Q2 2022 Waldencast PLC Earnings Call
Thank you for standing by this is the conference operator, and welcome to the Walden cash second quarter fiscal 2022 earnings call.
Speaker 1: Thank you for standing by. This is the conference operator, and welcome to the Waldencast second quarter fiscal 2022 earnings call.
As a reminder, all participants are in a listen only mode and the conference is being recorded.
Speaker 1: As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question-
After the presentation, there will be an opportunity to ask questions.
To join the question queue. You May Press Star then one on your telephone keypad should you need assistance during the conference call you May signal, an operator by pressing star Zero I would now like to turn the conference over to Allison Malkin of ICR. Please go ahead.
To join the question queue you may press star then 1 on your telephone keypad. Should you need assistance during the conference call you may signal an operator by pressing star and 0. I would now like to turn the conference over to Alison Malkin of ICR.
Speaker 1: need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Allison Malkin.
And welcome to the Walgreens <unk> plc second quarter and first half 2022 earnings call with me today is Michele <unk>, founder and Chief Executive Officer, and Chief Financial Officer for today's call Michelle will begin with a review of the Wildcats mission.
Speaker 2: Thank you and welcome to the Walden Cap PLC second quarter and first half 2022 earnings call. With me today is Michelle Brousset, founder, chief executive officer and chief financial officer.
Thank you and welcome to the Walden-Kapp PLC second quarter and first half 2022 earnings call. With me today is Michelle Brousset, founder, chief executive officer, and chief financial officer.
Speaker 2: For today's call, Michelle will begin with a review of the Walden Cast mission and the advantages of our business model, followed by a review of our second quarter and first half financial performance, and then provide additional details regarding our growth strategy and highlight our ESG accomplishments.
The advantages of our business model, followed by a review of our second quarter and first half financial performance and then provide additional detail regarding our growth strategy and highlight our ESG accomplishments.
For today's call, Michelle will begin with a review of the Waldencast mission and the advantages of our business model, followed by a review of our second quarter and first half financial performance, and then provide additional details regarding our growth strategies and highlight our ESG accomplishments.
After the prepared remarks, the operator will open the call to take questions before we start I would like to remind you that management will make certain statements today, which are forward looking including statements about the outlook of oil and gas business and other matters referenced in the company's earnings release issued today.
Speaker 2: After the prepared remarks, the operator will open the call to take questions.
After the prepared remarks, the operator will open the call to take questions.
Speaker 2: Before we start, I would like to remind you that management will make certain statements today which are forward-looking, including statements about the outlook of WaldenKast's business and other matters referenced in the company's earnings release issued today.
Before we start, I would like to remind you that management will make certain statements today which are forward-looking, including statements about the outlook of Waldenkast Business and other matters referenced in the company's earnings relief issued today. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected in or implied by such statements. For additional information regarding these factors, please visit www.fema.gov.
Each forward looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected in or implied by such statements. Additional information regarding these factors appears under the heading cautionary note regarding forward looking statements in the company's earnings.
Speaker 2: Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected in or implied by such statements.
Speaker 2: Additional information regarding these factors appears under the heading cautionary note regarding forward-looking statements in the company's earnings release and in the company's filings that it makes with the Securities and Exchange Commission that are available at www.sec.gov and on the investor relations section of the company's website at ir.waldencast.com.
The release and in the company's filings that it makes with the Securities and Exchange Commission that are available at Www Dot said that though.
appears under the heading, Cautionary Note Regarding Forward-Looking Statements in the Company's Earnings Release and in the Company's Filings that it makes with the Securities and Exchange Commission that are available at www.SEC.gov and on the investor relations section of the company's website at ir.waldenkapp.com
On the Investor Relations section of the company's web site at IR Dot Walden cap Dot com.
The forward looking statements on this call speak only as of the original date of this call and we undertake no obligation to update or revise any of these statements.
Speaker 2: The forward-looking statements on this call speak only as of the original date of this call, and we undertake no obligation to update or revise any of these statements. Also, during this call, management will discuss certain non-GAAP financial measures which management believes can be useful in evaluating the company's performance.
The forward-looking statements on this call speak only as of the original date of this call, and we undertake no obligation to update or revise any of these statements. Also, during this call, management will discuss certain non-GAAP financial measures, which management believes can be useful in evaluating the company's performance.
Also during this call management will discuss certain non-GAAP financial measures, which management believes can be useful in evaluating the company's performance.
The presentation of non-GAAP measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.
Speaker 2: The presentation of non-GAAP measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.
The presentation of non-GAAP measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. You will find additional information regarding these non-GAAP financial measures and a reconciliation of these non-GAAP to the most directly comparable GAAP measures in the company's earnings release. A live broadcast of this call is also available on the investor relations section of the company's website.
You will find additional information regarding these non-GAAP financial measures and a reconciliation of these non-GAAP .
Speaker 2: you will find additional information regarding these non-GAAP financial measures and a reconciliation of these non-GAAP to the most directly comparable GAAP measures in the company's earnings relationship.
Most directly comparable GAAP measures in the company's earnings release, a live broadcast of this call is also available on the Investor Relations section of the company's website at IR Dot Walden Cat Dot Com I will now turn the call over to Michele.
Speaker 2: A live broadcast of this call is also available on the investor relations section of the company's website at ir.waldencast.com I will now turn the call over to Michelle Breset.
I will now turn the call over to Michelle Brissette.
Thank you Allison and good morning, everyone.
I am pleased to speak to you today and share our strong second quarter and first half performance with a period, marking an important milestone for our company.
Thank you, Alison, and good morning, everyone.
Speaker 3: I am pleased to speak to you today and share a strong second quarter and first half performance with a period marking an important milestone for our company as we enter the public markets as Waldenkast PLC.
I am pleased to speak to you today and share a strong second quarter and first half performance with a period marking an important milestone for our company as we enter the public markets as Waldenkraft's PLC.
The public markets welding cuffs DLT.
Before I discuss our results for those new to Walden Gosh, Let me first highlight our mission and why we chose to play in the beauty and wellness space and believe we are uniquely positioned to build a global best in class operating platform is beautiful industry.
Speaker 3: Before I discuss our results for those new to Waldencast, let me first highlight our mission and why we chose to play in the beauty and wellness space and believe we are uniquely positioned to build a global best-in-class operating platform in this beautiful industry. A platform built for both speed, scale and profitability.
Before I discuss our results for those new to Wildencast
Let me first highlight our mission and why we chose to play in the beauty and wellness space and believe we are uniquely positioned to build a global best-in-class operating platform in this beautiful industry. A platform built for both speed, scale and profitability.
Platform build for both speed scale and profitability.
I started Walden Gulf three years ago with my co founder Gene <unk>. Following a wonderful 25 year career running consumer Bronx, Brooklyn Gamble, most recently l'oreal or I wasn't group prescient with North America Consumer Division and before that she also U K.
Speaker 3: I started Waldenkaff three years ago with my co-founder, Hint Septi, following a wonderful 25-year career running consumer brands at Procter & Gamble and most recently L'Oreal, where I was Group President of North America Consumer Division and before that CEO of the UK.
I started Waldenkaff three years ago with my cofounder, Hint Septi, following a wonderful 25-year career running consumer brands at Procter & Gamble, and most recently L'Oreal where I was Group President of North America Consumer Division, and before that CEO of the UK and Ireland.
With Walden guest.
Re margin the beauty company in the future.
Speaker 3: With Waldencast, we have reimagined the beauty company of the future, the home of high-growth, highly profitable brands that have a relevant and authentic connection to the consumers of today and tomorrow.
Home of high growth highly profitable brands that have a relevant tend to connection to a cold tumor cells today and tomorrow.
with Walden Gust.
we have reimagined the beauty company of the future, the home of high-growth, highly profitable brands that have a relevant and authentic connection to the consumers of today and tomorrow.
Our best in class beauty and wellness multi brand platform that creates acquires accelerates some scales. The next generation hydro purpose driven brands.
Speaker 3: A best-in-class beauty and wellness multi-brand platform that creates, acquires, accelerates, and scales the next generation of high-growth, purpose-driven products.
A best-in-class beauty and wellness multi-brand platform that creates, acquires, accelerates, and scales the next generation of high-growth, purpose-driven brands.
Okay.
First we are a beauty player why because beauty is the most beautiful long distances and a business that we know extremely well.
Speaker 3: First, we're a beauty player. Why? Because beauty is the most beautiful of businesses and a business that we know extremely well.
First, we are a beauty player. Why? Because beauty is the most beautiful of businesses.
First the category underpinned by attractive growth drivers with always growing consumer desire for quality over price.
Speaker 3: First, the category is underpinned by attractive growth drivers with always growing consumer desire for quality of a price.
and a business that we know extremely well.
First, the category is underpinned by attractive growth drivers with always growing consumer desire for quality over price.
Increasing appetite for innovative from higher performance products, particularly categories like skincare and makeup.
Speaker 3: increasing appetite for innovative and higher performance products, particularly in categories like skincare and makeup.
increasing appetite for innovative and higher performance products, particularly in categories like skincare and makeup.
The ever continued emerging market expansion with a rifle middle classes are huge markets like China, India, Indonesia and Brazil.
Speaker 3: the ever continued emerging market expansion with a rise of middle classes in huge markets like China, India, Indonesia and Brazil.
the ever continued emerging market expansion with the rise of middle classes in huge markets like China, India, Indonesia and Brazil.
Acceleration of continuous adaptability to e-commerce.
Speaker 3: acceleration and continued adaptability to e-commerce and beauty tech, particularly by skincare and makeup consumers.
Thick articulated by skincare and makeup go Schwartz.
acceleration and continued adaptability to e-commerce, and Beauty Tech, particularly by skincare and makeup consumers.
And second he has proven resilient through various economic cycles, and we'll certain categories can be impacted basically that Charles beauty overall remains consistent things through multiple subcategories.
Speaker 3: And second, it has proven resilience through various economic cycles. And while certain categories can be impacted by significant trends, beauty overall remains consistent thanks to its multiple subcategories.
And second it has proven resilience through various economic cycles and while certain categories can be impacted by sick leave veterans.
Beauty overall remains consistent thanks to its multiple subcategories.
It is also a highly fragmented market that is ready for a change as evidenced by interesting characteristics of Hudson.
Speaker 3: Beauty is also a highly fragmented market that is ready for a change as evidenced by interesting characteristics that have been identified by the
Beauty is also a highly fragmented market that is ready for a change as evidenced by interesting characteristics that have emerged.
First it is a highly fragmented market with adult plus players representing only 32% of the market.
Speaker 3: First, it is a highly fragmented market with the top 5 players representing only 32% of the market.
First, it is a highly fragmented market with the top 5 players representing only 32% of the market.
Second.
It's not a winner takes all market some marketable expandable consumption, where a company's ability to grow is only limited by our ability to innovate and presenter consumers new and interesting offering.
Speaker 3: Second, this is not a winner-takes-all market. It's a market of expandable consumption, where a company's ability to grow is only limited by its ability to innovate and present to consumers new and interesting offerings, and connecting with them in meaningful and relevant ways.
Second.
This is not a winner-takes-all market. It is a market of expandable consumption where a company's ability to grow is only limited by its ability to innovate and present to consumers new and interesting offerings and connecting with them in meaningful and relevant ways.
With them being meaningful and relevant ways.
Kurt.
East coast, so much specificity over the category lots of rice with digital and more responsive asset light business models.
Speaker 3: This consumer specificity of the category plus the rise of digital and more responsive asset-like business models have driven the rise of compelling emerging players, independent or indie brands, that are driving growth and gaining market share. This explosion of new indie brands creates a clear opportunity to aggregate emerging brands under a new, modern, multi-brand platform to help them accelerate growth and scale globally.
Thank you.
This consumer specificity of the category, plus the rise of digital and more responsive asset-like business models.
Given the rise of compelling emerging players will dependent oriented brands that are driving growth and gaining market share.
have driven the rise of compelling emerging players, independent or independent, that are driving growth and gaining market share.
Explosion on new indie brands create a clear opportunity to aggregate the emerging brands and there are new modern multi brand platform to help them accelerate growth.
This explosion of new indie brands creates a clear opportunity to aggregate emerging brands under a new, modern, multi-brand platform to help them accelerate their growth.
Growth and scale globally.
Well, we're creating with Walden dust is an incredibly powerful combination.
Speaker 3: What we're creating with World in Gas is an incredibly powerful combination.
growth and scale globally.
Welding tasks multi brand platform built for growth and profitability.
What we're creating is Walden Gas.
Speaker 3: First, WorldNCAF is a multi-brand platform built for growth and profitability. A household brand builds...
is an incredibly powerful combination.
First, Wildenkaff is a multi-brand platform built for growth and profitability.
Household brands built for speed and scale.
It is a balanced portfolio places some of the most structurally attractive segments in beauty.
Speaker 3: It's balanced portfolio plays in some of the most structurally attractive segments in beauty and allow us to mitigate the risk linked to single subcategory fluctuations.
A household branch built for speed and scale.
Its balanced portfolio plays in some of the most structurally attractive segments in beauty and allow us to mitigate the risk linked to single subcategory fluctuations.
Now us to meet to get the risk linked to single subcategory fluctuations.
We have the expertise in managing and scaling Gucci Bronco businesses, which we intend to do while keeping our asset light structure and agility to retain that market responsiveness and speed.
Speaker 3: We have the expertise in managing and scaling beauty brands and businesses, which we intend to do while keeping an asset-light structure and agility to retain the market responsiveness and speed of entrepreneurial indie brands versus a slow, inflexible and costly traditional stock market degree. business.
We have the expertise in managing and scaling beauty brands and businesses, which we intend to do while keeping an asset-like structure and agility to retain the market responsiveness and speed of entrepreneurial indie brands versus slow, inflexible, and costly traditional structures.
So can the indie brands versus the slow flexi cost me traditional structures.
And importantly, our management incentives create strong alignment to long term value creation.
Speaker 3: Importantly, our management incentives create a strong alignment to long-term value creation through operational and capital allocation excellence.
Importantly, our management incentives create a strong alignment to long-term value creation through operational and capital allocation excellence.
Operational and capital allocation excellence.
Now before I share with you our Q2 performance.
Completed outstanding first Hustled Walden Gosh, let me ground up first in the strong performance of the market we play.
Now before I share with you our Q2 performance.
Speaker 3: that completed outstanding first-hard for welding gas. Let me ground up first in the strong performance of the market we're playing. Beauty is once again.
that completed an outstanding first half of Waldenkast. Let me ground up first in the strong performance of the marker we play in.
Beauty is once again, the most beautiful businesses.
Looking at M. P. DS you a selective market data, where we play with our portfolio of brands.
Speaker 3: Looking at MPD's US selective market data, where we play with our portfolio of brands, the market grew at a strong 17.3% in the first half of 2020.
Beauty is once again the most beautiful of businesses.
Market grew a strong 17, 3% in the first half of 2022.
Looking at NPD's US selective market data where we play with our portfolio branch, the market grew at a strong 17.3% in the first half of 2022.
Q2 slowdown slightly due to a stronger 2021 days, but it's still very dynamic at 15, 9%.
Speaker 3: Q2 slowed down slightly due to a stronger 2021 base, but is still very dynamic at 15.9% despite the challenging global pandemic.
Q2 slowed down slightly due to a stronger 2021 base, but is still very dynamic at 15.9% despite the challenging global context.
The challenging global context.
Assuming them to make up the category has bounced back strongly post pandemic growing ahead of the category up 20% in the first half for maintaining a strong 18, 5% in Q2.
Speaker 3: Assuming onto makeup, the category has bounced back strongly post-pandemic, growing ahead of the category at 20%, maintaining a strong 18.5% on Q2.
Assuming onto make-up, the category has bounced back strongly post-pandemic, growing ahead of the category at 20%, maintaining a strong 18.5% on Q2.
This growth has been fueled by the reopening after the pandemic with consumers returning to our previous makeup habits with 70% of them going back to senior routines or state them because they are wearing even more makeup.
Speaker 3: This growth has been fueled by the reopening after the pandemic, with consumers returning to their previous makeup habits, with 70% of them going back to similar routines or stating that they are wearing even more makeup.
This growth has been fueled by the reopening after the pandemic, with consumers returning to their previous makeup habits, with 70% of them going back to similar routines or stating that they are wearing even more makeup.
Similarly, skincare, so still performing strongly at plus 11, 6% in the first half on top of the momentum in the category has had during the last few years and accelerating in Q2, two plus 12, 3% Castelli feels like premium innovation and their rifles skin collector consumer you're starting more and more bolt.
Speaker 3: Similarly, skin care is still performing strongly at plus 11.6% on the first half, on top of the momentum the category has had during the last few years and accelerating in Q2 to plus 12.3%. Constantly fueled by premiumization and the rise of the skin-selective consumer is starting more and more potent on performing products.
Similarly, skin care is still performing strongly at plus 11.6% on the first half, on top of the momentum the category has had during the last few years and accelerating in Q2 to plus 12.3%. Constantly fueled by premiumization and the rise of the skin-selectal consumer is starring more and more potent and performing products.
Non performing products.
Okay.
Our starting point to the welding Gus journey, our largest skincare.
Speaker 3: Our starting point to the Walden cast journey are Obagi skincare and milk makeup. We have two brands that play in the most attractive segments of their individual categories. Physicians dispense their emocosomatic skincare and premium makeup and that are outperforming their individual categories. Two real brands with a proven ability to connect and build authentic communities within their target's foliage.
We have two brands will play in the most attractive segments of the individual categories decision dispense dermal cosmetic skincare and premium makeup.
Our starting point to the Walden cast journey are Obagi skincare and milk makeup.
We have two brands that play in the most attractive segments of their individual categories.
Outperforming their individual categories, two real problems with a proven ability to connect and build authentic communities within their target audiences and important to our welding reservation complementary brands with business loans channels uncle Shannon.
physician dispense their mochosomatic skincare and premium makeup and that are outperforming their individual categories.
to real brands with a proven ability to connect and build authentic communities within their target audiences.
Speaker 3: and important to the world in that vision, complementary brands with business models, channels and instruments.
and important to the welding condition, complementary brands with business models, channels and the human needs.
Well Budd skincare is the crown jewel of the physician dispensed skincare market at least perceived by physicians and practitioners off the number one Brian English schemes health space.
Speaker 3: Robagi Skincare is the crown jewel of the physician dispense skincare market. It is perceived by physicians and practitioners as the number one brand in the skin health space, participating in the most interesting, attractive, fastest growing area of skin.
Pobagi skincare is the crown jewel of the physician-dispense skincare market. It is perceived by physicians and practitioners as the number one brand in the skin's health space, participating in the most interesting, attractive, fastest-growing area of skincare.
Dissipating or the most interesting attractive fastest growing area of skincare.
Well budget, that's exciting growth opportunities both within the existing business, mostly new levers.
Speaker 3: Pobaji has exciting growth opportunities both within the existing business model and new levels and is also a highly profitable business with high gross margins and bottom line profitability.
Obagi has exciting growth opportunities both within the existing business model and new levers.
And he's also a highly profitable business with high gross margins and bottom line profitability.
<unk> brings to our platform robust financial and operational expertise and a scheme by all of you know how to benefit agwai either for the full year now and in the future.
and is also a highly profitable business with high gross margins and bottom line profitability.
Speaker 3: Bobagi brings to our platform robust financial, operational expertise and a scheme biology know-how to benefit our wider portfolio now and in the future.
Obagi brings to our platform robust financial, operational expertise and a skin biology know-how to benefit our wider portfolio now and in the future.
Nope makeup a cold Jen cheaper on with an incredible organic following throw a diverse and inclusive community known for its cultural relevance on iconic products.
Speaker 3: Nuke Makeup is a cold, gen-zip brand with an incredible organic following through a diverse and inclusive community known for its cultural relevance and iconic products.
Milk Makeup is a cold, gen-c brand with an incredible organic following through a diverse and inclusive community known for its cultural relevance and iconic products.
No makeup brings to market unique high performance.
Speaker 3: Makeup brings to market unique, high performance, easy to use products that are also vegan, clean and cruelty free. Its core values are community, self expression and inclusion.
To use products that are also vegan clean cruelty free.
Makeup brings to market unique, high performance, easy to use products that are also vegan, clean and cruelty free.
Its core values of community self expression and in culture.
Makeup is already the number two clean makeup run at Sephora category that is the fastest growing part of the makeup market, but our goal is to drive fleet makeup to overtime become the top loyal beauty brands over the next generation.
Its core values are community, self-expression, and inclusion.
Speaker 3: Milk makeup is already the number two clean makeup brand on Sephora, a category that is the fastest growing part of the makeup market. Our goal is to drive milk makeup to over time become the top global beauty brand of the next generation.
Milk makeup is already the number 2 clean makeup brand in Sephora, a category that is the fastest growing part of the makeup market. But our goal is to drive milk makeup to over time become the top global beauty brand of the next generation.
As I said this is just the beginning of our journey with.
Speaker 3: As I said, this is just the beginning of our journey. With these two brands, we are laying the foundation of how over time we will be a company that will span all beauty categories, geographies, price points and business models to become a global best in class beauty and wellness company.
With these two brands were laying the foundation of our overtime will be a company that was spun all beauty categories geographies price points on business to become a global best in class beauty and wellness company.
As I said, this is just the beginning of our journey.
With these two brands, we are laying the foundation of how over time we will be a company that will span all beauty categories, geographies, price points and business modes.
Now, let's look at our quarter in first half 2022 results.
to become a global best-in-class beauty and wellness company.
Speaker 3: Now let's look at our quarter and first half 2022 results.
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Now, let's look at our quarter and first half 2022 results.
For Q2, the combined results of Biogen look we're very strong on a pro forma basis net sales amounted to $77 $1 million a growth of 23, 8% versus the same period, a year ago with a strong gross margin progression at 580 basis points to reach 75.
Speaker 3: For Q2, the combined results of Avaya and Milk were very strong. On a pro forma basis, net sales amounted to $77.1 million, a growth of 23.8% versus the same period a year ago, with a strong gross margin progression at 580 basis points to reach 75.1%.
For Q2 the combined results of our value in milk were very strong. On a pro forma basis, net sales amounted to $77.1 million, a growth of 23.8% versus the same period a year ago, with a strong gross margin progression at 580 basis points to reach 75.1%.
Five 1%.
Adjusted EBITDA margin growing 310 basis points to 28, 4%.
Speaker 3: Adjusted EVDA margin growing 310 basis points to 28.4%.
Adjusted EVITA margin growing 310 basis points to 28.4%.
It's important to know that at Walden Gosh, we manage the company on an annual basis.
Speaker 3: It is important to know that at WaldenKast we manage the company on an annual basis and that the water resource should not be extrapolated to fully resourced.
What the results should not be extrapolated to full year results.
It is important to know that at WaldenKast we manage the company on an annual basis.
Now for the front half performance on a pro forma basis net sales amounted to $138 2 million a growth of 24, 6%.
and quarter results should not be extrapolated to full-year results.
Speaker 3: Now for the front half performance. On a pro forma basis, net sales amounted to $138.2 million, a growth of 24.6%.
Now for the front half performance. On a performer basis,
Net sales amounted to $138.2 million, a growth of 24.6%.
Gross margin improved by 294 basis points to reach 73, 8% and adjusted EBITDA grew 28, 2% versus year ago, reaching 23, 5%.
Speaker 3: Gross margin improved by 294 basis points to reach 73.8%. Adjusted EBITDA through 28.2% versus year ago reaching 23.5%.
Gross margin improved by 294 basis points to reach 73.8% Adjusted EBITDA grew 28.2% versus Yerigou reaching 23.5%
This performance was driven by well by just continued growth in our core U S decision channel through deeper door on SKU penetration on both core and innovation and building new successes wider food principal international.
Speaker 3: This performance was driven by Bobagi's continuous growth in core US physician channel through deeper door and skew penetration on both core and innovation and building new successes in wider footprints internationally and on direct-to-conceal.
This performance was driven by Obagi's continuous growth in core US physician channels through deeper door and skew penetration on both core and innovation and building new successes in wider footprints internationally and on direct-to-consumer.
On direct to consumer.
The makeup impressive hold or performance of the market driven by increased awareness Halloween on base business breakthrough M P launches and door expansion as well as substantial gross margin pool.
Speaker 3: will make up impressive overperformance of the market driven by increased awareness, hallowing on base business, breakthrough MPE launches and or expansion, as well as substantial gross margin problems.
They make up impressive overperformance of the market, driven by increased awareness hollowing on base business, breakthrough MPE launches and or expansion, as well as substantial gross margin progress.
Yeah.
The 5% growth over performance was 2021 versus our original projections at this time of the transaction announcement plus.
Speaker 3: The 5% growth over performance of 2021 versus our original projections at the time of theening of the Oscar- microphoneironial in seven payments in confusion, the METROCpositive
The 5% growth over performance of 2021 versus our original projections at the time of the hydrogen section announcement.
Plus the strong performance in the front half give us a strong coffee is to reaffirm our 2022 full year projections and net sales of $256 million gross margin of 74% and adjusted EBITDA of approximately $15 million after incremental combined central public company costs.
Speaker 3: Plus, the strong performance in the front half gives us a strong confidence to reaffirm our 2022 full-year projections, at net sales of $256 million, gross margin at 74%, and adjusted EBITDA at approximately $50 million, after incremental combined central public company.
Plus, this strong performance in the front half gives us a strong confidence to reaffirm our 2022 full-year projections at net sales of $256 million, gross margin at 74%, and adjusted EBITDA at approximately $15 million after incremental combined central public company costs.
In the following slide we provide the capitalization table at the current time, we have a total diluted shares outstanding of approximately $112 7 million shares as well as approximately $29 5 million warrants.
Speaker 3: In the following slide, we provide the capitalization table at the current time. We have a total diluted shares of standards of approximately 112.7 million shares as well as approximately 29.5 million warrants.
In the following slide, we provide the capitalization table at the current time.
We have a total diluted shares of standards of approximately 112.7 million shares as well as approximately 29.5 million warrants.
Most of the centers founders and management shares have a one year lockup with a small portion of a set of chairs with a six months lockup.
Speaker 3: Most of the sellers, founders and management shares have a one-year lockup with a small portion of sellers shares with a six month lockup.
Most of the sellers, founders and management shares have a one year lockup with a small portion of sellers shares with a six month lockup.
These diluted share count excludes approximately $16 1 million shares for monitoring equity performance based awards not yet allocated.
Speaker 3: These diluted share counts exclude approximately 16.1 million shares for management equity performance based awards. Not yet allocated.
This diluted share count excludes approximately 16.1 million shares for management equity performance based awards. Yes, I don't think so.
The company has a total financing line available $225 billion composed of $175 million term loan a $50 million revolver on a pro forma basis, the company estimate that approximately $142 million.
Speaker 3: The company has a total financing line available of $225 million, composed of a $175 million term loan and a $50 million revolver. On a pro forma basis, the company has a net debt of approximately $142 million.
The company has a total financing line available of $225 billion, composed of a $175 million term loan and a $50 million revolver. On a pro forma basis, the company has a net debt of approximately $142 million.
Importantly, our shareholder base is solid and provides a strong alignment of stability for the company with a body on mute shareholders owning a transsexual close approximately 45, 49% and would it cause problems or some sponsor members approximately 22, 8%.
Speaker 3: Importantly, our shareholder base is solid and provides a strong alignment and stability for the company with Obagi and Nuke shareholders owning a transaction close of approximately 45.9% and Worldecast founders and sponsor members approximately 22.8%.
Importantly, our shareholder base is solid and provides a strong alignment and stability for the company with Obagi and Nuke shareholders owning a transaction close of approximately 45.9%.
Okay.
and Worldecast founders and sponsor members approximately 22.8%.
Now, let's go into more detail on our budget.
Well why did your skin care is the number one recommended brand in the U S makes decision and highly respected things with science led products.
Now let's go into more detail on Obagi.
Speaker 3: Pobale Skincare is the number one recommended brand in the US by physicians and highly respected thanks to its science-led products protected by 80 plus patents that deliver transformative results which unlock strong product loyalty both from the patient and the physician.
Pobaly Skincare is the number one recommended brand in the US by physicians and highly respected thanks to its science led products protected by 80 plus patents that deliver transformative results which unlock the
By 80, plus patents that deliver transformative results, which I look strong protocol loyalty, both from the patient and the physician.
<unk> delivered a strong half with <unk>.
a strong product loyalty both from the patient and the physician.
Speaker 3: Obagi delivered a front half with a growth of 18.1% in net sales, a very strong gross margin growing by 201 basis points to 77.1% and EBITDA margin is a robust 24.4% but down 374 basis points for Sichiro Go.
Growth of 18, 1% of net sales.
Obagi delivered a front half with a growth of 18.1% in net sales, a very strong gross margin growing by 201 basis points to 77.1%
Strong gross margin growing by 201 basis point to 77, 1%.
EBITDA margins have robust 24, 4%, but down 374 basis points versus a year ago.
and EBITDA margins are almost 24.4% but down 374 basis points for this year ago.
Growth was driven by continued strong growth in our core U S sufficient channel.
Speaker 3: Growth was driven by continued strong growth in our core US physician channel.
Growth was driven by continued strong growth in our core US physician channel.
And our growth internationally and at the beginning of our E Commerce strategy.
Speaker 3: stellar growth internationally and the beginning of our e-commerce strategy.
Gross [laughter] likely temporary in the U S by the wholesale channel as we realign their distribution to support our growth strategy.
stellar growth internationally and the beginning of our e-commerce strategy.
Speaker 3: Growth was slightly tempered in the US via a wholesale channel as we realigned the distribution to support our growth strategy.
Growth was slightly tempered in the US via a wholesale channel as we realigned the distribution to support our growth strategy.
As mentioned before we manage the company on an annual basis. So we're very comfortable with her on her objectives.
Speaker 3: As mentioned before, we manage the company on an annual basis, so we're very comfortable with our analog.
As mentioned before, we manage the company on an annual basis, so we're very comfortable with our annual objectives.
Lower EBITDA versus year ago.
Speaker 3: Lower EBITDA vs. year ago is driven by normalization of SG&A activity post-COVID and marketing investment ahead to support new product launch.
Driven by normalization of his G&A activity post COVID-19 and marketing investments.
Lower EBITDA vs. year-ago is driven by normalization of SG&A activity post-COVID and marketing investment ahead to support new product launches.
No problems.
Well Bobby has significant growth opportunities on our strategies are very clear number one grow our footprint within our U S physician business through new doors cycle.
Speaker 3: OBAGI has significant growth opportunities and our strategies are very clear. Number one, grow our footprint within our US physician business through new doors. Second, expand the breadth and depth of our portfolio. And third, expand our footprint to new geographies and channels.
Obagi has significant growth opportunities and our strategies are very clear.
Number one, grow our footprint within our US physician business through new doors. Second, expand the breadth and depth of our portfolio. And third, expand our footprint to new geographies and channels.
The breadth and depth cohort both affords our third.
And our footprint to new geographies and channels.
Now in addition at least what's not exciting enough, we have two big wholesale sort of opportunity.
Speaker 3: Now in addition, if this was not exciting enough, we have two big oceans of opportunity. Both currently capturing our projections.
Not currently captured in our projections that we're currently working again.
Now in addition, if this was not exciting enough, we have two big oceans of opportunity.
Hurst capture the opportunity of the in clinic device market to drive further our skincare business.
not currently capturing our projections that we're currently working against.
Speaker 3: first capture the opportunity of the in-clinic device market to drive further our skincare business.
First, capture the opportunity of the in-clinic device market to drive further our skincare business.
We're just at the beginning of a broad market tests with our skin <unk> device a product that boost the effectiveness of our skincare product efficacy by infusing deeper into the scheme on driving even more transformative results faster.
Speaker 3: We're just at the beginning of a broad market test with our Skin Trimstick device, a product that boosts the effectiveness of our skincare product efficacy by infusing it deeper into the skin and driving even more transformative results faster.
We're just at the beginning of a broad-market test with our Skin Trimstick device, a product that boosts the effectiveness of our skincare product efficacy by infusing it deeper into the skin and driving even more transformative results faster.
Second and Alastair.
Speaker 3: Second, an answer to the increased consumer desire for an accessible range by building a bespoke, ou-baggie brand and product proposition aimed at consumers not currently captured within our brand.
Increased consumer desire for an accessible range by building, a bespoke or Bobbi Brown I'm protocol position.
Second, an answer to the increased consumer desire for an accessible range by building a bespoke, ou-baji brand and product proposition aimed at consumers not currently captured within our brand universe.
Consumers not currently capture within our broad universe.
Now back to our core three levers more physicians more products like detection and go sooner and a larger footprint.
Speaker 3: Now, back to our core three levers, more physicians, more products by physician, and consumer and larger.
Now, back to our core three levers, more physicians, more product-by-physician, and consumer, and a larger footprint.
We are deepening our account penetration and we're just getting started in the first half of 2022.
Speaker 3: We are deepening our account penetration and we're just getting started. In the first half of 2022,
We are deepening our account penetration and we are just getting started. In the first half of 2022, we have been increasing our account penetration and we are just getting started.
Our ore body physician dispense business grew eight 3% importantly, approximately $1.4 million of sales came from new accounts.
Speaker 3: Our OBOGIC physician dispense distance to 8.3%.
Our OBOGIC physician dispense business grew 8.3%.
Speaker 3: importantly, approximately $1.4 million of sales came from New Antel.
Today, we're covering approximately 35% to 40% of dermatologists in the U S and only a fraction of that I'm, a plastic surgeons and the older scheme for instance, multi specialty practices. So the potential for growth within the U S efficient channel to have a budget and more doors is big.
importantly, approximately $1.4 million of sales came from new accounts.
Speaker 3: Today, we're covering approximately 35 to 40% of dermatologists in the US, and only a fraction of that among plastic surgeons and other skin care dispensing multi-specialty practices. So the potential for growth within the US decision channel to have a budget in more doors is big.
Today, we're covering approximately 35 to 40 percent of dermatologists in the U.S. and only a fraction of that among plastic surgeons and other skin care distancing multi-specialty practices. So, the potential for growth within the U.S. decision channel to have a budget in more doors is big. We're going to talk about the potential for growth within the U.S. and the U.S. decision channel to have a budget in more doors is big.
To drive further about your breadth and depth, we have a two pronged approach first.
To drive further about this breath and breath...
Speaker 3: we have a two-prong approach. First, by anchoring our deep hero products deeper in the distribution.
Anchoring our hero products deeper into distribution.
we have a two-prong approach.
Award winning professional fee cereal is a great example, the first half of 2022, we increase distribution with Houston ship channel by seven 4% and became our number two SKU across all channels.
First, by anchoring our deep hero products deeper in the distribution.
Speaker 3: Our award-winning professional C-serum is a great example. In the first half of 2022, we increased distribution in the physician channel by 7.4% and became our number two skill across all channels.
Our award-winning professional C-serum is a great example. In the first half of 2022, we increased the distribution of the physician channel by 7.4% and became our number 2 skill across all channels.
This performance was driven by a pushing deeper distribution and increasing consumer pool aided by the recognition given by two prestigious beauty seal of approval.
Speaker 3: This performance was driven by a push in deeper distribution and an increasing consumer pool aided by the recognition given by two prestigious beauty seals of approval.
This performance was driven by a push in deeper distribution and an increasing consumer pool aided by the recognition given by two prestigious beauty seals of approval.
Secondly, innovation targeting unmet needs and delivering transformative results in Q2, we introduced last either Nick the quality.
Speaker 3: Secondly, innovation targeting unmet needs and delivering transformative results. In Q2, we introduced Elastiderm Neck and Decoleté, where 94% of participants showed visible signs of improvement in horizontal lines and sagging skin in those areas. This innovation achieved our number four sales ranking within the physician channel in its first three months and helped grow the core elastin franchise by 38% over half.
Secondly, innovation targeting unmet needs and delivering transformative results. In Q2 we introduce Elastiderm neck and the quality.
We're at 94% of participants show visible signs of improvement in the horizontal lines and soggy and skiing in those areas.
where 94% of participants showed visible signs of improvement in horizontal lines and sagging skiing in those areas.
Innovation achieved starting number for self ranking within the physician channel and its for three months and help grow the core lasting franchise like 38% or half one.
This innovation achieved our number four sales ranking within the Physician channel in its third three months and helped grow the core Elastin franchise by 38% over half one.
Now, let's look beyond the U S business, we have been intently focused on growing our international footprint.
Speaker 3: Now let's look beyond the US business. We have intently focused on growing our international asset.
Now let's look beyond the US business. We have an intently focused on growing our international footprint.
International business grew 45, 9% in the front half.
Speaker 3: The international business grew 45.9% in the front half.
If we focus for a moment in Asia Pacific area, where our international business. Its most developed and our largest market.
The international business grew 45.9% in the front half.
Speaker 3: If we focus for a moment in Asia Pacific, the area where our international business is most developed and our largest market.
If we focus for a moment in Asia Pacific, the area where our international business is most developed and our largest market.
Launch in the region, our budget clinical entry price point range as well as a tailored new scar cream product for that region.
Speaker 3: We launched in the region our Obagi Clinical Entry Price Point range, as well as a tailored new ScarTreme product for the region.
We launched in the region our Obagi Clinical Entry Price Point range, as well as a tailored new ScarCream product for the region.
Innovations allow us to penetrate deeper than market and resulted in growth of 81% versus the same period a year ago.
Speaker 3: These product innovations allow us to penetrate deeper the market and result in growth of 81% versus the same period year.
These product innovations allow us to penetrate deeper the market and result in growth of 81% versus the same period a year ago.
Yeah.
We have also started expanding our e-commerce footprint, albeit from a low base through our unique mode.
Speaker 3: We have also started expanding our e-commerce footprint and I'll wait from a still aloe base to a unique moment.
We have also started expanding our e-commerce footprint, albeit from a still aloe base to a unique model.
We not only are serving our consumers directly through E Commerce and a few selected e-commerce players, but we provide our partner physicians with the tools to service their own patient directed.
Speaker 3: We not only are serving our consumers directly through e-commerce and a few selected e-commerce players, but we provide our partner physicians with the tools to service their own patients directly.
We not only are serving our consumers directly through e-commerce and a few selected e-commerce players, but we provide our partner physicians.
We're just at the beginning of unlocking the potential of digitalization in our business and the part of the world and gas platform will accelerate.
with the tools to service their own patients directly.
Speaker 3: We're just at the beginning of unlocking the potential of digitalization in our business and being part of the Worldencast platform will accelerate.
We are just at the beginning of unlocking the potential of digitalization in our business and being part of the Worldencast platform will accelerate this.
Now turning to a buoyant makeup category why don't you just start performance they make up.
Speaker 3: Now, turn into a buoyant makeup category and one of its star performers, still makeup.
Now turn into a buoyant makeup category and one of its star performers, Billie Makeup.
Milk makeup is the number two clean Brian it support a cult following its 2.7 million consumers and iconic products ranking of stops that are such a core.
Speaker 3: Milk Makeup is the number two clean brand at Sephora, with a cult following of 2.7 million consumers and iconic products ranking as top sellers at Sephora.
Milk Makeup is the number 2 clean brand at Sephora, with a cult following of 2.7 million consumers and iconic products ranking as top sellers at Sephora.
It has had a fantastic start to a year with.
Speaker 3: It has had a fantastic start to the year with the front half sellout at 48.1% vs. a year ago and for perspective 46.8% vs. 2019 to normalize for the COVID base. This is well ahead of the makeup category at 20%. The front half and it sales...
From her sellout at 48, 1% versus a year ago.
It has had a fantastic start to a year.
For perspective, 46, 8% versus 2019 to normalize for the coffee base.
with a front-half sellout at 48.1% versus a year ago, and for perspective, 46.8% versus 2019 to normalize for the COVID base.
This is well ahead of the makeup category at 20%.
The front half net sales grew 45%.
This is well ahead of the makeup category.
With especially strong tier two plus 82% fueled by the regions onshore rice mascara on CT eclipse multiplying prime equally positive results from a profitability point of view with a strong evolution of gross margin of seven 180 basis points to 63% and maybe the margin up.
at 20%.
Speaker 3: with a specially strong Q2 at plus 82% fueled by the brilliant launch of rice mascara and a pore eclipse mattifying primer. Equally positive results from a profitability point of view with a strong evolution in gross margin of 783 basis points to 65.3% and evident margin up 996 basis points to 21%.
The front half net sales grew 45%.
with a specially strong Q2 at plus 82% fueled by the brilliant launch of rice mascara and pore eclipse mattifying primer, equally positive results from a profitability point of view, with a strong evolution in gross margin of 783 basis points to 65.3% and evident margin up 996 basis points to 21%.
996 basis points to 21%.
Mixed performance on our roadmap for the future is based on three strategic <unk> first grow our awareness and community as milk. Despite large organic community following a relatively under marketed Brian .
Speaker 3: Mixed performance and a roadmap for the future is based on three strategic plans. First, grow our awareness and community as milk, despite its large organic community following is a relatively under marketed brand.
Milk's performance and roadmap for the future is based on three strategic plans. First, grow our awareness and community as Milk, despite its large organic community following, is a relatively under-marketed brand.
Second continue to deliver breakthrough innovation and expand our category footprint.
Speaker 3: Second, continue to deliver breakthrough innovation and expand our category food.
Second, continue to deliver breakthrough innovation and expand our category footprint.
Third.
Our distribution domestically and internationally.
Speaker 3: Third, expand our distribution domestically and internationally.
Assuming on the first lever, we can see that not only have to make a built awareness with strong visibility on our great support our partners, but it's also a strongly growing fellowship with existing media touch points.
Our third.
Speaker 3: Zooming on the first lever, we can see that not only has Makeup built its awareness through its strong visibility at our great Sephora partners, but it has also strongly grown its fellowship with existing media thought-
expand our distribution domestically and internationally.
Zooming on the first lever, we can see that not only has Makeup built its awareness through strong visibility at our great Sephora partners.
but it has also strongly grown its fellowship with existing media touchpoints.
So can lead to something that is difficult to it you can make a very strong growth in its core franchise is benefiting from increased awareness of the Bronx.
Speaker 3: This has led to something that is difficult to achieve in makeup, very strong growth in score franchises benefiting from the increased awareness of the brand.
This has led to something that is difficult to achieve in makeup, very strong growth and score franchises benefiting from increased awareness of the brand.
And this is just the beginning as we see significant opportunity to expand our consumer base as we grow awareness across all consumer segments.
Speaker 3: And this is just the beginning as we see significant opportunity to expand our consumer base as we grow awareness across all consumer sectors.
And this is just the beginning as we see significant opportunity to expand our consumer base as we grow awareness across all consumer segments.
Today, we have a strengthening the genesee consumer but plenty of opportunity to further consolidate our stronghold there, but also invite into work community.
Speaker 3: Today we have a strength in the Gen Z consumer, but plenty of opportunity to further consolidate our stronghold there, but also invite into our community additional make-up consumers for which mild product performance and strong brand values are compelling.
Today we have a strength in the Gen Z consumer, but plenty of opportunity to further consolidate our stronghold there, but also invite into our community additional makeup consumers for which milk's product performance and strong brand values are compelling.
As shown on makeup consumers for which milk product performance, our strong brand values are compelling.
And we're staying always ahead by continuing to develop our community across new emerging platforms like roadblocks for Twitch or these sports.
Speaker 3: And we're staying always ahead by continuing to develop our community across new emerging platforms like Roblox, Twitch or Discord.
And we're staying always ahead by continuing to develop our community across new emerging platforms like Roblox, Twitch or Discord.
Yeah.
Our second growth pillar is innovation innovation is the lifeblood of makeup makeup has demonstrated a consistent ability to deliver breakthrough products that have become icons on top centers that support.
Speaker 3: Our second growth pillar is innovation. Innovation is a lifeblood of makeup, and milk makeup has demonstrated a consistent ability to deliver breakthrough products that have become icons on top sellers after four.
Our second growth pillar is innovation. Innovation is a lifeblood of makeup and milk makeup has demonstrated a consistent ability to deliver breakthrough products that have become icons on top sellers after four.
In the front half rebuilt on eye wear mascara primary category strength by delivering two big launches life's mascara to compete a category, where we already have one of the best selling less cars and for eclipse to consolidate our leadership in primers.
Speaker 3: In the front half, we built on our mascara and primary category strengths by delivering two big ones.
In the front half, we built on our mascara and primary category strengths by delivering two big launches.
Speaker 3: Vice Mascara to complete a category where we already have one of the best selling mascaras and four clicks to consolidate our leadership in prime.
Vice Mascara to complete a category where we already have one of the best selling mascaras, and 4 clicks to consolidate our leadership in primers.
Okay.
If we assume on climbers a category in which we have decided to play hard when makeup.
Speaker 3: If we zoom on primers, a category in which we have decided to play hard and win on milk makeup, we have to arrange the HydroGrip primer, the number one best-selling primer at Sephora by a long mark.
If we zoom on primers, a category in which we have decided to play hard and win on makeup,
Half an hour range the hydro group primer the number one best selling prime that's afforded by a low margin and.
We have in our range the HydroGrip primer, the number one best-selling primer at the border by a low margin.
We managed to launch a second pregnant or eclipse addressing an unmet and complementary consumer and modifying them blaring of course. He has quickly become the number three prime minutes sephora incrementally towards existing hydro group who's not only by the things number one position, but grew a further 69%.
Speaker 3: and we managed to launch a second primer, Pore Eclipse, addressing an unmet and complementary consumer need, mattifying and blurring of pores. It has quickly become the number 3 primer at Sephora, incrementally to existing HydroGrip, who is not only maintaining its number 1 position, but grew a further 69%.
And we managed to launch a second primer.
or eclipse, addressing an unmet and complementary consumer need, mattifying and blurring of course. It has quickly become the number 3 prime answer for us.
incrementally to an existing hydro grip which not only maintains its number one position, but grew up to 69%.
Yeah.
We have chosen so far to focus on the milk bone and ceilings and local solar barrier to entry categories, such as Mascara and have succeeded in building best selling iconic products.
Speaker 3: We have chosen so far to focus on ancillaries and low consumer barrier to entry categories such as mascara and have succeeded in building best selling iconic products.
We have chosen so far to focus on milk on ancillaries and low consumer barrier to entry categories such as mascara and have succeeded in building best selling iconic products.
Now Brian is ready to successfully expand into other subcategories of makeup that have significant scale and to expand in a bigger way into high loyalty high replenishment area Soho market such as complexion.
Speaker 3: Now the brand is ready to successfully expand in other sub-categories of makeup that have significant scale and to expand in a bigger way into high-loyalty, high-replenishment areas of the market, such as complexion. More to come on these segments.
Now the brand is ready to successfully expand in other subcategories of makeup that have significant scale and to expand in a bigger way into high loyalty, high replenishment areas of the market such as complexion.
More to come on these exciting new launch.
Longer term, we believe milk have the permission to successfully expand into OLED adjacent beauty categories.
Speaker 3: Longer term, we believe MILC has the permission to successfully expand into other adjacent beauty categories.
More to come on this exciting new launch.
Longer term, we believe MILC has the permission to successfully expand into other adjacent computing categories.
Looking at our distribution footprint milk is also just getting them historically, having tremendous white space opportunity to increase penetration and deepen our successful partnership with before as well as <unk>.
Speaker 3: Looking at our distribution footprint, milk is also just getting started having tremendous white space of opportunity to increase penetration and deepen our successful partnership with Sephora, as well as expand our distribution in the US and international.
Looking at our distribution footprint, milk is also just getting started having tremendous wide space of opportunity to increase penetration and deepen our successful partnership with Sephora as well as expand our distribution in the US and internationally.
Span our distribution in the U S and internationally.
In addition to operating all of Sephora U S and Canada doors, maybe students whose products and sephora at Kohl's we.
Speaker 3: In addition to operating in all of Sephora US and Canada doors, MIG distributes its products in Sephora at calls. We have today a footprint of approximately 250 doors with 400 doors to be added to reach over 600 doors by the end of 2020.
In addition to operating in all of Sephora US and Canada doors, Nick distributes his products in Sephora at calls.
We have today a footprint of approximately 250 doors with 400 doors to be added to reach.
We have today a footprint of approximately $250 with $400 to be added to reach.
Over 600 doors by the end of 2022.
The retail is expanding its digital presence with US recently are you on Amazon.
Speaker 3: As a retail, Nilt is expanding his digital presence with his recent debut on Amazon.
over $600 by the end of 2022.
As a retail, Nilt is expanding his digital presence with his recent debut on Amazon.
And we have a very exciting plans to launch in a big way in the U K at fourth biggest makeup market globally in the second half of 2022.
Speaker 3: We have a very exciting plan to launch in a big way in the UK, the fourth biggest makeup party globally in the second half of 2020.
We have a very exciting plan to launch in a big way in the UK, the fourth biggest makeup market globally in the second half of 2020.
With me makeup dot com, we're just at the beginning of building a strong and profitable long term platform for DTC growth.
Speaker 3: With MilkMakeup.com, we're just at the beginning of building a strong and profitable long-term platform for D2C global.
With MilkMakeup.com we are just at the beginning of building a strong and profitable long term platform for D2C growth.
Electrical source sales so 31% in the first half of the year accelerating in Q2 with nearly 50% increase while maintaining a very strong ROI discipline.
Speaker 3: direct-to-consumer sales of 31% in the first half of the year, accelerating into 2 with a nearly 50% increase while maintaining a very strong ROI.
Direct to consumer sales fell 31% in the first half of the year, accelerating into 2 with a nearly 50% increase while maintaining a very strong ROI basically.
We do not only perform on our business Kpis, but we're also very proud of our ESG achievements for a very young company.
Speaker 3: We do not only perform on our business KPIs, but we're also very proud of our ESG achievements for a very young company.
We do not only perform on our business KPIs, but we are also very proud of our ESG achievements for a very young company.
First focus on the environment with constantly developing ways to reduce our footprint all along the supply chain by removing waste champion of recycled or recyclable materials.
Speaker 3: First, focus on the environment with constantly developing ways to reduce our footprint all along the supply chain by removing waste and championing recycled and recyclable materials.
First, focus on the environment with constantly developing ways to reduce our footprint all along the supply chain by removing waste and championing recycled and recyclable materials.
At Walden costs, we're proud of our diversity across all levels of football.
Speaker 3: At Waldenkast, we're proud of our diversity across all levels of our own.
Sanction.
At Waldenkast, we are proud of our diversity across all levels of our environment.
No make up on a larger or build things youll see.
Speaker 3: Wolding cuffs, milk makeup and Obagi are built on in Placido.
Makeup social could answer he focuses on self expression on equality for underrepresented L. G B T IQ and plc groups.
presentation.
Molding cuffs, nail makeup and ouvage are built on inclusivity.
Speaker 3: Makeup Social Philanthropy focuses on self-expression and equality for underrepresented LGBTIQ and POC.
Help Make Up Social Philanthropy focuses on self-expression and equality for underrepresented LGBTIQ and POC groups.
This conclusion initiatives represent ore bodies commitment as leaders in the skin care space elevate the global dialogue about diversity and inclusion.
Speaker 3: And the Skinclusion Initiative represents Obagi's commitment as leaders in the skincare space to elevate the global dialogue about diversity and inclusion.
And the Skinclusion Initiative represents Obagi's commitment as leaders in the skincare space to elevate the global dialogue about diversity and inclusion.
Corelogic is very proud to be providing effective science space.
Speaker 3: Oabaji is very proud to be providing effective science-based skin care products for all skin
Oh scheme.
Kebaji is very proud to be providing effective, science-based skin care products for all skin towns How canians avoid skin surgery and
And it's also proud that.
It was the very first professional skincare company could clinically desk product performance for all Chris Patrick scales chemicals.
Speaker 3: and is also proud that it was the very first professional skincare company to clinically test product performance on all of the Spatric scale skin.
and he's also proud.
that it was the very first professional skincare company to clinically test product performance on all of his Patrick scale skin tones.
Spices young age would incur has equipped yourself with a best in class governance with its board of directors and processes.
Speaker 3: Despite its young age, WorldInKaz has equipped itself with a best-in-class governance with its bodily lectures and process.
Despite its young age, WorldInkaz has equipped itself with a best-in-class governance with its bodily vectors and processes.
So to recap Wolden cause brings me operational excellence of our multi brand platform built for growth and profitability.
Speaker 3: So to recap, Woldenkast brings the operational excellence of a multi-brand platform built for growth and profitability. A household brand built for speed and scale.
So, to recap, Worldenkast brings the operational excellence of a multi-brand platform built for growth and profitability.
Household brands built for speed and scale.
It is a balanced portfolio of placing in structurally attractive segments that favor our growth ambitions and mitigate risks linked to single category fluctuations.
A household brand built for speed and scale.
Speaker 3: This balanced portfolio plays in structurally attractive segments that favor our growth conditions and mitigate risks linked to single category fluctuations.
Its balanced portfolio plays in structurally attractive segments that favor our growth conditions and mitigate risks linked to single-category fluctuations.
We have expertise managing and scaling beauty brands and businesses, which we intend to do while keeping an asset light structure and agility to retain the market responsiveness and speed.
Speaker 3: We have expertise in managing and scaling beauty brands and businesses, which we intend to do while keeping an asset-lighting structure and an agility to retain the market responsiveness and speed of entrepreneurial indy brand.
We have expertise in managing and scaling beauty brands and businesses which we intend to do while keeping an asset lighting structure, and agility to retain the market responsiveness and speed of entrepreneurial indie brands.
One of the brands.
Our management team has a strong alignment of incentives to drive long term value creation through operational and capital allocation scale. We are just at the beginning we're pleased with our performance through the first half of 2022 and believe we are well positioned to achieve the goals we outlined with many of you when we announced our business combination in November 2021.
Speaker 3: Our management team has a strong alignment of incentives to drive long-term value creation to operational and capital allocation scale. We are just at the beginning and we are pleased with our performance to the first half of 2022 and believe we are well positioned to achieve the goals we outlined with many of you when we announce our business combination in November 2020.
Our management team has a strong alignment of incentives to drive long-term value creation for operational and capital allocation scale. We are just at the beginning and we are pleased with our performance through the first half of 2022 and believe we are well positioned to achieve the goals we outlined with many of you when we announce our business combination in November 2021.
With that I would now like to open the call to take your questions. Thank you.
Speaker 3: With that, I would now like to open the call to take your questions.
Thank you we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad.
With that, I would now like to open the call to take your questions.
Speaker 1: Thank you. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad.
Thank you. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging request.
Acknowledging request.
Please limit yourself to one question and one follow up question to make time for everyones questions during the call.
Speaker 1: Please limit to one question and one follow up question to make time for everyone's questions during the call. If you're using a speakerphone, please pick up your handset before pressing any keys.
Please limit to one question and one follow-up question to make time for everyone's questions during the call.
If youre using a speakerphone please pick up your handset before pressing any keys to withdraw your question. Please press Star then we will pause for a moment as callers join the queue.
If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then 2. We will pause for a moment as callers join the queue.
The first question comes from Dana Telsey with Telsey Advisory Group. Please go ahead.
Hello, Michelle congratulations on such a nice quarter I do you think about the sales that you had in the quarter given what we've heard in the environment was there any changes in cadence during the quarter that you saw.
The first question comes from Dana Telsey with Telsey Advisory Group.
Speaker 2: So Michelle, congratulations on such a nice quarter. As you think about the sales that you had in the quarter, given what we've heard in the environment, was there any changes in cadence during the quarter that you saw?
So Michelle, congratulations on such a nice quarter. As you think about the sales that you had in the quarter, given what we've heard in the environment, was there any changes in cadence during the quarter that you saw? Number two, as you think about the adjusted either DAW numbers, which for the BOGI and for milk each showed nice increases, how do you think of the underlying drivers? As price increases, unit volume, expanded distribution.
Number two as you think about the adjusted EBIDTA numbers, which bacci infant milk. Each showed nice increases how do you think of the underlying drivers. It's price increases unit volume expanded distribution, where does it come from and how you're thinking about the cadence of.
Speaker 2: Number two, as you think about the adjusted either DAW numbers, which for Baji and for milk each showed nice increases, how do you think of the underlying drivers? Is price increases, unit volume, expanded distribution, where does it come from, and how are you thinking about the cadence of new product introductions as we go through the rest of the year? Thank you.
New product introductions as we go through the rest of the year. Thank you.
Where does it come from? And how are you thinking about the cadence of new product introductions as we go through the rest of the year? Thank you. Thank you.
Thank you Lena great Great question I'll try to talk to you today.
Speaker 3: Thank you, Reina. Great questions. Great to have you today.
Thank you, Reina. Great questions. It sounds great to have you today.
First starting with you.
Your first Oh, I'll do them in reverse I'll start with our drivers of growth.
Speaker 3: I'll do them in reverse, start with drivers or growth. I think the broad is being a broad base.
I'd say first starting with your first – I'll do them in reverse, start with drivers of growth. We are – I think it's been a broad base of growth across both primarily driven by volume on both fronts. We have taken some small level of price increases I think on average across the line of about 2%, but it's really a volume based driven business with a combination of –
We are I think that it's been a broad based growth.
Across both primarily driven by volume on both fronts. We have taken some small level of price increases I think on average across the line of about 2%, but it's really a volume base driven business with a combination of.
Very strong growth.
Core business as well as new launches new launches are accounting for about a third of the growth and two thirds coming from our core business. There is an element in the case of milk of distribution expansion as we expand into new.
Very strong growth in our core business as well as new launches. New launches are accounting for about a third of the growth and two thirds coming from our core business. There is an element in the case of milk of distribution expansion as we expand into new orders today.
Speaker 3: There is an element in the case of milk of distribution expansion as we expand into new ores today.
New loss tubing.
Particularly in our schools.
So broad based we are we are feeling.
Very very good about the stroke and the growth prospects.
particularly at goals.
So, broad base we are feeling very, very good about the strong and the growth prospects.
EBITDA at some point.
We think that obviously, we have a settlement in the call.
Speaker 3: We think that obviously we have, as said in the call, we manage the business on an annual basis. We think that obviously we had a very strong Q2 quarter, and we believe that over the next quarters, we will continue to confidently deliver against our objectives that we set out in November .
For an EBITDA is some point
Remind us the basis on an annual basis.
We think that obviously we have, as said on the call, we manage the business on an annual basis. We think that obviously we had a very strong Q2 quarter. And we believe that over the next quarters we will continue to constantly deliver against our objectives that we set out in November .
We think that obviously, we had a very strong Q2 quarter and we believe that over the next the next quarters, we will continue to consistently deliver against against our objectives that we set out in November .
Got it and then on the cadence of the quarter.
Got it. And then on the cadence of the quarter.
Yes, the case on the quarters, we have not seen any changes in particular against Bodgie has always tends to be rather.
Speaker 3: Yeah, in the case of the court, we have not seen any changes in particular against Obagi. It has always tended to be rather...
Yeah, in the case of the quarter, we have not seen any changes in particular against OBAGI. It tends to come in the last month of the quarter, a significant ramp up in the last month of the quarter. We haven't seen any significant differences in the number of cases.
It tends to come most of us it tends to come in the last month for the quarter.
Speaker 3: tends to come, most of it tends to come in the last month or the quarter, over a significant ramp up in the last month or the quarter, we have not seen any significant differences in consumption.
The significant ramp up in the last one so like what did we have not seen any significant differences in.
And consumption or net sales.
Business.
in consumption or in net sales in either of the two businesses.
Got it.
See I know body with the net income you had mentioned that lower in the second quarter. This year than last year can you expand on that that again.
Speaker 2: And then, on OBAGI with the net income, you'd mentioned that lower in the second quarter this year than last year. Can you expand on that again?
Got it. And then just briefly on OBOGI with the net income you'd mentioned that lower in the second quarter this year than last year. Can you expand on that again?
Sorry could you repeat that you broke up.
I think our bodies net income in the second quarter of $2 2 million a little bit lower than the second quarter last year. You had mentioned I think it changed anything to note there.
Speaker 2: I think Obagi's net income in the second quarter of $2.2 million, a little bit lower than the second quarter last year. You mentioned, I think, a change. Something to note there.
Sorry, the next could you repeat? You broke up.
I think Obagi's net income in the second quarter of 2.2 million, a little bit lower than the second quarter last year. You'd mentioned I think a change. Anything to note there?
Yeah in terms of Oh, that's not an adjusted EBITDA basis, and as I said, we are under.
Speaker 3: Yeah, in terms of an adjusted EBITDA basis, as I said, we are, in the case of Obagi, we manage on a normal basis. It's a bit of normalization of our SG&A activity. At the beginning of the year, we had a sales meeting and travel expenses as we reignite the company to a more normalized world after COVID, as well as some incremental marketing spending, particularly in Q2, to support our launch.
In terms of an adjusted EBITDA basis, as I said, we are in the case of a budget. We manage on a normal basis. It's a bit of normalization of our SG&A activity. At the beginning of the year, we had a sales meeting and travel expenses as we reignite the company into a more normalized world after COVID, as well as some incremental marketing spending, particularly in Q2 to support our launches through the year.
Okay. So for bacci.
On a normal basis is a bit of normalization of our SG&A activity at the beginning of the year.
Sales of <unk> T trial on expenses as we break night.
The company to a more normalized world after after call it as well as some incremental marketing spending because you're going into Q2 to support our long just through the year, So a little bit lower in terms of maybe the margin overall, but again culture MTR than ever to go from here.
Speaker 3: So a little bit lower in terms of maybe the margin overall, but again, call CMT our delivery of the year.
So a little bit lower in terms of maybe the margin overall, but again, constant in our delivery of the year.
Okay.
Thank you.
The next question is from John Kim with Cowen <unk> Company. Please go ahead.
Thank you.
Thank you for taking my question and come back on a nice quarter, maybe just talk about little bit on the marketing strategy.
The next question is from Jonah Kim with Cowan & Company. Please go ahead.
Speaker 4: Thank you for taking my question and congratulations on my quarter. Maybe just talk about a little bit on the marketing strategies for the whole milk and a body. I do think about expansion at both brands. And I would be just curious to also know your thoughts about milk distribution expansion opportunity. You're under penetrated to 4, but maybe incremental opportunity that other retailers in their US. Thank you.
Thank you for taking my question and congrats on the last quarter. Maybe just talk about a little bit on the marketing strategies for milk and Obagi as you think about expansion at both brands. And I would be just curious to also know your thoughts about milk distribution expansion opportunity. You're on the penetrative Sephora but maybe incremental opportunities that other retailers in the US. Thank you. Thank you.
Okay, Nobody I can think.
Expansion at both brands.
And I would be just curious to know.
No your thoughts about milk, that's 3% expansion opportunity, you're underpenetrated, but maybe incremental.
Opportunity that other retailers in the U S. Thank you.
Thank you Jenna and thanks for the question.
Speaker 3: Thank you, Jenna, thanks for the question. What are strategies? Let me start with milk. Strategies are clear. I think milk is.
What are your strategies, let me start with make our strategies are clear I think make US do you have seen from the presentation around the Hudson incredible organic following but has been historically a relatively under marketed our marketing spending in the business.
Thank you, Jana. Thanks for the question. Well, our strategies, let me start with milk. Our strategies are clear. I think milk has...
Speaker 3: you have seen from the presentation is a brand that has an incredible organic following, has been historically relatively under marketed or marketing spending.
you have seen from the presentation, is a brand that has an incredible organic following, and has been historically relatively under marketed, or marketing and spending in the business.
I was always a relatively low so we think theres a big opportunity to expand the.
Speaker 3: has always been relatively low. So we think there's a big opportunity to expand.
has always been relatively low. So we think there's a big opportunity to expand the community behind milk by taking those great products that were as great values of milk beyond its core Gen Z audience. So what we would expect and we would be expecting is really increasing our marketing support on milk to reach new and older consumers. Additionally, we have a big opportunity as we highlighted in terms of innovation.
The community behind Bai.
Speaker 5: the community behind milk by taking those great products that were at great values of milk beyond its core Gen Z audience. So what we would expect and we would be expecting is really increasing our marketing support on milk to reach new and older consumers. Additionally, we have a big opportunity as we highlighted in terms of innovation. I mean, milk is a brand that has...
By taking those great products, whereas at great values.
Its core Gen Z audience. So we would like you would expect that we would be expecting as really increasing our marketing support them to reach new and older consoles. Additionally, we have a big opportunity as we highlight that in terms of inflation I mean me.
It is.
The house, a number of hero iconic products, but relative to the wall there.
Speaker 3: a number of hero iconic products but relative to others.
Specialty makeup of all people around the house relatively few skus and participatory doesn't participate really in a lot of very meaningful categories.
Speaker 3: specialty makeup products. It's a brand that has relatively few SKUs and doesn't participate really in a lot of very meaningful categories. Another key plank of milk's growth is innovation and new launches.
The other key plank or well it makes growth.
Is it innovation and new launches.
Abe I'll address not only can come back to what <unk> the point of distribution.
Speaker 3: in our address now in the point of distribution. We have a great partner in Sephora and we are really...
We have a great partner and support and we are really.
While we are fully penetrated into the stores in North America, there's plenty of opportunity internationally distinguishes afford it also when we look at a consumer standpoint.
We have a great partner in Sephora and we are really...
Speaker 3: While we are fully penetrating into stores in North America, there's plenty of opportunity internationally still within Sephora. Also when we look at our consumers.
While we are fully penetrating in terms of stores in North America, there's plenty of opportunity internationally still within Sephora. Also, when we looked at a consumer standpoint, anti-T2A, we've only touched about 3% of the Sephora clientele. So there is plenty of room to still grow within Sephora. But of course, extending our footprint outside of Sephora is something that we are...
N P to languish only touch the about 30% or so for a clientele. So there is plenty of room to still grow with him sephora, but of course, extending our footprint outside of support is something that.
Speaker 3: anti-T2A, we've only touched about 3% of the Sephora clientele. So there is plenty of room to still grow within Sephora, but of course extending our footprint outside of Sephora.
We are doing already particularly in places like I wouldnt be doing, particularly like the UK, where so for us I, particularly love it.
Speaker 3: that we are doing already, particularly in places like, we'll be doing particularly like the UK which are forests and particles.
to an already particularly in places like I will be doing particularly like the UK where is a force and a particle in a loop.
The particularly strong today, but.
Speaker 3: particularly strong today. But also we will evaluate whether
But also we will evaluate whether it.
particularly strong today. But also we will evaluate whether
When and.
When is the right time to expand distribution throw them into the U S. But for now it's a hornet's likely partner and we think we still have about 10 P. M.
Speaker 3: when and when is the right time to expand distribution further in the US. But for now, Sephora is a great partner and we think we still have a plenty of time.
when is the right time to expand distribution for individuals. But for now, Sephora is a great partner and we think we still have plenty of room to go.
Cool.
In the case of whole bacci, why just less of a peak away is less of a marketing driven.
Speaker 3: In the case of Avaji, Avaji is less of an anti-gwaist, less of a market.
In the case of Obagi, Obagi is less of an anti-gwaist, less of a marketing driven.
Company and he said, we are a company, which Brian which we based on science and 60 ish on the Spanish a great push business seem to physicians and physicians are recommended credential that brought into to consumers. We think there is an opportunity on the oral what can you do it on an opportunity to also create.
Speaker 3: company is we are a company which brand which we based on science and physician dispense a great push business into physicians and physicians recommend and credential the brand to consumers. We think there is an opportunity or an opportunity to also create additional consumer pool into a brand by having consumers coming to our physicians asking for Obagi and having the great kind of transformative solutions that Obagi can provide.
We are a company which we based on science and physician dispense, a great push business into physicians and physicians recommend and credential the brand to consumers. We think there is an opportunity to also create additional consumer pool into a brand by having consumers coming to our physicians, asking for a body and having the great.
Additional consumer pool into O'brien by having consumers coming towards physicians asking for a boggy and having the great.
The solution that you can provide to us.
So you will see over the coming quarters, an increase on.
Speaker 3: So you will see over the coming quarter an increase.
transformative solutions that a body can provide to them. So you will see over the coming quarter an increase on...
Consumer pool in marketing support and allowed you to be able to to do that.
Speaker 3: consumer pool and marketing support in Obagi to be able to do that.
consumer pool and marketing support in Obagi to be able to do that.
Got it thanks for the color.
Thanks, John .
As a reminder, if you wish to ask a question. Please press star and one you're.
Thanks for the call.
Thanks, Trina.
Your next question comes from Olivia Tong with Raymond James. Please go ahead.
As a reminder, if you wish to ask a question, please press star and 1.
Great. Thanks, Good morning, and congrats on your first public quarter.
Your next question comes from Olivia Tong with Raymond James. Please go ahead.
Speaker 6: Great thanks good morning and congrats in your 1st, public quarter. I had a few questions on specific brands and then a couple of longer term questions. But 1st, in the brand.
Hum.
A few questions on on specific brands and then a couple of longer term question, but first in the brands.
Great, thanks. Good morning and congrats in your first public quarter. I had a few questions on specific brands and then a couple of longer term questions. But first on the brands, on Obagi, obviously, realizing of course that you are managing to the year rather than quarters, it does seem like the skincare category did outpace Obagi's growth. So could you just talk about what is happening in the second half to turn that around and the drivers of that and and
I know bacci, obviously I realize of course that you are managing to the year rather than quarters. It does seem like the skincare category did outpace <unk> growth. So could you just talk about what is happening in the second half to to turn that around and and and the drivers of that and.
Speaker 6: On Obagi, obviously, realizing, of course, that you are managing to the year rather than quarters, it does seem like the skincare category did outpace Obagi's growth. So could you just talk about what is happening in the second half to turn that around and the drivers of that and how you think about its growth versus the category going forward?
And how how you think about its growth versus the category going forward.
Yes.
how you think about its growth versus the category going forward.
Yeah. Thank you. Thank you for the question I think one thing perhaps too to understand is when we present the MPD data and that he said there is a difference so quite a distribution pursues a versus where ore body is is placed on we just put it as a point of reference to see you kind of be.
Speaker 3: Thank you for the question. I think one thing perhaps to understand is, when we present the MPD data, there is a different circuit of distribution versus where OBAGI is placed. We just put it as a point of reference to see the overall appeal of skin care. We're very pleased with the development of OBAGI in North America. We do our physician dispense business.
Thank you for the question. I think one thing perhaps to understand is when we present the MPD data, that is a different circuit of distribution versus where OBAGI is placed. We just put it as a point of reference to see the overall appeal of skincare. We're very pleased with the development of OBAGI in North America. We do our physician dispense business.
The overall appeal.
Skin care, we're very pleased with the development of a whole logic North America, we grew our physician dispense business.
So by eight 4% others potential international International girlfriend, I thought you said.
Speaker 3: As you saw by 8.4%, there's plenty of international growth.
As you saw by 8.4%, there's plenty of international growth. And as I said in response to Jono's question, I think there's an opportunity with Obagi to complement the commercial push that we have for the commercial selling with consumer pool and consumer demand, which we think will further accelerate our growth.
We're supposed to join US question I think there's an opportunity with a boggy to complement the commercial push that we have for the commercial.
Speaker 3: to Jonas question I think there's an opportunity with Obagi to complement the commercial push that we have for the commercial selling with consumer pool and consumer demand which we think will further accelerate our our growth
Selling with a consumer pool like listen to them, which we think will further accelerate our.
Oh no.
Got it and then with respect to milk I know that you know you've obviously got the exclusive right now, but you know.
Speaker 6: Got it. And then with respect to milk, I know that, you know, you've obviously got the exclusive right now. But, you know, can talk about the opportunity to improve the or to accelerate the customer penetration.
Thank you. Got it. And then with respect to milk, I know that you've obviously got the exclusive right now. But can you talk about the opportunity to improve or to accelerate the customer penetration at Sephora? And then also with respect to further expansion in not only in first in US markets, but then also eventually overseas, can you talk about how you're thinking about...
Can you talk about the opportunity to improve the or or to accelerate the customer penetration.
That's it for and then also with respect to further expansion and not only in our first in the U S markets. But then also eventually overseas can you talk about how you were thinking about the timeline for that expansion and are you looking at particularly largest retailer.
Speaker 6: at Sephora and then also with respect to further expansion in not only in first in US markets, but then also eventually overseas.
Speaker 6: Can you talk about how you're thinking about the timeline for that expansion? And are you looking at particularly largest retailers, a whole group of retailers as far as expanding Milk Beyond its current base?
the timeline for that expansion? And are you looking at particularly, you know, largest retailers, a whole group of retailers, as far as, you know, expanding Milk beyond its current base?
There's a whole group of retailers as far as you know expanding well beyond its current base.
Thank you Olivia.
So I think the first as I said, all with a floor and some very strong partnership and one that we think still has a long way.
Speaker 3: So I think that the first, as I said, our with the four is a very strong partnership and one that we think still has a long way. We've touched only about.
Thank you, Olivia.
So I think that first, as I said, Al, with Sephora, it's a very strong partnership and one that we think still has a long way. We've touched only about 3% of Sephora T&L. One way to expand that, and we are intently focused on that, is building the awareness of the brand as well as introducing the product. So these are strategies that are broad strategies, are the strategies that are going to bring more consumers into the brand. In fact, we had this year so far about a...
We touch only about 40% of the so called Cantel, one way to expand out we're intently focused on that is building the awareness of the brand as well as introducing new products. So these are studies that are broad strategy started the study that we're going to bring more consumers into about a in fact, we had.
Speaker 3: 3% of the support at Lientel. One way to expand that we are intently focused on that is building the awareness of the brand as well as introducing the product. So these are strategies that are broad strategies that are going to bring.
Speaker 3: more consumers into the brand. In fact, we had this year so far about a 48 to 50 percent increase.
This year, so far about 48% to 50% increase in new consumers coming into the ground through support. So we are building a new consumers as we speak are coming into the Bronx now an important thing on distribution is the one thing too to understand all of the makeup business what makes up the bulk door strategy.
Speaker 3: in new consumers coming to run through Sephora. So we are building new consumers as we speak coming in.
Speaker 3: Now, an important thing on distribution is that one thing to understand about the makeup business is makeup is a top-door strategy.
Is it is relatively easy, but sometimes dangerous to expand distribution to fast I hate that word I supposed abroad. So we want to have a very disciplined approach to our distribution expansion for now we have indications of U S exclusivity with Sephora, we just reading long level until the end of 2020.
Speaker 3: It is relatively easy but sometimes dangerous to expand distribution too fast ahead of the awareness of the
Speaker 3: So we want to have a very disciplined approach to our distribution expansion. For now we have in the case of the US an exclusivity with Sephora that we just renewed not long ago until the end of 2023. They continue to be great partners and if we were to expand again we're going to expand and shift again.
We want to have a very disciplined approach to our distribution expansion. For now, we have in the case of the US an exclusivity with Sephora that we just renewed not long ago until the end of 2023. They continue to be great partners. And if we were to expand again, we're going to expand in a very ROI disciplined way into keep delivering the same amazing technology but at the same time from an internally often
Three.
They continue to be great partners and he will work to expand again, we're willing to expanding library.
Roy disciplined way into key keep top doors.
Speaker 3: ROI discipline way into key top doors in countries.
In country as well as interchange.
key top doors in countries as well as internationally.
Great. Thanks, and then.
It's brought or you have a really unique business model and strategy. So could you talk a little bit about what role your current brands play versus the potential for acquisitions and new brands, who you think your competition is you know is it private equity is it strategics and just thinking about the path you know over the next not necessarily.
Speaker 6: Just broader, you have a really unique business model and strategy. So could you talk a little bit about what role your current brands play versus the potential for acquisitions of new brands?
Great, thanks. And then just broader, you have a really unique business model and strategy. So could you talk a little bit about what role your current brands play versus the potential for acquisitions of new brands, who you think your competition is? Is it private equity? Is it strategic? And just thinking about the past over the next, not necessarily just this year, but three to five years or so in terms of your growth profile, just given how unique your...
Speaker 6: Who you think your competition is, you know, is it private equity, is it strategic? And just thinking about the past, you know, over the next, not necessarily just this year, but three to five years or so in terms of your growth profile, just given how unique your strategy and model are. Thank you so much.
Just this year, but three to five years or so in terms of your growth profile just given how unique your your strategy and model are thank you. So much I appreciate it.
I don't think so.
Great question.
your strategy and model are. Thank you so much. I appreciate it. Thanks, Olivia. Great question. I guess the way to frame the role of the brands and acquisition strategy is the goal that we set out at the beginning. We want to build a global best-in-class house of brands. We are starting with two brands in some of the most, if not the most attractive segments of beauty today. We continue to add brands in all categories as well as...
Speaker 3: Absolutely. Great question. I guess the way to frame the role of the Brownson acquisition strategy is the goal that we set out to begin. We want to build a global best-in-class household.
The way to frame to frame our the royalty brought us on the acquisition. The acquisition strategy is the goal that we set at the beginning we want to build a global best in class.
Household loans and we are starting with two wrong in some of the most if not the most attractive segments of beauty today, we'll continue to add brands you know what category, you're supposed to what else within the skincare and.
Speaker 3: We are starting with two brands in some of the most, if not the most, attractive segments of beauty today. We continue to add brands in all categories as well as within the skincare and makeup categories that are complementary and incremental to our business. I think the playbook for new acquisitions is very similar to what we have deployed. It's first starting …
In makeup category that are complementary and an incremental two core business I think the play the playbook for New York decisions are very similar to what we have deployed its first starting with <unk>.
within the skincare and makeup category that are complementary and incremental to our business. I think the play, the playbook for new acquisitions is very similar to what we have deployed. It's first starting with...
Brown and some of them, even though that is real brands both of her connection with consumers that are authentic connections with their communities that we talk to activate them.
Speaker 3: brands and what I mean by that is real brands, brands that have a connection with consumers, their authentic connection with their communities and we activate them. If brands, probably that financial profile are likely similar.
And what I mean by that is real brands, brands that have a connection with consumers, that are authentic, connection with their communities, a way to activate them. Brands probably that have a financial profile are likely similar to what we have seen so far. Brands perhaps in the very December between $40 to $200 million, with probably the sweet spot being around $80 to $120. These brands are typically profitable and cash generating, and as a consequence, they provide a great...
Brian , it's probably that from a financial profile or like a similar to.
What do we have seen so far brands, perhaps never ever do somewhere between call it $40 million to $200 million with Proteus sweet spot being around 80 to 120.
Speaker 3: where we have seen so far brands perhaps in that range is somewhere between call it 40 to 200 million dollars with probably a sweet spot being around 80 to 120. These brands are typically profitable and cash generating and as a consequence they provide a great further springboard to welding cars and these are brands that could benefit that should benefit from the global scale of participating in the welding cars platform. In terms of
These brands, particularly profitable and cash generating and as a consequence.
They provide great further springboard to all because these are brands that could benefit that should benefit from the global scale of participating in the world and cross platform.
further springboard to Worldincast and these are brands that could benefit, that should benefit from the global scale of participating in the Worldincast platform.
And in terms of the cadence of these we think that.
We see a we see how all that goes with all of our focus today is.
In terms of cadence of these, we think that...
Speaker 3: we will see how it goes, our focus today.
we will see how the focus today is really on the operational excellence and continued growth of these brands. So we think that a likely cadence of maybe one a year or so is probably a proven cadence on acquisitions. Regarding who is our competition, the amazing thing about the beauty business, one of the ways to say it istransform intoNT Doom or
Really on.
The operational excellence and continued growth of these brands. So we think that unlikely to kick us off maybe one a year or so.
Speaker 3: really on the operational excellence and continued growth of these brands. So we think that a likely cadence of maybe one a year or so is probably a proven cadence on acquisitions. Regarding who is our competition, I mean the amazing thing about the beauty business, one of the many features that are amazing about the beauty business is the reality is that there are more wonderful, fantastic, compelling and interesting assets out there than there are buyers. So we don't think...
Prudent.
Cadence on acquisitions it doesn't cause a competition I mean, the the amazing thing about the beauty business. One of the many features that are making all the beauty piece, which is the reality is that there are more wonderful fantastic compelling and interesting assets out there than they are than a buyer. So we don't think of it as a necessarily.
many features that are amazing on the beauty business is the reality is that there are more wonderful, fantastic, compelling and interesting assets out there than there are buyers. So we don't think of it as necessarily competition. I think what we provide in WallTime holders are very unique.
Competition I think what we are providing welding gives us a very unique.
Speaker 3: necessarily competition. I think what we provide in WorldLink is a very unique.
Last one for Brian some founders to participate in the upside girls.
Speaker 3: platform for brands and founders to participate in the upside growth with a brand and be able to create, be part of creating with us the next best-in-class global and well-being, good and wellness global platform. So there is more assets, there are more sellers and there are buyers, there's plenty of great asset.
With our broad and be able to create the part of creating with US. The next best in class global on whether that's a good deal of wellness Golar platform. So there is more of a sense of they are there are more sellers than there are buyers, there's plenty of great assets and we.
platform for brands and founders to participate in the up cycles with a brand and be able to create
be part of creating with us the next best in class global and wellness, beauty and wellness, global platform. So there is more assets that there are more sellers than there are buyers. There's plenty of great assets and we think we have a very good line of sight to a number of great brands.
We have very good line of sight to a number of.
Speaker 3: And we think we have a very good line of sight to a number of great, great brands.
Great Great brands.
Great. Thanks, all the best.
Thank you Joe.
Yeah.
Great, thanks. All the best.
This concludes the question and answer session I would now like to turn the conference back over to Michel Bussi for any closing remarks.
Thank you.
Speaker 1: This concludes the question and answer session. I would now like to turn the conference back over to Michel Brousset for any...
This concludes the question and answer session. I would now like to turn the conference back over to Michel Brousset for any closing remarks.
No I just wanted to say, thank you to everyone I am looking forward to speak.
Speaker 3: No, I just want to say thank you to everyone. I am looking forward to speaking to you again on Q3. Thank you very much.
Speaking to you again in Q3.
I just want to say thank you to everyone. I am looking forward to speaking to you again on Q3. Thank you very much.
Thank you very much.
Yeah.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating have a pleasant day.
This concludes today's conference call. You may disconnect your lines. Thank you for participating. Have a pleasant day.
[music].
Speaker 7: The.
you
Speaker 7: The.