UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 7, 2017
WESCO International, Inc.
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation) | 001-14989 (Commission File Number) | 25-1723342 (IRS Employer Identification No.) | ||
225 West Station Square Drive Suite 700 Pittsburgh, Pennsylvania (Address of principal executive offices) | 15219 (Zip Code) | |||
(412) 454-2200
(Registrant's telephone number, including area code)
Not applicable.
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | ||||
Emerging growth company o | ||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o | ||||
Item 7.01. | Regulation FD Disclosure |
The information in this Item 7.01 is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Item 7.01 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
On June 7, 2017, members of senior management of WESCO International, Inc. (the "Company") will present to investors at the Company's Investor Day 2017. The presentation will include written communication comprised of slides and will be accessible on the Company's website. The slides from the presentation are attached hereto as Exhibit 99.1 to this report and are being furnished in accordance with Regulation FD of the Securities and Exchange Commission.
Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits
The following are furnished as exhibits to this report.
99.1 Slide presentation for investors
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
June 7, 2017 | WESCO INTERNATIONAL, INC. | |||
(Date) | ||||
By: | /s/ David S. Schulz | |||
David S. Schulz | ||||
Senior Vice President and Chief Financial Officer | ||||
2017 INVESTOR DAY
WESCO International
2017 Investor Day
June 7, 2017
2
2017 WESCO INVESTOR DAY
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; supply chain disruptions, changes in supplier strategy or loss of key suppliers; product or
other cost fluctuations; expansion of business activities; personnel turnover or labor cost increases; tax law
changes or challenges to tax matters; increase in competition; risks related to acquisitions, including the integration
of acquired businesses; exchange rate fluctuations; legal or regulatory matters; litigation, disputes, contingencies or
claims; debt levels, terms, financial market conditions or interest rate fluctuations; goodwill or intangible asset
impairment; stock market, economic or political instability; 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.
2017 INVESTOR DAY
John Engel
Chairman, President, and Chief Executive Officer
Welcome and WESCO Overview
4
2017 WESCO INVESTOR DAY
2017 WESCO Investor Day Agenda
Cocktail Reception immediately following
Investor Day begins at 1:00 p.m.
Welcome and WESCO Overview John Engel, Chairman, President and Chief Executive Officer
United States Andy Bergdoll, Group Vice President and General Manager, United States
WESCO’s End Markets
Utility and Commercial, Institution, & Government Andy Bergdoll, Group Vice President and General Manager, United States
Industrial Kevin Kerby, Vice President, Global Accounts
Construction Les Kebler, Group Vice President and General Manager, International
Break
Canada Nelson Squires, Group Vice President and General Manager, Canada
Supply Chain and Operations Hemant Porwal, Vice President, Global Supply Chain and Operations
Financial Update Dave Schulz, Senior Vice President and Chief Financial Officer
Q&A and Closing Remarks John Engel, Chairman, President and Chief Executive Officer
5
2017 WESCO INVESTOR DAY
WESCO: A Leading Global Supply Chain Solutions Provider
Capital Projects MRO OEM
…providing world-class brands and industry-leading service capabilities
Founded
1922 in
Pittsburgh, PA
$7.3 Billion in
Revenue
One of the world’s largest distributors
of electrical, industrial, and
communications products and services
#357 of the
Fortune 500
9,000
employees
Including new construction and
retrofits, renovations, and upgrades
6
2017 WESCO INVESTOR DAY
WESCO’s Go-to-Market Strategy
Capital
ProjectsMRO
OEM
WESCO Characteristics
…providing full supply chain solutions to meet customers’ unique requirements
Serving Three Customer Demand Streams
Supporting a broad range of business models:
Standard
Distribution Model
Supply Chain
Solutions Partner • Integrated Supply
• Global Accounts
• Kitting, assembly and pre-fabrication
• Jobsite and field support
• Engineering and design support
• Local, branch-based distribution
500
Branches
75,000
Customers
1,000,000
SKUs
7
2017 WESCO INVESTOR DAY
WESCO’s Value Proposition
• Long-term customer relationships and
deep familiarity with their operations
– Gaining additional business with
existing customers
• Better outcomes for our customers
– Identifying opportunities
– Selecting the best solution
– Reducing their project and
operating risks
– Increasing their productivity and
reducing their costs
– Supporting their global operations
– Simplifying their supply chains and
outsourcing non-core activities
Combining our competitive
differentiators…
• A broad product portfolio
• Technical expertise and a wide
range of service offerings
• Blue-chip customer and supplier
base
• A global footprint
• A culture of customer service
excellence, cost control, and
lean continuous improvement
…driving deeper customer relationships than traditional distributors and e-commerce providers
…into customized supply
chain solutions
…that result in:
8
2017 WESCO INVESTOR DAY
…WESCO adds value throughout the supply chain
CUSTOMERS NEED:
Procurement
Warehousing /Logistics
Technical expert knowledge
An efficient supply chain with
fewer suppliers
WESCO OFFERS:
• Deep customer relationships
• Product, process, and
technical expertise
• Increased scale
• Global sourcing
• Financial strength and liquidity
SUPPLIERS NEED:
Sales
Marketing
Delivery
Service
(1) Data Source: National Association of Electrical Distributors, 2017 NAED Market Overview, April 2017.
Approximately 75% of electrical products
go to market through distribution(1)
The Importance of the Distributor
9
2017 WESCO INVESTOR DAY
…providing world class brands when and where needed
Competitive Differentiator:
Product Portfolio and Supplier Relationships
Automation, Controls
& Motors
8%
Lighting &
Sustainability
12%
General
Supplies
40%
Communications
& Security
15%
Wire, Cable &
Conduit
14%
Electrical Distribution
& Controls
11%
10
2017 WESCO INVESTOR DAY
…value-added services drive customer loyalty and long-term relationships
Competitive Differentiator: Service Capabilities
2016 Sales: $7.3B
Our services and
technical expertise
drive the majority of
our product sales
Capital Project Solutions
Supply Chain Solutions
Technical Expert Solutions
Customized Product Solutions
All Other Sales
11
2017 WESCO INVESTOR DAY
…enabled by investments in technical expertise and digital capabilities
Service Capabilities Examples
Supply Chain Solutions
• Integrated Supply
• Global sourcing
• Warehousing and logistics
• Storeroom management
• Vendor-managed inventory
• Transaction cost review
Capital Project Solutions
• Engineering and design support
• Lean construction processes
• Materials management
• Pre-fabrication and assembly
• Jobsite trailers and “WESCO on
Wheels” customized carts
Technical Expert Solutions
• Energy usage analysis
• Lighting renovation and retrofit
• Data center assessment
• Automation upgrades
• Safety assessment and training
• Product and application training
Customized Product Solutions
• Kitting
• Assembly
• Prefabricated systems
• Cable management
• Process streamlining
12
2017 WESCO INVESTOR DAY
WESCO Performance Objectives and Strategies
• Focus on growth markets
• Accelerate One WESCO
growth initiatives
• Differentiate through
services
• Leverage digital
capabilities
• Make accretive
acquisitions
…focused on driving profitable growth and shareholder value
Generate strong free cash flow
and allocate capital to drive
growth and shareholder returns
Expand
margins
Drive above-market
sales growth
• Grow with strategic
suppliers
• Simplify and standardize
product offerings
• Drive pricing discipline and
tools
• Optimize distribution
network
• Tightly manage operating
costs
Performance
Objectives:
Strategies: • Invest in organic growth and
acquisition opportunities
• Manage debt within target
range
• Repurchase shares
13
2017 WESCO INVESTOR DAY
Drive Above-Market Sales Growth:
Evolution of WESCO’s Digital Capabilities
Drive Customer Adoption
• Dedicated eCommerce team
• Focus on current WESCO customers and business models
• Improved user experience
• Easier to transact business
Value-Added
Offerings
Standard Offerings
Digital Service Offerings
Develop New Revenue
• Win business with digital capabilities
• Develop new digital service offerings
• Mobile e-Stock application
• Custom websites
• 2nd tier fulfillment
• Custom applications
• eCommerce Website
• Punch-out and EDI
…using digital capabilities to drive customer sales, retention, and value
14
2017 WESCO INVESTOR DAY
Drive Above-Market Sales Growth:
Make Accretive Acquisitions
325 400
1,500 1,600
1,900 2,000
2010
2
2011
2
2012
4
2014
3
2015
3
2016
1
Acquisition Criteria
Consistent with WESCO strategy
Rate of return greater than WESCO risk-adjusted average
cost of capital
Accretive in first year of operation
Margins higher than WESCO
Cumulative Acquired
Sales
($M, first 12 months)
#
…driving strategic growth and shareholder value
Strategy and Priorities
Acquired Sales by End Market since 2010
CIG
Industrial
Utility
Construction
Consolidate core electrical products and
services category in North America
Expand into adjacent product and services
categories
Follow customers globally and establish local
operations in high priority countries.
Markets &
Customers
Geographies
Products &
Suppliers
Core
1
2
3
15
2017 WESCO INVESTOR DAY
Acquisitions Have Strengthened WESCO
TVC
Communications
(2010)
EECOL Electric
(2012)
Aelux / Lumigent
(2015)
Communications
Supply
Corporation (2006)
Carlton-Bates
(2005)
…expanding our portfolio and capabilities while increasing market share
AED
Hill Country
Needham
(2015-2016)
BROADBAND
COMMUNICATIONS
ENTRY
ELECTRICAL
EXPANSION
TURNKEY LIGHTING
SOLUTIONS
DATACOM
ENTRYOEM ENTRY
CONSTRUCTION
STRENGTHENING
• Broadband
communications
markets
• New products and
suppliers
• Doubled the size of
WESCO’s Canadian
business
• Added new electrical
supplier
• Established leading
market share position
in Canada
• Optimal lighting
solutions for new
construction and
retrofit/renovation/
upgrades
• Expanded service
offerings
• IT, communications
and security markets
• Data communications
solutions and new
suppliers
• IP security solutions
• Value-added
distribution
• New products and
suppliers
• Construction
markets in U.S.
• Added new
electrical supplier
• Strengthened
geographic
footprint
16
2017 WESCO INVESTOR DAY
2017 Priorities
• Return to sales growth
−Outperform end markets with One WESCO sales growth initiatives
− Invest in and capitalize on growth markets
−Maintain focus on execution and sales effectiveness
• Make accretive acquisitions to strengthen portfolio and take market share
• Sustain and expand operating margin
− Improve margin through pricing and sourcing initiatives
− Deliver productivity through LEAN operational excellence initiatives, organizational
streamlining and branch network optimization efforts
• Maintain strong free cash flow generation and flexible capital structure
…outperform the market while maintaining cost and cash management discipline
17
2017 WESCO INVESTOR DAY
Key Messages
WESCO’s Businesses
and End Markets
• Significant growth markets and opportunities exist across businesses
• Executing plans to drive above-market sales growth
• Using services as a key differentiator
Supply Chain and
Operations
• Significant opportunity to further improve our operations and supply chain
• Executing plans to improve margins
Financial Overview
• 2017 update…on track and building momentum
• Long-term growth algorithm remains intact
• Free cash flow generation supports growth plans and drives shareholder
value creation
2017 WESCO Investor Day Agenda
…focused on growth and execution
2017 INVESTOR DAY
Andy Bergdoll
Group Vice President, United States
United States
19
2017 WESCO INVESTOR DAY
Packaging MROP Electrical Construction Controls Datacom Material
Handling
Chemicals Power
Transmission
Welding/
Gases
Plastics Fluid
Power
Rubber
Products
Steel
$117
$81 $77
$50 $43
$29 $27 $25
$16 $13 $11 $9 $8 $8
Market Opportunity
…large fragmented market provides opportunities for growth and expansion
U.S. MRO Supply Market $500B | WESCO Addressable Market ~$200B
Source: Modern Distribution Management (MDM Analytics Market Prospector), April 2017
Electrical Plastics Steel Construction Datacom Power
Transmission
Controls Chemicals Fluid Power Other
$93
$36 $33 $28
$16 $16 $14 $13 $9 $7
WESCO addressable market
U.S. OEM Market $300B | WESCO Addressable Market ~$100B
20
2017 WESCO INVESTOR DAY
37%
29%
18%
15%
42%WESCO 2016 U.S. Sales by
End Market ($5.6B)
2017 outlook: flat to LSD sales increase
Utility
CIG
Construction
Industrial
United States
WESCO Organic Sales Growth
vs. Prior Year
-6%
-3%
-5%
-4%
-2%
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
Strategic Priorities
• Achieve above-market organic
sales growth
• Leverage our technical expertise,
supplier relationships and scale
• Expand our industry-leading
service offerings
• Expand capabilities to serve high
growth and emerging markets
• Deploy digital tools to drive
efficiency and effectiveness
across the supply chain
• Optimize our distribution network
for greater service and efficiency
Note: See appendix for non-GAAP reconciliations.
21
2017 WESCO INVESTOR DAY
United States
…a market leader with an extensive national footprint
INFRASTRUCTURE
350 Branches
5 Regional Distribution Centers
4 Platform Distribution Centers
4 Assembly Operations
(includes Saltillo, Mexico)
BUSINESS MODELS
• Local, branch-based
distribution
• Engineering and design
support
• Jobsite and field support
• Kitting, assembly, and
pre-fabrication
• Global Accounts
• Integrated Supply
22
2017 WESCO INVESTOR DAY
…the portfolio and expertise to capitalize on new and specialized market growth opportunities
U.S. Growth Opportunities
UTILITY CIGINDUSTRIAL CONSTRUCTION
Alternative
energy
Utility
infrastructure
Grid
automation
Supply chain
services
OEM and
direct materials
Internet of Things
LED lighting/
lighting renovation
Major projects
Project services
Critical
Infrastructure
Cloud
computing
Broadband / FTTX
Digital
transformation
WESCO initiatives to
support growth
• Sales effectiveness
• Account management
• Integrate service capabilities
• Project Centers of
Excellence
• Contractor / integrator
partnership programs
• New account development
2017 INVESTOR DAY
Andy Bergdoll
Group Vice President, United States
Utility
24
2017 WESCO INVESTOR DAY
WESCO Opportunities
• Industry investments in grid
hardening, security, generation
fleet conversion to gas, alternative
energy integration, and
transmission capacity expansion
• Emerging opportunities in street
light conversions,
broadband/FTTX, grid automation
• Accelerating outsourcing trends
for supply chain services
• Continued expansion of current
and new Alliance accounts
• Expand footprint in Canada
42%WESCO 2016 Utility Sales
(% of Total)
2017 outlook: flat to LSD sales increase
Utility End Market
WESCO Organic Sales Growth
vs. Prior Year
1% 1%
-2%
3%
6%
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
(1) Excludes the impact of the contract WESCO elected to exit in 2016.
• Investor Owned
• Public Power
• Utility Contractors
16%
• 89% U.S.
• 10% Canada
• 1% International
Note: See appendix for non-GAAP reconciliations.
-5%
(1)
25
2017 WESCO INVESTOR DAY
WESCO Utility
Utility Sales by Power Chain Segment • Utility Sales by Customer Segment
DistributionTransmission /
Substation
Generation Utility Contractor
Public Power
Investor-Owned
Utility (IOU)
…addressing the entire power chain through each customer segment
• Low projected load growth – electricity demand growth offset by
efficiency gains
• Generation mix change - Replacing coal and nuclear with natural gas
and renewables
• Infrastructure spending holding at historically high levels
• Continued investment in automation and reliability
• Communications infrastructure investments continuing
• Integration of renewables onto the grid
• Declining revenues and rising costs driving changes in Utility
operating models
• Cost savings and productivity programs becoming standard
• Workforce demographic changes opening opportunities for
outsourcing
• Continued utilization of Utility contractors for infrastructure projects
• IOUs focusing on regulated business – selling generation assets,
acquiring gas utilities and gas pipeline infrastructure
26
2017 WESCO INVESTOR DAY
Utility Services Portfolio
Service Offerings
Generation Transmission/
Substation
Distribution
Grid
1 Sourcing and Category Management
2 Procurement and Expediting
3 Inventory Optimization
4 Point of Use Programs
5 Cross-Dock and Logistics
6 Warehouse and Site Operations
7 Data and Transaction Integration
8 Bill of Material Development
9 Project Material Sourcing
10 Packaging, Kitting, Sub-Assembly
11 Project Materials Requirements Management
12 Site Materials Management
13 Cable Management
14 Site Warehousing and Logistics
Supply
Chain
Project
…broadest services portfolio serving the electric utility marketplace
• Procurement cost savings
opportunities
• Productivity and efficiency
savings
• Business process
improvement
• Resource availability
• Business process outsourcing
Customer Value Proposition
27
2017 WESCO INVESTOR DAY
Utility Products Portfolio
Product Categories
Generation Transmission/
Substation
Distribution
Grid
1 T&D Components
2 Wire/Cable/Conduit
3 Equipment and Apparatus
4 Electrical MRO
5 Communication and Security
6 Outdoor Lighting
7 Industrial MRO, Tools and Supplies
8 Safety
9 Pipes, Valves, and Fittings
10 Power Transmission and Bearings
11 Controls and Instrumentation
12 Fasteners
13 Packing, Gaskets, Seals
14 Poles, Structures
15 Major Equipment
16 OEM, Spares
Core
2nd
Tier
…broadest product portfolio serving the electric utility marketplace
• Access to a broad range of
products and suppliers
• National scale with local support
• Commitment to customer
service
• Category management cost
savings opportunities
• Technical support and service
offerings
Customer Value Proposition
Mfr.
Direct
28
2017 WESCO INVESTOR DAY
SOURCING &
PROCUREMENT
• Leverage spend
• Automated orders /
VMI
• e-Catalogs
• Supplier Management
• Catalog clean-up
and SKU reduction
INVENTORY
MANAGEMENT
• Centralize placement
• Optimized inventory
levels
• VMI and vending
• Integrated demand
planning
• Safety and storm stock
programs
WAREHOUSING &
LOGISTICS
• Centralized cross-docking
• Route rationalization
• Materials quality assurance
• Reclamation support
• Kitting
• Shipment surge plan
…innovative program has driven above-market growth
WESCO Utility Integrated Supply Program
85%
OPERATIONAL
EFFICIENCY
SAVINGS
15%
MATERIAL
COST
SAVINGS
29
2017 WESCO INVESTOR DAY
Success Story – Utility
Investor-Owned Utility
Modernizing and Upgrading Infrastructure
BACKGROUND
• A customer’s transmission and distribution infrastructure required a $1.4B investment to modernize and upgrade. The
customer did not want to invest in non-core infrastructure, temporary facilities, or personnel to manage the project.
SCOPE
• The customer chose WESCO to provide a full range of services, including:
̵ Project management and coordination with the customer, other suppliers,
contractors and WESCO-managed suppliers
̵ Demand planning, materials procurement and management
̵ Project kitting
̵ Investment recovery
̵ On-demand reporting
OUTCOME
̵ New agreement provides ~$200 million in incremental revenue opportunity
over its six-year term
…enabled the customer to outsource a significant non-core project investment
30
2017 WESCO INVESTOR DAY
Success Story – Utility
Public Power
Integrated Supply
BACKGROUND
• A long-time WESCO customer decided to adopt a category management philosophy to drive material cost savings.
WESCO was invited to present our category management competencies as well as our service offerings.
• We executed a new Supply Chain Services agreement to deliver the desired material cost savings, as well as
complementary services to drive increased operational efficiency and reduced working capital.
SCOPE
• Our One WESCO capabilities will support this new customer’s generation, transmission and
distribution businesses, including:
̵ Category management and procurement of T&D and MRO supplies
̵ Demand and Inventory planning to achieve working capital reductions
̵ Management of multiple second-tier suppliers
̵ Vending and Point-of-Use solutions
̵ Integrated KPI reporting and management
OUTCOME
• Transitioned customer relationship from individual bid transactions into to a 5+ year integrated
supply agreement, significantly expanding our scope and opportunities for growth with this customer.
…converted a transactional into a strategic customer relationship
2017 INVESTOR DAY
Andy Bergdoll
Group Vice President, United States
Commercial, Institution, and Government (CIG)
32
2017 WESCO INVESTOR DAY
WESCO Opportunities
• Large, fragmented, and diverse
market provides wide range of
growth opportunities
• Increased infrastructure spending
expectations in the U.S. and
Canada
• Favorable market trends in data
centers, security and mobility
• WESCO is one of two globally
enabled data communications and
security distributors
• Emerging market for WESCO
services portfolio
42%WESCO 2016 CIG Sales
(% of Total)
2017 outlook: LSD to MSD sales increase
Commercial, Institution & Government (CIG) End Market
WESCO Organic Sales Growth
vs. Prior Year
0% 1%
-2%
-6%
-2%
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
• Commercial
• Institutional
• Government
• 83% U.S.
• 11% Canada
• 6% International
14%
Note: See appendix for non-GAAP reconciliations.
33
2017 WESCO INVESTOR DAY
CIG Customer Segments and Solutions
• Enterprise
• Retail
…providing a full range of solutions to a variety of end users
GovernmentCommercial Communication Service Providers
Data
Service Providers Institution
• Internet and Cloud
services (data centers)
• Outsourced data center
facilities and services
• Software and
Infrastructure as a
Service
• Healthcare
• Education
• Federal
• Defense
Contractors
• State and Local
• Telco and Multi-
System Operators
• Cable and
Broadband
• Broadcast and
Satellite
• Communication and IT infrastructure
solutions
• Lighting and energy efficiency solutions
• Electrical distribution and control
• Head end and Central Office solutions
• Outside Plant Network solutions
• Data center infrastructure products and solutions
• Physical security and surveillance technology
• Auto-visual solutions
• FTTx infrastructure solutions
• Cellular Backhaul and Wi-Fi infrastructure solutions
• IoT – sensor/Data analytics/Artificial intelligence solutions
PRODUCT & SERVICES SOLUTIONS
• Project Services
• Supply Chain services
• Multi-site technology roll out support
services
• Turnkey renovation project delivery
• Diversity programs
34
2017 WESCO INVESTOR DAY
…well-positioned to grow with expanding demand for technology
Communications & Security
Lighting & Sustainability
Wire, Cable & Conduit
Electrical Distribution & Controls
Automation, Controls & Motors
General Supplies
By Product
WESCO CIG Opportunities
Demand Drivers
• Expanding demand for broadband and data center capacity and
infrastructure
• LED lighting retrofit, renovation, and upgrades
• Security and A/V technology upgrade and IT integration
• Increasing relevance of solar and energy efficiency programs
• Government and Institution contract vehicles
• Alternative sales models to access state, local, education and
light commercial market
• Contractor/integrator supply chain services and partnership
programs
35
2017 WESCO INVESTOR DAY
Success Story – Security
BACKGROUND
• School district with 21,000 students and dozens of buildings and
campuses
• Their legacy system did not allow for high-quality imagery or on-demand
viewing of events, creating a significant challenge in ensuring the safety
of students, faculty and visitors
• Law enforcement did not have access to the legacy system, slowing
response time
WESCO’s SOLUTION
• The WESCO security team pulled together a specialty security integrator
and world-class security manufacturers to address this customer’s
problem
• WESCO proposed and implemented a holistic IP-based digital security
solution that included cameras, servers, software, network infrastructure
and much more
…24/7/365 digital surveillance providing increased safety for students, faculty and visitors
Independent K-12 School District
Keeping Schools Safe
36
2017 WESCO INVESTOR DAY
Success Story – Datacom
BACKGROUND
• Global technology customer is building and expanding datacenters in 10 countries.
• WESCO provides datacom, security and electrical products, along with project
management, design and global logistics services.
– Our model includes in-country and regional support structures for rapid
deployment, scalability, global sourcing and local inventory.
– This enables consistent customer service around the world.
WESCO’s COMPETITIVE ADVANTAGES
• Global Accounts team coupled with regional/local presence
• Comprehensive offering of products and services (data + electrical +
project management + global logistics) and complete One WESCO coverage
• Key supplier investment and support
OUTCOME
Sales with this customer went from zero to $100 million over 36 months
…clear, compelling, global value proposition
Global Technology Company
Global Solutions for the Cloud
37
2017 WESCO INVESTOR DAY
Summary
WESCO U.S.
• U.S. Market is large and
fragmented with many
opportunities
• Customers are driving technology
integration
• WESCO’s product and service
portfolio is uniquely positioned
address customer needs
…significant opportunity to drive above-market growth
UTILITY
• The utility industry is going through a
period of dramatic change
• Infrastructure investment and
demand is projected to continue
• WESCO is the leading provider of
products and services across the
Utility power chain
CIG
• CIG is a growth market for
WESCO’s products and services
• Favorable market trends in
lighting, data centers, mobility,
security and AV
• Technology is both driving demand
and enabling WESCO to develop
innovative service solutions
customized to this segment
2017 INVESTOR DAY
Kevin Kerby
Vice President, Global Accounts
Industrial
39
2017 WESCO INVESTOR DAY
Opportunities
• One WESCO expansion and
new customers
• Expand services footprint
• Grow with value creation
solutions
• Capitalize on industrial
networking growth opportunities
42%WESCO Industrial Sales
(% of Total)
2017 end market outlook: LSD sales decline to LSD sales increase
Industrial End Market
WESCO Organic Sales Growth
vs. Prior Year
Note: See appendix for non-GAAP reconciliations.
-14%
-10% -10%
-7%
1%
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
• Aerospace &
Defense
• Diversified
Manufacturing
• Oil & Gas
• Metals & Mining
• Food & Beverage
• Pharmaceutical
• Pulp & Paper
• Transportation
36%
• 78% U.S.
• 14% Canada
• 8% International
40
2017 WESCO INVESTOR DAY
Industrial Customer Base
2016 Industrial Sales $2.6B
Global
Accounts
(excl. OEM)
Integrated
SupplyOEM
All Others
…long-term customer relationships, enabled by portfolio, footprint and supply chain expertise
• Global Accounts – large customers with
national/international footprint
• Deep WESCO knowledge of customer’s
business and operations
• 90%+ contract renewal rate in 2015 and
2016
• Integrated Supply – business process
outsourcing
• 5% growth in number of plants and
100% customer retention rate in 2016
• OEM – business process outsourcing for kits,
assemblies and other products
Key Industrial Segments
41
2017 WESCO INVESTOR DAY
Global Accounts and Integrated Supply
…winning diversified new business while retaining current customers
*Reflects sales over the total life of the agreement
New Contracts / Agreements Total 2016 Sales
Technology
Oil & Gas
OEM
Transportation
Metals & Mining
Aerospace & Defense
Other
• Technology
• Oil & Gas
• Solar
• Pharmaceutical
and Medical
• Transportation
• OEM
Approximately
$400 million*
in wins last year
*Technology sales are included in CIG and Construction end markets
*
42
2017 WESCO INVESTOR DAY
Customized Product
Solutions
Integrated Supply Capital Project
Solutions
Global Accounts Value Proposition
…addresses key customer needs and applications
Standardizing products, pricing, terms and service across multiple customer facilities
Industrial &
Electrical Distribution
Supply Chain Solutions
43
2017 WESCO INVESTOR DAY
WESCO’s Global Reach
WESCO Presence Service area
…serving our blue-chip customers wherever they are located
44
2017 WESCO INVESTOR DAY
Business Objectives and Customer Engagement
Acquire new
customers
Centralized lead
generation team
…working all organizational levels and key customer decision makers
Penetrate existing
customers and
build C-level relationships
Global Account Managers
with vertical market and
key account focus
Grow plant-level sales
and
drive LEAN initiatives
Geographically based
implementation teams
Provide local sales,
service, and
technical support
Branch personnel
CIO
VP OPERATIONS
PLANT
MANAGER
PLANT
ENGINEER
MAINTENANCE
ENGINEER
CFOCPO
CIO
CPO PLANT
ENGINEER
SUSTAINABILITY
MANAGER
45
2017 WESCO INVESTOR DAY
A Typical Customer
OEM Lighting
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LOCATION 4
LOCATION 5
LOCATION 6
LOCATION 7
LOCATION 8
LOCATION 9
LOCATION 10
LOCATION 11
LOCATION 12
L
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N
S
Datacom &
Security Wire & Cable Electrical Distribution & Controls Automation Safety & Industrial Supplies
% Sales
Penetration
>75%
~ 50%
< 25%
New business
46
2017 WESCO INVESTOR DAY
Conduit and Raceway
Wire
A typical industrial customer served
by WESCO Global Accounts
Switchgear,
Wire, Cable, and
Conduit
Switchgear
Wire & Cable Cutting
Cable Paralleling
Arc Flash Studies
Coordination Studies
Kitting
Job Carts
Services
47
2017 WESCO INVESTOR DAY
Lighting
Lighting
A typical industrial customer served
by WESCO Global Accounts
Layout design
Energy efficiency and
sustainability audits
Energy performance
analysis
Lighting renovation
services
Services
48
2017 WESCO INVESTOR DAY
Electrical, Industrial, and
Safety MRO
Material
Handling
Safety
Services
A typical industrial customer served
by WESCO Global Accounts
Abrasives
Cutting Tools
Chemicals
Fasteners
PVF
Welding
Hand Tools
Gloves
Paper Goods
Cleansers
Brooms
Mops
Safety training and fit testing
of equipment
OSHA standards application
assistance
Vendor managed inventory
New product testing and
training
Shutdown support (job trailer)
49
2017 WESCO INVESTOR DAY
Diversified
Manufacturing
Automation Equipment
A typical industrial customer served
by WESCO Global Accounts
Services
Production Line Services
Bill of Material Review
Quality, Kitting, JIT
B&C Sourcing
Kanban
50
2017 WESCO INVESTOR DAY
Assembly
Wire Harnesses
Cable Assemblies
Panel builds
Sensors
Switches
PLCs
A typical industrial customer served
by WESCO Global Accounts
Services
51
2017 WESCO INVESTOR DAY
Business Process
Outsourcing
(Integrated Supply)
Strategic Sourcing
Storeroom Management
Inventory Management
Quality Assurance
VMI
Shutdown support (job trailers)
E-Catalog
Inventory Optimization
Lean Warehousing optimization
Category Management
Tactical procurement services
2nd tier supplier management
Vending
Personnel
A typical industrial customer served by
WESCO Global Accounts and Integrated Supply
Services
52
2017 WESCO INVESTOR DAY
Multi-location
Customers
A typical industrial customer served
by WESCO Global Accounts and
Integrated Supply
WESCO Express
Materials Standardization and
consolidation programs
Global e-business solutions
(VMI, vending, e-catalog, EDI/XML)
Enterprise reporting and analytics
Services
53
2017 WESCO INVESTOR DAY
Industrial
Networking
A typical industrial customer served
by WESCO Global Accounts
• Initial focus on digital ceiling
and industrial plant floor
• IoT will enable:
– The ability to gather and
analyze data across the
enterprise
– Increased productivity
– Improvements to product
quality and customer
service
• Anticipating growth in
connected lighting
54
2017 WESCO INVESTOR DAY
A One WESCO Customer
OEM Lighting
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LOCATION 7
LOCATION 8
LOCATION 9
LOCATION 10
LOCATION 11
LOCATION 12
L
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S
PRODUCT CATEGORY PENETRATION
Data
Comm &
Security Wire & Cable Electrical Distribution & Controls Automation Safety & Industrial Supplies
% Sales
Penetration
>75%
~ 50%
< 25%
New business
55
2017 WESCO INVESTOR DAY
Industrial End Market Success Story
Global Multi Division Manufacturer
OEM Supply Chain and Business Process Outsourcing
Customer engaged WESCO to support its new OEM supply chain strategy in one division and its outsourcing strategy in another division
BACKGROUND
SCOPE
OUTCOME
OEM Supply Chain
• WESCO Global Accounts and Field Operations interlock ensures
seamless execution – 18 plants, 5,000 SKUs
• Services:
− Global sourcing/supplier, JIT, supplier rationalization,
BOM review, quality assurance
• Deployment of our U.S. and Mexico Assembled Solutions group to
design/source/fabricate a diverse array of assembled components such
as:
− Wire harnesses, enclosures, custom panels, and relays / switches
Business Process Outsourcing
• WESCO Integrated Supply – Industrial and Electrical MRO, 25
plants in North America and Europe
• Services:
− Global sourcing
− Order entry and technical support
− VMI
− Multi tier supplier management
• 61 personnel to support the customer; 38 dedicated
• 100% of transactions run through the WESCO software platform
Multi year agreement extension -- $250M total value with $65M in incremental opportunity
56
2017 WESCO INVESTOR DAY
Industrial Growth Opportunities
• Lighting Retrofit
• Critical Infrastructure Upgrade
• Supply Chain Services
• OEM/Direct Material
• Industrial Networking
…significant opportunities for growth and expanding customer relationships
57
2017 WESCO INVESTOR DAY
Summary
• The Industrial end market is large and offers excellent growth opportunities.
• WESCO has key competitive differentiators to enable us to outperform the
market:
− Long-term customer relationships with opportunities for expansion
− Diversified end market customer verticals
− Global Accounts’ portfolio of products and services and worldwide footprint
− Integrated Supply’s ability to manage supply chain and other functions
• The evolution of technology provides an opportunity for WESCO to combine
our expertise in electrical, datacom, and automation into new products and
services.
…large market with many opportunities for growth
2017 INVESTOR DAY
Les Kebler
Group Vice President, International
Construction
59
2017 WESCO INVESTOR DAY
North American Construction Market
• ~$450B construction market - $44B* WESCO addressable market
• Low to mid single digit increase in non-residential fixed investment
• Infrastructure spending provides additional upside
• Potential incremental tailwinds (regulations, tax, business sentiment)
…large market with favorable conditions for growth
190
173
80
2016 Construction Market ($B)
Commercial
Institutional
Industrial
190
205 215
173 183
193
80 81 84
2016 2017 2018
Construction Trend ($B)
Commercial Institutional Industrial
Sources: AIA (U.S.),
CanaData Forecaster (Canada)
*Source: MDM data
60
2017 WESCO INVESTOR DAY
WESCO Opportunities
• Full suite of services to support
contractors
• Infrastructure and resources in
place today
• Capitalize on high-growth markets
• Global expansion and capital
projects
• Increased infrastructure spending
42%
• Non-residential
‒ Commercial
‒ Industrial
‒ Infrastructure
‒ Institutional
• Residential
WESCO Construction Sales
(% of Total)
34%
2017 end market outlook: Flat to LSD sales increase
Construction End Market
WESCO Organic Sales Growth
vs. Prior Year
Note: See appendix for non-GAAP reconciliations.
-4%
2%
-6%
-2%
-4%
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
65% U.S.
32% Canada
3% International
61
2017 WESCO INVESTOR DAY
Characteristics of the Construction Industry
• Highly fragmented market
• Cyclical market with high growth segments
• Shortage of skilled workers
• Slower digital adoption relative to manufacturing, retail and
agriculture
• Cost overruns and missed schedules on mega-projects
• Increasingly global nature of engineering, design and
construction (EPC) firms
• Productivity growth has remained relatively flat over the
past 20 years*
…industry challenges provide significant opportunity to add value
WESCO Value Creation
• Engineering and design phase
• Construction phase
• Transition to operations
• Supply chain management
• On-site execution
• Digital tools
*Source: McKinsey research
62
2017 WESCO INVESTOR DAY
Construction Strategy Focused on Cost and Schedule
• Transparency of activity through the construction
cycle
• Visibility and accountability for all stakeholders
• Position product close to craft to increase
productivity
• Differentiate material management by risk to
the project
• Provide innovative products and services that
reduce installed cost
• Utilize data warehouse to lower product cost and
reduce engineering and craft man-hours
• Project management software for complex projects
…leveraging decades of WESCO construction experience
63
2017 WESCO INVESTOR DAY
New Construction
Product and Services Portfolio
Job Trailer (Consumables)
Physical Security
Lighting
Just-in-Time Delivery
Job Carts
Pre-fabrication
Kitting / StagingUtility Substation
Data Center
Cable
Cable Management
64
2017 WESCO INVESTOR DAY
BUILDING /
OPS SERVICES
Lighting
Renovation and Retrofit
Product and Services Portfolio
Access
Control
Smart Meeting Spaces
Wireless
Video
IP Telephony
Digital
Signage
Switchgear
Energy /
Metering
Sensors and
ControlsPhysical Security
65
2017 WESCO INVESTOR DAY
Construction Phase Customer Needs WESCO Services
Engineering
& Design
• Specification assistance
• Product alternatives
• Turnkey solutions
• Design layouts
• Reduced engineering
man-hours
Construction
• Right product, right time
• Lower installed cost
• Higher productivity
• Real-time information
• Continuous improvement
Services for the Construction Industry
eStock Next Gen Site
Replenishment
Vending MachinesAutomated VMIPre-built Data Racks
Cable Management On-site Trailers Customized Kitting eCommerce
Global Sourcing Major CAPX Material Management
Project Specific Catalogs
New Concepts –
Intelligent Buildings
Turnkey Lighting Solutions
66
2017 WESCO INVESTOR DAY
Capitalizing on High Growth Markets
Market Market Drivers WESCO Differentiators
LED Lighting
• $300B “traditional” base, $15B+ LED market in 2017
• Current 15% adoption projected to double by 2020
• Specialized sales leaders and resources
• Turn-key design, procure and install offering
• Lighting COEs
Cloud Computing
• Large market with significant growth expectations
• Companies racing to provide cloud based solutions
• Leadership position in Datacom
• Leverages Global Account structure
• Global infrastructure in place today
Major Projects
• Petrochem, Power, Unconventional oil all active
• Trend toward lump sum benefits WESCO
• Decades of experience
• Services provided through global centers in
the Americas, Europe and Asia
Solar
• $35B North American market, LSD growth rate
• Over 25% WESCO sales CAGR over last 3 years
• Specialized sales and marketing teams
• Leverage footprint for quick turn projects
Digital Transformation
• Rapidly developing market to “connect the dots”
• Converged networks and POE lighting
• Existing businesses engaged
• Strategic partnerships with leading vendors
…we have the resources, infrastructure, and scale
67
2017 WESCO INVESTOR DAY
Construction Center
of Excellence
…opportunities to penetrate additional markets
Acquisitions Expanded Construction Footprint
May 2015
Commercial Construction
9 Branches
March 2016
Commercial and Residential
Construction
5 Branches
November 2015
Commercial Construction
Lighting National Accounts
24 Branches
68
2017 WESCO INVESTOR DAY
Success Stories – Construction
National Retail Store
LED Lighting Project
• Awarded multi-store contract to
upgrade interior and exterior
lighting to energy efficient LED
technology
• Initial order for 20 stores rolling
out to 100+ locations across the
U.S.
• Scope of work includes design
services, lighting and controls
• Leverages WESCO’s Global
Account model and commercial
construction COEs
Integrated Oil Company
Capital Project Material Management
• Awarded a product and material
management contract for a $750M
petrochemical plant expansion
• Services include material take-offs,
kitting, cable management and
on-site trailer plus personnel
• Leverages WESCO’s
experience, footprint and
proprietary project management
software (RPM)
69
2017 WESCO INVESTOR DAY
Construction Summary
• The non-residential construction market is large
and growing
• Significant Incremental spending potential from
infrastructure spending and tax and regulatory
reform
• Industry challenges present opportunities to add
value
• WESCO is very active today in a number of high
growth segments
• Comprehensive product and service portfolio
coupled with decades of global WESCO
experience
…well-positioned in attractive end market
2017 INVESTOR DAY
Nelson Squires
Group Vice President, Canada
Canada
71
2017 WESCO INVESTOR DAY
WESCO’s Canadian Market Share and Addressable Market
…market leadership position with opportunities for growth
All Others
Top 5 distributors total ~75%
Canadian Electrical
Distribution Market (~$10B)
Source: MDM
($ Billions)
Packaging Electrical &
Controls
MROP All Other Construction Datacom Chemicals Material
Handling
$14 $13
Canada MRO Supply Market ~$60B
WESCO Addressable Market ~$25B
Source: ElectroFed
$3
$9
$5
$8
$3 $3
WESCO addressable market
WESCO #1
position in market
72
2017 WESCO INVESTOR DAY
57%
26%
8%
9%
Strategic Priorities
• Build on our market leadership
position
• Capitalize on increased
infrastructure spending
• Increase our industrial footprint
• Continue to broaden our utilities
business
• Continue to diversify the
business beyond traditional
markets
• Drive One WESCO opportunities
• Fully leverage our acquisitions
42%WESCO 2016 Canadian Sales
by End Market (U.S. $1.4B)
2017 outlook: flat to LSD sales increase
Utility
CIG Construction
Industrial
Canada
WESCO Organic Sales Growth
vs. Prior Year
-11%
-3%
-7%
-2%
3%
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
Note: See appendix for non-GAAP reconciliations.
73
2017 WESCO INVESTOR DAY
WESCO’s Canadian Business
• 19% of total WESCO sales in 2016
• Expanded and diversified through acquisitions and organic growth since recession trough
…larger, stronger, and more diversified business
2010 2016
Utility
CIG
Industrial
Construction752
1,846
C$ Millions
74
2017 WESCO INVESTOR DAY
Canada
…strong national presence
Branch Locations
WESCO 70
EECOL 58
Distribution Centers
75
2017 WESCO INVESTOR DAY
WESCO’s Industrial End Market in Canada
Modest recovery in business sentiment(1)
supported by:
− Foreign (export) demand
− Expected rebound in activity in
energy-producing regions
…poised to benefit from increased activity
(1) Source: Bank of Canada Business Outlook Survey, 3 April 2017
WATER TREATMENT
MINING
LARGEST WESCO VERTICALS
13,000
14,000
15,000
16,000
17,000
18,000
19,000
20,000
21,000
22,000
J
a
n
-
1
2
A
p
r
-
1
2
J
u
l
-
1
2
O
c
t
-
1
2
J
a
n
-
1
3
A
p
r
-
1
3
J
u
l
-
1
3
O
c
t
-
1
3
J
a
n
-
1
4
A
p
r
-
1
4
J
u
l
-
1
4
O
c
t
-
1
4
J
a
n
-
1
5
A
p
r
-
1
5
J
u
l
-
1
5
O
c
t
-
1
5
J
a
n
-
1
6
A
p
r
-
1
6
J
u
l
-
1
6
O
c
t
-
1
6
J
a
n
-
1
7
Source: Statistics Canada, CANSIM tables 126-0001 and 126-0003.
Millions of
Cubic Metres
OIL & GAS
Crude Oil & Equivalent
Products Production
76
2017 WESCO INVESTOR DAY
…activity is picking up in 2017
Oil Sands Update
• Drilling activity is increasing
• Consolidation a positive in the mid to long term
• Companies more disciplined in spend
• Maintenance spending beginning to pick up
• Pipeline projects provide significant opportunity
• Rebuild is picking up pace in Fort McMurray
• WESCO backlog growing, strongest in three years
77
2017 WESCO INVESTOR DAY
• Population growth is expected to drive construction of
housing, schools, healthcare facilities and infrastructure
• Tight office space market in Toronto, Winnipeg and
Vancouver
• Industrial capacity utilization has grown to over 80%
WESCO’s Construction End Market in Canada
…focused on commercial non-resi construction across Canada
Source: CanadaData Forecaster, April 2017
Canadian Construction Market Trends
Non-Residential Put-In-Place Activity
DATA CENTERS
INDUSTRIAL
LARGEST WESCO PROJECT TYPES
COMMERCIAL
Source: April 2017 CanaData Forecaster. Includes commercial, institutional, and industrial sectors.
78
2017 WESCO INVESTOR DAY
The Canadian government recently announced plans to more than double their existing infrastructure funding,
targeting a total of C$186 billion in combined public and private investments over the next 11 years
…WESCO has the experience and expertise to win incremental infrastructure business
Key Areas
of Focus
Incremental
Investment,
2017-2028 Stated Investment Priorities Where WESCO competes
Green
infrastructure
$22B Support Canada’s ongoing transition
to a clean growth economy.
• Water and wastewater systems
• LED lighting – new construction and retrofits
• Alternative energy sources
Public transit $20B Shorten commute times, cut air
pollution, economic growth
• Toronto Transit Commission (TTC) project
experience
Social
infrastructure
$22B Invest in indigenous communities,
child care, housing, culture &
recreation
• Construction of child care, culture and
recreational facilities
Rural & Northern
communities
$2B Invest in unique local needs • Broadband infrastructure
Canadian Construction Market Trends
Infrastructure Opportunities
Source: www.infrastructure.gc.ca. Excludes $10B Trade and Transportation investments.
79
2017 WESCO INVESTOR DAY
Canada Growth Opportunities
…well-positioned to capitalize on a wide variety of growth opportunities
UTILITY CIGINDUSTRIAL CONSTRUCTION
Utility
infrastructure
OEM and direct
materials
Supply chain
services
Internet of Things
Energy efficiency solutions
LED lighting/lighting retrofit
Major projects
General infrastructure
Broadband / FTTX
80
2017 WESCO INVESTOR DAY
Success Story – University
Canadian University
Transition from Outsourced to In-House
BACKGROUND
• Facilities are a mix of new and aging buildings
• Customer is transitioning from outsourced to internal maintenance and
construction teams
SCOPE
• Includes all electrical material
• Lighting infrastructure
• Datacom infrastructure
• Inventory
OPPORTUNITY
• $1M per year; 5-year term
• Already have signed up a second university with similar scope
81
2017 WESCO INVESTOR DAY
Success Story – Utility
Utility
Broadened the Customer Base With Customized Solutions
BACKGROUND
• Utilities business leveraging key customer relationships to grow
• Worked with suppliers to broaden the business at three significant customers
SCOPE
• Partnered with suppliers to:
̵ Develop solutions to meet a unique specification
̵ Utilize WESCO versus going direct to lever WESCO’s relationship and solution
̵ Displace a competitor by offering a more effective solution
OPPORTUNITY
• New sales of $4M per year for the next three years
• Win-Win for suppliers, customer and WESCO
• Ability to leverage this beyond the first set of customers
82
2017 WESCO INVESTOR DAY
Success Story – Telecom
Telecom Company
Outsourcing Supply Chain Management
BACKGROUND
• Customer is transitioning from insource to outsource
• WESCO is the only distributor to offer a full Canadian geographic
footprint
SCOPE
• Full leverage of existing DCs, equipment, and people
• Management of supply chain
• No incremental investment required
OPPORTUNITY
• $20M per year; 5-year term
• Opportunity to broaden scope of supply
83
2017 WESCO INVESTOR DAY
Success Story – Industry Association
Provincial Farmers Association
Safety Solutions
BACKGROUND
• Access to 42,000 farmers and foresters via a single web portal
• First partnership of its kind in Canada
SCOPE
• Single provider of safety solutions, PPE, and technical support
• Customized website and portal
• Exclusive e-Commerce store
OPPORTUNITY
• $3M per year; 3-year term
• Opportunity to develop similar partnerships across Canada
84
2017 WESCO INVESTOR DAY
Summary
• WESCO is a market leader in Canada
−Strong resources and capabilities, the broadest
infrastructure and a diverse customer base
−Attractive growth opportunities are available across the
business
−One WESCO provides a strategic advantage to further
leverage Canadian acquisitions and deliver profitable
growth
• Solid progress in diversifying the business
• Lean efforts driving cost improvement and focus
…focused on growth and execution
2017 INVESTOR DAY
Hemant Porwal
Vice President, Global Supply Chain and Operations
Supply Chain and Operations
86
2017 WESCO INVESTOR DAY
Supply Chain and Operations
Our Mandate
Deliver growth and increase profitability by leveraging
the value chain from sourcing to customer fulfillment
with the right people, process, infrastructure and
technology.
Our Values
• Promote safety
• Feel the heat of the business
• Supply Chain leadership across value chain
• Win with high level of integrity and respect for our
supplier partners
• Operational excellence via lean
…the nerve center of One WESCO
87
2017 WESCO INVESTOR DAY
Supply Chain & Operations – architecting the One WESCO Strategy
Lean organization designed for efficiency and effectiveness in sync with
marketing demand creation, sales operations, and category management
…focused on customer satisfaction, profitability, and social responsibility
Sourcing
$6B spend
12,000+ Special
Pricing
Agreements
Inventory
$800M+
inventory
1M+ products
Operations
9 distribution
centers
~500 branches
Transportation
$90M+
spend
Safety,
Sustainability &
Supplier Diversity
6x safer
1300+ diversity
suppliers
Pricing
~75,000
customers
Functional Overview
88
2017 WESCO INVESTOR DAY
Sourcing Optimization Pricing Optimization Inventory Optimization
Network Optimization Transportation Optimization
Processes to Drive Operating Margin Expansion
…new capabilities and ways of working
89
2017 WESCO INVESTOR DAY
• Strategic and diverse supply
base
• Spend managed by category
• Centralized and automated
source to pay transactions
• Higher product turns and
improved cash conversion cycle
• Spend negotiated locally
• Costs negotiated at the customer
level
• Limited strategic supplier base
• Deep dives to understand
customer specifications and
preference
• Consolidate requirements and
negotiate regionally/ nationally
• Optimize inventory
• Standardize pay terms
Sourcing and Inventory Evolution
Assessed
Opportunities
Continuous
Improvement
Best-In-
Class
1 32
…significant progress made in 2016
Status:
90
2017 WESCO INVESTOR DAY
Current Phase “RFI the Tail”
Leverage Spend to Grow Strategic Suppliers
• Over 3,000 customers
• 22 product categories
• 800+ suppliers
• 11,000+ SKUs
• Expected Results
• Stakeholder-aligned enterprise
strategic sourcing
• Leverage national spend with
strategic sourcing
• One voice to suppliers
• Reduce tail spend suppliers
Cost Tail Suppliers
Supplier Spend Treemap
Grow
Strategic
SuppliersLeverage
Spend
Reduce
Complexity
Competitively bid
tail spend and
convert to strategic
suppliers
…reducing cost and strengthening strategic supplier relationships
Strategic Supplier SpendMargins
91
2017 WESCO INVESTOR DAY
Reduce Complexity and Leverage Spend – Direct Materials
Specialty Wire & Cable
• 9 cable categories reviewed, including:
− LAN, coax, audio, and speaker cables
− 180 SKUs
• 9 reverse auctions in about 2.5 hours
• 10 suppliers to 6 suppliers
• Maintained or improved product quality
• Safety Products
• First aid products, remedies equipment and kits
− 158 SKUs
• 3 reverse auctions in about 2 hours
• 20+ suppliers to 9
• Extensive product review pre- and post-auction
SAVINGS
Double-digit % savings achieved
…expanding e-auctions to direct materials
92
2017 WESCO INVESTOR DAY
Pricing Evolution
• Pricing analytics and optimization
tools
• Price intelligence spanning
product categories, industry
verticals and customer size
• Pricing established as a Center of
Excellence
• Prices set primarily by branch,
initiating shift to category
• Most customer orders are priced
at the local (branch / customer)
level
• In-house developed pricing
analytics
• Region, Platform and Category
pricing structure with KPIs in place
• Expand use of pricing tool kit:
– Customer segmentation
– Gap-to-goal
– Standard cost
– Floor pricing
– Margin thresholds
Assessed
Opportunities
Continuous
Improvement
Best-In-
Class
…early stages; made significant progress in 2016
Status:
1 32
93
2017 WESCO INVESTOR DAY
Disciplined Approach to Pricing
• Proved margin improvement opportunity with
successful branch pilots
• Conducted ~200 gap-to-goal sessions
Pricing Approach
…focused on improving billing margins with accountability, analytics, and tools
2016 Accomplishments
• District level margin reviews with sales,
sourcing and pricing
• Regular review process and timing for invoice
pricing and supplier price increases
• Margin performance daily reviews at branch
level
2017 Action Plan
94
2017 WESCO INVESTOR DAY
Operations and Transportation Evolution
• Strategically located branches,
distribution centers and sales offices
worldwide
• Transportation is a global function
with agile capabilities for the “last
mile”
• Infrastructure that enables growth,
exceeds customer requirements and
delivers economic value
• One WESCO branch
consolidations
• Transportation managed by
country
• Further develop and expand
distribution center and network
• Manage transportation spend to
deliver improvements in service
and capabilities
Assessed
Opportunities
Continuous
Improvement
Best-In-
Class
…significant progress made in 2016
Status:
1 32
95
2017 WESCO INVESTOR DAY
U.S. Distribution Network Optimization
• Open two One WESCO regional distribution
centers
• Convert the three U.S. distribution centers to
One WESCO distribution centers
• Reconfigured systems to support
One WESCO DC network strategy
• Determined multiyear network roadmap
2016 Accomplishments
2017 Action Plan
…improving customer service while reducing cost
One WESCO Distribution Center
• Consolidated inventory across multiple categories
• Providing a variety of services
96
2017 WESCO INVESTOR DAY
Reduced Transportation Spend While Improving Service
Pre Bid • Post Bid
• Local negotiations with poor Service Level Agreements
• Manual process
• 8 different carriers
• Center-led negotiations
• Electronic sourcing event with multiple rounds of
bidding activity
• Consolidated to 3 carriers
• Improved service levels and costs
SAVINGS
Double-digit % savings achieved
97
2017 WESCO INVESTOR DAY
Supply Chain and Operations Summary
• Laid the groundwork in 2015 to support operating
margin expansion
• Made significant progress in 2016 to implement
Global Supply Chain strategy
• Continued engagement with local and Corporate teams
• Executing plans which target at least 20 bps of annual
margin improvement through Supply Chain and Operations
initiatives
• Have the footprint and capacity to support growth
…significant opportunity to further improve our operations and supply chain
2017 INVESTOR DAY
Dave Schulz, Chief Financial Officer
Financial Update
99
2017 WESCO INVESTOR DAY
WESCO Financial Performance Goals
Drivers
• Working capital management
• Prudent capital expenditures
• Operating leverage from top-line growth
• Margin improvement initiatives
• Organic growth strategies
• Acquisitions
• Effective capital allocation
• Focus on improving ROIC
• Consistent execution
Performance
Goals
Free cash flow
greater than 90% of
net income
Double digit
EPS growth
Grow faster than
the market
Superior investor returns
100
2017 WESCO INVESTOR DAY
0.75
0.49
2.46
3.80
1999 2002 2009 2016
Financial Performance
Adjusted Diluted EPSSales 10%
CAGR
…solid long-term performance
5%
CAGR
3.4 3.3
4.6
7.3
1999 2002 2009 2016
52
12
279 282
1999 2002 2009 2016
Free Cash Flow 11%
CAGR
-15%
26%
14%
Average Annual TSR*
($ Billions)
($ Millions)
($)
Note: See appendix for non-GAAP reconciliations.
13%
CAGR *Total Shareholder Return
Dec 1999-2002 2002-2009 2009-2016
13%
average
101
2017 WESCO INVESTOR DAY
Cost Leverage
…compares favorably to industry benchmarks
807 798
2015 2016
Sales per Employee
($ Thousands)
NAED: National Association of Electrical Distributors. Source of NAED
data: most recent annual benchmark study, published in June 2016.
612
NAED
Operating Expenses (%)
15 15
2015 2016
19% NAED Benchmark
116
2015 - 2016
• Eliminated approximately 1,000 positions
• Eliminated or consolidated 40 branches, including our
businesses in Australia and Brazil
• Invested in resources to deliver competitive advantage and
improve margin:
– Added end market sales & marketing leaders and product
category managers
– Established and expanded eCommerce organization
– Created WESCO’s first Global Supply Chain organization
– Improved IT and business unit finance capabilities
2017
• Adding technical sales resources (reflected in 2017 Outlook)
• Continuing to tightly manage operating costs
102
2017 WESCO INVESTOR DAY
1.5
2
2.5
3
3.5
4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Balanced Capital Structure
Leverage
(Total Par Debt to TTM EBITDA)
…maintaining fiscal discipline and flexible capital structure
> $1B of free cash
flow over last 4 years
Note: See appendix for non-GAAP reconciliations.
Target
Leverage
2.0x – 3.5x
3.4X
2015 2016 2017
Outstanding Debt
December 31,
2016
March 31,
2017 Matures
AR Revolver (V) 380 345 2018
Inventory Revolver (V) 4 - 2020
2019 Term Loans (V) 145 130 2019
2021 Senior Notes (F) 500 500 2021
2024 Senior Notes (F) 350 350 2024
Other (V) 24 31 N/A
Total Par Debt 1,403 1,356
Liquidity(1) 705 727
Capital Structure
($ Millions)
V = Variable Rate Debt
F = Fixed Rate Debt
(1) = Total availability under asset-backed
credit facilities plus invested cash
103
2017 WESCO INVESTOR DAY
2017 Year to Date Results
• Improved business momentum driven by a return
to growth in the Industrial end market and Canada
• Reported sales flat
• Organic sales down 2% vs. prior year
− down 4% sequentially; better than typical
seasonality
• EBIT margin down 10 bps vs. prior year, reflecting
normal lag effect in passing inflation to customers
• Free cash flow of 114% of net income
• Continued growth in the Industrial end market and
Canada
• QTD organic sales flat vs. prior year, including the
impact of Easter timing
• Sales momentum continues to improve
First Quarter Second Quarter to date
…results to date are in line with our 2017 expectations and outlook
Note: See appendix for non-GAAP reconciliations
104
2017 WESCO INVESTOR DAY
2017 Outlook
…will update our 2017 outlook on July 27
Sales Flat to +4%
EBIT Margin 4.4% to 4.6%
Effective Tax Rate ~30%
EPS $3.60 to $4.00
Shares outstanding ~49 million
Free cash flow At least 90% of net income
Year to date
results vs original
expectations:
Canada
Industrial
Utility
Tax Rate
Timing of supplier price increases
ahead of customer price increases,
which impacted margin
2017 Outlook: Reaffirming our
original 2017
outlook
105
2017 WESCO INVESTOR DAY
Capital Allocation Strategy
…completed $50M share repurchase in May to offset dilution impact of 2016 & 2017 equity awards
Priorities for Driving Shareholder Value
• Support organic growth
• Fund accretive acquisitions
• Maintain target leverage
• Repurchase shares
– Authorization from Board
– Offset dilution from annual equity awards
– Opportunistic purchases
Cash Deployment After
Organic Growth Investments
2015 - YTD 2017
Debt
Reduction
Acquisitions
Share
Repurchase
106
2017 WESCO INVESTOR DAY
Long-Term Growth Algorithm
• Market growth
• 1% to 2% from market
outperformance
• 1% to 3% from acquisitions
• ~50% operating profit pull-
through on organic growth
− gross margin improvement
− operating cost leverage
• ~30% effective tax rate
Annual Expectations over the Long-Term
• Greater than 90% of net
income
…managing the business for strong EPS growth and cash flow
Sales EPS Free Cash Flow
107
2017 WESCO INVESTOR DAY
WESCO Long-Term Algorithm – Illustrative for 2020
2017E 2020E 2017E 2020E
Sales EPS
• 3% annual end market growth
• 1% market outperformance
• 2% growth from acquisitions
• 20 bps annual gross margin expansion
• 50% pull-through on organic sales growth
• 10%+ EPS growth excluding acquisitions
• ~ 30% effective tax rate
• Share repurchase to manage dilution
Resulting in:
• Annual EBIT margin
expansion of 30 – 40 bps
• ~$800 million free cash flow
over the four-year period
• ROIC expansion
…margin expansion, double-digit EPS growth and strong cash generation
Core business
2018-2020 acquisitions
+4% 10%+
++2%
108
2017 WESCO INVESTOR DAY
0%
2%
4%
6%
8%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E 2018E 2019E 2020E
…driven by volume leverage, supply chain initiatives and continued cost focus
Expecting Operating Margin Expansion
DRIVERS: Volume leverage
Procurement, pricing and distribution
network optimization
Continued
cost focus
EBIT %
109
2017 WESCO INVESTOR DAY
Summary
• We have right-sized the organization and added capabilities to drive growth and margin expansion as
end markets improve
• Our long-term growth algorithm delivers margin expansion and double-digit EPS growth from:
−Organic sales growth and strong operating leverage
− Accretive acquisitions
− Global Supply Chain initiatives
− Continuing focus on expense control
• Deployment of capital to drive shareholder value enabled by strong cash flow generation
• ROIC expansion
…focused on delivering above-market growth, strong cash generation and shareholder returns
2017 INVESTOR DAY
John Engel
Chairman, President and Chief Executive Officer
WESCO International
111
2017 WESCO INVESTOR DAY
Invest in WESCO
• Industry leader with deep domain expertise in
electrical, industrial, construction, and utility
• Proven business model and well positioned in large, fragmented markets
• Blue-chip customer and supplier base
• Proven acquirer and integrator in a consolidating industry
• Extensive global supply chain capability
• Operational excellence culture founded on lean principles
• Operating margin expansion results and future potential
• Strong free cash flow generation through economic cycle
…strong company with proven and effective supply chain solutions
112
2017 WESCO INVESTOR DAY
2017 INVESTOR DAY
Appendix
114
2017 WESCO INVESTOR DAY
Sales Growth
2015 2016 2017
Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1
Change in Net Sales 0.3 (4.4) (7.4) (6.7) (4.7) (2.2) (0.3) (3.6) (3.7) (2.4) (0.2)
Acquisition Impact 1.2 1.6 2.0 3.0 2.0 3.9 3.7 2.9 1.8 3.1 0.9
Core (0.9) (6.0) (9.4) (9.7) (6.7) (6.1) (4.0) (6.5) (5.5) (5.5) (1.1)
FX Impact (2.5) (3.0) (4.1) (3.7) (3.4) (2.6) (0.9) (0.3) (0.3) (1.0) 0.6
Workday Impact (1.6) 1.6 3.2 (1.6) 0.4
Organic 3.2 (3.0) (5.3) (7.6) (3.3) (6.7) (3.1) (6.2) (3.6) (4.9) (1.7)
(%)
Note: Core sales growth excludes acquisitions during the first year of ownership.
115
2017 WESCO INVESTOR DAY
Q1 2017 Sales Growth – Geography
U.S. Canada International Total
Change in net sales (USD) (0.8) 7.4 (13.4) (0.2)
Impact from acquisitions 1.3 - - 0.9
Impact from foreign exchange rates - 4.2 (2.4) 0.6
Impact from number of workdays - - - -
Organic sales growth (2.1) 3.2 (11.0) (1.7)
(%)
For organic sales growth in 2016, see quarterly earnings webcasts as previously furnished to the Securities & Exchange Commission, which can be obtained from the
‘Investors’ page of WESCO’s website at www.wesco.com.
116
2017 WESCO INVESTOR DAY
Note: The prior period end market amounts noted above may contain reclassifications to conform to current period presentation.
($ Millions)
Sales Growth-End Markets
Q1 2017 vs. Q1 2016 Q1 2017 vs. Q4 2016
Q1 Q1 Q1 Q4
2017 2016
%
Growth 2017 2016
%
Growth
Industrial Core 680 670 1.5% 681 647 5.3%
Construction Core 554 567 (2.4)% 574 613 (6.4)%
Utility Core 267 279 (4.2)% 267 294 (8.9)%
CIG Core 258 262 (1.6)% 258 247 4.4%
Total Core Gross Sales 1,759 1,778 (1.1)% 1,780 1,800 (1.1)%
Total Gross Sales from Acquisitions 21 4 - - - -00
Total Gross Sales 1,780 1,782 (0.1)% 1,780 1,800 (1.1)%
Gross Sales Reductions/Discounts (8) (6) - (8) (7) -00
Total Net Sales 1,773 1,776 (0.2)% 1,773 1,793 (1.2)%
117
2017 WESCO INVESTOR DAY
Q1 2017 Organic Sales by End Market
Industrial Construction Utility CIG WESCO
Core Sales Growth 1.5 (2.4) (4.2) (1.6) (1.1)
FX Impact 0.3 1.2 0.3 0.4 0.6
Workday Impact - - - - -
Organic Growth 1.2 (3.6) (4.5) (2.0) (1.7)
(%)
For organic sales growth in 2016, see quarterly earnings webcasts as previously furnished to the Securities & Exchange Commission, which can be obtained from the
‘Investors’ page of WESCO’s website at www.wesco.com.
118
2017 WESCO INVESTOR DAY
Financial Leverage
Twelve Months Ended
March 31, 2017
Financial leverage ratio:
Income from operations $ 330
Depreciation and amortization 66
EBITDA $ 396
March 31, 2017
Current debt and short-term borrowings $ 29
Long-term debt 1,310
Debt discount and deferred financing (1) 16
Total debt $ 1,355
Less: cash and cash equivalents $ 103
Total debt, net of cash $ 1,252
Financial leverage ratio 3.4X
Financial leverage ratio, net of cash 3.2X
(1)Long-term debt is presented in the condensed consolidated balance sheet as of March 31, 2017 net of deferred financing fees and debt discount.
($ Millions)
119
2017 WESCO INVESTOR DAY
2016 Adjusted Diluted EPS
FY 2016
Reported Results Adjustments Adjusted Results
Operating profit $ 332.0 - $ 332.0
Interest 76.6 - 76.6
Loss on debt redemption 123.9 (123.9) 1 -
Income before income taxes 131.5 123.9 255.4
Taxes 30.4 41.2 1 71.6
Effective tax rate 23.1% 28.0%
Net income 101.1 82.7 183.8
Less: Non-controlling interest (0.5) - (0.5)
Net income attributable to WESCO $ 101.6 82.7 $ 184.3
Adjusted Earnings per Diluted Shares:
Diluted earnings per common share (as reported) $2.10
Loss on debt redemption 2 2.54
Tax effect of loss on debt redemption 2 (0.84)
Adjusted diluted earnings per common share $3.80
(1) Represents the third quarter loss on debt redemption and related income tax benefit.
(2) The loss on debt redemption and related income tax benefits are based on third quarter diluted shares of 48.7 million.
($ Millions, except for EPS)
120
2017 WESCO INVESTOR DAY
Free Cash Flow Reconciliation
FY
2016
Q1
2017
Cash flow provided by operations 300.2 47.6
Less: Capital expenditures (18.0) (4.5)
Free Cash Flow 282.2 43.1
Note: Free cash flow is provided by the Company as an additional liquidity measure. Capital expenditures are deducted from operating cash flow to
determine free cash flow. Free cash flow is available to fund other investing and financing activities.
($ Millions)