Hayward (HAYW) 45th Annual William Blair Growth Stock Conference summary

Company Overview and Market Position

• Generates over $1.05 billion in net sales, with 85% from North America and 95% tied to the pool industry, mainly residential.

• Achieved a 7.5% net sales CAGR and 10% adjusted EBITDA CAGR over five years, with gross margins above 50%.

• Celebrating 100 years, with a strong brand, reputation for innovation, and industry leadership.

• 85% of net sales come from the aftermarket, driven by a large, aging installed base and non-discretionary spending.

• Focused on healthy outdoor living trends, smart connected products, and sustainability.

Industry Trends and Growth Drivers

• Pool industry benefits from migration to warmer climates, increased outdoor living, and demand for sustainable products.

• U.S. has 5.5 million in-ground pools; globally, nearly 25 million, with the installed base growing annually.

• Average pool age is 23 years, supporting recurring aftermarket upgrades and remodels.

• Technology upgrades, such as digital controls and variable speed pumps, present a $6.5B TAM in the US.

• Demonstrated ability to pass through price increases during inflation and tariff periods.

Strategic Priorities and Financial Performance

• Strategy centers on organic growth, margin expansion, disciplined capital deployment, and operational excellence.

• Gross margin expanded 600 bps over five years to 50.5% in 2024, with further margin opportunities in productivity, technology mix, and supply chain.

• Adjusted EBITDA margin for 2024 was 26.4%, with robust free cash flow generation.

• Recent acquisition of ChlorKing supports growth in the commercial segment.

• Commitment to sustainability through energy-efficient products and a top quartile industry ESG rating.