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 — Oppenheimer 2013 Consumer Conference

23 slides from Sally Beauty Holdings, Inc. (name To Be Changed From Sally Holdings, Inc.)'s conference presentation, Jun 25, 2013

  1. Slide 1: Oppenheimer 2013 Consumer Conference

    Oppenheimer 2013 Consumer Conference Mark Flaherty, Sr. Vice President and CFO June 25, 2013 1

  2. Slide 2: Company Highlights

    Company Highlights Sally Beauty Holdings is a leading international specialty retailer and distributor of professional beauty products  Annual consolidated sales of over $3.5 billion  Strong cash flow generation  Approximately 4,560 stores located in 11 countries (1)  Experienced and motivated l

  3. Slide 3: Overview of Our Business

    Overview of Our Business Consolidated Fiscal 2012 Results Segments • Retail consumers • Stores – Chair/suite rentals • 75% of sales • 65% of sales Customers • Professional stylists, small • Full Service Sales – small to salons, chair/suite rentals medium sized salons • 25% of sales • 35% of sales •

  4. Slide 4: Our Customer

    Our Customer Open-Line Retail Exclusive / Full-Service Distribution: 3,357 stores 1,201 stores 944 consultants Customers: Professional stylists Salons ` $ Value Retail Consumers $$$ High-end SBH plays an important role in the supply chain Note: Store count as of March 31, 2013. 4

  5. Slide 5: Stable & Consistent Industry Growth

    Stable & Consistent Industry Growth U.S. Salon Industry Product Sales (at wholesale $’s) Growth of 5.8% $5.0 Recession $4.5 $4.5 Resistant $4.2 $4.0 Industry $4.0 $3.8 $3.8 $3.7 $3.4 $3.5 $3.5 $3.3 $3.1 $3.0 $3.0 $2.9 $2.9 ($ in billions) $2.7 $2.6 $2.5 $2.4 $2.3 $2.2 $2.1 $2.0 $2.0 $1.7 $1.8 $1.6 $

  6. Slide 6: Industry Channels of Distribution (U.S.)

    Industry Channels of Distribution (U.S.) Sally Beauty Holdings 2012 estimated U.S. channel share is over 32% Mega-Salon Manufacturer direct to large-format salons Exclusive / Direct 13% (2) Full-Service $0.6B Manufacturer direct to Third party distribution manufacturer-owned to salons and beauty sal

  7. Slide 7: Business Overview

    Business Overview

  8. Slide 8: Sally Beauty Supply: Overview

    Sally Beauty Supply: Overview  Sally Beauty Supply global footprint  3,357(1) stores worldwide  2,660 stores in U.S. (including Puerto Rico)  697 stores in Canada, the UK, Ireland, Belgium, Netherlands, France, Germany, Spain, Chile & Mexico  Average store size 1,700 sq. ft., 90% selling space

  9. Slide 9: Strong, Consistent Financial Track Record

    Strong, Consistent Financial Track Record Sally Beauty Supply Net Sales ($ in millions) $2,400 $2,199 $2,012 $1,835 Growth $2,000 $1,567 $1,673 $1,696 of 2.2% $1,600 $1,359 $1,419 $1,208 $1,296 $1,132 $1,115 $1,200 $800 $400 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD13 Sally Beaut

  10. Slide 10: Sally Beauty Supply: Merchandise Offering

    Sally Beauty Supply: Merchandise Offering Other Beauty Items Ethnic Products 8% Hair Care 22% 8% Almost 45% of Brushes, Sales from Hair Cutlery and Care & Color Accessories 14% We offer a diversified mix of beauty products 22% 10% Hair Color Electrical Appliances 16% Skin and Nail Care Note: Percent

  11. Slide 11: Sally Beauty Supply Growth Initiatives

    Sally Beauty Supply Growth Initiatives Growth Initiatives Worldwide Sally Beauty Supply Stores 4,000 3,158 3,309 3,032  Expand store base organically and 3,000 2,511 2,694 2,844 2,923 through acquisitions; domestic and 2,000 international 1,000  Plan to grow store base 4 to 5 percent in FY2013 and

  12. Slide 12: CRM and Beauty Club Card Driving Sales

    CRM and Beauty Club Card Driving Sales • Retail customer is most attractive growth opportunity  In 2008, launched U.S. customer acquisition program (CRM) to attract new, retail customers  Increased efforts to convert retail customers to Beauty Club Card (BCC) members  CRM program targeting new re

  13. Slide 13: Grow Sally Beauty Supply Internationally

    Grow Sally Beauty Supply Internationally Existing International Platform Long-Term Store Growth Potential (1)  697 Sally Beauty stores located in 10 countries Current Potential  Stores located in Canada, the UK, Ireland, Belgium, France, Netherlands, Germany, ~250 (Canada) 86 Spain, Chile & Mexico

  14. Slide 14: Beauty Systems Group: Overview

    Beauty Systems Group: Overview  Beauty Systems Group – 1,201 professional stores & 994 professional distributor sales consultants  1,042 company-operated / 159 franchised stores (Armstrong McCall)  994 professional distributor sales consultants  Average store size 2,700 sq. ft.  Sells to salons

  15. Slide 15: BSG: Strong, Consistent Financial Track Record

    BSG: Strong, Consistent Financial Track Record BSG Net Sales ($ in millions) $1,325 $1,400 $1,257 Growth $1,200 $1,081 of 3.8% $954 $945 $975 $941 $1,000 $895 $802 $800 $689 $616 $535 $600 $400 $200 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD13 BSG Same Store Sales Growth 20.0% 15.

  16. Slide 16: BSG: Merchandise Offering

    BSG: Merchandise Offering Other Beauty Electrical Items Appliances 7% 5% Skin and Nail Care 10% 36% Hair Care We offer a diversified mix of beauty products not carried in Sally stores or mass retail Promotional 12% Items 30% Almost 70% of Hair Color Sales from Hair Care & Color Note: Percentage of s

  17. Slide 17: Beauty Supply Group Growth Initiatives

    Beauty Supply Group Growth Initiatives Growth Initiatives BSG Stores 1,151 1,190  Expand store base organically 1,200 874 929 991 1,027 828  Further penetrate existing geographies 800  Enter new territories 400  Opened 39 net new stores in FY2012 0 Openings 2006 2007 2008 2009 2010 2011 2012  E

  18. Slide 18: Numerous Opportunities for Growth

    Numerous Opportunities for Growth Increase Sales Productivity of our Stores   Expand our Store Base Organically   Grow Internationally  Increase Operating Efficiency and Profitability   Pursue Strategic Acquisitions   18

  19. Slide 19: Consolidated Financial Results

    Consolidated Financial Results

  20. Slide 20: Solid Balance Sheet

    Solid Balance Sheet  No near-term maturities Long-term debt (as of 3/31/13) Amount % of  In November 2011, refinanced Sr. and Sr. ($mm) Total Debt Sub Notes for $750mm of 6.875% Senior Notes due 2019 5.750% Senior Notes (FY2022) $859.3 52.6% 6.875% Senior Notes (FY2020) $750.0 45.9%  In May 2012,

  21. Slide 21: Sales and EPS Growth for total Company

    Sales and EPS Growth for total Company Sales EPS (ADJUSTED) ($ in millions) $3,524 $1.42 $3,500 $1.20 $3,269 $1.07 $3,000 $2,916 $1.00 $2,514 $2,648 $2,637 7.8% 32.7% $2,500 YoY YoY $0.80 $0.77 $2,000 $0.60 $0.52 $1,500 $0.44 $0.40 $0.32 $1,000 $0.20 $500 $0 $0.00 (1) FY07 FY08 FY09 FY10 FY11 FY12 2

  22. Slide 22: Investment Highlights

    Investment Highlights Leader in Stable, Growing Professional Beauty Supply Channel Multi-channel Platform with Differentiated Value Proposition Solid Growth Potential Strong, Consistent Financial Track Record Significant Cash Flow Generation Experienced and Motivated Management Team 22

  23. Slide 23: Addendum: Adjusted EBITDA Reconciliation

    Addendum: Adjusted EBITDA Reconciliation Adjusted EBITDA and EPS Reconciliation ($ in millions) Adjusted EBITDA FY06 FY07 FY08 FY09 FY10 FY11 FY12 1Q13 Net Earnings (GAAP) $ 110.2 $ 44.5 $ 77.7 $ 99.1 $ 143.8 $ 213.7 $ 233.1 $ 59.0 Interest expense, net of interest income 0.1 146.0 159.1 132.0 113.0

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