Waldencast (WALD) Canaccord Genuity 44th Annual Growth Conference & Private Company Showcase 2024 summary

Business model and differentiation

• Operates as a multi-brand platform, acquiring and scaling high-growth, purpose-driven brands.

• Focuses on asset-light operations, with dedicated teams for each brand to ensure speed and flexibility.

• Combines operational discipline of large incumbents with entrepreneurial agility.

• Prioritizes brands with authentic consumer followings in attractive market segments.

• Seeks complementary brands, especially in professional and consumer beauty categories.

Brand portfolio and acquisition strategy

• Current portfolio includes Obagi (medical skincare) and Milk (clean makeup), both leaders in their segments.

• Looks for brands with strong consumer loyalty and leadership in high-growth categories.

• Open to acquiring brands in makeup, hair, skincare, and fragrance, focusing on favorable structural economics.

• Plans to acquire about one brand per year, with significant opportunity for future growth.

• Prefers non-celebrity brands unless they have transcended celebrity status.

Brand performance and growth drivers

• Milk's sales doubled from $47M in 2022 to $100M in 2023, with EBITDA margin reaching 29% in Q1.

• Obagi achieved 81% gross margin in Q1, driven by operational efficiency and product mix.

• Milk's growth is fueled by increased marketing, innovation, and international expansion.

• Obagi's growth comes from digital channel expansion, increased marketing, and rebuilding Southeast Asia operations.

• Both brands have gross margins in line with or better than best-in-class beauty peers.