Wesco International Inc (WCC) 2023 Q4 法說會逐字稿

Hello, and welcome to WESCO's Fourth Quarter and Full Year 2023 Earnings Call.

您好，歡迎參加 WESCO 2023 年第四季和全年財報電話會議。

(Operator Instructions)

（操作員說明）

This event is being recorded. I would now like to hand the call over to Scott Gaffner, SVP, Investor Relations, to begin. Please go ahead.

該事件正在被記錄。我現在想將電話交給投資者關係高級副總裁 Scott Gaffner。請繼續。

Thank you, and good morning, everyone. Before we get started, I want to remind you that certain statements made on this call contain forward-looking information. Forward-looking statements are not guarantees of performance and by their nature, are subject to inherent uncertainties. Actual results may differ materially. Please see our webcast slides as the company's SEC filings for additional risk factors and disclosures.

謝謝大家，大家早安。在我們開始之前，我想提醒您，本次電話會議中所做的某些陳述包含前瞻性資訊。前瞻性陳述並非業績的保證，就其性質而言，存在固有的不確定性。實際結果可能存在重大差異。請參閱我們的網路廣播投影片作為公司向 SEC 提交的文件，以了解更多風險因素和揭露資訊。

Any forward-looking information related on this call speaks only as of this date, and the company undertakes no obligation to update the information to reflect the changed circumstances. Additionally, today, we will use certain non-GAAP financial measures. Required information about these non-GAAP measures is available on our webcast slides and in our press release, both of which you can find on our website at wesco.com.

與本次電話會議相關的任何前瞻性資訊僅代表截至目前的情況，本公司不承擔更新資訊以反映變更的情況的義務。此外，今天我們將使用某些非公認會計準則財務指標。有關這些非公認會計原則措施的必要資訊可在我們的網路廣播投影片和新聞稿中找到，您可以在我們的網站 wesco.com 上找到這兩種資訊。

On the call this morning, we have John Engel, WESCO's Chairman, President and CEO; and Dave Schulz, Executive Vice President and CFO. Now I'll turn the call over to John.

今天早上的電話會議上，WESCO 董事長、總裁兼執行長約翰·恩格爾 (John Engel) 出席了電話會議。執行副總裁兼財務長戴夫舒爾茨 (Dave Schulz)。現在我將把電話轉給約翰。

Thank you, Scott. Good morning, everyone, and thank you for joining the call today. You saw from our earnings release earlier today, we had a very disappointing fourth quarter to close out 2023, which results well below our expectations. These results, they're unacceptable. They're unacceptable to me and they're unacceptable to the entire WESCO management team.

謝謝你，斯科特。大家早安，感謝您今天加入電話會議。從我們今天稍早發布的財報中可以看出，2023 年第四季的表現非常令人失望，結果遠低於我們的預期。這些結果是他們無法接受的。他們對我來說是不可接受的，對整個 WESCO 管理團隊來說也是不可接受的。

We understand the issues that drove our fourth quarter results, and we're already taking actions to address them. Dave will take you through this in detail shortly. But first, I'll summarize the 3 key issues we had in the fourth quarter.

我們了解推動第四季度業績的問題，並且我們已經採取行動來解決這些問題。戴夫將很快帶您詳細了解這一點。但首先，我將總結第四季我們遇到的 3 個關鍵問題。

First, reported sales declined 2% versus our expectation for flat to slightly positive sales. This was due to a market downshift and reduced purchases with some customers. Second, we experienced higher SG&A expenses. This was due to higher-than-anticipated benefits and health care costs, along with higher cost to operate our facilities and IT-related expenses. And finally, our free cash flow generation was below our expectations. This was due to a lower accounts payable balance related to the timing of purchases.

首先，報告的銷售額下降了 2%，而我們預期銷售額持平或略有成長。這是由於市場下滑和一些客戶的購買量減少所致。其次，我們的銷售、管理及行政費用增加。這是由於福利和醫療保健成本高於預期，以及設施營運成本和 IT 相關費用較高。最後，我們的自由現金流產生低於我們的預期。這是由於與採購時間相關的應付帳款餘額較低。

On a full year basis last year, certain sectors, including utility, data centers, industrial security and network infrastructure continued to grow, somewhat consistent with our expectations, while others underperformed, including broadband and specific OEM and construction-related sectors.

就去年全年而言，包括公用事業、資料中心、工業安全和網路基礎設施在內的某些行業持續成長，與我們的預期有些一致，而其他產業則表現不佳，包括寬頻和特定OEM 以及建築相關行業。

As a leading global provider of business supply chain solutions, the WESCO team effectively navigated through this mixed economic environment last year. And this was all done while managing changing customer buying patterns as supply chains yield.

作為全球領先的商業供應鏈解決方案提供商，WESCO 團隊在去年有效地應對了這種複雜的經濟環境。這一切都是在管理隨供應鏈收益而變化的客戶購買模式的同時完成的。

I'm pleased that our team delivered 5% revenue growth in 2023 following 2 years of double-digit increases given these market challenges. We finished the year with a backlog -- with our backlog near a historical high level and stable versus the end of September. Our free cash flow generation was higher in the second half and we returned 1/3 of our full year free cash flow to common shareholders through dividends and share repurchases.

考慮到這些市場挑戰，我很高興我們的團隊在連續兩年實現兩位數成長後，在 2023 年實現了 5% 的營收成長。我們以積壓結束了這一年——我們的積壓接近歷史高位，並且與 9 月底相比保持穩定。下半年我們的自由現金流產生量更高，我們透過股利和股票回購將全年自由現金流的 1/3 回饋給普通股股東。

So as we move into 2024, and we take a look forward, the long-term secular growth trends that we have consistently described will continue to provide us with the opportunity to outperform the market and our competition. While our view of the general economic conditions in 2024 as favorable, I'm mindful of the uncertain backdrop that the election cycle, easing inflation, geopolitical upheaval and short-term borrowing rates may have on demand. Regardless of these near-term impacts, as a market leader, we expect to benefit from our global capabilities, our leading scale and our expanded portfolio of product services and solutions.

因此，當我們進入 2024 年時，展望未來，我們一貫描述的長期長期成長趨勢將繼續為我們提供超越市場和競爭對手的機會。雖然我們認為 2024 年總體經濟狀況良好，但我注意到選舉週期、通膨放緩、地緣政治動盪和短期借款利率可能帶來的不確定背景。無論這些短期影響如何，作為市場領導者，我們預計將從我們的全球能力、領先規模以及擴大的產品服務和解決方案組合中受益。

Our investment and commitment in our digital transformation are expected to magnify those benefits as we roll out that program over the next 36 months. The substantial cash flow that WESCO generates has supported that investment over the last 2 years while allowing us to return capital to our shareholders. I am confident that WESCO will outperform our markets again this year, and we are positioned to deliver profitable sales growth and continue toward our long-term EBITDA margin expansion goal.

隨著我們在未來 36 個月內推出該計劃，我們對數位轉型的投資和承諾預計將放大這些效益。 WESCO 產生的大量現金流支持了過去兩年的投資，同時使我們能夠向股東返還資本。我相信 WESCO 今年將再次跑贏我們的市場，我們有能力實現可獲利的銷售成長，並繼續實現我們的長期 EBITDA 利潤率擴張目標。

Finally, I want to take a moment to provide you with 2 important updates. First, I'm very pleased to announce that we are narrowing and lowering our target leverage range for the first time since the company went public 25 years ago. You'll recall that we have historically had a target leverage range of 2.0 to 3.5x net debt to EBITDA.

最後，我想花點時間向您提供 2 個重要更新。首先，我非常高興地宣布，自公司 25 年前上市以來，我們首次縮小並降低了目標槓桿範圍。您可能還記得，我們​​歷史上的目標槓桿範圍是 EBITDA 淨債務的 2.0 至 3.5 倍。

Based on our size and scale and upsized cash generation, we believe it is the appropriate time to update this important target. Moving forward, our target leverage range is 1.5 to 2.5x net debt to EBITDA and this represents a reduction of 0.75 of a turn at the midpoint compared with our prior range.

根據我們的規模和規模以及增加的現金產生能力，我們認為現在是更新這一重要目標的適當時機。展望未來，我們的目標槓桿範圍是 EBITDA 淨債務的 1.5 至 2.5 倍，這意味著與我們之前的範圍相比，中點減少了 0.75 倍。

Second, we are increasing our cash -- return of cash to shareholders in 2024. Our Board of Directors intends to increase WESCO's dividend by 10% beginning in the first quarter of this year. We are also continuing our share repurchase program, and we expect our share repurchases this year to outpace last year.

其次，我們正在增加現金——在 2024 年向股東返還現金。我們的董事會打算從今年第一季開始將 WESCO 的股息增加 10%。我們仍在繼續我們的股票回購計劃，我們預計今年的股票回購速度將超過去年。

Now turning to Page 4. I want to take a brief word and a brief minute to summarize the successful completion of our 3-year integration of Anixter. The acquisition of Anixter literally transformed WESCO. This acquisition not only established WESCO as the clear leader in several of our business segments, but it also mix-shifted our business to higher growth and higher-margin end markets, reducing our cyclicality and increasing our resilience across all phases of the economic cycle.

現在翻到第 4 頁。我想用簡短的一句話和簡短的一分鐘來總結我們歷時 3 年的 Anixter 整合的成功完成。收購 Anixter 徹底改變了 WESCO。此次收購不僅使WESCO 成為我們多個業務領域的明顯領導者，而且還將我們的業務混合轉移到更高成長和更高利潤的終端市場，減少我們的週期性並增強我們在經濟週期各個階段的彈性。

If we look at our performance metrics since the acquisition, they underscore the extraordinary performance and commitment of the entire WESCO team. We exceeded all our initial operational synergy targets set at the time of the Anixter acquisition. Sales increased 30% and adjusted EBITDA increased 89% versus the 2019 performance of the stand-alone companies. And EBITDA margin expanded 240 basis points.

如果我們檢視收購以來的績效指標，就會發現整個 WESCO 團隊的卓越績效和承諾。我們超越了收購 Anixter 時設定的所有初始營運協同目標。與獨立公司 2019 年的業績相比，銷售額成長了 30%，調整後的 EBITDA 成長了 89%。 EBITDA 利潤率擴大了 240 個基點。

We did all this while rapidly delevering our balance sheet by 3 turns, 1 year ahead of schedule. Most importantly, since closing the Anixter merger in June 2020 through the end of 2023, total shareholder return was 353% compared to 62% for the S&P 500.

我們在完成這一切的同時，迅速將資產負債表去槓桿化了三輪，比原計劃提前一年。最重要的是，自 2020 年 6 月完成 Anixter 合併以來，到 2023 年底，股東總回報率為 353%，而標準普爾 500 指數的股東總回報率為 62%。

As we sit here today, WESCO is much more than a traditional distributor. We're a critical partner to both our suppliers and our global set of customers. The combination of WESCO and Anixter has created a new paradigm.

當我們今天坐在這裡時，WESCO 不僅僅是一個傳統的經銷商。我們是供應商和全球客戶的重要合作夥伴。 WESCO 和 Anixter 的結合創造了一個新的範例。

The digital transformation that we committed to at the time of the acquisition is designed to take that new paradigm and create the WESCO of tomorrow. That further empowers us to capitalize on our long-term secular trends from which we are uniquely positioned to benefit compared to our competitors.

我們在收購時致力於的數位轉型旨在採用新的範式並創建明天的 WESCO。這進一步使我們能夠利用我們的長期長期趨勢，與競爭對手相比，我們具有獨特的優勢，可以從中受益。

I'll now hand it over to Dave to take you through our fourth quarter and full year 2023 results as well as our outlook for 2024. Dave?

現在我將把它交給戴夫，讓您了解我們的 2023 年第四季和全年業績以及我們對 2024 年的展望。戴夫？

Thank you, John. Good morning, everyone, and I appreciate you're joining the call today. As John mentioned, we had a disappointing quarter with sales, margin and cash flow below our expectations.

謝謝你，約翰。大家早安，非常感謝您今天加入通話。正如約翰所提到的，我們的季度業績令人失望，銷售額、利潤率和現金流都低於我們的預期。

On Slide 5, you see a summary of our fourth quarter results. Reported sales were down 2% year-over-year. Like the third quarter, growth in utility, industrial, data centers and enterprise network infrastructure was more than offset by declines in broadband, security, OEM and construction.

在投影片 5 上，您可以看到我們第四季業績的摘要。報告銷售額年減 2%。與第三季一樣，公用事業、工業、資料中心和企業網路基礎設施的成長被寬頻、安全、OEM 和建築業的下降所抵消。

We experienced customer destocking in our shorter-cycle businesses in the second and third quarters. In the fourth quarter, we saw a step-down in demand versus our expectations, particularly in December.

在第二季和第三季度，我們的短週期業務經歷了客戶去庫存。在第四季度，我們看到需求低於我們的預期，特別是在 12 月。

On an organic basis, sales were down approximately 3%, as a 2-point positive contribution from price was offset by a 5% decline in volume. While our stock and flow sales were down in the fourth quarter, we continue to see strong project demand with direct shipment sales up versus the prior year.

從有機角度來看，銷售額下降了約 3%，價格的 2 個百分點的積極貢獻被銷量下降 5% 所抵消。儘管我們的庫存和流量銷售在第四季度有所下降，但我們仍然看到強勁的項目需求，直接發貨銷售比上年有所增長。

Project backlog continues to be at historically high levels, supporting our outlook for growth in 2024. In total, backlog was down 10% year-over-year and down approximately 1% sequentially from the end of September. We expect backlog to continue to moderate in 2024 as lead times have improved for most product categories.

專案積壓持續處於歷史高位，支撐了我們對 2024 年成長的展望。總體而言，積壓專案年減 10%，較 9 月底環比下降約 1%。我們預計 2024 年積壓訂​​單將繼續減少，因為大多數產品類別的交貨時間有所改善。

Gross margin was 21.4%, down 20 basis points sequentially. Relative to the prior year quarter, the 50 basis point decline in gross margin was driven by the anticipated reduction in supplier volume rebates as well as the impact of business mix. We continue to prioritize profitable top line growth and as an industry leader and tend to protect the progress we've made on gross margin with our enterprise-wide margin improvement program.

毛利率為21.4%，較上一季下降20個基點。與去年同期相比，毛利率下降了 50 個基點，這是由於供應商數量回扣的預期減少以及業務組合的影響。作為行業領導者，我們繼續優先考慮盈利性營收成長，並傾向於透過我們的企業範圍利潤率改善計劃來保護我們在毛利率方面取得的進展。

Adjusted EBITDA was down 15% year-over-year, primarily reflecting the impact of lower sales and gross margin as well as higher SG&A expenses, which I'll discuss on the next slide. Adjusted diluted earnings per share for the quarter was $2.65, $1.48 lower than the prior year, primarily due to lower sales and margins. The impact of higher interest expense and a higher effective tax rate were a combined headwind of approximately $0.40 in the quarter. As part of our commitment to return more capital to shareholders, we repurchased $25 million of common stock in November.

調整後 EBITDA 年比下降 15%，主要反映了銷售額和毛利率下降以及 SG&A 費用上升的影響，我將在下一張幻燈片中討論這一點。本季調整後攤薄每股收益為 2.65 美元，比去年同期低 1.48 美元，主要是由於銷售額和利潤率下降。較高的利息支出和較高的有效稅率的影響在本季度產生了約 0.40 美元的綜合阻力。作為向股東返還更多資本的承諾的一部分，我們於 11 月回購了 2500 萬美元的普通股。

As we start 2024, preliminary sales per work day in January were down approximately 5% from the prior year, with CSS down low single digits and EES and UBS down mid-single digits. This decline reflects the continued weakness in broadband, construction and OEM that we saw in the fourth quarter and a slow start in utility against a strong base period comparison. Of note, January backlog ticked up slightly compared to December.

2024 年開始，1 月每個工作日的初步銷售額較上年下降約 5%，其中 CSS 下降了低個位數，EES 和 UBS 下降了中個位數。這一下降反映了我們在第四季度看到的寬頻、建築和 OEM 領域的持續疲軟，以及公用事業與強勁基期比較相比的緩慢起步。值得注意的是，1 月積壓訂單較 12 月略有增加。

Turning to Slide 6. On this page, we want to provide you some additional insight to the sales miss in the quarter. As you can see, the exceptionally strong growth that we experienced in 2022 continued into 2023, but slowed materially in the second quarter as pricing benefits and volume growth moderated. In the second and third quarters, volume was relatively flat with price contributing about 3 points to the top line. As we moved into the fourth quarter and as we mentioned on the earnings call in early November, we expected to see an acceleration of sales from October to November and again into December, primarily driven by the shipment of projects from the backlog. Instead, we experienced a further slowdown in our stock and flow sales, along with some project delays, primarily within our CSS business. We are expecting organic sales to remain flat and instead, they were down approximately 3%.

轉向投影片 6。在本頁上，我們希望為您提供有關本季銷售失誤的一些額外見解。正如您所看到的，我們在 2022 年經歷的異常強勁的增長持續到 2023 年，但由於定價優勢和銷售增長放緩，第二季度大幅放緩。第二和第三季度，成交量相對持平，價格對營收貢獻了約 3 個百分點。隨著我們進入第四季度，正如我們在 11 月初的財報電話會議上提到的那樣，我們預計 10 月至 11 月以及 12 月的銷售將加速，這主要是由積壓項目的發貨推動的。相反，我們的庫存和流量銷售進一步放緩，以及一些項目延遲，主要是在我們的 CSS 業務範圍內。我們預計有機銷售額將保持平穩，但實際上下降了約 3%。

Turning to Page 7. As I mentioned a moment ago, organic sales were down approximately 3% versus the prior year, reflecting a 2% benefit from price offset by lower volumes. Market volumes declined and were only partially offset by share gains as cross-sell was a positive versus the prior year. On the right side of the page, you can see the adjusted EBITDA impacts of lower sales, gross margin headwinds and higher SG&A in the fourth quarter. The year-over-year increase in SG&A was primarily due to higher salaries and benefits, higher costs to operate our facilities and higher costs related to our digital transformation. These increases were partially offset by the cost reduction actions taken in June. In total, adjusted SG&A represented 14.6% of sales, up 60 basis points from the prior year and I'll provide you more details on SG&A later in the call.

轉向第 7 頁。正如我剛才提到的，有機銷售額比前一年下降了約 3%，反映出銷量下降抵消了價格帶來的 2% 的收益。市場成交量下降，但僅被份額收益所部分抵消，因為與前一年相比，交叉銷售是積極的。在頁面右側，您可以看到第四季度銷售額下降、毛利率不利以及 SG&A 上升對調整後 EBITDA 的影響。 SG&A 的同比增長主要是由於工資和福利的增加、設施運營成本的增加以及與數位轉型相關的成本的增加。這些成長被 6 月採取的成本削減行動部分抵銷。總體而言，調整後的 SG&A 佔銷售額的 14.6%，比前一年增加了 60 個基點，我將在稍後的電話會議中向您提供有關 SG&A 的更多詳細資訊。

Now moving to Slide 8 to review our full year results. Sales in 2023 were up 5% over the prior year, representing a full year record. Organic sales were up 3%, largely due to the benefits of carryover pricing. We are disappointed by the weaker-than-expected results in the fourth quarter.

現在轉到幻燈片 8 來回顧我們的全年業績。 2023 年銷售額比前一年成長 5%，創全年最高紀錄。有機銷售額成長了 3%，這主要歸功於結轉定價的好處。我們對第四季的業績低於預期感到失望。

It's important to note that the growth we delivered in 2023 is a direct reflection of the power of our significantly diversified end market exposure from the Anixter acquisition. We delivered record sales in CSS from strong data center demand and share gains in security. Sales in UBS, also a record, were driven by strong growth in utility and integrated supply partially offset by weaker broadband demand throughout the year. EES organic sales were up 1% on a like-for-like basis as strong growth in industrial was offset by weakness in OEM and construction.

值得注意的是，我們在 2023 年實現的成長直接反映了我們透過收購 Anixter 實現的終端市場多元化的影響力。由於資料中心的強勁需求和安全方面的收益，我們在 CSS 領域創造了創紀錄的銷售額。瑞銀集團的銷售額也創歷史新高，其推動因素是公用事業和綜合供應的強勁增長，部分被全年寬頻需求疲軟所抵消。 EES 有機銷售額年增 1%，因為工業領域的強勁成長被 OEM 和建築領域的疲軟所抵消。

Adjusted EBITDA was relatively flat with 2022. Gross margin was down 20 basis points due to the impact of lower supplier volume rebates as a percentage of sales as anticipated. EBITDA margin further contracted due to higher SG&A, and we did not get the operating leverage we expected as sales moderated.

調整後的 EBITDA 與 2022 年相對持平。由於供應商數量回扣佔銷售額的百分比下降（如預期）的影響，毛利率下降了 20 個基點。由於 SG&A 較高，EBITDA 利潤率進一步收縮，而且隨著銷售放緩，我們沒有獲得預期的營運槓桿。

Consistent with our commitment to return a greater proportion of capital to WESCO shareholders, we returned more than $150 million to common shareholders between share repurchases and dividends.

根據我們向 WESCO 股東返還更多資本的承諾，我們在股票回購和股息期間向普通股股東返還了超過 1.5 億美元。

Turning to Page 9. On this slide, you can see the relatively balanced contribution to our sales growth in 2023 from the market, including price, the benefit of share gains in our cross-sell program as the acquisition of Rahi -- as well as the acquisition of Rahi in late 2022. Each of these growth drivers contributed 1.5% to 2% of growth for the full year, a portion of which was offset by having one fewer workday and a net foreign currency headwind. On the right side of this page, you can see the relatively flat year-over-year EBITDA as the benefit of the 5% sales growth was offset by higher SG&A.

翻到第 9 頁。在這張投影片上，您可以看到市場對我們 2023 年銷售成長的相對均衡的貢獻，包括價格、收購 Rahi 後我們交叉銷售計劃中的份額收益收益，以及2022 年底收購Rahi 。這些成長動力均貢獻了全年1.5% 至2% 的成長，其中一部分被工作日減少和淨外匯逆風所抵消。在本頁右側，您可以看到與去年同期相比 EBITDA 相對持平，因為 5% 的銷售成長帶來的好處被較高的 SG&A 所抵消。

Moving to Slide 10. We have shown the quarterly cadence of SG&A by quarter. You can see that the step-up in second quarter SG&A was mostly driven by our annual merit increase. In 2023, the merit increase was up mid-single digits versus a normal year in the low single digits. However, at the same time, we reduced our top line forecast for the full year and took $25 million of annualized cost actions in June and then an additional $20 million of actions in the third quarter. These structural cost reductions, along with lower discretionary spending were the primary drivers of the sequential decrease of $32 million in the third quarter.

轉到投影片 10。我們按季度展示了 SG&A 的季度節奏。您可以看到，第二季 SG&A 的成長主要是由我們的年度績效成長所推動的。 2023 年，績效增幅為中個位數，而正常年份為低個位數。然而，與此同時，我們降低了全年營收預測，並在 6 月採取了 2,500 萬美元的年度成本行動，然後在第三季採取了 2,000 萬美元的行動。這些結構性成本削減以及可自由支配支出的減少是第三季環比減少 3,200 萬美元的主要驅動因素。

In the fourth quarter, adjusted SG&A increased $23 million sequentially. Approximately 1/3 of this increase was due to higher-than-anticipated benefits in health care costs and the balance was due to higher cost to operate our facilities and IT-related expenses. Given the downshift in fourth quarter sales and the slow start to 2024, we are taking actions to address these higher costs.

第四季度，調整後的 SG&A 環比增加 2300 萬美元。其中約 1/3 的成長是由於醫療保健成本效益高於預期，其餘部分是由於我們的設施營運成本和 IT 相關費用增加。鑑於第四季度銷售額下降以及 2024 年開局緩慢，我們正在採取行動解決這些較高的成本問題。

Turning to Slide 11. Fourth quarter organic sales in our EES business were down approximately 4% year-over-year and down 2% on a like-for-like basis. Construction was down high single digits, reflecting continued weakness in wire and cable as well as weaker solar demand against a strong base period comparison. Industrial sales continued to be strong and were up mid-single digits over the prior year driven by automation and the oil and gas sectors. OEM sales were down mid-single digits.

轉向投影片 11。我們的 EES 業務第四季有機銷售額年減約 4%，年減 2%。建築業下降了高個位數，反映出電線和電纜的持續疲軟以及太陽能需求的疲軟與強勁的基期比較相比。在自動化和石油和天然氣行業的推動下，工業銷售持續強勁，比上年增長了中個位數。 OEM 銷售額下降了中個位數。

Backlog was down 2% sequentially and down 5% from the prior year, reflecting the continued reduction of supplier lead times. EES backlog remains at a historically high level as a percentage of sales.

積壓訂單季減 2%，較前一年下降 5%，反映出供應商交貨時間的持續縮短。 EES 積壓訂單佔銷售額的百分比仍處於歷史高點。

Adjusted EBITDA was down from the prior year with adjusted EBITDA margin down 120 basis points, which reflects gross margin headwinds from lower supplier volume rebates and higher operating expenses. For the full year, organic sales were down 1%, but up 1% on a like-for-like basis. Similar to the fourth quarter, which reflects weakness in construction OEM, partially offset by continued strength in industrial, which was up mid-single digits in 2023.

調整後 EBITDA 較上年下降，調整後 EBITDA 利潤率下降 120 個基點，反映了供應商數量回扣減少和營運費用增加帶來的毛利率不利因素。全年有機銷售額下降 1%，但年增 1%。與第四季度類似，反映了建築 OEM 的疲軟，部分被工業的持續強勁所抵消，工業在 2023 年增長了中位數。

Turning to Slide 12. Fourth quarter sales in our CSS business were up 2% on a reported basis and down 1% organically versus the prior year. Certain large projects with technology companies shifted out of the fourth quarter into 2024. Additionally, we experienced a slowdown in stock and flow sales to contractors. Enterprise network infrastructure, which comprises structured cabling, along with sales to Internet service providers, was up low single digits in the quarter as wireless growth was offset by declines with Canadian Internet service providers.

轉向投影片 12。我們 CSS 業務第四季的銷售額按報告計算成長了 2%，與前一年相比有機下降了 1%。科技公司的某些大型專案從第四季度轉移到了 2024 年。此外，我們對承包商的庫存和流量銷售也出現了放緩。企業網路基礎設施（包括結構化佈線）以及對互聯網服務提供商的銷售額在本季度實現低個位數增長，原因是無線增長被加拿大互聯網服務提供商的下滑所抵消。

Security sales were down low single digits versus 2022, which was up more than 20% as small and midsized contractors were negatively impacted by lower construction spending. We saw the overall security market contract over the past couple of quarters, but believe we are well positioned and gaining share.

與 2022 年相比，安全銷售額下降了低個位數，2022 年成長了 20% 以上，原因是中小型承包商受到建築支出下降的負面影響。我們看到過去幾季的整體安全市場萎縮，但相信我們處於有利位置並正在擴大份額。

Data center sales were up low double digits, driven by strength with hyperscale customers. CSS backlog has returned to normal levels due to significant reductions in supplier lead times and increased product availability. Backlog at the end of December was down 26% from the prior year and down 6% sequentially from the September level.

在超大規模客戶實力的推動下，資料中心銷售額實現低兩位數成長。由於供應商交貨時間的顯著縮短和產品可用性的提高，CSS 積壓已恢復到正常水平。 12 月底的積壓訂單較去年同期下降 26%，較 9 月較上季下降 6%。

For the full year, CSS sales were a record, up 12% on a reported basis and up 5% organically. We experienced solid growth in data center, including the benefit of the Rahi acquisition and share gains in security.

全年 CSS 銷售額創歷史新高，報告基礎成長 12%，有機成長 5%。我們在資料中心領域經歷了穩健的成長，包括收購 Rahi 的好處和安全性方面的份額收益。

Enterprise network infrastructure was also up versus the prior year, driven by strength in wireless applications. Profitability was also strong with record adjusted EBITDA and record adjusted EBITDA margin of 9.6%, up 20 basis points, driven by cost controls and operating leverage on higher sales.

在無線應用實力的推動下，企業網路基礎設施也比上年有所成長。獲利能力也很強勁，調整後的 EBITDA 創歷史新高，調整後的 EBITDA 利潤率創紀錄地達到 9.6%，增長了 20 個基點，這主要得益於成本控制和較高銷售的營運槓桿。

Turning to Slide 13. UBS sales were down 2% in the quarter. Sales in utility were up low single digits versus a strong 20%-plus comparison in the prior year. We continue to benefit from the secular trends of electrification, green energy and grid modernization in our project business. As expected, we did see a slowdown in our stock and flow sales with customers more tightly managing inventory.

轉向投影片 13。瑞銀集團本季銷售額下降 2%。公用事業銷售額僅出現低個位數成長，而前一年則強勁成長 20% 以上。我們的專案業務繼續受益於電氣化、綠色能源和電網現代化的長期趨勢。正如預期的那樣，隨著客戶更加嚴格地管理庫存，我們的庫存和流量銷售確實出現了放緩。

Integrated supply was up mid-single digits versus the prior year, consistent with the strength we experienced with other industrial customers within our portfolio. Broadband sales were down over 30%, which represented an unexpected incremental step-down in demand as customers continue to work through inventory and pause purchases until government funding is released.

與前一年相比，綜合供應量成長了中個位數，這與我們在投資組合中的其他工業客戶所經歷的實力一致。寬頻銷售額下降了 30% 以上，這表明需求出現了意外的逐步下降，因為客戶繼續清理庫存並暫停購買，直到政府資金釋放。

Backlog was down 5% from the prior year and up 4% on a sequential basis. Backlog remains at a historically high level as a percentage of sales.

積壓訂單較前一年減少 5%，較上年增加 4%。積壓訂單佔銷售額的百分比仍處於歷史高點。

Adjusted EBITDA was down approximately 100 basis points versus the prior year, driven by lower supplier volume rebates, a mix impact and higher SG&A as a percentage of sales. For the full year, sales were a record and up 8% organically, reflecting double-digit growth in utility, cross-sell revenue and scope expansion, including with our integrated supply customers, partially offset by weakness in broadband. UBS posted record adjusted EBITDA and record adjusted EBITDA margin despite the significant sales decline in broadband.

調整後的 EBITDA 較上年下降約 100 個基點，原因是供應商數量回扣減少、綜合影響以及 SG&A 佔銷售額的百分比上升。全年銷售額創歷史新高，有機成長 8%，反映出公用事業、交叉銷售收入和範圍擴張（包括我們的綜合供應客戶）的兩位數成長，但部分被寬頻疲軟所抵消。儘管寬頻銷售額大幅下降，瑞銀集團仍公佈了創紀錄的調整後 EBITDA 和創紀錄的調整後 EBITDA 利潤率。

Turning to Page 14. Free cash flow generation in 2023 totaled $444 million, which was below the $500 million to $700 million range that we provided in November. Relative to the assumptions in our outlook, the primary drivers were lower net income due to the decline in fourth quarter sales and a lower payables balance. On the payables front, we quickly aligned our purchases of inventory to the lower sales environment, which drove our payables balance down versus the third quarter.

翻到第 14 頁。2023 年自由現金流產生總額為 4.44 億美元，低於我們 11 月提供的 5 億至 7 億美元範圍。相對於我們展望中的假設，主要驅動因素是由於第四季度銷售額下降和應付帳款餘額下降而導致的淨利潤下降。在應付帳款方面，我們迅速根據較低的銷售環境調整了庫存採購，這導致我們的應付帳款餘額較第三季下降。

Purchases were stable in the second and third quarter. As stock and flow sales were below our expectations in the fourth quarter, purchases were lower, resulting in a lower payables balance. The decrease in accounts payable in the fourth quarter represented a use of cash of $233 million and the use of $320 million for the full year. Days payable decreased by approximately 1 day compared to the end of 2022.

第二季和第三季的採購量穩定。由於第四季庫存和流量銷售低於我們的預期，採購量減少，導致應付帳款餘額減少。第四季應付帳款減少顯示現金使用量為 2.33 億美元，全年使用量為 3.2 億美元。應付帳款天數較2022年底減少約1天。

Moving to Slide 15. As John mentioned at the top of the call, we are revising our target leverage range to 1.5 to 2.5x net debt to EBITDA. This is an important milestone for the company as we have operated with the same 2 to 3.5 turns of leverage since our IPO in 1999. We will work to reduce leverage to our new range over time.

轉到幻燈片 15。正如約翰在電話會議頂部提到的那樣，我們正在將目標槓桿範圍修改為 EBITDA 淨債務的 1.5 至 2.5 倍。這對公司來說是一個重要的里程碑，因為自 1999 年 IPO 以來，我們一直以 2 至 3.5 倍的槓桿率進行營運。隨著時間的推移，我們將努力將槓桿率降低到新的範圍。

Additionally, we will maintain the flexibility to go above the target range to fund acquisitions similar to what we did with EECOL in 2012 and Anixter in 2020. Our strong free cash flow generation allows us to quickly move back within the target range.

此外，我們將保持靈活性，以高於目標範圍來為收購提供資金，就像我們在2012 年對EECOL 和2020 年對Anixter 所做的那樣。我們強大的自由現金流產生使我們能夠快速回到目標範圍內。

We remain focused on a balanced capital allocation strategy, and plan to opportunistically utilize our cash for debt reduction and share repurchases going forward. We will also return capital to shareholders via the dividend initiated during 2023. As John mentioned, we intend to raise the common stock dividend in the first quarter of 2024.

我們仍然專注於平衡的資本配置策略，並計劃機會性地利用我們的現金來減少債務和回購股票。我們也將透過 2023 年期間發起的股利向股東返還資本。正如約翰所提到的，我們打算在 2024 年第一季提高普通股股利。

On share repurchases, we will continue to be opportunistic based on market conditions. We are committed to executing against our $1 billion share repurchase authorization. However, we will continue to be balanced between share buybacks and debt reduction, considering the significant rise in interest rates over the past year.

在股票回購方面，我們將繼續根據市場情況進行機會主義。我們致力於執行 10 億美元的股票回購授權。不過，考慮到過去一年利率的大幅上升，我們將繼續在股票回購和削減債務之間保持平衡。

Now moving to Page 16 for the key sales drivers of our strategic business units. We provided the details on the quarterly calls and want to summarize how we performed during the full year 2023, along with our expectations for 2024. I'll start with EES as this is our largest segment.

現在轉到第 16 頁，了解我們策略事業部門的關鍵銷售驅動因素。我們提供了季度電話會議的詳細信息，並希望總結 2023 年全年的表現以及我們對 2024 年的預期。我將從 EES 開始，因為這是我們最大的細分市場。

As you can see, we faced headwinds in both construction and OEM in 2023, that more than offset significant growth in industrial. As we move into 2024, we expect EES reported sales growth to be flat to up low single digits as construction end markets remain pressured in total despite an increase in large project activity. Industrial is expected to again benefit from continued growth from customers in many of the end market verticals we support. OEM is expected to be roughly flat.

正如您所看到的，2023 年我們在建築業和 OEM 領域都面臨阻力，這遠遠抵消了工業領域的顯著成長。進入 2024 年，我們預計 EES 報告的銷售成長將持平至低個位數，因為儘管大型專案活動有所增加，但建築終端市場總體上仍面臨壓力。工業預計將再次受益於我們支持的許多終端市場垂直領域客戶的持續成長。 OEM 預計大致持平。

Looking at our CSS segment. We generated strong double-digit growth in WESCO data center solutions in 2023, along with significant share gains in security that allowed us to outgrow the market. However, enterprise network infrastructure, which is focused on service providers and data communication applications, including structured cabling products, experienced softness due to the slowing of 5G build-outs and construction-specific markets.

看看我們的 CSS 部分。 2023 年，我們的 WESCO 資料中心解決方案實現了兩位數的強勁成長，同時安全領域的份額也大幅成長，使我們能夠超越市場。然而，由於 5G 建設和特定建築市場放緩，專注於服務提供者和數據通訊應用（包括結構化佈線產品）的企業網路基礎設施出現疲軟。

Enterprise network infrastructure is the largest business for CSS and makes up approximately 40% of segment revenue. In 2024, we again expect strong double-digit growth in data center and share gains in security but some of the weakness that we saw in enterprise network infrastructure is expected to remain. That said, we expect a strong volume growth year for CSS with sales up low to mid-single digits.

企業網路基礎設施是 CSS 最大的業務，約佔該部門收入的 40%。到 2024 年，我們再次預計資料中心將實現兩位數的強勁成長，並在安全方面分享收益，但我們在企業網路基礎設施中看到的一些弱點預計仍將存在。也就是說，我們預期 CSS 今年銷量將強勁成長，銷售額將成長到低至中個位數。

Lastly, looking at UBS, we generated double-digit growth in utility and mid-single-digit growth in integrated supply during 2023. This growth was partially offset by an approximately 20% decline in broadband due to customer destocking and delays of purchases until government dollars are spent. We expect growth in utility and integrated supply in 2024, but at a more moderate pace as we lap strong comparisons, significant 2023 price increases and as utility customers more tightly manage inventory and projects.

最後，看看瑞銀，我們在2023 年實現了公用事業的兩位數增長和綜合供應的中個位數增長。這種增長被寬頻下降約20% 所部分抵消，原因是客戶去庫存和政府推遲採購美元被花費了。我們預計 2024 年公用事業和綜合供應將出現成長，但由於我們進行了強有力的比較、2023 年價格大幅上漲以及公用事業客戶更嚴格地管理庫存和項目，成長速度將更加溫和。

In addition, based on customer and supplier input, we don't expect to see a recovery in broadband until late 2024 before turning to growth in 2025. Despite these factors, we expect strong volume growth for UBS in 2024 with sales up mid-single digits.

此外，根據客戶和供應商的意見，我們預計寬頻要到2024 年末才會復甦，然後在2025 年才會轉向成長。儘管存在這些因素，我們預計瑞銀集團2024 年銷量將強勁增長，銷售額將成長至中單數字。

Moving to Slide 17. I'll summarize our outlook for 2024. Based on our view of growth rates for each of the businesses, we expect total revenue to be up 1% to 4% with organic sales flat to up 3%. At the midpoint of the range, price is expected to contribute about 1% to the top line with volumes relatively flat. From a quarterly perspective, we expect to see normal sequential patterns as we move throughout 2024. However, given the tough comparison in the first quarter, normal sequential trends would translate to a low to mid-single-digit decline in revenue year-over-year with growth rates improving in subsequent quarters.

轉向投影片 17。我將總結我們對 2024 年的展望。根據我們對每項業務成長率的看法，我們預計總收入將成長 1% 至 4%，有機銷售額持平至成長 3%。在該區間的中點，價格預計將為營收貢獻 1% 左右，而成交量則相對持平。從季度角度來看，我們預計 2024 年將出現正常的連續模式。然而，考慮到第一季度的艱難比較，正常的連續趨勢將轉化為收入同比低至中個位數的下降。今年的成長率在隨後的幾個季度有所改善。

At the midpoint of our revenue outlook, sales would be up 2.5% including approximately 1 point of carryover pricing from 2023. On adjusted EBITDA margin, while we do not provide an outlook for gross margin, we expect to see improvement in 2024. Our transactional margins were stable in 2023. We expect improved mix and flat supplier volume rebates as a percentage of sales, along with the benefits of our margin improvement program to drive higher results in 2024.

在我們營收前景的中點，銷售額將成長2.5%，包括從2023 年起約1 個百分點的結轉定價。關於調整後的EBITDA 利潤率，雖然我們沒有提供毛利率前景，但我們預計2024 年會有所改善。我們的交易2023 年利潤率保持穩定。我們預計，產品組合的改善、供應商數量回扣佔銷售額的比例持平，以及我們的利潤率改善計劃的好處，將在2024 年推動更高的業績。

On SG&A, there are headwinds related to our annual merit increase, along with the return to target payouts for incentive compensation. These items combined represent an approximately $100 million cost headwind in 2024 and are expected only -- to be only partially offset by the cost actions we took in the second and third quarters of 2023. We plan to take additional actions to protect our margins and we'll be more specific regarding the cost actions when we report first quarter earnings.

在SG&A方面，我們的年度績效成長以及激勵薪酬目標支出的回歸存在一些阻力。這些項目合計代表 2024 年約 1 億美元的成本逆風，預計僅能被我們在 2023 年第二季和第三季採取的成本行動部分抵銷。我們計劃採取額外行動來保護我們的利潤，而我們當當我們報告第一季收益時，我們將更具體地介紹成本行動。

Bringing this all together from a P&L perspective, we expect adjusted EBITDA margin to be in a range of 7.5% to 7.9% with approximately $1.75 billion of EBITDA at the midpoint. Based on our range of sales growth and margin improvement combined with the underlying assumptions that you can find on the slide, we expect adjusted earnings per share of $13.75 to $15.75 and free cash flow of between $600 million and $800 million. This free cash flow outlook of $700 million at the midpoint would represent the highest free cash flow in our history. As I discussed a moment ago, we are focused on reducing our working capital days and expect to see an improvement in 2024.

從損益表的角度綜合考慮，我們預計調整後的 EBITDA 利潤率將在 7.5% 至 7.9% 之間，其中值約為 17.5 億美元的 EBITDA。根據我們的銷售成長和利潤率改善幅度以及幻燈片上的基本假設，我們預計調整後每股收益為 13.75 美元至 15.75 美元，自由現金流為 6 億美元至 8 億美元。自由現金流前景中點為 7 億美元，這將代表我們歷史上最高的自由現金流。正如我剛才討論的那樣，我們的重點是減少營運資金天數，並預計 2024 年會有所改善。

Now moving to Page 18. Despite the multi-speed economy in 2023 and 2024, our long-term secular trends are intact. This slide shows the uniquely strong position of our company to drive growth and profitability in the years ahead. The end-to-end solutions that we provide to our global customer base are directly aligned with the 6 secular growth trends shown on the left side of this page.

現在翻到第 18 頁。儘管 2023 年和 2024 年經濟多速發展，但我們的長期長期趨勢完好無損。這張投影片顯示了我們公司在未來幾年推動成長和獲利方面的獨特優勢。我們向全球客戶群提供的端到端解決方案與本頁左側顯示的 6 個長期成長趨勢直接相關。

Our participation in these trends, coupled with increasing public sector investments in infrastructure, broadband and partnerships with the private sector, position WESCO exceptionally well. Our long-term financial framework is for WESCO to grow 2% to 4% above the market due to the combined benefit of secular growth trends and increasing share.

我們對這些趨勢的參與，加上公共部門對基礎設施、寬頻的投資以及與私營部門的夥伴關係的增加，使 WESCO 處於非常有利的地位。我們的長期財務框架是，由於長期成長趨勢和不斷增加的份額的綜合效益，WESCO 的成長速度高於市場 2% 至 4%。

With that, operator, we can now open the call for questions.

接線員，現在我們可以開始提問了。

(Operator Instructions)

（操作員說明）

Our first question comes from Deane Dray with RBC Capital Markets.

我們的第一個問題來自加拿大皇家銀行資本市場部的迪恩德雷 (Deane Dray)。

Maybe we can start with parsing through what changed in terms of customer behavior. What can you tell us about the stock and flow business? How it changed during -- sounded like the latter point in the quarter, so specifically, the idea that customers are waiting for government funding and then what were the OE businesses that were soft? And where specifically was -- did you see construction weakness?

也許我們可以從分析客戶行為的改變開始。關於存量和流量業務，您能告訴我們什麼嗎？聽起來像是本季的後一點，具體來說，就是客戶正在等待政府資金的想法，那麼疲軟的原廠業務是什麼？具體在哪裡—您是否看到了建築的弱點？

Yes. Deane, at the highest level, EES had strong industrial, as Dave mentioned, construction was down a bit. OEM was down a bit. But it didn't -- it wasn't far off our expectations. Now if you look at the underlying mix of EES, stock and flow is a little weaker than we anticipated.

是的。 Deane，在最高層面上，EES 擁有強大的工業，正如 Dave 所提到的，建築業略有下降。 OEM 略有下降。但事實並非如此——這與我們的預期相去不遠。現在，如果你看看 EES 的基本組合，存量和流量比我們預期的要弱一些。

We did have projects -- project shipments, the DS shipments kind of tick up. That wasn't the big delta versus our overall expectations. The big delta was a shift in both CSS and UBS. So let me take you through each of them.

我們確實有項目——項目出貨量，DS 出貨量有所增加。與我們的整體預期相比，這並不是一個大的增量。最大的改變是 CSS 和 UBS 的轉變。那麼讓我帶您逐一了解。

CSS saw a slowdown in their stock and flow, really to various contractors and some select project pushouts, specifically with a few customers that -- these are fairly sizable projects. We had expected CSS to really step up sequentially. So this was really versus expectations.

CSS 的庫存和流量都出現了放緩，尤其是對各種承包商和一些選定的項目推出而言，特別是對一些客戶來說，這些都是相當大的項目。我們原本期望 CSS 能真正逐步進步。所以這確實與預期相反。

UBS as well had 2 major drivers. Integrated Supply, which is part of that business, industrial-oriented integrated supply business called WIS grew very nicely, mid-single digit growth, very strong, actually, and very strong momentum.

瑞銀也有兩個主要驅動因素。整合供應是該業務的一部分，名為 WIS 的工業導向整合供應業務成長非常好，實現中個位數成長，非常強勁，實際上，勢頭非常強勁。

Broadband was significantly weaker than we thought. It had been down all year in the 20% range. It was down over 30% in Q4. So we had thought we kind of hit the bottom on broadband, but it kind of lagged down a little bit further. We did have a very challenging comparable in Q4 '22, but nevertheless, broadband was worse than expected.

寬頻比我們想像的要弱得多。全年下降幅度在 20% 左右。第四季下降了 30% 以上。因此，我們原以為寬頻已經觸底，但實際情況卻更落後。我們確實在 22 年第 4 季遇到了非常具有挑戰性的情況，但儘管如此，寬頻還是比預期的要差。

And then finally, utility, Deane, I'd say, utility was a case where customers clearly did some inventory management as we move through, let's say, the latter part of November through December and they were adjusting their purchases that really impacted stock and flow. So they had kind of -- they were kind of riding the inventory levels they had and kind of just push stuff out. You call it year-end inventory management.

最後，公用事業公司，迪恩，我想說，公用事業公司的情況是，客戶顯然做了一些庫存管理，例如從 11 月下旬到 12 月，他們正在調整採購，這確實影響了庫存和庫存。流動。所以他們有點——他們在利用現有的庫存水平，然後把東西推出去。您稱之為年終庫存管理。

I think I hit all your questions. Dave, do you want to add anything?

我想我回答了你所有的問題。戴夫，你想補充什麼嗎？

Yes. I just want to mention on OEM. You had a specific question there. We had talked about manufactured structures being one of our issues throughout 2023. We think we've hit bottom there. There were some sales to customers that we were expecting in other sectors of our OEM business that we were expecting to ship out in the fourth quarter that we're not shipping out. So we do think that there was a market downshift with some of our OEM customers.

是的。我只想提一下OEM。你有一個具體的問題。我們曾討論過製造結構是我們整個 2023 年的問題之一。我們認為我們已經觸底了。我們預計 OEM 業務其他部門的一些客戶銷售預計會在第四季度發貨，但我們沒有發貨。因此，我們確實認為我們的一些 OEM 客戶的市場出現了下滑。

That was all helpful. And then just as a follow-up for '24. Can you talk about the impacts of normalization? So we're seeing pricing normalize. It sounds like you're only getting a 1% benefit from carryover. You're seeing normalizing in order patterns from customers and how they manage their inventory and you're seeing more normalizing in your backlog. Just kind of take us through those themes and then specifically regarding price and order patterns.

這很有幫助。然後作為 24 的後續行動。能談談正常化的影響嗎？所以我們看到定價正常化。聽起來您只能從結轉中獲得 1% 的收益。您將看到客戶的訂單模式以及他們管理庫存的方式正在標準化，您的積壓訂單也將更加標準化。只要帶我們來了解這些主題，然後具體介紹一下價格和訂單模式。

Yes. Let me start with the pricing impact. As we've reported throughout 2023, the benefit of price was still a positive, but it was -- the growth rate was much lower quarter-over-quarter. We did 2 points of benefit on price in the fourth quarter. Most of the supplier price increases that we've been seeing are more typical of what we saw pre-COVID.

是的。讓我從定價影響開始。正如我們在 2023 年全年所報告的那樣，價格帶來的好處仍然是正面的，但成長率環比要低得多。第四季我們在價格上取得了 2 個百分點的收益。我們所看到的大多數供應商價格上漲都比較典型。

So we're looking at the 1 to 2 points of announced price increases from many of our supplier partners. So we do expect to get some carryover. We've included about 1 point of pricing benefit from that carryover in our 2024 outlook. So we are seeing that normalization of price.

因此，我們正在關注許多供應商合作夥伴宣布的 1 到 2 個點的漲價。所以我們確實希望得到一些結轉。我們在 2024 年展望中納入了約 1 個百分點的結轉定價收益。所以我們看到價格正常化。

Of course, we'll always have the commodity impact on the pure commodity products. That's always hard for us to predict. But generally, the pricing environment has stabilized to pre-COVID expectations.

當然，我們始終會對純商品產品產生商品影響。這對我們來說總是很難預測。但整體而言，定價環境已穩定至新冠疫情前的預期。

In terms of the order patterns, we're still seeing quite a bit of bidding activity within the businesses that we serve. So many of our customers are still out there with these major projects that we are still seeing good bidding activity. We do expect, as we go through 2024, that we'll continue to see the return to typical order patterns. And that's playing through for us and things like how much order do we have on inventory to support these projects based on these product availability and lead times coming down from our suppliers.

就訂單模式而言，我們仍然看到我們所服務的企業內有相當多的投標活動。我們的許多客戶仍在參與這些重大項目，因此我們仍然看到良好的投標活動。我們確實預計，到 2024 年，我們將繼續看到典型訂單模式的回歸。這對我們來說很重要，例如我們有多少庫存訂單來支援這些項目，這些訂單是基於我們供應商提供的產品可用性和交貨時間。

Deane, I think your question is a good one in that we've had then -- I think we'll look back to this period of time going into the pandemic, through the pandemic, coming out of the pandemic and we clearly had some dramatic effects across the entire value chain in the global supply chain as we entered, went through and came out the other side.

迪恩，我認為你的問題是一個很好的問題，因為我們當時已經有過這樣的問題——我想我們會回顧一下進入大流行、經歷大流行、走出大流行的這段時間，我們顯然有一些當我們進入、經歷並走出另一邊時，對全球供應鏈的整個價值鏈產生了巨大的影響。

By and large, what we're seeing now is kind of a back to more normalized level across almost all dimensions of the business. Pricing, as Dave said, lease supplier lead times continue to be -- are back at pre-COVID levels except for a few select categories like engineered products, switchgear and transformers. So most of that supply chain disruption, there is a front end, through it, on the back end has kind of worked its way through, I think, as we closed out 2023.

總的來說，我們現在看到的是幾乎所有業務領域都回到了更正常化的水平。正如戴夫所說，除了工程產品、開關設備和變壓器等少數特定類別外，租賃供應商的交貨時間仍然回到了疫情前的水平。因此，我認為，隨著 2023 年的結束，大多數供應鏈中斷（有一個前端，透過它，在後端）已經解決了。

The next question comes from Nigel Coe with Wolfe Research.

下一個問題來自 Wolfe Research 的 Nigel Coe。

Nigel, your line may be muted on your end.

奈傑爾，您的線可能已靜音。

Yes. It was muted. So John, you mentioned the disappointments in the way the quarter played out. But really good companies make their own luck. And the SG&A and the free cash flow was obviously very disappointing in that regard. So I'm just wondering when you take a step back and think about kind of what transpired, is there an organizational issue here that needs to be solved? Is information flow around the organization? And maybe just talk about what changes in '24 to give us confidence that the team can deliver on commitments.

是的。聲音被靜音了。約翰，您提到了本季的表現令人失望。但真正好的公司是自己創造運氣的。在這方面，SG&A 和自由現金流顯然非常令人失望。所以我只是想知道當你退一步思考所發生的事情時，這裡是否有需要解決的組織問題？資訊在組織中流動嗎？也許只是談談 24 年的變化，讓我們對團隊兌現承諾充滿信心。

Nigel, thanks for the question. I started my opening comments today by saying these results are unacceptable. They're unacceptable to me and the entire management team.

奈傑爾，謝謝你的提問。我今天一開始就說這些結果是不可接受的。他們對我和整個管理團隊來說是不可接受的。

I think we've clearly built a new company, and we established a very strong track record of delivering exceptional results and creating value. If you think about 2023 in summary, we had a little bit of a kind of softening in EES in Q2, we took some cost actions. And then as we go through Q4, things move pretty quickly. And look, as we enter this year, we still have our sales rates not bouncing back yet. So we have declining sales, as Dave mentioned, in January. So kind of that, it extends the Q4 trend on the top line. Although backlog has ticked up sequentially. So that's an encouraging point.

我認為我們顯然已經建立了一家新公司，並且我們在提供卓越成果和創造價值方面建立了非常良好的記錄。如果您總結 2023 年，我們在第二季的 EES 略有軟化，我們採取了一些成本行動。然後，當我們進入第四季度時，事情進展得很快。看看，進入今年，我們的銷售率仍然沒有反彈。因此，正如戴夫所提到的，一月份我們的銷售額下降了。就這樣，它延續了第四季的營收趨勢。儘管積壓訂單已連續增加。所以這是一個令人鼓舞的觀點。

We've got the best team we've had, Nigel. We've got very clear initiatives that have delivered value. As we've done over the last several years since we brought Anixter and WESCO together, we've refined our margin improvement program as we've entered -- we did that -- we launched it initially several years ago, and we refine it every year. So we refine that again, adding new tools and capabilities to that program, and that's effective in January of 2024 and we continue to see tremendous cross-sell opportunities.

我們擁有有史以來最好的團隊，奈傑爾。我們有非常明確的舉措並帶來了價值。正如我們在過去幾年中將Anixter 和WESCO 合併以來所做的那樣，我們已經完善了我們的利潤改善計劃，因為我們已經進入- 我們做到了- 我們最初在幾年前推出了它，並且我們對其進行了完善每年。因此，我們再次對其進行改進，為該計劃添加新的工具和功能，該計劃將於 2024 年 1 月生效，我們將繼續看到巨大的交叉銷售機會。

I think we've built a very good process, a rigorous process and have a real strong recipe around delivering the cross-sell results. So highly confident that we'll get the momentum back here quickly.

我認為我們已經建立了一個非常好的流程，一個嚴格的流程，並且在提供交叉銷售結果方面擁有真正強大的秘訣。我們非常有信心我們會很快恢復勢頭。

As we kind of look at guide for the year, I think we are very thoughtful and measured in terms of how we set up the guide. We do expect more of a normal seasonality as we walk quarter-to-quarter across this year sequentially. And if you factor that in, that takes us well above the midpoint of the guidance range that we put out there.

當我們查看今年的指南時，我認為我們在如何設定指南方面非常周到和衡量。隨著我們今年按季逐季進行，我們確實預計會出現更多正常的季節性。如果你考慮到這一點，這將使我們遠高於我們提出的指導範圍的中點。

So I look at '24 as being a year that most of the external market factors seem to normalize and now we're down execution. And again, I feel very confident in the team we have in place, the initiatives that we have in place, building off the momentum and the results we've delivered since we brought these 2 companies together back in middle of 2020.

因此，我認為 24 年大多數外部市場因素似乎都趨於正常化，而現在我們正在降低執行力。再說一遍，我對我們現有的團隊、我們採取的舉措、自 2020 年中期將這兩家公司合併以來的勢頭和所取得的成果非常有信心。

Dave, I don't know if you can add anything? Maybe Dave talked to cash flow because I think -- just speak to the cash flow.

戴夫，我不知道你能補充什麼嗎？也許戴夫談論現金流是因為我認為——只談論現金流。

Yes. Again, I think that -- very disappointed with the cash flow performance. Obviously, there are 2 big factors, the biggest one being the accounts payable. And one of the things that we experienced throughout 2023 is our purchases stayed relatively stable, particularly in Q2 and in Q3, and we generated a significant amount of cash from our payables balance. The driver of reduction in the accounts payable balance was really driven by the timing of purchases.

是的。我再次認為——對現金流表現非常失望。顯然，有兩大因素，其中最大的因素是應付帳款。我們在 2023 年經歷的一件事是我們的採購保持相對穩定，特別是在第二季度和第三季度，並且我們從應付帳款餘額中產生了大量現金。應付帳款餘額減少的驅動因素實際上是由採購時間推動的。

And as our stock and flow business began to underperform our expectations, we were not replenishing that inventory, therefore, not creating new payables. So as we're paying our vendors, we're not getting new payables onto the balance sheet. Clearly, was unexpected, but really driven by that stock and flow business decline and not replenishing those purchases.

隨著我們的庫存和流量業務開始低於我們的預期，我們沒有補充庫存，因此也沒有創造新的應付帳款。因此，當我們向供應商付款時，我們不會在資產負債表上增加新的應付帳款。顯然，這是出乎意料的，但實際上是由庫存和流量業務下降以及不補充這些採購造成的。

I appreciate the detail there. And then my follow-on is a modeling question. If I take the $1.75 billion EBITDA guide and roll out through to in my model, I'm getting to the high end of the earnings range based on the below line guidance items. Is there anything I'm missing there or is my math is just bad? But is there some contingency within the EPS range based on EBITDA guidance?

我很欣賞那裡的細節。然後我的後續問題是建模問題。如果我採用 17.5 億美元的 EBITDA 指南並將其推廣到我的模型中，那麼我將根據以下指導項目達到收益範圍的高端。是我遺漏了什麼還是我的數學太差了？但根據 EBITDA 指引，每股盈餘範圍內是否存在一些意外情況？

One of the things that I would highlight is we've called out that other expense, which impacts our EPS. And this year, we had the high end of the range. We provided you with a range of $10 million to $25 million. We did $25 million here in 2023. That is the combination of our pension and the impact of our pensions on the P&L and then also the impact of foreign exchange rates on our balance sheet. But again, there's nothing else, I think, outside of what we provided you, those underlying assumptions should roll through to get to relatively close to where we are from the midpoint of our range.

我要強調的一件事是我們已經提列了其他費用，這會影響我們的每股盈餘。今年，我們推出了該系列的高端產品。我們為您提供了 1000 萬至 2500 萬美元的資金。 2023 年，我們在這裡做了 2500 萬美元。這是我們的退休金、退休金對損益表的影響以及外匯匯率對我們資產負債表的影響的總和。但同樣，我認為，除了我們為您提供的內容之外，沒有什麼其他的了，這些基本假設應該經過驗證，以相對接近我們範圍中點的位置。

Our next question comes from Sam Darkatsh with Raymond James.

我們的下一個問題來自 Sam Darkatsh 和 Raymond James。

John, you're on the U.S. steel board. You've had a fun last couple, 2, 3 months, it sounds like. So first question, I guess, with respect to inventory days, I think WESCO is like, I don't know, 10, 12 days higher versus pre-pandemic when adjusting for Anixter. And in isolation, this is obviously understandable based on the extended lead times. But when I look at your competitors, whether it's Graybar or Rexel, it looks like they're back at pre-pandemic days of inventory. And I'm trying to understand the difference.

約翰，你是美國鋼鐵公司的成員。聽起來，過去兩三個月你過得很開心。所以第一個問題，我想，關於庫存天數，我認為 WESCO 在根據 Anixter 進行調整時，比大流行前高出 10 天、12 天，我不知道。單獨來看，由於交貨時間延長，這顯然是可以理解的。但當我看看你的競爭對手時，無論是 Graybar 還是 Rexel，他們的庫存似乎又回到了疫情前的水平。我正在嘗試理解其中的區別。

Is it different mix with direct ship? Is it utility? Is it a Schneider versus Eaton thing? Is this something WESCO-specific? How do you -- help us reconcile while the inventories are still elevated here, but not at your peers.

與直達船的組合有什麼不同嗎？實用嗎？這是施耐德與伊頓的問題嗎？這是 WESCO 特有的東西嗎？當這裡的庫存仍然很高，但你們同行的庫存卻很高時，你們如何幫助我們協調一致。

Yes, Sam. Again, I want to provide a little bit of perspective relative to the peer group that you outlined there. We do believe that we have a much higher percentage of our business is project related. And many of those projects include engineered components that have much longer lead times as we went through the recovery of COVID in '22 and into '23. We clearly saw the increase in our inventory days, primarily driven by that project and that project backlog, getting what we could get when we could get it and then waiting for those customized engineered components. This is something that we are very clearly focused on. We did not make the progress that we were expecting to make here in the back half of 2023. It's something that we have included in our outlook for free cash flow going forward is that we will reduce our inventory days in 2024.

是的，山姆。再次，我想針對您在那裡概述的同行群體提供一些觀點。我們確實相信我們的業務中與專案相關的比例要高得多。其中許多項目包括工程組件，隨著我們在 22 年和 23 年經歷了新冠病毒的恢復，這些組件的交付時間要長得多。我們清楚地看到庫存天數的增加，主要是由該項目和該項目積壓推動的，在我們能得到的時候得到我們能得到的東西，然後等待那些定制的工程組件。這是我們非常明確地關注的事情。我們沒有取得我們預期在 2023 年下半年取得的進展。我們在未來自由現金流展望中包含的內容是，我們將在 2024 年減少庫存天數。

But clearly, some of it is relative to the competitive group, some of it is the business mix, and some of it is the types of projects that we service around the globe that, in some cases, include longer lead times and then longer time for us to service the customer.

但顯然，其中一些與競爭群體有關，一些與業務組合有關，還有一些與我們在全球範圍內服務的項目類型有關，在某些情況下，包括更長的交貨時間，然後更長的時間以便我們為客戶服務。

My second question, the thinking behind lowering the target debt range, John, I know your company is historically comfortable with leverage. You have, I would say, at least an inarguably undervalued equity in a year, you're going to call the preferreds. You've got countercyclical cash flows. I think you mentioned in your prepared remarks that you're real pleased to do this. Why is this the optimal capital structure versus the prior 2 to 3.5 turns?

我的第二個問題，降低目標債務範圍背後的想法，約翰，我知道貴公司歷來對槓桿感到滿意。我想說，你至少在一年內擁有無可爭議的被低估的股票，你將稱之為優先股。你有反週期現金流。我想你在準備好的發言中提到你很高興這樣做。與之前的 2 至 3.5 次轉變相比，為什麼這是最佳資本結構？

Two things, Sam. One is the confidence in the upsized cash generation characteristics of the combined company. We've got a guide that will give us record free cash flow this year.

有兩件事，山姆。一是對合併後公司擴大現金產生能力的信心。我們有一份指南，今年將為我們帶來創紀錄的自由現金流。

So I mean, we're -- I remain more confident than ever about the underlying characteristics of our business model and the ability to generate cash. What we outlined at our Investor Day, we're confident and strongly committed to, that's the underlying cash flow characteristics of the business. What we outlined there as well as outperforming the market over the top line consistently over time and then delivering the EBITDA margin expansion. So that's the first driver. We delevered very quickly, much faster than we had committed externally, and we're very confident in the underlying cash flow characteristics.

所以我的意思是，我對我們商業模式的基本特徵和產生現金的能力比以往任何時候都更有信心。我們在投資者日概述的內容，我們充滿信心並堅定地致力於，這就是該業務的基本現金流特徵。我們在那裡概述的內容以及隨著時間的推移持續跑贏市場的營收，然後實現 EBITDA 利潤率的擴張。這是第一個司機。我們去槓桿化的速度非常快，比我們對外承諾的速度要快得多，而且我們對潛在的現金流特徵非常有信心。

Secondly, I think it's a recognition of -- and based on some investor feedback, that we should -- we -- in general, we should operate with a little bit lower leverage ratio. And we've looked at our investor peers and others. And so I think this represents -- we always were going to move here at some point, Sam. It's just a matter of when. And it's a decision we've looked at for some time and made that decision, obviously.

其次，我認為這是一種認知——並且基於一些投資者的回饋，我們應該——我們——一般來說，我們應該以稍微低一點的槓桿率進行操作。我們也研究了我們的投資者同行和其他人。所以我認為這代表——我們總是會在某個時候搬到這裡，山姆。這只是時間問題。顯然，我們已經考慮了一段時間並做出了這個決定。

But we think it sends a very strong message that we'll operate consistently as a target within a lower target leverage range and still with increased capital return to shareholders in the form of dividends, which were increasing, announcing the intent, our intent to increase it as well as continuing our share buyback program that we've got authorized. So I think it's a very strong message. We hope that you see it as such.

但我們認為，這發出了一個非常強烈的信息，即我們將在較低的目標槓桿範圍內持續運營，並仍以股息形式增加對股東的資本回報，股息正在增加，宣布了我們的意圖，我們打算增加股利並繼續我們已獲得授權的股票回購計劃。所以我認為這是一個非常強烈的訊息。我們希望您也這麼認為。

The next question comes from Christopher Glynn with Oppenheimer.

下一個問題來自克里斯托弗·格林和奧本海默。

Just wanted to dive into some of the uses of cash going forward. Share practice, you had $1 billion authorization intent to use it by '26. It seems like you're talking more about opportunistic levels now. I think we're expecting you'll have the cash for $540 million preferreds in the second quarter, '25. And just curious, in those context, if you could help us think about those, what amount of balance sheet cash is appropriate is sort of a threshold benchmark?

只是想深入了解現金的一些未來用途。分享實踐，您有 10 億美元的授權意圖在 26 年前使用它。看來你現在更多地談論機會主義水平。我認為我們預計您將在 25 年第二季獲得 5.4 億美元優先股的現金。只是好奇，在這種情況下，如果你能幫助我們思考這些，資產負債表現金的多少是適當的，是一種門檻基準？

Yes, Chris, let me start by just grounding everyone on the primary sources of cash. We've walked through that. We provided you our outlook, $700 million of free cash flow at the midpoint of the guide. The dividend payments, including the common and the preferred, rough around $140 million of cash in 2024. That still leaves us with about $560 million of cash that we can allocate against our priorities. So from that perspective, we're going to be opportunistic on the share buyback. We have the $1 billion authorization. That is not time bound. So that is something that we can always leverage here up to that $1 billion limit. We're still at the very early stages. We have not done a considerable amount of share buybacks over the past 2 years. So from our perspective, we'll be opportunistic on whether we continue to pay down existing debt or we leverage that cash for share buybacks.

是的，克里斯，讓我先讓每個人都立足於現金的主要來源。我們已經經歷過了。我們向您提供了我們的展望，即指南中點的自由現金流為 7 億美元。 2024 年的股息支付（包括普通股和優先股）約為 1.4 億美元現金。這仍然給我們留下了大約 5.6 億美元的現金，我們可以根據我們的優先事項進行分配。因此從這個角度來看，我們將在股票回購方面採取機會主義態度。我們有10億美元的授權。那是沒有時間限制的。因此，我們始終可以利用這一點，最高可達 10 億美元。我們仍處於非常早期的階段。過去兩年我們沒有進行大量股票回購。因此，從我們的角度來看，我們將在是否繼續償還現有債務或利用這些現金進行股票回購方面採取機會主義態度。

And like we use that word opportunistic quite a bit. That's exactly how we look at it is where can we get the best return. As we think about paying down our existing debt, that just frees up capacity on our existing facilities that we're keeping in mind that we do have that preferred that needs to be taken out in the second quarter of 2025. So that is part of our calculus as we think about deploying cash here in 2024.

就像我們經常使用機會主義這個詞一樣。這正是我們看待問題的方式，即我們在哪裡可以獲得最好的回報。當我們考慮償還現有債務時，這只會釋放我們現有設施的容量，我們要記住，我們確實有需要在 2025 年第二季度取消的優先設施。所以這是我們在考慮2024 年在這裡部署現金時的盤算。

That's great color, Dave. Just one other component, is about $0.5 billion what you should have on the balance sheet to support your operations on average?

這顏色真棒，戴夫。另一個組成部分是，您的資產負債表上平均應該有大約 5 億美元來支持您的營運嗎？

That's correct. I mean that's the amount that we typically have been carrying. So we're comfortable with that $500 million to $600 million of cash on the balance sheet. And again, we think about that as supporting the day-to-day business, particularly as we go through the different elements of building sequential sales throughout a typical year. So we want to make sure that we've got the available capital on the balance sheet.

這是正確的。我的意思是，這就是我們通常攜帶的數量。因此，我們對資產負債表上 5 億至 6 億美元的現金感到滿意。同樣，我們認為這是對日常業務的支持，特別是當我們在典型的一年中經歷建立連續銷售的不同要素時。因此，我們要確保資產負債表上有可用資本。

The next question comes from David Manthey with Baird.

下一個問題來自 David Manthey 和 Baird。

First question, so this time next year, when we look at the right-hand side of Slide 9, that EBITDA bridge, what you're telling us is that all 3 of those bars should be green? They might be really skinny, but they'll be green. Is that your expectation?

第一個問題，明年這個時候，當我們查看幻燈片 9 的右側（即 EBITDA 橋）時，您告訴我們的是所有 3 個長條圖都應該是綠色的？他們可能真的很瘦，但他們會是綠色的。這是你的期望嗎？

So Dave, we did highlight that -- and just for the audience, we're referring to the fiscal year 2023 sales and EBITDA bridges that were in our prepared remarks, Slide 9. We would anticipate that sales will be a positive green, gross margin rate and gross margin sales as we commented, we would expect that to improve year-over-year. SG&A would still be negative, but we expect to get leverage -- operating leverage on SG&A.

所以戴夫，我們確實強調了這一點- 對於觀眾來說，我們指的是我們準備好的演講幻燈片9 中的2023 財年銷售額和EBITDA 橋樑。我們預計銷售額將是一個積極的綠色總銷售額正如我們評論的那樣，我們預計利潤率和銷售毛利率將比去年同期改善。 SG&A 仍為負數，但我們預計將獲得槓桿——SG&A 的營運槓桿。

All right. That's fair. And then I'm thinking about the -- what you mentioned on rebates being stable. When I think about the supply chain issues working out, backlogs down, I mean the inventories are still somewhat elevated as we've kind of talked about, maybe you don't think that relative to the project business, et cetera. But when you say rebates are going to be stable, it would seem like downside would be more likely. Can you just talk us through why you think that flat is the right idea there?

好的。這還算公平。然後我在考慮你提到的關於回扣的穩定性。當我考慮供應鏈問題解決、積壓下降時，我的意思是，正如我們所討論的那樣，庫存仍然有所增加，也許您不認為相對於項目業務等。但當你說回扣將維持穩定時，似乎下行的可能性更大。您能告訴我們為什麼您認為公寓是正確的想法嗎？

Yes, certainly. We negotiate our supplier volume rebate programs with our supplier partners every year. And it's generally based on a joint view of what the market growth opportunities are and then what are the specific products or product categories that our suppliers are incenting us to ensure that we push through to the channel. The -- as you take a look at the history of our supplier volume rebates, we did about 1.6% of sales in 2022. That was on a performance that included us being at the higher end of those growth rates during 2022. That moderated here in 2023.

是的，當然了。我們每年都會與供應商合作夥伴協商供應商批量回扣計畫。它通常基於對市場成長機會是什麼以及我們的供應商激勵我們以確保我們進入通路的特定產品或產品類別的共同看法。當您查看我們供應商數量回扣的歷史記錄時，我們在 2022 年的銷售額約為 1.6%。這一業績包括我們在 2022 年期間處於這些增長率的較高端。這裡有所放緩2023年。

So we lost about 20 basis points, about 1.4%. Our expectation is that we're going to continue to negotiate and hold that supplier volume rebate given our outlook for sales that we provided to you. Again, those supplier volume rebates get reset to market expectations every year.

所以我們損失了大約 20 個基點，大約 1.4%。我們的期望是，鑑於我們向您提供的銷售前景，我們將繼續談判並保留供應商數量回扣。同樣，這些供應商數量回扣每年都會根據市場預期進行重置。

So you can see what some of our supplier partners have put out in terms of their expectations for 2024. We're still negotiating but our expectation is that our SVR as a percentage of sales will be relatively consistent 2024 versus 2023.

因此，您可以看到我們的一些供應商合作夥伴對 2024 年的期望。我們仍在談判中，但我們的期望是，我們的 SVR 佔銷售額的百分比在 2024 年與 2023 年將相對一致。

Okay. And if I can just close the loop on this thought finally here. Dave, you said you don't want to talk too much about the SG&A reductions. But maybe if you could talk about the areas you're targeting for reduction as opposed to quantifying that? You talked about 2/3 of your increase in the current quarter coming through facilities, IT, sales promotions, the other third benefits in health care. Is it one of those? Is it something outside of those? Can you just talk in broad strokes about the areas that you're targeting?

好的。如果我能最終在這裡結束這個想法的話。戴夫，您說過您不想談論太多 SG&A 削減問題。但也許你可以談談你的目標減少的領域而不是量化它？您談到本季 2/3 的成長來自設施、IT、促銷以及醫療保健方面的其他第三種福利。是其中之一嗎？是那些以外的東西嗎？您能概括地談談您的目標領域嗎？

Certainly. And again, we've done this before. And we are coming off of 2 years with significant double-digit increases in '21 and '22, our sales growth moderated unexpectedly in the back half of 2023. We had some SG&A items. There's always some puts and calls whenever we close the year. In 2023, everything went the wrong way. And again, as we think about what we've got to target from an SG&A perspective going forward is we've got to get the profitability back. And that means we've got to reduce our SG&A as a percentage of sales. Like we've done in the past, we'll target a combination of discretionary spend plus some structural spend.

當然。再說一遍，我們以前已經這樣做過。我們在 21 年和 22 年經歷了兩位數的大幅成長，我們的銷售成長在 2023 年下半年出乎意料地放緩。我們有一些 SG&A 項目。每當我們年末的時候，總會有一些看跌期權和看漲期權。 2023年，一切都朝著錯誤的方向發展。再次，當我們從銷售、管理及行政費用的角度考慮未來的目標時，我們必須恢復獲利能力。這意味著我們必須降低銷售及管理費用佔銷售額的百分比。就像我們過去所做的那樣，我們的目標是可自由支配支出加上一些結構性支出的組合。

That includes how do we consolidate some of our facilities to reduce our costs. We'll be very, very focused on headcount management based on the demand that we see out there. We do want to continue to invest in our digital transformation. So that is something that we want to make sure that we're able to continue to pull forward.

這包括我們如何整合一些設施以降低成本。我們將非常非常關注基於我們看到的需求的人員管理。我們確實希望繼續投資我們的數位轉型。因此，我們希望確保我們能夠繼續向前邁進。

And so from my perspective, this is a combination of tighten the belt on discretionary expenses and then focus on some of the structural changes that we need to make to ensure that we've got the profitability that we expect internally but also you and our investors expect from us.

因此，從我的角度來看，這是收緊可自由支配費用的結合，然後專注於我們需要進行的一些結構性變革，以確保我們獲得我們內部以及您和我們的投資者所期望的盈利能力期待我們。

The next question comes from Patrick Baumann with JPMorgan.

下一個問題來自摩根大通的派崔克·鮑曼。

Just wanted to go back to Slide 6 and go over some of these fourth quarter items in terms of missing on the sales expectations you had. Maybe first on the CSS business. Can you talk about like where specifically you saw projects delayed? Was this like the Rahi business you acquired? Is it data center-related? And then what's your visibility of that coming back in '24? Is that embedded in your outlook?

只是想回到投影片 6，回顧第四季的一些項目，看看是否未達到您的銷售預期。也許首先是 CSS 業務。能具體談談您看到專案延遲的具體情況嗎？這和你收購的 Rahi 業務一樣嗎？與資料中心相關嗎？那麼你對 24 年回歸的看法如何？這是否已融入您的觀點？

And then on the EES segment, a couple of ones here. Like how big is solar for you? I don't remember you guys talking much about that before. And then what's in OEM, like what's declining? I mean, I feel like this is a business where you don't have a lot of visibility to -- over the course of the year, you talked about manufactured housing. You've talked about small vehicles. It's not clear to me what exactly is in the OEM business besides that and kind of what drove the weakness here in the fourth quarter would be helpful.

然後是 EES 部分，這裡有幾個。例如太陽能對你來說有多大？我不記得你們之前談過這個問題。那麼 OEM 領域的情況是怎麼樣的，例如什麼在下降？我的意思是，我覺得這是一個你沒有太多知名度的行業——在這一年裡，你談到了活動房屋。您談到了小型車輛。我不清楚除此之外 OEM 業務到底是什麼，以及第四季度疲軟的原因會有所幫助。

Certainly. Let me start with CSS. Relative to our expectations, and if you take a look at how we finished the fourth quarter, the biggest miss relative to our expectations was within the CSS business. That's where we did see some of our large projects to technology customers, including some data centers, got pushed out of 2024. We were clearly focused on having those ship in November, December, they've been pushed to the current year. So that is something that was unexpected. We have included those sales as we think about the growth rates in the current year into 2024.

當然。讓我從 CSS 開始。相對於我們的預期，如果你看看我們第四季的表現，你會發現與我們的預期相比最大的未達到預期的是 CSS 業務。我們確實看到一些面向技術客戶的大型專案（包括一些資料中心）被推遲到 2024 年。我們顯然專注於在 11 月、12 月交付這些項目，但它們已被推遲到今年。所以這是出乎意料的事情。我們在考慮今年到 2024 年的成長率時已將這些銷售額納入其中。

On EES. So EES came in, as John mentioned, relatively close to our expectations, but we had some puts and calls within the makeup of those sales. I'll mention on OEM. We had called out the manufactured structures business, which is, as you said, Patrick, it includes some specialty vehicle. It also includes some manufactured housing. That business has been relatively stable.

在EES上。因此，正如約翰所提到的，EES 的表現相對接近我們的預期，但我們在這些銷售的組成中包含了一些看跌期權和看漲期權。我會提到 OEM。我們已經召集了製造結構業務，正如你所說，帕特里克，它包括一些特種車輛。它還包括一些製造的住房。該業務一直相對穩定。

I mean, I think we've hit the bottom in terms of the overall market opportunity and our sales. But we did have some customers in other segments where sales were expected to ship in November, December that we did not see ship. So we do think that, that was driven by a market downshift relative to our expectations.

我的意思是，我認為我們的整體市場機會和銷售額已經觸底。但我們確實有其他細分市場的一些客戶，預計銷售將在 11 月、12 月發貨，但我們沒有看到發貨。因此，我們確實認為，這是由市場相對於我們預期的下滑所推動的。

And then I'll just highlight again on UBS. Broadband came down more than we thought it would. The other thing that we had highlighted was utility, just comping some very strong numbers. We still see very strong demand from the utility business. But again, against the tough comparison, we came in below our expectations in the fourth quarter.

然後我將再次強調瑞銀。寬頻下降幅度超出我們的想像。我們強調的另一件事是實用性，只是比較一些非常強大的數字。我們仍然看到公用事業業務的需求非常強勁。但同樣，與嚴格的比較相比，我們第四季的表現低於我們的預期。

Patrick, I'll add that the secular growth trends are still intact. And so I'll just -- I'll add to Dave's comment relative to data centers and what we call our WDCS business, our WESCO Data Center Solutions, which is the combination of Rahi plus Anixter's legacy data center business, which was exceptionally strong. So that had very strong results in the fourth quarter, and it grew double digits. Obviously, it was up very strongly across the year.

派崔克，我要補充一點，長期成長趨勢仍然完好無損。因此，我將補充 Dave 對資料中心以及我們所說的 WDCS 業務、我們的 WESCO 資料中心解決方案的評論，該解決方案是 Rahi 與 Anixter 傳統資料中心業務的結合，該業務非常強大。因此，第四季度的業績非常強勁，並且成長了兩位數。顯然，全年漲幅非常強勁。

But there were some projects that did slip out that we had expected to get in December. The momentum vector is still exceptionally strong there. And we got very high good bidding -- bid activity levels and quoting levels. The AI-driven demand is expected to only further accelerate, I think, the opportunities with data centers. And we expect very strong results in 2024 because I think that was part of your question as well. Very high single digit to low double-digit growth for that portion of our CSS business.

但有些項目確實是我們預計在 12 月完成的。那裡的動量向量仍然異常強勁。我們得到了非常高的良好投標——投標活動水平和報價水平。我認為，人工智慧驅動的需求預計只會進一步加速資料中心的機會。我們預計 2024 年會取得非常強勁的成果，因為我認為這也是您問題的一部分。我們 CSS 業務的這一部分實現了非常高的個位數到低兩位數的成長。

Yes. Let me just go back. I failed to mention solar. So solar is high single-digit percent of our EES business. We've not provided the specific number. We do support a combination of nonresidential plus residential customers related to that solar business. We've seen a significant downturn just based on inflation, interest rates and some of those demand patterns in our EES business for solar.

是的。讓我回去吧。我沒有提到太陽能。因此，太陽能在我們的 EES 業務中所佔的比例很高。我們沒有提供具體數字。我們確實支援與太陽能業務相關的非住宅和住宅客戶的組合。我們的太陽能 EES 業務僅因通貨膨脹、利率和其中一些需求模式而出現了嚴重下滑。

And then just one follow-up just on the first quarter. You mentioned, I think, sales down mid-single digit. And then I was wondering if you could give some color on margin expectations for the year-over-year because for the full year, you have them up, I think, 10 basis points at the midpoint. But since you're starting slow, I'm going to imagine that you're down to start the year-over-year on margin. If you could just help provide some parameters around that. That's be helpful.

然後只是第一季的一個後續行動。我認為你提到銷售額下降了中個位數。然後我想知道您是否可以對同比利潤率預期進行一些說明，因為我認為全年利潤率預期中位數提高了 10 個基點。但由於你們起步緩慢，我想你們在開始時的利潤率會逐年下降。如果您能幫忙提供一些相關參數。這很有幫助。

Yes, Patrick. Let me walk you through how we developed our 2024 outlook, and I'll focus on sales first. As we mentioned, we're down about 5% in the month of January on a preliminary basis. That's in line with typical seasonality. And the way that we built our 2024 sales outlook is we started with our Q4 2023 and we applied the typical seasonality on a sales per workday basis.

是的，派崔克。讓我向您介紹我們如何制定 2024 年展望，我將首先專注於銷售。正如我們所提到的，我們一月份的初步業績下降了約 5%。這符合典型的季節性。我們建立 2024 年銷售前景的方式是從 2023 年第四季開始，並以每個工作日的銷售額為基礎應用典型的季節性。

So from that perspective, we typically see January down mid-single digits, typical seasonality, and we see the first quarter down low single digits. We've applied that same methodology for each of our quarters. The one thing I'll note here is that Q1 and Q2 of 2023, the reported sales were up 12% and up 5%, respectively. So we've got tough base period comparisons in the first half.

因此，從這個角度來看，我們通常會看到一月份出現中等個位數下降，這是典型的季節性因素，我們會看到第一季出現較低個位數下降。我們對每個季度都採用了相同的方法。我在這裡要注意的一件事是，2023 年第一季和第二季度，報告的銷售額分別成長了 12% 和 5%。因此，我們在上半年進行了艱難的基期比較。

In the second half of the year, again, we've applied typical seasonality sequentially by quarter which includes sequential growth Q1 to Q2, relatively flat Q2 to Q3 and then just a very modest growth rate into the fourth quarter.

在今年下半年，我們再次按季度連續應用了典型的季節性，其中包括第一季到第二季的連續成長，第二季到第三季相對持平，然後到第四季只有非常溫和的成長率。

In 2024, we have 2 extra workdays, they're both in the back half of the year. So as we think about the construct of our sales outlook, it's roughly 48% front half, 52% back half. That 52% back half, of course, being helped by the 2 extra workdays. So again, we've applied typical seasonality against our sales outlook. If you look at typical seasonality, it would point you towards the higher end of the range of our 1% to 4%. But we, of course, have taken a look at some of the other external factors and we've incorporated that into how we've set the range for 2024.

2024 年，我們有 2 個額外工作日，都在下半年。因此，當我們考慮銷售前景的建構時，前半部大約是 48%，後半部為 52%。當然，這 52% 的後半部得益於 2 個額外工作日的幫助。因此，我們再次根據我們的銷售前景應用了典型的季節性因素。如果您觀察典型的季節性，您會發現該比例處於 1% 至 4% 範圍的較高端。但當然，我們已經考慮了其他一些外部因素，並將其納入我們設定 2024 年範圍的方式中。

Our project activity, our bidding levels continue to be strong. That also supports the range of 1% to 4%. On the margin profile, we've given you the margin profile and our expectations for the full year. We're not going to provide the specific margin drivers for the first quarter.

我們的專案活動和投標水準持續保持強勁。這也支援 1% 到 4% 的範圍。關於利潤率概況，我們已經向您提供了利潤率概況和我們對全年的預期。我們不會提供第一季的具體利潤驅動因素。

This concludes our question-and-answer session. I would now like to turn the conference back over to John Engel for any closing remarks.

我們的問答環節到此結束。現在我想將會議轉回約翰恩格爾發表閉幕詞。

Okay. Thank you again for joining us. I'll bring the call to a close. We've addressed all your questions. I thank you for your support. It's appreciated. We look forward to speaking with many of you. I know we have many follow-up calls planned today and tomorrow in the coming days. We also will be participating in a series of conferences over the next 2 months. First, the Raymond James Institutional Conference; second, the Loop Investor Conference; and third, the JPMorgan's Industrial Conference. And additionally, we expect to announce our first quarter earnings results on Thursday, May 2. So with that, thank you, and have a good day.

好的。再次感謝您加入我們。我將結束通話。我們已經解決了您的所有問題。我感謝您的支持。值得讚賞。我們期待與你們中的許多人交談。我知道我們計劃在未來幾天的今天和明天進行許多後續電話會議。我們還將在接下來的兩個月內參加一系列會議。首先，雷蒙德詹姆斯機構會議；二是Loop投資者大會；第三，摩根大通工業會議。此外，我們預計將於 5 月 2 日星期四公佈第一季收益結果。因此，謝謝您，祝您有美好的一天。

This concludes our conference. Thank you for attending today's presentation. You may now disconnect.

我們的會議到此結束。感謝您參加今天的演講。您現在可以斷開連線。