- Reaffirms Full-Year 2023 Financial Outlook
- Provides Three-Year Outlook for Double-Digit EPS
CAGR
- 2025 EBITDA Margin Target of 10% and Diluted Earnings Per
Share of $11.00-$11.50
ATLANTA, March 23,
2023 /PRNewswire/ -- Genuine Parts Company (NYSE:
GPC) announced that it is hosting its 2023 Investor Day today in
Atlanta, Georgia to provide a
strategic update on its key growth initiatives and outline its
long-term financial targets. Today's event will begin at
8:00 a.m. ET and will be available
through a live webcast and replay at the company's investor
relations website.
During today's event, the company will highlight actions it has
taken to streamline its business into a global service-orientated
distribution company serving the automotive and industrial
aftermarkets. The company will also discuss its key initiatives and
strategic investments, which are focused around five foundational
pillars: talent and culture; sales effectiveness; technology;
supply chain; and emerging technology.
"We are building on our strong momentum and investing in our
businesses to create value and unlock the power of One GPC," said
Paul Donahue, Chairman and Chief
Executive Officer. "Our rich culture, global scale and strategic
execution provide us with unique opportunities for profitable
growth and strong cash flow, and we are excited for the future of
Genuine Parts Company."
2023
Outlook
|
|
Today, the company
reaffirmed its full-year 2023 financial guidance provided February
23, 2023.
|
|
|
|
Year Ending
12/31/2023
|
Total sales
growth
|
|
4% to 6%
|
Automotive sales
growth
|
|
4% to 6%
|
Industrial sales
growth
|
|
4% to 6%
|
Diluted earnings per
share
|
|
$8.80 to
$8.95
|
Adjusted diluted
earnings per share
|
|
$8.80 to
$8.95
|
Effective tax
rate
|
|
Approx. 25%
|
Net cash provided by
operating activities
|
|
$1.2 billion to $1.4
billion
|
Free cash
flow
|
|
$800 million to $1.0
billion
|
|
Long-Term Financial
Targets
|
|
Today, the company
provided its 2025 financial outlook as follows:
|
|
|
|
Year Ending
12/31/2025
|
Total sales
|
|
$26.5 billion to $27.0
billion
|
Earnings before
interest, tax, depreciation and amortization (("EBITDA")
|
|
$2.65 billion to $2.75
billion
|
Diluted earnings per
share ("EPS")
|
|
$11.00 to
$11.50
|
|
|
|
|
|
For the 3-Year
Period
1/1/2023 –
12/31/2025
|
Compounded annual sales
growth ("CAGR")
|
|
6.0% to 7.0%
|
Compounded annual EPS
CAGR
|
|
10.0% to
11.0%
|
Cumulative free cash
flow
|
|
$2.6 billion to $2.8
billion
|
Non-GAAP Information
This release contains certain financial information not derived
in accordance with United States
("U.S.") generally accepted accounting principles ("GAAP"). These
items include adjusted diluted earnings per common share, earnings
before interest, tax, depreciation and amortization ("EBITDA") and
free cash flow. The company believes that the presentation of
adjusted diluted earnings per common share, EBITDA and free cash
flow, when considered together with the corresponding GAAP
financial measures and the reconciliations to those measures,
provide meaningful supplemental information to both management and
investors that is indicative of the company's core
operations. The company considers these metrics useful to
investors because they provide greater transparency into
management's view and assessment of the company's ongoing operating
performance by removing items management believes are not
representative of our continuing operations and may distort our
longer-term operating trends. We believe these measures are useful
and enhance the comparability of our results from period to period
and with our competitors, as well as show ongoing results from
operations distinct from items that are infrequent or not
associated with the company's core operations. The company
does not, nor does it suggest investors should, consider such
non-GAAP financial measures as superior to, in isolation from, or
as a substitute for, GAAP financial information. We do not provide
forward-looking guidance for certain financial measures on a GAAP
basis because we are unable to predict certain items contained in
the GAAP measures without unreasonable efforts. These items may
include acquisition-related costs, litigation charges or
settlements, impairment charges, and certain other unusual
adjustments.
EBITDA
EBITDA is key metric we use to assess the underlying
profitability of our business operations. It is calculated as net
income before the effects of certain net expenses that directly
arise from our financing decisions (interest), tax strategies
(income taxes) and capital investment decisions (depreciation,
amortization). We use EBITDA to forecast our performance, evaluate
our actual results against our forecasts and compare our results to
others in the industries that we serve. EBITDA is also a measure of
performance included in our executive incentive compensation plans.
This is a metric that is widely used by analysts, investors and
competitors in our industry.
Free Cash Flow
Free cash flow is key metric we use to assess how much cash we
generate from operations in a period, after funding maintenance and
strategic capital expense initiatives. We use Free Cash Flow to
determine how effective we are at generating cash to fund other
investing and financing priorities, including making strategic
mergers and acquisitions, repaying debts, issuing dividends, and
buying back shares. We calculate free cash flow as net cash
provided by operating activities from continuing operations, less
purchases of property, plant and equipment. This is a metric that
is widely used by analysts, investors and competitors in our
industry.
About Genuine Parts Company
Founded in 1928, Genuine Parts Company is a global service
organization engaged in the distribution of automotive and
industrial replacement parts. The company's Automotive Parts Group
distributes automotive replacement parts in the U.S., Canada, Mexico, Australasia, France, the United
Kingdom, Ireland,
Germany, Poland, the
Netherlands, Belgium,
Spain and Portugal. The company's Industrial Parts Group
distributes industrial replacement parts in the U.S., Canada, Mexico and Australasia. In total, the company
serves its global customers from an extensive network of more than
10,000 locations in 17 countries and has approximately 58,000
employees. Further information is available at www.genpt.com.
Forward Looking Statements
Some statements in this release, as well as in materials the
company files with the Securities and Exchange Commission (SEC),
release to the public or make available on the company's website,
constitute forward-looking statements that are subject to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. All statements in the future tense and all statements
accompanied by words such as "expect," "likely," "outlook,"
"forecast," "preliminary," "would," "could," "should," "position,"
"will," "project," "intend," "plan," "on track," "anticipate," "to
come," "may," "possible," "assume," or similar expressions are
intended to identify such forward-looking statements. These
forward-looking statements include information about the company's
Investor Day, and the established full-year 2023 and 2025 financial
guidance for the company provided above. Senior officers may also
make verbal statements to analysts, investors, the media and others
that are forward-looking.
The company cautions that all forward-looking statements involve
risks and uncertainties, and while the company believes that its
expectations for the future are reasonable in view of currently
available information, you are cautioned not to place undue
reliance on our forward-looking statements. Actual results or
events may differ materially from those indicated as a result of
various important factors. Such factors may include, among other
things, changes in general economic conditions, including
unemployment, inflation (including the impact of tariffs) or
deflation and geopolitical conflicts such as the conflict between
Russia and Ukraine; volatility in oil prices; significant
cost increases, such as rising fuel and freight expenses; public
health emergencies such as the COVID-19 pandemic, including the
effects on the financial health of our business partners and
customers, on supply chains and our suppliers, on vehicle miles
driven as well as other metrics that affect our business, and on
access to capital and liquidity provided by the financial and
capital markets; our ability to maintain compliance with our debt
covenants; our ability to successfully integrate acquired
businesses into our operations and to realize the anticipated
synergies and benefits; our ability to successfully implement our
business initiatives in our two business segments; slowing demand
for our products; the ability to maintain favorable supplier
arrangements and relationships; changes in national and
international legislation or government regulations or policies,
including changes to import tariffs, environmental and social
policy, infrastructure programs and privacy legislation, and their
impact to us, our suppliers and customers; changes in tax policies;
volatile exchange rates; our ability to successfully attract and
retain employees in the current labor market; uncertain credit
markets and other macroeconomic conditions; competitive product,
service and pricing pressures; failure or weakness in our
disclosure controls and procedures and internal controls over
financial reporting, including as a result of the work from home
environment; the uncertainties and costs of litigation; disruptions
caused by a failure or breach of our information systems, as well
as other risks and uncertainties discussed in the company's Annual
Report on Form 10-K for 2022 and from time to time in the company's
subsequent filings with the SEC.
Forward-looking statements speak only as of the date they are
made, and the company undertakes no duty to update any
forward-looking statements except as required by law. You are
advised, however, to review any further disclosures we make on
related subjects in our subsequent Forms 10-K, 10-Q, 8-K and other
reports filed with the SEC.
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SOURCE Genuine Parts Company