Wesco International, Inc. · NYSE:WCC
Wesco International — Investor Presentation (December 2015)
21 slides from Wesco International's investor presentation, Dec 15, 2015
Slide 1: 2015 Financial Update and 2016 Outlook
2015 Financial Update and 2016 Outlook December 15, 2015
Slide 2: Safe Harbor Statement
2 2016 Outlook Call 12/15/15 Safe Harbor Statement Note: All statements made herein that are not historical facts should be considered as “forward- looking statements” within the meaning of the Private Securities Litigation Act of 1995. Such statements involve known and unknown risks, uncertainties
Slide 3: 3 2016 Outlook Call 12/15/15
3 2016 Outlook Call 12/15/15
Slide 4: 2015 Outlook
4 2016 Outlook Call 12/15/15 2015 Outlook • FY 2015 sales decline of approximately 4% to 5% ‒ Includes Q4 sales decline of 5% to 8% ‒ Q4 results to date in line with outlook • FY 2015 EPS of $4.15 to $4.30 • Free cash flow equal to at least 100% of net income …challenging year, driven by industrial,
Slide 5: 2016 Priorities
5 2016 Outlook Call 12/15/15 2016 Priorities • Increase market share ‒ One WESCO sales growth initiatives ‒ Acquisitions • Sustain margins ‒ Organizational streamlining ‒ Lean operational excellence initiatives ‒ Pricing and sourcing initiatives ‒ Supplier and product rationalization ‒ Branch networ
Slide 6: Industrial End Market
6 2016 Outlook Call 12/15/15 Industrial End Market Improving Flat Declining 5.0% (4.1)% (10.2)% (14.2)% Core Sales Growth versus Prior Year 42% Key Market Indicators U.S. Industrial Production ISM Purchasing Managers’ Index Capacity Utilization Canadian Industrial Production • Global Accounts • Inte
Slide 7: Construction End Market
7 2016 Outlook Call 12/15/15 Construction End Market Improving Flat Declining Core Sales Growth versus Prior Year 42% Key Market Indicators Architectural Billings Index Capital goods orders growth Construction starts and put in place Canadian non-residential construction • Non-residential ‒ Commerci
Slide 8: Utility End Market
8 2016 Outlook Call 12/15/15 6.6% 6.5% 5.7% 1.7% FY 2014 Q1 2015 Q2 2015 Q3 2015 Utility End Market Improving Flat Declining Core Sales Growth versus Prior Year 42% Key Market Indicators Distribution grid maintenance and upgrades Generation MRO, upgrades, expansions Transmission line infrastructure
Slide 9: CIG End Market
9 2016 Outlook Call 12/15/15 4.5% 4.3% (0.5)% (3.0)% CIG End Market Improving Flat Declining Core Sales Growth versus Prior Year 42% Key Market Indicators Government spending Communications and security upgrades Education, healthcare, and financial • Commercial • Institutional • Government WESCO CIG
Slide 10: 2016 Sales Outlook
10 2016 Outlook Call 12/15/15 2016 Sales Outlook Sales Outlook End Market: Range Industrial (HSD) to (MSD) Construction (LSD) to LSD Utility Flat to LSD CIG Flat to LSD End Market Sales Growth (4)% to (1)% Market Outperformance 0 to +1% Foreign Exchange (3)% to (2)% Carryover impact of 2015 Acquisit
Slide 11: 2016 Sales Outlook by Geography
11 2016 Outlook Call 12/15/15 2016 Sales Outlook by Geography U.S. Canada International Flat to low-single-digit growth, including carryover impact of 2015 acquisitions High-single-digit to mid-teens decline, including foreign currency translation Mid-single-digit decline, including foreign currency
Slide 12: 2016 Margin Outlook
12 2016 Outlook Call 12/15/15 2016 Margin Outlook …expecting to sustain current margin levels Operating Margin 4.7% 5.4% 5.6% ~6.0% 6.2% 2010 2011 2012 2013E 2014E 6.4% Operating margin expansion 20-40 bpts • Gross margin expansion • Cost controls • Accretive Acquisitions Operating Margin 4.2% 5.4%
Slide 13: Cash Generation
13 2016 Outlook Call 12/15/15 Cash Generation Free Cash Flow ($M) Net Income ($M) ~$800M of Free Cash Flow Reconciliation of these non-GAAP financial measures is included in the Appendix to this presentation. 265 308 230 267 224 264 276 237 2012 2013 2014 2015 TTM Free Cash Flow ($M) Net Income ($M)
Slide 14: Effective Capital Allocation
14 2016 Outlook Call 12/15/15 Effective Capital Allocation …maintaining fiscal discipline while funding growth Cash Deployment • Support organic growth • Fund accretive acquisitions • Manage financial leverage • Share repurchase • Dividends
Slide 15: 2016 Financial Outlook
15 2016 Outlook Call 12/15/15 2.50 3.96 4.38 5.02 5.18 4.15 3.75 2010 2011 2012 2013 2014 2015E2016E 2016 Financial Outlook Operating Margin 4.7% 5.4% 5.6% ~6.0% 6.2% 2010 2011 2012 2013E 2014E Sales 5.1 6.1 6.6 7.5 7.9 7.3 ~7.0 2010 2011 2012 2013 2014 2015E2016E Diluted EPS ($B) ~7.5 6.4% 4.30 Sal
Slide 16: 16 2016 Outlook Call 12/15/15
16 2016 Outlook Call 12/15/15
Slide 17: Appendix
17 2016 Outlook Call 12/15/15 Appendix
Slide 18: Definitions
18 2016 Outlook Call 12/15/15 WESCO International, Inc. Definitions Appendix • Financial leverage ratio is calculated by dividing total debt, including debt discount, by adjusted EBITDA. Adjusted EBITDA is defined as the trailing twelve months earnings before interest, taxes, depreciation, and amort
Slide 19: Non-GAAP Financial Measures
19 2016 Outlook Call 12/15/15 NON-GAAP Financial Measures This presentation includes certain non-GAAP financial measures. These financial measures include adjusted EBIT, adjusted net income, adjusted diluted EPS, financial leverage ratio, free cash flow, and liquidity. The Company believes that thes
Slide 20: Non-GAAP reconciliation: adjusted EBIT, net income, EPS, free cash flow
20 2016 Outlook Call 12/15/15 FY 2012 FY 2013 FY 2014 2015 TTM (Dollars in millions, except for EPS) Adjusted Income from operations (Adjusted (EBIT): Income from operations (EBIT) 333 481 ArcelorMittal litigation charge (recovery) included in SG&A 36 (36) Adjusted income from operations (Adjusted E
Slide 21: Financial Leverage
21 2016 Outlook Call 12/15/15 Financial Leverage Twelve Months Ended September 30, 2015 Financial leverage ratio: Income from operations $ 408 Depreciation and amortization 65 EBITDA $ 473 September 30, 2015 Current debt and short-term borrowings $ 46 Long-term debt 1,455 Debt discount related to co
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