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2022 REPORT TO ASSOCIATES
REPORT TO ASSOCIATES Table of Contents 5 6 4 2022 President s Message Strategic Foundation and Vision Mission and Values Customer Voice of Customer Secure Pickup Lockers 9 16 26 Performance Digital Operations Supply Chain Organizational Restructuring Financial Results 2022 Strategic Leadership Team from left to right Birgitte Noble Brett Wilson Stacy Stanslaski Mark Blatz Jay Paradies Scott Miesen Sarah Murray Brian Highlander 22 Minnesota Locations 3 Wisconsin States 2 Regions 2 3 Illinois People Associate Overview EPEC 30 Under 35 ERGs Safety Planet Community Involvement Sustainability
President s Message President s Message cont We reached over 750M in sales in 2022 Our sales goal for 2023 is over 800 million the next step toward our ambition to be a 1B company through organic growth by 2026 We have set our sights on this ambition and we will take our next steps with passion and conviction We will continue to live out our Viking Electric values It s what we do It s how we succeed I am proud of what we have accomplished together and look forward with confidence to our future success Each January I take time to reflect on the events and accomplishments of the previous year It s an opportunity for me to conduct a review of personal and corporate achievements from the small steps taken to the big projects completed I also take note of projects not yet completed work that will continue in the new year The Report to Associates RTA offers the same opportunity for all of us at Viking Electric It is a chance to celebrate our work together to remember how much we accomplished in just twelve months and to reflect on how we personified our shared Viking Electric values The evidence is everywhere All associates participated in Diversity Equity and Inclusion training Associates launched and led Employee Resource Groups We jumped in to volunteer in our local communities The Sustainability Leadership Committee SLC has committed to reduce waste and increase recycling across Viking Electric We have taken time to serve others I created a new Director of Sales Operations position This role focuses on activities and processes that will help our organization run more effectively and efficiently Since May Steve Sass the first associate in this key role is advocating for sales enablement resources and will provide our sales associates with tools training and support We began an Evolution in our sales organization This project began with a cross functional team that spent two years figuring out how to embrace future growth opportunities while building on our highly successful past The team created customer personas that define our customers needs and expectations what levels of service they require and helped identify how we can position ourselves to be their indispensable partner In addition this team investigated how to provide an omnichannel customer experience to consistently provide the tools and channels our customers need to do business with us in the way that they choose As our assembled team learned more about our customers unique personas we also recognized the need to align our sales associates skills and talents more effectively As a result we developed new sales roles and created new customer support teams Sales leaders were highly engaged in this process and in the fourth quarter we rolled it out to our sales associates The sales organization continued to implement the Challenger Sales process and developed additional challenger insights that focus on a solutions approach with our customers We provided Challenger based training throughout the year to sales associates and managers which offers opportunities for our sales associates to learn from each other and share creative ideas and best practices The Sales and the Project Teams learned more about the connection between Job Management and the Digital Job Center DJC We launched the cutting edge DJC tool and improved the customer experience along the way As a company we met our goal to increase our customers digital adoption and we grew our digital sales across all our digital channels With a singular focus on digital solutions as a best practice for all our business processes and customer interactions we prove that big goals are attainable Stacy Stanslaski President S We completed a new facility in Wausau Wisconsin and we moved into the new building in April To celebrate we hosted a Grand Opening party with customers and suppliers in June We emphasized our safety first culture with enhanced driver safety tools including Lytx cameras and creation of a Driver Development Specialist position tr e t a c i g u o F We identified three Strategic Growth Platforms that are aimed at accelerated sales growth Associates across the organization participated in conversations to identify concrete action plans that will be implemented over several years with the goal of reaching 1 billion in sales revenue by 2026 In response to previous associate surveys a crossfunctional team continued to focus on improving internal communications with our associates As a result of this team s recommendations we installed new tv monitors in associate breakrooms and or warehouses and introduced a new monthly internal associate newsletter called The Circuit In addition the Strategic Leadership Team SLT traveled to all locations and hosted in person meetings to connect with associates V Associates in all our corporate functions finance human resources materials marketing IT business process and operations worked closely with Sonepar and our sister Operating Companies to leverage the combined strength and resources to make an impact in all our markets and in our industry Continued on page 5 4 5 o i is M n Sustainable strategies that define how we interact with people communities and planet Sustainable workforce of knowledgeable passionate high performing associates Profitable growth through commitment to innovation and excellence Customer centric organization that delivers exceptional service and solutions Planet People Performance Customer Addison IL transitioned to a Viking Electric operated fleet a d n ti on i s is n o l a V s e u Vision To be the indispensable electrical supply chain partner central to our customers success Values Excellence Innovation Deliver great experiences throughout our entire business Take the initiative to drive positive change Mission Integrity Commitment Collaboration Behave in a respectful straightforward and ethical manner Bring passion creativity and knowledge to all that we do Enable shared success through teamwork Use our knowledge skills and passion to craft and deliver exceptional services and logistical solutions for our customers
Voice of Customer Secure Lockers CUSTOMER Secure Lockers allow customers to skip the line and pick up their orders when it s convenient for them even when our locations are closed After a pilot set of lockers was complete in Madison in 2021 several more locations implemented secure lockers throughout 2022 Program Updates Results In 2022 the Voice of Customer initiative expanded to include an external mechanism for gathering insights and feedback directly from our customers Associates continued to enter feedback into the internal form and in total Viking Electric associates and customers provided 198 feedback entries in 16 different categories Voice of Customer Process Voice of Customer Entries by Year Listen to our customers Act on the information 6 606 Locations with Secure Lockers Adapt our business 230 As a result of feedback received a team was assembled to evaluate inconsistencies in the call flow process and determine where improvements can be made 198 81 Orders Picked Up Blaine 10 2019 2020 2021 2022 Top 5 Locations to Provide Feedback St Cloud Minneapolis 62 21 16 14 Associate Challenge Addison Minneapolis Sturgeon Sheboygan Mid year associates were challenged to ask Bay their customers specific questions related to eBusiness and in exchange were entered into a weekly drawing for VE Rewards certificates that were redeemable in the Viking Electric Company Store Sixteen associates earned rewards for their entries during the eight week contest period 10 Green Bay Milwaukee 6 7 Plymouth
PERFORMANCE Digital Solutions Accomplishments The Digital Job Center DJC is a proprietary webbased solution that provides our customers with online access to all their project related information in one place DJC has grown to be the second largest digital tool accounting for over 47M in sales and growing The Digital team expanded this year to help address our growing digital business Tim Burns was named Digital Solutions Manager Nearly one third of Viking Electric customers use one of our digital tools DIGITAL DRIVE TOPICS INCLUDED Chicago Digital Drive Tim Burns Digital Solutions Manager Minneapolis In March the eBusiness and Marketing teams provided in person training with the Chicago Sales and Project teams The purpose of this week long event was to provide sales associates with an overview of our digital tools Charged Up Digital Tool Tour Digital Sales by Source Listed as a percent of total sales Viking Electric s e Business and Tool specialists were Charged Up and on the road for our Tools for the Digital Age tour The tour lasted from April to August and they visited all 22 counter locations provided hands on product demos and answered customers questions Results Total Digital Sales 188 5M Percent of Total Sales thru Digital eLink 8 44 24 89 DJC 6 21 Mobile App 2 12 Website 5 40 Challenger Insight Practice Onsite Customer Visits Web Mobile Digital Job Center eFill eLink SSM Employee Entered 0 86 Innovo eQuotes EDI 0 44 0 67 0 64 Blanket Orders 0 12 8 9
PERFORMANCE Operations Overview Overall Lines Picked 4 030 840 Cross Dock Lines Picked 607 842 Total Wire Cuts 263 072 Down by about 25 000 lines from 2021 putting less of a burden on the transfer system Many branches set their own all time high for wire cuts Supply Chain Product shortages and other supply chain disruptions kept Viking Electric teams busy again in 2022 With a focus on providing a positive customer experience the Materials and Sales Teams worked together with suppliers to procure suitable alternate products and solutions Operations Teams across all locations worked diligently to make room for increased inventory levels These associates demonstrated our values of excellence and commitment working long hours and often shorthanded to receive pick pack ship and deliver to our customers Delivery Stops 474 373 10 11
Organizational Changes PERFORMANCE Regional Operations Restructuring As we continue to strive for growth through density and geographic reach it is imperative that we set in place a structure that prepares us for future success In 2022 the Operations function was reorganized into three regions with a Regional Operations Manager supporting each region The new model is designed to support Viking Electric s current network model and prepare for potential future geographic expansion in all three regions 41 000 Total Square Feet Facility 32 500 Square Feet Warehouse 6 000 Square Feet Office Director of Sales Operations Priorities Sales Key Performance Indicators Sales training and onboarding efforts Tim Noll Manager Regional Operations North Region Brandon Bruette Manager Regional Operations Central Region 2 500 Mike Lelo Manager Regional Operations East Region Square Feet Counter Director of Sales Operations Wausau Move Wausau moved into a new building the weekend of April 23 24 2022 almost doubling the existing warehouse space This is a great opportunity for our Wausau market to grow expand services and better serve customers Associates from across the organization helped during move in weekend so the team could open their doors first thing on Monday April 25th Steve Sass was named the first Director of Sales Operations Servicing the changing needs of our customers requires us to work closely across functions optimize technology and systems and continuously develop and enhance our support to customers and our sales team Support customer needs and organizational goals Deployment of sales software tools and technology SSM Dynamics Eclipse and Job Management Steve Sass Director of Sales Operations Milwaukee There was a grand opening celebration on June 2 2022 where customers suppliers and associates gathered to celebrate the new facility 12 13
Our Mission Use our knowledge skills and passion to craft and deliver exceptional services and logistical solutions for our customers Sales Growth 757 3 633 7 Setting New Financial Records 467 2 476 5 2018 2019 502 4 2020 2021 2022 Sales in Millions Other 28M Industrial MRO 68 3M Industrial OEM 78 6M Contractor 582 5M Total Sales 757 3M 14 15
Our People EPEC Graduates PEOPLE Three associates completed EPEC training in 2022 Thomas Jech Account Representative Rochester Associate Overview Adam Nelson Counter Sales Rochester Nicholas Komorowski Account Representative Milwaukee 174 251 Total Associates Onboarded EPEC Silver Total Job Changes 76 56 52 55 60 59 40 27 30 Under 35 Q1 Q1 Q2 Q2 New New Associates Associates Q3 Q3 Drew Hagen was honored as a rising star in the electrical industry by tED Magazine Q4 Q4 Drew joined Viking Electric in 2007 starting in the warehouse He was quickly promoted to a City Desk position and then to manager of the St Paul location In 2021 after the St Paul City Desk closed Drew became the first embedded Account Representative to support the continued growth of the Twin Cities Contractor Group Job Job Changes Changes DREW HAGEN Store Manager Minneapolis 16 17 In addition to participating in countless factory and manufacturer trainings Drew serves on Viking Electric s safety committee and has completed NAED Inside Sales Pro and NAED Bottom Line Basics
PEOPLE PEOPLE Employee Resource Groups WATT WOMEN ADVOCATING TODAY FOR TOMORROW Viking Electric s WATT Chapter was launched in September 2021 and hosted many events throughout 2022 The mission of WATT is to empower all women at Viking Electric to achieve success on their own terms WATT strives to provide opportunities for women to connect with and support each other The group offers programs and resources that contribute to the personal and professional development of women meeting their needs at the right time in the right way Employee Resource Groups or ERGs are voluntary employee led groups made up of individuals who join together based on common interests backgrounds or demographic factors such as gender race LGBTQ veteran status or ethnicity They give associates opportunities to be heard and valued by their peers and executive leadership support professional development and strengthen our business impact both internally and externally ERGs are a great way to include everyone in discussions about ways of working and work environments as well as to create feedback loops for our leaders A t Viking Electric there are currently two ERGs Emerging Professionals ERG CONNECT and Women s ERG WATT Women s Community OPEN TO ALL WOMEN OF VIKING ELECTRIC WATT s monthly community meetings provide a safe space for women to connect and develop and build a supportive community where important matters can be discussed openly authentically and without fear Favorite topics of 2022 include personal finance wellness career growth and many more SONEPAR USA ERGS In addition to Viking Electric chapters associates are also invited to participate in nationwide ERGS at Sonepar USA AAERG African American ERG AAPI Asian American Pacific Islander CONNECT Hispanos Unidos PRIDE LGBTQ ERG WATT Keynote Speakers DIRK BEVERIDGE Being Unapologetically You CONNECT This webinar event in March 2022 included inspirational key messages about leading from any position that you are in You are not just anything you are a valued member of the Viking Electric team EMERGING PROFESSIONALS ERG The Viking Electric CONNECT chapter was announced in late 2022 with a focus on giving emerging professionals the tools to thrive while also bridging the gap between generations in the workforce While CONNECT s goal is to build a community among emerging professionals all generations are encouraged to participate and promote a culture of inclusion for all associates ALISON FRAGALE Being Your Own Best Advocate Alison s webinar in October discussed the science behind the gender disparity in advocacy and provided strategies to effectively ask for what you want She discussed how women can struggle advocating for themselves but are highly successful in advocating for others Dirk Beveridge Book Club JENNIFER PHARR DAVIS Becoming Odyssa Becoming Odyssa is about Jennifer Pharr Davis trip hiking along the almost 2 200 mile Appalachian Trail after graduating from college Participants received a personally signed copy of the book and joined in on a final discussion featuring the author Jennifer Pharr Davis 18 19 Alison Fragale
Safety PEOPLE SAFETY FOCUS COMMUNICATIONS Monthly Safety Focus eNewsletter Proper Lifting Video Warehouse Banners Safety Flashes Test Your Knowledge Quizzes Good Catch Starting April 1 2022 Viking Electric implemented a safety recognition program called Good Catch to positively acknowledge associates who exhibit safe behaviors in the workplace Associates submit a recognition nomination form when they catch a colleague doing something good from a safety perspective The winning criteria for this program includes three categories 75 Good Catch Safety Recognition Awards Positive safety observation Safety innovation leadership participation Our Vision Positive safety intervention Good Catch Winners 600 Safety Topic Quizzes Submitted 26 Reduction in total OSHA Recordable injuries vs 2021 To be the indispensable electrical supply chain partner central to our customers success 20 21
Internal Communications PEOPLE Viking Electric believes that workplace communication is critically important to ensure our associates are engaged involved and informed about our company However internal communication consistently scored low on previous associate engagement surveys As a result a dedicated team of associates was formed to help improve our internal communications and several new communication initiatives were introduced in 2022 Stay tuned for the roll out of additional communications initiatives in 2023 The Circuit We introduced The Circuit a new digital newsletter that is emailed to associates each month The Circuit includes stories articles and videos and provides associates with updates and valuable information about Viking Electric and Sonepar SLT in 3D In an effort to reconnect to associates the Strategic Leadership Team SLT visited all branches and departments across the organization throughout the year This was an opportunity to hear firsthand from the SLT about what is happening in the organization and ask questions SLT IN 3D TOPICS INCLUDED Change Transition Employee Resource Groups Financial Results Growth Ambitions Why Digital Q A Sessions Internal Screens In 2022 as a result of the internal communications team s recommendations Viking Electric installed TV monitors in associate breakrooms and or warehouses to provide our warehouse associates and drivers with improved access to important information safety reminders and company updates Brian Highlander visiting Green Bay Stacy Stanslaski and Birgitte Noble visiting Grand Rapids 22 23
Community Involvement All Branches Local Food Drive PLANET Throughout the month of November Viking Electric gave thanks by giving back All branches collected food donations for their local food banks WATT Power Girls Girl Scout Camp Viking Electric s WATT Chapter lead a half day program related to project management for a small group of Girl Scouts who wanted to learn more about the trades and the electrical industry Chicagoland Kenneth Young Center Adopt a Family Eau Claire Oshkosh Green Bay Cory Smith and Adam Schilling with donations for Eau Claire School District Dave Gawaresky dropped off donations at the Omro Fire Police Department Vince Hall and Troy Schleis with the food that they donated to Paul s Pantry Many gifts were donated to make the holidays brighter for local families and individuals Green Bay Coats for Kids Terry Kropp and Joe Weber spearheaded a collection for a local seasonal Salvation Army program Coats for Kids at the Green Bay and Sturgeon Bay stores Forty coats and some snow pants were collected during the drive Chicagoland Powering Chicago Special Olympics Picnic Our customer McWilliams Electric Company hosts an annual Special Olympics Construction Picnic in Chicagoland Viking Electric hand sanitizers were provided to the athlete s goodie bags and an associate was able to volunteer at the event Twin Cities Hearts Hammers In September 2022 several associates partnered with RAB Lighting and Rouzer Group to help improve a home in our community with Hearts Hammers Hearts Hammers assists low income homeowners struggling with deteriorating home exteriors 24 25
Sustainability PLANET eMobility Specialist Robert Hoke was hired as Viking Electric s first eMobility Specialist Robert brings extensive industry experience to the Viking Electric energy services team and solid working relationships with industry professionals customers and suppliers alike Robert Hoke eMobility Specialist Minneapolis Be Viking Electric s Subject Matter Expert on all things electric vehicles and electric vehicle charging Sustainability Leadership Committee Train sales teams Educate customers The Sustainability Leadership Committee SLC has continued to work throughout the year on many different sustainability initiatives The SLC sent a survey to associates in the first quarter to gain insight about what associates are currently doing to promote sustainability and any ideas they have for future sustainability projects Work with Viking Electric leadership to determine strategy Where do we find opportunities How do we close opportunities Identify manage supply partner relationships DO YOUR PART ROLL OUT Do Your Part is an initiative to create consistent and optimized recycling efforts in our branch locations including recycling bin types labels and bin layouts Since 2020 we have piloted Do Your Part in several branches and we implemented the program in several more branches in 2022 with a goal for implementation in all branch locations in early 2023 DIVERSION RATE In late 2021 software was implemented to measure the percentage of total waste that is diverted from trash commonly known as a diversion rate In 2022 Viking Electric was able to get a full year of diversion rate measurements with a goal that all branch locations have a diversion rate of over 50 by mid year 2023 Diversion rates can be improved by reducing raw materials used adding recycling streams recycling when applicable and reusing materials Diversion Rate 45 Madison Green Bay La Crosse Sheboygan Eau Claire Rochester Mankato Minneapolis EV Sprinter Van An EV Sprinter Van has arrived in Minneapolis and will be used in multiple areas of the business and as a pilot for our first electric vehicle Keep an eye out for our new EV van as it makes appearances at other locations in the future 26 27 Do Your Part Roll Out Completed Minneapolis Mankato Rochester La Crosse Wausau Blaine Burnsville
VIKING ELECTRIC Corporate Headquarters 451 Industrial Blvd NE Minneapolis MN 55413 800 435 3345 vikingelectric com