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 — Investor Presentation (June 2013)
25 slides from Sally Beauty Holdings, Inc. (Name to Be Changed From Sally Holdings, Inc.)'s investor presentation, Jun 30, 2013
Slide 1: Sally Beauty Holdings Overview
Sally Beauty Holdings Overview As of June 30, 2013 1
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 4,660 stores located in 11 countries (1) Experienced and motivated l
Slide 3: Overview of Our Business
Overview of Our Business Consolidated Fiscal 2012 Results Segments • 3,379 Stores worldwide • 1,223 Stores Customers • 995 Sales consultants 3
Slide 4: Overview – Who We Are (Sally Beauty Supply)
Overview – Who We Are Segment Distribution Channel 3,379 stores worldwide (1) Retail consumers (75% of sales) Customers Professional stylists (25% of sales) Sales $2,199m FY2012 Financials SSS growth 6.5% EBIT $430m EBIT margin 19.5% (1) Store count as of fiscal 2013 first quarter June, 30, 2013. No
Slide 5: Overview – Who We Are (Beauty Systems Group)
Overview – Who We Are Segment Distribution • 1,201 stores (1) Channel • 944 direct sales consultants (1) Customers • Professional stylists (chair/suite renters) • Salons (via BSG’s direct sales consultants) Sales $1,325m FY2012 Financials SSS growth 6.1% EBIT $183m EBIT margin 13.8% (1) Store count
Slide 6: Our Customer
Our Customer Open-Line Retail Exclusive / Full-Service Distribution: 3,379 stores 1,223 stores 995 consultants Customers: Professional stylists Salons ` $ Value Retail Consumers $$$ High-end SBH plays an important role in the supply chain Note: Store count as of June 30, 2013. 6
Slide 7: 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 $
Slide 8: Industry Channels of Distribution (U.S.)
Industry Channels of Distribution (U.S.) Sally Beauty Holdings estimated U.S. channel share is 32% Mega-Salon Manufacturer direct to large-format salons Exclusive / Direct 13% (2) Full-Service $0.6B Manufacturer direct to Third party distribution manufacturer-owned to salons and beauty salons or “hi
Slide 9: Business Overview
Business Overview
Slide 10: Sally Beauty Supply: Overview
Sally Beauty Supply: Overview Sally Beauty Supply global footprint 3,379(1) stores worldwide 2,675 stores in U.S. (including Puerto Rico) 704 stores in Canada, the UK, Ireland, Belgium, Netherlands, France, Germany, Spain, Chile & Mexico Average store size 1,700 sq. ft., 90% selling space
Slide 11: Strong, Consistent Financial Track Record
Strong, Consistent Financial Track Record Sally Beauty Supply Net Sales ($ in millions) Growth $2,400 $2,199 of 1.8% $2,012 $2,000 $1,835 $1,673 $1,696 $1,674 $1,567 $1,600 $1,359 $1,419 $1,208 $1,296 $1,132 $1,200 $800 $400 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD13 Sally Beaut
Slide 12: Sally Beauty Supply: Merchandise Offering
Sally Beauty Supply: Merchandise Offering Other Beauty Items Ethnic Products 8% Hair Care 22% 8% Almost 45% of Brushes, Sales from Hair Cutlery and Care & Color Accessories 14% We offer a diversified mix of beauty products 22% 10% Hair Color Electrical Appliances 16% Skin and Nail Care Note: Percent
Slide 13: Differentiated Value Proposition
Differentiated Value Proposition Reasons to shop Sally Beauty Supply stores creates customer loyalty “Sally Beauty sells the Product Selection products my hairstylist 4,000 to 8,000 SKUs uses.” Comprehensive product assortment “I recommend Sally Beauty to Beauty Supply to the Professionals clien
Slide 14: CRM and Beauty Club Card (BCC) Driving Sales
CRM and Beauty Club Card (BCC) Driving Sales • Retail customer is most attractive growth opportunity In 2008, launched U.S. customer acquisition program (CRM) to attract new, retail customers Increased efforts to convert retail customers to Beauty Club Card (BCC) members CRM program targeting
Slide 15: Grow Sally Beauty Supply Internationally
Grow Sally Beauty Supply Internationally Existing International Platform Long-Term Store Growth Potential (1) 704 Sally Beauty stores located in 10 countries Current Potential Stores located in Canada, the UK, Ireland, Belgium, France, Netherlands, Germany, ~250 (Canada) 87 Spain, Chile & Mexico
Slide 16: Beauty Systems Group: Overview
Beauty Systems Group: Overview Beauty Systems Group – 1,223 professional stores & 995 professional distributor sales consultants 1,063 company-operated / 160 franchised stores (Armstrong McCall) 995 professional distributor sales consultants Average store size 2,700 sq. ft. Sells to salons
Slide 17: BSG: Strong, Consistent Financial Track Record
BSG: Strong, Consistent Financial Track Record BSG Net Sales ($ in millions) Growth $1,325 of 4.5% $1,400 $1,257 $1,200 $1,081 $1,042 $954 $945 $975 $941 $1,000 $895 $802 $800 $616 $535 $600 $400 $200 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD13 BSG Same Store Sales Growth 20.0% 1
Slide 18: BSG: Merchandise Offering
BSG: Merchandise Offering Other Beauty Electrical Items Appliances 7% 5% Skin and Nail Care 10% 36% Hair Care We offer a diversified mix of beauty products not carried in Sally stores or mass retail Promotional 12% Items 30% Almost 70% of Hair Color Sales from Hair Care & Color Note: Percentage of s
Slide 19: Beauty Supply Group Growth Initiatives
Beauty Supply Group Growth Initiatives Growth Initiatives BSG Stores 1,151 1,190 Expand store base organically 1,200 874 929 991 1,027 828 Further penetrate existing geographies 800 Enter new territories 400 Opened 39 net new stores in FY2012 0 Openings 2006 2007 2008 2009 2010 2011 2012 E
Slide 20: Numerous Opportunities for Growth
Numerous Opportunities for Growth Increase Sales Productivity of our Stores Expand our Store Base Organically Grow Internationally Increase Operating Efficiency and Profitability Pursue Strategic Acquisitions 20
Slide 21: Consolidated Financial Results
Consolidated Financial Results
Slide 22: Solid Balance Sheet
Solid Balance Sheet No near-term maturities Long-term debt (as of 3/31/13) Amount % of In November 2011, refinanced Sr. and Sr. ($mm) Total Debt Sub Notes for $750mm of 6.875% Senior Notes due 2019 5.750% Senior Notes (FY2022) $858.6 50.9% 6.875% Senior Notes (FY2020) $750.0 44.5% In May 2012,
Slide 23: Sales and EPS Growth for total Company
Sales and EPS Growth for total Company Sales EPS (ADJUSTED) ($ 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 $0.00 (1) FY07 FY08 FY09 FY10 FY11 FY12 2
Slide 24: Investment Highlights
Investment Highlights Leader in Stable, Growing Professional Beauty Supply Channel Multi-channel Platform with Differentiated Value Proposition Solid Growth Potential Strong, Consistent Financial Track Record Significant Cash Flow Generation Experienced and Motivated Management Team 24
Slide 25: Addendum: Adjusted EBITDA Reconciliation
Addendum: Adjusted EBITDA Reconciliation Adjusted EBITDA and EPS Reconciliation Adjusted EBITDA ($ in millions) FY06 FY07 FY08 FY09 FY10 FY11 FY12 1Q13 2Q13 3Q13 Net Earnings (GAAP) $ 110.2 $ 44.5 $ 77.7 $ 99.1 $ 143.8 $ 213.7 $ 233.1 $ 59.0 $ 64.9 $ 72.4 Interest expense, net of interest income 0.1
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