While it won’t get into specifics, HVACR distributor Watsco (NYSE: WSO), Coconut Grove, FL, has big plans for its sales growth – aiming to grow to $10 billion in revenues from its $3.4 billion in 2012.
“We’re very ambitious,” CEO Albert Nahmad said in the company’s third quarter 2013 earnings call. “We have an internal goal of tripling this business in size. And to do that, you have to … consider future acquisitions, which we do, and you have to consider new product offerings.
“… And you have to consider the geographic reach by opening up new branches.”
Paul Johnston, vice president of business development and strategy, says the distributor will also need to look at how it can become more efficient as it grows its footprint and expands its product mix. Investing in technology will be a part of that equation, he says. Johnston was speaking during Watsco’s recent Investor & Analyst Meeting, available on Watsco’s website.
The HVACR segment is evolving, according to Watsco, with a growing role played by newer product categories including controls and ductless systems. On the latter, Johnston says, “it’s still a small market, but it’s growing” in the U.S.
The shifts in the market mean that Watsco can reach out to new channel partners. Watsco’s primary customer base is contractors; the distributor pointed to the non-contractor segment as a growth opportunity, including security and cable businesses.
Currently, 86 percent of Watsco’s business is in the U.S. and 8 percent is in Canada. The rest of its business is in Latin America and the Caribbean.
The U.S. business is now in 38 states, with 517 locations and 650 commissioned salespeople.
According to Steve Rush, who oversees the U.S. operations, growth investments for the domestic operations include technology, channel expansion, product expansion, brick and mortar expansion and acquisitions.
Charlie Figueroa, who oversees the international business for Watsco, reported Canadian revenues for 2012 were $335 million, with 36 locations and 329 employees. The Canadian business’ focus is to gain market share in the country. Latin American sales are at about $240 million in 2012, up from $155 million in 2009.
Latin American plans include expanding sales of parts and supplies; expanding equipment sales through additional coverage in countries and channels; and more than double the branch footprint in Mexico, where Watsco currently has 11 locations.
