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GPC Investor Presentation November 2022
GPC Investor Presentation November 2022
GPC Investor Presentation November 2022
Investor Presentation
November 2022
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 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 and our expectations regarding our ability to capitalize on these business and economic trends and to execute our strategic
priorities, and the updated full-year 2022 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 and geopolitical conflicts
such as the conflict between Russia and Ukraine; volatility in oil prices; significant cost increases, such as rising fuel and freight expenses; the extent and duration of the disruption to our
business operations caused by the global health crisis associated with 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 2021 Annual Report on Form 10-K and Item 1A, Risk Factors, in our report on Form10-Q for the quarters ended
March 31, 2022 and June 30, 2022 (all of which may be amplified by the COVID-19 pandemic and geopolitical conflicts, such as the current conflict between Russia and Ukraine) 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-GAAP MEASURES: This presentation contains adjusted net income, adjusted diluted earnings per share, adjusted EBIT and adjusted EBITDA, adjusted operating expenses, adjusted
tax rate, segment profit and free cash flow, which are financial measures that are not derived in accordance with United States generally accepted accounting principles ("GAAP"). The
Company considers these non-GAAP measures useful to investors because they provide greater transparency into management’s view and assessment of the Company’s core operating
performance. These measures are widely used by analysts, investors and competitors in our industry, although our calculation of the measure may not be comparable to similar measures
disclosed by other companies, because not all companies and analysts calculate these measures in the same manner. The Company does not, nor does it suggest investors should, consider
non-GAAP financial measures superior to, in isolation from, or as a substitute for, GAAP financial information. The Company has included reconciliations of this additional information to the
most comparable GAAP measure in the appendix of this presentation.
01 Leading global distributor with scale and brand strength to capture market share
Strong track record of strategic acquisitions to drive growth in large, fragmented addressable
02 markets
Optimized portfolio and organizational structure for profitable growth in both global Automotive
04 and Industrial
05 Strong balance sheet, cash flow, disciplined capital allocation and history of consistent dividends
The GPC team had record results, consisting of double-digit sales and
earnings growth
We are extremely proud of our 53,000 talented GPC teammates who are at
the core of our success
Dividend Growth
2022 Marks GPC’s 66th
2017 Consecutive Year of Dividend
Acquired 2019 2021
1925 1948 Increases
1975 1998 Acquired 2020 Record
Established IPO Acquired Acquired Sold S.P. Earnings
S.P. Richards Richards
Sold
Auto Todo
and EIS
$18.0
$14.1 $1,350
$16.0
$1,137
$14.0
$1,004
$1,200
$12.0
$1,000
$10.0
$800
$8.0
$600
$6.0
$400
$4.0
8.0% 8.7% 8.5% 8.4% 8.4% 8.1% 7.8% 8.0% 7.9% 8.2% 8.8%
$2.0 $200
$0.0 $0
2011 2012 2013 2014 2015 2016 2017 2018* 2019* 2020* 2021* 2011 2012 2013 2014 2015 2016 2017 2018* 2019* 2020* 2021*
* 2018 – 2021 continuing operations only; prior years are as originally reported; no adjustments prior to 2017 for EBITDA; For the period 2017 – 2021, adjusted EBITDA for these periods excludes
restructuring, inventory adjustment and transaction and other certain costs. These amounts are non-GAAP measures (See Reconciliation of Non-GAAP Measures) 1 2011 adjusted to exclude discontinued
GPC INVESTOR PRESENTATION | 6
and divested operations
Automotive Snapshot
Business Highlights Revenue ($B) Segment Profit ($M) & Margin (%)
• Largest global auto parts network $12.5 $1,200
$1,073
30.0%
• ~170 global distribution centers and ~9,585 stores, $10.5 $11.0 $10.9
$10.2
$12.0
$720
• 25,000+ global repair center partnerships (AutoCare,
$800 20.0%
$8.0
$4.0
Australasia $0.0
$- 0.0%
• Global Sales by segment: 2017 2018 2019 2020 2021 YTD YTD 2017 2018 2019 2020 2021 YTD YTD
‒ ~80% Commercial / DIFM 21 22 21 22
‒ ~20% Retail / DIY Revenue % Change Segment Income Segment Margin
Growth Opportunities Program Partnerships & Major Accounts Select Store & Product Banners
• Sales Team Effectiveness
• Commercial sales programs and promotions
• Improve inventory availability North America
• Strengthening supply chain
• Omni-channel investments – B2B & B2C
• Strategic pricing initiatives
• Maximize value of NAPA and other key brands
• Expand global footprint Europe
22%
North America
Australasia Australasia
12% 66%
Europe
$656
$5.8 $5.7 $595
$700
$4.7 $487
$600
$482
14.0%
$500
$4.0
$400
3.2% 1 9.4%
2022 $3.0
4.0%
$300
8.5%
• Provides additional $1B in revenue -4.5%1 11.0% 8.0%
7.7%
$2.0
7.6%
$200
$1.0
$100
Australasia $- -6.0%
$-
− ~30 distribution centers 2017 2018 2019 2020 2021 YTD YTD 2017 2018 2019 2020 2021 YTD YTD
21 22 21 22
− ~70 service centers
Revenue % Change Segment Profit Segment Margin
− ~720 branches
• Access to a broad portfolio of 12M+ parts Industries Served 2022 Sales by Product Category2
Growth Opportunities Bearings / Power Transmission 29%
• Equipment & Machinery • Fabricated Metal Products
• Omni-channel buildout / e-commerce acceleration Industrial / Safety Supplies 14%
• Food & Beverage Processing • Aggregate & Cement
• Expand industrial services and solutions capabilities Kaman Distribution Group 13%
• Pulp & Paper • Rubber & Plastic Products
• M&A to further boost products/services offering Hydraulics / Pneumatics 10%
• Iron & Steel • Equipment Rentals / Leasing
• Enhance pricing and product category management Misc. Products & Services 9%
• Automotive • Oil & Gas Extraction
• Network optimization and automation for improved Material Handling 8%
productivity • Chemical & Allied Products • Mining
Seals, Pumps & Hoses 8%
• Lumber & Wood Products • Distribution/Logistics
2022 Sales by Region2 Electrical & Automation 7%
• Electric Vehicle Battery
Linear 2%
5% Select Customers
North America
Australasia
95%
1 Excludes Impact of Divestitures 2 For the nine months ended 9/30/22 GPC INVESTOR PRESENTATION | 8
The Power of One GPC
Leading Brands
Distribution / Supply
Chain
31%
E. Jenner Wood Juliette Pryor
John Johns
(2014) (2021)
(2002)
Retired Executive Vice General Counsel &
Legal 31% Retired Chairman & CEO
President Corporate Secretary
Protective Life Corporation
SunTrust Banks, Inc Albertsons Companies
E
Reducing carbon
emissions
S
Environmental Improving
diversity, equity
G
and inclusion
Social
Enhancing ESG
Governance
governance Click here to access the report
and learn more about GPC’s
progress in these areas.
5
10 10 10
United States
Europe North America
Canada
100 125 Australasia
Australasia
Mexico
200
Regions Market Share Industry Growth Regions Market Share Industry Growth
United States 7% +2-3% North America 4% +2-3%
Europe 5% +1-2% Australasia 5% +2-3%
Canada 15% +2-3% Total 4% +2-3%
Australasia 15% +2-3%
Mexico 1% +5-6%
Total 7% +2-3%
Proven Ability to Consolidate and Grow within Large and Fragmented Markets
GPC INVESTOR PRESENTATION | 17
Sustainable Competitive Advantages
• Long and Successful Company history • Shared services and technologies • Improved omni-channel capabilities to
meet customers’ needs and accelerate
• Largest global automotive aftermarket • Automation/Productivity improvements digital growth
and industrial businesses
• Purchasing scale with shared • Agile development of digital
• Expanding the NAPA and Mi brands suppliers across automotive and technologies to innovate our supply
globally industrial chains
• Strategically co-located facilities • Utilizing the power of data analytics to
• Acquisition and integration expertise make better decisions about how we
price for our customers
Key value drivers – profitable growth, operating leverage, cash conversion and disciplined capital allocation – with the dividend
an important part of the GPC capital allocation strategy
Leadership positions in attractive, fragmented markets with scale and capabilities to win; leading global brands and long-
standing relationships based on customer service and expertise
Unique culture, based on core values and purpose, serves as important common foundation
Current Priorities – Profitable organic growth, operating productivity, disciplined and strategic capital deployment and
investments in talent to develop and build capabilities
Advancing longer-term strategic roadmap and excited for numerous opportunities with new technologies and emerging trends
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” product emerging
new capabilities into understand our deliver a best-in-class available in the “right” technologies,
the organization and unique customer customer experience market at the “right” leveraging our unique
recruit diverse talent segments and drive and profitable growth time through positioning, global
increasing mix of while investing in continuous scale and One GPC
traditional selling and foundational digital improvements in team approach
digital strategies elements inventory, facility
productivity, logistics
and technology
M&A
Strategic bolt-on acquisitions remain a Acquisition pipeline remains Continue to refine our processes to move
key part of our GPC growth strategy active and actionable faster, be disciplined and create value
69
50%
$80.00
$70.00
61
55 40% receivables
47 48
$60.00
$50.00
22% 41 38
30%
18% 30
14% 13% • Extended terms and programs with
11% 11% 11%
20%
9%
$30.00
8% 7% 6 1 vendors
$20.00
10%
$10.00
$-
6% 6% 0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 TTM
2022
Cash Conversion Cycle (Days) Working Capital (% of Sales) Cost Savings Initiatives
• Reinvestment in core businesses to
Cash from Operations ($M) enhance efficiencies and productivity
• Significant progress in improving cost
$2,015 *
structure
$1,159 $1,145
$1,258 $1,245 *
$1,057 $946 $1,008
$906
$625
$790 $815 $833
Cash Flows
• Robust cash generation
• Resilient cash flow in economic downturns
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 YTD YTD
21 22
13% M&A
• Targeting strategic/bolt-on acquisitions for 2022
33%
• Acquired Kaman Distribution Group in January 2022
Share Repurchases
~$6.0B1 36% • Plans for additional share buy-backs
Dividend
• 2022 cash dividend of $3.58 per share, +10% from 2021
18% ‒ 66th consecutive year of increased dividends paid to our
shareholders
Key Product Category Extension Accretive Sales Growth and Margin Rates
$0.26
'82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 20 ’21 ’22
Leading global Automotive and Industrial distributor with scale to grow market leading positions in large fragmented markets with
01 favorable long-term trends
Leveraging sustainable competitive advantages including global presence, brand strength, best-in-class operating and distribution
02 efficiencies and enhanced technology solutions
Solid track record of consistent sales and earnings growth with strategic framework to enhance profitability through increased
03 productivity and margin expansion
04 Streamlined portfolio to focus on key Automotive and Industrial markets with well defined M&A criteria for expansion
Strong balance sheet, ample liquidity and significant free cash flow combined with disciplined capital allocation maximizes
05 shareholder value creation
27
Segment Data Appendix A
Adjustments:
Loss on software disposal (1) 61,063 — — —
Product liability damages award (2) 77,421 — — —
Goodwill impairment charge (3) — 506,721 — —
Restructuring costs (4) — 50,019 142,780 —
Realized currency loss on divestitures (5) — 11,356 34,701 —
Gain on insurance proceeds related to SPR Fire (6) (3,862) (13,448) — —
Gain in equity investments (7) (10,229) — (38,663) —
Inventory adjustment (8) — 40,000 — —
Transaction and other costs (9) 3,655 39,817 31,254 34,930
Total adjustments 128,048 634,465 170,072 34,930
Tax impact of adjustments (29,828) (32,822) (39,704) (10,170)
Adjusted net income from continuing operations $ 997,010 $ 765,038 $ 776,843 $ 774,294
(in thousands, except per share and per share data) 2021 2020 2019 2018
Diluted earnings per share from continuing operations $ 6.23 $ 1.13 $ 4.42 $ 5.09
Adjustments:
Loss on software disposal (1) 0.42 — — —
Product liability damages award (2) 0.54 — — —
Goodwill impairment charge (3) — 3.49 — —
Restructuring costs (4) — 0.34 0.98 —
Realized currency loss on divestitures (5) — 0.08 0.24 —
Gain on insurance proceeds related to SPR Fire (6) (0.03) (0.09) — —
Gain in equity investments (7) (0.07) — (0.26) —
Inventory adjustment (8) — 0.28 — —
Transaction and other costs (9) 0.03 0.27 0.20 0.24
Total adjustments 0.89 4.37 1.16 0.24
Tax impact of adjustments (0.21) (0.23) (0.27) (0.07)
Adjusted diluted earnings per share from continuing operations $ 6.91 $ 5.27 $ 5.31 $ 5.26
Weighted average common shares outstanding — assuming dilution 144,221 145,115 146,417 147,241
GPC INVESTOR PRESENTATION | 29
Reconciliation of Non-GAAP Financial Measures Appendix B
Adjusted EBIT and Adjusted EBITDA
(in thousands) 2021 2020 2019 2018
GAAP net income from continuing operations $ 898,790 $ 163,395 $ 646,475 $ 749,534
Interest expense, net 62,150 91,048 91,405 93,281
Income taxes from continuing operations 301,556 215,973 212,808 245,104
EBIT 1,262,496 470,416 950,688 1,087,919
Loss on software disposal (1) 61,063 — — —
Product liability damages award (2) 77,421 — — —
Goodwill impairment charge (3) — 506,721 — —
Restructuring costs (4) — 50,019 142,780 —
Realized currency loss on divestitures (5) — 11,356 34,701 —
Gain on insurance proceeds related to SPR Fire (6) (3,862) (13,448) — —
Gain in equity investments (7) (10,229) — (38,663) —
Inventory adjustment (8) — 40,000 — —
Transaction and other costs (9) 3,655 39,817 31,254 34,930
Adjusted EBIT $ 1,390,544 $ 1,104,881 $ 1,120,760 $ 1,122,849
Updated Outlook
Year Ended December 31, 2022
Net cash provided by operating activities from continuing operations $1.5 billion to $1.7 billion
Purchases of property, plant and equipment Approx. $350 million
Free Cash Flow $1.2 billion to $1.4 billion