Sally Beauty Holdings, Inc. OverviewAugust 2015

Company Highlights

Sally Beauty Holdings is a leading international specialty retailer and distributor of professional beauty products

Annual consolidated sales of over $3.8 billion

Strong cash flow generation

Approximately 4,941 stores located in 13 countries (1)

Industry leading position with ~33% channel share

Proven resilience in recessionary cycles

Well-positioned for long-term growth

Two distinct business segments

(1) As of June 2015, fiscal 2015 third quarter

Consolidated Fiscal 2014 Results

Net Sales Gross Margin

Segments

Customers• Retail consumers

• 75% of sales• Professional stylists, small salons,

chair/suite rentals• 25% of sales

• Stores – Chair/suite rentals• 65% of sales

• Full Service Sales - small to medium sized salons

• 35% of sales

Company Highlights

3,655 stores worldwide (1)

Retail consumers (75% of sales) 

Professional stylists (25% of sales)

SalesSSS growthEBITEBIT margin

Segment

DistributionChannel

Customers

FY2014Financials

$2.3b1.3% vs. (0.6%) in FY13$432m18.7%

Company Highlights

(1) As of June 2015, fiscal 2015 third quarter

SalesSSS growthEBITEBIT margin

Segment

DistributionChannel

Customers

FY2014Financials

1,286 stores (1)

952 direct sales consultants (1)

Professional stylists (chair/suite renters)

Salons (via BSG’s direct sales consultants)

$1.4b3.5% vs. 4.2% in FY13$217m15.0%

Company Highlights

(1) As of June 2015, fiscal 2015 third quarter

Company Highlights

Open‐Line Retail Exclusive / Full‐Service

3,655 stores 1,286 stores 952 consultants

Professional stylists

` Retail Consumers $$$ High-end$ Value

Customers:

Distribution:

SBH plays an important role in the supply chain

Salons

(1) As of June 2015, fiscal 2015 third quarter

Industry Growth

$1.6 $1.7 $1.8 

$2.0 $2.1 $2.2 $2.3 

$2.4 $2.6 $2.7 

$2.9 $2.9 $3.0 $3.1 

$3.3 $3.4 $3.5 

$3.7 $3.8 $3.8 $4.0 

$4.2 $4.5 $4.6 

$4.8 

 $‐

 $0.5

 $1.0

 $1.5

 $2.0

 $2.5

 $3.0

 $3.5

 $4.0

 $4.5

 $5.0

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

($ in

 billions)

U.S. Salon Industry Product Sales(at wholesale $’s)

Growth of 3.1%

RecessionResistantIndustry

Source:  Professional Consultants & Resources (PCR) / www.proconsultants.us

8

Haircare ProductSales of $3.1b byDistribution Channels

Mega-SalonManufacturer direct to large-format salons

12% (2)

$0.4B

41% (2)

$1.3B

33% (2)

$1.0B

13% (2)

$0.4B

Direct SalesManufacturer direct to manufacturer-owned salons or “high-end” salons

Open-LineDistributes professional product to the public via retail stores

Competition:Local and regional operators

Exclusive / Full-ServiceThird party distribution to salons and beauty professionals via sales force and “professional only” stores

Competition:L’Oreal’s

Area of focus for SBH

Source: Professional Consultants & Resources, 2014 Study.(1) Professional beauty supply channel size based upon a 2014 study of manufacturer-level sales conducted by Professional Consultants & Resources. The study estimates that 2014 salon haircare product sales (at manufacturer dollars) were approximately $3.1 billion. (2) Represents an estimated breakdown of salon haircare product sales in 2014by channel of distribution.

Haircare Products – Sales by Salon ChannelAt Manufacturers’ $’s (2014) – Only U.S.

Industry Overview

All other Beauty Supply Stores

Business Segment Overview

Sally Beauty : Overview

Sally Beauty Supply global footprint

3,655(1) stores worldwide

2,848 stores in U.S. (including Puerto Rico)

807 stores in Canada, the UK, Ireland, Belgium, Netherlands, France, Germany, Spain, Chile, Colombia, Peru & Mexico

Average store size 1,700 sq. ft., 90% selling space

Professional open-line business -merchandise assortment not available through mass retailers

Destination for professional hair careand solutions

(1) As of June 2015, fiscal 2015 third quarter

Initiatives are centered‐around creating points of difference in our stores, our merchandise,and our marketing

Sally Beauty : Initiatives

Nail Studio – Highlighting vast selection

Store Refresh in U.S.

Sally Beauty : Marketing Initiatives

In Store Solution Guide Direct Mail Exterior Sign

Pro Flyer

TargetedDigital Ads

Email

Social MediaSB.com

Access Hollywood

TV Morning Shows

BloggerNetwork

DigitalVideoBeauty Box

Auto-Replenish CRM

Text

Sally Beauty : Initiatives

National television campaign:Sponsorship of Lifetime® Project Runway

Sally Beauty : Historical Sales

2.7%3.8%

2.4% 2.4% 2.7%

1.2%2.1%

4.1%

6.3% 6.5%

-0.6%1.3% 1.7%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD15

$1,208 $1,296 $1,359 $1,419 $1,567 $1,673 $1,696 $1,835 $2,012

$2,199 $2,230 $2,309

$1,747

$0$400$800

$1,200$1,600$2,000$2,400$2,800

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD15

Sally Beauty Supply Net Sales

Sally Beauty Supply Same Store Sales

Growth of 1.1%

7%

8%

14%

10%

17%

23%

22%

Sally Beauty : Merchandise Offering

Hair Care

Hair Color

Skin and Nail Care

ElectricalAppliances

Brushes,Cutlery andAccessories

Other BeautyItems

We offer a diversified mix of beauty products 

EthnicProducts

45% of Sales from Hair Care & Color

*Fiscal  year 2014 

Expand store base organically and through acquisitions; domestic and international

Plan to grow store base 3 to 4 percent in FY2015 and beyond

Increase customer traffic through loyalty programs and customer relationship management (CRM)

Further enhance e-commerce platform

Growth Initiatives

2,511 2,694 2,844 2,923 3,032 3,158 3,424 3,5633,309

0

1,000

2,000

3,000

4,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

Worldwide Sally Beauty Supply Stores

Sally Beauty Supply Store Economics US

Capital Required $70k

Average Inventory $85k

Positive Contribution Margin 4 Months

Cash Payback on Investment 2 Years

7.3% 5.6% 2.8% 3.7% 4.2% 4.8% 3.5%Growth

Sally Beauty Growth Initiatives

3.4% 4.0%

Sally Beauty Supply: International Opportunity

807 Sally Beauty stores located in 13 countries

Stores located in Canada, the UK, Republic of Ireland, Belgium, France, the Netherlands, Germany, Spain, Chile, Colombia, Peru & Mexico

25% of Sally Beauty sales from international

Sales mix differs from U.S./Canada

UK/Europe

~80-85% professional ~15-20% retail

Mexico and South America almost 100% retail

Existing International Platform Long‐Term Store Growth Potential (1)

(Canada)~250

(Mexico)192 ~250

(UK / Ireland)260 ~300

(Belgium, France, Germany, Spain, Netherlands)

197 600‐800

(Chile)40 ~45

PotentialCurrent

110

(Colombia)

1

Total 807 ~1,500+

(Peru)~40

(1) As of June 2015, fiscal 2015 third quarter

7

~50

Most recent international store opening: Colombia, S.A.

Located in high‐end shopping mall 

Demographic is retail consumer

U.S.

Chile, S.A.

United KingdomPeru, S.A.

Store designs vary by country and customer demographic

Sally store design examples

Beauty Systems Group: Overview

Beauty Systems Group – 1,286(1) (professional stores & 952 professional distributor sales consultants

1,118 company-operated / 168 franchised stores (Armstrong McCall)

952 professional distributor sales consultants

Average store size 2,700 sq. ft.

Sells to salons and salon professionals

Professional exclusive / full-service business –includes merchandise assortment of premium brands sold through salons and not available in mass or at Sally stores

LoxaBeauty.com, the online retail solution for salon/stylists, launched in March 2014

(1) As of June 2015, fiscal 2015 third quarter

BSG: Strong, Consistent Financial Track Record

$616 $802

$895 $954 $945 $975 $941 $1,081

$1,257 $1,325 $1,392 $1,445

$1,123

$0$200$400$600$800

$1,000$1,200$1,400$1,600

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD15

BSG Net Sales 

4.6%

8.5%

(0.6%)

4.1%

10.1%

6.9%

1.0%

6.2% 5.5% 6.1%4.2% 3.5%

5.1%

(4.0%)

0.0%

4.0%

8.0%

12.0%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD15

BSG Same Store Sales Growth 

Growth of 3.8%

BSG: Merchandise Offering

We offer a diversified mix of beauty products not carried in Sally stores or mass retail

7%6%

10%

12%

31%

35%

Hair Care

Skin and Nail Care

ElectricalAppliances

PromotionalItems

Other BeautyItems

Hair Color

*Fiscal  year 2014 

BSG: Industry Growth

828 874 929 991 1,0271,151 1,190

0

400

800

1,200

2006 2007 2008 2009 2010 2011 2012 2013 2014

Expand store base organically Further penetrate existing geographies

Enter new territories

Expand gross margins as sales shift to the stores

Seek potential fold-in acquisition opportunities

Capital Required $80k

Average Inventory $150k

Positive Contribution Margin 4 Months

Cash Payback on Investment 2 Years

Growth Initiatives

BSG Store Economics5.6% 6.2% 6.7% 3.6% 12.0% 3.4% 4.6%Growth

1,245

6 46 44 16 36

0 0 11 46 0

Organic

Acquisition39

8539

04312

Store GrowthStore Growth

1.6%

200

1,265

Consolidated Results

Solid Balance Sheet

Long‐term debt (as of 6/2015)Amount($mm)

% ofTotal Debt 

5.750% Senior Notes (FY2022) $857.0 47.4%6.875% Senior Notes (FY2019) $750.0 41.5%

Total Debt $1,807.0 100.0%

$750 $857 

$200 

 $‐

 $100

 $200

 $300

 $400

 $500

 $600

 $700

 $800

 $900

 $1,000

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

No near-term maturities

In November 2011, refinanced Sr. and Sr. Sub Notes for $750mm of 6.875% Senior Notes due 2019

In May 2012, refinanced the Term Loan B with $700mm of 5.75% Senior Notes due 2021

Targeted consolidated pro forma leverage ratio of 2.0x – 2.5x

Ample liquidity

Strong cash flow

ABL Revolver of $500 million

Refinanced July 26, 2013; lowered rate and increased availability to $500 million

October 2013, issued $200 million aggregate principal amount of 5.50% Senior Notes due 2023

5.500% Senior Notes (FY2023) $200.0 11.1%

Revolving ABL facility $0.0 0.0%

Long‐term debt Maturity

$0.32

$0.44$0.52

$0.77

$1.07

$1.42$1.48

$1.53

$1.15

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

2007

2008

2009

2010

2011

2012

2013

2014

YTD15

2.0%YoY

Sales and EPS Growth for total Company

$2,514 $2,648 $2,637

$2,916

$3,269

$2,870

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 YTD15

$3,524$3,622

Sales EPS (adjusted)

2.2%YoY

$3,754

(1)

(1) Includes $59.7 million, or 210 points of growth, of unfavorable F(X) exchange rates

Addendum:  Adjusted EBITDA Reconciliation

Adjusted EBITDA FY10 FY11 FY12 FY13 FY14 1Q15 2Q15 3Q15 YTD2015Net Earnings (GAAP) 143.8$      213.7$      233.1$      261.2$    246.0$       54.9$     61.5$        62.5$        178.9$     

Interest expense, net of interest income 113.0 112.5 138.4$      107.7$    116.3$       29.2$     29.3$        29.2$        87.7$       Provision for income taxes 84.1 122.2 127.9$      151.5$    144.7$       32.1$     38.2$        39.2$        109.5$     Depreciation and amortization 51.1 59.7 64.7$        72.2$      79.7$          20.6$     21.0$        22.6$        64.2$       Share‐based compensation 12.8 15.6 16.9$        19.2$      22.1$          7.8$        2.8$           2.9$           13.5$       Expenses  from data security incidents ‐ ‐ ‐ 2.5 0.2 1.5 3.2 5.0Germany restructure 1.1 1.1Litigation settlement and non‐recurring charges ‐ (21.3)         10.2 ‐ ‐ ‐ ‐ ‐ ‐

Adjusted EBITDA 404.8$      502.5$      591.1$      611.8$    611.3$       144.8$   154.4$      160.6$      459.8$     

Adjusted net earnings and adjusted diluted earnings per shareNet Earnings (GAAP) 143.8$      213.7$      233.1$      261.2$    246.0$       54.9$     61.5$        62.5$        178.9$     

Marked‐tomarket adjustment for certain interest rat (2.4)$         ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐Loss on extinguishment of debt ‐ ‐ 37.8 ‐ ‐ ‐ ‐ ‐ ‐Interest expense on redeemed debt ‐ ‐ 5.1 ‐ ‐ ‐ ‐ ‐ ‐Amortization of deferred financing costs ‐ ‐ 0.2 ‐ ‐ ‐ ‐ ‐ ‐Litigation settlement and non‐recurring items, net (1 ‐ (21.3) 10.2 ‐ ‐ ‐ ‐ ‐ ‐Loss from securiy breach incidents ‐ ‐ ‐ ‐ 2.5 0.2 1.5 3.2 5.0Management transition costs ‐ ‐ ‐ ‐ 3.5Germany restructure 1.1 1.1Tax provision for the adjustments  to net earnings 0.9 7.9 (19.2) ‐ (2.3) 0.1 (0.6) (1.6) (2.5)

Adjusted net earnings 142.3$      200.3$      267.2$      261.2$    249.7$       55.2$     62.5$        65.2$        182.4$     Diluted adjusted net earnings  per share (non‐GAAP) 0.77$        1.07$        1.42$        1.48$      1.53$          0.35$     0.39$        0.41$        1.15$       Diluted GAAP net earnings  per share: 0.78$        1.14$        1.24$        1.48$      1.51$          0.35$     0.39$        0.39$        1.13$