Genuine Parts Company · NYSE:GPC
Genuine Parts — Q4 2022 Earnings Presentation
28 slides from Genuine Parts's earnings presentation, Feb 23, 2023
Slide 1: Q4'22 Earnings Presentation
Q4’22 Earnings Presentation February 23, 2023
Slide 2: Genuine Parts Company Snapshot
Genuine Parts Company Snapshot (as of 12/31/2022) Global Footprint Key Statistics 2022 Revenue by Region Founded 1928 Headquarters Atlanta, GA Countries Served 17 Locations ~10,600 • Distribution Centers ~205 • Warehouses ~765 14% Europe • Retail (Owned/Independent) ~9,630 Employees ~58,000 77% Nort
Slide 3: Safe Harbor Statement
Safe Harbor Statement FORWARD-LOOKING STATEMENTS: Some statements in this presentation, as well as in materials the company files with the Securities and Exchange Commission (SEC), release to the public, or make available on the company’s website, constitute forward-looking statements that are subje
Slide 4: Paul Donahue, Chairman & CEO
Paul Donahue Chairman & CEO “GPC
Slide 5: Key Messages
Key Messages The GPC team capped off a record-setting year with a strong fourth quarter highlighted by double-digit sales and earnings growth and continued margin expansion Operations are benefiting from execution of strategies, continued resilience of our Automotive and Industrial businesses an
Slide 6: Q4'22 Performance Highlights
Q4’22 Performance Highlights Total Sales Segment Profit Adj Diluted EPS1 +15.0% ($M) +25.2% ($M) +14.5% $5,524 $4,803 $526 $2.05 $420 9.5% $1.79 +80 bps 8.7% Q4’21 Q4’22 Q4’21 Q4’22 Q4’21 Q4’22 • 7th consecutive quarter of double-digit • Segment profit margin expansion in • 10th consecutive quarter
Slide 7: FY'22 Performance Highlights
FY’22 Performance Highlights Total Sales Segment Profit Adj Diluted EPS1 +17.1% ($M) +24.5% ($M) +20.7% $22,096 $18,871 $2,078 $8.34 $1,669 $6.91 9.4% 8.8% +60 bps FY’21 FY’22 FY’21 FY’22 FY’21 FY’22 • Record total sales • Segment profit margin expansion in • Record adjusted EPS Automotive, Industri
Slide 8: Performance Drivers
Performance Drivers Strategic Initiatives M&A Strategy Industry Trends • Advancing our pricing strategies • Acquisition of KDG • Automotive – Significant impact on our Industrial – Geographic diversity of our • Optimizing our supply chain and performance in 2022 markets network footprint – Enhanced
Slide 9: GPC Investor Day
GPC Investor Day March 23, 2023 GPC Q4’22 EARNINGS PRESENTATION | 9
Slide 10: Will Stengel, President & COO
Will Stengel President & COO 10
Slide 11: Foundational Priorities for Investing in Our Business
Foundational Priorities for Investing in Our Business Talent & Culture Sales Effectiveness Technology Supply Chain Emerging Technology • Recognize high • Utilize data and • Enhance data and • Ensure we have the • Aspire to lead in potential talent, infuse analytics to digital capabilities to “right”
Slide 12: Q4'22 Automotive Performance
Q4’22 Automotive Performance Sales Segment Profit1 North America +7.6% +11.0% • Total U.S. Sales +10% ($M) ($M) − +6% comp sales2 $3,433 $400 • Sales growth in both DIFM and DIY sales $3,190 $350 − DIFM sales gains across all customer segments $295 − Grew NAPA AutoCare network of professional repair
Slide 13: Q4'22 Industrial Performance
Q4’22 Industrial Performance Sales Segment Profit1 North America and Australasia +29.6% ($M) +49.8% ($M) • Sales cadence was consistently strong throughout the quarter − Average daily sales2 growth at or above 30% for all three months $300 • Double-digit sales growth across nearly all product catego
Slide 14: Bert Nappier, EVP & CFO
Bert Nappier EVP & CFO (GPt) .
Slide 15: Q4'22 Financial Results
Q4’22 Financial Results ($M, except per share data) Sales Gross Profit Adj Op/Non-Op Expenses1 Segment Profit2 Adj Diluted EPS1 +15.0% +16.5% +16.6% +25.2% +14.5% $5,524 $1,974 10.1% $1,584 $600 $2,000 $526 $4,803 $1,600 9.9% $1,693 $1,800 $1,358 9.5% $2.05 $1,400 $500 28.7% 9.7% 35.7% $1,600 35.9%
Slide 16: Strong Balance Sheet and Robust Cash Generation
Strong Balance Sheet and Robust Cash Generation Balance Sheet Highlights1 ($B) Liquidity Profile1 ($B) Debt Maturity Schedule1 ($M) Cash / Cash Equivalents $0.7 $1,299 Total Credit Capacity3 $4.8 2.33% Q4’22 Average Interest Rate Accounts Receivable $2.2 Less Total Debt: ($3.3) Inventory $4.4 Unused
Slide 17: Effective Capital Allocation
Effective Capital Allocation 2022 Capital Deployment Key Priorities Reinvestment • $340M CapEx in ’22 • Projecting ‘23 CapEx of $375M - $400M 13% 19% M&A / KDG Acquisition 7% • $1.5B in 2022, including $1.3B for KDG acquisition • Targeting additional acquisitions in ‘23 9% ~$2.6B Share Repurchases •
Slide 18: 2023 Outlook
2023 Outlook1 Total Sales Growth 4% to 6% • Automotive 4% to 6% • Industrial 4% to 6% Diluted EPS $8.80 to $8.95 Adj Diluted EPS $8.80 to $8.95 Adj EPS Growth 6% to 7% Cash from Operations $1.2B to $1.4B Free Cash Flow2 $800M to $1.0B Full-year growth rates and EPS assume FX headwind of <1.0% • Corp
Slide 19: Q&A
Q&A
Slide 20: Appendix
Appendix 20
Slide 21: Consolidated Net Sales and Adj Diluted EPS Bridge
Consolidated Net Sales and Adj Diluted EPS Bridge Appendix A Net Sales ($M) Adj Diluted Earnings Per Share1 $385 $5,524 $0.26 $2.05 $534 $1.79 $1.77 ($198) ($0.28) $4,803 Q4'21 Core Sales Acquisitions FX & Other Q4'22 Q4'21 GAAP Core Q4'22 Adjustments Q4'22 GAAP EPS Operations Adj. Diluted EPS 1 EPS
Slide 22: Other Information
Other Information Appendix B Comparable Sales: Comparable sales or “comp sales” refer to period-over-period comparisons of our net sales excluding the impact of acquisitions, divestitures, foreign currency and other. The company considers this metric useful to investors because it provides greater t
Slide 23: Segment Data
Segment Data Appendix C 2022 2022 2021 (in thousands) Full Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net sales: Automotive $ 13,666,634 $ 3,275,621 $ 3,467,494 $ 3,490,462 $ 3,433,057 $ 2,953,165 $ 3,196,299 $ 3,204,534 $ 3,190,133 Industrial 8,429,339 2,019,014 2,134,920 2,184,812 2,090,593 1,511,549 1,587,439
Slide 24: Explanation of Adjustments
Explanation of Adjustments Appendix D (1) Gain on sale of real estate: Adjustment reflects a gain on the sale of real estate that had been leased to S.P. Richards. (2) Gain on insurance proceeds: Adjustment reflects insurance recoveries in excess of losses incurred on inventory, property, plant and
Slide 25: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Appendix D Adj Net Income 2022 2022 2021 (in thousands) Full Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 GAAP net income $ 1,182,701 $ 245,838 $ 372,529 $ 312,358 $ 251,976 $ 217,710 $ 196,496 $ 228,585 $ 255,999 Adjustments: Gain on sale of real estate (1) (102,803) —
Slide 26: Reconciliation of Non-GAAP Financial Measures (Cont.)
Reconciliation of Non-GAAP Financial Measures (Cont.) Appendix D Adj EBIT and Adj EBITDA 2022 2022 2021 (in thousands) Full Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 GAAP net income $ 1,182,701 $ 245,838 $ 372,529 $ 312,358 $ 251,976 $ 217,710 $ 196,496 $ 228,585 $ 255,999 Interest expense, net 73,886 19,850 20,
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Appendix D Adj Operating and Non-Operating Expenses Three Months Ended December 31, QTD Change (in thousands) 2022 2021 $ Change % Change GAAP operating and non-operating expenses $ 1,636,308 $ 1,347,543 $ 288,765 21.4% Adjustments: Gain on insurance pro
Slide 28: Reconciliation of Non-GAAP Financial Measures (Cont.)
Reconciliation of Non-GAAP Financial Measures (Cont.) Appendix D Free Cash Flow (in thousands) Twelve Months Ended December 31, 2022 Net cash provided by operating activities $ 1,466,971 Less: Purchases of property, plant and equipment (339,632) Free Cash Flow $ 1,127,339 Updated Outlook December 31
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