Global Industrial Company · NYSE:GIC
Global Industrial — Q3 2023 Earnings Presentation
25 slides from Global Industrial's earnings presentation, November 2023
Slide 1: 3Q 2023 Global Industrial
3Q 2023 GLOBAL INDUSTRIAL
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934).
Slide 3: At a Glance: Leading Player in Industrial Distribution SMB Market
AT A G L A N C E Leading Player in Industrial Distribution SMB Market Sales 2022 $1.17B 7 Distribution centers in U.S. and Canada Janitorial & Storage & Furniture & Safety & Carts & Trucks HVAC & Fans Facility Shelving Decor Security Maintenance Employees SMB Industrial Experts in 1,600+ (400+ Custo
Slide 4: Indoff: A Strong Strategic Fit
ACQUISITION Indoff: A Strong Strategic Fit • Core product alignment – Material handling, indoor and outdoor furniture, storage and shelving • Extends one-to-one sales model – • Closed May 2023 field based associates • 2022 Revenue ~$180 Million • Cross-sell opportunities • Purchase price $69.2 milli
Slide 5: Leading Player in Industrial Distribution
AGENDA Leading Player in Industrial Distribution 1 2 3 4 Business Powerful Strong Uniquely Foundation Customer Growth Financial Positioned Model Profile 5 |
Slide 6: The ACE Strategy Serves as the Foundation for our Growth Engine
The ACE Strategy (Accelerating the Customer Experience) Serves as the Foundation for our Growth Engine Accelerate customer growth by being an Indispensable Business Partner Digital & Leading Product Fulfillment Exceptional Multi-Channel Products & Knowledge & & Delivery Customer Sales Model Services
Slide 7: Building on a Broad Customer Base in Large Fragmented Market
Building on a Broad Customer Base in Large Fragmented Market Broad Customer Base Large SMB MRO Market… • Manufacturing ~$50B¹ • Retail / Wholesale Trade • Construction • Health Care • Professional, Scientific • Hospitality • Educational • Transportation & Warehousing • Public Administration >400,000
Slide 8: Robust Product Offering & Expertise Provides Multiple Growth Opportunities
Robust Product Offering & Expertise Provides Multiple Growth Opportunities: 10 Top Categories 1. Storage & 2. Material 3. Janitorial & Healthcare Shelving Handling Maintenance Recent product 4. Safety & 5. Furniture 6. HVAC 7. Workbench & line expansion Security & Decor & Fans Shop Desks Pneumatics
Slide 9: Private Label Brand - Made To Exceed
OUR BEST KEPT SECRET Private Label Brand - Made To ExceedTM 15-20% ~16% “Extra Chip” ~50% Premium CAGR over 5 in the cookie of Total Sales years is fastest margin vs. growing sourcing differentiation National Brands channel 9 |
Slide 10: Business Foundation has Generated a Strong Track Record of Growth and Margin Expansion
Business Foundation has Generated a Strong Track Record of Growth and Margin Expansion Revenue Operating Margin ($M) (%) 6.8% +210 CAGR bps 9.0% $1,166M $897M 6.9% 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 10 |
Slide 11: Leading Player in Industrial Distribution
AGENDA Leading Player in Industrial Distribution 1 2 3 4 Business Powerful Strong Uniquely Foundation Customer Growth Financial Positioned Model Profile 11 |
Slide 12: Evolving Industry Trends Play to Our Strengths
Evolving Industry Trends Play to Our Strengths Trends Affecting Industrial Well Positioned to Meet Distributors Industry Challenges E-commerce expansion: E-commerce adoption ~60% e-commerce accelerating transactions Amazon effect Sophisticated increasing customer digital & multi-channel expectations
Slide 13: What Sets Global Industrial Apart: Why We Win
What Sets Global Industrial Apart: Why We Win Thousands of Smaller Large National Differentiator Distributors Players Core focus on SMB customers Strong capabilities in big and bulky items Extensive private label brands Robust e-commerce functionality Powerful digital marketing funnel – asset light
Slide 14: Our Focus is the Large, Fragmented SMB MRO Market
Our Focus is the Large, Fragmented SMB MRO Market Our Focus • ~$50B market Large / Enterprise • Offering a one stop shop for MRO / Industrial Equipment & Supplies needs • Extending expert advice to reduce total cost of ownership SMB • Enabling a flawless online experience • Providing an efficient an
Slide 15: Outgrowing the Industry
AGENDA Outgrowing the Industry 1 2 3 4 Business Powerful Strong Uniquely Foundation Customer Growth Financial Positioned Model Profile 15 |
Slide 16: Powerful Customer Acquisition, Growth, & Retention Model
Powerful Customer Acquisition, Growth, & Retention Model 1 2 Build Customer Digital and GPO Customer Focused Culture Acquisition Funnel 5 3 Result: Growth in Customer Campaigns to Sales and Margins Retain and Build Loyalty 4 Groom to 1:1 Direct Sales Channel to Grow Share of Wallet and Category Expa
Slide 17: Customer Acquisition Led by Digital Channel
Customer Acquisition Led by Digital Channel, Supplemented via Emerging GPO & Enterprise Account Identification 3.5 million customer Attract sessions per month • Paid search advertising • Digital marketing LinkedIn YouTube Facebook Instagram 20,000 new customers per month Acquire • ~60%¹ of transacti
Slide 18: Go To Market Strategy: Expanding Channels and Opportunities
Go To Market Strategy: Expanding Channels and Opportunities One to One • ~200 Inside Sales Representative • Subject Matter Expertise Ecommerce • Full Account Management Tools • Primary Acquisition Funnel • EDI / Punchout / CXML Outside Sales • Indoff Project Management Group Purchasing • Engineering
Slide 19: Direct 1:1 Sales Builds Deep, Loyal Customer Relationships
RETAIN AND BUILD LOYALTY Direct 1:1 Sales Builds Deep, Loyal Customer Relationships Customer-Focused Approach Advantages 1:1 Direct Sales Channel Grows premium l es customers a a tS e Customers – Shift customers to ep loyal champions Private Label Profitability R ACE Model Expand categories Higher m
Slide 20: Outgrowing the Industry
AGENDA Outgrowing the Industry 1 2 3 4 Business Powerful Strong Uniquely Foundation Customer Growth Financial Positioned Model Profile 20 |
Slide 21: Capital Light, Strong Free Cash Flow Business
Capital Light, Strong Free Cash Flow Business Cash From Operations Strong Balance Sheet/ ($M) High WC Utilization (Q3 2023) ($M) $75 Debt $0.0M Cash and equivalents $34.3M $50 Inventory turns* 4.8X $25 AR DSO* ~37 AP DPO* ~51 $0 2019 2020 2021 2022 21 | *Working Capital Metrics based upon 3Q 2023 Re
Slide 22: Capital Allocation Priorities
Capital Allocation Priorities 1 Invest for Growth 2 Strategic M&A 3 Return Capital to Shareholders • E-commerce • Acquisitions that • Continued dividend capabilities fit strategy growth over time • Customer Acquisition • Synergistic, leverage • Special dividends private label, • Product selection •
Slide 23: Strong Return of Capital to Shareholders
Strong Return of Capital to Shareholders Quarterly Dividends Per Share Dividends • $600+ million in dividends since Jan. 2018 including 6 special 12% $0.20 dividends CAGR $0.18 • Current payout ratio ~37% $0.16 $0.14 $0.12 $0.11 $0.10 Share Repurchases • 500,000 shares repurchased since 2019 under c
Slide 24: Financial Roadmap
GOING FORWARD Financial Roadmap1 Revenue Drive Optimize Growth Profitability Performance ~500 bps Operating Maximize Total Faster Growth Income Growth Shareholder Than Market Return Annually 1 Organic and M&A 24 |
Slide 25: 3Q 2023 Global Industrial
3Q 2023 GLOBAL INDUSTRIAL 25
Global Industrial Company — Q3 2023 Earnings Presentation on 6ix