Wesco International, Inc. · NYSE:WCC
Wesco International — Investor Day (September 2022)
112 slides from Wesco International's investor day presentation, Sep 7, 2022
Slide 1: Wesco International Investor Day September 7, 2022
© 2022 Wesco International 1 Wesco International Investor Day September 7, 2022
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements 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 and other factors that m
Slide 3: Today's Agenda
3 Today’s Agenda 10:00 – 11:05 Accelerating Our Value Creation Engine John Engel – Chairman, President and Chief Executive Officer Providing End-to-End Supply Chain Solutions Communications & Security Solutions (CSS) Bill Geary – Executive Vice President and General Manager, CSS Utility & Broadband
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Slide 5: Accelerating Our Value Creation Engine
John Engel Chairman, President and Chief Executive Officer Accelerating Our Value Creation Engine
Slide 6: Our Mission, Vision and Values
6 Our Mission We build, connect, power and protect the world. Our Vision Be the best tech-enabled supply chain solutions provider in the world. Our Core5 Values Our people are our greatest asset. One team. Always strive to be the best. Innovation. Winning with customers and suppliers. Extend our lea
Slide 7: Key Messages
7 Key Messages • Transformational combination of Wesco + Anixter exceeding expectations • Broadest portfolio in the industry and largest channel partner for our key suppliers • Step function increase in cash generation and enterprise value creation • Leading player in a consolidating industry • Secu
Slide 8: Experienced Management Team
8 John Engel Chairman, President and Chief Executive Officer Akash Khurana EVP and Chief Information and Digital Officer Hemant Porwal EVP, Supply Chain and Operations Nelson Squires EVP and GM EES Kim Warne Senior Vice President and Chief Marketing Officer Experienced Management Team Jim Cameron EV
Slide 9: Wesco Overview
U.S. 73% Canada 15% ROW 12% 9 Sales By Business Unit Sales By Geography Leading global provider of business-to-business distribution, logistics services and supply chain solutions Leading value proposition consisting of 1.5 million products, an expanding portfolio of services, and complete supply ch
Slide 10: Value Creation Engine
Value Creation Engine Five Components of Our Growth Compounding Enterprise Wesco Value Creation Engine Positioned In the Right End-Markets • Three leading global business units • Exposure to attractive secular trends • Increasing infrastructure investments 1 Driving Market Outperformance • Leading p
Slide 11: Value Creation of the New Wesco
• Mix-shifted into higher-growth, higher margin end-markets • Created three balanced SBUs with diverse end-market exposure • Positioned the combined enterprise to accelerate growth driven by: ‒ Secular growth trends + global supply chain trends ‒ Infrastructure investment needs ‒ Share gains and con
Slide 12: Secular Growth Trends
a • Leading Portfolio of Products, Services, and Solutions • Leading Positions in All Business Units • Global Footprint and Capabilities • Digital Investments and Unlocking the Value of Our Big Data • Accelerating Consolidation Across the Value Chain Electrification Automation and IoT Green Energy a
Slide 13: Cross-Sell Synergies Driving Market Outperformance
13 $170M Initial Target (June 2020) Target Increase (August 2022) Cumulative Cross-Sell Synergy Target Through 2023 $1.2B Revised target Network Infrastructure and Security Cross-Sell Driving Market Outperformance Wire and Cable Solutions Cross Sell Driven By: • Minimal overlap between legacy custom
Slide 14: Our Digital Transformation
Digitally transforming our company Our Digital Transformation Innovating Across Our Entire Technology Landscape 14 Digital Transformation Well Underway • New technology stack and digital IT architecture • Not a monolithic ERP implementation • Best in class digital applications, products and services
Slide 15: Transformational Combination of Wesco + Anixter
$383 $415 $903 $855 $1,176 $1,684 2017 2018 2019 2020 2021 2022E Target 15 • Leading Scale • Secular Trends • Cross Sell • Share Gains • Margin Improvement • Cost Synergies • Lean Practices • Agile Development • Digital Transformation • M&A Transformational Combination of Wesco + Anixter Wesco + Ani
Slide 16: Upsized Cash Generation Drives Strategy and Enriches Shareholders
16 Upsized Cash Generation Drives Strategy and Enriches Shareholders 1 ~$1.50 annualized cash dividend rate; subject to Board approval in early 2023 Invest for Above Market Growth. Organic growth opportunities M&A to further accelerate growth $1 billion share repurchase authorization Initiate common
Slide 17: Why Invest in the New Wesco
The new Wesco is focused on delivering superior results and achieving a premium multiple 17 Why Invest in the New Wesco • Fortune 200 B2B Supply Chain Solutions Leader ‒ Global capabilities and leading scale ‒ Higher growth and higher margin end-markets ‒ Cross-sell combined with attractive long-ter
Slide 18: Communications & Security Solutions
Bill Geary Executive Vice President and General Manager, CSS Communications & Security Solutions
Slide 19: CSS Overview
70% 8% 22% U.S. ROW Canada CSS Overview 19 Sales By End-Market Sales By Geography50+ Countries 53% 32% 15% Network Infrastructure S e c u r i t y Deliver comprehensive solutions that provide 24/7/365 connectivity Enable security and safety in commercial buildings, data centers and infrastructure aro
Slide 20: CSS Segment Performance
20 CSS Segment Performance Strong Profit Growth and Margin Expansion Since 2019 Adjusted EBITDA1 Margin Adjusted EBITDA1 ($M) +11% +23% +70 bps +80 bps $434 $481 2019 PF 2021 $222 $273 1H 2021 1H 2022 7.7% 8.4% 2019 PF 2021 8.2% 9.0% 1H 2021 1H 2022 1 Adjusted EBITDA is defined as EBITDA before othe
Slide 21: CSS Addressable Markets and Trends
$30B $5B Professional A/V Annual Addressable Markets $15B Network Infrastructure Security In-Building Wireless $40B CSS Addressable Markets and Trends 21 $60B Safety Secular Trends 24/7 Connectivity and Security ‒ 5G, Private LTE ‒ Remote Collaboration and Hybrid Work Automation and IoT Sources: AVI
Slide 22: Secular Trends Driving Data Center Growth and Connectivity
22 Secular Trends Driving Data Center Growth and Connectivity Creating opportunities for sustainable and profitable sales growth Cloud Adoption and Migration 5G and Bandwidth Demand AI, IoT, Machine Learning Virtual Collaboration & Remote Working Automation and Smart Anything Everywhere Connected De
Slide 23: Acquiring a Leading Global Hyperscale Data Center Company
Actual 23 $380M in TTM* Sales Data Center • Cloud • Edge • Colocations Workplace Productivity • End-User Computing • Applications • Audio and Video Solutions Secure Connectivity • Local Area Network • Wireless Network • Service Provider 900+ Total Employees 25 Countries Served Solutions *As of 06/30
Slide 24: Customer Segment Focus and Specialization
24 Customer Segment Focus and Specialization • Data Center and Cloud Services • Global Service Providers • Regional Telecom Contractors • Network, Security and Electrical Contractors • Specialty Contractors: Professional A/V, Wireless, Door Locking Hardware • Global Systems Integrators • Emerging Ch
Slide 25: Network Infrastructure and Product Categories
Network Infrastructure • Copper cabling • Optical fiber cabling • Racks and enclosures • Cable management and pathways • Network switches and transceivers • PoE midspans and injectors • UPS systems • Rack PDUs • Building entrance protection • Grounding and bonding Electrical Infrastructure • Switch
Slide 26: Data Center Solutions
Products, Services and Solutions Data Center Solutions Solutions for Every Environment and Phase of Development Electrical Infrastructure • Medium-voltage cable • Medium-voltage term kits • Building wire • Cable tray • Term kits • Lighting • Grounding • Bare copper • Flexible battery cable • Conduit
Slide 27: Parking Facility Solutions
Products, Services and Solutions Parking Facility Solutions Ensuring Security, Safety and Efficiencies Energy Solutions • Lighting • EV charging • Solar • Sensors Physical Security • Video surveillance • Access control • Emergency call stations • Intercoms, sound and paging • Kiosks • Digital signag
Slide 28: Wesco Differentiators
Wesco Differentiators End User Business Drivers Preferred Partner Ecosystem End User Working Capital Global Deployment Dedicated Program Team Global Sales Operations Technical Engineering Expertise Channel PartnershipsReporting Capabilities Portfolio Depth Complex Projects Complex Programs Customer
Slide 29: Global Resource Alignment
Enterprise Account Manager Global Sales Operations Contracts • Legal • Global contracts • Preferred T&Cs • Compliance Program Management Financial Operations Partner Coordination • Local sales teams • Global transactions • Implementation • Technical resources • Finance • Credit • Business management
Slide 30: Technical Support, Consulting and Advisory Services
Global Expertise • Connected devices and IoT • Data centers • Physical security • Network infrastructure • Wireless • Professional A/V 30 Consulting and Advisory Services • Solution and application engineering • Bill of material generation • Conceptual drawings • Codes and standards interpretation •
Slide 31: Conference Room as a Service
First “as a Service” Solution • Co-developed between digital and commercial teams • Provides subscription-based model • Includes remote monitoring and 24/7 support • Currently available in the U.S. and Canada Visit wescoconferencerooms.com to learn more Digital Capabilities Conference Room as a Serv
Slide 32: Broadband Infrastructure Synergy Win
Snapshot Broadband Infrastructure $130M Synergy Win 4 Year project Synergy Growth Highlight State Broadband Initiative Overview of win Other information Key synergy drivers • Utilize legacy Wesco and legacy Anixter warehouse facilities • Collaborated with UBS, technical support services, and Wesco g
Slide 33: A Connected Future
• CSS is a global business unit and a leading solutions provider of network infrastructure, security and in-building wireless products • Well positioned to continue participating in secular growth trends driving increased data consumption, 24/7/365 connectivity and cloud computing • Our global capab
Slide 34: Utility & Broadband Solutions
Jim Cameron Executive Vice President and General Manager, UBS Utility & Broadband Solutions
Slide 35: UBS Overview
U.S. 88% Canada 10% ROW 2% UBS Overview Sales By End-Market Sales By Geography Supply chain management, services and solutions for investor-owned utilities, public power companies, and municipalities, as well as global service providers, wireless providers, broadband operators and the contractors th
Slide 36: UBS Segment Performance
36 UBS Segment Performance Strong Profit Growth and Margin Expansion Since 2019 Adjusted EBITDA1 Margin Adjusted EBITDA1 ($M) +40% +66% +180 bps +220 bps 7.0% 8.8% 2019 PF 2021 $307 $428 2019 PF 2021 8.1% 10.3% 1H 2021 1H 2022 $184 $305 1H 2021 1H 2022 1 Adjusted EBITDA is defined as EBITDA before o
Slide 37: UBS Addressable Markets and Trends
Secular Trends $50B $35B Broadband and Service Providers $100B+ Government Funding in U.S. and Canada1 Annual Addressable Markets $30B Electrification 24/7 Connectivity and Security Automation and IoT Green Energy and Grid Modernization Electrification 24/7 Connectivity and Security Automation and I
Slide 38: Accelerating Power Chain Modernization and Expansion
38 Secular Trends Accelerating Power Chain Modernization and Expansion Sources: Bernstein, EEI, EIA, McKinsey, Company estimates ~ ~$700B ~5x >$120B ~7x Cost to modernize transmission lines by 2050 Current annual investments to modernize the grid Annual increase in average T&D investments by 2040 Gr
Slide 39: Utility Solutions Product and Services Portfolio
Utility Solutions Product and Services Portfolio From Generation to the Meter Utility • FTTx / communications • Line construction materials • Metering and cap banks • Network management center • Outdoor lighting • Poleline hardware • Power generation • Protective and rubber goods equipment • Safety
Slide 40: Broadband and Wireless Solutions
Broadband and Wireless Solutions Complementary End-to-End Offering Broadband • Broadband electronics • Coaxial cable and connectivity • Conduit and innerduct • Customer premise • Fiber cable and connectivity • Outside plant hardware • Safety equipment • Test equipment • Tools • Underground products
Slide 41: Integrated Supply Solutions
Integrated Supply Solutions High Value Sourcing and Site Support Reduces Operating Costs • Cleaning and janitorial • Electrical and lighting • Electronic and IT • Industrial machines, machine tools and supplies • Laboratory • Maintenance and manufacturing • Office supplies • Power transmission and f
Slide 42: Expanded Service Model for Complex Supply Chains
Wesco Program Management • Transaction Management • Mismatch/OSD&D Resolution • Catalog Management • Contract Management • Spot Buy Sourcing • KPI Management • Price Administration • Procurement • Storeroom Management • Emergency Response • System Integration • Tier Supplier Management • Diverse and
Slide 43: When Emergencies Happen, Wesco is There
When Emergencies Happen, Wesco is There We are the First Responders • 3rd Party Logistics (3PL) • Field Service Project Managers • Lay Down Yard Set-Up and Management • Material Management • Mobile Utility Storm Trailers and Stocked Tool Trailers • On-site Material Handling, Management and Logistics
Slide 44: Leveraging Grid Services Across SBUs
Leveraging Grid Services Across SBUs Cross-Sell Win ~4x Standalone Wesco Potential UBS DeliveredEES Delivered Together Delivered • Developed bill of materials (BOM) from 30% completed design • Leverage supplier network to deliver products with narrow productions schedule • Transmission and substatio
Slide 45: Convergence of Utility and Broadband
• Unique cross-sell opportunity between utility and broadband businesses with FTTx and rural broadband deployments • Leveraging broadband expertise and deep utility and supplier relationships to deploy broadband • Developed technology to manage workflows, forecasts and inventory for multiple builds
Slide 46: A Bright Future
• Cross-sell opportunities combined with enhanced business models and service capabilities support expanded scope, increased share and higher margin profile • Integrated network provides industry leading scale and operating leverage • Secular trends provide a multi decade runway for growth in the bu
Slide 47: Electrical & Electronic Solutions
Nelson Squires Executive Vice President and General Manager, EES Electrical & Electronic Solutions
Slide 48: EES Overview
U.S. 68% Canada 22% ROW 10% Construction 40% Industrial 35% OEM 25% Sales By End-Market Sales By Geography Provider of electrical, MRO, safety, and automation solutions Broad range of products and solutions primarily to the construction, industrial and OEM markets Uniquely positioned to provide the
Slide 49: EES Segment Performance
EES Segment Performance Strong Profit Growth and Margin Expansion Since 2019 Adjusted EBITDA1 Margin Adjusted EBITDA1 ($M) +32% +53% +160 bps +200 bps 7.7% 9.7% 1H 2021 1H 2022 6.3% 7.9% 2019 PF 2021 $280 $428 1H 2021 1H 2022 $458 $604 2019 PF 2021 49 1 Adjusted EBITDA is defined as EBITDA before ot
Slide 50: EES Addressable Markets and Trends
Secular Trends Annual Addressable Markets EES Addressable Markets and Trends $90B Industrial Solutions $40B OEM Solutions $55B Construction Solutions Electrification • Electricity demand is growing at twice the rate of overall energy demand • Power consumption is expected to triple by 2050 Green Ene
Slide 51: Accelerating Secular Trends Driven by Electrification
Accelerating Secular Trends Driven by Electrification Sources: BCG, McKinsey, Company Estimates Electricity demand + public investment driving renewable energy buildout Increased capacity generation required to ensure grid reliability and resilience Increased Electrical Content Increased Electricity
Slide 52: Customer Segment Focus and Specialization
52 Customer Segment Focus and Specialization • Metals, Mining, Food and Beverage, Chemicals, Oil and Gas • Government • Automation integrators • Engineering, Procurement and Construction (EPC) • Contractors: Electrical, Solar, Network and Security • Systems integrators • Electrical, Aerospace, Machi
Slide 53: Construction Solutions
Construction Solutions Industry-Leading Construction Expertise and Value-Added Services 3 5 4 1 72 9 6 8 10 Electrical Equipment • Switch gear • Panels board and load centers • Transformers Electrical Infrastructure • Pipe and conduit • Cable tray grounding • Lugs and splices • Terminations • Wiring
Slide 54: Construction Solutions Case Study
Construction Solutions Case Study Delivered Efficiency Gains to Complex Construction Project LeveragingChallenges Results Project Execution: proven solutions that improve productivity and reduce costs • Advisory Services • Installation Enhancement Services • Project Deployment Services • Supply Chai
Slide 55: Manufacturing Solutions
Manufacturing Solutions Optimizing Direct and Indirect Spend • Connectors • LEDs • Relay and modules • Motors • Control cable • Electronic and coax cable • Ethernet cable • Fiber optic cable • High temperature cable • Instrumentation cable • Medium-voltage cable • Mil-spec wire • Motor lead wire • P
Slide 56: Manufacturing Solutions Case Study: IoT
LeveragingChallenges Results • Engine failures during testing phase were causing production backlogs, delaying shipments and lowering plant efficiency • Implemented AI platform • Analyzed 6 billion data points within the first 30 days • Prevented $4.5M in engine damages by detecting 20 real-time eve
Slide 57: Case Study: Minimized Energy Costs Supporting Sustainability
57 LeveragingChallenges Results • Helped meet sustainability goals while lowering operating costs • 40% average energy savings per site • Handled all design, material logistics, installation coordination, project management and full rebate analysis • Survey, design, product specifications, photometr
Slide 58: EES Solutions Value Proposition
58 EES Solutions Value Proposition • Free employees to focus on business-critical functions • Tailor contract administration and program management • Engage technical experts to optimize designs • Select convenient e-business options • Strengthen supply chain resiliency • Access the world’s most res
Slide 59: An Electrified Future
• Broad array of capabilities and offerings across the construction, industrial, automation and OEM markets • Growth driven by the power of the Wesco + Anixter combination and aligned to secular growth trends • Globally positioned, customer centric, tech-enabled supply chain partner focused on deliv
Slide 60: Wesco: Ingenuity delivered
Ww wesco Ingenuity delivered.
Slide 61: Supply Chain and Operations
Hemant Porwal Executive Vice President, Supply Chain and Operations Supply Chain and Operations
Slide 62: Our Supplier-Partner Network and Offering
Our Supplier-Partner Network and Offering • #1 partner to our top 5 suppliers in the industries we serve • $16B+ of direct and indirect spend with ~45K global supplier base and ~1.5M+ products Scale is a Force Multiplier in B2B Distribution • $3B+ inventory with 600K+ stocked products • 150+ service
Slide 63: Supply Chain Transformation Agenda
Supply Chain Transformation Agenda Key EnablersStrategy Customer Focused Network SIOP Sales, Inventory, Operations Planning Preferred Supplier Value-Added Services ESG Environmental, Social and Governance Automation Integrated Operating Model Inventory Optimization AI / ML / RPA Artificial Intellige
Slide 64: Enabling Growth and Profitability by Centralizing Spend
Enabling Growth and Profitability by Centralizing Spend • Lack of aggregated demand visibility • Inefficient logistical processing increasing transactions and associated costs • Minimized ability to reduce non-preferred supplier spend • Missed cross-sell opportunities Areas of Opportunity Legacy Buy
Slide 65: Automated Recommendations to Drive Preferred Supplier Growth
AI-enabled intelligent product substitution digital service that enables preferred supplier conversion, margin expansion, and improved customer outcomes Product Recommendation Engine • Built on proprietary AI technology in the digital and data platform • Personalized product recommendations during p
Slide 66: Optimizing the Network Outside the Box
99% Coverage Legacy Network Optimized Network Same Day / Next Day Delivery to Customers Designing a flexible, efficient and modular network leveraging digital twin and algorithms to optimize physical flows, inventory and transportation Results Transportation as % of Sales OPEX as % of Sales Sales pe
Slide 67: Automation Inside the Box
• Increase throughput and storage capacity • Reduce labor costs and mitigate attrition 67 Automation “Inside the Box” to Increase Efficiency and Speed “Goods to Person” Solutions • Automate repetitive work, reduce safety risks • Utilize robots for non- value-added movements AMRs Automated Mobile Rob
Slide 68: Wesco Supply Chain Services
• Customized outsourcing for customer focused supply chain management • Sourcing, Inventory Management, Product Enhancement/Packing, Global Logistics and Digital Solutions and e-Commerce • Focused on providing consultative services • Product specification and design, engineering reviews and drawings
Slide 69: Sustainability and Recognition Highlights
• 0.4 TRIR: 3x-5x better than other distributors • Launched Wesco Cares • Best in class emergency/COVID support for employees, customers and communities we serve • 2022 Bloomberg Gender- Equality Index (4th consecutive) • Accelerated Diversity and Inclusion Program • Creation of multiple Business Re
Slide 70: 2030 Sustainability Goals and Completion Status
Reduce absolute Scope 1 and Scope 2 greenhouse gas emissions by 30% Reduce landfill waste intensity by 15% across our US and Canadian locations Achieve a 15% reduction in Total Recordable Incident Rate (TRIR) Provide 425,000 hours of safety training and development to our employees Value Creation Th
Slide 71: Customer-Centric Supply Chain Provides a Competitive Advantage
71 • Chief Supply Chain Officers demand greener and resilient supply chains and focus will shift from pure cost to holistic view of social and environmental impact of goods and services • Suppliers collaborate with large distribution companies to simplify their supply chains • Suppliers and customer
Slide 72: IT and Digital Transformation
IT and Digital Transformation Akash Khurana Executive Vice President and Chief Information and Digital Officer
Slide 73: Wesco is Uniquely Positioned to Leverage Technology-Driven Change
73 Transformational combination of Wesco + Anixter sets the foundation: • Increased scale • New, modern cloud technologies deployed across the enterprise • Launch point for operating model transformation and new business models • Increasingly dynamic supply chains • Accelerating digital and AI adopt
Slide 74: Digital Strategy Pillars
1 Digital Go-to-Market • Accelerate digital customer engagement • Recalibrate towards data-driven sales • Deliver expectations for B2C-like experience Omnichannel, e-Commerce and forward-looking tools to improve sales effectiveness 2 Intelligent Cost and Supplier Management • Eliminate inefficiencie
Slide 75: Wesco Digital Platform
75 Enterprise Systems Digital Products and Platform Omnichannel SolutionsBuilding and deploying the Wesco Digital Platform architecture, products and services Core technologies, processes, governance and thought leadership Driving to an integrated portfolio of systems and services that allow us to f
Slide 76: Our Digital Transformation
Digitally transforming our company Front Office Mid Office Back Office Products and PlatformOmnichannel Enterprise Systems Big Data Our Digital Transformation Innovating Across Our Entire Technology Landscape 76 Digital Services Data Office Supplier/OEM/Product Data Sets Wesco’s Data Sets Customer a
Slide 77: Enterprise Systems: Best-of-Breed
Implementing innovative solutions and technologies that are cloud native, scaled and optimized to fit our specific requirements while being cost effective and integrated Enterprise Systems Implementing Best-of-Breed to Achieve Speed, Flexibility and Scale Best of Breed Monolithic ERP Degree of Fit I
Slide 78: Big Data Strategy
• Development of AI based data assets • Unique data architecture to drive operational intelligence, interactions and delivery for our customers • Best in class Master Data Management (MDM) driven data quality and taxonomy enabling analytical capabilities for the ecosystem • Leveraging agile and desi
Slide 79: Digital Products and Services Portfolio
Creating products and services while enabling more efficient and cost-effective operations Digital solutions enabling efficient ecosystem integrations Secular trends guiding our platform roadmap Recommendation Engine Product Identification AutoBOM Faster RFQ Response SPA Engine Improved Pricing SCO
Slide 80: Creating a New Digital Culture
Creating a New Digital Culture Using New Methods, Techniques and Architecture 80 Agile Methodology DevSecOps Design Thinking Continuous Learning Lean Omnichannel Enterprise Systems Infrastructure Cybersecurity Products Platform Data Lake Cloud Native Governance Focusing our efforts and energy on inn
Slide 81: Become the Best Tech-Enabled Supply Chain Solutions Provider
Become the Best Tech-Enabled Supply Chain Solutions Provider • Combining our capabilities and data to create new products and services that deliver operational improvements, enhanced margins and growth • Working with our partner ecosystem to deliver new value and disrupt B2B distribution • Leveragin
Slide 82: Our Talent Ecosystem
Chris Wolf Executive Vice President and Chief Human Resources Officer Our Talent Ecosystem
Slide 83: Our People Are Our Greatest Asset
83 • Build world-class team of recruiters • Design an employer brand / value proposition • New career site and social media strategy • Expand targeted talent sourcing strategies • Embrace technology • Measure candidate / manager experiences • Leverage metrics and analytics Attract • Use predictive a
Slide 84: Strengthening Our Team and Building Our High-Performance Culture
0 Strengthening our Team and Building Our High-Performance Culture Attract top talent to our company to sustain growth and performance in the face of talent- related headwinds Talent Acquisition Consistently produce industry leaders Talent Management Mission Continuously increase our leadership benc
Slide 85: Recruiting Campaign - Never Stop Building
Provide differentiation and cut through social media clutter Mimic animations to amplify our message on multiple applications and platforms Placement on owned channels/paid digital media Targeting early career recruits with Never Stop Building message 85 Recruiting Campaign - Never Stop Building Ani
Slide 86: Diverse Leader Program
Identify Attract Communicate Engage Accelerate Develop Purpose Improve leadership bench strength and talent readiness • Identify and track diverse talent that is ready for a leadership role within 2 to 5 years • Engage diverse talent by facilitating development process and providing career advanceme
Slide 87: Inclusion and Diversity at Wesco
87 Inclusion and Diversity at Wesco Workforce Leveraging I&D to attract and retain talent to meet future challenges and demands Workplace Creating an inclusive culture where all employees feel valued, connected and inspired Marketplace Growing relationships with diverse supplier partners and custome
Slide 88: Business Resource Groups
88 VOICE provides an opportunity for every employee to be heard and supported within our organization, fostering an inclusive and diverse environment that contributes to our combined success. By creating communities and networks within our organization, everyone’s unique VOICE helps us to build upon
Slide 89: Accelerating Our Talent Ecosystem Supports Growth Ambitions
• Our people are our greatest asset and we continue to make investments to grow, retain and attract world-class talent to fuel our long-term growth and margin expansion. • We are strengthening our team and building a high-performance culture to create a step function change in performance. • Our cul
Slide 90: Driving Superior Financial Returns
Driving Superior Financial Returns Dave Schulz Executive Vice President and Chief Financial Officer
Slide 91: Reaffirming 2022 Outlook
91 1 Adjusted EBITDA is defined as EBITDA before other non-operating expenses (income), non-cash stock-based compensation, and merger-related and integration costs; Adjusted EPS excludes merger-related and integration costs, accelerated trademark amortization and the related income tax effects. See
Slide 92: Update on 2019 Investor Day Targets
. . . 92 4.0% CAGR 7.4% CAGR 2019 Investor Day Outlook 3-Year Sales CAGR at 2022 Outlook Midpoint $8.4B $21.3B 2019 Wesco Reported Sales 2022 Outlook Midpoint Drive Growth Through Consolidation Deliver 4%+ Long-term Growth Expand EBITDA2 Margin • Combined #2 and #4 North American electrical distribu
Slide 93: Post Merger Performance Exceeding Expectations
. . .. EBITDA2 Margin Expansion 100 bps 210 bps Initial 3-Year Target Actual Delivered 210 bps of margin expansion1 36 months 24 months Initial 3-Year Target Actual One year sooner than originally expected Cost Synergies $200M Initial 3-Year Target Revised Target Increased cost synergy target 60% $3
Slide 94: Adjusted EPS
$3.93 $4.82 $5.20 $4.37 $9.98 $16.00 2017 2018 2019 2020 2021 2022E Target [ ] 94 Transformational Combination of Wesco + Anixter Adjusted EPS1 Delivering superior financial results ~45% Adjusted EPS CAGR 2019 – 2022E ~2x+ Sales Growth CAGR 2022 Outlook Midpoint 1Adjusted EPS excludes merger-related
Slide 95: Accelerated Cost Synergy Realization Continues
95 $14 $34 $25 $44 $66$50 $60 2020 2021 2022 2023 To be realizedRealized Q2 $315 $265 $188 $39 $63 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Cumulative Realized Synergies Cumulative Realized Synergies By Type To be realizedRealized Supply Chain $115 million G&A $95 million Corporate Overhead $45 million Field Operations
Slide 96: Sustainable Value Creation
96 Sustainable Value Creation = Invest for Above Market Growth Increase Return of Capital to Shareholders Long-term Growth MSD+ Organic Sales Growth ~14% Incremental EBITDA1 Margin Margin Expansion 2x Sales Growth Sustainable Cash Flow Generation Over the Long Term EBITDA Growth + 1 Adjusted EBITDA
Slide 97: Secular Trends + Share Growth Leads to Market Outperformance
97 • $1.2T Infrastructure Investment and Jobs Act (IIJA) • $369B Inflation Reduction Act (IRA) related to energy and climate investments • $53B CHIPS and Science Act • $20B Rural Digital Opportunity Fund (RDOF) • Canada Broadband Investments • Leading Portfolio of Products, Services, and Solutions •
Slide 98: Enterprise-Wide Margin Expansion
98 5.2% 7.9% 10%+ 2019 Pro forma 2022 Outlook Midpoint Objective Enterprise-Wide Margin Expansion Track record of results and building momentum Performance Management Sales Processes and Playbook Systems and Dashboards Capability Building Gross Margin Improvement Program 270 bps Adjusted EBITDA1 Mar
Slide 99: Deploy Capital to Increase Shareholder Value
99 Deploy Capital to Increase Shareholder Value Organic growth opportunities M&A to further accelerate growth $1 billion share repurchase authorization Initiate common stock dividend in 2023 of ~$1.50 per share1 Increase Return of Capital to Shareholders Invest for Above Market Growth 1 ~$1.50 annua
Slide 100: Strategic Uses of Capital
100 Strategic Uses of Capital Step Function Increase in Cash Generation Drive Additional Value Creation ~40% Capex ~15% Maintain ~$120M per year in capital expenditures and IT/Digital transformation Preferred dividends through June 2025 Significant cash remaining after meeting dividend and investmen
Slide 101: M&A Framework
M&A Framework Accelerate Growth Through Future Acquisitions Aligned with Secular Trends 101 • Continued consolidation of B2B distributors and service companies with significant cost synergies Strategy Expanded balance sheet capacity supports future M&A ambitions • Adjacent product and service catego
Slide 102: Effectively Managing Financial Leverage
4.5 3.0 2.7 3.4 3.2 3.3 2.7 2.7 3.1 5.7 5.3 5.3 4.9 4.5 4.1 3.9 3.6 3.4 2012 2013 2014 2015 2016 2017 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 102 Returned to target range in 2 years Acquisition closed June 2020 Net Debt / TTM Adjusted EBITDA1 45% Variable Secured 55% Fixed Unsecured Debt Profile Mai
Slide 103: Long-Term Financial Framework
Long-Term Financial Framework 103 2x+ Sales EBITDA CAGR EPS CAGR >2x Sales 100% Free Cash Flow Conversion through the Cycle Build ConnectPower Protect Electrical & Electronic Solutions Communications & Security Solutions Utility & Broadband Solutions Connect Build Power Protect• Electrification • Au
Slide 104: Why Invest in the New Wesco
The new Wesco is focused on delivering superior results and achieving a premium multiple 104 Why Invest in the New Wesco • Fortune 200 B2B Supply Chain Solutions Leader ‒ Global capabilities and leading scale ‒ Higher growth and higher margin end-markets ‒ Cross-sell combined with attractive long-te
Slide 105: Wesco: Ingenuity delivered
Ww wesco Ingenuity delivered.
Slide 106: Appendix
© 2022 Wesco International 106 Appendix
Slide 107: Non-GAAP Measure Definitions
Non-GAAP Measure Definitions © 2022 Wesco International 107 Workday adjusted sales growth is a non-GAAP financial measure of sales performance. Workday adjusted sales growth is calculated by deducting the percentage impact of the number of workdays from the reported percentage change in consolidated
Slide 108: Adjusted Earnings Per Share
Adjusted Earnings Per Share 108 Twelve Months Ended December 31, ($ millions, except per share data) 2017 2018 2019 2020 2021 Income from operations 319.0 352.4 346.2 347.0 801.9 Merger-related and integration costs - - 3.1 132.2 158.5 Accelerated trademark amortization - - - - 32.0 Merger-related f
Slide 109: Adjusted EBITDA
Adjusted EBITDA 109 Wesco International EES EES CSS CSS UBS UBS Twelve Months Ended December 31, Twelve Months Ended December 31, Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma ($ millions) 2017 2018 2019 2020 2021 2019 2021 2019 2021 2019 2021 Operating income 319.0 352.4 713.7 461.3 801.8 414.9
Slide 110: Leverage
Leverage 110 Twelve Months Ended December 31, Pro Forma ($ millions) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 06/30/22 Income from operations 332.8 481.0 466.2 373.7 332.1 319.0 352.4 346.2 461.3 801.9 1,104.5 Merger-related and integration costs - - - - - - - 3.1 206.7 158.5 113.4 Accelera
Slide 111: Free Cash Flow
Free Cash Flow 111 Twelve Months Ended December 31, Six Months Ended, ($ millions) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 6/30/2022 Cash flow provided by (used in) operations 288.2 315.1 251.2 283.1 300.2 149.1 296.7 224.4 543.9 67.1 (304.5) Less: Capital expenditures (23.1) (27.8) (20.5)
Slide 112: Workday Adjusted Sales Growth
Workday Adjusted Sales Growth 112 Six Months Ended Workday Workday Adjusted ($ millions) June 30, 2022 June 30, 2021 Reported Impact Growth EES 4,420.1 3,643.8 21.3% 0.8% 20.5% CSS 3,036.2 2,711.7 12.0% 0.8% 11.2% UBS 2,959.4 2,281.7 29.7% 0.8% 28.9% Total net sales 10,415.7 8,637.2 20.6% 0.8% 19.8%