NYSE: GWW
Investor Presentation
Updated February 2024
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 presented or implied in the forward-looking statements include, without limitation: inflation, higher product costs or other expenses, including operational and administrative expenses; the impact of macroeconomic pressures and geopolitical trends, changes and events; a major loss of customers; loss or disruption of sources of supply; changes in customer or product mix; increased competitive pricing pressures; changes in third party practices regarding digital advertising; failure to enter into or sustain contractual arrangements on a satisfactory basis with group purchasing organizations; failure to develop, manage or implement new technology initiatives or business strategies, including with respect to Grainger's eCommerce platforms; failure to adequately protect intellectual property or successfully defend against infringement claims; fluctuations or declines in Grainger's gross profit margin; Grainger's responses to market pressures; the outcome of pending and future litigation or governmental or regulatory proceedings, including with respect to wage and hour, anti-bribery and corruption, environmental, regulations related to advertising, marketing and the Internet, consumer protection, pricing (including disaster or emergency declaration pricing statutes), product liability, compliance or safety, trade and export compliance, general commercial disputes, or privacy and cybersecurity matters; investigations, inquiries, audits and changes in laws and regulations; failure to comply with laws, regulations and standards, including new or stricter environmental laws or regulations; government contract matters; the impact of any government shutdown; disruption or breaches of information technology or data security systems involving Grainger or third parties on which Grainger depends; general industry, economic, market or political conditions; general global economic conditions including tariffs and trade issues and policies; currency exchange rate fluctuations; market volatility, including price and trading volume volatility or price declines of Grainger's common stock; commodity price volatility; facilities disruptions or shutdowns; higher fuel costs or disruptions in transportation services; outbreaks of pandemic disease or viral contagions; natural or human induced disasters, extreme weather and other catastrophes or conditions; effects of climate change; failure to execute on our efforts and programs related to environmental, social and governance matters; competition for, or failure to attract, retain, train, motivate and develop executives and key employees; loss of key members of management or key employees; loss of operational flexibility and potential for work stoppages or slowdowns if employees unionize or join a collective bargaining arrangement; changes in effective tax rates; changes in credit ratings or outlook; Grainger's incurrence of indebtedness or failure to comply with restrictions and obligations under its debt agreements and instruments; and other factors that 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.
Additional information relating to certain non-GAAP financial measures referred to in this presentation is available in the appendix to this presentation, including: adjusted return on invested capital; adjusted gross profit, adjusted operating earnings, adjusted EBITDA; adjusted SG&A; daily sales; daily, organic daily sales; constant currency sales; daily, organic constant currency sales; constant currency sales in local days; daily, organic constant currency sales in local days; net leverage ratio; and free cash flow. This communication also includes certain non-GAAPforward-looking information (including, but not limited to slides 25-26 & 33 - 35). The Company believes that a quantitative reconciliation of such forward-looking information to the most comparable financial measure calculated and presented in accordance with GAAP cannot be made available without unreasonable efforts. A reconciliation of these non-GAAP financial measures would require the Company to predict the timing and likelihood of future restructurings, asset impairments, and other charges. Neither these forward-looking measures, nor their probable significance, can be quantified with a reasonable degree of accuracy. Accordingly, the most directly comparable forward-looking GAAP measures are not provided. Forward-lookingnon-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
© 2024 W.W. Grainger, Inc. | 2 |
© 2024 W.W. Grainger, Inc. | 3 |
A leading broad line distributor of MRO products and services determined to Keep the World Working® through innovative technology solutions and deep customer relationships
1927 | Largest 52 years | |
Company | MRO distributor in | of consecutive dividend |
founded | North America | increases |
1.8%
Other
17.7% | 80.5% |
Endless | |
High-Touch | |
Assortment | |
Solutions - N.A. | |
$16.5B
Total Company
FY 2023
>4.5M
Active
customers
>26K
Team members
>30M
Products offered
globally
34
Distribution
centers
Note: All metrics are for the year ended December 31, 2023, unless otherwise noted.
© 2024 W.W. Grainger, Inc. | 4 |
MRO customers have two basic needs …
Customers looking for a partner that can deliver
- but these needs show up differently across customers
Large customers with | Small customers with |
high complexity | low complexity |
Flawless experience
Tangible value
Have what I need
Make it easy to find
Get it to me fast, accurately
Make it easy for me to receive, pay, return
Know my business
Simplify my purchasing process Provide tangible cost savings Help me reduce my inventory
E.g., a global manufacturer looking for a multi-channel,end-to-end MRO partner
E.g., a local job shop looking for a one-stop, online platform
© 20242 W.W. Grainger, Inc. | 5 |
Our two go-to- market models
serve these varied
customers needs
HIGH-TOUCH SOLUTIONS N.A.
CUSTOMER TYPE
Large to mid-size customers with highly complex operations/processes
SEGMENT VALUE PROPOSITION
Compelling value-added MRO solutions delivered through our team of specialists and curated digital experiences
PRIMARY GEOGRAPHIES
North America
INVESTOR DAY THEME
ENDLESS ASSORTMENT
CUSTOMER TYPE
Smaller customers with less complex operations/processes
SEGMENT VALUE PROPOSITION
Business purchasing made easy through a streamlined and transparent online relationship that provides access to everything a customer needs
PRIMARY GEOGRAPHIES
Japan, USA
© 20242 W.W. Grainger, Inc. | 6 |
Each segment has a unique delivery model …
High-Touch Solutions N.A.
Endless Assortment
Relationships | Representatives | Digital | Nearly 4,000 sales | ||||
representatives coupled with | |||||||
digital solutions driving deep | |||||||
Sales & Service | customer relationships | ||||||
Digital Channels | Physical Channels | ||||||
Origination | 36% of orders | 23% of orders | 18% of orders | 15% of orders | 8% of orders | ||
Website | EDI/ePro | KeepStock | Phone | Branch | |||
Curated product | Integrated software | Vending and | Strong technical knowledge | ||||
information and | in customer's | inventory | across a wide range of | ||||
search | purchasing process | management | product categories | ||||
Fulfilment | Direct-to-Customer | Physical Pickup | |||||
69% of | 18% of | 13% of | |||||
orders | orders | orders | |||||
Footprint | Distribution Centers (DCs) | KeepStock | Branch Network | ||||
• 21 DCs | • | 5 DCs | • | 2 DCs | • 1 DC | ||
United States | (1) | Canada | Mexico | Puerto Rico | |||
• 311 Branches | • | 32 Branches | • | 16 Branches | • 3 Branches |
Note: All metrics are for the year ended December 31, 2023, unless otherwise noted.
(1) Branch count includes branches, on-site, and will-call express locations.
Origination Relationships
Footprint Fulfilment
Primarily
Digital
Website
Distribution
Centers
+
3rd Party
Partners
- >22M available SKU's
- 4 DC's
MonotaRO Background
- Started in 2000 as a JV between Grainger and Sumitomo
- GWW owns ~51% stake
- Publicly traded in Japan (TSE: 3041); Market Cap ~$5.4B
Digital solutions and
marketing to build strong relationships
Streamlined search
and transactional
experience
Expansive assortment across all business-to- business categories at competitive prices
- >13M available SKU's
- Leverages High-Touch Solutions - U.S distribution centers
© 2024 W.W. Grainger, Inc. | 7 |
- connecting a broad assortment of MRO products to a diversified customer base
Total Company Product Assortment
Total Company Customer End-Markets(1)
Safety & Security
Material Handling & Storage
Pumps, Plumbing, & Test Equip.
Cleaning & Maintenance
Metalworking & Supplies
HVAC / R
Electrical
Hand Tools
6%
5%
5%
16%
10%
9%
8%
8%
Manufacturing
Government
Wholesale
Commercial Services
Contractors
Healthcare
30%
16%
9%
8%
6%
6%
Power Tools
4%
Percent of
Retail
4%
Percent of
Specialty Brands
Lighting
Fluid Power
Power Transmission
Motors
Custom Products/Other
4%
3%
3%
2%
1%
2023 Sales
16%
Transportation
Utilities
Warehouseing
Other(2)
2023 Sales
4%
3%
3%
11%
Note: All metrics are for the year ended December 31, 2023, unless otherwise noted.
- Customer end market results reflect the Company's current end market classification system implemented January 1, 2023. The new customer end market definitions primarily follows the
North American Industry Classification System (NAICS) and will be used on a go forward basis. | © 2024 W.W. Grainger, Inc. | 8 |
- Includes industries that are not material individually, including hospitality, restaurants, property management and natural resources.
Investment
Highlights
© 2024 W.W. Grainger, Inc. | 9 |
Attractive investment thesis
1 | 2 | 3 |
Industry leader in large | Powerful customer value | Advantaged supply |
and highly attractive | proposition, fueled by | chain furthering |
market with opportunity | data and technology | competitive position |
to capture share |
4 | 5 |
Strong financial position | Purpose-driven culture |
supporting growth and | supporting performance |
disciplined return of | and commitment to |
capital | ESG principles |
© 2024 W.W. Grainger, Inc. | 10 |
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Disclaimer
W.W. Grainger Inc. published this content on 29 February 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 March 2024 12:05:47 UTC.