• Revenue of $3.7 billion (an 8% increase compared to the same period in 2023)
• Diluted EPS2 of $0.70; adjusted diluted EPS1,2 of $0.98
• Second quarter operating cash flow of $213 million; free cash flow1 of $133 million
• Repurchased $125 million of LKQ shares
• Dividend of $0.30 per share approved to be paid in the third quarter of 2024
• Annual guidance updated

Chicago,IL. LKQ Corporation (Nasdaq: LKQ) today reported second quarter 2024 financial results. “Our second quarter performance did not meet expectations as lower repairable claims in North America and difficult macroeconomic conditions in Europe led to declines in overall volumes. In light of soft demand, our teams acted with agility and decisiveness to address our cost structure and protect our margins,” noted Justin Jude, President and Chief Executive Officer.

Mr. Jude further stated: “We believe current market headwinds are temporary in nature but expect them to persist for the balance of the year. As we look ahead, we will continue to prioritize our strategic pillars of profitable revenue growth, margin enhancement and cash flow generation, while enhancing our operational excellence focus to maximize our performance. Guided by our strategic pillars, we will continue to evaluate our portfolio to determine if we are the right owners of our various businesses, and we have placed a pause on any large-scale acquisitions and have raised the bar for approving tuck-in acquisitions. I am confident that these actions, combined with a capital allocation policy that will prioritize returning value to shareholders while maintaining our investment grade status, will enhance shareholder value to reflect LKQ’s unique strengths and market leading positions in our core segments.”

Second Quarter 2024 Financial Results

Revenue for the second quarter of 2024 was $3.7 billion, an increase of 7.6% compared to $3.4 billion for the second quarter of 2023. For the second quarter of 2024, parts and services organic revenue decreased 2.1% (2.9% decrease on a per day basis), the net impact of acquisitions and divestitures increased revenue by 11.8%, and foreign exchange rates decreased revenue by 0.6% year over year, for a total parts and services revenue increase of 9.0%. Other revenue for the second quarter of 2024 fell 16.2% primarily due to weaker precious metals prices and lower scrap steel volumes relative to the same period in 2023.

Net income2 for the second quarter of 2024 was $185 million compared to $281 million for the same period of 2023. Diluted earnings per share2 for the second quarter of 2024 was $0.70 compared to $1.05 for the same period of 2023, a decrease of 33.3%.

On an adjusted basis, net income1,2 for the second quarter of 2024 was $261 million compared to $291 million for the same period of 2023, a decrease of 10.4%. Adjusted diluted earnings per share1,2 was $0.98 for the second quarter of 2024 compared to $1.09 for the same period of 2023, a decrease of 10.1%.

Cash Flow and Balance Sheet

Cash flow from operations and free cash flow1 were $213 million and $133 million, respectively, for the second quarter of 2024. Cash flow from operations and free cash flow1 were $466 million and $320 million, respectively, for the six months ended June 30, 2024. As of June 30, 2024, the balance sheet reflected total debt of $4.3 billion and total leverage, as defined in our credit facility, was 2.3x EBITDA.

Stock Repurchase and Dividend Programs

During the second quarter of 2024, the Company returned over $200 million to its shareholders by investing $125 million to repurchase 2.9 million shares of its common stock and distributing approximately $80 million in cash dividends. For the six months ended June 30, 2024, the Company has repurchased 3.5 million shares of its common stock for $155 million, and since initiating the stock repurchase program in late October 2018, the Company has repurchased approximately 59 million shares of its common stock for a total of $2.6 billion through June 30, 2024. As of June 30, 2024, there was $921 million remaining on the authorization.

On July 23, 2024, the Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock, payable on August 29, 2024, to stockholders of record at the close of business on August 15, 2024.

Other Events

In the second quarter of 2024, we entered into definitive agreements to divest our operations in (i) Slovenia, which closed in April 2024; (ii) Poland, which we expect to close in the third quarter of 2024 subject to customary closing conditions; and (iii) Bosnia, which we expect to close in the second half of 2024 subject to customary closing conditions and regulatory approval. After thorough consideration, we determined our operations in Slovenia, Poland and Bosnia did not align with our long-term strategy and financial return objectives. Terms of the transactions were not disclosed.

On June 21, 2024, the Company announced a new collective bargaining agreement with the trade union Verdi. The agreement covers approximately 5,000 employees of LKQ Europe in Germany, including 730 colleagues at LKQ’s Sulzbach-Rosenberg distribution center. The collective bargaining agreement has a two-year duration, which expires on April 30, 2026. The tariff agreement includes a mandatory peace obligation, which immediately ends all strike activity throughout the term of the agreement.

On July 22, 2024, the Company announced that it had appointed Andrew Clarke to its Board of Directors. LKQ's Board of Directors regularly evaluates its composition with the objective of including the appropriate skills, experience and perspectives to enhance the prospects for the growth and profitability of the Company on behalf of its stockholders.

2024 Outlook

“Based on a projected continuation of the revenue headwinds we experienced in the first half of 2024, we are lowering our full year guidance. While we have taken actions to reduce costs and protect our margins and cash flows, the benefits are not expected to offset the full impact of the lower revenue expectation,” stated Rick Galloway, Senior Vice President and Chief Financial Officer. “We are confident in LKQ’s ability to deliver on these expectations given our market-leading businesses, successful operational excellence strategy and the strength of our team.”

For 2024, management updated the outlook as set forth below:

Our outlook for the full year 2024 is based on current conditions, recent trends and our expectations, and assumes a global effective tax rate of 26.8%, the prices of scrap and precious metals hold near the June average and no further deterioration due to the Ukraine/Russia conflict. We have applied foreign currency exchange rates near second quarter average levels, including $1.09, $1.27 and $0.73 for the euro, pound sterling and Canadian dollar, respectively, for the balance of the year. Changes in these conditions may impact our ability to achieve the estimates. Adjusted figures exclude (to the extent applicable) the impact of restructuring and transaction related expenses; amortization expense related to acquired intangibles; excess tax benefits and deficiencies from stock-based payments; losses on debt extinguishment; impairment charges; direct impacts of the Ukraine/Russia conflict; and gains and losses related to acquisitions or divestitures (including changes in the fair value of contingent consideration liabilities).

(1) Non-GAAP measure. See the table accompanying this release that reconciles the actual or forecasted U.S. GAAP measure to the actual or forecasted adjusted measure, which is non-GAAP.

(2) References in this release to Net income and Diluted earnings per share, and the corresponding adjusted figures, reflect amounts from continuing operations attributable to LKQ stockholders.

Non-GAAP Financial Measures

This release contains (and management’s presentation on the related investor conference call will refer to) non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included with this release are reconciliations of each non-GAAP financial measure with the most directly comparable financial measure calculated in accordance with GAAP.

About LKQ Corporation

LKQ Corporation (www.lkqcorp.com) is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. LKQ has operations in North America, Europe and Taiwan. LKQ offers its customers a broad range of OEM recycled and aftermarket parts, replacement systems, components, equipment, and services to repair and accessorize automobiles, trucks, and recreational and performance vehicles.

About LKQ Europe

LKQ Europe, a subsidiary of LKQ Corporation (www.lkqcorp.com), headquartered in Zug, Switzerland, is the leading distributor of automotive aftermarket parts for cars, commercial vans, and industrial vehicles in Europe. It currently employs approximately 27,500 people with a network of more than 1,000 branches and approximately $6.3 billion in revenue in 2023. The organization supplies more than 100,000 workshops in over 18 European countries in the following regions: Benelux-France, Central Eastern Europe, DACH, Italy, Scandinavia and UK & Ireland.

Investor Relations Contact

Joseph P. Boutross

Vice President, Investor Relations

LKQ Corporation

T   +1 312 621-2793
E   jpboutross@lkqcorp.com

Media Contact Europe

LKQ Europe Communications

E   lkqeurope@citypress.co.uk