Hayward Holdings, Inc. ((HAYW)) has held its Q4 earnings call. Read on for the main highlights of the call.
Hayward Holdings, Inc. recently conducted its earnings call, revealing a robust financial performance coupled with strategic advancements. The sentiment was largely positive, underscoring significant milestones and achievements. However, the company also acknowledged challenges in international markets and potential impacts from tariffs.
100-Year Anniversary Celebration
Hayward Holdings, Inc. marked a significant milestone by celebrating its 100th anniversary. This celebration highlights a century of innovation and service in the pool industry, underscoring the company’s long-standing commitment to excellence.
Strong Fourth Quarter Performance
The company reported a strong fourth quarter, with net sales increasing by 17% to $327 million. Notably, North America saw a 20% increase in sales, and gross profit margins expanded to a record 51.4%, reflecting the company’s successful strategies and market presence.
Full-Year Financial Success
For the full year 2024, Hayward Holdings achieved a 6% increase in net sales, reaching $1.52 billion. Adjusted EBITDA rose by 12% to $277 million, surpassing the company’s guidance and demonstrating its financial strength and operational efficiency.
Operational Excellence and Innovation
The company introduced innovative products such as the Microchannel Temperature Control Unit and the OmniPro app. Additionally, Hayward focused on consolidating manufacturing and expanding automation, showcasing its commitment to operational excellence and technological advancement.
Balance Sheet Improvement
Hayward Holdings improved its balance sheet by reducing net leverage to 2.8x, aligning with its targeted range. Free cash flow increased by 22% to $188 million, highlighting the company’s effective financial management.
Challenges in Europe and Rest of the World
Despite overall success, Hayward faced challenges in Europe and other international markets, with net sales declining by 8% for the full year. These challenges were attributed to lower volumes and adverse macroeconomic factors.
Tariff and Import Concerns
The company is evaluating potential impacts from tariffs on imports from China, Mexico, and Canada. This ongoing assessment is crucial for managing supply chain and pricing strategies effectively.
Pressure on New Construction and Remodel Markets
Hayward continues to experience pressure in the new construction and remodel markets, primarily due to higher interest rates and reduced turnover in existing homes, affecting discretionary spending.
Forward-Looking Guidance
Looking ahead to 2025, Hayward Holdings anticipates net sales growth of 1% to 5%, supported by a positive net price contribution and modest volume increases in nondiscretionary aftermarket maintenance. The company expects adjusted EBITDA to range between $280 million and $290 million, with strong cash flow generation projected to exceed 100% of net income. Hayward plans to maintain a balanced capital allocation strategy, focusing on strategic growth investments and shareholder returns.
In conclusion, Hayward Holdings, Inc.’s earnings call reflected a positive sentiment, driven by strong financial performance and strategic initiatives. While challenges in international markets and tariff concerns were acknowledged, the company’s forward-looking guidance suggests continued growth and resilience in the coming year.