Leveraging Existing Model to Supply Energy Evolution
We hosted a fireside chat with DNOW on September 12, 2023. We were joined by President and Chief Executive Officer David Cherechinsky and Vice President Digital Strategy and Investor Relations Brad Wise. The conversation is available on-demand in our full report accessible below. The report includes the transcript. DNOW’s transformed fulfillment model is driving sustainable earnings traction as the company increases its market share. Regional supercenters in major producing regions enable customers to concentrate their procurement spending with DNOW. DNOW has forged strategic supply chain partnerships with certain customers that provide a durable relationship and sticky revenue source. For DNOW, relationships provide some visibility into customer demand, increasing its inventory management efficiency. For customers, partnerships enable them to efficiently manage their spending and ensure they can source high-quality products from top-tier manufacturers when they need them. DNOW’s existing product catalogue can supply products to a wide variety of industrial markets that move fluids, including traditional oil & gas, mining, chemicals, and water among others. Roughly 90% of the existing product catalogue is applicable to uses across a broad industrial landscape. The energy evolution exposes DNOW to incremental revenue streams as customers invest in decarbonization and emission reduction projects. Several of DNOW’s current customers aim to be decarbonization leaders and are developing carbon capture, utilization, and storage (CCUS) and renewable natural gas (RNG) projects. Active discussions with participants are underway and the company is processing orders for projects getting underway. Management expects Process Solutions acquisitions to support its customers’ future needs in their base and energy evolution projects. The company’s EcoVapor units minimize fugitive emissions and flaring allowing users to reduce emissions and increase revenue. Management’s goal is to position DNOW to drive sustainable earnings growth. Energy evolution projects could contribute to a more diversified future earnings stream and help tame some of the oil & gas cyclicality.NOW, through its subsidiaries, is a distributor to the oil and gas and industrial markets. The company's global product offering includes consumable maintenance, repair and operating supplies, pipe, valves, fittings, flanges, gaskets, fasteners, electrical, instrumentation, artificial lift, pumping solutions, valve actuation and modular process, measurement and control equipment. The company also provides warehouse and inventory management solutions as part of its supply chain and materials management offering. The company's solutions include outsourcing the functions of procurement, inventory and warehouse management, logistics, point of issue technology, project management, as well as business process.
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