Genuine Parts Company · NYSE:GPC
Genuine Parts — Q3 2021 Earnings Presentation
31 slides from Genuine Parts's earnings presentation, Oct 21, 2021
Slide 1: Q3 2021 Earnings Presentation
Q3 2021 Earnings Presentation October 21, 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 15 Locations ~10,600 • Warehouses ~900 • Distribution Facilities ~190 • Retail (Owned/Independent) ~9,500 74% 15% North Europe Employees ~52,000 A
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: Q3 Highlights
Q3 Highlights Paul Donahue Chairman & CEO
Slide 5: Key Messages
Key Messages 01 Strong financial performance due to consistent execution of strategic priorities as the global markets continue to recover 02 Generating positive momentum in both sales and operating results and well-positioned for both near-term and long-term growth 03 Despite inflationary pressures
Slide 6: 3Q21 Performance Highlights
3Q21 Performance Highlights1 • $4.8B Total Sales2, +10.3%, and +11% from 2019 ✓ Monthly daily sales3 trends strongest in September ✓ Automotive benefiting from continued focus on key growth areas and market tailwinds ✓ Industrial recovery driven by strengthening economy and customer activity Financi
Slide 7: Automotive: Highlights, Trends and Initiatives
Automotive: Highlights, Trends and Initiatives Automotive – Total sales +8%; New Record for Quarterly Sales Volume Comp Sales1 +5%; 2-Year Stack +7%; Segment Profit Margin 8.8%, -20 bps; 2-Year Stack +80 bps MACRO NORTH AMERICA EUROPE AUSTRALASIA • Tailwinds: Total U.S. Sales +9%; +8% 2-Year Stack T
Slide 8: Industrial: Highlights, Trends and Initiatives
Industrial: Highlights, Trends and Initiatives Industrial – Total sales +15% Comp Sales1 +13%; 2-Year Stack +4%; Segment Profit Margin 10.3%, +140 bps; 2-Year Stack +220 bps MACRO NORTH AMERICA AUSTRALASIA • Continued improvement in Industrial sales trends • Strengthening industrial economy and grow
Slide 9: Continued Progress Towards ESG Initiatives
Continued Progress Towards ESG Initiatives Published 2021 Sustainability Report update Progress in promoting diversity, equity and inclusion – New DE&I Director and formation of a DE&I Council Continued steps to reduce environmental footprint of operations by reducing energy and emissions while incr
Slide 10: Strategic Initiative Update
Strategic Initiative Update Will Stengel President
Slide 11: Investing in Our Core Business
Investing in Our Core Business Talent Sales Effectiveness Digital Supply Chain Emerging Technology • Recognize high potential • Utilize data and • Deliver a best-in-class • Ensure we have the • Aspire to lead in talent, infuse new analytics to understand customer experience “right” product emerging
Slide 12: Teamwork and Partnership
Teamwork and Partnership •Celebrate and Thank Our Teammates ✓ Energized by positive attitudes, strong team alignment and visible excitement about GPC’s momentum and vision ✓ Re-emergence of in-person team events ▪ U.S. Automotive general management team ▪ U.S. Motion executive and field leaders ▪ AA
Slide 13: Talent and Technology
Talent and Technology •Focus on Talent Investments ✓ Review of our global GPC employee value proposition and talent initiatives ✓ Action to lead, recognize and ensure the wellbeing of our teams, including: ▪ Streamlining recruiting processes ▪ Introducing new wellness incentives ▪ Improving holiday
Slide 14: Financial Performance
Financial Performance Carol Yancey EVP & CFO
Slide 15: 3Q21 Financial Results
3Q21 Financial Results ($M, except per share data) Sales Adj. Gross Profit1 Adj. Op/Non-Op Expenses1 Segment Profit1 Adj. Diluted EPS1 +10.3% +11.9% +10.7% +14 .1% 20.0% +15.3% 19.0% $1,900 40.0% $4,819 $1,711 $500 $447 70.0% 69.0% 18.0% $1,351 $1.88 68.0% 67.0% 66.0% 65.0% 17.0% $1,700 $4,370 64.0%
Slide 16: 3Q21 Segment Performance
3Q21 Segment Performance ($M) Automotive Industrial Sales Segment Profit2 Sales Segment Profit2 +8.2% +5.6% +14.5% +31.9% $180 20.0% $350 20.0% $1,614 $166 18.0% $3,205 18.0% $160 $2,960 $300 $281 $1,410 $266 16.0% $140 16.0% $250 $126 14.0% 14.0% $120 $200 12.0% 10.3% 12.0% 9.0% 8.9% +140 bps $100
Slide 17: Strong Balance Sheet and Robust Cash Generation
Strong Balance Sheet and Robust Cash Generation BALANCE SHEET HIGHLIGHTS1 ($B) LIQUIDITY PROFILE1 ($B) DEBT MATURITY SCHEDULE1 ($M) Cash / Cash Equivalents $0.9 Total Credit Capacity3 $3.9 2.34% 3Q21 Average Interest Rate $841 Accounts Receivable $1.9 Less Total Debt: ($2.4) Inventory $3.8 Unused Cr
Slide 18: Disciplined Capital Allocation
Disciplined Capital Allocation YTD 2021 Capital Deployment Current Priorities Reinvestment 16% • $138M CapEx YTD; Projecting 2021 CapEx of ~$250M 31% M&A • $143M spend YTD; Targeting additional acquisitions ~$915M Share Repurchases • $284M spend YTD; 2.2M shares repurchased and plans for continued s
Slide 19: 2021 Outlook
2021 Outlook1 Current Previous Total Sales Growth 12% to 13% 10% to 12% • Automotive 14% to 15% 11% to 13% • Industrial 10% to 11% 6% to 8% Diluted EPS $5.92 to $5.97 $5.81 to $5.96 Adjusted EPS $6.60 to $6.65 $6.20 to $6.35 Adjusted EPS Growth 25% to 26% 18% to 20% Cash from Operations $1.2B to $1.
Slide 20: Positive Outlook for Global Businesses
Positive Outlook for Global Businesses Progress in driving profitable growth, strong cash flow and shareholder value Optimistic for continued Automotive and Industrial recovery and improving fundamentals Confident in strategic plans to capture long-term growth and margin expansion Strong balance she
Slide 21: Q&A
Q&A
Slide 22: Appendix
Appendix
Slide 23: Consolidated Net Sales and Adj. Diluted EPS Bridge
Consolidated Net Sales and Adj. Diluted EPS Bridge Appendix A Net Sales ($M) Adj. Diluted Earnings Per Share $77 $56 $4,819 $332 ($16) $4,370 $0.25 $1.88 $1.61 $0.02 $1.63 $1.59 ($0.29) 3Q20 Core Sales Acquisitions FX Other 3Q21 3Q20 Adjustments 3Q20 Core 3Q21 Adjustments 3Q21 GAAP EPS Adjusted EPS
Slide 24: 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 25: Segment Data
Segment Data Appendix C 2021 2021 2020 (in thousands) TTM Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Net sales: Automotive $ 12,175,830 $ 2,953,165 $ 3,196,299 $ 3,204,534 $ 2,582,685 $ 2,495,799 $ 2,960,379 $ 2,821,832 Industrial 6,143,065 1,511,549 1,587,439 1,614,315 1,509,841 1,327,428 1,409,707 1,429,762 Total ne
Slide 26: Explanation of Adjustments
Explanation of Adjustments Appendix D (1) Loss on software disposal: Adjustment reflects a loss on an internally developed software project that was disposed of due to a change in management strategy related to advances in alternative technologies. (2) Product liability damages award: Adjustment ref
Slide 27: 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 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q4 GAAP net income (loss) from continuing operations $ 814,423 $ 217,710 $ 196,496 $ 228,585 $ 122,346 $ (363,501) $ 232,918 $ 171,632 Adjust
Slide 28: 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 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q4 GAAP net income (loss) from continuing operations $ 814,423 $ 217,710 $ 196,496 $ 228,585 $ 122,346 $ (363,501) $ 232,918 $ 171,632 interest ex
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Adjusted Gross Profit Three Months Ended September 30, QTD Change (in thousands) 2021 2020 $ Change % Change GAAP Gross Profit $ 1,710,767 $ 1,528,066 $ 182,701 12.0% Adjustments: Transaction and other costs — 604 (604) (100.0)% Total Adjustments (1) — 6
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Adjusted Tax Rate Three Months Ended September 30, (in thousands) 2021 2020 GAAP Income before taxes $ 298,974 $ 297,665 Total adjustments (1) 61,063 11,256 Adjusted income before taxes $ 360,037 $ 308,921 GAAP Income taxes $ 70,389 $ 64,747 Tax impact o
Slide 31: Reconciliation of Non-GAAP Financial Measures (Cont.)
Reconciliation of Non-GAAP Financial Measures (Cont.) Appendix D Free Cash Flow (in thousands) TTM September 30, 2021 Net cash provided by operating activities $ 1,595,534 Less: Purchases of property, plant and equipment (186,280) Free Cash Flow $ 1,409,254 Updated Outlook YE December 31, 2021 Net c
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