Standard Motor Products, Inc. · NYSE:SMP
Standard Motor Products — Q4 2022 Earnings Presentation
32 slides from Standard Motor Products's earnings presentation, Feb 22, 2023
Slide 1: Standard Motor Products, Inc. Q4 Investor Presentation
Standard Motor Products, Inc. Q4 Investor Presentation February 22, 2023 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: 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 +3% increase 12.0 11.9 12.1 12.2 260 8.0 Millions 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 $30 Millions 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 $0.27 $0.29 $0.23 $0.25 $0.25 $0.21 $0.17 $0.19 $0.15 $0.11 $0.13 $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 Repurchases $200M $200 Total Utilization 27 $175 Repurchases $162M Capex $150 $206M 18% 23% $125 $ Millions $104M $91M 125 $100 1 $81M $74M $73M 11 $75 $64M $64M 10 $51M 67 30 5 24 44 $41M 15 $43M $50 2 38 20 7 10 39 7 14 22 23 17 19 $25 13 14 1
Slide 23: Why Invest in SMP
Why Invest in SMP Disciplined capital allocation Leader in Aftermarket with strategy driving organic and significant share; generating inorganic growth with consistent annual growth improving ROIC Engineered Solutions provides diversified and Longstanding business led fast growth potential by experi
Slide 24: Full Year 2022 Financial Results
Full Year 2022 Financial Results 24
Slide 25: Year-Over-Year Performance Measures
Year-Over-Year Performance Measures Consolidated Net Sales ($M) Operating Profit $1,500 $1,250 10% $1,298.8 $1,371.8 $1,000 $1,092.1 $1,137.9 $1,128.6 UP 5.6% $750 5% 9.9% 10.1% $500 7.5% 8.5% 8.2% $250 $- 0% 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 EBITDA ($M & % Net Sales) Diluted EPS $18
Slide 26: Income Statement Non-GAAP
Income Statement Non-GAAP ($ in millions) December 2022 YTD December 2021 YTD Amount % of Sales Amount % of Sales Net Sales $ 1,371.8 100.0% $ 1,298.8 100.0% Gross Profit 382.5 27.9% 377.3 29.0% SG&A Expenses 269.6 19.7% 246.2 19.0% Operating Profit 112.9 8.2% 131.1 10.1% Other Income/(Loss) 4.8 3.5
Slide 27: Condensed Balance Sheet
Condensed Balance Sheet Actual Q4 2022, Q4 2021 ($ in millions) Dollars Ratios 2022 2021 2022 2021 Cash and Equivalents $ 21.2 $ 21.8 Accounts Receivable/DSO 167.6 180.6 51 54 Inventory/Turns 528.7 468.8 1.9 2.3 Unreturned Customer Inventory 19.7 22.3 Other Assets 517.7 504.5 Total Assets $ 1,254.9
Slide 28: Condensed Statement of Cash Flows
Condensed Statement of Cash Flows (IN MILLIONS) Full Year 2022 2021 Net Income $55.4 $91.0 Depreciation & Amortization 28.3 27.2 Accounts Receivable 6.9 28.5 Inventory (67.5) (107.6) Accounts Payable (48.6) 33.0 Other Operating Activities (2.0) 13.5 Operating Cash Flow (27.5) 85.6 Capital Expenditur
Slide 29: Appendix
Appendix 29
Slide 30: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures ($ in thousands, except per share amounts) TWELVE MONTHS DECEMBER 31, 2022 2021 2020 2019 2018 (Unaudited) EARNINGS FROM CONTINUING OPERATIONS GAAP Earnings from Continuing Operations $ 73,042 $ 99,353 $ 80,417 $ 69,051 $ 56,854 Customer Bankruptcy Charge
Slide 31: Reconciliation of GAAP and Non-GAAP Measures (cont'd)
Reconciliation of GAAP and Non-GAAP Measures (cont’d) ($ in thousands) TWELVE MONTHS DECEMBER 31, 2022 2021 2020 2019 2018 (Unaudited) EBITDA WITHOUT SPECIAL ITEMS ATTRIBUTABLE TO SMP GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES $ 98,332 $ 130,465 $ 107,379 $ 91,796 $ 76,831 Depreciation &
Slide 32: Thank you
Thank you For more information, contact: Anthony (Tony) Cristello Standard Motor Products, Inc. (972) 316-8107 tony.cristello@smpcorp.com
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