Slide 1: POOLCORP: Where Outdoor Living Comes to Life
OLCORP Where Outdoor Living Comes to Life
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements that involve risks and uncertainties that are generally identifiable through the use of words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “project”, “should”, “will”, “may”, and similar expr
Slide 3: POOL Profile
POOL Profile #1 worldwide distributor of $6.2 billion in sales through over Strong Growth History swimming pool-related outdoor 420 Sales Centers in 41 U.S. states, Net Sales (billions) living products 12 countries $6.2 17% CAGR $5.3 Swimming pool, hardscapes & Technology-enabled B2B & $3.9 outdoor
Slide 4: POOLCORP Global Sales Center Network
POOLCORP Global Sales Center Network % of Total Revenue 2022 88% 8% 4% Sales Global Network 86% 8% 6% Centers(1) 2021 North America Pool 314 86% 8% 6% Irrigation & Landscape 2020 Maintenance 89 85% 9% 6% Europe & Other Int’l 24 2019 Total 427 85% 9% 6% (1)As of March 31, 2023 2018 0 50 100 150 200 2
Slide 5: POOL 2022 Estimated Sales Profile
POOL 2022 Estimated Sales Profile New Pool DIY Retail & Maintenance Discretionary Non-Discretionary Construction Service 61% 17% 61% 17% Construction-related & equipment products Contractor & Pool professional building Maintenance mat’ls, equipment & supplies, replacement accessory products & minor
Slide 6: U.S Swimming Pool Market - 2022
U.S Swimming Pool Market - 2022 New Swimming Pools by Type & Estimated Average Cost 2022 Estimated Average $50,000 - $60,000 o Higher value concrete pools most Fiberglass Swimming Pool popular in South & West U.S. markets Cost - $66,500 o Vinyl-lined pools represent over 50% $70,000 - $80,000 of new
Slide 7: POOL North America 'Blue' Product Sales
POOL North America ‘Blue’ Product Sales Chemicals 13% All Other Categories 36% Pool Construction o Broad, highly fragmented & Mat'ls & Tile 9% diverse product assortment o Expanding product categories to additional sales centers as Equipment - Filters, Automatic Cleaners & we grow Accessories 10% o
Slide 8: Value-Added Distribution – The PoolCorp Difference
Value-Added Distribution – The PoolCorp Difference Together with over 125,000 customers, we make pools and outdoor living possible Leading the Industry Through Creating Efficiency with Connected Growing Market Share Through Tech-Enabled Distribution Customer Software Solutions Digital Marketing Prog
Slide 9: PoolCorp Revenue Growth
PoolCorp Revenue Growth o 93% total revenue growth over 3-year period ~17% Acquisitions o Significant contributions from share gains, 25%-30% new products, acquisitions ~9% Market ~7% New pool share, o Highest 3-year new pool construction & Installed construction new 30%-35% base products, installed
Slide 10: Long-Term Gross Margin Enhancement
Long-Term Gross Margin Enhancement 30.0% Centralized Supply chain Private label pricing management products administration Pinch A & product expansion & & market Penny higher procurement Historical product mix pricing margin enhancement approximate customization profile – CSL gross margin contributi
Slide 11: Market Trends – Outdoor Living Investment
Market Trends – Outdoor Living Investment 5,500 250 1,750 250 Installed Base Single Family Home Starts New Pool Units New Pool Units (000s) 5,000 Consumer Confidence Index 200 1,400 200 4,500 150 1,050 150 In thousands In thousands In thousands 4,000 100 700 100 3,500 50 350 50 3,000 2,500 0 0 0 Sou
Slide 12: Upgrade Trends – 2019 vs 2022
Upgrade Trends – 2019 vs 2022 VSP $1,215 Unit Sales Avg Selling vs Category Product SSP $479 Growth Growth Price Chg Heat Pump $3,240 vs Heater $2,480 Single Speed Pump -15% 0% 18% Swimming Pool Pumps Variable Speed Pump 102% 160% 28% Robotic $700 vs Pool Heaters 49% 99% 34% Pressure $430 Heaters Po
Slide 13: Financial Performance
Financial Performance Net Sales (in millions) Gross Profit Margin Operating Margin $6,180 31.3% 16.6% 30.5% 28.9% 29.0% 28.9% 15.7% 28.7% $5,296 11.8% $3,937 10.5% 10.7% 10.2% $3,200 $2,788 $2,998 ‘Consistent sales growth, stable gross margin and operating leverage’ Source: Company Financial Data 13
Slide 14: Financial Performance
Financial Performance Diluted Earnings per Share Adjusted EBITDA1 Free Cash Flow2 (in millions) (in millions) $18.70 $1,079 $441 $15.97 $376 $875 $266 $275 $8.97 $513 $6.40 $382 $5.62 $322 $353 $136 $4.51 $87 1 See Appendix for Reconciliation of Adjusted EBITDA 2 Cash Flow from Operating Activities
Slide 15: Strong Cash Flow Performance & Outlook
Strong Cash Flow Performance & Outlook Cash Flow from Operating Activities (in millions) $900 Capital Expenditures $850+ Operating Cash Flow enhanced by normalizing inventory levels $800 Free Cash Flow o Approx. $400 million additional inventory investment in late $700 2021 & early 2022 o Heightened
Slide 16: Exceptional, Consistent Shareholder Returns
Exceptional, Consistent Shareholder Returns Holding Period POOL Total Shareholder Return* (CAGR as of 3/31/23) $ 1,000,000 invested in POOL shares 20 years ago is 3 years 21.3% worth over 5 years 19.7% $ 34,000,000 in March 2023* 10 years 23.1% Compared to approx. $7,000,000 if invested in the S&P 5
Slide 17: Capital Deployment
Capital Allocation Capital Allocation & Cash Flows from Operating Activities (in millions) Annual Expected Range $1,200 Capital Capital Expenditures Expenditures $50 to $60 million Capital Deployment $1,050 $138 Acquisitions Reinvesting & Growth $900 Dividends $120 Share Repurchases Acquisitions $25
Slide 18: 2023 Expectations & Long-Term Outlook
2023 Expectations & Long-Term Outlook 2023 Guidance Summary Revenue Growth Component Long-Term Outlook o Mid-single digit % revenue decline compared to 2022 Inflation 1% - 2% o Maintenance products – roughly flat Installed base growth 1% - 2% o Renovation & remodel – down 10% to 15% o New pool const
Slide 19: POOL Financial Model
POOL Financial Model Financial Prior 5 Year 2020 - 2022 2023 Longer term Measurement History Results Guidance Outlook Mid-single Revenue Growth 5% - 9% 17% - 35% 6% - 9% digit % decline Gross Profit Margins 28.6% - 29.0% 28.7% - 31.3% ~30% Stable at approx. 30.0% Growth Contribution Mid- to High- 14
Slide 20: POOL and ESG
POOL and ESG Responsible Stewardship o Commitment to diversity & inclusion throughout POOL o ‘Green Pool’ marketing, training & product promotion o Environment & energy-friendly policies implemented o Local community involvement & support o Second Annual Corporate Responsibility Report to be publish
Slide 21: Summary
Summary o Resilient, scalable operating model with continuous growth opportunity o High recurring, non-discretionary sales enables strong operating performance o Sustainable competitive advantages o Favorable long-term industry outlook & market trends o Experienced, disciplined leadership team o Tec
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Slide 23: Appendix
Appendix Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS FYE 12/31/22 FYE 12/31/21 FYE 12/31/20 FYE 12/31/19 FYE 12/31/18 Reported Diluted EPS before adjustments and effects of tax and accounting changes $18.70 $15.97 $8.97 $6.40 $5.62 Less: Per diluted share effect of application of