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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.
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All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Investment Highlights
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Company Overview
Founded in 1928
Leading distributor to four % Net Sales by Segment
TTM Ended Sep 30, 2017
primary end-markets:
- Automotive Parts (APG)
- Industrial Parts (Motion Industries)
- Business Products (S.P. Richards) 5%
12%
- Electrical / Electronic Materials (EIS)
52%
Critical partner to 31%
our customers:
- Best in class operating and
distribution efficiencies
- Industry leading coverage of
consumable/replacement items $15.9 Billion
- Outstanding just-in-time service Annual Sales
- Technology solutions
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Portfolio Optimization
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Track Record of Success
Acquired Acquired
Acquired
35%
Established IPO Traded On Acquired Ownership
NYSE: GPC
2010-
1925 1928 1948 1968 1975 1976 1998 1999 2014 2013 2017
Founded
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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
+3.7% +1.6% +11.4%
9.5
-8.7%
8.5
7.5
2007 2008 2009 2010
EPS 2011 2012
+8%
EPS EPS
EPS
2013 2014
-2% -14% EPS EPS
2015 2016
+20% +19% EPS
+16% EPS EPS
+6% +10%* EPS
+0.4%
* Comparative Results -0.9%
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Automotive Parts Group Highlights
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Quarterly Sales History
Sales
Billions
+4%
$2.25
+5% +4% -0- -2% -1% +1%
+22% +22% +4% +2% +3% +4%
$2.00 +25% +23% -2% +2%
-0-
$1.75
+4% +2%
+6% +5% +3%
$1.50
$1.25
$1.00
$0.75
$0.50
$0.25
$-
2012 +4% 2013 +18.5% 2014 +8% 2015 -1% 2016 +1% 2017 YTD
(+4% ex Fx) +4%
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NA Automotive Parts Group Overview
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
$75 (U.S. Market Size - Retail Pricing)
$75B*
$67B
$60
+3%
5-Yr
CAGR
$45
+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
$600
Avg. Repair
Cost/Year
$400
1-5 Yr = $555
$829 $868 $861 $873
$741 $776 $857 6-12 Yr = $829
$644 $671
$573 $776 $802 $812
$484
$403
$200 > 12 Yr = $797
Vehicles 6+
$0 Years of Age
1 2 >70% of Fleet
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
11.7 Years
Average age of fleet increasing
$2.50/GL
Relatively low gas prices thru Sep 2017
+1.3% thru
Miles driven reaching new peaks Sep 2017
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Automotive Parts Group - Growth Opportunities
NAPA AutoCare
• 17,000+ Independent AutoCare Members
• $1.3+ Billion in 2016
Major Accounts • $2.1+ Billion in 2016
Outside Sales • Adding Outside Sales Representatives at Stores
Connectivity • Adding Installer Connectivity and Enhanced Capabilities
• Heavy Duty Parts, Import Parts, Paint, Tools & Equipment
Special Markets • Recent Acquisitions: Olympus & Auto Camping Imports; Global
Heavy Duty and Stone Truck Parts
Before
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NAPA Retail Store
Before
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NAPA Retail Store – New Store Concept
After
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Alliance Automotive Group
change based on final conversion of U.S. GAAP statements and mapping to GPC accounts
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Strategic Rationale
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European Automotive Aftermarket
Technological
Car parc size
developments
TOTAL MARKET VALUE AAG operates in the largest and most attractive
€68bn1 European markets
Source: Roland Berger
1 Perimeter—LV parts (tires included) plus tools and equipment, captive parts excluded, in EU's 28 countries; 2 Stats relate to 2016; 3 Parts only
4 Independent Aftermarket (“IAM”); IAM represents approx. 48% of total LV aftermarket in France, U.K., and Germany combined
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Top 3 position in the largest European markets
with significant opportunities for growth
IAM distribution players in France, U.K., Germany and Poland
#3 player2
3% market share1 AAG current
presence
2% market growth3
Expected AAG
presence by
December 2017
2.6
1.9
1.6
1.5
#1 player
32% market share1,3 1.4
2% market growth3 1.2
0.8
0.6
0.5
Source: Roland Berger and AAG estimates based on third party data
1 AAG's market share in the IAM segment (excluding the DIY channel) for LV part sell-out (2016)
2 Market position in Germany in the wholesalers segment of IAM (excluding integrated chains and DIY channel)
3 2016 – 2018E growth rate per Roland Berger report
4 Management estimates pro forma for pending acquisitions as of 2016 and per Roland Berger analysis
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Australasian & Mexico Expansion
NAPA Mexico
Growth Plan for Company
Owned and Independent NAPA
AUTOPARTS Stores
- 39 stores today.. and growing
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Motion Industries – Industrial Parts Group
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Quarterly Sales History
Sales
Millions
+7% +7% +7%
+7% +10% +10%
+3% -2% -4% +2% -2% -1%
$1,200 +4%
+12% +8% +4.5% -1% +4%
-2% -2.5% -8%
+2% +3%
$1,100
$1,000
$900
$800
$700
$600
$500
$400
2017 YTD
2012 +7% 2013 -0-% 2014 +8% 2015 -3% 2016 -0-
+7%
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Industrial Parts Group Overview
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Top Industries
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Industrial Parts Group
Growth Opportunities
Product Category Expansion
- Automation, Process Pumps and Safety
Only 7% share of market –
estimated at $70+ billion
Acquisitions
- 35% Investment in Inenco (Australia) April 2017
- Added Numatic Engineering – August 2017
- Added Apache Belts and Hose – Nov 2017
Expansion in New Markets
Repair, Fabrication and Assembly
E-Commerce
Vending, VMI and Store Room Mgmt
Share Gains with Major Accounts
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Business Products Group Highlights
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Quarterly Sales History
Sales
Millions
+3% +5% -5%
+15% +9% +5%
$500 +17%
+14% +1% +4%
-3%
+22%
$475
-2%
-1%
$450
-2% -1% -3%
-1% -0- +4%
$425
+3% -3%
$400 -4%
$375
$350
$325
$300
2012 -0-% 2013 -3% 2014 +10% 2015 +7.5% 2016 +2% 2017 YTD
+3%
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Business Products Group Overview
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Drive for Diversification
PRODUCT MIX
Office Supplies FBS Furniture Tech
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U.S. GDP and Employment Levels
-1.0 500
Q3'13 Q1'14 400
Q3'14 Q1'15
Q3'15 Q1'16 300
Q3'16 Q1'17
+1.7% in 13 Q3'17 200
+2.6% in 15 +1M New Jobs in
100
+2.4% in 14 +1.6% in 16 2017 thru Sep
0
Q3'13 Q1'14
Source: BEA.gov Q3'14 Q1'15
Q3'15 Q1'16
Q3'16 Q1'17
-4.5M in 2008/09 Q3'17
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Business Products Group
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Electrical Markets Group Highlights
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Quarterly Sales History
Sales
Millions
+11%
+35% +4% +2% +12%
$200 +32% -5% +5
+30% +23% +1% -0- -3% -9% -0-
$180
$160 +5%
+5% +9% -4% -5% +6%
-5%
-2%
$140
$120
$100
$80
$60
$40
$20
$-
2012 +5% 2013 -2% 2014 +30% 2015 +2% 2016 -5% 2017 YTD
9% 35
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Electrical Markets Group – Overview
• Baldor Anixter
• Eaton 36
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Evolving Sales Composition
5%
20% 36%
45%
38% 33%
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Electrical Markets Group
Index Supportive of Industry Growth
- Mfg. Contraction in Q4 2015 Followed by Ongoing Expansion -
Institute for Supply Management - Purchasing Managers Index
50
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Electrical Markets Group
Growth Opportunities
7% share of market –
Market Share Initiatives
estimated at $10+ billion
- Product Line Expansion
- New Products
- Enhanced Services
Acquisitions
- CPS in 2016 Both for
Wire & Cable
- Empire in April 2017 39
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Drivers and Opportunities
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Financial Focus
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Mixed Operating Margin Trend
8.5
8.3 8.1%
8.0 7.8%
7.8
7.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 17-Sep
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Financial Focus
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Financial Focus – Capital Structure
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
44
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Improving W/C Efficiency Trends
30.0
23.1%
25.0
20.0
15.0
10.0 13.3%
Steady and consistent improvement and W/C Eff.
positioned to further improve with effective asset
5.0
management and sales and earnings growth
0.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 17-Sep
45
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Improvement in Working Capital
140
DIO - 106
100
DPO - 104
80
60
DSO - 47
DSO - 45
40
DPO - 39
20
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 46
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…..Compressed CCC
135
CCC
CCC - 133
125
115
105
95
85
75
65
55
CCC - 49
45
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
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Return On Invested Capital
48
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Steady and Strong Cash Flows
1,050
$800 Mil
900
750 $255M
600
$150M
450
300 $395M
150
0
2012 2013 2014 2015 2016 2017 e
49
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Commitment to Shareholders
50
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Recent Acquisitions
5 4 1 3
2015 4 Store Groups Miller, Oil & Gas Connect-Air JAL, Dinesol $180M
AEA Lake Erie, Moss Malt
11 5 1 2
Olympus, Covs, Epperson, CPS Safety Zone,
2016 Global, AMX, MO Power, RMC Jan/San $600M
Auto-Camping, ASL, Colmar, OBBCO,
5 Store Groups Braas
10 3 1
AAG, 6 Store Groups $2.0B
35% Inenco
2017 (+48 new stores),
(Australia), Empire
Stone Truck Parts,
Numatic, Apache
Welch, Sulco T&E
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Commitment to Shareholders
Dividend Record
3 2017 Annual Dividend $2.70
3% Yield and +3% from 2016
2.5
2
61 Consecutive Years of
Increased Dividends
1.5
0.5
0
2017
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Commitment to Shareholders
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Commitment to Shareholders
Share
81.8 120.6 95.9 292.3 181.4
Repurchases
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GPC Outlook & Objectives
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Total Return to Shareholders
56
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P/E, Stock Price, EPS & Dividend Trends
Market Capitalization
110.00 $14.2 Billion @ Dec 31, 2016 5.00
4.75
100.00 4.50
4.25
90.00 4.00
3.75
80.00
3.50
70.00
P/E 3.25
3.00
60.00 Stock Price 2.75
2.50
50.00 EPS 2.25
2.00
40.00 Dividend 1.75
1.50
30.00
1.25
20.00 1.00
0.75
10.00 0.50
0.25
0.00 0.00
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 11 12 14 16
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Thank You!
Contact Information:
Carol Yancey - EVP & CFO: 678-934-5044
Carol_yancey@genpt.com
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.