Skinhealth Systems Inc. · NASDAQ:SKIN
Skinhealth Systems — Beauty Health — Investor Day (September 2022)
149 slides from Skinhealth Systems's investor day presentation, Sep 15, 2022
Slide 1: Analyst & Investor Day September 15, 2022
Analyst & Investor Day September 15, 2022
Slide 2: The road to BeautyHealth
The road to BeautyHealth Brent Saunders Executive Chairman 2
Slide 3: What makes Hydrafacial attractive?
What makes Hydrafacial attractive? Criteria Leading position in attractive and growing industry P Scientific / brand differentiation P Sustainable competitive advantages P Suitable platform to build a leading aesthetics technology company focused on allied healthcare professionals P Long-term growth
Slide 4: An accomplished executive committee
An accomplished executive committee 4 Amy Juaristi Head of Corporate Affairs Andrew Stanleick President & Chief Executive Officer Ben Baum Chief Experience Officer Dan Watson EVP, Sales Americas Jon Arnold President, EMEA Jwala Karnik, MD EVP of Global Strategy & Partnerships Kellie Sears Chief Huma
Slide 5: Analyst & Investor Day September 15, 2022
Analyst & Investor Day September 15, 2022
Slide 6: The future of BeautyHealth
The future of BeautyHealth Andrew Stanleick President & Chief Executive Officer 6
Slide 7: BeautyHealth
+ BEAUTYHEALTH’
Slide 8: Today's objectives
1 Present 5-Point Master Plan and new business insights 2 Review 3-Year Strategic Growth Plan with significant growth and EBITDA potential 3 Introduce the BeautyHealth Executive Committee Today’s objectives 8
Slide 9: Today's agenda
Today’s agenda 9 The future of BeautyHealth Andrew Stanleick President & Chief Executive Officer The road to BeautyHealth Brent Saunders Executive Chairman Clinical approach behind the Hydrafacial glow Building brand love Ben Baum Chief Experience Officer Jwala Karnik, MD EVP of Global Strategy & Pa
Slide 10: Today's three takeaways
Today’s three takeaways 10 3. INNOVATIVE TECHNOLOGY and a powerful flywheel drives our growth 1. CATEGORY CREATOR with a differentiated product offering, business model and community 2. PROFITABLE GROWTH across geographies and categories in a huge and growing TAM
Slide 11: Who is BeautyHealth?
11 Who is BeautyHealth?
Slide 12: Beauty Wellness Health Aesthetics
Beauty Wellness Health Aesthetics
Slide 13: Spa Retail Medical At-home
Spa Retail Medical At-home
Slide 14: Experiences Product Results Community
Experiences Product Results Community
Slide 15: BeautyHealth
+ BEAUTYHEALTH
Slide 16: We are a purpose driven company
We are a purpose driven company 16 We believe Everyone deserves to feel good about themselves. We work with purpose We don’t just make great products, we build confidence. Our vision Become the world’s leading beauty health and wellness platform, fueled by a community of engaged providers, aesthetic
Slide 17: We are a global leader in beauty health
We are a global leader in beauty health 17 Our financials Strong balance sheet to fuel growth Our global footprint Loved around the world Our community Partners you know, wherever you live, work, and play $340 – 350mm 2022E net sales $50mm 2022E Adjusted EBITDA $821mm Cash & equiv. at June 30, 2022
Slide 18: We deliver diversified net sales regionally
18 EMEA 18% APAC 17% Americas 65% We deliver diversified net sales regionally % net sales, FY 2021
Slide 19: We are playing in a large, high-growth market
Skin $150bn 5% growth3 Hair $100bn 3% growth3 We are playing in a large, high-growth market 19 Source: McKinsey & Company feasibility analysis (2022), management estimates, Statista; 1. Excludes estimates for distributor markets; 2. Includes estimates for distributor markets; 3. 2022E – 2025E CAGRs.
Slide 20: Macro tailwinds are with us
Geopolitical uncertainty Macroeconomic environment COVID-19 lockdowns Supply chain disruptions Headwinds Macro tailwinds are with us, and consumer demand is all-weather Societal shift toward health and wellness Broader definition of beauty: embrace your version of beauty, whatever that may be Reduce
Slide 21: We serve an upper middle class and resilient consumer
We serve an upper middle class and resilient consumer 30s Average age 33% LatinX $94K Annual household income >20% Male Global men's grooming market expected to reach $81.2bn by 2024 21 U.S. consumer archetype Over-indexed with demographic leading beauty spend Young with high LTV potential High inco
Slide 22: Our provider community is booming
Our provider community is booming Skincare specialist jobs are expected to grow +29% by 20301 outpacing job growth in other categories Cultivated aesthetician community that provides edge to capture growth 1.Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Skincar
Slide 23: Hydrafacial is a love brand
44 NPS Source: Company data as of 2022. Today, Hydrafacial is a love brand with a legion of provider and consumer fans 23
Slide 24: We have led technological innovation for years
2008 The Wave 2005 The Tower 2000 Delphia Micro-Dermabrasion 1997 S.A.F.E Smoke Evacuation 2009 Nectre 2017 Perk 2016 Elite 2012 Allegro 2011 Core 2022 Syndeo 24 BeautyHealth may be new to the public markets, but we have led technological innovation for years
Slide 25: It's not a facial. It's a Hydrafacial.
It’s not a facial. It’s a Hydrafacial. 25 Extract Remove debris from pores with painless suction Hydrate Saturate surface with antioxidants and peptides to create instantly gratifying glow Cleanse Gentle exfoliation and relaxing resurfacing to uncover a new layer of skin Treats the skin more deeply
Slide 26: Hydrafacial Growth Flywheel
Hydrafacial Growth Flywheel Compelling & differentiated treatment Category-creating, patented and efficacious productConfidence builder Priority, not discretionary Devoted community of aestheticians & consumers 44 NPS, best in class Favorable economics High-profit treatment for providers; dual reven
Slide 27: Treatments personalized with our range of boosters
Treatments personalized every time with our range of boosters 27 Note: Figures include J Lo Beauty booster launching in fall 2022 and exosome booster launching in 2023. 3 Hydrafacial developed boosters 14 Partner boosters ∞ Layering combinations Nourishing products designed for individual skin healt
Slide 28: Boosters co-created with fellow skin experts
Boosters co-created with fellow skin experts expand our R&D and reach 28 Flexibility to feature leading technologies on our platform Note: J Lo Beauty booster and exosome booster not pictured.
Slide 29: At the forefront of innovation: exosome booster
At the forefront of innovation: exosome booster What are exosomes? Extracellular vesicles carrying cell-specific cargos of cytokines, chemokines, and growth factors Exosomes are involved with cellular communication with respect to repair and regeneration and can address the signs of inflammation and
Slide 30: Our regenerative economic model
Our regenerative economic model 30 Boosters + Co-branded partnerships Syndeo (U.S.) Elite (ex-U.S.) AllegroPerk Tips Solutions Hydrafacial performed 2 Delivery system purchased 1 Consumables re-ordered 3
Slide 31: Dual revenue streams nearly equally split
31 Delivery systems 54% FY 2021 net sales Consumables 46% FY 2021 net sales Our dual revenue streams are nearly equally split, with a recurring element in consumables
Slide 32: Our 5-point master plan
Our 5-point master plan to drive transformative growth 32 M&AExpand footprint Build global infrastructure Drive brand awareness Invest in providers
Slide 33: 5-point master plan: Expand footprint
M&ABuild global infrastructure Drive brand awareness Invest in providers 5-point master plan 33 Expand footprint
Slide 34: Clear runway to expand
34 Clear runway to expand ~5% global penetration Low teens % Penetration in the Americas ~1% Penetration in APAC LDD% Penetration in EMEA Source: McKinsey & Company feasibility analysis (2022), management estimates.
Slide 35: Penetrating new channels
35 Retail Expanding to Sephora APAC in September 2023 Deepening our foothold in medical and spa, and penetrating new channels
Slide 36: Syndeo's launch has been next-level
Syndeo’s launch has been next-level 36 3x Sales Exceeded month 1 launch expectations ~2,265 Systems In market1 2023 Expansion To EMEA and APAC 1.As of June 30, 2022.
Slide 37: 5-point master plan: Invest in providers
M&AExpand footprint Build global infrastructure Drive brand awareness 5-point master plan 37 Invest in providers
Slide 38: Experience Centers
13 Experience Centers 35,000+ Aestheticians trained Los Angeles Mexico City Dallas Chicago London NYC Madrid Frankfurt Shanghai Tokyo Sydney Now Singapore! Now Paris! HFX is the world’s no. 1 educator of aestheticians 38
Slide 39: We invest in our providers at events and trade shows
IECSC Las Vegas, NV, USA | June 2022 AIS San Diego, CA, USA | April 2022 AMWC Monaco | April 2022 Beauty Fair Düsseldorf, Germany | May 2022 IMCAS Paris | June 2022 We invest in our providers at events and trade shows 39
Slide 40: We help providers build their businesses
Physician Spa owner Retailer Solo practitioner We help providers build their businesses Anchors the practice A solo practioner performing just 10 Hydrafacials per week earns $100,000 annually Drives traffic Retailers report higher average basket size for consumers receiving Hydrafacial instore Creat
Slide 41: Hydrafacial Nation
We are rewarded with a deeply passionate community of providers, our Hydrafacial Nation 41
Slide 42: 5-point master plan: Drive brand awareness
M&AExpand footprint Build global infrastructure Invest in providers 5-point master plan 42 Drive brand awareness
Slide 43: Galvanizing influencers at every level
Galvanizing influencers at every level MDs Aestheticians Skinfluencers Celebrities Tr u st R ea ch @laurenluyendyk IG 1.2M @iamkaylanicole IG 640K @miracletheesti TT 732K @jadeywadey180 IG 1.2M Paris Hilton IG 20M Kim Kardashian IG 328M Jennifer Lopez IG 220M @tinachencraig IG 511K @thedallasaesthet
Slide 44: BeautyHealth
+ BEAUTYHEALTH’
Slide 45: 5-point master plan: Build global infrastructure
M&AExpand footprint Drive brand awareness Invest in providers 5-point Master Plan 45 Build global infrastructure
Slide 46: Innovating to deliver a head-to-toe glow
Neck Décolleté Back Booty 46 The face is only 3.5% of total skin surface1 1.Wolf SE, Prnitt BA., Jr . Burn management. In: Irwin RS, Rippe JM, editors. Irwin & Rippe's intensive care medicine. 6th. Philadelphia, PA: Lippincott Williams & Wilkins; 2008. Figure 129–1, pp. 1930. Innovating to deliver a
Slide 47: Building a scalp & hair opportunity with Keravive
Building a revolutionary scalp & hair opportunity with Keravive 47 1.Grand View Research Hair Restoration Market Size, Share & Trends Analysis Report. Treatments administered by doctors and medi−spas are the fastest growing segment of the $4.9bn Hair restoration market Part of the Hydrafacial family
Slide 48: Developing and validating the at-home category
Developing and validating the at-home category Global at-home beauty device market set to grow 10x, reaching $90.5bn by 2030 1 48 1.P&S Intelligence Home-Use Beauty Devices Market Research Report (September 2021).
Slide 49: Our ESG journey has just begun
Our ESG journey has just begun 49 Products Distribution Partnership People
Slide 50: 5-point master plan: M&A
Expand footprint Build global infrastructure Drive brand awareness Invest in providers 5-point master plan 50 M&A
Slide 51: Accelerating the BeautyHealth platform through M&A
Accelerating the BeautyHealth platform through M&A 51 Complementary to our existing platform and community, leveraging the trusted aesthetician Differentiated product or service / high Net Promoter Score Financially attractive profile via compelling revenue growth, recurring revenue characteristics,
Slide 52: Our M&A philosophy
Our M&A philosophy 52 Identify gaps in bundle Acquire digestible asset Integrate and realize synergies No predetermined timeline for transaction – opportunistic philosophy rather than time-based
Slide 53: Three-year plan
\ | . ee-year plan y + BEAUTYHEALTH’
Slide 54: Our three-year plan is expected to drive profitable growth
Our three-year plan is expected to drive meaningful profitable growth 54 $600 – $700mm 2025E net sales 20 – 27% 2022E – 2025E CAGR1 25 – 30% 2025E Adj. EBITDA margin 18 – 20% 2023E Adj. EBITDA margin 2x net sales vs. 2022E 3x+ Adj. EBITDA vs. 2022E Note: Adjusted EBITDA is a non-GAAP measure. See ap
Slide 55: Why I am confident in our plan
Why I am confident in our plan 55 Desirable and committed consumer and provider community Ample liquidity and prudent capital allocation Scalable and profitable operating model Consistent track record of growth and margins Massive, resilient and growing market opportunity Best-in-class management te
Slide 56: Today's agenda
Today’s agenda 56 The future of BeautyHealth Andrew Stanleick President & Chief Executive Officer The road to BeautyHealth Brent Saunders Executive Chairman Clinical approach behind the Hydrafacial glow Building brand love Ben Baum Chief Experience Officer Jwala Karnik, MD EVP of Global Strategy & P
Slide 57: Building brand love
Building brand love Ben Baum Chief Experience Officer 57
Slide 58: Hydrafacial Nation: at the heart of all we do
Hydrafacial Nation: at the heart of all we do Providers Consumers 58
Slide 59: Our providers
Our providers The core of our engine 59
Slide 60: The Golden Triangle of support and education
60 Marketing Training Sales The Golden Triangle of support and education
Slide 61: Comprehensive portfolio of education services
We offer a comprehensive portfolio of education services 13 HFX Experience Centers 75+ Schools with Hydrafacial presence 35,000+ Aestheticians trained 61 As of September 2022.
Slide 62: Providers as Hydrafacial brand evangelists
Hydrafacial has filled in every missing piece in our medical spa. Not only did it attract new clientele, our retention rate grew to 92% after our first 5 months. It has enabled us to increase our sales with other services, especially laser treatments, where we’ve had tremendous results and growth si
Slide 63: Our consumers
Our consumers The ultimate beauty health enthusiasts 63
Slide 64: Reaching the coveted Hydrafacial consumer
64 Source: Company data. 8% Aided brand awareness 30s Average age Life Events Biggest purchasing driver $94,000 Average HH income 33% LatinX consumers 44 Consumer NPS 92% Hydrafacial consumers would switch aestheticians if they did not offer Hydrafacial >20% Men 94% feel more confident after Hydrafa
Slide 65: Aided brand awareness
95% 45% 8% Aided brand awareness 65 Source: Company data, company filings, Google. 2019 2021 2022
Slide 66: Galvanizing influencers at every level
Galvanizing influencers at every level MDs Aestheticians Skinfluencers Celebrities Tr u st R ea ch @laurenluyendyk IG 1.2M @iamkaylanicole IG 640K @miracletheesti TT 732K @jadeywadey180 IG 1.2M Paris Hilton IG 20M Kim Kardashian IG 328M Jennifer Lopez IG 220M @tinachencraig IG 511K @thedallasaesthet
Slide 67: Growing brand awareness
Worldwide Google search trends 0 10 20 30 40 50 60 70 80 90 100 Jan-19 Sep-19 Jun-20 Mar-21 Dec-21 Aug-22 In te re st O ve r Ti m e Earned media value ($K) Growing brand awareness 67 Source: Google, Tribe Dynamics. +86% vs. August 2019 YTD +42% vs. August 2021 YTD +36% vs. August 2019 YTD +28% vs. A
Slide 68: Our product
Our product Designing the future of beauty health 68
Slide 69: Meet Syndeo
69 The future of skin health reimagined. Meet Syndeo Enhanced ease-of-use and intuitive operation Co-created with aesthetician partners Connected experience Elevated design
Slide 70: Syndeo will pave the way to our connected platform
Syndeo will pave the way to our connected platform First of its kind smart delivery system Ultimate in ease-of-use and intuitive operation Data to optimize utilization Closed loop Connected consumer loyalty program to grow repeat visits and LTV Global expansion 70
Slide 71: Poised for growth and future success
Poised for growth and future success 71 Our Golden Triangle cultivates a loyal and engaged community 1 The Hydrafacial consumer is highly desirable 2 Syndeo offers opportunity to spin our flywheel faster 3
Slide 72: Behind the Hydrafacial glow
Behind the Hydrafacial glow Jwala Karnik, MD EVP of Global Strategy & Partnerships 72
Slide 73: Skin health
Skin health 101 Epidermis Dermis 73
Slide 74: Skin health
Skin health 101 Dermis Epidermis 74
Slide 75: Our magic wand: patented handpiece & tip
Our magic wand: patented handpiece & tip 75 Spiral tip gently, but effectively, abrades epidermal layer Patented vortex technology helps dilate pores to facilitate extraction of dirt, sebum, and keratinocytes with continued improvement over time Advanced serum delivery Proprietary vortex technology
Slide 76: Wand as a platform
Wand as a platform Booster partners 76
Slide 77: At the forefront of innovation: exosome booster
At the forefront of innovation: exosome booster What are exosomes? Extracellular vesicles carrying cell-specific cargos of cytokines, chemokines, and growth factors Exosomes are involved with cellular communication with respect to repair and regeneration and can address the signs of inflammation and
Slide 78: Multiple mechanisms of action: dirt and sebum
The multiple mechanisms of action for Hydrafacial 78 Reduction vs. Baseline in dirt and sebum post-Hydrafacial (35%) (39%) (95%) (95%) Dirt Sebum Week 2 Week 8 Source: 2017 study conducted by Dermatology Consulting Services and commissioned by Hydrafacial; results shown in conjunction with a ZO Skin
Slide 79: Multiple mechanisms of action: hydration and moisturization
The multiple mechanisms of action for Hydrafacial Investigator assessment of hydration and moisturization post-Hydrafacial +26% +20% +83% +70% Moisturization Hydration Week 2 Week 8 79 Source: 2017 study conducted by Dermatology Consulting Services and commissioned by Hydrafacial; results shown in c
Slide 80: Multiple mechanisms of action: epidermal thickness
The multiple mechanisms of action for Hydrafacial 80 Mean improvement from baseline score in efficacy variables post-Hydrafacial Control Post skin regimen + Hydrafacial Epidermal thickness (μm) 49 ± 7 80 ± 8 Papillary dermal thickness (μm) 285 ± 20 418 ± 25 Source: Bruce M. Freedman (2009) Topical a
Slide 81: Statistically significant improvement in hydration
Statistically significant improvement in hydration Hydrafacial delivers positive patient reported outcomes 81 Mean improvement from baseline score in efficacy variables post-Hydrafacial Changes from baseline (mean score) Statistically significant reductions Source: Bruce M. Freedman (2009) Topical a
Slide 82: Improving outcomes for other treatments
While also improving outcomes for other treatments Additional reduction in brown spots when added to Intense Pulse Light (IPL) therapy Smoother skin when used with ablative fractional lasers Firmer and smoother skin when paired with non-ablative fractional laser or fractional RF Smoother skin when u
Slide 83: Hydrafacial creates happy, confident consumers
Most importantly, Hydrafacial creates happy, confident consumers 83
Slide 84: Hydrafacial creates happy, confident consumers
Most importantly, Hydrafacial creates happy, confident consumers 84 Source: Company data. 94% Users reporting a confidence boost after their last Hydrafacial
Slide 85: And satisfied providers
And satisfied providers ' THE BEST SKIN OF YOUR LIFE 85 BEAUTYHEALTH’
Slide 86: Key takeaways
Patented Hydrafacial technology yields efficacious, instantly gratifying results 1 Wand serves as a unique delivery platform for a range of personalized offerings 2 Our booster strategy is a unique and agile innovation engine 3 Key takeaways 86
Slide 87: Fireside chat: Power of an omni-channel strategy
Fireside chat: Power of an omni- channel strategy 87 Dan Watson EVP, Sales Americas Jwala Karnik, MD EVP of Global Strategy & Partnerships Mingo Ku President, North Asia
Slide 88: We help providers build their businesses
Physician Spa owner Retailer Solo practitioner We help providers build their businesses Anchors the practice A solo practioner performing just 10 Hydrafacials per week earns $100,000 annually Drives traffic Retailers report higher average basket size for consumers receiving Hydrafacial instore Creat
Slide 89: Fireside chat: Power of an omni-channel strategy
Fireside chat: Power of an omni-channel strategy 89
Slide 90: Hydrafacial contributes to practice productivity
Hydrafacial contributes to practice productivity 90 Express Platinum Body treatment Suggested price per treatment ~$150 — $200 ~$300 — $500 ~$2,800 Cost of consumables ~$25 — $35 ~$30 — $35 ~$250 Gross profit to provider ~$115 — $175 ~$265 — $470 ~$2,550 Gross margin to provider ~76% — 88% ~88% — 94
Slide 91: Fireside chat: Power of an omni-channel strategy
Fireside chat: Power of an omni-channel strategy 91
Slide 92: We deliver diversified net sales regionally
92 EMEA 18% APAC 17% Americas 65% We deliver diversified net sales regionally % net sales, FY 2021
Slide 93: Fireside chat: Power of an omni-channel strategy
Fireside chat: Power of an omni-channel strategy 93
Slide 94: Key takeaways
Key takeaways Medical channel is showing continued strong growth as our core 1 Spa and hospitality will continue to grow behind aesthetic boom 2 Retail offers an opportunity to drive brand awareness and trial 3 94 International markets outside of U.S. are showing explosive growth 4
Slide 95: Delivering the three-year plan
Delivering the three-year plan Liyuan Woo Chief Financial Officer 95
Slide 96: Agenda
Agenda 96 Our unique positioning and track record of success 1 Understanding our business2 Three-year plan3
Slide 97: Our unique positioning & track record of success
1 2 3 Our unique positioning & track record of success 97
Slide 98: Hydrafacial offers unique competitive strengths
Hydrafacial offers unique competitive strengths Complementary with other treatments Agile marketing supporting Golden Triangle Engaged community / flywheel Asset-light, high margin profitable growth Patented technology & compelling clinicals Large and nascent TAM 98
Slide 99: Uniquely positioned amidst medtech peers
0% 10% 20% 30% 40% 50% 60% 70% 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 2 0 2 1 E B IT D A M ar gi n 2018-2022E Revenue CAGR Uniquely positioned amidst medtech peers 99 Source: FactSet as of 09/04/22; includes all publicly traded MedTech companies with a market cap $1bn+ traded on US-based exchan
Slide 100: Macro tailwinds are with us
Geopolitical uncertainty Macroeconomic environment COVID-19 lockdowns Supply chain disruptions Headwinds Macro tailwinds are with us, and consumer demand is all-weather Societal shift toward health and wellness Broader definition of beauty: embrace your version of beauty, whatever that may be Reduce
Slide 101: Significant recent accomplishments
Significant recent accomplishments 101 1.Excludes 2020 due to pandemic impact. 2.Non-GAAP measure; please refer to the appendix for a discussion of the definition of this measure and a reconciliation to the nearest GAAP measure. $750 million 1.25% Convertible debt opportunistically raised 6 Consecut
Slide 102: Consistently beating and raising expectations
Consistently beating and raising expectations Strong track record of net sales outperformance ($mm) Net sales outlook ($mm) 2021 Outlook 2022 Outlook 102 $44.1 $49.2 $58.0 $71.1 $68.1 $83.9 $47.5 $66.5 $68.1 $77.9 $75.4 $103.5 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 Consensus estimate Net sales +7.8% +35.2% +
Slide 103: Dollar EBITDA guidance as we scale
Dollar EBITDA guidance as we scale Historical adjusted EBITDA outlook ($mm) $25 $25 $30 $33 $50 2021 Outlook (12/20) 2021 Outlook (05/21) 2021 Outlook (11/21) 2021 Actual 2022 Outlook 103 Note: Adjusted EBITDA is a non-GAAP measure; please refer to the appendix for a discussion of the definition of
Slide 104: Well capitalized to execute
$821 million Cashto fuel M&A Ample inventory to meet demand $50 million Senior Secured Credit Facility to manage working capital 104 Data as of 06/30/22. Well capitalized to execute
Slide 105: Understanding our business
1 2 3 Understanding our business 105
Slide 106: Seasonality in the business – 2019 example
Seasonality in the business – 2019 example 21% 25% 24% 30% 15% 24% 25% 36% 1Q19 2Q19 3Q19 4Q19 Net Sales % of 2019 net sales and adjusted EBITDA generated by quarter1 Adj EBITDA 106 Q4 is typically the biggest quarter of the year; we invest heavier in first half of the year 1.Non-GAAP measure; pleas
Slide 107: Understanding sequential net sales growth patterns
(10%) 0% 10% 20% 30% 40% 50% 1Q 2Q 3Q 4Q 2019 2021 2022 Understanding sequential net sales growth patterns Summer seasonality impact Holiday promotions and capex budget exhaustion lead to highest $ net sales quarter of the year Slight sequential decline vs. 4Q – returns from vacation, recently compl
Slide 108: Consumables keeping pace with accelerated system sales
3,943 2,602 5,950 3,126 160 45 241 1,461 4,103 2,647 6,191 4,587 2019 2020 2021 1H2022 New Systems Trade-Ups $34.7 $42.3 $39.6 $49.9 $47.5 $66.5 $68.1 $77.9 $75.4 $103.5 49% 49% 48% 49% 54% 53% 53% 55% 55% 40% 23% 51% 51% 52% 51% 46% 47% 47% 45% 45% 37% 1Q19 2Q19 3Q19 4Q19 1Q21 2Q21 3Q21 4Q21 1Q22 2
Slide 109: Quarterly net sales by region
Quarterly net sales by region 109 1.Excludes $23.3 million net sales associated with trade-ups during 2Q22. % Net sales Americas 76% 75% 75% 69% 66% 64% 66% 65% 59% 73% APAC 7% 7% 8% 15% 18% 19% 15% 15% 17% 10% EMEA 17% 18% 16% 17% 16% 17% 19% 20% 24% 17% $80.21 Moving from 70% Americas / 30% APAC+E
Slide 110: Understanding quarterly adj. EBITDA margin patterns
0% 5% 10% 15% 20% 25% 30% 1Q 2Q 3Q 4Q 2019 2021 2022 Understanding quarterly adj. EBITDA margin patterns 110 1.Non-GAAP measure; please refer to the appendix for a discussion of the definition of this measure and a reconciliation to the nearest GAAP measure. 4Q is traditionally highest margin quarte
Slide 111: Three-year plan
1 2 3 Three-year plan 111
Slide 112: Our three-year plan: net sales
Our three-year plan 112 Continued penetration across all channels Nascency across key geographies Consumables pull-through $600 – 700mm 2025E net sales 20 – 27% 2022E – 2025E CAGR1 Double net sales (vs. 2022) Note: Our achievement of the anticipated results is subject to risks and uncertainties, inc
Slide 113: Our three-year plan: adjusted EBITDA
Our three-year plan 113 At least triple adjusted EBITDA (vs. 2022) 18 – 20% 2023E Adjusted EBITDA margin 25 – 30% 2025E Adjusted EBITDA margin Value engineering efforts creating gross margin expansion Shift mix towards consumables Operating leverage across the expense base Note: Adjusted EBITDA is a
Slide 114: Balancing growth with profitability
Balancing growth with profitability 2023E 2025E A d ju sted EB ITD A m argin N et s al es g ro w th 25% 3 0 % – 5 0 % + 30% 18–20% 2 0 % Net sales growth Adjusted EBITDA margin1 Striking the right balance to optimize in the U.S. while fueling growth globally 114 1. Non-GAAP measure; please refer to
Slide 115: Our 5-point Master Plan expected to support growth momentum
Our 5-point Master Plan expected to support continued growth momentum 115 Expand Footprint Build Global Infrastructure Drive Brand Awareness Invest in Providers M&A Place systems in a profitable landgrab Scale profitable growthAgile marketing to increase engagement and utilization Education and even
Slide 116: We are playing in a large, high-growth market
We are playing in a large, high-growth market 116 Estimated number of locations in our direct markets Americas APAC EMEA Total Dermatology offices 15,500 25,500 8,500 49,500 Plastic and aesthetic surgery offices 10,000 8,500 11,000 29,500 Medical spas 11,000 80,500 2,000 93,500 Non-medical spas 9,50
Slide 117: Compelling growth profile – current state
Compelling growth profile – current state 117 1.2021 quarters compared to respective 2019 quarters due to COVID. Note: Percentages may not recalculate due to rounding. % net sales Americas 79% 73% 68% 65% 67% APAC 6% 9% 12% 17% 13% EMEA 15% 17% 19% 18% 20% 49% 51% 51% 49% 45% 54% 59% 55% 46% 41% 1Q2
Slide 118: APAC and consumables are key drivers of growth
APAC and consumables are key drivers of growth 118 Net sales by geography Net sales by segment 65% 17% 18% 54% 46% APAC Americas EMEA Delivery Systems Consumables $260.1mm 2021 net sales $600 – 700mm 2025 net sales >50% Ex-U.S. $260.1mm 2021 net sales $600 – 700mm 2025 net sales >50% Consumables 202
Slide 119: Levers to increase utilization
Levers to increase utilization 119 Extend beyond the face Drive boosters Branding investment Branding and education initiatives 6 – 40x ROI on marketing 2 – 4X return on training Trained masters generate 20% more consumable revenue Connected and personalized CRM tools for account managers Hands Lips
Slide 120: Returning to and exceeding historical adj. EBITDA margins
Returning to and exceeding historical adj. EBITDA margins 120 1. Non-GAAP measure; please refer to the appendix for a discussion of the definition of this measure and important information regarding the assumptions underlying the outlook; Note: Our achievement of the anticipated results is subject t
Slide 121: Bridge to 25-30% adj. EBITDA margin
Bridge to 25-30% adj. EBITDA margin: reaping the benefits of our investments Up to 10% Up to 5% 25 – 30% Expected Margin Value engineering Fixed cost leverage as infrastructure build completes Efficiencies as brand awareness increases and mix shifts to consumables 121 We anticipate continual adjuste
Slide 122: Exiting our outsized investment years
Exiting our outsized investment years 2021 – 2022 Growth investments 2023+ Planned growth optimization ~800 new employees Recruiter fees Global office / real estate Experience Centers Global back-end software infrastructure build – SOX, ERP etc. Third party logistics (3PL) Optimized sales & operatio
Slide 123: Extracting leverage from gross margin
Extracting leverage from gross margin 1.Non-GAAP measure; please refer to the appendix for a reconciliation to the most comparable GAAP measure. Air freight, less-than-load and smaller order sizes Duplicate costs as localized manufacturing and 3PLs stood up Globally sourced components, Long Beach as
Slide 124: Extracting leverage from gross margin: investment
Extracting leverage from gross margin 3PL in EMEA & APAC ERP to streamline order-to-cash all the way through 3PL integrations Assembly line efficiencies Demand planning and other sales and operations planning tools 124 Investment
Slide 125: Extracting leverage from gross margin: future state
Extracting leverage from gross margin Ocean freight, economies of scale Localized manufacturing 3PLs for international operations Streamlined efficiency in sourcing and system assembly In-house consumables production 125 Future state
Slide 126: Approaching a steady-state G&A
Approaching a steady-state G&A 126 Substantial opportunity to generate operating leverage from stabilizing G&A base 1.Non-GAAP measure; please refer to the appendix for a reconciliation to the nearest GAAP measure and discussion of the definitionof this measure. $4 $6 $5 $5 $8 $9 $12 $15 $16 $16 1Q1
Slide 127: Extracting leverage from G&A: today
Extracting leverage from G&A Nascent commercial presence in international markets with minimal back-end support ERP in rollout phase Four distributors purchased in 3Q21 127 Today
Slide 128: Extracting leverage from G&A: investment
Extracting leverage from G&A Hiring key talent Public company costs (SOX compliance, D&O, ERP, audits, etc.) Transfer pricing planning and build-out Rent for new small offices and training / experience centers globally 128 Investment
Slide 129: Extracting leverage from G&A: future state
Extracting leverage from G&A Fully scaled global back office to sustain substantially increased net sales Full commercial presence to develop and penetrate our 16 direct markets globally Established global shared services model 129 Future state
Slide 130: Selling & marketing seasonality in the business
41% 38% 37% 34% 36% 39% 45% 49% 48% 43% 1Q19 2Q19 3Q19 4Q19 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 Selling & marketing seasonality in the business Selling & marketing expense as % of net sales Investment years 130 Heavy marketing to capitalize on market re-openings Syndeo launch Reduced investment given COVI
Slide 131: Extracting leverage from selling & marketing: today
Extracting leverage from selling & marketing 8% aided brand awareness Ceiling of international growth potential given limited size of ex-U.S. sales force Outsized investment in physical activation first half of the year 131 Today Source: Company data.
Slide 132: Our biggest selling & marketing events happen in 1H
IECSC | Las Vegas, NV, USA June 2022 AIS | San Diego, CA, USA April 2022 AMWC | Monaco April 2022 Beauty Fair | Düsseldorf, Germany May 2022 IMCAS Congress | Paris, France June 2022 Global Sales Meeting (Jan) Estipalooza (May) GlowVolution (June) Other notable sales & marketing events 132 Our bigges
Slide 133: Extracting leverage from selling & marketing: investment
Extracting leverage from selling & marketing 133 Investment Brand awareness initiatives Hiring key sales, training and marketing (Golden Triangle) talent Global hiring ahead of sales (ie, $20mm more investment compared to 2021) Incentivization of sales force to place systems Training and inside sale
Slide 134: Extracting leverage from selling & marketing: future state
Extracting leverage from selling & marketing Localized and established commercial infrastructure across all direct markets Leverage in commissions as sales mix shifts Reduced need for substantial investments in marketing with broadening brand awareness Optimized sales cycle and lead conversion times
Slide 135: Our three-year plan
Our three-year plan 135 $600 – $700mm 2025E net sales 20 – 27% 2022E – 2025E CAGR1 25 – 30% 2025E Adj. EBITDA margin 18 – 20% 2023E Adj. EBITDA margin 2x net sales vs. 2022E 3x+ Adj. EBITDA vs. 2022E Note: Adjusted EBITDA is a non-GAAP measure. See appendix for a definition and discussion. Our achie
Slide 136: Key takeaways
Key takeaways 136 Successful track record of progress over perfection execution 1 Substantial growth runway ahead2 Significant profitability potential3
Slide 137: Analyst & Investor Day September 15, 2022
Analyst & Investor Day September 15, 2022
Slide 138: Closing remarks
Closing remarks Andrew Stanleick President & Chief Executive Officer 138
Slide 139: Today's three takeaways
Today’s three takeaways 139 3 INNOVATIVE TECHNOLOGY and a powerful flywheel drives our growth 1 CATEGORY CREATOR with a differentiated product offering, business model and community 2 PROFITABLE GROWTH across geographies and categories in a huge and growing TAM
Slide 140: Questions?
Questions? + BEAUTYHEALTH’
Slide 141: uyuraaciar
uyuraaciar aaa + BEAUTYHEALTH’
Slide 142: Appendix
Appendix + BEAUTYHEALTH’
Slide 143: Disclaimer
Disclaimer 143 This Presentation contains certain forward-looking statements. These statements may relate to, but are not limited to, expectations of future operating results or financial performance of The Beauty Health Company (the "Company"), the calculation of certain key financial and operating
Slide 144: Description of Non-GAAP Financial Measures
Description of Non-GAAP Financial Measures 144 In addition to results determined in accordance with accounting principles generally accepted in the United States of America (GAAP), management utilizes certain non-GAAP financial measures such as adjusted gross margin, adjusted EBITDA, and adjusted EB
Slide 145: Reconciliation of net income to adjusted EBITDA
Reconciliation of net income to adjusted EBITDA 145 Three months ended Unaudited ($mm) Jun-22 Mar-22 Dec-21 Sep-21 Jun-21 Mar-21 Net revenue $103.5 $75.4 $77.9 $68.1 $66.5 $47.5 Net income (loss) $7.9 $32.5 ($17.3) ($215.1) ($139.4) ($3.3) Adjusted to exclude the following: Change in FV of warrant l
Slide 146: Reconciliation of net income to adjusted EBITDA (annual)
Reconciliation of net income to adjusted EBITDA 146 Year ended Unaudited ($mm) Dec-21 Dec-19 Dec-18 Net revenue $260.1 $166.6 $112.3 Net income (loss) ($375.1) ($1.6) ($0.3) Adjusted to exclude the following: Change in FV of warrant liability 277.3 – – Change in FV of earn-out shares liability 47.1
Slide 147: Reconciliation of gross margin to adjusted gross margin
Reconciliation of gross margin to adjusted gross margin 147 Six months ended Year ended Unaudited ($mm) Jun-22 Dec-21 Dec-20 Dec-19 Dec-18 Net sales $179.0 $260.1 $119.1 $166.6 $112.3 Cost of sales 55.4 78.3 51.9 60.1 39.3 Gross profit (GAAP) $123.6 $181.8 $67.2 $106.5 $73.0 Gross margin (GAAP) 69.1
Slide 148: Reconciliation of G&A to normalized G&A
Reconciliation of G&A to normalized G&A 148 Three months ended Unaudited ($mm) Jun-22 Mar-22 Dec-21 Sep-21 Jun-21 Mar-21 Dec-19 Sep-19 Jun-19 Mar-19 General & administrative expense $28 $25 $24 $19 $44 $11 $6 $6 $6 $5 Adjusted to exclude the following: Transaction-related costs and other non-recurri
Slide 149: Analyst & Investor Day September 15, 2022
Analyst & Investor Day September 15, 2022