Slide 1: CDW Corporation Webcast Conference Call
CDW Corporation Webcast Conference Call July 31, 2024
Slide 2: Today's Agenda
Second Quarter 2024 Results Performance Drivers Today's Agenda 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 the futur
Slide 4: Non-GAAP Financial Measures
Non-GAAP Financial Measures Generally, a non-GAAP financial measure is a numerical measure of a company’s performance or financial condition that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accorda
Slide 5: Financial Performance
Financial Performance • Net sales of $5.4 billion • Down 3.6% on a reported, average daily sales, and constant currency* basis • Gross profit of $1.2 billion, up 0.1% • Gross profit margin of 21.8%, up 80 basis points • Operating income of $433 million, up 5.1% • Non-GAAP operating income* of $510 m
Slide 6: Net Sales By Channel
Net Sales By Channel (Unaudited) ($ in millions) Three Months Ended June 30, 2024 2023 % Change(1) Corporate $ 2,195.2 $ 2,245.0 (2.2)% Small Business 382.9 396.2 (3.4) Public Government 639.1 681.2 (6.2) Education 1,017.4 1,026.8 (0.9) Healthcare 586.8 587.1 (0.1) Total Public 2,243.3 2,295.1 (2.3)
Slide 7: Our Three-Part Growth Strategy
Our Three-Part Growth Strategy 1 Capture share and acquire new customers 2 Enhance capabilities in high-growth solutions areas 3 Expand services capabilities 7
Slide 8: Financial Results
Financial Results (Unaudited) ($ in millions, except percentages) Three Months Ended June 30, 2024 2023 % Change Net sales $ 5,423.4 $ 5,626.1 (3.6)% Average daily net sales(1) $ 84.7 $ 87.9 (3.6) Gross profit $ 1,183.1 $ 1,181.5 0.1 Gross profit margin 21.8 % 21.0 % Selling and administrative expen
Slide 9: Earnings Per Diluted Share
Earnings Per Diluted Share (Unaudited) ($ in millions, except per share amounts) Three Months Ended June 30, 2024 2023 % Change US GAAP Net income $ 281.1 $ 262.6 7.0 % Weighted-average common shares outstanding - Diluted 135.6 136.1 Net income per diluted share $ 2.07 $ 1.92 7.5 Non-GAAP net income
Slide 10: Debt and Revolver Availability
Debt and Revolver Availability (Unaudited) ($ in millions) June 30, 2024 December 31, 2023 June 30, 2023 Cash and cash equivalents $ 665.3 $ 588.7 $ 203.9 Total debt 5,628.3 5,644.9 5,763.2 Net debt (total debt net of cash and cash equivalents) 4,963.0 5,056.2 5,559.3 Revolver availability 1,245.5 1
Slide 11: Cash Conversion Cycle
Cash Conversion Cycle (Unaudited) (Based on a rolling three-month average) June 30, 2024 December 31, 2023 June 30, 2023 Days of sales outstanding 72 77 67 Days of supply in inventory 13 13 14 Days purchases outstanding (68) (73) (67) Cash conversion cycle 17 17 14 11
Slide 12: Free Cash Flow and Adjusted Free Cash Flow
Free Cash Flow and Adjusted Free Cash Flow (Unaudited) ($ in millions) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net cash provided by operating activities $ 149.9 $ 228.1 $ 589.9 $ 593.6 Capital expenditures (30.9) (39.5) (60.4) (71.3) Free Cash Flow* 119.0 188.6 529.
Slide 13: 2024 Capital Allocation Priorities
2024 Capital Allocation Priorities Priorities Objectives Actions Target ~25% payout of Non-GAAP 5% increase in November 2023 Increase Dividends Annually net income; grow in-line with to $2.48/share annually earnings Target ~2.0 to 3.0 times Net Leverage Ratio; consistent with our commitment Currentl
Slide 14: 2024 Outlook
2024 Outlook (1), (2) 2024 Outlook Customer Spend U.S. IT growth plus ~200 to 300 bps premium Gross Profit Flat to low-single digit growth Non-GAAP Earnings Per Diluted Share Flat to low-single digit growth 1. Certain annual outlooks are provided on a non-GAAP basis because certain reconciling items
Slide 15: Modeling Thoughts
Modeling Thoughts Metric Expectations • Sequential growth in Q3 leads to low-single digit year-over-year growth Gross profit • 1H/2H split is aligned to historical levels, with Q4 meaningfully lower than Q3 • Currency expected to be approximately neutral for full year • Between $270 million to $275
Slide 16: Questions and Answers
ep) Questions and Answers ———————