Hayward (US:HAYW)2022-07-30 17:06Financial Data and Key Metrics Changes - The company reported net sales growth of 10% year-over-year to $399 million, following exceptional growth of 66% in the second quarter of 2021 [8][20] - Adjusted EBITDA grew 16% year-over-year to $128 million, yielding a 32% margin, an increase of 166 basis points over the prior year [8][25] - Gross profit increased to $189.4 million, a 13% year-over-year increase, with a gross profit margin of 47.4%, up 130 basis points [23] Business Line Data and Key Metrics Changes - North American net sales increased approximately 17% to $342.1 million, driven by a 19% favorable price impact [26] - European net sales decreased 19% to $57.4 million, impacted by a 20% decline in volumes due to geopolitical circumstances [28] Market Data and Key Metrics Changes - The company noted a significant market opportunity of over $6 billion in the aftermarket for IoT-enabled controls, salt chlorination, and variable speed pumps [14] - The installed base of in-ground pools in the U.S. has grown to approximately 5.4 million, creating a lifetime need for repair, replace, remodel, and upgrade [16] Company Strategy and Development Direction - The company is focused on digital leadership, dealer conversions, new products, operational excellence, and environmental sustainability as core growth drivers [10] - Recent acquisitions, including J&J Electronics and Sollos, are aimed at enhancing the product portfolio and market position [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth model for the pool industry, particularly in the resilient aftermarket [33] - The company anticipates a consolidated sales decline of 2% to 6% for the year, primarily due to channel inventory adjustments and lower sales forecasts for Europe [35][36] Other Important Information - The company has been recognized with the 2022 ENERGY STAR Partner of the Year Award for its commitment to energy efficiency [32] - Total liquidity at the end of the second quarter was $239 million, including $109 million in cash [30] Q&A Session Summary Question: Understanding the destock and its impact - Management indicated that more than half of the new guidance is related to channel inventory adjustments, with a recalibration of 4 to 6 weeks expected [43][44] Question: Demand trends and moderation - Management noted that while there is still year-over-year growth, volume has not met original expectations due to economic uncertainty and weather impacts [49][50] Question: Pricing and margin resilience - Management confirmed that cumulative price increases of around 24% globally have been implemented, and they do not anticipate further pricing actions for the remainder of the year [65][66] Question: Capital allocation and M&A strategy - The focus remains on organic growth, with a willingness to consider M&A opportunities if they arise, but the priority is on internal projects [68][69]