Slide 1: CDW Corporation Webcast Conference Call
CDW Corporation Webcast Conference Call February 7, 2024 CDW.com | 800.800.4239
Slide 2: Today's Agenda
Today's Agenda ▪ Fourth Quarter and Full Year 2023 Results ▪ Performance Drivers ▪ Outlook ▪ Q&A 2
Slide 3: Forward Looking Statements
Forward Looking Statements Statements in this presentation that are not statements of historical fact are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding capital p
Slide 4: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP operating income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, equity-based compensation and the associated payroll taxes, acquisition and integration expenses, transformation initiatives and workplace
Slide 5: Q4 2023 and Full Year Financial Performance
Q4 2023 and Full Year Financial Performance Fourth Quarter: ▪ Net sales of $5.0 billion – Down 7.7% on a reported basis and average daily sales ("ADS") basis – Down 8.1% on a constant currency basis* ▪ Operating income of $435 million, down 2.6% ▪ Net income of $296 million, up 3.1% ▪ Non-GAAP opera
Slide 6: Net Sales By Channel
Net Sales By Channel (Unaudited) ($ in millions) Three Months Ended December 31, Year Ended December 31, 2023 2022 % Change(1) 2023 2022 % Change(1) Corporate $ 2,285.6 $ 2,484.0 (8.0)% $ 8,960.8 $ 10,350.1 (13.4)% Small Business 370.0 423.7 (12.7) 1,556.0 1,938.9 (19.7) Public Government 660.7 632.
Slide 7: Highlights Combined Power of Business Model and Strategy
Highlights Combined Power of Business Model and Strategy ▪ Balanced portfolio of customer end-markets ▪ Diverse product and solutions portfolio ▪ Three-part strategy for growth 7
Slide 8: Our Three-Part Growth Strategy
Our Three-Part Growth Strategy Capture share and acquire new customers Enhance capabilities in high-growth solutions areas Expand services capabilities 8
Slide 9: Q4 2023 Financial Results
Q4 2023 Financial Results (Unaudited) ($ in millions, except per share amounts) Three Months Ended December 31, 2023 2022 % Change Net sales $ 5,018.5 $ 5,438.3 (7.7)% (1) Average daily net sales $ 79.7 $ 86.3 (7.7)% Gross profit $ 1,153.8 $ 1,181.1 (2.3)% % of Net sales 23.0 % 21.7 % Selling and ad
Slide 10: Q4 2023 Earnings Per Share
Q4 2023 Earnings Per Share (Unaudited) ($ in millions, except per share amounts) Three Months Ended December 31, 2023 2022 % Change US GAAP Net income $ 296.1 $ 287.2 3.1 % Weighted-average common shares outstanding - Diluted 135.9 137.4 Net income per diluted share $ 2.18 $ 2.09 4.3 % Non-GAAP net
Slide 11: Full Year Financial Results
Full Year Financial Results (Unaudited) ($ in millions, except per share amounts) Year Ended December 31, 2023 2022 % Change Net sales $ 21,376.0 $ 23,748.7 (10.0)% Average daily net sales(1) $ 84.2 $ 93.5 (10.0)% Gross profit $ 4,652.4 $ 4,686.6 (0.7)% % of Net sales 21.8 % 19.7 % Selling and admin
Slide 12: Full Year Earnings Per Diluted Share
Full Year Earnings Per Diluted Share (Unaudited) ($ in millions, except per share amounts) Year Ended December 31, 2023 2022 % Change US GAAP Net income $ 1,104.3 $ 1,114.5 (0.9)% Weighted-average common shares outstanding - Diluted 136.3 137.0 Net income per diluted share $ 8.10 $ 8.13 (0.4)% Non-G
Slide 13: Debt and Revolver Availability
Debt and Revolver Availability (Unaudited) ($ in millions) December 31, 2023 December 31, 2022 Cash and cash equivalents $ 588.7 $ 315.2 Total debt $ 5,644.9 $ 5,922.7 Net debt (total debt net of cash and cash equivalents) $ 5,056.2 $ 5,607.5 Revolver availability $ 1,208.1 $ 1,083.6 Cash plus revol
Slide 14: Cash Conversion Cycle
Cash Conversion Cycle (Unaudited) (Based on a rolling three-month average) December 31, 2023 December 31, 2022 Days of sales outstanding 77 71 Days of supply in inventory 13 17 Days purchases outstanding (73) (67) Cash conversion cycle 17 21 14
Slide 15: Free Cash Flow and Adjusted Free Cash Flow
Free Cash Flow and Adjusted Free Cash Flow (Unaudited) ($ in millions) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Net cash provided by operating activities $ 536.5 $ 242.0 $ 1,598.7 $ 1,335.9 Capital expenditures (33.5) (30.6) (148.2) (127.8) Free cash flow* 503.0 21
Slide 16: 2024 Capital Allocation Priorities
2024 Capital Allocation Priorities Priorities Objectives Actions Target ~25% payout of 5% increase in November 2023 to Increase Dividends Annually non-GAAP net income; $2.48/share annually grow in-line with earnings Target ~2.0 to 3.0 times Net Maintain Net Leverage Leverage Ratio; committed Current
Slide 17: 2024 Outlook
2024 Outlook (1),(2) 2024 Outlook Customer Spend U.S. IT growth plus ~200 to 300 bps premium Gross Profit Low-to-mid single digit growth Non-GAAP Earnings Per Mid-single digit growth Diluted Share Growth (1) As of February 7, 2024; all growth rates on a constant currency basis (2) Annual targets are
Slide 18: Modeling Thoughts for 2024
Modeling Thoughts for 2024 ▪ Gross Profit • Low single-digit growth starting in Q1, ramping through the year to average to low-to- mid single digit growth for the full year • Currency expected to be approximately neutral for full year ▪ Annual depreciation and amortization expenses expected to be be
Slide 19: Questions and Answers
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