Hayward Holdings, Inc. · NYSE:HAYW
Hayward — Q3 2022 Earnings Presentation
23 slides from Hayward's earnings presentation, Nov 1, 2022
Slide 1: Third Quarter 2022 Earnings
THIRD QUARTER 2022 EARNINGS November 1, 2022 © 2022 Hay ward Holdings, Inc.
Slide 2: Third Quarter 2022 Earnings Call
THIRD QUARTER 2022 EARNINGS CALL KEVIN HOLLERAN President and Chief Executive Officer EIFION JONES Senior Vice President and Chief Financial Officer KEVIN MACZKA Vice President of Investor Relations NYSE: HAYW © 2022 Hay ward Holdings, Inc.
Slide 3: Disclaimer
Disclaimer SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release contains certain statements that are “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995 (the “Act”) and releases issued by the Securities and Exchange Commissi
Slide 4: Q3 2022 Key Messages
Q3 2022 Key Messages Q3 2022 results in line with our expectations • Consumer demand increased year-over-year; channel inventories normalizing Continue to win in the marketplace • Solid share gain, target account conversion, new product adoption and price realization Executing appropriate actions to
Slide 5: Q3 2022 Financial Overview
Q3 2022 Financial Overview NET SALES ($M) ADJ. EBITDA ($M)1 ADJ. DILUTED EPS1 Margin (% of net sales) $351 $98 $0.25 $245 $60 $0.14 28.0% 24.6% Q3'21 Q3'22 Q3'21 Q3'22 Q3'21 Q3'22 INCREASED CONSUMER DEMAND; PROACTIVE MARGIN MANAGEMENT REDUCED CHANNEL INVENTORY LEVELS ✓ Price realization, share gain,
Slide 6: Business Update
Business Update ✓ Core U.S. market: channel sell-through increased, led by year-round markets (sunbelt) End Consumer Demand ✓ Europe: negatively impacted by geopolitical events ✓ Increased sell-through reflects underlying demand in the U.S.; reduced sell-in reflects destocking globally ✓ Continued s
Slide 7: Successful Transformation Driving Outperformance
Successful Transformation Driving Outperformance NET SALES $1.3B Innovative New Products ✓ Accelerated new product development ~20% of roadmap ✓ New IOT-enabled product introductions business Adj. EBITDA $370M1 ✓ Best-in-class products in the top growth categories (28% margin) ~$900M Restructured Go
Slide 8: Conversion Upgrades
Conversion Upgrades Key Sustainable Aftermarket Conversion Opportunities Increase TAM NEW CONSTRUCTION AFTERMARKET OPPORTUNITY HAYW 3-YEAR CUMULATIVE HAYWARD TECHNOLOGY ENABLING TAKE RATE PENETRATION GAP UNIT GROWTH1 PRODUCT INTRODUCTIONS IN LTM Omni PL Digital New range of IoT Conversion ~67% ~29%
Slide 9: Third Quarter 2022 Financials
Third Quarter 2022 Financials NET SALES (30%) YOY ▪ Increased consumer demand w ith contribution from acquisitions, reduced by channel NET SALES OF $245M inventory destocking. ▪ Additional price realization to combat continued cost inflation GROSS PROFIT MARGIN OF 43.9% GROSS PROFIT OF $108M ▪ Price
Slide 10: North America Q3 2022 Segment Overview
North America Q3 2022 Segment Overview NET SALES GROSS PROFIT MARGIN ADJUSTED SEGMENT INCOME1 $204M $92M $57M -31.7% YoY 45.1% margin 27.9% margin ▪ Core U.S. market sell-through ▪ Price realization offset by inflation ▪ SG&A cost reduction actions increased and lower operating leverage on initiated
Slide 11: Europe and ROW Q3 2022 Segment Overview
Europe and ROW Q3 2022 Segment Overview NET SALES GROSS PROFIT MARGIN ADJUSTED SEGMENT INCOME1 $42M $16M $9M -20.6% YoY 38.3% margin 20.8% margin ▪ Favorable contribution from pricing ▪ Price realization and favorable ▪ SG&A cost reduction actions of 10% offset by lower volumes customer mix offset b
Slide 12: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights BALANCE SHEET ($M) CASH FLOW ($M) Q3 2022 Q3 2022 YTD 2022 Cash and cash equivalents $73 Cash flow from operating activities $80 $144 Total debt principal Less capex ($8) ($24) Term debt (2028 maturity)1 $988 Free cash flow $72 $120 ABL revolver (2026 maturity)
Slide 13: Balanced Capital Allocation Priorities
Balanced Capital Allocation Priorities ✓ Innovative new product development, IoT digital leadership Growth ✓ Commercial programs, dealer conversions Investments ✓ Operational excellence, productivity, growth capex Funding strategic growth investments ✓ Pipeline of tuck-in opportunities to complement
Slide 14: 2022 Financial Outlook
2022 Financial Outlook FULL YEAR 2022 OUTLOOK REFLECTS: + Resilient, recurring aftermarket demand Net sales down Adjusted EBITDA1 of + Continued share gain, price realization and technology adoption approximately 6% YoY $365M to $370M + Phased approach to enterprise cost reduction program - Channel
Slide 15: Q3 2022 Key Takeaways
Q3 2022 Key Takeaways Q3 2022 results in line with our expectations Continue to win in the marketplace Executing appropriate actions to optimize the cost structure and position for growth Refining full year 2022 guidance Continued progress on ESG commitments © 2022 Hay ward Holdings, Inc. 15
Slide 16: Appendix: Non-GAAP Reconciliations
APPENDIX APPENDIX Non-GAAP Reconciliations Non-GAAP Reconciliations © 2022 Hay ward Holdings, Inc.
Slide 17: Adjusted EBITDA & Adjusted EBITDA Margin Reconciliation
Adjusted EBITDA & Adjusted EBITDA Margin Reconciliation APPENDIX © 2022 Hay ward Holdings, Inc. 17
Slide 18: Last Twelve Months Adjusted EBITDA Reconciliation
Last Twelve Months Adjusted EBITDA Reconciliation APPENDIX © 2022 Hay ward Holdings, Inc. 18
Slide 19: 2019 Adjusted EBITDA Reconciliation
2019 Adjusted EBITDA Reconciliation APPENDIX (Dollars in millions) a) Represents non-cash stock-based compensation expense related to equity awards issued. b) Represents discretionary fees paid to our Sponsors for management services rendered pursuant to a management agreement with the Company. Thes
Slide 20: Adjusted net income and EPS Reconciliation
Adjusted net income and EPS Reconciliation APPENDIX © 2022 Hay ward Holdings, Inc. 20
Slide 21: Adjusted Segment Income Reconciliations
Adjusted Segment Income Reconciliations APPENDIX © 2022 Hay ward Holdings, Inc. 21
Slide 22: Adjusted Segment Income Reconciliations, continued
Adjusted Segment Income Reconciliations, continued APPENDIX © 2022 Hay ward Holdings, Inc. 22
Slide 23: Thank You
THANK YOU © 2022 Hay ward Holdings, Inc.