e.l.f. Beauty, Inc. · NYSE:ELF
e.l.f. Beauty — Q4 FY2021 Earnings Presentation
99 slides from e.l.f. Beauty's earnings presentation, May 26, 2021
Slide 1: Q4 FY 2021 Earnings Webcast
Q 4 F Y 2 0 2 1 E A R N ING S WE BC A ST M AY 2 6 , 2 0 2 1 SKIN
Slide 2: Forward-looking statements and non-GAAP notice
As a reminder, this call contains forward-looking statements that are based on management’s expectations – including those relating to the category trends and longer-term outlook – and are subject to known and unknown risks and uncertainties, and therefore, actual results may differ materially. Impo
Slide 3: Tarang P. Amin, Chairman & CEO
TARANG P. AMIN CHAIRMAN & CHIEF EXECUTIVE OFFICER
Slide 4: Today's Agenda
TODAY’S AGENDA 1 2 3 Q4 FY 2021 FY 2022 RESULTS RESULTS OUTLOOK
Slide 5: Nine Consecutive Quarters of Net Sales Growth
NINE CONSECUTIVE QUARTERS OF NET SALES GROWTH +24% +16% +11% +10% +7% +8% +8% +7% +3% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY 19 FY 20 FY 20 FY 20 FY 20 FY 21 FY 21 FY 21 FY 21 NET SALES GROWTH BY QUARTER, EXCLUDING E.L.F. STORES (CLOSED IN FEBRUARY 2019)
Slide 6: Sales Trend - Top 5 Color Cosmetics Brands
SALES TREND - TOP 5 COLOR COSMETICS BRANDS 10 E.L.F. +5% 0 -10 -20 MAYBELLINE L’OREAL -17% -19% COVERGIRL -30 -25% -40 REVLON Maybelline L'Oreal Cover Girl -35% Revlon e.l.f. NIELSEN XAOC LATEST 52 WEEKS ENDING 3/27/2021
Slide 7: Share Trend (BPS) - Top 5 Color Cosmetics Brands
SHARE TR END (BPS) - TOP 5 COLOR COSMETICS BRANDS E.L.F. E . L . F. +100 100 5.7% SHARE 50 0 -50 L’OREAL MAYBELLINE -100 -70 -60 -150 COVERGIRL -130 -200 Revlon REVLON Cover Girl L'Oreal Maybelline e.l.f. -200 NIELSEN XAOC LATEST 52 WEEKS ENDING 3/27/2021
Slide 8: Leading with Purpose
LEADING WITH PURPOSE e.l.f. Beauty stands with every eye, lip, face and paw. ENCOURAGE EMPOWER EMBODY SELF-EXPRESSION OTHERS OUR ETHICS
Slide 9: Board of Directors and Employee Base
BOARD OF DIRECTORS EMPLOYEE BASE 1 5 OF U.S. PUBLIC COMPANIES >60 % MILLENNIAL AND GEN Z >55 % WOMEN >75 % WOMEN >20 % BLACK REPRESENTATION >40 % DIVERSE EMPLOYEE BASE INCLUDES EMPLOYEES IN THE US, CANADA AND UK
Slide 10: Project Unicorn: Eliminated 650K Lbs of Packaging
PROJECT UNICORN ELIMINATED 650K LBS OF PACKAGING
Slide 11: Executing on Our Five Strategic Imperatives
EXECUTING ON OUR FIVE STRATEGIC IMPERATIVES DRIVE DOUBLE DRIVING LEADING COST BRAND DOWN PRODUC- I N N O VAT I O N S AV I N G S DEMAND D I G I TA L TIVITY
Slide 12: Drive Brand Demand
DRIVE BRAND DEMAND
Slide 13: ~12M Followers
NEW ~ 12M FOLLOWERS +18% GROWTH INCLUDES SOCIAL MEDIA FOLLOWERS AND BEAUTY SQUAD MEMBERS. GROWTH RELATIVE TO PRIOR YEAR
Slide 14: EMV Growth
EMV GROWTH +29% EMV = EARNED MEDIA VALUE. SOURCE: TRIBE DYNAMICS
Slide 15: Transcending Beauty Boundaries
MUSIC GAMING TRANSCENDING BEAUTY BOUNDARIES ORIGINAL CONTENT BRAND-ON-BRAND CREATION PARTNERSHIPS
Slide 16: Music
MUSIC
Slide 17: #EyesLipsFace: One of Most Viral Campaigns in TikTok History
#EYESLIPSFACE ONE OF MOST VIRAL CAMPAIGNS IN TIKTOK HISTORY
Slide 18: e.l.f. Records and Music Platforms
E.L.F. THE HAULS | elf purty BLUSH 7:03 ‘a search Select Song Q am Oa Trendy HolidaySZN Rising Stars JINGLE BELLS Oy Halston Dare Up On The HouseTop (feat. Rosette) (e... elf. Cosmetics > 132.2k Views PLATFORMS . Cosmetics Becomes First Beauty Brand on Triller =>] Don't Worry (Clappers) D> | Slimeli
Slide 19: 22S UGB gi <
22S UGB gi < ert ‘ings * .* i.
Slide 20: Tove Lo, Tiana Major9, Pitizion
TOVE LO TIANA MAJOR9 PITIZION
Slide 21: Gaming
GAMING
Slide 22: First Major Beauty Brand to Launch Branded Twitch Channel
FIRST MAJOR BEAUTY BRAND TO LAUNCH A BRANDED CHANNEL ON TWITCH
Slide 23: Lufu and Anna Gaming Partnerships
LUFU ANNA #2 FEMALE GAMER IN THE WORLD E.L.F. GLOBAL MAKEUP ARTIST
Slide 24: Original Content Creation
ORIGINAL CONTENT CREAT ION
Slide 25: #EyesLipsFamous: First-Ever TikTok Reality Show
to be designed #EYESLIPSFAMOUS FIRST-EVER TIKTOK REALITY SHOW
Slide 26: 38M Views, >3K Submissions
38 M >3K VIEWS SUBMISSIONS “Tiktok provides a platform for brands like few other mediums can. e.l.f. looks likely to be the shape of things to come.” TELEVISION BUSINESS JOURNAL
Slide 27: Brand-on-Brand Partnerships
BRAND-ON-BRAND PARTNERS H IP S
Slide 28: Chipotle Partnership Launch on March 10
WE LIT A ¢) ON MARCH 10
Slide 29: Chipotle Collection Sold Out
CHIPO TL EG OODS. COM ELFCOSMETICS.COM N T W RK SOLD OUT SOLD OUT SOLD OUT 9 MINUTES 3 DAYS 10 MINUTES
Slide 30: Slide 30
Slide 31: Brand-Building Efforts Continue to Win Awards
BRAND-BUILDING EFFORTS CONTINUE TO WIN AWARDS
Slide 32: Industry Awards and Recognition
GLOSSY 50 2020: BEAUTY’S MOST POWERFUL 2020 #7 MARKETER OF INDUSTRY TRANSFORMATION BRANDS IN 2020 THE YEAR 1 OF 10 BRAND GENIUS AGE-TARGETED MARKETING: FIRST- 2020 NEWSMAKER IN 2020 EVER TIK TOK REALITY SHOW OF THE YEAR WINNER IN TIKTOK 1 OF 10 BRAND TITANS BEAUTY AND FASHION PRESENCE ON TIKTOK CREA
Slide 33: Gen-Z Favorite
8 VOTES SHY OF #2 GEN-Z #1 FAVORITE SPRING 2021 #4 SPRING 2020 #6 SPRING 2019 PIPER SANDLER’S SEMI-ANNUAL TEEN SURVEY, APRIL 2021
Slide 34: Keys Soulcare
KEYS SOULCARE
Slide 35: Soulcare Definition
SOULCARE, n. Inner peace + outer glow. A state of overall well-being where we find our balance and share our light.
Slide 36: >15B Press Impressions
>15B PRESS IMPRESSIONS Shop Menu VOGUE onirain ctor Needs y j ol beth. 3 Abotit Phis Made The Buzzy Line My Beauty k Y Ritual . Alicia Keys Wants to Be Your New Self- Bie onc D i ; Care Mentor 30 JAWAPY 202 ‘ G » Keys Soulcare, and.Q areobe 1 WHERE DOES ALICIA KEYS FIND INSPIRATION? —— are obse IN H
Slide 37: Keys Soulcare Awards
KEYS SOULCARE AWARDS BEAUTY AWARDS: HELLO GIGGLES 2021 HEALTH 2021 BEAUTY INSTYLE BEAUTY BYRDIE: ESSENCE SELF BEAUTY AWARDS SELF CARE BEAUTY CRUSH AWARDS AWARDS WINNER EDITORS' PICK THE BEST ECO BEAUTY AWARDS SUPERSTARS / SCENT BODYCARE PRODUCTS SUPERSTARS SAGE + OAT MILK OBSIDIAN FACIAL HARMONY MAS
Slide 38: More Than an Icon, an Inspiration
MORE THAN AN ICON, AN INSPIRATION I think that’s what sets Keys “ Soulcare apart. The mission is equal parts meditation and moisturizer, and there is no other brand educating customers on the energetic aspect of skincare in quite the same way.”
Slide 39: Strong Consumer Engagement
STRONG CONSUMER ENGAGEMENT FEELIN' THE LC GOLDEN CLEANSER for the perfect gift for Mother's Day?@ Get it in time with FREE 2-Day shipping and a free gift on orders $100+ Shop Now:
Slide 40: Slide 40
Slide 41: Recharging Our Brand
@) Recharging Our Brand
Slide 42: Before / After
BEFORE AFTER BEFORE AFTER 42
Slide 43: W3LL PEOPLE Website Before and After
BEFORE 4 w3llpeople.com FREE SHIPPING ON ORDERS ABOVE $35 Come Clean With Us. AFTER @ w3llpeople.com WALL PEOPLE What are you looking for? Award-Winning, rd on ee cee
Slide 44: W3LL PEOPLE Before and After
AFTER : % wall Peon” Well FE Ope
Slide 45: Before / After
BEFORE AFTER
Slide 46: W3LL PEOPLE Packaging Before and After
BEFORE AFTER w 4 o ie) w o 4 4 m 2 w ALL PEOPLE xepist LP sur teR Sune ALENRES
Slide 47: W3LL PEOPLE
WALL PEOPLE i a \ BG HS eeWSLIL BeW3SLL
Slide 48: Double Down on Digital
DOUBLE DOWN ON DIGITAL
Slide 49: Triple Digit Growth
TRIPLE DIGIT GROWTH FY 2021 DIGITAL CONSUMPTION YEAR-OVER-YEAR GROWTH
Slide 50: Digital Commerce Penetration
DIGITAL COMMERCE PENETRATION 9% 17 % FY 2020 FY 2021
Slide 51: New Consumers Shopping elfcosmetics.com
~75 % NEW CONSUMERS SHOPPING ELFCOSMETICS.COM % OF NEW CONSUMERS PURCHASING ON ELFCOSMETICS.COM, FY 2021
Slide 52: Beauty Squad Loyalty Members
>2.4M MEMBERS ~ 40 % GROWTH ~ 70 % OF SALES ON ELFCOSMETICS.COM BEAUTY SQUAD LOYALTY MEMBERS AS OF 3/31/2021 | FY 2021 GROWTH IN TOTAL ENROLLMENT VERSUS PY
Slide 53: Leading Innovation
LEADING INNOVATION
Slide 54: Strength in Core Segments
STRENGTH IN CORE SEGMENTS #1 #1 #2 #2 #2 BRUSHES PRIMERS CONCEALER EYEBROW SPONGES $ SHARE $ SHARE $ SHARE UNIT SHARE $ SHARE NIELSEN XAOC LATEST 52 WEEKS ENDING 3/27/2021, EXCLUDES PRIVATE LABEL
Slide 55: Prestige Quality, Extraordinary Prices
PRESTIGE QUALITY EXTR AORDINARY PRICES
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Slide 57: Skincare Focus
SKINCARE FOCUS
Slide 58: Skincare Consumption
SKI N C AR E C ONS U M P T I O N + 22 % E.L.F. -3% SKINCARE C AT E G O RY YOY CONSUMPTION GROWTH. NIELSEN XAOC LATEST 52 WEEKS ENDING 3/27/2021
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Slide 60: Offerings That Care for the Whole Self
OFFERINGS THAT CARE FOR THE WHOLE SELF DERMATOLOGIST-DEVELOPED, SKIN-NOURISHING SOUL-NURTURING SOUL-NURTURING RITUALS CLEAN FORMULAS INGREDIENTS RITUALS DR. RENÉE SNYDER
Slide 61: 4.9 out of 5 Stars on KeysSoulcare.com
4 . 9 O U T O F 5 S TA R S O N KE Y SSO U LC A RE .C O M ***** ***** ***** ***** "ABSOLUTELY LOVE IT! IT “DOES NOT LEAVE MY “THE BALM “THIS CREAM IS IS SO CALMING AND SENSITIVE SKIN DRY IS THE PERFECT. IT LEAVES MY RELAXING. I MAY NEED A AFTER USING IT. BOMB!” FACE SOFT, HYDRATED, CANDLE SUBSCRIPTIO
Slide 62: Driving Productivity
DRIVING PRODUCTIVITY
Slide 63: Industry-Leading Productivity
INDUSTRY-LEADING PRODUCTIVITY
Slide 64: Expanded Spring 2021
EXPANDED SPRING 2021
Slide 65: Average Linear Feet per Store
AV E R A GE L I N E A R F E E T PE R STO RE ~11 FEET ~8 ~6 FEET FEET TARGET ULTA WALMART FY 2021
Slide 66: International
INTERNATIONAL
Slide 67: Sales Trend - Top 10 U.K. Mass Color Cosmetics Brands
SALES TREND - TOP 10 U.K. MASS COLOR COSMETICS BRANDS RIMMEL -25% MAYBELLINE -22% L’OREAL -30% MAX FACTOR -34% REVOLUTION -35% #8 COLLECTION -30% CY 2020 REVLON -38% E.L.F. +2% +2% PRIVATE LABEL -37% NYX -31% -40 -30 -20 NIELSEN U.K. LATEST 52 WEEKS ENDING 12/26/2020 -10 0 10
Slide 68: New Customers
e If. ron EvERY EVE, HP. FACE: NEW CUSTOMERS SHOPPERS DRUG MART d
Slide 69: Cost Savings
COST SAVINGS
Slide 70: Gross Margin
+ 80 BPS 65 % GROSS MARGIN FY 2021
Slide 71: Strong Gross Margin, Lean Manufacturing
C O S T S AV ING S STRONG GROSS MARGIN LEAN MANUFACTURING
Slide 72: W3LL PEOPLE COGS Savings and Pricing
W E LL P EO P L E COGS SAVINGS INVEST IN SHARPEN BRAND RECHARGE PRICING
Slide 73: Supply Chain in China: Cost, Quality, Speed
S U P P LY C H A I N I N C H INA DE LIVE RS B E S T C O M B I N ATIO N O F: COST QUALITY SPEED
Slide 74: Perspective on FY 2022
PERSPECTIVE ON FY 2022 BE E. L. F. I N G SIG NIFIC A NT D I S R U P TI V E WHITE SPA C E NEW DI G ITA L U N E X P EC TE D C ATEGO RI ES GEO GRA PHI ES FRO N T IE R S PARTN ERS H IP S B RA ND S
Slide 75: Accessible Distribution, Prestige Quality
ACCESSIB LE DISTRIBUTION PRESTIGE PRICE EXC LUS IVE DIST RIB U TION ~$20-40 AUR ~$20 AUR ~$9 AUR ~$5 AUR MASS PRICE
Slide 76: Mandy Fields, SVP & CFO
MANDY FIELDS SENIOR VICE PRESIDENT & CHIEF FINANCIAL OFFICER
Slide 77: Q4 Net Sales and Adjusted EBITDA Growth
+24 % +10 % NET SALES ADJ. EBITDA GROWTH GROWTH Q4 FY 21
Slide 78: FY 2021 Net Sales Growth
+12 % NET SALES GROWTH FY 2021
Slide 79: Net Sales Drivers
NET SALES DRIVERS NATIO NA L KE Y S SO U LC A RE E -C O MM ER C E IN T E R N AT I O N A L RE TA ILE RS W E LL PE O PLE FY 2021
Slide 80: FY 2021 Gross Margin
+ 80 BPS 65 % GROSS MARGIN FY 2021
Slide 81: Gross Margin Benefits
GROSS MARGIN BENEFITS IN N OVATI ON C O S T S AV I N GS E - C O M ME RC E FX FY 2021
Slide 82: Adjusted SG&A
ADJUSTED SG&A 49 % 52 % FY 2020 FY 2021
Slide 83: Marketing & Digital Investment
MARKETING & DIGITAL INVESTMENT 16 % 13 % FY 2020 FY 2021
Slide 84: $61M Adjusted EBITDA
19 % MARGIN $ 61M ADJUSTED EBITDA FY 2021
Slide 85: Adjusted Net Income and Adjusted EPS
AD J US TED N E T I N C O M E A DJU STE D E PS $37M $0.71 $32M $0.63 FY 2020 FY 2021 FY 2020 FY 2021
Slide 86: Strong Liquidity
S T R O N G L I QU IDITY > 130 $ MILLION C AS H O N H A N D + R E V O LVING C RE DIT FA C ILITY
Slide 87: Cash Balance
C A S H B A L A NC E $ 46 M $ 58 M Q4 FY 2020 Q 4 FY 2 0 2 1
Slide 88: Refinancing: $200M Credit Facility
R E F I N A N CING IMPROVED $ 200 M TERMS CREDIT INCREASED FACILITY FLEXIBILITY
Slide 89: Inventory
INVENTORY $69M $57M Q3 Q4 FY 2021 FY 2021
Slide 90: Cash Priorities
C A S H P R I O RITIE S I NV E S T I N G I N SU P P O RTING F IV E S T R AT E GI C O U R STRATE G IC I M P E R AT I V E S E X TE NSIO NS
Slide 91: Long-Term Economic Model
LONG-TERM ECONOMIC MODEL MID TO OUTPACE HIGH SINGLE SALES DIGITS GROWTH NET SALES CAGR ADJUSTED EBITDA CAGR CAGR REPRESENTS EXPECTATIONS OVER A 3 YEAR TIME FRAME, THROUGH FY 2024
Slide 92: Fiscal 2022 Outlook
NET SALES ADJUSTED EBITDA +8% TO 10% $66.0M TO $67.5M FISCAL 2022 OUTLOOK ADJUSTED EPS ADJUSTED NET INCOME $0.64 TO $0.67 $35.0M TO $36.8M
Slide 93: FY 2022 Net Sales Drivers
F Y 2 0 2 2 N E T S A L E S DRIVE RS GLOBAL CONTAINER W E LL PEOPLE SHORTAGE KEYS SOULCARE NO MAJOR SPACE GAINS E.L.F. COSMETICS
Slide 94: FY 2022 Adjusted EBITDA Commentary
A D J U S T E D EBITDA +5-10 BPS FY 2022 COMMENTARY
Slide 95: Gross Margin Drivers
GROSS MARGIN DRIVERS M AT E R I A L A N D FX PRIC E T R A N S P O R TAT I O N C O ST SAVING S H EADWI N D S INC RE A SE S COSTS FY 2022 COMMENTARY
Slide 96: SG&A Leverage
SG&A LEVERAGE NON- SC A LING KE Y S MARKETING SO U LC A RE A ND SPEND W E LL PE O PLE FY 2022 COMMENTARY
Slide 97: Q1 FY 2022 Expectations
Q1 FY 2022 EXPECTATIONS STRONG NET SALES YEAR-OVER-YEAR GROWTH EBITDA MARGIN PRESSURE S TI M U L U S G RO SS M A RG IN S P EN D I N G P RE SSU RE ON G O I N G MA RKE TING M OM E N T U M STE P - U P
Slide 98: Inclusive. Accessible. Cruelty Free.
I N C L U S I V E . A C C E S S I B L E . C RU E LTY FRE E . SKIN
Slide 99: Thank You
THANK YOU