e.l.f. Beauty, Inc. · NYSE:ELF
e.l.f. Beauty — ICR Conference 2018
79 slides from e.l.f. Beauty's conference presentation, Jan 9, 2018
Slide 1: e.l.f. Beauty
e.l.f. BEAUTY TARANG AMIN & JOHN BAILEY JANUARY 9, 2018
Slide 2: e.l.f. Beauty
e.l.f. BEAUTY TARANG AMIN & JOHN BAILEY JANUARY 9, 2018
Slide 3: Content Disclaimer
CONTENT DISCLAIMER Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that reflect the Company’s current views with respect t
Slide 4: Introduction: Tarang P. Amin
INTRODUCTION TARANG P. AMIN chairman & ceo 25+ years of CPG leadership
Slide 5: Prior companies: P&G, Clorox
PeG Am. THE CLOROX COMPANY Procter& Gamble NF
Slide 6: $50M to $2B
or Ka almost nothing. Or for hold with a natural, touchable feel, Pantene introduces Pro-V® Flexible Hold. With « revolutionary holding ingredient Elustessc? The choice is yours. S$50M REX! For hair so healthy it shines.
Slide 7: $50M to $2B
TO $2B Get healthy, shiny hold with Pantene*Pro-V* Hairspray. The pro penetrates to make your hold strong and your shine last. Now, spray your way to all-day hold and all-day shine. With Pantene Pro For Hair So Healthy It
Slide 8: $180M to $1.5B
NUTRITION $180M TO $1.5B May Reduce the Risk of Coronary Heart Disease Digestive Advantage x Better Survivability kh vs. Yogurt
Slide 9: Introduction: John P. Bailey
INTRODUCTION JOHN P. BAILEY president & cfo 15+ years working with consumer brands
Slide 10: Prior experience: Credit Suisse, North Castle Partners
Fé WA E Wil ws CREDIT SUISSE North Castle Partners | eS ep
Slide 11: Cosmetics Category Growth
COSMETICS CATEGORY GROWTH +4% CAGR 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Third –party studies.
Slide 12: Category (U.S.)
CATEGORY (U.S.) 3% 2016 -2% YTD 2017 Nielsen’s XAOC, excluding C-store database, for the 52 weeks ending 12/31/16 and 48 weeks ending 12/2/17. Cosmetics only.
Slide 13: Category vs. e.l.f. (U.S.)
CATEGORY e.l.f. (U.S.) 20% 17% 3% 2016 2016 2017* -2% YTD 2017 Nielsen’s XAOC, excluding C-store database, for the 52 weeks ending 12/31/16 and 48 weeks ending 12/2/17. Cosmetics only. *2017 figure based on Company outlook issued November 8, 2017 and reconfirmed on January 8, 2018. The Company has n
Slide 14: Slide 14
Slide 15: Our Mission: Make Luxurious Beauty Accessible for All
OUR MISSION: MAKE LUXURIOUS BEAUTY ACCESSIBLE FOR ALL
Slide 16: $1
$1
Slide 17: Slide 17
Slide 18: #1 Mass Ecommerce Site
#1 MASS ECOMMERCE SITE METALLIC EYES: SUNSET INSPIRED “This takes away all of @ O
Slide 19: Strong Growth
STRONG GROWTH
Slide 20: Strong Engagement
STRONG ENGAGEMENT
Slide 21: Slide 21
Slide 22: Slide 22
Slide 23: Great, Fast, Affordable
GREAT, FAST, AFFORDABLE
Slide 24: Long Track Record of Growth
LONG TRACK RECORD OF GROWTH
Slide 25: Strong Gross Margin Progress
58% 52% 47% STRONG GROSS MARGIN PROGRESS 2014 2015 2016
Slide 26: Net Revenue and Adjusted EBITDA
NET REVENUE ($M) ADJUSTED EBITDA ($M) +30% $62 CAGR +23% $54 CAGR $270 $46 $230 $191 $145 $28 2014 2015 2016 2017* 2014 2015 2016 2017* *2017 figures based on Company outlook issued November 8, 2017 and reconfirmed on January 8, 2018. The Company has not completed it’s year-end close or the annual i
Slide 27: Build Great Brands, Lead Innovation, Expand
high-quality, extraordinary value, consumer preferred eyes lips face skin > > > > e.l.f. Matte shadow, Becca ombre e.l.f. Lip Exfoliator fresh Sugar Lip Polish e.l.f. Primer Smashbox Primer e.l.f. c serum skinceuticals c serum brow, liner Palette eye Palette $12 $40 $3 $24 $6 $36 $14 $240 LUXURIOUS
Slide 28: Build a Great Brand
BUILD A GREAT BRAND
Slide 29: Slide 29
Slide 30: Others Speak to Them
OTHERS SPEAK TO THEM
Slide 31: We Build Our World With Them
Oe (A = WE BUILD OUR WORLD WI ££ fhe Mitiyy, M4, - “F wf
Slide 32: Consumers Are Our Stars
CONSUMERS ARE OUR STARS
Slide 33: And We Know How to Engage Them
AND WE KNOW HOW TO ENGAGE THEM
Slide 34: 32M Followers
32M FOLLOWERS @ overseen rom cybersleep We can't get enough of @pgianalaurenmua's sculpted glow #! The #elfbeautysquad bade usec our ‘Srrudge Pot Cream Eyeshadow in Gotta Glow, Clay Eyeshadow Palette in Necessary Nudes & Black Intense In Eyeliner. tplaybeeutitully sherit971 What lipstick is she wear
Slide 35: Beauty Squad
BEAUTY SQUAD
Slide 36: Beautyscape
BEAUTYSCAPE
Slide 37: e.l.f. Unaided Awareness
e.l.f. UNAIDED AWARENESS 13% 6% 2014 2016 Source: Third –party studies commissioned by e.l.f.
Slide 38: More Loop Video
MORE LOOP VIDEO
Slide 39: Lead Innovation
LEAD INNOVATION
Slide 40: I Need It. I Want It. Now.
“ I NEED IT. I WANT IT. NOW. ”
Slide 41: As Few as 13 Weeks
AS FEW AS 13 WEEKS
Slide 42: Over 90 Launches Per Year
OVER 90 LAUNCHES PER YEAR
Slide 43: Slide 43
Slide 44: Together, We Innovate
/ elf : TOGETHER, WE. INNOVATE
Slide 45: Keep It Simple, Don't Over Think It
KEEP IT SIMPLE DON’T OVER THINK IT
Slide 46: They Tell Us What They Love (or Don't Love)
THEY TELL US WHAT THEY LOVE (OR DON’T LOVE)
Slide 47: Customer review feedback
“whenever I used this, my skin felt almost sticky and definitely not clean! At one point I tried to salvage any use I had for the product by going over the "water" with those disposable face wipes that you use during travel. My face felt a lot fresher but I wasn't sure if I was just wiping it off. S
Slide 48: Hand Written Note
elf eyes lips face is Radon wre Areard gev. z a. Me valve goer feeAb ae le. Water ed eleahel re So erep Geer ckin Xoxe To 4 Pi Pye fe 570 10th Street Oakland, CA 94607 | elfcos! Rad ‘om | playbeautifully®
Slide 49: Customer review: new formula
“…this new formula is great … great job e.l.f., so glad that you listen to your customers and go out of your way to ensure that we are satisfied. I'm so glad that they are opening stand alone stores, I was recently at the Glendale Galleria store and I was like a little kid in a candy store....loved
Slide 50: I'm Obsessed With Makeup
“I’M OBSESSED WITH MAKEUP”
Slide 51: The Latest
THE LATEST
Slide 52: Over 70 First to Mass Products
OVER 70 FIRST TO MASS PRODUCTS
Slide 53: We Don't Dupe It. We Spin It
|| I | WE DON’T DUPE IT. Qaeda) ee
Slide 54: Preference Testing
PREFERENCE TESTING
Slide 55: Preferred 71% Blinded, 89% Identified
PREFERRED 71% BLINDED 89% IDENTIFIED
Slide 56: Preferred 85% Blinded, 98% Identified
PREFERRED 85% BLINDED 98% IDENTIFIED
Slide 57: Preferred 74% Blinded, 91% Identified
PREFERRED 74% BLINDED 91% IDENTIFIED
Slide 58: Preferred 68% Blinded, 89% Identified
PREFERRED 68% BLINDED 89% IDENTIFIED
Slide 59: Slide 59
Slide 60: Expand Brand Penetration
EXPAND BRAND PENETRATION
Slide 61: Direct
vw DIRECT = FREE EVENING GLAM
Slide 62: Target: 8 Years of Growth
TARGET 8 YEARS OF GROWTH
Slide 63: Walmart: Strong Growth, Majority in 4 Feet
WALMART STRONG GROWTH MAJORITY IN 4 FEET
Slide 64: Full Chain Launch
He fenolly, here! 4 es THE COLLECTION THAT ™~. MAKES EVERY GIRL SAY “GIMME”
Slide 65: UK, Canada, Mexico
UK CANADA MEXICO
Slide 66: Drive World Class Operations
DRIVE WORLD CLASS OPERATIONS
Slide 67: Our Company Is Like Our Consumer
OUR COMPANY IS LIKE OUR CONSUMER
Slide 68: There Are a Lot of Women Here (& Some Men Too)
THERE ARE A LOT OF WOMEN HERE (& SOME MEN TOO)
Slide 69: We Are Young
WE ARE YOUNG
Slide 70: We Are Diverse
WE ARE DIVERSE
Slide 71: We Are Makeup Enthusiasts
WE ARE MAKEUP ENTHUSIASTS
Slide 72: High Performance Teams
HIGH PERFORMANCE TEAMS
Slide 73: Operations Advantage
OPERATIONS ADVANTAGE
Slide 74: Planning, China HQ, Distribution, Suppliers
PLANNING CHINA HQ DISTRIBUTION SUPPLIERS 74
Slide 75: Horizontal Integration, Depth of Expertise
HORIZONTAL INTEGRATION DEPTH OF EXPERTISE ONE TEAM ONE DREAM
Slide 76: Growth Algorithm: 10-15% CAGR 2016-2019
2016–2019 GROWTH ALGORITHM 10-15% CAGR NET SALES AND ADJ. EBITDA
Slide 77: Investment Highlights
INVESTMENT HIGHLIGHTS UNIQUE POSITION IN BEAUTY SIGNIFICANT WHITESPACE HIGH-PERFORMANCE TEAM 77
Slide 78: Thank You
THANK YOU
Slide 79: Annual Adjusted EBITDA Reconciliation
ANNU AL ADJ U S T E D E B IT DA R E CONCIL IAT ION ($M) 2014 2015 2016 Net income (loss) ($2.9) $4.4 $5.3 Interest expense 12.5 12.7 16.3 Provision (benefit) for income taxes (0.1) 4.3 4.5 Depreciation and amortization 8.7 10.3 12.1 EBITDA $18.2 $31.7 $39.2 Transaction-related expenses 0.1 0.7 - Cos