Wesco International, Inc. · NYSE:WCC
Wesco International — Investor Presentation (December 2014)
22 slides from Wesco International's investor presentation, Dec 17, 2014
Slide 1: 2014 Financial Update and 2015 Outlook
2014 Financial Update and 2015 Outlook December 17, 2014
Slide 2: Safe Harbor Statement
2 2015 Outlook Call 12/17/2014 Safe Harbor Statement Note: All statements made herein that are not historical facts should be considered as “forward- looking statements” within the meaning of the Private Securities Litigation Act of 1995. Such statements involve known and unknown risks, uncertaintie
Slide 3: 3 2015 Outlook Call 12/17/2014
3 2015 Outlook Call 12/17/2014
Slide 4: 2014 Outlook
4 2015 Outlook Call 12/17/2014 2014 Outlook • FY 2014 sales growth of approximately 5% Consolidated and organic sales growth workday adjusted of 5% in October and 8% in November Organic U.S. sales growth of 8% in October and 12% in November Organic Canada sales were flat in October and grew 2%
Slide 5: Long-Term Financial Objectives
5 2015 Outlook Call 12/17/2014 Maintain industry-leading cost structure Expand operating profit and margins Generate strong operating cash flow through the cycle Provide superior investor returns Long-Term Financial Objectives …focused on shareholder value creation Grow sales faster than the market
Slide 6: Long-Term Focus on Profitable Growth
6 2015 Outlook Call 12/17/2014 2009 2010 2011 2012 2013 2014 TTM Long-Term Focus on Profitable Growth EBIT 2.5x TOTAL SALES 1.7x HEADCOUNT 1.5x …operating profit pull through delivering results
Slide 7: Strong Performance
7 2015 Outlook Call 12/17/2014 Strong Performance Operating ProfitSales Free Cash Flow to Net IncomeEPS ($ Billions) $ 23% CAGR 98% of Net Income 21% CAGR …throughout this protracted economic recovery period 12% CAGR ($ Millions) 5.1 6.1 6.6 7.5 7.8 2010 2011 2012 2013 TTM Q3 2014 2.50 3.96 4.38 5.0
Slide 8: Cash Generation and Leverage
8 2015 Outlook Call 12/17/2014 1.5 2 2.5 3 3.5 4 4.5 5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Cash Generation 2012 2013 2014 Target Leverage 2.0x – 3.5x 3.2X Leverage (Total Par Debt to TTM EBITDA) Reconciliation of these non-GAAP financial measures is included in the Appendix to this presentation. …stron
Slide 9: Free Cash Flow Management
9 2015 Outlook Call 12/17/2014 Free Cash Flow Management …maintain fiscal discipline while funding growth Fourth Use Share repurchase program of up to $300 million through December 31, 2017 First Use Support organic growth at greater than market rates Third Use Reduce financial leverage Second Use F
Slide 10: 2015 Geographic Outlook
10 2015 Outlook Call 12/17/2014 2015 Geographic Outlook U.S Canada International Foreign exchange 2014 acquisitions Mid- to high-single digits Low- to mid-single digits Mid-single digits ~(1.0)% ~ 0.5% Sales Growth Note: Excludes unannounced acquisitions. …growth expected across all geographies
Slide 11: Oil and Gas Direct Exposure
11 2015 Outlook Call 12/17/2014 30-35% 25-30% 5-10% ~10% Oil and Gas Sales 10-15% 55-60% 55-60% WESCO Sales Oil and Gas Direct Exposure …across MRO, OEM, and Capex spending streams U.S. International CanadaDownstream Midstream Upstream
Slide 12: Industrial End Market
12 2015 Outlook Call 12/17/2014 Industrial End Market Improving Flat Declining (2.6%) 2.1% 7.0% 5.0% Core Sales Growth versus Prior Year42% Key Market Indicators U.S. industrial production ISM Purchasing Managers’ Index Capacity utilization Canadian industrial production Q2 2014Q1 2014 Q3 2014 • Glo
Slide 13: Construction End Market
13 2015 Outlook Call 12/17/2014 Construction End Market Improving Flat Declining Core Sales Growth versus Prior Year42% Key Market Indicators Architectural Billings Index NEMA electroindustry business confidence index Construction starts and put in place Canadian non-residential construction • Non-R
Slide 14: Utility End Market
14 2015 Outlook Call 12/17/2014 13.4% 1.5% 6.1% 10.6% FY 2013 Q1 2014 Q2 2014 Q3 2014 Utility End Market Improving Flat Declining Core Sales Growth versus Prior Year 42% Key Market Indicators Distribution grid maintenance and upgrades Non-residential and residential construction starts Generation MR
Slide 15: CIG End Market
15 2015 Outlook Call 12/17/2014 (1.0%) 3.3% 5.2% 2.3% CIG End Market Improving Flat Declining Core Sales Growth versus Prior Year42% Key Market Indicators Government spending Communications and security upgrades Education, healthcare, and financial • Commercial • Institutional • Government Q1 2014 Q
Slide 16: 2015 Financial Outlook
16 2015 Outlook Call 12/17/2014 2015 Financial Outlook …continuing organic growth through One WESCO Sales 5.1 6.1 6.6 7.5 7.8 8.0 2010 2011 2012 2013 2014E 2015E EPS 2.50 3.96 4.38 5.02 5.25 5.50 2010 2011 2012 2013 2014E 2015E ($B) 8.4 5.35 5.90 Total sales growth 3% to 6% Free Cash Flow Full year
Slide 17: 2015 Priorities
17 2015 Outlook Call 12/17/2014 2015 Priorities • Continue to build out the new One WESCO organization • Increase market share through One WESCO organic sales growth initiatives plus accretive acquisitions • Expand operating margins through pricing and sourcing initiatives, supplier and product rati
Slide 18: Appendix
18 2015 Outlook Call 12/17/2014 Appendix
Slide 19: Definitions
19 2015 Outlook Call 12/17/2014 WESCO International, Inc. Definitions Appendix • Financial leverage ratio is calculated by dividing total debt, including debt discount, by adjusted EBITDA. Adjusted EBITDA is defined as the trailing twelve months earnings before interest, taxes, depreciation, and amo
Slide 20: Non-GAAP Financial Measures
20 2015 Outlook Call 12/17/2014 NON-GAAP Financial Measures This presentation includes certain non-GAAP financial measures. These financial measures include adjusted EBIT, adjusted net income, adjusted diluted EPS, financial leverage ratio, free cash flow, and liquidity. The Company believes that th
Slide 21: Non-GAAP Reconciliations
21 2015 Outlook Call 12/17/2014 Non-GAAP Reconciliations FY 2012 FY 2013 TTM 2014 (Dollars in millions except for Diluted EPS) Adjusted Income from operations (Adjusted EBIT): Income from operations (EBIT) 333 481 453 ArcelorMittal litigation charge (recovery) included in SG&A 36 (36) - Adjusted inc
Slide 22: Non-GAAP Reconciliations
22 2015 Outlook Call 12/17/2014 Non-GAAP Reconciliations Twelve Months Ended September 30, 2014 Financial leverage ratio: Income from operations $ 453 Depreciation and amortization 68 Adjusted EBITDA $ 521 September 30, 2014 Current debt $ 45 Long-term debt 1,472 Debt discount related to convertible
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