PARIS – The “elephant in the room” was quickly addressed during the Estée Lauder Cos.’ panel at the Deutsche Bank Global Consumer Conference, held in Paris Tuesday morning.
“A year ago, when we were on this stage, we spoke a bit about portfolio optimization,” said Stephen Powers, managing director, head of U.S. consumer packaged goods research at Deutsche Bank AG, addressing Stéphane de La Favorie, president and chief executive officer of the Estée Lauder Cos. “And in that context, the conversation was mostly about organic optimization over time. Just to address probably the elephant in the room: You’ve obviously since that time looked at a very large acquisition of a portfolio of brands, and you’ve continued to be active in minority and majority investments in other assets, as well as hiring advisors to overall do a portfolio review.”
The large deal referred to was a possible merger with Puig, before talks officially ended on May 21.
“As we reset and think about the business and your strategy from here, how do we think about the role of M&A going forward?” Powers asked. “Do you have the right portfolio of brands to achieve what your aspirations are, or do you need something more transformational from an M&A perspective to achieve the value creation targets that you set?”
