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W.W. GRAINGER, INC.

(GWW)
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W W Grainger : 2021 Fact Book

03/31/2021 | 10:48pm EDT

Fact Book 2021

CONTENTS

2 About Us

3 Business Models

5 High-Touch Solutions

8 Endless Assortment

10 2020 Year in Review

11 Creating Shareholder Value

11 Safe Harbor Statement

12 Historical Financial Summary

13 Financial Definitions and Non-GAAP

Reconciliation/Company Information

About Us

  1. Grainger, Inc. is a broad line, business-to-business distributor of maintenance, repair, and operating (MRO) supplies and other related products and services. More than 5 million customers worldwide rely on Grainger for products in categories such as safety, material handling, and metalworking, along with services like inventory management and technical support. These customers represent a broad collection
    of industries, including commercial, government, healthcare, and manufacturing and place orders online, on mobile devices, through sales representatives, over the phone, and at local branches. More than 4,500 suppliers provide Grainger with 1.5 million products stocked in the company's distribution centers (DCs) and branches worldwide. Additionally, Grainger's Endless Assortment businesses offer approximately 26 million products through the Company's expanding drop-ship assortment. Grainger employs approximately 23,000 team members across the globe. For more information on Grainger, visit invest.grainger.com.

The Grainger EdgeSM

The Grainger Edge is our strategic framework that uniquely defines the company by asserting why we exist, how we serve our customers, and how our team members work together to achieve our objectives. Grainger's purpose is to keep the world working, which in turn allows our customers to focus on the core of their businesses and what they do best. This framework also outlines a set of principles that define the behaviors expected from all team members in working with each other, customers, supplier partners and communities as we execute our strategy and create value for shareholders.

2020 Financial Summary

Our

Purpose

Our

Aspiration

Our

Strategy

We Keep the World WorkingSM

We relentlessly expand our leadership position by being the go-to partner for people who build and run safe, sustainable, and productive operations.

High-Touch Solutions Model

  • Advantaged MRO solutions
  • Differentiated sales and services
  • Unparalleled customer service

Endless Assortment Model

  • Expansive product assortment
  • Innovative customer acquisition and retention capabilities

Our Principles

Start

with the

customer

Do the

Embrace

right

curiosity

thing

Invest

Act with

in our

success

intent

Win as

Compete

with

one team

urgency

In 2021, Grainger announced the re-sementation of its business into two reportable segments - High-Touch Solutions (N.A.) and Endless Assortment. Grainger operates with a continuous improvement mindset focused on driving growth while maintaining a prudent cost structure, which in turn creates high-return and strategic investments.

High-Touch Solutions N.A.

Endless Assortment

Other 1

Total

Company

Revenue

$9.2 B

$2.2 B

$0.4 B

$

11.8 B

Daily Sales Growth %2

1.7%

18.2%

(35.5)%

2.3% / 3.6%3

Adjusted Operating Margin %2

13.0%

8.0%

(11.9)%

11.2%

Adjusted ROIC2

29.6%

32.1%

-

28.2%

  1. Includes Cromwell as well as the divested Fabory and China businesses in periods prior to their divestitures.
  2. Reconciliations of the measures referenced in the table above to the most directly comparable GAAP measures are provided on page 13 of this Fact Book.
  3. 3.6% is total company, organic daily sales growth and excludes results for Fabory (post June 30, 2020) and Grainger China (post August 21, 2020) in the prior year period to reflect the completed divestitures.

2020 Sales Customer Category

16%

Government

15%

Heavy Manufacturing

10%

Light Manufacturing

8%

Retail/Wholesale

7%

Commercial

7%

Contractor

7%

Healthcare

5%

Transportation

3%

Natural Resources

22%

Other4

2020 Sales Product Category

19%

Safety and Security

9%

Cleaning and

Maintenance

9%

Material Handling

8%

Pumps, Plumbing,

and Test Equipment

7%

Metalworking

5%

Hand Tools

5%

HVAC

4% Electrical

3% Power Tools

3% Fluid Power

3% Lighting

3% Specialty Brands

2% Power Transmission

1% Motors

19% Other

4Other category primarily includes revenue from individual customers not aligned to major industry segment, including small businesses and consumers, and intersegment net sales.

W.W. GRAINGER, INC. AND SUBSIDIARIES 2

Business Models

Both Grainger businesses are focused on creating value for their individual customers, using their superior customer value propositions. The company's strategy has always been defined by its customers' needs, and Grainger uses its High-Touch Solutions and Endless Assortment models to serve customers of all sizes.

HIGH-TOUCH SOLUTIONS

ENDLESS ASSORTMENT

  • Typically, larger businesses
  • Multifaceted purchasing and processing complexities
  • Expert product and service depth and breadth
  • Focused on total cost of ownership

Advantaged MRO Solutions

  • MRO-focusedassortment
  • Deep product and customer expertise
  • Superior digital platform

Differentiated Sales and Service

  • Sales and on-site services deliver expertise and help customers manage inventory

Unparalleled Customer Service

  • Focus on quick and complete orders
  • No-hassleinvoicing and returns

Leveraging industry-leading position and capabilities to gain share profitably.

CUSTOMER

PROFILE "WHO"

CUSTOMER

VALUE

PROPOSITION

"WHAT"

  • Typically, smaller businesses
  • Easier-to-navigateprocurement process
  • Straight-forwardproduct and service needs
  • Focused on streamlined, transparent pricing

Expansive Product Assortment

  • Extended product range covering broad business categories
  • Competitive pricing

Innovative Customer Experience

  • Efficient, business-focusede-commerce platform
  • Intelligent analytics capabilities
  • Advantaged fulfillment

Continue executing strategic playbook

to drive 20% annual growth.

5

5

Expand

1

Attract New

1

Operating

Suppliers

Develop

Leverage

Expand

Advantaged

Product

MRO Solutions

Assortment

4

Gain

Share

Drive Sustained

Growth and

Profitability

4

Improve

2Profitability

Deliver Great

Customer

Experience

Drive Sustained

Growth and

Profitability

2

Increase

Web Traffic

3

3

Deepen Customer

Generate Repeat

Relationships

Customers

BEST-IN-CLASS SUPPLY CHAIN | STRONG FINANCIAL POSITION | STRONG CULTURE AND ESG LEADERSHIP | DEEP INDUSTRY AND FUNCTIONAL KNOW-HOW

W.W. GRAINGER, INC. AND SUBSIDIARIES 3

Business Models

Each business model differentiates itself through different methods of relationship building, order origination, and order fulfillment, but both are founded and supported by Grainger's overall commitment to best-in-class supply chain, deep industry knowledge, solid financials, and strong culture.

MODEL/VALUE PROPOSITION

HIGH-TOUCH SOLUTIONS 1

ENDLESS ASSORTMENT

Customized services and curated product offering for complex customer needs

Expansive assortment at competitive prices

RELATIONSHIPS

Sales and Service Representatives

Digital

®

®

Sales and service representatives and digital solutions drive relationships with purchasers and end users

Primarily Digital

Digital solutions and marketing

to build relationships

ORDER

ORIGINATION

Digital Channels

Website

KeepStock

EDI/ePro

32% of

15% of

28% of

orders

orders

orders

®

Highly curated product

Inventory management

Embedded in large

information and search

system

customer purchasing process

Phone

Branch

19% of

6% of

®

orders

orders

Strong technical knowledge across a wide range of product lines helps customers through the purchasing process over the phone or at the branch

Website

Streamlined search and transactional experience

Direct-to-Customer (DTC)

Distribution Center

73% of orders

®

15% of orders

shipped direct-

delivered through

to-customer (DTC)

KeepStock

ORDER

FULFILLMENT

Branch

12% of orders

®

picked up

at branch

KeepStock

®

Distribution Center

Third Party Partners

Stocked assortment of quality industrial

MRO products with high availability

Expansive assortment across all business-to-business

categories at competitive prices

1 Order origination and fulfillment data provided is for the U.S. High-Touch solutions business only.

W.W. GRAINGER, INC. AND SUBSIDIARIES 4

High-Touch Solutions

The High-TouchSolutions model serves customers with complex buying needs, primarily in North America. This model helps Grainger create powerful customer-tailored solutions, deliver a great customer experience, and develop deep customer relationships-whether onsite, at a branch, over the phone, or online. Grainger creates value for customers through its sales and service representatives, technical product support, fulfillment capabilities, inventory management solutions, and other services. In this business in the U.S., Grainger is focused on driving 300-400 basis points of outgrowth versus the market by focusing on the following strategic activities: building advantaged MRO solutions, delivering unparalleled customer service, and offering differentiated sales and services.

Advantaged MRO Solutions

MRO-focused assortment

Grainger's scale, knowledge of the marketplace, and deep supplier relationships help the company cultivate an MRO-focused product assortment. Over the last two years, Grainger has worked to remerchandise its product assortment, and through year-end 2020, over $2.8 billion in product revenue has been reviewed. Grainger continues to add to its assortment in a selective manner so customers can quickly and confidently find the solution for their needs.

Deep product and customer expertise

Grainger knows its customers and products better than anyone else. This expertise allows the company to help customers find the right products, services, and solutions to address their problems quickly. Combining this insight with analytics, we develop relevant marketing content and offers to acquire new customers and grow with existing customers.

Superior digital platform

In this ever-connected world, customers crave highly tailored solutions that provide real-time access to information followed by quick delivery of products, which allows them to effectively and efficiently manage their businesses. In 2020, 65% of Grainger's revenue came from online channels and the company was ranked as the 11th largest e-retailer in North America, according to Internet Retailer.1 Through Grainger.com, eProcurement connections, KeepStock solutions, and mobile applications, the company continues to develop online capabilities that promote a personalized, relevant, effortless experience for each customer.

1 Internet Retailer ranking is based on 2019 revenue.

W.W. GRAINGER, INC. AND SUBSIDIARIES 5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

W.W. Grainger Inc. published this content on 01 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 April 2021 02:47:02 UTC.


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Financials (USD)
Sales 2021 12 849 M - -
Net income 2021 1 046 M - -
Net Debt 2021 1 848 M - -
P/E ratio 2021 23,5x
Yield 2021 1,36%
Capitalization 24 339 M 24 339 M -
EV / Sales 2021 2,04x
EV / Sales 2022 1,90x
Nbr of Employees 22 450
Free-Float 41,1%
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Technical analysis trends W.W. GRAINGER, INC.
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TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 22
Average target price 443,94 $
Last Close Price 467,06 $
Spread / Highest target 11,3%
Spread / Average Target -4,95%
Spread / Lowest Target -28,7%
EPS Revisions
Managers and Directors
NameTitle
Donald G. Macpherson Chairman & Chief Executive Officer
Deidra Cheeks Merriwether Chief Financial Officer & Senior Vice President
Jonny LeRoy Chief Technology Officer
Brian P. Anderson Lead Independent Director
Neil S. Novich Independent Director
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