E.l.f. Beauty, Inc. · NYSE:ELF

E.l.f. Beauty — Q1 2023 Earnings Presentation

78 slides from E.l.f. Beauty's earnings presentation, Aug 3, 2022

  1. Slide 1: Q1 FY 2023 Earnings Webcast

    Q 1 F Y 2 0 2 3 E A R N ING S WE BC A ST A U GU S T 3 , 2 0 2 2 S K I N

  2. Slide 2: Forward-looking statements and non-GAAP notice

    As a reminder, this call contains forward-looking statements that are based on management’s expectations – including those relating to the category trends and longer-term outlook – and are subject to known and unknown risks and uncertainties, and therefore, actual results may differ materially. Impo

  3. Slide 3: Tarang P. Amin, Chairman & Chief Executive Officer

    TARANG P. AMIN CHAIRMAN & CHIEF EXECUTIVE OFFICER

  4. Slide 4: Agenda: Q1 FY 2023 Results, Outlook

    A GE N D A 1 2 Q1 FY 2023 RESULTS OUTLOOK

  5. Slide 5: Fourteen Consecutive Quarters of Net Sales Growth

    FOUR TEEN C O N S E C U T I V E Q U A R T E RS O F NE T SA LE S G RO WTH +50% +27% +26% +24% +16% +13% +11% +10% +11% +7% +8% +8% +7% +3% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY 19 FY 20 FY 20 FY 20 FY 20 FY 21 FY 21 FY 21 FY 21 FY 22 FY 22 FY 22 FY 22 FY 23 NET SALES GROWTH BY QUARTER, EXCLUDI

  6. Slide 6: Q1 Results

    Q 1 R E S U LTS +26 % +390 +46 % BPS N ET S ALES GR O S S M ARG IN A DJU STE D E BITDA Q1 FY 2023 YEAR-OVER-YEAR, AS COMPARED TO Q1 FY 2022

  7. Slide 7: Cosmetics Category Trends

    C O S M E T I C S C AT E G O RY TRE NDS V S . 2 0 1 9 L EVE LS 5% 4% 0% 0% -2% -3% -5% -9% -10% -11% -14% -15% -15% -16% -18% -18% MAR 20 JUN 20 SEPT 20 DEC 20 MAR 21 JUNE 21 SEPT 21 DEC 21 MAR 22 JUN 22 CONSUMPTION $ SALES GROWTH VS. 2019 LEVELS, NIELSEN XAOC ENDING 6/18/2022, COLOR COSMETICS CATEG

  8. Slide 8: Consumption: e.l.f. Cosmetics vs. Category

    C O N S U M P T IO N + 27 % +4% E.L.F. COSMETICS COSMETICS CATEGORY YOY CONSUMPTION GROWTH. NIELSEN XAOC LATEST 12 WEEKS ENDING 6/18/2022, COLOR COSMETICS CATEGORY

  9. Slide 9: Top 5 Mass Cosmetics Brands Share vs. Year Ago

    TOP 5 MASS COSMETICS BRANDS SHARE (BPS) VS. YEAR AGO E.L.F. +120 120 90 L’OREAL MAYBELLINE +60 60 +50 30 0 -30 COVERGIRL Maybelline L'Oreal Cover -15Girl REVLON Revlon e.l.f. -25 NIELSEN XAOC LATEST 12 WEEKS ENDING 6/18/2022, COLOR COSMETICS CATEGORY

  10. Slide 10: Drivers of Q1 Performance

    DRIVERS OF Q!1 PERFORMANCE

  11. Slide 11: Core Value Proposition

    1 e.l. fan f.ing tas tic. CORE VALUE PROPOSITION

  12. Slide 12: Best of Beauty Accessible to Every Eye, Lip and Face

    BEST OF BEAUTY ACCESSIBLE TO EVERY EYE, LIP AND FACE

  13. Slide 13: Holy Grails price comparison

    H O LY GR A ILS $10 $7 $15 VS $52 VS $30 VS $42

  14. Slide 14: AUR Comparison: e.l.f. vs Legacy Mass Cosmetics Brands

    AUR COMPARISON ~ 9 $ ~ 5 $ E.L.F. LEGACY MASS COSMETICS BRANDS NIELSEN XAOC LATEST 52 WEEKS ENDING 6/18/2022, COLOR COSMETICS CATEGORY

  15. Slide 15: Extraordinary Value

    EXTRAORDINARY VALUE TeeMOGLE fee ieee co smite Pou TURE 1wewriTy TiccRraT cis Beachy - Products YouCan 35 Viral TikTok Beauty CSE AS SECON ETS | Products You Need in 2022 You don’t need to spend big bucks to get the makeup influencers rave about, Seriously By Rebecca Rovenstine, Son. 2022, 0600 AM E

  16. Slide 16: Innovation Powerhouse

    Chapter slide update 2 e.l.f.ing inn o v a t i v e . INNOVATION POWERHOUSE

  17. Slide 17: Our Superpowers

    OUR SUPERPOWERS CRUELTY CLEAN PREMIUM ACCESSIBLE BROAD FREE QUALITY PRICES APPEAL

  18. Slide 18: Leadership in Core Segments

    LEADERSHIP IN CORE SEGMENTS #1 #1 #2 #2 #2 BRUSHES PRIMERS CONCEALER EYEBROW SPONGES $ SHARE $ SHARE $ SHARE UNIT SHARE $ SHARE NIELSEN XAOC LATEST 12 WEEKS ENDING 6/18/2022

  19. Slide 19: Innovation

    🔥 INNOVATION

  20. Slide 20: Power Grip Primer, Big Mood Mascara, Glossy Lip Stain, Camo Powder Foundation

    POWER GRIP BIG MOOD GLOSSY LIP CAMO POWDER PRIMER MASCARA STAIN FOUNDATION

  21. Slide 21: Top Mass Color Cosmetics Share

    TOP 5 MASS COLOR COSMETICS SHARE MAYBELLINE 18 17.4% L’OREAL 13.5 12.5% COVERGIRL 9.3% 9 E.L.F. REVLON 6.6% 6.8% 4.5 0 NIELSEN XAOC LATEST 12 WEEKS ENDING 6/18/2022, COLOR COSMETICS CATEGORY

  22. Slide 22: Attract & Engage Consumers

    3 e.l. ma f.ing gn etic . ATTRACT & ENGAGE CONSUMERS

  23. Slide 23: Marketing & Digital Investment

    M A R K E T I N G & D I GI TAL INVE STME NT 16 % 16 12 8 7% 4 0 FY 2019 FY 2022 MARKETING & DIGITAL SPEND AS % OF NET SALES

  24. Slide 24: Marketing ROI Multiples Above Industry Benchmarks

    MARKETING ROI MULTIPLES ABOVE INDUSTRY BENCHMARKS

  25. Slide 25: New Frontiers, New Audiences, New Platforms

    NEW FRONTIERS NEW AUDIENCES NEW PLATFORMS

  26. Slide 26: Transcending Beauty Boundaries

    TRANSCENDING BEAUTY BOUNDARIES

  27. Slide 27: Beauty Squad Loyalty Program

    B E A U T Y S Q U A D L O YALTY P RO G RA M >3M MEMBERS ~20 % GROW TH Q1 FY 2023 GROWTH IN TOTAL ENROLLMENT VERSUS PY | BEAUTY SQUAD LOYALTY MEMBERS AS OF 6/30/2022

  28. Slide 28: Consumer Awareness Opportunity

    C O N S U M E R AWA R E N E SS O P P O RTU NITY E.L.F. MAYBELLINE L’OREAL COVERGIRL REVLON (AVERAGE) BOVITZ, INC. (2021 AUGUST) MAKEUP CATEGORY ATTITUDES & USAGE STUDY COMMISSIONED BY E.L.F. COSMETICS; CONFIDENTIAL & PROPRIETARY

  29. Slide 29: Consumer Awareness Opportunity by Generation

    C O N S U M E R AWA R E N E SS O P P O RTU NITY GEN-Z MILLENNIALS GEN-X 2020 2021 2020 2021 2020 2021 BOVITZ, INC. (2021 AUGUST) MAKEUP CATEGORY ATTITUDES & USAGE STUDY COMMISSIONED BY E.L.F. COSMETICS; CONFIDENTIAL & PROPRIETARY

  30. Slide 30: Applying These Drivers Across Our Brands

    AP P LY I N G T H E S E D R I V E R S A C RO SS O U R BRA NDS CORE VALUE PROPOSITION INNOVATION ENGINE ATTRACT & ENGAGE CONSUMERS

  31. Slide 31: Slide 31

  32. Slide 32: Mass Skincare Category

    M AS S S K I NC A R E $ 4.9B CATEGORY + MSD % GROWTH NIELSEN XAOC LATEST 52W ENDING 6/18/2022, FACIAL SKINCARE

  33. Slide 33: Top 20 Mass Facial Skincare Brands

    TOP 20 MASS FACIAL SKINCARE BRANDS NIELSEN XAOC LATEST 12W ENDING 3/26/2022

  34. Slide 34: Consumption: e.l.f. SKIN vs. Category

    C O N S U M P T IO N + 17 % +5% E.L.F. SKINCARE SKIN CATEGORY YOY CONSUMPTION GROWTH. NIELSEN XAOC LATEST 12 WEEKS ENDING 6/18/2022

  35. Slide 35: Purchase Intent

    85 % PURCHASE INTENT % OF CONSUMERS AWARE OF E.L.F. SKIN THAT ARE OPEN TO PURCHASING E.L.F. SKIN

  36. Slide 36: Skincare Brand Among Teens

    # 13 SKINCARE BRAND AMONG TEENS PIPER SANDLER TAKING STOCK WITH TEENS SURVEY, SPRING 2022

  37. Slide 37: Skincare Penetration

    SKINCARE PENETRATION 8% ~20 % TRACKED ELFCOSMETICS.COM CHANNELS AMAZON.COM % PENETRATION OF CONSUMPTION, TRACKED CHANNELS BASED ON NIELSEN XAOC LATEST 52 WEEKS ENDING 6/18/2022

  38. Slide 38: Unleashed e.l.f. SKIN as a Fourth Brand

    U N LE A S H E D E . L . F. S K I N AS A FO U RTH BRA ND S K I N

  39. Slide 39: Recharged Brand Positioning

    RECHARGED BRAND POSITIONING For every eye, lip, face and skin concern VA LU ES SH O U L DN’T CO ST MO RE.

  40. Slide 40: Recharged Product Architecture

    RECHARGED PRODUCT ARCHITECTURE #1 70 % TOP 2 SKIN CONCERN + GEN Z LOOK FOR SENSITIVE GEN Z + MILLENNIALS PRODUCT FAMILY SKIN FORMULATIONS SKIN CONCERN mass

  41. Slide 41: Accelerated Holy Grail Focus

    ACCELERATED HOLY GRAIL FOCUS VS $11 $ 36 HOLY HYDRATION MAKEUP MELTING CLEANSING BALM

  42. Slide 42: Recharged Packaging

    RECHARGED PACKAGING BEFORE RECHARGED

  43. Slide 43: Product details: what it does, ingredients, how to use

    WHAT IT DOES: Removes impurities, refreshes the skin and works to keep your skin looking balanced and healthy. SKIN TYPES dry, oily, combination HERO INGREDIENTS: hyaluronic acid, witch hazel, aloe HOW TO USE: Apply toner to a clean face and neck, avoiding the eye area. PAIRS WITH: Holy Hydration! D

  44. Slide 44: First-Ever Dedicated Skin Brand Campaign

    FIRST-EVER DEDICATED SKIN BRAND CAMPAIGN

  45. Slide 45: e.l.f. SKIN campaign creative

    icymi e.1.f. skin is here GAME-CHANGING SKINCARE THAT WORKS FOR EVERY SKIN CONCERN AT UNREAL PRICES SHOP ALL THE FEELS FACIAL OIL

  46. Slide 46: Top of Mind

    TOP OF MIND

  47. Slide 47: Price Increases

    P R I C E I N C R E A SE S 2/3 OF SKUS HIGH SINGLE-DIGIT % AUR INCREASE

  48. Slide 48: e.l.f. OMG

    E.L.F. OMG Discover best-selling products that won’t break the bank.

  49. Slide 49: Space Expansion

    VERY EYE, LIP elf elf |Telf elf) elf ra —

  50. Slide 50: e.l.f. Cosmetics Space Expansion

    E.L.F. COSMETICS SPACE EXPANSION FALL 2 0 2 2 / S P R I N G 2 0 2 3 FA L L 2 0 2 2

  51. Slide 51: Supply Chain

    S U P P LY CHAIN

  52. Slide 52: Rising to the Challenge

    R I S I N G T O T H E C H A LLE NG E e.l. fan f.ing tas tic. e.l.f.ing bold. e.l.f.ing e.l.f.ing brave. speedy. e.l.f.ing e.l.f.ing e.l.f.ing e.l.f.ing crushing it. unstoppable. e.l.f.ing e.l.f.ing disruptive. e.l.f.ing first. historic. caring. innovative. e.l.f.ing heroic.

  53. Slide 53: In-Stock Rate

    A cookies ‘deans | Pew ¢ camo powder -© foundation.

  54. Slide 54: Tariffs

    TARIFFS

  55. Slide 55: ~1,000 bps of Cost Headwinds

    ~1,000 BPS OF COST HEADWINDS HIG HE R CHINA FX TRA NSP O RTATIO N TARIF F S C O STS

  56. Slide 56: Core Value Proposition, Innovation Engine, Attract & Engage Consumers

    CORE VALUE PROPOSITION INNOVATION ENGINE ATTRACT & ENGAGE CONSUMERS

  57. Slide 57: Mandy Fields, SVP & Chief Financial Officer

    MANDY FIELDS SENIOR VICE PRESIDENT & CHIEF FINANCIAL OFFICER

  58. Slide 58: Net Sales Growth +26%

    N ET S AL E S +26% GROWTH Q1 FY 2023

  59. Slide 59: Digital Consumption Growth

    DI G I TAL C ON S U M P T I O N >30% GROWTH Q1 FY 2023

  60. Slide 60: Digital Commerce Penetration

    DIGITAL COMMERCE PENETRATION 13 % 14 % Q1 FY 2022 Q1 FY 2023 % OF CONSUMPTION

  61. Slide 61: Gross Margin +390 bps

    GR OS S M AR GI N 68 % +390 BPS Q1 FY 2023

  62. Slide 62: Gross Margin Drivers

    GR O S S M A R GI N DRIVE RS PRI C E COST MA RG IN TRA NSP O RT IN CREA S ES S AV I N GS AC C RE TIVE M IX C O STS Q1 FY 2023

  63. Slide 63: Adjusted SG&A

    ADJUSTED SG&A 47 % 45 % Q1 Q1 FY 2022 FY 2023

  64. Slide 64: Marketing & Digital Investment

    MARKETING & DIGITAL INVESTMENT 16 % 16 % Q1 Q1 FY 2022 FY 2023 % OF NET SALES

  65. Slide 65: Marketing and Digital Investment: FY 2023 Outlook

    M A R K E T ING A ND DIG ITA L INVE STM E NT 17-19 % OF NET SALES FY 2023 OUTLOOK

  66. Slide 66: $32M Adjusted EBITDA

    26 % MARGIN $ 32 M ADJUSTED EBITDA Q1 FY 2023

  67. Slide 67: Adjusted Net Income and Adjusted EPS

    AD J US TED N E T I N C O M E A DJU STE D E PS $ 21M $ 0.39 $ 14M $ 0.27 Q1 Q1 Q1 Q1 FY 2022 FY 2023 FY 2022 FY 2023

  68. Slide 68: Strong Liquidity $172M

    STRONG LIQUIDITY $ 172 M Q1 FY 2023

  69. Slide 69: $72M Cash Balance

    $72m CASH © _ BALANCE a ie Q Ql FY 2023

  70. Slide 70: $70M Inventory

    $ 70 M INVENTORY Q1 FY 2023

  71. Slide 71: Cash Priorities

    C A S H P R I O RITIE S I NV E S T I N G I N SU P P O RTING F IV E S T R AT E GI C STRATE G IC I M P E R AT I V E S E X TE NSIO NS

  72. Slide 72: Fiscal 2023 Outlook

    NET SALES ADJUSTED EBITDA +14 % TO 16 % $ 83.5M TO $ 85.0M FISCAL 2023 OUTLOOK ADJUSTED EPS ADJUSTED NET INCOME $ 0.84 TO $ 0.87 $ 47.0M TO $ 48.5M

  73. Slide 73: Double-Digit Net Sales Growth: FY 2023 Outlook

    DOUBLE-DIGIT NET SALES GROWTH FY 2023 OUTLOOK

  74. Slide 74: Gross Margin Drivers: FY 2023 Outlook

    GR O S S M A R GI N DRIVE RS + 100 COST SAVINGS MARGIN BPS TRANSPORTATION COSTS ACCRETIVE MIX PRICE INCREASES FY 2023 OUTLOOK

  75. Slide 75: Adjusted EBITDA Growth: Prior vs. Current Outlook

    A D J U S T E D EBITDA +8 TO10 % +12 TO14 % GROWTH G RO WTH P R I OR O U T L O O K C U RRE NT O U TLO O K FY 2023 OUTLOOK

  76. Slide 76: Cost Inflation

    C O S T I N F L ATIO N OU T B O U N D F U E L INBO U ND AN D L O GI S T I C S TRA NSP O RTATIO N COSTS C O STS

  77. Slide 77: Q2-Q4 FY 2023 Outlook: Mid-Teens Adjusted EBITDA Margin

    BA LA NC E O F Y E A R MID-TEENS ADJUSTED EBITDA MARGIN Q2 - Q4 FY 2023 OUTLOOK

  78. Slide 78: e.l.f. Beauty

    E.L.F- BEAUTY

e.l.f. Beauty — Q1 2023 Earnings Presentation on 6ix