WESCO International Dave Schulz SVP and CFO Raymond James 38 th - PowerPoint PPT Presentation

WESCO International Dave Schulz SVP and CFO Raymond James 38 th Annual Institutional Investors Conference March 6 - 8, 2017

Raymond James 38 th Annual Institutional Investors Conference, March 6 - 8, 2017 Safe Harbor Statement 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, uncertainties and other factors that may cause actual results to differ materially. Such risks, uncertainties and other factors include, but are not limited to: adverse economic conditions; disruptions in operations or information technology systems; product, labor or other cost fluctuations; supply chain disruptions or loss of key suppliers; expansion of business activities; exchange rate fluctuations; tax law changes or challenges to tax matters; increase in competition; risks related to acquisitions, including the integration of acquired businesses; litigation, disputes, contingencies or claims; legal or regulatory matters; debt levels, terms, financial market conditions or interest rate fluctuations; goodwill or intangible asset impairment; common stock dilution; and other factors described in detail in the Form 10-K for WESCO International, Inc. for the year ended December 31, 2016 and any subsequent filings with the Securities & Exchange Commission. The following presentation includes a discussion of certain non-GAAP financial measures. Information required by Regulation G with respect to such non-GAAP financial measures can be found in the appendix and obtained via WESCO’s website, www.wesco.com. 2

Raymond James 38 th Annual Institutional Investors Conference, March 6 - 8, 2017 WESCO Overview Competitive Vision Performance Differentiators Goals The global leader in supply chain solutions addressing Grow faster than Product portfolio customers’ MRO, OEM and the market capital project demand streams Double digit Service capabilities Strategy EPS growth Accelerate One WESCO Free cash flow Global footprint Growth Initiatives 90%+ of net income Strengthen Product and Services Portfolio Superior investor Streamline Business Talent and culture returns Global Supply Chain Management Effective Capital Allocation 3

Raymond James 38 th Annual Institutional Investors Conference, March 6 - 8, 2017 Financial Performance Adjusted EPS Sales 6% 7% CAGR CAGR ($ Billions) ($) 7.9 7.5 7.5 7.3 5.02 5.18 6.6 3.96 4.38 6.1 4.18 3.80 5.1 2.50 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016 Free Cash Flow 109% of Total Shareholder Return Adjusted Net Income on Average ($ Millions) (January 1, 2010 through February 28, 2017) 186% 191% 308 282 157% 158% 265 261 231 122% 112% 113% 90% 134 112 WCC RXL AXE MSM FAST GWW RUT S&P 2010 2011 2012 2013 2014 2015 2016 Note: See appendix for non-GAAP reconciliations. …solid long-term performance 4

Raymond James 38 th Annual Institutional Investors Conference, March 6 - 8, 2017 Competitive Differentiator: Product Portfolio Product Categories End Markets 8% 14% 11% 40% 16% 36% 12% 14% 34% 15% Industrial General Supplies Communications & Security Construction Wire, Cable & Conduit Utility Lighting & Sustainability CIG Electrical Distribution & Controls Automation, Controls & Motors …providing world class brands to diverse end markets 5

Raymond James 38 th Annual Institutional Investors Conference, March 6 - 8, 2017 Competitive Differentiator: Service Capabilities Value Drivers Expand service offerings: Service • Storeroom services Offerings • Inventory management ~25% • Logistics • Warehousing • Kitting/pre-assembly • Labor and supply chain outsourcing 2016 • Capital project management $7.3B Sales • IT procurement solutions …providing a comprehensive service value proposition for customers 6

Raymond James 38 th Annual Institutional Investors Conference, March 6 - 8, 2017 Competitive Differentiator: Global Footprint Value Drivers • Accelerate One WESCO growth strategy with blue- chip customers • Extend service capabilities WESCO locations • Grow organically through Countries Employees local presence 9,000 17 5,300 • Further expand through 7 bolt-on acquisitions 2004 2016 2004 2016 …expanding globally with blue-chip customers 7

Raymond James 38 th Annual Institutional Investors Conference, March 6 - 8, 2017 Competitive Differentiator: Talent Management Strategy Value Drivers CEO • Streamline the organization CFO CHRO GC • One U.S. business leader • New Global Sales and Marketing Lean organization Global Functions: Businesses: – End-market leaders U.S. Global Sales & U.S. – Product category managers CFO Marketing – eCommerce development Canada Canada eCommerce • New Global Supply Chain and CFO Operations organization Global Supply International Chain & International • New Chief Information Officer (CIO) Operations CFO • Strengthened finance capabilities Integrated Integrated CIO Supply Supply CFO within geographic businesses New function …talent is our differentiating value creator 2014-16 changes: New leader 8

Raymond James 38 th Annual Institutional Investors Conference, March 6 - 8, 2017 Competitive Differentiator: Continuous Improvement Culture WESCO Lean Journey • Enterprise-wide application and results – Focus on sales, operations and transactional processes – Industry-leading value creation Pull system for continuous program for customers improvement to drive business results by engaging employees at • Lean leadership, culture and all levels to be customer focused, certification programs process minded, relentless in waste • Dedicated field resources driving reduction, and empowered to lead increase in kaizens positive change. • A distinct, competitive differentiator …accelerating Lean inside and outside the company 9

Raymond James 38 th Annual Institutional Investors Conference, March 6 - 8, 2017 Strategy: One WESCO Global Sales and Marketing Priorities Priorities • Integrating all our efforts around customers • Focusing on profitable organic growth opportunities • Branding, demand creation Integrate our portfolio of products, programs, and marketing leverage services, and supplier • Sales and specialist training and relationships into comprehensive solution selling supply chain solutions for our • Refining management incentive and customers’ global MRO, OEM, sales force compensation plans and capital project needs. …to expand our global customer base and relationships 10

Raymond James 38 th Annual Institutional Investors Conference, March 6 - 8, 2017 Strategy: Capitalize on Growth Markets Critical Infrastructure Cloud Computing Protection Intelligent Buildings LED Lighting Retrofit Alternative Energy Physical Security Broadband Industrial Networking Communications …developing core competencies and resources in growth markets 11

Raymond James 38 th Annual Institutional Investors Conference, March 6 - 8, 2017 Strategy: Acquisitions Strategy and Priorities Cumulative 1,900 2,000 Acquired Sales 1,500 1,600 ($M, first 12 months) • Consolidate core electrical 1 Markets & products and services Customers category in North America Geographies 400 325 • Expand into adjacent product 2 and services categories 2010 2011 2012 2014 2015 2016 • Follow customers globally 3 # 2 2 4 3 3 1 Core Products & and establish local operations Suppliers in high priority countries. Acquired Sales by End Market since 2010 Acquisition Criteria CIG  Consistent with WESCO strategy Industrial  Rate of return greater than WESCO Utility risk-adjusted average cost of capital  Construction Accretive in first year of operation  Margins higher than WESCO …driving strategic growth and shareholder value 12

Raymond James 38 th Annual Institutional Investors Conference, March 6 - 8, 2017 Strategy: Global Supply Chain Management Strategy Customer Service • Simplify and streamline business − Lean processes − Optimize footprint Safety • Supply chain management − Optimize supply base Operations − Leverage purchasing − Manage inventory • Improve pricing Transportation − Optimize with tools and analytics − Measure with KPIs Network Optimization …center on Lean applications across the supply chain 13

Raymond James 38 th Annual Institutional Investors Conference, March 6 - 8, 2017 Strategy: Effective Capital Allocation Leverage (Total Par Debt to TTM EBITDA) Cash Deployment > $1B of free cash flow over last 4 years • Support organic growth 4 Target Leverage 2.0x – 3.5x • Fund accretive acquisitions 3.5 3.5X 3 • Reduce financial leverage 2.5 • Share repurchases 2 • Dividends 1.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 Note: See appendix for non-GAAP reconciliations. …maintaining fiscal discipline while funding growth 14