Wesco Posts Record $21.4B Sales in 2022 - Modern Distribution Management

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Wesco Posts Record $21.4B Sales in 2022

The distributor of electrical and industrial products continues to blossom since its acquisition of Anixter International in 2020.

Global electrical and industrial products distributor Wesco International set record net sales of $21.4 billion in 2022, the company announced Feb. 14 when reporting its 2022 fourth-quarter and full-year financial results.

The Pittsburgh, Pennsylvania-based company had 4Q sales of $5.6 billion — also a record for Wesco — up 15% year-over-year. Wesco’s 4Q sales saw 14% organic sales growth year-over-year, with those organic sales up 4% sequentially from 3Q 2022, when sales were $5.4 billion.

Wesco also had record operating cash flow ($422 million) and free cash flow ($399 million) in 4Q. The distributor’s 4Q performance was bolstered by its acquisition of IT solutions distributor Rahi Systems, which closed in November.

By Wesco business segment in 4Q:

  • Electrical & Electronic Solutions (EES) sales of $2.2 billion grew 8.7% year-over-year, with organic sales up 11.3%. Sequentially, net sales fell 3% and organic sales rose 1% due to the negative effect of fluctuations in foreign exchange rates, according to a news release.
  • Communications & Security Solutions (CCS) sales of $1.8 billion increased 16.4% year-over-year. Organic sales were up 11.7% due to the positive impact of the Rahi Systems acquisition, according to the release. Sequentially, net sales grew 10% and organic sales rose 6.7%. The increase in organic sales year-over-year reflects price inflation and growth in Wesco’s security solutions and network infrastructures business, according to the release.
  • Utility & Broadband Solutions (UBS) sales of $1.6 billion grew 21.2% year-over-year while organic sales increased 22.2%. Sequentially, net sales grew 1.2% and organic sales increased 4.6%. The increase in organic sales compared to the prior year reflects price inflation, broad-based growth driven by investments in electrification, green energy, utility grid modernization and hardening, rural broadband development, according to the release.

For the full year 2022, Wesco’s record net sales of $21.4 billion were an 18% year-over-year increase, with organic sales also up 18%. The company also reported record operating profit of $1.4 billion; record gross margin of 21.8%, up 100 basis points year-over-year; and record earnings per diluted share of $15.33.

By Wesco business segment for the full year:

  • EES sales of $8.8 billion increased 15.8% from 2021, with organic sales up 17.3%, reflecting price inflation, and growth in the company’s industrial, construction, and OEM businesses, according to the release.
  • CSS sales of $6.4 billion grew 12% from 2021, with organic sales up 11.5% due to the Rahi Systems acquisition.
  • UBS sales of $6.2 billion increased 26.9% from 2021. Organic sales were up 27.2%, reflecting price inflation as well as growth in Wesco’s utility and broadband businesses.

“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,” Wesco Chairman, President and CEO John Engel said in the release. “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 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. 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.”

Wesco, which ranked No. 2 on MDM’s 2022 Top Electrical, Data & Security Distributors list, reported that its preliminary January 2023 sales were up 17% year-over-year. As Wesco continues to blossom since its $4.5-billion acquisition of Anixter International in 2020, the company rebranded its international operations under the name Wesco Anixter earlier this year.

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