Global Industrial Company · NYSE:GIC
Global Industrial — Q4 2022 Earnings Presentation
23 slides from Global Industrial's earnings presentation, March 2023
Slide 1: 4Q 2022 Global Industrial
4Q 2022 GLOBAL INDUSTRIAL
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934).
Slide 3: At a Glance: Leading Player in Industrial Distribution SMB Market
AT A G L A N C E Leading Player in Industrial Distribution SMB Market Sales 2022 $1.17B 7 Distribution centers in U.S. and Canada Janitorial & Storage & Furniture & Safety & Carts & Trucks HVAC & Fans Facility Shelving Decor Security Maintenance Employees SMB Industrial Experts in 1,600+ (400+ Subje
Slide 4: Agenda: A Repositioned Company. Outgrowing the Industry
AGENDA A Repositioned Company. Outgrowing the Industry 1 2 3 4 Business Powerful Strong Uniquely Foundation Customer Growth Financial Positioned Model Profile 4 |
Slide 5: The ACE Strategy Serves as the Foundation for our Growth Engine
The ACE Strategy (Accelerating the Customer Experience) Serves as the Foundation for our Growth Engine Accelerate customer growth by being an Indispensable Business Partner Digital & Leading Product Fulfillment Exceptional Multi-Channel Products & Knowledge & & Delivery Customer Sales Model Services
Slide 6: Building on a Broad Customer Base in Large Fragmented Market
Building on a Broad Customer Base in Large Fragmented Market Broad Customer Base Large SMB MRO Market… • Manufacturing ~$50B¹ • Retail / Wholesale Trade • Construction • Health Care • Professional, Scientific • Public Admin. • Educational • Transportation & Warehousing • Administrative • Other Servi
Slide 7: Robust Product Offering & Expertise Provides Multiple Growth Opportunities
Robust Product Offering & Expertise Provides Multiple Growth Opportunities: 10 Top Categories 1. Storage & 2. Material 3. Janitorial & Healthcare Shelving Handling Maintenance Recent product 4. Safety & 5. Furniture 6. HVAC 7. Workbench & line expansion Security & Decor & Fans Shop Desks Pneumatics
Slide 8: Premium Private Label Brand - Our Best Kept Secret
OUR BEST KEPT SECRET Private Label Brand - Made To ExceedTM 15-20% ~16% “Extra Chip” ~50% Premium CAGR over 5 in the cookie of Total Sales years is fastest margin vs. growing sourcing differentiation National Brands channel 8 |
Slide 9: Business Foundation has Generated a Strong Track Record of Growth and Margin Expansion
Business Foundation has Generated a Strong Track Record of Growth and Margin Expansion Revenue Operating Margin ($M) (%) 6.8% +210 CAGR bps 9.0% $1,166M $897M 6.9% 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 9 |
Slide 10: Agenda: A Repositioned Company. Outgrowing the Industry
AGENDA A Repositioned Company. Outgrowing the Industry 1 2 3 4 Business Powerful Strong Uniquely Foundation Customer Growth Financial Positioned Model Profile 10 |
Slide 11: Evolving Industry Trends Play to Our Strengths
Evolving Industry Trends Play to Our Strengths Trends Affecting Well Positioned to Meet Industrial Distributors Industry Challenges E-commerce expansion: E-commerce adoption ~60% e-commerce accelerating transactions Amazon effect Sophisticated increasing customer digital & multi-channel expectations
Slide 12: What Sets Global Industrial Apart: Why We Win
What Sets Global Industrial Apart: Why We Win Thousands of Smaller Large National Differentiator Distributors Players Core focus on SMB customers Strong capabilities in big and bulky items Extensive private label brands Robust e-commerce functionality Powerful digital marketing funnel – asset light
Slide 13: Our Focus is the Large, Fragmented SMB MRO Market
Our Focus is the Large, Fragmented SMB MRO Market Our Focus • ~$50B market Large / Enterprise • Offering a one stop shop for MRO / Industrial Equipment & Supplies needs • Extending expert advice to reduce total cost of ownership SMB • Enabling a flawless online experience • Providing an efficient an
Slide 14: Agenda: A Repositioned Company. Outgrowing the Industry
AGENDA A Repositioned Company. Outgrowing the Industry 1 2 3 4 A Powerful Strong Repositioned Uniquely Customer Growth Financial Company Positioned Model Profile 14 |
Slide 15: Powerful Customer Acquisition, Growth, & Retention Model
Powerful Customer Acquisition, Growth, & Retention Model 1 2 Build Customer Digital and GPO Customer Focused Culture Acquisition Funnel 5 3 Result: Growth in Customer Campaigns to Sales and Margins Retain and Build Customer Loyalty 4 Groom to 1:1 Direct Sales Channel to Grow Share of Wallet and Cate
Slide 16: Customer Acquisition Led by Digital Channel, Supplemented via Emerging GPO
Customer Acquisition Led by Digital Channel, Supplemented via Emerging GPO & Enterprise Account Identification 3.5 million customer Attract sessions per month • Paid search advertising • Digital marketing LinkedIn YouTube Facebook Instagram 20,000 new customers per month Acquire • ~60%¹ of transacti
Slide 17: Direct 1:1 Sales Builds Deep, Loyal Customer Relationships
RETAIN AND BUILD LOYALTY Direct 1:1 Sales Builds Deep, Loyal Customer Relationships Customer-Focused Approach Advantages 1:1 Direct Sales Channel Grows premium customers Customers – Shift customers to loyal champions Private Label Profitability ACE Model Expand categories Higher margin Groom to mana
Slide 18: Agenda: A Repositioned Company. Outgrowing the Industry
AGENDA A Repositioned Company. Outgrowing the Industry 1 2 3 4 Business Powerful Strong Uniquely Foundation Customer Growth Financial Positioned Model Profile 18 |
Slide 19: Capital Light, Strong Free Cash Flow Business
Capital Light, Strong Free Cash Flow Business Cash From Operations Strong Balance Sheet/ ($M) High WC Utilization (Q4 2022) ($M) $75 Debt $0.6M Cash and equivalents $28.5M $50 Inventory turns* 3.8X $25 AR DSO* ~38 AP DPO* ~56 $0 2018 2019 2020 2021 2022 19 | *Working Capital Metrics based upon 2022
Slide 20: Capital Allocation Priorities
Capital Allocation Priorities 1 Invest for Growth 2 Strategic M&A 3 Return Capital to Shareholders • E-commerce • Acquisitions that • Continued dividend capabilities fit strategy growth over time • Customer Acquisition • Synergistic, leverage • Special dividends private label, • Product selection •
Slide 21: Strong Return of Capital to Shareholders
Strong Return of Capital to Shareholders Quarterly Dividends Per Share Dividends • $600 million in dividends since Jan. 2018 including 6 special 12% $0.20 dividends CAGR $0.18 • Current payout ratio ~35% $0.16 $0.14 $0.12 $0.11 $0.10 Share Repurchases • 500,000 shares repurchased since 2019 under cu
Slide 22: Going Forward: Financial Goals
GOING FORWARD Financial Goals1 Revenue Operating EPS Growth Income Margin Growth 500 bps faster growth +200 bps 10 - 15% 5 year CAGR than market (9% OM 2022) annually 1 Assumes Normalized Economic Conditions 22 |
Slide 23: 4Q 2022 Global Industrial
4Q 2022 GLOBAL INDUSTRIAL 23
Global Industrial Company — Q4 2022 Earnings Presentation on 6ix