W.w. Grainger, Inc. · NYSE:GWW
W.w. Grainger — Q3 2024 Earnings Presentation
25 slides from W.w. Grainger's earnings presentation, Oct 31, 2024
Slide 1: Q3 2024 Earnings Call
NYSE: GWW Q3 2024 Earnings Call October 31, 2024
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 © 2024 W.W. Grainger, Inc. 3
Slide 4: The Grainger Edge embedded in everything we do
The Grainger Edge® embedded in everything we do Our Principles Start with the Win as One Team Our “We Keep the Customer World Working®” Purpose Invest in our Act with Intent Success We relentlessly expand our Embrace Compete with Our leadership position by being the go-to partner for people who Curi
Slide 5: Q3 2024 Highlights
Q3 2024 Highlights Strong execution fueling results +4.0% Sales $4.4B $4.1B (daily, organic constant currency) • Continued advancing strategic priorities across the business including breaking ground at new distribution center outside of Houston • Delivered another quarter of solid growth and profit
Slide 6: Q3 2024 Results
Q3 2024 Results Dee Merriwether SVP and CFO © 2024 W.W. Grainger, Inc. 6
Slide 7: Q3 2024 Results: Total Company
Q3 2024 Results: Total Company Summary Results Commentary vs. Prior Year ($ in millions) % vs. PY Q3 2024 Q3 2023 Sales increased 4.3%; up 2.6% on a daily basis Fav/(Unfav) • 4.0% sales growth on a daily, organic constant Sales $ 4,388 $ 4,208 4.3% currency basis Daily Sales 68.6 66.8 2.6% • Generat
Slide 8: Q3 2024 Results: High-Touch Solutions - N.A.
Q3 2024 Results: High-Touch Solutions - N.A. Summary Results Commentary vs. Prior Year ($ in millions) % vs. PY Q3 2024 Q3 2023 Sales increased 3.3%; up 1.7% on a daily basis Fav/(Unfav) • Increased 2.5% on a daily, organic constant currency Sales $ 3,515 $ 3,403 3.3% basis Daily Sales 54.9 54.0 1.7
Slide 9: Sales Outgrowth: High-Touch Solutions - U.S.
Sales Outgrowth: High-Touch Solutions - U.S. Delivered Q3’24 market outgrowth of ~50 bps reflecting market measurement dislocation Annual Trend Quarterly Trend 800 550 775 Impacted by heightened YTD volume pandemic sales; outgrowth (2) Target is to grow ~450 bps 525 2-year avg ~350 bps 400 to 500 bp
Slide 10: Q3 2024 Results: Endless Assortment
Q3 2024 Results: Endless Assortment Summary Results Commentary vs. Prior Year ($ in millions) % vs. PY Q3 2024 Q3 2023 Sales increased 8.1%; up 11.5% on a daily, Fav/(Unfav) constant currency basis Sales $ 791 $ 732 8.1% • Zoro growth of 11.3% on a daily basis Daily Sales 12.4 11.6 6.4% • MonotaRO r
Slide 11: Looking Ahead
Looking Ahead Dee Merriwether SVP and CFO © 2024 W.W. Grainger, Inc. 11
Slide 12: 2024 Full Year Guidance: Total Company
2024 Full Year Guidance: Total Company 2024 Y/Y change 2023A Guidance Narrowing (Updated October 31, 2024) 4.0% to 4.75% full year Sales ($ billions) $16.5 $17.1 – $17.3 (4.5% to 5.25% daily, organic constant currency sales) expectations Prior FY’24 Guidance $17.0 – $17.3 Gross Profit Margin 39.4% 3
Slide 13: Closing Remarks
Closing Remarks D.G. Macpherson Chairman and CEO © 2024 W.W. Grainger, Inc. 13
Slide 14: Q&A
Q&A © 2024 W.W. Grainger, Inc. 14
Slide 15: Appendix
Appendix © 2024 W.W. Grainger, Inc. 15
Slide 16: Q3 2024 Segment Highlights: High-Touch Solutions - N.A.
Appendix Q3 2024 Segment Highlights: High-Touch Solutions - N.A. HTS - U.S. HTS - Canada ($ millions) ($ millions) Sales Gross Profit Sales Gross Profit +2.0% Daily -1.1% -20 bps Daily +130 bps $3,175 $3,290 $151 $152 42.1% 41.9% 35.5% 34.2% Q3’23 Q3’24 Q3’23 Q3’24 Q3’23 Q3’24 Q3’23 Q3’24 Daily, con
Slide 17: Q3 2024 Segment Highlights: Endless Assortment
Q3 2024 Segment Highlights: Endless Assortment MonotaRO(1) Zoro - U.S. ($ millions) ($ millions) Sales Gross Profit Sales Gross Profit +3.5% +11.3% Daily -10 bps +380 bps Daily -20 bps 27.7% 27.6% 32.8% 32.6% Q3’23 Q3’24 Q3’23 Q3’24 $448 $471 41.4% $311 37.7% Op. Margin $276 Op. Margin +130 bps +120
Slide 18: Q3 2024 Sales Performance: High-Touch Solutions - U.S.
Q3 2024 Sales Performance: High-Touch Solutions - U.S. (1) (1) Large Customers Mid-sized Customers 10% 7% 7% 5% 5% 4% 3% 3% 2% 2% Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Note: FY’23 Large Customer daily sales growth was 9.4% Note: FY’23 Mid-size Customer daily sales growth was 10
Slide 19: Sales Growth By Customer End Market: HTS - U.S.
Sales Growth By Customer End Market: HTS - U.S. Q3’24 5 Quarter Trend Commercial Services UP Low-Single Digits Contractors UP Mid-Single Digits Government UP Low-Single Digits Healthcare UP Mid-Single Digits Manufacturing FLAT Retail UP Low-Single Digits Transportation DOWN Low-Double Digits Utiliti
Slide 20: Operating Metrics: Endless Assortment
Operating Metrics: Endless Assortment Total Registered Users Total Active SKUs (Zoro U.S.) (user count in (SKU count in thousands) millions) +12% 14.3 15,008 15,415 +11% 14,187 14,581 13.7 13,778 13.1 13.2 5,475 5,617 5,322 12.8 5,024 5,166 9,021 9,259 9,533 9,797 8,754 Q3’23 Q4’23 Q1’24 Q2’23 Q3’24
Slide 21: 2024 Full Year Supplemental Guidance
Appendix 2024 Full Year Supplemental Guidance Cash Flow Guidance Sales Growth Guidance ($ millions) 2023A 2024 Guidance 2024 Guidance (Updated Oct 31, 2024) (Updated Oct 31, 2024) Operating Cash Flow $2,031 $2,150 – $2,250 Prior FY’24 Guidance $1,950 – $2,150 Low High Capital Expenditures(1) $445 $4
Slide 22: 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 23: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Sales growth for the three months ended September 30, 2024 (percent change compared to the prior year period) (unaudited) Total Company - Monthly Detail High-Touch Solutions - N.A. - Daily Sales July August September Q3'24 HTS - N.A. HTS - U.S. HTS - Canada Reported
Slide 24: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Key metrics for the period ended September 30, 2024 and Operating margin for the twelve months ended December 31, 2023 (in millions, except for percentage data) (unaudited) Net Leverage Ratio As of Adjusted Return on Invested Capital (ROIC) Nine months ended Septembe
Slide 25: IR Contacts
IR Contacts Kyle Bland Vice President, Investor Relations Andrew Ansay Director, Investor Relations Abby Schill Sr. Manager, Investor Relations InvestorRelations@grainger.com © 2024 W.W. Grainger, Inc. 25