Genuine Parts Company (GPC) UBS Global Consumer and Retail Conference summary

Strategic rationale and separation process

• Decision to split into two public companies followed a robust strategic and financial analysis throughout 2025, aiming to maximize shareholder value and create agility for both businesses.

• Separation enables each business to pursue tailored growth strategies, including organic expansion, M&A, and focused investments in technology and supply chain.

• Workstreams underway include capital structure planning, SEC filings, audits, and synergy assessments, with separation costs described as manageable and not in the $400–500 million range.

• Leadership and talent management are key focuses, with efforts to preserve longstanding culture and ensure strong governance for both entities.

• Both businesses are targeting investment-grade capital structures, with flexibility to address their distinct needs and maintain supply chain financing programs.

Business outlook and operational performance

• Industrial (Motion) business is seeing positive trends in manufacturing and backlog, with customers adapting to uncertainty and deferred maintenance driving demand.

• Motion’s diversified verticals and disciplined execution have enabled outperformance, with investments focused on technology, supply chain optimization, and sales coverage.

• NAPA (automotive) business has shown sequential improvement in company-owned stores, while independent operators remain a focus for ongoing support and progress.

• Higher gas prices are not expected to materially impact demand unless there is a significant and prolonged oil shock; freight costs remain a small percentage of sales.

• Tariff changes are not expected to create windfalls or major pricing shifts, as most refunds would go to suppliers, and the pricing environment remains rational and stable.

Financial performance and investment priorities

• Gross margin improvement of 40–60 basis points is guided for the year, driven by strategic sourcing and advanced pricing technology.

• Fourth quarter headwinds included higher healthcare and SG&A costs, but these are not expected to repeat; early 2026 performance is in line with expectations.

• EBITDA growth and margin expansion are expected through execution of strategic initiatives, restructuring, and transformation, with muted conditions in Europe.

• Industry-wide cost pressures, especially in healthcare, are being managed through a combination of pricing, productivity, and restructuring.

• Investment in both businesses will continue, with a focus on precision and long-term value, leveraging a strong existing platform across geographies.