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 — Q4 2024 Earnings Presentation
27 slides from Sally Beauty Holdings, Inc. (name To Be Changed From Sally Holdings, Inc.)'s earnings presentation, Nov 14, 2024
Slide 1: Sally Beauty Holdings, Inc. Investor Relations Presentation
SALLY BEAUTY HOLDINGS, INC. Investor Relations Presentation As of September 30, 2024
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Statements in this presentation which are not purely historical facts or which depend upon future events may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Se
Slide 3: SBH Mission
SBH Mission To Recruit and Retain Color Customers by…. …Being the Undisputed Expert and Leader in Professional Color/Care for the DIY Consumer and Professional
Slide 4: SBH at a Glance
SBH AT A $3.7B 50.9% $442M Net Sales1 Gross Margin1 Adjusted EBITDA1 GLANCE SEGMENTS SNAPSHOT #1 provider of professional color for home use ~ 34% of sales from owned brands 57% of FY2024 sales Leading resource for salons and salon professionals ~ 53% of sales from brands under exclusive/limited dis
Slide 5: What Makes Us Different
What Makes Us Different Authority in Professional Hair Color and Care 1 Expert in Education and Content 2 Leader in Market Share for the Professional Distribution Channel 3 4 Cosmetologists and Trained Color Experts in Stores 5 Stickiness of Customers in both Sally and BSG Sally Beauty Holdings, Inc
Slide 6: Go To Market
Go To Market Owned/exclusive brands not Professional-only brands Suppliers/ available in mass retail and ~50% from exclusive/limited Vendors: some third-party brands distribution agreements Distributors: Open-Line Retail Exclusive / Full-Service Distribution 3,129 stores 1,331 stores 652 consultants
Slide 7: Sally Beauty Highlights
Sally Beauty Highlights Leader in professional hair color for home-use Professional open-line business – merchandise assortment focused on owned and exclusive brands not available through mass retail Sally Beauty global footprint (1) 3,129 stores worldwide 2,310 U.S. stores / 819 internati
Slide 8: Sally Beauty Product Mix
Sally Beauty Product Mix Skin and Other Cosmetics 1% 64% of Hair Care sales are 8% hair color & care Styling Tools 24% We offer a diversified and Supplies mix of beauty products 17% with a focus on pro color and care 10% Nail Care 40% Hair Color Sally Beauty Holdings, Inc. *Fiscal year 2024
Slide 9: Beauty Systems Group Highlights
Beauty Systems Group Highlights Leader in the professional distribution channel in the U.S./Canada Sells exclusively to salons and salon professionals Exclusive distributor of premium professional hair color and hair care brands used by stylists throughout our territories Over 80% of sales c
Slide 10: Beauty Systems Group Product Mix
Beauty Systems Group Product Mix Skin and Cosmetics Nail Care Styling Tools and Supplies 3% 4% 11% We offer a diversified mix of Hair Care 42% beauty products not carried in Sally stores or mass retail 40% Hair Color 82% of sales are hair color/care Sally Beauty Holdings, Inc. *Fiscal year 2024
Slide 11: Strategic Initiatives
Strategic Initiatives Enhancing Our Customer Centricity 1 Amplifying Product Innovation and Growing High 2 Margin Owned Brands Increasing Operational Efficiency and Optimizing Our 3 Capabilities
Slide 12: Experience, Environment, Merchandise, Brands, Target Demographic
EXPERIENCE: Within the industry and our extensive capabilities across product, operations, sourcing and supply chain to bring something truly unique to the market ENVIRONMENT: An accessible, fun and expressive environment MERCHANDISE: Priced under $10 and product offerings encompass 4 key categories
Slide 13: Growing High Margin Owned Brands
GROWING HIGH MARGIN OWNED BRANDS Increase Sally’s owned brand penetration from 34% to over 50%
Slide 14: Growing High Margin Owned Brands: New
GROWING HIGH MARGIN OWNED BRANDS NEW!
Slide 15: Increasing Operational Efficiency, Optimizing Capabilities
Increasing Operational Efficiency Optimizing Capabilities Launched a Fuel for Growth initiative to support our long-term operating 1 profit objectives Fuel for Growth delivered $28 million benefit across gross margin and SG&A 2 in FY24 Fuel for Growth expected to deliver $40+ million benefit in FY25
Slide 16: ESG Priorities
ESG Priorities Our ESG strategy focuses primarily on the areas where we believe we can have a meaningful impact: Philanthropy & Data Human Capital Community Protection & Management Impact Cybersecurity Diversity, Environmental Inclusion & Sustainability Belonging & Responsible Sourcing Sally Beauty
Slide 17: Financial Overview
Financial Overview Sally Beauty Holdings, Inc.
Slide 18: Consolidated Fiscal 2024 Results
Consolidated Fiscal 2024 Results Net Sales Gross Margin Gross Margin 59.7% 39.3% Operating Margin 15.9% 11.1% Sally Beauty Holdings, Inc. (1) See Addendum for a reconciliation of this non-GAAP financial measure.
Slide 19: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity Ample liquidity Long-Term Capital Structure AMOUNT % OF $108 million of cash and cash equivalents ($MM) TOTAL DEBT on balance sheet (1) TERM LOAN B (FY30) 6.75% SENIOR NOTES (FY32) $394.0 $600.0 39.6% 60.4% TOTAL DEBT $994.0 100.0% No balance outstanding on $
Slide 20: Strong Cash Flow Generation
Strong Cash Flow Generation SBH Free Cash Flow ($m) (1) Cash conversion (%) (2) 41% 49% 40% 72% 54% 11% 35% 33% $316 (3) $308 (3) $287 $254 $228 $159 $145 $57 (3) 2017A 2018A 2019A 2020A 2021A 2022A 2023A 2024A (1) Free Cash Flow defined as cash flow from operations minus capital expenditures; See A
Slide 21: Focused on Long-Term Profitable Growth
Focused on Long-Term Profitable Growth Sticky Customers 1 Growing Profitable Business Gross Margin 50%+ 2 Strong Cash Flow Generation 3 Increasing Shareholder Value Resilient Business Model Focus on Professional Hair Color, Hair Care and Nails Sally Beauty Holdings, Inc.
Slide 22: Long-Term Economic Model
Long-Term Economic Model Low to Mid Low Double- Single-Digit 50%+ Gross SG&A Digit Net Sales Margin Leverage Operating Growth Margins Strong Cash Flow Generation Sally Beauty Holdings, Inc.
Slide 23: Capital Allocation Priorities
Capital Allocation Priorities 1 Maintain Strong Liquidity Position 2 Invest in Our Strategic Growth Initiatives 3 Optimize Our Capital Structure 4 Return Value to Shareholders Sally Beauty Holdings, Inc.
Slide 24: Executive Management Team
Executive Management Team Denise Paulonis Marlo Cormier John Goss Mark Spinks Olivier Badezet Senior Vice President & President and CEO Senior Vice President, CFO President – Sally Beauty Supply President - Beauty Systems Managing Director Europe Group Mary Beth Edwards Scott Sherman Joe Bowe Kim Mc
Slide 25: Key Considerations
Key Considerations 1 #1 Seller of Professional Color Globally 2 Transformed Business Model 3 Positioned to Drive Scale 4 Strong Cash Flow Generation 5 Experienced Management Team Sally Beauty Holdings, Inc.
Slide 26: Appendix
APPENDIX Sally Beauty Holdings, Inc.
Slide 27: EBITDA & FCF Reconciliation
EBITDA & FCF Reconciliation Adjusted EBITDA FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Net Earnings (GAAP) $ 215.1 $ 258.0 $ 271.6 $ 113.2 $ 239.9 $ 183.6 $ 184.6 $ 153.4 Interest expense, net of interest income 132.9 98.2 96.3 98.8 93.4 93.5 73.0 76.4 Provision for income taxes 130.6 70.4 90.5 46.7 85
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