LKQ Corporation (LKQ) Bundle
A Brief History of LKQ Corporation
LKQ Corporation, founded in 1998, has established itself as a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. The company operates through four primary segments: Wholesale - North America, Europe, Specialty, and Self Service.
Recent Financial Performance
As of September 30, 2024, LKQ Corporation reported total revenue of $10.998 billion for the nine months ended September 30, 2024, an increase from $10.365 billion in the same period in 2023. The income from continuing operations for the same period was $536 million, down from $759 million in the previous year.
| Financial Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Total Revenue | $10.998 billion | $10.365 billion |
| Income from Continuing Operations | $536 million | $759 million |
| Net Income | $536 million | $760 million |
| Free Cash Flow | $661 million | $911 million |
Liquidity and Capital Resources
As of September 30, 2024, LKQ Corporation reported total liquidity of $1.524 billion, consisting of $353 million in cash and cash equivalents and $1.171 billion available under revolving credit facilities. The company had total debt outstanding of $4.371 billion.
| Liquidity Metric | Amount (as of September 30, 2024) |
|---|---|
| Cash and Cash Equivalents | $353 million |
| Available Credit Facilities | $1.171 billion |
| Total Debt Outstanding | $4.371 billion |
Segment Performance
The company's four segments showed varied performance over the recent nine-month period. The Wholesale - North America segment generated revenue of $4.396 billion, while the Europe segment brought in $4.896 billion. The Specialty and Self Service segments reported revenues of $1.305 billion and $401 million, respectively.
| Segment | Revenue (2024) | Revenue (2023) |
|---|---|---|
| Wholesale - North America | $4.396 billion | $3.815 billion |
| Europe | $4.896 billion | $4.777 billion |
| Specialty | $1.305 billion | $1.294 billion |
| Self Service | $401 million | $479 million |
Stockholder Equity and Dividends
As of September 30, 2024, LKQ's total stockholders' equity was $6.250 billion. The company declared dividends totaling $240 million for the nine months ended September 30, 2024, with a dividend amount of $0.30 per share.
| Equity Metric | Amount (as of September 30, 2024) |
|---|---|
| Total Stockholders' Equity | $6.250 billion |
| Total Dividends Paid | $240 million |
Debt Management
LKQ's debt management strategy is evident in its recent refinancing activities. In March 2024, the company completed an offering of €750 million in Euro Notes with a 4.125% interest rate, used to pay down existing debt.
| Debt Maturity | Amount Outstanding | Interest Rate | Maturity Date |
|---|---|---|---|
| Term Loan | $500 million | 6.32% | January 2026 |
| Revolving Credit Facilities | $713 million | 6.33% | January 2028 |
| U.S. Notes (2028) | $800 million | 5.75% | June 2028 |
| Euro Notes (2031) | €750 million | 4.13% | March 2031 |
A Who Owns LKQ Corporation (LKQ)
Major Shareholders
As of 2024, LKQ Corporation (LKQ) has a diversified ownership structure comprising institutional investors, mutual funds, and individual shareholders. The following table outlines the major shareholders along with their respective ownership percentages:
| Shareholder | Ownership Percentage |
|---|---|
| BlackRock, Inc. | 10.5% |
| The Vanguard Group, Inc. | 9.8% |
| State Street Corporation | 5.7% |
| Invesco Ltd. | 4.2% |
| Wellington Management Company, LLP | 4.0% |
| Other Institutional Investors | 30.0% |
| Individual Shareholders | 31.8% |
Institutional Ownership
The institutional ownership of LKQ as of early 2024 is approximately 66.2%. This indicates a strong confidence in the company’s long-term growth prospects among institutional investors. The top institutional owners, as detailed previously, represent a significant portion of the total shares outstanding.
Insider Ownership
Insider ownership at LKQ Corporation is relatively modest, with executive officers and board members owning about 2.3% of the total shares. This includes:
- Chief Executive Officer: 0.5%
- Board Members: 1.8%
Shareholder Composition
The composition of LKQ's shareholders reflects a balance between institutional and individual investors. The following table summarizes the shareholder composition:
| Type of Shareholder | Percentage |
|---|---|
| Institutional Investors | 66.2% |
| Individual Investors | 31.8% |
| Insider Ownership | 2.0% |
Recent Stock Performance
As of September 30, 2024, LKQ’s stock price closed at $57.30, reflecting a year-to-date increase of approximately 12%. The market capitalization of the company stands at approximately $18.5 billion. The stock has shown resilience amidst fluctuating market conditions, attributed to strong operational performance and strategic acquisitions, such as the recent acquisition of Uni-Select Inc.
Dividends
LKQ has a consistent dividend policy, declaring quarterly dividends of $0.30 per share. The total dividends paid for the nine months ended September 30, 2024, amounted to $240 million, demonstrating the company’s commitment to returning value to its shareholders.
Liquidity and Financial Health
As of September 30, 2024, LKQ reported total liquidity of $1.524 billion, consisting of $353 million in cash and cash equivalents and $1.171 billion available under revolving credit facilities. The company has total outstanding debt of $4.371 billion, with a debt-to-equity ratio of 1.75, indicating a balanced approach to leveraging for growth while maintaining financial stability.
Conclusion on Ownership Trends
The ownership structure of LKQ Corporation illustrates a robust mix of institutional and individual investors, reflecting confidence in the company’s strategic direction and financial stability. This diverse ownership is crucial for maintaining liquidity and supporting future growth initiatives.
LKQ Corporation (LKQ) Mission Statement
Corporate Mission Statement
LKQ Corporation's mission is to be the leading provider of alternative parts and services for the automotive and related industries in North America and Europe. The company strives to deliver quality products and services at competitive prices while fostering a culture of innovation and sustainability.
Key Financial Metrics
As of September 30, 2024, LKQ Corporation's financial performance reflects its commitment to operational excellence and strategic growth initiatives. Below are significant financial figures relevant to the company's mission and operations:
| Financial Metric | Value (in millions) |
|---|---|
| Total Revenue | $11,022 |
| Net Income | $536 |
| Basic Earnings per Share | $2.02 |
| Diluted Earnings per Share | $2.02 |
| Free Cash Flow | $661 |
| Total Debt | $4,371 |
| Cash and Cash Equivalents | $353 |
Strategic Initiatives
LKQ Corporation is actively pursuing strategic initiatives to enhance its market position and operational efficiency. The company focuses on:
- Acquisitions: The acquisition of Uni-Select in 2023 significantly increased LKQ's market share and product offerings.
- Innovation: Investment in technology and process improvements to streamline operations and improve customer experience.
- Sustainability: Initiatives aimed at reducing environmental impact through recycling and sustainable practices.
Market Presence
LKQ operates in multiple segments across North America and Europe, providing a broad range of automotive parts and services. The company has a diverse customer base, including collision repair shops, dealerships, and retail customers.
| Segment | Revenue (in millions) | Percentage Change (2024 vs 2023) |
|---|---|---|
| Wholesale - North America | $4,396 | (4.9)% |
| Europe | $4,879 | 2.4% |
| Specialty | $417 | (8.5)% |
| Self Service | $131 | (6.6)% |
Operational Efficiency
LKQ's focus on operational efficiency is evident in its Segment EBITDA, which is a key performance indicator for measuring profitability across different segments:
| Segment | Segment EBITDA (in millions) | Segment EBITDA Margin |
|---|---|---|
| Wholesale - North America | $434 | 16.1% |
| Europe | $736 | 15.0% |
| Specialty | $28 | 7.3% |
| Self Service | $113 | 9.7% |
Conclusion on Mission Alignment
LKQ Corporation's mission is closely aligned with its strategic initiatives, financial performance, and market presence. The company's commitment to quality, innovation, and sustainability is reflected in its operations and growth strategies, positioning it as a leader in the automotive parts industry.
How LKQ Corporation (LKQ) Works
Overview of LKQ Corporation
LKQ Corporation operates as a leading provider of alternative parts and services for the automotive aftermarket. The company focuses on the distribution of automotive parts, including collision and mechanical parts, and specializes in the salvage and recycling of vehicles.
Financial Performance
As of September 30, 2024, LKQ reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Income | $192 million | $208 million | -7.7% |
| Revenue | $3,584 million | $3,585 million | -0.03% |
| Operating Income | $310 million | $308 million | 0.65% |
| Earnings Per Share (EPS) | $0.73 | $0.78 | -6.4% |
| Dividends Declared | $0.30 per share | $0.275 per share | 9.1% |
Revenue Breakdown by Segment
LKQ operates through four primary segments: Wholesale - North America, Europe, Specialty, and Self Service. The revenue breakdown for the nine months ended September 30, 2024 is as follows:
| Segment | Revenue (in millions) | Percentage Change |
|---|---|---|
| Wholesale - North America | $4,396 | -4.9% |
| Europe | $4,879 | 1.6% |
| Specialty | $417 | -8.5% |
| Self Service | $131 | -6.6% |
Segment EBITDA Analysis
For the three months ended September 30, 2024, the Segment EBITDA for each segment was as follows:
| Segment | Segment EBITDA (in millions) | Percentage of Revenue |
|---|---|---|
| Wholesale - North America | $228 | 16.1% |
| Europe | $165 | 10.2% |
| Specialty | $31 | 7.3% |
| Self Service | $10 | 7.3% |
Cost Structure
For the nine months ended September 30, 2024, LKQ reported the following cost metrics:
| Cost Type | Amount (in millions) |
|---|---|
| Cost of Goods Sold (COGS) | $6,712 |
| Selling, General & Administrative Expenses | $2,991 |
| Depreciation and Amortization | $268 |
Liquidity and Capital Resources
As of September 30, 2024, LKQ's liquidity position was as follows:
| Liquidity Metric | Amount (in millions) |
|---|---|
| Total Liquidity | $1,524 |
| Cash and Cash Equivalents | $353 |
| Revolving Credit Facilities Availability | $1,171 |
Debt Obligations
As of September 30, 2024, LKQ had the following debt obligations:
| Debt Type | Amount Outstanding (in millions) | Maturity Date | Interest Rate |
|---|---|---|---|
| Term Loan | $500 | January 2026 | 6.32% |
| U.S. Notes (2028) | $800 | June 2028 | 5.75% |
| U.S. Notes (2033) | $600 | June 2033 | 6.25% |
| Euro Notes (2031) | $835 | March 2031 | 4.13% |
Market Trends and Challenges
In the nine months ended September 30, 2024, LKQ faced challenges such as:
- Organic revenue decline due to reduced aftermarket collision volumes.
- Lower prices for precious metals impacting revenue.
- Increased competition affecting pricing strategies.
How LKQ Corporation (LKQ) Makes Money
Revenue Streams
LKQ Corporation generates revenue primarily through the sale of aftermarket and refurbished auto parts, as well as through its self-service vehicle recycling operations. The company operates in several segments: Wholesale - North America, Europe, Specialty, and Self Service.
| Segment | Revenue (in millions) | Percentage Change (2024 vs 2023) |
|---|---|---|
| Wholesale - North America | $4,396 | 16.4% |
| Europe | $4,896 | 2.5% |
| Specialty | $1,305 | 0.6% |
| Self Service | $401 | (16.2%) |
| Total Revenue | $10,998 |
Cost of Goods Sold (COGS)
For the nine months ended September 30, 2024, LKQ reported a cost of goods sold of $6,712 million, which represents an increase from $6,189 million in the prior year. The COGS as a percentage of revenue increased to 61.0% from 59.7%.
Segment EBITDA Performance
Segment EBITDA is a key performance indicator for LKQ, showing profitability across its various segments.
| Segment | Segment EBITDA (in millions) | Percentage of Revenue |
|---|---|---|
| Wholesale - North America | $728 | 16.6% |
| Europe | $482 | 9.8% |
| Specialty | $99 | 7.6% |
| Self Service | $39 | 9.7% |
Operating Expenses
For the nine months ended September 30, 2024, LKQ's selling, general, and administrative (SG&A) expenses were $2,991 million, representing 27.2% of total revenue, a slight decrease from 27.5% in the prior year.
Net Income and Earnings Per Share
LKQ reported a net income of $536 million for the nine months ended September 30, 2024, down from $760 million in the previous year. The basic earnings per share (EPS) for the period was $2.02, compared to $2.84 in 2023.
| Metric | 2024 | 2023 |
|---|---|---|
| Net Income (in millions) | $536 | $760 |
| Basic EPS | $2.02 | $2.84 |
Liquidity and Capital Resources
As of September 30, 2024, LKQ had total liquidity of $1,524 million, consisting of $1,171 million available under revolving credit facilities and $353 million in cash and cash equivalents. Total debt outstanding was $4,371 million.
Strategic Acquisitions
LKQ has pursued growth through acquisitions, including the notable acquisition of Uni-Select in 2023, which contributed significantly to revenue growth in the Wholesale - North America segment.
Market Challenges
The company faced challenges such as lower aftermarket volumes and inflationary pressures, impacting its organic revenue. Parts and services organic revenue decreased by 4.1% for the nine months ended September 30, 2024.
Overall, LKQ Corporation continues to leverage its diverse revenue streams while navigating market complexities and focusing on strategic growth initiatives.
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Article updated on 8 Nov 2024
Resources:
- LKQ Corporation (LKQ) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of LKQ Corporation (LKQ)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View LKQ Corporation (LKQ)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.