Skinhealth Systems Inc. · NASDAQ:SKIN
Skinhealth Systems — Beauty Health — Q1 2023 Earnings Presentation
31 slides from Skinhealth Systems's earnings presentation, May 10, 2023
Slide 1: Q1 2023 Earnings Presentation
4 » A BEAUTYHEALTH Q1 2023 Earnings Presentation May 10, 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 Q1 2023 Results & Q&A Remarks FY 2023 Outlook Andrew Stanleick Liyuan Woo President & Chief Financial Officer Chief Executive Officer 8 ~» BEAUTYHEALTH™
Slide 4: Opening Remarks
Opening Remarks Andrew Stanleick President & Chief Executive Officer + BEAUTYHEALTH
Slide 5: Underlying consumer demand for Hydrafacial remains strong
Underlying consumer demand for Hydrafacial remains strong Amidst strong Syndeo traction and China recovery, raising FY 2023 net sales guidance Strong consumables revenue growth demonstrates continued healthy consumer demand Americas: +34% Q1 2023 YoY EMEA: +13% Q1 2023 YoY APAC: (22)% Q1 2023 YoY --
Slide 6: 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 consumables providers awareness infrastructure & ~» BEAUTYHEALTH
Slide 7: Syndeo turns and goes global
Syndeo turns 1 and goes global a) . Now in 14 markets and 16 by end of year 2023 ydrale ) direct markets launched a Launched Late Q22023 4.2023 Ay The future et Or © cS) | kin health O0C0G00S ) = Q1 2023 Syndeo global install base 2024 distributor markets expansion % ~~ BEAUTYHEALTH
Slide 8: Building our Hydrafacial Nation
Building our Hydrafacial Nation Now 40,000+ estheticians trained globally Beijing Experience:Center 8 BEAUTYHEALTH
Slide 9: Hydrafacial is upping its cool factor, one brand partnership at a time
Hydrafacial is upping its cool factor, one brand partnership at a time The Hydrafacial Phenomenon: Why Everyone Is Obsessed With This In-Office Treatment“ ” “ ”
Slide 10: Resetting the baseline with increasing EMV growth
Resetting the baseline with increasing EMV growth and sustained gains in organic search Earned media value ($mm)! Worldwide Google search trends — Interest over time | — — FY 2022 average > $47 $2.0 Jan-19 Nov-19 Jul-21 May-22 Mar-23 Q1 2023 10 ~ BEAUTYHEALTH
Slide 11: Unleashing our ready infrastructure in China
Unleashing our ready infrastructure in China S) as the market returns APAC Syndeo launch in Shanghai, Syndeo & Beijing Experience Center APAC Annual Sales Meeting & with customers, press, & influencer events launch event with customers & press Training in Shanghai " BEAUTYHEALTH
Slide 12: M&A criteria
Differentiated product or service / Identify high Net Promoter Score gaps in portfolio Complementary to our existing platform and community, =<\ <) leveraging the trusted esthetician Integrate | and realize synergies Acquire Financially attractive profile via r¢ digestible compelling revenue growth,
Slide 13: Integration complete and operationalized
Integration complete and operationalized First SkinStylus shipment leaves BeautyHealth warehouse Expansion plans underway 13 BEAUTYHEALTH™
Slide 14: Takeaways
Takeaways Healthy consumer demand Double-digit topline growth Raising 2023 net sales guidance 14 BEAUTYHEALTH™
Slide 15: Q1 2023 Results & FY 2023 Outlook
Q1 2023 Results & FY 2023 Outlook Liyuan Woo Chief Financial Officer + BEAUTYHEALTH
Slide 16: Q1 2023 financial highlights
Q1 2023 financial highlights Net sales by segment ($mm) m Delivery Systems Consumables 23 Trade-Ups $103.5 3.3) $88.8 $80.2 ine 39.7 41.5 494 qi2 6922 «9321? =ga2? = 22 Q222 Q322 Q422 Q123 % YoY growth 51% 67% 90% 74% 62% 85% 36% 19% 9%—> 23% 48% 55% 39% 54% 23% 24% 35% 21% Continued st S Tae x : »
Slide 17: Q1 2023 financial highlights (cont’d)
Q1 2023 financial highlights (cont’d) Net sales by region ($mm) mAmericas mAPAC mEMEA ;:Trade-Ups! $103.5 Q422 123 18% 29% 19% ——* Comp vs Syndeo US launch 252% 33% 6% » Lockdown impact 10% ——+* +20% YoY excl. Russia ~ BEAUTYHEALTH
Slide 18: Q1 2023 key performance indicators
Q1 2023 key performance indicators 27 406 Net global install base 5 OY Y 1 i 636 pleseraenis system $25 099 Delivery system ASP" $45 4m m Delivery system revenue , $40. 9 mm Copeumanies revenue 7 | 18 Reerpe Sang Pre BEAUTYHEALTH
Slide 19: Sustained and durable consumables trend
Sustained and durable consumables trend Annual consumables revenue per active delivery system —- MedSpa 4 2 3 4 Years delivery system in service Long-term upside in consumables revenue MedSpa utilization ramp for delivery systems purchased as install base matures Q1 2012 - 03 2022 QH2 Qt HA HEHE QHT
Slide 20: Q1 2023 financial highlights
Q1 2023 financial highlights Gross margin and adjusted gross margin’ 71.3% 70.0% $3mm value | engineering related 1 write-offs ! Pre-launch lower ! margin | refurbished Elite sales Q1 2022 Q1 2023 Q1 2022 Q1 2023 GAAP gross margin Adjusted gross margin’ Net income (loss) and adjusted net income (los
Slide 21: Q1 is seasonally our trough quarter
Q1 is seasonally our trough quarter Sequential net sales growth by calendar quarter —FY 2021 ——FY 2022 FY 2023 +50% +40% +30% +20% 10% 0% # of (40%) f i pr (20%) ~ Qi Q2 Q3' o4 a Drivers of seasonality Sequential F || Sena | Divers % FY22 Net Sal Trough demand Q1 Difficult comp vs 21% peak Q4 Leads
Slide 22: We are naturally a back-half weighted business
We are naturally a back-half weighted business % adjusted EBITDA contribution by quarter, FY 2022' 35% 100% tn 35% 3 27% 2% _ — Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 BEAUTYHEALTH
Slide 23: Q1 2023 cost detail
Q1 2023 cost detail SC ben $54.4 $50.9 +$3.2 Gekany 38.7 36.4 423 G&A 30.4 26.3 +44 R&D 23 2.2 +0. 62.7% 44.9% 35.2% 67.5% 48.3% 34.8% 3.0% (4.8%) (3.4%) 0.4% (0.2%) Optimization write-offs and pre-Syndeo launch low margin refurbished Elite pre-sale impact Increases in sales commissions associated w
Slide 24: Q1 2023 balance sheet highlights
Q1 2023 balance sheet highlights Cash and cash » Approximately $532.3 million cash and cash equivalents on balance sheet equivalents Warrants » Approximately 7 million Private Warrants outstanding » $750 million 1.25% convertible notes due 2026 Convertible » Use of proceeds: capped call transaction,
Slide 25: Confidence to achieve 2023 outlook
Confidence to achieve 2023 outlook Raising FY 2023 net sales guidance on confidence in plan 0} { $460 - 480mm 18 - 20% 2023E net sales 2023E adjusted EBITDA! margin Year-to-go net sales bridge ($mm) Year-to-go adjusted EBITDA margin bridge 22% - 25% 18% — 20% $373.7 -$393.7 $460 -$480 $86.3 i | | H
Slide 26: Takeaways
Takeaways 4 Healthy consumer demand ce Double-digit topline growth 2 Raising 2023 net sales a guidance 26 ~ BEAUTYHEALTH
Slide 27: Andrew Stanleick Liyuan Woo
Andrew Stanleick Liyuan Woo President & Chief Executive Officer Chief Financial Officer + BEAUTYHEALTH
Slide 28: Appendix
Appendix + BEAUTYHEALTH
Slide 29: Reconciliation of gross margin to adjusted gross margin
Reconciliation of gross margin to adjusted gross margin Three months ended March 31, (gmm) 2023 2022! Net sales $86.3 $75.4 Cost of sales 32.2 24.5 Gross profit (GAAP) $54.1 $50.9 Gross margin (GAAP) 62.7% 67.5% Adjusted to exclude the following: Write-off of discontinued and obsolete product 3.0 -
Slide 30: Reconciliation of net income to adjusted EBITDA
Reconciliation of net income to adjusted EBITDA Three months ended March 31, ($mm) 2023 2022" Net sales $86.3 $75.4 Net income (loss) ($22.3) $31.5 Adjusted to exclude the following: Change in fair value of warrant liability 1 (62.1) Amortization expense 44 37 Loss on disposal of assets o4 08 Stock-
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+ BEAUTYHEALTH