Standard Motor Products, Inc. · NYSE:SMP
Standard Motor Products — Q4 2023 Earnings Presentation
34 slides from Standard Motor Products's earnings presentation, Feb 22, 2024
Slide 1: Standard Motor Products, Inc. Q4 2023 Investor Presentation
Standard Motor Products, Inc. Q4 2023 Investor Presentation 1
Slide 2: Safe Harbor – Forward Looking Statements
Safe Harbor – Forward Looking Statements You should be aware that except for historical information, the matters discussed herein are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements, including projections and anticipat
Slide 3: SMP Corporate Snapshot
SMP Corporate Snapshot Founded:1919 2023 Sales Mix by Segment 2023 EBITDA* Mix by Segment HQ: Long Island City, NY Temperature Temperature Control 16% Control 25% Vehicle Locations: 33 Globally Vehicle Control 61% Control 54% Employees: 6,000* Engineered Solutions 23% Engineered Solutions 2023 Finan
Slide 4: Global Footprint with Customer Adjacency
Global Footprint with Customer Adjacency 4
Slide 5: Strategy Overview
Strategy Overview 5
Slide 6: Strategic Objectives
Strategic Objectives Sustainability & Automotive Aftermarket Engineered Solutions Capital Allocation Continuous Improvement • Continued leadership in North • Innovative product solutions for • Commitment to ongoing ESG • Capital investment supports American Aftermarket multiple On-Highway and Off- a
Slide 7: Aftermarket Snapshot
Aftermarket Snapshot $175 Aftermarket Net Sales Aftermarket EBITDA* & % Net Sales $1,200 $147 $150 $1,102 $1,076 $134 $1,062 $124 $130 $1,000 $965 $985 $969 $125 $110 $107 Millions $100 Millions $800 $75 $600 12.6% 13.9% 13.8% $50 11.1% 11.8% 10.2% $400 $25 2018 2019 2020 2021 2022 2023 2018 2019 20
Slide 8: Aftermarket Strategy Value Proposition
Aftermarket Strategy Value Proposition To be the best full-line, full-service supplier of premium vehicle control and temperature control products Our suite of products and services is designed to provide all the needed support for our customer and the technicians who install our parts 8
Slide 9: Favorable Aftermarket Industry Trends
Favorable Aftermarket Industry Trends Number of Repairable Vehicles Continue to Climb Car Parc Continues to Age 290 U.S. Light Vehicle Parc 284 Average Vehicle Age +3% increase 12 12.1 12.2 12.5 258 260 Millions 8 Years 230 4 200 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2015 2016 2017 2018 201
Slide 10: Committed to Growing Technologies
Committed to Growing Technologies ADVANCED INTERNAL COMBUSTION ENGINE COMPONENTS ADVANCED HEV, EV, AND POWERTRAIN-NEUTRAL COMPONENTS ALTERNATIVE ADAS ENERGY SMP evolves to meet the advanced automotive POWER MANAGEMENT technology of today and tomorrow HVAC SENSORS DEGREE OF COMPLEXITY VEHICLE ACTUATO
Slide 11: Vehicle Control Segment
Vehicle Control Segment Ignition, Emission & Fuel Electrical & Safety Wire Sets & Other Powertrain Neutral, ICE-Related1 Hybrid & EV Specific ICE-Related Traditional and Advanced ICE Categories Growing categories used on all vehicles Conventional Wire & Cable categories for • Variable Valve Timing C
Slide 12: Temperature Control Segment
Temperature Control Segment Favorably Impacted by Electrification • Most product categories are powertrain-neutral or electrification-specific • A/C Compressors transition to year-round operation (battery cooling) A/C System Components Other Thermal Components Most interior heating and cooling compo
Slide 13: Engineered Solutions Snapshot
Engineered Solutions Snapshot Engineered Solutions Net Sales Engineered Solutions EBITDA* & % Net Sales $40 $33 $283 $30 $30 $300 $270 $30 $237 Millions Millions $200 $20 $19 $153 $159 $15 $15 $127 $100 $10 11.7% 11.8% 12.7% 11.3% 11.5% 10.2% $0 $- 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2
Slide 14: Engineered Solutions Opportunities
Engineered Solutions Opportunities Market Expansion Diversification Growth Collaboration Broadens the Company’s Diverse end markets, Sales driver as new Supports and expands target opportunities across geographies, and Increasing segment has potential for Demand SMP’s Aftermarket multiple industries
Slide 15: Engineered Solutions Strategy
Engineered Solutions Strategy An extensive portfolio of adaptable products and a global network of resources positioned to serve a diverse customer base Global Reach Focused Customizable World Class with Local Growth Designs Manufacturing Support New Product Sales Support Adaptable Advanced quality
Slide 16: Engineered Solutions Markets
Engineered Solutions Markets Construction & Commercial Vehicle Light Vehicle Agriculture Outdoor Power Hydraulics & Industrial Powersports Equipment 16
Slide 17: Engineered Solutions Products
Engineered Solutions Products Electronics Thermal Management Sensors Switches Injection & Power Distribution Ignition & Emission Clamping Fuel Delivery SMPEngineeredSolutions.com 17
Slide 18: Operational Excellence
Operational Excellence Commitment to Manufacturing by Optimized Supply Chain Manufacturing Geography U.S. 13% • Basic manufacturer with 19 • Diverse low-cost footprint Canada manufacturing facilities 3% • Global sourcing and supplier Mexico • 13 design and development development 52% Europe 16% cent
Slide 19: Strategic Acquisitions
Strategic Acquisitions Target technologies, products, and processes: • Align with our core competencies • Consolidating competitors or suppliers • Diversification plays in adjacent markets or technologies • Synergistic product line carve-outs that enhance our capabilities • Servicing common customer
Slide 20: Sustainability
Sustainability SMP is committed to ongoing ESG and DE&I initiatives We believe in being a good corporate citizen We are committed to our company, our employees, our shareholders, our business partners, and our communities Environmental Social Governance • Ambition to achieve net-zero by 2050 • Incre
Slide 21: Return to Shareholders
Return to Shareholders Quarterly Dividends $0.29 $0.27 $0.25 $0.25 $0.23 $0.21 $0.19 $0.17 $0.15 $0.13 $0.11 $0.09 $0.07 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021 2022 2023 * Dividend paid out for two quarters only due to COVID-19 pandemic Share Repurchase Program Period 2011 2012 2013
Slide 22: SMP Cash Utilization
SMP Cash Utilization $225 CapEx Dividends Acquisitions (M&A) Repurchases $200M $200 27 $175 Total Utilization $150 Repurchases $157.0 CapEx $ Millions $125 $104M 18% $223.2 125 25% 1 $100 $91M $81M $74M 11 $73M $75 $64M 67 10 30 $58M 24 $51M 15 44 4 $50 $41M $43M 2 38 7 10 20 25 7 14 22 23 17 M&A 13
Slide 23: Reasons to Invest in SMP
Reasons to Invest in SMP Disciplined capital allocation Leader in Aftermarket with strategy driving organic and significant share; generating inorganic growth with consistent annual growth improving ROIC Engineered Solutions provides diversified and Longstanding business led fast growth potential ac
Slide 24: December 2023 YTD Results
December 2023 YTD Results 24
Slide 25: Year-Over-Year Performance Measures
Year-Over-Year Performance Measures $1,500 Consolidated Net Sales ($M) Gross Margin 35% $1,250 $1,371.8 30% $1,358.3 $1,298.8 $1,000 25% $1,137.9 $1,128.6 20% $750 15% 29.2% 29.8% 29.0% 27.9% 28.6% $500 10% $250 5% $- 0% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Full Year Full Year EBITDA ($
Slide 26: Income Statement Non-GAAP
Income Statement Non-GAAP (In millions, except per share amounts) TWELVE MONTHS ENDED DECEMBER, 31 2023 2022 Vehicle Control Revenue $ 737.9 $ 750.6 Gross Margin 238.2 32.3% 232.3 30.9% Selling, General & Administrative 135.1 18.3% 130.1 17.3% Factoring Expenses 30.6 4.1% 21.5 2.9% Operating Income
Slide 27: Income Statement Non-GAAP
Income Statement Non-GAAP STANDARD MOTOR PRODUCTS, INC. Segment Revenues and Operating Income (In millions, except per share amounts) THREE MONTHS ENDED TWELVE MONTHS ENDED DECEMBER 31, DECEMBER 31, 2023 2022 2023 2022 Consolidated Results Revenue $ 290.8 $ 308.2 $ 1,358.3 $ 1,371.8 Gross Margin 81.
Slide 28: Condensed Balance Sheet
Condensed Balance Sheet Actual Q4 2023, Q4 2022 ($ in millions) Dollars Ratios 2023 2022 2023 2022 Cash and Equivalents $ 32.5 $ 21.2 Accounts Receivable/DSO 160.3 167.6 52 51 Inventory/Turns 507.1 528.7 1.9 1.9 Unreturned Customer Inventory 18.2 19.7 Other Assets 574.9 517.7 Total Assets $ 1,293.0
Slide 29: Condensed Statement of Cash Flows
Condensed Statement of Cash Flows (In millions) DECEMBER 31, 2023 2022 Working Capital Stats Accounts Receivable, Net $ 160.3 $ 167.6 Inventories $ 507.1 $ 528.7 Cash Flow Stats (YTD) Operating cash flows $ 144.3 $ (27.5) Capex $ (28.6) $ (26.0) M&A $ (4.0) $ (1.9) Dividends $ (25.2) $ (23.4) Share
Slide 30: Appendix
Appendix 30
Slide 31: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Reconciliation of GAAP and Non-GAAP Measures ($ in thousands, except per share amounts) TWELVE MONTHS DECEMBER 31, 2023 2022 2021 2020 2019 (Unaudited) EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP GAAP EARNINGS FROM CONTINUING OPERATIONS $ 63,1
Slide 32: Reconciliation of GAAP and Non-GAAP Measures (cont'd)
Reconciliation of GAAP and Non-GAAP Measures (cont’d) ($ in thousands) TWELVE MONTHS DECEMBER 31, 2023 2022 2021 2020 2019 (Unaudited) EBITDA WITHOUT SPECIAL ITEMS GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES $ 81,716 $ 98,332 $ 130,465 $ 107,379 $ 91,796 DEPRECIATION & AMORTIZATION 29,022
Slide 33: Reconciliation of GAAP and Non-GAAP Measures by Segment
Reconciliation of GAAP and Non-GAAP Measures by Segment (In thousands) TWELVE MONTHS ENDING DECEMBER 31, 2023 TWELVE MONTHS ENDING DECEMBER 31, 2022 Vehicle Temp. ENG Consol. Vehicle Temp. ENG Consol. All Other All Other Control Control Solutions SMP Control Control Solutions SMP OPERATING INCOME GA
Slide 34: Thank You
Thank You 34
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