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Item 1. Business

2024-02-22 compared with 2023-02-23 · 143 added, 108 removed, 99 unchanged (72% of the section changed)

Genuine Parts Company, “GPC”, a Georgia corporation incorporated on May 7, 1928, is a global service organization engaged in the distribution of automotive and industrial replacement parts, as described in more detail below.

In 2022, our business was conducted from more than 10,600 locations throughout North America, Europe, Australia and New Zealand ("Australasia") through an offering of best in class operating and distribution efficiencies, industry leading assortment of consumable/replacement parts, outstanding service and enhanced technology solution.

Incorporated in the State of Georgia in 1928, Genuine Parts Company is a global service organization engaged in the distribution of automotive and industrial replacement parts.

We serve our customers from more than 10,700 locations, primarily in North America, Europe, as well as Australia and New Zealand ("Australasia").

We offer outstanding service, an industry-leading assortment of replacement parts, extensive supply chain and distribution capabilities, and enhanced technology solutions.

As used in this report, "we," "us," "our," "GPC," and the “company” refers to GPC and its subsidiaries, except as otherwise indicated by the context;

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OUR PURPOSE & STRATEGY

We are one global team unified by our purpose:

We Keep the World Moving.

This is the foundation for how we do business.

Our mission is to be an employer of choice, supplier of choice, valued customer, good corporate citizen and investment of choice for all our shareholders.

Additionally, we strive to be a respected community member that gives back to the communities in which we operate.

We keep the world moving — this is our purpose and the foundation for how we do business.

We are one global team unified by our mission to be an employer of choice, supplier of choice, valued customer, responsible corporate citizen and investment of choice for our shareholders.

We strive to be a respected community member that gives back to the communities in which we operate.

In order to execute this mission, we align our resources with strategic areas of focus for our operations.

Specifically, we focus on our market-leading automotive and industrial businesses in North America, Europe and Australasia to deliver profitable growth, operational efficiencies and strong cash flow.

We have strategic initiatives designed to build on our current competitive advantages.

We focus on our market-leading automotive and industrial businesses to deliver profitable growth, operational efficiencies and strong cash flow.

We are organized into two business segments:

our Automotive Parts Group (“Automotive”) and our Industrial Parts Group (“Industrial”).

In the automotive landscape, we see a positive long-term growth outlook across the markets we serve supported by an increase in miles driven, a growing and aging car parc, increasing vehicle complexity, and a growing opportunity with electric vehicles.

In the industrial landscape, we see disruptions in the global supply chain creating opportunities with nearshoring, a strong outlook for automation and robotics solutions, the need for industrial expertise due to an aging technical workforce and diversified end market opportunities.

Our business segments create a competitive differentiation in two distinct and growing markets with compelling shareholder value.

We believe our primary competitive advantages are our:

(1) global presence and brand strength;

(2) best-in-class operating and distribution efficiencies;

(2) industry-leading positions in two distinct, but complementary markets;

(3) extensive supply chain and distribution capabilities;

and (4) enhanced technology solutions.

Our strategic financial objectives are intended to complement our mission and drive value for all our stakeholders.

Our strategic financial objectives complement our mission and drive value for all our stakeholders.

These financial objectives include:

(1) revenue growth in excess of market growth;

(2) improved operating margins;

(3) a strong balance sheet and cash flows;

(2) continuously improving operating margins;

(3) maintaining a strong balance sheet and cash flows;

and (4) effective capital allocation.

Our strategy is designed to position us for long-term growth and enhance shareholder value.

AUTOMOTIVE PARTS GROUP ("Automotive")

Our Automotive segment is the largest global automotive network of parts and care, distributing automotive parts, accessories and service items in North America, Europe and Australasia.

Our Automotive business offers complete inventory, cataloging, marketing, training and other programs to the automotive aftermarket in each of these regions which distinguish this business from the competition.

In North America, Automotive sells parts primarily under the National Automotive Parts Association ("NAPA") brand name through distribution centers and automotive parts stores (“auto parts stores” or “NAPA AUTO PARTS stores”).

In Europe, Alliance Automotive Group (“AAG”), a wholly-owned subsidiary of the company, is a leading distributor of vehicle parts, tools and workshop equipment with its primary operations in nine European countries.

AAG is rolling out the NAPA brand of products and currently serves its customers under a variety of banners, including Groupauto, Precisium Group, Pièces Auto, UAN, Alliance Automotive Group Germany, PartsPoint and Lausan.

In Australasia, Automotive serves the market primarily under the Repco and NAPA brand names.

Our strategy is designed to position us for long-term profitable growth and enhance shareholder value.

Our Automotive segment, which represents approximately 62% of total GPC net sales, is the largest global automotive network of parts and care.

We distribute automotive parts, accessories and solutions in North America, Europe and Australasia.

Our Automotive businesses offer complete inventory, cataloging, marketing, training and other programs to the aftermarket in each of these regions, distinguishing our business from the competition.

Our global Automotive network sells to customers in both commercial do-it-for-me (“DIFM”) and retail do-it-yourself (“DIY”) segments of the market and covers substantially all global motor vehicle models.

DIFM customers include local, regional and national repair centers, auto dealers, service stations and both private and public sector accounts.

DIY customers are primarily served over-the-counter at our global stores or digitally.

DIFM and DIY customers account for approximately 80% and 20% of Automotive total sales, respectively.

As part of our ongoing strategy, our Automotive network grew in 2022 with acquisitions of various strategic and bolt-on store groups in North America, Europe and Australasia.

In Europe, we expanded our footprint in two new key markets in Spain and Portugal, Europe's fifth largest market, while also expanding into Eastern Germany.

In Australasia, we acquired a leading Australian branded direct-to-consumer distributor of lighting products focused on the four-wheel drive market in Australasia and continued our bolt-on strategy in North America.

Store Network .

The following table details the breakdown of our Automotive distribution network including our distribution centers, company-owned and independently-owned automotive stores by geographic region as of December 31, 2022.

North America Europe Australasia Total

Distribution centers 77 78 14 169

Company-owned stores 1,682 742 529 2,953

Independently-owned stores 5,037 1,642 — 6,679

Total locations 6,796 2,462 543 9,801

The mix of company-owned stores versus independently-owned stores in a given market varies based on several factors including our overall market strategy, the ability to access desirable local retail space, the complexity, profitability and expected ultimate size of the market and our ability to provide operational support within a geographic region.

In our Australasian operations, we go to market with a company-owned store model.

Independently-owned stores purchase inventory from company-operated distribution centers.

These independently-owned stores are responsible for operating and managing their business, including operating costs and capital expenditures.

We do not receive a royalty or franchise fee from independently-owned stores.

Our 169 Automotive distribution centers serve both company-owned and independently-owned stores located throughout the geographic regions in which we operate.

Both types of automotive stores, in turn, sell to a wide variety of customers in the automotive aftermarket.

During 2022, we expanded our network with the addition of 138 net new stores during the year.

Our automotive distribution network provides access to hundreds of thousands of different replacement parts (other than body parts) for substantially all motor vehicle makes and models, including hybrid and electric vehicles, trucks, SUVs, buses, motorcycles, recreational vehicles and farm vehicles.

Each part is cataloged and numbered for identification and accessibility.

Our DIFM customers include local, regional and national repair centers, auto dealers, service stations and both private and public sector accounts.

Our DIY customers are primarily served over-the-counter at our global stores or digitally.

Our DIFM and DIY customers represent approximately 80% and 20% of total Automotive sales, respectively, and channel mix varies by geography.

Our Automotive network consists of over one million customer locations, including installers, fleet, government, and major accounts.

We have diversity amongst our customer base with no specific customer type representing an outsized concentration of our customer business.

Our Automotive segment operates in a large and fragmented market with a total addressable market greater than $200 billion.

The majority of the automotive aftermarket is comprised of small, local competitors which creates an opportunity to actively pursue strategic acquisitions and bolt-on store groups where we can bring scale, advanced technology, and supply chain efficiency to differentiate ourselves from competitors.

Our Automotive distribution network provides access to hundreds of thousands of replacement parts (other than body parts and tires) and accessory items for substantially all motor vehicle makes and models, including hybrid and electric vehicles, trucks, SUVs, buses, motorcycles, recreational vehicles, and for small engines, farm equipment, marine equipment and heavy duty equipment.

We supply certain equipment and parts used by repair shops, service stations, fleet operators, automobile and truck dealers, leasing companies, bus and truck lines, mass merchandisers, farms, and individuals who perform their own maintenance and parts installation.

Availability is a critical success factor in our business and our teams utilize data and analytics to have the right parts, in the right place and at the right time.

We do not manufacture any of the products we distribute.

The majority of products distributed in North America are under the NAPA name, a mark licensed to us by NAPA, which is important to the sales and marketing of these products.

In Australasia and Europe, products are distributed under several brand names, including many of the national brands, as well as the NAPA name.

Our Automotive operations have access to more than 725,000 different parts and related supply items.

These items are purchased from hundreds of different suppliers, with approximately 46% of 2022 automotive parts inventories purchased from 10 major suppliers.

We also distribute replacement parts for small engines, farm equipment, marine equipment and heavy duty equipment.

Our inventories also include accessory items for vehicles and equipment, and supply items used by a wide variety of customers in the automotive aftermarket, such as repair shops, service stations, fleet operators, automobile and truck dealers, leasing companies, bus and truck lines, mass merchandisers, farms, and individuals who perform their own maintenance and parts installation.

Traction, our heavy duty parts business in North America sells products distributed under the HD Plus name, a proprietary line of automotive parts for heavy duty truck market.

Service to NAPA AUTO PARTS Stores .

Our Automotive operations have access to approximately 800,000 different parts and related supply items.These items are purchased from hundreds of different suppliers, with approximately 46% of 2023 automotive parts inventories purchased from 10 major suppliers.

Regional Operations & Products.

In North America, our U.S.

operations are headquartered in Atlanta, Georgia and our Canadian operations are headquartered in Montreal, Quebec.

We distribute the majority of products in the U.S.

and Canada under the NAPA name, which is important to our sales and marketing efforts.

We go to market in North America primarily through company-owned and independent auto part stores, heavy vehicle stores, and specialty paint and equipment stores.

Our North American auto parts stores sell a comprehensive range of automotive parts, including brakes, batteries, filters, engine components, tools, accessories, and fluids.

Some locations offer custom services such as paint mixing, hydraulic hose assembly, battery testing, and key cutting.

Our heavy vehicle stores sell parts, accessories, tools and equipment for servicing heavy duty and diesel vehicles, and we operate service and mechanical repair centers for heavy vehicles.

We serve the heavy vehicle market under the banners Traction, TruckPro, TW, and Cadel.

In Canada, our specialty stores operate paint and body care equipment and supply under the banner NAPA/CMAX and high-quality replacement parts and lubricants for imported vehicles under the banners Altrom and Auto‑Camping.

Our online service in North America, NAPA online, provides a platform for customers to browse, purchase, and have automotive products delivered to their homes or businesses.

Separately, we provide a NAPA Auto Care program across the U.S.

and Canada for independent repair shop centers to increase visibility and receive part discounts and other benefits.

We offer technical expertise by training and employing knowledgeable staff who can provide technical assistance, product recommendations, and guidance on automotive repairs and maintenance, and we organize DIY workshops and training sessions to educate customers on automotive repair and maintenance tasks.

We believe that the quality and the range of services provided to our North American automotive parts customers constitute a significant advantage for our automotive parts distribution system.

Our goal is to properly stock our locations with the right parts to ensure we provide quick and quality service to our customers whose orders are often filled and shipped the same day they are received.

Our services also include up to date parts cataloging (including the use of electronic NAPA AUTO PARTS catalogs) and stock adjustments through a continuing parts classification system which, as initiated by us, allows independently-owned stores to return certain merchandise on a scheduled basis.

We offer our NAPA AUTO PARTS store customers various management aids, marketing aids and service on topics such as inventory control, cost analysis, accounting procedures, group insurance and retirement benefit plans, as well as marketing conferences and seminars, sales and advertising manuals and training programs.

We have developed and refined an inventory classification system to determine optimum distribution center and auto parts store inventory levels for automotive parts stocking based on automotive registrations, usage rates, production statistics, technological advances, including predictive analytics, and other similar factors.

This system, which undergoes continuous analytical review, is an integral part of our inventory control procedures and comprises an important feature of the inventory management services that we make available to our NAPA AUTO PARTS store customers.

Our services also include up to date parts cataloging (including the use of electronic NAPA Auto Parts catalogs) and stock adjustments through a continuous parts classification system which, as initiated by us, allows independently-owned stores to return certain merchandise on a scheduled basis.

We offer our NAPA Auto Parts stores various management aids, marketing aids and service on topics such as inventory control, cost analysis, accounting procedures, group insurance and retirement benefit plans, as well as marketing conferences and seminars, sales and advertising manuals and training programs.

We have developed and refined an inventory classification system to determine the most advantageous distribution center and auto parts store inventory levels for automotive parts stocking based on automotive registrations, usage rates, production statistics, technological advances, including predictive analytics, and other similar factors.

Losses from inventory obsolescence have not been significant historically and we attribute this to the successful operation of our classification system, which includes product return privileges with most of our suppliers.

In Europe, we operate Alliance Automotive Group (“AAG”), headquartered in London, England.

Europe is predominantly a DIFM market, with very few over-the-counter sales.

We serve thousands of vehicle repairers, body shops and auto-centers from over 2,000 distributor outlets across Europe, supported by a logistics infrastructure of national and regional distribution centers.

Our distributor outlets include company-owned and independent auto part stores and outlets, heavy vehicle outlets, and online and specialty outlets.

Our European banners include Groupauto, Precisium and Pièces Auto in France;

Coler, Busch, Hennig and Knoll in Germany;

Groupauto, UAN, FPS Distribution, APEC Braking, BTN Turbo, Platinum International, Alliance Automotive U.K.

Subsidiaries, and J&S Automotive Distributors in the U.K.

and Republic of Ireland;

PartsPoint in Belgium and the Netherlands;

Lausan, Soulima and Gaudi in Spain and Portugal;

and GroupAuto in Poland.

In France, we also provide parts and services for heavy duty and diesel vehicles under the Todd banner and we operate Back2Car, which distributes recycled car

In the Netherlands and Belgium, we offer programs for repair shops that want to join our installer network to increase their visibility and brand awareness while remaining independent.

Separately in Europe, we operate WinParts, an online platform for customers to browse, purchase, and have automotive products delivered to their homes or businesses.

In Australia and New Zealand, we operate GPC Asia Pacific – the region’s largest automotive aftermarket parts supplier.

We resell and distribute automotive replacement parts, accessories and related tools and equipment through a network of company-owned retail stores and advanced distribution centers.

GPC Asia Pacific operates three main lines of business:

Automotive Australia, Automotive New Zealand and Two Wheel Division.

Automotive Australia and Automotive New Zealand operate our auto parts stores in Australia and New Zealand under two banners:

(i) Repco, which operates a nationwide dual-format store network across both countries, providing parts, equipment, tools, batteries, technology, and oil to both trade and retail customers, and (ii) NAPA Auto Parts, which offers automotive electrical and mechanical parts to trade, fleet, industrial, commercial and mining specialist customers.

Both Repco and NAPA compliment their network with the market's leading digital capability, providing our customers with a seamless omni-channel transactional capability.

Our Two Wheel Division wholesales and retails motorcycle parts, apparel and accessories, with the market's leading range of the world’s most respected motorcycle brands, many of which are supplied under exclusive distribution agreements.

Two Wheel Division operates two wholesale banners (McLeod Accessories and John Titman Racing), and also operates Australia's largest and fastest growing motorcycle accessories and apparel retailer (AMX Super Stores).

GPC Asia Pacific also operates a number of direct-to-consumer digital businesses, including Sparesbox, STEDI and 4WD247.

Distribution Network.

Our independently-owned and company-owned stores located in every region are sourced by our distribution networks.

Both types of automotive stores sell to a wide variety of customers in the automotive aftermarket.

We strategically locate our stores close to installers, which are our primary customers, and we deliver products to them routinely throughout each business day by truck.

Traditional over-the-counter retail sales make up a smaller part of our overall business and vary by geography.

Independently-owned stores purchase inventory from company-operated distribution centers.

These independently-owned stores are responsible for operating and managing their businesses, including operating costs and capital expenditures.

We generally do not receive a royalty or franchise fee from independently-owned stores.

Independently-owned stores, which represent approximately 68% of our total automotive stores, provide a competitive advantage by allowing for local market knowledge and insights, enabling quicker adaptation to local customer preferences.

The mix of independently-owned versus company-owned stores in a given market varies based on several factors including our overall market strategy, the ability to access desirable local retail space, the complexity, profitability and expected ultimate size of the market and our ability to provide operational support within a geographic region.

In our Australasian operations, we go to market with a company-owned store model.

During 2023, we expanded our network with the addition of 173 net new stores during the year.

North America Europe Australasia Total

Distribution Centers 77 81 14 172

Company-Owned Stores 1,797 798 551 3,146

Independently-Owned Stores 4,961 1,698 — 6,659

Total Automotive Locations 6,835 2,577 565 9,977

Installer Networks .

We provide programs for repair centers to join regional networks to leverage our branding and supply network to increase their visibility and awareness while remaining independent.

The largest of these is our independent NAPA Auto Care center network in the U.S.

and Canada, which includes over 18,000 locations nationwide.

We are the sole member of the National Automotive Parts Association, LLC a voluntary association formed in 1925 to promote the distribution of automotive parts for its members.

NAPA, which neither buys nor sells

automotive parts, functions as a trade association that develops marketing concepts and programs for its sole member.

NAPA, which neither buys nor sells automotive parts, functions as a trade association that develops marketing concepts and programs for its sole member.

Among the automotive products purchased by us from various manufacturers for distribution are certain lines designated, cataloged, advertised and promoted as “NAPA” lines.

Generally, we are not required to purchase any specific quantity of parts and we may purchase competitive lines from the same as well as other supply sources.

We use the federally registered trademark NAPA ® as part of the trade name of our distribution centers and parts stores.

We fund NAPA’s national advertising program, which is designed to increase public recognition of the NAPA name and to promote NAPA product lines.

We use the federally registered trademark NAPA ® as part of the trade name of many of our distribution centers and parts stores in the U.S., Canada and Australia.

We fund NAPA’s advertising program, which is designed to increase public recognition of the NAPA name and to promote NAPA product lines.

We are a party to, together with the former members of NAPA, a consent decree entered by the Federal District Court in Detroit, Michigan, on May 4, 1954.

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We compete primarily on availability of product offering, service, brand recognition and price.

Our automotive competitors include AutoZone, Inc., O-Reilly Auto Parts, Inc., Advance Auto Parts, Inc., LKQ Corporation, Bapcor and Uni-Select, among many others.

Our automotive competitors include AutoZone, Inc., O-Reilly Auto Parts, Inc., Advance Auto Parts, Inc., LKQ Corporation and Bapcor, among many others.

Further information regarding competition in the industry is set forth in “Item 1A.

Risk Factors — We face substantial competition in the industries in which we do business.”

INDUSTRIAL PARTS GROUP ("Industrial")

Our Industrial segment operates in both North America and Australasia through our wholly-owned subsidiaries Motion Industries, Inc.

Our Industrial segment, which represents approximately 38% of total GPC net sales, operates in both North America and Australasia through our wholly-owned subsidiaries Motion Industries, Inc.

(“Motion”), headquartered in Birmingham, Alabama, and Motion Asia Pacific, headquartered in Sydney, Australia.

Industrial distributes industrial replacement parts and related supplies such as bearings, mechanical and electrical power transmission products, industrial automation and robotics, hoses, hydraulic and pneumatic components, industrial and safety supplies and material handling products to maintenance, repair and operation (“MRO”) and original equipment manufacturer (“OEM”) customers throughout the U.S., Canada, Mexico and Australasia

In 2022, our Industrial segment served more than 200,000 OEM and MRO customers in all types of industries, including equipment and machinery, food and beverage, forest products, primary metals, pulp and paper, mining, automotive, oil and gas, petrochemical and pharmaceutical industries;

as well as strategically targeted specialty industries such as power generation, alternative energy, government, transportation, ports and others.

We established a new electric vehicle battery category based on increasing opportunities presented by the build-out of new battery manufacturing facilities across North America.

Our Industrial business offers replacement parts and solutions to maintenance, repair and operation (“MRO”) customers and original equipment manufacturer (“OEM”) customers.

Our Industrial segment operates in a large and fragmented market with a total addressable market of greater than $150 billion.

In 2023, our Industrial segment served more than 200,000 MRO and OEM customers in all types of industries with more than 900,000 customer locations.

Our Industrial segment services all manufacturing and processing industries with access to a database of over 19 million parts.

The nature of Motion's business demands the maintenance of adequate inventories and the ability to promptly meet critical delivery requirements.

Virtually all of the products distributed are installed by the customer or used in plant and facility maintenance activities.

Most orders are filled immediately from existing stock and deliveries are normally made within 24 hours of order receipt.

The majority of all sales are on open account.

Motion has ongoing sales agreements with many of its national account customers which, collectively, represent approximately 45% of its annual sales volume.

Operations & Products .

Motion is a premier industrial solutions company in North America and Australasia (including Australia, New Zealand, Indonesia and Singapore) due to our superior customer service, value-added services and over 19 million replacement parts.

Our product and solution offerings include MRO and OEM support, specialty stores, on-site solutions offerings, service and repair offerings, and e-business assistance.

We distribute a large range of MRO and OEM industrial products, such as replacement parts and related supplies such as abrasives, adhesives, sealants and tape, bearings, chemicals, cutting tools, electrical, facility maintenance, hose and fittings, hydraulics, janitorial, mechanical power transmission, pneumatics, process pumps and equipment, safety, seals and gaskets, and tools and testing instruments.

The sectors we operate in include aggregate and cement, automotive, chemical and allied products, equipment and machinery, equipment rental and leasing, fabricated metals, food and beverage, iron and steel, lumber and wood, oil and gas, pulp and paper, and rubber products.

We have strategically targeted specialty industries in power generation, alternative energy, government, transportation, ports, and an electric vehicle battery category based on increasing opportunities presented by the build-out of new battery manufacturing facilities across North America.

The Industrial business provides customers with supply chain efficiencies achieved through our on-site solutions offering.

This service provides inventory management, asset repair and tracking, vendor managed inventory ("VMI"), as well as radio frequency identification ("RFID") asset management of the customer’s inventory.

Industrial also provides a wide range of services and repairs such as:

gearbox and fluid power assembly and repair, process pump assembly and repair, hydraulic drive shaft repair, electrical panel assembly and repair, and hose and gasket manufacture and assembly.

A highly developed supply chain with vendor partnerships and connectivity are enhanced by Motion’s leading e-business capabilities, such as MiSupplierConnect, which provides integration between our information technology network and suppliers’ systems, creating numerous benefits for both the supplier and customer.

Industrial also provides a wide range of services and repairs such as gearbox and fluid power assembly and repair, process pump assembly and repair, hydraulic drive shaft repair, electrical panel assembly and repair, and hose and gasket manufacture and assembly.

Motion is also a leading supplier or automation products and motion control solutions in North America through Motion AI.

Separately, Motion provides leading e-business capabilities through MiSupplierConnect, a highly developed supply chain with vendor partnerships and connectivity that provides integration between our information technology network and suppliers’ systems, creating numerous benefits for both

the supplier and customer.

These services and supply chain efficiencies assist Motion in providing the cost savings that many of its customers require and expect.

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Service Centers 68 2 70

Total locations 635 166 801

Our 35 Industrial distribution centers serve the branches and services centers located throughout the geographic regions in which we operate.

Total Industrial Locations 588 165 753

Our Industrial distribution centers serve the branches and service centers located throughout the geographic regions in which we operate.

The branches and service centers, in turn, sell to MRO and OEM customers in all types of industries across North America and Australasia.

We are committed to enhancing the customer experience by improving access to inventory through our fulfillment centers.

The fulfillment center strategy is designed to address the customer expectations of a broader inventory selection closer to the point of demand, supported by world-class final-mile delivery occurring the next business day with same-day service available.

We continue to invest in our fulfillment center strategy with the opening of a second North American facility in 2023.

We plan to open one to three North American facilities in 2024 and continue to invest in additional facilities in the future.

In North America, our Industrial business stocks or distributes more than 19 million different items purchased from more than 47,000 different suppliers.

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In Australasia, our Industrial business operates a network of distribution centers, branches and service centers across Australia, New Zealand, Indonesia and Singapore as of December 31, 2023.

Our Industrial network was expanded on January 3, 2022 with the acquisition of Kaman Distribution Group ("KDG").

KDG, which is headquartered in Bloomfield, Connecticut, is a power transmission, automation and fluid power industrial distributor and solutions provider with operations throughout the United States, providing electro-mechanical products, bearings, power transmission, motion control and electrical and fluid power components to MRO and OEM customers.

This strategic and highly synergistic combination significantly enhances our scale and strengthens our market leading position, creating a premier leader of industrial solutions.

Most branches are facilities that stock inventory representative of the products used by customers in the respective market areas served.

Industrial distributes a wide variety of parts and products to its customers, which are primarily industrial companies.

Products include such items as hoses, belts, bearings, pulleys, pumps, valves, chains, gears, sprockets, speed reducers, electric motors, industrial supplies, assembly tools, test equipment, adhesives and chemicals.

Industrial also offers systems and automation products that support sophisticated motion control and process automation for full systems integration of plant equipment.

The nature of Motion's business demands the maintenance of adequate inventories and the ability to promptly meet critical delivery requirements.

Virtually all of the products distributed are installed by the customer or used in plant and facility maintenance activities.

Most orders are filled immediately from existing stock and deliveries are normally made within 24 hours of order receipt.

The majority of all sales are on open account.

Motion has ongoing purchase agreements with many of its national account customers which, collectively, represent approximately 40% of the annual sales volume.

Supplier Agreements .

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The industrial distribution business is highly competitive and fragmented.

We compete with national, regional and local distributors specializing in the distribution of such items, general line distributors and others who provide similar services.

We compete with national, regional and local distributors, general line distributors and others.

To a lesser extent, we compete with manufacturers that sell directly to the customer and with various industrial eCommerce sites.

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Risk Factors — We face substantial competition in the industries in which we do business.”

ENVIRONMENTAL, SOCIAL AND GOVERNANCE

ENVIRONMENTAL SUSTAINABILITY

We are committed to the development of sustainable and efficient operations and business practices that enhance and protect our people, our communities and our planet.

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Our process of defining sustainability priorities focuses on the simultaneous improvement of our environmental, social and financial position, and our strong leadership and governance practices that strive to integrate sustainability into our business strategy and corporate culture.

The Nominating and ESG Committee of the Board of Directors oversees our sustainability initiatives which aims to deliver long-term value for our shareholders and all our stakeholders.

The Nominating and ESG Committee of the Board of Directors oversees our sustainability initiatives which aim to deliver long-term value for our shareholders and all our stakeholders.

We seek to promote a diverse, equitable and inclusive workplace and to ensure the health, safety and well-being of all employees.

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Refer to the “Human Capital Management” section below for further information on our human capital management initiatives.

We are committed to reducing our environmental footprint and positively impacting the planet through the implementation of sustainable initiatives throughout our value chain.

We have engaged a leading sustainability partner to assist us with calculating our global greenhouse gas footprint, which includes all our facilities and operations worldwide.

The new global emissions calculation provides the basis for measuring and reporting progress on reducing emissions over time, and it serves as a guidepost as we develop a comprehensive global carbon abatement strategy.

We have expanded the use of LED lighting retrofits and smart HVAC systems in our facilities and have continued to implement and monitor fleet management practices and policies to minimize our energy usage and carbon emissions.

Additionally, we are helping our teammates, customers and the industry prepare for electric vehicles ("EVs") and the changes taking place in the market.

We see this as an opportunity to lead our industry with knowledge and new products for EVs.

We are continuously incorporating environmental stewardship in our practices and discovering opportunities to develop more efficient operations.

We are committed to reducing our environmental footprint through the implementation of sustainable initiatives throughout our value chain.

We are continuously incorporating environmental stewardship in our practices and

discovering opportunities to develop more efficient operations.

Additional information regarding our sustainability efforts and future initiatives can be found in our 2023 Sustainability Report and the Sustainability section of our website at www.genpt.com.

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To support these objectives, our human resources programs are designed to connect prospective and current talent to opportunities at the company, engage current employees through an inclusive and diverse culture, and develop employees to grow for future opportunities within the organization.

Employee Retention and Professional Development

As of December 31, 2022, we employed approximately 58,000 people worldwide and operated within 17 countries.

We take pride in our employees and are committed to helping them improve their physical, emotional, financial and social well-being.

As of December 31, 2023, we employed more than 60,000 people worldwide and operated within 17 countries.

We are proud of our employees and are committed to helping them improve their physical, emotional, financial and social well-being.

Our benefit offerings are designed to meet the varied and evolving needs of a diverse workforce across businesses and geographies while helping our employees care for themselves and their families.

We offer benefits aimed at improving quality of care while limiting out-of-pocket costs.

We offer healthcare benefits aimed at improving quality of care while limiting out-of-pocket costs.

In addition, our well-being programs include an online platform that offers an interactive way to accomplish personal and financial goals and a rewards platform to reward employees for completing company sponsored competitions and well-being activities.

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Our leadership team reviews the survey results and based on the survey responses, action plans are developed to focus on areas of opportunity.

We are pleased to report that our most recent engagement survey results were favorable overall and have shown that our employees are proud to work for us.

We are pleased to report that our most recent engagement survey results were favorable overall and have shown that our employees are proud to work for the company.

The results of the engagement surveys help us continuously improve our human capital strategies and find ways to foster engagement and growth for our employees.

In addition, to empower employees to continually enhance their skills and reach their maximum potential, we provide a range of development programs, resources, and opportunities.

Many are facilitated locally by each business with core leadership development at the Corporate level.

Many are facilitated locally by each business unit with core leadership development at the Corporate level.

One of our more significant programs is focused on high potential employees from all global business units.

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We believe these programs demonstrate our ongoing commitment to develop our future leaders.

Diversity, Equity and Inclusion ("DEI")

We provide scholarships with an emphasis for students who attend Historically Black Colleges and Universities and collaborate with organizations that support women such as Women in Technology and Women in Auto Care.

We also support organizations that advance the interests of disadvantaged individuals and communities in need.

We continue to partner with Georgia Minority Supplier Diversity Council, the Georgia Hispanic Chamber of Commerce, United Way's African American Partnership and Young Professional Leaders, among other programs.

Our culture is strengthened by our core values, which includes a steadfast commitment to standing up for equality for our teammates, suppliers, customers, communities and other stakeholders.

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We are committed to creating a welcoming environment where all teammates have opportunities to grow and feel a sense of belonging, regardless of gender, sex, race, color, religion, national origin, age, disability, veteran status, sexual orientation, gender expression or experiences.

Our goal is to

create an inclusive and welcoming culture where we value, respect, and provide equal opportunities for all employees.

Our Diversity, Equity, and Inclusion Council, led by senior leadership and representatives from each business unit have helped to ensure accountabilities exist to advance new and current DEI initiatives.

Some initiatives include, providing scholarships with an emphasis for students who attend Historically Black Colleges and Universities and collaboration with organizations that support women such as Women in Technology and Women in Auto Care.

Our commitment also includes supporting organizations that advance the interests of disadvantaged individuals and communities in need.

We continue to partner with Georgia Minority Supplier Diversity Council, the Georgia Hispanic Chamber of Commerce, United Way's African American Partnership and Young Professional Leaders programs.

Our goal is to create an inclusive and welcoming culture where we value, respect, and provide equal opportunities for all employees.

Our efforts are also directed internally where we encourage the exchange of ideas, actively listen to employee dialogue, provide appropriate training, and ensure that the interests of all our employees are supported and advanced.

This year we launched four business resource groups ("BRGs") - African American, Asian, Veteran and Women, for our corporate teammates in the Unites States.

These BRGs provide our teammates with venues for personal and professional development, including networking, coaching, skill building, community engagement, volunteering and advancement opportunities.

These groups play a key role in educating and engaging teammates in our DEI goals and efforts.

This year we launched three new business resource groups ("BRGs").

These BRGs, along with our existing BRGs, provide our teammates with venues for personal and professional development, including networking, coaching, skill building, community engagement, volunteering and advancement opportunities.

We aim to leverage key learnings from these groups and expand the program globally.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business