Grainger Metalworking Capabilities

GRAINGER METALWORKING CAPABILITIES

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GRAINGER.COM/METALWORKING | 1.800.GRAINGER MULTICHANNEL: U.S. BUSINESS Creating an Effortless End-to-End Experience

Providing a great customer experience is the foundation of Grainger’s standing as a distribution leader and a key lever in accelerating profitable growth. Grainger’s U.S. supply chain network executes more than 100,000 transactions a day, and the company works tirelessly to ensure orders are executed flawlessly, from origination to fulfillment.

ORDER ORDER ORIGINATION FULFILLMENT Line Mix 2017 28% 22% 19% 22% 9% Line Mix 2017 68% 19% 13% Website EDI/ePro KeepStock® Phone Branch Ship KeepStock® Pickup at Branch

DIGITAL CHANNELS PHONE (Website, EDI/ePro and KeepStock) Sixty-nine percent of orders and ~60 percent of Twenty-two percent of orders in the U.S. originate over the phone. GRAINGER METALWORKINGrevenue in the United States originated through a digital channel in 2017.1 Grainger was ranked • In 2017, Grainger began consolidating its network of 150 contact centers into three national locations the 10th largest eCommerce retailer in North America by Internet Retailer in April 2017, based in Janesville, Wisc.; Waterloo, Iowa; and Phoenix, Ariz. The company expects to complete this work in CAPABILITIES on sales generated through its digital channels. 2018. These changes have already led to more effective and cost-efficient customer service. • Websites such as Grainger.com are the company’s largest origination channel at 28 percent. BRANCH –2018 Grainger.com FACT is theBOOK largest industrial MRO site in the U.S.2 Grainger’s U.S. branch network includes 251 locations and profitably grows revenue. Four distinct Agenda – The site had more than 10 million visitors in 2017, up 10 percent from 2016. customer types visit Grainger branches each day: – Grainger launched a new website called Gamut.com in 2017. Gamut leverages highly curated On-the-go: Broad geographic coverage makes it easier for on-the-go customers to drop by any • Grainger Overview • product information and deep customer knowledge to create an effortlessGEOGRAPHIC search OVERVIEW experience (As of Decemberbranch 31, and 2017) get what they need, when and where they need it.

• Metalworking Products, Services & SolutionsW.W.for customers.Grainger, Inc. is a broad line, business-to-business • Near a branch: Many customersMRO MARKET prefer to pickMARKET up on the sameBRANCHES day versusDISTRIBUTION having theAPPROXIMATE product shipped. distributor of maintenance, repair and operating (MRO) SIZE 1 SHARE CENTERS NUMBER OF • Metalworking Expertise – Grainger will combine Gamut’s capabilities with Grainger.com with the goal of building the • Emergencies: Local inventory allows Grainger to provide same-day service(DCS) for CUSTOMERScustomers’ SERVED suppliesbest industrial and other distribution related products website andin the services. space. More emergency needs. ~ $127 billion 6 percent 2842 16 1,870,000 • Documented Value Opportunities than 3 million businesses and institutions worldwide UNITED STATES • Other digital channels include Grainger’s KeepStock inventory managementIncludes: system Grainger and Industrial Supply,• Product E&R Industrial,expertise: Branch staff members are well-versed in Grainger products and can provide eProcurement.rely on Grainger Together for products these twoin categories channels suchrepresent as safety, more than 40 percentImperial of Supplies,all U.S. orders. Zoro U.S.3 technical or search-and-select support. material handling and metalworking, along with services ~ $11 billion 7 percent 91 6 56,000 like inventory management and technical support. These CANADA Grainger Overview Includes: Acklands–Grainger Inc., WFS Enterprises Inc. customers represent a broad collection of industries SUPPLY CHAIN includingSeattle commercial, government, healthcare and GraingerLATIN AMERICA has made significant investments in its distribution center~ $14 network billion to ensure< 2 percent optimum capacity26 and increased2 automation47,000 in Grainger is among the largest responseDominican to the Republic, need for Mexico, on-demand Panama, delivery Peru, of Puertoproducts, Rico information4 and services. manufacturing. TheyMinneapolis place orders online, on mobile Northeast Grainger has invested in new and improved DCs in California, Illinois and New Jersey and significantly expanded its DC in South Carolina. industrial distributors. devices, throughDenver sales representatives,Chicago over the phone • ASIA San Francisco Cleveland 500,000 products and at local branches.Kansas City ApproximatelyLouisville 5,200 suppliers • MonotaRO:In 2016, Grainger Japan opened a new ~1.3 million-square-foot DC~ in$42 New billion Jersey.~ 2 percent 0 3 1,119,000 Los Angeles Greenville ~300,000 products Worldwide provide Grainger with 1.7Memphi millions products stocked in • ChinaIn 2017, Grainger purchased land for a new DC in Louisville, Ky.~ Construction $99 billion of< the 1 percent facility began in0 2017 and1 the building is9,000 expected ~150,000 products Dallas the company’s distribution centersJacksonvill (DCs)e and branches to be up and running in 2020. Under construction EUROPE • Over 3 Million Customers worldwide. Grainger employs nearly 25,000 team members This robust DC network allows Grainger to manage nearly 650,000 stocked SKUs in the United States and also ship most orders complete Note: Excludes the distribution Cromwell: United Kingdom5 ~ $15 billion 2 percent 55 1 134,000 • Approximately 5,200 Suppliers across the globe. For more information on Grainger,centers of specialtyvisit businesses. with next-day delivery. Availability, the percent of time a product is in stock when and where the customer needs it, has remained at very Fabory: Belgium, Czech Republic, France, Hungary, ~ $37 billion ~ 1 percent 44 2 82,000 www.grainger.com/investor. high levels even as Grainger expanded its product line, creating a strong service experience. • Over 1.7M Products Stocked The Netherlands, Poland, Portugal, Romania, Slovakia, Spain • Nearly 25,000 Associates 1 In March 2018, Grainger refined its process for stratifying channel revenue, a management reporting metric. As a result, in 2017 U.S. KeepStock sales were 11 percent and U.S. digital sales were 60 percent of core U.S. sales respectively. 2017 SALES Zoro Europe: Germany ~ $32 billion < 1 percent 0 0 210,000 2 Based on data compiled by Internet Retailer in 2017. In the U.S. TOTAL ~ $377 billion1 3 percent 500 31 > 3,500,000 NOTE:Customer DATA ON CategorPAGE IS FORy THE CORE U.S. BUSINESS WHICH EXCLUDES ZORO U.S. AND SPECIALTY BRANDS. W.W. GRAINGER, INC. AND SUBSIDIARIES 5 • Over 1.8 Million Customers 1 Estimated MRO market size where Grainger has operations. The total worldwide MRO market is estimated at approximately $570 billion. 2 Comprised of 251 stand-alone branches, 31 onsite branches and 2 will-call express locations. 1 Heavy Manufacturing • 6% Market Share Contractor 3 For financial reporting purposes, Zoro U.S. is reported in Other Businesses. 1 Other Transportation 4 Although Puerto Rico is a U.S. territory, the company manages this business as part of Latin America. 1 Commercial 5 Natural Resources • 16 Distribution Centers in the U.S. 5 Cromwell also has operations in Europe, Africa and Asia, representing approximately 12 percent of its revenue. 1 Government 5 Retail/Wholesale • 284 Branch Locations in the U.S. 12 Light Manufacturing Reseller

• Metalworking is Grainger’s 3rd FORWARD-LOOKING STATEMENTS All statements in this Fact Book, other than those relating to historical facts, are “forward-looking statements.” These forward-looking statements are not guarantees of future performance Largest Category in Terms of Sales Product Category or results and are subject to risks and uncertainties, which could cause actual results to differ materially from such statements. 1 Safety and Security HVAC These statements include, but are not limited to, statements about future strategic plans and future financial and operating results. Important factors that could cause actual results to differ 1 1 Material Handling 5 Electrical materially from expectations include, among others: higher product costs or other expenses; a major loss of customers; loss or disruption of source of supply; increased competitive pricing pressures; failure to develop or implement new technologies or business strategies; the implementation, timing and success of our strategic pricing initiatives; the outcome of pending and future 10 Metalworking Lighting litigation or governmental or regulatory proceedings; anti-bribery and corruption, environmental, advertising, privacy and cybersecurity matters; investigations, audits and changes in laws and 10 Other Power Tools regulations; disruption of information technology or data security systems; general industry or market conditions; general global economic conditions; currency exchange rate fluctuations; market Cleaning and 3 Fluid Power volatility; commodity price volatility; labor shortages; facilities disruptions or shutdowns; higher fuel costs or disruptions in transportation services; natural and other catastrophes; unanticipated Maintenance 2 Power Transmission weather conditions; loss of key members of management; Grainger’s ability to operate, integrate and leverage acquired businesses; changes in credit ratings; and changes in effective tax rates Pumps, Plumbing 2 Specialty Brands and other factors, all of which can be found in the company’s filings with the Securities and Exchange Commission, including the company’s most recent periodic report filed on Form 10-K for the and Test Equipment 1 Motors year ended December 31, 2017, which is also available on the company’s Investor Relations website. 7 Hand Tools Caution should be taken not to place undue reliance on the company’s forward-looking statements. The company undertakes no obligation to update any of its forward-looking statements, except as required by law. Source: 2017 Grainger Fact Book W.W. GRAINGER, INC. AND SUBSIDIARIES 1

GRAINGER.COM/METALWORKING | 1.800.GRAINGER GRAINGER METALWORKING CAPABILITIES

Metalworking Products and Partners MACHINE TOOL & Grainger is partnered with globally ACCESSORY BRANDS Available through Grainger DRILL BITS, CENTER DRILLS, END MILLS, REAMERS, TAPS & DIES INSERTS recognized brands and is well supplied with the latest metalworking technology. WELDING BRANDS Available through Grainger BAND SAW BLADES

CUTTING & ABRASIVES • Over 380,000 SKU’s GRINDING FLUIDS WELDING CONSUMABLES ® • 500+ Supplier Partners PRECISION MEASURING MACHINE TOOL ACCESSORIES MACHINERY • Site-Specific Partners

• Strategic Partners WELDING EQUIPMENT WELDING SAFETY • All Major Categories: The tools you need. The brands you trust. To view our complete selection, visit grainger.com/metalworking • Abrasives • Cutting Tools The tools you need. The brands you trust. © 2019 W.W. Grainger, Inc. W-BUPX130

To view our complete selection, visit • Welding grainger.com/metalworking

Metalworking Services

Grainger provides the metalworking-specific services necessary to help minimize cost and drive productivity.

Grainger’s inventory management services work perfectly to provide the right metalworking solution when and where you need it.

• Tool Reconditioning • Tool Regrinding • Tool Recycling • Custom Band Saw Blades • Machine Guarding • Lockout/Tagout • Inventory Management

GRAINGER.COM/METALWORKING | 1.800.GRAINGER GRAINGER METALWORKING CAPABILITIES

Metalworking Expertise

Grainger’s expertise includes not only the people involved in our Metalworking Solution (Metalworking Specialists and Technical Product Support), but expertise from our Supplier Partners and E&R Industrial.

In addition, we conduct research to produce industry studies and develop content relevant to the needs of our customers.

• Metalworking Specialists • Inside Customer Support • Technical Product Support • E&R Industrial • Supplier Partners • Industry Research • Metalworking Articles & Technical Videos

KnowHow SM

GRAINGER.COM/METALWORKING | 1.800.GRAINGER GRAINGER METALWORKING CAPABILITIES

Grainger’s Metalworking Specialists

Grainger’s Metalworking Specialists are deployed nationwide, come from diverse areas within the metalworking industry and have decades of collective hands on process improvement experience.

Grainger’s dedicated Metalworking Specialists help you work through challenging metalworking applications and identify cost-saving solutions. Our team of specialists is comprised of individuals with hands-on experience Metalworking Specialists Experience Includes: in a variety of applications. • Machining Our Metalworking Specialists receive • Welding regular training and experience from • Grinding some of the leading brands within • CNC Set-Up & Operation the industry. • Programming • Deployed Nationwide • Production Management • Hands-On Process • CAD Improvement Experience • Process Improvement • Combined 568 Years in the Industry • Engineering • Miller Master’s Pro Certified • Inspection/Quality Control Certified

GRAINGER.COM/METALWORKING | 1.800.GRAINGER GRAINGER METALWORKING CAPABILITIES

Grainger’s Metalworking Specialists

Grainger’s Metalworking Specialists can help you with many of your concerns and have a wealth of knowledge that you can utilize.

• Applications Insight • Product Breadth & Quality • The Latest Technology • Documented Cost Savings

Grainger Metalworking Specialists are:

• Knowledgeable about the latest trends • Well-versed on a variety of brands • Committed to helping reduce scrap and rework • Experienced in metal removal and finishing

GRAINGER.COM/METALWORKING | 1.800.GRAINGER GRAINGER METALWORKING CAPABILITIES

Documented Value Opportunities

Our Metalworking Team is here to help customers take costs out by driving productivity in the shop and on the production floor.

Improve Work Cell Efficiency Maximize Machine Tool Output • You want maximum production • You’ve invested a significant amount • Getting it done effectively can be in capital assets (machining centers, challenging lathes, mills and other equipment) • We can help get your operators • We can help ensure these machines working as effectively and efficiently are running and performing at as possible optimal levels to help meet your throughput and quality targets

Optimize Product Application Minimize Scrap and Rework • Get the most from your labor, capital • You want to get the most from assets and raw materials your raw materials • Proper tool selection and application • We work with your production can help personnel to help: • Our team can help you optimize set • Reduce errors and up and tool change time substandard output • We’ll also help reduce machine • Increase time-saving efficiencies downtime due to tool failure • Guide you on how to eliminate costly waste from production processes

All Working Together to Maximize Your Investment and Help Boost Profitability!

GRAINGER.COM/METALWORKING | 1.800.GRAINGER GRAINGER METALWORKING CAPABILITIES

GRAINGER METALWORKING CostCAPABILITIES Savings Focus Let’s take a look at one of the ways that Grainger canCOST help SAVINGS maximize yourFOCUS investment and boost productivity.Let’s take a look at one of the ways that Grainger can help maximize your investment and boost productivity. Consumable Tooling: •Consumable Small component Tooling: of Total Cost •• LargeSmall impact component of Total of Total Cost Cost • Large impact of Total Cost

Source: Industrial Supply Magazine 2012

GRAINGER.COM/METALWORKING | 1.800.GRAINGER

COMPANY CONFIDENTIAL GRAINGER METALWORKING CAPABILITIES EXAMPLE GRAINGERCost Savings Focus METALWORKING CAPABILITIESConsumable tooling, though a small component of total cost, has a large impact on total cost. A tool that adds COST20% to SAVINGS the tooling FOCUS costs but - EXAMPLE improves productivity by Consumable tooling, though a small component of total cost, has a large impact10%, resultson total in cost. a 4% A toolreduction that adds in total 20% cost. to the tooling costs but improves productivity by 10%, results in a 4% reduction in total cost.

Source:Source: Industrial Industrial Supply Supply Magazine Magazine 2012 2012

If we change our tooling to one that If we change our tooling to one that costs about That $100 increase costs about $100 more (20% That $100 increase in $100increase), more BUT(20% can increase), show that BUT it: can show that it:tooling has resultedin tooling in has resulted in • Lasts longer (less change outs) 10% improvement10% improvement in • Lasts longer (less change outs) • Works better/faster/more efficiently productivity (laborin productivity & (labor (improves• Works better/faster/more worker productivity) efficiently machine costs)& machine costs) (improves worker productivity)

For aFor combined a combined 4% 4% reduction reduction in in total total cost.cost. Results may not be typical for all customers.

COMPANY CONFIDENTIAL GRAINGER.COM/METALWORKING | 1.800.GRAINGER GRAINGER METALWORKING CAPABILITIES

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Grainger.com/metalworking

GRAINGER.COM/METALWORKING | 1.800.GRAINGER