Standard Motor Products, Inc. · NYSE:SMP
Standard Motor Products — Q3 2021 Earnings Presentation
29 slides from Standard Motor Products's earnings presentation, 2021
Slide 1: Standard Motor Products, Inc. Q3 2021 Investor Presentation
Standard Motor Products, Inc. Q3 2021 Investor Presentation 1
Slide 2: Forward Looking Statements
Forward Looking Statements You should be aware that except for historical information, the matters discussed here in are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements, including projections and anticipated levels of
Slide 3: Industry and Business Overview
Industry and Business Overview 3
Slide 4: Why Invest in SMP?
Why Invest in SMP? Longstanding business led by experienced management team Leader in engine management and temp control aftermarket Significant share of stable industry with positive outlook Successful growth programs Commitment to Corporate Social Responsibility Superior shareholder returns Financ
Slide 5: SMP Snapshot
SMP Snapshot 102 Years in Business • Founded 1919 • $1.1 Billion 2020 Sales • 5,500 Employees Worldwide LAWRENCE I. SILLS Chairman of the Board ERIC P. SILLS Director, CEO JAMES J. BURKE Chief Operating DALE BURKS EVP and Chief NATHAN ILES Chief Financial and President Officer Commercial Officer Off
Slide 6: SMP Snapshot: Professionally Recognized Brands
SMP Snapshot Professionally Recognized Brands Significant Supplier to All Major Aftermarket Distributors 6
Slide 7: SMP Facilities – Global Footprint
SMP Facilities – Global Footprint 3.3 Million sq. ft. • 18 Manufacturing Plants • 7 Distribution Centers • 11 Offices 7
Slide 8: Favorable Aftermarket Industry Trends
Favorable Aftermarket Industry Trends Vehicle Population shows positive trend The car parc continues to get older U.S. Light Vehicle Parc Average Age of Cars and Light Trucks 290 Millions 12.0 278 281 279 12.1 11.3 11.4 11.5 11.6 11.6 11.7 11.8 11.9 260 270 272 264 8.0 258 249 253 230 4.0 200 0.0 20
Slide 9: Strategy Overview
LU Wied 2 Wid = — Strategy Overview
Slide 10: Strategic Objectives
Strategic Objectives • External programs that provide real value to our customers Core Value • Best-in-class full-line, full-service supplier of premium aftermarket Proposition engine management and temperature control products • Strategic expansion of our business Successful • Growth in complementa
Slide 11: SMP Core Strategy
SMP CORE STRATEGY To be the best full-line, full-service supplier of premium engine management and temperature control products The SMP Value Proposition Our suite of products and services is designed to provide all the needed support for our customers and the technicians who install our parts Premi
Slide 12: Committed to Growing Technologies
Committed to Growing Technologies ADVANCED ICE BEYOND ICE TEMPERATURE CATEGORIES CATEGORIES CONTROL • VVT Components • Power Management • ECV Compressors • 500+ SKUs, Manuf. Bialystok • Battery Current Sensors • 250+ SKUs; 10M+ VIO • Power Distribution • EVAP Components • Brushless Motors (BLDC) • C
Slide 13: Growth in Original Equipment Markets
Growth in Original Equipment Markets • Complementary growth – SMP has served major OE & Heavy Duty customers for years – Recent focus on Commercial & Off-road growth – Products and technologies will be used in the aftermarket • Strategic Diversification – Channel will be >20% of total sales by 2022
Slide 14: Growth – Strategic Acquisitions
Growth – Strategic Acquisitions 2011 2012 2013 2014 2016 2017 2019 2021 • 15 Acquisitions in Recent Years • Primary Focus – Bolt-on: acquire competitors – Vertical integration: acquire suppliers – New but related business • Rationale – Helps with Full-Line, Full-Service model – Helps address part co
Slide 15: Drive for Continuous Improvement
Drive for Continuous Improvement • Increased Manufacturing – Engineering resources up >30% from 2013 – 80% of capital budget for tooling projects – Acquisitions: a great “shortcut” • Optimized Supply Chain Footprint % of Hrs in Low Cost Plants 78% 81% – Operations in Mexico & Poland 60% 38% – China
Slide 16: Corporate Social Responsibility
Corporate Social Responsibility • 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 business partners, and communities • Some highlights from our inaugural Sustainability Report released in 2021 i
Slide 17: Return to Shareholders
Return to Shareholders Dividend Increase Quarterly Dividend $0.23 $0.25 $0.25 $0.21 $0.15 $0.17 $0.19 $0.09 $0.11 $0.13 $0.07 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021 * Dividend paid out for two quarters only due to COVID-19 pandemic Treasury Stock Buyback Program 2011 - 2021 Column1
Slide 18: SMP Cash Utilization
SMP Cash Utilization $230 CapEx Dividends Acquisitions Buybacks $205 $187.3 Total Utilization $180 26.5 $155 $130 $ millions $104.1 $105 $92.0 0.5 $91.0 124.7 4.1 10.7 $80 $73.5 $72.9 $63.6 67.3 $63.8 10.0 5.0 $51.3 24.4 43.5 $55 70.5 $41.2 14.9 $42.5 37.7 19.6 6.8 9.9 38.6 6.9 13.5 $30 12.8 15.4 17
Slide 19: September 2021 YTD Results
September 2021 YTD Results 19
Slide 20: Year-Over-Year Performance Measures
Year-Over-Year Performance Measures Consolidated Net Sales ($M) Gross Margin $1,200 35.0% 28.9% 29.4% 28.5% 28.7% 29.1% $1,116.1 $1,137.9 $1,128.6 UP 16.9% 30.0% $1,000 $1,092.1 $988.9 25.0% $800 $876.2 $896.7 $845.1 $845.9 20.0% $600 15.0% 29.3% 28.6% 29.2% 29.8% $400 10.0% $200 5.0% $- 0.0% 2017 2
Slide 21: Substantial Gross Margin Improvement
Substantial Gross Margin Improvement Engine Management 34% 32% 31.0% 31.3% 30.7% 30.4% 29.6% 30.1% 30% 29.4%* 28.2% 28.6%* 28% 26% 25.0% 25.6% 24.3% 26.2% 26.7% 24% 25.6% 25.3% 25.2% 22% 23.1% 23.5% 21.8% 22.1% 21.6% 21.9% Temperature Control 20% 19.7% 18% 16% 2009 2010 2011 2012 2013 2014 2015 2016
Slide 22: Income Statement Non-GAAP
Income Statement Non-GAAP ($ in millions) Sept 2021 YTD Sept 2020 YTD Sept 2019 YTD Amount % of Sales Amount % of Sales Amount % of Sales Net Sales $ 988.9 100.0% $ 845.9 100.0% $ 896.7 100.0% Gross Profit 288.3 29.1% 242.5 28.7% 259.0 28.9% SG&A Expenses 181.7 18.4% 163.7 19.4% 180.5 20.0% Operatin
Slide 23: Condensed Balance Sheet
Condensed Balance Sheet Actual Q3 2021, Q3 2020 ($ in millions) Dollars Ratios 2021 2020 2021 2020 Cash and Equivalents $ 33.1 $ 16.8 Accounts Receivable/DSO 224.4 238.0 55 60 Inventory/Turns 414.7 311.4 2.4 2.2 Unreturned Customer Inventory 23.4 20.0 Other Assets 500.1 364.9 Total Assets $ 1,195.7
Slide 24: Condensed Statement of Cash Flows
Condensed Statement of Cash Flows (IN MILLIONS) September YTD Full Year 2021 2020 2020 NET INCOME $72.2 $48.2 $57.4 DEPRECIATION & AMORTIZATION 20.2 19.3 26.3 ACCOUNTS RECEIVABLE (15.3) (83.9) (71.9) INVENTORY (52.7) 53.3 18.0 ACCOUNTS PAYABLE 24.2 (21.8) (13.1) OTHER OPERATING ACTIVITIES 30.5 63.4
Slide 25: Appendix
Appendix On, \\ WOM Yoo VT
Slide 26: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures ($ in thousands, except per share amounts) NINE MONTHS SEPTEMBER 30, 2021 2020 2019 2018 2017 (Unaudited) EARNINGS FROM CONTINUING OPERATIONS GAAP EARNINGS FROM CONTINUING OPERATIONS $ 79,331 $ 57,675 $ 56,313 $ 44,697 $ 51,736 RESTRUCTURING AND INTEGRATI
Slide 27: Reconciliation of GAAP and Non-GAAP Measures (cont'd)
Reconciliation of GAAP and Non-GAAP Measures (cont’d) ($ in thousands) NINE MONTHS SEPTEMBER 30, 2021 2020 2019 2018 2017 (Unaudited) EBITDA WITHOUT SPECIAL ITEMS ATTRIBUTABLE TO SMP GAAP EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES $ 105,678 $ 76,793 $ 74,952 $ 60,498 $ 82,204 DEPRECIATION & AM
Slide 28: Reconciliation of GAAP and Non-GAAP Measures (cont'd)
Reconciliation of GAAP and Non-GAAP Measures (cont’d) ($ in thousands, except per share amounts) THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, EARNINGS FROM CONTINUING OPERATIONS 2021 2020 2021 2020 (Unaudited) (Unaudited) GAAP EARNINGS FROM CONTINUING OPERATIONS $ 29,172 $ 36,212
Slide 29: Thank You
Thank You On, \\ WOM Yoo VT
Standard Motor Products — Q3 2021 Earnings Presentation on 6ix