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All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Investor
Presentation
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
Leading distributor to four
primary end-markets:
- Automotive Parts (APG)
- Industrial Parts (Motion Industries)
- Business Products (S.P. Richards)
- Electrical / Electronic Materials (EIS)
Critical partner to
our customers:
- Best in class operating and
distribution efficiencies
- Industry leading coverage of
consumable/replacement items
- Outstanding just-in-time service
- Technology solutions
% Net Sales by Segment
TTM Ended Sep 30, 2017
$15.9 Billion
Annual Sales
12%
31%
5%
52%
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 businesses5
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Track Record of Success
Strong history of sales & profit growth
- Sales have increased in 84 of 89 year history
- Profit has increased in 73 of 89 year history
Dividend growth
- 2017 marks GPC’s 61st
consecutive year of dividend increases
6
1925 1928 1948 1968 1975 1976 1998 19992010-2014 2013
IPOEstablished Traded On
NYSE: GPC
Founded
Acquired
Acquired
Acquired
Acquired
Record Sales
& Earnings
Acquired
2017
Acquired35%
Ownership
Announced
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Ten Year Sales History
7.5
8.5
9.5
10.5
11.5
12.5
13.5
14.5
15.5
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
+9.0%
$ Billions
EPS
+8%EPS
-2%EPS
-14%EPS
+20%EPS
+19%EPS
+16%EPS
+6%EPS
+10%*EPS
+0.4%
+3.7% +1.6%
-8.7%
+11.4%
+11.2%+4.5%
+8.2%
Record Sales & Earnings Per Share
in 7 of Last 10 Years
7* Comparative Results
-0.4%
EPS
-0.9%
+0.4%
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Automotive Parts Group Highlights
Largest global auto parts network
TTM Sales at $8.3 billion as of Sept 30, 2017
- US: 57 DC’s & ~ 6,000 stores (1,100 Co. owned)
- 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
New 40 DC & 2,100 Store Footprint in Europe via
acquisition of Alliance Automotive Group
11 DC’s & 559 Store footprint in
Australia and New Zealand
Superior NAPA brand name & customer service
Globally positioned to benefit from positive
industry trends
52%
NAPA Established 1925
8
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Quarterly Sales History
$-
$0.25
$0.50
$0.75
$1.00
$1.25
$1.50
$1.75
$2.00
$2.25
-0-
-2%
2013 +18.5%2012 +4% 2015 -1%
(+4% ex Fx)
Sales
Billions
+2%
+6%
+4% +2%+5% +3%
+22%+23%
+4%+25%
+22%+5% +4% -0-
2014 +8%
-2%+3%
-1%
+2%
+1%
2016 +1%
+4%
2017 YTD
+4%
9
+4%
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
NA Automotive Parts Group Overview
(90%) NAPA branded products
NAPA Know How Differentiators:
- product quality, depth and breadth
- service capabilities
- technology offering
Commercial/DIFM customers
- professional service repair facilities
- approx. 75% of NAPA sales
17,000+ NAPA AutoCare Centers
- 1,600+ in Canada (& ~600+ AutoPro Centers)
Major Accounts: AAA, Goodyear,
Firestone, TBC, CBAdvantage
Retail/DIY customers
- individual consumer customer
- approx. 25% of NAPA sales
Major Competitors
U.S. - AutoZone, Advance Auto Parts & O’Reilly
Canada - Uni-Select & AAP/Carquest
Major Account Customers
10
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
The Automotive Aftermarket
Market Trends Favoring the Larger DIFM Segment
(U.S. Market Size - Retail Pricing)
$0
$15
$30
$45
$60
$75
2011 2012 2013 2014 2015 2016 2017* 2018* 2019* 2020*
DIFM
DIY
Source: Frost & Sullivan/ACA11
* Forecasted
billions
$75B*
$32B*$30B
+3%
5-Yr
CAGR
+1%
5-Yr
CAGR
$67B
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Vehicle 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
An
nu
al
Sp
en
d p
er
Veh
icle
Vehicle Age
Consumers Are Maintaining Older Vehicles
12
Prime Years for Aftermarket Repair
Start in Year 6
Vehicles 6+
Years of Age
>70% of Fleet
Avg. Repair
Cost/Year
1-5 Yr = $555
6-12 Yr = $829
> 12 Yr = $797
Source: IMR, Inc. Automotive Research, BB&T
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Fundamentally Strong Aftermarket
Total vehicle fleet growing+1 to 2%
thru 2020
11.7 Years
$2.50/GL
thru Sep 2017
+1.3% thru
Sep 2017
Average age of fleet increasing
Relatively low gas prices
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
New Distribution
• Plans for New NAPA AUTOPARTS Stores in U.S. – Merle’s,
Standard, Olympic and Monroe Store Groups
• Alliance Automotive Group acquisition in Europe
• Expansion in Canada, Mexico, Australia and New Zealand
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
Special Markets
• Heavy Duty Parts, Import Parts, Paint, Tools & Equipment
• Recent Acquisitions: Olympus & Auto Camping Imports; Global
Heavy Duty and Stone Truck Parts
Store Resets & Upgrades• Retail Impact Store Initiative – 500 Stores by December 2017
• Ongoing Program to Consistently Refresh and Upgrade Stores14
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
NAPA AutoCare Center
15
The Aftermarket’s Preeminent Commercial Program
for the Independent Repair Center
Before
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
NAPA Retail Store
16
Before
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
NAPA Retail Store – New Store Concept
17
After
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Alliance Automotive Group
Leading European distributor of
vehicle parts, tools and
workshop equipment
Focused on light vehicle and
commercial vehicle replacement
parts
#2 European player in attractive
markets:
- #1 in France
- #2 in the U.K.
- #3 in Germany
- Announced entry into Poland through
October 2017 acquisition of majority stake
in Groupauto Polska
Integrated distribution model
similar to GPC
% Revenue by country1
Key figures (2017E USD)1,3
38%
11%
51%
US GAAP
Revenue
$1.7bn
Total number of outlets: 2,100
Distribution
centers
40
Suppliers
c. 500
Owned outlets
333
Employees
c. 7,500
Affiliated
outlets
1,768
Customers
c.40,000
18
1 AAG management estimates for 2017; USD / EUR of 1.195 as of 9/22/172 Includes supplier direct billing, which are accounted for “Net” under U.S. GAAP.3 Financial estimates based on preliminary financial information. Estimates are subject to
change based on final conversion of U.S. GAAP statements and mapping to GPC accounts
Gross
Billings
$2.3bn2
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Strategic Rationale
19
#2 European player in attractive markets
Complementary business model with GPC & strong cultural fit
Effective and experienced senior leadership team
Top 3 market share in Europe’s largest automotive aftermarkets (France, U.K., Germany)
Attractive industry fundamentals and long-term growth drivers
Alignment with GPC values and culture
Mirrors GPC’s North American automotive distribution business model
Grew business from <€100mm to ~€1.9bn1 in gross billings since founding in 1989
Senior team will continue to lead European business under GPC ownership
Growth potential – both organic and via accretive acquisitions
~USD $25mm in annual synergies
Consistent growth in core business
Large reservoir of bolt-on and strategic acquisition opportunities
Expected to be fully achieved within three years
Enhanced buying power for direct and indirect spend
1 Gross billings represent prior year actual results and AAG management estimates for 2017 including supplier direct billings. Financial estimates
based on preliminary financial information. Estimates are subject to change based on final conversion of U.S. GAAP statements and mapping to
GPC accounts. Estimated U.S. GAAP revenues were <€100mm (1989) and €1.4bn (2017E)
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
21%
13%
13%12%
8%
6%
6%
21%
€8.9bn
€8.5bn
European Automotive Aftermarket
European LV market per country at distribution level
AAG operates in the largest and most attractive
European markets
TOTAL MARKET VALUE
€68bn1
Germany
France
U.K.
Italy
Spain
Benelux
Poland
OtherFrance2 U.K.2 Germany2
Car parc size (m, LV) 38.3 35.6 47.9
Car parc age (years, PC) 8.9 7.6 9.3
Mileage (km per year, LV) 13,400 13,400 14,300
Annual spend per car3
(retail price, €, PC)390 385 470
Overview of European LV aftermarket at distribution level
Source: Roland Berger1 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 20
Car parc size
Car parc age
Total traffic
Technological
developments
IAM4 gaining share
over OES segment
Favorable regulation
Long term growth drivers
€14.0bn
€4.0bn
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Top 3 position in the largest European markets with significant opportunities for growth
IAM distribution players in France, U.K., Germany and Poland
AAG current
presence
Expected AAG
presence by
December 2017
#2 player
13% market share1
3% market growth3
#1 player
32% market share1,3
2% market growth3
#3 player2
3% market share1
2% market growth3
Source: Roland Berger and AAG estimates based on third party data1 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 report4 Management estimates pro forma for pending acquisitions as of 2016 and per Roland Berger analysis
21
Oct 2017 acquisition
of majority stake in
Groupauto Polska
13% market share1
5% market growth3
2.6
1.9
1.6
1.5
1.4
1.2
0.8
0.6
0.5
Gross Billings €bn 4Major IAM distribution players in Europe
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
- 559 Company owned stores
- Added 60 stores since 2015
NAPA Mexico
Growth Plan for Company
Owned and Independent NAPA
AUTOPARTS Stores
- 39 stores today.. and growing22
Major Competitors
Supercheap, Burson & Autobarn
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Motion Industries – Industrial Parts Group
Industrial Parts Group Highlights Leading industrial parts MRO
distributor in North America
TTM Sales at $4.9 billion as of Sept 30, 2017
- 13 DC’s and 525+ branches and service
centers in the U.S., Canada and Mexico
Proven track record with over 70
years in the industry
Access to over 6.9 million products
- Global manufacturing base
Very large and fragmented industry
Efficient supply chain and
vendor partnerships
High customer service levels
and technical sales support
Industry leading E-Business capabilities
31%
Founded 1946
Acquired 1976
23
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Quarterly Sales History
$400
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200
-8%
Sales
Millions
2013 -0-% 2014 +8% 2015 -3%
+12% +8% +4.5%
+2%-2%
-1%-2.5%
+3%
+4%
+7% +10%+3%
24
+10% -2%+2%
2012 +7%
+4%-1%
+7%
2016 -0-
-2%
+7%
2017 YTD
+7%
-4%
+7%
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Suppliers: SKF, Baldor, Gates, Rexnord, Timken and Eaton
Customers represent all industry groups, including Equipment & Machinery, Food Products, Iron & Steel, Pulp & Paper and Mining & Aggregate
Industrial Parts Group Overview
Sales by Product Category
Bearings & Power
Transmission
37%
Industrial & Safety
17%
Other
4%Seals, Pumps
& Hose
8%
Hydraulics & Pneumatic
14%
Electrical & Automation
11%
Major Competitors
Applied Industrial Technologies
Kaman (Industrial Technologies Div.)
DXP Enterprises
25
Material Handling
9%
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Top Industries
Growing Sectors
Equipment and Machinery
Food Products & Processing
Pulp and Paper
Iron and Steel
Fabricated Metal Products
Lumber and Wood Products
Chemical Products
Aggregate & Cement
Equipment Rentals/Leasing
Oil & Gas Extraction
Lagging Sectors
Automotive
Rubber & Plastic Products
26Data for 9-mos 2017
YTD 2017 Update
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Industrial Parts Group
Growth Opportunities
Product Category Expansion
- Automation, Process Pumps and Safety
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
Only 7% share of market –
estimated at $70+ billion
27
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Business Products Group Highlights
S.P Richards is the nation’s second largest distributor of business products, office furniture, computer supplies and facilities, breakroom and safety supplies
TTM Sales at $2.0 billion as of Sept 30, 2017
- 56 DC’s in U.S. and Canada
Long history of serving the independent reseller and national accounts
Access to over 69,000 products
- 800+ leading manufacturers
- Global sourcing includes nine proprietary product brands
Superior fill rates, accurate and timely shipments and competitive pricing
Database management, logistical support, e-commerce
Comprehensive array of sales, marketing and training programs
12%
Founded 1848
Acquired 1975
28
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Quarterly Sales History
$300
$325
$350
$375
$400
$425
$450
$475
$500
-1%
-3%
-3%
-4%
-2%
+5%
Sales
Millions
-1%
-1%
+3%
2013 -3%2012 -0-% 2014 +10%
-0-
+15%
2015 +7.5%
+4%
+22%
+17%
+14%
29
+3%
-2%
-3%+1% +4%
+5%
2016 +2%
+9%
2017 YTD
+3%
-5%
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Business Products Group Overview
Suppliers: Hewlett Packard, 3M, Hon, Newell, Kimberly Clark, Georgia Pacific..
Customers: Serves > 9,300 business product resellers and superstores
Primary Sales Channels
Independent
Resellers
59%
Internet Reseller
6%
Nat’l Accounts
22%
Major Competitors
Essendant
(formerly United)
30
Alternate Channel
13%
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
PRODUCT MIX
22%
37%
26%
15%
2016
Office Supplies FBS Furniture Tech
32%
47%
8% 13%
2010
17%
27%41%
15%
2020
(Est)
Drive for Diversification
Initiatives to Diversify Product Offering are Significantly
Increasing Facility, Breakroom & Safety Supply Sales31
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Demand Drivers Relatively Stable, but Also Mixed..
0
100
200
300
400
500
600
700
Q3'13 Q1'14 Q3'14 Q1'15 Q3'15 Q1'16 Q3'16 Q1'17 Q3'17
Service-Providing Employment
Source: BLS.gov
-4.5M in 2008/09
1M+ in 2010
2M+ in 2011 - 2016
Steady and Consistent New
Job Growth for last 5 Years
U.S. GDP and Employment Levels
+1M New Jobs in
2017 thru Sep
32
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
Q3'13 Q1'14 Q3'14 Q1'15 Q3'15 Q1'16 Q3'16 Q1'17 Q3'17
U.S. GDP (% Change)
Source: BEA.gov
+2.4% in 14
+1.7% in 13
Tepid GDP Growth
in 2016 at 1.6%
+3.0%
in Q3’17
+2.6% in 15
+1.6% in 16
Sep 2017
Unemployment
Rate at 4.2%
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Business Products Group
Growth Opportunities
Market Share Initiatives
Product Line Expansion
New Products
Private Brand Expansion
Enhanced Dealer Services/ Marketing & Electronic Content
FBS and Alternate Channel Growth
- JAL, Dinesol & Malt Acquisitions in 2015
- Safety Zone and RMC in 2016
Low percentage share of market
– estimated at $100+ billion
(Retail)
33
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Electrical Markets Group Highlights
EIS is a leading distributor of electrical, industrial and specialty products via three business groups:
- Electrical/Electronic
- Fabrication & Coating
- Specialty Wire & Cable
TTM Sales at $765 million as of Sept 30, 2017
- 45 locations in U.S., Mexico, Canada, Puerto Rico and Dominican Republic
Highly developed supply chain
Long-standing partnerships
Sophisticated information technology and e-business capabilities
Knowledgeable employees with product, technical and service solutions
5%
Founded 1950
Acquired 1998
34
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
+5% +5%
2012 +5% 2013 -2% 2014 +30% 2015 +2%
Sales
Millions
-3%
+9%
-2%-4%
-5%-5% +6%
+30%+32%
+23%
+35%
Quarterly Sales History
+1%
+4% +2%
-0- -0--5%
-9%
2016 -5%
+5
+12%
2017 YTD
9%
+11%
35
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Electrical Markets Group – Overview
Access to over 100,000 products:
• Electrical Insulating Materials
• Magnet Wire
• Wire & Cable
• Bonding & Adhesive Materials
More than 20,000 customers in the
Electrical/Electronic, Fabrication &
Coating and Specialty Wire & Cable
markets, such as:
• First Solar
• General Electric
• Baldor
• Emerson
• Eaton
Major Competitors
Essex/Brownell (a Division of Superior Essex)
Anixter
Houston Wire & Cable
Suppliers
36
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Evolving Sales Composition
75%
20%
5%
2010
Electrical/Electronic Fabrication Wire & Cable
Initiatives Focused on Growth Opportunities
in Wire & Cable Markets
38%
26%
36%
2017 (Est)
33%
22%
45%
2020 (Est)
37
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
38
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Electrical Markets Group
Growth Opportunities
Market Share Initiatives
- Product Line Expansion
- New Products
- Enhanced Services
Market Expansion/Share Gains
- Fabrication & Coating
- Cable & Connectivity
Acquisitions
- CPS in 2016
- Empire in April 2017
7% share of market –
estimated at $10+ billion
39
Both for
Wire & Cable
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Drivers and Opportunities
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. 500,000+ Products & Tens of Thousands
of Customers
• New Distribution, NAPA AutoCare, Major A/C’s, O/S Sales,
Connectivity, Niche Markets – Heavy Duty, Imports, Paints
and Tools & Equipment, Store Resets and Retail initiatives
Industrial
• Manufacturing industrial production
• Capacity utilization rates
• Capital expenditure budgets/expansion
• Manufacturing employment in U.S.
• 7% share of market – estimated at $70+ billion
• Approx. 6.9 million Products & > 300,000 Customers
• Growth via product line expansion, acquisitions and
targeted industries – e.g. Waste Water Treatment, Power
Generation, Municipalities and Transportation & Ports
Business Products
• U.S. gross domestic product (GDP)
• White collar employment numbers
• Office occupancy rates in U.S.
• Low percentage share of market – est. $100+ billion (Retail)
• More than 69,000 Products & Approx. 9,300 Customers
• Growth via market share initiatives, product line expansion
(including proprietary brands), new products, enhanced
marketing/electronic content and new or alternate channels
via FBS diversification
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, new markets & acquisitions
(including fabrication & coating and cable & connectivity
market expansion opportunities)40
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Financial Focus
Recent Financial Highlights
Q3 2017 9-Mos 2017
2017 v. '16 2017 v. '16
Net Sales (billions) $4.10 +4% $12.10 +5%
Net Income (millions)* $170 (8%) $520 (3%)
Diluted EPS* $1.16 (7%) $3.52 (1%)
41
* Before transaction costs
primarily for AAG acquisition
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
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 17-Sep
Mixed Operating Margin Trend
Targeting Further
Expansion to 8.5-9.0%
Operating Margin
7.8%
8.1%
42
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Strong cash position
- Approx. $210 million at September 30, 2017
Prudent working capital management
- Focus on working capital efficiency and cash conversion cycle
Solid after-tax return on invested capital (ROIC)
- ~15% ROIC for 12-Mos ending September 30, 2017
High after-tax return on assets (ROAA)
- Consistently at > 7%
Comfortable with capital structure
- Prudent debt to total capitalization and debt to EBITDAR
Financial Focus
Balance Sheet Highlights
43
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Financial Focus – Capital Structure
44
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
De
bt
Tre
nd
(I
n m
illio
ns)
Total Debt to
Total Capitalization25%
Historically Low Debt Levels
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
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 17-Sep
Improving W/C Efficiency Trends
23.1%
13.3%
W/C Eff.Steady and consistent improvement and
positioned to further improve with effective asset
management and sales and earnings growth
45
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Improvement in Working Capital
46
DIO - 127
DIO - 106
DPO - 39
DPO - 104
DSO - 45DSO - 47
20
40
60
80
100
120
140
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
DSO DIO DPO
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
…..Compressed CCC
47
CCC - 133
CCC - 49
45
55
65
75
85
95
105
115
125
135
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
CCC
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
6.0
7.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
15.0
16.0
17.0
18.0
Return On Invested Capital
Continue to target
investments with
> 15% ROIC
15.0%
15.3%
48
ROIC
WACC~8% Spread
8.0%
7.0%
Consistently Exceeding WACC
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Steady and Strong Cash Flows
0
150
300
450
600
750
900
1,050
1,200
2012 2013 2014 2015 2016 2017 e
Free Cash Flow
Capital Expenditures
Dividend Payout
$800 Mil
$255M
$150M
$395M
49
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Commitment to Shareholders
Priorities for Cash
Reinvestment in
Businesses
Acquisitions
Dividends
Share Repurchases
50
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Recent Acquisitions
20155
4 Store Groups
AEA
4Miller, Oil & Gas
Lake Erie, Moss
1Connect-Air
3JAL, Dinesol
Malt
2016
11Olympus, Covs,
Global, AMX,
Auto-Camping, ASL,
5 Store Groups
5Epperson,
MO Power,
Colmar, OBBCO,
Braas
1CPS
2Safety Zone,
RMC Jan/San
2017
10AAG, 6 Store Groups
(+48 new stores),
Stone Truck Parts,
Welch, Sulco T&E
335% Inenco
(Australia),
Numatic, Apache
1
Empire
Will remain active in seeking additional acquisitions 51
$180M
$600M
$2.0B
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Commitment to Shareholders
0
0.5
1
1.5
2
2.5
3
2017
Dividend Record
2017 Annual Dividend $2.70
3% Yield and +3% from 2016
61 Consecutive Years of
Increased Dividends
52
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Commitment to Shareholders
Share Repurchases History
17.4 Million Shares Remaining to be Repurchased
Consistent History Of Returning Cash To Shareholders53
(in millions) # Shares Cash Paid
1994 – 2004 24.0 $649.9
2005 – 2009 18.2 782.3
2010 – 2014 8.2 495.3
2015 3.3 292.2
2016 2.0 181.4
YTD 2017 1.9 171.9
TOTAL 57.6 $2,573.0
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Commitment to Shareholders
5-Year Returns to Shareholders
2012 2013 2014 2015 2016
Dividends $301.0 $326.2 $347.3 $368.3 $386.9
Share
Repurchases81.8 120.6 95.9 292.3 181.4
Total 382.8 446.8 443.2 660.6 568.3
Approx. $2.5 Billion Returned to
Shareholders Over 5 Years
54
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
GPC Outlook & Objectives
• Sales Growth +4-5%
• Slight Decline in Operating
Margin
• Flat Adj. Earnings per Share
• Cash Flow in $750-$800M
Target Range
• Steady W/C Efficiency
2017 Outlook
• Improve Sales by 6-8%
• Increase Operating Margin
• Grow EPS by 7-10%
• Generate Solid Cash Flows
• Maintain Strong Bal. Sheet
Key Long Term
Annual Objectives
55
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Periods Ending December 31, 2016
1 YEAR 3 YEAR 5 YEAR 7 YEAR 10 YEAR
14.3% 7.6% 12.4% 17.6% 10.8%
12.0% 8.9% 14.7% 12.8% 7.0%
16.5% 8.7% 12.9% 12.4% 7.5%
8.9% 10.1% 17.1% 14.5% 9.5%
Total Return to Shareholders
56
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
2.75
3.00
3.25
3.50
3.75
4.00
4.25
4.50
4.75
5.00
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 00 02 04 06 08 11 12 14 16
P/E
Stock Price
EPS
Dividend
P/E, Stock Price, EPS & Dividend Trends
57
Market Capitalization
$14.2 Billion @ Dec 31, 2016
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
All Content is Company Confidential and Exclusive Property of Genuine Parts Company.
Thank You!Contact Information:
Carol Yancey - EVP & CFO: 678-934-5044
Sid Jones - SVP IR: 678-934-5628