Hayward Holdings, Inc. · NYSE:HAYW
Hayward — Q2 2024 Earnings Presentation
23 slides from Hayward's earnings presentation, Jul 30, 2024
Slide 1: Second Quarter 2024 Earnings
SECOND QUARTER 2024 EARNINGS July 30, 2024 © 2024 Hayward Holdings, Inc.
Slide 2: Second Quarter 2024 Earnings Call
SECOND QUARTER 2024 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 and FP&A 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 Q2 2024 results in line with expectations Delivered record gross profit margin1 Generated strong cash flow; reduced net leverage2 from 4.0x to 2.8x3 sequentially Completed the strategic acquisition of ChlorKing®, a leader in commercial pool water treatment Narrowed full year 20
Slide 5: Financial Overview
Financial Overview RESULTS REFLECT: • Net sales of $284.4M ▪ Solid execution • Gross profit margin of 51.0% ▪ Positive net price realization offset by Q2 2024 • Adj. EBITDA1 of $82.6M modest volume reduction • Adj. EBITDA margin1 of 29.0% ▪ Strong gross profit margin expansion to • Adj. diluted EPS1
Slide 6: Business Update
Business Update END DEMAND GROWTH INVESTMENTS ✓ In-season demand generally consistent with expectations ✓ Launched “Hayward Hub”, a first of its kind for Hayward, to ✓ NAM and Europe outperforming Rest of World support the important Dallas-Ft. Worth market ✓ Resilient aftermarket maintenance; new co
Slide 7: Acquisition of ChlorKing
Acquisition of ChlorKing® Strategic acquisition advances Hayward’s position in Commercial Pool Acquisition Highlights ▪ Leader in commercial salt chlorination and UV ▪ Broadens Hayward’s product offering and TAM water disinfection systems ▪ Underscores commitment to sustainable, ▪ Serves commercial
Slide 8: Second Quarter 2024 Financials
Second Quarter 2024 Financials NET SALES +0.3% YoY NET SALES OF $284.4M ▪ Net price +2.1% ▪ Volume -1.7% GROSS PROFIT MARGIN OF 51.0%, A QUARTERLY RECORD2 ▪ Increased 290 bps YoY and 180 bps sequentially GROSS PROFIT OF $145.1M ▪ Strong execution, increased operational efficiencies ▪ Positive price
Slide 9: Second Quarter 2024 Segment Overview
Second Quarter 2024 Segment Overview NORTH AMERICA EUROPE & REST OF WORLD NET SALES GROSS PROFIT ADJ. SEGMENT INCOME1 NET SALES GROSS PROFIT ADJ. SEGMENT INCOME1 $241.1M $127.4M $81.3M $43.3M $17.7M $8.6M YoY Change: Gross Profit Margin: Adj. Segment YoY Change: Gross Profit Margin: Adj. Segment +1.
Slide 10: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights BALANCE SHEET ($M) CASH FLOW ($M) 6/29/2024 YTD YTD 2024 2023 Cash and cash equivalents $215 $600M fixed rate, remainder variable Cash flow from operating activities $210 $167 Total debt principal $985 Blended interest Less capex ($11) ($16) rate of 6.5%6 Term
Slide 11: 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 12: FY 2024 Financial Outlook
FY 2024 Financial Outlook OUTLOOK REFLECTS: Adjusted EBITDA1 of Net sales of $1.010B to $1.040B, ▪ Uncertain macro conditions $255M to $270M up ~2% to 5% ▪ Resilient aftermarket maintenance Free cash flow1 of ~$160M, Normalized seasonal trends ▪ New construction, remodel, upgrade >100% of net income
Slide 13: Key Messages
Key Messages Reported Q2 2024 results in line with expectations Delivered record gross profit margin1 Generated strong cash flow; reduced net leverage2 from 4.0x to 2.8x3 sequentially Completed the strategic acquisition of ChlorKing®, a leader in commercial pool water treatment Narrowed full year 20
Slide 14: Company Overview
COMPANY OVERVIEW © 2024 Hayward Holdings, Inc. 14
Slide 15: 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 16: 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 • Aftermarket1 sales mix of ~80% Recurring • Majority non-discretionary purchase
Slide 17: 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 18: Appendix: Non-GAAP Reconciliations
APPENDIX APPENDIX Non-GAAP Reconciliations Non-GAAP Reconciliations © 2024 Hayward Holdings, Inc. 18
Slide 19: Adjusted EBITDA & Adjusted EBITDA Margin Reconciliation, Three Months
Adjusted EBITDA & Adjusted EBITDA Margin Three Months Ended Reconciliation APPENDIX © 2024 Hayward Holdings, Inc. 19
Slide 20: Adjusted EBITDA & Adjusted EBITDA Margin Reconciliation, Last Twelve Months
Adjusted EBITDA & Adjusted EBITDA Margin Last Twelve Months Reconciliation APPENDIX © 2024 Hayward Holdings, Inc. 20
Slide 21: Adjusted Net Income & Adjusted EPS Reconciliation
Adjusted Net Income & Adjusted EPS Reconciliation APPENDIX © 2024 Hayward Holdings, Inc. 21
Slide 22: Adjusted Segment Income Reconciliation
Adjusted Segment Income Reconciliation APPENDIX © 2024 Hayward Holdings, Inc. 22
Slide 23: Thank You
THANK YOU © 2024 Hayward Holdings, Inc. 23