Helios Technologies, Inc. · NYSE:HLIO
Helios Technologies — Baird 2024 Global Industrial Conference
49 slides from Helios Technologies's conference presentation, Nov 13, 2024
Slide 1: Execute. Elevate.
Execute. Elevate. HELIOS TECHNOLOGIES (NYSE: HLIO) Baird Global Industrial Conference SEAN BAGAN, INTERIM PRESIDENT, CEO & CFO | TANIA ALMOND, VP OF IR & CORPORATE COMMUNICATION November 13, 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: Growing Global Industrial Technology Leader
GROWING GLOBAL INDUSRIAL TECHNOLOGY LEADER (1,2) Helios Technologies (NYSE: HLIO) Financial & Market Data Global leader in highly engineered motion control and electronic controls technology for diverse end markets • Outsized growth driven by diversification and innovation $820M $1.8B • Strong finan
Slide 4: Helios External Reporting Segments
HELIOS EXTERNAL REPORTING SEGMENTS Strategically target niche markets with sticky solutions Diversification is a Strength of Helios HELIOS TECHNOLOGIES 4 Note: Revenue by end market based on our best estimate classifications across our subsidiaries and segments.
Slide 5: Helios' Global Footprint
HELIOS’ GLOBAL FOOTPRINT Serving Customers “In the Region, For the Region” HELIOS TECHNOLOGIES 5 Note: Revenue by region percentage based on YE2023
Slide 6: Helios Operating Companies
HELIOS OPERATING COMPANIES Largest Businesses within Portfolio HYDRAULICS ELECTRONICS Strong Brands Delivering Critical Products HELIOS TECHNOLOGIES 6
Slide 7: Helios Business System
HELIOS BUSINESS SYSTEM 1 Drive the cash flow engine 1 Champion a global operating mindset 2 Deliver new products 2 Leverage global resources and assets 3 Leverage existing products 3 Manufacture to support diverse end markets 4 Cultivate customer centricity 4 Accelerate innovation 5 Build in the reg
Slide 8: Transforming into an Integrated Operating Company
TRANSFORMING INTO AN INTEGRATED OPERATING COMPANY Streamlining the Customer Experience Lifecycle PREVIOUS STATE CURRENT/FUTURE STATE Customer Helios Team New strategy allows for fewer customer contact points Business Segment and internal efficiencies, resulting in satisfied customers, higher margins
Slide 9: Strategic Investments Made Over the Last Several Years
STRATEGIC INVESTMENTS MADE OVER THE LAST SEVERAL YEARS 1 2 3 4 5 Product Innovation Acquisitions Capacity Regional Structure Systems / Software Helios continues to be a Helios is enhancing its Helios is bringing Helios is maximizing Helios is leveraging leading innovator technology, expanding ~200,0
Slide 10: Our Connected Future
OUR CONNECTED FUTURE 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 10
Slide 11: Hydraulics Overview
HYDRAULICS OVERVIEW
Slide 12: Video – Hydraulics Segment Overview
VIDEO – HYDRAULICS SEGMENT OVERVIEW Link to Hydraulics Segment Video: Here HELIOS TECHNOLOGIES 12
Slide 13: Hydraulics Segment Overview
HYDRAULICS SEGMENT OVERVIEW Screw-in hydraulic cartridge Quick-release hydraulic Distribution of hydraulic, valves, electro-hydraulics, couplings, casting solutions & pneumatic, filtration, manifolds, integrated multi-connection for mobile off- lubrication and electronic packages for the industrial
Slide 14: Hydraulics End Markets
HYDRAULICS END MARKETS REVENUE BY END MARKET (FY 2023)(1) 1% 21% 38% $566M 16% 68% of total sales 24% Other / Mobile Mobile Industrial Agricultural Agriculture Recreational Industrial Other / Recreational • Material Handling • Industrial Machinery • Tractors Front Lines • Marine Health & Wellness •
Slide 15: Q3 2024 – Hydraulics Segment
Q3 2024 – HYDRAULICS SEGMENT Industrial and mobile markets grew while offset by weakness in agriculture market compared to year ago period ($ in millions) YoY QoQ Sales: $129.4 2% 11% Gross Profit: $40.9 0% 9% Operating $24.2 32% 1% Income: Q3 SALES BY REGION Q3 SALES BY CHANNEL 32% 40% ~50% APAC $1
Slide 16: Hydraulics Market Expansion Potential
HYDRAULICS MARKET EXPANSION POTENTIAL Current Material Handling Specialized Forestry Equipment Agriculture Renewable Energy Mining Vehicles Markets Packaging & Machine Tools & Marine/Offshore Construction Factory Automation Exploration Processing Presses Growth Markets Recreational Pharmaceutical He
Slide 17: Video – Hydraulics Segment Integration Spotlight
VIDEO – HYDRAULICS SEGMENT INTEGRATION SPOTLIGHT Link to Hydraulics Segment Video: Here HELIOS TECHNOLOGIES 17
Slide 18: Electronics Overview
ELECTRONICS OVERVIEW
Slide 19: Video – Electronics Segment Overview
VIDEO – ELECTRONICS SEGMENT OVERVIEW Link to Electronics Segment Video: Here HELIOS TECHNOLOGIES 19
Slide 20: Electronics Segment Overview
ELECTRONICS SEGMENT OVERVIEW Hydraulic Control Solutions Electronic Controls and Accessories for Rugged Electronic Spas, Swimspas & Monitoring & GPS Speed Control Walk-In Baths Control Solutions for Recreational Marine Our trusted global brands deliver technology solutions that ensure safety, reliab
Slide 21: Electronics End Markets
ELECTRONICS END MARKETS REVENUE BY END MARKET (FY 2023)(1) 12% 2% 36% $270M 18% 32% of total sales 32% Health & Other / Mobile Mobile Industrial Agriculture Wellness Recreational Industrial Other / Recreational • Material Handling • Industrial Machinery • Walk-in Baths • Marine Health & Wellness • C
Slide 22: Q3 2024 – Electronics Segment
Q3 2024 – ELECTRONICS SEGMENT Increased demand in APAC and EMEA helped to partially offset the decline in the Americas compared to year ago period ($ in millions) YoY QoQ Sales: $65.1 6% 12% Gross Profit: $19.6 5% 24% Operating 62% 34% $6.8 Income: Q3 SALES BY REGION Q3 SALES BY CHANNEL 12% 78% ~79%
Slide 23: Electronics Existing and Growth Markets
ELECTRONICS EXISTING AND GROWTH MARKETS Off-Highway Material Handling Specialized Vehicles Stationary Equipment Equipment & Vehicles Current Markets Health & Wellness On-Road Vehicles Recreational Mining Growth Markets Commercial Food Construction Cold Plunge Pool Agriculture Service HELIOS TECHNOLO
Slide 24: Electronics New Product Introductions
ELECTRONICS NEW PRODUCT INTRODUCTIONS A Year of New Product Breakthroughs S70 U120 PB565 PB562/3 S50 U150 ST4 ST Mini J400 SELECT SERIES PVP70 ULTIMATE SERIES SPA DISPLAYS PRO SERIES SPA II Controls CLIM8ZONE II Ozone Generator Chiller Pack Smart Heater Jacuzzi 880 SPA HEAT / COOL PACK OPENPV SOFTWA
Slide 25: Video – Electronics Segment Integration Spotlight
VIDEO – ELECTRONICS SEGMENT INTEGRATION SPOTLIGHT Link to Electronics Segment Video: Here HELIOS TECHNOLOGIES 25
Slide 26: Financial Overview
FINANCIAL OVERVIEW
Slide 27: Q3 2024: Financial Profile Improvements
Q1Q3 2024: 2024: Net Sales Cash From ONFURTHER TRACK OUTFINANCIAL $194.5 M -3% YoY Operations $34.8 M OFPROFILE THE GATEIMPROVEMENTS -12% QoQ +195% YoY +3% QoQ • CASH FROM OPERATIONS UP 195% OVER LAST YEAR • STRONG MARGIN IMPROVEMENTS ON LOWER SALES Diluted Adj. EBITDA Non-GAAP • REDUCED DEBT FOR FI
Slide 28: 2024 Hurricanes: Unified Team Overcoming Adversity
2024 HURRICANES: UNIFIED TEAM OVERCOMING ADVERSITY Safety of our people is always top priority; continue working through the recovery and financial impacts Team Injuries from the Hurricanes None Number of Lost Manufacturing Shifts 18 Estimated Revenue Impact ~$10M Estimated Recovery Expenses ~$3M HE
Slide 29: Q3 2024 – Net Sales
Q3 2024 – NET SALES Growth in Health & Wellness partially offset declines in other markets ($ in millions) QUARTERLY TRENDS: SALES BY SEGMENT YoY Direction Market* $201.4 Hydraulics Electronics $194.5 67% 33% Industrial Mobile $195 Agriculture Q3 23 Q3 24 Recreational Health & Wellness Other SALES B
Slide 30: Q3 2024 – Gross Profit and Margin
Q3 2024 – GROSS PROFIT AND MARGIN Absolute growth and margin expansion over the year ago period despite lower volumes ($ in millions) QUARTER • YoY: gross profit increased $0.8 million and gross $67.2 $70.6 margin expanded 150 bps despite lower volume due to $59.7 $55.3 $60.5 lower material costs, r
Slide 31: Q3 2024 – Operating / Adjusted Operating Margin
Q3 2024 – OPERATING / ADJUSTED OPERATING MARGIN Strong operating margin improvement as expected from efficiencies and cost adjustments QUARTER • YoY: GAAP operating income expanded 61% with 16.4% 16.6% 13.7% 14.5% margin expanded 450 bps driven by to lower material 12.6% 4.6% 5.2% 4.9% costs and low
Slide 32: Q3 2024 – Net Income & Adjusted EBITDA & Margin
Q3 2024 – NET INCOME & ADJUSTED EBITDA & MARGIN Strong profitability expansion in the quarter over the year ago period ($ in millions, except per share data) NET INCOME $13.6 $11.4 $9.2 $3.5 $3.3 • YoY: net income up 226% and diluted GAAP Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 EPS up $0.23 Diluted GAAP EPS $
Slide 33: Q3 2024 – Capital Structure
Q3 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 Debt Investments $483 Total Debt $178 $372 revolver / Liquidity Additional Details oth
Slide 34: Updating Full Year 2024 Outlook
UPDATING FULL YEAR 2024 OUTLOOK Reflecting weaker end markets and hurricane impacts Total Net Sales $800M to $805M Adjusted EBITDA Margin(2) 19.0% 19.6% to Diluted Non-GAAP EPS (1, 2) $2.10 to $2.20 Note: See Supplemental Information for full 2024 outlook line-item details. (1) Reflects a Non-GAAP f
Slide 35: 2024 Segment Outlook
2024 SEGMENT OUTLOOK HYDRAULICS ELECTRONICS Regional Trends AMER EMEA APAC AMER EMEA APAC Positive Catalysts Health & Wellness Ramping Centers of Excellence Commercial Food Service Stable / Moderate Lift Recurring Software (starting in 2024) Flat / No Signs Yet of Bounce Mobile Starting / In a Down
Slide 36: 2024 Financial Priorities
2024 FINANCIAL PRIORITIES Focused on execution to deliver the year and set the stage for accelerating future growth 1 2 3 4 5 Drive Operating Shorten Cash Leverage Strong Return to Growth Reduce Debt Leverage Conversion Cycle Foundation With higher volumes Utilizing free cash flow Through improved E
Slide 37: Supplemental Information
SUPPLEMENTAL INFORMATION
Slide 38: Building on a Strong Foundation of Step Level Growth
BUILDING ON A STRONG FOUNDATION OF STEP LEVEL GROWTH OUR SALES PERFORMANCE & CURRENT VIEW HIGHLIGHTS ($ millions) • Transitioning from a holding company to an integrated operating company $869 $885 (1) $836 $803 • Diversifying the business and markets while evolving into selling system solutions • L
Slide 39: Other Modeling Items
OTHER MODELING ITEMS ($ in millions, except per share data) 2024 OUTLOOK ASSUMPTIONS KEY METRICS • Electronics segment to outpace Hydraulics 2023 Actual 2024 Outlook segment driven by Balboa’s core business recovery and identified growth opportunities Total Net Sales $835.6 $800 - $805 Net Income $3
Slide 40: Segment Data
SEGMENT DATA (Unaudited) ($ in millions) For the Three Months Ended For the Nine Months Ended September 28, September 30, September 28, September 30, 2024 2023 2024 2023 Net Sales: Hydraulics $ 129.4 $ 132.0 $ 417.5 $ 432.1 Electronics 65.1 69.4 208.9 210.1 Consolidated $ 194.5 $ 201.4 $ 626.4 $ 642
Slide 41: Organic and Acquired Net Sales
ORGANIC AND ACQUIRED NET SALES (Unaudited) ($ in millions) For the Year For the Nine For the Three Months Ended Ended For the Three Months Ended Months Ended April 1, July 1, September 30, December 30, December 30, March 30, June 29, September 28, September 28, 2023 2023 2023 2023 2023 2024 2024 202
Slide 42: Net Sales by Geographic Region & Segment
NET SALES BY GEOGRAPHIC REGION & SEGMENT (Unaudited) ($ in millions) 2023 2024 % Change % Change % Change % Change % Change % Change % Change % Change Q1 y/y Q2 y/y Q3 y/y Q4 y/y 2023 % Change y/y Q1 y/y Q2 y/y Q3 y/y YTD 2024 y/y Americas: Americas: Hydraulics $ 57.9 34% $ 60.6 21% $ 55.7 12% $ 60.
Slide 43: Non-GAAP Adjusted Operating Income & Margin Reconciliation
NON-GAAP ADJUSTED OPERATING INCOME & NON-GAAP ADJUSTED OPERATING MARGIN RECONCILIATION (Unaudited) ($ in millions) For the Three Months Ended For the Nine Months Ended Twelve Months Ended September September September September September 28, 2024 Margin 30, 2023 Margin 28, 2024 Margin 30, 2023 Margi
Slide 44: 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 Nine Months Ended September Per Diluted September Per Diluted September 28, Per Diluted September 30, Per Diluted 28, 2024 Share 30, 2023 Share 2024 Sha
Slide 45: 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 Nine Months Ended Twelve Months Ended September September September September September 28, 2024 Margin 30, 2023 Margin 28, 2024 Margin 30, 2023 Margin 28, 2024 Ma
Slide 46: Non-GAAP Adjusted Free Cash Flow Reconciliation
NON-GAAP ADJUSTED FREE CASH FLOW RECONCILIATION (Unaudited) ($ in millions) For the Year Ended TTM December 30, December 29, December 28, January 2, January 1, December 31, December 30, September 28, 2017 2018 2019 2021 2022 2022 2023 2024 Net cash provided by operating activities $ 49.4 $ 77.5 $ 90
Slide 47: Non-GAAP Net Sales Growth Reconciliation
NON-GAAP NET SALES GROWTH RECONCILIATION (Unaudited) ($ in millions) For the Three Months Ended For the Nine Months Ended Hydraulics Electronics Consolidated Hydraulics Electronics Consolidated Q3 2024 Net Sales $ 129.4 $ 65.1 $ 194.5 $ 417.5 $ 208.9 $ 626.4 (E) (0.6) - (0.6) 0.5 0.1 0.6 Impact of f
Slide 48: Net Debt to Non-GAAP Adjusted EBITDA Reconciliation
NET DEBT TO NON-GAAP ADJUSTED EBITDA RECONCILIATION (Unaudited) ($ in millions) As of September 28, 2024 Current portion of long-term non-revolving debt, net 17.6 Revolving lines of credit 177.9 Long-term non-revolving debt, net 287.9 Total debt 483.4 Less: Cash and cash equivalents 46.7 Net debt 43
Slide 49: heliostechnologies.com (NYSE: HLIO)
7456 16th Street East Sarasota, FL 34243 941.362.1200 heliostechnologies.com (NYSE: HLIO)
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