Standard Motor Products, Inc. · NYSE:SMP
Standard Motor Products — Q2 2023 Earnings Presentation
34 slides from Standard Motor Products's earnings presentation, Aug 2, 2023
Slide 1: Standard Motor Products, Inc. Q2'23 Investor Presentation
Standard Motor Products, Inc. Q2’23 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 2022 Sales Mix by Segment 2022 EBITDA* Mix by Segment HQ: Long Island City, NY Vehicle Temperature Temperature Vehicle Control Control Control Locations: 32 Globally 55% 25% Control 21% 60% Employees: 6,100* Engineered Engineered Solutions Solutions 2022 Financial
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 Aftermarket Net Sales Aftermarket EBITDA* & Margin% $1,200 $1,102 $175 $1,062 $147 $150 $965 $985 $969 $134 $130 $1,000 $124 $125 $107 Millions Millions $100 $800 $75 $50 13.9% $600 12.6% 13.8% 11.8% $25 11.1% $400 $0 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2022 Afterm
Slide 8: Aftermarket Strategy
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 +3% increase 12.0 11.9 12.1 12.2 260 Millions 8.0 Years 230 4.0 200 0.0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2014 2015 2016 2017 2018 2019 2020 2021 202
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 • Variable Valve Timing Compo
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* & Margin% $270 $40 $300 $30 $30 $237 Millions $30 Millions $200 $159 $153 $19 $127 $20 $15 $15 $100 $10 11.7% 11.8% 12.7% 11.3% 10.2% $0 $0 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Commercial Vehicle -
Slide 14: Engineered Solutions Opportunities
Engineered Solutions Opportunities Market Expansion Diversification Growth Collaboration Broadens the Diverse end markets, Sales driver as new Supports and expands Company’s target geographies, and segment has potential Increasing Demand SMP’s Aftermarket opportunities across customers for expanded
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 Hydraulics & Outdoor Power Powersports Industrial 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. 15% • Basic manufacturer with 12 • Diverse low-cost footprint manufacturing facilities Canada • Global sourcing and supplier Mexico 3% 48% • 13 design and development development centers Europe
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 $0.25 $0.25 $0.27 $0.21 $0.23 $0.19 $0.17 $0.13 $0.15 $0.11 $0.07 $0.09 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 Repurchases $200 $200 27 Total Utilization $175 Buybacks CapEx $157.0 $204.1 $150 19% 24% $ Millions $125 $104M 125 1 $100 $91M $81 Div. $74M 11 M&A $73M $177.2 $75 $64M $305.3 10 67 30 21% $51M 24 44 36% 15 $50 $41M $43M 2 38 7 10 7 20 14 22 23
Slide 23: Why Invest in SMP
Why 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 by experi
Slide 24: June 2023 YTD Results
June 2023 YTD Results 24
Slide 25: Year-Over-Year Performance Measures
Year-Over-Year Performance Measures $1,500 Consolidated Net Sales ($M) 35% Gross Margin 28.3% 29.6% 28.3% $1,250 $1,371.8 30% 26.8% 27.3% $1,298.8 $1,000 $1,137.9 $1,128.6 25% 20% $750 15% 29.2% 29.8% 29.0% 27.9% $500 10% $588.9 $618.6 $682.2 $681.1 $250 $502.2 5% $- 0% 2019 2020 2021 2022 2023 2019
Slide 26: Income Statement Non-GAAP
Income Statement Non-GAAP (In millions, except per share amounts) SIX MONTHS ENDED JUNE 30, 2023 2022 Vehicle Control Revenue $ 368.4 $ 363.0 Gross Margin 118.6 32.2% 109.2 30.1% Selling, General & Administrative 66.9 18.0% 65.2 18.0% Factoring Expenses 14.7 4.0% 7.5 2.1% Operating Income $ 37.0 10.
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 SIX MONTHS ENDED JUNE 30, JUNE 30, 2023 2022 2023 2022 Consolidated Results Revenue $ 353.1 $ 359.4 $ 681.1 $ 682.2 Gross Margin 101.3 28.7% 96.4 2
Slide 28: Condensed Balance Sheet
Condensed Balance Sheet Actual Q2 2023, Q2 2022 ($ in millions) Dollars Ratios 2023 2022 2023 2022 Cash and Equivalents $ 23.0 $ 14.2 Accounts Receivable/DSO 218.1 229.7 53 55 Inventory/Turns 499.1 551.4 1.9 2.0 Unreturned Customer Inventory 19.7 21.4 Other Assets 542.2 509.9 Total Assets $ 1,302.1
Slide 29: Condensed Statement of Cash Flows
Condensed Statement of Cash Flows (In millions) JUNE 30, DECEMBER 31, 2023 2022 2022 Working Capital Stats Accounts Receivable, Net $ 218.1 $ 229.7 $ 167.6 Inventories $ 499.1 $ 551.4 $ 528.7 Cash Flow Stats (YTD) Operating cash flows $ 39.4 $ (95.3) Capex $ (9.5) $ (13.2) M&A $ - $ - Dividends $ (1
Slide 30: Appendix
Appendix 30
Slide 31: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures ($ in thousands, except per share amounts) SIX MONTHS JUNE 30, 2023 2022 2021 2020 2019 (Unaudited) EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO SMP GAAP EARNINGS FROM CONTINUING OPERATIONS $ 31,056 $ 41,354 $ 50,159 $ 21,463 $ 33,659 RESTRUCTURING
Slide 32: Reconciliation of GAAP and Non-GAAP Measures (cont'd)
Reconciliation of GAAP and Non-GAAP Measures (cont’d) ($ in thousands) SIX MONTHS JUNE 30, 2023 2022 2021 2020 2019 (Unaudited) EBITDA WITHOUT SPECIAL ITEMS GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES $ 41,806 $ 55,558 $ 67,012 $ 28,777 $ 44,931 DEPRECIATION & AMORTIZATION 14,129 13,893 13
Slide 33: Reconciliation of GAAP and Non-GAAP Measures by Segment
Reconciliation of GAAP and Non-GAAP Measures by Segment (In thousands) SIX MONTHS ENDING JUNE 30, 2023 SIX MONTHS ENDING JUNE 30, 2022 Vehicle Temp. ENG Consol. Vehicle Temp. ENG Consol. All Other All Other Control Control Solutions SMP Control Control Solutions SMP OPERATING INCOME GAAP OPERATING I
Slide 34: Thank You
Thank You 34
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