Standard Motor Products (SMP) investor relations material

Business overview and market dynamics

• Operates in three segments: North American aftermarket, European aftermarket (expanded via Nissens acquisition), and Engineered Solutions, with steady demand driven by aging vehicles and non-discretionary repairs.

• Aftermarket business is stable, with most sales to professional installers for vehicles aged 6–12 years, and minimal exposure to the DIY segment.

• Engineered Solutions segment targets niche, non-aftermarket customers in commercial, agriculture, and heavy-duty equipment, providing diversification.

• North American aftermarket represents about two-thirds of revenue, with the remainder split between Nissens (Europe) and Engineered Solutions.

• Manufacturing footprint is primarily in North America, reducing reliance on Asian imports and providing tariff advantages.

Recent acquisition and European expansion

• Acquired Nissens in November, the largest deal in company history, adding $277M in pro forma revenue and critical mass in Europe.

• Nissens is a leading European supplier for temp control and thermal management, with strong brand recognition and mid- to high-single-digit growth.

• Acquisition offers $8–12M in cost synergies over 24 months, with additional growth synergies expected as product lines and geographies are integrated.

• Nissens' customer base is diversified, with no single customer over 15% of sales, and provides opportunities for cross-selling and expansion in both Europe and the U.S.

• Seller was private equity firm Excel, which acquired Nissens from the founding family before selling 100% to SMP.

Segment performance and growth drivers

• North American aftermarket has 80,000 SKUs, offers full-line coverage, and supports customers with inventory, training, and marketing services.

• Market growth is driven by a large, aging car park (average age 12.3 years), resulting in steady low single-digit growth.

• European aftermarket mirrors North America in car park size and age, but Nissens has outpaced market growth, achieving 8% year-over-year sales increases.

• Engineered Solutions segment has grown from $237M to $285M, with resilience during recent market softness and a focus on higher-margin, longer-term contracts.

• All segments showed growth in the first half of the year, with overall sales up nearly 26%, including legacy business growth of just under 5%.