the expectations of many investors is also a huge test for Puig.