Fastenal Company · NASDAQ:FAST
Fastenal — Q4 2023 Earnings Presentation
15 slides from Fastenal's earnings presentation, Jan 18, 2024
Slide 1: Fourth Quarter
FOURTH QUARTER JANUARY 18, 2024 1
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT All statements made herein that are not historical facts (e.g., future operating results, long-term share gains, and business activity, as well as expectations regarding operations, including gross margin, future inventory levels, pricing, Onsite and weighted FMI device signing
Slide 3: CEO Messages on 4Q23
CEO MESSAGES ON 4Q23 • 2023 saw two struggles. First, a sustained sub-50 PMI Daily Sales Rate (DSR) Growth reflected soft business activity, including in 4Q23. 20% 18.4% 18.0% Second, poorer execution than we expect of ourselves, 18% 16.0% manifested in leadership changes made during the year. 16% 1
Slide 4: 4Q23 Growth Driver Update
4Q23 GROWTH DRIVER UPDATE • Onsites: We had 58 signings in 4Q23. Active sites finished Onsite Signings and Active Locations at 1,822, +12.3% from 4Q22. Daily sales, excluding 160 2,000 1,822 transferred branch sales, grew at a mid single-digit rate 1,800 140 1,623 from 4Q22. Units operating since 20
Slide 5: Getting Closer to the Customer
GETTING CLOSER TO THE CUSTOMER • Total in-market(1) locations were 3,419 at the In-Market Location Count end of 4Q23, up 3.4% from 3,306 at 4Q22. 4,000 Our total in-market location count continues to grow due to a rising installed base of Onsites. 3,500 In 2015, Onsites constituted 9.1% of our in- 3
Slide 6: 4Q23 Business Cadence
4Q23 BUSINESS CADENCE • U.S. Industrial Production declined 0.1% in Oct./Nov. End Market Daily Sales Rate (DSR) Growth 2023 over 4Q22, though heavier manufacturing 40% components such as fabricated metal and machinery 30% remained weaker than the broader index. U.S. PMI 20% averaged 46.9 in 4Q23, ma
Slide 7: 4Q23 Margin Summary
4Q23 MARGIN SUMMARY • 4Q23 gross margin was 45.5%, up from 45.3% in Gross Profit Margin 50% 4Q22. Better product margin and slightly favorable price-cost more than offset the negative effect of 46.5% customer and product mix. 45.3% 45.5% 45% • Price-cost dynamics were comparable to the third quarter
Slide 8: 4Q23 Cash Flow Profile
4Q23 CASH FLOW PROFILE • 4Q23 operating cash flow was $354.0, or 132.9% of net Operating Cash Flow earnings. For the full year of 2023, operating cash flow was (in millions) 400 $1,432.7, or 124.0% of net earnings. The absence of last 132.9% 350 year's supply chain constraints, slower business activ
Slide 9: Appendix: Non-GAAP Financial Measures
APPENDIX Non-GAAP Financial Measures The appendix includes information on our Return on Invested Capital ('ROIC'), which is a non- GAAP financial measure. We define ROIC as net operating profit less income tax expense divided by average invested capital over the trailing 12 months. We believe ROIC i
Slide 10: Return on Invested Capital
RETURN ON INVESTED CAPITAL* Calculation of Return on Invested Capital (ROIC) Reconciliation of ROIC to Return on Assets (ROA) TTM TTM TTM TTM (Amounts in millions) 4Q23 4Q22 (Amounts in millions) 4Q23 4Q22 Operating Income $ 1,528.7 1,453.6 Net Earnings $ 1,155.0 1,086.9 Income Tax Expense (367.0) (
Slide 11: Sequential Trends
SEQUENTIAL TRENDS* Cum. Cum. Cum. Cum. Chg., Chg., Chg., Chg., Jan. Jan. Jan. Jan. Daily Sales Rate (DSR) to to to to BENCHMARKS Jan.* Feb. Mar. Mar. Apr. May Jun. Jun. Jul. Aug. Sep. Sep. Oct. Oct. Nov. Dec. 2024 BENCHMARK** 0.1% 1.6% 3.3% 4.9% (0.7%) 2.5% 1.4% 8.2% (3.2%) 2.7% 3.6% 11.5% (2.1%) 9.
Slide 12: Employee Statistics
EMPLOYEE STATISTICS Absolute Count FTE Count (1) Change Change Change Change HEADCOUNT Since Since Since Since STATISTICS 4Q23 3Q23 3Q23 4Q22 4Q22 4Q23 3Q23 3Q23 4Q22 4Q22 (2) Selling personnel 16,512 16,261 1.5% 15,898 3.9% 15,070 14,750 2.2% 14,476 4.1% Distribution/Transportation personnel 4,042
Slide 13: In-Market Location Statistics
IN-MARKET LOCATION STATISTICS 2013 (1) 2014 (1) 2015 2016 2017 2018 2019 2020 2021 2022 2023 Starting Branches 2,652 2,687 2,637 2,622 2,503 2,383 2,227 2,114 2,003 1,793 1,683 Opened Branches 53 24 41 40 18 11 12 12 10 12 10 Closed/ Converted Branches (2) (18) (74) (56) (159) (138) (167) (125) (123
Slide 14: End Market Profile
END MARKET PROFILE End Market Mix - Full Year 2022 End Market Mix - Full Year 2023 Transportation/ Other, 2.6% Transportation/ Other, 2.4% Warehousing, 4.4% Warehousing, 4.6% Gov't/Education, 3.9% Heavy Gov't/Education, 3.7% Heavy Manufacturing, 40.9% Manufacturing, 43.1% Reseller, 6.6% Reseller, 5.
Slide 15: Where Industry Meets Innovation...
WHERE INDUSTRY MEETS INNOVATION... 15