WESCO International (WCC) Baird 55th Annual Global Industrial Conference summary

Business performance and growth drivers

• Achieved strong organic growth: 6% in Q1, 7% in Q2, and 12% in Q3, with Q3 sales surpassing $6 billion for the first time.

• 2024 sales reached $21.8 billion, with 2025 sales expected to grow to $23.3–$23.6 billion and organic growth outlook raised to 8–9%.

• Data center sales represented 19% of Q3 total sales and reached $4.0B on a trailing twelve-month basis, up ~60% year-over-year.

• CSS leads globally in datacom and IP security, with 40% of CSS sales from data centers, which grew 18% in Q3.

• EES grew 12% in Q3, with construction and OEM segments both growing mid-teens and industrial mid- to high single digits.

Strategic positioning and market trends

• Positioned as a market leader with a unique portfolio spanning electrical, datacom, security, utility, and broadband, benefiting from reshoring and U.S. reindustrialization trends.

• Well positioned in high-growth end-markets: data centers, electrification, automation, and reshoring.

• Secular trends in reshoring, nearshoring, and supply chain reengineering are driving growth, especially in OEM and industrial segments.

• Utility sector is shifting from cyclical to secular growth, driven by surging electricity demand from data centers and mega infrastructure projects.

• Power generation and skilled labor are key constraints for infrastructure build-out, but long-term growth is expected.

Capital allocation and M&A strategy

• 25% of cash flow is allocated to dividends, which have increased 10% annually since inception; 75% is used for acquisitions, buybacks, and debt reduction.

• Strategic capital deployment prioritizes M&A, share repurchases, and internal investment.

• Focused on adding service capabilities through targeted acquisitions, with recent deals like Rahi Systems and Ascent enhancing data center services.

• Cross-sell initiatives post-Anixter acquisition generated $2.3 billion in sales over three years, far exceeding initial targets.

• Future M&A will prioritize service capability expansion and strategic fit over scale alone.