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
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o Installed base drives high non-discretionary, recurring revenue
o Highly fragmented, niche industry with favorable long-term growth dynamics
o Stay-at-home trends support demand for pool and related products
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
‘The undisputed leader in an industry with favorable dynamics’
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
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(1)As of March 31, 2020
North America Pool85%
Irrigation & Landscape9%
Europe/Australia6%
Value-Added Distribution
‘Value-add distribution and service to a fragmented marketplace’
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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
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’
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
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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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0
50
100
150
200
250
300
POOLS&P MidCap 400S&P 500
Inde
xed
Retu
rnExceptional Shareholder Returns
YE2019 value of $10,000 invested at POOL IPO in October 1995*
POOL $2,949,659
S&P MidCap 400 $132,182
S&P 500 $82,743
* Including dividend reinvestment
‘Creating exceptional value over the long-term’
POOLCORP Business Evolution
N. America Pool Maintenance
43%
Remodel/ Renovation
17%
Horizon13%
Int'l, 5%
New Pool Construction
22%
POOLCORP 2007
$1.9 Billion
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N. America Pool Maintenance
50%
Remodel/ Renovation
20% Horizon9%
Int'l, 6%
New Pool Construction
15%
POOLCORP 2020
$3.2 Billion
Non-discretionarySomewhat discretionaryDiscretionary
o Stronger financial position than in 2007o Lower proportion of ‘at risk’ business todayo Higher margin products are Non-Discretionary
‘Better positioned for an economic downturn’
Source: Company Financial Data
Financial Strength and Capacityo Low leverage with substantial
additional debt capacityo Low capital expenditure
requirementso Strong operating cash flow;
counter-cyclical in downturn environment
o Dividend increased and continued opportunistic share repurchases
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($ 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’
POOL Financial Model
Financial Measurement 5 Year History2020
Expectations(as of 4/23/20)
Longer 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 %
‘Strong start to Q2 2020; Longer term thesis remains on track’
1 Incremental Operating Income Growth/Incremental Sales Growth* Excludes ASU 2016-09 and impairment effects
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Summaryo Solid balance sheet, strong cash generationo High recurring revenue mitigates risko Sustainable competitive advantages with highly
experienced teamo Stay-at-home trends support demand for pool
and related productso 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