40 slides from W.w. Grainger's earnings presentation, Jan 31, 2025
Slide 1: Q4 2024 Earnings Call
Updated Version as of 2/7/25 (Appendix Slide 36 Revised) NYSE: GWW Q4 2024 Earnings Call January 31, 2025
Slide 2: Safe Harbor Statement and Non-GAAP Financial Measures
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,” “expe
Slide 3: Opening Remarks
Opening Remarks D.G. Macpherson Chairman and CEO © 2025 W.W. Grainger, Inc. 3
Slide 4: Focused execution driving strategy forward
Focused execution driving strategy forward 2024 HIGHLIGHTS ✓ Leveraged HTS - N.A. proprietary data assets to further competitive advantage – Advanced strategic growth engines forward, driving share gain and improved customer experiences – Utilized proprietary data assets to pilot new AI / ML capabil
Slide 5: Investing in foundational competencies to advance best-in-class MRO offering
Investing in foundational competencies to advance best-in-class MRO offering RECALL …delivered through our best-in-class offer MRO customers have two basic needs… Relevant, value-add capabilities Provide a flawless experience Broad, stocked assortment • Have what I need • Make it easy to find No has
Slide 6: Proprietary data advantage fueling HTS growth engines
Propriety data advantage fueling HTS growth engines Seller Customer Merchandising Marketing Seller Coverage Effectiveness Solutions ✓ Completed first pass ✓ Increased investment at ✓ Added one new ✓ Rolled out seller ✓ Implementing home- through full assortment continued strong ROAS geography in 202
Slide 7: Data advantage also propelling AI / ML opportunities
Data advantage also propelling AI / ML opportunities New technology driving opportunity to... In-flight initiatives ✓ Search optimization Increase revenue ✓ Product recommendations ✓ Fraud detection PIM ✓ KeepStock install tool Save cost & improve efficiency ✓ Inventory optimization model CIM ✓ Sell
Slide 8: Long run-way to drive significant value across the business
EXAMPLES Long run-way to drive significant value across the business KeepStock Install Tool Inventory Optimization Model Call Center Assistant COMPUTER VISION MACHINE LEARNING GENERATIVE AI Streamlining KeepStock install Scaling customer service agents with Optimizing SKU breadth and depth by proces
Slide 9: Endless Assortment continues driving flywheel
Endless Assortment continues driving flywheel, delivering value to B2B customers and supplier partners 2024 HIGHLIGHTS ✓ Added over 1.4M new products to Zoro ✓ Increased registered users by +12% across the segment ✓ Grew enterprise customer revenue at MonotaRO by +29% ✓ Leveraged enhanced data and a
Slide 10: Investing in our world-class supply chain
Investing in our world-class supply chain 2024 INVESTMENTS Purpose-built B2B supply chain capabilities Northwest DC Houston DC Stocking strategy Network Footprint Access to the right products The right buildings in the and stocked in the right right location location Stocking Strategy ✓ Building Siz
Slide 11: The Grainger Edge helping build a highly-engaged team
The Grainger Edge® helping build a highly-engaged team RECOGNITION & CULTURE Our We Keep The Purpose World Working® Our Principles Start with the Customer Win as One Team Embrace Curiosity Invest in our Success Act with Intent Compete with Urgency Do the Right Thing © 2025 W.W. Grainger, Inc. 11
Slide 12: Delivered solid full-year 2024 financial results
Delivered solid full-year 2024 financial results Executed well amidst a muted demand environment +4.7% Sales $17.2B $4.1B (daily, organic constant currency) • Delivered reported sales growth of 4.2% (4.7% in daily, organic constant currency) – Outgrew total U.S. MRO market by ~100 bps in HTS - U.S.
Slide 13: Q4 2024 Results
Q4 2024 Results Dee Merriwether SVP and CFO © 2025 W.W. Grainger, Inc. 13
Slide 14: Q4 2024 Results: Total Company
Q4 2024 Results: Total Company Summary Results (Adjusted) Commentary vs. Prior Year ($ in millions) % vs. PY Q4 2024 Q4 2023 Sales increased 5.9%; up 4.2% on a daily basis Fav/(Unfav) • 4.7% sales growth on a daily, organic constant Sales $ 4,233 $ 3,997 5.9% currency basis Daily Sales 66.1 63.5 4.2
Slide 15: Q4 2024 Results: High-Touch Solutions - N.A.
Q4 2024 Results: High-Touch Solutions - N.A. Summary Results (Adjusted) Commentary vs. Prior Year ($ in millions) % vs. PY Q4 2024 Q4 2023 Sales increased 4.0%; up 2.3% on a daily basis Fav/(Unfav) • Increased 3.0% on a daily, organic constant currency Sales $ 3,342 $ 3,215 4.0% basis Daily Sales 52
Slide 16: MRO Market Outgrowth: High-Touch Solutions - U.S.
MRO Market Outgrowth: High-Touch Looking ahead Solutions – U.S. Will simplify market outgrowth Delivered FY’24 total MRO market outgrowth of ~100 bps (including ~100 bps in measurement to focus on the Q4’24), reflecting continued market measurement dislocation volume component going forward ... FY’2
Slide 17: Volume Outgrowth: High-Touch Solutions - U.S.
Volume Outgrowth: High-Touch Solutions - U.S. When removing price component, delivered FY 2024 volume outgrowth of ~325 basis points (2) (2) Annual Trend Quarterly Trend (Volume outgrowth) (Volume outgrowth) 925 Targeting to outgrow U.S. MRO market volume by 525 600 600 400 to 500 bps on 475 average
Slide 18: Q4 2024 Results: Endless Assortment
Q4 2024 Results: Endless Assortment Summary Results Commentary vs. Prior Year ($ in millions) % vs. PY Q4 2024 Q4 2023 Sales increased 15.1%; up 13.2% on a daily, Fav/(Unfav) constant currency basis Sales $ 816 $ 709 15.1% • Zoro growth of 13.9% on a daily basis Daily Sales 12.8 11.3 13.3% • MonotaR
Slide 19: Looking Ahead
Looking Ahead Dee Merriwether SVP and CFO © 2025 W.W. Grainger, Inc. 19
Slide 20: Solid revenue growth expected across both segments
Solid revenue growth expected across both segments 2.5 – 4.5% 11.0 – 15.0% $17.6 - 18.1B (1) ((1)(2) High-Touch Solutions - N.A. Endless Assortment Total Company 2025 daily, constant currency sales growth 2025 daily, constant currency sales growth 2025 net sales vs. 2024 vs. 2024 Key assumptions Key
Slide 21: Anticipate operating margin will stay generally stable
Anticipate operating margin will stay generally stable 17.0 – 17.4% 8.5 – 9.0% 15.1 – 15.5% High-Touch Solutions N.A. Endless Assortment Total Company 2025 operating margin; down 50 bps to 2025 operating margin; up 20 bps to up 70 2025 operating margin down 10 bps vs. 2024 bps vs. 2024 Key assumptio
Slide 22: Expect robust cash flow to support disciplined capital allocation
Expect robust cash flow to support disciplined capital allocation $2.05 – 2.25B 2025 Capital Allocation Priorities Total Company 1 Invest in the business 2 Return excess cash to shareholders 2025 operating cash flow Organic Inorganic Share Executing consistent, return- Dividends Investments Opportun
Slide 23: 2025 Full Year Guidance: Total Company
2025 Full Year Guidance: Total Company Expect 2024A 2025 Y/Y change Guidance continued solid (as of Jan 31, 2025) results while Sales ($ billions) $17.2 $17.6 – $18.1 2.7% to 5.2% (4.0% to 6.5% daily, constant currency sales(1)) investing for the future Gross Profit Margin 39.4% 39.1% – 39.4% (30) b
Slide 24: Long-term earnings framework remains intact
BEYOND 2025 Long-term earnings framework remains intact Focused execution Attractive total return potential Strong Generally Grow SG&A top-line stable gross slower than Double-digit growth profit margins sales (2) Adj. EPS (2)(3) • Targeting 400 - 500bps of Stability around ~39% • Anticipate product
Slide 25: Closing Remarks
Closing Remarks D.G. Macpherson Chairman and CEO © 2025 W.W. Grainger, Inc. 25
Slide 26: Q&A
Q&A © 2025 W.W. Grainger, Inc. 26
Slide 27: Appendix
Appendix © 2025 W.W. Grainger, Inc. 27
Slide 28: FY 2024 Results: Total Company
FY 2024 Results: Total Company Summary Results (Adjusted) Commentary vs. Prior Year ($ in millions) % vs. PY FY 2024 FY 2023 Sales increased 4.2%; up 3.4% on a daily basis Fav/(Unfav) Sales $ 17,168 $ 16,478 4.2% • 4.7% sales growth on a daily, organic constant currency basis Daily Sales 67.1 64.9 3
Slide 29: Q4 2024 Segment Highlights: High-Touch Solutions - N.A.
Appendix Q4 2024 Segment Highlights: High-Touch Solutions - N.A. HTS - U.S. HTS - Canada ($ millions) ($ millions) Sales Gross Profit Sales Gross Profit +2.6% +80 bps +0.9% Daily Daily +110bps $3,000 $3,126 42.6% $153 34.3% 35.4% 41.8% $149 Q4’23 Q4’24 Q4’23 Q4’24 Q4’23 Q4’24 Q4’23 Q4’24 Daily, cons
Slide 30: Q4 2024 Segment Highlights: Endless Assortment
Q4 2024 Segment Highlights: Endless Assortment (1) MonotaRO Zoro - U.S. ($ millions) ($ millions) Sales Gross Profit Sales Gross Profit +12.5% +13.9% +10 bps Daily -10 bps +380 bps Daily 27.7% 27.6% 32.8% 32.9% Q4’23 Q4’24 Q4’23 Q4’24 $501 41.4% $306 $438 37.7% Op. Margin Op. Margin $264 +90 bps +14
Slide 31: Q4 2024 Sales Performance: High-Touch Solutions - U.S.
Q4 2024 Sales Performance: High-Touch Solutions - U.S. (1) (1) Large Customers Mid-sized Customers FY’24: +2.8% FY’24: +3.2% 7% 5% 5% 4% 3% 3% 3% 2% 2% 1% Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Note: FY’23 Large Customer daily sales growth was 9.4% Note: FY’23 Mid-size Customer
Slide 32: Sales Growth By Customer End Market: HTS - U.S.
Sales Growth By Customer End Market: HTS - U.S. Q4’24 5 Quarter Trend Commercial Services DOWN Low-Single Digits Contractors UP Low-Single Digits Government UP High-Single Digits Healthcare UP Low-Double Digits Manufacturing DOWN Low-Single Digits Retail DOWN Low-Single Digits Transportation DOWN Hi
Slide 33: Operating Metrics: Endless Assortment
Operating Metrics: Endless Assortment Total Registered Users Total Active SKUs (Zoro U.S.) (user count in (SKU count in thousands) millions) +12% 14.6 +11% 14.3 15,415 15,829 14,581 15,009 14,187 13.7 13.1 13.2 5,617 5,736 5,322 5,475 5,166 9,259 9,533 9,797 10,093 9,021 Q4’23 Q1’24 Q2’24 Q3’24 Q4’2
Slide 34: 2025 Full Year Supplemental Guidance
Appendix 2025 Full Year Supplemental Guidance Cash Flow Guidance Sales Growth Guidance 2025 Guidance Total Company 2025 Guidance ($ millions) 2024A (as of Jan 31, 2025) (as of Jan 31, 2025) Low High Daily, Constant Currency Sales 4.0% 6.5% Operating Cash Flow $2,111 $2,050 – $2,250 Daily Impact (3)
Slide 35: Definitions & Calculations
Definitions & Calculations Basis of presentation: The Company has a controlling ownership interest in MonotaRO, which is part of our Endless Assortment segment. MonotaRO’s results are fully consolidated, reflected in U.S. GAAP, and reported one-month in arrears. Results will differ from MonotaRO’s e
Slide 36: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Sales growth for the three and twelve months ended December 31, 2024 (percent change compared to the prior year period) (unaudited) Total Company - Monthly Detail High-Touch Solutions - N.A. - Daily Sales HTS - N.A. HTS - U.S. HTS - Canada October November December Q
Slide 37: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Income statement adjustments for the three months ended December 31, 2024 and December 31, 2023 (in millions, except for percentage data) (unaudited) Total Company results included adjusting items which impacted U.S. GAAP as follows: Q4 2024 Reported Adjusted(2) Q4 2
Slide 38: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Income statement adjustments for the twelve months ended December 31, 2024 and December 31, 2023 (in millions, except for percentage data) (unaudited) Total Company results included adjusting items which impacted U.S. GAAP as follows: FY 2024 Reported Adjusted(3) FY
Slide 39: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Key metrics for the period ended December 31, 2024 (in millions, except for percentage data) (unaudited) Net Leverage Ratio As of Adjusted Return on Invested Capital (ROIC) Twelve months ended December 31, 2024 December 31, 2024 Total debt $ 2,778 Reported operating
Slide 40: IR Contacts
IR Contacts Kyle Bland Vice President, Investor Relations Andrew Ansay Director, Investor Relations InvestorRelations@grainger.com © 2025 W.W. Grainger, Inc. 40