Wesco Reports 2020 Sales Increased 48% on Anixter Acquisition
Net sales for the fourth quarter increased 97%, which the wholesale distributor attributes in large part to acquiring rival Anixter in 2020.
Net income was $70.4 million for 2020, compared to $223.4 million for 2019.
Net sales were $4.1 billion for the fourth quarter compared to $2.1 billion for the same period the prior year, an increase of 96.7% due to the merger with Anixter that was completed on June 22, 2020. Sales revenue was partially offset by the impact of weakened demand from the COVID-19 pandemic, according to Wesco.
Fourth quarter net income of $5.6 million compared to $53.1 million for the same period the prior years.
“Fiscal 2020 will be remembered as one of the most important in Wesco’s history,” states John Engel, chairman, president and CEO. “We completed the transformational acquisition of Anixter, doubling our size and changing our trajectory for years to come. We designed and launched a three-year integration plan which in just six months has delivered synergies in excess of our initial targets.”
In the third quarter of 2020, in connection with the acquisition of Anixter, the company identified new segments, which have been organized around three strategic business units: Communications & Security Solutions (CSS), Electrical & Electronic Solutions (EES) and Utility & Broadband Solutions (UBS).
The following are results by segment for the year ended Dec. 31, 2020, compared to the year ended Dec. 31, 2019:
- CSS reported net sales of $3.3 billion for 2020, compared to $909.5 million for 2019, an increase of 265.4%. Operating profit was $217.2 million for 2020, compared to $43.8 million for 2019. Adjusted EBITDA was $289.6 million for 2020, or 8.7% of net sales, compared to $51.1 million for 2019, or 5.6% of net sales.
- EES reported net sales of $5.5 billion for 2020, compared to $4.9 billion for 2019, an increase of 12.7%. Operating profit was $260.2 million for 2020, compared to $261.8 million for 2019. Adjusted EBITDA was $294.9 million for 2020, or 5.4% of net sales, compared to $291.5 million for 2019, or 6.0% of net sales.
- UBS reported net sales of $3.5 billion for 2020, compared to $2.6 billion for 2019, an increase of 36.1%. Operating profit was $231.7 million for 2020, compared to $184.9 million for 2019. Adjusted EBITDA was $264.6 million for 2020, or 7.5% of net sales, compared to $198.7 million for 2019, or 7.7% of net sales.
CSS represents roughly one-third of Wesco’s revenue. EES and UBS represent 40% and 27% of the company’s overall sales across the enterprise, respectively.
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