Investor Presentation All Content is Company Confidential and Exclusive Property of Genuine Parts Company. All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Safe Harbor Statement Some of the comments made today will be forward-looking and are made under the Private Securities Litigation Reform Act of 1995. These statements include projections of revenue, earnings, capital structure, and other financial items; statements on the plans and objectives of the Company and its management; statements of future economic performance and assumptions underlying the statements regarding the Company and its business. The Company's actual results could differ materially from any forward-looking statements due to several important factors, including, among other things, slowing demand for the Company’s products, changes in general economic conditions, including, unemployment, inflation or deflation, high energy costs, uncertain credit markets and other macro- economic conditions, the ability to maintain favorable vendor arrangements and relationships, disruptions in our vendors’ operations, competitive product, service and pricing pressures, the Company’s ability to successfully implement its business initiatives in each of its four business segments, the uncertainties and costs of litigation, as well as other risks and uncertainties described in the Company's latest SEC filings. The Company assumes no obligation to update any forward-looking statements made during this presentation or in these materials except as required by law. 2 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Investment Highlights Leading global distributor in diversified end markets Proven track record of steady growth Strong balance sheet with meaningful free cash flow generation Committed to increasing shareholder value Opportunity for market share growth in large and fragmented industries Large customer base built upon long-standing relationships 3 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Company Overview Founded in 1928 % Net Sales by Segment Leading distributor to four 12-Mos. Ended December 31, 2016 primary end-markets: Automotive Parts (APG) - Industrial Parts (Motion Industries) - Office Products (S.P. Richards) - 4% 13% Electrical / Electronic Materials (EIS) - 53% Critical partner to 30% our customers: Best in class operating and - distribution efficiencies Industry leading coverage of - $15.3 Billion consumable/replacement items Annual Sales Outstanding just-in-time service - Technology solutions - 4 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Portfolio Optimization Global Presence with Significant Brand Strength Financial Strength with Access to Capital and Low Cost of Capital Enhanced Buying Power for Direct and Indirect Spend Global sourcing, common suppliers and providers, volume/scale - Common Distribution Processes Shared talent, practices, technology & systems, services, - transportation We consistently challenge ourselves to support how GPC is the “optimal” owner/operator of our portfolio businesses 5 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Track Record of Success Strong history of sales & profit growth Dividend growth - 2017 marks GPC’s 61 st - Sales have increased in 84 of 89 year history consecutive year of - Profit has increased in 73 of 89 year history dividend increases Acquired Acquired Acquired Acquired Traded On Established IPO NYSE: GPC 2010- 1925 1928 1948 1968 1975 1976 1998 1999 2013 2014 Acquired Record Sales Acquired & Earnings Founded 6 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Ten Year Sales History $ Billions Record Sales & Earnings Per Share 15.5 in 7 of Last 10 Years 14.5 +0.4% -0.4% 13.5 +9.0% +8.2% 12.5 +4.5% 11.5 +11.2% 10.5 +1.6% +11.4% +3.7% 9.5 -8.7% 8.5 7.5 2007 2008 2009 2010 2011 EPS 2012 2013 EPS EPS 2014 +8% EPS 2015 -2% EPS 2016 -14% EPS +20% EPS +19% EPS +16% EPS +6%* EPS +10%* +0.4% * Comparative Results -0.9% 7 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Automotive Parts Group Highlights Largest auto parts network in North America NAPA Established 1925 2016 Sales at $8.1 billion US: 57 DC’s & ~ 6,000 stores (1,100 Co. owned) - 53% Canada:12 DC’s & ~ 700 stores (200 Co. owned) - Mexico: 12 DC’s & 40 stores - Balkamp: Parts Re-Packager - Rayloc: Brake Products Distributor - Altrom: OE Import Parts - Heavy Vehicle Parts Group: Class 6,7,8 trucks - 11 DC’s & 550 Store footprint in Australia and New Zealand Superior NAPA brand name Highly acclaimed customer service Positioned to benefit from positive industry trends 8 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Quarterly Sales History Sales Billions $2.25 -1% +5% -0- +1% +4% -2% +22% +2% +22% +3% +4% -2% +2% +25% +23% -0- $2.00 +4% +2% $1.75 +5% +3% +6% $1.50 $1.25 $1.00 $0.75 $0.50 $0.25 $- 2012 +4% 2013 +18.5% 2015 -1% 2016 +1% 2014 +8% (+4% ex Fx) 9 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Automotive Parts Group Overview (90%) NAPA branded products Major Competitors NAPA Know How Differentiators: U.S . - AutoZone, Advance Auto Parts & O’Reilly product quality, depth and breadth Canada - Uni-Select & AAP/Carquest - service capabilities - Australasia - Supercheap, Burson & Autobarn technology offering - Commercial/DIFM customers Major Account Customers professional service repair facilities - approx. 75% of NAPA sales - 17,000+ NAPA AutoCare Centers Major Accounts: AAA, Goodyear, Firestone, TBC, Midas, CBAdvantage Retail/DIY customers individual consumer customer - approx. 25% of NAPA sales - 10 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
The Automotive Aftermarket Market Trends Favoring the Larger DIFM Segment DIFM billions DIY (U.S. Market Size - Retail Pricing) $75 $75B* $67B $60 +3% 5-Yr CAGR $45 $30 $32B* $30B +1% $15 5-Yr CAGR $0 2011 2012 2013 2014 2015 2016 2017* 2018* 2019* 2020* 11 Source: Frost & Sullivan/ACA * Forecasted All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Vehicle Fleet Trends Consumers Are Maintaining Older Vehicles Prime Years for Aftermarket Repair $1,000 Start in Year 6 $800 Annual Spend per Vehicle Avg. Repair $600 Cost/Year 1-5 Yr = $555 $400 $403 $484 $573 $644 $671 $741 $776 $829 $868 $861 $873 $857 6-12 Yr = $829 $802 $776 $812 > 12 Yr = $797 $200 Vehicles 6+ Years of Age $0 >75% of Fleet 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15+ Vehicle Age 12 Source: IMR, Inc. Automotive Research, BB&T All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Fundamentally Strong Aftermarket +1 to 2% Total vehicle fleet growing thru 2020 11.6 Years Average age of fleet increasing $2.25/GL in 2016 Historical low gas prices Down 10% from 2015 +2.8% in 2016 Miles driven reaching new peaks 13 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Automotive Parts Group - Growth Opportunities Key Areas of Focus NAPA Initiatives • Plans for New NAPA AUTOPARTS Stores in U.S. – Merle’s, Standard and Olympic Store Groups New Distribution • Expansion in Canada, Mexico, Australia and New Zealand • 17,000+ Independent AutoCare Members NAPA AutoCare • $1.3+ Billion in 2016 • $2.1+ Billion in 2016 Major Accounts • Adding Outside Sales Representatives at Stores Outside Sales • Adding Installer Connectivity and Enhanced Capabilities Connectivity • Heavy Duty Parts, Import Parts, Paint, Tools & Equipment • Acquired Olympus & Auto Camping Imports & Global Heavy Special Markets Duty in 2016 • Retail Impact Store Initiative Store Resets & Upgrades • Ongoing Program to Consistently Refresh and Upgrade Stores 14 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
NAPA AutoCare Center Before The Aftermarket’s Preeminent Commercial Program for the Independent Repair Center 15 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
NAPA Retail Store Before 16 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
NAPA Retail Store – New Store Concept After 17 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Australasian & Mexico Expansion GPC Asia Pacific Market Share Leader in Australia and New Zealand 550+ Company owned stores - Added 50+ stores in 2016 - NAPA Mexico Growth Plan for Company Owned and Independent NAPA AUTOPARTS Stores 33 stores today.. and growing - 18 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
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