Slide 1: Execute. Elevate. Second Quarter 2024 Earnings
Execute. Elevate. HELIOS TECHNOLOGIES (NYSE: HLIO) SECOND QUARTER 2024 EARNINGS SEAN BAGAN, INTERIM PRESIDENT, CEO & CFO | TANIA ALMOND, VP OF IR & CORPORATE COMMUNICATION August 6, 2024
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: Our Connected Future – Staying the Course
OUR CONNECTED FUTURE – STAYING THE COURSE Leveraging our position at the intersection of Hydraulics and Electronics to create industry leading sub-system solutions TRANSFORMATION INTO AN INTEGRATED OPERATING COMPANY HELIOS TECHNOLOGIES 3
Slide 4: Q2 2024: Solid Sequential Improvements
Q1Q2 2024: 2024: Net Sales Cash From ONSOLID TRACKSEQUENTIAL OUT $219.9 M +4% QoQ Operations $33.8 M OFIMPROVEMENTS THE GATE -3% YoY +90% QoQ +30% YoY • 4% SEQUENTIAL TOP LINE GROWTH OVER 1Q24 • STRONG SEQUENTIAL MARGIN INCREASE AGAIN Diluted Adj. EBITDA Non-GAAP • IMPROVED CASH CONVERSION CYCLE Mar
Slide 5: Q2 2024 – Net Sales
Q2 2024 – NET SALES Sequential improvements lead by APAC followed by Americas; mixed results for end market Sales ($ in millions) QUARTER TRENDS (QoQ): SALES BY SEGMENT YoY Direction Market* Hydraulics Electronics $227.6 $219.9 66% 34% Industrial Mobile $220 Agriculture Recreational Q2 23 Q2 24 Heal
Slide 6: Q2 2024 – Gross Profit and Margin
Q2 2024 – GROSS PROFIT AND MARGIN Improved volume drives sequential margin expansion in the second quarter ($ in millions) QUARTER • QoQ: gross profit up 5% while gross margin expanded $75.8 $70.6 $67.2 40 bps driven by higher sales volume. $59.7 $55.3 • YoY: decline in gross profit driven by lower
Slide 7: Q2 2024 – Operating / Adjusted Operating Margin
Q2 2024 – OPERATING / ADJUSTED OPERATING MARGIN Sequential volume increase was key lever in driving margin expansion coupled with cost control discipline QUARTER • QoQ: GAAP operating income expanded 28% while 18.5% 16.4% GAAP operating margin expanded 220 bps driven by 13.7% 14.5% 5.5% 12.6% 4.6% 4
Slide 8: Q2 2024 – Net Income & Adjusted EBITDA Margin
Q2 2024 – NET INCOME & ADJUSTED EBITDA MARGIN Both volume and operational efficiencies drove sequential profitability expansion in the quarter ($ in millions, except per share data) NET INCOME $16.8 $13.6 $9.2 $3.5 $3.3 • QoQ: net income up 48% and diluted GAAP Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 EPS up $
Slide 9: Q2 2024 – Hydraulics Segment
Q2 2024 – HYDRAULICS SEGMENT Sequential improvements in both America and APAC; YoY APAC growth for two quarters in a row ($ in millions) QoQ YoY Sales: $145.7 2% 4% Gross Profit: $44.9 1% 10% Operating $23.9 10% 11% Income: Q2 SALES BY REGION Q2 SALES BY CHANNEL 30% 41% ~50% APAC $146 ~50% $146 Amer
Slide 10: Q2 2024 – Electronics Segment
Q2 2024 – ELECTRONICS SEGMENT Strong sequential performance reflecting the leverage dropping through as volume from health & wellness improved ($ in millions) QoQ YoY Sales: $74.2 7% 1% Gross Profit: $25.7 13% 2% Operating 45% 14% $10.3 Income: Q2 SALES BY REGION Q2 SALES BY CHANNEL 10% 78% ~79% APA
Slide 11: Q2 2024 – Cash Flow
Q2 2024 – CASH FLOW Disciplined working capital management and strong cash conversion ($ in millions) Free Cash Flow(1) Three Months Ended 6/29/24 7/1/23 Adjusted Net Cash Provided 204% $33.8 $28.8 83% by Operating Activities 126% $94.0 79% 232% Capital Expenditures (CapEx) (8.1) (10.5) $86.3 $76.2
Slide 12: Q2 2024 – Capital Structure
Q2 2024 – CAPITAL STRUCTURE Utilizing cash generated to reduce debt and fund organic growth initiatives ($ in millions) DEBT PROFILE CAPITAL ALLOCATION PRIORITIES 1. 2. 3. 4. Pay Down Organic Dividend Acquisitions $503 Debt Investments Total Debt $194 $353 revolver / Liquidity other Additional Detai
Slide 13: Moderating Full Year 2024 Outlook
MODERATING FULL YEAR 2024 OUTLOOK Total Net Sales $825M to $840M Adjusted EBITDA Margin(2) 19.5% 21.0% to Diluted Non-GAAP EPS (1, 2) $2.25 to $2.45 Note: See Supplemental Information for full 2024 outlook line-item details. (1) Reflects a Non-GAAP financial measure; see supplemental slide for recon
Slide 14: 2024 Segment Outlook
2024 SEGMENT OUTLOOK HYDRAULICS ELECTRONICS Regional Trends AMER EMEA APAC AMER EMEA APAC Positive Catalysts Ramping Centers of Excellence Health & Wellness Commercial Food Service Stable / Moderate Lift Mobile Recurring Software (starting in 2024) Flat / No Signs Yet of Bounce Construction Agricult
Slide 15: 2024 Financial Priorities
2024 FINANCIAL PRIORITIES Focused on execution to deliver the year and set the stage for accelerating future growth 1 2 3 4 5 Drive Operating Shorten Cash Leverage Strong Return to Growth Reduce Debt Leverage Conversion Cycle Foundation With higher volumes Utilizing free cash flow Through improved E
Slide 16: Supplemental Information
SUPPLEMENTAL INFORMATION
Slide 17: Building on a Strong Foundation of Step Level Growth
BUILDING ON A STRONG FOUNDATION OF STEP LEVEL GROWTH OUR PERFORMANCE & CURRENT VIEW HIGHLIGHTS ($ millions) • Transitioning from a holding company to an integrated operating company $869 $885 (1) $836 $833 • Diversifying the business and markets while evolving into selling system solutions • Leverag
Slide 18: Other Modeling Items
OTHER MODELING ITEMS ($ in millions, except per share data) 2024 OUTLOOK ASSUMPTIONS OTHER KEY METRICS • Electronics segment growth rate to outpace Hydraulics segment driven by Balboa’s core business recovery and 2023 Actual 2024 Outlook identified growth opportunities Net Income $37.5 $45 - $52 • E
Slide 19: Segment Data
SEGMENT DATA (Unaudited) ($ in millions) For the Three Months Ended For the Six Months Ended June 29, July 1, June 29, July 1, 2024 2023 2024 2023 Net Sales: Hydraulics $ 145.7 $ 152.4 $ 288.1 $ 300.1 Electronics 74.2 75.2 143.8 140.7 Consolidated $ 219.9 $ 227.6 $ 431.9 $ 440.8 Gross profit and mar
Slide 20: Organic and Acquired Net Sales
ORGANIC AND ACQUIRED NET SALES (Unaudited) ($ in millions) F or the Y ea r F or the Si x F or the Three Months Ended Ended F or the Three Months Ended Months Ended A pri l 1, J ul y 1, Septem ber 30, Decem ber 30, Decem ber 30, Ma rch 30, J une 29, J une 29, 2023 2023 2023 2023 2023 2024 2024 2024 H
Slide 21: Net Sales by Geographic Region & Segment
NET SALES BY GEOGRAPHIC REGION & SEGMENT (Unaudited) ($ in millions) 2023 2024 % Change % Change % Change % Change % Change % Change % Change Q1 y/y Q2 y/y Q3 y/y Q4 % Change y/y 2023 y/y Q1 y/y Q2 y/y YTD 2024 y/y Americas: Americas: Hydraulics $ 57.9 34% $ 60.6 21% $ 55.7 12% $ 60.2 6% $ 234.4 17%
Slide 22: Non-GAAP Adjusted Operating Income & Margin Reconciliation
NON-GAAP ADJUSTED OPERATING INCOME & NON-GAAP ADJUSTED OPERATING MARGIN RECONCILIATION (Unaudited) ($ in millions) Twel ve Months Ended Three Months Ended J ul y 1, J une 29, Decem ber 30, J une 29, 2023 2024 2023 2024 Margin Margin Margin Margin GAAP operating inc ome $ 2 9 .5 1 3 .0 % $ 2 6 .0 1 1
Slide 23: Non-GAAP Adj. Net Income & Per Diluted Share Reconciliation
NON-GAAP ADJ. NET INCOME & NON-GAAP ADJ. NET INCOME PER DILUTED SHARE RECONCILIATION (Unaudited) ($ in millions) For the Three Months Ended For the Six Months Ended Per Diluted Per Diluted Per Diluted Per Diluted June 29, 2024 Share July 1, 2023 Share June 29, 2024 Share* July 1, 2023 Share GAAP net
Slide 24: Non-GAAP Adjusted EBITDA & Margin Reconciliation
NON-GAAP ADJUSTED EBITDA & NON-GAAP ADJUSTED EBITDA MARGIN RECONCILIATION (Unaudited) ($ in millions) For the Three Months Ended For the Six Months Ended Twelve Months Ended June 29, 2024 Margin July 1, 2023 Margin June 29, 2024 Margin July 1, 2023 Margin June 29, 2024 Margin Net income $ 13.6 6.2%
Slide 25: Non-GAAP Adjusted Free Cash Flow Reconciliation
NON-GAAP ADJUSTED FREE CASH FLOW RECONCILIATION (Unaudited) For the Year Ended TTM ($ in millions) Dec ember 3 0 , Dec ember 2 9 , Dec ember 2 8 , January 2 , January 1 , Dec ember 3 1 , Dec ember 3 0 , June 2 9 , 2017 2018 2019 2021 2022 2022 2023 2024 Net c ash provided by operating ac tivities $
Slide 26: Non-GAAP Net Sales Growth Reconciliation
NON-GAAP NET SALES GROWTH RECONCILIATION (Unaudited) ($ in millions) For the Three Months Ended For the Six Months Ended Hydraulics Electronics Consolidated Hydraulics Electronics Consolidated Q2 2024 Net Sales $ 145.7 $ 74.2 $ 219.9 $ 288.1 $ 143.8 $ 431.9 (E) 0.8 0.1 0.9 1.1 0.2 1.3 Impact of fore
Slide 27: Net Debt to Non-GAAP Adjusted EBITDA Reconciliation
NET DEBT TO NON-GAAP ADJUSTED EBITDA RECONCILIATION (Unaudited) ($ in millions) As of June 29, 2024 Current portion of long-term non-revolving debt, net 17.2 Revolving lines of credit 193.8 Long-term non-revolving debt, net 291.7 Total debt 502.7 Less: Cash and cash equivalents 45.0 Net debt 457.7 T
Slide 28: heliostechnologies.com (NYSE: HLIO)
7456 16th Street East Sarasota, FL 34243 941.362.1200 heliostechnologies.com (NYSE: HLIO)