Skinhealth Systems Inc. · NASDAQ:SKIN
Skinhealth Systems — Beauty Health — Q3 2022 Earnings Presentation
35 slides from Skinhealth Systems's earnings presentation, Nov 8, 2022
Slide 1: Q3 2022 Earnings Presentation
4» A BEAUTYHEALTH QO3 2022 Earnings Presentation November 2022
Slide 2: Disclaimer
Disclaimer ‘This Presentation contains certain forward-looking statements. These statements may relate to, but ore not imited to, expectations of future operating results or financial performance of The Beauty Health Company (the "Company", the calculation of certain key financial and operating metr
Slide 3: Today's agenda
Today’s agenda Opening Q3 2022 results & QSA remarks outlook Andrew Stanleick Liyuan Woo President & Chief Financial Officer Chief Executive Officer 3 >» BEAUTYHEALTH
Slide 4: Opening remarks
Opening remarks Andrew Stanleick President & Chief Executive Officer + BEAUTYHEALTH
Slide 5: Top line Q3 results exceed expectations despite macroeconomic environment
Top line Q3 results exceed expectations despite macroeconomic environment Mid double-digit net sales Updating 2022 Strong top line growth in every region guidance $88.8mm net sales YoY growth: $360 - $365mm net sales +30% growth YoY Americas: +30% $45 - $50mm adjusted EBITDA2 $16.5mm adjusted EBITDA
Slide 6: Continued progress against our 5-point Master Plan
Continued progress against our 5-point Master Plan Expand Invest in Drive brand Build global M&A footprint providers awareness infrastructure 6 ~» BEAUTYHEALTH
Slide 7: 5-point Master Plan: Expand footprint
5-point Master Plan ' Expand footprint 7 ~~ BEAUTYHEALTH’
Slide 8: Delivery systems sold YTD have already surpassed 2021's record year
Delivery systems sold YTD have already surpassed ‘ 2021s record year, with one quarter still to go Annual delivery systems sold me-Average.seling price 6,447 4108 age $23,640 | a 2019 2020 2021 2022VTD (9/30) Demonstrated demand and pricing power 8 BEAUTYHEALTH
Slide 9: Continuing to win omnichannel distribution globally
Continuing to win omnichannel distribution globally MEDSPA HOSPITALITY RETAIL l SEPHORA ,— Sephoro’s first Store of the Future in Singapore THE, MIAMI BEACH EDITION / DOUGLAS { Launch in THE LANDMARK _; Dusseldorf luxury MANDARIN ORIENTAL Ese. flagship HONG KONG ecg ¢ -» BEAUTYHEALTH
Slide 10: 5-point Master Plan: Invest in providers
5-point Master Plan ' a ib Invest in providers / 10 ~ BEAUTYHEALTH
Slide 11: National Esthetician Day in Times Square
National Esthetician Day in Times Square National rT oh SC © 1) ee 1,400,000 Day i! Q : + ae impressions in just two days! 0 BEAUTYHEALTH
Slide 12: Hydrafacial is a top educator of estheticians worldwide
Hydrafacial is a top educator of estheticians worldwide Aestheticians trained Experience Centers e $$ .» BEAUTYHEALTH
Slide 13: Cultivating relationships with estis from the start at aesthetic schools
Cultivating relationships with estis from the start Y at aesthetic schools 80+ aesthetic schools with a Hydrafacial presence Favorable pricing on refurbished Elite devices for schools and new graduates Advance access to training courses and accreditations B BEAUTYHEALTH™
Slide 14: 5-point Master Plan: Drive brand awareness
5-point Master Plan ' Drive brand awareness “4 ~ BEAUTYHEALTH
Slide 15: Consumer interest in Hydrafacial continues to grow
Consumer interest in Hydrafacial continues to grow Earned Media Value'(S$mm) 0 pevenneeeeeneeeeeeey ' ' Already a $78 : record year for $6.0 $5.9 i EMV _ a : FY 2022 YTD EMV has ' i already surpassed FY FY 2019 FY 2020 FY 2021 ' FY 2022 YTD (09/30) 2021 by +15% Worldwide Google search trends —Intere
Slide 16: JLo is our most successful booster drop to date
JLo is our most successful booster drop to date 360° 185mm marketing launch Impressions and counting! Sold out +42% day 1 pre-sale goal sales spike on launch day 6 BEAUTYHEALTH™
Slide 17: Growing the industry's only booster portfolio
Growing the industry’s only booster portfolio Awareness- driving partnerships Physician- endorsed boosters Dr Dennis Gross v7 100 teaury India ‘Beco Award- a winning ab) formulas Vos : Cutting- edge science and R&D ~ BEAUTYHEALTH
Slide 18: Expanding the GLOWvolution tour to EMEA and APAC
Expanding the GLOWvolution tour to EMEA and APAC hydrafacial s #GLOWvotution BAB IBY oH hydrafacial Berlin, are you ready to glow? 15 cities globally, millions of consumers 8 BEAUTYHEALTH
Slide 19: 5-point Master Plan: Build global infrastructure
5-point Master Plan ' Build global infrastructure 0 ~~ BEAUTYHEALTH
Slide 20: Creating the infrastructure to profitably scale future growth
Creating the infrastructure to profitably scale future growth ¥ Appointed EVP, Global Operations v Expanding in-region production in China v Advanced value engineering projects v Instituting SOX compliance ie . ap eas PLLA SS v ERP rollout on track 20 BEAUTYHEALTH™
Slide 21: 5-point Master Plan: M&A
5-point Master Plan a ~~ BEAUTYHEALTH
Slide 22: Our vision is to accelerate the BeautyHealth platform through M&A
Our vision is to accelerate the BeautyHealth platform through MSA Differentiated product or service / high Net Promoter Score Wellness Complementary to our existing platform and community, leveraging the trusted aesthetician Financially attractive profile via compelling Aesthetics revenue growth, re
Slide 23: Our M&A philosophy
Our M&A philosophy Identify gaps in bundle Integrate and Acquire digestible asset synergies No predetermined timeline for transaction Prudent approach and opportunistic philosophy rather than time-based 23 BEAUTYHEALTH™
Slide 24: Q3 2022 results & outlook
Q3 2022 results & outlook Liyuan Woo Chief Financial Officer + BEAUTYHEALTH
Slide 25: Q3 2022 financial highlights
Q3 2022 financial highlights Net sales by segment (S$mm) $42.3 $347 a. 214 77 17.0 20.9] % YoY growth Qi Q219 ™ Delivery Systems ™ Consumables <2 Trade-Ups! $77.9 94 21° 416 Q122 Q2 22 Q3 22 Delivery Systems Consumables 74% 39% 62% 85% 36% 54% 23% 24% Net sales 56% 59% 56% 30% 25 1 Trade-Up revenue
Slide 26: Q3 2022 financial highlights (cont'd): net sales by region
Q3 2022 financial highlights (cont’d) Net sales by region ($mm) mAmericas ®APAC ®EMEA ‘Trade-Ups! $681 12.6 $423 $475 105 $347 75 3. Bas 88 " 45.0 26.5 318 313 * Q122 Q2 22 Q3 22 Que 0219 = 9319-0419 giz? g22% = 93.21? % YoY growth @ Americas 18% 34% 51%, 43% 77% 30% @ APAC 252% 344% 218% 47% (17%)
Slide 27: Q3 2022 key performance indicators
Q3 2022 key performance indicators 24,473 Install Base 1,860 Delivery Systems Sold $25,947 Delivery System ASP! BEAUTYHEALTH
Slide 28: Q3 2022 financial highlights (cont'd)
Q3 2022 financial highlights (cont’d) Gross margin and adjusted gross margin! Net income (loss) and adjusted net income (loss)! ($mm) 01 25 3.0 75.1% $ $25 a 71.5% ($215.1) Q3 2021 Q3 2022 Q3 2021 Q3 2022 Net income (loss) Adjusted net income (loss)! 676% Adjusted EBITDA! posing (Smm) —% margin omar
Slide 29: 2022 outlook: demonstrated track record of execution
2022 outlook: demonstrated track record of execution Strong track record of net sales outperformance Adjusted EBITDA! outlook (smm) (Smm) Consensus estimate ™ Net sales $1035 F aa $83. 8 $665 455,868! gmiS779 — g6p,$754 $80, rid a! : i i i i oo Qi2i Q221 Q3 21 Q421 Q122 Q222 Q3 22 i C 478% +35.2% )
Slide 30: Q3 2022 cost detail
Q3 2022 cost detail % net sales (§mm) Q3 2022 Q3 2021 4Q3 2021 Q3 2022 Q3 2021 4Q3 2021 4 Q3 2021 Commentary Increase in fixed cost leverage associated with higher . 10) volume and stronger realized delivery systems pricing, Gross Profit $616 $461 +8155 69.3% 67.6% 417% pally affect ay Veadwinde Ron
Slide 31: Q3 2022 balance sheet highlights
Q3 2022 balance sheet highlights Cash and Cash ; a . Equivalents Approximately $684.2 million cash and cash equivalents on balance sheet Warrants * Approximately 7.0 million Private Warrants outstanding! » $750.0 million 125% convertible notes due 2026 Convertible » Use of proceeds: capped call tran
Slide 32: Q&A
Nes / : Andrew Stanleick Liyuan Woo President & Chief Executive Officer \ QS5A Chief Financial Officer + BEAUTYHEALTH
Slide 33: Appendix
ghsee. ceessss ry 33 + BEAUTYHEALTH
Slide 34: Reconciliation of gross margin to adjusted gross margin
Reconciliation of gross margin to adjusted gross margin Three months ended September 30, Unaudited (Smm) 2022 2021 Net sales $888 $6811 Cost of sales 27.2 221 Gross profit (GAAP) $61.6 $461 Gross margin (GAAP) 69.3% 676% Adjusted to exclude the following: Stock-based compensation expense included in
Slide 35: Reconciliation of net income to adjusted EBITDA
Reconciliation of net income to adjusted EBITDA ($mm) Net sales Net income (loss) Adjusted to exclude the following: Change in FV of warrant liability Change in FV of earn-out shares liability Amortization expense Gain / loss on disposal of assets Stock-based compensation expense Other expense (inco