Wesco International, Inc. · NYSE:WCC
Wesco International — Q4 2024 Earnings Presentation
29 slides from Wesco International's earnings presentation, Feb 11, 2025
Slide 1: Fourth Quarter 2024 Webcast Presentation
NYSE: WCC Fourth Quarter 2024 Webcast Presentation February 11, 2025
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures All statements made herein that are not historical facts should be considered as "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties an
Slide 3: 2024 Results and 2025 Outlook
2024 Results and 2025 Outlook Return to growth in Q4 • Improved sales momentum in October and November with greater than expected sales slowdown in December • Wesco Data Center Solutions up more than 70% versus prior year, broadband up 20%, Electrical and Electronic Solutions returned to growth • Gr
Slide 4: Fourth Quarter YOY Results
Fourth Quarter YOY Results Returned to growth in Q4 despite mixed and multi-speed economy Net Sales1 $ millions $5,473 $5,500 • Reported sales flat, organic sales up 2% • Divestiture of Integrated Supply and differences in foreign exchange rates partially offset by higher number of workdays • Estima
Slide 5: Full Year 2024 YOY Results
Full Year 2024 YOY Results Solid year against mixed and multi-speed economy Net Sales1 $ millions $22,385 $21,819 • Reported sales down 3%, organic sales down 1% • Divestiture of Integrated Supply and differences in foreign exchange rates partially offset by higher number of workdays • Estimated gro
Slide 6: Gross Margin Flat as EES and UBS Increases Offset by CSS
Gross Margin Flat as EES and UBS Increases Offset by CSS Lower CSS gross margin driven by business and project mix FY 24 Gross Margin % FY 24 Gross Margin YOY (bps) Total Company Strategic Business Units 100 bps +80 bps 21.6% 21.6% 50 bps +10 bps 0 bps (50) bps FY 23 FY 24 (130) bps (100) bps (150)
Slide 7: Electrical & Electronic Solutions (EES)
Electrical & Electronic Solutions (EES) Improved business momentum drove a return to profitable growth in Q4 $ millions / margin % Fourth Quarter Q4 2024 Q4 2023 YOY • Organic sales up 1%, reported sales up 2% Sales $2,124 $2,084 1%1 – Construction up LSD due to increased project sales Adjusted EBIT
Slide 8: Communications & Security Solutions (CSS)
Communications & Security Solutions (CSS) Accelerating Wesco Data Center Solutions sales drove double-digit growth in CSS in Q4 $ millions / margin % Fourth Quarter Q4 2024 Q4 2023 YOY • Organic sales up 11% YOY, reported sales up 14% Sales $2,046 $1,791 11%1 – Wesco Data Center Solutions sales up m
Slide 9: AI-Driven Data Centers Driving Strong Growth
AI-Driven Data Centers Driving Strong Growth 3-5 Years Time to Power 1-2 Year Construction Period Land acquisition Transmission lines Generator sets to Transformers Civil Mechanical, Electrical Commissioning Wesco Data Center Solutions YOY Growth in 2024 with access to to a substation for enable bac
Slide 10: Ascent Acquisition
Ascent Acquisition A premier provider of data center facility management services Transaction Overview • Acquired Ascent LLC, on December 6, 2024, for $185 million or ~1.5x TTM sales • Provides data center operators with specialized facility and property management services • More than 330 employees
Slide 11: Utility & Broadband Solutions (UBS)
Utility & Broadband Solutions (UBS) Strong broadband growth partially offset expected utility demand softness in Q4 $ millions / margin % Fourth Quarter • Organic sales down 6% YOY, reported sales down 17% due to WIS divestiture Q4 2024 Q4 2023 YOY – Utility sales down HSD due to continued customer
Slide 12: Record Free Cash Flow
Record Free Cash Flow >$1B of free cash flow in 2024; progress on reducing net working capital intensity FY 2024 $ millions $95 $330 Net Working Capital1 $1,045 % of FY Sales $201 $51 $18 154% of 21.4% $678 Adjusted 160 basis point Net Income improvement 19.8% Adjusted D&A Accounts Inventory Account
Slide 13: 2025 Strategic Business Unit Sales Growth Drivers
2025 Strategic Business Unit Sales Growth Drivers Expect organic growth of 2.5% to 6.5%; reported growth to be flat to up 4% % of Wesco 2025 SBU Sales 2024 2025 2024 Sales Outlook Breakdown 1 Actual Outlook (Reported Sales Growth) (Reported Sales Growth) Construction Electrical & Electronic Solution
Slide 14: 2025 Outlook
2025 Outlook 2025 Outlook Organic sales growth 2.5% - 6.5% Estimated Fx impact (1.5)% Sales M&A and Workday impact (1)% Reported sales growth 0% - 4% Reported sales $21.8 – $22.7 billion Adjusted EBITDA Adjusted EBITDA margin 6.7% - 7.2% Adjusted EPS Adjusted diluted EPS $12.00 – $14.50 Cash Free ca
Slide 15: First Quarter Outlook
First Quarter Outlook Sales momentum improved in Q4 and continued in January 2025 YOY Organic Sales Trends 20% Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 +11% +3% +3% (3)% (3)% (1)% (1)% +2% Q1 Outlook vs. Prior Year Organic Sales Up LSD to MSD Reported Sales ~Flat 0% EBITDA % Down slightly (10
Slide 16: 2024 Results and 2025 Outlook
2024 Results and 2025 Outlook Return to growth in Q4 • Improved sales momentum in October and November with greater than expected sales slowdown in December • Wesco Data Center Solutions up more than 70% versus prior year, broadband up 20%, Electrical and Electronic Solutions returned to growth • Gr
Slide 17: Appendix
APPENDIX
Slide 18: Glossary
Glossary 1H: First half of fiscal year MTDC: Multi-tenant data center 2H: Second half of fiscal year PF: Pro Forma A/V: Audio/visual PY: Prior Year B2B: Business-to-Business OEM: Original equipment manufacturer COGS: Cost of goods sold OPEX: Operating expenses CIG: Commercial, Institutional and Gove
Slide 19: Workdays
Workdays Q1 Q2 Q3 Q4 FY 2023 63 64 63 62 252 2024 63 64 64 63 254 2025 62 64 64 63 253 2026 62 64 64 63 253 19
Slide 20: Organic Sales Growth
Organic Sales Growth $ millions Three Months Ended Growth/(Decline) December 31, December 31, Reported Acquisitions/ Foreign Organic 2024 2023 Sales Divestiture Exchange Workday Sales EES $ 2,123.7 $ 2,084.2 1.9% — % (0.7) % 1.6 % 1.0 % CSS 2,045.9 1,791.3 14.2% 1.8 % (0.5) % 1.6 % 11.3 % UBS 1,330.
Slide 21: Gross Profit and Free Cash Flow
Gross Profit and Free Cash Flow $ millions Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, Gross Profit: 2024 2023 2024 2023 Net sales $ 5,499.7 $ 5,473.4 $ 21,818.8 $ 22,385.2 Cost of goods sold (excluding depreciation and amortization) 4,335.7 4,302.7 17,
Slide 22: Business Unit Gross Profit and Gross Margin
Business Unit Gross Profit and Gross Margin Electrical & Electronic Solutions (EES) Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, Gross Profit: 2024 2023 2024 2023 Net Sales $ 2,123.7 $ 2,084.2 $ 8,546.8 $ 8,610.3 Cost of goods sold (excluding depreciatio
Slide 23: Adjusted EBITDA – 4Q 2024
Adjusted EBITDA – 4Q 2024 $ millions Three Months Ended December 31, 2024 EBITDA and Adjusted EBITDA by Segment: EES CSS UBS Corporate Total Net income attributable to common stockholders $ 161.0 $ 127.8 $ 135.3 $ (273.1) $ 151.0 Net income attributable to noncontrolling interests 0.2 0.4 — (0.1) 0.
Slide 24: Adjusted EBITDA – 4Q 2023
Adjusted EBITDA – 4Q 2023 $ millions Three Months Ended December 31, 2023 EBITDA and Adjusted EBITDA by Segment: EES CSS UBS Corporate Total Net income attributable to common stockholders $ 152.4 $ 117.4 $ 160.4 $ (302.6) $ 127.6 Net income (loss) attributable to noncontrolling interests 0.3 0.6 — (
Slide 25: Adjusted EBITDA – FY 2024
Adjusted EBITDA – FY 2024 $ millions Year Ended December 31, 2024 EBITDA and Adjusted EBITDA by Segment: EES CSS UBS Corporate Total Net income attributable to common stockholders $ 656.9 $ 480.9 $ 733.0 $ (1,210.6) $ 660.2 Net (loss) income attributable to noncontrolling interests (1.1) 2.3 — 0.6 1
Slide 26: Adjusted EBITDA – FY 2023
Adjusted EBITDA – FY 2023 $ millions Year Ended December 31, 2023 EBITDA and Adjusted EBITDA by Segment: EES CSS UBS Corporate Total Net income attributable to common stockholders $ 668.7 $ 531.1 $ 712.5 $ (1,204.2) $ 708.1 Net (loss) income attributable to noncontrolling interests (0.5) 1.6 — (0.5)
Slide 27: Adjusted SG&A and Income from Operations
Adjusted SG&A and Income from Operations $ millions Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, (1) Digital transformation costs include costs associated with certain digital Adjusted SG&A Expenses: 2024 2023 2024 2023 transformation initiatives. Sellin
Slide 28: Adjusted Earnings Per Diluted Share
Adjusted Earnings Per Diluted Share $ millions Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, Adjusted Earnings per Diluted Share: 2024 2023 2024 2023 Adjusted income from operations $ 311.2 $ 327.5 $ 1,282.9 $ 1,480.1 Interest expense, net 85.1 97.0 364.9
Slide 29: Financial Leverage
Financial Leverage Twelve months ended $ millions December 31, December 31, Financial Leverage: 2024 2023 (1) Merger-related and integration costs include integration and professional fees Net income attributable to common stockholders $ 660.2 $ 708.1 associated with the integration of Wesco and Ani