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MSC Industrial Supply Co. Jeff Kaczka, Chief Financial Officer

MSC Industrial Supply Co. Jeff Kaczka, Chief Financial Officer. Raymond James Institutional Investor Conference Orlando, March 4, 2014. Safe Harbor Statement. CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.

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MSC Industrial Supply Co. Jeff Kaczka, Chief Financial Officer

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  1. MSC Industrial Supply Co.Jeff Kaczka, Chief Financial Officer Raymond JamesInstitutional Investor ConferenceOrlando, March 4, 2014

  2. Safe Harbor Statement CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Statements in this Presentation may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any statements contained herein which are not statements of historical facts and that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future shall be deemed to be forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events, actual results and performance, financial and otherwise, could differ materially from those set forth in or contemplated by the forward-looking statements herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this release does not constitute an admission by MSC or any other person that the events or circumstances described in such statement are material. Factors that could cause actual results to differ materially from those in forward-looking statements include, without limitation, the Company’s ability to timely and efficiently integrate the J&L business acquired in June 2006 and realize the anticipated synergies from this transaction, changing customer and product mixes, changing market conditions, industry consolidations, competition, general economic conditions in the markets in which the Company operates, rising commodity and energy prices, risk of cancellation or rescheduling of orders, work stoppages or other business interruptions (including those due to extreme weather conditions) at transportation centers or shipping ports, the risk of war, terrorism and similar hostilities, dependence on the Company’s information systems and on key personnel, the outcome of potential government or regulatory proceedings or future litigation relating to pending or future claims, inquiries or audits, and various other risk factors listed from time to time in the Company's SEC reports.

  3. Company Overview MSC is a value added distributor of services, solutions & products that helps customers reduce their MRO supply chain costs $2.6 Billion Pro-Forma Revenue* 13% 3-Year Sales CAGR Founded in 1941 by Sid Jacobson > 6,000 associates > 100 branches and 4 major distribution centers > 3,000 suppliers > 700,000 SKUs with 99% fill rates 16.3% Adjusted Operating Margin* 17% 3-Year EPS CAGR * Unaudited data for fiscal year ended August 31, 2013.

  4. Key Investment Highlights • Uniquely positioned to gain share in a large, fragmented market • Scalable and very profitable business model with repeatable growth formula • Track record of capitalizing on growth opportunities • Product category expansion yields deeper wallet share • Scalable infrastructure supports organic growth • Industry consolidation presents significant M&A opportunity • High free cash flow generation (+$600 million in past 3 fiscal years)

  5. Industry Overview MSC The top 50 companies represent less than 30% of the market • $140B MRO Market in the US • Highly Fragmented • 150,000 Distributors in the US

  6. Competitive Position (amounts are approximate)

  7. Fulfillment Center Network Next Day Delivery Scalable & Repeatable Customer Fulfillment Centers (CFCs)BDNA CFCs CFC under construction

  8. Broad Product Offering 99% >700,000 Fill Rate Items in Stock Significant competitive advantage

  9. Customer Landscape Company Size (# employees) Customer Count Revenue Potential Complex Solutions Large(>250) Medium (50-249) Small (10-49) Very small (10-49) Simple Transactions Top Customers Demand Value-added Services Smaller Customers Require Efficient Cost-to-Serve Model Source: D&B; Infogroup

  10. Customer Challenges Too Many Suppliers Too Many SKUs Too Many Purchase Orders Difficult to Drive Compliance Operationally Expensive Time Consuming to Manage Challenges Non-Core Activities Excess Inventory Disruption of Supply Freight and Handling Costs Service and Delivery Issues Data Collection and Management

  11. MSC Value Proposition Save Time Save Money

  12. MSC Value Proposition Over 1 Million Items in 40 Major Categories mscdirect.com & eProcurement Save Time Save Money Same-Day Shipping with Service Guarantee Next Day Delivery when ordered by 8 p.m. ET

  13. MSC Value Proposition Over 1 Million Items in 40 Major Categories Product Supermarket mscdirect.com & eProcurement Private Brands Save Time Save Money Same-Day Shipping with Service Guarantee Inventory Management & Supply Chain Solutions Next Day Delivery when ordered by 8 p.m. ET Technical Team

  14. Repeatable Growth Formula Logistics Sales Force Products Solutions Technology e-commerce Scalable Foundation

  15. Repeatable Growth Formula Metalworking Strategic M&A Customized Supply Chain Solutions Expertly Trained Sales Organization Metalworking Specialists Technical Service & Support Private Brands Logistics Sales Force Products Solutions Technology e-commerce Scalable Foundation

  16. Repeatable Growth Formula Metalworking Product Growth Segments Strategic M&A Customized Supply Chain Solutions Expertly Trained Sales Organization Metalworking Specialists Technical Service & Support Private Brands Material Handling Safety Hand and Power Tools Fasteners Power Transmission Electrical and Lighting Motion Control …and more Logistics Sales Force Products Solutions Technology e-commerce Scalable Foundation

  17. Repeatable Growth Formula Metalworking Product Growth Segments End-market Growth Segments Aerospace Automotive Processing Government Education Healthcare Energy …and more Strategic M&A Customized Supply Chain Solutions Expertly Trained Sales Organization Metalworking Specialists Technical Service & Support Private Brands Material Handling Safety Hand and Power Tools Fasteners Power Transmission Electrical and Lighting Motion Control …and more Strategic Investment and Focus on Adjacent Growth Segments Logistics Sales Force Products Solutions Technology e-commerce Scalable Foundation

  18. Repeatable Growth Formula Geographically Scalable Opportunities U.S. The Americas Europe Asia Metalworking Product Growth Segments End-market Growth Segments Aerospace Automotive Processing Government Education Healthcare Energy …and more Strategic M&A Customized Supply Chain Solutions Expertly Trained Sales Organization Metalworking Specialists Technical Service & Support Private Brands Material Handling Safety Hand and Power Tools Fasteners Power Transmission Electrical and Lighting Motion Control …and more Strategic Investment and Focus on Adjacent Growth Segments Logistics Sales Force Products Technology/Solutions e-commerce Scalable Foundation

  19. Growth Drivers National Accounts Salesforce Expansion SKU Expansion Vending M&A e-Commerce Organic Growth Strategies (11% historical) M&A (2% historical)

  20. Update on Growth and Infrastructure Investments Davidson HQ Relocation (Complete) Salesforce Expansion (On-Track) Vending (On-Track) 5th CFC Expansion (On-Track) Data Center (On-Track) SKU Expansion (On-Track) BDNA Integration (On-Track) e-Commerce (On-Track)

  21. Strict Acquisition Evaluation Criteria • Strategic Fit with our growth plan • Synergy Potential on both the cost and revenue sides of the equation • Enhance MSC’s value proposition and go-to-market product • Cultural fit between MSC and the acquisition target • Recent Acquisitions • Barnes Distribution North America (2013) • ATS Industrial Supply, Inc. (2012) • American Tool Supply (2011) • American Specialty Grinding (2011) • Rutland Tool & Supply Co. (2010) • J&L Industrial Supply (2006)

  22. Example: BDNA Overview Strong strategic fit and significant synergy potential. • Industry leading sales force including over 800 field sales professionals, supported by dedicated inside sales professionals and technical product experts • Broad, high margin product offering including a robust private label offering • Strong financial performance – 2012F unaudited sales of roughly $300 million • Leading North American VMI platform supplying a comprehensive range of high margin “C” class MRO products and tailored customer solutions • Broad, balanced geographic coverage serving all 50 U.S. states and 10 Canadian provinces • Diverse customer base and longstanding customer relationships with roughly 31,000 active accounts

  23. Financial Review

  24. Track Record of Growth* • * An explanation and reconciliation of the non-GAAP financial measures contained in this presentation to the most directly comparable GAAP financial measures can be found on www.mscdirect.com.

  25. Financial Strengths • Strong balance sheet supports growth • Cash of $48M* • Debt of $322M* • Shareholders equity = $1.3B* • Total free cash flow in excess of $640M* over last 3 years • Re-purchased approx. $235M* of MSC stock and paid approx. $200M* in dividends over last 3 years • * As of November 30, 2013.

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