Message from William P. Lauder

At the core of that success is our global workforce, a bold community of individuals who are the driving force behind how we do business. Under the tremendous leadership of our President and Chief Executive Officer Fabrizio Freda and our Executive Leadership Team, our ELC family powered through extraordinary circumstances this fiscal year to drive growth across key areas of the business, further strengthening our position as the leader in global prestige beauty.

COVID-19 RESPONSE AND RELIEF EFFORTS

Although the COVID-19 pandemic has tested us in many ways, I am proud of how we are continuing to honor our values and commitments during this time. Thanks to Fabrizio and our global leaders across the company, we have quickly and strategically implemented a series of initiatives designed to help ensure the health and safety of our employees.

Importantly, we are also using this time as an opportunity to propel ourselves and our communities forward. In response to the impact of COVID-19 around the world, The Estée Lauder Companies, its brands, and its corporate foundation, The Estée Lauder Companies Charitable Foundation (ELCCF), have contributed to relief efforts and provided donations to organizations for their continued work across the globe, including:

• A $2 million grant to Doctors Without Borders/Médecins Sans Frontières (MSF) to support their continued life-saving work and response to COVID-19 in under-resourced and highly impacted countries.
• $10 million from M∙A∙C Cosmetics' VIVA GLAM Fund to 250 local organizations around the world that are providing essentials needs and services to people at higher risk during the COVID-19 pandemic.
• Two million surgical masks for those on the front-lines in New York as part of our continued effort towards COVID-19 relief, provided by the Estée Lauder brand.

THE ESTÉE LAUDER COMPANIES STANDS WITH THE BLACK COMMUNITY

Earlier this year, we were faced with the outrageous acts of racism, bigotry and violence that are a result of systemic racial injustice across the world, and in the United States in particular. These acts came on the heels of the most difficult weeks of the pandemic, which continues to disproportionately affect people of color and Black communities.

We take pride in the values of respect and inclusion on which we were founded. And we are proud of the overall progress and commitment we have made to living those values, but like many companies, we realize that we have more work to do in order to better stand with our Black employees, Black consumers and Black communities. In response, we pledged $10 million over the next three years, from the company, its foundation, employee matching gifts and the Lauder family to support non-profits and other organizations. We know that financial support alone is not enough, and also promised to be better participants in building racial equity. As such, we made a series of commitments across our business to better build a stronger culture both within and outside of the company. These commitments, along with a continued dialogue with employees and the establishment of meaningful partnerships, will help us in our continuous efforts to make equity a reality at The Estée Lauder Companies.

I encourage you to read more about our actions and progress here.

OUR CULTURE OF BELONGING

This year, we continued to harness the power and creativity of our Employee Resource Groups (ERGs) and are expanding them globally. Last fall we held the first-ever ERG fair for NYC employees, with members highlighting the work of their groups within the organization and recruiting nearly 100 new members. The Women’s Leadership Network (WLN) launched to great success in Paris and London, with global kickoff events featuring WLN executive sponsors, Executive Group President Jane Hertzmark Hudis; Executive Vice President and Chief Financial Officer Tracey T. Travis; and Vice Chairman Sara E. Moss.

Despite the impact of COVID-19 on PRIDE month activities around the world, the company continued to demonstrate its unwavering support of the LGBTQA Community through #ELCProudTogether, a series of virtual events hosted across our digital platforms that celebrated the individuality of our ELC family.

OUR COMMITMENT TO SOCIAL IMPACT

Building on our longstanding tradition of community involvement, the company recently launched a nonpartisan, employee-led Civic Engagement Task Force to encourage, empower and inspire employees’ civic efforts in their communities. This year, the initially U.S.-focused task force will concentrate on supporting voting, including providing employees with resources to register and actively participate in the voting process.

To further support these efforts, The Estée Lauder Companies joined the Civic Alliance, which brings together and supports its member companies to take concrete actions that encourage internal and external audiences to participate in elections and be active members of their communities. We are honored to be the first beauty company to join the initiative, and look forward to working to increase voter turnout and foster a culture of civic engagement within our company.

27 YEARS OF THE BREAST CANCER CAMPAIGN

RECOGNITION OF EXCELLENCE

We continue to be recognized for our unwavering commitment to creating a home for the industry’s best talent.

• This year marked our third consecutive year included in the 2020 Bloomberg Gender-Equality Index (GEI). This acknowledgement recognizes the company’s commitment to an inclusive culture and collaborative workplace, as well as to driving action and change.
• Having achieved a perfect score of 100 percent for HRC’s 2020 Corporate Equality Index for a fourth consecutive year, we were once again named one of Human Rights Campaign (HRC) “Best Place to Work for LGBTQ Equality”. In the 18 years HRC has been conducting its surveys, this will be the 11th time the company has received a perfect score.
• Working Mother magazine named the company a Top 10 Best Company for Multicultural Women for establishing a culture that encourages multicultural women to join and advance in their careers.

It’s wonderful to see the company acknowledged in such meaningful ways, a true reflection of the unwavering passion and dedication of our employees around the world.

While we faced many challenges this year, I am incredibly proud of all that we have accomplished. I would especially like to extend my deepest gratitude to Fabrizio; the Executive Leadership Team; my father, Chairman Emeritus Leonard A. Lauder; and our Board of Directors. Their leadership is critical to the ongoing transformation and growth of our business amidst a continually evolving world. And of course, I would like to once again acknowledge our global ELC family, whose collective vision and commitment to excellence continues to propel us forward.

We look forward to the promise and opportunity of fiscal 2021, and to continued growth and success.

William P. Lauder

October 2020

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Non-GAAP Information

The Fiscal 2020 Year-in-Review materials contain references to the following non-GAAP financial measures: constant currency, adjusted net earnings and adjusted diluted earnings per share. We use such measures, among other financial measures, to evaluate our operating performance, which represent the manner in which we conduct and view our business. Management believes that excluding certain items that are not comparable from period to period, or reflect the company’s underlying ongoing business, provides transparency for such items and helps investors and others compare and analyze our operating performance from period to period. In the future, we expect to incur charges or adjustments similar in nature to those presented below; however, the impact to the company’s results in a given period may be highly variable and difficult to predict. Our non-GAAP financial measures may not be comparable to similarly titled measures used by, or determined in a manner consistent with, other companies. While we consider the non-GAAP measures useful in analyzing our results, they are not intended to replace, or act as a substitute for, any presentation included in the consolidated financial statements prepared in conformity with U.S. GAAP. Click here for information about GAAP and non-GAAP financial measures, including reconciliation information.

Forward-Looking Statements

Certain statements in the Fiscal 2020 Year-in-Review materials may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may address our expectations regarding sales, earnings or other future financial performance and liquidity, other performance measures, product introductions, entry into new geographic regions, information technology initiatives, new methods of sale, our long-term strategy, restructuring and other charges and resulting cost savings, and future operations or operating results. Click here for Cautionary Note Regarding Forward-Looking Statements. In addition, please refer to our reports with the SEC, click here, including our Form 10-K for fiscal 2020, where you’ll find factors that could cause actual results to differ materially from these forward-looking statements.