Helios Technologies (HLIO) Baird 2024 Global Industrials Conference summary

Company Overview and Strategic Transformation

• Transitioned from Sun Hydraulics to a diversified electronics and hydraulics motion control provider, deploying over $1.3 billion in M&A and shifting from a holding to an integrated operating company to streamline efficiencies and customer experience.

• Operations are geographically balanced, with about half of sales in the Americas and the rest split between Europe and Asia Pacific, supported by regional Centers of Excellence and 'in the region, for the region' manufacturing.

• Revenue is diversified across end markets and customers, with $820 million trailing 12-month revenue and $1.8 billion market cap.

• Strategic investments in product innovation, acquisitions, capacity expansion, regional structure, and software are driving growth and recurring revenue.

• Diversification across end markets and geographies mitigates cyclicality and expands opportunities.

Leadership and Organizational Stability

• Interim CEO and CFO Sean Bagan highlighted a stable management team with three business presidents and no turnover since the CEO transition.

• CEO search is ongoing with Spencer Stuart, targeting a six-month timeframe to find a long-term leader.

Financial Performance and Outlook

• Q3 2024 net sales were $194.5M, down 3% YoY, with adjusted EBITDA margin at 20.9% (+320 bps YoY).

• Cash from operations rose 195% YoY; debt leverage ratio reduced to 2.8x, with debt paid down for five consecutive quarters.

• Full-year 2024 outlook updated to $800–$805M net sales, 19.0–19.6% adjusted EBITDA margin, and $2.10–$2.20 diluted non-GAAP EPS, reflecting softer end markets and hurricane impacts.

• Gross profit and margin expanded YoY despite lower volumes, driven by lower material costs and operational efficiencies.

• Continued focus on protecting margins, generating cash, and reducing debt while investing in organic growth and dividends.