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2020 POOL Presentation - Final.pptx - Read-Only › b2icontent.irpass.cc › 603 › 181368.pdfv ] Æ í ñ 5HFRQFLOLDWLRQ RI 5HSRUWHG 'LOOXWHG (36 WR $GMXVWHG 'LOXWHG (36)

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Page 1: 2020 POOL Presentation - Final.pptx - Read-Only › b2icontent.irpass.cc › 603 › 181368.pdfv ] Æ í ñ 5HFRQFLOLDWLRQ RI 5HSRUWHG 'LOOXWHG (36 WR $GMXVWHG 'LOXWHG (36)
Page 2: 2020 POOL Presentation - Final.pptx - Read-Only › b2icontent.irpass.cc › 603 › 181368.pdfv ] Æ í ñ 5HFRQFLOLDWLRQ RI 5HSRUWHG 'LOOXWHG (36 WR $GMXVWHG 'LOXWHG (36)

Forward Looking StatementsThis presentation may contain forward-looking statements made pursuant to the safe harbor provisions of thePrivate Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date of thispresentation and are subject to change. The Company undertakes no obligation to update or reviseforward-looking statements to reflect new circumstances or unanticipated events as they occur. Actual results maydiffer materially due to a variety of factors, including impacts on our business from the COVID-19 pandemic, thesensitivity of our business to weather conditions, changes in the economy and the housing market, our ability tomaintain favorable relationships with suppliers and manufacturers, competition from other leisure productalternatives and mass merchants, excess tax benefits or deficiencies recognized under ASU 2016-09 and otherrisks detailed in POOLCORP’s 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commissionas updated by POOLCORP’s subsequent filings with the SEC.

This presentation may also contain references to certain non-GAAP financial measures as defined by the SEC. Areconciliation of non-GAAP financial measures to their most directly comparable financial measures calculatedand presented in accordance with generally accepted accounting principles can be found in the Appendix at theend of this presentation, if applicable at http://ir.poolcorp.com/NonGAAP_Financial_Measures, or in theCompany’s most recent earnings release, which is furnished in our Current Report on Form 8-K filed with the SEC.

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POOL Profile

3

o Over 60% recurring revenue that is non-discretionary

o Highly fragmented, niche distribution segments with favorable long-term growth dynamics

Industry

o Value-add distribution model generates customer retention and organic growth

o Strong execution discipline driving high margins and operating leverage

o Exceptional historical performance and shareholder returns

POOLCORP

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Current Environment

o Strong balance sheet with low leverage, substantial access to debt capital

oOver 60% recurring revenue mitigates risko ‘Better than expected’ sales trends

reported for April and Mayo Stay-at-home trends support demand for

pool and related products

4

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POOLCORP Global Network Revenue

Vision: ‘To be the best worldwide distributor of outdoor lifestyle home products’

Global Network Sales Centers(1)

North America Pool 289

Irrigation & Landscape 67

Europe/Australia 22

Total 378

5

(1)As of March 31, 2020

North America Pool85%

Irrigation & Landscape9%

Europe/Australia6%

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Value-Added Distribution

‘Value-add distribution and service to a fragmented marketplace’

6

Superior ServiceSelection

ConveniencePrice

Exceptional Value

Local availability

B2B eCommerce

Convenient locations

Broad product selection

Same/next day delivery

Field-based sales force

Retail support services

Marketing programs

Technical Support

Credit

120,000 Customers

Pool & Landscape Maintenance &

Service Companies

Construction/ Remodeling Contractors

Specialty Retailers

Online Resellers

National Accounts

120,000 Customers

Pool & Landscape Maintenance &

Service Companies

Construction/ Remodeling Contractors

Specialty Retailers

Online Resellers

National Accounts

200,000 products

Demand creation

Marketing & promotion

Supply & logistics mgmt

Warranty support

Product training

Over 2,200 Vendors

Mfr

Brands

75%

25%

PLEX

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Financial Performance

2014 2015 2016 2017 2018 2019

$2,247$2,363

$2,571$2,788

$2,998

$3,200

Net Sales(in millions)

‘High operating margins and solid cash flow generation’

1 See Appendix for Adjusted EBITDA reconciliationSource: Company Financial Data

7

2014 2015 2016 2017 2018 2019

8.4%9.1%

10.0% 10.2%10.5% 10.7%

Operating Margin

2014 2015 2016 2017 2018 2019

$213

$242

$287

$322

$353

$382

Adjusted EBITDA1

(in millions)

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COVID-19 & POOL o POOL sales centers deemed ‘essential businesses’ and remain open

o Majority of customers remain open for business, subject to jurisdictional restrictions

o No significant supply chain disruptions anticipated

o Primary focus is employee and customer safetyo Physical distancing; work-from-home, where possibleo Increased hygiene and facilities sanitization directives and supplieso Emphasizing Pool360® and BlueStreakTM ordering to reduce customer need to

enter sales centers

o Reduced capital and discretionary spending expected to mitigate impact of any demand weakness

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‘POOL making adjustments adapting to a new, challenging environment’

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POOLCORP Business Evolution

N. America Pool Maintenance

43%

Remodel/ Renovation

17%

Horizon13%

Int'l, 5%

New Pool Construction

22%

POOLCORP 2007

$1.9 Billion

9

N. America Pool Maintenance

50%

Remodel/ Renovation

20% Horizon9%

Int'l, 6%

New Pool Construction

15%

POOLCORP 2020

$3.2 Billion

Non-discretionarySomewhat discretionaryDiscretionary

o Stronger financial position than in 2007o Lower proportion of ‘at risk’ business todayo Higher margin products are Non-Discretionary

‘Better positioned for an economic downturn’

Source: Company Financial Data

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Financial Strength and Capacityo Low leverage with substantial

additional debt capacityo Low capital expenditure

requirementso Strong operating cash flow;

counter-cyclical in downturn environment

o Dividend increased and continued opportunistic share repurchases

10

($ in 000s) Q1 2020

Balance Sheet Strength & Liquidity

Net Working Capital $586,088

Available Credit Facility Capacity $522,400

Shareholder Equity $348,398

Leverage1 1.5x

Total Debt/Total Capital 63%1 TTM Avg Total Debt/TTM EBITDA; See Appendix for EBITDA reconciliation

‘Financial capacity and strong cash flow provide broad flexibility’

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Competitive Advantages

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Strategic market reach and penetrationSales Center Networks

One-stop shoppingBroad Product Selection

Brand and margin leveragePrivate Label & Exclusive Products

Global reach, scale and flexibilitySourcing and Supply Chain

Flexibility to pursue investment and growthCapital Strength

Disciplined execution and ROI focusPerformance-based Culture

‘Combination of scale and execution discipline create a powerful business model’

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POOL Financial ModelFinancial Measurement 5 Year History 2020

ExpectationsLonger term

Outlook

Revenue Growth 5% - 9% -2.5% - +2% 6% - 8%

Gross Profit Margins 28.6% -29.0%

Stable Stable

Contribution Margin1 14% - 23% N/A Mid-teens %

Share Repurchases $25 - $185million Opportunistic $150 - $250

million

Earnings per Share Growth* 11% - 23% -10% - +1% Mid-teens %

‘Outlook remains positive following current downturn’

1 Incremental Operating Income Growth/Incremental Sales Growth* Excludes ASU 2016-09 and impairment effects

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Summaryo Strong balance sheet with low leverage,

substantial access to debt capitalo Essential business with high recurring revenueo Stay-at-home trends support demand for pool

and related productso Sustainable competitive advantages with highly

experienced teamo Consistent, exceptional investment performance

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Appendix

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Reconciliation of Reported Dilluted EPS to Adjusted Diluted EPSFYE

12/31/19FYE

12/31/18FYE

12/31/17Reported Diluted EPS before adjustments and effects of tax and accounting changes

$6.40 $5.62 $4.51

Less:

Per diluted share effect of application of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, standard

(0.57) (0.36) (0.24)

Adjusted Diluted EPS $5.83 $5.26 $4.27

Reconciliation of Net Income to Adjusted EBITDAFYE

12/31/19FYE

12/31/18FYE

12/31/17FYE

12/31/16FYE

12/31/15FYE

12/31/14

Net income ($ in thousands) $261,575 $234,461 $191,339 $148,603 $128,224 $111,030

Add:

Interest expense (1) 22,425 20,336 15,360 13,802 7,298 7,208

Provision for income taxes 56,161 58,774 77,982 92,931 80,137 70,559

Share-based compensation 13,472 12,874 12,482 9,902 9,543 9,065

Goodwill impairment - - - 613 - -

Equity (earnings) losses in unconsolidated investments, net of tax

(262) (242) (139) (156) (211) (204)

Depreciation 27,885 26,122 24,157 20,338 16,373 14,495

Amortization (2) 956 1,102 976 1,012 398 845

Adjusted EBITDA $382,212 $353,427 $322,157 $287,045 $241,762 $212,998 (1) Shown net of interest income, impact of foreign currency transactions and includes amortization of deferred financing costs(2) Excludes amortization of deferred financing costs