Fastenal Company · NASDAQ:FAST
Fastenal — Investor Day (November 2015)
55 slides from Fastenal's investor day presentation, Nov 10, 2015
Slide 1: Investor Day November 5th, 2015
INVESTOR DAY November 5th, 2015
Slide 2: Forward Looking Statements
Certain statements contained in this presentation that are not historical facts are forward-looking statements and are thus prospective. These forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from future results ex
Slide 3: Will Oberton, President, CEO & Chairman
Will Oberton President, CEO & Chairman of the Board
Slide 4: Why Fastenal?
WHY FASTENAL? People Product Strategy Sales Specialists Delivery SystemsCustom Manufacturing Strategic Partnership Customer Service Oriented Local Stores Industry Specialists Product Depth Multiple Purchasing Methods Cost Savings Product Breadth Inventory Management National Accounts Program In-stoc
Slide 5: Kevin Fitzgerald, Vice-President Fastenal Solutions
Kevin Fitzgerald Vice-President Fastenal Solutions
Slide 6: Vending Agenda
• VENDING HISTORY • MARKET SIZE – OPPORTUNITY • SALES TEAM • INITIATIVES • WHY FASTENAL VENDING AGENDA
Slide 7: Local People, Local Products support network
National Support & Training National Distribution Regional Build Centers Regional Sales Specialist Local People, Local Products
Slide 8: Total # of Machines Installed
9,462 26,975 40,775 46,855 54,291 0 10,000 20,000 30,000 40,000 50,000 60,000 2011 2012 2013 2014 2015 TOTAL # OF MACHINES INSTALLED
Slide 9: April 2011 vs November 2015 Investor Day
April 2011 Investor Day… • Market Opportunity – 258k Machines • Signings Per Quarter – 1,400 • Total Customer Sales = $23 M/Month • Total Vending Sales = $3.4 M/Month • Total Vending Customers = 1,170 • Total Machine Count = 2,850 November 2015 Investor Day • Market Opportunity – 1.7 M Machines • Si
Slide 10: Current Opportunity $22+ Billion
10 Industries Identified 485,000 Potential Customers 99,000 are Fastenal Customers 3.6 Machines Per Customer Site Today’s Technology 1.7 Million Machines AT $1,100 PER MACHINE Current Opportunity $22+ Billion
Slide 11: Investment in Professional Sales Team
Investment in Professional Sales Team • Adding 200 people (75% complete) Specialized Training Program • 90-120 Days • Training • Inspection/Audit Professional Development • Increase Revenue by Machine • Store Efficiencies • Implementation Process • New Technology Professional Sales Training SELLING
Slide 12: Vending Initiatives
• Sales Team - #1 on the list • Increase our Revenue by Machine • Store Efficiencies • Cost Savings • Customer Proposals • Exclusive Brands • Machines VENDING INITIATIVES
Slide 13: E-Commerce, Spot Buys, Ship to Locker
E-Commerce • Spot Buys • Ship to Locker • FAST 360° CSP 2016 • Outdoor Lockers • Drive Traffic to Store • Same Day Needs Onsite • Opportunity with Existing Vending Customers • Lowers Cost to Serve • Efficiencies
Slide 14: Why Fastenal Vending?
• Efficiencies for our Customers • Efficiencies for our Stores • Market is HUGE- over $22 Billion • Growth Potential for Company – next 5 years • New Markets – New Customers • Changing the way We Sell – Changing the way Customers Buy • Limits our Competition • Machine Behind the Machine WHY FASTENAL
Slide 15: FAST Solutions
FAST Solutions aaadaaaaa: WE ARE WHERE YOU ARE. - jn
Slide 16: Kris Van Dalen, Director of Supply Chain Solutions
Kris Van Dalen Director of Supply Chain Solutions
Slide 17: Onsite Agenda
• DEFINE ONSITE • ONSITE HISTORY • BUSINESS STATUS • ONSITE MARKET • COMPETITIVE ADVANTAGE • 2015 RESULTS • WHY ONSITE? AGENDA
Slide 18: Onsite definition
ONSITE: Dedicated team members executing sales, service and operations within a customer facility.
Slide 19: Historical Onsite Revenue
$185 Million $394 Million $100,000,000 $200,000,000 $300,000,000 $400,000,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 HISTORICAL ONSITE REVENUE 151 154 154 169 195 212 148 152
Slide 20: Onsite Profitability
• Average Annual Revenue is $1.8 M • Gross Margin - 30% Lower • Operating Expense - 40% Less • Ability to Leverage our Existing Network = Attractive Returns ONSITE PROFITABILITY
Slide 21: Onsite Needs
Create Focus Brand the program Link onsite locations together Identify the target market Build Onsite Tailored Tools Systems and software Training Compensation plans Overcome Misconceptions Profitability Staffing Internal expense structure ONSITE NEEDS
Slide 22: The Power of Onsite
31,000 manufacturing prospects in North America 16,200 validated 3,700 qualified as immediate opportunities – approximately 2,200 are Fastenal Customers $25+ Billion 225 531 THE POWER OF ONSITE
Slide 23: Competitive Advantage
Existing Fastenal Business Model • Reduces the Investment to Move Onsite with a Customer • Fastenal Creates More Value by Leveraging Resources • Creates Barrier to Competition COMPETITIVE ADVANTAGE
Slide 24: Onsite Needs
Create Focus Brand the program Link onsite locations together Identify the target market Build Onsite Tailored Tools Systems and software Training Compensation plans Overcome Misconceptions Profitability Staffing Internal expense structure
Slide 25: Onsite Growth
65 • New Onsite Customers 2015 • On pace to add 80 new customers, an increase of 38% $1,000,000 • Year 1 New Market Share per Customer 12.8% • YTD Growth for Districts with a New Onsite • 13.4% of revenue 18.2% • Sequential Daily Average Growth over January • $42.3 Million in October 2015 ONSITE GRO
Slide 26: New Onsite Customers
NEW ONSITE CUSTOMERS 85% Manufacturing 280 Employees $115M+ Opportunity
Slide 27: Onsite Revenue
$394 Million $466 Million $300,000,000 $350,000,000 $400,000,000 $450,000,000 $500,000,000 2011 2012 2013 2014 2015 ONSITE REVENUE 212 265
Slide 28: Why Fastenal Onsite?
• Fastenal Customer • Supports Goals • Improves Supply Chain • Increases Productivity • Fastenal Shareholders • Dynamic Growth • Profitable Business • Fastenal Employees • Alternative Career Path • Hundreds of New Management Positions WHY FASTENAL ONSITE?
Slide 29: FAST Solutions Onsite
i FAST Solutions ONSITE _ WE ARE WHERE YOU ARE.
Slide 30: Kirk Talmontas, Vice-President E-Commerce
Kirk Talmontas Vice-President E-Commerce
Slide 31: Agenda
AGENDA • COMPETITIVE ADVANTAGE • VALUE PROPOSITION • TARGET MARKET • OPPORTUNITY • NEW SEARCH & NEW WEBSITE • WHY FASTENAL E-COMMERCE
Slide 32: Competitive Advantage
COMPETITIVE ADVANTAGE
Slide 33: Local Fastenal Stores
Same-Day Service for Locally-Stocked Items LOCAL FASTENAL STORES
Slide 34: Local Fastenal Stores Drive Distance
LOCAL FASTENAL STORES 60 MINUTE DRIVE DISTANCE Same-Day Service for Locally-Stocked Items
Slide 35: Distribution System
DISTRIBUTION SYSTEM Approx. 60% of Stores Serviced Before 7 AM Approx. 80% of Stores Serviced Before 9 AM
Slide 36: E-Commerce Value Proposition
FAST Solutions ——— E-COMMERCE ——— VALUE PROPOSITION WE ARE WHERE YOU ARE.
Slide 37: Transactional vs. Strategic Supply
Transactional vs. Strategic Supply
Slide 38: Strategic Supply Solutions
STRATEGIC SUPPLY SOLUTIONS Fastenal Managed Inventory Customer Managed Inventory Industrial Vending
Slide 39: Target Market
TARGET MARKET Criteria: • Existing Customers • Purchases Frequently • Discount Pricing Established • Industrial Vending and/or Binstock in Place Rationale: • Competitive Pricing in Place • Complements Existing Service Model • Positioned to Migrate Recurring Unplanned Spend to a FNL-Managed Solution
Slide 40: Target Market Opportunity
Target Market | Opportunity Existing Fastenal . Opportunity Overall Industrial Market Opportunity $140 Billion Overall
Slide 41: New Search & New Website
NEW SEARCH & NEW WEBSITE New Search • Enterprise Elastic Search • Data Clean-Up Project • Cross Reference Expansion New Website • Fastenal.ca • Migration to Fastenal.com • New Features
Slide 42: Inventory and distribution centers
8,000+ 1.5 million SKUs | = DELIVERY VEHICLES SUPPLIED ANNUALLY @& $gs3 MILLION [oui 14 Regional INVENTORY VALUE DISTRIBUTION CENTERS +@ CUSTOMER-TAILORED NT WE ARE WHERE YOU ARE.
Slide 43: Why Fastenal E-Commerce?
WHY FASTENAL E-COMMERCE? Customer • Same-Day Service for Local Inventory • Next-Day AM Service for Regional Inventory • Reduce Unplanned Spend • Exit High-Cost Transactional Model Shareholder • Greater AVO • Higher Gross Margin Dollars • Order Processing Cost Reduction Employee • Efficiencies Gained
Slide 44: FAST Solutions E-Commerce
ee nF FAST Solutions E-COMME!
Slide 45: Dan Florness, Executive Vice-President & CFO
Dan Florness Executive Vice-President & CFO
Slide 46: Recap and tours
RECAP • Introduction • FAST Solutions® Industrial Vending • Onsite – Fastenal Store within our Customer’s Facility • E-Commerce – 2016 Plans TOURS FOLLOWING THE PRESENTATION Group 1: CSP 16 Store Group 2: THUB (Picking the high frequency items) Group 3: IHUB (Master and regional hub)
Slide 47: Business Summary
2000 2005 2010 Q3-2015 STORE TYPE %OF NET SALES %OF NET SALES %OF NET SALES AVG. SALES % OF NET SALES PRE-TAX % $100K+ (1,038) 40% 40% 33% $165k 52% 26.2% < $100k (1,422) 54% 51% 50% $63k 27% 17.6% USA & CAN STORE ACTIVITY 95% 91% 83% $106k 79% 23.2% LARGE CUSTOMER SITES (includes Onsites) 5% 9% 14%
Slide 48: Net Capital Expenditures
Net Capital Expenditures (in thousands) 2011 (Actual) 2012 (Actual) 2013 (Actual) 2014 (Actual) 2015 (Estimate) 5 Year Total Manufacturing, warehouse, and industrial vending $ 83,607 105,278 164,940 144,649 108,400 606,874 Shelving and related supplies for local store locations 5,259 5,240 6,354 6,7
Slide 49: Why Fastenal Vending?
WHY FASTENAL VENDING? • Big Market of $22+ Billion • Structural Advantage • Market Leading Capabilities • Optimization Brings Quick Wins and Funds Growth Energy
Slide 50: Why Fastenal Onsite?
WHY FASTENAL ONSITE? • Big Market of $25+ Billion • Structural Advantage • Flexibility with Local Resources • Strong Supply Chain
Slide 51: Why Fastenal E-Commerce?
WHY FASTENAL E-COMMERCE? • Big Market • Structural Advantage • Same Day • Before Next Day • Low Cost Network • Store • Distribution
Slide 52: CSP 16 Store Same Day Solutions
Same Day Solutions 9,400+ Stocked Products Buy Online – Pick Up in Store Local Sales Reps Known for Fasteners After Hour Pickup (coming soon) Best In Class Distribution 24/7 Emergency ServiceLocal Presence CSP 16 STORE
Slide 53: It's All About the Fastenal Advantage
IT’S ALL ABOUT THE FASTENAL ADVANTAGE Great People Close to the Customer • Allows for a ‘High Service’ Business • Allows for Great Flexibility of Approach Frugality in the Business • Allows for a Low Cost Local Model • Profitable before $50k • Allows for a Low Cost Distribution Network • Freight cos
Slide 54: Q & A
Q & A Why Fastenal? video can be found at: fastenal.com > About Us
Slide 55: Thank You!
THANK YOU!