Bath & Body Works, Inc. · NYSE:BBWI
Bath & Body Works — L Brands — Investor Presentation (July 2021)
90 slides from Bath & Body Works's investor presentation, Jul 19, 2021
Slide 1: Investor Presentation
VICTORIA'S SECRET &CO, Investor Presentation ~ ~ =
Slide 2: Forward Looking Statements
Forward Looking Statements Safe Harbor Statement Under the Private Securities Litigation Reform Actof 1995 : We caution that any forward-looking statements (as such termis definedin the Private Securities Litigation Reform Act of 1995) containedin this presentation or made by our Company or our mana
Slide 3: Forward Looking Statements
Forward Looking Statements Safe Harbor Statement Under the Private Securities Litigation Reform Actof 1995 + significanthealth hazards or pandemics, which could resuttin closed factories, reduced workforces, scarcity of raw materials, + andscrutiny or embargoing of goods producedin infected areas; +
Slide 4: Speakers
Speakers Martin Waters Chief Executive Officer | VS&Co Amy Hauk Chief Executive Officer | Victoria’s Secret PINK Gregory Unis Chief Executive Officer | Victoria's Secret Beauty Timothy Johnson Chief Financial Officer | VS&Co BradKramer EVP Finance | VS&Co VS&Co
Slide 5: Agenda
VS&CO 2. Lines of Business VS Lingerie PINK VS Beauty 3. Channels Digital North America Stores International 4. Financials & Growth Opportunities 5. Appendix
Slide 6: New Era. New Opportunities.
New Era. New Opportunities. An All New Victoria’s Secret. Revolutionizing Our Brand We've repositioned the brand because we lost relevance with the modern woman. She's told us to change our focus; from telling her what's sexy and how to look... to being there to help her craft the story she wants to
Slide 7: Purpose Driven, Inclusive, Authentic & Inspiring
Purpose Driven, Inclusive, Authentic & Inspiring Visio al To be the world’s leading advocate for women Purpose Mission Inspire women around the Create lifelong relationships with world with products and women by reflecting their stories, experiences that uplift and journey and community championthem
Slide 8: Our Journey
Our Journey Three Phases e 2009 — 2015 Growth Years 2016 — 2019 Execution Missteps 2020 — 2021 Rebuilding the Foundation VS&Co
Slide 9: We Will Pursue Four Key Pillars
We Will Pursue Four Key Pillars to Activate the New Victoria’s Secret Brand BRAND REVOLUTION VS COLLECTIVE ENTERTAINMENT AGGREGATION Transform branding & Convene accomplished Create a digital VS Continue to build our creative to align to our women on behalf of all branded entertainment Brands We Lov
Slide 10: The Brand Revolution Started in January with New Imagery & Messaging
The Brand Revolution Started in January with New Imagery & Messaging VALENTINE’S DAY SWIM LAUNCH SPRING MOTHER’S DAY Arefresh of visual touch points for the new Victoria’s Secret We design a highly emotional product, not a commodity Fresh & Optimistic Emotional Content To Authentic & Natural Diversi
Slide 11: The VS Collective
The VS Collective "1
Slide 12: The VS&Co Investment Opportunity
The VS&Co Investment Opportunity Two category- defining intimates and beauty brands with clearly defined purpose, mission and vision K°7 Scaled, profitable Y N_ andright-sized store footprint Global brand D) awarenessand 4 impressive customer satisfaction scores Tightly controlled $ and highly afl r
Slide 13: Comprehensive Global Business with Unparalleled Scale
The VS&Co Investment Opportunity Comprehensive Global Business with Unparalleled Scale 56.18 $919 Net Sales*+ Adj. EBITDA+? $2.48 E-Commerce Business? #1 U.S. Lingerie Brand with ~20” Market ‘Share* ~27mM Total active customers in North America® ~700m ~T7m Annual Website Visits® Instagram Followers?
Slide 14: Q2 2021 Victoria's Secret Segment Sales & Operating Income Update
The VS&Co Investment Opportunity Q2 2021 Victoria’s Secret Segment Sales & Operating Income Update VS Segment Sales ($B)* VS Segment Estimated Adjusted Operating Income ($M)? $44 ~$500m Increase in sales $200+ $285m+ $0.6 Increase in adjusted operating income / if Q2'20 Q2'24 f Q2'21E 4 VS&Co
Slide 15: Large and Growing Addressable Markets
The VS&Co Investment Opportunity Large and Growing Addressable Markets 2021 - 2025 CAGR 6% a 2006 - 2021 CAR a = Global Intimates 3% a = _ ise $142 Apparel ($B) _—_———,,. 2 site $113 Size $97 $101 $100 $75 2006 2015 2016 2017 2018 2019 2020 2024 2022 2023 2024 2025 2021 - 2025 cAGR osc 8% 2007 - 202
Slide 16: Leading Net Promoter Score, Awareness & Scale
4k The VS&Co Investment Opportunity Leading Net Promoter Score, Awareness & Scale Lingerie NPS Score (3), Brand Awareness Score (%) ' 1 1 Victorias | 1 SECRET | Ss mans moos | PINE oes | pe 29%; 89° ae 1 53% 86% 1 1 I 1 1 1 I z 1 ‘ ad ' 1 Se asian" Lene ene e nee ee 1 Ls INKLEIN 3 2 CALVIN KLEIt 23
Slide 17: Strong Customer Loyalty Extends Across Brands
4k The VS&Co Investment Opportunity Strong Customer Loyalty Extends Across Brands Brand Affinity Drives Customer Engagement & Repeat Purchases ~27m ~57% ~45% Total active customers in of active customers have of customers shop across multiple North America shopped online in last year Lines of Busine
Slide 18: Growing Digital Business
£ The VS&Co Investment Opportunity Growing Digital Business Strong Online Penetration Digital Sales ($B) $24 $2.2 ~ 50” $17 SL7 “ee || | | |] 2018 2019 2020 Q1'21 TT ~4Q% 2 Digital Penetration? (%) PINES 4a% 43% ~40” 24% 25% VICTORIA'S SECRET | | | | BEAUTY 2018 2019 2020 Q1'21TTM 18 VS&Co
Slide 19: Broad-Based Store Portfolio
ww The VS&Co Investment Opportunity Broad-Based Store Portfolio Broad-Based Store Portfolio OTHER? AMALLS Total North America Storest 867 C MALLS B MALLS ~94% of North America stores are cash flow positive? ~$0.9mM North America average cash flow per store? Average lease term remaining is* ~3.8 year
Slide 20: Our Business is Supported by an Agile Supply Chain
Our Business is Supported by an Agile Supply Chain ee Ability to quickly respond to shifting consumertrends G Impressive re-order speeds across product categories QO Long-term supplier relationships f, Diverse supplier relationships LY” Distribution flexibility VS&Co
Slide 21: Continued Execution Against Profit Improvement Plan
[n$ The VS&Co Investment Opportunity Continued Execution Against Profit Improvement Plan el Reorganized corporate office Al Merchandise margin rate expansion i) Improved store profitability f&3 Restructure international segments On Track to Deliver Expected Profit Improvement Annualized Savings of:
Slide 22: Highly Talented Management Team with Deep Industry Experience
aa ror re \a? The VS&Co Investment Opportunity Highly Talented Management Team with Deep Industry Experience ee ee ‘Amy Hauk Greg Unis Becky Behringer Ishan Patel ‘Arun Bhardwaj ‘Tim Johnson Chief Executive Chief Executive Store Selling Chief Digital International Chief Financial Officer, PINK Offic
Slide 23: Victoria's Secret & Co. Board of Directors
a8 \a? The VS&Co Investment Opportunity Victoria’s Secret & Co. Board of Directors DonnaJames Managing Director, Lardon & Associates LLC Chair of the Board Irene Chang Britt Former President, Pepperidge Farm Senior Vice President, Global Baking and : - Sarah Davis Former President, Loblaw Jacqueline
Slide 24: Company Overview
Company Overview Channels Digital North America Stores International Financials & Growth Opportunities Appendix VS&CO 24
Slide 25: #1 in Intimates...
#1 in Intimates... with Renewed Strong Momentum AOS catagories if . i Ss Martin Waters Chief Executive Officer | VS&Co VS&Co, Sic ae =
Slide 26: Market Leader with Powerful & Deep Customer Connections to Drive Growth
Market Leader with Powerful & Deep Customer Connections to Drive Growth a U.S. Intimate Apparel Market Share? $2.7B Retail Sales? ~50” of Total North America VS Sales? ~ 50” Sales from Digita2+ 98” 0 Global Brand Awareness Among U.S Women (13 - 39 Years)® Bras Panties Swimwear 26 VS&Co
Slide 27: VS Lingerie Key Pillars
VS Lingerie Key Pillars Elevating Assortment Architecture Repositioning the Brand Enhancing Customer Experience Simplifying Operating Model aT
Slide 28: VS Lingerie: Elevating Assortment Architecture
VS Lingerie Key Pillars Elevated / Emotional Product Moving From Basics to Fashion Re-enforce good, better, best principles Superior quality and fit Shift to product storytelling and tiering stores based on product attributes vs. store volume and space 40% choice count reduction through last few yea
Slide 29: VS Lingerie: Enhancing Customer Experience
VS Lingerie Key Pillars Relentless Focus on Execution Customer-centric omni experience Focused training on product knowledge and elevated selling Elevated selling experience with bra fit experts Significantly improve digital capability in user experience and fulfillment VS&Co Enhancing, Customer Exp
Slide 30: VS Lingerie: Repositioning the Brand
VS Lingerie Key Pillars Drive Growth & Maintain #1 Lingerie Market Position Inclusive communication and branding to strengthen customer loyalty Emotional connections with customers Brand evolution to remain modern and relevant Leverage VS Collective Repositioning, the Brand VS&Co 30
Slide 31: VS Lingerie: Simplifying Operating Model
VS Lingerie Key Pillars Re-build the Operating Model for Speed and Simplicity Focus on buying calendar, processes and planning of products Speed and agility, with development cycle of <15 weeks Assortment improvements and disciplined inventory management drive elevated margin rates in key categories
Slide 32: Growth from the VS Lingerie Additional Growth Initiatives
Ld Growth from the VS Lingerie cre — Additional Growth Initiatives I < Aggregation New designer / brand partnerships to further develop Brands in 2021 & Beyond ) Opportunities We Love platform pS Grounded in bra fit technology > Swim ‘Strong core plus fashion business (Re-introduction) Focus on freq
Slide 33: Let's Take a Closer Look
A a 2 L * ae i Let’s Take a Closer Ei
Slide 34: PINK
IPILINIEK ...Creating Meaningful Products & Experiences that Celebrate Our Customers and Their Communities a Amy Hauk Chief Executive Officer | Victoria's Secret PINK VS&CO
Slide 35: Let's Take a Closer Look (video)
Let’s Take a Closer Lo VIDEO VS&Co
Slide 36: PINK
PILING PINE We believe in empowering and supporting young adults in everything they do. Through our core pillars of people, purpose, and planet, we’ve got their back beyond the product that’s on it. #1 Intimates Mindshare* $2.08 Retail Sales? ~35% of Total North American VS Sales?? ~40" A Sales from
Slide 37: PINK Key Pillars
IPILINIES Key Pillars Standing For Our Brand Values: People, Purpose, Planet Deliveringon Innovation Pipeline Leveraging Stores & Digital Adhering To Retail Disciplines 7
Slide 38: PINK: People, Purpose, Planet
IPILINIES Key Pillars Peopie Promoting diversity, equity and inclusion with our customers, associates and campus reps Investing in tomorrow's leaders Purpose Supporting mental health awareness through JED Foundation partnership Empowering others through PINK with purpose project contest Planet Goal
Slide 39: Making products customers can feel good about
Making products that our Fostering positive mental health and customers can feel good about. supporting our broader community.
Slide 40: PINK: Leveraging Stores & Digital
IPILINII Key Pillars Maintain best-in-class store performance and productivity Relaunching PINK Nation App in 2022. evolving program and benefits Highly connected with Gen Z: * Instagram engagement ~8x industry benchmark? * 2021 TikTok challenges: 9B+ total global campaign views Leveraging, Stores &
Slide 41: PINK: Delivering on Innovation Pipeline
IPILINIIE Key Pillars Revamping bra product line with fashion/innovation across Wear Everywhere, Sports Bras, Bralettes Innovation in panties with Period Panty launch Ability to quickly adaptto seasonal trends Relaunch of swim assortment in 2021 Delivering on (gym-to-swim since 2019) Innovation Pipe
Slide 42: PINK: Adhering to Retail Disciplines
PINK Key Pillars Simplified, streamlined process through omnichannel execution Robust testing agenda Edit to focus Aligned to key retail principles: * Know the brand and competition; Adhering To * Connect with the customer through - Retail storytelling; Disciplines * Focus on sales optimization; * M
Slide 43: PINK Additional Growth Initiatives
PILING Additional Growth Initiatives Logo Shop PINE #1 franchise - continue to make big bigger through fashion and silhouette newness in 2021 & Beyond 5 Lounge PINK for All- gender neutral styles including sweat sets and one-size. Launched Q1 2021 (30% of our styles are fitfor gender fluidity) Varsi
Slide 44: Let's Take a Closer Look (video)
Let’s Take a Closer Lo VIDEO VS&Co
Slide 45: #1 Fragrance Brand in America...
—_ #1 Fragrance Brand in America... An Established & Proven Market Leader With Growth Potential VS Beauty Gregory Unis Chief Executive Officer | Victoria's Secret VS&CO
Slide 46: VS Beauty brands overview
Fraganies Brana miamienea® Fine Fragrance Mist & Body Care PINK Beauty #1 ~$0.9B Bombshell is America’s #4 Fragrance? “15% — | ~40% of Total North American VS Sales? Retail Sales? Sales from Digita2+ company data Euromoniter. 2 North America Stores andDigital Reailsales as of Q1'21 TTM period ending
Slide 47: VS Beauty Key Pillars
VS Beauty Key Pillars Extending Market Leadership Creating Cohesive Customer Journey Across Brands Defining Our Clear Competitive Advantage Growing Extensions & Adjacencies aT
Slide 48: VS Beauty: Extending Market Leadership
VS Beauty Key Pillars #1 Fragrance Brand in America, headlined by Bombshell Own 6 of top 30 Fragrances? Fine Fragrance anchored in five iconic collections with complementary mists and lotions Extending, Market Leadership VS&Co 48
Slide 49: VS Beauty: Defining Our Clear Competitive Advantage
VS Beauty Key Pillars Scaled direct-to-consumer fine fragrance brand Balanced assortment architecture - balancing value with benefits Strategic supply chain leverages Beauty Park campus in central Ohio for speed, agility and growth Defining Our Clear Competitive Advantage 49 VS&Co
Slide 50: VS Beauty: Creating Cohesive Customer Journey
VS Beauty Key Pillars Strong brand integration with Lingerie and PINK Customers who purchase beauty shop more frequently and spend more annually than the average customer Omni channel business with a digitaltirst mindset, enhanced by an immersive store experience Creating Cohesive Customer Journey A
Slide 51: VS Beauty: Growing Extensions & Adjacencies
VS Beauty Key Pillars Core portfolio with opportunity to grow extensions and adjacencies Within PINK Beauty, build awareness in Body Care and create an elevated scent experience Enhance brand positioning with curated Home Fragrance launch, creating a holistic experience Growing LAYS, Extensions & Ad
Slide 52: VS Beauty Additional Growth Initiatives
VS Beauty Additional Growth Initiatives in 2021 & Beyond PINK Beauty (Body Care) Home Fragrance Natural Beauty VS & PINK Launched first collection this spring with Growth through expansion of new product initial results exceeding expectations forms and offerings within existing core product lines, c
Slide 53: Let's Take a Closer Look (video)
— al Let’s Take a Closer Look... VIDEO VS&CO
Slide 54: Agenda
VS&CO 1. Company Overview 2. Lines of Business VS Lingerie PINK VS Beauty 4. Financials & Growth Opportunities 5. Appendix 54
Slide 55: Delivering Across Diversified Channels
Delivering Across 53% NA Stores Q1°21TTM Net Sales! $3.2B Diversified Channels 40% Digital” $2.4B y 7% InternationaP $0.4B 867 store locations ~94% of stores are cash flow positive Flexible lease structure with average remaining term of ~3.8 years Highly profitable business ~700M annual website visi
Slide 56: Digital
Digital Seamless and Personalize Digital Experience Interconnected digital platiora creates! enduring customer relationshig 4 see
Slide 57: Large, Highly-Profitable & Growing Digital Business
Large, Highly-Profitable & Growing Digital Business ~$400M investment over the last five years: Modernized the digital platform State-of-the-art distribution centers Omni-channel focus Increasing use of Al-driven commerce Digital Sales ($B) $24 $22 : : LJ 2018 2019 2020 Q1'21TT™ Digital Penetration?
Slide 58: Powerful Digital Marketing Strategy Driving Consumer Engagement
Powerful Digital Marketing Strategy Driving Consumer Engagement ~T77m ~45m ~15m ~21m Followers on Instagram Followers on Facebook Total Email Fil (VS & PINK) (VS & PINK) Active Digital Customers otal Email File 6.2m 5.5m 45% Active PINK Nation Active VS App Customers Customers Organic Traffic 58 VS&
Slide 59: Our Interconnected Digital Platform Creates Enduring Customer Relationships
Our Interconnected Digital Platform Creates Enduring Customer Relationships Seamless and Personalized Journey Across Touchpoints START Engages via Personalized email content social media © pre and post transaction Omni experience in stores | Customer care Browses and shops for online and = | Downloa
Slide 60: Elevating the Digital Experience
Elevating the Digital Experience Personalized Approach Tailoring experiences for her creates lasting loyalty Creating customer-centric, timely & relevant experiences Driving qualified traffic & conversion ly Seamless Omni-Channel Experience Omni-channel empowers her to select the most convenient opt
Slide 61: North America Stores
North Americ? oe "EE Unique, Engaging In-Store, Experience Differentiated retail experience Signature bra fit experience Modern, feminine feel VS&Co
Slide 62: Profitable & Evolving Retail Footprint
Profitable & Evolving Retail Footprint ~$0.9mM North America average cash flow per store® Broad-Based Store Portfolio: ~94% of North America Stores Cash Flow Positive ~ 3 . 8 YEARS Average NA remaining lease term? 241 Targeted, permanent store closures completed during 2020 OTHER? AMALLS Total North
Slide 63: Optimizing Real Estate Footprint to Drive Growth & Profitability
Optimizing Real Estate Footprint to Drive Growth & Profitability Victoria’s Secret North America Store Count S) IG 1143 1091 Completed negotiations with majority of landlords Flexible lease 871 867 to address COVID structure & continued disruption and secured pathway to further meaningful rent store
Slide 64: Refreshing Existing Locations in 2021
Refreshing Existing Locations in 2021 Investing in a more modern, efficient store base through space optimization & store refresh projects FRONT OF STORE PINK BEAUTY ROOM Utilizing low-cost and light touch approach on current store fleet Updating stores to evolve with the brand Addressing aged fixtu
Slide 65: Go-Forward Physical Retail Strategy
Go-Forward Physical Retail Strategy FleetInvestment Refreshing existing stores and € Store Talent _ !nvestingin field talent & & Rationalization — building the stores of the future leadership development Enhancing in-store, online ordering process 3 omni-channet ‘All Profitapitity Store labor optimi
Slide 66: Let's Take a Closer Look
na Let’s Take a Closer Looks ely VS&Co
Slide 67: Positioned for Long-Term, Global Growth
Positioned for Long-Term, Global Growth ’ ‘ <
Slide 68: International Business Evolution
International Business Evolution 70+ Countries Across the World 200% 2008 2010 20 2012 2013, 2014 2015 2016 2017-2018 2019 2020 Victoria's Secret Beauty B ntored Qotar, Costa Rice, 3 ™ Assortment Batra, Russia, Paname, x Turkey, Jorden, Omen, * Macau, Saudi Arabia, EntereaHong Kong, Entered hile, En
Slide 69: Successful International Operating Model
Successful International Operating Model International retail sales present future upside opportunity ~$0.48 Recognized revenue? ~$1.0B Retail sales? Diverse operating models capture opportunity across markets and channels » Franchise - Royalty-based model on Retail Sales + Travel Retail - Wholesale
Slide 70: We Have Restructured Key International Segments
We Have Restructured Key International Segments Geography Key Initiatives Path Forward UK/Ireland = Partnered in a JV with Next UK, after Leverage JV with one of the best a restructuring process that retailers in UK to access scale transformed the business model and capabilities, and build best- wit
Slide 71: Victoria's Secret International
Victoria’s Secret International Number of Stores 128 Europe Americas 1116 Y Middle East / Africa Asia VS&Co 520 Retail Locations as of Qt 2021 70* Operating Countries n
Slide 72: International Business: Poised For Significant Growth
International Business: Poised For Significant Growth Franchise Profitable growth driven by new store expansion and partner digital across key geographies Travel Retail Recovery fueled growth in key regions such as Europe/Americas and significant growth opportunity in China International Digital Con
Slide 73: Agenda
VS&CO . Company Overview Lines of Business VS Lingerie PINK VS Beauty . Channels Digital North America Stores International . Appendix 73
Slide 74: Recent Actions Have Driven Significant Improvement & Strong Performance
Recent Actions Have Driven Significant Improvement & Strong Performance... Adjusted EBITDA ($M), 2018 - Q1 2021 TTM* “$425m $899 Adjusted EBITDA improvement $919 $493 $425 | UJ i 2018 2019 2020 @ Q1'24 QL'21 TTM ($188) Adj. EBITDA Rate: 11% 7% 8% (24%) 20% 15% 74
Slide 75: ...And Momentum is Continuing
...And Momentum is Continuing VS Segment Estimated Adjusted Operating Income ($M)? S285m+ 1 $200+ Increase in adjusted operating income a Q2'21E 75 VS&Co
Slide 76: Delivering Significant & Sustainable Adjusted EBITDA Improvement
Delivering Significant & Sustainable Adjusted EBITDA Improvement Driven by Combination of North America Margin Growth & Execution of Profit Improvement Plan ~$600 M Expected Run Rate Improvement ~$300M driven by North America comparable margin growth - Expecting 4 consecutive quarters of comparable
Slide 77: Continued Execution Against Profit Improvement Plan
Continued Execution Against Profit Improvement Plan el Reorganized corporate office All Merchandise margin rate expansion @ Improved store profitability Restructured international segments On Track to Deliver Expected Profit Improvement Annualized Savings of: — $3 0 0 M VS&Co 7
Slide 78: Three-to-Five Year Financial Targets
‘Three-to-Five Year Financial Targets Metric Total Sales Growth Digital Penetration Operating Income Growth Operating Income Rate Target Mid-single digit ~50% High-single digit Mid-teens
Slide 79: Continued Execution Creates Opportunities for Long-Term Growth
Continued Execution Creates Opportunities for Long- Term Growth Focusing on Key Priorities td Evolve Merchandise Assortment HI and Marketing { + Inspire women around the world with products and experiences that upliftand champion them Drive Penetration and Growth in Digital Channel = + Leverage uniq
Slide 80: Financial Policy and Capital Allocation Framework
Financial Policy and Capital Allocation Framework Liquidity, Leverage & Balance Sheet Strength Targeted Investments + Launch with ~$250M in cash and + Disciplined approach to future $750M undrawn ABL investment + Strong & flexible balance sheet with low + Primary focus on core business and leverage
Slide 81: The VS Investment Opportunity
Slide 82: Thank You...
Slide 83: Investor Presentation Q&A
Slide 84: Appendix
Slide 85: Quarterly Financial Information, Fiscal 2021
Slide 86: Quarterly Financial Information, Fiscal 2020
Slide 87: Quarterly Financial Information, Fiscal 2020
Slide 88: Quarterly Financial Information, Fiscal 2019
Slide 89: Quarterly Financial Information, Fiscal 2019
Slide 90: Adjusted EBITDA Reconciliation