Steiner Leisure Ltd. ( NasdaqGS : STNR)

1. Steiner Leisure Ltd. (NasdaqGS: STNR) April 17, 2014 Guanrong (Rachel) Fu Marnie GeorgesJing Feng (Jeffrey) Li

2. Agenda • Introduction • Company overview • Macroeconomic outlook and industry overview • Relevant stock market prospects • Financial analysis and projections • Valuation • Recommendation

3. Company Overview • Founded in 1934 • Worldwide provider and innovator in the fields of beauty, wellness, and education • Employees: 7,318 • Market Cap: $632 MM • Industry Classification: Specialized Consumer Services • Closing Price: $44.11 Revenue by Segment Sources: Company 10-K filings, Capital IQ, Yahoo! Finance.

4. Business Overview: Spa Services • Business Overview: • Relaxing therapeutic spas featuring quality beauty and body treatments • Practices through cruise-based and land-based hotel and standalone spas • Cruise Ship Spa Performance: • Provide services including almost all major cruise lines in North America • By 2014, serve 156 cruise ships representing 18 cruise lines • Exclusive rights to offer services and sell products Sources: Company 10-K filings, Capital IQ, Yahoo! Finance.

5. Business Overview: Spa Services • Land-based Spas: • Hotel-based Spas: • Offer services at 56 urban hotels in 16 countries • Sizes from 625 ft.2 to 32,000 ft.2 • Exclusive rights with Starwood • Day Spa: • Operates 5 day spas worldwide • Similar services to hotel spas • Licensed Spas • Licensed one brand to Thailand-based hotel operator Sources: Company 10-K filings, Capital IQ, Yahoo! Finance.

6. Risk Overview: Spa Services Sources: Company 10-K filings, Capital IQ, Yahoo! Finance.

7. Business Overview: Laser Hair Removal • Business Overview: • Acquired Ideal Image Development Inc. in 2011 • Provides non-invasive procedures for the removal of unwanted facial and body hair • Current Performance: • 58 new locations as of 2014 • Operates 109 laser hair removal centers in 31 states and one center in Canada • Franchises brand to 17 additional centers • Potential Risks • Capital costs for new centers • May not find ideal locations for new centers • Need specific medical personnel in high demand Sources: Company 10-K filings, Capital IQ, Yahoo! Finance.

8. Business Overview: Production • Provides high-quality personal care products through cruise ship spas, land-based spas, Ideal Image centers, department stores, and e-commerce • Generates 30% of STNR revenues • Highly competitive market reliant on brand image • Ingredients sourced from elite European manufacturers with high bargaining power Key Brands Bliss Elemis Jou La Thérapie Remède Steiner Sources: Company 10-K filings, Capital IQ, Yahoo! Finance.

9. Business Overview: Education • Full-time and part-time programs in massage therapy , beauty and skin care • Accredited by several industry boards • Began in 1999 with expansion through acquisitions • 4,663 students • Potential Risks: • Title IV Compliance issues • Most students receive financial aid • Accreditation and licensing requirements changing Sources: Company 10-K filings, Capital IQ, Yahoo! Finance.

10. Market Power Analysis Steiner’s recent acquisition and industry trends provide new opportunities moving forward. Sources: Company 10-K filings, Capital IQ, Yahoo! Finance.

11. Spa Industry Drivers • Increased affluence • More baby boomers (39.0% of spa users) demanding anti-aging services • Mature industry offering additional services and products • Consumer tastes and preferences Sources: 1. “Health and Wellness Spas” Report. IBISWorld. March 2013. 2. Bureau of Labor Statistics’ Consumer Expenditure Survey. 3. “Cosmetology and Beauty Schools.” IBISWorld. May 2012

12. Steiner Segment Industries Cruise Ships Beauty Product Sales Industry revenue CAGR of 7.5% to $7.2 billion by 2018 Marketing drives sales High R&D expenditures Low revenue volatility due to increasing global demand and aging consumers • 34.4% of all cruise destinations are in the Caribbean • Safety concerns remain prominent Sources: 1. “Ocean Transportation.” IBISWorld. 2. “Cosmetic Manufacturing.” IBISWorld.

13. Steiner Segment Industries Hair Removal Services Health and Beauty Schools 4.0% CAGR through 2017 Accredited schools qualify for Title IV funding Licensing requirements ensure attractive career Growth from spas, medi-spas, and salons supporting increased enrollment • Growth among males and females • Diversification of services and technology Sources: 1. “Cosmetology and Beauty Schools.” IBISWorld. 2. “Hair Removal Services.” IBISWorld.

14. Industry Attractiveness STNR operates in a competitive industry with high threats of substitutes and large opportunities for growth. HIGH MEDIUM LOW HIGH HIGH Sources: 1. IBISWorld Industry Reports. 2. Global Spa and Wellness Summit.

15. Historical Prices Though the stock price has increased for the past few years, recent concerns have surfaced in a lower stock price.

16. Financial Analysis

17. Comparable Company Analysis

18. Discount Rate Calculations and Forecasting

19. DCF Analysis

20. Current Valuation Current Stock Price: $44.11 Our Valuation: $42.05

21. Recommendation WATCH LIST Future Outlook and Concerns • Stabilized growth in these segments: education, spas, and laser hair removal • New and continuing contracts with major hotel and cruise operators • Increase cost efficiencies in the products segment