Skinhealth Systems Inc. · NASDAQ:SKIN
Skinhealth Systems — Vesper Healthcare Acquisition — SPAC Merger (December 2020)
43 slides from Skinhealth Systems's SPAC merger presentation, Dec 9, 2020
Slide 1: Investor Presentation December 2020
Investor Presentation December 2020
Slide 2: Disclaimer
DISCLAIMER 2 This presentation has been prepared by LCP Edge Intermediate, Inc . and its affiliates (collectively, the “Company”) in connection with a proposed business combination involving the Company as further described herein (the “Transaction”) . This presentation has been prepared to assist i
Slide 3: Investment Criteria
Investment Criteria Has a leading position in an attractive and growing industry x Possesses scientific/brand differentiation, offers competitive advantages, and can benefit from additional capital and our experience x Ideal platform company to build a leading aesthetics technology company focused o
Slide 4: Vesper & HydraFacial Management
VESPER & HYDRAFACIAL MANAGEMENT BRENT SAUNDE R S Co - Founder of Vesper Experience: 25 Years • Over 25 years of experience in various aspects of healthcare • Extensive M&A experience with over 80 strategic transactions completed • Most recently Chairman, President and CEO of Allergan • Will be Execu
Slide 5: The HydraFacial Signature Treatment
THE HYDRA F ACIAL SIGNATURE TREATMENT 2 EX TRACT 3 HYDRATE 1 CLE A NSE 4 BOOST • Vortex cleaning and hydra peel exfoliation cleanses the skin and exfoliates the outermost layer, removing dead skin cells • Allows skin to reflect more light, inciting the “glow” EXTRACTION TIP • Non - irritant acid pee
Slide 6: Bridging skin correction and skin care
SKIN CORRECTION Medical delivery techno l og y - focused Lasers, Ultrasound, Fillers, Toxins SKIN CARE Daily, over - the - counter skin care Serums, Creams, Lotions, Supplements Highly effective, non - invasive and approachable treatment Bridging professional and retail skin care markets RESULTS SIM
Slide 7: Consumers increasingly willing to spend on high end beauty health
CONSUMERS ARE INCREASINGLY WILLING TO SPEND ON HIGH END BEAUTY HEALTH GROWTH IN SKINCARE INDUSTRY DRIVEN BY PREMIUM MARKET AND EMPHASIS ON SKINCARE, RATHER THAN COSMETICS Source: Vogue Business; Industry interviews. MILLENNIALS AGING INTO CATEGORY • As millennials age, they are taking skincare more
Slide 8: HydraFacial at a glance
99% “Worth It” rating on RealSelf 48% 2019 YoY Sales growth 38% 2019 YoY Adjusted EBITDA growth 30 MIN, 3 STEPS TO CREATE LOYALTY AND DRIVE LIFETIME VALUE: CLEA N SE EXTRACT HY D R A TE $167M Sales 2019 $41M Adjusted EBITDA 2019 POWERFUL COMMUNITY ESTHETICI A N C O NSUMER 38 P a t en t s 18 pending
Slide 9: Master Plan
Master Plan 9 1 Sell a lot of products and use that money to… 4 Leverage technology to connect them wherever, whenever & forever . 5 Build the ultimate flywheel of influence! 3 Find the consumers and build a direct relationship. 2 Invest in our skincare providers and use that relationship to…
Slide 10: Business Overview
BUSINESS OVERVIEW hydrafacial cOMPANY
Slide 11: HydraFacial NPS ranks highest across branded aesthetics and medtech peers
HYDRAFACIAL NPS RANKS HIGHEST ACROSS BRANDED AESTHETICS AND MEDTECH PEERS N 40 38 25 22 20 19 17 17 14 7 2 40 38 25 22 20 19 17 17 14 7 2 HydraFacial 1,007 Botox 220 CoolSculpt Lancôme Juvederm 174 343 169 Clear + Bri l liant 150 Estée L a uder 385 Dermal Inf u sion 151 Clinique Philosophy Origins 4
Slide 12: Delivery systems and consumables at a glance
THE HYDRAFACIAL DELIVERY SYSTEMS AT A GLANCE CONS U MABLES AT A GLANCE 51% of Sales (1) • Serums flow through the delivery systems during a treatment, with a new set used with each system • A new tip is used for each step within the HydraFacial treatment • The systems allow for the option to customi
Slide 13: Leading presence around the globe
Loved in 87 Countries Worldwide 15,000+ Delivery Systems LEADING PRESENCE AROUND THE GLOBE 13
Slide 14: Investment Highlights
INVESTMENT HIGHLIGHTS 14
Slide 15: Multi-dimensional growth opportunities
MULTI - DIMENSIONAL GROWTH OPPO R T U NITIES 15 Source: Euromonitor research 2020. Note: TAM calculations consist of Skincare, Personal Care and Haircare markets. • Significant white space opportunity to grow units and consumables across geographies • Brand and product extensions • Technology driven
Slide 16: Participating in two high-growth categories within personal care
16 $251 $201 $206 $212 $218 $217 $227 $235 $243 $77 $77 $77 $78 $78 $78 $79 $80 $82 $124 $129 $135 $140 $140 $149 $155 $162 $169 2016 2017 2018 2019 2020 2021 2022 2023 2024 S k i ncare Hair Care P A R TICI P A TING IN TWO HIGH - GROWTH CATEGORIES WITHIN PE R SON A L CARE SPA SERVICES GROWING ACROSS
Slide 17: Favorable market shifts benefiting the HydraFacial business model
17 FAVORABLE MARKET SHIFTS BENEFITING THE HYDRAFACIAL BUSINESS MODEL Source: Third Party Research 2019; reflecting pre - COVID conditions. SKIN HEA L TH HYDRAFACIAL IS AN AND COMPANY NOT AN OR COMPANY EXPANDING DEM OG RAPHICS SIGNIFICANT O PP O R TUNI T Y ACROSS CHANNELS Today’s consumers are seekin
Slide 18: Credible near-term path to 12% of U.S. population
CREDIBLE NEAR - TERM PATH TO 12% OF U.S. POPULATION 18 Source: Third Party Research 2019; reflects pre - COVID conditions. (1) Per month spend does not include HydraFacial treatments. FACE SUPERS FACE REGULARS FACE CASUALS ~2% of total U.S. Adult Population ~4% of total U.S. Adult Population ~6% of
Slide 19: Powerful flywheel drives competitive positioning
A DIFFEREN T I A T E D OFFERING B ENGAGED CONSU M ERS C PASSIONATE ES T H E T ICIANS D FAVORABLE SPA/CLINIC ECONO M ICS E GROWING DELIVERY SYSTEMS POWERFUL FLYWHEEL DRIVES COMPETITIVE POSITIONING 19 Source: Third party research 2019, reflecting Pre - COVID conditions. NPS as of 2019. Differentiated
Slide 20: Unique business model focused on the esthetician relationship
UNIQUE BUSINESS MODEL FOCUSED ON THE ESTHETICIAN 20 R EL A T IO N S H IP HOLDER WHAT’S IMPORTANT TO THE ESTHETICIAN VALUE IN THE ESTHETICIAN MODEL Training & C ontinued Education Access to Latest Technology & Products Loyal & Satisfied Returning Customers Marketing C apabilities 1 E DUC A T OR 2 INF
Slide 21: Provider & esthetician education
PROVIDER & ESTHETICIAN EDUCATION 21 *HFX best measure of success because of baseline of purchases & and few other influencers of behavior BOOST: business building workshop close to home Since June 2018; Acct/Attendee: 1,000/1,680 Business building Webinars JUMPSTART: fresh start for Blue Circles Sin
Slide 22: Social media powerhouse
SOCIAL MEDIA POWER HOUSE ~ 2.3 BILLION 2019 Media Impressions Significant World Tour ROI 170% ~230,000 Provider Searches in 2019 SIGNATURE EVENTS Note: reflects pre - COVID conditions. (1) Measured in 2019 IN THE PRESS 16% Instagram Engagement Rate Industry Leading (1) 22
Slide 23: Visionary and experienced management team
200+ CO L LECTI V E YEARS OF EXPERIENCE within the sector LED BY A VISIONARY AND EXPERIENCED MANAGEMENT TEAM CLINT CARNELL Chief Executive Officer Experience: 25 Years MINGO KU VP & GM, APAC Experience: 22 Years ROSEMARIE HOLCOMB Senior Director, Marketing Communications Experience: 11 Years DAN WAT
Slide 24: Investment Highlights
Investment Highlights CATEGORY CREATING PRODUCT • Innovative product extension into IOT with data connection, personalization and clean beauty in skin and scalp health LEADING PLATFORM • Established, unique partnerships across many channels COMPELLING ECONOMIC PROFILE • High value and high margin eq
Slide 25: Growth & Financials
GROWTH & FINANCIALS 25
Slide 26: Strategic initiatives
STRATEGIC INITIATIVES RELENTLESSLY INNOVATE AS A CATEGORY CREATOR □ Category Ownership - Skin & Scalp Health □ 2.0 with personalized services to launch in 2022 □ Value - added innovation across all touchpoints – serums, devices, and experiences DRIVE CONSUMER DEMAND WITHIN THE ECOSYSTEM □ Turn up ma
Slide 27: Historical performance
HISTORICAL PERFORMANCE 27 – Continued domestic momentum combined with significant growth from recent international expansion – System upgrade cycle driven by the introduction of delivery systems in 2016 – Rapidly growing numbers of delivery systems with increasing recurring revenue in both the US an
Slide 28: Historical and 2020A delivery systems
8,679 9,286 9,834 10,524 11,218 1 2 ,0 5 2 12,829 13,872 14,421 1 4 ,4 9 5 15,124 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 HISTORICAL AND 2020A DELIVERY SYSTEMS 28 HF DELIVERY SYSTEMS (1) — 2018A THROUGH YTD 2020A (# UNITS) Achieved record total delivery systems i
Slide 29: Monthly performance
$11 $9 $14 $13 $13 $17 $12 $12 $15 $13 $12 $8 $1 $3 $9 $10 $9 $15 J an Feb M ar Apr M ay Jun Jul Aug Sep YTD 2020A MONTHLY PERFORMANCE (CONT’D) 29 KEY T AKE A W A Y S • 2020 monthly revenue is rebounding rapidly towards 2019 levels, demonstrating a strong recovery across the business – Quick ramp ba
Slide 30: Historical and projected financial summary
HISTORICAL AND PROJECTED FINANCIAL SUMMARY 30 Longer Term Outlook ($ IN MILLIONS) 2018A 2019A 2020E 2021E 2022E Net Sales $112 $167 $115 $181 $250 Sales Growth % 70 % 48 % (31)% 57 % 38 % Adj. Gross Profit $84 $125 $76 $133 $189 Adj. Gross Margin % 75% 75% 66% 73% 76% Adj. EBITDA $30 $41 $8 $25 $41
Slide 31: Transaction overview
TRANSACTION OVERVIEW ($ IN MILLIONS) 31 OWNERSHIP POST - BUSINESS COMBINATION ADDITIONAL TRANSACTION DETAILS • Pro forma enterprise value of $1.14bn • $350mm pipe raised at $10 per share • Transaction expected to close in the first half of 2021 Note: Assumes no redemptions from Vesper’s existing pub
Slide 32: Valuation benchmarking
4.6x 5.7x 9.0x 5 . 9 x 6 . 9 x 5.3x 5.2x Hy d rafa c i a l In M o d e Al i gn Peloton L u l u l e m o n Median: 6.4x Median: 5.3x Median: 7.4x 20.6 % 43.0 % 29.0 % 21.1 % 7.7 % 9.4 % Hy d rafa c i a l In M o d e Al i gn Peloton L u l u l e m o n L 'O réa l Estée Lauder 2020E to 2022E Revenue CAGR Me
Slide 33: Appendix
APPENDIX hydrafacial
Slide 34: Vesper is supported by a best in class board of directors
VESPER IS SUPPORTED BY A BEST IN CLASS BOARD OF DIRECTORS Board of Directors • Former Chairman, President and CEO of Allergan • Former CEO of Bausch & Lomb, Forest Labs, and Actavis Brent Saunders • Former SVP of Strategic Initiatives, Portfolio Innovation and IR of Allergan • Former Executive Direc
Slide 35: Vesper and HydraFacial are strengthened by advisors
VESPER AND HYDRAFACIAL ARE STRENGTHENED BY ADVISORS Desiree Gruber is a Peabody Award - winner and was the co - founder and executive producer of the Project Runway television series for 16 years. She’s now the founder of Full Picture, a brand accelerator, content production, communications, and con
Slide 36: Evolution of the HydraFacial story
EVOLUTION OF THE HYDRAFACIAL STORY 36 MORE THAN TRIPLED THE BUSINESS FROM $48M NET SALES IN 2016 TO $167M IN 2019 CREATING AND DEFINING A CATEGORY (2017 – 2019) BUILDING A PRODUCT COMPANY (1997 – 2016) PLAYING OFFENSE DURING COVID (2020) U N LEASHING THE BRAND DIRECT TO CONSUMER (2021 and Beyond) No
Slide 37: Competitively differentiated product creates consumer pull and provider push
37 HYDRAFACIAL’S COMPETITIVELY DIFFERENTIATED PRODUCT CREATES CONSUMER PULL AND PROVIDER PUSH Source: Third party research July 2019; reflects pre - COVID conditions. Note: NPS = Net Promoter Score as of 2019; Other brands listed are top 5 treatment and top 5 skincare brands used by HydraFacial user
Slide 38: Growing portfolio of leading partnerships
38 GROWING PORTFOLIO OF LEADING PARTNERSHIPS (2 0 1 9 ) (2 0 1 8 ) (2 0 1 8 ) (2 0 1 7 ) (2017 protocol) (2 0 1 8 ) (coming 2021) (2 0 1 9 ) MEDICAL/MED SPA SPAS/RESORTS PARTNER BOOSTERS BEAUTY RETAIL Spas operated by nurse practitioners, estheticians and PAs overseen by physicians, as well as plast
Slide 39: Recurring nature of business model
8, 1 25 1 0 ,5 2 4 1 3 ,8 7 2 1 5 ,1 2 4 '17 '18 '19 Q3 '20 RECURRING NATURE OF BUSINESS MODEL 39 • Once installed, systems generate meaningful recurring revenue • 51% of 2019 revenue from consumables and expected to grow over time as installed base expands • Consumables grow as utilization increase
Slide 40: Playing offense during COVID and business recovery
PLAYING OFFENSE DURING COVID AND BUSINESS RECOVERY 2020 MONTHLY REVENUE HAS REBOUNDED RAPIDLY TOWARDS 2019 LEVELS 40 CREATIVE RES P ONSES INITIAL IMPACT IMPROVING ENV I RO N MENT STATE OF B U S I NESS □ Managed business steadily through COVID □ Contained impact of salon and store closures to Spring
Slide 41: HydraFacial current owners
HYDRAFACIAL CURRENT OWNERS • Chicago - based private equity firm focused exclusively on the healthcare industry • One of the country’s largest dedicated healthcare private equity firms, having invested over $2 billion and raised nearly $3 billion of commitments since founding • Linden’s strategy is
Slide 42: Historical income statement
HISTORICAL INCOME STATEMENT ($ IN MILLIONS) 42 Note: The above financial statements are in draft form and based on internal financial reports as of November 12, 2020. These figures may not include all adjustments required by GAAP under PCAOB standards. The above figures include non - GAAP financial
Slide 43: 2018 and 2019 Adjusted EBITDA bridge
2018 AND 2019 ADJUSTED EBITDA BRIDGE ($ IN MILLIONS) 43 Source: Company Financials. (1) Quarterly and transaction related management fees paid to private equity sponsors, board of director fees and expenses. Note: The above financial statements are in draft form and based on internal financial repor
Vesper Healthcare Acquisition — SPAC Merger (December 2020) on 6ix