Helios Technologies, Inc. · NYSE:HLIO

Helios Technologies — Investor Presentation (March 2021)

29 slides from Helios Technologies's investor presentation, Mar 23, 2021

  1. Slide 1: Investor Presentation March 23, 2021

    Investor Presentation March 23, 2021 Josef Matosevic Tricia Fulton Tania Almond President & CEO Chief Financial Officer VP, IR and Corp. Comm. Nasdaq: HLIO www.heliostechnologies.com © 2021 Helios Technologies 1

  2. 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

  3. Slide 3: Growing, Global Industrial Technology Leader

    Growing, Global Industrial Technology Leader Founded: 1970 Helios Technologies (NASDAQ: HLIO) IPO: 1997 TTM Revenue: $523M Adj. EBITDA Margin: 23.2% Market Cap: ~$2.4B Cash Dividend Yield: 0.5% Cash Dividend Paid for 98 Consecutive Quarters 2020 Revenue by Segment $523 million Helios Technologies is

  4. Slide 4: Executing to Plan exceeding $1 Billion in sales

    Executing to Plan Achieve global technology leadership in the industrial goods sector by 2025 with critical mass exceeding $1 BILLION in sales while maintaining superior profitability and financial strength. www.heliostechnologies.com © 2021 Helios Technologies 4

  5. Slide 5: Three Megatrends Impacting Our Markets

    Three Megatrends Impacting Our Markets Sophistication of Safe Globalization Machinery & Equipment Computing Power GLOBAL NEEDS WILL DRIVE THESE TRENDS Population Urbanization & Productivity & Electrification & Automation Energy Saving Growth Environment Efficiencies Digitalization LEVERAGE GLOBAL EX

  6. Slide 6: Strategic Roadmap

    Strategic Roadmap Business Goals: $1BREVENUE │ >20% ADJUSTED OPERATING MARGIN FLOOR │ $70 >24% ADJUSTED EBITDA MARGIN FLOOR 2x SALES GROWTH RATE EXCEEDING MARKET 6% CAPEX AS % OF SALES 6% ENGINEERING LABOR AS % OF SALES Leadership Strategies: Differentiation Customer Centricity Operational Efficienc

  7. Slide 7: Strategy for Growth

    Strategy for Growth FY 2020 Revenue by Geography Appointed New CEO Brings deep commercial, Established Vision Acquired Faster Acquired Custom Fluidpower APAC operational and M&A 30% Americas 2025 Strategy $531m purchase price $26m purchase price experience 43% EMEA 27% 2015 2016 2018 2019 2020 2021

  8. Slide 8: Diversified End Markets

    Diversified End Markets 2020 Health & Revenue Mobile Industrial Agriculture Recreational Wellness 37% of 29% of 20% of 9% of 5% of $523 Total Total Total Total Total Million Electronics Electronics Electronics Electronics Electronics Hydraulics Hydraulics Hydraulics Hydraulics Hydraulics www.heliost

  9. Slide 9: Leadership in Niche Markets: Hydraulics

    Leadership in Niche Markets: Hydraulics Leading market position in global Leading market position in global Focused on expanding cartridge valve market quick release couplings market addressable market FY 2020 Complex, dense Integrated packages Revenue $407 million Gross Profit $150 million Gross Ma

  10. Slide 10: Leadership in Niche Markets: Electronics

    Leadership in Niche Markets: Electronics Leading market position in Growing market share in Increasing recreational vehicle market construction market addressable market Full-Color Displays GPS FY 2020 Receiver Machine Controllers Revenue $116 million Keypad Auxiliary Full-Color Gross Profit $48 mil

  11. Slide 11: Strategic Vision

    Strategic Vision www.heliostechnologies.com © 2021 Helios Technologies 11

  12. Slide 12: Pathway to Superior Profitability

    Pathway to Superior Profitability Organic Expansion $1 BILLION REVENUE Targeted Acquisitions >20% ADJ. OPERATING MARGIN Operational Excellence >24% ADJ. EBITDA Superior Liquidity MARGIN www.heliostechnologies.com © 2021 Helios Technologies 12

  13. Slide 13: Pathway to Superior Growth

    Pathway to Superior Growth REVENUE AND ADJUSTED OPERATING MARGIN (IN MILLIONS) Assumption: Includes COVID -19 pandemic impact in 2020 Hydraulics Electronics Future Acquisitions Total $1,000 ~$80 14% CAGR ~$220 19% ADJUSTED OPERATING MARGIN(1) ~$700 $523 $116 21% CAGR $407 $201 $117 2015 2020 2025 Ta

  14. Slide 14: Balboa Water: Provider of Complementary Proprietary Controls Technology

    Balboa Water: Provider of Complementary Proprietary Controls Technology Adding Scale and Diversification Global leader in spa and bath electronic Complementary AC technology Strengthens Helios and creates controls for health and wellness industry accelerates ability to grow shareholder value 1 Globa

  15. Slide 15: M&A Scorecard

    M&A Scorecard Acquisition Type: Transformational Transformational Flywheel Transformational Flywheel Meets Growth & Profitability Goals Enhances Technology/IP Expands Vertical Markets Deepens Geographic Reach Accretive to EPS Cost Synergies Technology/Market Integration www.heliostechnologies.com ©

  16. Slide 16: Solid Financial Performance

    Solid Financial Performance ($ in millions, except per share data) Revenue Gross Profit & Margin $555 $523 $508 $212 $193 $196 $112 $126 $116 $343 $137 $443 $382 $407 $112 $231 39.8% 37.9% 38.3% 37.5% 2017 2018 2019 2020 2017 2018 2019 2020 Hydraulics Electronics EPS & Non-GAAP Cash EPS Adjusted EBI

  17. Slide 17: Strong Liquidity Position

    Strong Liquidity Position ($ in millions) Capital Structure Ending Q4 2020 Capital Allocation Priorities $400 $25 $169 Total RCF $144 Undrawn 1 Organic Growth $256 Drawn 2 Debt Reduction $207 Balance 3 Acquisitive Growth Term Loans Revolving Credit Cash Liquidity (2) Facilities • Net Debt / Adj. EBI

  18. Slide 18: Solid Cash Flow

    Solid Cash Flow ($ in millions) Three Months Ended YTD YTD Free Cash Flow(1) Free Cash Flow Conversion 204%(3) 1/2/21 12/28/19 1/2/21 12/28/19 $94.0 Net cash provided by 126% 31.6 39.6 108.5 90.5 operating activities $76.2 (2) CapEx (7.4) (5.4) (14.5) (25.0) 105% $49.1 Free cash flow (FCF) $24.2 $34

  19. Slide 19: Strategic Direction

    Strategic Direction CONTINUED CONFIDENCE IN SUCCESSFUL EXECUTION WITH AUGMENTED VALUE STREAMS www.heliostechnologies.com © 2021 Helios Technologies 19

  20. Slide 20: 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

  21. Slide 21: Supplemental Information

    Supplemental Information www.heliostechnologies.com © 2021 Helios Technologies 21

  22. Slide 22: Segment Data

    Segment Data ($ in thousands) Three Months Ended For the Year Ended January 2, December 28, January 2, December 28, 2021 2019 2021 2019 Sales: Hydraulics $ 103,079 $ 102,550 $ 407,192 $ 442,812 Electronics 48,539 23,377 115,848 111,853 Consolidated $ 151,618 $ 125,927 $ 523,040 $ 554,665 Gross profi

  23. Slide 23: Sales by Geographic Region & Segment

    Sales by Geographic Region & Segment 2020 Sales by Geographic Region and Segment 2019 Sales by Geographic Region and Segment ($ in millions) ($ in millions) % Change % Change % Change % Change % Change % Change % Change % Change % Change % Change Q1 Q2 Q3 YTD 2020 Q1 Q2 Q3 Q4 YTD 2019 y/y y/y y/y Q4

  24. Slide 24: Adjusted Operating Income Reconciliation

    Adjusted Operating Income Reconciliation (Unaudited) F or the Y ea r Ended ($ in thousands) Ja nua ry 2, 2021 G A A P opera ti ng i ncom e $ 35,412 Acquisition-related amortization of intangible assets 22,114 Acquisition and financing-related expenses 7,264 Restructuring charges 361 CEO and officer

  25. Slide 25: Adjusted EBITDA Reconciliation

    Adjusted EBITDA Reconciliation (Unaudited) F or the Y ea r Ended ($ in thousands) J a nua ry 2, Decem ber 28, Decem ber 29, Decem ber 30, 2021 2019 2018 2017 N et i ncom e $ 14,218 $ 60,268 $ 46,730 $ 31,558 Interest expense, net 13,286 15,387 13,876 3,781 Income tax provision 9,829 15,039 9,665 15,

  26. Slide 26: Non-GAAP Cash Net Income Reconciliation

    Non-GAAP Cash Net Income Reconciliation (Unaudited) F or the Y ea r Ended ($ in thousands) J a nua ry 2, Decem ber 28, Decem ber 29, Decem ber 30, 2021 2019 2018 2017 N et i ncom e $ 14,218 $ 60,268 $ 46,730 $ 31,558 Acquisition-related amortization of inventory step-up - - 4,441 1,774 Acquisition a

  27. Slide 27: Free Cash Flow Reconciliation

    Free Cash Flow Reconciliation (Unaudited) ($ in thousands) 2017 2018 2019 2020 Net cash provided by operating activities $ 49,382 $ 77,450 $ 90,480 $ 108,556 Contingent consideration payment in excess of acquisition date fair value - - 10,731 - Adjusted net cash provided by operating activities 49,3

  28. Slide 28: Net Debt-to-Adjusted EBITDA Reconciliation

    Net Debt-to-Adjusted EBITDA Reconciliation (Unaudited) A s of ($ in thousands) Ja nua ry 2, 2021 Current portion of long-term non-revolving debt, net $ 16,229 Revolving lines of credit 256,224 Long-term non-revolving debt, net 189,932 Total debt 4 6 2 ,3 8 5 Less: Cash and cash equivalents 25,216 Ne

  29. Slide 29: Investor Presentation March 23, 2021

    Investor Presentation March 23, 2021 Nasdaq: HLIO www.heliostechnologies.com © 2021 Helios Technologies 29

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