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 — Investor Presentation (December 2015)
28 slides from Sally Beauty Holdings, Inc. (name To Be Changed From Sally Holdings, Inc.)'s investor presentation, December 2015
Slide 1: Sally Beauty Holdings, Inc. Overview
Sally Beauty Holdings, Inc. Overview December 2015 Fiscal year-end 2015
Slide 2: Cautionary Notice Regarding Forward-Looking Statements
Cautionary Notice Regarding Forward-Looking Statements • 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 Secu
Slide 3: Company Highlights
Company Highlights Sally Beauty Holdings is a leading international specialty retailer and distributor of professional beauty products Annual consolidated sales of over $3.8 billion Strong cash flow generation Approximately 4,967 stores located in 13 countries (1) Industry leading position w
Slide 4: Company Highlights: Consolidated Fiscal 2015 Results
Company Highlights Consolidated Fiscal 2015 Results Net Sales Gross Margin Segments • Retail consumers • Stores – Chair/suite rentals • 76% of sales • 65% of sales Customers • Professional stylists, small salons, • Full Service Sales - small to medium chair/suite rentals sized salons • 24% of sales
Slide 5: Company Highlights: Sally Beauty Supply Segment
Company Highlights Segment Distribution Channel 3,673 stores worldwide (1) Retail consumers (76% of sales) Customers Professional stylists (24% of sales) Sales $2.3b FY2014 SSS growth 1.7% vs. 1.3% in FY14 Financials EBIT $412m EBIT margin 17.7% (1) As of September 30, 2015, fiscal year end 2015 .
Slide 6: Company Highlights: Beauty Systems Group Segment
Company Highlights Segment Distribution 1,294 stores (1) Channel 958 direct sales consultants (1) Customers Professional stylists (chair/suite renters) Salons (via BSG’s direct sales consultants) Sales $1.4b FY2014 SSS growth 5.7% vs. 3.5% in FY14 Financials EBIT $231m EBIT margin 15.4% (1) As of Se
Slide 7: Company Highlights: Distribution and Customers
Company Highlights Open-Line Retail Exclusive / Full-Service Distribution: 3,673 stores 1,294 stores 958 consultants Customers: Professional stylists Salons ` $ Value Retail Consumers $$$ High-end SBH plays an important role in the supply chain (1) As of September 30, 2015, fiscal year end 2015 .
Slide 8: Industry Growth: U.S. Salon Industry Product Sales
Industry Growth U.S. Salon Industry Product Sales Growth of 3.1% (at wholesale $’s) $5.0 Recession $4.8 Resistant $4.5$4.6 $4.5 $4.2 Industry $4.0 $4.0 $3.7$3.8$3.8 $3.5 $3.5 $3.3$3.4 $3.1 $2.9$2.9$3.0 ($ in billions) $3.0 $2.6$2.7 $2.4 $2.5 $2.1$2.2$2.3 $2.0 $2.0 $1.7$1.8 $1.6 $1.5 $1.0 $0.5 $- 199
Slide 9: Industry Overview: Haircare Products Sales by Salon Channel
Industry Overview Haircare Products – Sales by Salon Channel At Manufacturers’ $’s (2014) – Only U.S. Mega-Salon All other Beauty Supply Manufacturer direct to Stores large-format salons Exclusive / Direct Sales 12% (2) Full-Service $0.4B Manufacturer direct to Third party distribution manufacturer-
Slide 10: Business Segment Overview
Business Segment Overview SALLYBEAUTY HOLDINGS, INC.
Slide 11: Sally Beauty: Overview
Sally Beauty : Overview Sally Beauty Supply global footprint 3,673(1) stores worldwide 2,868 stores in U.S. (including Puerto Rico) 805 stores in Canada, the UK, Ireland, Belgium, Netherlands, France, Germany, Spain, Chile, Colombia, Peru & Mexico Average store size 1,700 sq. ft., 90% sell
Slide 12: Sally Beauty: Initiatives
Sally Beauty : Initiatives Initiatives are centered-around creating points of difference in our stores, our merchandise, and our marketing Nail Studio – Highlighting vast selection Store Refresh in U.S.
Slide 13: Sally Beauty: Marketing Initiatives
Sally Beauty : Marketing Initiatives Blogger In Store Solution Guide Network Direct Mail Exterior Sign Pro Flyer Email Access Hollywood TV Morning Shows Auto-Replenish CRM Digital Targeted SB.com Beauty Box Text Video Digital Ads Social Media
Slide 14: Sally Beauty: Historical Sales
Sally Beauty : Historical Sales Sally Beauty Supply Net Sales Growth of 1.0% (1) $2,800 $2,230 $2,309 $2,330 $2,400 $2,199 $2,012 $2,000 $1,835 $1,673 $1,696 $1,567 $1,600 $1,359 $1,419 $1,208 $1,296 $1,200 $800 $400 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (1) FY2015 incl
Slide 15: Sally Beauty: Merchandise Offering
Sally Beauty : Merchandise Offering Other Beauty Items Ethnic Products 7% Hair Care 8% 22% We offer a diversified Brushes, 47% of Cutlery and Sales from mix of beauty Accessories 14% Hair Care & Color products 9% 25% Electrical Appliances Hair Color 16% Skin and Nail Care *Fiscal year 2015
Slide 16: Sally Beauty Growth Initiatives
Sally Beauty Growth Initiatives Growth Initiatives Worldwide Sally Beauty Supply Stores Expand store base organically and 4,000 3,563 3,673 3,424 3,158 3,309 through acquisitions; domestic and 2,844 2,923 3,032 3,000 2,511 2,694 international 2,000 Plan is to grow net store base approximately 1,
Slide 17: Sally Beauty Supply: International Opportunity
Sally Beauty Supply: International Opportunity Existing International Platform Long-Term Store Growth Potential (1) 805 Sally Beauty stores located in 13 countries Current Potential 112 ~250 Stores located in Canada, the UK, (Canada) Republic of Ireland, Belgium, France, the Netherlands, Germany
Slide 18: Most recent international store opening: Colombia
Most recent international store opening: Colombia, S.A. Located in high-end shopping mall Demographic is retail consumer
Slide 19: Sally store design examples
Sally store design examples Store designs vary by country and customer demographic Chile, S.A. U.S. Peru, S.A. United Kingdom
Slide 20: Beauty Systems Group: Overview
Beauty Systems Group: Overview Beauty Systems Group – 1,294(1) (professional stores & 958 professional distributor sales consultants 1,137 company-operated / 157 franchised stores (Armstrong McCall) 958 professional distributor sales consultants Average store size 2,700 sq. ft. Sells to sa
Slide 21: BSG: Strong, Consistent Financial Track Record
BSG: Strong, Consistent Financial Track Record BSG Net Sales Growth of 4.2% $1,600 $1,445 $1,505 $1,392 $1,325 $1,400 $1,257 $1,200 $1,081 $954 $945 $975 $941 $1,000 $895 $802 $800 $616 $600 $400 $200 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 BSG Same Store Sales Growth 12.
Slide 22: BSG: Merchandise Offering
BSG: Merchandise Offering Other Beauty Items Electrical Hair Care Appliances 8% 5% Skin and Nail Care 10% 35% We offer a diversified mix of beauty products not carried in Sally stores or mass retail Promotional 11% Items 33% Hair Color *Fiscal year 2015
Slide 23: BSG: Industry Growth and Growth Initiatives
BSG: Industry Growth Growth Initiatives StoreStore GrowthGrowth 1,151 1,190 1,245 1,265 1,294 1,200 991 1,027 929 Expand store base organically 828 874 800 Further penetrate existing geographies 400 Enter new territories 0 Expand gross margins as sales shift 2006 2007 2008 2009 2010 2011 201
Slide 24: Consolidated Results
Consolidated Results SALLYBEAUTY HOLDINGS, INC.
Slide 25: Summary of Recent Sr. Notes Transaction
Summary of Recent Sr. Notes Transaction Overview • On 11/18/15, entered into an underwriting agreement related to the public offering of $750,000,000 senior notes at 5.625% due 2025 • Expect the offering to close on or about December 3, 2015 • Intend to use the net proceeds from the offering to rede
Slide 26: Sales and EPS Growth for total Company
Sales and EPS Growth for total Company Sales EPS (adjusted) $3,754 (1) $3,524 $3,622 $3,834 $3,500 $3,269 $1.60 $1.53 $1.53 $1.48 $1.42 $3,000 $2,916 $1.40 $2,648 $2,637 $2,514 $1.20 $2,500 $1.07 $1.00 Flat $2,000 YoY 2.2% $0.77 $0.80 YoY $1,500 $0.60 $0.52 $0.44 $1,000 $0.40 $0.33 $0.20 $500 $0.00
Slide 27: Addendum: non-GAAP financial measure reconciliation
Addendum: non-GAAP financial measure reconciliation Adjusted EBITDA and Adjusted Net Earnings Adjusted EBITDA FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Net Earnings (GAAP) $ 44.5 $ 77.6 $ 99.1 $ 143.8 $ 213.7 $ 233.1 $ 261.2 $ 246.0 $ 235.1 Interest expense, net of interest income 146.0 159.1 132
Slide 28: Cautionary Notice Regarding Forward-Looking Statements
Cautionary Notice Regarding Forward-Looking Statements 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 Securi
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