Skinhealth Systems Inc. · NASDAQ:SKIN
Skinhealth Systems — Beauty Health — Q4 2022 Earnings Presentation
32 slides from Skinhealth Systems's earnings presentation, Feb 28, 2023
Slide 1: Q4 & FY 2022 Earnings Presentation
4 » A BEAUTYHEALTH Q4 & FY 2022 Earnings Presentation February 28, 2023
Slide 2: Disclaimer
Disclaimer ‘This Presentation contains certain forward-looking statements. These statements may relate to, But are not limited to, expectations of future operating results or financial performance of The Beauty Health Company (the "Company’), capital expenditures, the introduction of new products, e
Slide 3: Today's agenda
Today’s agenda Opening 04 & FY 2022 results & Q&A remarks FY 2023 outlook Andrew Stanleick Liyuan Woo President & Chief Financial Officer Chief Executive Officer 3 ~» BEAUTYHEALTH™
Slide 4: Opening remarks
Opening remarks Andrew Stanleick President & Chief Executive Officer + BEAUTYHEALTH
Slide 5: BeautyHealth delivered strong top-line growth in 2022
BeautyHealth delivered strong top-line growth in 2022 and EBITDA in line with guidance Eight consecutive quarters Double-digit YoY growth Outsized investment years of double-digit topline growth across all regions now largely complete aly @O | al $98.1mm Q4 2022 net sales FY 2022 YoY growth: Global
Slide 6: In 2023, our focus is profitable growth, optimization, and building the product portfolio
In 2023, our focus is profitable growth, optimization, and building the product portfolio 2Q international Build the portfolio Harness reopening of China Syndeo launch Expanding our connected Boosters, complementary Maintain gold standard positioning platform globally products and services in market
Slide 7: Continued progress against our 5-point Master Plan
Continued progress against our 5-point Master Plan ' Expand footprint, Invest in Drive brand Optimize global M&A drive providers awareness infrastructure consumables iG ~» BEAUTYHEALTH
Slide 8: Achieved another year of record delivery system sales
Achieved another year of record delivery system sales and recognition as estis’ favorite treatment & device mNew Systems 1 Trade-Ups aol A Winner of TWO oe Aestheticians’ a6; ChoiceAwards } } } ©— Sess At Hydrodermabrasion Machine: Syndeo Favorite Signature Treatment: Hydrafacial 2019 2020 2021 2022
Slide 9: Driving consumables and recruiting consumers with expanded booster portfolio
Driving consumables and recruiting consumers with expanded booster portfolio and treatment offerings JLO BEAUTY: Omorovicza, 7 bUDAPEST ; < | ’ ‘N 4 —— os International First prestige skincare Harness demand to fuel 3 8 expansion partner consumables growth oO as Q4 2022: Canada, Q1 2023: Mexico, Q1
Slide 10: One device. Endless possibilities for your business
One device. Endless possibilities for your business b “ presence ; " IMCAS 2023 | Paris KOL & influencer reception BEAUTYHEALTH
Slide 11: Interest over time
Jan-19 Jul-19 Jan-20 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Interest over time 2021 average
Slide 12: Consumer testimonial
I discovered the Hydrafacial when I was working in France. I really saw the difference. My skin has never felt so clean and glowing.
Slide 13: Dior powered by Hydrafacial: reaching new consumers
Dior powered by Hydrafacial: reaching new consumers ® . with elevated spa and retail experiences ; —- Available exclusively at Dior spas around the world from April 2023 13 BEAUTYHEALTH
Slide 14: Infrastructure buildout largely complete, ready to scale
Infrastructure buildout largely complete, ready to scale Key 2022 investments HARA WR » Fortified leadership team « Opened key experience centers in New York, London, Paris and Singapore + Elevated branding and awareness initiatives + Enhanced marketing collateral for providers + Local production in
Slide 15: Our vision is to accelerate through M&A
Our vision is to accelerate through M&A S Differentiated product or service / high Net Promoter Score Identify gaps in portfolio Complementary to our existing platform and community, =<\ <) leveraging the trusted esthetician Integrate | and realize synergies Acquire Financially attractive profile vi
Slide 16: Building the portfolio with the acquisition of microneedling device SkinStylus
Building the portfolio with the acquisition of microneedling device SkinStylus Highly complementary addition to BeautyHealth portfolio with compelling commercial opportunity FDA-cleared with credibility as an esthetician- founded brand, deepening our trust and relationship with the core of our commu
Slide 17: Q4 & FY 2022 results & 2023 outlook
04 & FY 2022 results & 2023 outlook Liyuan Woo Chief Financial Officer + BEAUTYHEALTH
Slide 18: Q4 & FY 2022 financial highlights
Q4 & FY 2022 financial highlights Net sales by segment ($mm) m Delivery Systems ™ Consumables <i Trade-Ups' m Delivery Systems tm Consumables $365.9 $260.1 $47.5 $112.3 $119.1 57 2 2. 2 2 2 % YoY growth Qi Q221° Q321° Q421° Q122 Q222 Q322 Q422 2018 ©2019 2020 20217 2022 51% 67% 90% 74% 62% 85% 36% 1
Slide 19: Q4 & FY 2022 financial highlights (cont'd)
Q4 & FY 2022 financial highlights (cont’d) Net sales by region ($mm) mAmericas jj APAC m EMEA 1 Trade-Ups' mAmericas @APAC mEMEA $365.9 %YoY growth Q121* Q221° Q3217 Q4217 Q122 Q222 9322 Q422 2018 = 2019 = 2020 18% 34% 51% 47% 43% 77% 30% 29% 38% (33%) 252% 344% 218% 64% 47% (17%) 44% 33% 152% (8%)
Slide 20: Q4 2022 key performance indicators
Q4 2022 key performance indicators 25, oe 6 Ne global install base 2 O 67 Delivery systems sold Q4 Z, 1 : $24, 408 De ety system ASP" $5 O 7 mm Delivery system revenue , $A7 4mm Consumables revenue | 20 Rape Sang Pre BEAUTYHEALTH
Slide 21: Measuring consumables revenue
Measuring consumables revenue Consumables revenue by quarter ($mm) $47.4 Consumables revenue ($mm) $31.6 $32.0 $21) 2021 3 1021 O21 4021 1Q22 2022 3Q22 4Q22 % YoY growth 23%! 48%! 55%! 39%! 54% 23% 24% 35% celerated delivery system placements expected to continue driving co Quarterly consumables rev
Slide 22: Q4 & FY 2022 financial highlights
Q4 & FY 2022 financial highlights Gross margin and adjusted gross margin’ Net income (loss) and adjusted net income (loss)! ($mm) 72.9% 66.4% 76.5% 72.3% i444 $4.5 $9.1 | || LO i ($375.1) Q42021 942022 Q4 2021 Q4.2022 FY 2021 FY 2022 FY 2021 FY 2022 Gross margin Adjusted gross margin! Net income (lo
Slide 23: Understanding our seasonality
Understanding our seasonality Sequential net sales growth by calendar quarter % adjusted EBITDA contribution by quarter’ Back-half weighted —-FY 2021 —-FY 2022 parc, +50% 140% Siguegy +30% LL +20% +10% . China zero- 0% tg: COVID policy (om) impact ol Q2 Qs" 94 Sequential decline vs. Increase vs. Sum
Slide 24: Q4 2022 cost detail
Q4 2022 cost detail ($mm) Q4 2022 Q4 2021 4 Q4 2021 % net sales Q4 2022 4 2021 A Q4 2021 A Commentary Gross Profit $65.2 $56.8 +$8.4 66.4% 72.9% (6.5%) Trade-up volumes, Syndeo initial program. logistics and servicing costs, raw material write-offs, warranty reserves, global supply chain challenges,
Slide 25: Q4 2022 balance sheet highlights
Q4 2022 balance sheet highlights Cashandcash » Approximately $568.2 million cash and cash equivalents on balance sheet equivalents Warrants » Approximately 7.0 million Private Warrants outstanding » $750.0 million 1.25% convertible notes due 2026 Convertible » Use of proceeds: capped call transactio
Slide 26: 2023 outlook: increasing operating leverage and accelerating
2023 outlook: increasing operating leverage and accelerating China Clear path to 18% — 20% adjusted EBITDA margin’ 20% Potential pooo---4] benefit from ! [strong China Megey acceleration = uu 13.0% — ria realization 2023E net sales +23 - 28% YoY growth » International launch of Syndeo a ; 2022 Adj O
Slide 27: BeautyHealth delivered strong top-line growth in 2022
BeautyHealth delivered strong top-line growth in 2022 and EBITDA in line with guidance Eight consecutive quarters Double-digit YoY growth Outsized investment years of double-digit topline growth across all regions now largely complete aly @O | al $98.1mm Q4 2022 net sales FY 2022 YoY growth: Global
Slide 28: Andrew Stanleick Liyuan Woo
Andrew Stanleick Liyuan Woo President & Chief Executive Officer Chief Financial Officer + BEAUTYHEALTH
Slide 29: Appendix
Appendix + BEAUTYHEALTH
Slide 30: Reconciliation of gross margin to adjusted gross margin
Reconciliation of gross margin to adjusted gross margin Three months ended December 31, Year ended December 31, ($mm) 2022 2021 2022 2021 Net sales $98.1 $77.9 $365.9 $260.1 Cost of sales 33.0 244 115.5 78.3 Gross profit (GAAP) $65.2 $56.8 $250.3 HB Gross margin (GAAP) 66.4% 72.9% 68.4% 69.9% Adjust
Slide 31: Reconciliation of net income to adjusted EBITDA
Reconciliation of net income to adjusted EBITDA Three months ended December 31, Year ended December 31, (mm) 2022 2021 2022 2021 Net sales $981 S779 $365.9 $2607 Net income (loss) $3.8 ($17.3) $44.4 ($375.1) ‘Adjusted to exclude the following ‘Change in FV of warrant liability (6.8) 6.0 (78.3) 27.3
Slide 32: +
+ BEAUTYHEALTH