Q3'23
Earnings Presentation
October 19, 2023
GPC Snapshot (as of 9/30/2023)
Key Statistics
Founded | 1928 |
Headquarters | Atlanta, GA |
Countries Served | 17 |
Locations | ~10,680 |
• Distribution Centers | ~210 |
• Warehouses | ~700 |
• Retail (Owned/Independent) | ~9,770 |
Employees | ~58,000 |
Market Capitalization | ~$20.2B |
TTM Financial Highlights
Revenue1 | $23.0B |
• Automotive | 62% |
• Industrial | 38% |
Segment Profit Margin2 | 9.9% |
Free Cash Flow2 | ~$859M |
Dividend Yield3 | 2.6% |
Global Footprint
TTM Revenue by Region
15%
Europe
76%
North
America
9%
Australasia
Leading Global Distributor in Diversified End Markets
1See Appendix C 2See Appendix D 3Calculated based on annual dividend per share divided by share price as of 9/30/23
GPC Q3'23 EARNINGS PRESENTATION | 2
Safe Harbor Statement
FORWARD-LOOKINGSTATEMENTS: 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 harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in the future tense and all statements accompanied by words such as "expect," "likely," "outlook," "forecast," "preliminary," "would," "could," "should," "position," "will," "project," "intend," "plan," "on track," "anticipate," "to come," "may," "possible," "assume," or similar expressions are intended to identify such forward-looking statements. These forward-looking statements include our view of business and economic trends for the remainder of the year, our expectations regarding our ability to capitalize on these business and economic trends and to execute our strategic priorities, and the updated full-year 2023 financial guidance provided. Senior officers may also make verbal statements to analysts, investors, the media and others that are forward-looking. We caution you that all forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information, you are cautioned not to place undue reliance on our forward-looking statements. Actual results or events may differ materially from those indicated as a result of various important factors. Such factors may include, among other things, changes in general economic conditions, including unemployment, inflation (including the impact of tariffs) or deflation, financial institution disruptions and geopolitical conflicts such as the conflict between Russia and Ukraine and the conflict in the Gaza strip; volatility in oil prices; significant cost increases, such as rising fuel and freight expenses; public health emergencies such as the COVID-19 pandemic, including the effects on the financial health of our business partners and customers, on supply chains and our suppliers, on vehicle miles driven as well as other metrics that affect our business, and on access to capital and liquidity provided by the financial and capital markets; our ability to maintain compliance with our debt covenants; our ability to successfully integrate acquired businesses into our operations and to realize the anticipated synergies and benefits; our ability to successfully implement our business initiatives in our two business segments; slowing demand for our products; the ability to maintain favorable supplier arrangements and relationships; changes in national and international legislation or government regulations or policies, including changes to import tariffs, environmental and social policy, infrastructure programs and privacy legislation, and their impact to us, our suppliers and customers; changes in tax policies; volatile exchange rates; our ability to successfully attract and retain employees in the current labor market; uncertain credit markets and other macroeconomic conditions; competitive product, service and pricing pressures; failure or weakness in our disclosure controls and procedures and internal controls over financial reporting, including as a result of the work from home environment; the uncertainties and costs of litigation; disruptions caused by a failure or breach of our information systems, as well as other risks and uncertainties discussed in our Annual Report on Form 10-K for 2022 and from time to time in our subsequent filings with the SEC. Forward-looking statements speak only as of the date they are made, and we undertake no duty to update any forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent Forms 10-K,10-Q,8-K and other reports filed with the SEC.
NON-GAAPMEASURES: This presentation contains certain financial information not derived in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP"). These items include adjusted net income, adjusted operating and non-operating expenses, total segment profit, total segment margin, adjusted EBITDA, adjusted diluted earnings per share and free cash flow. We believe that the presentation of these non-GAAP measures when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provide meaningful supplemental information to both management and investors that is indicative of our core operations. We considered these metrics useful to investors because they provide greater transparency into management's view and assessment of our ongoing operating performance by removing items management believes are not representative of our operations and may distort our longer-term operating trends. We believe these measures are useful and enhance the comparability of our results from period to period and with our competitors, as well as show ongoing results from operations distinct from items that are infrequent or not associated with our core operations. We do not, nor do we suggest investors should, consider such non-GAAP financial measures as superior to, in isolation from, or as a substitute for, GAAP financial information. We have included reconciliations of this additional information to the most comparable GAAP measure in the appendix of this presentation. We do not provide forward-looking guidance for certain financial measures on a GAAP basis because we are unable to predict certain items contained in the GAAP measures without unreasonable efforts. These items may include acquisition-related costs, litigation charges or settlements, impairment charges, and certain other unusual adjustments.
GPC Q3'23 EARNINGS PRESENTATION | 3
Key Messages
- Solid quarter, which includes double-digitearnings growth
- Strategic transformation to a global Automotive and Industrial company is a competitive advantage that distinguishes GPC in the marketplace
- Continue to benefit from business mix and the geographic diversity of our operations
- We want to thank our global GPC teammates for their hard work
Strategic Initiatives and Focused Team Execution Delivering Results
GPC Q3'23 EARNINGS PRESENTATION | 4
Q3'23 Performance
Sales | Gross Margin | EBITDA | Segment Profit2 | Segment Margin2 | Diluted EPS | |
$5.8B | 36.2% | $565M $605M | 10.4% | $2.49 | ||
Up 2.6% | Improved 130 bps | Up 7%1 | Up 10% | Improved 70 bps | Up 12%1 | |
At September 30
Cash From Operations | Working Capital3 | Capital | Ample Liquidity | Financial |
$1.1B YTD | $1.2B | Structure | $2.2B | Strength and |
1.6x | Flexibility to | |||
Free Cash Flow2 | Drive Growth | |||
$733M YTD | Total Debt to Adj | |||
EBITDA (TTM) 1 | ||||
All comparisons are YoY unless otherwise stated 1Adjusted for certain items in 2022 that the company believes are not representative of our continuing operations. Non-GAAP financial measures | GPC Q3'23 EARNINGS PRESENTATION | 5 | |||
reconciled in Appendix D 2Non-GAAP financial measures reconciled in Appendix D 3Working capital is defined as current assets less current liabilities. | ||||
Q3'23 Industrial Performance
Global Sales1 | Global Comps1,2 | Segment Profit3 | Segment Margin3 |
$2.2B | +0.3% | $283M | 12.9% |
Up 0.6% | 20% comp in the PY | Up 17% | Improved 180 bps |
Market | Total Sales4 |
North America | +0.1%1 |
Australasia | +14.1% |
1Global Industrial and North America results include one less selling day in the U.S., which the company estimates negatively impacted Global Industrial sales growth and comp sales growth by approximately 160bps
2See Appendix B; 3See Appendix C; 4Local Currency; All comparisons are YoY unless otherwise stated
Highlights:
- 13th consecutive quarter of margin expansion
- Making progress with sales excellence, pricing, e-commerce and other initiatives that are helping win profitable market share
- Opened second fulfillment center consolidating various facilities while improving its productivity, efficiency, speed and service to its customers
- Expect to exceed KDG synergy target of $50 million by end of year, a full year early
GPC Q3'23 EARNINGS PRESENTATION | 6
Q3'23 Automotive Performance
Global Sales1 | Global Comps1,2 | Segment Profit3 | Segment Margin3 |
$3.6B | +0.6% | $322M | 8.9% |
Up 3.9% | 9% comp in the PY | Up 4% | In-line with the PY |
Market | Total Sales4 | Comp Sales2,4 |
U.S. | (1.1%)1 | (2.9%)1 |
Canada | +3.7% | +2.9% |
Europe | +10.9% | +6.8% |
Australasia | +6.2% | +4.7% |
1Global Automotive and U.S. Automotive results include one less selling day in the U.S., which the company estimates negatively impacted Global Automotive sales growth and comp sales growth by approximately 100bps and US Automotive sales growth and comp sales growth by 170bps
2See Appendix B; 3See Appendix C; 4Local Currency; All comparisons are YoY unless otherwise stated
Highlights:
- Total Automotive results benefited from global diversification
- US Automotive below expectations, taking swift actions to address the key factors
- Europe's eighth consecutive quarter of double- digit sales growth
- Australasia team delivered record sales and profit
GPC Q3'23 EARNINGS PRESENTATION | 7
How We Win
Foundational Priorities for Strategic Investments
Talent & | Sales |
Culture | Effectiveness |
Develop high potential | Utilize data and analytics |
talent and infuse | to understand our |
capabilities into the | customer segments and |
organization to build | drive solution-based |
diverse, high-performing | sales and commercial |
teams | strategies |
Technology
Enhance data and digital capabilities to deliver a best-in-class customer experience, profitable growth and operational productivity
Supply | Emerging |
Chain | Technology |
Modernize operations | Lead in emerging |
to increase productivity | technologies and leverage |
and efficiency across | our unique positioning, |
inventory, facilities and | global scale and |
logistics capabilities | One GPC team approach |
Mergers & Acquisitions
Acquire strategic assets and create value via scale, footprint, customer relationships, products and services and technology
GPC Q3'23 EARNINGS PRESENTATION | 8
Effective Capital Allocation
YTD 2023 Capital Deployment
35%31%
~$1.1B
15% 19%
Reinvestment | M&A | Share Repurchases | Dividend | ||||
Key Priorities
Reinvestment
- $350M CapEx YTD
- Projecting '23 CapEx of $375M - $400M
M&A
- $211M YTD
- Targeting additional acquisitions in '23
Share Repurchases
- $172M spend for ~1.1M shares YTD
- Plans for additional share buy-backs in '23
Dividend
- $393M in cash dividends paid YTD
- 2023 cash dividend of $3.80 per share, +6% from 2022
- 67th consecutive year of increased dividends paid to our shareholders
GPC Q3'23 EARNINGS PRESENTATION | 9
2023 Outlook1
Current | Previous | |
Total Sales Growth | 4% to 6% | 4% to 6% |
• Automotive | 4% to 6% | 4% to 6% |
• Industrial | 4% to 6% | 4% to 6% |
Diluted EPS | $9.20 to $9.30 | $9.15 to $9.30 |
Adj Diluted EPS | $9.20 to $9.30 | $9.15 to $9.30 |
Adj EPS Growth | 10.3% to 11.5% | 10% to 11.5% |
Cash from Operations | $1.3B to $1.4B | $1.3B to $1.4B |
Free Cash Flow2 | $900M to $1.0B | $900M to $1.0B |
Full-year growth rates and EPS assume FX headwind of <1.0%
OTHER ASSUMPTIONS
- Corporate expenses ~$300M-$325M
- Capex ~$375M-$400M
- Depreciation and amortization ~$350M-$360M
- Interest expense ~$80M
- Tax rate 24.5%-25.0%
1Our guidance considers several factors, including recent business trends and financial results, current growth plans, strategic initiatives, global economic outlook, geopolitical conflicts and the | GPC Q3'23 EARNINGS PRESENTATION | 10 |
potential impact on results. We will update full-year guidance during 2023, as appropriate. 2A non-GAAP measure (See Appendix D) |
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Genuine Parts Company published this content on 19 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 October 2023 12:26:33 UTC.