Latham Group (SWIM) 46th Annual William Blair Growth Stock Conference summary

Market trends and growth strategy

• Fiberglass pools have grown from 10% to 25% of U.S. pool installations over 15 years, driven by cost, speed, and ease of maintenance advantages over concrete pools.

• Auto covers offer safety and energy savings, with attachment rates rising and significant growth potential, especially in the Sand States (FL, TX, AZ, CA).

• The company is underrepresented in the Sand States, which account for over 60% of U.S. pool sales, and is heavily investing to expand market share there.

• Product innovation, lean manufacturing, and value engineering are central to maintaining cost advantages and quality.

• International learnings, especially from Australia where 70% of pools are fiberglass, are being applied to the U.S. market.

Operational initiatives and sales execution

• Dealer relationships have been restructured, exclusive territories removed, and dealer training enhanced to ensure consistent consumer experience.

• Sales strategy is increasingly data-driven, using high-fidelity market data to optimize product mix and resource allocation.

• Segmentation and targeted marketing are used to penetrate local markets, focusing on demographics and homeownership trends.

• Investment in field sales and brand marketing is increasing, even as competitors cut back.

• Consumer demand is being driven by lifestyle branding and direct engagement, shifting the industry from builder-driven to consumer-driven purchasing.

Financial outlook and forward-looking statements

• 2024 guidance projects 9% net sales growth (3% from acquisition, 6% organic), with adjusted EBITDA up 12.7%, in a flat market.

• Lean manufacturing and value engineering are expected to provide stable contributions to margins.

• Transportation surcharges and supplier negotiations are mitigating commodity and fuel price headwinds.

• Three-to-five-year outlook targets $750M revenue and $160M EBITDA, assuming a market recovery to pre-COVID levels.

• Historical performance shows outpacing market growth by 2–2.5x in both revenue and EBITDA since 2015.