公司深度研究 数据来源：各公司官网和财报,东吴证券(香港) 企业较高的ROE 主要来自于较高的总资产周转率和权益乘数。MRO采购具备长尾特征, 根据 B2B 内参数据,约 60%金额的 MRO 采购是非重复性的,但却占了总采购 SKU 的 90%+;固安捷统计,超过 90%的 MRO 采购频次仅 1~2 次/年;震坤行统计,超过 50% 的 MRO Sku 库存周转市场超过 12 个月。横向策略资产周转率平均值较高，主要由于其 以标准化和易耗类 MRO 为基本盘,其中以清洁、防护、办公文具等 MRO 产品为例, 本身的周转较快,企业采购频次一般为半年或一个季度一次,有的企业甚至更为频繁。 图44: MRO 采购具长尾效应 與服 FER 数据来源: B2B 内参，东吴证券(香港) 图45: 重复性采购的标准化 MRO 金额占比约 40% 重复性采购MRO 金额占比, 40% 非重复性采购 MRO金额占比。 数据来源：B2B 内参，东吴证券（香港） | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------| ...

Sales and Revenue - Grainger generated approximately 82% of its consolidated net sales from U.S. operations in 2023[40]. - The company reported net sales of $16,478 million for the year ended December 31, 2023, an increase of 8.2% compared to the previous year, driven by a 5% volume increase and a 4% price increase[153]. - Daily, organic constant currency net sales for the total company increased by 9.5% in 2023 compared to the previous year[153]. - Net sales for 2023 reached $16,478 million, a 8.2% increase from $15,228 million in 2022[205]. - Approximately 20% of 2023 sales were from private label MRO items bearing Grainger's registered trademarks[37]. Financial Performance - Gross profit for 2023 was $6,496 million, reflecting an 11.1% increase, with a gross profit margin of 39.4%, up 100 basis points from the previous year[145]. - Operating earnings rose to $2,565 million in 2023, a 15.8% increase, while adjusted operating earnings increased by 18% to $2,591 million[147]. - Diluted earnings per share for 2023 were $36.23, representing a 20.5% increase from $30.06 in 2022[148]. - Net earnings attributable to W.W. Grainger, Inc. were $1,829 million in 2023, a 17.9% increase from $1,547 million in 2022[205]. - Total shareholders' equity increased to $3,441 million in 2023, up from $2,735 million in 2022[210]. Operational Metrics - As of December 31, 2023, Grainger employed over 26,000 team members, with approximately 85% located in North America[43]. - The company serves over 4.5 million customers globally, with no single customer accounting for more than 10% of total sales in 2023[27]. - Grainger's High-Touch Solutions N.A. segment primarily serves mid-size and large businesses with complex purchasing needs[28]. - Grainger's Endless Assortment segment includes Zoro, offering over 13 million products, and MonotaRO, providing access to more than 22 million products[32]. Supply Chain and Risk Management - The company has more than 5,000 primary suppliers worldwide, with no single supplier comprising more than 5% of total purchases in 2023[33]. - Disruptions in Grainger's supply chain could adversely affect its ability to meet customer demand, impacting sales and financial performance[59]. - Geopolitical tensions and related international responses could exacerbate inflationary pressures, impacting Grainger's ability to manage costs effectively[60]. - Grainger's exposure to foreign currency fluctuations could impact reported net sales and net earnings, particularly with currencies like the Japanese yen and euro[69]. Investments and Growth Strategy - Grainger is increasing investments in eCommerce platforms, focusing on technology information systems and digital advertising to enhance customer interactions and retention[75]. - The company is investing in artificial intelligence, machine learning, and large language model technologies to improve its eCommerce capabilities[76]. - The company expects to continue investing in supply chain capacity and technology enhancements as part of its growth strategy[178]. Employee and Diversity Initiatives - The company is committed to diversity, with approximately 39% of U.S. team members being women and 37% being racially and ethnically diverse[49]. - Grainger's ability to attract and retain key team members is critical for maintaining competitive advantage, facing challenges from rising wage rates and talent shortages[98]. Regulatory and Compliance Risks - The company is subject to various regulatory risks, including compliance with laws related to data protection and environmental standards, which could increase operational costs[104]. - Grainger's cybersecurity team actively manages risks, but unauthorized access incidents have occurred, which could impact financial condition[119]. Capital Structure and Shareholder Returns - As of December 31, 2023, Grainger's consolidated indebtedness was approximately $2.3 billion[112]. - Share repurchases amounted to $850 million in 2023, an increase from $603 million in 2022, with 2024 repurchases expected to be between $900 million and $1,100 million[179]. - Dividends declared and paid in 2023 totaled $392 million, compared to $370 million in 2022[180]. Economic and Market Conditions - Economic downturns and market uncertainties could negatively impact Grainger's customers, leading to reduced demand for its products and services[61]. - The company faces competition from large manufacturers, wholesale distributors, and online businesses, necessitating a strong response to market pressures[71].

NYSE: GWW Q4 2023 Earnings Call February 2, 2024 © 2024 W.W. Grainger, Inc. 2 Opening Remarks D.G. Macpherson Chairman and CEO © 2024 W.W. Grainger, Inc. 3 © 2024 W.W. Grainger, Inc. 3 Large scale creates significant complexity Safe Harbor Statement and Non-GAAP Financial Measures | --- | --- | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - The company finished the year with over $16.5 billion in sales, up 8.6% on a daily basis, or 9.5% in daily organic constant currency [25] - Adjusted EPS was up over 23% to $36.67 per share, with operating cash flow exceeding $2 billion [27] - Total company gross margin for the fourth quarter was 39.1%, declining by 50 basis points year-over-year, while operating margin increased by 80 basis points to 15.7% [29][30] Business Line Data and Key Metrics Changes - The High-Touch Solutions segment saw sales up 4.7% on both a reported and daily organic constant currency basis, with strong volume growth across all geographies [37] - The Endless Assortment segment's sales increased 6% or 8.2% on a daily constant currency basis, with Zoro U.S. up 2.6% and MonotaRO achieving 9.9% growth in local currency [40] - Operating margins for the Endless Assortment segment expanded by 50 basis points to 7.8% [41] Market Data and Key Metrics Changes - The U.S. MRO market grew between 2.5% and 3% in the quarter, largely driven by price, with industrial production remaining flat year-over-year [31] - B2B customer growth remained steady in the high single digits, while noncore B2C and B2C light customer performance declined over 20% year-over-year [33] Company Strategy and Development Direction - The company is focused on enhancing customer experience through investments in technology, supply chain, and high-touch growth engines [6][8] - Strategic investments are being made in capacity, automation, and sustainability initiatives to strengthen service advantages [19][24] - The company aims to achieve 400 to 500 basis points of U.S. market outgrowth in 2024, with expectations for daily constant currency sales growth between 4% and 7% [34][42] Management's Comments on Operating Environment and Future Outlook - Management expects a more muted market in 2024 but remains confident in the company's ability to deliver strong results [57] - The company anticipates continued improvements in supply chain efficiencies and a return to normal service levels [66] - The outlook for 2024 includes revenue expectations between $17.2 billion and $17.7 billion, with stable gross margins and operating margins remaining healthy [42][44] Other Important Information - The company updated its 2030 sustainability target to reduce absolute Scope 1 and 2 emissions by 50% from a 2018 baseline [23][24] - Grainger ranked third in the American Opportunity Index for commitment to developing internal talent and was named Glassdoor's 2024 Best Places to Work [21][22] Q&A Session Summary Question: What are the drivers of gross margin improvement since 2019? - Management noted improvements in product gross margins, pricing strategy execution, and supply chain efficiencies as key drivers [60] Question: What offsets are expected for the flat gross margin guidance in 2024? - Management indicated that a faster pricing environment and normalization of supply chain disruptions would help offset the expected decline [61] Question: Can you elaborate on the investments being made? - Investments are categorized into demand generation (SG&A) and capacity additions (capital expenditures), with a focus on improving service and cost efficiency [80] Question: What is the expected pace of share buybacks in 2024? - The company plans to maintain a stable pace for share buybacks throughout the year [90] Question: How does the company view opportunistic M&A? - Management emphasized a focus on organic growth but remains open to technology investments that align with strategic goals [78]

Financial Performance - Net sales for Q3 2023 reached $4,208 million, a 6.7% increase from $3,942 million in Q3 2022[11] - Gross profit for the nine months ended September 30, 2023, was $4,933 million, up 13.6% from $4,343 million in the same period of 2022[11] - Operating earnings for Q3 2023 were $667 million, representing a 10.6% increase compared to $603 million in Q3 2022[11] - Net earnings attributable to W.W. Grainger, Inc. for the nine months ended September 30, 2023, were $1,434 million, a 23.3% increase from $1,163 million in the same period of 2022[11] - Earnings per share (diluted) for Q3 2023 was $9.43, compared to $8.27 in Q3 2022, reflecting a 14.0% increase[11] - Comprehensive earnings attributable to W.W. Grainger, Inc. for the nine months ended September 30, 2023, were $1,395 million, compared to $1,034 million in the same period of 2022, reflecting a 35.0% increase[14] - Net earnings for the three months ended June 30, 2023, were $493 million, compared to $508 million for the same period in 2022[24] - Net earnings attributable to W.W. Grainger, Inc. for the three months ended September 30, 2023, were $476 million, an increase of $50 million or 12% from the previous year[76] Assets and Equity - Total assets as of September 30, 2023, increased to $8,140 million from $7,588 million at the end of 2022, marking a 7.3% growth[16] - As of September 30, 2023, the total shareholders' equity was $3,382 million, an increase from $2,735 million at the beginning of 2023[24] - The company reported a total of $11,859 million in retained earnings as of September 30, 2023, up from $10,700 million at the beginning of 2023[24] - Cash and cash equivalents at the end of Q3 2023 were $601 million, up from $325 million at the end of 2022[16] Cash Flow and Expenditures - Net cash provided by operating activities for the nine months ended September 30, 2023, was $1,427 million, compared to $973 million in the same period of 2022[19] - Capital expenditures for the nine months ended September 30, 2023, totaled $318 million, an increase from $208 million in the same period of 2022[19] - Cash dividends paid in the third quarter of 2023 were $106 million, with a dividend of $1.86 per share[24] Segment Performance - The High-Touch Solutions N.A. segment accounted for 81% of total company revenue for the three months ended September 30, 2023[33] - The Endless Assortment segment contributed 17% to total company revenue for the three months ended September 30, 2023[33] - Total net sales for the nine months ended September 30, 2023, accounted for 81% from High-Touch Solutions N.A. and 18% from Endless Assortment, compared to 80% and 18% respectively in 2022[35] - High-Touch Solutions N.A. segment net sales were $3,403 million, a 7% increase from $3,180 million in 2022, driven by a 3% price increase and a 6% volume increase[78] - Gross profit for the High-Touch Solutions N.A. segment was $1,418 million, up $127 million or 10%, with a gross profit margin of 41.7%[79] Expenses - Selling, general and administrative expenses for the three months ended September 30, 2023, were $988 million, an increase of $72 million or 8% compared to the same period in 2022[74] - SG&A expenses for the nine months increased to $2,925 million, up $253 million, or 9%, driven by higher marketing and payroll expenses[92] Debt and Financial Obligations - The Company’s total debt as of September 30, 2023, was $2,313 million, up from $1,972 million as of December 31, 2022[43] - The carrying amount of the MonotaRO term loan was $34 million as of September 30, 2023, down from $69 million as of December 31, 2022[47] - The estimated fair value of the Company's Senior Notes was based on external pricing data, with a carrying value of $2,260 million as of September 30, 2023[48] Shareholder Actions - The company repurchased a total of 285,565 shares in Q3 2023, with an average price of $732.26 per share in July, $714.07 in August, and $693.55 in September[129] - A quarterly dividend of $1.86 per share was declared on October 25, 2023, payable on December 1, 2023, to shareholders of record on November 13, 2023[61] - The maximum number of shares that may yet be purchased under the repurchase program is 1,987,944[129] Risk and Compliance - The company continues to face market risks related to foreign currency exchange and interest rates, with no material changes reported[123] - The company emphasizes that forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially[120] - The company has not experienced any material changes in its critical accounting estimates from the previous year[116] - There were no changes in the company's internal control over financial reporting that materially affected its reporting[125] Credit Ratings - As of September 30, 2023, the company's credit ratings are A2 from Moody's and A+ from S&P for corporate and senior unsecured ratings[113] Miscellaneous - The company has adopted a written plan for the sale of shares related to an equity award, set to expire on December 31, 2023[130] - There were no material changes to the company's commitments and other contractual obligations from the previous year[114] - The company’s management evaluated the effectiveness of its disclosure controls and procedures, concluding they were effective as of the end of the reporting period[124]

W.W. Grainger, Inc. (NYSE:GWW) Q3 2023 Earnings Conference Call October 26, 2023 11:00 AM ET Company Participants Kyle Bland - Vice President, Investor Relations D.G. Macpherson - Chairman and Chief Executive Officer Dee Merriwether - Senior Vice President and Chief Financial Officer Conference Call Participants Ryan Merkel - William Blair Tommy Moll - Stephens Inc. Jacob Levinson - Melius Research Christopher Glynn - Oppenheimer & Co. David Manthey - Robert W. Baird Nigel Coe - Wolfe Research Stephen Vo ...

Financial Performance - Net sales for Q2 2023 reached $4,182 million, a 9% increase from $3,837 million in Q2 2022[11] - Gross profit for the first half of 2023 was $3,278 million, up 16% from $2,824 million in the same period last year[11] - Net earnings attributable to W.W. Grainger, Inc. for Q2 2023 were $470 million, a 27% increase compared to $371 million in Q2 2022[11] - Earnings per share (diluted) for the first half of 2023 were $18.89, up 32% from $14.26 in the same period last year[11] - For the three months ended June 30, 2023, net sales increased to $4,182 million, up from $3,837 million in the same period of 2022, reflecting a growth of about 9%[56] - Gross profit for the same period was $1,644 million, up $203 million or 14%, with a gross profit margin of 39.3%, an increase of 170 basis points year-over-year[72] - Operating earnings for the three months ended June 30, 2023, were $661 million, reflecting a $127 million or 24% increase compared to the prior year[74] - For the six months ended June 30, 2023, net sales reached $8,273 million, an increase of $789 million or 10.6% compared to the same period in 2022[88] - Gross profit for the six months ended June 30, 2023, was $3,278 million, up $454 million or 16%, with a gross profit margin of 39.6%, an increase of 190 basis points year-over-year[89] - Net earnings attributable to W.W. Grainger, Inc. for the six months ended June 30, 2023, were $958 million, an increase of $221 million or 30% compared to the same period in 2022[93] Cash and Assets - Total assets as of June 30, 2023, increased to $8,031 million from $7,588 million at the end of 2022[17] - Cash and cash equivalents at the end of Q2 2023 were $515 million, compared to $325 million at the end of 2022[17] - Net cash provided by operating activities for the first half of 2023 was $904 million, an increase from $593 million in the same period last year[19] - Working capital as of June 30, 2023, was $3,144 million, an increase of $280 million compared to $2,864 million as of December 31, 2022[109] - As of June 30, 2023, property, buildings, and equipment net value was $1,485 million, an increase from $1,461 million as of December 31, 2022[38] - The balance of retained earnings increased to $11,477 million as of June 30, 2023, from $10,700 million at the beginning of the year[24] Segment Performance - The High-Touch Solutions N.A. segment accounted for 80% of total company revenue in the first half of 2023, while the Endless Assortment segment contributed 18%[36] - Net sales for the High-Touch Solutions segment for the six months ended June 30, 2023, were $6,649 million, an increase of $718 million or 12% compared to the same period in 2022[95] - Gross profit for the High-Touch Solutions segment for the six months ended June 30, 2023, was $2,795 million, an increase of $420 million or 18% compared to the same period in 2022[96] - Net sales for the Endless Assortment segment for the six months ended June 30, 2023, were $1,475 million, an increase of $59 million or 4% compared to the same period in 2022[100] Debt and Equity - The carrying value of total debt as of June 30, 2023, was $2,275 million, compared to $2,284 million as of December 31, 2022, indicating a slight decrease of about 0.4%[44] - The Company issued $2.3 billion in unsecured long-term debt (Senior Notes) between 2015 and 2020 to support working capital needs and share repurchases[45] - Total debt as a percent of total capitalization was 46.3% as of June 30, 2023, down from 49.9% as of December 31, 2022[110] - A total of 244,299 shares were repurchased in Q2 2023, with an average price of $671.69 per share[131] - The maximum number of shares that may yet be purchased under the share repurchase program is 2,273,085[131] - The share repurchase program authorized the repurchase of up to 5 million shares with no expiration date[131] Operational Insights - The increase in SG&A expenses for the three months ended June 30, 2023, was primarily due to higher marketing and payroll expenses, totaling $983 million, an increase of 8.4% from the previous year[74] - SG&A expenses for the six months ended June 30, 2023, were $1,937 million, an increase of $181 million or 10% compared to the same period in 2022[91] - The Company has implemented strategies to mitigate the adverse effects of inflation and maintain market price competitiveness[68] - The Company continues to monitor macroeconomic pressures, including inflation and recession fears, which may impact its business operations[68] Compliance and Controls - Grainger's disclosure controls and procedures were evaluated as effective by the CEO and CFO as of the end of the reporting period[125] - There were no changes in Grainger's internal control over financial reporting for the quarter ended June 30, 2023[126]

| --- | --- | --- | |-------|---------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------| | | Progressing on our near-term ESG initiatives Customer sustainability solutions | $ 1 B Revenue from Environmentally Preferable Products in HTS – U.S. | | | Supplier diversity | $ 2 B Spent on products from underrepresented business (1) > | | | Energy and emissions | 26 % Reduction in t ...

Financial Data and Key Metrics Changes - The company reported strong daily sales growth of 10.1% on a daily constant currency basis for Q2 2023, although year-over-year growth rates have decelerated compared to Q1 [11][17] - Total company operating margin increased by 190 basis points to 15.8%, driven by improved gross margin performance and strong top-line growth [32][109] - Diluted EPS for the quarter was $9.28, reflecting a 29% increase compared to Q2 2022 [109] Business Line Data and Key Metrics Changes - The High-Touch Solutions segment saw daily sales growth of 9.9%, with revenue growth across all geographies, although year-over-year growth rates slowed [35] - The Endless Assortment segment experienced a sales increase of 4.5%, with Zoro U.S. up 2.8% and MonotaRO achieving 12.6% growth in local currency [38] - The High-Touch North American segment's gross profit margin finished at 41.7%, up 200 basis points year-over-year, while operating margin improved by 230 basis points [36][37] Market Data and Key Metrics Changes - The U.S. MRO market is estimated to have grown between 4.5% and 5%, with the company achieving approximately 525 basis points of outgrowth in the quarter [14] - Positive growth was noted in nearly all customer end segments, with strong performance in government and healthcare, countering softness in manufacturing and commercial services [12] Company Strategy and Development Direction - The company is focused on advancing its proprietary product and customer information management systems to fuel growth and enhance marketing and merchandising efforts [8] - Plans to construct a new 500,000 square foot distribution center in Oregon and three smaller distribution centers in Pennsylvania, Texas, and North Carolina are aimed at meeting strong customer demand and improving service capabilities [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve profitable growth and strong results for shareholders, raising the midpoint of the full-year 2023 outlook [17][19] - The company anticipates a decline in margin rates in Q3 due to the unwinding of a one-time supplier rebate and continued investments in demand generation [42] Other Important Information - The company returned a combined $265 million to shareholders through dividends and share repurchases in the quarter [32] - The company is committed to sustainability, having helped customers avoid approximately 4,000 tons of CO2 emissions through its sustainability services [6] Q&A Session All Questions and Answers Question: Can you provide details on the distribution center in Oregon? - The company plans to break ground in a couple of weeks, with the building expected to be fully operational by 2025. This expansion is necessary due to outgrowing existing facilities and aims to improve service and reduce transportation costs [47] Question: Can you elaborate on the B2B deceleration in Zoro? - The deceleration is attributed to Zoro's focus on smaller businesses, which are experiencing more softness compared to larger customers served by the High-Touch model. The company is working to increase repeat purchase rates among core B2B customers [70] Question: How should we think about price/cost dynamics moving forward? - Price/cost was slightly negative in the quarter, and the company expects this trend to continue into the second half of the year as favorable pricing from the previous year unwinds [56][78] Question: What is the outlook for gross margins in the second half? - The company expects gross margins to decline slightly due to the unwinding of price/cost dynamics, but remains confident in achieving long-term targets [72][76] Question: How are inventory levels being managed post-pandemic? - The company aims to maintain service levels while managing wasteful inventory, with expectations to return to historical inventory-to-revenue ratios as supply chain disruptions stabilize [87]

Safe Harbor Statement and Non-GAAP Financial Measures Additional information relating to certain non-GAAP financial measures referred to in this presentation including: daily sales; daily sales in constant currency; daily sales in constant currency and local days; free cash flow; adjusted return on invested capital; adjusted EBITDA; and net leverage ratio, is available in the appendix to this presentation. This communication also includes certain non-GAAP forward-looking information (including, but not limi ...