Helios Technologies, Inc. · NYSE:HLIO
Helios Technologies — Baird 2019 Global Industrials Conference
32 slides from Helios Technologies's conference presentation, Nov 6, 2019
Slide 1: Baird Global Industrials Conference
Baird Global Industrials Conference November 6, 2019 Wolfgang H. Dangel Tricia L. Fulton Chief Executive Officer Chief Financial Officer Nasdaq: HLIO www.heliostechnologies.com © 2019 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 © 2019 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%) 2019E Revenue(1) $439 - 442MM $111 - 113MM 2019E Adjusted EBITDA Margin(1)(2) 22.4% - 22.8% Margin Brands Niche Technologies Sun designs and manufactures screw-in hydraulic cartridge valves, manifolds, and integrated flu
Slide 9: Degree of Sophistication
Strategic Execution Evolving from best-in-class component supplier to an intelligent control systems provider TRADITIONAL COMPONENTS SMART COMPONENTS INTELLIGENT CONTROL SYSTEMS Degree of Sophistication Path of Migration www.heliostechnologies.com © 2019 Helios Technologies 9
Slide 10: Diversified End Markets
Diversified End Markets INDUSTRIAL AGRICULTURE Renewable Energy Factory Automation Combines Tractors $577M 2018 PF* Packaging & Power Generation Seeders Balers Processing MOBILE RECREATIONAL Recreational Material Handling Construction Sun Hydraulics Marine Motorcycles Faster Enovation Controls * Rep
Slide 11: A Larger & More Diversified Technology Platform
A Larger & More Diversified Technology Platform 2018 PF Revenue $577 MM (1) 2016 Revenue $197 MM(2) Enhanced Product Offering Broader Geographic Reach Greater Access to OEMs Electronics APAC 22% Americas Distributors 2018 PF(1) 25% 47% OEMs 49% Hydraulics 51% 78% EMEA 28% Electronics 4% OEMs APAC 20
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 Hydraulics 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 (2018*) Casting Casting solutions Solutions 23% Increasing Level of Sophistication MultiFaster 22% MultiFaster Couplings Couplings 51% Ancillary Accessories & Products 4% ancillary
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 © 2019 Helios Technologies 16
Slide 17: Achieving Our Vision 2025
formerly known as Sun Hydraulics Achieving Our Vision 2025 www.heliostechnologies.com © 2019 Helios Technologies 17
Slide 18: Current Vision 2025: Pathway to Superior Growth
Current Vision 2025: Pathway to Superior Growth $1,000 REVENUE AND ADJUSTED OPERATING MARGIN (IN MILLIONS) Assumption: Includes One Mild Recession $70 Hydraulics Electronics Future Acquisitions $200 7% +500 CAGR BPS 21% $730 ADJUSTED OPERATING MARGIN(2) 7% $577 CAGR $126 13% CAGR 16% $451 ADJUSTED O
Slide 19: Reaching Vision 2025 Revenue Goals
Reaching Vision 2025 Revenue Goals Hydraulics Segment Electronics Segment 1 2 3 1 2 3 1.5% 7% 2.5% 7% 2% 1.5% 3.5% 3% Existing Market New Products Increased 2018 – 2025 Existing Market New Products Increased 2018 – 2025 Growth Market Share Target CAGR Growth Market Share Target CAGR 1) Existing Mark
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(1) $577 $508 $126 $126 $343 $227 $112 $204 $205 $205 $200 $197 $178 $151 $3 $97 $4 $3 $3 $7 $201 $202 $224 $197 $190 $231 $382 $451 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 PF 2018 Hydraulics Electronics Adjusted Operati
Slide 22: Capital Allocation Focused on Growth
Capital Allocation Focused on Growth Capital Structure(1) Capital Allocation Priorities $MM 1) Organic Growth • Double organically (existing businesses) $400 • New product development $14 Total RCF $189 • Integrate electronics and hydraulics know-how $175 • Support product platform Undrawn 2) Debt R
Slide 23: 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 24: Defined Vision, Designed Transformation
Defined Vision Designed Transformation www.heliostechnologies.com © 2019 Helios Technologies 24
Slide 25: Supplemental Information
formerly known as Sun Hydraulics Supplemental Information www.heliostechnologies.com © 2019 Helios Technologies 25
Slide 26: 2019 Guidance
2019 Guidance* Previous 2019 Updated 2019 Guidance Guidance Change Consolidated revenue $565 - $575 million $ 5 5 0 - $ 5 5 5 million ~(3)% Hydraulics segment revenue $453 - $458 million $ 4 3 9 - $ 4 4 2 million ~(3)% Electronics segment revenue $112 - $117 million $ 1 1 1 - $ 1 1 3 million ~(2)% G
Slide 27: Segment Data
Segment Data ($ in thousands) T hree Months E nded N i ne Months E nded Septem ber 28, Septem ber 29, Septem ber 28, Septem ber 29, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Sales: Hydraulics $ 110,089 $ 104,055 $ 340,262 $ 270,297 Electronics 27,956 31,782 88,476 99,025 Co
Slide 28: Sales by Geographic Region & Segment
Sales by Geographic Region & Segment (Unaudited) 2019 Sales by Geographic Region and Segment 2018 Sales by Geographic Region and Segment ($ in millions) ($ in millions) % % % % % % % % % Q1 of Total Q2 of Total Q3 of Total 2019 of Total Q1 of Total Q2 of Total Q3 of Total Q4 of Total 2018 of Total A
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, 2008 2010 2011 2011 2012 2013 2014 2016 2016 2017 2018 PF 2018 GAAP operating incom e $ 36,337 $ 2,143 $ 31,039 $ 55,269 $ 54,409 $ 56
Slide 30: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (Unaudited) ($ in thousands) T hree Months Ended N i ne Months Ended Septem ber 28, Septem ber 29, Septem ber 28, Septem ber 29, 2019 2018 2019 2018 N et i ncom e $ 12,791 $ 11,599 $ 46,460 $ 30,306 Interest expense, net 3,790 4,622 12,223 9,256 Income tax provision 2,
Slide 31: Non-GAAP Cash Net Income Reconciliation
Non-GAAP Cash Net Income Reconciliation (Unaudited) Three Months Ended N i ne Months Ended ($ in thousands) Septem ber 28, Septem ber 29, Septem ber 28, Septem ber 29, 2019 2018 2019 2018 N et i ncom e $ 12,791 $ 11,599 $ 46,460 $ 30,306 Acquisition-related amortization of inventory step-up - 2,092
Slide 32: Baird Global Industrials Conference
Baird Global Industrials Conference November 6, 2019 Nasdaq: HLIO www.heliostechnologies.com © 2019 Helios Technologies 32
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