Waldencast Plc · NASDAQ:WALD
Waldencast — D.A. Davidson March 2023
46 slides from Waldencast's conference presentation, March 2023
Slide 1: D.A. Davidson March 2023
D.A. Davidson Strictly confidential. Property of Waldencast. March 2023
Slide 2: Disclaimer
Disclaimer Cautionary Statement Regarding Forward-Looking Statements Reconciliation of Non-GAAP Financial Measures Statements in this release that are not historical, are forward-looking statements made pursuant to the safe harbor The financial information and data contained in this release have not
Slide 3: Our ambition is to build a global best-in-class beauty and wellness multi-brand 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 3
Slide 4: A platform poised for long-term profitable growth
A platform poised for long-term profitable growth House of brands built for scale and speed Pure-play in beauty Diversified portfolio (category, channel, geography, price point) Significant opportunity for accelerated long-term growth Proven model with sustained profitability World-class management
Slide 5: US Premium Beauty continues to show growth and resilience
US Premium Beauty continues to show growth and resilience, as it has consistently done over time YTD BEAUTY YTD MAKEUP YTD SKIN CARE +16.4% +13.7% +18.3% +14.9% +13.0% +12.2% Value Growth Units Growth Value Growth Units Growth Value Growth Units Growth Q3 BEAUTY Q3 MAKEUP Q3 SKIN CARE +15.0% +12.7%
Slide 6: Our starting point in building this vision are OBAGI and Milk Makeup
Our starting point in building this vision are OBAGI and Milk Make Up The leading physician-dispensed Leading clean skincare brand Adjustments for 2021 actuals #1 make-up brand #2 perceived best clean brand at performing brand Sephora U.S.3 among U.S. $179 $213 providers1 $168 Net sales Net sales ($
Slide 7: Combined financial profile
+ combined financial profile Net sales ($m) Gross profit ($m) Adjusted EBITDA ($m) OBAGI stand-alone $314 OBAGI stand-alone OBAGI stand-alone Milk stand-alone Milk stand-alone Milk stand-alone Adjustments for 2021 Adjustments for 2021 actuals Public company costs $75 $231 actuals Adjustments for 202
Slide 8: Q3 combined financial profile
+ Q3 22 combined financial profile1 Net Sales ($m) Comparable Net Sales2 ($m) Adjusted Gross Margin ($m) Adjusted EBITDA3 ($m) OBAGI stand-alone OBAGI stand-alone Milk stand-alone OBAGI stand-alone OBAGI stand-alone Milk stand-alone $78.9 Milk stand-alone Milk stand-alone +10.3% Waldencast central e
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Slide 10: OBAGI is a leader in the fastest growing segment of skincare
OBAGI is a leader Key markets in the fastest growing 2021 skincare market size ($bn) CAGR 2021-2025 segment of skincare Asia Pacific $84 8% North America2 $26 6% Global skincare Western Europe $24 5% market by 2025 Latin America $9 7% $204bn1 Eastern Europe $6 8% Global skincare 2021 Middle East $5
Slide 11: Differentiated competitive advantage through a highly credentialed and sticky business model
Differentiated competitive advantage through a highly credentialed and sticky business model Credentialed Science-led rigorous testing Full range of Highly specialized recommendation driving transformative results skin solutions organization Baseline 24 weeks 11 Note: Photos have not been retouched.
Slide 12: We formulate leading products through three vectors of innovation
We formulate leading products through three vectors of innovation Characterization Benefit Ingredient innovation innovation innovation Disease state Performance Mechanism Skin conditions strength of action Elastin maturation, collagen coiling Population Performance Urbanites, country of origin speed
Slide 13: Our products outperform competitors across key attributes
Our products outperform competitors across key attributes Hydrate Luxe® vs competitors OBAGI Nu-CilTM vs physician-dispensed competitor Instrumental assessment % mean improvement in clinical grading (expert grader assessment) from baseline 53.8 60 60 46.2 36.5 Hydration 40 40 32.7 Hydrate Luxe 23.1
Slide 14: We test and demonstrate our transformative research-backed results
We test and demonstrate our transformative research-backed results in studies and visuals Skin condition treated: Case study: Nu-Derm® Melasma(1) Median grade for melasma severity 93% 95% 5 Moderate of patients rated their of patients were test treatment as satisfied with the more effective than ove
Slide 15: OBAGI Growth Strategy
OBAGI GROWTH STRATEGY Grow Core Medical Strategic Growth Levers: 1. Expand US physician penetration 2. Expand portfolio breadth and depth 3. Expand US and international footprint 15
Slide 16: Expand Portfolio Depth and Breadth - US Physician Dispensed
Expand Portfolio Depth and Breadth - US Physician Dispensed Accelerate US Physician Channel +21% YTD NET SALES US Physician Dispensed Source: Obagi Internal Sales Data Sell In; Obagi Internal Sales Data Sell through Last 4 quarters vs, FY2021
Slide 17: Expand Portfolio Depth and Breadth
Expand Portfolio Depth and Breadth Obagi Nu-Derm” 76% | +6pts of accounts carry products in Obagi penetration growth in last rolling 4 Nu-Derm’? franchise. quarters vs. FY 2021. #1 Franchise in Physician Dispensed and still growing, Source: Obagi Internal Sales Data Sell through Last 4 quarters vs.
Slide 18: Professional-C account penetration
60% +6pts of accounts purchased a account penetration growth in last 4 t Professional-C® SKU in the last 4 quarters vs FY 2021, N quarters. OWING MEDICAL, Professional SERUM: 2% L-ascoreic ACID VITAMIN ¢ SERUM 102. go au Source: Obagi Internal Sales Data Sell through Last 4 quarters vs. FY2021
Slide 19: Expand with new Obagi Nu-Cil launches
Expand with NEW AUINICInIES Obagi Nu-Cil!™! ial Boosting Scrum #1 #15 Ranked #1 in OTC portfolio for Q3. YTD rank with only 8 weeks of sales. Ranked #1 in Physician Dispensed launch- to-date (Aug-Sep). Source: Obagi Internal Sales Data Sell through Last 4 quarters vs. FY2021
Slide 20: Footprint expansion
Footprint expansion Unlock Obagi.com Q3 PERFORMANCE YTD GROWTH TTL REVENUE YOY TTL REVENUE YOY Q1-Q3 Obagi Nu-Cil™ Eyebrow Boosting Serum LTD in both revenue & units sold* #4 Obagi Nu-Cil™ Eyelash Enhancing Serum LTD saw +54% lift in revenue* since eyebrow launch 8/30 PoP 20 Source: Obagi Internal S
Slide 21: Growth driven by Obagi Clinical
Growth driven by Obagi , % Clinical, an entry price point offering into the brand in emerging YTD (Q1-3 2022) vs. YoY markets Source: Obagi Internal Sales Data Sell through Last 4 quarters vs. FY2021
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Slide 23: Color Cosmetics: A Large, Dynamic Market
COLOR COSMETICS: A LARGE, DYNAMIC MARKET MILK MAKEUP HAS SIGNIFICANT HEADROOM AND IS WELL POSITIONED TO WIN MAKEUP IS BACK & BOOMING $92BN +23% Global makeup Y/Y growth in 2021 for U.S. make-up sales1 opportunity by 2025 $66BN Color NATURAL MAKEUP: A KEY CATEGORY DRIVER cosmetics $28BN 2021 +15% Pre
Slide 24: Build the top global beauty brand for the next generation
BUILD THE TOP GLOBAL BEAUTY BRAND FOR THE NEXT GENERATION 24
Slide 25: Our community is our superpower
OUR COMMUNITY IS OUR SUPERPOWER OUR DNA IS BUILT AROUND THEIR VALUES: SELF-EXPRESSION + INCLUSION + COMMUNITY 25
Slide 26: Our values are aligned with the next generation
OUR VALUES ARE ALIGNED WITH THE NEXT GENERATION WE BELIEVE IN DOING THE RIGHT THING FOR OUR COMMUNITY AND FOR THE PLANET 26
Slide 27: Hero products in diverse categories with consistent growth
HERO PRODUCTS IN DIVERSE CATEGORIES WITH CONSISTENT GROWTH A SOLID BASE FOR FUTURE GROWTH. THE CALLING CARDS OF THE BRAND IN NEW MARKETS. Hydro Grip Primer Sunshine Family1 KUSH Mascara Lip + Cheek Matte Bronzer $36 $28 – $42 $26 $24 $24 3,657 ★★★★★ Reviews 1,217 ★★★★★ Reviews2 9,200 ★★★★★ Reviews 1
Slide 28: Our Growth Roadmap
OUR GROWTH ROADMAP 3 KEY LEVERS GROW AWARENESS + COMMUNITY DELIVER BREAKTHROUGH INNOVATION EXPAND + INTERNATIONALIZE DISTRIBUTION 28
Slide 29: Always-on community focus driving growth on core products
ALWAYS-ON COMMUNITY FOCUS DRIVING GROWTH ON CORE PRODUCTS AWARENESS + COMMUNITY GROWTH STRONG CORE PRODUCT GROWTH 1.7M views #milkmakeup & 283.6K likes #milkmakeuphacks Organic >275M on Tik Tok 1 Hydro Grip Primer Hydro Grip Spray Lip + Cheek Matte Bronzer $18 (mini) / $36 (full size) $21 (mini) / $
Slide 30: Looking ahead: grow awareness via top talent partnership
LOOKING AHEAD: GROW AWARENESS VIA TOP TALENT PARTNERSHIP 1.9M views in 6 days 721K views in 6 days 327K views in 5 days 1 TIK TOK and Youtube views captured on November 3rd at 4:00 pm ET 30
Slide 31: Delivering breakthrough innovation
DELIVERING BREAKTHROUGH INNOVATION BALANCED GROWTH WITH NEW LAUNCHES +40% YTD 20221 STRATEGY TO REINFORCE CORE CATEGORIES MASCARA + PRIMER WHILE EXPANDING INTO COMPLEXION Top 3 Primer since NEW Future Fluid launch at Sephora Concealer USA2 ¹ Milk internal sales data 31 2 Sephora management
Slide 32: Hydro Grip continues strong growth, Pore Eclipse incremental
HYDRO GRIP CONTINUES STRONG GROWTH, PORE ECLIPSE INCREMENTAL #1 AND #3 PRIMERS YTD AT SEPHORA USA1 +62% YTD2 #1 Primer NEW Top 3 Sephora 1 Primer Sephora 1 1 Sephora management 32 2 Milk internal sales data
Slide 33: Looking ahead: significant category expansion opportunities
LOOKING AHEAD: SIGNIFICANT CATEGORY EXPANSION OPPORTUNITIES KEY FOCUS: REINFORCING CORE CATEGORIES WHILE WINNING IN NEW COMPLEXION BATTLEGROUND Milk Makeup has the opportunity to grow Active + Whitespace Milk Categories1 through innovation and launches Established Emerging Whitespace3 Mascara Primer
Slide 34: Expand + 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 US today Tremendous whitespace for untapped department store + e-commerce d
Slide 35: H2 2022: expanding brand presence domestically and abroad
H2 2022: EXPANDING BRAND PRESENCE DOMESTICALLY AND ABROAD BOTH BRICK & MORTAR AND PURE PLAYERS IS THE US. EXPANDING IN THE 4TH MAKEUP MARKET GLOBALLY. USA EXPANSION INTERNATIONAL EXPANSION Q4/Q1 2023 2021 Doors: 200 #4 MAKE-UP MARKET GLOBALLY 1H 2022 Doors: 400+ FY 2022 Proj. Doors: 600 Launch USA:
Slide 36: Waldencast commitment to exemplary ESG
Waldencast commitment to exemplary ESG WE PLEDGE TO DONATE 1% OF ALL MILKMAKEUP.COM SALES TO THE CENTER WE PLEDGE TO DONATE 1% OF ALL MILKMAKEUP.COM SALES TO THE FASHION SCHOLARSHIP FUND MMU Sustainability Commitments: MMU social philanthropy focuses on self-expression Public Company Best in Class g
Slide 37: A platform poised for long-term profitable growth characterized by:
A platform poised for 2 leading brands with Resilient and high-growth long-term profitable unique positioning markets that have growth characterized by: anchored in high customer weathered the macro affinity and strong brand turmoil faced by • Operational scale of a multi- equity consumer markets br
Slide 38: 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 39: Appendix
Appendix 39
Slide 40: Key Financials – Quarterly Adj. EBITDA (Unaudited)
Key Financials1 – Quarterly Adj. EBITDA (UNAUDITED) PRO FORMA FINANCIALS2 Q3 20223 1Q22A vs. 2Q22A vs. 3Q22A vs. 1Q22A 1Q21A 2Q22A 2Q21A 3Q22A 3Q21A OBAGI $7,848 -15.8% $16,501 14.2% $16,327 109.2% Adj. EBITDA Milk $2,711 69.9% $5,388 301.5% $930 NM ($mm)4 Central costs 5 $0 NA $0 NA ($1,918) NM Wal
Slide 41: Q3 2022 – Condensed Consolidated Statement of Operations
Q3 2022 – Condensed Consolidated Statement of Operations (UNAUDITED)1 1 Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business. All related estimates are subject to change. When reading our financial statements, you should note
Slide 42: Q3 2022 – Waldencast plc, Adjusted EBITDA reconciliation
Q3 2022 – Waldencast plc, Adjusted EBITDA reconciliation1 1 Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business. All related estimates are subject to change. When reading our financial statements, you should note there is a c
Slide 43: Q3 2022 – Obagi Skincare Adjusted EBITDA reconciliation
Q3 2022 – Obagi Skincare Adjusted EBITDA reconciliation1 1 Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business. All related estimates are subject to change. When reading our financial statements, you should note there is a cl
Slide 44: Q3 2022 – Milk Makeup Adjusted EBITDA reconciliation
Q3 2022 – Milk Makeup Adjusted EBITDA reconciliation1 1 Waldencast is in the process of finalizing its business combination accounting. All related estimates are subject to change. When reading our financial statements, you should note there is a clear division between the “predecessor” periods that
Slide 45: Q3 2022 – Obagi Skincare Adjusted Gross Margin reconciliation
Q3 2022 – Obagi Skincare Adjusted Gross Margin reconciliation1 1 Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business. All related estimates are subject to change. When reading our financial statements, you should note there i
Slide 46: Q3 2022 – Milk Makeup Adjusted Gross Margin reconciliation
Q3 2022 – Milk Makeup Adjusted Gross Margin reconciliation1 1 Waldencast is in the process of finalizing its business combination accounting. All related estimates are subject to change. When reading our financial statements, you should note there is a clear division between the “predecessor” period