Holley Inc. · NYSE:HLLY
Holley — Investor Day (2024)
90 slides from Holley's investor day presentation, 2024
Slide 1: LS Fest Investor Day 2024
LS Fest Investor Day 2024
Slide 2: Disclaimer
Disclaimer Certain statements in this presentation may be considered “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Holley’s future
Slide 3: Agenda
Agenda Presenter: Matthew Stevenson Progress on our Transformation Jesse Weaver Financial Review Osvaldo Gallegos Modern Truck and Off Road Jordon Musser Safety & Racing / Euro & Import Nick Hite Domestic Muscle Charlie Taylor Digital Modernization / Customer Experience / Data Full Panel Q&A 3 3
Slide 4: Holley Story is >120 Years Deep
Holley Story is >120 Years Deep 4 4
Slide 5: Performance Aftermarket
Performance Aftermarket The Enthusiast Category Is a Lifestyle 5 5
Slide 6: Market with Proven Long-Term Growth
Market with Proven Long-Term Growth The Performance Automotive Aftermarket (industry revenue in $ billions) $38 $39 $36 ~6.2% $28 $30 $32 $34 21-year CAGR $26 $23 $20 $18 $19 $17 $18 $16 $17 $16 $15 $13 $12 $11 $11 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 7: Enthusiast Spending is Part of a Lifestyle
Enthusiast Spending is Part of a Lifestyle 82% 76% 57% of all enthusiasts consider budgets of Holley consumers are aged of Holley consumers own a car on parts recurring expenses 45 or younger vs 46% of the produced in 2010 or later general population Our Consumers Are Passionate Enthusiasts Feel a N
Slide 8: Holley Performance Brands
Holley Performance Brands Platform Built by Enthusiasts for Enthusiasts 8 8
Slide 9: Vision Mission Values
Vision Mission Values To be the Bring performance, Teamwork undisputed safety, fun, and Respect global leader in excitement to Accountability automotive automotive performance Integrity enthusiasts solutions Trust Speed 9
Slide 10: Steering Principals Guide our Success
Steering Principals Guide our Success LISTENING TO ENHANCING O U R T E A M M AT E S O P E R AT I O N S OPTIMIZING PUTTING ALL ACQUISITIONS CUSTOMERS FIRST 10 10
Slide 11: Meeting Consumers Across Multiple Channels
Meeting Consumers Across Multiple Channels We reach out Consumer demand pulls Strong pull through Leadership position in all consumers where they our product through affords our brands channels, including higher chose to shop each channel must-carry status margin DTC channel Lower Growth, Further fr
Slide 12: Holley Products Compete Across the Vehicle
Holley Products Compete Across the Vehicle Holley Family of Brands* *Brands listed are representative of Key Holley Brands in each category 12
Slide 13: Portfolio of Winning Brands Across Categories
Portfolio of Winning Brands Across Categories Our brands have been built through a rich history of innovation Our Brands Are: Loved Leaders Authentic Recognized #1 #1 or #2 ~125K ~75% In NPS (44 compared to 37 In all major categories Attend Holley festivals Of consumer enthusiasts for competitors) a
Slide 14: Brands Organized by How Enthusiasts Shop
Brands Organized by How Enthusiasts Shop $5B $26B $14B $10B Holley is the market leader in Domestic Holley is combining our next-generation Holley has a catalog of premier and Holley is recognized as a leader in Muscle with an iconic reputation in product design and technology into a world-renowned
Slide 15: Q2 Progress on Keys to Unlocking Transformative Growth
Q2 Progress on Keys to Unlocking Transformative Growth Completed filling final key leadership positions for transformation Develop a High Performing Team SVP of Ops & Supply Chain to drive operational excellence & cost savings Director of Pricing Strategy focused on delivering profitable growth Dram
Slide 16: People Make the Transformation Possible
People Make the Transformation Possible Holley LS Fest Investor Day MASTER BRAND IDENTITY Matt Stevenson Jesse Weaver Osvaldo Gallegos Jordon Musser Nick Hite Charlie Taylor CEO CFO Modern Truck Division Safety and Domestic Muscle Digital, CRM and Electronics Division Division Data CONFIDENTIAL 16 1
Slide 17: Recap of Q2 Results
Recap of Q2 Results Transformation Underway With Strong Free Cash Flow 17 17
Slide 18: Q2 Financial Results & Ongoing Business Highlights
Q2 Financial Results & Ongoing Business Highlights 2024 Q2 Results Business Highlights New Products Launched in Q2 Across Verticals Net Adj. Gross Flowmaster F150 Expansion Sales Margin1 30 $169.5M 41.0% Baer Classic Brakes Simpson Devil Ray Elevating Promotional Efforts (3.3%) vs. PY 170bps vs. PY
Slide 19: Financial Priorities – Four Pillars
Financial Priorities – Four Pillars Proactively Leading the Business to Drive Sustainable Results IMPROVE FREE OPTIMIZE DELIVER RESTORE PROFITABILITY CASH FLOW WORKING CAPITAL BALANCE SHEET Identified material cost Improved free cash flow from Optimizing portfolio by Cash flow generation savings ope
Slide 20: Free Cash Flow Generation Improving
Free Cash Flow1 Generation Improving Free Cash Flow Pre-M&A ($MM) $29 $30 $29 $24 $24 $24 $22 $18 $16 $16 $13 $11 $3 ($1) ($1) ($8) ($11) ($25) 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Significant Improvement in 2024 YTD Free Cash Flow Compared to 202
Slide 21: Net Debt to EBITDA Leverage Ratio
Net Debt to EBITDA Leverage Ratio1 Net Leverage Ratio (Net Debt/TTM Covenant EBITDA) 4.89 x 4.21 x 4.16 x 4.02 x 3Q23 4Q23 1Q24 2Q24 $ millions 3Q23 4Q23 1Q24 2Q24 Net Debt $584.4 $553.4 $536.0 $515.3 Adj. EBITDA (TTM)2 116.7 130.1 126.8 126.3 Covenant Add-backs 2.8 1.5 1.9 1.9 Covenant EBITDA (TTM)
Slide 22: Working Together to Drive Financial Success
Working Together to Drive Financial Success Large base of passionate and highly engaged enthusiast consumers with attractive demographics 6-7% Organic Top Massive $39B U.S. market with decades of uninterrupted growth1 Line Growth ~40% Gross Margin Powerhouse of product innovation with iconic brands
Slide 23: Modern Truck and Off Road
MODERN TRUCK AND OFF ROAD
Slide 24: Introduction
Holley PERFORMANCE BRANDS |
Slide 25: Introduction
Introduction Osvaldo Gallegos Modern Truck Division “I believe in operating swiftly and effectively based on trust in my team and colleagues” Experience • Robust foundation in strategic planning, negotiation, partnerships, and customer relationship management, backed by over two decades of experienc
Slide 26: Overview of Our Addressable Market
Overview of Our Addressable Market 2 6
Slide 27: Industry Insights
Industry Insights Modern Truck and Off-Road Vertical Crossover Utility Vehicle (CUV) Pickup All-Terrain Vehicle (ATV) Sports Utility Vehicle (SUV) Utility Task Vehicle (UTV) The Modern Truck/Off Road Vertical is Year 2000+ Trucks/SUV's/CUV's and UTV/ATV's/Off Road Recreational /Race Vehicles 27
Slide 28: Industry Insights
Industry Insights Domestic Muscle Vertical Modern Truck and Off-Road Approximately 29 Million Vehicles Are Just Pick-up Trucks! Modern Truck (2010+) $18 Billion $8 Billion Specialty Equipment Market Size Specialty Equipment Market Size Source: SEMA 2023 and Management Estimates Large Base of Passion
Slide 29: Modern Truck & Off-Road High-Level Overview
Modern Truck & Off-Road High-Level Overview Modern Trucks continue to provide significant opportunity in the automotive aftermarket with a large VIO (29M 2010+) and high levels of modification (~50%) Types of modifications already made Modifications Planned for Pickup [Share of All Late-Model Pick-U
Slide 30: Our Leading Portfolio of Brands & Products
Our Leading Portfolio of Brands & Products
Slide 31: Modern Truck and Off-Road brands and products
In the Modern Truck and Off-Road segments, we are combining our next-generation product design and technology into a comprehensive platform solution, designed to help enthusiast enhance the performance, durability and aesthetics of their vehicles. Our solutions in this segment include iconic brands
Slide 32: Near Term Objectives / Priorities for Driving Growth in Division
Near Term Objectives / Priorities for Driving Growth in Division
Slide 33: Near Term Focus
Near Term Focus Modern Truck & Off-Road Extreme Focus CUSTOMER CENTRICITY OPERATIONAL EXCELLENCE PRODUCT INNOVATION 33
Slide 34: 2024 New Product Launches
2024 New Product Launches Modern Truck & Off-Road Q3 Q3 Baer Big Claw Brakes PredatorX Bluetooth Tuner Q4 Q4 Flowmaster Signature Series Arizona Desert Shocks Mesa Series 34
Slide 35: Safety & Racing
— Safety & Racing & PERFORMANCE BRAND aa # | @
Slide 36: Introduction
Introduction Holley
Slide 37: Introduction
Introduction Jordon Musser • Former professional Senior Vice President Safety and Electronics race car driver • Earned GM their first professional victory with the then new 2010 Camaro • Still race and coach Experience for “fun” • Defense & Aerospace • Factory driver in Shifter Kart racing • Motorsp
Slide 38: Overview of Our Addressable Market
Overview of Our Addressable Market 3
Slide 39: Industry Insights
Industry Insights Safety Products Automotive Motorcycle $1.5B $8.4B Addressable Global Safety Market Addressable Global Safety Market Large base of passionate, highly engaged enthusiasts. From pavement to dirt, we do it all. 39
Slide 40: Industry Insights
Industry Insights Safety Products IMSA & SRO F1 & IndyCar NASCAR & NHRA Motorcycle Any motorsport, anywhere; we make racers safer. 40
Slide 41: Our Leading Portfolio of Brands & Products
Our Leading Portfolio of Brands & Products
Slide 42: Safety Product – Brand Detail
Safety Product – Brand Detail Main Brands Main Product Location New Braunfels, TX Hawthorne, CA Cenate Sotto, Italy Mooresville, NC Simpson Mfg Suit Manufacturing Stilo Mfg - Inhouse autoclave Custom Belts - Hybrid Assy 68,500 sqft Mfg/Warehouse (Shares building with EV) Simpson EU distributor 4,100
Slide 43: Near Term Objectives / Priorities for Driving Growth in Division
Near Term Objectives / Priorities for Driving Growth in Division
Slide 44: Raising the Bar
Raising the Bar Extreme Focus Implement the latest technologies Seamless customer engagement Expanding into adjacencies Holley is a market leader in Safety, and the runway is still long 44
Slide 45: Euro & Import
Holicy | PERFQ aR ager
Slide 46: Overview of Our Addressable Market
Overview of Our Addressable Market 4
Slide 47: Industry Insights
Industry Insights Euro & Import Euro Import $7B $7B Addressable U.S. Market Aftermarket Components Addressable U.S. Market Aftermarket Components Euro & Import are key growth verticals with significant upside potential for Holley Performance Brands 47
Slide 48: Industry Insights
Industry Insights Euro & Import 183k VIO Civic Si 200k VIO - GTI 23k VIO – Civic Type R 25k VIO – Golf R Euro / Import has seen a much smaller shift to CUV/SUV/Truck than Domestic. 48
Slide 49: Our Leading Portfolio of Brands & Products
Our Leading Portfolio of Brands & Products
Slide 50: Euro & Import – Brand Detail
Euro & Import – Brand Detail Main Brands Main Products Euro & Import – Brand Detail Locations Opelika, AL Hawthorne, CA Euro Tuning AEM R&D 78,000 sqft R&D/Mfg/Warehouse (Shares building with Safety) 4,000 sqft Office & R&D Focused engineering with leading brands covering attractive OEMs with growin
Slide 51: Industry Insights
Industry Insights Euro & Import Platform Approach Using the most recognized brands in their respective segments has enabled quick customer adoption of the whole car approach increasing the size of wallet Holley earns. 51
Slide 52: Near Term Objectives / Priorities for Driving Growth in Division
Near Term Objectives / Priorities for Driving Growth in Division
Slide 53: Raising the Bar
Raising the Bar Extreme Focus Platform innovation Revive and expand unique go to market Use brand equity to control growing import market Holley is a market leader in Euro & Import, but there are still multiple levers to drive growth 53
Slide 54: Domestic Muscle
ollie y PERFORMANCE BRANDS DOMESTIC MUSCLE
Slide 55: Introduction
Introduction Holley
Slide 56: Introduction
Introduction Nicholas P Hite Domestic Muscle Division Experience • Automotive & Consumer Services • Product & Program Management Expert • Cross-functional Experience in Sales, Marketing, Engineering, Quality, Operations and Supply Chain • Family of 5, Kate, Ellie (13), Austin (9) and Christian (3) 5
Slide 57: Overview of Our Addressable Market
Overview of Our Addressable Market 5
Slide 58: Industry Insights
Industry Insights Domestic Muscle Vertical Classic Muscle Cars Hot Rods/Race Cars Classic Trucks Modern Domestic Muscle The Domestic Muscle Vertical is Pre-2000 Cars / Trucks and 2000+ Modern Muscle Cars 58
Slide 59: Industry Insights
Industry Insights Domestic Muscle Vertical Classic Cars / Trucks Modern Muscle Approx 15 Million 5.5 Million Pre-1999 Classics in the United States Modern Muscle Cars in the United States $2.71 Billion $1.89 Billion Specialty Equipment Market Size Specialty Equipment Market Size Source: SEMA 2023 an
Slide 60: Our Leading Portfolio of Brands & Products
Our Leading Portfolio of Brands & Products
Slide 61: Our Iconic Brands Resonate with Our Domestic Muscle Customers
Brands and Products Our Iconic Brands Resonate with Our Domestic Muscle Customers Our Market Core Category Our Brands Representative Products Position Electronic Fuel Injection #1 Carburetors #1 Fuel Systems #1 Ignition Systems #1 Powertrain Conversions #1 Safety #1 Exhaust #2 Induction #2 Brakes #2
Slide 62: Near-Term Objectives / Priorities for Driving Growth in Division
Near-Term Objectives / Priorities for Driving Growth in Division
Slide 63: Near-Term Focus
Near-Term Focus Domestic Muscle Extreme Focus CUSTOMER INTIMACY OPERATIONAL ENHANCEMENTS PRODUCT INNOVATION 63
Slide 64: 2024 New Product Launches
2024 New Product Launches Domestic Muscle Sniper 2 Expansion Complete System Bundles Bluetooth Capability Power Distribution Module (PDM) Sniper 2 Compatible Dashes Sniper 2 Transmission Control Sniper 2 Upgrade Kit Kitting on Demand Manufacturing System Implemented 64
Slide 65: 2024 New Product Launches
2024 New Product Launches Domestic Muscle Terminator X EFI Expansion Chevrolet LT4 Engine Coverage Ford Godzilla Engines Coverage Terminator Kits with GM 6L80/90 6 Speed Transmission Control 65
Slide 66: 2024 New Product Launches
2024 New Product Launches Domestic Muscle Ford Godzilla Engine Swap System Terminator X EFI Compatibility Accessory Drive and Pan Kit – • Ford Godzilla into Fox Mustang • Ford Godzilla into Ford F-100 Trucks (Q4 release) 66
Slide 67: Coffee Break
Coffee Break 67 6 7
Slide 68: Customer Experience Marketing
Customer Experience Marketing
Slide 69: Introduction
Introduction Charlie Taylor VP, CXM Digital, CRM and Data Experience • 25 years digital marketing in San Francisco, London, Washington DC, Nashville • Last 15 years has been focused in automotive. • Family of 5 - Tiffany, Lauren (22), Camille (20) and Porter (17) • Euro car enthusiast, Golf, Hiking
Slide 70: CXM = Customer (B2B and DTC) Experience Marketing
CXM = Customer (B2B and DTC) Experience Marketing Great Brands Great Products Great Partnerships We have strong brand assets, starting with The CXM (Customer Experience Our team is focused on support for Holley Performance Brands. Our focus Marketing) team is focused on support the our sales teams a
Slide 71: Holley Performance Brands: Umbrella Brand Identity
Holley Performance Brands: Umbrella Brand Identity WHO WE ARE We are Holley Performance Brands. A portfolio of best-in-class brands focused on serving and leading in the auto performance aftermarket and helping accelerate the motor life. WHAT WE DO While we don’t make vehicles… we make vehicles fast
Slide 72: And established the essence of Holley Performance Brands
And established the essence of Holley Performance Brands Not just parts. Always part of something more powerful. 73
Slide 73: And established the essence of Holley Performance Brands
And established the essence of Holley Performance Brands Not just parts. Always part of something more powerful. 6
Slide 74: Brands Organized by How Enthusiasts Shop
Brands Organized by How Enthusiasts Shop $5B $26B $14B $10B Holley is the market leader in Domestic Holley is combining our next-generation Holley has a catalog of premier and Holley is recognized as a leader in Muscle with an iconic reputation in product design and technology into a world-renowned
Slide 75: CRM - Data – Digital all work together to help Holley generate revenue
CRM - Data – Digital all work together to help Holley generate revenue and deliver the best possible customer experiences This is a PLATFORM focus, not a project focus. We are building entirely new capabilities that will provide sustained demand and loyalty. Customer Data Platform Product Data Pl
Slide 76: CRM: Leveraging 3M customer records, we are cross-selling in all channels
CRM: Leveraging 3M customer records, we are cross-selling in all channels with the right message in the right place at the right time. 1 2 Establish Foundation CRM Capabilities Activate and Empower Customer Facing Channels and Teams Data Ingestion, Hygiene Data Enrichment, & Transformation Segmentat
Slide 77: Better product data will create better adoption of existing and new products
Better product data will create better adoption of existing and new products Coverage Centralize all product data Data Platform Quality Clean, enhance and maintain Adoption Channel specific syndication Automate Delivering data coverage, quality and adoption requires connection and automation across
Slide 78: We can grow our eCom business at or above market
We can grow our eCom business at or above market. To achieve this, requires focus on growth drivers. Current Benchmarks OPPORTUNITY Organic Search ACQUIRE ACQUIRE/GROW VISITORS Paid Search Traffic Traffic Volume TO SITES Mid-funnel media Category/Brand strategy optimization CONVERT Conversion Rate O
Slide 79: Generative AI
Generative AI Holley Co-Pilot is a conversational AI assistant to deliver prompt and accurate responses using Holley's extensive in-house knowledge base. Benefits 1. Improve Customer Care Efficiency 2. Reduced Wait Time 3. Increased Sales (Revenue) 4. Agent Empowerment 5. Brand Uplift 6. Increased D
Slide 80: Questions?
Questions? 80 8 0
Slide 81: A Celebration Of Anything Powered by GM's Incredible LS Engine
A Celebration Of Anything Powered by GM’s Incredible LS Engine Mission Bring performance, safety, fun, and excitement to automotive enthusiasts Drag racing Off road Drifting Autocross Burn out contest Show-n-shine Dyno Road course … and more! 81 81
Slide 82: A Celebration Of Anything Powered by GM's Incredible LS Engine
A Celebration Of Anything Powered by GM’s Incredible LS Engine Holley Created & Owned Consumer Event Self-funding marketing activity Key driver in Holley's success with domestic muscle/LS community Drives massive content & connections with influencers and media ̶ 6M social media impressions (191K en
Slide 83: Vehicles on Display
Vehicles on Display VEHICLES 6th Gen Bronco APR MK8 Golf R C10 Truck F-Body Race Car PRESENTERS Bryan Grigsby Arin Ahnell Shane Weckerly Jordon Musser
Slide 84: Display Products
Display Products Domestic Muscle Modern Truck Euro & Import Safety & Racing Sniper2 Bluetooth Arizona Desert Shocks APR Ultralink HANS IV Terminator X (DFR & Mesa) APR Ignition Coil Prima Suit Godzilla Accessory Drive Baer Claw/Big Claw APR Carbon Fiber Intake Stilo Helmet MSD Ultra 6A Flowmaster Si
Slide 85: Appendix
Appendix 85 8 5
Slide 86: TTM EBITDA and Adjusted EBITDA Reconciliation
TTM EBITDA and Adjusted EBITDA Reconciliation HOLLEY INC. USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In millions) (Unaudited) TTM 3Q23 4Q23 1Q24 2Q24 Net Income $ 2.8 $ 19.2 $ 18.7 $ 22.8 Adjustments: Interest Expense, Net 55.4 60.7 53.5 56.7 Income Tax Expense 3.4 8.4 5.9 3.9 Depreciati
Slide 87: EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation HOLLEY INC. USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In millions) (Unaudited) For the thirteen weeks ended For the twenty-six weeks June 30, July 2, June 30, July 2, 2024 2023 2024 2023 Net Income $ 17.1 $ 13.0 $ 20.8 $
Slide 88: Adjusted Gross Profit and Adjusted Gross Margin Reconciliation
Adjusted Gross Profit and Adjusted Gross Margin Reconciliation USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In millions) (Unaudited) For the thirteen weeks ended For the twenty-six weeks June 30, July 2, June 30, July 2, 2024 2023 2024 2023 Gross Profit $ 70.3 $ 69.7 $ 122.4 $ 137.5 Adjust
Slide 89: Quarterly Free Cash Flow Reconciliation
Quarterly Free Cash Flow Reconciliation HOLLEY INC. and SUBSIDIARIES USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In millions) (Unaudited) 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Net Cash Provided by Operating Activities $ 17 $ 26 $ 32 $ 13
Slide 90: Adjusted Net income and Adjusted diluted EPS Reconciliation
Adjusted Net income and Adjusted diluted EPS Reconciliation HOLLEY INC. USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In millions) (Unaudited) For the thirteen weeks ended For the twenty-six weeks June 30, July 2, June 30, July 2, 2024 2023 2024 2023 Net Income $ 17.1 $ 13.0 $ 20.8 $ 17.2 S