Lkq Corporation · NASDAQ:LKQ
Lkq — Investor Presentation (September 2019)
20 slides from Lkq's investor presentation, Sep 10, 2019
Slide 1: European Segment Business Update: "1 LKQ Europe"
European Segment Business Update “1 LKQ Europe” September 10, 2019
Slide 2: Forward Looking Statements and Financial Measures
Forward Looking Statements and Financial Measures Statements and information in this presentation that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are made pursuant to the “safe harbor” provisions of such Act. Forwa
Slide 3: Agenda
Agenda • “1 LKQ Europe” • New LKQ Europe Leadership • Path to Sustainable Double-Digit Margins • Transformation Costs and Sources of Funding • Testimonials • Q&A 3
Slide 4: Mission Statement
Mission Statement “ To be the leading global value-added distributor of vehicle parts and accessories by offering our customers the most comprehensive, available and cost effective selection of part solutions while building strong partnerships with our employees and ” the communities in which we ope
Slide 5: LKQ Europe – The market leader
LKQ Europe – The market leader $6.0 B ~700,000 Estimated revenue in 2019 Independent Wholesale Customers 21* #1 ~1,100 Countries with LKQ locations in Ranking Europe in Europe locations > 27,000 >500,000 Employees throughout Europe Unique SKU’s * Includes countries where Mekonomen, of which LKQ owns
Slide 6: "1 LKQ Europe"
“1 LKQ Europe” Maintain Strong 21 Different Unchanged Customer … In the Hands of Entrepreneurial Countries Experience…. Local Managers Culture 29 ERP 50 Customer Systems Portals 24 Financial Systems 15 E-mail 90 Private Transformation Systems Label Brands 38 Phone 10 Systems Catalogues Fragmented Pr
Slide 7: Segment EBITDA margin progress since Q1 2018
Segment EBITDA margin progress since Q1 2018 Impact of the Initiatives: Q1’18 vs. Q2’19 0.3% -0.5% 0.1% 0.3% 0.1% -0.4% -0.3% 1.1% -0.2% 7.7% 7.3% Q1 2018 T21 Andrew Page Procurement Catalogue Other Market Impact2 Working Transformation Stahlgruber Q2 2019 Segment Day Effect Costs3 Impact4 Segment E
Slide 8: Arnd Franz - Chief Executive Officer, LKQ Europe
Arnd Franz - Chief Executive Officer, LKQ Europe* Prior to joining LKQ Europe, Arnd served as Corporate Executive Vice President and Member of the Management Board of MAHLE Group. MAHLE is an automotive parts manufacturer based in Stuttgart, Germany with over €12 billion in annual sales. At MAHLE, A
Slide 9: Arnd Franz – First 150 days observations
Arnd Franz – First 150 days observations Accomplishments • Unique growth story from acquisitions • Market slow but LKQ gaining share in most markets • Transition to consolidated procurement initiated with significant further opportunities • Product management: Activities ready for implementation • M
Slide 10: Representative benefits from LKQ Europe initiatives
Representative benefits from LKQ Europe initiatives LKQ is uniquely positioned to leverage its scale and capabilities in Europe Revenue Procurement Private Label ERP Optimization Revenue Impact Complexity Reduction Cost Reduction Customer Value Leveraging LKQ Scale Positive Impact Minimal Impact 10
Slide 11: Where we believe LKQ Europe can be in 2021 and beyond
Where we believe LKQ Europe can be in 2021 and beyond LKQ Europe: Path to Sustainable Double Digit Segment EBITDA Margin Initiatives’ Benefit Post 2021 0.6% -0.3% 0.3% 11.1% • Procurement 2.2% 0.2% 0.1% -0.5% • Private Label 2 • Centralization and Shared 1.9% More details on the Services following p
Slide 12: Expected benefit of initiatives
1 Expected benefit of initiatives LKQ Europe Initiatives’ Expected Segment EBITDA Benefit 2019 - 2021 0.6% 2.2%1 0.5% • LKQ Supplier Rebates 0.5% • Indirect Spend Reduction • T2 • Pan-European 0.5% 0.3% • Andrew Page Supplier Pricing Integration • Big Data • Other Local 0.4% Initiatives 1.9% 0.8% •
Slide 13: Growing Market with Aging Fleet
2 Growing Market with Aging Fleet Parc Size 1 2 Expected Organic Growth for LKQ LKQ Europe Footprint Age of Fleet Europe 2020-2025 CAGR (millions) Germany 47.1 9.3 2.5% United Kingdom 36.0 7.8 Netherlands 8.6 10.4 Italy 39.0 10.8 1.5% CEE Region3 49.3 14.2 2020 - 2025 CAGR LKQ Europe Coverage 180.0
Slide 14: Expected margin progression through 2021
Expected margin progression through 2021 Expected European Segment EBITDA Margin 11.1% 9.2% 8.1% 8.3% 9.5% 7.8% 8.5% -0.5% -0.6% -0.3% -0.7% -0.8% 2018A 2019F 2020F 2021F Expected Segment EBITDA Margin Including Transformation Cost Potential Range for Segment EBITDA Including Transformation Cost Exp
Slide 15: "1 LKQ Europe" Program Costs
“1 LKQ Europe” Program Costs Expected Cash Outlays 2019 – 2021 in $M1 Cost Definitions Previously Announced: • Transformation-related opex: Period costs incurred to • Estimated restructuring charges of ~$20- $23M for cost reduction initiatives execute the “1 LKQ Europe” project that are classified •
Slide 16: Funding of Transformation
Funding of Transformation Cash Flow Considerations Vendor Financing Program - Update • Trade Working Capital (TWC) • European segment’s annual direct spend is approximately $3.6 billion with ~1,800 improvement in Europe launched as suppliers with annualized spend >$23,000 a key objective in 2019, pr
Slide 17: Supplier Testimonials
Supplier Testimonials “ The European automotive aftermarket is expected to face technology and geographical developments that will push both, distributors and manufacturers to shift toward stronger partnerships supporting the digitization of channels and interface. The strategy of LKQ in combination
Slide 18: Customer Testimonials
Customer Testimonials “ As an online retailer with an extensive "long-tail" of product we offer our customers, Kfzteile24 wishes for competent and available parts assortments from its suppliers. The efficiency of LKQ in the procurement of ordered particles is best in class and far above average. Fro
Slide 19: Customer Testimonials
Customer Testimonials “ In November 2018 we moved our roadside parts supply to Euro Car Parts. The initial transition took place as we entered our busiest period, given the nature of our business it had to be seamless. Thanks to the professional and supportive approach taken by all levels from Branc
Slide 20: Questions and Answers
Questions and Answers BEoreary ELiT QoTRD SATQR /éf STAHLGRUBER eaLKQ