Hayward (HAYW) Jefferies Global Industrial Conference 2024 summary

Near-term market outlook

• U.S. new pool permits are down mid-teens year-over-year, but pool values are only down high single digits, indicating strength in mid to high-end pools.

• Entry-level pools are struggling due to higher financing needs, while higher-end pools see increased feature adoption like automation and LED lights.

• Less than 20% of net sales are tied to new construction; 80% are from existing pools in use.

• Normalized new pool construction is expected to return to 75,000-80,000 annually, above the current 60,000 level.

• Single-family home starts are a key driver, with one pool built for every 11-12 new homes.

Product innovation and connected equipment

• Automation and controls are installed in about 70% of new pools, with a goal to reach 100%.

• Aftermarket automation adoption is 35-40%, with strategies to increase this through modular upgrades.

• 80% of the product lineup can be controlled by smart devices; remaining products are mostly basic components.

• The OmniPro app, launched for service providers, has received strong feedback and is expected to expand in capability.

Consumer and channel trends

• Consumers are more likely to repair equipment as a short-term bridge rather than trade down to lower-priced products.

• Channel partners and the company have reduced inventory levels, focusing on right-sizing and working capital efficiency.

• Price increases have been accepted in the market, especially for high-value, energy-efficient products.

• Equipment cost is a small portion of total pool construction, so price sensitivity is low in new builds.