Slide 1: Q2 2022 Earnings Presentation
Q2 2022 Earnings Presentation August 2022
Slide 2: Disclaimer
Disclaimer Cautionary Statement Regarding Forward-Looking Statements Reconciliation of Non-GAAP Financial Measures Statements in this presentation that are not historical, are forward-looking statements made pursuant to the safe The financial information and data contained in this presentation have
Slide 3: Our ambition: global multi-brand beauty and wellness platform
Our ambition is to build a global best-in-class beauty and wellness multi-brand platform by creating, acquiring, accelerating, and scaling the next generation of high-growth, purpose-driven brands
Slide 4: Beauty is a proven and resilient, high-growth and highly profitable market
Beauty is a proven and resilient, high-growth and highly profitable market Massive addressable market with attractive category dynamics... Global market % of BPC 2021-2023 size¹ market¹ CAGR¹ Key drivers of industry growth: Skincare $155bn 29% 7.0% Shifting desire for quality over price. $66bn 12%
Slide 5: Highly fragmented market with growth driven by independent brands
Highly fragmented market with growth driven by independent brands New consumer trends and technology are driving an explosion of new independent brands Clear opportunity to aggregate emerging brands under a new platform to accelerate growth and scale ’21 market share and change (’15 – ’21)1 Disrupto
Slide 6: Operational scale of a multi-brand platform built for growth and profitability
Operational scale of a multi-brand platform built for growth and profitability Balanced portfolio in structurally attractive segments of the category Expertise in managing and scaling global beauty brands Asset light efficiency vs. slow, inflexible, and costly traditional structures Market responsiv
Slide 7: US Premium Beauty showing consistent growth and resilience
US Premium Beauty showing consistent growth and resilience YTD BEAUTY YTD MAKE UP YTD SKIN CARE +17.3% +20.0% +11.6% Q2 BEAUTY Q2 MAKE UP Q2 SKIN CARE +15.9% +18.5% +12.3% Women are gradually returning to their Growth of skincare driven by previous makeup habits. premiumization. Bolstered by rise of
Slide 8: Our starting point: Obagi Skin Care and Milk Makeup
Our starting point in building this vision are OBAGI Skin Care and Milk Make up 8
Slide 9: The leading physician-dispensed brand
The leading physician-dispensed brand Attractive growth potential and strong anchor capabilities in skin health, complemented by a robust financial and operational backbone
Slide 10: Leading clean make-up brand with a cult following among Gen-Z
Leading clean make-up brand with a cult following among Gen-Z consumers known for its cultural relevance and iconic products Anchored by strong community following with significant growth opportunities 10
Slide 11: This is only the beginning…
This is only the beginning… TODAY Strong brand High consumer Differentiated Growing Sustainable long- Management identity and affinity offering and omnichannel term growth team with deep equity positioning presence operating experience FUTURE Optimized multi-brand portfolio spanning: CAT
Slide 12: First Half 2022 Overview
i - First Half 2022 RWerview
Slide 13: 2Q22 combined financial profile
+ 2Q22 combined financial profile1 Net sales ($mm) Gross profit ($mm) Pro Forma Adj. EBITDA2 ($mm) OBAGI stand-alone OBAGI stand-alone OBAGI stand-alone $77,122 Milk stand-alone Milk stand-alone Milk stand-alone $21,889 +23.8% $21,820 $62,298 $20,506 $57,937 +38.6% $5,388 +34.1% $11,265 $15,795 $13,
Slide 14: 1H2022 Waldencast Pro Forma Key Highlights
1H2022 – Waldencast Pro Forma Key Highlights Pro Forma Adjusted Net revenue Gross Margin EBITDA2 $138.2M 73.8% 23.5% (+24.6%) (+294 bp) (+28.2%) OBAGI MILK Continued growth on core US physician Growth outperforming US market1 driven by dispensed business core and innovation Strong international grow
Slide 15: Waldencast Group 1H 2022 Key Financials
Waldencast Group – 1H 2022 Key Financials 2 Source: Company fillings 1OBAGI financials exclude China; 2 Central costs represents Waldencast Acquisition Corp. expenses for 2021 and forecasted expenses for central overhead for 2022. 3Reconciliations of Pro Forma Adjusted EBITDA to net income, the most
Slide 16: Waldencast fully diluted share count
Waldencast fully diluted share count, conservatively including existing allocated but unvested tranches Waldencast capitalization table positions the company for success Diluted share count calculation (assuming closing share price on 07/29/22) Summary of investor lock-up agreements Shares • 1.8mm (
Slide 17: Waldencast Pro Forma Net Debt and Ownership
Waldencast Pro Forma Net Debt and Ownership Pro Forma Net Debt at June 30, 2022 and Terms Total Financing Line Available (Term + Revolver) $225 Pro Forma Gross Debt $186 Pro Forma Net Debt $142 Term Loan Terms SOFR + 3.6% Ownership at Transaction Close Obagi Shareholders 26.3% Milk Shareholders 19.6
Slide 18: Obagi
Slide 19: Obagi: $99.7M 1H 2022 Net revenue
$99.7M +18.1% $56.6M +10.9% 1H 2022 1H 2022 Q2 2022 Q2 2022 Net revenue1 Net revenue growth Net revenue1 Net revenue growth 77.1% 24.4% 80+ #1 1H 2022 1H 2022 Patents worldwide2 perceived best Gross Profit Pro Forma Adj. EBITDA4 performing brand among US +201 BPS vs. YA -374 BPS vs. YA providers3 1
Slide 20: Obagi Growth Strategy: Grow Core Medical + add more
OBAGI GROWTH STRATEGY Grow Core Medical 1. Expand US physician penetration 2. Expand breadth and depth of portfolio 3. Expand US and international footprint + add more 1. Capture opportunities in the device market 2. Build an accessible consumer proposition
Slide 21: US Physician Dispensed
US Physician Dispensed US PHYSICIAN REVENUE FROM DISPENSED NEW ACCOUNTS +8.3% +$1.4m NET SALES vs YAGO NET SALES YTD PENETRATION TODAY 35%-40% Of US DERMS Source: H1 2022 vs. H1 2021 Obagi Internal Sales Data 21
Slide 22: Expand Depth and Breadth of Portfolio: Award Winning Hero
Expand Depth and Breath of Portfolio – AWARD WINNING HERO 1H SALES RANK ACCOUNT PENETRATION BEAUTY AWARDS #2 +7.9% 2 ACROSS ALL NEW PHYSICIAN CHANNELS AWARD CHANNEL SEALS Source: LTM end of June 2022 vs. FY2021 Obagi Internal Sales Data. Published awards.
Slide 23: Expand Depth and Breadth of Portfolio: Innovation
Expand Depth and Breath of Portfolio - INNOVATION 1H SALES RANK ELASTIDERM FRANCHISE GROWTH #4 +38% PHYISICIAN CHANNEL Source: Obagi internal sales data. Results based on a 2021 12-week blinded study. Phots are not retouched. Results may vary.
Slide 24: International South-East Asia
INTERNATIONAL SOUTH-EAST ASIA +45.9% +81% $9.2BN #1 BRIGHTENING GROWTH GROWTH MARKET GLOBALLY DRIVERS • LAUNCH OF OBAGI CLINICAL® ENTRY PRICE POINT RANGE • TAILORED NPD SCAR CREAM FOR ASIA PACIFIC • LAUNCH OF D2C STRATEGY + AMAZON STRATEGY Source: H1 2022 vs. H1 2021 Obagi Internal Sales Data. Eurom
Slide 25: Digital Footprint
Digital Footprint 2022 Q2 VS Q1 +41% Source: H1 2022 vs. H1 2021 Obagi Internal Sales Data.
Slide 26: Milk Makeup
» Milk MAKEUP
Slide 27: Milk Makeup Key Figures: 1H 2022
MILK MAKEUP KEY FIGURES: 1H 2022 $38.5M +45.0% $20.5M +82.0% 1H 2022 1H 2022 Q2 2022 Q2 2022 Net revenue1 Net revenue growth Net revenue1 Net revenue growth 65.3% 21.0% +48.1% Top 10 1H 2022 1H 2022 YTD Consumption Face Primers Gross Profit Pro Forma Adj. EBITDA4 vs Selective Beauty Make- Setting Sp
Slide 28: Our Growth Roadmap
OUR GROWTH ROADMAP KEY GROWTH LEVERS GROW AWARENESS + COMMUNITY DELIVER BREAKTHROUGH INNOVATION EXPAND + INTERNATIONALIZE DISTRIBUTION 6
Slide 29: Strong growth in community and core products 1H 2022
A STRONG GROWTH IN COMMUNITY + CORE PRODUCTS 1H 2022 AWARENESS + COMMUNITY GROWTH STRONG CORE PRODUCT GROWTH 2.1M Followers4 582K Followers4 Hydro Grip Primer Hydro Grip Spray Lip + Cheek Matte Bronzer 196.9M #milkmakeup $18 (mini) / $36 (full size) $20 (mini) / $36 (full size) $21 $21 views +22% Cl
Slide 30: Looking ahead: significant consumer and platform opportunities
LOOKING AHEAD: SIGNIFICANT CONSUMER + PLATFORM OPPORTUNITIES CONSUMER EXPANSION OPPORTUNITIES NEW PLATFORM OPPORTUNITIES Objective: Grow awareness across all consumer segments GEN-Z MILLENNIAL GEN-X BOOMER 100 Index1 84 Index 68 Index 60 Index 1 Survey conducted June 11-21, 2020 with female particip
Slide 31: Delivering breakthrough innovation
DELIVERING BREAKTHROUGH INNOVATION NEW LAUNCHES +29% 1H 20221. STRATEGY TO REINFORCE CORE CATEGORIES MASCARA + PRIMER BEFORE NEW CATEGORY EXPANSION Top 3 Primer since launch at Sephora USA2 ¹ Milk internal sales data ; 2 Sephora management;
Slide 32: New Pore Eclipse Primer at Sephora
NEW PORE ECLIPSE PRIMER N3 AT SEPHORA, INCREMENTALLY TO HYDRO THE BRAND HISTORICAL #1 PRIMER BY ADRESSING AN UNMET NEED STRENGTHENING MILK’S POSITION ON THE CORE PRIMER CATEGORY +65% YTD1 NEW #1 Primer Top 3 Sephora 1 Primer Sephora 1 1 Sephora management; 2 Milk internal sales data
Slide 33: More to come: significant category expansion opportunities
MORE TO COME: SIGNIFICANT CATEGORY EXPANSION OPPORTUNITIES MILK GROWTH TO DATE DRIVEN BY ANCILLARIES AND LOW BARRIER CATEGORIES. NOW READY FOR FACE EXPANSION, THE BIGGEST MAKE UP CATEGORY. Milk Makeup has the opportunity to grow Active + Whitespace Milk Categories1 through innovation and launches Es
Slide 34: Expand and internationalize distribution
EXPAND + INTERNATIONALIZE DISTRIBUTION SIGNIFICANT WHITE SPACE WITHIN THE USA AND INTERNATIONALLY Current Milk Presence in Brick & Mortar Expansion Opportunity ~200 of ~1,300 of 6,200+ 2,900+ milkmakeup.com only ships to the U.S. today Tremendous whitespace for untapped department store + e-commerce
Slide 35: H2 2022: Expanding brand presence domestically and abroad
H2 2022: EXPANDING BRAND PRESENCE DOMESTICALLY AND ABROAD BOTH BRICK & MORTAR AND PURE PLAYER. USA EXPANSION INTERNATIONAL EXPANSION 2021 Doors: 200 #4 MAKE-UP MARKET GLOBALLY 1H 2022 Doors: 400+ FY 2022 Proj. Doors: 600 Launch USA: June 2022
Slide 36: Building a strong foundation for D2C growth
AND BUILDING A STRONG FOUNDATION FOR D2C GROWTH . MilkMakeup.com +30.8% +17.1% +14.9% 1H 2022 1H 2022 1H 2022 revenue growth1 Conversion Rate2 Transactions2 Q1 +18.9% Q2 +49.7% +10.6% +16.1% Coming 2H 1H 2022 1H 2022 Live SMS Average Order Value2 Returning Users2 Loyalty New Shade Finder Amazon Pay
Slide 37: Waldencast commitment to exemplary ESG
Waldencast commitment to exemplary ESG WE PLEDGE TO DONATE 1% OF ALL MILKMAKEUP.COM SALES TO THE CENTER SKINCLUSION More Sustainable shipping & Outer Packaging MMU social philanthropy focuses on self-expression Public Company Best in Class governance with Best In and equality for underrepresented LG
Slide 38: Operational scale of a multi-brand platform built for growth and profitability
Operational scale of a multi-brand platform built for growth and profitability Balanced portfolio in structurally attractive segments of the category Expertise in managing and scaling global beauty brands Asset light efficiency vs. slow, inflexible, and costly traditional structures Market responsiv
Slide 39: Appendix
Appendix
Slide 40: H1 2022 - Pro Forma Adjusted EBITDA reconciliation
H1 2022 - Pro Forma Adjusted EBITDA reconciliation 1H22A 2Q22A 1Q22A Waldencast Waldencast Combined Waldencast Combined (in thousands) Obagi Milk Acquisition Corp Combined Waldencast Obagi Milk Acquisition Corp Waldencast Obagi Milk Acquisition Corp Waldencast Net income/(loss) (2,915) 4,961 5,791 7
Slide 41: FY 2021 - Pro Forma Adjusted EBITDA reconciliation
FY 2021 - Pro Forma Adjusted EBITDA reconciliation FY21A 2Q21A Waldencast Combined Waldencast Combined (in thousands) Obagi Milk Acquisition Corp Waldencast Obagi Milk Acquisition Corp Waldencast Net income/(loss) (70) (7,847) (14,428) (22,345) 12,355 918 (1,551) 11,722 Cumulative Pro Forma Adjustme