RELATED PARTY TRANSACTIONS

9 Months Ended

Mar. 31, 2024

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

Wella

On December 22, 2021, the Company entered into an agreement with Rainbow UK Bidco Limited (“KKR Bidco”) (an affiliate of funds and/or separately managed accounts advised and/or managed by KKR), related to post-closing adjustments to the purchase consideration for the Coty’s Professional and Retail Hair businesses, including the Wella, Clairol, OPI and ghd brands, (together, the “Wella Business”). In relation to this contingent consideration agreement, the Company received cash proceeds of $6.0 during the three months ended March 31, 2024. The Company also recognized a gain of $1.4 and $9.9, in the three and nine months ended March 31, 2024, and $2.1 and $28.5, in the three and nine months ended March 31, 2023, respectively, which is reported in Other expense (income), net in the Condensed Consolidated Statements of Operations.

As of March 31, 2024, Coty owned 25.84% of the Wella Company as an equity investment and performs certain services to Wella. Refer to Note 6— Equity Investments.

In connection with the sale of the Wella Business, the Company and Wella entered into a Transitional Services Agreement (“TSA”) and the Company performed services for Wella in exchange for related service fees. The Company and Wella have mutually agreed to end the contracted TSA services on January 31, 2022, as well as previously existing distribution services in Brazil during the third quarter of fiscal 2024. The Company and Wella continue to have in place manufacturing arrangements to facilitate the Wella Business transition in the U.S. and Brazil. TSA fees and other fees earned were $0.4 and $4.8, respectively, for the three months ended March 31, 2024 and $0.9 and $1.8, respectively, for the three months ended March 31, 2023. TSA fees and other fees earned were $2.2 and $9.8, respectively, for the nine months ended March 31, 2024 and $2.4 and $5.9, respectively, for the nine months ended March 31, 2023. Fees are principally invoiced on a cost plus basis and were included in Selling, general and administrative expenses and Cost of sales, respectively, in the Company's Condensed Consolidated Statement of Operations.

The Company also entered into an agreement with Wella to provide management, consulting and financial services. The Company earned $0.3 and $0.9 in the three and nine months ended March 31, 2024, respectively, and $0.3 and $0.8 in the three and nine months ended March 31, 2023, respectively, which are reflected in Other expense (income), net in the Condensed Consolidated Statements of Operations.

As of March 31, 2024, accounts receivable from and accounts payable to Wella of $53.1 and $20.0, respectively, were included in Prepaid expenses and other current assets and Accrued expenses and other current liabilities, respectively, in the Company's Condensed Consolidated Balance Sheets. Additionally, as of March 31, 2024, the Company has accrued $33.9 related to long-term payables due to Wella included in Other noncurrent liabilities in the Company's Condensed Consolidated Balance Sheet.

Coty will continue to recognize the share-based compensation expense for Wella employees until the existing equity awards reach their vesting date. For the three and nine months ended March 31, 2024 and 2023, Coty recorded $0.5 and $1.1, respectively, and $1.8 and $3.8, respectively, of share-based compensation expense related to Wella employees, which was presented as part of Other expense (income), net in the Condensed Consolidated Statements of Operations.

The Company has certain sublease arrangements with Wella after the sale. The Company reported sublease income from Wella of $2.1 and $2.3, respectively, and $6.2 and $7.0, respectively, for the three and nine months ended March 31, 2024 and 2023.