W.w. Grainger, Inc. · NYSE:GWW
W.w. Grainger — Q2 2024 Earnings Presentation
26 slides from W.w. Grainger's earnings presentation, Aug 1, 2024
Slide 1: Q2 2024 Earnings Call
NYSE: GWW Q2 2024 Earnings Call August 1, 2024
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 © 2024 W.W. Grainger, Inc. 3
Slide 4: The Grainger Edge embedded in everything we do
The Grainger Edge® embedded in everything we do Our Principles Start with the Win as One Team Our “We Keep the Customer World Working®” Purpose Invest in our Act with Intent Success We relentlessly expand our Embrace Compete with Our leadership position by being the go-to partner for people who Curi
Slide 5: Q2 2024 Highlights
Q2 2024 Highlights Operational execution driving resilient performance +5.1% Sales $4.3B $4.1B (daily, organic constant currency) • Continued advancing HTS-N.A. growth engines and strategic flywheel initiatives within Endless Assortment • Delivered another quarter of solid growth and profitability O
Slide 6: Q2 2024 Results
Q2 2024 Results Dee Merriwether SVP and CFO © 2024 W.W. Grainger, Inc. 6
Slide 7: Q2 2024 Results: Total Company
Q2 2024 Results: Total Company Summary Results (Adjusted) Commentary vs. Prior Year ($ in millions) % vs. PY Q2 2024 Q2 2023 Sales increased 3.1% (reported and daily) Fav/(Unfav) • 5.1% sales growth on a daily, organic constant Sales $ 4,312 $ 4,182 3.1% currency basis Daily Sales 67.4 65.3 3.1% • G
Slide 8: Q2 2024 Results: High-Touch Solutions - N.A.
Q2 2024 Results: High-Touch Solutions - N.A. Summary Results (Adjusted) Commentary vs. Prior Year ($ in millions) % vs. PY Q2 2024 Q2 2023 Sales increased 3.1% (reported and daily) Fav/(Unfav) • Increased 3.7% on a daily, organic constant currency Sales $ 3,458 $ 3,355 3.1% basis Daily Sales 54.0 52
Slide 9: Sales Outgrowth: High-Touch Solutions - U.S.
Sales Outgrowth: High-Touch Solutions - U.S. Delivered Q2’24 market outgrowth of ~100 bps reflecting headwinds from price timing Annual Trend Quarterly Trend 800 550 775 525 YTD volume Impacted by outgrowth (2) Target is to grow heightened 525 ~375 bps pandemic sales; 400 to 500 bps ~450 bps 2-year
Slide 10: Q2 2024 Results: Endless Assortment
Q2 2024 Results: Endless Assortment Summary Results Commentary vs. Prior Year ($ in millions) % vs. PY Q2 2024 Q2 2023 Sales increased 3.3% (reported and daily); up Fav/(Unfav) 11.7% on a daily, constant currency basis Sales $ 776 $ 751 3.3% • Zoro growth of 8.7% on a daily basis Daily Sales 12.1 11
Slide 11: Looking Ahead
Looking Ahead Dee Merriwether SVP and CFO © 2024 W.W. Grainger, Inc. 11
Slide 12: 2024 Full Year Guidance: Total Company
2024 Full Year Guidance: Total Company 2024 Y/Y change 2023A Guidance Narrowing (Updated Aug 1, 2024) 3.2% to 5.2% full year Sales ($ billions) $16.5 $17.0 – $17.3 (4.0% to 6.0% daily, organic constant currency sales) earnings Prior FY’24 Guidance $17.2 – $17.7 expectations Gross Profit Margin 39.4%
Slide 13: Closing Remarks
Closing Remarks D.G. Macpherson Chairman and CEO © 2024 W.W. Grainger, Inc. 13
Slide 14: Q&A
Q&A © 2024 W.W. Grainger, Inc. 14
Slide 15: Appendix
Appendix © 2024 W.W. Grainger, Inc. 15
Slide 16: Q2 2024 Segment Highlights: High-Touch Solutions - N.A.
Appendix Q2 2024 Segment Highlights: High-Touch Solutions - N.A. HTS - U.S. HTS - Canada ($ millions) ($ millions) Sales Gross Profit Sales Gross Profit +3.0% +10 bps Daily +2.5% -10 bps Daily $3,126 $3,220 42.0% 42.1% $161 34.3% 34.2% $157 Q2’23 Q2’24 Q2’23 Q2’24 Q2’23 Q2’24 Q2’23 Q2’24 Daily, cons
Slide 17: Q2 2024 Segment Highlights: Endless Assortment
Q2 2024 Segment Highlights: Endless Assortment MonotaRO(1) Zoro - U.S. ($ millions) ($ millions) Sales Gross Profit Sales Gross Profit -0.4% +8.7% Daily -60 bps +380 bps Daily +40 bps 28.2% 27.6% 32.4% 32.8% Q2’23 Q2’24 Q2’23 Q2’24 $470 $468 41.4% $299 37.7% Op. Margin $275 Op. Margin +30 bps -130 b
Slide 18: Q2 2024 Sales Performance: High-Touch Solutions - U.S.
Q2 2024 Sales Performance: High-Touch Solutions - U.S. (1) (1) Large Customers Mid-sized Customers 11% 10% 10% 7% 7% 5% 5% 4% 3% 3% Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Note: FY’23 Large Customer daily sales growth was 9.4% Note: FY’23 Mid-size Customer daily sales growth was
Slide 19: Sales Growth By Customer End Market: HTS - U.S.
Sales Growth By Customer End Market: HTS - U.S. Q2’24 5 Quarter Trend Commercial Services FLAT Contractors UP High-Single Digits Government UP Low-Single Digits Healthcare UP Mid-Single Digits Manufacturing UP Low-Single Digits Retail UP Mid-Single Digits Transportation FLAT Utilities UP Low-Single
Slide 20: Operating Metrics: Endless Assortment
Operating Metrics: Endless Assortment Total Registered Users Total Active SKUs (Zoro U.S.) (user count in (SKU count in thousands) millions) +12% +12% 13.7 15,009 14,187 14,581 13.2 13,778 13.1 13,402 12.8 5,322 5,475 12.2 5,024 5,166 4,921 8,481 8,754 9,021 9,259 9,533 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24
Slide 21: 2024 Full Year Supplemental Guidance
Appendix 2024 Full Year Supplemental Guidance Cash Flow Guidance Sales Growth Guidance ($ millions) 2023A 2024 Guidance 2024 Guidance (Updated Aug 1, 2024) (Updated Aug 1, 2024) Operating Cash Flow $2,031 $1,950 – $2,150 Prior FY’24 Guidance $1,900 – $2,100 Low High (1) Capital Expenditures $445 $40
Slide 22: 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 23: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Sales growth for the three months ended June 30, 2024 (percent change compared to the prior year period) (unaudited) Total Company - Monthly Detail High-Touch Solutions - N.A. - Daily Sales April May June Q2'24 HTS - N.A. HTS - U.S. HTS - Canada Reported sales 12.8%
Slide 24: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Income statement adjustments for the three months ended June 30, 2024 and June 30, 2023 (in millions, except for percentage data) (unaudited) Total Company results included adjusting items which impacted U.S. GAAP as follows: Q2 2024 Reported Adjusted(2) Q2 2023 Repo
Slide 25: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Key metrics for the period ended June 30, 2024 and Operating margin for the twelve months ended December 31, 2023 (in millions, except for percentage data) (unaudited) Net Leverage Ratio As of Adjusted Return on Invested Capital (ROIC) Six months ended June 30, 2024
Slide 26: IR Contacts
IR Contacts Kyle Bland Vice President, Investor Relations Andrew Ansay Director, Investor Relations Abby Schill Sr. Manager, Investor Relations InvestorRelations@grainger.com © 2024 W.W. Grainger, Inc. 26