gpc +investor+presentation+oct15
TRANSCRIPT
-
8/20/2019 GPC +Investor+Presentation+Oct15
1/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Investor
Presentation
-
8/20/2019 GPC +Investor+Presentation+Oct15
2/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Safe Harbo r Statement
Some of the comments made today will be forward-looking and are made
under the Private Securities Litigation Reform Act of 1995. These statementsinclude projections of revenue, earnings, capital structure, and otherfinancial items; statements on the plans and objectives of the Company andits management; statements of future economic performance andassumptions underlying the statements regarding the Company and itsbusiness. 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, changesin general economic conditions, including, unemployment, inflation ordeflation, high energy costs, uncertain credit markets and other macro-economic conditions, the ability to maintain favorable vendor arrangementsand relationships, disruptions in our vendors’ operations, competitive
product, service and pricing pressures, the Company’s ability to successfullyimplement its business initiatives in each of its four business segments, theuncertainties and costs of litigation, as well as other risks and uncertaintiesdescribed in the Company's latest SEC filings. The Company assumes noobligation to update any forward-looking statements made during thispresentation or in these materials except as required by law.
2
-
8/20/2019 GPC +Investor+Presentation+Oct15
3/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Investment High l igh ts
Leading distributor in diversified end markets
Proven track record of steady growth
Solid balance sheet with meaningful free
cash flow generation
Committed to increasing shareholder value
Opportunity for market share growth in
fragmented industries Large customer base built upon
long-standing relationships
3
-
8/20/2019 GPC +Investor+Presentation+Oct15
4/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Company Overv iew
Founded in 1928
Leading distributor to fourprimary end-markets:
- Automotive Parts (APG)
- Industrial Parts (Motion Industries)
- Office Products (S.P. Richards)- Electrical / Electronic Materials (EIS)
Critical partner toour customers:
- Best in class operating and
distribution efficiencies
- Industry leading coverage ofconsumable/replacement items
- Outstanding just-in-time service
- Technology solutions
% Net Sales by Segment
12-Mos. Ended September 30, 2015
$15.4 Billion #1 or #2 in Every Segment
13%
30%
5%
52%
4
-
8/20/2019 GPC +Investor+Presentation+Oct15
5/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Traded on NYSE:“GPC” 1968
Track Record of Success
Acquired MotionIndustries 1976
GPC Founded1928
GPC Record Sales& Earnings
AcquiredEIS 1998
AcquiredS.P. Richards 1975
NAPAEstablished 1925
IPO 1948
GPC = Quality + Consistency + Growth
Strong history of sales & profit growth
- Sales have increased in 63 of the last 65 years
- Profit has increased in 50 of the last 54 years
1925 1945 1955 1965 1975 1985 1995 2 5 2 14
Dividend growth- 2015 marks GPC’s 59th
consecutive year ofdividend increases
5
-
8/20/2019 GPC +Investor+Presentation+Oct15
6/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Ten Year Sales Histo ry
7.5
8.5
9.5
10.5
11.5
12.5
13.5
14.5
15.5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
+9.0%
Profit+11%
$ Billions
Profit+9%
Profit+6.5%
Profit-6%
Profit-16%
Profit+19%
Profit+19%
Profit+16%
Profit+6%*
Profit+10%*
+7.5%+6.9%
+3.7% +1.6%
-8.7%
+11.4%
+11.2%+4.5%
+8.2%
Record Sales and EPS in 2014
** 5th Consecutive Year **
6* Comparative Results
-
8/20/2019 GPC +Investor+Presentation+Oct15
7/54 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Au tomot ive Par ts Group Highl ights
Largest auto parts network in North America
September 2015 TTM Sales at $8.1 billion
- US: 60 DC’s & ~ 6,000 stores (1,100 Co. owned)
- Canada:12 DC’s & ~ 700 stores (200 Co. owned)
- Mexico: 12 DC’s & 27 stores
- Balkamp: Parts Re-Packager- Rayloc: Brake Products Distributor
- Altrom: OE Import Parts
- Heavy Vehicle Parts Group: Class 6,7,8 trucks
8 DC’s & 500 Store footprint in
Australia and New Zealand Superior NAPA brand name
Highly acclaimed customer service
Positioned to benefit from positiveindustry trends
52%
NAPA Establ ish ed 1925
7
-
8/20/2019 GPC +Investor+Presentation+Oct15
8/54 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Quarter ly Sales History
$-
$0.25
$0.50
$0.75
$1.00
$1.25
$1.50
$1.75
$2.00
$2.25
-0-
2011 +8%2009 -2% 2010 +7% 2013 +18.5% 2014 +8%
Sales
Billions
-5% -1%+6% +6%
+7% +7%
+9%+9%
+9% +9%
+6%+6%
+4%+2.5%
+5% +3%
+22%
+23%
+4%
Sales
YOY
+25%+22%
-7%
+5%+4%
8
-0-
YTD 2015-1%
2012 +4%
-2%
-
8/20/2019 GPC +Investor+Presentation+Oct15
9/54 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Au tomot ive Par ts Group Overv iew
Sell primarily (90%) NAPAbranded products to theautomotive aftermarket
Differentiators: productquality and breadth, servicecapabilities & technology offering
Commercial/DIFM customersrepresent professional service repairfacilities and account for 70-75% ofNAPA sales
16,000+ NAPA AutoCare Centers
Major Accounts: AAA, Goodyear,Firestone, TBC, Midas, CBAdvantage
Retail/DIY customers represent theindividual consumer and account for25-30% of NAPA sales
Major CompetitorsU.S. - AutoZone, Advance Auto Parts & O’Reilly
Canada - Uni-Select & AAP/Carquest
Australasia - Supercheap, Burson & Autobarn
Major Account Customers
9
-
8/20/2019 GPC +Investor+Presentation+Oct15
10/54 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
The Automot ive A ftermarket
Market Trends Favo ring th e Larger
DIFM Segment
(U.S. Market Size - Retail Pric ing)
$0
$10
$20
$30
$40
$50
$60
$70
2011 2012 2013 2014 2015* 2016* 2017* 2018* 2019* 2020*
DIFM
DIY
Source: Frost & Sullivan
10
* Forecasted
billions
$71B*
$28B*
$64B
$26B
+2%
5-YrCAGR
+1%5-Yr
CAGR
-
8/20/2019 GPC +Investor+Presentation+Oct15
11/54 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
The Vehic le Fleet
0
40
80
120
160
200
240
280
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2020
128 127 126 125 125 123
122 120 119 120
279
115 120 123 127128 127 128 129 130 132
7 7 8 8 88 8 8 7 8
V e h i c l e s i n M i l l i
o n s
Heavy
Light Trucks
Cars
Steady and Consistent Trend
Total Vehicle Registrations
11
1%+ CAGREstimatedthru 2020
260M Vehicles in 2014+1.5% YOY
Source: Auto Care Association, BB&T
-
8/20/2019 GPC +Investor+Presentation+Oct15
12/54 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Average Age o f Vehic les Inc reasing
8
8.5
9
9.5
10
10.5
11
11.5
12
Light Trucks Passenger Cars
• Passenger Cars 11.9 Years
• Light Trucks 11.8 Years
2015 Average AgeAll Light Vehicles
11.9 Years
Source: Auto Care.Org / Lang Marketing 12
-
8/20/2019 GPC +Investor+Presentation+Oct15
13/54 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Veh icle Fleet Trends
$0
$200
$400
$600
$800
$1,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15+
$403$484
$573$644 $671
$741 $776$829 $868 $861 $873
$857
$776 $802 $812 A n n u a l S p e n d p e r V e h i c l e
Vehicle Age
Consumers Are Maintaining Older Vehicles
13
Prime Years for Aftermarket RepairStart in Year 6
Vehicles 6+ Years of Age>75% of Fleet
Avg. RepairCost/Year
1-5 Yr = $555
6-12 Yr = $829
> 12 Yr = $797
Source: IMR, Inc. Automotive Research, BB&T
-
8/20/2019 GPC +Investor+Presentation+Oct15
14/54 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Veh icle Miles Driven
2.50
2.60
2.70
2.80
2.90
3.00
3.10
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 TTM
8/15
2.993.01 3.03
2.98
2.96 2.97
2.95 2.95 2.973.00
3.11
A n n u a
l M i l e s i n T r i l l i o n s
Historical Peak
NewPeak
Miles Driv en in U.S. – Streng thening TrendsMiles Driven:
+3.4% YTD 2015thru August
3.1T
Historical Positive Correlation for Industry
Source: US DOT14
-
8/20/2019 GPC +Investor+Presentation+Oct15
15/54 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Stable Gas Prices = More Miles Driven~ Indu stry can abso rb gradual pr ice increases, but sh arp spikes can have an impact ~
Gas Prices v . Miles Driven
-6%
-4%
-2%
0%
2%
4%
6%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
Gas Prices & Miles Driven - % Change from Same Mo. Prior Year
Gas Miles
Miles Gas PricesSource: US DOT/EIA 15
-
8/20/2019 GPC +Investor+Presentation+Oct15
16/54 All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Au tomot ive Parts Group - Growth Oppo rtuni t ies
Key Areas of Focus NAPA Initiatives
New Distribution• Plans for New NAPA AUTOPARTS stores; Expansion in
Australasia and at NAPA Mexico
NAPA AutoCare• 16,000+ Independent AutoCare Members
• Approx. $1.2 Billion in 2014 & 10%+ Growth
Major Accounts • Nearly $1.9 Billion in 2014 & 10%+ Growth
Outside Sales • Adding Outside Sales Representatives
Connectivity • Adding Installer Connectivity
Special Markets • Heavy Duty Parts, Import Parts, Paint, Tools & Equipment
Store Resets & Upgrades • Ongoing program to consistently refresh and upgrade stores
16
-
8/20/2019 GPC +Investor+Presentation+Oct15
17/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Aus tralas ian & Mexico Expans ion
GPC Asia Pacif ic
Market Share Leader inAustralia and New Zealand
- 500 Company ownedstores today
NAPA Mexico
October 2014 Grand Opening- 19 stores today
17
-
8/20/2019 GPC +Investor+Presentation+Oct15
18/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
NAPA Retai l Store
18
Before
-
8/20/2019 GPC +Investor+Presentation+Oct15
19/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
NAPA Retai l Store – New Store Concept
19
After
-
8/20/2019 GPC +Investor+Presentation+Oct15
20/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Motion Indus tr ies – Indus tr ial Parts Group
Industr ia l Parts Group Highl ights Leading industrial parts MRO
distributor in North America
September 2015 TTM Sales at $4.7 billion
- 15 DC’s and 562 branches and service
centers in the U.S., Canada and Mexico
Proven track record with nearly70 years in the industry
Efficient supply chain andvendor partnerships
High customer service levels
and technical sales support Industry leading E-Business capabilities
Access to over 5.6 million products
- Global manufacturing base
Very large and fragmented industry
30%
Founded 1946Acquired 1976
20
-
8/20/2019 GPC +Investor+Presentation+Oct15
21/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Quarter ly Sales History
$400
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200
-2% -4%
Sales
Millions
2011 +19%2009 -18% 2010 +22% 2012 +7% 2013 -0-% 2014 +8%
-16%-22% -22%
-11%
+9%
+26%
+29% +24%
+19%+18%
+13%
+12% +8% +4.5%
+2%
-2%-1%
-2.5%+3%
+4%
+7%
Sales
YOY
+24%
+10%
21
YTD 2015-1%
+10%+3%
-
8/20/2019 GPC +Investor+Presentation+Oct15
22/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Suppliers: SKF, Baldor, Gates,Rexnord, Timken and Eaton
Customers represent all industrygroups, including Equipment &Machinery, Food Products, Iron & Steel,Pulp & Paper and Mining & Aggregate
Industr ial Parts Group Overview
Sales by Product Category
Bearings & PowerTransmission
39%
Industrial & Safety15%
Other 9%Hose
5%
Hydraulics & Pneumatic14%
Electrical & Automation10%
Major Competitors
Applied Industrial Technologies
Kaman (Industrial Technologies Div.)
DXP Enterprises
22
Material Handling8%
-
8/20/2019 GPC +Investor+Presentation+Oct15
23/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Top Industr ies
Indus tr ial Parts Group
OEM
Food Products
Pulp & Paper
Iron & Steel Fabricated
Metals
Automotive
Chemicals & Allied Products
Coal, Aggregate & Cement
Lumber & Wood Rubber & Plastic Products
Utilities
Ports
Rail
Grow th Industr ies
23
-
8/20/2019 GPC +Investor+Presentation+Oct15
24/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Indus tr ial Parts Group
60.00
65.00
70.00
75.00
80.00
85.00
90.00
95.00
100.00
105.00
Ind us try Demand Drivers Relat ively Stable
- Mixed Signals thus far in 2015 -
105.8
76.1
Manufacturing Industrial Production
Manufacturing Capacity Utilization
Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15
24
-
8/20/2019 GPC +Investor+Presentation+Oct15
25/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Indus tr ial Parts Group
Grow th Oppo rtuni t ies Product Category Expansion
- Automation
- Process Pumps
- Safety
Acquisitions
- (CSI, Miller Bearing & Lake Erie)
Growth Industries
Repair, Fabrication and Assembly
E-Commerce
Vending, VMI and StoreRoom Management
Only 6% share of market – estimated at $70 billion
25
-
8/20/2019 GPC +Investor+Presentation+Oct15
26/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Office Produc ts Group Highl igh ts
S.P Richards is the nation’s second largest
distributor of business products, officefurniture and computer supplies
September 2015 TTM Sales at $1.9 billion
- 44 DC’s in U.S. and Canada
Long history of serving the independent
reseller and “mega” dealer Access to over 55,000 products
- >500 leading manufacturers
- Global sourcing includes 8proprietary product brands
Superior fill rates, accurate and timelyshipments and competitive pricing
Database management,logistical support, e-commerceand a comprehensive array ofmarketing programs
13%
Founded 1848Acquired 1975
26
-
8/20/2019 GPC +Investor+Presentation+Oct15
27/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Quarter ly Sales History
$300
$325
$350
$375
$400
$425
$450
$475
$500
-2%
-1%
-1%
+3%+4%
Sales
YOY
-7%-6%
-4%
-1%
-5%
-1%
Sales
Millions
-0-
+3%
+5%
+4%
+3%
-1%
2011 +3%2009 -5% 2010 -0-% 2012 -0-%
-1%
-3%
2013 -3%
-3%
-4%
2014 +10%
-0-
+15%
+22%
27
+17%
YTD 2015+11%
+14%
+3%
-
8/20/2019 GPC +Investor+Presentation+Oct15
28/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Office Produc ts Group Overv iew
Suppliers: Hewlett Packard, AveryDennison, 3M, Smead, Fellowes and HON
Customers: Thousands of businessproduct resellers
- 80% of sales to Independent Dealers
- 20% of sales to National A/C’s
Major Sales Categories
OfficeSupplies
41%
Tech Products28%
Facility/BreakroomSolutions
17%
Office
Furniture14%
Major Competitors
Essendant(formerly USTR)
28
-
8/20/2019 GPC +Investor+Presentation+Oct15
29/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Demand Drivers Relat ively Stable, bu t Lagg ing
0
100
200
300
400
500
600
700
Q3'11 Q1'12 Q3'12 Q1'13 Q3'13 Q1'14 Q3'14 Q1'15 Q3'15
Service-Providing Employment
Source: BLS.gov
-4.5M in 08/09+1.3M in 10
+2.0M in 11 & 12+2.1M in 2013
+2.4M in 2014
Total Workers in 2014Back to 2007 Levels
U.S. GDP and Employment Levels
1.6M NewJobs thruSept. 2015
29
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
Q2'11 Q4'11 Q2'12 Q4'12 Q2'13 Q4'13 Q2'14 Q4'14 Q2'15
U.S. GDP (% Change)
Source: BEA.gov
-3.1% in 09+2.2% in 12 +2.5% in 10+1.6% in 11
Strengthening Trendin Q2 After SlowStart in Q1 2015
+3.9%
in Q2’15
+1.5% in 13 +2.4% in 14
-
8/20/2019 GPC +Investor+Presentation+Oct15
30/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Off ice Produ cts Group
Growth Opportun i t ies
Market Share Initiatives
Product Line Expansion
New Products
Private Brand Expansion
Enhanced Marketing and
Electronic Content
Alternate Channel Growth
- GCN, Impact, JAL & Malt Acquisitions
Only 5% share of market – estimated at $60 billion (Retail)
30
-
8/20/2019 GPC +Investor+Presentation+Oct15
31/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Drive for Diversi f icat ion
31
OfficeSupplies
41%
Tech Products28%
Facility/BreakroomSolutions
17%
OfficeFurniture
14%
OfficeSupplies
52%Tech Products
28%
Facility/BreakroomSolutions
4%
OfficeFurniture
16%
Major Sales Categories
2000 2014
Initiatives to Diversify Product Offering have Reduced Salesof Traditional Office Supplies as a Percent of Total Sales
-
8/20/2019 GPC +Investor+Presentation+Oct15
32/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Electr ical Markets Group Highl igh ts
EIS is a leading distributor of electrical,industrial and specialty products
September 2015 TTM Sales at $750 million
- 56 locations in U.S., Mexico, Canada, Puerto Ricoand Dominican Republic
Highly developed supply chain
Long-standing partnerships
Sophisticated information technologyand e-business capabilities
Knowledgeable employees withproduct, technical and service solutions
Focus on several growth initiatives, includingnew products, new fabrication opportunitiesand new services
5%
Founded 1950Acquired 1998
32
-
8/20/2019 GPC +Investor+Presentation+Oct15
33/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
+5% +5%
2009 -26% 2010 +30% 2011 +24% 2012 +5% 2013 -2% 2014 +30%
Sales
Millions
Sales YOY
-25%-34%
-30%-12%
+16%+32%
+31%+40%
+39%+28%
+22%+10%
+9%
-2%-4%-5% -5%
+6%
+30%+32%
+23%
+35%
Quarter ly Sales Histo ry
33
+1%
YTD 2015+2%
+4% +2%
-
8/20/2019 GPC +Investor+Presentation+Oct15
34/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Electr ical Markets Group – Overview
Access to over 100,000products, including:
- Magnet Wire, Pressure Sensitive Tapes,
Solder & Chemicals, Wire and Cable,
Varnishes & Resins, Hand Tools,
Industrial MRO Materials and Value Added Fabricated Parts
Customers: More than 20,000customers in the Electrical/Electronic,Fabrication & Coating and Specialty
Wire & Cable markets, such as:
- General Electric, Baldor, First Solar,
Emerson, Northrup Grumman, Square D,
Celestica, Hewlett Packard and Flextronics
Major Competitors
Essex/Brownell(a Division of Superior Essex)
Anixter
Houston Wire & Cable
Suppliers
34
-
8/20/2019 GPC +Investor+Presentation+Oct15
35/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Electr ical Markets Group
Demand Drivers Showing Mfg. ExpansionInst i tute for Supp ly Management - Purchasing Managers Index
50
35
-
8/20/2019 GPC +Investor+Presentation+Oct15
36/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Electr ical Markets Group
Growth Oppo rtuni t ies
New Products
New Markets
Acquisitions
- Electro-Wire
- IWI
- Connect-Air
7% share of market – estimated at $10.0 billion
36
-
8/20/2019 GPC +Investor+Presentation+Oct15
37/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Drivers and Opportuni t ies
Demand Drivers Opportunities and Initiatives
Automotive
• Total vehicles > 6 years old• Complexity of vehicles/ # Trucks & SUV’s • Average age of cars & light trucks• Gas Prices/Miles driven on roads each
year
• 8-9% share of market – est. at $100+ billion (Retail)• Approx. 475,000 Products & Tens of Thousands
of Customers
• New Distribution, NAPA AutoCare, Major A/C’s, O/S Sales,Connectivity, Niche Markets – Heavy Duty, Imports, Paintsand Tools & Equipment, Store Resets and Upgrades
Industrial
• Manufacturing industrial production• Capacity utilization rates• Capital expenditure budgets/expansion• Manufacturing employment in U.S.
• 6% share of market – estimated at $70 billion
• Approx. 5.6 million Products & > 150,000 Customers• Growth via product line expansion, acquisitions and
targeted industries – e.g. Waste Water Treatment, PowerGeneration, Municipalities and Transportation & Ports
Office Products
• U.S. gross domestic product (GDP)• White collar employment numbers
•Office occupancy rates in U.S.
• 5% share of market – est. at $60 billion (Retail)• More than 55,000 Products & Approx. 4,300 Customers• Growth via market share initiatives, product line expansion
(including proprietary brands), new products, private brandexpansion, enhanced marketing/electronic content and newor alternate channels
Electrical Markets
• Manufacturing expansion (ISM’s PMI)• Capacity utilization rates
• 7% share of market – estimated at $10 billion• Over 100,000 Products & > 20,000 Customers• Growth via new products (including wire & cable and
new fabrication opportunities), new markets & acquisitions
37
-
8/20/2019 GPC +Investor+Presentation+Oct15
38/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Financial Focus
Recent Ful l Year Financ ial High l igh ts
Record Sales and Earnings in 2014
2014 2013
2014 v. '13 2013 v. '12
Net Sales (bi l l ions) $15.34 +9% $14.08 +8%
Net Income (mil l ions) $711 +9%* $685 +6%
Diluted EPS $4.61 +10%* $4.40 +6%
* Comparative Results38
-
8/20/2019 GPC +Investor+Presentation+Oct15
39/54
-
8/20/2019 GPC +Investor+Presentation+Oct15
40/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
7.0
7.3
7.5
7.8
8.0
8.3
8.5
Operat ing Margin
Continue to Target8.0-8.5%
Operating Margin
8.5%8.1%
40
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 9-Mos2015
-
8/20/2019 GPC +Investor+Presentation+Oct15
41/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Strong cash position
- Approx. $200 million at September 30, 2015
Prudent working capital management
- Continuous improvement in working capital levels
Solid after-tax return on invested capital (ROIC)
- 16.0% ROIC for 12-Mos ending September 30, 2015
High after-tax return on assets (ROAA)
- 8.5% for at September 30, 2015
Comfortable with capital structure
- 16.5% total debt to total capitalization at September 30, 2015
Financial Focus
Balance Sheet Highlights
41
-
8/20/2019 GPC +Investor+Presentation+Oct15
42/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
$0
$100
$200
$300
$400
$500
2015 2016 2017 2018 2019 2020 2021 2022 2023
$125
$250
$0 $0 $0 $0 $0 $0
$250
Debt Trend
Financ ial Focus – Capital Struc ture
Matur i ty Schedule
$0
$200
$400
$600
$800
$1,000
$893
$792
$678
$500
$765
$625
42
-
8/20/2019 GPC +Investor+Presentation+Oct15
43/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
0.0
5.0
10.0
15.0
20.0
25.0
30.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
ROAA W/C Efficiency
W/C Eff ic iency and ROAA Trend s
Source: AAIA / R.L. Polk & Co.
26.1%
13.8%
ROAA14.4%
13.6%W/C Eff.
Positioned to further improve with effective assetmanagement and sales and earnings growth
43
Steady Return on Assets andimproving Working Capital Efficiency
-
8/20/2019 GPC +Investor+Presentation+Oct15
44/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Improvement in Wo rking Capi tal
44
DIO - 127
DIO - 100
DPO - 39
DPO - 90
DSO - 45
DSO - 46
20
40
60
80
100
120
140
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
DSO DIO DPO
YTD
-
8/20/2019 GPC +Investor+Presentation+Oct15
45/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
…..Compressed CCC
45
CCC - 133
CCC - 5655
65
75
85
95
105
115
125
135
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
CCC
YTD
-
8/20/2019 GPC +Investor+Presentation+Oct15
46/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
10.0
11.0
12.0
13.0
14.0
15.0
16.0
17.0
18.0
Return On Invested Cap ital
Continue to targetinvestments with
> 15% ROIC
16.0%
13.5%
46
-
8/20/2019 GPC +Investor+Presentation+Oct15
47/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Financ ial Focus – Strong Cash Flows
0
100
200
300
400
500
600
700
800
900
1,000
1,100
2010 2011 2012 2013 2014 2015 Est
Free Cash Flow
Capital Expenditures
Dividend Payout
$950M
$450M+
$110M
$370M
47
-
8/20/2019 GPC +Investor+Presentation+Oct15
48/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Comm itment to Shareho lders
Prior i t ies for Cash
Dividends
Reinvestment inBusinesses
Share Repurchases
Acquisitions
48
-
8/20/2019 GPC +Investor+Presentation+Oct15
49/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Comm itment to Shareho lders
0
0.5
1
1.5
2
2.5
2015
Dividend Record
2015 Annual Dividend $2.462.6% Yield and +7% from 2014
59 Consecutive Years ofIncreased Dividends
49
-
8/20/2019 GPC +Investor+Presentation+Oct15
50/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Comm itment to Shareho lders
Share Repu rchases History
7.1 Mi l lion Shares Remaining to be Repu rchased
(in m i l l ion s) # Shares Cash Paid
1994 – 2004 24.0 $649.9
2005 – 2009 18.2 782.3
2010 – 2013 7.1 399.4
2014 1.1 95.9
YTD thru 9-Mos 2015 2.5 225.1
TOTAL 52.9 $2,152.6
Consistent History Of Returnin g Cash To Sharehold ers50
G C & O
-
8/20/2019 GPC +Investor+Presentation+Oct15
51/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
GPC Accompl ishments & Ob ject ives
• Sales Growth of 1%
(+4% ex Fx)
• Operating Margin up 10 Bps
• Earnings per Share up 1%(+4% ex Fx)
• Strong Cash Flow Generation
• Strengthened Bal. Sheet
Status Report thru9-Mos in 2015
• Improve Sales by 6-8%
• Increase Operating Margin
• Grow EPS by 7-10%
• Generate Solid Cash Flows
• Maintain Strong Bal. Sheet
Key Long TermAnnual Objectives
51
T t l R t t Sh h ld
-
8/20/2019 GPC +Investor+Presentation+Oct15
52/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Total Return to Shareho lders
Period s End ing December 31, 2014
Compound Average
1 YEAR 3 YEAR 5 YEAR 7 YEAR 10 YEAR
GPC 31.4% 23.8% 26.9% 16.6% 12.9%
S&P 500 13.7% 20.4% 15.5% 7.3% 7.7%
DOW JONES 10.0% 16.3% 14.2% 7.2% 7.9%
NASDAQ 14.8% 23.6% 17.2% 9.8% 9.2%
52
P/E St k P i EPS & Di id d T d
-
8/20/2019 GPC +Investor+Presentation+Oct15
53/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
0.000.250.500.751.001.251.50
1.752.002.252.502.753.003.253.50
3.754.004.254.504.755.00
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
110.00
80 82 84 86 88 90 92 94 96 98 0 2 4 6 8 10 12 14
P/E
Stock Price
EPS
Dividend
Market Capitalization
$16.3 Billion @ December 31, 2014$12.8B @ 12/31/13 & $10B @ 12/31/12
P/E, Stock Price, EPS & Dividend Trends
53
-
8/20/2019 GPC +Investor+Presentation+Oct15
54/54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company
Thank You!Contact Inform ation:
Carol Yancey - EVP & CFO: [email protected]
Sid Jones - VP IR: [email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]