Genuine Parts Company (GPC) Gabelli Funds 48th Annual Automotive Symposium summary

Business overview and strategy

• Operates two main segments: automotive (NAPA) and industrial (Motion), with a $24B top line and presence in 17 countries.

• 75% of revenue is from North America, 15% Europe, 10% Asia-Pacific; B2B focus with fragmented markets and less than 10% global share.

• Recent portfolio simplification to focus on core segments, accelerating investments in talent, technology, and supply chain.

• Synergies leveraged globally through unified operating teams and scale in technology and indirect spend.

• Strategic investments target foundational, growth, and innovative areas, with a 70-20-10 allocation.

Financial performance and recent results

• Recent earnings showed low single-digit top-line growth, strong gross margin and cash flow, but earnings down year-over-year due to higher D&A and interest costs from acquisitions.

• Industrial segment saw low single-digit declines, European business was flat, both underperforming expectations and impacting earnings by $0.25-$0.30.

• $0.06 earnings impact from a hurricane; cost structure and execution remain solid despite soft markets.

• CapEx increased from 1% to 2% of sales, reflecting confidence in future opportunities.

Investment focus and returns

• Foundational investments (70%) include supply chain and distribution center upgrades, with multi-year paybacks.

• Growth investments (20%) focus on technology for search, data/catalog, and pricing, delivering faster returns.

• Innovative investments (10%) target medium-term opportunities, such as leveraging data and technology for repair shop productivity.

• New distribution centers consolidate rooftops and improve automation, with rigorous ROI evaluation.