Investor Presentation August 2015 NYSE: DNOW 2015 COPYRIGHT DISTRIBUTIONNOW
Vision DistributionNOW will be recognized as the market Leader in Supply Chain Management through superior customer service by leveraging the strengths of our employees, processes, suppliers and information. Countries 20+…
Company Snapshot One of the largest distributors to the energy industry 2014 Revenue by Segment Legacy of over 150 years operating Canada International 16% 16% Support major land and offshore operations for all the key energy…
Global Customer Reach Company Locations NORWAY Branches UK RUSSIA CANADA Aberdeen Edmonton Estevan Sales Offices KAZAKHSTAN NETHERLANDS POLAND Distribution Centers AZERBAIJAN USA South Plainfield Los Angeles KUWAIT CHINA…
Global Customer Reach Export by Country US Wilson Export Aberdeen UK Export Dubai Export Export Country Crossover Houston Dubai 6 2015 COPYRIGHT DISTRIBUTIONNOW
Comprehensive Product Offering and Balanced Revenue Mix DNOW carries a broad range of products to meet rapid and critical deliveries to customers in remote areas of service Limited exposure to commodities Oil country tubular goods…
Value Proposition Product Offering A Critical Link Through Leading Supply Chain Technology Markets Knowledgeable people Customer Valves & Exploration & Pipe, Fittings & Flanges Actuation Product Drilling Production Application…
Blue-Chip Customers and Suppliers Suppliers Customers Drilling Contractors / Exploration & Production Midstream Downstream & Industrial 9 2015 COPYRIGHT DISTRIBUTIONNOW
Flexible Operational Model REGIONAL CAPITAL PROJECTS SUPPLY CHAIN SOLUTIONS BRANCHES EXPORT DISTRIBUTION CENTER & VALVE ACTUATION Branch network model Distribution centers Broad sourcing capability Global sourcing and Vast…
Quality-Triple Impact Supplier Program SUPPLIER AUDITS QUALITY CHECKPOINTS Assessment and qualification of new Supplier performance reporting (KPIs) suppliers Trial order lab testing Reassessment of existing suppliers Quarterly…
Key Investment Highlights 1 Large and highly fragmented market 2 Focused growth strategy through capital allocation 3 Robust IT capabilities underpin efficient operations and differentiated value proposition 4 Operational…
1 Large and Highly Fragmented Market DistributionNOW is one of the largest distributors to 20bn+ addressable market in North America the energy industry worldwide 900 million in inventory to support customers MRC More than…
2 Growth Strategy through Capital Allocation 2 3 1 Energy Branches: Supply Chain Services: Future Opportunities Organic Growth Growth through Capital Allocation Increase presence in non- Further penetrate downstream Broaden…
3 Robust IT Capabilities Underpin Efficient Operations and Differentiated Value Proposition DNOW has implemented an integrated ERP system linking global branches, customers and suppliers Greatly enhances operational efficiency…
4 Operational Initiatives and Scalability Drive Efficiencies Highly flexible model Global ERP system Operational Centralized pricing discipline Excellence Leveraged international sourcing Distribution center supported inventory…
5 Macro Industry Trends Favor Players With Extensive Scale DNOW has sophistication, scale and geographic reach to serve an increasingly consolidated and global customer base Customer centralizing procurement Industry consolidation of…
7 Successful Acquisition and Integration Track Record Selected Acquisitions Wilson and CE Franklin Highlights Date Acquisition Country Expanded DNOWs end market offering with immediate entry into December 1998 Dominion Oilfield…
8 Attractive Cash Generation and Returns Through the Cycle Free Cash Flow and EBITDA ( in millions) 264 235 239 198 2014 Financial Snapshot 146 157 106 98 Revenue: 4.1 billion Gross margin: 20% 2011(1) 2012 (1) 2013…
8 Attractive Cash Generation and Returns Through the Cycle Free Cash Flow and EBITDA ( in millions) 239 235 264 198 2014 Financial Snapshot 262 69 Revenue: 4.1 billion (6) (85) (1) (1) Gross margin: 20% 2011 2012 (2)…
9 Experienced Leadership 30 year average tenure of Leadership team Extensive industry experience Focus on results, process and relationships Merrill A. Pete Miller, Jr. Burk L. Ellison Daniel L. Molinaro Executive Chairman…
Financial Highlights Solid market share growth through the cycles Robust cash flow generation through the cycles Substantial operating leverage drives margin improvement Low capital intensity business model requires limited…
Low Capital Intensity Business Model Requires Limited Investment Capital Expenditures 4 Year Trend Capital Expenditures Quarterly Results ( in millions) ( in millions) 1.3% 1.3% 0.9% 0.3% 0.4% 0.3% 0.4% 45 12 29 10 4 11 3 3…
Free Cash Flow (1) Free Cash Flow and FCF Conversion 4 Year Trend Free Cash Flow 4 Year Trend ( in millions) ( in millions) 262 146 157 106 98 62% 60% 49% 69 44% (6) (1) (1) (2) (2) 2011 2012 2013 2014 2011 2012 2013 2014…
Cash Generation Capital Employed and Pretax ROCE 4 Year Trend Working Capital Percent of Sales 4 Year Trend ( in millions) ( in millions) 1,982 1,976 1,820 1,420 1,491 1,427 15.8% 1,299 34.8% 12.6% 12.2% 1,188 32.3% 9.0%…
Long Term Outlook 2015: Positioning DNOW for long term growth Managing through a challenging market cycle Growth target: organic market share gains of low single digits each year Energy Branch segment revenues will track well…
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