W.w. Grainger, Inc. · NYSE:GWW
W.w. Grainger — Q1 2023 Earnings Presentation
28 slides from W.w. Grainger's earnings presentation, Apr 27, 2023
Slide 1: Q1 2023 Earnings Call
NYSE: GWW Q1 2023 Earnings Call April 27, 2023
Slide 2: Safe Harbor Statement and Non-GAAP Financial Measures
Safe Harbor Statement and Non-GAAP Financial Measures All statements in this communication, other than those relating to historical facts, are “forward-looking statements.” Forward-looking statements can generally be identified by their use of terms such as “anticipate,” “estimate,” “believe,” “expe
Slide 3: Opening Remarks
Opening Remarks D.G. Macpherson Chairman and CEO © 2023 W.W. Grainger, Inc. 3
Slide 4: The Grainger Edge and Our Purpose
The Grainger Edge® INVESTOR DAY Start with the Our We Keep the Do the customer World Working® Embrace Purpose right thing curiosity We relentlessly expand our Invest in our Act with Our leadership position by being the go-to partner for people who success intent Aspiration build and run safe, sustai
Slide 5: Q1 2023 Highlights
Q1 2023 Highlights Strong, focused execution across the business Sales $4.1B +12.2% $4.1B (daily basis) • Continued momentum with our HTS-N.A. growth engines and EA flywheel • Improved supply chain service levels to near pre-pandemic levels Operating Margin 16.6% $4.1B +200bps • Delivered another st
Slide 6: Q1 2023 Results
Q1 2023 Results Dee Merriwether SVP and CFO © 2023 W.W. Grainger, Inc. 6
Slide 7: Q1 2023 Results: Total Company
Q1 2023 Results: Total Company Summary Results Commentary vs. Prior Year ($ in millions) % vs. PY Q1 2023 Q1 2022 Sales increased 12.2% (reported and daily) Fav/(Unfav) • 14.5% sales growth on a daily, constant currency basis Sales $ 4,091 $ 3,647 12.2% • Double-digit revenue growth in both segments
Slide 8: Q1 2023 Results: High-Touch Solutions - N.A.
Q1 2023 Results: High-Touch Solutions - N.A. Summary Results Commentary vs. Prior Year ($ in millions) % vs. PY Q1 2023 Q1 2022 Fav/(Unfav) Sales increased 14.5% (reported and daily) • 14.7% sales growth on a daily, constant currency basis Sales $ 3,294 $ 2,878 14.5% • Double-digit sales growth in t
Slide 9: Sales Outgrowth: High-Touch Solutions - U.S.
Sales Outgrowth: High-Touch Solutions - U.S. Continued traction with growth engines driving outgrowth of ~750 basis points in Q1’23 Full Year Trend Quarterly Trend 1,000 800 775 800 ~750 Impacted by 700 heightened Target is to grow pandemic sales; 550 400 to 500 bps ~450 bps 2-year avg faster than t
Slide 10: Q1 2023 Results: Endless Assortment
Q1 2023 Results: Endless Assortment Summary Results Commentary vs. Prior Year ($ in millions) % vs. PY Q1 2023 Q1 2022 Sales increased 3.8% (reported and daily); Fav/(Unfav) up 14.0% in daily, constant currency Sales $ 724 $ 697 3.8% • Zoro growth of 13.5% on a daily basis Daily Sales 11.3 10.9 3.8%
Slide 11: Operating Metrics: Endless Assortment
Operating Metrics: Endless Assortment Growth of registered users and SKU additions continue to provide strong foundation for sales growth across the segment Total Registered Users MonotaRO (1) Zoro - U.S. Total Active SKUs (Zoro U.S.) (user count in (SKU count in thousands) millions) +29% 12.0 +16%
Slide 12: Looking Ahead
Looking Ahead Dee Merriwether SVP and CFO © 2023 W.W. Grainger, Inc. 12
Slide 13: 2023 Full Year Guidance: Total Company
2023 Full Year Guidance: Total Company 2023 Y/Y change 2022A Guidance (Updated) Raising full Net Sales ($ billions) $15.2 $16.2 – $16.8 6.6% to 10.6% (7% to 11% daily sales) year 2023 Prior FY’23 Guidance Unchanged earnings Gross Profit Margin 38.4% 39.1% – 39.4% 70 to 100 bps outlook Prior FY’23 Gu
Slide 14: Closing Remarks
Closing Remarks D.G. Macpherson Chairman and CEO © 2023 W.W. Grainger, Inc. 14
Slide 15: Q&A
Q&A © 2023 W.W. Grainger, Inc. 15
Slide 16: Appendix
Appendix © 2023 W.W. Grainger, Inc. 16
Slide 17: Q1 2023 Segment Highlights: High-Touch Solutions - N.A.
Appendix Q1 2023 Segment Highlights: High-Touch Solutions - N.A. HTS - U.S. HTS - Canada ($ millions) ($ millions) Sales Gross Profit Sales Gross Profit +14.9% +5.6% +205 bps +10 bps $3,072 42.9% $155 32.1% 32.2% $2,672 40.9% $147 Q1’22 Q1’23 Q1’22 Q1’23 Q1’22 Q1’23 Q1’22 Q1’23 Local days and curren
Slide 18: Q1 2023 Segment Highlights: Endless Assortment
Q1 2023 Segment Highlights: Endless Assortment (1) MonotaRO Zoro - U.S. ($ millions) ($ millions) Sales Gross Profit Sales Gross Profit -1.8% +175 bps +13.5% +380 bps +30 bps 25.7% 27.4% 33.1% 33.4% Q1’22 Q1’23 Q1’22 Q1’23 $448 $440 41.4% $276 37.7% Op. Margin $243 Op. Margin +80 bps -65 bps Q1’22 Q
Slide 19: Q1 2023 Sales Performance: High-Touch Solutions - U.S.
Q1 2023 Sales Performance: High-Touch Solutions - U.S. (1) (1) Large Customers Mid-sized Customers FY ‘22 = 20% FY ‘22 = 21% 24% 23% 23% 20% 20% 19% 17% 17% 16% 14% Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Note: Given the on-going advancements the Company is making as it builds a
Slide 20: Sales Mix By Customer End Market: Total Company
Sales Mix By Customer End Market: Total Company Note: Starting in 2023, a revised customer end market classification system is being implemented which primarily follows the North American Industry Classification System (NAICS). Key updates include splitting apart Retail/Wholesale and creating a brea
Slide 21: Sales Growth By Customer End Market: HTS - U.S.
Sales Growth By Customer End Market: HTS – U.S. 2022 2023 Q1 Q2 Q3 Q4 Q1 Commercial Services UP Mid-Twenties UP Mid-Twenties UP Low-Twenties UP Mid-Teens UP Mid-Teens Contractors UP High-Teens UP Low-Twenties UP High-Teens UP High-Teens UP High-Teens Government UP Low-Single Digits UP High-Teens UP
Slide 22: 2023 Full Year Supplemental Guidance
Appendix 2023 Full Year Supplemental Guidance Adj. Operating Margin: Increasing HTS-N.A. operating margin Cash Flow: Increasing operating cash flow and share on improved GP outlook, while lowering EA on slower sales repurchase expectations based on improved earnings outlook 2020A 2021A 2022A 2023 Gu
Slide 23: Definitions & Calculations
Definitions & Calculations Basis of presentation: The Company has a controlling ownership interest in MonotaRO, which is part of our Endless Assortment segment. MonotaRO’s results are fully consolidated, reflected in U.S. GAAP, and reported one-month in arrears. Results will differ from MonotaRO’s e
Slide 24: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Sales growth for the three months ended March 31, 2023 (percent change compared to the prior year period) (unaudited) Note: For more information on the Company's use of non-GAAP measures in this presentation, please see the appendix Definitions and Calculations. (1)
Slide 25: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Income statement adjustments for the three months ended March 31, 2023 (in millions, except for percentage data) (unaudited) Total Company results included adjusting items which impacted U.S. GAAP as follows: Note: For more information on the Company's use of non-GAA
Slide 26: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Income statement adjustments for the three months ended March 31, 2022 (in millions, except for percentage data) (unaudited) Total Company results included adjusting items which impacted U.S. GAAP as follows: Note: For more information on the Company's use of non-GAA
Slide 27: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Key metrics for the three months ended March 31, 2023 (in millions, except for percentage data) (unaudited) Note: For more information on the Company's use of non-GAAP measures in this presentation, please see the appendix Definitions and Calculations. (1) Last twelv
Slide 28: IR Contacts
IR Contacts Kyle Bland Vice President, Investor Relations Andrew Ansay Director, Investor Relations Abby Schill Sr. Manager, Investor Relations InvestorRelations@grainger.com © 2023 W.W. Grainger, Inc. 28