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WESCO
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The information contained herein is confidential in nature and considered proprietary to WESCO Distribution, Inc. It is intended for the exclusive use of the employees, contractors and agents of client companies. We request that no oral or written disclosure of such information be made without the prior written approval by WESCO Distribution, Inc.
WESCOWESCO
Richard Heyse, Vice President & Chief Financial OfficerWESCO Distribution, Inc.
2 WESCO Confidential—Do not copy or distribute without express permission from WESCO Distribution, Inc.
Safe Harbor Statement
Note: All statements made herein that are not historical facts should be considered as “forward-
looking statements” within the meaning of the Private Securities Litigation Act of 1995. Such
statements involve known and unknown risks, uncertainties and other factors that may cause actual
results to differ materially. Such risks, uncertainties and other factors include, but are not limited to,
debt level, changes in general economic conditions, fluctuations in interest rates, increases in raw
materials and labor costs, levels of competition and other factors described in detail in Form 10-K for
WESCO International, Inc. for the year ended December 31, 2008 and any subsequent filings with the
Securities & Exchange Commission. Any numerical or other representations in this presentation do not
represent guidance by management and should not be construed as such.
3 WESCO Confidential—Do not copy or distribute without express permission from WESCO Distribution, Inc.
WESCO Profile
• Fortune 500 Company headquartered in Pittsburgh, PA
• Over 6,300 employees including 2,300 sales personnel
• 380 Locations
• Consistent strategy of market share growth:− Local market penetration with national
programs− Accretive acquisitions− Operational excellence and LEAN
• Leading Provider of:
− National Account Programs
− Integrated Supply Services
− OEM Direct Materials and Services
− Electric Utility Distribution Grid Solutions
• Industry-leading cost structure
• International operations and global sourcing capabilities
…an industry leader
Extra-Effort CompanyExtra-Effort Company Market LeaderMarket Leader
4 WESCO Confidential—Do not copy or distribute without express permission from WESCO Distribution, Inc.
WESCO Evolution
…from captive distributor to global supply chain company
• LBO in 1994 by management and Clayton, Dublier & Rice
• ~$1.5 Billion in sales
• ~175 Branches in U.S. and Canada
• ~85% non-residential construction
• Limited supply relationships other than Westinghouse
• Sales grew to $3.7B
• 25 acquisitions− Expanded
geographic footprint
− Diversified end-markets and supplier base
• Launched National Accounts Program
• Launched Integrated Supply
• Leveraged recapitalization 1998
• IPO 1999
• Severe industry downturn
• High financial leverage
• Suspended acquisition program
• Strong free cash flow generation
• Invested in sales and marketing programs
• Launched LEAN
• 11 quarters of double digit sales growth
• Sales grew to $6.1B• Invested in sales
capacity expansion• Restarted acquisition
program − 7 acquisitions
with $1.1 B sales− Product category
expansion• Improved capital
structure• Expanded marketing
programs• Expanded LEAN
• Significant cost reduction actions taken
• Record free cash flow generation
• Strengthened capital structure
• Accelerating LEAN and extending to customers
• International expansion
• Investing in attractive growth verticals and geographies
Captive Distribution Arm of Westinghouse
Captive Distribution Arm of Westinghouse
Recessionand Recovery
Recessionand Recovery
GrowthAccelerates
GrowthAccelerates
SevereRecession
SevereRecession
Growth StrategyDeployed
Growth StrategyDeployed
1922-1994 1994-2001 2001-2003 2004-2008 2008-2009
5 WESCO Confidential—Do not copy or distribute without express permission from WESCO Distribution, Inc.
Market Opportunity
• Thousands of electrical and industrial product manufacturers
• Over 10,000 electrical and industrial distributors
• Top five distributors have 26% share of electrical distribution industry in U.S.
• 75+% of electrical products get to market through distribution
• Continuing industry consolidation
…large, fragmented market with trends favorable to WESCO
Large, Fragmented MarketLarge, Fragmented Market Value of DistributionValue of Distribution
$600B Construction,
MRO, and OEM Markets
• Procurement
• Warehousing
• Logistics Management
• Scale
• Global sourcing
• Value-creating solutions
• Enhanced interdependence
• Sales
• Marketing
• Delivery
• Service
MRO
Market Trends Benefit WESCO
SUPPLIERS CUSTOMERS
6 WESCO Confidential—Do not copy or distribute without express permission from WESCO Distribution, Inc.
WESCO – A Total Supply Chain Solutions Provider
…beyond electrical and traditional distribution
TODAY TOMORROW
Market-Focused Branches
One WESCO
National Accounts Global Accounts
LEAN and Integrated Supply
CompleteSupply Chain
North AmericanCentric
Global
Providing Broad Solutions toLarge & Sophisticated Customers
• Extensive products and services
• Broad geographic coverage
• Deep penetration into customer processes
• Difficult to disintermediate
7 WESCO Confidential—Do not copy or distribute without express permission from WESCO Distribution, Inc.
Industrial
• National Accounts• OEM• Integrated Supply• General Industry
WESCO Market Mix and Product Portfolio
• 115,000 active customers
• Majority of Fortune 500 companies are our customers
• 1,000,000 different products shipped annually, with 250,000 in stock
• 19,000 suppliers
…diverse market, customer base, product lines, and suppliers
CIG
• Government • Education • Healthcare
Utility
• Investor Owned• Public Power• Utility
Contractors
Construction
• Non-Residential • Data Communications• Pre-Fabricated
Structures• Residential
Markets and CustomersMarkets and Customers Products and SuppliersProducts and Suppliers
39% 16%
6%
39% 34%34%
20%20%13%13%
12%
11%
10%
Wire, Cable & Conduit
GeneralSupplies
Distribution Equipment
Data Communication
Lighting & Controls
Controls & Motors
Note: Percentages based on 2008 Sales
8 WESCO Confidential—Do not copy or distribute without express permission from WESCO Distribution, Inc.
WESCO’s LEAN Journey
…continuous improvement culture founded on LEAN
2003 and beyond2003 and beyond Customer FocusCustomer Focus
• 2003 launch• Initial focus on sales and warehousing• Centralized LEAN team• 3,300+ Kaizen events• Enterprise-wide results• Leader in applying LEAN to supply chain• A competitive differentiator
LEAN: The process of continuously eliminating
waste across the business and value chain
Solution Categories
Safety and Security
Maintenance and Production Support
Green and Sustainability
9 WESCO Confidential—Do not copy or distribute without express permission from WESCO Distribution, Inc.
WESCO Today vs. Last Downturn
2009 YTD 2001-2003 Average
Industrial 40% Industrial 42%
Better End Market Diversification Construction 25% Construction 37%
(Seven Accretive Acquisitions Utility 16% Utility 15%
from 2005-2008) Data Communications 13% CIG 6%
CIG 6%
Liquidity (millions) $439 $176
Free Cash Flow (millions) $280 $48
Free Cash Flow per Share (millions) $6 $1
Improved Operating Margins 4.0% 2.5%
LEAN Continuous Improvement Launched Spring 2003 N/A
Experienced Management Team Improved Good
Solid Capital Structure 3.7x Leverage 7.2x Leverage
…bigger, more diversified and more profitable with a stronger capital structure
Note: Percentages based on 2008 Sales
10 WESCO Confidential—Do not copy or distribute without express permission from WESCO Distribution, Inc.
WESCO Growth Strategy & Financial Objectives
• Target sales and marketing initiatives on attractive verticals
• Sell complete set of products to all customers and service all their locations
• Expand product and service portfolio and capabilities
• Expand internationally
1. Grow faster than the market plus acquisitions
2. Maintain industry-leading cost position
3. Expand operating profit
4. Provide superior return on invested capital
5. Generate strong operating cash flow through the cycle
…focused on shareholder value creation
Growth StrategyGrowth Strategy Long Term Financial ObjectivesLong Term Financial Objectives
Products & Suppliers
Markets & Customers Geography
11 WESCO Confidential—Do not copy or distribute without express permission from WESCO Distribution, Inc.
WESCO Growth Engines
…aggressively targeting attractive opportunities during the downturn
• Fortune 1000 focus
• Sell all WESCO products and services
• Capture new customers and expand with current customers
• Maintain 100% National Account renewal rate
National Accounts and Integrated Supply
• Electrical plus data communications
• National Accounts model
• Construction project management
• LEAN applications to construction life cycle
EPCs andNational Contractors
• Migrate from National to Global accounts
• Invest and take share in Canada
• Expand global footprint (China, Dubai, Australia)
• Broaden geographic reach in Mexico
International
• Aligned WESCO government resources into one team
• Expanded government sales resources
• Dedicated stimulus team established
Government
• Expand scope of supply and value proposition to Investor Owned Utilities
• Grow share in Public Power
• Grow high voltage business serving transmission, substation and alternative energy markets
Utility
• Leverage WESCO National Accounts position and geographic footprint
• Data centers (data plus electrical products)
• Targeted marketing initiatives (secure networking, security, etc.)
DataCommunications
• Invest and take share in lighting
• Marketing and sales initiatives focused on lighting solutions
• Dedicated region resources coupled with a focused set of lighting branches
Lighting
• Use LEAN Value Creation toolset as a differentiator
• Target major metropolitan markets with a density of healthcare institutions
• Expand agreementswith Group Purchasing Organizations and Integrated Delivery Networks
Healthcare and Education
12 WESCO Confidential—Do not copy or distribute without express permission from WESCO Distribution, Inc.
Invest in WESCO
• Market leader with low business risk profile
• Organic sales growth faster than market
• Proven business model uniquely positioned in large, fragmented market
• Operational excellence culture focused on LEAN
• Solid ROIC performance and excellent cash conversion results
• Proven acquirer in a consolidating industry
…strong company, excellent value creation opportunity