Brilliant Earth Group, Inc. · NASDAQ:BRLT
Brilliant Earth — Q4 2023 Earnings Presentation
24 slides from Brilliant Earth's earnings presentation, Mar 14, 2024
Slide 1: Fourth Quarter and Full Year 2023 Financial Results
Fourth Quarter and Full Year 2023 Financial Results March 14, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements This Presentation and statements to be made on the earnings conference call (collectively, the “Presentation”), contain forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward- looking statements contain
Slide 3: Table of Contents
Table of Contents Company Overview 4 Q4 and Full Year 2023 Results 8 2024 Priorities and Outlook 19 Appendix 23 3
Slide 4: Company Overview
Company Overview 4
Slide 5: The Next Generation Fine Jeweler for Today's Consumer
The Next Generation Fine Jeweler for Today’s Consumer Mission-Driven Ethos Brilliant Earth is a global leader in fine jewelry. Personalized, Digitally Native, Joyful We are successfully Tech-Driven Omnichannel and Customer- Customer executing our strategy to Obsessed Experience transform and moderni
Slide 6: Industry Transforming History and Growth-Focused Future
Industry Transforming History and Growth-Focused Future 2022 Published Brilliant Earth reaches consumers in all U.S. states and over 50 countries Sustainability Report Jade Trau partnership 2005 2008 2013 2017 2020 Fairmined gold partnership Founded in Early adopter >$25m in sales >$100m in sales Si
Slide 7: Brilliant Earth's Competitive Advantages
Brilliant 1 Earth’s VAST INDUSTRY THAT IS RIPE FOR DISRUPTION Competitive Advantages 2 AGILE BUSINESS MODEL THAT CAN SWIFTLY ADAPT 3 USING DATA TO INFORM DECISION-MAKING ASSET LIGHT MODEL NOT BURDENED BY HOLDING EXCESS INVENTORY 4 OMNICHANNEL MODEL PROVIDES A JOYFUL, SEAMLESS SHOPPING EXPERIENCE 5 O
Slide 8: Q4 and Full Year 2023 Results
Q4 and Full Year 2023 Results 8
Slide 9: 2023 Highlights and Key Achievements
2023 Highlights and Key Achievements 1.5% 2023 net sales growth year-over-year and 122% four-year stack growth, exceeding industry growth rate by an estimated 750 bps in 2023* 28% Q4 y/y growth in product bookings** excluding engagement rings 17% y/y order growth 22% y/y order growth from re
Slide 10: Fourth Quarter & Full Year 2023 Financial Summary
Fourth Quarter & Full Year 2023 Financial Summary Q4 NET SALES ($ MILLIONS) Q4 GROSS MARGIN Q4 ADJUSTED EBITDA ($ MILLIONS) ($ MILLIONS) 58.7% $5.3 $119.6 $124.3 54.7% $73.0 $65.4 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 4.2% OF NET SALES +4% YoY +400 bps YoY GROWTH FULL YEAR NET SALES ($ MILLIONS) F
Slide 11: Strong Order Growth Demonstrates Brand Resonance and Customer Engagement
Strong Order Growth Demonstrates Brand Resonance and Customer Engagement Q4 TOTAL ORDERS TOTAL ORDERS (IN THOUSANDS) (IN THOUSANDS) 175 52.9 150 44.9 118 80 2020 2021 2022 2023 Q4 2022 Q4 2023 +18% ORDER GROWTH 11
Slide 12: Average Order Value
Fourth Quarter and Full Year 2023 Financial Results Q4 AVERAGE ORDER VALUE FULL YEAR AVERAGE ORDER VALUE Changes in Q4 AOV year over year principally $2,940 driven by growth in fine jewelry $2,664 $2,557 As fine jewelry continues to become a larger part $2,349 of the product mix, AOV is expected
Slide 13: Proven Ability to Deliver Profitable Growth
Proven Ability to Deliver Profitable Growth NET SALES ($ MILLIONS) ADJUSTED EBITDA1 ($ MILLIONS) $50 $440 $446 $39 $380 $28 $26 $252 2020 2021 2022 2023 2020 2021 2022 2023 45% 49% 53% 58% 11% 13% 9% 6% GROSS PROFIT MARGIN % ADJUSTED EBITDA MARGIN % 1 See Appendix for a reconciliation from Net Incom
Slide 14: Marketing Investment Driving Growing Brand Awareness
Marketing Investment Driving Growing Brand Awareness Aided Brand Awareness 69% Over 2 billion media impressions in 2023 57% 54% Partnership with Camila Morrone earned recognition as one of Us Weekly Magazine’s 43% “Best Celebrity Brand Partnerships of 2023” Celebrity and influencer partnership
Slide 15: Beautifully Designed, Trend-Leading, Distinctive, Personalized Products
Beautifully Designed, Trend-Leading, Distinctive, Personalized Products The Sol Collection Logan Hollowell Collaboration Fine Jewelry reached an all-time high at 21% of bookings in December and posted its biggest quarter ever in Q4 Customers whose first Brilliant Earth purchase is fine jewelry i
Slide 16: Business Model Drives Inventory Turns and Negative Working Capital
Business Model Drives Inventory Turns and Negative Working Capital 1 Design Your Own model and virtual inventory of hundreds of thousands of natural & lab-grown diamonds offers broad range of options for customers, while keeping balance sheet inventory low Inventory turns significantly higher th
Slide 17: Power of Our Omnichannel Model
Power of Our Omnichannel Model Seamless consumer experiences across digitally native and showroom environments Showroom experience and formats that enhance customer engagement Industry-leading features that optimize consumers’ experiences online 17
Slide 18: Continued Uplift from Showroom Expansion
Continued Uplift from Showroom Expansion New showrooms open at least 1 year have Detroit paid back on average within 16 months Opened 12 new showrooms in 2023 Exceeded our 2023 goal with 37 total showrooms now open Houston 18
Slide 19: 2024 Priorities and Outlook
2024 Priorities and Outlook 19
Slide 20: 2024 Priorities
2024 Priorities 1 CONTINUE ON OUR PATH TO BECOME THE PREMIER GLOBAL JEWELRY BRAND FOR TODAY’S AND TOMORROW’S CONSUMER 2 EXPAND AND REFINE DISTINCTIVE, HIGH-QUALITY PRODUCT OFFERING 3 EXPAND AND ELEVATE OMNICHANNEL EXPERIENCE 4 INVEST TO DRIVE OPERATIONAL EFFICIENCY AND LONG-TERM SUSTAINABLE GROWTH 2
Slide 21: 2024 Outlook
2024 Outlook First Quarter $96.5m–$98.5m $1m–$2.5m NET SALES ADJUSTED EBITDA Fiscal Year $455m–$469m $14m–$22m NET SALES ADJUSTED EBITDA 21
Slide 22: Medium-Term Targets
Medium-Term Targets 1 NET SALES GROWTH RATE: ACCELERATE TO LOW TEENS GROWTH RATE IN 2027 2 GROSS MARGIN: HIGH 50s % THROUGH 2027 3 MARKETING % OF NET SALES: BEGIN DECREASING IN 2025 4 ADJUSTED EBITDA MARGIN: INCREASE TO DOUBLE DIGIT MARGIN IN 2027 22
Slide 23: Appendix
Appendix 23
Slide 24: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ADJUSTED EBITDA AND ADJUSTED EBITDA Three months ended Year ended MARGIN December 31, December 31, (Unaudited and $ in 000’s) 2023 2022 2023 2022 2021 2020 Net income, as reported $1,941 $6,186 $4,734 $19,025 $26,256 $21,576 Interest expense 1,320 958 5,128 4,658 7,5
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