e.l.f. Beauty, Inc. · NYSE:ELF
e.l.f. Beauty — Q3 FY2022 Earnings Presentation
82 slides from e.l.f. Beauty's earnings presentation, Feb 2, 2022
Slide 1: Q3 FY2022 Earnings Webcast
Q 3 F Y 2 0 2 2 E A R N ING S W EBC AS T F E B R U A RY 2, 2 02 2 S K I N
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 Q3 FY 2022 RESU LTS GUID AN CE
Slide 5: 12 Consecutive Quarters of Net Sales Growth
12 CONSECUTIVE QUARTERS OF NET SALES GROWTH +50% +27% +24% +16% +11% +10% +11% +7% +8% +8% +7% +3% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY 19 FY 20 FY 20 FY 20 FY 20 FY 21 FY 21 FY 21 FY 21 FY 22 FY 22 FY 22 NET SALES GROWTH BY QUARTER, EXCLUDING E.L.F. STORES (CLOSED IN FEBRUARY 2019)
Slide 6: Q3 FY2022 Net Sales
+ 11 20 % $ 98 VS. LY MILLION Q3 FY 2022 NET SALES
Slide 7: Q3 FY2022 Adjusted EBITDA
+ 18 % $ 22 VS. LY MILLION Q3 FY 2022 ADJUSTED EBITDA
Slide 8: Raising FY2022 Guidance
RAISING FY 202 2 GUIDANCE
Slide 9: Innovation, Digital, Value Proposition, Adapt at e.l.f. Speed
DIGITAL INNOVATION ST RATEGY CORE VALUE ADAP T AT PROPOSITION E.L.F. SP EED
Slide 10: 5.7% Market Share
5.7% MARKET SHARE +86 BPS NIELSEN XAOC LATEST 12 WEEKS ENDING 1/1/2022, COLOR COSMETICS CATEGORY VS. 2019
Slide 11: Top Color Cosmetics Brands Share Change vs. 2019
TOP 5 COLOR COS MET ICS B RANDS SHARE (BPS) VS. 2019 E.L.F. 140 +120 105 70 35 0 MAYBELLINE -35 -6 -70 L’OREAL -51 -105 -140 Maybelline L'Oreal COVERGIRL Cover Girl REVLON Revlon e.l.f. -137 -135 NIELSEN XAOC LATEST 52 WEEKS ENDING 1/1/2022, COLOR COSMETICS CATEGORY
Slide 12: Performance Fueled by Our 5 Strategic Imperatives
PERFORMANCE FUELED BY OUR 5 STRATEGIC IMPERATIVES DRIVE DRIVING COST STEP UP LEADING BRAND P R O D U C T- S AV I N G S D I G I TA L I N N O VAT I O N DEMAND IVITY
Slide 13: Drive Brand Demand
DRI VE BR AND DEMA ND
Slide 14: Transcending Beauty Boundaries
TRANSCENDING BEAUTY BOUNDARIES
Slide 15: First TikTok Movie to Celebrate the Holidays
FIRST TIKTOK MOVIE TO CELEBRATE THE HOLIDAYS
Slide 16: New Gaming Program to Find the Next Gaming Superstar
NEW GAMING PROGRAM TO FIND THE NEXT GAMING SUPERSTAR
Slide 17: TikTok Culture Drivers List
TIKTOK NAMED E.L.F. TO ITS CULTURE DRIVERS LIST 1 OF ONLY 14 OTHER BRANDS
Slide 18: Talent Search and Hashtag Challenge with Simon Fuller and TikTok
LAUNCHED A NEW TALENT SEARCH & HASHTAG CHALLENGE WITH SIMON FULLER AND TIKTOK SIMON FULLER #elfitup
Slide 19: ~7B Press Impressions
FEATURING RENEWING kK YS BODY + HAND WASH ELLE e What's On Your Wishlist? 5 Beauty Pros Share SOULCARE ~/7B PRESS IMPRESSIONS lheir New Season Essentials
Slide 20: Recognized Across the Industry
RECOGNIZED ACROSS THE INDUSTRY
Slide 21: Major Step Up in Digital
MAJOR STEP U P IN DIGITAL
Slide 22: Triple Digit Growth in Digital Consumption
TRIPLE DI GIT GROW TH Q3 FY 2022 YEAR-TO-DATE DIGITAL CONSUMPTION GROWTH ON 2-YEAR STACK BASIS VS. 2019 LEVELS
Slide 23: Digital Commerce Penetration
DIG ITAL COMMERCE PENETR ATION 10 % 14 % Q3 Q3 FY 2020 FY 2022
Slide 24: >12M Followers
NEW > 12M FOLLOWERS INCLUDES SOCIAL MEDIA FOLLOWERS AND BEAUTY SQUAD MEMBERS.
Slide 25: ~50% New Consumers Shopping elfcosmetics.com
~50% NEW CONSUMERS SHOPPING ELFCOSMETICS.COM % OF NEW CONSUMERS PURCHASING ON ELFCOSMETICS.COM, Q3 FY 2022
Slide 26: Beauty Squad Loyalty Program >2.7M Members
E.L.F. COSMETICS BEAUTY SQUAD LOYALTY PROGRAM >2.7M MEMBER S >20 % GR OWTH BEAUTY SQUAD LOYALTY MEMBERS AS OF 12/31/2021 | Q3 FY 2022 GROWTH IN TOTAL ENROLLMENT VERSUS PY
Slide 27: Beauty Squad Integral Source of First Party Data
BEAUTY SQUAD INTEGRAL SOURCE OF FIRST PARTY DATA
Slide 28: Keys Soulcare Rewards
SOULCARE © ae REWARDS ¢ keyssouleare.com 6 wi woos KEYS aaa SOULCARE REWARDS THESE PERKS p ARF KFY @ *
Slide 29: New First in Beauty Digital Gifting Experience
NEW FIRST IN BEAUTY DIGITAL GIFTING EXPERIENCE
Slide 30: Leading Innovation
LEADIN G INNOVATIO N
Slide 31: Our Super Powers
OUR SU PER PO WERS CRUELTY PREMIUM ACCESSIBLE BROAD FREE QUALITY PRICES APPEAL
Slide 32: Strength in Core Segments
STRENG TH IN C ORE SEGMENT S NIELSEN XAOC LATEST 12 WEEKS ENDING 1/1/2022, COLOR COSMETICS CATEGORY #1 #1 #2 #2 #2 BRUSHES PRIMERS CONCEALER EYEBROW SPONGES $ SHARE $ SHARE $ SHARE UNIT SHARE $ SHARE
Slide 33: Launched New Power Grip Primer
LAUNCHED N EW POWER GRIP PRIMER $10 VS $ 34 POWER GRIP PRESTIGE PRIMER EQUIVALENT
Slide 34: Building Upon the Success of Our Camo Franchise
BUI LDING UPO N THE SUCCESS OF OUR CAMO FRANCHISE
Slide 35: Launched the New Camo Powder Foundation
LAU NCH ED THE NEW CAMO POW DER FOUNDATION VS $11 $ 38 PRESTIGE EQUIVALENT CAMO POWDER FOUNDATION
Slide 36: Launched the New Brow Lift
LAU NCHED TH E N EW BROW LIFT VS $6 $ 23 PRESTIGE BROW LIFT EQUIVALENT
Slide 37: Launched the New Glossy Lip Stains
LAUNCHED TH E NEW GLOSSY LI P STAI NS $6 VS $ 38 GLOSSY PRESTIGE LIP STAINS EQUIVALENT
Slide 38: Skincare Focus
SKINCARE FOCUS a
Slide 39: Skincare Consumption
SKI NC A RE C ON S U M P T I ON + 29 % +9% E.L.F. SKIN CA RE SKIN CATEGO RY YOY CONSUMPTION GROWTH. NIELSEN XAOC LATEST 12 WEEKS ENDING 1/1/2022
Slide 40: Pure Skin
PURE SKIN ++ DERMATOLOGIST DEVELOPED \ FRAGRANCE-FREE 1/Cleanse. 2/Tone.~—<_- 2/Nol
Slide 41: Launched Well People Skincare
LAUNCHED WELL PEOPLE SKI NC ARE
Slide 42: Extended Shade Ranges in Best Selling Items
EXTEN DED SHADE RA NGES IN BES T SELLING ITEMS 4 TO 14 10 TO 14 6 T O 20 SHADES SHADES SHADES
Slide 43: New Body Care Offerings
NEW B OD Y CAR E OF FERI NGS
Slide 44: Named to Coveted Beauty Lists
NAMED TO C OVET ED B EAUTY L ISTS BES T IN CELEBRITY BEA UTY BEA UTY INNO VATO R AWARD
Slide 45: Driving Productivity
DRIVING PRODU CTIVITY
Slide 46: Productivity
lo PRODUCTIVITY
Slide 47: e.l.f. Cosmetics Space Expansion
E.L.F. COS MET ICS SPACE EXPA NS IO N FAL L 2 0 2 1 S P R I NG 20 2 2 SPRING 2 0 22
Slide 48: International
INTERNATION AL
Slide 49: Sales Trend - Top 10 U.K. Mass Color Cosmetics Brands
SALES TR END - TOP 10 U.K . MAS S COLOR COSMETICS BRANDS MAYBELLINE -4% RIMMEL -18% L’OREAL -23% MAX FACTOR -35% COLLECTION -18% #8 REVOLUTION -43% 2021 REVLON -32% E.L.F. +42% +42% MAKEUP ACADEMY -27% PRIVATE LABEL -51% -60 -45 NIELSEN UK, -30 -15ENDING 1/1/22 LATEST 52 WEEKS 0 VS 2019 15 30 45 60
Slide 50: New Limited Edition Collection at Walmart in the U.S.
NEW! LIMITED EDITION C OLL ECTION AT WALMART IN TH E U. S.
Slide 51: Global Retail Strategy
GLOBAL RETAIL STRAT EGY 51
Slide 52: Canada Retail Partners
cult BEAUTY dt beauty LOUGLAS SEPHORA (CANADA)
Slide 53: Slide 53
Slide 54: Cost Savings
COST SAVIN GS
Slide 55: Navigating Global Container Imbalance
NAVIGATING GLOBAL CO NTAINER I MBALANCE
Slide 56: ~95% In Stock Levels
~95% IN STOCK LEVELS e.l.f.ing e.l.f.ing unstoppable. e.l.f.ing crushing it. e.l.f.ing confident. bold.
Slide 57: Increasing Prices March 2022 on a Subset of SKUs
INCREA SI NG P RICES MARCH 202 2 ON A SU BS ET OF SK US
Slide 58: Balanced Approach Offsetting Elevated Costs
BALANC ED APPROA CH MAINTA IN IN G OFFSET T IN G STRONG ELEVATED VALUE COST S PRO POSITIO N
Slide 59: Clean & Sustainable
CLEAN & SUSTAINAB LE
Slide 60: Well People & Keys Soulcare Launched as Clean & Sustainable Minded Brands
WELL PEO P LE & K EYS SO U LC A R E: L AU N C HE D AS CL EA N & SUS TA I NA B LE M I N DE D B R AN D S
Slide 61: Reformulated 350+ SKUs on e.l.f.
REFORM ULAT ED 350+ S KUS ON E.L.F. 1650+ IN GREDIENTS WE DO NO T US E 100% CLEAN
Slide 62: Project Unicorn Eliminated Over 1,000,000 Pounds of Packaging
PROJ ECT UNIC ORN ELIMI NATED MORE THAN 1,000,000 POUNDS OF PACKAGI NG
Slide 63: Project Unicorn Evolved to Project Green Unicorn
EVOLVED PROJECT UNI CORN TO PROJECT GREEN UNICORN LONG TERM IN ITI ATIVE
Slide 64: Mandy Fields, SVP & Chief Financial Officer
MANDY FIELDS SENIOR VICE PRESIDENT & CHIEF FINANCIAL OFFICER
Slide 65: Q3 FY2022 Net Sales
+ 11 20 % VS. LY $ 98 MILLION Q3 FY 2022 NET SALES
Slide 66: Q3 FY2022 Gross Margin
+110 BP S VS. LY 66 % GROSS MARGIN Q3 FY 2022
Slide 67: Gross Margin Drivers
GR O S S MA R G I N DRIVE RS M A RG IN CO ST P R IC E FX TRA NSPORT AC C RE T I VE SAVI N G S I N C R E A SE S RATES C OSTS MIX Q3 FY 2022
Slide 68: Q3 FY2022 Adjusted SG&A
+ 70 BP S 50 % VS. LY ADJUSTED SG&A Q3 FY 2022
Slide 69: Marketing & Digital Investment
M A R K E T I N G & D I G I TA L INVE STME NT 15 % 15-17 % Q3 FY 22 Q3 FY 2022. MARKETING & DIGITAL INVESTMENT AS A % OF NET SALES.
Slide 70: Q3 FY2022 Adjusted EBITDA
22 % MARGIN $ 22 M ADJUSTED EBITDA Q3 FY 2022
Slide 71: Adjusted Net Income and Adjusted EPS
AD J US T ED N E T I N C OM E A DJU STED EP S $ 13M $ 0.24 $ 12M $ 0.22 Q3 Q3 Q3 Q3 FY 2021 FY 2022 FY 2021 FY 2022
Slide 72: Strong Liquidity
STR ONG LIQUIDI TY ~$ 130 M CASH ON HAND + REVOLVING CREDIT FACILITY Q3 FY 2022
Slide 73: Debt and Cash Balance
$ 13 M DEB T $ 33 M CASH BALANCE Q3 FY 2022
Slide 74: Inventory
$ 85 M INVENTORY Q3 FY 2022
Slide 75: Inventory Drivers
INVENTORY DRIVERS L ON GE R H I GH E R K EY S C ONTINU E D L EA D T R A N S P OR TAT I O N SO ULC A RE & BU SINESS TI ME S COSTS W E LL PE OPLE MO ME NTU M
Slide 76: Cash Priorities
C A S H P R IO RITIES I NV E S T I N G I N SU P P ORTING F IV E S T R AT E GI C STRATE GIC I M P E RAT I VE S E XTE NSIO NS
Slide 77: Fiscal 2022 Guidance
NET SALES ADJUSTED EBITDA +17 % TO 19 % $ 70M TO $ 72M FISCAL 2022 GUIDANCE ADJUSTED EPS ADJUSTED NET INCOME $ 0.73 TO $ 0.76 $ 40M TO $ 42M
Slide 78: Strong 2-Year Stack Growth
STRONG 2-YEAR STACK GROWTH
Slide 79: Lapping Stimulus
LAPPING STIMULUS
Slide 80: Cycling Strong Nielsen Consumption Behind Stimulus
CYC LI N G S TR O N G N I E L S E N C O N S U M P TIO N BE HIND STIMU LU S I N M A RC H A ND APRIL 40 % 52 % MA RC H 20 21 A PRIL 2 0 21 NIELSEN CONSUMPTION GROWTH XAOC 4 WEEKS ENDING MARCH AND APRIL 2021
Slide 81: FY2022 Adjusted EBITDA Outlook
EXP E CTI N G ST R O N G A D J U S T E D E B ITDA GRO WTH IN FY 22 , I N S PI T E O F C OS T H EA DW INDS 15-18% $ 70 – $ 72 M G ROW TH ADJUS TED EBITDA FY 2022 OUTLOOK
Slide 82: Inclusive. Accessible. Cruelty Free.
I N C L U S IV E . A C C E S S I B LE . CRU E LTY FREE . S K I N