Core Viewpoint - LKQ is expected to report quarterly earnings of $0.93 per share, reflecting a 5.1% decline year over year, with revenues forecasted at $3.61 billion, a decrease of 2.7% compared to the previous year [1]. Revenue Estimates - Analysts estimate 'Revenue- Other- Total' to be $151.43 million, indicating a decline of 4.8% from the prior-year quarter [4]. - 'Revenue- Parts and Services- Wholesale- North America' is projected to reach $1.35 billion, suggesting a 3.1% decrease year over year [4]. - The total 'Revenue- Parts and Services' is expected to be $3.44 billion, reflecting a 3.2% decline from the previous year [4]. - 'Revenue- Parts and Services- Specialty' is anticipated to be $438.81 million, indicating a 5.8% decrease year over year [5]. - 'Revenue- Parts and Services- Europe' is forecasted at $1.59 billion, suggesting a 2.4% decline from the prior-year quarter [5]. - 'Revenue- Parts and Services- Self Service' is estimated at $52.92 million, reflecting a 3.8% decrease year over year [5]. - 'Revenue- Specialty' is expected to be $436.72 million, indicating a 6.3% decline year over year [6]. - 'Revenue- Wholesale- North America' is projected to reach $1.43 billion, suggesting a 3.1% decrease year over year [6]. - 'Revenue- Europe' is expected to be $1.62 billion, indicating a 1.3% decline year over year [6]. - 'Revenue- Self Service' is estimated at $132.14 million, reflecting a 0.7% decrease year over year [7]. EBITDA Estimates - 'EBITDA- Self Service' is expected to reach $13.67 million, compared to $13.00 million reported in the same quarter of the previous year [7]. - 'EBITDA- Specialty' is projected at $33.34 million, down from $41.00 million reported in the same quarter of the previous year [8]. Stock Performance - Over the past month, shares of LKQ have remained unchanged, while the Zacks S&P 500 composite has increased by 5.4% [8].

Core Points - LKQ Corporation will release its second quarter 2025 financial results on July 24, 2025 [1] - A conference call and webcast will be held on the same day at 8:00 a.m. Eastern Time to discuss the results [2] - The company provides a range of alternative and specialty parts for automobiles and has operations in North America, Europe, and Taiwan [5] Conference Call Details - The conference call can be accessed by dialing (833) 470-1428 for domestic calls and (404) 975-4839 for international calls, with a conference ID of 409932 [2] - A replay of the conference call will be available by telephone and online, accessible through July 31, 2025 [4] Company Overview - LKQ Corporation is a leading provider of OE recycled and aftermarket parts, offering services to repair and accessorize various types of vehicles [5]

Core Insights - LKQ Corporation has formed a joint venture with SYNETIQ Ltd. to enhance its vehicle recycled parts strategy in Europe [1][2] - The joint venture, named LKQ SYNETIQ, aims to leverage LKQ's distribution capabilities and SYNETIQ's dismantling and recycling expertise to meet future EU regulations [2][4] - The collaboration is expected to provide sustainable and affordable parts for automotive repair, particularly for hybrid and electric vehicles [4] Company Overview - LKQ Corporation is a leading provider of alternative and specialty parts for automobiles, with operations in North America, Europe, and Taiwan [5] - The company offers a wide range of OE recycled and aftermarket parts, components, and services for various types of vehicles [5] Joint Venture Details - LKQ SYNETIQ will combine LKQ's logistics network with SYNETIQ's dismantling capabilities, which include dismantling approximately 27,000 vehicles annually across four UK sites [2][3] - The joint venture will be led by key executives from both companies, including Michael Hill from SYNETIQ and Annick Jourdenais from LKQ Europe [3] Strategic Goals - The partnership aims to maximize the environmental and financial potential of vehicles while supporting the UK's salvage community [4] - LKQ plans to continue acquiring salvage vehicles and recycled parts from various sources to enhance availability for consumers [4]

Core Insights - LKQ Corporation released its 2024 Sustainability Report, highlighting its commitment to driving success as a leading operator while supporting the global circular economy [1][2] - The company emphasizes a three-pillar strategy focused on sustainable solutions, people-led performance, and strong governance to manage risks and capitalize on opportunities [2][3] Company Achievements - In 2024, LKQ processed 735,000 vehicles and sold nearly 12 million salvaged parts, contributing significantly to the circular economy [5] - The company reduced Scope 1 and Scope 2 greenhouse gas emissions by 16% relative to revenue compared to a 2022 baseline, achieved through renewable energy use and energy efficiency upgrades [5] - LKQ donated over $4 million through its Community Foundation to various charitable causes, enhancing its community engagement and stakeholder relationships [5]

Company Performance - LKQ Corporation reported solid numbers in the last quarter, benefiting from its size and market positioning in North America [1] Investment Philosophy - The investment approach focuses on finding value opportunities, particularly in small and mid-cap sectors where market inefficiencies are prevalent [1] - The strategy includes identifying industry leaders in out-of-favor sectors, quality companies facing temporary setbacks, and businesses with strong balance sheets and robust cash generation [1] Analytical Approach - The analysis emphasizes balance sheet strength from a credit perspective, near-term cash flow generation, next twelve-month earnings forecasts, and book value analysis, especially for financial sector investments [1] Professional Background - The investment philosophy is supported by over 10 years of experience in financial sector consulting, which aids in identifying overlooked opportunities [1]

LKQ (LKQ) FY 2025 Annual General Meeting May 07, 2025 03:00 PM ET Speaker0 I want to welcome all of you to the Annual Meeting of Stockholders of LKQ Corporation. I am Justin Jude, President and Chief Executive Officer of LKQ. We are pleased to be hosting our sixth virtual meeting. It is now shortly after 2PM Central on Wednesday, May 7, and this meeting is called to order. I would like to introduce the other members of the board participating in today's meeting, Patrick Burrard, Andrew Clark, Meg DeVito, Su ...

Group 1 - The previous investment outlook for LKQ Corporation (NASDAQ: LKQ) was downgraded to a hold rating due to uncertainty about a turnaround in the second half of 2025 [1] - The investment strategy focuses on long-term investments while also incorporating short-term shorts to identify alpha opportunities [1] - The analysis is based on a bottom-up approach, examining the fundamental strengths and weaknesses of individual companies [1] Group 2 - The investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Investment Rating - The report assigns an "Overweight" (OW) rating to General Motors (GM) and Ford, while Tesla and Rivian are rated "Underweight" (UW) [6][7]. Core Insights - The automotive industry is experiencing varied performance metrics across different companies, with GM and Ford showing potential upside in their stock prices, while Tesla and Rivian face significant downside risks [6][7]. - The report highlights the importance of valuation metrics such as EV/EBITDA, P/E ratios, and sales growth projections for assessing investment opportunities within the automotive sector [6][22]. Global Auto OEMs Investment Comparables - General Motors (GM) has a current price of $44.57 with a market cap of $43.067 billion and a target price of $53.00, indicating a 19% upside potential [6]. - Ford (F) is priced at $9.63 with a market cap of $38.294 billion and a target price of $11.00, representing a 14% upside [6]. - Ferrari (RACE) is valued at $439.97 with a target price of $460.00, showing a 5% upside [6]. - Tesla (TSLA) is currently priced at $241.37 with a target price of $120.00, indicating a -50% downside [6]. - Rivian (RIVN) has a price of $11.60 with a target price of $11.00, reflecting a -5% downside [6]. Global Auto Parts Suppliers Valuation Metrics - The average EV/EBITDA for US auto parts suppliers is projected at 1.8x for 2024, with a corresponding EBITDA margin of 12% [22]. - Aptiv (APTV) is rated "Overweight" with a current price of $51.71 and a target price of $102, indicating a 97% upside [22]. - Borg Warner (BWA) is rated "Overweight" with a price of $26.45 and a target price of $46, representing a 74% upside [22]. - Lear Corp (LEA) is rated "Overweight" with a price of $79.42 and a target price of $140, indicating a 76% upside [22]. Performance Metrics - The report indicates that the average revenue CAGR for US auto parts suppliers is projected to be 2% from 2023 to 2025 [74]. - The EBITDA margin for US auto parts suppliers is expected to be around 12% in 2025, with some companies showing higher margins [74][83]. - The report also highlights the financial returns of various suppliers, with some companies achieving significant returns on invested capital (ROIC) [54][56].

Financial Data and Key Metrics Changes - The company reported diluted earnings per share of $0.65, a 6¢ increase compared to Q1 2024, while adjusted diluted earnings per share decreased by $0.03 to $0.79 [28][29] - North America's organic revenue fell by 4.1% per day, which is less than the decline seen in the last three quarters of 2024 [13] - The overall EBITDA margin for North America was 15.7%, a 60 basis point decrease year-over-year, while Europe reported a segment EBITDA margin of 9.3%, a 60 basis point improvement [31][33] Business Line Data and Key Metrics Changes - North America experienced a decline in repairable claims, impacting organic revenue, but managed to generate positive growth in lead tech calibration and diagnostics [13][14] - Specialty's organic revenue declined by 4.9% on a per-day basis, although there was sequential improvement compared to Q4 of 2024 [19] - Self-service operations delivered a year-over-year improvement in both EBITDA dollars and percentage, generating $20 million in segment EBITDA for Q1 [36] Market Data and Key Metrics Changes - In Europe, organic revenue declined by 1.8% per day compared to a growth of 4.4% in Q1 of 2024, with noticeable softness in many markets due to consumer confidence [14][15] - The company noted that competitive pricing in some countries contributed to challenging conditions, but they expect stabilization in the long term [16] - The SKU rationalization project in Europe has led to a reduction of 17,000 SKUs, with private label penetration increasing by 20 basis points [17] Company Strategy and Development Direction - The company remains committed to a balanced capital allocation strategy, incorporating dividends, share repurchases, and maintaining an investment-grade rating [12] - The ongoing strategy to simplify the portfolio included divesting two operations, demonstrating a commitment to streamlining [11] - The focus is on people, process, and performance, with an emphasis on talent development and leadership competencies [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for repairable claims to improve due to rising used car prices and stabilizing insurance premiums [56][58] - The company established a global tariff task force to navigate the complexities of the current tariff situation, with less than 15% of U.S. business costs directly imported from outside the U.S. [22][21] - Management expects headwinds on repairable claims to continue in 2025 but anticipates some easing in the latter half of the year [33] Other Important Information - The company plans to publish its 2024 sustainability report in May, emphasizing sustainability in its operations [24] - Free cash flow during the quarter was a net outflow of $57 million, but positive free cash flow is anticipated in the next three quarters [37][38] - The company borrowed approximately $170 million in the quarter, with total debt at $4.4 billion and a leverage ratio of 2.5 times EBITDA [40][41] Q&A Session Summary Question: Trends from insurance companies regarding used car pricing - Management noted a shift in market share with insurance carriers and indicated that used car pricing has plateaued and started to improve [55][56] Question: Impact of tariffs on business - Management discussed the complexities of tariffs, indicating that they have historically been beneficial for the industry and that they are working with suppliers to mitigate impacts [60][67] Question: Impact of SKU reduction program in Europe - Management confirmed that there has been no negative impact on revenue from the SKU reduction program, as they have been able to offset sales through private labels [80][81] Question: Percentage of revenue from private label and future targets - Current private label revenue is in the 21-22% range, with a target of reaching around 30% by 2030 [86] Question: Link between pricing initiatives and competitive landscape - Management clarified that improvements in market share were not driven by pricing actions but by enhanced service levels and inventory management [96][97] Question: Clarification on aftermarket part imports and tariffs - Management explained the complexity of tariffs and confirmed that most aftermarket collision parts are already branded under private labels [101][102]

APRIL 24, 2025 First Quarter 2025 Earnings Call Presentation Forward Looking Statements and Non-GAAP Financial Measures Statements and information in this presentation that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are made pursuant to the "safe harbor" provisions of such Act. Forward-looking statements include, but are not limited to, statements regarding our outlook, guidance, expectations, beliefs, hopes, intentions an ...