Sally Beauty Holdings, Inc. (name To Be Changed From Sally Holdings, Inc.) · NYSE:SBH
Sally Beauty Holdings, Inc. (name To Be Changed From Sally Holdings, Inc.) — Sally Beauty Holdings — Q3 2022 Earnings Presentation
29 slides from Sally Beauty Holdings, Inc. (name To Be Changed From Sally Holdings, Inc.)'s earnings presentation, Jun 30, 2022
Slide 1: Investor Relations Presentation
SALLY BEAUTY HOLDINGS, INC. Investor Relations Presentation As of June 30, 2022
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Statements in this presentation which are not purely historical facts or which depend upon future events may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Se
Slide 3: SBH Mission
SBH Mission To Recruit and Retain Color Customers by…. …Being the Undisputed Expert and Leader in Professional Color/Care for the DIY Consumer and Professional
Slide 4: SBH at a Glance
SBH $3.9B 14.8% $308M AT A Net Sales1 Adjusted EBITDA Margin1 Free Cash Flow1 GLANCE SEGMENTS SNAPSHOT #1 provider of professional color for home use ~ 45% owned and exclusive brands 59% of FY2021 sales Leading resource for salons and salon professionals ~ 50% owned and exclusive brands 41% of FY202
Slide 5: We Successfully Transformed Our Business
We Successfully Transformed Our Business Re-Focused the Business on Owning Professional Hair Color and Care 1 for Both the DIY Enthusiast and Professional Stylist Improved Our Retail Fundamentals 2 Advanced Our Digital Commerce Capabilities 3 Modernized Our Supply Chain 4 Improved the Shopping Exper
Slide 6: Transformation Journey 2017-2021
Transformation Journey 2017-2021 Re-Focused On Our Differentiated Core Improved Our Retail Fundamentals Advanced Our Digital Capabilities • Re-focused and enhanced our product • Launched Sally Beauty Rewards Loyalty • Deployed the new sallybeauty.com mobile- assortment around our differentiated Prog
Slide 7: Powerful Platform In Place to Drive Growth and Scale
Powerful Platform In Place to Drive Growth and Scale
Slide 8: What Makes Us Different
What Makes Us Different Authority in Professional Hair Color and Care 1 Expert in Education and Content 2 Leader in Market Share for the Professional Distribution Channel 3 4 Cosmetologists and Trained Color Experts in Stores 5 Stickiness of Customers in both Sally and BSG Sally Beauty Holdings, Inc
Slide 9: Go To Market
Go To Market Owned/exclusive brands not Mostly exclusive, third party Suppliers/ available in mass retail and professional-only brands in Vendors: some third party brands the core of color/care Distributors: Open-Line Retail Exclusive / Full-Service Distribution 3,468 stores 1,361 stores 700 consult
Slide 10: Sally Beauty Highlights
Sally Beauty Highlights Leader in professional hair color for home-use Professional open-line business – merchandise assortment focused on owned and exclusive brands not available through mass retail Sally Beauty global footprint (1) 3,468 stores worldwide 2,627 U.S. stores / 841 internati
Slide 11: Sally Beauty Product Mix
Sally Beauty Product Mix Other Beauty Items 55% of Textured Hair Hair Care sales are 6% hair color & Salon Supplies and 6% care 19% Accessories We offer a diversified 7% mix of beauty products with a focus on pro hair color and care 12% Styling Tools 36% 14% Hair Color Skin and Nail Care Sally Beaut
Slide 12: Beauty Systems Group Highlights
Beauty Systems Group Highlights Leader in the professional distribution channel in the U.S./Canada Sells exclusively to salons and salon professionals Professional exclusive / full-service business – includes merchandise assortment of premium brands sold through salons and generally not availa
Slide 13: Beauty Systems Group Product Mix
Beauty Systems Group Product Mix Other Skin and Beauty Nail Care Items Promotional Items 2% 4% 7% Styling Tools Hair Care We offer a diversified mix of 6% 37% beauty products not carried in Sally stores or mass retail 44% Over 80% of sales are hair Hair Color color/care Sally Beauty Holdings, Inc. *
Slide 14: Fiscal 2022 Strategic Growth Pillars
Fiscal 2022 Strategic Growth Pillars 1 Leverage Our Digital Platform 2 Drive Loyalty and Personalization 3 Deliver Product Innovation 4 Advance Our Supply Chain
Slide 15: Leverage Our Digital Platform
Leverage Our Digital Platform Create an Easy and Reliable Omni-Channel Platform for DIY Enthusiasts and 1 Stylists Optimize BSG’s Redesigned E-commerce Site and Fulfillment Options of 2 BOPIS and 2-Hour Delivery Connect the BSG App to the Store Network to Further Enhance BOPIS and 3 2-Hour Delivery
Slide 16: Drive Loyalty and Personalization
Drive Loyalty and Personalization 1 Drive Customer Engagement and Sales Grow Loyalty Programs: 77% of Sally US/Canada Sales From Loyalty 2 Members & 9% of BSG Sales From Rewards Credit Card (Fall 2020 Launch)(1) Sally: Recommend Product Usage, Send Reminders to Replenish, and 3 Incorporate DIY and E
Slide 17: Deliver Product Innovation
Deliver Product Innovation 1 Focus on Sustainable and Clean Products 2 Launch Sally’s New Exclusive Vivid Color Line – Strawberry Leopard Launch New Products at BSG in Color and Care Led by Olaplex’s 4C 3 Clarifying Shampoo in Q4 4 Expand Nail Category at Both Sally and BSG
Slide 18: Advance Our Supply Chain
Advance Our Supply Chain Create a Highly Automated, Integrated Best-In-Class Capabilities Across 1 Inventory Forecasting, Assortment, Pricing/Promotions, & In-stocks 2 Execute Final Phase of JDA Implementation Complete JDA Rollout to Remaining Sally Stores; BSG Stores Completed 3 4 Fully Integrate J
Slide 19: ESG Priorities
ESG Priorities Our ESG strategy focuses primarily on the areas where we believe we can have a meaningful impact: Data Employee Energy and Protection Safety Environment and Cybersecurity Diversity Product Inclusion Development Belonging and Sourcing Sally Beauty Holdings, Inc. https://www.sallybeauty
Slide 20: Financial Overview
Financial Overview Sally Beauty Holdings, Inc.
Slide 21: Consolidated Fiscal 2021 Results
Consolidated Fiscal 2021 Results Net Sales Gross Margin Gross Margin 57.9% 39.8% Operating Margin 18.3% 12.8% Sally Beauty Holdings, Inc. (1) See Addendum for a reconciliation of this non-GAAP financial measure.
Slide 22: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity Long-Term Capital Structure AMOUNT % OF ($MM) TOTAL DEBT TERM LOAN B (FY24) $408.9 37.6% 5.625% SR NOTES (FY26) $680.0 62.4% Ample liquidity TOTAL DEBT $1,088.9 100.0% $101 million of cash and cash equivalents on balance sheet(1) Long-Term Debt Maturities ($ mi
Slide 23: Steady Cash Flow Generation
Steady Cash Flow Generation SBH Free Cash Flow ($m) (1) Cash conversion (%) (2) 39% 32% 32% 41% 49% 40% 72% 54% $287 $316 $308 $254 $239 $228 $194 $202 2014A 2015A 2016A 2017A 2018A 2019A 2020A 2021A (1) Free Cash Flow defined as cash flow from operations minus capital expenditures; See Addendum for
Slide 24: Focused on Long-Term Profitable Growth
Focused on Long-Term Profitable Growth Sticky Customers 1 Growing Profitable Business Gross Margin 50%+ 2 Strong Cash Flow Generation 3 Increasing Shareholder Value Resilient Business Model Natural Hedge Between Sally & BSG Sally Beauty Holdings, Inc.
Slide 25: Capital Allocation Priorities
Capital Allocation Priorities 1 Maintain Strong Liquidity Position 2 Invest in Our Strategic Growth Initiatives 3 Optimize Our Capital Structure 4 Return Value to Shareholders Sally Beauty Holdings, Inc.
Slide 26: Strengthened Executive Management Team
Strengthened Executive Management Team Denise Paulonis Marlo Cormier John Goss Mark Spinks Olivier Badezet Senior Vice President & President and CEO Senior Vice President, CFO President – Sally Beauty Supply President - Beauty Systems Managing Director Europe Group Mary Beth Edwards John Henrich Sco
Slide 27: Key Considerations
Key Considerations 1 #1 Seller of Professional Color Globally 2 Transformed Business Model 3 Positioned to Drive Scale 4 Strong Cash Flow Generation 5 Experienced Management Team Sally Beauty Holdings, Inc.
Slide 28: Appendix
APPENDIX Sally Beauty Holdings, Inc.
Slide 29: EBITDA & FCF Reconciliation
EBITDA & FCF Reconciliation Adjusted EBITDA FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Net Earnings (GAAP) $ 246.0 $ 235.1 $ 222.9 $ 215.1 $ 258.0 $ 271.6 $ 113.2 $ 239.9 Interest expense, net of interest income 116.3 116.8 144.2 132.9 98.2 96.3 98.8 93.4 Provision for income taxes 144.7 143.4 131.1 13
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