Genuine Parts Company · NYSE:GPC
Genuine Parts — Q2 2021 Earnings Presentation
29 slides from Genuine Parts's earnings presentation, Jul 22, 2021
Slide 1: Q2 2021 Earnings Presentation
Q2 2021 Earnings Presentation July 22, 2021
Slide 2: Genuine Parts Company Snapshot (NYSE: GPC)
Genuine Parts Company Snapshot (NYSE: GPC) KEY STATISTICS1 GLOBAL FOOTPRINT TTM Revenue by Region1 Founded 1928 Headquarters Atlanta, GA Countries Served 14 Locations 10,538 • Warehouses 878 • Distribution Facilities 189 • Retail (Owned/Independent) 9,471 74% 15% North Europe Employees ~52,000 Ameri
Slide 3: Safe Harbor Statement
Safe Harbor Statement FORWARD-LOOKING STATEMENTS: Some of the comments made during this conference call and information contained in our presentation constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All stat
Slide 4: Q2 Highlights
Q2 Highlights Paul Donahue Chairman & CEO
Slide 5: Key Messages
Key Messages Strong financial performance driven by consistent execution of strategic priorities 01 and global market recovery 02 Continued strong sales trends that drove market share gains Gross margin gains and improved operational efficiencies that drove margin 03 expansion and record quarterly e
Slide 6: 2Q21 Performance Highlights
2Q21 Performance Highlights1 • $4.8B Total Sales, +25.1% ✓ Monthly daily sales2 trends strengthened in May/June from April ✓ Automotive recovery driven by re-opening of economies, improving miles driven and strong DIFM sales growth Financial ✓ Industrial recovery driven by strengthening economy, re-
Slide 7: Automotive: Highlights, Trends and Initiatives
Automotive: Highlights, Trends and Initiatives Automotive – Total sales +28% Comp Sales1 +21%; 2-Year Stack +8.5%; Segment Profit Margin +30 bps MACRO NORTH AMERICA EUROPE AUSTRALASIA • Tailwinds: • U.S. Comp Sales1 +20% • Comp Sales1 +34% • Comp Sales1 +17% − Broad economic recovery and strong − +6
Slide 8: Industrial: Highlights, Trends and Initiatives
Industrial: Highlights, Trends and Initiatives Industrial – Total sales +20% Comp Sales1 +16%; 2-Year Stack Flat; Segment Profit Margin +130 bps MACRO NORTH AMERICA AUSTRALASIA • Continued improvement in Industrial sales trends • Strengthening industrial economy and growth • Strong sales growth and
Slide 9: Strategic Initiative Update
Strategic Initiative Update Will Stengel President
Slide 10: Investing in Our Core Business
Investing in Our Core Business Talent Sales Effectiveness Digital Supply Chain Emerging Technology • Recognize high potential • Utilize data and analytics • Deliver a best-in-class • Ensure we have the • Aspire to lead in talent, infuse new to understand our unique customer experience and “right” pr
Slide 11: Strategic Priorities: Q2 Select Highlights
Strategic Priorities: Q2 Select Highlights • Focused on talent investments: ✓ Naveen Krishna, EVP and Chief Information & Digital Officer ✓ Category management; field sales and services; indirect sourcing; pricing; diversity, equity and inclusion; digital; data; and inventory leadership • Strategic
Slide 12: Financial Performance
Financial Performance Carol Yancey EVP & CFO
Slide 13: 2Q21 Financial Results
2Q21 Financial Results ($M, except per share data) Sales Adj. Gross Profit1 Adj. Op/Non-Op Expenses1 Segment Profit1 Adj. EPS1 +25.1% +29.6% +27.5% +34.6% 20.0% +31.8% 19.0% $1,900 40.0% $4,784 $1,689 70.0% 69.0% 68.0% $500 $441 18.0% $1,342 67.0% $1.74 66.0% 65.0% 17.0% $1,700 39.0% 64.0% $1,400 63
Slide 14: 2Q21 Segment Performance
2Q21 Segment Performance ($M) Automotive Industrial Sales Segment Profit1 Sales Segment Profit1 +28.1% +32.8% +19.6% +38.1% $180 20.0% $350 20.0% $1,587 $3,196 $300 $291 18.0% $160 $150 18.0% 16.0% 16.0% $1,327 $140 $2,496 $219 $250 14.0% 14.0% $120 $109 12.0% 12.0% $200 9.1% $100 9.5% 8.8% +30 bps
Slide 15: Strong Balance Sheet and Robust Cash Generation
Strong Balance Sheet and Robust Cash Generation BALANCE SHEET HIGHLIGHTS1 ($B) LIQUIDITY PROFILE1 ($B) DEBT MATURITY SCHEDULE1 ($M) Cash / Cash Equivalents $1.0 Total Credit Capacity3 $4.0 2.35% 2Q21 Average Interest Rate $854 Accounts Receivable $1.9 Less Total Debt: ($2.5) Inventory $3.7 Unused Cr
Slide 16: Disciplined Capital Allocation
Disciplined Capital Allocation YTD 2021 Capital Deployment Current Priorities Reinvestment 16% • $90M CapEx YTD; Projecting 2021 CapEx of ~$300M 31% M&A • $97M spend YTD; Targeting additional acquisitions ~$600M1 Share Repurchases 38% • $184M spend YTD; 1.4M shares repurchased and plans for continue
Slide 17: 2021 Outlook
2021 Outlook1 Current Previous Total Sales Growth 10% to 12% 5% to 7% • Automotive 11% to 13% 5% to 7% • Industrial 6% to 8% 4% to 6% Diluted EPS $5.81 to $5.96 $5.85 to $6.05 Adjusted EPS $6.20 to $6.35 $5.85 to $6.05 Adjusted EPS Growth 18% to 20% 11% to 15% Cash from Operations $1.2B to $1.4B $1.
Slide 18: Optimistic for Strong Results in Quarters Ahead
Optimistic for Strong Results in Quarters Ahead Progress in capturing profitable growth, generating strong cash flow and driving shareholder value Encouraged by continued recovery of the Automotive and Industrial business markets Exceptional balance sheet providing financial flexibility to pursue st
Slide 19: Q&A
Q&A
Slide 20: Appendix
Appendix
Slide 21: Consolidated Net Sales and Adj. Diluted EPS Bridge
Consolidated Net Sales and Adj. Diluted EPS Bridge Appendix A Net Sales ($M) Adj. Diluted Earnings Per Share GPC 2Q21 EARNINGS PRESENTATION | 21
Slide 22: 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 23: Segment Data
Segment Data Appendix C 2021 2021 2020 (in thousands) TTM Q2 Q1 Q2 Q1 Q2 Q3 Q4 Net sales: Automotive $ 11,931,675 $ 2,953,165 $ 3,196,299 $ 2,582,685 $ 2,495,799 $ 2,960,379 $ 2,821,832 Industrial 5,938,457 1,511,549 1,587,439 1,509,841 1,327,428 1,409,707 1,429,762 Total net sales 17,870,132 4,464,
Slide 24: Explanation of Adjustments
Explanation of Adjustments Appendix D (1) Product liability damages award: Adjustment reflects damages reinstated by the Washington Supreme Court order on July 8, 2021 in connection with a 2017 automotive product liability claim. (2) Goodwill Impairment Charge: Adjustment reflects a second quarter g
Slide 25: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Appendix D Adjusted Net Income from Continuing Operations 2021 2021 2020 (in thousands) TTM Q2 Q1 Q2 Q1 Q2 Q3 Q4 GAAP net income (loss) from continuing operations 818,756 217,710 196,496 122,346 (363,501) 232,918 171,632 Adjustments: Product liability da
Slide 26: Reconciliation of Non-GAAP Financial Measures (Cont.)
Reconciliation of Non-GAAP Financial Measures (Cont.) Appendix D Adjusted EBIT and Adjusted EBITDA 2021 2021 2020 (in thousands) TTM Q2 Q1 Q2 Q1 Q2 Q3 Q4 GAAP net income (loss) from continuing operations $ 818,756 $ 217,710 $ 196,496 $ 122,346 $ (363,501) $ 232,918 $ 171,632 interest expense, net 79
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Adjusted Gross Profit Three Months Ended June 30, QTD Change (in thousands) 2021 2020 $ Change % Change GAAP Gross Profit $ 1,689,105 $ 1,290,487 $ 398,618 30.9% Adjustments: Transaction and other costs — 12,891 (12,891) (100.0)% Total Adjustments (1) —
Slide 28: Reconciliation of Non-GAAP Financial Measures (Cont.)
Reconciliation of Non-GAAP Financial Measures (Cont.) Appendix D Adjusted Operating and Non-Operating Expenses Three Months Ended June 30, QTD Change (in thousands) 2021 2020 $ Change % Change GAAP operating and non-operating expenses $ 1,419,498 $ 1,594,923 $ (175,425) (11.0)% Adjustments: Product
Slide 29: Reconciliation of Non-GAAP Financial Measures (Cont.)
Reconciliation of Non-GAAP Financial Measures (Cont.) Appendix D Free Cash Flow (in thousands) TTM June 30, 2021 Net cash provided by operating activities $ 1,798,232 Less: Purchases of property, plant and equipment (169,137) Free Cash Flow $ 1,629,095 Updated Outlook YE December 31, 2021 Net cash p
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