Customer Engagement. Chris Corley. Senior Vice President Corporate Sales CDW Corporation

Transcription

1 Customer Engagement Chris Corley Senior Vice President Corporate Sales 2012 CDW Corporation

2 Disclaimers This presentation contains forward-looking statements within the meaning of the federal securities laws. These statements relate to analyses and other information, which are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to the future prospects, developments and business strategies of CDW. These forward-looking statements are identified by the use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict, "project," "will" and similar terms and phrases, Including references to assumptions. However, these words are not the exclusive means of identifying such statements. Although CDW currently believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, and based on reasonable assumptions, CDW cannot assure you that it will achieve those plans, intentions or expectations and that actual results may differ and that such differences may be material. Important factors that could cause actual results to differ materially from the forward-looking statements made in this presentation include, but are not limited to risks associated with: changes in economic conditions; decreases in spending on technology products; the Company's relationships with vendor partners and availability of their products; the Company's ability to partner with new and emerging technological providers; continued innovations in hardware, software and services offerings by the Company's vendor partners; substantial competition that could reduce the Company's market share; the Company's substantial indebtedness and ability to generate sufficient cash to service such indebtedness; restrictions imposed by the Company's indebtedness on its operations and liquidity; changes in, or the discontinuation of, CDW s share repurchase program or dividend payments; the continuing development, maintenance and operation of the Company's information technology ("IT') systems; potential breaches of data security; potential failures to comply with public segment contracts or applicable laws and regulations; potential failures to provide high-quality services to the Company's customers; potential losses of any key personnel; potential interruptions of the flow of products from suppliers; potential adverse occurrences at one of the Company's primary facilities or customer data centers; the Company's dependence on commercial delivery services; the Company's exposure to accounts receivable and inventory risks; future acquisitions or alliances; fluctuations in the Company's operating results; current and future legal proceedings and audits; and potential acceleration of CDW s deferred cancellation of debt income. The foregoing factors are not exhaustive, and new factors may occur that could materially impact the business of the Company. All forward-looking statements included in this presentation are based on information available to the Company on the date hereof. The Company undertakes no obligations to update or revise publicly or otherwise any forwardlooking statements, whether as a result of new information, future events or otherwise, except as required by law. Earnings before interest, taxes and depreciation and amortization ( EBITDA ), adjusted EBITDA, adjusted EBITDA margin, non-gaap net income, non-gaap net income per diluted share and return on invested capital ( ROIC ) are financial measures that are not based on generally accepted accounting principles in the United States ( non-gaap ). CDW believes these non-gaap financial measures provide helpful information with respect to CDW s operating performance and cash flows, including its ability to meet its future debt service, capital expenditures and working capital requirements. CDW also believes that adjusted EBITDA provides helpful information as it is the primary measure used in certain financial covenants contained in CDW s credit agreements, while ROIC provides helpful information as it measures how effectively CDW uses capital to generate operating income. A reconciliation of each non-gaap financial measure to the applicable most comparable GAAP financial measure is included in the Appendix to this presentation. Non-GAAP measures used by CDW may differ from similar measures used by other companies, even when similar terms are used to identify such measures. 2

3 Factors Impacting Organizations Market factors 1 1 Technology factors People skills 2 2 Market factors Macro-economic factors 3 3 Macro-economic factors Globalization 4 4 People skills Regulatory concerns 5 5 Regulatory concerns Technology factors 6 6 Socio-economic factors Socio-economic factors 7 7 Globalization Environmental issues 8 8 Environmental issues Geopolitical factors 9 9 Geopolitical factors Source: The customer-activated enterprise, IBM Institute for Business Value, October

4 ~$215bn Market Opportunity with Attractive Growth Profile Large Market Size and Attractive Growth Profile Vendor Partners Increasingly Reliant on the Indirect Channel Total U.S. IT Market 2 : ~$675bn Direct 41% Indirect 59% Increased ~200bps since CDW Current Addressable Market 1 : ~$215bn CDW Grew Faster Than Its Vendor Partners 5.9% 1.5% CAGR U.S. IT Spending: 3.2%² Top 3 Vendor Sales 4 CDW Sales CAGR in North America CDW s Addressable Market is Large and Growing 1 IDC, Company 10-Ks, Wall Street research, VAR500 database, CDW internal estimates as of December 31, IDC Worldwide Black Book, December IDC, July Represents the CAGR of the combined sales of CDW s top 3 vendor partners 4

5 Leading Sales Channel for Key Vendor Partners Major Vendor Partners Emerging Vendor Partners Mission-Critical for Key Vendors 5

6 Proven Track Record of Evolving with IT Transformation Trends Complexity / Productivity and Growth Benefits Highly Integrated and Interconnected Technology Ecosystem Over 1,800 field sellers, specialists, and advanced service delivery engineers Hardware and Software Products Printers Storage Networking Electronics Deep knowledge of integrated IT solutions for a wide range of customer needs Monitors Software Cables Servers Computers Accessories Office Services Extensive services capabilities Early 2000s Products Current Integrated Solutions 6

7 Highly-Skilled Sales and Services Capabilities Total Coworkers Increased by 32% +87% Specialists Advanced Services Delivery Engineers Field Sellers Account Managers +29% Specialists and Engineers Allow CDW to Deliver Increasingly Complex IT Solutions 7

8 CDW Customer Segments Corporate Segment Public Segment Other Medium-Large Business Small Business Government Education Healthcare Targeted Customers 100 5,000 employees employees Various agencies within federal, state and local governments Higher education and K-12 Hospital systems, independent hospitals, ambulatory Advanced services customers across our channels plus Canadian businesses and agencies 2014 Net Sales ($bn) $5.5 $1.0 $1.4 $1.8 $1.6 $0.7 Medium / Large Businesses Small Businesses Government Education Healthcare Other 14% 1% 20% 12% 30% 29% 26% 16% 9% 10% 10% 12% 9% 10% 12% 3% 7% 3% 9% (3%) (5%) (2%) (15%) (23%) growth CAGR CAGR 13 - '14 growth 8

9 Face-To-Face Phone E-commerce Mobile Customer Engagement Model Customer Partner Resources Account Manager Service Delivery Coworkers Specialists Sales Management Field Sellers Multiple Models to Engage Customer 9

10 Relevance With Our Customers 10

11 Experienced Salesforce 2014 U.S. Daily Avg Gross Sales $ and Account Manager Count (average) Avg. Daily Sales Avg. AM Count 61% of sales from AMs with 84+ months of experience, up from 33% in ~750 AMs in 84+, with an average tenure of ~11 years 1 1 Based on December YTD U.S. gross sales 11

12 Total Seller Productivity Net Sales Per Average Seller ($mm) Sales Productivity Initiatives $3.2 $3.4 $3.6 $3.8 $4.3 Book management Acquisition programs $ Category penetration Performance management Sub-segmentation Top seller support Bid desk process Drop-ship process 12

13 Integrated Approach to Sales Onboarding Culture and Expectations Top Talent Curriculum Book of Business Shared Ownership Feedback Loop = Increased Productivity Accelerated Readiness Longer training hours Demanding Rigorous Selective Competitive Successful Sales Leaders and Account Managers Sales and technology focused Solutionoriented Segmentspecific Classroom and experiential Starter Book Accounts with potential Talent Acquisition Sales Academy Hiring Sales Managers Sales VPs Increased productivity in early LOS bands Rigorous testing Phase 1 (4 weeks), Phase II (2 weeks), Phase III (4 months) 13

14 CDW s Winning Formula Provides Sustainable Competitive Advantages Scale and Scope Performance-Driven Culture Highly-Skilled Sales and Services Capabilities National Footprint Distribution Deep and Experienced Management Superior Value Differentiated Growth Strong ROIC 14

15 2012 CDW Corporation