Slide 1: Watsco, Inc. 3Q24 Investor Presentation
Watsco, Inc. 3Q24 Investor Presentation
Slide 2: Safe Harbor Statement
Safe Harbor This Presentation contains or incorporates by reference statements We believe these forward-looking statements are reasonable; that are not historical in nature and that are intended to be, and are however, you should not place undue reliance on any forward-looking hereby identified as,
Slide 3: Investment Thesis
Investment Thesis Market leader in a highly fragmented industry Transforming customer experience with enhanced technology Unique ownership culture with long-term focus on value creation Deep ties to the industry’s leading OEMs and suppliers Proven track record of delivering superior shareholder retu
Slide 4: What is Watsco's Business Model?
What is Watsco’s Business Model? Contractor visits our Contractor visits store or e-commerce Contractor completes Broken or failing A/C homeowner to site to buy equipment, the repair or unit at home or diagnose problem parts and supplies replacement of business and recommend needed to remedy homeown
Slide 5: Strategic Locations
Strategic Locations United States 627 Canada 36 Latin America & Caribbean 26 TOTAL 689 Russell Sigler* 35 *WSO Minority Ownership Data as of FYE 9/30/24
Slide 6: Market Leader in a Fragmented Market
Market Leader in a Fragmented Market Why scale matters: $8.0 Watsco vs. Industry Competitors Rich product availability and dense branch network to support customers $7.0 Purchasing power from 1,400+ OEMs and suppliers $6.0 Greater share of wallet from customer spend Estimated Revenues in Billi
Slide 7: Attractive End-Markets and Products
Attractive End-Markets and Products Latin America 5% New Housing 10-15% Refrigeration 4% Other HVAC Canada 5% Products Commercial 27% 15-20% REVENUES REVENUES REVENUES BY GEOGRAPHY BY SEGMENT BY PRODUCT Commercial HVAC Equipment 15% Residential HVAC United States 90% Residential Equipment 54% 65-70%
Slide 8: Installed Base of Central A/C Units
Installed Base of Central A/C Units 100,000,000 90,000,000 80,000,000 Installed Base 70,000,000 60,000,000 50,000,000 40,000,000 Large and Growing Installed Base Drives 30,000,000 Steady Replacement Business with 20,000,000 Residential Focus 10,000,000 - Installed base has increased every year 198
Slide 9: Using Technology to Transform the HVAC Industry
Using Technology to Transform the HVAC Industry 1 2 3 Make it easier to do Make Watsco more Enable new profit business with Watsco efficient and streams that help through best-in-class profitable, while our customers grow 24/7 digital improving speed to faster experience market
Slide 10: Benefits of Technology
Benefits of Technology Traditional Digital Countless hours wasted on the Ordering and pickups done in phone and waiting in line minutes, not hours People and resources spend time Sales becomes more pro-active and away from customers VS consultative vs. being order takers Inefficiencies eat into busi
Slide 11: The Industry's Leading Digital Experience
The Industry’s Leading Digital Experience An intuitive and contemporary digital experience for $2.4B ~50% customers to do business with Watsco. Annualized e-commerce Less attrition for users revenue in 2023, an 5% of e-commerce versus Robust E-Commerce Platform increase traditional customers Drivi
Slide 12: Our ESG Framework
Our ESG Framework ENVIRONMENTAL SOCIAL GHG EMISSIONS REDUCTION CIRCULAR ECONOMY WORKFORCE TRAINING Accelerate the transition Propel refrigerant Train network of to non-fossil fuel & high reclaiming in the add-on technicians on sustainable efficiency systems replacement market products and sustainabl
Slide 13: ESG: Our Impact
ESG: Our Impact 21.8 Million Metric 10.6 Billion Gallons Tons of CO2e averted of Water Saved from the sale of high from the sale of Alert efficiency equipment from Labs water monitoring January 2020 – September products from August 2024 2019 – September 2024 That’s the equivalent of: • Taking 5.2M v
Slide 14: Ownership Culture Linked To Value Creation
Ownership Culture Linked To Value Creation Watsco’s unique equity programs Restricted Shares Outstanding attract and retain the industry’s best. 4,000,000 160+ Restricted Stock plan participants 3,500,000 “Retirement age” cliff vesting 3,000,000 Average vesting of approximately 12 years 2,500,00
Slide 15: Watsco's Track Record
1989* TTM 9/30/2024 CAGR Watsco’s Revenues $64M $7.5B 15% Track Record EBIT $2M $753M 18% Share Price $2.70 $491.88 16% Watsco’s culture is focused on Dividends $.5M $411M 21% long-term value creation for all Market Cap** $22M $19.9B 21% stakeholders. Market Share (est.) <1% 15-18% Over most time pe
Slide 16: Solid Cash Flow Performance
Solid Cash Flow Performance 20 Year Cumulative Results Net Income: $4.7B Operating Cash Flow: $4.5B Dividends: $2.8B Acquisitions: $788M Capital Expenditures, net: $319M 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: Company SEC filings Ax
Slide 17: Robust Capital Position
12/31/22 12/31/23 9/30/24 Robust Capital Cash & Equivalents $148M $210M $294M Position Total Borrowings $56M $15M $0 Shareholders Equity $2,248M $2,616M $3,162M Debt to Capitalization 2.45% 0.6% 0.0% Consistent with a long-term focus, Watsco maintains a EBITDA (TTM) $863M $830M $793M conservative ba
Slide 18: Delivering Exceptional Shareholder Value
Delivering Exceptional Shareholder Value Watsco’s TSR ranks #16 out of ~1,600 public companies for Total Shareholder Returns over 30 years. Only 24 companies have returned 19+% over the last 30 years. Source: FactSet as of 12/31/23 19