行业焦点——第四季度分销市场更新

Heading Towards Stabilization:Moving Away From Recession?Despitechoppiness,supply chain normalizationfosterscontinued activity Sector MarketObservations Recession Expectations:As price increases continuetostick to customer bases,recovering verticalvisibility may cause price rebounds as supply anddemand reaches equilibrium.Despite internationaltradeimprovement,‘onshoring’and domesticmanufacturing incentives persist,fostering shorterlead times and new, localized sourcing relationships.Companies have found success in turning to cycle-resistant practices grounded in recurring services,durable products, and non-discretionary offerings.Most are forecasting flat GDP, but by nurturingspecialization and a niche, differentiating angle–many industry players have found success duringthese unprecedented times in resilient industriessuch as data centers, non-residential construction,and broader industrials. M&A:A large cohort of public entities have turned to stock buybacks as a means to keep management motivated and underscoreimminent outperformance. Horizontal integration and directly related inorganic growth prospects continue to be analyzed butscope has tightened. However, expiring, raised capital on the financial investor side and earmarked budgets on the public marketsside need to be deployed. Demand persists for differentiated business entities that bring geographic expansion, end marketinsulation, or even key customer accounts. Supply chainand Pricing:With falling lead timesand a normalizing supply chain,distributorscontinue to deplete bloated inventory as turnsbegin to reach pre-COVID levels. However,lingering caution may have created a new seculartrend in generally higher levels. Customers maylook for price cuts on more commoditizedproducts as thecompetitive landscape providesready alternatives at cheaper prices on a globalscale. Demand has been patient and cooperative,but with supply actively ramping up andbeginning to bridge the gap, a middle ground laysin the midst. PublicDistributors Industry Takeaways 2023 Market Outlook “Despite the economic uncertainty heading into 2023, our high-level earningsalgorithm remains intact. Within our High-Touchsegment, over the longer-term economic cycle, we target growing 400 to 500 basis points faster thanthe U.S. MRO market and remain confident in our ability to do so.”–DeidraMerriweather, CFO, W.W. Grainger “As we mentioned, we think that GDP here in the U.S. is going to be essentially flat. Wedo think that there are pockets of the end markets that we serve that will still be verypositive, including non-res construction, the industrial markets, data center growth.We're still expecting that to be. Andso that's where we're still assuming that we have avolume opportunity as well as the pricing carryover, that's going to move our sales upin 2023.”-David Schulz, CFO, WESCO International M&A Industry Quotes "Our acquisition strategy continues to create significant value for SiteOne, with astrong balance sheet and a robust pipeline across all lines of business andgeographies, we are confident that we will be able to add many moreoutstanding companies to SiteOne in 2023.”–Scott Salmon,EVP Strategy &Development, SiteOne Landscape Supply “We'll continue to take a look at M&A activity and see what may make sense for ourcompany. But again, I think the common stock dividend and the buyback issomething that we will be initiating here in 2023.”–David Schulz, CFO, WESCOInternational “We remain committed to seeking out bolt-on acquisitions that fit our strategic, financial andcultural filters. Our next 2 priorities are tuck-in acquisitionsand share buybacks at the rightvaluation levels”–Erik Gershwind, CEO, MSC Industrial Direct Price, Volume, and Inflation Quotes “The price cost drag widened slightly, which is a little more than expected,reflecting some improvement on the fastener side but incrementalchallenges in other products offsetting this. In fact, we experiencedbroader product margin pressure in our non-fastener and non-safetyproducts. These categories tend to have a less centralized supply chain and the spend tends to be more unplanned, which when combined with slower demand and a better stock marketplace resulted in broader discounting. We believe thisrelates more to our actions than the state of the market and have plans to address it in the first quarter of 2023. “–Holden Lewis, CFO, Fastenal Company Supply Chain Quotes “In general, the supply chain on the outbound side, both in ourbuildings andthen our freight partners is very, very good. On the inbound side, we still havesome elongated supply chains. It's gotten much better in the past 4 or 5months, and we expect to continue to get better. At normal, I think I'd probablysay inquotes now. I do expect it to get closer to 2019 lead times, but maybe not quite all the way there as the year progresses, but we do expect it to continue to get better.”-Donald G. Macpherson, CEO, W.W. Grainger Notable Recent Trans