Genuine Parts Company · NYSE:GPC
Genuine Parts — Q2 2022 Earnings Presentation
27 slides from Genuine Parts's earnings presentation, Jul 27, 2022
Slide 1: Q2 2022 Earnings Presentation
Q2 2022 Earnings Presentation July 27, 2022
Slide 2: Genuine Parts Company Snapshot
Genuine Parts Company Snapshot Key Statistics1 Global Footprint Founded 1928 TTM 2022 Revenue by Region1 Headquarters Atlanta, GA Countries Served 17 Locations ~10,580 • Warehouses ~825 • Distribution Facilities ~200 • Retail (Owned/Independent) ~9,555 75% 15% North Europe America Employees ~53,000
Slide 3: Safe Harbor Statement
Safe Harbor Statement FORWARD-LOOKING STATEMENTS: Some statements in this presentation, as well as in other materials we file with the Securities and Exchange Commission (SEC), release to the public, or make available on our website, constitute forward-looking statements that are subject to the safe
Slide 4: Paul Donahue, Chairman & CEO
Paul Donahue Chairman & CEO <GPE)
Slide 5: Key Messages
Key Messages ✓ The GPC team had another record quarter, consisting of double-digit sales and earnings increases and a steady cadence of continued growth throughout April, May and June ‒ Total sales were $5.6 billion, up 17%, and adjusted earnings per share1 was $2.20, up 26% from last year ✓ Operati
Slide 6: Q2'22 Performance Highlights
Q2’22 Performance Highlights Total Sales Segment Profit Adjusted Diluted EPS1 +17.1% ($M) +24.2% ($M) +26.4% $5,602 $4,784 $548 $2.20 $441 $1.74 9.8% +60 bps 9.2% Q2’21 Q2’22 Q2’21 Q2’22 Q2’21 Q2’22 • Another quarterly sales record for GPC • Segment operating margin expansion in • Record quarterly e
Slide 7: Performance Drivers
Performance Drivers M&A Strategy Strategic Initiatives Industry Tailwinds • Acquisition of KDG • Benefiting from the NAPA brand Automotive: – Meaningful impact on our rollout in Europe and • Continued increase in miles Industrial segment Australasia driven and the average age of • Strategic bolt-on
Slide 8: Environmental, Social and Governance
Environmental, Social and Governance E Focus Areas for 2022 Carbon Emissions Reduction / Focus on Climate Change S Environmental • Global carbon footprint is measured • Formalize carbon emission reduction strategy • Focus on energy efficiency GGovernance Social We will be an active caretaker of our
Slide 9: Will Stengel, President
Will Stengel President <GPE)
Slide 10: Foundational Priorities for Investing in Our Business
Foundational Priorities for Investing in Our Business Talent & Culture Sales Effectiveness Technology Supply Chain Emerging Technology • Recognize high • Utilize data and • Enhance data and • Ensure we have the • Aspire to lead in potential talent, infuse analytics to digital capabilities to “right”
Slide 11: Q2'22 Automotive Performance
Q2’22 Automotive Performance Sales Segment Profit2 North America +8.5% ($M) +10.9% ($M) • Total U.S. Sales +11%; +30% 2-Year Stack − +7% comp sales1; +27% 2-Year Stack $3,467 • Strong DIFM and DIY sales $400 $3,196 $350 $323 − Steady strength across commercial accounts $300 $291 − B2C digital invest
Slide 12: Q2'22 Industrial Performance
Q2’22 Industrial Performance Sales Segment Profit2 North America and Australasia +34.5% ($M) +49.9% ($M) • Sales cadence was consistently strong throughout the quarter • Double-digit sales growth across virtually all product categories and major industries served $300 $2,135 $250 $225 • Customers co
Slide 13: Bert Nappier, EVP & CFO
Bert Nappier EVP & CFO <GPE)
Slide 14: Q2 2022 Financial Results
Q2 2022 Financial Results ($M, except per share data) Sales Gross Profit Adj Op/Non-Op Expenses1 Segment Profit3 Adj Diluted EPS1 +17.1% +16.1% +15.2% +24.2% +26.4% $5,602 $1,961 $600 10.9% $548 $2,000 36.0% $1,600 $1,546 28.7% $2.20 $4,784 $1,689 $1,800 $1,400 $1,342 28.5% $500 10.4% $1,600 $1,200
Slide 15: Strong Balance Sheet and Robust Cash Generation
Strong Balance Sheet and Robust Cash Generation Balance Sheet Highlights1 ($B) Liquidity Profile1 ($B) Debt Maturity Schedule1 ($M) Cash / Cash Equivalents $0.5 $1,293 Total Credit Capacity3 $4.8 2.34% Q2 2022 Average Interest Rate Accounts Receivable $2.2 Less Total Debt: ($3.3) Inventory $4.3 Unus
Slide 16: Effective Capital Allocation
Effective Capital Allocation YTD 2022 Capital Deployment Key Priorities Reinvestment • $153M CapEx YTD 6% 11% • Projecting 2022 spend of ~$300M to $350M 7% Share Repurchases 12% • 50M spend for ~377K shares in Q2; $123M spend for ~943K shares YTD ~$2.1B • Plans for additional share buy-backs M&A / K
Slide 17: 2022 Outlook
2022 Outlook1 Current Previous Total Sales Growth 12% to 14% 10% to 12% • Automotive 6% to 8% 5% to 7% • Industrial 26% to 28% 21% to 23% Diluted EPS $8.08 to $8.23 $7.56 to $7.71 Adjusted Diluted EPS $7.80 to $7.95 $7.70 to $7.85 Adjusted EPS Growth 13% to 15% 11% to 14% Cash from Operations $1.5B
Slide 18: Q&A
Q&A
Slide 19: Appendix
Appendix 19
Slide 20: Consolidated Net Sales and Adj Diluted EPS Bridge
Consolidated Net Sales and Adj Diluted EPS Bridge Appendix A Net Sales ($M) Adj Diluted Earnings Per Share $422 $5,602 ($154) $550 $0.42 $2.62 $0.85 $2.20 $4,784 $1.35 Q2’21 Core Sales Acquisitions FX & Other Q2’22 Q2'21 GAAP Core Q2'22 Adjustments Q2'22 GAAP EPS Operations Adj. Diluted EPS EPS GPC
Slide 21: Other Information
Other Information Appendix B Comparable Sales: Comparable sales or “comp sales” refer to period-over-period comparisons of our sales excluding the impact of acquisitions, divestitures and foreign currency. The Company considers this metric useful to investors because it provides greater transparency
Slide 22: Segment Data
Segment Data Appendix C 2022 2022 2021 (in thousands) TTM Q1 Q2 Q1 Q2 Q3 Q4 Net sales: Automotive $ 13,137,782 $ 3,275,621 $ 3,467,494 $ 2,953,165 $ 3,196,299 $ 3,204,534 $ 3,190,133 Industrial 7,381,325 2,019,014 2,134,920 1,511,549 1,587,439 1,614,315 1,613,076 Total net sales 20,519,107 5,294,635
Slide 23: Explanation of Adjustments
Explanation of Adjustments Appendix D (1) Loss on software disposal: Adjustment reflects a loss on an internally developed software project that was disposed of due to a change in management strategy related to advances in alternative technologies. (2) Product liability damages award: Adjustment ref
Slide 24: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Appendix D Adjusted Net Income 2022 2022 2021 (in thousands) TTM Q2 Q1 Q2 Q1 Q2 Q3 Q4 GAAP net income $ 1,102,951 $ 245,838 $ 372,529 $ 217,710 $ 196,496 $ 228,585 $ 255,999 Adjustments: Loss on software disposal (1) 61,063 — — — — 61,063 — Product liabi
Slide 25: Reconciliation of Non-GAAP Financial Measures (Cont.)
Reconciliation of Non-GAAP Financial Measures (Cont.) Appendix D Adjusted EBIT and Adjusted EBITDA 2022 2022 2021 (in thousands) TTM Q2 Q1 Q2 Q1 Q2 Q3 Q4 GAAP net income $ 1,102,951 $ 245,838 $ 372,529 $ 217,710 $ 196,496 $ 228,585 $ 255,999 Interest expense, net 68,562 19,850 20,248 18,324 15,362 1
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Appendix D Adjusted Operating and Non-Operating Expenses Three Months Ended June 30, QTD Change (in thousands) 2022 2021 $ Change % Change GAAP operating and non-operating expenses $ 1,469,232 $ 1,419,498 $ 49,734 3.5% Adjustments: Product liability dama
Slide 27: Reconciliation of Non-GAAP Financial Measures (Cont.)
Reconciliation of Non-GAAP Financial Measures (Cont.) Appendix D Free Cash Flow (in thousands) TTM Ended June 30, 2022 Net cash provided by operating activities $ 1,344,840 Less: Purchases of property, plant and equipment (329,119) Free Cash Flow $ 1,015,721 Updated Outlook Year Ended December 31, 2
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