Slide 1: Investor Presentation May 2020
Investor Presentation May 2020 Tricia L. Fulton Interim President & CEO Chief Financial Officer Nasdaq: HLIO www.heliostechnologies.com © 2020 Helios Technologies 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation and oral statements made by management in connection herewith that are not historical facts are “forward‐looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Forward‐looking statements involve risks and uncertainties, a
Slide 3: Growing Global Industrial Technology Leader
Growing Global Industrial Technology Leader Hydraulics Electronics Leading designer and manufacturer of high-performance Global provider of innovative electronic control, screw-in hydraulic cartridge valves, electro-hydraulics, display and instrumentation solutions for recreational manifolds, integr
Slide 4: Megatrends Impacting Our Global Markets
Megatrends Impacting Our Global Markets Sophistication of Safe Globalization Computing Power Machinery & Equipment Global Needs Will Drive These Trends Population Urbanization & Productivity & Electrification & Automation Energy Saving Growth Environment Efficiencies Digitalization COMPREHEND THE TH
Slide 5: Vision 2025
Vision 2025 ACHIEVE GLOBAL technology leadership IN THE INDUSTRIAL GOODS SECTOR by 2025 WITH CRITICAL MASS EXCEEDING $1B in sales WHILE MAINTAINING superior profitability & financial strength. DESIGNER AND MANUFACTURER OF INTELLIGENT SYSTEMS & CONTROLS www.heliostechnologies.com © 2020 Helios Techno
Slide 6: Strategic Roadmap Business Goals: $1B
Strategic Roadmap Business Goals: $1B REVENUE │ >20% ADJUSTED OPERATING MARGIN │ $70 >24% ADJUSTED EBITDA MARGIN Strategies: Leadership Differentiation Customer Centricity Ease of Doing Business Innovation & Product Human Capital Differentiation Unique & Deeply Tactics: Development Rooted Values Sim
Slide 7: Key Milestones
Key Milestones 1970 2015 2016 2018 2019 Sun Hydraulics Established Enovation Changed Name Changed Ticker founded by Vision 2025 Controls to Helios to HLIO Robert Koski Strategy Acquisition Technologies 1997 2016 2018 2018 Faster Custom Sun Hydraulics Wolfgang Fluidpower Acquisition IPO (SNHY) Dangel
Slide 8: Smart Solutions For Demanding Applications
Smart Solutions For Demanding Applications Hydraulics (~80%) Electronics (~20%) 2019 Revenue $443MM $112MM 2019 Adjusted EBITDA Margin(1) 23.6% Margin Brands Niche Technologies Sun designs and manufactures screw-in hydraulic cartridge valves, manifolds, and integrated fluid power Designs and manufac
Slide 9: Strategic Execution: Degree of Sophistication
Strategic Execution Maintaining a best-in-class component position as well as evolving into a recognized intelligent control systems provider TRADITIONAL COMPONENTS SMART COMPONENTS INTELLIGENT CONTROL SYSTEMS Degree of Sophistication Path of Migration www.heliostechnologies.com © 2020 Helios Techno
Slide 10: End Markets: Industrial, Agriculture, Mobile, Recreational
INDUSTRIAL AGRICULTURE Renewable Energy Factory Automation Combines Tractors $555M 2019 Revenue Packaging & Power Generation Seeders Balers Processing MOBILE RECREATIONAL Recreational Material Handling Construction Sun Hydraulics Marine Motorcycles Faster Enovation Controls Forestry Equipment Specia
Slide 11: A Larger & More Diversified Technology Platform
A Larger & More Diversified Technology Platform 2019 Revenue $555 MM 2016 Revenue $197 MM(1) Enhanced Product Offering Broader Geographic Reach Greater Access to OEMs Electronics APAC 20% Americas Distributors 26% 2019 47% OEMs 55% Hydraulics 45% 80% EMEA 27% Electronics 4% OEMs APAC 20% Americas 22
Slide 12: Hydraulics Industry
Hydraulics Hydraulics Industry $25 B Total Hydraulics Market $8 B Total Hydraulic Valves Market $4 B Total Couplings Market $2 B $2 B Total Compact Total Quick Release Hydraulics Couplings Addressable Market Addressable Market Addressable Markets – Hydraulics Material Handling Specialized Vehicles F
Slide 13: Evolving Hydraulics Product Offering to Address Market Demands
Hydraulics Evolving Hydraulics Product Offering to Address Hydraulics Market Demands Broad Hydraulics Product Offering Hydraulics Market Drivers Increased productivity and performance Improved safety and reliability Shift to electrohydraulic actuation & tuning Cartridges Electro-Hydraulics Cou
Slide 14: Increasing Level of Sophistication
Hydraulics Most Complete Product Range in Agriculture and Construction Gross sales Agriculture Construction Industrial (2019) Casting Casting solutions Solutions 23% Increasing Level of Sophistication MultiFaster 22% MultiFaster Couplings Couplings 51% Ancillary Accessories & Products 4% ancillary p
Slide 15: Electronic Controls Industry
Electronics Electronic Controls Industry Addressable Markets – Electronics $3.5 B Total Power Controls and Vehicle Technologies Market Agriculture Construction Specialized Vehicles $1.6 B Relevant Power Controls and Vehicle Technologies Market Forestry Material Handling Off-Road Vehicles $900 M Powe
Slide 16: Dynamic & Diverse Product Portfolio
Electronics Dynamic & Diverse Product Portfolio Leverage platform product development, shortening time to market DISPLAYS AND ACCESSORIES CONTROLLERS AND PANELS www.heliostechnologies.com © 2020 Helios Technologies 16
Slide 17: Achieving Our Vision 2025
formerly known as Sun Hydraulics Achieving Our Vision 2025 www.heliostechnologies.com © 2020 Helios Technologies 17
Slide 18: Current Vision 2025: Pathway to Superior Growth
Current Vision 2025: Pathway to Superior Growth REVENUE AND ADJUSTED OPERATING MARGIN (IN MILLIONS) Assumption: Includes COVID -19 pandemic impact in 2020 Hydraulics Electronics Future Acquisitions Vision 2025 Metric Floors: $1B REVENUE / >20% ADJUSTED OPERATING MARGIN / >24% ADJUSTED EBITDA MARGIN
Slide 19: Reaching Vision 2025 Revenue Goals
Reaching Vision 2025 Revenue Goals Hydraulics Segment Electronics Segment 1 2 3 1 2 3 4% 12% 3% 8% 4% 2% 4% 3% Existing Market New Products Increased 2019 – 2025 Existing Market New Products Increased 2019 – 2025 Growth Market Share Target CAGR Growth Market Share Target CAGR 1) Existing Market Grow
Slide 20: Differentiated & Disciplined Acquisition Strategy
Differentiated & Disciplined Acquisition Strategy Goals Targets Integration Model • Niche Technology leader (top 3) • Strong management • Successful on standalone basis • Broaden technology offerings and capabilities • Culture supporting innovation • Retain employees • Increase solutions-based offer
Slide 21: Driving Sustained Value Thru Profitable Growth
Driving Sustained Value Thru Profitable Growth Revenue by Segment $555 $508 $112 $126 $343 $227 $112 $204 $205 $205 $200 $197 $178 $151 $3 $97 $4 $3 $3 $7 $201 $202 $224 $197 $190 $231 $382 $443 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Hydraulics Electronics Adjusted Operating Inc
Slide 22: Capital Allocation Focused on Growth
Capital Allocation Focused on Growth Capital Structure(1) Capital Allocation Priorities $MM 1) Organic Growth • Organically grow at 2x market $400 • New product development $27 $222 Total RCF • Integrate electronics and hydraulics know-how $195 • Support product platform Undrawn 2) Debt Reduction $2
Slide 23: 2020 Helios Outlook
2020 Helios Outlook(1) • Withdrew 2020 guidance due to the impact of COVID-19 pandemic • Cost containment actions already taken Temporary 20% salary reduction for officers Permanent layoffs and temporary salary reductions at Enovation Controls A hiring freeze Reduction in the use of continge
Slide 24: Commitment to Shareholder Value Creation
Commitment to Shareholder Value Creation 1 NICHE TECHNOLOGY - A global niche technology leader in Hydraulics and Electronics with highly engineered and comprehensive in-house value add capabilities 2 SUPERIOR FINANCIAL PERFORMANCE - Proven track record of growing 2x faster than market at superior pr
Slide 25: Defined Vision, Designed Transformation
Defined Vision Designed Transformation www.heliostechnologies.com © 2020 Helios Technologies 25
Slide 26: Supplemental Information
formerly known as Sun Hydraulics Supplemental Information www.heliostechnologies.com © 2020 Helios Technologies 26
Slide 27: Segment Data
Segment Data ($ in thousands) ThreeMonths Three Months Ended Ended F or the Y ea r Ended Decem Ma rchber 28, 28, Decem Ma rchber 30,29, Decem ber 28, Decem ber 29, 2019 2020 2018 2019 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Sales: Sales: Hydraulics Hydraulics $ 102,550 103,818 $
Slide 28: Sales by Geographic Region & Segment
Sales by Geographic Region & Segment (Unaudited) 2 0 2 0 Sales by Geographic Region and Segment 2 0 1 9 Sales by Geographic Region and Segment ($ in millions) ($ in millions) % % % % % % Q1 of Total Q1 of Total Q2 of Total Q3 of Total Q4 of Total 2019 of Total Americas: Americas: Hydraulics $ 37.3 H
Slide 29: Adjusted Operating Income Reconciliation
Adjusted Operating Income Reconciliation (Unaudited) ($ in thousands) Year ended Dec 27, Jan 2, Jan 1, Dec 31, Dec 29, Dec 28, Dec 27, Jan 2, Dec 31, Dec 30, Dec 29, Dec 28, 2008 2010 2011 2011 2012 2013 2014 2016 2016 2017 2018 2019 GAAP operating incom e $ 36,337 $ 2,143 $ 31,039 $ 55,269 $ 54,409
Slide 30: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (Unaudited) Three Months Ended F or the Y ea r Ended ($ in thousands) Ma rch 28, Ma rch 30, Decem ber 28, Decem ber 29, 2020 2019 2019 2018 N et i ncom e $ ( 17,223) $ 16,404 $ 60,268 $ 46,730 Interest expense, net 2,951 4,385 15,387 13,876 Income tax provision 4,208 4
Slide 31: Non-GAAP Cash Net Income Reconciliation
Non-GAAP Cash Net Income Reconciliation (Unaudited) Three Months Ended F or the Y ea r Ended ($ in thousands) Ma rch 28, Ma rch 30, Decem ber 28, Decem ber 29, 2020 2019 2019 2018 N et i ncom e $ ( 17,223) $ 16,404 $ 60,268 $ 46,730 Acquisition-related amortization of inventory step-up - - - 4,441 A
Slide 32: Investor Presentation
Investor Presentation May 2020 Nasdaq: HLIO www.heliostechnologies.com © 2020 Helios Technologies 32