Genuine Parts Company · NYSE:GPC
Genuine Parts — Q3 2022 Earnings Presentation
27 slides from Genuine Parts's earnings presentation, Oct 20, 2022
Slide 1: Q3 2022 Earnings Presentation
Q3 2022 Earnings Presentation October 20, 2022
Slide 2: Genuine Parts Company Snapshot
Genuine Parts Company Snapshot Global Footprint Key Statistics1 TTM 2022 Revenue by Region1 Founded 1928 Headquarters Atlanta, GA Countries Served 17 Locations ~10,585 • Warehouses ~800 • Distribution Facilities ~200 14% Europe • Retail (Owned/Independent) ~9,585 Employees ~53,000 76% North America
Slide 3: Safe Harbor Statement
Safe Harbor Statement FORWARD-LOOKING STATEMENTS: Some statements in this presentation, as well as in other materials we file with the Securities and Exchange Commission (SEC), release to the public, or make available on our website, constitute forward-looking statements that are subject to the safe
Slide 4: Paul Donahue, Chairman & CEO
Paul Donahue Chairman & CEO <GPE)
Slide 5: Key Messages
Key Messages ✓ The GPC team had record results, consisting of double-digit sales and earnings growth ✓ Operations are benefiting from execution of strategies, continued resilience of our Automotive and Industrial businesses and strategic mix of our operations ✓ We are extremely proud of our 53,000 t
Slide 6: Q3'22 Performance Highlights
Q3’22 Performance Highlights Total Sales Segment Profit Adjusted Diluted EPS1 +17.8% ($M) +23.5% ($M) +18.6% $5,675 $4,819 $552 $2.23 $447 $1.88 9.7% 9.3% +40 bps Q3’21 Q3’22 Q3’21 Q3’22 Q3’21 Q3’22 • Record quarterly sales for the • Segment operating margin expansion • Record quarterly earnings and
Slide 7: Performance Drivers
Performance Drivers Strategic Initiatives Industry Tailwinds M&A Strategy • Advancing technology across Automotive: • Strategic bolt-on acquisitions our operations • Increase in year-to-date miles – Small automotive store groups • Optimizing inventory availability driven and the average age of • Acq
Slide 8: 2022 Sustainability Report
2022 Sustainability Report Reducing carbon E emissions S Environmental Improving diversity, equity and inclusion GGovernance Social Enhancing ESG governance Click here to access the report and learn more about GPC’s progress in these areas. GPC Q3 2022 EARNINGS PRESENTATION | 8
Slide 9: Will Stengel, President
Will Stengel President <GPE)
Slide 10: Foundational Priorities for Investing in Our Business
Foundational Priorities for Investing in Our Business Talent & Culture Sales Effectiveness Technology Supply Chain Emerging Technology • Recognize high • Utilize data and • Enhance data and • Ensure we have the • Aspire to lead in potential talent, infuse analytics to digital capabilities to “right”
Slide 11: Q3'22 Automotive Performance
Q3’22 Automotive Performance Sales Segment Profit2 North America +8.9% +10.0% • Total U.S. Sales +11% ($M) ($M) − +8% comp sales1 $3,490 $400 • Sales growth with both DIFM and DIY sales $3,205 $350 − Steady strength across commercial accounts $309 − B2C digital investments driving sustained retail g
Slide 12: Q3'22 Industrial Performance
Q3’22 Industrial Performance Sales Segment Profit2 North America and Australasia +35.3% ($M) +46.3% ($M) • Sales cadence was consistently strong throughout the quarter • Double-digit sales growth across virtually all product categories and major industries served $300 $2,185 $250 $243 • Continuing e
Slide 13: Bert Nappier, EVP & CFO
Bert Nappier EVP & CFO <GPE)
Slide 14: Q3'22 Financial Results
Q3’22 Financial Results ($M, except per share data) Sales Gross Profit Adj Op/Non-Op Expenses1 Segment Profit3 Adj Diluted EPS1 +17.8% +15.7% +15.4% +23.5% +18.6% $5,675 $1,980 10.9% $552 $600 $1,558 $2,000 36.5% $1,600 $4,819 $1,711 $1,800 $1,400 $1,351 $500 $2.23 10.4% $1,600 $447 $1.88 $1,200 35.
Slide 15: Strong Balance Sheet and Robust Cash Generation
Strong Balance Sheet and Robust Cash Generation Balance Sheet Highlights1 ($B) Liquidity Profile1 ($B) Debt Maturity Schedule1 ($M) Cash / Cash Equivalents $0.6 Total Credit Capacity3 $4.7 2.34% Q3’22 Average Interest Rate $1,273 Accounts Receivable $2.2 Less Total Debt: ($3.2) Inventory $4.3 Unused
Slide 16: Effective Capital Allocation
Effective Capital Allocation YTD 2022 Capital Deployment Key Priorities Reinvestment • $244M CapEx YTD 7% 11% • Projecting 2022 spend of ~$350M 10% Share Repurchases • $50M spend for ~333K shares in Q3; $173M spend for ~1.3M shares YTD 16% ~$2.4B • Plans for additional share buy-backs M&A / KDG Acqu
Slide 17: 2022 Outlook
2022 Outlook1 Current Previous Total Sales Growth 15% to 16% 12% to 14% • Automotive 7% to 8% 6% to 8% • Industrial 31% to 32% 26% to 28% Diluted EPS $8.29 to $8.39 $8.08 to $8.23 Adjusted Diluted EPS $8.05 to $8.15 $7.80 to $7.95 Adjusted EPS Growth 16% to 18% 13% to 15% Cash from Operations $1.5B
Slide 18: Q&A
Q&A
Slide 19: Appendix
Appendix 19
Slide 20: Consolidated Net Sales and Adj Diluted EPS Bridge
Consolidated Net Sales and Adj Diluted EPS Bridge Appendix A Net Sales ($M) Adj Diluted Earnings Per Share1 $438 $5,675 $0.64 $2.23 $2.20 $612 ($194) ($0.03) $1.59 $4,819 3Q'21 Core Sales Acquisitions FX & Other 3Q'22 Q3'21 GAAP Core Q3'22 Adjustments Q3'22 GAAP EPS Operations Adj. Diluted EPS 1 EPS
Slide 21: 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 22: Segment Data
Segment Data Appendix C 2022 2022 2021 (in thousands) TTM Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Net sales: Automotive $ 13,423,710 $ 3,275,621 $ 3,467,494 $ 3,490,462 $ 2,953,165 $ 3,196,299 $ 3,204,534 $ 3,190,133 Industrial 7,951,822 2,019,014 2,134,920 2,184,812 1,511,549 1,587,439 1,614,315 1,613,076 Total ne
Slide 23: 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 24: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Appendix D Adjusted Net Income 2022 2022 2021 (in thousands) TTM Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q4 GAAP net income $ 1,186,724 $ 245,838 $ 372,529 $ 312,358 $ 217,710 $ 196,496 $ 228,585 $ 255,999 Adjustments: Loss on software disposal (1) — — — — — — 61,063 — Pro
Slide 25: Reconciliation of Non-GAAP Financial Measures (Cont.)
Reconciliation of Non-GAAP Financial Measures (Cont.) Appendix D Adjusted EBIT and Adjusted EBITDA 2022 2022 2021 (in thousands) TTM Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q4 GAAP net income $ 1,186,724 $ 245,838 $ 372,529 $ 312,358 $ 217,710 $ 196,496 $ 228,585 $ 255,999 Interest expense, net 72,615 19,850 20,248 18
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Appendix D Adjusted Operating and Non-Operating Expenses Three Months Ended September 20, QTD Change (in thousands) 2022 2021 $ Change % Change GAAP operating and non-operating expenses $ 1,561,731 $ 1,411,793 $ 149,938 10.6% Adjustments: Loss on softwar
Slide 27: Reconciliation of Non-GAAP Financial Measures (Cont.)
Reconciliation of Non-GAAP Financial Measures (Cont.) Appendix D Free Cash Flow (in thousands) TTM Ended September 30, 2022 Net cash provided by operating activities $ 1,494,680 Less: Purchases of property, plant and equipment (371,928) Free Cash Flow $ 1,122,752 Updated Outlook Year Ended December
Genuine Parts Company — Q3 2022 Earnings Presentation on 6ix