Q1 2021 Investor Presentation - Yatsen Holding Limited
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Q1 2021 Investor Presentation Yatsen Holding Limited
Disclaimer
This presentation has been prepared by Yatsen Holding Limited (the “Company”) solely for information purpose. By viewing or accessing the information contained in this material, you hereby
acknowledge and agree that no representations, warranties or undertakings, express or implied, are made by the Company or any of its directors, shareholders, employees, agents, affiliates,
advisors or representatives as to, and no reliance should be placed upon, the accuracy, fairness, completeness or correctness of the information or opinions presented or contained in this
presentation. None of the Company or any of its directors, shareholders, employees, agents, affiliates, advisors or representatives accept any responsibility whatsoever (in negligence or
otherwise) for any loss howsoever arising from any information presented or contained in this presentation or otherwise arising in connection with the presentation. The information presented or
contained in this presentation is subject to change without notice and its accuracy is not guaranteed.
This presentation does not constitute an offer to sell or issue or an invitation or recommendation to purchase or subscribe for any securities of the Company for sale in the United States or
anywhere else. No securities of the Company may be sold in the United States without registration with the United States Securities and Exchange Commission (the “SEC”) or an exemption
from such registration pursuant to the Securities Act of 1933, as amended (the “Securities Act”) and the rules and regulations thereunder. No part of this presentation shall form the basis of or
be relied upon in connection with any contract or investment decision in relation to any securities or otherwise. This presentation does not contain all relevant information relating to the
Company or its securities, particularly with respect to the risks and special considerations involved with an investment in the securities of the Company. Nothing contained in this presentation
shall be relied upon as a promise or representation as to the past or future performance of the Company. Past performance does not guarantee or predict future performance. You acknowledge
that any assessment of the Company that may be made by you will be independent of this presentation and that you will be solely responsible for your own assessment of the market and the
market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the business of the
Company.
Certain statements in this presentation, and other statements that the Company may make, are forward-looking statements within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act of 1934, as amended. These statements reflect the Company’s intent, beliefs or current expectations about the future. These statements can be recognized
by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” “intends,” “anticipates,” “believes,” “confident” or words of similar meaning. These forward-looking statements are
not guarantees of future performance and are based on a number of assumptions about the Company’s operations and other factors, many of which are beyond the Company’s control, and
accordingly, actual results may differ materially from these forward-looking statements. The Company or any of its affiliates, advisers or representatives has no obligation and does not
undertake to revise forward-looking statements to reflect future events or circumstances.
This presentation also contains non-GAAP financial measures, the presentation of which is not intended to be considered in isolation or as a substitute for the financial information prepared and
presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In addition, the Company’s calculation of these non-GAAP financial
measures may be different from the calculation used by other companies, and therefore comparability may be limited. The reconciliation of those measures to the most comparable GAAP
measures is contained within this document or available at the Company website http://ir.yatsenglobal.com/.
2
Business Review
3
Q1 2021 Highlights
9.6MM ~¥123
+42.7% 68.6% Average net
YoY Gross DTC revenue per
Growth Margin Customers DTC
customer
¥1.4Bn +7 percentage points +11.6% +24.5%
Net revenues YoY increase YoY increase YoY increase
(vs. ~¥99 Average net
revenue per DTC
customer in Q1 2020)
4
Focus on Execution
Optimize brand Expand Enhance infrastructure
performance portfolio and capabilities
5
Performance Optimization Strategy
Extend brand ceiling
• Premiumization • SKU buildouts / refreshes
• Category expansions • Channel diversifications
• Geographic expansions
Accelerate sales growth (Mainland
China)
• Ramp up online sales • Expand channels
• New product launches
Optimize brand performance
• ROI optimization • New product launches
6
Our Color Cosmetics Brands
Perfect Diary Little Ondine Pink Bear
• Flagship brand with higher-end mass • Masstige color cosmetics brand with • Focus on the lower-end mass
market positioning street fashion brand positioning cosmetics segment appealing to Gen Z
• Increased contribution from diversified • Robust Q1 YoY growth performance & Gen A’s(1)
channels • Supported by crossover collaborations • Initial positioning of high value-for-
• Brand upgrade driving increase in ASP and new product launches money in high volume categories
and AOV
Pink Bear
• New product launches and category
Clear Moisture
expansions planned for the rest of 2021 Little Ondine Lip Gloss
#Vinyl records
Eyeshadow Palette
ReadMe Weightless
Velvet Lip Gloss
(Launched late March)
Note:
1. Gen-A, or Generation Alpha, or defined as those born from 2010 to 2025
7
Our Growing Skincare Portfolio
(Mainland China)
• Self-incubated mass market skincare brand • Professional dermatological positioning in
• Originally co-developed with DTC the masstige space
customers from our wechat channel Ceramide • ~20 years brand history in Asia Intensive Renewal
Repairing Mask Serum with
• Hero product: ceramide repairing mask • Hero product: mandelic acid-based serums
for sensitive skins Mandelic Acid
• French premium skincare brand • Luxury UK skincare brand
• R&D support from Pierre Fabre • Established global team with sales
• Hero product: anti-aging Secret network and comprehensive product line
d’Excellence Serum • Hero product: Eve Lom Cleanser Eve Lom
Cleansing Balm
Anti-aging Secret
d’Excellence
Serum
8
Integration Update
Q1 Continued execution focus
• Positive initial market testing in China
• Early successes in relaunch of new VC
serums
• Successful completion of the deal in Jan • Rejuvenate brand positioning
• New management & operational team • Revamp product lines
• Early success in relaunch of mandelic • Accelerate ecommerce
(Mainland China)
acid series • Optimize supply chains
• Successful completion of the deal in Mar
• Retained existing team
• Transition arrangements
Infrastructure platform +
consumer know-how + resources
9
Building a Multi-brand Global Beauty Platform
Price Focus on
2021
2020 Skincare
2019
(Mainland
China)
2021
High-end
2020 Cosmetics
2017
2021
R&D / OEM
Partnerships
Color
Skincare Others
Cosmetics
Leverage window of opportunity to acquire attractive global
brands in a prudent and cost-effective manner
10Growing Presence in Southeast Asia
Market entry into
Southeast Asia in 2020
One of the top selling brands in the online
#1 cosmetics category in Vietnam, Malaysia,
Singapore and Philippines
Malaysia local star Joey PD launched Sanrio Vietnamese Pop Singer International Artist Anna
Chua endorsing Fancy Character collaboration AMEE became first brand applying Perfect Diary Fancy
Carp Lucky Set series specifically for ambassador for Perfect Diary Carp eyeshadow palette
Southest Asia markets Lip-Makeup in Vietnam
11Commitment to R&D
Own R&D capabilities Own R&D facility
R&D expense as
• 75 global patents registered*
% of net sales
• (36 invention patents included*）
• 200+ R&D, product development
1.9%
and production management
1,800-square-meter &D Center in GZ
began operation in July 2020
Internal
1.2%
External
Cosmax JV Factory “OpenLab” External Collaborations
and Lab Architecture
1Q2020 1Q2021 Building R&D and manufacturing facilities
Note: with Cosmax in Guangzhou
* As of 3.31.2021
12Technology at the Core of Our Infrastructure
(Mainland
China)
Customers
Superior Omni- Highly Social, Data-driven Comprehensive
World-class
channel DTC Digitally Native Product & Dedicated
Supply Chain
Operations Sales & Marketing Development Customer Service
Technology & Data
Advanced Digital Infrastructure
Engaging User
Database of Customer Insights Social Marketing Engines
Interface Platforms
13Building Our Omni-channel Capabilities
# of Experience Stores
245
• Focused on operational enhancements for
existing network during Q1
• Already achieved significant scale covering
key cities and regions in China
• Targeting ~100 openings in 2021
49
2020Q1 2021Q1
14Financial Review
15Healthy Revenue Growth and Gross Margin Improvement
Net Revenue Gross Profit and Gross Margin
(RMB MM) (RMB MM)
61.7% 68.7%
+42.7% 1,444 +58.8% 992
1,012
624
1Q2020 1Q2021 1Q2020 1Q2021
Gross margin
16Operating Expenses Remain Elevated
GAAP Operating Expenses
79.1% 92.4%
1.9%
11.9%
1.2%
12.3%
72.1%
55.0%
10.6% 6.4%
1Q2020 1Q2021
Fulfillment exp S&M exp G&A exp R&D exp Operating exp as % of net revenue
17Profitability
Net Loss Net Loss Margin
(RMB MM)
(129)
-12.8%
(192) -16.2%
(234) -18.9%
-22.1%
(319)
1Q2020 1Q2021 1Q2020 1Q2021
GAAP Net Loss Non-GAAP Net Loss (excl. Share-based Compensation(1))
Note:
1. Non-GAAP net loss is a non-GAAP financial measure, which is defined as net loss excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from assets and business
acquisitions and (iii) tax effects on non-GAAP adjustments
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