Hayward Holdings, Inc. · NYSE:HAYW
Hayward — Q4 2023 Earnings Presentation
26 slides from Hayward's earnings presentation, Feb 29, 2024
Slide 1: Fourth Quarter and Full Year 2023 Earnings
FOURTH QUARTER AND FULL YEAR 2023 EARNINGS February 29, 2024 © 2024 Hayward Holdings, Inc.
Slide 2: Fourth Quarter and Full Year 2023 Earnings Call
FOURTH QUARTER AND FULL YEAR 2023 EARNINGS CALL KEVIN HOLLERAN President and Chief Executive Officer EIFION JONES Senior Vice President and Chief Financial Officer KEVIN MACZKA Vice President of Investor Relations NYSE: HAYW © 2024 Hayward Holdings, Inc. 2
Slide 3: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Forward-Looking Statements This presentation includes certain statements that are “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995 that are based on the beliefs of Hayward’s mana
Slide 4: Key Messages
Key Messages Reported Q4 2023 sales and earnings growth in line with expectations Delivered record gross profit margin1; cash flow exceeded guidance Entered 2024 with more normalized channel inventory levels Executed key strategic initiatives; well positioned for profitable growth Introduced full ye
Slide 5: Financial Overview
Financial Overview • Net sales of $278.5M • Gross profit margin of 49.2% Q4 2023 • Adj. EBITDA1 of $75.7M RESULTS REFLECT: • Adj. EBITDA margin1 of 27.2% ▪ Solid execution in a challenging • Adj. diluted EPS1 of $0.20 economic environment ▪ Positive price realization ▪ Normalized distributor invento
Slide 6: Business Update
Business Update END DEMAND OPERATIONAL EXCELLENCE ✓ Resilient aftermarket ✓ Expanding gross margins through disciplined cost control, ✓ Discretionary spending impacted by economic and interest rate productivity improvements environment ✓ Manufacturing footprint consolidation CHANNEL INVENTORY WORKIN
Slide 7: 2023 Highlights
2023 Highlights Executed Key Strategic Initiatives; Well-positioned for Profitable Growth TECHNOLOGY OPERATIONS PARTNERS SUSTAINABILITY FINANCIAL Strengthened Demonstrated Enhanced Dealer Continued Progress on Strong Margin, Cash Technology Leadership Operational Excellence Advocacy of Hayward Our J
Slide 8: New Technology for Early 2024
New Technology for Early 2024 Microchannel Temperature Control Servicer Omni Pro App Universal ColorLogic 2.0 LED Lights ✓ Pool industry’s first Microchannel ✓ Servicer access to all Omni accounts on contract ✓ Directional optics to maximize illumination Temperature Exchanger ✓ Remote configuration
Slide 9: Fourth Quarter 2023 Financials
Fourth Quarter 2023 Financials NET SALES +8% YoY NET SALES OF $278.5M ▪ Net price +2% ▪ Volume +6% GROSS PROFIT MARGIN OF 49.2%; INCREASED 690 BPS YoY GROSS PROFIT OF $137.1M ▪ Strong execution, volume leverage ▪ Positive price realization ADJ. EBITDA1 MARGIN OF 27.2%; INCREASED 660 BPS YoY ADJ. EBI
Slide 10: Full Year 2023 Financials
Full Year 2023 Financials NET SALES (24%) YoY ▪ Net price +3% NET SALES OF $992.5M ▪ Volume -28% (lower demand, channel inventory destocking) ▪ Acquisitions +1% GROSS PROFIT MARGIN OF 48.1%; INCREASED 270 BPS YoY GROSS PROFIT OF $477.0M ▪ Strong execution, rightsized production levels, disciplined c
Slide 11: Fourth Quarter 2023 Segment Overview
Fourth Quarter 2023 Segment Overview NORTH AMERICA EUROPE & REST OF WORLD NET SALES GROSS PROFIT ADJ. SEGMENT INCOME1 NET SALES GROSS PROFIT ADJ. SEGMENT INCOME1 $238.2M $121.7M $75.4M $40.3M $15.4M $8.1M YoY Change: +9.8% Gross Profit Margin: Adj. Segment YoY Change: (4.4%) Gross Profit Margin: Adj
Slide 12: Full Year 2023 Segment Overview
Full Year 2023 Segment Overview NORTH AMERICA EUROPE & REST OF WORLD NET SALES GROSS PROFIT ADJ. SEGMENT INCOME1 NET SALES GROSS PROFIT ADJ. SEGMENT INCOME1 $823.3M $410.6M $237.7M $169.2M $66.3M $34.5M YoY Change: (25.8%) Gross Profit Margin: Adj. Segment YoY Change: (17.6%) Gross Profit Margin: Ad
Slide 13: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights BALANCE SHEET ($M) CASH FLOW ($M) 12/31/2023 FY 2023 FY 2022 Cash and cash equivalents $178 Cash flow from operating activities $185 $116 Short-term investments $25 $600M fixed rate, Less capex ($31) ($30) remainder variable Total debt principal $1,112 Blended
Slide 14: Capital Allocation Priorities
Capital Allocation Priorities GROWTH INVESTMENTS 1 • Innovative new product development, IoT digital leadership • Commercial programs, dealer conversions • Operational excellence, productivity, growth capex Funding strategic 2 DE-LEVERING • Debt repayment growth investments and shareholder returns w
Slide 15: FY 2024 Financial Outlook
FY 2024 Financial Outlook Net sales of $1.010B to $1.060B, OUTLOOK REFLECTS: Adjusted EBITDA1 of up ~2% to 7% $255M to $275M ▪ Uncertain macro conditions Seasonality expectations ▪ Resilient aftermarket Free cash flow1 of ~$160M, • Normal seasonal strength in Q2 / Q4 >100% of net income ▪ New constr
Slide 16: Key Messages
Key Messages Reported Q4 2023 sales and earnings growth in line with expectations Delivered record gross profit margin1; cash flow exceeded guidance Entered 2024 with more normalized channel inventory levels Executed key strategic initiatives; well positioned for profitable growth Introduced full ye
Slide 17: Company Overview
COMPANY OVERVIEW © 2024 Hayward Holdings, Inc. 17
Slide 18: Hayward at a Glance
COMPANY OVERVIEW Hayward at a Glance ✓ Global leader in pool and outdoor living technology with the industry’s most recognized and trusted brand ~$1B $247M 2023 ✓ Strong, recurring aftermarket sales driven by one of the largest installed bases in the world 2023 Adj. EBITDA1 Net Sales (25% margin) ✓
Slide 19: Why Invest in Hayward?
COMPANY OVERVIEW Why Invest in Hayward? • Secular tailwinds (sunbelt migration, healthy outdoor living) Attractive • Large installed base that grows every year Industry • Disciplined industry, demonstrated pricing power • Aftermarket sales mix of ~80% and increasing Recurring • Majority non-discreti
Slide 20: Attractive Long-Term Growth Dynamics
COMPANY OVERVIEW Attractive Long-Term Growth Dynamics Secular Tailwinds Industry Drivers Competitive Advantages ✓ Healthy outdoor living ✓ Growing, aging installed base ✓ Strong brand and installed base ✓ Sunbelt migration ✓ Predictable, non-discretionary ✓ Technology leadership aftermarket spending
Slide 21: Appendix: Non-GAAP Reconciliations
APPENDIX APPENDIX Non-GAAP Reconciliations Non-GAAP Reconciliations © 2024 Hayward Holdings, Inc. 21
Slide 22: Adjusted EBITDA & Adjusted EBITDA Margin Reconciliation
Adjusted EBITDA & Adjusted EBITDA Margin Reconciliation APPENDIX © 2024 Hayward Holdings, Inc. 22
Slide 23: Adjusted Net Income and Adjusted EPS Reconciliation
Adjusted Net Income and Adjusted EPS Reconciliation APPENDIX © 2024 Hayward Holdings, Inc. 23
Slide 24: Adjusted Segment Income Reconciliation
Adjusted Segment Income Reconciliation APPENDIX © 2024 Hayward Holdings, Inc. 24
Slide 25: Adjusted Segment Income Reconciliation
Adjusted Segment Income Reconciliation APPENDIX © 2024 Hayward Holdings, Inc. 25
Slide 26: Thank You
THANK YOU © 2024 Hayward Holdings, Inc. 26