Posted February 15, 2023

WESCO reports 18% sales growth for 2022

Wesco International, a provider of business-to-business distribution, logistics services, and supply chain solutions, announced 2022 fourth quarter results of $5.6 billion, up 15% YOY, and full-year 2022 record net sales of $21.4 billion, up 18% YOY.

Fourth quarter results:

  • Record net sales of $5.6 billion, up 15% YOY
  • Organic sales growth of 14% YOY and up 4% sequentially
  • Operating profit of $382 million; operating margin of 6.9%
  • Adjusted EBITDA of $451 million, up 41% YOY; adjusted EBITDA margin of 8.1%, up 150 basis points YOY
  • Gross margin of 21.9%, up 110 basis points YOY
  • Earnings per diluted share of $3.90
  • Adjusted earnings per diluted share of $4.13, up 30% YOY
  • Record operating cash flow of $422 million
  • Record free cash flow of $399 million; 173% of adjusted net income
  • Rahi Systems acquisition closed on November 1, 2022

Full year results:

  • Record net sales of $21.4 billion, up 18% YOY
  • Organic sales growth of 18% YOY
  • Record operating profit of $1.4 billion; operating margin of 6.7%
  • Record adjusted EBITDA of $1.7 billion, up 47% YOY; record adjusted EBITDA margin of 8.1%, up 160 basis points YOY
  • Record gross margin of 21.8%, up 100 basis points YOY
  • Record earnings per diluted share of $15.33
  • Record adjusted earnings per diluted share of $16.42, up 65% YOY
  • Leverage of 2.9x; improvement of 1.0x versus prior year-end and 2.8x since the Anixter merger

“Wesco delivered a stellar encore performance for the full year 2022 including exceptional fourth quarter results, clearly demonstrating our ability to drive sustained growth and market outperformance," said John Engel, chairman, president and CEO. "The success of our business model and integration efforts over the past two and a half years since our transformational combination with Anixter resulted in record full year sales of $21.4 billion, an increase of 18% over last year. We again set new company records for margin and profitability, and reduced leverage to below 3.0x for the first time since 2019. With this trajectory, we have taken a significant step forward in the achievement of our long-term target of 10%+ EBITDA margin. I am confident 2023 will be another transformational year with additional advances in our digital capabilities, strong topline growth, continued margin expansion and record free cash generation to support our capital allocation priorities. 

“Strong seasonal fourth-quarter growth was driven by secular demand trends, continued share gains and the start of supply chain pressures easing, Engel continued. "We meaningfully reduced net working capital while delivering stronger than anticipated topline growth in the fourth quarter, and generated record quarterly free cash flow of approximately $400 million.

“Each of our strategic business units again delivered strong double-digit organic sales and profit growth underscoring the success of our enterprise-wide cross selling and margin improvement programs. The fourth-quarter performance of our latest acquisition, Rahi Systems, builds on our data center solutions strategy and better positions us to capture value from this important secular-growth market. Our profitable execution across all three business units supports our investment in Wesco’s digital transformation positioning us to deliver an even higher level of performance, operating efficiency and customer loyalty.

“We are building on our strong positive momentum and 2023 is off to an excellent start. Our three-year post-merger integration plan is coming to a close, he added. "Our digital transformation plan is accelerating, and we are on-track to deliver advanced digital capabilities that will create superior value for our customers and supplier partners. We are confident in our ability to drive mid- to high-single digit sales growth this year, along with continued EBITDA margin expansion and approximately $600 to $800 million in free cash flow generation that supports our growth initiatives and capital allocation priorities. Most importantly, our dedicated team of colleagues continues to provide resilient and critical supply chain solutions for our customers around the world, capturing the benefits of our exposure to sustainable secular trends that are deep and drive our future sales and profitability. We look forward with greater confidence than ever to a future of sustained growth and market outperformance.”