W.w. Grainger, Inc. · NYSE:GWW
W.w. Grainger — Q1 2024 Earnings Presentation
25 slides from W.w. Grainger's earnings presentation, Apr 25, 2024
Slide 1: Q1 2024 Earnings Call
NYSE: GWW Q1 2024 Earnings Call April 25, 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: Q1 2024 Highlights
Q1 2024 Highlights Strategic focus driving business forward +4.9% Sales $4.2B $4.1B (daily, organic constant currency) • Continued advancing HTS-N.A. growth engines and strategic flywheel initiatives within Endless Assortment • Delivered another quarter of solid growth and profitability Operating Ma
Slide 6: Q1 2024 Results
Q1 2024 Results Dee Merriwether SVP and CFO © 2024 W.W. Grainger, Inc. 6
Slide 7: Q1 2024 Results: Total Company
Q1 2024 Results: Total Company Summary Results Commentary vs. Prior Year ($ in millions) % vs. PY Q1 2024 Q1 2023 Sales increased 3.5% (reported and daily) Fav/(Unfav) • 4.9% sales growth on a daily, organic constant Sales $ 4,235 $ 4,091 3.5% currency basis Daily Sales 66.2 63.9 3.5% • Generated gr
Slide 8: Q1 2024 Results: High-Touch Solutions - N.A.
Q1 2024 Results: High-Touch Solutions - N.A. Summary Results Commentary vs. Prior Year ($ in millions) % vs. PY Q1 2024 Q1 2023 Fav/(Unfav) Sales increased 3.4% (reported and daily) • Increased 3.8% on a daily, organic constant currency Sales $ 3,405 $ 3,294 3.4% basis Daily Sales 53.2 51.5 3.4% • G
Slide 9: Sales Outgrowth: High-Touch Solutions - U.S.
Sales Outgrowth: High-Touch Solutions - U.S. Delivered market outgrowth of ~150 bps reflecting headwinds from price timing Annual Trend Quarterly Trend 800 750 775 Volume (2) 550 outgrowth Impacted by 525 Target is to grow heightened 525 ~450bps pandemic sales; 400 to 500 bps ~450 bps 2-year avg fas
Slide 10: Q1 2024 Results: Endless Assortment
Q1 2024 Results: Endless Assortment Summary Results Commentary vs. Prior Year ($ in millions) % vs. PY Q1 2024 Q1 2023 Sales increased 3.7% (reported and daily); up Fav/(Unfav) 10.0% on a daily, constant currency basis Sales $ 751 $ 724 3.7% • Zoro growth of 5.1% on a daily basis Daily Sales 11.7 11
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 Full year (Reaffirmed April 25, 2024) 4.3% to 7.3% expectations Sales ($ billions) $16.5 $17.2 – $17.7 (4.0% to 7.0% daily, organic constant currency sales) remain unchanged Gross Profit Margin 39.4% 39.1% – 39.4% (30) to Flat Ope
Slide 13: Closing Remarks
Closing Remarks D.G. Macpherson Chairman and CEO © 2024 W.W. Grainger, Inc. 13
Slide 14: Q&A
Q&A © 2024 W.W. Grainger, Inc. 14
Slide 15: Appendix
Appendix © 2024 W.W. Grainger, Inc. 15
Slide 16: Q1 2024 Segment Highlights: High-Touch Solutions - N.A.
Appendix Q1 2024 Segment Highlights: High-Touch Solutions - N.A. HTS - U.S. HTS - Canada ($ millions) ($ millions) Sales Gross Profit Sales Gross Profit +3.3% Daily -70 bps +2.6% +180 bps Daily $3,072 $3,174 42.9% 42.2% $159 32.2% 34.0% $155 Q1’23 Q1’24 Q1’23 Q1’24 Q1’23 Q1’24 Q1’23 Q1’24 Daily, org
Slide 17: Q1 2024 Segment Highlights: Endless Assortment
Q1 2024 Segment Highlights: Endless Assortment (1) MonotaRO Zoro - U.S. ($ millions) ($ millions) Sales Gross Profit Sales Gross Profit +2.5% +5.1% Daily +30 bps +380 bps Daily -130 bps 27.4% 27.7% 33.4% 32.1% Q1’23 Q1’24 Q1’23 Q1’24 $440 $451 41.4% $290 37.7% $276 Op. Margin Op. Margin +70 bps -150
Slide 18: Q1 2024 Sales Performance: High-Touch Solutions - U.S.
Q1 2024 Sales Performance: High-Touch Solutions - U.S. (1) (1) Large Customers Mid-sized Customers 16% 14% 11% 10% 10% 7% 7% 5% 4% 3% Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Note: FY’23 Large Customer daily sales growth was 9.4% Note: FY’23 Mid-size Customer daily sales growth wa
Slide 19: Sales Growth By Customer End Market: HTS - U.S.
Sales Growth By Customer End Market: HTS - U.S. Q1’24 5 Quarter Trend Commercial Services DOWN Mid-Single Digits Contractors UP High-Single Digits Government UP Mid-Single Digits Healthcare UP High-Single Digits Manufacturing UP Low-Single Digits Retail UP Low-Single Digits Transportation FLAT Utili
Slide 20: Operating Metrics: Endless Assortment
Operating Metrics: Endless Assortment Total Registered Users Total Active SKUs (Zoro U.S.) (user count in (SKU count in thousands) millions) +13% 14,187 14,581 +10% 13.2 13,778 13.1 13,402 12,920 12.8 5,166 5,322 5,024 12.2 4,737 4,921 12.0 8,481 8,754 9,021 9,259 8,183 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24
Slide 21: 2024 Full Year Supplemental Guidance
Appendix 2024 Full Year Supplemental Guidance Cash Flow Guidance Sales Growth Guidance ($ millions) 2023A 2024 Guidance 2024 Guidance (Reaffirmed April 25, 2024) (Reaffirmed April 25, 2024) Operating Cash Flow $2,031 $1,900 – $2,100 Prior FY’24 Guidance Unchanged Low High Capital Expenditures(1) $44
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 March 31, 2024 (percent change compared to the prior year period) (unaudited) Total Company - Monthly Detail High-Touch Solutions - N.A. - Daily Sales January February March Q1'24 HTS - N.A. HTS - U.S. HTS - Canada Reported sal
Slide 24: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Key metrics for the three months ended March 31, 2024 and Operating margin for the twelve months ended December 31, 2023 (in millions, except for percentage data) (unaudited) Net Leverage Ratio Operating Margin FY 2023 As of HTS-N.A. EA Total Company March 31, 2024 R
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