On this page of StockholderLetter.com we present the 4/7/2023 shareholder letter from Hayward Holdings, Inc. — ticker symbol HAYW. Reading current and past HAYW letters to shareholders can bring important insights into the investment thesis.
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WE MAKE BACKYARDS BETTER. As doors around the world open again, one place remains an essential refuge: the backyard. At Hayward, we ve always been about perfecting pool and outdoor living a mission we remain committed to pursuing. We re moving toward an exciting future that s as good for the environment as it is for the pool owner. No matter what tomorrow brings, we ll still be hard at work building our better one backyard at a time.
We took many proactive steps during the year to strengthen Hayward s position as a leading global designer and manufacturer of pool and outdoor living technology. % 8 c { F 2022 was an important year for Hayward and I am extremely proud of the way our team continued to support our valued customers and execute our strategic plans in a very dynamic operating environment. We took many proactive steps during the year to strengthen Hayward s position as a leading global designer and manufacturer of pool and outdoor living technology. We expect our accomplishments to continue to drive the Company s strong financial metrics and provide a solid foundation for future growth and stockholder value creation. Technology leadership is central to our growth strategy and we are very proud of our recent industry-leading innovations in critical product categories on the pool pad like Controls, Variable Speed Pumps and Water Sanitization. We continue to prioritize investment in new product development to further strengthen our competitive positioning and support our customers with connected products within our Omni automation eco-system. The market is responding favorably to these innovations as we continue to gain traction with the addition of new dealers to our Totally Hayward loyalty program. B { F a We estimate that sell-through of Hayward products into the core U.S. market increased 11% in 2022 to a record level, whereas total net sales reduced by 6% as our channel partners rebalanced the level of inventory on hand. Importantly, the large installed base of pools continues to grow and provide the opportunity for increasing aftermarket sales of our products for years to come. HAYWARD | 2022 ANNUAL REPORT % k ) Hayward has a long-standing commitment to lean manufacturing and continuous improvement and we view operational excellence as a significant competitive advantage. We demonstrated our agile manufacturing capabilities throughout the year, continuing to ramp up production in the first half to deliver on a record backlog, then reducing production in the second half to support structural margins.
k We took proactive and responsible actions during the year to streamline the organization and optimize our cost structure while maintaining our strategic growth investments and productivity initiatives. These actions include successfully executing an enterprise cost reduction program designed to drive substantial variable manufacturing cost savings, plus expected structural selling, general and administrative savings of $25 million to $30 million, or approximately 10%, in 2023. In 2022 we acquired specialty pool and landscape lighting businesses J&J Electronics and Sollos , and successfully integrated the previously completed acquisitions of Water Works, SmartPower and Valve Technologies. These important additions expand our offerings for our Omni connected technologies and IoT-enabled SmartPad , allowing pool users to control LED lighting, pumps, heaters, water sanitization, pool cleaners and other devices, optimize energy efficiency, and enhance the enjoyment of their pools. Strong free cash flow generation also supported the opportunistic return of cash to stockholders, and we deployed $343 million to repurchase 23 million shares in 2022. Entering 2023, we had $400 million remaining on the $450 million 3-year share repurchase authorization. inventories in partnership with a third-party expert and were recognized as an ENERGY STAR 2022 Partner of the Year. These results and other reporting metrics were included in our first standalone disclosure, the Hayward ESG Data Sheet, which was published on our website during the third quarter. X e { In 2023 we will continue to drive our mission of delivering exceptional products, outstanding service and innovative technology to transform the experience of water. We are confident in our ability to successfully execute our growth strategy and drive exceptional financial returns. Our business is well positioned to navigate the near-term challenges and deliver value for all stakeholders in the years ahead. Thank you for your continued interest and investment in Hayward. I look forward to continuing our journey together in 2023 and beyond. Regards, KEVIN P. P HOLLERAN PRESIDENT AND CHIEF EXECUTIVE OFFICER, MEMBER OF THE BOARD OF DIRECTORS At Hayward, our vision to inspire happiness and well-being through safe, smart and sustainable solutions drives everything we do, including our impact on the world. We recognize it is more important than ever to champion sustainability and to act on our Environmental, Social and Governance (ESG) opportunities. In 2022, we sharpened our focus and created a structured ESG framework represented by four pillars: Products, Planet, People and Principles. These four pillars outline how we operate responsibly for our business and our stakeholders, all while continuing to innovate and develop products that better the world. In addition to setting our ESG framework, we completed our first Scopes 1 and 2 emissions 2022 ANNUAL REPORT | HAYWARD
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HAYW 4/7/2023 Shareholder/Stockholder Letter Transcript:

         e                      
              k                           F              


WE MAKE
BACKYARDS
BETTER.
As doors around the world open again, one place
remains an essential refuge: the backyard. At
Hayward, we   ve always been about perfecting
pool and outdoor living    a mission we remain
committed to pursuing. We   re moving toward an
exciting future that   s as good for the environment
as it is for the pool owner. No matter what
tomorrow brings, we   ll still be hard at work
building our better   one backyard at a time.

We took many proactive steps
during the year to strengthen
Hayward   s position as a
leading global designer and
manufacturer of pool and
outdoor living technology.
%       8                                     
c     {             F                  
2022 was an important year for Hayward and I am
extremely proud of the way our team continued
to support our valued customers and execute
our strategic plans in a very dynamic operating
environment. We took many proactive steps
during the year to strengthen Hayward   s position
as a leading global designer and manufacturer
of pool and outdoor living technology. We expect
our accomplishments to continue to drive
the Company   s strong financial metrics and
provide a solid foundation for future growth and
stockholder value creation.
Technology leadership is central to our growth
strategy and we are very proud of our recent
industry-leading innovations in critical product
categories on the pool pad like Controls,
Variable Speed Pumps and Water Sanitization.
We continue to prioritize investment in new
product development to further strengthen
our competitive positioning and support our
customers with connected products within our
Omni   automation eco-system. The market is
responding favorably to these innovations as we
continue to gain traction with the addition of new
dealers to our Totally Hayward loyalty program.
                            B             {            
F              a                    
We estimate that sell-through of Hayward
products into the core U.S. market increased
11% in 2022 to a record level, whereas total net
sales reduced by 6% as our channel partners
rebalanced the level of inventory on hand.
Importantly, the large installed base of pools
continues to grow and provide the opportunity
for increasing aftermarket sales of our
products for years to come.
HAYWARD | 2022 ANNUAL REPORT
%                       k                     )                  
Hayward has a long-standing commitment to lean
manufacturing and continuous improvement and
we view operational excellence as a significant
competitive advantage. We demonstrated our
agile manufacturing capabilities throughout the
year, continuing to ramp up production in the
first half to deliver on a record backlog, then
reducing production in the second half to support
structural margins.

                           k                      
We took proactive and responsible actions during
the year to streamline the organization and
optimize our cost structure while maintaining our
strategic growth investments and productivity
initiatives. These actions include successfully
executing an enterprise cost reduction
program designed to drive substantial variable
manufacturing cost savings, plus expected
structural selling, general and administrative
savings of $25 million to $30 million, or
approximately 10%, in 2023.
In 2022 we acquired specialty pool and landscape
lighting businesses J&J Electronics    and
Sollos  , and successfully integrated the
previously completed acquisitions of Water Works,
SmartPower    and Valve Technologies. These
important additions expand our offerings for our
Omni   connected technologies and IoT-enabled
SmartPad   , allowing pool users to control LED
lighting, pumps, heaters, water sanitization,
pool cleaners and other devices, optimize energy
efficiency, and enhance the enjoyment of their
pools. Strong free cash flow generation also
supported the opportunistic return of cash to
stockholders, and we deployed $343 million to
repurchase 23 million shares in 2022. Entering
2023, we had $400 million remaining on the $450
million 3-year share repurchase authorization.

inventories in partnership with a third-party
expert and were recognized as an ENERGY STAR  
2022 Partner of the Year. These results and other
reporting metrics were included in our first
standalone disclosure, the Hayward ESG Data
Sheet, which was published on our website during
the third quarter.
X             e                  {             
In 2023 we will continue to drive our mission
of delivering exceptional products, outstanding
service and innovative technology to transform
the experience of water. We are confident in
our ability to successfully execute our growth
strategy and drive exceptional financial returns.
Our business is well positioned to navigate the
near-term challenges and deliver value for all
stakeholders in the years ahead.
Thank you for your continued interest and
investment in Hayward. I look forward to
continuing our journey together in 2023
and beyond.
Regards,
KEVIN P.
P HOLLERAN
PRESIDENT AND CHIEF EXECUTIVE OFFICER,
MEMBER OF THE BOARD OF DIRECTORS
At Hayward, our vision     to inspire happiness and
well-being through safe, smart and sustainable
solutions     drives everything we do, including
our impact on the world. We recognize it is more
important than ever to champion sustainability
and to act on our Environmental, Social and
Governance (ESG) opportunities. In 2022, we
sharpened our focus and created a structured
ESG framework represented by four pillars:
Products, Planet, People and Principles. These
four pillars outline how we operate responsibly
for our business and our stakeholders, all while
continuing to innovate and develop products that
better the world.
In addition to setting our ESG framework, we
completed our first Scopes 1 and 2 emissions
2022 ANNUAL REPORT | HAYWARD


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