Grainger WW : Presentation EPG

W.W. Grainger, Inc.

The Electrical Products Group

May 22, 2019

Safe Harbor Statement and Non-GAAP Financial Measures

All statements in this communication, other than those relating to historical facts, are "forward-looking statements." Forward-looking statements can generally be identified by their use of terms such as "anticipate," "estimate," "believe," "expect," "could," "forecast," "may," "intend," "plan," "predict," "project" "will" or "would" and similar terms and phrases, including references to assumptions. Forward-looking statements are not guarantees of future performance and are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such statements. Forward-looking statements include, but are not limited to, statements about future strategic plans and future financial and operating results. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, among others: higher product costs or other expenses; a major loss of customers; loss or disruption of source of supply; increased competitive pricing pressures; failure to develop or implement new technology initiatives; the implementation, timing and results of our strategic pricing initiatives; the outcome of pending and future litigation or governmental or regulatory proceedings, including with respect to wage and hour, anti-bribery and corruption, environmental, advertising, privacy and cyber security matters; investigations, inquiries, audits and changes in laws and regulations; disruption of information technology or data security systems; general industry, economic, market or political conditions; general global economic conditions; currency exchange rate fluctuations; market volatility; commodity price volatility; labor shortages; facilities disruptions or shutdowns; higher fuel costs or disruptions in transportation services; natural and other catastrophes; unanticipated and/or extreme weather conditions; loss of key members of management; our ability to operate, integrate and leverage acquired businesses; changes in effective tax rates and other factors which can be found in our filings with the Securities and Exchange Commission, including our most recent periodic reports filed on Form 10-K and Form 10-Q, which are available on our Investor Relations website. Forward-looking statements are given only as of the date of this communication and we disclaim any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

Some of our comments today may be forward-looking statements. Actual results may differ materially as a result of various risks and uncertainties, including those detailed in our SEC filings.

2

Strategic Pillars

Business Models

High-Touch Solutions Model

Compelling value-added MRO solutions delivered to customers through teams of experts and curated digital experiences

Endless Assortment Model

Easy purchasing through a streamlined and

transparent online relationship that

provides access to everything a business

customer needs

Businesses

• U.S.
• Canada
• Mexico
• Cromwell
• Fabory
• Zoro
• MonotaRO

Pillars

• Advantaged MRO Solutions
• Differentiated Sales and Services
• Unparalleled Customer Service
• Expansive Product Assortment
• Innovative Customer Acquisition Capabilities

3

Positioned for Growth

	•	Reconfigured branch network
	•	Verticalized sales force
	•	Centralized call centers
U.S.	•	Restructured KeepStock
	•Added capacity to supply chain
	•	Enhanced website
	•	Improved cost structure
Canada	•	Completed restructuring
Other Businesses	•	Shed unprofitable businesses

4 4

The Market

Total U.S. B2B Supply Market - ~$1.2 Trillion

Site Size

Large

Medium

Small

~$40B

~$50B

~$40B

Graingerlargely focused on share gain within core MRO market with select opportunities to expand assortment

~$370B

~$700B

Zoroto aggressively expand assortment across most indirect categories

Grainger's ~$133B	Indirect categories or specialty	Direct spend products used
MRO market	products not carried by Grainger	for OEM / New Construction

5

U.S. High-Touch Solutions Value Proposition

Advantaged MRO

Solutions

Differentiated Sales

And Services

Unparalleled

Customer Service

• Broad assortment ofhigh-quality products
• Deep product expertise and customer knowledge
• Best-in-classdigital experience
• Help customers manage inventory and reduce costs
• Solve most pressing customer problems
• Offer technical support and other services
• Order origination to best suit customer needs
• High percentage of orders stocked, shipped complete and delivered quickly
• No-hassleinvoicing and returns processes

6

Growth Initiatives

Foundational		Incremental

Advantaged

MRO Solutions

• Curation of product/customer information	•	Increasing marketing investments
• Website improvements (search)	•	Merchandising - improve assortment and
• Marketing improvements (digital and mass		navigation
media)

7

Growth Initiatives

Foundational		Incremental

Advantaged

MRO Solutions

• Curation of product/customer information	•	Increasing marketing investments
• Website improvements (search)	•	Merchandising - improve assortment and
• Marketing improvements (digital and mass		navigation
media)

Differentiated

Sales and

Services

• CRM processes powered by customer and product information
• Industry strategies
• Seller effectiveness
• KeepStock

• Expanding services
• Selective salesforce additions
• Corporate accounts

8

Growth Initiatives

Foundational		Incremental

Advantaged

MRO Solutions

• Curation of product/customer information	•	Increasing marketing investments
• Website improvements (search)	•	Merchandising - improve assortment and
• Marketing improvements (digital and mass		navigation
media)

Differentiated

Sales and

Services

• CRM processes powered by customer and product information
• Industry strategies
• Seller effectiveness
• KeepStock

• Expanding services
• Selective salesforce additions
• Corporate accounts

Unparalleled

Customer

Service

• Seamless customer experience	• Louisville distribution center operational
• Stocked assortment/availability	in 2020 stocking 800,000 SKUs

• Fulfillment -same/next-day complete

9

Zoro

10