gpc +investor+presentation+oct15

8/20/2019 GPC +Investor+Presentation+Oct15

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All Content is Company Confidential and Exclusive Property of Genuine Parts Company.

Investor

Presentation


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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.

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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

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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%

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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

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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


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



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%



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



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



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



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



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



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



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



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

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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

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NAPA Retai l Store

18

Before


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NAPA Retai l Store – New Store Concept

19

After


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Motion Indus tr ies – Indus tr ial Parts Group

Industr ia l Parts Group Highl ights Leading industrial parts MRO

distributor in North America


- 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

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$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%


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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%


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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

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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

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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

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Office Produc ts Group Highl igh ts

S.P Richards is the nation’s second largest

distributor of business products, officefurniture and computer supplies


- 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%


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$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%


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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)

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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


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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)

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Drive for Diversi f icat ion

31

OfficeSupplies

41%

Tech Products28%


17%

OfficeFurniture

14%

OfficeSupplies

52%Tech Products

28%


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


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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%


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$-

$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%


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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

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Electr ical Markets Group

Demand Drivers Showing Mfg. ExpansionInst i tute for Supp ly Management - Purchasing Managers Index

50

35


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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

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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

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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


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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


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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

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$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

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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


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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


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…..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


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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%

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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

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Comm itment to Shareho lders

Prior i t ies for Cash

Dividends

Reinvestment inBusinesses

Share Repurchases

Acquisitions

48


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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

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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


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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


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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


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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

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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]

gpc +investor+presentation+oct15

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