Fastenal Company · NASDAQ:FAST
Fastenal — Q4 2022 Earnings Presentation
15 slides from Fastenal's earnings presentation, Jan 19, 2023
Slide 1: Fourth Quarter 2022 Investor Teleconference
FOURTH QUARTER 2022 INVESTOR TELECONFERENCE JANUARY 19, 2023 1
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT All statements made herein that are not historical facts (e.g., future operating results and business activity, as well as expectations regarding operations, including gross margin, future inventory levels, pricing, Onsite and weighted FMI device signings, the size of our U.S./
Slide 3: CEO Messages on 4Q22
CEO MESSAGES ON 4Q22 • 4Q22 DSR growth of +10.7% eased on tougher comparisons Daily Sales Rate (DSR) Growth against the prior period and moderating demand. Against this 20% 18.4% 18.0% backdrop and in our slowest seasonal quarter volume-wise, 18% 16.0% our 4Q22 operating margin was stable at 19.6%.
Slide 4: 4Q22 Growth Driver Update
4Q22 GROWTH DRIVER UPDATE • Onsites: We had 62 signings in 4Q22 and finished Onsite Signings and Active Locations 160 1,800 with 1,623 active sites, +14.6% from 4Q21. Daily 1,623 140 1,600 sales, excluding transferred branch sales, grew at a 1,416 120 1,265 1,400 high-teens rate from 4Q21. Our 2023
Slide 5: Branch Consolidation
BRANCH CONSOLIDATION • Total in-market1 locations were 3,306 at the Branch Count end of 4Q22, up 3.0% from 3,209 at 4Q21. Our 3,000 total in-market location count continues to grow due to a rising installed base of Onsites. 2,500 In 2015, Onsites constituted 9.1% of our in- 2,000 market locations; i
Slide 6: 4Q22 Business Cadence
4Q22 BUSINESS CADENCE End Market Daily Sales Rate (DSR) Growth • U.S. Industrial Production rose 2.9% in Oct./Nov. 2022 over 40% 4Q21, representing moderation in underlying demand; key industrial components lagged the broader index. The U.S. 30% PMI averaged 49.2 in 4Q22 and was 48.4 in December, 20
Slide 7: 4Q22 Margin Summary
4Q22 MARGIN SUMMARY • Our 4Q22 operating margin was flat year-to-year at 19.6%, Gross Profit Margin 50% with incremental operating margin also at 19.6%. For the full year of 2022, our operating margin increased 50 bps to 20.8% 46.5% and we achieved an incremental margin of 24.4%. 45.6% 45.3% 45% • I
Slide 8: 4Q22 Cash Flow Profile
4Q22 CASH FLOW PROFILE Operating Cash Flow • 4Q22 operating cash flow was $301.9, or 122.9% of net (in millions) earnings. Conversion rates improved from the first half to the 400 second half of 2022, including in 4Q22. This largely relates 350 163.7% 122.9% to easing of supply chain constraints, wh
Slide 9: Appendix: Non-GAAP Financial Measures
APPENDIX Non-GAAP Financial Measures The appendix includes information on our Return on Invested Capital ('ROIC'), which is a non- GAAP financial measure. We define ROIC as net operating profit less income tax expense divided by average invested capital over the trailing 12 months. We believe ROIC i
Slide 10: Return on Invested Capital
RETURN ON INVESTED CAPITAL* Calculation of Return on Invested Capital Reconciliation of ROIC to Return on Assets (ROA) TTM TTM TTM TTM (Amounts in millions) 4Q22 4Q21 (Amounts in millions) 4Q22 4Q21 Operating Income $ 1,453.6 1,217.4 Net Earnings $ 1,086.9 925.0 Income Tax Expense (353.1) (282.8) To
Slide 11: Sequential Trends
SEQUENTIAL TRENDS* Cum. Cum. Cum. Cum. Chg., Chg., Chg., Chg., Jan. Jan. Jan. Jan. Daily Sales Rate (DSR) to to to to BENCHMARKS Jan.* Feb. Mar. Mar. Apr. May Jun. Jun. Jul. Aug. Sep. Sep. Oct. Oct. Nov. Dec. 2023 BENCHMARK** 0.2% 1.5% 3.8% 5.4% (0.5%) 2.7% 2.0% 9.8% (3.1%) 2.9% 3.6% 13.4% (1.9%) 11
Slide 12: Employee Statistics
EMPLOYEE STATISTICS Absolute Count FTE Count (1) Change Change Change Change HEADCOUNT STATISTICS Since Since Since Since 4Q22 3Q22 3Q22 4Q21 4Q21 4Q22 3Q22 3Q22 4Q21 4Q21 In-market locations (branches & Onsites) 13,410 13,243 1.3% 12,464 7.6% 12,017 11,897 1.0% 11,337 6.0% Non-in-market selling 2,4
Slide 13: In-Market Location Statistics
IN-MARKET LOCATION STATISTICS Annual Quarterly 2016 2017 2018 2019 2020 2021 1Q22 2Q22 3Q22 4Q22 Starting Branches 2,622 2,503 2,383 2,227 2,114 2,003 1,793 1,760 1,737 1,716 Opened Branches 40 18 11 12 12 10 6 2 3 1 Closed/ Converted Branches (1) (159) (138) (167) (125) (123) (220) (39) (25) (24) (
Slide 14: End Market Profile
END MARKET PROFILE End Market Mix - Full Year 2021 End Market Mix - Full Year 2022 Transportation/ Other, 3.0% Transportation/ Other, 2.6% Warehousing, 4.9% Warehousing, 4.4% Gov't/Education, 4.6% Gov't/Education, 3.9% Reseller, 6.6% Reseller, 7.5% Manufacturing, 41.9% Manufacturing, 42.6% Construct
Slide 15: Thank You
THANK YOU 15